1

2010 LABOR CASE DIGEST for such review was a Special Civil Action for Certiorari under
Abandonment Rule 65 of the Rules of Court, and that this action should be
Although under normal circumstances, an employees act of filed in the Court of Appeals in strict observance of the
filing an illegal dismissal complaint against his employer is doctrine of the hierarchy of courts. Moreover, it is already
inconsistent with abandonment; in the present case, we settled that under Section 9 of Batas Pambansa Blg. 129, as
simply cannot use that one act to conclude that Pulgar did not amended by Republic Act No. 7902[10] (An Act Expanding the
terminate his employment with PRRM, and in the process Jurisdiction of the Court of Appeals, amending for the purpose
ignore the clear, substantial evidence presented by PRRM that of Section Nine of Batas Pambansa Blg. 129 as amended,
proves otherwise. Our ruling on this point in Leopard known as the Judiciary Reorganization Act of 1980), the Court
Integrated Services, Inc. v. Macalinao is very relevant. We of Appeals pursuant to the exercise of its original jurisdiction
said: over Petitions for Certiorari is specifically given the power to
The fact that respondent filed a complaint for illegal dismissal, pass upon the evidence, if and when necessary, to resolve
as noted by the CA, is not by itself sufficient indicator that factual issues. (PICOP RESOURCES, INCORPORATED (PRI), v.
respondent had no intention of deserting his employment ANACLETO L. TAECA, G.R. No. 160828, August 9, 2010)
since the totality of respondents antecedent acts palpably Respondent alleged in his position paper that after preparing
display the contrary. In Abad v. Roselle Cinema, the Court the CAPEX form on March 3, 1999, he endorsed it to Marivic
ruled that: Villanueva for the signature of the Executive Vice-President
The filing of a complaint for illegal dismissal should be taken Ricardo T. Po. The next day, March 4, 1999, respondent
into account together with the surrounding circumstances of a received the CAPEX form containing the signature of Po.
certain case. In Arc-Men Food Industries Inc. v. NLRC, the Petitioner never controverted these allegations in the
Court ruled that the substantial evidence proffered by the proceedings before the NLRC and the CA despite its
employer that it had not, in the first place, terminated the opportunity to do so. Petitioners belated allegations in its
employee, should not simply be ignored on the pretext that reply filed before this Court that Marivic Villanueva denied
the employee would not have filed the complaint for illegal having seen the CAPEX form cannot be given credit. Points of
dismissal if he had not really been dismissed. This is clearly a law, theories, issues and arguments not brought to the
non-sequitur reasoning that can never validly take the place attention of the lower court, administrative agency or quasi-
of the evidence of both the employer and the employee. judicial body need not be considered by a reviewing court, as
[Emphasis supplied.](PHILIPPINE RURAL RECONSTRUCTION they cannot be raised for the first time at that late stage.
MOVEMENT( RRM)v.VIRGILIO E. PULGAR, G.R. No. 169227, July When a party deliberately adopts a certain theory and the
5, 2010) case is decided upon that theory in the court below, he will
Jurisprudence has held time and again that abandonment is not be permitted to change the same on appeal, because to
totally inconsistent with the immediate filing of a complaint permit him to do so would be unfair to the adverse party.
for illegal dismissal, more so if the same is accompanied by a (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and
prayer for reinstatement. In the present case, however, AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No.
petitioner filed his complaint more than one year after his 171630, August 8, 2010)
alleged termination from employment. Moreover, petitioner Perfection of Appeal
and the other complainants inconsistency in their stand is Clearly, an appeal from a judgment as that involved in the
also shown by the fact that in the complaint form which they present case is perfected only upon the posting of a cash or
personally filled up and filed with the NLRC, they only asked surety bond. Accessories Specialist, Inc. v. Alabanza
for payment of separation pay and other monetary claims. enlightens:
They did not ask for reinstatement. It is only in their Position The posting of a bond is indispensable to the perfection of an
Paper later prepared by their counsel that they asked for appeal in cases involving monetary awards from the decision
reinstatement. This is an indication that petitioner and the of the LA. The intention of the lawmakers to make the bond a
other complainants never had the intention or desire to return mandatory requisite for the perfection of an appeal by the
to their jobs. In fact, there is no evidence to prove that employer is clearly limned in the provision that an appeal by
petitioner and his former co-employees ever attempted to the employer may be perfected only upon the posting of a
return to work after they were dismissed from employment. cash or surety bond. The word only makes it perfectly plain
(ELPIDIO CALIPAY v. NATIONAL LABOR RELATIONS that the lawmakers intended the posting of a cash or surety
COMMISSION, TRIANGLE ACE CORPORATION and JOSE LEE, bond by the employer to be the essential and exclusive
G.R. No. 166411, August 3, 2010) means by which an employers appeal may be perfected. The
Absenteeism word may refers to the perfection of an appeal as optional
Even assuming that respondents absenteeism constitutes on the part of the defeated party, but not to the compulsory
willful disobedience, such offense does not warrant posting of an appeal bond, if he desires to appeal. The
respondents dismissal. Not every case of insubordination or meaning and the intention of the legislature in enacting a
willful disobedience by an employee reasonably deserves the statute must be determined from the language employed; and
penalty of dismissal. There must be a reasonable where there is no ambiguity in the words used, then there is
proportionality between the offense and the penalty. no room for construction.
(PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. JOEY B. The filing of the bond is not only mandatory but also a
TEVES, G.R. No. 143511, November 15, 2010) jurisdictional requirement that must be complied with in order
Attorneys Fees to confer jurisdiction upon the NLRC. Non-compliance
This case involves the propriety of the award of disability therewith renders the decision of the LA final and executory.
compensation under the CBA to respondent, who worked as a This requirement is intended to assure the workers that if they
seaman in the foreign vessel of petitioner Barber Ship prevail in the case, they will receive the money judgment in
Management Ltd. The award of attorneys fees is justified their favor upon the dismissal of the employers appeal. It is
under Article 2208 (2) of the Civil Code. Even if petitioners did intended to discourage employers from using an appeal to
not withhold payment of a smaller disability benefit, delay or evade their obligation to satisfy their employees just
respondent was compelled to litigate to be entitled to a higher and lawful claims. (citations omitted, italics in the original;
disability benefit. Moreover, in HFS Philippines, Inc. v. Pilar emphasis and underscoring supplied)
[11] and Iloreta v. Philippine Transmarine Carriers, Inc., [12] (MINDANAO TIMES CORPORATION v. MITCHEL R. CONFESOR,
the Court sustained the NLRCs award of attorneys fees, in G.R. No. 183417, February 5, 2010)
addition to disability benefits to which the concerned seamen- Rule on Technicality
claimants were entitled. It is no different in this case wherein In any case, even if the appeal was filed one day late, the
respondent has been awarded disability benefit and attorneys same should have been entertained by the NLRC. Indeed, the
fees by the Labor Arbiter and the Court of Appeals. It is only appeal must be perfected within the statutory or
just that respondent be also entitled to the award of reglementary period. This is not only mandatory, but also
attorneys fees. In Iloreta v. Philippine Transmarine Carriers, jurisdictional. Failure to perfect the appeal on time renders the
Inc., [13] the Court found the amount of US$1,000.00 as assailed decision final and executory and deprives the
reasonable award of attorneys fees. (NFD INTERNATIONAL appellate court or body of the legal authority to alter the final
MANNING AGENTS, INC./BARBER SHIP MANAGEMENT LTD v. judgment, much less entertain the appeal. However, this
ESMERALDO C. ILLESCAS, G.R. No. 183054, September 29, Court has, time and again, ruled that, in exceptional cases, a
2010) belated appeal may be given due course if greater injustice
Appeal will be visited upon the party should the appeal be denied.
The power of the Court of Appeals to review NLRC decisions The Court has allowed this extraordinary measure even at the
via Rule 65 or Petition for Certiorari has been settled as early expense of sacrificing order and efficiency if only to serve the
as in our decision in St. Martin Funeral Home v. National Labor greater principles of substantial justice and equity.
Relations Commission. This Court held that the proper vehicle (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL
 2

LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. that his relationship with respondents has the attributes of
180045, November 17, 2010 ) employer-employee on the basis of the above-mentioned four-
Appearance of a Non-Lawyer fold test. Therefore, Abueva was not able to discharge the
1. SNS submits that the CA committed a serious error in ruling burden of proving the existence of an employer-employee
that the respondents representatives non-membership in the relationship. Moreover, Abueva was not able to refute
bar is sufficient justification for their failure to comply with the respondents assertions that he hires other men to perform
requirements of the law. SNS argues that this ruling excuses weeding job in the hacienda and that he is not exclusively
the employment of a non-lawyer and places the acts of the working for respondents. (Romeo Basay, et al v. Hacienda
latter on the same level as those of a member of the Bar. Our Consolacion, et al., G.R. No. 175532, April 19, 2010)
Labor Code allows a non-lawyer to represent a party before The fact of filing a resignation letter alone does not shift the
the Labor Arbiter and the Commission, but provides burden of proving that the employees dismissal was for a just
limitations: Non-lawyers may appear before the Commission and valid cause from the employer to the employee. In Mora
or any Labor Arbiter only: (1) If they represent themselves; or v. Avesco, we ruled that should the employer interpose the
(2) If they represent their organization or members thereof. defense of resignation, it is still incumbent upon the employer
Thus, SNS concludes that the respondents representative had to prove that the employee voluntarily resigned. To our mind,
no personality to appear before the Labor Arbiter or the NLRC, Outdoor Clothing did not discharge this burden by belatedly
and his representation for the respondents should produce no presenting the three memoranda it relied on. If these
legal effect. (SPIC N SPAN SERVICES CORPORATION v. GLORIA memoranda were authentic, they would have shown that
PAJE et. al, G.R. No. 174084, August 25, 2010) Peaflors resignation preceded the appointment of
Bond Buenaobra. Thus, they would be evidence supporting the
In the present case, the Deed of Assignment, as well as the claim of voluntariness of Peaflors resignation and should
passbook, which petitioner submitted to the NLRC is neither a have been presented early on in the case any lawyer or
cash nor a surety bond. Petitioners appeal to the NLRC was layman by simple logic can be expected to know this. Outdoor
thus not duly perfected, thereby rendering the Labor Arbiters Clothing however raised them only before the NLRC when
Decision final and executory. (MINDANAO TIMES they had lost the case before the labor arbiter and now
CORPORATION v. MITCHEL R. CONFESOR, G.R. No. 183417, conveniently attributes the failure to do so to its former
February 5, 2010) counsel. Outddor Clothings belated explanation as expressed
Burden of Proof in its motion for reconsideration, to our mind, is a submission
In termination cases, the employer has the burden of proving, we cannot accept for serious consideration. We find it
by substantial evidence, that the dismissal is for just cause. If significant that Peaflor attacked the belated presentation of
the employer fails to discharge the burden of proof, the these memoranda in his Answer to Outdoor Clothings
dismissal is deemed illegal. In AMA Computer College East Memoranda of Appeal with the NLRC, but records do not show
Rizal v. Ignacio, the Court held that: that Outdoor Clothing ever satisfactorily countered Peaflors
In termination cases, the burden of proof rests on the arguments. It was not until we pointed out Outdoor Clothings
employer to show that the dismissal is for just cause. When failure to explain its belated presentation of the memoranda
there is no showing of a clear, valid and legal cause for the in our January 21, 2010 decision that Outdoor Clothing offered
termination of employment, the law considers the matter a a justification. (MANOLO A. PEAFLOR V. OUTDOOR CLOTHING
case of illegal dismissal and the burden is on the employer to MANUFACTURING CORPORATION, G.R. No. 177114, April 13,
prove that the termination was for a valid or authorized cause. 2010)
And the quantum of proof which the employer must discharge Business Judgment Rule
is substantial evidence. An employees dismissal due to The determination that the employees services are no longer
serious misconduct must be supported by substantial necessary or sustainable and, therefore, properly terminable
evidence. Substantial evidence is that amount of relevant for being redundant is an exercise of business judgment of the
evidence as a reasonable mind might accept as adequate to employer. The wisdom or soundness of this judgment is not
support a conclusion, even if other minds, equally reasonable, subject to discretionary review of the Labor Arbiter and the
might conceivably opine otherwise. NLRC, provided there is no violation of law and no showing
(ALEX GURANGO v.BEST CHEMICALS AND PLASTICS INC. and that it was prompted by an arbitrary or malicious act. In other
MOON PYO HONG, G.R. No. 174593, August 25, 2010) words, it is not enough for a company to merely declare that it
Nothing on record indicates the reason for the respondents has become overmanned. It must produce adequate proof of
termination from employment, although the fact of such redundancy to justify the dismissal of the affected
termination was never disputed. Swift denied liability on the employees. (COCA-COLA BOTTLERS PHILIPPINES, INC v.
basis of its contract with SNS. The contract was not presented ANGEL U. DEL VILLAR, G.R. No. 163091,October 6, 2010)
before the Labor Arbiter, although Swift averred that under Petitioner harps on the fact that there was no actual shutdown
the contract, SNS would supply promo girls, merchandisers of Paper Mill No. 4 but that it continued to be operational. No
and other promotional personnel to handle all promotional evidence, however, was presented to prove that there was
aspects and merchandising strategy of Swift. We can assume, continuous operation after the shutdown in the year 1999.
for lack of proof to the contrary, that the respondents What the records reveal is that Paper Mill No. 4 resumed its
termination from employment was illegal since neither SNS operation in 2000 due to a more favorable business climate.
nor Swift, as employers, presented any proof that their The resumption of its industrial paper manufacturing
termination from employment was legal. Upon proof of operations does not, however, make respondents
termination of employment, the employer has the burden of streamlining/reorganization plan illegal because, again, the
proof that the dismissal was valid; absent this proof, the abolishment of Paper Mill No. 4 in 1999 was a business
termination from employment is deemed illegal, as alleged by judgment arrived at to prevent a possible financial drain at
the dismissed employees. (SPIC N SPAN SERVICES that time. As long as no arbitrary or malicious action on the
CORPORATION v. GLORIA PAJE et. al, G.R. No. 174084, August part of an employer is shown, the wisdom of a business
25, 2010) judgment to implement a cost saving device is beyond this
As to the second issue, the law mandates that the burden of courts determination. After all, the free will of management to
proving the validity of the termination of employment rests conduct its own business affairs to achieve its purpose cannot
with the employer. Failure to discharge this evidentiary burden be denied. (DANNIE M. PANTOJA v. SCA HYGIENE
would necessarily mean that the dismissal was not justified PRODUCTSCORPORATION, G.R. No. 163554, April 23, 2010)
and, therefore, illegal. Unsubstantiated suspicions, Collective Bargaining Agreement
accusations, and conclusions of employers do not provide for While a contract constitutes the law between the parties, this
legal justification for dismissing employees. In case of doubt, is so in the present case with respect to the CBA, not to the
such cases should be resolved in favor of labor, pursuant to MOA in which even the unions signatories had expressed
the social justice policy of labor laws and the Constitution. reservations thereto. But even assuming arguendo that the
(CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and MOA is treated as a new CBA, since it is imbued with public
AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. interest, it must be construed liberally and yield to the
171630, August 8, 2010) common good.
In this regard, petitioners claim that Abueva has worked with While the terms and conditions of a CBA constitute the law
respondents for more than a year already and was allowed to between the parties, it is not, however, an ordinary contract
stay inside the hacienda. As such, he is a regular employee to which is applied the principles of law governing ordinary
entitled to monetary claims. However, petitioners have not contracts. A CBA, as a labor contract within the contemplation
presented competent proof that respondents engaged the of Article 1700 of the Civil Code of the Philippines which
services of Abueva; that respondents paid his wages or that governs the relations between labor and capital, is not merely
respondents could dictate what his conduct should be while at contractual in nature but impressed with public interest, thus,
work. In other words, Abuevas allegations did not establish it must yield to the common good. As such, it must be
 3

construed liberally rather than narrowly and technically, and control over the decisions and resources of project proponents
the courts must place a practical and realistic construction or owners. There is no construction company that does not
upon it, giving due consideration to the context in which it is wish it has such control but the reality, understood by
negotiated and purpose which it is intended to serve. construction workers, is that work depended on decisions and
(emphasis and underscoring supplied) developments over which construction companies have no
(IRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE say. (DANIEL P. JAVELLANA , JR.,V. ALBINO BELEN, G.R. No.
WORKERS v. CIRTEK ELECTRONICS, INC, G.R. No. 190515, 181913, ALBINO BELEN V. DANIEL P. JAVELLANA, JR. and
November 15, 2010) JAVELLANA FARMS, INC., G.R. No. 182158, March 5, 2010)
Moreover, the last sentence of Article 253 which provides for Constructive Dismissal
automatic renewal pertains only to the economic provisions of Accordingly, petitioners are liable for constructive dismissal
the CBA, and does not include representational aspect of the for placing respondents on shifts of a few days per month and
CBA. An existing CBA cannot constitute a bar to a filing of a in eventually denying them workplace access, rendering
petition for certification election. When there is a respondents employment impossible, unreasonable or
representational issue, the status quo provision in so far as unlikely, leaving them no choice but to quit. (PASIG CYLINDER
the need to await the creation of a new agreement will not MFG., CORP.,et. al v. DANILO ROLLO, et. al., G.R. No. 173631
apply. Otherwise, it will create an absurd situation where the September 8, 2010)
union members will be forced to maintain membership by While we recognize the rule that in illegal dismissal cases, the
virtue of the union security clause existing under the CBA and, employer bears the burden of proving that the termination
thereafter, support another union when filing a petition for was for a valid or authorized cause, in the present case,
certification election. If we apply it, there will always be an however, the facts and the evidence do not establish a prima
issue of disloyalty whenever the employees exercise their facie case that the employee was dismissed from
right to self-organization. The holding of a certification employment. Before the employer must bear the burden of
election is a statutory policy that should not be circumvented, proving that the dismissal was legal, the employee must first
or compromised. (PICOP RESOURCES, INCORPORATED (PRI), v. establish by substantial evidence the fact of his dismissal from
ANACLETO L. TAECA, G.R. No. 160828, August 9, 2010) service. Logically, if there is no dismissal, then there can be
Certificate of Non-Forum Shopping no question as to its legality or illegality. Bare allegations of
The filing of a certificate of non-forum shopping is mandatory constructive dismissal, when uncorroborated by the evidence
in initiatory pleadings. The subsequent compliance with the on record, cannot be given credence.
requirement does not excuse a partys failure to comply As we said in Machica v. Roosevelt Services Center, Inc.:
therewith in the first instance. In those cases where the Court The rule is that one who alleges a fact has the burden of
excused non-compliance with the requirement to submit a proving it; thus, petitioners were burdened to prove their
certificate of non-forum shopping, it found special allegation that respondents dismissed them from their
circumstances or compelling reasons which made the strict employment. It must be stressed that the evidence to prove
application of the Circular clearly unjustified or inequitable. In this fact must be clear, positive and convincing. The rule that
this case, however, the petitioners offered no valid the employer bears the burden of proof in illegal dismissal
justification for their failure to comply with the Circular. cases finds no application here because the respondents deny
(MANDAUE GALLEON TRADE, INC. and GAMALLOSONS having dismissed the petitioners. [Emphasis supplied.]
TRADERS, INC., represented by FAUSTO B. GAMALLO v. (PHILIPPINE RURAL RECONSTRUCTION
BIENVENIDO ISIDTO et.al., G.R. No. 181051,July 5, 2010) MOVEMENT( RRM)v.VIRGILIO E. PULGAR, G.R. No. 169227, July
Certification Election 5, 2010)
Applying the same provision, it can be said that while it is Another basic principle is that expressed in Article 4 of the
incumbent for the employer to continue to recognize the Labor Code that all doubts in the interpretation and
majority status of the incumbent bargaining agent even after implementation of the Labor Code should be interpreted in
the expiration of the freedom period, they could only do so favor of the workingman. This principle has been extended by
when no petition for certification election was filed. The jurisprudence to cover doubts in the evidence presented by
reason is, with a pending petition for certification, any such the employer and the employee. As shown above, Peaflor
agreement entered into by management with a labor has, at very least, shown serious doubts about the merits of
organization is fraught with the risk that such a labor union the companys case, particularly in the appreciation of the
may not be chosen thereafter as the collective bargaining clinching evidence on which the NLRC and CA decisions were
representative. The provision for status quo is conditioned on based. In such contest of evidence, the cited Article 4 compels
the fact that no certification election was filed during the us to rule in Peaflors favor. Thus, we find that Peaflor was
freedom period. Any other view would render nugatory the constructively dismissed given the hostile and discriminatory
clear statutory policy to favor certification election as the working environment he found himself in, particularly
means of ascertaining the true expression of the will of the evidenced by the escalating acts of unfairness against him
workers as to which labor organization would represent them. that culminated in the appointment of another HRD manager
(PICOP RESOURCES, INCORPORATED (PRI), v. ANACLETO L. without any prior notice to him. Where no less than the
TAECA, G.R. No. 160828, August 9, 2010) companys chief corporate officer was against him, Peaflor
Compensability of a Non-occupational Disease had no alternative but to resign from his employment.
On these points, we sustain the Labor Arbiter and the NLRC in (MANOLO A. PEAFLOR v. OUTDOOR CLOTHING
granting total and permanent disability benefits in favor of MANUFACTURING CORPORATION, G.R. No. 177114, January 21,
Villamater, as it was sufficiently shown that his having 2010)
contracted colon cancer was, at the very least, aggravated by While the letter states that Peaflors resignation was
his working conditions, taking into consideration his dietary irrevocable, it does not necessarily signify that it was also
provisions on board, his age, and his job as Chief Engineer, voluntarily executed. Precisely because of the attendant
who was primarily in charge of the technical and mechanical hostile and discriminatory working environment, Peaflor
operations of the vessels to ensure voyage safety. decided to permanently sever his ties with Outdoor Clothing.
Jurisprudence provides that to establish compensability of a This falls squarely within the concept of constructive dismissal
non-occupational disease, reasonable proof of work- that jurisprudence defines, among others, as involuntarily
connection and not direct causal relation is required. resignation due to the harsh, hostile, and unfavorable
Probability, not the ultimate degree of certainty, is the test of conditions set by the employer. It arises when a clear
proof in compensation proceedings. (LEONIS NAVIGATION CO., discrimination, insensibility, or disdain by an employer exists
INC. and WORLD MARINE PANAMA, S.A v. CATALINO U. and has become unbearable to the employee. The gauge for
VILLAMATER and/or The Heirs of the Late Catalino U. constructive dismissal is whether a reasonable person in the
Villamater, represented herein by Sonia Mayuyu Villamater; employees position would feel compelled to give up his
and NATIONAL LABOR RELATIONS COMMISSION, G.R. No. employment under the prevailing circumstances. With the
179169, March 3, 2010) appointment of Buenaobra to the position he then still
Construction Industry occupied, Peaflor felt that he was being eased out and this
Length of Service perception made him decide to leave the company. (MANOLO
Generally, length of service provides a fair yardstick for A. PEAFLOR V. OUTDOOR CLOTHING MANUFACTURING
determining when an employee initially hired on a temporary CORPORATION, G.R. No. 177114, April 13, 2010)
basis becomes a permanent one, entitled to the security and Withholding of Salary amounts to Constructive Dismissal
benefits of regularization. But this standard will not be fair, if In this case, the withholding of respondents salary does not
applied to the construction industry, simply because fall under any of the circumstances provided under Article
construction firms cannot guarantee work and funding for its 113. Neither was it established with certainty that respondent
payrolls beyond the life of each project. And getting projects is did not work from November 16 to November 30, 2005.
not a matter of course. Construction companies have no Hence, the Court agrees with the LA and the CA that the
 4

unlawful withholding of respondents salary amounts to date of filing. This presupposes, however, that the envelope or
constructive dismissal. (SHS PERFORATED MATERIALS, INC., registry receipt and the dates appearing thereon are duly
WINFRIED HARTMANNSHENN, and HINRICH JOHANN authenticated before the tribunal where they are presented.
SCHUMACHER v. MANUEL F. DIAZ, G.R. No. 185814, October (GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL
13, 2010) LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No.
Contempt 180045, November 17, 2010 )
To be considered contemptuous, an act must be clearly Dismissal of Corporate Officer
contrary to or prohibited by the order of the court or tribunal. The criteria for distinguishing between corporate officers who
A person cannot, for disobedience, be punished for contempt may be ousted from office at will, on one hand, and ordinary
unless the act which is forbidden or required to be done is corporate employees who may only be terminated for just
clearly and exactly defined, so that there can be no cause, on the other hand, do not depend on the nature of the
reasonable doubt or uncertainty as to what specific act or services performed, but on the manner of creation of the
thing is forbidden or required. (BANK OF THE PHILIPPINE office. In the respondents case, he was supposedly at once an
ISLANDS v. LABOR ARBITER RODERICK JOSEPH CALANZA et employee, a stockholder, and a Director of Matling. The
al., G.R. No. 180699, October 13, 2010) circumstances surrounding his appointment to office must be
Control Test fully considered to determine whether the dismissal
It should be remembered that the control test merely calls for constituted an intra-corporate controversy or a labor
the existence of the right to control, and not necessarily the termination dispute. We must also consider whether his status
exercise thereof. It is not essential that the employer actually as Director and stockholder had any relation at all to his
supervises the performance of duties of the employee. It is appointment and subsequent dismissal as Vice President for
enough that the former has a right to wield the power. Finance and Administration. (ATLING INDUSTRIAL AND
(MANILA WATER COMPANY, INC, v. JOSE J. DALUMPINES, ET. Al., COMMERCIAL CORPORATION,RICHARD K. SPENCER,CATHERINE
G.R. No. 175501, October 4, 2010) SPENCER, AND ALEX MANCILLA v. RICARDO R. COROS, G.R.
CBA Coverage No. 157802, October 13, 2010)
Under these terms, the petitioners are members of the Dole Certification
appropriate bargaining unit because they are regular rank- In this case, petitioners failed to discharge such burden of
and-file employees and do not belong to any of the excluded proof. The Certifications from the DOLE stated that there are
categories. Specifically, nothing in the records shows that no pending labor cases against petitioners filed before said
they are supervisory or confidential employees; neither are office, but said certifications do not cover cases filed before
they casual nor probationary employees. Most importantly, the National Labor Relations Commission and the National
the labor arbiters decision of January 17, 2002 affirmed all Conciliation and Mediation Board. The Order dated January
the way up to the CA level ruled against ABS-CBNs 17, 2001 issued by the DOLE, in fact, showed that in the year
submission that they are independent contractors. Thus, as 2000, petitioner security agency was found to have
regular rank-and-file employees, they fall within CBA coverage committed the following violations: underpayment of overtime
under the CBAs express terms and are entitled to its benefits. pay, underpayment of 13th month pay, underpayment of 5
(FARLEY FULACHE et. al., v. ABS-CBN BROADCASTING days Service Incentive Leave Pay, and underpayment of night
CORPORATION, G.R. No. 183810, January 21, 2010) shift differential pay. Then, said Order stated that, since
Damages petitioner security agency had submitted [p]ayrolls showing
Because of his unjustified dismissal, we likewise award in Del backwages of the above-noted violations amounting to x x x
Villars favor moral and exemplary damages. Award of moral (P443,512.51) benefitting 279 guards to show compliance
and exemplary damages for an illegally dismissed employee is with labor laws, the DOLE considered the inspection closed
proper where the employee had been harrassed and and terminated. For the years 2001and 2002, the DOLE
arbitrarily terminated by the employer. Moral damages may Reports stated only that based on records submitted by
be awarded to compensate one for diverse injuries such as petitioners, it had no violations. Verily, such documents from
mental anguish, besmirched reputation, wounded feelings, the DOLE do not conclusively prove that respondent, in
and social humiliation occasioned by the employers particular, has been paid all her salaries and other benefits in
unreasonable dismissal of the employee. We have full. In fact, the Order dated January 17, 2001 even bolsters
consistently accorded the working class a right to recover respondents claim that she had not been paid overtime pay,
damages for unjust dismissals tainted with bad faith; where 13th month pay, and Service Incentive Leave Pay. The
the motive of the employer in dismissing the employee is far statement in said Order, that backwages for 279 guards had
from noble. The award of such damages is based not on the been paid, does not in any way prove that respondent is one
Labor Code but on Article 220 of the Civil Code. These of those 279 guards, since petitioners failed to present
damages, however, are not intended to enrich the illegally personnel files, payrolls, remittances, and other similar
dismissed employee, such that, after deliberations, we find documents which would have proven payment of
the amount of P100,000.00 for moral damages and respondents money claims. It was entirely within petitioners
P50,000.00 for exemplary damages sufficient to assuage the power to present such employment records that should
sufferings experienced by Del Villar and by way of example or necessarily be in their possession; hence, failure to present
correction for the public good. (COCA-COLA BOTTLERS such evidence must be taken against them. (DANSART
PHILIPPINES, INC v. ANGEL U. DEL VILLAR, G.R. No. 163091, SECURITY FORCE & ALLIED SERVICES COMPANY and DANILO A.
October 6, 2010) SARTE v. JEAN O. BAGOY, G.R. No. 168495, July 2, 2010)
On the matter of damages prayed for by the petitioners, we Due Process
have held that as a general rule, a corporation cannot suffer The purpose of the one month prior notice rule is to give DOLE
nor be entitled to moral damages. A corporation, and by an opportunity to ascertain the veracity of the cause of
analogy a labor organization, being an artificial person and termination. Non-compliance with this rule clearly violates the
having existence only in legal contemplation, has no feelings, employees right to statutory due process. (SHIMIZU PHILS.
no emotions, no senses; therefore, it cannot experience CONTRACTORS, INC. v. VIRGILIO P. CALLANTA, G.R. No.
physical suffering and mental anguish. Mental suffering can 165923, September 29, 2010)
be experienced only by one having a nervous system and it With regard to the requirement of a hearing, the essence of
flows from real ills, sorrows, and griefs of life all of which due process lies in an opportunity to be heard. Such
cannot be suffered by an artificial, juridical person. A fortiori, opportunity was afforded the petitioner when she was asked
the prayer for exemplary damages must also be denied. to explain her side of the story. In Metropolitan Bank and Trust
Nevertheless, we find it in order to award (1) nominal Company v. Barrientos, we held that, the essence of due
damages in the amount of P250,000.00 on the basis of our process lies simply in an opportunity to be heard, and not that
ruling in De La Salle University v. De La Salle University an actual hearing should always and indispensably be held.
Employees Association (DLSUEA-NAFTEU) and Article 2221, Similarly in Philippine Pasay Chung Hua Academy v. Edpan, we
and (2) attorneys fees equivalent to 10% of the monetary held that, [e]ven if no hearing or conference was conducted,
award. The remittance to petitioners of the collected union the requirement of due process had been met since he was
dues previously turned over to Remigio and Villareal is accorded a chance to explain his side of the controversy.
likewise in order. ( EMPLOYEES UNION OF BAYER PHILS.,v. (NAGKAKAISANG LAKAS NG MANGGAGAWA SA KEIHIN(NLMK-
BAYER PHILIPPINES, INC., G.R. No. 162943, December 6, 2010) OLALIA-KMU) andHELEN VALENZUELA v. KEIHIN PHILIPPINES
Date of Filing of Pleadings CORPORATION, G.R. No. 171115, August 9, 2010)
Thus, the date of filing is determinable from two sources: from Significantly, Artificio regrettably chose not to present his side
the post office stamp on the envelope or from the registry at the administrative hearing scheduled to look into the
receipt, either of which may suffice to prove the timeliness of factual issues that accompanied the accusation against him.
the filing of the pleadings. If the date stamped on one is In fact, he avoided the investigation into the charges by filing
earlier than the other, the former may be accepted as the his illegal dismissal complaint ahead of the scheduled
 5

investigation. He, on his own decided that his preventive investigation conducted while Loreta was on leave. The law
suspension was in fact illegal dismissal and that he is entitled requires that two notices be given to an employee prior to a
to backwages and separation pay. Indeed, Artificio would even valid termination: the first notice is to inform the employee of
reject reinstatement revealing his bent to have his own way the charges against her with a warning that she may be
through his own means. As aptly noted by the NLRC, Artificio terminated from her employment and giving her reasonable
preempted the investigation that could have afforded him the opportunity within which to explain her side, and the second
due process of which he would then say he was denied. (JOSE notice is the notice to the employee that upon due
P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION, consideration of all the circumstances, she is being
G.R. No. 172988, July 26, 2010) terminated from her employment. This is a requirement of due
The essence of due process is the opportunity to be heard; it process and clearly, Loreta did not receive any of those
is the denial of this opportunity that constitutes violation of required notices. (WENSHA SPA CENTER, INC. v. LORETA T.
due process of law. The respondent was given the opportunity YUNG, G.R. No. 185122,
to be heard when a proper notice of investigation was sent to August 16, 2010)
him, although the notice did not reach him for reasons outside In this case, the Labor Arbiter, the NLRC and the Court of
the petitioners control. He was not also totally unheard on the Appeals all found that respondents were validly terminated
matter as he was able to explain his side through the two (2) due to the completion of the phases of work for which
explanation letters he submitted. These letters are clear respondents services were engaged. The above rule clearly
indications that he intimately knew of the matter for which he states, If the termination is brought about by the completion
was being investigated. If he was denied due process at all, of the contract or phase thereof, no prior notice is required.
the denial was with respect to the charges of extortion, Cioco, Jr. v. C.E. Construction Corporation explained that this is
tardiness and absenteeism, which are grounds invoked because completion of the work or project automatically
separately from loss of trust and confidence and which were terminates the employment, in which case, the employer is,
not serious considerations in the dismissal that followed. We under the law, only obliged to render a report to the DOLE on
need not therefore consider these grounds as material to the the termination of the employment. (D.M. CONSUNJI, INC. v.
present case. (BIBIANA FARMS AND MILLS, INC v. ARTURO ANTONIO GOBRES et. al., G.R. No. 169170, August 8, 2010)
LADO, G.R. No. 157861, February 2, 2010) Notice and Hearing
Petitioners should thus indemnify Dy for their failure to As can be seen, under the peculiar circumstances of this case,
observe the requirements of due process. Dy is not entitled to it cannot be concluded that the sending of the notices and
reinstatement, backwages and attorneys fees because Dys setting of hearings were a mere afterthought because
dismissal is for just cause but without due process. In light of petitioners were still awaiting the report from Bagasala when
this Courts ruling in Agabon v. National Labor Relations respondents pre-empted the results of the ongoing
Commission, the violation of Dys right to statutory due investigation by filing the subject labor complaint. For this
process by petitioners, even if the dismissal was for a just reason, there was sufficient compliance with the twin
cause, warrants the payment of indemnity in the form of requirements of notice and hearing even if the notices were
nominal damages. This indemnity is intended not to penalize sent and the hearing conducted after the filing of the labor
the employer but to vindicate or recognize the employees complaint. Thus, the award of nominal damages by the
right to statutory due process which was violated by the appellate court is improper. (New Puerto Commercial and
employer. Considering that both the Labor Arbiter and the Richard Lim v. Rodel Lopez and Felix Gavan G.R. No. 169999,
NLRC found that petitioners already gave Dy P120,000 of their July 26, 2010) Dismissal due to closed shop CBA provision
own free will, this amount should thus constitute the nominal Irrefragably, GMC cannot dispense with the requirements of
damages due to Dy. (HILTON HEAVY EQUIPMENT notice and hearing before dismissing Casio, et al. even when
CORPORATION v. ANANIAS P. DY, G.R. No. 164860, February 2, said dismissal is pursuant to the closed shop provision in the
2010) CBA. The rights of an employee to be informed of the charges
Hearing against him and to reasonable opportunity to present his side
While no actual hearing was conducted before petitioners in a controversy with either the company or his own union are
dismissed respondent, the same is not fatal as only an ample not wiped away by a union security clause or a union shop
opportunity to be heard is what is required in order to satisfy clause in a collective bargaining agreement. An employee is
the requirements of due process. Accordingly, this Court is entitled to be protected not only from a company which
guided by Solid Development Corporation Workers Association disregards his rights but also from his own union the
v. Solid Development Corporation (Solid), where the validity of leadership of which could yield to the temptation of swift and
the dismissal of two employees was upheld notwithstanding arbitrary expulsion from membership and hence dismissal
that no hearing was conducted, to wit: from his job. (GENERALMILLING CORPORATION, v. ERNESTO
[W]ell-settled is the dictum that the twin requirements of CASIO, et al., G.R. No. 149552, March 10, 2010)
notice and hearing constitute the essential elements of due Effect of the Dismissal of Criminal Complaint
process in the dismissal of employees. It is a cardinal rule in The mere fact that the criminal complaints against the
our jurisdiction that the employer must furnish the employee terminated Union members were subsequently dismissed for
with two written notices before the termination of one reason or another does not extinguish their liability under
employment can be effected: (1) the first apprises the the Labor Code. Nor does such dismissal bar the admission of
employee of the particular acts or omissions for which his the affidavits, documents, and photos presented to establish
dismissal is sought; and (2) the second informs the employee their identity and guilt during the hearing of the petition to
of the employers decision to dismiss him. The requirement of declare the strike illegal. The technical grounds that the Union
a hearing, on the other hand, is complied with as long as interposed for denying admission of the photos are also not
there was an opportunity to be heard, and not necessarily that binding on the NLRC. (C. ALCANTARA & SONS, INC. v. COURT
an actual hearing was conducted. OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No.
In separate infraction reports, petitioners were both apprised 179220, September 29, 2010)
of the particular acts or omissions constituting the charges Employment Contracts
against them. They were also required to submit their written Significantly, too, the Articles of Merger and Plan of Merger
explanation within 12 hours from receipt of the reports. Yet, dated April 7, 2000 did not contain any specific stipulation
neither of them complied. Had they found the 12-hour period with respect to the employment contracts of existing
too short, they should have requested for an extension of personnel of the non-surviving entity which is FEBTC. Unlike
time. Further, notices of termination were also sent to them the Voluntary Arbitrator, this Court cannot uphold the
informing them of the basis of their dismissal. In fine, reasoning that the general stipulation regarding transfer of
petitioners were given due process before they were FEBTC assets and liabilities to BPI as set forth in the Articles of
dismissed. Even if no hearing was conducted, the requirement Merger necessarily includes the transfer of all FEBTC
of due process had been met since they were accorded a employees into the employ of BPI and neither BPI nor the
chance to explain their side of the controversy. (PHARMACIA FEBTC employees allegedly could do anything about it. Even if
and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO it is so, it does not follow that the absorbed employees should
P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010) not be subject to the terms and conditions of employment
Notice obtaining in the surviving corporation.
More importantly, the records are bereft of evidence that The rule is that unless expressly assumed, labor contracts
Loreta was duly informed of the charges against her and that such as employment contracts and collective bargaining
she was given the opportunity to respond to those charges agreements are not enforceable against a transferee of an
prior to her dismissal. If there were indeed charges against enterprise, labor contracts being in personam, thus binding
Loreta that Wensha had to investigate, then it should have only between the parties. A labor contract merely creates an
informed her of those charges and required her to explain her action in personam and does not create any real right which
side. Wensha should also have kept records of the should be respected by third parties. This conclusion draws its
 6

