CASES ON RECRUITMENT AND PLACEMENT

1. People vs Panis
The specification of two or more persons is not to create a condition prior to filing but rather itstates a
presumption that the individual is engaged in recruitment in consideration of a fee, however thenumber of
persons is not an essential ingredient to the act of recruitment or placement, and it will stillqualify even if
only one person has been involved.

2. People v Taguinay
The three elements of the crime of illegal recruitment in large scale, to wit: a) the offender has no valid
license or authority required by law to enable him to lawfully engage in recruitment and placement of
workers; b) the offender undertakes any of the activities within the meaning of "recruitment and placement"
under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the
said Code (now Section 6 of Republic Act No. 8042); and c) the offender committed the same against three
or more persons, individually or as a group, are present in this case.
3. People vs Hashim
The concerted efforts of Aringoy, Lalli and Relampagos, Lolita was recruited and deployed to Malaysia to
work as a prostitute. Such conspiracy among Aringoy, Lalli and Relampagos could be deduced from the
manner in which the crime was perpetrated — each of the accused played a pivotal role in perpetrating the
crime of illegal recruitment, and evinced a joint common purpose and design, concerted action and
community of interest.

4. People vs Cabais
that an employee of a company or corporation engaged in illegal recruitment may be held liable as principal,
together with the employer, if it is shown that he actively and consciously participated in the recruitment
process.

5. People vs Gamboa
The precise degree of participation of accused-appellant Lourdes Gamboa in the illegal recruitment scheme
is very clear from the. She was present when the complainants were being recruited and in fact personally
recruited some of them, providing and assisting them in filling up the application forms, answering their
queries, receiving documents and payments, and repeatedly assuring them that they would be able to leave
for their respective jobs abroad. These acts demonstrated beyond any cavil of doubt that she was
a knowing and willing participant in the recruitment activities of Melba Miñoza and her group.

6. People vs Chowdury
an employee of a company or corporation engaged in illegal recruitment may be held liable as principal,
together with his employer, if it is shown that he actively and consciously participated in illegal recruitment.

7. People vs Gasacao
Contrary to appellant's claim, he is not a mere employee of the manning agency but the crewing manager.
As such, he receives job applications, interviews applicants and informs them of the agency's requirement of
payment of performance or cash bond prior to the applicant's deployment. As the crewing manager, he was
at the forefront of the company's recruitment activities.
8. Republic vs PASEI
But the Court has already held, pending adjudication of this case, that the liability of corporate directors and
officers is not automatic. To make them jointly and solidarily liable with their company, there must be a
finding that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities.

9. sunace international management services vs nlrc

There was an implied revocation of its agency relationsip with its foreign principal when, after the
termination of the original employment contract, the foreign principal directly negotiated with Divina and
entered into a new and separate employment contract in Taiwan.

10. People vs Gallardo

When the Labor Code speaks of illegal recruitment “committed against three (3) or more persons
individually or as a group,” it must be understood as referring to the number of complainants in each case
who are complainants therein, otherwise, prosecutions for single crimes of illegal recruitment can be
cumulated to make out a case of large scale illegal recruitment. In other words, a conviction for large-scale
illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons
whether individually or as a group. 

11. Marsaman Manning Agency vs NLRC

the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his
salaries for the unexpired portion of his employment contract or three months salary for every year of the
unexpired term, whichever is less, comes into play only when the employment contract concerned has a
term of at least one year or more (Cajeras was contracted for 10 months only). 

12. Serrano vs Gallant Maritim Service

The subject clause “or for three months for every year of the unexpired term, whichever is less” in the 5th
paragraph of Section 10 of Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL.

13. Yap vs Thenamaris Ship’s Management

The aforesaid provision of “three months” violates the equal protection clause of the Constitution as it only
applies to overseas workers with less than one year contracts and not to local workers with fixed term
employment and also not to overseas workers with unexpired portion of one year or more in their contract.

14. Skipper’s United Pacific vs Doza

 the Supreme Court found the dismissal of De Gracia, et al. to be illegal since Cosmoship merely sent a
telex to Skippers, the local manning agency, claiming that De Gracia, et al. were repatriated because the
latter voluntarily pre-terminated their contracts.

15. PERT/CPM Manpower Exponent co vs Vinuy

 Amendment introduced by RA 10022 cannot be given retroactive application because it will result in an
impairment of right that had accrued to the respondents by virtue of Serrano ruling.

16. Sameer Overseas Placement Agency vs Cabiles

unconstitutional was Section 7 of Republic Act No. 10022 which provides that “in case of termination of
overseas employment without just, valid, or authorized cause… the migrant worker shall be entitled… to his
salaries for the unexpired portion of his employment contract or for three months for every year of the
unexpired term, whichever is less.” What made the provision unconstitutional is the phrase “or for three
months for every year of the unexpired term, whichever is less” as this violates the equal protection clause
and substantive due process enshrined in the Constitution.

Cases on Labor Standards

1. NASECO v NLRC
The civil service does not include Government owned or controlledcorporations (GOCC) which are
organized as subsidiaries of GOCC under the general corporation law

2. National Sugar Refineries Corp vs NLRC

The mere fact that ann employee is designated “manager” does not ipso facto make him one. Designation
should be reconciled with the actual job description of the employee, for it is the Job Description that
determines the nature of employment.”

3. Makati Haberdashery Inc vs NLRC

Because the workers were proven to be regular employees, they shall be entitled to minimum wages.

4. Labor Congress of the Phil vs NLRC

The failure to work for one day, which resulted in the spoilage of cheese curls does not amount to
abandonment of work. The deliberate and unjustified refusal to resume employment and not mere absence
that constitutes abandonment. 

5. Jose Rizal College vs NLRC

Regular holidays specified as such by law are known to both school and faculty members as “no class
days,”certainly the latter do not expect payment for said unworked days and this was clearly in their minds
when they entered into the teaching contracts.

6. Lambo vs. NLRC G.R. No. 111042 October 26,1999

To be sure, not all quitclaims are per se invalid or against public policy.  But those (1) where there is clear
proof that the waiver was wangled from an unsuspecting or gullible person or (2) where the terms of
settlement are unconscionable on their face are invalid.

7. UFE VS. Vivar Jr. G.R. No. 79255 January 20, 1992
that the grant of holiday pay be effective, not from the date of  promulgation of the Chartered Bank case
nor from the date of effectivity of the Labor Code, butfrom October 23, 1984, the date of promulgation of the
  IBAA case.
 8. Autobus Transport Systems Inc. vs. Bautista G.R. No. 156367 May 16,2005
The Supreme Court emphasized that it does not mean that just because an employee is paid on
commission basis he is already barred to receive service incentive leave pay.

9. Mercidar Fishing Corporation vs. NLRC G.R. No. 112574 October 8,1998
Although fishermen perform non-agricultural work away from their employer’s business offices, the fact
remains that throughout the duration of their work they are under the effective control and supervision of the
employer throught the vessel’s patron or master. Thus, Fishermen are not field personnels.

10. Duterte vs. Kingswood Trading Co. Inc. G.R. No. 160325 October 4,2007
The employer, before it can legally dismiss its employee on the ground of disease, must adduce a
certification from a competent public authority that the disease of which its employee is suffering is of such
nature or at such a stage that it cannot be cured within a period of six months even with proper treatment.

11. Asian Transmission Corporation vs. Court of Appeals G.R. No. 144664 March 15, 2004
S i n c e   a   w o r k e r   i s e n t i t l e d   t o   t h e   e n j o y m e n t   o f   t e n   ( 1 0 )   p a i d regular holid
a y s ,   t h e   f a c t   t h a t   t w o   h o l i d a y s f a l l o n t h e s a m e d a t e s h o u l d n o t o p e r a t e t o reduce
to nine the ten holiday pay benefits a worker is entitled to receive

12. San Miguel Corporation vs. Court of Appeals, G.R. No. G.R. No. 146775.  January 30, 2002
 there should be nodistinction between Muslims and non-Muslimsas regards to payment of
benefits for Muslimholidays

13. SSS v. SSS Supervisors Union-CUGCO, 117 SCRA 746

The age-old rule governing the relation between labor and capital, or management and employee of a "fair
day's wage for a fair day's labor" remains as the basic factor in determining employees' wages, and for that
matter backwages. If there is no work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally locked out, or suspended

14. National Waterworks and Sewerage Authority vs. NWSA Consolidated Unions, et al., G.R. No. L-18939
August 31, 1964
One of the distinguishing characteristics by which a managerial employee may be known as expressed in
the explanatory note of Republic Act No. 2377 is that he is not subject to the rigid observance of regular
office hours. The true worth of his service does not depend so much on the time he spends in office but
more on the results he accomplishes. In fact, he is free to go out of office anytime.

15. Eastern Telecommunications Philippines, Inc. v. Eastern Telecoms Employees Union G.R. No. 185665,
February 8,2012
A bonus is a gratuity or act of liberality of the giver which the recipient cannot demand as amatter of right.
The grant of a bonus is basically a management prerogative which cannot be forced upon the employer who
maynot be obliged to assume the onerous burden of granting bonuses. However, a bonus becomes a
demandable or enforceableobligation if the additional compensation is granted without any conditions
imposed for its payment. In such case, the bonus istreated as part of the wage, salary or compensation of
the employee.

16. Linton Commercial Co. Inc. vs. Hellera, G.R. No. 163147, October 10,2007
the validity of the reduction of working hours, taking into consideration the ff: arrangement was temporary, it
was a more humane solution instead of retrenchment of personnel, notice and consultations with workers,
 consensus on how to solve problems and sufficient proof that company was suffering a substantial
loss. Management prerogative must be exercised in good faith and with due regard to the rights of labor.

17. Bisig Manggagawa sa Tryco vs. NLRC, G.R. No. 151309, October 15,2008
Management prerogative of transferring and reassigning employees from one area of operation to another
in order to meet the requirements of the business is therefore generally not constitutive of constructive
dismissal. 

18. Honda Philippines Inc. vs. Samahan ng Malayang Manggagawa sa Honda G.R. No. 145561 June 15,2005
Payments for sick, vacation and maternity leaves, night differentials, regular holiday pay and premiums for
work done on rest days and special holidays are excluded from the computation of basic salary. Pro-rating
an employee’s 13th month pay is to undermine the wisdom behind such grant.

19. GAA vs. COURT OF APPEALS, G.R. No. L-44169 December 3, 1985.
Article 1708 of the Civil Code provides: “The laborer's wage shall not be subject to execution or
attachment,except for debts incurred for food, shelter, clothing and medical attendance." It is beyond dispute that
petitioner is not an ordinary or rank and file laborer but a responsibly place employee, of El
Grande Hotel, responsible for planning, directing, controlling, and coordinating the
activitiesof all housekeeping personnel so as to ensure the cleanliness, maintenance and
orderliness of allguestrooms, function rooms, public areas, and the surroundings of the hotel.
Considering the importanceof petitioner's function in El Grande Hotel, it is undeniable that petitioner is occupying a position
equivalent to that of a managerial or supervisory position. We do not think that the legislature intended the exemption in Art.1708 of th
NCC to operate in favour of any laboring men or women in the sense that their work is manual.

20. Prubankers Association vs. Prudential Bank and Trust Co. G.R. No. 131247 Jan. 25,1999
A disparity in wages between employees holding similar positions but indifferent regions does not constitute
wage distortion as contemplated by law. –Different regional wages are mandated by the law (specifically RA
6727) as there isrecognition that there exist regional disparities in the cost of living. RA 6727 recognizesthat
there are different needs for the different situations in different regions of the country

21. Metropolitan Bank and Trust Company Employees Union-ALU-TUCP vs. NLRC G.R. No. 102636 Sept.
10,1993
Wage Distortion means a situation where an increase in prescribed wage rates results in the
elimination or severe contradiction of intentional quantitative differences in wage
or salaryrates between and among employee groups in an establishment as to effectively obliterate the
distinctions embodied in such wage structure based on skills, length of service, or other logical bases of
differentiation.

22. Mabeza vs. NLRC, G.R. No. 118506, April 18,1997

It is true that loss of confidence is a valid ground to dismiss an employee. But this is ideally only applied to
workers whose positions require a certain level or degree of trust particularly those who are members of the
managerial staff. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property
from the property custodian each day and who has to account for each and every towel or bedsheet utilized
by the hotel’s guests at the end of her shift would not fall under any of these two classes of employees for
which loss of confidence, if ably supported by evidence, would normally apply.

23. Philippine Duplicators Inc. vs. NLRC G.R. No. 110068, February 15,1995
Productivity bonuses are generally tied to the productivity, or
c a p a c i t y   f o r   r e v e n u e   p r o d u c t i o n ,   o f   a   c o r p o r a t i o n ;   s u c h   b o n u s e s closely resemble
 profit-sharing payments and have no clear directorn e c e s s a r y r e l a t i o n t o t h e a m o u n t o f w o r k
a c t u a l l y d o n e b y e a c h individual employee. More generally, a bonus is an amount grantedand paid
ex gratia to the employee; its payment constitutes an
acto f   e n l i g h t e n e d   g e n e r o s i t y   a n d   s e l f
i n t e r e s t   o n   t h e   p a r t   o f   t h e employer, rather than as a demandable or enforceable
obligation.S i n c e   p r o d u c t i v i t y   b o n u s   i s   n o t
d e m a n d a b l e ,   t h e n   i t   c a n n o t   b e considered part of basic salary when time comes to
compute 13 th month pay

24. Boie-Takeda Chemicals, Inc. vs. Dela Serna, G.R. No. 92174
The exigencies of the work of seafearers necessitates that they be employed on a contractual basis. Thus,
even with the continued r-hiring by respondent company of petitioner to serve as radi officer onboard he
former’s different vessels, this should be interpreted not as a basis for regularization but rather a series of
contract renewals.

25. Philippine Fuji Xerox Corp. vs. Trajano, G.R. No. 102552, March 24,1994
In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or
guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work
period. Commissions are given for extra efforts exerted in consummating sales or other related transactions.
They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary."

26. PT&TC vs. NLRC, G.R. No. 99858, June 5,1995

The policy of not accepting or considering as disqualified from work any woman worker who contracts
marriage runs afoul of the test of and the right against afforded all women workers by our labor laws and by
no less than the Constitution. While it is true that the parties to a contract may establish any agreements,
terms and conditions that may deem convenient, the same should not be contrary to law, morals, good
customs, public order or public policy.
27. Barayoga vs. APT, G.R. No. 160073, October 24,2005
Workers' claims for unpaid wages and monetary benefits cannot be paid outside of a
Bankruptcy or judicial liquidation proceedings against the employer. It is settled that the application of 
Article 110 of the Labor Code  is contingent upon the institution of those proceedings, during which all
creditorsare convened,their claims ascertained and inventoried, and their preferences deter
mined. Assured thereby is an orderly determination of the preference given to creditors'
claims; andpreserved in harmony is the legal scheme of classification, concurrence and preference of
credits inthe Civil Code, the Insolvency Law, and the Labor Code

28. Kaisahan at Kapatiran ng Mga Manggagawa at Kawani sa MWC-East Zone vs. Manila Water Company Inc.
G.R. No. 174179, November 16,2011
The award by the NLRC cannot be taken to mean an additional grant of attorney’s fees, in violation of the
ten percent (10%) limit under Article 111 of the Labor Code since it rests on an entirely different legal
obligation than the one contracted under the MOA.  Simply stated, the attorney’s fees contracted under the
MOA do not refer to the amount of attorney’s fees awarded by the NLRC

29. Yrasuegui vs. PAL G.R. No. 168081,October 17,2008

Bona Fide Occupational Qualification:
employment in particular jobs may not be limited to persons of a particular sex, religion or national origin
unless the employer can show that sex, religion or national origin is an actual qualification for performing the
job. BFOQ is valid provided that it reflects an inherent quality reasonably necessary for satisfactory job
performance
30. PT&TC vs. NLRC G.R. No. 118978, May 23,1997
 Same as above

31. Star Paper Corp. vs. Simbol, G.R. No. 164774,April 12,2006
ARTICLE 136. Stipulation against marriage. – It shall be unlawful for an employer to require as a condition
of employment or continuation of employment that a woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated,
or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason
of her marriage.

32. Duncan Association of Detailman-PTGWO vs. Galxo Welcome Philippines Inc. G.R. No. 162994 September
17,2004
 The prohibition against pesonal or marital relationships with employees of competitor companies upon
Glaxo's employees is reasonable under the circumstances because relationships of that nature might
compromise the interests of the company. That Glaxo possesses the right to protect its economic interest
cannot be denied.

