Philippine Supreme Court Decisions On Labor Law

Philippine Supreme Court Decisions on Labor Law
2010 2011 2012 2013 2014

JANUARY
FEBRUARY

1. Labor Law
JANUARY
DOCTRINE CASE / CASE CONTENT
Apprenticeship
agreement; validity.
Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et
al., G.R. No. 187320, January 26, 2011.

The apprenticeship agreements did not indicate the trade or occupation
in which the apprentice would be trained; neither was the apprenticeship
program approved by the Technical Education and Skills Development
Authority (TESDA). These were defective as they were executed in
violation of the law and the rules. Moreover, with the expiration of the
rst agreement and the retention of the employees, the employer, to all
intents and purposes, recognized the completion of their training and
their acquisition of a regular employee status. To foist upon them the
second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself, is a violation of the Labor Codes
implementing rules and is an act manifestly unfair to the employees.

Complaint;
reinstatement.
Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et
al., G.R. No. 167291, January 12, 2011.

Petitioners question the order to reinstate respondents to their former
positions, considering that the issue of reinstatement was never brought
up before the Court of Appeals and respondents never questioned the
award of separation pay to them. Section 2 (c), Rule 7 of the Rules of
Court provides that a pleading shall specify the relief sought, but may add
a general prayer for such further or other reliefs as may be deemed just
and equitable. Under this rule, a court can grant the relief warranted by
the allegation and the evidence even if it is not specically sought by the
injured party; the inclusion of a general prayer may justify the grant of a
remedy different from or in addition to the specic remedy sought, if the
facts alleged in the complaint and the evidence introduced so warrant.
The prayer in the complaint for other reliefs equitable and just in the
premises justies the grant of a relief not otherwise specically prayed
for. Therefore, the court may grant relief warranted by the allegations and
the proof even if no such relief is prayed for. In the instant case, aside
from their specic prayer for reinstatement, respondents, in their
separate complaints, prayed for such reliefs which are deemed just and
equitable.

Collection of accrued
wages; two-fold test.
Social Security System vs. Efren Capada, et al., G.R. No. 168501,
January 31, 2011.

After the Labor Arbiters decision is reversed by a higher
tribunal, the employee may be barred from collecting the accrued wages,
if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. The two-fold
test in determining whether an employee is barred from recovering his
accrued wages requires that (1) there must be actual delay or that the
order of reinstatement pending appeal was not executed prior to its
reversal; and (2) the delay must not be due to the employers unjustied
act or omission. If the delay is due to the employers unjustied refusal,
the employer may still be required to pay the salaries notwithstanding
the reversal of the Labor Arbiters Decision.

Disciplinary
measures;
management
prerogative.
Primo E. Caong, Jr., et al. vs. Avelino Regualos, G.R. No. 179428,
January 26, 2011.

The policy of suspending drivers pending payment of arrears in their
boundary obligations is reasonable. It is acknowledged that an employer
has free rein and enjoys a wide latitude of discretion to regulate all
aspects of employment, including the prerogative to instill discipline on
his employees and to impose penalties, including dismissal, if warranted,
upon erring employees. This is a management prerogative. Indeed, the
manner in which management conducts its own affairs to achieve its
purpose is within the managements discretion. The only limitation on the
exercise of management prerogative is that the policies, rules, and
regulations on work-related activities of the employees must always be
fair and reasonable, and the corresponding penalties, when prescribed,
commensurate to the offense involved and to the degree of the infraction

Dismissal;
constructive
dismissal.
The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R.
No. 181146, January 26, 2011.

Respondent was suspended for one year after being charged with and
found liable for AWOL. After serving her suspension, respondent was
allowed to return to work. Respondent cannot be considered to have been
constructively dismissed by the petitioner during her period of
suspension. Constructive dismissal occurs when there is cessation of
work because continued employment is rendered impossible,
unreasonable, or unlikely as when there is a demotion in rank or
diminution in pay or when a clear discrimination, insensibility, or disdain
by an employer becomes unbearable to the employee leaving the latter
with no other option but to quit. In this case, there was no cessation of
employment relations between the parties. It is unrefuted that
respondent promptly resumed teaching at the university right after the
expiration of the suspension period. In other words, respondent never
quit. Hence, she cannot claim to have been left with no choice but to quit,
a crucial element in a nding of constructive dismissal.

Dismissal; due
process.
Robinsons Galleria/Robinsons Supermarket Corp. and/or Jess Manuel
vs. Irene R. Ranchez, G.R. No. 177937, January 19, 2011.

Respondent employee reported to the petitioner employer the loss of
cash which she placed inside the company locker. Immediately, petitioner
ordered that she be strip-searched by the company guards. However, the
search on her and her personal belongings yielded nothing. The petitioner
also reported the matter to the police and requested the Prosecutors
Ofce for an inquest. Respondent was constrained to spend two weeks in
jail for failure to immediately post bail. The Court ruled that petitioners
failed to accord respondent substantive and procedural due process.
Article 277(b) of the Labor Code mandates that subject to the
constitutional right of workers to security of tenure and their right to be
protected against dismissal, except for just and authorized cause and
without prejudice to the requirement of notice under Article 283 of the
same Code, the employer shall furnish the worker, whose employment is
sought to be terminated, a written notice containing a statement of the
causes of termination, and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of a representative if he
so desires, in accordance with company rules and regulations pursuant to
the guidelines set by the Department of Labor and Employment. The due
process requirements under the Labor Code are mandatory and may not
be supplanted by police investigation or court proceedings. The criminal
aspect of the case is considered independent of the administrative aspect.
Thus, employers should not rely solely on the ndings of the Prosecutors
Ofce. They are mandated to conduct their own separate investigation,
and to accord the employee every opportunity to defend himself.

Dismissal; neglect of
duty.
Hospital Management Services Medical Center Manila vs. Hospital
Management Services, Inc. Medical Center Manila Employees
Association-AFW., G.R. No. 176287, January 31, 2011.

Neglect of duty, to be a ground for dismissal, must be both gross and
habitual. Gross negligence connotes want of care in the performance of
ones duties. Habitual neglect implies repeated failure to perform ones
duties for a period of time, depending upon the circumstances. A single or
isolated act of negligence does not constitute a just cause for the dismissal
of the employee.

Dismissal; negligence
in patient
management.
Hospital Management Services Medical Center Manila vs. Hospital
Management Services, Inc. Medical Center Manila Employees
Association-AFW., G.R. No. 176287, January 31, 2011.

Negligence is dened as the failure to exercise the standard of care that a
reasonably prudent person would have exercised in a similar situation.
The Court emphasizes that the nature of the business of a hospital
requires a higher degree of caution and exacting standard of diligence in
patient management and health care as what is involved are lives of
patients who seek urgent medical assistance. An act or omission that falls
short of the required degree of care and diligence amounts to serious
misconduct which constitutes a sufcient ground for dismissal.
Employer-employee
relationship; jeepney
driver.

Primo E. Caong, Jr., et al. vs. Avelino Regualos, G.R. No. 179428,
January 26, 2011.

It is already settled that the relationship between jeepney
owners/operators and jeepney drivers under the boundary system is that
of employer-employee and not of lessor-lessee. The fact that the drivers
do not receive xed wages but only get the amount in excess of the so-
called boundary that they pay to the owner/operator is not sufcient to
negate the relationship between them as employer and employee.

