Labor CD 06 Ed.

ADAMSON COLLEGE OF LAW ADAMSON COLLEGE OF LAW
CASE DIGESTS IN LABOR LAW CASE DIGESTS IN LABOR LAW

2006 BAR OPERATIONS 2006 BAR OPERATIONS
Employer-Employee Relationship-
Control Test:
G.R. No. 138051. June 10, 2004.
JOSE SONZA vs. ABS-CBN
BROADCASTING CORPORATION,
Facts: In May 1994, respondent ABS-CBN
Broadcasting Corporation (ABS-CBN)
signed an Agreement with the Mel and Jay
Management and Development Corporation
(MJMDC). ABS-CBN was represented by its
corporate ofcers while MJMDC was
represented by Sonza, as President and
General Manager, and Tiangco, as EVP and
Treasurer. Referred to in the Agreement as
AGENT, MJMDC agreed to provide Sonzas
services exclusively to ABS-CBN as talent
for radio and television.
In April 1996, Sonza irrevocably
resigned in view of recent events concerning
his programs and career. He thereafter fled
a complain against ABS-CBN before the
Department of Labor and Employment.
Sonza complained that ABS-CBN did not
pay his salaries, separation pay, service
incentive leave pay, 13
th
month pay, signing
bonus, travel allowance and amounts due
under the Employees Stock Option Plan.
ABS-CBN fled a Motion to Dismiss
on the ground that no employer-employee
relationship existed between the parties.
The Labor Arbiter denied it and directed the
parties to fle their respective position
papers. He then considered the case
submitted for resolution and rendered
decision dismissing the complaint for lack
of jurisdiction.
Sonza appealed to the NLRC which
afrmed the Labor Arbiters decision. Sonza
fled a motion for reconsideration, which
the NLRC denied.
He then fled a special civil action
for certiorari before the Court of Appeals
assailing the decision and resolution of the
NLRC. The Court of Appeals rendered a
decision dismissing the case. Hence, the
petition
Issue: Whether or not employer-employee
relationship existed between Sonza and
ABS-CBN.
Ruling: Existence of an employer-employee
relationship is a question of fact. Appellate
courts accord the factual fndings of the
Labor Arbiter and the NLRC not only
respect but also fnality when supported by
substantial evidence. Court does not
substitute its own judgment for that of the
tribunal in determining where the weight of
evidence lies or what evidence is credible.
Case law has consistently held that
the elements of an employer-employee
relationship are: (a) the selection and
engagement of the employee; (b) the
payment of wages; (c) the power of
dismissal; and (d) the employers power to
control the employee on the means and
methods by which the work is
accomplished. The last element, the so-
called control test, is the most important
element.
The specifc selection and hiring of
Sonza, because of his unique skills, talent
and celebrity status not possessed by
ordinary employees, is a circumstance
indicative but not conclusive of independent
contractual relationship. The method of
selecting and engaging Sonza does not
conclusively determine his status.
All the talent fees and benefts paid
to Sonza were the result of negotiations
that led to the Agreement. If Sonza were
ABS-CBNs employee, there would be no
need for the parties to stipulate on benefts
such as SSS, Medicare, x x x and 13
th
month pay which the law automatically
incorporates into every employer-employee
contract. Whatever benefts Sonza enjoyed
arose from contract and not because of an
employer-employee relationship.
The power to bargain talent fees way
above the salary scales of ordinary
employees is a circumstance indicative, but
not conclusive, of an independent
contractual relationship.
Applying the control test to the
present case, the court found 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. This test is based
2006 BAR OPERATIONS
Faculty Chair: Atty Hilario Magsino
Over-all Chair: Nerissa Guirao
Academic Committee ead: Celso J. Hernandez Jr. Su!"ect ead: Madonna Dimaano
Academic Committee #em!er$: Lisa Tubilleja, Nerissa Guirao Ci!il" C#risto$#er %onoan &oli"
Ant#ony Mali'dem Ta(" Celso J. Hernandez Jr. Crim, Commer'ial" )ey )abago, Donnalee
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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.
ABS-CBN did not exercise control
over the means and methods of
performance of Sonzas work. A radio
broadcast specialist who works under
minimal supervision is an independent
contractor. Being an exclusive talent does
not by itself mean that Sonza is an
employee of ABS-CBN. Even an
independent contractor can validly provide
his services exclusively to the hiring party.
In the broadcast industry, exclusivity is not
necessarily the same as control.
A mere executive issuance cannot
exclude independent contractors from the
class of service providers to the broadcast
industry. The classifcation of workers in
the broadcast industry into only two groups
under Policy Instruction No. 40 is not
binding on the courts, especially when the
classifcation has no basis either in law or
in fact.
The right of labor to security of
tenure as guaranteed in the Constitution
arises only if there is an employer-employee
relationship under labor laws. Not every
performance of services for a fee creates an
employer-employee relationship.
The Labor Arbiter can decide a case
based solely on the position papers and the
supporting documents without a formal
trial. The holding of a formal hearing or
trial is something that the parties cannot
demand as a matter of right. Subject to the
requirements of due process, the
technicalities of law and the rules obtaining
in the courts do not strictly apply in
proceedings before a Labor Arbiter.
Petition is DENIED.
EMPERMACO B. ABANTE, JR. vs.
LAMADRID BEARING & PARTS CORP.
and JOSE LAMADRID, President
G.R. No. 159890. May 28, 2004
Facts: Petitioner was employed by
respondent company Lamadrid Bearing and
Parts Corporation sometime in June 1985
as a salesman earning a commission of 3%
of the total paid-up sales covering the whole
area of Mindanao. His average monthly
income was more or less P16,000.00, but
later was increased to approximately
P20,269.50. Aside from selling the
merchandise of respondent corporation, he
was also tasked to collect payments from
his various customers.
Sometime in 1998, petitioner
encountered fve customers/clients with
bad accounts. Petitioner was confronted by
respondent Lamadrid over the bad
accounts and warned that if he does not
issue his own checks to cover the said bad
accounts, his commissions will not be
released and he will lose his job. He issued
his personal checks in favor of respondent
corporation on condition that the same
shall not be deposited for clearing and that
they shall be ofset against his periodic
commissions.
Contrary to their agreement,
respondent deposited the remaining checks
which were dishonored by the drawee bank
due to Account Closed.
On March 22, 2001, counsel for
respondent corporation sent a letter to
petitioner demanding that he make good
the dishonored checks or pay their cash
equivalent.
While doing his usual rounds as
commission salesman, petitioner was
handed by his customers a letter from the
respondent company warning them not to
deal with petitioner since it no longer
recognized him as a commission salesman.
Petitioner thus fled a complaint for
illegal dismissal with money claims against
respondent company and its president,
Jose Lamadrid, before the NLRC Regional
Arbitration Branch No. XI, Davao City.
By way of defense, respondents
countered that petitioner was not its
employee but a freelance salesman on
commission basis, procuring and
purchasing auto parts and supplies from
the latter on credit, consignment and
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installment basis and selling the same to
his customers for proft and commission of
3% out of his total paid-up sales.
Finding no necessity for further
hearing the case after the parties submitted
their respective position papers, the Labor
Arbiter rendered a decision declaring
respondents Lamadrid Bearing & Parts
Corp. and Jose Lamadrid to pay jointly and
severally complainant EMPERMACO B.
ABANTE, JR. P1,336,729.62 representing
his awarded separation pay, back wages
(partial) unpaid commissions, refund of
deductions, damages and attorneys fees.