33. Domingo vs. Rayala, G.R. No. 155831, February 18,2008

It is enough that respondent's acts result in creating an intimidating, hostile, or offensive environment for the
employee, which was clearly manifested by the fact that Domingo filed for leave of absence and requested
transfer to another unit.

CASES ON CONTRACTING

1. Aliviado vs. Procter & Gamble Phils., Inc., G.R. No. 160506, March 9,2010
“control test” is only one of the factors that will be considered in determining whether there is labor-only
contracting.  The existence of any one of the above factors would be sufficient.

2. San Miguel Corporation v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003
While petitioner’s checkers may not have stayed the full eight hours in the workplace because they had to
leave for their office to make their reports, their attendance need not be continuous to be considered
constant and therefore an indication of control. We find in fact that they maintained sufficient presence at the
workplace to be able to pinpoint the workers whose performance was not at par and to report who they are.

3. Government Service Insurance System v. National Labor Relations Commission G.R. No. 180045,
November 17,2010
Petitioner cannot be allowed to deny its obligation to respondents after it had benefited from their services.
So long as the work, task, job, or project has been performed for petitioner’s benefit or on its behalf, the
liability accrues for such services.

4. New Golden City Builders & Development Corp. v. Court of Appeals, 463 Phil. 821, 829 [2003])  
The test to determine the existence of independent contractorship is whether one claiming to be an
independent contractor has contracted to do the work according to his own methods and without being
subject to the control of the employer, except only to the results of the work.

CASES ON TERMINATION, JUST/AUTHORIZED

CAUSES/BACKWAGES/REINSTATEMENT

1. Jo Cinema Corporation v. Abellana, G.R. No. 132837, June 28, 2001, 360 SCRA 142, 148
 The employee was placed under preventive suspension for 20 days for unauthorized encashment of check,
before the lapse of said period and while the investigation was on-going, she filed a case for illegal
dismissal. The Supreme Court ruled that she was not dismissed. She could not have been dismissed on the
day she was preventively suspended because a formal investigation was still being conducted. In fact, she
even attended said investigation where she admitted having encashed the checks. If she was indeed
dismissed on said date, as she claims, petitioners would not have continued with he investigation.
Undoubtedly, the employee pre-empted the outcome of the investigation by filing a complaint for illegal
dismissal. Thus, it was she who signified her intention not to report for work when she filed the instant case.

2. Industrial & Transport Equipment, Inc. v.Tugade, G.R. No. 158539, January 15,2009
Their complaint for illegal dismissal was premature, since after the expiration of the suspension period, they
refused despite due notice to report for work.

3. Caltex Philippines, Inc. v. Agad, G.R. No. 162017, April 23, 2010, 619 SCRA 196, 207, citing
Misconduct has been defined as a transgression of some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment.  To
be serious, the misconduct must be of such grave and aggravated character.

4. AMA Computer College-East Rizal v. Ignacio, G.R. No. 178520, June 23, 2009, 590 SCRA 633
Gross negligence has been defined as the want or absence of even slight care or diligence as to amount to
a reckless disregard of the safety of person or property.  It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. To constitute a just cause for termination of employment, the
neglect of duties must not only be gross but habitual as well.  The single or isolated act of negligence does
not constitute a just cause for the dismissal of the employee. 

5. St. Michael’s Institute, et al. vs. NLRC, G.R. No. 145280, December 4, 2001; Department of Labor Manual,
Sec. 4343.01

6. Philippine Aeolus Automotive United Corporation v. NLRC, G.R. No. 124617, April 28,2000
Even when an employee is found to have transgressed the employer's rules, in the actual imposition of
penalties upon the erring employee, due consideration must still be given to his length of service and the
number of violations committed during his employment. Where a penalty less punitive would suffice,
whatever missteps may have been committed by the employee ought not to be visited with a consequence
so severe such as dismissal from employment.

7. Libres vs. NLRC, National Steel Corp. et al., 307 SCRA 675 [1999])
“It is the  the duty of every employer to protect his employees from oversexed superiors.”

8. Royo vs. NLRC, 256 SCRA 639 [1996]

FIGHTING WITHIN THE PREMISES OF A COMPANY IS A JUST CAUSE FOR TERMINATING ONE'S
EMPLOYMENT. - We hold that there was a just and valid cause for the dismissal of petitioners.  There is no
question that they beat up Mario Alvarez, inflicting on him physical injuries, for which they were convicted of
slight physical injuries by the Municipal Trial Court.  The matter cannot be treated lightly.  We agree with the
NLRC that petitioners committed serious misconduct within meaning of Art. 282(a) of the Labor Code,
providing for the dismissal of employees.  The mauling incident was not just a private matter which had no
effect on the interests of the company.  The fact is that petitioners mauled Alvarez because the latter had
reported them to the management for alleged anomalies committed against the company.  Even if it was a
purely private quarrel between petitioners and Alvarez, the fact is that, as a result of what they had done,
they disturbed the peace in the company and committed a breach of its discipline.  We have held in several
cases that fighting within the premises of a company is a just cause for terminating one's employment.
 9. Asian Design and Manufacturing Corp. vs. Hon. Deputy Minister of Labor, 142 SCRA 79 [1986])
Misconduct has been defined as improper or wrong conduct.  It is the transgression of some established
and definite rule of action, a forbidden act, a dereliction of duty, willful character, and implies wrongful intent
and not mere error of judgment.  The misconduct to be serious must be of such grave and aggravated
character and not merely trivial and unimportant.  Such misconduct, however serious, must nevertheless be
in connection with the employee’s work to constitute just cause for his separation. [20]   Thus, for misconduct
or improper behavior to be a just cause for dismissal, (a) it must be serious; (b) must relate to the
performance of the employee’s duties; and (c) must show that the employee has become unfit to continue
working for the employer.[21]  Indeed, an employer may not be compelled to continue to employ such person
whose continuance in the service would be patently inimical to his employer’s business.

10. Padilla vs. NLRC and San Beda College, 273 SCRA 457 [1997])
The essence of due process in administrative proceedings is the opportunity to explain one’s side or a
chance to seek reconsideration of the action or ruling complained of.[7] Thus, the Labor Code requires the
employer to furnish the employee with a written notice containing a statement of the cause for
termination and to afford said employee ample opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.  The employer is also required to notify the worker in
writing of the decision to dismiss him, stating clearly the reasons therefore. [8] In the instant case, SBC amply
complied with the abovementioned requisites.

11. Chua-Qua vs. Clave G.R. No. 49549 August 30, 1990
“Private respondent [the school] utterly failed to show that petitioner [30-year old lady teacher] took
advantage of her position to court her student [16-year old]. If the two eventually fell in love, despite the
disparity in their ages and academic levels, this only lends substance to the truism that the heart has
reasons of its own which reason does not know. But, definitely, yielding to this gentle and universal emotion
is not to be so casually equated with immorality. The deviation of the circumstances of their marriage from
the usual societal pattern cannot be considered as a defiance of contemporary social mores.”

12. Santos Jr. vs. NLRC, G.R. No. 115795 March 6, 1998
A teacher, both in his official and personal conduct, must display exemplary behavior. He must freely and
willingly accept restrictions on his conduct that might be viewed irksome by ordinary citizens. In other words,
the personal behavior of teachers, in and outside the classroom, must be beyond reproach.

13. Villarama vs. NLRC, G.R. No. 106341 September 2, 1994

As a managerial employee, petitioner is bound by a more exacting work ethics. He succumbed to his moral perversity
and perpetrated against his subordinate, he provides justifiable ground for his dismissal for lack of trust and
confidence. Sexual harassment is reprehensible enough but more when inflicted by those with moral ascendancy
over their victims.

14. Gilles v. Court of Appeals, G.R. No. 149273, June 5, 2009

the law recognizes and resolves such a situation in favor of the employees in order to protect their rights
from the coercive acts of the employer. Resignation contemplates a voluntary act; thus, an employee who is
forced to relinquish his position due to the employer’s unfair or unreasonable treatment is deemed to have
been illegally terminated or discharged. The test of constructive dismissal is whether a reasonable person in
the employee’s position would have felt compelled to give up his position under the circumstances.

15. Westin Philippine Plaza Hotel vs. NLRC, G. R. No. 121621, May 3, 1999)
 the willfulness of private respondent’s insubordination was shown by his continued refusal to report to his
new work assignment.  Thus, upon receipt of the order of transfer, private respondent simply took an
extended vacation leave.  Then, when he reported back to work, he did not discharge his duties as linen
 room attendant despite repeated reminders from the personnel office as well as his union.  Worse, while he
came to the hotel everyday, he just went to the union office instead of working at the linen room.  More than
that, when he was asked to explain why no disciplinary action should be taken against him, private
respondent merely questioned the transfer order without submitting the required explanation. Based on the
foregoing facts, private respondent’s intransigence was very evident.

16. Allied Banking Corporation vs. Court of Appeals , G.R. No. 144412.  November 18, 2003
The rule is that the transfer of an employee ordinarily lies within the ambit of the employer’s
prerogatives.[23] The employer exercises the prerogative to transfer an employee for valid reasons and
according to the requirement of its business, provided the transfer does not result in demotion in rank or
diminution of the employee’s salary, benefits and other privileges. [24] In illegal dismissal cases, the employer
has the burden of showing that the transfer is not unnecessary, inconvenient and prejudicial to the displaced
employee.[25]
The constant transfer of bank officers and personnel with accounting responsibilities from one
branch to another is a standard practice of Allied Bank, which has more than a hundred branches
throughout the country

17. Homeowners Savings and Loan Association, Inc. v. NLRC, G.R. No. 97067, 26 September 1996, 262
SCRA 406)

The acceptability of the proposition that transfer made by an employer for an illicit or underhanded purpose
– i.e., to defeat an employee’s right to self-organization, to rid himself of an undesirable worker, or to
penalize an employee for union activities – cannot be upheld is self-evident and cannot be gainsaid.  The
difficulty lies in the situation where no such illicit, improper or underhanded purpose can be ascribed to the
employer, the objection to the transfer being grounded solely upon the personal inconvenience or hardship
that will be caused to the employee by reason of the transfer.

18. Philippine Industrial Security Agency Corporation v. Aguinaldo, G.R. No. 149974, June 15, 2005, 460 SCRA
229, 239;
 A transfer amounts to constructive dismissal when the transfer is unreasonable, unlikely, inconvenient,
impossible, or prejudicial to the employee. 

19. Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004, 433 SCRA 756, 765-766
In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign
employees from one office or area of operation to another -- provided there is no demotion in rank or
diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made
in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is
inherent in the right of employers to control and manage their enterprise effectively. The right of employees
to security of tenure does not give them vested rights to their positions to the extent of depriving
management of its prerogative to change their assignments or to transfer them. 

20. Floren Hotel v. National Labor Relations Commission, G.R. No. 155264, May 6, 2005, 458 SCRA 128, 145;
diminution of benefits of an employee may constitute constructive dismissal. This is “an involuntary
resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when
there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to the employee.” 
21. Jarcia Machine Shop and Auto Supply, Inc. v. NLRC, G.R. No. 118045, January 2, 1997, 266 SCRA 97,
109)
‘In case of constructive dismissal, the employer has the burden of proving that the transfer and demotion of
an employee are for valid and legitimate grounds such as genuine business necessity.  Particularly, for a
transfer not to be considered a constructive dismissal, the employer must be able to show that such transfer
is not unreasonable, inconvenient, or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits.  Failure of the employer to overcome this burden of
proof, the employee’s demotion shall no doubt be tantamount to unlawful constructive dismissal.’

22. Damasco vs. NLRC, G. R. No. 115755, December 4, 2000

As to Sia’s allegation that Ms. Damasco committed serious misconduct or willful disobedience of lawful
order in connection with her work, we find no tenable support.  Even if Sia directed her to be assigned at his
store in Metro Manila, her act of refusing to be detailed in Metro Manila could hardly be characterized a
willful or intentional disobedience of her employer’s order. It was Sia’s order that appears to us whimsical if
not vindictive.  Reassignment to Metro Manila is prejudicial to Ms. Damasco, as she and her family are
residing in Olongapo City. This would entail separation from her family and additional expenses on her part
for transportation and food. Damasco’s reassignment order was unreasonable, considering the attendant
circumstances.

23. Phil. Telegraph and Telephone Corp. v. Laplana. G.R. No. 76645, July 23, 1991, 199 SCRA 485
The situation here presented is of an employer transferring an employee to another office in the exercise of
what it took to be sound business judgment and in accordance with pre-determined and established office
policy and practice, and of the latter having what was believed to be legitimate reasons for declining that
transfer, rooted in considerations of personal convenience and difficulties for the family. Under these
circumstances, the solution proposed by the employee herself, of her voluntary termination of her
employment and the delivery to her of corresponding separation pay, would appear to be the most
equitable. Certainly, the Court cannot accept the proposition that when an employee opposes his employer's
decision to transfer him to another work place, there being no bad faith or underhanded motives on the part
of either party, it is the employee's wishes that should be made to prevail.

24. Dosch v. NLRC, 208 Phil. 259; 123 SCRA 296 (1983).
There can be no dispute that the constitutional guarantee of security of tenure mandated under Section 9,
Article 2, 1973 Constitution applies to all employees and laborers, whether in the government service or in
the private sector. The fact that petitioner is a managerial employee does not by itself exclude him from the
protection of the constitutional guarantee of security of tenure. Even a manager in a private concern has the
right to be secure in his position, to decline a promotion where, although the promotion carries an increase
in his salary and rank but results in his transfer to a new place of assignment or station and away from his
family. Such an order constitutes removal without just cause and is illegal. Nor can the removal be justified
on the ground of loss of confidence as now claimed by private respondent Northwest, insisting as it does
that by petitioner's alleged contumacious refusal to obey the transfer order, said petitioner was guilty of
insubordination.

25. Escobin vs. NLRC, G.R. No. 118159.  April 15, 1998

 It was grossly inconvenient for the guards who were residents and heads of families in Basilan.   The
guards were not provided with funds to defray their transportation and living expenses.    The dismissal in
this case was too harsh a penalty for the insubordination which was neither willful nor intentional.    The
guards’ failure to answer PISI’s show-cause letters does not negate this conclusion as PISI granted other
guards a second chance to explain, an opportunity it denied Escobin and his group.
26. Yuco Chemical Industries, Inc. vs. Ministry of Labor and Employment, 185 SCRA 727, 730-731, May 28,
1990
The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion and
putting to mind the basic elements of justice and fair play. 5 Having the right should not be confused with the
manner in which that right must be exercised. Thus it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worker. Nor when the real reason is to penalize an employee for his union
activities and thereby defeat his right to self-organization. But the transfer can be upheld when there is no
showing that it is unnecessary, inconvenient and prejudicial to the displaced employee . 6

27. Manila Memorial Park Cemetery, Inc. v. Panado, G.R. No.  167118, June 15, 2006, 490 SCRA 751, 770)
An employer may terminate the services of an employee due to loss of trust and
confidence.  However, the loss must be based not on ordinary breach by the latter of the trust
reposed in him by the former, but, in the language of Article 282(c) of the Labor Code, on willful
breach.  A breach is willful if it is done intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently.  Elsewise stated, it must rest on substantial grounds and not on the employer’s
arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the
mercy of the employer.  It should be genuine and not simulated; nor should it appear as a mere
afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are
improper, illegal or unjustified.  It has never been intended to afford an occasion for abuse because
of its subjective nature.  There must, therefore, be an actual breach of duty committed by the
employee which must be established by substantial evidence.[32] (Underscoring ours.)
 

28. Premiere Development Bank v. Mantal, G.R. No. 167716, March 23, 2006, 485 SCRA 234, 239)
An employer may terminate an employee for fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative. However, the right of an employer to terminate an
employee based on loss of confidence must not be exercised arbitrarily and without just cause. To be a
valid reason for dismissal, loss of confidence must be genuine. Uncorroborated assertions and accusations
by the employer will not suffice, otherwise it will jeopardize the constitutional guarantee of security of tenure
of the employee.

29. National Sugar Refineries Corporation v. National Labor Relations Commission G.R. No. 122277.  February
24, 1998
the Court ruled that supervisory employees should be considered as officers or members of the managerial
staff.  As officers or members of the managerial staff, they are not entitled to overtime, rest day, and holiday
pay.