Employer-employee
relationship; primary
element.
Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.),
Inc. and Renato A. Vergel de Dios, G.R. No. 167622, January 25, 2011

Control over the performance of the task of one providing service both
with respect to the means and manner, and the results of the service is
the primary element in determining whether an employment relationship
exists. Petitioner asserts that his employer Manulifes control over him
was demonstrated (1) when it set the objectives and sales targets
regarding production, recruitment and training programs; and (2) when
it prescribed the Code of Conduct for Agents and the Manulife Financial
Code of Conduct to govern his activities. However, the court ruled that all
these appear to speak of control by the insurance company over its
agents. There are built-in elements of control specic to an insurance
agency, which do not amount to the elements of control that characterize
an employment relationship governed by the Labor Code. They are,
however, controls aimed only at specic results in undertaking an
insurance agency, and are, in fact, parameters set by law in dening an
insurance agency and the attendant duties and responsibilities an
insurance agent must observe and undertake. They do not reach the level
of control into the means and manner of doing an assigned task that
invariably characterizes an employment relationship as dened by labor
law. To reiterate, guidelines indicative of labor law control do not
merely relate to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means and
methods to be employed in attaining the result. Petitioner is an insurance
agent not an employee.

Employer-employee
relationship;
probationary
employment.

A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under
Article 281 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at
the time of the engagement. Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the
following: (1) a just or (2) an authorized cause; and (3) when he fails to
qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.

Employer-employee
relationship; regular
employment.
al., G.R. No. 187320, January 26, 2011.

The respondent employees were already rendering service to the
company when they were made to undergo apprenticeship. The
respondent were regular employees because they occupied positions
such as machine operator, scaleman and extruder operator tasks that
are usually necessary and desirable in petitioner employers usual
business or trade as manufacturer of plastic building materials. These
tasks and their nature characterized the respondents as regular
employees under Article 280 of the Labor Code. Thus, when they were
dismissed without just or authorized cause, without notice, and without
the opportunity to be heard, their dismissal was illegal under the law

Illegal dismissal;
strained relations.

Article 279 of the Labor Code provides that an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges, to full backwages, inclusive of
allowances, and to other benets or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of
his actual reinstatement. However, due to the strained relations of the
parties, 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. Thus, as an
illegally or constructively dismissed employee, respondent is entitled to:
(1) either reinstatement, if viable, or separation pay, if reinstatement is no
longer viable; and (2) backwages. These two reliefs are separate and
distinct from each other and are awarded conjunctively.

Illegal recruitment;
elements.
People of the Philippines vs. Teresita Tessie Laogo, G.R. No. 176264,
January 10, 2011.

Recruitment and placement refers to the act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for prot or not. When a person
or entity, in any manner, offers or promises for a fee employment to two
or more persons, that person or entity shall be deemed engaged in
recruitment and placement. Article 38(a) of the Labor Code, as amended,
species that recruitment activities undertaken by non-licensees or non-
holders of authority are deemed illegal and punishable by law. And when
the illegal recruitment is committed against three or more persons,
individually or as a group, then it is deemed committed in large scale and
carries with it stiffer penalties as the same is deemed a form of economic
sabotage. But to prove illegal recruitment, it must be shown that the
accused, without being duly authorized by law, gave complainants the
distinct impression that he had the power or ability to send them abroad
for work, such that the latter were convinced to part with their money in
order to be employed. It is important that there must at least be a promise
or offer of an employment from the person posing as a recruiter, whether
locally or abroad.

Illegal dismissal;
execution of waiver
and quitclaim.
Bernadeth Londonio and Joan Corcoro vs. Bio Research, Inc. and
Wilson Y. Ang, G.R. No. 191459, January 17, 2011.

An employees execution of a nal settlement and receipt of amounts
agreed upon does not foreclose his right to pursue a claim for illegal
dismissal. Thus, an employee illegally retrenched is entitled to
reinstatement without loss of seniority rights and privileges, as well as to
payment of full backwages from the time of her separation until actual
reinstatement, less the amount which he/she received as retrenchment
pay.

Jurisdiction; labor
arbiter.
Renato Real vs. Sangu Philippines, Inc. et al., G.R. No. 168757. January
19, 2011.

Petitioner was removed from his position as a manager through a Board
Resolution. Petitioner led a complaint for illegal dismissal before the
labor arbiter. Respondents claimed that petitioner is both a stockholder
and a corporate ofcer of respondent corporation, hence, his action
against respondents is an intra-corporate controversy over which the
Labor Arbiter has no jurisdiction. The Court ruled that this is not an intra-
corporate controversy but a labor case cognizable by the labor arbiter. To
determine whether a case involves an intra-corporate controversy that is
to be heard and decided by the branches of the RTC specically
designated by the Court to try and decide such cases, two tests must be
applied: (a) the status or relationship test, and (2) the nature of the
controversy test. The rst test requires that the controversy arise out of
intra-corporate or partnership relations among the stockholders,
members or associates of the corporation, partnership or association,
between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates;
between such corporation, partnership, or association and the public or
between such corporation, partnership, or association and the State
insofar as it concerns its franchise, license or permit to operate. The
second test requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. The Court in this case
held that petitioner is not a corporate ofcer because he was not validly
appointed by the Board, thus, failing the relationship test, and that this is
a case of employment termination which is a labor controversy and not
an intra-corporate dispute, thus failing the nature of the controversy test.

Jurisdiction; labor
dispute.
The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R.
No. 181146, January 26, 2011.

Article 217 of the Labor Code states that unfair labor practices and
termination disputes fall within the original and exclusive jurisdiction of
the Labor Arbiter. As an exception, under Article 262 the Voluntary
Arbitrator, upon agreement of the parties, shall also hear and decide all
other labor disputes including unfair labor practices and bargaining
deadlocks. For the exception to apply, there must be agreement between
the parties clearly conferring jurisdiction to the voluntary arbitrator. Such
agreement may be stipulated in a collective bargaining agreement.
However, in the absence of a collective bargaining agreement, it is enough
that there is evidence on record showing the parties have agreed to resort
to voluntary arbitration.

NLRC; factual
ndings.
al., G.R. No. 167291, January 12, 2011.

Factual ndings of labor ofcials, who are deemed to have acquired
expertise in matters within their jurisdiction, are generally accorded not
only respect but even nality by the courts when supported by
substantial evidence, i.e., the amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. But
these ndings are not infallible. When there is a showing that they were
arrived at arbitrarily or in disregard of the evidence on record, they may
be examined by the courts. The CA can grant the petition for certiorari if it
nds that the NLRC, in its assailed decision or resolution, made a factual
nding not supported by substantial evidence. Thus, it is within the
jurisdiction of the CA to review the ndings of the NLRC.

Petition; certicate of
non-forum shopping.
al., G.R. No. 167291, January 12, 2011.

While the general rule is that the certicate of non-forum shopping must
be signed by all the plaintiffs in a case and the signature of only one of
them is insufcient, the Court has stressed that the rules on forum
shopping, which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective. Strict
compliance with the provision regarding the certicate of non-forum
shopping underscores its mandatory nature in that the certication
cannot be altogether dispensed with or its requirements completely
disregarded. It does not, however, prohibit substantial compliance
therewith under justiable circumstances, considering especially that
although it is obligatory, it is not jurisdictional. In a number of cases, the
Court has consistently held that when all the petitioners share a common
interest and invoke a common cause of action or defense, the signature of
only one of them in the certication against forum shopping substantially
complies with the rules.

Petition; failure to
attach documents.
al., G.R. No. 187320, January 26, 2011.