National Labor Relations
Commission reversed the decision of the
Labor Arbiter and dismissed the instant
case for lack of cause of action.
Court of Appeals denied the petition
of petitioner Abante.
Issue: Whether or not the petitioner is an
employee of respondent corporation.
Ruling: To ascertain the existence of an
employer-employee relationship,
jurisprudence has invariably applied the
four-fold test, namely: (1) the manner of
selection and engagement; (2) the payment
of wages; (3) the presence or absence of the
power of dismissal; and (4) the presence or
absence of the power of control. Of these
four, the last one is the most important.
The so-called control test is
commonly regarded as the most crucial and
determinative indicator of the presence or
absence of an employer-employee
relationship. Under the control test, an
employer-employee relationship exists
where the person for whom the services are
performed reserves the right to control not
only the end achieved, but also the manner
and means to be used in reaching that end.
Applying the aforementioned test, an
employer-employee relationship is notably
absent in this case. It is undisputed that
petitioner Abante was a commission
salesman who received 3% commission of
his gross sales. Yet no quota was imposed
on him by the respondent; such that a
dismal performance or even a dead result
will not result in any sanction or provide a
ground for dismissal. He was not required
to report to the ofce at any time or submit
any periodic written report on his sales
performance and activities. Although he
had the whole of Mindanao as his base of
operation, he was not designated by
respondent to conduct his sales activities at
any particular or specifc place. He
pursued his selling activities without
interference or supervision from respondent
company and relied on his own resources to
perform his functions. Respondent
company did not prescribe the manner of
selling the merchandise; he was left alone
to adopt any style or strategy to entice his
customers.
While it is true that he occasionally
reported to the Manila ofce to attend
conferences on marketing strategies, it was
intended not to control the manner and
means to be used in reaching the desired
end, but to serve as a guide and to upgrade
his skills for a more efcient marketing
performance. As correctly observed by the
appellate court, reports on sales, collection,
competitors, market strategies, price
listings and new ofers relayed by petitioner
during his conferences to Manila do not
indicate that he was under the control of
respondent.
Moreover, petitioner was free to ofer
his services to other companies engaged in
similar or related marketing activities as
evidenced by the certifcations issued by
various customers.
The decision of Court of Appeals
was afrmed.
Regular Employee:
MITSUBISHI MOTORS vs. CHRYSLER
PHILIPPINES
G.R. No. 148738
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Facts: Nelson Paras was hired by MMPC
(Mitsubishi Motors Philippines
Corporation) on probationary basis.
He started reporting to work on May
27, 1996. He was later evaluated by
his immediate supervisors and
received an average rating. He was
informed that based on his
performance, he would be
regularized.
However, the Division and Department
managers together with his immediate
supervisors reviewed the performance and
unanimously agreed that the performance
was unsatisfactory. As a consequence,
Paras was not regularized. On November
26, 1996, he received a notice of
termination dated November 25, 1996
informing him that his services were
terminated efective said date since he
failed to meet the required company
standards for regularization.i
The labor union demanded the
settlement of the dispute. It posited that
Paras was dismissed on his one hundred
eighty third (183
rd
) day of employment, or
three days after the expiration of the
probationary period of 6 months. It was
contended that Paras was already a regular
employee on the date of the termination of
his probationary employment.
Issue: Whether or not Paras was a regular
employee when served the notice of
termination
Ruling: Applying Article 13 of the Civil
Code, the probationary period of six
(6) months consists of one hundred
eighty (180) days. This is in
conformity with paragraph one,
Article 13 of the Civil Code which
provides that the months which are
not designated by their names shall
be understood as consisting of thirty
(30) days each. The number of
months in the probationary period,
six months should then be multiplied
by the number of days within a
month, thirty days; hence, the period
of one hundred eighty days. As clearly
provided for in the last paragraph of
article 13, in computing the period,
the frst day shall be excluded and the
last day included. Thus, the 180 days
commenced o may 27, 1996 and
ended on November 23, 2996. The
termination letter dated November 25,
1996 was served on November 26,
1996. He was, by then, a regular
employee of the petitioner.
MANILA WATER CO. V. PENA
434 SCRA 53
Facts: Manila Water Co. undertook to
absorb former employees of the MWSS
whose names and positions were in the
list furnished by MWSS, while the
employment of those not in the list was
terminated on the day MWC took over
the operations of the East zone.
Respondents, being contractual
collectors of the MWSS, were among the
121 employees not included in the list,
nevertheless, petitioners engaged their
services without written contract.
The 121 collectors incorporated the
AGCI, which was contracted by petitioner to
collect charges for the Balara branch.
Later on, petitioner terminated its
contract with AGCI.
Respondents fled a complaint for
illegal dismissal, contending that they were
petitioners employees as all the methods
and procedures of their collection were
controlled by the latter.
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The labor arbiter rendered a
decision fnding the dismissal of
respondents illegal.
Issue: Whether or not there exists an
employer-employee relationship
between petitioner and respondents.
Held: AGCI was not an independent
contractor. AGCI does not have
substantial capitalization or
investment in the form of tools,
equipment, machineries, work
premises, and other materials to
qualify as an independent contractor.
The work of the respondents was
directly related to the principal business or
operation of the petitioner.
AGCI did not carry on an
independent business or undertake the
performance of its service contract
according to its own manner and method,
free from the control and supervision of its
principal, the petitioner.
Therefore, there exists an employer-
employee relationship.
Employment Contract, Period :
Pangilinan vs. General Milling
Corporation
GR No. 149329-July 12, 2004
Facts: Petitioners were employed by
respondent as casual employee to work on
one of its poultry plant in Rizal. They have
signed under separate temporary / casual
contracts of employment, for a period of 5
months.
Upon the expiration of their
contracts, petitioners were terminated;
hence they fled an illegal dismissal case
against GMC alleging that they were already
regular employee at the time of their
separation. Moreover, their work is usual &
necessary to the mainline of business; as
such they can be considered regular and
cannot be terminated without just cause or
notice thereof. Employer ruled in favor of
GMC. Thus this petition
Issue: Whether or not petitioners can be
considered a regular employee at the time of
there separation.
Held: The petition is bereft of merit. Article
280 of the Labor Code, does not proscribe
or prohibit an employment contract with
fxed period. They are binding & valid,
provided it was entered voluntarily &
knowingly without coercion. A contract of
employment for a defnite period terminates
by its own term at the end of such period.
Independent Contractor:
MANILA WATER CO. V. PENA
434 SCRA 53
Facts: Manila Water Co. undertook to
absorb former employees of the MWSS
whose names and positions were in the
list furnished by MWSS, while the
employment of those not in the list was
terminated on the day MWC took over
the operations of the East zone.
Respondents, being contractual
collectors of the MWSS, were among the
121 employees not included in the list,
nevertheless, petitioners engaged their
services without written contract.
The 121 collectors incorporated the
AGCI, which was contracted by petitioner to
collect charges for the Balara branch.
Later on, petitioner terminated its
contract with AGCI.
Respondents fled a complaint for
illegal dismissal, contending that they were
petitioners employees as all the methods
and procedures of their collection were
controlled by the latter.
decision fnding the dismissal of
respondents illegal.
Issue: Whether or not there exists an
employer-employee relationship
between petitioner and respondents.
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Held: AGCI was not an independent
contractor. AGCI does not have
substantial capitalization or
investment in the form of tools,
equipment, machineries, work
premises, and other materials to
qualify as an independent contractor.