30. JGB & Associates v. National Labor Relations Commission, G.R. No. 109390.  March 7, 1996; 
Employees enjoy security of tenure; they can only be dismissed for just cause and only after due process. [5] If an
employee is dismissed without just cause, he is entitled to reinstatement with backwages up to the time of his
actual reinstatement,[6] if the contract of employment is not for a definite period; or to the payment of his salaries
corresponding to the unexpired portion of the employment contract, if the contract is for a definite period. [7] If the
dismissal is for a just cause but it was made without due process, the employee is entitled to the payment of an
indemnity.[8]
31. Chua v. National Labor Relations Commission, G.R. No. 146780, March 11, 2005, 453 SCRA 244, 254) 
Gross negligence under Article 282 of the Labor Code, as amended, connotes want of care in the
performance of one’s duties, while habitual neglect implies repeated failure to perform one’s duties for a
period of time, depending upon the circumstances.[25] Clearly, the petitioner’s repeated failure to submit the
DCRs on time, as well as the failure to submit the doctors’ call cards constitute habitual neglect of duties. 
Needless to state, the foregoing clearly indicate that the employer had a just cause in terminating the
petitioner’s employment.

32. National Bookstore, Inc. v. Court of Appeals, G.R. No. 146741.  February 27, 2002)
Significantly, in order to constitute a just cause for the employee’s dismissal, the neglect of duties must not
only be gross but also habitual. Thus, the single or isolated act of negligence does not constitute a just
cause for the dismissal of the employee.[20] Verily, assuming arguendo that private respondents were
negligent, although we find otherwise, it could only be a single or an isolated act that cannot be categorized
as habitual, hence, not a just cause for their dismissal.

33. Abandonment (De Paul/King Philip Custom Tailor v. NLRC, G.R. No. 129824, March 10,1999);
Simple logic should tell us that the receipt of Renato and Priscila Villavecer of the notices sent to them is not
proof that the other private respondents received their notices.  Furthermore, these notices were sent after
private respondents had been dismissed on 6 and 12 April 1993.  By then, the illegal dismissal of the private
respondents was already an accomplished fact.  The letters cannot validate their illegal dismissal.
It must be stressed that abandonment of work does not per se sever the employer-employee relationship.  It is
merely a form of neglect of duty, which is in turn a just cause for termination of employment.   The operative act
that will ultimately put an end to this relationship is the dismissal of the employee after complying with the
procedure prescribed by law.  If the employer does not follow this procedure, there is illegal dismissal.

34. Habitual absenteeism (Challenge Socks Corporation v. Court of Appeals, G.R. No. 165268, November
8,2005); and
Habitual neglect implies repeated failure to perform one’s duties for a period of time.  Buguat’s repeated acts of
absences without leave and her frequent tardiness reflect her indifferent attitude to and lack of motivation in her
work.  Her repeated and habitual infractions, committed despite several warnings, constitute gross misconduct. 
Habitual absenteeism without leave constitute gross negligence and is sufficient to justify termination of an
employee.

35. Continued unexplained absences (Philippine Geothermal, Inc. v. NLRC, G.R. No. 106370, September
8,1994)
Petitioner has not been shown to be without sympathy or concern for Alvarez. He was given fifty (50) days
work-connected accident (WCA) leave with pay to allow him to recuperate from his injury without loss of
earnings. He was allowed to use his leave credits and was actually given an additional fifteen (15) days
WCA leave to allow him to consult his doctors and fully recover from his injuries. Moreover, petitioner gave
Alvarez several warnings to report for work, otherwise, he would face disciplinary sanctions. In spite of these
warnings, Alvarez was absent without official leave (AWOL) for eighteen (18) days. Under company policy,
of which Alvarez was made aware, employees who incur without valid reason  six (6) or more absences are
subject to dismissal.

36. Philippine Airlines, Inc. v. NLRC, G.R. No. 82471, February 18, 1991, 194 SCRA 139
Philippine Airlines (PAL) cannot be legally compelled to continue with the employment of a person
admittedly guilty of gross negligence in the performance of his duties although it was his first offense.  In
 that case, we noted that a mere delay on PAL's flight schedule due to aircraft damage entails problems like
hotel accommodations for its passengers, re-booking, the possibility of law suits, and payment of special
landing fees not to mention the soaring costs of replacing aircraft parts.

37. Fuentes v. National Labor Relations Commission, G.R. No. L-75955, October 28, 1988, 166 SCRA 752
it would be unfair to compel Philippine Banking Corporation to continue employing its bank teller.  In that
case, we observed that although the teller's infraction was not habitual, a substantial amount of money was
lost. The deposit slip had already been validated prior to its loss and the amount reflected thereon is already
considered as current liabilities in the bank's balance sheet.  Indeed, the sufficiency of the evidence as well
as the resultant damage to the employer should be considered in the dismissal of the employee.  In this
case, the damage went as far as claiming the life of a child.

38. School of the Holy Spirit of Quezon City vs. Taguiam, G.R. No. 165565,July 14,2008
respondent's negligence, although gross, was not habitual. In view of the considerable resultant damage,
however, we are in agreement that the cause is sufficient to dismiss respondent. This is not the first time
that we have departed from the requirements laid down by the law that neglect of duties must be both gross
and habitual.

39. Columbus Philippine Bus Corporation v. NLRC, 417 Phil. 81, 100 [2001]
For a valid finding of abandonment, two (2) factors must be present, viz: (a) the failure to report for work or
absence without valid or justifiable reason; and (b) a clear intention to sever employer-employee
relationship, with the second element as the more determinative factor being manifested by some overt
acts.[15] The herein petitioner failed to present evidence to justify the dismissal of the private
respondents.  The position paper of petitioner merely contains bare allegations that the hiring of private
respondents was purely on commission basis; that they have no working hours; that they are not required to
work everyday and that they work only when they wish to earn.  It also alleged that private respondents
were not dismissed nor suspended, but that they allegedly abandoned their jobs by simply failing to work.

40. Sta. Catalina College v. NLRC, G.R. No. 144483, 19 November 2003)
 HILARIA ABANDONED HER WORK, for which reason, she could not be credited for her services from
1955 to 1970 in determining her retirements benefits for after 1 year of leave of absence in 1971 without her
requesting for extension thereof as in fact she had not been heard from until she resurfaces in 1982 when
she reapplied, she abandoned her teaching position as in fact she was employed elsewhere and effectively
relinquished the retirement benefits that accumulated during said period.

41. Jo vs. NLRC, G.R. No. 121605. February 2, 2000

In determining the existence of an employer-employee relationship, the following elements are considered: 1)
selection and engagement of worker; 2) power of dismissal; 3) the payment of wages; and 4) the power to control the
worker’s conduct, with the latter assuming primacy in the overall consideration. The power of control refers to the
existence of the power and not necessarily to the actual exercise thereof. It is not essential for the employer to
actually supervise the performance of duties of the employee; it is enough that the employer has the right to wield
that power.
42. A’ Prime Security Services Inc. v. NLRC, 220 SCRA 142, 145 [1993]
The Court cannot uphold and give weight to private respondent’s resignation letter (Annex "D"[8]) which appears to
have been written and submitted at the instance of petitioner. Its form is of the company’s and its wordings are more
of a waiver and quitclaim. Moreover, the supposed resignation was not acknowledged before a notary public.
Petitioner’s failure to deny that Sugarland is its sister company and that petitioner absorbed Sugarland’s security
contract and security personnel assumes overriding significance over the resignation theorized upon, evincing
petitioner’s design to ignore or violate labor laws through the use of the veil of corporate personality. The Court
cannot sanction the practice of some companies which, shortly after a worker has become a regular employee,
effects the transfer of the same employee to another entity whose owners are the same, or identical, in order to
deprive subject employee of the benefits and protection he is entitled to under the law.

43. Bombase v. NLRC, 245 SCRA 496, 500 [1995]

the relationship between the petitioner and the officials of private respondent has been strained by too much
antagonism. Officials of private respondent have expressed lack of confidence on petitioner while petitioner has
moved to cite the general manager of private respondent for contempt as indeed he was fined for contempt. Given
this strained relationship, the reinstatement of petitioner will be neither beneficial for her nor her employer.

44. Bristol Myers Squibb (Phils.), Inc. v. Baban, G.R. No. 167449, December 17, 2008, 574 SCRA 198
Respondent anchors his plea of mercy on filial loyalty to his father and the fact that the samples were still going to the
proper parties.  His father’s loss is of no moment since  petitioner  has  a  right  not  to  associate their product with
winning or losing politicians.  It has every right to ensure that the distribution of medical samples is done in the
manner exactly prescribed.  Moreover, his claim that the samples would have still gone to
the  proper  parties  is  wrong.  These products were supposed to have been returned to petitioner or one of its
agents.

45. Philippine Pizza, Inc. v. Bungabong, G.R. No. 154315, May 9,2005
 the employee was not afforded due process despite the dismissal being upon a just cause, considering that he was
not given a fair and reasonable opportunity to confront his accusers and to defend himself against the charge of theft
notwithstanding his having submitted his explanation denying that he had stolen beer from the company dispenser.

46. Mendoza vs. HMS Credit Corporation, G.R. No. 187232, April 17,2013
It is evident that although there was a just cause in terminating the services of Mendoza, respondents were amiss in
complying with the two-notice requirement. Following prevailing jurisprudence on the matter, if the dismissal is based
on just cause, then the non-compliance with non-procedural due process should not render the termination from
employement illegal or ineffectual. Instead, the employer must indemnify the employee in the form of nominal
damages

47. Community Rural Bank of San Isidro (N.E.), Inc. v. Paez, G.R. No. 158707, November 27,2006
in the case of supervisors or personnel occupying positions of responsibility, loss of trust justifies termination.[45]
Loss of confidence as a just cause for termination of employment is premised on the fact that an employee
concerned holds a position of trust and confidence.  This situation holds where a person is entrusted with confidence
on delicate matters, such as the custody, handling, or care and protection of the employer’s property.  But, in order to
constitute a just cause for dismissal, the act complained of must be “work-related” such as would show the employee
concerned to be unfit to continue working for the employer.

48. Concepcion vs. Minex Import Corp., G.R. No. 153569, January 24,2012
It is unfair to require an employer to first be morally certain of the guilt of the employee by awaiting a conviction
before terminating him when there is already sufficient showing of the wrongdoing. Requiring that certainty may
prove too late for the employer, whose loss may potentially be beyond repair. In the present case, no less than the
DOJ Secretary found probable cause for qualified theft against Concepcion. That finding was enough to justify her
termination for loss of confidence.

49. Nicolas v. National Labor Relations Commission, (327 Phil. 883, 886-887 (1996)
 Under the law, proof beyond reasonable doubt is required to sustain a criminal conviction, an inapplicable
requirement in a labor complaint.  In fact, and as correctly ruled by the NLRC, the judgment in a criminal case has no
binding or conclusive effect in a labor case.  Conviction of an employee in a criminal case is not indispensable to
warrant an employee’s dismissal.
50. Reno Foods, Inc. v. Nagkakaisang Lakas ng Manggagawa (NLM) – Katipunan, G.R. No. 164016, 15 March 2010,
615 SCRA 240
 
Criminal cases require proof beyond reasonable doubt while labor
disputes require  only   substantial  evidence,   which  means  such   relevant  evidence a reasonable mind might accept as
adequate to justify a conclusion.[20]  The evidence in this case was reviewed by the appellate court and two labor tribunals
endowed with expertise on the matter – the Labor Arbiter and the NLRC.  They all found substantial evidence to conclude
that Capor had been validly dismissed for dishonesty or serious misconduct.  It is settled that factual findings of quasi-judicial
agencies are generally accorded respect and finality so long as these are supported by substantial evidence.  In the instant case,
we find no compelling reason to doubt the common findings of the three reviewing bodies.

51. Lynvil Fishing Enterprises, Inc. v. Ariola, G.R. No.181974, February 1,2012
 that proof beyond reasonable doubt of an employee’s misconduct is not required when loss of confidence is the
ground for dismissal. It is sufficient if the employer has “some basis” to lose confidence or that the employer has
reasonable ground to believe or to entertain the moral conviction that the employee concerned is responsible for the
misconduct and that the nature of his participation therein rendered him absolutely unworthy of the trust and
confidence demanded by his position.

52. Lim v. National Labor Relations Commission, G.R. No. 118434, July 26, 1996, 259 SCRA 485, 496-497
 “gross inefficiency falls within the purview of “other causes analogous to the foregoing,” and constitutes, therefore,
just cause to terminate an employee under Article 282 of the Labor Code.  One is analogous to another if it is
susceptible of comparison with the latter either in general or in some specific detail; or has a close relationship with
the latter.[32] “Gross inefficiency” is closely related to “gross neglect,” for both involve specific acts of omission on the
part of the employee resulting in damage to the employer or to his business. 

53. Leonardo v. National Labor Relations Commission,  G.R. No. 125303 June 16, 2000, 333 SCRA 589, 598-599
the right to demote an employee also falls within the category of management prerogatives.  An employer is entitled
to impose productivity standards for its workers, and in fact, non-compliance may be visited with a penalty even more
severe than demotion. Failure to observe prescribed standards of work, or to fulfill reasonable work assignments due
to inefficiency may constitute just cause for dismissal.

54. Aliling v. Feliciano, G.R. No. 185829, April 25,2012

The letter-offer to Aliling states that the regularization standards or the performance norms to be used are still to be
agreed upon by him and his supervisor. Moreover, Aliling was assigned to GX trucking sales, an activity entirely
different to the Seafreight Sales for which he was originally hired and trained for. In the present case, there was no
proof that Aliling was informed of the standards for his continued employment, such as the sales quota, at the time of
his engagement.

55. Cathedral School of Technology v. NLNRC, G.R. No. L-101438 October 13, 1992)
 there can be no award for backwages, for it must be pointed out that while backwages are granted on the basis of
equity for earnings which a worker or employee has lost due to his illegal dismissal, 24 where private respondent's
dismissal is for just cause, as is the case herein, there is no factual or legal basis to order payment of backwages;
otherwise, private respondent would be unjustify enriching herself at the expense of petitioners. 25 Where the
employee's dismissal was for a just cause, it would be neither fair nor just to allow the employee to recover
something he has not earned or could not have earned
56. Oania v. National Labor Relations Commission, G.R. Nos. 97162-64, 1 June 1995, 244 SCRA 669, 674
Violation of a company rule prohibiting the infliction of harm or physical injury against any person under the particular
circumstances provided for in the same rule may be deemed analogous to "serious misconduct" stated in Art. 282 (a)
above. To repeat, however, there is no substantial evidence definitely pointing to petitioners as the perpetrators of
the mauling of Malong. What is an established fact is that, after investigation, private respondent dismissed them
and, thereafter, a criminal complaint was filed against petitioners

M.F. VIOLAGO OIL TANK TRUCKS VS NLRC

There is constructive dismissal of employees when the proprietor of an oil-tank trucking business, withdrew the trucks
driven by them for no just cause and without prior clearance from the Ministry of Labor and when the employer
unilaterally reduced the employees' wages in 1979 without their consent and with no Ministry of Labor's authority.

PHIL SHEET METAL WORKERS' UNION VS COURT OF INDUSTRIAL RELATIONS

In formulating the “substitutionary” doctrine, the only consideration involved was the employees‘ (principal) interest in
the existing bargaining agreement. The agent’s (union) interest never entered the picture. The majority of the
employees, as an entity under the statute, is the true party in interest to the contract, holding rights through the
agency of the union representative. Thus, any exclusive interest claimed by the agent is defeasible at the will of the
principal. The “substitutionary” doctrine only provides that the employees cannot revoke the validly executed
collective bargaining contract with their employer by the simple expedient of changing their bargaining agent. And it is
in the light of this that the phrase “said new agent would have to respect said contract” must be understood. It only
means that the employees, thru their new bargaining agent, cannot renege on their collective bargaining contract,
except of course to negotiate with management for the shortening thereof.

The “substitutionary” doctrine cannot be invoked to support the contention that a newly certified collective bargaining
agent automatically assumes all the personal undertakings — like the no-strike stipulation here — in the collective
bargaining agreement made by the deposed union. When BBWU bound itself and its officers not to strike, it could not
have validly bound also all the other rival unions existing in the bargaining units in question. BBWU was the agent of
the employees, not of the other unions which possess distinct personalities.