The respondent workers sought that the petition be dismissed outright
for the petitioners failure to attach to the petition a copy of the
Production and Work Schedule and a copy of the compromise agreement
allegedly entered into material portions of the record that should
accompany and support the petition, pursuant to Section 4, Rule 45 of the
Rules of Court. In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo
J. Garchitorena the Court held that the phrase of the pleadings and other
material portions of the record xxx as would support the allegation of the
petition clearly contemplates the exercise of discretion on the part of the
petitioner in the selection of documents that are deemed to be relevant to
the petition. The crucial issue to consider then is whether or not the
documents accompanying the petition sufciently supported the
allegations therein. The failure to attach copy of the subject documents is
not fatal as the challenged CA decision clearly summarized the
labor tribunals rulings.

Petition; verication. Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et
al., G.R. No. 167291, January 12, 2011.

The verication requirement is deemed substantially complied with when
some of the parties who undoubtedly have sufcient knowledge and
belief to swear to the truth of the allegations in the petition had signed the
same. Such verication is deemed a sufcient assurance that the matters
alleged in the petition have been made in good faith or are true and
correct, and not merely speculative. In any case, the settled rule is that a
pleading which is required by the Rules of Court to be veried, may
be given due course even without a verication if the circumstances
warrant the suspension of the rules in the interest of justice. Indeed, the
absence of a verication is not jurisdictional, but only a formal defect,
which does not of itself justify a court in refusing to allow and act on a
case. Hence, the failure of some of the respondents to sign the verication
attached to their Memorandum of Appeal led with the NLRC is not fatal
to their cause of action.

Regional director;
review of decision.
The Heritage Hotel Manila, acting through its owner, Grand Plaza
Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC), G.R. No. 178296, January 12, 2011.

Petitioner appealed an adverse decision to the BLR. BLR Director
inhibited himself from the case because he had been a former counsel of
respondent. In view of the inhibition, DOLE Secretary took cognizance of
the appeal. Jurisdiction to review the decision of the Regional Director lies
with the BLR. Once jurisdiction is acquired by the court, it remains with it
until the full termination of the case. Thus, jurisdiction remained with the
BLR despite the BLR Directors inhibition. When the DOLE Secretary
resolved the appeal, she merely stepped into the shoes of the BLR
Director and performed a function that the latter could not himself
perform. She did so pursuant to her power of supervision and control
over the BLR.

Union registration;
cancellation.
The Heritage Hotel Manila, acting through its owner, Grand Plaza
Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC), G.R. No. 178296, January 12, 2011.

The amendment introduced by RA 9481 sought to strengthen the
workers right to self-organization and enhance the Philippines
compliance with its international obligations as embodied in the
International Labour Organization (ILO) Convention No. 87, pertaining
to the non-dissolution of workers organizations by administrative
authority. ILO Convention No. 87 provides that workers and employers
organizations shall not be liable to be dissolved or suspended by
administrative authority. The ILO has expressed the opinion that the
cancellation of union registration by the registrar of labor unions, which
in our case is the BLR, is tantamount to dissolution of the organization by
administrative authority when such measure would give rise to the loss of
legal personality of the union or loss of advantages necessary for it to
carry out its activities, which is true in our jurisdiction. Although the ILO
has allowed such measure to be taken, provided that judicial safeguards
are in place, i.e., the right to appeal to a judicial body, it has nonetheless
reminded its members that dissolution of a union, and cancellation of
registration for that matter, involve serious consequences for
occupational representation. It has, therefore, deemed it preferable if
such actions were to be taken only as a last resort and after exhausting
other possibilities with less serious effects on the organization. It is
undisputed that appellee failed to submit its annual nancial reports and
list of individual members in accordance with Article 239 of the Labor
Code. However, the existence of this ground should not necessarily lead to
the cancellation of union registration. At any rate, the Court in this case
took note of the fact that on 19 May 2000, appellee had submitted its
nancial statement for the years 1996-1999. With this submission,
appellee has substantially complied with its duty to submit its nancial
report for the said period.

Wages; payment
pending
reinstatement.
Social Security System vs. Efren Capada, et al., G.R. No. 168501,
January 31, 2011.

Employees are entitled to their accrued salaries during the period
between the Labor Arbiters order of reinstatement pending appeal and
the resolution of the National Labor Relations Commission (NLRC)
overturning that of the Labor Arbiter. Otherwise stated, even if the order
of reinstatement of the Labor Arbiter is reversed on appeal, the employer
is still obliged to reinstate and pay the wages of the employee during the
period of appeal until reversal by a higher court or tribunal. On the other
hand, if the employee has been reinstated during the appeal period and
such reinstatement order is reversed with nality, the employee is not
required to reimburse whatever salary he received for he is entitled to
such, more so if he actually rendered services during the period.

FEBRUARY
Abandonment;
elements.
E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato,
et al., G.R. No. 182070, February 16, 2011

Respondents led an illegal dismissal case against the petitioner-
corporation. For its defense, petitioner-corporation alleged that the
respondents abandoned their work and were not dismissed, and that it
sent letters advising respondents to report for work, but they refused.
The Court held that for abandonment to exist, it is essential (a) that the
employee must have failed to report for work or must have been absent
without valid or justiable reason; and (b) that there must have been a
clear intention to sever the employer-employee relationship manifested
by some overt acts. The employer has the burden of proof to show the
employees deliberate and unjustied refusal to resume his employment
without any intention of returning. Mere absence is not sufcient. There
must be an unequivocal intent on the part of the employee to discontinue
his employment. Based on the evidence presented, the reason why
respondents failed to report for work was because petitioner-corporation
barred them from entering its construction sites. It is a settled rule that
failure to report for work after a notice to return to work has been served
does not necessarily constitute abandonment. The intent to discontinue
the employment must be shown by clear proof that it was deliberate and
unjustied. Petitioner-corporation failed to show overt acts committed by
respondents from which it may be deduced that they had no more
intention to work. Respondents ling of the case for illegal dismissal
barely four (4) days from their alleged abandonment is totally
inconsistent with the known concept of what constitutes abandonment.

Certication election;
petition for
cancellation of union
registration.
Legend International Resorts Limited v. Kilusang Manggagawa ng
Legenda, G.R. No. 169754, February 23, 2011

Respondent union led a petition for certication election. Petitioner
moved to dismiss the petition for certication election alleging the
pendency of a petition for cancellation of the unions registration. The
DOLE Secretary ruled in favor of the legitimacy of the respondent as a
labor organization and ordered the immediate conduct of a certication
election. Pending appeal in the Court of Appeals, the petition for
cancellation was granted and became nal and executory. Petitioner
argued that the cancellation of the unions certicate of registration
should retroact to the time of its issuance. Thus, it claimed that the
unions petition for certication election and its demand to enter into
collective bargaining agreement with the petitioner should be dismissed
due to respondents lack of legal personality. The Court ruled that the
pendency of a petition for cancellation of union registration does not
preclude collective bargaining, and that an order to hold a certication
election is proper despite the pendency of the petition for cancellation of
the unions registration because at the time the respondent union led its
petition, it still had the legal personality to perform such act absent an
order cancelling its registration.

Certiorari under Rule
65; review of facts by
the Court of Appeals
Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al.
G.R. No. 165381, February 9, 2011

While it is true that factual ndings made by quasi-judicial and
administrative tribunals, if supported by substantial evidence, are
accorded great respect and even nality by the courts, this general rule
admits of exceptions. When there is a showing that a palpable and
demonstrable mistake that needs rectication has been committed or
when the factual ndings were arrived at arbitrarily or in disregard of the
evidence on record, these ndings may be examined by the courts. In the
present case, the Court of Appeals found itself unable to completely
sustain the ndings of the NLRC thus, it was compelled to review the facts
and evidence and not limit itself to the issue of grave abuse of discretion.

