297728400-Labor-Law-Review-Digests.pdf

LABOR LAW REVIEW Case Digests – Atty. Marlon Manuel

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SAN BEDA COLLEGE OF LAW | 4B 2015-2016 BAHILLO. BARRUGA. BAUTISTA. BORLAGDAN. CABOCHAN. CABRERA. CALIPAY. CAMBRI. CHIONG. DATUIN. DIAZ. DIOLA. ENCARNACION. FERNANDEZ, L. FERNANDEZ, R. FERNANDO. GONZALES. GRATUITO. ILAGAN. JUANICO. MACALOS. MADAMBA. MANCENIDO. MANZANO. ONG. PANGILINAN. PERALTA. RAGAZA. RIVERA. SENORAN. SEPACIO. SURTIDA. TAN. TANDAAN. TUMANG. YUMANG-MEDINA.

PART I RIGHT TO SELF-ORGANIZATION Concept and Scope Arts. 243, 246, 277 (c), 212 (e, f) Omnibus Rules, Book V, Rule I-Rule II, as amended by D.O. 40, series of 2001 NUWHRAIN-MPHC v Secretary of Labor and Employment, July 31, 2009 Labor Organizations and Registration of Unions Labor Code: Arts. 212 (g, h), 231, 234-242, 277 (a) Omnibus Rules, Book V, Rule I, Sec. I (a, h-p, w, cc, ee, ff, jj, kk, zz, ccc), Rule III-V, XIV-XV, as amended by D.O. 40-03, as further amended by D.O. 40-B. R.A. No. 9481, Sec. 1-9 Department Order No. 40-F-03, series of 2008. (Implementing Rules for R.A. 9481 amendments) San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization (SMCEUPTGWO) v. San Miguel Packaging Products Employees Union-Pambansang Diwa Ng Manggagawang Pilipino (SMPPEU-PDMP), September 12, 2007 The Heritage Hotel Manila (Owned and Operated By Grand Plaza Hotel Corporation) v. Pinag-Isang Galing at Lakas Ng Mga Manggagawa sa Heritage Manila (Piglas-Heritage), October 30, 2009 Eagle Ridge Golf and Country Club v. CA, March 18, 2010 Samahang Manggagawa sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and Coating Corp, March 16, 2011 Yokohama Tire Phils. v. Yokohama Employees Union, March 10, 2010 Eligibility for Membership; Special Groups of Employees Labor Code: Arts. 245, 212 (m) R.A. No. 9481, Sec. 8-9 Department Order No. 40-F-03, series of 2008 Omnibus Rules, Book V, Rule I, Sec. I (hh), (nn), (xx), as amended by D.O. 40 Cathay Pacific Steel Corp. v. CA, August 2006 San Miguel Corp. Supervisors and Exempt Union v. Laguesma, August 15, 1997 Standard Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank, April 22, 2008 Coastal Subic Bay Terminal v. DOLE, November 20, 2006 Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, August 3, 2010 San Miguel Foods v SMC supervisors and Exempt Union, August 1, 2011 Union Security Clause BPI v BPI Employees Union, August 10, 2010 (Main Decision and Dissenting Opinion), October 19, 2011 General Milling Corp v Casio, March 10, 2010 PICOP Resources v Taneca, August 9, 2010 Victoriano v Elizalde Rope Workers Union, 59 SCRA 54 Kapatiran sa Meat and Canning Division v Ferrer-Calleja, 162 SCRA 367 Conditions of Membership and Rights of Members Labor Code: Arts. 241, 274, 222 (b) Omnibus Rules, Book V, Rule XI, XII, XIII, XVIII, XX, as amended by D.O. 40 NOTE: Compare the original provisions of the Labor Code with the amended provisions of R.A. No. 9481.

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For reference: Atlas Litographic Services v. Laguesma, 205 SCRA 12 De La Salle University Medical Center v. Laguesma, 294 SCRA 141 Tagaytay Highlands v. Tagaytay Highlands Employees Union- PTGWO, January 22, 2003 PART II BARGAINING UNIT Omnibus Rules, Book V, Rule I, Sec. 1 (d, t), as amended by D.O. 40-03 De La Salle v. De La Salle University Employees’ Association, 330 SCRA 363 San Miguel Foods v. San Miguel Corp. Supervisors and Exempt Union, August 1, 2011 Holy Child Catholic School v. HCCS-TELU-PIGLAS, July 23, 2013 BARGAINING AGENT, CERTIFICATION ELECTION PROCEEDINGS Labor Code: Arts. 255-259, 258-A (Note: Arts. 256 & 257 had been amended by R.A. 9481) Omnibus Rules, Book V , Rule I, Sec. 1 (d, h, j, o, p, q, t, ll, ss, bbb), Rules VI-X, as amended by D.O. 40, and further amended by D.O. 40-F-03, series of 2008 Republic of the Philippines, represented by DOLE, v. Kawashima Textile, July 23, 2008 St. James School of Quezon City v. Samahang Manggagawa sa St. James, November 23, 2005 DHL Phils. United Rank and File Association v. Buklod ng Manggagawa ng DHL Phils., July 22, 2004 Sta. Lucia East Commercial Corporation v. Hon. Secretary Of Labor, August 14, 2009 Samahan Ng Mga Manggagawa Sa Samma–Lakas Sa Industriya Ng Kapatirang Haligi Ng Alyansa (Samma–Likha) v. Samma Corporation, March 13, 2009 Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and Chris Garments Workers UnionPTGWO, January 12, 2009 National Union Of Workers In Hotels, Restaurants And Allied Industries- Manila Pavilion Hotel Chapter v. Secretary of Labor, July 31, 2009 Eagle Ridge Golf and Country Club v. CA, March 18, 2010 PICOP Resources, Inc. v. Tañeca, August 9, 2010 Legend International Resorts v. Kilusang Manggagawa ng Legend, February 23, 2011 Samahang Manggagawa Sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and Coating Corp., March 16, 2011 Voluntary Recognition Sta. Lucia East Commercial Corporation v. Hon. Secretary Of Labor, August 14, 2009 For reference: Coastal Subic Bay Terminal v. DOLE, November 20, 2006 PART III COLLECTIVE BARGAINING Labor Code: Arts. 250-254, 247-249, 261 Omnibus Rules, Book V, Rule I, Sec. 1 (d, h, j, t, bbb), Rules XVI-XVII, as amended by D.O. 40-03 Art. 231, 212 (n), 260-262 (b), 277 (f,g,h) Omnibus Rules, Book V, Rule XIX, XXI, as amended by D.O. 40-03 Union of Filipro Employees v. Nestle Phils., March 3, 2008 PAL v. PALEA, March 12, 2008 San Miguel Foods v. San Miguel Corporation Employees Union, October 5, 2007 Capitol Medical Center v. Trajano, June 30, 2005 Standard Chartered Bank Employees Union v. Confesor, June 16, 2004 General Milling Corporation v. CA, February 11, 2004

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FVC Labor Union-Philippine Transport and General Workers Organization (FVCLU-PTGWO) v. Sama-Samang Nagkakaisang Manggagawa Sa FVC-Solidarity Of Independent And General Labor Organizations (SANAMA-FVCSIGLO), November 27, 2009 RFM Corporation v. KAMPI-NAFLU-KMU, February 4, 2009 Fulache v. ABS-CBN, GR No. 183810, January 21, 2010 Employees Union of Bayer v. Bayer Phils., December 6, 2010 General Milling Corp. Independent Labor Union v. General Milling, June 15, 2011 Malayan Employees Association v. Malayan Insurance Co., February 2, 2010 Santuyo v. Remerco Garments, March 22, 2010 Insular Hotel Employees Union v. Waterfront Insular Hotel, September 22, 2010 Cirtek Employees Labor Union v. Cirtek Electronics, November 15, 2010 Eastern Telecoms v. Eastern Telecoms Employees Union, February 8, 2012 PNCC Skyway Traffic Management & Security Division Workers Organization v. PNCC Skyway Corp., February 17, 2010 Supreme Steel v. Nagkakaisang Manggagawa sa Supreme, March 28, 2011 For reference: Halagueña, et al., and other flight attendants of Philippine Airlines v Philippine Airlines, October 2, 2009 PASSI v. Boclot, September 28, 2007 PART IV UNFAIR LABOR PRACTICES Labor Code:

Arts. 247-249, 261

Employees Union of Bayer Phils. v. Bayer Phils., December 6, 2010 Prince Transport v. Garcia, January 12, 2011 Manila Mining Employees Corp. v. Manila Mining, September 29, 2010 Central Azucarera de Bais Employees Union v. Central Azucarera de Bais, Nov. 17, 2010 BPI Employees Union-Davao v. BPI, July 24, 2013 Pepsi Cola Products v. Molon et al., February 18, 2013 Royal Plant Workers Union v. Coca Cola Bottlers, April 15, 2013 Goya v. Goya Employees Union, January 21, 2013 STRIKES, LOCKOUTS AND CONCERTED ACTIONS Arts. 212 (o-s), 263-266, 254; Rules, Book V, Rule XXII, as amended by D.O. 40-03, and further amended by D.O. 40A and D.O. 40-G-03 (2010) Bukluran ng Manggagawa sa Clothman Knitting v. CA, January 17, 2005 Steel Corporation v. SCP Employees Union, April 16, 2008 Biflex Phils. v. Filflex Industrial & Manufacturing Corp., Dec. 19, 2006 Bascon & Cole v. CA, February 5, 2004 Toyota Motor Phils. Corp. Workers Association v. Toyota Motor Phils, Oct. 19, 2007 NUWHRAIN Dusit Hotel Nikko Chapter v. CA, November 11, 2008 Capitol Medical Center v. NLRC, GR 147080, April 26, 2005 Trans-Asia Shipping Lines-Unlicensed Crews Employees Union v. CA, July 7, 2004 Manila Diamond Hotel Employees Union v. CA, Secretary, December 16, 2004 Philcom Employees Union v. Phil. Global Communications, July 17, 2006 Nissan Motors v. Secretary, June 21, 2006 FEU-NRMF v. FEU-NRMFEA-AFW, October 16, 2006 Pilipino Telephone Corporation v. PILTEA, June 22, 2007 Club Filipino v. Bautista, July 13, 2009 A. Soriano Aviation v. Employees Association of A. Soriano Aviation, August 14, 2009 Jackbilt Industries v. Jackbilt Employees Union, March 20, 2009 Alcantara & Sons v. CA, GR G.R. No. 155109, September 29, 2010 PHIMCO Industries, Inc. v. PILA, August 11, 2010 Solidbank Corporation v. Gamier, November 15, 2010

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Escario v. NLRC, September 27, 2010 Bagong Pagkakaisa ng Manggagawa sa Triumph v. Secretary, July 5, 2010 Fadriquelan v. Monterey Foods, June 8, 2011 Magdala Multipurpose & Livelihood v. KMLMS, October 19, 2011 Automotive Engine Rebuilders v. Progresibong Unyon, July 13, 2011; January 16, 2013 Naranjo v. Biomedica Heath Care, September 19, 2012 VCMC v. Yballe, January 15, 2014 PART V EMPLOYER-EMPLOYEE RELATIONSHIP A. Elements of Relationship Labor Code: Article 97 (a), (b), (c), (e); 167 (f), (g); 212 (e) & (f) Cases: Television and Production Exponents v. Servaña (GR 167648, January 28,2008) ABS-CBN Broadcasting Corp. v. Nazareno (GR 164156, Sept. 26, 2006) Fulache v. ABS-CBN (January 21, 2010) (These three cases should be read in relation to Sonza v. ABS-CBN Broadcasting Corporation [GR 138051, June 10, 2004]) Bernante v. PBA (September 14, 2011) Abella v. PLDT (GR 159469, June 8, 2005) Consulta v. CA (GR 145443, March 18, 2005) Villamaria v. CA (GR 165881, April 19, 2006) Republic of the Philippines v. ASIAPRO Cooperative (GR 172101, November 23, 2007) Phil. Global Communications v. De Vera (GR 157214, June 7, 2005) Coca Cola Bottlers v. Climaco (GR 146881, February 5, 2007) Chavez v. NLRC (GR 146530, January 17, 2005) Angelina Francisco v. NLRC (GR 170087, August 31, 2006) Tongko v. Manufacturers Life Insurance (GR 167622, June 29, 2010 & January 25, 2011) Intel Technology v. NLRC & Cabiles, February 5, 2014 Matling Industrial v. Coros (October 13, 2010) Cosare v. Broadcom Asia, February 5, 2014 Atlanta Industries v. Sebolino (January 26, 2011) Republic v. Asiapro Cooperative (November 23, 2007) B. Independent Contractors and Labor-Only Contractors Labor Code: Art. 106-109 Department Order No. 18-A, series of 2011 (which amended D.O. No. 18, s. 2002) Cases: Philippine Airlines v. Ligan (GR 146408, February 29, 2008) San Miguel Corporation v. Aballa (GR 149011, June 28, 2005) Meralco Industrial Engineering Services v. NLRC (GR 145402, March 14, 2008) Manila Electric Company v. Benamira (GR 145271, July 14, 2005) Dole Phils. v. Esteva (GR No. 161115, November 30, 2006) Aliviado v. Procter and Gamble (GR 160506, March 9, 2010) Temic Automotive v. Temic Automotive Phils. Employees Union (GR 186965, December 23, 2009) Smart Communications v. Astorga (GR 148132, January 28, 2008) Coca-Cola Bottlers v. Agito (GR 179546, February 13, 2009) Manila Water v. Dalumpines (GR 175501, October 4, 2010) Babas v. Lorenzo Shipping (GR 186091, December 15, 2010) Teng v. Pahagac (GR 169704, November 17, 2010) PART VI CLASSES OF EMPLOYEES

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Arts. 278, 280-281; Rules, Book VI, Secs. 5-6 Magis Young Achievers’ Learning Center v. Manalo, February 13, 2009 Pier 8 Arrastre & Stevedoring Services v. Boclot, September 28, 2007 The Peninsula Manila v. Alipio, June 17, 2008 Rowell Industrial Corporation v. CA, March 7, 2007 ABS-CBN Broadcasting Corp. v. Nazareno, September 26, 2006 Kimberly Clark Phils. v. Secretary, November 23, 2007 Benares v. Pancho, April 29, 2005 Hacienda Bino/Hortencia Starke v. Cuenca, April 15, 2005 Gapayao v. Fulo, June 13, 2013 Universal Robina Sugar Milling Corp. v. Acibo, January 15, 2014 Filipinas Pre-fabricated Building Systems (FilSystems) v. Puente, March 18, 2005 St. Mary’s University v. CA, March 8, 2005 Poseidon Fishing v. NLRC, February 20, 2006 PLDT v. Arceo, May 5, 2006 Fulache v. ABS CBN, January 21, 2010 Leyte Geothermal Power Progressive Employees Union v. PNOC, March30, 2011 Asos v. PNCC, July 3, 2013 Malicdem v. Marulas Industrial Corp., February 26, 2014 Exodus International Construction v. Biscocho, February 23, 2011 DM Consunji v. Gobres, August 8, 2010 Mercado v. AMA Computer College, April 13, 2010 Colegio del Santisimo Rosario v. Rojo, September 4, 2013 University of the East v. Pepanio, January 23, 2013 Herrera-Manaois v. St. Scholastica’s College, December 11, 2013 PART VII SECURITY OF TENURE Arts. 277 (b), 279, 282-287; Rules, Book VI, Secs. 2, 5, 6, Book V, Rule XXIII Just Causes Salas v. Aboitiz One, June 27, 2008 RB Michael Press v. Galit, February 13, 2008 San Miguel Corporation v. NLRC, April 16, 2008 LBC Express v. Mateo, June 9, 2009 Genuino v. NLRC, December 4, 2007 Bughaw v. Treasure Island, March 28, 2008 Moreno v. San Sebastian College, March 28, 2008 Janssen Pharmaceutica v. Silayro, February 26, 2008 Suico v. NLRC, January 30, 2007 Perez & Doria v. PT&T, April 7, 2009 Bacolod-Talisay Realty v. Dela Cruz, April 30, 2009 Prudential Guarantee & Assurance Labor Union v. NLRC, June 13, 2012 Cosmos Bottling Co. v. Fermin, June 20, 2012 Sampaguita Auto Transport v. NLRC & Sagad, January 30, 2013 Dongon v. Rapid Movers, Augsut 28, 2013 Alilem Credit Cooperative v. Bandiola, February 25, 2013 Cavite Apparel v. Marquez, February 6, 2013 Esguerra v. Valle Verde, June 13, 2012 Authorized Causes Andrada v. NLRC, December 28, 2007 Manatad v. PT&T, March 7, 2008 Linton Commercial v. Hellera, October 10, 2007 AMA Computer College v. Garcia, April 14, 2008 GSWU-NAFLU-KMU v. NLRC, October 17, 2006 Dickinson Philippines v. NLRC, November 15, 2005

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PT & T v. NLRC, April 15, 2005 Oriental Petroleum v. Fuentes, October 14, 2005 FASAP v. PAL, July 22, 2008 and October 2, 2009 General Milling Corp. v. Viajar, January 30, 2013 Constructive Dismissal/Preventive Suspension Maricalum v. Decorion, April 12 2006 Uniwide Sales v. NLRC, February 29, 2008 Norkis Trading v. Genilo, February 11, 2008 Fungo v. Lourdes School, July 27, 2007 The University of the Immaculate Conception v. NLRC, January 26, 2011 Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, January 19, 2011 Dreamland Hotel v. Johnson, March 12, 2014 Union Security Clause Alabang Country Club v. NLRC, February 14, 2008 Inguillo v. First Philippine Scales, June 5, 2009 General Milling Corp. v. Casio, March 10, 2010 Disease Crayons Processing v. Pula, July 30, 2007 Villaruel v. Yeo Han Guan, June 1, 2011 Padillo v. Rural bank of Nabunturan, January 21, 2013 Temporary Suspension of Operations/Floating Status Manila Mining Corp. Employees Association v. Manila Mining Corp., September 29, 2010 Nippon Housing v. Leynes, August 3, 2011 SKM Art Corp. v. Bauca, November 27, 2013 Illegal Strike Jackbilt Industries v. Jackbilt Employees Union, March 20, 2009 Escario v. NLRC, September 27, 2010 Abaria v. NLRC, December 7, 2011 (relate to Bascon v. CA, February 5, 2004) PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010 Suspension Caong v. Regualos, January 26, 2011 Consequences of Dismissal Composite Enterprises v. Caparoso, August 8, 2007 Sagum v. CA, May 26, 2005 Agabon v. NLRC, November 17, 2004 Jaka Food Processing v. Pacot, March 28, 2005 Industrial Timber v. Ababon, March 30, 2006 Sangwoo Phil. v. Sangwoo Phils. Employees Union, December 9, 2013 Equitable Banking v. Sadac, June 8, 2006 Carlos v. CA, August 28, 2007 Tomas Claudio Memorial College v. CA, February 16, 2004 Chronicle Securities v. NLRC, November 25, 2004 Intercontinental Broadcasting v. Benedicto, July 20, 2006 Velasco v. NLRC, June 26, 2006 PCIB v. Abad, February 28, 2005 Bago v. NLRC, April 4, 2007 Panuncillo v. CAP Phils., February 9, 2007

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Garcia v. Philippine Airlines, January 20, 2009 Islriz v.Capada, January 31, 2011 Lansangan v. Amkor Technology Philippines, January 30, 2009 Palteng v. UCPB, February 27, 2009 Alcantara & Sons v. CA, September 29, 2010 Aboc v. Metrobank, December 13, 2010 Prince Transport v. Garcia, January 12, 2011 Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, January 19, 2011 Pfizer v. Velasco, March 9, 2011 Luna v. Allado Construction, May 30, 2011 Villaruel v. Yeo Han Guan, June 1, 2011 Nacar V. Gallery Frames, August 13, 2013 Integrated Microelectronics V. Pionilla, August 28, 2013 United Tourist Promotion V. Kemplin, February 5, 2014 PART VIII DISPUTE SETTLEMENT Labor Code: Arts. 128-129, 213-226, 254, 260-262-B, 263 (g-i), 273-275, 277 (b), 290-292, note the amendments introduced by R.A. 9347 Executive Order No. 126 & 251 People’s Broadcasting v. Secretary, May 8, 2009 Diokno v. Cacdac, July 4, 2007 Jaguar Security v. Sales, April 22, 2008 Pioneer Concrete Philippines v. Todaro, June 8, 2007 Tegimenta Chemical Phils. v. Buensalida, June 17, 2008 Metro Transit Organization v. PIGLAS NFWU-KMU, April 14, 2008 Hacienda Valentin-Balabag v. Secretary, February 11, 2008 Pentagon Steel Corp. v. CA, June 26, 2009 Masmud v. NLRC, February 13, 2009 Negros Metal Corp. v. Lamayo, August 25, 2010 Albert Teng Fish Trading v. Pahagac, November 17, 2010 Sarona v. NLRC, January 18, 2012. McBurnie v. Ganzon, EGI-Managers, Inc., October 17, 2013 Prince Transport v. Garcia, January 12, 2011. Manila Pavillion v. Delada, January 25, 2012 Unilever v. Rivera, June 3, 2013. Phil. Carpet Manufacturing Corp. v. Tagyamon, December 11, 2013 Nacar v. Gallery Frames, August 13, 2013

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1. YES. The inclusion of Gatbonton’s vote was proper not because it was not questioned but because probationary employees have the right to vote in a certification election. The votes of the five other probationary employees should thus also have been counted. Rule II, Sec. 2 of Department Order No. 40­03, series of 2003, which amended Rule XI of the Omnibus Rules Implementing the Labor Code, provides:

RIGHT TO SELF ORGANIZATION NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIES ­ MANILA PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR AND EMPLOYMENT G.R. No. 181531. July 31, 2009. FACTS In a certification election conducted among the rank and file employees of respondent Holiday Inn Manila Pavilion Hotel (the Hotel), the following results were obtained:

For purposes of this section, any employee, whether employed for a definite period or not, shall beginning on the first day of his/her service, be eligible for membership in any labor organization. The period of reckoning in determining who shall be included in the list of eligible voters is in cases where a timely appeal has been filed from the Order of the Med­Arbiter, the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory. The provision in the CBA disqualifying probationary employees from voting cannot override the Constitutionally­protected right of workers to self­organization, as well as the provisions of the Labor Code and its Implementing Rules on certification elections and j urisprudence thereon.

EMPLOYEES IN VOTERS LIST = 353 TOTAL VOTES CAST = 346 NUWHRAIN­MPHC = 151 HIMPHLU = 169 NO UNION = 1 SPOILED = 3 SEGREGATED = 22 Among the segregated were five votes on the on the ground that they were cast by probationary employees and, pursuant to the existing Collective Bargaining Agreement (CBA), such employees cannot vote. It bears noting early on, however, that the vote of one Jose Gatbonton (Gatbonton), a probationary employee, was counted.

2. NO. under the so­called double majority rule, for there to be a valid certification election, majority of the bargaining unit must have voted AND the winning union must have garnered majority of the valid votes cast. Prescinding from the Courts ruling that all the probationary employees votes should be deemed valid votes while that of the supervisory employees should be excluded, it follows that the number of valid votes cast would increase from 321 to 337. Under Art. 256 of the Labor Code, the union obtaining the majority of the valid votes cast by the eligible voters shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate bargaining unit. This majority is 50% + 1. Hence, 50% of 337 is 168.5 + 1 or at least 170. HIMPHLU obtained 169 while petitioner received 151 votes. Clearly, HIMPHLU was not able to obtain a majority vote.

Med­Arbiter Calabocal ruled for the opening of 17 out of the 22 segregated votes, except the five votes of the probationary employees. Petitioner, which garnered 151 votes, appealed to the Secretary of Labor and Employment (SOLE), arguing that the votes of the probationary employees should have been opened considering that probationary employee Gatbonton’s vote was tallied. And petitioner averred that respondent HIMPHLU, which garnered 169 votes, should not be immediately certified as the bargaining agent, as the opening of the 17 segregated ballots would push the number of valid votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 votes which HIMPHLU garnered would be one vote shortof the majority which would then become 69. The Secretary of Labor and Employment (SOLE), through then Acting Secretary Luzviminda Padilla, affirmed the Med­Arbiters Order.

SAN MIGUEL CORPORATION EMPLOYEES UNION–PHILIPPINE TRANSPORT AND GENERAL WORKERS ORGANIZATION (SMCEU–PTGWO), petitioner, vs. SAN MIGUEL PACKAGING PRODUCTS EMPLOYEES UNION–PAMBANSANG DIWA NG MANGGAGAWANG PILIPINO (SMPPEU– PDMP), respondent G.R. No. 171153, September 12, 2007

ISSUES: 1. Whether or not the five votes of the probationary employees should be opened. 2. Whether HIMPHLU should be certified as the exclusive bargaining unit. HELD:

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(2) No. After an exhaustive study of the governing labor law provisions, both statutory and regulatory, the court finds no legal justification to support the conclusion that a trade union center is allowed to directly create a local or chapter through chartering. Department Order No. 9 mentions two labor organizations either of which is allowed to directly create a local or chapter through chartering – a duly registered federation or a national union. Department Order No. 9 defines a "chartered local" as a labor organization in the private sector operating at the enterprise level that acquired legal personality through a charter certificate, issued by a duly registered federation or national union and reported to the Regional Office in accordance with Rule III, Section 2-E of these Rules.

FACTS: San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization (SMCEU-PTGWO) is the incumbent bargaining agent for the bargaining unit comprised of the regular monthly-paid rank and file employees of the three divisions of San Miguel Corporation (SMC), namely, the San Miguel Corporate Staff Unit (SMCSU), San Miguel Brewing Philippines (SMBP), and the San Miguel Packaging Products (SMPP), in all offices and plants of SMC while San Miguel Packaging Products Employees Union–Pambansang Diwa ng Manggagawang Pilipino (SMPPEU–PDMP) is registered as a chapter of Pambansang Diwa ng Manggagawang Pilipino (PDMP). SMCEU-PTGWO filed a petition for the cancellation of SMPPEU’s registration and its dropping from the rolls of legitimate labor organizations alleging that SMPPEU committed fraud and falsification in obtaining its certificate of registration and that PDMP does not have the power to create a local or a chapter since it is a trade union center. It was also found by the regional director that SMPPEU failed to comply with the 20% % membership requirement under the Labor Code.

Article 234 now includes the term trade union center, but interestingly, the provision indicating the procedure for chartering or creating a local or chapter, namely Article 234A, still makes no mention of a "trade union center. Also worth emphasizing is that even in the most recent amendment of the implementing rules,there was no mention of a trade union center as being among the labor organizations allowed to charter.

ISSUES: (1) Is SMPPEU, a chapter, required to comply with the 20% membership requirement under the Labor Code? (2) May PDMP, a trade union center, validly create local and chapters?

The Court deems it proper to apply the Latin maxim expressio unius est exclusio alterius. Under this maxim of statutory interpretation, the expression of one thing is the exclusion of another. When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred. If a statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded.

HELD: (1) No. The creation of a branch, local or chapter is treated differently. The Court, in the landmark case of Progressive Development Corporation v. Secretary, Department of Labor and Employment, declared that when an unregistered union becomes a branch, local or chapter, some of the aforementioned requirements for registration are no longer necessary or compulsory. Whereas an applicant for registration of an independent union is mandated to submit, among other things, the number of employees and names of all its members comprising at least 20% of the employees in the bargaining unit where it seeks to operate, as provided under Article 234 of the Labor Code and Section 2 of Rule III, Book V of the Implementing Rules, the same is no longer required of a branch, local or chapter. The intent of the law in imposing less requirements in the case of a branch or local of a registered federation or national union is to encourage the affiliation of a local union with a federation or national union in order to increase the local union's bargaining powers respecting terms and conditions of labor.

*A trade union center is any group of registered national unions or federations organized for the mutual aid and protection of its members; for assisting such members in collective bargaining; or for participating in the formulation of social and employment policies, standards, and programs, and is duly registered with the DOLE in accordance with Rule III, Section 2 of the Implementing Rules. THE HERITAGE HOTEL MANILA (OWNED AND OPERATED BY GRAND PLAZA HOTEL CORPORATION) V. PINAG-ISANG GALING AT LAKAS NG MGA MANGGAGAWA SA HERITAGE MANILA (PIGLAS-HERITAGE), G.R. No. 177024, Oct. 30, 2009 FACTS

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Sometime in 2000, certain rank and file employees of petitioner Heritage Hotel Manila formed the Heritage Hotel Employees Union (the HHE union). DOLE-NCR issued a certificate of registration to this union. the HHE union filed a petition for certification election. petitioner company opposed, alleging that the HHE union misrepresented itself to be an independent union, when it was, in truth, a local chapter of the NUWHRAIN. the company also filed a petition for the cancellation of the HHE unions registration certificate.

dual unionism and showed that the new union was merely an alter ego of the old. ISSUE: Whether or not the respondent union committed misrepresentation in its application for union registration? HELD: No. The Labor Code and its implementing rules do not require that the number of members appearing on the documents in question should completely dovetail. For as long as the documents and signatures are shown to be genuine and regular and the constitution and bylaws democratically ratified, the union is deemed to have complied with registration requirements.

the Med-Arbiter granted the HHE unions petition for certification election. Petitioner appealed to the Secretary of Labor but the latter denied the appeal and the motion for reconsideration, prompting the company to file a petition for certiorari with the Court of Appeals. the CA issued a writ of injunction against the holding of the HHE unions certification election, effective until the petition for cancellation of that unions registration shall have been resolved with finality. The decision of the CA became final when the HHE union withdrew the petition for review that it filed with this Court.

Petitioner company claims that respondent PIGLAS union was required to submit the names of all its members comprising at least 20 percent of the employees in the bargaining unit. Yet the list it submitted named only 100 members notwithstanding that the signature and attendance sheets reflected a membership of 127 or 128 employees. This omission, said the company, amounted to material misrepresentation that warranted the cancellation of the unions registration.

On December 10, 2003 certain rank and file employees of petitioner company formed another union, the respondent Pinag-Isang Galing at Lakas ng mga Manggagawa sa Heritage Manila (the PIGLAS union). This union applied for registration with the DOLE-NCR and got its registration certificate. later, the members of the first union, the HHE union, adopted a resolution for its dissolution. The HHE union then filed a petition for cancellation of its union registration.

But, as the labor authorities held, this discrepancy is immaterial. A comparison of the documents shows that, except for six members, the names found in the subject list are also in the attendance and signature sheets. Notably, the bargaining unit that respondent PIGLAS union sought to represent consisted of 250 employees. Only 20 percent of this number or 50 employees were required to unionize. Here, the union more than complied with such requirement.

On September 4, 2004 respondent PIGLAS union filed a petition for certification election, that petitioner company also opposed, alleging that the new unions officers and members were also those who comprised the old union. According to the company, the employees involved formed the PIGLAS union to circumvent the Court of Appeals injunction against the holding of the certification election sought by the former union. Despite the companys opposition, however, the Med-Arbiter granted the petition for certification election. petitioner company filed a petition to cancel the union registration of respondent PIGLAS union. The company claimed that the documents submitted with the unions application for registration bore false information.

Labor laws are liberally construed in favor of labor especially if doing so would affirm its constitutionally guaranteed right to self-organization. Here, the PIGLAS unions supporting documents reveal the unmistakable yearning of petitioner companys rank and file employees to organize. This yearning should not be frustrated by inconsequential technicalities. EAGLE RIDGE GOLF AND COUNTRY CLUB VS. COURT OF APPEALS GR. No. 178989, March 18, 2010 Doctrine: Art. 234[c] requires the list of names of all the union members of an INDEPENDENT UNION comprising at least 20% of the bargaining unit. This should not be equated with the list of workers who participated in the organizational meetings (Art.234 [b]). Subsequent affidavits of retraction (withdrawal of membership) will not retroact to the time of application for registration or even way back to the organizational meeting.

Petitioner company alleged that the misrepresentation was evidenced by the discrepancy in the number of union members appearing in the application and the list as well as in the number of signatories to the attendance and signature sheets. The company further alleged that 33 members of respondent PIGLAS union were members of the defunct HHE union. This, according to the company, violated the policy against

FACTS

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Eagle Ridge Employees Union (EREU or Union) filed a petition for certification election in Eagle Ridge Golf & Country Club. Eagle Ridge opposed this petition, followed by its filing of a petition for the cancellation of certificate of registration claiming misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the numerical composition of the Union, and the election of its officers.

organization seeking to represent the bargaining unit of rank-and-file employees does not divest it of its status as a legitimate labor organization. FACTS: Samahang Manggagawa sa Charter Chemical Solidarity of Unions in the Philippines for Empowerment and Reforms (petitioner union) filed a petition for certification election among the regular rank-and-file employees of Charter Chemical and Coating Corporation (respondent company) with the Mediation Arbitration Unit of the DOLE, National Capital Region.

Eagle Ridge alleged that the EREU declared in its application for registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26 members. Also, Eagle Ridge contended that five employees who attended the organizational meeting had manifested the desire to withdraw from the union. The five executed individual affidavits or Sinumpaang Salaysay.

Med-Arbiter’s Ruling Dismissed the petition for certification election. It held that the list of membership of petitioner union consisted of 12 batchman, mill operator and leadman who performed supervisory functions. Under Article 245 of the Labor Code, said supervisory employees are prohibited from joining petitioner union which seeks to represent the rank-and-file employees of respondent company. As a result, not being a legitimate labor organization, petitioner union has no right to file a petition for certification election for the purpose of collective bargaining.

ISSUE Whether or not the separation of members from the Union can detrimentally affect the registration of the Union. HELD No. The fact that six union members, indeed, expressed the desire to withdraw their membership through their affidavits of retraction will not cause the cancellation of registration on the ground of violation of Art. 234(c) of the Labor Code requiring the mandatory minimum 20% membership of rank-and-file employees in the employees' union.

Department of Labor and Employment’s Ruling Allowed the certification election among the regular rank-and-file employees. There was no independent evidence presented to establish respondent company’s claim that some members of petitioner union were holding supervisory position.

Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees (112 x 205 = 22.4). When the EREU filed its application for registration on December 19, 2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement.

Court of Appeal’s Ruling It upheld the Med-Arbiter’s finding that petitioner union consisted of both rank-and-file and supervisory employees. ISSUE WON the alleged mixture of rank-and-file and supervisory employees of petitioner union’s membership is a ground for the cancellation of petitioner union’s legal personality.

Besides, it cannot be argued that the six affidavits of retraction retroact to the time of the application of registration or even way back to the organizational meeting. Prior to their withdrawal, the six employees in question were bona fide union members.

RULING No. The CA found that petitioner union has for its membership both rank-and-file and supervisory employees. However, petitioner union sought to represent the bargaining unit consisting of rank-andfile employees. Under Article 245 of the Labor Code, supervisory employees are not eligible for membership in a labor organization of rank-and-file employees. Thus, the appellate court ruled that petitioner union cannot be considered a legitimate labor organization pursuant to Toyota Motor Philippines v. Toyota Motor Philippines Corporation Labor Union (hereinafter Toyota).

With the withdrawal of six union members, there is still compliance with the mandatory membership requirement under Art. 234(c), for the remaining 24 union members constitute more than the 20% membership requirement of 22 employees. SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL v. CHARTER CHEMICAL and COATING CORPORATION G.R. No. 169717, March 16, 2011

Preliminarily, we note that petitioner union questions the factual findings of the Med-Arbiter, as upheld by

The inclusion of supervisory employees in a labor

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the appellate court, that 12 of its members, consisting of batchman, mill operator and leadman, are supervisory employees. However, petitioner union failed to present any rebuttal evidence in the proceedings below after respondent company submitted in evidence the job descriptions of the aforesaid employees. The job descriptions indicate that the aforesaid employees exercise recommendatory managerial actions which are not merely routinary but require the use of independent judgment, hence, falling within the definition of supervisory employees under Article 212(m) of the Labor Code. For this reason, we are constrained to agree with the Med-Arbiter, as upheld by the appellate court, that petitioner union consisted of both rank-andfile and supervisory employees.

Yokohama challenged 78 votes cast by dismissed employees. On the other hand, the Union challenged 68 votes cast by newly regularized rank-and-file employees and another five (5) votes by alleged supervisor-trainees. Yokohama formalized its protest and raised as an issue the eligibility to vote of the 78 dismissed employees,[5] while the Union submitted only a handwritten manifestation during the election. Petitioner argues that the Court of Appeals erred in ruling that the votes of the dismissed employees should be appreciated. Petitioner posits that employees who have quit or have been dismissed for just cause prior to the date of the certification election are excluded from participating in the certification election. Petitioner had questioned the eligibility to vote of the 78 dismissed employees.

Nonetheless, the inclusion of the aforesaid supervisory employees in petitioner union does not divest it of its status as a legitimate labor organization. The Court held that while there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code. YOKOHAMA TIRE PHILIPPINES, YOKOHAMA EMPLOYEES UNION G.R. No. 159553, December 10, 2007

INC.

Respondent counters that Section 2, Rule XII[16] of the rules implementing Book V of the Labor Code allows a dismissed employee to vote in the certification election if the case contesting the dismissal is still pending. Section 2, Rule XII, the rule in force during the November 23, 2001 certification election clearly, unequivocally and unambiguously allows dismissed employees to vote during the certification election if the case they filed contesting their dismissal is still pending at the time of the election. ISSUES I. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN DISALLOWING THE APPRECIATION OF THE VOTES OF SIXTY-EIGHT REGULAR RANK-AND-FILE.

v.

FACTS On October 7, 1999, respondent Yokohama Employees Union (Union) filed a petition for certification election among the rank-and-file employees of Yokohama. Upon appeal from the MedArbiters order dismissing the petition, the Secretary of the Department of Labor and Employment (DOLE) ordered an election with (1) Yokohama Employees Union and (2) No Union as choices.[3] The election held on November 23, 2001 yielded the following result:

II. WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN ALLOWING THE APPRECIATION OF VOTES OF ALL OF ITS EMPLOYEES WHO WERE PREVIOUSLY DISMISSED FOR SERIOUS MISCONDUCT AND ABANDONMENT OF WORK WHICH ARE CAUSES UNRELATED TO THE CERTIFICATION ELECTION. Was it proper to appreciate the votes of the dismissed employees The new rule has explicitly stated that without a final judgment declaring the legality of dismissal, dismissed employees are eligible or qualified voters. Thus,

YOKOHAMA EMPLOYEES UNION – 131 NO UNION – 117 SPOILED – 2 ----250

RULE IX CONDUCT OF CERTIFICATION ELECTION Section 5. Qualification of voters; inclusion-exclusion. . . . An employee who has been dismissed from work but has contested the legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of the order for the conduct of a certification election shall be considered a qualified voter, unless

VOTES CHALLENGED BY [YOKOHAMA] – 78 VOTES CHALLENGED BY [UNION] – 73 -----TOTAL CHALLENGED VOTES – 151 TOTAL VOTES CAST - 401

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his/her dismissal was declared valid in a final judgment at the time of the conduct of the certification election. Case cited - Engineering Equipment, Inc. v. NLRC (1984) “Among the characteristics of the managerial rank are: (1) he is not subject to the rigid observance of regular office hours; (2) his work requires the consistent exercise of discretion and judgment in its performance; (3) the output produced or the result accomplished cannot be standardized in relation to a given period of time; (4) he manages a customarily recognized department or subdivision of the establishment, customarily and regularly directing the work of other employees therein; (5) he either has the authority to hire or discharge other employees or his suggestions and recommendations as to hiring and discharging, advancement and promotion or other change of status of other employees are given particular weight; and (6) as a rule, he is not paid hourly wages nor subjected to maximum hours of work.”

xxxx Thus, we find no reversible error on the part of the DOLE Acting Secretary and the Court of Appeals in ordering the appreciation of the votes of the dismissed employees. Finally, we need not resolve the other issues for being moot. The 68 votes of the newly regularized rank-andfile employees, even if counted in favor of No Union, will not materially alter the result. There would still be 208 votes in favor of respondent and 189 votes in favor of No Union. We also note that the certification election is already a fait accompli, and clearly petitioners rank-and-file employees had chosen respondent as their bargaining representative. CATHAY PACIFIC STEEL CORPORATION COURT OF APPEALS G.R. No. 18065116456, August 30, 2006 Chico-Nazario, J.

VS

SAN MIGUEL CORPORATION SUPERVISORS AND EXEMPT UNION VS. HON. LAGUESMA G.R. No. 110399. August 15, 1997.

FACTS: Enrique Tamandong III was a Personnel Superintendent in Cathay Pacific. His position has fixed daily working hours or 8am to 12nn an 1pm to 5pm. Among his functions was issuing memos on company rules and regulations, imposing disciplinary sanctions such as warnings (with irregular attendance and unauthorized leave of absences) and suspensions, and executing the same which was “noted by” the company Vice President.

FACTS: Petitioner Union filed before the DOLE a Petition for District Certification or Certification Election among the supervisors and exempt employees of the SMC Magnolia Poultry Products Plants of Cabuyao, San Fernando and Otis. The Med-Arbiter issued an Order to conduct certification among the supervisors and exempt employees of the SMC Magnolia Poultry Plants of Cabuyao, San Fernando and Otis as one bargaining unit.

ISSUE: Is Enrique Tamandong III a supervisory employee eligible to join a union of supervisory employees?

Respondent SMC filed a Notice of Appeal with Memorandum of Appeal, pointing out, among others, the Med-Arbiter’s error in grouping together all three (3) separate plants into one bargaining unit, and in including supervisory levels 3 and above whose positions are confidential in nature since they have access to information which is regarded by the employer to be confidential from the business standpoint. Laguesma granted respondent company’s appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each of the employees sought to be included in the appropriate bargaining unit.

HELD: Yes. Tamondong does not possess the power to hire, transfer, terminate, or discipline erring employees of the company. At the most, the record merely showed that he informed and warned rank-and-file employees with respect to their violations of Cathay Pacific's rules and regulations. Also, the functions performed by Tamandong such as issuance of warning to employees with irregular attendance and unauthorized leave of absences and requiring employees to explain regarding charges of abandonment of work, are normally performed by a mere supervisor, and not by a manager.

Laguesma granted respondent company’s appeal and ordered the remand of the case to the Med-Arbiter of origin for determination of the true classification of each employees sought to be included in the appropriate bargaining unit. Upon petitioner’s motion, Laguesma granted the reconsideration and directed the conduct of separate certification elections among the supervisors ranked as supervisory levels 1 to 4 and the exempt employees in each of the three plants.

Likewise the imposition upon Tamandong’s required fixed daily working hours is very uncharacteristic of a managerial employee. A managerial rank is that he is not subjected to the rigid observance of regular office hours or maximum hours of work.

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ISSUE: 1. Are supervisory employees and exempt employees of the company considered confidential employees, hence ineligible to join a union? 2. If they are not confidential employees, do the employees of the three plants constitute an appropriate bargaining unit?

in San Fernando, Pampanga is immaterial. Geographical location can be completely disregarded if the communal or mutual interests of the employees are not sacrificed. We rule that the distance among the three plants is not productive of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are likely to impede the operations of a single bargaining representative.

HELD: 1. NO. It is the contention of SMC that supervisory employees 3 and 4 and the exempt employees come within the meaning of the term confidential employees primarily because they answered in the affirmative when asked “Do you handle confidential data or documents?” in Position Questionnaires submitted by the Union. In the same questionnaire, however, it was also stated that the confidential information handled by questioned employees relate to product formulation, product standards and product specification which by no means relate to labor relations. Granting arguendo that an employee has access to confidential labor relations information but such is merely incidental to his duties and knowledge thereof is not necessary in the performance of such duties, said access does not render the employee a confidential employee. If access to confidential labor relations information is to be a factor in the determination of an employee’s confidential status, such information must relate to the employers labor relations policies.

COASTAL SUBIC BAY V. DOLE November 20, 2006 FACTS Private respondents Coastal Subic Bay Terminal, Inc. Rank-and-File Union (CSBTI-RFU) and Coastal Subic Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed separate petitions for certification election before MedArbiter Eladio de Jesus of the Regional Office No. III. The rank-and-file union insists that it is a legitimate labor organization having been issued a charter certificate by the Associated Labor Union (ALU), and the supervisory union by the Associated Professional, Supervisory, Office and Technical Employees Union (APSOTEU). Private respondents also alleged that the establishment in which they sought to operate was unorganized. The Med-Arbiter dismissed the petitions, holding that the ALU and APSOTEU are one and the same federation having a common set of officers. Thus, the supervisory and the rank-and-file unions were in effect affiliated with only one federation. Secretary of Labor and Employment reversed it. CA affirmed the decision of the Secretary.

2. YES. An appropriate bargaining unit may be defined as a group of employees of a given employer, comprised of all or less than all of the entire body of employees, which the collective interest of all the employees, consistent with equity to the employer, indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law.

ISSUE Are ALU, a rank-and-file union and APSOTEU, a supervisory union one and the same because of the commonalities between them? Are they commingled? HELD Yes. First, as earlier discoursed, once a labor union attains the status of a legitimate labor organization, it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation.23 In addition, the legal personality of a labor organization cannot be collaterally attacked.24 Thus, when the personality of the labor organization is questioned in the same manner the veil of corporate fiction is pierced, the action partakes the nature of a collateral attack. Hence, in the absence of any independent action for cancellation of registration against either APSOTEU or ALU, and unless and until their registrations are cancelled, each continues to possess a separate legal personality. The CSBTI-RFU and CSBTI-SU are therefore affiliated with distinct and separate federations, despite the commonalities of APSOTEU and ALU.

It is readily seen that the employees in the instant case have community or mutuality of interest, which is the standard in determining the proper constituency of a collective bargaining unit. It is undisputed that they all belong to the Magnolia Poultry Division of San Miguel Corporation. This means that, although they belong to three different plants, they perform work of the same nature, receive the same wages and compensation, and most importantly, share a common stake in concerted activities. The fact that the three plants are located in three different places, namely, in Cabuyao, Laguna, in Otis, Pandacan, Metro Manila, and

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In the instant case, the national federations that exist as separate entities to which the rank-and-file and supervisory unions are separately affiliated with, do have a common set of officers. In addition, APSOTEU, the supervisory federation, actively participates in the CSBTI-SU while ALU, the rank-and-file federation, actively participates in the CSBTI-RFU, giving occasion to possible conflicts of interest among the common officers of the federation of rank-and-file and the federation of supervisory unions. For as long as they are affiliated with the APSOTEU and ALU, the supervisory and rank-and-file unions both do not meet the criteria to attain the status of legitimate labor organizations, and thus could not separately petition for certification elections.

reversed the VA, ruling that eighty one employees are excluded from and not eligible for inclusion in the bargaining unit as defined in section two, article one of the cba; the eighty one employees cannot be validly members of respondent and/or if already members, that their membership is violative of the cba and that they should disaffiliate from respondent; and petitioner has not committed any act that restrained or tended to restrain its employees in the exercise of their right to self organization. A certification election was held on August 10, 2002 wherein petitioner won. As the incumbent bargaining representative of ABI’s rank and file employees claiming interest in the outcome of the case, petitioner filed with the CA an omnibus motion for reconsideration of the decision and intervention, with attached petition signed by the union officers. Both motions were denied by CA.

The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power in respect of the terms and conditions of labor. When there is commingling of officers of a rank-and-file union with a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves.

ISSUE Whether or not workers were confidential employees RULING No. Secretaries or clerks, numbering about forty, are rank and file employees and confidential employees. Although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and hence, are likewise privy to sensitive and highly confidential records. Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees because if allowed to be affiliated with a Union, the latter might not be assured of their loyalty in view of evident conflict of interests and the Union can also become company-denominated with the presence of managerial employees in the Union membership. Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement. In the present case, the CBA expressly excluded Confidential and Executive Secretaries from the rankand-file bargaining unit, for which reason ABI seeks their disaffiliation from petitioner. As can be gleaned from the above listing, it is rather curious that there would be several secretaries/clerks for just one (1) department/division performing tasks which are mostly routine and clerical. Respondent insisted they fall under the Confidential and Executive Secretaries expressly excluded by the CBA from the rank-and-file bargaining unit. However, perusal of the job descriptions of these secretaries/clerks reveals that their assigned duties and responsibilities involve routine activities of recording and monitoring, and other paper works for their respective departments while secretarial tasks such as receiving telephone

WHEREFORE, the petition is GRANTED. TUNAY NA PAGKAKAISA NG MANGGAGAWA SA ASIA BREWERY VS ASIA BREWERY G.R. No. 162025, August 3, 2010 FACTS Respondent Asia Brewery Inc (ABI) is engaged in the manufacture, sale and distribution of beer, shandy, bottled water and glass products, it entered into a cba, effective for five years with Lakas ng mga Manggagagawa sa Asia-Independent (BLMA), the exclusive bargaining representative of the former’s rank and file employees. Under the cba, twelve jobs were excluded from the bargaining agreement. Subsequently, a dispute arose when ABI’s management stopped deducting union dues from eighty one employees, believing that their membership in BLMA violated the CBA. Respondent insisted that they fall under the “Confidential and Executive Secrtaries” expressly excluded by the CBA from the rank and file bargaining unit. BLMA claimed that ABI’s actions restrained the employees’ rights to self organization and brought the matter to the grievance machinery. As the parties failed to settle the controversy, BLMA lodged a complaint before the NCMB. The parties eventually agreed to submit the case for arbitration to resolve the issue with respect to the right of self organization. VA ruled in favor of BLMA. Accordingly, the subject employees were declared eligible for inclusion within the bargaining unit represented by BLMA. On appeal to the CA, it

8

calls and filing of office correspondence appear to have been commonly imposed as additional duties. Respondent failed to indicate who among these numerous secretaries/clerks have access to confidential data relating to management policies that could give rise to potential conflict of interest with their Union membership. Clearly, the rationale under our previous rulings for the exclusion of executive secretaries or division secretaries would have little or no significance considering the lack of or very limited access to confidential information of these secretaries/clerks. It is not even farfetched that the job category may exist only on paper since they are all daily-paid workers. Quite understandably, petitioner had earlier expressed the view that the positions were just being reclassified as these employees actually discharged routine functions.

management policies in the field of labor relations. The two criteria are cumulative, and both must be met if an employee is to be considered a confidential employee - that is, the confidential relationship must exist between the employee and his supervisor, and the supervisor must handle the prescribed responsibilities relating to labor relations. The exclusion from bargaining units of employees who, in the normal course of their duties, become aware of management policies relating to labor relations is a principal objective sought to be accomplished by the "confidential employee rule." A confidential employee is one entrusted with confidence on delicate, or with the custody, handling or care and protection of the employer’s property. Confidential employees, such as accounting personnel, should be excluded from the bargaining unit, as their access to confidential information may become the source of undue advantage. However, such fact does not apply to the position of Payroll Master and the whole gamut of employees who, as perceived by petitioner, has access to salary and compensation data. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

SAN MIGUEL FOODS, INCORPORATED vs. SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION G.R. No. 146206 August 1, 2011 Under: Eligibility for Membership – Special Groups of Employees FACTS: On the date of an ordered certification election, petitioner San Miguel Foods, Inc. filed an objection thereto questioning the eligibility to vote by some of its employees on the grounds that some employees do not belong to the bargaining unit which respondent seeks to represent. Specifically, it argued, among others, that certain employees (Note: which includes, among others, Payroll Master, Human Resource Assistant, and Personnel Assistant) should not be allowed to vote as they are confidential employees. The then Acting DOLE Undersecretary, in a resolution affirmed the order of the Med-Arbiter stating that respondent is certified to be the exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia Poultry Products Plants, with modification that some of the challenged employees be excluded from the bargaining unit which respondent seeks to represent. The Court of Appeals (CA) affirmed with modification the Resolution of the DOLE Undersecretary, stating that those holding the positions of Human Resource Assistant and Personnel Assistant are excluded from the bargaining unit.

2. Corollarily, although Article 245 of the Labor Code limits the ineligibility to join, form and assist any labor organization to managerial employees, jurisprudence has extended this prohibition to confidential employees or those who by reason of their positions or nature of work are required to assist or act in a fiduciary manner to managerial employees and, hence, are likewise privy to sensitive and highly confidential records. Confidential employees are thus excluded from the rank-and-file bargaining unit. The rationale for their separate category and disqualification to join any labor organization is similar to the inhibition for managerial employees, because if allowed to be affiliated with a union, the latter might not be assured of their loyalty in view of evident conflict of interests and the union can also become company-denominated with the presence of managerial employees in the union membership. Having access to confidential information, confidential employees may also become the source of undue advantage. Said employees may act as a spy or spies of either party to a collective bargaining agreement.

ISSUES: 1. Whether the CA erred in not excluding the position of Payroll Master in the definition of a confidential employee 2. Whether the CA erred in ruling that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees

In this regard, the CA correctly ruled that the positions of Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant, the scope

RULING: 1. Confidential employees are defined as those who (1) assist or act in a confidential capacity, in regard (2) to persons who formulate, determine, and effectuate

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of one’s work necessarily involves labor relations, recruitment and selection of employees, access to employees' personal files and compensation package, and human resource management. As regards a Personnel Assistant, one's work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioner’s team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.

"absorbed" as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioner's new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment.

There are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause.

BANK OF THE PHILIPPINE ISLANDS vs. BPI EMPLOYEES UNION-DAVAO CHAPTERFEDERATION OF UNIONS IN BPI UNIBANK

The effect or consequence of BPI's so-called "absorption" of former FEBTC employees should be limited to what they actually agreed to, i.e., recognition of the FEBTC employees' years of service, salary rate and other benefits with their previous employer. The effect should not be stretched so far as to exempt former FEBTC employees from the existing CBA terms, company policies and rules which apply to employees similarly situated. If the Union Shop Clause is valid as to other new regular BPI employees, there is no reason why the same clause would be a violation of the "absorbed" employees' freedom of association.

FACTS: The Bangko Sentral ng Pilipinas and Securities and Exchange Commission approved the Articles of Merger executed by and between BPI, herein petitioner, and FEBTC. Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained.

Carpio (Dissenting Opinion): Respondent BPI Employees Union is the exclusive bargaining agent of BPI's rank and file employees. The former FEBTC rank-and-file employees did not belong to any labor union at the time of the merger. Respondent Union then sent notices to the former FEBTC employees who refused to join the Union, as well as those who retracted their membership, and called them to a hearing regarding the matter. When these former FEBTC employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto. Petitioner refused to do so.

The former FEBTC employees should not be considered as "new employees" of BPI. The former FEBTC employees were absorbed by BPI immediately upon merger, leaving no gap in their employment. The employees retained their previous employment status, tenure, salary and benefits. This clearly indicates the intention of BPI to assume and continue the employeremployee relations of FEBTC and its employees. The FEBTC employees' employment remained continuous and unchanged, except that their employer, FEBTC, merged with BPI which, as the surviving entity, continued the combined business of the two banks. Thus, the former FEBTC employees are immediately regularized and made permanent employees of BPI. They are not subject to any probationary period as in the case of "new employees" of BPI. The 30-day period within which regularized "new employees" of BPI must join the Union does not apply to former FEBTC employees who are not probationary employees but are immediately regularized as permanent employees of BPI. In short, the former FEBTC employees are immediately given the same permanent status as old employees of BPI.

ISSUE: WON the employees absorbed by the BPI due to the merger are considered as "New Employees", thus covered by the Union Shop Clause in the CBA RULING: Yes. The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess nonregular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are

Brion (Dissenting Opinion): An intrinsic distinction exists between the absorbed employees and those who are hired as immediate

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regulars, which distinction cannot simply be disregarded because it establishes how the absorbed employees came to work for BPI. Those who are immediately hired as regulars acquire their status through the voluntary act of hiring done within the effective term or period of the CBA. The absorbed employees, on the other hand, merely continued the employment they started with FEBTC; they came to be BPI employees by reason of a corporate merger that changed the personality of their employer but did not at all give them any new employment. Thus, they are neither "new" employees nor employees who became regular only during the term of the CBA in the way that newly regularized employees become so. They were regular employees under their present employment long before BPI succeeded to FEBTC's role as employer.

from their work for the interest of industrial peace in the plant

Ultimately, the absorbed employees are best recognized for what they really are — a sui generis group of employees whose classification will not be duplicated until BPI has another merger where it would be the surviving corporation and no provision would be made to define the situation of the employees of the merged constituent corporation. Significantly, this classification — obviously, not within the contemplation of the CBA parties when they executed their CBA — is not contrary to, nor governed by, any of the agreed terms of the existing CBA on union security, and thus occupies a gap that BPI, in the exercise of its management prerogative, can fill.

It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for union shop and closed shop as means of encouraging workers to join and support the union of their choice in the protection of their rights and interest vis--vis the employer In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.

ISSUE:

Is

the

dismissal

illegal?

HELD: YES. There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member. Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor Code

GMC vs. Casio Doctrine: Enforcement of CBA union security clause in connection with the right to due process of the employees. (HINDI PO AKO SURE. ) The labor union Ilaw at Buklod ng Mangagawa (IBM)Local 31 Chapter (Local 31) was the sole and exclusive bargaining agent of the rank and file employees of GMC in Lapu-Lapu City.

There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member. It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the union. It is the third requisite that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, et al. which appears to be lacking in this case. Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a

Casio, et al. were regular employees of GMC with daily earnings ranging from P173.75 to P201.50, and length of service varying from eight to 25 years.[7] Casio was elected IBM-Local 31 President for a three-year term in June 1991, while his co-respondents were union shop stewards. Subsequently, on February 29, 1992, Pino, et al., as officers and members of the IBM-Local 31, issued a Resolution expelling Casio, et al. from the union. Gabiana then wrote a letter dated March 10, 1992, addressed to Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the company of the expulsion of Casio, et al. from the union pursuant to the Resolution dated February 29, 1992 of IBM-Local 31 officers and board members. Gabiana likewise requested that Casio, et al. be immediately dismissed

11

employee based on the union security provision of the CBA.

controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement.

As to the first requisite, there is no question that the CBA between PRI and respondents included a union security clause, specifically, a maintenance of membership as stipulated in Sections 6 of Article II, Union Security and Check-Off. Following the same provision, PRI, upon written request from the Union, can indeed terminate the employment of the employee who failed to maintain its good standing as a union member. Secondly, it is likewise undisputed that NAMAPRI-SPFL, in two (2) occasions demanded from PRI to terminate the employment of respondents due to their acts of disloyalty to the Union. However, as to the third requisite, we find that there is no sufficient evidence to support the decision of PRI to terminate the employment of the respondents.

PICOP RESOURCES v. TANECA August 9, 2010 FACTS: Respondents filed a Complaint for unfair labor practice, illegal dismissal and money claims against petitioner PICOP Resources, Incorporated (PRI) and its officers. They were regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rank-and-file employees of petitioner PRI. PRI has a collective bargaining agreement (CBA) with NAMAPRI-SPFL. It contained a union security clause, to wit: All employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this AGREEMENT shall, as a condition of continued employment by the COMPANY, maintain their membership in the UNION in good standing

The mere signing of the authorization in support of the Petition for Certification Election of FFW before the "freedom period," is not sufficient ground to terminate the employment of respondents. Nothing in the records would show that respondents failed to maintain their membership in good standing in the Union. Respondents did not resign or withdraw their membership from the Union to which they belong. Respondents continued to pay their union dues and never joined the FFW. Hence, the third requisite is lacking.

PRI sent a letter to the management of PRI demanding the termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL contended that it is an act of disloyalty and a valid basis for termination for a cause in accordance with its Constitution and By-Laws and CBA terms. After investigation, they were subsequently sent termination notices on the ground of "acts of disloyalty". Respondents then accused PRI of Unfair Labor Practice. They alleged that none of them ever withdrew their membership from NAMAPRI-SPFL or submitted to PRI any union dues and check-off disauthorizations against NAMAPRI-SPFL. They claimed that they continue to remain on record as bona fide members of NAMAPRI-SPFL. They also claimed that there was lack of procedural due process. The Labor Arbiter declared the respondents’ dismissal to be illegal.

VICTORIANO UNION 59 SCRA 54

V

ELIZALDE

ROPE

WORKERS

Benjamin Victoriano is a member of the religious sect known as the "Iglesia ni Cristo" and had been in the employ of the Elizalde Rope Factory, Inc. He was also a member of the EPWU (Elizalde Rope Workers’ Union). The Company has a collective bargaining agreement containing a closed shop provision. Victoriano tendered his resignation from EPWU claiming that as per RA 3350 he is an exemption to the closed shop agreement by virtue of his being a member of the INC because apparently in the INC, one is forbidden from being a member of any labor union. The company moved to terminate Victoriano due to his non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt from the close shop agreement because RA 3350, which provides that closed shop agreements shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization, is unconstitutional and that said law violates the EPWU’s and ERF’s legal/contractual rights. Appellant Union, furthermore, asserted that a "closed shop provision" in a collective bargaining agreement cannot be considered violative of religious freedom.

ISSUE: Whether or not respondents are validly terminated pursuant to union security clause provided in the CBA HELD: No. In terminating the employment of an employee by enforcing the union security clause, the employer needs to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an

ISSUE: Whether or not RA 3350 is unconstitutional.

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Members of the supervisory union might refuse to carry out disciplinary measures against their comember rank-and-file employees. In the area of bargaining, their interests cannot be considered identical. The needs of one are different from those of the other. Moreover, in the event of a strike, the national federation might influence the supervisors' union to conduct a sympathy strike on the sole basis of affiliation. (NOTE! THIS RULING IS NOW REPEALED.)

HELD: No Republic Act No. 3350 is constitutional. The Act classifies employees and workers, as to the effect and coverage of union shop security agreements, into those who by reason of their religious beliefs and convictions cannot sign up with a labor union, and those whose religion does not prohibit membership in labor unions. The classification introduced by said Act is also germane to its purpose. The purpose of the law is precisely to avoid those who cannot, because of their religious belief, join labor unions, from being deprived of their right to work and from being dismissed from their work because of union shop security agreements. The act also applies equally to all members of said religious sects; this is evident from its provision. The fact that the law grants a privilege to members of said religious sects cannot by itself render the Act unconstitutional.

KAPATIRAN SA MEAT AT CANNING V. BLR CALLEJA FACTS: Petitioner was an exclusive bargaining representative. Prior to its expiration as such, it staged a strike to pressure the employer to extend its contract. Now, within the freedom period, another union belonging to the same unit filed for certification election. The same was challenged by herein petitioner on the ground that the union petitioning for certification election is mostly composed of Iglesia ni Cristo members who once refused to affiliate with it. It then contends that, by virtue of their prior religious objection, the said union(mostly composed of INC members) are not eligible to file for certification election.

The right to religion prevails over contractual or legal rights. As such, an INC member may refuse to join a labor union and despite the fact that there is a closed shop agreement in the factory where he was employed, his employment could not be validly terminated for his non-membership in the majority therein. Further, the right to join a union includes the right not to join a union. The law is not unconstitutional. It recognizes both the rights of unions and employers to enforce terms of contracts and at the same time it recognizes the workers’ right to join or not to join union. RA 3550 recognizes as well the primacy of a constitutional right over a contractual right.

ISSUE Whether or not INC members, who deliberately and previously refused to affiliate with a union, may organize by themselves.

For Reference:

RULING Yes! This Court's decision inVictoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, upholding the right of members of the IGLESIA NI KRISTO sect not to join a labor union for being contrary to their religious beliefs, does not bar the members of that sect from forming their own union. The public respondent correctly observed that the "recognition of the tenets of the sect ... should not infringe on the basic right of selforganization granted by the constitution to workers, regardless of religious affiliation."

ATLAS V. LAGUESMA Doctrine: Union of supervisory employees cannot be merged and represented with the union of the rank and file employees even through a national federation. FACTS Respondent is a supervisory union of petitioner and an affiliate of the national federation representing the rank and file employees of the same petitioner. Said national federation sough for certification election for the supervisors unit. However, petitioner opposed the certification election on the ground that conflict of interest would arise since same federation would represent two adverse and distinct units, that of the rank and file and supersisors.

BARGAINING UNIT DE LA SALLE UNIVERSITY MEDICAL CENTER AND COLLEGE OF MEDICINE VS. LAGUESMA G.R. No. 102084, August 12, 1998

ISSUE whether or not the union of rank and file employees and union of supervisory employees can be members of the same federation.

FACTS: Petitioner De La Salle University Medical Center and College of Medicine (DLSUMCCM) is a hospital and medical school at Dasmariñas, Cavite. Private respondent Federation of Free Workers-De La Salle University Medical Center and College of Medicine Supervisory Union Chapter (FFW-DLSUMCCMSUC),

RULING NO. We agree with the petitioner's contention that a conflict of interest may arise in the areas of discipline, collective bargaining and strikes.

13

on the other hand, is a labor organization composed of the supervisory employees of petitioner DLSUMCCM. On April 17, 1991, the Federation of Free Workers (FFW), a national federation of labor unions, issued a certificate to private respondent FFWDLSUMCCMSUC recognizing it as a local chapter. On the same day, it filed on behalf of private respondent FFW-DLSUMCCMSUC a petition for certification election among the supervisory employees of petitioner DLSUMCCM. Its petition was opposed by petitioner DLSUMCCM on the grounds that several employees who signed the petition for certification election were managerial employees and that the FFW-DLSUMCCMSUC was composed of both supervisory and rank-and-file employees in the company. The respondent however denied the petitioner’s allegations and contended that It is not true that supervisory employees are joining the rank-andfile employees' union. While it is true that both regular rank-and-file employees and supervisory employees of herein respondent have affiliated with FFW, yet there are two separate unions organized by FFW. The supervisory employees have a separate charter certificate issued by FFW.

employees of petitioner DLSUMCCM are indeed affiliated with the same national federation, the FFW, petitioner DLSUMCCM has not presented any evidence showing that the rank-and-file employees composing the other union are directly under the authority of the supervisory employees. TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INCORPORATED vs. TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO G.R. No. 142000, January 22, 2003 FACTS: On October 16, 1997, the Tagaytay Highlands Employees Union (THEU)–Philippine Transport and General Workers Organization (PTGWO), a legitimate labor organization said to represent majority of the rank-and-file employees of THIGCI, filed a petition for certification election. THIGCI, in its Comment, opposed THEU’s petition for certification election on the ground that the list of union members submitted by it was defective and fatally flawed as it included the names and signatures of supervisors, resigned, terminated and absent without leave (AWOL) employees, as well as employees of The Country Club, Inc., a corporation distinct and separate from THIGCI; and that out of the 192 signatories to the petition, only 71 were actual rank-and-file employees of THIGCI. THIGCI also alleged that some of the signatures in the list of union members were secured through fraudulent and deceitful means, and submitted copies of the handwritten denial and withdrawal of some of its employees from participating in the petition. Replying to THIGCI’s Comment, THEU asserted that it had complied with all the requirements for valid affiliation and inclusion in the roster of legitimate labor organizations pursuant to DOLE Department Order No. 9, series of 1997, on account of which it was duly granted a Certification of Affiliation by DOLE on October 10, 1997; and that Section 5, Rule V of said Department Order provides that the legitimacy of its registration cannot be subject to collateral attack, and for as long as there is no final order of cancellation, it continues to enjoy the rights accorded to a legitimate organization.

ISSUE: Whether or not supervisory union and rank-and-file union can affiliate in the same federation RULING: YES. Supervisory employees have the right to selforganization as do other classes of employees save only managerial ones. Conformably with the constitutional mandate, Art. 245 of the Labor Code now provides for the right of supervisory employees to self-organization, subject to the limitation that they cannot join an organization of rank-and-file employees. The reason for the segregation of supervisory and rank-and-file employees of a company with respect to the exercise of the right to self-organization is the difference in their interests. Supervisory employees are more closely identified with the employer than with the rank-and-file employees. If supervisory and rankand-file employees in a company are allowed to form a single union, the conflicting interests of these groups impair their relationship and adversely affect discipline, collective bargaining and strikes. 10 These consequences can obtain not only in cases where supervisory and rank-and-file employees in the same company belong to a single union but also where unions formed independently by supervisory and rankand-file employees of a company are allowed to affiliate with the same national federation. As we explained in the case of Atlas vs. Laguesma, however, such a situation would obtain only where two conditions concur: First, the rank-and-file employees are directly under the authority of supervisory employees and second, the national federation is actively involved in union activities in the company. Although private respondent FFW-DLSUMCCMSUC and another union composed of rank-and-file

ISSUE: Whether the certificate of registration of the union should be cancelled RULING: After a certificate of registration is issued to a union, the legal personality cannot be subject to collateral attack. it may be questioned only in an independent petition for cancellation. the inclusion in a union of disqualified employees is not among the grounds for cancellation unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances mentioned in sections a and c Article 239 of the Labor Code. THEU, having been validly issued a certificate of registration, should be

14

SAN MIGUEL FOODS V. SAN MIGUEL CORP. SUPERVISORS AND EXEMPT UNION August 1, 2011

considered to have already acquired juridical personality which may not be assailed collaterally. As for petitioner’s allegation that some of the signatures in the petition for certification election were obtained through fraud, false statement and misrepresentation, the proper procedure is, as reflected above, for it to file a petition for cancellation of the certificate of registration, and not to intervene in a petition for certification election.

FACTS: Petitioner is questioning the eligibility to vote by some of its employees on the ground that some employees do not belong to the bargaining unit. ISSUES: 1. Should there be a separate bargaining unit for those engaged in dressed chicken processing, i.e., handling and packaging of chicken meat and those engaged in live chicken operations, i.e., those who breed chicks and grow chickens? NO. 2. Are payroll masters confidential employees and must be excluded from the bargaining unit? NO. 3. Are those holding the positions of Human Resource Assistant and Personnel Assistant excluded from the bargaining unit? YES.

DE LA SALLE V. DE LA SALLE UNIVERSITY EMPLOYEES’ ASSOCIATION 330 SCRA 363 FACTS: DLSU and the UNION (composed of regular nonacademic R&F) entered into a CBA. 60 days before its expiration, the union initiated negotiations which were unsuccessful. The Union filed a Notice of Strike with the NCMB. During conciliation, 5 out of 11 issues were resolved by parties.

RULING: 1. There should be only one bargaining unit for the employees involved in dressed chicken processing and those engaged in live chicken operations. Certain factors, such as specific line of work, working conditions, location of work, mode of compensation, and other relevant conditions do not affect or impede their commonality of interest. Although they seem separate and distinct from each other, the specific tasks of each division are actually interrelated and there exists mutuality of interests which warrants the formation of a single bargaining unit.

ISSUE: Are computer operators and discipline officers (which were previously excluded) confidential employees? NO. RULING: The express exclusion of the computer operators and discipline officers from the bargaining unit of rank-andfile employees in the 1986 collective bargaining agreement does not bar any re-negotiation for the future inclusion of the said employees in the bargaining unit. During the freedom period, the parties may not only renew the existing collective bargaining agreement but may also propose and discuss modifications or amendments thereto.

2. The CA correctly held that the position of Payroll Master does not involve dealing with confidential labor relations information in the course of the performance of his functions. Since the nature of his work does not pertain to company rules and regulations and confidential labor relations, it follows that he cannot be excluded from the subject bargaining unit.

We rule that the said computer operators and discipline officers are not confidential employees. As carefully examined by the Solicitor General, the service record of a computer operator reveals that his duties are basically clerical and non-confidential in nature. As to the discipline officers, we agree with the voluntary arbitrator that based on the nature of their duties, they are not confidential employees and should therefore be included in the bargaining unit of rankand-file employees.

3. Human Resource Assistant and Personnel Assistant belong to the category of confidential employees and, hence, are excluded from the bargaining unit, considering their respective positions and job descriptions. As Human Resource Assistant, the scope of ones work necessarily involves labor relations, recruitment and selection of employees, access to employees' personal files and compensation package, and human resource management. As regards a Personnel Assistant, one's work includes the recording of minutes for management during collective bargaining negotiations, assistance to management during grievance meetings and administrative investigations, and securing legal advice for labor issues from the petitioners team of lawyers, and implementation of company programs. Therefore, in the discharge of their functions, both gain access to vital labor relations information which outrightly disqualifies them from union membership.

-----------------The Court also affirms the findings of the voluntary arbitrator that the employees of the College of St. Benilde should be excluded from the bargaining unit of the rank-and-file employees of Dela Salle University, because the two educational institutions have their own separate juridical personality and no sufficient evidence was shown to justify the piercing of the veil of corporate fiction.

15

[petitioner]’s teaching personnel to the exclusion of non-teaching personnel; and (2) [petitioner]’s nonteaching personnel to the exclusion of teaching personnel.

HOLY CHILD CATHOLIC SCHOOL vs. HON. PATRICIA STO. TOMAS, in her official capacity as Secretary of the Department of Labor and Employment, and PINAG-ISANG TINIG AT LAKAS NG ANAKPAWIS – HOLY CHILD CATHOLIC SCHOOL TEACHERS AND EMPLOYEES LABOR UNION (HCCS-TELU-PIGLAS), Respondents. G.R. No. 179146, July 23, 2013

ISSUE: WON the commingling of non-academic and academic rank-and-file employees in one labor organization affect the latter's legitimacy and its right to file a petition for certification election.

SUMMARY: This case is a Petition for Review on Certiorari under Rule 45 assailing the Decision of the Court of Appeals affirming the Resolution of the Secretary of the Department of Labor and Employment (SOLE) allowing private respondent’s petition for certification election. The Resolution of SOLE directed the conduct of two separate certification elections for the teaching and the non-teaching personnel. Corollary, it ruled that [private respondent] can continue to exist as a legitimate labor organization with the combined teaching and non-teaching personnel in its membership and representing both classes of employees in separate bargaining negotiations and agreements.

HELD: [Petitioner] appears to have confused the concepts of membership in a bargaining unit and membership in a union. In emphasizing the phrase “to the exclusion of academic employees” stated in U.P. v. Ferrer-Calleja, [petitioner] believed that the petitioning union could not admit academic employees of the university to its membership. But such was not the intention of the Supreme Court. The Supreme Court ordered the “non-academic rankand-file employees of U.P. to constitute a bargaining unit to the exclusion of the academic employees of the institution”, but did not order them to organize a separate labor organization.

The Supreme Court ruled that the CA did not act with grave abuse of discretion. The ruling of SOLE is AFFIRMED.

In the same manner, the teaching and non-teaching personnel of [petitioner] school must form separate bargaining units. Thus, the order for the conduct of two separate certification elections, one involving teaching personnel and the other involving non-teaching personnel. It should be stressed that in the subject petition, [private respondent] union sought the conduct of a certification election among all the rank-and-file personnel of [petitioner] school. Since the decision of the Supreme Court in the U.P. case prohibits us from commingling teaching and non-teaching personnel in one bargaining unit, they have to be separated into two separate bargaining units with two separate certification elections to determine whether the employees in the respective bargaining units desired to be represented by [private respondent].

DOCTRINE: 1. The legal personality of the Union, cannot be collaterally attacked in certification election proceedings by petitioner school which, as employer, is generally a by stander in the proceedings. 2. The commingling of non-academic and academic rank-and-file employees in one labor organization does not affect the latter's legitimacy and its right to file a petition for certification election. FACTS: Petitioner (School) has 98 teaching personnel, 25 nonteaching academic employees and 33 non-teaching and non-academic employees. These 156 employees supported the petition for certification election filed by Private Respondent (Union). The School assails the legitimacy of the Union and its right to file a petition for certificate election due to the commingling of academic and non-academic rank-and-file employees.

REPUBLIC OF THE PHILIPPINES, represented by Department of Labor and Employment (DOLE), Petitioner, vs. KAWASHIMA TEXTILE MFG., PHILIPPINES, INC., Respondent. G.R. No. 160352, July 23, 2008 FACTS: KFWU filed with DOLE Regional Office No. IV, a Petition for Certification Election to be conducted in the bargaining unit composed of 145 rank-and-file employees of respondent.

PETITIONER’S ARGUMENT: The SOLE erred in interpreting the decision of the Supreme Court in U.P. v. Ferrer-Calleja1. According to Petitioner, the Court (in U.P. v. Ferrer-Calleja) sought the creation of separate bargaining units, namely: (1)

Respondent-company filed a Motion to Dismiss the petition on the ground that KFWU did not acquire any legal personality because its membership of mixed rank-and-file and supervisory employees violated

1

The Supreme Court stated that the non-academic rank-and file employees of the University of the Philippines shall constitute a bargaining unit to the exclusion of the academic employees of the institution.

16

Article 245 of the Labor Code, and its failure to submit its books of account contravened the ruling of the Court in Progressive Development Corporation v. Secretary, Department of Labor and Employment.

Effective 1989, R.A. No. 6715 restored the prohibition against the questioned mingling in one labor organization, viz: Sec. 18. Article 245 of the same Code, as amended, is hereby further amended to read as follows

ISSUE: (1) whether a mixed membership of rank-and-file and supervisory employees in a union is a ground for the dismissal of a petition for certification election in view of the amendment brought about by D.O. 9, series of 1997, which deleted the phraseology in the old rule that “[t]he appropriate bargaining unit of the rank-andfile employee shall not include the supervisory employees and/or security guards;” and

“Art. 245. Ineligibility of managerial employees to join any labor organization; right of supervisory employees. Managerial employees are not eligible to join, assist or form any labor organization. Supervisory employees shall not be eligible for membership in a labor organization of the rank-and-file employees but may join, assist or form separate labor organizations of their own.” (Emphasis supplied)

(2) whether the legitimacy of a duly registered labor organization can be collaterally attacked in a petition for a certification election through a motion to dismiss filed by an employer such as Kawashima Textile Manufacturing Phils., Inc.