The work of the respondents was
directly related to the principal business or
operation of the petitioner.
AGCI did not carry on an
independent business or undertake the
performance of its service contract
according to its own manner and
method, free from the control and
supervision of its principal, the
petitioner.
Therefore, there exists an employer-
employee relationship.
Dismissal:
BOLINAO SECURITY AND
INVESTIGATION SERVICE, INC. vs.
ARSENIO M. TOSTON
G.R. No. 139135. January 29, 2004
Facts: Respondent Arsenio M. Toston, was
employed as a security guard by Bolinao
Security and Investigation Service, Inc.,
with a monthly salary of P5,000.00.On
August 17, 1995 due to a gunshot wound
he sustained from his co-security guard. He
fled an application for one-month leave of
absence. He also claimed and/ or medical
benefts. While petitioner approved his one-
month LOA his claim for the benefts were
rejected. He found out however that the
petitioner failed to remit it monthly
contributions for nine (9) consecutive
months. He then reported this to SSS.
On September 15, 1995, Lucy Caasi,
in-charge of remitting petitioners
contributions to the SSS, scolded and
rebuked respondent and told him not to
report for work and that his name would be
dropped from the rolls.
On September 29, 1995, respondent
fled with the Labor Arbiter a complaint
against petitioner and its president, for
illegal dismissal and non-payment of wages
and other benefts, with prayer for
reinstatement and payment of full back
wages. The Labor Arbiter rendered decision
in favor of the respondent.
Upon appeal, NLRC promulgated a
decision afrming with modifcation the
Arbiters assailed Decision in the sense that
the award of moral and exemplary damages
was deleted. The Court of Appeals also
afrmed the decision of the NLRC.
Hence this appeal.
Issue: Whether or not respondent Toston
was illegally dismissed?
Held: In the case at bar, there is no
showing of a clear, valid and legal cause
which justifes respondents removal from
employment. Neither did petitioner serve
two written notices to respondent prior to
his termination from employment as
required by the Labor Code. Clearly, this is
a case of illegal dismissal.
It is a settled doctrine that the
employer has the burden of proving the
lawfulness of his employees dismissal. The
validity of the charge must be clearly
established in a manner consistent with
due process. The Implementing Rules of
the Labor Code provide that no worker shall
be dismissed except for a just or authorized
cause provided by law and after due
process. This provision has two aspects: (1)
the legality of the act of dismissal, that is,
dismissal based on the grounds provided by
Article 282 of the Labor Code, and (2) the
legality in the manner of dismissal. The
illegality of the act of dismissal constitutes
discharge without just cause, while
illegality in the manner of dismissal is
dismissal without due process. Clearly,
petitioner failed to discharge its burden.
Respondent who was illegally
dismissed from work is actually entitled to
reinstatement without loss of seniority
rights and other privileges as well as to his
full backwages, inclusive of allowances, and
to other benefts or their monetary
equivalent computed from the time his
compensation was withheld from him up to
the time of his actual reinstatement.
However, the circumstances obtaining
in this case do not warrant the
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reinstatement of respondent. Apparently,
antagonism caused a severe strain in the
relationship between him and petitioner
company. A more equitable disposition
would be an award of separation pay
equivalent to at least one month pay, or one
month pay for every year of service,
whichever is higher (with a fraction of at
least six (6) months being considered as
one (1) whole year), in addition to his full
backwages, allowances and other benefts
Records show that respondent was
employed from March 1993 to September
15, 1995, or for two (2) years and six (6)
months, with a monthly salary of
P5,000.00. Hence, he is entitled to a
separation pay of P15,000.00.
The assailed decision and resolution of
the Court of Appeals are hereby AFFIRMED
WITH MODIFICATION in the sense that, in
lieu of reinstatement, respondent is
awarded separation pay equivalent to P15,
000.00; and his full backwages, other
privileges and benefts, or their monetary
equivalent during the period of his
dismissal up to his supposed actual
reinstatement.Costs against petitioner.
GALLERA DE GUISON HERMANOS INC. v.
CRUZ
June 10, 2004
Facts: Private respondent Cruz was a
cashier and stockholder of Petitioner
Gallera de Guison Hermanos, Inc. since
1976. On February 15, 1998, private
respondent wrote Gallera requesting that
she be assigned as Liaison Ofcer, which is
a more challenging job than as a cashier.
Atty. Sumawang, Galleras counsel, replied
to her than the Board is not in a legal
position to consider the request because an
employee cannot be appointed to another
position which would result in the
reduction of his existing salary and that the
duties and responsibilities of a Liaison
Ofcer are already being performed by
some of the management staf.
Subsequently, due to the alleged ill
treatment and harassment perpetrated by
Galeras management against the private
respondent, the latter procured a medical
certifcate and went on sick leave. While on
leave, petitioners appointed one relative of
the Cruz, as cashier. Meanwhile, Atty.
Sumawang; wrote private respondent
advising her that upon her return to work
she shall cease and desist from occupying
and performing the duties of cashier and
instead she shall report for work on a no
work no pay basis in the meantime that the
management is studying to which position
she will be transferred. Eventually, she was
designated as liaison ofcer. However, one
day, due to her absence on the said date,
the salary of Cruz was withheld. Her
designation as liaison ofcer in the payroll
on even date was likewise removed.
Thereafter, the private respondent did not
report for work. Despite ofers from Gallera
for her to return, on a no work, no pay
basis, except the allowances and other
cash entitlements to the position, Cruz fle
with DOLE a complaint for illegal dismissal.
The labor arbiter issued a decision
declaring private respondent to have been
illegally dismissed by petitioners. The
petitioners then fled a petition for certiorari
with the CA which dismissed the petition
ruling that contrary to the petitioners
contention that respondent resigned from
her position as cashier, the latter was
actually removed from her position by the
petitioners. Subsequently, the petitioners
appointed Cruz as liaison ofcer, a move
which entailed a demotion in her position
and diminution of salaries, privileges and
other benefts. Hence, the Court of Appeals
concluded that Cruz was constructively
dismissed and declared her entitled to
backwages, separation pay and attorneys
fees. The ofcers who consented to her
transfer were held solidarily liable with
Gallera.
Issue: Whether or not Cruz was
illegally dismissed
Held: The instant petition raises a
fundamental factual issue which has
already been exhaustively discussed and
passed upon by the Labor Arbiter and the
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Court of Appeals, i.e, whether Cruz was
dismissed for cause. The appellate court,
dismissing the petitioners petition for
certiorari assailing the NLRCs dismissal of
their appeal and upholding the decision of
the Labor Arbiter, ruled that Cruz was
illegally dismissed and the dismissal was
attended by bad faith on the part of the
petitioners; hence, the petitioners are
solidarily liable for Cruz monetary claims
consisting of separation pay, backwages
and attorneys fees.
It is notable to mention time and again the
much-repeated but not so well-heeded rule
that fndings of fact of the CA, particularly
where it is in absolute agreement with that
of the NLRC and the Labor Arbiter, as in
this case, are accorded not only respect but
even fnality and are deemed binding upon
this Court so long as they are supported by
substantial evidence.
ASUFRIN, JR. vs. SAN MIGUEL
CORPORATION
G.R. No. 156658 March 10, 2004
Facts: Coca-Cola Plant, then a department
of respondent SMC, hired the petitioner as
a utility/miscellaneous worker. He
subsequently became a regular employee
paid on a daily basis as a Forklift Operator.