EDGE APPAREL VS NLRC

Retrenchment, in contrast to redundancy, is an economic ground to reduce the number of employees.  In order to be
justified, the termination of employment by reason of retrenchment must be due to business losses or reverses which
are serious, actual and real.Not every loss incurred or expected to be incurred by the employer will justify
retrenchment, since, in the nature of things, the possibility of incurring losses is constantly present, in greater or
lesser degree, in carrying on the business operations.Retrenchment is normally resorted to by management during
periods of business reverses and economic difficulties occasioned by such events as recession, industrial
depression, or seasonal fluctuations. It is an act of the employer of reducing the work force because of losses in the
operation of the enterprise, lack of work, or considerable reduction on the volume of business.Retrenchment is, in
many ways, a measure of last resort when other less drastic means have been tried and found to be inadequate. A
lull caused by lack of orders or shortage of materials must be of such nature as would severely affect the continued
business operations of the employer to the detriment of all and sundry if not properly addressed.  The institution of
"new methods or more efficient machinery, or of automation" is technically a ground for termination of employment by
reason of installation of labor-saving devices but where the introduction of these methods is resorted to not merely to
effect greater efficiency in the operations of the business but principally because of serious business reverses and to
avert further losses, the device could then verily be considered one of retrenchment.

The general standards or elements needed for the retrenchment to be valid - i.e., that the losses expected are
substantial and not merely de minimis in extent; that the expected losses are reasonably imminent such as can be
perceived objectively and in good faith by the employer; that the retrenchment is reasonably necessary and likely to
effectively prevent the expected losses; and that the imminent losses sought to be forestalled are substantiated[21]
-were adequately shown in the present case.
WILTSHIRE FILE CO. VS NLRC

Redundancy in an employer's personnel force necessarily or even ordinarily refers to duplication of work. That no
other person was holding the same position that private respondent held prior to the termination of his services, does
not show that his position had not become redundant. Indeed, in any well-organized business enterprise, it would be
surprising to find duplication of work and two (2) or more people doing the work of one person. We believe that
redundancy, for purposes of our Labor Code, exists where the services of an employee are in excess of what is
reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is
superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring
of workers, decreased volume of business, or dropping of a particular product line or service activity previously
manufactured or undertaken by the enterprise.

AMERICAN HOME ASSURANCE CO. VS NLRC

While it is true that an employer’s exercise of management prerogatives, with or without reason, does not per se
constitute unjust discrimination, such exercise, if clearly shown to be in grave abuse of discretion, may be looked into
by the courts.  Indeed, the hiring, firing, transfer, demotion, and promotion of employees are traditionally identified as
management prerogatives.  However, they are not absolute management prerogatives.  They are subject to
limitations found in law, a collective bargaining agreement, or general principles of fair play and justice

LOPEZ SUGAR CORPORATION VS FRANCO

A redundant position is one rendered superfluous by any number of factors, such as over-hiring of workers,
decreased volume of business, dropping of a particular product line previously manufactured by the company or
phasing out of a service activity priorly undertaken by the business.  Under these conditions, the employer has no
legal obligation to keep in its payroll more employees than are necessary for the operation of its business.
Contrary to the petitioner’s claim, the employer must comply with the following requisites to ensure the validity
of the implementation of a redundancy program: (1) a written notice served on both the employees and the
Department of Labor and Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is
higher; (3) good faith in abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished.

ASUFRIN JS. VS. SAN MIGUEL

The determination that employee’s services are no longer necessary or sustainable and, therefore, properly
terminable is an exercise of business judgment of the employer.  The wisdom or soundness of this judgment is not
subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no violation of law and no
showing that it was prompted by an arbitrary or malicious act. In other words, it is not enough for a company to
merely declare that it has become overmanned. It must produce adequate proof that such is the actual situation to
justify the dismissal of the affected employees for redundancy.

PANLILIO VS NLRC

We have held that it is important for a company to have fair and reasonable criteria in implementing its redundancy
program, such as but not limited to, (a) preferred status, (b) efficiency and (c) seniority

PHILIPPINE CARPET EMPLOYEES ASSOCIATION VS SECRETARY OF LABOR AND EMPLOYMENT

The prerogative of an employer to retrench its employees must be exercised only as a last resort, considering that it
will lead to the loss of the employees’ livelihood.  It is justified only when all other less drastic means have been tried
and found insufficient or inadequate. Moreover, the employer must prove the requirements for a valid retrenchment
by clear and convincing evidence; otherwise, said ground for termination would be susceptible to abuse by scheming
employers who might be merely feigning losses or reverses in their business ventures in order to ease out
employees.  The requirements are:

 
            xxx (1) that the retrenchment is reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de minimis, but substantial, serious, actual
and real, or if only expected, are reasonably imminent as perceived objectively and in good
faith by the employer; (2) that the employer served written notice both to the employees and
to the Department of Labor and Employment at least one month prior to the intended date of
retrenchment; (3) that the employer pays the retrenched employees separation pay
equivalent to one month pay or at least ½ month pay for every year of service, whichever is
higher; (4) that the employer exercises its prerogative to retrench employees in good faith for
the advancement of its interest and not to defeat or circumvent the employees’ right to
security of tenure; and (5) that the employer used fair and reasonable criteria in ascertaining
who would be dismissed and who would be retained among the employees, such as status
(i.e., whether they are temporary, casual, regular or managerial employees), efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
 
          What the law speaks of is serious business losses or financial reverses.  Sliding incomes or decreasing gross
revenues are not necessarily losses, much less serious business losses within the meaning of the law.  The bare fact
that an employer may have sustained a net loss, such loss, per se, absent any other evidence on its impact on the
business, nor on expected losses that would have been incurred had operations been continued, may not amount to
serious business losses mentioned in the law.The employer must also show that its losses increased through a
period of time and that the condition of the company will not likely improve in the near future.

PEPSI COLA PRODUCTS, PHILIPPINES VS MOLON

Retrenchment is defined as the termination of employment initiated by the employer through no fault of the employee
and without prejudice to the latter, resorted by management during periods of business recession, industrial
depression or seasonal fluctuations or during lulls over shortage of materials. It is a reduction in manpower, a
measure utilized by an employer to minimize business losses incurred in the operation of its business.

COCA-COLA BOTTLERS INC VS NLRC

The definition that regular employees are those who perform activities which are desirable and necessary for the
business of the employer is not determinative in this case.  Any agreement may provide that one party shall render
services for and in behalf of another for a consideration (no matter how necessary for the latter's business) even
without being hired as an employee.  This is precisely true in the case of an independent contractorship as well as in
an agency agreement.  The Court agrees with the petitioner's argument that Article 280 is not the yardstick for
determining the existence of an employment relationship because it merely distinguishes between two kinds of
employees, i.e., regular employees and casual employees, for purposes of determining the right of an employee to
certain benefits, to join or form a union, or to security of tenure.  Article 280 does not apply where the existence of an
employment relationship is in dispute.

INTERNATIONAL HARDWARE INC VS NLRC

In case of termination due to the installation of labor-saving devices or redundancy the worker affected thereby shall
be entitled to separation pay equivalent to at least one (1) month pay or to at least one month pay for every year of
service, whichever is higher. However, in case of retrenchment to prevent losses and in cases of closure or cessation
of operations of the establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher.

SEBUGUERO VS NLRC
The requirement of notice to both the employees concerned and the Department of Labor and Employment (DOLE)
is mandatory and must be written and given at least one month before the intended date of retrenchment. In this
case, it is undisputed that the petitioners were given notice of the temporary lay-off. they were already on temporary
lay-off at the time notice should have been given to them is not an excuse to forego the one-month written notice
because by this time, their lay-off is to become permanent and they were definitely losing their employment.

INDUSTRIAL TIMBER CORPORATION VS ABABON

Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to
comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the
employer’s exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article
282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as
the dismissal process was, in effect, initiated by an act imputable to the employee.

AGABON VS NLRC

Where there is just cause for dismissal but due process has not been properly observed by an employer, it would not
be right to order either the reinstatement of the dismissed employee or the payment of backwages to him. In failing,
however, to comply with the procedure prescribed by law in terminating the services of the employee, the employer
must be deemed to have opted or, in any case, should be made liable, for the payment of separation pay.

PHILIPPINE ROBACCO FLUE-CURING AND REDRYING CORPORATION VS NLRC

The amount of separation pay is based on two factors: the amount of monthly salary and the number of years of
service.  Although the Labor Code provides different definitions as to what constitutes “one year of service,” Book Six
does not specifically define “one year of service” for purposes of computing separation pay.  However,  Articles 283
and 284 both state in connection with separation pay that a fraction of at least six months shall be considered one
whole year. 

COCA COLA BOTTLERS VS NLRC

the company is required to notify both the employees concerned and the Department of Labor and Employment
("DOLE") at least one (1) month before the intended date of closure. The notice to the DOLE is, of course, intended
to enable the proper authorities to determine after hearing whether such closure is being done in good faith, i.e., for
bonafide business reasons, or whether, to the contrary, the closure is being resorted to as a means of evading
compliance with the just obligations of the employer to the employees affected.

JAT GENERAL SERVICES VS NLRC

A careful examination of Article 283 of the Labor Code shows that closure or cessation of business operation as a
valid and authorized ground of terminating employment is not limited to those resulting from business losses or
reverses.  Said provision in fact provides for the payment of separation pay to employees terminated because of
closure of business not due to losses, thus implying that termination of employees other than closure of business due
to losses may be valid.

CAFFCO INTERNATIONAL LIMITED VS OFFICE OF THE MINISTER-MINISTRY OF LABOR AND EMPLOYMENT

There are three (3) requirements are necessary for a valid cessation of business operations, namely: (a) service of a
written notice to the employees and to the MOLE at least one (1) month before the intended date thereof; (b) the
cessation of business must be bona fide in character; and (c) payment to the employees of termination pay
amounting to at least one-half (1/2) month pay for every year of service, or one (1) month pay, whichever is higher.

CEBU ROYAL PLANT VS DEPUTY MINISTER OF LABOR

Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his
health or to the health of his co-employees, the employer shall not terminate his employment unless there is a
certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot
be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured
within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The
employer shall reinstate such employee to his former position immediately upon the restoration of his normal health.

ALABANG COUNTRY CLUB VS NLRC

Closure of a business or undertaking due to business losses is the reversal of fortune of the employer whereby there
is a complete cessation of business operations to prevent further financial drain upon an employer who cannot pay
anymore his employees since business has already stopped.
One of the prerogatives of management is the decision to close the entire establishment or to close or abolish
a department or section thereof for economic reasons, such as to minimize expenses and reduce capitalization.While
the Labor Code provides for the payment of separation package in case of retrenchment to prevent losses, it does
not obligate the employer for the payment thereof if there is closure of business due to serious losses.

MERIN VS NLRC

Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character,
conduct and ability separate and independent of each other. While it may be true that petitioner was penalized for his
previous infractions, this does not and should not mean that his employment record would be wiped clean of his
infractions.  After all, the record of an employee is a relevant consideration in determining the penalty that should be
meted out since an employee’s past misconduct and present behavior must be taken together in determining the
proper imposable penalty Despite the sanctions imposed upon petitioner, he continued to commit misconduct and
exhibit  undesirable behavior on board.  Indeed, the employer cannot be compelled to retain a misbehaving
employee, or one who is guilty of acts inimical to its interests.  It has the right to dismiss such an employee if only as
a measure of self-protection.

FILIPRO INC VS THE HON. MINISTER BLAS OPLE

While it is not generally possible for an employee to anticipate when he will be ill or have to attend to some family
problem or emergency, and be able to give prior notice to his employer, he should give such notice when he will be
absent for some other cause, such as when he will attend to some other business elsewhere, for such engagements
can be properly scheduled by him so as not to interfere with his regular working hours and disrupt the operations of
the company in his particular area of assignment. Without prior notice of the employee's absence, the company is not
afforded enough time to get a temporary replacement for him.

MERCURY DRUG CO. INC VS CIR

Even under the Termination Pay Law, the alleged quarrel between private respondent Dayao and one Ranin, the
president of the labor union, in the presence of herein petitioner Mariano Que as manager of petitioner corporation, is
not one of the grounds justifying the dismissal of private respondent Dayao. It is not even analogous to "serious
misconduct or willful disobedience of the orders of his employer or its representative in connection with his work."

FERRER VS NLRC

Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.

PINES CITY EDUCATIONAL CENTER VS NLRC

The amendment to Art. 279 of the Labor Code introduced by Rep. Act. No. 6715 inserted the qualification "full" to the
word "backwages". The intent of the law seems to be clear. The plain words of the statute provide that an employee
who is unjustly dismissed is entitled to FULL backwages from the time of his dismissal to actual reinstatement. The
law provides no qualification nor does it state that income earned by the employee during the period between his
unjust dismissal and reinstatement should be deducted from such backwages. When the law does not provide, the
court should not improvise.chanroblesvirtualawlibrarychanrobles virtual law library

BUSTAMANTE VS NLRC
In accordance with the above provision, an illegally dismissed employee is entitled to his full backwages from the
time his compensation was withheld from him (which , as a rule, is from the time of his illegal dismissal) up to the
time of his actual reinstatement. 
It is true that this Court had ruled in the case of Pines City Educational Center vs. NLRC (G.R. No. 96779, 10
November 1993, 227 SCRA 655) that "in ascertaining the total amount of backwages payable to them (employees),
we go back to the rule prior to the Mercury Drug rule that the total amount derived from employment elsewhere by
the employee from the date of dismissal up to the date of reinstatement, if any, should be deducted therefrom."The
rationale for such ruling was that, the eraning derived elsewhere by the dismissed employee while litigating the
legality of his dismissal, should be deducted from the full amount of backwages which the law grants him upon
reinstatement, so as not to unduly or unjustly enrich the employee at the expense of the employer.

PARAMOUNT VINYL PRODUCTS CORPORATION VS NLRC

Well-settled is the rule that the perfection of an appeal within the statutory or reglementary period is not only
mandatory, but also jurisdictional. Failure to interpose a timely appeal (or a motion for reconsideration) renders the
assailed decision, order or award final and executory that deprives the appellate body of any jurisdiction to alter the
final judgment.

Equitable Banking Corporation (now known as Equitable-PCI Bank) V. Ricardo Sadac G.R No. 164772, June 8,2006:

when a final judgment becomes executory, it thereby becomes immutable and unalterable.  The judgment may no
longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be made by the Court rendering
it or by the highest Court of the land.  The only recognized exceptions are the correction of clerical errors or the
making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of course, where the judgment
is void.

General Baptist Bible College v. National Labor Relations Commission

"The term "backwages without qualification and deduction" means that the workers are to be paid their backwages
fixed as of the time of the dismissal or strike without deduction for their earnings elsewhere during their layoff and
without qualification of their wages as thus fixed; i.e., unqualified by any wage increases or other benefits that may
have been received by their co-workers who are not dismissed or did not go on strike. Awards including salary
differentials are not allowed. The salary base properly used should, however, include not only the basic salary but
also the emergency cost of living allowances and also transportation allowances if the workers are entitled thereto.

Paguio v. Philippine Long Distance Telephone Co., Inc.

The Court has held that in determining entitlement to moral damages, it suffices to prove that the claimant has
suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of. 
Exemplary damages, on the other hand, are granted in addition to moral damages “by way of example or correction
for the public good.”Furthermore, as petitioner was compelled to litigate and incur expenses to enforce and protect
his rights, he is entitled to an award of attorney’s fees. The amount of damages recoverable is, in turn, determined by
the business, social and financial position of the offended parties and the business and financial position of the
offender.

Reyes vs. NLRC, G.R. No. 180551, February 10,2009

Article 279 of the Labor Code provides that an illegally dismissed employee shall be entitled, inter alia, to the
payment of his full backwages, inclusive of allowances and to his other benefits or their monetary equivalent
computed from the time that his compensation was withheld from him, i.e., from the time of his illegal dismissal, up to
the time of his actual reinstatement.  Thus, where reinstatement is adjudged, the award of backwages and other
benefits continues beyond the date of the Labor Arbiter’s Decision ordering reinstatement and extends up to the time
said order of reinstatement is actually carried out

PIONEER TEXTURIZING CORP. and/or JULIANO LIM, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION, PIONEER TEXTURIZING WORKERS UNION and LOURDES A. DE JESUS, respondents.
In case the decision includes an order of reinstatement, the Labor Arbiter shall direct the employer to immediately
reinstate the dismissed or separated employee even pending appeal.  The order of reinstatement shall indicate that
the employee shall either be admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the employer, merely reinstated in the payroll.”
In declaring that reinstatement order is not self-executory and needs a writ of execution, the Court, in
Maranaw, adverted to the rule provided under Article 224.  We said:
“It must be stressed, however, that although the reinstatement aspect of the decision is immediately
executory, it does not follow that it is self-executory.  There must be a writ of execution which may be
issued motu proprio or on motion of an interested party.  Article 224 of the Labor Code provides:

‘ART. 224.  Execution of decisions, orders or awards. –(a) The Secretary of Labor and Employment or
any Regional Director, the Commission or any Labor Arbiter, or med-arbiter or voluntary arbitrator
may, motu propio or on motion of any interested party, issue a writ of execution on a judgment within
five (5) years from the date it becomes final and executory …’

Pfizer Inc. vs. Velasco

Reinstatement, as a labor law concept, means the admission of an employee back to work prevailing prior to his
dismissal; restoration to a state or position from which one had been removed or separated, which presupposes that
there shall be no demotion in rank and/or diminution of salary, benefits and other privileges; if the position previously
occupied no longer exists, the restoration shall be to a substantially equivalent position in terms of salary, benefits
and other privileges.19 Management’s prerogative to transfer an employee from one office or station to another
within the business establishment, however, generally remains unaffected by a reinstatement order, as long as there
is no resulting demotion or diminution of salary and other benefits and/or the action is not motivated by consideration
less than fair or effected as a punishment or to get back at the reinstated employee.