force from the right of an employer to select his employees Restaurant, acted in bad faith. Neither did respondent clearly
and to decide when to engage them as protected under our and convincingly prove that petitioner, as Vice-President of
Constitution, and the same can only be restricted by law VIPS Coffee Shop and Restaurant, acted in bad faith. In fact,
through the exercise of the police power.(BANK OF THE there was no evidence whatsoever to show petitioners
PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO participation in respondents alleged illegal dismissal. Clearly,
CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. the twin requisites of allegation and proof of bad faith,
164301, August 10, 2010) necessary to hold petitioner personally liable for the monetary
Equality awards to respondent, are lacking. (IRENE MARTEL FRANCISCO
We find these guidelines complied with in the present case. To v. NUMERIANO MALLEN, JR, G.R. No. 173169, September 22,
reiterate, Lado held a position of trust and confidence and was 2010)
given access to and authority over company property with Union Fraud/Misrepresentation
clear tasks and guidelines laid down very early in his In Heritage Hotel Manila v. Pinag-Isang Galing at Lakas ng
employment. Like any business entity, the petitioner has mga Manggagawa sa Heritage Manila, the employer filed a
every right to protect itself from actual threats to the viability petition to revoke the registration of its rank-and-file
of its operations. Lado, given what happened on September 7, employees union, accusing it of committing fraud and
1998, not only violated the companys trust and confidence; misrepresentation. The Court held that the petition was
he had become a threat to the viability of company operations rightfully denied because the employer failed to prove that
and to rule that he should be reinstated would be oppressive the labor union committed fraud and misrepresentation. The
to the petitioner. The law, in protecting the rights of the Court held that:
employee, authorizes neither the oppression nor the self- Did respondent PIGLAS union commit fraud and
destruction of the employer. (BIBIANA FARMS AND MILLS, INC misrepresentation in its application for union registration? We
v. ARTURO LADO, G.R. No. 157861, February 2, 2010) agree with the DOLE-NCR and the BLR that it did not. Except
Evidence for the evident discrepancies as to the number of union
Even if we assume that under the above provision of the members involved as these appeared on the documents that
contract, Dacuital was informed of the nature of his supported the unions application for registration, petitioner
employment and the duration of the project, that same company has no other evidence of the alleged
contract is not sufficient evidence to show that the other misrepresentation. But those discrepancies alone cannot be
employees were so informed. It is undisputed that petitioners taken as an indication that respondent misrepresented the
had individual employment contracts, yet respondents opted information contained in these documents.
not to present them on the lame excuse that they were The charge that a labor organization committed fraud and
similarly situated as Dacuital. The non-presentation of these misrepresentation in securing its registration is a serious
contracts gives rise to the presumption that the employees charge and deserves close scrutiny. It is serious because once
were not informed of the nature and duration of their such charge is proved, the labor union acquires none of the
employment. It is doctrinally entrenched that in illegal rights accorded to registered organizations. Consequently,
dismissal cases, the employer has the burden of proving with charges of this nature should be clearly established by
clear, accurate, consistent, and convincing evidence that the evidence and the surrounding circumstances. (Emphasis
dismissal was valid. Absent any other proof that the project supplied)
employees were informed of their status as such, it will be (YOKOHAMA TIRE PHILIPPINES, INC., v. YOKOHAMA EMPLOYEES
presumed that they are regular employees. (JUDY O. UNION, G.R. No. 163532, March 10, 2010 )
DACUITAL , et. al. v. L.M. CAMUS ENGINEERING CORPORATION Execution
and/or LUIS M. CAMUS, G.R. No. 176748, September 1, 2010) Family Home
While the Court adheres to the principle of liberality in favor of If the family home was constructed before the effectivity of
the seafarer in construing the Standard Employment Contract, the Family Code or before August 3, 1988, then it must have
we cannot allow claims for compensation based on surmises. been constituted either judicially or extra-judicially as
When the evidence presented negates compensability, we provided under Articles 225, 229-231 and 233 of the Civil
have no choice but to deny the claim, lest we cause injustice Code. Judicial constitution of the family home requires the
to the employer. (SOUTHEASTERN SHIPPING,SOUTHEASTERN filing of a verified petition before the courts and the
SHIPPING GROUP, LTD., G.R. No. 167678, June 22, 2010 registration of the courts order with the Registry of Deeds of
As a final note, the Court is wont to reiterate that while an the area where the property is located. Meanwhile,
employer has its own interest to protect, and pursuant extrajudicial constitution is governed by Articles 240 to242 of
thereto, it may terminate a managerial employee for a just the Civil Code and involves the execution of a public
cause, such prerogative to dismiss or lay off an employee instrument which must also be registered with the Registry of
must be exercised without abuse of discretion. Its Property. Failure to comply with either one of these two modes
implementation should be tempered with compassion and of constitution will bar a judgment debtor from availing of the
understanding. The employer should bear in mind that, in the privilege.
execution of the said prerogative, what is at stake is not only On the other hand, for family homes constructed after the
the employees position, but his very livelihood, his very effectivity of the Family Code on August 3, 1988, there is no
breadbasket. Indeed, the consistent rule is that if doubts exist need to constitute extrajudicially or judicially, and the
between the evidence presented by the employer and the exemption is effective from the time it was constituted and
employee, the scales of justice must be tilted in favor of the lasts as lo=g as any of its beneficiaries under Art. 154 actually
latter. The employer must affirmatively show rationally resides therein. Moreover, the family home should belong to
adequate evidence that the dismissal was for justifiable the absolute community or conjugal partnership or if
cause. Thus, when the breach of trust or loss of confidence exclusively by one spouse, its constitution must have been
alleged is not borne by clearly established facts, as in this with consent of the other, and its value must not prior to
case, such dismissal on the cited grounds cannot be allowed. August 3, 1988, or as early as 1944, they must comply with
(Lima land, inc. v. MARLYN CUEVAS, G.R. No. 169523, June 16, the procedure mandated by the Civil Code. Pandacan property
2010) was judicially or extrajudicially constituted as the Ramos
While we can grant that the standards were duly family home, the laws protective mantle cannot be availed of
communicated to the petitioners and could be applied by petitioners. Parenthetically, the records show that the
beginning the 1st trimester of the school year 2000-2001, sheriff exhausted all means to execute the judgment but
glaring and very basic gaps in the schools evidence still exist. failed because Ramos bank accounts were already closed
The exact terms of the standards were never introduced as while other properties in him or the companys name had
evidence; neither does the evidence show how these already been transferred, and the only property left was the
standards were applied to the petitioners. Without these Pandacan property. (JUANITA TRINIDAD RAMOS,et al. v.
pieces of evidence (effectively, the finding of just cause for DANILO PANGILINAN et. al.,G.R. No. 185920, July 20, 20100)
the non-renewal of the petitioners contracts), we have Finality of Factual Findings
nothing to consider and pass upon as valid or invalid for each Accordingly, for want of substantial basis, in fact or in law,
of the petitioners. Inevitably, the non-renewal (or effectively, factual findings of an administrative agency, such as the
the termination of employment of employees on probationary NLRC, cannot be given the stamp of finality and
status) lacks the supporting finding of just cause that the law conclusiveness normally accorded to it, as even decisions of
requires and, hence, is illegal. (YOLANDA M. MERCADO et al. v. administrative agencies which are declared final by law are
AMA COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010) not exempt from judicial review when so warranted. Contrary
Bad Faith to petitioners assertion, therefore, this Court sees no error on
This finding lacks basis. Based on the records, respondent the part of the CA when it made a new determination of the
failed to allege either in his complaint or position paper that case and, upon this, reversed the ruling of the NLRC.
petitioner, as Vice-President of VIPS Coffee Shop and (CENTURY CANNING CORPORATION, RICARDO T. PO, JR. and
 7

AMANCIO C. RONQUILLO v. VICENTE RANDY R. RAMIL, G.R. No. is not a just cause to terminate ones employment under
171630, August 8, 2010) Article 282 of the Labor Code. To allow an employer to dismiss
Finally, it bears to point out that the Decision of the Labor an employee based on mere allegations and generalities
Arbiter was affirmed by the NLRC and the CA. The settled rule would place the employee at the mercy of his employer, and
is that the factual findings of the Labor Arbiter and the NLRC, would emasculate the right to security of tenure. For his
especially when affirmed by the CA, are accorded not only failure to comply with the Labor Codes substantive
great respect but also finality, and are deemed binding upon requirement on termination of employment, we declare that
this Court so long as they are supported by substantial Teng illegally dismissed the respondent workers. (ALBERT
evidence. In the present case, the Court finds no cogent TENG, doing business under the firm name ALBERT TENG FISH
reason to depart from this rule. (ELPIDIO CALIPAY v. NATIONAL TRADING, and EMILIA TENG-CHUA v. ALFREDO S. PAHAGAC,
LABOR RELATIONS COMMISSION, TRIANGLE ACE G.R. No. 169704, November 17, 2010)
CORPORATION and JOSE LEE, G.R. No. 166411, August 3, It is likewise evident that, even in the petition before this
2010) Court, Bonifacio Bryan Cu signed the Verification and
Finality of Judgment Certification of Non-Forum Shopping and Antonio Cu signed
It is no longer legally feasible to modify the final ruling in this the Secretarys Certificate. The fact remains that the Cu
case through the expediency of a petition questioning the family continues to operate petitioners business. Despite the
order of execution. This late in the day, petitioner Victor alleged recent sale to SCBC, represented by Willy Deterala,
Morales is barred, by the fact of a final judgment, from petitioner failed to refute the allegations of respondents that
advancing the argument that his real property cannot be the Cu family still continues to own and operate petitioner, or
made liable for the monetary award in favor of respondent. even to show that Willy Deterala is actually in charge of
For a reason greater than protection from personal liability, petitioners business. Petitioner did not confront this issue
petitioner Victor Morales, as president of his corporation, head-on, and its failure to do so is fatal to its cause. Petitioner
cannot rely on our previous ruling that to hold a director having failed to discharge its burden of submitting sufficient
personally liable for debts of a corporation and thus pierce the and convincing evidence required by law, we hold that
veil of corporate fiction, the bad faith or wrongdoing of the respondents were illegally dismissed. (PEAFRANCIA TOURS
director must be established clearly and convincingly. AND TRAVEL TRANSPORT, INC., v. JOSELITO P. SARMIENTO and
Judgments of courts should attain finality at some point lest RICARDO S. CATIMBANG, G.R. No. 178397, October 20, 2010)
there be no end in litigation. The final judgment in this case Petitioners lack of just cause and non-compliance with the
may no longer be reviewed, or in any way modified directly or procedural requisites in terminating respondents employment
indirectly, by a higher court, not even by the Supreme Court. renders them guilty of illegal dismissal. Consequently,
The reason for this is that, a litigation must end and terminate respondent is entitled to reinstatement to his former position
sometime and somewhere, and it is essential to an effective without loss of seniority rights and payment of backwages.
and efficient administration of justice that, once a judgment However, if such reinstatement proves impracticable, and
has become final, the winning party be not deprived of the hardly in the best interest of the parties, perhaps due to the
fruits of the verdict. Courts must guard against any scheme lapse of time since his dismissal, or if he decides not to be
calculated to bring about that result and must frown upon any reinstated, respondent should be awarded separation pay in
attempt to prolong controversies. (MARMOSY TRADING, INC. lieu of reinstatement. (ST. LUKES MEDICAL CENTER, INC v.
and VICTOR MORALES v. COURT OF APPEALS, NATIONAL ESTRELITO NOTARIO, G.R. No. 152166, October 20, 2010)
LABOR RELATIONS COMMISSION, G.R. No. 170515, May 6, Hence, consistent with the Courts ruling in Jaculbe, having
2010) terminated petitioner merely on the basis of a provision in the
Exception retirement plan which was not freely assented to by her,
The company insists that the Court should reinstate the UNIPROM is guilty of illegal dismissal. Petitioner is thus
original CA decision, given the findings of the Labor Arbiter entitled to reinstatement without loss of seniority rights and
and the NLRC that it had not dismissed Siazar. Ordinarily, the to full backwages computed from the time of her illegal
Court will not, on petition for review on certiorari, reexamine dismissal in February 16, 2001 until the actual date of her
the facts of the case. Here, however, since the CA overturned reinstatement. If reinstatement is no longer possible because
its earlier ruling and its factual findings now differ from those the position that petitioner held no longer exists, UNIPROM
of the Labor Arbiter and the NLRC, the Court is making an shall pay backwages as computed above, plus, in lieu of
exception. (AGRICULTURAL AND INDUSTRIAL SUPPLIES reinstatement, separation pay equivalent to one-month pay
CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No. 177970, for every year of service. This is consistent with the
August 25, 2010) preponderance of jurisprudence relative to the award of
Forum Shopping separation pay in case reinstatement is no longer feasible.
All these go to show that ABS-CBN acted with patent bad LOURDES A. CERCADO v. UNIPROM, INC.,G.R. No. 188154,
faith. A close parallel we can draw to characterize this bad October 13, 2010)
faith is the prohibition against forum-shopping under the Rules To reiterate, this Court will not hesitate to defend respondents
of Court. In forum-shopping, the Rules characterize as bad right to security of tenure. The premature dismissal from the
faith the act of filing similar and repetitive actions for the service of respondents Palacio, Calibod, Laquio, Santander
same cause with the intent of somehow finding a favorable and Montederamos is unwarranted. However, we take
ruling in one of the actions filed. ABS-CBNs actions in the two exception to the case of respondent Saile who, as alleged by
cases, as described above, are of the same character, since petitioner, was not qualified to take the LET as she only had
its obvious intent was to defeat and render useless, in a three out of the minimum 10 required educational units to be
roundabout way and other than through the appeal it had admitted to take the LET pursuant to Section 15 of RA 7836,
taken, the labor arbiters decision in the regularization case. which fact respondent Saile did not refute. Not being qualified
Forum-shopping is penalized by the dismissal of the actions to take the examination to become a duly licensed
involved. The penalty against ABS-CBN for its bad faith in the professional teacher, petitioner cannot be compelled to retain
present case should be no less. (FARLEY FULACHE et. al., v. her services as she cannot possibly obtain the needed
ABS-CBN BROADCASTING CORPORATION, G.R. No. 183810, prerequisite to allow her to continue practicing the teaching
January 21, 2010) profession. Thus, we find her termination just and legal. (St.
Grave Abuse of Discretion Marys Academy of Dipolog City v. Teresita Palacio et. al.,
Despite all these clear pieces of evidence of illegal September 8, 2010,G.R. No. 164913)
obstruction, the NLRC looked the other way and chose not to Here, the company did not adduce any evidence to prove that
see the unmistakable violations of the law on strikes by the Siazars dismissal had been for a just or authorized cause as
union and its respondent officers and members. Needless to in fact it had been its consistent stand that it did not
say, while the law protects the rights of the laborer, it terminate him and that he quit on his own. But given that the
authorizes neither the oppression nor the destruction of the company dismissed Siazar and that such dismissal had
employer. For grossly ignoring the evidence before it, the remained unexplained, there can be no other conclusion but
NLRC committed grave abuse of discretion; for supporting that his dismissal was illegal. (AGRICULTURAL AND
these gross NLRC errors, the CA committed its own reversible INDUSTRIAL SUPPLIES CORPORATION,et. al., v. JUEBER P.
error. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES SIAZAR G.R. No. 177970, August 25, 2010)
LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, Verily, there was a dearth of evidence directly linking
2010) respondent Mongcal to the commission of the crime of theft,
Illegal Dismissal as his mere act of loading the dump truck with aggregates did
The respondent workers allegation that Teng summarily not show that he knew of Rasotes plan to deliver the load to a
dismissed them on suspicion that they were not reporting to place other than petitioners construction site. The only
him the correct volume of the fish caught in each fishing conclusion, therefore, is that petitioner illegally dismissed
voyage was never denied by Teng. Unsubstantiated suspicion
 8

respondent Mongcal. (SARGASSO CONSTRUCTION and Ultimately, the final decision on whether to resign or face
DEVELOPMENT CORPORATION v. NATIONAL LABOR disciplinary action rests on petitioner alone. (MA. SOCORRO
The absurdity of petitioners defense highlights the fact that MANDAPAT v. ADD FORCE PERSONNEL SERVICES, INC. and
respondents claim, that she was dismissed without any notice COURT OF APPEALS, G.R. No. 180285, July 6, 2010)
and hearing, rings with truth. This Court views with approval Involuntary Servitude
the observation of the CA and the NLRC, to wit: Employment is a personal consensual contract and absorption
x x x the petitioners cannot justify their defense of by BPI of a former FEBTC employee without the consent of the
abandonment as they failed to prove that indeed private employee is in violation of an individuals freedom to contract.
respondent had abandoned her work. It did not even bother to It would have been a different matter if there was an express
send a letter to her last known address requiring her to report provision in the articles of merger that as a condition for the
for work and explain her alleged continued absences. The merger, BPI was being required to assume all the employment
ratiocination of public respondent [NLRC] on this score merits contracts of all existing FEBTC employees with the conformity
our imprimatur, viz: of the employees. In the absence of such a provision in the
The law clearly spells out the manner with which an articles of merger, then BPI clearly had the business
unjustified refusal to return to work by an employee may be management decision as to whether or not employ FEBTCs
established. Thusly, respondent should have given employees. FEBTC employees likewise retained the
complainant a notice with warning concerning her alleged prerogative to allow themselves to be absorbed or not;
absences (Section 2, Rule XIV, Book V, Implementing Rules otherwise, that would be tantamount to involuntary servitude.
and Regulations of the Labor Code). The notice requirement (BANK OF THE PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-
actually consists of two parts to be separately served on the DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK,
employee to wit: (1) notice to apprise the employee of his G.R. No. 164301, August 10, 2010)
absences with a warning concerning a possible severance of Jurisdiction
employment in the event of an unjustified excuse therefor, Respecting Ikdals joint and solidary liability as a corporate
and (2) subsequent notice of the decision to dismiss in the officer, the same is in order too following the express
event of an employees refusal to pay heed to such warning. provision of R.A. 8042 on money claims, viz:
Only after compliance had been effected with those SEC. 10. Money Claims.Notwithstanding any provision of law
requirements can it be reasonably concluded that the to the contrary, the Labor Arbiters of the National Labor
employee had actually abandoned his job. In respondents Relations Commission (NLRC) shall have the original and
case, it is noted that more than two (2) months had already exclusive jurisdiction to hear and decide, within ninety (90)
lapsed since complainant allegedly started to absent herself calendar days after the filing of the complaint, the claims
when the latter instituted her action for illegal dismissal. arising out of an employer-employee relationship or by virtue
During the said period of time, no action was taken by the of any law or contract involving Filipino workers for overseas
respondents regarding complainants alleged absences, deployment including claims for actual moral, exemplary and
something which is quite peculiar had complainants other forms of damages.
employment not been severed at all. Accordingly, we do not The liability of the principal/employer and the
find respondents defense of abandonment to be impressed recruitment/placement agency for any and all claims under
with merit in view of an utter lack of evidence to support the this section shall be joint and several. This provision shall be
same. Hence, complainants charge of illegal dismissal stands incorporated in the contract for overseas employment and
uncontroverted x x x . shall be a condition precedent for its approval. The
(DIVERSIFIED SECURITY, INC v. ALICIA V. BAUTISTA, G.R. No. performance bond to be filed by the recruitment/placement
152234, April 15, 2010) agency, as provided by law, shall be answerable for all money
While Promm-Gem had complied with the procedural aspect claims or damages that may be awarded to the workers. If the
of due process in terminating the employment of petitioners- recruitment/placement agency is a juridical being, the
employees, i.e., giving two notices and in between such corporate officers and directors and partners as the case may
notices, an opportunity for the employees to answer and rebut be, shall themselves be jointly and solidarily liable with the
the charges against them, it failed to comply with the corporation or partnership for the aforesaid claims and
substantive aspect of due process as the acts complained of damages. (emphasis and underscoring supplied)
neither constitute serious misconduct nor breach of trust. (ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and
Hence, the dismissal is illegal. (JOEB M. ALIVIADO, et al. v. MINISTRY OF PUBLIC HEALTH-KUWAIT v. MA. JOSEFA ECHIN,
PROCTER & GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. G.R. No. 178551, October 11, 2010)
No. 160506, March 9, 2010) Prudential Bank and Trust Company v. Reyes, a case involving
The injustice committed on the petitioners/drivers requires a lady bank manager who had risen from the ranks but was
rectification. Their dismissal was not only unjust and in bad dismissed, the Court held that her complaint for illegal
faith as the above discussions abundantly show. The bad faith dismissal was correctly brought to the NLRC, because she was
in ABS-CBNs move toward its illegitimate goal was not even deemed a regular employee of the bank. The Court observed
hidden; it dismissed the petitioners already recognized as thus:
regular employees for refusing to sign up with its service It appears that private respondent was appointed Accounting
contractor. Thus, from every perspective, the petitioners were Clerk by the Bank on July 14, 1963. From that position she
illegally dismissed. (FARLEY FULACHE et. al., v. ABS-CBN rose to become supervisor. Then in 1982, she was appointed
BROADCASTING CORPORATION, G.R. No. 183810, January 21, Assistant Vice-President which she occupied until her illegal
2010) dismissal on July 19, 1991. The banks contention that she
Drug Test merely holds an elective position and that in effect she is not
The law is clear that drug tests shall be performed only by a regular employee is belied by the nature of her work and
authorized drug testing centers. In this case, Sulpicio Lines her length of service with the Bank. As earlier stated, she rose
failed to prove that S.M. Lazo Clinic is an accredited drug from the ranks and has been employed with the Bank since
testing center. Sulpicio Lines did not even deny Nacagues 1963 until the termination of her employment in 1991. As
allegation that S.M. Lazo Clinic was not accredited. Also, only Assistant Vice President of the Foreign Department of the
a screening test was conducted to determine if Nacague was Bank, she is tasked, among others, to collect checks drawn
guilty of using illegal drugs. Sulpicio Lines did not confirm the against overseas banks payable in foreign currency and to
positive result of the screening test with a confirmatory test. ensure the collection of foreign bills or checks purchased,
Sulpicio Lines failed to indubitably prove that Nacague was including the signing of transmittal letters covering the same.
guilty of using illegal drugs amounting to serious misconduct It has been stated that the primary standard of determining
and loss of trust and confidence. Sulpicio Lines failed to regular employment is the reasonable connection between
clearly show that it had a valid and legal cause for terminating the particular activity performed by the employee in relation
Nacagues employment. When the alleged valid cause for the to the usual trade or business of the employer. Additionally,
termination of employment is not clearly proven, as in this an employee is regular because of the nature of work and
case, the law considers the matter a case of illegal dismissal. the length of service, not because of the mode or even the
(JEFFREY NACAGUE v. SULPICIO LINES, INC., G.R. No. 172589, reason for hiring them. As Assistant Vice-President of the
August 8, 2010) Foreign Department of the Bank she performs tasks integral to
Intimidation the operations of the bank and her length of service with the
None of these requisites was proven by petitioner. No demand bank totaling 28 years speaks volumes of her status as a
was made on petitioner to resign. At most, she was merely regular employee of the bank. In fine, as a regular employee,
given the option to either resign or face disciplinary she is entitled to security of tenure; that is, her services may
investigation, which respondent had every right to conduct in be terminated only for a just or authorized cause. This being
light of the numerous infractions committed by petitioner. in truth a case of illegal dismissal, it is no wonder then that
There is nothing irregular in providing an option to petitioner. the Bank endeavored to the very end to establish loss of trust
 9

and confidence and serious misconduct on the part of private Petitioners withheld respondents salary in the sincere belief
respondent but, as will be discussed later, to no avail. (ATLING that respondent did not work for the period in question and
INDUSTRIAL AND COMMERCIAL CORPORATION,RICHARD K. was, therefore, not entitled to it. There was no dishonest
SPENCER,CATHERINE SPENCER, AND ALEX MANCILLA v. purpose or ill will involved as they believed there was a
RICARDO R. COROS, G.R. No. 157802, October 13, 2010) justifiable reason to withhold his salary. Thus, although they
One. The NLRC acquires jurisdiction over parties in cases unlawfully withheld respondents salary, it cannot be
before it either by summons served on them or by their concluded that such was made in bad faith. Accordingly,
voluntary appearance before its Labor Arbiter. Here, while the corporate officers, Hartmannshenn and Schumacher, cannot
Union insists that summons were not properly served on the be held personally liable for the corporate obligations of SHS.
impleaded Union members with respect to the Companys (SHS PERFORATED MATERIALS, INC., WINFRIED
amended petition that sought to declare the strike illegal, the HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v.
records show that they were so served. The Return of Service MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010)
of Summons indicated that 74 out of the 81 impleaded Union As to respondent Camus liability as LMCEC president, it is
members were served with summons. But they refused either settled that in the absence of malice, bad faith, or specific
to accept the summons or to acknowledge receipt of the provision of law, a director or officer of a corporation cannot
same. Such refusal cannot of course frustrate the NLRCs be made personally liable for corporate liabilities.
acquisition of jurisdiction over them. Besides, the affected As held in Lowe, Inc. v. Court of Appeals, citing McLeod v.
Union members voluntarily entered their appearance in the NLRC:
case when they sought affirmative relief in the course of the Personal liability of corporate directors, trustees or officers
proceedings like an award of damages in their favor. (C. attaches only when (1) they assent to a patently unlawful act
ALCANTARA & SONS, INC. v. COURT OF APPEALS, et al.,G.R. of the corporation, or when they are guilty of bad faith or
No. 155109, G.R. No. 155135, G.R. No. 179220, September gross negligence in directing its affairs, or when there is a
29, 2010) conflict of interest resulting in damages to the corporation, its
Job contracting/Labor-Only Contracting stockholders or other persons; (2) they consent to the
In the present case, the maestros did not have any substantial issuance of watered down stocks or when, having knowledge
capital or investment. Teng admitted that he solely provided of such issuance, do not forthwith file with the corporate
the capital and equipment, while the maestros supplied the secretary their written objection; (3) they agree to hold
workers. The power of control over the respondent workers themselves personally and solidarily liable with the
was lodged not with the maestros but with Teng. As checkers, corporation; or (4) they are made by specific provision of law
the respondent workers main tasks were to count and classify personally answerable for their corporate action.
the fish caught and report them to Teng. They performed (JUDY O. DACUITAL , et. al. v. L.M. CAMUS ENGINEERING
tasks that were necessary and desirable in Tengs fishing CORPORATION and/or LUIS M. CAMUS, G.R. No. 176748,
business. Taken together, these incidents confirm the September 1, 2010)
existence of a labor-only contracting which is prohibited in our In the subject decision, the CA concluded that petitioner Xu
jurisdiction, as it is considered to be the employers attempt and Wensha are jointly and severally liable to Loreta. We have
to evade obligations afforded by law to employees. (ALBERT read the decision in its entirety but simply failed to come
TENG, doing business under the firm name ALBERT TENG FISH across any finding of bad faith or malice on the part of Xu.
TRADING, and EMILIA TENG-CHUA v. ALFREDO S. PAHAGAC, There is, therefore, no justification for such a ruling. To sustain
G.R. No. 169704, November 17, 2010) such a finding, there should be an evidence on record that an
In order that a labor relationship can be categorized as officer or director acted maliciously or in bad faith in
legitimate/permissible job contracting or as prohibited labor- terminating the services of an employee. Moreover, the
only contracting, the totality of the facts and the surrounding finding or indication that the dismissal was effected with
circumstances of the relationship ought to be considered. malice or bad faith should be stated in the decision itself.
Every case is unique and has to be assessed on the basis of (WENSHA SPA CENTER, INC. v. LORETA T. YUNG, G.R. No.
its facts and of the features of the relationship in question. In 185122, August 16, 2010)
permissible job contracting, the principal agrees to put out or Liability of GSIS as Indirect Employer
farm out with a contractor or subcontractor the performance Lastly, we do not agree with petitioner that the enforcement
or completion of a specific job, work or service within a of the decision is impossible because its charter unequivocally
definite or predetermined period, regardless of whether such exempts it from execution. As held in Government Service
job, work or service is to be performed or completed within or Insurance System v. Regional Trial Court of Pasig City, Branch
outside the premises of the principal. The test is whether the 71, citing Rubia v. GSIS:
independent contractor has contracted to do the work The processual exemption of the GSIS funds and properties
according to his own methods and without being subject to under Section 39 of the GSIS Charter, in our view, should be
the principals control except only as to the results, he has read consistently with its avowed principal purpose: to
substantial capital, and he has assured the contractual maintain actuarial solvency of the GSIS in the protection of
employees entitlement to all labor and occupational safety assets which are to be used to finance the retirement,
and health standards, free exercise of the right to self- disability and life insurance benefits of its members. Clearly,
organization, security of tenure, and social and welfare the exemption should be limited to the purposes and objects
benefits. (SPIC N SPAN SERVICES CORPORATION v. GLORIA covered. Any interpretation that would give it an expansive
PAJE et. al, G.R. No. 174084, August 25, 2010) construction to exempt all GSIS assets from legal processes
Furthermore, the petitioners have been charged with the absolutely would be unwarranted.
merchandising and promotion of the products of P&G, an Furthermore, the declared policy of the State in Section 39 of
activity that has already been considered by the Court as the GSIS Charter granting GSIS an exemption from tax, lien,
doubtlessly directly related to the manufacturing business, attachment, levy, execution, and other legal processes should
which is the principal business of P&G. Considering that SAPS be read together with the grant of power to the GSIS to invest
has no substantial capital or investment and the workers it its excess funds under Section 36 of the same Act. Under
recruited are performing activities which are directly related Section 36, the GSIS is granted the ancillary power to invest in
to the principal business of P&G, we find that the former is business and other ventures for the benefit of the employees,
engaged in labor-only contracting. (JOEB M. ALIVIADO, et al. by using its excess funds for investment purposes. In the
v. PROCTER &GAMBLE PHILS., INC.,and PROMM-GEM INC., G.R. exercise of such function and power, the GSIS is allowed to
No. 160506, March 9, 2010) assume a character similar to a private corporation. Thus, it
Test to Determine Independent Contractorship may sue and be sued, as also, explicitly granted by its charter
Petitioner cannot rely either on AMPCOs Certificate of x x x.
Registration as an Independent Contractor issued by the To be sure, petitioners charter should not be used to evade its
proper Regional Office of the DOLE to prove its claim. It is not liabilities to its employees, even to its indirect employees, as
conclusive evidence of such status. The fact of registration mandated by the Labor Code. (GOVERNMENT SERVICE
simply prevents the legal presumption of being a mere labor- INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS
only contractor from arising. In distinguishing between COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17,
permissible job contracting and prohibited labor-only 2010 )
contracting, the totality of the facts and the surrounding Liability of Indirect Employer
circumstances of the case are to be considered.=(SAN MIGUEL Petitioners liability covers the payment of respondents salary
CORPORATION v. VICENTE B. SEMILLANO, ET. al., G.R. No. differential and 13th month pay during the time they worked
164257, July 5, 2010) for petitioner. In addition, petitioner is solidarily liable with
Liability DNL Security for respondents unpaid wages from February
Liability of Corporate Officers 1993 until April 20, 1993. While it is true that respondents
continued working for petitioner after the expiration of their
 10

contract, based on the instruction of DNL Security, petitioner and assessment of the issues and their just resolution. It must
did not object to such assignment and allowed respondents to be emphasized that procedural rules should not be belittled or
render service. Thus, petitioner impliedly approved the dismissed simply because their non-observance might have
extension of respondents services. Accordingly, petitioner is resulted in prejudice to a partys substantial rights. Like all
bound by the provisions of the Labor Code on indirect rules, they are required to be followed, except only for the
employment. Petitioner cannot be allowed to deny its most persuasive of reasons. (MANDAUE GALLEON TRADE, INC.
obligation to respondents after it had benefited from their and GAMALLOSONS TRADERS, INC., represented by FAUSTO B.
services. So long as the work, task, job, or project has been GAMALLO v. BIENVENIDO ISIDTO et.al., G.R. No. 181051,July 5,
performed for petitioners benefit or on its behalf, the liability 2010)
accrues for such services. The principal is made liable to its Management Prerogative
indirect employees because, after all, it can protect itself from While management has the prerogative to discipline its
irresponsible contractors by withholding payment of such employees and to impose appropriate penalties on erring
sums that are due the employees and by paying the workers, pursuant to company rules and regulations, however,
employees directly, or by requiring a bond from the contractor such management prerogatives must be exercised in good
or subcontractor for this purpose. (GOVERNMENT SERVICE faith for the advancement of the employers interest and not
INSURANCE SYSTEM v. NATIONAL LABOR RELATIONS for the purpose of defeating or circumventing the rights of the
COMMISSION (NLRC), ET. Al., G.R. No. 180045, November 17, employees under special laws and valid agreements. The
2010 ) Court is wont to reiterate that while an employer has its own
Solidary Liability interest to protect, and pursuant thereto, it may terminate an
Thus, petitioner SMC, as principal employer, is solidarily liable employee for a just cause, such prerogative to dismiss or lay
with AMPCO, the labor-only contractor, for all the rightful off an employee must be exercised without abuse of
claims of respondent. Under this set-up, AMPCO, as the labor- discretion. Its implementation should be tempered with
only contractor, is deemed an agent of the principal (SMC). compassion and understanding. The employer should bear in
The law makes the principal responsible over the employees mind that, in the execution of said prerogative, what is at
of the labor-only contractor as if the principal itself directly stake is not only the employees position, but his very
hired=the employees. (SAN MIGUEL CORPORATION v. VICENTE livelihood, his very breadbasket. (PHILIPPINE LONG DISTANCE
B. SEMILLANO, ET. Al., G.R. No. 164257, July 5, 2010) TELEPHONE COMPANY v. JOEY B. TEVES, G.R. No. 143511,
We modify, however, our ruling on the extent of liability of November 15, 2010)
Outdoor Clothing and its co-respondents. A corporation, as a The foregoing illustrates why it is dangerous for this Court and
juridical entity, may act only through its directors, officers and even the CA to look into the wisdom of a management
employees. Obligations incurred as a result of the directors prerogative. Certainly, one can argue for or against the pros
and officers acts as corporate agents, are not their personal and cons of transferring respondent to another territory.
liability but the direct responsibility of the corporation they Absent a definite finding that such exercise of prerogative was
represent. As a rule, they are only solidarily liable with the tainted with arbitrariness and unreasonableness, the CA
corporation for the illegal termination of services of should have left the same to petitioners better judgment. The
employees if they acted with malice or bad faith. In the rule is well settled that labor laws discourage interference
present case, malice or bad faith on the part of the Syfu, with an employers judgment in the conduct of his business.
Demogena, and Lee, as corporate officers of Outdoor Clothing, Even as the law is solicitous of the welfare of employees, it
was not sufficiently proven to justify a ruling holding them must also protect the right of an employer to exercise what
solidarily liable with Outdoor Clothing. (MANOLO A. PEAFLOR are clearly management prerogatives. As long as the
V. OUTDOOR CLOTHING MANUFACTURING CORPORATION, G.R. companys exercise of the same is in good faith to advance its
No. 177114, April 13, 2010) interest and not for the purpose of defeating or circumventing
Liberal Application of the Rules the rights of employees under the laws or valid agreements,
The appellate courts brushing aside of the Paliwanag and such exercise will be upheld. (PHARMACIA and UPJOHN, INC.
the minutes of the meeting that resulted in the conclusion of (now PFIZER PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR.,
the MOA because they were not verified and notarized, thus G.R. No. 172724 August 23, 2010)
violating, so the appellate court reasoned, the rules on parol In the absence of arbitrariness, the CA should not have looked
evidence, does not lie. Like any other rule on evidence, parol into the wisdom of a management prerogative. It is the
evidence should not be strictly applied in labor cases. employers prerogative, based on its assessment and
The reliance on the parol evidence rule is misplaced. In labor perception of its employees qualifications, aptitudes, and
cases pending before the Commission or the Labor Arbiter, competence, to move them around in the various areas of its
the rules of evidence prevailing in courts of law or equity are business operations in order to ascertain where they will
not controlling. Rules of procedure and evidence are not function with maximum benefit to the company. (PHARMACIA
applied in a very rigid and technical sense in labor cases. and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) v. RICARDO
Hence, the Labor Arbiter is not precluded from accepting and P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)
evaluating evidence other than, and even contrary to, what is We held that work reassignment of an employee as a genuine
stated in the CBA. (emphasis supplied) business necessity is a valid management prerogative. After
(IRTEK EMPLOYEES LABOR UNION-FEDERATION OF FREE being given an option to be transferred, petitioner rejected
WORKERS v. CIRTEK ELECTRONICS, INC, G.R. No. 190515, the offer for reassignment to Paper Mill No. 5 even though
November 15, 2010) such transfer would not involve any diminution of rank and
While the Court adheres to the principle of liberality in favor pay. Instead, he opted and preferred to be separated by
of the seafarer in construing the Standard Employment executing a release and quitclaim in consideration of which he
Contract, we cannot allow claims for compensation based on received separation pay in the amount of P356,335.20 equal
surmises. When the evidence presented negates to two months pay for every year of service plus other
compensability, this Court has no choice but to deny the accrued benefits. Clearly, petitioner freely and voluntarily
claim, lest we cause injustice to the employer. (MEDLINE consented to the execution of the release and quitclaim.
MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY v. Having done so apart from the fact that the consideration for
GLICERIA ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, the quitclaim is credible and reasonable, the waiver
September 15, 2010) represents a valid and binding undertaking. As aptly
It is well-settled that the application of technical rules of concluded by the CA, the quitclaim was not executed under
procedure may be relaxed to serve the demands of force or duress and that petitioner was given a separation pay
substantial justice, particularly in labor cases. Labor cases more than what the law requires from respondent. (DANNIE M.
must be decided according to justice and equity and the PANTOJA v. SCA HYGIENE PRODUCTSCORPORATION, G.R. No.
substantial merits of the controversy. Procedural niceties 163554, April 23, 2010)
should be avoided in labor cases in which the provisions of the Approval of applications for the ERP is within Korean Airs
Rules of Court are applied only in suppletory manner. Indeed, management prerogatives. The exercise of management
rules of procedure may be relaxed to relieve a part of an prerogative is valid as long as it is not done in a malicious,
injustice not commensurate with the degree of non- harsh, oppressive, vindictive, or wanton manner. In the
compliance with the process required.(ARNOLD F. ANIB v. present case, the Court sees no bad faith on Korean Airs part.
COCA-COLA BOTTLERS PHILS., INC. and/or RHOGIE The 21 August 2001 memorandum clearly states that Korean
FELICIANO,G.R. No. 190216, August 16, 2010) Air, on its discretion, was offering ERP to its employees. The
Finally, it bears stressing that while it is true that litigation is memorandum also states that the reason for the ERP was to
not a game of technicalities and that rules of procedure shall prevent further losses. Korean Air did not abuse its discretion
not be strictly enforced at the cost of substantial justice, it when it excluded Yuson in the ERP. To allow Yuson to avail of
does not mean that the Rules of Court may be ignored at will the ERP would have been contrary to the purpose of the ERP.
and at random to the prejudice of the orderly presentation
 11