He afterwards became a monthly paid
employee when he was promoted as a Stock
Clerk. When the sales ofce and operations
at the branch where the petitioner worked
were reorganized, several positions
including his was abolished. The company
upon reviewing his qualifcations then
designated the petitioner as a designated
checker at the sales ofce.
However, the real problem arose
when respondent SMC implemented a new
marketing system known as the pre-selling
scheme at the beer sales ofce. As a
consequence thereof, all position of route
sales and warehouse personnel were
declared redundant. The respondent
notifed the DOLE and the personnel
afected which includes the petitioner.
Thereafter, the employees whose positions
were declared redundant were informed
that they could avail of the respondent
corporations early retirement package
pursuant to the retrenchment program,
while those who will not avail of the same
will be redeployed or absorbed at other
ofces. Petitioner opted to remain and
manifested with the Acting Director his
intention to accept any job considering that
he has 3 children in college.
Petitioner was surprised however
later to fnd out that his name was included
in the list of those who accepted the early
retirement package. His request to be
assigned to any department and position
was ignored by the Acting Manager. This
prompted the petitioner to fle a complaint
for illegal dismissal against the SMC. The
Labor Arbiter dismissed the complaint and
upon appeal to the NLRC, the latter set
aside the decision of the Labor Arbiter. SMC
in turn appealed to the CA which reversed
the decision of the NLRC and reinstated the
decision of the Labor Arbiter and thus this
present case.
Issue: Whether or not the petitioners
dismissal is based on a just and authorized
cause
Held: The determination that the
employees 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
nor the NLRC, provided that 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 been
overmanned. It must produce adequate
proof that such is the actual situation to
justify the dismissal of the afected
employees for redundancy.
Persuasive as the explanation given
by respondent to justify the dismissal, a
number of disturbing circumstances
however left the court unconvinced like the
ignorance of the corporation of the request
of the petitioner to be deployed in any
position, his being in another branchs
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payroll, despite the shut down of the
warehousing operations, the ofce was still
used as a warehouse, and in selecting the
employees to be dismissed it appears that
no criterion was adopted by respondent.
It bears stressing that whether it be
redundancy or retrenchment or any of the
other authorized causes, no employee may
be dismissed without the observance of the
fundamentals of good faith. It is not
difcult for employers to abolish positions
in the guise of a cost-cutting measure and
we should not be easily swayed by such
schemes which are all too often to near
nothing what is left of rubble of rights of
our exploited workers. Given the nature of
the petitioners job as a Warehouse
Checker, it is inconceivable that the
respondent could not accommodate his
services considering that the Warehousing
operations have not shut down.
Thus, the dismissal of the petitioner
should be declared as illegal.
J.A.T. GENERAL SERVICES V. NLRC
421 SCRA 78
Facts: JAT is a single proprietorship
engaged in the business of selling
second hand heavy equipment. It hired
Jose Mascarinas as helper and tasked
to coordinate with the cleaning and
delivery of the heavy equipment sold to
customers.
The sales of heavy equipment
declined because of the Asian currency
crisis. JAT temporarily suspended its
operations. It advised its employees not to
report for work.
Mascarinas fled a case for illegal
dismissal before the NLRC.
JAT fled an Establishment
Termination with the DOLE, notifying the
latter of its decision to close its business
operations due to business losses and
fnancial reverses.
decision fnding the dismissal unjustifed
and ordering JAT to pay the respondent
separation pay and backwages.
The labor arbiter ruled that Mascarinas
dismissal was unjustifed because of
petitioners failure to serve upon the
respondent and the DOLE the required
written notice of termination at least one
month prior to the efectivity thereof and
to submit proof showing that petitioners
sufered a business slowdown in
operations and sales.
On appeal, the NLRC afrmed the
said decision.
Issue: Whether or not respondent was
illegally dismissed from employment
due to the closure of the petitioners
business.
Held: The Court afrmed the decision of
the CA, which upheld the decision of
the NLRC fnding that there was illegal
dismissal for failure to comply with the
requirement provided for by law.
While business reverses or losses
are recognized by law as an authorized
cause for terminating employment it is an
essential requirement that alleged losses in
business operations must be proven
convincingly.
Three requirements are necessary
for a valid cessation of business
operations, namely: a) service of a
written notice to the employees and to
the DOLE at least one month before the
intended date thereof; b) the cessation of
business must be bona fde in character;
and c) payment to the employees of the
termination pay amounting to at least
one-half month pay for every year of
service, or one month pay, whichever is
higher.
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Closure of business, as an
authorized cause for termination of
employment, aims to prevent further
fnancial drain upon an employer who
cannot pay anymore his employees since
business has already stopped.
RAMOS vs. COURT OF APPEALS
G.R. No. 145405
Facts: Petitioner was frst employed by
Union Bank as post audit clerk. He later
became a branch cashier and subsequently
as acting branch manager. During his
management, one Rudy Paras was assigned
as branch cashier. Thereafter, the Central
Accounting Division of the Bank reported
certain unreconciled statements amounting
to millions.
By the time of its discovery, Paras had
long resigned and could no longer be found.
Consequently, petitioner was dismissed
due to negligence/serious dereliction of
duty resulting in loss of trust and
confdence by management.
Petitioner fled an action for illegal
dismissal. The labor arbiter ruled in his
favor. However, it was reversed by NLRC and
afrmed by CA, hence the petition.
Issue: Whether or not the dismissal is
proper.
Ruling: To validly dismiss an employee
on the ground of loss of trust and
confdence, the following guidelines
must be followed:
1.the loss of confdence must
not be simulated;
2.it should not be used to
subterfuge for causes which
are illegal, improper or
unjustifed;
3.it may not be arbitrarily
asserted in the face of
overwhelming evidence to the
contrary;
4.it must be genuine, not a mere
afterthought, to justify earlier
action taken in bad faith;
5.the employee involved holds a
position of trust and
confdence
In the case at bar, petitioner held a
position of trust and confdence as the
regular branch cashier and acting branch
manager. He was utterly negligent in
performing his duties as acting branch
manager. The scam perpetrated could have
been easily detected had petitioner
conscientiously done his job in carefully
overseeing the operations. Union Bank
therefore had reason to lose trust and
confdence and to impose penalty of
dismissal on him.
ADELINO FELIX vs. NATIONAL LABOR
RELATIONS COMMISSION and REPUBLIC
ASAHI GLASS CORPORATION
G.R. No. 148256. November 17, 2004
Facts: Petitioner was hired by the company
as a Cadet Engineer and became a
supervisor, a position he held until January
1992.
In January 1992, he was designated
as Marketing Ofcer II, a position at the
companys Fabricated Glass Division
Marketing (FGD Marketing).
As Marketing Ofcer II of the FGD
Marketing, the bulk of petitioners functions
is related to sales.
Sometime in July 1994, he was
asked by certain ofcers of the company to
resign and accept a separation package.
Petitioner refused to resign and accept
separation benefts.
He was not given work and another
employee, Tacata, was assigned to take over
his post and function.
He, through his lawyer, warned the
company about the illegality of its actions.
In replying to petitioners letter, the
company emphasized that given the series
of irresponsible and inefcient acts he had
committed justifed the initiation of an
administrative proceeding against him.
The company went on to declare
that it had fnally decided to initiate
disciplinary action against him in view of
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his irresponsibility in sending the letter
which pre-empted management
prerogatives.
Thus the company directed
petitioner to explain in writing within 48
hours from receipt thereof why his services
should not be terminated for loss of trust
and confdence.