Unfortunately, just like R.A. No. 875, R.A. No. 6715 omitted specifying the exact effect any violation of the prohibition would bring about on the legitimacy of a labor organization.

HELD:

Thus, when the issue of the effect of mingling was brought to the fore in Toyota, the Court, citing Article 245 of the Labor Code, as amended by R.A. No. 6715, held:

The petition is imbued with merit. The key to the closure that petitioner seeks could have been Republic Act (R.A.) No. 9481 [AN ACT STRENGTHENING THE WORKERS’ CONSTITUTIONAL RIGHT TO SELFORGANIZATION, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES] Sections 8 and 9. However, R.A. No. 9481 took effect only on June 14, 2007; hence, it applies only to labor representation cases filed on or after said date. As the petition for certification election subject matter of the present petition was filed by KFWU on January 24, 2000,28 R.A. No. 9481 cannot apply to it. There may have been curative labor legislations that were given retrospective effect, but not the aforecited provisions of R.A. No. 9481, for otherwise, substantive rights and interests already vested would be impaired in the process.

Clearly, based on this provision, a labor organization composed of both rank-and-file and supervisory employees is no labor organization at all. It cannot, for any guise or purpose, be a legitimate labor organization. Not being one, an organization which carries a mixture of rank-and-file and supervisory employees cannot possess any of the rights of a legitimate labor organization, including the right to file a petition for certification election for the purpose of collective bargaining. It becomes necessary, therefore, anterior to the granting of an order allowing a certification election, to inquire into the composition of any labor organization whenever the status of the labor organization is challenged on the basis of Article 245 of the Labor Code xxxx In the case at bar, as respondent union’s membership list contains the names of at least twenty-seven (27) supervisory employees in Level Five positions, the union could not, prior to purging itself of its supervisory employee members, attain the status of a legitimate labor organization. Not being one, it cannot possess the requisite personality to file a petition for certification election.

Instead, the law and rules in force at the time of the filing by KFWU of the petition for certification election on January 24, 2000 are R.A. No. 6715, amending Book V of Presidential Decree (P.D.) No. 442 (Labor Code),as amended, and the Rules and Regulations Implementing R.A. No. 6715,34 as amended by Department Order No. 9, series of 1997.

But then, on June 21, 1997, the 1989 Amended Omnibus Rules was further amended by Department Order No. 9, series of 1997 (1997 Amended Omnibus Rules). Specifically, the requirement under Sec. 2(c) of the 1989 Amended Omnibus Rules – that the petition for certification election indicate that the bargaining unit of rank-and-file employees has not been mingled with supervisory employees – was removed.

One area of contention has been the composition of the membership of a labor organization, specifically whether there is a mingling of supervisory and rankand-file employees and how such questioned mingling affects its legitimacy.

17

Consequently, the Court reinstates that of the DOLE granting the petition for certification election of KFWU.

Manggagawa seeks to represent is the non-academic personnel or the rank and file employees from the motor pool, construction and transportation departments, and not all the rank and file employees of St. James. A subsequent motion for reconsideration was denied by the DOLE. The ruling of the DOLE was sustained by the Court of Appeals.

II. Now to the second issue of whether an employer like respondent may collaterally attack the legitimacy of a labor organization by filing a motion to dismiss the latter’s petition for certification election.

Issue: Are the formation of the labor union and the certification election valid?

Except when it is requested to bargain collectively, an employer is a mere bystander to any petition for certification election; such proceeding is nonadversarial and merely investigative, for the purpose thereof is to determine which organization will represent the employees in their collective bargaining with the employer. The choice of their representative is the exclusive concern of the employees; the employer cannot have any partisan interest therein; it cannot interfere with, much less oppose, the process by filing a motion to dismiss or an appeal from it; not even a mere allegation that some employees participating in a petition for certification election are actually managerial employees will lend an employer legal personality to block the certification election. The employer’s only right in the proceeding is to be notified or informed thereof.

Ruling: The petition has no merit. The Validity of the Formation of the Labor Union The issue on the employer-employee relationship between St. James and majority of the members of Samahang Manggagawa has already been resolved in a previous case. Prior to the holding of the certification election, St. James filed a petition for cancellation of Samahang Manggagawa’s union registration for lack of employeremployee relationship between St. James and Samahang Manggagawa’s members. This case reached the Court of Appeals, which held that the construction workers are actually St. James’ regular employees in its motor pool, construction and transportation departments, and eventually the Supreme Court which, in a Resolution dated 10 October 2001, closed any issue on the validity of the formation of the labor union.

The amendments to the Labor Code and its implementing rules have buttressed that policy even more. Petition is GRANTED. G.R. No. 151326; November 23, 2005 ST. JAMES SCHOOL OF QUEZON CITY, Petitioner, vs. SAMAHANG MANGGAGAWA SA ST. JAMES SCHOOL OF QUEZON CITY, Respondent. CARPIO, J.

The Validity of the Certification Election Petitioner alleges that it has 179 rank and file employees in its Quezon City Campus, all of which were never able to vote during the certification election since they were on duty. Even if the 84 votes should be counted, it does not fall within the majority of total number of employees of the five St. James campuses – 570.

Facts: A petition for certification election was file by the Samahang Manggagawa sa St. James School of Quezon City ("Samahang Manggagawa") on behalf of the motor pool, construction and transportation employees of St. James School of Quezon City ("St. James"). On 26 June 1999, the certification election was held at the DOLE office in Intramuros, Manila. 84 out of the 149 eligible voters cast their votes. A protest was filed by petitioners on the grounds that the total number of rank and file employees was 179, and that those who voted were mere construction workers of an independent contractor, Architect Conrado Bacoy ("Architect Bacoy").

The argument is untenable. According to the Court, “the members of Samahang Manggagawa are employees in the Tandang Sora campus. Under its constitution and by-laws, Samahang Manggagawa seeks to represent the motor pool, construction and transportation employees of the Tandang Sora campus. Thus, the computation of the quorum should be based on the rank and file motor pool, construction and transportation employees of the Tandang Sora campus and not on all the employees in St. James’ five campuses.”

In 6 January 2000, the Med-Arbiter, Tomas F. Falconitin, using the list of rank and file employees submitted by St. James, ruled that at the time of the certification election, the 84 voters were no longer working at St. James. This decision was reversed by the DOLE which ruled that what Samahang

In determining whether there was a quorum, the number to be used is 149. A quorum existed in the certification election when the 84 votes were cast. Petition denied.

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nullification of the election proceedings, the election officer should have deferred issuing the Certification of the results thereof. Section 13 of the Implementing Rules cannot strictly be applied to the present case.”

G.R. No. 152094; July 22, 2004 DHL PHILIPPINES CORPORATION UNITED RANK AND FILE ASSOCIATION-FEDERATION OF FREE WORKERS (DHL-URFA-FFW), petitioner, vs. BUKLOD NG MANGGAGAWA NG DHL PHILIPPINES CORPORATION, respondent. PANGANIBAN, J.

Respondents voted in favor of the petitioner because it was their desire to have an independent union. However, this misrepresentation caused them to disaffiliate and form a new union. Upon filing the application but prior the issuance of a certificate of registration, the respondent already filed its petition to nullify the certification election. This was opposed by petitioner on the ground that there was no certificate issued to respondent yet. However, the court held that “because such certificate was issued in favor of the latter [respondent] four days after the filing of the Petition, on December 23, 1997, the misgivings of the former were brushed aside by the med-arbiter. Indeed, the fact that respondent was not yet a duly registered labor organization when the Petition was filed is of no moment, absent any fatal defect in its application for registration.”

Facts: A certification election was conducted among the regular rank and file employees in the main office and the regional branches of DHL Philippines Corporation on November 25, 1997. The contending choices were petitioner and "no union." However, on December 19, 1997, a petition for the nullification for the certification election was filed by the respondent Buklod ng Manggagawa ng DHL Philippines Corporation (BUKLOD) with the Industrial Relations Division of the Department of Labor and Employment (DOLE) on the ground of fraud and deceit, particularly by misrepresenting to the employees that it was an independent union even if it was an affiliate of the Federation of Free Workers (FFW).

Moreover, the respondents did not sleep on their rights. “Hence, their failure to follow strictly the procedural technicalities regarding the period for filing their protest should not be taken against them. Mere technicalities should not be allowed to prevail over the welfare of the workers. What is essential is that they be accorded an opportunity to determine freely and intelligently which labor organization shall act on their behalf. Having been denied this opportunity by the betrayal committed by petitioner’s officers in the present case, the employees were prevented from making an intelligent and independent choice.”

Those who found out withdrew their membership and formed BUKLOD, whose Certificate of Registration was issued by DOLE on December 23, 1997. Come January 19, 1998, petitioner received 546 votes and "no union" garnering 348 votes, and was certified by the election officer as the sole and exclusive bargaining agent of the rank and file employees of the corporation.

Lastly, the Court held that “a certification election may be set aside for misstatements made during the campaign, where 1) a material fact has been misrepresented in the campaign; 2) an opportunity for reply has been lacking; and 3) the misrepresentation has had an impact on the free choice of the employees participating in the election.” The misrepresentation was committed by the officers of the petitioner, and petitioner cannot claim that there was sufficient time between the said misrepresentation and election to ascertain the truth of petitioner’s statements.

The Med-Arbiter Tomas F. Falconitin nullified the November 25, 1997 certification election and ordered the conduct of a new one with respondent as one of the choices, alongside petitioner and “no choice.” This decision was reversed by DOLE Undersecretary Rosalinda Dimapilis-Baldoz. Upon reaching the Court of Appeals, it held that the withdrawal of 704 out of 894 members of the petitioner union was a valid impetus to hold a new certification election.

Petition denied. Issue: Is the certification election valid?

STA. LUCIA EAST COMMERCIAL CORPORATION vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION WORKERS ASSOCIATION (CLUP LOCAL CHAPTER), G.R. No. 162355 August 14, 2009 CARPIO, J.:

Ruling: The Petition lacks merit. The petitioner hinges the validity of the decision of the election officer on the fact that no protest for the misrepresentation was filed during the election or within 5 days from the close thereof. However, the Court held that “when the med-arbiter admitted and gave due course to respondent’s Petition for

Facts: On 2001, Confederated Labor Union of the Philippines (CLUP) instituted a petition for certification election

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among the regular rank- and-file employees of Sta. Lucia East Commercial Corporation (THE CORPORATION) and its Affiliates. The affiliate companies included in the petition were SLE Commercial, SLE Department Store, SLE Cinema, Robsan East Trading, Bowling Center, Planet Toys, Home Gallery and Essentials.

Med-Arbiter Bactin dismissed THE UNION’s petition for direct certification on the ground of contract bar rule. The prior voluntary recognition of SMSLEC and the CBA between THE CORPORATION and SMSLEC bars the filing of THE UNION’s petition for direct certification. THE UNION raised the matter to the Secretary.

On August 2001, Med-Arbiter Bactin ordered the dismissal of the petition due to inappropriateness of the bargaining unit.

The Ruling of the Secretary of Labor and Employment. The Secretary held that the subsequent negotiations and registration of a CBA executed by THE CORPORATION with SMSLEC could not bar THE UNION’s petition. THE UNION constituted a registered labor organization at the time of THE CORPORATION’s voluntary recognition of SMSLEC. THE CORPORATION then filed a petition for certiorari before the appellate court.

Later CLUP in its local chapter under THE CORPORATION reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (herein THE UNION), limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation.

The Ruling of the Appellate Court The appellate court affirmed the ruling of the Secretary

On the same date, THE UNION or THE UNION filed the instant petition for certification election. It claimed that no certification election has been held among them within the last 12 months prior to the filing of the petition, and while there is another union registered covering the same employees, namely Samahang Manggawa sa SLEC [SMSLEC], it has not been recognized as the exclusive bargaining agent of [THE CORPORATION’s] employees.

Issue: Whether THE CORPORATION’s voluntary recognition of SMSLEC was validly done while a legitimate labor organization was in existence in the bargaining unit. Held: NO. The fundamental factors in determining the appropriate collective bargaining unit are: (1) the will of the employees (Globe Doctrine); (2) affinity and unity of the employees’ interest, such as substantial similarity of work and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment status.

On November 2001, THE CORPORATION or THE CORPORATION filed a motion to dismiss the petition. It averred that it has voluntarily recognized SMSLEC as the exclusive bargaining agent of its regular rankand-file employees, and that collective bargaining negotiations already commenced between them. THE CORPORATION argued that the petition should be dismissed for violating the one year and negotiation bar rules under the Omnibus Rules Implementing the Labor Code.

(eto yung important) The UNION’S initial problem was that they constituted a legitimate labor organization representing a nonappropriate bargaining unit. However, The union subsequently re-registered as THE UNION, limiting its members to the rank-and-file of THE CORPORATION. THE CORPORATION cannot ignore the union was a legitimate labor organization at the time of THE CORPORATION’s voluntary recognition of SMSLEC.

The CBA between SMSLEC and the corporation was ratified by its rank-and-file employees and registered with DOLE. In the meantime, on December 2001, the union filed its Opposition to THE CORPORATION’S Motion to Dismiss questioning the validity of the voluntary recognition of [SMSLEC] by [THE CORPORATION] and their consequent negotiations and execution of a CBA. According to [THE UNION], the voluntary recognition of [SMSLEC] by [THE CORPORATION] violated the requirements for voluntary recognition, i.e., non-existence of another labor organization in the same bargaining unit. It pointed out that the time of the voluntary recognition on 20 July 2001, appellant’s registration which covers the same group of employees covered by Samahang Manggagawa sa Sta. Lucia East Commercial, was existing and has neither been cancelled or abandoned.

THE CORPORATION and SMSLEC cannot, by themselves, decide whether CLUP-THE CORPORATION and its Affiliates Workers Union represented an appropriate bargaining unit. The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances. The union having been validly issued a certificate of registration, should be considered as having acquired juridical personality which may not be attacked collaterally. The proper procedure for THE CORPORATION is to file a petition for cancellation of

The Med-Arbiter’s Ruling

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certificate of registration of CLUP-THE CORPORATION and its Affiliates Workers Union and not to immediately commence voluntary recognition proceedings with SMSLEC.

Federation on the ground of prohibited mixture of supervisory and rank-and-file employees and noncompliance with the attestation clause under paragraph 2 of Article 235 of the Labor Code.

SAMAHAN NG MGA MANGGAGAWA SA SAMMA– LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSA (SAMMA–LIKHA) V. SAMMA CORPORATION March 13, 2009

CA’s Ruling CA reversed SOL’s decision. CA held that Administrative Circular No. 04-94 which required the filing of a certificate of non-forum shopping applied to petitions for certification election. It also ruled that the Secretary of Labor erred in granting the appeal despite the lack of proof of service on respondent. Lastly, it found that petitioner had no legal standing to file the petition for certification election because its members were a mixture of supervisory and rank-and-file employees.

Samahan ng mga Manggagawa sa Samma Lakas sa Industriya ng Kapatirang Haligi ng Alyansa (SAMMALIKHA) filed a petition for certification election on July 24, 2001. It claimed that: (1) it was a local chapter of the LIKHA Federation, a legitimate labor organization registered with the DOLE; (2) it sought to represent all the rank-and-file employees of respondent Samma Corporation; (3) there was no other legitimate labor organization representing these rank-and-file employees; (4) respondent was not a party to any collective bargaining agreement and (5) no certification or consent election had been conducted within the employer unit for the last 12 months prior to the filing of the petition.

Issues: 1. Whether a certificate for non-forum shopping is required in a petition for certification election. – NO 2. Whether SAMMA LIKHA had the legal personality to file the petition for certification election. – NO. 1. REQUIREMENT OF CERTIFICATE OF NONFORUM SHOPPING IS NOT REQUIRED IN A PETITION FOR CERTIFICATION ELECTION.

Samma Corp. moved for the dismissal of the petition arguing that (1) LIKHA Federation failed to establish its legal personality; (2) petitioner failed to prove its existence as a local chapter; (3) it failed to attach the certificate of non-forum shopping and (4) it had a prohibited mixture of supervisory and rank-and-file employees.

The requirement for a certificate of non-forum shopping refers to complaints, counter-claims, crossclaims, petitions or applications where contending parties litigate their respective positions regarding the claim for relief of the complainant, claimant, petitioner or applicant. A certification proceeding, even though initiated by a petition, is not a litigation but an investigation of a non-adversarial and fact-finding character.

Med-Arbiter’s Ruling Med-Arbiter dismissed the petition on the following grounds: (1) lack of legal personality for failure to attach the certificate of registration purporting to show its legal personality; (2) prohibited mixture of rank-andfile and supervisory employees and (3) failure to submit a certificate of non-forum shopping.

Such proceedings are not predicated upon an allegation of misconduct requiring relief, but, rather, are merely of an inquisitorial nature. The Board's functions are not judicial in nature, but are merely of an investigative character. The object of the proceedings is not the decision of any alleged commission of wrongs nor asserted deprivation of rights but is merely the determination of proper bargaining units and the ascertainment of the will and choice of the employees in respect of the selection of a bargaining representative.

Petitioner moved for MR. The Regional Director of DOLE forwarded the case to the Secretary of Labor. During pendency of the petition, Samma Corp. filed a petition for cancellation of petitioners union registration in the DOLE Regional Office IV. Sec. of Labor’s Ruling Reversed the order of the med-arbiter. SOL ruled that the legal personality of a union cannot be collaterally attacked but may only be questioned in an independent petition for cancellation of registration. Thus, he directed the holding of a certification election among the rank-and-file employees of respondent, subject to the usual preelection conference and inclusion-exclusion proceedings.

Under the omnibus rules implementing the Labor Code as amended by D.O. No. 9, the PCE is supposed to be filed in the Regional Office which has jurisdiction over the principal office of the employer or where the bargaining unit is principally situated. The rules further provide that where two or more petitions involving the same bargaining unit are filed in one Regional Office, the same shall be automatically consolidated. Hence, the filing of multiple suits and the possibility of conflicting decisions will rarely happen in this

Meanwhile, Director of DOLE revoked the charter certificate of SAMMA-LIKHA as local chapter of LIKHA

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proceeding and, if it does, will be easy to discover.

it could only be filed during the 60-day freedom period of the current CBA. The Secretary of Labor and Employment affirmed said decision, observing the contract bar rule. A second petition for certification election was filed. The same was dismissed by the Med-Arbiter and the Secretary of Labor based on the abovementioned grounds. A third petition for certification election, now within the freedom period, was filed. Med-Arbiter dismissed for non-existence of employer-employee relationship and res judicata having set in.

2. LEGAL PERSONALITY OF PETITIONER The erroneous inclusion of one supervisory employee in the union of rank-and-file employees was not a ground to impugn its legitimacy as a legitimate labor organization which had the right to file a petition for certification election. LIKHA was granted legal personality as a federation. With certificates of registration issued in their favor, they are clothed with legal personality as legitimate labor organizations.

ISSUE: Is the case barred by res judicata or conclusiveness of judgment?

Such legal personality cannot thereafter be subject to collateral attack, but may be questioned only in an independent petition for cancellation of certificate of registration. Unless petitioners union registration is cancelled in independent proceedings, it shall continue to have all the rights of a legitimate labor organization, including the right to petition for certification election.

HELD: NO. “The doctrine of res judicata provides that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on points and matters determined in the former suit. The elements of res judicata are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be as between the first and second action, identity of parties, subject matter, and causes of action.”

Samma Corp. filed a petition for cancellation of the registration of petitioner on December 14, 2002. In a resolution dated April 14, 2003, petitioners charter certificate was revoked by the DOLE. But on May 6, 2003, petitioner moved for the reconsideration of this resolution. Neither of the parties alleged that this resolution revoking petitioners charter certificate had attained finality. However, in this petition, petitioner prayed that its charter certificate be reinstated in the roster of active legitimate labor [organizations]. The proceedings on a petition for cancellation of registration are independent of those of a petition for certification election. This case originated from the latter. If it is shown that petitioners legal personality had already been revoked or cancelled with finality in accordance with the rules, then it is no longer a legitimate labor organization with the right to petition for a certification election.

Here, the first three requisites are present. However, the fourth element is not. The third petition for certification election was filed well within the 60-day freedom period. “There is no identity of causes of action to speak of since in the first petition, the union has no cause of action while in the third, a cause of action already exists for the union as they are now legally allowed to challenge the status of SMCGC-SUPER as exclusive bargaining representative.”

A FINAL NOTE Respondent, as employer, had been the one opposing the holding of a certification election among its rankand-file employees. This should not be the case. We have already declared that, in certification elections, the employer is a bystander; it has no right or material interest to assail the certification election.

NATIONAL UNION OF WORKERS IN HOTELS, RESTAURANTS AND ALLIED INDUSTRIESMANILA PAVILION HOTEL CHAPTER, Petitioner, vs. SECRETARY OF LABOR AND EMPLOYMENT, BUREAU OF LABOR RELATIONS, HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION AND ACESITE PHILIPPINES HOTEL CORPORATION, Respondents. G.R. No. 181531 July 31, 2009 CARPIO MORALES, J.:

CHRIS GARMENTS CORPORATION, petitioner, vs. HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER No. 832, respondents. G.R. No. 167426 January 12, 2009 QUISUMBING, J.: FACTS: Respondent Chris Garments Workers Union– PTGWO, Local Chapter No. 832 (Union) filed a petition for certification election. Med-Arbiter dismissed said petition finding that there was no employer-employee relationship; that even if such relationship existed, the petition will still fail due to the contract bar rule. Hence,

FACTS: Certification election was conducted among the rank-and-file employees of Respondent Holiday Inn Manila Pavilion Hotel. Out of the 346 votes cast, 22 were segregated. Contending unions referred the case to the Med-Arbiter to determine which among said votes should be opened and tallied. 11 of said votes were segregated since they were cast by dismissed employees, whose dismissal was pending before the

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CA. 6 votes were cast by employees already occupying supervisory positions. The last 5 votes were cast by probationary employees. Med-Arbiter ruled for the opening of 17 votes, particularly, those cast by 11 dismissed employees and the 6 supposedly supervisory employees.

numerical composition of the Union, and the election of its officers. Going into specifics, Eagle Ridge alleged that the EREU declared in its application for registration having 30 members, when the minutes of its December 6, 2005 organizational meeting showed it only had 26 members. The misrepresentation was exacerbated by the discrepancy between the certification issued by the Union secretary and president that 25 members actually ratified the constitution and by-laws on December 6, 2005 and the fact that 26 members affixed their signatures on the documents, making one signature a forgery.

ISSUE: May employees on probationary status at the time of the certification election be allowed to vote, notwithstanding the pendency of an appeal with the Secretary of Labor and Employment? HELD: YES. In light of the pertinent provisions of D.O. No. 40-03, and the principle that all employees are, from the first day of their employment, eligible for membership in a labor organization, “it is evident that the period of reckoning in determining who shall be included in the list of eligible voters is, in cases where a timely appeal has been filed from the Order of the Med-Arbiter, the date when the Order of the Secretary of Labor and Employment, whether affirming or denying the appeal, becomes final and executory.” “The filing of an appeal to the SOLE from the MedArbiter’s Order stays its execution, in accordance with Sec. 21, and rationally, the Med-Arbiter cannot direct the employer to furnish him/her with the list of eligible voters pending the resolution of the appeal.”

Finally, Eagle Ridge contended that five employees who attended the organizational meeting had manifested the desire to withdraw from the union. The five executed individual affidavits or Sinumpaang Salaysay on February 15, 2006, attesting that they arrived late at said meeting which they claimed to be drinking spree; that they did not know that the documents they signed on that occasion pertained to the organization of a union; and that they now wanted to be excluded from the Union. The withdrawal of the five, Eagle Ridge maintained, effectively reduced the union membership to 20 or 21, either of which is below the mandatory minimum 20% membership requirement under Art. 234(c) of the Labor Code. Reckoned from 112 rank-and-file employees of Eagle Ridge, the required number would be 22 or 23 employees.

“During the pendency of the appeal, the employer may hire additional employees. To exclude the employees hired after the issuance of the Med-Arbiter’s Order but before the appeal has been resolved would violate the guarantee that every employee has the right to be part of a labor organization from the first day of their service. Even if the Implementing Rules gives the SOLE 20 days to decide the appeal from the Order of the Med-Arbiter, experience shows that it sometimes takes months to be resolved. To rule then that only those employees hired as of the date of the issuance of the Med-Arbiter’s Order are qualified to vote would effectively disenfranchise employees hired during the pendency of the appeal. More importantly, reckoning the date of the issuance of the Med-Arbiter’s Order as the cut-off date would render inutile the remedy of appeal to the SOLE.”

The Union presented the duly accomplished union membership forms of four additional members. And to rebut the allegations in the affidavits of retraction of the five union members, it presented the Sama-Samang Sinumpaang Salaysay of eight union members; another Sama-Samang Sinumpaang Salaysay, of four other union members; and the Sworn Statement of the Union’s legal counsel. These affidavits attested to the orderly and proper proceedings of the organizational meeting on December 6, 2005. Issue: Did EREU commit fraud, misrepresentation and false statement when it filed for its registration and did it fail to comply with the membership requirement for the registration as a labor organization?

EAGLE RIDGE GOLF & COUNTRY CLUB V. CA, ET. AL. G.R. No. 178989, March 18, 2010

Ruling: Facts: The Eagle Ridge Employees Union (EREU) filed a petition for certification election in Eagle Ridge Golf & Country Club, docketed as Case No. RO400-0601-RU002. Eagle Ridge opposed this petition,11 followed by its filing of a petition for the cancellation of EREU's certificate of registration ascribing misrepresentation, false statement, or fraud to EREU in connection with the adoption of its constitution and by-laws, the

No. A scrutiny of the records fails to show any misrepresentation, false statement, or fraud committed by EREU to merit cancellation of its registration. The Union submitted the required documents attesting to the facts of the organizational meeting on December 6, 2005, the election of its officers, and the adoption of the Union’s constitution and by-laws. EREU complied with the mandatory minimum 20% membership

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condition of continued employment by the COMPANY, maintain their membership in the UNION in good standing during the effectivity of the agreement. On May 16, 2000, (Atty. Fuentes) sent a letter to the management of PRI demanding the termination of employees who allegedly campaigned for, supported and signed the Petition for Certification Election of the Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL considered said act of campaigning for and signing the petition for certification election of FFW as an act of disloyalty and a valid basis for termination for a cause in accordance with its Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II, Sections 6.1 and 6.2 on Union Security Clause. Eventually, the respondents were terminated.

requirement under Art. 234(c) when it had 30 employees as member when it registered. Any seeming infirmity in the application and admission of union membership, most especially in cases of independent labor unions, must be viewed in favor of valid membership. In the issue of the affidavits of retraction executed by six union members, the probative value of these affidavits cannot overcome those of the supporting affidavits of 12 union members and their counsel as to the proceedings and the conduct of the organizational meeting on December 6, 2005. The DOLE Regional Director and the BLR OIC Director obviously erred in giving credence to the affidavits of retraction, but not according the same treatment to the supporting affidavits. It is settled that affidavits partake the nature of hearsay evidence, since they are not generally prepared by the affiant but by another who uses his own language in writing the affiant’s statement, which may thus be either omitted or misunderstood by the one writing them. It is required for affiants to re-affirm the contents of their affidavits during the hearing of the instant case for them to be examined by the opposing party, i.e., the Union. For their non-presentation, the six affidavits of retraction are inadmissible as evidence against the Union in the instant case. Twenty percent (20%) of 112 rank-and-file employees in Eagle Ridge would require a union membership of at least 22 employees. When the EREU filed its application for registration on December 19, 2005, there were clearly 30 union members. Thus, when the certificate of registration was granted, there is no dispute that the Union complied with the mandatory 20% membership requirement. Prior to their withdrawal, the six employees who retracted were bona fide union members. With the withdrawal of six union members, there is still compliance with the mandatory membership requirement under Art. 234(c), for the remaining 24 union members constitute more than the 20% membership requirement of 22 employees.

ISSUE: Whether or not an existing CBA can be given its full force and effect in all its terms and conditions including its union security clause, even beyond the 5year period when no new CBA has yet been entered into? HELD: PRI anchored their decision to terminate respondents’ employment on Article 253 of the Labor Code which states that "it shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties." It claimed that they are still bound by the Union Security Clause of the CBA even after the expiration of the CBA; hence, the need to terminate the employment of respondents. Petitioner's reliance on Article 253 is misplaced. At the expiration of the freedom period, the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. Applying the provision of Article 256 of the Labor Code, it can be said that while it is incumbent for the employer to continue to recognize the majority status of the incumbent bargaining agent even after the expiration of the freedom period, they could only do so when no petition for certification election was filed. The reason is, with a pending petition for certification, any such agreement entered into by management with a labor organization is fraught with the risk that such a labor union may not be chosen thereafter as the collective bargaining representative. The provision for status quo is conditioned on the fact that no certification election was filed during the freedom period. Any other view would render nugatory the clear statutory policy to favor certification election as the means of ascertaining the true expression of the will of the workers as to which labor organization would represent them.

PICOP RESOURCES, INC. V. TAÑECA August 9, 2010 FACTS: On February 13, 2001, respondents filed a Complaint for unfair labor practice, illegal dismissal and money claims against petitioner PICOP Resources, Inc. Respondents were regular rank-andfile employees of PRI and bona fide members of Nagkahiusang Mamumuo sa PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective bargaining agent for the rankand-file employees of petitioner PRI. PRI has a collective bargaining agreement (CBA) with NAMAPRISPFL for a period of five (5) years from May 22, 1995 until May 22, 2000. The CBA contained union security provisions on maintenance of membership which provides that all employees within the appropriate bargaining unit who are members of the UNION at the time of the signing of this AGREEMENT shall, as a

LEGEND INTERNATIONAL RESORTS KILUSANG MANGGAGAWA NG LEGEND February 23, 2011

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V.

FACTS: On June 6, 2001, KML filed with the Med-Arbitrater a Petition for Certification Election. KML alleged that it is a legitimate labor organization of the rank and file employees of Legend International Resorts Limited (LEGEND). LEGEND moved to dismiss the petition alleging that KML is not a legitimate labor organization because its membership is a mixture of rank and file and supervisory employees in violation of Article 245 of the Labor Code. LEGEND also claimed that KML committed acts of fraud and misrepresentation when it made it appear that certain employees attended its general membership meeting on April 5, 2001 when in reality some of them were either at work; have already resigned as of March 2001; or were abroad. In its Comment, KML argued that even if 41 of its members are indeed supervisory employees and therefore excluded from its membership, the certification election could still proceed because the required number of the total rank and file employees necessary for certification purposes is still sustained. KML also claimed that its legitimacy as a labor union could not be collaterally attacked in the certification election proceedings but only through a separate and independent action for cancellation of union registration. Finally, as to the alleged acts of misrepresentation, KML asserted that LEGEND failed to substantiate its claim.

certificate of registration is issued to a union, its legal personality cannot be subject to a collateral attack. In may be questioned only in an independent petition for cancellation in accordance with Section 5 of Rule V, Book V of the Implementing Rules. SAMAHANG MANGGAGAWA SA CHARTER CHEMICAL SOLIDARITY OF UNIONS IN THE PHILIPPINES FOR EMPOWERMENT AND REFORMS (SMCC-SUPER), ZACARRIAS JERRY VICTORIO-Union President, Petitioner, vs. CHARTER CHEMICAL and COATING CORPORATION, Respondent. G.R. No. 169717, March 16, 2011 Facts: On February 19, 1999, petitioner SMCCSUPER filed a petition for certification election among the regular rank-and-file employees of respondent company. Respondent company filed an Answer with Motion to Dismiss because of the inclusion of supervisory employees within petitioner union.The Med-Arbiter dismissed the petition for certification election.On appeal, the Department of Labor and Employment (DOLE) reversed the Med-Arbiter’s ruling. The Court of Appeals (CA) nullified the CA’s ruling. Issue: Whether or not the alleged mixture of rank-andfile and supervisory employees of petitioner union’s membership is a ground for the cancellation of petitioner union’s legal personality and dismissal of the petition for certification election? Held: No. While there is a prohibition against the mingling of supervisory and rank-and-file employees in one labor organization, the Labor Code does not provide for the effects thereof. Thus, the Court held that after a labor organization has been registered, it may exercise all the rights and privileges of a legitimate labor organization. Any mingling between supervisory and rank-and-file employees in its membership cannot affect its legitimacy for that is not among the grounds for cancellation of its registration, unless such mingling was brought about by misrepresentation, false statement or fraud under Article 239 of the Labor Code.

ISSUE: Whether or not the legitimacy of the legal personality of KML may be collaterally attacked in a petition for certification election? HELD: No. the legitimacy of the legal personality of KML cannot be collaterally attacked in a petition for certification election proceeding. This is in consonance with our ruling in Laguna Autoparts Manufacturing Corporation v. Office of the Secretary, Department of Labor and Employment that such legal personality may not be subject to a collateral attack but only through a separate action instituted particularly for the purpose of assailing it. The Court further held therein that to raise the issue of the respondent unions legal personality is not proper in this case. The pronouncement of the Labor Relations Division Chief, that the respondent union acquired a legal personality x x x cannot be challenged in a petition for certification election. The discussion of the Secretary of Labor and Employment on this point is also enlightening. Section 5, Rule V of D.O. 9 is instructive on the matter. It provides that the legal personality of a union cannot be the subject of collateral attack in a petition for certification election, but may be questioned only in an independent petition for cancellation of union registration. This has been the rule since NUBE v. Minister of Labor, 110 SCRA 274 (1981). What applies in this case is the principle that once a union acquires a legitimate status as a labor organization, it continues as such until its certificate of registration is cancelled or revoked in an independent action for cancellation. The legal personality of a legitimate labor organization x x x cannot be subject to a collateral attack. The law is very clear on this matter. x x x The Implementing Rules stipulate that a labor organization shall be deemed registered and vested with legal personality on the date of issuance of its certificate of registration. Once a

STA. LUCIA EAST COMMERCIAL CORPORATION (SLECC), Petitioner, vs. HON. SECRETARY OF LABOR AND EMPLOYMENT and STA. LUCIA EAST COMMERCIAL CORPORATION WORKERS ASSOCIATION (CLUPSLECCWA), Respondents. G.R. No. 162355 August 14, 2009 Facts: On 27 February 2001, Confederated Labor Union of the Philippines (CLUP), in behalf of its chartered local, instituted a petition for certification election among the regular rank-and-file employees of Sta. Lucia East Commercial Corporation and its Affiliates. The Med-Arbiter ordered the dismissal of the petition due to inappropriateness of the bargaining

25

unit. CLUP-SLECC and its Affiliates Workers Union reorganized itself and re-registered as CLUP-Sta. Lucia East Commercial Corporation Workers Association (CLUP-SLECCWA) limiting its membership to the rank-and-file employees of Sta. Lucia East Commercial Corporation. It was issued Certificate of Creation of a Local Chapter. It thereafter filed a petition for certification election. Petitioner SLECC filed a motion to dismiss. It averred that it has voluntarily recognized Samahang Manggagawa sa Sta. Lucia East Commercial (SMSLEC) on 20 July 2001 as the exclusive bargaining agent of its regular rank-and-file employees, and that collective bargaining negotiations already commenced between them. SLECC argued that the petition should be dismissed for violating the one year and negotiation bar. The Med-Arbiter ruled dismissed the petition for certification election. The Secretary of Labor and Employment, on appeal, reversed the decision of the Med-Arbiter. The Court of Appeals (CA) affirmed the ruling of the Secretary. Issue: Whether or not SLECCs voluntary recognition of SMSLEC was done while a legitimate labor organization was in existence in the bargaining unit? Held: Yes. Any applicant labor organization shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration.CLUP-SLECC and its Affiliates Workers Unions initial problem was that they constituted a legitimate labor organization representing a nonappropriate bargaining unit. However, CLUP-SLECC and its Affiliates Workers Union subsequently reregistered as CLUP-SLECCWA, limiting its members to the rank-and-file of SLECC. SLECC cannot ignore that CLUP-SLECC and its Affiliates Workers Union was a legitimate labor organization at the time of SLECCs voluntary recognition of SMSLEC. SLECC and SMSLEC cannot, by themselves, decide whether CLUP-SLECC and its Affiliates Workers Union represented an appropriate bargaining unit.The inclusion in the union of disqualified employees is not among the grounds for cancellation of registration, unless such inclusion is due to misrepresentation, false statement or fraud under the circumstances enumerated in Article 239 of the Labor Code.THUS, CLUP-SLECC AND ITS AFFILIATES WORKERS UNION, HAVING BEEN VALIDLY ISSUED A CERTIFICATE OF REGISTRATION, SHOULD BE CONSIDERED AS HAVING ACQUIRED JURIDICAL PERSONALITY WHICH MAY NOT BE ATTACKED COLLATERALLY. THE PROPER PROCEDURE FOR SLECC IS TO FILE A PETITION FOR CANCELLATION OF CERTIFICATE OF REGISTRATION2 OF CLUP-SLECC AND ITS AFFILIATES WORKERS UNION AND NOT TO IMMEDIATELY COMMENCE VOLUNTARY RECOGNITION PROCEEDINGS WITH SMSLEC.The

employer may voluntarily recognize the representation status of a union in unorganized establishments.SLECC WAS NOT AN UNORGANIZED ESTABLISHMENT WHEN IT VOLUNTARILY RECOGNIZED SMSLEC AS ITS EXCLUSIVE BARGAINING REPRESENTATIVE ON 20 JULY 2001. CLUP-SLECC AND ITS AFFILIATES WORKERS UNION FILED A PETITION FOR CERTIFICATION ELECTION ON 27 FEBRUARY 2001 AND THIS PETITION REMAINED PENDING AS OF 20 JULY 2001. THUS, SLECCS VOLUNTARY RECOGNITION OF SMSLEC ON 20 JULY 2001, THE SUBSEQUENT NEGOTIATIONS AND RESULTING REGISTRATION OF A CBA EXECUTED BY SLECC AND SMSLEC ARE VOID AND CANNOT BAR CLUPSLECCWAS PRESENT PETITION FOR CERTIFICATION ELECTION. COASTAL SUBIC BAY TERMINAL V. DOLE November 20, 2006 FACTS: Coastal Bay Subic Terminal Inc. RANK-ANDFILE UNION (CSBTI-RFU) and Coastal Bay Subic Terminal Inc. SUPERVISORY UNION (CSBTI-SU) filed separate petitions for certification election. The employer opposed, citing that both were not legitimate labor organizations and that the proposed Bargaining Units were not particularly described. The rank and file union insists that it has been issued a chartered certificate by ALU and the supervisory union, by the APSOTEU. The petition was dismissed by the Med Arbiter, holding that ALU and APSOTEU are one and the same federation and that in effect, the supervisory and RNF unions were in effect, affiliated with only one federation. ISSUE: 1. Whether or not the rank and file and supervisory unions were legitimate in a sense that they could file petitions for certification election. 2. Can supervisory employees join Rank and File unions? RULING: 1. Yes. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality; neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of 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. As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit. 2. No. Under Article 245 of the Labor Code, supervisory employees are not eligible for membership

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in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of potential conflicts of interest. Further, to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors’ labor union would represent conflicting interests, a local supervisors’ union should not be allowed to affiliate with the national federation of unions of rank-and-file employees where that federation actively participates in the union activity within the company. Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors’ local union applying for membership in a national federation the members of which include local unions of rank-and-file employees.

ISSUE: Whether or not the Secretary of DOLE can take cognizance of matters beyond the subject of the notice of strike in CBA negotiations? RULING: Yes. The Secretary of DOLE may. Based on the Notices of Strike filed by UFE-DFA-KMU, the Secretary of the DOLE rightly decided on matters of substance. That the union later on changed its mind is of no moment because to give premium to such would make the legally mandated discretionary power of the Dole Secretary subservient to the whims of the parties. It was UFE-DFA-KMU which first alleged a bargaining deadlock as the basis for the filing of its Notice of Strike; and at the time of the filing of the first Notice of Strike, several conciliation conferences had already been undertaken where both parties had already exchanged with each other their respective CBA proposals. In fact, during the conciliation meetings before the NCMB, but prior to the filing of the notices of strike, the parties had already delved into matters affecting the meat of the collective bargaining agreement.

[med arbiter denial of PCE affirmed by CA, SC] [note: Amendatory laws provide that supervisory employees MAY join RNF unions however for purposes of determination of Bargaining Unit membership, supervisory employees shall simply be deemed not included.]

STANDARD CHARTERED UNION V. CONFESOR

COLLECTIVE BARGAINING

BANK

EMPLOYEES

FACTS: Standard Chartered Bank (the Bank, for brevity) is a foreign banking corporation doing business in the Philippines. The exclusive bargaining agent of the rank and file employees of the Bank is the Standard Chartered Bank Employees Union (the Union, for brevity).

UNION OF FILIPRO EMPLOYEES V. NESTLE PHILS. March 3, 2008 Union of Filipro Employees – Drug Food and Allied Industries Union – Kilusang Mayo Uno was the sole and exclusive bargaining agent of the rank-and-file employees of Nestle belonging to Alabang and Cabuyao plants. Prior the expiration of the CBA, they signified their intent to renegotiate a new CBA. Nestle informed them about its counter proposal and that it implemented rules to govern the conduct of CBA negotiations. Due to a failure to reach an agreement, conciliation proceedings bargaining deadlock ensued. A notice of strike was filed by the union prediated on Nestle’s alleged ULP (bargaining in bad faith – by setting preconditions in the ground rules and/or refusing to include the issue of the retirement plan in the CBA negotiations. The Secretary assumed jurisdiction over the subject labor dispute.

Before the commencement of the negotiation, the Union, through Divinagracia, suggested to the Banks Human Resource Manager and head of the negotiating panel, Cielito Diokno, that the bank lawyers should be excluded from the negotiating team. The Bank acceded.[11] Meanwhile, Diokno suggested to Divinagracia that Jose P. Umali, Jr., the President of the National Union of Bank Employees (NUBE), the federation to which the Union was affiliated, be excluded from the Unions negotiating panel.[12] However, Umali was retained as a member thereof. On March 12, 1993, the parties met and set the ground rules for the negotiation. Diokno suggested that the negotiation be kept a family affair. The proposed noneconomic provisions of the CBA were discussed first.[13] Even during the final reading of the noneconomic provisions on May 4, 1993, there were still provisions on which the Union and the Bank could not agree. Temporarily, the notation DEFERRED was placed therein. Towards the end of the meeting, the Union manifested that the same should be changed to DEADLOCKED to indicate that such items remained unresolved. Both parties agreed to place the notation DEFERRED/DEADLOCKED.

Nestlé and UFE-DFA-KMU filed their respective position papers. Nestlé addressed several issues concerning economic provisions of the CBA as well as the non-inclusion of the issue of the Retirement Plan in the collective bargaining negotiations. On the other hand, UFE-DFA-KMU limited itself to the issue of whether or not the retirement plan was a mandatory subject in its CBA negotiation.

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The Union alleges that the Bank violated its duty to bargain; hence, committed ULP under Article 248(g) when it engaged in surface bargaining. It alleged that the Bank just went through the motions of bargaining without any intent of reaching an agreement, as evident in the Banks counter-proposals.

The petitioner asserts that the private respondent committed ULP, i.e., interference in the selection of the Unions negotiating panel, when Cielito Diokno, the Banks Human Resource Manager, suggested to the Unions President Eddie L. Divinagracia that Jose P. Umali, Jr., President of the NUBE, be excluded from the Unions negotiating panel. In support of its claim, Divinagracia executed an affidavit, stating that prior to the commencement of the negotiation, Diokno approached him and suggested the exclusion of Umali from the Unions negotiating panel, and that during the first meeting, Diokno stated that the negotiation be kept a family affair.

Surface bargaining is defined as going through the motions of negotiating without any legal intent to reach an agreement.[50] The resolution of surface bargaining allegations never presents an easy issue. The determination of whether a party has engaged in unlawful surface bargaining is usually a difficult one because it involves, at bottom, a question of the intent of the party in question, and usually such intent can only be inferred from the totality of the challenged partys conduct both at and away from the bargaining table. It involves the question of whether an employers conduct demonstrates an unwillingness to bargain in good faith or is merely hard bargaining.

ISSUE(1): Whether or not the Union was able to substantiate its claim of unfair labor practice against the Bank arising from the latters alleged interference with its choice of negotiator; surface bargaining; making bad faith non-economic proposals; and refusal to furnish the Union with copies of the relevant data

The minutes of meetings from March 12, 1993 to June 15, 1993 do not show that the Bank had any intention of violating its duty to bargain with the Union. Records show that after the Union sent its proposal to the Bank on February 17, 1993, the latter replied with a list of its counter-proposals on February 24, 1993. Thereafter, meetings were set for the settlement of their differences. The minutes of the meetings show that both the Bank and the Union exchanged economic and non-economic proposals and counter-proposals.

RULING: NO The circumstances that occurred during the negotiation do not show that the suggestion made by Diokno to Divinagracia is an anti-union conduct from which it can be inferred that the Bank consciously adopted such act to yield adverse effects on the free exercise of the right to self-organization and collective bargaining of the employees, especially considering that such was undertaken previous to the commencement of the negotiation and simultaneously with Divinagracias suggestion that the bank lawyers be excluded from its negotiating panel.

The Union has not been able to show that the Bank had done acts, both at and away from the bargaining table, which tend to show that it did not want to reach an agreement with the Union or to settle the differences between it and the Union. Admittedly, the parties were not able to agree and reached a deadlock. However, it is herein emphasized that the duty to bargain does not compel either party to agree to a proposal or require the making of a concession.[53] Hence, the parties failure to agree did not amount to ULP under Article 248(g) for violation of the duty to bargain.

The records show that after the initiation of the collective bargaining process, with the inclusion of Umali in the Unions negotiating panel, the negotiations pushed through. The complaint was made only on August 16, 1993 after a deadlock was declared by the Union on June 15, 1993. It is clear that such ULP charge was merely an afterthought. The accusation occurred after the arguments and differences over the economic provisions became heated and the parties had become frustrated. It happened after the parties started to involve personalities. As the public respondent noted, passions may rise, and as a result, suggestions given under less adversarial situations may be colored with unintended meanings. Such is what appears to have happened in this case.

ISSUE(2): whether or not the petitioner is estopped from filing the instant action. RULING: NO In the case, however, the approval of the CBA and the release of signing bonus do not necessarily mean that the Union waived its ULP claim against the Bank during the past negotiations. After all, the conclusion of the CBA was included in the order of the SOLE, while the signing bonus was included in the CBA itself. Moreover, the Union twice filed a motion for reconsideration respecting its ULP charges against the Bank before the SOLE.

The Duty to Bargain Collectively If at all, the suggestion made by Diokno to Divinagracia should be construed as part of the normal relations and innocent communications, which are all part of the friendly relations between the Union and Bank.

The Union Did Not Engage In Blue-Sky Bargaining

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We, likewise, do not agree that the Union is guilty of ULP for engaging in blue-sky bargaining or making exaggerated or unreasonable proposals.[59] The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. The minutes of the meeting show that the Union based its economic proposals on data of rank and file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the Bank in the Asian region.

They extended the original five-year period of the CBA by four (4) months.

GENERAL MILLING CORPORATION VS CA FEB 11, 2004

Issue: W/N the extension of the life of the CBA also extended the exclusive bargaining status as well

On January 21, 2003, nine (9) days before the January 30, 2003 expiration of the originally-agreed five-year CBA term (and four months and nine days away from the expiration of the amended CBA period), the respondent (SANAMA-SIGLO) filed before the Department of Labor and Employment (DOLE) a petition for certification election for the same rank-andfile unit covered by the FVCLU-PTGWO CBA.

On April 28, 1989, GMC and the union concluded a collective bargaining agreement (CBA) which included the issue of representation effective for a term of three years. The day before the expiration of the CBA, the union sent GMC a proposed CBA, with a request that a counter-proposal be submitted within ten (10) days. However, GMC had received collective and individual letters from workers who stated that they had withdrawn from their union membership, on grounds of religious affiliation and personal differences. Believing that the union no longer had standing to negotiate a CBA, GMC did not send any counter-proposal.

Ruling: NO. By express provision of Article 253-A, the exclusive bargaining status cannot go beyond 5 years and the representation status is a legal matter not for the parties to agree upon. Despite the agreement to extend the life of the CBA beyond the 5-yr period, the exclusive bargaining status is effective only for five years and hence, it can be challenged within the 60day period prior to the expiration of the CBA’s first five years. RFM CORPORATION V. KAMPI-NAFLU-KMU G.R. No. 162324, February 4, 2009 Carpio-Morales, J.

Issue: W/N GMC is guilty for ULP for violating the duty to bargain

DOCTRINE: If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein questioned provision, the literal meaning thereof shall prevail.

Ruling: YES. The law mandates that the representation provision of a CBA should last for five years.The relation between labor and management should be undisturbed until the last 60 days of the fifth year. It is indisputable that when the union requested for a renegotiation of the economic terms of the CBA on November 29, 1991, it was still the certified collective bargaining agent of the workers. The withdrawal of some union members from the union will not affect the majority status of the union as the exclusive bargaining agent. GMC should have responded and kept its duty to bargain collectively.

FACTS: Petitioner RFM Corporation (RFM) is a domestic corporation engaged in flour-milling and animal feeds manufacturing. Sometime in 2000, its Flour Division and SFI Feeds Division entered into collective bargaining agreements (CBAs) with their respective labor unions, the Kasapian ng Manggagawang Pinagkaisa-RFM (KAMPI-NAFLU-KMU) for the Flour Division, and Sandigan at Ugnayan ng Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLUKMU) for the Feeds Division (respondents). The CBAs, which contained similar provisions, were effective for five years, from July 1, 2000 up to June 30, 2005. A section of the CBAs provides that the company should make payment if Black Saturday, November 1, and December 31 were declared as special holidays by the National Government.

FVC LABOR UNION – PHIL. TRANSPORT AND GENERAL WORKERS ASSOCIATION VS. SANAMA-FVC-SIGLO Facts: On December 22, 1997, the petitioner FVCLUPTGWO – the recognized bargaining agent of the rank-and-file employees of the FVC Philippines, – signed a five-year collective bargaining agreement (CBA) with the company. The five-year CBA period was from February 1, 1998 to January 30, 2003. At the end of the 3rd year of the five-year term and pursuant to the CBA, FVCLU-PTGWO and the company entered into the renegotiation of the CBA and modified, among other provisions, the CBA’s duration.

During the first year of the effectivity of the CBAs in 2000, December 31 which fell on a Sunday was declared by the national government as a special holiday. Respondents thus claimed payment of their members’ salaries, invoking the above-stated CBA provision. Petitioner refused the claims for payment,

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averring that December 31, 2000 was not compensable as it was a rest day. The controversy resulted in a deadlock, drawing the parties to submit the same for voluntary arbitration. The voluntary arbitrator ruled in favor of the respondents and upon appeal, the Court of Appeals affirmed the VA’s decision.

to the privileges and benefits enjoyed by regular employees. ABS-CBN alleged that the petitioners’ services were contracted on various dates by its Cebu station as independent contractors/off camera talents, and they were not entitled to regularization in these capacities. Thus they are not entitled to the benefits granted under their collective bargaining agreement.

ISSUE: Whether or not the employees are entitled to the questioned salary according to the provision of the CBA.

On January 17, 2002, Labor Arbiter Rendoque rendered his decision5 holding that the petitioners were regular employees of ABS-CBN, not independent contractors, and are entitled to the benefits and privileges of regular employees. Upon appeal, the NLRC affirmed the Labor Arbiter’s Decision.

HELD: Yes. If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein questioned provision, the literal meaning thereof shall prevail. That is settled.5 As such, the daily-paid employees must be paid their regular salaries on the holidays which are so declared by the national government, regardless of whether they fall on rest days. The CBA is the law between the parties, hence, they are obliged to comply with its provisions.7 Indeed, if petitioner and respondents intended the provision in question to cover payment only during holidays falling on work or weekdays, it should have been so incorporated therein. Petitioner maintains, however, that the parties failed to foresee a situation where the special holiday would fall on a rest day. The Court is not persuaded. The Labor Code specifically enjoins that in case of doubt in the interpretation of any law or provision affecting labor, it should be interpreted in favor of labor.

ISSUE: Whether or not the petitioners are entitled to the benefits under the CBA. HELD: Yes. Under the terms of the CBA, the petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. The Supreme Court sees no merit in ABS-CBN’s arguments that the petitioners are not entitled to CBA benefits because: (1) they did not claim these benefits in their position paper; (2) the NLRC did not categorically rule that the petitioners were members of the bargaining unit; and (3) there was no evidence of this membership. CBA coverage is not only a question of fact, but of law and contract. The factual issue is whether the petitioners are regular rank-and-file employees of ABS-CBN. The tribunals below uniformly answered this question in the affirmative.

FULACHE V. ABS-CBN BROADCASTING CORPORATION G.R. No. 183810, January 21, 2010 Brion, J. DOCTRINE: CBA coverage is not only a question of fact, but of law and contract.

EMPLOYEES UNION PHILIPPINES December 6, 2010

FACTS:

OF

BAYER

V.

BAYER

FACTS: Employees Union of Bayer Philippines is the exclusive bargaining agent of all rank-and-file employees of Bayer Philippines (Bayer). In 1997, its president Juanito S. Facundo, negotiated with Bayer for the signing of a CBA. During the negotiations, EUBP rejected Bayers wage-increase proposal resulting in a bargaining deadlock.

Petitioners, who worked as drivers, cameramen, and editors for respondent, filed several complaints against the latter for unfair labor practice, regularization, and money claims. The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) executed a collective bargaining agreement (CBA) effective December 11, 1999 to December 10, 2002; they only became aware of the CBA when they obtained copies of the agreement; they learned that they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in violation of the Labor Code. They claimed they had already rendered more than a year of service in the company and, therefore, should have been recognized as regular employees entitled to security of tenure and

Pending the resolution of the dispute, respondents, headed by Avelina Remigio without any authority from their union leaders, accepted Bayers wage-increase proposal. EUBPs grievance committee questioned Remigios action and reprimanded Remigio and her allies. Thereafter, the DOLE Secretary issued an

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arbitral award ordering EUBP and Bayer to execute a CBA.

Whether an imposed CBA has the same effect as that of a CBA duly agreed upon by the parties.

Meanwhile, the rift between Facundos leadership and Remigios group broadened. Six months after the CBA, respondent sought to disaffiliate from the union. A tugof-war then ensued between the two rival groups, with both seeking recognition from Bayer and demanding remittance of the union dues collected from its rankand-file members. Bayer refused to accede to the demands of the 2 group but subsequently turn over the collected union dues to herein respondent. Hence, petitioner filed this case.

HELD: YES Considering that no new CBA had been, in the meantime, agreed upon by GMC and the Union, we find, pursuant to Article 253 of the Labor Code, the provisions of the imposed CBA continues to have full force and effect until a new CBA has been entered into by the parties. Article 253 mandates the parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the 60-day period prior to the expiration of the old CBA and/or until a new agreement is reached by the parties. In the same manner that it does not provide for any exception nor qualification on which economic provisions of the existing agreement are to retain its force and effect, the law does not distinguish between a CBA duly agreed upon by the parties and an imposed CBA like the one under consideration.

ISSUE: Whether the act of the management of Bayer in dealing and negotiating with Remigios splinter group despite its validly existing CBA with EUBP can be considered unfair labor practice. HELD: YES. Bayer committed ULP. Indeed, in Silva v. National Labor Relations Commission, we explained the correlations of Article 248 (1) and Article 261 of the Labor Code to mean that for a ULP case to be cognizable by the Labor Arbiter, and for the NLRC to exercise appellate jurisdiction thereon, the allegations in the complaint must show prima facie the concurrence of two things, namely: (1) gross violation of the CBA; and (2) the violation pertains to the economic provisions of the CBA.

While it is true that the provisions of the imposed CBA extend beyond said remaining two-year duration of the original CBA in view of the parties admitted failure to conclude a new CBA, the corresponding computation of the benefits accruing in favor of GMCs covered employees after the term of the original CBA was correctly excluded in the aforesaid 27 October 2005 order issued in RAB VII-06-0475-1992. Rather than the abbreviated pre-execution proceedings before Executive Labor Arbiter Violeta Ortiz-Bantug, the computation of the same benefits beyond 30 November 1993 should, instead, be threshed out by GMC and the Union in accordance with the Grievance Procedure outlined as follows under Article XII of the imposed CBA As for the benefits after the expiration of the term of the parties original CBA, we find that the extent thereof as well as identity of the employees entitled thereto will be better and more thoroughly threshed out by the parties themselves in accordance with the grievance procedure outlined in Article XII of the imposed CBA.

This pronouncement in Silva, however, should not be construed to apply to violations of the CBA which can be considered as gross violations per se, such as utter disregard of the very existence of the CBA itself, similar to what happened in this case. When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA. GENERAL MILLING CORPORATION INDEPENDENT LABOR UNION V. GENERAL MILLING CORPORATION June 15, 2011

MALAYAN EMPLOYEES ASSOCIATION MALAYAN INSURANCE CO., G.R. No. 181357,February 2, 2010

FACTS: General Milling Corporation and the Union entered into a collective bargaining agreement which provided, among other terms, the latters representation of the collective bargaining unit for a three-year term made to retroact to 1 December 1988. On 29 November 1991 or one day before the expiration of the subject CBA, the Union sent a draft CBA proposal to GMC, with a request for counter-proposals from the latter, for the purpose of renegotiating the existing CBA between the parties. In view of GMCs failure to comply with said request, the Union commenced the complaint for unfair labor practice.

V.

Facts: Rodolfo Mangalino, who is a union member of Malayan Employees Associations was suspended for taking a union leave without the prior authority of his department head and despite a previous disapproval of the requested leave. A provision in the unions collective bargaining agreement (CBA) with the company allows union officials to avail of union leaves with pay for a total of ninety-man days per year for the purpose of attending grievance meetings, LaborManagement Committee meetings, annual National Labor Management Conferences, labor education programs and seminars, and other union activities.

ISSUE:

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The company issued a rule in November 2002 requiring not only the prior notice that the CBA expressly requires, but prior approval by the department head before the union and its members can avail of union leaves. The rule was placed into effect in November 2002 without any objection from the union until a union officer, Mangalino, filed union leave applications in January and February, 2004. His department head disapproved the applications because the department was undermanned at that time.

issue) in the NCMB. Moreover, alleged violations of the CBA should be resolved according to the grievance procedure laid out therein. Thus, the labor arbiter had no jurisdiction over the complaint. Issue: Is the contention that the labor arbiter lacks jurisdiction as the case involves interpretation of the provision of CBA valid? Held: Yes. Petitioners clearly and consistently questioned the legality of RGMIs adoption of the new salary scheme (i.e., piece-rate basis), asserting that such action, among others, violated the existing CBA. Indeed, the controversy was not a simple case of illegal dismissal but a labor dispute involving the manner of ascertaining employees’ salaries, a matter which was governed by the existing CBA.

Issue: Whether or not the suspension is invalid and violated the CBA? Held: No. While it is true that the union and its members have been granted union leave privileges under the CBA, the grant cannot be considered separately from the other provisions of the CBA, particularly the provision on management prerogatives where the CBA reserved for the company the full and complete authority in managing and running its business. The prior approval policy fully supported the validity of the suspensions the company imposed on Mangalino. We point out additionally that as an employee, Mangalino had the clear obligation to comply with the management disapproval of his requested leave while at the same time registering his objection to the company regulation and action. That he still went on leave, in open disregard of his superiors orders, rendered Mangalino open to the charge of insubordination, separately from his absence without official leave.

Under Article 261, voluntary arbitrators have original and exclusive jurisdiction over matters which have not been resolved by the grievance machinery. Pursuant to Articles 217 in relation to Articles 260 and 261 of the Labor Code, the labor arbiter should have referred the matter to the grievance machinery provided in the CBA. Because the labor arbiter clearly did not have jurisdiction over the subject matter, his decision was void. CIRTEK EMPLOYEES LABOR UNION FEDERATION OF FREE WORKERS vs CIRTEK Facts: Amicable settlement of the CBA between petitioner union and respondent company was deadlocked, petitioner went on strike. Secretary of Labor assumed jurisdiction over the controversy and issued a Return to Work Order which was complied with. Before the Secretary of Labor could rule on the controversy, respondent created a Labor Management Council (LMC) through which it concluded with the officers of petitioner a Memorandum of Agreement (MOA) providing for daily wage increases of P6.00 per day effective January 1, 2004 and P9.00 per day effective January 1, 2005. Petitioner submitted the MOA via Motion and Manifestation to the Secretary of Labor, alleging that the remaining officers signed the MOA under respondents assurance that should the Secretary order a higher award of wage increase, respondent would comply.

SANTUYO VS. REMERCO GARMENTS G.R. No. 174420, March 22, 2010 Facts: Petitioners, who had been employed as sewers, were among those recalled due to the strike that was subsequently declared illegal. Those who were recalled are allowed to resume work on the condition that they would no longer be paid a daily rate but on a piece-rate basis. Without allowing RGMI to normalize its operations, the union filed a notice of strike in the National Conciliation and Mediation Board (NCMB) on August 8, 1995. According to the union, RGMI conducted a time and motion study and changed the salary scheme from a daily rate to piece-rate basis without consulting it. RGMI therefore not only violated the existing collective bargaining agreement (CBA) but also diminished the salaries agreed upon. It therefore committed an unfair labor practice. Later, petitioners filed a complaint with the labor arbiter and amended their complaint, stating that respondents suspended them for questioning their decision to pay salaries on a piece-rate basis. Respondents, on the other hand, moved to dismiss the complaint in view of the pending conciliation proceedings (which involved the same

Secretary of Labor resolved the CBA deadlock by awarding a wage increase of from P6.00 to P10.00 per day effective January 1, 2004 and from P9.00 to P15.00 per day effective January 1, 2005, and adopting all other benefits as embodied in the MOA. Respondent moved for a reconsideration of the Decision as petitioners vice-president submitted a Muling Pagpapatibay ng Pagsang-ayon sa Kasunduan

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na may Petsang ika-4 ng Agosto 2005, stating that the union members were waiving their rights and benefits under the Secretary’s Decision. Court ruled in favor of respondent and accordingly set aside the Decision of the Secretary of Labor. It held that the Secretary of Labor gravely abused his discretion in not respecting the MOA. Petitioners filed the present petition, maintaining that the Secretary of Labors award is in order, being in accord with the parties CBA history ─ respondent having already granted P15.00 per day for 2001, P10.00 per day for 2002, and P10.00 per day for 2003, and that the Secretary has the power to grant awards higher than what are stated in the CBA.

consideration to the context in which it is negotiated and purpose which it is intended to serve. EASTERN TELECOMMUNICATIONS, PHIL., INC. V. EASTERN TELECOMS UNION G.R. No. 185665; February 8, 2012 FACTS: Eastern Telecommunications Phils., Inc. (ETPI) is a corporation engaged in the business of providing telecommunications facilities employing approximately 400 employees. Eastern Telecoms Employees Union (ETEU) is the certified exclusive bargaining agent of the company’s rank and file employees with a strong following of 147 regular members. It has an existing collecti[ve] bargaining agreement with the company to expire in the year 2004 with a Side Agreement signed on September 3, 2001. The labor dispute was a spin-off of the companys plan to defer payment of the 2003 14th, 15th and 16th month bonuses sometime in April 2004. The company’s main ground in postponing the payment of bonuses is due to allege continuing deterioration of company’s financial position which started in the year 2000. However, ETPI while postponing payment of bonuses sometime in April 2004, such payment would also be subject to availability of funds.

Issue: Whether or not the MOA entered into by the petitioner and the respondent constitutes CBA between them and thus restricts the Secretary’s leeway in deciding matters before it Held: No. It is well-settled that the Secretary of Labor, in the exercise of his power to assume jurisdiction under Art. 263 (g)[11] of the Labor Code, may resolve all issues involved in the controversy including the award of wage increases and benefits. While an arbitral award cannot per se be categorized as an agreement voluntarily entered into by the parties because it requires the intervention and imposing power of the State thru the Secretary of Labor when he assumes jurisdiction, the arbitral award can be considered an approximation of a collective bargaining agreement which would otherwise have been entered into by the parties, hence, it has the force and effect of a valid contract obligation. Since the filing and submission of the MOA did not have the effect of divesting the Secretary of his jurisdiction, or of automatically disposing the controversy, then neither should the provisions of the MOA restrict the Secretary’s leeway in deciding the matters before him.

Invoking the Side Agreement of the existing Collective Bargaining Agreement for the period 2001-2004 between ETPI and ETEU which stated as follows: “4. Employment Related Bonuses. The Company confirms that the 14th, 15th and 16th month bonuses (other than 13th month pay) are granted.” The union strongly opposed the deferment in payment of the bonuses by filing a preventive mediation complaint with the NCMB. The company declared that until the matter is resolved in a compulsory arbitration, the company cannot and will not pay any bonuses to any and all union members. ETEU filed a Notice of Strike on the ground of unfair labor practice for failure of ETPI to pay the bonuses in gross violation of the economic provision of the existing CBA. Secretary of Labor and Employment, finding that the company is engaged in an industry considered vital to the, certified the labor dispute for compulsory arbitration.

While a contract constitutes the law between the parties, this is so in the present case with respect to the CBA, not to the MOA in which even the unions signatories had expressed reservations thereto. But even assuming arguendo that the MOA is treated as a new CBA, since it is imbued with public interest, it must be construed liberally and yield to the common good. While the terms and conditions of a CBA constitute the law between the parties, it is not, however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due

ETEU theorized that the grant of the subject bonuses is not only a company practice but also a contractual obligation of ETPI to the union members. ETEU contended that the unjustified and malicious refusal of the company to pay the subject bonuses was a clear violation of the economic provision of the CBA and constitutes unfair labor practice (ULP). On the other hand, ETPI contends that NLRC had no jurisdiction over the issue which merely involved the interpretation of the economic provision of the 2001-2004 CBA Side Agreement. It averred that the subject bonuses were not part of the legally demandable wage and the grant thereof to its employees was an act of pure gratuity and generosity on its part, involving the exercise of management prerogative and always dependent on

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the financial performance and realization of profits. ETPI emphasized that even if it had an unconditional obligation to grant bonuses to its employees, the drastic decline in its financial condition had already legally released it therefrom pursuant to Article 1267 of the Civil Code.

when the giving of such bonus has been the company’s long and regular practice. The giving of the subject bonuses cannot be peremptorily withdrawn by ETPI without violating Article 100 of the Labor Code. PNCC SKYWAY TRAFFIC MANAGEMENT AND SECURITY DIVISION WORKERS ORGANIZATION (PSTMSDWO) V. PNCC SKYWAY CORPORATION G.R. No. 171231; February 17, 2010

NLRC dismissed ETEUs complaint and held that ETPI could not be forced to pay the union members the bonuses as the payment of these additional benefits was basically a management prerogative. ETEU moved for reconsideration but the motion was denied. ETEU filed a petition for certiorari. The CA declared that the Side Agreements of the 1998 and 2001 CBA created a contractual obligation. However, the CA sustained the NLRC finding that the allegation of ULP was devoid of merit. ETPI appealed via Rule 45 of the Rules of Court.

FACTS: Petitioner PSTMSDWO is a duly registered labor union. Respondent PNCC Skyway Corporation is a corporation duly organized and operating under and by virtue of the laws of the Philippines. On November 15, 2002, petitioner and respondent entered into a Collective Bargaining Agreement (CBA) incorporating the terms and conditions of their agreement which included vacation leave and expenses for security license provisions.

ISSUES: (1) Whether or not petitioner ETPI is liable to pay 14th, 15th and 16th month bonuses for the year 2003 and 14th month bonus for the year 2004 to the members of respondent union; and (2) Whether or not the CA erred in not dismissing outright ETEUs petition for certiorari.

The pertinent provisions of the CBA relative to vacation leave and sick leave are as follows: “[b] The company shall schedule the vacation leave of employees during the year taking into consideration the request of preference of the employees. [c] Any unused vacation leave shall be converted to cash and shall be paid to the employees on the first week of December each year.”

RULING: The Court finds no merit in the petition. A bonus, however, becomes a demandable or enforceable obligation when it is made part of the wage or salary or compensation of the employee. A reading of the [CBA Side Agreements] reveals that the same provides for the giving of 14th, 15th and 16th month bonuses without qualification. The records are also bereft of any showing that the ETPI made it clear before or during the execution of the Side Agreements that the bonuses shall be subject to any condition. In the absence of any proof that ETPIs consent was vitiated by fraud, mistake or duress, it is presumed that it entered into the Side Agreements voluntarily, that it had full knowledge of the contents thereof and that it was aware of its commitment under the contract. Notwithstanding such huge losses, ETPI entered into the 2001-2004 CBA Side Agreement. The parties to the contract must be presumed to have assumed the risks of unfavorable developments. It is, therefore, only in absolutely exceptional changes of circumstances that equity demands assistance for the debtor. In the case at bench, the Court determines that ETPIs claimed depressed financial state will not release it from the binding effect of the 2001-2004 CBA Side Agreement. Considering that ETPI had been continuously suffering huge losses from 2000 to 2002, its business losses in the year 2003 were not exactly unforeseen or unexpected. Granting arguendo that the CBA Side Agreement does not contractually bind petitioner ETPI to give the subject bonuses, nevertheless, the Court finds that its act of granting the same has become an established company practice such that it has virtually become part of the employee’s salary or wage. A bonus may be granted on equitable consideration

The Head of the TMSD issued a Memorandum dated January 9, 2004 to all TMSD personnel. In the said memorandum, it was provided that: “SCHEDULED VACATION LEAVE WITH PAY. The 17 days (15 days SVL plus 2-day-off) scheduled vacation leave (SVL) with pay for the year 2004 had been published for everyone to take a vacation with pay which will be our opportunity to enjoy quality time with our families and perform our other activities requiring our personal attention and supervision. Swapping of SVL schedule is allowed on a oneon-one basis by submitting a written request at least 30 days before the actual schedule of SVL duly signed by the concerned parties. However, the undersigned may consider the rescheduling of the SVL upon the written request of concerned TMSD personnel at least 30 days before the scheduled SVL. Re-scheduling will be evaluated taking into consideration the TMSDs operational requirement.” Petitioner objected to the implementation of the said memorandum. It insisted that the individual members of the union have the right to schedule their vacation leave. It opined that the unilateral scheduling of the

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employees' vacation leave was done to avoid the monetization of their vacation leave in December 2004. Petitioner also demanded that the expenses for the required in-service training of its member security guards, as a requirement for the renewal of their license, be shouldered by the respondent.

CBA must be strictly adhered to and respected if its ends have to be achieved, being the law between the parties. In Faculty Association of Mapua Institute of Technology (FAMIT) v. Court of Appeals, this Court held that the CBA during its lifetime binds all the parties. The provisions of the CBA must be respected since its terms and conditions constitute the law between the parties. The parties cannot be allowed to change the terms they agreed upon on the ground that the same are not favorable to them.

Due to the disagreement between the parties, petitioner elevated the matter to the DOLE-NCMB for preventive mediation. The voluntary arbitrator ruled that the scheduling of all vacation leaves shall be under the discretion of the union members, and the management to convert them into cash all the leaves which the management compelled them to use. It also ruled that the in-service-training of the company security guards, as a requirement for renewal of licenses, shall not be their personal account but that of the company. All other claims were dismissed for lack of merit. Respondent filed a motion for reconsideration, which the voluntary arbitrator denied. Respondent filed a Petition for Certiorari with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction with the CA, and the CA annulled and set aside the decision and order of the voluntary arbitrator. The CA ruled that since the provisions of the CBA were clear, the voluntary arbitrator has no authority to interpret the same beyond what was expressly written. Petitioner filed a motion for reconsideration. Hence, the instant petition.

In the grant of vacation leave privileges to an employee, the employer is given the leeway to impose conditions on the entitlement to and commutation of the same, as the grant of vacation leave is not a standard of law, but a prerogative of management. Along that line, since the grant of vacation leave is a prerogative of the employer, the latter can compel its employees to exhaust all their vacation leave credits. Of course, any vacation leave credits left unscheduled by the employer, or any scheduled vacation leave that was not enjoyed by the employee upon the employer's directive, due to exigencies of the service, must be converted to cash, as provided in the CBA. However, it is incorrect to award payment of the cash equivalent of vacation leaves that were already used and enjoyed by the employee. Accordingly, the vacation leave privilege was not intended to serve as additional salary, but as a non-monetary benefit. To give the employees the option not to consume it with the aim of converting it to cash at the end of the year would defeat the very purpose of vacation leave. Petitioner's contention that labor contracts should be construed in favor of the laborer is without basis and, therefore, inapplicable to the present case. This rule of construction does not benefit petitioners because, as stated, there is here no room for interpretation. Since the CBA is clear and unambiguous, its terms should be implemented as they are written.

ISSUES: (1) Whether the management has the sole discretion to schedule the vacation leave; (2) Whether the management is not liable for the in-service-training of the security guard. RULING: (1) As to the issue on vacation leaves, the same has no merit. The rule is that where the language of a contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids. The intention of the parties must be gathered from that language, and from that language alone. Stated differently, where the language of a written contract is clear and unambiguous, the contract must be taken to mean that which, on its face, it purports to mean, unless some good reason can be assigned to show that the words used should be understood in a different sense.

(2) This brings Us to the issue of who is accountable for the in-service training of the security guards. On this point, We find the petition meritorious. Although it is a rule that a contract freely entered into between the parties should be respected, since a contract is the law between the parties, there are, however, certain exceptions to the rule, specifically Article 1306 of the Civil Code. Moreover, the relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. If the provisions in the CBA run contrary to law, public morals, or public policy, such provisions may very well be voided.

In the case at bar, the contested provision of the CBA is clear and unequivocal. Article VIII, Section 1 (b) of the CBA categorically provides that the scheduling of vacation leave shall be under the option of the employer. The preference requested by the employees is not controlling because respondent retains its power and prerogative to consider or to ignore said request.

In the present case, Article XXI, Section 6 of the CBA provides that All expenses of security guards in securing /renewing their licenses shall be for their personal account. A reading of the provision would reveal that it encompasses all possible expenses a

Thus, if the terms of a CBA are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall prevail. In fine, the

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security guard would pay or incur in order to secure or renew his license.

RULING Yes. The subject of litigation is incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to Section 19 (1) of BP 129, as amended. Being an ordinary civil action, the same is beyond the jurisdiction of labor tribunals. The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms of Discrimination Against Women, and the power to apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. Here, the employer-employee relationship between the parties is merely incidental and the cause of action ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.

Since it is the primary responsibility of operators of company security forces to maintain and upgrade the standards of efficiency, discipline, performance and competence of their personnel, it follows that the expenses to be incurred therein shall be for the personal account of the company. Further, the intent of the law to impose upon the employer the obligation to pay for the cost of its employees training is manifested in the aforementioned laws provision that Where the quality of training is better served by centralization, the CFSD Directors may activate a training staff from local talents to assist. The cost of training shall be pro-rated among the participating agencies/private companies. It can be gleaned from the said provision that cost of training shall be pro-rated among participating agencies and companies if the training is best served by centralization. The law mandates pro-rating of expenses because it would be impracticable and unfair to impose the burden of expenses suffered by all participants on only one participating agency or company. Thus, it follows that if there is no centralization, there can be no pro-rating, and the company that has its own security forces shall shoulder the entire cost for such training. If the intent of the law were to impose upon individual employees the cost of training, the provision on the pro-rating of expenses would not have found print in the law.

Thus, where the principal relief sought is to be resolved not by reference to the Labor Code or other labor relations statute or a collective bargaining agreement but by the general civil law, the jurisdiction over the dispute belongs to the regular courts of justice and not to the labor arbiter and the NLRC. In such situations, resolution of the dispute requires expertise, not in labor management relations nor in wage structures and other terms and conditions of employment, but rather in the application of the general civil law. Clearly, such claims fall outside the area of competence or expertise ordinarily ascribed to labor arbiters and the NLRC and the rationale for granting jurisdiction over such claims to these agencies disappears.

HALAGUEÑA, et al v. PHILIPPINE AIRLINES INCORPORATED G.R. No. 172013, October 2, 2009, Peralta

If We divest the regular courts of jurisdiction over the case, then which tribunal or forum shall determine the constitutionality or legality of the assailed CBA provision? This Court holds that the grievance machinery and voluntary arbitrators do not have the power to determine and settle the issues at hand. They have no jurisdiction and competence to decide constitutional issues relative to the questioned compulsory retirement age. Their exercise of jurisdiction is futile, as it is like vesting power to someone who cannot wield it.

FACTS Petitioners are members of the Flight Attendants and Stewards Association of the Philippines (FASAP), a labor organization certified as the sole and exclusive bargaining representative of the flight attendants, flight stewards and pursers of PAL. In 2011, PAL and FASAP entered into a CBA, a provision of which provides that compulsory retirement for cabin attendants hired before November 1996 shall be 55 (years old) for females and 60 for males. Petitioners manifested that the aforementioned CBA provision is discriminatory, and demanded for an equal treatment with their male counterparts. Petitioners filed a Special Civil Action for Declaratory Relief with the Makati RTC seeking to invalidate the said CBA provision. The RTC upheld its jurisdiction over the case, reasoning that the allegations do not make out a labor dispute arising from employer-employee relationship nor does it involve a claim against PAL.