(KOREAN AIR CO., LTD v. ADELINA A.S. YUSON, G.R. No. It cannot be determined from the records who hired Naronio;
170369, June 16, 2010) but it is also undisputed that petitioners are not his
We will emphasize anew that the power to dismiss is a normal employers. Indeed, Naronio serviced all the businesses
prerogative of the employer. This, however, is not without operating within the compound where the arbiters ruling was
limitations. The employer is bound to exercise caution in mailed. Thus, it is not even necessary to determine whether
terminating the services of his employees especially so when Naronios duties are not so integrated to the business that
it is made upon the request of a labor union pursuant to the [his] absence or presence will not toll the entire operation of
Collective Bargaining Agreement. Dismissals must not be petitioners business. This test presupposes that the recipient
arbitrary and capricious. Due process must be observed in of the legal document is employed by the addressee. For
dismissing an employee, because it affects not only his remedial law purposes, Naronios receipt of any processes
position but also his means of livelihood. Employers should, intended for petitioners was receipt by a stranger, without
therefore, respect and protect the rights of their employees, legal significance to petitioners. (PASIG CYLINDER MFG.,
which include the right to labor. (PICOP RESOURCES, CORP.,et. al v. DANILO ROLLO, et. al., G.R. No. 173631
INCORPORATED (PRI), v. ANACLETO L. TAECA, G.R. No. September 8, 2010)
160828, August 9, 2010) Reduction of Bond
Besides, as the employer, respondent has the right to Nor was petitioners filing of a reduced appeal bond fatal to
regulate, according to its discretion and best judgment, all their appeal. True, Article 223 of the Labor Code requires the
aspects of employment, including work assignment, working filing of appeal bond in the amount equivalent to the
methods, processes to be followed, working regulations, monetary award in the judgment appealed from. However,
transfer of employees, work supervision, lay-off of workers both the Labor Code and this Courts jurisprudence abhor rigid
and the discipline, dismissal and recall of workers. application of procedural rules at the expense of delivering
Management has the prerogative to discipline its employees just settlement of labor cases. Petitioners reasons for their
and to impose appropriate penalties on erring workers filing of the reduced appeal bond the downscaling of their
pursuant to company rules and regulations. (JOSE P. ARTIFICIO operations coupled with the amount of the monetary award
v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. appealed are not unreasonable. Thus, the recourse
172988 , July 26, 2010) petitioners adopted constitutes substantial compliance with
Here, there was no diminution of petitioners salary and other Article 223 consistent with our ruling in Rosewood Processing,
benefits. There was no evidence that she was harassed or Inc. v. NLRC, where we allowed the appellant to file a reduced
discriminated upon, or that respondents made it difficult for bond of P50,000 (accompanied by the corresponding motion)
her to continue with her other duties. Absent any evidence of in its appeal of an arbiters ruling in an illegal termination
bad faith, it is within the exercise of respondents case awarding P789,154.39 to the private respondents. (PASIG
management prerogative to transfer some of petitioners CYLINDER MFG., CORP.,et. al v. DANILO ROLLO, et. al., G.R. No.
duties if in their judgment, it would be more beneficial to the 173631 September 8, 2010)
corporation. There was no basis for the NLRCs finding that Piercing the Veil of Corporate Fiction
from performing managerial functions, petitioner was reduced Applying the doctrine to the case at bar, we find no reason to
to performing clerical tasks. (ESTRELLA VELASCO v. TRANSIT pierce the corporate veil of respondent and go beyond its
AUTOMOTIVE SUPPLY, INC., G.R. No. 171327, June 18, 2010) legal personality. Control, by itself, does not mean that the
Money Claims controlled corporation is a mere instrumentality or a business
Interest conduit of the mother company. Even control over the
Further, since the monetary awards remained unpaid even financial and operational concerns of a subsidiary company
after it became final on September 22, 2008 because of does not by itself call for disregarding its corporate fiction.
issues raised respecting the correct computation of such There must be a perpetuation of fraud behind the control or at
awards, it is but fair that respondent Javellana be required to least a fraudulent or illegal purpose behind the control in
pay 12% interest per annum on those awards from September order to justify piercing the veil of corporate fiction. Such
22, 2008 until they are paid. The 12% interest is proper fraudulent intent is lacking in this case. (NASECO GUARDS
because the Court treats monetary claims in labor cases the ASSOCIATION-PEMA (NAGA-PEMA) v. NATIONAL SERVICE
equivalent of a forbearance of credit. It matters not that the CORPORATION (NASECO), G.R. No. 165442, August 25, 2010)
amounts of the claims were still in question on September 22, Preventive Suspension
2008. What is decisive is that the issue of illegal dismissal In this case, Artificios preventive suspension was justified
from which the order to pay monetary awards to petitioner since he was employed as a security guard tasked precisely to
Belen stemmed had been long terminated. (DANIEL P. safeguard respondents client. His continued presence in
JAVELLANA , JR.,V. ALBINO BELEN, G.R. No. 181913, ALBINO respondents or its clients premises poses a serious threat to
BELEN V. DANIEL P. JAVELLANA, JR. and JAVELLANA FARMS, respondents, its employees and client in light of the serious
INC., G.R. No. 182158, March 5, 2010) allegation of conduct unbecoming a security guard such as
Prescription abandonment of post during night shift duty, light threats and
In Southeastern Shipping v. Navarra, Jr., we ruled that Article irregularities in the observance of proper relieving time. (JOSE
291 is the law governing the prescription of money claims of P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION,
seafarers, a class of overseas contract workers. This law G.R. No. 172988, July 26, 2010)
prevails over Section 28 of the Standard Employment Contract In this case, Artificios preventive suspension was justified
for Seafarers which provides for claims to be brought only since he was employed as a security guard tasked precisely to
within one year from the date of the seafarers return to the safeguard respondents client. His continued presence in
point of hire. We further declared that for the guidance of respondents or its clients premises poses a serious threat to
all, Section 28 of the Standard Employment Contract for respondents, its employees and client in light of the serious
Seafarers, insofar as it limits the prescriptive period within allegation of conduct unbecoming=g a security guard such as
which the seafarers may file their money claims, is hereby abandonment of post during night shift duty, light threats and
declared null and void. The applicable provision is Article 291 irregularities in the observance of proper relieving time. (JOSE
of the Labor Code, it being more favorable to the seafarers P. ARTIFICIO v. NATIONAL LABOR RELATIONS COMMISSION,
and more in accord with the States declared policy to afford G.R. No. 172988, July 26, 2010)
full protection to labor. The prescriptive period in the present Principle of Non-Diminution of Benefits
case is thus three years from the time the cause of action Article 100 of the Labor Code, otherwise known as the Non-
accrues. (MEDLINE MANAGEMENT, INC. and GRECOMAR Diminution Rule, mandates that benefits given to employees
SHIPPING AGENCY v. GLICERIA ROSLINDA and ARIEL cannot be taken back or reduced unilaterally by the employer
ROSLINDA, G.R. No. 168715, September 15, 2010) because the benefit has become part of the employment
Moral Damages contract, written or unwritten. The rule against diminution of
As for P&G, the records show that it dismissed its employees benefits applies if it is shown that the grant of the benefit is
through SAPS in a manner oppressive to labor. The sudden based on an express policy or has ripened into a practice over
and peremptory barring of the concerned petitioners from a long period of time and that the practice is consistent and
work, and from admission to the work place, after just a one- deliberate. Nevertheless, the rule will not apply if the practice
day verbal notice, and for no valid cause bellows oppression is due to error in the construction or application of a doubtful
and utter disregard of the right to due process of the or difficult question of law. But even in cases of error, it should
concerned petitioners. Hence, an award of moral damages is be shown that the correction is done soon after discovery of
called for. (JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE the error. The argument of petitioner that the grant of the
PHILS., INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, benefit was not voluntary and was due to error in the
2010) interpretation of what is included in the basic salary deserves
NLRC Rules of procedure scant consideration. No doubtful or difficult question of law is
Proof and Completeness of Service involved in this case. The guidelines set by the law are not
 12

difficult to decipher. The voluntariness of the grant of the Article 279 of the Labor Code and the established
benefit was manifested by the number of years the employer jurisprudence on this provision that is read into the decision.
had paid the benefit to its employees. Petitioner only changed By the nature of an illegal dismissal case, the reliefs continue
the formula in the computation of=the 13th-month pay after to add on until full satisfaction, as expressed under Article 279
almost 30 years and only after the dispute between the of the Labor Code. The re-computation of the consequences of
management and employees erupted. This act of petitioner in illegal dismissal upon execution of the decision does not
changing the formula at this time cannot be sanctioned, as it constitute an alteration or amendment of the final decision
indicates a badge of bad faith. (CENTRAL AZUCARERA DE being implemented. The illegal dismissal ruling stands; only
TARLAC DECISION v. CENTRAL AZUCARERA DE TARLAC LABOR the computation of monetary consequences of this dismissal
UNION-NLU, G.R. No. 188949,July 26, 2010) is affected and this is not a violation of the principle of
All given, business losses are a feeble ground for petitioner to immutability of final judgments. (SESSION DELIGHTS ICE
repudiate its obligation under the CBA. The rule is settled that CREAM AND FAST FOODS v. THE HON. COURT OF APPEALS
any benefit and supplement being enjoyed by the employees (Sixth Division), HON. NATIONAL LABOR RELATIONS
cannot be reduced, diminished, discontinued or eliminated by COMMISSION, G.R. No. 172149, February 8, 2010)
the employer. The principle of non-diminution of benefits is Retirement
founded on the constitutional mandate to protect the rights of At the risk of stating the obvious, private respondent was not
workers and to promote their welfare and to afford labor full separated from petitioners employ due to mandatory or
protection. (LEPANTO CERAMICS, INC.V. LEPANTO CERAMICS optional retirement but, rather, by termination of employment
EMPLOYEES ASSOCIATION, G.R. No. 180866, March 2, 2010) for a just cause. Thus, any retirement pay provided by PALs
Albeit the amounts representing tollgate fees were deducted Special Retirement & Separation Program dated February
from gross revenues and not directly from Taroys 15, 1988 or, in the absence or legal inadequacy thereof, by
commissions, the labor tribunal and the appellate court Article 287 of the Labor Code does not operate nor can be
correctly held that the withholding of those amounts reduced made to operate for the benefit of private respondent. Even
the amount from which Taroys 9% commission would be private respondents assertion that, at the time of her lawful
computed. Such a computation not only marks a change in dismissal, she was already qualified for retirement does not
the method of payment of wages, resulting in a diminution of aid her case because the fact remains that private respondent
Taroys wages in violation of Article 113 vis--vis Article 100 of was already terminated for cause thereby rendering nugatory
the Labor Code, as amended. It need not be underlined that any entitlement to mandatory or optional retirement pay that
without Taroys written consent or authorization, the she might have previously possessed. (NATIONAL LABOR
deduction is considered illegal. RELATIONS COMMISSION and AIDA M. QUIJANO v. PHILIPPINE
Besides, the invocation of the rule on company practice is AIRLINES, INC. G.R. No. 123294,October 20, 2010)
generally used with respect to the grant of additional benefits Admittedly, petitioner worked for 14 years for the bus
to employees, not on issues involving diminution of benefits. company which did not adopt any retirement scheme. Even if
(GENESIS TRANSPORT SERVICE, INC. v. UNYON NG MALAYANG petitioner as bus conductor was paid on commission basis
MANGGAGAWA NG GENESIS TRANSPORT (UMMGT), G.R. No. then, he falls within the coverage of R.A. 7641 and its
182114, April 5, 2010) implementing rules. As thus correctly ruled by the Labor
Protection to Labor Arbiter, petitioners retirement pay should include the cash
Although it cannot be determined with certainty whether equivalent of the 5-day SIL and 1/12 of the 13th month pay.
respondent worked for the entire period from November 16 to (RODOLFO J. SERRANO v. SEVERINO SANTOS TRANSIT G.R. No.
November 30, 2005, the consistent rule is that if doubt exists 187698, August 9, 2010)
between the evidence presented by the employer and that by Undoubtedly, under this provision, the retirement age is
the employee, the scales of justice must be tilted in favor of primarily determined by the existing agreement or
the latter in line with the policy mandated by Articles 2 and 3 employment contract. Absent such an agreement, the
of the Labor Code to afford protection to labor and construe retirement age shall be fixed by law. The above-cited law
doubts in favor of labor. For petitioners failure to satisfy their mandates that the compulsory retirement age is at 65 years,
burden of proof, respondent is presumed to have worked while the minimum age for optional retirement is set at 60
during the period in question and is, accordingly, entitled to years. Moreover, Article 287 of the Labor Code, as amended,
his salary. Therefore, the withholding of respondents salary applies only to a situation where (1) there is no CBA or other
by petitioners is contrary to Article 116 of the Labor Code and, applicable employment contract providing for retirement
thus, unlawful. (SHS PERFORATED MATERIALS, INC., WINFRIED benefits for an employee; or (2) there is a collective
HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. bargaining agreement or other applicable employment
MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010) contract providing for retirement benefits for an employee,
Reassignment but it is below the requirement set by law. The rationale for
In Abbott Laboratories (Phils.), Inc. v. National Labor Relations the first situation is to prevent the absurd situation where an
Commission, which involved a complaint filed by a medical employee, deserving to receive retirement benefits, is denied
representative against his employer drug company for illegal them through the nefarious scheme of employers to deprive
dismissal for allegedly terminating his employment when he employees of the benefits due them under existing labor laws.
refused to accept his reassignment to a new area, the Court The rationale for the second situation is to prevent private
upheld the right of the drug company to transfer or reassign contracts from derogating from the public law. (AMELIA R.
its employee in accordance with its operational demands and OBUSAN v. PHILIPPINE NATIONAL BANK, G.R. No. 181178, July
requirements. The ruling of the Court therein, quoted 26, 2010)
hereunder, also finds application in the instant case: Retirement Plans
Therefore, Bobadilla had no valid reason to disobey the order Retirement plans allowing employers to retire employees who
of transfer. He had tacitly given his consent thereto when he have not yet reached the compulsory retirement age of 65
acceded to the petitioners policy of hiring sales staff who are years are not per se repugnant to the constitutional guaranty
willing to be assigned anywhere in the Philippines which is of security of tenure. By its express language, the Labor Code
demanded by petitioners business. permits employers and employees to fix the applicable
By the very nature of his employment, a drug salesman or retirement age at 60 years or below, provided that the
medical representative is expected to travel. He should employees retirement benefits under any CBA and other
anticipate reassignment according to the demands of their agreements shall not be less than those provided therein. By
business. It would be a poor drug corporation which cannot this yardstick, the PNB-RP complies. (AMELIA R. OBUSAN v.
even assign its representatives or detail men to new markets PHILIPPINE NATIONAL BANK, G.R. No. 181178, July 26, 2010)
calling for opening or expansion or to areas where the need Seafarer
for pushing its products is great. More so if such Death Benefits
reassignments are part of the employment contract. In the present case, Eduardo was repatriated for medical
(PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) reasons; he arrived in the Philippines on June 17, 1999, to
v. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010) undergo further evaluation and treatment after being
Re-computation of Awards as against diagnosed with advanced mycobacterium tuberculosis,
Principle of Immutability of Final Judgment advanced HIV disease, cardiac dysrhythmias, and anemia.
Consistent with what we discussed above, we hold that under Eduardos employment was therefore terminated upon his
the terms of the decision under execution, no essential repatriation on June 17, 1999. Thus, when Eduardo died on
change is made by a re-computation as this step is a June 9, 2001, approximately two (2) years after his
necessary consequence that flows from the nature of the repatriation, his employment with the respondents had long
illegality of dismissal declared in that decision. A re- been terminated. As we held in Prudential Shipping and
computation (or an original computation, if no previous Management Corporation v. Sta. Rita:
computation has been made) is a part of the law specifically,
 13

The death of a seaman during the term of employment makes Seafarers on Board Ocean-Going Vessels (POEA-SEC) provides
the employer liable to his heirs for death compensation for compensation and benefits for injury or illness suffered by
benefits. Once it is established that the seaman died during a seafarer. It says that, in order to claim disability benefits
the effectivity of his employment contract, the employer is under the Standard Employment Contract, it is the company-
liable. However, if the seaman dies after the termination of his designated physician who must proclaim that the seaman
contract of employment, his beneficiaries are not entitled to suffered a permanent disability, whether total or partial, due
the death benefits enumerated above. [Emphasis supplied.] to either injury or illness, during the term of the latters
(LYDIA ESCARCHA v. LEONIS NAVIGATION CO., INC. and/or employment. In German Marine Agencies, Inc. v. NLRC, the
WORLD MARINE PANAMA, S.A., G.R. No. 182740, July 5, 2010) Courts discussion on the seafarers claim for disability
Moreover, there is no evidence to show that Julianos illness benefits is enlightening. Thus:
was acquired during the term of his employment with [In] order to claim disability benefits under the Standard
petitioners. In respondents Position Paper, they admitted that Employment Contract, it is the company-designated
Juliano was discharged not because of any illness but due to physician who must proclaim that the seaman suffered a
the expiration of his employment contract. Although they permanent disability, whether total or partial, due to either
stated that Juliano was hospitalized on August 28, 1999, or injury or illness, during the term of the latters employment.
five months before his contract expired, they presented no There is no provision requiring accreditation by the POEA of
proof to support this allegation. Instead, what respondents such physician. In fact, aside from their own gratuitous
presented were the Medical Certificates issued by Dr. Lloren allegations, petitioners are unable to cite a single provision in
attesting to the fact that on March 6, 2000, Juliano consulted the said contract in support of their assertions or to offer any
her complaining of abdominal distention. We find this not credible evidence to substantiate their claim. If accreditation
substantial evidence to prove that Julianos illness which of the company-designated physician was contemplated by
caused his death was contracted during the term of his the POEA, it would have expressly provided for such a
contract. Indeed, the death of a seaman several months after qualification, by specifically using the term accreditation in
his repatriation for illness does not necessarily mean that: a) the Standard Employment Contract, to denote its intention.
the seaman died of the same illness; b) his working conditions For instance, under the Labor Code, it is expressly provided
increased the risk of contracting the illness which caused his that physicians and hospitals providing medical care to an
death; and c) the death is compensable, unless there is some injured or sick employee covered by the Social Security
reasonable basis to support otherwise. In the instant case, System or the Government Service Insurance System must be
Juliano was repatriated not because of any illness but because accredited by the Employees Compensation Commission. It is
his contract of employment expired. There is likewise no proof a cardinal rule in the interpretation of contracts that if the
that he contracted his illness during the term of his terms of a contract are clear and leave no doubt upon the
employment or that his working conditions increased the risk intention of the contracting parties, the literal meaning of its
of contracting the illness which caused his death. (MEDLINE stipulation shall control. There is no ambiguity in the wording
MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY v. of the Standard Employment Contract the only qualification
GLICERIA ROSLINDA and ARIEL ROSLINDA, G.R. No. 168715, prescribed for the physician entrusted with the task of
September 15, 2010) assessing the seamans disability is that he be company-
Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, designated. When the language of the contract is explicit, as
Hermogenes v. Oseo Shipping Services, Inc., Prudential in the case at bar, leaving no doubt as to the intention of the
Shipping and Management Corporation v. Sta. Rita, Klaveness drafters thereof, the courts may not read into it any other
Maritime Agency, Inc. v. Beneficiaries of Allas, in order to avail intention that would contradict its plain import. [Emphasis
of death benefits, the death of the employee should occur supplied]
during the effectivity of the employment contract. For In this case, the findings of respondents designated physician
emphasis, we reiterate that the death of a seaman during the that petitioner has been suffering from brief psychotic
term of employment makes the employer liable to his heirs for disorder and that it is not work-related must be respected.
death compensation benefits, but if the seaman dies after the (EDGARDO M. PANGANIBAN v. TARA TRADING
termination of his contract of employment, his beneficiaries SHIPMANAGEMENT INC.ANDSHINLINE SDN BHD, G.R. No.
are not entitled to the death benefits. Federico did not die 187032, October 18, 2010)
while he was under the employ of petitioners. His contract of Specifically with respect to mental diseases, for the same to
employment ceased when he arrived in the Philippines on be compensable, the POEA-SEC requires that it must be due
March 30, 1998, whereas he died on April 29, 2000. Thus, his to traumatic injury to the head which did not occur in this
beneficiaries are not entitled to the death benefits under the case. While disability should be understood less on its medical
Standard Employment Contract for Seafarers. significance but more on the loss of earning capacity, the
(SOUTHEASTERN SHIPPING,SOUTHEASTERN SHIPPING GROUP, appellate courts sweeping observations that the hostile
LTD., G.R. No. 167678, June 22, 2010) working environment and the emotional turmoil suffered by
Occupational Disease [herein] respondent from his employers caused him mental
The wording of the section cited above clearly states that for and emotional stress that led to severe mental disorder and
an injury or illness to be compensable under the POEA rendered him permanently unable to perform any work, and
Standard Employment Contract, it must be work-related. that his working condition increased the risk of sustaining
Petitioner has failed to convince this Court that the illness he the illness complained of do not lie. (PHILIPPINE TRANSMARINE
suffered can be reasonably linked to the performance of his CARRIERS, INC., GLOBAL NAVIGATION, LTD., v. SILVINO A.
work as 2nd Assistant Engineer on board M/V Chaiten or to NAZAM G.R. No. 190804,October 11, 2010)
prove that it was aggravated during his stint in the vessel. We Permanent Total Disability
therefore find that the Court of Appeals correctly affirmed the In accordance with the avowed policy of the State to give
findings of the NLRC dismissing his appeal for lack of merit. maximum aid and full protection to labor, the Court has
(ARNALDO G. GABUNAS, SR.,v. SCANMAR MARITIME applied the Labor Code concept of permanent total disability
SERVICESSERENO, JJ.INC., G.R. No. 188637, December 15, to Filipino seafarers, it holding that the notion of disability is
2010) intimately related to the workers capacity to earn, what is
AIDS is not listed as an occupational disease both under the compensated being not his injury or illness but his inability to
POEA-SEC and the ECC Rules. Thus, the claimant bears the work resulting in the impairment of his earning capacity;
burden of reasonably proving the relationship between the hence, disability should be understood less on its medical
work of the deceased and AIDS, or that the risk of contracting significance but more on the loss of earning capacity.
AIDS was increased by the working conditions of the (RIZALDY M. QUITORIANO v. JEBSENS MARITIME, INC., G.R. No.
deceased. (LYDIA ESCARCHA v. LEONIS NAVIGATION CO., INC. 179868, January 21, 2010)
and/or WORLD MARINE PANAMA, S.A., G.R. No. 182740, July 5, Prescription of Seafarer Money Claims
2010) Based on the foregoing, it is therefore clear that Article 291 is
Disability Benefits the law governing the prescription of money claims of
Although strict rules of evidence are not applicable in claims seafarers, a class of overseas contract workers. This law
for compensation and disability benefits, the Court cannot just prevails over Section 28 of the Standard Employment Contract
disregard the provisions of the POEA SEC. Significantly, a for Seafarers which provides for claims to be brought only
seaman is a contractual and not a regular employee. His within one year from the date of the seafarers return to the
employment is contractually fixed for a certain period of time. point of hire. Thus, for the guidance of all, Section 28 of the
Petitioner and respondents entered into a contract of Standard Employment Contract for Seafarers, insofar as it
employment. It was approved by the POEA on October 25, limits the prescriptive period within which the seafarers may
2005 and, thus, served as the law between the parties. file their money claims, is hereby declared null and void. The
Undisputedly, Section 20-B of the POEA Amended Standard applicable provision is Article 291 of the Labor Code, it being
Terms and Conditions Governing the Employment of Filipino more favorable to the seafarers and more in accord with the
 14

States declared policy to afford full protection to labor. The backwages shall be computed from the time of their illegal
prescriptive period in the present case is thus three years termination up to the finality of the decision. Moreover,
from the time the cause of action accrues. (SOUTHEASTERN respondents, having been compelled to litigate in order to
SHIPPING,SOUTHEASTERN SHIPPING GROUP, LTD., G.R. No. seek redress for their illegal dismissal, are entitled to the
167678, June 22, 2010) award of attorneys fees equivalent to 10% of the total
Thus, when petitioner signed his contract with respondent on monetary award. (PICOP RESOURCES, INCORPORATED (PRI), v.
22 December 2001, it was the 2000 POEA Standard ANACLETO L. TAECA, G.R. No. 160828, August 9, 2010)
Employment Contract that was already in effect. In awarding separation pay to an illegally dismissed
Consequently, his action, which was filed on 10 June 2004, employee, in lieu of reinstatement, the amount to be awarded
was filed within the three year prescription period under the shall be equivalent to one month salary for every year of
2000 POEA Standard Employment Contract. Despite having service reckoned from the first day of employment until the
filed his action within the prescriptive period, his action must finality of the decision. Payment of separation pay is in
fail. (ARNALDO G. GABUNAS, SR.,v. SCANMAR MARITIME addition to payment of backwages. And if separation pay is
SERVICES SERENO, JJ.INC., G.R. No. 188637, December 15, awarded instead of reinstatement, backwages shall be
2010) computed from the time of illegal termination up to the
Security of Tenure of Probationary Employee finality of the decision. (AGRICULTURAL AND INDUSTRIAL
Respondent was constructively dismissed and, therefore, SUPPLIES CORPORATION,et. al., v. JUEBER P. SIAZAR G.R. No.
illegally dismissed. Although respondent was a probationary 177970, August 25, 2010)
employee, he was still entitled to security of tenure. Section 3 In the instant case, this Court rules that an award to
(2) Article 13 of the Constitution guarantees the right of all respondent of separation pay by way of financial assistance,
workers to security of tenure. In using the expression all equivalent to one-half (1/2) months pay for every year of
workers, the Constitution puts no distinction between a service, is equitable. Although respondents actions
probationary and a permanent or regular employee. This constituted a valid ground to terminate his services, the same
means that probationary employees cannot be dismissed is to this Courts mind not so reprehensible as to warrant
except for cause or for failure to qualify as regular employees. complete disregard of his long years of service. It also appears
(SHS PERFORATED MATERIALS, INC., WINFRIED that the same is respondents first offense. While it may be
HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. expected that petitioners will argue that respondent has only
MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010) been in their service for four years since the merger of
Separation Pay Pharmacia and Upjohn took place in 1996, equity
We are aware that in several instances this Court has awarded considerations dictate that respondents tenure be computed
separation pay as a measure of social justice. However, the from 1978, the year when respondent started working for
matter of the award of separation pay based on social justice Upjohn. (PHARMACIA and UPJOHN, INC. (now PFIZER
has been clarified in Philippine Long Distance Telephone PHILIPPINES, INC.) v. RICARDO P. ALBAYDA, JR., G.R. No.
Company v. National Labor Relations Commission where the 172724 August 23, 2010)
Court categorically declared that separation pay shall be An employee who is illegally dismissed is entitled to the twin
allowed as a measure of social justice only in those instances reliefs of full backwages and reinstatement. If reinstatement is
where the employee is validly dismissed for cause other than not viable, separation pay is awarded to the employee. In
serious misconduct x x x. Likewise, we ruled in Toyota Motor awarding separation pay to an illegally dismissed employee,
Philippines Corp. Workers Association (TMPCWA) v. National in lieu of reinstatement, the amount to be awarded shall be
Labor Relations Commission that in addition to serious equivalent to one month salary for every year of service.
misconduct, separation pay should not be conceded to an Under Republic Act No. 6715, employees who are illegally
employee who was dismissed based on willful disobedience. dismissed are entitled to full backwages, inclusive of
(Equitable PCI Bank (Now Banco De Oro Unibank, Inc.), v. allowances and other benefits or their monetary equivalent,
Castor A. Dompor, G.R. Nos. 163293 & 163297, December 8, computed from the time their actual compensation was
2010) withheld from them up to the time of their actual
Petitioners liability, however, cannot extend to the payment reinstatement but if reinstatement is no longer possible, the
of separation pay. An order to pay separation pay is invested backwages shall be computed from the time of their illegal
with a punitive character, such that an indirect employer termination up to the finality of the decision. Thus, Casio, et
should not be made liable without a finding that it had al. are entitled to backwages and separation pay considering
conspired in the illegal dismissal of the employees. that reinstatement is no longer possible because the positions
(GOVERNMENT SERVICE INSURANCE SYSTEM v. NATIONAL they previously occupied are no longer existing, as declared
LABOR RELATIONS COMMISSION (NLRC), ET. Al., G.R. No. by GMC. (GENERALMILLING CORPORATION, v. ERNESTO
180045, November 17, 2010 ) CASIO, et al., G.R. No. 149552, March 10, 2010)
In other words, under the present jurisprudential framework, Separation pay, on the other hand, is equivalent to one month
the grant of separation pay as a matter of equity to a validly pay for every year of service, a fraction of six months to be
dismissed employee is not contingent on whether the ground considered as one whole year. Here that would begin from
for dismissal is expressly under Article 282(a) but whether the January 31, 1994 when petitioner Belen began his service.
ground relied upon is akin to serious misconduct or involves Technically the computation of his separation pay would end
willful or wrongful intent on the part of the employee. on the day he was dismissed on August 20, 1999 when he
(NATIONAL LABOR RELATIONS COMMISSION and AIDA M. supposedly ceased to render service and his wages ended.
QUIJANO v. PHILIPPINE AIRLINES, INC. G.R. No. But, since Belen was entitled to collect backwages until the
123294,October 20, 2010) judgment for illegal dismissal in his favor became final, here
Under the circumstances, the grant of separation pay in lieu on September 22, 2008, the computation of his separation
of reinstatement of the petitioners was proper. It is not pay should also end on that date. (DANIEL P. JAVELLANA , JR.,V.
disputable that the grant of separation pay or some other ALBINO BELEN, G.R. No. 181913, ALBINO BELEN V. DANIEL P.
financial assistance to an employee is based on equity, which JAVELLANA, JR. and JAVELLANA FARMS, INC., G.R. No. 182158,
has been defined as justice outside law, or as being ethical March 5, 2010)
rather than jural and as belonging to the sphere of morals Separation Pay/Backwages
than of law. [21] This Court has granted separation pay as a The awards of separation pay and backwages are not
measure of social justice even when an employee has been mutually exclusive and both may be given to the respondent.
validly dismissed, as long as the dismissal has not been due In Nissan North Edsa Balintawak, Quezon City v. Serrano, Jr.,
to serious misconduct or reflective of personal integrity or the Court held that:
morality. (DANILO ESCARIO v. NATIONAL LABOR RELATIONS The normal consequences of a finding that an employee has
COMMISSION, G.R. No. 160302, September 27, 2010) been illegally dismissed are, firstly, that the employee
An employee who is illegally dismissed is entitled to the twin becomes entitled to reinstatement to his former position
reliefs of full backwages and reinstatement. If reinstatement is without loss of seniority rights and, secondly, the payment of
not viable, separation pay is awarded to the employee. In backwages corresponding to the period from his illegal
awarding separation pay to an illegally dismissed employee, dismissal up to actual reinstatement. The statutory intent on
in lieu of reinstatement, the amount to be awarded shall be this matter is clearly discernible. Reinstatement restores the
equivalent to one month salary for every year of service. employee who was unjustly dismissed to the position from
Under Republic Act No. 6715, employees who are illegally which he was removed, that is, to his status quo ante
dismissed are entitled to full backwages, inclusive of dismissal, while the grant of backwages allows the same
allowances and other benefits, or their monetary equivalent, employee to recover from the employer that which he had lost
computed from the time their actual compensation was by way of wages as a result of his dismissal. These twin
withheld from them up to the time of their actual remedies reinstatement and payment of backwages
reinstatement. But if reinstatement is no longer possible, the make the dismissed employee whole who can then look
 15

forward to continued employment. Thus, do these two parties. Reinstatement, under the circumstances, would no
remedies give meaning and substance to the constitutional longer be practical as it would not be in the interest of both
right of labor to security of tenure. The two forms of relief are parties. Under the law and jurisprudence, an illegally
distinct and separate, one from the other. Though the grant of dismissed employee is entitled to two reliefs backwages and
reinstatement commonly carries with it an award of reinstatement, which are separate and distinct. If
backwages, the inappropriateness or non-availability of one reinstatement would only exacerbate the tension and further
does not carry with it the inappropriateness or non-availability ruin the relations of the employer and the employee, or if
of the other. x x x As the term suggests, separation pay is the their relationship has been unduly strained due to
amount that an employee receives at the time of his irreconcilable differences, particularly where the illegally
severance from the service and x x x is designed to provide dismissed employee held a managerial or key position in the
the employee with the wherewithal during the period that he company, it would be prudent to order payment of separation
is looking for another employment. In the instant case, the pay instead of reinstatement. In the case of Golden Ace
grant of separation pay was a substitute for immediate and Builders v. Talde, We wrote:
continued re-employment with the private respondent Bank. Under the doctrine of strained relations, the payment of
The grant of separation pay did not redress the injury that is separation pay has been considered an acceptable alternative
intended to be relieved by the second remedy of backwages, to reinstatement when the latter option is no longer desirable
that is, the loss of earnings that would have accrued to the or viable. On the one hand, such payment liberates the
dismissed employee during the period between dismissal and employee from what could be a highly oppressive work
reinstatement. Put a little differently, payment of backwages environment. On the other, the payment releases the
is a form of relief that restores the income that was lost by employer from the grossly unpalatable obligation of
reason of unlawful dismissal; separation pay, in contrast, is maintaining in its employ a worker it could no longer trust.
oriented towards the immediate future, the transitional period (WENSHA SPA CENTER, INC. v. LORETA T. YUNG, G.R. No.
the dismissed employee must undergo before locating a 185122,
replacement job. x x x The grant of separation pay was a August 16, 2010)
proper substitute only for reinstatement; it could not be an The Court has held that, under Article 279 of the Labor Code,
adequate substitute both for reinstatement and for separation pay may be awarded to an illegally dismissed
backwages. (Emphasis supplied.) employee in lieu of reinstatement when continued
The case is, therefore, remanded to the Labor Arbiter for the employment is no longer possible where, as in this case, the
purpose of computing the proper monetary award due to the continued relationship between the employer and the
respondent. (CENTURY CANNING CORPORATION, RICARDO T. employee is no longer viable due to strained relations
PO, JR. and AMANCIO C. RONQUILLO v. VICENTE RANDY R. between them and reinstatement appears no longer practical
RAMIL, G.R. No. 171630, August 8, 2010) due to the length of time that had since passed.
The basis for the payment of backwages is different from that (AGRICULTURAL AND INDUSTRIAL SUPPLIES CORPORATION,et.
for the award of separation pay. Separation pay is granted al., v. JUEBER P. SIAZAR G.R. No. 177970, August 25, 2010)
where reinstatement is no longer advisable because of Strike
strained relations between the employee and the employer. Dismissal of Union Officers
Backwages represent compensation that should have been In the present case, respondents Erlinda Vazquez, Ricardo
earned but were not collected because of the unjust dismissal. Sacristan, Leonida Catalan, Maximo Pedro, Nathaniela
The basis for computing backwages is usually the length of Dimaculangan, Rodolfo Mojico, Romeo Caramanza, Reynaldo
the employees service while that for separation pay is the Ganitano, Alberto Basconcillo, and Ramon Falcis stand to be
actual period when the employee was unlawfully prevented dismissed as participating union officers, pursuant to Article
from working. (GOLDEN ACE BUILDERS v. JOSE A. TALDE, G.R. 264(a), paragraph 3, of the Labor Code. This provision
No. 187200 May 5, 2010) imposes the penalty of dismissal on any union officer who
Social Justice knowingly participates in an illegal strike. The law grants the
Bitter labor disputes, especially strikes, always generate a employer the option of declaring a union officer who
throng of odium and abhorrence that sometimes result in participated in an illegal strike as having lost his employment.
unpleasant, although unwanted, consequences. Considering (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR
this, the striking employees breach of certain restrictions ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, 2010)
imposed on their concerted actions at their employers Consequence of Illegal Strike
doorsteps cannot be regarded as so inherently wicked that the Contemplating two causes for the dismissal of an employee,
employer can totally disregard their long years of service prior that is: (a) unlawful lockout; and (b) participation in an illegal
to such breach. The records also fail to disclose any past strike, the third paragraph of Article 264(a) authorizes the
infractions committed by the dismissed Union members. award of full backwages only when the termination of
Taking these circumstances in consideration, the Court employment is a consequence of an unlawful lockout. On the
regards the award of financial assistance to these Union consequences of an illegal strike, the provision distinguishes
members in the form of one-half month salary for every year between a union officer and a union member participating in
of service to the company up to the date of their termination an illegal strike. A union officer who knowingly participates in
as equitable and reasonable. (C. ALCANTARA & SONS, INC. v. an illegal strike is deemed to have lost his employment status,
COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, but a union member who is merely instigated or induced to
G.R. No. 179220, September 29, 2010) participate in the illegal strike is more benignly treated. Part of
While the Constitution is committed to the policy of social the explanation for the benign consideration for the union
justice and the protection of the working class, it should not member is the policy of reinstating rank-and-file workers who
be supposed that every labor dispute will be automatically are misled into supporting illegal strikes, absent any finding
decided in favor of labor. Management also has its rights that such workers committed illegal acts during the period of
which are entitled to respect and enforcement in the interest the illegal strikes. (DANILO ESCARIO v. NATIONAL LABOR
of simple fair play. Out of its concern for those with less RELATIONS COMMISSION, G.R. No. 160302, September 27,
privileges in life, the Supreme Court has inclined, more often 2010)
than not, toward the worker and upheld his cause in his As regards the rank and file Union members, Article 264 of the
conflicts with the employer. Such favoritism, however, has not Labor Code provides that termination from employment is not
blinded the Court to the rule that justice is in every case for warranted by the mere fact that a union member has taken
the deserving, to be dispensed in the light of the established part in an illegal strike. It must be shown that such a union
facts and the applicable law and doctrine. (PHILIPPINE RURAL member, clearly identified, performed an illegal act or acts
RECONSTRUCTION MOVEMENT( RRM)v.VIRGILIO E. PULGAR, during the strike. (C. ALCANTARA & SONS, INC. v. COURT OF
G.R. No. 169227, July 5, 2010) APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No.
Nonetheless, given the attendant circumstances in this case, 179220, September 29, 2010)
namely, that Artificio had been working with the company for We explained in Samahang Manggagawa sa Sulpicio Lines,
a period of sixteen (16) years and without any previous Inc.-NAFLU v. Sulpicio Lines, Inc. that the effects of illegal
derogatory record, the ends of social and compassionate strikes, outlined in Article 264 of the Labor Code, make a
justice would be served if Artificio be given same equitable distinction between participating workers and union officers.
relief in the form of separation pay. (JOSE P. ARTIFICIO v. The services of an ordinary striking worker cannot be
NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 172988, terminated for mere participation in an illegal strike; proof
July 26, 2010 must be adduced showing that he or she committed illegal
Strained Relationship acts during the strike. The services of a participating union
We are in accord with the pronouncement of the CA that the officer, on the other hand, may be terminated, not only when
reinstatement of Loreta to her former position is no longer he actually commits an illegal act during a strike, but also if
feasible in the light of the strained relations between the he knowingly participates in an illegal strike. (PHIMCO
 16