Construction
Industry; project
employees.
Exodus International Construction Corporation, et al. v. Guillermo
Biscocho, et al., G.R. No. 166109, February 23, 2011

Petitioner is a duly licensed labor contractor engaged in painting houses
and buildings. Respondents, former painters of the petitioner, led an
illegal dismissal case against petitioner. Petitioner alleged that the
respondents abandoned their job and were not dismissed by the
petitioner. The Labor Arbiter ruled that there was neither illegal dismissal
nor abandonment of job and that the respondents should be reinstated
but without any backwages. On appeal, petitioner alleged that the
reinstatement of respondents to their former positions, which were no
longer existing, is impossible, highly unfair and unjust. It further alleged
that the project they were working on at the time of their alleged
dismissal was already completed. Having completed their tasks, their
positions automatically ceased to exist. Thus, there were no more
positions where they can be reinstated as painters. The Court ruled that
there are two types of employees in the construction industry. The rst is
referred to as project employees or those employed in connection with a
particular construction project or phase thereof and such employment is
coterminous with each project or phase of the project to which they are
assigned. The second is known as non-project employees or those
employed without reference to any particular construction project or
phase of a project. Respondents belonged to the second type and are
classied as regular employees of petitioner. It is clear from the records of
the case that when one project is completed, respondents were
automatically transferred to the next project awarded to petitioners.
There was no employment agreement given to respondents which
clearly spelled out the duration of their employment and the specic
work to be performed and there is no proof that they were made aware of
these terms and conditions of their employment at the time of hiring.
Thus, it is now too late for petitioner to claim that respondents are project
employees whose employment is coterminous with each project or phase
of the project to which they are assigned. Nonetheless, assuming that
respondents were initially hired as project employees, a project employee
may acquire the status of a regular employee when the following factors
concur: (1) There is a continuous rehiring of project employees even after
cessation of a project; and (2) The tasks performed by the alleged project
employee are vital, necessary and indispensable to the usual business or
trade of the employer. In this case, the evidence on record shows that
respondents were employed and assigned continuously to the various
projects of petitioners. As painters, they performed activities which were
necessary and desirable in the usual business of petitioner, which was
engaged in subcontracting jobs for painting of residential units,
condominium and commercial buildings. As regular employees,
respondents are entitled to be reinstated without loss of seniority rights.

Constructive
Dismissal; security
guards.
Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama,
G.R. No. 186614, February 23, 2011

Respondent was hired by petitioner, a security agency, as a security
guard. He was assigned at the Philippine Heart Center until his relief on
January 30, 2006. Respondent was not given any assignment thereafter.
Thus, on August 2, 2006, he led a complaint for constructive dismissal
and nonpayment of 13 month pay, with prayer for damages against
petitioner. To refute the claim, petitioner alleged that respondent was not
constructively or illegally dismissed, but had voluntarily resigned. The
Court held that respondent was constructively dismissed. In cases the
involving security guards, a relief and transfer order in itself does not
sever employment relationship between a security guard and his agency.
An employee has the right to security of tenure, but this does not give him
a vested right to his position as would deprive the company of its
prerogative to change his assignment or transfer him where his service,
as security guard, will be most benecial to the client. Temporary off-
detail or the period of time security guards are made to wait until they
are transferred or assigned to a new post or client does not constitute
constructive dismissal, so long as such status does not continue beyond
six months. The onus of proving that there is no post available to which
the security guard can be assigned rests on the employer. In the instant
case, the failure of petitioner to give respondent a work assignment
beyond the reasonable six-month period makes it liable for constructive
dismissal.

Constructive
dismissal; defense of
abandonment.
G.R. No. 186614, February 23, 2011

Respondent led an illegal dismissal case against the petitioner.
Petitioner alleged that respondent abandoned his job and was not
dismissed. The Court held that respondent was illegally dismissed. The
jurisprudential rule on abandonment is constant. It is a matter of
intention and cannot lightly be presumed from certain equivocal acts. To
constitute abandonment, two elements must concur: (1) the failure to
report for work or absence without valid or justiable reason; and (2) a
clear intent, manifested through overt acts, to sever the employer-
employee relationship. In this case, petitioner failed to establish clear
evidence of respondents intention to abandon his employment.

Constructive
dismissal; defense of
resignation.
G.R. No. 186614, February 23, 2011

Respondent, a security guard, led an illegal dismissal case against the
petitioner. To refute the claim, petitioner alleged that respondent was not
constructively or illegally dismissed, but had voluntarily resigned.
Petitioner alleged that respondents resignation is evident from his
withdrawal of his cash and rearm bonds. Resignation is the voluntary act
of an employee who is in a situation where one believes that personal
reasons cannot be sacriced in favor of the exigency of the service, and
one has no other choice but to dissociate oneself from employment. It is a
formal pronouncement or relinquishment of an ofce. The intent to
relinquish must concur with the overt act of relinquishment. Thus, the
acts of the employee before and after the alleged resignation must be
considered in determining whether, he or she, in fact, intended to sever
his or her employment. Should the employer interpose the defense of
resignation, it is incumbent upon the employer to prove that the
employee voluntarily resigned. On this point, the Court held that
petitioner failed to discharge its burden. Moreover, the ling of a
complaint belies petitioners claim that respondent voluntarily resigned.

Execution of
Judgment; properties
covered.
Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007,
February 16, 2011

Premier Allied and Contracting Services, Inc. (PACSI) and its President,
the petitioner, were held liable to pay the respondents separation pay and
attorneys fees. To execute this judgment, the NLRC sheriff issued a Notice
of Sale of a property with a TCT in the name of the petitioner and his wife.
The Court ruled that the Notice of Sale is null and void. The power of the
NLRC, or the courts, to execute its judgment extends only to properties
unquestionably belonging to the judgment debtor alone. A sheriff,
therefore, has no authority to attach the property of any person except
that of the judgment debtor. Likewise, there is no showing that the sheriff
ever tried to execute on the properties of the corporation. The TCT of the
property bears out that, indeed, it belongs to petitioner and his wife.
Thus, even if we consider petitioner as an agent of the corporation and,
therefore, not a stranger to the case such that the provision on third-
party claims will not apply to him, the property was registered not only in
the name of petitioner but also of his wife. She stands to lose the property
subject of execution without ever being a party to the case. This will be
tantamount to deprivation of property without due process.

Illegal dismissal;
burden of proof.
et al., G.R. No. 182070, February 16, 2011

Respondents led an illegal dismissal case against petitioner. Petitioner
alleged that the respondents abandoned their work and were never
dismissed by the petitioner. NLRC ruled that the respondents were not
illegally dismissed since they failed to present a written notice of
termination. This was however reversed by the Court of Appeals. The
Court held that a written notice of dismissal is not a pre-requisite for a
nding of illegal dismissal. Petitioner failed to prove that respondents
were dismissed for a just or authorized cause. In an illegal dismissal case,
the onus probandi rests on the employer to prove that the dismissal of an
employee is for a valid cause.