Genuino v. National Labor Relations Commission

It is established in jurisprudence that reinstatement means restoration to a state or condition from which one had
been removed or separated. The person reinstated assumes the position he had occupied prior to his dismissal.
Reinstatement presupposes that the previous position from which one had been removed still exists, or that there is
an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the
employee.

GARCIA VS PAL
Worth stressing, upon appointment by the SEC of a rehabilitation receiver, all actions for claims against the
corporation pending before any court, tribunal or board shall ipso jure be suspended.
the actions that are suspended cover all claims against the corporation whether for damages founded on a breach of
contract of carriage, labor cases, collection suits or any other claims of a pecuniary nature. 19 No exception in favor of
labor claims is mentioned in the law.

KIMBERLY CLARK PHILS VS FACUNDO

Labor disputes naturally involve strained relations between labor and management, and that in most strikes, the relations between the strikers and the non-strikers will similarly be tense.
Bitter labor disputes always leave an aftermath of strong emotions and unpleasant situations.[18]
cralaw Thus, the doctrine of strained relations
should be strictly applied [19]cralaw and must be demonstrated as a fact.[20]cralaw This, petitioner failed to do.
Nevertheless, in case of strained relations or the nonavailability of positions, the employer is given the option to
reinstate the employee merely in the payroll precisely to avoid the intolerable presence in the workplace by the
unwanted employee.

Philippine Tobacco Flue-Curing & Redrying Corporation VS NLRC

Loss of confidence as a just cause for termination of employment is premised from the fact that an employee
concerned holds a position of trust and confidence. However, in order to constitute a just cause for dismissal, the act
complained of must be work-related such as would show the employee concerned to be unfit to continue working for
the employer.

Abaria v. NLRC, G.R. No. 154113

As a general rule, back wages are granted to indemnify a dismissed employee for his loss of earnings during the
whole period that he is out of his job. Considering that an illegally dismissed employee is not deemed to have left his
employment, he is entitled to all the rights and privileges that accrue to him from the employment. 37 The grant of back
wages to him is in furtherance and effectuation of the public objectives of the Labor Code, and is in the nature of a
command to the employer to make a public reparation for his illegal dismissal of the employee in violation of the
Labor Code.

San Miguel Corporation v. Lao

The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the
underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense.” the Court,
categorizing the two causes for the dismissal of an employee - “just causes” under Article 282 of the Labor Code and
“authorized causes” under Article 283 and 284 of the same code -reiterated that an employee whose employment
was terminated for a just cause would not be so entitled as a matter of right to the payment of separation benefits.

PLDT VS NLRC

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

DUP SOUND PHILS VS CA

This Court has ruled in many instances that reinstatement is no longer viable where, among others, the relations
between the employer and the employee have been so severely strained, that it is not in the best interest of the
parties, nor is it advisable or practical to order reinstatement, or where the employee decides not to be reinstated. 30
In the instant case, the resulting circumstances show that reinstatement would be impractical and would hardly
promote the best interest of the parties. Resentment and enmity between petitioners and private respondent
necessarily strained the relationship between them or even provoked antipathy and antagonism as shown by the acts
of the parties subsequent to the order of reinstatement. Besides, private respondent expressly prayed for an award of
separation pay in lieu of reinstatement from the very start of the proceedings before the Labor Arbiter. By so doing,
he forecloses reinstatement as a relief by implication.

Golden Ace Builders v. Talde

The basis for the payment of backwages is different from that for the award of separation pay.  Separation pay is
granted where reinstatement is no longer advisable because of strained relations between the employee and the
employer.  Backwages represent compensation that should have been earned but were not collected because of the
unjust dismissal.  The basis for computing backwages is usually the length of the employee’s service while that for
separation pay is the actual period when the employee was unlawfully prevented from working.

Fernandez v. Newfield Staff Solutions, Inc.

Bad faith does not connote bad judgment or negligence; It Imports dishonest purpose or some moral obliquity and
conscious doing of wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of
the nature of fraud. 41 To sustain such a finding, there should be evidence on record that an officer or director acted
maliciously or in bad faith in terminating the employee.

Coca-Cola Bottlers Phils., Inc. v. Daniel

Under the doctrine of strained relations, the payment of separation pay has been considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable.  On the one hand, such payment
liberates the employee from what could be a highly oppressive work environment.  On the other, the payment
releases the employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer
trust.

Nevertheless, the principle of strained relations should not be used so indiscriminately as to bar the reinstatement of
illegally dismissed workers, especially when they themselves have not indicated any aversion to returning to work, as
in this case.  It is only normal to expect a certain degree of antipathy and hostility to arise from a litigation between
parties, but not in every instance does such an atmosphere of antagonism exist as to adversely affect the efficiency
and productivity of the employee concerned.

GLOBE-MACKAY CABLE AND RADIO CORPORATION, VS NLRC

An employee who not be dismissed on mere presumptions and suppositions. Petitioner's allegation that since
Salazar and Saldivar lived together in the same apartment, it "presumed reasonably that complainant's sympathy
would be with Saldivar" and its averment that Saldivar's investigation although unverified, was probably true, do not
pass this Court's test. 36 While we should not condone the acts of disloyalty of an employee, neither should we
dismiss him on the basis of suspicion derived from speculative inferences.

Abalos v. Philex Mining Corporation

A basic tenet in our rules of procedure is that an award that is final and executory cannot be amended or modified
anymore. 
One exception is that where facts and/or events transpire after a decision has become executory, which facts and/or
events present a supervening cause or reason which renders the final and executory decision no longer enforceable.
Under the law, the court may modify or alter a judgment even after the same has become executory whenever
circumstances transpire rendering its execution unjust and inequitable, as where certain facts and circumstances
justifying or requiring such modification or alteration transpired after the judgment has become final and executory.

Procter and Gamble Philippines v. Bondesto,

While the Court recognizes the rights of an employer to terminate the services of an employee for a just or authorized
cause, the dismissal of an employee must be made within the parameters of law and pursuant to the tenets of equity
and fair play. Truly, the employer’s power to discipline its workers may not be exercised in such an arbitrary manner
as to erode the constitutional guarantee of security of tenure. The Constitution mandates the protection of labor. This
command the Court has to heed and cannot disregard.

ASIAWORLD PUBLISHING VS OPLE

It should be underscored that the backwages are being awarded on the basis of equity or in the nature of a
severance pay. This means that a monetary award is to be paid to the striking employees as an alternative to
reinstatement which can no longer be effected in view of the long passage of time or because of the ‘realities of the
situation.

Citytrust Finance Corp. v. NLRC

Loss of confidence is a valid ground for dismissing an employee and proof beyond reasonable doubt of the
employee's misconduct is not required to dismiss him on this charge. It is sufficient if there is some basis for such
loss of confidence or if the employer has reasonable ground to believe or to entertain the moral conviction that the
employee concerned is responsible for the misconduct and that the nature of his participation therein rendered him
absolutely unworthy of the trust and confidence demanded by his position.

Bautista v. Inciong
In the case at bar, the Regional director correctly found that the petitioner was an employee of the respondent union
as reflected in the latter's individual payroll sheets and shown by the petitioner's membership with the Social Security
System (SSS) and the respondent union's share of remittances in the petitioner's favor. Even more significant, is the
respondent union's act of filing a clearance application with the MOL to terminate the petitioner's services. Bautista
was selected and hired by the Union. He was paid wages by the Union. ALU had the power to dismiss him as indeed
it dismissed him. And definitely, the Union tightly controlled the work of Bautista as one of its organizers

Esmalin v. NLRC

However, in this case, there is no doubt that the relationship of employer to employee is so strained and ruptured as
to preclude a harmonious working relationship should reinstatement of private respondent be decreed. Instead,
private respondent should be afforded the right to separation pay so that he can be spared the agony of having to
work anew with petitioner under an atmosphere of antipathy and antagonism and the petitioner does not have to
endure the continued services of private respondent in whom it has lost confidence.

Maglutac v. NLRC
It cannot now be expected that the harmonious and pleasant working relationship between the parties in this case
prior to the bringing of the derivative suit with the Securities and Exchange Commission and the filing of complaint for
illegal dismissal with the labor Arbiter, can be revived. The relationship had been so strained ' that to order the
reinstatement of the complainant would not be wise. Where the relationship of employer to employee is so strained
and ruptured as to preclude a harmonious working relationship should reinstatement of the employee be decreed, the
latter should be afforded the right to separation pay where the employer does not have to endure the continued
services of the employee in whom it has lost confidence.
Dusit Hotel Nikko v. Gatbonton
In the absence of any evaluation or valid extension, we cannot conclude that respondent failed to meet the standards
of performance set by the hotel for a chief steward. At the expiration of the three-month period, Gatbonton had
become a regular employee. It is an elementary rule in the law on labor relations that a probationary employee
engaged to work beyond the probationary period of six months, as provided under Article 281 of the Labor Code, or
for any length of time set forth by the employer (in this case, three months), shall be considered a regular
employee.16 This is clear in the last sentence of Article 281. Any circumvention of this provision would put to naught
the State’s avowed protection for labor.

Morales v. Harbour Centre Port Terminal, Inc

Admittedly, the right of employees to security of tenure does not give them vested rights to their positions to the
extent of depriving management of its prerogative to change their assignments or to transfer them.42 By management
prerogative is meant the right of an employer to regulate all aspects of employment, such as the freedom to prescribe
work assignments, working methods, processes to be followed, regulation regarding transfer of employees,
supervision of their work, lay-off and discipline, and dismissal and recall of workers.43 Although jurisprudence
recognizes said management prerogative, it has been ruled that the exercise thereof, while ordinarily not interfered
with,44 is not absolute and is subject to limitations imposed by law, collective bargaining agreement, and general
principles of fair play and justice.45 Thus, an employer may transfer or assign employees from one office or area of
operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges, and
the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion
without sufficient cause.46 Indeed, having the right should not be confused with the manner in which that right is
exercised.

Globe Telecom, Inc. v. Florendo-Flores

The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt
compelled to give up his position under the circumstances. Given the undisputed facts outlined above, respondent
was provided with no other alternative than to stop reporting for work through no fault of her own due to the malicious
acts of her immediate supervisor.

Uniwide Sales Warehouse Club v. NLRC

The test of constructive dismissal is whether a reasonable person in the employee's position would have felt
compelled to give up his position under the circumstances.45 It is an act amounting to dismissal but made to appear
as if it were not. In fact, the employee who is constructively dismissed may be allowed to keep on coming to work.
Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in favor of
employees in order to protect their rights and interests from the coercive acts of the employer.

Masagana Concrete Products vs. NLRC

an award of separation pay in lieu of reinstatement does not bar an award of backwages, computed from the time of
illegal dismissal, Separation pay, equivalent to one month’s salary for every year of service, is awarded as an
alternative to reinstatement when the latter is no longer an option.  Separation pay is computed from the
commencement of employment up to the time of termination, including the imputed service for which the employee is
entitled to backwages, with the salary rate prevailing at the end of the period of putative service being the basis for
computation.

Sarona vs. NLRC

Separation pay, equivalent to one month's salary for every year of service, is awarded as an alternative to
reinstatement when the latter is no longer an option. Separation pay is computed from the commencement of
employment up to the time of termination, including the imputed service for which the employee is entitled to
backwages, with the salary rate prevailing at the end of the period of putative service being the basis for
computation.It is well-settled, even axiomatic, that if reinstatement is not possible, the period covered in the
computation of backwages is from the time the employee was unlawfully terminated until the finality of the decision
finding illegal dismissal.

Hyatt Taxi Services, Inc. v. Catinoy

constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit and
privileges.[14] There may be constructive dismissal if an act of clear discrimination, insensibility, or disdain by an
employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to
forego his continued employment.

Westmont Pharmaceuticals, Inc. v. Samaniego

In constructive dismissal, the employer has the burden of proving that the transfer of an employee is for just and valid
grounds, such as genuine business necessity. The employer must be able to show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of
salary and other benefits. If the employer cannot overcome this burden of proof, the employee’s transfer shall be
tantamount to unlawful constructive dismissal.

SENTINEL SECURITY AGENCY VS NLRC

Under these cited provisions of the Labor Code, should the contractor fail to pay the wages of its employees in
accordance with law, the indirect employer (the petitioner in this case), is jointly and severally liable with the
contractor, but such responsibility should be understood to be limited to the extent of the work performed under the
contract, in the same manner and extent that he is liable to the employees directly employed by him.  This liability of
petitioner covers the payment of the workers’ performance of any work, task, job or project.  So long as the work,
task, job or project has been performed for petitioner’s benefit or on its behalf, the liability accrues for such period
even if, later on, the employees are eventually transferred or reassigned elsewhere.

Premiere Development Bank v. NLRC

Petitioner's allegation that private respondent is guilty of laches is likewise devoid of merit. Laches is the failure for an
unreasonable and unexplained length of time to do that which in exercising due diligence, could or should have been
done earlier. It is negligence or omission to assert a right within a reasonable time, warranting the presumption that
the party entitled to assert it either has abandoned or has declined to assert it.[28] The question of laches is
addressed to the sound discretion of the court, and since it is an equitable remedy, its application is controlled by
equitable considerations.  It cannot work to defeat justice or to perpetrate fraud and injustice.[29] A party cannot be
held guilty of laches when he has not incurred undue delay in the assertion of his rights.

Sime Darby Pilipinas, Inc.  v. Arguilla

In exceptional cases, the Court has given effect to quitclaim executed by employees if the employer is able to prove
the following requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on
the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is
not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right
recognized by law.

Aujero v. Philippine Communications Satellite Corporation

While the law looks with disfavor upon releases and quitclaims by employees who are inveigled or pressured into
signing them by unscrupulous employers seeking to evade their legal responsibilities, a legitimate waiver
representing a voluntary settlement of a laborer's claims should be respected by the courts as the law between the
parties.29 Considering the petitioner's claim of fraud and bad faith against Philcomsat to be unsubstantiated, this
Court finds the quitclaim in dispute to be legitimate waiver.

While the petitioner bewailed as having been coerced or pressured into signing the release and waiver, his failure to
present evidence renders his allegation self-serving and inutile to invalidate the same. That no portion of his
retirement pay will be released to him or his urgent need for funds does not constitute the pressure or coercion
contemplated by law.

That the petitioner was all set to return to his hometown and was in dire need of money would likewise
not qualify as undue pressure sufficient to invalidate the quitclaim. "Dire necessity" may be an acceptable ground to
annul quitclaims if the consideration is unconscionably low and the employee was tricked into accepting it, but is not
an acceptable ground for annulling the release when it is not shown that the employee has been forced to execute
it.30 While it is our duty to prevent the exploitation of employees, it also behooves us to protect the sanctity of
contracts that do not contravene our laws.

Nasipit Lumber Company vs. National Organization of Working Men

Closure or suspension of operations for economic reasons is, therefore, recognized as a valid exercise of
management prerogative. The determination to cease or suspend operations is a prerogative of
management, which the State does not usually interfere with as no business or undertaking is required to continue
operating at a loss simply because it has to maintain its workers in employment. Such an act would be tantamount to a taking
of property without due process of law.

Capitol Wireless, Inc. v. Honorable Secretary Ma. Nieves R. Confessor

With respect to the additional six (6) days for compulsory retirement and three (3) days for optional retirement, these
may appear in excess of the requirements of the law and the demand of respondent Union.  Yet, it should be noted
that the law merely establishes the minimum retirement benefits as it recognizes that an employee may receive more
under existing laws and any CBA or other agreements.  Besides, respondent Secretary of Labor had to break the
bargaining deadlock.  After taking into account all the circumstances, public respondent found it expedient to strike a
reasonable middle ground between the parties’ respective positions.  Unless there are cogent reasons, and we do
not find any, this Court will not alter, modify or reverse the factual findings of the Secretary of Labor because, by
reason of her official position, she is considered to have acquired expertise as her jurisdiction is confined to specific
matters.

