Labor Stds Digests

Magallanes vs. Sun Yat Sen G.R. No. 160876 January 18, 2008 Facts: Azucena Magallanes, Evelyn Bacolod, Judith Cotecson (represented by her heirs), petitioners, Grace Gonzales, and Bella Gonzales were all employed as teachers in the Sun Yat Sen Elementary School in Surigao City. Paz Go and Elena Cubillan are principals of the said school. Willy Ang Gan Teng and Benito Ang are its directors, while Teotimo Tan is the school treasurer. They are all respondents herein. On May 22, 1994, respondents terminated the services of petitioners. Thus, on August 3, 1994, they filed with the Sub-Regional Arbitration Branch No. X, National Labor Relations Commission (NLRC), Butuan City, complaints against respondents for illegal dismissal, underpayment of wages, payment of backwages, 13th month pay, ECOLA, separation pay, moral damages, and attorney’s fees. Likewise, on August 22, 1994, petitioner Cotecson filed a separate complaint praying for the same reliefs. Issue: (1) whether the Court of Appeals (Seventh Division) erred in holding that affixing a wrong docket number on a motion renders it "non-existent;" and (2) whether the issuance by the NLRC of the Order dated March 30, 2001, amending the amounts of separation pay and backwages, awarded by the Court of Appeals (Sixteenth Division) to petitioners and computed by the Labor Arbiter, is tantamount to grave abuse of discretion amounting to lack or excess of jurisdiction. Held: WHEREFORE, we GRANT the petition. The challenged Resolutions dated October 29, 2001, May 8, 2003, and October 10, 2003 in CA-G.R. SP No. 67068 are REVERSED. The Order of the NLRC dated March 30, 2001 in NLRC Case No. M-006176-2001 is SET ASIDE. The Order of the Labor Arbiter dated January 8, 2001 is REINSTATED. Ratio Decidendi: 1. Court of Appeals (Seventh Division) is correct when it ruled that petitioners’ motion for reconsideration of its Resolution dated October 29, 2001 in CA-G.R. SP No. 67068 is "non-existent." Petitioners’ counsel placed a wrong case number in their motion. Where a pleading bears an erroneous docket number and thus "could not be attached to the correct case," the said pleading is, for all intents and purposes, "nonexistent." It has neither the duty nor the obligation to correct the error or to transfer the case to the Seventh Division. However, we opt for liberality in the application of the rules to the instant case in light of the following considerations. First, the rule that negligence of counsel binds the client may be relaxed where adherence thereto would result in outright deprivation of the client’s liberty or property or where the interests of justice so require. Second, this Court is not a slave of technical rules, shorn of judicial discretion – in rendering justice; it is guided by the norm that on the balance, technicalities take a backseat against substantive rights. Thus, if the application of the rules would tend to frustrate rather than

promote justice, it is always within this Court’s power to suspend the rules or except a particular case from its application. 2. We sustain petitioners’ contention that the NLRC, in modifying the award of the Court of Appeals, committed grave abuse of discretion amounting to lack or excess of jurisdiction. Quasi-judicial agencies have neither business nor power to modify or amend the final and executory Decisions of the appellate courts. Under the principle of immutability of judgments, any alteration or amendment which substantially affects a final and executory judgment is void for lack of jurisdiction.8 We thus rule that the Order dated March 30, 2001 of the NLRC directing that the monetary award should be computed from June 1994, the date petitioners were dismissed from the service, up to June 20, 1995 only, is void. Arco Metal Products vs. SAMARM-NAFLU G.R. No. 170734 May 14, 2008 Facts: Petitioner is a company engaged in the manufacture of metal products, whereas respondent is the labor union of petitioner’s rank and file employees. Sometime in December 2003, petitioner paid the 13th month pay, bonus, and leave encashment of three union members in amounts proportional to the service they actually rendered in a year, which is less than a full twelve (12) months. The employees were Rante Lamadrid, Alberto Gamban, and Rodelio Collantes. Respondent protested the prorated scheme, claiming that on several occasions petitioner did not prorate the payment of the same benefits to seven (7) employees who had not served for the full 12 months. The payments were made in 1992, 1993, 1994, 1996, 1999, 2003, and 2004. According to respondent, the prorated payment violates the rule against diminution of benefits under Article 100 of the Labor Code. Thus, they filed a complaint before the National Conciliation and Mediation Board (NCMB). The parties submitted the case for voluntary arbitration. The voluntary arbitrator, Apron M. Mangabat, ruled in favor of the petitioner. Issue/s: Whether or not the Court of Appeals erred when it ruled that the grant of 13th month pay, bonus, and leave encashment in full regardless of actual service rendered constitutes voluntary employer practice and, consequently, the prorated payment of the said benefits does not constitute diminution of benefits under Article 100 of the Labor Code. Whether the intent of the CBA provisions is to grant full benefits regardless of service actually rendered by an employee to the company. Held: IN VIEW HEREOF, the petition is DENIED. The Decision of the Court of Appeals in CA-G.R. SP No. 85089 dated 29 September 2005 is and its Resolution dated 9 December 2005 are hereby AFFIRMED. Ratio Decidendi: The Petition fails.

In cases involving money claims of employees, the employer has the burden of proving that the employees did receive the wages and benefits and that the same were paid in accordance with law. Indeed, if petitioner wants to prove that it merely erred in giving full benefits, it could have easily presented other proofs, such as the names of other employees who did not fully serve for one year and thus were given prorated benefits. Experientially, a perfect attendance in the workplace is always the goal but it is seldom achieved. There must have been other employees who had reported for work less than a full year and who, as a consequence received only prorated benefits. This could have easily bolstered petitioner’s theory of mistake/error, but sadly, no evidence to that effect was presented. PLDT v NLRC and Marilyn Abucay, G.R. No. L- 80609 http://www.lawphil.net/judjuris/juri1988/aug1988/gr_80609_1988.html

FACTS: Marilyn Abucay, a traffic operator of the Philippine Long Distance Telephone Company, was accused by two complainants of having demanded and received from them the total amount of P3,800.00 in consideration of her promise to facilitate approval of their applications for telephone installation. 1 Investigated and heard, she was found guilty as charged and accordingly separated from the service. 2 She went to the Ministry of Labor and Employment claiming she had been illegally removed. After consideration of the evidence and arguments of the parties, the company was sustained and the complaint was dismissed for lack of merit. Both the petitioner and the private respondent appealed to the National Labor Relations Board, which upheld the said decision in toto and dismissed the appeals. 4 The private respondent took no further action, thereby impliedly accepting the validity of her dismissal. The petitioner, however, is now before us to question the affirmance of the above- quoted award as having been made with grave abuse of discretion. The position of the petitioner is simply stated: It is conceded that an employee illegally dismissed is entitled to reinstatement and backwages as required by the labor laws. However, an employee dismissed for cause is entitled to neither reinstatement nor backwages and is not allowed any relief at all because his dismissal is in accordance with law. In the case of the private respondent, she has been awarded financial assistance equivalent to ten months pay corresponding to her 10 year service in the company despite her removal for cause. She is, therefore, in effect rewarded rather than punished for her dishonesty, and without any legal authorization or justification. The award is made on the ground of equity and compassion, which cannot be a substitute for law. Moreover, such award puts a premium on dishonesty and encourages instead of deterring corruption.

For its part, the public respondent claims that the employee is sufficiently punished with her dismissal. The grant of financial assistance is not intended as a reward for her offense but merely to help her for the loss of her employment after working faithfully with the company for ten years. ISSUE: The legality of the award of financial assistance to an employee who had been dismissed for cause as found by the public respondent. HELD: The Court notes, however, that where the exception has been applied, the decisions have not been consistent as to the justification for the grant of separation pay and the amount or rate of such award. Thus, the employees dismissed for theft in the Firestone case and for animosities with fellow workers in the Engineering Equipment case were both awarded separation pay not withstanding that the first cause was certainly more serious than the second. No less curiously, the employee in the Soco case was allowed only one-half month pay for every year of his 18 years of service, but in Filipro the award was two months separation pay for 2 years service. In Firestone, the employee was allowed full separation pay corresponding to his 11 years of service, but in Metro, the employee was granted only onehalf month separation pay for every year of her 15year service. It would seem then that length of service is not necessarily a criterion for the grant of separation pay and neither apparently is the reason for the dismissal. The Court feels that distinctions are in order. We note that heretofore the separation pay, when it was considered warranted, was required regardless of the nature or degree of the ground proved, be it mere inefficiency or something graver like immorality or dishonesty. The benediction of compassion was made to cover a multitude of sins, as it were, and to justify the helping hand to the validly dismissed employee whatever the reason for his dismissal. This policy should be re-examined. It is time we rationalized the exception, to make it fair to both labor and management, especially to labor. There should be no question that where it comes to such valid but not iniquitous causes as failure to comply with work standards, the grant of separation pay to the dismissed employee may be both just and compassionate, particularly if he has worked for some time with the company. For example, a subordinate who has irreconcilable policy or personal differences with his employer may be validly dismissed for demonstrated loss of confidence, which is an allowable ground. A working mother who has to be frequently absent because she has also to take care of her child may also be removed because of her poor attendance, this being another authorized ground. It is not the employee's fault if he does not have the necessary aptitude for his work but on the other hand the company cannot be required to maintain him just the same at the expense of the efficiency of its operations. He too may be validly replaced. Under these and similar circumstances, however, the award to the employee of

separation pay would be sustainable under the social justice policy even if the separation is for cause. But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified. 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. We hold that the grant of separation pay in the case at bar is unjustified. The private respondent has been dismissed for dishonesty, as found by the labor arbiter and affirmed by the NLRC and as she herself has impliedly admitted. The fact that she has worked with the PLDT for more than a decade, if it is to be considered at all, should be taken against her as it reflects a regrettable lack of loyalty that she should have strengthened instead of betraying during all of her 10 years of service with the company. If regarded as a justification for moderating the penalty of dismissal, it will actually become a prize for disloyalty, perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables. The Court also rules that the separation pay, if found due under the circumstances of each case, should be computed at the rate of one month salary for every year of service, assuming the length of such service is deemed material. This is without prejudice to the application of special agreements between the employer and the employee stipulating a higher rate of computation and providing for more benefits to the discharged employee. The petition is GRANTED. Toyota Motors Phils. Corp. workers Association v. NLRC, J. Velasco Jr.

http://sc.judiciary.gov.ph/jurisprudence/2007/october2007/158786_158789 .htm

FACTS:

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.[5] Toyota, on the other hand, is a domestic corporation engaged in the assembly and sale of vehicles and parts. 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), which was docketed as Case No. NCR-OD-M-9902-001. Med-Arbiter Ma. Zosima C. Lameyra denied the petition, but, on appeal, the DOLE Secretary granted the Union’s prayer, and, through the June 25, 1999 Order, directed the immediate holding of the certification election.[7] After Toyota’s plea for reconsideration was denied, the certification election was conducted. Med-Arbiter Lameyra’s May 12, 2000 Order certified the Union as the sole and exclusive bargaining agent of all the Toyota rank and file employees. Toyota challenged said Order via an appeal to the DOLE Secretary. 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. 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) in relation to the exclusion of the votes of alleged supervisory employees from the votes cast during the certification election. The February 21, 2001 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.[9] The Union, in a letter of the same date, also requested that its members be allowed to be absent on February 22, 2001 to attend the hearing and instead work on their next scheduled rest day. This request however was denied by Toyota. Despite denial of the Union’s request, more than 200 employees staged mass actions on February 22 and 23, 2001 in front of the BLR and the DOLE offices, to protest the partisan and anti-union stance of Toyota. Due to the deliberate absence of a considerable number of employees

on February 22 to 23, 2001, Toyotaexperienced 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. 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. On the next day, the Union filed with the NCMB another notice of strike docketed as NCMB-NCR-NS-02-061-01 for union busting amounting to unfair labor practice. 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. March 2 and 5, 2001, Toyota issued two (2) memoranda to the concerned employees to clarify whether or not they are adopting the March 1, 2001 Union’s explanation as their own. The employees were also required to attend an investigative interview,[14] but they refused to do so. On March 16, 2001, Toyota terminated the employment of 227 employees[15] for participation in concerted actions in violation of its Code of Conduct and for misconduct under Article 282 of the Labor Code. 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.

it 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 parties were also enjoined from committing acts that may worsen the situation. 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. 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. 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 bearing placards and streamers in defiance of the April 10, 2001 Order. May 28, 2001, around forty-four (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. June 5, 2001, notwithstanding the Union filed another notice of strike.

the

certification

Order,

Notwithstanding repeated orders to file its position paper, the Union still failed to submit its position paper on July 19, 2001. Consequently, the NLRC issued an Order directing the Union to submit its position paper on the scheduled August 3, 2001 hearing; otherwise, the case shall be deemed submitted for resolution based on the evidence on record. 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. 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.

Toyota filed a petition to declare the strike illegal with the NLRC arbitration branch, which was docketed as NLRC NCR (South) Case No. 3004-01775-01, and prayed that the erring Union officers, directors, and members be dismissed.

The NLRC considered the mass actions staged on February 21 to 23, 2001 illegal as the Union failed to comply with the procedural requirements of a valid strike under Art. 263 of the Labor Code.

On April 10, 2001, the DOLE Secretary assumed jurisdiction over the labor dispute and issued an Order [20] certifying 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. On the other hand,

After the DOLE Secretary assumed jurisdiction over the Toyota dispute on April 10, 2001, the Union again staged strikes on May 23 and 28, 2001. The NLRC found the strikes illegal as they violated Art. 264 of the Labor Code which proscribes any strike or lockout after

jurisdiction is assumed over the dispute by the President or the DOLE Secretary.

the Union ignored until the last minute. No sufficient justification was offered why the Union belatedly filed its position paper.

The NLRC held that both parties must have maintained the status quo after the DOLE Secretary issued the assumption/certification Order, and ruled that theUnion did not respect the DOLE Secretary’s directive.

The proper ruling in this situation is to consider the petition as compliant with the formal requirements with respect to the parties who signed it and, therefore, can be given due course only with regard to them. The other petitioners who did not sign the verification and certificate against forum shopping cannot be recognized as petitioners have no legal standing before the Court. The petition should be dismissed outright with respect to the non-conforming petitioners.

Accordingly, both Toyota and the Union filed Motions for Reconsideration, which the NLRC denied in its September 14, 2001 Resolution.[23] Consequently, both parties questioned the August 9, 2001 Decision[24] and September 14, 2001 Resolution of the NLRC in separate petitions for certiorari filed with the CA. CA considered the participation in illegal strikes as serious misconduct. It defined serious misconduct as a transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. However, in its June 20, 2003 Resolution,[28] the CA modified its February 27, 2003 Decision by reinstating severance compensation to the dismissed employees based on social justice.

The alleged protest rallies in front of the offices of BLR and DOLE Secretary and at the Toyota plants constituted illegal strikes

When is a strike illegal?

Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz:

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

(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

HELD:

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.

(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

We rule otherwise.

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

(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 existing agreement, such as a conclusive arbitration clause.[33]

contrary no-strike

to an clause or

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. 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. Applying pertinent legal provisions and jurisprudence, we rule that the protest actions undertaken by the Union officials and members on February 21 to 23, 2001are 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. TheUnion’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. The acts of the med-arbiter in the performance of his duties are presumed regular. Sans ample evidence to the contrary, the Union was unable to justify the February 2001 mass actions. What comes to the fore is that the decision not to work for two days was designed and calculated to cripple the manufacturing arm of Toyota. It becomes obvious that the real and ultimate goal of the Union is to coerce Toyota to finally acknowledge the Union as the sole bargaining agent of the company. This is not a legal and valid exercise of the right of assembly and to demand redress of grievance.

We sustain the CA’s affirmance of the NLRC’s finding that the protest rallies staged on February 21 to 23, 2001 were actually illegal strikes. 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. We uphold the findings of fact of the NLRC on the involvement of said union officials in the unlawful concerted actions as affirmed by the CA.

Member’s liability depends on participation in illegal acts 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. There can be no good faith in intentionally incurring absences in a collective fashion from work on February 22 and 23, 2001 just to attend the DOLE hearings. The Union’s strategy was plainly to cripple the operations and bring Toyota to its knees by inflicting substantial financial damage to the latter to compel union recognition. The Union officials and members are supposed to know through common sense that huge losses would befall the company by the abandonment of their regular work. It was not disputed thatToyota lost more than PhP 50 million because of the willful desertion of company operations in February 2001 by the dismissed union members. In addition, further damage was experienced by Toyota when the Union again resorted to illegal strikes from March 28 to April 12, 2001, when the gates of Toyota were blocked and barricaded, and the company officials, employees, and customers were intimidated and harassed. Moreover, they were fully aware of the company rule on prohibition against concerted action inimical to the interests of the company and hence, their resort to mass actions on several occasions in clear violation of the company regulation cannot be excused nor justified. Lastly, they blatantly violated the assumption/certification Order of the DOLE Secretary, exhibiting their lack of obeisance to the rule of law. These acts indeed constituted serious misconduct.

A painstaking review of case law renders obtuse the Union’s claim for separation pay. In a slew of cases, this Court refrained from awarding separation pay or financial assistance to union officers and members who were separated from service due to their participation in or commission of illegal acts during strikes. The petitions in G.R. Nos. 158786 and 158789 are DENIED while those in G.R. Nos. 158798-99 are GRANTED. The June 20, 2003 CA Resolution in CA-G.R. SP Nos. 67100 and 67561 restoring the grant of severance compensation is ANNULLED and SET ASIDE. The February 27, 2003 CA Decision in CA-G.R. SP Nos. 67100 and 67561, which affirmed the August 9, 2001 Decision of the NLRC but deleted the grant of severance compensation, is REINSTATED and AFFIRMED.No costs.

Reno Foods Inc v. Nagkakakisang Lakas ng Manggagawa (NLM), J. del Castillo

FACTS: Petitioner Reno Foods, Inc. (Reno Foods) is a manufacturer of canned meat products of which Vicente Khu is the president and is being sued in that capacity. Respondent Nenita Capor (Capor) was an employee of Reno Foods until her dismissal on October 27, 1998.

It is a standard operating procedure of petitioner-company to subject all its employees to reasonable search of their belongings upon leaving the company premises. On October 19, 1998, the guard on duty found six Reno canned goods wrapped in nylon leggings inside Capor’s fabric clutch bag. The only other contents of the bag were money bills and a small plastic medicine container.

Petitioners accorded Capor several opportunities to explain her side, often with the assistance of the union officers of Nagkakaisang Lakas ng Manggagawa(NLM) – Katipunan. In fact, after petitioners sent a Notice of Termination to Capor, she was given yet another opportunity for reconsideration through a labor-management

grievance conference held on November 17, 1999. Unfortunately, petitioners did not find reason to change its earlier decision to terminate Capor’semployment with the company.

On December 8, 1998, petitioners filed a complaint-affidavit against Capor for qualified theft in the Office of the City Prosecutor, Malabon-NavotasSubstation. On April 5, 1999, a Resolution was issued finding probable cause for the crime charged. Consequently, an Information was filed against Capordocketed as Criminal Case No. 207-58-MN.

Meanwhile, the Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan filed on behalf of Capor a complaint[4] for illegal dismissal and money claims against petitioners with the Head Arbitration Office of the National Labor Relations Commission (NLRC) for the National Capital Region. The complaint prayed thatCapor be paid her full backwages as well as moral and exemplary damages. The complaint was docketed as NLRC NCR Case No. 00-0100183-99.

The Labor Arbiter ruled that consistent with prevailing jurisprudence, an employee who commits theft of company property may be validly terminated and consequently, the said employee is not entitled to separation pay. The NLRC affirmed the factual findings and monetary awards of the Labor Arbiter but added an award of financial assistance.

The appellate court affirmed the NLRC’s award of financial assistance to Capor. It stressed that the laborer’s welfare should be the primordial and paramount consideration when carrying out and interpreting provisions of the Labor Code. It explained that the mandate laid down in Philippine Long Distance Telephone Company v. National Labor Relations Commission was not absolute, but merely directory.

ISSUE: The issue before us is whether the NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting financial assistance to an employee who was validly dismissed for theft of company property.

HELD: Conviction in a criminal case is not necessary to find just cause for termination of employment - Criminal cases require proof beyond reasonable doubt while labor disputes require only substantial evidence, which means such releva nt evidence as a reasonable mind might accept as adequate to justify a conclusion.[20] The evidence in this case was reviewed by the appellate court and two labor tribunals endowed with expertise on the matter – the Labor Arbiter and the NLRC. They all found substantial evidence to conclude that Capor had been validly dismissed for dishonesty or serious misconduct. It is settled that factual findings of quasi-judicial agencies are generally accorded respect and finality so long as these are supported by substantial evidence. In the instant case, we find no compelling reason to doubt the common findings of the three reviewing bodies.

The award of separation pay is not warranted under the law and jurisprudence.- We find no justification for the award of separation pay to Capor. This award is a deviation from established law and jurisprudence.

The law is clear. Separation pay is only warranted when the cause for termination is not attributable to the employee’s fault, such as those provided in Articles 283 and 284 of the Labor Code, as well as in cases of illegal dismissal in which reinstatement is no longer feasible. It is not allowed when an employee is dismissed for just cause, such as serious misconduct.

Jurisprudence has classified theft of company property as a serious misconduct and denied the award of separation pay to the erring employee. We see no reason why the same should not be similarly applied in the case of Capor. She attempted to steal the property of her long-time employer. For committing such misconduct, she is definitely not entitled to an award of separation pay.

It is true that there have been instances when the Court awarded financial assistance to employees who were terminated for just causes, on grounds of equity and social justice. The same, however, has been curbed and rationalized in Philippine Long Distance Telephone Company v. National Labor Relations Commission. In that case, we recognized the harsh realities faced by employees that forced them, despite their good intentions, to violate company policies, for which the employer can rightfully terminate their employment. For these instances, the award of financial assistance was allowed. But, in clear and unmistakable language, we also held that the award of financial assistance shall not be given to validly terminated employees, whose offenses are iniquitous or reflective of some depravity in their moral character. When the employee commits an act of dishonesty, depravity, or iniquity, the grant of financial assistance is misplaced compassion. It is tantamount not only to condoning a patently illegal or dishonest act, but an endorsement thereof. It will be an insult to all the laborers who, despite their economic difficulties, strive to maintain good values and moral conduct.

While we sympathize with Capor’s plight, being of retirement age and having served petitioners for 39 years, we cannot award any financial assistance in her favor because it is not only against the law but also a retrogressive public policy.

Petition is granted. SAN MIGUEL CORPORATION v. NLRC, 551 SCRA 410 Facts: Ernesto M. Ibias (respondent) was employed by petitioner SMC on 24 December 1978 initially as a CRO operator in its Metal Closure and Lithography Plant. According to SMC’s Policy on Employee Conduct, [4] absences without permission or AWOPs, which are absences not covered either by a certification of the plant doctor that the employee was absent due to sickness or by a duly approved application for leave of absence filed at least six (6) days prior to the intended leave, are subject to disciplinary action. The same Policy on Employee Conduct also punishes falsification of company records or documents with discharge or termination for the first

offense if the offender himself or somebody else benefits from falsification or would have benefited if falsification is not found on time.[6] It appears that per company records, respondent was AWOP on a number of dates. 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. Respondent was required to explain his AWOPs. Respondent did not comply with these notices. He was again issued two Notices to Explain[10] both dated 3 June 1997, one for his AWOPs from 26 May to 2 June 1997 and another for falsification of medical consultation card entries for 28 April and 8 May 1997. On 5 June 1997, respondent submitted a handwritten explanation to the charges denying the falsification charge. Not satisfied with the explanation, SMC conducted an administrative investigation on 17 and 23 June 1997. After the completion of the investigation, SMC concluded that respondent committed the offenses of excessive AWOPs and falsification of company records or documents because of the testimony of the staff assistant and the plant doctor. SMC accordingly dismissed him. On 30 March 1998, respondent filed a complaint for illegal dismissal against SMC. The LA rendered his Decision, for the respondent. The labor arbiter believed that respondent had committed the absences pointed out by SMC but found the imposition of termination of employment based on his AWOPs to be disproportionate since SMC failed to show by clear and convincing evidence that it had strictly implemented its company policy on absences. It also noted that termination based on the alleged falsification of company records was unwarranted in view of SMC’s failure to establish respondent’s guilt.

The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer’s dismissal of an employee and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Thus, substantial evidence is the least demanding in the hierarchy of evidence.[24] The Court agrees with the tribunals below that SMC was unable to prove the falsification charge against respondent. Respondent cannot be legally dismissed on the basis of the uncorroborated and self-serving testimonies of SMC’s employees. SMC merely relied on the testimonies of Marabe and Siwa, who both stated that respondent admitted to them that he falsified his medical consultation card to cover up his excessive AWOPs. For his part, respondent denied having had any knowledge of said falsification, both in his testimony during the company-level investigation and in his handwritten explanation. He did not even claim that he had requested for, nor had been granted any sick leave for the days that the falsified entries were made. Siwa, being responsible for the medical cards, should take the blame for the loss and alleged tampering thereof, and not respondent who had no control over the same. The issue matter.

of

the

unauthorized

absences,

however,

is

another

However, while respondent has admitted these absences, before the Court, he also seeks to belittle the plain by countering that SMC has not been too rigid in its application of company rules pertaining to leave availments. In the proceedings below he claimed that during the days that he was absent, he had attended to some family matters. Respondent cannot feign surprise nor ignorance of the earlier AWOPs he had incurred. He was even given a warning.

The NLRC affirmed the decision of the LA.

Thus, even if he was not punished for his subsequent AWOPs, the same remained on record. He was aware of the number of AWOPs he incurred and should have known that these were punishable under company rules. The fact that he was spared from suspension cannot be used as a reason to incur further AWOPs and be absolved from the penalty therefor.

On 28 June 2000, the Court of Appeals rendered its Decision affirming the findings of the LA and NLRC.

Respondent’s dismissal was well within the purview of SMC’s management prerogative.

Issue: W/N the respondent was illegally dismissed? NO

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

Held: Petition partly granted.

is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and doctrine.[38] What the lower tribunals perceived as laxity, we consider as leniency. It is axiomatic that appropriate disciplinary sanction is within the purview of management imposition.[37] 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. Television and Production Exponents(TAPE) Inc. v. Servana, J. Tinga

FACTS:

TAPE is a domestic corporation engaged in the production of television programs, such as the long-running variety program, Eat Bulaga!. Its president is Antonio P. Tuviera (Tuviera). Respondent Roberto C. Servana had served as a security guard for TAPE from March 1987 until he was terminated on 3 March 2000. Respondent filed a complaint for illegal dismissal and nonpayment of benefits against TAPE. He alleged that he was first connected with AgroCommercial Security Agency but was later on absorbed by TAPE as a regular company guard. He was detailed at Broadway Centrum in Quezon City where Eat Bulaga! regularly staged its productions. On 2 March 2000, respondent received a memorandum informing him of his impending dismissal on account of TAPE’s decision to contract the services of a professional security agency. At the time of his termination, respondent was receiving a monthly salary of P6,000.00. He claimed that the holiday pay, unpaid vacation and sick leave benefits and other monetary considerations were withheld from him. He further contended that his dismissal was undertaken without due process and violative of existing labor laws, aggravated by nonpayment of separation pay.

TAPE countered that the labor arbiter had no jurisdiction over the case in the absence of an employer-employee relationship between the parties.

TAPE made the following assertions: (1) that respondent was initially employed as a security guard for Radio Philippines Network (RPN-9); (2) that he was tasked to assist TAPE during its live productions, specifically, to control the crowd; (3) that when RPN-9 severed its relationship with the security agency, TAPE engaged respondent’s services, as part of the support group and thus a talent, to provide security service to production staff, stars and guests of Eat Bulaga! as well as to control the audience during the one-and-a-half hour noontime program; (4) that it was agreed that complainant would render his services until such time that respondent company shall have engaged the services of a professional security agency; (5) that in 1995, when his contract with RPN-9 expired, respondent was retained as a talent and a member of the support group, until such time that TAPE shall have engaged the services of a professional security agency; (6) that respondent was not prevented from seeking other employment, whether or not related to security services, before or after attending to his Eat Bulaga! functions; (7) that sometime in late 1999, TAPE started negotiations for the engagement of a professional security agency, the Sun Shield Security Agency; and (8) that on 2 March 2000, TAPE issued memoranda to all talents, whose functions would be rendered redundant by the engagement of the security agency, informing them of the management’s decision to terminate their services. 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.

Labor Arbiter Daisy G. Cauton-Barcelona declared respondent to be a regular employee of TAPE.

the National Labor Relations Commission (NLRC) in a Decision dated 22 April 2002 reversed the Labor Arbiter and considered respondent a mere program employee, thus: We have scoured the records of this case and we find nothing to support the Labor Arbiter’s conclusion that complainant was a regular employee.

xxxx The primary standard to determine regularity of employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer.

to report for work anytime even not during the noontime program of Eat Bulaga! from 11:30 a.m. to 1:00 p.m. and still gets his compensation for being a talent. Precisely, he is being paid for being the security of Eat Bulaga! during the above-mentioned period. The daily time cards of petitioner are not just for mere record purposes as claimed by private respondents. It is a form of control by the management of private respondent TAPE.

Reversing the decision of the NLRC, the Court of Appeals found respondent to be a regular employee. Policy Instruction No. 40 defines program employees as ISSUE: WON there was an employer-employee relationship between the petitioner and respondent.

HELD: In concluding that respondent was an employee of TAPE, the Court of Appeals applied the four-fold test in this wise: First. The selection and hiring of petitioner was done by private respondents. In fact, private respondents themselves admitted having engaged the services of petitioner only in 1995 after TAPE severed its relations with RPN Channel 9. By informing petitioner through the Memorandum dated 2 March 2000, that his services will be terminated as soon as the services of the newly hired security agency begins, private respondents in effect acknowledged petitioner to be their employee. For the right to hire and fire is another important element of the employer-employee relationship. Second. Payment of wages is one of the four factors to be considered in determining the existence of employer-employee relation. . . Payment as admitted by private respondents was given by them on a monthly basis at a rate of P5,444.44. Third. Of the four elements of the employer-employee relationship, the control test is the most important. x x x The bundy cards representing the time petitioner had reported for work are evident proofs of private respondents control over petitioner more particularly with the time he is required to report for work during the noontime program of Eat Bulaga! If it were not so, petitioner would be free

x x x those whose skills, talents or services are engaged by the station for a particular or specific program or undertaking and who are not required to observe normal working hours such that on some days they work for less than eight (8) hours and on other days beyond the normal work hours observed by station employees and are allowed to enter into employment contracts with other persons, stations, advertising agencies or sponsoring companies. The engagement of program employees, including those hired by advertising or sponsoring companies, shall be under a written contract specifying, among other things, the nature of the work to be performed, rates of pay and the programs in which they will work. The contract shall be duly registered by the station with the Broadcast Media Council within three (3) days from its consummation. TAPE failed to adduce any evidence to prove that it complied with the requirements laid down in the policy instruction. It did not even present its contract with respondent. Neither did it comply with the contractregistration requirement.

In sum, we find no reversible error committed by the Court of Appeals in its assailed decision. However, with respect to the liability of petitioner Tuviera, president of TAPE, absent any showing that he acted with malice or bad faith in terminating respondent, he cannot be held solidarily liable with TAPE. Thus, the Court of Appeals ruling on this point has to be modified. WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with MODIFICATION in that only petitioner Television and Production Exponents, Inc. is liable to pay respondent the amount of P10,000.00 as nominal damages for non-compliance with the statutory due process and petitioner Antonio P. Tuviera is accordingly absolved from

liability.

dismissed the appeal on the ground that petitioner did not post a cash or surety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there is no employer-employee relationship had ever existed between it and respondent because it was the drama directors and producers who paid, supervised and disciplined respondent. It also added that the case was beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter because respondent’s claim exceeded P5,000.00.

People’s Broadcasting v. Sec. of DOLE G.R. no. 179652. May 8, 2009

Issue: Does the Secretary of Labor have the power to determine the existence of an employer-employee relationship?

Facts: Jandeleon Juezan (respondent) filed a complaint against People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment 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 before the Department of Labor and Employment (DOLE) Regional Office No. VII,Cebu City.

On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September 2003. In the Inspection Report Form, the Labor Inspector wrote under the heading “Findings/Recommendations” “nondiminution of benefits” and “Note: Respondent deny employer-employee relationship with the complainant- see Notice of Inspection results.” Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectification was effected by petitioner; thus, summary investigations were conducted, with the parties eventually ordered to submit their respective position papers.

In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (Regional Director) ruled that respondent is an employee of petitioner, and that the former is entitled to his money claims amounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gave credence to the documents offered by respondent without examining the originals, but at the same time he missed or failed to consider petitioner’s evidence. Petitioner’s motion for reconsideration was denied.[ On appeal to the DOLE Secretary, petitioner denied once more the existence of employer-employee relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary

Held: No. Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the second situation especially, the existence of an employer-employee relationship is a matter which is not easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are not verifiable from a mere ocular examination. The intricacies and implications of an employer-employee relationship demand that the level of scrutiny should be far above the cursory and the mechanical. While documents, particularly documents found in the e mployer’s office are the primary source materials, what may prove decisive are factors related to the history of the employer’s business operations, its current state as well as accepted contemporary practices in the industry. More often than not, the question of employeremployee relationship becomes a battle of evidence, the determination of which should be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC.

It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. Such prerogatival determination, however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such determination is merely preliminary, incidental and collateral to the DOLE’s primary function of enforcing labor standards provisions. The determination of the existence of employer-employee relationship is still primarily lodged with the

NLRC. This is the meaning of the clause “in cases where the relationship of employer-employee still exists” in Art. 128 (b).

at the same time, petitioner could ill-afford to disclaim an employment relationship with all of the people under its aegis.

Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved: (1) Does the employeremployee relationship still exist, or alternatively, was there ever an employer-employee relationship to speak of; and (2) Are there violations of the Labor Code or of any labor law?

The most important consideration for the allowance of the instant petition is the opportunity for the Court not only to set the demarcation between the NLRC’s jurisdiction and the DOLE’s prerogative but also the procedure when the case involves the fundamental challenge on the DOLE’s prerogative based on lack of employer-employee relationship. As exhaustively discussed here, the DOLE’s prerogative hinges on the existence of employeremployee relationship, the issue is which is at the very heart of this case. And the evidence clearly indicates private respondent has never been petitioner’s employee. But the DOLE did not address, while the Court of Appeals glossed over, the issue. The peremptory dismissal of the instant petition on a technicality would deprive the Court of the opportunity to resolve the novel controversy.

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, on a matter fraught with questions of fact and law, which is best resolved by the quasi-judicial body, which is the NRLC, rather than an administrative official of the executive branch of the government. If the Secretary of Labor proceeds to exercise his visitorial and enforcement powers absent the first requisite, as the dissent proposes, his office confers jurisdiction on itself which it cannot otherwise acquire.

WHEREFORE, the petition is GRANTED.

Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008 Reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his authorized representatives was granted visitorial and enforcement powers for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and regulations issued pursuant thereto. Necessarily, the actual existence of an employer-employee relationship affects the complexion of the putative findings that the Secretary of Labor may determine, since employees are entitled to a different set of rights under the Labor Code from the employer as opposed to non-employees. Among these differentiated rights are those accorded by the “labor standards” provisions of the Labor Code, which the Secretary of Labor is mandated to enforce. If there is no employer-employee relationship in the first place, the duty of the employer to adhere to those labor standards with respect to the non-employees is questionable.

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. The Secretary of Labor would not have been precluded from exercising the powers under Article 128 (b) over petitioner if another person with better-grounded claim of employment than that which respondent had. Respondent, especially if he were an employee, could have very well enjoined other employees to complain with the DOLE, and,

G.R. No. 167622, November 07, 2008 Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business. Renato A. Vergel De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the Agreement, it is provided that: 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. 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. 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. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income, and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko’s Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of agents." And "Sales Managers are doing what the company asks them to do but, in the process, they earn less." Tongko was then terminated.

Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship.

The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. Hence, Tongko filed this petition.

1.

Yes In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents. Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established. Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals. More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife.

1.

WON Tongko was an employee of Manulife

Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of Manulife.

2.

WON Tongko was illegally dismissed.

2. Yes

Issue:

Held:

In its Petition for Certiorari dated January 7, 2005[26] filed before the CA,

Manulife argued that even if Tongko is considered as its employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. Manulife stated:

Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's employment was terminated much less support the same with substantial evidence. To repeat, mere conjectures cannot work to deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed.

In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to speak of.

Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal.

It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the same to disobedience and neglect of duty.

ANGELINA FRANCISCO vs. NLRC, KASEI CORPORATION, et al. G.R. No. 170087 August 31, 2006

Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden would necessarily mean that the dismissal was not justified, and, therefore, illegal.

The Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise.

FRANCISCO vs. NLRC

FACTS: In 1995, petitioner Angelina Francisco was hired by Kasei Corporation (Kasei) during its incorporation stage. She was designated as Accountant, Corporate Secretary and Liaison Officer of the company. In 1996, Francisco was designated Acting Manager to handle recruitment of all employees and perform management administration functions, represent the company in all dealings with government agencies, and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei. For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation. In January 2001, Francisco was replaced as Manager. She alleged that she was required to sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei. The Treasurer convened a meeting of all employees and announced that Francisco was still connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. Thereafter, Kasei reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of P22,500.00 as of September 2001. She was not paid her mid-year bonus allegedly because the company was not earning well. In October 2001, she did not receive her salary from the company, made repeated follow-ups with the cashier

but was advised that the company was not earning well. On October 15, 2001, she asked for her salary, but she was informed that she is no longer connected with the company. Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter. Kasei Corporation claimed that Francisco was not their employee, having been designated as technical consultant who performed work at her own discretion without the control and supervision of the Corporation, and that her consultancy may be terminated any time considering that her services were only temporary in nature and dependent on the needs of the corporation. To prove that petitioner was not an employee of the corporation, private respondents submitted a list of employees for the years 1999 and 2000 duly received by the BIR showing that petitioner was not among the employees reported to the BIR, as well as a list of payees subject to expanded withholding tax which included petitioner. SSS records were also submitted showing that petitioner’s latest employer was Seiji Corporation. ISSUES: Whether or not there was an employer-employee relationship between Francisco and Kasei Corporation; and whether Francisco was illegally dismissed. HELD: Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. However, 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. There are instances when, aside from the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s 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. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment. 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 employer’s business; (2) the extent of the worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s 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. 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 corporation’s Technical Consultant. She reported for work regularly and served in various capacities as Accountant, 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. 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 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. When petitioner was designated General Manager, respondent corporation made a report to the SSS signed by Irene Ballesteros. Petitioner’s membership in the SSS as manifested by a copy of the SSS specimen signature card which was signed by the President of Kasei Corporation and the inclusion of her name in the on-line inquiry system of the SSS evinces the existence of an employer-employee relationship between petitioner and respondent corporation. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latter’s line of business. The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from January to September 2001. This amounts to an illegal termination of employment, where the petitioner is entitled to full backwages. Since the position of petitioner as accountant is one of

trust and confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of reinstatement. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development. People’s Broadcasting v. Sec. of DOLE | G.R. no. 179652. May 8, 2009 Facts: Jandeleon Juezan (respondent) filed a complaint against People’s Broadcasting Service, Inc. (Bombo Radyo Phils., Inc) (petitioner) for illegal deduction, non-payment 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 before the Department of Labor and Employment (DOLE) Regional Office No. VII,Cebu City. On the basis of the complaint, the DOLE conducted a plant level inspection on 23 September 2003. In the Inspection Report Form, the Labor Inspector wrote under the heading “Findings/Recommendations” “nondiminution of benefits” and “Note: Respondent deny employer-employee relationship with the complainant- see Notice of Inspection results.” Petitioner was required to rectify/restitute the violations within five (5) days from receipt. No rectification was effected by petitioner; thus, summary investigations were conducted, with the parties eventually ordered to submit their respective position papers. In his Order dated 27 February 2004, DOLE Regional Director Atty. Rodolfo M. Sabulao (Regional Director) ruled that respondent is an employee of petitioner, and that the former is entitled to his money claims amounting to P203, 726.30. Petitioner sought reconsideration of the Order, claiming that the Regional Director gave credence to the documents offered by respondent without examining the originals, but at the same time he missed or failed to consider petitioner’s evidence. Petitioner’s motion for reconsideration was denied.[ On appeal to the DOLE Secretary, petitioner denied once more the existence of employer-employee

relationship. In its Order dated 27 January 2005, the Acting DOLE Secretary dismissed the appeal on the ground that petitioner did not post a cash or surety bond and instead submitted a Deed of Assignment of Bank Deposit. Petitioner maintained that there is no employer-employee relationship had ever existed between it and respondent because it was the drama directors and producers who paid, supervised and disciplined respondent. It also added that the case was beyond the jurisdiction of the DOLE and should have been considered by the labor arbiter because respondent’s claim exceeded P5,000.00. Issue: Does the Secretary of Labor have the power to determine the existence of an employer-employee relationship? Held: No. Clearly the law accords a prerogative to the NLRC over the claim when the employer-employee relationship has terminated or such relationship has not arisen at all. The reason is obvious. In the second situation especially, the existence of an employer-employee relationship is a matter which is not easily determinable from an ordinary inspection, necessarily so, because the elements of such a relationship are not verifiable from a mere ocular examination. The intricacies and implications of an employer-employee relationship demand that the level of scrutiny should be far above the cursory and the mechanical. While documents, particularly documents found in the e mployer’s office are the primary source materials, what may prove decisive are factors related to the history of the employer’s business operations, its current state as well as accepted contemporary practices in the industry. More often than not, the question of employeremployee relationship becomes a battle of evidence, the determination of which should be comprehensive and intensive and therefore best left to the specialized quasi-judicial body that is the NLRC. It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. Such prerogatival determination, however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such determination is merely preliminary, incidental and collateral to the DOLE’s primary function of enforcing labor standards provisions. The determination of the existence of employer-employee relationship is still primarily lodged with the NLRC. This is the meaning of the clause “in cases where the relationship of employer-employee still exists” in Art. 128 (b). Thus, before the DOLE may exercise its powers under Article 128, two important questions must be resolved: (1) Does the employeremployee relationship still exist, or alternatively, was there ever an employer-employee relationship to speak of; and (2) Are there violations of the Labor Code or of any labor law?

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, on a matter fraught with questions of fact and law, which is best resolved by the quasi-judicial body, which is the NRLC, rather than an administrative official of the executive branch of the government. If the Secretary of Labor proceeds to exercise his visitorial and enforcement powers absent the first requisite, as the dissent proposes, his office confers jurisdiction on itself which it cannot otherwise acquire. Reading of Art. 128 of the Labor Code reveals that the Secretary of Labor or his authorized representatives was granted visitorial and enforcement powers for the purpose of determining violations of, and enforcing, the Labor Code and any labor law, wage order, or rules and regulations issued pursuant thereto. Necessarily, the actual existence of an employer-employee relationship affects the complexion of the putative findings that the Secretary of Labor may determine, since employees are entitled to a different set of rights under the Labor Code from the employer as opposed to non-employees. Among these differentiated rights are those accorded by the “labor standards” provisions of the Labor Code, which the Secretary of Labor is mandated to enforce. If there is no employer-employee relationship in the first place, the duty of the employer to adhere to those labor standards with respect to the non-employees is questionable. 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. The Secretary of Labor would not have been precluded from exercising the powers under Article 128 (b) over petitioner if another person with better-grounded claim of employment than that which respondent had. Respondent, especially if he were an employee, could have very well enjoined other employees to complain with the DOLE, and, at the same time, petitioner could ill-afford to disclaim an employment relationship with all of the people under its aegis. The most important consideration for the allowance of the instant petition is the opportunity for the Court not only to set the demarcation between the NLRC’s jurisdiction and the DOLE’s prerogative but also the procedure when the case involves the fundamental challenge on the DOLE’s prerogative based on lack of employer-employee relationship. As exhaustively discussed here, the DOLE’s prerogative hinges on the existence of employeremployee relationship, the issue is which is at the very heart of this case. And the evidence clearly indicates private respondent has never been petitioner’s employee. But the DOLE did not address, while the Court of Appeals glossed over, the issue. The peremptory dismissal of the instant petition on a technicality

would deprive the Court of the opportunity to resolve the novel controversy. WHEREFORE, the petition is GRANTED. Tongko vs. The Manufacturer’s Life Insurance Co., Inc. November 7, 2008 | G.R. No. 167622, November 07, 2008 Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life insurance business. Renato A. Vergel De Dios was, during the period material, its President and Chief Executive Officer. Gregorio V. Tongko started his professional relationship with Manulife on July 1, 1977 by virtue of a Career Agent's Agreement (Agreement) he executed with Manulife. In the Agreement, it is provided that: 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. 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. 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. In 1983, Tongko was named as a Unit Manager in Manulife's Sales Agency Organization. In 1990, he became a Branch Manager. As the CA found, Tongko's gross earnings from his work at Manulife, consisting of commissions, persistency income, and management overrides. The problem started sometime in 2001, when Manulife instituted manpower development programs in the regional sales management level. Relative thereto, De Dios addressed a letter dated November 6, 2001 to Tongko regarding an October 18, 2001 Metro North Sales Managers Meeting. Stating that Tongko’s Region was the lowest performer (on a per Manager basis) in terms of recruiting in 2000 and, as of today, continues to remain one of the laggards in this area. Other issues were:"Some Managers are unhappy with their earnings and would want to revert to the position of

agents." And "Sales Managers are doing what the company asks them to do but, in the process, they earn less." Tongko was then terminated. Therefrom, Tongko filed a Complaint dated November 25, 2002 with the NLRC against Manulife for illegal dismissalIn the Complaint. In a Decision dated April 15, 2004, Labor Arbiter dismissed the complaint for lack of an employer-employee relationship. The NLRC's First Division, while finding an employer-employee relationship between Manulife and Tongko applying the four-fold test, held Manulife liable for illegal dismissal. Thus, Manulife filed an appeal with the CA. Thereafter, the CA issued the assailed Decision dated March 29, 2005, finding the absence of an employer-employee relationship between the parties and deeming the NLRC with no jurisdiction over the case. Hence, Tongko filed this petition.

1. 2. 1.

Issue: WON Tongko was an employee of Manulife WON Tongko was illegally dismissed. Held: Yes In the instant case, Manulife had the power of control over Tongko that would make him its employee. Several factors contribute to this conclusion. In the Agreement dated July 1, 1977 executed between Tongko and Manulife, it is provided that: The Agent hereby agrees to comply with all regulations and requirements of the Company as herein provided as well as maintain a standard of knowledge and competency in the sale of the Company's products which satisfies those set by the Company and sufficiently meets the volume of new business required of Production Club membership.Under this provision, an agent of Manulife must comply with three (3) requirements: (1) compliance with the regulations and requirements of the company; (2) maintenance of a level of knowledge of the company's products that is satisfactory to the company; and (3) compliance with a quota of new businesses. Among the company regulations of Manulife are the different codes of conduct such as the Agent Code of Conduct, Manulife Financial Code of Conduct, and Manulife Financial Code of Conduct Agreement, which demonstrate the power of control exercised by the company over Tongko. The fact that Tongko was obliged to obey and comply with the codes of conduct was not disowned by respondents.

Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established. Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company's goals. More importantly, Manulife's evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife. Additionally, it must be pointed out that the fact that Tongko was tasked with recruiting a certain number of agents, in addition to his other administrative functions, leads to no other conclusion that he was an employee of Manulife. 2. Yes In its Petition for Certiorari dated January 7, 2005[26] filed before the CA, Manulife argued that even if Tongko is considered as its employee, his employment was validly terminated on the ground of gross and habitual neglect of duties, inefficiency, as well as willful disobedience of the lawful orders of Manulife. Manulife stated: In the instant case, private respondent, despite the written reminder from Mr. De Dios refused to shape up and altogether disregarded the latter's advice resulting in his laggard performance clearly indicative of his willful disobedience of the lawful orders of his superior. As private respondent has patently failed to perform a very fundamental duty, and that is to yield obedience to all reasonable rules, orders and instructions of the Company, as well as gross failure to reach at least minimum quota, the termination of his engagement from Manulife is highly warranted and therefore, there is no illegal dismissal to speak of. It is readily evident from the above-quoted portions of Manulife's petition that it failed to cite a single iota of evidence to support its claims. Manulife did not even point out which order or rule that Tongko disobeyed. More importantly, Manulife did not point out the specific acts that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife merely cited Tongko's alleged "laggard performance," without substantiating such claim, and equated the same to disobedience and neglect of duty. Apropos thereto, Art. 277, par. (b), of the Labor Code mandates in explicit terms that the burden of proving the validity of the termination of employment rests on the employer. Failure to discharge this evidential burden would necessarily mean that the dismissal was not justified, and, therefore, illegal.

The Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence. The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employer's dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Here, Manulife failed to overcome such burden of proof. It must be reiterated that Manulife even failed to identify the specific acts by which Tongko's employment was terminated much less support the same with substantial evidence. To repeat, mere conjectures cannot work to deprive employees of their means of livelihood. Thus, it must be concluded that Tongko was illegally dismissed. Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal. FRANCISCO vs. NLRC ANGELINA FRANCISCO vs. NLRC, KASEI CORPORATION, et al. G.R. No. 170087 August 31, 2006 FACTS: In 1995, petitioner Angelina Francisco was hired by Kasei Corporation (Kasei) during its incorporation stage. She was designated as Accountant, Corporate Secretary and Liaison Officer of the company. In 1996, Francisco was designated Acting Manager to handle recruitment of all employees and perform management administration functions, represent the company in all dealings with government agencies, and to administer all other matters pertaining to the operation of Kasei Restaurant which is owned and operated by Kasei. For five years, petitioner performed the duties of Acting Manager. As of December 31, 2000 her salary was P27,500.00 plus P3,000.00 housing allowance and a 10% share in the profit of Kasei Corporation. In January 2001, Francisco was replaced as Manager. She alleged that she

was required to sign a prepared resolution for her replacement but she was assured that she would still be connected with Kasei. The Treasurer convened a meeting of all employees and announced that Francisco was still connected with Kasei Corporation as Technical Assistant to Seiji Kamura and in charge of all BIR matters. Thereafter, Kasei reduced her salary by P2,500.00 a month beginning January up to September 2001 for a total reduction of P22,500.00 as of September 2001. She was not paid her mid-year bonus allegedly because the company was not earning well. In October 2001, she did not receive her salary from the company, made repeated follow-ups with the cashier but was advised that the company was not earning well. On October 15, 2001, she asked for her salary, but she was informed that she is no longer connected with the company. Since she was no longer paid her salary, petitioner did not report for work and filed an action for constructive dismissal before the labor arbiter. Kasei Corporation claimed that Francisco was not their employee, having been designated as technical consultant who performed work at her own discretion without the control and supervision of the Corporation, and that her consultancy may be terminated any time considering that her services were only temporary in nature and dependent on the needs of the corporation. To prove that petitioner was not an employee of the corporation, private respondents submitted a list of employees for the years 1999 and 2000 duly received by the BIR showing that petitioner was not among the employees reported to the BIR, as well as a list of payees subject to expanded withholding tax which included petitioner. SSS records were also submitted showing that petitioner’s latest employer was Seiji Corporation. ISSUES: Whether or not there was an employer-employee relationship between Francisco and Kasei Corporation; and whether Francisco was illegally dismissed. HELD: Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. However, 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. There are instances when, aside from the employer’s power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s 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. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latter’s employment. 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 employer’s business; (2) the extent of the worker’s investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the worker’s 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.

President of Kasei Corporation and the inclusion of her name in the on-line inquiry system of the SSS evinces the existence of an employer-employee relationship between petitioner and respondent corporation. It is therefore apparent that petitioner is economically dependent on respondent corporation for her continued employment in the latter’s line of business. The corporation constructively dismissed petitioner when it reduced her salary by P2,500 a month from January to September 2001. This amounts to an illegal termination of employment, where the petitioner is entitled to full backwages. Since the position of petitioner as accountant is one of trust and confidence, and under the principle of strained relations, petitioner is further entitled to separation pay, in lieu of reinstatement. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development. Pharmacia and Upjohn v. Albayda, Jr.

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 corporation’s Technical Consultant. She reported for work regularly and served in various capacities as Accountant, 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. 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 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. When petitioner was designated General Manager, respondent corporation made a report to the SSS signed by Irene Ballesteros. Petitioner’s membership in the SSS as manifested by a copy of the SSS specimen signature card which was signed by the

Facts: Respondent Ricardo P. Albayda, Jr. was an employee of Upjohn until the merger between Pharmacia and Upjohn wherein petitioner designated respondent as District Sales Manager to District XI in the Western Visayas area. Respondent settled in Bacolod City with his family. Respondent received a memorandum announcing the new sales force structure reassigning him to District XII in the Northern Mindanao area, Cagayan de Oro City. Respondent replied that he was unwilling to transfer because of concerns about his family and additional expenses and that it is an unfamiliar territory which would make it difficult for him to improve sales, requesting to remain in the Western Visayan area. Respondents request was denied with the reason that the relocation was to maximize business opportunities and growth development of personnel. Respondent was on sick leave and made other letter requests to the company stating his reasons that were denied until he received a memorandum informing him that he has consumed all his sick leave and would be considered on indefinite sick leave without pay as per company policy. Respondent

replied that his doctor has declared him fit to work and that he is ready to work with his old position or anywhere in Western Visayas. The case was referred to the Human Resource Department as it appears that respondent was not willing to work anywhere outside western Visayas. A Mr. Montilla met with respondent to discuss the situation and respondent received a memorandum after the meeting which states that the company needed him in Cagayan de Oro for his abilities but he also has the option of being transferred to manila as there were no more vacancies in the western visayas. Respondent wrote that he will be airing his grievance before the National Labor Relations Commission to which Montilla replied that he will be entitled to Relocation Benefits and Allowance pursuant to the company’s Benefits Manual. Montilla did not hear from respondent and wrote another memorandum as a final notice for respondent to report for work in Manila within 5 working days from receipt of the memo otherwise will be terminated due to AWOL. A few weeks after Montilla sent a memorandum of the company’s decision to terminate his services for his refusal to report for work and that it is indicated in his contract that he is willing to be assigned anywhere in the Philippines as the company sees fit and the termination is pursuant to Art 282 of the Labor Code due to AWOL and insubordination. Respondent filed a complaint with the NLRC in Bacolod which was dismissed by the labor arbiter for lack of merit. Respondent appealed and the NLRC dismissed for lack of merit and affirmed the decision of the labor arbiter. Respondent filed for motion for reconsideration and was again denied, respondent filed a petition for certiorari before the CA. CA favored respondent, the NLRC decision reversed and set aside, remanded to NLRC Bacolod for the proper determination of petitioner’s claims. Petitioners filed motion for reconsideration denied by CA hence petition with petitioner raising a lone assignment of error to wit: Issue: whether or not the CA (Cebu) can reverse or set aside the factual and legal findings of the NLRC which was based on substantial evidence when there is no showing of palpable error or that the findings of fact of the labor arbiter is contrary to that of the NLRC Ruling: petition is meritorious. The reassignment of respondent was a valid exercise of petitioners management prerogative, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and the action is not motivated by discrimination, made in bad faith, or affected as a form of punishment or demotion without sufficient cause. CA overstepped its legal mandate as it appears that the NLRC and labor arbiter’s decisions were based on substantial evidence and should not be disturbed. There is no proof of arbitrariness or abuse of discretion. Petition is partially granted, petitioners are ordered to pay respondent separation pay as a measure of social justice where the employee is validly dismissed

for causes other than serious misconduct or those reflecting moral character. http://www.lawphil.net/judjuris/juri2010/aug2010/gr_172724_2010.html Rolando C. Rivera v Solidbank Corporation Facts: Petitioner has been working with Solidbank for 18 years when he was offered a retirement program which he took wherein he would receive P1,045,258.95 by way of benefits. Deciding to devote his time to the poultry business, petitioner applied for retirement which was approved. Petitioner received net amt of P963,619.28 minus total accountabilities amounting to P106,973.00 and confirmed his separation from Solidbank. Bank required Rivera to sign an undated Release, Waiver and Quitclaim and promised that “he would not at any time in any manner whatsoever directly or indirectly engage in any unlawful activity prejudicial to the interest of Solidbank… and willnot disclose any information concerning the business…” the bank may also bring any action to seek an award for damages resulting from his breach of the release, waiver and quitclaim to include whatever sums paid to him by virtue of his retirement and was required to sign an undated Undertaking wherein he promised that he will not seek employment with a competitor bank or financial institution within 1 year and that any breach would entitle to a cause of action against him before the appropriate courts of law. Three months after Rivera worked for Equitable Banking Corporation and he received information from the human resources division of Solidbank that he had violated the undertaking with a demand for the return of all the monetary benefits he received. Rivera refused, solidbank filed complaint for sum of money with prayer for preliminary attachment before RTC manila. The trial court issued a writ of preliminary attachment to attach all of Rivera’s properties not exempt from execution. The sheriff levied on a parcel of land owned by rivera. Rivera, in his answer with affirmative defenses and counterclaim alleging that the undertaking was void for being contrary to the constitution, law and public policy. Solidbank filed verified motion for summary judgment alleging that Rivera raised no genuine issue as to any material fact in his answer except as to the amount of damages and that he was obliged to return the money as he had signed the undertaking and that whether it was unreasonable, arbitrary, or oppressive is a question of law. Rivera opposed the motion contending that as gleaned from the pleadings, there are genuine issues as to material facts which call for the presentation of evidence. He averred that there was a need for the parties to adduce evidence to prove that he did not sign the Undertaking voluntarily. He claimed that he would not have been allowed to avail of the benefits if he had not signed it. He also asserted that he could not cause injury or prejudice to Solidbank’s interest since he never acquired any

sensitive or delicate information which could prejudice the bank’s interest if disclosed. Rivera appended to his Opposition his counter-affidavit in which he reiterated that he had to sign the undertaking containing the employment ban provision other wise his availment would not push through and there was no truth to the bank’s allegations that he agreed not to seek employment in a competitor bank or financial institution within one year in exchange for what he receive instead of the other retirement option for a smaller amount. His superior did not inform him that he would have to sign the undertaking when he applied for the retirement benefit and it was the bank who offered it to streamline their organization and he would have continued working for the bank for at least 15 more years earning more than what he received for retirement. He intended to go full time into the poultry business but found out in 2 months that it was not sufficient to support his family. He was then forced to look for a job and with his current training and experience, the job at Equitable bank was all he could find. In his supplemental opposition, Rivera insisted that the ban was not necessary to protect the interst of Solidbank as in the first place he did not have any secret information which if revealed would be prejudicial to the bank. In Solidbank’s reply they averred that the wisdom of requiring the undertaking for the retirement benefit is purely a management prerogative. It was not for rivera to question and decry the bank’s policy to protect itself from unfair competition and disclosure of its trade secrets. The substantial monetary windfall given the retiring officers was meant to tide them over the one year period of hiatus and did not prevent them from engaging in any kind of business or bar them form being employed except with competitor banks/financial institutions. Trial court issued summary judgment in favor of plaintiff and against defendant to pay bank the retirement benefit plus 12% interest per annum until fully paid. The trial court declared that there was no genuine issue as to a matter of fact since rivera voluntarilyexecuted the release waiver quitclaim and undertaking, and had a choice not to retire. The undertaking was not unreasonable and for rivera to be excused would be enrichment at the expense of the bank. Rivera appealed to CA, partially granted, decision affirmed with modification that the attachment and levy upon the family home set aside and discharged. CA declared that there were no earmarks of coercion, undue influence, or fraud in the deed’s execution, he is deemed to have waived the right to assail the same hence stopped from insisting or retaining the money. Hence recourse to the court:

Issue: CA erred in the summary judgment with regard to existence of genuine issues as to material facts which call for presentation of evidence; 1 year ban violates public policy as enunciated in our constitution and

laws; CA erred in affirming decision ordering respondent to give benefits to Solidbank plus 12% per annum until fully paid

Ruling: Petition is meritorious. For a summary judgment to be proper, the movant must establish 2 requisites:1. There must be no genuine issue as to any material fact except for the amount of damages;2. The party presenting the motion for summary judgment must be entitled to a judgment as a matter of law. If opposing party fails to produce a genuine issue, the moving party is entitled to a summary judgment.(genuine issue is an issue of fact which requires the presentation of evidence, where the facts pleaded by the parties are disputed or contested, proceedings for a summary judgment cannot take the place of a trial). Court agrees that issue on the ban as against public policy is a genuine issue of fact, requiring parties to present evidence to support their respective claims. Petitioner also declared in the undertaking ‘that any breach on his part of said undertaking or the terms and conditions of the release, waiver, quitclaim will entitle respondent to a cause of action for protection before the appropriate courts of law. Art 1306 of the new CC provides tat te contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they arenot contrary to law, morals, good customs, public order or public policy. Retirement plans, in light of the constitutional mandate of affording full protection to labor, must be liberally construed in favor of the employee, it being the general rule that pension or retirement plans formulated by the employer are to be construed against it. Estoppels cannot give validity to an act that is prohibited by law or one that is against public policy. Respondent, as employer is burdened to establish that a restrictive covenant barring an employee from accepting a competitive employment after retirement or resignation is not unreasonable or oppressive. It is settled that actual damages or compensatory damages may be awarded fro breach of contracts. Actual damages are primarily intended to simply make good or replace the loss covered by said breach and cannot be presumed. Even if petitioner had admitted to having breached the undertaking, respondent must still prove that it suffered damages and the amount thereof. On the assumption that the ban is valid, restitution of the money will not follow as a matter of course as any breach of petitioner of his promise entitles respondent a cause of action for protection IN THE COURTS OF LAW. Respondent is still burdened to prove its entitlement by producing the best evidence. http://www.lawphil.net/judjuris/juri2006/apr2006/gr_163269_2006.html

G.R. No. 162957 March 6, 2006 UNITED KIMBERLY-CLARK EMPLOYEES UNION – PHILIPPINE TRANSPORT GENERAL WORKERS’ ORGANIZATION (UKCEU-PTGWO), Petitioner, vs. KIMBERLY – CLARK PHILIPPINES, INC., Respondent. Facts:KCPI and UKCEU executed a collective Bargaining agreement (CBA) Art XX section1 for recommendations of retired, resigned, deceased or disabled employees of their legitimate children and in default a relative within the 3rd civil degree, if qualified shall be hired on probationary status. There were no qualifying standards, high school graduates were hired as an act of liberality. On nov 95, KCPI issued guidelines for the implementation of artXX sec1 wich require among others, that:1 recomendees must at least be 18 notmore than 30 at the time of hiring;2. Completed high school and at least 2 years of technical/vocational course or 3rd yr level of college educ; if both husband and wife are employees, theyshall be treated as one family, hence, only one of the spouses would be allowed to avail of the benefit. UKCEU requested for a grievance meeting requesting for the deferment until January 97 after the next CBA negotiations where it will be taken up. KCPI agreed but only with respect to th educational qualification. During negotiations, UKCEU proposed the amendment of art XX sec1 of the existing CBA. KCPI and UKCEU executed a CBA to cover the period form julu 97 to june 99. The educational qualifications were not incorporated neither were the proposed amendment, art XX sec1 was reteained without any modification. In the second half of 98, KCPI started to suspend the implementation of the CBA due to depressed economic conditions then in the philippines and in compliance with the freeze hiring policy of its Asia-Pacific headquarters. On april 23, the parties filed before the natl conciliation and mediation board NCMB, a submission agreement referring to arbitration the issue of whether KCPI violated art XX sec1. The parties agreed not to appeal resolution of the VA. In aug 99 KCPI and UKCEU executed a new CBA incorporating artXX sec1, governing the relation of te parties up to june 2002. UKCEU averred in its pleadings that admitting high school graduates had been an established practice since 1980 and that the educational req does not apply to recommendees as per art XX sec 1 and that denying husband and wife employees of individual rights is a clear violation of the CBA and discrimination since both are paying union dues and individually vote for any policy determination. KCPI in its pleadings maintained that its management prerogative, it had the right to determine hiring standards underartxx sec1 without consent or approval of UKCEU. It averred that after its implementation was deferred the union did not take any action hence stopped from questioning its

implementation. It was justified to temporarily suspend the implementation because of existing conditions. KCPI also avers that it never anticipated the undue burden of having to hire recomendees from both husband and wife which do not usually possess the same qualifications and skills of his/her predecessor and was not in a position to sustain the practice considering the low volume in sales and a reduction in the number of working days in some areas of its operations. The voluntary arbitrator visited the premises of KCPI on may 1999, with prior notice to the parties and discovered that KCPI employed casuals who performed the work of certain regular employees. On march 2001 the va issued resolution that the company cannot suspend the implementation of Art XX sec1 of the existing CBA unilaterally by upgrading the educational qualifications and that husband and wife are each entitled to recommend a replacement. According to the va management prerogative does not give license to a company to set aside or ignore what had been agreed upon through negotiation, KCPI could not just unilaterally change or suspend the implementation of the existing employment requirements. Since KCPI failed to explain why it continued to hire casual workers doing the job of regular employees, it failed to substantiate its contention that the economic crisis did not warrant the hiring of regular employees. Va referred to art1 of the CBA providing that the agreement covers all regular rank and file employees, had it the intention to grant husband and wife only one applicant-replacement, it should have been stated in unequivocal terms. KCPI assailed decision via petition before the CA: partially granted. CA ruled that KCPI may validly exercise management prerogative and that the right to recommend employees as per artXX sec1 is not absolute. CA ruled that the company must prove financial distress by sufficient convincing evidence , that it made it extremely difficult for company to comply with art xx sec1, and that the change in the circumstance must be one which could not be foreseen at the time the contract was executed. UKCEU moved for partial reconsideration, denied. UKCEU, now petitioner seeks relief from this court in the instant petition: Issue: CA erred in agreeing with management prerogative, that to allow respondent to set higher educational standards is to render nugatory the right granted to them under CBA. Ruling: we rule against petitioner. The court has recognized in numerous instances the undoubted right of the employer to regulate, according to his own discretion and best judgment, all aspects of employment. The exercise of thios right is not absolute, management prerogative must always be exercised in good faith for the advancement of employer’s

interest and not for the purpose of defeating or circumventing the rights of the employess under special laws, valid agreements scuh as the individual contract of employment and the collective bargaining agreement and general principles of justice and fair play. In this case the court finds that respondent acted in accord with the CBA and the November 1995 guidelines wihcih by agreement of the parties may be implemented by respondent after January 1997.

is an absence of evidence that respondents suspension and eventual dismissal were tainted with malice and bad faith hence, the NLRC deleted the award for moral and exemplary damages. Although the labor arbiter awarded atty’s fees, the basis for the same was not discussed in the decision. there must always be a factual basis for the award of atty’s fees, consistent with the policy that no premium should be placed on the right to litigate. Atty’s fees award should be deleted.

http://www.lawphil.net/judjuris/juri2006/mar2006/gr_162957_2006.html

http://elibrary.judiciary.gov.ph/decisions.php?doctype=Decisions %20/%20Signed%20Resolutions&docid=1212366437969076709

[G.R. No. 165968, April 14, 2008] PEPSI COLA PRODUCTS PHILIPPINES, INC. AND ERNESTO F. GOCHUICO, PETITIONERS, VS. EMMANUEL V. SANTOS, RESPONDENT. Facts: respondent was employed by pepsi cola products and was promoted to acting regional sales manager at the libis sales office in 1996. In 1997 respondent received from petitioner memorandum charging him of fraud and acts of dishonesty out of alleged artificial sales by the sales personnel of the libis sales office in march 1996 allegedly upon instruction of respondent resulting to damages amounting to P795, 454.54. also apprised respondent of preventive suspension and hearings of the administrative investigation. Respondent found guilty and was dismissed. Respondent filed for illegal dismissal which the labor arbiter dismissed. On appeal the NLRC remanded the case to the labor arbiter. The decision is that petitioners failed to satisfactorily prove the serious charges against respondent and ordered petitioners separation pay of 165,000 for 11 yrs of service, 180,000 1yr backwage, 345,000 and atty fees equivalent to 10% of the monetary award. In addition for the illegal dismissal apparently tainted with malice and bad faith, an award of 1000,000 as moral damages and 50,000 as exemplary damages. Petitioners appealed to NLRC which affirmed LA’s decision but deleted the award of moral and exemplary damages in the absence of evidence of malice and bad faith. Petitioners elevated matter to CA which affirmed the NLRC decision. petitioners submit the ff issues for reconsideration: Issue: whether respondent was validly dismissed; whether trial on merits was necessary; whether award of atty’s fees was proper. Ruling: first issue involves question of fact not an error of law, however the records were still reviewed carefully and petitioner failed to present evidence to justify respondents dismissal. Second issue, it is not legally objectionable, for being violative of due process, for the LA to resolve a case based solely on the position papers, affidavits or documentary evidence submitted by the parties. third issue, we have ruled that atty’s fees may be awarded only in case of an illegal dismissal. In this case there

G.R. No. 150861 | January 22, 2008 | AL ARELLANO, SOLOMON BRITANICO, VALERIANO MENDOZA, JOSE PERPETUA, REY PAMINIANO, FREDDIE JIMENA, JOEL UBANA, ALEX MABANTA, ALEXANDER ANTONIO, JERRY NACAYTUNA, ELIZER DELFIN, FRANCISCO CORPUZ, ALEX GARIDO, DANTE DIMAANO, NARCISO ALBAY, MAXIMO GAGARIN, APOLLO CAYABYAB, RONALD GESTIADA, SERGIO ESPERANZA, ROMEO CARPIO and RODRIGO ORDINIZA,petitioners, vs. POWERTECH CORPORATION, WILLIE CABOBOS and COURT OF APPEALS (Former Special Ninth Division), respondents. Facts: 20 petitioners from the Nagkakaisang Manggagawa ng Powertech Corp (petitioners) were granted by labor arbiter dela cruz monetary claims for illegal termination totaling to P2,538,728.84. Powertech appealed to the NLRC, during its pendency, Calros Gestiada for himself and on behalf of other petitioners executed a quitclaim, release and waiver in favor of Powertech in consideration of the amount of P150,000. Earlier, Gestiada was appointed by his co-petitioners as their atty in fact evidenced by a special power of atty. The compromise amt was paid to gestiada by check. Relying on the quitclaim and release, Powertech filed a motion for the withdrawal of the appeal and cash bond. NLRC granted the motion. The P150,000 check bounced due to a stop payment order of powertech. Aggrieved, petitioners moved to nullify the release and quitclaim for lack of consideration. NLRC declared the quitclaim, release and waiver void for lack of consideration, reinstated the appeal and ordered Powertech to post a cash or surewty bond for the monetary judgment less the amount it had previously posted. After 2 wks gestiada terminated the services of their counsel, atty evangelista and instead retained atty Manuel Felipe of the PAO. A day later, Powertech paid P150,000 to Gestiada purportedly as compromise amount for all of petitioners. That same day, Gestiada through atty Felipe and Powertech filed a joint motion to dismiss with the NLRC based on the compromise agreement. Atty Evangelista opposed the motion alleging that the compromise agreement is unconscionable that he was illegally terminated as counsel for the other petitioners without their consent and that the P150,000 was received by Gestiada as payment solely for his backwages and other monetary claims. NLRC denied for lack of merit. NLRC held that P150,000 received by Gestiada did not cover the monetary claim of petitioners. Admitted in a letter to atty evangelista that

it is solely for his backwages and monetary claims. Granting Gestiada had the authority to enter into a compromise agreement in behalf of the other complainants, the quitclaim and release cannot be recognized as a valid and binding undertaking as the consideration therefore (P150,000) as opposed to the total monetary award in the amount equivalent to P2,538,728.84 is clearly unconscionable and thus void for being contrary to public policy. The NLRC ruled that the labor arbiter decision had attained finality for failure of Powertech to post the required cash or surety bond. Undaunted, Powertech elevated the matter to the CA via petition for certiorari under rule 65 of the 1997 rules of civil procedure. CA rendered a decision in favor of powertech. The dispositive portion of the decision reads: WHEREFORE, premises considered, the petition is GIVEN DUE COURSE and is hereby GRANTED. The Resolution of the National Labor Relations Commission dated July 31, 2000 declaring the Quitclaim and Release void ab initio and denying the Joint Motion to Dismiss and dismissing the appeal of the petitioners is ANNULLED and SET ASIDE. No pronouncement as to costs. SO ORDERED.16 The CA held the validity of the compromise agreement between petitioners and Powertech in the following tenor: The public respondent’s act of dismissing the appeal and declaring the compromise agreement void is a grave abuse of discretion. Apparently the NLRC has already lost the jurisdiction over the case because the appeal was already considered withdrawn and th cash bond released. It is noted that said resolution withdrawing the appeal has become final and executor since the same had not been subject of a motion for reconsideration. The public respondent (NLRC) in taking cognizance therefor of the motion for reconsideration by the complainants seeking to declare the compromise agreement void on the ground of non payment and consequently declaring the same as being contrary to law acted in excess of jusrisdiction since the procedure for acquiring jurisdiction over the case was not properly observed. The proper remedy of the aggrieved party is not to file a motion for reconsideration on the ground ofnon-payment but to have the compromise agreement enforced by means of a writ of execution. Petitioners moved to reconsider the CA decision but their motion was denied. Hence the present recourse: Issue: petitioners impute to the CA grave abuse of discretion in ruling that the NLRC committed grave abuse of discretion in declaring void the compromise agreement; that NLRC lost jurisdiction; and assuming jurisdiction over the present petition considering that private respondents failed to perfect their appeal with the NLRC.

Ruling: we find that the CA erred in upholding the compromise agreement between powertech and gestiada as there is collusion. Powertech knew that Gestiada had plenary authority to act for petitioners in the labor case. It had prior dealings with him. It also knew that gestiada was authorized to negotiate for any amount ‘he may deem just and reasonable’ and to sign wivers and quitclaims on behalf of petitioners. Powertech obviously used that knowledge, capitalized on the vulnerable position of Gestiada in entering into the agreement and took advantage of the situation to disadvantage petitioners. Collusion is a species of fraud. Art. 227 of the Labor Code empowers the NLRC to void a compromise agreement for fraud. Considering that Powertech failed to post the required bond, its applea was not deemed perfected and te labor arbiter;s decision is now final and executory. In the recent case of Mary Abigail’s Food Service, Inc. v. Court of Appeals,31 this Court again reiterated: A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. Clear it is from the above that an appeal to the NLRC from any decision, award or order of the Labor Arbiter must have to be made within ten (10) calendar days from receipt of such decision, award or order with proof of payment of the required appeal bond accompanied by a memorandum of appeal. And where, as here, the decision of the Labor Arbiter involves a monetary award, the appeal is deemed perfected only upon the posting of a cash or surety bond also within ten (10) calendar days from receipt of such decision in an amount equivalent to the monetary award. The posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal from the labor arbiter’s monetary award. Notably, the perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and noncompliance with the requirements therefore is fatal and has the effect of rendering the judgment sought to be appealed final and executory. Such requirement cannot be trifled with.

Given the foregoing ruling we find it unnecessary to tackle petitioners’ contention that the NLRC had lost jurisdiction over the case when it dismissed Powertech’s appeal. It had become inconsequential, the crucial issue having been resolved in their favor.

Final Note As a final note, We rebuke Powertech’s unscrupulous and despicable act of using an apparently valid compromise agreement to evade payment of its legal obligation to petitioners. We will not allow employers to make a mockery of our legal system by using legal means to perpetrate fraud. This should serve as a warning to parties in labor cases to endeavor to achieve a just and equitable resolution of their disputes and to enter into compromise agreements in good faith. http://www.lawphil.net/judjuris/juri2008/jan2008/gr_150861_2008.html G.R. No. 145587 October 26, 2007 EDI-STAFFBUILDERS INTERNATIONAL, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ELEAZAR S. GRAN, respondents. This Petition for Review on Certiorari[1] seeks to set aside the October 18, 2000 Decision[2] of the Court of Appeals (CA) in CA-G.R. SP No. 56120 which affirmed the January 15, 1999 Decision[3] and September 30, 1999 Resolution[4] rendered by the National Labor Relations Commission (NLRC) (Third Division) in POEA ADJ (L) 94-06-2194, ordering Expertise Search International (ESI), EDI-Staffbuilders International, Inc. (EDI), and Omar Ahmed Ali Bin Bechr Est. (OAB) jointly and severally to pay Eleazar S. Gran (Gran) the amount of USD 16,150.00 as unpaid salaries. Facts: Private respondent Gran was an OFW recruited by EDI, and deployed by ESI to work for OAB, in Riyadh, Kingdom of Saudi Arabia. EDI sent OAB a list upon the latter’s request for qualified applicants of computer specialist. Gran was chosen for the list, and signed an employment contract that granted him a monthly salary of USD 850 for a period of 2 yrs. Upon arrival in Riyadh, Gran questioned the discrepancy in his monthly salary—his employment contract stated USD 850.00; while his Philippine Overseas Employment Agency (POEA) Information Sheet indicated USD 600.00 only. However, through the assistance of the EDI office in Riyadh, OAB agreed to pay Gran USD 850.00 a month. After 5 months Gran was terminated for on compliance and insubordination. Gran received from OAB the total amount of SR 2,948.00 representing his final pay, and on the same day, he executed a Declaration releasing OAB from any financial obligation or otherwise, towards him. Gran constituted complaint in the Philippines against EDI, ESI, OAB for underpayment and illegal dismissal. Labor arbiter ruled that there was

neither. NLRC reversed LA’s decision, declared that charges was not substantiated and there was no investigation, with payment of USD16,150.00 to gran. Gran filed motion for execution of judgment. Petitioner filed opposition and motion for reconsideration, denied. Edi filed for review with CA for NLRC’s grave abuse of discretion despite gran’s failure to perfect appeal for failure to furnish copy of appeal memorandum to EDI. CA denied petition and declared lack of evidence and denial of due process, and quitclaim is contrary to public policy where the monetary consideration given in the Declaration is much less than what he was legally entitled to. Hence the petition before this court: Issues: will failure to furnish copy of memorandum justify dismissal of gran’s appeal?; if there is substabtial evidence of gran’s termination and is justified; if there was due process; if entitled to backwages Ruling: The J.D. Magpayo ruling was reiterated in Carnation Philippines Employees Labor Union-FFW v. National Labor Relations Commission,[27] Pagdonsalan v. NLRC,[28] and in Sunrise Manning Agency, Inc. v. NLRC.[29] Thus, the doctrine that evolved from these cases is that failure to furnish the adverse party with a copy of the appeal is treated only as a formal lapse, an excusable neglect, and hence, not a jurisdictional defect. Accordingly, in such a situation, the appeal should not be dismissed; however, it should not be given due course either. As enunciated in J.D. Magpayo, the duty that is imposed on the NLRC, in such a case, is to require the appellant to comply with the rule that the opposing party should be provided with a copy of the appeal memorandum. An allegation of incompetence should have a factual foundation. Incompetence may be shown by weighing it against a standard, benchmark, or criterion. However, EDI failed to establish any such bases to show how petitioner found Gran incompetent. EDI failed to discharge the burden of proving Gran’s insubordination or willful disobedience. As indicated by the second requirement provided for in Micro Sales Operation Network, in order to justify willful disobedience, we must determine whether the order violated by the employee is reasonable, lawful, made known to the employee, and pertains to the duties which he had been engaged to discharge. In the case at bar, petitioner failed to show that the order of the company which was violated—the submission of “Daily Activity Reports”—was part of Gran’s duties as a Computer Specialist. Before the Labor Arbiter, EDI should have provided a copy of the company policy, Gran’s job description, or any other document that would show that the “Daily Activity Reports” were required for submission by the employees, more particularly by a Computer Specialist.

Under the twin notice requirement, the employees must be given two (2) notices before their employment could be terminated: (1) a first notice to apprise the employees of their fault, and (2) a second notice to communicate to the employees that their employment is being terminated. In between the first and second notice, the employees should be given a hearing or opportunity to defend themselves personally or by counsel of their choice. [55] A careful examination of the records revealed that, indeed, OAB’s manner of dismissing Gran fell short of the two notice requirement. In the present case, the employment contract provides that the employment contract shall be valid for a period of two (2) years from the date the employee starts to work with the employer.[61] Gran arrived in Riyadh, Saudi Arabia and started to work on February 7, 1994;[62] hence, his employment contract is untilFebruary 7, 1996. Since he was illegally dismissed on July 9, 1994, before the effectivity of R.A. No. 8042, he is therefore entitled to backwages corresponding to the unexpired portion of his contract, which was equivalent to USD 16,150. Petitioner EDI questions the legality of the award of backwages and mainly relies on the Declaration which is claimed to have been freely and voluntarily executed by Gran. The foregoing events readily reveal that Gran was “forced” to sign the Declaration and constrained to receive the amount of SR 2,948.00 even if it was against his will—since he was told on July 10, 1994 to leave Riyadh on July 12, 1994. He had no other choice but to sign the Declaration as he needed the amount of SR 2,948.00 for the payment of his ticket. He could have entertained some apprehensions as to the status of his stay or safety in Saudi Arabia if he would not sign the quitclaim.

1.) SEAFDEC-AQD is a department of an international organization, the Southeast Asian Fisheries Development Center. Private Respondent Lazaga was hired as a Research Associate and eventually became the Head of External Affairs Office of SEAFDEC-AQD. However, he was terminated allegedly due to financial constraints being experienced by SEAFEC-AQD. He was supposed to receive separation benefits but SEAFDEC-AQD failed to pay private respondent his separation pay so Lazaga filed a complaint for non-payment of separation benefits, plus moral damages and attorney’s fees with the NLRC. 2.) In their ANSWER WITH COUNTERCLAIM, SEAFDEC alleged that NLRC has no jurisdiction over the case because: (1) It is an international organization; (2) Lazaga must first secure clearances from the proper departments for property or money accountability before any claim for separation pay will be paid (and clearances has not been paid) COUNTERCLAIM: Lazaga had property accountability and outstanding obligation to SEAFDEC-AQD amounting to P27, 532.11 and that Lazaga was not entitled to the accrued sick leave benefits due to his failure to avail of the same during his employment 3.) LA: for Lazaga 4.) NLRC: affirmed LA, deleted attorney’s fees and actual damages 5.) SEAFDEC-AQD filed MFR, denied ISSUES 1. WON SEAFEC-AQD is immune from suit owing to its international character 2. WON SEAFDEC-AQD is estopped from claiming that the court had no jurisdiction

Petition is denied. http://sc.judiciary.gov.ph/jurisprudence/2007/october2007/145587.htm LABOR CASES (Part II ng Syllabus) G.R. No. 86773 February 14, 1992 | SOUTHEAST ASIAN FISHERIES DEVELOPMENT CENTER-AQUACULTURE DEPARTMENT (SEAFDECAQD), DR. FLOR LACANILAO (CHIEF), RUFIL CUEVAS (HEAD, ADMINISTRATIVE DIV.), BEN DELOS REYES (FINANCE OFFICER), petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and JUVENAL LAZAGA, respondents. | J. NOCON NATURE Petition for certiorari to review the decision of the NLRC

HELD 1. YES Ratio. Being an intergovernmental organization, SEAFDEC including its departments enjoys functional independence and freedom from control of the state in whose territory its office is located. Reasoning. One of the basic immunities of an international organization is immunity from local jurisdiction (immune from legal writs and processes issued by the tribunals of the country where it is found) that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization. Such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states.

FACTS 2. NO

Ratio. Estoppel does not apply to confer jurisdiction to a tribunal that has none over a cause of action. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one. Settled is the rule that the decision of a tribunal not vested with appropriate jurisdiction is null and void. -The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. -The issue of jurisdiction is not lost by waiver or by estoppel G.R. No. L-58494 July 5, 1989 | PHILIPPINE NATIONAL OIL COMPANY-ENERGY DEVELOPMENT CORPORATION, petitioner, vs. HON. VICENTE T. LEOGARDO, DEPUTY MINISTER OF LABOR AND VICENTE D. ELLELINA, respondents. | MELENCIOHERRERA, J. FACTS On 20 January 1978, petitioner PNOC-EDC is a subsidiary of the Philippine National Oil Company (PNOC), filed with the Ministry of Labor and Employment, Regional Office No. VII, Cebu City (MOLE), a clearance application to dismiss/ terminate the services of private respondent, Vicente D. Ellelina, a contractual employee. The application for clearance was premised on Ellelina's alleged commission of a crime (Alarm or Public Scandal) during a Christmas part at petitioner's camp in Uling, Cebu, when, because of the refusal of the raffle committee to give him the prize corresponding to his lost winning ticket, he tried to grab the armalite rifle of the PC Officer outside the building despite the warning shots fired by the latter. Clearance to dismiss was initially granted by MOLE but was subsequently revoked and petitioner was ordered to reinstate Ellelina to his former position, without loss of seniority rights, and with backwages from I February 1978 up to his actual reinstatement. Petitioner appealed to the Minister of Labor who affirmed the appealed Order. Petitioner: 1. Under Article 277 of the Labor Code, the Ministry of Labor and Employment has no jurisdiction over petitioner because it is a governmentowned or controlled corporation; 2. Ellelina's dismissal is valid and just because it is based upon the commission of a crime. Respondent:

(a) While the petitioner is a subsidiary of the PNOC, it is still covered by the Labor Code and, therefore, within the jurisdiction of the Ministry of Labor inasmuch as petitioner was organized as a private corporation under the Corporation Law and registered with the Securities and Exchange Commission; (b) Petitioner is estopped from assailing the Labor Department's jurisdiction, having subjected itself to the latter when it filed the application for clearance to terminate Ellelina's services; and (c) Dismissal is too harsh a penalty. ISSUES/RULING 1. Whether or not public respondent committed grave abuse of discretion in holding that petitioner is governed by the Labor Code - Article 277 of the Labor Code (PD 442) provides that terms and conditions of employment of all government employees, including employees of government- owned and controlled corporations shall be governed by the Civil Service Law. - The The Civil Service embraces every branch, agency, subdivision and instrumentality of the government, including government-owned or controlled corporations. 2. Whether or not Ellelina's dismissal was justified. - The reinstatement ordered by public respondent, without loss of seniority rights, is proper. However, consistent with the rulings of the Court, backwages should be limited to three years from 1 February 1978. The dismissal ordered by petitioner was a bit too harsh considering the nature of the act which he had committed and that it was his first offense. WHEREFORE, the Petition is DISMISSED, and the judgment of respondent public official is hereby AFFIRMED. No costs. G.R. No. 148415, July 14, 2008 | RICARDO G. PALOMA, PETITIONER, VS. PHILIPPINE AIRLINES, INC. AND THE NATIONAL LABOR RELATIONS COMMISSION, RESPONDENTS. | VELASCO JR., J.: FACTS Paloma worked with PAL from September 1957, rising from the ranks to retire, after 35 years of continuous service, as senior vice president for finance. In March 1992, or some nine (9) months before Paloma retired on November 30, 1992, PAL was privatized. By way of post-employment benefits, PAL paid Paloma the total amount of

PhP 5,163,325.64 which represented his separation/retirement gratuity and accrued vacation leave pay. For the benefits thus received, Paloma signed a document denominated Release and Quitclaim but inscribed the following reservation therein: "Without prejudice to my claim for further leave benefits embodied in my aide memoire transmitted to Mr. Roberto Anonas covered by my 27 Nov. 1992 letter x x x." The leave benefits Paloma claimed being entitled to refer to his 450-day accrued sick leave credits which PAL allegedly only paid the equivalent of 18 days. He anchored his entitlement on Executive Order No. (EO) 1077 dated January 9, 1986, and his having accumulated a certain number of days of sick leave credits, as acknowledged in a letter of Alvia R. Leano, then an administrative assistant in PAL. Answering Paloma's written demands for conversion to cash of his accrued sick leave credits, PAL asserted having paid all of Paloma's commutable sick leave credits due him pursuant to company policy made applicable to PAL officers starting 1990. Subsequently, Paloma filed before the Arbitration Branch of the National Labor Relations Commission (NLRC) a Complaint for Commutation of Accrued Sick Leaves Totaling 392 days. In the complaint, docketed as NLRC-NCR-Case No. 00-08-05792-94, Paloma alleged having accrued sick leave credits of 450 days commutable upon his retirement pursuant to EO 1077 which allows retiring government employees to commute, without limit, all his accrued vacation and sick leave credits. And of the 450-day credit, Paloma added, he had commuted only 58 days, leaving him abalance of 392 days of accrued sick leave credits for commutation. RULING OF LABOR ARBITER The labor arbiter held that PAL is not covered by the civil service system and, accordingly, its employees, like Paloma, cannot avail themselves of the beneficent provision of EO 1077. This executive issuance, per the labor arbiter's decision, applies only to government officers and employees covered by the civil service, exclusive of the members of the judiciary whose leave and retirement system is covered by a special law. However, the labor arbiter ruled that Paloma is entitled to a commutation of his alternative claim for 202 accrued sick leave credits less 40 days for 1990 and 1991. Thus, the grant of commutation for 162 accrued leave credits. CA RULING Justifying its amendatory action, the CA stated that EO 1077 applies to PAL and necessarily to Paloma on the following rationale: Section 2(1) of Article IX(B) of the 1987 Constitution applies prospectively and, thus, the expressed limitation therein on the applicability of the civil service law only

to government-owned and controlled corporations (GOCCs) with original charters does not preclude the applicability of EO 1077 to PAL and its then employees. ISSUES WHETHER OR NOT THE [CA], IN HOLDING THAT E.O. NO. 1077 IS APPLICABLE TO PETITIONER AND YET APPLYING COMPANY POLICY BY AWARDING THE CASH EQUIVALENT OF ONLY 162 DAYS SICK LEAVE CREDITS INSTEAD OF THE 450 DAYS SICK LEAVE CREDITS PETITIONER IS ENTITLED TO UNDER E.O. NO. 1077, DECIDED A QUESTION OF SUBSTANCE IN A MANNER CONTRARY TO LAW AND APPLICABLE JURISPRUDENCE HELD Paloma maintains that he comes within the coverage of EO 1077, the same having been issued in 1986, before he severed official relations with PAL, and at a time when the applicable constitutional provision on the coverage of the civil service made no distinction between GOCCs with original charters and those without, like PAL which was incorporated under the Corporation Code. Implicit in Paloma's contention is the submission that he earned the bulk of his sick leave credits under the aegis of the 1973 Constitution when PAL, being then a government-controlled corporation, was under civil service coverage. The contention is without merit. G.R. No. 154472. June 30, 2005 | Lopez et. al. v. MWSS | J. Tinga FACTS: In 1997, MWSS entered into a Concession Agreement with Manila Water Service, Inc. and Benpress-Lyonnaise, wherein the collection of bills was transferred to said private concessionaires, effectively terminating the contracts of service between petitioners and MWSS. Regular employees of the MWSS, except those who had retired or opted to remain with the latter, were absorbed by the concessionaires. Regular employees of the MWSS were paid their retirement benefits, but not petitioners. Instead, they were refused said benefits, MWSS relying on a resolution of the Civil Service Commission (CSC) that contract-collectors of the MWSS are not its employees and therefore not entitled to the benefits due regular government employees. Petitioners filed a complaint with the CSC. In its Resolution dated 1 July 1999,the CSC denied their claims, stating that petitioners were engaged by MWSS through a contract of service, which explicitly provides that a bill collector-contractor is not an MWSS employee. Moreover, it found that petitioners were unable to show that they have contractual appointments duly attested by the CSC. In addition, the CSC stated that petitioners, not being permanent employees of MWSS and not included in the list submitted to the concessionaire, are not entitled to severance pay. Petitioners’ claims for retirement benefits and terminal leave pay were

likewise denied. Thereafter the petitioner Reconsideration which was later on Denied.

filed

for

a

Motion

for

termed as causes for termination of the Agreement, a review of the same shows that the grounds indicated therein can similarly be grounds for termination of employment.

Petitioners filed a petition for with the Court of Appeals. Affirming and generally reiterating the ruling of the CSC, the Court of Appeals held that the Agreement entered into by petitioners and MWSS was clear and unambiguous, and should be read and interpreted according to its literal sense. Hence, as per the terms of the agreement, petitioners were not MWSS employees. The Court of Appeals held that no other evidence was adduced by petitioners to substantiate their claim that their papers were forwarded to the CSC for attestation and approval. It added that in any event, as early as 26 June 1996, the CSC specifically stated that “contract collectors are not MWSS employees and therefore not entitled to severance pay. Thereafter, an appeal was made to the Supreme Court.

On the other hand, relevant and appropriate is the definition of wages in the Labor Code, namely, that it is the remuneration, however designated, for work done or to be done, or for services rendered or to be rendered. The “commissions” due petitioners were based on the bills collected as per the schedule indicated in the Agreement. Significantly, MWSS granted petitioners benefits usually given to employees, to wit: COLA, meal, emergency, and traveling allowances, hazard pay, cash gift, and other bonuses. In an unabashed bid to claim credit for itself, MWSS professes that these additional benefits were its acts of benevolence and generosity. We are not impressed.

ISSUE: Whether or not 1) the petitioner are employees of the MWSS 2) the latter has power to dismiss the latter 3) if they are entitled to the benefits provided for under the Labor Code of the Philippines

Other manifestations of control are evident from the records. The power to transfer or reassign employees is a management prerogative exclusively enjoyed by employers. In this case, MWSS had free reign over the transfer of bill collectors from one branch to another. MWSS also monitored the performance of the petitioners and determined their efficiency.

HELD: The Court has invariably affirmed that it will not hesitate to tilt the scales of justice to the labor class for no less than the Constitution dictates that “the State . . . shall protect the rights of workers and promote their welfare.” It is committed to this policy and has always been quick to rise to defense in the rights of labor, as in this case. Protection to labor, it has been said, extends to all of labor¾local and overseas, organized and unorganized, in the public and private sectors. Besides, there is no reason not to apply this principle in favor of workers in the government. The government, including government-owned and controlled corporations, as employers, should set the example in upholding the rights and interests of the working class.

Even the “four-fold test” will show that petitioner is the employer of private respondents. The elements to determine the existence of an employment relationship are: (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’s conduct. 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 it.

For purposes of determining the existence of employer-employee relationship, the Court has consistently adhered to the four-fold test, namely: (1) whether the alleged employer has the power of selection and engagement of an employee; (2) whether he has control of the employee with respect to the means and methods by which work is to be accomplished; (3) whether he has the power to dismiss; and (4) whether the employee was paid wages.Of the four, the control test is the most important element.

Petitioners are indeed regular employees of the MWSS. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. The 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. Likewise, the repeated and continuing need for the performance of the job has been deemed sufficient evidence of the necessity, if not indispensability of the activity to the business. Some of the petitioners had rendered more than two decades of service to the MWSS. The continuous and repeated rehiring of these bill collectors indicates the necessity and desirability of their services, as well as the importance of the role of bill collectors in the MWSS.

A review of the circumstances surrounding the case reveals that petitioners are employees of MWSS. Despite the obvious attempt of MWSS to categorize petitioners as mere service providers, not employees, by entering into contracts for services, its actuations show that they are its employees, pure and simple. MWSS wielded its power of selection when it contracted with the individual petitioners, undertaking separate contracts or agreements. The same goes true for the power to dismiss. Although

MWSS committed itself to pay severance and terminal leave pay to its regular employees. The guidelines thereof states that regular employees who have rendered at least a year of service and not eligible for retirement are entitled to severance pay equivalent to one (1) month basic pay for every full year of service. In view of the Court’s finding that petitioners were employees of MWSS, the corresponding severance pay, in accordance with the guidelines, should be given to them. Terminal leave

pay are likewise due petitioners, provided they meet the requirements therefore. G.R. No. 147745. April 9, 2003 | MARIA BUENA OBRA, petitioner, vs. SOCIAL SECURITY SYSTEM (Jollar Industrial Sales and Services Inc.), respondents.| J. Puno FACTS Juanito Buena Obra, husband of petitioner, worked as a driver for twenty-four (24) years and five (5) months. His first and second employers were logging companies. Thereafter, he was employed at Jollar Industrial Sales and Services Inc. as a dump truck driver from January 1980 to June 1988. He was assigned to the following projects:[4] 1. January 1980 to December 1981 – F.F. Cruz Project, Nabua, Camarines Sur – hauling/delivery of filling materials from quarry to job site 2. January 1982 to December 1983 – F.F. Cruz, 300 MW Coal Fire Thermal Plant, Calaca, Bacungan and Makban Geothermal Plant, Los Baños, Laguna – hauling/delivery of filling materials from quarry to job site 3. January 1984 to December 1985 – Dizon Copper Silver Mines, Pili, San Marcelino, Zambales – hauling/delivery filling materials from quarry to job site 4. January 1986 to June 1988 – Metro Manila Hauling Project On 27 June 1988, Juanito suffered a heart attack while driving a dump truck inside the work compound, and died shortly thereafter. In the Report of Death[5] submitted by his employer to the Social Security System (SSS), Juanito expired at the Worker's Quarters at 10:30 a.m., of Myocardial Infarction. Petitioner Maria M. Buenaobra immediately filed her claim for death benefits under the SSS law. She started receiving her pension in November 1988. Petitioner was, however, unaware of the other compensation benefits due her under Presidential Decree No. 626, as amended, or the Law on Employees’ Compensation. In September 1998, or more than ten (10) years after the death of her husband, that she learned of the benefits under P.D. No. 626 through the television program of then broadcaster Ted Failon who informed that one may claim for Employees Compensation Commission (ECC) benefits if the spouse died while working for the company. Petitioner prepared the documents to support her claim for ECC benefits. On 23 April 1999, she filed with the SSS her claim for funeral benefits under P.D. No. 626, as amended, which was docketed as SSS # 04-0089326-0.[6]

On 28 July 1999, the SSS denied the claim of petitioner for funeral benefits ruling that the cause of death of Juanito was not work-connected, absent a causal relationship between the illness and the job. Caridad R. Borja, Assistant Vice-President National Capital Region (AVP – NCR) Central of the SSS Member Assistance Center in Quezon City wrote: “Please be informed that funeral claim under the Employees Compensation is hereby denied. Per medical evaluation, cause of death of subject member’s (sic) cannot be considered work connected since there is no causal relationship between the illness and the job.” On 8 October 1999, petitioner wrote to Atty. Teofilo E. Hebron, Executive Director of the ECC, appealing the denial of her claim. On 11 November 1999, Atty. Hebron ordered Dr. Simeon Z. Gonzales, Assistant Vice-President (AVP) of the Medical Services Group of the SSS to review the claim of petitioner. On 23 November 1999, the Medical Services Group through Dr. Perla A. Taday, AVP for Medical Operations, concluded its re-evaluation and affirmed the denial of petitioner’s claim. It reiterated that “there is no causal relationship between the cause of death/illness and member’s job as dump truck driver.”[7] Pursuant to Section 5, Rule XVIII of the Implementing Rules of PD 626, the records of the deceased Juanito were elevated to the Commission. On 13 April 2000, the Commission rendered a decision, dismissing the appeal.[8] It ruled that petitioner failed to show by substantial evidence that her husband’s cause of death was due to, or the risk of contracting his ailment was increased by his occupation and working conditions, as per Section 1(b), Rule III of P.D. No. 626, as amended. In addition, the Commission declared that petitioner’s claim has prescribed, citing ECC Resolution No. 93-08-0068. Petitioner appealed to the Court of Appeals. She alleged that her cause of action had not prescribed because the filing of her claim for SSS benefits shortly after Juanito’s death suspended the running of the prescriptive period for filing EC claims, as per Item No. III of ECC Resolution No. 90-03-0022 dated 23 March 1990. The appellate court dismissed the petition. It ruled that petitioner's filing of her claim for SSS benefits shortly after Juanito’s death did not suspend the running of the prescriptive period for filing EC claims. It interpreted the aforementioned ECC Resolutions to mean that a claimant must indicate the kind of claim filed before the running of the prescriptive period for filing EC claims may be interrupted. In the case at bar, petitioner indeed filed a claim with SSS. In fact, she has been receiving her pension since November 1988. However, she failed to specify whether the basis of her claim was any contingency which may be held compensable under the EC Program.[9] In addition, the Court of Appeals cited P.D. No. 626 which states that a contingency may be held compensable if listed in Annex "A" of the Rules Implementing Employees' Compensation as an occupational disease, and satisfying all conditions set forth therein; or if not listed as an occupational

disease, or listed but has not satisfied the conditions set forth therein, it must be proven by substantial evidence that the risk of contracting the disease which caused the death of the member, was increased by the member's working conditions.[10]

“No claim for compensation shall be given due course unless said claim is filed with the System within three years from the time the cause of action accrued.” We agree with the petitioner that her claim for death benefits under the SSS law should be considered as the Employees’ Compensation claim itself. This is but logical and reasonable because the claim for death benefits which petitioner filed with the SSS is of the same nature as her claim before the ECC. Furthermore, the SSS is the same agency with which Employees’ Compensation claims are filed. As correctly contended by the petitioner, when she filed her claim for death benefits with the SSS under the SSS law, she had already notified the SSS of her employees’ compensation claim, because the SSS is the very same agency where claims for payment of sickness/disability/death benefits under P.D. No. 626 are filed.

The appellate court likewise held that the three-year prescriptive period does not apply in the instant case. Instead, it applied Art. 1142(2) of the Civil Code which reads: “Art. 1144. The following actions must be brought within ten (10) years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law;

Section 4(b)(2), Rule 3 of the ECC Rules of Procedure for the Filing and Disposition of the Employees’ Compensation Claims, quoted above, also provides for the conditions when EC claims filed beyond the three-year prescriptive period may still be given due course. Section 4(b)(2) states the condition for private sector employees, requiring that a claim for Medicare, sickness, burial, disability or death should be filed within three (3) years from the occurrence of the contingency. In the instant case, the petitioner was able to file her claim for death benefits under the SSS law within the three-year prescriptive period. In fact, she has been receiving her pension under the SSS law since November 1988.