INDUSTRIES, INC. v. PHIMCO INDUSTRIES LABOR ASSOCIATION social justice and the protection of the working class, it should
(PILA), et al,G.R. No. 170830, August 11, 2010) not be supposed that every labor dispute will be automatically
Requisites of a Valid Strike decided in favor of labor. The management also has its own
Since strikes affect not only the relationship between labor rights, as such, are entitled to respect and enforcement in the
and management but also the general peace and progress of interest of simple fair play. Out of its concern for those with
the community, the law has provided limitations on the right less privileges in life, the Supreme Court has inclined more
to strike. Procedurally, for a strike to be valid, it must comply often than not toward the worker and upheld his cause in his
with Article 263 of the Labor Code, which requires that: (a) a conflicts with the employer. Such favoritism, however, has not
notice of strike be filed with the Department of Labor and blinded the Court to the rule that justice is in every case for
Employment (DOLE) 30 days before the intended date the deserving, to be dispensed in the light of the established
thereof, or 15 days in case of unfair labor practice; (b) a strike facts and applicable law and doctrine. (MARIBAGO
vote be approved by a majority of the total union membership BLUEWATER BEACH RESORT, INC. v. NITO DUAL, G.R. No.
in the bargaining unit concerned, obtained by secret ballot in 180660, July 20, 2010)
a meeting called for that purpose; and (c) a notice be given to In other words, in order to constitute serious misconduct
the DOLE of the results of the voting at least seven days which will warrant the dismissal of an employee under
before the intended strike. (PHIMCO INDUSTRIES, INC. v. paragraph (a) of Article 282 of the Labor Code, it is not
PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. sufficient that the act or conduct complained of has violated
No. 170830, August 11, 2010) some established rules or policies. It is equally important and
Picketing required that the act or conduct must have been performed
To strike is to withhold or to stop work by the concerted action with wrongful intent. In the instant case, petitioners-
of employees as a result of an industrial or labor dispute. The employees of Promm-Gem may have committed an error of
work stoppage may be accompanied by picketing by the judgment in claiming to be employees of P&G, but it cannot
striking employees outside of the company compound. While be said that they were motivated by any wrongful intent in
a strike focuses on stoppage of work, picketing focuses on doing so. As such, we find them guilty of only simple
publicizing the labor dispute and its incidents to inform the misconduct for assailing the integrity of Promm-Gem as a
public of what is happening in the company struck against. A legitimate and independent promotion firm. A misconduct
picket simply means to march to and from the employers which is not serious or grave, as that existing in the instant
premises, usually accompanied by the display of placards and case, cannot be a valid basis for dismissing an employee.
other signs making known the facts involved in a labor (JOEB M. ALIVIADO, et al. v. PROCTER & GAMBLE PHILS.,
dispute. It is a strike activity separate and different from the INC.,and PROMM-GEM INC., G.R. No. 160506, March 9, 2010)
actual stoppage of work. (PHIMCO INDUSTRIES, INC. v. Based on these considerations, we can only conclude that
PHIMCO INDUSTRIES LABOR ASSOCIATION (PILA), et al,G.R. Lado has become unfit to remain in employment with the
No. 170830, August 11, 2010) petitioner. When he disregarded Manalos note, Lado violated
Prohibited Activities company procedures, laying the company open to the
With a virtual human blockade and real physical obstructions possibility of loss. This is already serious misconduct for which
(benches and makeshift structures both outside and inside the he should be held accountable. When he failed to unload
gates), it was pure conjecture on the part of the NLRC to say despite the clear obligation to do so, he consummated his end
that [t]he non-strikers and their vehicles were x x x free to of the deal that would have led to the loss of company
get in and out of the company compound undisturbed by the property and thereby violated his fiduciary duty as custodian
picket line. Notably, aside from non-strikers who wished to of company property. (BIBIANA FARMS AND MILLS, INC v.
report for work, company vehicles likewise could not enter ARTURO LADO, G.R. No. 157861, February 2, 2010)
and get out of the factory because of the picket and the Considering these findings, it is clear that Agad committed a
physical obstructions the respondents installed. The blockade serious infraction amounting to theft of company property.
went to the point of causing the build up of traffic in the This act is akin to a or willful disobedience by the employee of
immediate vicinity of the strike area, as shown by the lawful orders of his employer in connection with his work,
photographs. This, by itself, renders the picket a prohibited a just cause for termination of employment recognized under
activity. Pickets may not aggressively interfere with the right Article 282(a) of the Labor Code.
of peaceful ingress to and egress from the employers shop or Misconduct has been defined as a transgression of some
obstruct public thoroughfares; picketing is not peaceful where established and definite rule of action, a forbidden act, a
the sidewalk or entrance to a place of business is obstructed dereliction of duty, willful in character, and implies wrongful
by picketers parading around in a circle or lying on the intent and not mere error in judgment. To be serious, the
sidewalk. (PHIMCO INDUSTRIES, INC. v. PHIMCO INDUSTRIES misconduct must be of such grave and aggravated character.
LABOR ASSOCIATION (PILA), et al,G.R. No. 170830, August 11, (CALTEX (PHILIPPINES), INC., v. HERMIE G. AGAD, G.R. No.
2010) 162017, April 23, 2010)
Termination of Employment Willful Disobedience
Just Causes As a just cause for dismissal of an employee under Article 282
Serious Misconduct of the Labor Code, willful disobedience of the employers
It is noteworthy that prior to this incident, there had been lawful orders requires the concurrence of two elements: (1)
several cases of theft and vandalism involving both the employees assailed conduct must have been willful, i.e.,
respondent companys property and personal belongings of characterized by a wrongful and perverse attitude; and (2) the
other employees. In order to address this issue of losses, order violated must have been reasonable, lawful, made
respondent company issued two memoranda implementing an known to the employee, and must pertain to the duties which
intensive inspection procedure and reminding all employees he had been engaged to discharge. Both requisites are
that those who will be caught stealing and performing acts of present in the instant case. It is noteworthy that upon receipt
vandalism will be dealt with in accordance with the companys of the notice of suspension, petitioner did not question such
Code of Conduct. Despite these reminders, Helen took the order at the first instance. He immediately defied the order by
packing tape and was caught during the routine inspection. All reporting on the first day of his suspension. Deliberate
these circumstances point to the conclusion that it was not disregard or disobedience of rules by the employee cannot be
just an error of judgment on the part of Helen, but a countenanced. It may encourage him to do even worse and
deliberate act of theft of company property. (NAGKAKAISANG will render a mockery of the rules of discipline that employees
LAKAS NG MANGGAGAWA SA KEIHIN (NLMK-OLALIA-KMU) and are required to observe. (JIMMY ARENO, JR., v. SKYCABLE PCC-
HELEN VALENZUELA v. KEIHIN PHILIPPINES CORPORATION, BAGUIO, G.R. No. 180302, February 5, 2010)
G.R. No. 171115, August 9, 2010) As a just cause for dismissal of an employee under Article 282
Respondents acts constitute serious misconduct which is a of the Labor Code, willful disobedience of the employers
just cause for termination under the law. Theft committed by lawful orders requires the concurrence of two elements: (1)
an employee is a valid reason for his dismissal by the the employees assailed conduct must have been willful, i.e.,
employer. Although as a rule this Court leans over backwards characterized by a wrongful and perverse attitude; and (2) the
to help workers and employees continue with their order violated must have been reasonable, lawful, made
employment or to mitigate the penalties imposed on them, known to the employee, and must pertain to the duties which
acts of dishonesty in the handling of company property, he had been engaged to discharge. Both requisites are
petitioners income in this case, are a different matter. present in the instant case. It is noteworthy that upon receipt
(MARIBAGO BLUEWATER BEACH RESORT, INC. v. NITO DUAL, of the notice of suspension, petitioner did not question such
G.R. No. 180660, July 20, 2010) order at the first instance. He immediately defied the order by
Withal, the law, in protecting the rights of the laborers, reporting on the first day of his suspension. Deliberate
authorizes neither oppression nor self-destruction of the disregard or disobedience of rules by the employee cannot be
employer. While the Constitution is committed to the policy of countenanced. It may encourage him to do even worse and
 17

will render a mockery of the rules of discipline that employees were therefore justified. (JESUS E. DYCOCO, JR. v. EQUITABLE
are required to observe. (JIMMY ARENO, JR., v. SKYCABLE PCC- PCI BANK (NOW BANCO DE ORO), G.R. No. 188271, August 16,
BAGUIO, G.R. No. 180302, February 5, 2010) 2010)
Gross and Habitual Neglect of Duty Further, Agads conduct constitutes willful breach of the trust
It is significant that petitioner did not even deny that it was he reposed in him, another just cause for termination of
who signed, approved and facilitated the subject transactions employment recognized under Article 282(c) of the Labor
relating to the various abstractions committed by a bank Code. Loss of trust and confidence, as a just cause for
employee. It was an implied admission that he was the one termination of employment, is premised on the fact that the
who opened the door for the commission of the unlawful employee concerned holds a position of responsibility, trust
abstractions by failing to ensure that all requirements for the and confidence. The employee must be invested with
opening of accounts were complied with. This constituted confidence on delicate matters, such as the custody, handling,
gross negligence. (JESUS E. DYCOCO, JR. v. EQUITABLE PCI care and protection of the employers property and funds.
BANK (NOW BANCO DE ORO) , G.R. No. 188271,August 16, As a superintendent, Agad occupied a position tasked to
2010) perform key and sensitive functions which necessarily
Under Article 282 (b) of the Labor Code, an employer may involved the custody and protection of Caltexs properties.
terminate an employee for gross and habitual neglect of Consequently, Agad comes within the purview of the trust and
duties. Neglect of duty, to be a ground for dismissal, must be confidence rule. (CALTEX (PHILIPPINES), INC., v. HERMIE G.
both gross and habitual. Gross negligence connotes want of AGAD, G.R. No. 162017, April 23, 2010)
care in the performance of ones duties. Habitual neglect Authorized Causes
implies repeated failure to perform ones duties for a period of Cessation of Business Operation
time, depending upon the circumstances. A single or isolated The Court is not impressed with the claim that actual severe
act of negligence does not constitute a just cause for the financial losses exempt MMC from paying separation benefits
dismissal of the employee. Under the prevailing to complainants. In the first place, MMC did not appeal the
circumstances, respondent exercised his best judgment in decision of the Court of Appeals which affirmed the NLRCs
monitoring the CCTV cameras so as to ensure the security award of separation pay to complainants. MMCs failure had
within the hospital premises. Verily, assuming arguendo that the effect of making the awards final so that MMC could no
respondent was negligent, although this Court finds longer seek any other affirmative relief. In the second place,
otherwise, the lapse or inaction could only be regarded as a the non-issuance of a permit forced MMC to permanently
single or isolated act of negligence that cannot be categorized cease its business operations, as confirmed by the Court of
as habitual and, hence, not a just cause for his dismissal. (ST. Appeals. Under Article 283, the employer can lawfully close
LUKES MEDICAL CENTER, INC v. ESTRELITO NOTARIO, G.R. No. shop anytime as long as cessation of or withdrawal from
152166, October 20, 2010) business operations is bona fide in character and not impelled
Loss of Trust and Confidence by a motive to defeat or circumvent the tenurial rights of
With respect to the third issue, while We have previously held employees, and as long as he pays his employees their
that employers are allowed a wider latitude of discretion in termination pay in the amount corresponding to their length
terminating the services of employees who perform functions of service. The cessation of operations, in the case at bar is of
which by their nature require the employers full trust and such nature. It was proven that MMC stopped its operations
confidence and the mere existence of basis for believing that precisely due to failure to secure permit to operate a tailings
the employee has breached the trust of the employer is pond. Separation pay must nonetheless be given to the
sufficient, this does not mean that the said basis may be separated employees. (MANILA MINING CORP. EMPLOYEES
arbitrary and unfounded. (CENTURY CANNING CORPORATION, ASSOCIATION-FEDERATION OF FREE WORKERS CHAPTER,
RICARDO T. PO, JR. and AMANCIO C. RONQUILLO v. VICENTE SAMUEL G. ZUIGA, in his capacity as President v. MANILA
RANDY R. RAMIL, G.R. No. 171630, August 8, 2010) MINING CORP., et. al., G.R. Nos. 178222-23, September 29,
We cannot give credence to petitioners claim that the Labor 2010)
Arbiter and the NLRC decided his case purely on the basis of Furthermore, petitioner cannot use the argument that it is
respondents evidence. A perusal of petitioners own suffering from financial losses to claim exemption from the
pleadings and evidence readily showed his admission that he coverage of the law on 13th-month pay, or to spare it from its
personally processed the two Certificates of Time Deposit erroneous unilateral computation of the 13th (CENTRAL
(CTDs) at issue, despite his knowledge that they were AZUCARERA DE TARLAC DECISION v. CENTRAL AZUCARERA DE
unfunded. In fact, he admittedly issued them even before he TARLAC LABOR UNION-NLU, G.R. No. 188949, July 26, 2010)
received the purported managers checks that would fund the Redundancy
time deposits and, again by his own allegation, he had to Del Villars poor employee performance is irrelevant as
cancel the CTDs when the promised checks were not regards the issue on redundancy. Redundancy arises because
delivered to him at the appointed time. To be sure, it is there is no more need for the employees position in relation
incomprehensible why petitioner was so eager to issue the to the whole business organization, and not because the
CTDs (which may be used as evidence of the existence of employee unsatisfactorily performed the duties and
time deposits in the names of petitioners clients for the total responsibilities required by his position. (COCA-COLA
amount of P538,360,000.00) on the mere verbal BOTTLERS PHILIPPINES, INC v. ANGEL U. DEL VILLAR, G.R. No.
representations of the clients and the expedient of being 163091, October 6, 2010)
shown a passbook from a different bank. We hardly find it In this case, there is no proof that the essential requisites for a
believable that petitioner was, as he averred, motivated by a valid redundancy program as a ground for the termination of
noble desire to generate more business for the respondent the employment of respondent are present. There was no
bank. If he truly had the banks best interests at heart, with showing that the function of respondent is superfluous or that
more reason that he would exercise caution before issuing the business was suffering from a serious downturn that
CTDs for enormous amounts by waiting for the funds to be would warrant redundancy considering that such serious
actually deposited instead of exposing his employer to great business downturn was the ground cited by petitioners in the
risk. The fact that petitioner had the unfunded CTDs termination letter sent to respondent. (LAMBERT
eventually cancelled is of no moment. He should have never PAWNBROKERS and JEWELRY CORPORATION and LAMBERT LIM
issued those CTDs in the first place since, through those v. HELEN BINAMIRA, G.R. No. 170464, July 12, 2010)
documents, he was in effect certifying the existence of time Retrenchment
deposits in his branch that were actually fictitious. Thus, it can Respondent, in any of the pleadings filed by him, never
be said that his obvious laxity or negligence in the issuance of refuted the foregoing facts. Respondents argument that he
the said CTDs was even tainted with dishonesty. We can come was singled out for termination as allegedly shown in
to no other conclusion but that respondent bank was justified petitioners monthly termination report for the month of July
in terminating petitioners employment on the ground of loss 1997 filed with the DOLE does not persuade this Court.
of trust and confidence. (LEANDRO M. ALCANTARA v. THE Standing alone, this document is not proof of the total number
PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK ,G.R. No. of retrenched employees or that respondent was the only one
151349, October 20, 2010) retrenched. It merely serves as notice to DOLE of the names
After committing gross negligence, petitioner surprisingly still of employees terminated/ retrenched only for the month of
expects respondent bank to retain him. Nothing can compel July. In other words, it cannot be deemed as an evidence of
an employer to continue availing of the services of an the number of employees affected by the retrenchment
employee guilty of acts inimical to its interests as this is a program. Thus we cannot conclude that no other employees
ground for loss of confidence. Petitioners breach of were previously retrenched. (SHIMIZU PHILS. CONTRACTORS,
respondent banks policies intended to safeguard the bank INC. v. VIRGILIO P. CALLANTA, G.R. No. 165923, September 29,
and its clients funds was clearly inimical to the interests of his 2010)
employer. Loss of confidence and dismissal from employment
 18

Fourth. TSFI resorted to other measures to abate its losses. It But the test for distinguishing a project employee from a
claimed that during the crises period, it used as an office a regular employee is whether or not he has been assigned to
small-room (a mere cubicle) with only a two-person support carry out a specific project or undertaking, with the duration
staff in the persons of Grapilon and Hermle; it reduced the and scope of his engagement specified at the time his service
salaries of its employees by as much as 30%. This submission is contracted. Here, it is not disputed that petitioner company
by the company is substantiated by the schedule of Operating contracted respondent Trinidads service by specific projects
Expenses for the year ended December 31, 2002 and with the duration of his work clearly set out in his employment
September 30, 2002. A quick glance at the schedule readily contracts. He remained a project employee regardless of the
shows a reduction of TSFIs operating expenses across the number of years and the various projects he worked for the
board. The schedule indicates a substantial decrease in the company. (WILLIAM UY CONSTRUCTION CORP. and/or
operating expenses, from P5,733,735.00 in September 2002 TERESITA UY and WILLIAM UY V. JORGE R. TRINIDAD, G.R. No.
to P1,698,552.36 as of the end of December 2002. 183250, March 10, 2010)
On the whole, we find that TSFI satisfied the requisites for a Regular Employee
valid retrenchment. (FRANCIS RAY TALAM V. NATIONAL LABOR Assuming arguendo that petitioner hired respondent initially
RELATIONS COMMISSION, G.R. No. 175040, April 6, 2010) on a per project basis, his continued rehiring, as shown by the
Types of Employees sample payrolls converted his status to that of a regular
Field Personnel employee. Following Cocomangas Beach Hotel Resort v. Visca,
It bears emphasis that under P.D. 851 or the SIL Law, the the repeated and continuing need for respondents services is
exclusion from its coverage of workers who are paid on a sufficient evidence of the necessity, if not indispensability, of
purely commission basis is only with respect to field his services to petitioners business and, as a regular
personnel. The more recent case of Auto Bus Transport employee, he could only be dismissed from employment for a
Systems, Inc., v. Bautista clarifies that an employee who is just or authorized cause. (MILLENNIUM ERECTORS
paid on purely commission basis is entitled to SIL: CORPORATION v. VIRGILIO MAGALLANES, G.R. No. 184362,
A careful perusal of said provisions of law will result in the November 15, 2010)
conclusion that the grant of service incentive leave has been The primary standard of determining regular employment is
delimited by the Implementing Rules and Regulations of the the reasonable connection between the particular activity
Labor Code to apply only to those employees not explicitly performed by the employee in relation to the usual business
excluded by Section 1 of Rule V. According to the or trade of the employer. In this case, the connection is
Implementing Rules, Service Incentive Leave shall not apply obvious when we consider the nature of the work performed
to employees classified as field personnel. The phrase and its relation to the scheme of the particular business or
other employees whose performance is unsupervised by the trade in its entirety. Finally, the repeated and continuing need
employer must not be understood as a separate for the performance of the job is sufficient evidence of the
classification of employees to which service incentive leave necessity, if not indispensability of the activity to the
shall not be granted. Rather, it serves as an amplification of business. (MANILA WATER COMPANY, INC. v. JOSE J.
the interpretation of the definition of field personnel under the DALUMPINES, G.R. No. 175501, October 4, 2010)
Labor Code as those whose actual hours of work in the field Quitclaims
cannot be determined with reasonable certainty. The Receipt and Quitclaim executed by respondent lacks the
The same is true with respect to the phrase those who are elements of voluntariness and free will and, therefore, does
engaged on task or contract basis, purely commission basis. not absolve petitioners from liability in paying him the
Said phrase should be related with field personnel, applying sickness wages and other monetary claims. (VARORIENT
the rule on ejusdem generis that general and unlimited terms SHIPPING CO., INC., and.,d ARIA MARITIME CO., LTD v. GIL A.
are restrained and limited by the particular terms that they FLORES, G.R. No. 161934, October 6, 2010)
follow. Hence, employees engaged on task or contract basis or A perusal of the provisions of the Receipt and Quitclaim shows
paid on purely commission basis are not automatically that respondent would be releasing and discharging
exempted from the grant of service incentive leave, unless, petitioners from all claims, demands, causes of action, and
they fall under the classification of field personnel. the like in an all-encompassing manner, including the fact that
xxxx he had not contracted or suffered any illness or injury in the
According to Article 82 of the Labor Code, field personnel course of his employment and that he was discharged in good
shall refer to non-agricultural employees who regularly and perfect health. These stipulations clearly placed
perform their duties away from the principal place of business respondent in a disadvantageous position vis--vis the
or branch office of the employer and whose actual hours of petitioners. (VARORIENT SHIPPING CO., INC., and.,d ARIA
work in the field cannot be determined with reasonable MARITIME CO., LTD v. GIL A. FLORES, G.R. No. 161934, October
certainty. This definition is further elaborated in the Bureau of 6, 2010)
Working Conditions (BWC), Advisory Opinion to Philippine First, the contents of the quitclaim documents that have been
Technical-Clerical Commercial Employees Association which signed by the respondents are simple, clear and unequivocal.
states that: The records of the case are bereft of any substantial evidence
As a general rule, [field personnel] are those whose to show that respondents did not know that they were
performance of their job/service is not supervised by the relinquishing their right short of what they had expected to
employer or his representative, the workplace being away receive and contrary to what they have so declared. Put
from the principal office and whose hours and days of work differently, at the time they were signing their quitclaims,
cannot be determined with reasonable certainty; hence, they respondents honestly believed that the amounts received by
are paid specific amount for rendering specific service or them were fair and reasonable settlements of the amounts
performing specific work. If required to be at specific places at which they would have received had they refused to
specific times, employees including drivers cannot be said to voluntarily resign from the said company. (GOODRICH
be field personnel despite the fact that they are performing MANUFACTURING CORPORATION & MR. NILO CHUA GOY v.
work away from the principal office of the employee. EMERLINA ATIVO ET. Al, G.R. No. 188002, February 1, 2010)
x x x x (emphasis, italics and underscoring supplied) Given the release and quitclaim, we do not see how TSFI can
(RODOLFO J. SERRANO v. SEVERINO SANTOS TRANSIT G.R. No. be made to answer for failure to afford Talam procedural due
187698, August 9, 2010) process. The release and quitclaim, to our mind, erased
Project Employee whatever infirmities there might have been in the notice of
A project employee is assigned to a project which begins and termination as Talam had already voluntarily accepted his
ends at determined or determinable times. Employees who dismissal through the release and quitclaim. With this
work under different project employment contracts for several acceptance, the written notice became academic; the notice,
years do not automatically become regular employees; they after all, is merely a protective measure put in place by law
can remain as project employees regardless of the number of and serves no useful purpose after protection has been
years they work. Length of service is not a controlling factor in assured. We thus find no basis for the conclusion that TSFI
determining the nature of ones employment. Their rehiring is violated procedural due process and should pay nominal
only a natural consequence of the fact that experienced damages. (FRANCIS RAY TALAM V. NATIONAL LABOR
construction workers are preferred. In fact, employees who RELATIONS COMMISSION, G.R. No.175040, April 6, 2010)
are members of a work pool from which a company draws Teachers Employment on Probationary Status
workers for deployment to its different projects do not become A reality we have to face in the consideration of employment
regular employees by reason of that fact alone. The Court has on probationary status of teaching personnel is that they are
consistently held that members of a work pool can either be not governed purely by the Labor Code. The Labor Code is
project employees or regular employees. (JUDY O. DACUITAL , supplemented with respect to the period of probation by
et. al. v. L.M. CAMUS ENGINEERING CORPORATION and/or LUIS special rules found in the Manual of Regulations for Private
M. CAMUS, G.R. No. 176748, September 1, 2010)
 19

Schools. On the matter of probationary period, Section 92 of absorbed the employees and is held liable for the
these regulations provides: transgressions of his or her predecessor. (PEAFRANCIA
Section 92. Probationary Period. Subject in all instances to TOURS AND TRAVEL TRANSPORT, INC., v. JOSELITO P.
compliance with the Department and school requirements, SARMIENTO and RICARDO S. CATIMBANG, G.R. No. 178397,
the probationary period for academic personnel shall not be October 20, 2010)
more than three (3) consecutive years of satisfactory service Unfair Labor Practice
for those in the elementary and secondary levels, six (6) This is the reason why it is axiomatic in labor relations that a
consecutive regular semesters of satisfactory service for CBA entered into by a legitimate labor organization that has
those in the tertiary level, and nine (9) consecutive trimesters been duly certified as the exclusive bargaining representative
of satisfactory service for those in the tertiary level where and the employer becomes the law between them.
collegiate courses are offered on a trimester basis. [Emphasis Additionally, in the Certificate of Registration issued by the
supplied] (YOLANDA M. MERCADO et al. v. AMA COMPUTER DOLE, it is specified that the registered CBA serves as the
COLLEGE, G.R. No. 183572, April 13, 2010) covenant between the parties and has the force and effect of
Rule on Probationary Status law between them during the period of its duration.
and Fixed-term Employment of Teachers Compliance with the terms and conditions of the CBA is
Given the clear constitutional and statutory intents, we cannot mandated by express policy of the law primarily to afford
but conclude that in a situation where the probationary status protection to labor and to promote industrial peace. Thus,
overlaps with a fixed-term contract not specifically used for when a valid and binding CBA had been entered into by the
the fixed term it offers, Article 281 should assume primacy workers and the employer, the latter is behooved to observe
and the fixed-period character of the contract must give way. the terms and conditions thereof bearing on union dues and
This conclusion is immeasurably strengthened by the representation. If the employer grossly violates its CBA with
petitioners and the AMACCs hardly concealed expectation the duly recognized union, the former may be held
that the employment on probation could lead to permanent administratively and criminally liable for unfair labor practice.
status, and that the contracts are renewable unless the ( EMPLOYEES UNION OF BAYER PHILS.,v. BAYER PHILIPPINES,
petitioners fail to pass the schools standards. INC., G.R. No. 162943, December 6, 2010)
To highlight what we mean by a fixed-term contract For a charge of unfair labor practice to prosper, it must be
specifically used for the fixed term it offers, a replacement shown that CAB was motivated by ill will, bad faith, or fraud,
teacher, for example, may be contracted for a period of one or was oppressive to labor, or done in a manner contrary to
year to temporarily take the place of a permanent teacher on morals, good customs, or public policy, and, of course, that
a one-year study leave. The expiration of the replacement social humiliation, wounded feelings or grave anxiety resulted
teachers contracted term, under the circumstances, leads to x x x in suspending negotiations with CABEU-NFL. Notably,
no probationary status implications as she was never CAB believed that CABEU-NFL was no longer the
employed on probationary basis; her employment is for a representative of the workers. It just wanted to foster
specific purpose with particular focus on the term and with industrial peace by bowing to the wishes of the overwhelming
every intent to end her teaching relationship with the school majority of its rank and file workers and by negotiating and
upon expiration of this term. concluding in good faith a CBA with CABELA. Such actions of
If the school were to apply the probationary standards (as in CAB are nowhere tantamount to anti-unionism, the evil sought
fact it says it did in the present case), these standards must to be punished in cases of unfair labor practices. (CENTRAL
not only be reasonable but must have also been AZUCARERA DE BAIS EMPLOYEES UNION-NFL [CABEU-NFL] v.
communicated to the teachers at the start of the probationary CENTRAL AZUCARERA DE BAIS, INC. [CAB], G.R. No. 186605,
period, or at the very least, at the start of the period when November 17, 2010)
they were to be applied. These terms, in addition to those Unionism
expressly provided by the Labor Code, would serve as the just In the case at bar, since the former FEBTC employees are
cause for the termination of the probationary contract. As deemed covered by the Union Shop Clause, they are required
explained above, the details of this finding of just cause must to join the certified bargaining agent, which supposedly has
be communicated to the affected teachers as a matter of due gathered the support of the majority of workers within the
process. (YOLANDA M. MERCADO et al. v. AMA COMPUTER bargaining unit in the appropriate certification proceeding.
COLLEGE, G.R. No. 183572, April 13, 2010) Their joining the certified union would, in fact, be in the best
Thirteenth Month Pay interests of the former FEBTC employees for it unites their
The argument of petitioner that the grant of the benefit was interests with the majority of employees in the bargaining
not voluntary and was due to error in the interpretation of unit. It encourages employee solidarity and affords sufficient
what is included in the basic salary deserves scant protection to the majority status of the union during the life of
consideration. No doubtful or difficult question of law is the CBA which are the precisely the objectives of union
involved in this case. The guidelines set by the law are not security clauses, such as the Union Shop Clause involved
difficult to decipher. The voluntariness of the grant of the herein. We are indeed not being called to balance the
benefit was manifested by the number of years the employer interests of individual employees as against the State policy of
had paid the benefit to its employees. Petitioner only changed promoting unionism, since the employees, who were parties in
the formula in the computation of the 13th-month pay after the court below, no longer contested the adverse Court of
almost 30 years and only after the dispute between the Appeals decision. Nonetheless, settled jurisprudence has
management and employees erupted. This act of petitioner in already swung the balance in favor of unionism, in recognition
changing the formula at this time cannot be sanctioned, as it that ultimately the individual employee will be benefited by
indicates a badge of bad faith. (CENTRAL AZUCARERA DE that policy. In the hierarchy of constitutional values, this Court
TARLAC DECISION v. CENTRAL AZUCARERA DE TARLAC LABOR has repeatedly held that the right to abstain from joining a
UNION-NLU, G.R. No. 188949, July 26, 2010) labor organization is subordinate to the policy of encouraging
Transfer unionism as an instrument of social justice. (BANK OF THE
This Court has long stated that the objection to the transfer PHILIPPINE ISLANDS v. BPI EMPLOYEES UNION-DAVAO
being grounded solely upon the personal inconvenience or CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No.
hardship that will be caused to the employee by reason of the 164301, August 10, 2010)
transfer is not a valid reason to disobey an order of transfer. Union Security and Closed Shop
Such being the case, respondent cannot adamantly refuse to Union security is a generic term which is applied to and
abide by the order of transfer without exposing himself to the comprehends closed shop, union shop, maintenance of
risk of being dismissed. Hence, his dismissal was for just membership or any other form of agreement which imposes
cause in accordance with Article 282(a) of the Labor Code. upon employees the obligation to acquire or retain union
(PHARMACIA and UPJOHN, INC. (now PFIZER PHILIPPINES, INC.) membership as a condition affecting employment. There is
V. RICARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010) union shop when all new regular employees are required to
Transfer of Ownership join the union within a certain period for their continued
On this ground, petitioner terminated the employment of employment. There is maintenance of membership shop when
respondents. However, what petitioner apparently made was employees, who are union members as of the effective date of
a transfer of ownership. It is true that, as invoked by the agreement, or who thereafter become members, must
petitioner, in Manlimos, et al. v. NLRC, et al., we held that a maintain union membership as a condition for continued
change of ownership in a business concern is not proscribed employment until they are promoted or transferred out of the
by law. Lest petitioner forget, however, we also held therein bargaining unit or the agreement is terminated. A closed-
that the sale or disposition must be motivated by good faith shop, on the other hand, may be defined as an enterprise in
as a condition for exemption from liability. Thus, where the which, by agreement between the employer and his
charge of ownership is done in bad faith, or is used to defeat employees or their representatives, no person may be
the rights of labor, the successor-employer is deemed to have employed in any or certain agreed departments of the
 20

enterprise unless he or she is, becomes, and, for the duration available, as the remedies of appeal and certiorari are
of the agreement, remains a member in good standing of a mutually exclusive and not alternative or successive.
union entirely comprised of or of which the employees in (TACLOBAN FAR EAST MARKETING CORPORATION and
interest are a part. (BANK OF THE PHILIPPINE ISLANDS v. BPI FRANCISCO Y. ROMUALDEZ v. THE COURT OF APPEALS,
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320,
IN BPI UNIBANK, G.R. No. 164301, August 10, 2010) September 11, 2009)
Employees not covered by Union Shop Clause Time and again, it has been held that the right to appeal is not
All employees in the bargaining unit covered by a Union Shop a constitutional right, but a mere statutory privilege. Hence,
Clause in their CBA with management are subject to its terms. parties who seek to avail themselves of it must comply with
However, under law and jurisprudence, the following kinds of the statutes or rules allowing it. To reiterate, perfection of an
employees are exempted from its coverage, namely, appeal in the manner and within the period permitted by law
employees who at the time the union shop agreement takes is mandatory and jurisdictional. The requirements for
effect are bona fide members of a religious organization which perfecting an appeal must, as a rule, be strictly followed. Such
prohibits its members from joining labor unions on religious requirements are considered indispensable interdictions
grounds; employees already in the service and already against needless delays and are necessary for the orderly
members of a union other than the majority at the time the discharge of the judicial business. Failure to perfect the appeal
union shop agreement took effect; confidential employees renders the judgment of the court final and executory. Just as
who are excluded from the rank and file bargaining unit; and a losing party has the privilege to file an appeal within the
employees excluded from the union shop by express terms of prescribed period, so does the winner also have the
the agreement. (BANK OF THE PHILIPPINE ISLANDS v. BPI correlative right to enjoy the finality of the decision. Thus, the
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS propriety of the monetary awards of the Labor Arbiter is
IN BPI UNIBANK, G.R. No. 164301, August 10, 2010) already binding upon this Court, much more with the Court of
Termination of Union Officers Appeals. (ANDREW JAMES MCBURNIE v. EULALIO GANZON,
Three. Since the Unions strike has been declared illegal, the EGI-MANAGERS,INC. and E. GANZON, INC. G.R. Nos. 178034 &
Union officers can, in accordance with law be terminated from 178117, G.R. Nos. 186984-85, September 18, 2009)
employment for their actions. This includes the shop From the immediately quoted pronouncement of the Court in
stewards. They cannot be shielded from the coverage of Sy, petitioners mere filing of the Motion for Reduction of Bond
Article 264 of the Labor Code since the Union appointed them did not suffice to perfect his appeal. As correctly found by the
as such and placed them in positions of leadership and power appellate court, petitioner filed a Motion for Reduction of Bond
over the men in their respective work units. (C. ALCANTARA & dated June 24, 1999 (which was received by the appellate
SONS, INC. v. COURT OF APPEALS, et al.,G.R. No. 155109, G.R. court on June 28, 1999) alleging financial constraints without
No. 155135, G.R. No. 179220, September 29, 2010) showing substantial compliance with the Rules or
Withholding of Salary demonstrating a willingness to abide by the [R]ules by posting
Management prerogative refers to the right of an employer a partial bond. That petitioner questioned the computation of
to regulate all aspects of employment, such as the freedom to the monetary award basis of the computation of the amount
prescribe work assignments, working methods, processes to of appeal bond did not excuse it from posting a bond in a
be followed, regulation regarding transfer of employees, reasonable amount or what it believed to be the correct
supervision of their work, lay-off and discipline, and dismissal amount. (THE HERITAGE HOTEL MANILA v. NATIONAL LABOR
and recall of work. Although management prerogative refers RELATIONS COMMISSION, RUFINO C. RAON II, AND ISMAEL C.
to the right to regulate all aspects of employment, it cannot VILLA, G.R. Nos. 180478-79, September 3, 2009)
be understood to include the right to temporarily withhold Certiorari
salary/wages without the consent of the employee. To Respondent may have a point in asserting that in this case a
sanction such an interpretation would be contrary to Article Rule 65 petition is a wrong mode of appeal, as indeed the writ
116 of the Labor Code, which provides: of certiorari is an extraordinary remedy, and certiorari
ART. 116. Withholding of wages and kickbacks prohibited. It jurisdiction is not to be equated with appellate jurisdiction.
shall be unlawful for any person, directly or indirectly, to Nevertheless, it is settled, as a general proposition, that the
withhold any amount from the wages of a worker or induce availability of an appeal does not foreclose recourse to the
him to give up any part of his wages by force, stealth, extraordinary remedies, such as certiorari and prohibition,
intimidation, threat or by any other means whatsoever where appeal is not adequate or equally beneficial, speedy
without the workers consent. and sufficient, as where the orders of the trial court were
(SHS PERFORATED MATERIALS, INC., WINFRIED issued in excess of or without jurisdiction, or there is need to
HARTMANNSHENN, and HINRICH JOHANN SCHUMACHER v. promptly relieve the aggrieved party from the injurious effects
MANUEL F. DIAZ, G.R. No. 185814, October 13, 2010) of the acts of an inferior court or tribunal, e.g., the court has
authorized execution of the judgment. This Court has even
LABOR MATERIALS recognized that a recourse to certiorari is proper not only
SUPREME COURT 2009 LABOR CASE DIGEST where there is a clear deprivation of petitioners fundamental
FEBRUARY 16, 2010 WHENGMANALO LEAVE A COMMENT right to due process, but so also where other special
Appeal circumstances warrant immediate and more direct action.
As a rule, a party who does not appeal from the decision may (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs.
not obtain any affirmative relief from the appellate court other THE SECRETARY OF THE DEPARTMENT OF LABOR AND
than what he has obtained from the lower tribunal, if any, EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII,
whose decision is brought up on appeal. Due process prevents and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009)
the grant of additional awards to parties who did not appeal. Strict Application of the Rules
As an exception, he may assign an error where the purpose is As to the other ground cited by private respondents counsel,
to maintain the judgment on other grounds, but he cannot suffice it to say that it was a bare allegation unsubstantiated
seek modification or reversal of the judgment or affirmative by any proof or affidavit of merit. Besides, they could have
relief unless he has also appealed or filed a separate petition. filed the petition on time with a motion to be allowed to
(AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN litigate in forma pauperis. While social justice requires that
CASTIGADOR, NUENA SERMON and JOCELYN ZOLINA, G.R. No. the law look tenderly on the disadvantaged sectors of society,
178309, January 27, 2009) neither the rich nor the poor has a license to disregard rules of
Likewise, by availing of a wrong or inappropriate mode of procedure. The fundamental rule of human relations enjoins
appeal, the petition merits an outright dismissal pursuant to everyone, regardless of standing in life, to duly observe
Circular No. 2-90 which provides that, an appeal taken to procedural rules as an aspect of acting with justice, giving
either Supreme Court or the Court of Appeals by the wrong or everyone his due and observing honesty and good faith. For
inappropriate mode shall be dismissed.( HANJIN HEAVY indeed, while technicalities should not unduly hamper our
INDUSTRIES AND CONSTRUCTION COMPANY LTD. (FORMERLY quest for justice, orderly procedure is essential to the success
HANJIN ENGINEERING AND CONSTRUCTION CO. LTD.) v. of that quest to which all courts are devoted. (LAGUNA METTS
HONORABLE COURT OF APPEALS, G.R. No. 167938, February CORPORATION v. ARIES C. CAALAM and GERALDINE
19, 2009) ESGUERRA, G.R. No. 185220, July 27, 2009)
At the outset, it must be stated that petitioners adopted the Date of Filing
wrong mode of remedy in bringing the case before this Court. In this case, petitioner availed of the services of LBC, a private
It is well-settled that the proper recourse of an aggrieved carrier, to deliver its notice of appeal to the NLRC. Had
party to assail the decision of the Court of Appeals is to file a petitioner sent its notice of appeal by registered mail, the date
petition for review on certiorari under Rule 45 of the Rules of of mailing would have been deemed the date of filing with the
Court. The Rules precludes recourse to the special civil action NLRC. But petitioner, for reasons of its own, chose to send its
of certiorari if appeal, by way of a petition for review is notice of appeal through a private letter-forwarding agency.
 21