The change in the terms and conditions of employment, should Section 144 of the CBA be held invalid, is but a necessary and unavoidable consequence of the principal relief sought, i.e., nullification of the alleged discriminatory provision in the CBA. Thus, it does not necessarily follow that a resolution of controversy that would bring about a change in the terms and conditions of employment is a labor dispute, cognizable by labor tribunals. It is unfair to preclude petitioners from invoking the trial court's jurisdiction merely because it may eventually result into a change of the terms and conditions of employment. Along that line, the trial court is not asked to set and fix the terms and conditions of employment,

ISSUE Does the RTC have jurisdiction over the petitioners’ action challenging the legality or constitutionality of the provisions on the compulsory retirement age contained in the CBA?

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but is called upon to determine whether CBA is consistent with the laws.

the regular worker.. Because a reliever is treated as if mere project employee

Although the CBA provides for a procedure for the adjustment of grievances, such referral to the grievance machinery and thereafter to voluntary arbitration would be inappropriate to the petitioners, because the union and the management have unanimously agreed to the terms of the CBA and their interest is unified.

Issue: 1) WON respondent in this case is a casual employee 2) WON the nature of the work of a reliever in this case is covered by the CBA 2.1) WON respondent became a regular employee Ruling: 1) Yes, he is a casual employee but the basis of this is not because of the 1st paragraph of article 280.. But under the 2nd paragraph because he does not fall under any kinds of employee in article 280, however, to be a regular employee under the 2nd paragraph the employee must have rendered at least 1 year of service whether or not it is continous or broken, the total work time of the respondent is only 228.5 days. Therefore he is not a regular employee UNDER THE LABOR CODE ALONE.

The he dispute in the case at bar is not between FASAP and respondent PAL, who have both previously agreed upon the provision on the compulsory retirement of female flight attendants as embodied in the CBA. The dispute is between respondent PAL and several female flight attendants who questioned the provision on compulsory retirement of female flight attendants. Thus, applying the principle in the aforementioned case cited, referral to the grievance machinery and voluntary arbitration would not serve the interest of the petitioners. #

(to justify as to why didn't the court consider the 36 months to be beyond 1 year despite the fact that the law allows "broken"... Because when the law tilts the scale to labor, it must not be so tilted as to cause injustice to the employer.. Plus, it is a common industrial practice in stevedoring to get relievers in cases where the regular stevedores could not make it to work so that the business could continue for 24 hours or to finish without any interruptions, and the fact that there was no prohibition imposed to the respondent that he can freely offer his service to other persons)

PASSI (STEVEDORING AND ARASTRE COMPANY) V. BACOLOT Doctrine: when the scales are tilted towards labor it must not be so tilted as to cause injustice to the employer If a reliever is allowed to work for at least 365 accumulated days.. He may become a regular employee under article 280(2). FACTS Bacolot was hired by PASSI to work as a stevedore for an accumulated 36 months (but only worked for 228.5 days - average is 1 week of work per month), the nature of his work is that of a reliever, he will only work if the regular steverdore is absent.

2) Because of the "union shop" clause under the existing CBA, the respondent being seen by the law as a "casual employee" is deemed to have been a member of a union within a certain time as a precondition to employment (to clarify, even non-union members may be hired but subject to this condition), became a regular employee by virtue of the provisions of the CBA because 228.5 days is equivalent to 8 months of work which is beyond the agreed 6 months under the CBA.

On the CBA: 1) there is a stipulation that casual/probationary employees shall become regular employees after the accumulation of 6 months of employment from their hiring.;

UNFAIR LABOR PRACTICE

2) and the adoption of a "union shop" as a condition for employment - there must be a certain time upon which the employee must become a member of a union upon his hiring

EMPLOYEES UNION OF BAYER PHILS (EUBP) VS. BAYER PHILIPPINES, INC. G.R. No. 162943, December 6, 2010, Villarama Petitioner EUBP is the exclusive bargaining agent of respondent Bayer. The parties figured in a bargaining deadlock in 1997 for failure to agree on Bayer’s offer of 9.9% wage increase. Pending the resolution of the dispute, AvelinaRemigio (Remigio) and 27 other union members accepted said offer without authority from the union leaders. EUBP’s grievance committee questioned Remigios action and reprimanded Remigio and

Contention of the respondent: 1) he worked for beyond 6 months, thus, following the CBA he should already be a regular employee Contention of the petitioner: 1) CBA will not apply to you, you are neither a regular, casual nor a probationary employee.. You are just a mere reliever whose work depends on the absence of

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her allies. Later, the DOLE Secretary issued an arbitral award ordering EUBP and Bayer to execute a CBA retroactive to January 1, 1997 and to be made effective until December 31, 2001.

if there is no legitimate reason for doing so and without first following the proper procedure. If such behavior would be tolerated, bargaining and negotiations between the employer and the union will never be truthful and meaningful, and no CBA forged after arduous negotiations will ever be honored or be relied upon. A CBA entered into by a legitimate labor organization that has been duly certified as the exclusive bargaining representative and the employer becomes the law between them.

Meanwhile, the rift between the Facundo’s leadership and Remegio’s group broadened. Six months after the signing of the 1997-2001 CBA, the latter group formed the Reformed Employees Union of Bayer Philippines (REUBP). A tug-of-war then ensued between the two rival groups, with both seeking recognition from Bayer and demanding remittance of the union dues collected from its rank-and files members. Bayer decided to put the union dues in a trust account.

When an employer proceeds to negotiate with a splinter union despite the existence of its valid CBA with the duly certified and exclusive bargaining agent, the former indubitably abandons its recognition of the latter and terminates the entire CBA.

EUBP then filed a complaint for ULP against Bayer for the non-remittance of dues. During its pendency, Bayer turned over the collected union dues to Anastacia Villareal, Treasurer of REUBP. Herein complaint was, however, dismissed and no appeal was taken.

Respondents cannot claim good faith to justify their acts. They knew that Facundos group represented the duly-elected officers of EUBP. Moreover, they were cognizant of the fact that even the DOLE Secretary himself had recognized the legitimacy of EUBPs mandate by rendering an arbitral award ordering the signing of the 1997-2001 CBA between Bayer and EUBP. Respondents were likewise well-aware of the pendency of the intra-union dispute case, yet they still proceeded to turn over the collected union dues to REUBP and to effusively deal with Remigio. The totality of respondents conduct, therefore, reeks with anti-EUBP animus.

Petitioners filed a second ULP complaint against herein respondents. Three days later, petitioners amended the complaint charging the respondents with unfair labor practice committed by organizing a company union, gross violat ion of the CBA and violation of their duty to bargain. On even date, REUBP and Bayer agreed to sign a new CBA. Remegio immediately informed her allies of the management decision. In response, petitioners immediately filed an urgent motion for the issuance of a restraining order/injunction. Said CBA was, however, eventually signed and ratified despite the BLR’s ruling and order that the management of Bayer should respect the authority of the duly-elected officers of EUBP in the administration of the prevailing CBA.

PRINCE TRANSPORT, INC. and MR. RENATO CLAROS vs. DIOSDADO GARCIA, et al January 12, 2011, G.R. No. 167291, Peralta Petitioner PTI is a company engaged in the business of transporting passengers by land, on the other hand, respondents were hired as drivers, conductors, mechanics and inspectors. In addition to their regular monthly income, respondents also received commissions equivalent to 8 to 10% of their wages; sometime in October 1997, the said commissions were reduced to 7 to 9%; this led respondents and other employees of PTI to hold a series of meetings to discuss the protection of their interests as employees; these meetings led petitioner Claros, president of PTI, to suspect that respondents are about to form a union. In December 1997, PTI employees requested for a cash advance, but the same was denied by management, which resulted in demoralization on the employees' ranks; later, the foregoing circumstances led respondents to form a union for their mutual aid and protection. In order to block the continued formation of the union, PTI caused the transfer of all union members and sympathizers to one of its subcompanies, Lubas Transport (Lubas); despite such transfer, the schedule of drivers and conductors, as well as their company identification cards, were issued by PTI; the daily time records, tickets and reports of the respondents were also filed at the PTI office; and, all claims for salaries were transacted at the same

The second ULP was dismissed by the Labor Arbiter for lack for jurisdiction for the issue involves an intraunion dispute. The NLRC likewise dismissed the motion for a restraining order and/or injunction stating that the subject matter involved an intra-union dispute, over which the Commission has no jurisdiction. On appeal, the CA sustained the two rulings hence, this petition. ISSUE Whether the act of the management of Bayer in dealing and negotiating with Remigio’s splinter group despite its validly existing CBA with EUBP can be considered unfair labor practice. HELD YES. It must be remembered that a CBA is entered into in order to foster stability and mutual cooperation between labor and capital. An employer should not be allowed to rescind unilaterally its CBA with the duly certified bargaining agent it had previously contracted with, and decide to bargain anew with a different group

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office; later, the business of Lubas deteriorated because of the refusal of PTI to maintain and repair the units being used therein, which resulted in the virtual stoppage of its operations and respondents' loss of employment.

WON the suspension of CBA negotiations can be considered as unfair labor practice. RULING No. Unfair labor practice cannot be imputed to MMC since the call of MMC for a suspension of the CBA negotiations cannot be equated to “refusal to bargain.” For a charge of unfair labor practice to prosper, it must be shown that the employer was motivated by ill-will, bad faith or fraud, or was oppressive to labor. The employer must have acted in a manner contrary to morals, good customs, or public policy causing social humiliation, wounded feelings or grave anxiety. While the law makes it an obligation for the employer and the employees to bargain collectively with each other, such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. All it contemplates is that both parties should approach the negotiation with an open mind and make reasonable effort to reach a common ground of agreement.

Petitioners, on the other hand, denied the material allegations of the complaints contending that herein respondents were no longer their employees, since they all transferred to Lubas. ISSUE Whether or not petitioner is guilty of unfair labor practice HELD Yes. The respondents’ transfer of work assignments to Lubas was designed by petitioners as a subterfuge to foil the formers right to organize themselves into a union. Under Article 248 (a) and (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 regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.

CENTRAL AZUCARERA DE BAIS EMPLOYEES UNION-NFL (CABEU-NFL) V. CENTRAL AZUCARERA DE BAIS, INC. (CAB) G.R. No. 186605, November 17, 2010, Mendoza As a result of a bargaining deadlock, the NCMB commenced conciliation/mediation proceedings involving CAB, employer, and CABEU-NFL, the exclusive bargaining agent. In a letter-response to the NCMB, CAB sought suspension of the conciliation/mediation proceedings on the following grounds: 1) CABEU-NFL lost its majority status by reason of the disauthorization and withdrawal of support thereto by more than 90% of the rank and file employees in the bargaining unit; and 2) the workers themselves, acting as principal, after disauthorizing the previous agent CABEU-NFL have organized themselves into a new Union known as Central Azucarera de Bais Employees Labor Association (CABELA) and after obtaining their registration certificate and making due representation that it is a duly organized union representing almost all the rank and file workers of CAB, had concluded a new collective bargaining agreement with CAB.

Indeed, evidence of petitioners' unfair labor practice is shown by the established fact that, after respondents' transfer to Lubas, petitioners left them high and dry insofar as the operations of Lubas was concerned. Petitioners withheld the necessary financial and logistic support such as spare parts, and repair and maintenance of the transferred buses until only two units remained in running condition. This left respondents virtually jobless. MANILA MINING CORP. EMPLOYESS v. MANILA MINING CORP. G.R. Nos. 178222-23, September 20, 2010, Perez Manila Mining Corp. (MMC), a corporation engaged in large-scale mining, constructed several tailings dams to treat and store its waste materials and one of these tailings dams was operating under a permit issued by DENR-EMB. Petitioner Union, submitted letters to MMC relating its intention to bargain collectively and likewise submitted its CBA proposal. However, upon expiration of the tailings permit, DENR-EMB did not issue a permanent permit due to the inability of MMC to secure an Environmental Compliance Certificate. Hence, it was compelled to temporarily shut down its mining operations, resulting in the temporary lay-off of more than 400 employees, including the complainants. MMC called for the suspension of negotiations on the CBA with the Union until resumption of mining operations.

The NCMB did not act on the letter-request. Neither did it conclude the conciliation/mediation proceedings involving CABEU-NFL and CAB. ISSUE Is CAB guilty of acts constituting unfair labor practice (ULP) by refusing to bargain collectively in good faith? HELD No. By imputing bad faith to the actuations of CAB, CABEU-NFL has the burden of proof to present

ISSUE

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substantial evidence to support the allegation of unfair labor practice.The circumstances relied upon as proof of CAB’s bad faith are merely those mentioned in the letter-response, namely, the execution of the supposed CBA between CAB and CABELA and the request to suspend the negotiations. In simply relying on the said letter-response, CABEU-NFL failed to substantiate its claim of unfair labor practice to rebut the presumption of good faith.

beyond the bargaining unit’s coverage. In contracting out FEBTC functions to BOMC, BPI effectively deprived the union of the membership of employees handling said functions as well as curtailed the right of those employees to join the union. Thereafter, the Union demanded that the matter be submitted to the grievance machinery as the resort to the LMC was unsuccessful. As BPI allegedly ignored the demand, the Union filed a notice of strike before the National Conciliation and Mediation Board (NCMB) on the following grounds: a) Contracting out services/functions performed by union members that interfered with, restrained and/or coerced the employees in the exercise of their right to self-organization; b) Violation of duty to bargain; and c) Union busting

Moreover, the filing of the complaint for unfair labor practice was premature inasmuch as the issue of collective bargaining is still pending before the NCMB. CAB cannot be faulted for the NCMB’s inaction. BPI EMPLOYEES UNION-DAVAO V. BPI July 24, 2013, G.R. No. 174912, Mendoza BOMC, which was created pursuant to Central Bank Circular No. 1388, Series of 1993 (CBP Circular No. 1388, 1993), and primarily engaged in providing and/or handling support services for banks and other financial institutions, is a subsidiary of the Bank of Philippine Islands (BPI) operating and functioning as an entirely separate and distinct entity. A service agreement between BPI and BOMC was initially implemented in BPI’s Metro Manila branches. In this agreement, BOMC undertook to provide services such as check clearing, delivery of bank statements, fund transfers, card production, operations accounting and control, and cash servicing Not a single BPI employee was displaced and those performing the functions, which were transferred to BOMC, were given other assignments. On January 1, 1996, the service agreement was likewise implemented in Davao City. Later, a merger between BPI and Far East Bank and Trust Company (FEBTC) took effect on April 10, 2000 with BPI as the surviving corporation. Thereafter, BPI’s cashiering function and FEBTC’s cashiering, distribution and bookkeeping functions were handled by BOMC. Consequently, twelve (12) former FEBTC employees were transferred to BOMC to complete the latter’s service complement.

BPI then filed a petition for assumption of jurisdiction/certification with the Secretary of the Department of Labor and Employment (DOLE), who subsequently issued an order certifying the labor dispute to the NLRC for compulsory arbitration. The DOLE Secretary directed the parties to cease and desist from committing any act that might exacerbate the situation. The NLRC came out with a resolution upholding the validity of the service agreement between BPI and BOMC and dismissing the charge of ULP. It ruled that the engagement by BPI of BOMC to undertake some of its activities was clearly a valid exercise of its management prerogative.11 It further stated that the spinning off by BPI to BOMC of certain services and functions did not interfere with, restrain or coerce employees in the exercise of their right to selforganization. The Union is of the position that the outsourcing of jobs included in the existing bargaining unit to BOMC is a breach of the union-shop agreement in the CBA. In transferring the former employees of FEBTC to BOMC instead of absorbing them in BPI as the surviving corporation in the merger, the number of positions covered by the bargaining unit was decreased, resulting in the reduction of the Union’s membership.

BPI Employees Union-Davao City-FUBU (Union), objected to the transfer of the functions and the twelve (12) personnel to BOMC contending that the functions rightfully belonged to the BPI employees and that the Union was deprived of membership of former FEBTC personnel who, by virtue of the merger, would have formed part of the bargaining unit represented by the Union pursuant to its union shop provision in the CBA. BPI proposed a Labor Management Conference (LMC) between the parties. During the LMC, BPI invoked management prerogative stating that the creation of the BOMC was to preserve more jobs and to designate it as an agency to place employees where they were most needed. On the other hand, the Union charged that BOMC undermined the existence of the union since it reduced or divided the bargaining unit. While BOMC employees perform BPI functions, they were

ISSUE Whether or not the act of BPI to outsource the cashiering, distribution and bookkeeping functions to BOMC is in conformity with the law and the existing CBA RULING No. The rule now is covered by Article 261 of the Labor Code, which took effect on November 1, 1974.25 Article 261 provides: “Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall

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mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement.

Whether Pepsi committed ULP in the form of union busting

Clearly, only gross violations of the economic provisions of the CBA are treated as ULP. Otherwise, they are mere grievances.

HELD NO. Under Article 276(c) of the Labor Code, there is union busting when the existence of the union is threatened by the employer’s act of dismissing the former’s officers who have been duly-elected in accordance with its constitution and by-laws.

In the present case, the alleged violation of the union shop agreement in the CBA, even assuming it was malicious and flagrant, is not a violation of an economic provision in the agreement. The provisions relied upon by the Union were those articles referring to the recognition of the union as the sole and exclusive bargaining representative of all rank-and-file employees, as well as the articles on union security, specifically, the maintenance of membership in good standing as a condition for continued employment and the union shop clause. It failed to take into consideration its recognition of the bank’s exclusive rights and prerogatives, likewise provided in the CBA, which included the hiring of employees, promotion, transfers, and dismissals for just cause and the maintenance of order, discipline and efficiency in its operations. It is incomprehensible how the "reduction of positions in the collective bargaining unit" interferes with the employees’ right to self-organization because the employees themselves were neither transferred nor dismissed from the service. It is to be emphasized that contracting out of services is not illegal per se. It is an exercise of business judgment or management prerogative. Absent proof that the management acted in a malicious or arbitrary manner, the Court will not interfere with the exercise of judgment by an employer.In this case, bad faith cannot be attributed to BPI because its actions were authorized by CBP Circular.

On the other hand, the term unfair labor practice refers to that gamut of offenses defined in the Labor Codewhich, at their core, violates the constitutional right of workers and employees to selforganization, with the sole exception of Article 257(f) (previously Article 248[f]). Unfair labor practice refers to acts that violate the workers' right to organize. The prohibited acts are related to the workers' right to self-organization and to the observance of a CBA. Without that element, the acts, no matter how unfair, are not unfair labor practices. The only exception is Article 257(f). ROYAL PLANT WORKERS UNION V. COCA COLA BOTTLERS G.R. No. 198783, April 15, 2013 PETITIONER Royal Plant Workers Union is the union of bottling operators employed with respondent CocaCola Bottlers Philippines, Inc.-Cebu Plant (CCBPI). In 1974, the bottling operators were provided with chairs upon their request. Sometime in September 2008, the chairs were removed pursuant to a national directive of respondent. This directive is in line with the “I operate, I maintain, I clean” program of petitioner for bottling operators.

PEPSI-COLA PRODUCTS PHILIPPINES, INC. vs. MOLON, et. al G.R. No. 175002, February 18, 2013, Perlas-Bernabe

The CCBPI maintains that the removal of the subject chairs is a valid exercise of management prerogative. Is there merit to this contention?

In 1999, Pepsi adopted a company-wide retrenchment program denominated as Corporate Rightsizing Program. On July 13, 1999, Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to be retrenched.Among these employees were six (6) elected officers and twenty-nine (29) active members of the LEPCEU-ALU, including herein respondents.

RULING Yes. The Supreme Court has held that management is free to regulate, according to its own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place, and manner of work, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers, and discipline, dismissal and recall of workers. The exercise of management prerogative, however, is not absolute as it must be exercised in good faith and with due regard to the rights of labor.

On July 19, 1999, LEPCEU-ALU filed a Notice of Strike before the National Conciliation and Mediation Board (NCMB) due to Pepsi’s alleged acts of union busting/ULP. It claimed that Pepsi’s adoption of the retrenchment program was designed solely to bust their union so that come freedom period, Pepsi’s company union, the Leyte Pepsi-Cola Employees Union-Union de Obreros de Filipinas - would garner the majority vote to retain its exclusive bargaining status.

In the present controversy, it cannot be denied that CCBPI removed the operators’ chairs pursuant to a national directive and in line with its “I Operate, I Maintain, I Clean” program, launched to enable the union to perform their duties and responsibilities more

ISSUE

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efficiently. The chairs were not removed indiscriminately. They were carefully studied with due regard to the welfare of the members of the Union. The removal of the chairs was compensated by a) a reduction of the operating hours of the bottling operators from 2.5-hour rotation period to a 1.5-hour rotation period; and b) an increase of the break period from 15 to 30 minutes between rotations.

CBA. The Company filed a petition for review in the Court of Appeals. ISSUE Whether or not the Company is guilty of violating the CBA in engaging the services of a third party service provider. HELD A careful reading of the above-enumerated categories of employees reveals that the PESO contractual employees do not fall within the enumerated categories of employees stated in the CBA of the parties. Since the Company had admitted that it engaged the services of PESO to perform temporary or occasional services which is akin to those performed by casual employees, the Company should have tapped the services of casual employees instead of engaging PESO.

Apparently, the decision to remove the chairs was done with good intentions, as CCBPI wanted to avoid instances of operators sleeping on the job while in the performance of their duties and responsibilities and because of the fact that the chairs were not necessary, considering that the operators constantly move about while working. In short, the removal of the chairs was designed to increase work efficiency. Hence, CCBPI’s exercise of its management prerogative was made in good faith without doing any harm to the workers’ rights.

While contracting out services is a management prerogative, however, is not without limitation. In contracting out services, the management must be motivated by good faith and the contracting out should not be resorted to circumvent the law or must not have been the result of malicious arbitrary actions. In the case at bench, the CBA of the parties has already provided for the categories of the employees in the Company’s establishment. As stated earlier, the work to be performed by PESO was similar to that of the casual employees. With the provision on casual employees, the hiring of PESO contractual employees, therefore, is not in keeping with the spirit and intent of their CBA. It is familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they are obliged to comply with its provisions. However, this cannot be considered unfair labor practice, because it is not a gross violation of the CBA.

GOYA, INC. v. GOYA, INC. EMPLOYEES UNIONFFW G.R. No. 170054, January 21, 2013 Petitioner Goya, Inc. (Company), a domestic corporation engaged in the manufacture, importation, and wholesale of top quality food products. It hired contractual employees from PESO Resources Development Corporation (PESO) to perform temporary and occasional services in its factory in Parang, Marikina City. This prompted respondent Goya, Inc. Employees Union–FFW (Union) to request for a grievance conference on the ground that the contractual workers do not belong to the categories of employees stipulated in the existing Collective Bargaining Agreement (CBA). The matter was unresolved and referred to National Conciliation and Mediation Board (NCMB) for voluntary arbitration. The Union asserted that the hiring of contractual employees from PESO is not a management prerogative and in gross violation of the CBA tantamount to unfair labor practice (ULP). It noted that the contractual workers engaged have been assigned to work in positions previously handled by regular workers and Union members in effect violating CBA’s provision on Categories of Employees which provide only for Probationary, Regular, and Casual. With the hiring of contractual employees, the Union contended that it would no longer have probationary and casual employees from which it could obtain additional Union members. In countering the Union’s allegations, the Company argued that: (a) the law expressly allows contracting and subcontracting arrangements and that the CBA merely provides for the definition of the categories of employees and does not put a limitation on the Company’s right to engage the services of job contractors or its management prerogative to address temporary/occasional needs in its operation. The Voluntary Arbitrator ruled that the engagement of PESO is not in keeping with the intent and spirit of the

*** Definition under CBA Casual Employee – One hired by the Company to perform occasional or seasonal work directly connected with the regular operations of the Company, or one hired for specific projects of limited duration not connected directly with the regular operations of the Company.

STRIKES AND LOCKOUTS BUKLURAN NG MGA MANGGAGAWA CLOTHMAN KNITTING V. CA G.R. No. 158158, January 17, 2005, Callejo

SA

Petitioner is a legitimate labor union of the private respondent employer. It filed a petition for certification election. It incidentally resulted to respondent becoming sour with its relation to the employees, prompting it to temporarily close a department in the company. As a result, members and officers of

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petitioner union stopped from working and staged a picket outside the employer’s building. LA, NLRC and CA said that there was strike despite the argument of the petitioner that there could not have been a strike considering that most of those who participated in the “picket” belong to the temporarily closed department.

STEEL CORPORATION OF THE PHILIPPINES vs. SCP EMPLOYEES UNION-NATIONAL FEDERATION OF LABOR UNIONS G.R. Nos. 169829-30, April 16, 2008 Petitioner Steel Corporation of the Philippines (SCP) is engaged in manufacturing construction materials, supplying approximately 50% of the domestic needs for roofing materials. On August 17, 1998, SCPFederated Union of the Energy Leaders – General and Allied Services (FUEL-GAS) filed a petition for Certification Election in its bid to represent the rankand-file employees of the petitioner. Respondent SCP Employees Union (SCPEU) – National Federation of Labor Unions (NAFLU) intervened, seeking to participate and be voted for in such elect but the same was denied for having been filed out of time. On October 16, 2000, the Undersecretary rendered a Decision certifying respondent as the exclusive bargaining agent of petitioner's employees. As a consequence of its certification as the exclusive bargaining agent, respondent sent to petitioner CBA proposals. Petitioner, however, held in abeyance any action on the proposals in view of its pending motion for reconsideration. Finding no justification in petitioner's refusal to bargain with it, respondent filed a Notice of Strike with the National Conciliation and Mediation Board (NCMB) on December 11, 2000. The union raised the issue of unfair labor practice (ULP) allegedly committed by petitioner for the latter's refusal to bargain with it. Meanwhile, the NLRC issued a Resolution dated April 17, 2002, declaring petitioner as having no obligation to recognize respondent as the certified bargaining agent; dismissing the charge of unfair labor practice; declaring as illegal the strike held by the union; and declaring the loss of employment of the officers of the union.

ISSUE Whether or not the so called “picket” of the petitioner union constituted an illegal strike. HELD Yes. A strike is any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. The allegation that there can be no work stoppage because the operation in the Dyeing and Finishing Division had been shutdown is of no consequence. It bears stressing that the other divisions were fully operational. There is nothing on record showing that the union members and the supporters who formed a picket line in front of the respondent’s compound were assigned to the finishing department. As can be clearly inferred from the spot reports, employees from the knitting department also joined in picket. The blockade of the delivery of trucks and the attendance of employees from the other departments of the respondent meant work stoppage. The placards that the picketers caused to be displayed arose from matters concerning terms or conditions of employment as well as the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment.

ISSUE Whether or not the strike held by the respondents is illegal

Clearly, the petitioner union, its officers, members and supporters staged a strike. In order for a strike to be valid, the following requirements laid down in paragraphs (c) and (f) of Article 263 of the Labor Code must be complied with: (a) a notice of strike must be filed; (b) a strike-vote must be taken; and (c) the results of the strike-vote must be reported to the DOLE.41 It bears stressing that these requirements are mandatory, meaning, non-compliance therewith makes the strike illegal. The evident intention of the law in requiring the strike notice and strike-vote report is to reasonably regulate the right to strike, which is essential to the attainment of legitimate policy objectives embodied in the law.

RULING YES. The strike is a legitimate weapon in the human struggle for a decent existence. It is considered as the most effective weapon in protecting the rights of the employees to improve the terms and conditions of their employment. But to be valid, a strike must be pursued within legal bounds. The right to strike as a means for the attainment of social justice is never meant to oppress or destroy the employer. The law provides limits for its exercise. In the instant case, the strike undertaken by the officers of respondent union is patently illegal for the following reasons: (1) it is a union-recognition-strike which is not sanctioned by labor laws; (2) it was undertaken after the dispute had been certified for compulsory arbitration; and (3) it was in violation of the Secretary's return-to-work order. Respondent's notices of strike were founded on petitioner's continued refusal to bargain with it. It thus

Considering that the petitioner union failed to comply with the aforesaid requirements, the strike staged on June 11 to 18, 2001 is illegal. Consequently, the officers of the union who participated therein are deemed to have lost their employment status.

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BASCON v. CA, METRO CEBU COMMUNITY HOSPITAL, INC. G.R. No. 144899. February 5, 2004, Quisumbing

staged the strike to compel petitioner to recognize it as the collective bargaining agent, making it a unionrecognition-strike. As its legal designation implies, this kind of strike is calculated to compel the employer to recognize one's union and not other contending groups, as the employees' bargaining representative to work out a collective bargaining agreement despite the striking union's doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative in the bargaining unit BIFLEX PHILS. V. FILFLEX INDUSTRIAL MANUFACTURING CORP. G.R. NO. 155679, Dec. 19, 2006, Carpio Morales

The petitioners in the instant case were employees of private respondent Metro Cebu Community Hospital, Inc. (MCCH) and members of the Nagkahiusang Mamumuosa Metro Cebu Community Hospital (NAMAMCCH), a labor union of MCCH employees. Believing that their union was the certified collective bargaining agent, the members and officers of NAMA-MCCH staged a series of mass actions inside MCCHs premises for alleged failure of MCCH to negotiate and renew the CBA. They marched around the hospital putting up streamers, placards and posters.Subsequently, the Department of Labor and Employment (DOLE) office in Region 7 issued two (2) certifications stating that NAMA-MCCH was not a registered labor organization.Meanwhile, the MCCH management received reports that petitioners participated in NAMA-MCCHs mass actions. Consequently, notices were served on all union members, petitioners included, asking them to explain in writing why they were wearing red and black ribbons and roaming around the hospital with placards. In their collective response dated March 18, 1996, the union members, including petitioners, explained that wearing armbands and putting up placards was their answer to MCCHs illegal refusal to negotiate with NAMA-MCCH.

&

The labor sector staged a welga ng bayan to protest the accelerating prices of oil. Petitioner-unions, led by their officers, herein petitioners,staged a work stoppage which lasted for several days, prompting respondents to file on October 31, 1990 a petition to declare the work stoppage illegal for failure to comply with procedural requirements. ISSUES: (1) Is “welga ng bayan” an illegal strike? (2) Was there an illegal lockout? (3) Are union officers liable for blocking the free ingress to and egress of the company premises? HELD: (1) Yes. Stoppage of work due to welga ng bayan is in the nature of a general strike, an extended sympathy strike. It affects numerous employers including those who do not have a dispute with their employees regarding their terms and conditions of employment.

Petitioner Bascon, at the time of her termination from employment, already held the position of Head Nurse. The other petitioner, Cole, had been working as a nursing aide with MCCH. Both petitioners were dismissed by the respondent hospital for allegedly participating in an illegal strike.Bascon and Cole filed a complaint for illegal dismissal

Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage.

ISSUE Whether or not petitioners were validly terminated for (1) allegedly participating in an illegal strike and/or (2) gross insubordination to the order to stop wearing armbands and putting up placards.

(2) No. If there was illegal lockout, why, indeed, did not petitioners file a protest with the management or a complaint therefor against respondents? As the Labor Arbiter observed, [t]he inaction of [petitioners] betrays the weakness of their contention for normally a lockedout union will immediately bring management before the bar of justice.

HELD (1) NO. In this case, it was found that petitioners actual participation in the illegal strike was limited to wearing armbands and putting up placards. There was no finding that the armbands or the placards contained offensive words or symbols. Thus, neither such wearing of armbands nor said putting up of placards can be construed as an illegal act. In fact, per se, they are within the mantle of constitutional protection under freedom of speech.

(3) Yes. They violated Article 264(e) of the Labor Code which provides that [n]o person engaged in picketing shall obstruct the free ingress to or egress from the employers premises for lawful purposes, or obstruct public thoroughfares. Petitioners, being union officers, should thus bear the consequences of their acts of knowingly participating in an illegal strike, conformably with the third paragraph of Article 264 (a) of the Labor Code

In Article 264 (a) of the Labor Code it could be gleaned that while a union officer can be terminated for mere participation in an illegal strike, an ordinary striking employee, like petitioners herein, must have participated in the commission of illegal acts during the strike. There must be proof that they committed illegal

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acts during the strike. Substantial evidence, which may justify the imposition of the penalty of dismissal, may suffice.

vehicle manufacturers in the country employing around 1,400 workers for its plants in Bicutan and Sta. Rosa, Laguna.

Evidence on record shows that various illegal acts were committed by unidentified union members in the course of the protracted mass action. And we commiserate with MCCH, patients, and third parties for the damage they suffered. But we cannot hold petitioners responsible for acts they did not commit. The law, obviously solicitous of the welfare of the common worker, requires, before termination may be considered, that an ordinary union member must have knowingly participated in the commission of illegal acts during a strike.

On February 14, 1999, the Union filed a petition for certification election among the Toyota rank and file employees with the National Conciliation and Mediation Board (NCMB), but this was denied by MedArbiter Ma. Zosima C. Lameyra denied the petition. This order was reversed on appeal to the DOLE Secretary.

(2) As regards the appellate courts finding that petitioners were justly terminated for gross insubordination or willful disobedience, Article 282 of the Labor Code provides in part:

In the meantime, the Union submitted its Collective Bargaining Agreement (CBA) proposals to Toyota, but the latter refused to negotiate in view of its pending appeal. Consequently, the Union filed a notice of strike on January 16, 2001 with the NCMB based on Toyota’s refusal to bargain. On February 5, 2001, the NCMB-NCR converted the notice of strike into a preventive mediation case on the ground that the issue of whether or not the Union is the exclusive bargaining agent of all Toyota rank and file employees was still unresolved by the DOLE Secretary.

On the other hand, Toyota filed for reconsideration but it was denied. Toyota challenged said Order via an appeal to the DOLE Secretary.

An employer may terminate an employment for any of the following causes: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. However, willful disobedience of the employers lawful orders, as a just cause for dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employee's assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge.

In connection with Toyota’s appeal, Toyota and the Union were required to attend a hearing on February 21, 2001 before the Bureau of Labor Relations (BLR). The hearing was cancelled and reset to February 22, 2001. On February 21, 2001, 135 Union officers and members failed to render the required overtime work, and instead marched to and staged a picket in front of the BLR office in Intramuros, Manila. Mass actions on February 22 and 23, 2001 in front of the BLR and the DOLE offices pushed through. Toyota experienced acute lack of manpower in its manufacturing and production lines, and was unable to meet its production goals resulting in huge losses of PhP 53,849,991.

In this case, we find lacking the element of willfulness characterized by a perverse mental attitude on the part of petitioners in disobeying their employers order as to warrant the ultimate penalty of dismissal. Wearing armbands and putting up placards to express ones views without violating the rights of third parties, are legal per se and even constitutionally protected. Thus, MCCH could have done well to respect petitioners right to freedom of speech instead of threatening them with disciplinary action and eventually terminating them.

Soon thereafter, on February 27, 2001, Toyota sent individual letters to some 360 employees requiring them to explain within 24 hours why they should not be dismissed for their obstinate defiance of the company’s directive to render overtime work on February 21, 2001, for their failure to report for work on February 22 and 23, 2001, and for their participation in the concerted actions which severely disrupted and paralyzed the plant’s operations.Meanwhile, a February 27, 2001 Manifesto was circulated by the Union which urged its members to participate in a strike/picket and to abandon their posts.

TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA) v. NLRC G.R. Nos. 158786 & 158789, October 19, 2007, Velasco The Union is a legitimate labor organization duly registered with the Department of Labor and Employment (DOLE) and is the sole and exclusive bargaining agent of all Toyota rank and file employees.Toyota, on the other hand, is a domestic corporation engaged in the assembly and sale of vehicles and parts, and one of the largest motor

On the next day, the Union filed with the NCMB another notice of strike for union busting amounting to unfair labor practice.

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On March 1, 2001, the Union nonetheless submitted an explanation in compliance with the February 27, 2001 notices sent by Toyota to the erring employees. The Union members explained that their refusal to work on their scheduled work time for two consecutive days was simply an exercise of their constitutional right to peaceably assemble and to petition the government for redress of grievances. It further argued that the demonstrations staged by the employees on February 22 and 23, 2001 could not be classified as an illegal strike or picket, and that Toyota had already condoned the alleged acts when it accepted back the subject employees.

Meanwhile, on May 23, 2001, at around 12:00 nn., despite the issuance of the DOLE Secretary’s certification Order, several payroll-reinstated members of the Union staged a protest rally in front of Toyota’s Bicutan Plant. Then, on May 28, 2001, around fortyfour (44) Union members staged another protest action in front of the Bicutan Plant. At the same time, some twenty-nine (29) payroll-reinstated employees picketed in front of the Santa Rosa Plant’s main entrance, and were later joined by other Union members. On June 5, 2001, notwithstanding the certification Order, the Union filed another notice of strike, which was docketed as NCMB-NCR-NS-06-150-01.

On March 16, 2001, Toyota terminated the employment of 227 employees for participation in concerted actions in violation of its Code of Conduct and for misconduct under Article 282 of the Labor Code.

In the meantime, the NLRC ordered both parties to submit their respective position papers on June 8, 2001. The union, however, requested for abeyance of the proceedings pending the petition for certiorari with the CA. On June 19, 2001, the NLRC issued an Order, reiterating its previous order for both parties to submit their respective position papers on or before June 2, 2001. On June 27, 2001, the Union filed a Motion for Reconsideration of the NLRC’s June 19, 2001 Order, praying for the deferment of the submission of position papers until its petition for certiorari is resolved by the CA.

In reaction to the dismissal of its union members and officers, the Union went on strike on March 17, 2001. Subsequently, from March 28, 2001 to April 12, 2001, the Union intensified its strike by barricading the gates of Toyota’s Bicutan and Sta. Rosa plants. The strikers prevented workers who reported for work from entering the plants. On March 29, 2001, Toyota filed a petition for injunction with a prayer for the issuance of a temporary restraining order (TRO) with the NLRC to seek free ingress to and egress from its Bicutan and Sta. Rosa manufacturing plants, this was granted by the NLRC.Meanwhile, Toyota filed a petition to declare the strike illegal with the NLRC arbitration branch, which was docketed as NLRC NCR (South) Case No. 30-0401775-01, and prayed that the erring Union officers, directors, and members be dismissed.

On June 29, 2001, only Toyota submitted its position paper. On July 11, 2001, the NLRC again ordered the Union to submit its position paper by July 19, 2001, with a warning that upon failure for it to do so, the case shall be considered submitted for decision. Meanwhile, on July 17, 2001, the CA dismissed the Union’s petition for certiorari. During the August 3, 2001 hearing, the Union, despite several accommodations, still failed to submit its position paper. Later that day, the Union claimed it filed its position paper by registered mail.

On April 10, 2001, the DOLE Secretary assumed jurisdiction over the labor dispute and issued an Ordercertifying the labor dispute to the NLRC. In said Order, the DOLE Secretary directed all striking workers to return to work at their regular shifts by April 16, 2001 and ordered Toyota to accept the returning employees under the same terms and conditions obtaining prior to the strike or at its option, put them under payroll reinstatement. The Union ended the strike on April 12, 2001. The union members and officers tried to return to work on April 16, 2001 but were told that Toyota opted for payroll-reinstatement authorized by the Order of the DOLE Secretary.

Subsequently, the NLRC, in its August 9, 2001 Decision, declared the strikes staged by the Union on February 21 to 23, 2001 and May 23 and 28, 2001 as illegal. Accordingly, both Toyota and the Union filed Motions for Reconsideration, which the NLRC denied in its September 14, 2001 Resolution. The CA then consolidated the petitions. In justifying the recall of the severance compensation, the CA considered the participation in illegal strikes as serious misconduct. However, in its June 20, 2003 Resolution, the CA modified its February 27, 2003 Decision by reinstating severance compensation to the dismissed employees based on social justice.

In the meantime, the Union filed a motion for reconsideration of the DOLE Secretary’s April 10, 2001 certification Order, which, however, was denied by the DOLE Secretary in her May 25, 2001 Resolution. Consequently, a petition for certiorari was filed before the CA, which was docketed as CA-G.R. SP No. 64998.

ISSUES (1) Whether the mass actions committed by the Union on different occasions are illegal strikes; and (2) Whether separation pay should be awarded to the Union members who participated in the illegal strikes.

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RULING The Union contends that the NLRC violated its right to due process when it disregarded its position paper in deciding Toyota’s petition to declare the strike illegal. It is entirely the Union’s fault that its position paper was not considered by the NLRC. Records readily reveal that the NLRC was even too generous in affording due process to the Union. It issued no less than three (3) orders for the parties to submit its position papers, which the Union ignored until the last minute. No sufficient justification was offered why the Union belatedly filed its position paper.

It is obvious that the February 21 to 23, 2001 concerted actions were undertaken without satisfying the prerequisites for a valid strike under Art. 263 of the Labor Code. These requirements are mandatory and the failure of a union to comply with them renders the strike illegal. Moreover, the aforementioned February 2001 strikes are in blatant violation of Sec. D, par. 6 of Toyota’s Code of Conduct which prohibits "inciting or participating in riots, disorders, alleged strikes or concerted actions detrimental to [Toyota’s] interest." The penalty for the offense is dismissal. The Union and its members are bound by the company rules, and the February 2001 mass actions and deliberate refusal to render regular and overtime work on said days violated these rules. In sum, the February 2001 strikes and walk-outs were illegal as these were in violation of specific requirements of the Labor Code and a company rule against illegal strikes or concerted actions.

Petitioner Union contends that the protests or rallies conducted on February 21 and 23, 2001 are not within the ambit of strikes as defined in the Labor Code, since they were legitimate exercises of their right to peaceably assemble and petition the government for redress of grievances. The Union’s position fails to convince us. While the facts in Philippine Blooming Mills Employees Organization are similar in some respects to that of the present case, the Union fails to realize one major difference: there was no labor dispute in Philippine Blooming Mills Employees Organization. In the present case, there was an on-going labor dispute arising from Toyota’s refusal to recognize and negotiate with the Union, which was the subject of the notice of strike filed by the Union on January 16, 2001.

With respect to the strikes committed from March 17 to April 12, 2001, those were initially legal as the legal requirements were met. However, on March 28 to April 12, 2001, the Union barricaded the gates of the Bicutan and Sta. Rosa plants and blocked the free ingress to and egress from the company premises. Toyota employees, customers, and other people having business with the company were intimidated and were refused entry to the plants. As earlier explained, these strikes were illegal because unlawful means were employed.

A strike means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. A labor dispute, in turn, includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of the employer and the employee.35

Petitioner Union also posits that strikes were not committed on May 23 and 28, 2001. The Union asserts that the rallies held on May 23 and 28, 2001 could not be considered strikes, as the participants were the dismissed employees who were on payroll reinstatement. It concludes that there was no work stoppage. This contention has no basis.

The protest actions undertaken by the Union officials and members on February 21 to 23, 2001 are not valid and proper exercises of their right to assemble and ask government for redress of their complaints, but are illegal strikes in breach of the Labor Code. The Union’s position is weakened by the lack of permit from the City of Manila to hold "rallies." Shrouded as demonstrations, they were in reality temporary stoppages of work perpetrated through the concerted action of the employees who deliberately failed to report for work on the convenient excuse that they will hold a rally at the BLR and DOLE offices in Intramuros, Manila, on February 21 to 23, 2001. The purported reason for these protest actions was to safeguard their rights against any abuse which the med-arbiter may commit against their cause. However, the Union failed to advance convincing proof that the med-arbiter was biased against them.

It is clear that once the DOLE Secretary assumes jurisdiction over the labor dispute and certifies the case for compulsory arbitration with the NLRC, the parties have to revert to the status quo ante (the state of things as it was before). As provided under Article 2634(g) of the Labor Code, all striking workers are directed to return to work at their regular shifts by April 16, 2001; the Company is in turn directed to accept them back to work under the same terms and conditions obtaining prior to the work stoppage, subject to the option of the company to merely reinstate a worker or workers in the payroll in light of the negative emotions that the strike has generated and the need to prevent the further deterioration of the relationship between the company and its workers. While it may be conceded that there was no work disruption in the two Toyota plants, the fact still

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remains that the Union and its members picketed and performed concerted actions in front of the Company premises. This is a patent violation of the assumption of jurisdiction and certification Order of the DOLE Secretary, which ordered the parties "to cease and desist from committing any act that might lead to the worsening of an already deteriorated situation." While there are no work stoppages, the pickets and concerted actions outside the plants have a demoralizing and even chilling effect on the workers inside the plants and can be considered as veiled threats of possible trouble to the workers when they go out of the company premises after work and of impending disruption of operations to company officials and even to customers in the days to come.

(1) The rallies held at the DOLE and BLR offices on February 21, 22, and 23, 2001; (2) The strikes held on March 17 to April 12, 2001; and (3) The rallies and picketing on May 23 and 28, 2001 in front of the Toyota Bicutan and Sta. Rosa plants. Did they commit illegal acts during the illegal strikes on February 21 to 23, 2001, from March 17 to April 12, 2001, and on May 23 and 28, 2001? The answer is in the affirmative. As we have ruled that the strikes by the Union on the three different occasions were illegal, we now proceed to determine the individual liabilities of the affected union members for acts committed during these forbidden concerted actions.

From the foregoing discussion, we rule that the February 21 to 23, 2001 concerted actions, the March 17 to April 12, 2001 strikes, and the May 23 and 28, 2001 mass actions were illegal strikes.

After a scrutiny of the records, we find that the 227 employees indeed joined the February 21, 22, and 23, 2001 rallies and refused to render overtime work or report for work. These rallies, as we earlier ruled, are in reality illegal strikes, as the procedural requirements for strikes under Art. 263 were not complied with. Worse, said strikes were in violation of the company rule prohibiting acts "in citing or participating in riots, disorders, alleged strikes or concerted action detrimental to Toyota’s interest." Anent the March 28 to April 12, 2001 strikes, evidence is ample to show commission of illegal acts like acts of coercion or intimidation and obstructing free ingress to or egress from the company premises. Mr. Eduardo Nicolas III, Toyota’s Security Chief, attested in his affidavit that the strikers "badmouthed people coming in and shouted invectives such as bakeru at Japanese officers of the company." The strikers even pounded the vehicles of Toyota officials. More importantly, they prevented the ingress of Toyota employees, customers, suppliers, and other persons who wanted to transact business with the company. These were patent violations of Art. 264(e) of the Labor Code, and may even constitute crimes under the Revised Penal Code such as threats or coercion among others.

Union officers are liable for unlawful strikes or illegal acts during a strike. It is clear that the responsibility of union officials is greater than that of the members. The Union officials were in clear breach of Art. 264(a) when they knowingly participated in the illegal strikes held from February 21 to 23, 2001, from March 17 to April 12, 2001, and on May 23 and 28, 2001. Member’s liability depends on participation in illegal acts. Art. 264(a) of the Labor Code provides that a member is liable when he knowingly participates in an illegal act "during a strike." While the provision is silent on whether the strike is legal or illegal, we find that the same is irrelevant. As long as the members commit illegal acts, in a legal or illegal strike, then they can be terminated. However, when union members merely participate in an illegal strike without committing any illegal act, are they liable? This was squarely answered in Gold City Integrated Port Service, Inc. v. NLRC, where it was held that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. This was an affirmation of the rulings in Bacus v. Ople and Progressive Workers Union v. Aguas, where it was held that though the strike is illegal, the ordinary member who merely participates in the strike should not be meted loss of employment on the considerations of compassion and good faith and in view of the security of tenure provisions under the Constitution. In Esso Philippines, Inc. v. MalayangManggagawasa Esso (MME), it was explained that a member is not responsible for the union’s illegal strike even if he voted for the holding of a strike which became illegal. Thus, the rule on vicarious liability of a union member was abandoned and it is only when a striking worker "knowingly participates in the commission of illegal acts during a strike" that he will be penalized with dismissal.

Lastly, the strikers, though on payroll reinstatement, staged protest rallies on May 23, 2001 and May 28, 2001 in front of the Bicutan and Sta. Rosa plants. These workers’ acts in joining and participating in the May 23 and 28, 2001 rallies or pickets were patent violations of the April 10, 2001 assumption of jurisdiction/certification Order issued by the DOLE Secretary, which proscribed the commission of acts that might lead to the "worsening of an already deteriorated situation." Art. 263(g) is clear that strikers who violate the assumption/certification Order may suffer dismissal from work. This was the situation in the May 23 and 28, 2001 pickets and concerted actions, with the following employees who committed illegal acts:

In the cases at bench, the individual respondents participated in several mass actions, viz:

Anent the grant of severance compensation to legally dismissed union members, Toyota assails the turn-

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around by the CA in granting separation pay in its June 20, 2003 Resolution after initially denying it in its February 27, 2003 Decision. The general rule is that when just causes for terminating the services of an employee under Art. 282 of the Labor Code exist, the employee is not entitled to separation pay. The apparent reason behind the forfeiture of the right to termination pay is that lawbreakers should not benefit from their illegal acts. The dismissed employee, however, is entitled to "whatever rights, benefits and privileges [s/he] may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice"65 or under the Labor Code and other existing laws. With respect to benefits granted by the CBA provisions and voluntary management policy or practice, the entitlement of the dismissed employees to the benefits depends on the stipulations of the CBA or the company rules and policies.

reconsideration of its February 27, 2003 Decision, the CA however performed a volte-face by reinstating the award of separation pay. The CA’s grant of separation pay is an erroneous departure from our ruling in Phil. Long Distance Telephone Co. v. NLRC that serious misconduct forecloses the award of separation pay. NUWHRAIN – Dusit Hotel Nikko Chapter v. CA G.R. No. 163942, November 11, 2008, Velasco Quick Facts: This case is with regard to the shaving of heads issue of Hotel Employees. Whether such act, among others, under certain circumstances amount to an illegal strike. The SC said, yes it is. FACTS The Union is the certified bargaining agent of the regular rank-and-file employees of Dusit Hotel Nikko (Hotel), a five star service establishment owned and operated by Philippine Hoteliers, Inc. located in Makati City.

As in any rule, there are exceptions. One exception where separation pay is given even though an employee is validly dismissed is when the court finds justification in applying the principle of social justice well entrenched in the 1987 Constitution.

On October 24, 2000, the Union submitted its CBA negotiation proposals to the Hotel. As negotiations ensued, the parties failed to arrive at mutually acceptable terms and conditions. Due to the bargaining deadlock, the Union, on December 20, 2001, filed a Notice of Strike on the ground of the bargaining deadlock with the NCMB. Thereafter, conciliation hearings were conducted which proved unsuccessful.

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.

Consequently, a Strike Vote was conducted by the Union on January 14, 2002 on which it was decided that the Union would wage a strike. Soon thereafter, in the afternoon of January 17, 2002, the Union held a general assembly at its office located in the Hotel's basement, where some members sported closely cropped hair or cleanly shaven heads. The next day, or on January 18, 2002, more male Union members came to work sporting the same hair style. The Hotel prevented these workers from entering the premises claiming that they violated the Hotel's Grooming Standards.

A recall of recent cases decided bearing on the issue reveals that when the termination is legally justified on any of the grounds under Art. 282, separation pay was not allowed. In all of the foregoing situations, the Court declined to grant termination pay because the causes for dismissal recognized under Art. 282 of the Labor Code were serious or grave in nature and attended by willful or wrongful intent or they reflected adversely on the moral character of the employees. We therefore find that in addition to serious misconduct, in dismissals based on other grounds under Art. 282 like willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a crime against the employer or his family, separation pay should not be conceded to the dismissed employee.

In view of the Hotel's action, the Union staged a picket outside the Hotel premises. Later, other workers were also prevented from entering the Hotel causing them to join the picket. For this reason the Hotel experienced a severe lack of manpower which forced them to temporarily cease operations in three restaurants. Subsequently, on January 20, 2002, the Hotel issued notices to Union members, preventively suspending them and charging them with the following offenses: (1) violation of the duty to bargain in good faith; (2) illegal picket; (3) unfair labor practice; (4) violation of the Hotel's Grooming Standards; (5) illegal strike; and (6) commission of illegal acts during the illegal strike.

In the case at bench, are the 227 striking employees entitled to separation pay? In the instant case, the CA concluded that the illegal strikes committed by the Union members constituted serious misconduct.In disposing of the Union’s plea for

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The next day, the Union filed with the NCMB a second Notice of Strike on the ground of unfair labor practice and violation of Article 248(a) of the Labor Code on illegal lockout, which was docketed as NCMB-NCRNS-01-019-02. In the meantime, the Union officers and members submitted their explanations to the charges alleged by the Hotel, while they continued to stage a picket just inside the Hotel's compound.

with the CA.

On January 26, 2002, the Hotel terminated the services of 29 Union officers and 61 members; and suspended 136 employees from 5-30 days. On the same day, the Union declared a strike. Starting that day, the Union engaged in picketing the premises of the Hotel. During the picket, the Union officials and members unlawfully blocked the ingress and egress of the Hotel premises.

ISSUES 1. May the Secretary order payroll reinstatement rather than actual reinstatement? - YES 2. Did the union stage an illegal strike? – YES - May Hotel Nikko legally prevent employees from reporting for work for alleged violation of the hotel's grooming standards? – YES - Was there an illegal lock-out committed by Hotel Nikko? - NO

CA upheld NLRC’s Ruling. The CA ratiocinated that the Union failed to demonstrate that the NLRC committed grave abuse of discretion and capriciously exercised its judgment or exercised its power in an arbitrary and despotic manner. Union’s MR was again denied.

Consequently, on January 31, 2002, the Union filed its third Notice of Strike with the NCMB which, this time on the ground of unfair labor practice and unionbusting.

RULING: 1. YES. Article 263(g) of the Labor Code states that all workers must immediately return to work and all employers must readmit all of them under the same terms and conditions prevailing before the strike or lockout. The phrase "under the same terms and conditions" makes it clear that the norm is actual reinstatement. This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to the national interest.

On the same day, the Secretary, through her January 31, 2002 Order, assumed jurisdiction over the labor dispute and certified the case to the NLRC for compulsory arbitration. The Hotel was ordered either to have actual or payroll reinstatement of dismissed employees. After due proceedings, the NLRC issued its October 9, 2002 Decision in which it ordered the Hotel and the Union to execute a CBA within 30 days from the receipt of the decision. The NLRC also held that the January 18, 2002 concerted action was an illegal strike in which illegal acts were committed by the Union; and that the strike violated the "No Strike, No Lockout" provision of the CBA, which thereby caused the dismissal of 29 Union officers and 61 Union members.

Thus, it was settled that in assumption of jurisdiction cases, the Secretary should impose actual reinstatement in accordance with the intent and spirit of Art. 263(g) of the Labor Code. However, this one is subject to exceptions. In Manila Diamond Hotel Employees' Union v. Court of Appeals that payroll reinstatement is a departure from the rule, and special circumstances which make actual reinstatement impracticable must be shown. In one case, payroll reinstatement was allowed where the employees previously occupied confidential positions, because their actual reinstatement, the Court said, would be impracticable and would only serve to exacerbate the situation.

The NLRC ordered the Hotel to grant the 61 dismissed Union members financial assistance in the amount of ½ month's pay for every year of service or their retirement benefits under their retirement plan whichever was higher. The NLRC explained that the strike which occurred on January 18, 2002 was illegal because it failed to comply with the mandatory 30-day cooling-off period and the seven-day strike ban, as the strike occurred only 29 days after the submission of the notice of strike on December 20, 2001 and only four days after the submission of the strike vote on January 14, 2002. The NLRC also ruled that even if the Union had complied with the temporal requirements mandated by law, the strike would nonetheless be declared illegal because it was attended by illegal acts committed by the Union officers and members.

The peculiar circumstances in the present case validate the Secretary's decision to order payroll reinstatement instead of actual reinstatement. It is obviously impracticable for the Hotel to actually reinstate the employees who shaved their heads or cropped their hair because this was exactly the reason they were prevented from working in the first place. Further, as with most labor disputes which have resulted in strikes, there is mutual antagonism, enmity, and animosity between the union and the management. Payroll reinstatement, most especially in this case, would have been the only avenue where further incidents and damages could be avoided. Public

The Union MR of the NLRC's Decision was denied. The Union filed a Petition for Certiorari under Rule 65

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officials entrusted with specific jurisdictions enjoy great confidence from this Court. The Secretary surely meant only to ensure industrial peace as she assumed jurisdiction over the labor dispute. In this case, we are not ready to substitute our own findings in the absence of a clear showing of grave abuse of discretion on her part.

coming to work on January 18, 2002, some Union members even had their heads shaved or their hair cropped at the Union office in the Hotel's basement. Clearly, the decision to violate the company rule on grooming was designed and calculated to place the Hotel management on its heels and to force it to agree to the Union's proposals.

2. Art. 212(o) of the Labor Code defines a strike as "any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute."

In view of the Union's collaborative effort to violate the Hotel's Grooming Standards, it succeeded in forcing the Hotel to choose between allowing its inappropriately hair styled employees to continue working, to the detriment of its reputation, or to refuse them work, even if it had to cease operations in affected departments or service units, which in either way would disrupt the operations of the Hotel. This Court is of the opinion, therefore, that the act of the Union was not merely an expression of their grievance or displeasure but, indeed, a calibrated and calculated act designed to inflict serious damage to the Hotel's finances or its reputation. Thus, we hold that the Union's concerted violation of the Hotel's Grooming Standards which resulted in the temporary cessation and disruption of the Hotel's operations is an unprotected act and should be considered as an illegal strike. Second, the Union's concerted action which disrupted the Hotel's operations clearly violated the CBA's "No Strike, No Lockout" Clause.

Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz.: 1. when it is contrary to a specific prohibition of law, such as strike by employees performing governmental functions; or 2. when it violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a valid strike]; or 3. when it is declared for an unlawful purpose, such as inducing the employer to commit an unfair labor practice against non-union employees; or 4. when it employs unlawful means in the pursuit of its objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the Labor Code]; or 5. when it is declared in violation of an existing injunction[, such as injunction, prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or 6. when it is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause.

The facts are clear that the strike arose out of a bargaining deadlock in the CBA negotiations with the Hotel. The concerted action is an economic strike upon which the afore-quoted "no strike/work stoppage and lockout" prohibition is squarely applicable and legally binding.

The Union staged an illegal strike. First, the Union's violation of the Hotel's Grooming Standards was clearly a deliberate and concerted action to undermine the authority of and to embarrass the Hotel and was, therefore, not a protected action. The appearances of the Hotel employees directly reflect the character and wellbeing of the Hotel, being a five-star hotel that provides service to top-notch clients. Being bald or having cropped hair per se does not evoke negative or unpleasant feelings. The reality that a substantial number of employees assigned to the food and beverage outlets of the Hotel with full heads of hair suddenly decided to come to work bald-headed or with cropped hair, however, suggests that something is amiss and insinuates a sense that something out of the ordinary is afoot. Obviously, the Hotel does not need to advertise its labor problems with its clients. It can be gleaned from the records before us that the Union officers and members deliberately and in apparent concert shaved their heads or cropped their hair. This was shown by the fact that after

Third, the Union officers and members' concerted action to shave their heads and crop their hair not only violated the Hotel's Grooming Standards but also violated the Union's duty and responsibility to bargain in good faith. By shaving their heads and cropping their hair, the Union officers and members violated then Section 6, Rule XIII of the Implementing Rules of Book V of the Labor Code. This rule prohibits the commission of any act which will disrupt or impede the early settlement of the labor disputes that are under conciliation. Since the bargaining deadlock is being conciliated by the NCMB, the Union's action to have their officers and members' heads shaved was manifestly calculated to antagonize and embarrass the Hotel management and in doing so effectively disrupted the operations of the Hotel and violated their duty to bargain collectively in good faith. Fourth, the Union failed to observe the mandatory 30-day cooling-off period and the seven-day strike

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ban before it conducted the strike on January 18, 2002. The NLRC correctly held that the Union failed to observe the mandatory periods before conducting or holding a strike. Records reveal that the Union filed its Notice of Strike on the ground of bargaining deadlock on December 20, 2001. The 30-day cooling-off period should have been until January 19, 2002. On top of that, the strike vote was held on January 14, 2002 and was submitted to the NCMB only on January 18, 2002; therefore, the 7-day strike ban should have prevented them from holding a strike until January 25, 2002. The concerted action committed by the Union on January 18, 2002 which resulted in the disruption of the Hotel's operations clearly violated the above-stated mandatory periods.

and until the NCMB is notified at least 24 hours of the unions decision to conduct a strike vote, and the date, place, and time thereof, the NCMB cannot determine for itself whether to supervise a strike vote meeting or not and insure its peaceful and regular conduct. The failure of a union to comply with the requirement of the giving of notice to the NCMB at least 24 hours prior to the holding of a strike vote meeting will render the subsequent strike staged by the union illegal.”

CAPITOL MEDICAL CENTER, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, et al. G.R. No. 147080. April 26, 2005, Callejo

On July 6 and 7, 1999, the two unions filed separate notices of strike with the NCMB-RB VII against the respondent on the ground of ULP. Then Secretary of Labor Bienvenido E. Laguesma intervened and issued the Order dated July 20, 1999 certifying the labor dispute to the NLRC for compulsory arbitration and enjoining any strike or lock-out.

TRANS-ASIA SHIPPING LINES, INC. UNLICENSED CREWS EMPLOYEES UNION ASSOCIATED LABOR UNIONS (TASLI-ALU) et. al. vs. COURT OF APPEALS and TRANS-ASIA SHIPPING LINES, INC. G.R. No. 145428, July 7, 2004, Callejo

Respondent Capitol Medical Center Employees Association-Alliance of Filipino Workers (Union) demanded to be certified as the exclusive bargaining agent of Petitioner Company’s rank-and-file employees. The Union had to contend with another union the Capitol Medical Center Alliance of Concerned Employees (CMC-ACE). Med-Arbiter granted the petition, but the Secretary of DOLE reversed the same. Because of the Union’s questioned majority status, Petitioner refused to negotiate a CBA. This resulted in a union-led strike by the Union.

Despite the aforesaid order, the petitioners went on strike on July 23, paralyzing the respondents operations. The SOLE was thus constrained to issue the Order dated July 23, 1999 directing all striking workers to return to work within twelve (12) hours from receipt of this Order and for the Company to accept them back under the same terms and conditions prevailing before the strike.

ISSUE Is the strike illegal?

On even date, twenty-one (21) of the striking workers, including the individual petitioners, were dismissed from employment by the respondent for alleged violation of the cease-and-desist directive contained in the Order of July 20, 1999 by waging an illegal strike.

HELD YES. Respondent Union failed to comply with the mandatory twenty-four (24) hour notice to the NCMB for the conduct of a strike vote.

The bone of contention between the parties hinged on the proper interpretation of the phrase for the company to accept them back under the same terms and conditions prevailing before the strike. The terminated workers asserted that said phrase must be construed to mean that they be reinstated to their former assignments. The respondent posited that it refers only to their salary grades, rank and seniority, but cannot encompass the usurpation of managements prerogative to determine where its employees are to be assigned nor to determine their job assignments.

“Unless the NCMB is notified of the date, place and time of the meeting of the union members for the conduct of a strike vote, the NCMB would be unable to supervise the holding of the same, if and when it decides to exercise its power of supervision.” “The requirement of giving notice of the conduct of a strike vote to the NCMB at least 24 hours before the meeting for the said purpose is designed to (a) inform the NCMB of the intent of the union to conduct a strike vote; (b) give the NCMB ample time to decide on whether or not there is a need to supervise the conduct of the strike vote to prevent any acts of violence and/or irregularities attendant thereto; and (c) should the NCMB decide on its own initiative or upon the request of an interested party including the employer, to supervise the strike vote, to give it ample time to prepare for the deployment of the requisite personnel, including peace officers if need be. Unless

ISSUE Whether or not the striking employees may be reinstated in their former assignments by virtue of the phrase "for the company to accept them back under the same terms and conditions prevailing before the strike" in the Order issued by the SOLE? HELD

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Yes. The respondent cannot rightfully exercise its managements prerogative to determine where its employees are to be assigned or to determine their job assignments in view of the explicit directive contained in the Orders of the SOLE to accept the striking workers back under the same terms and conditions prevailing prior to the strike. The order simply means that the employees should be returned to their ship assignments as before they staged their strike. To reiterate, Article 263 (g) of the Labor Code constitutes an exception to the management prerogative of hiring, firing, transfer, demotion and promotion of employees. And to the extent that Article 263 (g) calls for the admission of all workers under the same terms and conditions prevailing before the strike, the respondent is restricted from exercising its generally unbounded right to transfer or reassign its employees. The respondent is mandated, under the said order, to issue embarkation orders to the employees to enable them to report to their ship assignments in compliance with the Order of the Secretary of Labor.

Yes. The Secretary properly took cognizance of the issue on the legality of the strike. As the Court of Appeals correctly pointed out, since the very reason of the Secretarys assumption of jurisdiction was PEUs declaration of the strike, any issue regarding the strike is not merely incidental to, but is essentially involved in, the labor dispute itself.The powers granted to the Secretary under Article 263(g) of the Labor Code have been characterized as an exercise of the police power of the State, with the aim of promoting public good.When the Secretary exercises these powers, he is granted great breadth of discretion in order to find a solution to a labor dispute. The most obvious of these powers is the automatic enjoining of an impending strike or lockout or its lifting if one has already taken place.In this case, the Secretary assumed jurisdiction over the dispute because it falls in an industry indispensable to the national interest. It is of no moment that PEU never acquiesced to the submission for resolution of the issue on the legality of the strike. PEU cannot prevent resolution of the legality of the strike by merely refusing to submit the issue for resolution. It is also immaterial that this issue, as PEU asserts, was not properly submitted for resolution of the Secretary. The authority of the Secretary to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to national interest includes and extends to all questions and controversies arising from such labor dispute. The power is plenary and discretionary in nature to enable him to effectively and efficiently dispose of the dispute.

PHILCOM EMPLOYEES UNION V. PHIL. GLOBAL COMMUNICATIONS G.R. No. 144315, July 17, 2006, Carpio Upon the expiration of the Collective Bargaining Agreement (CBA) between petitioner Philcom Employees Union (PEU or union, for brevity) and private respondent Philippine Global Communications, Inc. (Philcom, Inc.), the parties started negotiations for the renewal of their CBA. While negotiations were ongoing, PEU filedwith the National Conciliation and Mediation Board (NCMB) National Capital Region, a Notice of Strikedue to perceived unfair labor practice committed by the company, and another Notice of Strikeon the ground of bargaining deadlock. While the union and the company officers and representatives were meeting, the remaining union officers and members staged a strike at the company premises, barricading the entrances and egresses thereof and setting up a stationary picket at the main entrance of the building.Then Acting Labor Secretary Cresenciano B. Trajano issued an Order assuming jurisdiction over the dispute, enjoining any strike or lockout, whether threatened or actual, directing the parties to cease and desist from committing any act that may exacerbate the situation, directing the striking workers to return to work within twenty-four (24) hours from receipt of the Secretary’s Order and for management to resume normal operations, as well as accept the workers back under the same terms and conditions prior to the strike.The Secretary of Labor adjudicated, among other things, that the strike was illegal.

NISSAN MOTORS VS. SECRETARY OF LABOR G.R. Nos. 158190-91, June 21, 2006, Garcia A bargaining deadlock prompted the filing of four notices of strike by the labor union. The DOLE, upon Nissan Motor’s petition, issued an order assuming jurisdiction over the dispute. Consequently, the DOLE Secretary issued an order expressly enjoining any strike or lockout and directed the parties to cease and desist from committing any act that may exacerbate the situation. Several Union Officers were dismissed due to the continued conduct of a slowdown – union members who participated in such were not. Petitioners fault the NLRC for dismissing only the union officers for violation of the return to work order. ISSUE Is liability for the violation of a RTWO solely a responsibility of union officers? RULING Yes. The public respondent Secretary of Labor and Employment - and necessarily the CA - acted within the bounds of the law – and certainly rendered a judicious solution to the dispute – when she spared the striking workers or union members from the penalty of dismissal. This disposition takes stock of the following circumstances justifying a less drastic penalty for

ISSUE WON the Secretary properly took cognizance of the issue on the alleged illegal strike even though it was not properly submitted to the Secretary for resolution? HELD

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ordinary striking workers: a) the employees who engaged in slowdown actually reported for work and continued to occupy their respective posts, or, in fine, did not abandon their jobs; b) they were only following orders of their leaders; and c) no evidence has been presented to prove their participation in the commission of illegal activities during the strike. Nissan Motor appeared to have also exacerbated, as earlier indicated, the emerging volatile atmosphere despite the Secretary’s order veritably enjoining the parties to respect the status quo prevailing when she assumed jurisdiction over the dispute. Foremost of these exacerbating acts is the en masse termination of most of the Union members, albeit it may be conceded that the employer has the prerogative of imposing disciplinary sanctions against assumption-orderdefying employees.

Revised Rules of Court. Under the NLRC Revised Rules of Procedure, service of copies of orders should be madeby the process server either personally or through registered mail. The presumption of receipt of the copies of the Assumption of JurisdictionOrder AJO could not be taken for granted considering the adverse effect in case the parties failedto heed to the injunction directed by such Order. Defiance of the assumption and returnto-workorders of the Secretary of Labor after he has assumed jurisdiction is a valid ground for the loss ofemployment status of any striking union officer or member. Employment is a property right ofwhich one cannot be deprived of without due process. Due process here would demand that therespondent union be properly notified of the Assumption of Jurisdiction Order of the Secretaryof Labor enjoining the strike and requiring its members to return to work. Thus, there must be aclear and unmistakable proof that the requirements prescribed by the Rules in the manner ofeffecting personal or substituted service had been faithfully complied with.

FEU-NRMF v. FEU-NRMFEA-AFW G.R. No. 168362, October 16, 2006, Chico-Nazario FEU-NRMF and respondent union (a legitimate labor organization and is the duly recognized representative of the rank and file employees of petitioner), entered into a CBA that will expire on 30 April 1996. In view of the forthcoming expiry, respondent union sent a letter proposal to petitioner FEU-NRMF stating their economic and non-economic proposals for the negotiation of the new CBA. FEU-NRMF rejected respondent union’s demands. Respondent union then filed a Notice of Strike before NCMB on the ground of bargaining deadlock, then it staged a strike. FEUNRMF filed a Petition for the Assumption of Jurisdiction (AJO) or for Certification of Labor Dispute with the NLRC, underscoring the fact that it is a medical institution engaged in the business of providing health care for its patients. Secretary of Labor granted the petition and an Order assuming jurisdiction over the labor dispute was issued, thereby prohibiting any strike. The copy of the AJO was not served to the respondent because there no union officer was around. Instead the copy was posted in several conspicuous places within the premises of the hospital. Striking employees continued to strike claiming that they did not know about the AJO order. FEU-NRMF filed a case before the NLRC, contending that respondent union staged the strike in defiance of the AJO, hence, it was illegal.

Merely posting copies of the AJO does not satisfy the rigid requirement for properservice outlined by the above stated rules. Needless to say, the manner of service made by theprocess server was invalid and irregular. Respondent union could not therefore be adjudged tohave defied the said Order since it was not properly apprised thereof. Accordingly, the strikeconducted by the respondent union was valid under the circumstances. PILIPINO TELEPHONE CORPORATION v. PILIPINO TELEPHONE EMPLOYEES ASSOCIATION (PILTEA) G.R. No. 160058, June 22, 2007, Puno On July 13, 1998, the Union filed a Notice of Strike with the NCMB for unfair labor practice due to the alleged acts of "restraint and coercion of union members and interference with their right to selforganization" committed by the Company. The Company filed a petition for Consolidated Assumption of Jurisdiction with the Office of the Secretary of Labor. On August 14, 1998, then Secretary Bienvenido E. Laguesma issued an Order assuming jurisdiction over the entire labor dispute at Pilipino Telephone Corporation. On September 4, 1998, the Union filed a second Notice of Strike with the NCMB on the grounds of: a) Union busting, for the alleged refusal of the Company to turn over union funds; and b) The mass promotion of union members during the CBA negotiation, allegedly aimed at excluding them from the bargaining unit during the CBA negotiation. On the same day, the Union went on strike. On December 7, 1998, the Company filed with the NLRC a petition to declare the Union's September 4, 1998 (second strike) strike illegal.

ISSUE Whether the service of the AJO was validly effected by the process server so as to bindthe respondent union and hold them liable for the acts committed subsequent to the issuance ofthe said Order. RULING The process server resorted to posting the Order when personal service was renderedimpossible since the striking employees were not present at the strike area. This mode ofservice, however, is not sanctioned by either the NLRC Revised Rules of Procedure or the

ISSUES:

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1. Whether or not the mass promotion of union members constituted union busting 2. Whether or not the dismissal of union officers as a penalty for illegal strike is correct

settledifferences. Noncompliance will illegalize the strike. However, the union should not be prejudiced when there was no counter-proposal submitted by the employer to begin with.

HELD: (1) NO. There was no union busting which would warrant the non-observance of the cooling-off period. To constitute union busting under Article 263 of the Labor Code, there must be: 1) a dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws; and 2) the existence of the union must be threatened by such dismissal. In the case at bar, the second notice of strike filed by the Union merely assailed the "mass promotion" of its officers and members during the CBA negotiations. Surely, promotion is different from dismissal.

Petitioner and the union had a CBA which expired on May 31, 2000. Within the freedomperiod, the union made several demands for negotiation but the company replied that it could notmuster a quorum, thus no CBA negotiations could be held. In order to compel the company to negotiate, union filed a request for preventive mediation with NCMB but again failed. On April 2001,a notice of strike was filed by the union and thereafter, a strike was held. ISSUE Whether the strike staged by respondent is legal RULING YES. In cases of bargaining deadlocks, the notice shall, as far as practicable, further state theunresolved issues in the bargaining negotiations and be accompanied by the written proposals of theunion, the counter-proposals of the employer and the proof of a request for conference to settledifferences. Any notice which does not conformwith the requirements of this shall be deemed as not having been filed andthe party concerned shall be so informed by the regional branch of the Board.

This is consistent with our ruling in Bulletin Publishing Corporation v. Sanchez27 that a promotion which is manifestly beneficial to an employee should not give rise to a gratuitous speculation that it was made to deprive the union of the membership of the benefited employee. (2) YES. It cannot be overemphasized that strike, as the most preeminent economic weapon of the workers to force management to agree to an equitable sharing of the joint product of labor and capital, exert some disquieting effects not only on the relationship between labor and management, but also on the general peace and progress of society and economic well-being of the State. This weapon is so critical that the law imposes the supreme penalty of dismissal on union officers who irresponsibly participate in an illegal strike and union members who commit unlawful acts during a strike. The responsibility of the union officers, as main players in an illegal strike, is greater than that of the members as the union officers have the duty to guide their members to respect the law. The policy of the state is not to tolerate actions directed at the destabilization of the social order, where the relationship between labor and management has been endangered by abuse of one party's bargaining prerogative, to the extent of disregarding not only the direct order of the government to maintain the status quo, but the welfare of the entire workforce though they may not be involved in the dispute. The grave penalty of dismissal imposed on the guilty parties is a natural consequence, considering the interest of public welfare.

The union cannot be faulted for its omission. The union could not have attached the counter-proposal of the company in the notice of strike it submitted to the NCMB as there was no such counter- proposal. Nowhere in the ruling of the LA can we find any discussion of how respondents, as unionofficers, knowingly participated in the alleged illegal strike. A. SORIANO AVIATION v. EMPLOYEES ASSOCIATION OF A. SORIANO AVIATION G.R. No. 166879, August 14, 2009, Carpio-Morales Petitioner, which is engaged in providing transportation of guests to and from Amanpulo and El Nido resorts in Palawan, and respondent, which is the duly certified bargaining agent of the rank and file employees of the petitioner, entered into a CBA which included a “No Strike-No Lock-out Clause.” On several dates, which were legal holidays and peak season, some of the members of the union refused to rendered overtime work. Petitioner treated the refusal as a concerted action which is a violation of the No-Strike, No-Lock-out Clause. Thus, it meted the workers 30day suspension and filed an illegal strike against them. The attempted settlement having been futile, the union filed a Notice of Strike. Despite the conciliation no amicable settlement of the dispute was arrived, the union went on strike. The company filed a motion to reopen the case which was granted by LA. In its decision, LA declared that the strike is illegal. On appeal, the NLRC dismissed it in per curiam decision.

CLUB FILIPINO vs. BAUTISTA G.R. No. 168406, January 14, 2015, Leonen Doctrine: In cases of bargaining deadlocks, the notice shall state theunresolved issues in the bargaining negotiations and be accompanied by the written proposals of theunion, the counter-proposals of the employer and the proof of a request for conference to

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In the interim, into the second strike, petitioner filed a complaint before LA for illegal strike on the ground of alleged force and violence. In its decision, LA declared the second strike illegal. On appeal, the NLRC affirmed in toto the LA’s decision. On appeal to CA, the CA reversed and set aside the NLRC ruling. Hence, the present position.

Whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike. HELD No. Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employer’s premises. Since respondent was found in the July 17, 1998 decision of the NLRC to have prevented the free entry into and exit of vehicles from petitioner’s compound, respondents officers and employees clearly committed illegal acts in the course of the March 9, 1998 strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary.

ISSUE Whether or not the strike staged by the respondent is illegal. HELD YES. The Union members’ repeated name-calling, harassment and threats of bodily harm directed against company officers and non-striking employees and, more significantly, the putting up of placards, banners and streamers with vulgar statements imputing criminal negligence to the company, which put to doubt reliability of its operations, come within the purview of illegal acts under Art. 264 and jurisprudence.