(3) Upon a judgment. [Emphasis supplied.] The appellate court then held that the petitioner's cause of action has prescribed. Petitioner's husband died on 27 June 1988. She filed her claim for funeral benefits under P.D. No. 626 or the Law on Employees' Compensation only on 23 April 1999, or more than ten (10) years from his death. Lastly, the appellate court ruled that even assuming petitioner's cause of action has not prescribed, her claim for Employees' Compensation benefits cannot prosper because of her failure to prove by substantial evidence that her husband's working conditions increased the risk of contracting the myocardial infarction that caused his death. Petitioner’s Motion for Reconsideration dated 27 September 2000 was denied by the appellate court in a Resolution promulgated on 6 March 2001. ISSUES 1. 2.

WHETHER, INDEED, THE CLAIM OF PETITIONER, HAD PRESCRIBED. WHETHER OR NOT THE ILLNESS OF PETITIONER’S HUSBAND, MYOCARDIAL INFARCTION, IS WORK-RELATED.

HELD 1.

The claim of petitioner for funeral benefits under P.D. No. 626, as amended, has not yet prescribed. The issue of prescription in the case at bar is governed by P.D. No. 626, or the Law on Employees' Compensation. Art. 201 of P.D. No. 626 and Sec. 6, Rule VII of the 1987 Amended Rules on Employees' Compensation both read as follows:

2.

Myocardial infarction is also known as heart attack. It results in permanent heart damage or death. A heart attack is called myocardial infarction because part of the heart muscle (myocardium) may literally die (infarction). This occurs when a blood clot blocks one of the coronary arteries (the blood vessels that bring blood and oxygen to the heart muscle). When the heart muscle does not obtain the oxygen-rich blood that it needs, it will begin to die. The severity of a heart attack usually depends on how much of the heart muscle is injured or dies during the heart attack. Heart attack accounts for 1 out of every 5 deaths. It is a major cause of sudden death in adults. Heavy exertion or emotional stresscan trigger a heart attack.[16] In the case at bar, the petitioner’s husband’s heart disease falls under the second condition of ECC Resolution No. 432 dated July 20, 1977 which states that the strain of work that brought about the acute attack must be of sufficient severity and must be followed within 24 hours by the clinical signs of a cardiac insult to constitute causal relationship. Petitioner’s husband was driving a dump truck within the company premises where they were stacking gravel and sand when he suffered the heart attack. He had to be taken down from the truck and brought to the workers’

quarters where he expired at 10:30 a.m., just a few minutes after the heart attack, which is much less than the 24 hours required by ECC Resolution No. 432. This is a clear indication that severe strain of work brought about the acute attack that caused his death. Professional drivers, especially truck drivers like the decedent in the instant case, carry the burden of being more exposed and subjected to the stress and strain of everyday traffic, and the greater physical exertion brought about by driving a large and heavy vehicle. In addition, according to the petitioner, her husband was under a lot of stress in the workplace. He was a model worker and his employer highly depended on him. He became the object of envy of his co-workers which caused him much emotional stress. Add to this the fact that he has been a truck driver for more than twenty-four (24) years. Due to the combination of emotional stress and vigorous physical exertion, it was easy for him to succumb to the heart ailment. We hold that the illness of the decedent which caused his death is workconnected, and thus compensable by virtue of ECC Resolution No. 432 dated 20 July 1977. As a final note, we find it necessary to reiterate that P.D. No. 626, as amended, is a social legislation whose primordial purpose is to provide meaningful protection to the working class against the hazards of disability, illness and other contingencies resulting in the loss of income. PETITION GRANTED. G.R. No. 121777 January 24, 2001 | THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. CAROL M. DELA PIEDRA, accusedappellant. Facts: Criminal Investigation Service conducted entrapment of illegal recruitment by Mrs. Carol Figueroa, alias Carol Llena, and Carol dela Piedra. Both Nancy Araneta and Lourdes Modesto testified that dela Piedra promised them employment for a fee. Their testimonies corroborate each other on material points: the briefing conducted by appellant, the time and place thereof, the fees involved. Appellant has not shown that these witnesses were incited by any motive to testify falsely against her. The absence of evidence as to an improper motive actuating the principal witnesses of the prosecution strongly tends to sustain that no improper motive existed and that their testimony is worthy of full faith and credence. Accused defense of denial, claiming that she went to Singapore to visit relatives and met Laleen Malicay who had been working there for six years had instructed her to bring money back to her relatives in the Philippines. This is how accused went from Cebu to Zamboanga to meet Malicay’s cousin Jasmine Alejandro who inquired about going to Singapore. Accussed also says Malicay was the one who instructed Jasmine to give her the

application forms the CIS found with accused on their raid in Jasmine’s house in Zamboanga and thought it was for Malicay’s substitute as she planned to go back to the Philippines. RTC found accused guilty, hence appeal. Issue: Overbreadth and void for vagueness; equal protection clause; legality of arrest; Held: Here, the provision in question reads: ART. 13. Definitions.—(a) x x x. (b) "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. x x x. Vagueness: The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in the act of recruitment and placement. The words "shall be deemed" create that presumption. An act will be declared void and inoperative on the ground of vagueness and uncertainty, only upon a showing that the defect is such that the courts are unable to determine, with any reasonable degree of certainty, what the legislature intended. An Act will not be declared inoperative and ineffectual on the ground that it furnishes no adequate means to secure the purpose for which it is passed, if men of common sense and reason can devise and provide the means, and all the instrumentalities necessary for its execution are within the reach of those intrusted therewith." Overbreadth: That Section 13 (b) encompasses what appellant apparently considers as customary and harmless acts such as " labor or employment referral" ("referring" an applicant, according to appellant, for employment to a prospective employer) does not render the law overbroad. Evidently, appellant misapprehends concept of overbreadth. A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally worded statute, when construed to punish conduct which cannot be constitutionally punished is unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between the constitutionally permissible and the constitutionally impermissible applications of the statute.26

Appellant also invokes the equal protection clause in her defense. She points out that although the evidence purportedly shows that Jasmine Alejandro handed out application forms and even received Lourdes Modesto's payment, appellant was the only one criminally charged. Alejandro, on the other hand, remained scot-free. From this, appellant concludes that the prosecution discriminated against her on grounds of regional origins. Appellant is a Cebuana while Alejandro is a Zamboangueña, and the alleged crime took place in Zamboanga City.The unlawful administration by officers of a statute fair on its face, resulting in its unequal application to those who are entitled to be treated alike, is not a denial of equal protection unless there is shown to be present in it an element of intentional or purposeful discrimination. This may appear on the face of the action taken with respect to a particular class or person, or it may only be shown by extrinsic evidence showing a discriminatory design over another not to be inferred from the action itself.But a discriminatory purpose is not presumed, there must be a showing of "clear and intentional discrimination."33 Appellant has failed to show that, in charging appellant in court, that there was a "clear and intentional discrimination" on the part of the prosecuting officials. While all persons accused of crime are to be treated on a basis of equality before the law, it does not follow that they are to be protected in the commission of crime. It would be unconscionable, for instance, to excuse a defendant guilty of murder because others have murdered with impunity. The remedy for unequal enforcement of the law in such instances does not lie in the exoneration of the guilty at the expense of society x x x. Protection of the law will be extended to all persons equally in the pursuit of their lawful occupations, but no person has the right to demand protection of the law in the commission of a crime. Illegal recruitment is committed when two elements concur. First, the offender has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers. Second, he or she undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13 (b), or any prohibited practices enumerated under Article 34 of the Labor Code.38 In case of illegal recruitment in large scale, a third element is added: that the accused commits said acts against three or more persons, individually or as a group. In this case, the first element is present. The certification of POEA Officer-in-Charge Macarulay states that appellant is not licensed or authorized to engage in recruitment and placement. The second element is also present. Appellant is presumed engaged in recruitment and placement under Article 13 (b) of the Labor Code. Both Nancy Araneta and Lourdes Modesto testified that appellant promised them employment for a fee. Their testimonies corroborate each other on material points: the briefing conducted by appellant, the time and place thereof, the fees involved. Appellant has not shown that these witnesses were incited by any motive to testify falsely against her. The absence of evidence as to an improper motive actuating the principal witnesses of the

prosecution strongly tends to sustain that no improper motive existed and that their testimony is worthy of full faith and credence. Appellant's denials cannot prevail over the positive declaration of the prosecution witnesses. Affirmative testimony of persons who are eyewitnesses of the fact asserted easily overrides negative testimony. That appellant did not receive any payment for the promised or offered employment is of no moment. From the language of the statute, the act of recruitment may be "for profit or not;" it suffices that the accused "promises or offers for a fee employment" to warrant conviction for illegal recruitment. The testimonies of Araneta and Modesto, coming as they do from credible witnesses, meet the standard of proof beyond reasonable doubt that appellant committed recruitment and placement. We therefore do not deem it necessary to delve into the legality of appellant's arrest and the seizure of the application forms. A warrantless arrest, when unlawful, has the effect of invalidating the search incidental thereto and the articles so seized are rendered inadmissible in evidence. Here, even if the documents seized were deemed inadmissible, her conviction would stand in view of Araneta and Modesto's testimonies. Appellant attempts to cast doubt on the prosecution's case by claiming in that Erlie Ramos of the POEA supposedly "planted" the application forms. She also assails his character, alleging that he passed himself off as a lawyer, although this was denied by Ramos. The claim of "frame-up," like alibi, is a defense that has been invariably viewed by the Court with disfavor for it can easily be concocted but difficult to prove. Apart from her self-serving testimony, appellant has not offered any evidence that she was indeed framed by Ramos. She has not even hinted at any motive for Ramos to frame her. Law enforcers are presumed to have performed their duties regularly in the absence of evidence to the contrary. A conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. In this case, only two persons, Araneta and Modesto, were proven to have been recruited by appellant. The third person named in the complaint as having been promised employment for a fee, Jennelyn Baez, was not presented in court to testify. It is true that law does not require that at least three victims testify at the trial; nevertheless, it is necessary that there is sufficient evidence proving that the offense was committed against three or more persons. In this case, evidence that appellant likewise promised her employment for a fee is sketchy. The only evidence that tends to prove this fact is the testimony of Nancy Araneta, who said that she and her friends, Baez and Sandra Aquino, came to the briefing and that they (she and her "friends") filled up application forms. The affidavit Baez executed jointly with Araneta cannot support Araneta's testimony. The affidavit was neither identified, nor its contents affirmed, by Baez. Insofar as it purports to prove that appellant recruited Baez, therefore, the affidavit is hearsay and inadmissible.48 In any case, hearsay evidence, such as the said affidavit, has little probative value. Neither can appellant be convicted for recruiting CIS agent Eileen Fermindoza or even the other persons present in the briefing of January 30, 1994. Appellant is

accused of recruiting only the three persons named in the information — Araneta, Modesto and Baez. The information does not include Fermindoza or the other persons present in the briefing as among those promised or offered employment for a fee. To convict appellant for the recruitment and placement of persons other than those alleged to have been offered or promised employment for a fee would violate her right to be informed of the nature and cause of the accusation against her. Courts may consider a piece of evidence only for the purpose for which it was offered, and the purpose of the offer of their testimonies did not include the proving of the purported recruitment of other supposed applicants by appellant. Appellant claims in her seventh assigned error that the information is fatally defective since it charges her with committing illegal recruitment in large scale on January 30, 1994 while the prosecution evidence supposedly indicates that she committed the crime on February 2, 1994. We find that the evidence for the prosecution regarding the date of the commission of the crime does not vary from that charged in the information. Both Nancy Araneta and Lourdes Modesto testified that on January 30, 1994, while in the Alejandro residence, appellant offered them employment for a fee. Thus, while the arrest was effected only on February 2, 1994, the crime had already been committed three (3) days earlier on January 30, 1994. The eighth and tenth assigned errors, respectively, pertain to the penalty of life imprisonment imposed by the trial court as well as the constitutionality of the law prescribing the same, appellant arguing that it is unconstitutional for being unduly harsh.55 Section 19 (1), Article III of the Constitution states: "Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted." The penalty of life imprisonment imposed upon appellant must be reduced. Because the prosecution was able to prove that appellant committed recruitment and placement against two persons only, she cannot be convicted of illegal recruitment in large scale, which requires that recruitment be committed against three or more persons. Appellant can only be convicted of two counts of "simple" illegal recruitment, one for that committed against Nancy Araneta, and another count for that committed against Lourdes Modesto. Appellant is sentenced, for each count, to suffer the penalty of four (4) to six (6) years of imprisonment and to pay a fine of P30,000.00. This renders immaterial the assigned error assumed of proper imposable penalty of life imprisonment. G.R. No. 81510 March 14, 1990 HORTENCIA SALAZAR, petitioner, vs. HON. TOMAS D. ACHACOSO, in his capacity as Administrator of the Philippine Overseas Employment Administration, and FERDIE MARQUEZ, respondents. Facts: On November 3, 1987, having ascertained that the petitioner had no license to operate a recruitment agency, the POEA Administrator issued Closure and Seizure Order No. 1205 ordering the closure of the alleged recruitment agency operated at No. 615 R.O. Santos st. Mandaluyong Metro Manila, and the seizure of documents and paraphernalia being used

or intended to be used in committing illegal recruitment. Pursuant to said Order, a team of POEA people swooped down at the residence of petitioner and at the Hanalie Dance Studio inside said residence. The team confiscated assorted costumes which according to petitioner were worth P10,000 and which already due for shipment to japan. Petitioner wrote POEA attesting the legality of the seizure of her personal property, alleging that the seizure was contrary to the constitutional guarantees of due process and the right of the people “to be secured in their persons, houses, papers and effects against unreasonable searches and seizure.” On February 2, 1988 the petitioner filed this suit for prohibition. Although the acts sought to be barred are already fait accompli, thereby making prohibition too late, the SC considered the petition as one for certiorari in view of the grave public interest involved. Issue: may the POEA or the Sec. of Labor validly issue warrants of search and seizure or arrest under art. 38 of the Labor Code? Held: the petition is granted. Art 38 par. C of the Labor Code is declared unconstitutional and void. The respondents are ordered to return all materials seized as a result of the implementation of search and seizure order no. 1205. Under the constitution only a judge may issue warrants of search and arrest. Art. 38 par. C of the Labor Code as now written was entered as an amendment by PD No. 1920 and 2018 of the late pres. Marcos to PD 1693 in the exercise of his legislative powers under amendment no. 6 of the 1973 constitution. Under the latter, the then Minister of Labor merely exercised recommendatory powers,i.e. to recommend the arrest and detention of any person engaged in illegal recruitrment. On may 1, 1984 Mr. Marcos promulgated PD No.1920 with the avowed purpose of giving more teeth to the campaign against illegal recruitment. The decree gave the minister of labor arrest and closure powers: On January 26, 1986 Pres. Marcos promulgated PD No. 2018 giving the Labor Minister search and seizure powers as well. The above has now been etched as art 38 par. C of the Labor Code. The decrees in question it is well to note, stand as the dying vestiges of authoritarian rule in its twilight moments. We reiterate the Sec. of Labor, not being a judge may no longer issue search or arrest warrants. Hence, the authorities must go through the judicial process. To that extent we declare art 38 par. C of the Labor Code unconstitutional and of no force and effect. For the guidance of the bench and the bar, we reaffirm the following principles: 1. Under Article III, Section 2, of the l987 Constitution, it is only judges, and no other, who may issue warrants of arrest and search:

2. The exception is in cases of deportation of illegal and undesirable aliens, whom the President or the Commissioner of Immigration may order arrested, following a final order of deportation, for the purpose of deportation. G.R. No. 129486, July 04, 2008 | PEOPLE OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. GLORIA BARTOLOME, ACCUSEDAPPELLANT. Facts: from july to September 1988 in the municipality of indang Cavite accused by 4 private complainants Fe Rollon, Raymundo Dimatulac, Esperanza Buhay, and Reynaldo Rollon of estafa and illegal recruitment receiving sum of money for processing and placement fees for employment abroad in Bahrain. Accused denied but was found guilty by RTC of illegal recruitment affirmed by CA with modification of penalties in accordance to large scale illegal recruitment. MR denied. Hence petition for review: Issue: court erred in affirming lower court Held: Illegal recruitment is committed when two (2) elements concur: First, the offender does not have the required license or authority to engage in the recruitment and placement of workers. Second, the offender undertook (1) recruitment and placement activity defined under Article 13(b) of the Labor Code or (2) any prohibited practice under Art. 34 of the same code. Illegal recruitment is qualified into large scale, when three or more persons, individually or as group, are victimized.[11]

photocopied plane tickets. The private complainants were positive and categorical in their testimonies that they personally met accused-appellant and that she asked for, among others, placement fee in consideration for the promised employment in Bahrain. They had no motive to testify falsely against accused-appellant. In fact, accused-appellant admitted personally knowing them since childhood, describing them to be "not misbehaving or perjurious people."[12] The absence of evidence as to improper motive actuating the principal witnesses of the prosecution augurs well for their credibility. To be sure, the RTC and the CA found their testimonies to be worthy of full faith and credence. The testimonies of credible witness meet the standard of proof beyond reasonable doubt.[13] Accused-appellant cannot plausibly escape liability for her criminal acts by conveniently pointing to and passing the blame on Capawan as the illegal recruiter. Like the trial court, we entertain serious doubts on this selfserving and gratuitous version of accused-appellant. What is more, her denials cannot prevail over the positive declaration of the prosecution witnesses. It is basic that affirmative testimony of persons who are eyewitnesses of the events or facts asserted easily overrides negative testimony.[14] The crime of illegal recruitment in large scale is punishable under Art. 39(a) of the Labor Code, as amended, with life imprisonment and a fine of PhP 100,000. The CA, accordingly, imposed the right penalty.

Art. 13(b) of the Labor Code defines recruitment and placement, as follows: x x x [A]ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. After a circumspect review of the records, the Court is fully convinced as to accused-appellant's guilt of the crime of illegal recruitment in large scale. The first element is present. Accused-appellant had not shown any license to recruit or engage in placement activities. As found by the trial court, the POEA no less initiated the filing of the complaints against accusedappellant, a reality which argues against the existence of such license or authority.

PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee, vs. DELIA SADIOSA y CABENTA, Accused-Appellant.

The second element also obtains. On separate occasions, accusedappellant approached and recruited at least four (4) persons at the same place and at about the same time, giving them the impression that she and Capawan had the capability to send them to Bahrain for employment. All four testified that accused-appellant promised them employment for a fee. Their testimonies corroborate each other on material points, such as the amount exacted as placement fee, the country of destination, and the

On that occasion, accused-appellant assured the four that she could dispatch them to Kuwait4 and forthwith demandedP8,000.00 from each of them for processing fee and P1,000.00 for passport (P1,500.00 from complainant Cely Navarro).5 She assured the group that she would facilitate the processing of all the necessary documents needed by them. She further promised them that upon payment of the required fees, they would be able to leave for Kuwait immediately.

FACTS: Arsenia Conse went to Bayombong, Nueva Ecija in early 1992 where she met the four complainants, Cely Navarro, Marcela Manzano, Erly Tuliao and Benilda Domingo. She enticed the four to apply for overseas employment informing them that she had a cousin who could send them to Kuwait as domestic helpers. Apparently convinced by Arsenia Conse, the four went with her on February 5, 1992 to Manila. Upon arrival, they proceeded to Room 210, Diamond Building, Libertad St., Pasay City where Arsenia Conse introduced the group to accused-appellant Delia Sadiosa. The four then applied for work as domestic helpers.3

The four did give accused-appellant the money demanded although on different dates. The latter issued the corresponding receipts 6 therefor. Again, she assured them that they could leave for Kuwait on different dates: Cely Navarro and Erly Tuliao on February 17, 1992 which was rescheduled twice on February 19, 1992 and on February 25, 1992,7 and Benilda Domingo and Marcela Manzano on March 17, 1992 which was moved twice on February 24, 1992 and on March 17, 1992.8 However, not one of them was able to leave for Kuwait. When they asked for the return of their money, accused-appellant refused and ignored their demand. Consequently, the four filed the complaint for illegal recruitment against accused-appellant. In addition to the complainants testimonies, the prosecution presented Virginia Santiago, a Senior Officer in the Licensing Branch and Inspection Division of the Philippine Overseas Employment Administration (POEA). She testified that accused-appellant was neither licensed nor authorized to recruit workers for overseas employment.9 Accused-appellant herself took the witness stand and testified in her defense. She resolutely denied having a hand in the illegal recruitment, claiming that she merely received the money on behalf of one Mrs. Ganura10 who owned the recruitment agency called Staff Organizers, Inc. She accepted the money in her capacity as an officer of the said recruitment agency. To bolster this claim, she presented evidence that she remitted the money to Mrs. Ganura worthP25,000.0011 although she failed to remit the remaining amount of P8,000.00 since she was already in detention.12Accused-appellant further claimed that although she was not listed in the POEA as an employee of the recruitment agency of Mrs. Ganura, she had a special power of attorney issued by her employer to receive payments from applicants. The trial court found accused-appellant guilty of illegal recruitment. ISSUES: I. II.

III.

THE LOWER COURT ERRED IN NOT STATING CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH ITS JUDGMENT CONVICTING THE ACCUSED-APPELLANT WAS BASED; THE LOWER COURT ERRED IN NOT DISMISSING MOTU PROPRIO THE INFORMATION FOR NOT CONFORMING SUBSTANTIALLY TO THE PRESCRIBED FORM, PARTICULARLY AS TO THE DESIGNATION OF THE OFFENSE AND CAUSE OF THE ACCUSATION; THE LOWER COURT ERRED IN NOT DISMISSING MOTU PROPRIO THE INFORMATION IN VIEW OF ITS INCONSISTENT AND CONTRADICTORY, CONFLICTING AND IRRECONCILABLE CHARGES OF ILLEGAL RECRUITMENT, ESTAFA UNDER ARTICLE 315, PARAGRAPH 1(b) AND ESTAFA UNDER THE SAME ARTICLE BUT UNDER PARAGRAPH 2(a) OF THE REVISED PENAL CODE AND IN CONDUCTING TRIAL THEREUNDER;

IV. V. VI.

THE LOWER COURT ERRED IN NOT ACQUITTING THE ACCUSEDAPPELLANT AND IN CONVICTING HER OF THE THE CHARGE IN THE INFORMATION; THE LOWER COURT ERRED IN NOT FINDING THAT THE LIABILITY OF THE ACCUSED-APPELLANT, IF ANY, IS ONLY CIVIL, NOT CRIMINAL IN NATURE; THE LOWER COURT ERRED IN ORDERING THE ACCUSEDAPPELLANT TO INDEMNIFY THE PRIVATE COMPLAINANTS THE SUM OF P8,000.00 EACH.

HELD: It is well-settled in our jurisprudence that the information is sufficient where it clearly states the designation of the offense by the statute and the acts or omissions complained of as constituting the offense.14 However, there is no need to specify or refer to the particular section or subsection of the statute that was violated by the accused. No law requires that in order that an accused may be convicted, the specific provision penalizing the act charged should be mentioned in the information.15 What identifies the charge is the actual recital of the facts and not that designated by the fiscal in the preamble thereof. It is not even necessary for the protection of the substantial rights of the accused, nor the effective preparation of his defense, that the accused be informed of the technical name of the crime of which he stands charged. He must look to the facts alleged.16 In the instant case, the information filed against accused-appellant sufficiently shows that it is for the crime of illegal recruitment in large scale, as defined in Art. 38 (b) of the Labor Code and penalized in Art. 39 of the same Code although it is designated as for illegal recruitment only imprisonment and a fine of P100,000. Hence, to avoid misconception and misinterpretation of the information, the prosecutor involved in this case should have indicated in its caption, the offense he had clearly alleged in its body, that the crime charged was for illegal recruitment in large scale. However, such omission or lack of skill of the prosecutor who crafted the information should not deprive the people of the right to prosecute a crime with so grave a consequence against the economic life of the aggrieved parties. What is important is that he did allege in the information the facts sufficient to constitute the offense of illegal recruitment in large scale. As regards accused-appellants contention that the questioned decision is void because it failed to state clearly and distinctly the facts and the law on which it was based, this Court is not inclined to grant credence thereto. The constitutional requirement that every decision must state distinctly and clearly the factual and legal bases therefor should indeed be the primordial concern of courts and judges. Be that as it may, there should not be a mechanical reliance on this constitutional provision. The courts

and judges should be allowed to synthesize and to simplify their decisions considering that at present, courts are harassed by crowded dockets and time constraints. While it may be true that the questioned decision failed to state the specific provisions of law violated by accused-appellant, it however clearly stated that the crime charged was Illegal Recruitment. It discussed the facts comprising the elements of the offense of illegal recruitment in large scale that was charged in the information, and accordingly rendered a verdict and imposed the corresponding penalty. The dispositive portion of the decision quoted earlier, clearly states that appellant was found guilty beyond reasonable doubt of the charge in the information. As earlier stated, the charge in the information referred to by the decision could mean only that of illegal recruitment in large scale and not to any other offense. The situation would have been altogether different and in violation of the constitutional mandate if the penalty imposed was for illegal recruitment based on established facts constituting simple illegal recruitment only. As it is, the trial courts omission to specify the offense committed, or the specific provision of law violated, is not in derogation of the constitutional requirement that every decision must clearly and distinctly state the factual and legal bases for the conclusions reached by the trial court. The trial courts factual findings based on credible prosecution evidence supporting the allegations in the information and its imposition of the corresponding penalty imposed by the law on such given facts are therefore sufficient compliance with the constitutional requirement. This Court agrees with the trial court that the prosecution evidence has shown beyond reasonable doubt that accused-appellant engaged in unlawful recruitment and placement activities. Accused-appellant promised the four complainants employment as domestic helpers in Kuwait. Article 13 (b) of the Labor Code defines recruitment and placement as referring to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for employment locally or abroad whether for profit or not; provided that any person or entity which in any manner offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.33 All the essential elements of the crime of illegal recruitment in large scale, which we have enumerated above, are present in this case. The prosecution clearly established the fact that accused-appellant had no license to recruit from the POEA. Yet, the latter entertained the four complainants when they applied, promised them jobs as domestic helpers in Kuwait, and collected fees from them for processing travel documents only to renege on her promise and fail to return the money she collected from complainants despite several demands.

For engaging in recruitment of the four complainants without first obtaining the necessary license from the POEA, accused-appellant, therefore, is guilty of illegal recruitment in large scale, an offense involving economic sabotage. She should, accordingly, be punished with life imprisonment and a fine of P100,000 under Article 39 (a) of the Labor Code, as amended. ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. AND MARLOW NAVIGATION CO., INC. | GR No. 167614 – March 24, 2009

FACTS: Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., under a POEAapproved contract of employment for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid vacation leave per month. On March 19, 1998, the date of his departure, Serrano was constrained to accept a downgraded employment contract for the position of Second Officer with a monthly salary of US$1,000 upon the assurance and representation of respondents that he would be Chief Officer by the end of April 1998. Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano refused to stay on as second Officer and was repatriated to the Philippines on May 26, 1998, serving only two (2) months and seven (7) days of his contract, leaving an unexpired portion of nine (9) months and twenty-three (23) days. Serrano filed with the Labor Arbiter (LA) a Complaint against respondents for constructive dismissal and for payment of his money claims in the total amount of US$26,442.73 (based on the computation of $2590/month from June 1998 to February 199, $413.90 for March 1998, and $1640 for March 1999) as well as moral and exemplary damages. The LA declared the petitioner’s dismissal illegal and awarded him US$8,770, representing his salaray for three (3) months of the unexpired portion of the aforesaid contract of employment, plus $45 for salary differential and for attorney’s fees equivalent to 10% of the total amount; however, no compensation for damages as prayed was awarded. On appeal, the NLRC modified the LA decision and awarded Serrano $4669.50, representing three (3) months salary at $1400/month, plus 445 salary differential and 10% for attorney’s fees. This decision was based on the provision of RA 8042, which was made into law on July 15, 1995. Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042, which reads:

Sec. 10. Money Claims. – x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The NLRC denied the Motion; hence, Serrano filed a Petition for Certiorari with the Court of Appeals (CA), reiterating the constitutional challenge against the subject clause. The CA affirmed the NLRC ruling on the reduction of the applicable salary rate, but skirted the constitutional issue raised by herein petitioner Serrano. ISSUES: 1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-impairment of contracts; 2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector. HELD: On the first issue. The answer is in the negative. Petitioner’s claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive is not tenable. Section 10, Article III of the Constitution provides: No law impairing the obligation of contracts shall be passed. The prohibition is aligned with the general principle that laws newly enacted have only a prospective operation, and cannot affect acts or contracts already perfected; however, as to laws already in existence, their provisions are read into contracts and deemed a part thereof. Thus, the non-impairment clause under Section 10, Article II is limited in application to laws about to be enacted that would in any way derogate from existing acts or contracts by enlarging, abridging or in any manner changing the intention of the parties thereto. As aptly observed by the OSG, the enactment of R.A. No. 8042 in 1995 preceded the execution of the employment contract between petitioner and respondents in 1998. Hence, it cannot be argued that R.A. No. 8042, particularly the subject clause, impaired the employment contract of the parties. Rather, when the parties executed their 1998 employment contract, they were deemed to have incorporated into it all the provisions of R.A. No. 8042. But even if the Court were to disregard the timeline, the subject clause may not be declared unconstitutional on the ground that it impinges on the

impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. Police power legislations adopted by the State to promote the health, morals, peace, education, good order, safety, and general welfare of the people are generally applicable not only to future contracts but even to those already in existence, for all private contracts must yield to the superior and legitimate measures taken by the State to promote public welfare. On the second issue. The answer is in the affirmative. Section 1, Article III of the Constitution guarantees: No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law. Section 18, Article II and Section 3, Article XIII accord all members of the labor sector, without distinction as to place of deployment, full protection of their rights and welfare. To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity: all monetary benefits should be equally enjoyed by workers of similar category, while all monetary obligations should be borne by them in equal degree; none should be denied the protection of the laws which is enjoyed by, or spared the burden imposed on, others in like circumstances. Such rights are not absolute but subject to the inherent power of Congress to incorporate, when it sees fit, a system of classification into its legislation; however, to be valid, the classification must comply with these requirements: 1) it is based on substantial distinctions; 2) it is germane to the purposes of the law; 3) it is not limited to existing conditions only; and 4) it applies equally to all members of the class. There are three levels of scrutiny at which the Court reviews the constitutionality of a classification embodied in a law: a) the deferential or rational basis scrutiny in which the challenged classification needs only be shown to be rationally related to serving a legitimate state interest; b) the middle-tier or intermediate scrutiny in which the government must show that the challenged classification serves an important state interest and that the classification is at least substantially related to serving that interest; and c) strict judicial scrutiny in which a legislative classification which impermissibly interferes with the exercise of a fundamental right or operates to the peculiar disadvantage of a suspect class is presumed unconstitutional, and the burden is upon the government to prove that the

classification is necessary to achieve a compelling state interest and that it is the least restrictive means to protect such interest. Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis-à-vis local workers with fixed-period employment; In sum, prior to R.A. No. 8042, OFWs and local workers with fixed-term employment who were illegally discharged were treated alike in terms of the computation of their money claims: they were uniformly entitled to their salaries for the entire unexpired portions of their contracts. But with the enactment of R.A. No. 8042, specifically the adoption of the subject clause, illegally dismissed OFWs with an unexpired portion of one year or more in their employment contract have since been differently treated in that their money claims are subject to a 3-month cap, whereas no such limitation is imposed on local workers with fixed-term employment. The Court concludes that the subject clause contains a suspect classification in that, in the computation of the monetary benefits of fixedterm employees who are illegally discharged, it imposes a 3-month cap on the claim of OFWs with an unexpired portion of one year or more in their contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. There being a suspect classification involving a vulnerable sector protected by the Constitution, the Court now subjects the classification to a strict judicial scrutiny, and determines whether it serves a compelling state interest through the least restrictive means. What constitutes compelling state interest is measured by the scale of rights and powers arrayed in the Constitution and calibrated by history. It is akin to the paramount interest of the state for which some individual liberties must give way, such as the public interest in safeguarding health or maintaining medical standards, or in maintaining access to information on matters of public concern. In the present case, the Court dug deep into the records but found no compelling state interest that the subject clause may possibly serve.

In fine, the Government has failed to discharge its burden of proving the existence of a compelling state interest that would justify the perpetuation of the discrimination against OFWs under the subject clause. Assuming that, as advanced by the OSG, the purpose of the subject clause is to protect the employment of OFWs by mitigating the solidary liability of placement agencies, such callous and cavalier rationale will have to be rejected. There can never be a justification for any form of government action that alleviates the burden of one sector, but imposes the same burden on another sector, especially when the favored sector is composed of private businesses such as placement agencies, while the disadvantaged sector is composed of OFWs whose protection no less than the Constitution commands. The idea that private business interest can be elevated to the level of a compelling state interest is odious. Moreover, even if the purpose of the subject clause is to lessen the solidary liability of placement agencies vis-a-vis their foreign principals, there are mechanisms already in place that can be employed to achieve that purpose without infringing on the constitutional rights of OFWs. The POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers, dated February 4, 2002, imposes administrative disciplinary measures on erring foreign employers who default on their contractual obligations to migrant workers and/or their Philippine agents. These disciplinary measures range from temporary disqualification to preventive suspension. The POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers, dated May 23, 2003, contains similar administrative disciplinary measures against erring foreign employers. Resort to these administrative measures is undoubtedly the less restrictive means of aiding local placement agencies in enforcing the solidary liability of their foreign principals. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection. The subject clause “or for three months for every year of the unexpired term, whichever is less” in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL. ANTONIO M. SERRANO VS. GALLANT MARITIME SERVICES, INC. FACTS: Petitioner Antonio Serrano was hired by respondents Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., under a POEAapproved contract of employment for 12 months, as Chief Officer, with the basic monthly salary of US$1,400, plus $700/month overtime pay, and 7 days paid vacation leave per month.

On the date of his departure, Serrano was constrained to accept a downgraded employment contract upon the assurance and representation of respondents that he would be Chief Officer by the end of April 1998. Respondents did not deliver on their promise to make Serrano Chief Officer. Hence, Serrano refused to stay on as second Officer and was repatriated to the Philippines, serving only two months and 7 days, leaving an unexpired portion of nine months and twenty-three days. Upon complaint filed by Serrano before the Labor Arbiter (LA), the dismissal was declared illegal. On appeal, the NLRC modified the LA decision based on the provision of RA 8042. Serrano filed a Motion for Partial Reconsideration, but this time he questioned the constitutionality of the last clause in the 5th paragraph of Section 10 of RA 8042. ISSUES: 1. Whether or not the subject clause violates Section 10, Article III of the Constitution on non-impairment of contracts; 2. Whether or not the subject clause violate Section 1, Article III of the Constitution, and Section 18, Article II and Section 3, Article XIII on labor as a protected sector. HELD: On the first issue. The answer is in the negative. Petitioner’s claim that the subject clause unduly interferes with the stipulations in his contract on the term of his employment and the fixed salary package he will receive is not tenable. The subject clause may not be declared unconstitutional on the ground that it impinges on the impairment clause, for the law was enacted in the exercise of the police power of the State to regulate a business, profession or calling, particularly the recruitment and deployment of OFWs, with the noble end in view of ensuring respect for the dignity and well-being of OFWs wherever they may be employed. On the second issue. The answer is in the affirmative. To Filipino workers, the rights guaranteed under the foregoing constitutional provisions translate to economic security and parity.

Upon cursory reading, the subject clause appears facially neutral, for it applies to all OFWs. However, a closer examination reveals that the subject clause has a discriminatory intent against, and an invidious impact on, OFWs at two levels: First, OFWs with employment contracts of less than one year vis-à-vis OFWs with employment contracts of one year or more; Second, among OFWs with employment contracts of more than one year; and Third, OFWs vis-à-vis local workers with fixed-period employment; The subject clause singles out one classification of OFWs and burdens it with a peculiar disadvantage. Thus, the subject clause in the 5th paragraph of Section 10 of R.A. No. 8042 is violative of the right of petitioner and other OFWs to equal protection. The subject clause “or for three months for every year of the unexpired term, whichever is less” in the 5th paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL. BECMEN SERVICE EXPORTER AND PROMOTION, INC. vs. SPOUSES SIMPLICIO and MILA CUARESMA, WHITE FALCON SERVICES, INC. and JAIME ORTIZ | GR No. 182978-79 FACTS: On January 6, 1997, Jasmin Cuaresma (Jasmin) was deployed by Becmen Service Exporter and Promotion, Inc. (Becmen) to serve as assistant nurse in Al-Birk Hospital in the Kingdom of Saudi Arabia (KSA), for a contract duration of three years, with a corresponding salary of US$247.00 per month. Over a year later, she died allegedly of poisoning. Jessie Fajardo, a co-worker of Jasmin, narrated that on June 21, 1998, Jasmin was found dead by a female cleaner lying on the floor inside her dormitory room with her mouth foaming and smelling of poison. Based on the police report and the medical report of the examining physician of the Al-Birk Hospital, who conducted an autopsy of Jasmin’s body, the likely cause of her death was poisoning. Jasmin’s body was repatriated to Manila on September 3, 1998. The following day, the City Health Officer of Cabanatuan City conducted an autopsy and the resulting medical report indicated that Jasmin died under violent circumstances, and not poisoning as originally found by the KSA examining physician. The toxicology report of the NBI, however, tested negative for non-volatile, metallic poison and insecticides. Simplicio and Mila Cuaresma (the Cuaresmas), Jasmin’s parents and her

surviving heirs, received from the Overseas Workers Welfare Administration (OWWA) the following amounts: P50,000.00 for death benefits; P50,000.00 for loss of life; P20,000.00 for funeral expenses; and P10,000.00 for medical reimbursement. On November 22, 1999, the Cuaresmas filed a complaint against Becmen and its principal in the KSA, Rajab & Silsilah Company (Rajab), claiming death and insurance benefits, as well as moral and exemplary damages for Jasmin’s death, Jasmin’s death was work-related, having occurred at the employer’s premises; that under Jasmin’s contract with Becmen, she is entitled to “iqama insurance” coverage; that Jasmin is entitled to compensatory damages in the amount of US$103,740.00, which is the sum total of her monthly salary of US$247.00 per month under her employment contract, multiplied by 35 years (or the remaining years of her productive life had death not supervened at age 25, assuming that she lived and would have retired at age 60). In their position paper, Becmen and Rajab insist that Jasmin committed suicide, citing a prior unsuccessful suicide attempt sometime in March or April 1998 and relying on the medical report of the examining physician of the Al-Birk Hospital. They likewise deny liability because the Cuaresmas already recovered death and other benefits totaling P130,000.00 from the OWWA. They insist that the Cuaresmas are not entitled to “iqama insurance” because this refers to the “issuance” – not insurance – of iqama, or residency/work permit required in the KSA. On the issue of moral and exemplary damages, they claim that the Cuaresmas are not entitled to the same because they have not acted with fraud, nor have they been in bad faith in handling Jasmin’s case.

courts must be vigilant for his protection. Clearly, Rajab, Becmen and White Falcon’s acts and omissions are against public policy because they undermine and subvert the interest and general welfare of our OFWs abroad, who are entitled to full protection under the law. They set an awful example of how foreign employers and recruitment agencies should treat and act with respect to their distressed employees and workers abroad. Their shabby and callous treatment of Jasmin’s case; their uncaring attitude; their unjustified failure and refusal to assist in the determination of the true circumstances surrounding her mysterious death, and instead finding satisfaction in the unreasonable insistence that she committed suicide just so they can conveniently avoid pecuniary liability; placing their own corporate interests above of the welfare of their employee’s – all these are contrary to morals, good customs and public policy, and constitute taking advantage of the poor employee and her family’s ignorance, helplessness, indigence and lack of power and resources to seek the truth and obtain justice for the death of a loved one. Giving in handily to the idea that Jasmin committed suicide, and adamantly insisting on it just to protect Rajab and Becmen’s material interest – despite evidence to the contrary – is against the moral law and runs contrary to the good custom of not denouncing one’s fellowmen for alleged grave wrongdoings that undermine their good name and honor.

While the case was pending, Becmen filed a manifestation and motion for substitution alleging that Rajab terminated their agency relationship and had appointed White Falcon Services, Inc. (White Falcon) as its new recruitment agent in the Philippines. Thus, White Falcon was impleaded as respondent as well, and it adopted and reiterated Becmen’s arguments in the position paper it subsequently filed.

Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

ISSUES: (1.) whether the Cuaresmas are entitled to monetary claims, by way of benefits and damages, for the death of their daughter Jasmin. (2) whether or not Jasmin’s death be considered as work-connected and thus compensable even while she was not on duty;

The relations between capital and labor are so impressed with public interest,and neither shall act oppressively against the other, or impair the interest or convenience of the public. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

HELD: Article 19 of the Civil Code provides that every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Article 21 of the Code states that any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. And, lastly, Article 24 requires that in all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the

The grant of moral damages to the employee by reason of misconduct on the part of the employer is sanctioned by Article 2219 (10) of the Civil Code, which allows recovery of such damages in actions referred to in Article 21. Thus, in view of the foregoing, the Court holds that the Cuaresmas are entitled to moral damages, which Becmen and White Falcon are jointly and solidarily liable to pay, together with exemplary damages for wanton and oppressive behavior, and by way of example for the public good.

On the second issue:

[He could] leave for Australia [in a month’s time] if [he] will give [petitioner Ritualo] a total amount of P160,000.00, and [his] salary would be US$700.00 per month as a farm worker.14

While the “employer’s premises” may be defined very broadly not only to include premises owned by it, but also premises it leases, hires, supplies or uses, we are not prepared to rule that the dormitory wherein Jasmin stayed should constitute employer’s premises as would allow a finding that death or injury therein is considered to have been incurred or sustained in the course of or arose out of her employment. There are certainly exceptions, but they do not appear to apply here. Moreover, a complete determination would have to depend on the unique circumstances obtaining and the overall factual environment of the case, which are here lacking.

On the above-quoted representation on the same date, Biacora paid petitioner Ritualo the amount of P40,000.00 as downpayment, with the balance to be completed before he left for Australia. Upon receipt of the money, petitioner Ritualo issued Biacora a Cash Voucher15 as evidence of said payment. To complete their transaction, Biacora left her a copy of his Bio-data.16

WHEREFORE, Rajab & Silsilah Company, White Falcon Services, Inc., Becmen Service Exporter and Promotion, Inc., and their corporate directors and officers are found jointly and solidarily liable and ORDERED to indemnify the heirs of Jasmin Cuaresma, spouses Simplicio and Mila Cuaresma, the following amounts: (1) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as moral damages; (2) TWO MILLION FIVE HUNDRED THOUSAND PESOS (P2,500,000.00) as exemplary damages; (3)Attorney’s fees equivalent to ten percent (10%) of the total monetary award.

On 4 May 2000, Biacora again gave petitioner Ritualo P20,000.00 as additional payment, making the total amount received by the latter P60,000.00. Again, petitioner Ritualo issued a Cash Voucher.17 Subsequently, Biacora was informed by petitioner Ritualo that all he needed in securing an employment in Australia was his Passport and an endorsement from the Representative of his district. Accompanied by petitioner Ritualo and one Anita Seraspe, the assistant18 of the former, Biacora went to the Batasan Pambansa to secure the necessary endorsement. Thereafter, all three went to the Australian Embassy to apply for Biacora’s working visa.

Carmen Ritualo v People of the Philippines This case originated from two Informations, both dated 2 January 2001, which charged Ritualo with the crimes of Illegal Recruitment defined and penalized by Republic Act No. 8042; and Estafa under Art. 315, par. 2(a) of the Revised Penal Code, In 1993, Felix Biacora went to Saudi Arabia for overseas employment that was facilitated by one Cynthia Libutan (Libutan) who worked for a recruitment agency.12 Several years after his return to the country, Biacora accidentally met Libutan in Baclaran Church sometime in 2000. After they exchanged pleasantries, the former signified to the latter his desire to seek another overseas employment. Libutan then gave Biacora the name, address and contact number of her friend, one Carmen Ritualo, the petitioner herein, who was able to help Libutan’s sister find work in Australia. Biacora thereafter called petitioner Ritualo to set up a meeting. On 1 May 2000, accompanied by his wife, Biacora went to the house of petitioner Ritualo and inquired from her whether she could help him secure overseas employment in Australia. Petitioner Ritualo answered in the affirmative, and to be convincing, brought out travel documents of several people she was able to "help," who were then supposedly scheduled to leave for abroad pretty soon.13 Biacora was then assured that:

On 1 June 2000, Biacora went to see petitioner Ritualo to follow up the date of his departure. Petitioner Ritualo asked from Biacora another P20,000.00 and told the latter to be patient. As with the other amounts given, proof of payment19 was similarly issued to acknowledge receipt thereof. Several dates were set for Biacora’s departure, but none pushed through. To top it all, his Australian Visa application was denied by the Australian Embassy. Consequently, on 9 September 2000, Biacora demanded from petitioner Ritualo the return of the P80,000.00. The latter promised to pay back the money on the 13th of September 2000. None came. Thereafter, Biacora filed the subject criminal complaints against petitioner Ritualo. In two Certifications dated 23 October 200020 and 5 November 2003,21 respectively, both identified by Belen Blones of the Licensing Division of the POEA, it was confirmed that "per available records of [its] Office, CARMEN RITUALO, in her personal capacity is not licensed by this Administration to recruit workers for overseas employment"22 ; and that "[a]ny recruitment activity undertaken by [her] is deemed illegal."23 To rebut the foregoing evidence presented by the prosecution, the defense presented a diametrically opposed version of the facts of the present case through the sole testimony of Ritualo.

In her testimony, Ritualo narrated that it was Libutan and Biacora who asked her to introduce them to a certain Anita Seraspe, the person responsible for sending petitioner Ritualo’s own sister to Australia;24 that she had no agreement with Biacora respecting the latter’s employment in Australia; that any talk of money was made among Libutan, Biacora and Seraspe only; that she received a total of P80,000.00 from Biacora, but that the same was merely entrusted to her because Libutan and Biacora had just met Seraspe,25 and that she turned over all the payments to Seraspe who acknowledged receipt of the same by writing on pieces of paper said acceptance; that she accompanied Biacora to Batasan Pambansa at his request; that she did not earn any money out of her referral and introduction of Libutan and Biacora to Seraspe; that even if she did not earn any money out of the subject transaction, she returned P10,000.00 and P31,000.00, or a total of P41,000.00, to Biacora out of fear that the latter would file charges against her; that she tried to find Seraspe, but the latter could not be found at her last known address; and that she gave Biacora an additional P6,000.000 to obviate any more scandal befalling her family.26 On 1 December 2004, after trial, the RTC found the evidence presented by the prosecution to be more credible and logical than that presented by the defense and thus, convicted Ritualo for the crimes of Simple Illegal Recruitment and Estafa, defined and penalized under the Migrant Workers and Overseas Filipino Act of 1995 and the Revised Penal Code. ISSUES: I.

II.

WHETHER THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING WITH MODIFICATION THE DECISION OF THE REGIONAL TRIAL COURT DESPITE THE FACT THAT THE EVIDENCE ON RECORD COULD NOT SUPPORT A CONVICTION; and ASSUMING ARGUENDO THAT THE PETITIONER IS CULPABLE, THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE REGIONAL TRIAL COURT AS REGARDS THE TERM OF SENTENCE IN THE ILLEGAL RECRUITMENT CASE.

HELD: Essentially, she argues that there "was no proof beyond reasonable doubt that x x x [she] gave Biacora a distinct impression that she had the power or ability to send him abroad for work such that the latter was convinced to part with his money."37 Petitioner Ritualo maintains that Biacora transacted with Seraspe and not with her. Assuming for the sake of argument that she and Biacora had any agreement with each other, petitioner Ritualo insisted that it was merely to facilitate the latter’s application for an Australian Visa. Particularly, she pointed out that the prosecution failed to present other witnesses who could have corroborated the claim of Biacora that she (Ritualo) promised him employment abroad. Anent the penalty imposed by the courts, petitioner disputed the appellate court’s reasoning and claimed that the same was improper in view of the

ruling of this Court in People v. Gallardo,38 in which therein respondent was also convicted of Simple Illegal Recruitment. The Office of the Solicitor General, for the People of the Philippines, on the other hand, asserted that the findings of the Court of Appeals were supported by the records of the case, i.e., "Biacora was consistent in his testimony that it was petitioner who illegally recruited him for work as a farmhand in Australia." Thus, "[a]s against the positive and categorical testimony of the private complainant (Biacora), petitioner’s denial cannot prevail." We find no merit in the petition. Having weighed the evidence for the contending parties, there is no cogent reason to reverse the findings and conclusion of the RTC as affirmed by the Court of Appeals. The prosecution established, through Belen Blones of the Licensing Branch of the POEA, who identified and confirmed the two Certifications issued by the POEA Licensing Branch, that "per available records of [its] Office, CARMEN RITUALO, in her personal capacity is not licensed by this Administration to recruit workers for overseas employment."40 As to the second element, it must be shown that the accused gave the private complainant the distinct impression that he/she had the power or ability to send the private complainant abroad for work, such that the latter was convinced to part with his/her money in order to be employed.41 Thus, to be engaged in illegal recruitment, it is plain that there must at least be a promise or an offer of employment from the person posing as a recruiter whether locally or abroad.42 In the case at bar, the second element is similarly present. As testified to by Biacora, petitioner Ritualo professed to have the ability to send him overseas to be employed as a farm worker in Australia with a monthly salary of US$700.00.43 To further wet Biacora’s appetite, petitioner Ritualo even showed him purported travel documents of other people about to depart, whose overseas employment she supposedly facilitated. That petitioner Ritualo personally assisted Biacora in the completion of the alleged requirements, i.e., securing a Letter of Request and Guarantee from the Representative of his Congressional District in Batangas to ensure the approval of Biacora’s application for an Australian Visa, even accompanying Biacora to the Australian Embassy, all clearly point to her efforts to convince Biacora that she (petitioner Ritualo) had, indeed, the ability and influence to make Biacora’s dream of overseas employment come true. The claim of petitioner Ritualo that it was Anita Seraspe who was really the recruiter and the one who profited from the subject illegal transaction holds no water. Petitioner Ritualo’s act of receiving payment from Biacora and issuing personal receipts therefor; of personally assisting Biacora to complete the "necessary" documents; of failing to present evidence to

corroborate her testimony despite several opportunities given her by the trial court; of petitioner Ritualo having been positively identified as the person who transacted with Biacora and promised the latter an overseas employment and who personally received money from Biacora, all unhesitatingly point to petitioner Ritualo as the culprit. Petitioner Ritualo next tried to impress upon this Court that she received nary a centavo from the subject illegal transaction; therefore, she should not be held liable. We reject this outright. In the first place, it has been abundantly shown that she really received the monies from Biacora. Secondly, even without consideration for her services, she still engaged in recruitment activities, since it was satisfactorily shown that she promised overseas employment to Biacora. And, more importantly, Sec. 6 of Republic Act No. 8042 does not require that the illegal recruitment be done for profit. Petitioner Ritualo boldly but vainly tried to inject reasonable doubt by complaining that the RTC and the Court of Appeals affirmed her conviction despite failure of the prosecution to present other vital witness, i.e., Biacora’s wife, who accompanied her husband to the house of petitioner Ritualo and, hence, witnessed what happened on the first meeting between the latter and Biacora. Non-presentation of said witness, according to petitioner Ritualo, raises the presumption that her testimony, if presented, would be adverse to the prosecution. The prosecution is entitled to conduct its own case and to decide what witnesses to call to support its charges.48The defense posture that the nonpresentation of the wife of Biacora constitutes suppression of evidence favorable to petitioner Ritualo is fallacious. In fact, the same line of reasoning can be used against petitioner Ritualo. If the defense felt that the testimony of Biacora’s wife would support her defense, what she could and should have done was to call her (Biacora’s wife) to the stand as her own witness. One of the constitutional rights of the accused is "to have compulsory process to secure the attendance of witnesses and the production of evidence in his behalf." And, in the same vein, since petitioner Ritualo is setting the cloak of liability on Seraspe’s shoulder, she (petitioner Ritualo) could and should have had the former subpoenaed as well. As held by this Court, the adverse presumption of suppression of evidence does not, moreover, apply where the evidence suppressed is merely corroborative or cumulative in nature.49 If presented, Biacora’s wife would merely corroborate Biacora’s account which, by itself, already detailed what occurred on the day of the parties’ first meeting at the house of petitioner Ritualo. Hence, the prosecution committed no fatal error in dispensing with the testimony of Biacora’s wife.

Finally, Biacora, the private complainant in this case, did not harbor any ill motive to testify falsely against petitioner Ritualo. The latter failed to show any animosity or ill feeling on the part of Biacora that could have motivated him to falsely accuse her of the crimes charged. It would be against human nature and experience for strangers to conspire and accuse another stranger of a most serious crime just to mollify their hurt feelings.50 The totality of the evidence in the case at bar, when scrutinized and taken together, leads to no other conclusion than that petitioner Ritualo engaged in recruiting and promising overseas employment to Felix Biacora under the above-quoted Sec. 6 of Republic Act No. 8042 vis-à-vis Article 13(b) of the Labor Code. Hence, she cannot now feign ignorance of the consequences of her unlawful acts. (1) In Criminal Case No. 01-0076, petitioner Carmen Ritualo is found GUILTY beyond reasonable doubt of the crime of Simple Illegal Recruitment, and is sentenced to suffer an indeterminate prison term of eight (8) years and one (1) day as minimum, to twelve (12) years, as maximum, and to pay a fine of P500,000.00; and (2) In Criminal Case No. 01-0077, petitioner Carmen Ritualo is also found GUILTY beyond reasonable doubt of the crime of Estafa and sentenced to suffer an indeterminate prison term of four (4) years and two (2) months of prision correccional, as minimum, to eleven (11) years and eight (8) months and twenty-one (21) days of prision mayor, as maximum. Petitioner Carmen R. Ritualo is similarly ORDERED to indemnify Felix E. Biacora the amount of P21,000.00. Costs de oficio. Letran Calamba Faculty v. NLRC | GR No. 156225 | 29 January 2008 Austria-Martinez, J FACTS: In 1992, the Letran Calamba Faculty and Employees Association filed with the NLRC a complaint against Colegio de San Juan de Letran, Calamba for collection of various monetary claims due to its members. In 1994, the Association held a strike. On January 29, 1993, respondent filed its Position Paper denying all the allegations of petitioner. On March 10, 1993, petitioner filed its Reply. Prior to the filing of the above-mentioned complaint, petitioner filed a separate complaint against the respondent for money claims with Regional Office No. IV of the Department of Labor and Employment (DOLE).

On the other hand, pending resolution of NLRC Case No. RAB-IV-10-456092-L, respondent filed with Regional Arbitration Branch No. IV of the NLRC a petition to declare as illegal a strike staged by petitioner in January 1994. Subsequently, these three cases were consolidated. The case for money claims was originally filed by petitioner with the DOLE. The Labor Arbiter dismissed the Association’s money claims, and also dismissed Letran’s petition to declare the strike illegal. The NLRC affirmed the Labor Arbiter on appeal. The CA also affirmed the NLRC. ISSUEs:

1. W/N the CA can review the factual findings and legal conclusions of the NLRC in a special civil action for certiorari.

2. W/N a teacher’s overload pay should be considered in the computation of his or her 13th month pay.

HELD: NO. The Court finds no error in the ruling of the CA that since nowhere in the petition is there any acceptable demonstration that the LA or the NLRC acted either with grave abuse of discretion or without or in excess of its jurisdiction, the appellate court has no reason to look into the correctness of the evaluation of evidence which supports the labor tribunals’ findings of fact. NO. Overload pay should be excluded in the computation of the 13th month pay of the Association’s members. The peculiarity of an overload lies in the fact that it may be performed within the normal eight-hour working day. This is the only reason why the DOLE, in its explanatory bulletin, finds it proper to include a teacher’s overload pay in the determination of his or her 13th month pay. However, the DOLE loses sight of the fact that even if it is performed within the normal eight-hour working day, an overload is still an additional or extra teaching work which is performed after the regular teaching load has been completed. Hence, any pay given as compensation for such additional work should be considered as extra and not deemed as part of the regular or basic salary RATIONALE: The appellate court’s jurisdiction to review a decision of the NLRC in a petition for certiorari is confined to issues of jurisdiction or grave abuse of discretion. An extraordinary remedy, a petition for certiorari is available only and restrictively in truly exceptional cases. The sole office of the writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction. The writ of certiorari does not include correction of the NLRC’s evaluation of the evidence or of its factual findings. Such findings are generally accorded not only respect but also finality. A party assailing such findings bears the burden of showing that the tribunal acted capriciously and whimsically or in total disregard of evidence material to the controversy, in order that the extraordinary writ of certiorari will lie.

Settled is the rule that the findings of the LA, when affirmed by the NLRC and the CA, are binding on the Supreme Court, unless patently erroneous. The Supreme Court is not a trier of facts, and this applies with greater force in labor cases. Findings of fact of administrative agencies and quasijudicial bodies, which have acquired expertise because their jurisdiction is confined to specific matters, are generally accorded not only great respect but even finality. Basic wage means all remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost of living allowances, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers. Overload vs. Overtime: Overtime work is work rendered in excess of normal working hours of eight in a day. Overload work is additional work after completing the regular workload, may be performed either within or outside eight hours in a day, and may or may not be considered overtime work. What are deemed not part of the basic salary: a. Cost of living allowances granted pursuant to PD 525 and LOI 174; b. Profit sharing payments; c. All allowances and monetary benefits which are not considered or integrated as part of the regular basic salary of the employee at the time of the promulgation of the Decree; Overtime pay, earnings, and other remunerations as provided for by PD 851’s IRR. ROMEO LAGATIC, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, CITYLAND DEVELOPMENT CORPORATION, STEPHEN ROXAS, JESUS GO, GRACE LIUSON, and ANDREW LIUSON, respondents | G.R. No. 121004 | January 28, 1998 | J. Romero NATURE Petition by certiorari FACTS - Petitioner Romeo Lagatic was employed by Cityland as a marketing specialist. He was tasked with soliciting sales for the company, with the corresponding duties of accepting call-ins, referrals, and making client calls and cold calls. Cold calls refer to the practice of prospecting for clients through the telephone directory. - In order to assess cold calls made by the sales staff, as well as to determine the results thereof, Cityland requires the submission of daily progress reports on the same. - On October 22, 1991, Cityland issued a written reprimand to petitioner for his failure to submit cold call reports for certain days of September & October 1991. This notwithstanding, petitioner again failed to submit cold

call reports for September & October 1992. Petitioner was required to explain his inaction, with a warning that further non-compliance would result in his termination from the company. In a reply, petitioner claimed that the same was an honest omission brought about by his concentration on other aspects of his job. Cityland found said excuse inadequate and suspended him for three days, with a similar warning. - Notwithstanding the aforesaid suspension and warning, petitioner again failed to submit cold call reports for February 1993. He was verbally reminded to submit the same and was even given up to February 17, 1993 to do so. Instead of complying with said directive, petitioner wrote a note, “TO HELL WITH COLD CALLS! WHO CARES?” and exhibited the same to his co-employees. - Petitioner received a memorandum requiring him to explain why Cityland should not make good its previous warning for his failure to submit cold call reports, as well as for issuing the written statement aforementioned. Petitioner sent a letter-reply alleging that his failure to submit cold call reports should not be deemed as gross insubordination. He denied any knowledge of the damaging statement, “TO HELL WITH COLD CALLS!” - Finding petitioner guilty of gross insubordination, Cityland served a notice of dismissal upon him. Petitioner filed a complaint against Cityland for illegal dismissal, illegal deduction, underpayment, overtime and rest day pay, damages and attorney’s fees. - The labor arbiter dismissed the petition for lack of merit. On appeal, the same was affirmed by the NLRC; hence the present recourse. ISSUE 1. WON respondent NLRC gravely abused its discretion in not finding that petitioner was illegally dismissed 2. WON respondent NLRC gravely abused its discretion in ruling that petitioner is not entitled to salary differentials, backwages, separation pay, overtime pay, rest day pay, unpaid commissions, moral and exemplary damages and attorney’s fees HELD 1. NO Ratio Except as provided for, or limited by, special laws, an employer is free to regulate, according to his discretion and judgment, all aspects of employment.” Employers may, thus, make reasonable rules and regulations for the government of their employees, and when employees, with knowledge of an established rule, enter the service, the rule becomes a part of the contract of employment. It is also generally recognized that company policies and regulations, unless shown to be grossly oppressive or contrary to law, are generally valid and binding on the parties and must be complied with. Reasoning - Said company policy of requiring cold calls and the concomitant reports thereon is clearly reasonable and lawful, sufficiently known to petitioner, and in connection with the duties which he had been engaged to discharge. There is, thus, just cause for his dismissal. - Based on the foregoing, we find petitioner guilty of willful disobedience. Willful disobedience requires the concurrence of at least two requisites: the

employee’s assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. - Well settled is the dictum that the twin requirements of notice and hearing constitute the elements of due process in the dismissal of employees. Thus, the employer must furnish the employee with two written notices before the termination of employment can be effected. The first apprises the employee of the particular acts or omissions for which his dismissal is sought; the second informs him of the employer’s decision to dismiss him. - The chronology of events clearly shows that petitioner was served with the required written notices. - The requirement of a hearing is complied with as long as there was an opportunity to be heard, and not necessarily that an actual hearing be conducted. Petitioner had an opportunity to be heard as he submitted a letter-reply to the charge. He, however, adduced no other evidence on his behalf. In fact, he admitted his failure to submit cold call reports, praying that the same be not considered as gross insubordination. - Denials are weak forms of defenses, particularly when they are not substantiated by clear and convincing evidence. Given the foregoing, we hold that petitioner’s constitutional right to due process has not been violated. 2. NO - There is no law which requires employers to pay commissions, and when they do so, there is no law which prescribes a method for computing commissions. The determination of the amount of commissions is the result of collective bargaining negotiations, individual employment contracts or established employer practice. Since the formula for the computation of commissions was presented to and accepted by petitioner, such prescribed formula is in order. - Petitioner failed to show his entitlement to overtime and rest day pay due, to the lack of sufficient evidence as to the number of days and hours when he rendered overtime and rest day work. Entitlement to overtime pay must first be established by proof that said overtime work was actually performed, before an employee may avail of said benefit. - Lastly, with the finding that petitioner’s dismissal was for a just and valid cause, his claims for moral and exemplary damages, as well as attorney’s fees, must fail. Disposition AFFIRMED. G.R. No. 122240. November 18, 1999 | Legahi v. NLRC | KAPUNAN, J.: Facts: In a complaint filed with the Philippine Overseas Employment Administration (POEA), Cristonico B. Legahi alleged that he was hired as Chief Cook aboard M/V Federal Nord by the Northsouth Ship Management (PTE), Ltd., Singapore and represented by its local agent United Philippine Lines, Inc. (UPLI).

The contract of employment stipulated that his term of employment was for ten months beginning October 9, 1992 with a basic monthly salary of US$450.00 with 44 hours weekly as minimum number of hours worked with a fixed overtime pay (OT) of $185.00 and three (3) days leave with pay every month. Sometime in November, 1992 petitioner was asked by the Shipmaster to prepare a victualling cost statement for the month of October, 1992. After learning that such preparation involves mathematical skills, as it would require estimation of food cost, value of stocks, etc. he intimated that he did not know how to do such work as it was not part of the duties of a chief cook. He was told that it was not a difficult job and that he only needed to copy the previous forms. After much reluctance, petitioner nonetheless prepared the statement in deference to the Shipmaster. In December, petitioner was requested again to prepare the victualling cost statement for the month of November. He obeyed since he was afraid he would earn the ire of his superiors if he refused.

left the vessel without permission and did not perform his job that day. On January 14, 1993, a committee was formed to hear the case of petitioner. Petitioner remained silent so the committee decided to send him home. Contrary to petitioners allegation, it was not the Philippine Consulate, but the shipowners agent, Navios Ship Agencies, which arranged his repatriation. The respondent noticed petitioner to be very homesick and surmised that he deliberately committed the offenses just so he could be sent home. Upon his return, petitioner did not even report to the local representative UPLI implying that he had no cause of action against them. Petitioner was terminated for just cause and must, therefore, reimburse private respondent for the cost of repatriation. On April 6, 1994, the POEA promulgated a decision finding that there was just cause for petitioners dismissal. On appeal to the National Labor Relations Commission (NLRC), the Commission affirmed in toto the POEA decision. Issue: The validity of petitioner’s dismissal from his employment

Sometime in January, 1993, the Shipmaster asked petitioner to do the victualling cost statement for December which he complied. On January 6, 1993, the Shipmaster requested the petitioner to prepare a corrected victualling statement for the same month of December. Petitioner asked the Shipmaster if he could defer the correction as he was busy doing his chores. The response certainly did not sit well with the Shipmaster so he was called for a meeting which petitioner did not attend. On January 14, 1993, a committee was formed headed by the Shipmaster himself with the Chief Officer, Chief Engineer and Bosun as members. In this meeting, the Shipmaster read to him the offenses he committed on board. He was asked to answer the charges but petitioner opted to remain silent. Thereafter, petitioner was informed that he was dismissed. The next day, petitioner was repatriated to the Philippine through the assistance of the Philippine Consulate. Upon arrival or on February 16, 1993, petitioner filed with the POEA a complaint for illegal dismissal against private respondents. He sought the payment of his salary corresponding to the unexpired portion of his contract, unpaid overtime pay, leave pay, salary differential and damages. In answer to the complaint, private respondent stated that prior to petitioners deployment, he was asked if he knew how to prepare the victualling cost statement which he answered yes. On January 6, 1993, petitioner was asked to prepare the statement. He refused and even arrogantly replied that the Shipmaster should let some other officer do the job since he only came to the ship to cook. On January 13, 1993, petitioner

Held: To constitute a valid dismissal from employment, two (2) requisites must concur: (a) the dismissal must be for any of the causes provided in Article 282 of the Labor Code, and (b) the employee must be accorded due process, the elements of which are notice and the opportunity to be heard and to defend himself. Procedural due process requires that the employee must be apprised of the charges against him. He must be given reasonable time to answer the charges, allowed ample opportunity to be heard and defend himself, and assisted by a representative if the employee so desires. Two written notices are required before termination of employment can be legally effected. They are: (1) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought, and (2) the subsequent notice which informs the employee of the employers decision to dismiss him; not to mention the opportunity to answer and rebut the charges against him, in between such notices. In the case at bar, the evidence on record belies private respondents claim that petitioner was afforded due process. It is rather apparent that as early as January 6, 1993, the employer had already decided to dismiss petitioner and sent home for his alleged refusal to obey the orders of his superiors. On January 14, 1993, the committee read to petitioner his alleged offenses which were his refusal to take orders from his superior on January 6 and his leaving the vessel without permission on January 13. When petitioner remained silent, the committee informed him that he was dismissed. He was sent home that same day. Petitioner was not given reasonable time to answer the charges hurled against him or to defend himself. The notice apprising him of the charges and the notice of dismissal were done in one morning all in the January 14 committee

hearing. The submission that the entry in the logbook made on January 6 which stated that for petitioner’s refusal to take orders from the master of the ship he will be sent home in first possible port was sufficient compliance of the first notice requirement is not well-taken. This is not the kind of notice that satisfies due process contemplated by law. On the substantive issue, we find no just cause for petitioner’s dismissal. According to the POEA, petitioner was found guilty for insubordination for his refusal to obey the order of the master to prepare the victual statement on January 6, 1993,[6 which was presumably for the month of January. The NLRC, which simply adopted in toto the findings of the POEA, concluded that complainant refused albeit in a bad manner the request of the Shipmaster to prepare a correct victualling cost statement for the month of December. Based on the POEA findings, petitioner was dismissed because of his refusal to prepare the victualling statement for the month of January, 1993. The facts as found by the POEA are all muddled up. On the other hand, the NLRCs conclusion that petitioner refused to correct the victualling statement for the month of December as ordered to, was also not sufficient basis for his dismissal. There is no doubt that petitioner had complied with his superiors orders to prepare the statement for December. It was only the correction of the December statement that he requested to defer which the Shipmaster took as a downright refusal to make and considered such act as a serious and gross insubordination. For willful disobedience to be considered as just cause for dismissal, the employees conduct must be willful or intentional, the willfulness being characterized by a wrongful and perverse attitude and the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he has been engaged to discharge. In the instant case, it was actually not petitioner’s duty to prepare the victualling statement. The allegation that this was part of his duty as chief cook and the fact that he was aware of such duty when he was interviewed for the post is only self-serving and without basis. The employment contract does not mention anything that this was part of his duty as chief cook. Even assuming that petitioner refused to obey the order of his superior to prepare a corrected victualling cost statement for December, although he maintained that he just asked for time to do it, as he was then busy performing his usual duty, which we believe to be the case, his refusal cannot be considered as one being characterized by a wrongful and perverse attitude. From the beginning, petitioner already intimated that he did not know how to accomplish the victual cost statement since it entailed some mathematical skills which he admittedly did not have. Petitioners dismissal without a valid cause constitute a breach of contract. Consequently, he should only be paid the unexpired portion of his employment contract. In the same vein, the claim for the days leave pay

for the unexpired portion of the contract is unwarranted since the same is given during the actual service of the seamen. The claim for moral and exemplary damages are deleted for lack of sufficient basis. Considering that petitioner was forced to litigate, we hold that the amount of P10,000.00 is a reasonable and fair compensation for the legal services rendered by counsel. The petition is GRANTED. G.R. No. 169434, March 28, 2008 | Dacut v. CA |

QUISUMBING, J.

Facts: Petitioners Lazaro V. Dacut, Cesario G. Cajote, Romerlo F. Tungala, Lowel Z. Zubista, and Orlando P. Taboy were crew members of the LCT "BASILISA", an inter-island cargo vessel owned by private respondent Sta. Clara International Transport and Equipment Corporation. On November 29, 1998, Dacut discovered a hole in the vessel's engine room. The company had the hole patched up with a piece of iron and cement. Despite the repair, Dacut and Tungala resigned in July 1999 due to the vessel's alleged unseaworthiness. On the other hand, Cajote went on leave from April 12-28, 1999 to undergo eye treatment. Since then, he has incurred several unauthorized absences. Fearing that he will be charged as Absent Without Leave (AWOL), Cajote resigned in June 1999. On September 22, 1999, petitioners filed a complaint for constructive dismissal amounting to illegal dismissal (except for Zubista and Taboy); underpayment of wages, special and regular holidays; non-payment of rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay; actual, moral and exemplary damages; and litigation costs and attorney's fees. Dacut and Tungala claimed that they resigned after Reynalyn G. Orlina, the secretary of the Personnel Manager, told them that they will be paid their separation pay if they voluntarily resigned. They also resigned because the vessel has become unseaworthy after the company refused to have it repaired properly. Meanwhile, Cajote alleged that he resigned because the company hired a replacement while he was still on leave. When he returned, the Operations Manager told him that he will be paid his separation pay if he voluntarily resigned; otherwise, he would be charged for being AWOL. On the other hand, Zubista claimed that his wage was below the minimum set by the Regional Tripartite Wages and Productivity Board. Finally, petitioners alleged that they were not paid their rest days, sick and vacation leaves, night shift differentials, subsistence allowance, and fixed overtime pay. After the Labor Arbiter declared the case submitted for decision, the company filed its reply to petitioners' position paper. It countered that Dacut and Tungala voluntarily resigned due to the vessel's alleged unseaworthiness while Cajote resigned to avoid being charged as AWOL. It

also claimed that petitioners' monetary claims had no basis. On August 2, 2000, the Labor Arbiter dismissed petitioners' complaint. The Labor Arbiter ruled that there was sufficient evidence to prove that the vessel was seaworthy. The Labor Arbiter noted that except for the holiday pay, accrued sick and vacation leaves, and wage differential, petitioners failed to substantiate their monetary claims. Petitioners appealed to the NLRC alleging that the Labor Arbiter erred: (1) in entertaining the company's reply after the case had been submitted for decision; (2) in not finding that Dacut, Cajote and Tungala were constructively dismissed; (3) in not finding that petitioners were entitled to their monetary claims; and (4) in not finding that petitioners were entitled to actual, moral and exemplary damages as well as litigation costs and attorney's fees. At this point, Dacut and Tungala further contended that they resigned because they were being harassed by the company due to a complaint for violation of labor standards they had filed earlier against it. On May 20, 2002, the NLRC affirmed the Labor Arbiter's decision. Issues: WON petitioners voluntarily resigned from employment and WON they are entitled to money claims Held: The fact that the Labor Arbiter admitted the company's reply after the case had been submitted for decision did not make the proceedings before him irregular. Petitioners were given adequate opportunity in the NLRC and the Court of Appeals to rebut the company's evidence against them. A petition for review on certiorari shall only raise questions of law considering that the findings of fact of the Court of Appeals are, as a general rule, conclusive upon and binding on this Court. This doctrine applies with greater force in labor cases where the factual findings of the labor tribunals are affirmed by the Court of Appeals. The reason is that labor officials are deemed to have acquired expertise in matters within their jurisdiction and therefore, their factual findings are generally accorded not only respect but also finality. Here, the Labor Arbiter, the NLRC, and the Court of Appeals were unanimous in finding that the primary reason why Dacut and Tungala resigned was the vessel's alleged unseaworthiness as borne by their pleadings before the Labor Arbiter. Dacut and Tungala never mentioned that they resigned because they were being harassed by the company due to a complaint for violation of labor standards they had filed against it. This ground was alleged only before the NLRC and not a single act or incident was cited to prove this point. Even the alleged assurance by Orlina, that they would be given separation pay, served merely as a secondary reason why they resigned. In fact, we doubt that such assurance was even made considering that as secretary of the Personnel Manager, it was not shown under what authority Orlina acted when she told Dacut and Tungala to resign.

Likewise deserving scant consideration is Cajote's claim that the Operations Manager told him that he will be paid separation pay if he resigned voluntarily; otherwise, he would be charged as AWOL. Although the company already hired a replacement, Cajote admitted that he was still employed at the time he resigned. In fact, the company tried to give him another assignment but he refused it. Thus, the only reason why Cajote resigned was his long unauthorized absences which would have warranted his dismissal in any case. We find no reason to disturb all these factual findings because they are amply supported by substantial evidence. Apropos the monetary claims, there is insufficient evidence to prove petitioners' entitlement thereto. As crew members, petitioners were required to stay on board the vessel by the very nature of their duties, and it is for this reason that, in addition to their regular compensation, they are given free living quarters and subsistence allowances when required to be on board. It could not have been the purpose of our law to require their employers to give them overtime pay or night shift differential, even when they are not actually working. Thus, the correct criterion in determining whether they are entitled to overtime pay or night shift differential is not whether they were on board and cannot leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. In this case, petitioners failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to the corresponding pay. Petition is denied. SAN MIGUEL CORPORATION v. CAROLINE C. DEL ROSARIO | G.R. Nos. 168194 & 168603 | J. Ynares-Santiago Facts: Respondent was hired by the petitioner as an account specialist, allegedly as a probationary employee, but was dismissed because of a reconstruction scheme and over employment in the company. Labor arbiter (her employment exceeded six months and holding that she was illegally dismissed as there was no authorized cause to terminate her employment. The Arbiter further ruled that petitioner's failure to rebut respondent's claim that it hired additional employees after she was dismissed belie the company's alleged redundancy), NLRC (respondent is a regular employee whose termination from employment was valid but ineffectual for petitioner's failure to comply with the 30-day notice to the employee and the Department of Labor and Employment (DOLE), ) and CA ruled that she is a regular employee and was illegally dismissed thus entitled to payment for damages and back wages. Issues: (1) Whether or not respondent is a regular employee of petitioner; and (2) whether or not respondent was illegally dismissed; and (3) if so, whether or not respondent is entitled to any monetary benefit. Held:

 In termination cases, like the present controversy, the burden of

proving the circumstances that would justify the employee's dismissal rests with the employer.[18] The best proof that petitioner should have presented to prove the probationary status of respondent is her employment contract.



Having ruled that respondent is a regular employee, her termination from employment must be for a just or authorized cause, otherwise, her dismissal would be illegal.

The Court finds that petitioner was not able to discharge the burden of proving that the dismissal of respondent was valid. 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. (Emphasis, supplied) Considering that respondent was illegally dismissed, she is entitled not only to reinstatement but also to payment of full back wages, computed from the time her compensation was actually withheld from her on March 13, 2001, up to her actual reinstatement. Respondent is not, however, entitled to holiday pay because the records reveal that she is a monthly paid regular employee. Under Section 2, Rule IV, Book III of the Omnibus Rules Implementing the Labor Code, employees who are uniformly paid by the month, irrespective of the number of working days therein, shall be presumed to be paid for all the days in the month whether worked or not. Hence, the Court of Appeals correctly deleted said award. G.R. No. 144664 | March 15, 2004 | ASIAN TRANSMISSION CORPORATION, petitioner, vs. The Hon. COURT OF APPEALS | J. Carpio-Morales Facts: The Department of Labor and Employment (DOLE), through Undersecretary Cresenciano B. Trajano, issued an Explanatory Bulletin dated March 11, 1993 wherein it clarified, inter alia, that employees are entitled to 200% of their basic wage on April 9, 1993, whether unworked, which, apart from being Good Friday [and, therefore, a legal holiday], is also Araw ng Kagitingan [which is also a legal holiday]. Said bulletin was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan. Petitioner [Asian Transmission Corporation] opted to pay its daily paid employees only 100% of their basic pay on April 9, 1998. Respondent Bisig ng Asian Transmission Labor Union (BATLU) protested, saying:

ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election, which was amended by Executive Order No. 203 issued on June 30, 1987 The Court of Appeals upheld the findings of the Voluntary Arbitrator, holding that the Collective Bargaining Agreement (CBA) between petitioner and BATLU, the law governing the relations between them, clearly recognizes their intent to consider Araw ng Kagitingan and Maundy Thursday, on whatever date they may fall in any calendar year, as paid legal holidays during the effectivity of the CBA and that "[t]here is no condition, qualification or exception for any variance from the clear intent that all holidays shall be compensated." Issue: WON the CA committed grave abuse of discretion in its decision Held: Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor.7 Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance. As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. In Wellington, the issue was whether monthly-paid employees are entitled to an additional day’s pay if a holiday falls on a Sunday. This Court, in answering the issue in the negative, observed that in fixing the monthly

salary of its employees, Wellington took into account "every working day of the year including the holidays specified by law and excluding only Sunday." In the instant case, the issue is whether daily-paid employees are entitled to be paid for two regular holidays which fall on the same day. Art. 4 of the Labor Code provides that all doubts in the implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. G.R. No. L-65482 December 1, 1987 | JOSE RIZAL COLLEGE, petitioner vs. NATIONAL LABOR RELATIONS COMMISSION AND NATIONAL ALLIANCE OF TEACHERS/OFFICE WORKERS, respondents | J. Paras Facts: Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule. Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977. Issue: The sole issue in this case is whether or not the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay. Held: Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non- profit institution and that its hourly paid faculty members are paid on a "contract" basis because they are required to hold classes for a particular number of hours. if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Regular holidays specified as such by law are known to both school and faculty members as no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts.

On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays. Declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. PREMISES CONSIDERED, the decision of respondent National Labor Relations Commission is hereby set aside, and a new one is hereby RENDERED: (a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations; (b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions. JOSE RIZAL COLLEGE V NLRC | 156 SCRA 27 | PARAS; 1987 NATURE - Petition for certiorari with preliminary injunction to review the decision of the National Labor Relations Commission FACTS - Petitioner is a non-stock, non-profit educational institution duly organized and existing under the laws of the Philippines. It has three groups of employees categorized as follows: (a) personnel on monthly basis, who receive their monthly salary uniformly throughout the year, irrespective of the actual number of working days in a month without deduction for holidays; (b) personnel on daily basis who are paid on actual days worked and they receive unworked holiday pay and (c) collegiate faculty who are paid on the basis of student contract hour. Before the start of the semester they sign contracts with the college undertaking to meet their classes as per schedule. - Unable to receive their corresponding holiday pay, as claimed, from 1975 to 1977, private respondent National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty and personnel of Jose Rizal College filed with the Ministry of Labor a complaint against the college for said alleged non-payment of holiday pay - After the parties had submitted their respective position papers, the Labor Arbiter rendered a decision on February 5, 1979:

1. The faculty and personnel of the respondent Jose Rizal College who are paid their salary by the month uniformly in a school year, irrespective of the number of working days in a month, without deduction for holidays, are presumed to be already paid the 10 paid legal holidays and are no longer entitled to separate payment for the said regular holidays; 2. The personnel of the respondent Jose Rizal College who are paid their wages daily are entitled to be paid the 10 unworked regular holidays according to the pertinent provisions of the Rules and Regulations Implementing the Labor Code; 3. Collegiate faculty of the respondent Jose Rizal College who by contract are paid compensation per student contract hour are not entitled to unworked regular holiday pay considering that these regular holidays have been excluded in the programming of the student contact hours. - On appeal, respondent National Labor Relations Commission in a decision promulgated on June 2, 1982, modified the decision appealed from, in the sense that teaching personnel paid by the hour are declared to be entitled to holiday pay ISSUE WON the school faculty who according to their contracts are paid per lecture hour are entitled to unworked holiday pay HELD NO (for regular holidays)/YES(for special holidays) - Labor Arbiter sustains the view that said instructors and professors are not entitled to holiday pay, his decision was modified by the National Labor Relations Commission holding the contrary. Petitioner maintains the position among others, that it is not covered by Book V of the Labor Code on Labor Relations considering that it is a non-profit institution and that its hourly paid faculty members are paid on a "contract" basis because they are required to hold classes for a particular number of hours. In the programming of these student contract hours, legal holidays are excluded and labelled in the schedule as "no class day." On the other hand, if a regular week day is declared a holiday, the school calendar is extended to compensate for that day. Thus petitioner argues that the advent of any of the legal holidays within the semester will not affect the faculty's salary because this day is not included in their schedule while the calendar is extended to compensate for special holidays. Thus the programmed number of lecture hours is not diminished. - The Solicitor General on the other hand, argues that under Article 94 of the Labor Code, holiday pay applies to all employees except those in retail and service establishments. To deprive therefore employees paid at an hourly rate of unworked holiday pay is contrary to the policy considerations underlying such presidential enactment, apart from the constitutional mandate to grant greater rights to labor. And under Article 94 of the Labor Code, the petitioner, although a nonprofit institution is under obligation to give pay even on unworked regular holidays to hourly paid faculty members subject to the terms and conditions provided for therein. - The Court held that the aforementioned implementing rule is not justified by the provisions of the law which after all is silent with respect to faculty

members paid by the hour who because of their teaching contracts are obliged to work and consent to be paid only for work actually done. - On the other hand, both the law and the Implementing Rules governing holiday pay are silent as to payment on Special Public Holidays. - It is readily apparent that the declared purpose of the holiday pay which is the prevention of diminution of the monthly income of the employees on account of work interruptions is defeated when a regular class day is cancelled on account of a special public holiday and class hours are held on another working day to make up for time lost in the school calendar. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. Disposition Decisions set aside. New decision rendered: (a) exempting petitioner from paying hourly paid faculty members their pay for regular holidays, whether the same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations; (b) but ordering petitioner to pay said faculty members their regular hourly rate on days declared as special holidays or for some reason classes are called off or shortened for the hours they are supposed to have taught, whether extensions of class days be ordered or not; in case of extensions said faculty members shall likewise be paid their hourly rates should they teach during said extensions. SAN MIGUEL V CA | 375 SCRA 311 | KAPUNAN; January 30, 2002 NATURE Petition for a review of the decision of the Court of Appeals FACTS - 17 October 1992: the Department of Labor and Employment (DOLE), Iligan District Office, conducted a routine inspection in the premises of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City. In the course of the inspection, it was discovered that there was underpayment of regular Muslim holiday pay to its employees. - SMC failed to submit proof that it was paying regular Muslim holiday pay to its employees. Alan M. Macaraya, Director IV of DOLE Iligan District Office issued a compliance order directing SMC to consider Muslim holidays as regular holidays and to pay both its Muslim and non-Muslim employees holiday pay within thirty (30) days from the receipt of the order. ISSUES 1. WON CA erred in granting non-Muslim employees Muslim holiday pay 2. WON Macaraya and Español have jurisdiction in issuing compliance orders over said labor standard case

HELD 1. NO Ratio Wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the worker’s faith or religion. Reasoning - Muslim holidays are provided under Articles 169 and 170, Title I, Book V, of Presidential Decree No. 1083, otherwise known as the Code of Muslim Personal Laws. The aforementioned provisions should be read in conjunction with Art. 94 of the Labor Code: Art. 94. Right to holiday pay: (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; x x x. - There should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays. Petitioner asserts that Article 3(3) of Presidential Decree No. 1083 provides that “(t)he provisions of this Code shall be applicable only to Muslims x x x.” However, said article also declares that “x x x nothing herein shall be construed to operate to the prejudice of a non-Muslim.” 1999 Handbook on Workers’ Statutory Benefits: “Considering that all private corporations, offices, agencies, and entities or establishments operating within the designated Muslim provinces and cities are required to observe Muslim holidays, both Muslim and Christians working within the Muslim areas may not report for work on the days designated by law as Muslim holidays.” - As regards the allegation that the issue on Muslim holiday pay was already resolved in Napoleon E. Fernan vs. San Miguel Corporation Beer Division and Leopoldo Zaldarriaga, the Court notes that the case was primarily for illegal dismissal and the claim for benefits was only incidental to the main case. 2. YES - Regional Director Macaraya acted as the duly authorized representative of the Secretary of Labor and Employment and it was within his power to issue the compliance order to SMC. Reasoning - Article 128. Visitorial and enforcement power. (b) Notwithstanding the provisions of Article 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of the inspection. - Petitioner merely contends that its non-Muslim employees are not entitled to Muslim holiday pay. The issue could be resolved even without

documentary proofs. In any case, there was no indication that Regional Director Macaraya failed to consider any documentary proof presented by SMC in the course of the inspection. Disposition The petition is dismissed. WELLINGTON INVESTMENT V TRAJANO | 245 SCRA 561 | NARVASA; July 3, 1995 NATURE Special Civil Action for Certiorari FACTS - A labor Enforcement Officer conducted a routine inspection of the Wellington Flour Mills, owned and operated by Wellington Investment and Manufacturing Corporation, and reported the non-payment of regular holidays falling on a Sunday for monthly-paid employees. A copy of the report was explained to and received by Wellington’s personnel manager. - Wellington sought reconsideration and argued that "the monthly salary of the company's monthly-salaried employees already includes holiday pay for all regular holidays and hence there is no legal basis for the finding of alleged non-payment of regular holidays falling on a Sunday." In a position paper subsequently submitted to the Regional Director, it asserted that it pays its monthly-paid employees a fixed monthly compensation "using the 314 factor which undeniably covers and already includes payment for all the working days in a month as well as all the 10 unworked regular holidays within a year." - July 28, 1992: the Regional Director ruled that "when a regular holiday falls on a Sunday, an extra or additional working day is created and the employer has the obligation to pay the employees for the extra day except the last Sunday of August since the payment for the said holiday is already included in the 314 factor," and accordingly directed Wellington to pay its employees compensation corresponding 4 extra working days. - September 22: the Undersecretary affirmed the challenged order, holding that "the divisor being used by Wellington does not reliably reflect the actual working days in a year," and consequently commanded Wellington to pay its employees the "six additional working days resulting from regular holidays falling on Sundays in 1988, 1989 and 1990." He said that whenever a regular holiday coincides with a Sunday, an additional working day is created and left unpaid. In other words, while the said divisor may be utilized as proof evidencing payment of 302 working days, 2 special days and the ten regular holidays in a calendar year, the same does not cover or include payment of additional working days created as a result of some regular holidays falling on Sundays. ISSUE WON a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holiday pay, whenever a regular holiday falls on a Sunday HELD NO

- Wellington simply deducts 51 Sundays from the 365 days normally comprising a year and used the difference, 314, as basis for determining the monthly salary. The monthly salary thus fixed actually covers payment for 314 days of the year, including regular and special holidays, as well as days when no work is done by reason of fortuitous cause, as above specified, or causes not attributable to the employees. - The monthly salary in Wellington for all 365 days of a year. The respondents' theory would make each of the years in question, a year of 368 days. Pursuant to this theory, no employer opting to pay his employees by the month would have any definite basis to determine the number of days in a year for which compensation should be given to his work force. - There is no provision of law requiring any employer to make such adjustments in the monthly salary rate set by him to take account of legal holidays falling on Sundays in a given year, or, contrary to the legal provisions bearing on the point, otherwise to reckon a year at more than 365 days. What the law requires of employers opting to pay by the month is to assure that "the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve," and to pay that salary "for all days in the month whether worked or not," and "irrespective of the number of working days therein." That salary is due and payable regardless of the declaration of any special holiday in the entire country or a particular place therein, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or other natural calamities), or cause not imputable to the worker. The legal provisions governing monthly compensation are evidently intended precisely to avoid re-computations and alterations in salary on account of the contingencies just mentioned, which, by the way, are routinely made between employer and employees when the wages are paid on daily basis. Disposition The orders complained of, namely: that of the respondent Undersecretary dated September 22, 1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the proceeding against petitioner DISMISSED. G.R. No. 114698 July 3, 1995, WELLINGTON INVESTMENT AND MANUFACTURING CORPORATION, petitioner, vs.CRESENCIANO B. TRAJANO, Under-Secretary of Labor and Employment, ELMER ABADILLA, and 34 others, respondents, (Holiday and Holiday Pays) Facts:The case arose from a routine inspection conducted by a Labor Enforcement Officer on August 6, 1991 of the Wellington Flour Mills, an establishment owned and operated by petitioner Wellington Investment and Manufacturing Corporation (hereafter, simply Wellington). The officer thereafter drew up a report, a copy of which was "explained to and received by" Wellington's personnel manager, in which he set forth his finding of "non-payment of regular holidays falling on a Sunday for monthly-paid employees." Wellington sought reconsideration of the Labor Inspector's report, by letter

dated August 10, 1991. It argued that "the monthly salary of the company's monthly-salaried employees already includes holiday pay for all regular holidays . . . (and hence) there is no legal basis for the finding of alleged non-payment of regular holidays falling on a Sunday." It expounded on this thesis in a position paper subsequently submitted to the Regional Director, asserting that it pays its monthly-paid employees a fixed monthly compensation "using the 314 factor which undeniably covers and already includes payment for all the working days in a month as well as all the 10 unworked regular holidays within a year." Wellington's arguments failed to persuade the Regional Director who, in an Order issued on July 28, 1992, ruled that "when a regular holiday falls on a Sunday, an extra or additional working day is created and the employer has the obligation to pay the employees for the extra day except the last Sunday of August since the payment for the said holiday is already included in the 314 factor," and accordingly directed Wellington to pay its employees compensation corresponding to four (4) extra working days. Issue: Whether or not a monthly-paid employee, receiving a fixed monthly compensation, is entitled to an additional pay aside from his usual holiday pay, whenever a regular holiday falls on a Sunday. Ruling: Every worker should, according to the Labor Code, "be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;" this, of course, even if the worker does no work on these holidays. The regular holidays include: "New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth of December, and the day designated by law for holding a general election (or national referendum or plebiscite). Particularly as regards employees "who are uniformly paid by the month, "the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve." 12 This monthly salary shall serve as compensation "for all days in the month whether worked or not," and "irrespective of the number of working days therein." 13 In other words, whether the month is of thirty (30) or thirty-one (31) days' duration, or twenty-eight (28) or twenty-nine (29) (as in February), the employee is entitled to receive the entire monthly salary. So, too, in the event of the declaration of any special holiday, or any fortuitous cause precluding work on any particular day or days (such as transportation strikes, riots, or typhoons or other natural calamities), the employee is entitled to the salary for the entire month and the employer has no right to deduct the proportionate amount corresponding to the days when no work was done. The monthly compensation is evidently intended precisely to avoid computations and adjustments resulting from the contingencies just mentioned which are routinely made in the case of workers paid on daily basis.

WHEREFORE, the orders complained of, namely: that of the respondent Undersecretary dated September 22, 1993, and that of the Regional Director dated July 30, 1992, are NULLIFIED AND SET ASIDE, and the proceeding against petitioner DISMISSED

MAYON HOTEL & RESTAURANT vs. ROLANDO ADANA, et al. G.R. No. 157634, May 16, 2005

FACTS: Petitioner Mayon Hotel & Restaurant (MHR) hired herein 16 respondents as employees in its business in Legaspi City. Its operation was suspended on March 31, 1997 due to the expiration and non-renewal of the lease contract for the space it rented. While waiting for the completion of the construction of its new site, MHR continued its operation in another site with 9 of the 16 employees. When the new site constructed and MHR resumed its business operation, none of the 16 employees was recalled to work. MHR alleged business losses as the reason for not reinstating the respondents. On various dates, respondents filed complaints for underpayment of wages, money claims and illegal dismissal.

ISSUES:1. Whether or not respondents were illegally dismissed by petitioner; 2. Whether or not respondents are entitled to their money claims due to underpayment of wages, and nonpayment of holiday pay, rest day premium, SILP, COLA, overtime pay, and night shift differential pay.

HELD: 1. Illegal Dismissal: claim for separation pay

While we recognize the right of the employer to terminate the services of an employee for a just or authorized cause, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of fair play. And in termination disputes, the burden of proof is always on the employer to prove that the dismissal was for a just or authorized cause. Where there is no showing of a clear, valid and legal cause for termination of employment, the law considers the case a matter of illegal dismissal. If doubts exist between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter — the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the former’s favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. 2. Money claims The Supreme Court reinstated the award of monetary claims granted by the Labor Arbiter. The cost of meals and snacks purportedly provided to respondents cannot be deducted as part of respondents’ minimum wage. As stated in the Labor Arbiter’s decision. Even granting that meals and snacks were provided and indeed constituted facilities, such facilities could not be deducted without compliance with certain legal requirements. As stated in Mabeza v. NLRC, the employer simply cannot deduct the value from the employee’s wages without satisfying the following: (a) proof that such facilities are customarily furnished by the trade; (b) the provision of deductible facilities is voluntarily accepted in writing by the employee; and (c) the facilities are charged at fair and reasonable value. The law is clear that mere availment is not sufficient to allow deductions from employees’ wages.

Since April 1997 until the time the Labor Arbiter rendered its decision in July 2000, or more than three (3) years after the supposed “temporary” lay-off, the employment of all the respondents with petitioner had ceased, notwithstanding that the new premises had been completed and the same resumed its operation. This is clearly dismissal – or the permanent severance or complete separation of the worker from the service on the initiative of the employer regardless of the reasons therefor.

As for petitioners repeated invocation of serious business losses, suffice to say that this is not a defense to payment of labor standard benefits. The employer cannot exempt himself from liability to pay minimum wages because of poor financial condition of the company. The payment of minimum wages is not dependent on the employer’s ability to pay.

Article 286 of the Labor Code is clear — there is termination of employment when an otherwise bona fide suspension of work exceeds six (6) months. The cessation of employment for more than six months was patent and the employer has the burden of proving that the termination was for a just or authorized cause.

Conclusion: There is no denying that the actuations of petitioners in this case have been reprehensible. They have terminated the respondents’ employment in an underhanded manner, and have used and abused the quasi-judicial and judicial processes to resist payment of their employees’ rightful claims, thereby protracting this case and causing the unnecessary

clogging of dockets of the Court. They have also forced respondents to unnecessary hardship and financial expense. Indeed, the circumstances of this case would have called for exemplary damages, as the dismissal was effected in a wanton, oppressive or malevolent manner,[95] and public policy requires that these acts must be suppressed and discouraged.[96] Nevertheless, we cannot agree with the Labor Arbiter in granting exemplary damages of P10,000.00 each to all respondents. While it is true that other forms of damages under the Civil Code may be awarded to illegally dismissed employees,[97] any award of moral damages by the Labor Arbiter cannot be based on the Labor Code but should be grounded on the Civil Code.[98] And the law is clear that exemplary damages can only be awarded if plaintiff shows proof that he is entitled to moral, temperate or compensatory damages.[99] As only respondents Loveres, Guades, Macandog, Llarena, Nicerio, Atractivo and Broñola specifically claimed damages from petitioners, then only they are entitled to exemplary damage. Finally, we rule that attorney’s fees in the amount to P10,000.00 should be granted to each respondent. It is settled that in actions for recovery of wages or where an employee was forced to litigate and incur expenses to protect his rights and interest, he is entitled to an award of attorney's fees.[100] This case undoubtedly falls within this rule. The petition is hereby DENIED. The Decision of January 17, 2003 of the Court of Appeals in CA-G.R. SP No. 68642 upholding the Joint Decision of July 14, 2000 of the Labor Arbiter in RAB V Case Nos. 04-00079-97 and 04-00080-97 is AFFIRMED, with the following MODIFICATIONS: (1) Granting separation pay of one-half (1/2) month for every year of service to respondents Loveres, Macandog and Llarena; (2) Granting retirement pay for respondents Guades, Nicerio, and Alamares; (3) Removing the deductions for food facility from the amounts due to all respondents; (4) Awarding moral damages of P20,000.00 each for respondents Loveres, Macandog, Llarena, Guades, Nicerio, Atractivo, and Broñola; (5) Deleting the award of exemplary damages of P10,000.00 from all respondents except Loveres, Macandog, Llarena, Guades, Nicerio, Atractivo, and Broñola; and (6) Granting attorney’s fees of P10,000.00 each to all respondents. The case is REMANDED to the Labor Arbiter for the RECOMPUTATION of the total monetary benefits awarded and due to the employees concerned in accordance with the decision. The Labor Arbiter is ORDERED to submit his compliance thereon within thirty (30) days from notice of this decision, with copies furnished to the parties. G.R. No. 156367: AUTO BUS TRANSPORT SYSTEMS, INC. vs ANTONIO BAUTISTA, 16 May 2005 (Service Incentive Leave Pay)

FACTS: Antonio Bautista was employed by Auto Bus Transport Systems, Inc. in May 1995. He was assigned to the Isabela-Manila route and he was paid by commission (7% of gross income per travel for twice a month). In January 2000, while he was driving his bus he bumped another bus owned by Auto Bus. He claimed that he bumped the he accidentally bumped the bus as he was so tired and that he has not slept for more than 24 hours because Auto Bus required him to return to Isabela immediately after arriving at Manila. Damages were computed and 30% or P75,551.50 of it was being charged to Bautista. Bautista refused payment. Auto Bus terminated Bautista after due hearing as part of Auto Bus’ management prerogative. Bautista sued Auto Bus for Illegal Dismissal. The Labor Arbiter Monroe Tabingan dismissed Bautista’s petition but ruled that Bautista is entitled to P78,1117.87 13th month pay payments and P13,788.05 for his unpaid service incentive leave pay. The case was appealed before the National Labor Relations Commission. NLRC modified the LA’s ruling. It deleted the award for 13th Month pay. The court of Appeals affirmed the NLRC. Auto Bus averred that Bautista is a commissioned employee and if that is not reason enough that Bautista is also a field personnel hence he is not entitled to a service incentive leave. They invoke: Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE: (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. Book III, Rule V: SERVICE INCENTIVE LEAVE SECTION 1. Coverage. ‘ This rule shall apply to all employees except: (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof; . . . ISSUE: Whether or not Bautista is entitled to Service Incentive Leave. If he is, Whether or not the three (3)-year prescriptive period provided under Article 291 of the Labor Code, as amended, is applicable to respondent’s claim of service incentive leave pay. HELD: Yes, Bautista is entitled to Service Incentive Leave. The Supreme Court emphasized that it does not mean that just because an employee is paid on commission basis he is already barred to receive service incentive leave pay.

The question actually boils down to whether or not Bautista is a field employee. According to Article 82 of the Labor Code, ‘field personnel shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. As a general rule, field personnel are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact that they are performing work away from the principal office of the employee. Certainly, Bautista is not a field employee. He has a specific route to traverse as a bus driver and that is a specific place that he needs to be at work. There are inspectors hired by Auto Bus to constantly check him. There are inspectors in bus stops who inspects the passengers, the punched tickets, and the driver. Therefore he is definitely supervised though he is away from the Auto Bus main office. On the other hand, the 3 year prescriptive period ran but Bautista was able to file his suit in time before the prescriptive period expired. It was only upon his filing of a complaint for illegal dismissal, one month from the time of his dismissal, that Bautista demanded from his former employer commutation of his accumulated leave credits. His cause of action to claim the payment of his accumulated service incentive leave thus accrued from the time when his employer dismissed him and failed to pay his accumulated leave credits. Therefore, the prescriptive period with respect to his claim for service incentive leave pay only commenced from the time the employer failed to compensate his accumulated service incentive leave pay at the time of his dismissal. Since Bautista had filed his money claim after only one month from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided for by Article 291 of the Labor Code. Definition of Service Incentive Leave: Service incentive leave is a right which accrues to every employee who has served within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year. It is also commutable to its money equivalent if not used or exhausted at the

end of the year. In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value. JPL MARKETING PROMOTIONS, Petitioner v. AUSTRIA-MARTINEZ, CALLEJO, SR.,TINGA, and COURT OF APPEALS, NATIONAL CHICONAZARIO, JJ. LABOR RELATIONS COMMISSION, NOEL GONZALES, RAMON ABESA III and FAUSTINO ANINIPOT, Respondents. July 8, 2005.

FACTS: JPL Marketing and Promotions (hereinafter referred to as 'JPL') is a domestic corporation engaged in the business of recruitment and placement of workers. On the other hand, private respondents Noel Gonzales, Ramon Abesa III and Faustino Aninipot were employed by JPL as merchandisers on separate dates and assigned at different establishments in Naga City and Daet, Camarines Norte as attendants to the display of California Marketing Corporation (CMC), one of petitioner's clients.