Petitioner denied the charges
against him, explaining that his absence for
6 days from May 29 to June 5, 1992 was
occasioned by some problems at home
which he had to personally attend to.
The company subsequently
terminated petitioners services for loss of
trust and confdence.
Petitioner lodged a complaint for
illegal dismissal.
Issue: Whether or not the companys loss of
trust and confdence in petitioner is
founded on facts established by substantial
and competent evidence
Held:No, The employer's evidence,
although not required to be of such degree
as that required in criminal cases, i.e.,
proof beyond reasonable doubt, must be
substantial.
It must clearly and convincingly
establish the facts upon which loss of
confdence in the employee is based.
In the case at bar, the company
failed to discharge this burden.
While the company complained of
petitioner having incurred 6 days of
absence without leave from May 29 to June
5, 1992, records do not disclose that
petitioner incurred any further absences
without leave.
More importantly, except for that
incident in 1992, the company failed to
show that there were instances during the
14 years that petitioner had been employed
that he incurred absences without leave.
The propriety of petitioners 6 days
of absence having priorly been settled by
the parties, the company may no longer ask
petitioner to, more than two years later, re-
explain his absence and use the same to
justify his dismissal.
As for the charge that petitioner had
not been attending the daily 3 minutes
meeting of the FGD Marketing, the
company took no action on the matter, nor
warned petitioner that his attendance in
the meetings was mandatory.
It was several months later when
the company frst called his attention to it
and used it as a basis for dismissing him.
A company is expected to call the
attention of an employee to any undesirable
act or omission within a reasonable time.
In the case at bar, the failure of the
company to timely take any disciplinary
action against petitioner weakens its claim
that petitioners continued absence in the
meetings rendered him unft for continued
employment with it.
That the company hastily dismissed
petitioner is clearly apparent. He was not
given adequate time to prepare for his
defense, but was peremptorily dismissed,
even without any formal investigation or
hearing.
Where the employee denies the
charges against him, a hearing is necessary
to thresh out any doubt. The failure of the
company to give petitioner, who denied the
charges against him, the beneft of a
hearing and an investigation before his
termination constitutes an infringement of
his constitutional right to due process.
As for the other two charges that
petitioner as a feld ofcer unnecessarily
lingered or killed time at the place of clients
and engaged them in arguments and
quarrels, and that he visited UMC
(Mandaluyong) only when called upon to do
so the company failed to substantiate the
same.
Tacatas (replacement of petitioner)
statement that Arnel Deunida [Supply
Superintendent of FMC] requested that our
customer service and QA Stafs resume
their regular visits to FMC to inspect and
evaluate glass rejects gives credence to the
allegation of petitioner that he regularly
visited his client and it was only in late July
1994 that he could no longer do so for
Tacata having taken over his position.
Petitioner had long been divested of
responsibility over these accounts when
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complaints were documented by respondent
corporation.
As to the other complaints regarding
rejected glasses and returns due to
scratches, distortion, chipping and no-hole,
mispacking and handling procedure:
nowhere it is shown that petitioner was
directly responsible for the rejected glasses
and items.
Petitioners function at the FGD
Marketing was confned to sales.
Except for the mere allegation of
petitioners manager that its clients have
been complaining of petitioners work
attitude and performance, there is no
concrete evidence to show the same.
Absent any standard of performance
upon which petitioner was rated on the job,
loss of confdence has no basis.
Even if all the allegations-charges to
the petitioner are true, they are not of such
nature which merits the penalty of
dismissal, given petitioners service for 14
years.
Dismissal is unduly harsh and
grossly disproportionate to the charges; the
penalty imposed should be commensurate
to the gravity of his ofense.
An employer may terminate the
services of an employee due to loss of trust
and confdence; 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 28[2]c of the
Labor Code, on willful breach.
A breach is willful if it is done
intentionally, knowingly and purposely,
without justifable excuse, as distinguished
from an act done carelessly, thoughtlessly,
heedlessly or inadvertently.
Dismissal must rest on substantial
grounds and not on the employers
arbitrariness, whims, caprice or suspicion;
otherwise, the employee would eternally
remain at the mercy of the employer.
There must therefore be an actual
breach of duty committed by the employee
which must be established by substantial
evidence.
There being no basis in law or in
fact justifying petitioners dismissal on the
basis of loss of trust and confdence, his
dismissal was illegal.
PHILTREAD TIRE & RUBBER
CORPORATION, vs. ALBERTO VICENTE
G.R. No. 142759. November 10, 2004
Facts: Alberto M. Vicente, respondent, was
employed by Philtread Tire and Rubber
Corporation, petitioner. At the time of his
dismissal from the service, he was a
housekeeping coordinator at the General
Services Department, receiving a monthly
salary of P8,784.00. One of his duties was
to recommend to petitioner, for its approval,
projects intended for the beautifcation and
maintenance of its premises.
Engr. Ramon Y. Dumo, Administrative
Ofcer and Head of petitioners Security
and Safety Department, received a
complaint from Crisente Avis, a sign painter
with whom petitioner had a service
contract. Avis reported that he was being
forced by respondent to overprice by
P1,000.00 his service fee of P3,800.00 and
to deliver to him (respondent) the said
amount of P1,000.00; and that should Avis
fail to do so, he will no longer be awarded
future contracts.
Dumo conducted an investigation
attended by respondent, Avis, and three
representatives from the workers union.
Avis declared that sometime in January
1991, petitioner hired him to paint its trash
cans, push carts and cigarette waste boxes.
They agreed that his services will be paid
upon completion of the painting job and
submission of the corresponding invoice.
However, herein respondent instructed him
to prepare an invoice indicating therein that
his fee for his painting services is
P4,800.00, instead of P3,800.00.
Respondent even assured him that the
petitioner will approve the invoice.
At this juncture, petitioner assigned
respondent to perform janitorial duties,
prompting him to request an immediate
disposition of his case. But when
petitioner directed him to submit his
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evidence within three (3) days from notice,
he failed to comply.
After evaluating the records on hand,
petitioner found respondent guilty of
extortion, fraud, serious misconduct and
willful breach of trust and confdence.
Petitioner then sent him a notice
terminating his services
Respondent fled with the Labor Arbiter
a complaint for illegal dismissal and
damages against petitioner and Engr.
Dumo. The Labor Arbiter dismissed
respondents complaint
Upon appeal, the National Labor
Relations Commission (NLRC) reversed the
Labor Arbiters assailed decision
Petitioner then fled a motion for
reconsideration but was denied by the
NLRC it fled with this Court a petition for
certiorari with prayer for the issuance of a
temporary restraining order.
The Appellate Court rendered a
Decision afrming the assailed Decision of
the NLRC. The petitioner fled a motion for
reconsideration, but was denied by the
Appellate Court
Held: The issue raised is factual. It is basic
that the fndings of fact by the Court of
Appeals, when supported by substantial
evidence, are conclusive and binding upon
the parties and are not reviewable by this
Court, unless the case falls under any of
the exceptions to the rule, such as when
the fndings by the Appellate Court are not
supported by evidence. This exception is
being relied upon by petitioner.
Here, there is neither direct nor
documentary evidence to prove that
respondent was involved in extortion it is
not clear that respondent urged or forced
Avis to increase his service fee by P1,000.00
and to give the amount to him
(respondent). In fact, Avis is not certain
whether respondent was really serious
when he allegedly told him (Avis) to increase
his service fee to P4,800.00. We thus hold
that petitioner failed to prove its charge by
substantial evidence. Substantial evidence
is that amount of relevant evidence which a
reasonable mind might accept as adequate
to justify a conclusion.