C. ALCANTARA & SONS, INC VS. CA G.R. 155109, September 29, 2010

Specifically with respect to the putting up of those banners and placards, coupled with the name-calling and harassment, the same indicates that it was resorted to coerce the resolution of the dispute – the very evil which Art. 264 seeks to prevent. While the strike is the most preeminent economic weapon of workers to force management to agree to an equitable sharing of the joint product of labor and capital, it exerts some disquieting effects not only on the relationship between labor and management, but also on the general peace and progress of society and economic well-being of the State. If such weapon has to be used at all, it must be used sparingly and within the bounds of law in the interest of industrial peace and public welfare.

The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound them to hold no strike and no lockout in the course of its life. At some point the parties began negotiating the economic provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of strike. After efforts at conciliation by the Department of Labor and Employment (DOLE) failed, the Union conducted a strike vote that resulted in an overwhelming majority of its members favoring it. The Union reported the strike vote to the DOLE and, after the observance of the mandatory cooling-off period, went on strike. During the strike, the Company filed a petition for the issuance of a writ of preliminary injunction with prayer for the issuance of a temporary restraining order (TRO) Ex Parte with the National Labor Relations Commission (NLRC) to enjoin the strikers from intimidating, threatening, molesting, and impeding by barricade the entry of non-striking employees at the Companys premises. On June 29, 1999 the Labor Arbiter rendered a decision, declaring the Unions strike illegal for violating the CBAs no strike, no lockout, provision. As a consequence, the Labor Arbiter held that the Union officers should be deemed to have forfeited their employment with the Company and that they should pay actual damages. With respect to the striking Union members, finding no proof that they actually committed illegal acts during the strike, the Labor Arbiter ordered their reinstatement without backwages.

JACKBILT INDUSTRIES v. JACKBILT EMPLOYEES WORKERS UNION-NAFLU-KMU G.R. Nos. 171618-19, March 20, 2009, Corobna Due to the adverse effects of the Asian economic crisis on the construction industry beginning 1997, Jackbilt Industries, Inc. decided to temporarily stop its business. Jackbilt Employees Workers Union-NAFLUKMU immediately protested the temporary shutdown and contented that petitioner halted production to avoid its duty to bargain collectively. The shutdown was allegedly motivated by anti-union sentiments. Accordingly, on March 9, 1998, respondent went on strike. Its officers and members picketed petitioner’s main gates and deliberately prevented persons and vehicles from going into and out of the compound. On its July 17, 1998 decision, the NLRC found out that respondent prevented the free entry into and exit of vehicles from petitioner’s compound.

ISSUES 1. Whether or the strike conducted is illegal? 2. Whether or not the union members should also be terminated? HELD

ISSUE

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1. Yes, a strike may be regarded as invalid although the labor union has complied with the strict requirements for staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause. Here, the CBA between the parties contained a no strike, no lockout provision that enjoined both the Union and the Company from resorting to the use of economic weapons available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes. No law or public policy prohibits the Union and the Company from mutually waiving the strike and lockout maces available to them to give way to voluntary arbitration. The Court finds no compelling reason to depart from the findings of the Labor Arbiter, the NLRC, and the CA regarding the illegality of the strike. Social justice is not one-sided. It cannot be used as a badge for not complying with a lawful agreement. 2. Yes, given that their illegal acts of threatening, coercing and intimidating non-strikers, obstructing the free ingress and egress from the company premises and resisted and defied the implementation of the writ of preliminary injunction issued against the strikers, their employment can no longer reinstated. However, the records also fail to disclose any past infractions committed by the dismissed Union members. Taking these circumstances in consideration, the Court regards the award of financial assistance to these Union members in the form of one-half month salary for every year of service to the company up to the date of their termination as equitable and reasonable.

RULING No. Although the strike was illegal, PHIMCO violated the requirements of due process of the Labor Code when it dismissed the respondents. Under Article 277b of the Labor Code, the employer must send the employee, who is about to be terminated, a written notice stating the cause/s for termination and must give the employee the opportunity to be heard and to defend himself. To meet the requirements of due process in the dismissal of an employee, an employer must furnish him or her with two (2) written notices: (1) a written notice specifying the grounds for termination and giving the employee a reasonable opportunity to explain his side and (2) another written notice indicating that, upon due consideration of all circumstances, grounds have been established to justify the employer's decision to dismiss the employee. In the present case, PHIMCO sent a letter, on June 23, 1995, to thirty-six (36) union members, generally directing them to explain within twenty-four (24) hours why they should not be dismissed for the illegal acts they committed during the strike; three days later, or on June 26, 1995, the thirty-six (36) union members were informed of their dismissal from employment. SOLIDBANK CORPORATION V. GAMIER G.R. Nos. 159460 – 159461, November 15, 2010, Villarama Petitioner Solidbank and respondent Solidbank Employees Union (Union) were set to renegotiate the economic provisions of their 1997-2001 CBA to cover the remaining two years thereof. Seeing that an agreement was unlikely, the Union declared a deadlock on and filed a Notice of Strike. In view of the impending actual strike, then Secretary of Labor and Employment BienvenidoE. Laguesma assumed jurisdiction. The assumption order dated directed the parties to cease and desist from committing any and all acts that might exacerbate the situation. Secretary Laguesma resolved all economic and non-economic issues submitted by the parties. Dissatisfied with the Secretary’s ruling, the Union officers and members decided to protest the same by holding a rally infront of the Office of the Secretary of Labor and Employment in Intramuros, Manila, simultaneous with the filing of their motion for reconsideration.The union members also picketed the banks Head Office in Binondo and Paseo de Roxas. As a result of the employees concerted actions, Solidbanks business operations were paralyzed. The herein 129 individual respondents were among the 199 employees who were terminated for their participation in the three-day work boycott and protest action.

PHIMCO INDUSTRIES VS. PILA G.R. NO. 170830, August 11, 2010, Brion PHIMCO is a corporation engaged in the production of matches and respondent Phimco Industries Labor Association (PILA) is the duly authorized bargaining representative of PHIMCOs daily-paid workers. Because of the deadlock on economic issues, mainly due to disagreements on salary increases and benefits, PILA staged a strike. PHIMCO filed with the NLRC a petition for preliminary injunction and temporary restraining order (TRO), to enjoin the strikers from preventing through force, intimidation and coercion the ingress and egress of non-striking employees into and from the company premises. Several PILA members and officers were dismissed. ISSUE Whether or not the members and officers of the respondent were validly dismissed

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(1) Whether the protest rally and concerted work abandonment/boycott staged by the respondents violated the Order of the Secretary of Labor; (2) whether the respondents were validly terminated; and (3) whether the respondents are entitled to separation pay or financial assistance.

in violation of the Secretarys assumption order. The dismissal of herein respondent-union members are therefore unjustified in the absence of a clear showing that they committed specific illegal acts during the mass actions and concerted work boycott. (3) Under the circumstances, respondents reinstatement without backwages suffices for the appropriate relief. But since reinstatement is no longer possible, given the lapse of considerable time from the occurrence of the strike, not to mention the fact that Solidbank had long ceased its banking operations, the award of separation pay of one (1) month salary for each year of service, in lieu of reinstatement, is in order. For the twenty-one (21) individual respondents who executed quitclaims in favor of the petitioners, whatever amount they have already received from the employer shall be deducted from their respective separation pay.

RULING (1) The Court has consistently ruled that once the Secretary of Labor assumes jurisdiction over a labor dispute, such jurisdiction should not be interfered with by the application of the coercive processes of a strike or lockout. A strike that is undertaken despite the issuance by the Secretary of Labor of an assumption order and/or certification is a prohibited activity and thus illegal. Article 264 (a) of the Labor Code, as amended, also considers it a prohibited activity to declare a strike during the pendency of cases involving the same grounds for the same strike.There is no dispute that when respondents conducted their mass actions on April 3 to 6, 2000, the proceedings before the Secretary of Labor were still pending as both parties filed motions for reconsideration of the March 24, 2000 Order. Clearly, respondents knowingly violated the aforesaid provision by holding a strike in the guise of mass demonstration simultaneous with concerted work abandonment/boycott.

ESCARIO v. NLRC G.R. No. 160302, September 27, 2010, Bersamin Officers and members of Malayang Samahan ng mga Manggagawasa Balanced Foods walked out of the premises of Pinakamasarap Corporation (PINA) and proceeded to the barangay office to show support for an officer of the Union charged with oral defamation by PINA’s personnel manager. As a result of the walkout, PINA preventively suspended all officers of the Union and terminated the officers of the Union after a month. The Union later conducted a strike but the same was declared to be an illegal strike by the Labor Arbiter. The NLRC sustained the finding of the illegality of the strike, but ruled that the union members should not be considered to have abandoned their employment on the ground that mere participation of a union member in an illegal strike does not mean loss of employment.

(2) However, a worker merely participating in an illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be declared to have lost employment status. We have held that the responsibility of union officers, as main players in an illegal strike, is greater than that of the members and, therefore, limiting the penalty of dismissal only for the former for participation in an illegal strike is in order. Hence, with respect to respondents who are union officers, the validity of their termination by petitioners cannot be questioned. Being fully aware that the proceedings before the Secretary of Labor were still pending as in fact they filed a motion for reconsideration of the March 24, 2000 Order, they cannot invoke good faith as a defense.

ISSUE Are the union members entitled to full backwages due to their not being found to have abandoned their jobs? RULING No. Conformably with the long honored principle of a fair days wage for a fair days labor, employees dismissed for joining an illegal strike are not entitled to backwages for the period of the strike even if they are reinstated by virtue of their being merely members of the striking union who did not commit any illegal act during the strike.

For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis.Petitioners have not adduced evidence on such illegal acts committed by each of the individual respondents who are union members. Instead, petitioners simply point to their admitted participation in the mass actions which they knew to be illegal, being

Article 264(a) authorizes the award of full backwages only when the termination of employment is a consequence of an unlawful lockout. Also, that backwages are not granted to employees participating in an illegal strike simply accords with the reality that they do not render work for the employer during the period of the illegal strike. If there is no work performed by the employee, there can be no wage or pay unless, of course, the laborer was able, willing and ready to

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work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working.For this exception to apply, it is required that the strike be legal.

On June 23, 2003, the DOLE Secretary included the union’s second notice of strike but, on the same day, the union filed a third notice of strike based on allegations that the company had engaged in union busting and illegal dismissal of union officers. On July 7, 2003, the company filed a petition for certififcation of their labor dispute to the NLRC for compulsory arbitration but the DOLE Secretary denied the motion and subsumed the third notice of strike.

BAGONG PAGKAKAISA NG MANGGAGAWA NG TRIUMP VS SECRETARY OF LABOR G.R. No. 167401 A bargaining deadlock arise between the parties, thus a notice of strike was filed by petitioner, a notice of lock-out was then filed by the respondent due to a work-slowdown. But the secretary of labor assumed jurisdiction and issued a RTW Order, but those who want to return to work was prevented by the other striking members.

The DOLE upheld the termination of 17 union officers but the CA only upheld the validity of termination of 10 union officers and declared illegal that of the other 7, hence, this petition. ISSUES 1. Did slowdowns actually transpire at the company’s farms? 2. Did the union officers commit illegal acts that warranted their dismissal from work?

Due to the intervention of the Sec. of Labor, it was agreed that all would return to work except the officers and the shop steward pending their investigation, they were reinstated only in the payroll. The Secretary of Labor refused to rule on the validity of the dismissal of the Union Officers and the shop stewardess because it believed that it is under the jurisdiction of the Labor Artbiter

HELD (1) Yes. No strike shall be declared after the Secretary of Labor has assumed jurisdiction over a labor dispute. A strike conducted after such assumption is illegal and any union officer who knowingly participates in the same may be declared as having lost his employment. Here, what is involved is a slowdown strike. Unlike other forms of strike, the employees involved in a slowdown do not walk out of their jobs to hurt the company. They need only to stop work or reduce the rate of their work while generally remaining in their assigned post.

ISSUE WON the Sec of Labor has jurisdiction to hear and decide cases of illegal dismissal arising out from a strike/lock-out RULING Yes. First: Jurisdiction of Secretary of Labor - As the term assume jurisdiction connotes, the intent of the law is to give the Labor Secretary full authority to resolve all matters within the dispute that gave rise to or which arose out of the strike or lockout; it includes and extends to all questions and controversies arising from or related to the dispute, including cases over which the labor arbiter has exclusive jurisdiction. FADRIQUELAN V. MONTEREY CORPORATION G.R. No. 178409, June 8, 2011, Abad

The union officers and members in this case held a slowdown strike at the company’s farms despite the fact that the DOLE Secretary had on May 12, 2003 already assumed jurisdiction over their labor dispute. The evidence sufficiently shows that union officers and members simultaneously stopped work at the companys Batangas and Cavite farms at 7:00 a.m. on May 26, 2003.

FOODS

(2) Qualified yes. A distinction exists, however, between the ordinary workers liability for illegal strike and that of the union officers who participated in it. The ordinary worker cannot be terminated for merely participating in the strike. There must be proof that he committed illegal acts during its conduct. On the other hand, a union officer can be terminated upon mere proof that he knowingly participated in the illegal strike. The participating union officers have to be properly identified.

When the 3-year CBA between the union Bukluran ng Manggagawasa Monterey-Ilaw at Buklod ng Manggagawa and the company Monterey Foods Corporation expired, and after reaching a deadlock in the negotiation for a new CBA, the union filed a notice of strike with the NCMB to which the DOLE Secretary assumed jurisdiction on May 12, 2003. On May 21, 2003, the union filed a second notice of strike on the alleged ground that the company committed ULPs. The company then sent notices to the union officers, charging them with intentional acts of slowdown, and 6 days later, the company sent notices of termination from work for defying the the assumption order.

Those who cannot be connected to the slowdowns were illegally dismissed. IN this case, only the identity and participations of Arturo Eguna, Armando Malaluan, Danilo Alonso, Romulo Dimaano, RoelMayuga, Wilfredo Rizaldo, Romeo Suico, Domingo Escamillas, and Domingo Bautro in the slowdowns were properly

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established. These officers simply refused to work or they abandoned their work to join union assemblies.

union of the rank and file employees of AER which was formed in the year 1998. AER accused the Unyon of illegal concerted activities (illegal strike, illegal walkout, illegal stoppage, and unfair labor practice) while Unyon accused AER of unfair r On December 22, 1998, Unyon filed a petition for certification election before the Department of Labor and Employment (DOLE) after organizing their employees union within AER. Resenting what they did, AER forced all of its employees to submit their urine samples for drug testing. Those who refused were threatened with dismissal. On January 12, 1999, AER issued a memorandum suspending seven employees from work for violation of Article D, Item 2 of the Employees handbook which reads as follows: Coming to work under the influence of intoxicating liquor or any drug or drinking any alcoholic beverages on the premises on company time While they were in the process of securing their respective medical certificates, however, they were shocked to receive a letter from AER charging them with insubordination and absence without leave and directing them to explain their acts in writing. Despite their written explanation, AER refused to reinstate them. Meanwhile, Unyon found out that AER was moving out machines from the main building to the AER-PSC compound located on another street. Sensing that management was going to engage in a runaway shop, Unyon tried to prevent the transfer of the machines which prompted AER to issue a memorandum accusing those involved of gross insubordination, work stoppage and other offenses. On February 2, 1999, the affected workers were denied entry into the AER premises by order of management. Because of this, the affected workers staged a picket in front of company premises hoping that management would accept them back to work. When their picket proved futile, they filed a complaint for unfair labor practice, illegal suspension and illegal dismissal.

MAGDALA MULTIPURPOSE & LIVELIHOOD V. KMLMS G.R. Nos. 191138-39, October 19, 2011, Velasco KMLMS held a strike-vote one day before its registration was granted. It later staged a strike where several illegal acts were committed. The company argued that the strike was illegal, and all participating union members should be declared to have forfeited their employment. SC ruled in favor of the company. The mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as an LLO. ISSUE Whether or not the strike was illegal. RULING Yes. A strike conducted by a union which acquired its legal personality AFTER the filing of its Notice of Strike and the conduct of the Strike Vote is ILLEGAL. There is no question that the May 6, 2002 strike was illegal, first, because when KilusangManggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) filed the notice of strike on March 5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual union and its members. And second, similarly, when KMLMS conducted the strike-vote on April 8, 2002, there was still no union to speak of, since KMLMS only acquired legal personality as an independent legitimate labor organization only on April 9, 2002 or the day after it conducted the strike-vote. Consequently, the mandatory notice of strike and the conduct of the strike-vote report were ineffective for having been filed and conducted before KMLMS acquired legal personality as a legitimate labor organization, violating Art. 263(c), (d) and (f) of the Labor Code and Rule XXII, Book V of the Omnibus Rules Implementing the Labor Code. It is, thus, clear that KMLMS did not comply with the mandatory requirement of law and implementing rules on possession of a legal personality as a legitimate labor organization.

ISSUE Whether or not the drug testing was valid RULING AERs fault is obvious from the fact that a day after the union filed a petition for certification election before the DOLE, it hit back by requiring all its employees to undergo a compulsory drug test. Although AER argues that the drug test was applied to all its employees, it was silent as to whether the drug test was a regular company policy and practice in their 35 years in the automotive engine repair and rebuilding business. As the Court sees it, it was AERs first ever drug test of its employees immediately implemented after the workers manifested their desire to organize themselves into a union. Indeed, the timing of the drug test was suspicious. Moreover, AER failed to show proof that the drug test conducted on its employees was performed by an authorized drug testing center. It did not mention how the tests were conducted and whether the proper procedure was employed.

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER) v. PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER G.R. No. 16013, July 13, 2011, Mendoza Records show that AER is a company engaged in the automotive engine repair and rebuilding business and other precision and engineering works for more than 35 years. Progresibong Unyon Ng Mga Manggagawasa AER (Unyon) is the legitimate labor

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Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers. Moreover, Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. Department Order No. 53-03 further provides: Drug testing shall conform with the procedures as prescribed by the Department of Health (DOH). Only drug testing centers accredited by the DOH shall be utilized. A list of accredited centers may be accessed through the OSHC. Drug testing shall consist of both the screening test and the confirmatory test; the latter to be carried out should the screening test turn positive. The employee concerned must be informed of the test results whether positive or negative. Furthermore, AER engaged in a runaway shop when it began pulling out machines from the main AER building to the AER-PSC compound located on another street on the pretext that the main building was undergoing renovation. Certainly, the striking workers would have no reason to run and enter the AER-PSC premises and to cause the return of the machines to the AER building if they were not alarmed that AER was engaging in a runaway shop.

dispute.” Concerted is defined as “mutually contrived or planned” or “performed in unison.” In this case, the petitioners were absent for various personal reasons. Petitioners were in different places on said date and attended to their personal needs or affairs. They did not go to the company premises to petition Biomedica for their grievance. This shows that there was NO INTENT to go on strike. 2. YES. Petitioners were not afforded procedural due process. The period of 24 hours given to petitioners to answer the notice was severely insufficient. The law provides that an employee should be given “reasonable opportunity” to file a response. The SC in King of Kings Transport vs. Mamac construed this to be a period of at least five (5) calendar days from receipt of notice to give the employees an opportunity to study the accusation against them, consult a union officer or lawyer, gather evidence, and decide on the defense they will raise against the complaint.

NARANJO v. BIOMEDICA HEALTH CARE, INC. G.R. No. 193789, September 19, 2012, Velasco

Petitioners were also not afforded substantive due process. To justify the dismissal of an employee on the ground of serious misconduct, the employer must first establish the existence of a valid company rule or regulation. In this case, Biomedica failed to establish that petitioners violated company rules since they did not present a copy of the rules and they failed to prove that petitioners were made aware of such regulations.

Petitioners Naranjo et al are all employees of Biomedica. Carina Motol is the President of said company. On November 7, 2006, during Motol’s birthday, petitioners were all absent for various personal reasons. The next day, petitioners came in for work but were not allowed to enter the premises. Motol, through foul language, told them to find employment elsewhere.

VISAYAS COMMUNITY MEDICAL CENTER (VCMC) v. YBALLE G.R. No. 196156, January 15, 2014

Subsequently, Biomedica issued notices to petitioners accusing them of having conducted an illegal strike and were asked to explain within 24 hours why they should not be held guilty of and dismissed for violation of company policy against illegal strikes. Biomedica, however, did not furnish them with a copy of the said company policy.

Respondents were hired as staff nurses (Ong and Angel) and midwives (Yballe and Cortez) by petitioner Visayas Community Medical Center (VCMC), formerly the Metro Cebu Community Hospital, Inc. (MCCHI). The four workers were among the 100 rank-and-file employees whose services were terminated by the VCMC for participating in the strike and picket in April 1996.

Petitioners failed to submit a written explanation, thus, Biomedica served Notices of Termination to them. It stated that petitioners engaged in an illegal strike. Petitioners then filed a complaint for illegal dismissal. The Labor Arbiter dismissed the complaint. The NLRC reversed the LA. On appeal, the CA reinstated the decision of the LA.

The dismissed workers had demanded for the hospital management to resume bargaining. These workers were part of a series of mass actions spearheaded by Nava where they wore black and red armbands and marched around the hospital premises, then put up placards and streamers in the vicinity. Consequently, VCMC sent termination letters to union leaders and other members who participated in the strike and picket. In the Decision dated December 7, 2011, SC ruled that the mass termination of complainants was illegal, notwithstanding the illegality of the strike in which they participated.

ISSUES 1. Did the petitioners engage in an illegal strike? 2. Were the petitioners illegal dismissed? HELD 1. NO. Petitioners did not go on strike. The Labor Code defines a strike as “any temporary stoppage of work by the concerted action of employees as a result of any industrial or labor

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ISSUE W/N union members who were illegally dismissed for mere participation in an illegal strike are entitled to separation pay?

March 1987 until he was terminated on 3 March 2000. Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. TAPE countered that the labor arbiter had no jurisdiction over the case in the absence of an employer-employee relationship between the parties. TAPE averred that respondent was an independent contractor falling under the talent group category and was working under a special arrangement which is recognized in the industry. Respondent for his part insisted that he was a regular employee having been engaged to perform an activity that is necessary and desirable to TAPE’s business for thirteen (13) years.

HELD YES, they are entitled to separation pay but not backwages. With respect to backwages, the principle of a "fair day’s wage for a fair day’s labor" remains as the basic factor in determining the award thereof. If there is no work performed by the employee there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working.

ISSUE Whether Respondent Roberto C. Servaña was a regular employee

The alternative relief for union members who were dismissed for having participated in an illegal strike is the payment of separation pay in lieu of reinstatement under the following circumstances: (a) when reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the employer’s interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers’ continued employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations between the employer and employee.

RULING Yes. [Selection] Respondent was first connected with AgroCommercial Security Agency, which assigned him to assist TAPE in its live productions. When the security agency’s contract with RPN-9 expired in 1995, respondent was absorbed by TAPE or, in the latter’s language, "retained as talent." Clearly, respondent was hired by TAPE. Respondent presented his identification card to prove that he is indeed an employee of TAPE. It has been in held that in a business establishment, an identification card is usually provided not just as a security measure but to mainly identify the holder thereof as a bona fide employee of the firm who issues it.

In the Decision dated December 7, 2011, we held that the grant of separation pay to complainants is the appropriate relief under the circumstances, thus:

[Wages] Respondent claims to have been receiving P5,444.44 as his monthly salary while TAPE prefers to designate such amount as talent fees. Wages, as defined in the Labor Code, are remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered. It is beyond dispute that respondent received a fixed amount as monthly compensation for the services he rendered to TAPE.

Considering that 15 years had lapsed from the onset of this labor dispute, and in view of strained relations that ensued, in addition to the reality of replacements already hired by the hospital which had apparently recovered from its huge losses, and with many of the petitioners either employed elsewhere, already old and sickly, or otherwise incapacitated, separation pay without back wages is the appropriate relief.

EMPLOYER-EMPLOYEE RELATIONSHIP

[Dismissal] The Memorandum informing respondent of the discontinuance of his service proves that TAPE had the power to dismiss respondent.

TELEVISION AND PRODUCTION EXPONENTS, INC. and/or ANTONIO P. TUVIERA vs. ROBERTO C. SERVAÑA G.R. No. 167648, January 28, 2008

[Control] Control is manifested in the bundy cards submitted by respondent in evidence. He was required to report daily and observe definite work hours.

TAPE is a domestic corporation engaged in the production of television programs, such as the longrunning variety program, "Eat Bulaga!". Its president is Antonio P. Tuviera (Tuviera). Respondent Roberto C. Servaña had served as a security guard for TAPE from

ABS-CBN BROADCASTING CORP. V. NAZARENO G.R. 164156, Sept. 26, 2006

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Petitioner ABS-CBN Broadcasting Corporation (ABSCBN) is engaged in the broadcasting business. Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu Broadcasting Station, with a monthly compensation of P4,000. They were issued ABS-CBN employees’ identification cards and were required to work for a minimum of eight hours a day, including Sundays and holidays.

different duties under the control and direction of ABSCBN executives and supervisors. In this case, it is undisputed that respondents had continuously performed the same activities for an average of five years. Their assigned tasks are necessary or desirable in the usual business or trade of the petitioner. The persisting need for their services is sufficient evidence of the necessity and indispensability of such services to petitioner’s business or trade.40 While length of time may not be a sole controlling test for project employment, it can be a strong factor to determine whether the employee was hired for a specific undertaking or in fact tasked to perform functions which are vital, necessary and indispensable to the usual trade or business of the employer

The PAs were under the control and supervision of Assistant Station Manager Dante J. Luzon, and News Manager Leo Lastimosa. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees executed a Collective Bargaining Agreement (CBA) to be effective during the period from December 11, 1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining unit, respondents were not included to the CBA.

FARLEY FULACHE V. ABS-CBN BROADCASTING CORPORATION G.R. No. 183810, January 21, 2010, Brion Petitioners Farley Fulache, Manolo Jabonero, David Castillo, Jeffrey Lagunzad, Magdalena Malig-on Bigno, Francisco Cabas, Jr., Harvey Ponce and Alan C. Almendras (petitioners) and Cresente Atinen (Atinen) filed two separate complaints for regularization, unfair labor practice and several money claims (regularization case) against ABS-CBN Broadcasting Corporation-Cebu (ABS-CBN).

On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. Respondents insisted that they belonged to a "work pool" from which petitioner chose persons to be given specific assignments at its discretion, and were thus under its direct supervision and control regardless of nomenclature.

The petitioners alleged that on December 17, 1999, ABS-CBN and the ABS-CBN Rank-and-File Employees Union (Union) executed a collective bargaining agreement (CBA) effective December 11, 1999 to December 10, 2002; they only became aware of the CBA when they obtained copies of the agreement; they learned that they had been excluded from its coverage as ABS-CBN considered them temporary and not regular employees, in violation of the Labor Code. They claimed they had already rendered more than a year of service in the company and, therefore, should have been recognized as regular employees entitled to security of tenure and to the privileges and benefits enjoyed by regular employees. They asked that they be paid overtime, night shift differential, holiday, rest day and service incentive leave pay. They also prayed for an award of moral damages and attorney’s fees.

ISSUE Are Nazareno et. al employees of ABS-CBN? HELD We agree with respondents’ contention that where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. It is of no moment that petitioner hired respondents as "talents." The fact that respondents received preagreed "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 nature of their employment. Respondents cannot be considered "talents" because they are not actors or actresses or radio specialists or mere clerks or utility employees. They are regular employees who perform several

ABS-CBN claimed that to cope with fluctuating business conditions, it contracts on a case-to-case basis the services of persons who possess the necessary talent, skills, training, expertise or qualifications to meet the requirements of its programs and productions. These contracted persons are called talents and are considered independent contractors who offer their services to broadcasting companies. Instead of salaries, ABS-CBN pointed out that talents are paid a pre-arranged consideration called talent fee

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taken from the budget of a particular program and subject to a ten percent (10%) withholding tax. Talents do not undergo probation. Their services are engaged for a specific program or production, or a segment thereof. Their contracts are terminated once the program, production or segment is completed.

ABS-CBN moved for the reconsideration of the decision, reiterating that Fulache, Jabonero, Castillo and Lagunzad were independent contractors, whose services had been terminated due to redundancy; thus, no backwages should have been awarded. On the regularization issue, the NLRC stood by the ruling that the petitioners were regular employees entitled to the benefits and privileges of regular employees. On the illegal dismissal case, the petitioners, while recognized as regular employees, were declared dismissed due to redundancy.

Labor Arbiter Rendoque rendered his decision holding that the petitioners were regular employees of ABSCBN, not independent contractors, and are entitled to the benefits and privileges of regular employees. ABSCBN appealed the ruling to the National Labor Relations Commission (NLRC) mainly contending that the petitioners were independent contractors, not regular employees.

ISSUE Whether or not the petitioners are covered by the CBA and therefore entitled to its benefits.

While the appeal of the regularization case was pending, ABS-CBN dismissed Fulache, Jabonero, Castillo, Lagunzad and Atinen (all drivers) for their refusal to sign up contracts of employment with service contractor Able Services. The four drivers and Atinen responded by filing a complaint for illegal dismissal (illegal dismissal case). In defense, ABS-CBN alleged that it decided to course through legitimate service contractors all driving, messengerial, janitorial, utility, make-up, wardrobe and security services for both the Metro Manila and provincial stations, to improve its operations and to make them more economically viable. Fulache, Jabonero, Castillo, Lagunzad and Atinen were not singled out for dismissal; as drivers, they were dismissed because they belonged to a job category that had already been contracted out.

HELD YES. They are ABS-CBNs regular employees entitled to the benefits and privileges of regular employees. These benefits and privileges arise from entitlements under the law (specifically, the Labor Code and its related laws), and from their employment contract as regular ABS-CBN employees, part of which is the CBA if they fall within the coverage of this agreement. Thus, what only needs to be resolved as an issue for purposes of implementation of the decision is whether the petitioners fall within CBA coverage. The petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiters decision of January 17, 2002 affirmed all the way up to the CA level ruled against ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBAs express terms and are entitled to its benefits.

Labor Arbiter Rendoque upheld the validity of ABSCBN's contracting out of certain work or services in its operations.He awarded them separation pay of one (1) months salary for every year of service.Again, ABSCBN appealed to the NLRC which rendered on December 15, 2004 a joint decision on the regularization and illegal dismissal cases. The NLRC ruled that there was an employer-employee relationship between the petitioners and ABS-CBN as the company exercised control over the petitioners in the performance of their work; the petitioners were regular employees because they were engaged to perform activities usually necessary or desirable in ABS-CBN's trade or business; they cannot be considered contractual employees since they were not paid for the result of their work, but on a monthly basis and were required to do their work in accordance with the company’s schedule.The NLRC reversed the labor arbiters ruling in the illegal dismissal case; it found that petitioners Fulache, Jabonero, Castillo, Lagunzad and Atinen had been illegally dismissed and awarded thembackwages and separation pay in lieu of reinstatement. Under both cases, the petitioners were awarded CBA benefits and privileges from the time they became regular employees up to the time of their dismissal.

ABS-CBN forgot that by claiming redundancy as authorized cause for dismissal, it impliedly admitted that the petitioners were regular employees whose services, by law, can only be terminated for the just and authorized causes defined under the Labor Code. JOSE Y. SONZA v. ABS-CBN BROADCASTING CORPORATION G.R. No. 138051, June 10, 2004, Carpio In May 1994, respondent ABS-CBN Broadcasting Corporation (ABS-CBN) signed an Agreement (Agreement) with the Mel and Jay Management and Development Corporation (MJMDC). Referred to in the Agreement as AGENT, MJMDC agreed to provide SONZAs services exclusively to ABS-CBN as talent for radio and television. The Agreement listed the services SONZA would render to ABS-CBN, as Co-host for Mel & Jay radio and TV program, ABS-CBN agreed to pay for SONZAs services a monthly talent fee of P310,000

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for the first year and P317,000 for the second and third year of the Agreement.

BERNARTE v. PBA G.R. Nos. 192084, September 14, 2011, Carpio

In 1996, SONZA wrote a letter to ABS-CBNs President stating his resignation, notice of rescission of the Agreement, and waiver of recovery of the remaining amount stipulated in paragraph 7 of the Agreement but reserves the right to seek recovery of the other benefits under said Agreement.Later on, SONZA filed a complaint against ABS-CBN before the DOLE. SONZA complained that ABS-CBN did not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance and amounts due under the Employees Stock Option Plan (ESOP).ABS-CBN filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties.

Bernarte and Guevarra aver that they were invited to join the PBA as referees and they were made to sign contracts on a year-to-year basis. However, changes were made on the terms of their employment. Bernarte received a letter advising him that his contract would not be renewed citing his unsatisfactory performance on and off the court. Guevarra alleged that beginning February 2004, he was no longer made to sign a contract. Respondents averred that complainants entered into two contracts of retainer with the PBA in the year 2003 and after December 2003, PBA decided not to renew their contracts. ISSUE WON petitioner is an employee of the PBA, thus illegally dismissed.

ISSUE Whether or not there is an employer-employee relationship between the respondent and petitioner

RULING No. To determine the existence of an employeremployee relationship, case law has consistently applied the four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer's power to control the employee on the means and methods by which the work is accomplished. The so-called "control test" is the most important indicator of the presence or absence of an employer-employee relationship. In this case, PBA admits repeatedly engaging petitioner's services, as shown in the retainer contracts. PBA pays petitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer contract. PBA can terminate the retainer contract for petitioner's violation of its terms and conditions.

HELD There is no employer-employee relationship. Applying the four-fold test, petitioner Sonza was considered by the Court as an independent contractor. Selection and engagement of employee: The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent contractual relationship. Payment of wages: The power to bargain talent fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive, of an independent contractual relationship.

We agree with respondents that once in the playing court, the referees exercise their own independent judgment, based on the rules of the game, as to when and how a call or decision is to be made. The referees decide whether an infraction was committed, and the PBA cannot overrule them once the decision is made on the playing court. The referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle because such authority exclusively belongs to the referees. The very nature of petitioner's job of officiating a professional basketball game undoubtedly calls for freedom of control by respondents.

Power of dismissal: For violation of any provision of the Agreement, either party may terminate their relationship. SONZA failed to show that ABS-CBN could terminate his services on grounds other than breach of contract. Power of control: The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises; the more likely the worker is considered an independent contractor.

The fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an employee of the former. For a hired party to be considered an employee, the hiring party must have control over the means and methods by which the hired party is to perform his work, which is absent in this case.

ABS-CBN did not exercise control over the means and methods of performance of SONZAs work. Hence, Sonza is not an employee but an independent contractor.

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ABELLA V. PLDT G.R. No. 159469, June 8, 2005, Chico-Nazario

may be required of your position in accordance with pertinent Company policies and guidelines. In pursuit of this objective, you are hereby tasked with the responsibilities of recruiting, training and directing your Supervising Associates (SAs) and the Health Consultants under their respective agencies, for the purpose of promoting our corporate Love Mission. The authority as MA likewise vests upon you command responsibility for the actions of your SAs and HealthCons; the Company therefore reserves the right to debit your account for any accountabilities/financial obligations arising therefrom.

PSI, a legitimate job contractor, entered into an agreement with the PLDT to provide the latter with such number of qualified uniformed and properly armed security guards. PSI determined and paid the compensation of the security guards. Upon deployment, PLDT conducted interviews and evaluation to ensure that the standards it set are met by the security guards. PLDT rarely failed to accept security guards referred to by PSI but on account of height deficiency. PLDT likewise conducted seminars for the security guards in its premises.

By your acceptance of this appointment, it is understood that you must represent the Company on an exclusive basis, and must not engage directly or indirectly in activities, nor become affiliated in official or unofficial capacity with companies or organizations which compete or have the same business as Pamana. It is further understood that his [sic] selfinhibition shall be effective for a period of one year from date of official termination with the Company arising from any cause whatsoever.

Later, several security guards deployed in PLDT sought regularization of employment with PLDT, claiming that PLDT employed them through the years commencing from 1982 and that all of them served PLDT directly for more than 1 year. ISSUE Are the security guards employees of PLDT? HELD No. Based on the following circumstances, PLDT is not the employer of the security guards a) The screening of security guards does not amount to hiring but merely a referral by PSI intended for possible assignment in a designated client. Thus employer-employee relationship is deemed perfected even before the posting of the security guards with the PLDT, as assignment only comes after employment. b) PSI had control over the determination and payment of the security guards’ compensation. c) PSI is a legitimate job contractor, hence, the employer of the security guards.

In consideration of your undertaking the assignment and the accompanying duties and responsibilities, you shall be entitled to compensation computed as follows: On Initial Membership Fee Entrance Fee 5%; Medical Fee 6%; On Subsequent Membership Fee 6% You are likewise entitled to participate in sales contests and such other incentives that may be implemented by the Company. This appointment is on a non-employer-employee relationship basis, and shall be in accordance with the Company Guidelines on Appointment, Reclassification and Transfer of Sales Associates. On 4 March 1988, Pamana and the U.S. Naval Supply Depot signed the FFCEA account. Consulta, claiming that Pamana did not pay her commission for the FFCEA account, filed a complaint for unpaid wages or commission against Pamana, its President Razul Z. Requesto ("Requesto"), and its Executive VicePresident Aleta Tolentino ("Tolentino").

As regards the holding of seminars for security guards, it is not uncommon, especially for big aggressive corporations like PLDT, to align or integrate their corporate visions and policies externally or with that of other entities they deal with such as their suppliers, consultants, or contractors.

ISSUE Whether Consulta was an employee of Pamana RULING Yes.Applying the four-fold test :(1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control. The power to control is the most important of the four elements. The power to control is explained as: “x xx It should, however, be obvious that not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the services rendered may be accorded the effect of establishing an employeremployee relationship between them in the legal or technical sense of the term. A line must be drawn somewhere, if the recognized distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be a rare contract of

CONSULTA V. CA GR 145443, March 18, 2005, Carpio Pamana Philippines, Inc. ("Pamana") is engaged in health care business. Raquel P. Consulta ("Consulta") was a Managing Associate of Pamana. Consulta’s appointment dated 1 December 1987 states: “We are pleased to formally confirm your appointment and confer upon you the authority as MANAGING ASSOCIATE (MA) effective on December 1, 1987 up to January 2, 1988. In this capacity, your principal responsibility is to organize, develop, manage, and maintain a sales division and a full complement of agencies and Health Consultants and to submit such number of enrollments and revenue attainments as

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VILLAMARIA vs. COURT OF APPEALS BUSTAMANTE GR No. 165881, April 19, 2006, Callejo, Sr.

service that gives untrammelled freedom to the party hired and eschews any intervention whatsoever in his performance of the engagement. Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.

AND

Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in assembling passenger jeepneys with a public utility franchise to operate along the Baclaran-Sucat route. By 1995, Villamaria stopped assembling jeepneys and retained only nine, four of which operated by employing drivers on a “boundary basis.” One of those drivers was respondent Bustamante.Bustamante remitted 450 a day to Villamaria as boundary and kept the residue of his daily earnings as compensation for driving the vehicle. In August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante under a “boundaryhulog scheme”, where Bustamante would remit to Villamaria P550 a day for a period of 4 years; Bustamane would then become the owner of the vehicle and continue to drive the same under Villamaria’s franchise, but with Php 10,000 downpayment. On August 7, 1997, Villamaria executed a contract entitled “Kasunduan ng Bilihan ng SasakyansaPamamagitan ng Boundary Hulog”. The parties agreed that if Bustamante failed to pay the boundary- hulog for 3 days, Villamaria Motors would hold on to the vehicle until Bustamante paid his arrears, including a penalty of 50 a day; in case Bustamante failed to remit the daily boundary-hulog for a period of one week, the Kasunduan would cease to have the legal effect and Bustamante would have to return the vehicle to Villamaria motors.In 1999, Bustamante and other drivers who also had the same arrangement failed to pay their respective boundaryhulog. This prompted Villamaria to serve a “Paalala”. On July 24, 2000.Villamaria took back the jeepney driven by Bustamante and barred the latter from driving the vehicle.Bustamante filed a complaint for Illegal Dismissal.

In the present case, the power to control is missing. Pamana tasked Consulta to organize, develop, manage, and maintain a sales division, submit a number of enrollments and revenue attainments in accordance with company policies and guidelines, and to recruit, train and direct her Supervising Associates and Health Consultants. However, the manner in which Consulta was to pursue these activities was not subject to the control of Pamana. Consulta failed to show that she had to report for work at definite hours. The amount of time she devoted to soliciting clients was left entirely to her discretion. The means and methods of recruiting and training her sales associates, as well as the development, management and maintenance of her sales division, were left to her sound judgment. Managing Associates only received suggestions from Pamana on how to go about their recruitment and sales activities. They could adopt the suggestions but the suggestions were not binding on them. They could adopt other methods that they deemed more effective. Further, the Managing Associates had to ask the Management of Pamana to shoulder half of the advertisement cost for their recruitment campaign. They shelled out their own resources to bolster their recruitment. They shared in the payment of the salaries of their secretaries. They gave cash incentives to their sales associates from their own pocket. These circumstances show that the Managing Associates were independent contractors, not employees, of Pamana.

ISSUES WON the existence of a boundary-hulog agreement negates the employer-employee relationship between the vendor and vendee

The appointment provided that Consulta must represent Pamana on an exclusive basis. She must not engage directly or indirectly in activities of other companies that compete with the business of Pamana. However, the fact that the appointment required Consulta to solicit business exclusively for Pamana did not mean that Pamana exercised control over the means and methods of Consulta’s work as the term control is understood in labor jurisprudence. Neither did it make Consulta an employee of Pamana. Pamana did not prohibit Consulta from engaging in any other business, or from being connected with any other company, for as long as the business or company did not compete with Pamana’s business.

HELD NO. Under the boundary-hulog scheme, a dual juridical relationship is created; that of employeremployee and vendor-vendee. The Kasanduan did not extinguish the employer employee relationship of the parties existing before the execution of said deed. a. Under this system the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising

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and regulatory authority, and the rules promulgated with regard to the business operations.

cooperative alleges that its owners-members own the cooperative, thus, no employer-employee relationship can arise between them.

b. The driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. Under the Kasunduan, respondent was required to remit Php 550 daily to petitioner, an amount which represented the boundary of petitioner as well as respondent’s partial payment (hulog) of the purchase price of the jeepney. Thus, the daily remittances also had a dual purpose: that of petitioner’s boundary and respondent’s partial payment (hulog) for the vehicle.

ISSUE WON an employer-employee relationship between Stanfilco and its owner-members

exists

HELD YES. An owner-member of a cooperative can be an employee of the latter and an employer-employee relationship can exist between them. a cooperative acquires juridical personality upon its registration with the Cooperative Development Authority. It has its Board of Directors, which directs and supervises its business; meaning, its Board of Directors is the one in charge in the conduct and management of its affairs. With that, a cooperative can be likened to a corporation with a personality separate and distinct from its owners-members. It is true that the Service Contracts executed between the respondent cooperative and Stanfilco expressly provide that there shall be no employer-employee relationship between the respondent cooperative and its owners-members. However, the existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract, when the terms and surrounding circumstances show otherwise. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. It is settled that the contracting parties may establish such stipulations, clauses, terms and conditions as they want, and their agreement would have the force of law between them. However, the agreed terms and conditions must not be contrary to law, morals, customs, public policy or public order. The Service Contract provision in question must be struck down for being contrary to law and public policy since it is apparently being used by the respondent cooperative merely to circumvent the compulsory coverage of its employees, who are also its ownersmembers, by the Social Security Law. The four elements in determining the existence of an employeremployee relationship are all present in this case. First. It is expressly provided in the Service Contracts that it is the respondent cooperative which has the exclusive discretion in the selection and engagement of the owners-members as well as its team leaders who will be assigned at Stanfilco. Second. the weekly stipends or the so-called shares in the service surplus given by the respondent cooperative to its ownersmembers were in reality wages, as the same were equivalent to an amount not lower than that prescribed by existing labor laws, rules and regulations, including the wage order applicable to the area and industry, they are also given to the owners-members as compensation in rendering services to respondent cooperative’s client, Stanfilco. Third .it is the respondent cooperative which has the power to investigate, discipline and remove the ownersmembers and its team leaders who were rendering

c. The obligation is not novated by an instrument that expressly recognizes the old one, changes only the terms of payment and adds other obligations not incompatible with the old provisions or where the contract merely supplements the previous one. d. The existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means and method of the work. The amount earned in excess of the “boundary hulog” is equivalent to wages and the fact that the power of dismissal was not mentioned in the Kasunduan did not mean that private respondent never exercised such power, or could not exercise such power. REPUBLIC v. ASIAPRO COOPERATIVE G.R. No. 172101, November 23, 2007, Chico Nazario Asiapro, as a cooperative, is composed of ownersmembers. Its primary objectives are to provide savings and credit facilities and to develop other livelihood services for its owners-members. In the discharge of the aforesaid primary objectives, respondent cooperative entered into several Service Contracts with Stanfilco. The owners-members do not receive compensation or wages from the respondent cooperative. Instead, they receive a share in the service surplus which Asiapro earns from different areas of trade it engages in, such as the income derived from the said Service Contracts with Stanfilco. In order to enjoy the benefits under the Social Security Law of 1997, the owners-members of Asiapro in Stanfilco requested the services of the latter to register them with SSS as self-employed and to remit their contributions as such. Petitioner SSS sent a letter to respondent cooperative informing the latter that based on the Service Contracts it executed with Stanfilco, Asiapro is actually a manpower contractor supplying employees to Stanfilco and so, it is an employer of its owners-members working with Stanfilco. Thus, Asiapro should register itself with petitioner SSS as an employer and make the corresponding report and remittance of premium contributions. Despite letters received, respondent cooperative continuously ignored the demand of petitioner SSS. Respondent

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services at Stanfilco. Fourth and most importantly, it is the respondent cooperative which has the sole control over the manner and means of performing the services under the Service Contracts with Stanfilco as well as the means and methods of work. All these clearly prove that, indeed, there is an employer-employee relationship between the respondent cooperative and its owners-members.

In a long line of decisions, the Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test, to wit: [1] the selection and engagement of the employee; [2] the payment of wages; [3] the power of dismissal; and [4] the power to control the employee’s conduct, or the socalled "control test", considered to be the most important element.

PHILIPPINE GLOBAL COMMUNICATIONS, INC. v. RICARDO DE VERA G.R. No. 157214, June 7, 2005

Applying the four-fold test to this case, we initially find that it was respondent himself who sets the parameters of what his duties would be in offering his services to petitioner. Evidence also shows that respondent PHILCOM did not have control over the schedule of the complainant as it [is] the complainant who is proposing his own schedule and asking to be paid for the same. This is proof that the complainant understood that his relationship with the respondent PHILCOM was a retained physician and not as an employee. If he were an employee he could not negotiate as to his hours of work.

Petitioner Philippine Global Communications, Inc. (PhilCom), is a corporation engaged in the business of communication services and allied activities, while respondent Ricardo De Vera is a physician by profession whom petitioner enlisted to attend to the medical needs of its employees. On May 15, 1981, De Vera offered his services to the petitioner, therein proposing his plan of works required of a practitioner in industrial medicine including checkup and treatment of employees, pre-employment physical and mental check-ups and holding clinic hours for consultation of employees. For this purpose they entered into a Retainership Agreement which will be for a period of one year subject to renewal. The retainership arrangement went on from 1981 to 1994 with changes in the retainer’s fee. However, for the years 1995 and 1996, renewal of the contract was only made verbally.

The complainant also admitted that his service for the respondent was covered by a retainership contract [which] was renewed every year from 1982 to 1994. The labor arbiter added the indicia, not disputed by respondent, that from the time he started to work with petitioner, he never was included in its payroll; was never deducted any contribution for remittance to the Social Security System (SSS); and was in fact subjected by petitioner to the ten (10%) percent withholding tax for his professional fee, in accordance with the National Internal Revenue Code, matters which are simply inconsistent with an employeremployee relationship.

In December 1996 when Philcom, thru a letterinformed De Vera of its decision to discontinue the latter’s "retainer’s contract with the Company because management has decided that it would be more practical to provide medical services to its employees through accredited hospitals near the company premises. De Vera filed a complaint for illegal dismissal before the National Labor Relations Commission (NLRC), alleging that that he had been actually employed by Philcom as its company physician since 1981 and was dismissed without due process. He averred that he was designated as a "company physician on retainer basis" for reasons allegedly known only to Philcom.

We note, too, that the power to terminate the parties’ relationship was mutually vested on both. Either may terminate the arrangement at will, with or without cause. Clearly, the elements of an employer-employee relationship are wanting in this case. We may add that the records are replete with evidence showing that respondent had to bill petitioner for his monthly professional fees. It simply runs against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to receive his salary.

The Labor Arbiter dismissed the complaint for lack of merit and held that De Vera was an “independent contractor” and that he was not dismissed instead his contract ended when it was not renewed. NLRC reversed and found De Vera to be a regular employee of the company and ordered him to be reinstated.

Finally, remarkably absent from the parties’ arrangement is the element of control, whereby the employer has reserved the right to control the employee not only as to the result of the work done but also as to the means and methods by which the same is to be accomplished. Petitioner had no control over the means and methods by which respondent went about performing his work at the company premises not to mention the fact that respondent’s work hours and the additional compensation were negotiated upon by the parties.In fine, the parties themselves practically agreed on every terms and conditions of respondent’s

ISSUE Whether an employer-employee relationship exists between petitioner and respondent HELD

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engagement, which thereby negates the element of control in their relationship.

as truck driver on October 25, 1984. As such, the petitioner was tasked to deliver the respondent companys products from its factory in Mariveles, Bataan, to its various customers, mostly in Metro Manila. The respondent company furnished the petitioner with a truck. Most of the petitioners delivery trips were made at nighttime, commencing at 6:00 p.m. from Mariveles, and returning thereto in the afternoon two or three days after. The deliveries were made in accordance with the routing slips issued by respondent company indicating the order, time and urgency of delivery. Initially, the petitioner was paid the sum of P350.00 per trip. 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.

COCA COLA BOTTLERS V. CLIMACO G.R. No. 146881, February 5, 2007, Azcuna Respondent was hired by petitioner as a company doctor; a retainership agreement renewable annually was signed pursuant thereto. For 3 consecutive years, the retainer agreement was signed annually. On the 4th year, the contract of respondent was not renewed yet the latter remained working for the petitioner. On later date, petitioner expressly told respondent that the former will no longer renew the retainership. ISSUE Whether or not respondent is an employee of petitioner.

ISSUE Whether or not there existed an employer-employee relationship between the respondent company and the petitioner

RULING No. The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called "control test," considered to be the most important element.

RULING YES. The elements to determine the existence of an employment relationship are: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employers power to control the employees conduct. The most important element is the employers control of the employees conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish it.All the four elements are present in this case. As earlier opined, of the four elements of the employer-employee relationship, the control test is the most important. Although the respondents denied that they exercised control over the manner and methods by which the petitioner accomplished his work, a careful review of the records shows that the latter performed his work as truck driver under the respondents supervision and control. Their right of control was manifested by the following attendant circumstances: 1. The truck driven by the petitioner belonged to respondent company; 2. There was an express instruction from the respondents that the truck shall be used exclusively to deliver respondent companys goods; 3. Respondents directed the petitioner, after completion of each delivery, to park the truck in either of two specific places only, to wit: at its office in Metro Manila at 2320 Osmea Street, Makati City or at BEPZ, Mariveles, Bataan; and 4. Respondents determined how, where and when the petitioner would perform his task by issuing to him gate passes and routing slips.

The Court agrees with the finding of the Labor Arbiter and the NLRC that the circumstances of this case show that no employer-employee relationship exists between the parties. The Labor Arbiter and the NLRC correctly found that petitioner company lacked the power of control over the performance by respondent of his duties. The Labor Arbiter reasoned that the Comprehensive Medical Plan, which contains the respondent’s objectives, duties and obligations, does not tell respondent "how to conduct his physical examination, how to immunize, or how to diagnose and treat his patients, employees of [petitioner] company, in each case." Considering that there is no employer-employee relationship between the parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the Agreement, does not constitute illegal dismissal of respondent. Consequently, there is no basis for the moral and exemplary damages granted by the Court of Appeals to respondent due to his alleged illegal dismissal. PEDRO CHAVEZ vs. NATIONAL LABOR RELATIONS COMMISSION, SUPREME PACKAGING, INC. and ALVIN LEE G.R. No. 146530. January 17, 2005

ANGELINA FRANCISCO v. NLRC G.R. 170087, August 31, 2006, Ynares-Santiago

The respondent company, Supreme Packaging, Inc., is in the business of manufacturing cartons and other packaging materials for export and distribution. It engaged the services of the petitioner, Pedro Chavez,

Petitioner was hired by Kasei Corporation during its incorporation stage.She reported for work regularly and served in various capacities as Accountant,

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vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Security contributions from August 1, 1999 to December 18, 2000.

Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement. XXX On October 15, 2001, petitioner asked for her salary from Acedo and the rest of the officers but she was informed that she is no longer connected with the company.

It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latter’s line of business. GREGORIO V. TONGKO vs. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS G.R. No. 167622, January 25, 2011, Brion

ISSUE Was there an employer-employee relationship between petitioner and private respondent Kasei Corporation?

TOPIC: Agency; Insurance Companies; Employeremployee relationships

HELD Yes. In certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker.

DOCTRINE: Control over the performance of the task of one providing service both with respect to the means and manner, and the results of the service is the primary element in determining whether an employment relationship exists.In the Supreme Courts June 29, 2010 Resolution of this case, they noted that there are built-in elements of control specific to an insurance agency, which do not amount to the elements of control that characterize an employment relationship governed by the Labor Code.The Insurance Code provides definite parameters in the way an agent negotiates for the sale of the companys insurance products, his collection activities and his delivery of the insurance contract or policy. They do not reach the level of control into the means and manner of doing an assigned task that invariably characterizes an employment relationship as defined by labor law.

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 work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity,such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business.

FACTS Taking from the November 2008 decision, the facts are as follows: Manufacturers Life Insurance, Co. is a domestic corporation engaged in life insurance business. De Dios was its President and Chief Executive Officer. Petitioner Tongko started his relationship with Manulife in 1977 by virtue of a Career Agent's Agreement. Pertinent provisions of the agreement state that: (this part is essential to determine relationship between Pet. and Res.) It is understood and agreed that the Agent is an independent contractor and nothing contained herein shall be construed or interpreted as creating an employer-employee relationship between the Company and the Agent. a) The Agent shall canvass for applications for Life Insurance, Annuities, Group policies and other products offered by the Company, and collect, in exchange for provisional receipts issued by the Agent, money due or to become due to the Company in respect of applications or policies obtained by or through the Agent or from policyholders allotted by the Company to the Agent for servicing, subject to subsequent confirmation of

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. By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check

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receipt of payment by the Company as evidenced by an Official Receipt issued by the Company directly to the policyholder. b) The Company may terminate this Agreement for any breach or violation of any of the provisions hereof by the Agent by giving written notice to the Agent within fifteen (15) days from the time of the discovery of the breach. No waiver, extinguishment, abandonment, withdrawal or cancellation of the right to terminate this Agreement by the Company shall be construed for any previous failure to exercise its right under any provision of this Agreement. c) Either of the parties hereto may likewise terminate his Agreement at any time without cause, by giving to the other party fifteen (15) days notice in writing.

standards of behavior rather than employer directives into how specific tasks are to be done. In sum, the Supreme Court found absolutely no evidence of labor law control. INTEL TECHNOLOGY PHILIPPINES, INC. v. NATIONAL LABOR RELATIONS COMMISSION AND JEREMIAS CABILES G.R. No. 200575, February 5, 2014, Mendoza Cabiles was initially hired by Intel Phil. on April 16, 1997 as an Inventory Analyst. He was subsequently promoted several times over the years and was also assigned at Intel Arizona and Intel Chengdu. He later applied for a position at Intel Semiconductor Limited Hong Kong (Intel HK). In a letter dated December 12, 2006, Cabiles was offered the position of Finance Manager by Intel HK. Before accepting the offer, he inquired from Intel Phil., through an email, the consequences of accepting the newly presented opportunity in Hong Kong, particularly his retirement benefits. He will celebrate his 10th year of service with Intel on April 16, 2007. However, he will be moving to Hong Kong as a local hire starting February 1. On January 23, 2007, Intel Phil., through Penny Gabronino (Gabronino), stated that he is not entitled to receive his entitlement benefit.

De Dios sent Tongko a letter of termination(for inability to push for company development and growth) in accordance with Tongko's Agents Contract. Tongko filed a complaint with the NLRC against Manulife for illegal dismissal, alleging that he had an employeremployee relationship with De Dios instead of a revocable agency by pointing out that the latter exercised control over him through directives regarding how to manage his area of responsibility and setting objectives for him relating to the business. Tongko also claimed that his dismissal was without basis and he was not afforded due process.

On January 31, 2007, Cabiles signed the job offer.8OCabiles executed a Release, Waiver and Quitclaim (Waiver) in favor of Intel Phil. acknowledging receipt of P165,857.62 as full and complete settlement of all benefits due him by reason of his separation from Intel Phil. On September 8, 2007, after seven (7) months of employment, Cabiles resigned from Intel HK.

ISSUE Whether there is an employer-employee relationship HELD No Employer-Employee Relationship.The Supreme Court ruled petitioners Motion against his favor since he failed to show that the control Manulife exercised over him was the control required to exist in an employer-employee relationship; Manulifes control fell short of this norm and carried only the characteristic of the relationship between an insurance company and its agents, as defined by the Insurance Code and by the law of agency under the Civil Code.

On August 18, 2009, Cabiles filed a complaint for nonpayment of retirement benefits and for moral and exemplary damages with the NLRC Regional Arbitration Branch-IV. He insisted that he was employed by Intel for 10 years and 5 months from April 1997 to September 2007 – a period which included his seven (7) month stint with Intel HK. Thus, he believed he was qualified to avail of the benefits under the company’s retirement policy allowing an employee who served for 10 years or more to receive retirement benefits.

To reiterate, guidelines indicative of labor law "control" do not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means and methods to be employed in attaining the result. Tested by this norm, Manulifes instructions regarding the objectives and sales targets, in connection with the training and engagement of other agents, are among the directives that the principal may impose on the agent to achieve the assigned tasks.They are targeted results that Manulife wishes to attain through its agents. Manulifes codes of conduct, likewise, do not necessarily intrude into the insurance agents means and manner of conducting their sales. Codes of conduct are norms or

On March 18, 2010, the LA ordered Intel Phil. together with Grace Ong, Nida delos Santos, Gabronino, and Pia Viloria, to pay Cabiles the amount of HKD 419,868.77 or its peso equivalent as retirement pay with legal interest and attorney’s fees. The LA held that Cabiles did not sever his employment with Intel Phil. when he moved to Intel HK, similar to the instances when he was assigned at Intel Arizona and Intel Chengdu.

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Aggrieved, Intel Phil. elevated the case to the CA via a petition for certiorari with application for a Temporary Restraining Order (TRO) on April 5, 2011. The application for TRO was denied. Earlier, on September 19, 2011, pending disposition of the petition before the CA, the NLRC issued a writ of execution14 against Intel Phil. As ordered by the NLRC, Intel Phil. satisfied the judgment on December 13, 2011 by paying the amount ofP3,201,398.60 which included the applicable withholding taxes due and paid to the Bureau of Internal Revenue. Cabiles received a net amount of P2,485,337.35, covered by the Bank of the Philippine Islands Manager’s Check No. 0000000806.16 By reason thereof, Intel Phil. filed on December 21, 2011 a Supplement to the Petition for Certiorari17 praying, in addition to the reliefs sought in the main, that the CA order the restitution of all the amounts paid by them pursuant to the NLRC’s writ of execution, dated September 19, 2011.

The Court, however, is again not convinced. The continuity, existence or termination of an employeremployee relationship in a typical secondment contract or any employment contract for that matter is measured by the following yardsticks:1. the selection and engagement of the employee;2. the payment of wages;3. the power of dismissal; and4. the employer’s power to control the employee’s conduct.28 As applied, all of the above benchmarks ceased upon Cabiles’ assumption of duties with Intel HK on February 1, 2007. Intel HK became the new employer. It provided Cabiles his compensation. Cabiles then became subject to Hong Kong labor laws, and necessarily, the rights appurtenant thereto, including the right of Intel HK to fire him on available grounds. Lastly, Intel HK had control and supervision over him as its new Finance Manager. Evidently, Intel Phil. no longer had any control over him. Hence, Cabiles’ theory of secondment must fail.

ISSUE WON Cabiles had completed the required 10 year continuous service21 with Intel Phil., thus, qualifying him for retirement benefits.

What distinguishes Intel Chengdu and Intel Arizona from Intel HK is the lack of intervention of Intel Phil. on the matter. In the two previous transfers, Intel Phil. remained as the principal employer while Cabiles was on a temporary assignment. By virtue of which, it still assumed responsibility for the payment of compensation and benefits due him. The assignment to Intel HK, on the other hand, was a permanent transfer and Intel Phil. never participated in any way in the process of his employment there. It was Cabiles himself who took the opportunity and the risk. If it were indeed similar to Intel Arizona and Intel Chengdu assignments, Intel Philippines would have had a say in it. Petition granted.

RULING Resignation is the formal relinquishment of an office,24 the overt act of which is coupled with an intent to renounce. This intent could be inferred from the acts of the employee before and after the alleged resignation.25 In this case, Cabiles, while still on a temporary assignment in Intel Chengdu, was offered by Intel HK the job of a Finance Manager. In contemplating whether to accept the offer, Cabiles wrote Intel Phil. providing details and asked about the retirement benefits. Despite a non-favorable reply as to his retirement concerns, Cabiles still accepted the offer of Intel HK.

MATLING INDUSTRIAL & COMMERCIAL CORPORATION V. RICARDO COROS G.R. No. 157802, October 1, 2010

His acceptance of the offer meant letting go of the retirement benefits he now claims as he was informed through email correspondence that his 9.5 years of service with Intel Phil. would not be rounded off in his favor. He, thus, placed himself in this position, as he chose to be employed in a company that would pay him more than what he could earn in Chengdu or in the Philippines. The choice of staying with Intel Phil. vis-à-vis a very attractive opportunity with Intel HK put him in a dilemma.

Doctrine: For a position to be considered as a corporate office, or, for that matter, for one to be considered as a corporate officer, the position must, if not listed in the by-laws, have been created by the corporation's board of directors, and the occupant thereof appointed or elected by the same board of directors or stockholders. - The criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office.

Cabiles views his employment in Hong Kong as an assignment or an extension of his employment with Intel Phil. He cited as evidence the offer made to him as well as the letter, dated January 8, 2007,27 both of which used the word "assignment" in reference to his engagement in Hong Kong as a clear indication of the alleged continuation of his ties with Intel Phil. The foregoing arguments of Cabiles, in essence, speak of the "theory of secondment."

- The determination of whether the dismissed officer was a regular employee or corporate officer unravels the conundrum” of whether a complaint for illegal dismissal is cognizable by the Labor Arbiter or by the RTC. “In case of the regular employee, the LA has

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jurisdiction; otherwise, the RTC exercises the legal authority to adjudicate.

that matter, for one to be considered as a corporate officer, the position must, if not listed in the by-laws, have been created by the corporation's board of directors, and the occupant thereof appointed or elected by the same board of directors or stockholders. This is the implication of the ruling in Tabang v. National Labor Relations Commission, which reads:

FACTS After respondent Ricardo Coros’ dismissal by Matling as its Vice President for Finance and Administration, he filed on August 10, 2000 a complaint for illegal suspension and illegal dismissal against Matling and some of its corporate officers in the NLRC, SubRegional Arbitration Branch XII, Iligan City.

The president, vice president, secretary and treasurer are commonly regarded as the principal or executive officers of a corporation, and modern corporation statutes usually designate them as the officers of the corporation. However, other offices are sometimes created by the charter or by-laws of a corporation, or the board of directors may be empowered under the by-laws of a corporation to create additional offices as may be necessary.

The petitioners moved to dismiss the complaint, raising the ground, among others, that the complaint pertained to the jurisdiction of the Securities and Exchange Commission due to the controversy being intracorporate inasmuch as the respondent was a member of Matling’s Board of Directors aside from being its Vice-President for Finance and Administration prior to his termination.

It has been held that an 'office' is created by the charter of the corporation and the officer is elected by the directors or stockholders. On the other hand, an 'employee' usually occupies no office and generally is employed not by action of the directors or stockholders but by the managing officer of the corporation who also determines the compensation to be paid to such employee.

The respondent opposed the petitioners’ motion to dismiss, insisting that his status as a member of Matling’s Board of Directors was doubtful, considering that he had not been formally elected as such; that he did not own a single share of stock in Matling, considering that he had been made to sign in blank an undated endorsement of the certificate of stock he had been given in 1992; that Matling had taken back and retained the certificate of stock in its custody; and that even assuming that he had been a Director of Matling, he had been removed as the Vice President for Finance and Administration, not as a Director, a fact that the notice of his termination dated April 10, 2000 showed.

This ruling was reiterated in the subsequent cases of Ongkingco v. National Labor Relations Commission and De Rossi v. National Labor Relations Commission. The position of vice-president for administration and finance, which Coros used to hold in the corporation, was not created by the corporation’s Board of Directors but only by its president or executive vicepresident pursuant to the by-laws of the corporation. Moreover, Coros’ appointment to said position was not made through any act of the board of directors or stockholders of the corporation. Consequently, the position to which Coros was appointed and later on removed from, is not a corporate office despite its nomenclature, but an ordinary office in the corporation. Coros alleged illegal dismissal therefrom is, therefore, within the jurisdiction of the labor arbiter.

On October 16, 2000, the Labor Arbiter granted the petitioners’ motion to dismiss, ruling that the respondent was a corporate officer. On March 13, 2001, the NLRC set aside the dismissal, concluding that the respondent’s complaint for illegal dismissal was properly cognizable by the Labor Arbiter not by the SEC, because he was not a corporate officer by virtue of his position in Matling, albeit high ranking and managerial, not being among the positions listed in Matling’s Constitution and by-laws.

MR was likewise denied.Hence this petition for review on certiorari.

On motion for reconsideration, petitioners submitted a certified machine copies of Matling’s Amended Articles of Incorporation and By-laws to prove that the President of Matling was thereby granted “full power to create new offices and appoint the officers thereto” and the minutes of special meeting held on June 7, 1999 by Matling’s Board of Directors to prove that the respondent was, indeed, a Member of the Board of Directors. Nonetheless, the NLRC denied the petitioners’ motion for Reconsideration. The petitioners elevated the issue to the CA by petition for Certiorari.

ISSUE Whether or not respondent was a corporate officer of Matling Industrial and Commercial Corporation. - NO RULING Conformably with Section 25 of the Corporation Code, a position must be expressly mentioned inthe by-laws in order to be considered as a corporate office. Thus, the creation of anoffice pursuant to or under a by-law enabling provision is not enough to make aposition a corporate office. Guerrea vs Lezama, the first ruling on the matter, heldthat the only officers of a

The CA dismissed the petition for certiorari. For a position to be considered as a corporate office, or, for

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corporation were those given that character either by the Corporation Code or by the by-laws; the rest of the corporate officers could beconsidered only as employees or subordinate officials.

stockholder had any relation at all to his appointment and subsequent dismissal as Vice President for Finance and Administration. Even though he might have become a stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and Administration in 1987 was by virtue of the length of quality service he had rendered as an employee of Matling. His subsequent acquisition of the status of Director/stockholder had no relation to his promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from employment as Vice President for Finance and Administration.

It is relevant to state in this connection that the SEC, the primary agencyadministering the Corporation Code, adopted a similar interpretation of Section 25of the Corporation Code in its Opinion dated November 25, 1993, to wit: Thus, pursuant to Section 25 of the Corporation Code, whoever are the corporateofficers enumerated in the By-laws are the exclusive officers of the corporation andthe Board has no power to create other offices without amending first the corporateBy-laws. However, the Board may create appointive positions other than thepositions of corporate officers, but the persons occupying such positions are notconsidered as corporate officers within the meaning of Section 25 of the CorporationCodeand are not empowered to exercise the functions of the corporate officers, except those functions lawfully delegated to them. Their functions and duties are tobe determined by the Board of Directors/Trustees.

CA’s decision is affirmed. Coros was an employee, Labor Arbiter has jurisdiction on the illegal dismissal case. RAUL C. COSARE v. BROADCOM ASIA, INC. and DANTE AREVALO G.R. No. 201298, February 5, 2014, Reyes Petitioner Cosare claims that he was the Assistant Vice President for Sales (AVP for Sales) and Head of the Technical Coordination for Respondent Corporation. Sometime in 2003, one Alex Abiog was appointed as Vice President for Sales, becoming his immediate superior. Petitioner informed Arevalo, being President, of certain anomalies Abiog was involved. Petitioner was then furnished a memo, whereby he was given forty-eight (48) hours from date to present his explanation on the charges of irregularities. Petitioner was totally barred from entering company premises and to wait outside for further instructions, but no instructions were given until 8PM. Petitioner now files with LA complaint for constructive dismissal.

Moreover, the Board of Directors of Matling could not validly delegate the power tocreate a corporate office to the President, in light of Section 25 of the CorporationCode requiring the Board of Directors itself to elect the corporate officers. Verily,the power to elect the corporate officers was a discretionary power that the law exclusively vested in the Board of Directors, and could not be delegated tosubordinate officers or agents. The office of Vice President for Finance andAdministration created by Matling’s President pursuant to By-law No. V was anordinary, not a corporate, office.

ISSUE Was Petitioner constructively dismissed?

To emphasize, the power to create new offices and the power to appoint the officersto occupy them vested by By-law No. V merely allowed Matling’s President tocreate non-corporate offices to be occupied by ordinary employees of Matling. Suchpowers were incidental to the President’s duties as the executive head of Matling toassist him in the daily operations of the business.

HELD YES. “The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear as if it were not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.” “It is clear from the cited circumstances that the respondents already rejected Cosare’s continued involvement with the company. Even their refusal to accept the explanation which Cosare tried to tender on April 2, 2009 further evidenced the resolve to deny Cosare of the opportunity to be heard prior to any decision on the termination of his employment. The respondents allegedly refused acceptance of the explanation as it was filed beyond the mere 48-hour

The criteria for distinguishing between corporate officers who may be ousted from office at will, on one hand, and ordinary corporate employees who may only be terminated for just cause, on the other hand, do not depend on the nature of the services performed, but on the manner of creation of the office. In the respondents case, he was supposedly at once an employee, a stockholder, and a Director of Matling. The circumstances surrounding his appointment to office must be fully considered to determine whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. We must also consider whether his status as Director and

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period which they granted to Cosare under the memo dated March 30, 2009. However, even this limitation was a flaw in the memo or notice to explain which only further signified the respondents’ discrimination, disdain and insensibility towards Cosare, apparently resorted to by the respondents in order to deny their employee of the opportunity to fully explain his defenses and ultimately, retain his employment.”

The CA correctly recognized the authenticity of the operational documents, for the failure of Atlanta to raise a challenge against these documents before the labor arbiter, the NLRC and the CA itself. The appellate court, thus, found the said documents sufficient to establish the employment of the respondents before their engagement as apprentices.

“In sum, the respondents were already resolute on a severance of their working relationship with Cosare, notwithstanding the facts which could have been established by his explanations and the respondents’ full investigation on the matter. In addition to this, the fact that no further investigation and final disposition appeared to have been made by the respondents on Cosare’s case only negated the claim that they actually intended to first look into the matter before making a final determination as to the guilt or innocence of their employee. This also manifested from the fact that even before Cosare was required to present his side on the charges of serious misconduct and willful breach of trust, he was summoned to Arevalo’s office and was asked to tender his immediate resignation in exchange for financial assistance.”

The fact that Sebolino and the three others were already rendering service to the company when they were made to undergo apprenticeship (as established by the evidence) renders the apprenticeship agreements irrelevant as far as the four are concerned. This reality is highlighted by the CA finding that the respondents occupied positions such as machine operator, scaleman and extruder operator tasks that are usually necessary and desirable in Atlanta's usual business or trade as manufacturer of plastic building materials. These tasks and their nature characterized the four as regular employees under Article 280 of the Labor Code.Thus, when they were dismissed without just or authorized cause, without notice, and without the opportunity to be heard, their dismissal was illegal under the law. REPUBLIC V. ASIAPRO COOPERATIVE G.R. No. 172101, November 23, 2007

ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN v. APRILITO R. SEBOLINO, KHIM V. COSTALES, ALVIN V. ALMONTE, and JOSEPH H. SAGUN G.R. No. 187320, January 26, 2011, Brion

Under the respondent’s by-laws, owners-members are of two categories, to wit: (1) regular member, who is entitled to all the rights and privileges of membership; and (2) associate member, who has no right to vote and be voted upon and shall be entitled only to such rights and privileges provided in its by-laws. In the discharge of the aforesaid primary objectives, respondent cooperative entered into several Service Contracts. The owners-members do not receive compensation or wages from the respondent cooperative but instead they receive a share in the service surplus which the respondent cooperative earns from different areas of trade it engages in, such as the income derived from the said Service Contracts with Stanfilco. The owners-members get their income from the service surplus generated by the quality and amount of services they rendered. In order to enjoy the benefits under the Social Security Law of 1997, the owners-members of the respondent cooperative, who were assigned to Stanfilco requested the services of the latter to register them with petitioner SSS as selfemployed and to remit their contributions as such. Petitioner SSS said that based on the Service Contracts it executed with Stanfilco, respondent cooperative is actually a manpower contractor supplying employees to Stanfilco and for that reason, it is an employer of its owners-members working with Stanfilco. Thus, respondent cooperative should register itself with petitioner SSS as an employer and make the corresponding report and remittance of premium contributions in accordance with the Social Security Law of 1997. On 9 October 2002, respondent

Sebolino et al. filed several complaints for illegal dismissal, regularization, underpayment, nonpayment of wages and other money claims as well as damages. They alleged that they had attained regular status as they were allowed to work with Atlanta for more than six (6) months from the start of a purported apprenticeship agreement between them and the company. They claimed that they were illegally dismissed when the apprenticeship agreement expired. In defense, Atlanta and Chan argued that the workers were not entitled to regularization and to their money claims because they were engaged as apprentices under a government-approved apprenticeship program. The company offered to hire them as regular employees in the event vacancies for regular positions occur in the section of the plant where they had trained. They also claimed that their names did not appear in the list of employees (Master List) prior to their engagement as apprentices. ISSUE Whether or not Sebolinoet. al. attained status of regular employees and were illegally dismissed HELD YES. The petition is unmeritorious.

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cooperative, through its counsel, sent a reply to petitioner SSSs letter asserting that it is not an employer because its owners-members are the cooperative itself; hence, it cannot be its own employer.

control test is the most important. In the case at bar, it is the respondent cooperative which has the sole control over the manner and means of performing the services under the Service Contracts with Stanfilco as well as the means and methods of work. Also, the respondent cooperative is solely and entirely responsible for its owners-members, team leaders and other representatives at Stanfilco. All these clearly prove that, indeed, there is an employer-employee relationship between the respondent cooperative and its owners-members.

ISSUE Whether or not there is an employer-employee relationship between [respondent cooperative] and its [owners-members]. HELD Yes. In determining the existence of an employeremployee relationship, the following elements are considered: (1) the selection and engagement of the workers; (2) the payment of wages by whatever means; (3) the power of dismissal; and (4) the power to control the workers conduct, with the latter assuming primacy in the overall consideration.The most important element is the employer’s control of the employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods to accomplish. The power of control refers to the existence of the power and not necessarily to the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is enough that the employer has the right to wield that power. All the aforesaid elements are present in this case. First. It is expressly provided in the Service Contracts that it is the respondent cooperative which has the exclusive discretion in the selection and engagement of the owners-members as well as its team leaders who will be assigned at Stanfilco. Second. Wages are defined as remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained, on a time, task, piece or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for service rendered or to be rendered. In this case, the weekly stipends or the so-called shares in the service surplus given by the respondent cooperative to its owners-members were in reality wages, as the same were equivalent to an amount not lower than that prescribed by existing labor laws, rules and regulations, including the wage order applicable to the area and industry; or the same shall not be lower than the prevailing rates of wages. It cannot be doubted then that those stipends or shares in the service surplus are indeed wages, because these are given to the owners-members as compensation in rendering services to respondent cooperatives client, Stanfilco. Third. It is also stated in the abovementioned Service Contracts that it is the respondent cooperative which has the power to investigate, discipline and remove the owners-members and its team leaders who were rendering services at Stanfilco.Fourth. As earlier opined, of the four elements of the employer-employee relationship, the

PHILIPPINE AIRLINES V. LIGAN GR 146408, February 29, 2008, Carpio Morales Petitioner Philippine Airlines as Owner, and Synergy Services Corporation (Synergy) as Contractor, entered into an Agreementwhereby Synergy undertook to provide loading, unloading, delivery of baggage and cargo and other related services to and from [petitioner]'s aircraft at the MactanStation.The Agreement specified the CONTRACTOR shall furnish all the necessary capital, workers, loading, unloading and delivery materials, facilities, supplies, equipment and tools. And it expressly provided that Synergy was "an independent contractor and . . . that there would be no employer-employee relationship between CONTRACTOR and/or its employees on the one hand, and OWNER, on the other." Respondents, who appear to have been assigned by Synergy to petitioner filedcomplaints before the NLRC Regional Office VII at Cebu City against petitioner, Synergy and their respective officials for underpayment, non-payment of premium pay for holidays, premium pay for rest days, serviceincentive leave pay, 13th month pay and allowances, and for regularization of employment status with petitioner, they claiming to be "performing duties for the benefit of petitioner since their job is directly connected with its business. Labor Arbiter Dominador Almirante found Synergy an independent contractor and dismissed respondents' complaint for regularization against petitioner, but granted their money claims. ISSUE Whether Synergy is a mere job-only contractor or a legitimate contractor? RULING Synergy is a mere job-only contractor. Section 5.Prohibition against labor-only contracting. Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following elements are [sic] present: (i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed and the employees recruited, supplied or placed by such

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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 over the performance of the work of the contractual employee. (Emphasis, underscoring and capitalization supplied) Even if only one of the two elements is present then, there is labor-only contracting. The control test element under the immediately-quoted paragraph echoes the prevailing jurisprudential trend elevating such element as a primary determinant of employer-employee relationship in job contracting agreements.

subject to the control of the employer, except only as to the results of the work. In legitimate labor contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor, only for the payment of the employees wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. The Contract of Services between SMC and Sunflower shows that the parties clearly disavowed the existence of an employer-employee relationship between SMC and private respondents. The language of a contract is not, however, determinative of the parties relationship; rather it is the totality of the facts and surrounding circumstances of the case.A party cannot dictate, by the mere expedient of a unilateral declaration in a contract, the character of its business, i.e., whether as labor-only contractor or job contractor, it being crucial that its character be measured in terms of and determined by the criteria set by statute.