On 13 August 1996, JPL notified private respondents that CMC would stop its direct merchandising activity in the Bicol Region, Isabela, and Cagayan Valley effective 15 August 1996.[3] They were advised to wait for further notice as they would be transferred to other clients. However, on 17 October 1996,[4] private respondents Abesa and Gonzales filed before the National Labor Relations Commission Regional Arbitration Branch (NLRC) Sub V complaints for illegal dismissal, praying for separation pay, 13th month pay, service incentive leave pay and payment for moral damages.[5] Aninipot filed a similar case thereafter.

After the submission of pertinent pleadings by all of the parties and after some clarificatory hearings, the complaints were consolidated and submitted for resolution. Executive Labor Arbiter Gelacio L. Rivera, Jr. dismissed the complaints for lack of merit.[6] The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store where they were originally assigned by JPL even before the lapse of the six (6)month period given by law to JPL to provide private respondents a new assignment. Thus, they may be considered to have unilaterally severed their relation with JPL, and cannot charge JPL with illegal dismissal.[7]The Labor Arbiter held that it was incumbent upon private respondents to wait until they were reassigned by JPL, and if after six months they were not reassigned, they can file an action for separation pay but not for illegal dismissal.[8] The claims for 13th month pay and service incentive leave pay was also denied since private respondents were paid way above the applicable minimum wage during their employment.[9]

Private respondents appealed to the NLRC-agreed. JPL appealed-CA dismissed petition.

ISSUE: whether or not private respondents are entitled to separation pay, 13th month pay and service incentive leave pay, and granting that they are so entitled, what should be the reckoning point for computing said awards.

HELD: Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices; (b) redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. However, separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character, but only when he was illegally dismissed.[32] In addition, Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor Code provides for the payment of separation pay to an employee entitled to reinstatement but the establishment where he is to be reinstated has closed or has ceased operations or his present position no longer exists at the time of reinstatement for reasons not attributable to the employer.

The common denominator of the instances where payment of separation pay is warranted is that the employee was dismissed by the employer. [33] In the instant case, there was no dismissal to speak of. Private respondents were simply not dismissed at all, whether legally or illegally. What they received from JPL was not a notice of termination of employment, but a memo informing them of the termination of CMC's contract with JPL. More importantly, they were advised that they were to be reassigned. At that time, there was no severance of employment to speak of.

Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, wherein an employee/employees are placed on the so-called 'floating status. When that floating status' of an employee lasts for more than six months, he may be considered to have been illegally dismissed from the service. Thus, he is entitled to the corresponding benefits for his separation, and this would apply to suspension either of the entire business or of a specific component thereof.[34]

As clearly borne out by the records of this case, private respondents sought employment from other establishments even before the expiration of the six (6)-month period provided by law. As they admitted in their comment, all three of them applied for and were employed by another establishment after they received the notice from JPL.[35] JPL did not terminate their employment; they themselves severed their relations with JPL. Thus, they are not entitled to separation pay. The Court is not inclined in this case to award separation pay even on the ground of compassionate justice. The Court of Appeals relied on the cases[36] wherein the Court awarded separation pay to legally dismissed employees on the grounds of equity and social consideration. Said cases involved employees who were actually dismissed by their employers, whether for cause or not. Clearly, the principle applies only when the employee is dismissed by the employer, which is not the case in this instance. In seeking and obtaining employment elsewhere, private respondents effectively terminated their employment with JPL.

JPL cannot escape the payment of 13th month pay and service incentive leave pay to private respondents. Said benefits are mandated by law and should be given to employees as a matter of right.

Presidential Decree No. 851, as amended, requires an employer to pay its rank and file employees a 13thmonth pay not later than 24 December of every year. However, employers not paying their employees a 13th month pay or its equivalent are not covered by said law.[39] The term 'its equivalent was defined by the law's implementing guidelines as including Christmas bonus, mid-year bonus, cash bonuses and other payment amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends, cost-of-living-allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits.[40]

On the other hand, service incentive leave, as provided in Art. 95 of the Labor Code, is a yearly leave benefit of five (5) days with pay, enjoyed by an employee who has rendered at least one year of service. Unless specifically excepted, all establishments are required to grant service incentive leave to their employees. The term 'at least one year of service shall mean service within twelve (12) months, whether continuous or broken reckoned from the date the employee started working.[41] The Court has held in several instances that 'service incentive leave is clearly demandable after one year of service.[42]

Admittedly, private respondents were not given their 13th month pay and service incentive leave pay while they were under the employ of JPL. Instead, JPL provided salaries which were over and above the minimum wage. The Court rules that the difference between the minimum wage and the actual salary received by private respondents cannot be deemed as their 13th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. Thus, as properly held by the Court of Appeals and by the NLRC, private respondents are entitled to the 13th month pay and service incentive leave pay.

However, the Court disagrees with the Court of Appeals' ruling that the 13th month pay and service incentive leave pay should be computed from the start of employment up to the finality of the NLRC resolution. While computation for the 13th month pay should properly begin from the first day of employment, the service incentive leave pay should start a year after commencement of service, for it is only then that the employee is entitled to said benefit. On the other hand, the computation for both benefits should only be up to 15 August 1996, or the last day that private respondents worked for JPL. To extend the period to the date of finality of the NLRC resolution would negate the absence of illegal dismissal, or to be more precise, the want of dismissal in this case. Besides, it would be unfair to require JPL to pay private respondents the said benefits beyond 15 August 1996 when they did not render any service to JPL beyond that date. These benefits are given by law on the basis of the service actually rendered by the employee, and in the particular case of the service incentive leave, is granted as a motivation for the employee to stay longer with the employer. There is no cause for granting said incentive to one who has already terminated his relationship with the employer.

The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. 'It should be made clear that when the law tilts the scale of justice in favor of labor, it is but recognition of the inherent economic inequality between labor and management. The intent is to balance the scale of justice; to put the two parties on relatively equal positions. There may be cases where the circumstances warrant favoring labor over the interests of management but never should the scale be so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice is to be denied to none).[43]

WHEREFORE, the petition is GRANTED IN PART. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 62631 are hereby MODIFIED. The award of separation pay is deleted.

Petitioner is ordered to pay private respondents their 13th month pay commencing from the date of employment up to 15 August 1996, as well as service incentive leave pay from the second year of employment up to 15 August 1996. No pronouncement as to costs. G.R. No. 117460 January 6, 1997, REPUBLIC PLANTERS BANK now known as PNB-REPUBLIC BANK, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ANTONIO G. SANTOS, respondents. FACTS: ANTONIO G. SANTOS was employed by Republic Planters Bank, now known as PNB-Republic Bank (PNB-RB), for thirty-one (31) years and fifteen (15) days occupying various positions. At the time of his retirement on 31 May 1990 he was a Department Manager with a monthly salary of P8,965.00 and accumulated leave credits of two hundred and seventy-two (272) days. He received a gratuity pay of P434,468.52 out of which P20,615.62 was deducted for taxes due. Santos filed the instant suit for underpayment of gratuity pay, nonpayment of accumulated sick and vacation leaves, mid-year and year-end bonuses, financial assistance, at the same time claiming damages and attorney's fees. The Labor Arbiter found for complainant Santos and this finding was affirmed by the National Labor Relations Commission (NLRC) on appeal. PNB-RB alleges in this petition that the resolution of NLRC is contrary to the evidence and existing jurisprudence; that NLRC gravely abused its discretion when it upheld the order of the Labor Arbiter awarding P661,210.63 to Santos; and, that the award to Santos of mid-year and year-end bonuses, moral and exemplary damages and attorney's fees has no legal basis. Petitioner argues that Santos is not entitled to the award as he signed aRelease, Waiver and Quitclaim therefor when he received his gratuity pay of P434,468.52. ISSUE: WON private respondent is entitled to gratuity pay, accumulated sick and vacation leaves, award for exemplary damages, etc? HELD: We are not unaware that a quitclaim by an employee in favor of his employer amounts to a valid and binding compromise agreement between them. 1 An agreement voluntarily entered into which represents a reasonable settlement is binding on the parties and may not later be disowned simply because of a change of mind. 2 On the other hand, we are not also unmindful of the principle that quitclaims are ineffective to bar recovery for the full measure of the worker's rights 3 and that acceptance thereof does not amount to estoppel. 4 Generally, quitclaims by laborers are frowned upon as contrary to public policy. 5 And the fact that the consideration given in exchange

thereof was very much less than the amount claimed renders the quitclaim null and void. 6 In the instant case, the total amount claimed by Santos is P908,022.65 of which only P434,468.52 was received by him. Considering that the Release, Waiver and Quitclaim was signed by Santos under protest as found by the Labor Arbiter and the NLRC, and the difference between the amount claimed and that paid cannot in any way be considered negligible, we deem it proper to recompute and determine the exact amount of the retirement benefits due private respondent. We perceive the waiver under the facts of the case to dangerously encroach on the entrenched domain of public policy. PNB-RB avers that the NLRC gravely abused its discretion when it computed the gratuity pay of Santos at P661,210.63 based on the salary rate of the next higher rank on the theory that he acquired a vested right over it pursuant to the 1971-1973 Collective Bargaining Agreement (CBA). Petitioner posits that as the CBA had long expired it could no longer be used as basis in computing the gratuity pay of its retiring officers; instead, the computation should be based on the practice and policy of the bank effective at the time of the employee's retirement. We cannot agree. Not so long ago we resolved exactly the same issues in Republic Planters Bank v. National Labor Relations Commissions 8 which, coincidentally, emanated from a similar set of facts. In that case, Macario de Guzman resigned from PNB-RB on 3 June 1985. The following day he filed a complaint with the Department of Labor and Employment for underpayment of gratuity pay, underpayment of unused leaves and nonpayment of accrued leave credits. De Guzman bewailed the erroneous computation of his gratuity pay and the cash value of his accumulated leave credits, and maintained that it should have been based on the provisions of the 1971-1973 CBA instead of the 1982-1985 CBA entered into between PNB-RB and its rank-and-file employees. PNB-RB insists on disowning any practice or policy of granting gratuity pay to its retiring officers based on the salary rate of the next higher rank. It admitted however that it granted gratuity pay on the basis of the salary rate of the next higher rank but only in the case of Simplicio Manalo. As to other instances when it granted gratuity pay based on the salary rate of the next higher rank, PNB-RB explains that those were not voluntarily done but were in lawful compliance with court orders. computing the gratuity pay based on the performance rating of the retiring officer is a practice that is very likely susceptible to abuse as he will be placed at the mercy of the members of the performance appraisal committee. Petitioner argues that the claim of Santos for bonuses corresponding to the years 1985, 1986 and mid-year of 1987 has already prescribed. This is correct. Article 291 of the Labor Code states in part — All money claims arising from employer-employee relations accruing during the effectivity of

this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred. Since Santos filed his complaint only on 12 July 1990, his claim for 1985 (mid-year and year-end), 1986 (mid-year and year-end), and 1987 (midyear) bonuses already prescribed. As regards bonuses for 1987 (year-end), 1988 (mid-year and year-end), 1989 (mid-year and year-end), and 1990 (mid-year), we agree with petitioner that these should be based on the existing salary rate at the time of their accrual. The record shows however that in 1988 Santos was found guilty of an administrative charge. Hence, in consonance with existing company policy, the 1988 (mid-year and yearend) bonus should be forfeited in favor of the Bank. 17 As regards the award of moral and exemplary damages, as well as attorney's fees, we quote with approval the Comment of private respondent thus— On the matter of moral and exemplary damages, the same is a must considering that petitioner is guilty of bad faith by its continued refusal to pay his claims despite the final rulings of the Supreme Court in similar other cases earlier cited. By refusing to abide by the doctrinal pronouncements of the Highest Tribunal, petitioner has shown to be anti-labor. This stubborn attitude is not only contemptible but also contrary to morals, good customs and public policy. Regardless of its own thinking on the issues presented vis-a-vis the judicial pronouncements already made, petitioner is duty-bound to respect the Supreme Court decisions which have become part of the law of the land.Consequently, private respondent had suffered mental anguish and sleepless nights and therefore, should be entitled to moral damages. And to serve as example for the public good so that others similarly inclined could be dissuaded from adopting the same detestable practice, petitioner should also be sanctioned in the form of exemplary damages. ACCORDINGLY, the 30 June 1993 Decision of the Labor Arbiter and the 30 August 1994 Resolution of the National Labor Relations Commission are AFFIRMED with the modification that petitioner PNB-REPUBLIC BANK is ordered to pay private respondent Antonio G. Santos the amount of P423,661.00, less the applicable taxes ACE NAVIGATION CO., INC. and/or CONNING SHIPPING LTD., petitioners, vs. COURT OF APPEALS (THIRTEENTH DIVISION), NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION) and ORLANDO ALONSAGAY, respondents. Ace Navigation Co., Inc. (Ace Nav) recruited private respondent Orlando Alonsagay to work as a bartender on board the vessel M/V "Orient Express" owned by its principal, Conning Shipping Ltd. (Conning). Under their POEA approved contract of employment, Orlando shall receive a monthly basic salary of four hundred fifty U.S. dollars (U.S. $450.00), flat rate, including overtime pay for 12 hours of work daily plus tips of two U.S. dollars (U.S. $2.00) per passenger per

day. He, was also entitled to 2.5 days of vacation leave with pay each month. The contract was to last for one (1) year. Petitioners alleged that on June 13, 1994, Orlando was deployed and boarded M/V "Orient Express" at the seaport of Hong Kong. After the expiration of the contract on June 13, 1995, Orlando returned to the Philippines and demanded from Ace Nav his vacation leave pay. Ace Nav did not pay him immediately. It told him that he should have been paid prior to his disembarkation and repatriation to the Philippines. Moreover, Conning did not remit any amount for his vacation leave pay. Ace Nav, however, promised to verify the matter and asked Orlando to return after a few days. Orlando never returned. On November 25, 1995, Orlando filed a complaint[3] before the labor arbiter for vacation leave pay of four hundred fifty U.S. dollars (U.S. $450.00) and unpaid tips amounting to thirty six, thousand U.S. dollars (U.S. $36,000.00).[4] On November 15, 1996, Labor Arbiter Felipe P. Pati ordered Ace Nav and Conning to pay jointly and severally Orlando his vacation leave pay of US$450.00. The claim for tips of Orlando was dismissed for lack of merit.[5] Orlando appealed[6] to the National Labor Relations Commission (NLRC) on February 3, 1997. In a decision[7] promulgated on November 26, 1997, the NLRC ordered Ace Nav and Conning to pay the unpaid tips of Orlando which amounted to US$36,000.00 in addition to his vacation leave pay. Ace Nav and Conning filed a motion for reconsideration on February 2, 1998 which was denied on May 20, 1999.[8] On July 2, 1999, Ace Nav and Conning filed a petition for certiorari before the Court of Appeals to annul the decision of the NLRC. On July 28, 1999, the Court of Appeals promulgated a threepage resolution[9] dismissing the petition. Their motion for reconsideration filed on September 8, 1999 was denied on October 8, 1999. Hence this appeal. ISSUE: Whether petitioners are liable to pay the tips to Orlando. HELD: The word [“tip”] has several meanings, with origins more or less obscure, connected with "tap" and with "top." In the sense of a sum of money given for good service, other languages are more specific, e.g., Fr. pourboire, for drink. It is suggested that [the word] is formed from the practice, in early 18th c. London coffeehouses, of having a box in which persons in a hurry would drop a small coin, to gain immediate attention. The box was labelled To Insure Promptness; then just with the initials T.I.P. Tipping is done to get the attention and secure the immediate services of a waiter, porter or others for their services. Since a tip is considered a pure gift out of benevolence or friendship, it can not be demanded from the customer. Whether or not tips will be given is dependent on the will and generosity of the giver. Although a customer may give a tip as a consideration for services rendered, its

value still depends on the giver. They are given in addition to the compensation by the employer. A gratuity given by an employer in order to inspire the employee to exert more effort in his work is more appropriately called a bonus. The NLRC and the Court of Appeals held that petitioners were liable to pay tips to Orlando because of the contract of employment. "It was thus a serious error on the part of the Labor Arbiter to rule that the tips were already paid, much less to rule that said tips were directly paid to the crew of M/V "ORIENT PRINCESS." With Article 4 of the Labor Code reminding us that doubts should be resolved in favor of labor, we all the more find it compelling to rule that the complainant is still entitled to the contractually covenanted sum of US$36,000.00. xxx." We disagree. The contract of employment between petitioners and Orlando is categorical that the monthly salary of Orlando is US$450.00 flat rate. This already included his overtime pay which is integrated in his 12 hours of work. The words "plus tips of US$2.00 per passenger per day" were written at the line for overtime. Since payment for overtime was included in the monthly salary of Orlando, the supposed tips mentioned in the contract should be deemed included thereat. The actuations of Orlando during his employment also show that he was aware his monthly salary is only US$450.00, no more no less. He did not raise any complaint about the non-payment of his tips during the entire duration of his employment. After the expiration of his contract, he demanded payment only of his vacation leave pay. He did not immediately seek the payment of tips. He only asked for the payment of tips when he filed this case before the labor arbiter. This shows that the alleged nonpayment of tips was a mere afterthought to bloat up his claim. The records of the case do not show that Orlando was deprived of any monthly salary. It will now be unjust to impose a burden on the employer who performed the contract in good faith. Furthermore, it is presumed that the parties were aware of the plain, ordinary and common meaning of the word "tip." As a bartender, Orlando can not feign ignorance on the practice of tipping and that tips are normally paid by customers and not by the employer. It is also absurd that petitioners intended to give Orlando a salary higher than that of the ship captain. As petitioners point out, the captain of M/V "Orient Princess" receives US$3,000.00 per month while Orlando will receive US$3,450.00 per month if the tip of US$2.00 per passenger per day will be given in addition to his US$450.00 monthly salary. It will be against common sense for an employer to give a lower ranked employee a higher compensation than an employee who holds the highest position in an enterprise.

However, Orlando should be paid his vacation leave pay. Petitioners denied this liability by raising the defense that the usual practice is that vacation leave pay is given before repatriation. But as the labor arbiter correctly observed, petitioners did not present any evidence to prove that they already paid the amount. The burden of proving payment was not discharged by the petitioners. IN VIEW WHEREOF, the resolutions of the Court of Appeals in CA G.R. SP No. 53508 are reversed and set aside. The decision of the labor arbiter ordering petitioners to pay jointly and severally the unpaid vacation leave pay of private respondent, Orlando Alonsagay, in the amount of US$450.00 and dismissing his other claim for lack of merit is reinstated. [G.R. No. 123880. February 23, 1999], MARANAW HOTELS AND RESORT CORPORATION, (Owner of Century Park Sheraton Manila), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EDDIE DAMALERIO, respondents. FACTS: Eddie Damalerio (Damalerio), a room attendant of the Century Park Sheraton Hotel, operated by Maranaw Hotel and Resort Corporation, was seen by hotel guest Jamie Glaser (Glaser) with left hand inside the latter's suitcase. Confronted with what he was doing, Damalerio explained that he was trying to tidy up the room. Not satisfied with the explanation of Damalerio, Glaser lodged a written complaint before William D. Despuig, shift-in-charge of security of the hotel. Glaser also reported that Damalerio had previously asked from him souvenirs, cassettes, and other giveaways. The complaint was later brought by Despuig to the attention of Major Eddie Buluran, chief of Security of the hotel. On April 3, 1992, Damalerio was given a Disciplinary Action Notice (DAN). The next day, an administrative hearing was conducted on the matter. Among those present at the hearing were: 1) Lourdes Ricardo (room attendant), 2) Angelito Torres (floor supervisor), 3) Major Eddie Buluran (chief of security), 4) Susan Dino (Personnel representative), 5) Alfredo San Gabriel (senior floor supervisor)and 6) Ben Hur Amador (union representative). Taking the witness stand on his own behalf, Damalerio denied the accusation against him, theorizing that when he found the room of Glaser in disarray, and was about to make the bed, he noticed some belongings, such as socks and T-shirts of the said hotel guest scattered around, so much so that he thought of placing the same in his luggage. While doing so, Glaser arrived. When asked by the latter if something was wrong, he (Damalerio) said "I'm just cleaning your room," and Glaser remarked, "Good work," and then, the two of them chatted about Glaser's concert at the Araneta Coliseum. Damalerio received a memorandum[3] issued by Alfredo San Gabriel, Sr., Floor Supervisor, bearing the approval of Nicolas R. Kirit, Executive Housekeeper, stating that he (Damalerio) was found to have committed qualified theft in violation of House Rule No. 1, Section 3 of Hotel Rules and Regulations. The same memorandum served as a notice of termination of his employment.Damalerio filed with the Labor Arbiter a Complaint for

illegal dismissal against the petitioner. After the parties had sent in their position papers, Labor Arbiter Ceferina J. Diosana decided the case. ISSUE: 1. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT PETITIONER FAILED TO ADDUCE CONCLUSIVE EVIDENCE IN SUPPORT OF ITS VERSION OF THE INCIDENT, CONSIDERING THE FACT THAT THE EVIDENCE ON RECORD INELUCTABLY SHOWS THAT PRIVATE RESPONDENT WAS CAUGHT IN FLAGRANTE DELICTO. 2. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT REVERSING THAT PORTION OF THE DECISION OF THE LABOR ARBITER ORDERING HEREIN PETITIONER TO PAY PRIVATE RESPONDENT HIS SHARE IN THE SERVICE CHARGE WHICH WAS COLLECTED DURING THE TIME HE WAS NOT WORKING IN THE HOTEL. HELD: The petition is barren of merit. Petitioner's theory that Damalerio was caught committing qualified theft in flagrante delicto is anemic of evidentiary support. Records disclose petitioner's failure to substantiate such imputation against him. During the investigation presided over by the Labor Arbiter, Damalerio narrated a plausible and satisfactory explanation for his behavior complained of. According to him, he was then cleaning the hotel room of Glaser, and while in the process of placing inside the luggage the personal belongings of Glaser scattered near the bed, the latter entered the room. Glaser did not bother to testify as all his things were intact. Although it was not completely proper for Damalerio to be touching the things of a hotel guest while cleaning the hotel rooms, personal belongings of hotel guests being off-limits to roomboys, under the attendant facts and circumstances, we believe that the dismissal of Damalerio was unwarranted. To be sure, the investigation held by the hotel security people did not unearth enough evidence of culpability. It bears repeating that subject hotel guest lost nothing. Albeit petitioner may have reasons to doubt the honesty and trustworthiness of Damalerio, as a result of what happened, absent sufficient proof of guilt, he (Damalerio), who is a rank-and-file employee, cannot be legally dismissed. [4] Unsubstantiated suspicions and baseless conclusions by employers are not legal justification for dismissing employees. The burden of proving the existence of a valid and authorized cause of termination is on the employer.[5] Any doubt should be resolved in favor of the employee, in keeping with the principle of social justice enshrined in the Constitution.[6] All things studiedly considered and viewed in proper perspective, the dismissal of Damalerio, under the premises, cannot be countenanced. As regards the share of Damalerio in the service charges collected during the period of his preventive suspension, the same form part of his earnings, and his dismissal having been adjudged to be illegal, he is entitled not only to full backwages but also to other benefits, including a

just share in the service charges, to be computed from the start of his preventive suspension until his reinstatement.

organizational setup, the CAS is under the direct and immediate supervision of the Branch Operations Manager (BOM).

However, mindful of the animosity and strained relations between the parties, emanating from this litigation, we uphold the ruling a quo that in lieu of reinstatement, separation pay may be given to the private respondent, at the rate of one (1) month pay for every year of service. Should petitioner opt in favor of separation pay, the private respondent shall no longer be entitled to share in the service charges collected during his preventive suspension.

Cynthia Rey at the time of her dismissal from employment, held the position of Credit Administration Supervisor or CAS at the Cagayan de Oro City branch of the petitioner. She was first employed by the petitioner as an Accounts Receivable Clerk at its Caloocan City branch. In November 1993, respondent was transferred to the Cagayan de Oro City branch retaining the same position. In January 1994, respondent was elevated to the position of CAS. At that time, the Branch Operations Manager or BOM of the Cagayan de Oro City branch was a certain Mr. Jeremiah Villagracia. In March 1995, respondent was temporarily assigned to the Butuan City branch.

WHEREFORE, the petition is hereby DISMISSED and the Court affirms the questioned Decision of the National Labor Relations Commission, to be implemented according to law and this disposition. No pronouncement as to costs. House of Sara Lee vs Rey (2006) G.R. 149013 Facts: The House of Sara Lee is engaged in the direct selling of a variety of product lines for men and women, including cosmetics, intimate apparels, perfumes, ready to wear clothes and other novelty items, through its various outlets nationwide. In the pursuit of its business, the petitioner engages and contracts with dealers to sell the aforementioned merchandise. These dealers, known either as “Independent Business Managers” (IBMs) or “Independent Group Supervisors” (IGSs), depending on whether they sell individually or through their own group, would obtain at discounted rates the merchandise from the petitioner on credit or then sell the same products to their own customers at fixed prices also determined by the petitioner. In turn, the dealers are paid “Services Fees,” or sales commissions, the amount of which depends on the volume and value of their sales. Under existing company policy, the dealers must remit to the petitioner the proceeds of their sales within a designated credit period, which would either be 38 days for IGSs or 52 days for IBMs, counted from the day the said dealers acquired the merchandise from the petitioner. To discourage late remittances, the petitioner imposes a “Credit Administration Charge,” or simply, a penalty charge, on the value of the unremitted payment. The dealers under this system earn income through a profit margin between the discounted purchase price they pay on credit to the petitioner and the fixed selling price their customers will have to pay. On top of this margin, the dealer is given the Service Fee, a sales commission, based on the volume of sales generated by him or her. Due to the sheer volume of sales generated by all of its outlets, the petitioner has found the need to strictly monitor the 38- or 52-day “rolling due date” of each of its IBMs and IGSs through the employment of “Credit Administration Supervisors” (CAS) for each branch. The primary duty of the CAS is to strictly monitor each of these deadlines, to supervise the credit and collection of payments and outstanding accounts due to the petitioner from its independent dealers and various customers, and to screen prospective IBMs. To discharge these responsibilities, the CAS is provided with a computer equipped with control systems through which data is readily generated. Under this

Sometime in June 1995, while respondent was still working in Butuan City, she allegedly instructed the Accounts Receivable Clerk of the Cagayan de Oro outlet to change the credit term of one of the IBMs of the petitioner who happens to be respondent’s sister-in-law, from the 52-day limit to an “unauthorized” term of 60 days. The respondent made the instruction just before the computer data for the computation of the Service Fee accruing to Ms. Rey-Petilla was about to be generated. Ms. Mendoza then reported this allegedly unauthorized act of respondent to her Branch Operations Manager, Mr. Villagracia. Acting on the report, as the petitioner alleges, BOM Villagracia discreetly verified the records and discovered that it was not only the 52-day credit term of IBM Rey-Petilla that had been extended by the respondent, but there were several other IBMs whose credit terms had been similarly extended beyond the periods allowed by company policy. BOM Villagracia then summoned the respondent and required her to explain the unauthorized credit extensions. Issue: WON the respondent is entitled to 13th month pay. Held: The award of 13th month pay must be deleted. Respondent is not a rank-and-file employee and is, therefore, not entitled to thirteenth-month pay. However, the NLRC and the CA are correct in refusing to award 14th and 15th month pay as well as the “monthly salary increase of 10 percent per year for two years based on her latest salary rate.” The respondent must show that these benefits are due to her as a matter of right. Mere allegations by the respondent do not suffice in the absence of proof supporting the same. With respect to salary increases in particular, the respondent must likewise show that she has a vested right to the same, such that her salary increases can be made a component in the computation of backwages. What is evident is that salary increases are a mere expectancy. They are by nature volatile and dependent on numerous variables, including the company’s fiscal situation, the employee’s future performance on the job, or the employee’s continued stay in a position. In short, absent any proof, there is no vested right to salary increases.

Honda Phils., Inc., vs Samahan ng Malayang Manggagawa sa Honda (2005) G.R. 145561 Facts: The case stems from the collective bargaining agreement between Honda and the respondent union that it granted the computation of 14th month pay as the same as 13th month pay. Honda continues the practice of granting financial assistance covered every December each year of not less than 100% of the basic salary. In the latter part of 1998, the parties started to re-negotiate for the fourth and fifth years of the CBA. The union filed a notice of strike on the ground of unfair labor practice for deadlock. DOLE assumed jurisdiction over the case and certified it to the NLRC for compulsory arbitration. The striking employees were ordered to return to work and management to accept them back under the same terms prior to the strike staged. Honda issued a memorandum of the new computation of the 13th month and 14th month pay to be granted to all its employees whereby the 31 long strikes shall be considered unworked days for purpose of computing the said benefits. The amount equivalent to ½ of the employees’ basic salary shall be deducted from these bonuses, with a commitment that in the event that the strike is declared legal, Honda shall pay the amount. The respondent union opposed the pro-rated computation of bonuses. This issue was submitted to voluntary arbitration where it ruled that the company’s implementation of the pro-rated computation is invalid. Issue: WON the pro-rated computation of the 13th and 14th month pays and other bonuses in question is valid and lawful. Held: The pro-rated computation is invalid. The pro-rated computation of Honda as a company policy has not ripened into a company practice and it was the first time they implemented such practice. The payment of the 13th month pay in full month payment by Honda has become an established practice. The length of time where it should be considered in practice is not being laid down by jurisprudence. The voluntary act of the employer cannot be unilaterally withdrawn without violating Article 100 of the Labor Code.

2. 3. 4. 

Its ruling is not justified by law and Art. 100 of the labor code Its ruling is contrary to the BA The so called “company practice invoked by its has no legal and moral bases” Petitioner under conservatorship and distressed is exempted under wage#6.

Issues:

 Alleged diminution of benefits, - Christmas and 13th bonus   Held: 

Non compliance with the wage order#6 Non payment of legal holiday pay

The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient.  Section 28 A Appointment of conservator – whenever, on the basis of a report submitted b appropraiate supervising and examining department, the MB fins that a bank is in a state of continuing in ability or unwillingness to maintain a condition of solvency and liquidity deemed adequate to protect the depositors and creditors, the MB may appoint a conservator to take charge of the asses, liabilities and the management of that banking institution all monies and debs due said bank exercise all powers necessary to preserve the assets of the bank reorganize the management thereof and resorted.  He shall have the power to overrule or revoke the actions of the previous management and board of directors of the bank, any provision of law to the notwithstanding, and such other powers as the monetary board shall deemed necessary. Doctrine: An employer cannot be forced to distribute bonuses which it can no longer afford to pay, a bonus is an amount granted and paid to anemployee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profile. It is an act of generosity and is a management prerogative, given in addition to what is ordinarily received by or strictly due the recipient. Thus, it is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee.

The court also rules that the withdrawal of the benefit of paying a full month salary for 13th month pay shall constitute a violation of Article 100 of the Labor Code.

The conservator was justified in reducing the mid-year and Christmas bonuses of petitioner’s employees. Ultimately, it is to the employee’s advantage that the conservatorship achieve its purposes otherwise, the closure of the company would result in the employees losing their jobs.

Producer’s Bank v. NLRC Facts:  The employee of the producer bank file a petition to the NLRC that the PBP not complied the wage#6 and non payment of holiday pay.  The petitioner contends that the NLRC gravely abused its discretion in ruling as it did for the succeeding reasons: 1. It contravened the SC decision in traders Royal bank vs NLRC

PD 851 requires all employees to pay their employees a basic salary of not more than P1, 000 at 13th monthly pay. However, employeesalready paying their employees a 13th month pay are not covered by the law. The term “equivalent” shall be constructed to include Christmas bonus, mid year bonus, cash bonuses and other payments amounting to not less than 1 /12 of the basic salary. The intention was to grant relief to those not actually paid a bonus, by whatevername called. Thus, petitioner is justified in crediting the mid year bonus and Christmas bones as part of the 13th

month pay. The divisor used by petitioner in arriving at the employee’s daily ratefor the purpose of computing salary related benefits is 314 days. This finding was not disputed by the NLRC. However, the divisor was for the sole purpose of increasing the employee’s overtime pay and was not meant to replace the use of 314 as the divisor in the computation of the daily rate for salary –related benefits. UNITED CMC TEXTILE WORKERS UNION v. VALENZUELA Facts: Sometime in 1979, petitioner filed a complaint against Central Textile Mills, Inc. (CTMI, for brevity) at the Ministry of Labor and Employment for non-payment of Christmas bonus of the rank and file employees of said company as provided in Art. XI of the then existing collective bargaining agreement between petitioner and CTMI. Among the provisions of the said collective agreement is the payment of Christmas bonus based on a schedule. To be paid to all employees on or before the beginning of the Christmas vacation. Respondent CTMI appealed said decision to the NLRC which affirmed the Labor Arbiter's decision with the modification that the complainant (petitioner herein) was ordered to furnish a copy of the computation list in order that respondents may verify the correctness and/or validity of the individual claims and for the latter to present their objection, if any, to the Labor Arbiter of origin, prior to the execution of the decision. Petitioner filed with the NLRC a motion for execution of the decision in October, 1984. Due to the appeal of CTMI, respondent Labor Arbiter refused to continue with the execution of the final order or decision in G.R. No. 58666 contending that it has become moot and academic. Issue: WON the case has been moot and academic Held: We find the contentions of petitioner more meritorious than the contentions of respondents. When We dismissed the petition for review of private respondents in G.R. No. 58666 on January 20,1982, for lack of merit, We did so upon the doctrine laid down in the Marcopper Case which was promulgated on June 11, 1981. Before the dismissal of said case became final and executory, We decided the La Carlota case on May 31, 1982 wherein We ruled that employees are no longer entitled to an additional Christmas bonus or other Christmas benefits if they are already entitled to a 13th month pay. Meanwhile in Case No. 58666 the company filed their motion for reconsideration of the dismissal of their petition which We denied as per Our resolution on August 18, 1982.Subsequently, said dismissal became final and executory as per Entry of Judgment dated September 22, 1982.Thus, it can be seen that despite the La Carlota ruling We denied the company's Motion for reconsideration and We reiterated Our previous dismissal of the petition for review for lack of merit. This only goes to show that We refused to apply or did not choose to apply the La Carlota doctrine to the case at bar. And We have consistently held in a number of Our decisions that judgments which had long become

final and executory can no longer be amended or modified by the courts. Such is the doctrine known as "the law of the case." Furthermore, the findings of the NLRC as stated in its decision 4 show that the claim is for Christmas bonus for the year 1978 only. It appears from the records that the employees of the respondent company had been paid their bonuses in accordance with the collective bargaining agreement, in addition to the 13th month pay, for the years 1979 and 1980. The Page 431 collective bargaining agreement in question took effect on November 1, 1978, 3 years after the promulgation of P.D. No. 851. If the Christmas bonus was included in the 13th month pay, then there would be no need for having a specific provision on Christmas bonus in the CBA. But it did provide for a bonus in graduated amounts depending on the length of service of the employee. The intention is clear therefore that the bonus provided in the CBA was meant to be in addition to the legal requirement. Moreover, why exclude the payment of the 1978 Christmas bonus and pay only the 1979-1980 bonus. The classification of the company's workers in the CBA according to their years of service supports the allegation that the reason for the payment of bonus was to give bigger reward to the senior employees — a purpose which is not found in P.D. 851. A bonus under the CBA is an obligation created by the contract between the management and workers while the 13th month pay is mandated by the law (P.D. 851). Likewise We find no merit in respondent's allegations that the applicability of the said La Carlota ruling to the case at bar is explicitly recognized by herein petitioner. A cursory reading of the CBA signed on November 2, 1983 5shows that petitioner Union recognizes only the application of the La Carlota doctrine in so far as it had agreed to the deletion of the provision on payment of Christmas bonus in the new CBA of 1983 without necessarily giving up their claim for their 1978 bonus under their former collective bargaining agreement. Petition granted. ESCARIO v. NLRC Facts: The petitioners were among the regular employees of respondent Pinakamasarap Corporation (PINA), a corporation engaged in manufacturing and selling food seasoning. They were members of petitioner Malayang Samahan ng mga Manggagawa sa Balanced Foods (Union). In the morning of March 1993, all the officers and some 200 members of the Union walked out of PINA’s premises and proceeded to the barangay office to show support for Juanito Cañete, an officer of the Union charged with oral defamation by PINA’s personnel manager Manor’s secretary. It appears that the proceedings in the barangay resulted in a settlement, and the officers and members of the Union all returned to work thereafter. As a result of the walkout, PINA preventively suspended all officers of the Union because of the March 13, 1993 incident. PINA terminated the officers of the Union after a month.

PINA filed a complaint for unfair labor practice (ULP) and damages. The complaint was assigned to then Labor Arbiter Raul Aquino, who ruled in his decision that the incident was an illegal walkout constituting ULP; and that all the Union’s officers, except Cañete, had thereby lost their employment. The Union filed a notice of strike, claiming that PINA was guilty of union busting through the constructive dismissal of its officers. The Union held a strike vote, at which a majority of 190 members of the Union voted to strike. PINA retaliated by charging the petitioners with ULP and abandonment of work, stating that they had violated provisions on strike of the collective bargaining agreement (CBA), such as: (a) sabotage by the insertion of foreign matter in the bottling of company products; (b) decreased production output by slowdown; (c) serious misconduct, and willful disobedience and insubordination to the orders of the Management and its representatives; (d) disruption of the work place by invading the premises and perpetrating commotion and disorder, and by causing fear and apprehension; (e) abandonment of work since June 28, 1993 despite notices to return to work individually sent to them; and (f) picketing within the company premises on June 15, 1993 that effectively barred with the use of threat and intimidation the ingress and egress of PINA’s officials, employees, suppliers, and customers. The Third Division of the National Labor Relations Commission (NLRC) issued a temporary restraining order (TRO), enjoining the Union’s officers and members to cease and desist from barricading and obstructing the entrance to and exit from PINA’s premises, to refrain from committing any and all forms of violence, and to remove all forms of obstructions such as streamers, placards, or human barricade. NLRC granted the writ of preliminary injunction.[10] Labor Arbiter Jose G. de Vera (LA) rendered a decision: The complainant’s prayer for decertification of the respondent union being outside of the jurisdiction of this Arbitration Branch may not be given due course. On appeal, the NLRC sustained the finding that the strike was illegal, but reversed the LA’s ruling that there was abandonment. However, we disagree with the conclusion that respondents’ union members should be considered to have abandoned their employment. The CA affirmed the NLRC in denying the petitioners’ claim for full backwages. Issue: WON petitioners are entitled to full backwages from the date of dismissal until the date of actual reinstatement due to their not being found to have abandoned their jobs Ruling: CA’s decision affirmed but the decision on the amount of the backwages in order to accord with equity and jurisprudence is modified. The petitioners were terminated for joining a strike that was later declared to be illegal. The NLRC ordered their reinstatement or, in lieu of

reinstatement, the payment of their separation pay, because they were mere rank-and-file workers whom the Union’s officers had misled into joining the illegal strike. They were not unjustly dismissed from work. Based on the text and intent of the two aforequoted provisions of theLabor Code, therefore, it is plain that Article 264(a) is the applicable one. Petitioners not entitled to backwages despite their reinstatement. The petitioners’ participation in the illegal strike was precisely what prompted PINA to file a complaint to declare them, as striking employees, to have lost their employment status. However, the NLRC ultimately ordered their reinstatement after finding that they had not abandoned their work by joining the illegal strike. They were thus entitled only to reinstatement, regardless of whether or not the strike was the consequence of the employer’s ULP. As a general rule, backwages are granted to indemnify a dismissed employee for his loss of earnings during the whole period that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his employment, he is entitled to all the rights and privileges that accrue to him from the employment. The grant of backwages to him is in furtherance and effectuation of the public objectives of theLabor Code, and is in the nature of a command to the employer to make a public reparation for his illegal dismissal of the employee in violation of the Labor Code. 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. Under the principle of a fair day’s wage for a fair day’s labor, the petitioners were not entitled to the wages during the period of the strike (even if the strike might be legal), because they performed no work during the strike. Verily, it was neither fair nor just that the dismissed employees should litigate against their employer on the latter’s time.[25] Appropriate Amount for Separation Pay is One Month per Year of Service. The petitioners were ordered reinstated because they were union members merely instigated or induced to participate in the illegal strike. By joining the strike, they did not renounce their employment relation with PINA but remained as its employees. 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. Philippine Duplicators Inc. vs. NLRC GR 110068 February, 15, 1995 Ponente: Feliciano

FACTS: Productivity bonuses are generally tied to the productivity or profit generation of the employer corporation. Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable, absent a contractual undertaking to pay it. Sales commissions are intimately related to or directly proportional to the extent or energy of an employee's endeavours. Commissions are paid upon the specific results achieved by a salesman-employee. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay. ISSUE:

1. WON The commissions received by the salesmen were part of the 2.

”wages” to be considered for their 13th month pay. - Yes WON Productivity bonus shall be considered as part of wages in 13th month pay - No

HELD: 1. The commissions were an integral part of the pay of the workers, considering that the fixed wage was only 30% of what they were normally receiving.

2. Productivity bonuses are generally tied to the productivity, or capacity for revenue production, of a corporation; such bonuses closely resemble profit-sharing payments and have no clear director necessary relation to the amount of work actually done by each individual employee. More generally, a bonus is an amount granted and paid ex gratia to the employee; its payment constitutes an act of enlightened generosity and self-interest on the part of the employer, rather than as a demandable or enforceable obligation. Since productivity bonus is not demandable, then it cannot be considered part of basic salary when time comes to compute 13th month pay. Additional payments made to employees, to the extent they partake of the nature of profit-sharing payments, are properly excluded from the ambit of the term "basic salary" for purposes of computing the 13th month pay due to employees. Such additional payments are not "commissions" within the meaning of the second paragraph of Section 5 (a) of the Revised Guidelines Implementing 13th Month Pay. The Supplementary Rules and Regulations Implementing P.D. No. 851 subsequently issued by former Labor Minister Ople sought to clarify the scope of items excluded in the computation of the 13th month pay; viz.:

Sec. 4. Overtime pay, earnings and other remunerations which are not part of the basic salary shall not be included in the computation of the 13th month pay. Rosario Bros v. Ople FACTS: Private respondents are tailors, pressers, stitchers and similar workers hired by the petitioner in its tailoring department (Modes Suburbia). Some had worked there since 1969 until their separation on January 2, 1978. For their services, they were paid weekly wages on piecework basis, minus the withholding tax per Bureau of Internal Revenue (BIR) rules. Further, they were registered with the Social Security System (SSS) as employees of petitioner and premiums were deducted from their wages; they were also members of the Avenida-Cubao Manila COD Department Store Labor Union which has a Collective Bargaining Agreement with the company and; they were required to report for work from Monday through Saturday and to stay in the tailoring shop for no less than eight (8) hours a day, unless no job order was given them after waiting for two to three hours, in which case, they may leave and may come back in the afternoon. Their attendance was recorded through a bundy clock just like the other employees of petitioner. A master cutter distributes job orders equally, supervises the work and sees to it that they were finished as soon as possible. On September 7, 1977, the private respondents filed with the Regional Office of the Department (now Ministry) of Labor a complaint for violation of Presidential Decree 851 (13th month pay) and Presidential Decree 525, as amended by Presidential Decree 1123 (Emergency Living Allowance) against herein petitioner. After petitioner had filed its answer, the case was certified for compulsory arbitration to the Labor Arbiter who, after due hearing, rendered a decision on December 29, 1977 dismissing "private respondents" claims for unpaid emergency living allowance and 13th month pay, for lack of merit, upon finding that the complainants (herein private respondents) are not employees of the respondent (herein petitioner) within the meaning of Article 267(b)of the Labor Code. As a consequence, the private respondents were dismissed on January 2, 1978 and this prompted them to file a complaint for illegal dismissal with the Ministry of Labor. Meanwhile, the National Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter and dismissed private respondents' appeal for lack of merit. Labor Arbiter, issued an order directing the Chief of the Research and Information Department of the Commission to designate a Socio-Economic Analyst to compute the balance of private respondents' claims for the 13th month pay and emergency living allowance in accordance with respondent Minister's decision of March 27, 1979. Pursuant thereto, a report, dated March 4, 1980, was submitted computing the balance of private respondents' claims for emergency living allowance and 13th month pay

up to February 29,1980 in the total amount of P71,131.14. A writ of execution was issued for the satisfaction of said amount. ISSUE: WON an employer-employee relationship exists between petitioner and private respondents HELD: Yes. The existence of ER-EE relationship is determined by: the selection and engagement of employee, payment of wages, power of dismissal, power to control employee’s conduct. An independent contractor is the one who exercises independent employment and contracts to do a piece of work according to his own methods without being subjected to control of his employer except as to the result of his work. In the case at bar, the selection and hiring of respondents was done by petitioner through the master cutter. Respondents received their weekly wages from petitioner on piece-work basis within the meaning of the term “wage” under the Labor Code, which defined as “the remuneration or earnings. However, designated, whether fixed on a time, task, piece or commission basis, payable by an employer to an employee under a written or unwritten contact for work done or to be done or for services rendered or to be rendered. Petitioner also had the power to dismiss respondents, thus, the latter’s conduct was controlled by petitioner. Respondents were allowed to register with SSS and withholding taxes were also deducted from their wages. Wherefore, petition is dismissed. PETROLEUM SHIPPING LTD. V. NLRC Facts: Esso International Shipping (Bahamas) Co., Ltd., ("Esso") through Trans-Global Maritime Agency, Inc. ("Trans-Global") hired Florello W. Tanchico ("Tanchico") as First Assistant Engineer. In 1981, Tanchico became Chief Engineer. On 13 October 1992, Tanchico returned to the Philippines for a two-month vacation after completing his eight-month deployment. Tanchico underwent the required standard medical examination prior to boarding the vessel. The medical examination revealed that Tanchico was suffering from "Ischemic Heart Disease, Hypertensive Cardio-Muscular Disease and Diabetes Mellitus." Tanchico took medications for two months and a subsequent stress test showed a negative result. Esso no longer deployed Tanchico. Instead, Esso offered to pay him benefits under the Career Employment Incentive Plan. Tanchico accepted the offer. Tanchico filed a complaint against Esso, Trans-Global and Malayan Insurance Co., Inc. ("Malayan") before the Philippine Overseas Employment Administration (POEA) for illegal dismissal with claims for backwages, separation pay, disability and medical benefits and 13th month pay. In

view of the enactment of Republic Act No. 8042 ("RA 8042")4 transferring to the National Labor Relations Commission (NLRC) the jurisdiction over money claims of overseas workers, the case was indorsed to the Arbitration Branch of the National Capital Region. In a Decision5 dated 16 October 1996, Labor Arbiter Jose G. De Vera ("Labor Arbiter De Vera") dismissed the complaint for lack of merit. Tanchico appealed to the NLRC. The Ruling of the NLRC : NLRC affirmed the Decision of Labor Arbiter De Vera. Tanchico filed a motion for reconsideration. On the claim of illegal dismissal, the same is unavailing as complainant had been declared as one with partial permanent disability. Thus, he should be entitled to disability benefit of 18 days for every year of credited service of fourteen (14) years less the amount he already received under the Company’s Disability Plan. On the claim of 13th month pay, the respondent Agency not falling under the enumerated exempted employers under P.D. 851 and in the absence of any proof that respondent is already paying its employees a 13th month pay or more in a calendar year, perforce, respondent agency should pay complainant his monthly pay computed at the actual month worked, which is 8 months. Since complainant was forced to litigate his case, he is hereby awarded 10% of the total award as attorney’s fees. The Ruling of the Court of Appeals: The Court of Appeals ruled that Tanchico was a regular employee of Petroleum Shipping. The Court of Appeals held that petitioners are not exempt from the coverage of Presidential Decree No. 851, as amended ("PD 851") which mandates the payment of 13th month pay to all employees. The Court of Appeals further ruled that Tanchico is entitled to disability benefits based on his 14 years of tenure with petitioners. The Court of Appeals stated that the employeremployee relationship subsisted even during the period of Tanchico’s vacation. The Court of Appeals noted that petitioners were aware of Tanchico’s medical history yet they still deployed him for 14 years. Finally, the Court of Appeals sustained the award of attorney’s fees. Issues: 1. Whether Tanchico is a regular employee of petitioners; and 2. Whether Tanchico is entitled to 13th month pay, disability benefits and attorney’s fees. Held: The petition is partly meritorious. Seafarers are considered contractual employees. They can not be considered as regular employees under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. We need not depart from the rulings of the Court in

the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers. In this jurisdiction and as clearly stated in the Coyoca case, Filipino seamen are governed by the Rules and Regulations of the POEA. The Standard Employment Contract governing the employment of All Filipino Seamen on Board Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C specifically provides that the contract of seamen shall be for a fixed period. Moreover, it is an accepted maritime industry practice that employment of seafarers are for a fixed period only. Constrained by the nature of their employment which is quite peculiar and unique in itself, it is for the mutual interest of both the seafarer and the employer why the employment status must be contractual only or for a certain period of time. Seafarers spend most of their time at sea and understandably, they can not stay for a long and an indefinite period of time at sea. Limited access to shore society during the employment will have an adverse impact on the seafarer. The national, cultural and lingual diversity among the crew during the COE is a reality that necessitates the limitation of its period. Court of Appeals erred in ruling that Tanchico was a regular employee of Petroleum Shipping. On 13th month pay: Tanchico was a contractual, not a regular, employee. Further, PD 851 does not apply to seafarers. Tanchico’s employment is governed by his Contract of Enlistment ("Contract"). The Contract has been approved by the POEA in accordance with Title I, Book One of the Labor Code and the POEA Rules Governing Employment. The coverage of the Contract includes Compensation, Overtime, Sundays and Holidays, Vacations, Living Allowance, Sickness, Injury and Death, Transportation and Travel Expense, Subsistence and Living Quarters. It does not provide for the payment of 13th month pay. The Contract of Employment, which is the standard employment contract of the POEA, likewise does not provide for the payment of 13th month pay. International School Alliance of Educators vs. Quisumbing Facts: International School, Inc., pursuant to PD 732, is a domestic educational institution established primarily for dependents of foreign diplomatic personnel and other temporary residents. To enable the School to continue carrying out its educational program and improve its standard of instruction, Section 2(c) of the same decree authorizes the School to employ its own teaching and management personnel selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt from otherwise applicable laws and regulations attending their employment, except laws that have been or will be enacted for the protection of employees. The School hires both foreign and local teachers as members of its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs four tests to determine whether a faculty member should be classified as a foreign-hire or a local hire: (a) What is one's domicile? (b) Where is one's home economy? (c) To which country does one owe economic allegiance? (d) Was the individual hired abroad specifically to

work in the School and was the School responsible for bringing that individual to the Philippines? Should the answer to any of these queries point to the Philippines, the faculty member is classified as a local hire; otherwise, he or she is deemed a foreign-hire. The School grants foreign-hires certain benefits not accorded local- hires. These include housing, transportation, shipping costs, taxes, and home leave travel allowance. Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires. The School justifies the difference on two "significant economic disadvantages" foreign-hires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The compensation scheme is simply the School's adaptive measure to remain competitive on an international level in terms of attracting competent professionals in the field of international education. Issue: WON local hire teachers shall enjoy same salary as foreign hire teachers where they perform the same work. Held: Employees are entitled to same salary for performance of equal work. Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in Article 7 thereof, provides: The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and favorable conditions of work, which ensure, in particular: ( a) Remuneration which provides all workers, as a minimum, with: (i) Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. This rule applies to the School. The School contends that petitioner has not adduced evidence that localhires perform work equal to that of foreign-hires. The Court finds this argument a little inconsiderate. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. If the employer pays one employee less than the rest, it is not for that employee to explain why he receives less or why the others receive more. The employer has discriminated against that employee; it is for the employer to explain why the employee is treated unfairly. In this case, the employer has failed to discharge this burden. There is no evidence here that foreign-hires perform 25% more efficiently or effectively than the local-hires. Both groups have similar functions and responsibilities, which they perform under similar working conditions. STATES MARINE CORPORATION V. CEBU SEAMAEN'S ASSOCIATION

Facts: Petitioners States Marine Corporation and Royal Line, Inc. were engaged in the business of marine coastwise transportation, employing therein several steamships of Philippine registry. They had a collective bargaining contract with the respondent Cebu Seamen's Association, Inc. The respondent union filed with the CIR a petition against the States Marine Corporation alleging that the officers and men working on board the petitioners' vessels have not been paid their sick leave, vacation leave and overtime pay; that the petitioners threatened or coerced them to accept a reduction of salaries, observed by other shipowners; that after the Minimum Wage Law had taken effect, the petitioners required their employees on board their vessels, to pay the sum of P.40 for every meal, while the masters and officers were not required to pay their meals and that because Captain Carlos Asensi had refused to yield to the general reduction of salaries, the petitioners dismissed said captain who now claims for reinstatement and the payment of back wages from December 25, 1952, at the rate of P540.00, monthly. The petitioners' shipping companies, answering, averred that very much below 30 of the men and officers in their employ were members of the respondent union; that the work on board a vessel is one of comparative ease; that petitioners have suffered financial losses in the operation of their vessels and that there is no law which provides for the payment of sick leave or vacation leave to employees or workers of private firms; that as regards the claim for overtime pay, the petitioners have always observed the provisions of Comm. Act No. 444, (Eight-Hour Labor Law), notwithstanding the fact that it does not apply to those who provide means of transportation; that the shipowners and operators in Cebu were paying the salaries of their officers and men, depending upon the margin of profits they could realize and other factors or circumstances of the business; that in enacting Rep. Act No. 602 (Minimum Wage Law), the Congress had in mind that the amount of P.40 per meal, furnished the employees should be deducted from the daily wages; that Captain Asensi was not dismissed for alleged union activities, but with the expiration of the terms of the contract between said officer and the petitioners, his services were terminated. A decision was rendered in favor of the respondent union. The companies filed the present writ of certiorari, bearing in mind the deep-rooted principle that the factual findings of the Court of Industrial Relations should not be disturbed, if supported by substantial evidence, the different issues are taken up, in the order they are raised in the brief for the petitioners. Issue: WON the cost of said meals may not be legally deducted from the wages or salaries of the aforesaid crew members by the herein petitioners. Held: It was shown by substantial evidence, that since the beginning of the operation of the petitioner's business, all the crew of their vessels have been signing "shipping articles" in which are stated opposite their names, the salaries or wages they would receive. All seamen, whether members of the crew or deck officers or engineers, have been furnished free meals by the ship owners or operators. It is, therefore, apparent that, aside from the

payment of the respective salaries or wages, set opposite the names of the crew members, the petitioners bound themselves to supply the crew with ship's provisions, daily subsistence or daily rations, which include food. We hold that such deductions are not authorized. In the coastwise business of transportation of passengers and freight, the men who compose the complement of a vessel are provided with free meals by the shipowners, operators or agents, because they hold on to their work and duties, regardless of "the stress and strain concomitant of a bad weather, unmindful of the dangers that lurk ahead in the midst of the high seas." It is argued that the food or meals given to the deck officers, marine engineers and unlicensed crew members in question, were mere "facilities" which should be deducted from wages, and not "supplements" which, according to said section 19, should not be deducted from such wages, because it is provided therein: "Nothing in this Act shall deprive an employee of the right to such fair wage ... or in reducing supplements furnished on the date of enactment." In short, the benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary earning or wage, is supplement; and when said benefit or privilege is part of the laborers' basic wages, it is a facility. The order CIR to the company to continue granting this privilege, was upheld by this Court. Millares et al., vs NLRC 305 SCRA 501 Facts: Petitioners numbering one hundred sixteen occupied the positions of Technical Staff, Unit Manager, Section Manager, Department Manager, Division Manager and Vice President in the mill site of respondent Paper Industries Corporation of the Philippines (PICOP) in Bislig, Surigao del Sur. In 1992 PICOP suffered a major financial setback allegedly brought about by the joint impact of restrictive government regulations on logging and the economic crisis. To avert further losses, it undertook a retrenchment program and terminated the services of petitioners. Accordingly, petitioners received separation pay computed at the rate of one (1) month basic pay for every year of service. Believing however that the allowances they allegedly regularly received on a monthly basis during their employment should have been included in the computation thereof they lodged a complaint for separation pay differentials. Issue: Whether the allowances are included in the definition of "facilities" in Art. 97, par. (f), of the Labor Code, being necessary and indispensable for their existence and subsistence.

Held: The allowances are not part of the wages of the employees. Wage is defined in letter (f) as the 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 services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. When an employer customarily furnishes his employee board, lodging or other facilities, the fair and reasonable value thereof, as determined by the Secretary of Labor and Employment, is included in "wage." Customary is founded on long-established and constant practice connoting regularity. The receipt of an allowance on a monthly basis does not ipso facto characterize it as regular and forming part of salary because the nature of the grant is a factor worth considering. The court agrees with the observation of the Office of the Solicitor General that the subject allowances were temporarily, not regularly, received by petitioners. Although it is quite easy to comprehend "board" and "lodging," it is not so with "facilities." Thus Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor Code gives meaning to the term as including articles or services for the benefit of the employee or his family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employer's business. In determining whether a privilege is a facility, the criterion is not so much its kind but its purpose. Revenue Audit Memo Order No. 1-87 pertinently provides —3.2… transportation, representation or entertainment expenses shall not constitute taxable compensation if: (a) It is for necessary travelling and representation or entertainment expenses paid or incurred by the employee in the pursuit of the trade or business of the employer, and (b) The employee is required to, and does, make an accounting/liquidation for such expense in accordance with the specific requirements of substantiation for such category or expense.Board and lodging allowances furnished to an employee not in excess of the latter's needs and given free of charge, constitute income to the latter except if such allowances or benefits are furnished to the employee for the convenience of the employer and as necessary incident to proper performance of his duties in which case such benefits or allowances do not constitute taxable income. The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of the Rules Implementing the Labor Code may from time to time fix in appropriate issuances the "fair and reasonable value of board, lodging and other facilities customarily furnished by an employer to his employees." Petitioners' allowances do not represent such fair and reasonable value as determined by the proper authority simply because the Staff/Manager's allowance and transportation allowance were amounts given by respondent company in lieu of actual provisions for housing and

transportation needs whereas the Bislig allowance was given in consideration of being assigned to the hostile environment then prevailing in Bislig. The inevitable conclusion is that subject allowances did not form part of petitioners' wages. SHS PERFORATED MATERIALS, INC vs. MANUEL F. DIAZ Facts: Petitioner SHS Perforated Materials, Inc. (SHS) is a start-up corporation organized and existing under the laws of the Republic of the Philippines and registered with the Philippine Economic Zone Authority. Petitioner Winfried Hartmannshenn (Hartmannshenn), a German national, is its president, in which capacity he determines the administration and direction of the day-to-day business affairs of SHS. Petitioner Hinrich Johann Schumacher, also a German national, is the treasurer and one of the board directors. As such, he is authorized to pay all bills, payrolls, and other just debts of SHS of whatever nature upon maturity. Schumacher is also the Executive Vice-President of the European Chamber of Commerce of the Philippines (ECCP) which is a separate entity from SHS. Both entities have an arrangement where ECCP handles the payroll requirements of SHS to simplify business operations and minimize operational expenses. Thus, the wages of SHS employees are paid out by ECCP, through its Accounting Services Department headed by Juliet Taguiang (Taguiang). Manuel F. Diaz (respondent) was hired by petitioner SHS as Manager for Business Development on probationary status from July 18, 2005 to January 18, 2006, with a monthly salary of P100,000.00. Respondent’s duties, responsibilities, and work hours were described in the Contract of Probationary Employment. Respondent was also instructed by Hartmannshenn to report to the SHS office and plant at least two (2) days every work week to observe technical processes involved in the manufacturing of perforated materials, and to learn about the products of the company, which respondent was hired to market and sell. During respondent’s employment, Hartmannshenn was often abroad and, because of business exigencies, his instructions to respondent were either sent by electronic mail or relayed through telephone or mobile phone. When he would be in the Philippines, he and the respondent held meetings. As to respondent’s work, there was no close supervision by him. Hartmannshenn expressed his dissatisfaction over respondent’s poor performance. In numerous electronic mail messages, respondent acknowledged his poor performance and offered to resign from the company. Respondent, however, denied sending such messages but admitted that he had reported to the SHS office and plant only eight (8) times from July 18, 2005 to November 30, 2005. In preparation for his trip to the Philippines, Hartmannshenn tried to call respondent on his mobile phone, but the latter failed to answer. Respondent claimed that he never received the messages.

Hartmannshenn instructed Taguiang not to release respondent’s salary. Later that afternoon, respondent called and inquired about his salary. Taguiang informed him that it was being withheld and that he had to immediately communicate with Hartmannshenn. Again, respondent denied having received such directive. The next day, respondent served on SHS a demand letter and a resignation letter and demanded salary for the period covering November 16 to 30, 2005, which has yet been unpaid and is still currently being withheld albeit illegally. It is precisely because of illegal and unfair labor practices such as these that I offer my resignation with neither regret nor remorse.6 Diaz met with Hartmannshenn in Alabang. The latter told him that he was extremely disappointed for the following reasons: his poor work performance; his unauthorized leave and malingering from November 16 to November 30, 2005; and failure to immediately meet Hartmannshenn upon his arrival from Germany. Petitioners averred that respondent was unable to give a proper explanation for his behavior. Hartmannshenn then accepted respondent’s resignation and informed him that his salary would be released upon explanation of his failure to report to work, and proof that he did, in fact, work for the period in question. He demanded that respondent surrender all company property and information in his possession. Respondent agreed to these "exit" conditions through electronic mail. Instead of complying with the said conditions, however, respondent sent another electronic mail message to Hartmannshenn and Schumacher on December 1, 2005, appealing for the release of his salary. Respondent, on the other hand, claimed that the meeting with Hartmannshenn took place in the evening of December 1, 2005, at which meeting the latter insulted him and rudely demanded that he accept P25,000.00 instead of his accrued wage and stop working for SHS, which demands he refused. Later that same night, he sent an electronic mail message appealing for the release of his salary. Another demand letter for respondent’s accrued salary for November 16 to November 30, 2005, 13th month pay, moral and exemplary damages, and attorney’s fees were sent on December 2, 2005. To settle the issue amicably, petitioners’ counsel advised respondent’s counsel by telephone that a check had been prepared in the amount of P50,000.00, and was ready for pick-up on December 5, 2005. Respondent countered that his counsel received petitioners’ formal reply letter only on December 20, 2005, stating that his salary would be released subsequent to the turn-over of all materials owned by the company in his possession. Respondent filed a Complaint7 against the petitioners for illegal dismissal; non-payment of salaries/wages and 13th month pay with prayer for reinstatement and full backwages; exemplary damages, and attorney’s fees, costs of suit, and legal interest.

THE RULING OF THE LABOR ARBITER: Declared complainant as having been illegally dismissed and further ordering his immediate reinstatement without loss of seniority rights and benefits. It is also ordered that complainant be deemed as a regular employee. The LA found that respondent was constructively dismissed because the withholding of his salary was contrary to Article 116 of the Labor Code as it was not one of the exceptions for allowable wage deduction by the employer under Article 113 of the Labor Code. He had no other alternative but to resign because he could not be expected to continue working for an employer who withheld wages without valid cause. The LA also held that respondent’s probationary employment was deemed regularized because petitioners failed to conduct a prior evaluation of his performance and to give notice two days prior to his termination as required by the Probationary Contract of Employment and Article 281 of the Labor Code. Petitioners’ contention that they lost trust and confidence in respondent as a managerial employee was not given credence for lack of notice to explain the supposed loss of trust and confidence and absence of an evaluation of respondent’s performance. The LA believed that the respondent complied with the obligations in his contract as evidenced by his electronic mail messages to petitioners. THE RULING OF THE NLRC: On appeal, the NLRC reversed the decision of the LA. The Decision dated June 15, 2006 is hereby REVERSED and SET ASIDE and a new one is hereby entered. The NLRC explained that the withholding of respondent’s salary was a valid exercise of management prerogative. The act was deemed justified as it was reasonable to demand an explanation for failure to report to work and to account for his work accomplishments. The NLRC held that the respondent voluntarily resigned as evidenced by the language used in his resignation letter and demand letters. Given his professional and educational background, the letters showed respondent’s resolve to sever the employer-employee relationship, and his understanding of the import of his words and their consequences. Consequently, respondent could not have been regularized having voluntarily resigned prior to the completion of the probationary period. The NLRC further noted that respondent’s 13th month pay was already integrated in his salary in accordance with his Probationary Contract of Employment and, therefore, no additional amount should be due him. THE RULING OF THE COURT OF APPEALS The CA reversed the NLRC resolutions in its December 23, 2008 Decision, the dispositive portion of said decision reads. CA held that withholding respondent’s salary was not a valid exercise of management prerogative as there is no such thing as a management prerogative to withhold wages temporarily. Petitioners’ averments of respondent’s failure to report to work were found to be unsubstantiated allegations not corroborated by any other evidence, insufficient to justify said withholding and lacking in probative value. The malicious withholding of respondent’s salary made it

impossible or unacceptable for respondent to continue working, thus, compelling him to resign. The respondent’s immediate filing of a complaint for illegal dismissal could only mean that his resignation was not voluntary. As a probationary employee entitled to security of tenure, respondent was illegally dismissed. The CA ruled out actual reinstatement, however, reasoning out that antagonism had caused a severe strain in their relationship. It was of the view that separation pay equivalent to at least one month pay would be a more equitable disposition. Issue: WON respondent was constructively dismissed by petitioners, which determination is, in turn, hinged on finding out (i) whether or not the temporary withholding of respondent’s salary/wages by petitioners was a valid exercise of management prerogative; and (ii) whether or not respondent voluntarily resigned. Held: The factual findings of the CA and the LA are contradictory to that of the NLRC. Thus, a review of the records is necessary to resolve the factual issues involved and render substantial justice to the parties. Although management prerogative refers to "the right to regulate all aspects of employment," it cannot be understood to include the right to temporarily withhold salary/wages without the consent of the employee. To sanction such an interpretation would be contrary to Article 116 of the Labor Code. Any withholding of an employee’s wages by an employer may only be allowed in the form of wage deductions under the circumstances provided in Article 113 of the Labor Code The Court finds petitioners’ evidence insufficient to prove that respondent did not work from November 16 to November 30, 2005. The nature of respondent’s job did not allow close supervision and monitoring by petitioners. Neither was there any prescribed daily monitoring procedure established by petitioners to ensure that respondent was doing his job. Therefore, granting that respondent failed to answer Hartmannshenn’s mobile calls and to reply to two electronic mail messages and given the fact that he admittedly failed to report to work at the SHS plant twice each week during the subject period, such cannot be taken to signify that he did not work from November 16 to November 30, 2005. Furthermore, the electronic mail reports sent to Hartmannshenn and the receipt presented by respondent as evidence of his having worked during the subject period were not controverted by petitioners. The eight notarized letters of prospective clients vouching for meetings they had with respondent during the subject period may also be given credence. The Court agrees with the LA and the CA that respondent was forced to resign and was, thus, constructively dismissed. It is of no moment that he served his resignation letter on November 30, 2005, the last day of the payroll period and a non-working holiday, since his salary was already due him on November 29, 2005, being the last

working day of said period. In fact, he was then informed that the wages of all the other SHS employees were already released, and only his was being withheld. What is significant is that the respondent prepared and served his resignation letter right after he was informed that his salary was being withheld. It is worthy to note that in his resignation letter, respondent cited petitioners’ "illegal and unfair labor practice"26 as his cause for resignation. As correctly noted by the CA, respondent lost no time in submitting his resignation letter and eventually filing a complaint for illegal dismissal just a few days after his salary was withheld. These circumstances are inconsistent with voluntary resignation and bolster the finding of constructive dismissal. Respondent was constructively dismissed and, therefore, illegally dismissed.1avvphi1 Although respondent was a probationary employee, he was still entitled to security of tenure. This Court has held that probationary employees who are unjustly dismissed during the probationary period are entitled to reinstatement and payment of full backwages and other benefits and privileges from the time they were dismissed up to their actual reinstatement.29 Respondent is, thus, entitled to reinstatement without loss of seniority rights and other privileges as well as to full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement. Respondent, however, is not entitled to the additional amount for 13th month pay, as it is clearly provided in respondent’s Probationary Contract of Employment that such is deemed included in his salary. Respondent’s reinstatement, however, is no longer feasible as antagonism has caused a severe strain in their working relationship. 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. Payment liberates the employee from what could be a highly oppressive work environment, and at the same time releases the employer from the obligation of keeping in its employ a worker it no longer trusts. Therefore, a more equitable disposition would be an award of separation pay equivalent to at least one month pay, in addition to his full backwages, allowances and other benefits. With respect to the personal liability of Hartmannshenn and Schumacher, this Court has held that corporate directors and officers are only solidarily liable with the corporation for termination of employment of corporate employees if effected with malice or in bad faith.32 Bad faith does not connote bad judgment or negligence; it imports dishonest purpose or some moral obliquity and conscious doing of wrong; it means breach of unknown duty through some motive or interest or ill will; it partakes of the nature of fraud.33 To sustain such a finding, there should be evidence on record that an officer or director acted maliciously or in bad faith in terminating the employee.34

Petitioners withheld respondent’s salary in the sincere belief that respondent did not work for the period in question and was, therefore, not entitled to it. There was no dishonest purpose or ill will involved as they believed there was a justifiable reason to withhold his salary. Thus, although they unlawfully withheld respondent’s salary, it cannot be concluded that such was made in bad faith. Accordingly, corporate officers, Hartmannshenn and Schumacher, cannot be held personally liable for the corporate obligations of SHS. Rosario Bros v. Ople FACTS: Private respondents are tailors, pressers, stitchers and similar workers hired by the petitioner in its tailoring department (Modes Suburbia). Some had worked there since 1969 until their separation on January 2, 1978. For their services, they were paid weekly wages on piecework basis, minus the withholding tax per Bureau of Internal Revenue (BIR) rules. Further, they were registered with the Social Security System (SSS) as employees of petitioner and premiums were deducted from their wages; they were also members of the Avenida-Cubao Manila COD Department Store Labor Union which has a Collective Bargaining Agreement with the company and; they were required to report for work from Monday through Saturday and to stay in the tailoring shop for no less than eight (8) hours a day, unless no job order was given them after waiting for two to three hours, in which case, they may leave and may come back in the afternoon. Their attendance was recorded through a bundy clock just like the other employees of petitioner. A master cutter distributes job orders equally, supervises the work and sees to it that they were finished as soon as possible. On September 7, 1977, the private respondents filed with the Regional Office of the Department (now Ministry) of Labor a complaint for violation of Presidential Decree 851 (13th month pay) and Presidential Decree 525, as amended by Presidential Decree 1123 (Emergency Living Allowance) against herein petitioner. After petitioner had filed its answer, the case was certified for compulsory arbitration to the Labor Arbiter who, after due hearing, rendered a decision on December 29, 1977 dismissing "private respondents" claims for unpaid emergency living allowance and 13th month pay, for lack of merit, upon finding that the complainants (herein private respondents) are not employees of the respondent (herein petitioner) within the meaning of Article 267(b)of the Labor Code. As a consequence, the private respondents were dismissed on January 2, 1978 and this prompted them to file a complaint for illegal dismissal with the Ministry of Labor. Meanwhile, the National Labor Relations Commission (NLRC) affirmed the decision of the Labor Arbiter and dismissed private respondents' appeal for lack of merit. Labor Arbiter, issued an order directing the Chief of the Research and Information Department of the Commission to designate a Socio-Economic Analyst to compute the balance of private respondents' claims for the 13th

month pay and emergency living allowance in accordance with respondent Minister's decision of March 27, 1979. Pursuant thereto, a report, dated March 4, 1980, was submitted computing the balance of private respondents' claims for emergency living allowance and 13th month pay up to February 29,1980 in the total amount of P71,131.14. A writ of execution was issued for the satisfaction of said amount. ISSUE: WON an employer-employee relationship exists between petitioner and private respondents HELD: Yes. The existence of ER-EE relationship is determined by: the selection and engagement of employee, payment of wages, power of dismissal, power to control employee’s conduct. An independent contractor is the one who exercises independent employment and contracts to do a piece of work according to his own methods without being subjected to control of his employer except as to the result of his work. In the case at bar, the selection and hiring of respondents was done by petitioner through the master cutter. Respondents received their weekly wages from petitioner on piece-work basis within the meaning of the term “wage” under the Labor Code, which defined as “the remuneration or earnings. However, designated, whether fixed on a time, task, piece or commission basis, payable by an employer to an employee under a written or unwritten contact for work done or to be done or for services rendered or to be rendered. Petitioner also had the power to dismiss respondents, thus, the latter’s conduct was controlled by petitioner. Respondents were allowed to register with SSS and withholding taxes were also deducted from their wages. Wherefore, petition is dismissed. TRADERS ROYAL BANK, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION & TRADERS ROYAL BANK EMPLOYEES UNION, respondents.

FACTS: On November 18, 1986, the Union, through its president, filed a letter-complaint against TRB with the Conciliation Division of the Bureau of Labor Relations and on March 24, 1987, the Secretary of Labor certified the complaint to the NLRC for resolution of the following issues raised by the complainants:

l) The Management of TRB per memo dated October 10, 1986 paid the employees their holiday pay but has withheld from the union the basis of their computation.

2) The computation in question has allegedly decreased the daily salary rate of the employees. This diminution of existing benefits has decreased our overtime rate and has affected the employees' take home pay. 3) The diminution of benefits being enjoyed by the employees since the (sic) immemorial, e.g. mid-year bonus, from two (2) months gross pay to two (2) months basic and year-end bonus from three (3) months gross to only two (2) months. 4) The refusal by management to recall active union members from the branches which were being transferred without prior notice, solely at the instance of the branch, manager.

On September 2, 1988, the NLRC rendered a decision in favor of the employees, the dispositive portion of whichreads:1. Holiday differential for the period covering l983-1986 as embodied in Resolution No. 4984-1986 of respondent's Board of Directors but to start from November 11, 1983 and using the Divisor 251 days in determining the daily rate of the employees; 2. Mid-year bonus differential representing the difference between two (2) months gross pay and two (2) months basic pay and end-year bonus differential of one (1) month gross pay for 1986.The claim for holiday differential for the period earlier than November 11, 1983 is hereby dismissed, the same having prescribed. Likewise, the charge of unfair labor practice against the respondent company is hereby dismissed for lack of merit.

ISSUE: Whether or not the bonus is demandable?

DECISION: No. From 1979-1985, the bonuses were less because the income of the Bank had decreased. In 1986, the income of the Bank was only 20.2 million pesos, but the Bank still gave out the usual two (2) months basic mid-year and two months gross year-end bonuses. The petitioner pointed out, however, that the Bank weakened considerably after 1986 on account of political developments in the country. Suspected to be a Marcos-owned or controlled bank, it was placed under sequestration by the present administration and is now managed by the PCGG. In the light of these submissions of the petitioner, the contention of the Union that the granting of bonuses to the employees had ripened into a company practice that may not be adjusted to the prevailing financial condition of the Bank has no legal and moral bases. Its fiscal condition having declined, the Bank may not be forced to distribute bonuses which it can no longer afford to pay and, in effect, be penalized for its past generosity to its employees. Private respondent's contention, that the decrease in the midyear and year-end bonuses constituted a diminution of the employees' salaries, is not correct, for bonuses are not part of labor

standards in the same class as salaries, cost of living allowances, holiday pay, and leave benefits, which are provided by the Labor Code. NLRC reversed.

*not sure which is the real assigned case, here’s another case

TRADERS ROYAL BANK, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ROGELIO ESPAÑOLA, respondent. FACTS: Agro-Commercial Security Services Agency Inc. (AGRO) assigned Rogelio Española to work as a janitor at the Iloilo Branch of petitioner Traders Royal Bank (TRB). This assignment was covered by Mission Order No. 29 dated 26 June 1974 which was duly issued by the Administrative Officer of AGRO, Alberto G. Espinosa.[1] Sometime in 1982 Española was informed that he would be absorbed by a new agency, Royal Protective and Janitorial Services Inc. (ROYAL), and that he would perform the same functions.[2] However, since ROYAL was also managed and owned by the same people who previously handled AGRO, it did not give him separation pay or any other benefits. ROYAL also appointed Alberto G. Espinosa, AGRO’s former Administrative Officer, as its General Manager.

TRB and ROYAL executed a new service agreement whereby ROYAL would continue supplying janitorial services TRB for one year, beginning 23 March 1988.[4] The contract also stated that if there was no notice to terminate at the end of the one (1) year period it would remain in force on a monthly basis. When the service agreement expired on 23 March 1989 TRB did not issue a termination notice. Instead, it continued to avail of ROYAL’s services on a monthly basis as stated in the contract. It was only on 4 February 1994 that TRB sent a letter to ROYAL apprising the latter of its desire to terminate the service agreement effective 16 March 1994.[5] In turn, ROYAL sent a notice to private respondent Española informing him that due to TRB's decision to end their contract his services were no longer needed.[6] After being dismissed ROYAL declined to give him any further assignment since his job was allegedly coterminus with its contract with TRB. Española filed a case against ROYAL, TRB and Alberto Espinosa for illegal dismissal, illegal deduction, underpayment of wages, non-payment of overtime pay, premium pay for rest day, service incentive leave pay, 13th month pay and night shift differentials with a prayer for reinstatement and back wages. He also claimed moral and exemplary damages as well as attorney’s fees.

Labor Arbiter ruled in favor of TRB holding that Española had no cause of action against it as there was no employer-employee relationship between them. National Labor Relations Commission (NLRC) reversed the decision of the Labor Arbiter and ruled that Española was not an employee of ROYAL but of TRB. NLRC then ordered TRB to reinstate him and to pay him the total amount of P110,829.78 broken down as follows: P81,265.90 for back wages, P736.92 for ERA, P15,698.08 for salary differentials, P3,143.45 for 13th month pay and P10,075.00 for attorney’s fees.

After its motion for reconsideration was denied TRB filed this special civil action for certiorari contending that the NLRC gravely abused its discretion in reversing the Labor Arbiter’s decision and declaring Española to be its employee.

ISSUE and RULING: 1) Who was Española’s real employer? To prove that Española was not its employee TRB cites Mission Order No. 29 signed by AGRO Administrative Officer Alberto G. Espinosa. The order stated that Rogelio Española would be assigned as janitor to TRB’s Iloilo Branch. It also provided that his employment would be from 26 January 1974 until revoked.[11] TRB argues that this proves that AGRO was Española’s employer from 1974 to 1982. And when he agreed to be absorbed by ROYAL he became its employee from 1982 to 1994. Hence, he was never employed by TRB. To bolster its contention TRB refers to the provisions of its service agreement with ROYAL. TRB asserts that aside from the agreement itself which reveals that it was ROYAL which provided the janitors’ salary, par. 2 thereof also states that the janitors were its own employees. Thus, Española’s dismissal was the result of a valid termination of its service agreement with ROYAL. We are not convinced. This Court has ruled that the existence of employer-employee relationship cannot be proved by merely showing the agreement of the parties.[12] It is a question of fact which should be supported by substantial evidence.[13] And in determining the existence of such relationship the elements usually considered are: (a) the selection of the employee; (b) the payment of wages; (c) the power of dismissal; and, (d) the power to control the employee’s conduct, with the "control test" generally assuming primacy in the overall consideration.[14] 2) Who then had control over Española's conduct? Was it ROYAL or TRB? We believe it was TRB. The allegations contained in the position paper of Española were never refuted. TRB could have easily presented affidavits, written explanations or any other pleadings to defend itself and disprove Española’s claims.[16] However, the only evidence it ever presented was its service agreement with ROYAL. From the time TRB

submitted its position paper to the Labor Arbiter up to the time it submitted its memorandum to the Supreme Court, not once did it deny that it designated Española as its driver. On the other hand, Española constantly reiterated in his pleadings that TRB supervised and controlled his work as its janitor-driver. The fact that Española’s allegations were never controverted at any stage of the proceedings affirms that such averments were true.[17] Furthermore, Rule 9, Sec. 11, of the Rules of Court, which supplements the NLRC rules, also provides that an allegation which is not specifically denied is deemed admitted.[18] The NLRC therefore did not abuse its discretion in ruling that Española was not the employee of ROYAL. On the contrary, it was the Labor Arbiter who came up with the erroneous conclusion. He disregarded the uncontroverted allegations of Española and hastily concluded that since ROYAL was an independent contractor, it was Española’s direct employer. While it may be that ROYAL could very well be an independent contractor - although it did not establish this fact with competent evidence to qualify it as such - and that Española’s name appeared in its payroll, [22] nevertheless, whatever role ROYAL had in this case, it was certainly not as the employer of Española. For the fact remains that it was TRB which had control and supervision over Española’s work. Consequently, it should be considered as his employer. Since Española was illegally dismissed he is entitled to reinstatement with full back wages.[23] The NLRC erred in ruling that he was only entitled to back wages from 16 March 1994 to 30 September 1996. An illegally dismissed employee is entitled to back wages from the time he was dismissed to the time of his actual reinstatement.[24] However, the NLRC’s ruling with regard to the salary differentials and 13th month pay differentials must be sustained. WHEREFORE, the petition is DISMISSED. The assailed Decision of public respondent National Labor Relations Commission reversing that of the Labor Arbiter and ordering petitioner Traders Royal Bank to reinstate private respondent Rogelio Espanola and to pay him salary differentials of P15,698.00, 13th month pay differentials of P3,143.45 and attorney's fees of P10,075.43 is AFFIRMED, but with the modification that petitioner should pay private respondent full back wages from 16 March 1994 up to his actual reinstatement. Costs again G.R. No. 167217, February 4, 2008, P.I. MANUFACTURING, INCORPORATED, petitioner, vs. P.I. MANUFACTURING SUPERVISORS AND FOREMAN ASSOCIATION and the NATIONAL LABOR UNION,respondents.

FACTS: RA 6640 was signed into law on 10 December 1987, providing, among others, an increase in the statutory minimum wage and salary rates of employees and workers in the private sector. It provides that the minimum wage of workers and employees in the private sector shall be

increased by P10, except those outside Manila who shall receive an increase of P11, provided those that are already receiving above the minimum wage shall receive an increase of P10. PI Manufacturing Supervisors and Foremen Association (PIMASUFA) entered into a new CBA whereby the supervisors were granted an increase of P625 per month and the foremen, P475 per month. The increases were made to retroact to 12 May 1987, or prior to the passage of RA 6640. The application of said CBA resulted in a wage distortion, which prompted the PIMASUFA together with the National Labor Union to file a case against PIMA for violation of RA 6640. PIMA asseverates that the Company and Supervisors and Foremen Contract absolves, quitclaims, and releases the company for any monetary claim that the supervisors and the foremen may have previous to the signing of the agreement on 17 December 1987The Labor Arbiter ruled in favor of PIMASUFA and ordered PIMA to give the PIMASUFA members wage increases equivalent to 13.5% of their basic pay. The CA affirmed, but raised the wage increase to 18.5%.

Issues: 1 W/N the PIMASUFA, by signing The Company and Supervisors and Foremen Contract, has waived any benefit it may have under RA 6640. 2 W/N the 13.5% increase in the supervisors and foremen’s basic salary should be increased to 18.5% to correct the wage distortion brought about by the implementation of RA 6640.

Ruling: 1 NO. The increase resulting from any wage distortion brought about by the implementation of the new minimum wage law is not waivable. 2 NO. Although there was a wage distortion, the same was cured or remedied when PIMASUFA entered into the1987 CBA with PIMA after the effectivity of RA 6640. The 1987 CBA increased the monthly salaries of the supervisors by P626 and P475, which re-establishes the gap not only between supervisors and foremen but also between them and the rankand-file employees. Such gap as re-established by virtue of the CBA is more than a substantial compliance with RA 6640. Moreover, requiring PIMA to pay 18.5%, over and above the negotiated wage increases provided under the 1987 CBA, is highly unfair and oppressive to the former. A CBA constitutes the law between the parties when freely and voluntarily entered into. It was not shown that PIMASUFA was coerced or forced by PIMA to sign the 1987 CBA. All of its 13 officers signed the CBA with the assistance of NLU. They signed it fully aware of the passage of RA 6640. The duty to bargain requires that the parties deal with each other with open and fair minds. PIMASUFA cannot invoke the beneficial provisions of the1987 CBA but disregard the concessions it voluntarily extends to PIMA.

Doctrine: Quitclaims by laborers are generally frowned upon as contrary to public policy and are held to be ineffective to bar recovery for the full measure of the worker’s rights. The reason for the rule is that the employer and the employee do not stand on the same footing. Article 1149 of the Civil Code states that: When the law sets, or authorizes the setting of a minimum wage for laborers, and a contract is agreed upon by which a laborer accepts a lower wage, he shall be entitled to recover the deficiency.

According to RA 6727, wage distortion is a situation where an increase in prescribed wage results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation. Otherwise stated, wage distortion means the disappearance or virtual disappearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order. The goal of collective bargaining is the making of agreements that will stabilize business conditions and fix fair standards of working conditions. At this juncture, it must be stressed that a CBA constitutes the law between the parties when freely andvoluntarily entered into.13 Here, it has not been shown that respondent PIMASUFA was coerced or forced by petitioner to sign the 1987 CBA. All of its thirteen (13) officers signed the CBA with the assistance of respondent NLU. They signed it fully aware of the passage of R.A. No. 6640. The duty to bargain requires that the parties deal with each other with open and fair minds. A sincere endeavor to overcome obstacles and difficulties that may arise, so that employeremployee relations may be stabilized and industrial strife eliminated, must be apparent.14Respondents cannot invoke the beneficial provisions of the 1987 CBA but disregard the concessions it voluntary extended to petitioner. The goal of collective bargaining is the making of agreements that will stabilize business conditions and fix fair standards of working conditions.15 Definitely, respondents’ posture contravenes this goal. In fine, it must be emphasized that in the resolution of labor cases, this Court has always been guided by the State policy enshrined in the Constitution that the rights of workers and the promotion of their welfare shall be protected. However, consistent with such policy, the Court cannot favor one party, be it labor or management, in arriving at a just solution to a controversy if the party concerned has no valid support to its claim, like respondents here. WHEREFORE, we GRANT petitioner’s motion for reconsideration and REINSTATE the petition we likewise GRANT. G.R. No. 162411, June 30, 2008, NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. (NIASSI), represented by RAMON M.

CALO, petitioner, vs.NASIPIT EMPLOYEES LABOR UNION (NELU)-ALU-TUCP, represented by DONELL P. DAGANI, respondent. FACTS: NIASSI is a domestic corporation with office at Talisay, Nasipit, Agusan del Norte. Respondent Nasipit EmployeesLabor Union (Union) was and may still be the collective bargaining agent of the rank-and-file employees of NIASSI and is a local chapter of the Associated Labor Union. The dispute started when, in October 1999, the Regional Tripartite Wages and Productivity Board (Wage Board) of Caraga Region in Northeastern Mindanao issued Wage Order No. (WO) RXIII-02 which granted an additional PhP12 per day cost of living allowance to the minimum wage earners in that region. Owing allegedly to NIASSI’s failure to implement the wage order, the Union filed a complaint before the DOLE Caraga Regional Office for the inspection of NIASSI’s records and the enforcement of WO RXIII-02. A DOLE inspection team was accordingly dispatched and reported that WO RXIII-02 was not applicable to NIASSI’s employees since they were already receiving a wage rate higher than the prescribed minimum wage. Upon motion by the Union, the DOLE Regional Director indorsed the case to the NLRC Regional Arbitration Branch for further hearing, which in turn referred the case to the NCMB for voluntary arbitration. On February 22, 2002, Voluntary Arbitrator Jesus G. Chavez rendered a decision granting the Union’s prayer for the implementation of WO RXIII02 on the rationale that WO RXIII-02 did not specifically prohibit the grant of wage increase to employees earning above the minimum wage. On the contrary, Chavez said, the wage order specifically enumerated those who are outside its coverage, but did not include in the enumeration those earning above the minimum wage. He also held that the Collective Bargaining Agreement (CBA) between NIASSI and the Union provides that wage increases granted by the company within one year from CBA signing shall not be creditable to future legally mandated wage increases. Following the denial of its motion for reconsideration, NIASSI filed with the CA a petition for review, which affirmed the decision of the voluntary arbitrator.

ISSUE: WON the wage order may be made to apply and cover Nasipit’s employees who, at the time of the issuance and effectivity of the wage order, were already receiving a wage rate higher than the prevailing minimum wage.

DECISION: No. It is abundantly clear from the above quoted provisions of WO RXIII-02 and its IRR that only minimum wage earners are entitled to the prescribed wage increase. Expressio unius est exclusio alterius.6 The express mention of one person, thing, act, or consequence excludes all others. The beneficent, operative provision of WO RXIII-02 is specific enough to cover only minimum wage earners. Necessarily excluded are those receiving rates above the prescribed minimum wage. The only situation when employees receiving a wage rate higher than that

prescribed by the WO RXIII-02 may still benefit from the order is, as indicated in Sec. 1 (c) of the IRRs, through the correction of wage distortions. Clearly then, only employees receiving salaries below the prescribed minimum wage are entitled to the wage increase set forth under WO RXIII-02, without prejudice, of course, to the grant of increase to correct wage distortions consequent to the implementation of such wage order. Considering that NIASSIs employees are undisputedly already receiving a wage rate higher than that prescribed by the wage order, NIASSI is not legally obliged to grant them wage increase.CA reversed.

** Petitioner’s reliance on the above quoted CBA provision and on the flawed arbitrator’s case disposition is really misplaced. Consider that in his decision, Chavez, after admitting that NIASSI’s employees were receiving a wage rate higher than the prescribed minimum wage, proceeded to fault NIASSI for not presenting evidence to show that the overage or excess resulted from general wage increases granted by the company itself within one year from the effectivity of the CBA in 1997. By simplistically utilizing the adage "doubt is resolved in labor," instead of relying on the case records and the evidence adduced, the voluntary arbitrator extended the coverage of WO RXIII-02 to include those who, by the terms of the order, are not supposed to receive the benefit. If only the voluntary arbitrator was circumspect enough to consider the facts on hand, he would have seen that the CBA provision on non-creditability finds no application in the present case, because creditability is not the real issue in this case. And neither is the interpretation of the CBA provision. The real issue in this case, as discussed above, is the coverage and application of WO RXIII-02. While it behooves the Court to accord protection to the working class, tilting the balance of justice in its favor whenever appropriate, it is not possible to resolve every dispute to further the cause of labor. In every case, justice is to be granted to the deserving and dispensed in the light of established facts and the applicable law and doctrine, DISMISSED for lack of merit. ALLIED INVESTIGATION BUREAU, INC., Petitioner, v. HON. SECRETARY OF LABOR & EMPLOYMENT, acting through Undersecretary CRESENCIANO B. TRAJANO, Respondents. FACTS: Petitioner Allied Investigation Bureau, Inc. is a security agency. On January 11, 1994, it entered into a security contract with Novelty Philippines, Inc. (NPI, for brevity) whereby it obligated itself to provide security services to the latter. Private respondents Melvin T. Pelayo and Samuel Sucanel, two of the security guards assigned by petitioner to NPI, filed a complaint with the Office of respondent Regional Director Romeo A. Young charging petitioner with non-compliance with Wage Order No. NCR03,[2 which increased the minimum daily pay of workers by P17.00, or from P118.00 toP135.00 effective December 16, 1993; and further, by P10.00, or from P135.00 to P145.00 daily beginning April 1, 1994. Private respondents, likewise, sought the recovery of wage differentials.

On February 9 and 14, 1995, the Office of Regional Director Young conducted inspection visits at petitioners establishment. Senior Labor Enforcement Officer Eduvigis A. Acero issued a Notice of Inspection Results. (the above computed wage differentials form part of the legal remunerations of the complainants, respondent ALLIED INVESTIGATION BUREAU, INC., is hereby ordered to pay to the ninety-two employees the total amount of EIGHT HUNDRED SEVEN THOUSAND FIVE HUNDRED SEVENTY PESOS AND THIRTY-SIX CENTAVOS (P807.570.36) to be distributed to the individual employees in accordance with the schedule mentioned above, within ten (10) days from receipt hereof. Otherwise, Writ of execution shall issue to enforce this Order.The issue on the nonremittance of SSS premiums is hereby indorsed to the Social Security System, the same being within its jurisdiction to properly pass upon.) Petitioner appealed the Order to respondent Secretary of Labor and Employment, without however, posting a cash or surety bond equivalent to the monetary award in the said Order appealed from. On September 19, 1995, the Secretary of Labor, thru Undersecretary Cresenciano B. Trajano issued an Order dismissing petitioners appeal for failure to perfect said appeal. ISSUES: a. Whether or not respondent Regional Director acted without jurisdiction in adjudicating the private respondents money claims where the aggregate money claim of each of them exceeds P5,000.00. b. Whether or not respondent Secretary of Labor & Employment, acting through Undersecretary Cresenciano B. Trajano, acted with grave abuse of discretion in dismissing herein petitioners appeal attacking the jurisdiction of respondent Regional Director in adjudicating subject money claims of private respondents. HELD: Petitioner argues that the power to adjudicate money claims belongs to the Labor Arbiter who has exclusive jurisdiction over employees claims where the aggregate amount of the claims of each employee exceeds P5,000.00.[10 Petitioners cites Articles 129 and 217 of the Labor Code of the Philippines which provide, respectively, that the power of the Regional Director to adjudicate employees money claims is subject to the condition that the aggregate money claims of each employee does not exceed P5,000.00; and, that the Labor Arbiter has jurisdiction over all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement. Petitioner further contends that since the Order appealed from is void and without legal effect, said Order never assumed finality and, therefore, it was improper for the respondent Secretary of Labor to outrightly dismiss the appeal on the ground that petitioner failed to post a cash/surety bond.

Petitioner alleges that respondent Secretary of Labor acted with grave abuse of discretion in evading its duty to entertain the appeal on a technical ground. Finally, petitioner prays for the issuance of a temporary restraining order or a writ of preliminary injunction as the enforcement of the alleged void orders would cause them great prejudice if not irreparable damage. Petitioners arguments are untenable.While it is true that under Articles 129[14 and 217[15 of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do not contemplate nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives. Rather, said powers are defined and set forth in Article 128 of the Labor Code (as amended by R.A. No. 7730) thus: Art. 128. Visitorial and enforcement power. - (a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. An order issued by the duly authorized representatives of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said 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 reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. In the case at bar, the Office of respondent Regional Director conducted inspection visits at petitioners establishment on February 9 and 14, 1995 in accordance with the above-mentioned provision of law. In the course of said inspection, several violations of the labor standard provisions of the

Labor Code were discovered and reported by Senior Labor Enforcement Officer Eduvigis A. Acero in his Notice of Inspection Results. It was on the bases of the aforesaid findings (which petitioner did not contest), that respondent Regional Director issued the assailed Order for petitioner to pay private respondents the respective wage differentials due them. Clearly, as the duly authorized representative of respondent Secretary of Labor, and in the lawful exercise of the Secretarys visitorial and enforcement powers under Article 128 of the Labor Code, respondent Regional Director had jurisdiction to issue his impugned Order. 2) The issue of whether or not the respondent Secretary of Labor acted with grave abuse of discretion in dismissing petitioners appeal on the ground that petitioner failed to post the required cash or surety bond, we rule in the negative. Article 128 of the Labor Code likewise explicitly provides that in case an order issued by the duly authorized representative of the Secretary of Labor and Employment involves a monetary award, an appeal by the employer may be perfected only upon posting of a cash or surety bond in an amount equivalent to the monetary award in the order appealed from. The Office of the Solicitor General: since the Order appealed from involves a monetary award, an appeal by petitioner may be perfected only upon posting of a cash or surety bond issued by a reputable bonding company duly accredited by respondent Secretary of Labor in the amount equivalent to the monetary award in the Order appealed from. It is undisputed that petitioner herein did not post a cash or surety bond when it filed its appeal with the Office of respondent Secretary of Labor. Consequently, petitioner failed to perfect its appeal on time and the Order of respondent Regional Director became final and executory. The Secretary of Labor and Employment thru Undersecretary Cresenciano B. Trajano correctly dismissed petitioners appeal. The instant petition is hereby DENIED for lack of merit. CIRINEO BOWLING PLAZA, INC., Petitioner, vs. GERRY SENSING, BELEN FERNANDEZ, et. al., DEPARTMENT OF LABOR AND EMPLOYMENT and COURT of APPEALS, Respondents. FACTS: Eligio Paolo, Jr., an employee of petitioner, filed a letter complaint with the Department of Labor and Employment (DOLE for short), Dagupan District Office, Dagupan City, requesting for the inspection/investigation of petitioner for various labor law violations like underpayment of wages, 13thmonth pay, non-payment of rest day pay, overtime pay, holiday pay and service incentive leave pay.[3]Pursuant to the visitorial and enforcement powers of the Secretary of Labor and Employment, his duly authorized representative under Article 128 of the Labor Code, as amended, conducted inspections on petitioner's establishment the following day. In his inspection report,[4] Labor and Employment Officer III, Crisanto Rey Dingle, found that petitioner has thirteen[5] employees and

had committed the following violations: underpayment of minimum wage, 13th month pay, holiday premiums, overtime premiums, and non-payment of rest day. The findings in the inspection report were explained to petitioner's officer-in-charge, Ma. Fe Boquiren, who signed the same. The first hearing of the case was scheduled on December 27, 1995, but petitioner failed to appear, thus, the hearing was reset to January 10, 1996. On the date set, Boquiren, as petitioner's representative, appeared with the information that petitioner's President/General Manager Luisito Cirineo was sick and confined in a hospital. On the January 19, 1996 hearing, Cirineo appeared and asked for more time to settle with his employees. The case was again set on January 26, 1996 but Cirineo failed to appear. On April 22, 1996, an Order[6] was issued by the DOLE Regional Office, the dispositive portion of which reads: WHEREFORE, premises considered and considering further that the amount computed constitutes part of the lawful remunerations of thirteen affected employees, respondent is hereby ordered to pay them the total amount of THREE HUNDRED SEVENTY SEVEN THOUSAND FIVE HUNDRED PESOS AND 58/100. (P377,500.58), representing their unpaid/underpaid wages, 13thmonth pay, holiday premiums, rest day pay and overtime premiums distributed. petitioner's representative, Carmen Zapata, appeared before the DOLE Regional Office and submitted the quitclaims, waivers and releases of employees-awardees, Lamberto Solano, Jovelyn Quinto, Manuel Benitez, Edgar Dizon, Ronillo Tandoc, Eligio Paolo, Jr., and Dario Benitez. Later, however, Benitez, Tandoc, Quinto and Dizon wrote DOLE a letter denying having received any amount from petitioner. Thus, DOLE's inspector Dingle went to petitioner's establishment to confirm the authenticity of the quitclaims and releases and talked to the employees concerned who stated that they signed the document without knowing its contents but they are willing to settle if they will be given the amount computed by DOLE. On June 19, 1996, Luisito Cirineo and a certain Fe Cirineo Octaviano, owner of Esperanza Seafoods Kitchenette stationed in petitioner's establishment, wrote DOLE a letter requesting that the case be endorsed to the National Labor Relations Commission since the resolution of the case required evidentiary matters not disclosed or verified in the normal course of inspection. They also submitted documents to show that petitioner and Esperanza Seafoods Kitchenette are separate and distinct business entities and that some of the employees-awardees are actually employees of the Esperanza Seafoods Kitchenette. Petitioner filed its Memorandum of Appeal to the Secretary of Labor and Employment[14] who dismissed the appeal on the ground that same was filed out of time.[15] On motion for reconsideration, the appeal was granted and the appeal was given due course.

However, on March 30, 1999, DOLE Undersecretary Jose Espaol dismissed the appeal and affirmed the order. ISSUE: PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE INSTANT PETITION AND OUTRIGHT DISMISSAL OF PETITIONER'S MOTION FOR RECONSIDERATION DUE TO MERE TECHNICALITIES. RULING: We dismiss the petition. We find no grave abuse of discretion committed by the CA in issuing the assailed resolutions. The CA dismissed the petition for certiorari for failure of petitioner to attach certain documents and to state the material date. While petitioner filed its motion for reconsideration, attaching the required documents, the CA correctly found that it still did not state the material date when it received the DOLE's Resolution dated April 18, 2000 denying its motion for reconsideration. Thus, without the date of receipt of the denial of such motion, the CA could not determine whether the petition was filed within the reglementary period of sixty days for filing the petition for certiorari under Rule 65 of the Rules of Court. While there are exceptional cases where we set aside procedural defects to correct a patent injustice, there should be an effort on the part of the party invoking liberality to at least explain its failure to comply with the rules.[20] It appears that petitioner's new counsel failed to state the material date twice, first in its petition filed with the CA and, second, in its motion for reconsideration. Petitioner's explanation focused on the fact that its President, Luisito Cirineo, only learned of the DOLE's denial of its motion for reconsideration on August 1, 2000 when he came back from a trip from Europe; that efforts to communicate with its former counsel remained futile. We find such explanation unsatisfactory since the material dates can easily be verified from the files of the DOLE office. Even if we disregard technicality, we find the arguments raised by petitioner without merit. As correctly held by the DOLE Regional Director and sustained by the DOLE Undersecretary, records show that petitioner never refuted the findings of the labor inspector as to the identity of the thirteen employees nor raised the issue of separate juridical personalities of petitioner Cirineo and Esperanza Seafoods Kitchenette during the investigation and on the hearings conducted. Likewise, we sustain the jurisdiction of the DOLE Regional Director. The visitorial and enforcement powers of the DOLE Regional Director to order and enforce compliance with labor standard laws can be exercised even where the individual claim exceeds P5,000.00. DISMISSED. G.R. No. 78909, June 30, 1989, MATERNITY CHILDREN'S HOSPITAL, represented by ANTERA L. DORADO, President, petitioner, vs.THE HONORABLE SECRETARY OF LABOR AND THE REGIONAL DlRECTOR OF LABOR, REGION X,respondents.