Illegal dismissal;
burden of proof.
Exodus International Construction Corporation, et al. v. Guillermo
Biscocho, et al., G.R. No. 166109, February 23, 2011

Respondents led an illegal dismissal case against the petitioners.
Petitioners, in their defense, alleged that the respondents abandoned
their work and were not dismissed by the petitioners. Although In cases
of illegal dismissal, the employer bears the burden of proof to prove that
the termination was for a valid or authorized cause, the employee must
rst establish by substantial evidence the fact that he was dismissed. If
there is no dismissal, then there can be no question as to the legality or
illegality thereof. In the present case, the Court held that there was no
evidence that respondents were dismissed or that they were prevented
from returning to their work. It was only respondents unsubstantiated
conclusion that they were dismissed. As a matter of fact, respondents
could not name the particular person who effected their dismissal and
under what particular circumstances. Absent any showing of an overt or
positive act proving that petitioners had dismissed respondents, the
latters claim of illegal dismissal cannot be sustained.

Illegal dismissal; nal
and executory
judgment.
Filipinas Palmoil Processing, Inc. and Dennis T. Villareal v. Joel P.
Dejapa, represented by his Attorney-in-Fact Myrna Manzano, G.R. No.
167332, February 7, 2011

Respondent employee led an illegal dismissal case against the
petitioner-company and Tom Madula, its operations manager. The case
was dismissed by the labor arbiter and the dismissal was afrmed by
NLRC. On August 29, 2002, the Court of Appeals reversed and set aside
the NLRC decision and resolution. The CA ordered the petitioner company
to pay respondent separation pay, moral and exemplary damages, and
attorneys fees. The decision became nal and executory on February 27,
2004, and consequently a writ of execution was issued. Petitioner
company filed a motion to Quash a Writ of Execution. The Labor Arbiter
granted the Motion and exonerated the petitioner company from paying
backwages and held that it was petitioner Madula who should be liable to
pay backwages. Respondent then led before the CA a Very Urgent
Motion for Clarication of Judgment. On December 10, 2004, CA granted
the Motion and held the petitioner company is solely liable for judgement
award. As a general rule, nal and executory judgments are immutable
and unalterable, except under these recognized exceptions, to wit: (a)
clerical errors; (b) nunc pro tunc entries which cause no prejudice to any
party; and (c) void judgments. The underlying reason for the rule is two-
fold: (1) to avoid delay in the administration of justice and thus make
orderly the discharge of judicial business, and (2) to put judicial
controversies to an end, at the risk of occasional errors, inasmuch as
controversies cannot be allowed to drag on indenitely and the rights and
obligations of every litigant must not hang in suspense for an indenite
period of time. What the CA rendered on December 10, 2004 was a nunc
pro tunc order clarifying the decretal portion of its August 29, 2002
Decision. The object of a judgment nunc pro tunc is not the rendering of a
new judgment and the ascertainment and determination of new rights,
but is one placing in proper form on the record, the judgment that had
been previously rendered, to make it speak the truth, so as to make it
show what the judicial action really was. It is not to correct judicial errors,
such as to render a judgment anew in place of the one it rendered, nor to
supply non action by the court, however erroneous the judgment may
have been.

Illegal dismissal;
liability of corporate
ofcers.
G.R. No. 165381, February 9, 2011

Petitioner led a complaint against respondent company and its ofcers
for illegal dismissal, unfair labor practice, and money claims. Petitioner
alleged that the ofcers should be held personally liable for the acts of
company which were tainted with bad faith and arbitrariness. As a
general rule, a corporate ofcer cannot be held liable for acts done in his
ofcial capacity because a corporation, by legal ction, has a personality
separate and distinct from its ofcers, stockholders, and members. To
pierce this ctional veil, it must be shown that the corporate personality
was used to perpetuate fraud or an illegal act, or to evade an existing
obligation, or to confuse a legitimate issue. In illegal dismissal cases,
corporate ofcers may be held solidarily liable with the corporation if the
termination was done with malice or bad faith. Moral damages are
awarded only where the dismissal was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary
to morals, good customs or public policy. Exemplary damages may avail if
the dismissal was effected in a wanton, oppressive or malevolent manner.
In the present case, the Court held that petitioner failed to prove that his
dismissal was orchestrated by the individual respondents and their acts
were attended with bad faith or were done oppressively.

Illegal dismissal;
redundancy.
G.R. No. 165381, February 9, 2011

Respondent-company, due to business troubles and losses, implemented
a Right-Sizing Program which entailed a company-wide reorganization
involving the transfer, merger, absorption or abolition of certain
departments of the company. As a result, respondent-company
terminated the services of petitioner on account of redundancy. Petitioner
led a complaint against respondent-company and its ofcers for illegal
dismissal, unfair labor practice, and money claims. The Court ruled that
petitioner was validly dismissed. There is redundancy when the service
capability of the workforce is greater than what is reasonably required to
meet the demands of the business enterprise. A position becomes
redundant when it is rendered superuous by any number of factors
such as over-hiring of workers, decrease in volume of business, or
dropping a particular product line or service activity previously
manufactured or undertaken by the enterprise. The Court has been
consistent in holding that the determination of whether or not an
employees services are still needed or sustainable properly belongs to
the employer. Provided there is no violation of law or a showing that the
employer was prompted by an arbitrary or malicious act, the soundness
or wisdom of this exercise of business judgment is not subject to the
discretionary review of the Labor Arbiter and the NLRC. However, an
employer cannot simply declare that it has become overmanned and
dismiss its employees without producing adequate proof to sustain its
claim of redundancy. Among the requisites of a valid redundancy program
are: (1) the good faith of the employer in abolishing the redundant
position; and (2) fair and reasonable criteria in ascertaining what
positions are to be declared redundant, such as but not limited to:
preferred status, efciency, and seniority. The Court also held that the
following evidence may be proffered to substantiate redundancy:
adoption of a new stafng pattern, feasibility studies/ proposal on the
viability of the newly created positions, job description and the approval
by the management of the restructuring.

Labor Union;
collateral attack on
legal personality.
Legend International Resorts Limited v. Kilusang Manggagawa ng
Legenda, G.R. No. 169754 , February 23, 2011

Petitioner moved to dismiss the petition for certication election led by
respondent union by questioning the validity of the respondents union
registration. The Court held that legitimacy of the legal personality of
respondent cannot be collaterally attacked in a petition for certication
election proceeding but only through a separate action instituted
particularly for the purpose of assailing it. The Implementing Rules
stipulate that a labor organization shall be deemed registered and vested
with legal personality on the date of issuance of its certicate of
registration. Once a certicate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. It may be questioned
only in an independent petition for cancellation in accordance with
Section 5 of Rule V, Book V of the Implementing Rules.

Money claims; burden
of proof.
et al., G.R. No. 182070 ,February 16, 2011

Respondents alleged that petitioner-corporation failed to pay them their
full compensation. The Labor Arbiter granted their monetary claims but
the NLRC reversed the award considering that the petitioner-corporation
submitted copies of payrolls, which it annexed to its memorandum on
appeal, showing full payment. The general rule is that the burden rests on
the employer to prove payment, rather than on the employee to prove
non-payment. The reason for the rule is that the pertinent personnel les,
payrolls, records, remittances, and other similar documents which
will show that overtime, differentials, service incentive leave, and other
claims of the worker have been paid are not in the possession of the
worker but in the custody and absolute control of the employer. In this
case, the submission by petitioner-corporation of the time records and
payrolls only when the case was on appeal before the NLRC is contrary to
the elementary precepts of justice and fair play. Respondents were not
given the opportunity to check the authenticity and correctness of the
evidence submitted on appeal. Thus, the Supreme Court held that the
monetary claims of respondents should be granted. It is a time-honored
principle that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of
the latter. It is the rule in controversies between a laborer and his master
that doubts reasonably arising from the evidence, or in the interpretation
of agreements and writing, should be resolved in the formers favor.