Petitioner in fact admitted that it fixes the work schedule of respondents as their work was dependent on the frequency of plane arrivals. And as the NLRC found, petitioner's managers and supervisors approved respondents' weekly work assignments and respondents and other regular PAL employees were all referred to as "station attendants" of the cargo operation and airfreight services of petitioner. Respondents having performed tasks which are usually necessary and desirable in the air transportation business of petitioner, they should be deemed its regular employees and Synergy as a laboronly contractor.

Furthermore, what appears is that Sunflower does not have substantial capitalization or investment in the form of tools, equipment, machineries, work premises and other materials to qualify it as an independent contractor. On the other hand, it is gathered that the lot, building, machineries and all other working tools utilized by private respondents in carrying out their tasks were owned and provided by SMC. from the job description provided by SMC itself, the work assigned to private respondents was directlyrelated to the aquaculture operations of SMC. Undoubtedly, the nature of the work performed by private respondents in shrimp harvesting, receiving and packing formed an integral part of the shrimp processing operations of SMC. As for janitorial and messengerial services, that they are considered directly related to the principal business of the employerhas been jurisprudentially recognized.

SAN MIGUEL CORPORATION V. ABALLA G.R. No. 149011, June 28, 2005, Carpio Morales San Miguel Corporation entered into a contract of services with Sunflower Cooperative for the rendition of Messengerial, Janitorial, Shrimp Harvesting, Sanitation, Washing, Cold Storage activities. Pertinent provisions of the contract involve: 1. The cooperative employs the necessary personnel and provides adequate equipment, materials, tools and apparatus; 2. The cooperative has the entire charge, control and supervision of the work and services; 3. No employment relationship exists between the SMC and the cooperative; 4. The cooperative undertakes to pay the salary of the member-workers; 5. Unless sooner terminated, the contract will be deemed renewed on a month-to-month basis until terminated. Several employees were engaged by sunflower cooperative. Soon, such employees demanded recognition as regular employees of SMC, alleging that they are under the direct control and supervision of SMC supervisors.

Furthermore, Sunflower did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, SMC, its apparent role having been merely to recruit persons to work for SMC. MERALCO INDUSTRIAL ENGINEERING SERVICES V. NLRC G.R. 145402, March 14, 2008, Chico-Nazario

ISSUE Does direct control and supervision of the Principal Contractee convert Job Contractng into LO contracting?

Meralco and the private respondent executed a contractwhere the latter would supply the petitioner janitorial services,which include labor, materials, tools and equipment, as well assupervision of its assigned employees, at Meralco’s RockwellThermal Plant in Makati City.The 49 employees lodged a Complaint for illegaldeduction, underpayment, non-payment of

RULING: Yes. The test to determine the existence of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own methods and without being

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overtime pay, legalholiday pay, premium pay for holiday and rest day and nightdifferentials against the private respondent before the LA. By virtue of RA 6727, the contract between Meralco andthe private respondent was amended to increase the minimumdaily wage per employee. 2 months after the amendment of thecontract, Meralco sent a letter to private respondent informingthem that at the end of business hours of Jan. 31, 1990, it wouldbe terminating contract entered into with the privaterespondents. On the said date, the complainants were pulled outfrom their work. The complainants amended their complaint toinclude the charge of illegal dismissal and to implead Meralco asa party respondent.The LA dismissed the complaint. On appeal, the NLRCaffirmed the decision of the LA with the modification that Meralcowas solidarily liable with the private respondents. The CA on theother hand, modified the Decision of the NLRC and held Meralcoto be solidarily liable with the private respondent for thesatisfaction of the laborer’s separation pay.

(AFSISI) and MERALCO took effect, terminating the previous security service agreement with ASDAI. Except as to the number of security guards, the amount to be paid the agency, and the effectivity of the agreement, the terms and conditions were substantially identical with the security service agreement with ASDAI. The individual respondents amended their complaint to implead AFSISI as party respondent and to allege that AFSISI terminated their services on August 6, 1992 without notice and just cause and therefore guilty of illegal dismissal. For the first time in appeal before the Court of Appeals, the individual respondents alleged that MERALCO is their employer

ISSUE Whether Meralco should be liable for the payment of the dismissed laborer’s separation pay

HELD (1) NO. The individual respondents cannot be considered as regular employees of the MERALCO for, although security services are necessary and desirable to the business of MERALCO, it is not directly related to its principal business and may even be considered unnecessary in the conduct of MERALCO’s principal business, which is the distribution of electricity.

ISSUES 1. Whether or not the individual respondents are regular employees of MERALCO 2. Whether or not MERALCO is their employer 3. Whether or not MERALCO can be held solidarily liable with AFSISI

RULING The CA used Art. 109 of the Labor Code to holdMeralcosolidarily liable with the private respondent as regard tothe payment of separation pay. However, the SC ruled that Art.109 should be read in relation to Art. 106 and 107 of the LC.Thus, an indirect employer can only be held liable with theindependent contractor or subcontractor in the event that thelatter fails to pay the wages of its employees. While it is true thatthe petitioner was the indirect employer of the complainants, itcannot be held liable in the same way as the employer in everyrespect. Meralco may be considered an indirect employer onlyfor purposes of unpaid wages.

(2) NO. As to the provision in the agreement that MERALCO reserved the right to seek replacement of any guard whose behavior, conduct or appearance is not satisfactory, such merely confirms that the power to discipline lies with the agency. It is a standard stipulation in security service agreements that the client may request the replacement of the guards to it. Service-oriented enterprises, such as the business of providing security services, generally adhere to the business adage that "the customer or client is always right" and, thus, must satisfy the interests, conform to the needs, and cater to the reasonable impositions of its clients. Neither is the stipulation that the agency cannot pull out any security guard from MERALCO without its consent an indication of control. It is simply a security clause designed to prevent the agency from unilaterally removing its security guards from their assigned posts at MERALCO’s premises to the latter’s detriment.

MANILA ELECTRIC COMPANY v. ROGELIO BENAMIRA G.R. No. 145271, July 14, 2005, Austria-Martinez The individual respondents are licensed security guards formerly employed by People’s Security, Inc. (PSI) and deployed as such at MERALCO’s head office. On November 30, 1990, the security service agreement between PSI and MERALCO was terminated. Thereafter, fifty-six of PSI’s security guards, including herein eight individual respondents, filed a complaint for unpaid monetary benefits against PSI and MERALCO. Meanwhile, the security service agreement between respondent Armed Security & Detective Agency, Inc., (ASDAI) and MERALCO took effect on December 1, 1990. Subsequently, the individual respondents were absorbed by ASDAI and retained at MERALCO’s head office. On July 25, 1992, the security service agreement between respondent Advance Forces Security & Investigation Services, Inc.

The clause that MERALCO has the right at all times to inspect the guards of the agency detailed in its premises is likewise not indicative of control as it is not a unilateral right. The agreement provides that the agency is principally mandated to conduct inspections, without prejudice to MERALCO’s right to conduct its own inspections.

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(3) YES. The fact that there is no actual and direct employer-employee relationship between MERALCO and the individual respondents does not exonerate MERALCO from liability as to the monetary claims of the individual respondents. When MERALCO contracted for security services with ASDAI as the security agency that hired individual respondents to work as guards for it, MERALCO became an indirect employer of individual respondents pursuant to Article 107 of the Labor Code. When ASDAI as contractor failed to pay the individual respondents, MERALCO as principal becomes jointly and severally liable for the individual respondents’ wages, under Articles 106 and 109 of the Labor Code

employer of the respondents, with CAMPCO acting only as the agent or intermediary of petitioner. In 1993, when CAMPCO wasestablished and the Service Contract between petitioner and CAMPCO was entered into, CAMPCO onlyhad P6,600.00 paid-up capital, which could hardly be considered substantial. (Refer to the Doctrine mentioned above, which is a stronger indication about the labor-only contracting) ALVIADO v. PROCTER & GAMBLE PHILS., INC. G.R. No. 160506, March 9, 2010, Del Castillo Petitioners worked as merchandisers of P&G. They all individually signed employment contracts with either Promm-Gem or SAPS for periods of more or less five months at a time.They were assigned at different outlets, supermarkets and stores where they handled all the products of P&G. They received their wages from Promm-Gem or SAPS. Subsequently, petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits with damages. The complaint was later amendedto include the matter of their subsequent dismissal. The Labor Arbiter dismissed the complaint for lack of merit and ruled that there was no employer-employee relationship between petitioners and P&G. He found that the selection and engagement of the petitioners, the payment of their wages, the power of dismissal and control with respect to the means and methods by which their work was accomplished, were all done and exercised by Promm-Gem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job contractors. On appeal to the NLRC, it affirmed the decision of the LA.

ASDAI is held liable by virtue of its status as direct employer, while MERALCO is deemed the indirect employer of the individual respondents for the purpose of paying their wages in the event of failure of ASDAI to pay them. This statutory scheme gives the workers the ample protection consonant with labor and social justice provisions of the 1987 Constitution. However, this is without prejudice to the right of reimbursement. DOLE PHILIPPINES vs. ESTEVA G.R. No. 161115, November 30, 2006 Doctrine: CAMPCO, the alleged contractor, did not carry out an independent business from petitioner. It was precisely established to render services to petitioner to augment its workforce during peak seasons. Petitionerwas its only client. Even as CAMPCO had its own office and office equipment, these were mainly usedfor administrative purposes; the tools, machineries, and equipment actually used by CAMPCOmembers when rendering services to the petitioner belonged to the latter. This is indicative of a labor-only contracting.

ISSUE Whether or not the respondent is the employer of the petitioner.

Dole Philippines and CAMPCO entered into a Service Agreement. Respondents argued that they should be considered regular employees of petitioner given that: 1.they were performing jobs that were usually necessary and desirable in the usual business of petitioner; 2. petitioner exercised control over respondents, not only as to the results, but also as tothe manner by which they performed their assigned tasks; and 3. CAMPCO, a labor-only contractor,was merely a conduit of petitioner. As regular employees of petitioner, respondents asserted that theywere entitled to security of tenure and those placed on “stay home status” for more than six monthshad been constructively and illegally dismissed.

HELD In order to determine whether P&G is the employer of petitioners, it is necessary to first determine whether Promm-Gem and SAPS are labor-only contractors or legitimate job contractors. 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, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. The Court held that Promm-Gem cannot be regarded as labor-only contractor but a legitimate independent contractor because the financial statement of Promm-Gem shows that it has authorized capital stock of P1 million and a paid-in capital, or capital available for operations, of P500,000.00 as of 1990.

ISSUE Whether or not CAMPCO is a legitimate contractor and if no, whether or not DOLE is liable as direct employer RULING NO. CAMPCO was a labor-only contractor and, thus, petitioner is the real

On the other hand, the Articles of Incorporation of SAPS shows that it has a paid-in capital of only P31,

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250.00. There is no other evidence presented to show how much its working capital and assets are. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, the court held that SAPS is engaged in "labor-only contracting". The contractor is 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.

its implementing rules. To reiterate, no evidence or argument questions the company’s basic objective of achieving greater economy and efficiency of operations. This, to our mind, goes a long way to negate the presence of bad faith. No evidence likewise stands before us showing that the outsourcing has resulted in a reduction of work hours or the splitting of the bargaining unit effects that under the implementing rules of Article 106 of the Labor Code can make a contracting arrangement illegal. NO. It is in the appreciation of these forwarder services as one whole package of inter-related services that we discern a basic misunderstanding that results in the error of equating the functions of the forwarders employees with those of regular rank-and-file employees of the company. A clerical job, for example, may similarly involve typing and paper pushing activities and may be done on the same company products that the forwarders employees and company employees may work on, but these similarities do not necessarily mean that all these employees work for the company. The regular company employees, to be sure, work for the company under its supervision and control, but forwarder employees work for the forwarder in the forwarders own operation that is itself a contracted work from the company. The company controls its employees in the means, method and results of their work, in the same manner that the forwarder controls its own employees in the means, manner and results of their work. Complications and confusion result because the company at the 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.

TEMIC AUTOMOTIVE PHILIPPINES, INC. v. TEMIC AUTOMOTIVE PHILIPPINES, INC. EMPLOYEES UNION-FFW G.R. No. 186965, December 23, 2009, Brion Since 1998, the petitioner contracts out some of the work in the warehouse department, specifically those in the receiving and finished goods sections, 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. This outsourcing arrangement gave rise to a union grievance on the issue of the scope and coverage of the collective bargaining unit, specifically to the question of whether or not the functions of the forwarders employees are functions being performed by the regular rank-and-file employees covered by the bargaining unit. The union thus demanded that the forwarders' employees be absorbed into the petitioner's regular employee force and be given positions within 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

COCA-COLA BOTTLERS PHILS., INC. vs. ALAN M. AGITO, et al GR No. 179546, February 13, 2009

ISSUE 1. Whether or not the company validly contracted out or outsourced the services involving forwarding, packing, loading and clerical activities related thereto. 2. Whether or not the functions of the forwarders employees are functions being performed by regular rank-and-file employees covered by the bargaining unit

Petitioner (Coke) is a domestic corporation engaged in manufacturing, bottling and distributing soft drink beverages and other allied products. Respondents were salesmen assigned at Coke Lagro Sales Office for years but were not regularized. Coke averred that respondents were employees of Interserve who were tasked to perform contracted services in accordance with the provisions of the Contract of Services executed between Coke and Interserve on 23 March 2002. Said Contract constituted legitimate job contracting, given that the latter was a bona fide independent contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business.

HELD YES. In Meralco v. Quisumbing, we joined this universal recognition of outsourcing as a legitimate activity when we held that a company can determine in its best judgment whether it should contract out a part of its work for as long as the employer is motivated by good faith; the contracting is not for purposes of circumventing the law; and does not involve or be the result of malicious or arbitrary action. Our own examination of the agreement shows that the forwarding arrangement complies with the requirements of Article 106[26] of the Labor Code and

To prove the status of Interserve as an independent contractor, petitioner presented the following pieces of evidence: (1) the Articles of Incorporation of Interserve; (2) the Certificate of Registration of Interserve with the Bureau of Internal Revenue; (3) the Income Tax Return, with Audited Financial Statements, of

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Interserve for 2001; and (4) the Certificate of Registration of Interserve as an independent job contractor, issued by the Department of Labor and Employment (DOLE).

(SNMI). Since SNMI was formed to do the sales and marketing work, SMART abolished the CSMG/FSD, Astorgas division. Despite the abolition of the CSMG/FSD, Astorga continued reporting for work. SMART issued a memorandum advising Astorga of the termination of her employment on ground of redundancy. Astorga states that the justification advanced by SMART is not true because there was no compelling economic reason for redundancy.

As a result, petitioner asserted that respondents were employees of Interserve, since it was the latter which hired them, paid their wages, and supervised their work, as proven by: (1) respondents’ Personal Data Files in the records of Interserve; (2) respondents’ Contract of Temporary Employment with Interserve; and (3) the payroll records of Interserve.

ISSUE Whether or not the cause for Astorga’s dismissal is valid

ISSUES 1. Whether or not Inteserve is a labor-only contractor; 2. Whether or not an employer-employee relationship exists between petitioner Coca-Cola Bottlers Phils. Inc. and respondents.

RULING Yes. Contrary to her claim, an employer is not precluded from adopting a new policy conducive to a more economical and effective management even if it is not 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 redundancy.

HELD 1. Yes. In sum, Interserve did not have substantial capital or investment in the form of tools, equipment, machineries, and work premises; and respondents, its supposed employees, performed work which was directly related to the principal business of petitioner. It is, thus, evident that Interserve falls under the definition of a “labor-only” contractor, under Article 106 of the Labor Code; as well as Section 5(i) of the Rules Implementing Articles 106-109 of the Labor Code, as amended. It is also apparent that Interserve is a labor-only contractor under Section 5(ii) of the Rules Implementing Articles 106-109 of the Labor Code, as amended, since it did not exercise the right to control the performance of the work of respondents. 2. Yes. With the finding that Interserve was engaged in prohibited labor-only contracting, petitioner shall be deemed the true employer of respondents. As regular employees of petitioner, respondents cannot be dismissed except for just or authorized causes, none of which were alleged or proven to exist in this case, the only defense of petitioner against the charge of illegal dismissal being that respondents were not its employees.

Supreme Court agreed with the CA that the organizational realignment introduced by SMART, which culminated in the abolition of CSMG/FSD and termination of Astorgas employment was an honest effort to make SMARTs sales and marketing departments more efficient and competitive. As the CA had taken pains to elucidate: x x x a careful and assiduous review of the records will yield no other conclusion than that the reorganization undertaken by SMART is for no purpose other than its declared objective as a labor and cost savings device. Indeed, this Court finds no fault in SMARTs decision to outsource the corporate sales market to SNMI in order to attain greater productivity. [Astorga] belonged to the Sales Marketing Group under the Fixed Services Division (CSMG/FSD), a distinct sales force of SMART in charge of selling SMARTs telecommunications services to the corporate market. SMART, to ensure it can respond quickly, efficiently and flexibly to its customers requirement, abolished CSMG/FSD and shortly thereafter assigned its functions to newly-created SNMI Multimedia Incorporated, a joint venture company of SMART and NTT of Japan, for the reason that CSMG/FSD does not have the necessary technical expertise required for the value added services. By transferring the duties of CSMG/FSD to SNMI, SMART has created a more competent and specialized organization to perform the work required for corporate accounts. It is also relieved SMART of all administrative costs management, time and money-needed in maintaining the CSMG/FSD. The determination to outsource the duties of the CSMG/FSD to SNMI was, to Our mind, a sound business judgment based on relevant criteria and is therefore a legitimate exercise of management prerogative.

SMART COMMUNICATIONS vs. ASTORGA G.R. No. 148132, January 28, 2008, Nachura Regina M. Astorga (Astorga) was employed by respondent Smart Communications, Incorporated (SMART) as District Sales Manager of the Corporate Sales Marketing Group/ Fixed Services Division (CSMG/FSD). SMART launched an organizational realignment to achieve more efficient operations. Part of the reorganization was the outsourcing of the marketing and sales force. Thus, SMART entered into a joint venture agreement with NTT of Japan, and formed SMART-NTT Multimedia, Incorporated

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Indeed, out of our concern for those lesser circumstanced in life, this Court has inclined towards the worker and upheld his cause in most of his conflicts with his employer.This favored treatment is consonant with the social justice policy of the Constitution. But while tilting the scales of justice in favor of workers, the fundamental law also guarantees the right of the employer to reasonable returns for his investment. In this light, we 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 within the framework of existing laws. Accordingly, we sustain the reorganization and redundancy program undertaken by SMART.

distinct legal personality from Manila Water, and it was duly registered as an independent contractor before the DOLE. ISSUE Whether FCCSI was a labor-only contractor and that respondent bill collectors are employees of petitioner Manila Water. RULING Yes. FCCSI was a labor-only contractor and that respondent bill collectors are employees of petitioner Manila Water. "Contracting" or "subcontracting" refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or outside the premises of the principal.

MANILA WATER V. DALUMPINES G.R. No. 175501, October 4, 2010, Nachura By virtue of Republic Act No. 8041, otherwise known as the "National Water Crisis Act of 1995," the Metropolitan Waterworks and Sewerage System (MWSS) was given the authority to enter into concession agreements allowing the private sector in its operations. Petitioner Manila Water Company, Inc. (Manila Water) was one of two private concessionaires contracted by the MWSS to manage the water distribution system in the east zone of Metro Manila. Before the expiration of the contract of services, the 121 bill collectors formed a corporation duly registered with the Securities and Exchange Commission (SEC) as the "Association Collector’s Group, Inc." (ACGI). ACGI was one of the entities engaged by Manila Water for its courier service. However, Manila Water contracted ACGI for collection services only in its Balara Branch. Manila Water entered into a service agreement with respondent First Classic Courier Services, Inc. (FCCSI) also for its courier needs. Earlier, in a memorandum, FCCSI gave a deadline for the bill collectors who were members of ACGI to submit applications and letters of intent to transfer to FCCSI. On various dates, individual respondents were terminated from employment. Manila Water no longer renewed its contract with FCCSI because it decided to implement a "collectorless" scheme whereby Manila Water customers would instead remit payments through "Bayad Centers."

Department Order No. 18-02, Series of 2002, enunciates that labor-only contracting refers to an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal, and any of the following elements are present: (i) the contractor or subcontractor does not have substantial capital or investment which relates to the job, work, or service to be performed and the employees recruited, supplied, or placed by such 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 performance of the work of the contractual employee. FCCSI has no sufficient investment in the form of tools, equipment and machinery to undertake contract services for Manila Water involving a fleet of around 100 collectors assigned to several branches and covering the service area of Manila Water customers spread out in several cities/towns of the East Zone. The only rational conclusion is that it is Manila Water that provides most if not all the logistics and equipment including service vehicles in the performance of the contracted service, notwithstanding that the contract between FCCSI and Manila Water states that it is the Contractor which shall furnish at its own expense all materials, tools and equipment needed to perform the tasks of collectors.

The aggrieved bill collectors individually filed complaints for illegal dismissal, unfair labor practice, damages, and attorney’s fees, with prayer for reinstatement and backwages against petitioner Manila Water and respondent FCCSI. The complaints were consolidated and jointly heard. Petitioner Manila Water, for its part, denied that there was an employeremployee relationship between its company and respondent bill collectors. Based on the agreement between FCCSI and Manila Water, respondent bill collectors are the employees of the former, as it is the former that has the right to select/hire, discipline, supervise, and control. FCCSI has a separate and

BABAS v. LORENZO SHIPPING CORPORATION G.R. No. 186091, December 15, 2010, Nachura Lorenzo Shipping Corporation (LSC), a shipping company, entered into an agreement with Best Manpower Services, Inc. (BMSI) wherein BMSI undertook to provide maintenance and repair services to LSCs container vans, heavy equipment, trailer

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chassis, and generator and to provide checkers to inspect all containers received for loading to and/or unloading from its vessels. Simultaneous with the execution of the Agreement, LSC leased its equipment, tools, and tractors to BMSI. BMSI then hired petitioners on various dates to work at LSC as checkers, welders, utility men, clerks, forklift operators, motor pool and machine shop workers, technicians, trailer drivers, and mechanics. Six years later, LSC entered into another contract with BMSI, this time, a service contract. Petitioners filed with the Labor a complaint for regularization against LSC and BMSI. Later, LSC terminated their Agreement which led to petitioners losing employment.

business. Logically, when petitioners were assigned by BMSI to LSC, BMSI acted merely as a labor-only contractor.Lastly, as found by the NLRC, BMSI had no other client except for LSC, and neither BMSI nor LSC refuted this finding, thereby bolstering the NLRC finding that BMSI is a labor-only contractor. Consequently, the workers that BMSI supplied to LSC became regular employees of the latter. TENG V. PAHAGAC G.R. No. 169704 Respondent was hired for the purpose of measuring the volume of fishes caught by the petitioner company, the counting/measuring was done using the tools and equipment of petitioner and even through his express direction. However, after sometime Teng terminated the services of Pahagac and on several occasions even doubted the measurements given by the respondent which resulted to his termination of his services.

ISSUE Is BMSI engaged in labor-only contracting, entitling petitioners to be considered as employees of LSC? RULING Yes. A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:(a) The contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according 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 contractor has substantial capital or investment; and(c) The agreement between the principal and the contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety and health standards, free exercise of the right to selforganization, security of tenure, and social welfare benefits.

ISSUE WON there is an EE-ER relationship RULING Yes, The element of control is present in this case. Teng not only owned the tools and equipment, he directed how the respondent workers were to perform their job as checkers; they, in fact, acted as Teng's eyes and ears in every fishing expedition. furthermore it was his company that issued to the respondent workers identification cards (IDs) bearing their names as employees and Teng's signature as the employer. Generally, in a business establishment, IDs are issued to identify the holder as a bonafide employee of the issuing entity. For the 13 years that the respondent workers worked for Teng, they received wages on a regular basis, in addition to their shares in the fish caught.

Given the above standards, we sustain the petitioners contention that BMSI is engaged in labor-only contracting. First, petitioners worked at LSCs premises, and nowhere else. Other than the provisions of the Agreement, there was no showing that it was BMSI which established petitioners working procedure and methods, which 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 were hired by BMSI.Second, LSC was unable to present proof that BMSI had substantial capital. The record before us is bereft of any proof pertaining to the contractors capitalization, nor to its investment in tools, equipment, or implements actually used in the performance or 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 performed activities which were directly related to the main business of LSC. The work of petitioners as checkers, welders, utility men, drivers, and mechanics could only be characterized as part of, or at least clearly related to, and in the pursuit of, LSCs

CLASSES OF EMPLOYEE MAGIS YOUNG ACHIEVERS LEARNING CENTER AND MRS. VIOLETA T. CARIO V. ADELAIDA P. MANALO G.R No. 178835, February 13, 2009, Nachura On April 18, 2002, Adelaida Manalo was hired as a teacher and acting princiapl of Magis Young Achievers Learning Center. It appears that, on March 29, 2003, Manalo wrote a letter of resignation to Magis’ directress Violeta Cario but, on March 31, 2003, Manalo received a letter of termination from Magis so Manalo filed a comlaint for illegal dismissal and nonpayment of 13th month pay with prayer for reinstatement. Magis, among others, claimed that Manalo was legally terminated becayse the 1-year probationary periof had already lapsed and she failed

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to meet the criteria set by the school pursuant to the Manual of Regulation for Private Schools.The LA dismissed the complaint. NLRC reversed the decision. MR was denied. CA affirmed. MR was denied. Hence, this petition.

However, since Magis failed to show by competent evidence that Manalo did not meet the standards set by the school, it can be concluded that her termination before the end of her probationary period. PIER 8 ARRASTRE & STEVEDORING SERVICES V. BOCLOT G .R . No . 1 73 8 49 , September 28, 2007, ChicoNazario

ISSUE Is Adelaida Manalo a permanent employee? HELD No. The 6-month limit on the term of probationary employment does not apply to all classes of occupations. For academic personnel in private schools, colleges, and universities, probationary employment is governed by Sec. 92 of the 1992 Manual of Regulations for Private Schools, supplemented by DOLE-DECS-CHED-TESDA Order No. 1 dated February 7, 1996 and Sec. 4.m(4)[c] of the Manual. For academic personnel in private elementary and secondary schools, it is only after one has satisfactorily completed the probationary period of three (3) school years and is rehired that he acquires full tenure as a regular or permanent employee.

Boclot was hired by PASSI to perform the functions of a stevedore. Later on, Boclot filed Complaint with the Labor Arbiter claiming regularization; payment of service incentive leave and 13th month pays; moral, exemplary and actual damages; and attorney’s fees. He alleged that he was hired by PASSI in October 1999 and was issued company ID No. 304, a PPA Pass and SSS documents. In fact, respondent contended that he became a regular employee by April 2000, since it was his sixth continuous month in service in PASSI’s regular course of business. He argued on the basis of Articles 280 and 281 of the Labor Code. He maintains that under paragraph 2 of Article 280, he should be deemed a regular employee having rendered at least one year of service with the company.

Pursuant to Section 93 of the Manual, no vested right to a permanent appointment shall accrue until the employee has completed the prerequisite three-year period necessary for the acquisition of a permanent status. Of course, the mere rendition of service for three consecutive years does not automatically ripen into a permanent appointment. It is also necessary that the employee be a full-time teacher, and that the services he rendered are satisfactory.

ISSUE Whether or not he has attained regular status . RULING Yes. Though usual and necessary, his employment is dependent on availability of work SC took judicial notice that it is an industry practice in port services to hire “reliever” stevedores in order to ensure smoothflowing 24-hour stevedoring and arrastre operations in the port area. No doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual business of petitioners. However, it should be deemed part of the nature of his work that he can only work as a stevedore in the absence of the employee regularly employed for the very same function.

All this does not mean that academic personnel cannot acquire permanent employment status earlier than after the lapse of three years. The period of probation may be reduced if the employer, convinced of the fitness and efficiency of a probationary employee, voluntarily extends a permanent appointment even before the three-year period ends. Nonetheless, teachers on probationary employment enjoy security of tenure. probationary employees enjoy security of tenure during the term of their probationary employment. As such, they cannot be removed except for cause as provided by law, or if at the end of every yearly contract during the three-year period, the employee does not meet the reasonable standards set by the employer at the time of engagement. But this guarantee of security of tenure applies only during the period of probation. Once that period expires, the constitutional protection can no longer be invoked.

Moreover, respondent does not contest that he was well aware that he would only be given work when there are absent or unavailable employees. Respondent also does not allege, nor is there any showing, that he was disallowed or prevented from offering his services to other cargo handlers in the other piers at the North Harbor other than petitioners. As aforestated, the situation of respondent is akin to that of a seasonal or project or term employee, albeit on a daily basis.

In this case, Manalo rendered service only from April 18, 2002, until March 31, 2003. She has not completed the requisite three-year period of probationary employment She cannot, by right, claim permanent status. Manalo’s appointment as acting principal is merely temporary, or one that is good until another appointment is made to take its place.

Under the CBA, he qualifies as a regular employee The Supreme Court still finds respondent to be a regular employee on the basis of pertinent provisions under the CBA between PASSI and its Workers’ union, wherein it was stated that it agrees to convert to

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regular status all incumbent probationary or casual employees and workers in the Company who have served the Company for an accumulated service term of employment of not less than six (6) months from his original date of hiring. Respondent assents that he is not a member of the union, as he was not recognized by PASSI as its regular employee, but this Court notes that PASSI adopts a union-shop agreement, culling from Article II of its CBA. Under a union-shop agreement, although nonmembers may be hired, an employee is required to become a union member after a certain period, in order to retain employment. This requirement applies to present and future employees. The same article of the CBA stipulates that employment in PASSI cannot be obtained without prior membership in the union. Hence, applying the foregoing provisions of the CBA, respondent should be considered a regular employee after six months of accumulated service. Having rendered 228.5 days, or eight months of service to petitioners since 1999, then respondent is entitled to regularization by virtue of the said CBA provisions.

petitioner Elaine M. Alipio as regular staff nurse without loss of seniority rights. ISSUE Whether or not Alipio is a regular employee RULING Under Article 280 of the Labor Code, an employment is deemed regular when the activities performed by the employee are usually necessary or desirable in the usual business of the employer. However, any employee who has rendered at least one year of service, even though intermittent, is deemed regular with respect to the activity performed and while such activity actually exists. In this case, records show that Alipio's services were engaged by the hotel intermittently from 1993 up to 1998. Her services as a reliever nurse were undoubtedly necessary and desirable in the hotel's business of providing comfortable accommodation to its guests. In any case, since she had rendered more than one year of intermittent service as a reliever nurse at the hotel, she had become a regular employee as early as December 12, 1994. Lastly, per the hotel's own Certification dated April 22, 1997, she was already a "regular staff nurse" until her dismissal.

THE PENINSULA MANILA, ROLF PFISTERER AND BENILDA QUEVEDO-SANTOS, vs. ELAINE M. ALIPIO G.R. No. 167310, June 17, 2008, Quisumbing

Being a regular employee, Alipio enjoys security of tenure. Her services may be terminated only upon compliance with the substantive and procedural requisites for a valid dismissal: (1) the dismissal must be for any of the causes provided in Article 28212 of the Labor Code; and (2) the employee must be given an opportunity to be heard and to defend himself.13

Petitioner is a corporation engaged in the hotel business. Co-petitioners Rolf Pfisterer and BenildaQuevedo-Santos were the general manager and human resources manager, respectively, of the hotel at the time of the controversy. Respondent Elaine M. Alipio was hired merely as a reliever nurse in the company's 24-hour clinic. However, she had been performing the usual tasks and functions of a regular nurse since the start of her employment on December 11, 1993. Hence, after about four years of employment in the hotel, she inquired why she was not receiving her 13th month pay. Alipio was paid P8,000 as her 13th month pay for 1997. Alipio likewise requested for the payment of her 13th month pay for 1993 to 1996, but her request was denied.

ROWELL INDUSTRIAL CORPORATION vs. HON. COURT OF APPEALS and JOEL TARIPE G.R. No. 167714, March 7, 2007, Chico-Nazario Petitioner Rowell Industrial is engaged in manufacturing tin cans for packaging consumer products. Respondent Joel Taripe was employed by petitioner as a “rectangular power press machine operator”. Taripe alleged that upon employment, he was made to sign a document, which was not fully explained to him but was a condition for him to be hired and for which he was not given a copy.

Alipio was informed by a fellow nurse that she can only report for work after meeting up with petitioner Santos. When Alipio met with Santos, Alipio was asked regarding her payslip vouchers. She told Santos that she made copies of her payslip vouchers because Peninsula does not give her copies of the same. Santos was peeved with Alipio's response because the latter was allegedly not entitled to get copies of her payslip vouchers. Santos likewise directed Alipio not to report for work anymore. Aggrieved, Alipio filed a complaint for illegal dismissal against the petitioners. Private respondents The Peninsula Manila and BenildaQuevedo-Santos are ordered to reinstate

Apparently, the contract of employment was only good for a period of five (5) months unless it is renewed by mutual consent. Along with other contractual employees, he was hired only to meet the increase in demand for packaging materials for the Christmas season and to build up stock levels for the early part of the year. Taripe filed a complaint for regularization and holiday pay. The LA dismissed his complaint. The NLRC reversed the LA. The CA affirmed the resolution of the NLRC. ISSUE

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Is Taripe a Regular Employee?

a "work pool" from which petitioner chose persons to be given specific assignments at its discretion, and were thus under its direct supervision and control regardless of nomenclature.

HELD YES. There are two kinds of regular employees: (1) those who are engaged to perform activities which are USUALLY NECESSARY OR DESIRABLE in the USUAL BUSINESS or TRADE of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. Taripe belonged to the first category.

For its part, petitioner alleged in its position paper that the respondents were PAs who basically assist in the conduct of a particular program ran by an anchor or talent. Among their duties include monitoring and receiving incoming calls from listeners and field reporters and calls of news sources; generally, they perform leg work for the anchors during a program or a particular production. They are considered in the industry as "program employees" in that, as distinguished from regular or station employees, they are basically engaged by the station for a particular or specific program broadcasted by the radio station. Petitioner asserted that as PAs, the complainants were issued talent information sheets which are updated from time to time, and are thus made the basis to determine the programs to which they shall later be called on to assist.

The purported contract of employment providing that Taripewas hired as contractual employee for five (5) months only, cannot prevail over the undisputed fact that he was hired to perform the function of power press operator, a function necessary or desirable in petitioner’s business of manufacturing tin cans. Petitioner’s contention that the four (4) months length of service of Taripe did not grant him a regular status is inconsequential, considering that length of service assumes importance only when the activity in which the employee has been engaged to perform is not necessary or desirable to the usual business or trade of the employer.

ISSUE W/N the respondents can be considered as regular employees

Also, it cannot be denied that the employment contract signed by respondent Taripe did not mention that he was hired only for a specific undertaking, the completion of which had been determined at the time of his engagement. The said employment contract neither mentioned that respondent Taripe's services were seasonal in nature and that his employment was only for the duration of the Christmas season as purposely claimed by petitioner. What was stipulated in the said contract was that respondent Taripe's employment was contractual for the period of five months. As a rank-and-file employee, Taripe can hardly be on equal terms with petitioner as ‘almost always, employees agree to any terms of employment just to get employed’.

HELD YES. They are regular employees. Where a person has rendered at least one year of service, regardless of the nature of the activity performed, or where the work is continuous or intermittent, the employment is considered regular as long as the activity exists, the reason being that a customary appointment is not indispensable before one may be formally declared as having attained regular status. Article 280 of the Labor Code provides: The primary standard, therefore, of determining regular employment is the 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.

ABS-CBN BROADCASTING CORPORATION v. MARLYN NAZARENO, MERLOU GERZON, JENNIFER DEIPARINE, and JOSEPHINE LERASAN. G.R. No. 164156, September 26, 2006

Not considered regular employees are “project employees,” the completion or termination of which is more or less determinable at the time of employment, such as those employed in connection with a particular construction project, and “seasonal employees” whose employment by its nature is only desirable for a limited period of time. Even then, any employee who has rendered at least one year of service, whether continuous or intermittent, is deemed regular with respect to the activity performed and while such activity actually exists.

Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs) on different dates. On October 12, 2000, respondents filed a Complaint for Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay, Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the NLRC. Respondents alleged that they were engaged by respondent ABS-CBN as regular and full-time employees for a continuous period of more than five (5) years with a monthly salary rate of Four Thousand (P4,000.00) pesos beginning 1995 up until the filing of this complaint on November 20, 2000. Respondents insisted that they belonged to

Respondents cannot be considered “talents” because they are not actors or actresses or radio specialists or mere clerks or utility employees. They are regular

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employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors.

Kimberly filed a motion for reconsideration of the DOLE Order arguing in the main that the decision only pertained to casuals who had rendered one year of service as of April 21, 1986, the filing date of KILUSAN-OLALIA’s petition for certification election.

Thus, there are two kinds of regular employees under the law: (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those 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.

ISSUES Whether the reckoning point in determining who among Kimberly’s casual employees are entitled to regularization should be April 21, 1986, the date KILUSAN-OLALIA filed a petition for certification election to challenge the incumbency of UKCEOPTGWO Whether the employees who are not parties in the cases between the parties should not be included in the implementation orders of DOLE

Under existing jurisprudence, project (for project employees) could refer to two distinguishable types of activities. First, a project may refer to a particular job or undertaking that is within the regular or usual business of the employer, but which is distinct and separate, and identifiable as such, from the other undertakings of the company. Such job or undertaking begins and ends at determined or determinable times. Second, the term project may also refer to a particular job or undertaking that is not within the regular business of the employer. Such a job or undertaking must also be identifiably separate and distinct from the ordinary or regular business operations of the employer. The job or undertaking also begins and ends at determined or determinable times.

RULING No. The law [thus] provides for two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. The individual petitioners herein who have been adjudged to be regular employees fall under the second category. These are the mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters, pipefitters and masons. It is not disputed that these workers have been in the employ of KIMBERLY for more than one year at the time of the filing of the petition for certification election by KILUSAN-OLALIA.

The principal test is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. KIMBERLY-CLARK, INC. vs. SECRETARY LABOR G.R. No. 156668, November 23, 2007

OF Considering that an employee becomes regular with respect to the activity in which he is employed one year after he is employed, the reckoning date for determining his regularization is his hiring date. Therefore, it is error for petitioner Kimberly to claim that it is from April 21, 1986 that the one-year period should be counted. While it is a fact that the issue of regularization came about only when KILUSANOLALIA filed a petition for certification election, the concerned employees attained regular status by operation of law.

When the Collective Bargaining Agreement executed by and between Kimberly-Clark, Inc., Kimberly and UKCEO-PTGWO expired, KILUSAN-OLALIA challenged the incumbency of UKCEO-PTGWO. A certification election was subsequently conducted with UKCEO-PTGWO winning by a margin of 20 votes over KILUSAN-OLALIA. Remaining as uncounted were 64 challenged ballots cast by 64 casual workers whose regularization was in question. KILUSAN-OLALIA filed a protest.

No. The grant of the benefit of regularization should not be limited to the employees who questioned their status before the labor tribunal/court and asserted their rights; it should also extend to those similarly situated. There is, thus, no merit in petitioner's contention that only those who presented their circumstances of employment to the courts are entitled to regularization.

During the pendency of a case filed by KILUSANOLALIA against the Ministry of Labor and Employment, Kimberly dismissed from service several employees among which are the casual employees whose regularization are in question. After a series of cases between the parties which reached the Supreme Court, DOLE eventually ordered Kimberly to pay the workers who have been regularized their differential pay with respect to minimum wage, cost of living allowance, 13th month pay, and benefits provided for under the applicable collective bargaining agreement from the time they became regular employees.

BENARES V. PANCHO G.R. NO. 151827, April 29, 2005 Respondent Had. Maasin II is a sugar cane plantation located in Murcia, Negros Occidental with an area of

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12-24 has. planted, owned and managed by Josefina Benares, individual co-respondent.

Respondents alleged to have started working as sugar farm workers on various dates in Hda. Maasin II which is a sugar cane plantation located in Murcia, Negros Occidental planted, owned and managed by Josefina Benares, individual co-respondent. They alleged to have been terminated without being paid termination benefits by respondent in retaliation to what they have done in reporting to the Department of Labor and Employment their working conditions and their wages and other mandatory benefits. Later on, in compliance with an issued directive, a formal complaint was filed for illegal dismissal with money claims. But the Labor Arbiter dismissed the complaint for lack of merit.

On July 24, 1991, complainants thru counsel wrote the Regional Director of the Department of Labor and Employment, Bacolod City for intercession particularly in the matter of wages and other benefits mandated by law. On October 15, 1991, complainants alleged to have been terminated without being paid termination benefits by respondent in retaliation to what they have done in reporting to the Department of Labor and Employment their working conditions viz-a-viz (sic) wages and other mandatory benefits.

On appeal, the NLRC held that respondents attained the status of regular seasonal workers of Hda. Maasin II having worked therein from 1964-1985. It found that petitioner failed to discharge the burden of proving that the termination of respondents was for a just or authorized cause. Hence, respondents were illegally dismissed and should be awarded their money claims. Said ruling was affirmed by the CA hence, this petition.

The NLRC held that respondents attained the status of regular seasonal workers of Hda. Maasin II having worked therein from 1964-1985. It found that petitioner failed to discharge the burden of proving that the termination of respondents was for a just or authorized cause. Hence, respondents were illegally dismissed and should be awarded their money claims.

ISSUE Whether respondents are regular employees of Hacienda Maasin and thus entitled to their monetary claims; whether respondents were illegally dismissed.

ISSUE Whether respondents are regular employees of Hacienda Maasin and thus entitled to their monetary claims.

HELD: YES. The law provides for three kinds of employees: (1) regular employees or those who have been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; (2) project employees or those whose 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 the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season; and (3) casual employees or those who are neither regular nor project employees.

HELD In this case, petitioner argues that respondents were not her regular employees as they were merely "pakiao" workers who did not work continuously in the sugar plantation. They performed such tasks as weeding, cutting and loading canes, planting cane points, fertilizing, cleaning the drainage, etc. These functions allegedly do not require respondents’ daily presence in the sugarcane field as it is not everyday that one weeds, cuts canes or applies fertilizer. In support of her allegations, petitioner submitted "cultivo" and milling payrolls. The probative value of petitioner’s evidence, however, has been passed upon by the labor arbiter, the NLRC and the Court of Appeals. Although the labor arbiter dismissed respondents’ complaint because their "position paper is completely devoid of any discussion about their alleged dismissal, much less of the probative facts thereof,"20 the ground for the dismissal of the complaint implies a finding that respondents are regular employees.

The Court, in Hacienda Fatima, condensed the rule that the primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee vis--vis the usual trade or business of the employer. This connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. If the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its 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.

The NLRC was more unequivocal when it pronounced that respondents have acquired the status of regular seasonal employees having worked for more than one year, whether continuous or broken in petitioner’s hacienda. JOSEFINA BENARES V. JAIME PANCHO G.R. No. 151827, April 29, 2005, Tinga

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In this case, petitioner argues that respondents were not her regular employees as they were merely pakiao workers who did not work continuously in the sugar plantation. They performed such tasks as weeding, cutting and loading canes, planting cane points, fertilizing, cleaning the drainage, etc.

respondents were performing work necessary and desirable in the usual trade or business of an employer. Hence, they can properly be classified as regular employees. For respondents to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have been employed only for the duration of one season. While the records sufficiently show that the respondents work in the hacienda was seasonal in nature, there was, however, no proof that they were hired for the duration of one season only. In fact, the payrolls,[30] submitted in evidence by the petitioners, show that they availed the services of the respondents since 1991. Absent any proof to the contrary, the general rule of regular employment should, therefore, stand. It bears stressing that the employer has the burden of proving the lawfulness of his employees dismissal.

The probative value of petitioners evidence, however, has been passed upon by the labor arbiter, the NLRC and the Court of Appeals. Although the labor arbiter dismissed respondents complaint because their position paper is completely devoid of any discussion about their alleged dismissal, much less of the probative facts thereof, the ground for the dismissal of the complaint implies a finding that respondents are regular employees. HACIENDA BINO/HORTENCIA STARKE, INC./HORTENCIA L. STARKE, , vs. CANDIDO CUENCA, et al. G.R. No. 150478, April 15, 2005, Callejo

GAPAYAO V. FULO G.R. No. 193493, June 13, 2013, Sereno

Hacienda Bino is a sugar plantation located in Negros Occidental and represented in this case by Hortencia L. Starke, owner and operator of the said hacienda.The 76 individual respondents were part of the workforce of Hacienda Bino consisting of 220 workers, performing various works.On July 18, 1996, during the off-milling season, petitioner Starke issued an Order or Notice, which stated, that all those who signed in favor of CARP are expressing their desire to get out of employment on their own volition andonly those who did not sign for CARP will be given employment by Hda. Bino.

Jaime Fulo (deceased), a laborer in the agricultural landholdings, a harvester in the abaca plantation, and a repairman/utility worker in several business establishments owned by petitioner, died of "acute renal failure secondary to 1st degree burn 70% secondary electrocution" while doing repairs at the residence and business establishment of petitioner. Private respondent filed a claim for social security benefits with the SSS, However, upon verification and evaluation, it was discovered that the deceased was not a registered member of the SSS. The latter demanded that petitioner remit the social security contributions of the deceased, but petitioner denied that the deceased was his employee.

The respondents regarded such notice as a termination of their employment. As a consequence, they filed a complaint for illegal dismissal, wage differentials, 13th month pay, holiday pay and premium pay for holiday, service incentive leave pay, and moral and exemplary damages with the NLRC Bacolod City, on September 17, 1996.

ISSUE Whether or not there exists between the deceased Jaime Fulo and petitioner an employer-employee relationship that would merit an award of benefits in favor of private respondent under social security laws

On October 6, 1997, the Labor Arbiter rendered a Decision, finding that petitioner Starkes’ notice was tantamount to a termination of the respondents’ services, and holding that the petitioner company was guilty of illegal dismissal. On appeal, the NLRC affirmed with modification the decision of the Labor Arbiter.

RULING Yes. Farm workers generally fall under the definition of seasonal employees. We have consistently held that seasonal employees may be considered as regular employees. 56 Regular seasonal employees are those called to work from time to time. The nature of their relationship with the employer is such that during the off season, they are temporarily laid off; but reemployed during the summer season or when their services may be needed. 57 They are in regular employment because of the nature of their job, and not because of the length of time they have worked.

ISSUE Whether or not the respondents are regular or seasonal employees of Hacienda Bino? RULING Regular employees. The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. There is no doubt that the

For regular employees to be considered as such, the primary standard used is the reasonable connection

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between the particular activity they perform and the usual trade or business of the employer.

work was not dependent on the completion or termination of any project; that since his work was not dependent on any project, his employment with the [petitioner-]company was continuous and without interruption for the past ten (10) years;that on October 1, 1999, he was dismissed from his employment allegedly because he was a project employee. He filed a pro forma complaint for illegal dismissal.

Pakyaw workers are considered employees for as long as their employers exercise control over them. It should be remembered that the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. 69 It is not essential that the employer actually supervises the performance of duties by the employee. It is enough that the former has a right to wield the power.

"The [petitioner-]company however claims that complainant was hired as a project employee in the company’s various projects; that his employment contracts showed that he was a project worker with specific project assignments; that after completion of each project assignment, his employment was likewise terminated and the same was correspondingly reported to the DOLE.Labor Arbiter dismissed the complaint for lack of merit. The CA concluded that respondent was a regular employee of petitioners.

UNIVERSAL ROBINA SUGAR MILLING CORP. (URSUMCO ) V. ACIBO G.R. No. 186439, January 15, 2014, Brion URSUMCO hired employees on different capacities,i.e., drivers, crane operators, bucket hookers, welders, mechanics, laboratory attendants and aides, steel workers, laborers, carpenters and masons, among others. At the start of their respective engagements, the employees signed contracts of employment for a period of one (1) month or for a given season. URSUMCO repeatedly hired them to perform the same duties and, for every engagement, required the latter to sign new employment contracts for the same duration of one month or a given season.

ISSUE Whether Roger Puente is a project employee. RULING In general, the factual findings of the Court of Appeals are binding on the Supreme Court. One exception to this rule, however, is when the factual findings of the former are contrary to those of the trial court (or the lower administrative body, as the case may be). The question of whether respondent is a regular or a project employee is essentially factual in nature; nonetheless, the Court is constrained to resolve it due to the incongruent findings of the NLRC and the CA.The Labor Code defines regular, project and casual employees as follows: “ART. 280. Regular and Casual Employment. - The provision of written 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 has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the 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 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.” With particular reference to the construction industry, to which Petitioner Filsystems belongs, Department (of Labor and Employment) Order No. 19,11 Series of 1993, which make it clear that a project employee is one whose "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 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." In D.M. Consunji, Inc. v. NLRC, this Court has ruled that "the length of service of a project employee is not the controlling test of employment tenure but whether or

ISSUE Are the employees considered regular employees? HELD Yes. However, the designation must be qualified. They are regular seasonal employees. To exclude the asserted “seasonal” employee from those classified as regular employees, the employer must show that: (1) the employee must be performing work or services that are seasonal in nature; and (2) he had been employed for the duration of the season. Hence, when the “seasonal” workers are continuously and repeatedly hired to perform the same tasks or activities for several seasons or even after the cessation of the season, this length of time may likewise serve as badge of regular employment. Even though denominated as “seasonal workers”, if these workers are called to work from time to time and are only temporarily laid off during the off-season, the law does not consider them separated from the service during the off-season period. The law simply considers these seasonal workers on leave until re-employed. FILIPINAS PRE-FABRICATED BUILDING SYSTEMS (FILSYSTEMS) V. PUENTE March 18, 2005, Panganiban "[Respondent] avers that he started working with [Petitioner] Filsystems, Inc., a corporation engaged in construction business, on June 12, 1989; that he was initially hired by [petitioner] company as an ‘installer’; that he was later promoted to mobile crane operator and was stationed at the company premises; that his

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not ‘the 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 the employee.’"

G.R. NO. 157788, March 08, 2005, Quisumbing Respondent Marcelo Donelo started teaching on a contractual basis at St. Mary's University in 1992. In 1995, he was issued an appointment as an Assistant Professor I. He was promoted to Assistant Professor III. He taught until the first semester of school year 1999-2000 when the school discontinued giving him teaching assignments. Respondent filed a complaint for illegal dismissal against the university. Petitioner St. Mary's University showed that respondent was merely a part-time instructor and, except for three semesters, carried a load of less than eighteen units. Petitioner argued that respondent never attained permanent or regular status for he was not a full-time teacher. Further, petitioner showed that respondent was under investigation by the university for giving grades to students who did not attend classes. The Labor Arbiter ruled that respondent was lawfully dismissed because he had not attained permanent or regular status pursuant to the Manual of Regulations for Private Schools. The Labor Arbiter held that only fulltime teachers with regular loads of at least 18 units, who have satisfactorily completed three consecutive years of service qualify as permanent or regular employees.On appeal by respondent, the National Labor Relations Commission (NLRC) reversed the Decision of the Labor Arbiter and ordered the reinstatement of respondent without loss of seniority rights and privileges with full backwages from the time his salaries were withheld until actual reinstatement.4 It held that respondent was a full-time teacher as he did not appear to have other regular remunerative employment and was paid on a regular monthly basis regardless of the number of teaching hours. As a fulltime teacher and having taught for more than 3 years, respondent qualified as a permanent or regular employee of the university. Petitioner sought for reconsideration and pointed out that respondent was also working for the Provincial Government of Nueva Vizcaya from 1993 to 1996. Nevertheless, the NLRC denied petitioner's Motion for Reconsideration. Aggrieved, petitioner elevated the matter to the Court of Appeals, which affirmed the Decision of the NLRC.

In the present case, the contracts of employment of Puente attest to the fact that he was hired for specific projects. His employment was coterminous with the completion of the projects for which he had been hired. Those contracts expressly provided that his tenure of employment depended on the duration of any phase of the project or on the completion of the construction projects. Furthermore, petitioners regularly submitted to the labor department reports of the termination of services of project workers. Such compliance with the reportorial requirement confirms that respondent was a project employee.Respondent’s Complaint specified the address of Filsystems, as "69 INDUSTRIA ROAD, B.BAYAN Q.C.," but specified his place of work as "PROJECT TO PROJECT." These statements, coupled with the other pieces of evidence presented by petitioners, convinces the Court that -- contrary to the subsequent claims of respondent -- he performed his work at the project site, not at the company’s premises. Respondent’s employment contract provides as follows: "x xx employment, under this contract is good only for the duration of the project unless employee’s services is terminated due to completion of the phase of work/section of the project or piece of work to which employee is assigned: "We agree clearly that employment is on a Project to Project Basis and that upon termination of services there is no separation pay: POSITION : Mobil Crane Operator; PROJECT NAME : World Finance Plaza; LOCATION : Meralco Ave., Ortigas Center, Pasig City; ASSIGNMENT : Lifting & Hauling of Materials Evidently, although the employment contract did not state a particular date, it did specify that the termination of the parties’ employment relationship was to be on a "day certain" -- the day when the phase of work termed "Lifting & Hauling of Materials" for the "World Finance Plaza" project would be completed. Thus, respondent cannot be considered to have been a regular employee. He was a project employee.

ISSUE Whether or not private respondent is a permanent regular employee, full time, and was illegally dismissed.

That he was employed with Petitioner Filsystems for ten years in various projects did not ipso facto make him a regular employee, considering that the definition of regular employment in Article 280 of the Labor Code makes a specific exception with respect to project employment. The mere rehiring of respondent on a project-to-project basis did not confer upon him regular employment status. "The practice was dictated by the practical consideration that experienced construction workers are more preferred." It did not change his status as a project employee. SAINT MARY'S APPEALS

UNIVERSITY

V.

COURT

RULING No. Section 93 of the 1992 Manual of Regulations for Private Schools, provides that full-time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent.6 Furthermore, the probationary period shall not be more than six consecutive regular semesters of satisfactory service for those in the tertiary level. Thus, the following requisites must concur before a private school teacher acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher must

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stating that he was being employed only on a ‘’por viaje’’ basis and that his employment would be terminated at the end of the trip for which he was being hired.

have rendered three consecutive years of service; and (3) such service must have been satisfactory. Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time academic personnel are those meeting all the following requirements: a. Who possess at least the minimum academic qualifications prescribed by the Department under this Manual for all academic personnel; b. Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards of the Department and the school; c. Whose total working day of not more than eight hours a day is devoted to the school; d. Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working hours in the school; andcralawlibrary e. Who are not teaching full-time in any other educational institution.

He was promoted to Boat Captain but was later demoted to Radio Operator. As a Radio Operator, he monitored the daily activities in their office and recorded in the duty logbook the names of the callers and time of their calls. On 3 July 2000, Estoquia failed to record a 7:25 a.m. call in one of the logbooks. When he reviewed the two logbooks, he noticed that he was not able to record the said call in one of the logbooks so he immediately recorded the 7:25 a.m. call after the 7:30 a.m. entry. In the morning of 4 July 2000, petitioner detected the error in the entry in the logbook. Estoquia was asked to prepare an incident report to explain the reason for the said oversight. On the same day, Poseidon’s secretary summoned Estoquia to get his separation pay.

All teaching personnel who do not meet the foregoing qualifications are considered part-time.

Estoquia filed a complaint for illegal dismissal with the Labor Arbiter.

With respondent’s teaching load of twelve units or less, he could not claim he worked for the number of hours daily as prescribed by Section 45 of the Manual. Furthermore, the records also indubitably show he was employed elsewhere from 1993 to 1996. Since there is no showing that respondent worked on a full-time basis for at least three years, he could not have acquired a permanent status.11 A part-time employee does not attain permanent status no matter how long he has served the school.12 And as a part-timer, his services could be terminated by the school without being held liable for illegal dismissal. Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully terminate a part-timer before the end of the agreed period without just cause. But once the period, semester, or term ends, there is no obligation on the part of the school to renew the contract of employment for the next period, semester, or term.

Poseidon and Terry de Jesus asserted that Estoquia was a contractual or a casual employee employed only on a"por viaje" or per trip basis and that his employment would be terminated at the end of the trip for which he was being hired. ISSUE WON Eustoqia was a regular employee WON deep -sea fishing is a seasonal industry WON Eustoqia was illegally dismissed RULING Yes, Eustoquia was a regular employee. Article 280 draws a line between regular and casual employment. The provision enumerates two (2) kinds of employees, the regular employees and the casual employees. The regular employees consist of the following: 1) those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and 2) those who have rendered at least one year of service whether such service is continuous or broken.

That petitioner did not give any teaching assignment to the respondent during a given term or semester, even if factually true, did not amount to an actionable violation of respondent's rights. It did not amount to illegal dismissal of the part-time teacher. POSEIDON FISHING/TERRY DE JESUS V. NLRC G.R. No. 168052, February 20. 2006, Chico Nazario

In a span of 12 years, Eustoquia worked for petitioner first as a Chief Mate, then Boat Captain, and later as Radio Operator. His job was directly related to the deep-sea fishing business of petitioner Poseidon. His work was, therefore, necessary and important to the business of his employer. Such being the scenario involved, Eustoquia is considered a regular employee.

Petitioner Poseidon Fishing is a fishing company engaged in the deep-sea fishing industry with Terry de Jesus as the manager. Jimmy S. Estoquia was employed as Chief Mate in January 1988 and after five years. The contract with Eustoqia per the "Kasunduan", there was a provision

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There is nothing in the contract that says complainant is a casual, seasonal or a project worker. The date July 1 to 31, 1998 under the heading "Pagdating" had been placed there merely to indicate the possible date of arrival of the vessel and is not an indication of the status of employment of the crew of the vessel.

Yes, Eustoqia was illegally dismissed. There is no sufficient evidence on record to prove Eustoqia’s negligence, gross or simple, in the performance of his duties to warrant a reduction of six months salary and be summarily dismissed. At best, the simple negligence is punishable only with admonition or suspension for a day or two.

The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. And, if the employee has 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 evidence of the necessity, if not indispensability of that activity to the business.

His dismissal was without valid cause and where illegal dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions or conditions. PLDT v. ROSALINA ARCEO G.R. No. 149985, May 5, 2006 In May 1990, respondent Rosalina Arceo (Arceo) applied for the position of telephone operator with petitioner PLDT Tarlac Exchange. She, however, failed the pre-employment qualifying examination. Having failed the test, Arceo requested PLDT to allow her to work at the latters office even without pay. PLDT agreed and assigned her to its commercial section where she was made to perform various tasks like photocopying documents, sorting out telephone bills and notices of disconnection, and other minor assignments and activities. After two weeks, PLDT decided to pay her the minimum wage.

In the case at bar, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners’ business or trade. No, the activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. Project employees is defined as those workers hired: (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee.

On February 15, 1991, PLDT saw no further need for Arceos services and decided to fire her but, through the intervention of one employee, she was recommended for an on-the-job training on minor traffic work. When she failed to assimilate traffic procedures, the company transferred her to auxiliary services, a minor facility. Subsequently, Arceo took the pre-qualifying exams for the position of telephone operator two more times but again failed in both attempts. Finally, on October 13, 1991, PLDT discharged Arceo from employment. She then filed a case for illegal dismissal before the labor arbiter. The latter ruled in her favor. Arceo was reinstated as casual employee with a minimum wage of P106 per day. On September 3, 1996 or more than three years after her reinstatement, Arceo filed a complaint for unfair labor practice, underpayment of salary, underpayment of overtime pay, holiday pay, rest day pay and other monetary claims. She alleged in her complaint that, since her reinstatement, she had yet to be regularized and had yet to receive the benefits due to a regular employee. Labor arbiter ruled that Arceo was already qualified to become a regular employee. NLRC affirmed. PLDT went to the CA via a petition for certiorari. CA also affirmed and declared that,

The principal test for determining whether particular employees are "project employees" as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration and scope of which were specified at the time the employees were engaged for that project. In this case, Eustoquia was never informed that he will be assigned to a "specific project or undertaking” at the time of their engagement. Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. Eustoquia’s functions were usually necessary or desirable in the usual business or trade of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks. Hence, he was of regular employee.

It is doctrinaire that in determining what constitutes regular employment, what is considered [as] the reasonable connection between the particular activity performed by

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the employee in relation to the usual business or trade of the employer, i.e. if the work is usually necessary or desirable in the usual business or trade of the employer. xxx And even granting the argument of petitioner that the nature of Arceos work is casual or temporary, still she had been converted into a regular employee by virtue of the proviso in the second paragraph of Article 280 for having worked with PLDT for more than one (1) year.

we are constrained to confirm her regularization in that position. FULACHE V. ABS-CBN G.R. No. 183810, January 21, 2010, Brion Petitioners are employees performing manual works for respondent. They were dismissed without just cause; as a consequence thereof, they filed for illegal dismissal and invoked their rights under the CBA. As a defense, respondent contended that petitioners were not its employees, but “talents.” Thus, they cannot be entitled to the benefits stipulated in the CBA for rank and file employees.

PLDT argues that while Article 280 of the Labor Code regularizes a casual employee who has rendered at least one year of service (whether continuous or broken) the proviso is subject to the condition that the employment subsists or the position still exists. Even if Arceo had rendered more than one year of service as a casual employee, PLDT insisted that this fact alone would not automatically make her a regular employee since her position had long been abolished. PLDT also argues that it would be an even greater error if Arceo were to be regularized as a telephone operator since she repeatedly failed the qualifying exams for that position.

ISSUE Whether or not petitioners are regular employees. RULING Yes. they are ABS-CBNs regular employees entitled to the benefits and privileges of regular employees. These benefits and privileges arise from entitlements under the law (specifically, the Labor Code and its related laws), and from their employment contract as regular ABS-CBN employees, part of which is the CBA if they fall within the coverage of this agreement.

ISSUE Is Arceo eligible to become a regular employee of PLDT?

Petitioners are members of the appropriate bargaining unit because they are regular rank-and-file employees and do not belong to any of the excluded categories. Specifically, nothing in the records shows that they are supervisory or confidential employees; neither are they casual nor probationary employees. Most importantly, the labor arbiters decision of January 17, 2002 affirmed all the way up to the CA level ruled against ABS-CBNs submission that they are independent contractors. Thus, as regular rank-and-file employees, they fall within CBA coverage under the CBAs express terms and are entitled to its benefits.

HELD Yes. Under Art 280 of the LC, a regular employee is (1) one who is either engaged to perform activities that are necessary or desirable in the usual trade or business of the employer or (2) a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. Under the first criterion, respondent is qualified to be a regular employee. Her work, consisting mainly of photocopying documents, sorting out telephone bills and disconnection notices, was certainly necessary or desirable to the business of PLDT. But even if the contrary were true, the uncontested fact is that she rendered service for more than one year as a casual employee. Hence, under the second criterion, she is still eligible to become a regular employee.

LEYTE GEOTHERMAL POWER PROGRESSIVE EMPLOYEES UNION – ALU – TUCP vs. PHILIPPINE NATIONAL OIL COMPANY – ENERGY DEVELOPMENT CORPORATION G.R. No. 170351, March 30, 2011 Respondent is a GOCC while petitioner is a legitimate labor organization. Among [respondent’s] geothermal projects is the Leyte Geothermal Power Project located at the Greater 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 completion or termination of the project and would automatically expire upon the completion of such project. Majority of the employees hired by [respondent] in its Leyte Geothermal Power Projects had become members of petitioner. In view of that circumstance, the petitioner demands from the [respondent] for recognition of it as the collective bargaining agent of said employees and for a CBA

Petitioners argument that respondents position has been abolished, if indeed true, does not preclude Arceos becoming a regular employee. The order to reinstate her also included the alternative to reinstate her to a position equivalent thereto. Thus, PLDT can still regularize her in an equivalent position. Under Article 280, any employee who has rendered at least one year of service shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. For PLDTs failure to show that the activity undertaken by Arceo has been discontinued,

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negotiation with it. However, the [respondent] did not heed such demands of the petitioner. Sometime in 1998 when the project was about to be completed, the [respondent] proceeded to serve Notices of Termination of Employment upon the employees who are members of the petitioner.

he was required to take a 60-day leave of absence because of Koch’s disease. He applied for sick leave but he was told he was not entitled to sick leave because he was not a regular employee. ISSUE Is petitioner a regular employee?

ISSUE WON they are project employees

HELD Yes. -This Court is convinced however that although he started as a project employee, he eventually became a regular employee of PNCC. In the case at bar, petitioner worked continuously for more than two years after the supposed three-month duration of his project employment for the NAIA II Project. While his appointment for said project allowed such extension since it specifically provided that in case his “services are still needed beyond the validity of [the] contract, the Company shall extend [his] services”.

HELD YES. By entering into such a contract, an employee is deemed to understand that his employment is coterminous with the project. He may not expect to be employed continuously beyond the completion of the project. It is of judicial notice that project employees engaged for manual services or those for special skills like those of carpenters or masons, are, as a rule, unschooled. However, this fact alone is not a valid reason for bestowing special treatment on them or for invalidating a contract of employment. Project employment contracts are not lopsided agreements in favor of only one party thereto. The employer’s interest is equally important as that of the employee[s’] for theirs is the interest that propels economic activity. While it may be true that it is 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 employee left helpless by a prejudicial employment contract. After all, under the law, the interest of the worker is paramount. Union’s own admission, both parties had executed the contracts freely and voluntarily without force, duress or acts tending to vitiate the worker[s’] consent. Thus, we see no reason not to honor and give effect to the terms and conditions stipulated therein. The litmus test to determine whether an individual is a project employee lies in setting a fixed period of employment involving a specific undertaking which completion or termination has been determined at the time of the particular employee’s engagement.

While for first three months, petitioner can be considered a project employee of PNCC, his employment thereafter, when his services were extended without any specification of as to the duration, made him a regular employee of PNCC. And his status as a regular employee was not affected by the fact that he was assigned to several other projects and there were intervals in between said projects since he enjoys security of tenure. - Failure of an employer to file termination reports after every project completion proves that an employee is not a project employee. PNCC did not report the termination of petitioner’s supposed project employment for the NAIA II Project to the DOLE. Department Order No. 19, or the “Guidelines Governing the Employment of Workers in the Construction Industry,” requires employers to submit a report of an employee’s termination to the nearest public employment office every time an employee’s employment is terminated due to a completion of a project.

PASOS V. PNCC G.R. No. 192394, July 3, 2013, Villarama

MACARTHUR MALICDEM AND HERMENIGILDO FLORES v.MARULAS INDUSTRIAL CORPORATION AND MIKE MANCILLA G.R. No. 204406, February 26, 2014, Mendoza

Petitioner started working for PNCC. Based on PNCC’s "Personnel Action Form Appointment for Project Employment", he was designated as “Clerk II Accounting”at NAIA II. It also stated “Project employment starting on April 26, 1996 to July 25, 1996.” Petitioner’s employment, however, did not end on July 25, 1996, but was extended. He was rehired several times. Despite the termination of his employment on October 19, 2000, petitioner claims that his superior instructed him to report for work the following day, intimating to him that he will again be employed for the succeeding SM projects. For purposes of reemployment, he then underwent a medical examination which allegedly revealed that he had pneumonitis. He took a 14-day sick leave. Then

TOPIC:Effect of continuous re-hiring of a project employee for the same tasks that are vital, necessary and indispensable to the usual trade or business of the employer DOCTRINE: Once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee

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must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence. To rule otherwise would allow circumvention of labor laws in industries not falling within the ambit of Policy Instruction No. 20/Department Order No. 19, hence allowing the prevention of acquisition of tenurial security by project or work pool employees who have already gained the status of regular employees by the employers conduct.

Even granting that petitioners were project employees, they can still be considered as regular as they were continuously hired by the same employer for the same position as extruder operators. Being responsible for the operation of machines that produced sacks, their work was vital and indispensable the business of the employer. The respondents cannot use the alleged expiration of the employment contracts of the petitioners as a shield of their illegal acts. The project employment contracts that the petitioners were made to sign every year since the start of their employment were only a stratagem to violate their security of tenure in the company.

FACTS: Petitioners Malicdem and Flores were hired by respondent corporation as extruder operators in 2006 They were responsible for the bagging of filament yarn, the quality of pp yarn package and the cleanliness of the work place area. Their employment contracts were for a period of one (1) year. Every year thereafter, they would sign a Resignation/Quitclaim in favor of Marulas a day after their contracts ended, and then sign another contract for one (1) year until such time that they were told not to report to work anymore. They were asked to sign a paper acknowledging the completion of their contractual status. Claiming that they were illegally dismissed, the corporation countered that their contracts showed that they were fixed term employees for a specific undertaking which was to work on a particular order of a customer for a specific period. Their severance from employment then was due to the expiration of their contracts.

The respondents invocation of William Uy Construction Corp. v. Trinidad is misplaced because it is applicable only in cases involving the tenure of project employees in the construction industry. It is widely known that in the construction industry, a project employees work depends on the availability of projects, necessarily the duration of his employment. It is not permanent but coterminous with the work to which he is assigned. It would be extremely burdensome for the employer, who depends on the availability of projects, to carry him as a permanent employee and pay him wages even if there are no projects for him to work on.The rationale behind this is that once the project is completed it would be unjust to require the employer to maintain these employees in their payroll.

ISSUE Whether or not petitioners were illegally dismissed

EXODUS INTERNATIONAL CONSTRUCTION CORPORATION and ANTONIO P. JAVALERA v. GUILLERMO BISCOCHO, FERNANDO PEREDA, FERDINAND MARIANO, GREGORIO BELLITA and MIGUEL BOBILLO G.R. No. 166109, February 23, 2011, Del Castillo

HELD Yes. The test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. If the employee has 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 evidence of the necessity, if not indispensability of that activity to the business.

Petitioner Exodus International Construction Corporation (Exodus) is a duly licensed labor contractor for the painting of residential houses, condominium units and commercial buildings. Petitioner Antonio P. Javalera is the President and General Manager of Exodus. On February 1, 1999, Exodus obtained from Dutch Boy Philippines, Inc. (Dutch Boy) a contractfor the painting of the Imperial Sky Garden located at Ongpin Street, Binondo, Manila. On July 28, 1999, Dutch Boy awarded another contractto Exodus for the painting of Pacific Plaza Towers in Fort Bonifacio, Taguig City. In the furtherance of its business, Exodus hired respondents as painters on different dates with the corresponding wages.

It is clear then that there was deliberate intent on the part of the employer to prevent the regularization of petitioners. To begin with, there is no actual project. The only stipulations in the contracts were the dates of their effectivity, the duties and responsibilities of the petitioners as extruder operators, the rights and obligations of the parties, and the petitioners compensation and allowances. As there was no specific project or undertaking to speak of, the respondents cannot invoke the exception in Article 280 of the Labor Code. This is a clear attempt to frustrate the regularization of the petitioners and to circumvent the law.

Guillermo Biscocho (Guillermo) was assigned at the Imperial Sky Garden from February 8, 1999 to February 8, 2000. Fernando Pereda (Fernando) worked in the same project from February 8, 1999 to June 17, 2000. Likewise, Ferdinand Mariano (Ferdinand) worked there from April 12, 1999 to

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February 17, 2000. All of them were then transferred to Pacific Plaza Towers. Gregorio S. Bellita (Gregorio) was assigned to work at the house of Mr. Teofilo Yap in Ayala Alabang, Muntinlupa City from May 20, 1999 to December 4, 1999. Afterwards he was transferred to Pacific Plaza Towers. Miguel B. Bobillo (Miguel) was hired and assigned at Pacific Plaza Towers on March 10, 2000.

ISSUE WON respondents were illegally dismissed. RULING There was no dismissal in this case, hence, there is no question that can be entertained regarding its legality or illegality. As found by the Labor Arbiter, there was no evidence that respondents were dismissed nor were they prevented from returning to their work. It was only respondents’ unsubstantiated conclusion that they were dismissed. As a matter of fact, respondents could not name the particular person who effected their dismissal and under what particular circumstances.

On November 27, 2000, Guillermo, Fernando, Ferdinand, and Miguel filed a complaintfor illegal dismissal and non-payment of holiday pay, service incentive leave pay, 13th month pay and night-shift differential pay. On December 1, 2000, Gregorio also filed a complaint stating that he was dismissed from the service on September 12, 2000 while Guillermo, Fernando, Ferdinand, and Miguel were orally notified of their dismissal from the service on November 25, 2000.

The Labor Arbiter is also correct in ruling that there was no abandonment on the part of respondents that would justify their dismissal from their employment.

Petitioners denied respondents’ allegations. As regards Gregorio, petitioners averred that on September 15, 2000, he absented himself from work and applied as a painter with SAEI-EEI which is the general building contractor of Pacific Plaza Towers. Since then, he never reported back to work.

It is a settled rule that "[m]ere absence or failure to report for work x xx is not enough to amount to abandonment of work." "Abandonment is the deliberate and unjustified refusal of an employee to resume his employment." Respondents must be reinstated and paid their holiday pay, service incentive leave pay, and 13th month pay.

Guillermo absented himself from work without leave on November 27, 2000. When he reported for work the following day, he was reprimanded for being Absent Without Official Leave (AWOL). Because of the reprimand, he worked only half-day and thereafter was unheard of until the filing of the instant complaint. Fernando, Ferdinand, and Miguel were caught eating during working hours on November 25, 2000 for which they were reprimanded by their foreman. Since then they no longer reported for work.

Clearly therefore, there was no dismissal, much less illegal, and there was also no abandonment of job to speak of. The Labor Arbiter is therefore correct in ordering that respondents be reinstated but without any backwages. However, petitioners are of the position that the reinstatement of respondents to their former positions, which were no longer existing, is impossible, highly unfair and unjust. The project was already completed by petitioners on September 28, 2001. Thus the completion of the project left them with no more work to do. Having completed their tasks, their positions automatically ceased to exist. Consequently, there were no more positions where they can be reinstated as painters.

On March 21, 2002, the Labor Arbiter rendered a Decisionexonerating petitioners from the charge of illegal dismissal as respondents chose not to report for work. The Labor Arbiter ruled that respondents should be reinstated but without any backwages. However, she allowed the claims for holiday pay, service incentive leave pay and 13th month pay.

Petitioners are misguided. They forgot that there are two types of employees in the construction industry. The first is referred to as project employees or those employed in connection with a particular construction project or phase thereof and such employment is coterminous with each project or phase of the project to which they are assigned. The second is known as non-project employees or those employed without reference to any particular construction project or phase of a project.

Petitioners sought recourse to the NLRC limiting their appeal to the award of service incentive leave pay, 13th month pay, holiday pay and 10% attorney’s fees in the sum of P70,183.23. On January 17, 2003, the NLRC dismissed the appeal. Aggrieved, petitioners filed with the CA a petition for certiorari. On August 10, 2004, the CA dismissed the petition and affirmed the findings of the Labor Arbiter and the NLRC. However, in addition to the reliefs awarded to respondents in the March 21, 2002 Decision of the Labor Arbiter which was affirmed by the NLRC in a Resolution dated January 17, 2003, the petitioners were directed by the CA to solidarily pay full backwages, inclusive of all benefits the respondents should have received had they not been dismissed.

The second category is where respondents are classified. As such they are regular employees of petitioners. It is clear from the records of the case that when one project is completed, respondents were automatically transferred to the next project awarded to petitioners. There was no employment agreement

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given to respondents which clearly spelled out the duration of their employment, the specific work to be performed and that such is made clear to them at the time of hiring. It is now too late for petitioners to claim that respondents are project employees whose employment is coterminous with each project or phase of the project to which they are assigned.