Therefore, the date of actual receipt by the NLRC of the notice Assignment in tandem with the Letter Agreement and Cash
of appeal, and not the date of delivery to LBC, is deemed to Voucher is as good as cash. Third, the Court finds that the
be the date of the filing of the notice of appeal. Since the execution of the Deed of Assignment, the Letter Agreement
NLRC received petitioners notice of appeal on 26 February and the Cash Voucher were made in good faith, and
2001, the appeal was clearly filed out of time. Petitioner had constituted clear manifestation of petitioners willingness to
thus lost its right to appeal from the decision of the Labor pay the judgment amount. (PEOPLES BROADCASTING(BOMBO
Arbiter and the NLRC should have dismissed its notice of RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT
appeal. (CHARTER CHEMICAL AND COATING CORPORATION vs. OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR,
HERBERT TAN and AMALIA SONSING, G.R. No. 163891, May DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652,
21, 2009) May 8, 2009)
Delayed Filing Attorneys Fees
We agree with the Court of Appeals that since no intent to Finally, the Court overrules the deletion by the NLRC of the
delay the administration of justice could be attributed to Labor Arbiters award for attorneys fees to petitioner.
Guinmapang, a one day delay does not justify the appeals Petitioner is evidently entitled to attorneys fees, since h3e
denial. More importantly, the Court of Appeals declared that was compelled to litigate to protect his interest by reason of
Guinmapangs appeal, on its face, appears to be impressed unjustified and unlawful termination of his employment by
with merit. The constitutional mandate to accord full respondents CCBP and Taguibao. (ERWIN H. REYES v.
protection to labor and to safeguard the employees means of NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551,
livelihood should be given proper attention and sanction. A February 10, 2009)
greater injustice may occur if said appeal is not given due Considering that Atty. Go successfully represented his client, it
course than if the reglementary period to appeal were strictly is only proper that he should receive adequate compensation
followed. In this case, we are inclined to excuse the one day for his efforts. Even as we agree with the reduction of the
delay in order to fully settle the merits of the case. This is in award of attorneys fees by the CA, the fact that a lawyer
line with our policy to encourage full adjudication of the plays a vital role in the administration of justice emphasizes
merits of an appeal. (REPUBLIC CEMENT CORPORATION v. the need to secure to him his honorarium lawfully earned as a
PETER I. GUINMAPANG, G.R. No. 168910, August 24, 2009) means to preserve the decorum and respectability of the legal
Appeal Bond profession. A lawyer is as much entitled to judicial protection
At the time of the filing of the surety bond by PJI on January 2, against injustice or imposition of fraud on the part of his client
2003, PPAC was still an accredited bonding company. Thus, it as the client is against abuse on the part of his counsel. The
was but proper to honor the appeal bond issued by a bonding duty of the court is not alone to ensure that a lawyer acts in a
company duly accredited by this Court at the time of its proper and lawful manner, but also to see that a lawyer is
issuance. The subsequent revocation of the authority of a paid his just fees. With his capital consisting of his brains and
bonding company should not prejudice parties who relied on with his skill acquired at tremendous cost not only in money
its authority. The revocation of authority of a bonding but in expenditure of time and energy, he is entitled to the
company is prospective in application. (CESARIO L. DEL protection of any judicial tribunal against any attempt on the
ROSARIO v. PHILIPPINE JOURNALISTS, INC., G.R. No. 181516, part of his client to escape payment of his just compensation.
August 19, 2009) It would be ironic if after putting forth the best in him to
While the bond may be reduced upon motion by the secure justice for his client, he himself would not get his due.
employer, this is subject to the conditions that (1) the motion (EVANGELINA MASMUD (as substitute complainant for
to reduce the bond shall be based on meritorious grounds; ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS
and (2) a reasonable amount in relation to the monetary COMMISSION, G.R. No. 183385, February 13, 2009)
award is posted by the appellant, otherwise the filing of the Moreover, in cases for recovery of wages, the award of
motion to reduce bond shall not stop the running of the period attorneys fees is proper and there need not be any showing
to perfect an appeal. The qualification effectively requires that that the employer acted maliciously or in bad faith when it
unless the NLRC grants the reduction of the cash bond within withheld the wages. There need only be a showing that the
the 10 day reglementary period, the employer is still expected lawful wages were not paid accordingly. (BARON REPUBLIC
to post the cash or surety bond securing the full amount THEATRICAL V. NORMITA P. PERALTA et al, G.R. No. 170525,
within the said 10-day period. If the NLRC does eventually October 2, 2009)
grant the motion for reduction after the reglementary period In the case at bar, we find that the flight attendants were
has elapsed, the correct relief would be to reduce the cash or represented by respondent union which, in turn, engaged the
surety bond already posted by the employer within the 10-day services of its own counsel. The flight attendants had a
period. (ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGI- common cause of action. While the work performed by
MANAGERS,INC. and E. GANZON, INC. G.R. Nos. 178034 & respondents counsel was by no means simple, seeing as it
178117, G.R. Nos. 186984-85, September 18, 2009) spanned the whole litigation from the Labor Arbiter stage all
In addition, while the bond requirement on appeals involving a the way to this Court, nevertheless, the issues involved in this
monetary award has been relaxed in certain cases, this can case are simple, and the legal strategies, theories and
only be done where there was substantial compliance with the arguments advanced were common for all the affected crew
Rules; or where the appellants, at the very least, exhibited members. Hence, it may not be reasonable to award said
willingness to pay by posting a partial bond. ( LOLITA A. counsel an amount equivalent to 10% of all monetary awards
LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. to be received by each individual flight attendant. Based on
164032, January 19, 2009) the length of time that this case has been litigated, however,
The decisions, awards or orders of the Labor Arbiter are final we find that the amount of P2,000,000.00 is reasonable as
and executory unless appealed to the NLRC by any parties attorneys fees. This amount should include all expenses of
within ten (10) calendar days from receipt thereof, with proof litigation that were incurred by respondent union. (FLIGHT
of payment of the required appeal fee accompanied by a ATTENDANTS AND STEWARDS ASSOCIATION OF THE
memorandum of appeal. And where, as here, the judgment PHILIPPINES (FASAP), v. PHILIPPINE AIRLINES, INC.,PATRIA
involves monetary award, an appeal therefrom by the CHIONG and COURT OF APPEALS,G.R. No. 178083, October 2,
employer may be perfected only upon the posting of a cash 2009)
or surety bond. A mere notice of appeal without complying The claim for attorneys fees is granted following Article 2208
with the other requisites mentioned does not stop the running of the New Civil Code which allows its recovery in actions for
of the period for perfecting an appeal as in fact no motion for recovery of wages of laborers and actions for indemnity under
extension of said period is allowed. (WALLEM MARITIME the employers liability laws. The same fees are also
SERVICES, INC. and SCANDIC SHIPMANAGEMENT LIMITED v. recoverable when the defendants act or omission has
ERIBERTO S. BULTRON, G.R. No. 185261, October 2, 2009) compelled the plaintiff to incur expenses to protect his
The purpose of an appeal bond is to ensure, during the period interest as in the present case following the refusal by
of appeal, against any occurrence that would defeat or respondent to settle his claims. Pursuant to prevailing
diminish recovery by the aggrieved employees under the jurisprudence, petitioner is entitled to attorneys fees of ten
judgment if subsequently affirmed. The Deed of Assignment in percent (10%) of the monetary award. (LEOPOLDO ABANTE v.
the instant case, like a cash or surety bond, serves the same KJGS FLEET MANAGEMENT MANILA G.R. No. 182430,
purpose. First, the Deed of Assignment constitutes not just a December 4, 2009)
partial amount, but rather the entire award in the appealed Backwages
Order. Second, it is clear from the Deed of Assignment that One of the natural consequences of a finding that an
the entire amount is under the full control of the bank, and employee has been illegally dismissed is the payment of
not of petitioner, and is in fact payable to the DOLE Regional backwages corresponding to the period from his dismissal up
Office, to be withdrawn by the same office after it had issued to actual reinstatement. The statutory intent of this matter is
a writ of execution. For all intents and purposes, the Deed of clearly discernible. The payment of backwages allows the
 22

employee to recover from the employer that which he has lost employee failed to report for work or had been absent without
by way of wages as a result of his dismissal. Logically, it must valid or justifiable reason; and (2) that there must have been
be computed from the date of petitioners illegal dismissal up a clear intention to sever the employer-employee relationship
to the time of actual reinstatement. There can be no gap or as manifested by some overt acts. Clearly, jurisprudence
interruption, lest we defeat the very reason of the law in dictates that the burden of proof to show that there was
granting the same. That petitioner did not immediately file his unjustified refusal to go back to work rests on the employer.
Complaint should not affect or diminish his right to (TACLOBAN FAR EAST MARKETING CORPORATION and
backwages, for it is a right clearly granted to him by law FRANCISCO Y. ROMUALDEZ v. THE COURT OF APPEALS,
should he be found to have been illegally dismissed and for NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320,
as long as his cause of action has not been barred by September 11, 2009)
prescription. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS Cause of Action
COMMISSION, G.R. No. 180551, February 10, 2009) The Secretary of Labor and Employment dismissed the first
He never bothered to redeem his license at the soonest petition as it was filed outside the 60-day freedom period. At
possible time when there was no showing that he was that time therefore, the union has no cause of action since
unlawfully prevented by respondent from doing so. Thus, they are not yet legally allowed to challenge openly and
petitioner should not be paid for the time he was not working. formally the status of SMCGC-SUPER as the exclusive
The Court has held that where the failure of employees to bargaining representative of the bargaining unit. Such
work was not due to the employers fault, the burden of dismissal, however, has no bearing in the instant case since
economic loss suffered by the employees should not be the third petition for certification election was filed well within
shifted to the employer. Each party must bear his own loss. It the 60-day freedom period. Otherwise stated, there is no
would be unfair to allow petitioner to recover something he identity of causes of action to speak of since in the first
has not earned and could not have earned, since he could not petition, the union has no cause of action while in the third, a
discharge his work as a driver without his drivers license. cause of action already exists for the union as they are now
Respondent should be exempted from the burden of paying legally allowed to challenge the status of SMCGC-SUPER as
backwages. (BERNARDINO V. NAVARRO v. P.V. PAJARILLO exclusive bargaining representative. (CHRIS GARMENTS
LINER, INC., G.R. No. 164681, April 24, 2009) CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS
Burden of Proof GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER No.
In termination cases, the employer bears the burden of 832, G.R. No. 167426, January 12, 2009)
proving that the dismissal of the employee is for a just or an Circumvention of the Law
authorized cause. Failure to dispose of the burden would imply Notably, private respondents purported employment with
that the dismissal is not lawful, and that the employee is MANRED commenced only in 1996, way after she was hired
entitled to reinstatement, back wages and accruing benefits. by the petitioner as extra beverage attendant on April 24,
Moreover, dismissed employees are not required to prove 1995. There is thus much credence in the private
their innocence of the employers accusations against them. respondents claim that the service agreement executed
(SAN MIGUEL CORPORATION vs. NATIONAL LABOR RELATIONS between the petitioner and MANRED is a mere ploy to
COMMISSION AND WILLIAM L. FRIEND, JR., G.R. No. 153983, circumvent the law on employment, in particular that which
May 26, 2009) pertains on regularization. (MARANAW HOTELS AND RESORT
As a general rule, one who pleads payment has the burden of CORP vs COURT OF APPEALS, SHERYL OABEL AND MANILA
proving it. Even where the employee must allege RESOURCE DEVELOPMENT CORP., G.R. No. 149660, January
nonpayment, the general rule is that the burden rests on the 20, 2009)
employer to prove payment, rather than on the employee to Collective Bargaining Agreement (CBA)
prove nonpayment. The reason for the rule is that the If the terms of a CBA are clear and have no doubt upon the
pertinent personnel files, payrolls, records, remittances and intention of the contracting parties, as in the herein
other similar documents which will show that overtime, questioned provision, the literal meaning thereof shall prevail.
differentials, service incentive leave and other claims of That is settled. As such, the daily-paid employees must be
workers have been paid are not in the possession of the paid their regular salaries on the holidays which are so
employee but in the custody and absolute control of the declared by the national government, regardless of whether
employer. Since in the case at bar petitioner company has not they fall on rest days.
shown any proof of payment of the correct amount of salary, Holiday pay is a legislated benefit enacted as part of the
holiday pay and 13th month pay, we affirm the award of Constitutional imperative that the State shall afford protection
Madriagas monetary claims. (MANTLE TRADING SERVICES, to labor. Its purpose is not merely to prevent diminution of
INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL the monthly income of the workers on account of work
LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA,G.R. interruptions. In other words, although the worker is forced to
No. 166705,July 28,2009) take a rest, he earns what he should earn, that is, his holiday
Respecting the issue of illegal dismissal, the Court appreciates pay. (Emphasis and underscoring supplied) (RFM
no evidence that petitioner was dismissed. What it finds is CORPORATION-FLOUR DIVISION and SFI FEEDS DIVISION v.
that petitioner unilaterally stopped reporting for work before KASAPIAN NG MANGGA-GAWANG PINAGKAISA-RFM (KAMPI-
filing a complaint for illegal dismissal, based on his belief that NAFLU-KMU) and SANDIGAN AT UGNAYAN NG
Guillermo and Bergonia had spread rumors that his MANGGAGAWANG PINAGKAISA-SFI (SUMAPI-NAFLU-KMU), G.R.
transactions on behalf of BAYER would no longer be honored No. 162324, February 4, 2009)
as of April 30, 2002. This belief remains just that it is Company Policy
unsubstantiated. While in cases of illegal dismissal, the As respondents creditably explained, and as admitted by
employer bears the burden of proving that the dismissal is for petitioner herself, respondents have standing policies that an
a valid or authorized cause, the employee must first establish employee must be single at the time of employment and must
by substantial evidence the fact of dismissal. (RAMY GALLEGO be willing to be assigned to any of its branches in the country.
v. BAYER PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT Petitioners contention that upon getting married, she no
IMAGE MARKETING, INC., and EDGARDO BERGONIA, G.R. No. longer bound herself to be assigned to any of respondents
179807, July 31, 2009) branches in the country is preposterous. Just because an
The burden of proving the validity of retrenchment is on the employee gets married does not mean she can already
petitioner. Evidence does not sufficiently establish that renege on a commitment she willingly made at the time of her
petitioner had incurred losses that would justify retrenchment employment particularly if such commitment does not appear
to prevent further losses. The Comparative Income Statement to be unreasonable, inconvenient, or prejudicial to her.
for the year 1996 and for the months of February to June 1997 Respondents claimed that travel time from the Bacolod City
which petitioner submitted did not conclusively show that Branch to the Iloilo City Branch will only take about an hour by
petitioner had suffered financial losses. In fact, records show boat and that they were even willing to defray petitioners
that from January to July 1997, petitioner hired a total of 114 transportation and lodging expenses. Petitioner never
new employees assigned in the petitioners stores located in disputed these matters. There is no showing either that
the different places of the country. (EMCOR INCORPORATED v. petitioners transfer was only being used by respondents to
MA. LOURDES D. SIENES, G.R. No. 152101, September 8, camouflage a sinister scheme of management to rid itself of
2009) an undesirable worker in the person of petitioner. (AILEEN G.
It is well-settled that in termination cases, the burden of proof HERIDA v. F & C PAWNSHOP and JEWELRY STORE/MARCELINO
rests upon the employer to show that the dismissal was for a FLORETE, JR., G.R. No. 172601, April 16, 2009)
just and valid cause and failure to discharge the same would Computation of Award
mean that the dismissal is not justified and therefore illegal. Finally, on the increase in the computation of the monetary
Hence, in arguing that Sabulao abandoned his work, it is award to respondents, the decision of the Labor Arbiter
incumbent upon the petitioners to prove: (1) that the specified that for purposes of putting up a bond should
 23

petitioner appeal, the backwages were computed only for a a contract of employment is impressed with public interest
certain period. Otherwise, the actual backwages to be paid to such that labor contracts must yield to the common good.
respondents are computed from the date of dismissal until the Provisions of applicable statutes are deemed written into the
finality of the decision. In addition, because petitioner contract, and the parties are not at liberty to insulate
continues to refuse and accord regular status to respondents themselves and their relationships from the impact of labor
and to pay them their corresponding wages even after the laws and regulations by simply contracting with each other.
lapse of two (2) years from the finality of the Labor Arbiters (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R.
decision, the Labor Arbiter correctly included that in its order No. 163033, October 2, 2009)
of execution. Thus, the Labor Arbiters order of execution Corporate Rehabilitation
simply covered the correct computation of wages and other Given these premises, it is not difficult to understand why
payments enjoyed by petitioners regular employees. actions for claims against the ailing enterprise have to be
(PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. suspended. It then becomes easy to accept the hypothesis
RIZALINA RAUT, LEILA EMNACE and GINA CAPISTRANO, G.R. that the date when the claim arose, or when the action is
No. 174209, August 25, 2009) filed, is of no moment. As long as the corporation is under a
This Court notes that the NLRC awarded backwages, 13th management committee or a rehabilitation receiver, all
month pay, and service incentive leave pay from July 10, 2005 actions for claims against it for money or otherwise must
to January 23, 2007 only. It is evident that these should not be yield to the greater imperative of corporate rehabilitation,
limited to said period. These should be computed from the excepting only, as already mentioned, claims for payment of
date of her illegal dismissal until this decision attains finality. obligations incurred by the corporation in the ordinary course
Though Bolanos did not appeal the computation of the NLRCs of business. Enforcement of writs of execution issued by
award as affirmed by the Court of Appeals, we are not barred judicial or quasi-judicial tribunals, since such writs emanate
from ordering its modification. This Court is imbued with from actions for claims, must, likewise, be suspended.
sufficient authority and discretion to review matters, not (MALAYAN INSURANCE COMPANY, INC. v. VICTORIAS MILLING
otherwise assigned as errors on appeal, if it finds that their COMPANY, INC., G.R. No. 167768, April 17, 2009)
consideration is necessary in arriving at a complete and just Damages
resolution of the case or to serve the interests of justice or to Petitioners reliance on Viernes v. National Labor Relations
avoid dispensing piecemeal justice. Besides, substantive Commission to support its claim for the reduction of the award
rights like the award of backwages, 13th month pay and of nominal damages is misplaced. The factual circumstances
service incentive leave pay resulting from illegal dismissal are different. Viernes is an illegal dismissal case, since there
must not be prejudiced by a rigid and technical application of was no authorized cause for the dismissal of the employees;
the rules. The computation of the award for backwages and and the employer was ordered to pay backwages inclusive of
other benefits from the time the compensation was withheld allowances and other benefits, computed from the time the
up to the time of actual reinstatement is a mere legal compensation was withheld up to the actual reinstatement. In
consequence of the finding that respondent was illegally addition, since the dismissal was done without due process,
dismissed by petitioners. (HENLIN PANAY COMPANY v. the nominal damages awarded was only P2,590.00 equivalent
NATIONAL LABOR RELATIONS COMMISSION , G.R. No. 180718, to one-month salary of the employee. In this case, the
October 23, 2009) dismissal was valid, as it was due to an authorized cause, but
Conclusiveness of Judgment without the observance of procedural due process, and the
Third. The matter of employer-employee relationship has been only award given was nominal damages. (CELEBES JAPAN
resolved with finality by the Secretary of Labor and FOODS CORPORATION V. SUSAN YERMO G.R. No. 175855
Employment in the Resolution dated December 27, 2002. October 2, 2009)
Since petitioner did not appeal this factual finding, then, it In previous cases where moral damages and attorneys fees
may be considered as the final resolution of such issue. To were awarded, the manner of termination was done in a
reiterate, conclusiveness of judgment has the effect of humiliating and insulting manner, such as in the case of
preclusion of issues. (CHRIS GARMENTS CORPORATION vs Balayan Colleges v. National Labor Relations Commission
HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS where the employer posted copies of its letters of termination
WORKERS UNION-PTGWO LOCAL CHAPTER No. 832, G.R. No. to the teachers inside the school campus and it also furnished
167426, January 12, 2009) copies to the town mayor and Parish Priest of their community
Contingent Fee for the purpose of maligning the teachers reputation. So also
Contingent fee contracts are subject to the supervision and in the case of Chiang Kai Shek School v. Court of Appeals, this
close scrutiny of the court in order that clients may be Court awarded moral damages to a teacher who was flatly,
protected from unjust charges. The amount of contingent fees and without warning or a formal notice, told that she was
agreed upon by the parties is subject to the stipulation that dismissed. (M+W ZANDER PHILIPPINES, INC. and ROLF
counsel will be paid for his legal services only if the suit or WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June
litigation prospers. A much higher compensation is allowed as 5, 2009)
contingent fees because of the risk that the lawyer may get Disability Benefits
nothing if the suit fails. The Court finds nothing illegal in the Under paragraph 20.1.5 of the parties CBA, it is stipulated
contingent fee contract between Atty. Go and Evangelinas that [a] seafarer whose disability is assessed at 50% or more
husband. The CA committed no error of law when it awarded under the POEA Employment Contract shall x x x be regarded
the attorneys fees of Atty. Go and allowed him to receive an as permanently unfit for further sea service in any capacity
equivalent of 39% of the monetary award. (EVANGELINA and entitled to 100% compensation, i.e., x x x US$60,000.00
MASMUD (as substitute complainant for ALEXANDER J. for ratings. Petitioners disability rating being 68.66%, he is
MASMUD) v. NATIONAL LABOR RELATIONS COMMISSION, G.R. entitled to a 100% disability compensation of US$60,000, as
No. 183385, February 13, 2009) correctly found by the Labor Arbiter and the NLRC. So
Contract of Adhesion Philimare, Inc./Marlow Navigation Co., Ltd. v. Suganob,
In addition, the employment agreement may be likened into a enlightens, thus:
contract of adhesion considering that it is petitioner who Apropos the appropriate disability benefits that respondent is
insists that there existed an express period of one year from entitled to, we find that Suganob is entitled to Grade 1
April 1, 2002 to March 31, 2003, using as proof its own copy of disability benefits which corresponds to total and permanent
the agreement. While contracts of adhesion are valid and disability. . .
binding, in cases of doubt which will cause a great imbalance x x x To be entitled to Grade 1 disability benefits, the
of rights against one of the parties, the contract shall be employees disability must not only be total but also
construed against the party who drafted the same. Hence, in permanent.
this case, where the very employment of respondent is at Permanent disability is the inability of a worker to perform his
stake, the doubt as to the period of employment must be job for more than 120 days, regardless of whether or not he
construed in her favor. (MAGIS YOUNG ACHIEVERS LEARNING loses the use of any of his body. Clearly, Suganobs disability
CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, is permanent since he was unable to work from the time he
G.R. No. 178835, February 13, 2009) was medically repatriated on September 17, 2001 up to the
Contract of Employment time the complaint was filed on April 25, 2002, or more than 7
Since respondent was already a regular employee months months. Moreover, if in fact Suganob is clear and fit to work
before the execution of the Employment with a Fixed Period on October 29, 2001, he would have been taken back by
contract, its execution was merely a ploy on SMCs part to petitioners to continue his work as a Chief Cook, but he was
deprive respondent of his tenurial security. Hence, no valid not. His disability is undoubtedly permanent.
fixed-term contract was executed. The employment status of Total disability, on the other hand, does not mean absolute
a person is defined and prescribed by law and not by what the helplessness. In disability compensation, it is not the injury
parties say it should be. Equally important to consider is that which is compensated, but rather the incapacity to work
 24

resulting in the impairment of ones earning capacity. Total the circumstances indicated above. (ODILON L. MARTINEZ v.
disability does not require that the employee be absolutely B&B FISH BROKER/NORBERTO M. LUCINARIO, G.R. No. 179985,
disabled, or totally paralyzed. What is necessary is that the September 18, 2009)
injury must be such that the employee cannot pursue his Time and again we have ruled that in constructive dismissal
usual work and earn therefrom. Both the company-designated cases, the employer has the burden of proving that the
physician and Suganobs physician found that Suganob is unfit transfer of an employee is for just and valid grounds, such as
to continue his duties as a Chief Cook since his illness genuine business necessity. The employer must demonstrate
prevented him from continuing his duties as such. Due to his that the transfer is not unreasonable, inconvenient, or
illness, he can no longer perform work which is part of his prejudicial to the employee and that the transfer does not
daily routine as Chief Cook like lifting heavy loads of frozen involve a demotion in rank or a diminution of salary and other
meat, fish, water, etc. when preparing meals for the crew benefits. If the employer fails to overcome this burden of
members. Hence, Suganobs disability is also total. (Emphasis proof, the employees transfer is tantamount to unlawful
supplied) (JOELSON O. ILORETA v. PHILIPPINE TRANSMARINE constructive dismissal. (MERCK SHARP AND DOHME
CARRIERS, INC., G.R. NO. 183908, December 4, 2009) (PHILIPPINES) v. JONAR P. ROBLES, et al., G.R. No. 176506,
As with all other kinds of worker, the terms and conditions of a November 25, 2009)
seafarers employment is governed by the provisions of the These discriminatory acts were calculated to make petitioner
contract he signs at the time he is hired. But unlike that of feel that he is no longer welcome nor needed in respondent
others, deemed written in the seafarers contract is a set of company short of sending him an actual notice of
standard provisions set and implemented by the POEA, called termination. We, therefore, hold that respondent
the Standard Terms and Conditions Governing the constructively dismissed petitioner from the service. (RAMON
Employment of Filipino Seafarers on Board Ocean-Going B. FORMANTES v. DUNCAN PHARMACEUTICALS, PHILS., INC.,
Vessels, which are considered to be the minimum G.R. No. 170661, December 4, 2009)
requirements acceptable to the government for the In the present case, the petitioners ceased verbally
employment of Filipino seafarers on board foreign ocean-going communicating with the respondent and giving him work
vessels. Thus, the issue of whether petitioner Nisda can assignment after suspecting that he had forged purchase
legally demand and claim disability benefits from respondents receipts. Under this situation, the respondent was forced to
Sea Serve and ADAMS for an illness suffered is best addressed leave the petitioners compound with his family and to
by the provisions of his POEA-SEC, which incorporated the transfer to a nearby place. Thus, the respondents act of
Standard Terms and Conditions Governing the Employment of leaving the petitioners premises was in reality not his choice
Filipino Seafarers on Board Ocean-Going Vessels. When but a situation the petitioners created. (CRC AGRICULTURAL
petitioner Nisda was employed on 7 August 2001, it was the TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR
2000 Amended Standard Terms and Conditions Governing the RELATIONS COMMISSION, G.R. No. 177664, December 23,
Employment of Filipino Seafarers on Board Ocean-Going 2009)
Vessels (hereinafter referred to simply as Amended Standard Dismissal of Managerial Employees
Terms and Conditions for brevity) that applied and were In view of the lack of proper investigation into the charges
deemed written in or appended to his POEA-SEC. (CARLOS N. against respondent, petitioners failed to show that they have
NISDA v. SEA SERVE MARITIME AGENCY and KHALIFA A. a just cause for terminating his employment. Respondents
ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, alleged infractions amount to nothing more than bare
July 23, 2009) accusations and unilateral conclusions that do not provide
Given a seafarers entitlement to permanent disability legal justification for his termination from employment.
benefits when he is unable to work for more than 120 days, Although petitioners have wider latitude of discretion in
the failure of the company-designated physician to pronounce terminating respondent, who was a managerial employee, it is
petitioner fit to work within the 120-day period entitles him to nonetheless settled that confidential and managerial
permanent total disability benefit in the amount of employees cannot be arbitrarily dismissed at any time, and
US$60,000.00. (LEOPOLDO ABANTE v. KJGS FLEET without cause as reasonably established in an appropriate
MANAGEMENT MANILA G.R. No. 182430, December 4, 2009) investigation. Such employees, too, are entitled to security of
Dismissal tenure, fair standards of employment and the protection of
In the present case, we significantly note that petitioner, after labor laws. Managerial employees, no less than rank-and-file
filing her explanation in response to the employers July 1, laborers are entitled to due process. (CASA CEBUANA
1997 memo, never asked for any clarificatory hearing during INCORPORADA and ANGELA FIGUEROA PAULIN v. IRENEO P.
the plant-level proceedings. She also had ample opportunity LEUTERIO, G.R. No. 176040, September 4, 2009)
to explain her side vis--vis the principal charge against her Dismissal due to Union Security Clauses
her involvement in the incident of June 30, 1997 . It is a Nonetheless, while We uphold dismissal pursuant to a union
matter of record that the petitioner lost no time in submitting security clause, the same is not without a condition or
the required explanation, as she submitted it on the very restriction. For to allow its untrammeled enforcement would
same day that the memo was served on her. The explanation, encourage arbitrary dismissal and abuse by the employer, to
in Filipino, narrated among others the indifferent and the detriment of the employees. Thus, to safeguard the rights
discriminatory treatment she had been receiving from the of the employees, We have said time and again that
group of Nilo Echavez, which she also told her husband who dismissals pursuant to union security clauses are valid and
got mad. Taken together with the testimonies of other legal, subject only to the requirement of due process, that is,
witnesses who gave their statements on how the petitioner notice and hearing prior to dismissal. In like manner, We
encouraged her husband to attack Echavez (all of which were emphasized that the enforcement of union security clauses is
duly and seasonably disclosed), the petitioner cannot claim authorized by law, provided such enforcement is not
that the respondent company did not give her ample characterized by arbitrariness, and always with due process.
opportunity to be heard. All told, we are convinced that the (Herminigildo Inguillo and Zenaida Bergante v. First Philippine
respondent company acted based on a valid cause for Scales, Inc. and/or Amparo Policarpio, Manager, G.R. No.
dismissal and observed the required procedures in so acting. 165407, June 5, 2009)
(ROSARIO A. GATUS v. QUALITY HOUSE, INC. and Dismissal of Union Officer
CHRISTOPHER CHUA, G.R. No. 156766, April 16, 2009) Note that the verb participates is preceded by the adverb
Constructive Dismissal knowingly. This reflects the intent of the legislature to
Case law holds that constructive dismissal occurs when there require knowledge as a condition sine qua non before a
is cessation of work because continued employment is union officer can be dismissed from employment for
rendered impossible, unreasonable or unlikely; when there is a participating in an illegal strike. The provision is worded in
demotion in rank or diminution in pay or both; or when a clear such a way as to make it very difficult for employers to
discrimination, insensibility, or disdain by an employer circumvent the law by arbitrarily dismissing employees in the
becomes unbearable to the employee. Respondents sudden, guise of exercising management prerogative. This is but one
arbitrary and unfounded adoption of the two-day work aspect of the States constitutional and statutory mandate to
scheme which greatly reduced petitioners salaries renders it protect the rights of employees to self-organization. (CLUB
liable for constructive dismissal. (FE LA ROSA et. al., v. FILIPINO, INC. and ATTY. ROBERTO F. DE LEON v. benjamin
AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009) bautista, et. al., G.R. No. 168406, July 13, 2009)
What thus surfaces is that petitioner was constructively Illegal Dismissal
dismissed. No actual dismissal might have occurred in the With the finding that Interserve was engaged in prohibited
sense that petitioner was not served with a notice of labor-only contracting, petitioner shall be deemed the true
termination, but there was constructive dismissal, petitioner employer of respondents. As regular employees of petitioner,
having been placed in a position where continued respondents cannot be dismissed except for just or authorized
employment was rendered impossible and unreasonable by causes, none of which were alleged or proven to exist in this
 25

case, the only defense of petitioner against the charge of Anent petitioners claim regarding respondents failure to pay
illegal dismissal being that respondents were not its the full amount of docket fees at the time of the filing of the
employees. Records also failed to show that petitioner petition with the CA, we find that it is estopped from
afforded respondents the twin requirements of procedural due questioning the jurisdiction of the CA on this ground, because
process, i.e., notice and hearing, prior to their dismissal. such issue had never been raised in any of the pleadings filed
Respondents were not served notices informing them of the before the CA. Notably, the CA issued a minute resolution
particular acts for which their dismissal was sought. Nor were dated June 7, 1999 requiring respondent to remit the amount
they required to give their side regarding the charges made of P510.00 to complete the docket and other fees. Respondent
against them. Certainly, the respondents dismissal was not complied, but due to inadvertence, the amount remitted
carried out in accordance with law and, therefore, illegal. lacked the amount of P10.00, thus, the CA in a Resolution
(COCA-COLA BOTTLERS PHILS., INC v. ALAN M. AGITO, et al., dated November 22, 1999, considered the appeal abandoned
G.R. No. 179546, February 13, 2009) pursuant to Section 1(c), Rule 50 of the 1997 Rules of Court.
As the employer, petitioner has the burden of proving that the Upon respondents motion for reconsideration, the appeal was
dismissal of petitioner was for a cause allowed under the law reinstated on February 22, 2000. Petitioner was copy-
and that petitioner was afforded procedural due process. furnished all the resolutions issued by the CA, but petitioner
Petitioner failed to discharge this burden. Indeed, it failed to never raised the issue of incomplete payment of docket fees.
show any valid or authorized cause under the Labor Code In fact, such issue was only raised for the first time in its Reply
which allowed it to terminate the services of individual filed with us. (EMCOR INCORPORATED v. MA. LOURDES D.
respondents. Neither did petitioner show that individual SIENES, G.R. No. 152101, September 8, 2009)
respondents were given ample opportunity to contest the Doctrine of Strained Relationship
legality of their dismissal. No notice of such impending To protect the employees security of tenure, the Court has
termination was ever given to them. Individual respondents emphasized that the doctrine of strained relations should be
were definitely denied due process. Having failed to establish strictly applied so as not to deprive an illegally dismissed
compliance with the requirements on termination of employee of his right to reinstatement. Every labor dispute
employment under the Labor Code, the dismissal of individual almost always results in strained relations, and the phrase
respondents was tainted with illegality. (ILIGAN CEMENT cannot be given an overarching interpretation; otherwise, an
CORPORATION v. ILIASCOR EMPLOYEES AND WORKERS UNION unjustly dismissed employee can never be reinstated. The
SOUTHERN PHILIPPINES FEDERATION OF LABOR (IEWU- assumption of strained relations was already debunked by the
SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No. fact that as early as March 2006 petitioner returned to work
158956, April 24, 2009) for respondent CCBP, without any antagonism having been
In this case, we find no overt act on the part of petitioner that reported thus far by any of the parties. Neither can we sustain
he was ready to sever his employment ties. The alleged the NLRCs conclusion that petitioners position is confidential
resignation was actually premised by respondents only on the in nature. Receipt of proceeds from sales of respondent
filing of the complaint for separation pay, but this alone is not CCBPs products does not make petitioner a confidential
sufficient proof that petitioner intended to resign from the employee. A confidential employee is one who (1) assists or
company. What strongly negates the claim of resignation is acts in a confidential capacity, in regard to (2) persons who
the fact that petitioner filed the amended complaint for illegal formulate, determine, and effectuate management policies
dismissal immediately after he was not allowed to report for specifically in the field of labor relations. Verily, petitioners
work on June 3, 2000. Resignation is inconsistent with the job as a salesman does not fall under this qualification.
filing of the complaint for illegal dismissal. It would have been (ERWIN H. REYES v. NATIONAL LABOR RELATIONS
illogical for petitioner to resign and then file a complaint for COMMISSION, G.R. No. 180551, February 10, 2009)
illegal dismissal later on. If petitioner was determined to In the present case, reinstatement is no longer feasible
resign, as respondents posited, he would not have because of the strained relations between the petitioners and
commenced the action for illegal dismissal. Undeniably, the respondent. Time and again, this Court has recognized
petitioner was unceremoniously dismissed in this case. that strained relations between the employer and employee is
(BALTAZAR L. PAYNO v. ORIZON TRADING CORP. / ORATA an exception to the rule requiring actual reinstatement for
TRADING and FLORDELIZA LEGASPI, G.R. No. 175345, August illegally dismissed employees for the practical reason that the
19, 2009) already existing antagonism will only fester and deteriorate,
Therefore, this Court finds no reason to disturb its finding that and will only worsen with possible adverse effects on the
the retrenchment of the flight attendants was illegally parties, if we shall compel reinstatement; thus, the use of a
executed. As held in the Decision sought to be reconsidered, viable substitute that protects the interests of both parties
PAL failed to observe the procedure and requirements for a while ensuring that the law is respected. (CRC AGRICULTURAL
valid retrenchment. Assuming that PAL was indeed suffering TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR
financial losses, the requisite proof therefor was not presented RELATIONS COMMISSION, G.R. No. 177664, December 23,
before the NLRC which was the proper forum. More 2009)
importantly, the manner of the retrenchment was not in In conclusion, it bears to stress that it is human nature that
accordance with the procedure required by law. Hence, the some hostility will inevitably arise between parties as a result
retrenchment of the flight attendants amounted to illegal of litigation, but the same does not always constitute strained
dismissal. Consequently, the flight attendants affected are relations in the absence of proof or explanation that such
entitled to the reliefs provided by law, which include indeed exists. (REYNALDO G. CABIGTING v. SAN MIGUEL
backwages and reinstatement or separation pay, as the case FOODS, INC, G.R. No. 167706, November 5, 2009)
may be. (FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION Downsizing Scheme
OF THE PHILIPPINES (FASAP), v. PHILIPPINE AIRLINES, This, in turn, gives rise to another question: Does the
INC.,PATRIA CHIONG and COURT OF APPEALS,G.R. No. 178083, implementation of the downsizing scheme preclude petitioner
October 2, 2009) from availing the services of contractual and agency-hired
Clearly, Bolanoss case is one of illegal dismissal. First, there is employees?
no just or authorized cause for petitioners to terminate her In Asian Alcohol Corporation v. National Labor Relations
employment. Her alleged act of dishonesty of passing out Commission, we answered in the negative. We said:
food for free was not proven. Neither was there incompetence In any event, we have held that an employers good faith in
on her part when some food items were not punched in the implementing a redundancy program is not necessarily
cash register as she was not the cashier manning it when the destroyed by availment of the services of an independent
food items were ordered. In fact, the other cashier even contractor to replace the services of the terminated
owned up to said mistake. Second, Bolanos was not afforded employees. We have previously ruled that the reduction of the
due process by petitioners before she was dismissed. A day number of workers in a company made necessary by the
after the incident, she was verbally dismissed from her introduction of the services of an independent contractor is
employment without being given the chance to be heard and justified when the latter is undertaken in order to effectuate
defend herself. (HENLIN PANAY COMPANY v. NATIONAL LABOR more economic and efficient methods of production. In the
RELATIONS COMMISSION , G.R. No. 180718, October 23, 2009) case at bar, private respondent failed to proffer any proof that
In fine, as petitioners failed to indubitably prove that the management acted in a malicious or arbitrary manner in
respondents were guilty of drug use in contravention of its engaging the services of an independent contractor to
drug-free workplace policy amounting to serious misconduct, operate the Laura wells. Absent such proof, the Court has no
respondents are deemed to have been illegally dismissed. basis to interfere with the bona fide decision of management
(PLANTATION BAY RESORT and SPA v. ROMEL S. DUBRICO, et to effect more economic and efficient methods of production.
al., G.R. No. 182216, December 4, 2009) With petitioners downsizing scheme being valid, and the
Docket Fees availment of contractual and agency-hired employees legal,
the strike staged by officers and members of respondent
 26