National Labor
Relations
Commission;
jurisdiction
Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007,
February 16, 2011

Respondents led an illegal dismissal case against Premier Allied and
Contracting Services, Inc. (PACSI) and its President, the petitioner. PACSI
and the petitioner were held liable to pay the respondents separation pay
and attorneys fees. To execute this judgment, NLRC sheriff issued a
Notice of Sale of a property with TCT in the name of the petitioner and
his wife. Petitioner led an action for prohibition and damages with
prayer for the issuance of a temporary restraining order (TRO) before the
Regional Trial Court (RTC). The Court ruled that the RTC lacks
jurisdiction to resolve the matter. The Court has long recognized that
regular courts have no jurisdiction to hear and decide questions which
arise from and are incidental to the enforcement of decisions, orders, or
awards rendered in labor cases by appropriate ofcers and tribunals of
the Department of Labor and Employment. To hold otherwise is to
sanction splitting of jurisdiction which is obnoxious to the orderly
administration of justice. The NLRC Manual on the Execution of Judgment
deals specically with third-party claims in cases brought before that
body. It denes a third-party claim as one where a person, not a party to
the case, asserts title to or right to the possession of the property
levied upon. It also sets out the procedure for the ling of a third-party
claim, to wit: such person shall make an afdavit of his title thereto or
right to the possession thereof, stating the grounds of such right or title
and shall le the same with the sheriff and copies thereof served upon the
Labor Arbiter or proper ofcer issuing the writ and upon the prevailing
party. In the present case, there is no doubt that petitioners complaint is
a third-party claim within the cognizance of the NLRC. Petitioner may
indeed be considered a third party in relation to the property subject of
the execution since there is no question that the property belongs to
petitioner and his wife, and not to the corporation. It can be said that the
property belongs to the conjugal partnership, and not to petitioner alone.
At the very least, the Court can consider petitioners wife to be a third
party within the contemplation of the law.

Placement Fee; proof
of excessive
collection.
Avelina F. Sagun v. Sunace International Management Services, Inc.,
G.R. No. 179242, February 23, 2011

Petitioner led a complaint against respondent for collection of excess
placement fee dened in Article 34(a) of the Labor Code. Petitioner
presented as her evidence a promissory note reecting excessive fees and
testied as to the deductions made by her foreign employer. On the other
hand, respondent presented an acknowledgment receipt reecting
collection of an amount authorized by POEA. The Court held that the
pieces of evidence presented by petitioner are not substantial enough to
show that the respondent collected from her more than the allowable
placement fee. In proceedings before administrative and quasi-judicial
agencies, the quantum of evidence required to establish a fact is
substantial evidence, or that level of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion. The Court gave
more credence to respondents evidence consisting of the
acknowledgment receipt showing the amount paid by petitioner and
received by respondent. A receipt is a written and signed
acknowledgment that money or goods have been delivered. Although a
receipt is not conclusive evidence, an exhaustive review of the records
of the case fails to disclose any other evidence sufcient and strong
enough to overturn the acknowledgment embodied in respondents
receipt as to the amount it actually received from petitioner. Having failed
to adduce sufcient rebuttal evidence, petitioner is bound by the contents
of the receipt issued by respondent. The subject receipt remains as the
primary or best evidence. The promissory note presented by petitioner
cannot be considered as adequate evidence to show the excessive
placement fee. It must be emphasized that a promissory note is a solemn
acknowledgment of a debt and a formal commitment to repay it on the
date and under the conditions agreed upon by the borrower and the
lender. A person who signs such an instrument is bound to honor it as a
legitimate obligation duly assumed by him through the signature he
afxes thereto as a token of his good faith. The fact that respondent is not
a lending company does not preclude it from extending a loan to
petitioner for her personal use. As for the deductions purportedly made
by petitioners foreign employer, the Court notedthat there is no single
piece of document or receipt showing that deductions have in fact been
made, or isthere any proof that these deductions from the salary formed
part of the subject placement fee. To be sure, mere general allegations of
payment of excessive placement fees cannot be given merit as the charge
of illegal exaction is considered a grave offense which could cause the
suspension or cancellation of the agencys license. They should be proven
and substantiated by clear, credible, and competent evidence.

Procedural due
process; notice
requirements.
G.R. No. 165381, February 9, 2011

Petitioner was dismissed by respondent-company due to redundancy.
However, it failed to provide the Department of Labor and Employment
with a written notice regarding petitioners termination. The notice of
termination was also not properly served on the petitioner. Further, a
reading of the notice shows that respondent-company failed to properly
inform the petitioner of the grounds for his termination. There are two
aspects which characterize the concept of due process under the Labor
Code: one is substantive whether the termination of employment was
based on the provision of the Labor Code or in accordance with the
prevailing jurisprudence; the other is procedural the manner in which
the dismissal was effected. There is a psychological effect or a stigma
in immediately nding ones self laid off from work. This is why our labor
laws have provided for procedural due process. While employers have the
right to terminate employees it can no longer sustain, our laws also
recognize the employees right to be properly informed of the impending
termination of his employment. Though the failure of respondent-
company to comply with the notice requirements under the Labor Code
did not affect the validity of the dismissal, petitioner is however entitled
to nominal damages in addition to his separation pay.

Quitclaims; validity. Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et
al., G.R. No. 183390, February 16, 2011

Respondents were terminated from employment due to retrenchment
implemented by petitioner. Upon their dismissal, the respondents signed
individual Release Waiver and Quitclaim. The Court ruled that a waiver
or quitclaim is a valid and binding agreement between the parties,
provided that it constitutes a credible and reasonable settlement, and that
the one accomplishing it has done so voluntarily and with a full
understanding of its import. In this case, the respondents were
sufciently apprised of their rights under the waivers and quitclaims that
they signed. Each document contained the signatures of the union
president and its counsel, which proved that respondents were duly
assisted when they signed the waivers and quitclaims. Hence, the Court
upheld the validity of thewaivers and quitclaims signed by the
respondents in this case.

Retrenchment; notice
requirements.
Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et
al., G.R. No. 183390, February 16, 2011

Petitioner issued a Memorandum informing all its employees of the
decision of the companys Board of Directors to downsize and reorganize
its business operations due to the change of its corporate structure.
Petitioner served the individual notice of termination on itsmemployees
on May 14, 2004 or 30 days before the effective date of their termination
on 13 June 2004, while it submitted the notice of termination to the
Department of Labor and Employment only on 26 May 2004, short of the
one-month prior notice requirement under Article 283 of the Labor Code.
The Court held that petitioners failure to comply with the one-month
notice to the DOLE is only a procedural inrmity and does not render the
retrenchment illegal. When the dismissal is for a just cause, the absence of
proper notice will not nullify the dismissal or render it illegal or
ineffectual. Instead, the employer should indemnify the employee for
violation of his statutory rights.

Retrenchment; notice
requirements.
Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C.
Gopo, et al., G.R. No. 183390, February 16, 2011

In 2004, the petitioner had to retrench and consequently terminate the
employment of the respondents. Respondents questioned the validity of
the retrenchment, and alleged that though petitioners nancial
statements in 2001 and 2002 reected losses, it declared net income in
2003. The Court ruled that the fact that there was a net income in 2003
does mean that there was no valid reason for the retrenchment. Records
showed that the net income of P6,185,707.05 in 2003 was not enough to
allow petitioners to recover the loss of P52,904,297.88 which it suffered
in 2002. Article 283 of the Labor Code recognizes retrenchment to
prevent losses as a right of the management to meet clear and continuing
economic threats or during periods of economic recession to prevent
losses. There is no need for the employer to wait for substantial losses to
materialize before exercising ultimate and drastic option to prevent such
losses.