Labor Code. The only notice required is for the employer to notify the DOLE of the employee’s termination from the employment for each project. FACTS: Respondents Antonio Gobres, Magellan Dalisay, GodofredoParagsa, Emilio Aleta and GenerosoMelo worked as carpenters in the construction projects of petitioner D.M. Consunji, Inc., a construction company, on several occasions and/or at various times. Their termination from employment for each project was reported to the Department of Labor and Employment (DOLE), in accordance with Policy Instruction No. 20, which was later superseded by Department Order No. 19, series of 1993.

Nonetheless, assuming that respondents were initially hired as project employees, petitioners must be reminded of our ruling in Maraguinot, Jr. v. National Labor Relations Commission that "[a] project employee xxx may acquire the status of a regular employee when the following [factors] concur: 1. There is a continuous rehiring of project employees even after cessation of a project; and 2. The tasks performed by the alleged "project employee" are vital, necessary and indespensable to the usual business or trade of the employer."

Respondents’ last assignment was at Quad 4-Project in Glorietta, Ayala, Makati, where they started working on September 1, 1998. On October 14, 1998, respondents saw their names included in the Notice of Termination posted on the bulletin board at the project premises. Respondents filed a Complaint with the Arbitration Branch of the National Labor Relations Commission (NLRC) against petitioner D.M. Consunji, Inc. and David M. Consunji for illegal dismissal, and non-payment of 13th month pay, five (5) days service incentive leave pay, damages and attorney’s fees.

In this case, the evidence on record shows that respondents were employed and assigned continuously to the various projects of petitioners. As painters, they performed activities which were necessary and desirable in the usual business of petitioners, who are engaged in subcontracting jobs for painting of residential units, condominium and commercial buildings. As regular employees, respondents are entitled to be reinstated without loss of seniority rights.

The Labor Arbiter, the NLRC and the Court of Appeals all found that respondents, as project employees, were validly terminated due to the completion of the phases of work for which their services were engaged.

Respondents are also entitled to their money claims such as the payment of holiday pay, service incentive leave pay, and 13th month pay. Petitioners as the employer of respondents and having complete control over the records of the company could have easily rebutted the monetary claims against it. All that they had to do was to present the vouchers or payrolls showing payment of the same. However, they decided not to provide the said documentary evidence. Our conclusion therefore is that they never paid said benefits and therefore they must be ordered to settle their obligation with the respondents.

However, the Court of Appeals held that respondents were entitled to nominal damages, because petitioner failed to give them advance notice of their termination. The appellate court cited the case of Agabon v. NLRC as basis for the award of nominal damages. ISSUE Is prior notice of termination required to be sent to the employee before an employer could terminate him based on completion of the project for which he was hired? -NO RULING Unlike in Agabon, respondents, in this case, were not terminated for just cause under Article 282 of the Labor Code. Dismissal based on just causes contemplate acts or omissions attributable to the employee. Instead, respondents were terminated due to the completion of the phases of work for which their services were engaged.

The CA erred when it ordered reinstatement of respondents with payment of full backwages. In cases where there is no evidence of dismissal, the remedy is reinstatement but without backwages. In this case, both the Labor Arbiter and the NLRC made a finding that there was no dismissal much less an illegal one. D.M. CONSUNJI, INC. V. ANTONIO GOBRES G.R. No. 169170, August 8, 2010

As project employees, respondents’ termination is governed by Section 1 (c) and Section 2 (III), Rule XXIII (Termination of Employment), Book V of the Omnibus Rules Implementing the Labor Code.In this case, the Labor Arbiter, the NLRC and the Court of Appeals all found that respondents were validly terminated due to the completion of the phases of work

Doctrine: If the termination of project employees is brought about by the completion of the contract or phase thereof, no prior notice is required. An employer need not comply with the twin-notice rule unless termination is due to a Just or Legal Cause under the

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offers, Article 281 should assume primacy and the fixed-period character of the contract must give way. This conclusion is immeasurably strengthened by the petitioners and the AMACCs hardly concealed expectation that the employment on probation could lead to permanent status, and that the contracts are renewable unless the petitioners fail to pass the schools standards.”

for which respondents’ services were engaged. The above rule clearly states, “If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required.” Cioco, Jr. v. C.E. Construction Corporation explained that this is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE on the termination of the employment.

“If the school were to apply the probationary standards (as in fact it says it did in the present case), these standards must not only be reasonable but must have also been communicated to the teachers at the start of the probationary period, or at the very least, at the start of the period when they were to be applied. These terms, in addition to those expressly provided by the Labor Code, would serve as the just cause for the termination of the probationary contract. As explained above, the details of this finding of just cause must be communicated to the affected teachers as a matter of due process.”

YOLANDA M. MERCADO v. AMA COMPUTER COLLEGE-PARAAQUE CITY, INC. G.R. No. 183572, April 13, 2010, Brion The petitioners were faculty members who started teaching at AMACC. AMACC implemented new faculty screening guidelines, set forth in its Guidelines on the Implementation of AMACC Faculty Plantilla. Pursuant to said guidelines, entitlement to salary increase was determined. The petitioners failed to obtain a passing rating based on the performance standard, and hence, were not entitled to said increase. This prompted them to file with the NLRC complaint for underpayment of wages, inter alia. AMACC countered that Petitioners were under a contracted term and under a non-tenured appointment and were still within the three-year probationary period for teachers. Their contracts were not renewed for the following term because they failed to pass the Performance Appraisal System for Teachers (PAST) while others failed to comply with the other requirements for regularization, promotion, or increase in salary.

“While we can grant that the standards were duly communicated to the petitioners and could be applied beginning the 1st trimester of the school year 20002001, glaring and very basic gaps in the schools evidence still exist. The exact terms of the standards were never introduced as evidence; neither does the evidence show how these standards were applied to the petitioners.[48] Without these pieces of evidence (effectively, the finding of just cause for the nonrenewal of the petitioners contracts), we have nothing to consider and pass upon as valid or invalid for each of the petitioners. Inevitably, the non-renewal (or effectively, the termination of employment of employees on probationary status) lacks the supporting finding of just cause that the law requires and, hence, is illegal.”

ISSUE Should the teachers’ probationary status be disregarded simply because the contracts were fixedterm?

COLEGIO DEL SANTISIMO ROSARIO AND SR. ZENAIDA S. MOFADA, OP v. EMMANUEL ROJO GR. No. 170388, September 04, 2013, Del Castillo

HELD NO. “To be sure, nothing is illegitimate in defining the school-teacher relationship in this manner. The school, however, cannot forget that its system of fixed-term contract is a system that operates during the probationary period and for this reason is subject to the terms of Article 281 of the Labor Code. Unless this reconciliation is made, the requirements of this Article on probationary status would be fully negated as the school may freely choose not to renew contracts simply because their terms have expired.The inevitable effect of course is to wreck the scheme that the Constitution and the Labor Code established to balance relationships between labor and management.”

Colegio del Santisimo Rosario (CSR) hired respondent as a high school teacher on probationary basis for the school years 1992-1993, 1993-19947 and 1994-1995. On April 5, 1995, CSR, through Mofada, decided not to renew respondent’s services. Thus, on July 13, 1995, respondent filed a Complaint for illegal dismissal. He alleged that since he had served three consecutive school years which is the maximum number of terms allowed for probationary employment, he should be extended permanent employment. Citing paragraph 75 of the 1970 Manual of Regulations for Private Schools (1970 Manual), respondent asserted that “full- time teachers who have rendered three (3) consecutive years of satisfactory services shall be considered permanent.”

“Given the clear constitutional and statutory intents, we cannot but conclude that in a situation where the probationary status overlaps with a fixed-term contract not specifically used for the fixed term it

On the other hand, petitioners argued that respondent

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knew that his Teacher’s Contract for school year 19941995 with CSR would expire on March 31, 1995. Accordingly, respondent was not dismissed but his probationary contract merely expired and was not renewed. Petitioners also claimed that the “three years” mentioned in paragraph 75 of the 1970 Manual refer to “36 months,” not three school years. And since respondent served for only three school years of 10 months each or 30 months, then he had not yet served the “three years” or 36 months mentioned in paragraph 75 of the 1970 Manual.

postgraduate degrees. The two enrolled in graduate studies but failed to finish it. UE extended probationary appointments to Bueno and Pepanio. The Dean of the UE College of Arts and Sciences, sent notices to probationary faculty members, reminding them of the expiration of the probationary status of those lacking in postgraduate qualification. Pepanio replied that she was enrolled at the PUP while Bueno later wrote UE, demanding that it consider her a regular employee based on her six-and-a-half-year service. Pepanio cited her 3.5 years service. Respondents filed cases of illegal dismissal against the school before the LA.

ISSUE Whether or not Rojo has acquired permanent status

ISSUE Whether or not UE illegally dismissed Bueno and Pepanio.

HELD Yes. The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teacher’s performance.

HELD No. The policy requiring postgraduate degrees of college teachers was provided in the Manual of Regulations as early as 1992. The requirement of a masteral degree for tertiary education teachers is not unreasonable. The operation of educational institutions involves public interest. The government has a right to ensure that only qualified persons, in possession of sufficient academic knowledge and teaching skills, are allowed to teach in such institutions. Government regulation in this field of human activity is desirable for protecting, not only the students, but the public as well from ill-prepared teachers, who are lacking in the required scientific or technical knowledge. They may be required to take an examination or to possess postgraduate degrees as prerequisite to employment. Respondents were each given only semester-tosemester appointments from the beginning of their employment with UE precisely because they lacked the required master's degree. It was only when UE and the faculty union signed their 2001 CBA that the school extended petitioners a conditional probationary status subject to their obtaining a master's degree within their probationary period. It is clear, therefore, that the parties intended to subject respondents' permanent status appointments to the standards set by the law and the university.

If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year – since it would be the third school year – of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. It is when the yearly contract is renewed for the third time that Section 93 of the manual becomes operative, and the teacher then is entitled to regular or permanent employment status.

HERRERA-MANAOIS V. ST. SCHOLASTICA’S COLLEGE G.R. No. 188914, December 11, 2013, Sereno

UNIVERSITY OF THE EAST V. PEPANIO G.R. No. 193897, January 23, 2013

SSC, situated in the City of Manila, is a private educational institution offering elementary, secondary, and tertiary education. Manaoisapplied for a position as full–time instructor for school year 2000–2001. She mentioned in her application letter that she had been taking the course Master of Arts in English Studies, Major in Creative Writing, at the University of the Philippines, Diliman (UP); that she was completing her master’s thesis; and that her oral defense was scheduled for June 2000.Her application was approved and herprobationary employment continued for a total of three consecutive years.Upon completion

DECS required college faculty members to have a master's degree as a minimum educational qualification for acquiring regular status. In 1994, UE and its union executed a CBA with effect up to 1999 which provided that UE shall extend only semester-tosemester appointments to college faculty staffs who did not possess the minimum qualifications. UE hired the two respondents on a semester-to-semester basis to teach in its college. They could not qualify for probationary or regular status because they lacked

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of her third year of probationary employment, she received a letter from the Dean of College and Chairperson of the Promotions and Permanency Board officially informing her of the board’s decision not to renew her contract because of her failure to finish her master’s degree.

2003, Salas ran out of Quickboxes – he failed to promptly inform his immediate supervisor of the nondelivery of the requisitioned items thus hampering the operations of Aboitiz. After due notices and an administrative hearing conducted, he was dismissed for neglect of duty and wilful breach of trust. Salas filed a complaint for illegal dismissal.

ISSUE Whether the completion of a master’s degree is required in order for a tertiary level educator to earn the status of permanency in a private educational institution?

ISSUE Does the single act (omission) of an employee constitute gross neglect so as to warrant the penalty of dismissal?

HELD Yes.Art. 281.of the Labor Code provides, “Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.”

RULING No. Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. To warrant removal from service, the negligence should not merely be gross, but also habitual. Undoubtedly, it was Salas duty, as material controller, to monitor and maintain the availability and supply of Quickbox needed by Aboitiz in its day-to-day operations, and on June 4, 2003, Aboitiz had run out of Large Quickbox. However, records show that Salas made a requisition for Quickbox as early as May 21, 2003; that he made several follow-ups with Eric Saclamitao regarding the request; and that he even talked to the supplier to facilitate the immediate delivery of the Quickbox. It cannot be gainsaid that Salas exerted efforts to avoid a stock out of Quickbox. Accordingly, he cannot be held liable for gross negligence.

At this juncture, we reiterate the rule that mere completion of the three–year probation, even with an above–average performance, does not guarantee that the employee will automatically acquire a permanent employment status. It is settled jurisprudence that the probationer can only qualify upon fulfillment of the reasonable standards set for permanent employment as a member of the teaching personnel. In line with academic freedom and constitutional autonomy, an institution of higher learning has the discretion and prerogative to impose standards on its teachers and determine whether these have been met. Upon conclusion of the probation period, the college or university, being the employer, has the sole prerogative to make a decision on whether or not to re–hire the probationer. The probationer cannot automatically assert the acquisition of security of tenure and force the employer to renew the employment contract. In the case at bar, Manaois failed to comply with the stated academic qualifications (Holder of a master’s degree, to teach largely in his major field) required for the position of a permanent full–time faculty member.

His failure to notify his supervisor did not amount to gross neglect of duty or to willful breach of trust, which would justify his dismissal from service. Salas, as material controller was tasked with monitoring and maintaining the availability and supply of Quickbox. There appears nothing to suggest that Salas position was a highly or even primarily confidential position, so that he can be removed for loss of trust and confidence by the employer. No just cause exists to warrant Salas dismissal. Consequently, he is entitled to reinstatement to his former position without loss of seniority rights, and to payment of backwages. RB MICHAEL PRESS V. GALIT G.R. No. 153510, February 13, 2008, Velasco Respondent was employed by petitioner R.B. Michael Press as an offset machine operator. During his employment, Galit was tardy for a total of 190 times and was absent without leave for a total of nine and a half days. He was ordered to render overtime service in order to comply with a job order deadline, but he refused to do so. The following day respondent reported for work but petitioner Escobia told him not to work, and to return later in the afternoon for a hearing. When he returned, a copy of an Office Memorandum was served on him. Petitioners aver that Galit was

SECURITY OF TENURE SALAS V. ABOITIZ ONE G.R. No. 178236, June 27, 2008, Nachura Salas was hired as an assistant utility man by Aboitiz who eventually became material controller after a few years. He was tasked with monitoring and maintaining the availability and supply of Quickbox needed by Aboitiz in its day-to-day operations. Some time in

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dismissed due to the following offenses: (1) tardiness constituting neglect of duty; (2) serious misconduct; and (3) insubordination or willful disobedience. Respondent subsequently filed a complaint for illegal dismissal and money claims before the National Labor Relations Commission (NLRC). The CA found that it was not the tardiness and absences committed by respondent, but his refusalto render overtime work which caused the termination of his employment. Itfurther ruled that the basis for computing his backwages should be his daily salary at the time of his dismissal which was PhP 230, and that his backwages should be computed from the time of his dismissal up to the finality of the CA’s decision

What the lower tribunals perceived as laxity, we consider as leniency. SMCs tendency to excuse justified absences actually redounded to the benefit of respondent since the imposition of the corresponding penalty would have been deleterious to him. In a world where no work-no pay is the rule of thumb, several days of suspension would be difficult for an ordinary working man like respondent. He should be thankful that SMC did not exact from him almost 70 days suspension before he was finally dismissed from work. In any case, when SMC imposed the penalty of dismissal for the 12th and 13th AWOPs, it was acting well within its rights as an employer. An employer has the prerogative to prescribe reasonable rules and regulations necessary for the proper conduct of its business, to provide certain disciplinary measures in order to implement said rules and to assure that the same would be complied with. An employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees.

ISSUES Whether there was just cause to terminate the employment of respondent RULING Respondent did not adduce any evidence to show waiver or condonation on the part of petitioners. Thus the finding of the CA that petitioners cannot use the previous absences and tardiness because respondent was not subjected to any penalty is bereft of legal basis. The petitioners did not impose any punishment for the numerous absences and tardiness of respondent. Thus, said infractions can be used collectively by petitioners as a ground for dismissal.

It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition. Thus, in the implementation of its rules and policies, the employer has the choice to do so strictly or not, since this is inherent in its right to control and manage its business effectively. Consequently, management has the prerogative to impose sanctions lighter than those specifically prescribed by its rules, or to condone completely the violations of its erring employees. Of course, this prerogative must be exercised free of grave abuse of discretion, bearing in mind the requirements of justice and fair play. Indeed, we have previously stated:

SAN MIGUEL CORPORATION V. NLRC G.R. Nos. 146121-22, April 16, 2008, Tinga It appears that per company records, respondent (Ernesto M. Ibias) was AWOP( Absent without permission) on the following dates in 1997: 2, 4 and 11 January; 26, 28 and 29 April; and 5, 7, 8, 13, 21, 22, 28 and 29 May. For his absences on 2, 4 and 11 January and 28 and 29 April, he was given a written warning[7] dated 9 May 1997 that he had already incurred five (5) AWOPs and that further absences would be subject to disciplinary action. For his absences on 28 and 29 April and 7 and 8 May, respondent was alleged to have falsified his medical consultation card by stating therein that he was granted sick leave by the plant clinic on said dates when in truth he was not. After the completion of the investigation, SMC concluded that respondent committed the offenses of excessive AWOPs and falsification of company records or documents, and accordingly dismissed him. The dismissal was rendered without having the respondent previously suspended for prior violations

Management also has its own rights, which, as such, are entitled to respect and enforcement in the interest of simple fair play. Out of its concern for those with [fewer] privileges in life, the Supreme Court has inclined more often than not toward the worker and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine. All told, we find that SMC acted well within its rights when it dismissed respondent for his numerous absences. Respondent was afforded due process and was validly dismissed for cause.

ISSUE Whether or not the dismissal was correct

LBC EXPRESS v. MATEO G.R. No. 168215, June 9, 2009, Corona

HELD YES, Respondents dismissal was well within the purview of SMCs management prerogative.

Doctrine: To justify a dismissal, there must be gross and habitual negiligence. However, the habituality may be dispensed with if the negligence is so gross that there was substiantial loss in the company. An employer cannot legally be compelled to continue with

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the employment of a person admittedly guilty of gross negligence in the performance of his duties.

ISSUE Whether or not Genuino is entitled to payment of such salaries.

James Mateo, designated as a customer associate, was a regular employee of LBC Express (LBC). His job was to deliver and pick-up packages to and from LBC and its customers. One day, Mateo arrived at LBC’s Escolta office, to drop off packages coming from various LBC airposts. He parked his motorcycle directly in front of the LBC office, switched off the engine and took the key with him. He returned promptly within three to five minutes but the motorcycle was gone. After investigation, he received a notice of termination from LBC. He was barred from reporting for work. ISSUE Whether Mateo was grossly performance of his duties

negligent

in

HELD No, since the dismissal was valid. Citibank had valid grounds to dismiss Genuino on ground of loss of confidence. The NLRC's order for payroll reinstatement is set aside. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. If the decision of the labor arbiter is later reversed on appeal upon the finding that the ground for dismissal is valid, then the employer has the right to require the dismissed employee on payroll reinstatement to refund the salaries s/he received while the case was pending appeal, or it can be deducted from the accrued benefits that the dismissed employee was entitled to receive from his/her employer under existing laws, collective bargaining agreement provisions, and company practices. However, if the employee was reinstated to work during the pendency of the appeal, then the employee is entitled to the compensation received for actual services rendered without need of refund. Considering that Genuino was not reinstated to work or placed on payroll reinstatement, and her dismissal is based on a just cause, then she is not entitled to be paid the salaries.

the

RULING YES. Mateo was undisputedly negligent when he left the motorcycle along Escolta, Manila without locking it despite clear, specific instructions to do so. It proved that he did not exercise even the slightest degree of care during that very short time. Mateo deliberately did not heed the employer’s very important precautionary measure to ensure the safety of company property. Although Mateo’s infraction was not habitual, we must take into account the substantial amount lost. In this case, LBC lost a motorcycle with a book value of P46,000 which by any means could not be considered a trivial amount.

EDUARDO BUGHAW, JR. v. TREASURE ISLAND INDUSTRIAL CORPORATION G.R. No. 173151, March 28, 2008, Chico Nazario

MARILOU S. GENUINO v. NLRC G.R. Nos. 142732-33, December 4, 2007, Velasco Genuino was employed by Citibank as Treasury Sales Division Head with the rank of Assistant VicePresident. Citibank sent Genuino a letter charging her with "knowledge and/or involvement" in transactions "which were irregular or even fraudulent” and was informed she was under preventive suspension. Later, after investigation and administrative hearing, Genuino's employment was terminated by Citibank on grounds of (1) serious misconduct, (2) willful breach of the trust reposed upon her by the bank, and (3) commission of a crime against the bank. She filed before the Labor Arbiter a Complaint for illegal suspension and illegal dismissal with damages and prayer for temporary restraining order and/or writ of preliminary injunction. The LA found there was illegal dismissal and ordered for Genuino’s reinstatement. The NLRC reversed the Labor Arbiter's decision with the following modification: (1) DECLARING the dismissal of the complainant valid but (2) ORDERING the respondent bank to pay the salaries due to the complainant from the date it reinstated complainant in the payroll as found by the Labor Arbiter up to and until the date of its (NLRC) decision. CA affirmed NLRC.

Petitioner was employed as production worker by respondent. Respondent was receiving information that many of its employees were using prohibited drugs during working hours and within the company premises. Petitioner was impleaded by one Loberanes in the crime by claiming that part of the money used for buying illegal drugs was given by him. A notice was given by respondent company to petitioner to explain why no disciplinary action be taken against him. Notwithstanding such petitioner failed to appear before the respondent’s legal counsel on the scheduled hearing date and to explain his side on the matter. Petitioner was then terminated without notice. Hence he filed an illegal dismissal against his employer. ISSUE Whether petitioner was illegally dismissed HELD YES. Under the Labor Code, the requirements for the lawful dismissal of an employee are two-fold, the substantive and the procedural aspects. Not only must the dismissal be for a just or authorized cause, the rudimentary requirements of due process - notice and

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hearing must, likewise, be observed before an employee may be dismissed. Without the concurrence of the two, the termination would, in the eyes of the law, be illegal, for employment is a property right of which one cannot be deprived of without due process. While there is no dispute that respondent fully complied with the first-notice requirement apprising petitioner of the cause of his impending termination and giving him the opportunity to explain his side, we find that it failed to satisfy the need for a second notice informing petitioner that he was being dismissed from employment.

Moreno’s dismissal from employment in accordance with the school manual, but Dean Espejo dissented and called only for a suspension for one semester. Moreno was terminated in her work. Moreno instituted with the NLRC a complaint for illegal termination against SSC-R. ISSUE Whether or not the dismissal of Moreno was proper and legal? HELD No. The misconduct of Moreno falls below the required level of gravity that would warrant dismissal as a penalty. Under Art. 282(a) of the Labor Code, willful disobedience of the employer’s lawful orders as a just cause for termination of employment envisages the concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a "wrongful and perverse attitude"; and (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. SSC-R failed to adduce any concrete evidence to prove that Moreno indeed harbored perverse or corrupt motivations in violating the school policy. Even if dismissal for cause is the prescribed penalty for the misconduct committed, it is disproportionate to the offense. The Court deems it appropriate to impose the penalty of suspension of 1 year on Moreno.

Further, the Agabon doctrine enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the dismissal should be upheld. Where the dismissal is for just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual. However, the employer should indemnify the employee for the violation of his right to procedural due process. MORENO v. SAN SEBASTIAN G.R. No. 175283, March 28, 2008, March 28, 2008 Jackqui R. Moren is an employee, a teaching fellow in San Sebastian College (SSC-R). Moreno was first appointed as a full-time college faculty member. Then, Moreno became a member of the permanent college faculty. The SSC-R HR conducted a formal investigation regarding Moreno’s unauthorized external teaching engagements and HR found out that Moreno indeed had unauthorized teaching assignments at the Centro Escolar University and at the College of the Holy Spirit, Manila. Moreno received a MEMO from the Dean of her college, requiring her to explain the reports regarding her unauthorized teaching engagements. The said activities allegedly violated Section 2.2 of Article II of SSC-R’s Faculty Manual. Moreno admitted her failure to secure any written permission before she taught in other schools. Moreno further stated that it was never her intention to jeopardize her work in SSC-R and that she merely wanted to improve her family’s poor financial conditions. A Special Grievance Committee was then formed in order to investigate and make recommendations regarding Moreno’s case. Moreno admitted she did not formally disclose her teaching loads at the College of the Holy Spirit and at the Centro Escolar University; that the Dean of her college was aware of her external teaching loads; that she went beyond the maximum limit for an outside load; that she did not deny teaching part-time in the aforementioned schools; and that she did not wish to resign because she felt she deserved a second chance. The grievance committee issued its resolution which unanimously found that she violated the prohibition against a full-time faculty having an unauthorized external teaching load. The majority of the grievance committee members recommended

JANSENN PHARMACEUTICA v. SILAYRO G.R. No. 172528, February 26, 2008, Chico Nazario Petitioner is the division of Johnson & Johnson Philippines Inc. engaged in the sale and manufacture of pharmaceutical products. Petitioner employed respondent as Territory/Medical Representative. During his employment, respondent received from petitioner several awards and citations. On the dark side, however, respondent was also investigated for, and in some cases found guilty of, several administrative charges. Petitioner issued a Notice of Disciplinary Action finding respondent guilty of the following offenses (1) delayed submission of process reports, for which he was subjected to a one-day suspension without pay, effective 24 November 1998; and (2) cheating in his ROL test, for which he was subjected again to a one-day suspension. Petitioner then terminated the services of respondent. Petitioner found respondent guilty of dishonesty in accomplishing the report on the number of product samples in his possession and failing to return the company vehicle and his other accountabilities in violation of Sections 9.2.9 and 9.2.4 of the Code of Conduct. Petitioner also found respondent to be a habitual offender whose previous offenses included: (1) Granting unauthorized premium/free goods to customer in 1994; (2) Unauthorized pull-out of stocks from customer in 1994; (3) Delay in submission of

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reports despite oral admonition and written reprimand in 1998; and (4) Dishonesty in accomplishing other accountable documents or instruments (in connection with the ROL test) in 1998. Respondent filed a Complaint against petitioner and its officers for illegal dismissal.

charge, present his evidence, or rebut the evidence presented against him. (iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

ISSUE Whether or not sufficient grounds existed for the dismissal of the respondent

From the aforecited provision, it is implicit that these requirements afford the employee an opportunity to explain his side, respond to the charge, present his or her evidence and rebut the evidence presented against him or her.

RULING No. In termination cases, the burden of proof rests with the employer to show that the dismissal is for just and valid cause. Failure to do so would necessarily mean that the dismissal was not justified and therefore was illegal. Dishonesty is a serious charge, which the employer must adequately prove, especially when it is the basis for termination. In this case, petitioner had not been able to identify an act of dishonesty, misappropriation, or any illicit act, which the respondent may have committed in connection with the erroneously reported product samples. While respondent was admittedly negligent in filling out his August and September 1998 DCR, his errors alone are insufficient evidence of a dishonest purpose. Since fraud implies willfulness or wrongful intent, the innocent non-disclosure of or inadvertent errors in declaring facts by the employee to the employer will not constitute a just cause for the dismissal of the employee. In addition, the subsequent acts of respondent belie a design to misappropriate product samples. So as to escape any liability, respondent could have easily just submitted for audit only the number of product samples which he reported. Instead, respondent brought all the product samples in his custody during the audit and, afterwards, honestly admitted to his negligence. Negligence is defined as the failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. To this Court, respondent did not commit any willful violation, rather he merely failed to exercise the standard care required of a territory representative to carefully count the number of product samples delivered to him in August and September 1998. Moreover, petitioner failed to observe procedural due process in connection with the aforementioned charge. Section 2(d) of Rule 1 of The Implementing Rules of Book VI states that:

The superficial compliance with two notices and a hearing in this case cannot be considered valid where these notices were issued and the hearing made before an offense was even committed. The first notice, issued on 24 November 1998, was premature since respondent was obliged to return his accountabilities only on 25 November 1998. As respondent’s preventive suspension began on 25 November 1998, he was still performing his duties as territory representative the day before, which required the use of the company car and other company equipment. During the administrative hearing on 3 December 1998, both parties clarified the confusion caused by the petitioner’s premature notice and agreed that respondent would surrender his accountabilities as soon as the petitioner gave its instructions. Since petitioner’s ostensible compliance with the procedural requirements of notice and hearing took place before an offense was even committed, respondent was robbed of his rights to explain his side, to present his evidence and rebut what was presented against him, rights ensured by the proper observance of procedural due process. SUICO V. NLRC G.R. No. 146762, January 30, 2007, Austria-Martinez Suico, Ceniza, Dacut (complainants were regular employees of Philippine Long Distance Telephone Company (PLDT) Cebu Jones Exchange and members of Manggagawa ng Komunikasyon ng Pilipinas (MKP). MKP launched a strike against PLDT. Complainants participated in the strike by picketing the PLDT. PLDT sent 2 notices to Suico et.al, for the acts of violation that happen during the strike. But the complainant failed to provide the required written explanation the acts charged to them. They replied informing, that they opt to exercise their rights to due process and request to furnish a copy of the formal written complain, statement of witness/es and preliminary investigations and/or report/s conducted on the aforesaid incident, if any. PLDT findings based on the available evidence found the complainants guilty and were subsequently terminated.

For termination of employment based on just causes as defined in Article 282 of the Labor Code: (i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the

ISSUE: Whether PLDT violated the requirements of due process under the Labor Code when it dismissed said

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employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. The omnibus rules implementing the Labor Code, on the other hand, require a hearing and conference during which the employee concerned is given the opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. We reaffirm the time-honored doctrine that, in case of conflict, the law prevails over the administrative regulations implementing it.

employees without heeding their request for the conduct of a formal hearing as provided for under PLDT Systems Practice No. 94-016 and prior to submission of their respective answers to the charges against them. RULING The procedure adopted by PLDT in dismissing Suico, et al. fell short of the requirements of due process. PLDT complied with the two-notice requirement of due process. The first notices sent to Suico, et al. set out in detail the nature and circumstances of the violations imputed to them, required them to explain their side and expressly warned them of the possibility of their dismissal should their explanation be found wanting. The last notices informed Suico, et al. of the decision to terminate their employment and cited the evidence upon which the decision was based. These two notices would have sufficed had it not been for the existence of Systems Practice No. 94-016. Under Systems Practice No. 94-016, PLDT granted its employee the alternative of either filing a written answer to the charges or requesting for opportunity to be heard and defend himself with the assistance of his counsel or union representative, if he so desires.

The following are the guiding principles in connection with the hearing requirement in dismissal cases: (a) ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. (b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. (c) the ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the implementing rules and regulations.

Suico, et al. exercised their option under Systems Practice No. 94-016 by requesting that a formal hearing be conducted and that they be given copies of sworn statements and other pertinent documents to enable them to prepare for the hearing. This option is part of their right to due process. PLDT is bound to comply with the Systems Practice. Company policies or practices are binding on the parties. Some can ripen into an obligation on the part of the employer, such as those which confer benefits on employees or regulate the procedures and requirements for their termination

Note: Petitioners in this case, however, were found to be illegally dismissed as there was no just cause for the termination of their employment. BACOLOD-TALISAY REALTY AND DEVELOPMENT CORPORATION, et al. v. ROMEODELA CRUZ G.R. No. 179563 Respondent as an employee of the petitioner made the following: payroll paddling, selling canepoints without the knowledge and consent of the petitioner and misappropriating the said proceeds and also renting out the tractor to be used on another farm. Due to this, he was suspended for 30 days through a letter informing him of such suspension and after 30 days he received another letter informing him that he was dismissed from work.

PEREZ v. PT&T G.R. No. 152048, April 7, 2009, Corona Petitioners Felix Perez and Amante Doria were employed by respondent Philippine Telegraph and Telephone Company. They later received a memorandum dismissing them from the service for having falsified company documents, prompting them to file a complaint for illegal dismissal on the ground that they were dismissed on the same date that they received the said memorandum. Petitioners argue that due process was not observed in the absence of a hearing in which they could have explained their side.

ISSUE WON petitioner observed due process in dismissing respondent RULING No, petitioner did not comply due to the fact that in validly dismissing and employee two notices are mandatory 1) a first notice to apprise him of his fault, and 2) a second notice to him that his employment is being terminated.

ISSUE Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? RULING No. We note a marked difference in the standards of due process to be followed as prescribed in the Labor Code and its implementing rules. The Labor Code, on one hand, provides that an employer must provide the

In the present case the first letter only informed him of the suspension and did not effectively apprise him of

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his fault nor is given chance to present his side or be heard.

To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee would remain eternally at the mercy of the employer. Further, in order to constitute a just cause for dismissal, the act complained of must be work-related and show that the employee concerned is unfit to continue working for the employer. Such ground for dismissal has never been intended to afford an occasion for abuse because of its subjective nature.

Although the petitioner did terminate him for a just cause, but the procedure was not followed. PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR UNION AND SANDY T. VALLOTA V. NATIONAL LABOR RELATIONS COMMISSION, PRUDENTIAL GUARANTEE AND ASSURANCE, INC., AND/OR JOCELYN RETIZOS G.R. No. 185335, June 13, 2012, Mendoza Vallota worked with PGAI on May 16, 1995 as a Junior Programmer assigned to the EDP Department reporting directly to his head Gerald Dy Victory, until his replacement by Jocelyn Retizos sometime in 1997. In Aug. 2005, Vallota was elected to the Board of Directors of the union.

There was no other evidence presented to prove fraud in the manner of securing or obtaining the files found in Vallota’s computer. In fact, aside from the presence of these files in Vallota’s hard drive, there was no other evidence to prove any gross misconduct on his part. There was no proof either that the presence of such files was part of an attempt to defraud his employer or to use the files for a purpose other than that for which they were intended. If anything, the presence of the files reveals some degree of carelessness or neglect in his failure to delete them, but it is an extremely farfetched conclusion bordering on paranoia to state that it is part of a larger conspiracy involving corporate espionage. If anything, the presence of the files would merely merit the development of some suspicion on the part of the employer, but should not amount to a loss of trust and confidence such as to justify the termination of his employment.

On Nov. 11, 2005, PGAI’s HR Manager Atty. Rillo invited union president Mike Apostol to his office to inform him that an on-the-spot security check in the IT Department will be conducted. PGAI network administrator Angelo Gutierrez conducted an inspection but did not find anything unusual with Vallota’s computed but Retizos insisted and took over the inspection until she found a folder named MAA, a copy of which was saved and later printed but no copy was given to Vallota. On Nov. 14, 2005, Vallota received a memorandum directing him to explain within 72 hours why highly confidential files were stored in his computer and placed him under a 30-day preventive suspension which was extended for another 30 days. The union requested that a grievance committee be convened and that the contents of the computers of other IT personnel be similarly produced but this was ignored and a notice of termination was given to Vallota on the ground of loss of trust and confidence, prompting the union and Vallota to file a complaint for illegal dismissal. The LA, the NLRC, and the CA held that there was illegal dismissal. Hence, this petition.

(2) The following are the guiding principles in connection with the hearing requirement in dismissal cases: (a) ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense, whether in a hearing, conference or some other fair, just and reasonable way. (b) a formal hearing or conference becomes mandatory only when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it. (c) the ample opportunity to be heard standard in the Labor Code prevails over the hearing or conference requirement in the implementing rules and regulations.

ISSUES 1. Was Vallota validly dismissed on the ground of loss of trust and confidence? 2. Were the requirements of procedural due process for termination observed? HELD (1) No. Vallota’s position as Junior Programmer is analogous to the second class of positions of trust and confidence. The act alleged to have caused the loss of trust and confidence of PGAI in Vallota was the presence in his computers hard drive of a folder named MAA allegedly containing files with information on MAA Mutual Life Philippines, a domestic corporation selling life insurance policies to the buying public, and files relating to PGAIs internal affairs.

In this case, the two-notice requirement was complied with. PGAI issued to Vallota a written Notice of Charges & Preventive Suspension (Ref. No. AC-0502) dated November 14, 2005. After an exchange of

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memoranda, PGAI then informed Vallota of his dismissal in its decision dated December 21, 2005.

In a complaint dated August 10, 2007, respondent Efren I. Sagad charged the petitioner Sampaguita Auto Transport Corporation (company) with illegal dismissal and damages plus attorney's fees.

However, the Union and Vallota requested a conference or a convening of a grievance committee, such formal hearing became mandatory. After PGAI failed to affirmatively respond to such request, it follows that the hearing requirement was not complied with and, therefore, Vallota was denied his right to procedural due process.

Sagad alleged that on May 14, 2006, the company hired him as a regular bus driver, not as a probationary employee as the company claimed. He disowned his purported signature on the contract of probationary Employment submitted in evidence by the company. He maintained that his signature was forged. He further alleged that on November 5, 2006, he was dismissed by the company for allegedly conniving with conductor Vitola in issuing tickets outside their assigned route.

The petition was granted. COSMOS BOTTLING CO. V. FERMIN G.R. No. 194303, June 20, 2012, Sereno Wilson B. Fermin (Fermin) was a forklift operator at Cosmos Bottling Corporation (COSMOS), where he started his employment on 27 August 1976 On 16 December 2002, he was accused of stealing the cellphone of his fellow employee, Luis Braga (Braga). Fermin was then given a Show Cause Memorandum, requiring him to explain why the cellphone was found inside his locker. In compliance therewith, he submitted an affidavit the following day, explaining that he only hid the phone as a practical joke and had every intention of returning it to Braga.

The company countered that it employed Sagad as a probationary bus driver (evidenced by a probationary employment contract6) from May 14, 2006 to October 14, 2006; he was duly informed of his corresponding duties and responsibilities. He was further informed that during the probationary period, his attendance, performance and work attitude shall be evaluated to determine whether he would qualify for regular employment. For this purpose and as a matter of company policy, an evaluator was deployed on a company bus (in the guise of a passenger) to observe the driver’s work performance and attitude.

After conducting an investigation, COSMOS found Fermin guilty of stealing Bragas phone in violation of company rules and regulations. Consequently, on 2 October 2003, the company terminated Fermin from employment after 27 years of service.

Allegedly, on September 21, 2006, an evaluator boarded Sagad’s bus. The evaluator described Sagad’s manner of driving as "reckless driver, nakikipaggitgitan, nakikipaghabulan, nagsasakay sa gitna ng kalsada, sumusubsob ang pasahero. Sagad disputed the evaluator’s observations. In an explanation (rendered in Filipino), he claimed that he could not have been driving as reported because his wife (who was pregnant) and one of his children were with him on the bus. He admitted though that at one time, he chased an "Everlasting" bus to serve warning on its driver not to block his bus when he was overtaking. He also admitted that once in a while, he sped up to make up for lost time in making trips.

ISSUE Whether or not the termination is valid. RULING Yes. Article 282(e) of the Labor Code talks of other analogous causes or those which are susceptible of comparison to another in general or in specific detail as a cause for termination of employment. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee’s moral depravity. Theft committed by an employee against a person other than his employer, if proven by substantial evidence, is a cause analogous to serious misconduct. Previous infractions may be cited as justification for dismissing an employee only if they are related to the subsequent offense. However, it must be noted that such a discussion was unnecessary since the theft, taken in isolation from Fermin’s other violations, was in itself a valid cause for the termination of his employment.

On October 15, 2006, upon conclusion of the evaluation, the company terminated Sagad’s employment for his failure to qualify as a regular employee. ISSUE Whether or not Sagad is a regular employee RULING Sagad was dismissed, not as a probationary employee, but as one who had attained regular status. The company’s evidence on Sagad’s purported hiring as a probationary employee is inconclusive. To start with, Sagad denied that he entered into a probationary employment contract with the company, arguing that the signature on the supposed contract was not his. He also denied receiving the alleged notice terminating

SAMPAGUITA AUTO TRANSPORT CORPORATION v. NATIONAL LABOR RELATIONS COMMMISSION and EFREN I. SAGAD G.R. No. 197384, January 30, 2013, Brion

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his probationary employment. The same thing is true with his purported letter asking that he be given another chance to work for the company. He asserts that not only is the letter not in his handwriting, the signature on the letter was also not his. The records indicate that he was retained even beyond the expiration of his supposed probationary employment on October 14, 2006. As the NLRC noted, Sagad claimed that he was dismissed by the company on November 5, 2006, after he was accused of conniving with conductor Vitola in issuing tickets outside their assigned route. The company never refuted this particular assertion of Sagad and its silence can only mean that Sagad remained in employment until November 4, 2006, thereby attaining regular status as of that date. Under the law, "an employee who is allowed to work after a probationary period shall be considered a regular employee.

intended to benefit Rapid Movers and Forwarders. The SC also took into consideration the fact that Dongon had served respondent for seven long unblemished years, thus, arriving at a conclusion that his dismissal was plainly unwarranted. The SC reiterated that an employer is given wide latitude of discretion in managing its own affairs. But the exercise of management prerogative is not limitless, but hemmed in by good faith and due consideration of the rights of employees. ALILEM CREDIT COOPERATIVE, BANDIOLA, JR. G.R. No. 173489, February 25, 2013

INC.

v.

Respondent was employed by petitioner as bookkeeper. Petitioner's Board of Directors (the Board) received a letter from a certain Napoleon Gao-ay (Napoleon) reporting the alleged immoral coaduct and unbecoming behavior of respondent by having an illicit relationship with Napoleon’s sister, Thelma G. Palma (Thelma). This prompted the Board to conduct a preliminary investigation. In its Summary Investigation Report, the Ad Hoc Committee concluded that respondent was involved in an extra-marital affair with Thelma. Respondent was informed of Board Resolution embodying the Board’s decision to terminate his services as bookkeeper of petitioner, effective July 31, 1997, without any compensation or benefit except the unpaid balance of his regular salary for services actually rendered. Aggrieved, respondent filed a Complaint for Illegal Dismissal against petitioner before the NLRC.

NATHANIEL N. DONGON v. RAPID MOVERS AND FORWARDERS CO., INC., AND/OR NICANOR E. JAO, JR. G.R. No. 163431, August 28, 2013, Bersamin Dongon is a truck helper leadman in Rapid Movers and Forwarders. Dongon’s area of assignment is in Tanduay Otis Warehouse where he and his driver Villaruz tried to get the goods to be distributed to clients. To get the clearance for the release of goods, Dongon lent his ID card to Villaruz. But, the security guard noticed the misrepresentation, accosted them, and reported the matter to the management of Tanduay. Dongon was dismissed from work due to willful disobedience. He now claims that he was illegally dismissed from work.

ISSUE W/N respondent's dismissal from employment is valid

He argues that the dismissal as a penalty is too harsh and disproportionate to his supposed violation. Said violation was only his first infraction and was even committed in good faith without malice. Rapid Movers and Forwarders argues that they rightly exercised their power to dismiss petitioner on the ground of violation of the company’s manual of discipline.

HELD YES. To be sure, an employer is free to regulate all aspects of employment. It may make reasonable rules and regulations for the government of its employees which become part of the contract of employment provided they are made known to the employee. In the event of a violation, an employee may be validly terminated from employment on the ground that an employer cannot rationally be expected to retain the employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employer’s rules and application of the dignity and responsibility, has so plainly and completely been bared.

The LA dismissed the complaint. NLRC reversed the LA. The CA affirmed the decision of the NLRC. ISSUE Was the dismissal of Dongon legal? HELD NO. Dongon was illegally dismissed. The SC held that the disobedience attributed to Dongon could not be justly characterized as willful within the contemplation of the law. Wilfullness must be attended by a wrongful and perverse mental attitude rendering the eomployee’s act inconsistent with proper subordination. Dongon did not benefit from it nor was the business of respondent prejudiced. The Court believed Dongon’s explanation that his deed had been

While respondent’s act of engaging in extra--marital affairs may be considered personal to him and does not directly affect the performance of his assigned task as bookkeeper, aside from the fact that the act was specifically provided for by petitioner’s Personnel Policy as one of the grounds for termination of employment, said act raised concerns to petitioner as the Board received numerous complaints and petitions from the cooperative members themselves asking for

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the removal of respondent because of his immoral conduct. CAVITE APPAREL, INCORPORATED ADRIANO TIMOTEO v. MICHELLE MARQUEZ G.R. No. 172044, February 06, 2013

one’s duties. Habitual neglect imparts repeated failure to perform one’s duties for a period of time, depending on the circumstances. Under these standards and the circumstances obtaining in the case, we agree with the CA that Michelle is not guilty of gross and habitual neglect of duties.

and

On August 22, 1994, Cavite Apparel hired Michelle as a regular employee in its Finishing Department. Michelle enjoyed, among other benefits, vacation and sick leaves of seven (7) days each per annum. Prior to her dismissal on June 8, 2000, Michelle committed the following infractions (with their corresponding penalties): a. First Offense: Absence without leave (AWOL) on December 6, 1999 – written warning b. Second Offense: AWOL on January 12, 2000 – stern warning with three (3) days suspension c. Third Offense: AWOL on April 27, 2000 – suspension for six (6) days.

Even assuming that she failed to present a medical certificate for her sick leave on May 8, 2000, the records are bereft of any indication that apart from the four occasions when she did not report for work, Michelle had been cited for any infraction since she started her employment with the company in 1994. Four absences in her six years of service, to our mind, cannot be considered gross and habitual neglect of duty, especially so since the absences were spread out over a six-month period. Michelle’s penalty of dismissal too harsh or not proportionate to the infractions she committed Michelle might have been guilty of violating company rules on leaves of absence and employee discipline, still we find the penalty of dismissal imposed on her unjustified under the circumstances. As earlier mentioned, Michelle had been in Cavite Apparel’s employ for six years, with no derogatory record other than the four absences without official leave in question, not to mention that she had already been penalized for the first three absences, the most serious penalty being a six-day suspension for her third absence on April 27, 2000.

On May 8, 2000, Michelle got sick and did not report for work. When she returned, she submitted a medical certificate. Cavite Apparel, however, denied receipt of the certificate. Michelle did not report for work on May 15-27, 2000 due to illness. When she reported back to work, she submitted the necessary medical certificates. Nonetheless, Cavite Apparel suspended Michelle for six (6) days (June 1-7, 2000). When Michelle returned on June 8, 2000, Cavite Apparel terminated her employment for habitual absenteeism. Michelle filed a complaint for illegal dismissal with prayer for reinstatement, backwages and attorney’s fees with the NLRC.

While previous infractions may be used to support an employee’s dismissal from work in connection with a subsequent similar offense, we cautioned employers in an earlier case that although they enjoy a wide latitude of discretion in the formulation of work-related policies, rules and regulations, their directives and the implementation of their policies must be fair and reasonable; at the very least, penalties must be commensurate to the offense involved and to the degree of the infraction.

The NLRC noted that for Michelle’s first three absences, she had already been penalized ranging from a written warning to six days suspension. These, the NLRC declared, should have precluded Cavite Apparel from using Michelle’s past absences as bases to impose on her the penalty of dismissal, considering her six years of service with the company. It likewise considered the penalty of dismissal too severe. The NLRC thus concluded that Michelle had been illegally dismissed and ordered her reinstatement with backwages. The Court of Appeals affirmed the ruling of the NLRC.

ESGUERRA v. VALLE VERDE G.R. NO. 173012, June 13, 2012 On April 1, 1978, Valle Verde hired Esguerra as Head Food Checker. In 1999, she was promoted to Cost Control Supervisor. On January 15, 2000, the Couples for Christ held a seminar at the country club. Esguerra was tasked to oversee the seminar held in the two function rooms the Ballroom and the Tanay Room.

ISSUE Whether Michelle was illegally dismissed, specifically: a) Whether Michelle’s AWOLs were habitual b) Whether the dismissal imposed by Cavite Apparel too harsh of a penalty

The Valle Verde Management found out the following day that only the proceeds from the Tanay Room had been remitted to the accounting department. There were also unauthorized charges of food on the account of Judge Rodolfo Bonifacio, one of the participants.

RULING Yes. Michelle’s four absences were not habitual; "totality of infractions" doctrine not applicable. Neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code, must be both gross and habitual. Gross negligence implies want of care in the performance of

On March 6, 2000, Valle Verde sent a memorandum to Esguerra requiring her to show cause as to why no disciplinary a

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ction should be taken against her for the nonremittance of the Ballrooms sales. Esguerra was placed under preventive suspension with pay, pending investigation. In her letter-response, Esguerra denied having committed any misappropriation. Valle Verde found Esguerras explanation unsatisfactory and, on July 26, 2000, issued a second memorandum terminating Esguerras employment.

matching are unsuccessful, permanent retrenchment takes place and separation pay is released. 2. Permanent retrenchment and payment of separation pay and other benefits after the thirty (30) days notice has lapsed; or 3. Immediate retrenchment and payment of separation pay, benefits and one months salary in lieu of notice to allow you to look for other employment opportunities.

ISSUE Whether the dismissal is valid.

Legend gave said until January 14, option number 2 default choice in preferences.

HELD We now dwell on the substantive aspect of Esguerras dismissal. We have held that there are two (2) classes of positions of trust the first class consists of managerial employees, or those vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.

employees a period of one week or 1998 to choose their option, with (permanent retrenchment) as the case they failed to express their

Curiously, on the same day, the Labor and Employment Center of the Subic Bay Metropolitan Authority advertised that Legend International Resorts, Inc. was in need of employees for positions similar to those vacated by petitioners. After informing the retrenched employees of their retrenchment or option, Legend paid the retrenched employees their salaries up to February 6, 1998, separation pay, pro-rated 13th-month pay, ex-gratia, meal allowance, unused vacation leave credits, and tax refund. Petitioners, in turn, signed quitclaims but reserved their right to sue Legend.

Esguerra held the position of Cost Control Supervisor and had the duty to remit to the accounting department the cash sales proceeds from every transaction she was assigned to. This is not a routine task that a regular employee may perform; it is related to the handling of business expenditures or finances. For this reason, Esguerra occupies a position of trust and confidence a position enumerated in the second class of positions of trust. Any breach of the trust imposed upon her can be a valid cause for dismissal.

Subsequently, 14 of the 34 retrenched employees filed a complaint for illegal dismissal and money claims against Legend and its officials. Complainants alleged that they were illegally dismissed because Legend, after giving retrenchment as the reason for their termination, created new positions similar to those they had just vacated. Legend, on the other hand, invoked management prerogative when it terminated the retrenched employees; and said that complainants voluntarily signed quitclaims so that they were already barred from suing Legend.

RUBEN ANDRADA VS. NLRC G.R. No. 173231, December 28, 2007, Velasco Petitioners Ruben Andrada, Jovencio Poblete, Filamer Alfonso, Harvey Cayetano, Vicente Mantala, Jr., Bernaldo delos Santos, and Joven Pabustan were hired on various dates from 1995 up to 1997 and worked as architects, draftsmen, operators, engineers, and surveyors in the Subic Legend Resorts and Casino, Inc. (Legend) Project Development Division on various projects.

ISSUE Whether petitioners were legally dismissed. HELD NO. A company’s exercise of its management prerogatives is not absolute. It cannot exercise its prerogative in a cruel, repressive, or despotic manner. The requirements for retrenchment are: (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 faith by the employer; (2) the employer serves written notice both to the employees and the DOLE at least one month prior to the intended date of retrenchment; and (3) the employer pays the retrenched employees separation pay equivalent to one month pay or at least month pay for every year of service, whichever is higher. The Court later added the requirements that the employer must use fair and

Legend sent notice to the Department of Labor and Employment of its intention to retrench and terminate the employment of thirty-four (34) of its employees, which include petitioners, in the Project Development Division. Legend explained that it would be retrenching its employees on a last-in-first-out basis. The following day Legend sent the 34 employees their respective notices of retrenchment, stating the same reasons for their retrenchment. It also offered the employees the following options, to wit: 1. Temporary retrenchment/lay-off for a period not to exceed six months within which we shall explore your possible reassignment to other departments or affiliates, after six months and redeployment and/or

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reasonable criteria in ascertaining who would be dismissed and x x x retained among the employees and that the retrenchment must be undertaken in good faith. Except for the written notice to the affected employees and the DOLE, non-compliance with any of these requirements render[s] the retrenchment illegal.

implemented by respondent was invalid and petitioner’s separation was illegal. NLRC affirmed the decision of the Labor Arbiter. On appeal, the Court of Appeals reversed the decision of the NLRC. ISSUE Whether or not the retrenchment implemented by respondent was valid.

In the present case, Legend glaringly failed to show its financial condition prior to and at the time it enforced its retrenchment program. It failed to submit audited financial statements regarding its alleged financial losses. Though Legend complied with the notice requirements and the payment of separation benefits to the retrenched employees, its failure to establish the basis for the retrenchment of its employees constrains us to declare the retrenchment illegal.

program

HELD Yes. The Court finds that respondent was fully justified in implementing a retrenchment program. Retrenchment is the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession; industrial depression; or seasonal fluctuations, during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program, or the introduction of new methods or more efficient machinery or automation. Retrenchment is a valid management prerogative. It is, however, subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. In the discharge of these requirements, it is the employer who bears the onus, being in the nature of affirmative defense.

Legend also failed to establish redundancy. Retrenchment and redundancy are two different concepts; they are not synonymous and therefore should not be used interchangeably. It is however not enough for a company to merely declare that positions have become redundant. It must produce adequate proof tantamount to substantial evidence of such redundancy to justify the dismissal of the affected employees. JUVY M. MANATAD vs. PHILIPPINE TELEGRAPH AND TELEPHONE CORPORATION G.R. No. 172363, March 7, 2008, Chico Nazario

For a valid retrenchment, the following requisites must be complied with: (a) the retrenchment is necessary to prevent losses and such losses are proven; (b) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment; and (c) payment of separation pay equivalent to one-month pay or at least one-half month pay for every year of service, whichever is higher.

In September 1988, petitioner was employed by respondent Philippine Telegraph and Telephone Corporation (PT&T) as junior clerk. She was later promoted as Account Executive, the position she held until she was temporarily laid off from employment on 1 September 1998. Petitioners temporary separation from employment was pursuant to the Temporary Staff Reduction Program adopted by respondent due to serious business reverses. Petitioner received a letter from respondent inviting her to avail herself of its Staff Reduction Program Package until full payment of the separation package. However, she did not opt to avail herself of the said package. Later on, petitioner received a Notice of Retrenchment from respondent permanently dismissing her from employment.

Since respondent was undergoing business reverses, not only for a single fiscal year, but for several years prior to and even after the program, it was justified in implementing a retrenchment program. Where appropriate and where conditions are in accord with law and jurisprudence, the Court has authorized valid reductions in the work force to forestall business losses, the hemorrhaging of capital, or even to recognize an obvious reduction in the volume of business which has rendered certain employees redundant.

Consequently, petitioner filed a Complaint for illegal dismissal against respondent before the Labor Arbiter. She alleged that the retrenchment program adopted by respondent was illegal for it was gaining profits for the period of July 1997 to June 1998. On the other hand, respondent asserted that petitioner was separated from service pursuant to a valid retrenchment implemented by the company, due to huge business losses suffered by respondent, it was constrained to arrest escalating operating costs by downsizing its workforce.

LINTON COMMERCIAL CO., INC. v. HELLERA G.R. No. 163147, October 10, 2007, Tinga Linton is a domestic corporation engaged in the business of importation, wholesale, retail and fabrication of steel and its by-products. Linton issued a memorandum 5 addressed to its employees informing them of the company's decision to suspend its operations from 18 December 1997 to 5 January 1998 due to the currency crisis that affected its business

The Labor Arbiter rendered a Decision in favor of petitioner ruling that the retrenchment program

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operations. Linton issued another memorandum 8 informing them that effective 12 January 1998, it would implement a new compressed workweek of three (3) days on a rotation basis. In other words, each worker would be working on a rotation basis for three working days only instead for six days a week. Aggrieved, sixty-eight (68) workers (workers) filed a Complaint for illegal reduction of workdays.

distinction between redundancy and retrenchment, and their requisites as valid grounds for dismissal. FACTS AMA dismissed several regular employees “due to the prevailing economic condition of our economy” and that their employment is “no longer necessary for the reason that function can be handled by the other existing staff”. AMA defends the legality of the dismissal on the ground of redundancy and/or retrenchment.

ISSUE Whether or not there was an illegal reduction of work.

ISSUE Is redundancy the same as retrenchment?

RULING Yes. A close examination of petitioners' financial reports for 1997-1998 shows that, while the company suffered a loss of P3, 645,422.00 in 1997, it retained a considerable amount of earnings 45 and operating income. A year of financial losses would not warrant the immolation of the welfare of the employees, which in this case was done through a reduced workweek that resulted in an unsettling diminution of the periodic pay for a protracted period. Permitting reduction of work and pay at the slightest indication of losses would be contrary to the State's policy to afford protection to labor and provide full employment. Certainly, management has the prerogative to come up with measures to ensure profitability or loss minimization. However, such privilege is not absolute. Management prerogative must be exercised in good faith and with due regard to the rights of labor.

HELD No. The existence of redundancy or retrenchment is a question of fact. AMA failed to sufficiently prove either of the two. Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. Among the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position; and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. The determination that the employee's services are no longer necessary or sustainable for being redundant is an exercise of business judgment of the employer. The wisdom or soundness of this judgment is not subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to merely declare that it has become “overmanned”. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees.

To date, no definite guidelines have yet been set to determine whether the alleged losses are sufficient to justify the reduction of work hours. If the standards set in determining the justifiability of financial losses under Article 283 (i.e., retrenchment) or Article 286 (i.e., suspension of work) of the Labor Code were to be considered, petitioners would end up failing to meet the standards. On the one hand, Article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a period not exceeding six (6) months. 49 Records show that Linton continued its business operations during the effectivity of the compressed workweek, which spanned more than the maximum period. On the other hand, for retrenchment to be justified, any claim of actual or potential business losses must satisfy the following standards: (1) the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence. 50 Linton failed to comply with these standards.

Retrenchment, on the other hand, is the termination of employment effected by management during periods of business recession, industrial depression, seasonal fluctuations, lack of work or considerable reduction in the volume of the employer's business. Resorted to by an employer to avoid or minimize business losses, it is a management prerogative consistently recognized by the Court. The necessary conditions for the company losses to justify retrenchment are as follows: (1) the losses incurred are substantial and not de minimis; (2) the losses are actual or reasonably imminent; (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses; and (4) the alleged losses, if already incurred, or the expected imminent losses sought to be forestalled, are proven by sufficient and convincing evidence.

AMA COMPUTER COLLEGE V. GARCIA G.R. No. 166703, April 14, 2008, Chico-Nazario NOTE: The doctrine in this case focuses only on the

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necessary arrangements.17 In order to meet the foregoing purpose, service of the written notice must be made individually upon each and every employee of the company. Nevertheless, the validity of termination of services can exist independently of the procedural infirmity in the dismissal.

GSWU-NAFLU-KMU v. NLRC G.R. No. 165757, October 17, 2006, Carpio Morales On September 8, 1999, petitioners Galaxie Steel Workers Union and Galaxie employees filed a complaint for illegal dismissal, unfair labor practice, and money claims against Galaxie. The Labor Arbiter, by Decision of October 30, 2000, declared valid Galaxie’s closure of business but nevertheless ordered it to pay petitioner-employees separation pay, pro-rata 13th month pay, and vacation and sick leave credits.

BECTON DICKINSON PHILS. INC. and WILFREDO JOAQUIN G.R. Nos. 159969 & 160116, November 15, 2005, Garcia In 1989, Becton, Phils. had two (2) main divisions, namely: (a) the Medical Division; and (b) the Diagnostics Division. Jesus Fargas headed the Medical Division, while the position of head of the Diagnostics Division was vacant. Also vacant was the position of Country Manager of Becton, Phils. On September 12, 1989, private respondent Reinerio Z. Esmaquel started his stint with Becton, Phils. as Director of Sales and Marketing of the Diagnostics Division. He held this position until March 1998. As Sales and Marketing Director of the company’s Diagnostics Division, respondent reported to Becton, Asia’s Vice President of Diagnostics Sector. He was in charge of the overall supervision of twenty-three (23) employees working under the sales and marketing organization. In March, 1998, Jesus Fargas was promoted to the position of Country Manager for Becton, Phils. Respondent, on the other hand, was appointed Business Director thereof, reporting, this time, to the Country Manager instead of the Vice President of Diagnostics Sector of Becton, Asia. Respondent was responsible for sales and marketing of Infectious Disease Diagnostic, Immunocytometry System, and Instrument Service for the Asia Pacific Region. He held this position up to December, 1999.

On appeal, the NLRC upheld the Labor Arbiter’s decision but it reversed too the award for separation pay, the closure of Galaxie’s business being due to serious business losses. ISSUE (1) Whether or not [Galaxie] is guilty of unfair labor practice in closing its business operations shortly after petitioner union filed for certification election. (2) Whether or not the written notice posted by [Galaxie] on the company bulletin board sufficiently complies with the notice requirement under Article 283 of the Labor Code. RULING Galaxie’s documentary evidence shows that it had been experiencing serious financial losses at the time it closed business operations; supported by substantial evidence consisting of the audited financial statements showing that Galaxie continuously incurred losses from 1997 up to mid-1999. True, the union was seeking the holding of a certification election at the time that Galaxie closed its business operation, but that, without more, was not sufficient to attribute antiunionism against Galaxie. Petitioners failed to present concrete evidence supporting their claim of unfair labor practice. Unfair labor practice refers to acts that violate the workers’ right to organize, and are defined in Articles 248 and 261 of the Labor Code. The prohibited acts relate to the workers’ right to self-organization and to the observance of Collective Bargaining Agreement without which relation the acts, no matter how unfair, are not deemed unfair labor practices.

In January, 2000, Becton, Phils. reorganized under the concept of Go To Market. For purposes of selling its products, Becton, Phils. had organized two (2) divisions, namely, the Sales Division and the Marketing Division, and designated respondent as the Director of Sales. As such, respondent was responsible for the whole sales force for all products of the company. Under the foregoing reorganization, the Sales Division was responsible for in-market sales or the sale of all the products of the company to the distributors. The distributors who buy the products at wholesale, in turn, are the ones selling the products to the end users. The company is, however, generally responsible for the sale promotions of the company’s products to the end users.

With regard to the notice requirement, the Labor Arbiter found, and it was upheld by the NLRC and the Court of Appeals, that the written notice of closure or cessation of Galaxie’s business operations was posted on the company bulletin board one month prior to its effectivity. The mere posting on the company bulletin board does not, however, meet the requirement under Article 283 of "serving a written notice on the workers." The purpose of the written notice is to inform the employees of the specific date of termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give them sufficient time to make the

Eventually, respondent was also appointed one of the members of the Becton Dickinson (BD) Philippines Leadership Team, a group within Becton, Phils., which was responsible for the formulation of policies and rules of the company. In November, 2000, pursuant to its established policies

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and guidelines for terminating employees, Becton, Phils. retrenched nine (9) employees, giving them separation benefits in accordance with such guidelines. Its very own Country Manager, Jesus Fargas, was among those whose services were terminated. Accordingly, each of them received separation benefits. In addition thereto, the nine (9) terminated employees were also paid retirement benefits.

of a particular product line or service activity previously manufactured or undertaken by the enterprise. Furthermore, the managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker.

On May 16, 2001, Becton, Asia announced the appointment of petitioner Wilfredo Joaquin, a former Filipino citizen who later acquired American citizenship, as the new Country Manager of Becton, Phils. Being a stranger to the companys operations, as well as to the customers of Becton, Phils., Joaquin sought respondents assistance to address serious problems of the company, and to orient him in the mechanics of the companys sales and marketing efforts in the Philippines.

A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of whether signing a release and quitclaim and accept what the company offers them, or refusing to sign and walk out without receiving anything, may do succumb to the same pressure, being very well aware that it is going to take quite a while before he can recover whatever he is entitled to, because it is only after a protracted legal battle starting from the labor arbiter level, all the way to this Court, can he receive anything at all. The Court understands that such a risk of not receiving anything whatsoever, coupled with the probability of not immediately getting any gainful employment or means of livelihood in the meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange of some amount of money which may be way below what he may be entitled to based on company practice and policy or by law.

Then, on that fateful day of July 10, 2001 or barely two (2) months from Joaquins assumption of his position as Country Manager, Becton, Phils. served upon respondent a notice of terminationof employment effective August 10, 2001, on the ground that his position has been declared redundant. Respondent was terminated and required to sign a Release and Quitclaim,[14] otherwise, his separation pay and retirement benefits will be withheld. Respondent found no other alternative but to give in, and reluctantly signed the document.

It may likewise be noted that what respondent received when he signed the Release and Quitclaim was less than half of what he is entitled to under the circumstances, as correctly computed by the Labor Arbiter in his March 26, 2002 decision. This is another reason why the Court cannot rely upon such Release and Quitclaim to validly bar respondent from thereafter claiming additional benefits from petitioner Becton, Phils..

ISSUE Whether or not private respondent Esmaquel is illegally dismissed. RULING Yes. Petitioner’s utterly failed to establish by substantial evidence that indeed, respondents position in the company became redundant due to concrete and real factors recognized by law and relevant jurisprudence. Redundancy is one of the authorized causes of dismissal. Redundancy in an employer’s personnel force necessarily or even ordinarily refers to duplication of work. That no other person was holding the same position that private respondent held prior to the termination of his services, does not show that his position had not become redundant. Indeed, in any well 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 Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decrease in volume of business, or dropping

ORIENTAL PETROLEUM v. FUENTES GR. No. 151818, October 14, 2005 Petitioner Oriental Petroleum and Minerals Corporation, through its Senior Vice President for Operations and Administration, Apollo P. Madrid, informed respondents of its retrenchment program as a consequence of which respondents would be terminated from employment. They were also advised that they would receive greater separation benefits if they qualify for retirement or resignation benefits under the retirement plan. Petitioner and respondents could not agree on the amounts. The latter then filed separate complaints8 for illegal retrenchment with prayer for the payment of backwages, actual damages, moral and exemplary damages, and attorney’s fees. Labor Arbiter dismissed the complaint. NLRC held that petitioner’s serious financial difficulties necessitated the retrenchment of respondents.

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ISSUE Whether or not petitioner undertook a valid retrenchment as it was already actually sufferingserious financial losses

FASAP v. PAL G.R. No. 178083, July 22, 2008, Ynares Santiago Petitioner is the EBR of respondent’s flight attendants and stewards. Due to its alleged financial loss, respondent made a retrenchment scheme, thereby, terminating many of the employees, including members of petitioner union. As a consequence, petitioner filed for illegal dismissal on the ground that the retrenchment scheme of the respondent is illegal.

HELD Retrenchment is one of the authorized causes recognized by the Labor Code for the dismissal of employees. It is a management prerogative resorted to by employers to avoid or minimize business losses. The Court has laid down the following standards that a company must meet to justify retrenchment and to foil abuse: 1. Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. 2. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. There should, in other words, be a certain degree of urgency for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retired or otherwise laid-off. 3. thirdly, it must be reasonably necessary and likely to effectively prevent the expected losses. 4. Lastly, but certainly not the least important, alleged losses if already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence.

ISSUE Whether or not the retrenchment scheme by PAL is valid RULING No. while it is true that the exercise of this right is a prerogative of management, there must be faithful compliance with substantive and procedural requirements of the law and jurisprudence, for retrenchment strikes at the very heart of the workers employment, the lifeblood upon which he and his family owe their survival. Retrenchment is only a measure of last resort, when other less drastic means have been tried and found to be inadequate. The burden clearly falls upon the employer to prove economic or business losses with sufficient supporting evidence. Its failure to prove these reverses or losses necessarily means that the employees dismissal was not justified. Any claim of actual or potential business losses must satisfy certain established standards, all of which must concur, before any reduction of personnel becomes legal. These are: (1) That retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer;

Financial statements, in themselves, do not suffice to meet the stringent requirement of the law that the losses must be substantial, continuing and without any immediate prospect of abating. Retrenchment being a measure of last resort, petitioner should have been able to demonstrate that it expected no abatement of its losses in the coming years. Petitioner having failed in this regard, we find that the Court of Appeals did not err in dismissing as unimpressive and insufficient petitioner’s audited financial statements.

(2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one (1) month pay or at least one-half () month pay for every year of service, whichever is higher; (4) That the employer exercises prerogative to retrench employees good faith for the advancement of interest and not to defeat

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its in its or

circumvent the employees right to security of tenure; and,

Viajar. On appeal, the NLRC affirmed LAs decision. Viajar filed a petition before the Court of Appeals. The CA granted the petition. Thus, GMC filed this instant petition for review before the Supreme Court.

(5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and financial hardship for certain workers.[45]

ISSUE Whether or not Viajar was validly terminated from GMC HELD The petition is denied. Art. 283 of the Labor Code provides that redundancy is one of the authorized causes for dismissal. It is imperative that the employer must comply with the requirements for a valid implementation of the companys redundancy program, to wit: (a) the employer must serve a written notice to the affected employees and the DOLE at least one (1) month before the intended date of retrenchment; (b) the employer must pay the employees a separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (c) the employer must abolish the redundant positions in good faith; and (d) the employer must set fair and reasonable criteria in ascertaining which positions are redundant and may be abolished.

In the instant case, PAL failed to substantiate its claim of actual and imminent substantial losses which would justify the retrenchment of more than 1,400 of its cabin crew personnel. Although the Philippine economy was gravely affected by the Asian financial crisis, however, it cannot be assumed that it has likewise brought PAL to the brink of bankruptcy. Likewise, the fact that PAL underwent corporate rehabilitation does not automatically justify the retrenchment of its cabin crew personnel. Moreover, in assessing the overall performance of each cabin crew personnel, PAL only considered the year 1997. This makes the evaluation of each cabin attendants efficiency rating capricious and prejudicial to PAL employees covered by it. By discarding the cabin crew personnels previous years of service and taking into consideration only one years worth of job performance for evaluation, PAL virtually did away with the concept of seniority, loyalty and past efficiency, and treated all cabin attendants as if they were on equal footing, with no one more senior than the other.

MARICALUM MINING V. DECORION G.R. No. 158637, April 12, 2006, Tinga Decorion was a regular employee of Maricalum Mining. Because of his alleged insubordination for failure to attend a meeting, he was placed under preventive suspension. He was also not allowed to report for work the following day. [See Ruling for other relevant facts and dates]

In sum, PALs retrenchment program is illegal because it was based on wrongful premise (Plan 14, which in reality turned out to be Plan 22, resulting in retrenchment of more cabin attendants than was necessary) and in a set of criteria or rating variables that is unfair and unreasonable when implemented. It failed to take into account each cabin attendants respective service record, thereby disregarding seniority and loyalty in the evaluation of overall employee performance.

ISSUE Was the suspension justified? HELD No. Sections 8 and 9 of Rule XXIII, Book V of the Implementing Rules provide as follows: Section 8. Preventive suspension. --The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or his co-workers.

GENERAL MILLING CORPORATION v. VIOLETA L. VIAJAR G.R. No. 181738, January 30, 2013 Violeta Viajar received a Letter-Memorandum from General Milling Corporation (GMC) informing her that her services are no longer needed because her position as Purchasing Staff was deemed redundant. When Viajar reported for work on October 31, 2003, a month prior the effectivity from her severance from GMC, the guard on duty prevented her from entering the companys premises. She was also asked to sign an Application for Retirement and Benefits. Viajar refused to sign. Thus, she filed a complaint for illegal dismissal. The Labor Arbiter ruled in favor of GMC and held that the latter acted in good faith in terminating

Section 9. Period of Suspension --No preventive suspension shall last longer than thirty (30) days. XXX

In this case, Decorion was suspended only because he failed to attend a meeting called by his supervisor. There is no evidence to indicate that his failure to attend the meeting prejudiced his employer or that his

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presence in the company’s premises posed a serious threat to his employer and co-workers. The preventive suspension was clearly unjustified.

answer directly the allegations attributed to her; and (3) Memorandum seeking from the private respondent an explanation regarding the incidents reported by Uniwide employees and security personnel for alleged irregularities committed by the private respondent such as allowing the entry of unauthorized persons inside a restricted area during non-office hours, falsification of or inducing another employee to falsify personnel or company records, sleeping and allowing a nonemployee to sleep inside the private office, unauthorized search and bringing out of company records, purchase of damaged home furnishing items without the approval from superior, taking advantage of buying damaged items in large quantity, alteration of approval slips for the purchase of damaged items and abandonment of work.

What is more, Decorion’s suspension persisted beyond the 30-day period allowed by the Implementing Rules. XXX . The Court ruled that preventive suspension which lasts beyond the maximum period allowed by the Implementing Rules amounts to constructive dismissal. Similarly, from the time Decorion was placed under preventive suspension on April 11, 1996 up to the time a grievance meeting was conducted on June 5, 1996, 55 days had already passed. Another 48 days went by before he filed a complaint for illegal dismissal on July 23, 1996. Thus, at the time Decorion filed a complaint for illegal dismissal, he had already been suspended for a total of 103 days.

In a letter, private respondent answered the allegations made against her. On August 2, 1998, Apduhan issued a Memorandum, advising Kawada of a hearing scheduled on August 12, 1998 and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence. On August 3, 1998, private respondent thinking that she was constructively dismissed, filed a case for illegal dismissal before the Labor Arbiter (LA). On August 8, 1998, Apduhan sent a letter addressed to private respondent, which the latter received on even date, advising private respondent to report for work, as she had been absent since August 1, 1998; and warning her that upon her failure to do so, she shall be considered to have abandoned her job.

Decorions preventive suspension had already ripened into constructive dismissal at that time. While actual dismissal and constructive dismissal do take place in different fashion, the legal consequences they generate are identical. UNIWIDE SALES WAREHOUSE CLUB VS. NLRC G.R. No. 154503, February 29, 2008 TOPIC: Constructive Dismissal; Abandonment DOCTRINE: Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee.

On September 1, 1998, Apduhan issued a Memorandum stating that since private respondent was unable to attend the scheduled August 12, 1998 hearing, the case was evaluated on the basis of the evidence on record; and enumerating the pieces of evidence of the irregularities and violations of company rules committed by private respondent, the latter's defenses and the corresponding findings by Uniwide. Kawada was thereafter terminated from her employment on the grounds of violations of Company Rules, Abandonment of Work and loss of trust and confidence.

The test of constructive dismissal is whether a reasonable person in the employee's position would have felt compelled to give up his position under the circumstances. It is an act amounting to dismissal but made to appear as if it were not. In fact, the employee who is constructively dismissed may be allowed to keep on coming to work. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.

ISSUE Whether or dismissed.

FACTS Amalia Kawada, a Full Assistant Store Manager received 3 Memorandums issued by the Store Manager Apduhan: (1) summarizing the various reported incidents signifying unsatisfactory performance on the latter's part which include the commingling of good and damaged items, sale of a voluminous quantity of damaged toys and ready-towear items at unreasonable prices, and failure to submit inventory reports; (2) Memorandum satting that the answers given were all hypothetical and did not

not

respondent

was

constructively

HELD No. The Court finds that private respondent's allegation of harassment is a specious statement which contains nothing but empty imputation of a fact that could hardly be given any evidentiary weight by this Court. Private respondent's bare allegations of constructive dismissal, when uncorroborated by the evidence on record, cannot be given credence.

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The right to impose disciplinary sanctions upon an employee for just and valid cause, as well as the authority to determine the existence of said cause in accordance with the norms of due process, pertains in the first place to the employer. Precisely, petitioners gave private respondent successive memoranda so as to give the latter an opportunity to controvert the charges against her. Clearly, the memoranda are not forms of harassment, but petitioners' compliance with the requirements of due process.

NORKIS TRADING CO. INC. and/or MANUEL GASPAR E. ALBOS, JR. v. MELVIN GNILO G.R. No. 159730, February 11, 2008, Austria-Martinez Melvin R. Gnilo (respondent) was initially hired by Norkis Trading Co., Inc. (petitioner Norkis) as Norkis Installment Collector (NIC) in April 1988. Manuel Gaspar E. Albos, Jr. (petitioner Albos) is the Senior Vice-President of petitioner Norkis. Respondent held various positions in the company until he was appointed as Credit and Collection Manager of Magna Financial Services Group, Inc.-Legaspi Branch, petitioner Norkis’s sister company, in charge of the areas of Albay and Catanduanes with travel and transportation allowances and a service car.

On petitioners' claim of abandonment by private respondent, well-settled is the rule that to constitute abandonment of work, two elements must concur: (1) the employee must have failed to report for work or must have been absent without valid or justifiable reason, and (2) there must have been a clear intention on the part of the employee to sever the employeremployee relationship manifested by some overt act. The employer has the burden of proof to show the employee's deliberate and unjustified refusal to resume his employment without any intention of returning. Mere absence is not sufficient. There must be an unequivocal intent on the part of the employee to discontinue his employment.

A special audit team was conducted in respondent's office in Legaspi, Albay from March 13 to April 5, 2000 when it was found out that respondent forwarded the monthly collection reports of the NICs under his supervision without checking the veracity of the same. It appeared that the monthly collection highlights for the months of April to September 1999 submitted by respondent to the top management were all overstated particularly the account handled by NIC Dennis Cadag. Respondent was then charged by petitioners' Inquiry Assistance Panel (Panel) with negligence of basic duties and responsibilities resulting in loss of trust and confidence and laxity in directing and supervising his own subordinates. During the investigation, respondent admitted that he was negligent for failing to regularly check the report of each NIC under his supervision; that he only checked at random the NIC's monthly collection highlight reports; and that as a leader, he is responsible for the actions of his subordinates. He however denied being lax in supervising his subordinates, as he imposed discipline on them if the need arose.