Facts: Petitioner is a semi-government hospital, managed by the Board of Directors of the Cagayan de Oro Women's Club and Puericulture Center, headed by Mrs. Antera Dorado, as holdover President. The hospital derives its finances from the club itself as well as from paying patients, averaging 130 per month. It is also partly subsidized by the Philippine Charity Sweepstakes Office and the Cagayan De Oro City government. Petitioner has forty-one (41) employees. Aside from salary and living allowances, the employees are given food, but the amount spent therefor is deducted from their respective salaries (pp. 77-78, Rollo). On May 23, 1986, ten (10) employees of the petitioner employed in different capacities/positions filed a complaint with the Office of the Regional Director of Labor and Employment, Region X, for underpayment of their salaries and ECOLAS, which was docketed as ROX Case No. CW-7186. The Regional Director issued and order based on the reports of the Labor Standard and Welfare Officers, directing payment of P723, 888.58 representing underpayment of wages and ECOLAs to all the petitioner’s employees. Petitioner appealed to the Minister of Labor and Employment which modified the decision as to the period for the payment ECOLAs only. A motion for reconsideration was filed by petitioner and was denied by the Secretary of Labor. ISSUE and RULING: 1) Whether or not the Regional Director had jurisdiction over the case and if so, the extent of coverage of any award that should be forthcoming, arising from his visitorial and enforcement powers under Article 128 of the Labor Code. Labor standards refer to the minimum requirements prescribed by existing laws, rules, and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits, including occupational, safety, and health standards (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Office, dated September 16, 1987). 1 Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standards cases, and is therefore empowered to adjudicate money claims, provided there still exists an employer-employee relationship, and the findings of the regional office is not contested by the employer concerned. Prior to the promulgation of E.O. No. 111 on December 24, 1986, the Regional Director's authority over money claims was unclear. The complaint in the present case was filed on May 23, 1986 when E.O. No. 111 was not yet in effect, and the prevailing view was that stated in the case of Antonio Ong, Sr. vs. Henry M. Parel, et al., G.R. No. 76710, dated December 21, 1987, thus: . . . the Regional Director, in the exercise of his visitorial and enforcement powers under Article 128 of the Labor Code, has no authority to award

money claims, properly falling within the jurisdiction of the labor arbiter. . . .. . . If the inspection results in a finding that the employer has violated certain labor standard laws, then the regional director must order the necessary rectifications. However, this does not include adjudication of money claims, clearly within the ambit of the labor arbiter's authority under Article 217 of the Code. We believe, however, that even in the absence of E. O. No. 111, Regional Directors already had enforcement powers over money claims, effective under P.D. No. 850, issued on December 16, 1975, which transferred labor standards cases from the arbitration system to the enforcement system. EO 111 authorizes a Regional Director to order compliance by an employer with labor standards provisions of the Labor Code and other legislation. It is Our considered opinion however, that the inclusion of the phrase, " The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employer-employee still exists" ... in Article 128(b), as amended, above-cited, merelyconfirms/reiterates the enforcement adjudication authority of the Regional Director over uncontested money claimsin cases where an employer-employee relationship still exists. 6 Viewed in the light of PD 850 and read in coordination with MOLE Policy Instructions Nos. 6, 7 and 37, it is clear that it has always been the intention of our labor authorities to provide our workers immediate access (when still feasible, as where an employer-employee relationship still exists) to their rights and benefits, without being inconvenienced by arbitration/litigation processes that prove to be not only nerve-wracking, but financially burdensome in the long run. E.O. No. 111 was issued on December 24, 1986 or three (3) months after the promulgation of the Secretary of Labor's decision upholding private respondents' salary differentials and ECOLAs on September 24, 1986. The amendment of the visitorial and enforcement powers of the Regional Director (Article 128-b) by said E.O. 111 reflects the intention enunciated in Policy Instructions Nos. 6 and 37 to empower the Regional Directors to resolve uncontested money claims in cases where an employer-employee relationship still exists. This intention must be given weight and entitled to great respect. 2) Whether or not the Regional Director erred in extending the award to all hospital employees. We answer in the affirmative. The Regional Director correctly applied the award with respect to those employees who signed the complaint, as well as those who did not sign the complaint, but were still connected with the hospital at the time the complaint was filed (See Order, p. 33 dated August 4, 1986 of the Regional Director, Pedrito de Susi, p. 33, Rollo). The justification for the award to this group of employees who were not signatories to the complaint is that the visitorial and enforcement powers

given to the Secretary of Labor is relevant to, and exercisable over establishments, not over the individual members/employees, because what is sought to be achieved by its exercise is the observance of, and/or compliance by, such firm/establishment with the labor standards regulations. Necessarily, in case of an award resulting from a violation of labor legislation by such establishment, the entire members/employees should benefit therefrom. ACCORDINGLY, this petition should be dismissed, as it is hereby DISMISSED, as regards all persons still employed in the Hospital at the time of the filing of the complaint, but GRANTED as regards those employees no longer employed at that time. G.R. No. 74621 February 7, 1990, BROKENSHIRE MEMORIAL HOSPITAL, INC., petitioner, vs.THE HONORABLE MINISTER OF LABOR & EMPLOYMENT AND BROKENSHIRE MEMORIAL HOSPITAL EMPLOYEES AND WORKER'S UNION-FFW Represented by EDUARDO A. AFUAN, respondents. FACTS: This case originated from a complaint filed by private respondents against petitioner on September 21, 1984 with the Regional Office of the MOLE, Region XI, Davao City for non-compliance with the provisions of Wage Order No. 5. After due healing the Regional Director rendered a decision dated November 16, 1984 in favor of private respondents. Judgment having become final and executory, the Regional Director issued a Writ of Execution whereby some movable properties of the hospital (petitioner herein) were levied upon and its operating expenses kept with the bank were garnished. The levy and garnishment were lifted when petitioner hospital paid the claim of the private respondents (281 hospital employees) directly, in the total amount of P163,047.50 covering the period from June 16 to October 15, 1984. After making said payment, petitioner hospital failed to continue to comply with Wage Order No. 5 and likewise, failed to comply with the new Wage Order No. 6 which took effect on November 1, 1984, prompting private respondents to file against petitioner another complaint docketed as ROXILSED-14-85, which is now the case at bar. ISSUE: Whether or not the Regional Director has jurisdiction over money claims of workers concurrent with the Labor Arbiter. RULING: It will be observed that what in fact conferred upon Regional Directors and other hearing officers of the Department of Labor (aside from the Labor Arbiters) adjudicative powers, i.e., the power to try and decide, or hear and determine any claim brought before them for recovery of wages, simple money claims, and other benefits, is Republic Act 6715, provided that the following requisites concur, to wit: 1) The claim is presented by an employee or person employed in domestic or household service, or househelper under the code; 2) The claimant, no longer being employed, does not seek reinstatement; and 3) The

aggregate money claim of the employee or househelper does not exceed five thousand pesos (P5,000.00). In the absence of any of the three (3) requisites, the Labor Arbiters have exclusive original jurisdiction over all claims arising from employeremployee relations, other than claims for employee's compensation, social security, medicare and maternity benefits. Petitioner's contention that the constitutionality of Wage Order Nos. 5 and 6 should be passed upon by the National Labor Relations Commission, lacks merit. The Supreme Court is vested by the Constitution with the power to ultimately declare a law unconstitutional. Without such declaration, the assailed legislation remains operative and can be the source of rights and duties especially so in the case at bar when petitioner complied with Wage Order No. 5 by paying the claimants the total amount of P163,047.50, representing the latter's minimum wage increases up to October 16, 1984, instead of questioning immediately at that stage before paying the amount due, the validity of the order on grounds of constitutionality. The Regional Director is plainly ,without the authority to declare an order or law unconstitutional and his duty is merely to enforce the law which stands valid, unless otherwise declared by this Tribunal to be unconstitutional. On our part, We hereby declare the assailed Wage Orders as constitutional, there being no provision of the 1973 Constitution (or even of both the Freedom Constitution and the 1987 Constitution) violated by said Wage Orders, which Orders are without doubt for the benefit of labor. The labor regulations officers may not be deemed uncontested as to bring the case at bar within the competence of the Regional Director, as duly authorized representative of the Secretary of Labor, pursuant to Article 128 of the Labor Code, as amended. Considering further that the aggregate claims involve an amount in excess of P5,000.00, We find it more appropriate that the issue of petitioner hospital's liability therefor, including the proposal of petitioner that the obligation of private respondents to the former in the aggregate amount of P507,237.57 be used to offset its obligations to them, be ventilated and resolved, not in a summary proceeding before the Regional Director under Article 128 of the Labor Code, as amended, but in accordance With the more formal and extensive proceeding before the Labor Arbiter. Nevertheless, it should be emphasized that the amount of the employer's liability is not quite a factor in determining the jurisdiction of the Regional Director. However, the power to order compliance with labor standards provisions may not be exercised where the employer contends or questions the findings of the labor regulation officers and raises issues which cannot be determined without taking into account evidentiary matters not verifiable in the normal course of inspection, as in the case at bar. Viewed in the light of RA 6715 and read in consonance with the case of Briad Agro Development Corp., as reconsidered, The instant case falls under the exclusive original jurisdiction of the Labor Arbiter RA 6715 is in the nature of a curative statute. Curative statutes have long been

considered valid in our jurisdiction, as long as they do not affect vested rights. In this case, We do not see any vested right that will be impaired by the application of RA 6715. Inasmuch as petitioner had already paid the claims of private respondents in the amount of P163,047.50 pursuant to the decision rendered in the first complaint, the only claim that should be deliberated upon by the Labor Arbiter should be limited to the second amount given by the Regional Director in the second complaint together with the proposal to offset the obligations. SET ASIDE. The case is REFERRED, if the respondents are so minded, to the Labor Arbiter for proper proceedings. PT&T v. NLRC FACTS: PT&T (Philippine Telegraph & Telephone Company) initially hired Grace de Guzman specifically as “Supernumerary Project Worker”, for a fixed period from November 21, 1990 until April 20, 1991 as reliever for C.F. Tenorio who went on maternity leave. She was again invited for employment as replacement of Erlina F. Dizon who went on leave on 2 periods, from June 10, 1991 to July 1, 1991 and July 19, 1991 to August 8, 1991. On September 2, 1991, de Guzman was again asked to join PT&T as a probationary employee where probationary period will cover 150 days. She indicated in the portion of the job application form under civil status that she was single although she had contracted marriage a few months earlier. When petitioner learned later about the marriage, its branch supervisor, Delia M. Oficial, sent de Guzman a memorandum requiring her to explain the discrepancy. Included in the memorandum, was a reminder about the company’s policy of not accepting married women for employment. She was dismissed from the company effective January 29, 1992. Labor Arbiter handed down decision on November 23, 1993 declaring that petitioner illegally dismissed De Guzman, who had already gained the status of a regular employee. Furthermore, it was apparent that she had been discriminated on account of her having contracted marriage in violation of company policies. ISSUE: Whether the alleged concealment of civil status can be grounds to terminate the services of an employee. HELD: Article 136 of the Labor Code, one of the protective laws for women, explicitly prohibits discrimination merely by reason of marriage of a female employee. It is recognized that company is free to regulate manpower and employment from hiring to firing, according to their discretion and best business judgment, except in those cases of unlawful discrimination or those provided by law. PT&T’s policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the right against discrimination provided to all women workers by our labor laws and by our Constitution. The record discloses clearly that de Guzman’s ties with PT&T were dissolved principally because of the company’s policy that married women

are not qualified for employment in the company, and not merely because of her supposed acts of dishonesty. The government abhors any stipulation or policy in the nature adopted by PT&T. As stated in the labor code: “ART. 136. Stipulation against marriage. — It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of marriage.” The policy of PT&T is in derogation of the provisions stated in Art.136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment and it likewise is contrary to good morals and public policy, depriving a woman of her freedom to choose her status, a privilege that is inherent in an individual as an intangible and inalienable right. The kind of policy followed by PT&T strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and ultimately, family as the foundation of the nation. Such policy must be prohibited in all its indirect, disguised or dissembled forms as discriminatory conduct derogatory of the laws of the land not only for order but also imperatively required. APEX MINING CO V NLRC NATURE: Special civil action for certiorari to annul NLRC decision FACTS - Sinclita Candida was employed by Apex Mining Company, Inc. to perform laundry services at its staff house. At first, she was paid on a piece rate basis. Later, she was paid on a monthly basis. - While she was hanging her laundry, she accidentally slipped and hit her back on a stone. She reported the accident to her immediate supervisor and to the personnel officer. As a result of the accident she was not able to continue with her work. - She was permitted to go on leave for medication and was offered P2k which was eventually increased to P5k to persuade her to quit her job, but she refused the offer and preferred to return to work. Petitioner did not allow her to return to work and dismissed her. - Labor arbiter ordered Apex Mining Company to pay the complainant Salary Differential, Emergency Living Allowance, 13th Month Pay Differential and separation pay of one month for every year of service NLRC affirmed. ISSUE WON the househelper in the staff houses of an industrial company is a domestic helper HELD

NO - Petitioner is a regular employee - Rule XIII, Section l(b), Book 3 of the Labor Code: The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family. - The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employer's home to minister exclusively to the personal comfort and enjoyment of the employer's family. The definition cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company - The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. - While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. Disposition Petition dismissed BARCENAS V NLRC (REV SIM DEE) FACTS - In 1978, Chua Se Su (Su, for short) in his capacity as the Head Monk of the Buddhist Temple of Manila and Baguio City and as President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Phils. Inc. hired the petitioner, Filomena Barcenas, who speaks the Chinese language as secretary and interpreter. - Her position required her to receive and assist Chinese visitors to the temple, act as tourist guide for foreign Chinese visitors, attend to the callers of the Head Monk as well as to the food for the temple visitors, run errands for the Head Monk such as paying the Meralco, PLDT, MWSS bills and act as liaison in some government offices. Aside from her pay and allowances under the law, she received an amount of P500 per month plus free board and lodging in the temple. - In December, 1979, Su assumed the responsibility of paying for the education of Barcenas’ nephew. In 1981, Su and Barcenas had amorous relations. In May, 1982, or five months before giving birth to the alleged son of Su on October 12, 1982, she was sent home to Bicol. Upon the death of Su in July, 1983, she remained and continued in her job.

- . In 1985, Manuel Chua (Chua, for short) was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines, Inc. and Rev. Sim Dee (Dee, for short) was elected Head Buddhist Priest. Thereafter, Chua and Dee discontinued payment of her monthly allowance and the additional P500 effective 1983. In addition, Barcenas and her son were evicted forcibly from their quarters in the temple by six police officers. She was brought first to the Police precinct in Tondo and then brought to Aloha Hotel where she was compelled to sign a written undertaking not to return to the Buddhist temple in consideration of the sum of P10,000. She refused and Chua shouted threats against her and her son. Her personal belongings including assorted jewelries were never returned.

a household helper. They were essential and important to the operation and religious functions of the temple. 2. NO Reasoning

ISSUES

- Her status as a regular employee ended upon her return to Bicol in May, 1982 to await the birth of her lovechild allegedly by Su. The records do not show that she filed any leave from work or that a leave was granted her. Neither did she return to work after the birth of her child on October 12,1982, whom she named Robert Chua alias Chua Sim Tiong [Whoa, wait a minute! If you’re alert you’ll realize that Sim is the NEW Head Monk’s name! Hmmm… don’t you think something else’s going on here? ]. The NLRC found that it was only in July, 1983 after Su died that she went back to the Manila Buddhist Temple.

1. WON Barcenas was a regular employee of the Manila Buddhist Temple

- She herself supplied the reason for her return. She stated:

2. WON Barcenas was illegally dismissed

"It was the death-bed instruction to her by Chua Se So to stay at the temple and to take care of the two boys and to see to it that they finish their studies to become monks and when they are monks to eventually take over the two temples as their inheritance from their father."

- The Labor Arbiter ruled for Barcenas but the NLRC reversed.

HELD 1. YES Reasoning - We agree with the petitioner's claim that she was a regular employee of the Manila Buddhist Temple as secretary and interpreter of its Head Monk, Su. As Head Monk, President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines, Su was empowered to hire the petitioner under Article V of the By-laws of the Association which states: "The President or in his absence, the Vice President shall represent the Association in all its dealings with the public, subject to the Board, shall have the power to enter into any contract or agreement in the name of the Association, shall manage the active business operation of the Association, shall deal with the bank or banks." - Chua and Dee, on the other hand, claimed that Barcenas was never an employee of the Poh Toh Temple but a servant who confined herself to the temple and to the personal needs of the late Chua Se Su and thus, her position is co-terminus with that of her master. However, the work that she performed in the temple could not be categorized as mere domestic work. Barcenas, being proficient in the Chinese language, attended to the visitors, mostly Chinese, who came to pray or seek advice before Buddha for personal or business problems; arranged meetings between these visitors and Su and supervised the preparation of the food for the temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some government offices; and made the payment for the temple, Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of

- Thus, her return to the temple was no longer as an employee but rather as Su's mistress who is bent on protecting the proprietary and hereditary rights of her son and nephew. In her pleadings, the petitioner claims that they were forcefully evicted from the temple, harassed and threatened by respondents and that the Poh Toh Buddhist Association is a trustee corporation with the children as cestui que trust. These claims are not proper in this labor case. They should be appropriately threshed out in the complaints already filed by the petitioner before the civil courts. Due to these claims, we view the respondents' offer of P10,000 as indicative more of their desire to evict the petitioner and her son from the temple rather than an admission of an employer-employee relation. - The petitioner's claim for unpaid wages since May, 1982 which she filed only in 1986, has already prescribed. Under Article 292 of the Labor Code, all money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued, otherwise they shall forever be barred. - Finally, while petitioner contends that she continued to work in the temple after Su died, there is, however, no proof that she was re-hired by the new Head Monk. In fact, she herself manifested that respondents made it clear to her in no uncertain terms that her services as well as her presence and that of her son were no longer needed. However, she persisted and continued to work in the temple without receiving her salary because she expected Chua and Dee to relent and permit the studies of the two boys. Consequently, under these circumstances, no employeremployee relationship could have arisen.

Disposition Decision of the NLRC is AFFIRMED. GR No. 146053 (April 30, 2008) This case deals with the sexual harassment of a young girl by her elementary school teacher. The case highlights the vulnerability of female students. Facts: Petitioner is a public school teacher of Pandan Elementary School, Pandan, Mambajao, Camiguin Province. Respondent is the father of AAA, an elementary school student of the petitioner. AAA claimed that on August 16, 1995, petitioner asked her to be at his office to do an errand. Once inside, she saw him get a folder from one of the cartons on the floor near his table, and place it on his table. He then asked her to come closer, and when she did, held her hand, then touched and fondled her breast. She stated that he fondled her breast five times, and that she felt afraid. A classmate of hers, claiming to have witnessed the incident, testified that the fondling incident did happen just as AAA related it. Petitioner was charged with Misconduct in a Formal Charge dated February 12, 1996 by Regional Director Vivencio N. Muego, Jr. of the CSC. In his defense, petitioner claimed that the touching incident happened by accident, just as he was handing AAA a lesson book. He further stated that the incident happened in about two or three seconds, and that the girl left his office without any complaint. Held: The act of petitioner of fondling one of his students is against a law, RA 7877, and is doubtless inexcusable. The particular act of petitioner cannot in any way be construed as a case of simple misconduct. Sexually molesting a child is, by any norm, a revolting act that it cannot but be categorized as a grave offense. Parents entrust the care and molding of their children to teachers, and expect them to be their guardians while in school. Petitioner has violated that trust. A teacher who perverts his position by sexually harassing a student should not be allowed, under any circumstance, to practice this noble profession. So it must be here. Bacsin vs. Wahiman FACTS -Bacsin, a public elementary school teacher, was charged with Misconduct for fondling the breast of his student, as was witnessed by another student. In his defense, Bacsin claimed that the touching happened by accident. *CSC: GUILTY of Grave Misconduct (Acts of Sexual Harassment), DISMISSED. Act contained in the Anti-Sexual Harassment Act of 1995. MR Denied. Appealed to CA

*CA: Affirm. Even if Bacsin was formally charged with “disgraceful and immoral conduct and misconduct”, CSC found that the allegations and evidence sufficiently proved petitioner’s guilt of grave misconduct, which is punishable by dismissal from service. ISSUE: WON MISCONDUCT (which was the charge against him) includes Grave Misconduct, thus, he can be convicted of such even if that was not charged HELD: YES *Dadubo v. Civil Service Commission: The charge against the respondent in an administrative case need not be drafted with the precision of an information in a criminal prosecution. It is sufficient that he is apprised of the substance of the charge against him; what is controlling is the allegation of the acts complained of, not the designation of the offense. >>>It is clear that petitioner was sufficiently informed of the basis of the charge against him, which was his act of improperly touching one of his students. Thus informed, he defended himself from such charge. The failure to designate the offense specifically and with precision is of no moment in this administrative case. >>>Charges against him imputes acts covered and penalized under Antisexual harassment act of 1995 *Domingo v. Rayala: it is not necessary that the demand, request, or requirement of a sexual favor be articulated in a categorical oral or written statement. It may be discerned, with equal certitude, from the acts of the offender. >>>act of mashing the breast, in an education environment, upon a student, who felt fear at the time Bacsin touched her, are sufficient grounds for grave misconduct *there is grave misconduct! The act of petitioner of fondling one of his students is against a law, RA 7877, and is doubtless inexcusable. The particular act of petitioner cannot in any way be construed as a case of simple misconduct. Sexually molesting a child is, by any norm, a revolting act that it cannot but be categorized as a grave offense. Parents entrust the care and molding of their children to teachers, and expect them to be their guardians while in school. Petitioner has violated that trust. The charge of grave misconduct proven against petitioner demonstrates his unfitness to remain as a teacher and continue to discharge the functions of his office. *no denial of due process: The essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek for a reconsideration of the action or ruling complained of. These elements are present in this case, where petitioner was properly informed of the charge and had a chance to refute it, but failed. …A teacher who perverts his position by sexually harassing a student should not be allowed, under any circumstance, to practice this noble profession. So it must be here. Disposition: DISMISS Petition

G.R. No. 164774 | April 12, 2006 STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners, vs. RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents. PUNO, J.: FACTS: Petitioner Star Paper Corporation (the company) is a corporation engaged in trading – principally of paper products. Josephine Ongsitco is its Manager of the Personnel and Administration Department while Sebastian Chua is its Managing Director. The evidence for the petitioners show that respondents Ronaldo D. Simbol (Simbol), Wilfreda N. Comia (Comia) and Lorna E. Estrella (Estrella) were all regular employees of the company.1

She refused to sign the memorandum because she was on leave for twenty-one (21) days and has not been given a chance to explain. The management asked her to write an explanation. However, after submission of the explanation, she was nonetheless dismissed by the company. Due to her urgent need for money, she later submitted a letter of resignation in exchange for her thirteenth month pay. Respondents filed a complaint for unfair labor practice, constructive dismissal, separation pay and attorney’s fees. They averred that the aforementioned company policy is illegal and contravenes Article 136 of the Labor Code. They also contended that they were dismissed due to their union membership. Labor Arbiter Melquiades Sol del Rosario dismissed the complaint for lack of merit.

Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee of the company, whom he married on June 27, 1998. Prior to the marriage, Ongsitco advised the couple that should they decide to get married, one of them should resign pursuant to a company policy promulgated in 1995. Simbol resigned on June 20, 1998 pursuant to the company policy.4

On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter on January 11, 2002.

Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee, whom she married on June 1, 2000. Ongsitco likewise reminded them that pursuant to company policy, one must resign should they decide to get married. Comia resigned on June 30, 2000.

ISSUE: Whether the policy of the employer banning spouses from working in the same company violates the rights of the employee under the Constitution and the Labor Code or is a valid exercise of management prerogative.

Estrella was hired on July 29, 1994. She met Luisito Zuñiga (Zuñiga), also a co-worker. Petitioners stated that Zuñiga, a married man, got Estrella pregnant. The company allegedly could have terminated her services due to immorality but she opted to resign on December 21, 1999.6

HELD:

The respondents each signed a Release and Confirmation Agreement. They stated therein that they have no money and property accountabilities in the company and that they release the latter of any claim or demand of whatever nature.7

Art. 1700. The relation between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Respondents offer a different version of their dismissal. Simbol and Comia allege that they did not resign voluntarily; they were compelled to resign in view of an illegal company policy. As to respondent Estrella, she alleges that she had a relationship with co-worker Zuñiga who misrepresented himself as a married but separated man. After he got her pregnant, she discovered that he was not separated. Thus, she severed her relationship with him to avoid dismissal due to the company policy. On November 30, 1999, she met an accident and was advised by the doctor at the Orthopedic Hospital to recuperate for twenty-one (21) days. She returned to work on December 21, 1999 but she found out that her name was onhold at the gate. She was denied entry. She was directed to proceed to the personnel office where one of the staff handed her a memorandum. The memorandum stated that she was being dismissed for immoral conduct.

Respondents filed a Motion for Reconsideration but was denied by the NLRC in a Resolution dated August 8, 2002. They appealed to respondent court via Petition for Certiorari. Court of Appeals reversed the NLRC.

The 1987 Constitution states our policy towards the protection of labor. The Civil Code likewise protects labor with the following provisions:

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. The Labor Code is the most comprehensive piece of legislation protecting labor. The case at bar involves Article 136 of the Labor Code which provides: Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting

married a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

particular class. For example, although most employment policies do not expressly indicate which spouse will be required to transfer or leave the company, the policy often disproportionately affects one sex.

Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy "may appear to be contrary to Article 136 of the Labor Code" but it assumes a new meaning if read together with the first paragraph of the rule. The rule does not require the woman employee to resign. The employee spouses have the right to choose who between them should resign. Further, they are free to marry persons other than coemployees. Hence, it is not the marital status of the employee, per se, that is being discriminated. It is only intended to carry out its no-employmentfor-relatives-within-the-third-degree-policy which is within the ambit of the prerogatives of management.16

The state courts’ rulings on the issue depend on their interpretation of the scope of marital status discrimination within the meaning of their respective civil rights acts. Though they agree that the term "marital status" encompasses discrimination based on a person's status as either married, single, divorced, or widowed, they are divided on whether the term has a broader meaning. Thus, their decisions vary.

It is true that the policy of petitioners prohibiting close relatives from working in the same company takes the nature of an anti-nepotism employment policy. Companies adopt these policies to prevent the hiring of unqualified persons based on their status as a relative, rather than upon their ability.17 These policies focus upon the potential employment problems arising from the perception of favoritism exhibited towards relatives. With more women entering the workforce, employers are also enacting employment policies specifically prohibiting spouses from working for the same company. We note that two types of employment policies involve spouses: policies banning only spouses from working in the same company (no-spouse employment policies), and those banning all immediate family members, including spouses, from working in the same company (anti-nepotism employment policies).18 Unlike in our jurisdiction where there is no express prohibition on marital discrimination,19 there are twenty state statutes20 in the United States prohibiting marital discrimination. Some state courts21 have been confronted with the issue of whether no-spouse policies violate their laws prohibiting both marital status and sex discrimination. In challenging the anti-nepotism employment policies in the United States, complainants utilize two theories of employment discrimination: the disparate treatment and the disparate impact. Under the disparate treatment analysis, the plaintiff must prove that an employment policy is discriminatory on its face. No-spouse employment policies requiring an employee of a particular sex to either quit, transfer, or be fired are facially discriminatory. For example, an employment policy prohibiting the employer from hiring wives of male employees, but not husbands of female employees, is discriminatory on its face. On the other hand, to establish disparate impact, the complainants must prove that a facially neutral policy has a disproportionate effect on a

The courts narrowly interpreting marital status to refer only to a person's status as married, single, divorced, or widowed reason that if the legislature intended a broader definition it would have either chosen different language or specified its intent. They hold that the relevant inquiry is if one is married rather than to whom one is married. They construe marital status discrimination to include only whether a person is single, married, divorced, or widowed and not the "identity, occupation, and place of employment of one's spouse." These courts have upheld the questioned policies and ruled that they did not violate the marital status discrimination provision of their respective state statutes. The courts that have broadly26 construed the term "marital status" rule that it encompassed the identity, occupation and employment of one's spouse. They strike down the no-spouse employment policies based on the broad legislative intent of the state statute. They reason that the nospouse employment policy violate the marital status provision because it arbitrarily discriminates against all spouses of present employees without regard to the actual effect on the individual's qualifications or work performance.27 These courts also find the no-spouse employment policy invalid for failure of the employer to present any evidence of business necessity other than the general perception that spouses in the same workplace might adversely affect the business.28 They hold that the absence of such a bona fide occupational qualification29 invalidates a rule denying employment to one spouse due to the current employment of the other spouse in the same office.30 Thus, they rule that unless the employer can prove that the reasonable demands of the business require a distinction based on marital status and there is no better available or acceptable policy which would better accomplish the business purpose, an employer may not discriminate against an employee based on the identity of the employee’s spouse.31 This is known as the bona fide occupational qualification exception. We note that since the finding of a bona fide occupational qualification justifies an employer’s no-spouse rule, the exception is interpreted strictly and narrowly by these state courts. There must be a compelling business necessity for which no alternative exists other than the discriminatory practice.32 To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2)

that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.33 The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the standard ofreasonableness of the company policy which is parallel to the bona fide occupational qualification requirement. In the recent case of Duncan Association of DetailmanPTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc.,34 we passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. We considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxo’s employeesreasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, we recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.35 The requirement that a company policy must be reasonable under the circumstances to qualify as a valid exercise of management prerogative was also at issue in the 1997 case of Philippine Telegraph and Telephone Company v. NLRC.36 In said case, the employee was dismissed in violation of petitioner’s policy of disqualifying from work any woman worker who contracts marriage. We held that the company policy violates the right against discrimination afforded all women workers under Article 136 of the Labor Code, but established a permissible exception, viz.: [A] requirement that a woman employee must remain unmarried could be justified as a "bona fide occupational qualification," or BFOQ, where the particular requirements of the job would justify the same, but not on the ground of a general principle, such as the desirability of spreading work in the workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance.37 (Emphases supplied.) The cases of Duncan and PT&T instruct us that the requirement of reasonableness must be clearly established to uphold the questioned employment policy. The employer has the burden to prove the existence of a reasonable business necessity. The burden was successfully discharged in Duncan but not in PT&T.

meant to give teeth to the first paragraph of the questioned rule39 is evidently not the valid reasonable business necessity required by the law. It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but were asked to resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule without valid justification, the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employee’s right to security of tenure. Petitioners contend that their policy will apply only when one employee marries a co-employee, but they are free to marry persons other than coemployees. The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company.40 Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislature’s silence41 that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. Corollarily, the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic.

We do not find a reasonable business necessity in the case at bar.

As to respondent Estrella, the Labor Arbiter and the NLRC based their ruling on the singular fact that her resignation letter was written in her own handwriting. Both ruled that her resignation was voluntary and thus valid. The respondent court failed to categorically rule whether Estrella voluntarily resigned but ordered that she be reinstated along with Simbol and Comia.

Petitioners’ sole contention that "the company did not just want to have two (2) or more of its employees related between the third degree by affinity and/or consanguinity"38 is lame. That the second paragraph was

Estrella claims that she was pressured to submit a resignation letter because she was in dire need of money. We examined the records of the case and find Estrella’s contention to be more in accord with the evidence.

While findings of fact by administrative tribunals like the NLRC are generally given not only respect but, at times, finality, this rule admits of exceptions,42 as in the case at bar. Estrella avers that she went back to work on December 21, 1999 but was dismissed due to her alleged immoral conduct. At first, she did not want to sign the termination papers but she was forced to tender her resignation letter in exchange for her thirteenth month pay. The contention of petitioners that Estrella was pressured to resign because she got impregnated by a married man and she could not stand being looked upon or talked about as immoral43 is incredulous. If she really wanted to avoid embarrassment and humiliation, she would not have gone back to work at all. Nor would she have filed a suit for illegal dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the employee is compelled by personal reason(s) to dissociate himself from employment. It is done with the intention of relinquishing an office, accompanied by the act of abandonment. 44 Thus, it is illogical for Estrella to resign and then file a complaint for illegal dismissal. Given the lack of sufficient evidence on the part of petitioners that the resignation was voluntary, Estrella’s dismissal is declared illegal. CA decision affirmed. Bay Haven v. Abuan Facts: This is a petition for certiorari on the decision of the CA, who denied their petition to annul the resolution of the DOLE . Upon complaint of Florentino Abuan, one of herein respondents, the DOLE, in the exercise of its visitorial, inspection and enforcement powers, through its Regional Director for the National Capital Region (NCR), issued an Order commanding petitioners to pay respondents a total of P638,187.15 corresponding to the latter's claims for underpayment as petitioners' workers. The Regional Director based his Order on the results of the inspection conducted on April 23, 1997 by one of its inspectors who found that petitioner New Bay Haven Restaurant, committed the following violations under the labor standards law which are Underpayment of minimum wage, Underpayment of thirteenth month pay, Underpayment of regular holiday pay, Underpayment of special holiday pay, Non-payment of night shift differential pay and Non-registration of the firm under Rule of Occupational Safety and Health Standards. The petitioners filed with the DOLE-NCR Regional Office a Motion for Reconsideration, alleging that the office had no jurisdiction over the case and that the order was issued in denial of petitioners' right to due process, and the jurisdiction rest on the NLRC. they added that their right to due process was also denied because the order was issued without them being furnished copies of the complaint and the inspection report and without being notified of the hearings held in the case. The DOLE-NCR Assistant Regional Director, acting for the Regional Director, issued an Order granting petitioners' motion for

reconsideration as he found merit in petitioners' allegation of absence of due process in the issuance of the first order. The order, however, stated that the DOLE had jurisdiction over the case, pursuant to the Labor Code. The next hearing was set wherein the petitioners showed payroll sheets and waivers of quitclaims which were signed by the respondents. However, the latter denied of the amount stated in the payroll as they contend they receive lesser that what is stated there and also they were forced to sign the quitclaims. The DOLE issues an order holding the petitioners liable to the respondents. The case was elevated to the CA. The CA ruled in dismissing the petition, ruling that the DOLE had jurisdiction over the labor standards case and that petitioners did not present enough evidence to refute the claims made by respondents. Issues: 1) whether the DOLE Secretary and her authorized representatives have jurisdiction to impose the monetary liability against petitioners; and 2) whether the DOLE-NCR, as upheld by the DOLE Secretary and the CA committed an error in awarding the claims of respondents. Ruling:

1. The DOLE Secretary and her authorized representatives such as the DOLE-NCR Regional Director, have jurisdiction to enforce compliance with labor standards laws under the broad visitorial and enforcement powers. The Court has held that the visitorial and enforcement powers of the Secretary, exercised through his representatives, encompass compliance with all labor standards laws and other labor legislation, regardless of the amount of the claims filed by workers.

2. The mere disagreement by the employer with the findings of the labor officer, or the simple act of presenting controverting evidence, does not automatically divest the DOLE Secretary or any of his authorized representatives such as the regional directors, of jurisdiction to exercise their visitorial and enforcement powers under the Labor Code. Thus, the key requirement for the Regional Director and the DOLE Secretary to be divested of jurisdiction is that the evidentiary matters are not verifiable in the course of inspection. Where the evidence presented was verifiable in the normal course of inspection, even if presented belatedly by the employer, the Regional Director, and later the DOLE Secretary, may still examine them; and these officers are not divested of jurisdiction to decide the case. In the present case, petitioners' pieces of evidence of the alleged contract of lease, payroll sheets, and quitclaims were all verifiable in the normal course of inspection and, granting that they were not examined by the labor inspector, they have nevertheless been thoroughly examined by the Regional Director and the DOLE

Secretary. For these reasons, the exclusion clause of Art. 128(b) does not apply. G.R. No. 186091 | December 15, 2010 | EMMANUEL BABAS v. LORENZO SHIPPING CORPORATION F: Respondent Lorenzo Shipping Corporation (LSC) is a duly organized domestic corporation engaged in the shipping industry; it owns several equipment necessary for its business. On September 29, 1997, LSC entered into a General Equipment Maintenance Repair and Management Services Agreement3 (Agreement) with Best Manpower Services, Inc. (BMSI). Under the Agreement, BMSI undertook to provide maintenance and repair services to LSC’s container vans, heavy equipment, trailer chassis, and generator sets. BMSI further undertook 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.4 The period of lease was coterminous with the Agreement. 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, or on May 1, 2003, LSC entered into another contract with BMSI, this time, a service contract.5 In September 2003, petitioners filed with the Labor Arbiter (LA) a complaint for regularization against LSC and BMSI. On October 1, 2003, LSC terminated the Agreement, effective October 31, 2003. Consequently, petitioners lost their employment. BMSI asserted that it is an independent contractor. It averred that it was willing to regularize petitioners; however, some of them lacked the requisite qualifications for the job. BMSI was willing to reassign petitioners who were willing to accept reassignment. BMSI denied petitioners’ claim for underpayment of wages and non-payment of 13th month pay and other benefits. LSC, on the other hand, averred that petitioners were employees of BMSI and were assigned to LSC by virtue of the Agreement. BMSI is an independent job contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business. The Agreement between LSC and BMSI constituted legitimate job contracting. Thus, petitioners were employees of BMSI and not of LSC. After due proceedings, the LA rendered a decision6 dismissing petitioners’ complaint. The LA found that petitioners were employees of BMSI. It was

BMSI which hired petitioners, paid their wages, and exercised control over them. Petitioners appealed to the National Labor Relations Commission (NLRC), arguing that BMSI was engaged in labor-only contracting. They insisted that their employer was LSC. On January 16, 2008, the NLRC promulgated its decision. NLRC reversed the LA’s decision. NLRC’s finding: BMSI is not engaged in legitimate job contracting. BMSI has no equipment, no office premises, no capital and no investments as shown in the Agreement itself. BMSI has no independent business or activity or job to perform in respondent LSC free from the control of respondent LSC except as to the results thereof. In view of the absence of such independent business or activity or job to be performed by respondent BMSI in respondent LSC [petitioners] performed work that was necessary and desirable to the main business of respondent LSC. Respondents were not able to refute the allegations of [petitioners] that they performed the same work that the regular workers of LSC performed and they stood side by side with regular employees of respondent LSC performing the same work. Necessarily, the control on the manner and method of doing the work was exercised by respondent LSC and not by respondent BMSI since the latter had no business of its own to perform in respondent LSC. LSC went to the CA via certiorari. On October 10, 2008, the CA rendered the now challenged Decision, reversing the NLRC. In holding that BMSI was an independent contractor, the CA relied on the provisions of the Agreement, wherein BMSI warranted that it is an independent contractor, with adequate capital, expertise, knowledge, equipment, and personnel necessary for the services rendered to LSC. According to the CA, the fact that BMSI entered into a contract of lease with LSC did not ipso facto make BMSI a labor-only contractor; on the contrary, it proved that BMSI had substantial capital. The CA was of the view that the law only required substantial capital or investment. Since BMSI had substantial capital, as shown by its ability to pay rents to LSC, then it qualified as an independent contractor. It added that even under the control test, BMSI would be the real employer of petitioners, since it had assumed the entire charge and control of petitioners’ services. The CA further held that BMSI’s Certificate of Registration as an independent contractor was sufficient proof that it was an independent contractor. Hence, the CA absolved LSC from liability and instead held BMSI as employer of petitioners. Petitioners filed a motion for reconsideration, but the CA denied it on January 21, 2009. Hence, this appeal by petitioners. I: WON CA ERRED IN IGNORING THE CLEAR EVIDENCE OF RECORD THAT RESPONDENT WAS ENGAGED IN LABOR-ONLY CONTRACTING TO DEFEAT PETITIONERS’ RIGHT TO SECURITY OF TENURE.

H: We dismiss the petition insofar as petitioners Soriano and Anajao are concerned. In declaring BMSI as an independent contractor, the CA, in the challenged Decision, heavily relied on the provisions of the Agreement, wherein BMSI declared that it was an independent contractor, with substantial capital and investment. De Los Santos v. NLRC instructed us that the character of the business, i.e., whether as labor-only contractor or as job contractor, should be measured in terms of, and determined by, the criteria set by statute. The parties cannot dictate by the mere expedience of a unilateral declaration in a contract the character of their business. Despite the fact that the service contracts contain stipulations which are earmarks of independent contractorship, they do not make it legally so. The language of a contract is neither determinative nor conclusive of the relationship between the parties. Petitioner SMC and AMPCO cannot dictate, by a declaration in a contract, the character of AMPCO's business, that is, whether as labor-only contractor, or job contractor. AMPCO's character should be measured in terms of, and determined by, the criteria set by statute. Thus, in distinguishing between prohibited labor-only contracting and permissible job contracting, the totality of the facts and the surrounding circumstances of the case are to be considered. Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal. In labor-only contracting, the following elements are present: (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the job, work, or service under its own account and responsibility; and (b) the employees recruited, supplied, or placed by such contractor or subcontractor perform activities which are directly related to the main business of the principal.20 On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with the 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. 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 self-organization, security of tenure, and social welfare benefits.22 Given the above standards, we sustain the petitioners’ contention that BMSI is engaged in labor-only contracting. First, petitioners worked at LSC’s 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 contractor’s 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. The law casts the burden on the contractor to prove that it has substantial capital, investment, tools, etc. Employees, on the other hand, need not prove that the contractor does not have substantial capital, investment, and tools to engage in job-contracting. 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, LSC’s 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. The CA erred in considering BMSI’s Certificate of Registration as sufficient proof that it is an independent contractor. In San Miguel Corporation v. Vicente B. Semillano, Nelson Mondejas, Jovito Remada, Alilgilan MultiPurpose Coop (AMPCO), and Merlyn N. Policarpio, we held that a Certificate

of Registration issued by the Department of Labor and Employment is not conclusive evidence of such status. The fact of registration simply prevents the legal presumption of being a mere labor-only contractor from arising. Indubitably, BMSI can only be classified as a labor-only contractor. The CA, therefore, erred when it ruled otherwise. Consequently, the workers that BMSI supplied to LSC became regular employees of the latter. Having gained regular status, petitioners were entitled to security of tenure and could only be dismissed for just or authorized causes and after they had been accorded due process. Accordingly, we hold that the NLRC committed no grave abuse of discretion in its decision. Conversely, the CA committed a reversible error when it set aside the NLRC ruling. Petition granted. HANJIN HEAVY INDUSTRIES vs. IBANEZ| GR 170181 | June 26 2008 FACTS: Felicito Ibanez (tireman), Elmer Gacula (Crane Operator), Elmer Dagotdot (Welder), Aligwas Carolino (Welder), Ruel Calda (Warehouseman) filed a complaint at the NLRC for illegal dismissal with prayer for reinstatement and payment of backwages. The group alleged that the contract they have is good for three months, subject to automatic renewal if there is no notice of termination from Hanjin, and that the contract would automatically terminate upon the completion of the project. They further averred that during the time they were dismissed, the project was still ongoing and Hanjin hired people for the positions that they had vacated. Lastly, they also allege that they are entitled to a completion bonus as part of the industry practice and this was substantiated by past payroll payments. Hanjin failed to furnish a copy of the contract agreements with the dismissed group. Instead it showed the quitclaims that had been executed by the group that released Hanjin and its representatives from any claims with their employment. It contained clearance certificates that show that respondents are free from accountability. ISSUE: WON the members of the dismissed group are project employees? HELD: No, Hanjin was unable to prove they were not regular employees The rehiring of construction workers on a project to project basis does not confer upon them regular employment status, since their re-hiring is only a natural consequence of the fact that experienced construction workers are preferred. Employees who are hired for carrying out a separate job, distinct from the other undertakings of the company, the scope and duration of which has been determined and made known to the employees at the time of the employment, are properly treated as project employees and their services may be lawfully terminated upon the completion of a project. Should the terms of their employment fail to comply with this standard, they cannot be considered project employees. Hanjin was unable to show the written contracts it had with the workers. White the absence of the contract does not grant permanent status it is the burden of the employer to prove that the employees were aware that their contract with the

company is for per project only. While Hanjin submitted a termination report including the worker’s names to prove that the services of their services were only contracted for a per project basis, Hanjin only submitted one report. It was unable to disprove the allegation of the workers that they were part of a pool that Hanjin contacts once a project is to be completed. Employers cannot mislead their employees, whose work is necessary and desirable in the former's line of business, by treating them as though they are part of a work pool from which workers could be continually drawn and then assigned to various projects and thereafter denied regular status at any time by the expedient act of filing a Termination Report. This would constitute a practice in which an employee is unjustly precluded from acquiring security of tenure, contrary to public policy, morals, good customs and public order. Hanjin alleged that per Department Order 19, Series of 1993 of DOLE, the payment of completion bonus is further proof that the workers were only project employees as Hanjin is mandated by law to pay it to the temporary workers whose contracts are about to end upon the completion of the project. SC views the completion bonus terminology here reflects the fact that the project has already been completed and that is the premium they wished to pay. Quitclaims are viewed with disfavor, especially when – a. There is clear proof that the waiver was wangled from an unsuspecting or gullible person b. Where the terms are unconscionable in its face. For quitclaims to be valid, it must constitute a reasonable settlement commensurate to their legal rights. It does not preclude them from seeking benefits they were entitled to such as back wages. The respondents were also not granted the twin requirements of notice and hearing. COCA-COLA BOTTLERS PHILS., INC. vs. ALAN M. AGITO, et al | GR No. 179546 | February 13, 2009 FACTS: 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 fideindependent contractor with substantial capital or investment in the form of tools, equipment, and machinery necessary in the conduct of its business. 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 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).

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. 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: At the outset, the Court clarifies that although Interserve has an authorized capital stock amounting to P2,000,000.00, only P625,000.00 thereof was paid up as of 31 December 2001. The Court does not set an absolute figure for what it considers substantial capital for an independent job contractor, but it measures the same against the type of work which the contractor is obligated to perform for the principal. However, this is rendered impossible in this case since the Contract between petitioner and Interserve does not even specify the work or the project that needs to be performed or completed by the latter’s employees, and uses the dubious phrase “tasks and activities that are considered contractible under existing laws and regulations.” Even in its pleadings, petitioner carefully sidesteps identifying or describing the exact nature of the services that Interserve was obligated to render to petitioner. The importance of identifying with particularity the work or task which Interserve was supposed to accomplish for petitioner becomes even more evident, considering that the Articles of Incorporation of Interserve states that its primary purpose is to operate, conduct, and maintain the business of janitorial and allied services. But respondents were hired as salesmen and leadman for petitioner. The Court cannot, under such ambiguous circumstances, make a reasonable determination if Interserve had substantial capital or investment to undertake the job it was contracting with petitioner. [In] Vinoya v. NLRC, we clarified that it was not enough to show substantial capitalization or investment in the form of tools, equipment, machinery and work premises, etc., to be considered an independent contractor. In fact, jurisprudential holdings were to the effect that in determining the existence of an independent contractor relationship, several factors may be considered, such as, but not necessarily confined to, whether the contractor was carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the workers; the power of the employer with respect to the hiring, firing and payment of the workers of the contractor; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. 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. The lack of control of Interserve over the respondents can be gleaned from the Contract of Services between Interserve (as the CONTRACTOR) and petitioner (as the CLIENT). The Contract of Services between Interserve and petitioner did not identify the work needed to be performed and the final result required to be accomplished. Instead, the Contract specified the type of workers Interserve must provide petitioner (“Route Helpers, Salesmen, Drivers, Clericals, Encoders & PD”) and their qualifications (technical/vocational course graduates, physically fit, of good moral character, and have not been convicted of any crime). The Contract also states that, “to carry out the undertakings specified in the immediately preceding paragraph, the CONTRACTOR shall employ the necessary personnel,” thus, acknowledging that Interserve did not yet have in its employ the personnel needed by petitioner and would still pick out such personnel based on the criteria provided by petitioner. In other words, Interserve did not obligate itself to perform an identifiable job, work, or service for petitioner, but merely bound itself to provide the latter with specific types of employees. These contractual provisions strongly indicated that Interserve was merely a recruiting and manpower agency providing petitioner with workers performing tasks directly related to the latter’s principal business. The certification issued by the DOLE stating that Interserve is an independent job contractor does not sway this Court to take it at face value, since the primary purpose stated in the Articles of Incorporation of Interserve is misleading. According to its Articles of Incorporation, the principal business of Interserve is to provide janitorial and allied services. The delivery and distribution of Coca-Cola products, the work for which respondents were employed and assigned to petitioner, were in no way allied to janitorial services. While the DOLE may have found that the capital and/or investments in tools and equipment of Interserve were sufficient for an independent contractor for janitorial services, this does not mean that such capital and/or investments were likewise sufficient to maintain an independent contracting business for the delivery and distribution of Coca-Cola products. 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. Records also failed to show that petitioner afforded respondents the twin

requirements of procedural due process, i.e., notice and hearing, prior to their dismissal. Respondents were not served notices informing them of the particular acts for which their dismissal was sought. Nor were they required to give their side regarding the charges made against them. Certainly, the respondents’ dismissal was not carried out in accordance with law and, therefore, illegal. TAN v. LAGRAMA, 387 SCRA 393 Facts: Petitioner Rolando tan is the president of supreme theater corporation and the general manager of crown and Empire Theater in Butuan city. Private respondent Leovildo Lagrama is a painter, making ad billboards and murals for the motion pictures shown at the empress, supreme and crown theaters for more than 10 years from September 1, 1988 to October 17 1998. On October 17, 1998 Lagrama was summoned and was scolded for urinating on his work area and was asked not to draw anymore. Lagrama denied the charged against him. He claimed that he was not the only one who entered the drawing are and that even if the charge was true, it was a minor infraction to warrant his dismissal. However everytime he spoke. Tan showed at him to get out, leaving him no choice but to leave the premises. Lagrama filed a complaint with the sub-regional arbitration branch no. x of the NLRC in Butuan city. He alleged that he had been illegally dismissed and sought reinvestigation and payment of 13th month pay, service incentive leave pay, salary differential, and damages. Tan denied that Lagrama was his employee. He asserted that Lagrama was an independent contractor. On June 1999, labor arbiter found tan guilty of illegal dismissal and grand petition. Upon appeal to the NLRC fifth division, Cagayan de Oro city which rendered a decision finding Lagrama to b an independent contractor, and for this reason reversing the decision of the labor arbiter. NLRC denied motion for reconsideration

case there is such a connection between the job of Lagrama painting billboards and murals and the business of the petitioned. C. The fact the Lagrama was not reported as an employee to the SSS is not conclusive on the question of whether he was an employee of petitioner. Otherwise an employer would be rewarded for his failure or even neglect to perform his obligation. D. Neither does the fact that Lagrama painted for other persons affect or alter his employment relationship with petitioner. That he did 50 only during weekends has not been denied by petitioner. E. Lagrama had been employed by petitioner since 1988.under the law, therefore, he is deemed a regular employee and is thus entitled to security of tenure, as provided in art. 279 of labor code. This court has held that if the employee has been performing the job for at least one year, even if he not continuously but intermittently, the repeated and continuing need for its performance is sufficient evidence of the necessity, if not indispensability, of that activity to the business of his employer hence the employment is also considered regular although with respect only to such activity and while such activity exists. Issues and Ruling: I. Whether or not Lagrama abandoned his work. There is no evidence to show this abandonment. Requires two elements: 1. the failure to report for work or absence without valid or justifiable reason and 2. A clear intention to server the employer-employee relationship, with the second element as the more determinative factor and being manifested by some overacts. Mere absence is not sufficient, and the burden is on the part of the employer to show a deliberate and unjustified refusal on the part of the employee to resume his employment without any intention of returning the court affirmed the court of appeals ruling that, private respondent (herein petitioner) has not established clear proof of the intention of the petitioner to abandon his job or to sever the employment relationship between him and the private respondent. On the contrary, it was the private respondent who told that he did not want the latter to draw for him and thereafter refused to give him work to do or any mural or billboard to paint or drawn on.

A. Petition for certiorari was filed before the court of appeals which found that tan exercises control over Lagrama’s it is a method of computing compensation, not a basis for determining the existence or absence of employer-employee relationship. In the case at bar petitioner did not present the payroll to support his claim that Lagrama was not his employee

II. Whether or not private respondent Lagrama was illegally dismissed. – to begin, the employer has the burden of proving the lawfulness of his employee’s dismissal. Labor code provides that no worker shall be dismissed except for a just or authorized cause provided by law and after due process.

B. 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. In this

In this case, by his refusal to give Lagrama work to do and ordering Lagrama to get out of his sight as the latter tried to explain his side, petitioner made it plain that Lagrama was dismissed. Urinating in a work place other than the one designated for the purpose constitutes valid g___

for dismissal. However, there is no evidence that Lagrama did urinate in a place other than the rest room in the premises of his work. III. The grant of separation pay in LIEU of reinstatement is appropriate because the relationship between the employer and employee has been so strained that reinstatement would no longer serve any purpose. IV. The bureau of working conditions classifies workers paid by results into two groups, namely 1. Those whose time and performance is supervised by the employer and 2. those whose time or performance is unsupervised by the employer. The first involves an element of control and supervision over the manner the work is to be performed, while the second does not. If a piece worker is supervised, there is an employer-employee relationship. As in this case, however such an employee is not entitled to service incentive leave pay since he is paid a fixed amount for work done. Regardless of the time he spent in accomplishing such work. Disposition: Petition is denied. Decision of labor arbiter is affirmed with modification that the back wages and other benefits awarded to private respondent should be computed from the time of his dismissal up to the time of the finality of this decision, without any deduction and qualification. However, the service incentive leave pay awarded to him is deleted. PAL v. LIGAN | GR 146408 | February 29, 2008 FACTS: PAL and Synergy Services Corp entered into an agreement whereby Synergy undertook to provide loading, unloading, delivery of baggage and cargo and other related services from PAL’s aircraft at the Mactan station. 1.

2.

3.

4. 5.

6.

It was expressly stipulated in the contract that Synergy was an independent contractor and there would be no employer-employee relationship between the Contractor (Synergy) and/or its employees and PAL. It was also specified that should PAL find the services provided by Synergy to be unsatisfactory, Synergy has 15 days to improve its services otherwise PAL has the right the terminate its agreement immediately and without notice Respondents filed a complaint for underpayment, nonpayment of premium pay for holidays, service incentive leave pay, 13th month pay and allowances and for regularization of employment status with PAL LA found Synergy an independent contractor and dismissed the respondents’ complaint for regularization against petitioner but granted their money claims NLRC reversed LA decision and declared Synergy to be a labor-only contractor and ordered PAL to accept as regular employees, all complainants and give each of the salaries and benefits provided for in the CBA PAL argued that the law does not prohibit an employer from engaging an independent contractor like Synergy, which has

7.

substantial capital in carrying on an independent business of contracting, to perform specific jobs. Petitioner also maintained that its contracting out to Synergy services like janitorial, baggagehandling etc, which are directly related to its business, does not make respodents its employees PAL also averred that none of the 4 elements of an employeremployee relationship between petitioner and respondents, i.e., selection and engagement of an employee, payment of wages, power of dismissal, and the power to control employee’s conduct, were present in the case.

ISSUE: WON SYNERGY IS A MERE “JOB-ONLY” CONTRACTOR OR A LEGITIMATE CONTRACTOR HELD: Synergy is a mere “labor-only” contractor. 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. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. One who claims to be an independent contractor has to prove that he contracted to do the work according to his own methods and without being subject to the employer's control except only as to the results. While petitioner claimed that it was Synergy's supervisors who actually supervised respondents, it failed to present evidence thereon. It did not even identify who were the Synergy supervisors assigned at the workplace. 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 labor-only contractor. OREGAS v. NLRC, 559 SCRA 153 FACTS: Petitioners Rommel C. Oregas, Darwin R. Hilario and Sherwin A. Arboleda worked as valet parking and door attendants in respondent Dusit Hotel Nikko. They have employment contracts with respondent FVA. In 2000, FVA recalled petitioners from Dusit. Petitioners then instituted a complaint for illegal dismissal, regularization, premium pay for holiday and rest day, holiday pay, service incentive leave pay, 13 th month pay and attorney's fees against respondents Dusit, Philippine Hotelier's, Inc. and FVA. Petitioners alleged that despite the length of their service, Dusit never

granted them the status and benefits of a regular employee. Thus, when the rank and file employees' union of Dusit learned that petitioners were entitled to regularization, Dusit immediately terminated their services due to "end of contract." On 3/6/2001, Labor Arbiter Potenciano S. Canizares, Jr. dismissed the complaint for lack of merit. Petitioners failed to prove that they were employees of Dusit. Petitioners admitted that they transferred to FVA after their previous placement agencies terminated their contracts of services with Dusit. Labor Arbiter Canizares also noted that petitioners signed application and employment contracts with FVA and were under its payrolls and accounts. Thus, FVA was petitioners' employer. Finally, he ruled that petitioners were merely recalled and not dismissed from the service by FVA. On appeal, the NLRC issued a Resolution dated August 25, 2003, modifying the decision of Labor Arbiter. The NLRC observed that the four-fold test in determining the existence of an employer-employee relationship is present in petitioners' relationship with FVA. On the matter of selection and engagement, records showed that petitioners applied with and were employed by FVA. Although they were required to test drive by Dusit, it was done only to verify if they had the necessary skills and competence required by the job. On the matter of control, it was established that petitioners maintained their daily time records with FVA. On the matter of dismissal, FVA exercised its power to dismiss when it recalled petitioners from Dusit. Finally, on the matter of payment of wages, it is undisputed that petitioners were under the payrolls and accounts of FVA. Nevertheless, the NLRC noted that after petitioners' recall, they were no longer given new assignments. Since more than six months have already lapsed, petitioners were deemed to have been constructively dismissed and therefore entitled to separation pay of one-half month pay for every year of service. Petitioners elevated the case to the CA which affirmed the NLRC resolution. Reconsideration having been denied, petitioners raises the instant petition. ISSUES WON Respondent FVA is an independent contractor WON there an EMPLOYER-EMPLOYEE RELATIONSHIP exists Petitioners and Respondent Hotel

between

HELD

1. YES.

the Labor Arbiter, NLRC and the CA were unanimous in finding that FVA was a legitimate job contractor. Among the circumstances that established the status of FVA as a legitimate job contractor are: (1) FVA is registered with the DOLE and the DTI; (2) FVA has a Contract for Services with Dusit for the supply of valet parking and door attendant services; (3) FVA has an independent business and provides valet parking and door attendant services to other clients like Mandarin Oriental, Manila Hotel, Peninsula Manila Hotel, Westin Philippine Plaza, Golden B

2.

Hotel, Pan Pacific Manila Hotel, and Strikezone Bowling Lane; and (4) FVA's total assets from 1997 to 1999 amount to P1,502,597.70 to P9,021,335.13. In addition, it provides the uniforms and lockers of its employees. NO. By applying the four-fold test used in determining an employer-employee relationship, the status of FVA as the employer of petitioners is indubitably established. a. Petitioners applied and signed employment contracts with FVA. They were merely assigned to Dusit conformably with the Contract for Services between FVA and Dusit. b. FVA assigned a supervisor in Dusit to monitor petitioners' attendance, leaves of absence, performance and conduct. Petitioners also maintained their daily time records with FVA. c. Petitioners were duly notified by FVA that they would be assigned to Dusit for five months only. Thereafter, they may either be recalled for transfer to other clients or be reassigned to Dusit depending on the result of FVA's evaluation of their performance. In this case, FVA opted to recall petitioners from Dusit. d. While FVA billed Dusit for the services rendered, it was actually FVA which paid petitioners' salaries. Worthy of note, FVA registered petitioners with the Bureau of Internal Revenue and the Social Security System as its employees.

In summary, this Court accepts as established the fact that FVA is a legitimate job contractor and, in contemplation of law, the employer of petitioners. DISPOSITION: The instant petition is DENIED for lack of merit. CA’s decision is AFFIRMED. ESCARIO v. NLRC | GR No 124055 | June 8, 2000 FACTS: Petitioners allege that they were employed by CMC as merchandisers. Among the tasks assigned to them were the withdrawing of stocks from the warehouse, the fixing of prices, price-tagging, displaying of merchandise, and the inventory of stocks. These were done under the control, management and supervision of CMC. The materials and equipment necessary in the performance of their job, such as price markers, gun taggers, toys, pentel pen, streamers and posters were provided by CMC. Their salaries were being paid by CMC. According to petitioners, the hiring, control and supervision of the workers and the payment of salaries, were all coursed by CMC through its agent D.L. Admark in order for CMC to avoid its liability under the law. On 7 February 1992, petitioners filed a case against CMC before the Labor Arbiter for the regularization of their employment status. During the pendency of the case before the Labor Arbiter, D.L. Admark sent to petitioners notice of termination of their employment effective 16 March

1992. Hence, their complaint was amended so as to include illegal dismissal as cause of action. Thereafter, twenty-seven more persons joined as complainants. CMC filed a motion to implead as party-defendant D. L. Admark and at the same time the latter filed a motion to intervene. Both motions were granted. CMC, on the other hand, denied the existence of an employer-employee relationship between petitioner and itself. Rather, CMC contended that it is D.L. Admark who is the employer of the petitioners. While CMC is engaged in the manufacturing of food products and distribution of such to wholesalers and retailers, it is not allowed by law to engage in retail or direct sales to end consumers. It, however, hired independent job contractors such as D.L. Admark, to provide the necessary promotional activities for its product lines.

a principal. The labor-only contractor doesn’t have substantial capital or investment and the workers recruited perform activities directly related to the principal business of the employer. There is permissible contracting only when the contractor carries an independent business and undertakes the contract in his won manner and method, free from the control of the principal and the contractor has substantial capital or investment. The agent, and not the company, also exercises control over the petitioners. No documents were submitted to prove that the company exercised control over them. The agent hired the petitioners. The agent also pays the petitioners, no evidence was submitted showing that it was the company paying them and not the agent. It was also the agent who terminated their services. By petitioning for regularization, the petitioners concede that they are not regular employees. ALIVIADO v. PROCTER and GAMBLE PHILS

For its part, D.L. Admark asserted that it is the employer of the petitioners. Its primary purpose is to carry on the business of advertising, promotion and publicity, the sales and merchandising of goods and services and conduct survey and opinion polls. As an independent contractor it serves several clients among which include Purefoods, Corona Supply, Firstbrand, Splash Cosmetics and herein private respondent California Marketing. On 29 July 1994, the Labor Arbiter rendered a decision finding that petitioners are the employees of CMC as they were engaged in activities that are necessary and desirable in the usual business or trade of CMC.1 In justifying its ruling, the Labor Arbiter cited the case of Tabas vs. CMC which, likewise, involved private respondent CMC. On appeal, the NLRC set aside the decision of the Labor Arbiter. It ruled that no employer-employee relationship existed between the petitioners and CMC. It, likewise, held that D.L. Admark is a legitimate independent contractor, hence, the employer of the petitioners. Finding no valid grounds existed for the dismissal of the petitioners by D.L. Admark, it ordered their reinstatement. The dispositive portion of the decision reads: WHEREFORE, premises considered, the appealed judgment is modified. Intervenor DL ADMARK is ordered to reinstate the eighty one (81) complainants mentioned in the appealed decision to their former positions with backwages from March 16, 1992 until they are actually reinstated. The award of attorneys fees equivalent to ten (10%) of the award is deleted for lack of basis. Petitioners filed a motion for reconsideration but the same was denied by the NLRC for lack of merit. Hence, this petition. ISSUE: Whether or not the petitioners are employees of the company. HELD: The court ruled that there is no employer-employee relationship and that petitioners are employees of the agent. The agent is a legitimate independent contractor. Labor-only contractor occurs only when the contractor merely recruits, supplies or places workers to perform a job for

F: Petitioners worked as merchandisers of P&G from various dates, allegedly starting as early as 1982 or as late as June 1991, to either May 5, 1992 or March 11, 1993. 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. SAPS and Promm-Gem imposed disciplinary measures on erring merchandisers for reasons such as habitual absenteeism, dishonesty or changing day-off without prior notice. P&G is principally engaged in the manufacture and production of different consumer and health products, which it sells on a wholesale basis to various supermarkets and distributors.[8] To enhance consumer awareness and acceptance of the products, P&G entered into contracts with PrommGem and SAPS for the promotion and merchandising of its products. In December 1991, petitioners filed a complaint against P&G for regularization, service incentive leave pay and other benefits with damages. The complaint was later amended to include the matter of their subsequent dismissal. Ruling of the Labor Arbiter: 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 PrommGem/SAPS. He further found that Promm-Gem and SAPS were legitimate independent job contractors.

Ruling of the NLRC: The appeal of complainants is hereby DISMISSED and the decision appealed from AFFIRMED. Ruling of the Court of Appeals: CA likewise denied the petition. Hence, this petition. Petitioners’ Arguments: Petitioners insist that they are employees of P&G. They claim that they were recruited by the salesmen of P&G and were engaged to undertake merchandising chores for P&G long before the existence of Promm-Gem and/or SAPS. They further claim that when the latter had its so-called re-alignment program, petitioners were instructed to fill up application forms and report to the agencies which P&G created. Respondents’ Arguments: On the other hand, P&G points out that the instant petition raises only questions of fact and should thus be thrown out as the Court is not a trier of facts. It argues that findings of facts of the NLRC, particularly where the NLRC and the Labor Arbiter are in agreement, are deemed binding and conclusive on the Supreme Court. Issues: (1) whether P&G is the employer of petitioners; (2) whether petitioners were illegally dismissed; and (3) whether petitioners are entitled for payment of actual, moral and exemplary damages as well as litigation costs and attorney’s fees. H: The petition has merit. As a rule, the Court refrains from reviewing factual assessments of lower courts and agencies exercising adjudicative functions, such as the NLRC. Occasionally, however, the Court is constrained to wade into factual matters when there is insufficient or insubstantial evidence on record to support those factual findings; or when too much is concluded, inferred or deduced from the bare or incomplete facts appearing on record.[23] In the present case, we find the need to review the records to ascertain the facts. In order to resolve the issue of 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. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. 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. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

Clearly, the law and its implementing rules allow contracting arrangements for the performance of specific jobs, works or services. Indeed, it is management prerogative to farm out any of its activities, regardless of whether such activity is peripheral or core in nature. However, in order for such outsourcing to be valid, it must be made to an independent contractor because the current labor rules expressly prohibit labor-only contracting. In the instant case, the financial statements of Promm-Gem show 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. It also has long term assets worth P432,895.28 and current assets ofP719,042.32. Promm-Gem has also proven that it maintained its own warehouse and office space with a floor area of 870 square meters. It also had under its name three registered vehicles which were used for its promotional/merchandising business. Promm-Gem also has other clients aside from P&G. Under the circumstances, we find that Promm-Gem has substantial investment which relates to the work to be performed. These factors negate the existence of the element specified in Section 5(i) of DOLE Department Order No. 18-02. The records also show that Promm-Gem supplied its complainant-workers with the relevant materials, such as markers, tapes, liners and cutters, necessary for them to perform their work. Promm-Gem also issued uniforms to them. It is also relevant to mention that Promm-Gem already considered the complainants working under it as its regular, not merely contractual or project, employees. This circumstance negates the existence of element (ii) as stated in Section 5 of DOLE Department Order No. 18-02, which speaks of contractual employees. This, furthermore, negates – on the part of Promm-Gem – bad faith and intent to circumvent labor laws which factors have often been tipping points that lead the Court to strike down the employment practice or agreement concerned as contrary to public policy, morals, good customs or public order. Under the circumstances, Promm-Gem cannot be considered as a labor-only contractor. We find that it is a legitimate independent contractor. Furthermore, the petitioners have been charged with the merchandising and promotion of the products of P&G, an activity that has already been considered by the Court as doubtlessly directly related to the manufacturing business, which is the principal business of P&G. Considering that SAPS has no substantial capital or investment and the workers it recruited are performing activities which are directly related to the principal business of P&G, we find that the former is engaged in “labor-only contracting”. WHEREFORE, the petition is GRANTED. The case be REMANDED to the Labor Arbiter for the computation. Sonza vs. ABS-CBN Broadcasting Corporation | GR 138051 | June 10, 2004

FACTS: ABS-CBN and MJMDC entered into a contract on may 1994. ABSCBN was represented by its officers while MJMDC was represented by Sonza, as president and general manager and Mel Tiangco, as EVP and treasurer referred to in the agreement as “agent”, MJDC agreed to provide Sonza’s services exclusively ABS-CBN as talent for radio and television. The agreement listed the services Sonza would render.

fees way above the salary scales of ordinary employees is a circumstance indicative, but not conclusive of independent contractual relationship. C. Power of dismissal. – Sonza failed to show that ABS-CBN could terminate his service on grounds other than breach of contract, such as retrenchment to prevent losses as provided under labor laws.

On April 1996, Sonza wrote a letter to ABS-CBN’s president in regard to his resignation in view of the events concerning his programs and career. April 30, 1996, Sonza filed a complaint against the ABS-CBN before the DOLE. Sonza complained that the ABS-CBN did not pay his salaries, separation pay, and service incentive, leave pay, signing bonus, travel allowances and amounts due under the employee stock option plan (ESOP). On July 10 1996, ABS-CBN filed a motion to dismiss on the ground that there is no employer-employee relationship. Sonza filed an opposition to the motion on July 19, 1996.

D. power of control – applying the control test the court held that Sonza is not an employee but an independent contractor. The control test being the most important test our courts apply in distinguishing an employee from an independent contactor. ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. Moreover a radio broadcast specialist who works under minimal supervision is an independent contractor lastly, in broadcast industry exclusively is not necessarily the same as control. I.

Nature of Sonza’s claim Sonza’s claims are all based on the may agreement and stock option plan and not in the 1994 labor code. Clearly the present case does not call for an application of the labor code. In effect Sonza’s cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the court. Petition is denied.

Meanwhile, ABS-CBN opened a account to continually remit Sonza fee’s under the agreement. Labor arbiter denied the motion to dismiss; however in his decision labor arbiter dismissed the complaint for lack of jurisdiction and that there is not employer-employee relationship. On appeal, the NLRC affirmed the decision of the labor arbiter. The same was also denied upon the motion for reconsideration. ISSUES and RULING: I.

Whether or not Sonza is an employee or independent contractor

> The existence of an employer-employee relationship is a question of fact. Appellate courts accord the factual findings of the labor arbiter and the NLRC not only respect but also finality when supported by substantial evidence. Court does not substitute its own judgment for that of the tribunal in determining where the weight of evidence lies or what evidence is credible. II.

Essential elements of employer-employee relationship A.

B,

Selection and engagement of employer. – 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 independent contractual relationship. Payment of wages – whatever benefits Sonza enjoyed arose from contract and not because of an employeremployee relationship. The power to bargain the talent

SONZA V ABS-CBN BROADCASTING CORPORATION FACTS  ABS-CBN signed Agreement with Mel and Jay Management and Devt Corp (MJMDC), which agreed to provide Sonza’s services exclusively to the network as talent for radio and TV. 

Sonza resigned and filed a complaint against ABS-CBN before the DOLE that the said network didn’t pay his salaries, separation pay, service incentive leave pay, etc.



ABS filed Motion to Dismiss because there was no employeremployee relationship.

 Labor Arbiter dismissed complaint because of lack of jurisdiction. It stands to reason that a "talent" cannot be considered as an employee. NLRC affirmed Arbiter’s decision. Sonza filed certiorari action with CA, which dismissed the case. Hence this petition.

ISSUE: WON there was an employer-employee relationship between ABSCBN and Sonza? HELD: No employer-employee relationship.

SONZA maintains that all essential elements of an employer-employee relationship are present in this case. The last element, the so-called control test, is the most important element Power of Control The Agreement required SONZA to attend only rehearsals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZAs script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. The Agreement stipulates standards of performance does not require SONZA performance prescribed for

that SONZA shall abide with the rules and covering talents of ABS-CBN. The Agreement to comply with the rules and standards of employees of ABS-CBN.

In any event, not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. In this case, SONZA failed to show that these rules controlled his performance. We find that these general rules are merely guidelines towards the achievement of the mutually desired result, which are top-rating television and radio programs that comply with standards of the industry. We have ruled that:

the Labor Code. This case call for an interpretation and implementation of the May 1994 Agreement. In effect, SONZAs cause of action is for breach of contract which is intrinsically a civil dispute cognizable by the regular courts. DELA CRUZ v. MAERSK FILIPINAS CREWING, INC., 551 SCRA 284 FACTS: Respondent Elite Shipping A.S. hired petitioner Dante D. de la Cruz as third engineer for the vessel M/S Arktis Morning through its local agency in the Philippines, co-respondent Maersk Filipinas Crewing Inc. Dela Cruz was deployed to Jebel Ali, United Arab Emirates and boarded M/S Arktis Morning. In a logbook entry, chief engineer Normann Per Nielsen expressed his dissatisfaction over Dela Cruz 's performance: he has been informed that if he does not improve his Job/Working performance within [a] short time he will be signed off according to CBA Article 1 (7)1. Entry was followed by another one which was similar in content And then, Dela Cruz was finally informed of his discharge through a notice captioned "Notice according to CBA Article 1 (7)”: Reason for the decision is… The chief engineer has… made 2 entries in the engine logbook, regarding your insufficient job/working, which you are well aware of. Dela Cruz was then made to disembark at the port of Houston, Texas and was repatriated to Manila Dela Cruz thereafter filed a complaint for illegal dismissal

Further, not every form of control that a party reserves to himself over the conduct of the other party in relation to the services being rendered may be accorded the effect of establishing an employer-employee relationship. The facts of this case fall squarely with the case of Insular Life Assurance Co., Ltd. vs. NLRC. In said case, we held that:

Labor Arbiter: ruled that Dela Cruz was dismissed without just cause and due process as the logbook entry (which respondents claimed to be the first notice to petitioner) was vague.

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.

CA: reversed the decision. CA deemed the logbook entries to be sufficient compliance with the first notice requirement of the law Issues

Lastly, SONZA insists that the exclusivity clause in the Agreement is the most extreme form of control which ABS-CBN exercised over him. This argument is futile. Being an exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. SONZA seeks the recovery of allegedly unpaid talent fees, 13th month pay, separation pay, service incentive leave, signing bonus, travel allowance, and amounts due under the Employee Stock Option Plan. These claims are all based on the May 1994 Agreement and stock option plan, and not on

NLRC: upheld LA decision

ISSUES: 1. 2.

WON Dela Cruz was illegally dismissed WON Dela Cruz was a regular employer fee Held and Ratio

HELD: 1. Yes. An employer has the burden of proving that an employee's dismissal was for a just cause and that it complied with the rudimentary requirements of due process, that is, the opportunity to be heard and to defend oneself Procedural due process requires that a seaman must be given a written notice of the charges against him and afforded a formal investigation where he can defend himself personally or through a representative before he can be dismissed and disembarked from the vessel The employer is bound to furnish him two notices: (1) the written charge and (2) the written notice of dismissal (in case that is the penalty imposed) in accordance with the POEA Revised Standard Employment Terms and

Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (POEA Revised Standard Employment Terms and Conditions)

This is the only logical explanation possible as the parties cannot and should not violate the POEA's directive that a contract of enlistment must not exceed 12 months.

The notice must state with particularity the acts or omissions for which his dismissal is being sought

BIENVENIDO D. GOMA v. PAMPLONA PLANTATION INCORPORATED, 557 SCRA 124

In this case, the logbook entries did not substantially comply with the first notice, or the written notice of charge(s)

F: Petitioner commenced the instant suit by filing a complaint for illegal dismissal, underpayment of wages, non-payment of premium pay for holiday and rest day, five (5) days incentive leave pay, damages and attorney's fees, against the respondent. The case was filed with the SubRegional Arbitration Branch No. VII of Dumaguete City. Petitioner claimed that he worked as a carpenter at the Hacienda Pamplona since 1995; that he worked from 7:30 a.m. to 12:00 noon and from 1:00 p.m. to 5:00 p.m. daily with a salary rate of P90.00 a day paid weekly; and that he worked continuously until 1997 when he was not given any work assignment.[4] On a claim that he was a regular employee, petitioner alleged to have been illegally dismissed when the respondent refused without just cause to give him work assignment. Thus, he prayed for backwages, salary differential, service incentive leave pay, damages and attorney's fees.

Respondents should have indicated the grounds for the threatened termination, the specific acts or omissions illustrating the same, along with the date and the approximate time of their occurrence The same thing may be said of the written notice of dismissal. It sorely lacked the necessary details that should accompany it. The records were devoid of any proof indicating that petitioner was ever given an opportunity to present his side. Respondents dismally failed to prove that petitioner's termination from employment was for cause Hence, not only was Dela Cruz's dismissal procedurally flawed, it was also without just cause. The first sixty (60) days of service is to be considered a probationary period which entitles a shipowner or his representative to terminate the contract by giving fourteen (14) days of written notice.

1. No. Seafarers are not covered by the term regular employment, as defined under Article 280 of the Labor Code Instead, they are considered contractual employees whose rights and obligations are governed primarily by the POEA Standard Employment Contract for Filipino Seamen, the Rules and Regulations Governing Overseas Employment, and, more importantly, by Republic Act No. 8042, otherwise known as The Migrant Workers and Overseas Filipinos Act of 1995. It is an accepted maritime industry practice that the employment of seafarers is for a fixed period only. The Court acknowledges this to be for the mutual interest of both the seafarer and the employer. Seafarers cannot stay for a long and indefinite period of time at sea as limited access to shore activity during their employment has been shown to adversely affect them. Furthermore, the diversity in nationality, culture and language among the crew necessitates the limitation of the period of employment While the court recognizes that petitioner was a member of Seamen's Union of the Philippines which had a CBA with respondent Elite Shipping A.S. providing for a probationary period of employment, the CBA cannot override the provisions of the POEA Standard Employment Contract. The law is read into, and forms part of, contracts. And provisions in a contract are valid only if they are not contrary to law, morals, good customs, public order or public policy.

On the other hand, respondent denied having hired the petitioner as its regular employee. It instead argued that petitioner was hired by a certain Antoy Cañaveral, the manager of the hacienda at the time it was owned by Mr. Bower and leased by Manuel Gonzales, a jai-alai pelotari known as "Ybarra."[6] Respondent added that it was not obliged to absorb the employees of the former owner. In 1995, Pamplona Plantation Leisure Corporation (PPLC) was created for the operation of tourist resorts, hotels and bars. Petitioner, thus, rendered service in the construction of the facilities of PPLC. If at all, petitioner was a project but not a regular employee.[7] On June 28, 1999, Labor Arbiter Geoffrey P. Villahermosa dismissed the case for lack of merit.[8] The Labor Arbiter concluded that petitioner was hired by the former owner, hence, was not an employee of the respondent. Consequently, his money claims were denied.[9] On appeal to the National Labor Relations Commission (NLRC), the petitioner obtained favorable judgment when the tribunal reversed and set aside the Labor Arbiter's decision. The NLRC upheld the existence of an employer-employee relationship, ratiocinating that it was difficult to believe that a simple carpenter from far away Pamplona would go to Dumaguete City to hire a competent lawyer to help him secure justice if he did not believe that his right as a laborer had been violated. Contrary to the NLRC's finding, the CA concluded that there was no employer-employee relationship. The CA stressed that petitioner having

raised a positive averment, had the burden of proving the existence of an employer-employee relationship. I: 1) Is the petitioner a regular employee of the respondent? 2) If so, was he illegally dismissed from employment? and 3) Is he entitled to his monetary claims? H: A thorough examination of the records compels this Court to reach a conclusion different from that of the CA. It is true that petitioner admitted having been employed by the former owner prior to 1993 or before the respondent took over the ownership and management of the plantation, however, he likewise alleged having been hired by the respondent as a carpenter in 1995 and having worked as such for two years until 1997. He is a project employee as he was hired - 1) for a specific project or undertaking, and 2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee. In other words, as regards those workers who worked in 1995 specifically in connection with the construction of the facilities of Pamplona Plantation Leisure Corporation, their employment was definitely "temporary" in character and not regular employment. Their employment was deemed terminated by operation of law the moment they had finished the job or activity under which they were employed.[22] Thus, departing from its initial stand that it never hired petitioner, the respondent eventually admitted the existence of employer-employee relationship before the CA. It, however, qualified such admission by claiming that it was PPLC that hired the petitioner and that the nature of his employment therein was that of a "project" and not "regular" employee. The employment relationship having been established, the next question we must answer is: Is the petitioner a regular or project employee? We find the petitioner to be a regular employee provided in Article 280 of the Labor Code, as amended. Respondent is engaged in the management of the Pamplona Plantation as well as in the operation of tourist resorts, hotels, inns, restaurants, etc. Petitioner, on the other hand, was engaged to perform carpentry work. His services were needed for a period of two years until such time that the respondent decided not to give him work assignment anymore. Owing to his length of service, petitioner became a regular employee, by operation of law. A project employee is assigned to carry out a specific project or undertaking the duration and scope of which are specified at the time the employee is engaged in the project. A project is a job or undertaking which is distinct, separate and identifiable from the usual or regular undertakings of the company. A project employee is assigned to a project which begins

and ends at determined or determinable times.[30] The principal test used to determine whether employees are project employees as distinguished from regular employees, is whether or not the employees were assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the time the employees were engaged for that project.[31] In this case, apart from respondent's bare allegation that petitioner was a project employee, it had not shown that petitioner was informed that he would be assigned to a specific project or undertaking. Neither was it established that he was informed of the duration and scope of such project or undertaking at the time of his engagement. Most important of all, based on the records, respondent did not report the termination of petitioner's supposed project employment to the Department of Labor and Employment (DOLE). Department Order No. 19 (as well as the old Policy Instructions No. 20) requires employers to submit a report of an employee's termination to the nearest public employment office every time the employment is terminated due to a completion of a project. Respondent's failure to file termination reports, particularly on the cessation of petitioner's employment, was an indication that the petitioner was not a project but a regular employee.[32] We stress herein that the law overrides such conditions which are prejudicial to the interest of the worker whose weak bargaining position necessitates the succor of the State. What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker oftentimes acquiesces. Neither is it the procedure of hiring the employee nor the manner of paying the salary or the actual time spent at work. It is the character of the activities performed by the employer in relation to the particular trade or business of the employer, taking into account all the circumstances, including the length of time of its performance and its continued existence. Given the attendant circumstances in the case at bar, it is obvious that one year after he was employed by the respondent, petitioner became a regular employee by operation of law.[33] As to the question of whether petitioner was illegally dismissed, we answer in the affirmative. Well-established is the rule that regular employees enjoy security of tenure and they can only be dismissed for just cause and with due process, i.e., after notice and hearing. In cases involving an employee's dismissal, the burden is on the employer to prove that the dismissal was legal. This burden was not amply discharged by the respondent in this case. Obviously, petitioner's dismissal was not based on any of the just or authorized causes enumerated under Articles 282, 283 and 284 of the Labor Code, as amended. After working for the respondent for a period of two years, petitioner was shocked to find out that he was not given any work assignment anymore. Hence, the requirement of substantive due

process was not complied with. Apart from the requirement that the dismissal of an employee be based on any of the just or authorized causes, the procedure laid down in Book VI, Rule I, Section 2 (d) of the Omnibus Rules Implementing the Labor Code, must be followed. Failure to observe the rules is a violation of the employee's right to procedural due process. Having shown that petitioner is a regular employee and that his dismissal was illegal, we now discuss the propriety of the monetary claims of the petitioner. An illegally dismissed employee is entitled to: (1) either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and (2) backwages. In the instant case, we are prepared to concede the impossibility of the reinstatement of petitioner considering that his position or any equivalent position may no longer be available in view of the length of time that this case has been pending. Moreover, the protracted litigation may have seriously abraded the relationship of the parties so as to render reinstatement impractical. Accordingly, petitioner may be awarded separation pay in lieu of reinstatement. Petitioner's separation pay is pegged at the amount equivalent to petitioner's one (1) month pay, or one-half (1/2) month pay for every year of service, whichever is higher, reckoned from his first day of employment up to finality of this decision. Full backwages, on the other hand, should be computed from the date of his illegal dismissal until the finality of this decision. On petitioner's entitlement to attorney's fees, we must take into account the fact that petitioner was illegally dismissed from his employment and that his wages and other benefits were withheld from him without any valid and legal basis. As a consequence, he was compelled to file an action for the recovery of his lawful wages and other benefits and, in the process, incurred expenses. On these bases, the Court finds that he is entitled to attorney's fees equivalent to ten percent (10%) of the monetary award.[42] Lastly, we affirm the NLRC's award of salary differential. In light of our foregoing disquisition on the illegality of petitioner's dismissal, and our adoption of the NLRC's findings, suffice it to state that such issue is a question of fact, and we find no cogent reason to disturb the findings of the labor tribunal. Petition granted. Wah Yuen Restaurant v. Jayona | GR 159448 | Dec. 16, 2005 | J. Carpio-Morales F: Primo Jayona (respondent) was hired in December 1998 as Assistant Manager of Wah Yuen Restaurant (petitioner). By respondent’s claim, his initial monthly salary was P9,000.00, which was increased to P9,450.00 effective January 15, 2000.

By letter-memorandum dated January 5, 2000. Betty Chua, the President of petitioner, directed respondent to explain within 72 hours why he should not be dismissed from the service for grave dishonesty and loss of confidence for billing a customer in an amount considerably less than the cost of the actual stuff ordered. And Betty warned respondent that a repetition of the same act would cause his automatic dismissal from the service. A handwritten note with an unidentified initial at the lower portion of the letter-memorandum indicates that respondent refused to acknowledge receipt thereof. Subsequently, petitioner through counsel, by letter of April 5, 2000 which was served upon respondent on even date, terminated his services effective that same date, upon the ground that he was “found for the second time on April 3, 2000 (the first was on January 3, 2000) to have charged/billed a customer an amount, which was considerably less than the actual order, [which] is certainly prejudicial to the interests of [his] employer, a practice which can bring about the collapse of the business in the long run; that is if the practice is not checked immediately.” Respondent thus filed a complaint for illegal dismissal, recovery of overtime pay, service incentive leave pay and 13th month pay. The Labor Arbiter dismissed respondent’s complaint on the ground that as an assistant manager, he works for as long as he enjoys the trust and confidence of his employer, but once the trust and confidence are lost, he has no more reason to stay as such. On appeal, the National Labor Relations Commission (NLRC), by Resolution of December 14, 2001, affirmed the dismissal. On respondent’s Petition for Certiorari, the Court of Appeals reversed and set aside the NLRC Resolution. The CA gave the petition due course. Hence, the present petition for review. Petitioner harps on the “unwarranted stress on respondent’s rather self-serving claim that he was granted a salary increase barely two (2) weeks after he committed his first infraction.” I: WON the respondent was illegally dismissed H: In the case at bar, petitioner, which has the onus of proving that the dismissal of respondent on account of loss of confidence arose from particular facts, failed to discharge the same. On respondent’s claim that his salary was increased effective January 15, 2000, petitioner argues that other than respondent’s self-serving claim, no evidence was presented to show that indeed the salary increase took effect on January 15, 2000. This Court notes that in its Position Paper before the Labor Arbiter, petitioner stated that respondent was hired in December 1998 at a monthly

salary ofP9,540.00 “more or less.” If respondent was hired at such amount, contrary to respondent’s claim that his initial salary was P9,000.00 but that it was increased toP9,450 on January 15, 2000 or twelve days after he was alleged to have committed an infraction on January 3, 2000, it would have been easy for petitioner to present documentary proof of its claim. But none was produced.

The decision is AFFIRMEDwith MODIFICATION. The records of this case are REMANDED to the Labor Arbiter, through the National Labor Relations Commission, only for the determination of the amount of separation pay plus backwages and other benefits to which respondent is entitled. Austria v. NLRC, 310 SCRA 293

Under Article 277 (b) of the Labor Code, as well as Section 2, Rule XXIII, Book V and Section 2, Rule I, Book VI, of the Implementing Rules and Regulations of the Labor Code, the dismissal of an employee must be for a just or authorized cause and after due process. Procedural due process requires the employer to give the employee two notices. The first is to apprise him of the particular acts or omissions for which his dismissal is sought, and the second is to inform him of the decision to terminate him. Failure to comply with these mandatory procedural requirements taints the dismissal with illegality and any judgment rendered by the employer without compliance therewith can be considered void and inexistent. For petitioner to consider the letter-memorandum of January 5, 2000 as the first notice, and the letter of April 5, 2000 as the second notice of termination of employment is erroneous. For albeit the two letters dealt with infractions of the same nature, they were separate and distinct. The April 5, 2000 termination letter itself clearly stated that respondent was being terminated for committing a second infraction. As such he should have been given the chance to give his side thereon. But he was not. In any event, not only did petitioner fail to observe the due process requirements. It also failed to establish by substantial evidence that the alleged second infraction was committed. Loss of confidence then, which is the usual ground for the removal of a managerial employee, not having been established, like any other lawful cause, the petition must fail. Although the loss of confidence on petitioner’s part is unfounded, reinstating respondent to his former position would not be advisable given the souring of their relationship. This Court now, therefore, directs petitioner to just afford respondent his right to separation pay, backwages, and other benefits under the law. Since the records do not provide a basis for the determination of the amount of separation pay plus backwages and other benefits to which respondent is entitled, a remand of the case to the Labor Arbiter is thus in order.

F: PHILIPPINE STEEL COATING CORPORATION (PHILSTEEL), private respondent, is engaged in the manufacture of prefabricated steel, galvanized iron and other metal products. On 19 December 1985 it hired petitioner Nazario C. Austria as its Credit and Collection Manager. On 11 August 1987 petitioner and private respondent PHILSTEEL entered into a "Confidentiality Agreement" whereby he agreed not to disclose to anyone outside the company any technical, operational and other such information acquired in the course of his employment, unless otherwise duly authorized by private respondent, on pain of immediate dismissal. A smooth and satisfactory employee-employer relationship ensued between the two (2) parties until 17 August 1989 when petitioner was unceremoniously terminated by private respondent company on the ground that he allegedly disclosed confidential information to prospective competitors and had undertaken activities far beyond his official duties and responsibilities. On 30 August 1989 Austria filed a case for illegal dismissal against PHILSTEEL. He alleged that on 5 August 1989 the President of PHILSTEEL, Abeto Uy, demanded his resignation purportedly due to loss of confidence but refused to shed light on the reasons therefor. Austria further alleged that on 17 August 1989, without any prior written notice, he was summoned to a meeting with the Vice-President for Finance, Primo Valerio, and Vice-President for Legal and Personnel, Gregorio Vega. Therein he was questioned about a certain 13 July 1989 telefax message sent by one Felix Lukban to PHILSTEEL's Australian supplier of equipment and machinery, Bliss Fox Manufacturing Corporation (BLISS FOX). The telefax showed that, on behalf of an unnamed client, Lukban was asking for the purchase price of a complete line of machinery and equipment for a steel galvanizing plant. Austria denied any knowledge of the telex. Petitioner was also asked about his close relationship with Lukban, which the former admitted, Lukban being the godfather of his child. Immediately after the meeting Austria was given his notice of termination and required to surrender the keys to his company car and to his room which were in his possession. When he returned to his room it was already padlocked; when he passed by his car it was barricaded. Austria submitted in support of his complaint the affidavit of Felix Lukban executed on 13 December 1989 disclaiming any participation of petitioner in the sending of the telefax message. In addition, Lukban testified to the same effect and denied hearing any answer from BLISS FOX on his telefax. PHILSTEEL, on the other hand, contended that any information as to the sources of its supply was highly confidential as the steel industry was very

competitive, and the information was disclosed by Austria to Lukban. The basis for this contention was the incident of 5 August 1989 when a representative of BLISS FOX named Charles Villa informed Abeto Uy, in the presence of Primo Valerio and Gregorio Vega, of the fax message sent by Lukban to BLISS FOX. Charles Villa was said to have stated that Lukban represented himself to be acting for PHILSTEEL so he verified the representation from Uy who however denied it. Forthwith, Villa dialed a certain number from the telefax message.[9] After a brief exchange with the person on the other end of the phone, during which time Villa scribbled a name at the back of the telex, he informed Uy that he just talked with Lukban who informed him that his contact with PHILSTEEL was Rudy Austria whose name he had just written. After Villa left, Austria was immediately investigated on the matter. Petitioner admitted having a close relationship with Lukban. Austria also volunteered to disclose secret meetings at Manila Garden Hotel with Lukban and the latter's son-in-law regarding plans to put up a rival galvanizing business either here in the Philippines or in Singapore, as well as meetings at company premises with a group of Australians on the same subject. A second investigation held on 17 August 1989 yielded the same result. Testimonies of Vega and Valerio, as well as the latter's 29 November 1989 affidavit, the confidentiality agreement and the termination letter were presented to buttress private respondents' evidence. The Labor Arbiter found the evidence of private respondents credible on the ground that no other inference other than Austria's guilt could be drawn from these established circumstances: the Australian representative of BLISS FOX did not know Austria nor the latter's nickname (Rudy) when he called Lukban and inquired who Lukban's contact person was at PHILSTEEL; Lukban was not only known to Austria, he was close to him; and, Austria signified his intention to join the rival company which Lukban planned to form. The Labor Arbiter pointed out that petitioner failed to establish any motive on the part of private respondents and of Valerio and Vega in terminating his employment or in testifying against him since his services were still highly satisfactory as of July 1989. Thus, the Labor Arbiter declared the dismissal to be legal but ordered private respondents to pay petitioner P24,000.00 separation pay considering that the company suffered no loss and that there was no proof of a rival company later established by petitioner. On appeal the NLRC agreed with the thesis of the Labor Arbiter that petitioner failed to prove any other motive by private respondents for his termination considering his excellent job performance. The Commission however modified the Labor Arbiter's decision by directing PHILSTEEL to pay petitioner an indemnity of P1,000.00 for non-observance of due process in failing to provide petitioner with a prior written notice of the investigation and for not giving him time to answer charges and to seek assistance of counsel.

Basic is the rule that judicial review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor officials' findings rest, more so when both the Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the decision of the NLRC especially when its findings of fact on which the conclusion was based are not supported by substantial evidence. By substantial evidence, we mean the amount of relevant evidence which a reasonable mind might accept as adequate to justify the conclusion. The NLRC grounded its findings on the following postulates: (a) the witnesses of PHILSTEEL are credible for petitioner failed to show any ground for them to falsely testify, especially in the light of his excellent job performance; and, (b) respondents' witnesses are more credible than petitioner's - Lukban who, insofar as the source of the information is concerned, impressed the NLRC as evasive. The NLRC however entertained a patent misapprehension of the burden of proof rule in labor termination cases. Unlike in other cases where the complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just cause rests upon the employer. Such is the mandate of Art. 278 of the Labor Code. In brief, the evidence of PHILSTEEL rests upon the following bases: (a) the allegation of Charles Villa, representative of BLISS FOX, that Lukban named petitioner Austria as his contact in PHILSTEEL; (b) the close relationship of Lukban and Austria; and, (c) the admissions of Austria during the investigation relative to both the close relationship with Lukban and their plans to set up a rival business. I: WON NLRC committed grave abuse of discretion for its misappreciation of the evidence and giving it undue weight H: Like a house of cards, the evidence of private respondents collapses when we take into account the fact that its foundation is made of hearsay evidence or mere speculations. It must be noted that the testimonies of Valerio and Vega relied mainly on the veracity of the assertions of Villa. They did not say that they actually heard or observed Lukban admit to Villa that the former's client was PHILSTEEL and that his contact with PHILSTEEL was Austria. What they seemingly saw was Villa scribbling a name on the telefax purportedly dictated by Lukban. In short, what they appear to have observed was what Villa wanted them to observe, no matter whether it was the truth or not. Thus, their testimony was clearly hearsay and must not be given weight. Moreover, the veracity of Villa's assertions, even as to his being a representative of BLISS FOX, is suspect. The reliance both by the Labor Arbiter and the NLRC on the hearsay testimonies in assessing the evidence of private respondents reflects a dangerous propensity for baseless conclusions amounting to grave abuse of discretion. Such propensity is further shown when public respondent gave imprimatur to PHILSTEEL's conclusion that Austria was the one who divulged the so-called confidential information due mainly to his close affinity with Lukban.

Of significance here is the fact that nowhere in all the allegations of PHILSTEEL was there proof of any concrete action by Austria of divulging confidential information and of setting up a rival business. Everything was according to what Villa said or what Lukban supposedly said. Thus, PHILSTEEL's resort to Austria's "admissions." The admission of close relationship is certainly true as it was affirmed by both Austria and Lukban. The "admission" however, of their setting up a rival business strikes this Court as somewhat forced like squeezing a stone for water. The reality of such admission is negated by subsequent events. At no time did such an envisioned "rival" company come to being. Indeed, after his dismissal, petitioner had to languish for several months in uncertainty while looking for employment, instead of just joining the alleged company. Until he died on 15 March 1997, petitioner never went into partnership with Lukban nor joined any other company. Accusation cannot take the place of proof. A suspicion or belief no matter how sincerely felt cannot be a substitute for factual findings carefully established through an orderly procedure. Such orderly procedure was denied petitioner by PHILSTEEL, as correctly found by the NLRC, thus In the instant case, there was at least a partial denial of the complainant's right to due process because there was no showing: (1) that he was given the required first written notice; (2) that he was given sufficient time to answer the charges against him; and, (3) that he had the chance to obtain the assistance of counsel. As there is a finding of illegal dismissal, an award of back wages, instead of indemnity, computed from the time of dismissal up to the time of his death, with legal interest plus attorney's fees, might properly assuage the hurt and damages caused by such illegal dismissal. The petition is GRANTED. General Bank & Trust Co. v. CA, 135 SCRA 569 F: This case starts with the employment of plantiff-appellee with the Cebu Branch of the First National City Bank of New York for 18 years, where he rose to the position of Chief Clerk, Accounting Department (Exhibit 0); that on January 11, 1965, plaintiff-appellee joined the defendant bank in its Cebu branch as accountant with an annual compensation of P6,000.00 (Exhibit A); that on April 26, 1965, the Cebu Branch of defendant bank began operating and doing business with the public; that on January 1, 1966, plaintiff received an increase of P50.00 bringing his monthly salary to P550.00 (Exhibit D); that on April 11, 1967 defendant bank appointed the plaintiff to the position of Acting Manager of its Cebu Branch, with the corresponding increase of sale to P700.00 a month (Exhibit E); that effective September 1, 1967, defendant bank granted plantiff a monthly housing allowance of P200.00 in addition to his monthly salary (Exhibit F); that on October 3, 1967 defendant bank appointed plaintiff as the regular Manager of its Cebu Branch (Exhibit G) effective May 1, 1968; that defendant bank increased plaintiff's salary to P1800.00 a month (Exhibit H); that on May 16, 1969 while the plaintiff was on vacation leave, he

happened to visit the bank and learned that three tellers of defendant bank's branch in Cebu City, namely, Miss Crystal Enriquez, Miss Yolanda Chu, and Miss Sonia Chiu, had been transferred to the head office in Manila by defendant Jose D. Santos; that the plantiff went to Manila on May 18, 1969 to make personal representation with the head office for the retention of the said tellers in Cebu; that on May 26, 1969 the plaintiff reported back for duty with defendant bank's branch in Cebu and reinstated immediately the three tellers to their respective positions in the Cebu branch of defendant bank; that on May 28, 1969 defendant Jose D. Santos submitted a report to defendant Salvador D. Tenorio alleging that there was excess personnel in the Cebu Branch; that on the same date defendant Jose D. Santos submitted a supplementary report to defendant Salvador D. Tenorio charging the plaintiff of over appraising the real estate offered by Domingo Chua as collateral for his credit accommodation (Exhibit 34); that defendant Salvador D. Tenorio immediately dispatched a letter to the plaintiff dated May 30, 1969 requiring him to explain within twenty-four hours why no disciplinary action should be taken against him for alleged repeated violation of defendant bank's policies and directives regarding credit accommodations and for over-appraisal of the real estate collateral for Domingo Chua's account, among others (Exhibit 8); that on June 6, 1969, the plaintiff received the said letter of defendant Salvador D. Tenorio but found it impossible to render the required explanation in 24 hours; that on June 19, 1969 defendant Jose D. Santos went to Cebu City and served plaintiff with the letter of defendant Salvador D. Tenorio, dated June 18, 1969, suspending the plaintiff; and that on July 22, 1969 plantiff was served with the order of his termination signed by defendant Clarencio S. Yujuico, dated July 18, 1969. The Court of First Instance of Cebu rendered a decision, finding the dismissal of plantiff as without just cause or otherwise illegal arbitrary, oppressive and malicious, and ordering defendants to pay to the plaintiff, jointly and severally. The Court of Appeals, affirmed the decision of the lower court. I: WON the dismissal of Manuel E. Batucan was justified on the ground that he repeatedly failed to uphold the interests of the bank thus leading to his employer's loss of confidence on him. H: After a careful review of the case, we find no error in the finding of the Court of Appeals that Mr. Batucan was indeed illegally dismissed. The petitioners' claim that "undisputed documentary evidence show that prior to his dismissal, specifically from March 1968 to January 1969, respondent Batucan had been repeatedly cited, warned and finally threatened with dismissal by his superior, petitioner Tenorio, for his practice of granting credit accommodations without authority during his tenure." They support such claim with six memoranda addressed to Mr. Batucan, to wit: Exh. "22" dated April 17, 1968 by Tenorio; Exh. "23" dated March 12, 1968 by Tenorio; Exh. "24" dated March 14, 1968 by Tenorio; Exh. "29" dated December 9, 1968 by Tenorio; Exh. "30" dated December 27, 1968 by Tenorio; Exh. "34" dated January 28, 1969 by Tenorio.