BANCO FILIPINO SAVINGS

An implied trust could not have been formed between the Bank and Tala as this Court has held that “where the
purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor
of the party who is guilty of the fraud.

Masing and Sons Development Corporation v. Rogelio

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment,
an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby
declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a
fraction of at least six (6) months being considered as one whole year.
 
Unless the parties provide for broader inclusions, the term one-half (1/2) month
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13 th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves.
 
Retail, service and agricultural establishments or operations employing not more
than ten (10) employees or workers are exempted from the coverage of this provision.
 
Violation of this provision is hereby declared unlawful and subject to the penal
provisions provided under Article 288 of this Code.
 
CASES ON EMPLOYER-EMPLOYEE RELATIONSHIP

AFP MUTUAL BENEFITS VS NLRC

Time and again, the Court has applied the "four-fold" test in determining the existence of employer-employee
relationship.  This test considers the following elements:  (1) the power to hire; (2) the payment of wages; (3) the
power to dismiss; and (4) the power to control, the last being the most important element.

SONZA VS ABS-CBN\
Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor. 
The control test is the most important test our courts apply in distinguishing an employee from an independent
contractor.[29] This test is based on the extent of control the hirer exercises over a worker.  The greater the
supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds
true as well – the less control the hirer exercises, the more likely the worker is considered an independent contractor.

Orozco vs. CA
This Court has constantly adhered to the "four-fold test" to determine whether there exists an employer-employee
relationship between parties.24 The four elements of an employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s power to
control the employee’s conduct.25
Of these four elements, it is the power of control which is the most crucial 26 and most determinative factor,27 so
important, in fact, that the other elements may even be disregarded.28 As this Court has previously held:

the significant factor in determining the relationship of the parties is the presence or absence of supervisory authority
to control the method and the details of performance of the service being rendered, and the degree to which the
principal may intervene to exercise such control.29

In other words, the test is whether the employer controls or has reserved the right to control the employee, not only
as to the work done, but also as to the means and methods by which the same is accomplished
Insular Life Assurance Co. Ltd. vs. NLRC
Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the
mutually desired result without dictating the means or methods to be employed in attaining it, and those that control
or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to
promote the result, create no employer-employee relationship unlike the second, which address both the result and
the means used to achieve it. The distinction acquires particular relevance in the case of an enterprise affected with
public interest, as is the business of insurance, and is on that account subject to regulation by the State with respect,
not only to the relations between insurer and insured but also to the internal affairs of the insurance company.

Sevilla vs. CA
In this jurisdiction, there has been no uniform test to determine the evidence of an employer-employee relation. In
general, we have relied on the so-called right of control test, "where the person for whom the services are performed
reserves a right to control not only the end to be achieved but also the means to be used in reaching such end." 10
Subsequently, however, we have considered, in addition to the standard of right-of control, the existing economic
conditions prevailing between the parties, like the inclusion of the employee in the payrolls, in determining the
existence of an employer-employee relationship.

Francisco vs. NLRC

The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to
control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the
underlying economic realities of the activity or relationship.
This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of
circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in
this case where there is no written agreement or terms of reference to base the relationship on; and due to the
complexity of the relationship based on the various positions and responsibilities given to the worker over the period
of the latter’s employment.

CASES ON KINDS OF EMPLOYEES

Universal Robina Sugar Milling Corporation vs. Acibo, G.R. No. G.R. No. 186439, January
15,2014

regular, project/seasonal and casual. Regular employment refers to that arrangement whereby
the employee "has been engaged to perform activities which are usually necessary or desirable
in the usual business or trade of the employer[.]" 19 Under the definition, the primary standard
that determines regular employment is the reasonable connection between the particular
activity performed by the employee and the usual business or trade of the employer; 20 the
emphasis is on the necessity or desirability of the employee’s activity. Thus, when the employee
performs activities considered necessary and desirable to the overall business scheme of the
employer, the law regards the employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor Code also considers regular a
casual employment arrangement when the casual employee’s engagement has lasted for at
least one year, regardless of the engagement’s continuity. The controlling test in this
arrangement is the length of time during which the employee is engaged.

A project employment, on the other hand, contemplates on arrangement whereby "the

employment has been fixed for a specific project or undertaking whose completion or
termination has been determined at the time of the engagement of the employee[.]" 21 Two
requirements, therefore, clearly need to be satisfied to remove the engagement from the
presumption of regularity of employment, namely: (1) designation of a specific project or
undertaking for which the employee is hired; and (2) clear determination of the completion or
termination of the project at the time of the employee’s engagement. 22 The services of the
project employees are legally and automatically terminated upon the end or completion of the
project as the employee’s services are coterminous with the project.

Unlike in a regular employment under Article 280 of the Labor Code, however, the length of
time of the asserted "project" employee’s engagement is not controlling as the employment
may, in fact, last for more than a year, depending on the needs or circumstances of the project.
Nevertheless, this length of time (or the continuous rehiring of the employee even after the
cessation of the project) may serve as a badge of regular employment when the activities
performed by the purported "project" employee are necessary and indispensable to the usual
business or trade of the employer.23 In this latter case, the law will regard the arrangement as
regular employment.24

Seasonal employment operates much in the same way as project employment, albeit it involves
work or service that is seasonal in nature or lasting for the duration of the season. 25 As with
project employment, although the seasonal employment arrangement involves work that is
seasonal or periodic in nature, the employment itself is not automatically considered seasonal
so as to prevent the employee from attaining regular status. To exclude the asserted "seasonal"
employee from those classified as regular employees, the employer must show that: (1) the
employee must be performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season.26 Hence, when the "seasonal" workers are
continuously and repeatedly hired to perform the same tasks or activities for several seasons or
even after the cessation of the season, this length of time may likewise serve as badge of
regular employment.27 In fact, even though denominated as "seasonal workers," if these
workers are called to work from time to time and are only temporarily laid off during the off-
season, the law does not consider them separated from the service during the off-season
period. The law simply considers these seasonal workers on leave until re-employed. 28

Casual employment, the third kind of employment arrangement, refers to any other
employment arrangement that does not fall under any of the first two categories, i.e., regular
or project/seasonal.

Interestingly, the Labor Code does not mention another employment arrangement –
contractual or fixed term employment (or employment for a term) – which, if not for the fixed
term, should fall under the category of regular employment in view of the nature of the
employee’s engagement, which is to perform an activity usually necessary or desirable in the
employer’s business.

Mariwasa Manufacturing Inc. vs. Hon. Leogardo Jr. G.R. No. 74246 Jan. 26,1989
By voluntarily agreeing to an extension of the probationary period, Dequila in effect waived any
benefit attaching to the completion of said period if he still failed to make the grade during the
period of extension. The Court finds nothing in the law which by any fair interpretation
prohibits such a waiver. And no public policy protecting the employee and the security of his
tenure is served by prescribing voluntary agreements which, by reasonably extending the
period of probation, actually improve and further a probationary employee's prospects of
demonstrating his fitness for regular employment

CALS POULTERY VS. ROCO G.R. No. 150660 July 30,2002

However, the Court of Appeals set aside the NLRC ruling on the ground that at the time
Candelaria’s services were terminated, she had attained the status of a regular employee as the
termination on November 15, 1995 was effected four (4) days after the 6-month probationary
period had expired, hence, she is entitled to security of tenure in accordance with Article 281 of
the Labor Code.
CALS argues that the Court of Appeals’ computation of the 6-month probationary period
is erroneous as the termination of Candelaria’s services on November 15, 1995 was exactly on
the last day of the 6-month period.

We agree with CALS’ contention as upheld by both the Labor Arbiter and the NLRC that
Candelaria’s services was terminated within and not beyond the 6-month probationary period. 
In Cebu Royal v. Deputy Minister of Labor,[13] our computation of the 6-month probationary
period is reckoned from the date of appointment up to the same calendar date of the 6th
month following

Alcira vs. NLRC G.R. No. 149859 June 9,2004

It is settled that even if probationary employees do not enjoy permanent status, they are
accorded the constitutional protection of security of tenure.  This means they may only be
terminated for just cause or when they otherwise fail to qualify as regular employees in
accordance with reasonable standards made known to them by the employer at the time of
their engagement.[14]
But we have also ruled in Manlimos, et. al. vs. National Labor Relations Commission[15]
that this constitutional protection ends on the expiration of the probationary period. On that
date, the parties are free to either renew or terminate their contract of employment. Manlimos
concluded that “(t)his development has rendered moot the question of whether there was a
just cause for the dismissal of the petitioners xxx.”[16] In the case at bar, respondent Middleby
exercised its option not to renew the contract when it informed petitioner on the last day of his
probationary employment that it did not intend to grant him a regular status.

Although we can regard petitioner’s severance from work as dismissal, the same cannot be
deemed illegal. As found by the labor arbiter, the NLRC and the Court of Appeals, petitioner (1)
incurred ten absences (2) was tardy several times (3) failed to wear the proper uniform many
times and (4) showed inferior supervisory skills. Petitioner failed to satisfactorily refute these
substantiated allegations. Taking all this in its entirety, respondent Middleby was clearly
justified to end its employment relationship with petitioner.

Mitsubishi Motors vs. Chrysler G.R. No. 148738 June 29,2004

Indeed, an employer, in the exercise of its management prerogative, may hire an employee on
a probationary basis in order to determine his fitness to perform work.[29]  Under Article 281
of the Labor Code, the employer must inform the employee of the standards for which his
employment may be considered for regularization.  Such probationary period, unless covered
by an apprenticeship agreement, shall not exceed six (6) months from the date the employee
started working. The employee’s services may be terminated for just cause or for his failure to
qualify as a regular employee based on reasonable standards made known to him

Brent School Inc. vs. Zamora 48494 Feb. 5,1990

The concept of the employee's duties as being "usually necessary or desirable in the usual
business or trade of the employer" is not synonymous with or identical to employment with a
fixed term. Logically, the decisive determinant in term employment should not be the activities
that the employee is called upon to perform, but the day certain agreed upon by the parties for
the commencement and termination of their employment relationship, a day certain being
19
understood to be "that which must necessarily come, although it may not be known when."

Cielo vs. NLRC G.R. No. 78693 Jan. 28,1991

Even if it be assumed that the six-month period had not yet been completed, it is settled that
the probationary employee cannot be removed except also for cause as provided by law. It is
not alleged that the petitioner was separated for poor performance; in fact, it is suggested by
the private respondent that he was dismissed for disrespect and insubordination, more
specifically his refusal to sign the affidavit as required by company policy

PDI vs. Magtibay G.R. No. 164532 July 24, 2007

for the valid termination of probationary employment which is for just cause, the second
ground does not require notice and hearing.  Due process of law for this second ground consists
of making the reasonable standards expected of the employee during his probationary period
known to him at the time of his probationary employment. By the very nature of a probationary
employment, the employee knows from the very start that he will be under close observation
and his performance of his assigned duties and functions would be under continuous scrutiny
by his superiors. 

Mercado Sr. vs. NLRC G.R. No. 79869 September 5, 1991

35. Industrial-Commercial-Agricultural Workers’ Organization (ICAWO) v. CIR 16 SCRA 562,

March 31, 1966.
The seasonal stoppage of work does not, therefore, negate the reasonable expectation of the
laborers to be subsequently allowed to resume work unless there be other justifiable reasons for
acting otherwise.
36. Visayan Stevedore Transportation Company v. CIR. 19 SCRA 426, February 25, 1967

1. LABOR LAW; EMPLOYER-EMPLOYEE RELATIONSHIP; CASE AT BAR. — In the performance of their duties,
complainants worked under the direction and control of the officers of the company, whose paymaster or
disbursing officer paid the corresponding compensation directly to said complainants, who in turn
acknowledged receipt in payrolls of the company. 
RELATIONSHIP CONTINUES EVEN AT CONCLUSION OF MILLING SEASON. — As regards the alleged
termination of employer-employee relationship between the company and the complainants at the
conclusion of each milling season, it is settled that the workers concerned are considered, not separated
from the service, but merely on leave of absence, without pay, during the off-season, their employer-
employee relationship being merely deemed suspended, not severed in the meanwhile
UNFAIR LABOR PRACTICE; CASE AT BAR. — Where, as in the case at bar, the workers not admitted to work
beginning from Nov. 1955, were precisely those belonging to the union, and the company branch manager
had told them point blank that severance of their connection with the union was the remedy if they wanted
to continue working with the company, there was unfair labor practice.
BACK WAGES; PAYMENT OF BACK WAGES ON REINSTATEMENT DISCRETIONARY WITH COURT OF
INDUSTRIAL RELATIONS. — The law explicitly vests in the Court of Industrial Relations discretion to order
the reinstatement with backpay of laborers dismissed due to union activities 
37. Bacolod-Murcia Milling Co, Inc. v. NLRC, 204 SCRA 155, 158, November 21, 1991
seasonal laborer cannot enjoy the same retirement privileges as the regular worker. The seasonal
laborer works only for a fraction of year. And more often than not, he is allowed by his employer to
seek employment elsewhere during off-season or temporary lay-off for economic necessity.
38. Gaco v. NLRC .” 230 SCRA 260, Febuary 23, 1994
we shall not follow Article 279 of the Labor Code to the letter regarding the period of backwages in
view of the peculiar circumstances of the present case, namely, "there is now a strained relationship
between (petitioner) and (private respondent) and (petitioner) prays for payment of separation pay in
lieu of reinstatement." 13 Instead, the period thereof shall be reckoned from the time her compensation
was withheld from her, or in April, 1990 up to the finality of our decision.
39. Magcalas vs NLRC : 100333 : March 13, 1997
Regular employees cannot at the same time be project employees.  Article 280 of the Labor
Code states that regular employees are those whose work is necessary or desirable to the
usual business of the employer.  The two exceptions following the general description of regular
employees refer to either project or seasonal employees. The employment of seasonal
employees, on the other hand, legally ends upon completion of the project or the season
As regular employees, petitioners' employment cannot be terminated at the whim of the
employer.  For a dismissal of an employee to be valid, two requisites must be met: (1) the
employee is afforded due process, meaning, he is given notice of the cause of his dismissal and
an adequate opportunity to be heard and to defend himself; and (2) the dismissal is for a valid
cause as indicated in Article 282[35] of the Labor Code.[36] The services of petitioners
were purportedly terminated at the end of the ADB and Interbank projects, but this could not
have been a valid cause for, as discussed above, they were regular and not project
employees.  Thus, the Court does not hesitate to conclude that petitioners were illegally
dismissed.
40. Abasolo v. NLRC G.R. No. 118475, 29 November 2000, 346 SCRA 293.
The amount of separation pay is based on two factors:  the amount of monthly
salary and the number of years of service.  Although the Labor Code provides
different definitions as to what constitutes “one year of service,” Book
Six  does not specifically define “one year of service” for purposes of
[31]

computing separation pay.  However, Articles 283 and 284 both state in

connection with separation pay that a fraction of at least six months shall be
considered one whole year.  Applying this case at bar, we hold that the
amount of separation pay which respondent members xxx should receive is
one-half (1/2) their respective average monthly pay during the last season
they worked multiplied by the number of years they actually rendered service,
provided that they worked for at least six months during a given year.
41. Philippine Tobacco Flue-Curing & Redrying Corporation v. NLRC G.R. No. 127395, 10
December 1998, 300 SCRA 37.
The formula that petitioner proposes, wherein a year of work is equivalent to actual work rendered for
303 days, is both unfair and inapplicable, considering that Articles 283 and 284 provide that in
connection with separation pay, a fraction of at least six months shall be considered one whole
year.  Under these provisions, an employee who worked for only six months in a given year -- which is
certainly less than 303 days -- is considered to have worked for one whole year.
42. Rowell Industrial Corporation vs. Court of Appeals, G.R. No. 167714 March 7, 2007
Well-established is the rule that regular employees enjoy security of tenure
and they can only be dismissed for just cause and with due process, notice and
hearing.[24]  And in case of employees’ dismissal, the burden is on the employer
to prove that the dismissal was legal.  Thus, respondent Taripe’s summary
dismissal, not being based on any of the just or authorized causes enumerated
under Articles 282,[25] 283,[26] and 284[27] of the Labor Code, as amended, is
illegal.
43. Robinsons Galleria/Robinsons Supermarket Corporation and/or Jess Manuel v. Ranchez,
G.R. No. 177937, January 19, 2011, 640 SCRA 142
Well-established is the rule that regular employees enjoy security of tenure
and they can only be dismissed for just cause and with due process, notice and
hearing.[24]  And in case of employees’ dismissal, the burden is on the employer
to prove that the dismissal was legal.  Thus, respondent Taripe’s summary
dismissal, not being based on any of the just or authorized causes enumerated
under Articles 282,[25] 283,[26] and 284[27] of the Labor Code, as amended, is
illegal.
44. Magis Young Achievers’ Learning Center v. Manalo, G.R. No. 178835, February 13, 2009,
579 SCRA 421, 431-432
probationary employees enjoy security of tenure during the term of their
probationary employment such that they may only be terminated for cause as
provided for by law, or if at the end of the probationary period, the employee
failed to meet the reasonable standards set by the employer at the time of the
employee’s engagement.
in the absence of an express period of probation for private school teachers,
the three-year probationary period provided by the Manual of Regulations for
Private Schools must apply likewise to the case of respondent.  In other words,
absent any concrete and competent proof that her performance as a teacher
was unsatisfactory from her hiring on April 18, 2002 up to March 31, 2003,
respondent is entitled to continue her three-year period of probationary
period, such that from March 31, 2003, her probationary employment is
deemed renewed for the following two school years.[47]
45. Buiser, et al., v.. Hon. Leogardo, etc., et al., G.R. No. L-63316 July 31, 1984
the probationary period of employment is limited to six (6) months. The exception to this general rule
is When the parties to an employment contract may agree otherwise, such as when the same is
established by company policy or when the same is required by the nature of work to be performed
by the employee. In the latter case, there is recognition of the exercise of managerial prerogatives in
requiring a longer period of probationary employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must learn a particular kind of work such as selling, or
when the job requires certain qualifications, skills, experience or training.
46. Miguel Corporation vs. Del Rosario, G.R. Nos. 168194 & 168603, December 13, 2005
Considering that respondent was illegally dismissed, she is entitled not only
to reinstatement but also to payment of full backwages, computed from the time
her compensation was actually withheld from her on March 13, 2001, up to her
actual reinstatement.  As a regular employee of petitioner from the date of her
employment on April 17, 2000, she is likewise entitled to other benefits, i.e.,
service incentive leave pay and 13th month pay computed from such date also up to
her actual reinstatement.
 