Union is, perforce, illegal. (HOTEL ENTERPRISES OF THE further held that the penalty should be in the nature of
PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. indemnification, in the form of nominal damages and should
SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION depend on the facts of each case, taking into special
OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED consideration the gravity of the due process violation of the
INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, employer. The amount of such damages is addressed to the
2009) sound discretion of the court, considering the relevant
Due Process circumstances. Thus, in Agabon, the Court ordered the
It is well settled that the basic requirement of notice and employer to pay the employee nominal damages in the
hearing in termination cases is for the employer to inform the amount of P30,000.00. (MANTLE TRADING SERVICES,
employee of the specific charges against him and to hear his INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL
side and defenses. This does not, however, mean a full LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA,G.R.
adversarial proceeding. The parties may be heard through No. 166705,July 28,2009)
pleadings, written explanations, position papers, Had Metros cause for terminating Aman rested on a just or
memorandum or oral argument. In all of these instances, the authorized cause yet failed to observe procedural
employer plays an active role by providing the employee with requirements, then Metro will only be liable for nominal
the opportunity to present his side and answer the charges in damages worth P30,000. However, such is not the case here.
substantial compliance with due process.( ROMEO N. We hold that Amans dismissal not only failed to observe
VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR procedural requirements, it also lacked an authorized cause.
RELATIONS COMMISSION, GENUINO ICE CO., INC., and Article 279 of the Labor Code mandates that the employee
HECTOR GENUINO, G.R. No. 182570, January 27, 2009) who is illegally dismissed and not given due process is entitled
In the dismissal of employees, it has been consistently held to reinstatement without loss of seniority rights and other
that the twin requirements of notice and hearing are essential privileges and full backwages, inclusive of allowances, and
elements of due process. Article 277 (b) of the Labor Code other benefits or their monetary equivalent computed from
and Section 2, Rule XXIII, Book V of the Rules Implementing the time the compensation was not paid up to the time of
the Labor Code require the employer to furnish the employee actual reinstatement. (METRO CONSTRUCTION, INC. V.
with two written notices, to wit: (1) a written notice served on ROGELIO AMAN, G.R. No. 168324, October 12, 2009)
the employee specifying the ground or grounds for In the present case, Jose, Jr. was not given any written notice
termination, and giving to said employee reasonable about his dismissal. However, the propriety of Jose, Jr.s
opportunity within which to explain his side; and (2) a written dismissal is not affected by the lack of written notices. When
notice of termination served on the employee indicating that the dismissal is for just cause, the lack of due process does
upon due consideration of all the circumstances, grounds not render the dismissal ineffectual but merely gives rise to
have been established to justify his termination. The first the payment of P30,000 in nominal damages. (BERNARDO B.
notice which may be considered as the proper charge, serves JOSE, JR. v. MICHAELMAR PHILS., INC., G.R. No. 169606,
to apprise the employee of the particular acts or omissions for November 27, 2009)
which his dismissal is sought. The second notice on the other In cases of abandonment of work, the ground alleged by
hand seeks to inform the employee of the employers decision respondents, notice shall be served at the workers last known
to dismiss him. With regard to the requirement of a hearing, it address. Here, no such notice was served to petitioner. Hence,
should be stressed that the essence of due process lies simply for breach of the due process requirements, respondents shall
in an opportunity to be heard, and not that an actual hearing also be liable in the amount of P30,000 as indemnity in the
should always and indispensably be held. (PHILIPPINE PASAY form of nominal damages. (CONCEPCION FAELDONIA v. TONG
CHUNG HUA ACADEMY and EMILIO CHING v. SERVANDO L. YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499,
EDPAN, G.R. No. 168876, SERVANDO L. EDPAN v. PHILIPPINE October 2, 2009)
PASAY CHUNG HUA ACADEMY and EMILIO CHING) The petitioners clearly failed to comply with the two-notice
Nonetheless, Section 2(d), Rule I of the Implementing Rules of requirement. Nothing in the records shows that the petitioners
Book VI of the Labor Code should not be taken to mean that ever sent the respondent a written notice informing him of the
holding an actual hearing or conference is a condition sine ground for which his dismissal was sought. It does not also
qua non for compliance with the due process requirement in appear that the petitioners held a hearing where the
termination of employment. The test for the fair procedure respondent was given the opportunity to answer the charges
guaranteed under Article 277(b) cannot be whether there has of abandonment. Neither did the petitioners send a written
been a formal pretermination confrontation between the notice to the respondent informing the latter that his service
employer and the employee. The ample opportunity to be had been terminated and the reasons for the termination of
heard standard is neither synonymous nor similar to a formal employment. Under these facts, the respondents dismissal
hearing. To confine the employees right to be heard to a was illegal. (CRC AGRICULTURAL TRADING and ROLANDO B.
solitary form narrows down that right. It deprives him of other CATINDIG v. NATIONAL LABOR RELATIONS COMMISSION, G.R.
equally effective forms of adducing evidence in his defense. No. 177664, December 23, 2009)
Certainly, such an exclusivist and absolutist interpretation is Employer-Employee Relationship
overly restrictive. The very nature of due process negates In order to determine the existence of an employer-employee
any concept of inflexible procedures universally applicable to relationship, the Court has frequently applied the four-fold
every imaginable situation. (FELIX B. PEREZ and AMANTE G. test: (1) the selection and engagement of the employee; (2)
DORIA vs. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY the payment of wages; (3) the power of dismissal; and (4) the
and JOSE LUIS SANTIAGO, G.R. No. 152048, April 7, 2009) power to control the employees conduct, or the so called
Also, to effectively dismiss an employee for abandonment, the control test, which is considered the most important
employer must comply with the due process requirement of element. From the time they were hired by petitioner
sending notices to the employee. In Brahm Industries, Inc. v. corporation up to the time that they were reassigned to work
NLRC, we ruled that this requirement is not a mere formality under Gamos supervision, their status as petitioner
that may be dispensed with at will. Its disregard is a matter of corporations employees did not cease. Likewise, payment of
serious concern since it constitutes a safeguard of the highest their wages was merely coursed through Gamo. As to the
order in response to mans innate sense of justice. Petitioner most determinative testthe power of control, it is sufficient
was not able to send the necessary notice requirement to that the power to control the manner of doing the work exists,
Eleonor. Petitioners belated claim that it was not able to send it does not require the actual exercise of such power. In this
the notice of infraction prior to the filing of the illegal case, it was in the exercise of its power of control when
dismissal case cannot simply unacceptable. Based on the petitioner corporation transferred the copra workers from their
foregoing, Eleonor did not abandon her work. (SOUTH DAVAO previous assignments to work as copraceros. It was also in the
DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL exercise of the same power that petitioner corporation put
CORPORATION) AND/OR MALONE PACQUIAO AND VICTOR A. Gamo in charge of the copra workers although under a
CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, different payment scheme. Thus, it is clear that an employer-
2009) employee relationship has existed between petitioner
The case of Agabon v. NLRC, et al. applies to the case at bar. corporation and respondents since the beginning and such
In Agabon, the dismissal was found by the Court to be based relationship did not cease despite their reassignments and the
on a just cause because the employee abandoned his work. change of payment scheme. (SOUTH DAVAO DEVELOPMENT
But it also found that the employer did not follow the notice COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION)
requirement demanded by due process. It ruled that this AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v.
violation of due process on the part of the employer did not SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009)
nullify the dismissal, or render it illegal, or ineffectual. What is more, respondent PDMC enrolled petitioner Gomez
Nonetheless, the employer was ordered to indemnify the with the Social Security System, the Medicare, and the Pag-
employee for the violation of his right to due process. It Ibig Fund. It even issued certifications dated October 10,
 27

2008, stating that Gomez was a permanent employee and own fault. (MA. WENELITA S. TIRAZONA, vs. PHILIPPINE EDS
that the company had remitted combined contributions during TECHNO- SERVICE INC. (PET INC.) AND/OR KEN KUBOTA,
her tenure. The company also made her a member of the MAMORU ONO and JUNICHI HIROSE, G.R. No. 169712, January
PDMCs savings and provident plan and its retirement plan. It 20, 2009)
grouped her with the managers covered by the companys Estoppel
group hospitalization insurance. Likewise, she underwent Estoppel, an equitable principle rooted on natural justice,
regular employee performance appraisals, purchased stocks prevents a person from rejecting his previous acts and
through the employee stock option plan, and was entitled to representations to the prejudice of others who have relied on
vacation and emergency leaves. PDMC even withheld taxes on them. This principle of law applies to corporations as well. The
her salary and declared her as an employee in the official PDMC in this case is estopped from claiming that despite all
Bureau of Internal Revenue forms. These are all indicia of an the appearances of regular employment that it weaved
employer-employee relationship which respondent PDMC around petitioner Gomezs position it must have technically
failed to refute. (GLORIA V. GOMEZ v. PNOC DEVELOPMENT hired her only as a corporate officer. The board and its officers
AND MANAGEMENT CORPORATION, G.R. No. 174044, made her stay on and work with the company for years under
November 27, 2009) the belief that she held a regular managerial position.
Control Test (GLORIA V. GOMEZ v. PNOC DEVELOPMENT AND
In the case at bench, both the Labor Arbiter and the NLRC MANAGEMENT CORPORATION, G.R. No. 174044, November 27,
were one in their conclusion that respondents were not 2009)
independent contractors, but employees of petitioner. In Evidence
determining the existence of an employer-employee It may be true that the NBI agents affidavit did not directly
relationship between the parties, both the Labor Arbiter and implicate petitioners in the scheme. However, their co-
the NLRC examined and weighed the circumstances against employees Gimena, Welsh and Derupe, who had personal
the four-fold test which has the following elements: (1) the knowledge of petitioners activities, narrated in their affidavits
power to hire, (2) the payment of wages, (3) the power to the nature, dates and time of their (petitioners) participation.
dismiss, and (4) the power to control the employees conduct, Petitioners did not refute these sworn statements. Neither did
or the so-called control test. Of the four, the power of they explain why their former colleagues would unjustly and
control is the most important element. More importantly, the falsely testify against them even if they had the opportunity
control test merely calls for the existence of the right to to defend themselves during the administrative investigations
control, and not necessarily the exercise thereof. (DEALCO conducted by respondent. These pieces of evidence, when
FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION taken together, constituted substantial evidence to prove
(5th DIVISION), G.R. No. 153192 January 30, 2009) petitioners culpability. It is of no moment that they were
In this regard, it has not escaped the notice of the Court that acquitted in the criminal case. Petitioners infractions were
the operations of the hotel itself do not cease with the end of willful and serious, thus their dismissal was proper under the
each event or function and that there is an ever present need circumstances. (RENITA DEL ROSARIO, et al., v. MAKATI
for individuals to perform certain tasks necessary in the CINEMA SQUARE CORPORATION, G.R. No. 170014, July 3,
petitioners business. Thus, although the tasks themselves 2009)
may vary, the need for sufficient manpower to carry them out It is common practice for companies to provide identification
does not. In any event, as borne out by the findings of the cards to individuals not only as a security measure, but more
NLRC, the petitioner determines the nature of the tasks to be importantly to identify the bearers thereof as bona fide
performed by the private respondent, in the process employees of the firm or institution that issued them. The
exercising control. (MARANAW HOTELS AND RESORT CORP vs provision of company-issued identification cards and uniforms
COURT OF APPEALS, SHERYL OABEL AND MANILA RESOURCE to respondents, aside from their inclusion in MCIs summary
DEVELOPMENT CORP., G.R. No. 149660, January 20, 2009) payroll, indubitably constitutes substantial evidence sufficient
Contrary to petitioners contention, the various office to support only one conclusion: that respondents were indeed
directives issued by Shangri-las officers do not imply that it is employees of MCI. (MASONIC CONTRACTOR, INC. v.
Shangri-las management and not respondent doctor who MAGDALENA MADJOS , et al., G.R. No. 185094, November 25,
exercises control over them or that Shangri-la has control over 2009)
how the doctor and the nurses perform their work. The letter Proof of Mailing
addressed to respondent doctor dated February 7, 2003 from In this case and in like manner, while a postmasters
a certain Tata L. Reyes giving instructions regarding the certification is usually sufficient proof of mailing, its
replenishment of emergency kits is, at most, administrative in evidentiary value must be differentiated from the situation
nature, related as it is to safety matters; while the letter dated presently before us where the postmasters certification is
May 17, 2004 from Shangri-las Assistant Financial Controller, intended to prove that the post office had committed a
Lotlot Dagat, forbidding the clinic from receiving cash mistake in placing the date of receipt on the registry return
payments from the resorts guests is a matter of financial card. In other words, the Postmasters certification is offered
policy in order to ensure proper sharing of the proceeds, to overcome the presumption that the Malate Post Office
considering that Shangri-la and respondent doctor share in regularly performed its official duties when the registry return
the guests payments for medical services rendered. In fine, card was filled up by the recipient of the labor arbiters
as Shangri-la does not control how the work should be decision with November 21, 1999 as the date of receipt. We
performed by petitioners, it is not petitioners employer. find it significant that both the petitioner and the postmasters
(JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. SHANGRI- certification failed to show that the Malate Post Office
LAS MACTAN ISLAND RESORT and DR. JESSICA J.R. PEPITO, committed an inadvertence in handling the registry return
G.R. No. 178827, March 4, 2009) card so that a corrective certification from the Postmaster was
To reiterate, while respondent and SSCP no longer had any necessary. In the absence of such justification for the
legal relationship with the termination of the Agreement, certification, we are compelled to deny it of any evidentiary
petitioners remained at their post securing the premises of value for the purpose it was submitted. (EUREKA PERSONNEL
respondent while receiving their salaries, allegedly from SSCP. & MANAGEMENT SERVICES, INC. v. EDUARDO VALENCIA, G.R.
Clearly, such a situation makes no sense, and the denials No. 159358, July 15, 2009)
proffered by respondent do not shed any light to the situation. Execution
It is but reasonable to conclude that, with the behest and, We would like to stress the settled rule that the power of the
presumably, directive of respondent, petitioners continued court in executing judgments extends only to properties
with their services. Evidently, such are indicia of control that unquestionably belonging to the judgment debtor alone. To be
respondent exercised over petitioners. (RAUL G. LOCSIN and sure, one mans goods shall not be sold for another mans
EDDIE B. TOMAQUIN v. PHILIPPINE LONG DISTANCE debts. A sheriff is not authorized to attach or levy on property
TELEPHONE COMPANY, G.R. No. 185251, October 2, 2009) not belonging to the judgment debtor, and even incurs liability
Equity if he wrongfully levies upon the property of a third person.
While the Court commiserates with the plight of Tirazona, who (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and
has recently manifested that she has since been suffering PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION
from her poor health condition, the Court cannot grant her (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION
plea for the award of financial benefits based solely on this (NLRC), G.R. No. 170689, G.R. No. 170705)
unfortunate circumstance. For all its conceded merit, equity is Finality of Factual Findings
available only in the absence of law and not as its The well-entrenched rule is that factual findings of
replacement. Equity as an exceptional extenuating administrative or quasi-judicial bodies, which are deemed to
circumstance does not favor, nor may it be used to reward, have acquired expertise in matters within their respective
the indolent or the wrongdoer, for that matter. This Court will jurisdictions, are generally accorded not only respect but even
not allow a party, in the guise of equity, to benefit from its finality, and bind the Court when supported by substantial
 28

evidence. Section 5, Rule 133 defines substantial evidence as dismissal of the petition. In the case before us, there being
that amount of relevant evidence which a reasonable mind two petitioners NCTEA and Mr. Gumarang both of them
might accept as adequate to justify a conclusion. (DEALCO should sign the certificate against forum shopping. Since
FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION there was only one signatory, the requirement on the filing of
(5th DIVISION), G.R. No. 153192 January 30, 2009) the certificate against forum shopping has not been complied
Lastly, in its assailed decision, the CA affirmed the ruling of with. As in the Court of Appeals, Mr. Gumarang failed to show
the NLRC and adopted as its own the latters factual findings. why the duly authorized representative of the NCTEA was
Long-established is the doctrine that findings of fact of quasi- unable to sign the certification, and to convince this Court
judicial bodies like the NLRC are accorded respect, even that the outright dismissal of the petition would defeat the
finality, if supported by substantial evidence. When passed administration of justice. (NORTHEASTERN COLLEGE
upon and upheld by the CA, they are binding and conclusive TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN
upon the Supreme Court and will not normally be disturbed. COLLEGE, INC., G.R. No. 152923, January 19, 2009)
Though this doctrine is not without exceptions, the Court finds Fuentebella and Rolling Hills Memorial Park v. Castro, on the
that none are applicable to the present case. ROMEO N. requirement of a certification against forum shopping,
VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR explains:
RELATIONS COMMISSION, GENUINO ICE CO., INC., and The reason for this is that the principal party has actual
HECTOR GENUINO, G.R. No. 182570, January 27, 2009) knowledge whether a petition has previously been filed
Exception involving the same case or substantially the same issues. If,
The appellate court predicated its reversal of the NLRC for any reason, the principal party cannot sign the petition,
decision that petitioners were illegally dismissed on the one signing on his behalf must have been duly authorized.
petitioners supposed abandonment of their jobs, and justified . . . Where the petitioner is a corporation, the certification
the work rotation/reduction scheme adopted by respondent as against forum shopping should be signed by its duly
a valid exercise of management prerogative in light of authorized director or representative [I]f the real party-in-
respondents business losses. (FE LA ROSA et. al., v. interest is a corporate body, an officer of the corporation can
AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009) sign the certification against forum shopping as long as he is
The issue of the reasonableness of attorneys fees is a authorized by a resolution of its board of directors.
question of fact. Well-settled is the rule that conclusions and xxxx
findings of fact of the CA are entitled to great weight on A certification without the proper authorization is defective
appeal and will not be disturbed except for strong and cogent and constitutes a valid cause for the dismissal of the petition.
reasons which are absent in the case at bench. The findings of (Citations omitted; emphasis, italics and underscoring
the CA, which are supported by substantial evidence, are supplied)
almost beyond the power of review by the Supreme Court. Petitioners discourse on relaxation of technical rules of
(EVANGELINA MASMUD (as substitute complainant for procedure in the interest of substantial justice does not
ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS impress. While there have been instances when the Court
COMMISSION, G.R. No. 183385, February 13, 2009) dispensed with technicalities on the basis of special
Petitioners argument that the CA erred and abused its circumstances or compelling reasons, there is no such
discretion in reversing the findings of the Labor Arbiter and circumstance or reason in the present case which warrants
the NLRC, as it is the courts policy of non-interference in the the liberal application of technical rules. (EAGLE STAR
exercise of the adjudicatory functions of the administrative SECURITY SERVICES, INC. v. BONIFACIO L. MIRANDO, G.R. No.
bodies, is devoid of merit. We agree with petitioner that 179512, July 30, 2009)
factual findings of quasi-judicial and administrative bodies are Grave Abuse of Discretion
accorded great respect and even finality by the courts. The Regional Director fully relied on the self-serving
However, this rule is not absolute. When there is a showing allegations of respondent and misinterpreted the documents
that the factual findings of administrative bodies were arrived presented as evidence by respondent. To make matters worse,
at arbitrarily or in disregard of the evidence on record, they DOLE denied petitioners appeal based solely on petitioners
may be examined by the courts. The CA can grant the petition alleged failure to file a cash or surety bond, without any
for certiorari if it finds that the NLRC, in its assailed decision or discussion on the merits of the case. Since the petition for
resolution, made a factual finding not supported by certiorari before the Court of Appeals sought the reversal of
substantial evidence. It is within the jurisdiction of the CA, the two aforesaid orders, the appellate court necessarily had
whose jurisdiction over labor cases has been expanded to to examine the evidence anew to determine whether the
review the findings of the NLRC. In R & E Transport, Inc. v. conclusions of the DOLE were supported by the evidence
Latag, we held: presented. It appears, however, that the Court of Appeals did
The power of the CA to review NLRC decisions via a Rule 65 not even review the assailed orders and focused instead on a
petition is now a settled issue. As early as St. Martin Funeral general discussion of due process and the jurisdiction of the
Homes v. NLRC, we have definitively ruled that the proper Regional Director. Had the appellate court truly reviewed the
remedy to ask for the review of a decision of the NLRC is a records of the case, it would have seen that there existed
special civil action for certiorari under Rule 65 of the Rules of valid and sufficient grounds for finding grave abuse of
Court, and that such petition should be filed with the CA in discretion on the part of the DOLE Secretary as well the
strict observance of the doctrine on the hierarchy of courts. Regional Director. In ruling and acting as it did, the Court finds
Moreover, it has already been explained that under Section 9 that the Court of Appeals may be properly subjected to its
of Batas Pambansa (BP) 129, as amended by Republic Act certiorari jurisdiction. After all, this Court has previously ruled
7902, the CA pursuant to the exercise of its original that the extraordinary writ of certiorari will lie if it is
jurisdiction over petitions for certiorari was specifically given satisfactorily established that the tribunal had acted
the power to pass upon the evidence, if and when necessary, capriciously and whimsically in total disregard of evidence
to resolve factual issues.(EMCOR INCORPORATED v. MA. material to or even decisive of the controversy. (PEOPLES
LOURDES D. SIENES, G.R. No. 152101, September 8, 2009) BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE
Forum Shopping SECRETARY OF THE DEPARTMENT OF LABOR AND
On the part of Mr. Gumarang, knowing fully well that he was EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII,
no longer the representative of the NCTEA, why did he not and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009)
inform both the Court of Appeals and the Supreme Court of Hearing
such fact when he filed the petitions? Instead, he claimed to A hearing means that a party should be given a chance to
be the duly authorized representative of the NCTEA which he adduce his evidence to support his side of the case and that
was not. His omission and misrepresentation are clear the evidence should be taken into account in the adjudication
indications of bad faith of which this Court does not approve. of the controversy. To be heard does not mean verbal
He should have known that by including NCTEA as petitioner argumentation alone inasmuch as one may be heard just as
and signing as its representative, he should have had the effectively through written explanations, submissions or
authority to do so. This, he did not possess. When he alone pleadings. Therefore, while the phrase ample opportunity to
signed on his behalf and that of the NCTEA, not once but be heard may in fact include an actual hearing, it is not
twice, he flagrantly violated the rule on the filing of a limited to a formal hearing only. In other words, the existence
certificate of non-forum shopping. (NORTHEASTERN COLLEGE of an actual, formal trial-type hearing, although preferred, is
TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN not absolutely necessary to satisfy the employees right to be
COLLEGE, INC., G.R. No. 152923, January 19, 2009) heard. (FELIX B. PEREZ and AMANTE G. DORIA vs. PHILIPPINE
Without the required authority from the NCTEA, Mr. Gumarang TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS
cannot represent the NCTEA. As explained above, if there are SANTIAGO, G.R. No. 152048, April 7, 2009)
several petitioners, the failure of one to sign the certificate of Dialogue not Tantamount to Hearing
non-forum shopping is a deficiency which is a ground for the
 29

Policarpios allegations are self-serving. Except for her claim he filed any written explanation to any of these notices. His
as stated in the respondents Position Paper, nowhere from continued failure to carry out the reasonable oral or written
the records can We find that Bergante and Inguillo were instructions of his supervisor is punishable by insubordination,
accorded the opportunity to present evidence in support of which is provided under Rule IV.5.a of the Operational
their defenses. Policarpio relied heavily on the Petisyon of Instruction OI-A-AP25, Work Rules. While petitioner cannot be
FPSILU. She failed to convince Us that during the dialogue, she faulted in believing that respondent constructively dismissed
was able to ascertain the validity of the charges mentioned in him from work, he was still, strictly speaking, respondents
the Petisyon. In her futile attempt to prove compliance with employee when he received the written notices. As an
the procedural requirement, she reiterated that the objective employee, he should have at least responded thereto, as
of the dialogue was to provide the employees the instructed. (RAMON B. FORMANTES v. DUNCAN
opportunity to receive the act of grace of FPSI by giving them PHARMACEUTICALS, PHILS., INC., G.R. No. 170661, December
an amount equivalent to one-half () month of their salary for 4, 2009)
every year of service. We are not convinced. We cannot even Interpretation of Doubt
consider the demand and counter-offer for the payment of the We reject petitioners self-serving contention. Having failed to
employees as an amicable settlement between the parties substantiate its allegation on the relationship between the
because what took place was merely a discussion only of the parties, we stick to the settled rule in controversies between a
amount which the employees are willing to accept and the laborer and his master that doubts reasonably arising from
amount which the respondents are willing to give. Such non- the evidence should be resolved in the formers favor. The
compliance is also corroborated by Bergante and Inguillo in policy is reflected in no less than the Constitution, Labor Code
their pleadings denouncing their unjustified dismissal. In fine, and Civil Code. (DEALCO FARMS, INC., vs. NATIONAL LABOR
We hold that the dialogue is not tantamount to the hearing or RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192
conference prescribed by law. (Herminigildo Inguillo and January 30, 2009)
Zenaida Bergante v. First Philippine Scales, Inc. and/or Amparo The relations between capital and labor are so impressed with
Policarpio, Manager, G.R. No. 165407, June 5, 2009 public interest, and neither shall act oppressively against the
Inchoate Right other, or impair the interest or convenience of the public. In
Again, the contention is bereft of merit. While PNB has an case of doubt, all labor legislation and all labor contracts shall
apparent interest in Mega Primes assets being the creditor of be construed in favor of the safety and decent living for the
the latter for a substantial amount, its interest remains laborer. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO
inchoate and has not yet ripened into a present substantial and MILA CUARESMA (for and in behalf oftheir daughter,
interest, which would give it the standing to maintain an Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and
action involving the subject properties. As aptly observed by JAIME ORTIZ (President,White Falcon Services, Inc.) AND
the Labor Arbiter, PNB only has an inchoate right to the PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99,
properties of Mega Prime in case the latter would not be able April 7, 2009)
to pay its indebtedness. This is especially true in the instant Job contracting or Subcontracting
case, as the debt being claimed by PNB is secured by the Permissible job contracting or subcontracting refers to an
accessory contract of pledge of the entire stockholdings of arrangement whereby a principal agrees to farm out with a
Mega Prime to PNB-Madecor. (PANTRANCO EMPLOYEES contractor or subcontractor the performance of a specific job,
ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED work, or service within a definite or predetermined period,
EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR regardless of whether such job, work or, service is to be
RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. performed or completed within or outside the premises of the
170705) principal. Under this arrangement, the following conditions
Independent Contractor must be met: (a) the contractor carries on a distinct and
The existence of an independent and permissible contractor independent business and undertakes the contract work on
relationship is generally established by considering the his account under his own responsibility according to his own
following determinants: whether the contractor is carrying on manner and method, free from the control and direction of his
an independent business; the nature and extent of the work; employer or principal in all matters connected with the
the skill required; the term and duration of the relationship; performance of his work except as to the results thereof; (b)
the right to assign the performance of a specified piece of the contractor has substantial capital or investment; and (c)
work; the control and supervision of the work to another; the the agreement between the principal and contractor or
employers power with respect to the hiring, firing and subcontractor assures the contractual employees entitlement
payment of the contractors workers; the control of the to all labor and occupational safety and health standards, free
premises; the duty to supply the premises, tools, appliances, exercise of the right to self-organization, security of tenure,
materials and labor; and the mode, manner and terms of and social welfare benefits. (RAMY GALLEGO v. BAYER
payment. (JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT IMAGE
SHANGRI-LAS MARKETING, INC., and EDGARDO BERGONIA, G.R. No. 179807,
In sum, there existed no employer-employee relationship July 31, 2009)
between the parties. De Raedt is an independent contractor, Joint Venture
who was engaged by SGV to render services to SGVs client To the Court, the Contract between the Cooperative and DFI,
TMI, and ultimately to DA on the CECAP project, regarding far from being a job contracting arrangement, is in essence a
matters in the field of her special knowledge and training for a business partnership that partakes of the nature of a joint
specific period of time. Unlike an ordinary employee, De Raedt venture. The rules on job contracting are, therefore,
received retainer fees and benefits such as housing and inapposite. The Court may not alter the intention of the
subsistence allowances and medical insurance. De Raedts contracting parties as gleaned from their stipulations without
services could be terminated on the ground of end of contract violating the autonomy of contracts principle under Article
between the DA and TMI, and not on grounds under labor 1306 of the Civil Code which gives the contracting parties the
laws. Though the end of the contract between the DA and TMI utmost liberality and freedom to establish such stipulations,
was not the ground for the withdrawal of De Raedt from the clauses, terms and conditions as they may deem convenient,
CECAP, De Raedt was disengaged from the project upon the provided they are not contrary to law, morals, good custom,
instruction of SGVs client, TMI. Most important of all, SGV did public order or public policy. (OLDARICO S. TRAVEO, et al v.
not exercise control over the means and methods by which De BOBONGON BANANA GROWERS MULTI-PURPOSE
Raedt performed her duties as Sociologist. SGV did impose COOPERATIVE, TIMOG AGRICULTURAL CORPORATION,
rules on De Raedt, but these were necessary to ensure SGVs DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No.
faithful compliance with the terms and conditions of the Sub- 164205, September 3, 2009)
Consultancy Agreement it entered into with TMI. (SYCIP, Judgment
GORRES, VELAYO & COMPANY, v. CAROL DE RAEDT, G.R. No. We disfavor delay in the enforcement of the labor arbiters
161366, June 16, 2009) decision. Once a judgment becomes final and executory, the
Insubordination prevailing party should not be denied the fruits of his victory
Aside from the findings of sexual abuse, petitioner is also by some subterfuge devised by the losing party. Final and
guilty of insubordination. Records show that after filing a case executory judgments can neither be amended nor altered
for constructive dismissal on April 13, 1994 against the except for correction of clerical errors, even if the purpose is
respondent, petitioner continued working and performing his to correct erroneous conclusions of fact or of law. Trial and
functions with the respondent company until his termination execution proceedings constitute one whole action or suit
on May 19, 1994. However, despite receipt of the various such that a case in which execution has been issued is
notices sent by respondent to him to report to the office and regarded as still pending so that all proceedings in the
to submit written explanations relative to his failure to follow execution are proceedings in the suit. (C-E CONSTRUCTION
instructions, the records of the case are bereft of showing that
 30

CORPORATION v. NATIONAL LABOR RELATIONS, G.R. No. principal. Here, Vedali is the labor-only contractor; individual
180188, March 25, 2009) respondents are the employees and petitioner is the principal.
Jurisdiction The law makes the principal responsible to the employees of
It is a settled rule that jurisdiction over the subject matter is the labor-only contractor as if the principal itself directly
conferred by law. The determination of the rights of a director hired or employed the employees. (ILIGAN CEMENT
and corporate officer dismissed from his employment as well CORPORATION v. ILIASCOR EMPLOYEES AND WORKERS UNION
as the corresponding liability of a corporation, if any, is an SOUTHERN PHILIPPINES FEDERATION OF LABOR (IEWU-
intra-corporate dispute subject to the jurisdiction of the SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No.
regular courts. Thus, the appellate court correctly ruled that it 158956, April 24, 2009)
is not the NLRC but the regular courts which have jurisdiction Length of Service
over the present case. (LESLIE OKOL v. SLIMMERS WORLD Although his nearly two decades of service might generally be
INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., G.R. No. considered for some form of financial assistance to shield him
160146, December 11, 2009) from the effects of his termination, Tomadas acts reflect a
In sum, when the labor arbiter proceeded with the regrettable lack of concern for his employer. If length of
consolidated cases despite the SEC suspension order, he service justifies the mitigation of the penalty of dismissal,
exceeded his jurisdiction to hear and decide illegal dismissal then this Court would be awarding disloyalty, distorting in the
cases and the CA correctly reversed his June 16, 2004 order. process the meaning of social justice and undermining the
(GINA M. TIANGCO, et al, v. UNIWIDE SALES WAREHOUSE efforts of labor to cleanse its ranks of undesirables.
CLUB, INC., G.R. No. 168697, December 14, 2009) (EDUARDO M. TOMADA, SR. v. RFM CORPORATION-BAKERY
Intra-Corporate Dispute FLOUR DIVISION and JOSE MARIA CONCEPCION III, G.R. No.
Atty. Garcia tries to deny he is an officer of ETPI. Not being a 163270, September 11, 2009)
corporate officer, he argues that the Labor Arbiter has Liability of Corporate Officers
jurisdiction over the case. One of the corporate officers However, Article 212(e) of the Labor Code, by itself, does not
provided for in the by-laws of ETPI is the Vice-President. It can make a corporate officer personally liable for the debts of the
be gathered from Atty. Garcias complaint-affidavit that he corporation because Section 31 of the Corporation Code is still
was Vice President for Business Support Services and Human the governing law on personal liability of officers for the debts
Resource Departments of ETPI when his employment was of the corporation. Section 31 of the Corporation Code
terminated effective 16 April 2000 . It is therefore clear from provides:
the by-laws and from Atty. Garcia himself that he is a Liability of directors, trustees or officers. Directors or
corporate officer. One who is included in the by-laws of a trustees who willfully and knowingly vote for or assent to
corporation in its roster of corporate officers is an officer of patently unlawful acts of the corporation or who are guilty of
said corporation and not a mere employee. Being a corporate gross negligence or bad faith in directing the affairs of the
officer, his removal is deemed to be an intra-corporate dispute corporation or acquire any personal or pecuniary interest in
cognizable by the SEC and not by the Labor Arbiter. (ATTY. conflict with their duty as such directors, or trustees shall be
VIRGILIO R. GARCIA v. EASTERN TELECOMMUNICATIONS liable jointly and severally for all damages resulting therefrom
PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON, G.R. No. suffered by the corporation, its stockholders or members and
173115, EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. other persons. x x x
and ATTY. SALVADOR C. HIZON v. ATTY. VIRGILIO R. GARCIA, There was no showing of David willingly and knowingly voting
G.R. Nos. 173163-64, April 16, 2009) for or assenting to patently unlawful acts of the corporation,
Demarcation line Between DOLEs Prerogative or that David was guilty of gross negligence or bad faith.
and NLRCs Jurisdiction (ARMANDO DAVID v. NATIONAL FEDERATION OF LABOR UNION
It can be assumed that the DOLE in the exercise of its and MARIVELES APPAREL CORPORATION, G.R. Nos. 148263
visitorial and enforcement power somehow has to make a and 148271-72, April 21, 2009)
determination of the existence of an employer-employee Liability of General Manager
relationship. Such prerogatival determination, however, Lastly, we come to the issue of whether Wiltschek, as the
cannot be coextensive with the visitorial and enforcement General Manager, should be personally liable together with
power itself. Indeed, such determination is merely preliminary, M+W Zander. We agree with petitioners that he should not be
incidental and collateral to the DOLEs primary function of made personally liable. The general manager of a corporation
enforcing labor standards provisions. The determination of the should not be made personally answerable for the payment of
existence of employer-employee relationship is still primarily an illegally dismissed employees monetary claims arising
lodged with the NLRC. This is the meaning of the clause in from the dismissal unless he had acted maliciously or in bad
cases where the relationship of employer-employee still faith in terminating the services of the employee. The
exists in Art. 128(b). (PEOPLES BROADCASTING(BOMBO employer corporation has a separate and distinct personality
RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT from its officers who merely act as its agents. (M+W ZANDER
OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, PHILIPPINES, INC. and ROLF WILTSCHEK v. TRINIDAD M.
DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, ENRIQUEZ, G.R. No. 169173, June 5, 2009)
May 8, 2009) Liability of Recruitment Agencies and Foreign-Based Employer
In sum, respondent contested the findings of the labor Private employment agencies are held jointly and severally
inspector during and after the inspection and raised issues the liable with the foreign-based employer for any violation of the
resolution of which necessitated the examination of recruitment agreement or contract of employment. This joint
evidentiary matters not verifiable in the normal course of and solidary liability imposed by law against recruitment
inspection. Hence, the Regional Director was divested of agencies and foreign employers is meant to assure the
jurisdiction and should have endorsed the case to the aggrieved worker of immediate and sufficient payment of
appropriate Arbitration Branch of the NLRC. Considering, what is due him. If the recruitment/placement agency is a
however, that an illegal dismissal case had been filed by juridical being, the corporate officers and directors and
petitioners wherein the existence or absence of an employer- partners as the case may be, shall themselves be jointly and
employee relationship was also raised, the CA correctly ruled solidarily liable with the corporation or partnership for the
that such endorsement was no longer necessary. (VICTOR aforesaid claims and damages. (BECMEN SERVICE EXPORTER
METEORO, et al v. CREATIVE CREATURES, INC., G.R. No. v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf
171275, July 13, 2009) oftheir daughter, Jasmin G. Cuaresma), WHITE FALCON
Labor-only Contractor SERVICES, INC. and JAIME ORTIZ (President,White Falcon
In sum, Interserve did not have substantial capital or Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79,
investment in the form of tools, equipment, machineries, and G.R. Nos. 184298-99, April 7, 2009)
work premises; and respondents, its supposed employees, Management Prerogative
performed work which was directly related to the principal As aptly cited by the CA:
business of petitioner. It is, thus, evident that Interserve falls The general rule is that the characterization by an employer
under the definition of a labor-only contractor, under Article of an employees services as no longer necessary or
106 of the Labor Code; as well as Section 5(i) of the Rules sustainable is an exercise of business judgment on the part of
Implementing Articles 106-109 of the Labor Code, as the employer. The wisdom or soundness of such a
amended. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. characterization or decision is not, as a general rule, subject
AGITO, et al., G.R. No. 179546, February 13, 2009) to discretionary review on the part of the Labor Arbiter, the
In a labor-only contract, there are three parties involved: (1) NLRC and the CA. Such characterization may, however, be
the labor-only contractor; (2) the employee who is rejected if the same is found to be in violation of the law or is
ostensibly under the employ of the labor-only contractor; arbitrary or malicious.
and (3) the principal who is deemed the real employer. Under We find no violations of law in the respondents actions
this scheme, the labor-only contractor is the agent of the against the petitioner, nor was the respondent arbitrary or
 31