Unfair Labor Practice;
right to self-organize.
G.R. No. 165381, February 9, 2011

Respondent-company implemented a company-wide reorganization
which resulted in the abolition of petitioners position. Petitioner alleged
that he was illegally dismissed and that respondent-company is guilty of
unfair labor practice because his functions were outsourced to labor-only
contractors. The Supreme Court held unfair labor practice refers to acts
that violate the workers right to organize. The prohibited acts are related
to the workers right to self-organization and to the observance of a CBA.
Thus, an employer may be held liable for unfair labor practice only if it
can be shown that his acts interfere with his employees right to self-
organization. Since there is no showing that the respondent companys
implementation of the Right-Sizing Program was motivated by ill will, bad
faith or malice, or that it was aimed at interfering with its employees
right to self-organization, there is no unfair labor practice to speak of in
this case.

MARCH
Abandonment;
elements.
Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No.
167751, March 2, 2011.

Respondent employee was dismissed by petitioners on the ground of
alleged habitual absenteeism and abandonment of work. Jurisprudence
provides for two essential requirements for abandonment of work to
exist: (1) the failure to report for work or absence without valid or
justiable reason, and (2) clear intention to sever the employer-employee
relationship manifested by some overt acts should both concur. Further,
the employees deliberate and unjustied refusal to resume his
employment without any intention of returning should be established and
proven by the employer. The Court held that petitioners failed to prove
that it was respondent employee who voluntarily refused to report back
for work by his deance and refusal to accept the memoranda and the
notices of absences sent to him. Petitioners failed to present evidence that
they sent these notices to respondent employees last known address for
the purpose of warning him that his continued failure to report would be
construed as abandonment of work. Moreover, the fact that respondent
employee never prayed for reinstatement and has sought employment in
another company which is a competitor of petitioners cannot be
construed as his overt acts of abandoning employment. Neither can the
delay of four months be taken as an indication that the respondent
employees ling of a complaint for illegal dismissal is a mere
afterthought. Records show that respondent employee attempted to get
his separation pay and alleged commissions from the company, but it was
only after his requests went unheeded that he resorted to judicial
recourse.

Corporate ofcer;
solidary liability.
Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No.
167751, March 2, 2011.

Respondent employee led an illegal dismissal case against the Petitioner
Corporation and its President. Though the Court found that Respondent
was illegally dismissed, it held that the President of the Petitioner
Corporation should not be held solidarily liable with Petitioner
Corporation. Obligations incurred by corporate ofcers, acting as such
corporate agents, are not theirs but the direct accountabilities of the
corporation they represent. Thus, they should not be generally held
jointly and solidarily liable with the corporation. The general rule is
grounded on the theory that a corporation has a legal personality
separate and distinct from the persons comprising it. As exceptions to the
general rule, solidary liability may be imposed: (1) When directors and
trustees or, in appropriate cases, the ofcers of a corporation (a) vote for
or assent to [patently] unlawful acts of the corporation; (b) act in bad
faith or with gross negligence in directing the corporate affairs; (c) are
guilty of conict of interest to the prejudice of the corporation, its
stockholders or members, and other persons; (2) When the director or
ofcer has consented to the issuance of watered stock or who, having
knowledge thereof, did not forthwith le with the corporate secretary his
written objection thereto; (3) When a director, trustee or ofcer has
contractually agreed or stipulated to hold himself personally and
solidarily liable with the corporation; (4) When a director, trustee or
ofcer is made, by specic provision of law, personally liable for his
corporate action. To warrant the piercing of the veil of corporate ction,
the ofcers bad faith or wrongdoing must be established clearly and
convincingly as bad faith is never presumed.

Labor organization;
collateral attack on
legal personality.
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in
the Philippines for Empowerment and Reforms [SMCC-SUPER],
Zacarrias Jerry Victorio Union President v. Charter Chemical and
Coating Corporation, G.R. No. 169717, March 16, 2011

Respondent company questioned the legal personality of the petitioner
union in a certication election proceeding. The Court ruled that the legal
personality of the petitioner union cannot be collaterally attacked by
respondent company. Except when it is requested to bargain collectively,
an employer is a mere bystander to any petition for certication election;
such proceeding is non-adversarial and merely investigative, considering
that its purpose is to determine if the employees would like to be
represented by a union and to select the organization that will represent
them in their collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by ling a motion to dismiss or an appeal from it;
not even the allegation that some employees participating in a petition for
certication election are actually managerial employees will give an
employer legal personality to block the certication election. The
employers only right in the proceeding is to be notied or informed
thereof.

Labor organization;
membership of
supervisory
employees.

Petitioner union led a Petition for Certication Election among the
regular rank-and-le employees of the respondent company. Respondent
contends that petitioner union is not a legitimate labor organization
because its composition is a mixture of supervisory and rank-and-le
employees. The Court ruled that the inclusion of the supervisory
employees in petitioner union does not divest it of its status as a
legitimate labor organization. After a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate
labor organization. Any mingling between supervisory and rank-and-le
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.

Labor organization;
registration.

Petitioner union led a Petition for Certication Election among the
regular rank-and-le employees of the respondent company. Respondent
company led an Answer with Motion to Dismiss on the ground that
petitioner union is not a legitimate labor organization because of its
failure to comply with the documentary requirements set by law, i.e. non-
verication of the charter certicate. The Court ruled that it was not
necessary for the charter certicate to be certied and attested by the
local/chapter ofcers. Considering that the charter certicate is prepared
and issued by the national union and not the local/chapter, it does not
make sense to have the local/chapters ofcers certify or attest to a
document which they did not prepare. In accordance with this ruling,
petitioner unions charter certicate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor
organization upon submission of (1) its charter certicate, (2) the names
of its ofcers, their addresses, and its principal ofce, and (3) its
constitution and by-laws the last two requirements having been
executed under oath by the proper union ofcials.

Reinstatement;
accrued backwages
Pzer, Inc., et al. v. Geraldine Velasco, G.R. No. 177467, March 9, 2011

The Labor Arbiter and the NLRC held that petitioner employer illegally
dismissed the respondent employee. On appeal, the Court of Appeals
reversed the decision and ruled that the dismissal was valid. However, the
Court of Appeals ordered petitioner employer to pay respondent
employee her salary from the date of the Labor Arbiters decision
ordering her reinstatement until the Court of Appeals rendered its
decision declaring the dismissal valid. Petitioner employer questioned the
order and refused to pay. The Court held that even if the order of
reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the
higher court. On the other hand, if the employee has been reinstated
during the appeal period and such reinstatement order is reversed with
nality, the employee is not required to reimburse whatever salary he
received, more so, if he actually rendered services during the period. The
payment of such wages cannot be deemed as unjust enrichment on
respondents part.

Reinstatement;
immediately
executory order.

The Labor Arbiter held that petitioner employer illegally dismissed the
respondent employee. Pending its appeal, petitioner employer failed to
immediately admit respondent employee back to work despite of an
order of reinstatement. The Court held that that the provision of Article
223 is clear that an award by the Labor Arbiter for reinstatement shall be
immediately executory even pending appeal and the posting of a bond by
the employer shall not stay the execution for reinstatement. The
legislative intent is to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a
reinstatement award would certainly betray the executory nature of a
reinstatement order or award. In the case at bar, petitioner employer did
not immediately admit respondent employee back to work which,
according to the law, should have been done as soon as an order or award
of reinstatement is handed down by the Labor Arbiter without need for
the issuance of a writ of execution.