Petitioners' argument is devoid of merit. We agree with the respondent that these communications are "nothing more than routinary acts and/or privileged acts of top management officials which could not in any way affect or erode petitioners' confidence in respondent Batucan." After the first three aforecited exhibits were dispatched to Cebu on March 12, 1968, March 14, 1968, and April 17, 1968, petitioner San Luis cleared Mr. Batucan from an exceptions reported by the Central Bank examiners in connection with their examination conducted in March, 1968. In his report to the President of the bank in about the first week of March 1968, San Luis commended Mr. Batucan for the good image enjoyed by the bank in the locality because clients, customers, and depositors spoke well and highly of Mr. Batucan for his dedication, sincere and upright dealing with people. Because of such commendation, the president of the bank, the late Senator Quintin Paredes gave Mr. Batucan an increase of P100.00 in his monthly salary effective May 1, 1968. Mr. Batucan was also asked to speak at the manager's meeting on October 19, 1968 on his "Techniques in Effective solicitation of Deposits or New Accounts." Batucan was also given a free hand in the prosecution of a defalcating head teller relying on his good judgment to protect the interests of the bank. With the foregoing circumstances, we cannot reconcile the management's alleged loss of confidence in Mr. Batucan with the latter's commendations for efficient performance, his having been given an increase in salary and his being asked to speak to other colleagues on effective banking techniques shortly after the supposed loss of confidence. We agree with the Court of Appeals in its finding that preponderance of the evidence, however, shows that the alleged unauthorized extension of temporary over-draft or credit accommodations referred to credit accommodations which were granted by and already existing during the term of the previous management. Not only did the Court of Appeals establish that there were no improper credit accommodations granted during Mr. Batucan's term as manager but his competence at being able to regularize these accounts and his contributions to the improvement of the bank were clearly ascertained. There is no question that managerial employees should enjoy the confidence of top management. This is especially true in banks where officials handle big sums of money and engage in confidential or fiduciary transactions. However, loss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith.

We now come to the issue of damages. Petitioners question the propriety of awarding moral and exemplary damages to the respondent. Under Article 2217 of the Civil Code: Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or commission. Mr. Batucan left a stable job with a reputable bank to join the petitioner bank. He had been an employee of the First National City Bank of New York for eighteen (18) years. Undoubtedly, before he accepted petitioner Tenorio's invitation, he must have thought the matter over several times. And from the time he joined the petitioner bank, the records show that Mr. Batucan has indeed worked his way up from accountant to permanent branch manager of the bank. During his term as manager, he was able to increase the income and resources of the bank. He raised the image of petitioner bank in the business and banking community and placed its operations on a good and competitive basis. His peremptory dismissal from the bank was certainly a shock to him and damaged his moral feelings and personal pride after all the loyalty and hard work he had dedicated to the bank. The only reason for his dismissal found in the records is his failure to follow top-management orders with regards to the transfer of the three tellers. Petitioners alleged it to be insubordination. Nevertheless, insubordination must be proven to justify dismissal (St. Luke's Hospital v. Ministry of Labor and Employment, 116 SCRA 240). And we do not think that his earnest efforts in making representations to retain the three tellers warrant his dimissal. A manager or supervisor must stand up for his subordinates unless the latter are guilty of wrongdoing or some conduct prejudicial to the employer. Only after as representations was Mr. Batucan questioned on the several "unauthorized credit accommodations." His failure to explain within 24 hours which, in the light of the circumstances, was too short, caused his suspension and later, his dismissal retroactive to the date of suspension. There was no valid reason for his dismissal, much less for all the charges and accusations made against him. The dismissal followed by the efforts to justify it was tainted by bad faith or malice on the part of the petitioners who wanted Mr. Batucan removed from his post. The employer's right to dismiss his employee, however, differs from, and should not be confused with the manner in which the right is exercised. The manner in which the company exercised its right to dismiss in the case at bar was abusive; hence, it is liable for moral damages, as previously discussed. A review of the records, however, indicates that the moral and exemplary damages awarded may be somewhat excessive. Hence, in the exercise of

our discretion and after considering all factors, we have decided to reduce to P20,000.00 the award for moral and exemplary damages and to P5,000.00 the award for attorney's fees. The award of P1,000.00 a month from the time Mr. Batucan's employment was terminated up to the date this case becomes final and executory is likewise excessive. At the same time, pursuant to Republic Act 1052 as amended by Republic Act 1787, which provides that in case of employment without a definite period, an employer may terminate an employee's services without just cause by serving to the employee a written notice at least one month in advance or by granting him pay equivalent to one-half month salary for every year of service, whichever is longer. Considering the facts and equities of this case, however, we have decided to limit compensatory damages to only P12,000.00, as explained above.chanroblesvirtualawlibrary chanrobles virtual law library Lastly, petitioners raise the issue that "individual petitioners, having acted in their official capacities as bank officers, did not incur any personal liability in favor of Batucan. We quote with favor the finding of the respondent Court: The evidence shows that the individual defendants acted jointly in causing the illegal and unjustifiable dimissal of the plaintiffappellee. Hence, the trial court is correct in holding the individual defendants jointly and severally liable to the plaintiff-appellee. " Clearly, the petitioners acted beyond their authority and against what the law provides. WHEREFORE, the decision appealed from is MODIFIED. Sy v. Metrobank, 506 SCRA 580 F: Petitioner Dennis D. Sy, herein substituted by his heirs Soledad Y. Sy, Ronald Allan Y. Sy, and Melinda S. Pompenada, was the branch manager in Bajada, Davao City, of respondent Metropolitan Bank and Trust Company. Under the bank’s Retirement Plan, an employee must retire upon reaching the age of 55 years or after rendering 30 years of service, whichever comes first. Sy would have rendered 30 years of service by August 18, 1999. However, on February 5, 1999, he was reappointed as branch manager for a term of one year starting August 18, 1999 until August 18, 2000. His monthly compensation was accordingly increased from P50,400 to P54,500, effective August 16, 1999. Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. On November 15, 1999, Sy tendered an irrevocable letter of retirement. In his letter, he requested the timely release of his retirement pay and other benefits. His request was denied.

The bank alleged that Sy allowed spouses Gorgonio and Elizabeth Ong to conduct "kiting" activities in their account with the bank. Thus, the bank placed Sy under preventive suspension and gave him 48 hours to submit a written explanation. In response, Sy wrote a letter explaining that he only made a wrong credit judgment. Not satisfied with his answer, the bank notified Sy of other alleged violations of company policies. In reply, Sy explained in writing that the accommodation granted to spouses Samuel Aquino and Charito Sy-Aquino was only P650,000, not P9.11M as claimed by the bank. He added that the spouses even offered a parcel of land as collateral and were willing to sell a vehicle in settlement of their obligation with the bank. Unconvinced, the bank dismissed Sy on December 15, 1999. Sy filed against the bank a complaint for illegal suspension, illegal dismissal and money claims, docketed as RAB-11-01-00024-0. However, the Labor Arbiter dismissed the case for lack of merit. On appeal, the National Labor Relations Commission (NLRC) deemed Sy compulsorily retired. Thus, the NLRC awarded him retirement benefits, unpaid salary, monetary value of unused leave credits, 13th month pay, Christmas bonus, and refund of provident fund. The parties sought reconsideration, which were both denied for lack of merit. Respondent bank elevated the matter to the Court of Appeals, which set aside the ruling of the NLRC and reinstated the Decision of the Labor Arbiter. On motion for reconsideration, however, the Court of Appeals modified its ruling and ordered the bank to reimburse Sy’s contribution to the provident fund. I: (1) Was petitioner illegally terminated? (2) If his dismissal was valid, would he still be entitled to retirement benefits? H: Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollected funds in wanton violation of the bank’s policies. 19 It was sufficient basis for the bank to lose trust in him. Unlike a rank-and-file worker, where breach of trust as a ground for valid dismissal requires proof of involvement in the alleged anomaly and where mere uncorroborated accusation by the employer will not suffice, the sheer existence of a basis for believing that the employer’s trust has been breached is enough for the dismissal of amanagerial employee. Petitioner’s conduct betrays his culpability. Shortly after the audit conducted in the Bajada branch, he tendered an "irrevocable letter of retirement." In the said letter, he requested that his retirement be made

effective December 1, 1999. Said request arouses suspicion considering that he had previously agreed to the extension of his employment as branch manager until August 18, 2000. Petitioner’s evident failure to offer any reasonable explanation for such sudden shift in his plans is prejudicial to his cause. As for the requirement of due process, records show that it has been fully satisfied in the instant case. The bank had complied with the two-notice requirement, i.e.: (a) a written notice of the cause for his dismissal to afford him ample opportunity to be heard and to defend himself with the assistance of counsel, if he so desires; and (b) a written notice of the decision to terminate him, stating clearly the reason therefor. Petitioner, however, theorizes that having been compulsorily retired, he could no longer be dismissed by the bank. His premise is absurd. Indeed, he would have qualified for compulsory retirement under the bank’s Retirement Plan. However, he opted to accept the bank’s offer of extending his employment for another year with a corresponding salary increase. Thus, in effect, he had never retired. Unfortunately for him, while serving such extended term, the bank discovered his unauthorized grant of accommodation to accounts engaged in "kiting" activity. Such act is a clear breach of the trust reposed in him by the bank. He cannot now elude dismissal for a just cause by claiming he was already retired compulsorily. Is petitioner nevertheless entitled to retirement benefits? Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and backwages. Since petitioner’s dismissal was for a just cause, he is not entitled to any retirement benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous banking transactions by bank employees whose employments have been extended. Since a bank’s operation is essentially imbued with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whom it has lost trust and confidence and whose continued employment would patently be inimical to the bank’s interest.24 While the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit. While the Court commiserates with petitioner who has spent with the bank the best three decades of his employable life, we find no room to accord him compassionate justice. Records showed that he violated the bank policies prior to his compulsory retirement. Thus, there can be no earned retirement benefits to speak of. No such provision is provided for by the Labor Code. In fact, even the Civil Service Law imposes forfeiture of retirement benefits in valid dismissal cases. Notably, the Court has also disallowed claims for retirement benefits in valid dismissal cases because the retirement plan itself precluded

employees dismissed for cause from availing it. Although no such prohibition in the retirement plan was alleged or proved in this case, we nevertheless deny petitioner’s claims because his offenses, vis-à-vis his long years of service with the bank, reflect a regrettable lack of loyalty which he should have strengthened instead of betrayed. The petition is hereby DENIED. Jardine Davies v. NLRC, 311 SCRA 289 F: Petitioner is a domestic corporation engaged in general trading, including the exclusive distribution in the country of the world-renowned “Union 76” lubricating oil manufactured by Unoco Philippines, Inc. Private respondent was a former sales representative of petitioner. A review of the records of this case reveals that petitioner engaged the services of a private investigation agency to conduct surveillance and investigation pertinent to reports that some of petitioner’s products, particularly the “Union 76” lubricating oil, were being illegally manufactured, blended, packed and distributed. Consequently, a private investigator of the said investigation agency, confirmed that there were really fake “Union 76” lubricating oil in the market and reported further that the same were indeed being illegally manufactured, blended, packed and distributed by private respondent Virgilio Reyes. Petitioner then secured a search warrant which led to the seizure of some of the alleged fake items found in the apartment complex reportedly occupied by said private respondent. Thereafter, a criminal complaint for violation of Article 189 on unfair competition of the Revised Penal Code [2] was filed against private respondent and others. Subsequently, private respondent was likewise charged administratively for having committed serious misconduct inimical to the interest of petitioner company. Accordingly, he was advised to go on an indefinite leave. This eventually led to his termination from employment on February 23, 1983. Meanwhile, all the materials seized by virtue of the search warrant issued were released by order of the same court in view of a petition filed by private respondent’s younger brother, Donato Reyes. Apparently, the younger Reyes convinced the court that he was the legal tenant of the apartment complex searched and that all the materials seized are legally owned by him. He further proved that he was legally engaged in the business of general merchandising, operating under the trade name of Lubrix Conglomerate, a single proprietorship duly licensed by the government in dealing with oil and lubricant products. Furthermore, he presented the receipts covering the purchases of the seized Unoco products purposely for packing the same in small containers to be resold to the public.

Relying on the foregoing facts, private respondent sued petitioner for illegal dismissal. But the Labor Arbiter, Manuel R. Caday, dismissed his complaint. In a Decision dated September 24, 1985, the labor arbiter stated that the apartment complex allegedly occupied by private respondent was indeed the situs of the illegal manufacture, blending and packaging of “Union 76” oil and lubricating products. Convinced that private respondent was personally involved in the aforementioned illegal activity, the labor arbiter ruled that the private respondent committed an act of serious misconduct, fraud or willful breach of trust reposed in him by petitioner, a just cause for terminating employment. Private respondent appealed to the NLRC. In its Decision dated March 17, 1986, the NLRC reversed the labor arbiter’s judgment on the ground that there is no cogent reason for petitioner to lose its trust and confidence on private respondent. I: WON public respondent committed grave abuse of discretion in reversing the labor arbiter’s judgment which found a just and valid cause for dismissal of private respondent by petitioner. H: Petitioner’s attack on the alleged misappreciation of facts and distorted evaluation of evidence by public respondent stands, in our view, on hollow ground. Resort to judicial review of the decisions of the National Labor Relations Commission by way of a special civil action for certiorari under Rule 65 of the Rules of Court is confined only to issues of want or excess of jurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor agency in reaching its conclusion. Neither is it for this Court to re-examine conflicting evidence, re-evaluate the credibility of the witnesses nor substitute findings of fact for those of an administrative body which has gained expertise in its specialized field. Arguably, there may even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy of certiorari. It is beyond dispute that loss of trust and confidence constitutes a valid ground for dismissing an employee. It is settled that loss of confidence as a just cause for terminating employment must be premised on the fact that an employee concerned holds a position of trust and confidence. This situation obtains where a person is entrusted with confidence on delicate matters, such as care and protection, handling or custody of the employer’s property as in this case. But, in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. Likewise, it must be noted that proof beyond reasonable doubt is not required to dismiss an employee on the ground of loss of confidence. It is sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of

his participation therein renders him unworthy of the trust and confidence demanded of his position. This Court, however, has repeatedly stressed that the right of an employer to dismiss employees on account of loss of trust and confidence must not be exercised arbitrarily and without showing just cause, so as not to render the employee’s constitutional right to security of tenure nugatory. Thus, although the dropping of a criminal charge for an employee’s alleged misconduct does not bar his dismissal, and proof beyond reasonable doubt is not necessary to justify the same, still the basis thereof must be clearly and convincingly established. Besides, for loss of confidence to be a valid ground for dismissal, such loss of confidence must arise from particular proven facts. In other words, this ground must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise the dismissal will be rendered illegal. In the case at bar, private respondent was suspended and eventually dismissed for allegedly committing fraudulent acts and unfairly competing with petitioner. To justify its administrative action, petitioner somehow grave credence to the surveillance report implicating private respondent in the illegal manufacture, blending, packing and distribution of petitioner’s products. Petitioner likewise relied on the result of the search on the apartment reportedly leased by private respondent from which alleged counterfeit “Union 76” oil products were seized. Unfortunately, these could not be deemed sufficient basis for petitioner to lose its trust and confidence on private respondent so as to justify the latter’s dismissal. For evidently, the surveillance report is unreliable. As found by the NLRC, the conclusions therein were mere deductions not supported by any substantial corroborating evidence. Public respondent also observed that the petitioner failed to show concrete evidence to controvert the proof presented by private respondent that the packing of genuine “Union 76” oil in small containers was in support of the marketing policy of petitioner. Furthermore, as the Solicitor General points out, petitioner’s agents surprisingly did not submit to laboratory test the alleged fake merchandise seized during the search, to determine its genuineness. This deficiency could be attributed to the misstep of the private detectives who were specifically instructed to investigate precisely the reported counterfeiting of petitioner’s products. Another virtual confirmation that petitioner lacks factual basis for its distrust of private respondent was the subsequent judicial order releasing the articles seized during the search. As it appears on record, the court believed the explanation of Donato Reyes, brother of private respondent, that he was the lessee of the aforesaid apartment. In sum, we hold that public respondent did not gravely abuse its discretion in ruling that petitioner failed to duly prove that the dismissal of private

respondent was justified on account of loss of trust and confidence. Hence, private respondent’s dismissal was found illegal. With the finding that private respondent was illegally dismissed, an award of backwages is proper. It must be emphasized, though, that jurisprudence distinguishes between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement. Considering that private respondent was terminated from the service on February 23, 1983, he is entitled to backwages up to three years only, computed on the basis of his last monthly salary or pay. In addition to backwages, illegally dismissed employees are entitled to either reinstatement, if feasible, or separation pay, if reinstatement is no longer viable. Petition is DENIED for lack of merit. Central Pangasinan Electric Cooperative c. Macaraeg | GR 145800 | Jan. 22, 2003 F: Petitioner is an electric cooperative duly organized and existing under Philippine laws. Respondent Geronima Macaraeg and Maribeth de Vera are employees of petitioner at its office in Area V, Bayambang, Pangasinan. Respondent de Vera was employed as teller whose primary duty was to accept payments from petitioner’s consumers in Bayambang and remit her collections to the cashier, herein co-respondent Geronima Macaraeg. Respondent Macaraeg’s duty was to deposit the daily collections of the office to petitioner’s account at the Rural Bank of Central Pangasinan in Bayambang. From January 1998 to January 1999, respondent de Vera accommodated and encashed the crossed checks of her sister, Evelyn Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks amounting to P6, 945,128.95 payable to petitioner cooperative despite the absence of any transaction or any outstanding obligation with petitioner. In turn, respondent de Vera, with the knowledge and consent of respondent Macaraeg, paid the full value of these checks from the cash collections of petitioner. At the end of the day, respondents credited the checks as part of their collection and deposited the same together with their cash collection to the account of petitioner at the Rural Bank of Central Pangasinan. Sometime in January 1999, petitioner, through its Finance Department, noticed that several checks payable to petitioner from the collections in the Area V office were returned due to insufficiency of funds. On January 19, 1999, Josefina Mandapat, Sandra Frias and Marites Radac, petitioner’s Finance Manager, Chief Accountant and Legal Assistant, respectively, confronted respondents with their discovery. Respondent de Vera

admitted that the checks were issued by her sister and that she encashed them from the money collected from petitioner’s customers. On January 21, 1999, Mrs. Josefina Mandapat submitted a memorandum to petitioner’s General Manager, Salvador M. de Guzman, detailing their findings about the bounced checks. On February 2, 1999, she submitted an addendum to her memorandum. On February 4, 1999, petitioner, through de Guzman, issued a memorandum to respondents placing them under preventive suspension and requiring them to explain in writing within forty-eight (48) hours why they misappropriated cooperative funds. In the same communication, a hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of petitioner before Atty. Teodoro Fernandez. In their respective Answers/Explanations, respondents denied having misappropriated the funds of petitioner cooperative. They alleged that: (1) the checks that bounced were redeposited with the Rural Bank of Central Pangasinan; (2) the amount representing the face value of the checks had been used by petitioner as of December 15, 1998; (3) there was never any shortage in the cooperative money or funds in their possession; and (4) they never violated any policy of the cooperative and on the contrary, they have been very religious in remitting the funds and money of petitioner. At the scheduled hearing on February 13, 1999, respondents, with assistance of counsel, appeared before Atty. Teodoro Fernandez. Respondent de Vera testified and admitted that she encashed the checks of Evelyn Joy Estrada because the latter is her older sister and that she has a soft spot for her; that Mrs. Estrada owns a sash factory and that she merely wanted to help her sister meet her business obligations; that sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of petitioner, called her attention to one check which bounced thrice; that this check was eventually replaced by her sister with cash; that despite the bouncing of some other checks, all checks were eventually funded and paid to petitioner, hence, petitioner incurred no losses in its collections; that she has worked for petitioner for nineteen (19) years and this is the first time she has been charged administratively by petitioner. Respondent Macaraeg admitted that she knew of the accommodations given by respondent de Vera to her sister; that she allowed her subordinate to do it because respondent de Vera is her kumare, and that she knew that Mrs. Estrada’s checks were sufficiently funded. She worked for petitioner for twenty-two (22) years and has never had an administrative charge. Mrs. Josefina Mandapat, Finance Manager of petitioner, testified as petitioner’s witness. She stated that she prepared a report on the findings of their accountant regarding the encashment of Evelyn Joy Estrada’s checks, and that the encashment of said checks is prohibited under an office memorandum. On March 10, 1999, Atty. Fernandez submitted his findings to the General Manager of petitioner. On March 19, 1999, on the basis of said findings and recommendation, the General Manager issued to respondents separate notices of termination, effective April 9, 1999, for “serious

misconduct, and breach of trust and confidence reposed on them by management.” Respondents, with the help of the President and representative of the Union, Central Pangasinan Electric Cooperative (CENPELCO) Employees’ Association-Tupas Local Chapter No. R01-0012, questioned their dismissal before the National Conciliation and Mediation Board (NCMB). They claimed that their dismissal was without just cause and in violation of the Collective Bargaining Agreement (CBA), which requires that the case should first be brought before a grievance committee. Eventually, the parties agreed to submit the case to a voluntary arbitrator for arbitration. On August 12, 1999, the voluntary arbitrator rendered a decision in favor of respondents. Petitioner appealed to the Court of Appeals via a petition for review. On August 17, 2000, the Court of Appeals rendered a decision dismissing the petition and affirming the decision of the voluntary arbitrator. Hence, the present course of action. I: WON the CA gravely abused its discretion in holding that petitioner illegally terminated the services of herein private respondents. H: The petition is impressed with merit. At the outset, we hold that the first issue raised in the petition pertaining to the alleged violation of the CBA grievance procedure is moot and academic. The parties’ active participation in the voluntary arbitration proceedings, and their failure to insist that the case be remanded to the grievance machinery, shows a clear intention on their part to have the issue of respondents’ illegal dismissal directly resolved by the voluntary arbitrator. We therefore find it unnecessary to rule on the matter in light of their preference to bring the illegal dismissal dispute to voluntary arbitration without passing through the grievance machinery. This leads us to the next issue of whether respondents were validly dismissed. To constitute a valid dismissal from employment, two requisites must be met, namely: (1) it must be for a just or authorized cause, and (2) the employee must be afforded due process. We hold that there exists a valid reason to dismiss both employees. Article 282(c) of the Labor Code allows an employer to dismiss employees for willful breach of trust or loss of confidence. Proof beyond reasonable doubt of their misconduct is not required, it being sufficient that there is some basis for the same or that the employer has reasonable ground to believe that they are responsible for the misconduct and their participation therein rendered them unworthy of the trust and confidence demanded of their position. To be sure, the acts of the respondents were clearly inimical to the financial interest of the petitioner. During the investigation, they admitted accommodating Evelyn Joy Estrada by encashing her checks from its funds. They did so without petitioner’s knowledge, much less its permission. These inimical acts lasted for more than a year, and probably would have continued had it not been discovered in time. All along, they

were aware that these acts were prohibited by the Coop Checks Policy. Clearly, there was willful breach of trust on the respondents’ part, as they took advantage of their highly sensitive positions to violate their duties. Moreover, the acts of the respondents caused damage to the petitioner. During those times the checks were illegally encashed, petitioner was not able to fully utilize the collections, primarily in servicing its debts. In her memorandum dated January 21, 1999, Finance Manager Josefina Mandapat reported how petitioner is prejudiced. It is not material that they did not “misappropriate any amount of money, nor incur any shortage relative to the funds in their possession.” The basic premise for dismissal on the ground of loss of confidence is that the employees concerned hold positions of trust. The betrayal of this trust is the essence of the offence for which an employee is penalized. In the case at bar, the respondents held positions of utmost trust and confidence. As teller and cashier, respectively, they are expected to possess a high degree of fidelity. They are entrusted with a considerable amount of cash. Respondent de Vera accepted payments from petitioner’s consumers while respondent Macaraeg received remittances for deposit at petitioner’s bank. They did not live up to their duties and obligations. Nor is there any doubt that petitioner observed procedural due process in dismissing the respondents. In separate memoranda dated February 4, 1999 and signed by the General Manager ( de Guzman), the respondents were both appraised of the particular acts or omissions constituting the charges against them. They gave their own “answer/explanation” to the charges. They participated in the investigation conducted at petitioner’s board room. We are aware that the respondents Macaraeg and de Vera have been employed with the petitioner for 22 and 19 years of continuous service, respectively, and this is the first time that either of them has been administratively charged. Nonetheless, it is our considered view that their dismissal is justified considering the breach of trust they have committed. Well to emphasize, the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company. Considering that they have mishandled the funds of the cooperative and the danger they have posed to its members, their reinstatement is neither sound in reason nor just in principle. It is irreconcilable with trust and confidence that has been irretrievably lost. The petition is GRANTED. Mcleod v. NLRC, 512 SCRA 222 F: John F. McLeod filed a complaint for retirement benefits, vacation and sick leave benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary and 13th month pay, moral and exemplary damages, attorney’s fees plus interest against Filipinas Synthetic Corporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric Hu. He alleges that at the time of his retirement complainant was receiving P60, 000.00 monthly with vacation and sick leave benefits; 13th month pay, holiday pay and two round trip business

class tickets on a Manila-London-Manila itinerary every three years which is convertible to cash if unused. Respondents accordingly failed to pay vacation and leave credits and requested complainant to wait as it was short of funds but the same remain unpaid at present. Respondents likewise failed to pay complainant’s holiday pay up to the present. There were more benefits which were not honored. The Labor Arbiter, held all respondents jointly and severally liable for the money claims of Mcleod. However, the NLRC reversed and made Peggy Mills as the sole entity liable for the retirement pay of Mcleod. This was affirmed by the CA. I: WON an employer-employee relationship exists between the private respondents and the petitioner for purposes of determining employer liability to the petitioner. H: No employer-employee relationship, McLeod was a managerial employee of PMI from 20 June 1980 to 31 December 1992. McLeod could have presented evidence to support his allegation of employer-employee relationship between him and any of Filsyn, SRTI, and FETMI, but he did not. Appointment letters or employment contracts, payrolls, organization charts, SSS registration, personnel list, as well as testimony of coemployees, may serve as evidence of employee status. It is a basic rule in evidence that parties must prove their affirmative allegations. While technical rules are not strictly followed in the NLRC, this does not mean that the rules on proving allegations are entirely ignored. Bare allegations are not enough. They must be supported by substantial evidence at the very least. McLeod’s reliance on Annex M can hardly carry the day for him. Annex M, which is McLeod’s letter addressed to "Philip Lim, VP Administration," merely contains McLeod’s proposals for the grant of some benefits to supervisory and confidential employees. Contrary to McLeod’s allegation, Patricio did not sign the letter. Hence, the letter does not embody any agreement between McLeod and the management that would entitle McLeod to his money claims. Neither can McLeod’s assertions find support in Annex U. Annex U is the Agreement which McLeod and Universal Textile Mills, Inc. executed in 1959. The Agreement merely contains the renewal of the service agreement which the parties signed in 1956. John Hancock Life Insurance Corp. v. Davis | GR 169549 | Sept. 3, 2008 F: Respondent Joanna Cantre Davis was agency administration officer of petitioner John Hancock Life Insurance Corporation. On October 18, 2000, Patricia Yuseco, petitioner's corporate affairs manager, discovered that her wallet was missing. She immediately reported the loss of her credit cards to AIG and BPI Express. To her surprise, she was informed that "Patricia Yuseco" had just made substantial purchases using her credit cards in various stores in the City of Manila. She was also told that a proposed

transaction in Abenson's-Robinsons Place was disapproved because "she" gave the wrong information upon verification. Because loss of personal property among its employees had become rampant in its office, petitioner sought the assistance of the National Bureau of Investigation (NBI). The NBI, in the course of its investigation, obtained a security video from Abenson's showing the person who used Yuseco's credit cards. Yuseco and other witnesses positively identified the person in the video as respondent. Consequently, the NBI and Yuseco filed a complaint for qualified theft against respondent in the office of the Manila city prosecutor. But because the affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified, the city prosecutor dismissed the complaint due to insufficiency of evidence. Meanwhile, petitioner placed respondent under preventive suspension and instructed her to cooperate with its ongoing investigation. Instead of doing so, however, respondent filed a complaint for illegal dismissal alleging that petitioner terminated her employment without cause. The labor arbiter, in a decision dated May 21, 2002, found that respondent committed serious misconduct (she was the principal suspect for qualified theft committed inside petitioner's office during work hours). There was a valid cause for her dismissal. Thus, the complaint was dismissed for lack of merit. Respondent appealed the labor arbiter's decision to the National Labor Relations Commission (NLRC) which affirmed the assailed decision on July 31, 2003. Respondent moved for reconsideration but it was denied in a resolution dated October 30, 2003. Aggrieved, respondent filed a petition for certiorari in the Court of Appeals (CA) claiming that the NLRC committed grave abuse of discretion in affirming the decision of the labor arbiter. She claimed there was no valid cause for her termination because the city prosecutor of Manila "did not find probable cause for qualified theft against her." The dismissal of the complaint proved that the charges against her were based on suspicion. The CA, in its July 4, 2005 decision found that the labor arbiter and NLRC merely adopted the findings of the NBI regarding respondent's culpability. Because the affidavits of the witnesses were not verified, they did not constitute substantial evidence. The labor arbiter and NLRC should have assessed evidence independently as "unsubstantiated suspicions, accusations and conclusions of employers (did) not provide legal justification for dismissing an employee." Thus, the CA granted the petition. Petitioner moved for reconsideration but it was denied. Hence, this petition. I: WON petitioner substantially proved the presence of valid cause for respondent's termination.

H: We grant the petition. Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment." In this case, petitioner dismissed respondent based on the NBI's finding that the latter stole and used Yuseco's credit cards. But since the theft was not committed against petitioner itself but against one of its employees, respondent's misconduct was not work-related and therefore, she could not be dismissed for serious misconduct. Nonetheless, 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. For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of the employee. 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. Did petitioner substantially prove the existence of valid cause for respondent's separation? Yes. The labor arbiter and the NLRC relied not only on the affidavits of the NBI's witnesses but also on that of respondent. They likewise considered petitioner's own investigative findings. Clearly, they did not merely adopt the findings of the NBI but independently assessed evidence presented by the parties. Their conclusion (that there was valid cause for respondent's separation from employment) was therefore supported by substantial evidence. All things considered, petitioner validly dismissed respondent for cause analogous to serious misconduct. Petition is hereby GRANTED. Security and Credit Investigation v. NLRC, 350 SCRA 357 F: Private respondents Mercado, Somosot and Oliver were employed as security guards by petitioner and assigned to the CHR which was petitioner’s client. Sometime in February 1990, about eighteen (18) of petitioner’s security guards detailed at the CHR, including Mercado, Somosot and Oliver, filed a complaint for money claims against petitioner. However, upon petitioner’s request that the security guards withdraw the complaint, each of the complainants, except for Mercado, Somosot and Oliver, signed a Release and Quitclaim in favor of petitioner. Mercado averred that he was being pressured by petitioner to sign a Release and Quitclaim, so he went on leave from work on March 22, 1990. When he called petitioner’s office on the afternoon of the same day to inquire about his work assignment, petitioner’s officer-in-charge, Rogelio Vecido, informed him that he was not assigned anywhere because he was suspended from work.

Somosot likewise claimed that on March 22, 1990, Mr. Igmedio Tomenio, petitioner’s shift-in-charge at the CHR, tried to pressure him to sign a Release and Quitclaim but he refused. That afternoon, Somosot learned that he had been suspended from work. When he attempted to report for work the next day, he was informed verbally that his employment was already terminated. The next day, March 23, 1990, Mercado and Somosot filed a complaint for illegal dismissal and underpayment of wages, overtime pay, legal holiday pay, premium pay for holiday and rest day, 13th month pay, service incentive leave benefits and night differential against petitioner. The case was docketed as NLRC-NCR Case No. 00-03-01791-90. Like Mercado and Somosot, respondent Oliver asseverated that on March 27, 1990 he went to petitioner’s office to reiterate his money claims and was forced by Mr. Reynaldo Dino, petitioner’s operations manager, to sign a Release and Quitclaim. Because of his refusal to sign the same, he was not given any new assignment by petitioner. He was thus surprised to receive on March 29, 1990 a telegram from petitioner requiring him to explain his absence from work without leave from March 27, 1990. Subsequently, Oliver filed a complaint for illegal dismissal and underpayment of backwages against petitioner, which case was docketed as NLRC-NCR Case No. 00-03-01886-90. Upon motion of petitioner, the two cases were consolidated. Petitioner, on the other hand, denied that it dismissed Mercado, Somosot and Oliver and alleged that the latter abandoned their employment. Meanwhile, on February 18, 1991, petitioner filed a third-party complaint against the CHR, claiming that its failure to effect the increase in the minimum wage of respondent security guards from July 1, 1989 to March 31, 1990, was due to the failure of the CHR to promptly pay the increases in the wage rates of said guards pursuant to Section 6 of Republic Act No. 6727 (R.A. 6727). The CHR approved payment of increased wage rates only from April 16, 1990. Petitioner claimed that under R.A. 6727, the CHR was mandated to pay increased wages to the security guards commencing from July 1, 1989. The CHR denied that it was obliged to pay the increase in the wage rates of the respondent guards. It averred that R.A. 6727 is not applicable to it, because it had already been paying the respondent security guards more than P100.00 a day even before the effectivity of said law. Its decision to increase the salaries of respondent guards effective August 16, 1990 was due only to humanitarian reasons. In his Decision dated November 18, 1991 the Labor Arbiter found that there was neither dismissal by petitioner of the respondent security guards nor abandonment of employment by the latter, and that the controversy resulted from miscommunication and misapprehension of facts by the parties. The Labor Arbiter, however, ruled that there was underpayment of respondent guards’ salaries, holiday pay, premium pay for holidays and rest days, overtime pay, 13th month pay and service incentive leave benefits.

All parties filed their respective appeals with the National Labor Relations Commission. In their partial appeal, respondents Mercado and Somosot argued that the Labor Arbiter erred in not finding that they were illegally dismissed and in not awarding backwages in their favor. Petitioner, on the other hand, claimed that the Labor Arbiter erred in not finding that respondent security guards abandoned their employment, and that it is the CHR which should be held liable for the monetary award given to respondent security guards. The CHR for its part contended that the Labor Arbiter erred in not finding that R.A. 6727 does not apply to it, and in failing to appreciate the CHR’s Letter dated April 16, 1990 which stated that it was increasing the wage rates of the security guards beginning April 16, 1990. I: WON NLRC committed grave abuse of discretion amounting to lack of jurisdiction when it ruled that private respondents did not abandon their posts H: The Court finds that the NLRC committed no grave abuse of discretion in affirming the finding that petitioner did not dismiss respondent security guards, and that the latter did not abandon their employment. Both the NLRC and the Labor Arbiter found no clear proof that petitioner had in fact dismissed respondent security guards. Mercado based his claim of illegal dismissal only on the statement of officer-in-charge Mr. Vecido that he had not been assigned to any post. Similarly, Somosot relied merely on the verbal information relayed to him that he had been terminated. Oliver’s belief that he had been illegally dismissed was founded on the telegram from petitioner requiring him to explain his absence without leave which he received on March 29, 1990. None of them exerted efforts to confirm from petitioner’s office whether they had in fact been dismissed. Furthermore, petitioner denied the allegation that it terminated respondent security guards’ employment without just cause and even alleged that respondent guards abandoned their employment. Thus, absent any showing of an overt or positive act proving that petitioner had dismissed Mercado, Somosot and Oliver, their claim of illegal dismissal cannot be sustained. There being no finding that respondent security guards were illegally dismissed, there is no basis for an award of backwages in their favor. It is axiomatic that before backwages may be granted, there must be unjust or illegal dismissal from work. Neither did the NLRC find evidence to support petitioner’s allegation that Mercado, Somosot and Oliver abandoned their employment. The records reveal that their failure to report for duty was not caused by a willful and deliberate intent to abandon their employment. Rather, such failure resulted from their belief, though mistaken, that they had been suspended or terminated from work. The rule is that for abandonment to exist, two

elements must concur: first, the employee must have failed to report for work or must have been absent without justifiable reason; and second, there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The filing by Mercado, Somosot and Oliver of their complaints for illegal dismissal negates the existence of any intention on their part to abandon their employment. On the other hand, there is merit in petitioner’s argument that there was an error in the computation of the amounts constituting underpayment of overtime pay, 13th month pay and service incentive leave benefits to respondent security guards by the Labor Arbiter, which in turn was affirmed by the NLRC. However, in computing the underpayment for overtime, 13th month and service incentive leave benefits, the Labor Arbiter erroneously included the period from September 1, 1988 to June 30, 1989 in spite of his finding that there was no underpayment in wages during said period. The Court also finds merit in petitioner’s argument that the NLRC should not have reversed the Labor Arbiter’s finding that the CHR is liable for the payment of P28,500.00 representing the differentials of respondent security guards’ wage, overtime, 13th month and service incentive leave benefits for the period July 1, 1989 to April 15, 1990. The record shows that petitioner informed the CHR regarding the increase in the wages of the security guards effective July 1, 1989, pursuant to R.A. 6727 which mandated a Twenty Five Peso (P25.00) increase in the daily wage rate in a Letter dated August 7, 1989. In its reply letter dated April 16, 1990, the CHR stated that it had approved the increase in the wages effective April 16, 1990. The CHR, however, maintains that it is not liable to pay increased wages to the security guards and claims that there is a proviso in Section 4 of R.A. 6727 which exempts employees already receiving more than P100.00 daily from receiving the P25.00 increase required under said law. The CHR argues that since the security guards were receiving P103.56 daily for the year 1989, it was not required to pay them the P25.00 per day increase under R.A. 6727. The CHR further asserts that its approved increase in the security guards’ wages from April 16, 1990 was due only to humanitarian reasons and was not an admission of any obligation to increase the same under R.A. 6727. It must be noted that both the Labor Arbiter and the NLRC found that there were discrepancies in the minimum wage prescribed under R.A. 6727 and what were actually received by respondent security guards from July 1, 1989. The rule is that the factual findings of the Labor Arbiter, when affirmed by the NLRC are accorded to great weight and respect when supported by substantial evidence, and devoid of any unfairness and arbitrariness. It is clear that the CHR is the party liable for payment of the wage increase due to respondent security guards. While petitioner, as the contractor, is held solidarily liable for the payment of wages, including wage increases,

as prescribed under the Labor Code, the obligation ultimately belongs to the CHR as principal. The Labor Arbiter was therefore correct in requiring the CHR to reimburse petitioner the amount of P28, 500.00 representing the unpaid wage increases of respondent security guards for the period July 1, 1989 to April 15, 1990. The assailed decision of the affirmed with the MODIFICATION CALS Poultry Supply v. Roco, 385 SCRA 479 F: CALS Poultry Supply Corporation is engaged in the business of selling dressed chicken and other related products and managed by Danilo Yap. On March 15, 1984, CALS hired Alfredo Roco as its driver. On the same date, CALS hired Edna Roco, Alfredo’s sister, as a helper in the dressing room of CALS. On May 16, 1995, it hired Candelaria Roco, another sister, as helper, also at its chicken dressing plant on a probationary basis. On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint for illegal dismissal against CALS and Danilo Yap alleging that Alfredo and Candelaria were illegally dismissed on January 20, 1996 and November 5, 1996, respectively. Both also claimed that they were underpaid of their wages. Edna Roco, likewise, filed a complaint for illegal dismissal, alleging that on June 26, 1996, she was reassigned to the task of washing dirty sacks and for this reason, in addition to her being transferred from night shift to day time duties, which she considered as management act of harassment, she did not report for work. According to Alfredo Roco, he was dismissed on January 20, 1996 when he refused to accept P30,000.00 being offered to him by CALS’ lawyer, Atty. Myra Cristela A. Yngcong, in exchange for his executing a letter of voluntary resignation. On the part of Candelaria Roco, she averred that she was terminated without cause from her job as helper after serving more than six (6) months as probationary employee.red The Labor Arbiter on April 16, 1998, issued a decision dismissing the complaints for illegal dismissal for lack of merit. The Labor Arbiter found that Alfredo Roco applied for and was granted a leave of absence for the period from January 4 to 18, 1996. He did not report back for work after the expiration of his leave of absence, prompting CALS, through its Chief Maintenance Officer to send him a letter on March 12, 1996 inquiring if he still had intentions of resuming his work. Alfredo Roco did not respond to the letter despite receipt thereof, thus, Alfredo was not dismissed; it was he who unilaterally severed his relation with his employer. In the case of Candelaria Roco, the Labor Arbiter upheld CALS’ decision not to continue with her probationary employment having been found her unsuited for the work for which her services were engaged. She was hired on May 16, 1995 and her services were terminated on November 15, 1995. Edna Roco, according to the Labor Arbiter, began absenting herself on June 25, 1996. She was sent a memo on July 1, 1996 requiring her to report for work immediately, but she did not respond. In their position papers, the

complainants claimed that they were not given their overtime pay, premium pay for holidays, premium pay for rest days, 13th month pay, allowances. They were also not given their separation pay after their dismissal. The Labor Arbiter, however, denied their claims, stating that they had not substantiated the same; on the other hand, CALS presented evidence showing that complainants received the correct salaries and related benefits. The National Labor Relations Commission (NLRC), in a decision promulgated on January 17, 2000, affirmed the judgment of the Labor Arbiter. On appeal by Alfredo, Candelaria and Edna Roco to the Court of Appeals, the appellate court set aside the NLRC’s decision and ordered reinstatement of Alfredo and Candelaria Roco to their former positions without loss of seniority of rights and benefits, with full payment of backwages. However, in the case of Edna Roco, the Court of Appeals found that her appeal cannot be favorably considered as she actually abandoned her work without justification. In considering that Alfredo Roco was illegally dismissed, the Court of Appeals relied on his allegation that on January 20, 1996 when he reported for work, following his leave of absence from January 10 to 18, 1996, he learned from Elvie Acantelado, a secretary of Danilo Yap that he was already separated from his employment. I: WON there was illegal dismissal by CALS H: From the facts established, we are of the view that Alfredo Roco has not established convincingly that he was dismissed. No notice of termination was given to him by CALS. There is no proof at all, except his self-serving assertion, that he was prevented from working after the end of his leave of absence on January 18, 1996. In fact, CALS notified him in a letter dated March 12, 1996 to resume his work. Both the Labor Arbiter and the NLRC found that Alfredo, as well as Candelaria Roco, was not dismissed. Their findings of fact are entitled to great weight. With respect to Candelaria Roco, there is no dispute that she was employed on probationary basis. She was hired on May 16, 1995 and her services were terminated on November 15, 1995 due to poor work performance. She did not measure up to the work standards on the dressing of chicken. The Labor Arbiter sustained CALS in terminating her employment. The NLRC affirmed the Labor Arbiter’s ruling. The Court of Appeals did not disagree with the NLRC’s finding that Candelaria was dismissed because she did not qualify as a regular employee in accordance with the reasonable standards made known by the company to her at the time of her employment. CALS argues that the Court of Appeals’ computation of the 6-month probationary period is erroneous as the termination of Candelaria’s

services on November 15, 1995 was exactly on the last day of the 6-month period. We agree with CALS’ contention as upheld by both the Labor Arbiter and the NLRC that Candelaria’s services was terminated within and not beyond the 6-month probationary period. As there is no mention of the basis of the above order, we may assume it was the temporary payroll authority submitted by the petitioner showing that the private respondent was employed on probation on February 16, 1978. Even supposing that it is not self-serving, we find nevertheless that it is self-defeating. The six-month period of probation started from the said date of appointment and so ended on August 17, 1978, but it is not shown that the private respondent’s employment also ended then; on the contrary, he continued working as usual. Under Article 282 of the Labor Code, ‘an employee who is allowed to work after a probationary period shall be considered a regular employee.'’ Hence, Pilones was already on permanent status when he was dismissed on August 21, 1978, or four days after he ceased to be a probationer. WHEREFORE, our Resolution of April 1, 2002 denying the petition is hereby SET ASIDE and another one entered REVERSING the decision of the Court of Appeals insofar as it ruled in favor of herein respondents and the decisions of the Labor Arbiter and the National Labor Relations Commission REINSTATED. Jardine Davies v. NLRC, 225 SCRA 757 Nature: The instant Petition for Certiorari seeks the reversal of the resolution of respondent National Labor Relations Commission, dated 22 July 1992, which declared private respondent Salvador Salutin as not having abandoned his work by his alleged failure to report for work during the pendency of the petitioner's appeal before the respondent Commission. F: Respondent Salvador Salutin ["Salutin"] was employed by petitioner Jardine Davies, Inc. ["JDI"] on 15 July 1985, as a demonstrator/agronomist to provide services relating to, and to give advice on, the promotion and use of JDI's pesticides and other products. The controversy that spawned two [2] special civil actions for certiorari [this instance included] with this Court, began when respondent Salutin filed a complaint against petitioner JDI for illegal dismissal, with prayer for reinstatement and backwages or, in the alternative, separation pay plus wage differential, service incentive leave pay, thirteenth [13th] month pay, holiday pay, moral and exemplary damages, and attorney's fees. The complaint was decided by the Labor Arbiter in favor of respondent Salutin. JDI appealed the case to the National Labor Relations Commission [NLRC], and it posted a supersedeas bond to answer for the monetary awards. It also reinstated Salutin, "on payroll only", beginning 26 August 1991, in compliance with the writ of execution issued by the Labor Arbiter pursuant

to Article 223, paragraph 3, of the Labor Code. In a Decision dated 17 October 1991, NLRC dismissed JDI's appeal for lack of merit but modified the decision by eliminating the awards given for holiday pay, service incentive leave pay, moral and exemplary damages. A motion for reconsideration was filed which was denied in NLRC's resolution of 13 January 1992. On 14 February 1992, JDI filed its first petition for certiorari with this Court, docketed as G. R. No. 103720, assailing the 17 October 1991 decision and the resolution of 13 January 1992 of respondent Commission. In Our Resolution dated 26 February 1992, the petition was dismissed for failure to comply with this Court's Circular No. 28-91 on forum-shopping. Its subsequent motion for reconsideration was itself denied on 20 May 1992. The Resolution of 26 February 1992 became final and executory on 19 June 1992, and an entry of judgment was accordingly made on 20 August 1992. At the time when the above narrated events were still unfolding, some material facts occured beginning with JDI's appeal to the NLRC on the 08 August 1991 decision of the Labor Arbiter. Shortly after the reinstatement of Salutin "on payroll only", JDI sent a letter dated 21 September 1991, to Salutin directing him to report for work to their Bacolod Branch Manager. Salutin, as directed, reported on the 24th of September 1991 at around 9:20 a.m. He did not stay long, however, since after fifteen minutes or so, he left and was reported not to have thereafter returned for work. JDI forthwith stopped further payment of salary to Salutin. On 17 October 1991, JDI filed a "Manisfestation and Motion" with the respondent Commission stating that Salutin be considered as having abandoned his work considering his continuous absence of more than three (3) weeks since he was required to report for work and that any award for reinstatement to his former position, without loss of seniority and other rights, in the Arbiter's decision subject of this appeal be considered and held as waived or lost. Salutin opposed the motion, claiming that he was forced to leave in haste because he was then suffering from a serious ailment. He submitted a medical certificate to support his claim. On 13 January 1992, respondent Commission denied JDI's "Manifestation & Motion" stating, among other things as to the issue of whether the complaint-appellee Salvador Salutin is guilty of work abandonment, this is a new and factual matter which has to be determined and resolved in appropriate proceedings before the Arbitration Branch, more especially in the present case, where the charge of abandonment is seriously controverted. I: Is Salutin, who was then on payroll reinstatement since 26 August 1991, not guilty of abandonment when his failure to report for work was because he was also working for another entity from 01 September 1991 to 31 December 1991? Correlatively, did respondent Commission not gravely abuse its discretion when it did not take into consideration such other employment?

H: The answer is in the negative. The records show that at the time JDI filed its Manifestation and Motion dated 17 October 1991, the sole basis of its prayer for a declaration that Salutin abandoned his work was his alleged unauthorized absences from the date he was notified to report for work. A shift to a new focus took place when, on 30 January 1992, JDI, at its request, received a letter-certification issued by the Officer-in-Charge of King's Enterprises of Iloilo City that Salutin was employed by Monsato Philippines, Inc., from 01 September to 31 December 1991, as Aggressive Crop Technician, for which he was paid P5,146.00 per month. Thus, this was the reason given by JDI in its ex parte motion dated 16 June 1992, to set for hearing the Manifestation and Motion of 17 October 1991. NLRC denied the said ex parte motion in the now assailed resolution of 22 July 1992. When JDI filed its first petition for certiorari [in G. R. No. 103720] with this Court on 14 February 1992, assailing the 17 October 1991 decision of NLRC, it also raised, as an added argument on the alleged abandonment of work by Salutin, the fact that he was gainfully employed elsewhere. Considering that this matter was thus already taken up by the petitioner in its first petition for certiorari, which this Court dismissed with finality, the petitioner should really now be barred from invoking anew that issue in this present [second] petition. Be that as it may, the same fate of dismissal is still inevitable. Although this Court is not a trier of facts, it may still wade through the records of a case if only to prevent any possible misgiving in its ultimate disposition. The petitioner's evidence to establish Salutin's supposed abandonment of work is the certification of employment issued by King's Enterprises at the request of herein petitioner to the effect that Salutin had indeed been employed by Monsato Philippines, Inc., during the period from 01 September to 31 December 1991. For abandonment to constitute a valid cause for termination of employment there must be a deliberate unjustified refusal of the employee to resume his employment. This refusal must be clearly shown. Mere absence is not sufficient; it must be accompanied by overt acts pointing to the fact that the employee simply does not want to work anymore. Abandonment of position is a matter of intention expressed in clearly certain and unequivocal acts. In this instance, however, certain uncontroverted facts show just exactly the opposite. Hence, Salutin did report, as directed, on 24 September 1991, but that he could not stay long because he was ailing at that time; he, although perhaps belatedly made, did seek medical consultation on 7 November 1991, at the Corazon Locsin Montelibano Memorial Regional Hospital, for "peptic ulcer"; and on 11 December 1991, he did, in fact, manifest his desire to assume his work with the petitioner. This Court's Resolution of 26 February 1992, denying the petition in G. R. No. 103720, became final and executory on 19 June 1992. Respondent Salutin's interim employment, stressed by the petitioner, did not stain the picture at all. The petition is hereby dismissed.

GSP Manufacturing Corp. v. Cabanban | GR 150454 | July 14, 2006 F: Respondent Paulina Cabanban worked with petitioner GSP Manufacturing Corporation (GSP) as a sewer from February 7, 1985 until her alleged termination on March 1, 1992. On June 16, 1992, respondent filed with the National Labor Relations Commission (NLRC), National Capital Region Arbitration Branch, a complaint against petitioners for illegal dismissal, non-payment of holiday pay, service incentive leave pay and 13th month pay. Respondent claimed she was terminated by petitioners because she failed to dissuade her daughter from continuing her employment at the Sylvia Santos Company, a business competitor of petitioners. In their defense, petitioners argued that respondent abandoned her work on March 14, 1992 and that they reported this to the Department of Labor and Employment on May 15, 1992. On May 7, 1993, labor arbiter Melquiades Sol D. del Rosario found petitioners guilty of illegal dismissal. Petitioners appealed to the NLRC. On August 10, 1995, the NLRC issued a resolution affirming in toto the decision of the labor arbiter. Hence, this petition. I: WON the findings of fact of the Court of Appeals were arrived at arbitrarily H: The petition is without merit. As petitioners are well aware of, factual findings of the NLRC, particularly when they are in agreement with those of the labor arbiter, are deemed binding and conclusive on this Court. As long as their decisions are devoid of any unfairness or arbitrariness in their evaluation of the evidence all that is left for us to do is stamp our affirmation and declare its finality. Having perused the records, we find no such arbitrariness here. We would like to reiterate some salient points laid down in our prior pronouncements concerning abandonment of employment. Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. The records are bereft of proof that petitioners even furnished respondent such notice. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. The filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment. Clearly, petitioners’ claim that respondent’s complaint was "an afterthought," having been filed a long time after the date of the supposed

abandonment, was utterly without merit. As the Court of Appeals correctly pointed out, citing the case of Pare v. NLRC, respondent had four years within which to institute her action for illegal dismissal. Compared to the six months it took the aggrieved employee in that case to file his complaint for illegal dismissal, respondent’s 84 days was not unreasonably long at all. The petition is hereby DENIED. Shie Jie Corp. v. NFL, GR 153148, July 15, 2005 F: Respondents, in their complaint, alleged that they were employed as fish processors by petitioners. On July 20, 1998, Sammy Yang and Michael Yang, petitioners, confronted them about their union activities. Immediately, they were ordered to go home. The next day, petitioners suspended them for one week effective July 22 to 28, 1998 (except respondent Wilfredo Toribio). Upon their return, they were served with a notice of petitioners’ memorandum terminating their services for abandonment of work. Petitioners, in their answer, denied respondents’ allegations. They claimed that on July 20, 1998, about 2:45 o’clock in the afternoon, 13 rankand-file employees staged a walk-out and abandoned their work. Among them were respondents Wilfredo Toribio, Nida Toribio, Yolanda Lorenzo, Sorraya Amping, Vivian Mendoza, Merylene Delos Reyes, Arnold Francisco, and Manuel Francisco. As a consequence, petitioners’ business operations were interrupted and paralyzed, prompting them to issue a memorandum suspending respondents for one week or from July 22 to 28, 1998. However, on July 24, 1998, petitioners, in another memorandum, directed them to report for work on July 27, 1998. Instead, respondents Ernesto Etrata, Sorraya Amping, Yasher Taning, Yolanda Lorenzo, Merylene Delos Reyes, and Wilfredo Toribio submitted their resignation letters and quitclaims. Subsequently or on July 28, 1998, petitioners sent respondents Arnold Francisco, Nida Toribio, Vivian Mendoza, and Manuel Francisco a notice terminating their services for abandonment of work. On August 20, 1999, the Labor Arbiter rendered a Decision finding respondents guilty of unfair labor practice (for dismissing petitioners illegally); and ordering them, jointly and severally, to pay petitioners P843, 960.62. On appeal, the National Labor Relations Commission (NLRC) promulgated its Decision dated April 27, 2000 reversing the Labor Arbiter’s Decision and dismissing respondents’ complaint. Respondents then filed a motion for reconsideration but were denied by the NLRC in a Resolution dated June 29, 2000. Hence, they filed with the Court of Appeals a petition for certiorari. On November 29, 2001, the Appellate Court rendered a Decision reversing and setting aside the NLRC’s Decision and reinstating the Labor Arbiter’s Decision. On December 21, 2001, petitioners filed a motion for reconsideration, but were denied by the Appellate Court in a Resolution dated April 9, 2002.

I: WON the CA erred in holding that petitioners failed to prove by substantial evidence that respondents voluntarily resigned and/or abandoned their work. H: Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment. Acceptance of a resignation tendered by an employee is necessary to make the resignation effective. No such acceptance, however, was shown in the instant case. Moreover, the fact that respondents immediately filed a complaint for illegal dismissal against petitioners and repudiated their alleged resignation completely negated petitioners’ claim that they voluntarily resigned. In Molave Tours Corporation vs. National Labor Relations Commission, it was held: “By vigorously pursuing the litigation of his action against petitioner, private respondent clearly manifested that he has no intention of relinquishing his employment, which act is wholly incompatible to petitioner’s assertion that he voluntarily resigned.” Neither do we find any indication that respondents have shown by some overt acts their intention to sever their employment in petitioner company. In this case, respondents did not report back for work on July 27, 1998 because they were suspended by petitioners for one week effective July 22 to 28, 1998. Verily, their absence cannot be considered abandonment of work, a just cause for termination of employment. In fine, considering that respondents did not abandon their work, their dismissal from the service is illegal. The petition is DENIED. MANUEL C. FELIX, petitioner, vs. ENERTECH SYSTEMS INDUSTRIES, INC. and COURT OF APPEALS, respondents. | G.R. No. 142007. March 28, 2001

F: Enertech System Industries, Incorporated is engaged in the manufacture of boilers and tanks. Petitioner Manuel C. Felix worked as a welder/fabricator in respondent company. On August 5, 1994, petitioner and three other employees, namely, Dante Tunglapan, Hilario Lamog, and Emerson Yanos, were assigned to install a smokestack at the Big J Feedmills in Sta. Monica, Bulacan. During the entire period they were working at the Big J Feedmills, petitioner and his companions accomplished daily time records (DTRs). Petitioner wrote in his DTR that he had worked eight hours a day on the basis of which his wages were computed. The work was estimated to be completed within seven days, but it actually took the workers until August 17, 1994, or about two weeks, before it was

finished. On that day, petitioner and his three co-employees were each given notice by respondent.

showing that petitioner did not really work eight hours a day, as he had stated in his time cards

Reynaldo Tapiru, petitioner’s co-employee and neighbor in Sitio Kabanatuan, Valenzuela, also stated in an affidavit that he had seen petitioner either in his house or within their compound on August 6, 7, 8, and 14, 1994, between 3 and 4 o’clock in the afternoon, when he was supposed to be working at the Big J Feedmills in Bulacan at that time.

Indeed, the validity of petitioner’s dismissal is a factual question. It is not for the reviewing court to weigh the conflicting evidence, determine the credibility of witnesses, or otherwise substitute its own judgment for that of the administrative agency. Well-settled is the rule that the findings of fact of quasi-judicial agencies, like the NLRC, are accorded not only respect but at times even finality if such findings are supported by substantial evidence.This is especially so in this case, in which the findings of the NLRC were affirmed by the Court of Appeals. The findings of fact made therein can only be set aside upon a showing of grave abuse of discretion, fraud, or error of law. There is no such showing of grave abuse of discretion in this case. Falsification of time cards constitutes serious misconduct and dishonesty or fraud, which are just causes for the termination of employment under Art. 282(a) and (c) of the Labor Code which provides:

On September 9, 1994, respondent required petitioner to report to the company lawyer on September 13, 1994 for investigation. Then, on October 17, 1994, it issued a memorandum placing petitioner under preventive suspension for 30 days. Finally, on November 21, 1994, respondent sent petitioner a memorandum terminating his employment. Respondent appealed to the NLRC. Pending appeal, a writ of execution was issued on September 23, 1997 directing respondent to reinstate petitioner either physically or in the payroll.

NLRC rendered a decision reversing the labor arbiter’s decision and dismissing petitioner’s complaint for illegal dismissal for lack of merit. The NLRC found sufficient evidence to prove that petitioner put in less than the required eight hours daily work during his detail at the Big J Feedmills and, therefore, held that his dismissal was in accordance with the Company Code of Discipline and the Labor Code. Petitioner filed a motion for reconsideration, but the same was denied. CA affirmed.

ISSUE and RULING: First. Petitioner prays that the CA reinstate the labor arbiter’s decision finding Respondent Corporation guilty of illegal dismissal. The labor arbiter held as doubtful the statement of Johnny Legaspi and petitioner’s two co-employees to the effect that petitioner and his co-workers put in only four hours; that the statements of Legaspi and Yanos were inaccurate as there was no timekeeper at the job site to monitor the arrivals and departures of employees; and that the delay in the completion of the project could be due to an erroneous estimate on duration of work, lack of materials, or lack of work coordination.

No merit. CA, taking into account the findings of the NLRC, the interview with Johnny Legaspi and his engineer, and the affidavits of Yanos and Tapiru, correctly concluded that there was substantial evidence presented

ART. 282. Termination by employer.  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;. .(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; Second. Petitioner contends that the omnibus motion filed by respondent on October 10, 1997 during the pendency of the appeal is an admission that it is liable for reinstatement or, in lieu thereof, for separation pay. No such inference can be derived from a reading of the omnibus motion filed by respondent. To the contrary, respondent in fact vehemently opposed the implementation of the writ of execution issued by the labor arbiter.20 Thus, respondent said: 2. That reinstatement can no longer be made or is no longer possible considering the nature of the offense or violation (although an issue under appeal) which the complainant committed. This offense or violation has caused serious and severe strained relationship between the complainant and the respondent employer; 3. That it must be recalled, and as the records of the case will confirm, complainant committed a virtual criminal act of falsifying his daily time records based on which he collected his salary. Due to the seriousness of this offense, there is no way by which respondent employer can trust complainant again and place the future and welfare of the company to shenanigans who try to defraud it.

Respondent appears merely to have been mistaken about the options open to it upon promulgation of the labor arbiter’s decision. As to the question of whether separation pay in lieu of his reinstatement may be awarded to petitioner, it is settled that such can be done only upon finality of judgment, that is, when the judgment is no longer appealable, hence final and executory, and where reinstatement can no longer be effected, as when the position previously held by the employee no longer exists or when strained relations result in the loss of trust and confidence. If at all, therefore, respondent should have reinstated petitioner in the payroll, instead of offering him separation pay. Be that as it may, the omnibus motion filed by respondent cannot be construed as an admission of its liability for reinstatement.

Third. Anent petitioner’s claim that he is entitled to backwages from the time the labor arbiter rendered a decision in his favor until said decision was reversed by the NLRC, this issue should have been raised earlier in the Court of Appeals and not only now in the present petition. Hence, this matter cannot be considered by the Court. AFFIRMED for lack of showing that it committed a reversible error.

JOSE S. SANTOS, JR., Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, HAGONOY INSTITUTE INC., ITS DIRECTRESS, MARTA B. ZUNIGA and PRINCIPAL B. BANAG, Respondent. G.R. No. 115795. March 6, 1998

FACTS: Petitioner, a married man, was employed as a teacher by the private respondent Hagonoy Institute Inc. from June 1980 until his dismissal on June 1, 1991. Likewise working as a teacher for the private respondent was Mrs. Arlene T. Martin, also married. In the course of their employment, the couple fell in love. Thereafter, rumors regarding the couples relationship spread, especially among the faculty members and school officials. Concerned about the rumors, private respondent advised Mrs. Martin to take a leave of absence which she ignored, as she continued to report for work. Consequently, on November 9, 1990, she was barred from reporting for work and was not allowed to enter the private respondents premises, effectively dismissing her from her employment. In view of her termination from the service, Mrs. Martin filed a case for illegal dismissal before the NLRC Regional Arbitration Branch No. III, San Fernando, Pampanga2 against the private respondent. After the parties had submitted their respective evidence and position paper, Labor Arbiter

Ariel Santos rendered a decision dismissing the complaint. NLRC reversed LA.

The reversal was anchored on the failure by the private respondent, in dismissing Mrs. Martin, to accord her the necessary procedural due process. Private respondent set up a committee to investigate the veracity of the rumors. After two weeks of inquiry, the committee rendered its report confirming the illicit relationship between the petitioner and Mrs. Martin.

In view of the committees finding, on December 19, 1990, petitioner was charged administratively for immorality and was required to present his side on the controversy. Five months later or in May 1991, petitioner was informed by the private respondents Board of Directors of his dismissal effective June 1, 1991.6 Unable to accept such verdict, petitioner filed a complaint for illegal dismissal on August 12, 1991 before the NLRC Regional Arbitration Branch No. III, San Fernando, Pampanga. After a full blown trial was conducted, Labor Arbiter Quintin C. Mendoza rendered a decision dated January 12, 1993, dismissing petitioners’ complaint but at the same time awarding monetary sums as financial assistance.

ISSUE: WON petitioner should be dismissed.

RULING: We have consistently held that in order to constitute a valid dismissal, two requisites must concur: (a) the dismissal must be for any of the causes expressed in Art. 282 of the Labor Code, and (b) the employee must be accorded due process, basic of which are the opportunity to be heard and defend himself.9 Private respondent, in justifying the termination of the petitioner, contends that being a teacher, he must live up to the high moral standards required of his position. In other words, it asserts that its purpose in dismissing the petitioner was to preserve the respect of the community towards the teachers and to strengthen the educational system.11 On the other hand, petitioner merely argues that the alleged illicit relationship was not substantially proven by convincing evidence by the private respondent as to justify his dismissal. On the outset, it must be stressed that to constitute immorality, the circumstances of each particular case must be holistically considered and evaluated in light of the prevailing norms of conduct and applicable laws.12 American jurisprudence has defined immorality as a course of

conduct which offends the morals of the community and is a bad example to the youth whose ideals a teacher is supposed to foster and to elevate,13 the same including sexual misconduct. Thus, in petitioners case, the gravity and seriousness of the charges against him stem from his being a married man and at the same time a teacher.

We cannot overemphasize that having an extra-marital affair is an afront to the sanctity of marriage, which is a basic institution of society. Even our Family Code provides that husband and wife must live together, observe mutual love, respect and fidelity. This is rooted in the fact that both our Constitution and our laws cherish the validity of marriage and unity of the family. Our laws, in implementing this constitutional edict on marriage and the family underscore their permanence, inviolability and solidarity. As a teacher, petitioner serves as an example to his pupils, especially during their formative years and stands in loco parentis to them. To stress their importance in our society, teachers are given substitute and special parental authority under our laws.

Consequently, it is but stating the obvious to assert that teachers must adhere to the exacting standards of morality and decency. There is no dichotomy of morality. A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and willingly accept restrictions on his conduct that might be viewed irksome by ordinary citizens. In other words, the personal behavior of teachers, in and outside the classroom, must be beyond reproach. It seems obvious that when a teacher engages in extra-marital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment.

Having concluded that immorality is a just cause for dismissing petitioner, it is imperative that the private respondent prove the same. Since the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause, the same must be supported by substantial evidence.

Undoubtedly, the question of immorality by the petitioner is factual in nature. Thus, we reiterate the well-settled rule that factual findings by the NLRC, particularly when it coincides with those by the Labor Arbiter, are accorded respect, even finality, and will not be disturbed for as long as such findings are supported by substantial evidence. A scrutiny of the records of the instant petition leads us to concur with the NLRCs finding that petitioner indeed entered into an illicit relationship with his coteacher. This fact was attested to by the testimonies of nine witnesses (a

fourth year student, a security guard, a janitor and six co-teachers) which petitioner failed to rebut.

We hold henceforth separation pay shall be as a measure of social justice only in these instances where the employee is validly dismissed for cause other than serious misconduct or those reflecting 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 relationship 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. DISMISSED.

RUFINO NORBERTO F. SAMSON vs. NLRC [G.R. No. 121035. April 12, 2000] FACTS: This pertains to the case (NCR-00-01-00652-94) filed by the complainant Rufino Norberto F. Samson against the respondents Schering – Plough Corp. (‘SPC’ for brevity) and Mr. Leo C. Riconalla, National Sales Manager, for money equivalent of rice subsidy for the period April 1990 to December 1992 and holiday pay, now deemed submitted for resolution based on records available.

On February 1, 1994, said complainant filed another case (NCR-00-0200887-94) for illegal preventive suspension raffled to the Honorable Labor Arbiter Donato G. Quinto, Jr. and consolidated to the above case number. Likewise, on February 4, 1994, complainant filed a Motion to Amend Complaint and averred pertinently that ‘x x x complainant was placed under an indefinite preventive suspension on 25 January 1994’; and ‘x x x was arbitrarily and summarily terminated from employment on 03 February 1994 on ground of loss of confidence.

In a letter dated 25 January 1994 (Annex ‘A’) addressed to the complainant Mr. Samson signed by one J.L. Estingor, the latter called the attention of (sic) the complainant’s conduct ‘x x x in a manner inimical to the interests of SPC’ (made utterances of obscene, insulting, and offensive words, referring to or directed against SPC’s Management Committee, in the presence of several co-employees, threats to some co-employees, advising them to watch out for some disruptive actions to happen during the National Sales Conference.)

Complainant was given two (2) days from receipt of the foregoing letter and to explain ‘x x x why no disciplinary action, including termination’, should be taken against the complainant and in the meantime was placed on preventive suspension effective immediately, until further notice.

On the basis of the pleadings filed by the parties and evidence on record, the labor arbiter rendered his Decision, dated 25 August 1994, declaring the dismissal of petitioner illegal. The labor arbiter ruled that petitioner’s conduct is not so serious as to warrant his dismissal because: 1) the alleged offensive words were uttered during an informal and unofficial gettogether of employees where there was social drinking and petitioner was already tipsy; 2) the words were uttered to show disapproval over management’s decision on the "Cua Lim" case; 3) the penalty for the offense is only "verbal reminder" under respondent company’s rules and regulations; and 4) petitioner was already admonished during a meeting on 4 January 1994. Accordingly, respondent company was ordered to reinstate petitioner as District Sales Manager and to pay him backwages.

Both parties appealed said decision to the NLRC. Petitioner filed a partial appeal of the denial of his claim for holiday pay and the cash equivalent of the rice subsidy. For its part, respondent company sought the reversal of the decision of the labor arbiter alleging that the latter erred in ruling that petitioner’s employment was terminated without valid cause and in ordering his reinstatement. In reversing the labor arbiter’s decision, the NLRC found that there was just cause, i.e., gross misconduct, for petitioner’s dismissal.

ISSUE: WON petitioner is validly dismissed

RULING: Factual findings of the NLRC are accorded respect. In this case, however, there is compelling reason to deviate from this salutary principle because the findings of facts of the NLRC are in conflict with that of the labor arbiter. Accordingly, this Court must of necessity review the records to determine which findings should be preferred as more conformable to the evidentiary facts.

As borne by the records, petitioner’s dismissal was brought about by the utterances he made during an informal Christmas gathering of respondent company’s Sales and Marketing Division on 17 December 1993. Petitioner

was heard to have uttered, "Si EDT (referring to Epitacio D. Titong, General Manager and President of respondent company), bullshit yan," "sabihin mo kay EDT yan" and "sabihin mo kay EDT, bullshit yan," while making the "dirty finger" gesture. Petitioner likewise told his co-employees that the forthcoming national sales conference of respondent company would be a "very bloody one."

The NLRC ruled that the foregoing actuation of petitioner constituted gross misconduct warranting his dismissal. Citing jurisprudence, the NLRC held that "in terminating the employment of managerial employees, the employer is allowed a wider latitude of discretion than in the case of ordinary rank-and-file." We do not agree with the findings of the NLRC.

Misconduct is improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must, nevertheless, be in connection with the employee’s work to constitute just cause for his separation.

In this case, the alleged misconduct of petitioner, when viewed in its context, is not of such serious and grave character as to warrant his dismissal. First, petitioner made the alleged offensive utterances and obscene gesture during an informal Christmas gathering of respondent company’s district sales managers and marketing staff. The gathering was just a casual get-together of employees. It is to be expected during this kind of gatherings, where tongues are more often than not loosened by liquor or other alcoholic beverages, that employees freely express their grievances and gripes against their employers. Employees should be allowed wider latitude to freely express their sentiments during these kinds of occasions which are beyond the disciplinary authority of the employer. Significantly, it does not appear in the records that petitioner possessed any ascendancy over the employees who heard his utterances as to cause demoralization in the ranks.

Second, petitioner’s outburst was in reaction to the decision of the management in the "Cua Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture to express his dissatisfaction over said management decision were clearly in bad taste but these acts were not intended to malign or cast aspersion on the person of respondent company’s president and general manager.

Third, respondent company itself did not seem to consider the offense of petitioner serious and grave enough to warrant an immediate investigation on the matter. It must be recalled that petitioner uttered the alleged offensive language at an informal gathering on 17 December 1993. He then allegedly made threatening remarks about the forthcoming sales conference on 3 January 1994. During a meeting on 4 January 1994, Mr. Titong, Jr., the president and general manager of respondent company and allegedly to whom the offensive words were directed, merely admonished petitioner stating that, "when there is a disagreement, act in a professional and civilized manner." Respondent company allowed several weeks to pass before it deemed it necessary to require petitioner to explain why no disciplinary action should be taken against him for his behavior. This seeming lack of urgency on the part of respondent company in taking any disciplinary action against petitioner negates its charge that the latter’s misbehavior constituted serious misconduct. There being no just cause for petitioner’s dismissal, the same is consequently unlawful. Petitioner is thus entitled to reinstatement to his position as District Sales Manager, unless such position no longer exists, in which case he shall be given a substantially equivalent position without loss of seniority rights. He is likewise entitled to the payment of his full backwages. With respect to petitioner’s other monetary claims, however, we agree with the findings of the labor arbiter that he failed to establish his entitlement thereto. GRANTED.

Villar v NLRC (High tech manufacturing Corp.) May 11, 2000 NATURE: Petitioners, in this petition forcertiorari, assail for having beenrendered with grave abuse of discretion the 30 May 1997Decision of the National Labor Relations Commission (NLRC)vacating and setting aside the Decision of the Labor Arbiter, aswell as its 31 July 1997 Resolution denying reconsideration. FACTS - HI-TECH MANUFACTURING CORPORATION (HI-TECH), a corporation duly organized and existing under Philippine laws, isengaged in the business of manufacturing cartons forcommercial purposes. On different dates, HITECH hiredpetitioners to perform various jobs for the company such asslitter machine operator, inkman, silk screen printer, truckhelper, rubber dye setter, forklift operator and stitchingmachine operator. - Sometime in March 1994 petitioners, who were members ofthe Federation of Free Workers Union, filed before theDepartment of Labor a petition for certification election amongthe rank-and-file employees of HITECH. The petition wasgranted and a certification election was conducted inside thecompany premises on 31 July 1994. However, petitioners lost inthe election as the HI-TECH employees voted for "No Union."

- On 1 August 1994 and the succeeding days thereafter,petitioners failed to report for work. They alleged that they werebarred from entering the premises of HI-TECH; hence, theyimmediately filed before the Labor Arbiter separate complaintsfor illegal dismissal and labor standards claims against HI-TECH,Herman T. Go, owner, and Carmen Belano, general manager. - Petitioners claimed that they were summarily dismissed from employment by the management of HI-TECH in retaliation for organizing a labor union in the work premises as well as in filingthe petition for certification election before the Department ofLabor. They further averred that they were paid daily wagesranging from P81.00 to P145.00 which were below the minimumfixed by law and that they were required to work six (6) days aweek from 8 o’clock in the morning to 7 o’clock in the eveningwithout being paid for the overtime. Neither were they paidtheir service incentive leave pay and 13th month pay. - The Labor Arbiter ruled for the petitioners. On appeal by HI-TECH, the NLRC in its Decision of 30 May 1997 vacated and setaside the Labor Arbiter’s Decision and ordered petitioners toreport back to work, or if no longer feasible, directed HI-TECH topay petitioners their separation benefits.

ISSUE: WON petitioners are entitled to back wages and other monetary benefits

HELD: Ratio: The burden of proving payment of monetary claims rests on the employer. In Jimenez v. National Labor Relations Commission we held As a general rule, one who pleads payment has the burden ofproving it. Even where the plaintiff must allege non-payment,the general rule is that the burden rests on the defendant toprove payment, rather than on the plaintiff to prove non-payment. The debtor has the burden of showing with legalcertainty that the obligation has been discharged with payment. -The petitioners’ claims for underpayment of wages, 13th month pay and service incentive leave pay should be upheld. - Petitioners executed a JOINT AFFIDAVIT specifying their dailywages, positions and periods of employment, which was madethe basis of the Labor Arbiter’s computation of the monetaryawards. All that the NLRC needed to do was to refer to theprevailing minimum wage to ascertain the correctness ofpetitioners’ claims. And most importantly, the burden of proving payment of monetary claims rests on the employer. - The reason for the rule is that the pertinent personnel files,payrolls, records, remittances and other similar documents –which will show that overtime, differentials, service incentiveleave and other claims of workers have been paid – are not inthe possession of the worker but in the custody

and absolutecontrol of the employer. Thus, in choosing not to presentevidence to prove that it had paid all the monetary claims ofpetitioners, HI-TECH failed once again to discharge theon u sprobandi. Consequently, we have no choice but to award those claims to petitioners.

SANTIAGO ALCANTARA, JR., petitioner, vs. THE COURT OF APPEALS and THE PENINSULA MANILA, INC., respondents.

FACTS: Petitioner Santiago Alcantara, Jr., an employee of respondent The Peninsula Manila, Inc., seeks the reversal of the decision and resolution of the Court of Appeals upholding his dismissal for willful disobedience. At the time of his dismissal, petitioner worked as Commis II of the Food and Beverage Department of the Peninsula Manila Hotel, Inc. He was also a Director of the National Union of Workers in Hotels Restaurants and Allied Industries (NUWHRAIN)-Manila Peninsula Chapter. The controversy stems from a Memorandum dated August 7, 1998 issued by respondent Hotel prohibiting the union from using the union office from midnight until 6:00 in the morning. On August 18, 1998, at about 1:30 in the morning, petitioner was seen inside the union office with Conrad Salanguit and a certain Ma. Theresa Cruz. They left the office at about 2:20 in the morning of the same day. On August 20, 1998, petitioner and a male companion were seen entering the union office. Later that evening, petitioner was again seen in the office, seated with both legs resting on a table. His male companion, who turned out to be Mr. Salanguit, was lying on the bench. The office lights were off. DPO Lt. Caronan approached petitioner and reminded him of the Memorandum dated August 7, 1998. Petitioner and Mr. Salanguit refused to leave, however, and replied, “Consult that to our President because we gave a reply to that memorandum.” Both petitioner and Mr. Salanguit stayed in the office until 3:30 in the morning of August 21, 1998. On August 28, 1998, Arsenio Olmedilla, Sous Chef-Production, sent a memorandum to petitioner informing him about the Security Department Report dated August 21, 1998. The memorandum stated that he was seen inside the union office between midnight until the morning of the following day and directed him to submit his written explanation within 24 hours from receipt thereof. Petitioner submitted his letter-explanation dated August 28, 1998 intimating that the Memorandum prohibiting the use of the union office was inconsistent with the CBA and was necessarily ineffective. Petitioner argued that inasmuch as the Hotel operated 24 hours a day, the union office should be available whenever the union found it necessary. This was how the CBA had always been applied. Petitioner also pointed out that the

charge against him did not pertain to his duties in the Hotel. He claimed he used the union office only during his breaks or when he was off duty. On November 26, 1998, at around 12:50 until 5:50 in the morning, petitioner was again seen lying on the bench inside the union office. DPO Lt. Caronan politely informed him again about the existing Memorandum and asked him to leave. Petitioner refused and left the union office only at around 5:50 in the morning of November 26, 1998. In a Memorandum to petitioner dated December 7, 1998, Mr. Noel Silva, Assistant Food and Beverage Manager informed petitioner that Security had reportedly seen him lying on the bench at the basement rank-and-file union office on November 26, 1998 in violation of the Memorandum dated August 7, 1998. Petitioner was required to explain in writing why no disciplinary action should be taken against him. On December 9, 1998, petitioner sent a letter to Mr. Silva explaining that the union had contested the Memorandum dated August 7, 1998. He reiterated that the Memorandum was unreasonable and unlawful. Petitioner invoked Section 4, Article IV of the Collective Bargaining Agreement (CBA) between the Union and the Hotel, stating that the hotel shall provide the Union with an office for its exclusive use. He further argued that the Memorandum constituted unlawful interference with the employees’ right to self-organization. On January 4, 1999, private respondent sent petitioner a Notice of Termination for alleged willful and blatant refusal to comply with a lawful and valid order (HRD Memorandum dated August 7, 1998) issued by his employer. Meanwhile, the Union threatened to go on strike unless the memorandum in question was lifted and petitioner reinstated. Respondent requested the National Conciliation and Mediation Board to intervene and conduct preventive mediation proceedings.

ISSUE: WON dismissal is valid

RULING: Willful disobedience of the employer’s lawful orders, as a just cause for the dismissal of an employee, 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 had been engaged to discharge.[9] Petitioner avers that his dismissal for willful disobedience is unwarranted because: (1) the Memorandum dated August 7, 1998 is not in connection

with the duties which the employee had been engaged to discharge; (2) the same Memorandum is not reasonable and lawful; and (3) petitioner did not exhibit a “wrongful and perverse attitude” in disobeying said Memorandum. Petitioner further posits that the use of the union office has no connection whatsoever with petitioner’s duties as Commis II, one of the kitchen personnel. However, as respondent points out, every employee is charged with the implicit duty of caring for the employer’s property; consequently, he is bound to obey the reasonable and lawful orders of the employer regulating the use and preservation thereof. Thus, this Court has upheld the dismissal of an employee for violation of a rule prohibiting employees from using company vehicles for private purpose without authority from management.[10] This is not only to prevent loss on the part of the employer but also to prevent injury to the employees as well as the customers of the employer. Whether the Memorandum in question is reasonable and lawful is beside the point. Company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties and must be complied with until finally revised or amended unilaterally or preferably through negotiation or by competent authority. The subject Memorandum is not grossly oppressive. It is not patently contrary to law. While petitioner argues that its application was discriminatory – the two employees found with him in the union room were not at all subjected to disciplinary action – the Memorandum was not discriminatory on its face. Petitioner’s violation of his employer’s order, prior to its revocation, was therefore inexcusable. We agree with petitioner that his behavior did not constitute the “wrongful and perverse attitude” that would sanction his dismissal. The surrounding circumstances indicate that petitioner was motivated by his honest belief that the Memorandum was indeed unlawful and unreasonable. Previous practice allowed the use of the union office 24 hours a day. Section 1, Article III of the Collective Bargaining Agreement for 1996-2001 provided that, “All practices… not expressly provided for in this Agreement which are presently being enjoyed by the employees… shall be continued by the HOTEL….” Moreover, the Memorandum regulated the use of the union office and petitioner, a union officer, interpreted such regulation as an unlawful interference with legitimate union activities. Viewed in this light, petitioner’s attitude can hardly be characterized as “wrongful and perverse.” While these circumstances do not justify his violation of the regulation, they do not justify his dismissal either. The Hotel cites previous infractions committed by petitioner as additional grounds for his dismissal. The Court finds these to be nothing more than belated rationalizations; the Hotel did not refer to these violations in its Notice of Termination to petitioner.

The subject Memorandum purports to “[secure] the hotel against damage to property” in consonance with the hotel’s “concern to keep the premises peaceful, orderly and safe.” In short, it is a safety regulation. Under respondent’s House Code of Discipline, the “failure to observe… safety rules/requirements of the hotel” is a “Class A Offense,” the third violation of which the same Code imposes a three-day suspension. Petition is GIVEN DUE COURSE and GRANTED.

The formal challenge brought by employee of the reasonableness or the motives of a company’s policy is not an excuse for the employee not to obey said policy. (GTE Directories Corp. vs. Sanchez, May 27, 1991.) GTE DIRECTORIES CORP V. SANCHEZ, 197 SCRA 452 (1991)

SUMMARY: GTE through the years adopted several Sales evaluation policies. Pursuant to the latest sales policy, GTE issued 6 memoranda to its employees which required the Premise Sales Reps (PSRs) to submit individual reports reflecting target revenues as of deadlines set. None of these memoranda were followed by the employees, arguing that they were not consulted. As a result, 14 employees (some of them Union officers) were dismissed. Union also filed notice of strike before the 4th memo was issued. Court held that GTE’s sales policy was pursuant to the valid exercise of management prerogatives and that its implementation is not suspended merely because of pending negotiations initiated by the Union.

ROSARIO V VICTORY RICEMILL 397 SCRA 760 CALLEJO; February 19, 2003

NATURE: Petition for review on certiorari seeking to reverse CA decision FACTS- Emilio Uy owned Victory Ricemill. He employed Rosario astruck driver. Petitioner was tasked to, among others, haul palayfrom various points and bring them to respondent’s ricemill. Inaddition, petitioner acted as personal driver to the family of Mr.Uy during their trips to Manila. - Uy dismissed Rosario. According to respondent, petitioner wasguilty of insubordination when he refused to serve as driver ofMr. Uy’s son when the latter needed a driver. Also, petitionerwas instructed to deliver 600 bags of cement to Felix Hardware.Instead, petitioner delivered the same to one Eduardo Interior,who had not since then paid for P60k. Because of petitioner’stendency to disobey the orders to him, Uy was constrained toengage the services of another driver. Petitioner resented thenew driver and became uncooperative, disrespectful andquarrelsome. Petitioner, armed with a dagger, fought with theother driver and inflicted an injury on

the latter. Petitionerlikewise inflicted injuries on the head of a coemployee, whenhe intervened in the fight and tried to pacify petitioner.

(a) Serious misconduct or willful disobedience by theemployee of the lawful orders of his employer orrepresentative in connection with his work;

- A complaint for illegal dismissal with money claims was filed by petitioner

- Willful disobedience of the employer’s lawful orders, as a justcause for the dismissal of an employee, envisages theconcurrence of at least two requisites: (1) the employee’sassailed conduct must have been willful or intentional, thewillfulness being characterized by a "wrongful and perverseattitude;" and (2) the order violated must have beenreasonable, lawful, made known to the employee and mustpertain to the duties which he had been engaged to discharge.

- Labor arbiter found that there were valid causes for the termination of petitioner’s employment. - The NLRC found that petitioner was denied due process duringthe proceedings with the regional labor arbiter as petitioner wasnot given the opportunity to present his additional rebuttalevidence. On the other hand, respondent was allowed to submitin evidence various exhibits to discredit the rebuttal testimonyof petitioner. Case was remanded. - Petitioner submitted the affidavit ofRoque, who averred thatthe 600 bags of cement delivered to Eduardo Interior had beenpaid as evidenced by in the sum of P58,950.00 payable torespondent. - Regional labor arbiter promulgated his decision stating that he found no reason to deviate from his previous decision. - NLRC affirmed the ruling of the regional labor arbiter

2. NO- To effect the dismissal of an employee the law requires notonly that there be just and valid cause as provided under Article282. It likewise enjoins the employer to afford the employee theopportunity to be heard and to defend himself. The employer ismandated to furnish the employee with two written notices: (a)a written notice containing a statement of the cause for thetermination to afford the employee ample opportunity to beheard and defend himself with the assistance of hisrepresentative, if he so desires; (b) if the employer decides toterminate the services of the employee, the employer mustnotify him in writing of the decision to dismiss him, statingclearly the reason therefore

- CA found that respondent had justifiable cause to dismisspetitioner. CA also observed that although there was no strictcompliance with the twonotice rule, it could be gleaned fromthe records that petitioner was given ample opportunity toexplain his side. Moreover, even granting that respondent fellshort of the two-notice requirement, such irregularity, accordingto the CA, does not militate against the legality of the

- While respondent furnished petitioner the written noticeinforming him of his dismissal, respondent failed to furnishpetitioner the written notice apprising him of the charge orcharges against him. Consequently, petitioner was deprived ofthe opportunity to respond thereto

dismissal.

failure to observe procedural requirements does not invalidatenor nullify the dismissal of an employee. The consequence ofthe failure either of the employer or the employee to live up tothis precept is to make him liable in damages, not to render hisact void. The measure of damages is the amount of wages theemployee should have received were it not for the terminationof his employment without prior notice. If warranted, nominaland moral damages may also be awarded.

ISSUES 1. WON petitioner’s termination was for a just and lawful cause 2. WON petitioner’s dismissal from his employment was in accordance with the due process requirement of the law 3. WON petitioner is entitled to backwages

HELD 1. YES - Petitioner’s actuations clearly constituted willful disobedienceand serious misconduct justifying his dismissal under Article282(a) of the Labor Code which provides: Art. 282. Termination by employer. – An employer may terminate an employment for any of the following causes:

- When the dismissal is effected for a just and valid cause, the

3. YES- Under the Labor Code, only the absence of a just cause for thetermination of employment can make the dismissal of anemployee illegal. Art. 279. Security of Tenure. – In cases of regularemployment, the employer shall not terminate the services ofan employee except for a just cause or when authorized bythis Title. An employee who is unjustly dismissed from workshall be entitled to reinstatement without loss of seniorityrights and other privileges and to his full backwages,inclusive of allowances, and to his other benefits or theirmonetary equivalent computed from the time hiscompensation was withheld from him up to the time of hisactual reinstatement.

- Thus, only if the termination of employment is not for any ofthe causes provided by law is it illegal and, therefore, theemployee should be reinstated and paid backwages.

HELD: YES - The onus of proving that the dismissal of the employee was fora valid and authorized cause rests on the employer. Failure todischarge the same would mean the dismissal was not justifiedand therefore illegal.

- On the other hand, if it is shown that the employee wasdismissed for any of the just causes mentioned in said Art. 282,then, in accordance with that article, he should not bereinstated. However, he must be paid backwages from the timehis employment was terminated until it is determined that thetermination of employment is for a just cause because thefailure to hear him before he is dismissed renders thetermination of his employment without legal effect. .

- The requisites for a valid dismissal are (a) the employee mustbe afforded due process (b) the dismissal must be for a validcause. Petitioner complied with the first requisite by furnishingthe employees with written notices stating cause fortermination, and having decided to do so, the reasons therefor.- Petitioner accused private respondents of gross neglect ofduty and loss of confidence. Gross negligence is defined as thefailure to exercise slight care or diligence. A perusal of therecords show they weren’t even remotely negligent of theirduties. They were able to illustrate with candor and sinceritythe procedure they took prior to the loss— petitioner’sallegations on the other hand, were not supported by anysubstantive evidence. Assuming arguendo they were negligent,a single act cannot be categorized as habitual and thus cannotbe a just cause for dismissal.

NATIONAL BOOKSTORE INC V CA (YMASA,GABRIEL) 378 SCRA 194 BELLOSILLO; February 27, 2002

FACTS- Petitioner National Bookstore employed private respondentsYmasa and Gabriel as Cash Custodian and Head Cashier. Theywere routinely tasked with counting the previous day’s salesand placing them in separate plastic bags to be deposited inINTERBANK and PCIB. The bags were held for safekeeping in theBranch vault but upon retrieval to deposit the money withroving tellers, the money was counted again but the amount forPCIB was short of P42,758. - Private respondents were asked by Management to explain inwriting why they should not be dismissed for the loss ofcompany funds and were placed under preventive suspension.Private respondents in turn denied responsibility, emphasizingthey had no access to the vault and that they were thoroughlysearched by the guard before leaving. They also asserted theirloyalty and sincerity in their work as they had been employedthere over 13 years. - Petitioner found their explanation unsatisfactory and terminated them for gross neglect of duty and loss of confidence. Private respondents filed a complaint for illegaldismissal. The Labor Arbiter found in their favor, stating that thedismissal was not founded on valid and justifiable grounds.Petitioners appeal with the NLRC was denied, as was theirpetition for certiorari with the CA for lack of merit.

ISSUE: WON private respondents were illegally dismissed

- Loss of confidence on the other hand must be based on thewillful breach of trust and founded on clearly established facts.Petitioner failed to establish with certainty the facts upon whichsuch a breach of confidence could be based. Privaterespondents were thus illegally dismissed. Petition is DENIED for lack of merit.

WORLDWIDE PAPERMILLS, INC. and/or HONORIO POBLADOR, III, Petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and EDWIN P. SABUYA, Respondents.chanrobles virtual law library

FACTS: Private respondent was employed by petitioner as a packer on July 8, 1982 until his services were terminated on September 28, 1991. It appears that private respondent incurred excessive unexcused absences from 1986 to 1989, as summarized in a memorandum dated January 22, 1990 prepared and signed by the personnel/administrative officer of petitioner thus: In 1986, he incurred a total of 46 days without pay including AWOL but excluding 30 days VL & SL given to him. The following year, 1987, he accumulated about 17. 5 days leave without pay including AWOL after exhausting the 30 days VL/SL with pay. Followed by 1988, in which after exhausting the 30 days leave with pay, he again accumulated 60 days leave without pay, 12 days of which AWOL. Finally, 1989 he acquired a total of 26 days leave without pay including 3 days AWOL after exhausting the 30 days leave with pay. (Please refer to attached breakdown of absences.) Disciplined for unofficial leaves, in 1986, he was admonished, (1) month. In 1987, he was admonished, warned sternly, and suspended for one (1) week. While in 1988 for AWOL he was admonished, warned sternly and suspended for one (1) month. On Nov. 11, he was warned

sternly for excessive leave without pay. Finally in 1989, he got an admonition and consequently warned sternly for AWOL. (Please refer to attached breakdown of DAM.)

Sabuya was counselled several times to improve his attendance. He promised not to absent himself, yet, no compliance. Due to having incurred 12 days AWOL in 1988, he was supposed to be terminated based on our rule, but due to his asking reconsideration and intervention of R. Brusola, Union President he was only suspended for one (1) month. A promissory note to this effect was executed by Sabuya and witnessed by R. Brusola, stressing among others to improve his attendance in 1989; once he exceeds the VL & SL granted by the company, he accepts to be terminated; and the next time he is declared AWOL he accepts the DA of termination.(Please see attached notes for reference.)

Private respondent, however again incurred absences without official leave. A week after he had served his latest suspension, private respondent applied for sick leave covering the period August 12-18, 1991. Ms. Belinda Luna, the Company nurse, paid private respondent a home visit. However, he was not there. Neither was anybody at home, though the radio was on. Ms. Luna learned from private respondent's son that his father was moonlighting as a pedicab driver at Bayanan, Muntinlupa, market.

After petitioner was informed of the incident, private respondent's application for sick leave was disapproved. Then, on Aug. 29, 1991, petitioner issued a memorandum to private respondent requiring him to explain within twenty-four (24) hours from receipt why no disciplinary action should be imposed upon him for his excessive absences without official leave. Petitioner terminated the employment of private respondent. Thus, the latter filed a complaint for illegal dismissal, praying for reinstatement and payment of backwages. LA: illegal dismissal. NLRC: the is just cause for the dismissal.

ISSUE: WON dismissal is illegal.

RULING: In the case at bench, it is undisputed that respondent Edwin P. Sabuya had within a span of almost six (6) years been repeatedly admonished, warned and suspended for incurring excessive unauthorized absences. Worse, he was not at home but was out driving a pedicab to earn extra income when the company nurse visited his residence after he

filed an application for sick leave. Such conduct of respondent Edwin P. Sabuya undoubtedly constitutes gross and habitual neglect of duties.c Sabuya was given notice that the next time he again exceeds his allowed vacation and sick leaves or goes on absence without official leave, he would be terminated from employment. Private respondent did not heed the warning. His dismissal from employment is, therefore, justified.

On the issue of separation pay, we ruled also in Philippine Geothermal, Inc. 12 that separation pay of one-half (1/2) month salary for every year of service is equitable, even if the employee's termination of employment is justified. Finally, on the issue of violation of private respondent's right to procedural due process, it is clear that the right was violated when no hearing was conducted prior to dismissal.

WHEREFORE, the decision of respondent NLRC is MODIFIED to read as follows: The dismissal of private respondent Edwin P. Sabuya is, under the circumstances of this case, declared valid and justified.

Petitioners are hereby ordered, for humanitarian reasons, to pay respondent Edwin P. Sabuya separation pay equivalent to one-half (1/2) month salary for every year of service and to indemnify him the amount of Five Thousand Pesos (P5,000.00) for failure of petitioners to fully comply with the requirements of procedural due process.

JUAN P. VILLENO, Petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FOURTH DIVISION, SULPICIO LINES, INC., and/or SIXTO ORIG and CARLOS GO, Respondents. G.R. No. 108153 December 26, 1995

FACTS: Petitioner Juan P. Villeno was employed on 29 December 1961 as electrician in one of the vessels of private respondent Sulpicio Lines, Inc. Twenty-seven (27) years later he was separated from the service.

M/V Sulpicio Container XI after leaving the port of Cebu for Manila was forced to return due to the death of the purser on board. Upon reaching port, the crew members were instructed not to leave the vessel as it would pursue its voyage immediately after turning over the body to the proper

authorities. The ship's cook however was granted permission upon his request to leave the vessel to buy additional foodstuff for their provisions. The petitioner on the other hand, without seeking permission, left the vessel purportedly to settle a marital problem. Before leaving he disconnected the ship's steering line cable so that the vessel could not leave port without him. His explanation was that he wanted to prevent pranksters from toying around with the steering wheel as what had happened in the past.

According to petitioner, when he returned to the port thirty (30) minutes later, the ship was only a few inches away from the wharf but was prevented by a representative of respondent corporation from boarding the vessel. It turned out that the vessel had hired another electrician to reconnect the steering line cable. The consequence of petitioner's actuation was that the departure of the vessel was further delayed.

Petitioner was investigated the following day by Atty. Sixto Orig, private respondent and personnel officer of respondent shipping lines. Petitioner was assisted by a representative of the Philippine Labor Federation. In that investigation he admitted having disconnected the steering line cable.

After evaluation of the evidence he was found guilty of intentionally sabotaging the operation of the vessel, a serious misconduct, compounded by willful disobedience justifying the penalty of dismissal. Labor Arbiter ruled that petitioner was indeed guilty of misconduct but found the penalty of dismissal harsh considering that there was no evidence showing that petitioner intended to sabotage the voyage of the vessel. (NLRC) held that the circumstances that petitioner had been employed by respondent corporation for a long period of time and that it was his first offense were not by themselves sufficient to warrant mitigation of the consequences of his serious misconduct. NLRC reversed the decision of the Labor Arbiter and dismissed the complaint. 2

ISSUE: whether petitioner's dismissal from the service is justified under the law.

RULING: The crux of the controversy now is whether petitioner's act of disconnecting the steering line cable and disembarking from the vessel

without permission constitute serious misconduct and willful disobedience justifying his dismissal.

Petitioner argues that although his reason for disconnecting the steering line cable was personal yet it was highly commendable since he was concerned with family unity. In addition, the disconnection was done to protect the vessel from pranksters who in the past would play with the steering wheel. By terminating his services respondent corporation thus set to naught his twenty-seven (27) years of service, completely ignoring the fact that it was his first offense. He claims that the delay he caused to the vessel was almost nil considering that it took him only thirty (30) minutes to return as compared to the delay that the voyage had already incurred.

We find these propositions of petitioner unacceptable. Among the basic duties of an employee are to conduct himself properly and to yield obedience to lawful orders of his employer. It is in this regard that serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work is a just cause for his termination. This is explicitly provided under Art. 282, par. (a), of the Labor Code. The misconduct must be related to the performance of his duties and of such grave character rendering him unfit to continue working for the employer. As regards willful disobedience, we stated in San Miguel Corporation v. Ubaldo 3that at least two (2) requisites must concur: (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 had been engaged to discharge.

The number of violations and length of service became relevant because the infractions were minor. Consequently, these have no bearing to the case at bench where the infractions involved wereserious. In other words, considerations of first offense and length of service are overshadowed by the seriousness of the offense. As to whether an offense is minor or serious will have to be determined according to the peculiar facts of each case. And to a shipping company engaged in the transportation of passengers and cargoes any delay of its vessels may greatly affect its business and reputation and expose the company to unmitigated lawsuits for breach of contract and damages. AFFIRMED.

SALAS V ABOITIZ ONE 556 SCRA 376

FACTS: Salas was a material controller of Aboitiz, and was tasked with monitoring andmaintaining the availability and supply of Quickbox needed by Aboitiz in its day-to-day operations. At one point, Salas had run out of Large Quickbox, hamperingAboitiz’ business operation. Aboitiz then wrote Salas a memorandum requiringhim to explain in writing within seventytwo hours why he should not bedisciplinarily dealt with for his (i) failure to monitor the stock level of LargeQuickbox which led to inventory stock out; and (ii) failure to report to [his]immediate superior the Large Quickbox problem when the stock level wasalready critical, when the Large Quickbox level was near stock out, and the stocklevel had a stock out. Five days after, an administrative hearing was conductedto give Salas opportunity to explain his side. Twenty-two days after, Aboitiz senthim a decision notice, terminating him for loss of trust and confidence, effectivemid-month. Salas then sent a letter to Mr. Hamoy requesting reconsideration of the decision, asking if he could avail of the early retirement plan, having workedfor Aboitiz for ten years already. He also asked to be allowed to tender hisresignation instead of being terminated. Lastly, he asked to be employed untilthe end of the month, so as to have enough time to look for another job. Mr.Hamoy denied the request for early retirement plan, stating that the company'stable of discipline provided the penalty of dismissal for the offenses he hadcommitted. The extension, however, was granted, and even extended for amonth.Claiming termination without cause, Salas filed with the Labor Arbiter a complaintagainst Aboitiz and its president Sabin Aboitiz for illegal dismissal with prayer forreinstatement, and for payment of full backwages, moral and exemplarydamages, as well as attorney’s fees. Aboitiz responded that there was validtermination, asserting that Salas was dismissed for just cause and with dueprocess, Salas having willfully breached his duty when he ran out of LargeQuickbox , justifying the termination of his employment.The Labor Arbiter sustained Salas' dismissal. On appeal, the NLRC reversed.Gross negligence being characterized by want of even slight care acting oromitting to act in a situation where there is a duty to act, willfully andintentionally with a conscious indifference to consequence, Salas could not beheld guilty, having done his duty to make proper requisition in advance. Failureto follow-up is not an indicator of remission of duty. Salas can only be guilty of negligence, for failing to properly monitor and document the stocks in hiscustody. As he admitted during the administrative hearing, there were thosewhich were even missing. Worst, he tampered the records to show that the stockon 31 May 2003 is for 02 June 2003. While there was no intention to defraud thecompany. The NLRC thus denied his prayer for backwages, and ordered thepayment of separation pay instead of reinstatementAboitiz filed a motion for reconsideration, while Salas sought partialreconsideration of the decision, both of which were denied by the NLRC. Salasand Aboitiz filed petitions for certiorari with the CA. Salas questioned the denialof his prayer for backwages and other monetary benefits, ad the order directingpayment of separation pay instead of reinstatement. Aboitiz questioned NLRC'sreversal. The CA sustained Salas' dismissal, holding that Salas was guilty of serious

misconduct under Art. 282(a) for tampering the records to show that thestock on May 31 2003 was for June 2 2003, gross and habitual neglect under Art.282(b), and willful breach of the trust (Art. 282 (c)) reposed on Salas by Aboitiz, because as "warehouseman", and therefore a confidential employee, Salasconcededly tampered company records to hide his gross and habitual neglect,and worse, sold the company’s eight units of used airconditioners withoutauthority.

ISSUE: Whether simple negligence can be a basis for dismissal on ground of loss of trust and confidence.