Respondent who was illegally
dismissed from work is entitled to
rights, full back wages, inclusive of
allowances, and other benefts or their
monetary equivalent computed from the
time his compensation was withheld
from him up to the time of his actual
reinstatement.
However, the circumstances obtaining
in this case do not warrant the
reinstatement of respondent. Aside from
the fact that antagonism caused a severe
strain in the parties employer-employee
relationship, Petitioner Company has
completely ceased its tire manufacturing
and marketing operations
Hence, he is entitled to a separation
pay. Decision AFFIRMED with
MODIFICATION in the sense that, in lieu of
reinstatement, respondent is awarded
separation pay equivalent to P114, 192.00,
plus his full back wages, and other
privileges and benefts, or their monetary
equivalent, during the period of his
dismissal up to his supposed actual
reinstatement.
PHILIPPINE JOURNALISTS, INC. vs.
MICHAEL MOSQUEDA
G.R. No. 141430 May 7, 2004
Facts: Petitioner was sequestered by the
PCGG and by virtue of the writs of
sequestration issued by the Sandiganbayan,
PJI was placed under the management of
PCGG. Rosario Olivares, one of the
stockholders, attempted to regain control of
the PJI management. Separate stockholder
meetings were held, where each group
elected its own members to the Board of
Directors.
The Olivares Group passed
Resolution No. 92-2 designating Michael
Mosqueda, respondent, as Chairman of a
Task Force, along with fve (5) other
members, to protect the properties, funds
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and assets of PJI and enforce or implement
directives, instructions and orders of the
Olivares group. Thereafter, Abraham J.
Buenaluz, Ofcer-in-charge of PJIs
Administrative Services Division, charged
them with "serious misconduct prejudicial
to the interest of the company and/or
present management; willful breach of trust
and confdence; confict of interest; and
disloyalty under the PJI Personnel
Handbook".
Petitioners new management placed
respondent and other members of the Task
Force under preventive suspension pending
the investigation of the formal charges
against them. Prior to the investigation, the
Journal Employees Union (Union), for and
in behalf of respondent and other members,
fled with the Labor Arbiter a complaint for
illegal suspension, unfair labor practice,
and damages against petitioner.
Upon recommendation of Ofcer-in-
charge Buenaluz, petitioner terminated the
services of respondent and the other
members of the Task Force. The Labor
Arbiter rendered a Decision holding that
respondent and the other fve employees
were illegally dismissed from employment
and ordering petitioner (1) to reinstate them
to their former positions and (2) to pay their
backwages and moral and exemplary
damages. The National Labor Relations
Commission afrmed the Arbiters decision
with modifcation. Respondent fled with
the Court of Appeals a petition for certiorari
assailing, as grave abuse of discretion, the
NLRCs deletion of the award of backwages,
damages and attorneys fees. The Court of
Appeals granted the petition and reinstated
the Arbiters award of damages. Petitioner
now comes to this Court via a petition for
review on certiorari
Issue: Whether or not the award of
damages is proper
Held: Under Art. 279 of the Labor Code, an
employee who is unjustly dismissed is
entitled to reinstatement, without loss of
seniority rights and other privileges, and to
the payment of his full backwages, inclusive
of allowances, and other benefts or their
monetary equivalent, computed 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.
The Court does not see any reason
to depart from the foregoing rule in the case
of herein respondent who, as held by three
(3) independent bodies, was illegally
dismissed, and thus, rightfully entitled to
an award of full backwages, inclusive of
allowances and other benefts or their
monetary equivalent, computed from March
10, 1992, the date of his illegal dismissal
(and not from March 11, 1992 as
erroneously held by the Court of Appeals)
up to the time of his actual reinstatement.
The decision is AFFIRMED with
MODIFICATION in the sense that
respondent is awarded his full backwages,
other privileges and benefts, or their
monetary equivalent corresponding to the
period of his dismissal from March 10,
1992 up to his actual reinstatement.
ACD Investigation Security Agency, Inc.
v. Daquera
G.R. No. 147473 March 30, 2004
Facts: On February 15, 1990, Pablo
Daquera was employed as a security guard
by ACD Investigation Security Agency, Inc.
Subsequently, or on September 1, 1994, he
was reassigned to Public Estates Authority
as a security ofcer. However, he was
illegally dismissed for dishonesty, without
prior written notice and investigation.
Daquera fled a complaint for illegal
dismissal, illegal suspension, illegal
deduction and non-payment of benefts
with the Labor Arbiter.
The Labor Arbiter fnds that the
respondents dismissal from employment is
illegal.
On appeal, the national Labor
Relations Commission [NLRC] afrmed the
Arbiters Decision. A motion for
reconsideration was also denied by the
NLRC.
Petitioner then fled with the Court
of Appeals a petition for certiorari seeking
to set aside the NLRC decision and
resolution. The CA afrmed the Decision of
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the NLRC. A motion for reconsideration was
also denied by the Appellate Court.
Thus, this petition
Issue: Whether or not the respondents
dismissal from his work is valid.
Held: No, it is not.In order to constitute a
valid dismissal, two requisites must concur:
[a] the dismissal must for any of the causes
expressed in Article 282 of the Labor Code;
and [b] the employee must be accorded due
process, basic of which is the opportunity
to be heard and to defend himself.
Records show that respondent was
never notifed in writing of the particular
acts constituting the charge of dishonesty.
Neither was he required to give his side
regarding the alleged serious misconduct
imputed against him. Simply states,
respondent was not served by petitioner
with notices, verbal or written, informing
him of the particular acts for which his
dismissal is sought.
COCA-COLA BOTTLERS PHILIPPINES,
INC. vs. DOMINIC E. VITAL
G.R. No. 154384. September 13, 2004
Facts: Dominic E. Vital, respondent, was
employed by Coca-Cola Bottlers Philippines,
Inc., petitioner, as route driver/helper at its
Antipolo Plant, with a monthly salary of
P12,860.00. He was also assigned to
perform the duties of a salesman.
Petitioner, intending to increase the sale of
its products, implemented Operation
Rurok, a local marketing campaign that
allows its trusted wholesaler outlets to
retrieve foreign empties and/or bottles of
petitioners competitors, such as Pepsi Cola
and Cosmos, from regular customer outlets,
in exchange for Coca-Cola containers and
products.
Lagula, the District Sales
Supervisor, issued respondent
Miscellaneous Slip authorizing him to
deliver, in exchange for retrieved Pepsi-Cola
and Cosmos empties or bottles, 57 cases of
12 oz. Coca-Cola products to AMC Viray
Store situated in Tambunting Street,
Blumentritt. Subsequently Lagula again
handed respondent Miscellaneous Slip No.
75711 authorizing him to deliver, pursuant
to an exclusivity agreement, 90 cases of
12 oz. Coca-Cola products to Coras Store
situated in Cuenco Street. For the third
time, Lagula issued respondent
Miscellaneous Slip No. 87449 authorizing
him to deliver, as replacement for retrieved
foreign empties, 95 cases of 12 oz. Coca-
Cola products to John Uy at La Loma,
Quezon City.
Petitioner sent respondent a notice of an
investigation of its complaint against him
for forgery, fctitious sales transactions,
falsifcation of company documents,
unauthorized retrieval of empties, pursuant
to Sections 10 and 12, Rule 005-85 of the
companys Code of Disciplinary Rules and
Regulations. Petitioner then placed
respondent under preventive suspension. In
the meantime, petitioner, in an Interofce
Memorandum dated October 14, 1996,
stopped implementing Operation
Rurok.During the clarifcatory hearing
conducted by petitioner respondent
admitted that he deviated from the
instructions stated in the Miscellaneous
Slips handed to him by his supervisor,
Lagula. He stated that in three separate
instances, Lagula instructed him to deliver
the Coca-Cola products to other outlets.