Respondent is not, however, entitled to holiday pay because the records
reveal that she is a monthly paid regular employee.  Under Section 2, Rule IV,
Book III of the Omnibus Rules Implementing the Labor Code, employees who are
uniformly paid by the month, irrespective of the number of working days therein,
shall be presumed to be paid for all the days in the month whether worked or not.

47. Octaviano vs. NLRC, G.R. No. 88636 October 3, 1991

The fact that the petitioner
received separation pay should not be taken against her for it is but
natural for her to accept whatever amounts the company would give
her. Her receipt of separation pay does not relieve the company of its
obligations under the law. Backwages and separation pay are reliefs
distinct and separate from each other. Payment of backwages in the
form of relief that restores the income that was lost by reason of
unlawful dismissal is distinguished from separation pay which
provides the employee money during the period in which he is
locating a new job.[16] We have moreover held that a quitclaim will not
stop a dismissed employee from complaining to the authorities.

48. Cebu Royal PIants (SMC) vs. The Honorable Deputy Minister of Labor and 144.
Employment, et al., G.R. No. 58639, August 12, 1987, 153 SCRA 11
there was here an attempt to circumvent the law by separating the employee after five months'
service to prevent him from becoming a regular employee, and then rehiring him on probation, again
without security of tenure. We cannot permit this subterfuge if we are to be true to the spirit and
mandate of social justice. On the other hand, we have also the health of the public and of the
dismissed employee himself to consider. Hence, although we must rule in favor of his reinstatement,
this must be conditioned on his fitness to resume his work, as certified by competent authority.
49. Beta Electric Company vs. National Labor Relations Commission, et al., G.R. No. 86408,
February 15, 1990,182 SCRA 384 12
a probationary employee is "considered a regular employee" if he has been
"allowed to work after [the] probationary period." [11] The fact that her employment
has been a contract-to-contract basis cannot alter the character of employment,
because contracts cannot override the mandate of law. Hence, by operation of law,
she has become a regular employee.
50. Aliling vs. Feliciano, G.R. No. 185829, April 25,2012
The normal consequences of respondents’ illegal dismissal, then, are reinstatement without loss of
seniority rights, and payment of backwages computed from the time compensation was withheld up to
the date of actual reinstatement. Where reinstatement is no longer viable as an option, separation pay
equivalent to one (1) month salary for every year of service should be awarded as an alternative. The
payment of separation pay is in addition to payment of backwages.

51. Mercado vs. AMA Computer College - Parañaque City, Inc. G.R. No. 183572 April 13, 2010
The fixed-term character of employment essentially refers to the
period agreed upon between the employer and the employee; employment
exists only for the duration of the term and ends on its own when the term
expires.  In a sense, employment on probationary status also refers to a period
because of the technical meaning “probation” carries in Philippine labor law – a
maximum period of six months, or in the academe, a period of three years for
those engaged in teaching jobs. Their similarity ends there, however, because
of the overriding meaning that being “on probation” connotes, i.e., a process of
testing and observing the character or abilities of a person who is new to a role
or job
52. Magis Young Achievers’ Learning Center v. Adelaida P. Manalo, G.R. No. 178835,
February 13, 2009, 579 SCRA 421, 431-438
probationary employees enjoy security of tenure during the term of their
probationary employment such that they may only be terminated for cause as
provided for by law, or if at the end of the probationary period, the employee
failed to meet the reasonable standards set by the employer at the time of the
employee’s engagement.  Undeniably, respondent was hired as a probationary
teacher and, as such, it was incumbent upon petitioner to show by competent
evidence that she did not meet the standards set by the school.  This
requirement, petitioner failed to discharge.  To note, the termination of
respondent was effected by that letter stating that she was being relieved from
employment because the school authorities allegedly decided, as a cost-cutting
measure, that the position of “Principal” was to be abolished.  Nowhere in that
letter was respondent informed that her performance as a school teacher was
less than satisfactory.
53. Petroleum Shipping Limited (formerly Esso International Shipping (Bahamas) Co., Ltd.) vs.
NLRC, June 16,2006, G.R. No. 148130
Court traced its ruling in a number of cases that seafarers are contractual, not
regular, employees.  Thus, inBrent School, Inc. v. Zamora,[15] the Court cited
overseas employment contract as an example of contracts where the concept
of regular employment does not apply, whatever the nature of the
engagement and despite the provisions of Article 280 of the Labor
Code.  In Coyoca  v. NLRC,[16] the Court held that the agency is liable for
payment of a seaman’s medical and disability benefits in the event that the
principal fails or refuses to pay the benefits or wages due the seaman although
the seaman may not be a regular employee of the agency. 
54. Millares v. NLRC 434 Phil. 524 (2002).
Accordingly, and since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor code clearly appears to have
been, as already observed, to prevent circumvention of the employee’s right to be
secure in his tenure, the clause in said article indiscriminately and completely
ruling out all written or oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to the substantive evil
that the Code itself has singled out; agreements entered into precisely to
circumvent security of tenure.  It should have no application to instances where a
fixed period of employment was agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper pressure being brought to bear
upon the employee and absent any other circumstances vitiating his consent, or
where it satisfactorily appears that the employer and employee dealt with each
other on more or less equal terms with no moral dominance whatever being
exercised by the former over the latter. 
As a Filipino seaman, petitioner is governed by the Rules and Regulations
Governing Overseas Employment and the said Rules do not provide for separation
or termination pay. 

55. Gu-Miro v. Adorable G.R. No. 160952, 20 August 2004, 437 SCRA 162.
Clearly, petitioner cannot be considered as a regular employee
notwithstanding that the work he performs is necessary and desirable in the
business of respondent company.  As expounded in the above-
mentioned Millares Resolution, an exception is made in the situation of
seafarers.  The exigencies of their work necessitates that they be employed
on a contractual basis.
Thus, even with the continued re-hiring by respondent company of
petitioner to serve as Radio Officer onboard Bergesen’s different vessels, this
should be interpreted not as a basis for regularization but rather a series of
contract renewals sanctioned under the doctrine set down by the
second Millares case.  If at all, petitioner was preferred because of practical
considerations—namely, his experience and qualifications.  However, this
does not alter the status of his employment from being contractual.
CASES ON LABOR RELATIONS

1. Tunay na Pagkakaisa ng Mangagawa sa Aisa Brewery vs. Asia Brewery G.R. No. 162025
Aug. 3,2010 Confidential employees are defined as those who (1) assist or act in a
confidential capacity, (2) to persons who formulate, determine, and effectuate
management policies in the field of labor relations. Not being confidential
employees, the secretaries/clerks and checkers are not disqualified from
membership in the Union of respondent’s rank-and-file employees.
2.National Association of Trade Unions-Republic Planters Bank Supervisors Chapter v. Torres
G.R. No. 93468 Dec. 29,1994 Inc. only the Branch Managers/OICs, Cashiers and Controllers of
respondent Bank, being confidential employees, are disqualified from joining or assisting petitioner
Union, or joining, assisting or forming any other labor organization. But this ruling should be
understood to apply only to the present case based on the evidence of the parties, as well as to
those similarly situated. It should not be understood in any way to apply to banks in general.
3. Standard Chartered Bank Employees Union [SCBEU-NUBE] v. Standard Chartered Bank
G.R. No. 161933 April 22,2008 Absent any proof that Chief Cashiers and Assistant Cashiers,
personnel of the Telex department and one (1) HR Staff have mutuality of interest with the other rank
and file employees, then they are rightfully excluded from the appropriate bargaining unit.
4. Golden Farms Inc. vs. Ferrer-Calleja G.R. No. 78755 July 19,1989 This rationale holds true
also for confidential employees such as accounting personnel, radio and telegraph operators, who
having access to confidential information, may become the source of undue advantage. Said
employee(s) may act as a spy or spies of either party to a collective bargaining agreement. This is
specially true in the present case where the petitioning Union is already the bargaining agent of the
rank-and-file employees in the establishment. To allow the confidential employees to join the existing
Union of the rank-and-file would be in violation of the terms of the Collective Bargaining Agreement
wherein this kind of employees by the nature of their functions/positions are expressly excluded.
5. Philips industrial Development Inc. vs. NLRC G.R. No.88957 June 25,1992 that the right to
join a union includes the right to abstain from joining any
union. 19 Inasmuch as what both the Constitution and the Industrial Peace Act have recognized,
and guaranteed to the employee, is the "right" to join associations of his choice, it would be
absurd to say that the law also imposes, in the same breath, upon the employee the duty to join
associations. The law does not enjoin an employee to sign up with any association.
6. Pier & Arrastre & Stevedoring Services Inc. vs. Roldan-Confessor G.R. No. 110854 Feb.
13,1995 We thus hold that public respondent acted with grave abuse of discretion in not excluding
the four foremen and legal secretary from the bargaining unit composed of rank-and-file employees.
As for the timekeeper and assistant timekeeper it is clear from petitioner's own pleadings that they
are, neither managerial nor supervisory employees. They are merely tasked to report those who
commit infractions against company rules and regulations. This reportorial function is routinary and
clerical. They do not determine the fate of those who violate company policy rules and regulations
function. It follows that they cannot be excluded from the subject bargaining unit.
7.Southern Philippines Federation of Labor vs. Ferrer-Calleja G.R. No. 80882 April 24,1989 he
employees in the confidential payroll, the petitioner has not shown that the nature of their jobs is
classified as managerial except for its allegation that they are considered by management as
occupying managerial positions and highly confidential. Neither can payment or non-payment of
union dues be the determining factor of whether the challenged employees should be excluded from
the bargaining unit since the union shop provision in the CBA applies only to newly hired employees
but not to members of the bargaining unit who were not members of the union at the time of the
signing of the CBA. It is, therefore, not impossible for employees to be members of the bargaining
unit even though they are non-union members or not paying union dues.
8. Filoil Refinery Corp. vs. Filoil Supervisory and Confidential Employees Association G.R.
No.L-26736 August 18,1972 he confidential employee are very few in number and are by practice
and tradition identified with the supervisors in their role as representives of management vis-a-vis
the rank and file employee such identity of interest has allowed their inclusion in the bargaining unit
of supervisors-managers for purposes of collective bargaining in turn as employees in relation to the
company as their employer.
9.Coastal Subic Bay Terminal Inc. vs. Department of Labor and Employment-Office of the
Secretary G.R. No.157117 November 20,2006 supervisory employees are not eligible for
membership in a labor union of rank-and-file employees. The supervisory employees are allowed to
form their own union but they are not allowed to join the rank-and-file union because of potential
conflicts of interest.29 Further, to avoid a situation where supervisors would merge with the rank-and-
file or where the supervisors’ labor union would represent conflicting interests, a local supervisors’
union should not be allowed to affiliate with the national federation of unions of rank-and-file
employees where that federation actively participates in the union activity within the
company.30 Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file
union. The prohibition extends to a supervisors’ local union applying for membership in a national
federation the members of which include local unions of rank-and-file employees. 3
10. San Miguel Corporation vs. Laguesma G.R. No. 100485 September 21,1994 It is not,
however, the convenience of the employer that constitutes the determinative factor in forming an
appropriate bargaining unit. Equally, if not more important, is the interest of the employees. In
choosing and crafting an appropriate bargaining unit, extreme care should be taken to prevent an
employer from having any undue advantage over the employees' bargaining representative. Our
workers are weak enough and it is not our social policy to further debilitate their bargaining
representative.
11. San Migule Corporation Supervisors and Exempt Employees Union vs. Laguesma G.R. No.
110399 August 15,1997 A unit to be appropriate must effect a grouping of employees who have
substantial, mutual interests in wages, hours, working conditions and other subjects of collective
bargaining.[25]
12. Democratic Labor Association vs. Cebu Stevedoring Co. Inc. G.R. No. 10321Feb. 28,1958
This Court has already taken cognizance of the crucial issue of determining the proper constituency
of a collective bargaining unit. (1) will of employees (Glove Doctrine); (2) affinity and unity of
employee's interest, such as substantial similarity of work and duties or similarity of compensation
and working conditions; (3) prior collective bargaining history; and (4) employment status, such as
temporary, seasonal and probationary employees".
13. University of the Philippines vs. Ferrere-Calleja G.R. No.96189 July 14,1992 (t)he test of the
grouping is community or mutuality of interests. And this is so because 'the basic test of an asserted
bargaining unit's acceptability is whether or not it is fundamentally the combination which will best
assure to all employees the exercise of their collective bargaining rights' (Rothenberg on Labor
Relations, 490)."
14. St. James School of Quezon City vs.
Samahang Manggagawa ng St. James
School of Quezon City G.R. No. 151326
November 23,2005 The motor pool, construction and
transportation employees of the Tandang Sora campus had 149 qualified

voters at the time of the certification election.  Hence, the 149 qualified

voters should be used to determine the existence of a quorum. Since a

majority or 84 out of the 149 qualified voters cast their votes, a quorum

existed in the certification election.