RULING: Salas was terminated for neglect of duty and willful breach of trust. Grossnegligence connotes want or absence of or failure to exercise slight care ordiligence, or the entire absence of care. To warrant removal from service, thenegligence should not merely be gross , but also habitual . Although it was Salas'duty to monitor and maintain the availability and supply of Quickbox, recordsshow that Salas had made a requisition as early as May 21, 2003, even makingseveral follow-ups. If there is anything that Salas can be faulted for, it is hisfailure to promptly inform his immediate supervisor of the non-delivery of therequisitioned items. Nevertheless, such failure did not amount to gross neglectof duty or to willful breach of trust, which would justify his dismissal fromservice.Moreover, there appears nothing to suggest that Salas’ position was a highly oreven primarily confidential position, so that he can be removed for loss of trustand confidence by the employer. A "position of trust and confidence” is onewhere a person is "entrusted with confidence on delicate matters," or with thecustody, handling, or care and protection of the employer’s property. In therecords of the case, there is no semblance of willful breach of trust on the partof Salas. It is true that there was erasure or alteration on the bin card. Aboitiz,however, failed to demonstrate that it was done to cover up Salas’ allegednegligence. Other than the bin card and Aboitiz’s barefaced assertion, no otherevidence was offered to prove the alleged cover-up. The CA, therefore, erred inadopting Aboitiz’s unsubstantiated assertion to justify Salas’ dismissal. The lossof trust must be based not on ordinary breach but, in the language of Article282(c) of the Labor Code, on willful breach. A breach is willful if it is doneintentionally, knowingly and purposely, without justifiable excuse, asdistinguished from an act done carelessly, thoughtlessly, heedlessly orinadvertently. In this case, Aboitiz utterly failed to establish the requirementsprescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust and confidence.Neither can Aboitiz validate Salas’ dismissal on the ground of seriousmisconduct for his alleged failure to account for unused accountable forms. Thecharge came only after Salas’ dismissal. The subject accountable forms wereissued to Salas in 2001. Inexplicably, this alleged infraction was never includedas ground

in the notice of termination. It was only three (3) months after thefiling of the complaint for illegal dismissal that Aboitiz asserted that Salas failedto account for these unused accountable forms. It is clear that such assertion of serious misconduct was a mere afterthought to justify the illegal dismissal.Aboitiz’s reliance on the past offenses of Salas for his eventual dismissal islikewise unavailing. The correct rule has always been that such previousoffenses may be used as valid justification for dismissal from work only if theinfractions are related to the subsequent offense upon which the basis of termination is decreed. While it is true that Salas had been suspended on for failure to meet the security requirements of the company, and for his failure toassist in the loading at the fuel depot , such offenses are not related to Salas’latest infraction, hence, cannot be used as added justification for the dismissal.Undoubtedly, no just cause exists to warrant Salas’ dismissal. Consequently, heis entitled to reinstatement to his former position without loss of seniorityrights, and to payment of backwages. However, the award of backwages is modified because Salas was not entirelyfaultless.

be genuine and not simulated; now should it appear as a mere afterthought to justify an earlier action taken in bad faith or a subterfuge for causes which are improper, illegal, or unjustified. It has never been intended to afford an occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of duty committed by the employee which must be established by substantial evidence. In this case, Aboitiz utterly failed to establish the requirements prescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust and confidence.

***As stated in the decision notice, Salas was terminated for neglect of duty and willful breach of trust. Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or the entire absence of case. 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.

Wah Yuen Restaurant v. Jayona | GR 159448 | Dec. 16, 2005 | J. Carpio-Morales

If there is anything that Salas can be faulted for, it is his failure to promptly inform his immediate supervisor of the non-delivery of the requisitioned items. Nevertheless, such failure did not amount to gross neglect of duty or to willful breach of trust, which would justify his dismissal from service. The CA also justified Salas' dismissal on ground of willful breach of trust. It lent credence to Aboitiz's posture that Salas was a warehouseman holding a position of trust and confidence. We disagree. 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. Indeed, an employer has the right, under the law, to dismiss an employee based on fraud or willful breach of the trust bestowed upon him by his employer or the latter's authorized representative. However, the loss of trust must be based not on ordinary breach but, in the language of Article 282(c) of the Labor Code, on willful breach. a breach is willful if it is done intentionally, knowingly, and purposely, withouth justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly, or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices, or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. It should

Undoubtedly, 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. However, as Salas was not entirely faultless, and although such negligence would not justify Salas' termination from employment in view of the stringent condition imposed by the Labor Code on termination of employment due to gross and habitual neglect, the same cannot be condoned, much less tolerated.

F: Primo Jayona (respondent) was hired in December 1998 as Assistant Manager of Wah Yuen Restaurant (petitioner). By respondent’s claim, his initial monthly salary was P9,000.00, which was increased to P9,450.00 effective January 15, 2000.

By letter-memorandum dated January 5, 2000. Betty Chua, the President of petitioner, directed respondent to explain within 72 hours why he should not be dismissed from the service for grave dishonesty and loss of confidence for billing a customer in an amount considerably less than the cost of the actual stuff ordered. And Betty warned respondent that a repetition of the same act would cause his automatic dismissal from the service. A handwritten note with an unidentified initial at the lower portion of the letter-memorandum indicates that respondent refused to acknowledge receipt thereof.

Subsequently, petitioner through counsel, by letter of April 5, 2000 which was served upon respondent on even date, terminated his services effective that same date, upon the ground that he was “found for the second time on April 3, 2000 (the first was on January 3, 2000) to have charged/billed a customer an amount, which was considerably less than the actual order, [which] is certainly prejudicial to the interests of [his]

employer, a practice which can bring about the collapse of the business in the long run; that is if the practice is not checked immediately.”

but that it was increased toP9,450 on January 15, 2000 or twelve days after he was alleged to have committed an infraction on January 3, 2000, it would have been easy for petitioner to present documentary proof of its claim. But none was produced.

Respondent thus filed a complaint for illegal dismissal, recovery of overtime pay, service incentive leave pay and 13th month pay.

The Labor Arbiter dismissed respondent’s complaint on the ground that as an assistant manager, he works for as long as he enjoys the trust and confidence of his employer, but once the trust and confidence are lost, he has no more reason to stay as such.

On appeal, the National Labor Relations Commission (NLRC), by Resolution of December 14, 2001, affirmed the dismissal. On respondent’s Petition for Certiorari, the Court of Appeals reversed and set aside the NLRC Resolution. The CA gave the petition due course.

Hence, the present petition for review. Petitioner harps on the “unwarranted stress on respondent’s rather self-serving claim that he was granted a salary increase barely two (2) weeks after he committed his first infraction.”

I: WON the respondent was illegally dismissed

Under Article 277 (b) of the Labor Code, as well as Section 2, Rule XXIII, Book V and Section 2, Rule I, Book VI, of the Implementing Rules and Regulations of the Labor Code, the dismissal of an employee must be for a just or authorized cause and after due process.

Procedural due process requires the employer to give the employee two notices. The first is to apprise him of the particular acts or omissions for which his dismissal is sought, and the second is to inform him of the decision to terminate him.

Failure to comply with these mandatory procedural requirements taints the dismissal with illegality and any judgment rendered by the employer without compliance therewith can be considered void and inexistent.

For petitioner to consider the letter-memorandum of January 5, 2000 as the first notice, and the letter of April 5, 2000 as the second notice of termination of employment is erroneous. For albeit the two letters dealt with infractions of the same nature, they were separate and distinct.

H: In the case at bar, petitioner, which has the onus of proving that the dismissal of respondent on account of loss of confidence arose from particular facts, failed to discharge the same.

The April 5, 2000 termination letter itself clearly stated that respondent was being terminated for committing a second infraction. As such he should have been given the chance to give his side thereon. But he was not.

On respondent’s claim that his salary was increased effective January 15, 2000, petitioner argues that other than respondent’s self-serving claim, no evidence was presented to show that indeed the salary increase took effect on January 15, 2000.

In any event, not only did petitioner fail to observe the due process requirements. It also failed to establish by substantial evidence that the alleged second infraction was committed.

This Court notes that in its Position Paper before the Labor Arbiter, petitioner stated that respondent was hired in December 1998 at a monthly salary ofP9,540.00 “more or less.” If respondent was hired at such amount, contrary to respondent’s claim that his initial salary was P9,000.00

Loss of confidence then, which is the usual ground for the removal of a managerial employee, not having been established, like any other lawful cause, the petition must fail.

Although the loss of confidence on petitioner’s part is unfounded, reinstating respondent to his former position would not be advisable given the souring of their relationship. This Court now, therefore, directs petitioner to just afford respondent his right to separation pay, backwages, and other benefits under the law.

Since the records do not provide a basis for the determination of the amount of separation pay plus backwages and other benefits to which respondent is entitled, a remand of the case to the Labor Arbiter is thus in order.

The decision is AFFIRMEDwith MODIFICATION. The records of this case are REMANDED to the Labor Arbiter, through the National Labor Relations Commission, only for the determination of the amount of separation pay plus backwages and other benefits to which respondent is entitled.

Austria v. NLRC, 310 SCRA 293 F: PHILIPPINE STEEL COATING CORPORATION (PHILSTEEL), private respondent, is engaged in the manufacture of prefabricated steel, galvanized iron and other metal products. On 19 December 1985 it hired petitioner Nazario C. Austria as its Credit and Collection Manager. On 11 August 1987 petitioner and private respondent PHILSTEEL entered into a "Confidentiality Agreement" whereby he agreed not to disclose to anyone outside the company any technical, operational and other such information acquired in the course of his employment, unless otherwise duly authorized by private respondent, on pain of immediate dismissal. A smooth and satisfactory employee-employer relationship ensued between the two (2) parties until 17 August 1989 when petitioner was unceremoniously terminated by private respondent company on the ground that he allegedly disclosed confidential information to prospective competitors and had undertaken activities far beyond his official duties and responsibilities. On 30 August 1989 Austria filed a case for illegal dismissal against PHILSTEEL. He alleged that on 5 August 1989 the President of PHILSTEEL, Abeto Uy, demanded his resignation purportedly due to loss of confidence but refused to shed light on the reasons therefor. Austria further alleged that on 17 August 1989, without any prior written notice, he was summoned to a meeting with the Vice-President for Finance, Primo Valerio, and Vice-President for Legal and Personnel, Gregorio Vega. Therein he was questioned about a certain 13 July 1989 telefax message sent by one Felix Lukban to PHILSTEEL's Australian supplier of equipment and machinery, Bliss Fox Manufacturing Corporation (BLISS FOX). The telefax showed that,

on behalf of an unnamed client, Lukban was asking for the purchase price of a complete line of machinery and equipment for a steel galvanizing plant. Austria denied any knowledge of the telex. Petitioner was also asked about his close relationship with Lukban, which the former admitted, Lukban being the godfather of his child. Immediately after the meeting Austria was given his notice of termination and required to surrender the keys to his company car and to his room which were in his possession. When he returned to his room it was already padlocked; when he passed by his car it was barricaded. Austria submitted in support of his complaint the affidavit of Felix Lukban executed on 13 December 1989 disclaiming any participation of petitioner in the sending of the telefax message. In addition, Lukban testified to the same effect and denied hearing any answer from BLISS FOX on his telefax. PHILSTEEL, on the other hand, contended that any information as to the sources of its supply was highly confidential as the steel industry was very competitive, and the information was disclosed by Austria to Lukban. The basis for this contention was the incident of 5 August 1989 when a representative of BLISS FOX named Charles Villa informed Abeto Uy, in the presence of Primo Valerio and Gregorio Vega, of the fax message sent by Lukban to BLISS FOX. Charles Villa was said to have stated that Lukban represented himself to be acting for PHILSTEEL so he verified the representation from Uy who however denied it. Forthwith, Villa dialed a certain number from the telefax message.[9] After a brief exchange with the person on the other end of the phone, during which time Villa scribbled a name at the back of the telex, he informed Uy that he just talked with Lukban who informed him that his contact with PHILSTEEL was Rudy Austria whose name he had just written. After Villa left, Austria was immediately investigated on the matter. Petitioner admitted having a close relationship with Lukban. Austria also volunteered to disclose secret meetings at Manila Garden Hotel with Lukban and the latter's son-in-law regarding plans to put up a rival galvanizing business either here in the Philippines or in Singapore, as well as meetings at company premises with a group of Australians on the same subject. A second investigation held on 17 August 1989 yielded the same result. Testimonies of Vega and Valerio, as well as the latter's 29 November 1989 affidavit, the confidentiality agreement and the termination letter were presented to buttress private respondents' evidence. The Labor Arbiter found the evidence of private respondents credible on the ground that no other inference other than Austria's guilt could be drawn from these established circumstances: the Australian representative of BLISS FOX did not know Austria nor the latter's nickname (Rudy) when he called Lukban and inquired who Lukban's contact person was at PHILSTEEL; Lukban was not only known to Austria, he was close to him; and, Austria signified his intention to join the rival company which Lukban planned to form.

The Labor Arbiter pointed out that petitioner failed to establish any motive on the part of private respondents and of Valerio and Vega in terminating his employment or in testifying against him since his services were still highly satisfactory as of July 1989. Thus, the Labor Arbiter declared the dismissal to be legal but ordered private respondents to pay petitioner P24,000.00 separation pay considering that the company suffered no loss and that there was no proof of a rival company later established by petitioner. On appeal the NLRC agreed with the thesis of the Labor Arbiter that petitioner failed to prove any other motive by private respondents for his termination considering his excellent job performance. The Commission however modified the Labor Arbiter's decision by directing PHILSTEEL to pay petitioner an indemnity of P1,000.00 for non-observance of due process in failing to provide petitioner with a prior written notice of the investigation and for not giving him time to answer charges and to seek assistance of counsel. Basic is the rule that judicial review of labor cases does not go so far as to evaluate the sufficiency of evidence on which the labor officials' findings rest, more so when both the Labor Arbiter and the NLRC share the same findings. This, notwithstanding, we cannot affirm the decision of the NLRC especially when its findings of fact on which the conclusion was based are not supported by substantial evidence. By substantial evidence, we mean the amount of relevant evidence which a reasonable mind might accept as adequate to justify the conclusion. The NLRC grounded its findings on the following postulates: (a) the witnesses of PHILSTEEL are credible for petitioner failed to show any ground for them to falsely testify, especially in the light of his excellent job performance; and, (b) respondents' witnesses are more credible than petitioner's - Lukban who, insofar as the source of the information is concerned, impressed the NLRC as evasive. The NLRC however entertained a patent misapprehension of the burden of proof rule in labor termination cases. Unlike in other cases where the complainant has the burden of proof to discharge, in labor cases concerning illegal dismissals, the burden of proving that the employee was dismissed with just cause rests upon the employer. Such is the mandate of Art. 278 of the Labor Code. In brief, the evidence of PHILSTEEL rests upon the following bases: (a) the allegation of Charles Villa, representative of BLISS FOX, that Lukban named petitioner Austria as his contact in PHILSTEEL; (b) the close relationship of Lukban and Austria; and, (c) the admissions of Austria during the investigation relative to both the close relationship with Lukban and their plans to set up a rival business. I: WON NLRC committed grave abuse of discretion for its misappreciation of the evidence and giving it undue weight H: Like a house of cards, the evidence of private respondents collapses when we take into account the fact that its foundation is made of hearsay evidence or mere speculations. It must be noted that the testimonies of

Valerio and Vega relied mainly on the veracity of the assertions of Villa. They did not say that they actually heard or observed Lukban admit to Villa that the former's client was PHILSTEEL and that his contact with PHILSTEEL was Austria. What they seemingly saw was Villa scribbling a name on the telefax purportedly dictated by Lukban. In short, what they appear to have observed was what Villa wanted them to observe, no matter whether it was the truth or not. Thus, their testimony was clearly hearsay and must not be given weight. Moreover, the veracity of Villa's assertions, even as to his being a representative of BLISS FOX, is suspect. The reliance both by the Labor Arbiter and the NLRC on the hearsay testimonies in assessing the evidence of private respondents reflects a dangerous propensity for baseless conclusions amounting to grave abuse of discretion. Such propensity is further shown when public respondent gave imprimatur to PHILSTEEL's conclusion that Austria was the one who divulged the so-called confidential information due mainly to his close affinity with Lukban. Of significance here is the fact that nowhere in all the allegations of PHILSTEEL was there proof of any concrete action by Austria of divulging confidential information and of setting up a rival business. Everything was according to what Villa said or what Lukban supposedly said. Thus, PHILSTEEL's resort to Austria's "admissions." The admission of close relationship is certainly true as it was affirmed by both Austria and Lukban. The "admission" however, of their setting up a rival business strikes this Court as somewhat forced like squeezing a stone for water. The reality of such admission is negated by subsequent events. At no time did such an envisioned "rival" company come to being. Indeed, after his dismissal, petitioner had to languish for several months in uncertainty while looking for employment, instead of just joining the alleged company. Until he died on 15 March 1997, petitioner never went into partnership with Lukban nor joined any other company. Accusation cannot take the place of proof. A suspicion or belief no matter how sincerely felt cannot be a substitute for factual findings carefully established through an orderly procedure. Such orderly procedure was denied petitioner by PHILSTEEL, as correctly found by the NLRC, thus In the instant case, there was at least a partial denial of the complainant's right to due process because there was no showing: (1) that he was given the required first written notice; (2) that he was given sufficient time to answer the charges against him; and, (3) that he had the chance to obtain the assistance of counsel. As there is a finding of illegal dismissal, an award of back wages, instead of indemnity, computed from the time of dismissal up to the time of his death, with legal interest plus attorney's fees, might properly assuage the hurt and damages caused by such illegal dismissal. The petition is GRANTED. General Bank & Trust Co. v. CA, 135 SCRA 569

F: This case starts with the employment of plantiff-appellee with the Cebu Branch of the First National City Bank of New York for 18 years, where he rose to the position of Chief Clerk, Accounting Department (Exhibit 0); that on January 11, 1965, plaintiff-appellee joined the defendant bank in its Cebu branch as accountant with an annual compensation of P6,000.00 (Exhibit A); that on April 26, 1965, the Cebu Branch of defendant bank began operating and doing business with the public; that on January 1, 1966, plaintiff received an increase of P50.00 bringing his monthly salary to P550.00 (Exhibit D); that on April 11, 1967 defendant bank appointed the plaintiff to the position of Acting Manager of its Cebu Branch, with the corresponding increase of sale to P700.00 a month (Exhibit E); that effective September 1, 1967, defendant bank granted plantiff a monthly housing allowance of P200.00 in addition to his monthly salary (Exhibit F); that on October 3, 1967 defendant bank appointed plaintiff as the regular Manager of its Cebu Branch (Exhibit G) effective May 1, 1968; that defendant bank increased plaintiff's salary to P1800.00 a month (Exhibit H); that on May 16, 1969 while the plaintiff was on vacation leave, he happened to visit the bank and learned that three tellers of defendant bank's branch in Cebu City, namely, Miss Crystal Enriquez, Miss Yolanda Chu, and Miss Sonia Chiu, had been transferred to the head office in Manila by defendant Jose D. Santos; that the plantiff went to Manila on May 18, 1969 to make personal representation with the head office for the retention of the said tellers in Cebu; that on May 26, 1969 the plaintiff reported back for duty with defendant bank's branch in Cebu and reinstated immediately the three tellers to their respective positions in the Cebu branch of defendant bank; that on May 28, 1969 defendant Jose D. Santos submitted a report to defendant Salvador D. Tenorio alleging that there was excess personnel in the Cebu Branch; that on the same date defendant Jose D. Santos submitted a supplementary report to defendant Salvador D. Tenorio charging the plaintiff of over appraising the real estate offered by Domingo Chua as collateral for his credit accommodation (Exhibit 34); that defendant Salvador D. Tenorio immediately dispatched a letter to the plaintiff dated May 30, 1969 requiring him to explain within twenty-four hours why no disciplinary action should be taken against him for alleged repeated violation of defendant bank's policies and directives regarding credit accommodations and for over-appraisal of the real estate collateral for Domingo Chua's account, among others (Exhibit 8); that on June 6, 1969, the plaintiff received the said letter of defendant Salvador D. Tenorio but found it impossible to render the required explanation in 24 hours; that on June 19, 1969 defendant Jose D. Santos went to Cebu City and served plaintiff with the letter of defendant Salvador D. Tenorio, dated June 18, 1969, suspending the plaintiff; and that on July 22, 1969 plantiff was served with the order of his termination signed by defendant Clarencio S. Yujuico, dated July 18, 1969.

I: WON the dismissal of Manuel E. Batucan was justified on the ground that he repeatedly failed to uphold the interests of the bank thus leading to his employer's loss of confidence on him.

The Court of First Instance of Cebu rendered a decision, finding the dismissal of plantiff as without just cause or otherwise illegal arbitrary, oppressive and malicious, and ordering defendants to pay to the plaintiff, jointly and severally. The Court of Appeals, affirmed the decision of the lower court.

We agree with the Court of Appeals in its finding that preponderance of the evidence, however, shows that the alleged unauthorized extension of temporary over-draft or credit accommodations referred to credit accommodations which were granted by and already existing during the term of the previous management.

H: After a careful review of the case, we find no error in the finding of the Court of Appeals that Mr. Batucan was indeed illegally dismissed. The petitioners' claim that "undisputed documentary evidence show that prior to his dismissal, specifically from March 1968 to January 1969, respondent Batucan had been repeatedly cited, warned and finally threatened with dismissal by his superior, petitioner Tenorio, for his practice of granting credit accommodations without authority during his tenure." They support such claim with six memoranda addressed to Mr. Batucan, to wit: Exh. "22" dated April 17, 1968 by Tenorio; Exh. "23" dated March 12, 1968 by Tenorio; Exh. "24" dated March 14, 1968 by Tenorio; Exh. "29" dated December 9, 1968 by Tenorio; Exh. "30" dated December 27, 1968 by Tenorio; Exh. "34" dated January 28, 1969 by Tenorio. Petitioners' argument is devoid of merit. We agree with the respondent that these communications are "nothing more than routinary acts and/or privileged acts of top management officials which could not in any way affect or erode petitioners' confidence in respondent Batucan." After the first three aforecited exhibits were dispatched to Cebu on March 12, 1968, March 14, 1968, and April 17, 1968, petitioner San Luis cleared Mr. Batucan from an exceptions reported by the Central Bank examiners in connection with their examination conducted in March, 1968. In his report to the President of the bank in about the first week of March 1968, San Luis commended Mr. Batucan for the good image enjoyed by the bank in the locality because clients, customers, and depositors spoke well and highly of Mr. Batucan for his dedication, sincere and upright dealing with people. Because of such commendation, the president of the bank, the late Senator Quintin Paredes gave Mr. Batucan an increase of P100.00 in his monthly salary effective May 1, 1968. Mr. Batucan was also asked to speak at the manager's meeting on October 19, 1968 on his "Techniques in Effective solicitation of Deposits or New Accounts." Batucan was also given a free hand in the prosecution of a defalcating head teller relying on his good judgment to protect the interests of the bank. With the foregoing circumstances, we cannot reconcile the management's alleged loss of confidence in Mr. Batucan with the latter's commendations for efficient performance, his having been given an increase in salary and his being asked to speak to other colleagues on effective banking techniques shortly after the supposed loss of confidence.

Not only did the Court of Appeals establish that there were no improper credit accommodations granted during Mr. Batucan's term as manager but his competence at being able to regularize these accounts and his contributions to the improvement of the bank were clearly ascertained. There is no question that managerial employees should enjoy the confidence of top management. This is especially true in banks where officials handle big sums of money and engage in confidential or fiduciary transactions. However, loss of confidence should not be simulated. It should not be used as a subterfuge for causes which are improper, illegal, or unjustified. Loss of confidence may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. It must be genuine, not a mere afterthought to justify earlier action taken in bad faith. We now come to the issue of damages. Petitioners question the propriety of awarding moral and exemplary damages to the respondent. Under Article 2217 of the Civil Code: Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or commission. Mr. Batucan left a stable job with a reputable bank to join the petitioner bank. He had been an employee of the First National City Bank of New York for eighteen (18) years. Undoubtedly, before he accepted petitioner Tenorio's invitation, he must have thought the matter over several times. And from the time he joined the petitioner bank, the records show that Mr. Batucan has indeed worked his way up from accountant to permanent branch manager of the bank. During his term as manager, he was able to increase the income and resources of the bank. He raised the image of petitioner bank in the business and banking community and placed its operations on a good and competitive basis. His peremptory dismissal from the bank was certainly a shock to him and damaged his moral feelings and personal pride after all the loyalty and hard work he had dedicated to the bank. The only reason for his dismissal found in the records is his failure to follow top-management orders with regards to the transfer of the three tellers. Petitioners alleged it to be insubordination. Nevertheless, insubordination must be proven to justify dismissal (St. Luke's Hospital v. Ministry of Labor and Employment, 116 SCRA 240). And we do not think that his earnest efforts in making representations to retain the three tellers warrant his dimissal. A manager or supervisor must stand up for his subordinates unless the latter are guilty of wrongdoing or some conduct prejudicial to the employer. Only after as representations was Mr. Batucan questioned on the several "unauthorized credit accommodations." His failure to explain within 24 hours which, in the light of the circumstances, was too

short, caused his suspension and later, his dismissal retroactive to the date of suspension. There was no valid reason for his dismissal, much less for all the charges and accusations made against him. The dismissal followed by the efforts to justify it was tainted by bad faith or malice on the part of the petitioners who wanted Mr. Batucan removed from his post. The employer's right to dismiss his employee, however, differs from, and should not be confused with the manner in which the right is exercised. The manner in which the company exercised its right to dismiss in the case at bar was abusive; hence, it is liable for moral damages, as previously discussed. A review of the records, however, indicates that the moral and exemplary damages awarded may be somewhat excessive. Hence, in the exercise of our discretion and after considering all factors, we have decided to reduce to P20,000.00 the award for moral and exemplary damages and to P5,000.00 the award for attorney's fees. The award of P1,000.00 a month from the time Mr. Batucan's employment was terminated up to the date this case becomes final and executory is likewise excessive. At the same time, pursuant to Republic Act 1052 as amended by Republic Act 1787, which provides that in case of employment without a definite period, an employer may terminate an employee's services without just cause by serving to the employee a written notice at least one month in advance or by granting him pay equivalent to one-half month salary for every year of service, whichever is longer. Considering the facts and equities of this case, however, we have decided to limit compensatory damages to only P12,000.00, as explained above.chanroblesvirtualawlibrary chanrobles virtual law library Lastly, petitioners raise the issue that "individual petitioners, having acted in their official capacities as bank officers, did not incur any personal liability in favor of Batucan. We quote with favor the finding of the respondent Court: The evidence shows that the individual defendants acted jointly in causing the illegal and unjustifiable dimissal of the plaintiffappellee. Hence, the trial court is correct in holding the individual defendants jointly and severally liable to the plaintiff-appellee. " Clearly, the petitioners acted beyond their authority and against what the law provides. WHEREFORE, the decision appealed from is MODIFIED. Sy v. Metrobank, 506 SCRA 580

F: Petitioner Dennis D. Sy, herein substituted by his heirs Soledad Y. Sy, Ronald Allan Y. Sy, and Melinda S. Pompenada, was the branch manager in Bajada, Davao City, of respondent Metropolitan Bank and Trust Company. Under the bank’s Retirement Plan, an employee must retire upon reaching the age of 55 years or after rendering 30 years of service, whichever comes first. Sy would have rendered 30 years of service by August 18, 1999. However, on February 5, 1999, he was reappointed as branch manager for a term of one year starting August 18, 1999 until August 18, 2000. His monthly compensation was accordingly increased from P50,400 to P54,500, effective August 16, 1999. Meanwhile, on November 10 and 15, 1999, the bank released the results of the audit conducted in its Bajada branch. On November 15, 1999, Sy tendered an irrevocable letter of retirement. In his letter, he requested the timely release of his retirement pay and other benefits. His request was denied. The bank alleged that Sy allowed spouses Gorgonio and Elizabeth Ong to conduct "kiting" activities in their account with the bank. Thus, the bank placed Sy under preventive suspension and gave him 48 hours to submit a written explanation. In response, Sy wrote a letter explaining that he only made a wrong credit judgment. Not satisfied with his answer, the bank notified Sy of other alleged violations of company policies. In reply, Sy explained in writing that the accommodation granted to spouses Samuel Aquino and Charito Sy-Aquino was only P650,000, not P9.11M as claimed by the bank. He added that the spouses even offered a parcel of land as collateral and were willing to sell a vehicle in settlement of their obligation with the bank. Unconvinced, the bank dismissed Sy on December 15, 1999. Sy filed against the bank a complaint for illegal suspension, illegal dismissal and money claims, docketed as RAB-11-01-00024-0. However, the Labor Arbiter dismissed the case for lack of merit. On appeal, the National Labor Relations Commission (NLRC) deemed Sy compulsorily retired. Thus, the NLRC awarded him retirement benefits, unpaid salary, monetary value of unused leave credits, 13th month pay, Christmas bonus, and refund of provident fund. The parties sought reconsideration, which were both denied for lack of merit. Respondent bank elevated the matter to the Court of Appeals, which set aside the ruling of the NLRC and reinstated the Decision of the Labor Arbiter. On motion for reconsideration, however, the Court of Appeals modified its ruling and ordered the bank to reimburse Sy’s contribution to the provident fund.

I: (1) Was petitioner illegally terminated? (2) If his dismissal was valid, would he still be entitled to retirement benefits? H: Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollected funds in wanton violation of the bank’s policies. 19 It was sufficient basis for the bank to lose trust in him. Unlike a rank-and-file worker, where breach of trust as a ground for valid dismissal requires proof of involvement in the alleged anomaly and where mere uncorroborated accusation by the employer will not suffice, the sheer existence of a basis for believing that the employer’s trust has been breached is enough for the dismissal of amanagerial employee. Petitioner’s conduct betrays his culpability. Shortly after the audit conducted in the Bajada branch, he tendered an "irrevocable letter of retirement." In the said letter, he requested that his retirement be made effective December 1, 1999. Said request arouses suspicion considering that he had previously agreed to the extension of his employment as branch manager until August 18, 2000. Petitioner’s evident failure to offer any reasonable explanation for such sudden shift in his plans is prejudicial to his cause. As for the requirement of due process, records show that it has been fully satisfied in the instant case. The bank had complied with the two-notice requirement, i.e.: (a) a written notice of the cause for his dismissal to afford him ample opportunity to be heard and to defend himself with the assistance of counsel, if he so desires; and (b) a written notice of the decision to terminate him, stating clearly the reason therefor. Petitioner, however, theorizes that having been compulsorily retired, he could no longer be dismissed by the bank. His premise is absurd. Indeed, he would have qualified for compulsory retirement under the bank’s Retirement Plan. However, he opted to accept the bank’s offer of extending his employment for another year with a corresponding salary increase. Thus, in effect, he had never retired. Unfortunately for him, while serving such extended term, the bank discovered his unauthorized grant of accommodation to accounts engaged in "kiting" activity. Such act is a clear breach of the trust reposed in him by the bank. He cannot now elude dismissal for a just cause by claiming he was already retired compulsorily. Is petitioner nevertheless entitled to retirement benefits? Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and backwages. Since petitioner’s dismissal was for a just cause, he is not entitled to any retirement benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous banking transactions by bank employees whose

employments have been extended. Since a bank’s operation is essentially imbued with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whom it has lost trust and confidence and whose continued employment would patently be inimical to the bank’s interest. While the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit. While the Court commiserates with petitioner who has spent with the bank the best three decades of his employable life, we find no room to accord him compassionate justice. Records showed that he violated the bank policies prior to his compulsory retirement. Thus, there can be no earned retirement benefits to speak of. No such provision is provided for by the Labor Code. In fact, even the Civil Service Law imposes forfeiture of retirement benefits in valid dismissal cases. Notably, the Court has also disallowed claims for retirement benefits in valid dismissal cases because the retirement plan itself precluded employees dismissed for cause from availing it. Although no such prohibition in the retirement plan was alleged or proved in this case, we nevertheless deny petitioner’s claims because his offenses, vis-à-vis his long years of service with the bank, reflect a regrettable lack of loyalty which he should have strengthened instead of betrayed. The petition is hereby DENIED. Jardine Davies v. NLRC, 311 SCRA 289 F: Petitioner is a domestic corporation engaged in general trading, including the exclusive distribution in the country of the world-renowned “Union 76” lubricating oil manufactured by Unoco Philippines, Inc. Private respondent was a former sales representative of petitioner.

A review of the records of this case reveals that petitioner engaged the services of a private investigation agency to conduct surveillance and investigation pertinent to reports that some of petitioner’s products, particularly the “Union 76” lubricating oil, were being illegally manufactured, blended, packed and distributed. Consequently, a private investigator of the said investigation agency, confirmed that there were really fake “Union 76” lubricating oil in the market and reported further that the same were indeed being illegally manufactured, blended, packed and distributed by private respondent Virgilio Reyes. Petitioner then secured a search warrant which led to the seizure of some of the alleged fake items found in the apartment complex reportedly occupied by said private respondent.

Thereafter, a criminal complaint for violation of Article 189 on unfair competition of the Revised Penal Code [2] was filed against private respondent and others. Subsequently, private respondent was likewise charged administratively for having committed serious misconduct inimical to the interest of petitioner company. Accordingly, he was advised to go on an indefinite leave. This eventually led to his termination from employment on February 23, 1983.

Meanwhile, all the materials seized by virtue of the search warrant issued were released by order of the same court in view of a petition filed by private respondent’s younger brother, Donato Reyes. Apparently, the younger Reyes convinced the court that he was the legal tenant of the apartment complex searched and that all the materials seized are legally owned by him. He further proved that he was legally engaged in the business of general merchandising, operating under the trade name of Lubrix Conglomerate, a single proprietorship duly licensed by the government in dealing with oil and lubricant products. Furthermore, he presented the receipts covering the purchases of the seized Unoco products purposely for packing the same in small containers to be resold to the public.

Relying on the foregoing facts, private respondent sued petitioner for illegal dismissal. But the Labor Arbiter, Manuel R. Caday, dismissed his complaint. In a Decision dated September 24, 1985, the labor arbiter stated that the apartment complex allegedly occupied by private respondent was indeed the situs of the illegal manufacture, blending and packaging of “Union 76” oil and lubricating products. Convinced that private respondent was personally involved in the aforementioned illegal activity, the labor arbiter ruled that the private respondent committed an act of serious misconduct, fraud or willful breach of trust reposed in him by petitioner, a just cause for terminating employment. Private respondent appealed to the NLRC. In its Decision dated March 17, 1986, the NLRC reversed the labor arbiter’s judgment on the ground that there is no cogent reason for petitioner to lose its trust and confidence on private respondent.

I: WON public respondent committed grave abuse of discretion in reversing the labor arbiter’s judgment which found a just and valid cause for dismissal of private respondent by petitioner.

H: Petitioner’s attack on the alleged misappreciation of facts and distorted evaluation of evidence by public respondent stands, in our view, on hollow

ground. Resort to judicial review of the decisions of the National Labor Relations Commission by way of a special civil action for certiorari under Rule 65 of the Rules of Court is confined only to issues of want or excess of jurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor agency in reaching its conclusion. Neither is it for this Court to re-examine conflicting evidence, re-evaluate the credibility of the witnesses nor substitute findings of fact for those of an administrative body which has gained expertise in its specialized field. Arguably, there may even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy of certiorari.

It is beyond dispute that loss of trust and confidence constitutes a valid ground for dismissing an employee. It is settled that loss of confidence as a just cause for terminating employment must be premised on the fact that an employee concerned holds a position of trust and confidence. This situation obtains where a person is entrusted with confidence on delicate matters, such as care and protection, handling or custody of the employer’s property as in this case. But, in order to constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee concerned to be unfit to continue working for the employer. Likewise, it must be noted that proof beyond reasonable doubt is not required to dismiss an employee on the ground of loss of confidence. It is sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded of his position.

This Court, however, has repeatedly stressed that the right of an employer to dismiss employees on account of loss of trust and confidence must not be exercised arbitrarily and without showing just cause, so as not to render the employee’s constitutional right to security of tenure nugatory. Thus, although the dropping of a criminal charge for an employee’s alleged misconduct does not bar his dismissal, and proof beyond reasonable doubt is not necessary to justify the same, still the basis thereof must be clearly and convincingly established. Besides, for loss of confidence to be a valid ground for dismissal, such loss of confidence must arise from particular proven facts. In other words, this ground must be founded on facts established by the employer who must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise the dismissal will be rendered illegal.

In the case at bar, private respondent was suspended and eventually dismissed for allegedly committing fraudulent acts and unfairly competing with petitioner. To justify its administrative action, petitioner somehow grave credence to the surveillance report implicating private respondent in the illegal manufacture, blending, packing and distribution of petitioner’s products. Petitioner likewise relied on the result of the search on the apartment reportedly leased by private respondent from which alleged counterfeit “Union 76” oil products were seized. Unfortunately, these could not be deemed sufficient basis for petitioner to lose its trust and confidence on private respondent so as to justify the latter’s dismissal.

For evidently, the surveillance report is unreliable. As found by the NLRC, the conclusions therein were mere deductions not supported by any substantial corroborating evidence. Public respondent also observed that the petitioner failed to show concrete evidence to controvert the proof presented by private respondent that the packing of genuine “Union 76” oil in small containers was in support of the marketing policy of petitioner. Furthermore, as the Solicitor General points out, petitioner’s agents surprisingly did not submit to laboratory test the alleged fake merchandise seized during the search, to determine its genuineness. This deficiency could be attributed to the misstep of the private detectives who were specifically instructed to investigate precisely the reported counterfeiting of petitioner’s products.

Another virtual confirmation that petitioner lacks factual basis for its distrust of private respondent was the subsequent judicial order releasing the articles seized during the search. As it appears on record, the court believed the explanation of Donato Reyes, brother of private respondent, that he was the lessee of the aforesaid apartment. In sum, we hold that public respondent did not gravely abuse its discretion in ruling that petitioner failed to duly prove that the dismissal of private respondent was justified on account of loss of trust and confidence. Hence, private respondent’s dismissal was found illegal.

With the finding that private respondent was illegally dismissed, an award of backwages is proper. It must be emphasized, though, that jurisprudence distinguishes between employees illegally dismissed prior to the effectivity of Republic Act No. 6715 on March 21, 1989, and those whose illegal dismissals were effected after such date. Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to three (3) years without deduction or qualification, while those illegally dismissed after are granted full backwages inclusive of allowances and other benefits or their monetary equivalent from the time their actual compensation was withheld from them up to the time of their actual reinstatement.

Considering that private respondent was terminated from the service on February 23, 1983, he is entitled to backwages up to three years only, computed on the basis of his last monthly salary or pay. In addition to backwages, illegally dismissed employees are entitled to either reinstatement, if feasible, or separation pay, if reinstatement is no longer viable. Petition is DENIED for lack of merit.

Central Pangasinan Electric Cooperative c. Macaraeg | GR 145800 | Jan. 22, 2003 F: Petitioner is an electric cooperative duly organized and existing under Philippine laws. Respondent Geronima Macaraeg and Maribeth de Vera are employees of petitioner at its office in Area V, Bayambang, Pangasinan. Respondent de Vera was employed as teller whose primary duty was to accept payments from petitioner’s consumers in Bayambang and remit her collections to the cashier, herein co-respondent Geronima Macaraeg. Respondent Macaraeg’s duty was to deposit the daily collections of the office to petitioner’s account at the Rural Bank of Central Pangasinan in Bayambang. From January 1998 to January 1999, respondent de Vera accommodated and encashed the crossed checks of her sister, Evelyn Joy Estrada. Evelyn issued two hundred eleven (211) crossed checks amounting to P6, 945,128.95 payable to petitioner cooperative despite the absence of any transaction or any outstanding obligation with petitioner. In turn, respondent de Vera, with the knowledge and consent of respondent Macaraeg, paid the full value of these checks from the cash collections of petitioner. At the end of the day, respondents credited the checks as part of their collection and deposited the same together with their cash collection to the account of petitioner at the Rural Bank of Central Pangasinan. Sometime in January 1999, petitioner, through its Finance Department, noticed that several checks payable to petitioner from the collections in the Area V office were returned due to insufficiency of funds. On January 19, 1999, Josefina Mandapat, Sandra Frias and Marites Radac, petitioner’s Finance Manager, Chief Accountant and Legal Assistant, respectively, confronted respondents with their discovery. Respondent de Vera admitted that the checks were issued by her sister and that she encashed them from the money collected from petitioner’s customers. On January 21, 1999, Mrs. Josefina Mandapat submitted a memorandum to petitioner’s General Manager, Salvador M. de Guzman, detailing their findings about the bounced checks. On February 2, 1999, she submitted an addendum to her memorandum. On February 4, 1999, petitioner, through de Guzman, issued a memorandum to respondents placing them under preventive suspension and requiring them to explain in writing within forty-eight (48) hours why they misappropriated cooperative funds. In the same communication, a hearing was set on February 13, 1999 at 9:30 a.m. at the Board Room of petitioner before Atty. Teodoro Fernandez.

In their respective Answers/Explanations, respondents denied having misappropriated the funds of petitioner cooperative. They alleged that: (1) the checks that bounced were redeposited with the Rural Bank of Central Pangasinan; (2) the amount representing the face value of the checks had been used by petitioner as of December 15, 1998; (3) there was never any shortage in the cooperative money or funds in their possession; and (4) they never violated any policy of the cooperative and on the contrary, they have been very religious in remitting the funds and money of petitioner. At the scheduled hearing on February 13, 1999, respondents, with assistance of counsel, appeared before Atty. Teodoro Fernandez. Respondent de Vera testified and admitted that she encashed the checks of Evelyn Joy Estrada because the latter is her older sister and that she has a soft spot for her; that Mrs. Estrada owns a sash factory and that she merely wanted to help her sister meet her business obligations; that sometime in November 1998, Mrs. Marites Radoc, Chief Accountant of petitioner, called her attention to one check which bounced thrice; that this check was eventually replaced by her sister with cash; that despite the bouncing of some other checks, all checks were eventually funded and paid to petitioner, hence, petitioner incurred no losses in its collections; that she has worked for petitioner for nineteen (19) years and this is the first time she has been charged administratively by petitioner. Respondent Macaraeg admitted that she knew of the accommodations given by respondent de Vera to her sister; that she allowed her subordinate to do it because respondent de Vera is her kumare, and that she knew that Mrs. Estrada’s checks were sufficiently funded. She worked for petitioner for twenty-two (22) years and has never had an administrative charge. Mrs. Josefina Mandapat, Finance Manager of petitioner, testified as petitioner’s witness. She stated that she prepared a report on the findings of their accountant regarding the encashment of Evelyn Joy Estrada’s checks, and that the encashment of said checks is prohibited under an office memorandum. On March 10, 1999, Atty. Fernandez submitted his findings to the General Manager of petitioner. On March 19, 1999, on the basis of said findings and recommendation, the General Manager issued to respondents separate notices of termination, effective April 9, 1999, for “serious misconduct, and breach of trust and confidence reposed on them by management.” Respondents, with the help of the President and representative of the Union, Central Pangasinan Electric Cooperative (CENPELCO) Employees’ Association-Tupas Local Chapter No. R01-0012, questioned their dismissal before the National Conciliation and Mediation Board (NCMB). They claimed that their dismissal was without just cause and in violation of the Collective Bargaining Agreement (CBA), which requires that the case should first be brought before a grievance committee. Eventually, the parties agreed to submit the case to a voluntary arbitrator for arbitration.

On August 12, 1999, the voluntary arbitrator rendered a decision in favor of respondents. Petitioner appealed to the Court of Appeals via a petition for review. On August 17, 2000, the Court of Appeals rendered a decision dismissing the petition and affirming the decision of the voluntary arbitrator. Hence, the present course of action. I: WON the CA gravely abused its discretion in holding that petitioner illegally terminated the services of herein private respondents. H: The petition is impressed with merit. At the outset, we hold that the first issue raised in the petition pertaining to the alleged violation of the CBA grievance procedure is moot and academic. The parties’ active participation in the voluntary arbitration proceedings, and their failure to insist that the case be remanded to the grievance machinery, shows a clear intention on their part to have the issue of respondents’ illegal dismissal directly resolved by the voluntary arbitrator. We therefore find it unnecessary to rule on the matter in light of their preference to bring the illegal dismissal dispute to voluntary arbitration without passing through the grievance machinery. This leads us to the next issue of whether respondents were validly dismissed. To constitute a valid dismissal from employment, two requisites must be met, namely: (1) it must be for a just or authorized cause, and (2) the employee must be afforded due process. We hold that there exists a valid reason to dismiss both employees. Article 282(c) of the Labor Code allows an employer to dismiss employees for willful breach of trust or loss of confidence. Proof beyond reasonable doubt of their misconduct is not required, it being sufficient that there is some basis for the same or that the employer has reasonable ground to believe that they are responsible for the misconduct and their participation therein rendered them unworthy of the trust and confidence demanded of their position. To be sure, the acts of the respondents were clearly inimical to the financial interest of the petitioner. During the investigation, they admitted accommodating Evelyn Joy Estrada by encashing her checks from its funds. They did so without petitioner’s knowledge, much less its permission. These inimical acts lasted for more than a year, and probably would have continued had it not been discovered in time. All along, they were aware that these acts were prohibited by the Coop Checks Policy. Clearly, there was willful breach of trust on the respondents’ part, as they took advantage of their highly sensitive positions to violate their duties. Moreover, the acts of the respondents caused damage to the petitioner. During those times the checks were illegally encashed, petitioner was not able to fully utilize the collections, primarily in servicing its debts. In her memorandum dated January 21, 1999, Finance Manager Josefina Mandapat reported how petitioner is prejudiced. It is not material that they did not “misappropriate any amount of money, nor incur any shortage relative to the funds in their possession.” The basic

premise for dismissal on the ground of loss of confidence is that the employees concerned hold positions of trust. The betrayal of this trust is the essence of the offence for which an employee is penalized. In the case at bar, the respondents held positions of utmost trust and confidence. As teller and cashier, respectively, they are expected to possess a high degree of fidelity. They are entrusted with a considerable amount of cash. Respondent de Vera accepted payments from petitioner’s consumers while respondent Macaraeg received remittances for deposit at petitioner’s bank. They did not live up to their duties and obligations. Nor is there any doubt that petitioner observed procedural due process in dismissing the respondents. In separate memoranda dated February 4, 1999 and signed by the General Manager ( de Guzman), the respondents were both appraised of the particular acts or omissions constituting the charges against them. They gave their own “answer/explanation” to the charges. They participated in the investigation conducted at petitioner’s board room. We are aware that the respondents Macaraeg and de Vera have been employed with the petitioner for 22 and 19 years of continuous service, respectively, and this is the first time that either of them has been administratively charged. Nonetheless, it is our considered view that their dismissal is justified considering the breach of trust they have committed. Well to emphasize, the longer an employee stays in the service of the company, the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company. Considering that they have mishandled the funds of the cooperative and the danger they have posed to its members, their reinstatement is neither sound in reason nor just in principle. It is irreconcilable with trust and confidence that has been irretrievably lost. The petition is GRANTED. Mcleod v. NLRC, 512 SCRA 222 F: John F. McLeod filed a complaint for retirement benefits, vacation and sick leave benefits, non-payment of unused airline tickets, holiday pay, underpayment of salary and 13th month pay, moral and exemplary damages, attorney’s fees plus interest against Filipinas Synthetic Corporation (Filsyn), Far Eastern Textile Mills, Inc., Sta. Rosa Textiles, Inc., Patricio Lim and Eric Hu. He alleges that at the time of his retirement complainant was receiving P60, 000.00 monthly with vacation and sick leave benefits; 13th month pay, holiday pay and two round trip business class tickets on a Manila-London-Manila itinerary every three years which is convertible to cash if unused. Respondents accordingly failed to pay vacation and leave credits and requested complainant to wait as it was short of funds but the same remain unpaid at present. Respondents likewise failed to pay complainant’s holiday pay up to the present. There were more benefits which were not honored. The Labor Arbiter, held all respondents jointly and severally liable for the money claims of Mcleod. However, the NLRC reversed and made Peggy Mills as the sole entity liable for the retirement pay of Mcleod. This was affirmed by the CA.

I: WON an employer-employee relationship exists between the private respondents and the petitioner for purposes of determining employer liability to the petitioner. H: No employer-employee relationship, McLeod was a managerial employee of PMI from 20 June 1980 to 31 December 1992. McLeod could have presented evidence to support his allegation of employer-employee relationship between him and any of Filsyn, SRTI, and FETMI, but he did not. Appointment letters or employment contracts, payrolls, organization charts, SSS registration, personnel list, as well as testimony of coemployees, may serve as evidence of employee status. It is a basic rule in evidence that parties must prove their affirmative allegations. While technical rules are not strictly followed in the NLRC, this does not mean that the rules on proving allegations are entirely ignored. Bare allegations are not enough. They must be supported by substantial evidence at the very least. McLeod’s reliance on Annex M can hardly carry the day for him. Annex M, which is McLeod’s letter addressed to "Philip Lim, VP Administration," merely contains McLeod’s proposals for the grant of some benefits to supervisory and confidential employees. Contrary to McLeod’s allegation, Patricio did not sign the letter. Hence, the letter does not embody any agreement between McLeod and the management that would entitle McLeod to his money claims. Neither can McLeod’s assertions find support in Annex U. Annex U is the Agreement which McLeod and Universal Textile Mills, Inc. executed in 1959. The Agreement merely contains the renewal of the service agreement which the parties signed in 1956.

John Hancock Life Insurance Corp. v. Davis | GR 169549 | Sept. 3, 2008 F: Respondent Joanna Cantre Davis was agency administration officer of petitioner John Hancock Life Insurance Corporation. On October 18, 2000, Patricia Yuseco, petitioner's corporate affairs manager, discovered that her wallet was missing. She immediately reported the loss of her credit cards to AIG and BPI Express. To her surprise, she was informed that "Patricia Yuseco" had just made substantial purchases using her credit cards in various stores in the City of Manila. She was also told that a proposed transaction in Abenson's-Robinsons Place was disapproved because "she" gave the wrong information upon verification. Because loss of personal property among its employees had become rampant in its office, petitioner sought the assistance of the National Bureau of Investigation (NBI). The NBI, in the course of its investigation, obtained a security video from Abenson's showing the person who used Yuseco's credit cards. Yuseco and other witnesses positively identified the person in the video as respondent.

Consequently, the NBI and Yuseco filed a complaint for qualified theft against respondent in the office of the Manila city prosecutor. But because the affidavits presented by the NBI (identifying respondent as the culprit) were not properly verified, the city prosecutor dismissed the complaint due to insufficiency of evidence. Meanwhile, petitioner placed respondent under preventive suspension and instructed her to cooperate with its ongoing investigation. Instead of doing so, however, respondent filed a complaint for illegal dismissal alleging that petitioner terminated her employment without cause. The labor arbiter, in a decision dated May 21, 2002, found that respondent committed serious misconduct (she was the principal suspect for qualified theft committed inside petitioner's office during work hours). There was a valid cause for her dismissal. Thus, the complaint was dismissed for lack of merit. Respondent appealed the labor arbiter's decision to the National Labor Relations Commission (NLRC) which affirmed the assailed decision on July 31, 2003. Respondent moved for reconsideration but it was denied in a resolution dated October 30, 2003. Aggrieved, respondent filed a petition for certiorari in the Court of Appeals (CA) claiming that the NLRC committed grave abuse of discretion in affirming the decision of the labor arbiter. She claimed there was no valid cause for her termination because the city prosecutor of Manila "did not find probable cause for qualified theft against her." The dismissal of the complaint proved that the charges against her were based on suspicion. The CA, in its July 4, 2005 decision found that the labor arbiter and NLRC merely adopted the findings of the NBI regarding respondent's culpability. Because the affidavits of the witnesses were not verified, they did not constitute substantial evidence. The labor arbiter and NLRC should have assessed evidence independently as "unsubstantiated suspicions, accusations and conclusions of employers (did) not provide legal justification for dismissing an employee." Thus, the CA granted the petition. Petitioner moved for reconsideration but it was denied. Hence, this petition. I: WON petitioner substantially proved the presence of valid cause for respondent's termination. H: We grant the petition. Misconduct involves "the transgression of some established and definite rule of action, forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment."

In this case, petitioner dismissed respondent based on the NBI's finding that the latter stole and used Yuseco's credit cards. But since the theft was

not committed against petitioner itself but against one of its employees, respondent's misconduct was not work-related and therefore, she could not be dismissed for serious misconduct. Nonetheless, 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. For an employee to be validly dismissed for a cause analogous to those enumerated in Article 282, the cause must involve a voluntary and/or willful act or omission of the employee. 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. Did petitioner substantially prove the existence of valid cause for respondent's separation? Yes. The labor arbiter and the NLRC relied not only on the affidavits of the NBI's witnesses but also on that of respondent. They likewise considered petitioner's own investigative findings. Clearly, they did not merely adopt the findings of the NBI but independently assessed evidence presented by the parties. Their conclusion (that there was valid cause for respondent's separation from employment) was therefore supported by substantial evidence. All things considered, petitioner validly dismissed respondent for cause analogous to serious misconduct. Petition is hereby GRANTED.

Security and Credit Investigation v. NLRC, 350 SCRA 357 F: Private respondents Mercado, Somosot and Oliver were employed as security guards by petitioner and assigned to the CHR which was petitioner’s client. Sometime in February 1990, about eighteen (18) of petitioner’s security guards detailed at the CHR, including Mercado, Somosot and Oliver, filed a complaint for money claims against petitioner. However, upon petitioner’s request that the security guards withdraw the complaint, each of the complainants, except for Mercado, Somosot and Oliver, signed a Release and Quitclaim in favor of petitioner. Mercado averred that he was being pressured by petitioner to sign a Release and Quitclaim, so he went on leave from work on March 22, 1990. When he called petitioner’s office on the afternoon of the same day to inquire about his work assignment, petitioner’s officer-in-charge, Rogelio Vecido, informed him that he was not assigned anywhere because he was suspended from work. Somosot likewise claimed that on March 22, 1990, Mr. Igmedio Tomenio, petitioner’s shift-in-charge at the CHR, tried to pressure him to sign a Release and Quitclaim but he refused. That afternoon, Somosot learned that he had been suspended from work. When he attempted to report for work the next day, he was informed verbally that his employment was already terminated.

The next day, March 23, 1990, Mercado and Somosot filed a complaint for illegal dismissal and underpayment of wages, overtime pay, legal holiday pay, premium pay for holiday and rest day, 13th month pay, service incentive leave benefits and night differential against petitioner. The case was docketed as NLRC-NCR Case No. 00-03-01791-90. Like Mercado and Somosot, respondent Oliver asseverated that on March 27, 1990 he went to petitioner’s office to reiterate his money claims and was forced by Mr. Reynaldo Dino, petitioner’s operations manager, to sign a Release and Quitclaim. Because of his refusal to sign the same, he was not given any new assignment by petitioner. He was thus surprised to receive on March 29, 1990 a telegram from petitioner requiring him to explain his absence from work without leave from March 27, 1990. Subsequently, Oliver filed a complaint for illegal dismissal and underpayment of backwages against petitioner, which case was docketed as NLRC-NCR Case No. 00-03-01886-90. Upon motion of petitioner, the two cases were consolidated. Petitioner, on the other hand, denied that it dismissed Mercado, Somosot and Oliver and alleged that the latter abandoned their employment. Meanwhile, on February 18, 1991, petitioner filed a third-party complaint against the CHR, claiming that its failure to effect the increase in the minimum wage of respondent security guards from July 1, 1989 to March 31, 1990, was due to the failure of the CHR to promptly pay the increases in the wage rates of said guards pursuant to Section 6 of Republic Act No. 6727 (R.A. 6727). The CHR approved payment of increased wage rates only from April 16, 1990. Petitioner claimed that under R.A. 6727, the CHR was mandated to pay increased wages to the security guards commencing from July 1, 1989. The CHR denied that it was obliged to pay the increase in the wage rates of the respondent guards. It averred that R.A. 6727 is not applicable to it, because it had already been paying the respondent security guards more than P100.00 a day even before the effectivity of said law. Its decision to increase the salaries of respondent guards effective August 16, 1990 was due only to humanitarian reasons. In his Decision dated November 18, 1991 the Labor Arbiter found that there was neither dismissal by petitioner of the respondent security guards nor abandonment of employment by the latter, and that the controversy resulted from miscommunication and misapprehension of facts by the parties. The Labor Arbiter, however, ruled that there was underpayment of respondent guards’ salaries, holiday pay, premium pay for holidays and rest days, overtime pay, 13th month pay and service incentive leave benefits. All parties filed their respective appeals with the National Labor Relations Commission. In their partial appeal, respondents Mercado and Somosot argued that the Labor Arbiter erred in not finding that they were illegally dismissed and in not awarding backwages in their favor.

Petitioner, on the other hand, claimed that the Labor Arbiter erred in not finding that respondent security guards abandoned their employment, and that it is the CHR which should be held liable for the monetary award given to respondent security guards. The CHR for its part contended that the Labor Arbiter erred in not finding that R.A. 6727 does not apply to it, and in failing to appreciate the CHR’s Letter dated April 16, 1990 which stated that it was increasing the wage rates of the security guards beginning April 16, 1990. I: WON NLRC committed grave abuse of discretion amounting to lack of jurisdiction when it ruled that private respondents did not abandon their posts H: The Court finds that the NLRC committed no grave abuse of discretion in affirming the finding that petitioner did not dismiss respondent security guards, and that the latter did not abandon their employment. Both the NLRC and the Labor Arbiter found no clear proof that petitioner had in fact dismissed respondent security guards. Mercado based his claim of illegal dismissal only on the statement of officer-in-charge Mr. Vecido that he had not been assigned to any post. Similarly, Somosot relied merely on the verbal information relayed to him that he had been terminated. Oliver’s belief that he had been illegally dismissed was founded on the telegram from petitioner requiring him to explain his absence without leave which he received on March 29, 1990. None of them exerted efforts to confirm from petitioner’s office whether they had in fact been dismissed. Furthermore, petitioner denied the allegation that it terminated respondent security guards’ employment without just cause and even alleged that respondent guards abandoned their employment. Thus, absent any showing of an overt or positive act proving that petitioner had dismissed Mercado, Somosot and Oliver, their claim of illegal dismissal cannot be sustained. There being no finding that respondent security guards were illegally dismissed, there is no basis for an award of backwages in their favor. It is axiomatic that before backwages may be granted, there must be unjust or illegal dismissal from work. Neither did the NLRC find evidence to support petitioner’s allegation that Mercado, Somosot and Oliver abandoned their employment. The records reveal that their failure to report for duty was not caused by a willful and deliberate intent to abandon their employment. Rather, such failure resulted from their belief, though mistaken, that they had been suspended or terminated from work. The rule is that for abandonment to exist, two elements must concur: first, the employee must have failed to report for work or must have been absent without justifiable reason; and second, there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. The filing by Mercado,

Somosot and Oliver of their complaints for illegal dismissal negates the existence of any intention on their part to abandon their employment. On the other hand, there is merit in petitioner’s argument that there was an error in the computation of the amounts constituting underpayment of overtime pay, 13th month pay and service incentive leave benefits to respondent security guards by the Labor Arbiter, which in turn was affirmed by the NLRC. However, in computing the underpayment for overtime, 13th month and service incentive leave benefits, the Labor Arbiter erroneously included the period from September 1, 1988 to June 30, 1989 in spite of his finding that there was no underpayment in wages during said period. The Court also finds merit in petitioner’s argument that the NLRC should not have reversed the Labor Arbiter’s finding that the CHR is liable for the payment of P28,500.00 representing the differentials of respondent security guards’ wage, overtime, 13th month and service incentive leave benefits for the period July 1, 1989 to April 15, 1990. The record shows that petitioner informed the CHR regarding the increase in the wages of the security guards effective July 1, 1989, pursuant to R.A. 6727 which mandated a Twenty Five Peso (P25.00) increase in the daily wage rate in a Letter dated August 7, 1989. In its reply letter dated April 16, 1990, the CHR stated that it had approved the increase in the wages effective April 16, 1990. The CHR, however, maintains that it is not liable to pay increased wages to the security guards and claims that there is a proviso in Section 4 of R.A. 6727 which exempts employees already receiving more than P100.00 daily from receiving the P25.00 increase required under said law. The CHR argues that since the security guards were receiving P103.56 daily for the year 1989, it was not required to pay them the P25.00 per day increase under R.A. 6727. The CHR further asserts that its approved increase in the security guards’ wages from April 16, 1990 was due only to humanitarian reasons and was not an admission of any obligation to increase the same under R.A. 6727. It must be noted that both the Labor Arbiter and the NLRC found that there were discrepancies in the minimum wage prescribed under R.A. 6727 and what were actually received by respondent security guards from July 1, 1989. The rule is that the factual findings of the Labor Arbiter, when affirmed by the NLRC are accorded to great weight and respect when supported by substantial evidence, and devoid of any unfairness and arbitrariness. It is clear that the CHR is the party liable for payment of the wage increase due to respondent security guards. While petitioner, as the contractor, is held solidarily liable for the payment of wages, including wage increases, as prescribed under the Labor Code, the obligation ultimately belongs to the CHR as principal. The Labor Arbiter was therefore correct in requiring the CHR to reimburse petitioner the amount of P28, 500.00 representing the unpaid wage increases of respondent security guards for the period

July 1, 1989 to April 15, 1990. The assailed decision of the affirmed with the MODIFICATION CALS Poultry Supply v. Roco, 385 SCRA 479

F: CALS Poultry Supply Corporation is engaged in the business of selling dressed chicken and other related products and managed by Danilo Yap. On March 15, 1984, CALS hired Alfredo Roco as its driver. On the same date, CALS hired Edna Roco, Alfredo’s sister, as a helper in the dressing room of CALS. On May 16, 1995, it hired Candelaria Roco, another sister, as helper, also at its chicken dressing plant on a probationary basis. On March 5, 1996, Alfredo Roco and Candelaria Roco filed a complaint for illegal dismissal against CALS and Danilo Yap alleging that Alfredo and Candelaria were illegally dismissed on January 20, 1996 and November 5, 1996, respectively. Both also claimed that they were underpaid of their wages. Edna Roco, likewise, filed a complaint for illegal dismissal, alleging that on June 26, 1996, she was reassigned to the task of washing dirty sacks and for this reason, in addition to her being transferred from night shift to day time duties, which she considered as management act of harassment, she did not report for work. According to Alfredo Roco, he was dismissed on January 20, 1996 when he refused to accept P30,000.00 being offered to him by CALS’ lawyer, Atty. Myra Cristela A. Yngcong, in exchange for his executing a letter of voluntary resignation. On the part of Candelaria Roco, she averred that she was terminated without cause from her job as helper after serving more than six (6) months as probationary employee.red The Labor Arbiter on April 16, 1998, issued a decision dismissing the complaints for illegal dismissal for lack of merit. The Labor Arbiter found that Alfredo Roco applied for and was granted a leave of absence for the period from January 4 to 18, 1996. He did not report back for work after the expiration of his leave of absence, prompting CALS, through its Chief Maintenance Officer to send him a letter on March 12, 1996 inquiring if he still had intentions of resuming his work. Alfredo Roco did not respond to the letter despite receipt thereof, thus, Alfredo was not dismissed; it was he who unilaterally severed his relation with his employer. In the case of Candelaria Roco, the Labor Arbiter upheld CALS’ decision not to continue with her probationary employment having been found her unsuited for the work for which her services were engaged. She was hired on May 16, 1995 and her services were terminated on November 15, 1995. Edna Roco, according to the Labor Arbiter, began absenting herself on June 25, 1996. She was sent a memo on July 1, 1996 requiring her to report for work immediately, but she did not respond. In their position papers, the complainants claimed that they were not given their overtime pay, premium pay for holidays, premium pay for rest days, 13th month pay,

allowances. They were also not given their separation pay after their dismissal. The Labor Arbiter, however, denied their claims, stating that they had not substantiated the same; on the other hand, CALS presented evidence showing that complainants received the correct salaries and related benefits. The National Labor Relations Commission (NLRC), in a decision promulgated on January 17, 2000, affirmed the judgment of the Labor Arbiter. On appeal by Alfredo, Candelaria and Edna Roco to the Court of Appeals, the appellate court set aside the NLRC’s decision and ordered reinstatement of Alfredo and Candelaria Roco to their former positions without loss of seniority of rights and benefits, with full payment of backwages. However, in the case of Edna Roco, the Court of Appeals found that her appeal cannot be favorably considered as she actually abandoned her work without justification. In considering that Alfredo Roco was illegally dismissed, the Court of Appeals relied on his allegation that on January 20, 1996 when he reported for work, following his leave of absence from January 10 to 18, 1996, he learned from Elvie Acantelado, a secretary of Danilo Yap that he was already separated from his employment. I: WON there was illegal dismissal by CALS

H: From the facts established, we are of the view that Alfredo Roco has not established convincingly that he was dismissed. No notice of termination was given to him by CALS. There is no proof at all, except his self-serving assertion, that he was prevented from working after the end of his leave of absence on January 18, 1996. In fact, CALS notified him in a letter dated March 12, 1996 to resume his work. Both the Labor Arbiter and the NLRC found that Alfredo, as well as Candelaria Roco, was not dismissed. Their findings of fact are entitled to great weight. With respect to Candelaria Roco, there is no dispute that she was employed on probationary basis. She was hired on May 16, 1995 and her services were terminated on November 15, 1995 due to poor work performance. She did not measure up to the work standards on the dressing of chicken. The Labor Arbiter sustained CALS in terminating her employment. The NLRC affirmed the Labor Arbiter’s ruling. The Court of Appeals did not disagree with the NLRC’s finding that Candelaria was dismissed because she did not qualify as a regular employee in accordance with the reasonable standards made known by the company to her at the time of her employment.

CALS argues that the Court of Appeals’ computation of the 6-month probationary period is erroneous as the termination of Candelaria’s services on November 15, 1995 was exactly on the last day of the 6-month period. We agree with CALS’ contention as upheld by both the Labor Arbiter and the NLRC that Candelaria’s services was terminated within and not beyond the 6-month probationary period. As there is no mention of the basis of the above order, we may assume it was the temporary payroll authority submitted by the petitioner showing that the private respondent was employed on probation on February 16, 1978. Even supposing that it is not self-serving, we find nevertheless that it is self-defeating. The six-month period of probation started from the said date of appointment and so ended on August 17, 1978, but it is not shown that the private respondent’s employment also ended then; on the contrary, he continued working as usual. Under Article 282 of the Labor Code, ‘an employee who is allowed to work after a probationary period shall be considered a regular employee.'’ Hence, Pilones was already on permanent status when he was dismissed on August 21, 1978, or four days after he ceased to be a probationer. WHEREFORE, our Resolution of April 1, 2002 denying the petition is hereby SET ASIDE and another one entered REVERSING the decision of the Court of Appeals insofar as it ruled in favor of herein respondents and the decisions of the Labor Arbiter and the National Labor Relations Commission REINSTATED. Jardine Davies v. NLRC, 225 SCRA 757

Nature: The instant Petition for Certiorari seeks the reversal of the resolution of respondent National Labor Relations Commission, dated 22 July 1992, which declared private respondent Salvador Salutin as not having abandoned his work by his alleged failure to report for work during the pendency of the petitioner's appeal before the respondent Commission.

F: Respondent Salvador Salutin ["Salutin"] was employed by petitioner Jardine Davies, Inc. ["JDI"] on 15 July 1985, as a demonstrator/agronomist to provide services relating to, and to give advice on, the promotion and use of JDI's pesticides and other products. The controversy that spawned two [2] special civil actions for certiorari [this instance included] with this Court, began when respondent Salutin filed a complaint against petitioner JDI for illegal dismissal, with prayer for reinstatement and backwages or, in the alternative, separation pay plus wage differential, service incentive leave pay, thirteenth [13th] month pay, holiday pay, moral and exemplary

damages, and attorney's fees. The complaint was decided by the Labor Arbiter in favor of respondent Salutin. JDI appealed the case to the National Labor Relations Commission [NLRC], and it posted a supersedeas bond to answer for the monetary awards. It also reinstated Salutin, "on payroll only", beginning 26 August 1991, in compliance with the writ of execution issued by the Labor Arbiter pursuant to Article 223, paragraph 3, of the Labor Code. In a Decision dated 17 October 1991, NLRC dismissed JDI's appeal for lack of merit but modified the decision by eliminating the awards given for holiday pay, service incentive leave pay, moral and exemplary damages. A motion for reconsideration was filed which was denied in NLRC's resolution of 13 January 1992.

On 14 February 1992, JDI filed its first petition for certiorari with this Court, docketed as G. R. No. 103720, assailing the 17 October 1991 decision and the resolution of 13 January 1992 of respondent Commission. In Our Resolution dated 26 February 1992, the petition was dismissed for failure to comply with this Court's Circular No. 28-91 on forum-shopping. Its subsequent motion for reconsideration was itself denied on 20 May 1992. The Resolution of 26 February 1992 became final and executory on 19 June 1992, and an entry of judgment was accordingly made on 20 August 1992.

At the time when the above narrated events were still unfolding, some material facts occured beginning with JDI's appeal to the NLRC on the 08 August 1991 decision of the Labor Arbiter. Shortly after the reinstatement of Salutin "on payroll only", JDI sent a letter dated 21 September 1991, to Salutin directing him to report for work to their Bacolod Branch Manager. Salutin, as directed, reported on the 24th of September 1991 at around 9:20 a.m. He did not stay long, however, since after fifteen minutes or so, he left and was reported not to have thereafter returned for work. JDI forthwith stopped further payment of salary to Salutin.

On 17 October 1991, JDI filed a "Manisfestation and Motion" with the respondent Commission stating that Salutin be considered as having abandoned his work considering his continuous absence of more than three (3) weeks since he was required to report for work and that any award for reinstatement to his former position, without loss of seniority and other rights, in the Arbiter's decision subject of this appeal be considered and held as waived or lost. Salutin opposed the motion, claiming that he was forced to leave in haste because he was then suffering from a serious ailment. He submitted a medical certificate to support his claim.

On 13 January 1992, respondent Commission denied JDI's "Manifestation & Motion" stating, among other things as to the issue of whether the complaint-appellee Salvador Salutin is guilty of work abandonment, this is a new and factual matter which has to be determined and resolved in appropriate proceedings before the Arbitration Branch, more especially in the present case, where the charge of abandonment is seriously controverted.

I: Is Salutin, who was then on payroll reinstatement since 26 August 1991, not guilty of abandonment when his failure to report for work was because he was also working for another entity from 01 September 1991 to 31 December 1991? Correlatively, did respondent Commission not gravely abuse its discretion when it did not take into consideration such other employment?

H: The answer is in the negative. The records show that at the time JDI filed its Manifestation and Motion dated 17 October 1991, the sole basis of its prayer for a declaration that Salutin abandoned his work was his alleged unauthorized absences from the date he was notified to report for work. A shift to a new focus took place when, on 30 January 1992, JDI, at its request, received a letter-certification issued by the Officer-in-Charge of King's Enterprises of Iloilo City that Salutin was employed by Monsato Philippines, Inc., from 01 September to 31 December 1991, as Aggressive Crop Technician, for which he was paid P5,146.00 per month. Thus, this was the reason given by JDI in its ex parte motion dated 16 June 1992, to set for hearing the Manifestation and Motion of 17 October 1991. NLRC denied the said ex parte motion in the now assailed resolution of 22 July 1992.

When JDI filed its first petition for certiorari [in G. R. No. 103720] with this Court on 14 February 1992, assailing the 17 October 1991 decision of NLRC, it also raised, as an added argument on the alleged abandonment of work by Salutin, the fact that he was gainfully employed elsewhere. Considering that this matter was thus already taken up by the petitioner in its first petition for certiorari, which this Court dismissed with finality, the petitioner should really now be barred from invoking anew that issue in this present [second] petition.

Be that as it may, the same fate of dismissal is still inevitable. Although this Court is not a trier of facts, it may still wade through the records of a case if only to prevent any possible misgiving in its ultimate disposition.

The petitioner's evidence to establish Salutin's supposed abandonment of work is the certification of employment issued by King's Enterprises at the request of herein petitioner to the effect that Salutin had indeed been employed by Monsato Philippines, Inc., during the period from 01 September to 31 December 1991. For abandonment to constitute a valid cause for termination of employment there must be a deliberate unjustified refusal of the employee to resume his employment. This refusal must be clearly shown. Mere absence is not sufficient; it must be accompanied by overt acts pointing to the fact that the employee simply does not want to work anymore. Abandonment of position is a matter of intention expressed in clearly certain and unequivocal acts. In this instance, however, certain uncontroverted facts show just exactly the opposite. Hence, Salutin did report, as directed, on 24 September 1991, but that he could not stay long because he was ailing at that time; he, although perhaps belatedly made, did seek medical consultation on 7 November 1991, at the Corazon Locsin Montelibano Memorial Regional Hospital, for "peptic ulcer"; and on 11 December 1991, he did, in fact, manifest his desire to assume his work with the petitioner.

This Court's Resolution of 26 February 1992, denying the petition in G. R. No. 103720, became final and executory on 19 June 1992. Respondent Salutin's interim employment, stressed by the petitioner, did not stain the picture at all. The petition is hereby dismissed.

GSP Manufacturing Corp. v. Cabanban | GR 150454 | July 14, 2006

F: Respondent Paulina Cabanban worked with petitioner GSP Manufacturing Corporation (GSP) as a sewer from February 7, 1985 until her alleged termination on March 1, 1992. On June 16, 1992, respondent filed with the National Labor Relations Commission (NLRC), National Capital Region Arbitration Branch, a complaint against petitioners for illegal dismissal, non-payment of holiday pay, service incentive leave pay and 13th month pay. Respondent claimed she was terminated by petitioners because she failed to dissuade her daughter from continuing her employment at the Sylvia Santos Company, a business competitor of petitioners. In their defense, petitioners argued that respondent abandoned her work on March 14, 1992 and that they reported this to the Department of Labor and Employment on May 15, 1992.

On May 7, 1993, labor arbiter Melquiades Sol D. del Rosario found petitioners guilty of illegal dismissal. Petitioners appealed to the NLRC. On August 10, 1995, the NLRC issued a resolution affirming in toto the decision of the labor arbiter. Hence, this petition.

served with a notice of petitioners’ memorandum terminating their services for abandonment of work.

I: WON the findings of fact of the Court of Appeals were arrived at arbitrarily

Petitioners, in their answer, denied respondents’ allegations. They claimed that on July 20, 1998, about 2:45 o’clock in the afternoon, 13 rankand-file employees staged a walk-out and abandoned their work. Among them were respondents Wilfredo Toribio, Nida Toribio, Yolanda Lorenzo, Sorraya Amping, Vivian Mendoza, Merylene Delos Reyes, Arnold Francisco, and Manuel Francisco. As a consequence, petitioners’ business operations were interrupted and paralyzed, prompting them to issue a memorandum suspending respondents for one week or from July 22 to 28, 1998. However, on July 24, 1998, petitioners, in another memorandum, directed them to report for work on July 27, 1998. Instead, respondents Ernesto Etrata, Sorraya Amping, Yasher Taning, Yolanda Lorenzo, Merylene Delos Reyes, and Wilfredo Toribio submitted their resignation letters and quitclaims. Subsequently or on July 28, 1998, petitioners sent respondents Arnold Francisco, Nida Toribio, Vivian Mendoza, and Manuel Francisco a notice terminating their services for abandonment of work.

H: The petition is without merit. As petitioners are well aware of, factual findings of the NLRC, particularly when they are in agreement with those of the labor arbiter, are deemed binding and conclusive on this Court. As long as their decisions are devoid of any unfairness or arbitrariness in their evaluation of the evidence all that is left for us to do is stamp our affirmation and declare its finality. Having perused the records, we find no such arbitrariness here. We would like to reiterate some salient points laid down in our prior pronouncements concerning abandonment of employment. Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. The records are bereft of proof that petitioners even furnished respondent such notice. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. The filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment. Clearly, petitioners’ claim that respondent’s complaint was "an afterthought," having been filed a long time after the date of the supposed abandonment, was utterly without merit. As the Court of Appeals correctly pointed out, citing the case of Pare v. NLRC, respondent had four years within which to institute her action for illegal dismissal. Compared to the six months it took the aggrieved employee in that case to file his complaint for illegal dismissal, respondent’s 84 days was not unreasonably long at all. The petition is hereby DENIED. Shie Jie Corp. v. NFL, GR 153148, July 15, 2005 F: Respondents, in their complaint, alleged that they were employed as fish processors by petitioners. On July 20, 1998, Sammy Yang and Michael Yang, petitioners, confronted them about their union activities. Immediately, they were ordered to go home. The next day, petitioners suspended them for one week effective July 22 to 28, 1998 (except respondent Wilfredo Toribio). Upon their return, they were

On August 20, 1999, the Labor Arbiter rendered a Decision finding respondents guilty of unfair labor practice (for dismissing petitioners illegally); and ordering them, jointly and severally, to pay petitioners P843, 960.62. On appeal, the National Labor Relations Commission (NLRC) promulgated its Decision dated April 27, 2000 reversing the Labor Arbiter’s Decision and dismissing respondents’ complaint. Respondents then filed a motion for reconsideration but were denied by the NLRC in a Resolution dated June 29, 2000. Hence, they filed with the Court of Appeals a petition for certiorari. On November 29, 2001, the Appellate Court rendered a Decision reversing and setting aside the NLRC’s Decision and reinstating the Labor Arbiter’s Decision. On December 21, 2001, petitioners filed a motion for reconsideration, but were denied by the Appellate Court in a Resolution dated April 9, 2002.

I: WON the CA erred in holding that petitioners failed to prove by substantial evidence that respondents voluntarily resigned and/or abandoned their work.

H: Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment. Acceptance of a

resignation tendered by an employee is necessary to make the resignation effective. No such acceptance, however, was shown in the instant case.

Moreover, the fact that respondents immediately filed a complaint for illegal dismissal against petitioners and repudiated their alleged resignation completely negated petitioners’ claim that they voluntarily resigned.

declaring as illegal the constructive dismissal of privaterespondents and ordered their reinstatement, payment ofbackwages, salary differentials and proportionate 13th monthpay and service incentive leave pay. On appeal, the NationalLabor Relations Commission (NLRC) affirmed the decision of theLabor Arbiter, but set aside the award of service incentive leave on the ground that private respondents were not entitledthereto as they were piece-rate workers. Petitioners moved forreconsideration, but it was denied. Hence, the present petition. ISSUE: WON the dismissal of private respondents was a constructive dismissal or an illegal dismissal

In Molave Tours Corporation vs. National Labor Relations Commission, it was held: “By vigorously pursuing the litigation of his action against petitioner, private respondent clearly manifested that he has no intention of relinquishing his employment, which act is wholly incompatible to petitioner’s assertion that he voluntarily resigned.”

Neither do we find any indication that respondents have shown by some overt acts their intention to sever their employment in petitioner company.

In this case, respondents did not report back for work on July 27, 1998 because they were suspended by petitioners for one week effective July 22 to 28, 1998. Verily, their absence cannot be considered abandonment of work, a just cause for termination of employment.

In fine, considering that respondents did not abandon their work, their dismissal from the service is illegal. The petition is DENIED. MARK ROCHE V NLRC 313 SCRA 356 BELLOSILLO; August 31, 1999 FACTS - On different dates, private respondents filed separatecomplaints for underpayment of wages and non-payment ofovertime pay against petitioners Mark Roche International(MRI), Eduardo Dayot and Susan Dayot. Private respondentssought the assistance of a labor organization which helpedthem organize the Mark Roche Workers Union (MRWU).Apparently irked by the idea of a union within the company,petitioners ordered private respondents to withdraw the petitionand further threatened them that should they insist in theorganization of a union they would be dismissed. Unfazed,private respondents refused. As expected, private respondentswere discharged from work. Petitioners disclaimed knowledgeof any deficiency owing to private respondents since all thebenefits due them as required by law were fully paid, exceptovertime pay which they were not entitled to on account oftheir being piece-rate workers. The Labor Arbiter rendered hisdecision

HELD - Constructive dismissal or a constructive discharge has beendefined as a quitting because continued employment isrendered impossible, unreasonable or unlikely, as an offerinvolving a demotion in rank and a diminution in pay. In theinstant case, private respondents were not demoted in rank northeir pay diminished considerably.They were simply toldwithout prior warning or notice that there was no more work forthem.After receiving the notice of hearing of the petition forcertification election on 27 October 1992, petitioners immediately told private respondents that they were no longer employed. Evidently it was the filing of the petition forcertification election and organization of a union within thecompany which led petitioners to dismiss private respondentsand not petitioners' allegations of absence or abandonment byprivate respondents.The formation of a labor union has never been a ground for valid termination, and where there is anabsence of clear, valid and legal cause, the law considers the termination illegal. *** In case of employees’ money claims, the employer bears the burden to prove that employees have received their wages and benefits and that the same were paid in accordance with law. It is incumbent upon the employer to present the necessary documents to prove such claims. In their position paper, petitioners failed to present necessary documentary evidence to substantiate their allegation that private respondents’ money claims were fully paid. They cannot use the absence of trial as an excuse for their failure as they could have presented documentary evidence at any time before the Labor Arbiter and, on appeal, before the NLRC. Hence, they cannot at this late stage bewail that they were not afforded due process. As correctly held by the NLRC, private respondents as piece-rate employees are not entitled to service incentive leave pay as well as holiday pay even if they are entitled to other benefits like COLA and 13th month pay. Service incentive leave pay shall not apply to employees whose performance is unsupervised by the employer, including those who are paid in a fixed amount for performing work irrespective of the time consumed in the performance thereof.[7] This Court finds that private respondents Eileen Rufon, Lilia Briones, Beatriz Managaytay, Delia Arellano, Anita Marcelo, Rio Mariano, Marissa Sadili, Wilma Patacay, Estrella Mallari, Delia Laroya and Divina Villarba were illegally dismissed - not merely illegally constructively dismissed - by

petitioners Mark Roche International and/or Eduardo Dayot and Susan Dayot, and to this extent, the assailed Decision of public respondent National Labor Relations Commission affirming that of the Labor Arbiter, is MODIFIED. However, it is AFFIRMED insofar as it ordered the reinstatement of private respondents with back wages, salary differentials and 13th month pay. The service incentive leave pay awarded by the Labor Arbier but deleted by the National Labor Relations Commission is likewise DELETED. E. RAZON, INC. [formerly known as Metro Services, Inc.], vs. THE HONORABLE SECRETARY OF LABOR AND EMPLOYMENT (DOLE) and MARINA PORT SERVICES, INC. (MARINA), G.R. No. 85867 May 13, 1993 FACTS: ERI became Metro Port Services, Inc. (MPSI) in 1978 when parties close to then Presient Marcos, specifically his brother-in-law, Alfredo "Bejo" Romualdez, allegedly coerced Enrique Razon, who owned 93% of ERI's equity, into endorsing in blank stock certificates covering 60% of such equity. Upon the expiration of the management contract in 1978, it was extented to June 30, 1980. The PPA then executed a new contract with ERI/MPSI for a term of eight (8) years beginning July 1, 1980 two years before the expiration of the eight-year term, the PPA cancelled the management contract for alleged violations thereof. PPA took over the cargo-handling operations as well as all the equipment of MPSI. PPA issued a Permit. The permit, which was to take effect for one-year period or until July 20, 1987, 1 contained the following pertinent paragraph as part of the additional terms and conditions: Labor and personnel of previous operator, except those positions of trust and confidence, shall be absorbed by grantee. Labor or employees benefits provided for under existing CBA shall likewise be honored. MARINA began the arrastre services and required all workers of ERI/MPSI to accomplish individual information sheets. Weeks later, the bulk of the 2,700 employees concerned discovered that they had been hired by MARINA as new employees effective July 21, 1986. Hence, they clamored for the payment of their separation pay but both the MARINA and ERI/MPSI refused to be liable therefor. In a bid to prevent disruption of work, PPA authorized MARINA to deduct P2,000,000.00 from the amount due the MPSI as MARINA's rentals for MPSI equipment, as partial payment of the employees' separation pay The employees who were members of the Associated Workers Union (AWU) filed a notice of strike on October 12, 1987. This move prompted the PPA, MARINA, ERI, and representatives of the AWU, Associated Port Checkers Workers Union (ASTEU), and Marina Management Employees (MARINE ME) to meet and forge an Agreement on November 3, 1987 for the "immediate and reasonable resolution of the long standing claim of separation benefits which resulted in impending labor strikes". The agreement provided that

the separation benefits would be computed at "one (1) month for every year of service". MPSI then requested the Secretary of Labor and Employment to immediately assume jurisdiction over the dispute to prevent paralyzation of the vital operations of the Port of Manila. Invoking Article 263(g) of the Labor Code, then Secretary of Labor Franklin M. Drilon issued the order of December 23, 1987 holding that the labor dispute was "imbued with national interest" and ordering the striking workers to return to work within 24 hours and the management to accept them back. He also directed the parties to comply faithfully with the Agreement of November 3, 1987 and, pending the appraisal of the reasonable rental and market value of the MPSI equipment, the amount of P5 million which the Presidential Commission on Good Government (PCGG) had committed to unfreeze from the account of MPSI was made available. He also directed the National Conciliation and Mediation Board to form a committee to monitor and assist in the implementation of the November 3, 1987 Agreement. The separation pay of the workers was later taken from the proceeds of the sale to PPA of ERI cargo-handling equipment and the rentals from July 21, 1986 to January 29,1988 of MARINA for the said equipment. ISSUE: whether or not separation pay should be paid to the workers of ERI/MPSI. The controversy actually is: which of the contending corporations, petitioner ERI/MPSI or private respondent MARINA, should pay such benefit to the employees concerned. RULING: Separation or severance pay is an allowance usually based on length or service that is payable to an employee on severance except usually in case of disciplinary discharge, or as compensation due an employee upon the severance of his employment status with the employer (Marcopper Mining Corporation vs. NLRC, 200 SCRA 167 [1991]). Under Article 283 of the Labor Code, separation pay is required where the termination of employment relationship is occasioned by the "cessation of operations" of an establishment. The said article, therefore, puts the burden of paying separation pay on ERI/MPSI, the employer for whom services had been rendered by the employees who were separated from employment in view of the cessation of its business operations by the cancellation of its management contract with the PPA. Petitioner, however, argues otherwise and would shift liability for separation pay to MARINA on the strength of Paragraph 7 of the additional terms and conditions appended to the permit to operate granted to MARINA. By absorbing ERI/MPSI employees and honoring the terms and conditions in the collective bargaining agreement between ERI/MPSI and the employees, MARINA did not assume the responsibility of ERI/MPSI to pay separation pay to its employees. As correctly put by public respondent, Paragraph 7, insofar as it refers to employees' benefits, should be applied prospectively with respect to MARINA. This conclusion is supported by Paragraph 14 of Permit No. 104286 granted to MARINA which states: 14. Grantee shall be responsible for all obligations, liabilities or claims arising

out of any transactions or undertakings in connections with their cargo handling operations as of the actual date of transfer thereof to grantee. MARINA might have been impelled not only by compassion for the employees but also by their tested skills in hiring them back upon their separation from the employment of ERI/MPSI. The situation in this case is completely different from that obtaining in Filipinas Port Services, Inc. vs. NLRC (200 SCRA 773 [1991]), where the petitioner was obligated "not only to absorb the workers of the dissolved companies but also to include the length of service earned by the absorbed employees with their former employers as well" because said case involved a merger of different companies into a single company as a result of the PPA's integration of stevedoring/arastre services. On the other hand, in the case at bar, there is no privity of contract between ERI/MPSI and MARINA so as to make the latter a common or even substitute employer that it should be burdened with the obligations of the former. DISMISSED.

performance as sales supervisor was far from encouraging. His attendance and punctuality were likewise very poor. To top it all, Diasnes did not at all report for work from October 12, 1996 to November 11, 1996. Bandag, through supervisor Rico, addressed a show-cause letter-memorandum to Diasnes: SUBJECT: Habitual tardiness and Absenteeism. Then, he was terminated. ISSUE: WHETHER OR NOT A VALIDLY AND LEGALLY SEPARATED EMPLOYEE MAY BE ENTITLED TO SEPARATION PAY.

Diasnes received a memorandum from his supervisor, Loreto C. Rico, relieving him from his duties as sales manager of Region VIII. Two days after, Diasnes received a notice to appear before the Employee Adjudication Committee on January 9, 1996 to resolve the matter of his relief. After the meeting, the committee issued the following report and recommendations: The committee unanimously agreed that SM-OIC Prudencio Diasnes be: Relieved for three (3) months. This will give him enough time to help his wife's problem; After the period lapsed he may return to work, but with another position or function; if he desire[s] to retire from the company separation/retirement pay may be granted to him.

RULING: The petition has merit. We agree with Bandag that the report of its Employee Adjudication Committee recommending the grant to Diasnes of separation pay in case he opts to retire or voluntarily leave the company was merely in the nature of an offer. Contrary to the perception of the labor arbiter and the CA, the offer was not an open-ended arrangement which Diasnes was free to accept or reject when convenient. We also agree with the NLRC's October 29, 1999 Decision where it held that Diasnes failed to prove that Bandag regularly grants separation pay to dismissed employees, as a policy, and without regard as to the cause of dismissal. Absent substantial proof to the contrary, we refuse to disturb the factual findings of the NLRC. LA erred in awarding separation pay based on social justice. The only cases when separation pay shall be paid, although the employee was lawfully dismissed, are when the cause of termination was not attributable to the employee's fault but due to: (1) the installation of labor saving devices, (2) redundancy, (3) retrenchment, (4) cessation of employer's business, or (5) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees (Articles 283 and 284, Labor Code.) Other than these cases, an employee who is dismissed for a just and lawful cause is not entitled to separation pay even if the award were to be called by another name.[10] Separation pay is likewise awarded in lieu of reinstatement if reinstatement is no longer feasible, as when the relationship between the employer and employee has become strained. But where the cause of the separation is more serious than mere inefficiency, the generosity of the law must be more discerning. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. This is no longer mere incompetence but clear dishonesty. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct, while inept, is not depraved. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises, the situation is changed completely. This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified.

Diasnes, however, did not avail himself of any of the options set forth in the committee's report and recommendations, but requested a Cebu City assignment which his employer granted. In Cebu City, Diasnes'

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

CENTRAL PHILIPPINES BANDAG RETREADERS, INC., VS. PRUDENCIO J. DIASNES. [G.R. No. 163607, July 14, 2008] FACTS: Respondent Prudencio J. Diasnes was initially hired by petitioner Central Philippines Bandag Retreaders, Inc. (Bandag) as technical service representative for the Visayas and Bicol areas. In the course of his employment with Bandag, Diasnes was able to show his strengths and received numerous awards and citations. In 1995, Diasnes received a promotional appointment as sales manager/officer-in-charge and was assigned to manage Eastern Visayas Retreaders, Inc. based in Tacloban City, with a service area covering the whole of Region VIII. It was at this latest posting that Diasnes' work performance started to deteriorate. From July to September in 1995, six (6) company-issued checks were dishonored for causes attributable to Diasnes and for which he was suspended for six (6) days. It was also during this two-month stretch that his absences and tardiness became more frequent.

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.

employee who is dismissed for a just and lawful cause is not entitled to separation pay even if the award were to be called by another name.”

The attendant circumstances in the present case considered, we are constrained to deny Diasnes separation pay since the cause for the termination of his employment amounts to gross and habitual neglect of his duties. His repeated and continuous absences without prior leave and his frequent tardiness within the last two months prior to his dismissal exemplify his utter disregard for his employment and his employer's interest. Diasnes' character is also put into question if we take into consideration that he should have been dismissed as early as January 1996, if not for Bandag's benevolence and goodwill. It is unthinkable to award separation pay or financial assistance to an unworthy employee who exploited and took advantage of his employer's past generosity and accommodation. REVERSED and SET ASIDE.

c) In some cases, as a measure of social justice. As held by the Court in PLDT vs. NLRC (August 23, 1988) – “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.”

CENTRAL PHILIPPINES BANDAG RETREADERS, INC. vs.PRUDENCIO J. DIASNES (G.R. No. 163607, July 14, 2008) which deals with Separation Pay. The issue in this case was WHETHER OR NOT A VALIDLY AND LEGALLY SEPARATED EMPLOYEE MAY BE ENTITLED TO SEPARATION PAY. In resolving said issue the Supreme Court gave a very helpful discussion of the topic, the main points of which I shall try to outline below: 1. Definition of separation pay. Separation pay is defined as “the amount that an employee receives at the time of his severance and is designed to provide an employee with the wherewithal during the period he is looking for another employment.” 2. When is separation pay authorized? a) In situations dealt with in Art. 283 (Closure of Establishment and Reduction of Personnel) and 284 (Disease as Ground for Termination) of the Labor Code, but not in terminations of employment based on instances enumerated in Art. 282 (Just Causes for Termination by Employer). As held by the Court in Eastern Paper Mills, Inc. v. NLRC (February 24, 1989) – “The only cases when separation pay shall be paid, although the employee was lawfully dismissed, are when the cause of termination was not attributable to the employee’s fault but due to: (1) the installation of labor saving devices, (2) redundancy, (3) retrenchment, (4) cessation of employer’s business, or (5) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his coemployees (Articles 283 and 284, Labor Code.) Other than these cases, an

b) In lieu of reinstatement if reinstatement is no longer possible, as when the relationship between the employer and employee has become strained.

In the above-mentioned case the SC concluded its discussion of separation pay with these strong words: “It is unthinkable to award separation pay or financial assistance to any unworthy employee who exploited and took advantage of his employer’s past generosity and accomodation.” Thus, it denied Diasnes separation pay “since the cause for the termination of his employment amounts to gross and habitual neglect of his duties.”* PHILIPPINE DAILY INQUIRER, INC., v. LEON M. MAGTIBAY, JR. and PHILIPPINE DAILY INQUIRER EMPLOYEES UNION (PDIEU), July 24, 2007 FACTS: PDI hired Magtibay, on contractual basis, to assist, for a period of five months from February 17, 1995, the regular phone operator. Before the expiration of Magtibay’s contractual employment, he and PDI agreed to a fifteen-day contract extension, or from July 17, 1995 up to July 31, 1995, under the same conditions as the existing contract. After the expiration of Magtibay’s contractual employment, as extended, PDI announced the creation and availability of a new position for a second telephone operator who would undergo probationary employment. Apparently, it was PDI’s policy to accord regular employees preference for new vacancies in the company. Thus, Ms. Regina M. Layague, a PDI employee and member of respondent PDI Employees Union (PDIEU), filed her application for the new position. However, she later withdrew her application, paving the way for outsiders or non-PDI employees, like Magtibay in this case, to apply. After the usual interview for the second telephone operator slot, PDI chose to hire Magtibay on a probationary basis for a period of six (6) months. The signing of a written contract of employment followed. A week before the end the agreed 6-month probationary

period, PDI officer Benita del Rosario handed Magtibay his termination paper, grounded on his alleged failure to meet company standards. Aggrieved, Magtibay immediately filed a complaint for illegal dismissal and damages before the Labor Arbiter. PDIEU later joined the fray by filing a supplemental complaint for unfair labor practice. Magtibay anchored his case principally on the postulate that he had become a regular employee by operation of law, considering that he had been employed by and had worked for PDI for a total period of ten months, i.e., four months more than the maximum six-month period provided for by law on probationary employment. He also claimed that he was not apprised at the beginning of his employment of the performance standards of the company, hence, there was no basis for his dismissal. Finally, he described his dismissal as tainted with bad faith and effected without due process. PDI, denied all the factual allegations of Magtibay, adding that his previous contractual employment was validly terminated upon the expiration of the period stated therein. Pressing the point, PDI alleged that the period covered by the contractual employment cannot be counted with or tacked to the period for probation, inasmuch as there is no basis to consider Magtibay a regular employee. PDI additionally claimed that Magtibay was dismissed for violation of company rules and policies, such as allowing his lover to enter and linger inside the telephone operator’s booth and for failure to meet prescribed company standards which were allegedly made known to him at the start through an orientation seminar conducted by the company. LA found for PDI and accordingly dismissed Magtibay’s complaint for illegal dismissal. LA further ruled that Magtibay’s dismissal from his probationary employment was for a valid reason. ISSUE: THE COURT OF APPEALS COMMITTED GRAVE ERROR IN FINDING THAT A PROBATIONARY EMPLOYEE’S FAILURE TO FOLLOW AN EMPLOYER’S RULES AND REGULATIONS CANNOT BE DEEMED FAILURE BY SAID EMPLOYEE TO MEET THE STANDARDS OF HIS EMPLOYER THUS EMASCULATING PETITIONER’S RIGHT TO CHOOSE ITS EMPLOYEES. RULING: We GRANT the petition. This Court, to be sure, has for a reason, consistently tended to be partial in favor of workers or employees in labor cases whenever social legislations are involved. Management and labor, or the employer and the employee are more often not situated on the same level playing field, so to speak. Recognizing this reality, the State has seen fit to adopt measures envisaged to give those who have less in life more in law. Article 279 of LC which gives employees the security of tenure is one playing field leveling measure: 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. x x x. Within the limited legal six-month probationary period, probationary employees are still entitled to security of tenure. It is expressly provided in the afore-quoted Article 281 that a probationary employee may be

terminated only on two grounds: (a) for just cause, or (b) 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. Magtibay had previously worked for PDI as telephone operator from February 7, 1995 to July 31, 1995 as a contractual employee. Thus, the Court entertains no doubt that when PDI took him in on September 21, 1995, Magtibay was already very much aware of the level of competency and professionalism PDI wanted out of him for the entire duration of his probationary employment. PDI was only exercising its statutory hiring prerogative when it refused to hire Magtibay on a permanent basis upon the expiration of the six-month probationary period. This was established during the proceedings before the labor arbiter and borne out by the records and the pleadings before the Court. When the NLRC disregarded the substantial evidence establishing the legal termination of Magtibay’s probationary employment and rendered judgment grossly and directly contradicting such clear evidence, the NLRC commits grave abuse of discretion amounting to lack or excess of jurisdiction. It was, therefore, reversible error on the part of the appellate court not to annul and set aside such void judgment of the NLRC. REVISED and SET ASIDE. KAMS INTERNATIONAL INC., ESVEE APPAREL MFG. INC., and/or THANWARDASH JESWANI and KAMLESH JESWANI, petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION, and MERCEDITA T. TORREJOS, respondents. [G.R. No. 128806. September 28, 1999] FACTS: KAMS and ESVEE are sister companies engaged in garments manufacturing located at 201-E De La Paz Street, Mandaluyong City. Both are managed by petitioner Thanwardash Jeswani and his son, his copetitioner Kamlesh Jeswani. ESVEE hired private respondent Mercedita T. Torrejos as a utility worker in the factory. Torrejos performed her assigned task dutifully, and the Jeswanis were very much pleased with her work. The management discovered a shortage in the inventory of KAMS. Consequently, stricter security measures were implemented and each employee was thoroughly inspected before leaving company premises. Private respondent's personal travails started in August of 1994 when she bought six (6) yards of fabric from petitioners. In order to bring the purchased fabric out of the factory she had to secure a gate pass and present it to the security guard on duty at the gate. When security guard Nena Blancaflor inspected the fabric and measured it using her arms, she estimated the length to be eight (8) yards instead of six (6) yards as indicated in the gate pass.[2] Torrejos was then made to sign the security logbook which stated that “Mercy Torrejos tried to bring-out two (2) yards of tela.”[3] However, both parties gave conflicting versions of the events that happened after.

According to petitioners, Torrejos admitted to Thanwardash Jeswani that she had made a mistake in measuring the fabric and promised to pay for the difference. Thereafter, Thanwardash Jeswani accompanied Torrejos to the gate and instructed the security guard to permit her to leave the premises. Torrejos asseverated that there was really no excess yardage in the fabric she bought. According to her, after the fabric was re-measured, it was confirmed that it was only six (6) yards. Thus, Thanwardash Jeswani eventually allowed her to go home.[5] Nonetheless, what stands out in the records of the case is the fact that security guard Nena Blancaflor admitted before the Labor Arbiter that her measurement of the fabric was inaccurate considering that she used only her arms, instead of an actual yardstick.[6] Moreover, no disciplinary action was ever taken by management against Torrejos with regard to the purported pilferage. Thus, Torrejos continued performing her duties and responsibilities even after the alleged misdemeanor. But on 3 October 1994 she failed to report for work because she had “sore eyes.” She instructed her sister Antonia, who also worked for petitioners, to inform the Jeswanis that she would be absent that day. When Antonia arrived from work later that day, she told private respondent that management had decided to terminate her services. To verify this, Torrejos called up Kamlesh Jeswani at his office. The latter instructed her to talk to his father instead. It was Thanwardash Jeswani who later confirmed through the telephone that she had indeed been terminated because of abandonment of work. Torrejos decided to go to petitioners’ office, but she was barred by the security guard from entering the company premises. The Jeswanis refused to talk to her personally; they only informed her through the telephone that she had been terminated effective 3 October 1994 for abandonment of work. Torrejos filed a complaint for illegal dismissal against petitioners with the arbitration branch of the (NLRC) Manila. She prayed for the payment of salary differential, service incentive leave pay, 13th month pay for 1994, moral and exemplary damages, and attorney’s fees. = ILLEGALLY DISMISSED. ISSUE: whether Torrejos was illegally dismissed and whether the monetary award for salary differential was correctly computed by the NLRC. RULING: It cannot be overly emphasized that the dismissal of an employee should be for any of the just and authorized causes enumerated in the Labor Code.[18] And since petitioners utterly failed to justify Torrejos’ discharge on the basis of abandonment of work, we do not hesitate to strike it down as illegal. Furthermore, it must be stressed that abandonment of work does not per se sever the employer-employee relationship. It is merely a form of neglect of duty, which is in turn a just cause for termination of employment. The operative act that will ultimately put an end to this relationship is the dismissal of the employee after complying with the procedure prescribed by law.[19] As frequently held by the Court, the termination of an employee must be effected in accordance with law. Therefore the employer must furnish the worker or employee sought to be dismissed with two (2) written notices,

i.e., (a) notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and, (b) subsequent notice which informs the employee of the employer’s decision to dismiss him. [20] Rule XIV, Sec. 2, of the Omnibus Rules Implementing the Labor Code provides - Sec. 2. Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. In case of abandonment of work, the notice shall be served at the worker’s last known address (emphasis supplied). However, it must be mentioned that no written notice was ever sent by petitioners informing Torrejos that she had been terminated due to abandonment of work. This failure on the part of petitioners to comply with the twin-notice requirement indeed underscored the irregularity surrounding Mercedita T. Torrejos’ dismissal. As to the issue of salary differential, petitioners plead that the underpayment (salary differential) was computed when Torrejos was then a housemaid and not an industrial worker. Consequently, the NLRC gravely abused its discretion when it ruled that Torrejos was an industrial worker when she was still a housemaid.[21] Petitioners cite the resolution of the NLRC dated 7 February 1997 where it held that anent the amount of salary differential due Torrejos, there being evidence that she worked as an alternate from January to May 1993, salaries received being in accord with the rates prescribed by law corresponding to that period, a reduction of the claim was thus justified under such circumstances.[22] This indicates that before January 1993 Torrejos was indeed hired as a domestic employee and not an industrial employee, as she pretended to be. Thus, according to petitioner, the minimum wage law cannot be applied to Torrejos before January 1993 since at that time she was still a domestic employee. We do not agree. Contrary to what petitioners claim, the only conclusions that can be gleaned from the NLRC Resolution of 7 February 1997 are: (a) that Torrejos only worked two (2) to four (4) days a week from January 1993 to May 1993; (b) that during this period she was paid the legal minimum wage; and, (c) that, consequently, the earlier award of salary differential of P23,075.00 must accordingly be reduced to P18,603.00. Indeed, there is nothing in the Resolution from which we can logically infer that Torrejos was truly a domestic helper prior to January of 1993. As the employer of private respondent, petitioner ESVEE had the burden of proving that Torrejos was hired only as a domestic helper on 21 July 1991 and that it was only on 21 January 1993 that she was absorbed by petitioner ESVEE as an industrial employee. However, petitioners failed to discharge such burden. The records are bereft of any evidence showing that Torrejos was initially hired by petitioners as a domestic helper so as to preclude the application of the minimum wage law. DISMISSED.