Eventually, petitioner sent respondent an
Interofce Memorandum dated February 8,
1997 terminating his services for loss of
trust and confdence. Respondent fled with
the Labor Arbiter a complaint for illegal
dismissal and damages against.
Issue: Whether or not respondent is
entitled to reinstatement without loss of
seniority rights.
Ruling: Respondent who was illegally
dismissed from work is entitled to
rights, full backwages, inclusive of
allowances, and other benefts or their
monetary equivalent computed from the
time his compensation was withheld from
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him up to the time of his actual
reinstatement. In fact, there is no showing
that respondents acts were inimical to
petitioners interest. Petitioner has not also
shown that previously, respondent violated
any of its rules or regulations. Certainly,
respondents acts may be considered as
isolated incidents not amounting to a willful
disobedience or violation of petitioner
companys rules and regulations.
However, the circumstances obtaining in
this case do not warrant the reinstatement
of respondent. Antagonism caused a severe
strain in the relationship between him and
petitioner company. A more equitable
disposition would be an award of separation
pay equivalent to at least one month pay, or
one month pay for every year of service,
whichever is higher, (with a fraction of at
least six (6) months being considered as
one (1) whole year), in addition to his full
backwages, allowances and other benefts.
R.P. Dinglasan Construction, Inc. vs.
Atienza
G.R. No. 156104
June 29, 2004
Facts The petitioner R. P. Dinglasan
Construction, Inc. is a provider of a
Janitorial Services to Pilipinas Shell
Refnery Corporation. The respondents in
this case served as petitioners janitor
assigned with the Shell Corporation.
In a meeting, the petitioner informed
the respondent and three (3) other
employees that they will be terminated
because they lost in the bidding with Shell.
However they were informed that they may
re apply as helpers and redeployed in other
companies where petitioner has a
subsisting contracts.
Respondents however refused to
accept such ofer, contending that the ofer
is tantamount to demotion and they would
lost seniority status and would not be
guaranteed to work at a regular hours.
Later, a complaint was fled for non-
payment of their salary. During the
conciliation proceedings, petitioner
informed them that they will be reinstated
with Shell provided they have to submit
some documentary requirements. However,
they failed to do so, hence they will declared
absent without ofcial leave.
Labor Arbiter rendered decision in
the labor case, fnding that the respondent
were illegally dismissed and ordering their
restatement.
Issue: Whether or not the onus probandi
rest on the employer in an illegal dismissal
case.
Ruling: The Supreme Court held that, in
an illegal dismissal case, the unos probandi
rests on the employer to prove that its
dismissal of an employee is for a valid
cause. In the case at bar, petitioner failed
to discharge its burden. It failed to
establish that private respondents
deliberately and unjustifably refused to
resume their employment without any
intention of returning to work.
ELECTRUCK ASIA, INC. vs. EMMANUEL
M. MERIS ,et al.
Facts: Respondents and their twenty-
eight co-employees fled on February 1,
1996 a complaint for illegal dismissal with
prayer for reinstatement to their former
positions, with full backwages and without
loss of seniority rights.
By Decision of September 27, 1996
which noted that there was no need for
trial on the merits, Labor Arbiter De Asis,
fnding as follows: Here, complainants
concerted action demonstrates a moral
perverse attitude toward their employer. By
leaving their work unattended and undone
and sleeping on companys time, in efect,
complainants are robbing the company of a
fair days labor. This is plain and simple
dishonesty, and applying the Wenphil
doctrine which, by his words, upheld the
validity of the dismissal despite the non-
observance of due process of law,
dismissed respondents Complaint.
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The Labor Arbiters decision was
appealed to the National Labor Relations
Commission and by Resolution of May 28,
1997, the NLRC dismissed the appeal for
lack of merit. Respondents fled a petition
for certiorari before the Court of Appeals .
By Decision 31, 2000, the Court of Appeals
(CA) reversed and set aside the Resolutions
of the NLRC . In reversing the NLRC, the
appellate court held that both the NLRC
and the Labor Arbiter failed to anchor their
conclusions upon substantial evidence. At
the outset, it should be stressed that the
petitioners are not required to prove their
innocence of the charges leveled against
them by their employer. A su converso, the
employer must afrmatively show rationally
adequate evidence that the dismissal was
for a just cause.
ISSUE: Whether or not there exist a just
cause for terminating respondents
employment
RULING: It is settled that the fndings of
facts of administrative agencies, such as
the NLRC, must be respected so long as
they are supported by substantial
evidence. Deviation from this well-
established rule must, however, be made
when the Labor Arbiter and the NLRC
clearly misappreciated the facts, thereby
impairing the employees right to
security of tenure.
In illegal dismissal cases, the onus
probandi lies on the employer. Petitioner
has failed in this respect, however.Contrary
to petitioners allegation and the fndings of
both the Labor Arbiter and the NLRC, no
evidence was presented to prove that
respondents were caught sleeping by
Datson. Why no sworn statement or
afdavit of Datson to substantiate such
claim, petitioner profered no reason.
Parenthetically, it is highly unlikely and
contrary to human experience that all ffty-
fve employees including respondents were
at the same time sleeping. As for
petitioners contention that the Serrano
ruling is not applicable, the same is well-
taken but not for the reason it profered.
The Serrano doctrine which dispenses with
the twin requirement of notice and hearing
does not apply to the case at bar because,
as already discussed, petitioner had not
proved that the termination of respondents
was for a just or authorized cause.
CHIANG KAI SHEK COLLEGE, ET AL. VS.
COURT OF APPEALS
G.R. No. 153988, August 24, 2004
Facts: Belo is a teacher of CKSC since
1977. She applied for a leave of absence for
SY 1992-1993 because her children had no
yaya to take care of them. Her leave of
absence was approved. After one-year leave
of absence, she was denied and not
accepted when she signifed her readiness
to teach. Belo fled with the Labor
Arbitration Ofce a complaint for illegal
dismissal. The Labor Arbitrator dismissed
the complaint, reasoning that there was
simply no available teaching load for her.
On appeal, NLRC reversed the decision of
the Labor Arbiter. Petitioner fled a petition
for certiorari with the CA. CA ruled that
NLRC acted correctly when it ascertained
that Belo was dismissed constructively.
Thus, this petition
Issue: Whether or not Belo was illegally
dismissed.
Held: Yes, It must be noted that Belo has
been a full-time teacher in CKSC for 15
years until she took a leave of absence for
the SY 1992-1993.Under the Manual of
Regulations for Private Schools, for a
private school teacher to acquire a
permanent status of employment, the
following requisites must concur: 1) The
teacher is a full-time teacher; 2) the teacher
must have rendered 3 consecutive years of
service; and 3) such service must have been
satisfactory. Since Belo has measured up
these standards, she therefore enjoys
security of tenure thus the school should
be held liable for its refusal to accept her
after her one-year leave of absence.
Constructive Dismissal
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THE PHILIPPINE AMERICAN LIFE AND
GENERAL INSURANCE CO. vs. ANGELITA
S. GRAMAJE
G.R. No. 156963. November 11, 2004
Facts:Petitioner employed private
respondent as Assistant Vice President and
Head of the Pensions Department and in
concurrent capacity as Trust Ofcer of
Philam Savings Bank.