influenced by malice in terminating the petitioners substantial justice. Labor cases must be decided according to
employment for redundancy. This ground for termination is a justice, equity, and the substantial merits of the controversy.
legitimate exercise of management prerogative unless In Azul v. Banco Filipino Savings and Mortgage Bank, the Court
attended to by arbitrariness or by the failure to follow held:
statutory requirements. No arbitrariness or any violations took The seriousness of petitioners infraction demanded the
place in the present case. (MIRIAM B. ELLECCION VDA. DE setting aside of strict rules of procedure as to allow the
LECCIONES v. NATIONAL LABOR RELATIONS COMMISSION, determination on the merits of whether he was lawfully
NNA PHILIPPINES CO., INC. and MS. KIMI KIMUR A, G.R. No. dismissed. As held by the Court, the application of technical
184735, September 17, 2009) rules of procedure may be relaxed to serve the demands of
Transfer substantial justice, particularly in labor cases, because they
In this case, we find no reason to disturb the conclusion of the must be decided according to justice and equity and the
Court of Appeals that there was no constructive dismissal. substantial merits of the controversy.
Reassignments made by management pending investigation There is substantial evidence showing that there was valid
of violations of company policies and procedures allegedly cause for the bank to dismiss petitioners employment for loss
committed by an employee fall within the ambit of of trust and confidence. Petitioner was a bank accountant,
management prerogative. The decision of Quantum Foods to which is a position of trust and confidence. The amount
transfer Endico pending investigation was a valid exercise of involved is significant, almost P4.5 million. (ESTER B. MARALIT
management prerogative to discipline its employees. The v. PHILIPPINE NATIONAL BANK, G.R. No. 163788, August 24,
transfer, while incidental to the charges against Endico, was 2009)
not meant as a penalty, but rather as a preventive measure to Notice of Change of Address
avoid further loss of sales and the destruction of Quantum PALs argument that its chaotic situation due to its
Foods image and goodwill. It was not designed to be the rehabilitation rendered the filing of a notice of change of
culmination of the then on-going administrative investigation address impractical does not merit consideration. Since
against Endico. (ARNULFO O. ENDICO vs. QUANTUM FOODS moving out from its office at Allied Bank Center, where the
DISTRIBUTION CENTER, G.R. No. 161615, January 30, 2009) NLRC decision was sent, PAL occupied four different office
ATIs transfer of Bismark IVs base from Manila to Bataan was, addresses. Yet these office addresses could be found in the
contrary to Aguanzas assertions, a valid exercise of same building, the PAL Center Building in Makati City. PAL
management prerogative. The transfer of employees has been merely moved from one floor to another. To our mind, it would
traditionally among the acts identified as a management have been more prudent had PAL informed the NLRC that it
prerogative subject only to limitations found in law, collective has moved from one floor to another rather than allowed its
bargaining agreement, and general principles of fair play and old address at Allied Bank Center to remain as its official
justice. Even as the law is solicitous of the welfare of address. To rule in favor of PAL considering the circumstances
employees, it must also protect the right of an employer to in the instant case would negate the purpose of the rules on
exercise what are clearly management prerogatives. The free completeness of service and the notice of change of address,
will of management to conduct its own business affairs to which is to place the date of receipt of pleadings, judgments
achieve its purpose cannot be denied. (GUALBERTO AGUANZA and processes beyond the power of the party being served to
v. ASIAN TERMINAL, INC., KEITH JAMES, RICHARD BARCLAY, determine at his pleasure. (PHILIPPINE AIRLINES, INC. v. HEIRS
and ATTY. RODOLFO CORVITE, G.R. No. 163505, August 14, OF BERNARDIN J. ZAMORA, G.R. No. 164267, G.R. No. 166996)
2009) Overseas Employment Contracts
Money Claims Respondents service award for the sixth contract is
An employee should be compensated for the work he has equivalent only to half-months pay plus the proportionate
rendered in accordance with the minimum wage, and must be amount for the additional nine days of service he rendered
appropriately remunerated when he was suffered to work on a after one year. Respondents employment contracts expressly
regular holiday during the time he was employed by the stated that his employment ended upon his departure from
petitioner company. As regards the 13th month pay, an work. Each year he departed from work and successively new
employee who was terminated at any time before the time for contracts were executed before he reported for work anew.
payment of the 13th month pay is entitled to this monetary His service was not cumulative. Pertinently, in Brent School,
benefit in proportion to the length of time he worked during Inc. v. Zamora, we said that a fixed term is an essential and
the year, reckoned from the time he started working during natural appurtenance of overseas employment contracts, as
the calendar year up to the time of his termination from the in this case. We also said in that case that under American
service. (MANTLE TRADING SERVICES, INCORPORATED law, [w]here a contract specifies the period of its duration, it
AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS terminates on the expiration of such period. A contract of
COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July employment for a definite period terminates by its own terms
28,2009) at the end of such period. As it is, Article 72 of the Saudi
Motion for Reconsideration Labor Law is also of similar import. It reads:
In this case, the Decision dated January 18, 2005 of the A labor contract concluded for a specified period shall
Secretary of Labor and Employment was received by terminate upon the expiry of its term. If both parties continue
petitioner on January 25, 2005. It would have become final to enforce the contract, thereafter, it shall be considered
and executory on February 4, 2005, the tenth day from renewed for an unspecified period. (LWV CONSTRUCTION
petitioners receipt of the decision. However, petitioner filed a CORPORATION v. MARCELO B. DUPO, G.R. No. 172342, July 13,
petition for certiorari with the Court of Appeals on even date. 2009
Clearly, petitioner availed of the proper remedy since In Placewell International Services Corporation v. Camote, we
Department Order No. 40-03 explicitly prohibits the filing of a held that the subsequently executed side agreement of an
motion for reconsideration. Such motion becomes dispensable overseas contract worker with the foreign employer is void,
and not at all necessary. (CHRIS GARMENTS CORPORATION vs simply because it is against our existing laws, morals and
HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS public policy. The subsequent agreement cannot supersede
WORKERS UNION-PTGWO LOCAL CHAPTER No. 832, G.R. No. the terms of the standard employment contract approved by
167426, January 12, 2009) the POEA. Republic Act No. 8042, commonly known as the
NLRC Rules of Procedure Migrant Workers Act of 1995, expressly prohibits the
Reinstatement Compliance Report substitution or alteration, to the prejudice of the worker, of
The new NLRC Rules of Procedure, which took effect on employment contracts already approved and verified by the
January 7, 2006, now require the employer to submit a report Department of Labor and Employment (DOLE) from the time
of compliance within 10 calendar days from receipt of the of the actual signing thereof by the parties up to and including
Labor Arbiters decision, disobedience to which clearly the period of the expiration of the same, without the approval
denotes a refusal to reinstate. The employee need not file a of DOLE. Since the second employment contract petitioner
motion for the issuance of the writ of execution since the Nisda signed with respondent ADAMS was void for not having
Labor Arbiter shall thereafter motu proprio issue the writ. With been sanctioned by the POEA, then petitioner Nisdas
the new rules in place, there is hardly any difficulty in employment with respondent ADAMS was still governed by his
determining the employers intransigence in immediately POEA-SEC until his repatriation to the Philippines on 17 July
complying with the order. (JUANITO A. GARCIA and ALBERTO J. 2002. (CARLOS N. NISDA v. SEA SERVE MARITIME AGENCY and
DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, KHALIFA A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R.
January 20, 2009) No. 179177, July 23, 2009)
Liberal Application of the Rules of Procedure Payment of Wages Pending Appeal
The Court is unimpressed. The gravity of Maralits infraction In other words, a dismissed employee whose case was
demands the relaxation of strict rules of procedure. Strict favorably decided by the Labor Arbiter is entitled to receive
rules of procedure may be set aside to serve the demands of wages pending appeal upon reinstatement, which is
 32

immediately executory. Unless there is a restraining order, it is which were inconsistent with it. There is no provision in the
ministerial upon the Labor Arbiter to implement the order of Civil Code of the Philippines, which is inconsistent with or
reinstatement and it is mandatory on the employer to comply contradictory to Section 48 of the Code of Civil Procedure
therewith. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. (Paras, Philippine Conflict of Laws, 104 [7th ed.]).
PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009) In the light of the 1987 Constitution, however, Section 48 [of
Prescriptive Period for Illegal Dismissal the Code of Civil Procedure] cannot be enforced ex proprio
The law fixes the period of time within which petitioner could vigore insofar as it ordains the application in this jurisdiction
seek remedy for his illegal dismissal and for as long as he filed of [Article] 156 of the Amiri Decree No. 23 of 1976.
his Complaint within the prescriptive period, he shall be The courts of the forum will not enforce any foreign claim
entitled to the full protection of his right to backwages. In obnoxious to the forums public policy x x x. To enforce the
illegal dismissal cases, the employee concerned is given a one-year prescriptive period of the Amiri Decree No. 23 of
period of four years from the time of his illegal dismissal 1976 as regards the claims in question would contravene the
within which to institute the complaint. This is based on Article public policy on the protection to labor.
1146 of the New Civil Code which states that actions based x x x x
upon an injury to the rights of the plaintiff must be brought Thus, in our considered view, respondents complaint was
within four years. The four-year prescriptive period shall filed well within the three-year prescriptive period under
commence to run only upon the accrual of a cause of action of Article 291 of our Labor Code. This point, however, has
the worker. Here, petitioner was dismissed from service on 15 already been mooted by our finding that respondents service
September 2001. He filed his complaint for illegal dismissal on award had been paid, albeit the payroll termed such payment
14 June 2004. Clearly, then, the instant case was filed within as severance pay. (LWV CONSTRUCTION CORPORATION v.
the prescriptive period. (ERWIN H. REYES v. NATIONAL LABOR MARCELO B. DUPO, G.R. No. 172342, July 13, 2009)
RELATIONS COMMISSION, G.R. No. 180551, February 10, Probationary Employee
2009) A probationary employee or probationer is one who is on trial
Prescriptive Period for Money Claims for an employer, during which the latter determines whether
In the present case, the earliest incident covered by Article or not he is qualified for permanent employment. The
1155 is the extrajudicial demand which came on January 7, probationary employment is intended to afford the employer
1995 . As the CA correctly computed, the period for an opportunity to observe the fitness of a probationary
prescription started to run on January 15, 1993 , and was employee while at work, and to ascertain whether he will
interrupted on January 7, 1995 . UNILAB only answered the become an efficient and productive employee. While the
petitioners January 7, 1995 letter on February 26, 1996 , with employer observes the fitness, propriety and efficiency of a
a categorical denial of the petitioners demand; the running of probationer to ascertain whether he is qualified for permanent
the prescription period re-started on the date of this denial, employment, the probationer, on the other hand, seeks to
but again stopped again on August 9, 1996 , when the prove to the employer that he has the qualifications to meet
complaint before the NLRC was filed. Adding all the running the reasonable standards for permanent employment. Thus,
periods yields a total of less than three (3) years; hence, the the word probationary, as used to describe the period of
petitioner seasonably filed her monetary claim when she filed employment, implies the purpose of the term or period, not its
her complaint before the NLRC. (JANUARIA A. RIVERA v. length. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and
UNITED LABORATORIES, INC.,G.R. No. 155639 April 22, 2009) MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No.
Money Claims OFWs 178835, February 13, 2009 )
In Cadalin v. POEAs Administrator, we held that Article 291 Probationary Employment for Academic Personnel
covers all money claims from employer-employee relationship For academic personnel in private schools, colleges and
and is broader in scope than claims arising from a specific law. universities, probationary employment is governed by Section
It is not limited to money claims recoverable under the Labor 92 of the 1992 Manual of Regulations for Private Schools
Code, but applies also to claims of overseas contract workers. (Manual), which reads:
The following ruling in Cadalin v. POEAs Administrator is Section 92. Probationary Period. Subject in all instances to
instructive: compliance with the Department and school requirements,
First to be determined is whether it is the Bahrain law on the probationary period for academic personnel shall not be
prescription of action based on the Amiri Decree No. 23 of more than three (3) consecutive years of satisfactory service
1976 or a Philippine law on prescription that shall be the for those in the elementary and secondary levels, six (6)
governing law. consecutive regular semesters of satisfactory service for
Article 156 of the Amiri Decree No. 23 of 1976 provides: those in the tertiary level, and nine (9) consecutive trimesters
A claim arising out of a contract of employment shall not be of satisfactory service for those in the tertiary level where
actionable after the lapse of one year from the date of the collegiate courses are offered on a trimester basis.
expiry of the contract x x x. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS.
As a general rule, a foreign procedural law will not be applied VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835,
in the forum. Procedural matters, such as service of process, February 13, 2009 )
joinder of actions, period and requisites for appeal, and so Security of Tenure of Probationary Employees
forth, are governed by the laws of the forum. This is true even As above discussed, probationary employees enjoy security of
if the action is based upon a foreign substantive law tenure during the term of their probationary employment such
(Restatement of the Conflict of Laws, Sec. 685; Salonga, that they may only be terminated for cause as provided for by
Private International Law, 131 [1979]). law, or if at the end of the probationary period, the employee
A law on prescription of actions is sui generis in Conflict of failed to meet the reasonable standards set by the employer
Laws in the sense that it may be viewed either as procedural at the time of the employees engagement. Undeniably,
or substantive, depending on the characterization given such respondent was hired as a probationary teacher and, as such,
a law. it was incumbent upon petitioner to show by competent
x x x x evidence that she did not meet the standards set by the
However, the characterization of a statute into a procedural or school. This requirement, petitioner failed to discharge. To
substantive law becomes irrelevant when the country of the note, the termination of respondent was effected by that
forum has a borrowing statute. Said statute has the letter stating that she was being relieved from employment
practical effect of treating the foreign statute of limitation as because the school authorities allegedly decided, as a cost-
one of substance (Goodrich, Conflict of Laws, 152-153 [1938]). cutting measure, that the position of Principal was to be
A borrowing statute directs the state of the forum to apply abolished. Nowhere in that letter was respondent informed
the foreign statute of limitations to the pending claims based that her performance as a school teacher was less than
on a foreign law (Siegel, Conflicts, 183 [1975]). While there satisfactory. (MAGIS YOUNG ACHIEVERS LEARNING CENTER
are several kinds of borrowing statutes, one form provides and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No.
that an action barred by the laws of the place where it 178835, February 13, 2009 )
accrued, will not be enforced in the forum even though the Termination of Probationary Employee
local statute has not run against it (Goodrich and Scoles, Under Article 281 of the Labor Code, a probationary employee
Conflict of Laws, 152-153 [1938]). Section 48 of our Code of can be legally dismissed either: (1) for a just cause; or (2)
Civil Procedure is of this kind. Said Section provides: when he fails to qualify as a regular employee in accordance
If by the laws of the state or country where the cause of with the reasonable standards made known to him by the
action arose, the action is barred, it is also barred in the employer at the start of the employment. Nonetheless, the
Philippine Islands. power of the employer to terminate the services of an
Section 48 has not been repealed or amended by the Civil employee on probation is not without limitations. First, this
Code of the Philippines. Article 2270 of said Code repealed power must be exercised in accordance with the specific
only those provisions of the Code of Civil Procedure as to requirements of the contract. Second, the dissatisfaction on
 33

the part of the employer must be real and in good faith, not pressured into signing it on account of his dire financial need.
feigned so as to circumvent the contract or the law. Third, When it is shown that the person executing the waiver did so
there must be no unlawful discrimination in the dismissal. In voluntarily, with full understanding of what he was doing, and
termination cases, the burden of proving just or valid cause the consideration for the quitclaim is credible and reasonable,
for dismissing an employee rests on the employer. (DAVAO the transaction must be recognized as a valid and binding
CONTRACTORS DEVELOPMENT COOPERATIVE (DACODECO) v. undertaking. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC.
MARILYN A. PASAWA,G.R. No. 172174,July 9, 2009) (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA
Project Employee MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN
While respondent performed tasks that were clearly vital, THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES
necessary and indispensable to the usual business or trade of (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, 2009)
Alcatel, respondent was not continuously rehired by Alcatel To excuse petitioners from complying with the terms of their
after the cessation of every project. Records show that waivers, they must locate their case within any of three
respondent was hired by Alcatel from 1988 to 1995 for three narrow grounds: (1) the employer used fraud or deceit in
projects, namely the PLDT X-5 project, the PLDT X-4 IOT obtaining the waivers; (2) the consideration the employer paid
project and the PLDT 1342 project. On 30 April 1988, upon the is incredible and unreasonable; or (3) the terms of the waiver
expiration of respondents contract for the PLDT X-4 IOT are contrary to law, public order, public policy, morals or good
project, Alcatel did not rehire respondent until 1 February customs or prejudicial to a third person with a right
1991, or after a lapse of 33 months, for the PLDT 1342 recognized by law. The preceding discussion on the
project. Alcatels continuous rehiring of respondent in various voluntariness of petitioners retirement from service
capacities from February 1991 to December 1995 was done effectively removes these grounds beyond petitioners
entirely within the framework of one and the same project argumentative reach. Accordingly, petitioners, by the terms of
the PLDT 1342 project. This did not make respondent a their waivers, are barred from filing this suit. (ARSENIO F.
regular employee of Alcatel as respondent was not QUEVEDO, et al., v. BENGUET ELECTRIC
continuously rehired after the cessation of a project. COOPERATIVE,INCORPORATED (BENECO) and GERARDO P.
Respondent remained a project employee of Alcatel working VERZOSA, G.R. No. 168927, September 11, 2009)
on the PLDT 1342 project. (ALCATEL PHILIPPINES, INC., v. Invalid Quitclaims
RENE R. RELOS, G.R. No. 164315, July 3, 2009) Significantly, the Manifestations filed by petitioner with
Protection to Labor respect to the quitclaims executed by members of respondent
Whether employed locally or overseas, all Filipino workers Union state that 34 of the 48 employees terminated on
enjoy the protective mantle of Philippine labor and social account of the downsizing program have already executed
legislation, contract stipulations to the contrary quitclaims on various dates. We, however, take judicial notice
notwithstanding. This pronouncement is in keeping with the that 33 of these quitclaims failed to indicate the amounts
basic public policy of the State to afford protection to labor, received by the terminated employees. Because of this,
promote full employment, ensure equal work opportunities petitioner leaves us no choice but to invalidate and set aside
regardless of sex, race or creed, and regulate the relations these quitclaims. However, the actual amount received by the
between workers and employers. This ruling is likewise employees upon signing the said documents shall be
rendered imperative by Article 17 of the Civil Code which deducted from whatever remaining amount is due them to
states that laws which have for their object public order, avoid double recovery of separation pay and other monetary
public policy and good customs shall not be rendered benefits. We hereby order the Labor Arbiter to effect the
ineffective by laws or judgments promulgated, or by necessary computation on this matter. (HOTEL ENTERPRISES
determinations or conventions agreed upon in a foreign OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency
country. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-
and MILA CUARESMA (for and in behalf oftheir daughter, NATIONAL UNION OF WORKERS IN THE HOTEL AND
Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-
JAIME ORTIZ (President,White Falcon Services, Inc.) AND NUWHRAIN), G.R. No. 165756, June 5, 2009)
PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99, Also, SMC cannot take refuge in the Receipt and Release
April 7, 2009) document signed by the respondent. Generally, deeds of
Thus, as held in that case, the right of an employee to be release, waivers, or quitclaims cannot bar employees from
informed of the charges against him and to reasonable demanding benefits to which they are legally entitled or from
opportunity to present his side in a controversy with either the contesting the legality of their dismissal, since quitclaims are
company or his own Union is not wiped away by a Union looked upon with disfavor and are frowned upon as contrary
Security Clause or a Union Shop Clause in a collective to public policy. Where, however, the person making the
bargaining agreement. An employee is entitled to be waiver has done so voluntarily, with a full understanding
protected not only from a company which disregards his rights thereof, and the consideration for the quitclaim is credible and
but also from his own Union, the leadership of which could reasonable, the transaction must be recognized as a valid and
yield to the temptation of swift and arbitrary expulsion from binding undertaking. The burden of proving that the quitclaim
membership and mere dismissal from his job. or waiver was voluntarily entered into rests on the employer.
(HERMINIGILDO INGUILLO AND ZENAIDA BERGANTE V. FIRST (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R.
PHILIPPINE SCALES, INC. and/or AMPARO POLICARPIO, No. 163033, October 2, 2009)
MANAGER, G.R. No. 165407, June 5, 2009) Real Party in Interest
Question of Law / Fact To qualify a person to be a real party in interest in whose
There is a question of law if the issue raised is capable of name an action must be prosecuted, he must appear to be
being resolved without need of reviewing the probative value the present real holder of the right sought to be enforced.
of the evidence. The resolution of the issue must rest solely Interest within the meaning of the rule means material
on what the law provides on a given set of circumstances. interest, an interest in essence to be affected by the judgment
Once it is clear that the issue invites a review of the evidence as distinguished from mere interest in the question involved,
presented, the question posed is one of fact. If the query or a mere incidental interest. By real interest is meant a
requires a re-evaluation of the credibility of witnesses, or the present substantial interest, as distinguished from a mere
existence or relevance of surrounding circumstances and their expentancy or a future, contingent, subordinate or
relation to one another, the issue in that query is factual. consequential interest. (NORTHEASTERN COLLEGE TEACHERS
(GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION- AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE,
TUPAS vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL INC., G.R. No. 152923, January 19, 2009)
SANTOS CITY), THE COURT OF APPEALS and THE NATIONAL It has been repeatedly stated that the Pantranco properties
LABOR RELATIONS COMMISSION, G.R. No. 178647) which were the subject of execution sale were owned by
Quitclaim Macris and later, the PNB-Madecor. They were never owned by
However, with respect to the second batch of quitclaims PNEI or PNB. Following our earlier discussion on the separate
signed by 85 of the remaining 160 employees who were personalities of the different corporations involved in the
terminated following Hyatts permanent closure, we hold that instant case, the only entity which has the right and interest
these are valid and binding undertakings. The said documents to question the execution sale and the eventual right to annul
indicate that the amount received by each of the employees the same, if any, is PNB-Madecor or its successor-in-interest.
represents a reasonable settlement of their monetary claims Settled is the rule that proceedings in court must be instituted
against petitioner and were even signed in the presence of a by the real party in interest. (PANTRANCO EMPLOYEES
DOLE representative. A quitclaim, with clear and unambiguous ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED
contents and executed for a valid consideration received in EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR
full by the employee who signed the same, cannot be later RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No.
invalidated because its signatory claims that he was 170705)
 34

Re-computation of Awards of service; while the latter refers to those employees who
Furthermore, the CA sufficiently explained the need to have been performing the job, regardless of the nature
increase the award of 13th month pay and SIL pay. It modified thereof, for at least a year. If the employee has been
the award after finding that the computation of the amount performing the job for at least one year, even if the
given by the NLRC in its Decision dated March 25, 2002 does performance is not continuous or merely intermittent, the law
not conform to the dismissed employees employment history. deems the repeated and continuing need for its performance
The CA aptly explained, viz.: as sufficient evidence of the necessity, if not indispensability,
A cursory reading of the assailed Decision of the NLRC dated of that activity to the business. (SAN MIGUEL CORPORATION v.
March 25, 2002 readily reveals that the labor tribunal awarded EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009)
private respondents their unpaid 13th Month Pay and Service Reinstatement
Incentive Leave (SIL) Pay without regard to their employment The spirit of the rule on reinstatement pending appeal
history with the petitioner. There was even no explanation or animates the proceedings once the Labor Arbiter issues the
adequate showing on the face of the questioned judgment decision containing an order of reinstatement. The immediacy
why the award of the unpaid 13th Month and SIL Pay differs of its execution needs no further elaboration. Reinstatement
from one private respondent to another. This Court, therefore, pending appeal necessitates its immediate execution during
after determining that indeed the petitioner had not paid the the pendency of the appeal, if the law is to serve its noble
private respondents these special benefits for the whole purpose. At the same time, any attempt on the part of the
period of their employment therewith, modified the award by employer to evade or delay its execution, as observed in
painstakingly basing it to each of the dismissed employees Panuncillo and as what actually transpired in Kimberly,
employment history with petitioner. Composite, Air Philippines, and Roquero, should not be
xxxx countenanced.
The procedural lapse on the part of the NLRC in this case in After the labor arbiters decision is reversed by a higher
failing to take into account the number of years when the tribunal, the employee may be barred from collecting the
private respondents did not receive their 13th Month and SIL accrued wages, if it is shown that the delay in enforcing the
Pay cannot defeat their right to receive these benefits as reinstatement pending appeal was without fault on the part of
granted under substantive law. This Court simply could not the employer. (JUANITO A. GARCIA and ALBERTO J. DUMAGO
uphold an erroneous computation of the said unpaid benefits. vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20,
Hence, it had to re-compute, and as a consequence, increased 2009)
it. Reinstatement during Corporate Rehabilitation
(AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN Case law recognizes that unless there is a restraining order,
CASTIGADOR, NUENA SERMON and JOCELYN ZOLINA, G.R. No. the implementation of the order of reinstatement is ministerial
178309, January 27, 2009) and mandatory. This injunction or suspension of claims by
Recruitment Agency legislative fiat partakes of the nature of a restraining order
As the Court previously observed, the Contract of Services that constitutes a legal justification for respondents non-
between Interserve and petitioner did not identify the work compliance with the reinstatement order. Respondents failure
needed to be performed and the final result required to be to exercise the alternative options of actual reinstatement and
accomplished. Instead, the Contract specified the type of payroll reinstatement was thus justified. Such being the case,
workers Interserve must provide petitioner (Route Helpers, respondents obligation to pay the salaries pending appeal, as
Salesmen, Drivers, Clericals, Encoders & PD) and their the normal effect of the non-exercise of the options, did not
qualifications (technical/vocational course graduates, attach. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs.
physically fit, of good moral character, and have not been PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009)
convicted of any crime). The Contract also states that, to Republic Act No. 8042
carry out the undertakings specified in the immediately Fifth Paragraph of Section 10; Unconstitutional
preceding paragraph, the CONTRACTOR shall employ the The argument of the Solicitor General, that the actual purpose
necessary personnel, thus, acknowledging that Interserve did of the subject clause of limiting the entitlement of OFWs to
not yet have in its employ the personnel needed by petitioner their three-month salary in case of illegal dismissal, is to give
and would still pick out such personnel based on the criteria them a better chance of getting hired by foreign employers.
provided by petitioner. In other words, Interserve did not This is plain speculation. As earlier discussed, there is nothing
obligate itself to perform an identifiable job, work, or service in the text of the law or the records of the deliberations
for petitioner, but merely bound itself to provide the latter leading to its enactment or the pleadings of respondent that
with specific types of employees. These contractual provisions would indicate that there is an existing governmental purpose
strongly indicated that Interserve was merely a recruiting and for the subject clause, or even just a pretext of one.
manpower agency providing petitioner with workers The subject clause does not state or imply any definitive
performing tasks directly related to the latters principal governmental purpose; and it is for that precise reason that
business. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. the clause violates not just petitioners right to equal
AGITO, et al., G.R. No. 179546, February 13, 2009) protection, but also her right to substantivedue process under
Refusal to Return to Work Section 1, Article III of the Constitution. (ANTONIO M.
Therefore, the complaint for illegal dismissal filed by SERRANO v. GALLANT MARITIME SERVICES,INC. and MARLOW
respondents was premature, since even after the expiration of NAVIGATION CO., INC., G.R. No. 167614, March 24, 2009)
their suspension period, they refused, despite due notice, to Retirement Coverage
report to work. In fact, in their Memorandum of Appeal, A twist in Riveras case is that she continued working beyond
respondents admitted having received petitioners return-to- the compulsory separation from service that resulted from her
work memorandum which, however, became futile because retirement. Whether she could or could not resume working
they hastily filed the complaint for illegal dismissal. with the company is, as a rule, a consensual matter for the
(INDUSTRIAL & TRANSPORT EQUIPMENT, INC. RAYMOND parties to agree upon, limited only by company policies and
JARINA, vs. TOMAS TUGADE and CRESENCIO TUGADE, G.R. No. the applicable terms of the retirement plan. To be sure, there
158539, January 15, 2009) is no limitation by law that barred her from continuing her
Regular Employment work with UNILAB; even the above-quoted Implementing
Undoubtedly, respondents were regular employees of Rules, in setting the retirement age at 60, deferred to the
petitioner with respect to the escort or comboy activity for parties agreement. Her employment terms under this
which they had been engaged since 1993 and 1994, renewed employment are based on what she and the
respectively, without regard to continuity or brokenness of the company agreed upon. Whether these terms included
service. (DEALCO FARMS, INC., vs. NATIONAL LABOR renewed coverage in the retirement plan is an evidentiary gap
RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 that could have been conclusively shown by evidence of
January 30, 2009) deductions of contributions to the plan after 1988. Two
Thus, there are two kinds of regular employees, namely: (1) indicators, however, tell us that no such coverage took place.
those who are engaged to perform activities which are usually The first is that the terms of the retirement plan, before and
necessary or desirable in the usual business or trade of the after its 1992 amendment, continued to exclude those who
employer; and (2) those who have rendered at least one year have rendered 30 years of service or have reached 60 years
of service, whether continuous or broken, with respect to the of age. Therefore, the plan could not have covered her. The
activity in which they are employed. Simply stated, regular second is the absence of evidence of, or of any demand for,
employees are classified into (1) regular employees by any reimbursement of what Rivera would have paid as
nature of work and (2) regular employees by years of contributions to the plan had her coverage and deductions
service. The former refers to those employees who perform a continued after 1988. Thus, we conclude that her renewed
particular activity which is necessary or desirable in the usual service did not have the benefit of any retirement plan
business or trade of the employer, regardless of their length
 35

coverage. (JANUARIA A. RIVERA v. UNITED LABORATORIES, only, without backwages, is proper. (ELIZABETH D. PALTENG v.
INC.,G.R. No. 155639 April 22, 2009) UNITED COCONUT PLANTERS BANK, G.R. No. 172199,
Seafarer February 27, 2009)
Death Benefits We thus find the dismissal to be illegal. Consequently,
The general rule is that the employer is liable to pay the heirs respondent is entitled to reinstatement without loss of
of the deceased seafarer for death benefits once it is seniority rights and other privileges, and to full backwages,
established that he died during the effectivity of his inclusive of allowances, and other benefits or their monetary
employment contract. However, the employer may be equivalent, computed from the time of the withholding of the
exempted from liability if he can successfully prove that the employees compensation up to the time of actual
seafarers death was caused by an injury directly attributable reinstatement. If reinstatement is not possible due to the
to his deliberate or willful act. In sum, respondents strained relations between the employer and the employee,
entitlement to any death benefits depends on whether the separation pay should instead be paid the employee
evidence of the petitioners suffices to prove that the equivalent to one month salary for every year of service,
deceased committed suicide; the burden of proof rests on his computed from the time of engagement up to the finality of
employer. (GREAT SOUTHERN MARITIME SERVICES CORP. and this decision. (M+W ZANDER PHILIPPINES, INC. and ROLF
IMC SHIPPING CO., PTE. LTD. v. LEONILA SURIGAO for Herself WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June
and In Behalf of Her Minor Children,Namely KAYE ANGELI and 5, 2009)
MIRIAM,Both Surnamed SURIGAO G.R. No. 183646) Article 279 of the Labor Code provides that [a]n employee
Post-Employment Medical Examination who is unjustly dismissed from work shall be entitled to
But even assuming that petitioner was repatriated for medical reinstatement without loss of seniority rights and other
reasons, he failed to submit himself to the company- privileges and to his full backwages, inclusive of allowances,
designated doctor in accordance with the post-employment and to his other benefits or their monetary equivalent
medical examination requirement under the above-quoted computed from the time his compensation was withheld from
paragraph 3 of Section 20(B) of the POEA Standard him up to the time of his actual reinstatement. Since, in the
Employment Contract. Failure to comply with this requirement present case, reinstatement is no longer practicable or
which is a sine qua non bars the filing of claim for disability feasible, separation pay may be awarded in lieu of
benefits. (DIONISIO M. MUSNIT v. SEA STAR SHIPPING reinstatement. Moreover, the awards of separation pay and
CORPORATION , G.R. No. 182623, December 4, 2009) backwages are not mutually exclusive and both may be given
Security Guard to Tagulao and Serrano.
Temporary offdetail The normal consequences of a finding that an employee has
Petitioners citation of Article 286 of the Labor Code reading: been illegally dismissed are, firstly, that the employee
ART. 286. When employment not deemed terminated. The becomes entitled to reinstatement to his former position
bona fide suspension of the operation of a business or without loss of seniority rights and, secondly, the payment of
undertaking for a period not exceeding six (6) months, or the backwages corresponding to the period from his illegal
fulfillment by the employee of a military or civic duty shall not dismissal up to actual reinstatement. The statutory intent on
terminate employment. In all such cases, the employer shall this matter is clearly discernible. Reinstatement restores the
reinstate the employee to his former position without loss of employee who was unjustly dismissed to the position from
seniority rights if he indicates his desire to resume his work which he was removed, that is, to his status quo ante
not later than one (1) month from the resumption of dismissal, while the grant of backwages allows the same
operations of his employer or from his relief from the military employee to recover from the employer that which he had lost
or civic duty. (Emphasis in the original; underscoring supplied) by way of wages as a result of his dismissal. These twin
is misplaced. Philippine Industrial Security Agency v. Dapiton remedies reinstatement and payment of backwages
teaches: make the dismissed employee whole who can then look
We stress that Article 286 applies only when there is a forward to continued employment. Thus do these two
bonafide suspension of the employers operation of a business remedies give meaning and substance to the constitutional
or undertaking for a period not exceeding six (6) months. In right of labor to security of tenure. The two forms of relief are
such a case, there is no termination of employment but only a distinct and separate, one from the other. Though the grant of
temporary displacement of employees, albeit the reinstatement commonly carries with it an award of
displacement should not exceed six (6) months. The backwages, the inappropriateness or non-availability of one
paramount consideration should be the dire exigency of the does not carry with it the inappropriateness or non-availability
business of the employer that compels it to put some of its of the other. x x x As the term suggests, separation pay is the
employees temporarily out of work. In security services, the amount that an employee receives at the time of his
temporary off-detail of guards takes place when the security severance from the service and x x x is designed to provide
agencys clients decide not to renew their contracts with the the employee with the wherewithal during the period that he
security agency, resulting in a situation where the available is looking for another employment. In the instant case, the
posts under its existing contracts are less than the number of grant of separation pay was a substitute for immediate and
guards in its roster. (Underscoring supplied) continued re-employment with the private respondent Bank.
In the present case, there is no showing that there was lack of The grant of separation pay did not redress the injury that is
available posts at petitioners clients or that there was a intended to be relieved by the second remedy of backwages,
request from the client-bank, where respondent was last that is, the loss of earnings that would have accrued to the
posted and which continued to hire petitioners services, to dismissed employee during the period between dismissal and
replace respondent with another. Petitioner suddenly reinstatement. Put a little differently, payment of backwages
prevented him from reporting on his tour of duty at the bank is a form of relief that restores the income that was lost by
on December 15, 2001 and had not thereafter asked him to reason of unlawful dismissal; separation pay, in contrast, is
report for duty. (EAGLE STAR SECURITY SERVICES, INC. v. oriented towards the immediate future, the transitional period
BONIFACIO L. MIRANDO, G.R. No. 179512, July 30, 2009) the dismissed employee must undergo before locating a
Separate Corporate Personality replacement job. x x x The grant of separation pay was a
Assuming, for the sake of argument, that PNB may be held proper substitute only for reinstatement; it could not be an
liable for the debts of PNEI, petitioners still cannot proceed adequate substitute both for reinstatement and for
against the Pantranco properties, the same being owned by backwages. (Emphasis added) (NISSAN NORTH EDSA
PNB-Madecor, notwithstanding the fact that PNB-Madecor was BALINTAWAK, QUEZON CITY v. ANGELITO SERRANO, JR. and
a subsidiary of PNB. The general rule remains that PNB- EDWIN TAGULAO, G.R. No. 162538, June 4, 2009)
Madecor has a personality separate and distinct from PNB. Above all, the intention to sever the employer-employee
The mere fact that a corporation owns all of the stocks of relationship was not duly established by respondents. The
another corporation, taken alone, is not sufficient to justify prior submission of a medical certificate that petitioner is fit to
their being treated as one entity. If used to perform legitimate resume work negates the claim of respondents that the
functions, a subsidiarys separate existence shall be former demanded for separation pay on account of her failing
respected, and the liability of the parent corporation as well as health. Certainly, petitioner cannot demand for separation
the subsidiary will be confined to those arising in their benefits on the ground of illness while at the same time
respective businesses. (PANTRANCO EMPLOYEES ASSOCIATION presenting a certification that she is fit to work. Respondents
(PEA-PTGWO) and PANTRANCO RETRENCHED EMPLOYEES could have denied petitioners demand at that instance and
ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS ordered her to return to work had it not been their intention to
COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705) sever petitioner from their employ. Hence, we find the
Separation Pay allegation that petitioner presented herself for work but was
Since petitioner was not faultless in regard to the offenses refused by respondents more credible. (CONCEPCION
imputed against her, we hold that the award of separation pay
 36

FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA EMPLOYEESWORKERS UNION-NAFLU-KMU,G.R. Nos. 171618-
GO,G.R. No. 182499, October 2, 2009) 19, March 20, 2009)
Since Dusit Hotel is explicitly mandated by the afore-quoted Dinopol and Lustria Decision
statutory provision to pay its employees and management There is no conflict between the Dinopol and the Lustria
their respective shares in the service charges collected, the decisions. While both rulings involve the same parties and
hotel cannot claim that payment thereof to its 82 employees same issues, there is a distinction between the remedies
constitute substantial compliance with the payment of ECOLA sought by the parties in these two cases. In the Dinopol
under WO No. 9. Undoubtedly, the hotel employees right to decision, it was QCSC which filed a petition to declare the
their shares in the service charges collected by Dusit Hotel is illegality of the 12 August 1997 strike by the union. The
distinct and separate from their right to ECOLA; gratification consequence of the declaration of an illegal strike is
by the hotel of one does not result in the satisfaction of the termination from employment, which the Labor Arbiter did so
other. (PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO- rule in said case. However, not all union members were
MANILA v. NATIONAL UNION OF WORKERS IN HOTEL, terminated. In fact, only a few union officers were validly
RESTAURANT, AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF)- dismissed in accordance with Article 264 of the Labor Code.
DUSIT HOTEL NIKKO CHAPTER, G.R. No. 181972, August 25, Corollarily, the other union members who had merely
2009) participated in the strike but had not committed any illegal
Social Justice acts were not dismissed from employment. Hence, the NLRC
The Court is not unmindful of the equally important right of erred in declaring the employment status of all employees as
respondent as employer under the Constitution to be having been lost or forfeited by virtue of the Dinopol decision.
protected in its property and interest. The particular On the other hand, the Lustria decision involved the unfair
circumstances attendant in this case, however, convince the labor practices alleged by the union with particularity. In said
Court that the supreme penalty of dismissal upon petitioner is case, Labor Arbiter Lustria sided with the Union and found
not justified. The law regards the workers with compassion. QCSC guilty of such practices. As a consequence, the affected
Even where a worker has committed an infraction of company employees were granted backwages and separation pay. The
rules and regulations, a penalty less punitive than dismissal grant of backwages and separation pay however was not
may suffice. This is not only because of the laws concern for premised on the declaration of the illegality of the strike but
the workingman. There is, in addition, his family to consider. on the finding that these affected employees were
Unemployment brings untold hardships and sorrows on those constructively dismissed from work, as evidenced by the
dependent upon the wage-earner. (ABELARDO P. ABEL v. layoffs effected by the company. As explained in the Lustria
PHILEX MINING CORPORATION, G.R. No. 178976, July 31, decision:
2009) Considering that the temporary lay-off of listed employees
While the Court commiserates with petitioners on their loss of effected by the respondents on 16 August 1997 was without
employment, especially now that the Cooperative is no longer documentary evidence to determine its validity, it is our
a going concern, it cannot simply, by default, hold the considered view and we so hold that said employees were
Cooperatives co-respondents liable for their claims without constructively dismissed without just or authorized cause and
any factual and legal justification therefor. The social justice observance of due process. This opinion finds support from
policy of labor laws and the Constitution is not meant to be the hard and cold fact of absence of prior notice, report with
oppressive of capital. (OLDARICO S. TRAVEO, et al v. the regional office of the Department of Labor and
BOBONGON BANANA GROWERS MULTI-PURPOSE Employment having jurisdiction over the area and they remain
COOPERATIVE, TIMOG AGRICULTURAL CORPORATION, under lay-off status of employment. In conclusion, they are
DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. entitled to backwages and separation pay in lieu of
164205, September 3, 2009) reinstatement as prayed.
In the present case, respondent had been employed with the Clearly, there are two separate decisions issued by two
petitioner for almost twelve (12) years. On February 13, 1996, different labor arbiters involving the same parties and
he suffered from a fractured left transverse process of fourth interests. Considering that the remedies sought by the parties
lumbar vertebra, while their vessel was at the port of in each case differ, these two rulings may co-exist. (LOLITA A.
Yokohama, Japan. After consulting a doctor, he was required to LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No.
rest for a month. When he was repatriated to Manila and 164032, January 19, 2009)
examined by a company doctor, he was declared fit to Substitution of Parties
continue his work. When he reported for work, petitioner Finally, as to the prayer of the counsel of Mr. Gumarang to
refused to employ him despite the assurance of its personnel allow the latter to be substituted by his wife, and by his
manager. Respondent patiently waited for more than one year former co-employees whom he had allegedly represented
to embark on the vessel as 2rd Engineer, but the position was before the Regional Arbitration Branch of the NLRC, we grant
not given to him, as it was occupied by another person known the same insofar as the wife is concerned, she being his heir,
to one of the stockholders. Consequently, for having been but not as to the other co-employees. We cannot allow
deprived of continued employment with petitioners vessel, petitioner Gumarangs co-employees to take his place
respondent opted to apply for optional retirement. In addition, because, if we do, we would be allowing them to become
records show that respondents seamans book, as duly noted parties to the instant petition when they are not. It would
and signed by the captain of the vessel was marked Very have been different if they presented evidence showing that
Good, and recommended for hire. Moreover, respondent they had authorized Mr. Gumarang to file the petition on their
had no derogatory record on file over his long years of service behalf before this Court and even before the Court of Appeals.
with the petitioner. This, they had not done. (NORTHEASTERN COLLEGE
Considering all of the foregoing and in line with Eastern, the TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN
ends of social and compassionate justice would be served COLLEGE, INC., G.R. No. 152923, January 19, 2009)
best if respondent will be given some equitable relief. Thus, Suspension
the award of P100,000.00 to respondent as financial Thus, the CA and the NLRC correctly observed that the worst
assistance is deemed equitable under the circumstances. that respondent committed was an inadvertent infraction. For
( EASTERN SHIPPING LINES, INC V. FERRER D. ANTONIO G.R. that, the extreme penalty of dismissal imposed on him by
No. 171587, October 13, 2009) petitioners was grossly disproportionate. Taking into account
Petitioners bare invocation of the interest of substantial the managerial position he held and the prior warning issued
justice does not lie. Only under exceptionally meritorious to him for failing to communicate with his superiors, the
cases may a relaxation from an otherwise stringent rule be penalty commensurate to the violation he committed should
allowed to relieve a litigant of an injustice not commensurate be suspension for three months. The period of his suspension
with the degree of thoughtlessness in not complying with the is to be deducted from the period for which he is entitled to
procedure prescribed the existence of which petitioners backwages as awarded by the NLRC and affirmed by the CA.
failed to demonstrate. (WALLEM MARITIME SERVICES, INC. and (GULF AIR, JASSIM HINDRI ABDULLAH and RESTY AREVALO v.
SCANDIC SHIPMANAGEMENT LIMITED v. ERIBERTO S. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO J.C.
BULTRON, G.R. No. 185261, October 2, 2009) REYES, G.R. No. 159687, April 24, 2009)
Strike Teachers
Illegal Strike Employment Status
The use of unlawful means in the course of a strike renders The common practice is for the employer and the teacher to
such strike illegal. Therefore, pursuant to the principle of enter into a contract, effective for one school year. At the end
conclusiveness of judgment, the March 9, 1998 strike was ipso of the school year, the employer has the option not to renew
facto illegal. The filing of a petition to declare the strike illegal the contract, particularly considering the teachers
was thus unnecessary. (JACKBILT INDUSTRIES, INC.v. JACKBILT performance. If the contract is not renewed, the employment
relationship terminates. If the contract is renewed, usually for
 37

another school year, the probationary employment continues. filed a complaint with the NLRC. (HARBORVIEW RESTAURANT
Again, at the end of that period, the parties may opt to renew v. REYNALDO LABRO, G.R. No. 168273, April 30, 2009)
or not to renew the contract. If renewed, this second renewal To constitute abandonment, there must be clear proof of
of the contract for another school year would then be the last deliberate and unjustified intent to sever the employer-
year since it would be the third school year of probationary employee relationship. Clearly, the operative act is still the
employment. At the end of this third year, the employer may employees ultimate act of putting an end to his employment.
now decide whether to extend a permanent appointment to However, an employee who takes steps to protest her layoff
the employee, primarily on the basis of the employee having cannot be said to have abandoned her work because a charge
met the reasonable standards of competence and efficiency of abandonment is totally inconsistent with the immediate
set by the employer. For the entire duration of this three-year filing of a complaint for illegal dismissal, more so when it
period, the teacher remains under probation. Upon the includes a prayer for reinstatement. When Eleonor filed the
expiration of his contract of employment, being simply on illegal dismissal complaint, it totally negated petitioners
probation, he cannot automatically claim security of tenure theory of abandonment. (SOUTH DAVAO DEVELOPMENT
and compel the employer to renew his employment contract. COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION)
It is when the yearly contract is renewed for the third time AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v.
that Section 93 of the Manual becomes operative, and the SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009)
teacher then is entitled to regular or permanent employment In petitioners case, despite the directive cum caveat of CASI
status. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and for them to report back for work within two days from receipt
MRS. VIOLETA T. CARIO v. ADELAIDA MANALO, G.R. No. thereof, they failed to comply therewith. After three years, as
178835, February 13, 2009 ) reflected above, they offered to return to work. Their intention
Probationary Period for Teachers to sever the employer-employee relationship with CASI is
Thus, in light of our ruling of Espiritu Santo Parochial School v. manifested, however, by the length of time they refused to
NLRC that, in the absence of an express period of probation return to work, for they had, in the interim, been looking for
for private school teachers, the three-year probationary period other jobs. (MIGUEL A. PILAPIL, et al. v. NATIONAL LABOR
provided by the Manual of Regulations for Private Schools RELATIONS COMMISSION G.R. No. 178229 October 23, 2009)
must apply likewise to the case of respondent. In other words, Respondents failed to discharge this burden. Mere absence of
absent any concrete and competent proof that her petitioner is not sufficient to establish the allegation of
performance as a teacher was unsatisfactory from her hiring abandonment. The prolonged absence of petitioner was not
on April 18, 2002 up to March 31, 2003, respondent is entitled without justifiable reason because it was established that her
to continue her three-year period of probationary period, such failure to report for work was due to the injury she suffered in
that from March 31, 2003, her probationary employment is the course of her employment and with sufficient notice to
deemed renewed for the following two school years. (MAGIS respondents. Petitioner also presented herself for work on the
YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. date stated in the medical certificate which stated that she is
CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, fit to resume work. (CONCEPCION FAELDONIA v. TONG YAK
2009 ) GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499,
Termination of Employment October 2, 2009)
Just Causes Furthermore, the Court agrees with respondents when they
Neglect of Duty/Abandonment argued in their petition filed with the CA that if an employees
Hence, we find it hard to believe that he will just abandon his aim is to secure the benefits due him from his employer,
job after petitioners gave him a chance to continue working abandonment would surely be an illogical and impractical
for them. We uphold the following findings of the Court of recourse, especially for simple laborers such as respondent
Appeals that respondent did not abandon his job: Aguilar. Considering the difficult times in which our country is
In the case at bar, the charge of abandonment is belied by the in it is illogical and even suicidal for an employee like Aguilar
following circumstances: First, the high improbability of to abandon his work, knowing fully well of the widespread
private respondent to intentionally abandon his work unemployment and underemployment problems as well as the
considering that he had already served a penalty of difficulty of looking for a means of livelihood, simply because
suspension for his infractions and violations as well as the his employer rejected his demand for salary increase. Under
petitioners tacit condonation of the infractions he committed, the given facts, no basis in reason exists for the petitioners
by permitting him to go back to work and by asking him to theory that Aguilar abandoned his job. (BARON REPUBLIC
execute a promissory note. It is incongruent to human nature, THEATRICAL V. NORMITA P. PERALTA et al, G.R. No. 170525,
that after having ironed things out with his employer, an October 2, 2009)
employee would just not report for work for no apparent Gross Negligence
reason. Secondly, there was no proof that petitioner sent An employer cannot legally be compelled to continue with the
private respondent a notice of termination on the ground of employment of a person admittedly guilty of gross negligence
abandonment, if indeed it is true that he really failed to go in the performance of his duties. This holds true specially if
back to work. Section 2, Rule XVI, Book V, Rules and the employees continued tenure is patently inimical to the
regulations implementing the Labor Code provides that any employers interest. What happened was not a simple case of
employer who seeks to dismiss a worker shall furnish him a oversight and could not be attributed to a simple lapse of
written notice stating the particular act or omission judgment. No amount of good intent, or previous
constituting the ground for his dismissal. In cases of conscientious performance of duty, can assuage the damage
abandonment of work, the notice shall be served at the Mateo caused LBC when he failed to exercise the requisite
workers last known address (Icawat vs. National Labor degree of diligence required of him under the circumstances.
Relations Commission, 334 SCRA 75, 81 [2000]). For this ( LBC EXPRESS METRO MANILA, INC. and LORENZO A. NIO
reason, We are constrained to give credence to private v. JAMES MATEO, G.R. No. 168215, June 9, 2009)
respondents assertion that he attempted to report back to To warrant removal from service, the negligence should not
work but he was just asked to leave as he was considered merely be gross but also habitual. Gross negligence implies a
terminated. And lastly, private respondents filing of a case for want or absence of or failure to exercise even slight care or
illegal dismissal with the labor arbiter negates abandonment. diligence, or the entire absence of care. It evinces a
As held by the Supreme Court, a charge of abandonment is thoughtless disregard of consequences without exerting any
totally inconsistent with the immediate filing of a complaint effort to avoid them. Habitual neglect implies repeated failure
for illegal dismissal, more so when it includes a prayer for to perform ones duties for a period of time, depending upon
reinstatement (Globe Telecom, Inc. vs Florendo-Flores, 390 the circumstances. The single or isolated act of negligence
SCRA 201, 2002[sic]-203 [2002]). (BC CABLE MASTER SYSTEM does not constitute a just cause for the dismissal of the
AND/OR EVELYN CINENSE vs. MARCIAL BALUYOT, G.R. No. employee. (ABELARDO P. ABEL v. PHILEX MINING
172670,January 20, 2009) CORPORATION, G.R. No. 178976, July 31, 2009)
In the instant case, respondent was informed by no less than Serious Misconduct
his immediate superior, the chief cook and by his brother that PNB may rightfully terminate Maralits services for a just
he was being terminated. Like the Court of Appeals, the Court cause, including serious misconduct. Serious misconduct is
finds no reason why these two would give respondent the improper conduct, a transgression of some established and
false impression that he was being dismissed, and in turn, the definite rule of action, a forbidden act, or a dereliction of duty.
Court, like the appellate court again, is inclined to believe that Having been dismissed for a just cause, Maralit is not entitled
they were given prior instruction, or they at least had prior to her retirement benefits. (ESTER B. MARALIT v. PHILIPPINE
knowledge of the termination. Moreover, as previously NATIONAL BANK, G.R. No. 163788, August 24, 2009)
discussed, the charge of abandonment does not square with By sleeping on the job and leaving his work area without prior
the fact that a week after respondents alleged dismissal, he authorization, Tomada did not merely disregard company
rules. Tomada, in effect, issued an open invitation for others to
 38

violate those same company rules. Indeed, considering the taxes are the lifeblood of the state, then, by analogy, the
presence of trainees in the building and Tomadas acts, payment collection is the lifeblood of the cooperative. The
Tomada failed to live up to his companys reasonable collection provides respondent PELCO I with the financial
expectations. Tomadas offenses cannot be excused upon a resources to continue its operations. Respondent PELCO I
plea of being a first offense, or have not resulted in cannot afford to continue in its employ dishonest bill
prejudice to the company in any way. No employer may collectors.
rationally be expected to continue in employment a person By his own admission, petitioner Manliclic committed a breach
whose lack of morals, respect and loyalty to his employer, of the trust reposed in him by his employer, respondent
regard for his employers rules, and appreciation of the dignity PELCO I. This constitutes valid cause for his dismissal from
and responsibility of his office, has so plainly and completely service. (CHONA ESTACIO and LEOPOLDO MANLICLIC v.
been bared. (EDUARDO M. TOMADA, SR. v. RFM PAMPANGA I ELECTRIC COOPERATIVE, INC., and LOLIANO E.
CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA ALLAS, G.R. No. 183196, August 19, 2009)
CONCEPCION III, G.R. No. 163270, September 11, 2009) We are not unmindful of the employers right to dismiss an
Moreover, the peculiar nature of Espaderos position employee based on fraud or willful breach of trust. However,
aggravates her misconduct. Misconduct has been defined as the loss of confidence must be based not on an ordinary
improper or wrong conduct; the transgression of some breach by the employee of the trust reposed in him by the
established or definite rule of action, a forbidden act, a employer, but, in the language of Article 282(c) of the Labor
dereliction of duty, willful in character, and implies wrongful Code, on a willful breach. A breach is willful if it is done
intent and not mere error in judgment. The misconduct, to be intentionally, knowingly and purposely, without justifiable
serious, must be of such a grave character and not merely excuse, as distinguished from an act done carelessly,
trivial or unimportant. To constitute just cause for termination, thoughtlessly, heedlessly, or inadvertently. It must rest on
it must be in connection with the employees work. With the substantial grounds and not on the employers arbitrariness,
degree of trust expected of Espadero, such infraction can whims, caprices or suspicion; otherwise, the employee would
hardly be classified as one that is trivial or unimportant. Her eternally remain at the mercy of the employer. It should be
failure to promptly report the incident reflects a cavalier genuine and not simulated; nor should it appear as a mere
regard for the responsibility required of her in the discharge of afterthought to justify an earlier action taken in bad faith or as
the duties of her position. (EATS-CETERA FOOD SERVICES a subterfuge for causes that are improper, illegal or
OUTLET and/or SERAFIN RAMIREZ v. MYRNA B. LETRAN and unjustified. It has never been intended to afford an occasion
MARY GRACE ESPADERO, G.R. No. 179507, October 2, 2009) for abuse because of its subjective nature. There must,
An employee who fails to account for and deliver the funds therefore, be an actual breach of duty committed by the
entrusted to him is liable for misappropriating the same and is employee, which must be established by substantial evidence.
consequently guilty of serious misconduct. Petitioner therefore In this case, SLMC utterly failed to establish the requirements
validly dismissed respondent.( SUPERLINES TRANSPORTATION prescribed by law and jurisprudence for a valid dismissal on
COMPANY, INC. v. EDUARDO PINERA G.R. No. 188742, October the ground of breach of trust and confidence. (ST. LUKES
13, 2009) MEDICAL CENTER, INCORPORATED v. JENNIFER LYNNE C.
o Simple Misconduct FADRIGO, G.R. No. 185933, November 25, 2009)
Based on the foregoing, we consider respondents offense to Verily, the actions of Tirazona reflected an obdurate character
be a simple misconduct which does not merit termination of that is arrogant, uncompromising, and hostile. By immediately
his employment. The penalty of dismissal from service is not and unreasonably adopting an adverse stance against PET,
commensurate to respondents offense. Although petitioner, she sought to impose her will on the company and placed her
as an employer, has the right to discipline its erring own interests above those of her employer. Her motive for her
employees, exercise of such right should be tempered with actions was rendered even more questionable by her
compassion and understanding. The magnitude of the exorbitant and arbitrary demand for P2,000,000.00 payable
infraction committed by an employee must be weighed and within five days from demand. Her attitude towards her
equated with the penalty prescribed and must be employer was clearly inconsistent with her position of trust
commensurate thereto, in view of the gravity of the penalty of and confidence. Her poor character became even more
dismissal or termination from the service. The employer evident when she read what was supposed to be a
should bear in mind that in termination cases, what is at stake confidential letter of the legal counsel of PET to PET
is not simply the employees job or position but his very officers/directors expressing his legal opinion on Tirazonas
livelihood. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY administrative case. PET was, therefore, fully justified in
v. INOCENCIO B. BERBANO, JR., G.R. No. 165199, November terminating Tirazonas employment for loss of trust and
27, 2009) confidence. (MA. WENELITA S. TIRAZONA, vs. PHILIPPINE EDS
Loss of Trust and Confidence TECHNO- SERVICE INC. (PET INC.) AND/OR KEN KUBOTA,
Petitioner, in his Position Paper filed before the LA and in his MAMORU ONO and JUNICHI HIROSE, G.R. No. 169712, January
Sagot na Sinumpaang Salaysay, averred that sometime in 20, 2009)
August 2004, Alido informed him of the illegal activities in the To recapitulate, the right of an employer to dismiss an
company premises. But this fact was not reflected in his employee on account of loss of trust and confidence must not
Partial Audit Report; instead, petitioner made it appear therein be exercised whimsically. To countenance an arbitrary exercise
that it was upon the initiative of Lejos that he discovered the of that prerogative is to negate the employees constitutional
illegal activities only on October 28, 2004, after Lejos already right to security of tenure. In other words, the employer must
resigned from the company. The basis for terminating the clearly and convincingly prove by substantial evidence the
employment of petitioner actually came from petitioner facts and incidents upon which loss of confidence in the
himself due to the substantial and irreconcilable employee may be fairly made to rest; otherwise, the latters
inconsistencies in the narration of facts in his Audit Report and dismissal will be rendered illegal. (SAN MIGUEL CORPORATION
his Sagot na Sinumpaang Salaysay filed before the company, vs. NATIONAL LABOR RELATIONS COMMISSION AND WILLIAM
and his pleadings before the lower tribunals and before this L. FRIEND, JR., G.R. No. 153983, May 26, 2009)
Court. In sum, it cannot be denied that he withheld this Loss of confidence must not be indiscriminately used as a
information from his immediate supervisor and from the shield by the employer against a claim that the dismissal of
company a clear breach of the trust and confidence the an employee was arbitrary. Loss of confidence as a just cause
company had reposed in him as one of its Auditors.( ROMEO for termination of employment is premised on the fact that
N. VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR the employee concerned holds a position of responsibility or
RELATIONS COMMISSION, GENUINO ICE CO., INC., and trust and confidence. He must be invested with confidence on
HECTOR GENUINO, G.R. No. 182570, January 27, 2009 delicate matters, such as custody handling or care and
Indeed, by obtaining an altered police report and medical protection of the property and assets of the employer. And, in
certificate, petitioners deliberately attempted to cover up the order to constitute a just cause for dismissal, the act
fact that Sales was under the influence of liquor at the time complained of must be work-related and shows that the
the accident took place. In so doing, they committed acts employee concerned is unfit to continue to work for the
inimical to respondents interests. They thus committed a employer. (ADAM B. GARCIA v. NATIONAL LABOR RELATIONS
work-related willfull breach of the trust and confidence COMMISSION (SECOND DIVISION), LEGAZPI OIL COMPANY,
reposed in them. (ERIC DELA CRUZ and RAUL M. LACUATA v. INC., ROMEO F. MERCADO and GUS ZULUAGA G.R. No. 172854,
COCA-COLA BOTTLERS PHILS. INC., G.R. No. 180465, July 31, April 16, 2009)
2009) Considering the foregoing, we find that respondents Apostol
The amount misappropriated by petitioner Manliclic is and Opulencia were dismissed by TIPI for a valid and just
irrelevant. More than the resulting material damage or cause. The relationship of employer and employee, specially
prejudice, it is petitioner Manliclics very act of where the employee has access to the employers property,
misappropriation that is offensive to respondent PELCO I. If necessarily involves trust and confidence. Where the rules laid
 39

down by the employer to protect its property are violated by to retain those who had rendered dedicated and highly
the very employee who is entrusted and expected to follow efficient service and whose knowledge, attendance, and
and implement the rules, the employee may be validly potential hew with company standards. Any other measure
dismissed from service. (TRIUMPH would be senseless in the business viewpoint. Accordingly, the
INTERNATIONAL(PHILS.), INC.FIRST DIVISION v. RAMON L. merit rating used by MMPC based on Sec. 5 in conjunction
APOSTOL and BEN M. OPULENCIA, G.R. No. 164423, June 16, with and as qualified by the factors provided under Sec. 1 is
2009) fair and reasonable, and, to be sure, well within the
As Airport Manager, respondent occupies a position of such contemplation of the parties CBA. In fact, Alfredo, shorn of
extreme sensitivity that the existence of some basis or the contention that the merit rating is against the CBA, has
reasonable ground for his involvement in any irregularity is not shown any arbitrariness on the part of MMPC in the
enough to destroy the trust and confidence which petitioner evaluation, selection, and retrenchment of employees.
Gulf Air had reposed in him. However, it is settled that for (ALFREDO A. MENDROS, JR v. MITSUBISHI MOTORS PHILS.
breach of trust to constitute a valid cause for dismissal, the CORPORATION (MMPC), G.R. No. 169780, February 16, 2009)
same must be willful. Ordinary breach of trust will not suffice. Records do not show any criterion adopted or used by
(GULF AIR, JASSIM HINDRI ABDULLAH and RESTY AREVALO v. petitioner in dismissing respondent. Respondent was
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO J.C. terminated without considering her seniority. Retrenchment
REYES, G.R. No. 159687, April 24, 2009) scheme without taking seniority into account rendered the
The second requisite is that there must be an act that would retrenchment invalid. While respondent was the third most
justify the loss of trust and confidence. Loss of trust and senior employee among the 7 employees in petitioners
confidence, to be a valid cause for dismissal, must be based personnel department, she was retrenched while her other co-
on a willful breach of trust and founded on clearly established employees junior than her were either retained in the
facts. The basis for the dismissal must be clearly and Personnel Department or were transferred to other positions
convincingly established but proof beyond reasonable doubt is in the company. There was no showing that respondent was
not necessary. Respondents evidence against petitioner fails offered to be transferred to other positions.(EMCOR
to meet this standard. Its lone witness, Lupega, did not INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101,
support his affidavit and testimony during the company September 8, 2009)
investigation with any piece of evidence at all. No other At all events, even if the comparative report were to be
employee working at respondents mine site attested to the considered, the Court is not persuaded on the necessity of
truth of any of his statements. Standing alone, Lupegas resorting to retrenchment to prevent or minimize actual or
account of the subsidence area anomaly could hardly be imminent business losses on the part of petitioner. For
considered substantial evidence. And while there is no retrenchment should only be resorted to when other less
concrete showing of any ill motive on the part of Lupega to drastic means have been tried and found to be inadequate. So
falsely accuse petitioner, that Lupega himself was under Polymart Paper Industries, Inc. v. NLRC instructs:
investigation when he implicated petitioner in the subsidence . . . [E]ven if business losses were indeed sufficiently proven,
area anomaly makes his uncorroborated version suspect. the employer must still prove that retrenchment was resorted
(ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. to only after less drastic measures such as the reduction of
178976, July 31, 2009) both management and rank-and-file bonuses and salaries,
o Application of the Doctrine of Loss of Trust and Confidence going on reduced time, improving manufacturing efficiency,
Recent decisions of this Court have distinguished the reduction of marketing and advertising costs, faster collection
treatment of managerial employees from that of the rank-and- of customer accounts, reduction of raw materials investment
file personnel, insofar as the application of the doctrine of loss and others, have been tried and found wanting. (Emphasis
of trust and confidence is concerned. Thus, with respect to supplied)
rank-and-file personnel, loss of trust and confidence, as In the case at bar, petitioner did not adduce evidence to prove
ground for valid dismissal, requires proof of involvement in that retrenchment was resorted to because other measures
the alleged events in question, and that mere uncorroborated were undertaken to abate actual or future business losses but
assertions and accusations by the employer will not be thus failed. (BIO QUEST MARKETING INC. and/or JOSE L. CO v.
sufficient. But as regards a managerial employee, the mere EDMUND REY, G.R. No. 181503,September 18, 2009)
existence of a basis for believing that such employee has Requirement for Retrenchment
breached the trust of his employer would suffice for his For a valid termination due to retrenchment, the law also
dismissal. Hence, in the case of managerial employees, proof requires that written notices of the intended retrenchment be
beyond reasonable doubt is not required. It is sufficient that served by the employer on the worker and on the DOLE at
there is some basis for the employers loss of trust and least one month before the actual date of the retrenchment.
confidence, such as when the employer has reasonable The purpose of this requirement is to give employees time to
ground to believe that the employee concerned is responsible prepare for the eventual loss of their jobs, as well as to give
for the purported misconduct, and the nature of his DOLE the opportunity to ascertain the veracity of the alleged
participation therein renders him unworthy of the trust and cause of termination. In this case, petitioner insists that the
confidence demanded of his position. Nonetheless, the payment of 30 days salary to respondents in place of notice
evidence must be substantial and must establish clearly and was sufficient compliance with the 30-day notice rule. We
convincingly the facts on which the loss of confidence rests cannot agree. Nothing in the law gives petitioner the option to
and not on the employers arbitrariness, whims, and caprices substitute the required prior written notice with payment of 30
or suspicion. (TRIUMPH days salary. Indeed, a job is more than the salary it carries.
INTERNATIONAL(PHILS.), INC.FIRST DIVISION v. RAMON L. Payment of 30 days salary cannot compensate for the
APOSTOL and BEN M. OPULENCIA, G.R. No. 164423, June 16, psychological effect or the stigma of immediately finding
2009) ones self laid off from work. It cannot be a fully effective
o Positions of Trust substitute for the 30 days written notice requirement by law,
There are two classes of positions of trust. The first class especially when, as in this case, no notice was given to the
consists of managerial employees. They are defined as those DOLE. Even as the letters of voluntary acceptance were dated
vested with the powers or prerogatives to lay down July 25, 1998, the notices of termination given on July 23,
management policies and to hire, transfer, suspend, lay-off, 1998 were effective the following day. In essence,
recall, discharge, assign or discipline employees or effectively respondents had already been dismissed before they signed
recommend such managerial actions. The second class the letters of voluntary acceptance. Clearly, petitioner
consists of cashiers, auditors, property custodians, etc. They deprived respondents of their right to statutory due process.
are defined as those who, in the normal and routine exercise For this, we affirm the appellate courts award of nominal
of their functions, regularly handle significant amounts of damages to respondents. But, consistent with our ruling in
money or property. (ABELARDO P. ABEL v. PHILEX MINING Agabon v. National Labor Relations Commission, the amount
CORPORATION, G.R. No. 178976, July 31, 2009) of nominal damages should be P30,000. We also sustain the
Authorized Causes award of attorneys fees as it is sanctioned by law. (MOBILIA
Retrenchment PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No.
The proper view, therefore, is that the Sec. 1 criteria qualify 170669, February 4, 2009)
the factors of seniority and needs of the company in Sec. Losses
5(c). Stated a bit differently, Sec. 5(c) should be understood in Third, it bears to state that the aforequoted Art. 283 of the
the light of Sec. 1 which, to stress, provides seniority, Code uses the phrase retrenchment to prevent losses. The
efficiency and attitude, job knowledge and potential, and phrase necessarily implies that retrenchment may be effected
attendance as among the factors that should guide the even in the event only of imminent, impending, or expected
company in choosing the employees to be laid-off or kept. All losses. The employer need not wait for substantial losses to
other things being equal, a company would necessarily need materialize before exercising ultimate and drastic option to
 40

prevent such losses. In the case at bench, MMPC was already ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756,
financially hemorrhaging before finally resorting to June 5, 2009)
retrenchment. (ALFREDO A. MENDROS, JR v. MITSUBISHI Petitioners never substantiated their allegations. In a similar
MOTORS PHILS. CORPORATION (MMPC), G.R. No. 169780, case, Schering Employees Labor Union (SELU) et al. v.
February 16, 2009) Schering Plough Corporation, petitioner Sereneo, the
However, apart from petitioners bare assertion of reduced president of SELU, charged respondent with ULP and illegal
orders from Japan, the only evidence it presented were the dismissal because she was in the process of renegotiating the
letters of voluntary acceptance of retrenchment, and waivers CBA with respondent when she was dismissed on the ground
and quitclaims signed by respondents. To our mind, these of loss of trust and confidence. We said:
were insufficient to show that petitioner indeed suffered Petitioners accusation of union busting is bereft of any proof.
business losses so serious as to necessitate the reduction of We scanned the records very carefully and failed to discern
personnel. We have constantly ruled that financial statements any evidence to sustain such charge.
audited by independent external auditors constitute the In Tiu vs. NLRC, we held:
normal method of proof of the profit and loss performance of a . . . . It is the union, therefore, who had the burden of proof to
company. Any less exacting standard of proof would render present substantial evidence to support its allegations (of
too easy the abuse of this ground for termination of services unfair labor practices committed by management).
of employees. Petitioner submitted none. Further, let it be xxx xxx xxx.
clarified that our ruling in International Hardware, Inc. v. NLRC . . ., but in the case at bar the facts and the evidence did not
did not dispense with the responsibility of the employer to establish even at least a rational basis why the union would
substantiate losses. It merely exempts the latter from giving wield a strike based on alleged unfair labor practices it did not
notice of retrenchment to its employees and DOLE. (MOBILIA even bother to substantiate during the conciliation
PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No. proceedings. It is not enough that the union believed that the
170669, February 4, 2009) employer committed acts of unfair labor practice when the
Unfair Labor Practice circumstances clearly negate even a prima facie showing to
Totality of the Conduct Doctrine warrant such a belief. (RENITA DEL ROSARIO, et al., v. MAKATI
Then came the Lustria decision, issued two (2) months later, CINEMA SQUARE CORPORATION, G.R. No. 170014, July 3,
finding that QCSC had committed unfair labor practices 2009)
against the union and accordingly granting backwages and Voluntary Resignation
separation pay in favor of 112 employees. The Lustria Finally, respondent claims that in light of the opinion of the
decision emanated from a complaint for unfair labor practice physician in Korea that he had suspected ischemic heart,
against QCSC. Culled from the unions pleadings were the petitioners affirmed his medical repatriation. As reflected in
specific acts committed by QCSC, such as: the immediately preceding paragraph, however, ischemic
1. Insulting of the Union President as evidenced by the heart disease cannot develop in a short span of time that
Salaysay of Ma. Cecilia Pangan; respondent served as chief cook for petitioners. In fact, as
2. Cuddling and treating the minority union with favor, such as indicated above, the Gleneagles Maritime Medical Centre
paying their salaries/wages fully and ahead of the incumbent doctor who treated respondent in May 2000 for abscess in his
union and as if it were the incumbent bargaining agents; left hand had noted respondents [h]istory of hypertension
3. Discouraging the members of the incumbent union from for 3 years. Moreover, the Korean physician did not make any
continuing their membership with the incumbent union as recommendation as to respondents bill of health for
evidenced by the Pinagsamang Salaysay of Ramiro Espinosa petitioners to assume that he was fit for repatriation.
and Ronaldo Q. Lim; IN FINE, respondents actions show that he voluntarily
4. Bribing union member and promising promotion if he will resigned. (VIRGEN SHIPPING CORPORATION, CAPT. RENATO
not join the strike as evidenced by the Salaysay of Bernard MORENTE & ODYSSEY MARITIME PTE. LTD., NATIONAL LABOR
Delta; RELATIONS COMMISSION v. JESUS B. BARRAQUIO, G.R. No.
5. Transferring union members to another job description; 178127, April 16, 2009)
6. Replacing them with members of minority union evidenced Work-related Disease
by Leslie Tamayos Salaysay; If we found in Seagull Shipmanagement that the different
7. Subjecting one union member to a very tense confrontation climates and unpredictable weather, as well as the stress of
in the General Managers Office after she commented during the job, had a correlation with the heart disease of a seafarer
the NCMB conference that the 201 file of the employees are working as a radioman on a vessel, then what more in the
intact, resulting to her being taken to the hospital for nervous heart disease of a seafarer serving as a ship master, a
breakdown; and position involving more strain and pressure? A Tug (boat)
8. Requiring the union members to submit another Master is primarily tasked to operate tug boats, a powerful
information sheet, and failure to do so would mean no marine vessel that meets large ships out at sea and attach a
payment of their June 16-30, 1997 salary. line to guide/steer the same into and out of berths. In
Applying the totality of the conduct doctrine, Labor Arbiter operating such a powerful vessel, a Tug Master requires not
Lustria held that QCSC had committed unfair labor practices. just a thorough knowledge of the port environment in which
(LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, he is operating, but a high level of skill as well. In fact, in the
INC.,G.R. No. 164032, January 19, 2009) case at bar, respondent ADAMS recognized how grueling
Unfair labor practice refers to acts that violate the workers petitioner Nisdas job was, according the latter a month of
right to organize. The prohibited acts are related to the paid vacation every three months of straight service. Thus,
workers right to self-organization and to the observance of a more than a reasonable connection between the nature of
CBA. Without that element, the acts, even if unfair, are not petitioner Nisdas job and his Coronary Artery Disease has
unfair labor practices. (GENERAL SANTOS COCA-COLA PLANT been established. Petitioner Nisda was able to sufficiently
FREE WORKERS UNION-TUPAS vs. COCA-COLA BOTTLERS prove, by substantial evidence, that his Coronary Artery
PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS Disease was work-related, given the arduous nature of his job
and THE NATIONAL LABOR RELATIONS COMMISSION, G.R. No. that caused his disease or, at least, aggravated any pre-
178647) existing condition he might have had. Respondents Sea Serve
Here, respondent Union went on strike in the honest belief and ADAMS, on the other hand, utterly failed to refute the said
that petitioner was committing ULP after the latter decided to connection. (CARLOS N. NISDA v. SEA SERVE MARITIME
downsize its workforce contrary to the staffing/manning AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE
standards adopted by both parties under a CBA forged only SERVICES, G. R. No. 179177, July 23, 2009)
four (4) short months earlier. The belief was bolstered when
the management hired 100 contractual workers to replace the S
48 terminated regular rank-and-file employees who were all CONTRACTS OF EMPLOYMENT
Union members. Indeed, those circumstances showed prima
facie that the hotel committed ULP. Thus, even if technically MARCH 26, 2010 WHENGMANALO LEAVE A COMMENT
there was no legal ground to stage a strike based on ULP,
since the attendant circumstances support the belief in good Contracts of employment are imbued with public interest.
faith that petitioners retrenchment scheme was structured to
weaken the bargaining power of the Union, the strike, by
There are four tests to ascertain the existence of an employer-
exception, may be considered legal. (HOTEL ENTERPRISES OF
THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila,
v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL employee relationship:
UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND
 41

Manner of selection and engagement; Probationary employment is not necessarily a category of

Payment of wages; employment. It pertains to a period of time. Under art. 281 of

Presence or absence of the power of dismissal; and the LC, probationary employment shall not exceed six (6)

Presence or absence of the power of control. months. An employee who is allowed to work after a

Of the four tests, the last one control by the employer of the probationary period shall be considered a regular employee. A

means, methods and manner by which the work is performed probationary employee is, for a given period of time, under

by the employee is the most important. observation and evaluation to determine whether or not he or

she is qualified for permanent employment. During the

Art. 280 of the LC provides for the following categories of probationary period, the employer is given the opportunity to

employment: observe the skills, competence and attitude of the employee

Project where the employment has been fixed for a while the latter seeks to prove to the employer that he or she

specific project or undertaking, the completion or has the qualifications to meet the reasonable standards for

termination of which has been determined at the time of permanent employment

the engagement of the employee; HOW MUCH SHOULD THE EMPLOYERS PAY DURING HOLY
WEEK?
Seasonal where the work or services to be
APRIL 8, 2010 WHENGMANALO LEAVE A COMMENT
performed is seasonal in nature and the employment is
Heres an update from the Department of Labor and
for the duration of the season; and
Employment regarding the payment of work made during the
Casual where the employment is not covered by
Lenten Celebration:
the foregoing, provided that an employee who has

rendered at least one year of service, whether continuous

The Department of Labor and Employment (DOLE) today said
or broken, shall be considered regular with respect to the
that April 1 (Maundy Thursday) and 2 (Good Friday) are
activity in which he or she is employed and his or her
regular holidays throughout the nation, while April 3 (Black
employment shall continue while the activity exists.
Saturday), 2010 is a nationwide special non-working day.
Another category of employment recognized in jurisprudence

is term or fixed-period employment. This is based on art.

The Labor and Employment Chief said that Presidential
1193 of the CC, which states that obligations with a resolutory
Proclamation No. 1841, issued earlier on July 21, 2009, had
period take effect at once, but terminate upon arrival of
affirmed the regular holidays on April 1 and 2, and April 9,
the day certain understood to be a day that must
2010. At the same time, Proclamation No. 2029, by authority
necessarily come. The decisive determinant in term
of the President signed by Executive Secretary Leandro R.
employment should not be the activities that the employee is
Mendoza on March 24, 2010, declared Saturday, April 3, 2010,
called upon to perform, but the day certain agreed upon by
which falls between Good Friday and Easter Sunday, as a
the parties for the commencement and termination of the
special (non-working) day throughout the country, citing that,
employment relationship. Stipulations in employment
our people must be given the full and uninterrupted
contracts providing for term employment or fixed-period
opportunity to ponder on the significance of the Holy Week
employment are valid when the period has been agreed
and to properly observe its traditions without prejudice to
upon knowingly and voluntarily by the parties, without force,
public interest.
duress or improper pressure exerted on the employee, and
Roque thus advised the countrys employers in the private
when such stipulations were not designed to circumvent the
sector on the pay rules to be applied during the said
laws on security of tenure.
nationwide regular and special non-working holidays as
 42

follows: or her hourly rate on the said day for work performed in

1. For the regular holidays on April 1 (Maundy Thursday), April excess of 8 hours.

2 (Good Friday), and April 9 (Araw ng Kagitingan), 2010:

If unworked, he or she is not entitled to any payment, unless

A. If the holiday falls on an employees regular workday: there is a favorable company policy, practice or collective

bargaining agreement (CBA) granting payment for special

If worked, [the employee] is entitled to 200% of his [or her] days even if not worked.

basic wage for the first eight (8) hours and, for work in excess

of the 8 hours, to an additional 30% of his or her hourly rate If worked and falling on the employees rest day, the

on the said day. employee is entitled for the first 8 hours to150% of his or her

regular daily rate, and for work performed in excess of 8

If unworked, the employee is entitled to 100% of his or her hours, plus 30% of his or her hourly rate on the said day.

regular daily rate, provided he she was present or was on

leave with pay on the workday immediately preceding the Any clarifications regarding the holiday pay rules may be

holiday. made with the DOLE Call Center at tel. no. 527-8000.

B. If the day is the employees rest day:

If worked, the employee is entitled, for the first 8 hours, to

200% of his or her daily rate plus 30% and, for work in excess

of 8 hours, plus 30% of his or her hourly rate on the said day.

If unworked, the employee is entitled to 100% of his or her

regular daily rate, provided he or she was present or was on

leave with pay on the workday immediately preceding the

holiday.

C. Where the day immediately preceding the holiday is a non-

work day in the establishment or the

scheduled rest day of the employee, he or she shall not be

deemed on leave of absence on that day, in which case he or

she shall be entitled to the holiday pay.

2. For the special non-working day on April 3, 2010 (Black

Saturday):

If worked, the employee is entitled to 130% of his [or her]

daily rate for the first 8 hours, and to an additional 30% of his