Jo vs. NLRC 324 SCRA 437 February 2, 2000

FACTS: Peter Mejila was a barber employed by a barbershop. Peter Mejila worked as barber on a piece rate basis at Dina’s Barber Shop. In 1970, the owner, Dina Tan, sold the barbershop to petitioners Paz Martin Jo and Cesar Jo. All the employees, including private respondent, were absorbed by the new owners. The name of the barbershop was changed to Windfield Barber Shop. The owners and the barbers shared in the earnings of the barber shop. The barbers got two-thirds (2/3) of the fee paid for every haircut or shaving job done, while one-third (1/3) went to the owners of the shop. The owners of the shop attempted to mediate in the incessant squabbling between Mejila and a fellow employee. Mejila then unilaterally demanded his separation pay and other benefits, despite his employers'assurances that he was not being dismissed. He then turned over the duplicate keys of the shop(which he held as caretaker) to the cashier and took all his personal belongings from his work place, and found similar employment in another shop. He then filed a complaint for illegal dismissal. ISSUE: 1. Whether or not there exists an employer-employee relationship between petitioners and private respondent. 2. Whether or not private respondent was dismissed from or had abandoned his employment.

HELD: (1) Absent a clear showing that petitioners and private respondent had intended to pursue a relationship of industrial partnership, we entertain no doubt that private respondent was employed by petitioners as caretaker-barber. Initially, petitioners, as new owners of the barbershop, hired private respondent as barber by absorbing the latter in their employ. Undoubtedly, the services performed by private respondent as barber is related to, and in the pursuit of the principal business activity of petitioners. Later on, petitioners tapped private respondent to serve concurrently as caretaker of the shop. Certainly, petitioners had the power to dismiss private respondent being the ones who engaged the services of the latter. (2) He abandoned his work. This was manifested by: His having bragged to fellow workers his intention to quit his work in the shop; his surrender of the shop's keys and his taking all of his personal belongings from the said place; his failure to report for work and not giving any valid reason for such; he acquired employment in another shop immediately, despite reassurance that he could stay in his old place of work; and finally, his complaint for illegal dismissal did not include a prayer for reinstatement. All of these show concurrence of the intent to abandon his work and overt acts that show his lack of interest in continuing his work. GRANTED. HANTEX TRADING CO., INC., and/or MARIANO CHUA, vs. CA, Special Former Tenth Division, and BERNARDO SINGSON. FACTS: Private respondent Bernardo Singson was employed by petitioner Hantex Trading Co., Inc. (HANTEX) on 8 November 1994 as sales

representative. HANTEX was engaged in selling laminating machines and ID supplies. He was paid a regular salary of P165.00/day in addition to P500.00 travelling allowance and a 3% - 5% commission from his sales. Sometime in February 1996 the management of HANTEX called the attention of Singson regarding his deteriorating sales performance. Despite thereof, Singson's performance showed no sign of improvement as it remained inadequate and unsatisfactory. Thus, HANTEX, through its president, petitioner Mariano Chua, held a "one-onone" conference with him on 5 August 1996. The parties presented conflicting versions of what actually transpired during the conference. Singson alleged that petitioner Mariano Chua asked for his resignation from the company, and required him to submit a resignation letter otherwise his separation pay, 13th month pay and other monetary benefits would not be paid. When he refused, petitioner Mariano Chua ejected him from the premises of HANTEX and left instructions to the guards on-duty to refuse him admittance. Petitioners denied that they dismissed Singson and maintained that the conference was merely intended to motivate him "to exert more effort in his job and mend his work attitude;" and that Singson apparently resented petitioner Chua for it that he never reported back for work after the conference. Singson filed a complaint with the Labor Arbiter for illegal dismissal with prayer for reinstatement asserting that he was dismissed from his employment without prior notice and hearing.[2] On the contrary, HANTEX averred that Singson was not dismissed but abandoned his job after he was reprimanded. LA: illegally dismissed. NLRC: affirmed. CA: denied. ISSUE: whether private respondent Bernardo Singson deliberately abandoned his employment, or was illegally dismissed by the management of petitioner HANTEX. RULING: DENIED. Considering the hard times in which we are in, it is incongruous for respondent to simply give up his work after receiving a mere reprimand from his employer. No employee would recklessly abandon his job knowing fully well the acute unemployment problem and the difficulty of looking for a means of livelihood nowadays. With a family to support, we doubt very much that respondent would so easily sacrifice his only source of income and unduly expose his family to hunger and untold hardships. Certainly, no man in his right mind would do such thing. What is more telling is that on 8 June 1996, or three (3) days after his employment was terminated, respondent immediately instituted the instant case for illegal dismissal with a prayer for reinstatement against his employer. An employee who loses no time in protesting his layoff cannot by any reasoning be said to have abandoned his work, for it is already a well-settled doctrine that the filing by an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of his desire to return to work, thus negating the employer's charge of

abandonment. Verily, it would be illogical for respondent Singson to have left his job and thereafter file the complaint against his employer. Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. For abandonment to exist, it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason; and, (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts - the second element is the more determinative factor. Mere absence of the employee is not sufficient. The burden of proof is on the employer to show a clear and deliberate intent on the part of the employee to discontinue employment without any intention of returning. PANTRANCO NORTH EXPRESS, INC. vs. (NLRC) and ALFONSO AYENTO, SR. G.R. No. 106516 September 21, 1999 FACTS: Pantranco implemented a job classification program for purposes of manpower reduction. Under the old job classification of employees, salaries ranged from salary grades 1 to 23. In the new program, the salary grades were reclassified. Private respondent, Ayento, was an employee of petitioner. He started as a filing clerk and promoted to Head Registration Section on April 1, 1982. Private respondent's position as Head of the Registration Section had a Salary Grade of 11-R-5 with a basic salary of P1,320.00. Based on his Salary Grade of 11, private respondent's ranking was that of a Technical Assistant. With the company's reorganization, positions were reclassified and restructured. Private respondent's position was abolished. Consequently, he was appointed as Registration Assistant with a Salary Grade of 9-R-2. The basic salary was increased from P1,320.00 to P1,855.00. As a Registration Assistant, he actually was relieved of his supervisory function, no longer had any field work, nor entitled to overtime pay averaging from P700.00 to P800.00. His representation expenses and discretionary funds of P1,000.00 were also cancelled. He received instead a fixed amelioration allowance of P350.00. Private respondent filed a Complaint against petitioner for unfair labor practice. It specifically alleged demotion of position and diminution of salary and benefits. Respondent company, on the other hand, argued that there was no demotion but a job-reclassification where petitioner's position was abolished due to the company's financial problems. LA ruled in favor of private respondent. NLRC affirmed. ISSUE: Right or prerogative of management to abolish a position no longer necessary as a result of a valid reorganization. RULING: (OSG) contends that private respondent's position was not truly abolished and the reorganization was a mere ploy to accommodate petitioner's own protege. We are unable to agree with both the Labor Arbiter and the Commission. The State affords the constitutional blanket of rendering protection to labor, but it must also protect the right of

employers to exercise what are clearly management prerogatives, so long as the exercise is without abuse of discretion. It is a well-settled rule that labor laws discourage interference with an employer's judgment in the conduct of his business. 17 Absent any unfair or oppressive act against private respondent, the Court cannot and should not interfere with management decisions validly undertaken by petitioner. To do so would be meddling with the control and management of the corporation without legal justification. Private respondent has not shown concretely any arbitrary act and bad faith on the part of the petitioner. Neither could he show persuasively that the reorganization was effected to remove unwanted employees and replace them with favored ones, rather than purposely to show up its devastated finances through reorganization, retrenchment and costcutting. GRANTED. Hyatt Taxi Services, Inc. v. Catinoy June 26, 2001 FACTS: Catinoy was a taxi driver of Hyatt Taxi Services, Inc. He is also a member and officer ofHyatt Taxi Employees Association, a legitimate labor organization registered with the DOLE andis the exclusive bargaining representative of all taxi drivers of the company. One day he foundout that his desk was forcibly opened and he found out that it was the acting union presidentwho opened it so an argument began that ended in blows where he was injured so he filed acriminal complaint against the president. The union asked the company to suspend them bothfor fighting and a memo was issued. It said that company rules and the union’s by-laws hadbeen violated so they were put on indefinite suspension. Catinoy then filed a complaint for illegalsuspension. After 30 days of suspension, he reported for work but he was not allowed to bec ofthe 2 cases he filed. He then amended his complaint to constructive dismissal. The LA ruled thatthere was illegal dismissal and the NLRC affirmed it but did not award backwages bec therewas no concrete showing of illegal dismissal and it was only constructive illegal dismissal. TheCA reversed it and ruled that there was illegal dismissal and awarded full backwages. ISSUE: W/N there was illegal dismissal or constructive dismissal. HELD: The SC ruled that there was illegal dismissal, not merely constructive dismissal. Therewas no justification for the deletion of the award of backwages. The factual findings of the LA,which the NLRC initially adopted, show that respondent was not taken back after the 30daysuspension. The LA appreciated the events as badges of constructive dismissal. Constructivedismissal is when the employee wants to work but cannot due to the prevailing conditions. Buthere, what made it impossible or unacceptable for respondent to resume work was aninsistence that he first desist from filing his complaints before he be allowed to return. Herefused and amended his complaint to include constructive dismissal. His refusal to yield isunderstandable for he has every right not to bargain

away his right to prosecute his complaintsin exchange for the employment to which he was in the first place rightfully entitled. Jo Cinema v. NLRC June 28, 2001 FACTS: Petitioner is in the movie business. Respondent was a theater porter. A memo wasissued saying that no checks should be encashed but respondent, for her friend, encashedwithout permission 4 checks with the ticket seller. The checks bounced so she was asked toshow cause why she shouldn’t be disciplined but she didn’t answer so she was preventivelysuspended. An investigation was held where she participated in. During the investigation shefiled a case for illegal dismissal bec when she was suspended, she was allegedly terminatedalso. The LA and NLRC ruled that there was illegal dismissal or at least constructive dismissaland ordered separation pay and full backwages. The LA ruled that since the company insisted on making her pay the amount she couldn’t come back to work even if she wanted to. The NLRC ruled that even though respondent had no cause of action against the company as shewas merely placed on preventive suspension she was still illegally dismissed. ISSUE: W/N respondent was illegally dismissed HELD: It is clear that respondent was not dismissed but merely placed under preventivesuspension. It cannot be construed as dismissal since the cessation from work is onlytemporary. She could not have been dismissed because a formal investigation was still beingconducted. She even attended the investigation admitted the allegations. If she was indeeddismissed the investigation wouldn’t have continued. There was also no constructive dismissal. Constructive discharge is quitting because continued employment is rendered impossible,unreasonable or unlikely. This does not hold. The demand for payment out of her own pocketswas reasonable as it was attributed to her. As she was not illegally dismissed, separation payand backwages are not in order. TEMPORARY RETRENCHMENT: SEBUGERO V NLRC (GTI SPORTSWEAR) 248 SCRA 532 DAVIDE JR; September 27, 1995. NATURE: Special civil action for certiorari FACTS: Petitioners were among the thirty-eight (38) regular employees of private respondent GTI Sportswear who were given "temporary layoff"notices due to alleged lack of work andheavy losses caused by the cancellation of orders from abroad and by the garments embargo. Believing that their "temporary lay-off" was a ploy to dismiss them, resorted to because of theirunion activities and was in violation of their right to security of tenure, laid-off employees filed complaint with Labor Arbiter. -GTI denied the claim of illegal dismissal and asserted that itwas its prerogative to lay-off its employees temporarily for a period not exceeding six months to prevent losses, and that thelay-off affected both union and non-union members. It justified its failure to recall the 38 laid-off employees after the lapse ofsix months because of the subsequent cancellations of job orders made by its foreign principals.

-22 of the 38 complainants accepted the separation pay.The petitioners herein did not. - LA said there was justification to lay-off temporarily some employees.That their principals transferred their orders were proven by correspondence. Although, as a general rule,Respondent company has the prerogative and right to resort totemporary lay-off, such right is likewise limited to a period of six(6) months applying Art. 286.However, Respondent companyshould have recalled them after the end of the six month periodor at the least reasonably informed them (complainants) thatthe Respondent company is still not 'in a position to recall them,and if the same cannot be met, then the company shouldimplement retrenchment and pay its employees separation pay.Hence, there is in this complaint a clear case of constructivedismissal.Reinstatement is not prudent, separation pay is inorder. - GTI appealed to NLRC.NLRC concurred with the findings ofthe Labor Arbiter that there was a valid lay-off of the petitionersdue to lack of work, but disagreed with the latter's rulinggranting back wages.NLRC said that having established lack of work, it follows that retrenchment took place and notconstructive dismissal. - Petitioners filed this action. ISSUES: 1. WON the ground for termination of employment was redundancy 2.WON termination was legal HELD 1.NO, the ground in this case is retrenchment. - Redundancy exists where the services of an employee are inexcess of what is reasonably demanded by the actualrequirements of the enterprise. - Retrenchment on the other hand, is used interchangeably withthe term "lay-off." It is the termination of employment initiatedby the employer through no fault of the employee's and withoutprejudice to the latter, resorted to by management duringperiods of business recession, industrial depression, or seasonalfluctuations, or during lulls 2.YES, it is legal, but it is defective. - Six months is the period set by law that the operation of abusiness or undertaking may be suspended thereby suspendingthe employment of the employees concerned. The temporarylay-off wherein the employees likewise cease to work shouldalso not last longer than six months. After six months, theemployees should either be recalled to work or permanentlyretrenched. - Failing to comply with this would be tantamount to dismissingthe employees and the employer would thus be liable for suchdismissal. - We must determine whether there was compliance with thelaw regarding a valid retrenchment at anytime within the sixmonth-period that they were temporarily laid-off.Three basicrequisites for valid retrenchment: - it is necessary to prevent losses and losses are proven - written notice to employees and DOLE at least 1 mo prior to intended date of retrenchment - separation pay - Here, both the Labor Arbiter and the NLRC found that theprivate respondent was suffering and would continue to sufferserious losses. - In this case, it is undisputed that the petitioners were givennotice of the temporary lay-off. There is, however, no evidencethat any written notice to permanently retrench them was givenat least one month prior. There is

also nothing in the records toprove that a written notice was ever given to the DOLE. - With respect to the payment of separation pay, the NLRCfound that GTI offered to give the petitioners their separation pay but that the latter rejected such offer which was accepted only by 22 out of the 38 original complainants. -CONCLUSION:RETRENCHMENT IS DEFECTIVE IN THE FACE OFFINDING THAT REQUIRED NOTICES TO PETITIONERS AND DOLEARE NOT GIVEN.But this doesn’t make the retrenchment illegal. -Where the dismissal of employee is for just cause and isproven to be but he is not accorded right to due process, dismissal is upheld but employer must be sanctioned for non-compliance. ORIGINAL DISCUSSION OF RULING: Under the aforequoted Article 283 of the Labor Code, there are three basic requisites for a valid retrenchment: (1) the retrenchment is necessary to prevent losses and such losses are proven; (2) written notice to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; and (3) payment of separation pay equivalent to one month pay or at least 1/2 month pay for every year of service, whichever is higher. As for the first requisite, whether or not an employer would imminently suffer serious or substantial losses for economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC to determine. 14 Both LA and the NLRC found that the private respondent was suffering and would continue to suffer serious losses, thereby justifying the retrenchment of some of its employees, including the petitioners. In the instant case, no claim was made by any of the parties that such a finding was not supported by substantial evidence. Furthermore, the petitioners did not appeal the finding of the Labor Arbiter that their temporary lay-off to prevent losses was amply justified. They cannot now question this finding that there is a valid ground to lay-off or retrench them. The requirement of notice to both the employees concerned and the (DOLE) is mandatory and must be written and given at least one month before the intended date of retrenchment. In this case, it is undisputed that the petitioners were given notice of the temporary lay-off. There is, however, no evidence that any written notice to permanently retrench them was given at least one month prior to the date of the intended retrenchment. The NLRC found that GTI conveyed to the petitioners the impossibility of recalling them due to the continued unavailability of work. 17 But what the law requires is a written notice to the employees concerned and that requirement is mandatory. 18 The notice must also be given at least one month in advance of the intended date of retrenchment to enable the employees to look for other means of employment and therefore to ease the impact of the loss of their jobs and the corresponding income. 19 That they were already on temporary lay-off at the time notice should have been given to them is not an excuse to forego the one-month

written notice because by this time, their lay-off is to become permanent and they were definitely losing their employment. There is also nothing in the records to prove that a written notice was ever given to the DOLE as required by law. The lack of written notice to the petitioners and to the DOLE does not, however, make the petitioners' retrenchment illegal such that they are entitled to the payment of back wages and separation pay in lieu of reinstatement as they contend. Their retrenchment, for not having been effected with the required notices, is merely defective. In those cases where we found the retrenchment to be illegal and ordered the employees' reinstatement and the payment of back wages, the validity of the cause for retrenchment, that is the existence of imminent or actual serious or substantial losses, was not proven. 26 But here, such a cause is present as found by both the Labor Arbiter and the NLRC. There is only a violation by GTI of the procedure prescribed in Article 283 of the Labor Code in effecting the retrenchment of the petitioners. GRANTED and the challenged decision of public respondent National Labor Relations Commission in NLRC NCR CA Case No. 004673-93 is modified by reversing and setting aside its deletion of the awards in the Labor Arbiter's decision of proportionate 13th month pay for 1991 and attorney's fees, the latter being reduced to P25,000.00. Separation pay equivalent to one-half (1/2) month pay for every year of service shall be computed from the dates of the commencement of the petitioners' respective employment until the end of their six-month temporary lay-off which is 22 July 1991. In addition, private respondent G.T.I. Sportswear Corporation is ordered to pay each of the petitioners the sum of P2,000.00 as indemnification for its failure to observe due process in effecting the retrenchment. SIEMENS PHILIPPINES, INC. AND MR. ERNST H. BEHRENS, VS. ENRICO A. DOMINGO. [G.R. No. 150488, July 28, 2008] FACTS: Domingo signed an Employment Contract with Maschinen & Technik, Inc. (MATEC) as a consultant, with a compensation package of Php8,000.00/month salary and an allowance of Php400.00/month. MATEC is a subsidiary of Siemens Philippines.[4] Thereafter, Domingo was given additional work by MATEC, in which he was paid DM1,800.00/month on top of his original salary. The extra work was the result of a contract entered into by MATEC and Siemens Aktiengesellschaft[5] (Siemens Germany), whereby MATEC, at the request of Siemens Germany, hired Domingo to handle the operation of OEN OEV TD.[6] Siemens Germany is a German company which has an investment in Siemens Philippines.[7] Electronic Telephone System Industries, Inc. (ETSI) availed of Domingo's services as assistant manager. ETSI, like MATEC is a subsidiary of Siemens Philippines.[8] The Contract of Employment[9] of Domingo with ETSI provides that the latter shall have the right to assign the said contract in favor of Siemens Philippines, which is a corporation to be incorporated under the laws of the Philippines. While still an assistant manager of ETSI, Domingo was hired as a consultant by Siemens Germany in the field of text and data

networks for a period of twelve (12) months.[11] As compensation, he received DM20,000.00, payable once for every twelve-month period. Siemens Germany sent a letter to ETSI guaranteeing the consultancy agreement between Siemens Germany and Domingo.

Siemens Germany, having an investment in Siemens Philippines. Short of piercing the veil of corporate fiction, we note the intimate corporate relationship of Siemens Germany and Siemens Philippines, including the practice of the two companies of integrating their workforce.

Domingo filed a complaint for illegal dismissal and prayed for the payment of salaries, 13th month pay, backwages, damages, separation pay and attorney's fees.[22] Domingo alleged that he was forced to resign because of the act of Siemens Philippines of not renewing the consultancy agreement. [23] Siemens Philippines countered that Domingo's resignation was voluntary and that they were not privy to the consultancy agreement between Domingo and Siemens Germany. LA: illegal dismissal. NLRC: affirmed.

Second, in Domingo's contract of employment with Siemens Philippines, it is provided that Domingo shall not be connected in any other work capacity or employment or be otherwise involved, directly or indirectly, with any other business or concern without first having obtained the written consent of the company. Yet, Siemens Philippines never questioned the continued consultancy work of Domingo with Siemens Germany, not even when the consultancy agreement was renewed twice during the lifetime of Domingo's contract of employment with Siemens Philippines.

ISSUE: whether there was constructive dismissal that would entitle Domingo to his monetary claims. RULING: We believe, and so hold, that Domingo was constructively dismissed from employment. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal.[35] The gauge for constructive dismissal is whether a reasonable person in the employee's position would feel compelled to give up his employment under the prevailing circumstances. Constructive dismissal is defined as quitting when continued employment is rendered impossible, unreasonable or unlikely as the offer of employment involves a demotion in rank or diminution in pay.[36] It exists when the resignation on the part of the employee was involuntary due to the harsh, hostile and unfavorable conditions set by the employer. It is brought about by the clear discrimination, insensibility or disdain shown by an employer which becomes unbearable to the employee. An employee who is forced to surrender his position through the employer's unfair or unreasonable acts is deemed to have been illegally terminated and such termination is deemed to be involuntary.[37] We have, under the law's mandate, consistently resolved this situation in favor of the employee in order to protect his rights and interests from the coercive acts of the employer.

While admittedly, Siemens Philippines is not a party to the arrangement between Siemens Germany, ETSI and Domingo, knowledge of and acquiescence to - if not actual concurrence in - the arrangement can be imputed to Siemens Philippines as to bind it to the arrangement. This conclusion finds support in the following: First, based on the findings of facts of the LA, NLRC and CA ― MATEC, ETSI, Siemens Philippines and Siemens Germany are related companies, the first three being subsidiaries of the parent company, and the fourth,

Third, the guarantee letter issued by Siemens Germany in favor of Domingo was never questioned, much less revoked by Siemens Philippines when it assumed the employment of Domingo. The Guarantee Letter was a security given to Domingo by Siemens Germany assuring Domingo that Siemens Philippines would ensure that Siemens Germany would extend the consultancy agreement as long as Domingo was under its employ. Fourth, the consultancy agreement was a form of benefit or privilege given to Domingo by ETSI, a privilege that was allowed by Siemens Philippines to continue when it took over the majority of the business activities of ETSI and, consequently, became Domingo's employer. The outright removal of the privilege contravenes the law, because it resulted in the effective diminution of Domingo's salary.

Domingo's constructive dismissal entitles him to his monetary claims, subject to the following modifications: First, we are not in accord with the Decision of the LA finding Behrens, the President and Chief Executive Officer of Siemens Philippines, solidarily liable with the company. A corporation, being a juridical entity, may act only through its directors, officers and employees. Obligations incurred by them, while acting as corporate agents, are not their personal liability but the direct accountability of the corporation they represent. As a rule, they are only solidarily liable with the corporation for the termination of employees if they acted with malice or bad faith.[38] In the case at bar, malice or bad faith on the part of Behrens in the constructive dismissal of Domingo was not sufficiently proven to justify a ruling holding him solidarily liable with Siemens Philippines. Second, an illegally or constructively dismissed employee 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.[39] As a rule, separation pay is awarded to an illegally dismissed employee,

computed at the rate of one month pay per year of service. Accordingly, the LA decision granting separation pay equivalent to two months salary per year of service must be modified. There is nothing on record that even remotely suggests that it is the company policy of Siemens Philippines to grant its employees separation pay of two months' salary for every year of service. Thus, in consonance with our previous rulings,[40] Domingo shall be awarded separation pay in the amount of one month pay for every year of service, but consultancy fees shall not be included in the computation of his separation pay. As discussed above, the evidence presented by Domingo is not sufficient to pierce the veil of corporate fiction between Siemens Philippines and Siemens AG, which would make Siemens Philippines liable for the monetary obligations of Siemens AG. Third, the backwages that should be awarded to Domingo shall be reckoned from the time his constructive dismissal took effect until the finality of this decision. This is in conformity with Article 279 of the Labor Code which provides that an employee who is unjustly dismissed from work shall be entitled to 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. Since reinstatement of Domingo is no longer possible due to his strained relations with the management of Siemens Philippines, and considering the position he held in the company, he is lawfully entitled to receive backwages. For the same reason cited above, consultancy fees shall be excluded in the computation of Domingo's backwages. Finally, moral damages may be recovered when the dismissal of the employee was tainted by bad faith or fraud; or when it constituted an act oppressive to labor or done in a manner contrary to morals, good customs or public policy. Exemplary damages are recoverable if the dismissal was done in a wanton, oppressive, or malevolent manner.[41] In this case, we have found that there was bad faith in the failure or refusal of Siemens Philippines to work for the renewal of Domingo's consultancy contract with Siemens Germany. But while we affirm Domingo's entitlement to these damages, they are not intended to enrich the dismissed employee. Consequently, we find the amount of P50,000.00 for moral damages and P50,000.00 for exemplary damages sufficient to allay the sufferings experienced by Domingo and by way of example or correction for public good, respectively.

stint as instructor in UNP-Vigan. In 1994, he was recalled to Laoag campus. On October 3, 2003, petitioner received a Memorandum transferring him to Data Center College Bangued, Abra branch as Head for Education/Instructor due to an urgent need for an experienced officer and computer instructor thereat. Petitioner declined to accept his transfer to Abra citing the deteriorating health condition of his father and the absence of additional remuneration to defray expenses for board and lodging which constitutes implicit diminution of his salary. He filed a Complaint for constructive dismissal against respondents. Petitioner alleged that his proposed transfer to Abra constitutes a demotion in rank and diminution in pay and would cause personal inconvenience and hardship. He argued that although he was being transferred to Abra branch supposedly with the same position he was then holding in Laoag branch as Head for Education, he later learned through a Memorandum from the administrator of Abra branch that he will be re-assigned merely as an instructor, thereby relegating him from an administrative officer to a rank-and-file employee. Moreover, the elimination of his allowance for board and lodging will result to an indirect reduction of his salary which is prohibited by labor laws. Petitioner also claimed that when he questioned the indefinite suspension of the scholarship for post-graduate studies extended to him by respondents, the latter became indifferent to his legitimate grievances which eventually led to his prejudicial re-assignment. He averred that his transfer is not indispensable to the school’s operation considering that respondents even suggested that he take an indefinite leave of absence in the meantime if only to address his personal difficulties. Petitioner thus prayed for his reinstatement and backwages. Respondents claimed that they were merely exercising their management prerogative to transfer employees for the purpose of advancing the school’s interests. They argued that petitioner’s refusal to be transferred to Abra constitutes insubordination. LA: dismiss for lack of merit. NLRC affirmed. CA dismissed petition. ISSUE: Petitioner imputes grave abuse of discretion on the CA in not giving due course to his petition despite substantial compliance with the requisite formalities as well as on the NLRC in not ruling that he was constructively dismissed by respondents.

William Endeliseo Barroga v Data Center College of the Philippines. June 27, 2011.

RULING: Petitioner’s substantial compliance calls for the relaxation of the rules. Therefore, the CA should have given due course to the petition.

FACTS: petitioner was employed as an Instructor in DataCenterCollegeLaoagCitybranch in Ilocos Norte. In a Memorandum dated June 6, 1992, respondents transferred him to University of Northern Philippines (UNP) in Vigan, Ilocos Sur where the school had a tie-up program. Petitioner was informed through a letter dated June 6, 1992 that he would be receiving, in addition to his monthly salary, a P1,200.00 allowance for board and lodging during his

Petitioner’s transfer is not tantamount to constructive dismissal. Nevertheless, the instant petition merits dismissal on substantial grounds. After a careful review of the records and the arguments of the parties, we do not find any sufficient basis to conclude that petitioner’s re-assignment amounted to constructive dismissal.

Constructive dismissal is quitting because continued employment is rendered impossible, unreasonable or unlikely, or because of a demotion in rank or a diminution of pay. It exists when there is a clear act of discrimination, insensibility or disdain by an employer which becomes unbearable for the employee to continue his employment. Petitioner alleges that the real purpose of his transfer is to demote him to the rank of an instructor from being the Head for Education performing administrative functions. Petitioner further argues that his re-assignment will entail an indirect reduction of his salary or diminution of pay considering that no additional allowance will be given to cover for board and lodging expenses. He claims that such additional allowance was given in the past and therefore cannot be discontinued and withdrawn without violating the prohibition against non-diminution of benefits.

a long period which is consistent and deliberate. Petitioner failed to present any other evidence that respondents committed to provide the additional allowance or that they were consistently granting such benefit as to have ripened into a practice which cannot be peremptorily withdrawn. Moreover, there is no conclusive proof that petitioner’s basic salary will be reduced as it was not shown that such allowance is part of petitioner’s basic salary. Hence, there will be no violation of the rule against diminution of pay enunciated under Article 100 of the Labor Code.

These allegations are bereft of merit. Petitioner was originally appointed as instructor in 1991 and was given additional administrative functions as Head for Education during his stint in Laoag branch. He did not deny having been designated as Head for Education in a temporary capacity for which he cannot invoke any tenurial security. Hence, being temporary in character, such designation is terminable at the pleasure of respondents who made such appointment. Moreover, respondents’ right to transfer petitioner rests not only on contractual stipulation but also on jurisprudential authorities. The Labor Arbiter and the NLRC both relied on the condition laid down in petitioner’s employment contract that respondents have the prerogative to assign petitioner in any of its branches or tie-up schools as the necessity demands. In any event, it is management prerogative for employers to transfer employees on just and valid grounds such as genuine business necessity. It is also important to stress at this point that respondents have shown that it was experiencing some financial constraints. Because of this, respondents opted to temporarily suspend the post-graduate studies of petitioner and some other employees who were given scholarship grants in order to prioritize more important expenditures.

FACTS

Indeed, we cannot fully subscribe to petitioner’s contention that his reassignment was tainted with bad faith. As a matter of fact, respondents displayed commiseration over the health condition of petitioner’s father when they suggested that he take an indefinite leave of absence to attend to this personal difficulty. Also, during the time when respondents directed all its administrative officers to submit courtesy resignations, petitioner’s letter of resignation was not accepted. This bolsters the fact that respondents never intended to get rid of petitioner. In fine, petitioner’s assertions of bad faith on the part of respondents are purely unsubstantiated conjectures. The Court agrees with LA that there was no violation of the prohibition on diminution of benefits. Indeed, any benefit and perks being enjoyed by employees cannot be reduced and discontinued, otherwise, the constitutional mandate to afford full protection to labor shall be offended. But the rule against diminution of benefits is applicable only if the grant or benefit is founded on an express policy or has ripened into a practice over

CHENIVER DECO PRINT TECHNICS CORP v. NLRC | 325 SCRA 758 | February 17, 2000

- Cheniver is a corporation operating its printing business in Makati. The respondents are members of the labor union and former employees of Cheniver. - June 5, 1992 – Cheniver informed its employees that it will transfer its operations to Batangas. Reasons for the transfer are expiration of lease contract on the premises of the Makati palnt, and local authorities’ action to force out Cheniver’s operations from Makati because of alleged hazards to residents nearby. - Cheniver gave its employees until the end of June to inform management if they wanted with Cheniver in its transfer, otherwise it would hire replacements. Aug1 was the scheduled start of operations in the new plant in Batangas. - Aug 4, 1992 – Cheniver wrote its employees to report to the new location within 7days, otherwise they will be deemed to have lost interest in the job and would be replaced. However, no one reported for work in batangas, even after extension of period of time to report to work. - Respondents filed a complaint for unfair labor practice and illegal dismissal, and demanded separation pay (among others). - LA ruled that the transfer of operations was valid and absolved cheniver of charges for unfair labor practice and illegal dismissal. It however ordered payment of separation pay. NLRC affirmed. – cheniver contends that the transfer of its business is neither closure nor retrenchment, thus separation pay should not be awarded. Also, employees were not terminated but they resigned because they find the new site to far from their residences

ISSUE: WON employees are entitled to separation pay considering that the transfer of the plant was valid

- that the employees resigned is not convincing. The transfer of Cheniver to another place hardly accessible to its workers resulted in the latter's untimely separation from the service not to their own liking, hence, not construable as resignation Disposition: petition denied. NLRC resolutions AFFIRMED.

HELD: YES Ratio Art. 283 of the Labor Code provides (in part): ART. 283. Closure of establishment and reduction of personnel. - The employer may terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title xxx - In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. xxx Reasoning - there appears no complete dissolution of Cheniver’s business undertaking but the relocation of its plant to Batangas, in our view, amounts to cessation of petitioner's business operations in Makati. It must be stressed that the phrase “closure or cessation of operation of an establishment or undertaking not due to serious business losses or reverses” under Art. 283 includes both complete cessation of all business operations and the cessation of only part of a company's business - There is no doubt that petitioner has legitimate reason to relocate its plant because of the expiration of the lease contract on the premises it occupied. That is its prerogative. But even though the transfer was due to a reason beyond its control, Cheniver has to accord its employees some relief in the form of severance pay. - Since the closure of the plant is not on account of serious business losses, Cheniver shall give respondents separation pay equivalent to at least 1 month or ½ month pay for every year of service

PT&T v. NLRC | 456 SCRA 264 | G.R. No. 147002. April 15, 2005

F: Agnes Bayao and Mildred Castillo were hired by the Philippine Telegraph & Telephone Corporation (PT&T) in November 1991 and August 1995, respectively, both as account executives stationed in Baguio City. Both Bayao and Castillo received a Memorandum dated May 21, 1998 coming from Ma. Elenita V. Del Rosario, Vice-President of the Commercial Operations Group (COG) of PT&T, inviting them to consider a two to threemonth assignment to the provinces of Rizal and Laguna in view of PT&T’s expansion in the aforesaid area. Bayao and Castillo refused the offer, on the ground that the transfer would entail additional expense on their part and there were no clear guidelines and procedures for its implementation. Meanwhile, the expansion project of PT&T failed to materialize due to lack of capital. PT&T realized that it needed to undertake measures against losses to prevent the company from going bankrupt, particularly by reducing its workforce from 2,500 to 900 employees. Pursuant thereto, it implemented a Voluntary Staff Reduction Program (VSRP) which was availed of by 478 employees. Failing to attain its target, PT&T implemented an extended VSRP, but still not enough employees availed of the program. PT&T decided to implement a temporary retrenchment of some employees dubbed as Temporary Staff Reduction Program (TSRP) lasting for not more than five and a half (5½) months, to commence from September 1, 1998 to February 15, 1999. Pursuant to the program, affected employees would receive financial assistance equivalent to 15 days salary and a loan equivalent to two months salary chargeable to the account of the employee concerned. Bayao and Castillo received a Letter from Del Rosario, dated August 21, 1998, informing them that the cumulative net losses of PT&T for the last four years had reached P293.4 million and that they were among the employees affected by the TSRP. When Bayao and Castillo reported for work on September 2, 1998, they were informed that the position of account executive no longer existed; in its stead, the positions of Service Account Representatives (SAR) and

Service Account Specialists (SAS) were created per COG Bulletin Order No. 98-014 effective August 21, 1998, and had already been filled up. That same day, Bayao and Castillo promptly filed a complaint for illegal dismissal with the NLRC, Regional Arbitration Branch, Cordillera Administrative Region, against PT&T and Delia Oficial in her capacity as manager for Baguio City. Labor Arbiter Monroe C. Tabingan rendered a Decision in favor of Bayao and Castillo. PT&T and Oficial interposed their appeal to the NLRC. On October 12, 1999, the NLRC issued its Resolution dismissing the appeal and affirmed the decision of the Labor Arbiter, deleting, however, the award of legal interest, exemplary damages, indemnity and attorney’s fees for lack of merit. On July 31, 2000, the CA issued its Decision dismissing the petition and affirmed the findings of the NLRC. The CA declared that there was no valid ground for retrenchment, considering that when Bayao and Castillo returned, their positions were already filled up; at the same time, PT&T did not inform its employees and the Department of Labor and Employment (DOLE) of the scheduled retrenchment at least one month before its implementation. A motion for reconsideration was filed, but the same was denied by the CA. Hence this petition. I: WON the retrenchment program implemented by petitioner PT&T is valid. H: Retrenchment has been defined as the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted by management during periods of business recession, industrial depression, or seasonal fluctuations, or 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 of automation. It is a management prerogative resorted to by an employer to avoid or minimize business losses which is consistently recognized by the Court. The Court has previously ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. In this case, to prove that the company incurred losses, the petitioners presented its audited financial statements for the corporate fiscal years 1996 to 1998 and emphasized that, in the October 20, 1998 Audit Report prepared by SGV & Co., the auditing firm declared that petitioner PT&T incurred a substantial loss of about P558 million for the fiscal year ending June 30, 1998, resulting to a total deficit of about P574 million as of the same date; and that petitioner PT&T even negotiated with its creditors for the suspension of payments of its outstanding balances until the completion of an acceptable restructuring plan. The foregoing clearly indicates that the petitioner PT&T sufficiently complied with its burden to prove that it incurred substantial losses as to warrant the exercise of the extreme measure of retrenchment to prevent the company from totally going under.

While an employer may have a valid ground for implementing a retrenchment program, it is not excused from complying with the required written notice served both to the employee concerned and the DOLE at least one month prior to the intended date of retrenchment. The purpose of this requirement is not only to give employees some time to prepare for the eventual loss of their jobs and their corresponding income, look for other employment and ease the impact of the loss of their jobs but also to give the DOLE the opportunity to ascertain the verity of the alleged cause of termination. In the case at bar, the memorandum of Del Rosario, the vice-president of the COG, to respondents Bayao and Castillo informing the latter that they were included in the TSRP to be implemented effective September 1, 1998 was dated August 21, 1998. The said memorandum was received by Castillo on August 24, 1998 and Bayao on August 26, 1998. The respondents had barely two weeks’ notice of the intended retrenchment program. Clearly then, the one-month notice rule was not complied with. At the same time, the petitioners never showed that any notice of the retrenchment was sent to the DOLE. The petitioners’ adherence to the above pronouncement of the Court is misplaced. The particular issue involved in the said decision was the duration of the period of temporary lay-off, and not the compliance with the one month notice requirement. The requirement of notice to both the employees concerned and the Department of Labor and Employment (DOLE) is mandatory and must be written and given at least one month before the intended date of retrenchment. In this case, it is undisputed that the petitioners were given notice of the temporary lay-off. There is, however, no evidence that any written notice to permanently retrench them was given at least one month prior to the date of the intended retrenchment. The NLRC found that GTI conveyed to the petitioners the impossibility of recalling them due to the continued unavailability of work. But what the law requires is a written notice to the employees concerned and that requirement is mandatory. The notice must also be given at least one month in advance of the intended date of retrenchment to enable the employees to look for other means of employment and therefore to ease the impact of the loss of their jobs and the corresponding income. That they were already on temporary lay-off at the time notice should have been given to them is not an excuse to forego the one-month written notice because by this time, their lay-off is to become permanent and they were definitely losing their employment. There is also nothing in the records to prove that a written notice was ever given to the DOLE as required by law. Interestingly enough, the evidence on record indicates that respondents Bayao and Castillo were not merely temporarily laid-off. The October 26, 1998 Letter of Del Rosario addressed to the respondents clearly stated that the latter were to be considered separated from the company effective August 31, 1998 and that they were each being extended a separation package.

It must be stressed, however, that compliance with the one-month notice rule is mandatory regardless of whether the retrenchment is temporary or permanent. This is so because Article 283 itself does not speak of temporary or permanent retrenchment; hence, there is no need to qualify the term. Ubi lex non distinguit nec nos distinguere debemus (when the law does not distinguish, we must not distinguish). However, the employer’s failure to comply with the one month notice requirement prior to retrenchment does not render the termination illegal; it merely renders the same defective, entitling the dismissed employee to payment of indemnity in the form of nominal damages. Based on prevailing jurisprudence, the amount of indemnity is pegged at P30,000.00. Finally, since petitioner PT&T was able to establish that it incurred serious business losses, justifying the retrenchment, the final requisite is the payment of separation pay. Pursuant to Section 283 of the Labor Code, as amended, the retrenchment having been effected due to serious business losses, respondents Bayao and Castillo are each entitled to one month pay or to at least one-half month pay for every year of service, whichever is higher. A fraction of at least six months shall be considered one whole year. Petition partially granted. WILTSHIRE FILE CO INC v. NLRC | 193 SCRA 665 | February 7, 1991

FACTS - Private respondent Vicente T. Ong was the Sales Manager of petitioner Wiltshire File Co., Inc. ("Wiltshire") from 16 March 1981 up to 18 June 1985. On 13 June 1985, upon private respondent's return from a business and pleasure trip abroad, he was informed by the President of petitioner Wiltshire that his services were being terminated. Private respondent maintains that he tried to get an explanation from management of his dismissal but to no avail. On 18 June 1985, when private respondent again tried to speak with the President of Wiltshire, the company's security guard handed him a letter which formally informed him that his services were being terminated upon the ground of redundancy. - Private respondent filed, on 21 October 1985, a complaint before the Labor Arbiter for illegal dismissal alleging that his position could not possibly be redundant because nobody (save himself) in the company was then performing the same duties. Private respondent further contended that retrenching him could not prevent further losses because it was in fact through his remarkable performance as Sales Manager that the Company had an unprecedented increase in domestic market share the preceding year. For that accomplishment, he continued, he was promoted to Marketing Manager and was authorized by the President to hire four (4) Sales Executives five (5) months prior to his termination. - In its answer, petitioner company alleged that the termination of respondent's services was a cost-cutting measure: that in December 1984, the company had experienced an unusually low volume of orders: and that

it was in fact forced to rotate its employees in order to save the company. Despite the rotation of employees, petitioner alleged; it continued to experience financial losses and private respondent's position, Sales Manager of the company, became redundant. - On 2 December 1986, during the proceedings before the Labor Arbiter, petitioner, in a letter 1 addressed to the Regional Director of the then Ministry of Labor and Employment, notified that official that effective 2 January 1987, petitioner would close its doors permanently due to substantial business losses. - In a decision dated 11 March 1987, the Labor Arbiter declared the termination of private respondent's services illegal and ordered petitioner to pay private respondent backwages, unpaid salaries in the amount of, accumulated sick and vacation leaves in the amount of, hospitalization benefit package in the amount, unpaid commission in the amount of, moral damages in the amount of and attorney's fees in the amount of. On appeal by petitioner Wiltshire, the National Labor Relations Commission ("NLRC") affirmed in toto on 9 February 1988 the decision of the Labor Arbiter. - In this Petition for Certiorari, it is submitted that private respondent's dismissal was justified and not illegal. Petitioner maintains that it had been incurring business losses beginning 1984 and that it was compelled to reduce the size of its personnel force. Petitioner also contends that redundancy as a cause for termination does not necessarily mean duplication of work but a "situation where the services of an employee are in excess of what is demanded by the needs of an undertaking ISSUE: WON private respondent’s dismissal was justified on the ground of retrenchment HELD: YES - The Court resolved to grant due course to the Petition for Certiorari. The Resolutions of the National Labor Relations Commission dated 9 February 1988 and 7 March 1988 are hereby SET ASIDE and NULLIFIED. The Temporary Restraining Order issued by this Court on 21 March 1988 is hereby made PERMANENT. Ratio. Having reviewed the record of this case, the Court has satisfied itself that indeed petitioner had serious financial difficulties before, during and after the termination of the services of private respondent. For one thing, the audited financial statements of the petitioner for its fiscal year ending on 31 July 1985 prepared by a firm of independent auditors, showed a net loss in the amount of P4,431,321.00 and a total deficit or capital impairment at the end of year of P6,776,493.00. 2 In the preceding fiscal year (1983-1984), while the company showed a net after tax income of P843,506.00, it actually suffered a deficit or capital impairment of P2,345,172.00. Most importantly, petitioner Wiltshire finally closed its doors and terminated all operations in the Philippines on January 1987, barely two (2) years after the termination of private respondent's employment. We consider that finally shutting down business operations constitutes strong confirmatory evidence of petitioner's previous financial distress. The Court finds it very difficult to suppose that petitioner Wiltshire would take the final and irrevocable step of closing down its operations in

the Philippines simply for the sole purpose of easing out a particular officer or employee, such as the private respondent. - Turning to the legality of the termination of private respondent's employment, we find merit in petitioner's basic argument. The Court was unable to sustain public respondent NLRC's holding that private respondent's dismissal was not justified by redundancy and hence illegal. In the first place, while the letter informing private respondent of the termination of his services used the word "redundant", that letter also referred to the company having "incur[red] financial losses which [in] fact has compelled [it] to resort to retrenchment to prevent further losses". 3 Thus, what the letter was in effect saying was that because of financial losses, retrenchment was necessary, which retrenchment in turn resulted in the redundancy of private respondent's position. - In the second place, the Court does not believe that 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 wellorganized business enterprise, it would be surprising to find duplication of work and two (2) or more people doing the work of one person. Redundancy, for purposes of our 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, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. 4 The employer has no legal obligation to keep in its payroll more employees than are necessarily for the operation of its business. - In the third place, in the case at bar, petitioner Wiltshire, in view of the contraction of its volume of sales and in order to cut down its operating expenses, effected some changes in its organization by abolishing some positions and thereby effecting a reduction of its personnel. Thus, the position of Sales Manager was abolished and the duties previously discharged by the Sales Manager simply added to the duties of the General Manager, to whom the Sales Manager used to report. - It is of no legal moment that the financial troubles of the company were not of private respondent's making. Private respondent cannot insist on the retention of his position upon the ground that he had not contributed to the financial problems of Wiltshire. The characterization of private respondent's services as no longer necessary or sustainable, and therefore properly terminable, was an exercise of business judgment on the part of Petitioner Company. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. It should also be noted that the position held by private respondent, Sales Manager, was clearly managerial in character. De Ocampo v. NLRC, 213 SCRA 652

F: Petitioners Cecile de Ocampo, et. al. are employees of private respondent Baliwag Mahogany Corporation. They are either officers or members of the Baliwag Mahogany Corporation Union-CFW, the existing collective bargaining agent of the rank and file employees in the company. Private respondent Baliwag Mahogany Corporation is an enterprise engaged in the production of wooden doors and furniture and has a total workforce of about 900 employees. In 1988, private respondent Baliwag Mahogany Corporation (company) and Baliwag Mahogany Corporation Union-CFW (union) entered into a collective bargaining agreement containing, among other things, provisions on conversion into cash of unused vacation and sick leaves; grievance machinery procedure; and the right of the company to schedule work on Sundays and holidays. In November, 1989, the union made several requests from the company, one of which was the cash conversion of unused vacation and sick leave for 1987-1988 and 1988-1989. Acting on the matter, the company ruled to allow payment of unused vacation and sick leaves for the period of 19871988 but disallowed cash conversion of the 1988-1989 unused leaves. The company issued suspension orders affecting twenty (20) employees for failure to render overtime work on December 30, 1989. The suspension was for a period of three (3) days effective January 3, 1996 to January 5, 1990. On the same day, the union filed a notice of strike on the grounds of unfair labor practice particularly the violation of the CBA provisions on nonpayment of unused leaves and illegal dismissal of seven (7) employees in November, 1989. On January 13, 1990, the company issued a notice of termination to three (3) employees or union members, namely, Cecile de Ocampo, Rene Villanueva and Marcelo dela Cruz, of the machinery department, allegedly to effect cost reduction and redundancy. The members of the union conducted a picket at the main gate of the company on January 18, 1990. On the same day, the company filed a petition to declare the strike illegal with prayer for injunction against the union, Cecile de Ocampo, Wilfredo San Pedro and Rene Aguilar. An election of officers was conducted by the union on January 19, 1990. Consequently, Cecile de Ocampo was elected as president. During the conciliation meeting held at National Conciliation and Mediation Board (NCMB) on January 22, 1990 relative to the notice of strike filed by the union on January 3, 1990, the issue pertaining to the legality of the termination of three (3) union members was raised by the union. However, both parties agreed to discuss it separately. Subsequently, in a letter dated January 28, 1990, the union requested for the presence of a NCMB representative during a strike vote held by the union. The strike vote resulted to 388 votes out of 415 total votes in favor of the strike. Consequently, the union staged a strike on February 6, 1990.

On February 7, 1990, the company filed a petition to assume jurisdiction with the Department of Labor and Employment. On February 16, 1990, the company filed an amended petition, praying among other things, that the strike staged by the union on February 6, 1990 be declared illegal, there being no genuine strikeable issue and the violation of the no-strike clause of the existing CBA between the parties.

Unrebutted evidence shows that the individual petitioners defied the return-to-work order of the Secretary of Labor issued on February 15, 1990. As a matter of fact, it was only on February 23, 1990 when the barricades were removed and the main gate of the company was opened. Hence, the termination of the services of the individual petitioners is justified on this ground alone.

The Secretary of Labor in an order dated February 15, 1990, certified the entire labor dispute to the respondent Commission for compulsory arbitration and directed all striking workers including the dismissed employees to return to work and the management to accept them back. The company filed an urgent motion for assignment of a sheriff to enforce the order of the Secretary. In an order dated February 22, 1990, the Secretary of Labor directed Sheriff Alfredo Antonio, Jr., to implement the order.

Anent the contention that the respondent Commission gravely abused its discretion when it allowed the presentation of additional evidence to prove the loss suffered by the company despite the fact that they were mere afterthoughts and just concocted by the company, time and again, We emphasize that "technical rules of evidence are not binding in labor cases. Labor officials should use every and reasonable means to ascertain the facts in each case speedily and objectively, without regard to technicalities of law or procedure, all in the interest of due process" (Philippine Telegraph and Telephone Corporation v. National Labor Relations Commission, G.R. No. 80600, March 21, 1990, 183 SCRA 451, 457).

On February 23, 1990, the sheriff, with the assistance of the PC/INP of San Rafael, removed the barricades and opened the main gate of the company. Criminal complaints for illegal assembly, grave threats, and grave coercion were filed against Cecile de Ocampo, Timoteo Mijares, Modesto Mamesia and Domingo Silarde by the local police authorities on February 24, 1990. On February 25, 1990, the company caused the publication of his return to work order in two (2) newspapers, namely NGAYON and ABANTE. In its letter dated February 27, 1990, the union, through its President Cecile de Ocampo, requested the Regional Director of DOLE, Region III to intervene in the existing dispute with management. Meanwhile, the company extended the February 26, 1990 deadline for the workers to return to work until March 15, 1990. The respondent Commission rendered a decision on October 23, 1990, declaring the strikes staged on January 18, 1990 and February 6, 1990 illegal. Such decision prompted the company to file a motion for reconsideration substantially on the ground that public respondent seriously erred in not dismissing the employees particularly the union officers, who participated in the illegal strike. Petitioners filed an opposition to the company's motion for reconsideration and subsequently a supplemental comment/opposition to motion for reconsideration. I: Whether or not there is legal basis for declaring the loss of employment status by petitioners on account of the strike in respondent Company. H: Court finds the petition devoid of merit. The Solicitor General claims that it is undisputed that the union resorted to illegal acts during the strike arguing that private respondent's personnel manager specifically identified the union officers and members who committed the prohibited acts and actively participated therein. Moreover, the Solicitor General maintains that the illegality of the strike likewise stems from the failure of the petitioners to honor the certification order and heed the return-to-work order issued by the Secretary of Labor.

We believe that redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement 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 over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The employer had no legal obligation to keep in its payroll more employees, than are necessary for the operation of its business. (Wiltshire File Co., Inc. v. National Labor Relations Commission, G.R. No. 82249, February 7, 1991; 193 SCRA 665,672). The reduction of the number of workers in a company made necessary by the introduction of the services of Gemac Machineries in the maintenance and repair of its industrial machinery is justified. There can be no question as to the right of the company to contract the services of Gemac Machineries to replace the services rendered by the terminated mechanics with a view to effecting more economic and efficient methods of production. In the same case, We ruled that "(t)he characterization of (petitioners') services as no longer necessary or sustainable, and therefore properly terminable, was an exercise of business judgment on the part of (private respondent) company. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown". In contracting the services of Gemac Machineries, as part of the company's cost-saving program, the services rendered by the mechanics became redundant and superfluous, and therefore properly terminable. The company merely exercised its business judgment or management prerogative. Petition dismissed.

Maya Farms Employees Organization v. NLRC, 239 SCRA 508 F: Private respondents Maya Farms, Inc. and Maya Realty and Livestock Corporation belong to the Liberty Mills group of companies whose undertakings include the operation of a meat processing plant which produces ham, bacon, cold cuts, sausages and other meat and poultry products. Petitioners, on the other hand, are the exclusive bargaining agents of the employees of Maya Farms, Inc. and the Maya Realty and Livestock Corporation. On April 12, 1991, private respondents announced the adoption of an early retirement program as a cost-cutting measure considering that their business operations suffered major setbacks over the years. The program was voluntary and could be availed of only by employees with at least eight (8) years of service. Dialogues were thereafter conducted to give the parties an opportunity to discuss the details of the program. Accordingly, the program was amended to reduce the minimum requirement of eight (8) years of service to only five (5) years. However, the response to the program was nil. There were only a few takers. To avert further losses, private respondents were constrained to look into the companies' organizational set-up in order to streamline operations. Consequently, the early retirement program was converted into a special redundancy program intended to reduce the work force to an optimum number so as to make operations more viable. In December 1991, a total of sixty-nine (69) employees from the two companies availed of the special redundancy program. On January 17, 1992, the two companies sent letters to sixty-six (66) employees informing them that their respective positions had been declared redundant. The notices likewise stated that their services would be terminated effective thirty (30) days from receipt thereof. Separation benefits, including the conversion of all earned leave credits and other benefits due under existing CBAs were thereafter paid to those affected. On January 24, 1992, a notice of strike was filed by the petitioners which accused private respondents, among others, of unfair labor practice, violation of CBA and discrimination. Conciliation proceedings were held by the National Conciliation and Mediation Board (NCMB) but the parties failed to arrive at a settlement. On February 6, 1992, the two companies filed a petition with the Secretary of Labor and Employment asking the latter to assume jurisdiction over the case and/or certify the same for compulsory arbitration. Thus, on February 12, 1992, the then Acting Labor Secretary (now Secretary) Nieves Confesor certified the case to herein public respondent for compulsory arbitration.

On March 4, 1992, the parties were called to a hearing to identify the issues involved in the case. Thereafter, they were ordered to submit their respective position papers. In their position paper, petitioners averred that in the dismissal of sixty-six (66) union officers and members on the ground of redundancy, private respondents circumvented the provisions in their CBA. Petitioners also alleged that the companies' claim that they were in economic crisis was fabricated because in 1990, a net income of over 83 million pesos was realized by Liberty Flour Mills Group of Companies. Invoking the workers' constitutional right to security of tenure, petitioners prayed for the reinstatement of the sixty-six (66) employees and the payment of attorney's fees as they were constrained to hire the services of counsel in order to protect the workers' rights. On their part, private respondents contend that their decision to implement a special redundancy program was an exercise of management prerogative which could not be interfered with unless it is shown to be tainted with bad faith and ill motive. Private respondents explained that they had no choice but to reduce their work force, otherwise, they would suffer more losses. Furthermore, they denied that the program violated CBA provisions. NLRC favored the company. I: WON there was grave abuse of discretion amounting to lack or in excess of jurisdiction with the factual findings of public respondent H: The termination of the sixty-six employees was done in accordance with Article 283 of the Labor Code. The basis for this was the companies' study to streamline operations so as to make them more viable. Positions which overlapped each other, or which are in excess of the requirements of the service, were declared redundant. We fully agree with the findings and conclusions of the public respondent on the issue of termination. A close examination of the positions retained by management show that said positions such as egg sorter, debonner were but the minimal positions required to sustain the limited functions/operations of the meat processing department. In the absence of any evidence to prove bad faith on the part of management in arriving at such decision, which records on hand failed to show in instant case, the rationality of the act of management in this regard must be sustained. The rule is well-settled that labor laws discourage interference with an employer's judgment in the conduct of his business. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. As long as the company's exercise of the same is in good faith to advance its interest and not for the purpose of defeating or circumventing the rights of employees under the laws or valid agreements, such exercise will be upheld.

Finally, contrary to petitioners' contention, there is nothing on record to show that the 30-day notice of termination to the workers was disregarded and that the same substituted with separation pay by private respondents. As found by public respondent, written notices of separation were sent to the employees on January 17, 1992. The notices expressly stated that the termination of employment was to take effect one month from receipt thereof. Therefore, the allegation that separation pay was given in lieu of the 30-day notice required by law is baseless. Petition dismissed. GOLDEN THREAD KNITTING INDUSTIRES v. NLRC | 304 SCRA 720 | March 11, 1999

FACTS - several employees of Golden Thread Knitting Industries (GTK) were dismissed for different reasons. 2 employees were allegedly for slashing the company’s products (towels), 2 for redundancy, 1 for threatening the personnel manager and violating the company rules, and 1 for abandonment of work. - The laborers filed complaints for illegal dismissal. They allege that the company dismissed them in retaliation for establishing and being members of the Labor Union. GTK, on the other hand, contend that there were valid causes for the terminations. The dismissals were allegedly a result of the slashing of their products, rotation of work, which in turn was caused by the low demand for their products, and abandonment of work. WRT to the cases involving the slashing of their products and threats to the personnel manager, the dismissals were in effect a form of punishment. - The labor arbiter ruled partially in favor of GTK. He said that there was no showing that the dismissals were in retaliation for establishing a union. He, however, awarded separation pay to some employees. - NLRC, however, appreciated the evidence differently. It held that there was illegal dismissal and ordered reinstatement.

ISSUE: WON there was illegal dismissal

HELD: YES

Ratio Dismissal is the ultimate penalty that can be meted to an employee. It must therefore be based on a clear and not on an ambiguous or ambivalent ground. Reasoning - WRT to the case involving slashing of towels, the employees were not given procedural due process. There was no notice and hearing, only outright denial of their entry to the work premises by the security guards. The charges of serious misconduct were not sufficiently proved. - WRT to the employees dismissed for redundancy, there was also denial of procedural due process. Hearing and notice were not observed. Thus, although the characterization of an employee’s services is a management function, it must first be proved with evidence, which was not done in this case. the company cannot merely declare that it was overmanned. - WRT to the employee dismissed for disrespect, the SC believed the story version of the company (which essentially said that the personnel manager was threatened upon mere service of a suspension order to the employee), but ruled that the dismissal could not be upheld. “the dismissal will not be upheld where it appears that the employee’s act of disrespect was provoked by the employer. xxx the employee hurled incentives at the personnel manager because she was provoked by the baseless suspension imposed on her. The penalty of dismissal must be commensurate with the act, conduct, or omission to the employee.” - The dismissal was too harsh a penalty; a suspension of 1 week would have sufficed. “GTK exercised their authority to dismiss without due regard to the provisions of the Labor Code. The right to terminate should be utilized with extreme caution because its immediate effect is to put an end to an employee's present means of livelihood while its distant effect, upon a subsequent finding of illegal dismissal, is just as pernicious to the employer who will most likely be required to reinstate the subject employee and grant him full back wages and other benefits. Disposition Decision AFFIRMED LOPEZ SUGAR CORP v. FED OF FREE WORKERS PHILIPPINE LABOR UNION ASSOCIATION (PLUA NACUSIP) | 189 SCRA 179 | August 30, 1990 FACTS - Lopez Sugar Corporation (LPC), allegedly, to prevent losses due to major economic problems, and exercising its privilege under the 1975-1977 CBA entered into with PLUA-NACUSIP, caused the retrenchment and retirement of a number of its employees. - LPC filed with the MOLE a combined report on retirement and application for clearance to retrench affecting eighty six (86) of its employees. Of

these 86 employees, 59 were retired and 27 were to be retrenched in order to prevent losses. - Federation of Free Workers (FFW), as the certified bargaining agent of the rank-and-file employees of LPC, also filed with the MOLE a complaint for unfair labor practices and recovery of union dues. - In said complainant, FFW claimed that the terminations undertaken by LPC were violative of the security of tenure of its members and were intended to "bust" the union and hence constituted an unfair labor practice. - FFW claimed that after the termination of the services of its members, LPC advised 110 casuals to report to its personnel office. - FFW further argued that to justify retrenchment, serious business reverses must be "actual, real and amply supported by sufficient and convincing evidence." FFW prayed for reinstatement of its members who had been retired or retrenched. - LPC denied having hired casuals to replace those it had retired or retrenched. It explained that the announcement calling for 110 workers to report to its personnel office was only for the purpose of organizing a pool of extra workers which could be tapped whenever there were temporary vacancies by reason of leaves of absence of regular workers. - LA: denied LPC’ s application for clearance to retrench its employees on the ground that for retrenchment to be valid, the employer's losses must be serious, actual and real and must be amply supported by sufficient and convincing evidence. The application to retire was also denied on the ground that LPC's prerogative to so retire its employees was granted by the 1975-77 CBA had long ago expired. LPC was, therefore, ordered to reinstate 27 retired or retrenched employees represented by PLUAand FFW and to pay them full backwages from the time of termination until actual reinstatement. - On appeal, the NLRC, finding no justifiable reason for disturbing the decision of the Labor Arbiter, affirmed that decision ISSUE: WON NLRC acted with GAD in denying LPC’s combined report on retirement and application for clearance to retrench HELD NO - A283 of the LC provides: Article 283. Closure of establishment and reduction of personnel. — The employer may also terminate the employment of any employee due to the installation of labor saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employer at least one (1) month before the intended date thereof. In case of termination due to the installation of labor saving devices or redundancy, the worker affected thereby shall be entitled to a se pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases, of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the

separation pay shall be equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. - In ordinary connotation, the phrase "to prevent losses" means that retrenchment or termination of the services of some employees is authorized to be undertaken by the employer sometime before the losses anticipated are actually sustained or realized. It is not, in other words, the intention of the lawmaker to compel the employer to stay his hand and keep all his employees until sometime after losses shall have in fact materialized ; if such an intent were expressly written into the law, that law may well be vulnerable to constitutional attack as taking property from one man to give to another - When, or under what circumstances does the employer becomes legally privileged to retrench and reduce the number of his employees? - The general standards in terms of which the acts of petitioner employer must be appraised: 1) 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 bona fide nature of the retrenchment would appear to be seriously in question. 2) 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) Because of the consequential nature of retrenchment, it must be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs than labor costs. To impart operational meaning to the constitutional policy of providing "full protection" to labor, the employer's prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means — e.g., reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiencies, trimming of marketing and advertising costs, etc. — have been tried and found wanting. 4) If already realized, and the expected imminent losses sought to be forestalled, must be proved by sufficient and convincing evidence. The reason for requiring this quantum of proof is readily apparent: any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. -Garcia v. National Labor Relations Commissions: . . . But it is essentially required that the alleged losses in business operations must be prove[n] (NAFLU vs. Ople, [1986]). Otherwise, said ground for termination would be susceptible to abuse by scheming employers who might be merely feigning business losses or reverses in their business ventures in order to ease out employees .

- WON an employer would imminently suffer serious or substantial losses for economic reasons is essentially a question of fact for the Labor Arbiter and the NLRC to determine. - In the instant case, the LA found no sufficient and convincing evidence to sustain petitioner's essential contention that it was acting in order to prevent substantial and serious losses. - The principal difficulty with LPC' s case as above presented was that no proof of actual declining gross and net revenues was submitted. No audited financial statements showing the financial condition of petitioner corporation during the above mentioned crop years were submitted. - LPC conspicuous failed to specify the cost-reduction measures actually undertaken in good faith before resorting to retrenchment. Upon the other hand, it appears from the record that petitioner, after reducing its work force, advised 110 casual workers to register with the company personnel officer as extra workers. - LPC argued that it did not actually hire casual workers but that it merely organized a pool of "extra workers" from which workers could be drawn whenever vacancies occurred by reason of regular workers going on leave of absence but the LA and the NLRC did not accord much credit to LPC's explanation. *AS REGARDS the RETIREMENTS effected by LPC - On this point, SC finds for LPC saying that ”although the CBA expired on 31 December 1977, it continued to have legal effects as between the parties until a new CBA had been negotiated and entered into.” This proposition finds legal support in Article 253 of the Labor Code, which provides: Article 253 — Duty to bargain collectively when there exists a collective bargaining agreement. — When there is a collective bargaining agreement, the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. 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. (Emphasis supplied) - Accordingly, in the instant case, despite the lapse of the formal effectivity of the CBA by virtue of its own provisions, the law considered the same as continuing in force and effect until a new CBA shall have been validly executed. - Hence, LPC acted within legal bounds when it decided to retire several employees in accordance with the CBA. That the employees themselves similarly acted in accordance with the CBA is plain from the record. - Even after the expiration of the CBA, LPC's employees continued to receive the benefits and enjoy the privileges granted therein. If the workers chose to avail of the CBA despite its expiration, equity — if not the law—dictates that the employer should likewise be able to invoke the CBA. - The fact that several workers signed quitclaims will not by itself bar them from joining in the complaint. Quitclaims executed by laborers are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the worker's legal rights.

- AFP Mutual Benefit Association, Inc. v. AFP-MBAI-EU: In labor jurisprudence, it is well establish that quitclaims and/or complete releases executed by the employees do not estop them from pursuing their claims arising from the unfair labor practice of the employer. The basic reason for this is that such quitclaimants and/or complete releases are against public policy and, therefore, null and void. The acceptance of termination pay does not divest a laborer of the right to prosecute his employer for unfair labor practice acts. - Cariño vs. ACCFA, (1966) ~ Justice Sanchez, said: Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously, do not stand on the same footing The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of job, he had to face the harsh necessities of life. He thus found himself in no position to resist money proffered. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent their claim. They pressed it. They are deemed not to have waived any of their rights. Renuntiatio non praesumitur Disposition Petition for Certiorari is partially GRANTED and NLRC’ s decision affirming that portion of the Decision of the Labor Arbiter ordering the reinstatement judgment of employees who had been retired by LPC under the applicable provisions of the CBA is AFFIRMED. (*all illegally retrenched were ordered to be reinstated and given backwages; those who executed quitclaims-said amount shall be deducted from their backwages and where reinstatement is no longer possible, backwages + separation pay na lang. BUT those who were retired by LPC were found to be valid as per the CBA. Flight Attendants and Stewards Association of the Philippines v. PAL, 559 SCRA 252

F: On June 15, 1998, PAL retrenched 5,000 of its employees, including more than 1,400 of its cabin crew personnel, to take effect on July 15, 1998. PAL adopted the retrenchment scheme allegedly to cut costs and mitigate huge financial losses as a result of a downturn in the airline industry brought about by the Asian financial crisis. During said period, PAL claims to have incurred P90 billion in liabilities, while its assets stood at P85 billion. In implementing the retrenchment scheme, PAL adopted its so-called "Plan 14" whereby PAL's fleet of aircraft would be reduced from 54 to 14, thus requiring the services of only 654 cabin crew personnel. Prior to the full implementation of the assailed retrenchment program, FASAP and PAL conducted a series of consultations and meetings and explored all possibilities of cushioning the impact of the impending reduction in cabin crew personnel. However, the parties failed to agree on how the scheme

would be implemented. Thus PAL unilaterally resolved to utilize the criteria set forth in Section 112 of the PAL-FASAP Collective Bargaining Agreement (CBA) in retrenching cabin crew personnel: that is, that retrenchment shall be based on the individual employee's efficiency rating and seniority. PAL determined the cabin crew personnel efficiency ratings through an evaluation of the individual cabin crew member's overall performance for the year 1997 alone. The factors taken into account on whether the cabin crew member would be retrenched, demoted or retained were: 1) the existence of excess sick leaves; 2) the crew member's being physically overweight; 3) seniority; and 4) previous suspensions or warnings imposed. While consultations between FASAP and PAL were ongoing, the latter began implementing its retrenchment program by initially terminating the services of 140 probationary cabin attendants only to rehire them in April 1998. Moreover, their employment was made permanent and regular. On July 15, 1998, however, PAL carried out the retrenchment of its more than 1,400 cabin crew personnel. Meanwhile, in June 1998, PAL was placed under corporate rehabilitation and a rehabilitation plan was approved per Securities and Exchange Commission (SEC) Order dated June 23, 1998 in SEC Case No. 06-98-6004. On September 4, 1998, PAL, through its Chairman and Chief Executive Officer (CEO) Lucio Tan, made an offer to transfer shares of stock to its employees and three seats in its Board of Directors, on the condition that all the existing Collective Bargaining Agreements (CBAs) with its employees would be suspended for 10 years, but it was rejected by the employees. On September 17, 1998, PAL informed its employees that it was shutting down its operations effective September 23, 1998 despite the previous approval on June 23, 1998 of its rehabilitation plan. On September 23, 1998, PAL ceased its operations and sent notices of termination to its employees. Two days later, PAL employees, through the Philippine Airlines Employees Association (PALEA) board, sought the intervention of then President Joseph E. Estrada. PALEA offered a 10-year moratorium on strikes and similar actions and a waiver of some of the economic benefits in the existing CBA. Lucio Tan, however, rejected this counter-offer.

In a referendum conducted on October 2, 1998, PAL employees ratified the proposal. On October 7, 1998, PAL resumed domestic operations and, soon after, international flights as well. Meanwhile, in November 1998, or five months after the June 15, 1998 mass dismissal of its cabin crew personnel,

PAL began recalling to service those it had previously retrenched. Several of those retrenched were called back to service.

In December 1998, PAL submitted a "stand-alone" rehabilitation plan to the SEC by which it undertook a recovery on its own while keeping its options open for the entry of a strategic partner in the future. Accordingly, it submitted an amended rehabilitation plan to the SEC with a proposed revised business and financial restructuring plan, which required the infusion of US$200 million in new equity into the airline. On May 17, 1999, the SEC approved the proposed "Amended and Restated Rehabilitation Plan" of PAL and appointed a permanent rehabilitation receiver for the latter. On June 7, 1999, the SEC issued an Order confirming its approval of the "Amended and Restated Rehabilitation Plan" of PAL. In said order, the cash infusion of US$200 million made by Lucio Tan on June 4, 1999 was acknowledged. Respondent PAL is ordered to pay the separation benefits to those complainants who have not received their separation pay and to pay the balance to those who have received partial separation pay.

I: WON CA decided the case a quo in a way contrary to law and/or jurisprudence and WON PAL’s retrenchment scheme was justified.

H: It is a settled rule that in the exercise of the Supreme Court's power of review, the Court is not a trier of facts and does not normally undertake the re-examination of the evidence presented by the contending parties during trial. However, there are several exceptions to this rule such as when the factual findings of the Labor Arbiter differ from those of the NLRC, as in the instant case, which opens the door to a review by this Court.

The law recognizes the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability. 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. 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 employee's 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

FIRST ELEMENT: 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.

The law speaks of serious business losses or financial reverses. Sliding incomes or decreasing gross revenues are not necessarily losses, much less serious business losses within the meaning of the law. The fact that an employer may have sustained a net loss, such loss, per se, absent any other evidence on its impact on the business, nor on expected losses that would have been incurred had operations been continued, may not amount to serious business losses mentioned in the law. The employer must show that its losses increased through a period of time and that the condition of the company will not likely improve in the near future or that it expected no abatement of its losses in the coming years. The employer must also exhaust all other means to avoid further losses without retrenching its employees. Retrenchment is a means of last resort; it is justified only when all other less drastic means have been tried and found insufficient.

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. Records show that PAL was not even aware of its actual financial position when it implemented its retrenchment program. It embarked on the mass dismissal without first undertaking a well-considered study on the proposed retrenchment scheme. This view is underscored by the fact that previously, PAL terminated the services of 140 probationary cabin attendants, but rehired them almost immediately and even converted their

employment into permanent and regular, even as a massive retrenchment was already looming in the horizon.

Also, the claim that PAL saved P24 million monthly due to the implementation of the retrenchment program does not prove anything; it has not been shown to what extent or degree such savings benefited PAL, vis-a-vis its total expenditures or its overall financial position. Likewise, its claim that its liabilities reached P90 billion, while its assets amounted to P85 billion only - or a debt to asset ratio of more than 1:1 may not readily be believed, considering that it did not submit its audited financial statements. All these allegations are self-serving evidence. FOURTH ELEMENT: That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees' right to security of tenure. Concededly, retrenchment to prevent losses is an authorized cause for terminating employment and the decision whether to resort to such move or not is a management prerogative. However, the right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. On the requirement that the prerogative to retrench must be exercised in good faith, we have ruled that the hiring of new employees and subsequent rehiring of "retrenched" employees constitute bad faith; that the failure of the employer to resort to other less drastic measures than retrenchment seriously belies its claim that retrenchment was done in good faith to avoid losses; and that the demonstrated arbitrariness in the selection of which of its employees to retrench is further proof of the illegality of the employer's retrenchment program, not to mention its bad faith. When PAL implemented Plan 22, instead of Plan 14, which was what it had originally made known to its employees, it could not be said that it acted in a manner compatible with good faith. It offered no satisfactory explanation why it abandoned Plan 14; instead, it justified its actions of subsequently recalling to duty retrenched employees by making it appear that it was a show of good faith; that it was due to its good corporate nature that the decision to consider recalling employees was made. FIFTH ELEMENT: 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. In selecting employees to be

dismissed, fair and reasonable criteria must be used, such as but not limited to: (a) less preferred status (e.g., temporary employee), (b) efficiency and (c) seniority.

The appellate court held that there was no need for PAL to consult with FASAP regarding standards or criteria that the airline would utilize in the implementation of the retrenchment program; and that the criteria actually used which was unilaterally formulated by PAL using its Performance Evaluation Form in its Grooming and Appearance Handbook was reasonable and fair. Indeed, PAL was not obligated to consult FASAP regarding the standards it would use in evaluating the performance of the each cabin crew. However, we do not agree with the findings of the appellate court that the criteria utilized by PAL in the actual retrenchment were reasonable and fair. SC has repeatedly enjoined employers to adopt and observe fair and reasonable standards to effect retrenchment. This is of paramount importance because an employer's retrenchment program could be easily justified considering the subjective nature of this requirement. The adoption and implementation of unfair and unreasonable criteria could not easily be detected especially in the retrenchment of large numbers of employees, and in this aspect, abuse is a very distinct and real possibility. This is where labor tribunals should exercise more diligence; this aspect is where they should concentrate when placed in a position of having to judge an employer's retrenchment program. Moreover, in assessing the overall performance of each cabin crew personnel, PAL only considered the year 1997. This makes the evaluation of each cabin attendant's efficiency rating capricious and prejudicial to PAL employees covered by it. In sum, PAL's 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 attendant's respective service record, thereby disregarding seniority and loyalty in the evaluation of overall employee performance. Quitclaims executed as a result of PAL's illegal retrenchment program are likewise annulled and set aside because they were not voluntarily entered into by the retrenched employees; their consent was obtained by fraud or mistake, as volition was clouded by a retrenchment program that was, at its inception, made without basis. The law looks with disfavor upon quitclaims and releases by employees pressured into signing by

unscrupulous employers minded to evade legal responsibilities. As a rule, deeds of release or 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. The amounts already received by the retrenched employees as consideration for signing the quitclaims should, however, be deducted from their respective monetary awards. As to PAL's recall and rehire process (of retrenched cabin crew employees), the same is likewise defective. Considering the illegality of the retrenchment, it follows that the subsequent recall and rehire process is likewise invalid and without effect. A corporate officer is not personally liable for the money claims of discharged corporate employees unless he acted with evident malice and bad faith in terminating their employment. We do not see how respondent Patria Chiong may be held personally liable together with PAL, it appearing that she was merely acting in accordance with what her duties required under the circumstances. Being an Assistant Vice President for Cabin Services of PAL, she takes direct orders from superiors, or those who are charged with the formulation of the policies to be implemented. Petition granted.

Manatad v. PT&T, 548 SCRA 64

F: In September 1988, petitioner was employed by respondent Philippine Telegraph and Telephone Corporation (PT&T) as junior clerk with a monthly salary of P3, 839.74. She was later promoted as Account Executive, the position she held until she was temporarily laid off from employment on 1 September 1998. Petitioner temporary separation from employment was pursuant to the Temporary Staff Reduction Program adopted by respondent due to serious business reverses. On 16 November 1998, petitioner received a letter from respondent inviting her to avail herself of its Staff Reduction Program Package equivalent to one-month salary for every year of service, one and one-half month salary, pro-rated 13th month pay, conversion to cash of unused vacation and sick leave credits, and Health Maintenance Organization and group life insurance coverage until full payment of the separation package. Petitioner, however, did not opt to avail herself of the said package. On 26 February 1999, petitioner received a Notice of Retrenchment from respondent permanently dismissing her from employment effective 16 February 1999.

Petitioner filed illegal dismissal before the Labor Arbiter. Petitioner submitted evidence that the respondents have no grounds for retrenchment and that the company is not suffering from serious losses. However, the respondent also submitted financial reports to sustain its ground of a valid retrenchment. The Labor Arbiter held in favor of the petitioner which was affirmed by the NLRC. It further noted that the Department of Labor and Employment (DOLE) was not notified by the respondent of its retrenchment program as required by law.

business, no law can compel anybody to continue in it. It would indeed be stretching the intent and spirit of the law if we were to unjustly interfere with the management prerogative to close or cease its business operations, just because said business operations are not suffering any loss or simply to provide the workers continued employment.

On appeal to CA, the decision of the NLRC was reversed. It held that the company is suffering serious financial losses as reflected on its financial statements submitted and prepared by independent auditors of the company. Hence, this petition.

North Davao Mining v. NLRC (1996) 254 SCRA 721

I: Whether there is a valid retrenchment by the respondent company H: Pertinent provision is Article 283 of the Labor Code. 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. The financial statements reflect that respondent suffered substantial loss in the amount of P558 Million by 30 June 1998. The Report of SGV & Co. substantiates the alleged precarious financial condition of the respondent. The financial statements audited by independent external auditors constitute the normal method of proving the profit and loss performance of a company. The respondent complied with the requisite notices to the employee and the DOLE to effect a valid retrenchment. Petitioner failed to refute that she received the written notice of retrenchment from respondent on 16 November 1998. Although respondent failed to furnish DOLE with a formal letter notifying it of the retrenchment, it still substantially complied with the requirement. Since the National Conciliation and Mediation Board, the reconciliatory arm of DOLE, supervised the negotiation for separation package, we agree with the Court of Appeals that it would be superfluous to still require respondent to serve notice of the retrenchment to DOLE. In fact, even granting arguendo that respondent was not experiencing losses, it is still authorized by Article 283[26] of the Labor Code to cease its business operations. Explicit in the said provision is that closure or cessation of business operations is allowed even if the business is not undergoing economic losses. The owner, for any bona fide reason, can lawfully close shop anyone. Just as no law forces anyone to go into

Facts: Respondent Wilfredo Guillema is one among several employees of North Davao who were separated by reason of the company’s closure on May 31, 1992, and who were the complainants in the cases before the respondent labor arbiter. On May 31, 1992, petitioner North Davao completely ceased operations due to serious business reverses. From 1988 until its closure in 1992, North Davao suffered net losses averaging three billion pesos per year, for each of the five years prior to its closure. All told five months prior to its closure, its total liabilities had exceeded its assets by 20.392 billion pesos. When it ceased operations, its remaining employees were separated and given the equivalent of 12.5 days’ pay for every year of service, computed on their basic monthly pay, in addition to the commutation to cash of their unused vacation and sick leaves. However, it appears that, during the life of the petitioner corporation, from the beginning of its operations in 1981 until its closure in 1992, it had been giving separation pay equivalent to thirty days’ pay for every year of service. Moreover, the employees had to collect their salaries at a bank in Tagum, Davao del Norte, and some 58 kilometers from their workplace and about 2 ½hours’ travel time by public transportation; this arrangement lasted from 1981 up to 1990. Subsequently, a complaint was filed with respondent labor arbiter by respondent Wilfredo Guillema and 271 other separated employees for additional separation pay; back wages; transportation allowance; hazard pay; etc., amounting to P58, 022,878.31. Issue: WON the time spent in collecting wages in a place other than the place of employment is compensable notwithstanding that the same is done during official time. Held: Hours spent by complainants in collecting salaries shall be considered compensable hours worked. It is undisputed that because of security reasons, from the time of its operations, petitioner NDMC maintained its policy of paying its workers at a bank in Tagum, Davao del Norte, which usually took the workers about

two and a half (2 1/2) hours of travel from the place of work and such travel time is not official. Records also show that on February 12,1992, when an inspection was conducted by the Department of Labor and Employment at the premises of petitioner NDMC at Amacan, Maco, Davao del Norte, it was found out that petitioners had violated labor standards law, one of which is the place of payment of wages. Section 4, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code provides that: Place of payment. - (a) As a general rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the workplace shall be permissible only under the following circumstances: (1) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat impossible; (2) When the employer provides free transportation to the employees back and forth; and (3) Under any analogous circumstances; provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked. Considering further the distance between Amacan, Maco to Tagum which is 2½ hours by travel and the risks in commuting all the time in collecting complainants’ salaries, would justify the granting of backwages equivalent to 2 days in a month. ESCAREAL v. NLRC (PHILIPPINE REFINING CO INC) | 213 SCRA 472 | September 2, 1992

FACTS - Escareal was hired by the PRC for the position of Pollution Control Manager effective on 16 September 1977 with a starting monthly pay of P4,230 00; the employment was made permanent effective on 16 March 1978. The contract of employment provides, inter alia, that his "retirement date will be the day you reach your 60th birthday, but there is provision (sic) for voluntary retirement when you reach your 50th birthday. Bases for the hiring of Escareal are LOI No. 588 implementing the National Pollution Control Decree, P.D No. 984, and Memorandum Circular No. 02, implementing LOI No. 588, which amended Memorandum Circular No. 007, Series of 1977, issued by the National Pollution Control Commission (NPCC). - 1 April 1979: Escareal was also designated as Safety Manager pursuant to Article 162 of the Labor Code (P.D. 442, as amended) and the pertinent

implementing rule thereon. At the time of such designation, Escareal was duly accredited as a Safety Practitioner by the Bureau of Labor Standards, Department of Labor and Employment (DOLE) and the Safety Organization of the Philippines. - In addition, the pertinent rules on Occupational Health and Safety implementing the Labor Code provide for the designation of full-time safety men to ensure compliance with the safety requirements prescribed by the Bureau of Labor Standards. Consequently, Escareal's designation was changed to Pollution Control and Safety Manager. - In the course of his employment, Escareal's salary was regularly upgraded; the last pay hike was granted on 28 March 1988 when he was officially informed that his salary was being increased to P23,100.00 per month effective 1 April 1988. This last increase is indisputably a far cry from his starting monthly salary of P4,230.00. - Sometime in the first week of November 1987, PRC's Personnel Administration Manager George B. Ditching informed Escareal about the company's plan to declare the position of Pollution Control and Safety Manager redundant. Ditching attempted to convince Escareal to accept the redundancy offer or avail of the company's early retirement plan. Escareal refused and instead insisted on completing his contract as he still had about three and a half (3 1/2) years left before reaching the mandatory retirement age of sixty (60). - 15 June 1988: Escareal's immediate superior, PRC's Engg Dept Manager Jesus P. Javelona, formally informed Escareal that the position of "Safety and Pollution Control Manager will be declared redundant effective at the close of work hours on 15th July 1988." Escareal was also notified that the functions and duties of the position to be declared redundant will be absorbed and integrated with the duties of the Industrial Engineering Manager; as a result thereof, Escareal "will receive full separation benefits provided under the PRC Retirement Plan and additional redundancy payment under the scheme applying to employees who are 50 years old and above and whose jobs have been declared redundant by Management." - Escareal protested his dismissal via his 22 June 1988 letter to Javelona. This notwithstanding, the PRC unilaterally circulated a clearance dated 12 July 1988, to take effect on 15 July 1988, indicating therein that its purpose is for Escareal's "early retirement" and not redundancy. Escareal confronted Javelona; the latter, in his letter dated 13 July 1988, advised the former that the employment would be extended for another month, or up

to 15 August 1988. Escareal responded with a letter dated 25 July 1988 threatening legal action. - 14 July 1988: PRC's Industrial Relations Manager Bernardo N. Jambalos III sent a Notice of Termination to the DOLE informing the latter that Escareal was being terminated on the ground of redundancy effective 16 August 1988. - 5 August 1988:Escareal had a meeting with Cesar Bautista and Dr. Reynaldo Alejandro, PRC's President and Corporate Affairs Director, respectively. To his plea that he be allowed to finish his contract of employment as he only had three (3) years left before reaching the mandatory retirement age, Bautista retorted that the termination was final. - 8 August 1988: Escareal presented to Javelona a computation showing the amount of P2,436,534.50 due him (Escareal) by way of employee compensation and benefits. - On the date of the effectivity of his termination, Escareal was only fiftyseven (57) years of age. He had until 21 July 1991, his sixtieth (60th) birth anniversary, before he would have been compulsorily retired. Also, on the date of effectivity of Escareal's termination, 16 August 1988, (UP Chemical Engg graduate) Miguelito S. Navarro, PRC's Industrial Engineering Manager, was designated as the Pollution Control and Safety Officer. - In view of all this, Escareal filed a complaint for illegal dismissal with damages against the private respondent PRC before the NLRC. Labor Arbiter Manuel P. Asuncion rendered a decision ordering PRC to pay Escareal his redundancy pay in accordance with existing company policy on the matter, without prejudice to the grant of additional benefits offered by PRC during the negotiation stage of the case, though it never materialized for failure of the parties to reach an agreement.

2. WON Escareal's right to security of tenure was violated by PRC 3. WON Escareal's employment was for a fixed definite period to end at his 60th birthday because of the stipulation as to the retirement age of sixty (60) years 4. WON Escareal is entitled to backwages and retirement benefits 5. WON Escareal is entitled to damages and attorney's fees

HELD 1. NO - Wiltshire File Co., Inc. vs. NLRC: 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; a position is redundant when it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as 257the overhiring of workers, a decreased volume of business or the dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. - Redundancy in an employer's personnel force, however, does not necessarily or even ordinarily refer to duplication of work. That no other person was holding the same position which the dismissed employee held prior to the termination of his services does not show that his position had not become redundant.

ISSUES

- PRC had no valid and acceptable basis to declare the position of Pollution Control and Safety Manager redundant as the same may not be considered as superfluous; said positions are required by law. Thus, it cannot be gainsaid that the services of Escareal are in excess of what is reasonably required by the enterprise. Otherwise, PRC would not have allowed ten (10) long years to pass before opening its eyes to that fact; neither would it have increased the Escareal's salary to P23,100.00 a month effective 1 April 1988. That Escareal's positions were not duplicitous is best evidenced by PRC's recognition of their imperative need thereof, this is underscored by the fact that Miguelito S. Navarro, the company's Industrial Engineering Manager, was designated as Pollution Control and Safety Manager on the very same day of Escareal's termination.

1. WON PRC had valid and acceptable basis to declare the position of Pollution Control and Safety Manager redundant

- Indeed, the proposition that a department manned by a number of engineers presumably because of the heavy workload, could still take on

- On appeal, NLRC affirmed the Labor Arbiter's decision, with modification ordering PRC to pay Escareal his retirement pay in accordance with the company policy and other benefits granted to him thereunder, less outstanding obligations of the complainant with the company at the time of his dismissal. Separate MFRs of PRC and Escareal were both dismissed. Hence, this petition.

the additional responsibilities which were originally reposed in an altogether separate section headed by Escareal, is difficult to accept.

merely trying to avoid paying the retirement benefits Escareal stood to receive upon reaching the age of sixty (60). PRC acted in bad faith.

- If PRC felt that either Escareal was incompetent or that the task could be performed by someone more qualified, then why is it that the person designated to the position hardly had any experience in the field concerned? And why reward Escareal, barely five (5) months before the dismissal, with an increase in salary?

3. NO

- If based on the ground of redundancy, such a move would be invalid as the creation of said position is mandated by the law; the same cannot therefore be declared redundant. - If the aim was to generate savings in terms of the salaries that PRC would not be paying Escareal any more as a result of the streamlining of operations for improved efficiency, such a move could hardly be justified in the face of PRC's hiring of ten (10) fresh graduates for the position of Management Trainee and advertising for vacant positions in the Engineering/Technical Division at around the time of the termination. - There would seem to be no compelling reason to save money by removing such an important position. As shown by their recent financial statements, PRC's year-end net profits had steadily increased from 1987 to 1990. - While concededly, Article 283 of the Labor Code does not require that the employer should be suffering financial losses before he can terminate the services of the employee on the ground of redundancy, it does not mean either that a company which is doing well can effect such a dismissal whimsically or capriciously. The fact that a company is suffering from business losses merely provides stronger justification for the termination. 2. YES - It is evident that Escareal's right to security of tenure was violated by the private respondent PRC. Both the Constitution (Section 3, Article XIII) and the Labor Code (Article 279, P.D. 442, as amended) enunciate this right as available to an employee. - Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis. - In this regard, it could be concluded that the respondent PRC was merely in a hurry to terminate the services of Escareal as soon as possible in view of the latter's impending retirement; it appears that said company was

- There is no indication that PRC intended to offer uninterrupted employment until Escareal reached the mandatory retirement age, the contract of employement merely informs Escareal of the compulsory retirement age and the terms pertaining to the retirement. - The letter to Escareal confirming his appointment does not categorically state when the period of employment would end. It stands to reason then that Escareal's employment was not one with a specific period. 4. YES - Article 279, LC: 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." - Torillo vs. Leagardo, Jr. / Santos vs. NLRC: "The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. xxx Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. xxx Put a little differently, payment of backwages is a form of relief that restores the income that was lost by reason of unlawful dismissal, separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job." - Reinstatement of Escareal would have been proper. However, since he reached the mandatory retirement age on 21 July 1991, reinstatement is no longer feasible. He should thus be awarded his backwages from 16 August 1988 to 21 July 1991, inclusive of allowances and the monetary equivalent of the other benefits due him for that period, plus retirement benefits under the PRC's compulsory retirement scheme which he would have been entitled to had he not been illegally dismissed. 5. NO

- In his complaint and the attached Affidavit-Complaint, Escareal does not mention any claim for damages and attorney s fees; furthermore, no evidence was offered to prove them. An award therefor would not be justified. Disposition Petition granted.

ISSUES 1. WON there was an employer-employee relationship between petitioners and respondent Sahot (or WON Sahot is an “industrial partner” of the petitioners) 2. WON there was a valid dismissal 3. WON Sahot is entitled to separation pay

SY v. CA | 398 SCRA 301 | February 27, 2003 HELD FACTS - Respondent Jaime Sahot started working as a truck helper for the petitioner when he was 23. Later on the company were renamed several times until it became SBT Trucking Corporation. For 36 years before his dismissal, respondent continuously served the trucking business of the petitioners. - in 1994, Sahot was 59 years old, he had been incurring absences as he was suffering from various ailments, particularly the pain in his left thigh. He filed a week-long leave when he was treated for his various ailments. He filed a formal request for extension of his leave, and during this time he was threatened that if he refused to go back to work he would be terminated. He could not retire on pension because petitioners never paid his correct SSS premiums. He could no longer work as his left thigh hurt abominably. Eventually petitioners dismissed him from work on June 30. - Sahot filed a complaint for illegal dismissal. Petitioners claim that Sahot was their “industrial partner”; that respondent only became their employee in 1994; that Sahot went on leave and never reported back to work nor did he file an extension of his leave (therefore, should be deemed to have voluntarily resigned) - LA: pro-petitioners (no illegal dismissal, they were industrial partners, but still pay financial assistance) - NLRC: pro-respondent (employee, no abandonment of job, entitled to separation pay for 29 years) - CA: affirmed with modification (employee, with separation pay for 36 years)

1. YES. No partnership, Sahot was employee. Ratio: The elements to determine the existence of an employment relationship are: (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’s conduct. 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 it. Reasoning - Private respondent actually engaged in work as an employee: he did not have the freedom to determine where he would go, what he would do, and how he would do it; merely followed instructions of petitioners as long as he was paid his wages. - ON PARTNERSHIP: A1767, NCC- contract of partnership is where 2 or more persons bind themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits among themselves. …as applied in this case: no written agreement exist to prove partnership; no proof respondent was receiving a share in the profits, no proof that he actively participated in the management, administration and adoption of policies of the business. - “if doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter 2. NO

Ratio In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made. A277, LC puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employee’s dismissal to be valid, (a) the dismissal must be for a valid cause, and (b) the employee must be afforded due process.

…as applied in the case: entitled to separation pay computed at P2,080 times 36 years or P74, 880. Disposition petition is DENIED and the decision of the Court of Appeals dated February 29, 2000 is AFFIRMED. Petitioners must pay private respondent Jaime Sahot his separation pay for 36 years of service at the rate of one-half monthly pay for every year of service, amounting to P74, 880.00, with interest of six per centum (6%) per annum from finality f this decision until fully paid.

Reasoning - ON VALID CAUSE: if disease as a ground for termination, refer to A284, LC and Sec8, Book VI, Rule I of the Omnibus Implementing Rules of the Labor Code where a certification by competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of 6 months even with proper medical treatment. If curable, then employee would be required to take a leave, then reinstate to formal position upon restoration of his normal health. The requirement for a medical certificate 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. …as applied in the case: petitioners did not comply with the medical certificate requirement before Sahot’s dismissal was effected - ON DUE PROCESS: The employer is required to furnish an employee with 2 written notices before the latter is dismissed: (1) the notice to apprise the employee of the particular acts or omissions for which his dismissal is sought, which is the equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the employee has been given reasonable opportunity to answer and to be heard on his defense. …as applied in the case: No notice given, but instead what they did to threaten the employee with dismissal, then actually implement the threat when the occasion presented itself because of private respondent’s painful left thigh 3. YES Ratio. An employee who is terminated because of disease is entitled to “separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater.

Assailed in the present petition are the Decision[1] and Resolution[2] of the Court of Appeals (CA) dated February 16, 2005 and August 2, 2005, respectively, in CA-G.R. SP No. 79105. The CA Decision modified the March 31, 2003 Decision of the National Labor Relations Commission (NLRC) in NLRC NCR CA 028050-01, while the CA Resolution denied petitioner's Motion for Reconsideration. Villaruel v. Yeo Han Guan | GR 169191 | June 1, 2011 F: On February 15, 1999, herein petitioner filed with the NLRC, National Capital Region, Quezon City a Complaint[3] for payment of separation pay against Yuhans Enterprises. Subsequently, in his Amended Complaint and Position Paper dated December 6, 1999, petitioner alleged that in June 1963, he was employed as a machine operator by Ribonette Manufacturing Company, an enterprise engaged in the business of manufacturing and selling PVC pipes and is owned and managed by herein respondent Yeo Han Guan. Over a period of almost twenty (20) years, the company changed its name four times. Starting in 1993 up to the time of the filing of petitioner's complaint in 1999, the company was operating under the name of Yuhans Enterprises. Despite the changes in the company's name, petitioner remained in the employ of respondent. 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.

On the other hand, respondent averred in his Position Paper[5] that petitioner was hired as machine operator from March 1, 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 was later caught by surprise when petitioner filed the instant case for recovery of separation pay. Respondent claimed that he never 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. On November 27, 2000, the Labor Arbiter handling the case rendered judgment in favor of petitioner. Aggrieved, respondent filed an appeal with the NLRC which also dismissed the petition. On March 31, 2003, the Third Division of the NLRC rendered its Decision dismissing respondent's appeal and affirming the Labor Arbiter's Decision. In the CA, petition was partially granted.

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. By way of exception, this Court has allowed grants of separation pay to stand as "a measure of social justice" where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. 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.

I: WON respondent, in fact, dismissed petitioner from his employment. H: The Court finds no convincing justification, in the Decision of the Labor Arbiter on why petitioner is entitled to such pay. In the same manner, the NLRC Decision did not give any rationalization as the gist thereof simply consisted of a quoted portion of the appealed Decision of the Labor Arbiter. On the other hand, 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. 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.

Since petitioner was not terminated from his employment and, instead, is deemed to have resigned there from, he is not entitled to separation pay under the provisions of the Labor Code. But we must stress that this Court did allow, in several instances, the grant of financial assistance as a measure of social justice and exceptional circumstances, and as an equitable concession. The instant case equally calls for balancing the interests of the employer with those of the worker, if only to approximate what Justice Laurel calls justice in its secular sense. In the present case, respondent had been employed with the petitioner for almost twelve (12) years. On February 13, 1996, he suffered from a "fractured left transverse process of fourth lumbar vertebra," while their vessel was at the port of Yokohama, Japan. After consulting a doctor, he was required to rest for a month. When he was repatriated to Manila and examined by a company doctor, he was declared fit to continue his work. When he reported for work, petitioner refused to employ him despite the assurance of its personnel manager. Respondent patiently waited for more than one year to embark on the vessel as 2nd Engineer, but the position was not given to him, as it was occupied by another person known to one of the stockholders. Consequently, for having been deprived of continued employment with petitioner's vessel, respondent opted to apply for optional retirement. In addition, records show that respondent's seaman's

book, as duly noted and signed by the captain of the vessel was marked "Very Good," and "recommended for hire." Moreover, respondent had no derogatory record on file over his long years of service with the petitioner. Considering all of the foregoing and in line with Eastern, the ends of social and compassionate justice would be served best if respondent will be given some equitable relief. Thus, the award of P100, 000.00 to respondent as financial assistance is deemed equitable under the circumstances. Petition denied.

AGABON v. NATIONAL LABOR RELATIONS | 442 SCRA 573 | November 17, 2004 FACTS - On January 2, 1992, petitioners Jenny Agabon and Virgilio Agabon were hired as gypsum board and cornice installers by respondent Riviera Home Improvements, Inc., a corporation engaged in the business of selling and installing ornamental and construction materials. Seven (7) years later, on February 23, 1999, their services were terminated on the ground of abandonment of work. Apparently, petitioners were subcontracting installation jobs for another company and were frequently absent from work. Thus, when petitioners reported for work on February 23, 1999, respondent company refused to reemploy them unless they agree to work on a “pakyaw” basis. Petitioners demurred since this would mean losing their benefits. They were given their walking papers without according them the twin requirements of notice and hearing. Respondent company stated that they abandon their jobs. Hence, petitioners filed a complaint for illegal dismissal and payment of money claims against respondent company. - On December 28, 1999, the Labor Arbiter held that the dismissal of petitioners was illegal and ordered respondent company to pay them backwages, holidy and service incentive leave pay, and separation pay in lieu of reinstatement. On appeal, the NLRC reversed the decision of the Labor Arbiter and ruled that the latter erred in awarding backwages and separation pay to petitioners who deliberately abandoned their work. On certiorari, the Court of Appeals affirmed the findings of the NLRC but ordered respondent company to pay petitioners their money claims.

ISSUES 1. WON petitioners were illegally dismissed from the service 2. WON private respondent should be held liable for non-compliance with the procedural requirements of due process

HELD 1. NO. Ratio: To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter’s representative in connection with the employee’s work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. - In this case, Agabon abandoned their job. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employeremployee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. 2. YES - Where the dismissal is for a 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 statutory rights. *

It is worth noting that this ruling has evolved through times.

> Prior to 1989 - the rule was that a dismissal or termination is illegal if the employee was not given any notice. > In the 1989 case of Wenphil Corp. v. National Labor Relations Commission - where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule. > On January 27, 2000, in Serrano - violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause. Reasoning a. Constitutional due process is different from statutory due process. The former protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. b. The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case. Disposition DENIED. But the private respondent is ORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for noncompliance with statutory due process.

Jaka Food Processing Corp. v. Pacot, GR 151378, March 28, 2005

Facts: - Respondents were employees of Jaka because the company was in dire financial straits. - However, the termination was effected without Jaka complying with the requirement regarding the service of written notice upon the employees

and the DOLE at least one month before the intended date of termination. - The respondents filed a complaint with the Labor Arbiter who ruled in favor of the respondents. - The NLRC initially affirmed the decision of the Labor Arbiter but subsequently reversed it decision upon the filing of a Motion for Reconsideration. On appeal, the Court of Appeals reversed the decision of the NLRC based on the ruling of the SC in the case of Serrano vs. NLRC.