Private respondent's failure to report for work despite the August 8, 1998 letter sent by Apduhan to private respondent advising the latter to report for work is not sufficient to constitute abandonment. It is a settled rule that failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment. Private respondent mistakenly believed that the successive memoranda sent to her from March 1998 to June 1998 constituted discrimination, insensibility or disdain which was tantamount to constructive dismissal. Thus, private respondent filed a case for constructive dismissal against petitioners and consequently stopped reporting for work.

On May 30, 2000, petitioner Norkis through its Human Resource Manager issued a memorandum placing respondent under 15 days suspension without pay, travel and transportation allowance, effective upon receipt thereof. Respondent filed a letter protesting his suspension and seeking a review of the penalty imposed.

The Court finds that petitioners were not able to establish that private respondent deliberately refused to continue her employment without justifiable reason. To repeat, the Court will not make a drastic conclusion that private respondent chose to abandon her work on the basis of her mistaken belief that she had been constructively dismissed by Uniwide.

Another memorandum4 dated June 30, 2000 was issued to respondent requiring him to report on July 5, 2000 to the head office of petitioner Norkis in Mandaluyong City for a re-training or a possible new assignment without prejudice to his request for a reconsideration or an appeal of his suspension. He was then assigned to the Marketing Division directly reporting to petitioner Albos.

Nonetheless, the Court agrees with the findings of the LA that 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 employer or a duly authorized representative. Private respondent occupies a managerial position. As a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal.

In a letter5 dated July 27, 2000, respondent requested petitioner Albos that he be assigned as Sales Engineer or to any position commensurate with his

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qualifications. However, on July 28, 2000, respondent was formally appointed as Marketing Assistant to petitioner Albos, which position respondent subsequently assumed. However, on October 4, 2000, respondent filed with the Labor Arbiter (LA) a complaint for illegal suspension, constructive dismissal, non-payment of allowance, vacation/sick leave, damages and attorney's fees against petitioners.

to review the records and the arguments of the parties to resolve the factual issues and render substantial justice to the parties. Well-settled is the rule that it is the prerogative of the employer to transfer and reassign employees for valid reasons and according to the requirement of its business. An owner of a business enterprise is given considerable leeway in managing his business. Our law recognizes certain rights, collectively called management prerogative as inherent in the management of business enterprises. The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.

On March 30, 2001, the LA rendered his decision6 dismissing the complaint for lack of merit. The LA found that the position of Credit and Collection Manager held by respondent involved a high degree of responsibility requiring trust and confidence; that his failure to observe the required procedure in the preparation of reports, which resulted in the overstated collection reports continuously for more than six months, was sufficient to breach the trust and confidence of petitioners and was a valid ground for termination; that instead of terminating him, petitioners merely imposed a 15-day suspension which was not illegal; and that petitioners exercised their inherent prerogative as an employer when they appointed respondent as a Marketing Assistant.

The employer bears the burden of showing that the transfer is not unreasonable, inconvenient or prejudicial to the employee; and does not involve a demotion in rank or a diminution of his salaries, privileges and other benefits.18Should the employer fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal.

Respondent appealed the LA decision to the National Labor Relations Commission (NLRC), which reversed the LA’s decision. It held that the transfer of respondent from the position of Credit and Collection Manager to Marketing Assistant resulted in his demotion in rank from Manager to a mere rank and file employee, which was tantamount to constructive dismissal and therefore illegal.

Constructive dismissal is defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution of pay.20 Likewise, constructive dismissal exists when an act of clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee, leaving him with no option but to forego his continued employment.21

Petitioners filed a petition for certiorari with the CA. Subsequently, they also filed a Motion for the Issuance of a Temporary Restraining Order or a Writ of Preliminary Injunction, as respondent had filed a Motion for the Issuance of a Writ of Execution with the NLRC. On August 25, 2003, the CA denied petitioners’ Motion for Reconsideration. Issue: WON private dismissed.

respondent

was

A transfer is defined as a "movement from one position to another which is of equivalent rank, level or salary, without break in service."22 Promotion, on the other hand, is the "advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary."23Conversely, demotion involves a situation in which an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in salary.

constructively

Ruling: Petitioners contend that factual findings of quasijudicial agencies, while generally accorded finality, may be reviewed by this Court when the findings of the NLRC and the LA are contradictory; that in the exercise of its equity jurisdiction, this Court may look into the records of the case to re-examine the questioned findings.

In this case, while the transfer of respondent from Credit and Collection Manager to Marketing Assistant did not result in the reduction of his salary, there was a reduction in his duties and responsibilities which amounted to a demotion tantamount to a constructive dismissal as correctly held by the NLRC and the CA.

The general rule is that the factual findings of the NLRC, as affirmed by the CA, are accorded high respect and finality unless the factual findings and conclusions of the LA clash with those of the NLRC and the CA, as it appears in this case. Thus we have

As Credit and Collection Manager, respondent was clothed with all the duties and responsibilities of a managerial employee. On the other hand, the work of

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a Marketing Assistant is clerical in nature, which does not involve the exercise of any discretion.

FACTS Rodelia S. Fungo, petitioner, alleged in her petition that she was employed as secretary of respondent Fr. Servillano B. Bustamante, rector of Lourdes School of Mandaluyong. Respondent Fr. Bustamante authorized her to file and keep confidential documents in his office. He entrusted to her the duplicate keys of the filing cabinet and she was allowed to take any document therefrom whenever she had to bring some matters to his attention.

There is constructive dismissal when an employee's functions, which were originally supervisory in nature, were reduced; and such reduction is not grounded on valid grounds such as genuine business necessity. Moreover, petitioners failed to refute respondent’s claim that as Credit and Collection Manager, he was provided with a service car which was no longer available to him as Marketing Assistant; thus, such was a reduction in his benefit.

In January 1996, petitioners husband, Nicolas Fungo, an elementary school teacher in the same school, was dismissed from the service because of his low performance rating. According to petitioner, her husband’s services were terminated because of his statement during a faculty meeting that the Mission and Vision Statement of the school is not being practiced. He was also one of those who signed a letter asking the Provincial Minister of the Capuchins in the Philippines to appoint Fr. Miguel Peralta either as rector or vice rector of the school. Fr. Peralta is a close rival of respondent Fr. Bustamante since their seminary days.

Anent petitioners' claim that respondent unconditionally accepted his formal appointment as Marketing Assistant on August 3, 2000, we note that in a letter dated July 27, 2000 addressed to petitioner Albos when he learned that he would be assigned as a Marketing Assistant, respondent had expressed reservations on such assignment and asked that he instead be assigned as Sales Engineer or to any position commensurate to his qualifications. Respondent could not be faulted for accepting the position of a Marketing Assistant, since he did so and stayed put in order to compare and evaluate his position. However, he experienced not only a demotion in his duties and responsibilities, an undignified treatment by his immediate superior, which prompted him to file this case.

Petitioner then wrote respondent Fr. Bustamante questioning the performance rating given to her husband. She attached to her letter documents containing the summary of efficiency ratings of all the teachers. She retrieved these documents from the filing cabinet.

We note that the alleged overstated collection reports of three NICs under respondent's supervision submitted in 1997, were already mentioned in the IAP report of the 1999 incident for which respondent was meted the penalty of 15- day suspension without salary, travel and transportation allowance; thus, the same could no longer be used to justify his transfer. Moreover, respondent's demotion, which was a punitive action, was, in effect, a second penalty for the same negligent act of respondent.

On March 8, 1996 petitioner received a letter from respondent Fr. Bustamante requiring her to explain in writing why she should not be dismissed from employment for willful breach of trust reposed on her. On March 11, 1996, petitioner filed her written explanation.

Doctrine: Resignation is the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment. Resignation is inconsistent with the filing of the complaint.

Petitioner further alleged in her petition that in the morning of April 1, 1996, Fr. Manuel Remirez, the school treasurer, summoned her to his office. Thereupon, he compelled her to tender her resignation within 30 minutes, otherwise, she will not receive her separation pay. Petitioner pleaded for one day deferment so she could consult her aunt, Milagros Tadeo, former assistant principal on academics for the elementary department of the same school. However, Fr. Remirez denied her plea. Considering that her husband was jobless and that her family was in financial predicament, petitioner submitted her resignation letter on the very same day. Subsequently, she received her separation pay.

There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego her continued employment.

On January 28, 1997, petitioner filed with the Labor Arbiter a complaint for illegal dismissal with prayer for reinstatement and payment of backwages and other benefits, as well as for an award of moral and exemplary damages and attorneys fees. Petitioner

Petition denied RODELIA FUNGO V. LOURDES SCHOOL OF MANDALUYONG G.R. No. 152531, July 27, 2007

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alleged therein that she was forced to resign and to accept her separation pay; and that Fr. Remirez took advantage of her economic plight, compelling her to submit her resignation letter within 30 minutes.

her resignation within 30 minutes. He threatened her that if she would not resign, her separation pay would be forfeited. These circumstances glaringly show that respondents wanted to terminate her employment, but they made it appear that she voluntarily resigned.

The LA found that petitioner was constructively dismissed. This was reversed by the NRLC holding that petitioner voluntarily resigned. When her motion for reconsideration was denied, petitioner went to CA which dismissed the petition. With her motion for reconsideration being denied, petitioner elevated the case to the SC.

Resignation is the voluntary act of employees who are compelled by personal reasons to disassociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment. It would have been illogical therefore for the petitioner to resign and then file a complaint for illegal dismissal. Resignation is inconsistent with the filing of the complaint.

ISSUE WON the petitioner was constructively dismissed from the service. - YES

There is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego her continued employment.

RULING Respondents argue that petitioners act of retrieving the document from the files inside the rector’s office was improper and constituted a willful breach of the trust reposed upon her by Fr. Bustamante. Such breach of trust is a just cause for terminating her services.

An examination of the records of this case convinced us that petitioner was indeed made to resign against her will with threat that she will not be given her separation pay should she fail to do so. Clearly, her consent was vitiated. Indeed, it is very unlikely that petitioner, who worked in the school for almost fifteen (15) years, would simply resign voluntarily. Her receipt of the benefits could be considered as an act of selfpreservation, taking into consideration the financial predicament she and her family were then facing. Thus, we rule that petitioner was constructively dismissed from her employment.

To be a valid ground for dismissal, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer In Nokom v. National Labor Relations Commission, we set the guidelines for the application of loss of confidence as a just cause for dismissing an employee from the service, thus: a. loss of confidence should not be simulated; b. it should not be used as a subterfuge for causes which are improper, illegal or unjustified; c. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and d. it must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

Under Article 279 of the Labor Code, 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 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. Considering, however, that the nature of petitioners work requires constant interaction with Fr. Bustamante, their working relationship has been strained. Thus, the payment of separation pay and other benefits in lieu of reinstatement is in order.

In the instant case, Fr. Bustamante entrusted to petitioner various documents in his office. She could take any document from the filing cabinet inside his office. While she retrieved documents pertaining to the efficiency ratings of all teachers in the school for the year 1990-1991, such act did not constitute a breach of trust and confidence since she did not show those documents to any other person except to Fr. Bustamante himself. Significantly, he did not dispute the fact that petitioner had access to the records.

THE UNIVERSITY OF THE IMMACULATE CONCEPTION V. NLRC G.R. No. 181146, January 26, 2011, Carpio Private respondent Teodora C. Axalan is a regular faculty member in the Petitioner Uiversity holding the position of Associate Professor II. From 18 November to 22 November 2002, Axalan attended a seminar in Quezon City on website development. Axalan then received a memorandum from Dean Maria Rosa Celestial asking her to explain in writing why she should not be dismissed for having been absent without official leave. In her letter, Axalan claimed that

When petitioner asked Fr. Bustamante why her husbands performance rating was low, Fr. Remirez summoned her to his office and urged her to tender

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ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION and/or JESS MANUEL v. IRENE R. RANCHEZ G.R. No. 177937, January 19, 2011

she held online classes while attending the seminar. She explained that she was under the impression that faculty members would not be marked absent even if they were not physically present in the classroom as long as they conducted online classes.

Respondent Ranchez was a probationary employee for 5 months. She was hired as a cashier by Robinsons sometime within that period. Two weeks after she was hired, she reported the loss of cash which she had placed in the company locker. She offered to pay for the lost amount but the Operations Manager of Robinsons had her strip-searched then reported her to the police even though they found nothing on her person. An information for Qualified Theft was filed with the Quezon City Regional Trial Court. She was detained for 2 weeks for failure to immediately post bail. Weeks later, respondent Ranchez filed a complaint for illegal dismissal and damages. A year later, Robinsons sent to respondent by mail a notice of termination and/or notice of expiration of probationary employment.

ISSUE Was Axalan constructively dismissed? HELD NO. “Constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or diminution in pay or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee leaving the latter with no other option but to quit.” “In this case however, there was no cessation of employment relations between the parties. It is unrefuted that Axalan promptly resumed teaching at the university right after the expiration of the suspension period. In other words, Axalan never quit. Hence, Axalan cannot claim that she was left with no choice but to quit, a crucial element in a finding of constructive dismissal. Thus, Axalan cannot be deemed to have been constructively dismissed.”

The Labor Arbiter dismissed the complaint for illegal dismissal, alleging that at the time of filing respondent Ranchez had not yet been terminated. She was merely investigated. However, the NLRC reversed this ruling, stating that Ranchez was illegally dismissed and that Robinson's should reinstate her. It held that Ranchez was deprived of due process when she was stripsearched and sent to jail for two weeks because such amounted to constructive dismissal, making it impossible for the respondent to continue under the employment. Even though she was merely a probationary employee, the lapse of the probationary contract did not amount to a valid dismissal because there was already an unwarranted constructive dismissal beforehand.

“Note that on the first AWOL incident, the university even offered to drop the AWOL charge against Axalan if she would only write a letter of contrition. But Axalan adamantly refused knowing fully well that the administrative case would take its course leading to possible sanctions. She cannot now be heard that the imposition of the penalty of six-month suspension without pay for each AWOL charge is unreasonable. We are convinced that Axalan was validly suspended for cause and in accord with procedural due process.”

ISSUE Whether respondent was legally terminated from employment by petitioners.

“The Court recognizes the right of employers to discipline its employees for serious violations of company rules after affording the latter due process and if the evidence warrants. The university, after affording Axalan due process and finding her guilty of incurring AWOL on two separate occasions, acted well within the bounds of labor laws in imposing the penalty of six-month suspension without pay for each incidence of AWOL.”

HELD NO. The petition is unmeritorious.

“As a learning institution, the university cannot be expected to take lightly absences without official leave among its employees, more so among its faculty members even if they happen to be union officers. To do so would send the wrong signal to the studentry and the rest of its teaching staff that irresponsibility is widely tolerated in the academe.”

A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code,i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the

There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.

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engagement.Thus, the services of an employee who has been engaged on probationary basis may be terminated for any of the following:

work. It was then that he found out to his dismay that the resort was far from finished. However, he was instructed to supervise construction and speak with potential guests. He also undertook the overall preparation of the guestrooms and staff for the opening of the hotel, even performing menial tasks. As Johnson remained unpaid since August 2007 and he has loaned all his money to petitioners, he asked for his salary after the resort was opened but the petitioners refused. Johnson became very alarmed with the situation. After another embarrassment was handed out by petitioner Prentice in front of the staff, which highlighted his lack of real authority in the hotel and the disdain for him by petitioners, respondent Johnson was forced to submit his resignation.

(1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. Article 277(b) of the Labor Code mandates that the employer shall furnish the worker, whose employment is sought to be terminated, a written notice containing a statement of the causes of termination, and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of a representative if he so desires, in accordance with company rules and regulations pursuant to the guidelines set by the Department of Labor and Employment.

ISSUE Whether or not Johnson voluntarily resigned. HELD No. Although the resort did not open until approximately 8th October 2007, Johnson's employment began, as per Employment Agreement, on 1st August 2007. During the interim period, Johnson was frequently instructed by Prentice to supervise the construction staff and speak with potential future guests who visited the site out of curiosity. The petitioners maintain that they have paid the amount of P7,200.00 to Johnson for his three weeks of service from October 8, 2007 until November 3, 2007, the date of Johnson's resignation, which Johnson did not controvert. Even so, the amount the petitioners paid to Johnson as his three-week salary is significantly deficient as Johnson's monthly salary as stipulated in their contract is P60,000.00. Thus, the amount which Johnson should have been paid is P45,000.00 and not P7,200.00. In light of this deficiency, there is more reason to believe that the petitioners withheld the salary of Johnson without a valid reason. It only goes to show that while it was Johnson who tendered his resignation, it was due to the petitioners acts that he was constrained to resign. The petitioners cannot expect Johnson to tolerate working for them without any compensation. Since Johnson was constructively dismissed, he was illegally dismissed. Thus, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages. The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated. Under the doctrine of strained relations, the payment of separation pay is considered an

In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process.The haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutor's Office, left respondent with no choice but to cry foul. Administrative investigation was not conducted by petitioner Supermarket.On the same day that the missing money was reported by respondent to her immediate superior, the company already prejudged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks. The due process requirements under the Labor Code are mandatory and may not be replaced with police investigation or court proceedings. An illegally or constructively dismissed employee, respondent is entitled to: (1) either reinstatement, if viable, or separation pay, if reinstatement is no longer viable; and (2) backwages. These two reliefs are separate and distinct from each other and are awarded conjunctively. In this case, since respondent was a probationary employee at the time she was constructively dismissed by petitioners, she is entitled to separation pay and backwages. Reinstatement of respondent is no longer viable considering the circumstances. DREAMLAND HOTEL V. JOHNSON G.R. No. 191455, March 12, 2014 Prentice and Johnson entered into an Employment Agreement, which stipulates among others, that Johnson shall serve as Operations Manager of Dreamland from August 1, 2007 and shall serve as such for a period of three (3) years. From the start of August 2007, as stipulated in the Employment Agreement, respondent Johnson already reported for

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acceptable alternative to reinstatement when the latter option is no longer desirable or viable.

CBA, the Union properly requested the Club to enforce the Union security provision in their CBA and terminate said respondents. Then, in compliance with the Unions request, the Club reviewed the documents submitted by the Union, requested said respondents to submit written explanations, and thereafter afforded them reasonable opportunity to present their side. After it had determined that there was sufficient evidence that said respondents malversed Union funds, the Club dismissed them from their employment conformably with Sec. 4(f) of the CBA.

ALABANG COUNTRY CLUB V. NLRC G.R. No. 170287, February 14, 2008, Velasco Petitioner Alabang Country Club, Inc. (Club) is a domestic non-profit corporation with principal office at Country Club Drive, Ayala Alabang, Muntinlupa City. Respondents are Alabang Country Club Independent Employees Union (Union),the exclusive bargaining agent of the Clubs rank-and-file employees. The Club and the Union entered into a Collective Bargaining Agreement (CBA), which provided for a Union shop and maintenance of membership shop.The Union discovered some irregularly recorded entries, unaccounted expenses and disbursements, and uncollected loans from the Union funds by respondents Pizarro, Braza, and Castueras.Despite their explanations, respondents Pizarro, Braza, and Castueras were expelled from the Union.the Union, Invoking the Security Clause of the CBA, the Club dismissed upon demand of the Union the respondents Pizarro, Braza, and Castueras in view of their expulsion from the Union.

Considering the foregoing circumstances, we are constrained to rule that there is sufficient cause for the three respondents termination from employment. INGUILLO V. FIRST PHILIPPINE SCALES G.R. No. 165407 June 5, 2009, Peralta FPSI (Employer – respondent corporation) and FPSI Labor Union entered into a collective bargaining agreement. It provided for a union security clause. During the lifetime of the CBA Inguillo (petitioner) and several other FPSI employees joined another union (Nagkakaisang Lakas ng Manggagawa or NLM), NLM filed a case for intra union dispute. The med arbiter decided in favour of FPSILU and ordered the officers and members of NLM to return the P90,000 union dues erroneously collected from employees. FPSILU sought the dismissal of petitioners on the grounds of disloyalty and thus invoking the union security clause. FPSI effected the dismissal. Petitioners assail the legality of their dismissal based on the said Union Security Clause.

ISSUE Whether or not the respondents’ dismissal from the Club was proper? RULING Yes. One cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. Here, Art. II of the CBA on Union security contains the provisions on the Union shop and maintenance of membership shop. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated.

ISSUE Is the dismissal valid? RULING Yes. In terminating the employment of an employee by enforcing the Union Security Clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the union's decision to expel the employee from the union or company.

In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the unions decision to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the CBAs union security provision.

In terminating the employment of an employee by enforcing the Union Security Clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the union's decision to expel the employee from the union or company. GENERAL MILLING CORP. V. CASIO G.R. No. 149552, March 10, 2010, Leonardo de Castro

The three respondents were expelled from and by the Union after due investigation for acts of dishonesty and malversation of Union funds. In accordance with the

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The labor union Ilaw at Buklod ng Mangagawa (IBM) was the sole and exclusive bargaining agent of the rank and file employees of GMC. The union entered into a CBA with GMC. The effectivity of the said CBA was retroactive to August 1, 1991. The CBA contained a security provision. Gabiana, the IBM Regional Director, furnished Casio, et al. with copies of the Affidavits of 2 GMC employees, charging Casio, et al. with "acts inimical to the interest of the union." Gabiana then wrote a letter addressed to Eduardo Cabahug (Cabahug), GMC Vice-President for Engineering and Plant Administration, informing the company of the expulsion of Casio, et al. from the union pursuant to the Resolution. Gabiana likewise requested that Casio, et al. "be immediately dismissed from their work for the interest of industrial peace in the plant” pursuan to the security provision in the CBA.

It is similarly undisputed that IBM-Local 31, through Gabiana, the IBM Regional Director for Visayas and Mindanao, twice requested GMC, in the letters dated March 10 and 19, 1992, to terminate the employment of Casio, et al. as a necessary consequence of their expulsion from the union. It is the third requisite that there is sufficient evidence to support the decision of IBM-Local 31 to expel Casio, et al. which appears to be lacking in this case. Irrefragably, GMC cannot dispense with the requirements of notice and hearing before dismissing Casio, et al. even when said dismissal is pursuant to the closed shop provision in the CBA. The rights of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own union are not wiped away by a union security clause or a union shop clause in a collective bargaining agreement.

ISSUE Whether the dismissal from employment due to the enforcement of the union security clause in the CBA is legal?

CRAYONS PROCESSING, INC V. FELIPE PULA

RULING The dismissal is illegal. There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member. Union security clauses are recognized and explicitly allowed under Article 248(e) of the Labor Code It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for union shop and closed shop as means of encouraging workers to join and support the union of their choice in the protection of their rights and interest vis--vis the employer In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA.[26] There is no question that in the present case, the CBA between GMC and IBM-Local 31 included a maintenance of membership and closed shop clause as can be gleaned from Sections 3 and 6 of Article II. IBM-Local 31, by written request, can ask GMC to terminate the employment of the employee/worker who failed to maintain its good standing as a union member.

G.R. No. 167727, July 30, 2007, Tinga Petitioner Crayons Processing, Inc. (Crayons) employed respondent Felipe Pula (Pula) as a Preparation Machine Operator beginning June 1993. On 27 November 1999, Pula, then aged 34, suffered a heart attack and was rushed to the hospital, where he was confined for around a week. Pulas wife duly notified Crayons of her husbands medical condition. Subsequently, on 25 February 2000, Pula underwent an Angiogram Test at the Philippine Heart Center under the supervision of a Dr. Recto, who advised him to take a two-week leave from work. Following the angiogram procedure, respondent was certified as fit to work by Dr. Recto. On 11 April 2000, Pula returned to work, but 13 days later, he was taken to the company clinic after complaining of dizziness. Diagnosed as having suffered a relapse, he was advised by his physician to take a leave of absence from work for one (1) month. Pula reported back for work on 13 June 2000, armed with a certification from his physician that he was fit to work. However, Pula claimed that he was not given any post or assignment, but instead, on 20 June 2000, he was asked to resign with an offer from Crayons of P12, 000 as financial assistance. Pula refused the offer and instead filed a complaint for illegal dismissal. ISSUE Whether or not the dismissal without certification issued by a competent public health authority was proper HELD No. For a dismissal on the ground of disease to be considered valid, two requisites must concur: (a) the employee must be suffering from a disease which cannot be cured within six months and his continued

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employment is prohibited by law or prejudicial to his health or to the health of his co-employees; and (b) a certification to that effect must be issued by a competent public health authority. The burden falls upon the employer to establish these requisites, and in the absence of such certification, the dismissal must necessarily be declared illegal.

terminated the services of petitioner and that during their mandatory conference, he even told the latter that he could go back to work anytime but petitioner clearly manifested that he was no longer interested in returning to work and instead asked for separation pay. ISSUE Whether or not petitioner is entitled to SepPay

As succinctly stressed in Tan v. NLRC, it is only where there is a prior certification from a competent public authority that the disease afflicting the employee sought to be dismissed is of such nature or at such stage that it cannot be cured within six (6) months even with proper medical treatment that the latter could be validly terminated from his job.

RULING NO. A plain reading of the provision clearly presupposes that it is the employer who terminates the services of the employee found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees. It does not contemplate a situation where it is the employee who severs his or her employment ties.

Without the required certification, the characterization or even diagnosis of the disease would primarily be shaped according to the interests of the parties rather than the studied analysis of the appropriate medical professionals. The requirement of a medical certificate under Article 284 cannot be dispensed with; otherwise, it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee's illness and thus defeat the public policy in the protection of labor.

PADILLO v. RURAL BANK OF NABUNTURAN, INC. G.R. No. 199338, January 21, 2013, Perlas-Bernabe Petitioner, the late Eleazar Padillo (Padillo), was an employee of respondent Rural Bank of Nabunturan, Inc. (Bank) as its SA Bookkeeper. Due to liquidity problems in 2003, the Bank took out retirement/insurance plans with Philippine American Life and General Insurance Company (Philam Life) for all its employees in anticipation of its possible closure and the concomitant severance of its personnel. Respondent Mark Oropeza is the president and major stockholder of the bank. Padillo suffered a mild stroke due to hypertension which consequently impaired his ability to effectively pursue his work. He wrote a letter addressed to Oropeza expressing his intention to avail of an early retirement package. Despite several followups, his request remained unheeded. Not having received his claimed retirement benefits, Padillo filed with the NLRC a complaint for the recovery of unpaid retirement benefits.

The NLRCs conclusion that no such certification was required since Pula had effectively been absented due to illness for more than six (6) months is unsupported by jurisprudence and plainly contrary to the language of the Implementing Rules. The indefensibility of such conclusion is further heightened by the fact that Pula was able to obtain two different medical certifications attesting to his fitness to resume work. Assuming that the burden did fall on Pula to establish that he was fit to return to work, those two medical certifications stand as incontestable in the absence of contrary evidence of similar nature from Crayons. Then again, the burden lies solely on Crayons to prove that Pula was unfit to return to work.[32] Even absent the certifications favorable to Pula, Crayons would still be unable to justify his dismissal on the ground of ill health or disease, without the necessary certificate from a competent public health authority.

The Labor Arbiter dismissed Padillo’s complaint on the ground that the latter did not qualify to receive any benefits under Article 300 of the Labor Code as he was only fifty-five (55) years old when he resigned, while the law specifically provides for an optional retirement age of sixty (60) and compulsory retirement age of sixty-five (65). The NLRC reversed the Labor Arbiter’s ruling. The CA reversed the NLRC’s ruling but with modification. It directed the respondents to pay Padillo the amount of P50,000.00 as financial assistance exclusive of the P100,000.00 Philam Life Plan benefit.

VILLARUEL v. YEO HAN GUAN G.R. No. 169191, June 1, 2011, Peralta Doctrine: Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to separation pay under the provisions of the Labor Code. Respondent averred that petitioner was hired as machine operator from March 1993 until he stopped working sometime in February 1999 on the ground that he was suffering from illness; after his recovery, petitioner was directed to report for work, but he never showed up. Respondent claimed that he never

ISSUE Whether or not Padillo is entitled to claim for retirement benefits under the Labor Code? HELD No. In the absence of any applicable agreement, an

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employee must (1) retire when he is at least sixty (60) years of age and (2) serve at least (5) years in the company to entitle him/her to a retirement benefit of at least one-half (1/2) month salary for every year of service, with a fraction of at least six (6) months being considered as one whole year. Notably, these age and tenure requirements are cumulative and noncompliance with one negates the employee’s entitlement to the retirement benefits under Article 300 of the Labor Code altogether.

if the suspension of operations lasts for more than 6 months. Thus is bred the issue regarding the responsibility of MMC toward its employees. Under Article 283, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations is bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees, and as long as he pays his employees their termination pay in the amount corresponding to their length of service. The cessation of operations, in the case at bar is of such nature. It was proven that MMC stopped its operations precisely due to failure to secure permit to operate a tailings pond. Separation pay must nonetheless be given to the separated employees.

In this case, it is undisputed that there exists no retirement plan, collective bargaining agreement or any other equivalent contract between the parties which set out the terms and condition for the retirement of employees, with the sole exception of the Philam Life Plan which premiums had already been paid by the Bank.

NIPPON HOUSING PHILS. VS. LEYNES G.R. No. 177816, August 3, 2011

Unfortunately, while Padillo was able to comply with the five (5) year tenure requirement – as he served for twenty-nine (29) years – he, however, fell short with respect to the sixty (60) year age requirement given that he was only fifty-five (55) years old when he retired. Therefore, without prejudice to the proceeds due under the Philam Life Plan, petitioners’ claim for retirement benefits must be denied.

Nippon Housing is engaged in the business of providing building maintenance From its original ventured into building management and gained Bay Gardens Condominium Project (the Project) of the Bay Gardens Condominium Corporation (BGCC) as its first and only building maintenance client. They hired respondent Maiah Angela Leynes on 26 March 2001 for the position of Property Manager, with a salary of P40,000.00 per month. Her responsibilities include surveying the requirements of the government and the client for said project, the formulation of house rules and regulations, the preparation of the annual operating and capital expenditure budget, hiring and deployment of manpower, salary and position determination as well as the assignment of the schedules and responsibilities of employees. Leynes had a misunderstanding with the building engineer of the project (Cantuba) and barred the latter’s entry to the site. The Engr. also accused the former of conceit, pride and poor managerial skills. Takada, the NHPI's Vice President issued a memorandum attributing the incident to "simple personal differences" and directing Leynes to allow Engr. Cantuba to report back for work. Disappointed with this management decision, she submitted a letter to NHPI’s President (Ota) asking for an emergency leave of absence for the supposed purpose of coordinating with her lawyer regarding her resignation letter. NHPI offered the Property Manager position to Engr. Carlos Jose as a consequence Leynes' signification of her intention to resign. However, she sent another letter expressing her intention to return to work and to call off her planned resignation. However, she received a letter from the management to report instead to the main office as one in a “floating status” because someone already occupies her post. Aggrieved, Leynes filed a complaint against petitioner for illegal dismissal, unpaid salaries, benefits, damages and attorney's fees. The Labor arbiter found that the petitioner’s act of putting Leynes on a floating status was equivalent to termination without just cause. The NLRC ruled that NHPI's

MANILA MINING CORP. EMPLOYEES ASSOCIATION-FEDERATION OF FREE WORKERS CHAPTER, SAMUEL G. ZUIGA v. MANILA MINING CORP. G.R. Nos. 178222-23, September 29, 2010, Perez Respondent is a mining corporation. Due to its failure to obtain the necessary permit with the DENR-EMB’s to operate the mining business, it temporary lay-off private complainant for a period exceeding 6 months resulting in their constructive dismissal. The Union attributes bad faith on the part of MMC in implementing the temporary lay-off, hence this case. ISSUE Whether or not the layoff is illegal Whether or not the employees are entitled to a separation pay HELD The lay-off is neither illegal nor can it be considered as unfair labor practice. Even as we declare the validity of the lay-off, we cannot say that MMC has no obligation at all to the laid-off employees. The validity of its act of suspending its operations does not excuse it from paying separation pay. Article 286 of the Labor Code allows the bona fide suspension of operations for a period not exceeding six (6) months.During the suspension, an employee is not deemed terminated. As a matter of fact, the employee is entitled to be reinstated once the employer resumes operations within the 6-month period. However, Article 286 is silent with respect to the rights of the employee

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placement of Leynes on floating status was necessitated by the client's contractually guaranteed right to request for her relief. However, this was later on reversed by the CA, hence, this present petition before the SC.

RULING Yes. Although petitioner’s suspension of operations is valid because the fire caused substantial losses to petitioner and damaged its factory, it failed to prove that its suspension of operations is bona fide. The list of materials burned was not the only evidence submitted by petitioner. It was corroborated by pictures and the fire investigation report, and they constitute substantial evidence of petitioner’s losses.

ISSUE Whether or not Leynes’ floating status is tantamount to constructive dismissal. RULING No, the placement of Leynes on a floating status due to redundancy is valid. The record, moreover, shows that NHPI simply placed her on floating status "until such time that another project could be secured" for her. The rule is settled, however, that "off-detailing" is not equivalent to dismissal, so long as such status does not continue beyond a reasonable time and that it is only when such a "floating status" lasts for more than six months that the employee may be considered to have been constructively dismissed. A complaint for illegal dismissal filed prior to the lapse of said sixmonth and/or the actual dismissal of the employee is generally considered as prematurely filed. Since the petitioner has no other client for the building management side of its business, it acted within its prerogatives when it eventually terminated Leynes' services on the 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 reasonably needed to meet the demands of the business enterprise.

Under Article 286 of the Labor Code, the bona fide suspension of the operations of a business or undertaking for a period not exceeding six months shall not terminate employment. Article 286 provides: ART. 286. When employment not deemed terminated. – The bona fide suspension of the operations of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking for a period not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated. By the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a period exceeding six months, then he is in effect constructively dismissed. Indeed, petitioner’s manifestation dated October 2, 2001 that it is willing to admit respondents if they return to work was belatedly made, almost one year after petitioner’s suspension of operations expired in November 2000. We find that petitioner no longer recalled, nor wanted to recall, respondents after six months.

SKM ARTCRAFT CORPORATION vs. BAUCA G.R. No. 171282, November 27, 2013, Villarama

The 23 respondents were employed by petitioner SKM Art Craft Corporation which is engaged in the handicraft business. On April 18, 2000, around 1:12 a.m., a fire occurred at the inspection and receiving/repair/packing area of petitioner’s premises in Intramuros, Manila. The fire investigation report stated that the structure and the beach rubber building were totally damaged. Also burned were four container vans and a trailer truck. The estimated damage was P22 million. On May 8, 2000, petitioner informed respondents that it will suspend its operations for six months, effective May 9, 2000. On May 16, 2000, only eight days after receiving notice of the suspension of petitioner’s operations, the 23 respondents (and other co-workers) filed a complaint for illegal dismissal. They alleged that there was discrimination in choosing the workers to be laid off and that petitioner had discovered that most of them were members of a newly-organized union.

JACKBILT INDUSTRIES V. JACKBILT EMPLOYEES UNION G.R. Nos. 171618-19, March 20, 2009, Corona Due to the adverse effects of the Asian economic crisis on the construction industry, petitioner decided to temporarily stop its business of producing concrete hollow blocks, compelling most of its employees to go on leave for six months. Respondent union immediately protested the temporary shutdown. Because its collective bargaining agreement with petitioner was expiring during the period of the shutdown, respondent claimed that petitioner halted production to avoid its duty to bargain collectively. The

ISSUE Whether or not respondents were illegally dismissed

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shutdown was allegedly motivated by anti-union sentiments. Accordingly, respondent went on strike. Its officers and members picketed petitioner’s main gates and deliberately prevented persons and vehicles from going into and out of the compound.

proceeded to the barangay office to show support for an officer of the Union charged with oral defamation by PINA’s personnel manager. As a result of the walkout, PINA preventively suspended all officers of the Union and terminated the officers of the Union after a month. The Union later conducted a strike but the same was declared to be an illegal strike by the Labor Arbiter. The NLRC sustained the finding of the illegality of the strike, but ruled that the union members should not be considered to have abandoned their employment on the ground that mere participation of a union member in an illegal strike does not mean loss of employment. Petitioners were ordered reinstated.

Petitioner filed a petition for injunction with a prayer for the issuance of a TRO in the NLRC. NLRC issued a TRO directing the respondents to refrain from preventing access to petitioner’s property. The union violated such order. The union officers and members were then required to explain but they refused to do so. Thus, they were dismissed. Respondents then filed a complaint before the LA. The labor arbiter dismissed the complaints for illegal lockout and unfair labor practice for lack of merit. However, because petitioner did not file a petition to declare the strike illegal before terminating respondent’s officers and employees, it was found guilty of illegal dismissal. NLRC only modified the monetary award. CA held that the temporary shutdown was moved by anti-union sentiments. Petitioner was therefore guilty of unfair labor practice. Petitioner asserts that the filing of a petition to declare the strike illegal was unnecessary since the NLRC, in its July 17, 1998 decision, had already found that respondent committed illegal acts in the course of the strike.

ISSUE Is payment of separation pay in lieu of reinstatement allowed? RULING Yes. The absence from an order of reinstatement of an alternative relief should the employer or a supervening event not within the control of the employee prevent reinstatement negates the very purpose of the order. The judgment favorable to the employee is thereby reduced to a mere paper victory, for it is all too easy for the employer to simply refuse to have the employee back. To safeguard the spirit of social justice that the Court has advocated in favor of the working man, therefore, the right to reinstatement is to be considered renounced or waived only when the employee unjustifiably or unreasonably refuses to return to work upon being so ordered or after the employer has offered to reinstate him.

ISSUE Whether or not the filing of a petition with the labor arbiter to declare a strike illegal is a condition sine qua non for the valid termination of employees who commit an illegal act in the course of such strike RULING Not a condition sine qua non. Article 264(e) of the Labor Code prohibits any person engaged in picketing from obstructing the free ingress to and egress from the employer’s premises. Since respondent was found by the NLRC to have prevented the free entry into and exit of vehicles from petitioner’s compound, respondent’s officers and employees clearly committed illegal acts in the course of the strike. The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. Consequently, we uphold the legality of the dismissal of respondent’s officers and employees. Article 264 of the Labor Code further provides that an employer may terminate employees found to have committed illegal acts in the course of a strike. Petitioner clearly had the legal right to terminate respondent’s officers and employees.

However, separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers continued employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations between the employer and employee. Here, PINA manifested that the reinstatement of the petitioners would not be feasible because: (a) it would inflict disruption and oppression upon the employer; (b) petitioners [had] stayed away for more than 15 years; (c) its machines had depreciated and had been replaced with newer, better ones; and (d) it now sold goods through independent distributors, thereby abolishing the positions related to sales and distribution.

ESCARIO v. NLRC G.R. No. 160302, September 27, 2010, Bersamin

The appropriate amount for separation pay is one month per year of service.

Officers and members of Malayang Samahan ng mga Manggagawa sa Balanced Foods walked out of the premises of Pinakamasarap Corporation (PINA) and

ABARIA VS. NLRC

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G.R. No. 154113

PILA filed a complaint for ULP and illegal dismissal. On July 7, 1995, Acting Labor Secretary Brillantes assumed jurisdiction over the dispute and ordered all striking employees (except those terminated) to return to work within 24 hours. On the same day, PILA ended its strike.

Due to a violation to the constitution and by-laws of the Federation to which they belong to, the officers of the said union are temporarily suspended from their office and membership pending investigation. The next day said union together with some of its members launch a series of mass action through "picketing" (wearing red and black armbands and marching around the hospital with their placards, posters and streamers), however for the span of 5 months prohibited acts were committed by the strikers such as blocking the ingress and egress of the hospital and violence substantiated with pictures.

On Aug. 28, 1995, PHIMCOM filed a petition to declare the strike illegal claiming that the strikers prevented ingress to and egress from the PHIMCO compound, thereby paralyzing PHIMCO’s operations. LA found the strike illegal. NLRC reversed the decision. Meanwhile, the LA declared the dismissal illegal. The NLRC consolidated the two cases and ruled totally in the union’s favor. CA affirmed. MR was denied. Hence, this petition.

Later it was found and proven that the said "union" conducting the strike is not a legitimate labor organization registered with DOLE.

ISSUE 1. Was the strike illegal? 2. Was there illegal dismissal?

Both the Union officers and union members were terminated

HELD (1) Yes. Despite the validity of the purpose of a strike and compliance with the procedural requirements, a strike may still be held illegal where the means employed are illegal falling within the prohibitions under Art. 264(e) of the Labor Code. While the picket was moving, the movement was in circles, very close to the gates, with the strikers in a hand-to-shoulder formation without a break in their ranks, thus preventing non-striking workers and vehicles from coming in and getting out. Supported by actual blocking benches and obstructions, what the union demonstrated was a very persuasive and quietly intimidating strategy whose chief aim was to paralyze the operations of the company, not solely by the work stoppage of the participating workers, but by excluding the company officials and non-striking employees from access to and exit from the company premises. No doubt, the strike caused the company operations considerable damage, as the NLRC itself recognized when it ruled out the reinstatement of the dismissed strikers.

ISSUE WON the termination was valid RULING Only the termination of union officers were said to be valid even though it was conducted by labor union not registered with DOLE as the law provides that union officers are held to be liable in cases of illegal strikes and that the union members participating in a illegal strike may only be terminated only if they committed the said illegal and/or prohibited acts during the strike. Although there was picture of violence and other prohibited acts committed by the members, they were not individually identified nor is their illegal/prohibited acts identified. PHIMCO INDUSTRIES INC. V. PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), AND ERLINDA VASQUEZ, ET AL. G.R. No. 170830, August 11, 2010, Brion

The effects of illegal strikes, outlined in Article 264 of the Labor Code, make a distinction between participating workers and union officers. The services of an ordinary striking worker cannot be terminated for mere participation in an illegal strike; proof must be adduced showing that he or she committed illegal acts during the strike. The services of a participating union officer, on the other hand, may be terminated, not only when he actually commits an illegal act during a strike, but also if he knowingly participates in an illegal strike. Erlinda Vazquez, Ricardo Sacristan, Leonida Catalan, Maximo Pedro, Nathaniela Dimaculangan, Rodolfo Mojico, Romeo Caramanza, Reynaldo Ganitano, Alberto Basconcillo, and Ramon Falcis stand to be dismissed as participating union officers, pursuant to Article 264(a), paragraph 3, of the Labor Code.

When the last CBA between PHIMCO and PILA was about to expire, PHIMCO and PILA negotiated for its renewal but this resulted in a deadlock on economic issues, mainly due to disagreements on salary increases and benefits. On April 21, 1995, PILA staged a strike after complying with the requirements thereof. On May 3, 1995, PHIMCO filed a petition for preliminary injunction and TRO before the NLRC which issued an ex-parte TRO effective for 20 days until June 5, 1995. On June 23, 1995, PHIMCO sent a letter to 36 union members directing them to explain within 24-hours why they should not be dismissed for the illegal acts they committed during the strike. On June 26, 1995, they were informed of their dismissal. On July 6, 1995,

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(2) Yes. PHIMCO failed to observe procedural due process since the employees were not given an ample opportunity to be heard and to defend themselves. The short interval of time between the first and second notice speaks for itself.

relationship between him and petitioners. In fact, it was made clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it was, the suspension dragged on for years because of petitioners stubborn refusal to pay. It would have been different if petitioners complied with the condition and respondent still refused to readmit them to work. Then there would have been a clear act of dismissal. But such was not the case. Instead of paying, petitioners even filed a complaint for illegal dismissal against respondent.

CAONG V. REGUALOS G.R. No. 179428, January 26, 2011, Nachura Petitioners Caong, Tresquio and Daluyon were employed as jeepney drivers by Respondent Regualos under a boundary agreement. They filed separate complaints for illegal dismissal against Regualos who barred them from driving the jeepneys due to deficiencies in their boundary payments. However, Regualos told them that they could resume their use of the vehicles after they pay their arrears.

COMPOSITE ENTERPRISES, INC. v. EMILIO M. CAPAROSO and JOEVE QUINDIPAN G.R. No. 159919, August 8, 2007, Austria Martinez Petitioner is engaged in the distribution and/or supply of confectioneries to various retail establishments within the Philippines. Emilio Caparoso and Joeve P. Quindipan (respondents) were employed as its deliverymen until they were terminated on October 8, 1999.

Regualos alleged that the petitioners were lessees of his vehicles and not his employees. Thus, the Labor Arbiter had no jurisdiction. The Labor Arbiter ruled that there was an employer-employee relationship between Regualos and the petitioners and that there was no dismissal because they would be allowed to use the vehicles once they pay their arrears. A reasonable sanction was deemed to be an appropriate penalty.

Respondents filed a complaint for illegal dismissal against petitioner with the National Labor Relations Commission (NLRC). Petitioner denied that respondents were illegally dismissed, alleging that they were employed on a month-to-month basis and that they were terminated as a result of the expiration of their contracts of employment.

Petitioners appealed the decision to the NLRC, which agreed with the Labor Arbiter. The CA also affirmed. It ruled that the employer-employee relationship of the parties was not severed but merely suspended because Regualos refused to allow petitioners to drive the jeepneys when they failed to pay their obligations.

The Labor Arbiter issued a Writ of Execution directing the Sheriff to effect respondent's reinstatement. Consistent with its stand that physical reinstatement was no longer possible, petitioner reinstated respondents into its payroll, conditioned on the NLRC's ruling on its motion to be allowed to pay separation pay in lieu of reinstatement.

ISSUE Whether the petitioners were illegally dismissed HELD It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers do not receive fixed wages but only get the amount in excess of the so-called "boundary" that they pay to the owner/operator is not sufficient to negate the relationship between them as employer and employee.

RULING Article 223 (3rd paragraph) of the Labor Code, as amended by Section 12 of Republic Act (R.A.) No. 6715,34 and Section 2 of the NLRC Interim Rules on Appeals under R.A. No. 6715, Amending the Labor Code, provide that an order of reinstatement by the Labor Arbiter is immediately executory even pending appeal.

The Labor Arbiter, the NLRC, and the CA uniformly declared that petitioners were not dismissed from employment but merely suspended pending payment of their arrears. Findings of fact of the CA, particularly where they are in absolute agreement with those of the NLRC and the Labor Arbiter, are accorded not only respect but even finality, and are deemed binding upon this Court so long as they are supported by substantial evidence.

In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the working man. Payment of separation pay as a substitute for reinstatement is allowed only under exceptional circumstances, viz: (1) when reasons exist which are not attributable to the fault or are beyond the control of the employer, such as when the employer -- who is in severe financial strait, has suffered serious business

We have no reason to deviate from such findings. Indeed, petitioners suspension cannot be categorized as dismissal, considering that there was no intent on the part of respondent to sever the employer-employee

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losses, and has ceased operations -- implements retrenchment, or abolishes the position due to the installation of labor-saving devices; (2) when the illegally dismissed employee has contracted a disease and his reinstatement will endanger the safety of his co-employees; or, (3) where a strained relationship exists between the employer and the dismissed employee.

The LA ruled that petitioner's dismissal was illegal. Petitioner filed a Partial Appeal with the NLRC for reinstatement and the payment of full backwages. She argued that the decision of the Labor Arbiter did not show a case of irretrievable estrangement between her and private respondents as to preclude her reinstatement. She also questioned the denial of her claim for damages. Private respondents, on the other hand, moved for a reversal of the decision and the dismissal of the case.

In this case, petitioner sought to justify the payment of separation pay instead of reinstatement on the basis of its implementation of a retrenchment program for "serious and persistent financial difficulties."However, petitioner only submitted as evidence the notice of its intention to implement a retrenchment program, which it sent to the Department of Labor and 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 insistence on the payment of separation pay.

The NLRC reversed the decision of the Labor Arbiter. The Court of Appeals found the decision of the Labor Arbiter to be more conformable with the evidence and the law and granted the petition and said: considering that the dismissal was without basis, reinstatement with payment of backwages is in order. However, due to the strained relations which would not bring harmony between the parties brought about by the litigation and private respondents' consistent stand that there was a just cause for petitioner Sagum's dismissal for loss of trust and confidence and gross negligence, we find that separation pay should be awarded as an alternative to reinstatement.

SAGUM v. COURT OF APPEALS G.R. No. 158759, May 26, 2005, Puno Petitioner was hired as a Recording/Filing Clerk in June 1980. By her efficiency, loyalty and dedication to the service, she was promoted as Membership Secretary in April 1981, Acting Executive Secretary in February 1986, and Executive Secretary in September 1986. As Executive Secretary, she has served eleven (11) National Presidents. After eight (8) years, or on September 17, 1994, petitioner was appointed as Office Manager in concurrent capacity as Executive Secretary. On July 30, 1996, petitioner was preventively suspended for thirty (30) days. She was served two (2) written notices demanding her explanation for the imputed offenses and indiscretions, subjected to an administrative investigation, and dismissed by private respondent institute on September 1, 1996 for gross negligence and loss of trust and confidence.

ISSUE Is the petitioner entitled to reinstatement? HELD YES. We find for the petitioner on the issue of reinstatement. Article 279 of the Labor Code provides the law on reinstatement, viz.: Article 279. Security of Tenure. -- In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. 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 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.

Petitioner states that she again earned the ire of private respondents when she gave an unsolicited advice to the members of the EXCOM during a Committee Meeting. The EXCOM had allegedly decided to demote Dela Torre, her immediate subordinate, from her position as Administrative Secretary to a Clerk. Petitioner commented that it would be illegal to demote an employee.On August 31, 1996, after the expiration of her thirty-day suspension, petitioner called up private respondent Mendoza to ask when she could go back to work. The latter told her that she could not report for work anymore and advised her to wait for a call. On the same day, a Memo was issued to petitioner dismissing her effective September 1, 1996 on the ground of gross negligence and loss of trust and confidence. Petitioner filed a case for illegal dismissal.

The existence of strained relations is a factual finding and should be initially raised, argued and proven before the Labor Arbiter. Petitioner is correct that the finding of strained relations does not have any basis on the records. Indeed, nowhere was the issue raised in private respondents' pleadings before the Labor Arbiter and the NLRC. Sieving through the records, private respondents first raised the issue in their Comment to Petitioner's Motion for Partial Reconsideration before the Court of Appeals. In Globe-Mackay Cable and Radio Corporation v. NLRC, we emphasized that the principle of strained relations cannot be applied indiscriminately. Otherwise, an illegally dismissed employee can never be reinstated because invariably,

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some hostility is engendered between litigants. As a rule, no strained relations should arise from a valid and legal act of asserting one's right; otherwise, an employee who asserts his right could be easily separated from the service by merely paying his separation pay on the pretext that his relationship with his employer had already become strained.

They already were warned of termination if the same act was repeated, still, they disregarded the warning. ISSUE Whether the Agabons were illegally dismissed RULING No, there was valid dismissal but there was violation of statutory due process.

In the case at bar, there are no hard facts upon which to base the application of the doctrine of strained relationship. Petitioner is correct that mere persistency in argument does not amount to proof,and to deny an employee's right to be reinstated on the basis of the mere consistency of the employer's stand that the dismissal was for cause is to make a mockery of the right of reinstatement under Article 279 of the Labor Code.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.

Be that as it may, we reject petitioner's claim for moral and exemplary damages. The award of moral and exemplary damages is proper when an illegally dismissed employee had been harassed and arbitrarily terminated by the employer, as when the latter committed an anti-social and oppressive abuse of its right to investigate and dismiss an employee. In the case at bar, we are not convinced that private respondents acted in a wanton or oppressive manner. The measures undertaken were relevant to the company-wide audit and investigation conducted within the institute. The suspension of petitioner without prior investigation is akin to preventive suspension which was necessary pending investigation of company records which she had access to.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed.

JENNY M. AGABON and VIRGILIO C. AGABON v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES G.R. No. 15869, November 17, 2004

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

Petitioners were employed by Riviera Home as gypsum board and cornice installers from January 1992 to February 23, 1999 when they were dismissed for abandonment of work. Petitioners filed a complaint for illegal dismissal and was decided in their favor by the Labor Arbiter. Riviera appealed to the NLRC contending just cause for the dismissal because of petitioner’s abandonment of work. NLRC ruled there was just cause and petitioners were not entitled to backwages and separation pay. The CA in turn ruled that the dismissal was not illegal because they have abandoned their work but ordered the payment of money claims.

he present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address. Thus, it should be held liable for non-compliance with the procedural requirements of due process.

The Agabons claim, among others that Riviera violated the requirements of notice and hearing when the latter did not send written letters of termination to their addresses. Riviera claims that the Agabons abandoned their work. More than once, they subcontracted installation works for other companies.

JAKA FOOD PROCESSING CORPORATION v. DARWIN PACOT, ROBERT PAROHINOG, DAVID BISNAR, MARLON DOMINGO, RHOEL LESCANO and JONATHAN CAGABCAB G.R. No. 151378, March 28, 2005

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Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo, Rhoel Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods Processing Corporation (JAKA, for short) until the latter terminated their employment on August 29, 1997 because the corporation was "in dire financial straits". It is not disputed, however, that the termination was effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the service of a written notice upon the employees and the Department of Labor and Employment at least one (1) month before the intended date of termination.

For these reasons, there ought to be a difference in treatment when the ground for dismissal is one of the just causes under Article 282, and when based on one of the authorized causes under Article 283. Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer’s exercise of his management prerogative.

In time, respondents separately filed with the regional Arbitration Branch of the National Labor Relations Commission (NLRC) complaints for illegal dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay against JAKA and its HRD Manager, Rosana Castelo. After due proceedings, the Labor Arbiter rendered a decision declaring the termination illegal and ordering JAKA and its HRD Manager to reinstate respondents with full backwages, and separation pay if reinstatement is not possible.

The records before us reveal that, indeed, JAKA was suffering from serious business losses at the time it terminated respondents’ employment. It is, therefore, established that there was ground for respondents’ dismissal, i.e., retrenchment, which is one of the authorized causes enumerated under Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with the notice requirement under the same Article. Considering the factual circumstances in the instant case and the above ratiocination, we, therefore, deem it proper to fix the indemnity at P50,000.00.

ISSUE What are the legal implications of a situation where an employee is dismissed for cause but such dismissal was effected without the employer’s compliance with the notice requirement under the Labor Code

NOTE: Not related to the topic concerned, but still is a helpful piece of knowledge: We likewise find the Court of Appeals to have been in error when it ordered JAKA to pay respondents separation pay equivalent to one (1) month salary for every year of service. This is because in Reahs Corporation vs. NLRC, we made the following declaration:

RULING We note that there are divergent implications of a dismissal for just cause under Article 282, on one hand, and a dismissal for authorized cause under Article 283, on the other. A dismissal for just cause under Article 282 implies that the employee concerned has committed, or is guilty of, some violation against the employer, i.e. the employee has committed some serious misconduct, is guilty of some fraud against the employer, or he has neglected his duties. Thus, it can be said that the employee himself initiated the dismissal process.

"The rule, therefore, is that in all cases of business closure or cessation of operation or undertaking of the employer, the affected employee is entitled to separation pay. This is consistent with the state policy of treating labor as a primary social economic force, affording full protection to its rights as well as its welfare. The exception is when the closure of business or cessation of operations is due to serious business losses or financial reverses; duly proved, in which case, the right of affected employees to separation pay is lost for obvious reasons. xxx".

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 initiated by the employer’s exercise of his management prerogative, i.e. when the employer opts to install labor saving devices, when he decides to cease business operations or when, as in this case, he undertakes to implement a retrenchment program.

INDUSTRIAL TIMBER V. ABABON G.R. No. 164518, January 25, 2006, Ynares Santiago

The clear-cut distinction between a dismissal for just cause under Article 282 and a dismissal for authorized cause under Article 283 is further reinforced by the fact that in the first, payment of separation pay, as a rule, is not required, while in the second, the law requires payment of separation pay.

They insist that the holding in International Timber Corporation v. National Labor Relations Commission2 that the closure of ITC’s Butuan Plant was valid should not have been applied in the instant cases which pertain to ITC’s Stanply Plant. They further claim that the findings by the Labor Arbiter that

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there was a shortage of raw materials; that the wood processing plaint permit has expired; that the lease contract with IPGC was terminated; and that ITC and IPGC were not business conduits, were all debunked by the NLRC.

posted, in conspicuous places within the company premises, notices of its permanent closure and cessation of business operations, effective March 16, 2004, due to serious economic losses and financial reverses. The DOLE was furnished a copy of said notice together with a separate letter notifying it of the company’s permanent closure. SPEU was also furnished with a copy of the notice of permanent closure. Forthwith, SPI offered separation benefits of one-half (½) month pay for every year of service to each of its employees. 234 employees of SPI accepted the offer, received the said sums and executed quitclaims. Those who refused the offer, i.e., the minority employees, were nevertheless given until March 25, 2004 to accept their checks and correspondingly, execute quitclaims. However, the minority employees did not claim the said checks.

While we ruled in this case that the sanction should be stiffer in a dismissal based on authorized cause where the employer failed to comply with the notice requirement than a dismissal based on just cause with the same procedural infirmity, however, in instances where the execution of a decision becomes impossible, unjust, or too burdensome, modification of the decision becomes necessary in order to harmonize the disposition with the prevailing circumstances. In the case at bar, there was valid authorized cause considering the closure or cessation of ITC’s business which was done in good faith and due to circumstances beyond ITC’s control. Moreover, ITC had ceased to generate any income since its closure on August 17, 1990. Several months prior to the closure, ITC experienced diminished income due to high production costs, erratic supply of raw materials, depressed prices, and poor market conditions for its wood products. It appears that ITC had given its employees all benefits in accord with the CBA upon their termination.

The Labor Arbiter ruled in favor of SPI and the NLRC sustained the ruling. But the NLRC opined that since SPI already gave separation benefits to 234 of its employees, the minority employees should not be denied of the same. On appeal to the CA, SPI sent a Formal Offer of Settlement to SPEU, offering the amount of P15, 000.00 as financial assistance to each of the minority employees. The CA held that the minority employees were not entitled to separation pay considering that the company’s closure was due to serious business losses but still ordered SPI to pay the minority employees P15, 000.00 each.

SANGWOO PHILIPPINES, INC. AND/OR SANG IK JANG, JISSO JANG, WISSO JANG AND NORBERTO TADEO V. SANGWOO PHILIPPINES, INC. EMPLOYEE UNION – OLALIA G.R. No. 173154, G.R. No. 173229, December 9, 2013, Perlas Bernabe

ISSUE (a) Whether or not the minority employees are entitled to separation pay; and (b) Whether or not SPI complied with the notice requirement of Article 297 (formerly Article 283) of the Labor Code.

On July 25, 2003, during the collective bargaining agreement (CBA) negotiations between Sangwoo Philippines, Inc. Employees Union – Olalia (SPEU) and Sangwoo Philippines, Inc.(SPI), the latter filed with the Department of Labor and Employment (DOLE) a letter-notice of temporary suspension of operations for one (1) month, beginning September 15, 2003, due to lack of orders from its buyers. SPEU was furnished a copy of the said letter. Negotiations on the CBA, however, continued and on September 10, 2003, the parties signed a handwritten Memorandum of Agreement, which, among others, specified the employees’ wages and benefits for the next two (2) years, and that in the event of a temporary shutdown, all machineries and raw materials would not be taken out of the SPI premises.

HELD (a) NO. Article [297] of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the self-destruction of the employer. (b) NO. Article 297 of the Labor Code provides that before any employee is terminated due to closure of business, it must give a one (1) month prior written notice to the employee and to the DOLE. In this relation, case law instructs that it is the personal right of the employee to be personally informed of his proposed dismissal as well as the reasons therefor; and such requirement of notice is not a mere technicality or formality which the employer may dispense with. To this end, jurisprudence states that an employer’s act of posting notices to this effect in conspicuous areas in the workplace is not enough. Verily, for something as significant as the involuntary

On September 15, 2003, SPI temporarily ceased operations. Thereafter, it successively filed two (2) letters with the DOLE, copy furnished SPEU, for the extension of the temporary shutdown until March 15, 2004. Meanwhile, SPEU filed a complaint for unfair labor practice, illegal closure, illegal dismissal, damages and attorney’s fees before the Regional Arbitration Branch IV of the NLRC. Subsequently, SPI

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loss of one’s employment, nothing less than an individually-addressed notice of dismissal supplied to each worker is proper.

Bank be ordered forever released from liability under said judgment. ISSUE How do you compute for the full backwages of an illegally dismissed employee?

The Court finds that the LA, NLRC, and CA erred in ruling that SPI complied with the notice requirement when it merely posted various copies of its notice of closure in conspicuous places within the business premises. As earlier explained, SPI was required to serve written notices of termination to its employees, which it, however, failed to do.It is well to stress that while SPI had a valid ground to terminate its employees, i.e., closure of business, its failure to comply with the proper procedure for terminationrenders itliable to pay the employee nominal damages for such omission. Based on existing jurisprudence, an employer which has a valid cause for dismissing its employee but conducts the dismissal with procedural infirmity is liable to pay the employee nominal damages in the amount of P30,000.00 if the ground for dismissal is a just cause, or the amount of P50,000.00 if the ground for dismissal is an authorized cause.35 However, case law exhorts that in instances where the payment of such damages becomes impossible, unjust, or too burdensome, modification becomes necessary in order to harmonize the disposition with the prevailing circumstances. EQUITABLE BANKING CORPORATION RICARDO SADAC G.R. No. 164772, June 8, 2006, Chico Nazario

HELD The Labor Code under Article 279 mandates that an employee’s full backwages shall be inclusive of allowances and other benefits or their monetary equivalent. For backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. Backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the Labor Code. Nor is it a redress of a private right but rather in the nature of a command to the employer to make public reparation for dismissing an employee either due to the former’s unlawful act or bad faith.

vs.

The applicable modern definition of full backwages is now found in Millares v. National Labor Relations Commission 305 SCRA 500 (1999), where although the issue in Millares concerned separation pay – separation pay and backwages both have employee’s wage rate at their foundation.

Respondent Sadac was appointed Vice President of the Legal Department of petitioner Bank and subsequently General Counsel thereof. A letter was sent to the chairman of the board of directors of petitioner company accusing respondent of abusive conduct. On that basis, the bank instructed the delivery of all materials under his custody. Sadac requested for a hearing and investigation but the same remained unheeded, prompting him to file a complaint for illegal dismissal with damages against petitioner bank. Upon learning of the filing of the complaint, the bank terminated the services of Sadac. He was removed form his office and was disentitled to any compensation and other benefits.

The base figure to be used in the computation of backwages is pegged at the wage rate at the time of the employee’s dismissal, inclusive of regular allowances that the employee had been receiving such as the emergency living allowances and the 13th month pay mandated under the law. Also, the “backwages” actually refers to backwages without qualifications and deductions. CARLOS v. COURT OF APPEALS G.R. No. 168096, August 28, 2007, Chico-Nazario, J:

The Labor Arbiter dismissed the complaint for lack of merit. On appeal, the NLRC reversed the Labor Arbiter and declared respondent Sadac’s dismissal as illegal. Petitioner Bank filed Special Civil Action for Certiorari before the SC assailing the NLRC Resolution In the SC’s Decision9 of 13 June 1997, it held respondent Sadac’s dismissal illegal.

Petitioner ABC Security is a domestic corporation engaged in the business of job contracting by providing security services to its clientele. Petitioner Honest Care Janitorial is a domestic corporation likewise engaged in job contracting janitorial services. Private respondents were employed by petitioner ABC Security as security guards and were assigned to Greenvalley Country Club at the time they were allegedly separated from employment. petitioners averred that private respondents were not dismissed but voluntarily resigned from their respective employments.

Pursuant thereto, respondent Sadac filed with the Labor Arbiter a Motion for Execution thereof. Likewise, petitioner Bank filed a Manifestation and Motion praying that the award in favor of respondent Sadac be computed and that after payment is made, petitioner

ISSUE

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Whether or not private respondents were illegally dismissed by petitioners.

Is Natividad entitled to payment of backwages during the period of his detention?

RULING Yes. Resignation is the voluntary act of employees who are compelled by personal reasons to dissociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment. 17 It is illogical for private respondents to resign and then file a complaint for illegal dismissal.

HELD Yes. The payment of backwages is generally granted on the ground of equity. It is a form of relief that restores the income that was lost by reason of the unlawful dismissal; the grant thereof is intended to restore the earnings that would have accrued to the dismissed employee during the period of dismissal until it is determined that the termination of employment is for a just cause. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the Labor Code. Nor is it a redress of a private right but rather in the nature of a command to the employer to make public reparation for dismissing an employee either due to the formers unlawful act or bad faith.

An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances, and to other benefits or their monetary equivalents computed from the time compensation was withheld up to the time of actual reinstatement.

The award of backwages is not conditioned on the employee’s ability or inability to, in the interim, earn any income. Although Natividad was charged for an offense three times; the prosecutor found no probable cause on the first two charges. He is not yet been convicted by final judgment under the third charge, thus, he is presumed innocent until his guilt is proved beyond reasonable doubt.

Undoubtedly, private respondents are entitled to the payment of full backwages, that is, without deducting their earnings elsewhere during the periods of their illegal dismissal. However, where, as in this case, reinstatement is no longer feasible due to strained relations between the parties, separation pay equivalent to one month's salary for every year of service shall be granted. the award for separation pay equivalent to one-month pay for every year of service shall be computed from the time the private respondents were illegally separated from their employment up to the finality of this Court's Decision in the instant petition.

CHRONICLE SECURITIES V. NLRC November 25, 2004, Ynares Santiago Sometime in September 1993, petitioners hired private respondent Neal H. Cruz, who was then the executive editor of the Today newpaper, as the publicist and the editor in chief of its national daily broadsheet, the Manila Chronicle. As compensation for his services, private respondent received a monthly compensation of P60,000.00 plus a brand new car.

TOMAS CLAUDIO MEMORIAL COLLEGE (TCMC) V COURT OF APPEALS (CA) G.R. No. 152568, February 16, 2004, Callejo Natividad, a regular employee of TCMC, was arrested without warrant for an alleged violation of the Dangerous Drugs Act. Pending preliminary investigation, TCMC dismissed Natividad. The prosecutor dismissed the complaint against Natividad for lack of probable cause.

Thereafter, private respondent quit his job with Today to assume the duties and responsibilities as the editor in chief of the Manila Chronicle. Private respondent went about the task of improving the over-all image of the Manila Chronicle. However, due to private respondent's role in the publication of a controversial article that was carried by the newspaper sometime in July 1994, petitioners terminated his services. Consequently, private respondent filed a complaint for illegal dismissal against herein petitioners. Labor Arbiter Ariel C. Santos rendered a decision7 holding that private respondent Neal Cruz was illegally dismissed. Petitioners appealed the decision with the National Labor Relations Commission (NLRC), which affirmed the labor arbiter's decision. Petitioners contend that contrary to established jurisprudence, the Labor Arbiter's computation of the amount due to the private respondent was principally based on the mistaken premise that complainant was entitled to backwages even beyond the closure and cessation of petitioners' newspaper business on January 19, 1998. Petitioners argue that this should not be the case

Natividad was again arrested for the second and third time. The prosecutor dismissed the second complaint for lack of probable cause, while the third complaint is still undergoing preliminary investigation. Natividad posted a bail bond for his release. Subsequently, he challenged the legality of his dismissal before the Labor Arbiter. The Labor Arbiter dismissed the complaint. NLRC affirmed the decision on appeal. However, upon appeal to the CA, the dismissal was upheld but awarded backwages because of TCMC’s failure to observe the proper procedure for dismissal. ISSUE

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because the amount of backwages should only be computed from the date of illegal dismissal up to the time when reinstatement was still possible. Reinstatement could not have been possible beyond the date of the closure of the Manila Chronicle on January 19, 1998. Therefore, backwages should only be computed from September 15, 1994, the effectivity of private respondents termination by the petitioners until the date when the Manila Chronicle ceased publication. Petitioners further contend that they only had one newspaper business and, with the closure of the same, the reinstatement of private respondent Neal Cruz to his former position as Editor-In-Chief became a physical and legal impossibility. Private respondent could not claim that he should have been appointed to another position with the petitioners because he was hired solely for his editorial skills. There is simply no equivalent or substantially equivalent position to which private respondent could be assigned in petitioners' organization.

from the time of their illegal termination up to the finality of the decision. In the case at bar, the Manila Chronicle ceased publication on January 19, 1998. The cessation of publication was a permanent one and it was precipitated by the paper's dire financial condition which was aggravated by a crippling strike causing it to finally shut down. Petitioners' closure of their newspaper business was made on legal and valid grounds. It was never resorted to as a means to deprive the private respondent of the opportunity to be reinstated to his former position. To allow the computation of the backwages due the private respondent to be based on a period beyond January 19, 1998 would be an injustice to the petitioners. Our power to exact retribution from erring employers for cases of illegal dismissal should not go beyond what is recognized as just and fair under the circumstances. While we are inclined more often than not toward the worker and uphold his cause in his conflicts with his employer, such favoritism has not blinded us to the rule that justice is in every case for the deserving, to be dispensed in the light of the established facts and the applicable law and doctrine.

ISSUE Whether or not the basis of computation of backwages by the NLRC is correct. RULING There is no question that petitioners illegally dismissed private respondent Neal Cruz. Even petitioners themselves are no longer questioning the findings of the Labor Arbiter and the NLRC on this aspect. Petitioners main concern in this petition is the proper computation of backwages to be awarded to the private respondent who is rightfully entitled to the payment of backwages, the only question that remains is how much? Backwages, in general, are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. It represents compensation that should be earned but was not collected because an employer has unjustly dismissed an employee.33 Thus, the payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal.

INTERCONTINENTAL BROADCASTING CORPORATION v. REYNALDO BENEDICTO G.R. NO. 152843, July 20, 2006, Corona Intercontinental Broadcasting Corporation is a government-owned and controlled corporation. It is engaged in the business of mass media communications. Reynaldo Benedicto was appointed by Ceferino Basilio, the general manager then of petitioner, as marketing manager. In a letter dated October 11, 1994 signed by Tomas Gomez III, at that time the president of petitioner, Benedicto was terminated from his position. Benedicto filed a complaint with the NLRC for illegal dismissal and damages. He alleged that after his appointment, he was able to increase the televiewing, listening and audience ratings of petitioner which resulted in its improved competitive financial strength.11 He claimed that he successfully initiated, pursued and consummated an advertising contract with VTV Corporation for a period of five years involving the amount of P600 million.12 However, on October 11, 1994, he was terminated from his position without just or authorized cause. The Labor Arbiter ruled in favor of Benedicto finding that he was indeed illegally dismissed. Finding the award excessive, petitioner, on October 15, 1998, filed with the NLRC its memorandum on appeal with motion to re-compute the award on which the appeal bond was to be based. The NLRC dismissed the appeal and ruled that petitioner failed to perfect its appeal since it did not file the appeal bond within the reglementary period. The CA affirmed the NLRC's decision.

Article 279 of the Labor Code of the Philippines, as amended, provides that: 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 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. (Underscoring supplied) Under Republic Act No. 6715, employees who are illegally dismissed are entitled to full backwages, among others, computed 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

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ISSUE Whether or not Benedicto was illegally dismissed.

HELD An employee dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not, as a rule, entitled to separation pay. As an exception, allowing the grant of separation pay or some other financial assistance to an employee dismissed for just causes is based on equity. The Court has granted separation pay as a measure of social justice even when an employee has been validly dismissed, as long as the dismissal was not due to serious misconduct or reflective of personal integrity or morality.

RULING Yes. The labor arbiter found that Benedicto was an employee (the marketing manager) of petitioner. He also determined that there was no just or authorized cause for Benedicto's termination. Neither did petitioner comply with the two-notice requirement for valid termination under the law. He therefore concluded that Benedicto was illegally dismissed. These factual findings of the NLRC, confirmed by the CA, are binding on us since they are supported by substantial evidence. Petitioner, aside from merely stating that Benedicto's appointment was unauthorized, did not extensively deal with the issue of whether Benedicto was in fact its employee. Besides, it is estopped from denying such fact considering its admission that its former President, Tomas Gomez III, wrote him a letter of termination on October 11, 1994.37 Petitioner, furthermore, never contested the finding of illegal dismissal. Accordingly, there are no strong reasons for us to again delve into the facts.

We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice.

PCIB vs. ABAD G.R. No. 158045, February 28, 2005

Under the San Miguel test, separation pay may be awarded, provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on the employee’s moral character. The dismissal in the present case was due to loss of trust and confidence, not serious misconduct.

Anastacio D. Abad was the senior Assistant Manager (Sales Head) of [petitioner Philippine Commercial International Bank (PCI Bank now Equitable PCI Bank)], Tacloban City Branch when he was dismissed from his work. Before he was terminated, he received a Memorandum concerning the irregular clearing of PNB-Naval Check of Sixtu Chu, the Bank’s valued client. He denied the allegations. During the actual investigation conducted by [petitioner] Bank, several transactions violative of the Bank’s Policies and Rules and Regulations were [uncovered] by the Fact-Finding Committee. Said transactions placed the Bank at risk in the amount of P23,044,527.88 and were consummated in the span of only one (1) month. He was asked to explain the irregularities. Subsequently, he was terminated. Abad instituted a Complaint for Illegal Dismissal. Labor Arbiter ruled in favor of the bank. NLRC and CA affirmed and held that the dismissal of Abad was valid. However, the CA awarded separation pay equivalent to one half (1/2) month pay for every year of service, in accordance with the social justice policy in favor of the working class.

While he violated the bank’s policy, rules and regulations, there was no indication that his actions were perpetrated for his self-interest or for an unlawful purpose. On the contrary, and as the facts indicate,his actions were motivated by a desire to accommodate a valued client of the bank. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. BAGO V. NLRC G.R. No. 170001, April 4, 2007, Carpio Morales Petitioner is an employee of the private respondents. The branch manager of the latter dismissed the petitioner on account of her act of falsely accusing her of having an affair with the asst. branch manager. Petitioner wrote a sorry letter, admitting her faults and asking for reconsideration but to no avail. She then filed a case for illegal dismissal. She contends, inter alia, that she is a rank and file employee who cannot simply be dismissed without just or authorized cause.

ISSUE WON the Court of Appeals grossly erred in awarding separation pay equivalent to one-half (1/2) month’s pay for every year of service to respondent, the same being contrary to law and jurisprudence. (The Court is tasked to determine the propriety of awarding separation pay to an employee despite the finding of lawful dismissal.)

ISSUE

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Whether or not the dismissal is valid.

Milagros Panuncillo was hired as Office Senior Clerk by CAP Philippines Inc. In order to secure the education of her son, Panuncillo procured an educational plan which she had fully paid but which she later sold to Josefina Pernes for P37,000. Before the actual transfer of the plan could be effected, however, Panuncillo pledged it for P50,000 to John Chua who, however, sold it to Benito Bonghanoy. Bonghanoy in turn sold the plan to Gaudioso R. Uy for P60,000. Having gotten wind of the transactions subsequent to her purchase of the plan, Josefina informed CAP Philippines Inc. that Panuncillo had "swindled" her but that she was willing to settle the case amicably as long as Panuncillo will pay the amount involved and the interest. CAP Philippines Inc. terminated the services of Panuncillo. Panuncillo sought reconsideration of her dismissal. Acting on Panuncillo’s motion for reconsideration, CAP Philippines Inc. denied the same. Panuncillo thus filed a complaint for illegal dismissal, 13th month pay, service incentive leave pay, damages and attorney’s fees against CAP Philippines Inc.

RULING Yes. Arlyn’s claim that she is an ordinary rank-and-file employee, hence, she cannot be dismissed for loss of trust and confidence does not lie. The observation of the Court of Appeals that "[h]er work is of such nature as to require a substantial amount of trust and confidence on the part of x x x her employer" is welltaken in light of her following functions, as enumerated by the NLRC: 1. Batches, collates and encode[s] policies, endorsements and official receipts; 2. Generates printed production, collection, statistical and receivable reports for submission to the Head Office; 3. Reconciles and finalizes production and collection reports; 4. Maintains the computer hardware and software; and 5. Performs other related functions as may be assigned to her by her superior from time to time which functions "required the use of judgment and discretion."

ISSUE Whether or not Milagros has been illegally dismissed

Arlyn of course incorrectly assumes that mere rankand-file employees cannot be dismissed on the ground of loss of confidence. Jurisprudence holds otherwise albeit it requires "a higher proof of involvement" in the questioned acts.

HELD Panuncillo’s repeated violation of Section 8.4 of CAP Philippines Inc’s Code of Discipline, she violated the trust and confidence of CAP Philippines Inc. and its customers. To allow her to continue with her employment puts CAP Philippines Inc. under the risk of being embroiled in unnecessary lawsuits from customers similarly situated as Josefina, et al. Clearly, CAP Philippines Inc. exercised its management prerogative when it dismissed Panuncillo. Under the Labor Code, the employer may terminate an employment on the ground of serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. Infractions of company rules and regulations have been declared to belong to this category and thus are valid causes for termination of employment by the employer. The employer cannot be compelled to continue the employment of a person who was found guilty of maliciously committing acts which are detrimental to his interests. It will be highly prejudicial to the interests of the employer to impose on him the charges that warranted his dismissal from employment. Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remain in the service. It may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe. This Court was more emphatic in holding that in protecting the rights of the laborer, it cannot authorize the oppression or selfdestruction of the employer.