 

15. International School Alliance of Educators [ISAE] vs. Quisumbing G.R. No. 128845 June
1,2000 It does not appear that foreign-hires have indicated their intention to be grouped together
with local-hires for purposes of collective bargaining. The collective bargaining history in the
School also shows that these groups were always treated separately. Foreign-hires have limited
tenure; local-hires enjoy security of tenure. Although foreign-hires perform similar functions
under the same working conditions as the local-hires, foreign-hires are accorded certain
benefits not granted to local-hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably related to their status as foreign-
hires, and justify the exclusion of the former from the latter. To include foreign-hires in a
bargaining unit with local-hires would not assure either group the exercise of their respective
collective bargaining rights.
16. National Association of Free Trade Unions vs. Mainit Lumber Development Company
Workers Union G.R. No. 79526 December 21,1990 Moreover, while the existence of a bargaining
history is a factor that may be reckoned with in determining the appropriate bargaining unit, the same is
not decisive or conclusive. Other factors must be considered. The test of grouping is community or
mutuality of interests. This is so because "the basic test of an asserted bargaining unit's acceptability is
whether or not it is fundamentally the combination which will best assure to all employees the exercise
of their collective bargaining rights."
17. San Miguel Corporation vs. Laguesma G.R. No. 100485, September 21,1994 A unit to be
appropriate must effect a grouping of employees who have substantial, mutual interests in
wages, hours, working conditions and other subjects of collective bargaining.[25]

18. Belyca Corporation vs. Ferrere-Calleja G.R. No. 77395 November 29,1988 as a general rule,
a certification election is the sole concern of the workers. The only exception is where the employer
has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the
latter was requested to bargain collectively. But thereafter the role of the employer in the certification
process ceases. The employer becomes merely a bystander
19. Philippine Airlines Employees Association vs. Ferrere-Calleja G.R. No. 76673 June 22,1988
Employees have a constitutional right to choose their own bargaining representative. The holding of
a certification election is a statutory policy that should not be circumvented (George and Peter Lines,
Inc. vs. Association of Labor Unions 
20. PAFLU vs. Bureau of Labor Relations G.R. No. L-43760, Aug. 21,1976 hat is of the essence
of the certification process, as noted in  "is that every labor organization be given the opportunity in a
free and honest election to make good its claim that it should be the exclusive collective bargaining
representative.
21. UE Automobile Employees and Workers Union vs. Noriel G.R. No. L-44350 Nov. 25,1978
It is thus of the very essence of the regime of industrial democracy
sought to be attained through the collective bargaining process that
there be no obstacle to the freedom Identified with the exercise of
the right to self-organization. Labor is to be represented by a union
that can express its collective will. In the event, and this is usually
the case, that there is more than one such group fighting for that
privilege, a certification election must be conducted.
22. United CMC Worker’s Union vs. BLR G.R. No. L-51337 March 22,1984 the pendency of a
formal charge of company domination is a prejudicial question that, until decided, bars proceedings for
a certification election
23. California Manufacturing Corporation vs. Laguesma G.R. No.97020 June 18,1992 CMC as
employer has no standing to question a certification election (Asian Design and Manufacturing Corporation v.
Calleja, Et Al., G.R. No. 77415, June 29, 1989, 174 SCRA 477). Such is the sole concern of the workers. The
only exception is where the employer has to file the petition for certification election pursuant to Article 259
(now 258) of the Labor Code because it was requested to bargain collectively. Thereafter, the role of the
employer in the certification process ceases. The employer becomes merely a by-stander
24. Furusawa Rubber Philippines Inc. vs. Secretary of Labor and Employment G.R. No. 121241
Dec. 10,1997  The submission of a xerox copy of the union’s certificate of registration to prove
its legitimacy is sufficient, hence, the Med-Arbiter correctly granted the petition for certification
election.  As it been held in a long line of cases, a certification proceeding is not a litigation in
the sense that the term is ordinarily understood, but an investigation of a  fact-finding  and  non-
adversarial character.  It is not covered by the technical rules of  evidence.
25. TUCP and Allied Services World Federation of Trade Unions vs. Laguesma G.R. No.
102350 June 30,1994
26. Kaisahan ng Manggagawang Pilipino vs. Trajano G.R. No. 75810 September 9,1991  is
evident that the prohibition imposed by law on the holding of a certification election "within one year
from the date of issuance of declaration of a final certification election result' — in this case, from
February 27, 1981, the date of the Resolution declaring NAFLU the exclusive bargaining
representative of rank-and-file workers of VIRON — can have no application to the case at bar. That
one-year period-known as the "certification year" during which the certified union is required to
negotiate with the employer, and certification election is prohibited 2 — has long since expired.
27. National Congress of Unions in Sugrar Industry of the Phil-TUCP vs. Trajano G.R. No.
67485 April 10,1992 The law demands that the petition for certification election should fail in the
presence of a then pending bargaining deadlock.

28. Capitol Medical Center Alliiance of Concerned Employees-United Filipino Service Workers
vs. Laguesma G.R. No. 118915 Feb. 4,1997 in order to allow an employer to validly
suspend the bargaining process, there must be a valid petition for certification
election.  The mere filing of a petition does notipso facto justify the suspension of
negotiation by the employer
29. Republic Planters Bank General Services Employees Union-National Association of Trade
Unions vs. Laguesma G.R. No. 119675 Nov. 21,1996 Since the persons involved are not
employees of the company, we held that they are not entitled to the constitutional right to join or
form a labor organization for purposes of collective bargaining.
30. Republic Planters Bank General Services Employees Union-National Association of Trade
Unions vs. Laguesma G.R. No. 119675 Nov. 21,1996

31. Samahang Manggagawa sa Permex vs. Secretary of Labor G.R. No. 107792 March 2,1998 a
petition for certification election or motion for intervention may be entertained only within 60
days prior to the date of expiration of an existing collective bargaining agreement. The purpose
of the rule is to ensure stability in the relationships of the workers and the management by
preventing frequent modifications of any collective bargaining agreement earlier entered into by
them in good faith and for the stipulated original period. Excepted from the contract-bar rule are
certain types of contracts which do not foster industrial stability, such as contracts where the
identity of the representative is in doubt. Any stability derived from such contracts must be
subordinated to the employees’ freedom of choice because it does not establish the kind of
industrial peace contemplated by the law. [6] Such situation obtains in this case.  The petitioner
entered into a CBA with Permex Producer when its status as exclusive bargaining agent of the
employees had not been established yet.  
32. Samahan ng Mangagawa sa Pacific Plastic vs. Laguesma G.R. No. 111245 Jan. 31,1997
certification election can be conducted despite pendency of a petition to cancel the union
registration certificate.  For the fact is that at the time the respondent union filed its petition for
certification, it still had the legal personality to perform such act absent an order directing its
cancellation.
33. Yokomaha Tire Phils. Vs. Yokohama Employees Union G.R. No.159553 December 10,2007
without a final judgment declaring the legality of dismissal, dismissed employees
are eligible or qualified voters.
34. GOP-CCP Workers Union vs. CIR G.R. No. L-33015 Sept. 10,1979 no injustice was
perpetrated against the appellant when the certification election was held notwithstanding the
pendency of its motions for reconsideration and for the suspension of the election. The CIR rightly
sensed that those eleventh-hour maneuvers did not conduce to industrial peace and, instead,
fomented uncertainty on the matter of representation of the workers.
35. Reyes vs. Ople G.R. No. L-48192 March 30,1979 The Court has consistently favored and
upheld the holding of certification elections for the workers themselves to elect the union that the
majority may choose as their bargaining representative or if they wish, to vote that there be no union.
Their plea that another certification election be held at which they may duly take part would be but a
futile exercise in the light of the results which were highlighted by the lack of any noticeable support
for them by the rank and file, as well as by their admission at the hearing that the winner and
certified union, the NAFLU, enjoys the workers' full support, having signed up more than a thousand
of them as members.
36. NFL vs. Sec of Labor G.R. No. 104556 March 9,1998 Private respondent is the
employer.  The manner in which the election was held could make the difference between
industrial strife and industrial harmony in the company.  What an employer is prohibited from
doing is to interfere with the conduct of the certification election for the purpose of influencing its
outcome.  But certainly an employer has an abiding interest in seeing to it that the election is
clean, peaceful, orderly and credible.  
37. Insular Hotel Employees Union-NFL vs. Waterfront Insular Hotel Davao G.R. No. 174040-
41 Sept. 22,2010 the individual members of the union cannot feign knowledge of
the execution of the MOA. Each contract was freely entered into and there is no
indication that the same was attended by fraud, misrepresentation or duress.  To
this Court's mind, the signing of the individual “Reconfirmation of Employment”
should, therefore, be deemed an implied ratification by the Union members of
the MOA. 
38. St. Lukes Medical Center Inc. vs. Torres G.R. No. 99395 June 29,1993 n the absence of a
specific provision of law prohibiting retroactivity of the effectivity of arbitral awards issued by the
Secretary of Labor pursuant to Article 263 (g) of the Labor Code, such as herein involved, public
respondent is deemed vested with plenary and discretionary powers to determine the effectivity
thereof.
39. Villar vs, Inciong G.R. Nos. L-50283-84 April 20,1983 Amigo Employees Union
(Independent) Which petitioners claim to represent, not being a legitimate labor organization, may
not validly present representation issues. Therefore, the act of petitioners cannot be considered a
legitimate exercise of their right to self-organization. Hence, We affirm and reiterate the rationale
explained in Phil Association of Free Labor Unions vs. Sec. of Labor case, supra, in order to protect
legitimate labor and at the same time maintain discipline and responsibility within its ranks.
40. People’s Industrial and Commercial Employees and Workers Org. vs. Peoples Industrial and
Commercial Corp. G.R. No. L-37687 March 15,1982 t is clear that management gave cause or
reason to induce the staging of the strike by improperly refusing to recognize the new union formed
by petitioners. It has been twelve (12) years since petitioners were dismissed from their employment
and in their destitute and deplorable condition, to them the benign provisions of the New Constitution
for the protection of labor, assuring the rights of workers to self- organization, collective bargaining
and security of tenure would be useless and meaningless. Labor, being the weaker in economic
power and resources than capital, deserve protection that — is actually substantial and material.
41. Elisco-Elirol Labor Union vs. Noriel G.R. No. L-41955 Dec. 29,1977 any suspension or lay-
off of the complainants officers and board members or employees of petitioner union arising from the
respondents' misconception of the clearly applicable principles and jurisprudence upholding the
primacy of the employees and their freely chosen local union as the true party in interest to the
collective bargaining agreement will be forthwith rectified and set aside.
42. Association Workers Union PTGWO vs. NLRC G.R. No. 87266-69 July 30,1990 What was
in fact eventually established by individual respondents was a separate, independent union called
Metro Port Workers Union (MWU) which was not entitled, during the time periods here relevant, to
recognition as the bargaining unit in CBA negotiations.
43. Benguet Consolidated Inc. vs. BCI Employees & Workers Union G.R. No. April 30,1968 n
formulating the “substitutionary” doctrine, the only consideration involved
was the employees‘ (principal) interest in the existing bargaining agreement.
The agent’s (union) interest never entered the picture. The majority of the
employees, as an entity under the statute, is the true party in interest to the
contract, holding rights through the agency of the union representative. Thus,
any exclusive interest claimed by the agent is defeasible at the will of the
principal. The “substitutionary” doctrine only provides that the employees
cannot revoke the validly executed collective bargaining contract with their
employer by the simple expedient of changing their bargaining agent. And it is
in the light of this that the phrase “said new agent would have to respect said
contract” must be understood. It only means that the employees, thru their
new bargaining agent, cannot renege on their collective bargaining contract,
except of course to negotiate with management for the shortening thereof.
44. Confederation of Citizens Labor Unions vs. Noriel 1982 & National Federation of labor vs.
DOLE Sec. 1998 Private respondent is the employer.  The manner in which the election was
held could make the difference between industrial strife and industrial harmony in the
company.  What an employer is prohibited from doing is to interfere with the conduct of the
certification election for the purpose of influencing its outcome.  But certainly an employer has
an abiding interest in seeing to it that the election is clean, peaceful, orderly and credible.  

45. PHILIPPINE SKYLANDERS, INC. V. NATIONAL LABOR RELATIONS COMMISSION

G.R. No. 127374 and G.R. No. 127431, January 31, 2002, 375 SCRA 369 A local labor union is a
separate and distinct unit primarily designed to secure and maintain an equality of bargaining power
between the employer and their employee-members. A local union does not owe its existence to the
federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation
to the will of its members. The mere act of affiliation does not divest the local union of its own
personality, neither does it give the mother federation the license to act independently of the local
union. It only gives rise to a contract of agency where the former acts in representation of the latter.
46. National Union of Bank Employees vs. Philnabank Employees Association (PEMA), G.R.
No. 174287 August 12,2013:
47. Cirtek Employees Labor Union-Federation of Free Workers v. Cirtek Electronics, Inc., G.R.
No. 190515, June 6, 2011, 650 SCRA 656, 663 the right of the local members to withdraw from the
federation and to form a new local union depends upon the provisions of the union's constitution,
bylaws and charter and, in the absence of enforceable provisions in the federation's constitution
preventing disaffiliation of a local union, a local may sever its relationship with its parent.37
48. Villar v. Inciong G.R. No. L-50283-84 April 20, 1983 A closed-shop is a valid form of union
security, and a provision therefor in a collective bargaining agreement is not a restriction of the right
of freedom of association guaranteed by the Constitution.
49. Volkschel Labor Union v. BLR June 19,1985 Suffice it to state that respondent federation is
not entitled to union dues payments from petitioner's members. "A local union which has validly
withdrawn from its affiliation with the parent association and which continues to represent the
employees of an employer is entitled to the check-off dues under a collective bargaining contract.
50. PALACOL VS. FERRER-CALLEJA, G.R. No. 85333 February 26, 1990: only the collection
of a special fund for labor and education research is mandated, as correctly pointed out by the
Union. The two other purposes, namely, the purchase of vehicles and other items for the benefit of
the union officers and the general membership, and the payment of services rendered by union
officers, consultants and others, should be supported by the regular union dues, there being no
showing that the latter are not sufficient to cover the same.
51. ABS-CBN Supervisors Employees Union Members vs. ABS-CBN Broadcasting
Corporation, et. al., G.R. No. 106518, March 11, 1999 Even assuming that the special
assessment was validly levied pursuant to paragraph (n), and granting that individual
written authorizations were obtained by the Union, nevertheless there can be no
valid check-off considering that the majority of the Union members had already
withdrawn their individual authorizations.  A withdrawal of individual authorization
is equivalent to no authorization at all
52. Holy Cross of Davao, Inc. vs. Joaquin, G.R. No. 110007, Oct. 18,1996 Check-offs in truth
impose as extra burden on the employer in the form of additional administrative and
bookkeeping costs.  It is a burden assumed by management at the instance of the union and for
its benefit, in order to facilitate the collection of dues necessary for the latter’s life and
sustenance.  But the obligation to pay union dues and agency fees obviously devolves not upon
the employer, but the individual employee.  It is a personal obligation not demandable from the
employer upon default or refusal of the employer to consent to a check-off.  The only obligation
of the employer under a check-off is to effect the deductions and remit the collections to the
union.  The principle of unjust enrichment necessarily precludes recovery of union dues -- or
agency fees -- from the employer, these being, to repeat, obligations pertaining to the individual
worker in favor of the bargaining union.  Where the employer fails or refuses to implement a
check-off agreement, logic and prudence dictate that the union itself undertake the collection of
union dues and assessments from its members (and agency fees from non-union employees);
this, of course, without prejudice to suing the employer for unfair labor practice.
53. Kio kloy v. NLRC, G.R. No. L-54334 January 22, 1986A Company's refusal to make
counter proposal if considered in relation to the entire bargaining process, may indicate bad
faith and this is specially true where the Union's request for a counter proposal is left
unanswered
54. General Milling Corp. Vs. Court of Appeals, G.R. No. 146728.  February 11, 2004: ART.
253. The provision mandates the parties to keep the status quo while they are still in the
process of working out their respective proposal and counter proposal. The general rule is that
when a CBA already exists, its provision shall continue to govern the relationship between the
parties, until a new one is agreed upon. The rule necessarily presupposes that all other things
are equal. That is, that neither party is guilty of bad faith. However, when one of the parties
abuses this grace period by purposely delaying the bargaining process, a departure from the
general rule is warranted.
55. COLEGIO DE SAN JUAN DE LETRAN V. ASSOCIATION OF EMPLOYEES AND
FACULTY OF LETRAN, G.R. NO. 141471, 18 SEPTEMBER 2000, 340 SCRA 587, 595Where
the employer did not even bother to submit an answer to the bargaining proposals of the union, there
is a clear evasion of the duty to bargain collectively.
56. DIVINE WORD UNIVERSITY OF TACLOBAN VS. SECRETARY OF LABOR AND
EMPLOYMENT, 213 SCRA 759, 11 September 1992 the action for intervention had in effect been
denied by the dismissal of the petition for certification election in the May 23, 1989 Order. The sub
silencio treatment of the motion for intervention in said Order does not mean that the motion was
overlooked. It only means, as shown by the findings of facts in the same Order, that there was no
necessity for the holding of a certification election wherein the DWUIFEU could participate.
57. THE INSULAR LIFE ASSURANCE CO., LTD., EMPLOYEES ASSOCIATION-NATU
VS. THE INSULAR LIFE ASSURANCE CO., LTD. G.R. No. L-25291 January 30, 1971
STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE VS. Confessor, G.R. No.
114974 June 16, 2004:
58. STANDARD CHARTERED BANK EMPLOYEES UNION (NUBE VS. Confessor, G.R.
No. 114974 June 16, 2004: The Union has not been able to show that the Bank had done acts,
both at and away from the bargaining table, which tend to show that it did not want to reach an
agreement with the Union or to settle the differences between it and the Union.  Admittedly, the
parties were not able to agree and reached a deadlock.  However, it is herein emphasized that
the duty to bargain “does not compel either party to agree to a proposal or require the making of
a concession.”[53] Hence, the parties’ failure to agree did not amount to ULP under Article 248(g)
for violation of the duty to bargain.