Issue: What are the legal implications when an employee is dismissed without complying with the notice requirement under the Labor Code?

Held: - The difference between this case and the case of Agabon vs. NLRC is that this case involves an authorized cause (particularly retrenchment) under Art. 283 while the Agabon case involves a just cause under Art. 282. The difference between the two is that in a just cause, the employee is the direct cause of the termination, while in an authorized cause, the main actor is usually the employer. - Because of the distinction, the SC held that if the dismissal is based on a just cause under 282 and the employer failed to comply with the notice requirement, the sanction on the employer should be tempered because the dismissal was initiated by an act imputable to the employee. On the other hand, if the cause of the dismissal is one of the authorized causes under 283, failure of the employer to comply with the notice requirement should merit a stiffer sanction because the dismissal process was initiated by the employer’s exercise of management prerogative. In this case, the dismissal of the respondents was indeed caused by retrenchment due to financial losses of the company (one of the authorized causes). Therefore, Jaka is ordered to pay P50,000 as indemnity (this is greater than the P30,000 indemnity for failure to comply with the notice requirement if the dismissal is due to a just cause as held in the case of Agabon).

Perez v. PT&T, GR 152048, April 7, 2009

Facts: - Perez and Doria were employed by PT&T as shipping clerk and supervisor, respectively. Pursuant to an unsigned letter, investigations were commenced by the company, yielding findings that hipping Section jacked up the value of the freight costs for goods shipped and that the duplicates of the shipping documents allegedly showed traces of tampering, alteration and superimposition. Petitioners were placed on preventive suspension for 30 days. The 15-day suspension was extended twice. A memorandum was issued charging criminal charges against petitioners and mandating their dismissal for falsification of documents. Thus, petitioners filed a complaint for illegal suspension and illegal dismissal. - Labor Arbiter: found that the 30-day extension of petitioners’ suspension and their subsequent dismissal were both illegal. - NLRC: Reversed. CA: Affirmed NLRC

The alterations on the shipping documents could not reasonably be attributed to petitioners because it was never proven that petitioners alone had control of or access to these documents. Unless duly proved or sufficiently substantiated otherwise, impartial tribunals should not rely only on the statement of the employer that it has lost confidence in its employee.

-No. Respondents’ illegal act of dismissing petitioners was aggravated by their failure to observe due process. To meet the requirements of due process in the dismissal of an employee, an employer must furnish the worker with two written notices: (1) a written notice specifying the grounds for termination and giving to said 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.

Issues: 1. Was there just cause for dismissal? 2. Was due process observed? 3. Is a hearing (or conference) mandatory in cases involving the dismissal of an employee? 4. Were petitioners illegally suspended?

Held: -No. Without undermining the importance of a shipping order or request, we find respondents’ evidence insufficient to clearly and convincingly establish the facts from which the loss of confidence resulted. Other than their bare allegations and the fact that such documents came into petitioners’ hands at some point, respondents should have provided evidence of petitioners’ functions, the extent of their duties, the procedure in the handling and approval of shipping requests and the fact that no personnel other than petitioners were involved. There was, therefore, a patent paucity of proof connecting petitioners to the alleged tampering of shipping documents.

Petitioners were neither apprised of the charges against them nor given a chance to defend themselves. They were simply and arbitrarily separated from work and served notices of termination in total disregard of their rights to due process and security of tenure. - Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code itself provides that the so-called standards of due process outlined therein shall be observed "substantially," not strictly. This is recognition that while a formal hearing or conference is ideal, it is not an absolute, mandatory or exclusive avenue of due process. -

An employee may be validly suspended by the employer for just cause provided by law. Such suspension shall only be for a period of 30 days, after which the employee shall either be reinstated or paid his wages during the extended period.

In this case, petitioners contended that they were not paid during the two 15-day extensions, or a total of 30 days, of their preventive suspension. Respondents failed to adduce evidence to the contrary. Where the dismissal was without just or authorized cause and there was no due process, Article 279 of the Labor Code, as amended, mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other

benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In this case, however, reinstatement is no longer possible because of the length of time that has passed from the date of the incident to final resolution. Fourteen years have transpired from the time petitioners were wrongfully dismissed. To order reinstatement at this juncture will no longer serve any prudent or practical purpose.

GLAXO WELLCOME PHILIPPINES INC v. NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA, 453 SCRA 256 | March 11, 2005

FACTS - Union NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA (NEW-DFA) filed a Petition for Certification Election with the DOLE-NCR seeking to represent the bargaining unit comprised of all the regular rank-and-file employees of [petitioner] company GLAXO-WELLCOME. - Several days before the election GLAXO-WELLCOME issued a circular relative to the improvement of the company’s retirement policy bringing different employees to different resorts. - In the meantime, GLAXO-WELLCOME adopted a new Car Allocation Policy. Under the provisions of the said car plan, a prioritization schedule in the assignment of company vehicles is to be fixed based on the sales performance of the employees. Pursuant to the same, several company cars had to be re-assessed and re-assigned in favor of other employees more qualified under the priority list. Incidentally, included among the vehicles that had to be re-allocated in accordance with the priority schedule of the new car plan were [those] of union officers Norman Cerezo and Jossie Roda de Guzman. - Accordingly, a memorandum was sent by the company to [Respondent] de Guzman advising her that she would have to surrender the vehicle assigned to her in light of the new car policy. De Guzman refused to turn over said car and instead sought reconsideration from the company’s National Sales Manager. The latter did not accede to de Guzman’s request. De Guzman, thru counsel, wrote the company, asking that the withdrawal of her car be held in abeyance. The company, however, rejected her petition. On December 7, 1990, de Guzman received another memorandum from the company, again instructing her to return the vehicle. The following day, de Guzman sent a letter to the company

reiterating her plea for the suspension of the withdrawal of her car. On December 17, 1990, a final warning was sent to de Guzman instructing her to return her assigned vehicle or else she would be charged for insubordination and be dismissed. Finally, because of de Guzman’s staunch refusal to comply with the order, through a letter dated December 20, 1990, she was cited, and at the same time, terminated for gross insubordination. Norman Cerezo was of the same case. - The Union alleged undue interference due to a massive electioneering and manipulative acts of GLAXO-WELLCOME prior to and during the certification election and that the new Car Allocation Policy adopted by the company was intended to harass, retaliate and discriminate against union officers and members. Union also challenged the legality of the suspension and dismissal of two of its officers, namely: Norman Cerezo and Jossie Roda de Guzman. It argued that the suspension and dismissal were effected without any prior hearing (Which was the only sticking issue in this case). - Labor Arbiter dismissed the charges of unfair labor practice, illegal dismissal and illegal suspension filed against GLAXO-WELLCOME by union. NLRC affirmed the dismissal of the complaint. NLRC likewise denied the motion for reconsideration.The CA affirmed the ruling of the National Labor Relations Commission (NLRC) adopted the findings of the labor arbiter. It held that respondents had failed to proffer convincing evidence to prove that petitioner’s assailed acts were ill-motivated and deliberately orchestrated to interfere with or otherwise influence the conduct of the certification elections. - Moreover, the CA ruled that there was nothing objectionable per se about the programs or incentive schemes that the company had provided for the employees. The appellate court said that the grant of benefits to the employees, as well as the adoption of the Car Allocation Policy, constituted a proper exercise of the company’s management prerogatives. This plain company practice had been set up to make petitioner’s employee benefits competitive with those of other pharmaceutical corporations. De Guzman and Cerezo were among those adversely affected by the policy, because they had failed to meet the sales performance required thereunder, not because they were officers of the union. - However, the CA held that the dismissal of De Guzman and the suspension of Cerezo had not been validly effected. Opining that their defiant actuation toward management constituted willful disobedience, which was a just cause for the termination of their employment, the appellate court conceded the validity of the dismissal and suspension. Nonetheless, the CA said that those actions (dismissal and suspension)

effected by petitioner could not be deemed legal, because it had failed to comply with procedural due process mandated by the Labor Code and with the two-notice requirement under the Implementing Rules. According to the CA, petitioner did not accord private respondents the benefit of a proper charge, an opportunity to defend themselves, and a formal investigation. - The appellate court opined that the Memoranda were merely demands for respondents to comply with the order to turn over their assigned cars. Those Memoranda merely intimated the possibility that De Guzman and Cerezo might be charged and dismissed if they continued to disobey the order.

ISSUE: WON the Court of Appeals erred in ruling that petitioner did not observe procedural due process in terminating and suspending the employment of de Guzman and Cerezo, respectively

HELD: YES, since there was substantial compliance through the memoranda. - In the present case, petitioner sent respondents a total of three Memoranda stating that their stubborn refusal to comply with the car policy and to surrender the subject vehicle constituted gross insubordination, for which they could be dismissed. The December 5, 1990 Memorandum sent to Respondent De Guzman specified her acts that constituted gross insubordination. - To each Memorandum, respondents were able to reply and expla sincein, with the aid of their counsel, why they had refused to return the vehicles; and, in effect, why they should not be dismissed for gross insubordination. Initially, they asked petitioner not to implement the car policy in the light of the Complaint and the Motion for the Issuance of a Writ of Preliminary Injunction that they had filed. They explained that they could not work effectively and efficiently for the company without the cars that had been assigned to them. - In their written replies to petitioner’s succeeding Memoranda -- which reiterated that their actions constituted gross insubordination and could result in their termination -- respondents, still through their counsel, reasoned that they were not claiming ownership of the car. They said that their refusal to surrender the car to the company could not be denominated as gross insubordination, because they were merely acting

upon the advice of their counsel. They added that, to enjoin the implementation of the car policy, they had already lodged with the NLRC a complaint for unfair labor practice. - Their counsel further alleged that De Guzman was apprehensive that she might not immediately be given a replacement upon the return of the car. He stressed that the vehicle was necessary to prevent adverse effects on the sales performance of respondents. Ultimately, after petitioner had sent them a final warning, to which they also ably replied, it served them a letter terminating their employment. - Neither Section 2 of Book V of Rule XXIII nor Section 2(d) of Rule 1 of Book VI of the Implementing Rules require strict literal compliance with the stated procedure; only substantial compliance is needed. On this basis, the Memoranda sent to respondents may be deemed to have sufficiently conformed to the first notice required under the Implementing Rules. The Memoranda served the purpose of informing them of the pending matters beclouding their employment and of extending to them an opportunity to clear the air. In fact, not only were respondents duly informed of the particular acts for which their dismissal was sought; they were, in truth and in fact, able to defend themselves and to respond to the charges with the assistance of a counsel of their own choosing. Respondents were amply informed of the cause of their dismissal. Their correspondence with petitioner took almost a month, which was sufficient “cooling time” within which the parties could have, and in fact had, tried to settle the problem amicably. Moreover, petitioner’s Memoranda amply gave them a distinct, different and effective first level of remedy (which was to surrender the vehicles) to protect their jobs. Furthermore, they were still able to file a Complaint with the labor arbiter, with better knowledge of the cause of their dismissal, with longer time to prepare their case, and with greater opportunity to take care of the financial needs of their family pendente lite. - Agabon v. NLRC effectively reverted to Wenphil and ruled that a dismissal due to abandonment -- a just cause -- was not illegal or ineffectual, even if done without due process; but that the employer should indemnify the employee with “nominal damages for non-compliance with statutory due process.” - To stress, if the dismissal is based on a just cause under Article 282 of the Labor Code, the employer must give the employee (1) two written notices and (2) a hearing (or at least, an opportunity to be heard). The first notice is intended to inform the employee of the employer’s intent to dismiss and the particular acts or omissions for which the dismissal is sought. The second notice is intended to inform the employee of the employer’s decision to dismiss. This decision, however, must come only after the

employee has been given a reasonable period, from receipt of the first notice, within which to answer the charge; and ample opportunity to be heard with the assistance of counsel, if the employee so desires. - The twin requirements of (a) two notices and (b) hearing are necessary to protect the employee’s security of tenure, which is enshrined in the Constitution, the Labor Code and related laws. Disposition Petition is GRANTED and the challenged Decision REVERSED. The Decision of the NLRC dated August 28, 1998, affirming that of the labor arbiter dated August 15, 1995, is REINSTATED.

King of Kings v. Mamac, G.R. No. 166208, June 29, 2007

Facts: Petitioner KKTI is a corporation engaged in public transportation and managed by Claire Dela Fuente and Melissa Lim. Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC) on April 29, 1999. The DMTC employees including respondent formed the Damayan ng mga Manggagawa, Tsuper at Conductor-Transport Workers Union and registered it with the Department of Labor and Employment. Pending the holding of a certification election in DMTC, petitioner KKTI was incorporated with the Securities and Exchange Commission which acquired new buses. Many DMTC employees were subsequently transferred to KKTI and excluded from the election. The KKTI employees later organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE. Respondent was elected KKKK president.

Respondent was required to accomplish a “Conductor’s Trip Report” and submit it to the company after each trip. As a background, this report indicates the ticket opening and closing for the particular day of duty. After submission, the company audits the reports. Once an irregularity is discovered, the company issues an “Irregularity Report” against the employee, indicating the nature and details of the irregularity. Thereafter, the concerned employee is asked to explain the incident by making a written statement or counter-affidavit at the back of the same Irregularity Report. After considering the explanation of the employee, the company then makes a determination of whether to accept the explanation or impose upon the employee a penalty for committing an

infraction. That decision shall be stated on said Irregularity Report and will be furnished to the employee.

Upon audit of the October 28, 2001 Conductor’s Report of respondent, KKTI noted an irregularity. It discovered that respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. While no irregularity report was prepared on the October 28, 2001 incident, KKTI nevertheless asked respondent to explain the discrepancy. In his letter,[3] respondent said that the erroneous declaration in his October 28, 2001 Trip Report was unintentional. He explained that during that day’s trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in order to immediately report the matter to the police. As a result of the incident, he got confused in making the trip report.

On November 26, 2001, respondent received a letter terminating his employment effective November 29, 2001. The dismissal letter alleged that the October 28, 2001 irregularity was an act of fraud against the company. On December 11, 2001, respondent filed a Complaint for illegal dismissal, illegal deductions, nonpayment of 13th-month pay, service incentive leave, and separation pay. He denied committing any infraction and alleged that his dismissal was intended to bust union activities. Moreover, he claimed that his dismissal was effected without due process.

In its April 3, 2002 Position Paper, KKTI contended that respondent was legally dismissed after his commission of a series of misconducts and misdeeds. It claimed that respondent had violated the trust and confidence reposed upon him by KKTI. Also, it averred that it had observed due process in dismissing respondent and maintained that respondent was not entitled to his money claims such as service incentive leave and 13th-month pay because he was paid on commission or percentage basis.

On September 16, 2002, Labor Arbiter Ramon Valentin C. Reyes rendered judgment dismissing respondent’s Complaint for lack of merit. Aggrieved, respondent appealed to the National Labor Relations Commission (NLRC). On August 29, 2003, the NLRC rendered a Decision, respondent

King of Kings Transport Inc. is hereby ordered to indemnify complainant in the amount of ten thousand pesos (P10, 000) for failure to comply with due process prior to termination.

CA: held that there was just cause for respondent’s dismissal. Moreover, the CA held that respondent is entitled to the 13thmonth pay benefit.

Issue: WON CA erred in ruling that KKTI did not comply with the requirements of procedural due process before dismissing the services of the complainant/private respondent.

Held: The petition is partly meritorious. Non-compliance with the Due Process Requirements: Due process under the Labor Code involves two aspects: first, substantive––the valid and authorized causes of termination of employment under the Labor Code; and second, procedural––the manner of dismissal. In the present case, the CA affirmed the findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a “just cause.” This ruling is not at issue in this case. The question to be determined is whether the procedural requirements were complied with.

To clarify, the following should be considered in terminating the services of employees:

(1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense.[15] This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to

enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment.

Respondent was not issued a written notice charging him of committing an infraction. The law is clear on the matter. A verbal appraisal of the charges against an employee does not comply with the first notice requirement.

Second, even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense, such would not comply with the requirements of the law. We observe from the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him. The reports did not even state a company rule or policy that the employee had allegedly violated. Likewise, there is no mention of any of the grounds for termination of employment under Art. 282 of the Labor Code. Thus, KKTI’s

“standard” charge sheet is not sufficient notice to the employee. Third, no hearing was conducted.

Sanction for Non-compliance with Due Process Requirements: After a finding that petitioners failed to comply with the due process requirements, the CA awarded full backwages in favor of respondent in accordance with the doctrine in Serrano v. NLRC. However, the doctrine in Serrano had already been abandoned in Agabon v. NLRC by ruling that if the dismissal is done without due process, the employer should indemnify the employee with nominal damages. Thus, for non-compliance with the due process requirements in the termination of respondent’s employment, petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP 30,000) as damages.

Thirteenth (13th)-Month Pay: Court held that bus drivers and conductors who are paid a fixed or guaranteed minimum wage in case their commission be less than the statutory minimum, and commissions only in case where they are over and above the statutory minimum, are entitled to a 13th-month pay equivalent to one-twelfth of their total earnings during the calendar year. Petition partly granted.

She was constantly being bombarded with memorandum seeking to explain the reports of incidents. She was unable to answer them. It got to a point that she was being shouted at because of her unsatisfactory performance.

On August 2, 1998, Apduhan issued a Memorandum received on the same day by Edgardo Kawada, the husband of private respondent, advising the latter of a hearing scheduled on August 12, 1998 to be held at the Uniwide Office in Quirino Highway, 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.

Respondent did not attend the hearing and was terminated. She then filed for an illegal dismissal because she constructively dismissed which is the reason for her failure to attend the hearing.

Issue: Was there constructive dismissal? Respondent argues that since the investigation was conducted after she was constructively dismissed. Therefore, according to her, there was no point to still attend the investigation set on August 12, 1998. Hence there was denial of due process.

Uniwide Sales Warehouse Club v. NLRC, 547 SCRA 222 Held: Facts: Amalia P. Kawada is an employee of Uniwide. Sometime in 1998, Uniwide received reports from the other employees regarding some problems in the departments managed by the private respondent. Thus, on March 15, 1998, Uniwide, through Store Manager Apduhan, issued a Memorandum addressed to the private respondent 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-to-wear items at unreasonable prices, and failure to submit inventory reports. Uniwide asked private respondent for concrete plans on how she can effectively perform her job.

- 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. - 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. - In the present case, private respondent claims that from the months of February to June 1998, she had been subjected to constant harassment, ridicule and inhumane treatment by Apduhan, with the hope that the

latter can get the private respondent to resign] The harassment allegedly came in the form of successive memoranda which private respondent would receive almost every week, enumerating a litany of offenses and maligning her reputation and spreading rumors among the employees that private respondent shall be dismissed soon. The last straw of the imputed harassment was the July 31, 1998 incident wherein private respondent’s life was put in danger when she lost consciousness due to hypertension as a result of Apduhan’s alleged hostility and shouting. 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. - 2.) 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.

Wallem Maritime Services Inc. v. NLRC | G.R. No. 108433 | October 15, 1996

F: Private respondent Joselito V. Macatuno was hired by Wallem Shipmanagement Limited thru its local manning agent, Wallem Maritime Services, Inc., as an able-bodied seaman on board the M/T Fortuna, a vessel of Liberian registry. Pursuant to the contract of employment, private respondent was employed for ten (10) months covering the period February 26, 1989 until December 26, 1989 with a monthly salary of two hundred seventy-six US dollars (US $276); hourly overtime rate of one dollar and seventy-two cents (US $1.72), and a monthly tanker allowance of one hundred twenty-seven dollars and sixty cents (US $127.60), with six (6) days leave with pay for each month. On June 24, 1989, while the vessel was berthed at the port of Kawasaki, Japan, an altercation took place between private respondent and fellow Filipino crew member, Julius E. Gurimbao, on the one hand, and a cadet/apprentice officer of the same nationality as the captain of the vessel on the other hand. The master entered the incident in the tanker’s logbook. As a consequence, private respondent and Gurimbao were repatriated to the Philippines where they lost no time in lodging separate complaints for

illegal dismissal with the POEA. According to the affidavit private respondent executed before a POEA administering officer, the following facts led to the filing of the complaint. At about 5:50 a.m. of June 24, 1989, private respondent was on duty along with Gurimbao, checking the manifold of the vessel and looking for oil leakages, when a cadet/apprentice who was of the same nationality as the vessel’s captain (Singh), approached them. He ordered Gurimbao to use a shovel in draining the water which, mixed with oil and dirt, had accumulated at the rear portion of the upper deck of the vessel. Gurimbao explained to the cadet/apprentice that throwing dirty and oily water overboard was prohibited by the laws of Japan; in fact, port authorities were roaming and checking the sanitary conditions of the port. The cadet/apprentice got mad and, shouting, ordered Gurimbao to get a hose and siphon off the water. To avoid trouble, Gurimbao used a shovel in throwing the dirty water into the sea. Having finished his job, Gurimbao complained to private respondent about the “improper and unauthorized act” of the cadet/apprentice. The two went to the cadet/apprentice who was idly standing in a corner. They reminded him that as a mere apprentice and not an officer of the vessel, he had no right whatsoever to order around any member of the crew. However, the cadet/apprentice reacted violently - shouting invectives and gesturing “as if challenging” the two to a fight. To prevent him from “intimidating” them, private respondent pushed twice the cadet/apprentice’s chest while Gurimbao “mildly hit” his arm. Frantic and shouting, the cadet/apprentice ran to the captain “who happened to witness the incident” from the cabin’s window. The captain summoned private respondent and Gurimbao. With their bosun (head of the deck crew), they went to the captain’s cabin. The captain told them to pack up their things as their services were being terminated. They would disembark at the next port, the Port of Ube, from where they would be flown home to the Philippines, the repatriation expenses to be shouldered by them. The two attempted to explain their side of the incident but the captain ignored them and firmly told them to go home. Before disembarking, they were entrusted by the bosun with a letter of their fellow crew members, addressed to Capt. Diño, attesting to their innocence. At the Port of Ube, an agent of the company handed them their plane tickets and accompanied them the following day to the Fukoka Airport where they boarded a Cathay Pacific airplane bound for Manila. A few days after their arrival in Manila or on July 1, 1989, the two gave the letter to Capt. Diño and conferred with him and Mr. James Nichols. The latter told private respondent that they could not secure a reimbursement of their repatriation expenses nor could they get their salaries for the month of June. Private respondent, in a letter addressed to Capt. Diño, asked for a reconsideration of their dismissal but the latter did not respond. Frustrated, private respondent sought the assistance of a lawyer

who wrote Wallem a demand letter dated August 28, 1989 but the same was ignored.[4] Petitioners, defending their position, alleged that the incident was not the first infraction committed by the two. In his aforementioned decision of September 14, 1990 finding private respondent’s dismissal to be illegal. Granting that the entries in the logbook are true, a perusal thereof will readily show that complainant was not afforded due process. The warnings allegedly given to complainant were not submitted in evidence. Likewise, no investigation report was presented to prove that complainant was given the opportunity to air his side of the incident. It is also noteworthy to mention that complainant was able to describe with particularity the circumstances which led to his misunderstanding with the cadet/apprentice and which we believe is not sufficient to warrant his dismissal.” NLRC affirmed the decision of the POEA, adopting as its own the latter’s findings and conclusions.

unanswered. Although private respondent candidly admitted in his affidavit having hit Sason on the chest twice, he did not admit using a spanner. Hence, as the typewritten excerpts from the “logbook” were the only pieces of evidence presented by petitioners to support the dismissal of private respondent, have no probative value at all, petitioners’ cause must fail. Petitioners’ failure to substantiate the grounds for a valid dismissal was aggravated by the manner by which the employment of private respondent was terminated. It must be borne in mind that the right of an employer to dismiss an employee is to be distinguished from and should not be confused with the manner in which such right is exercised. Dismissal from employment must not be effected abusively and oppressively as it affects one’s person and property. Neither is the ship captain’s having witnessed the altercation an excuse for dispensing with the notice and hearing requirements. Serving notice to private respondent under the circumstances cannot be regarded as an “absurdity and superfluity.” The petition at bar is DISMISSED.

I: WON private respondent was validly dismissed. No.

Lopez v. Alturas Group of Companies, GR 191008, April 11, 2011

H: An employer may dismiss or lay off an employee only for just and authorized causes enumerated in Articles 282 and 283 of the Labor Code. However, this basic and normal prerogative of an employer is subject to regulation by the State in the exercise of its paramount police power inasmuch as the preservation of lives of citizens, as well as their means of livelihood, is a basic duty of the State more vital them the preservation of corporate profits. One’s employment, profession, trade or calling is a property right within the protection of the constitutional guaranty of due process of law.

F: Quirico Lopez was hired by respondent Alturas Group of Companies in 1997 as truck driver. Ten years later or sometime in November 2007, he was dismissed after he was allegedly caught by respondent’s security guard in the act of attempting to smuggle out of the company premises 60 kilos of scrap iron worth P840 aboard respondents Isuzu Cargo Aluminum Van with Plate Number PHP 271 that was then assigned to him. When questioned, petitioner allegedly admitted to the security guard that he was taking out the scrap iron consisting of lift springs out of which he would make axes.

The ship captain’s logbook is vital evidence as Article 612 of the Code of Commerce requires him to keep a record of the decisions he had adopted as the vessel’s head. Under the Table of Offenses and Corresponding Administrative Penalties appended to the contract of employment entered into by petitioners and private respondent, the offense described by the logbook entry may well fall under insubordination and may constitute assaulting a superior officer “with the use of deadly weapon” punishable with dismissal if the victim is indeed a “superior officer.” However, an “apprentice officer” cannot be considered a “superior officer.” An apprentice is a person bound in the form of law to a master, to learn from him his art, trade, or business, and to serve him during the time of his apprenticeship. Physical violence against anyone at any time and any place is reprehensible. However, in cases such as this, where a person’s livelihood is at stake, strict interpretation of the contract of employment in favor of the worker must be observed to affirm the constitutional provision on protection to labor. Moreover, the aforequoted entry in the logbook is so sketchy that, unsupported by other evidence, it leaves so many questions

Petitioner, in compliance with the Show Cause Notice dated December 5, 2007 issued by respondent company’s Human Resource Department Manager, denied the allegations by a handwritten explanation written in the Visayan dialect. Finding petitioner’s explanation unsatisfactory, respondent company terminated his employment by Notice of Termination effective December 14, 2007 on the grounds of loss of trust and confidence, and of violation of company rules and regulations. In issuing the Notice, respondent company also took into account the result of an investigation showing that petitioner had been smuggling out its cartons which he had sold, in conspiracy with one Maritess Alaba, for his own benefit to thus prompt it to file a criminal case for Qualified Theft against him before the Regional Trial Court (RTC) of Bohol. It had in fact earlier filed another criminal case for Qualified Theft against petitioner arising from the theft of the scrap iron.

Petitioner thereupon filed a complaint against respondent company for illegal dismissal and underpayment of wages. Labor Arbiter held that petitioner’s dismissal was justified, for he, a truck driver, held a position of trust and confidence, and his act of stealing company property was a violation of the trust reposed upon him. NLRC set aside said decision.

I: WON there were invalid dismissal and underpayment of wages

H: Dismissals have two facets: the legality of the act of dismissal, which constitutes substantive due process, and the legality of the manner of dismissal which constitutes procedural due process. [12] As to substantive due process, the Court finds that respondent company’s loss of trust and confidence arising from petitioner’s smuggling out of the scrap iron, confounded by his past acts of unauthorized selling cartons belonging to respondent company, constituted just cause for terminating his services. Loss of trust and confidence as a ground for dismissal of employees covers employees occupying a position of trust who are proven to have breached the trust and confidence reposed on them. Petitioner, a driver assigned with a specific vehicle, was entrusted with the transportation of respondent company goods and property, and consequently with its handling and protection, hence, even if he did not occupy a managerial position, he can be said to be holding a position of responsibility.

Procedural due process has been defined as giving an opportunity to be heard before judgment is rendered. Important: After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation(which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records (such as his 201 file and daily time records) and the sworn statements of his witnesses. For this purpose, he may prepare his explanation personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also include a request that a formal hearing or conference be held. In such a case, the conduct of a formal hearing or conference becomes mandatory, just as it is where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment pretermination procedure.

Petitioner was given the opportunity to explain his side when he was informed of the charge against him and required to submit his written explanation with which he complied. Parenthetically, the Court finds that it was error for the NLRC to opine that petitioner should have been afforded counsel or advised of the right to counsel. In petitioner’s case, there is no showing that he requested for a formal hearing to be conducted or that he be assisted by counsel. An employee’s acquittal in a criminal case does not automatically preclude a determination that he has been guilty of acts inimical to the employer’s interest resulting in loss of trust and confidence. Corollarily, the ground for the dismissal of an employee does not require proof beyond reasonable doubt; as noted earlier, the quantum of proof required is merely substantial evidence. Petition is denied.

Aurelio v. NLRC, 221 SCRA 432

F: Petitioner started as clinical instructor of the College of Nursing of Northwestern College (NWC) in June 1917 with a basic salary of P600.00 a month. In October 1979, petitioner was appointed Dean of the College of Nursing with a starting salary of P3, 000.00 a month. In September 1981, petitioner was promoted to College Administrator or Vice-President for Administration, retaining concurrently her position of Dean of the College of Nursing, with an increased salary of P3, 500.00 per month. She was later promoted to Executive Vice-President with the corresponding salary of P7, 500.00. On April 10, 1988, petitioner's husband, Oscar Aurelio, a stockholder of respondent NWC, was elected Auditor. On May 1, 1988, the individual respondents, as Board of Directors, took over the management of respondent NWC. This new management unleashed a series of reorganization affecting the petitioner and her husband, Oscar Aurelio. On May 30, 1988, petitioner's husband, then in the United States, was removed as Auditor of the college. Without prior notice, petitioner's office was stripped of its facilities. Petitioner's salary was reduced from P7, 500.00 to P5,000.00 then to P2,500.00 a month, among others. Because of the indignities and humiliation suffered by the petitioner, she wrote a letter on September 20, 1988 informing the President of Northwestern College that she was going on an indefinite leave, Petitioner sent a copy of the above letter to the Secretary of Education, Culture and Sports praying for assistance. The representatives of the Regional Director submitted their official findings and recommendations confirming the truth of the allegations of petitioner in her September 20,

1988 letter. The DECS also confirmed the willingness of petitioner to withdraw her indefinite leave of absence. The matter of petitioner's resumption of her position as Dean of the College of Nursing was addressed by the DECS to the attention of respondents but Private respondents did not answer. They refused to accept petitioner. On November 16, 1988, petitioner filed her complaint for illegal dismissal against private respondents and prayed for reinstatement plus backwages, moral and exemplary damages, and attorney's fees. At the arbitration level, petitioner and private respondents submitted their respective position papers. On December 29, 1989, the labor arbiter issued a decision dismissing the complaint. On April 30, 1988, the annual regular meeting of stockholders was held at the principal office of the corporation in Laoag City. Since their election into office, the Board members have taken effective control of the management of the college and have regularly exercised their corporate powers. The new Board conducted a preliminary audit which revealed that the college was financially distressed, unable to meet its maturing obligations with its creditor bank. The new management headed by its President, Ben Nicolas, embarked on a realignment of positions and functions of the different department in order to minimize expenditures. As a result of the audit, NWC was compelled to abolish the administrative positions held by petitioner, which she did not contest. I: WON the dismissal of the petitioner was for a just and valid cause H: Respondent had alleged and submitted evidence of irregularities of complainant during her tenure at the college. The complainant instead of refuting the charges cited alleged irregularities committed by the respondents in their respective offices. It must be emphasized that the rules of dismissal for managerial employees are different from those governing ordinary employees for it would be unjust and inequitable to compel an employer to continue with the employment of a person who occupies a managerial and sensitive position despite loss of trust and confidence. At the very least, the relationship must be considered seriously strained, foreclosing the remedy of reinstatement. We find that the allegations of irregularities were sufficiently substantiated thus justifying petitioner's separation. Moreover, and still on the issue of dismissal, the records disclose that in holding on to the two positions, petitioner violated the Administrative Manual for Private Schools. Thus, the respondent had no other recourse but to take away one of the positions from her or abolish the same. Undoubtedly, the College Board of Directors has the authority to reorganize and streamline the operations of the college with the end in view of minimizing expenditures.

The NLRC found that complainant was a managerial employee who has to have the complete trust and confidence of respondents. However, we find that complainant was not accorded notice and investigation prior to termination. Except for the allegation on constructive dismissal, this petition is a repetition of what petitioner had already alleged below and which the labor arbiter and the NLRC dismissed for lack of merit. Petitioner's claim of constructive dismissal stems from her alleged removal from the positions of Administrator, Vice President for Administration and Executive Vice President. The management of NWC rests on its Board of Directors including the selection of members of the faculty who may be allowed to assume other positions in the college aside from that of teacher or instructor. In 1988, when the then new Board of Directors abolished the additional positions held by the petitioner, it was merely exercising its right. The Board abolished the positions not because the petitioner was the occupant thereof but because the positions had become redundant with functions overlapping those of the President of the college. The Board realized that the college was violating the Administrative Manual for Private School which requires that all collegiate departments should have a full-time head. The Board of Directors of NWC merely exercised rights vested in it by the Articles of Incorporation. Petitioner failed to refute the evidence proffered by NWC before the labor arbiter. In her appeal to the NLRC, petitioner also failed to rebut the findings of the labor arbiter. In the instant petition, she has again failed to overturn private respondents' evidence as well as the findings of the labor arbiter which were affirmed by the NLRC. Petitioner's application for an indefinite leave of absence was not approved by the college authorities, but this notwithstanding, she failed to follow-up her application and did not report for work. Believing she was dismissed, petitioner filed the complaint for illegal dismissal, illegal deductions, underpayment, unpaid wages or commissions and for moral damages and attorney's fees on November 16, 1988. As pointed out earlier, the rules on termination of employment, penalties for infractions, and resort to concerted actions, insofar as managerial employees are concerned, are not necessarily the same as those applicable to termination of employment of ordinary employees. Both the labor arbiter and the public respondent NLRC found that there is some basis for respondent NWC's loss of trust and confidence on petitioner. The dismissal of the petitioner was for a just and valid cause. It appears on record that the investigation of petitioner's alleged irregularities was conducted after the filing of the complaint for illegal dismissal.

Public respondent's finding that petitioner was not afforded due process is correct but the Commission erred when it awarded separation pay in the amount of P32,750.00. In the Pacific Mills, Inc. and Wenphil cases, this Court merely awarded P1,000.00 as penalty for non-observance of due process. The Board of Directors, composed of the individual private respondents herein, has the power granted by the Corporation Code to implement a reorganization of respondent college's offices, including the abolition of various positions, since it is implied or incidental to its power to conduct the regular business affairs of the corporation. The prerogative of management to conduct its own business affairs to achieve its purposes cannot be denied. When petitioner was stripped by the Board of her positions as Executive Vice President and Vice President for Administration, with a corresponding reduction in salary, the Board did not act in a capricious, whimsical, and arbitrary manner, thus negating malice and bad faith.

HELD: No. Absent a showing of the union’s special authority to compromise the individual claims of private respondents for reinstatement and backwages, there is no valid waiver of the aforesaid rights. The judgment of the Labor Arbiter based on the compromise agreement does not have the effect of res judicata upon private respondents who did not agree thereto since the requirement of identity of parties is not satisfied. A judgment upon a compromise agreement has all the force and effect of any other judgment and is conclusive only upon parties thereto and their privies. Private respondents have not waived their right to security of tenure nor can they be barred from entitlement of their individual claims. Since there was no evidence that private respondents committed any illegal act, petitioner’s failure to reinstate them after the settlement of the strike amounts to illegal dismissal.

Cabigting v. San Miguel Foods, GR 167706, Nov. 5, 2009

WHEREFORE, the decision under review is hereby AFFIRMED with the MODIFICATION that the award of separation pay is DELETED Golden Donuts, Inc. v. NLRC, G.R. Nos. 113666-68, January 19, 2000 FACTS: Private respondents were the complainants in three consolidated cases submitted with the Labor Arbiter. Complainants were members of the KMDD-CFW whose CBA with the corporation expired. During the negotiations, the management panel arrived late causing the union panel to walk out. The management addressed a letter of apology to the union and requested for negotiations to resume. The union panel did not show up despite letters from management advising the former of the CBA meetings. The union struck. A compliant was filed by Golden Donuts to declare the strike illegal. Counsel for the union and strikers pleaded for a compromise whereupon both parties would desist from continuing their cases against each other. The Labor Arbiter rendered a decision upholding the dismissal of private respondents and ruling that they were bound by the compromise agreement entered into by the union with petitioners. Private respondents appealed to the NLRC, claiming that the union had no authority to waive or compromise their individual rights and they were not bound by the compromise agreement entered into by the union with petitioners. ISSUE: Whether or not a union may compromise or waive the right to security of tenure and money claims of its minority members, without the latter’s consent.

F: Petitioner Reynaldo G. Cabigting was hired as a receiver/ issuer at the San Miguel Corporation, Feeds and Livestock Division (B-Meg) on February 16, 1984 and after years of service, he was promoted as inventory controller. On June 26, 2000, respondent San Miguel Foods, Inc., through its President, Mr. Arnaldo Africa, sent petitioner a letter informing him that his position as sales office coordinator under its logistic department has been declared redundant. Simultaneously, respondent terminated the services of petitioner effective July 31, 2000, and offered him an early retirement package. Thereafter, petitioner was included in the list of retrenched employees (for reason of redundancy) submitted by respondent to the Department of Labor and Employment.

Petitioner was surprised upon receipt of the letter because he was not a sales office coordinator, and yet he was being terminated as such. Accordingly, petitioner refused to avail of the early retirement package. Prior to petitioner’s termination on July 31, 2000, he was an inventory controller, performing at the same time the function of a warehouseman. Furthermore, petitioner was an active union officer of respondent’s union but upon his termination, was only a member thereof.

With the support of his union, petitioner filed a Complaint questioning his termination primarily because he was not a sales office coordinator, but an inventory controller, performing the functions of both an inventory controller and a warehouseman. In reply, respondent reiterated its declaration that petitioner’s position as sales office coordinator was redundant as a result of respondent’s effort to streamline its operations.

Labor Arbiter (LA) rendered a Decision, where it ruled that petitioner was illegally dismissed. Accordingly, the LA ordered respondent to pay petitioner backwages, separation pay in lieu of reinstatement and attorney’s fees. NLRC rendered a Decision affirming the LA’s finding that petitioner was illegally dismissed by respondent. CA rendered a Decision partially granting respondent’s petition

I: WON “strained relations” bar petitioner’s reinstatement.

H: Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement.

In Globe-Mackay Cable and Radio Corporation v. National Labor Relations Commission, this Court discussed the limitations and qualifications for the application of the “strained relations” principle, in this wise: x x x If, in the wisdom of the Court, there may be a ground or grounds for non-application of the above-cited provision, this should be by way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations between the employer and the employee. In such cases, it should be proved that the employee concerned occupies a position where he enjoys

the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. In order for the doctrine of strained relations to apply, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned.

After a perusal of the LA Decision, this Court finds that the LA had no hard facts upon which to base the application of the doctrine of strained relations, as the same was not squarely discussed nor elaborated on. Also, it is of notice that said issue was addressed by the LA in just one sentence without indicating factual circumstances why strained relations exist. The same is also true for the CA Decision which disposed of the issue in just one sentence without any elaboration. Accordingly, this Court is of the opinion that both the LA and the CA based their conclusions on impression alone.

Finally, it is noted that the position of warehouseman and inventory controller still exists up to date. The nature of the controversy where the parties to this case were engaged is not of such nature that would spawn a situation where the relations are severely strained between them as would bar the complainant to his continued employment. Neither may it be said that his position entails a constant communion with the respondent such that hostilities may bar smooth interactions between them. There is no basis for an award of separation pay in lieu of reinstatement.

The claim of respondent is not meritorious. This Court shares petitioner’s view that the words allegedly imputing malice and bad faith towards the respondent cannot be made a basis for denying his reinstatement.

The doctrine of strained relations has been made applicable to cases where the employee decides not to be reinstated and demands for

separation pay. The same, however, does not apply to herein petition, as petitioner is asking for his reinstatement despite his illegal dismissal.

In conclusion, it bears to stress that it is human nature that some hostility will inevitably arise between parties as a result of litigation, but the same does not always constitute strained relations in the absence of proof or explanation that such indeed exists. Petition is granted.

BUSTAMANTE v. NLRC | 265 SCRA 1 | March 15, 1996

FACTS - Petitioners Bustamante, Bantayan, Sumunod and Lamaran were employed as laborers, harvesters and sprayers in private respondent company’s banana plantation in Davao del Norte. They all signed contracts of employment for 6 months from Jan.2, 1990 to July 2, 1990 but they had started working in Sept. 1989. They were previously hired to do the same work for periods lasting a month or more, from 1985 to 1989. Before the employment contracts expired on July 2, 1990, petitioners’ employments were terminated on the ground of poor performance due to age, as none of them was allegedly below 40 years old. - Petitioners then filed a complaint for illegal dismissal which the Labor Arbiter decided in their favor. The judgment declared the dismissal illegal, and ordered Evergreen Farms to reinstate them immediately with 6 months backwages. Private respondent company appealed to the NLRC but the appeal was dismissed for lack of merit. A subsequent MFR filed by respondent company was similarly disposed of with the modification that the award for backwages was deleted, as there was no bad faith on the part of Evergreen Farms. - The removal of the award of backwages prompted petitioners to file this case, alleging that public respondent NLRC gravely abused its discretion.

ISSUE: WON petitioners are entitled to backwages

HELD: YES, because petitioners are regular employees.

Ratio Regular employees dismissed for no valid cause are entitled to full backwages and other benefits from the time their compensation was withheld from them up to the time of their actual reinstatement. Reasoning - Petitioners were employed at various periods from 1985-1989 for the same work they were hired to perform. They were engaged to perform activities which are necessary in the usual business of the employer. The contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status. They were hired and re-hired in a span of from 2-4 years to do the same type of work which conclusively shows the necessity of petitioners’ services to the respondent. - The act of hiring and re-hiring the petitioners over a period of time without considering them as regular employees evidences bad faith on the part of private respondent. The public respondent made a finding to this effect when it stated that the subsequent rehiring of petitioners on a probationary status “clearly appears to be a convenient subterfuge on the part of management to prevent complainants (petitioners) from becoming regular employees.” Disposition Resolution of NLRC is modified, the deletion of the award for backwages is set aside. LA decision is AFFIRMED, with modification that backwages shall be paid to petitioners from the time of their illegal dismissal up to the date of their reinstatement.

Palteng v. UCPB, GR 172199, February 27, 2009 F: Palteng was the Senior Assistant Manager/Branch Operations Officer of UCPB. After conducting a diligence audit, the Internal Audit and Credit Review Division reported that Palteng committed several offenses under the Employee Discipline Code in connection with Mercado’s (a client) Past Due Domestic Bills Purchased (BP). Palteng explained that at the time the BP accommodation was extended, she was not aware that Mercado’s Omnibus Line has been reduced to P50 Million and that it contained a P5 Million sublimit on BP. Nevertheless, she accepted full responsibility for granting the BP accommodation against Mercado’s personal checks beyond her authority. While she admitted committing a major offense that may cause her dismissal, she claimed that it was an honest mistake. Palteng was dismissed with forfeiture of all benefits. Palteng filed a complaint for illegal dismissal. The Labor Arbiter declared her dismissal illegal, entitling her to, among others, full backwages from the time of her dismissal until finality of

judgment. The CA modified the decision, declaring that backwages should be computed until the labor arbiter’s decision.

they prayed for separation pay, back wages, attorney’s fees and moral damages.

I: Is Palteng entitled to backwages?

On the other hand, the Luris group is made up of seasonal employees who worked during the 1994 season. On August 3, 1994, they received a notice informing them that, due to serious business losses, petitioner planned to close its Balintawak plant and transfer its tobacco processing and redrying operations to Ilocos Sur. Although the closure was to be effective September 15, 1994, they were no longer allowed to work starting August 4, 1994. Instead, petitioner awarded them separation pay computed according to the following formula:

H: No. 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. Reinstatement and payment of backwages are distinct and separate reliefs given to alleviate the economic setback brought about by the employee’s dismissal. The award of one does not bar the other. Backwages may be awarded without reinstatement, and reinstatement may be ordered without awarding backwages. 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," vis-à-vis a "major offense." Since petitioner was not faultless in regard to the offenses imputed against her, she is entitled to separation pay only, without backwages.

Phil Tobacco Flue Curing v. NLRC, 300 SCRA 37

total no. of days actually worked ----------------------------------------------------- x daily rate x 15 days total no. of working days in one year In their Complaint, they claimed that the computation should be based not on the above mathematical equation, but on the actual number of years served. In addition, they contended that they were illegally dismissed, and thus they prayed for back wages. Against these factual antecedents, the labor arbiter ordered the petitioner to pay complainants’ separation pay differential plus attorney’s fees in the total amount of P3,092,896.76. Dissatisfied with said Decision, Philippine Tobacco and the complainants filed their respective appeals before the NLRC. As noted earlier, the NLRC affirmed the labor arbiter’s Decision. Before this Court, only Philippine Tobacco filed the present recourse, as the complainants did not question the NLRC Decision. Issues: In the Court’s view, three issues must be tackled: First, did petitioner prove “serious business losses,” its justification for the nonpayment of separation pay? Second, was the dismissal of the employees valid? Third, how should the separation pay of illegally dismissed seasonal employees be computed? Held: First Issue: Serious Business Losses Not Proven

These refer to the consolidated cases for payment of separation pay lodged by [the] Lubat Group, and for illegal dismissal and underpayment of separation pay by [the] Luris group, with prayers for damages and attorney’s fees against the above respondents. F: There are two groups of employees, namely, the Lubat group and the Luris group. The Lubat group is composed of petitioner’s seasonal employees who were not rehired for the 1994 tobacco season. At the start of that season, they were merely informed that their employment had been terminated at the end of the 1993 season. They claimed that petitioner’s refusal to allow them to report for work without mention of any just or authorized cause constituted illegal dismissal. In their Complaint,

Article 283 of the Labor Code prescribes the requisites and the procedure for an employee’s dismissal arising from the closure or cessation of operation of the establishment. It must be noted that the present case involves the closure of merely a unit or division, not the whole business of an otherwise viable enterprise. Although Article 283 uses the phrase “closure or cessation of operation of an establishment or undertaking,” this Court previously ruled in Coca-Cola Bottlers (Phils.), Inc. v. NLRC that said statutory provision applies in cases of both complete and partial cessation of the business operation.

Petitioner did not actually close its entire business. It merely transferred or relocated its tobacco processing and redrying operations. Moreover, it was also engaged in, among others, corn and rental operations, which were unaffected by the closure of its Balintawak plant. Tested against the aforecited standards, we hold that herein petitioner was not able to prove serious financial losses arising from its tobacco operations. A close examination of its Statement of Income and Expenses and its recasted version thereof, which were presented in support of its contention, suggests its failure to show business losses.

Code provides different definitions as to what constitutes “one year of service,” Book Six does not specifically define “one year of service” for purposes of computing separation pay. However, Articles 283 and 284 both state in connection with separation pay that a fraction of at least six months shall be considered one whole year. Applying this to the case at bar, we hold that the amount of separation pay which respondent members of the Lubat and Luris groups should receive is one-half (1/2) their respective average monthly pay during the last season they worked multiplied by the number of years they actually rendered service, provided that they worked for at least six months during a given year.

On the contrary, the Statement of Income and Expenses shows that the selling and administrative expenses pertain not only to the tobacco business of petitioner, but also to its corn and rental operations, and that the interest expenses pertain to all of its business operations. In fact, the aforementioned Statement shows that there was a net gain from operations in each year covered by the report. In other words, the recasted financial statement effectively modified the Statement of Income and Expenses by deducting from the tobacco operations alone the operating costs pertaining to all businesses of petitioner. The contention of petitioner that tobacco was its main business does not justify the devious contents of the recasted financial statement. It is difficult to accept that it could not have incurred any expense in its other operations. Common sense revolts against such proposition.

The formula that petitioner proposes, wherein a year of work is equivalent to actual work rendered for 303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide that in connection with separation pay, a fraction of at least six months shall be considered one whole year. Under these provisions, an employee who worked for only six months in a given year -- which is certainly less than 303 days -- is considered to have worked for one whole year. NLRC Decision is affirmed with modifications.

Second Issue: Lubat Group Illegally Dismissed

Facts: Petitioners are employees of the Patalon Coconut Estate in Zamboanga. With the advent of the RA No. 6657 or the Comprehensive Agrarian Reform Law, the government sought the compulsory acquisition of the land for agrarian reform. Because of this, the private respondents who are owners of the estate decided to shut down its operation. Petitioners did not receive any separation pay. Now, the petitioners pray, with the representation of their labor group, claiming that they were illegally dismissed. They cite Article 283 of the Labor code where an employer “may” terminate the employment of any employee due to the installation of labor saving devices, redundancy, and retrenchment to prevent losses or the closing or cessation of operation. Petitioners became co-owners of the land and subsequently filed complaints for illegal dismissal. The Regional Arbitration Branch of the NLRC dismissed the charge for illegal dismissal but ordered the payment of separation pay. The NLRC reversed the decision.

Petitioner illegally dismissed the members of the Lubat group when it refused to allow them to work during the 1994 season. It follows that the employer-employee relationship between herein petitioner and members of the Lubat group was not terminated at the end of the 1993 season. From the end of the 1993 season until the beginning of the 1994 season, they were considered only on leave but nevertheless still in the employ of petitioner. Petitioner is liable for illegal dismissal and should be responsible for the reinstatement of the Lubat group and the payment of their back wages. However, since reinstatement is no longer possible as petitioner has already closed its Balintawak plant, respondent members of the said group should instead be awarded normal separation pay (in lieu of reinstatement) equivalent to at least one month pay, or one month pay for every year of service, whichever is higher. It must be stressed that the separation pay being awarded to the Lubat group is due to illegal dismissal; hence, it is different from the amount of separation pay provided for in Article 283 in case of retrenchment to prevent losses or in case of closure or cessation of the employer’s business, in either of which the separation pay is equivalent to at least one (1) month or one-half (1/2) month pay for every year of service, whichever is higher.

National Federation of Labor vs. NLRC | G.R. No. 127718 (March 2, 2000)

Third Issue: Amount of Separation Pay

Issues: a. Whether or not the Court should apply the legal maxim verbal legis in construing Article 283 of the Labor Code as regards its applicability to the case at bar. b. W/N an employer that was compelled to cease its operation because of compulsory acquisition by the government of its land purposes of agrarian reform is liable to pay separation pay its affected employees.

The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of service. Although the Labor

Held:

a. Yes, the legal maxim is applicable in this case. The use of the word “May,” in its plain meaning, denotes that it is directory in nature and generally permissive only. Also, Article 283 of the Labor Code does not contemplate a situation where the closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. The Patalon Coconut Estate was closed down because a large portion of the said estate was acquired by the DAR pursuant to the CARP. The severance of employer-employee relationship between the parties came about involuntarily, as a result of an act of the State. Consequently, complainants are not entitled to any separation pay. Reasoning: Where the words of a statute are clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. Policy: Article 283 of the Labor Code applies in cases of closures of establishment and reduction of personnel. The peculiar circumstances in the case at bar, however, involves neither the closure of an establishment nor a reduction of personnel as contemplated under the article. b. No. The peculiar circumstance in the case at bar involves neither the closure of an establishment nor a reduction in personnel as contemplated in Article 283. The closure contemplated in 283 is a voluntary act on the part of the employer as may be gleaned for the wording, “the employer MAY also terminate,” denoting that it is directory in nature. The Labor Code does not contemplate a situation where the closure is forced upon the employer. As such, petitioners are not entitled to separation pay as private respondents did not voluntary shut down operation as they even sought to be exempted from the coverage of RA 6657. Universal Robina v. Caballeda F: FACTS: Agripino Caballeda was a welder for URSUMCO from March 1989 until June 23, 1997 with a salary of P124 per day while Alejandro Cadalin was a crane operator from 1976 to June 15, 1997, with a salary of P209.30 per day. John Gokongwei Jr., President of URSUMCO, issued a Memorandum establishing the age of compulsory retirement at 60. Subsequently, RA 7641 set the compulsory retirement age, in the absence of a retirement plan or agreement, at 65and that an employee may retire upon reaching 60. The National Labor Federation, the labor union of the workers of URSUMCO, of which Alejandro Cadalin was a member entered into a CBA with URSUMCO. Article XV of said CBA particularly provided that the retirement benefits of the members of the collective bargaining unit shall be in accordance with law. Agripino and Alejandro subsequently reached the age of 60 and were allegedly forced to retire. They accepted their separation pays and applied for retirement benefits with the SSS. Alejandro also executed a quitclaim in favor of URSUMCO. They subsequently filed Complaints for illegal dismissal with the LA of Dumaguete City. URSUMCO claimed that Agripino and Alejandro voluntarily retired, that the Memorandum was no longer in effect when they did so, and that RA 7641

cannot be given retroactive effect since there was an existing CBA that covered the retirement benefits of the employees. It further alleged that Agripino was merely a seasonal or project worker and not a casual worker since the sugar millingbusiness is seasonal in nature. Thus, he was not actually forced to retire. The termination of his employment was essentially based on the fact that the period in his contract had expired. I&R: WON RA 7641 has retroactive effect: Yes. The issue of the retroactive effect of RA 7641 has long been settled. It is a curative statute. It is evident from the records that when respondents were compulsorily retired from the service, R.A. 7641 was already in full force and effect. The petitioners failed to prove that the respondents did not comply with the requirements for eligibility under the law for such retirement benefits. In sum, the aforementioned requisites were adequately satisfied, thus, warranting the retroactive application of R.A. 7641 in this case. WON Agripino is a seasonal or project employee: No. He is a regular employee. WON the Agripino and Alejandro voluntarily retired: No. Retirement is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her employment with the former.[29] The age of retirement is primarily determined by the existing agreement between the employer and the employees. However, in the absence of such agreement, the retirement age shall be fixed by law. Under Art. 287 of the Labor Code as amended; the legally mandated age for compulsory retirement is 65 years, while the set minimum age for optional retirement is 60 years. The law generally looks with disfavor on quitclaims and releases of employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their responsibilities. Ratio: (On nature of issue – to the best of my understanding) Whether or not Agripino was a seasonal/project employee or a regular employee is a question of fact. Time and again, we have held that the Court is not a trier of facts. In this case, it is noteworthy that the LA, the NLRC and the CA are one in ruling that Agripino was not a casual employee, much less a seasonal or project employee. In their findings, Agripino was considered a regular employee of URSUMCO. Consequently, such uniform finding of the LA, the NLRC, and the CA binds this Court. Petition DENIED. CAINTA CATHOLIC SCHOOL V. CAINTA CATHOLIC SCHOOL EMPLOYEES UNION F: On March 6, 1986, a Collective Bargaining Agreement (CBA) was entered into between Cainta Catholic School and the Cainta Catholic Employees Union effective January 1, 1986 to May 31, 1989. This CBA provided, among others that: This CBA shall become effective and binding

upon the parties from January 1, 1986 up to May 31, 1989. At least 60 days before the expiration of this agreement, the parties hereto shall submit written proposals which shall be made the basis of negotiations for the execution of new agreement. If no new agreement is reached by the parties at the expiration of this agreement, all the provisions of this agreement shall remain full force and in effect, up to the time a new agreement shall be executed. Msgr. Mariano Balbago was appointed School Director in April 1987. The Union became inactive. September 10, 1993, the union held an election of officers and Mrs. RosalindaLlagas was elected as President; Paz Javier, VicePresident; Fe Villegas,Treasurer; and Maria Luisa Santos, Secretary. The other elected officers wereRizalina Fernandez, Ester Amigo, secretaries; Nena Marvilla, treasurer; GuildaGalange and Jimmy del Rosario, auditors; Filomeno Dacanay and AdelinaAndres, P.R.O.s; and Danilo Amigo and Arturo Guevarra, business managers. Llagas was the Dean of of Student Affairs while Villegas and Santos were Year- Level Chairmen. October 15, 1993, the school retired Llagas and Javier who had rendered more than twenty years of continous service. Three days later, the Union filed a notice of strike with the National Concillation and Mediation Board (NCMB) docketed as NCMB-RB-12-NS-10124-93. On November 8, 1993, the Union struck and picketed the school’s entrances. On November 11, 1993, the Secretary of Labor Ma. Nieves R. Confesor issued an order certifying the labor dispute to the NLRC. I: Whether the forced retirement of Llagas and Javier was a valid exercise of management prerogative. Whether the strike was legal is highly dependent on whether the retirement was valid. R: We are impelled to reverse the CA and affirm the validity of the termination of employment of Llagas and Javier, arising as it did from a management prerogative granted by the mutually-negotiated CBA between the School and the Union. Pursuant to the existing CBA, the School has the option to retire an employee upon reaching the age limit of sixty (60) or after having rendered at least twenty (20) years of service to the School, the last three (3) years of which must be continuous. Retirement is different species of termination of employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor Code. While in all three cases, the employee to be terminated may be unwilling to part from service, there are eminently higher standards to be met by the employer validly exercising the prerogative to dismiss for just or authorized causes. In those two instances, it is indispensable that the employer establish the existence of just or authorized causes for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby

the latter after reaching a certain age agrees and/or consents to sever his employment with the former. The CBA in the case at bar established 60 as the compulsory retirement age. However, it is not alleged that either Javier or Llagas had reached the compulsory retirement age of 60 years, but instead that they had rendered at least 20 years of service in the School, the last three (3) years continuous. Clearly, the CBA provision allows the employee to be retired by the School even before reaching the age of 60, provided that he/she had rendered 20 years of service. Would such a stipulation be valid? Jurisprudence affirms the position of the School. Llagas and Javier were indeed managerial and supervisory employees. Having established that Llagas is a managerial employee, she is proscribed from joining a labor union,38 more so being elected as union officer. In the case of Javier, a supervisory employee, she may join a labor union composed only of supervisory employees.39 Finding both union officers to be employees not belonging to the rank-and-file, their membership in the Union has become questionable, rendering the Union inutile to represent their cause. Since the strike has been declared as illegal based on the foregoing discussion, we need not dwell on its legality with respect to the means employed by the Union. There is neither legal nor factual justification in awarding backwages to some union officers who have lost their employment status, in light of our finding that the strike is illegal. The ruling of the NLRC is thus upheld on this point. We are also satisfied with the disposition of the NLRC that mandates that Llagas and Javier (or her heirs) receive their retirement benefits. Dy Caico v SSS, G.R. No. 161357, Nov. 30, 2009 F:Elena Dycaico seeks to reverse the Decision of the Court of Appeals that affirmed the decision of Social Security Commission denying her claim for survivor’s pension which accrues from the death of her husband, Bonifacio Dycaico. Bonifacio Dycaico became a member of SSS and designated Elena Dycaico and their eight children as beneficiaries therein. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. Nine years after, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away. A few months prior to his death, however, Bonifacio married the petitioner. Shortly after Bonifacio’s death, the petitioner filed with the SSS an application for survivor’s pension. Her application, however, was denied on the ground that they were not living under the benefit of marriage when Bonifacio became a member of SSS. The basis was Section 12-B(d) of Republic Act (Rep. Act) No. 8282 which reads:

Sec. 12-B. Retirement Benefits. – (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension.

alleged that he should be entitled to monthly retirement pension. He prayed for the adjustment of the date of his (SS) coverage&for the remittance of his delinquent monthly contribution.

An appeal was made to the Court of Appeals but it was, likewise, denied. The same Court ruled that that since the petitioner was merely the common-law wife of Bonifacio at the time of his retirement, his designation of the petitioner as one of his beneficiaries is void.

Lamboso averred that he received from Far Alba a monthly salary of P45.00 from 1960 to 1965 and P180.00 from 1965 to 1973 and from employer Ramon S. Benedicto, a monthly salary of P500.00 from 1973 to 1984; and that he was reported to the SSS from coverage in 1973 and only a total of 39 monthly contributions were remitted in his name.

The petitioner claims that there is no merit to the decision of Court of Appeals as the SSS law does is silent denying the beneficiary’s claim for survivor pension. I: Whether or not there is a violation to equal protection clause of the Constitution. H: The Supreme Court ruled in the positive. There is a violation of due process and equal protection. The Court holds that the proviso “as of the date of his retirement” in Section 12-B(d) of Rep. Act No. 8282, which qualifies the term “primary beneficiaries,” is unconstitutional for it violates the due process and equal protection clauses of the Constitution. If the said provision will be sustained, there will be an outright confiscation of benefits due to the surviving spouse without giving her opportunity to be heard. There is, therefore, a violation of due process. There is also a violation of equal protection of the Constitution. A statute, to be valid and reasonable, must satisfy the following requirements: must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class. Classifying dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage was contracted before or after the retirement of the other spouse bears no relation to the achievement of the policy objective of the law Indeed, the SC does not find substantial distinction between spouses whose assignment as a beneficiary was made after the marriage and spouses whose assignment as a beneficiary was made before the marriage. The statute violates equal protection clause when it grants surviving pensions only to the spouses belonging to the former case and not to than the latter. SOCIAL SECURITY COMMISSION VS. FAR S. ALBA F: (Lamboso) filed a claim for retirement benefit before (SSS). However, his claim was denied on the ground that he could not qualify for monthly pension under Republic Act (R.A.) No. 1161[5] (the Social Security Act of 1954) as he then had only (39) paid contributions. Lamboso appealed the denial of his claim by filing a petition before the Commission wherein he

SSS avers that Apolonio Lamboso, was reported for SS coverage, effective April 1, 1970 by employer Far Alba; that he was, likewise, reported for SSS coverage by employer Kamandag Agri & Dev. Corp.; and that Lamboso has only 39 monthly contributions (remitted in his favor by Far alba) but none under Kamandag Agri. Dev. Corp. The failure on the part of respondent Far Alba to file his responsive pleading to the petition filed by petitioner Lamboso strongly indicates lack or absence of evidence, by way of rebuttal, to the positive assertion of the petitioner regarding his employment with the former. Besides, defrauding respondent Alba reported Lamboso to the SSS for coverage and this act of reporting is already an incontrovertible proof of employment. CA reversed and set aside both the resolution and the order of the Commission. It held that Far Alba cannot be considered as an employer of Lamboso prior to 1970 because as administrator of the familyowned hacienda, he is not an employer under Section 8 (c) of the Social Security Act of 1954. I: (1) whether Far Alba had been Lamboso's employer R: Section 8 (c), Social Security Act of 1954 (as amended by Presidential Decree [P.D.] No. 1202 and P.D. No. 1636) defines an employer as "any person, natural or juridical, domestic or foreign, who carries on in the Philippines any trade or business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government." Section 8 (d) defines an employee as "any person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services where there is an employer-employee relationship." Based on the testimonies, Far Alba had indeed served as Lamboso's employer, at the very least, he had served as the hacienda's administrator before 1970. (2) whether an administrator could be considered an employer within the scope of the Social Security Act of 1954.

Yes. Alba was no ordinary administrator. He was no less than the son of the hacienda's owner and as such he was an owner-in-waiting prior to his father's death. He was a member of the owner's family assigned to actively manage the operations of the hacienda. Applying the control test which is used to determine the existence of employer-employee relationship for purposes of compulsory coverage under the SSS law, Far Alba is technically Lamboso's employer. Lamboso testified that he was selected and his services were engaged by Far Alba himself. Corollarily, Far Alba held the prerogative of terminating Lamboso's employment. Lamboso also testified in a direct manner that he had been paid his wages by Far Alba. This testimony was seconded by Lamboso's co-worker, Rodolfo Sales. Anent the power of control with regard to the work of the employee, the element refers merely to the existence of the power and not the actual exercise thereof. It is not essential for the employer to actually supervise the performance of duties of the employee; it is sufficient that the former has a right to wield the power. Article 167(f) of the Labor Code which deals with employees' compensation and state insurance fund. The said provision of the law defines and employer as " any person, natural or juridical, employing the services of the employee." It also defines a person as "any individual, partnership, firm, association, trust, corporation or legal representative thereof." Plainly, Far Alba, as the hacienda administrator, acts as the legal representative of the employer and is thus an employer within the meaning of the law liable to pay the SS contributions. Petition GRANTED. SSS VS. ATLANTIC GULF AND PACIFIC COMP. OF MLA., INC. F: AG&P and Semirara filed a complaint for specific performance and damages against SSS before RTC of Batangas. Plaintiff informed SSS in writing of its premiums and loan amortization delinquencies covering the period from January 2000 to May 2000 amounting to P7.3 Million. AG&P proposed to pay its said arrears by end of 2000, but requested for the condonation of all penalties; defendant suggested two (2) options to AG&P, either to pay by installment or through "dacion en pago"; AG&P chose to settle its obligation with the SS through dacion en pago of its 5,999 sq. m. property situated in Baguio with an appraised value of about P80.0 Million. SSS proposes to carve-out from the said property an area sufficient to cover plaintiffs' delinquencies. AG&P, however, is not amenable to subdivide its Baguio property; AG&P then made another proposal to SSS offering as payment a portion of its 58,153 square meter-lot, situated in Batangas. SSS informed AG&P of its decision to include other companies within the umbrella of DMCI group with arrearages with the SSS. In the process of elimination of the companies belonging to the DMCI group with possible outstanding obligation with the SSS, it was only SEMIRARA which was left with outstanding delinquencies with the SSS. Thus, SEMIRARA's inclusion in the proposed settlement through dacion en pago;

AG&P was directed by the defendant to submit certain docus, such as Transfer Certificate of Title, Tax Declaration covering the subject lot, and the proposed subdivision plan, AG&P immediately complied. As a result of the approval of the dacion en pago, posting of contributions and loan amortization to individual member accounts, both for AG&P and SEMIRARA employees, was effected immediately. The benefits of the member-employees of both companies were restored; From the time of the approval of AG&P's proposal up to the present, AG&P is (sic) religiously remitting the premium contributions and loan amortization of its member-employees to the defendant; Defendant failed to take any action on said Deed of Assignment causing AG&P to re-submit it to the same office of the Vice-President - NCR in December 2001. From its original submission of the Deed of Assignment in July 2001 to its re-submission in December 2001, and SSS returning of the revised draft in February 28, 2003 AG&P was consistent in its regular follow ups with SSS as to the status of its submitted Deed of Assignment; More than a year after the approval of AG&P's proposal, defendant sent the revised copy of the Deed of Assignment to AG&P. However, the amount of the plaintiffs' obligation appearing in the approved Deed of Assignment has ballooned from P29,261,902.45 to P40,846,610.64 allegedly because of the additional interests and penalty charges assessed on plaintiffs' outstanding obligation from April 2001, the date of approval of the proposal, up to January 2003; AG&P and SEMIRARA maintain their willingness to settle their alleged obligation of P29,261,902.45 to SSS. Defendant, however, refused to accept the payment through dacion en pago, unless plaintiffs also pay the additional interests and penalties being charged; I: which body has jurisdiction to entertain a controversy arising from the non-implementation of a dacion en pago agreed upon by the parties as a means of settlement of private respondents' liabilities. R: The pertinent provision of law detailing the jurisdiction of the Commission is Section 5(a) of R.A. No. 1161, as amended by R.A. No. 8282, otherwise known as the Social Security Act of 1997, to wit: SEC. 5. Settlement of Disputes.- (a) Any dispute arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any other matter related thereto, shall be cognizable by the Commission, and any case filed with respect thereto shall be heard by the Commission, or any of its members, or by hearing officers duly authorized by the Commission and decided within the mandatory period of twenty (20) days after the submission of the evidence. The filing, determination and settlement of disputes shall be governed by the rules and regulations promulgated by the Commission.

The law clearly vests upon the Commission jurisdiction over "disputes arising under this Act with respect to coverage, benefits, contributions and penalties thereon or any matter related thereto..." Dispute is defined as "a conflict or controversy." The essential elements of a contract of sale, namely, consent, object certain, and cause or consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is considered as the object of the contract of sale, while the debt is considered as the purchase price. In any case, common consent is an essential prerequisite, be it sale or novation, to have the effect of totally extinguishing the debt or obligation. The controversy, instead, lies in the non-implementation of the approved and agreeddacion en pago on the part of the SSS. As such, respondents filed a suit to obtain its enforcement which is, doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the competence of the Commission. In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance (now Regional Trial Courts).DENIED. IBARRA P. ORTEGA, VS. SS Commission and SSS F: Petitioner, a member of SSS, filed claims for partial permanent disability benefits on account of his condition of Generalized Arthritis and Partial Ankylosis,[3] which claims the SSS granted for a total monthly pension of 23 months.[4] After the expiration of his disability pension, petitioner filed with the SSS a claim for total permanent disability benefits w/c was denied, however, on the ground that he was already granted disability benefits for the same illness and physical examination showed no progression of illness. Aggrieved, petitioner filed before the SSC alleging that the SSS denied his application despite the fact that his attending physician, diagnosed him to be suffering from Trigger finger 4th (L) and thumb (L) while another private medical practitioner diagnosed him to be also suffering from Bronchial Asthma, Hypertension and Gastro-Esophageal Reflux Disease.

Before taking cognizance of his appeal, SSC directed the exhaustion of administrative remedies. The matter was thus referred to the SSS Office of the Medical Program Director for review of petitioner's disability claim. SSS Legal Department denied a reconsideration of the denial of his claim. Upon referral of the SSC, the SSS Medical Program Department confirmed that, upon examination of petitioner, there was no progression of his illness, prompting petitioner to submit a letter-opposition charging the SSS medical officers of issuing fraudulent medical findings. SSS Medical Program Department stood its ground and denied with finality petitioner's claim. SSC denied petitioner's claim for entitlement to total permanent disability for lack of merit. Petitioner's motion for reconsideration having been denied by Order appealed to CA. I: whether he is entitled to total permanent disability benefits from the SSS given his "angioplasty operation of the heart, coronary artery disease, ischemic heart disease, severe hypertension and a host of other serious illnesses filed with the SSS R: It bears stressing that Rule 45 and Rule 65 pertain to different remedies and have distinct applications.[35] It is axiomatic that the remedy of certiorari is not available where the petitioner has the remedy of appeal or some other plain, speedy and adequate remedy in the course of law.[36] The petition for review under Rule 45 covers the mode of appeal from a judgment, final order, resolution or one which completely disposes of the case, like the herein assailed Decision and Resolution of the appellate court. There being already a final judgment at the time of the filing of the petition, a petition for review under Rule 45 is the appropriate remedy. Petitioner failed to carve out an exception to this rule, as he did not- and could not- illustrate the inadequacy of an appeal as a remedy that could promptly relieve him from the injurious effects of the assailed judgment. While the Court may dismiss a petition outright for being an improper remedy, it may, in certain instances where a petition was filed on time both under Rules 45 and 65 and in the interest of justice, proceed to review the substance of the petition and treat it as having been filed under Rule 45. Either way, however, the present petition just the same merits dismissal since it puts to issue questions of fact rather than questions of law which are appropriate for review under a Rule 45 petition. The requisite quantum of proof in cases filed before administrative or quasi-judicial bodies is neither proof beyond reasonable doubt nor preponderance of evidence. In this type of cases, a fact may be deemed established if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. In this case, substantial evidence abounds. The conclusion that petitioner is not entitled to total permanent disability

benefits under the Social Security Law was reached after petitioner was examined not just by one but four SSS physicians.SSC did not ignore the certifications of petitioner's attending physicians as, in fact, it ordered the SSS to conduct an investigation as to the medical findings and final diagnosis by his attending physicians. The member was requested to submit recent ECG, x-rays and other laboratory work-up results but he could not locate them during visit and would still look for the said medical documents and mail them to SSS. He was then advised to come to SSS, Diliman Branch for ECG and x-ray, however he refused. He also refused to affix his signature on the medical field service form to confirm the visit of our Medical Officer. Petitioner's reliance on jurisprudence on work-connected disability claims insofar as it relates to a demonstration of disability to perform his trade and profession[54] is misplaced. Claims under the Labor Code for compensation and under the Social Security Law for benefits are not the same as to their nature and purpose. On the one hand, the pertinent provisions of the Labor Code govern compensability of work-related disabilities or when there is loss of income due to work-connected or work-aggravated injury or illness. On the other hand, the benefits under the Social Security Law are intended to provide insurance or protection against the hazards or risks of disability, sickness, old age or death, inter alia, irrespective of whether they arose from or in the course of the employment. And unlike under the Social Security Law, a disability is total and permanent under the Labor Code if as a result of the injury or sickness the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days regardless of whether he loses the use of any of his body parts. SSS medical examiners are tasked by law to analyze the extent of personal incapacity resulting from disease or injury. Oftentimes, a physician who is adequately versed in the knowledge of anatomy and physiology will find himself deficient when called upon to express an opinion on the permanent changes resulting from a disability. Unlike the general practitioner who merely concerns himself with the examination of his patient for purposes of diagnosis and treatment, the medical examiner has to consider varied factors and ascertain the claimant's related history and subjective complaints. DENIED. SSC v. RIZAL POULTRY and LIVESTOCK ASSOCIATION, INC. F: Alberto Angeles had earlier filed a complaint for illegal dismissal against BSD Agro and/or its owner, Benjamin San Diego (San Diego). LA initially found that Angeles was an employee and that he was illegally dismissed. On appeal, NLRC reversed LA’s Decision and held that no employer-employee relationship existed between Angeles and respondents. The ruling was anchored on the finding that the duties performed by Angeles, such as carpentry, plumbing, painting and electrical works, were not independent and integral steps in the essential operations

of the company, which is engaged in the poultry business.[4] Angeles elevated the case to the Court of Appeals via petition for certiorari. The appellate court affirmed NLRC ruling and upheld the absence of employeremployee relationship. Angeles moved for reconsideration but it was denied by the Court of Appeals. No further appeal was undertaken, hence, an entry of judgment was made on 26 May 2001.[7] At any rate, the SSC did not take into consideration the decision of the NLRC. It denied respondents’ motion to dismiss in an Order. I: WON res judicata applies so as to preclude the SSC from resolving anew the existence of employer-employee relationship, which issue was previously determined in the NLRC case. R: Res judicata embraces two concepts: (1) bar by prior judgment as enunciated in Rule 39, Section 47(b) of the Rules of Civil Procedure; and (2) conclusiveness of judgment in Rule 39, Section 47(c).[14] There is “bar by prior judgment” when, as between the first case where the judgment was rendered and the second case that is sought to be barred, there is identity of parties, subject matter, and causes of action. In this instance, the judgment in the first case constitutes an absolute bar to the second action. But where there is identity of parties in the first and second cases, but no identity of causes of action, the first judgment is conclusive only as to those matters actually and directly controverted and determined and not as to matters merely involved therein. This is the concept of res judicata known as “conclusiveness of judgment.” Stated differently, any right, fact or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which judgment is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies, whether or not the claim, demand, purpose, or subject matter of the two actions is the same. 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. Should identity of parties, subject matter, and causes of action be shown in the two cases, thenres judicata in its aspect as a “bar by prior judgment” would apply. If as between the two cases, only identity of parties can be shown, but not identical causes of action, then res judicata as “conclusiveness of judgment” applies. The first element is present in this case. The NLRC ruling was affirmed by the Court of Appeals. It was a judicial affirmation through a decision duly promulgated and rendered final and executory when no appeal was undertaken within the reglementary period. The jurisdiction of the NLRC,

which is a quasi-judicial body, was undisputed. Neither can the jurisdiction of the Court of Appeals over the NLRC decision be the subject of a dispute. The NLRC case was clearly decided on its merits; likewise on the merits was the affirmance of the NLRC by CA. With respect to the fourth element of identity of parties, we hold that there is substantial compliance. The parties in SSC and NLRC cases are not strictly identical. Rizal Poultry was impleaded as additional respondent in the SSC case. Jurisprudence however does not dictate absolute identity but only substantial identity. There is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case, even if the latter was not impleaded in the first case.[20] BSD Agro, Rizal Poultry and San Diego were litigating under one and the same entity both before the NLRC and the SSC. Although Rizal Poultry is not a party in the NLRC case, there are numerous indications that all the while, Rizal Poultry was also an employer of Angeles together with BSD Agro and San Diego. Angeles admitted before the NLRC that he was employed by BSD Agro and San Diego from 1985 until 1997.[21] He made a similar claim in his Petition before the SSC including as employer Rizal Poultry as respondent.[22] Angeles presented as evidence before the SSC his Identification Card and a Job Order to prove his employment in Rizal Poultry. He clarified in his Opposition to the Motion to Dismiss[23] filed before SSC that he failed to adduce these as evidence before the NLRC even if it would have proven his employment with BSD Agro. Most significantly, the three respondents, BSD Agro, Rizal Poultry and San Diego, litigated as one entity before the SSC. They were represented by one counsel and they submitted their pleadings as such one entity. Certainly, and at the very least, a community of interest exists among them. We therefore rule that there is substantial if not actual identity of parties both in the NLRC and SSC cases. As previously stated, an identity in the cause of action need not obtain in order to apply res judicata by “conclusiveness of judgment.” An identity of issues would suffice. The NLRC decision on the absence of employer-employee relationship being binding in the SSC case, we affirm the dismissal by Court of Appeals of the SSC case. DENIED. CIRIACO HINOGUIN vs.EMPLOYEES' COMPENSATION COMMISSION and GSIS F: Sgt. Hinoguin, Cpl. Clavo and Dft. Alibuyog left Carranglan, Nueva Ecija, about noon on 1 August 1985 and arrived in Aritao, Nueva Viscaya, about 1:30 o'clock P.M. on the same day. 3 They proceeded to the home of Dft. Alibuyog's parents where they had lunch. About 4:00 o'clock P.M., the three (3) soldiers with a fourth man, a civilian and relative of Dft. Alibuyog, had some gin and beer, finishing a bottle of gin and two (2) large bottles of beer. Three hours later, at about 7:00 o'clock P.M., the soldiers left the Alibuyog home to return to their Company Headquarters. They boarded a tricycle, presumably a motor-driven one, Sgt. Hinoguin and Cpl. Clavo

seating themselves in the tricycle cab while Dft. Alibuyog occupied the seat behind the driver. Upon reaching the poblacionof Aritao, Dft. Alibuyog dismounted, walked towards and in front of the tricycle cab, holding his M16 rifle in his right hand, not noticing that the rifle's safety lever was on semi automatic (and not on "safety"). He accidentally touched the trigger, firing a single shot in the process and hitting Sgt. Hinoguin, then still sitting in the cab, in the left lower abdomen. The Sergeant did not apparently realize immediately that he had been hit; he took three (3) steps forward, cried that he had been hit and fell to the ground. His companions rushed Sgt. Hinoguin to a hospital in Bayombong, Nueva Viscaya, for treatment. Their Company Commander, Capt. Besas, hurried to the hospital upon being notified of the shooting and there talked with the wounded Sergeant. The latter confirmed to Capt. Besas that he had indeed been accidentally shot by Dft. Alibuyog Sgt. Hinoguin was later moved to the AFP Medical Center in Quezon City and there he died. The Death Certificate lists "septic shock" as immediate cause of death, and "generalized septicemia of peritonitis" as antecedent cause, following his sustaining a gunshot wound. An investigation conducted by H.Q., 14th Infantry Battalion concluded that the shooting of Sgt. Hinoguin was "purely accidental in nature." Petitioner filed his claim for compensation benefits under P.D. No. 626 (as amended), claiming that the death of his son was work-connected and therefore compensable. This was denied 6 by the GSIS on the ground that petitioner's son was not at his work place nor performing his duty as a soldier of the Philippine Army at the time of his death. Petitioner filed a Motion for Reconsideration which Motion was, however, denied by the GSIS. This denial was confirmed by the Workmen's Compensation Commission ("WCC"). I: whether or not the death of Sgt. Lemick Hinoguin is compensable under the applicable statute and regulations. R: Considering that Sgt. Hinoguin died on 7 August 1985, the applicable law is to be found in Book Four, Title III of the Labor Code, as amended. It may be noted at the outset that under Article 167 (g) of the Labor Code, as amended and Section 4 (b) (1) of Rule I of the Amended (Implementing) Rules on Employees' Compensation, the term "employee" includes a "member of the Armed Forces of the Philippines." Rule XIII entitled "Death", of the Amended (Implementing) Rules provides in part as follows: SECTION 1. Conditions to Entitlement. — (a) The beneficiaries of a deceased employee shall be entitled to an income benefit if all of the following conditions are satisfied:

(1) The employee had been duly reported to the System; (2) He died as a result of injury or sickness; and (3) The System has been duly notified of his death, as well as the injury or sickness which caused his death. His employer shall be liable for the benefit if such death occurred before the employee is duly reported for coverage of the System.xxx Article 167 (k) of the Labor Code as amended defines a compensable "injury" quite simply as "any harmful change in the human organism from any accident arising out of and in the course of the employment." The Amended (Implementing) Rules have, however, elaborated considerably on the simple and succinct statutory provision. Rule III, Section 1 (a) reads: SECTION 1. Grounds. (a) For the injury and the resulting disability or death to be compensable, the injury must be the result of an employment accident satisfying all of the following grounds: (1) The employee must have been injured at the place work requires him to be; (2) The employee must have been performing his official functions; and (3) If the injury is sustained elsewhere, the employee must have been executing an order for the employer. It will be seen that because the Amended (Implementing) Rules are intended to apply to all kinds of employment, such rules must be read and applied with reasonable flexibility and comprehensiveness. The concept of a "work place" referred to in Ground 1, for instance, cannot always be literally applied to a soldier on active duty status, as if he were a machine operator or a worker in an assembly line in a factory or a clerk in a particular fixed office. Obviously, a soldier must go where his company is stationed. In the instant case, Aritao, Nueva Viscaya was not, of course, Carranglan, Nueva Ecija. Aritao being approximately 1-1/2 hours away from the latter by public transportation. But Sgt. Hinoguin, Cpl. Clavo and Dft. Alibuyog had permission from their Commanding Officer to proceed to Aritao, and it appears to us that a place which soldiers have secured lawful permission to be at cannot be very different, legally speaking, from a place where they are required to go by their commanding officer. Turning to the question of whether Sgt. Hinoguin was performing official functions at the time he sustained the gunshot wound, it has already been pointed out above that the Line of Duty Board of Officers of the 14th Infantry Battalion Headquarters had already determined that the death of Sgt. Hinoguin had occurred "in line of duty." It may be noted in this connection that a soldier on active duty status is really on 24 hours a day official duty status and is subject to military discipline and military law 24 hours a day. He is subject to call and to the orders of his superior officers at all times, 7 days a week, except, of course, when he is on vacation leave status (which Sgt. Hinoguin was not). 'Thus, we think that the work-connected character of Sgt. Hinoguins injury and death was not effectively precluded by the simple circumstance that he was on an overnight pass to go to the home of Dft. Alibuyog, a soldier under his own

command. Sgt. Hinoguin did not effectively cease performing "official functions" because he was granted a pass. More generally, a soldier in the Armed Forces must accept certain risks, for instance, that he will be fired upon by forces hostile to the State or the Government. That is not, of course, the only ask that he is compelled to accept by the very nature of his occupation or profession as a soldier. Most of the persons around him are necessarily also members of the Armed Forces who carry firearms, too. In other words, a soldier must also assume the risk of being accidentally fired upon by his fellow soldiers. This is reasonably regarded as a hazard or risk inherent in his employment as a soldier. We hold, therefore, that the death of Sgt. Hinoguin that resulted from his being hit by an accidental discharge of the M-16 of Dft. Alibuyog, in the circumstances of this case, arose out of and in the course of his employment as a soldier on active duty status in the Armed Forces of the Philippines and hence compensable. REVERSED and the GSIS is hereby DIRECTED to award all applicable benefits in respect of the death of Sgt. Lemick G. Hinoguin, to petitioner. VISAYAN STEVEDORE ., vs. THE WORKMEN'S COMPENSATION COMMISSION F: It appears that Graciano Gutana was a laborer of petitioner in its stevedoring business at the Pulupandan wharf in Occidental Negros, at a daily salary of P4.60. Petitioner undertook the loading of sugar on the Japanese ship "Hiyeharu Maru" then anchored about two miles from the coast of Pulupandan, and Gutana was one of the more than seventy of its laborers assigned to do the loading. After having rendered the usual 8hours of work, the laborers were given time off to take their evening meal before working over time, as it was the purpose of the employer to finish the loading of the sugar as soon as possible. After taking their meal on board the ship, Gutana and some of the laborers had to answer the call of nature by the left side of a barge tied along the right side of the Japanese ship, in view of the insufficiency of the sanitary facilities board. After relieving himself, and as he was standing and buttoning up his pants, the raft "Narwhal" came along the right side of the barge and bumped it, causing it to hit the right side of the Japanese vessel. As a result, Gutana was pinned by the end of the hatch cover of the barge against the side of the vessel, thereby suffering physical injuries which resulted in his death. Petitioner's foreman at the premises immediately notified the latter of the fatal incident, and petitioner shouldered all the funeral expenses. A claim for compensation for the death of Gutana was filed by the widow of the deceased and their children. After hearing, the Regional Office of DOLE, Bacolod City, rendered a decision awarding death compensation to the claimants in the total amount of P4,000.00, plus attorneys' fees and costs. Petitioner appealed to the Workmen's Compensation Commission which, in turn, affirmed the decision just mentioned in its resolution of October 15, 1963, the latter being now the subject of appeal.

I&R: (1) the claim for compensation had prescribed having been filed more than three months after Gutana's death. The case is covered by the provisions of Section 24, Workmen's Compensation Act No. 3428, as amended, which dispenses with the requirement of filing a claim for compensation if the employer had voluntarily made compensation payments. Under Section 8 of the same act, burial expenses are considered as part of the death benefits due to the heirs of a deceased laborer. It appears in this case that petitioner had voluntarily paid the burial expenses in connection with the burial of Gutana. Consequently, the late filing of the claim for compensation is not fatal. (2) the death of Gutana was due to his notorious negligence. Facts established by the evidence do not support petitioner's contention. Due to the number of laborers engaged in the loading work, the sanitary facilities on board the "Hiyeharu Maru" were rendered inadequate, thus compelling some of the laborers to answer the call of nature by going down a barge tied along the right side of the ship. The deceased Gutana was among those who was forced, to resort to this uncomfortable way of relieving himself. Moreover, in the circumstances of this case, it is but logical to consider the barge as an extension of the premises where the laborers were working. As already stated, they took their evening meal on board the ship and were supposed to resume their work (overtime work) a reasonable time thereafter. As, because of this, they were not free to leave the vessel, the accident must be deemed to be one arising out of, or in the course of employment. DISMISSED. ALANO vs. EMPLOYEES' COMPENSATION COMMISSION F: Dedicacion de Vera, a government employee during her lifetime, worked as principal of Salinap Community School in San Carlos City, Pangasinan. Her tour of duty was from 7:30 a.m. to 5:30p.m. On November 29, 1976, at 7:00 A.M., while she was waiting for a ride at Plaza Jaycee in San Carlos City on her way to the school, she was bumped and run over by a speeding Toyotamini-bus which resulted in her instantaneous death. She is survived by her four sons and a daughter. On June 27, 1977, Generoso C. Alano, brother of the deceased, filed the instant claim for income benefit with the GSIS for and in behalf of the decedent's children. The claim was,however, denied on the same date on the ground that the "injury upon which compensation isbeing claimed is not an employment accident satisfying all the conditions prescribed by law." OnJuly 19, 1977 appellant requested for a reconsideration of the system's decision, but the samewas denied and the records of the case were elevated to this Commission for review. I: Whether or not the death of Dedicacion de Vera can be compensable.

H: In this case, it is not disputed that the deceased died while going to her place of work.She was at the place where, as the petitioner puts it, her job necessarily required her to be if she was to reach her place of work on time. There was nothing private or personal about theschool principal's being at the place of the accident. She was there because her employmentrequired her to be there.As to the Government Service Insurance System's manifestation, we hold that it is not fatal tothis case that it was not impleaded as a party respondent. As early as the case of La O v.Employees' Compensation Commission, (97 SCRA 782) up to Cabanero v. Employees' Compensation Commission (111 SCRA 413) and recently,Clemente v. GSIS(G.R. No. L-47521, August 31,1987), this Court has ruled that the GSIS is a proper party in employees' compensation cases as the ultimate implementing agency of the Employees' Compensation Commission. We held in the cited cases that "the law and the rules refer to the said System in all aspects of employee compensation including enforcement of decisions (Article 182 of ImplementingRules)." SALVADOR LAZO vs. EMPLOYEES' COMPENSATION COMMISSION F: Salvador Lazo, is a security guard of the Central Bank of the Philippinesa ssigned to its main office in Malate, Manila. His regular tour of duty is from 2:00 o'clock in theafternoon to 10:00 o'clock in the evening. On 18 June 1986, the petitioner rendered duty from2:00 o'clock in the afternoon to 10:00 o'clock in the evening. But, as the security guard who was to relieve him failed to arrive, the petitioner rendered overtime duty up to 5:00 o'clock in the morning, when he asked permission from his superior to leave early in order totake home to Binangonan, Rizal, his sack of rice. On his way home, at about 6:00 o'clock in the morning, the passenger jeepney the petitioner was riding on turned turtle due to slippery road. As a result, he sustained injuries and was taken to the Angono Emergency Hospital for treatment. He was later transferred to the National Orthopedic Hospital where he was confined until 25 July 1986.For the injuries he sustained, petitioner filed a claim for disability benefits under PD 626, as amended. His claim, however, was denied by the GSIS for the reason that It appears that after performing your regular duties as Security Guard from 2:00 P.M. to 10:00P.M. on June 18, 1986, you rendered overtime duty from 10:00 P.M. to 5:06 A.M. of the following day; that at about 5:06 A.M. after asking permission from your superior you were allowed to leave the Office to do certain personal matter  that of bringing home a sack of rice and that, while on your way home, you met a vehicular accident that resulted to (sic) your injuries. From the foregoing informations, it is evident that you were not at your work place performing your duties when the incident occurred. 1It was held that the condition for compensability had not been satisfied. Upon review of the case, the respondent Employees Compensation Commission affirmed the decision since the accident which involved the petitioner occurred far from his work place and while he was attending to a personal matter. Hence, the present recourse. I: Whether petitioner's injury comes within the meaning of and intendment of the phrase 'arising out of and in the course of employment?

H: We held that 'where an employee, after working hours, attempted to ride on the platform of a service truck of the company near his place of work, and, while thus attempting, slipped and fell to the ground and was run over by the truck, resulting in his death, the accident may be said to have arisen out of or in the course of employment, for which reason his death is compensable. The fact standing alone, that the truck was in motion when the employee boarded, is insufficient to justify the conclusion that he had been notoriously negligent, where it does not appear that the truck was running at a great speed.' And, in a later case, Iloilo Dock &Engineering Co. vs. Workmen's Compensation Commission, 26 SCRA 102, 103, We ruled that' employment includes not only the actual doing of the work, but a reasonable margin of timeand space necessary to be used in passing to and from the place where the work is to be done.If the employee be injured while passing, with the express or implied consent of the employer, to or from his work by a way over the employer's premises, or over those of another in such proximity and relation as to be in practical effect a part of the employer's premises, the injury is one arising out of and in the course of the employment as much as though it had happened while the employee was engaged in his work at the place of its performance. In the case at bar, it can be seen that petitioner left his station at the Central Bank several hours after his regular time off, because the reliever did not arrive, and so petitioner was asked to goon overtime. After permission to leave was given, he went home. There is no evidence on record that petitioner deviated from his usual, regular homeward route or that interruptions occurred in the journey. There is no reason, in principle, why employees should not be protected for a reasonable period of time prior to or after working hours and for a reasonable distance before reaching or after leaving the employer's premises. The decision appealed from is REVERSED and SET ASIDE. Let the case be remanded to the ECC and the GSIS for disposition in accordance with this decision. (GSIS), vs CA and FELONILA ALEGRE F: Private respondent Felonila Alegre’s deceased husband, SPO2 Florencio A. Alegre, was a police officer assigned to the PNP station in the town of Vigan, Ilocos Sur.On December 6, 1994, he was driving his tricycle and ferrying passengers within the vicinity of Imelda Commercial Complex when SPO4 Alejandro Tenorio, Jr., Team/Desk Officer of the Police Assistance Center located at said complex, confronted him regarding his tour of duty.SPO2 Alegre allegedly snubbed SPO4 Tenorio and even directed curse words upon the latter. A verbal tussle then ensued between the two which led to the fatal shooting of the deceased police officer. On account of her husband’s death, private respondent seasonably filed a claim for death benefits with petitioner (GSIS) pursuant to PD No. 626. In its decision on August 7, 1995, the GSIS, denied the claim on the groundthat at the time of SPO2 Alegre’s death, he was performing a personal activity which was notwork-connected which was later on affirmed by the Employees’ Compensation Commission(ECC). Private respondent finally obtained a favorable ruling in the Court of Appeals when itreversed the ECC’s decision and ruled that SPO2 Alegre’s death was work-connected and,therefore, compensable. Hence; GSIS filed a petition

for review on certiorari to the SC; reiterating its position that SPO2 Alegre’s death lacks the requisite element of compensability which is, that the activity being performed at the time of death must be work-connected. I: Whether or not the SPO2 Alegre’s death is compensable pursuant to the applicable laws and regulations. H:Taking together existing jurisprudence and the pertinent guidelines of the ECC with respect to claims for death benefits, namely: (a) that the employee must be at the place where his work requires him to be; (b) that the employee must have been performing his official functions; and(c) that if the injury is sustained elsewhere, the employee must have been executing an order for the employer, it is not difficult to understand then why SPO2 Alegre’s widow should bedenied the claims otherwise due her. Obviously, the matter SPO2 Alegre was attending to atthe time he met his death, that of ferrying passengers for a fee, was intrinsically private andunofficial in nature proceeding as it did from no particular directive or permission of his superior officer. That he may be called upon at any time to render police work as he is considered to beon a round-the-clock duty and was not on an approved vacation leave will not change theconclusion arrived at considering that he was not placed in a situation where he was required to exercise his authority and duty as a policeman. In fact, he was refusing to render one pointingout that he already complied with the duty detail. At any rate, the 24-hour duty doctrine, as applied to policemen and soldiers, serves more as an after-the-fact validation of their acts to place them within the scope of the guidelines rather than a blanket license to benefit them in all situations that may give rise to their deaths. In other words, the 24-hour duty doctrine should not be sweepingly applied to all acts and circumstances causing the death of a police officer but only to those which, although not on official line of duty, are nonetheless basically police service in character. CELERINO VALERIANO,,vs.ECC and GSIS F: Celerino S. Valeriano was employed as a fire truck driver assigned at the San Juan Fire Station.Sometime on the evening of July 3, 1985, petitioner was standing along Santolan Road,Quezon City, when he met a friend by the name of Alexander Agawin. They decided to proceed to Bonanza Restaurant in EDSA, Quezon City, for dinner. On their way home at around 9:30PM, the owner-type jeepney they were riding in figured in a head-on collision with another vehicle at the intersection of N. Domingo and Broadway streets in Quezon City. Due to thestrong impact of the collision, petitioner was thrown out of the vehicle and was severely injured.As a result of the mishap, petitioner was brought to several hospitals for treatment.On September 16, 1985, he filed a claim for income benefits und er PD 626, with theGSIS. His claim for benefits was opposed on the ground that the injuries he sustained did not directly arise or result from the nature of his work. Under the present compensation law, injury and the resulting disability or death is compensable if the injury resulted from an

accident arising out of and in the course of employment. It means that the injury or death must be sustained while the employee is in the performance of hisofficial duty; that the injury is sustained at the place where his work requires him to be; and if the injury is sustained elsewhere, that the employee is executing an order for the employer. The aforementioned conditions are found wanting in the instant case. The accident that the appellant met in the instant case occurred outside of his time and place of work. Neither was appellant performing his official duties as a fireman at the time of the accident. In fact, appellant just left the Bonanza Restaurant where he and his friends had dinner. Apparently, the injuries appellant sustainedfrom the accidentdid not

demonstrate solidly how his job as a fire truck driver was related to the injuries he had suffered. That he sustained the injuries after pursuing a purely personal and social function having dinner with some friends is clear from the records of the case. His injuries were not acquired at his work place; nor were they sustained while he was performing an act within the scope of his employment or in pursuit of an order of his superior. Thus, we agree with the conclusion reached by the appellate court that his injuries and consequent disability were not work-connected and thus not compensable. DENIED.

arise out of [and] in the course of his employment. Considering therefore the absence of a causal link between the contingency for which income benefits [are] being claimed and his occupation as fireman, his claim under PD 626, asamended, cannot be given due course.

FACTS: Petitioner -Wife of late pedro clemente -10 years janitor of doh, assignedin ilocos norte skin clinic Nov 3-14 -1976 hospitalized due to nephritis -Later found out also suffering from portal cirrhosisand leprosy, AKA Hansen’s disease -Nov. 14, 1976, died of uremia due to nephritis. -Wife / PET. Filed for employee’s compensation under labor code to GSIS GSIS -Denied Bec. Ailment is not occupational disease and not the least causally related to his duties and condi of work. -Motion for reco. Denied GSIS - forwarded claim to ECC ECC Rulings: 1.not listed in occupational diseases, 2.no evidence of casual connection 3. had acquired the disease prior employment art 167 labor code: For sickness and the resulting disability and death be compensable : 1.) Sickness must be listed in the occupational diseases. 2.) Proof that risk of contracting the disease is increased by working conditions. PET. Invokes theory of increased risk ECC: - disease was caused by his employment -it was only a recurrence of an existing disease aggravated by nature of work GSIS: prayed to be dropped as party respondent in this case

I: WHETHER PETITIONER'S INJURIES ARE WORK-CONNECTED. H: Injuries and Resulting Disability. Disability benefits are granted an employee who sustains an injury or contracts a sickness resulting in temporary total, permanent total, or permanent partial, disability. For the injury and the resulting disability to be compensable, they must have necessarily resulted from an accident arising out of and in the course of employment. Were Petitioner's Injuries Work Connected? The two components of the coverage formula "arising out of" and "in the c ourse of employment" are said to be separate tests which must be independently satisfied; however, it should not be forgotten that the basic concept of compensation coverage is unitary, not dual, and is best expressed in the word, "work-connection, because an Uncompromising insistence on an independent application of each of the two portions of the test can, in certain cases, exclude clearly workconnected injuries. The words "arising out of" refer to the origin or cause of the accident, and are descriptive of its character, while the words "in the course of" refer to the time, place and circumstances under which the accident takes place. As a matter of general proposition, an injury or accident is said to arise "in the course of employment" when it takes place within the period of the employment, at a place where the employee may reasonably be, and while he is fulfilling his duties or is engaged in doing something incidental thereto. Thus, for injury to be compensable, the standard of "work connection" must be substantially satisfied. The injury and the resulting disability sustained by reason of employment a re compensable regardless of the place where the injured occurred, if it can be proven that at the time of the injury, the employee was acting within the purview of his or her employment and performing an act reasonably necessary or incidental. Petitioner Valeriano was not able to

Clemente vs. Government Service Insurance System

ISSUES: 1. Whether or not there is sufficient evidence to sustain theory of increased risk. -exposed as janitor diseased was to diff. carriers of viral and bacterial diseases , the EE most exposed to dangerous concentration of infected materials and the least likely to know how to avoid infection. -it is unreasonable to not conclude that the working conditions definitely increased the risk of contract f the disease. - Resp’s posture is against / inconsistent with the liberal of the labor code which favor the workers. 2. there have been aggravation of existing ailment but such aggravation is not in the present law. - no evidence deceased was hired in state of having an existing disease_____ to become worse. 3. GSIS, to be dropped as party in the case

- no merit, the fact that the court required GSIS to comment is an indication that it is a necessary party DISPO: Decision appealed is set aside. respondentGSIS ordered to pay. 1.P12,000 death benefits; 2.P1,200 Atty’s fee RUBEN T. LIMBO, v. ECC and SSS. F: Limbo was confined for one week at (PGH) because of joint pains. His work-up revealed that he had elevated BUN, creatinine and anemia. When Limbo was subjected to a renal ultrasound, it was further discovered that he had chronic renal disease and he was forthwith referred to a nephrologist and was advised to undergo a kidney transplant. Limbo underwent a renal transplant at the PGH and was discharged. Limbo filed a claim for compensation benefits before (SSS), invoking (P.D.) No. 626, as amended. However, the claim was denied on the ground that Limbos illness, end-stage renal disease secondary to uric acid nephropathy, had no causal relationship to his job as Area Sales Supervisor. Limbo promptly appealed to (ECC). ECC affirmed the decision of the SSS and dismissed the appeal for lack of merit. CA dismissed, motion also denied. I: whether or not end-stage renal disease secondary to uric acid nephropathy is compensable under P.D. 626, as amended. R: Yes. Under the Amended Rules on Employees Compensation, (f)or the sickness and the resulting disability to be compensable, the sickness must be the result of an occupational disease listed under Annex A of these Rules with the conditions set therein satisfied; otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions. Concededly, end-stage renal disease secondary to uric acid nephropathy is not among the Occupational Diseases under Annex A of the Amended Rules on Employees Compensation. This, however, would not automatically bar petitioners claim for as long as he could prove that the risk of contracting the illness was increased by his working conditions. Petitioners job description showed that he was responsible for the Territory’s collection, merchandising, market hygiene and promotion goals; Principal Liason of the territory with the National Sales Manager, etc. Considering the workload and areas of responsibility of petitioner in this case, it is not unlikely for him to develop hypertension, which in turn led to uremia. It should be stressed that in determining whether a disease is compensable, it is enough that there exists a reasonable work connection. It is sufficient that the hypothesis on which the workmens claim is based is probable since probability, not certainty, is the touchstone. As correctly pointed out by the OSG, a physicians report is the best evidence of work-connection of workmens ailments and can be the basis of an award even if the physician was not presented as a witness.[6 We have no reason to doubt the findings of Dr. Mejia who is an expert in her field of work. Verily, petitioner was able to show that his ailment was work-related.