Reinstatement; terms
and conditions.

Due to the order of reinstatement issued by the Labor Arbiter, petitioner
employer sent a letter to the respondent employee to report back to work
and assigned her to a new location. The Court held that such is not a bona
de reinstatement. Under Article 223 of the Labor Code, an employee
entitled to reinstatement shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or separation
or, at the option of the employer, merely reinstated in the payroll. It is
established in jurisprudence that reinstatement means restoration to a
state or condition from which one had been removed or separated. 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 unlled
position which is substantially equivalent or of similar nature as the one
previously occupied by the employee. Applying the foregoing principle, it
cannot be said that petitioner employer has a clear intent to reinstate
respondent employee to her former position under the same terms and
conditions nor to a substantially equivalent position. To begin with, the
return-to-work order petitioner sent to respondent employee is silent
with regard to the position it wanted the respondent employee to assume.
Moreover, a transfer of work assignment without any justication
therefor, even if respondent employee would be presumably doing the
same job with the same pay, cannot be deemed as faithful compliance
with the reinstatement order.

Termination by
employer; willful
disobedience.
Lores Realty Enterprises, Inc., Lorenzo Y. Sumulong III v. Virginia E.
Pacia, G.R. No. 171189, March 9, 2011

Petitioner employer ordered the respondent employee to prepare checks
for payment of petitioners obligations. Respondent did not immediately
comply with the instruction since petitioner employer has no sufcient
funds to cover the checks. Petitioner employer dismissed respondent
employee for willful disobedience. The Court held that respondent
employee was illegally dismissed. The offense of willful disobedience
requires the concurrence of two (2) requisites: (1) the employees
assailed conduct must have been willful, that is characterized by a
wrongful and perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the employee and must pertain
to the duties which he had been engaged to discharge. Though there is
nothing unlawful in the directive of petitioner employer to prepare
checks in payment of petitioners obligations, respondent employees
initial reluctance to prepare the checks, although seemingly disrespectful
and deant, was for honest and well intentioned reasons. Protecting the
petitioner employer from liability under the Bouncing Checks Law was
foremost in her mind. It was not wrongful or willful. Neither can it be
considered an obstinate deance of company authority. The Court takes
into consideration that respondent employee, despite her initial
reluctance, eventually did prepare the checks on the same day she was
tasked to do it.

Wages; facilities and
supplements.
SLL International Cables Specialist and Sonny L. Lagon v. NLRC, Roldan
Lopez, et al., G.R. No. 172161, March 2, 2011

Respondent employees alleged underpayment of their wages. Petitioner
employer claimed that the cost of food and lodging provided by petitioner
to the respondent employees should be included in the computation of
the wages received by respondents. The Court makes a distinction
between facilities and supplements. Supplements constitute extra
remuneration or special privileges or benets given to or received by the
laborers over and above their ordinary earnings or wages. Facilities, on
the other hand, are items of expense necessary for the laborers and his
familys existence and subsistence so that by express provision of law,
they form part of the wage and when furnished by the employer are
deductible therefrom, since if they are not so furnished, the laborer would
spend and pay for them just the same. In short, the benet or privilege
given to the employee which constitutes an extra remuneration above
and over his basic or ordinary earning or wage is supplement; and when
said benet or privilege is part of the laborers basic wages, it is a facility.
The distinction lies not so much in the kind of benet or item (food,
lodging, bonus or sick leave) given, but in the purpose for which it is
given. In the case at bench, the items provided were given freely by
petitioner employer for the purpose of maintaining the efciency and
health of its workers while they were working at their respective projects.
Thus, the Court is of the view that the food and lodging, or the electricity
and water allegedly consumed by respondents in this case were not
facilities but supplements which should not be included in the
computation of wages received by respondent employees.

Wages; proof of
payment.

In an illegal dismissal case against the petitioner employer, respondent
employees alleged that they were underpaid. In their defense, petitioner
employer alleged that respondent employees actually received wages
higher than the prescribed minimum. The Court held that as a general
rule, a party who alleged payment of wages as a defense has the burden of
proving it. Specically with respect to labor cases, the burden of proving
payment of monetary claims rests on the employer, the rationale being
that the pertinent personnel les, payrolls, records, remittances and other
similar documents which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid are not in
the possession of the worker but in the custody and absolute control of
the employer. In this case, petitioner employer, aside from bare
allegations that respondent employees received wages higher than the
prescribed minimum, failed to present any evidence, such as payroll or
payslips, to support their defense of payment. Thus, petitioner employer
utterly failed to discharge the onus probandi.

Wages; value of
facilities.

Petitioner employer alleged that the cost of facilities must be included in
the computation of wages paid. The Court held that before the value of
facilities can be deducted from the employees wages, the following
requisites must all be attendant: rst, proof must be shown that such
facilities are customarily furnished by the trade; second, the provision of
deductible facilities must be voluntarily accepted in writing by the
employee; and nally, facilities must be charged at reasonable value. Mere
availment is not sufcient to allow deductions from employees wages.
These requirements, however, have not been met in this case. Petitioner
employer failed to present any company policy or guideline showing that
provisions for meals and lodging were part of the employees salaries. It
also failed to provide proof of the employees written authorization, much
less show how they arrived at their valuations. At any rate, it is not even
clear whether respondent employees actually enjoyed said facilities.

APRIL
Dismissal; breach of
trust and condence.
James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564.
April 6, 2011

Petitioner was employed as Assistant Vice-President of the Jewelry
Department in respondent bank. His employment was terminated on the
ground of willful breach of trust and condence. Jurisprudence provides
for two requisites for dismissal on the ground of loss of trust and
condence; (1) the employee concerned must be holding a position of
trust and condence, and (2) there must be an act that would justify the
loss of trust and condence. Loss of trust and condence, to be a valid
cause for dismissal, must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be
clearly and convincingly established but proof beyond reasonable doubt
is not necessary. Furthermore, the burden of establishing facts as bases
for an employers loss of condence is on the employer. The court held
that the termination of petitioner was without just cause and therefore
illegal. Although the rst requisite was present, the respondent failed to
satisfy the second requisite. Respondent bank was not able to show any
concrete proof that petitioner had participated in the approval of the
questioned accounts. The invocation by respondent of the loss of trust
and condence as ground for petitioners termination has therefore no
basis at all.

Breach of Trust and
Condence; duties of
employee.
James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564.
April 6, 2011

Petitioner was employed as Assistant Vice-President of the Jewelry
Department in respondent bank. His employment was terminated on the
ground of willful breach of trust and condence for endorsing VISA card
applicants who later turned out to be impostors resulting in nancial
losses to respondent bank. The court held that petitioner was illegally
dismissed. As provided in Article 282 of the Labor Code, an employer may
terminate an employees employment for fraud or willful breach of trust
reposed in him. 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 unt to continue working for the employer.
The act of betrayal of trust, if any, must have been committed by the
employee in connection with the performance of his function or position.
The court found that the element of work-connection was not present in
this case since petitioner was assigned under the Jewelry department, and
therefore had nothing to do with the approval of VISA Cards, which was
under a different department altogether.

Certiorari under Rule
45; questions of law
and exceptions.

Philippine Supreme Court Decisions On Labor Law

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