But even assuming further that Arlyn may not be dismissed for loss of confidence, she can, on the ground of fraud or betrayal of trust, following Article 282 of the Labor Code which provides that: An employer may terminate an employee for any of the following causes: xxxx (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; xxxx (e) Other causes analogous to the foregoing.39 As for the propriety of dismissal as a penalty in light of Arlyn’s eight years of service during which, so she claims, she committed no infraction, the doctrines established in Salvador v. Philippine Mining Service Corp.,45 to wit: To be sure, length of service is taken into consideration in imposing the penalty to be meted an erring employee. However, the case at bar involves dishonesty and pilferage by petitioner which resulted in respondent’s loss of confidence in him. Unlike other just causes for dismissal, trust in an employee, once lost is difficult, if not impossible, to regain. MILAGROS PANUNCILLO v. CAP PHILIPPINES, INC. 515 SCRA 323 (2007)

GARCIA V. PHILIPPINE AIRLINES G.R. No. 164856, January 20, 2009, Carpio Morales

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Employees-herein petitioners were allegedly caught in the act of sniffing shabu. After due notice, PAL dismissed petitioners. The Labor Arbiter ruled in favor of employees. NLRC reversed the said LA’s decision.

ISLRIZ TRADING/VICTOR HUGO LU vs. CAPADA G.R. No. 168501, January 31, 2011 Four of the respondents were drivers while the other 5 are helpers of Islriz Trading, a gravel and sand business owned and operated by petitioner Victor Hugo Lu. Claiming that they were illegally dismissed, respondents filed a Complaint for illegal dismissal and non-payment of overtime pay, holiday pay, rest day pay, allowances and separation pay against petitioner. On his part, petitioner imputed abandonment of work against respondents. LA ruled that Petitioner is guilty of illegal dismissal.

Prior to the promulgation of the Labor Arbiters decision, the Securities and Exchange Commission (SEC) placed PAL, which was suffering from severe financial losses, under an Interim Rehabilitation Receiver, who was subsequently replaced by a Permanent Rehabilitation Receiver. ISSUES (1) Can petitioners collect their wages during the period between the LA’s order of reinstatement pending appeal and the NLRC decision overturning that of the LA? (2) Is the impossibility to comply with the reinstatement order due to corporate rehabilitation provides a reasonable justification for the failure to exercise the options under Article 223 of the Labor Code?

On appeal the NLRC reversed the decision of the LA. Undeterred, petitioner brought the matter to the CA through Petition for Certiorari the CA quoted the Order of Labor Arbiter Castillon and agreed with her ratiocination. Hence this Petition. ISSUE Whether or not the respondents may collect their wages during the period between the LA’s order of reinstatement pending appeal and the NLRC Resolution overturning that of the LA.

HELD (1) Yes. The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. It settles the view that the Labor Arbiter's order of reinstatement is immediately executory and the employer has to either re-admit them to work under the same terms and conditions prevailing prior to their dismissal, or to reinstate them in the payroll, and that failing to exercise the options in the alternative, employer must pay the employees salaries.

HELD Employees are entitled to their accrued salaries during the period between the Labor Arbiter’s order of reinstatement pending appeal and the resolution of the National Labor Relations Commission (NLRC) overturning that of the Labor Arbiter. Otherwise stated, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, the employer is still obliged to reinstate and pay the wages of the employee during the period of appeal until reversal by a higher court or tribunal. In this case, respondents are entitled to their accrued salaries from the time petitioner received a copy of the Decision of the Labor Arbiter declaring respondents’ termination illegal and ordering their reinstatement up to the date of the NLRC resolution overturning that of the Labor Arbiter.

(2) Yes. After the labor arbiters decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages xxx The test is two-fold: (1) there must be actual delay or the fact that the order of reinstatement pending appeal was not executed prior to its reversal; and (2) the delay must not be due to the employers unjustified act or omission.

LANSANGAN v. AMKOR TECHNOLOGY PHILIPPINES, INC. G.R. No. 177026, January 30, 2009, Carpio Morales

It is settled that upon appointment by the SEC of a rehabilitation receiver, all actions for claims before any court, tribunal or board against the corporation shall ipso jure be suspended. XXX Respondent was, during the period material to the case, effectively deprived of the alternative choices under Article 223 of the Labor Code, not only by virtue of the statutory injunction but also in view of the interim relinquishment of management control to give way to the full exercise of the powers of the rehabilitation receiver. Had there been no need to rehabilitate, respondent may have opted for actual physical reinstatement pending appeal to optimize the utilization of resources. Then again, though the management may think this wise, the rehabilitation receiver may decide otherwise, not to mention the subsistence of the injunction on claims.

An anonymous e-mail was sent to the General Manager of Amkor Technology Philippines (respondent) detailing allegations of malfeasance on the part of its supervisory employees Lunesa Lansangan and Rosita Cendaña (petitioners) for "stealing company time." Respondent thus investigated the matter, requiring petitioners to submit their written explanation. In handwritten letters, petitioners admitted their wrongdoing. Respondent thereupon terminated petitioners for "extremely serious offenses" as defined in its Code of Discipline, prompting petitioners to file a complaint for illegal dismissal against it.

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recalling that it was only respondent which assailed the Arbiter’s decision to the NLRC – to solely question the propriety of the order for reinstatement, and it succeeded.

Labor Arbiter Arthur L. Amansec, by Decision of October 20, 2004,5 dismissed petitioners’ complaint, he having found them guilty of dishonesty punishable as a serious form of misconduct and fraud or breach of trust under Article 282 of the Labor Code.

The Arbiter found petitioners’ dismissal to be valid. Such finding had, as stated earlier, become final, petitioners not having appealed it. WHEREFORE, the petition is DENIED.

The Arbiter, however, ordered the reinstatement of petitioners to their former positions without backwages "as a measure of equitable and compassionate relief" owing mainly to petitioners’ prior unblemished employment records, show of remorse, harshness of the penalty and defective attendance monitoring system of respondent.

ELIZABETH D. PALTENG V. UNITED COCONUT PLANTERS BANK G.R. No. 172199, February 27, 2009 DOCTRINE: Reinstatement and payment of backwages are distinct and separate reliefs. The award of one does not bar the other. Backwages may be awarded without reinstatement, and reinstatement may be ordered without awarding backwages.

Respondent assailed the reinstatement aspect of the Arbiter’s order before the National Labor Relations Commission (NLRC). In the meantime, petitioners, without appealing the Arbiter’s finding them guilty of "dishonesty as a form of serious misconduct and fraud or breach of trust," moved for the issuance of a "writ of reinstatement."

The Court, despite ordering reinstatement or payment of separation pay in lieu of reinstatement, has not awarded backwages as penalty for the misconduct or infraction committed by the employee.

After a series of oppositions, motions and orders, the Arbiter issued an alias writ of execution following which respondent’s bank account at Equitable-PCI Bank was garnished. Respondent thereupon moved for the quashal of the alias writ of execution and lifting of the notice of garnishment, which the Arbiter denied by Order of January 26, 2005, drawing respondent to appeal to the NLRC.

FACTS Petitioner Elizabeth D. Palteng was the Senior Assistant Manager/Branch Operations Officer of respondent United Coconut Planters Bank in its Banaue Branch in Quezon City. On April 15, 1996, Area Head and Vice-President Eulallo S. Rodriguez reported to the bank’s Internal Audit and Credit Review Division that bank client Clariza L. Mercado -The Red Shop has incurred Past Due Domestic Bills Purchased (BP) of P34,260,000. After conducting a diligence audit, the division reported to the Audit and Examination Committee that Palteng committed several offenses under the Employee Discipline Code in connection with Mercado’s Past Due Domestic BP. It also recommended that the matter be referred to the Committee on Employee Discipline for proper disposition.

After consolidating respondent’s appeal from the Labor Arbiter’s order of reinstatement and subsequent appeal/order denying the quashal of the alias writ of execution and lifting of the notice of garnishment, the NLRC, by Resolution of June 30, 2005, granted respondent’s appeals by deleting the reinstatement aspect of the Arbiter’s decision and setting aside the Arbiter’s Alias Writ of Execution and Notice of Garnishment. Petitioners’ motion for reconsideration of the NLRC Resolution having been denied, they filed a petition for certiorari before the Court of Appeals which, by Decision10 of September 19, 2006, while affirming the finding that petitioners were guilty of misconduct and the like, ordered respondent to "pay petitioners their corresponding backwages.

On August 14, 1996, Palteng was required to explain why no disciplinary action should be taken against her. In response, Palteng explained that while she admitted committing a major offense that may cause her dismissal, she claimed that it was an honest mistake.

ISSUE WON petitioners committed serious misconduct, fraud, dishonest and breach of trust

After hearing and investigation, the committee recommended Palteng’s dismissal. On October 25, 1996, Palteng was dismissed with forfeiture of all benefits.

RULING The decision of the Arbiter finding that petitioners committed "dishonesty as a form of serious misconduct and fraud, or breach of trust" had become final, petitioners not having appealed the same before the NLRC as in fact they even moved for the execution of the reinstatement aspect of the decision. It bears

Palteng filed a complaint for illegal dismissal seeking reinstatement to her former position without loss of seniority rights with full backwages, or in the alternative, payment of separation pay with full backwages, and recovery of her monetary claims with damages.

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Alsons-SPFL (the Union) is the exclusive bargaining agent of the Companys rank and file employees. The Company and the Union entered into a Collective Bargaining Agreement (CBA) that bound them to hold no strike and no lockout in the course of its life. At some point the parties began negotiating the economic provisions of their CBA but this ended in a deadlock, prompting the Union to file a notice of strike. After efforts at conciliation by the Department of Labor and Employment (DOLE) failed, the Union conducted a strike vote that resulted in an overwhelming majority of its members favoring it. The Union reported the strike vote to the DOLE and, after the observance of the mandatory cooling-off period, went on strike.

LA found her dismissal as illegal and ordered payment of separation pay in lieu or reinstatement with payment of full backwages from dismissal to finality of judgment and damages. NLRC affirmed with the order that damages be deleted. CA affirmed decision and modified payment of backwages from the date of dismissal to promulgation of Labor Arbiter’s decision only. ISSUE Whether the award of backwages, if any, should be counted from the time petitioner was illegally dismissed until the promulgation of the Labor Arbiter’s Decision on December 6, 1999, or until the finality of the decision. - NONE AT ALL.

ISSUE Is the strike invalid notwithstanding compliance with procedural requirements under the Labor Code? HELD YES.

HELD Settled is the rule that an employee who is illegally dismissed from work is entitled to reinstatement without loss of seniority rights, and other privileges as well as to full backwages, inclusive of allowances, and to other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. However, in the event that reinstatement is no longer possible, the employee may be given separation pay instead.

“A strike may be regarded as invalid although the labor union has complied with the strict requirements for staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement, such as a no strike clause or conclusive arbitration clause.[19] Here, the CBA between the parties contained a no strike, no lockout provision that enjoined both the Union and the Company from resorting to the use of economic weapons available to them under the law and to instead take recourse to voluntary arbitration in settling their disputes.”

Notably, reinstatement and payment of backwages are distinct and separate reliefs. The award of one does not bar the other. Backwages may be awarded without reinstatement, and reinstatement may be ordered without awarding backwages.

“No law or public policy prohibits the Union and the Company from mutually waiving the strike and lockout maces available to them to give way to voluntary arbitration.Indeed, no less than the 1987 Constitution recognizes in Section 3, Article XIII, preferential use of voluntary means to settle disputes.” Thus: The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

In a number of cases, the Court, despite ordering reinstatement or payment of separation pay in lieu of reinstatement, has not awarded backwages as penalty for the misconduct or infraction committed by the employee. In the case at bar, petitioner admitted that she granted the BP accommodation against Mercado’s personal checks beyond and outside her authority. The Labor Arbiter, the NLRC and the Court of Appeals all found her to have committed an “error of judgment,” “honest mistake,” “honest mistake” vis-à-vis a “major offense.”

“Since the Union’s strike has been declared illegal, the Union officers can, in accordance with law be terminated from employment for their actions. This includes the shop stewards. They cannot be shielded from the coverage of Article 264 of the Labor Code since the Union appointed them as such and placed them in positions of leadership and power over the men in their respective work units. As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be shown that

Since petitioner was not faultless in regard to the offenses imputed against her, we hold that the award of separation pay only, without backwages, is proper. C. ALCANTARA & SONS, INC V. CA ET AL. G.R. No. 155109. September 29, 2010, Abad C. Alcantara & Sons, Inc., (the Company) is a domestic corporation engaged in the manufacture and processing of plywood. Nagkahiusang Mamumuo sa

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such a union member, clearly identified, performed an illegal act or acts during the strike.”

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;

ABOC v. METROPOLITAN BANK AND TRUST COMPANY G.R. Nos. 170542-43 and G.R. No. 176460, December 13, 2010

xxx (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;

Aboc, the Regional Operations Coordinator of Metrobank in Cebu City, for nine years, maintained an unblemished employment record until he received an inter-office letter on January 29, 1998, requiring him to explain in writing the charges that he had actively participated in the lending activities of his immediate supervisor, Wynster Y. Chua (Chua), the Branch Manager of Metrobank where he was assigned.

xxx"

In termination cases, the burden of proof rests on the employer to show that the dismissal was for a just cause or authorized cause. An employee's dismissal due to serious misconduct and loss of trust and confidence must be supported by substantial evidence. Substantial evidence is that amount of relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

Aboc wrote a letter to Metrobank explaining that he had no interest whatsoever in the lending business of Chua because it was solely owned by the latter. He admitted, however, that he did some acts for Chua in connection with his lending activity. He did so because he could not say no to Chua because of the latters influence and ascendancy over him. Metrobank, on the other hand, replied that Aboc and other employees organized two unregistered credit unions known as Cebu North Road Investment (CNRI) and the First Fund Access (FFA), which opened accounts with Metrobank under fictitious names and used Metrobanks premises, equipment and facilities in their lending business.

In the case at bench, Metrobank's evidence clearly shows that the acts of Aboc in helping Chua organize the CNRI and FFA credit unions and in the operations thereof constituted serious misconduct or breach of trust and confidence. Abocs highly irregular participation in the lending business of CNRI and FFA jeopardized the business of Metrobank. CNRI and FFA were practically competing with the business of Metrobank by soliciting investors including clients of the bank for their credit unions. Aboc admitted that he was able to induce Nerinilda, the widow of a former branch accountant of Metrobank, to withdraw her UNISA account with Metrobank and invest it with their credit union.

During the investigation conducted by Metrobank on January 15, 1998, it was discovered that Aboc solicited investors including its clients for said credit union. He also induced bank clients to withdraw their accounts and invest them in CNRI. Metrobank required Aboc to submit a written explanation why he should not be dismissed for cause and attend a conference in which he was allowed to bring a counsel of his own choice. He submitted his written explanation and he attended the conference.

PRINCE TRANSPORT V. GARCIA G.R. No. 167291, January 12, 2011

Thereafter, Metrobank found that Aboc's actions constituted serious misconduct and a breach of trust and confidence. On February 12, 1998, Metrobank terminated his services.

Prince Transport, Inc. (PTI), is a company engaged in the business of transporting passengers by land; respondents were hired either as drivers, conductors, mechanics or inspectors, except for respondent Diosdado Garcia (Garcia), who was assigned as Operations Manager. Sometime in October 2007 the commissions received by the respondents were reduced to 7 to 9% from 8 to 10%. This led respondents and other employees of PTI to hold a series of meetings to discuss the protection of their interests as employees. Ranato Claros, president of PTI, made known to Garcia his objections to the formation of a union and in order to block the continued formation of the union, PTI caused the transfer of all union members and sympathizers to one of its sub-companies, Lubas Transport (Lubas). The

ISSUE Whether or not Aboc was legally dismissed. HELD Yes. Article 282 states: "ART. 282. TERMINATION BY EMPLOYER. - An employer may terminate an employment for any of the following causes

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business of Lubas deteriorated because of the refusal of PTI to maintain and repair the units being used therein, which resulted in the virtual stoppage of its operations and respondents' loss of employment. Hence, the respondent-employees filed complaints against PTI for illegal dismissal and unfair labor practice. PTI contended that it has nothing to do with the management and operations of Lubas as well as the control and supervision of the latter's employees.

March 9, 1998.In dismissing the complaint for illegal dismissal, the Labor Arbiter ratiocinated that at the time respondent filed the complaint for illegal dismissal, she was not yet dismissed by petitioners. ISSUE Whether respondent was constructively and illegally dismissed by petitioner? RULING Yes. There is probationary employment when the employee upon his engagement is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. A probationary employee, like a regular employee, enjoys security of tenure. However, in cases of probationary employment, aside from just or authorized causes of termination, an additional ground is provided under Article 281 of the Labor Code, i.e., the probationary employee may also be terminated for failure to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of the engagement. In the instant case, based on the facts on record, petitioners failed to accord respondent substantive and procedural due process. The haphazard manner in the investigation of the missing cash, which was left to the determination of the police authorities and the Prosecutors Office, left respondent with no choice but to cry foul. Administrative investigation was not conducted by petitioner Supermarket. On the same day that the missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief, which resulted in her languishing in jail for two weeks.

ISSUE Whether or not the order to reinstate respondents was valid considering that the issue of reinstatement was never brought up before the CA and respondents never questioned the award of separation pay. HELD YES. It is clear from the complaints filed by respondents that they are seeking reinstatement. Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. The general prayer is broad enough “to justify extension of a remedy different from or together with the specific remedy sought.” Even without the prayer for a specific remedy, proper relief may be granted by the court if the facts alleged in the complaint and the evidence introduced so warrant. The court shall grant relief warranted by the allegations and the proof even if no such relief is prayed for. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable.

As correctly pointed out by the NLRC, the due process requirements under the Labor Code are mandatory and may not be supplanted by police investigation or court proceedings. The criminal aspect of the case is considered independent of the administrative aspect. Thus, employers should not rely solely on the findings of the Prosecutors Office. They are mandated to conduct their own separate investigation, and to accord the employee every opportunity to defend himself. Furthermore, respondent was not represented by counsel when she was strip-searched inside the company premises or during the police investigation, and in the preliminary investigation before the Prosecutors Office.

ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORP. V. RANCHEZ G.R. No. 177937, January 19, 2011, Nachura Respondent was a probationary employee of petitioner Robinsons Galleria/Robinsons Supermarket Corporation (petitioner Supermarket) for a period of five (5) months. Two weeks after she was hired, respondent reported to her supervisor the loss of cash amounting to Twenty Thousand Two Hundred NinetyNine Pesos (P20,299.00) which she had placed inside the company locker.An information for Qualified Theft was filed against her.Respondent filed a complaint for illegal dismissal and damages, and was put in prison for 2 weeks. On March 12, 1998, petitioners sent to respondent by mail a notice of termination and/or notice of expiration of probationary employment dated

Respondent was constructively dismissed by petitioner Supermarket effective October 30, 1997. It was unreasonable for petitioners to charge her with abandonment for not reporting for work upon her release in jail. It would be the height of callousness to expect her to return to work after suffering in jail for two weeks. Work had been rendered unreasonable,

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unlikely, and definitely impossible, considering the treatment that was accorded respondent by petitioners.

PFIZER makes much of respondent’s non-compliance with its return- to-work directive by downplaying the reasons forwarded by respondent as less than sufficient to justify her purported refusal to be reinstated. In PFIZER’s view, the return-to-work order it sent to respondent was adequate to satisfy the jurisprudential requisites concerning the reinstatement of an illegally dismissed employee.

PFIZER V. VELASCO G.R. No. March 9, 2011, Leonardo-De Castro Geraldine L. Velasco, an employee of PFIZER, INC., having a high risk pregnancy, was advised to undergo bed rest, resulting to an extended leave of absence. She was served two show cause noticed for violation of company rules and was effectively placed under preventive suspension. Velasco filed a complaint for illegal suspension with money claims. She then received a "Third Show-cause Notice”. PFIZER informed Velasco of its "Management Decision" terminating her employment. On 5 December 2003, the Labor Arbiter rendered its decision declaring the dismissal of Velasco illegal, ordering her reinstatement with backwages and further awarding moral and exemplary damages with attorney’s fees. Pfizer argues the validity of respondent’s dismissal from employment having found that it was in accordance with the two notice rule pursuant to the due process requirement and with just cause.

To reiterate, under Article 223 of the Labor Code, an employee entitled to reinstatement "shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll." It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had been removed or separated. To begin with, the return-to-work order PFIZER sent respondent is silent with regard to the position or the exact nature of employment that it wanted respondent to take up as of July 1, 2005. Even if we assume that the job awaiting respondent in the new location is of the same designation and pay category as what she had before, it is plain from the text of PFIZER’s June 27, 2005 letter that such reinstatement was not "under the same terms and conditions" as her previous employment, considering that PFIZER ordered respondent to report to its main office in Makati City while knowing fully well that respondent’s previous job had her stationed in Baguio City (respondent’s place of residence) and it was still necessary for respondent to be briefed regarding her work assignments and responsibilities, including her relocation benefits.

Respondent Velasco filed a Motion for Reconsideration wherein the Court of Appeals affirmed the validity of respondent’s dismissal from employment but modified its earlier ruling by directing PFIZER to pay respondent her wages from the date of the Labor Arbiter’s Decision dated December 5, 2003 up to the Court of Appeals Decision dated November 23, 2005. On the other hand, PFIZER filed the instant petition assailing the aforementioned Court of Appeals Resolutions. PFIZER further assert that Velasco should reimburse the wages received while the case was pending on appeal. ISSUE Whether or not the Court of Appeals committed a serious but reversible error when it ordered Pfizer to pay Velasco wages from the date of the Labor Arbiter’s decision ordering her reinstatement until November 23, 2005, when the Court of Appeals rendered its decision declaring Velasco’s dismissal valid.

The Court is cognizant of the prerogative of management to transfer an employee from one office to another within the business establishment, provided that there is no demotion in rank or diminution of his salary, benefits and other privileges and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. The June 27, 2005 return-to-work directive implying that respondent was being relocated to PFIZER’s Makati main office would necessarily cause hardship to respondent, a married woman with a family to support residing in Baguio City.

RULING No. The petition is without merit. The provision of Article 223 is clear that an award [by the Labor Arbiter] for reinstatement shall be immediately executory even pending appeal and the posting of a bond by the employer shall not stay the execution for reinstatement. In the case at bar, PFIZER did not immediately admit respondent back to work which, according to the law, should have been done as soon as an order or award of reinstatement is handed down by the Labor Arbiter without need for the issuance of a writ of execution.

PFIZER further implores the Court to annul the award of backwages and separation pay as well as to require respondent to refund the amount that she was able to collect by way of garnishment from PFIZER as her accrued salaries since it was proven on appeal that the dismissal was valid. The Court reaffirms the prevailing principle that even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.

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LUNA V. ALLADO CONSTRUCTION G.R. No. 175251, May 30, 2011, Leonardo de Castro

Petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company owned and managed by herein respondent Yeo Han Guan. Petitioner further alleged that on October 5, 1998, he got sick and was confined in a hospital; on December 12, 1998, he reported for work but was no longer permitted to go back because of his illness; he asked that respondent allow him to continue working but be assigned a lighter kind of work but his request was denied; instead, he was offered a sum of P15,000.00 as his separation pay; however, the said amount corresponds only to the period between 1993 and 1999; petitioner prayed that he be granted separation pay computed from his first day of employment in June 1963, but respondent refused. Aside from separation pay, petitioner prayed for the payment of service incentive leave for three years as well as attorney's fees.

Petitioner alleges that he was given a travel order dated to proceed to respondents main office in Davao City for reassignment. Upon arrival at the office, he was asked to sign several sets of "Contract of Project Employment". He refused. Thus, he was not given a reassignment or any other work. These incidents prompted him to file the complaint. Respondents, on the other hand, alleged that petitioner applied for a leave of absence which was granted. Upon expiration of his leave, he was advised to report to the company’s project in Sarangani Province. However, he refused and claimed instead that he had been dismissed illegally. Finding that petitioner is deemed resigned, the Labor Arbiter (LA) dismissed petitioners complaint for illegal dismissal, but ordered respondent to pay the former the amount ofP18,000.00 by way of financial assistance.

ISSUE Whether or not petitioner was entitled to separation pay HELD NO. The Court agrees with the CA in its observation of the following circumstances as proof that respondent did not terminate petitioner's employment: first, the only cause of action in petitioner's original complaint is that he was offered a very low separation pay; second, there was no allegation of illegal dismissal, both in petitioner's original and amended complaints and position paper; and, third, there was no prayer for reinstatement.

Respondents appealed with the National Labor Relations Commission (NLRC) which reversed the decision of the LA, declared respondents guilty of illegal dismissal, and ordered them to pay petitioner one-month salary for every year of service as separation pay. Respondents moved for reconsideration but their motion was denied. Respondents elevated their cause to the CAviaa petition forcertiorariunder Rule 65. The CA granted respondents petition forcertiorariand deleted the award of financial assistance. Further, the CA held that it was grave abuse of discretion for the NLRC to rule on the issue of illegal dismissal when such issue was not raised on appeal.

In consonance with the above findings, the Court finds that petitioner was the one who initiated the severance of his employment relations with respondent. It is evident from the various pleadings filed by petitioner that he never intended to return to his employment with respondent on the ground that his health is failing. Indeed, petitioner did not ask for reinstatement. In fact, he rejected respondent's offer for him to return to work. This is tantamount to resignation.

ISSUES Whether the NLRC could still review issues not brought during the appeal. RULING The 2002 Rules of Procedure of the NLRC, which was in effect at the time respondents appealed the Labor Arbiters decision, provided that the NLRC shall limit itself only to the specific issues that were elevated for review. Here, the NLRC passed upon the issue of illegal dismissal although this was not brought up in the appeal. Therefore, by considering the arguments and issues in the reply/opposition to appeal which were not properly raised by timely appeal nor comprehended within the scope of the issue raised in petitioners appeal, public respondent committed grave abuse of discretion amounting to excess of jurisdiction.

Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment. It may not be amiss to point out at this juncture that aside from Article 284 of the Labor Code, the award of separation pay is also authorized in the situations dealt with in Article 283[16] of the same Code and under Section 4 (b), Rule I, Book VI of the Implementing Rules and Regulations of the said Code[17] where there is illegal dismissal and reinstatement is no longer feasible. By way of exception, this Court has allowed grants of separation pay to stand as a measure of

ROMEO VILLARUEL v. YEO HAN GUAN G.R. No. 169191, June 1, 2011, Peralta

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social justice where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.[18] However, there is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. In fact, the rule is that an employee who voluntarily resigns from employment is not entitled to separation pay, except when it is stipulated in the employment contract or CBA, or it is sanctioned by established employer practice or policy. In the present case, neither the abovementioned provisions of the Labor Code and its implementing rules and regulations nor the exceptions apply because petitioner was not dismissed from his employment and there is no evidence to show that payment of separation pay is stipulated in his employment contract or sanctioned by established practice or policy of herein respondent, his employer.

ISSUE Whether or not the LA is correct RULING NO. Refer to the doctrine. This is just but a risk that the employer cannot avoid when it continued to seek recourses against the Labor Arbiter’s decision. This is also in accordance with Article 279 of the Labor Code. INTEGRATED MICROELECTRONICS, INC. v. PIONILLA G.R. No. 200222, August 28, 2013, Perlas-Bernabe Petitioner IMI employed respondent Adonis Pionilla as one of its production worker. Pionilla was later on dismissed for violating company rules and regulations which prohibits lending one's ID since the same is considered a breach of its security rules. It was reported that Pionilla was seen escorting a lady to board the company shuttle bus at a terminal, and that the lady was wearing a company ID – which serves as a free pass for shuttle bus passengers – even if she was just a job applicant at IMI. Pionilla admitted that he lent his ID to the lady who turned out to be his relative. It was also admitted by Pionilla that at the time of the incident, he had two Ids in his name as he lost his original ID but was able to secure a temporary ID later on. As Pionilla and his relative were about to board the shuttle bus, they were both holding separate Ids, both in his name. The day after the incident, Pionilla received a notice requiring him to explain the incident and a committee was subsequently formed to investigate the matter. Subsequently IMI found Pionilla guilty and was dismissed from service.

Since petitioner was not terminated from his employment and, instead, is deemed to have resigned therefrom, he is not entitled to separation pay under the provisions of the Labor Code. The foregoing notwithstanding, this Court, in a number of cases, has granted financial assistance to separated employees as a measure of social and compassionate justice and as an equitable concession. NACAR VS. GALLERY FRAMES G.R. No. 189871, August 13, 2013, Peralta Doctrine: On illegal dismissal cases, backwages will be computed from the date of illegal dismissal until the date of the decision of the Labor Arbiter. But if the employer appeals, then the end date shall be extended until the day when the appellate court’s decision shall become final. Hence, as a consequence, the liability of the employer, if he loses on appeal, will increase.

ISSUE Whether or not Pionilla was illegally dismissed and hence entitled to reinstatement and full back wages

Nacar filed a labor case against Gallery Frames alleging he was dismissed without cause on January 24, 1997. On October 15, 1998, the Labor Arbiter (LA) found Gallery Frames guilty of illegal dismissal hence the Arbiter awarded Nacar damages consisting of backwages and separation pay.

HELD An illegally dismissed employee is entitled to either reinstatement, if viable or separation pay if reinstatement is no longer viable and backwages. In certain cases, however, the Court has ordered reinstatement of the employee without backwages considering the fact that (1) the dismissal of the employee would be too harsh a penalty and, (2) the employer was in good faith in terminating the employee.

Gallery Frames appealed all the way to the Supreme Court (SC). The Supreme Court affirmed the decision of the Labor Arbiter and the decision became final on May 27, 2002.

The Court observed that: (a) the penalty of dismissal was too harsh of a penalty to be imposed against Pionilla for his infractions; and (b) IMI was in good faith when it dismissed Pionilla as his dereliction of its policy on ID usage was honestly perceived to be a threat to the company's security. In this respect, since these circumstances trigger the application of the exception to the rule on backwages, the Court finds it proper to accord the same disposition and consequently directs

After the finality of the SC decision, Nacar filed a motion before the LA for recomputation as he alleged that his backwages should be computed from the time of his illegal dismissal (January 24, 1997) until the finality of the SC decision (May 27, 2002) with interest. The LA denied the motion as he ruled that the reckoning point of the computation should only be from the time Nacar was illegally dismissed (January 24, 1997) until the decision of the LA (October 15, 1998).

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the deletion of the award of back wages in favor of Pionilla, notwithstanding the illegality of the dismissal.

DISPUTE SETTLEMENT

UNITED TOURIST PROMOTIONS v. HARLAND B. KEMPLIN (Security of Tenure) G.R. No. 205453, February 05, 2014, Reyes

PEOPLE’S BROADCASTING V. SECRETARY OF LABOR G.R. No. 179652, May 8, 2009

United Tourist Promotions employed Kemplin to be its President for a period of five years, to commence on March 1, 2002 and to end on March 1, 2007, “renewable for the same period, subject to new terms and conditions”. Kemplin continued to render his services to UTP even after his fixed term contract of employment expired. Records show that on May 12, 2009, Kemplin, signing as President of UTP, entered into advertisement agreements with Pizza Hut and M. Lhuillier. Kemplin then filed for illegal dismissal against petitioner

Jandeleon Juezan filed a complaint before the DOLE against Bombo Radyo Phils for illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay for holiday and rest day and illegal diminution of benefits, delayed payment of wages and non-coverage of SSS, PAG-IBIG and Philhealth. On the basis of the complaint, the DOLE conducted a plant level inspection. After the conduct of summary investigations, the DOLE Regional Director held that Juezan was an employee of Bombo Radyo, and therefore entitled to money claims. Bombo Radyo appealed the decision, but DOLE dismissed the same. CA affirmed such dismissal.

ISSUE Whether or not Kemplin is a regular employee Whether or not Kemplin was illegally dismissed

ISSUE Whether or not the Secretary of Labor has the power to determine the existence of an employer-employee relationship and settled the dispute.

HELD YES. Considering that he continued working as President for UTP for about one (1) year and five (5) months and since [his] employment is not covered by another fixed term employment contract, [Kemplin’s] employment after the expiration of his fixed term employment is already regular. Therefore, he is guaranteed security of tenure and can only be removed from service for cause and after compliance with due process. This is notwithstanding [UTP and Jersey’s] insistence that they merely tolerated [Kemplin’s] "consultancy" for humanitarian reasons.

RULING NO. Art. 128 (b) of the Labor Code, as amended by R.A. 7730. The provision is explicit that the visitorial and enforcement power of the DOLE comes into play only “in cases when the relationship of employeremployee still exists.” This clause signifies that the employer-employee relationship must have existed even before the emergence of the controversy. Necessarily, the DOLE’s power does not apply in two instances, namely: (i) where the employer-employee relationship has ceased; and (ii) where no such relationship has ever existed. The existence of an employer-employee relationship is a statutory prerequisite to and a limitation on the power of the Secretary of Labor, one which the legislative branch is entitled to impose. The rationale underlying this limitation is to eliminate the prospect of competing conclusions of the Secretary of Labor and the NLRC. If the Secretary of Labor proceeds to exercise his visitorial and enforcement powers absent the first requisite, his office confers jurisdiction on itself which it cannot otherwise acquire. Nevertheless, a mere assertion of absence of employer-employee relationship does not deprive the DOLE of jurisdiction over the claim. At least a prima facie showing of such absence of relationship, as in this case, is needed to preclude the DOLE from the exercise of its power.

In this case, [UTP and Jersey] failed to prove the existence of just cause for his termination. The pendency of a criminal suit against an employee, does not, by itself, sufficiently establish a ground for an employer to terminate the former. It also bears stressing that the letter failed to categorically indicate which of the policies of UTP did Kemplin violate to warrant his dismissal from service. Further, Kemplin was never given the chance to refute the charges against him as no hearing and investigation were conducted. Corollarily, in the absence of a hearing and investigation, the existence of just cause to terminate Kemplin could not have been sufficiently established. The Court is well aware that reinstatement is the rule and, for the exception of "strained relations" to apply, it should be proved that it is likely that, if reinstated, an atmosphere of antipathy and antagonism would be generated as to adversely affect the efficiency and productivity of the employee concerned. Under the doctrine of strained relations, the payment of separation pay is considered an acceptable alternative to reinstatement when the latter option is no longer desirable or viable.

UPDATE: The case is heard again by the court. From the 2008 decision, PAO filed a Motion for Clarification of Decision (with Leave of Court). The PAO sought to clarify as to the visitorial and enforcement power of DOLE can be considered as co-extensive with the power to determine the existence of an Er-Ee relationship. In March 6, 2012, the Court resolved the

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second motion for reconsideration overturning the first decision.

be assisted by non-union members, and committed acts of disloyalty which are inimical to the interest of FLAMES. In their campaign, they allegedly colluded with the officers of the Meralco Savings and Loan Association (MESALA) and the Meralco Mutual Aid and Benefits Association (MEMABA) and exerted undue influence on the members of FLAMES. COMELEC issued a Decision, declaring private respondents officially disqualified to run and/or to participate in the FLAMES elections. The COMELEC also resolved to exclude their names from the list of candidates in the polls or precincts, and further declared that any vote cast in their favor shall not be counted. According to the COMELEC, private respondents violated Article IV, Section 4(a)(6) of the FLAMES Constitution and By-Laws (CBL) by allowing non-members to aid them in their campaign. Their acts of solicitation for support from non-union members were deemed inimical to the interest of FLAMES.

Revised Ruling: No limitation in the law was placed upon the power of the DOLE to determine the existence of an employeremployee relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRCs determination of the existence of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the power to determine whether or not an employer-employee relationship exists, and from there to decide whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by RA 7730.

The provision relied upon by the COMELEC in disqualifying private respondents applies to a case of expulsion of members from the union. In full, Article IV, Section 4 (a) (6) of the FLAMES CBL, provides, to wit:

The determination of the existence of an employeremployee relationship by the DOLE must be respected. The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered nugatory if the alleged employer could, by the simple expedient of disputing the employeremployee relationship, force the referral of the matter to the NLRC. The Court issued the declaration that at least a prima facie showing of the absence of an employer-employee relationship be made to oust the DOLE of jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is the DOLE that will weigh it, to see if the same does successfully refute the existence of an employer-employee relationship.

Section 4(a). Any member may be DISMISSED and/or EXPELLED from the UNION, after due process and investigation, by a two-thirds (2/3) vote of the Executive Board, for any of the following causes: (6) Acting in a manner harmful to the interest and welfare of the UNION and/or its MEMBERS. Issue: Whether or not private respondents were validly disqualified

If the DOLE makes a finding that there is an existing employer-employee relationship, it takes cognizance of the matter, to the exclusion of the NLRC. The DOLE would have no jurisdiction only if the employeremployee relationship has already been terminated, or it appears, upon review, that no employer-employee relationship existed in the first place.

Held: No. First, Article IV, Section 4(a)(6) of the FLAMES CBL, embraces exclusively the case of dismissal and/or expulsion of members from the union. Even a cursory reading of the provision does not tell us that the same is to be automatically or directly applied in the disqualification of a candidate from union elections, which is the matter at bar. It cannot be denied that the COMELEC erroneously relied on Article IV, Section 4(a)(6) because the same does not contemplate the situation of private respondents Daya, et al. The latter are not sought to be expelled or dismissed by the Executive Board. They were brought before the COMELEC to be disqualified as candidates in the 7 May 2003 elections.

DIOKNO vs. CACDAC G.R. No. 168475, July 4, 2007, Chico Nazario The First Line Association of Meralco Supervisory Employees (FLAMES) is a legitimate labor organization which is the supervisory union of Meralco. Petitioners and private respondents are members of FLAMES. FLAMES Executive Board created the Committee on Election (COMELEC) for the conduct of its union elections. Subsequently, private respondents filed their respective certificates of candidacy.

Second, the aforecited provision evidently enunciates with clarity the procedural course that should be taken to dismiss and expel a member from FLAMES. The CBL is succinct in stating that the dismissal and expulsion of a member from the union should be after due process and investigation, the same to be exercised by two-thirds (2/3) vote of the Executive

Petitioners filed a Petition with the COMELEC seeking the disqualification of private respondents. Petitioners alleged that private respondents allowed themselves to

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Board for any of the cause mentioned therein. The unmistakable directive is that in cases of expulsion and dismissal, due process must be observed as laid down in the CBL.

guards by Jaguar. They were assigned at the premises of Delta in Libis, Quezon City. Caranyagan and Tamayo were terminated by Jaguar. Allegedly their dismissals were arbitrary and illegal. Sales, Moron, Fetalvero and Silva remained with Jaguar. All the guard-employees, claim for monetary benefits. In addition to these money claims, Caranyagan and Tamayo argue that they were entitled to separation pay and back wages, for the time they were illegally dismissed until finality of the decision. Furthermore, all respondents claim for moral and exemplary damages. Respondent security guards instituted the instant labor case before the labor arbiter. The LA dismissed the charges of illegal dismissal on the part of the complainants Tamayo and Caranyagan for lack of merit but ordering respondents., to jointly and severally pay all the six complainants money claims for their services. Petitioner Jaguar filed a partial appeal questioning the failure of public respondent NLRC to resolve its cross-claim against Delta as the party ultimately liable for payment of the monetary award to the security guards. The NLRC dismissed the appeal, holding that it was not the proper forum to raise the issue. Petitioner filed a petition for certiorari with the CA. CA dismissed the petition for lack of merit.

Third, nevertheless, even if we maintain a lenient stance and consider the applicability of Article IV, Section 4(a)(6) in the disqualification of private respondents Daya, et al., from the elections of 7 May 2003, still, the disqualification made by the COMELEC pursuant to the subject provision was a rank disregard of the clear due process requirement embodied therein. Nowhere do we find that private respondents Daya, et al. were investigated by the Executive Board. Neither do we see the observance of the voting requirement as regards private respondents Daya, et al. In all respects, they were denied due process. Fourth, the Court of Appeals, the BLR Director, and the Med-Arbiter uniformly found that due process was wanting in the disqualification order of the COMELEC. We are in accord with their conclusion. If, indeed, there was a violation by private respondents Daya, et al., of the FLAMES CBL that could be a ground for their expulsion and/or dismissal from the union, which in turn could possibly be made a ground for their disqualification from the elections, the procedural requirements for their expulsion should have been observed. In any event, therefore, whether the case involves dismissal and/or expulsion from the union or disqualification from the elections, the proper procedure must be observed. The disqualification ruled by the COMELEC against private respondents Daya, et al., must not be allowed to abridge a clear procedural policy established in the FLAMES CBL. If we uphold the COMELEC, we are countenancing a clear case of denial of due process which is anathema to the Constitution of the Philippines which safeguards the right to due process.

Petitioner insists that its cross-claim should have been ruled upon in the labor case as the filing of a crossclaim is allowed under Section 3 of the NLRC Rules of Procedure which provides for the suppletory application of the Rules of Court. Petitioner argues that the claim arose out of the transaction or occurrence that is the subject matter of the original action. Petitioner further argues that as principal, Delta Milling Industries, Inc. (Delta Milling) is liable for the awarded wage increases, pursuant to Wage Order Nos. NCR04, NCR-05 and NCR-06; and in line with the ruling in Eagle Security Agency, Inc. v. National Labor Relations Commission, petitioner should be reimbursed of any payments to be made.

Fifth, from another angle, the erroneous disqualification of private respondents Daya, et al., constituted a case of disenfranchisement on the part of the member-voters of FLAMES. By wrongfully excluding them from the 7 May 2003 elections, the options afforded to the union members were clipped. Hence, the mandate of the union cannot be said to have been rightfully determined. The factual irregularities in the FLAMES elections clearly provide proper bases for the annulment of the union elections of 7 May 2003.

ISSUE Whether petitioner may claim reimbursement from Delta Milling through a cross-claim filed with the labor court. RULING In the present case, there exists no employeremployee relationship between petitioner and Delta Milling. In its cross-claim, petitioner is not seeking any relief under the Labor Code but merely reimbursement of the monetary benefits claims awarded and to be paid to the guard employees. There is no labor dispute involved in the cross-claim against Delta Milling. Rather, the cross-claim involves a civil dispute between petitioner and Delta Milling. Petitioner's crossclaim is within the realm of civil law, and jurisdiction over it belongs to the regular courts. Moreover, the liability of Delta Milling to reimburse petitioner will only arise if and when petitioner actually pays its employees the adjudged liabilities. Payment, which

JAGUAR SECURITY V. SALES G.R. No. 162420, April 22, 2008, Austria Martinez Petitioner Jaguar Security and Investigation Agency (Jaguar) is a private corporation engaged in the business of providing security services to its clients, one of whom is Delta Milling Industries, Inc. (Delta). Private respondents Sales, Tamayo, Caranyagan, Silva, Jr., Moron and Fetalvero were hired as security

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means not only the delivery of money but also the performance, in any other manner, of the obligation, is the operative fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the debtors. In this case, it appears that petitioner has yet to pay the guard employees.

G.R. No. 176466

PIONEER CONCRETE PHILIPPINES, TODARO G.R. No. 154830, June 8, 2007 Austria-Martinez

Respondent filed with the petitioner his application to obtain the benefits in his SSS and PhilHealth, but the petitioner allegedly failed to file such and respondents claim for reimbursement of his hospital expenses was also denied by the petitioner since it was filed out of time with SSS. Thus, he filed in Davao a case for illegal deduction.

INC.

Respondent was an employee of the petitioner, during his work he received and injury on his finger, which caused him to be hospitalized, their principal first shouldered the expenses then it was charged on petitioner which later on charged to respondent.

v.

Antonio Todaro filed with the Makati RTC a complaint for Sum of Money and Damages against Pioneer International Limited (PIL), an Australian corporation, Pioneer Concrete Philippines, Inc. (PCPI), and Pioneer Philippines Holdings, Inc. (PPHI). Todaro has just resigned from another company when PIL contacted Todaro and asked him if he was available to join them in connection with their intention to establish a readymix concrete plant and other related operations in the Philippines. Subsequently, PIL and Todaro came to an agreement wherein the former consented to engage the services of the latter as a consultant for two to three months, after which, he would be employed as the manager of PIL's ready-mix concrete operations should the company decide to invest in the Philippines. Subsequently, PIL started its operations in the Philippines. However, it refused to comply with its undertaking to employ Todaro on a permanent basis. Petitioners moved to dismiss the complaint on the ground that RTC has no jurisdiction over the subject matter as the same is within the jurisdiction of the NLRC.

Petitioner then pending resolution of the first case reassigned respondent to Manila in a night-shift which is alleged to be a schedule whose income is unstable and is irregular contrary to which being granted to him in his current work with the petitioner. Thus, he filed in Manila a case for illegal dismissal. Petitioner now sought to dismiss the complaint as he alleged that respondent is guilty of forum-shopping ISSUE WON respondent is guilty of forum-shopping RULING No, the law upon which petitioner stand states "a party having more than one cause of action against the other party arising out of the same relationship shall include all of them in one complaint or petition." (Section 1 (b), Rule 3 of the NLRC Rules of Procedure).

ISSUE Which court has jurisdiction over the dispute?

In the present case this is not applicable because of the fact that at the time when the first complaint was filed, the second complaint cannot be currently filed because it has not yet happened yet, therefore it would have been impossible for the respondent to file a case of illegal dismissal prior the re-assignment made by the petitioner.

RULING The RTC has jurisdiction. Where no employeremployee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. In the present case, no employer-employee relationship exists between petitioners and respondent. In fact, in his complaint, private respondent is not seeking any relief under the Labor Code, but seeks payment of damages on account of petitioners' alleged breach of their obligation under their agreement to employ him. It is settled that an action for breach of contractual obligation is intrinsically a civil dispute. In the alternative, respondent seeks redress on the basis of the provisions of Articles 19 and 21 of the Civil Code. Hence, it is clear that the present action is within the realm of civil law, and jurisdiction over it belongs to the regular courts.

There is no violation of forum-shopping because the two action is based on a different set of facts and different causes of action the first is grounded upon the illegal collection made by the petitioner against respondent and the second is based on the reassignment which is being alleged to be a constructive dismissal and as a means of harassment, ruling on either case would not affect the resolution nor conflict with the other. METRO TRANSIT ORGANIZATION, INC. AND JOSE L. CORTEZ, JR. V. PIGLAS NFWU-KMU AND SAMMY MALUNES, ET AL. G.R. No. 175460, April 14, 2008, Chico-Nazario

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For purposes of CBA, MTO’s rank and file employees formed the Pinag-isnag Lakas ng Manggagawa sa Metro, Inc. – National Federation of Labor (PIGLAS). Meanwhile, its managerial and supervisory employees created their own union, Supervisory Employees Association of Metro (SEAM).

reconsideration would have aptly furnished a plain, speedy, and adequate remedy. As a rule, the CA, in the exercise of its original jurisdiction, will not take cognizance of a petition for certiorari under Rule 65, unless the lower court has been given the opportunity to correct the error imputed to it. MTO’s failure to file a motion for reconsideration against the assailed Resolution of the NLRC rendered its petition for certiorari before the appellate court as fatally defective.

MTO and PIGLAS entered into a CBA. SEAM similarly negotiated with MTO under a separate CBA. Disgruntled with PIGLAS, some rank-and-file employees formed another union with the umbrella of the Philippine Transport Group Workers Organization – Trade Union Congress of the PH (PTGWO-TUCP), which negotiated with management for certification as the new bargaining agent. The intra-union dispute was settled through a certification election where PIGLAS won. PIGLAS then renegotiated the CBA demanding higher benefits.

This case does not fall under any of the recognized exceptions to the filing of a motion for reconsideration, to wit: (1) when the issue raised is purely of law; (2) when public interest is involved; (3) in case of urgency; or when the questions raised are the same as those that have already been squarely argued and exhaustively passed upon by the lower court. HACIENDA VALENTIN-BALABAG V. SECRETARY OF LABOR G.R. No. 159026, February 11, 2008, Austria Martinez

On July 25, 2000, due to a bargaining deadlock, PIGLAS filed a notice of strike then staged a strike. Sec. of DOLE then issued an order or assumption of jurisdiction/return to work but the striking employees refused to receive a copy of the order, hence, they were posted in the stations and terminals of the LRT but the striking PIGLAS members still refused to accede to the order. Thus, the LRTA formally informed MTO that it issued a board resolution which allowed LRTA’s MOA to expire, directed the LRTA to take over the operations and maintenance of the LRT Line so MTO sent termination notices to its employees.

Mardy Cabigo and 40 other workers (private respondents) filed with the Department of Labor and Employment-Bacolod District Office (DOLE Bacolod) a request for payroll inspection of Hacienda Valentin Balabag owned by Alberta Yanson (petitioner). DOLE Bacolod conducted an inspection of petitioner's establishment and issued a Notice of Inspection Report, finding petitioner liable for the following violations of labor standard laws and directing her to correct the same.

PIGLAS members thereafter filed a complaint against MTO and the LRTA for illegal dismissal, ULP for union busting, damages, and attorney’s fees. The LA declared the dismissal illegal. NLRC denied the appeal for non-perfection since MTO failed to post the required bond. MR was denied. CA affirmed. Hence, this petition.

In a Compliance Order dated August 12, 1998, DOLE Bacolod directed petitioner to pay, within five (5) days,P9,084.00 to each of the 41 respondents or a total of P372,444.00, and to submit proof of payment thereof. It also required petitioner to correct existing violations of occupational safety and health standards.

ISSUE Was the availment for the extraordinary remedy of certiorari proper?

Petitioner filed with DOLE Bacolod a Double Verified Special Appearance to Oppose "Writ of Execution" For Being a Blatant and Dangerous Violation of Due Process, claiming that she did not receive any form of communication, or participate in any proceeding relative to the subject matter of the writ of execution.

HELD No. The rule is, for the writ to issue, it must be shown that there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law. A motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari. Its purpose is to grant an opportunity for the court to correct any actual or perceived error attributed to it by the re-examination of the legal and factual circumstances of the case. The rationale of the rule rests upon the presumption that the court or administrative body which issued the assailed order or resolution may amend the same, if given the chance to correct its mistake or error.

Petitioner filed with public respondent a Verified Appeal and Supplement to the Verified Appeal, posting therewith an appeal bond of P1,000.00 in money order and attaching thereto a Motion to be Allowed to Post Minimal Bond with Motion for Reduction of Bond. Public respondent dismissed her appeal. ISSUE Whether or not CA was correct in holding that public respondent did not commit grave abuse of discretion in rejecting the appeal of petitioner due to the insufficiency of her appeal bond.

In the case at bar, MTO directly went to the Court of Appeals on certiorari without filing a motion for reconsideration with the NLRC. The motion for

RULING

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Yes. As held in Allied Investigation Bureau, Inc. v. Secretary of Labor and Employment, the CA held that public respondent did not commit grave abuse of discretion in holding that petitioner failed to perfect her appeal due to the insufficiency of her bond.

Under the foregoing Implementing Rules, it is plain that public respondent has no authority to accept an appeal under a reduced bond.

was no clear intention on the respondents part to sever the employer-employee relationship. Considering that intention is a mental state, the petitioner must show that the respondents overt acts point unerringly to his intent not to work anymore. That abandonment is negated finds support in a long line of cases where the immediate filing of a complaint for illegal dismissal was coupled with a prayer for reinstatement; the filing of the complaint for illegal dismissal is proof enough of the desire to return to work.The prayer for reinstatement, as in this case, speaks against any intent to sever the employer-employee relationship. We additionally take note of the undisputed fact that the respondent had been in the petitioners employ for 23 years. Prior to his dismissal, the respondents service record was unblemished having had no record of infraction of company rules. abandonment after the respondents long years of service and the consequent surrender of benefits earned from years of hard work are highly unlikely. Under the given facts, no basis in reason exists for the petitioners theory that the respondent abandoned his job.

PENTAGON STEEL CORP. V. CA G.R. No. 174141, June 26, 2009, Brion

MASMUD v. NLRC G.R. No. 183385, February 13, 2009, Nachura

The petitioner, a corporation engaged in the manufacture of G.I. wire and nails, employed respondent Perfecto Balogo (the respondent) since September 1, 1979 in its wire drawing department. The petitioner alleged that the respondent absented himself from work on August 7, 2002 without giving prior notice of his absence. As a result, the petitioner sent him a letter by registered mail dated August 12, 2002, written in Filipino, requiring an explanation for his absence. The petitioner sent another letter to the respondent on August 21, 2002, also by registered mail, informing him that he had been absent without official leave (AWOL) from August 7, 2002 to August 21, 2002.

The late Alexander J. Masmud (Alexander), the husband of Evangelina Masmud (Evangelina) filed a complaint against First Victory Shipping Services and Angelakos (Hellas) S.A. on July 9, 2003 for nonpayment of permanent disability benefits, medical expenses, sickness allowance, moral and exemplary damages, and attorney's fees. Alexander engaged the services of Atty. Rolando B. Go, Jr. (Atty. Go) as his counsel. In consideration of Atty. Go's legal services, Alexander agreed to pay attorney's fees on a contingent basis, as follows: twenty percent (20%) of total monetary claims as settled or paid and an additional ten percent (10%) in case of appeal.

The respondent alleged that on August 6, 2002, he contracted flu associated with diarrhea and suffered loose bowel movement due to the infection. The respondent maintained that his illness had prevented him from reporting for work for ten (10) days. When the respondent finally reported for work on August 17, 2002, the petitioner refused to take him back despite the medical certificate he submitted. On August 19, 2002, the respondent again reported for work, exhibiting a note from his doctor indicating that he was fit to work. The petitioner, however, did not allow him to resume work on the same date. Issue: whether or not respondent abandoned his job. Respondent did not abandon his job First, the respondent had a valid reason for absenting himself from work. The respondent presented a medical certificate from his doctor attesting to the fact that he was sick with flu associated with diarrhea or loose bowel movement which prevented him from reporting for work for 10 days. The petitioner never effectively refuted the respondents reason for his absence. Second, there

On November 21, 2003, LA rendered a Decision granting the monetary claims of Alexander. Alexander's employer filed an appeal before the NLRC. During the pendency of the proceedings before the NLRC, Alexander died. After explaining the terms of the lawyer's fees to Evangelina, Atty. Go caused her substitution as complainant. On April 30, 2004, the NLRC rendered a Decision dismissing the appeal of Alexander's employer. On appeal before the CA, the decision of the LA was affirmed with modification. Thereafter, Alexander‘s employer appealed to the Supreme Court.

Under Department Order No. 18-02 (Implementing Rules), Series of 2002, amending Department Order No. 7-A, Series of 1995, implementing Article 128(b), thus: Section 9. Cash or surety bond; when required. - In case the order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a duly accredited bonding company. The bond should be in the amount equivalent to the monetary award indicated in the order.

On February 6, 2006, the Court issued a Resolution dismissing the case for lack of merit.On January 10, 2005, the LA directed the NLRC Cashier to release the amount of P3,454,079.20 to Evangelina. Out of the said amount, Evangelina paid Atty. Go the sum of P680,000.00. Dissatisfied, Atty. Go filed a motion to record and enforce the attorney's lien alleging that Evangelina reneged on their contingent fee

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agreement. Evangelina paid only the amount of P680,000.00, equivalent to 20% of the award as attorney's fees, thus, leaving a balance of 10%, plus the award pertaining to the counsel as attorney's fees.

In lieu of a position paper, petitioner submitted a Manifestation contending that the complaint should be dismissed because the Labor Arbiter had no jurisdiction over it since, under their Collective Bargaining Agreement (CBA), such matters must first be brought before the company's grievance machinery.

ISSUE Should the legal compensation of a lawyer in a labor proceeding be based on Article 111 of the Labor Code HELD NO. Contrary to Evangelina’s proposition, Article 111 of the Labor Code deals with the extraordinary concept ofattorney’s fees. It regulates the amount recoverable as attorney's fees in the nature of damages sustained by and awarded to the prevailing party. It may not be used as the standard in fixing the amount payable to the lawyer by his client for the legal services he rendered. In this regard, Section 24, Rule 138 of the Rules of Court should be observed in determining Atty. Go’s compensation. Considering that Atty. Go successfully represented his client, it is only proper that he should receive adequate compensation for his efforts. Even as we agree with the reduction of the award of attorney's fees by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the need to secure to him his honorarium lawfully earned as a means to preserve the decorum and respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of his client as the client is against abuse on the part of his counsel. The duty of the court is not alone to ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just fees. With his capital consisting of his brains and with his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best in him to secure justice for his client; he himself would not get his due.

ISSUE W/N grievance machinery procedure should have been followed first before respondents complaint for illegal dismissal could be given due course RULING NO. Under Art. 217, it is clear that a labor arbiter has original and exclusive jurisdiction over termination disputes. On the other hand, under Article 261, a voluntary arbitrator has original and exclusive jurisdiction over grievances arising from the interpretation or enforcement of company policies. As a general rule then, termination disputes should be brought before a labor arbiter, except when the parties, under Art. 262, unmistakably express that they agree to submit the same to voluntary arbitration. In the present case, the CBA provision on grievance machinery being invoked by petitioner does not expressly state that termination disputes are included in the ambit of what may be brought before the company's grievance machinery. TIMOTEO H. SARONA vs. NATIONAL LABOR RELATIONS COMMISSION, ROYALE SECURITY AGENCY (FORMERLY SCEPTRE SECURITY AGENCY) and CESAR S. TAN G.R. No. 185280, January 18, 2012 Petitioner was hired in 1976 by Sceptre as a security guard. In 2003, he was asked to resign as a requirement for his application for a position at Royale. Shortly thereafter, however, he was dismissed. Petitioner filed a complaint for illegal dismissal, in which he prayed for piercing the corporate veil of Sceptre and Royale in connection with computing for his separation pay. The Labor Arbiter ruled in petitioner’s favor but refused to pierce the corporate veil. Petitioner filed a reply to the respondents’ Memorandum of Appeal. As the filing of an appeal is the prescribed remedy, the NLRC dismissed the petitioner’s efforts to reverse the Labor Arbiter’s decision, essentially saying that petitioner has already waived his right to question the latter’s decision. On the other hand, respondent argues that the petitioner is barred from questioning the manner by which his backwages and separation pay were computed as he had, earlier, moved for the execution of the NLRC’s November 30, 2005 Decision and the respondents paid him the full amount of the monetary award

NEGROS METAL CORPORATION VS. ARMELIO LAMAYO G.R. No. 186557, August 25, 2010 Armelo J. Lamayo (respondent) began working for Negros Metal Corporation (petitioner or the company) in September 1999 as a machinist. Sometime in May 2002, company manager, called his attention why he was using the grinder there to which he replied that since the machine there was bigger, he would finish his work faster. Respondents explanation was found unsatisfactory hence, he was, via memorandum, charged of loitering and warned. He was at first suspended but informed by Uy that his services had been terminated and that he should draft his resignation letter, drawing respondent to file a complaint for illegal dismissal.

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thereunder shortly after the writ of execution was issued.

In case separation pay is awarded and reinstatement is no longer feasible, backwages shall be computed from the time of illegal dismissal up to the finality of the decision should separation pay not be paid in the meantime. It is the employee’s actual receipt of the full amount of his separation pay that will effectively terminate the employment of an illegally dismissed employee. Otherwise, the employer-employee relationship subsists and the illegally dismissed employee is entitled to backwages, taking into account the increases and other benefits, including the 13th month pay, that were received by his co-employees who are not dismissed. It is the obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the salaries or wages, plus all other benefits and bonuses and general increases, to which he would have been normally entitled had he not been dismissed and had not stopped working.

ISSUES Whether the full satisfaction of the award under the NLRC’s November 30, 2005 Decision bars the petitioner from questioning the validity thereof Whether the petitioner’s backwages should be limited to his salary for three (3) months RULING Because his receipt of the proceeds of the award under the NLRC’s November 30, 2005 Decision is qualified and without prejudice to the CA’s resolution of his petition for certiorari, the petitioner is not barred from exercising his right to elevate the decision of the CA to this Court. The petitioner’s receipt of the monetary award adjudicated by the NLRC is not absolute, unconditional and unqualified. The petitioner’s May 3, 2007 Motion for Release contains a reservation, stating in his prayer that: "it is respectfully prayed that the respondents and/or Great Domestic Insurance Co. be ordered to RELEASE/GIVE the amount of P23,521.67 in favor of the complainant TIMOTEO H. SARONA without prejudice to the outcome of the petition with the CA."

In fine, this Court holds Royale liable to pay the petitioner backwages to be computed from his dismissal on October 1, 2003 until the finality of this decision. Nonetheless, the amount received by the petitioner from the respondents in satisfaction of the November 30, 2005 Decision shall be deducted accordingly. NOTE: I did not include issue on piercing the corporate veil as I am not sure if it is important to the subject of dispute settlement

The prevailing party’s receipt of the full amount of the judgment award pursuant to a writ of execution issued by the labor arbiter does not close or terminate the case if such receipt is qualified as without prejudice to the outcome of the petition for certiorari pending with the CA. Simply put, the execution of the final and executory decision or resolution of the NLRC shall proceed despite the pendency of a petition for certiorari, unless it is restrained by the proper court.

McBurnie v. Ganzon, EGI-Managers, Inc. G.R. Nos. 178034 & 178117, G R. Nos. 186984-85, October 17, 2013, Reyes On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and other monetary claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a five-year employment agreement with the company EGI as an Executive Vice-President who shall oversee the management of the company’s hotels and resorts within the Philippines. He performed work for the company until sometime in November 1999, when he figured in an accident that compelled him to go back to Australia while recuperating from his injuries. While in Australia, he was informed by respondent Ganzon that his services were no longer needed because their intended project would no longer push through.

It is well-settled, even axiomatic, that if reinstatement is not possible, the period covered in the computation of backwages is from the time the employee was unlawfully terminated until the finality of the decision finding illegal dismissal. With respect to the petitioner’s backwages, this Court cannot subscribe to the view that it should be limited to an amount equivalent to three (3) months of his salary. Backwages is a remedy affording the employee a way to recover what he has lost by reason of the unlawful dismissal. In awarding backwages, the primordial consideration is the income that should have accrued to the employee from the time that he was dismissed up to his reinstatement and the length of service prior to his dismissal is definitely inconsequential.

The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly invest in and establish a company for the management of hotels. They did not intend to create an employeremployee relationship, and the execution of the employment contract that was being invoked by McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work permit in the Philippines. At the time McBurnie left for Australia for

If reinstatement is no longer possible, backwages should be computed from the time the employee was terminated until the finality of the decision, finding the dismissal unlawful.

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his medical treatment, he had not yet obtained a work permit.

their obligation to satisfy their employees’ just and lawful claims.

In a Decision dated September 30, 2004, the LA declared McBurnie as having been illegally dismissed from employment, and thus entitled to receive from the respondents the following amounts: (a) US$985,162.00 as salary and benefits for the unexpired term of their employment contract, (b) P2,000,000.00 as moral and exemplary damages, and (c) attorney’s fees equivalent to 10% of the total monetary award.

To begin with, the Court rectifies its prior pronouncement – the unqualified statement that even an appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety bond securing the full amount of the judgment award within the 10-day reglementary period to perfect the appeal. MANILA PAVILION HOTEL VS. DELADA G.R. No. 189947, January 25, 2012, Sereno

Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC. On November 5, 2004, they filed their Memorandum of Appeal and Motion to Reduce Bond, and posted an appeal bond in the amount of P100,000.00.

Delada was the Union President of the Manila Pavilion Supervisors Association at MPH. He was originally assigned as Head Waiter of Rotisserie, a fine-dining restaurant operated by petitioner. Pursuant to a supervisory personnel reorganization program, MPH reassigned him as Head Waiter of Seasons Coffee Shop, another restaurant operated by petitioner at the same hotel. Respondent declined the inter-outlet transfer and instead asked for a 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 ongoing.

On March 31, 2005, the NLRC denied the motion to reduce bond, explaining that "in cases involving monetary award, an employer seeking to appeal the [LA’s] decision to the Commission is unconditionally required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award x x x." Thus, the NLRC required from the respondents the posting of an additional bond in the amount of P54,083,910.00. ISSUE This case concerns the sufficiency of the appeal bond that was posted by the respondents.

MPH replied and told respondent to report to his new assignment for the time being, without prejudice to the resolution of the grievance involving the transfer. He adamantly refused to assume his new post at the Seasons Coffee Shop and instead continued to report to his previous assignment at Rotisserie. Thus, MPH sent him several memoranda on various dates, requiring him to explain in writing why he should not be penalized for the following offenses: serious misconduct; willful disobedience of the lawful orders of the employer; gross insubordination; gross and habitual neglect of duties; and willful breach of trust. Despite the notices from MPH, Delada persistently rebuffed orders for him to report to his new assignment. According to him, since the grievance machinery under their CBA had already been initiated, his transfer must be held in abeyance. Thus, on 9 May 2007, MPH initiated administrative proceedings against him.

HELD The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which was substantially the same provision in effect at the time of the respondents’ appeal to the NLRC. The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory requisite for the perfection of an appeal by the employer as inferred from the provision that an appeal by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only" makes it clear that the posting of a cash or surety bond by the employer is the essential and exclusive means by which an employer’s appeal may be perfected. x x x.

ISSUE Whether MPH retained the authority to continue with the administrative case against Delada for insubordination and willful disobedience of the transfer order

Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders the decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of the employer’s appeal. It is intended to discourage employers from using an appeal to delay or evade

RULING Accordingly, we rule in this case that MPH did not lose its authority to discipline respondent for his continued refusal to report to his new assignment. In relation to this point, we recall our Decision in Allied Banking Corporation v. Court of Appeals.

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In Allied Banking Corporation, employer Allied Bank reassigned respondent Galanida from its Cebu City branch to its Bacolod and Tagbilaran branches. He refused to follow the transfer order and instead filed a Complaint before the Labor Arbiter for constructive dismissal. While the case was pending, Allied Bank insisted that he report to his new assignment. When he continued to refuse, it directed him to explain in writing why no disciplinary action should be meted out to him. Due to his continued refusal to report to his new assignment, Allied Bank eventually terminated his services. When the issue of whether he could validly refuse to obey the transfer orders was brought before this Court, we ruled thus:

Rivera was employed as Unilever's Area Activation Executive for Area 9 South in the cities of Cotabato and Davao. Sometime in 2007, Unilever’s internal auditor conducted a random audit and found out that there were fictitious billings and fabricated receipts supposedly from Ventureslink amounting to P11,200,000.00. It was also discovered that some funds were diverted from the original intended projects. Upon further verification, It was found that the fund deviations were upon the instruction of Rivera. On July 16, 2007, Unilever issued a show-cause notice to Rivera asking her to explain the following charges, to wit: a) Conversion and Misappropriation of Resources; b) Breach of Fiduciary Trust; c) Policy Breaches; and d) Integrity Issues.

The refusal to obey a valid transfer order constitutes willful disobedience of a lawful order of an employer. Employees may object to, negotiate and seek redress against employers for rules or orders that they regard as unjust or illegal. However, until and unless these rules or orders are declared illegal or improper by competent authority, the employees ignore or disobey them at their peril. For Galanida’s continued refusal to obey Allied Bank's transfer orders, we hold that the bank dismissed Galanida for just cause in accordance with Article 282(a) of the Labor Code. Galanida is thus not entitled to reinstatement or to separation pay. (Emphasis supplied, citations omitted).

Rivera admitted the fund diversions, but explained that such actions were mere resourceful utilization of budget because of the difficulty of procuring funds from the head office. She insisted that the diverted funds were all utilized in the company’s promotional ventures in her area of coverage. Unilever found Rivera guilty of serious breach of the company’s Code of Business Principles compelling it to sever their professional relations.

It is important to note what the PVA said on Delada’s defiance of the transfer order:

ISSUE Whether or not a validly dismissed employee, like Rivera, is entitled to an award of separation pay

In fact, Delada cannot hide under the legal cloak of the grievance machinery of the CBA or the voluntary arbitration proceedings to disobey a valid order of transfer from the management of the hotel. While it is true that Delada’s transfer to Seasons is the subject of the grievance machinery in accordance with the provisions of their CBA, Delada is expected to comply first with the said lawful directive while awaiting the results of the decision in the grievance proceedings. This issue falls squarely in the case of Allied Banking Corporation vs. Court of Appeals x x x.

RULING As a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to a separation pay. In this case, Rivera was dismissed from work because she intentionally circumvented a strict company policy, manipulated another entity to carry out her instructions without the company’s knowledge and approval, and directed the diversion of funds, which she even admitted doing under the guise of shortening the laborious process of securing funds for promotional activities from the head office. These transgressions were serious offenses that warranted her dismissal from employment and proved that her termination from work was for a just cause. Hence, she is not entitled to a separation pay.

Pursuant to Allied Banking, unless the order of MPH is rendered invalid, there is a presumption of the validity of that order. Since the PVA eventually ruled that the transfer order was a valid exercise of management prerogative, we hereby reverse the Decision and the Resolution of the CA affirming the Decision of the PVA in this respect. MPH had the authority to continue with the administrative proceedings for insubordination and willful disobedience against Delada and to impose on him the penalty of suspension. As a consequence, petitioner is not liable to pay back wages and other benefits for the period corresponding to the penalty of 90-day suspension.

More importantly, Rivera did not appeal the March 31, 2009 ruling of the NLRC disallowing the award of separation pay to her. It was Unilever who elevated the case to the CA. It is axiomatic that a party who does not appeal, or file a petition for certiorari, is not entitled to any affirmative relief. Due process prevents the grant of additional awards to parties who did not

UNILEVER PHILIPPINES, INC. v. MARIA RUBY M. RIVERA G.R. No. 201701, June 3, 2013

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appeal. An appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment, but he cannot seek modification or reversal of the judgment or claim affirmative relief unless he has also appealed. It was, therefore, erroneous for the CA to grant an affirmative relief to Rivera who did not ask for it.

employees’ consent had been vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. The circumstances show that petitioner’s misrepresentation led its employees, specifically respondents herein, to believe that the company was suffering losses which necessitated the implementation of the voluntary retirement and retrenchment programs, and eventually the execution of the deeds of release, waiver and quitclaim.

PHILIPPINE CARPET MANUFACTURING CORPORATION v. TAGYAMON G.R. No. 191475, December 11, 2013

PRINCE TRANSPORT, Inc. and Mr. RENATO CLAROS v. DIOSDADO GARCIA et al. G.R. No. 167291, January 12, 2011

Petitioner Philippine Carpet Manufacturing Corporation (PCMC) is a corporation registered in the Philippines engaged in the business of manufacturing wool and yarn carpets and rugs. Respondents were its regular and permanent employees, but were affected by petitioner’s retrenchment and voluntary retirement programs.

Respondents, former employees of Prince Transport transferred to a sub-company Lubas Transport, filed various complaints charging petitioners with illegal dismissal, unfair labor practice and illegal deductions and praying for the award of premium pay for holiday and rest day, holiday pay, service leave pay, 13th month pay, moral and exemplary damages and attorney's fees. The Labor Arbiter ruled that petitioners are not guilty of unfair labor practice in the absence of evidence to show that they violated respondents’ right to selforganization. The Labor Arbiter also held that Lubas is the respondents’ employer and that it (Lubas) is an entity which is separate, distinct and independent from PTI. Nonetheless, the Labor Arbiter found that Lubas is guilty of illegally dismissing respondents from their employment.

Thru a memorandum of dismissal, they were informed that in view of a slump in the market demand for products due to the un-competitiveness of the company's price, the company is constrained to reduce the number of its workforce. Claiming that they were aggrieved by PCMC’s decision to terminate their employment, respondents filed separate complaints for illegal dismissal against PCMC. Respondents primarily relied on the Supreme Court’s decision in Philippine Carpet Employees Association (PHILCEA) v. Hon. Sto. Tomas (Philcea case), as to the validity of the company’s retrenchment program. They further explained that PCMC did not, in fact, suffer losses shown by its acts prior to and subsequent to their termination. They also insisted that their acceptance of separation pay and signing of quitclaim is not a bar to the pursuit of illegal dismissal case.

Respondents filed a Partial Appeal with the NLRC praying, among others, that PTI should also be held equally liable as Lubas. The NLRC modified the Decision of the Labor Arbiter. Respondents filed a Motion for Reconsideration, but the NLRC denied it. Respondents then filed a special civil action for certiorari with the CA assailing the Decision and Resolution of the NLRC. The CA rendered the herein assailed Decision which granted respondents' petition. The CA ruled that petitioners are guilty of unfair labor practice; that Lubas is a mere instrumentality, agent conduit or adjunct of PTI; and that petitioners’ act of transferring respondents’ employment to Lubas is indicative of their intent to frustrate the efforts of respondents to organize themselves into a union. Petitioners filed a Motion for Reconsideration, but the CA denied it.

ISSUE W/N the respondents' acceptance of separation pay and signing of quitclaim is a bar to the pursuit of illegal dismissal case HELD NO. "As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would not amount to estoppel." To excuse respondents from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals, or good customs or prejudicial to a third person with a right recognized by law. The instant case falls under the first situation.

ISSUES a. Whether the Court of Appeals should have respected the findings of the Labor Arbiter, which was affirmed by the NLRC b. Whether the petition filed with the CA is fatally defective, because the attached verification and certificate against forum shopping was signed only by respondent Garcia

As the ground for termination of employment was illegal, the quitclaims are deemed illegal as the

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c. Whether the CA should not have given due course to the petition filed before it with respect to some of the respondents, considering that these respondents did not sign the verification attached to the Memorandum of Partial Appeal earlier filed with the NLRC d. Whether the CA erred and committed grave abuse of discretion when it ordered petitioners to reinstate respondents to their former positions, considering that the issue of reinstatement was never brought up before it and respondents never questioned the award of separation pay to them

Garcia as their attorney-in-fact in filing a petition for certiorari with the CA. c. No. With respect to the absence of some of the workers’ signatures in the verification, the verification requirement is deemed substantially complied with when some of the parties who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition had signed the same. Such verification is deemed a sufficient assurance that the matters alleged in the petition have been made in good faith or are true and correct, and not merely speculative. Moreover, respondents' Partial Appeal shows that the appeal stipulated as complainantsappellants "Rizal Beato, et al.", meaning that there were more than one appellant who were all workers of petitioners.

RULING a. No. The power of the CA to review NLRC decisions via a petition for certiorari under Rule 65 of the Rules of Court has been settled as early as this Court’s decision in St. Martin Funeral Homes v. NLRC. In said case, the Court held that the proper vehicle for such review is a special civil action for certiorari under Rule 65 of the said Rules, and that the case should be filed with the CA in strict observance of the doctrine of hierarchy of courts. Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, the CA — pursuant to the exercise of its original jurisdiction over petitions for certiorari — is specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues. Firstly, petitioners posit that the petition filed with the CA is fatally defective, because the attached verification and certificate against forum shopping was signed only by respondent Garcia. b. No. While the general rule is that the certificate of non-forum shopping must be signed by all the plaintiffs in a case and the signature of only one of them is insufficient, the Court has stressed that the rules on forum shopping, which were designed to promote and facilitate the orderly administration of justice, should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objective. Strict compliance with the provision regarding the certificate of non-forum shopping underscores its mandatory nature in that the certification cannot be altogether dispensed with or its requirements completely disregarded. It does not, however, prohibit substantial compliance therewith under justifiable circumstances, considering especially that although it is obligatory, it is not jurisdictional.

In any case, the settled rule is that a pleading which is required by the Rules of Court to be verified, may be given due course even without a verification if the circumstances warrant the suspension of the rules in the interest of justice. Indeed, the absence of a verification is not jurisdictional, but only a formal defect, which does not of itself justify a court in refusing to allow and act on a case. Hence, the failure of some of the respondents to sign the verification attached to their Memorandum of Appeal filed with the NLRC is not fatal to their cause of action. d. No. It is clear from the complaints filed by respondents that they are seeking reinstatement. In any case, Section 2 (c), Rule 7 of the Rules of Court provides that a pleading shall specify the relief sought, but may add a general prayer for such further or other reliefs as may be deemed just and equitable. Under this rule, a court can grant the relief warranted by the allegation and the proof even if it is not specifically sought by the injured party; the inclusion of a general prayer may justify the grant of a remedy different from or together with the specific remedy sought, if the facts alleged in the complaint and the evidence introduced so warrant. Moreover, in BPI Family Bank v. Buenaventura, this Court ruled that the general prayer is broad enough "to justify extension of a remedy different from or together with the specific remedy sought." Even without the prayer for a specific remedy, proper relief may be granted by the court if the facts alleged in the complaint and the evidence introduced so warrant. The court shall grant relief warranted by the allegations and the proof even if no such relief is prayed for. The prayer in the complaint for other reliefs equitable and just in the premises justifies the grant of a relief not otherwise specifically prayed for. In the instant case, aside from their specific prayer for reinstatement, respondents, in their separate complaints, prayed for such reliefs which are deemed just and equitable.

In a number of cases, the Court has consistently held that when all the petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping substantially complies with the rules. In the present case, there is no question that respondents share a common interest and invoke a common cause of action. Hence, the signature of respondent Garcia is a sufficient compliance with the rule governing certificates of non-forum shopping. In the first place, some of the respondents actually executed a Special Power of Attorney authorizing

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NOTE: I did not include issues on piercing the corporate veil and unfair labor practice as I am not sure whether they’re important to the subject of dispute settlement

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