Working as Assistant Vice President
of Pensions Department of Philamlife,
private respondent was ofered an
additional position by petitioner Cuisia for
the position of Head of Trust Banking
Division or AVP-Trust Ofcer on a
concurrent capacity and under a separate
compensation.
However, respondents marketing
manager and marketing ofcer were
immediately transferred to Group Insurance
Division. Respondent, thereafter, was never
given replacements for the marketing
manager and marketing ofcer, contrary to
petitioner Cuisias assurance. Thus, private
respondent ran the Pensions Department
single-handedly with only one
administrative assistant as her staf.
Petitioner through its ofcers
Centeno and Sotelo ofered her
P250,000.00 for her to vacate her position
which respondent declined the ofer
considering that there was no valid reason
for her to leave.
Petitioner issued a memorandum
instructing her to transfer to the Legal
Department.
Respondent protested the sudden
unexplained transfer, more so a non-
existing position, and stressed that she was
hired because of her marketing, fnance,
and fund management skills, not her legal
skills. She also made of record that her
department surpassed the target fund level
volume set by the company.
Respondent availed of her housing
and car benefts and applied for a car loan
and housing loan which the petitioner
declined.
Petitioner, while on Ofcial Sick
Leave, received a message in her pager that
the Pensions Department was assumed to
be headed by Corine Moralda as her
successor and the Pensions Department
was to be immediately physically
transferred at the Philamlife Gammon
Center in Makati City. Though sick and on
ofcial sick leave, petitioner went to the
ofce to verify, and upon seeing the
Pensions Department totally dark, without
any staf and with left over fxtures,
petitioner, emotionally shattered, opted to
just leave the premises.
Also, while it is the tradition of
Philamlife to give, during the Christmas
Season, ofcers and employees a traditional
Seasons giveaways, i.e., ham and queso de
bola, petitioner then, thru her authorized
representatives, asked for her share, but
she was not in the list of recipients.
Petitioners name was not in the Legal
Department, not in the Pensions
Department, and not in the list of
employees of Philamlife when verifed with
the Personnel Department.
Hence, on December 23, 1998,
petitioner fled the instant case for illegal or
constructive dismissal against herein
private respondents.
Issue: Whether or not respondent
constructively dismissed or was her
transfer a legitimate exercise of
management prerogative
Held:There is constructive dismissal of
the respondent.
In the pursuit of its legitimate
business interests, management has the
prerogative to transfer or assign employees
from one ofce or area of operation to
another provided there is no demotion in
rank or diminution of salary, benefts, and
other privileges; and the action is not
motivated by discrimination, made in bad
faith, or efected as a form of punishment
or demotion without sufcient cause.
In the case at bar, bad faith and
discrimination on the part of petitioner are
profusely perceived from its actions.
First, as early as 23 August 1998,
unknown to respondent, petitioner had
already advertised in the Manila Bulletin for
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her replacement. Respondent was not even
notifed in advance of an impending
transfer.
Second, the President and CEO of
petitioner corporation, Jose L. Cuisia, Jr.,
in his Memorandum dated 18 December
1998, announced the appointment of
respondents replacement efective 14
December 1998, or during the time that
respondent was still on ofcial sick leave. It
is worthy to note that on 10 December
1998, respondent, through a letter of even
date, protested her sudden unexplained
transfer, more so, to a non-existing
position. Respondent, in said letter,
likewise pointed out that her department
surpassed the target fund level volume set
by the company (which negates petitioners
allegation of ineptness on the part of
respondent, used as ground by the former
to justify the transfer), and thereby
requested for status quo, until all issues
were resolved.
Third, the transfer of respondent to
the Legal Department was unreasonable,
inconvenient and prejudicial to her.
Petitioner must have known that
respondent has no adequate exposure in
the feld of litigation, and yet she was
transferred to the Legal Department.
Fourth, there was, likewise,
discrimination against respondent, as
shown from the following: (a) the Pensions
Department was run by respondent with
practically no support from management.
Respondent was left to fend for herself, and
yet was required to bring in the numbers,
i.e., generate and develop accounts; (b)
respondent tried to avail herself of her car
loan beneft by fling the appropriate
application. However, action on this
application was deferred by Reynaldo
Centeno in his letter saying that
respondents employment status has been
the subject of several discussions between
the high ranking ofcers of petitioner; and
(c) it is a tradition on the part of petitioner,
during the Christmas season, to give its
ofcers and employees a seasons giveaway,
i.e., ham and queso de bola. Respondent
sent an authorized representative to ask for
her share, but, unfortunately, she was not
in the list of recipients. Her name was not
listed in the Legal Department, nor in the
Pensions Department. Respondents name,
when verifed with the Personnel
Department, was not in the list of
employees of Philamlife.
Fifth, respondent formally rejected
the ofer of P250,000 for her to leave the
company.
The right and privilege of the
employer to exercise the so-called
management prerogative is recognized, and
the courts will not interfere with it. This
privilege is inherent in the right of
employers to control and manage their
enterprise efectively.
But, like other rights, there are
limits thereto. The managerial prerogative
to transfer personnel must be exercised
without grave abuse of discretion, bearing
in mind the basic elements of justice and
fair play.
Having the right should not be
confused with the manner in which that
right is exercised. Thus, it cannot be used
as a ploy by the employer to rid himself of
an undesirable worker.
The employer must be able to show
that the 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 benefts.
Should the employer fail to overcome
this burden of proof, the employees
transfer shall be tantamount to
constructive dismissal.
Likewise, constructive dismissal
exists when an act of clear discrimination,
insensibility or disdain by an employer has
become so unbearable to the employee
leaving him with no option but to forego
with his continued employment.
Hence, SC rules there was
constructive dismissal.
Petitioner has repeatedly asserted
that the performance of respondent did not
meet the expectation of the company and
did not comply with accepted standards for
a pension proft center manager, as she
lacked the skill, as well as the willingness,
to perform her duties and
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responsibilities. But it is rather odd that
the alleged ineptness of respondent did not
prompt petitioner to issue any Inter-ofce
Memorandum reprimanding, admonishing,
or warning the former about her
performance.
Petitioner maintains that it was
respondent who severed her working
relationship with it. Per letter dated 11
January 1999 issued by petitioners Legal
Department, respondent was asked to
report immediately to her new assignment
and submit to a medical examination, and
that the latter took no heed of this. It seems
that the point impliedly being raised by
petitioner is that respondent disengaged her
employment relationship with petitioner by
abandoning her work and failing to report
accordingly. This argument is dubious.
Respondent, on 23 December 1998, already
fled a case for illegal dismissal against
petitioner. For petitioner to expect
respondent to report for work after the
latter already fled a case for illegal
dismissal before the NLRC, would be
absurd.
For abandonment to exist, it is
essential (1) that the employee must have
failed to report for work or must have been
absent without valid or justifable reason;
and (2) that there must have been a clear
intention to sever the employer-employee
relationship manifested by some overt acts.
Both these requisites are not present.
FERNANDO GO vs. COURT OF APPEALS
and MOLDEX PRODUCTS, INC.,
G.R. No. 158922. May 28, 2004
Facts: On April 26, 1986, petitioner
Moldex, hired private respondent, Fernando
Go as a salesman with monthly salary and
an allowance. Over the years, private
respondent worked himself within
petitioners corporate structure until he
eventually attained the rank of Senior Sales
Manager.
As the Senior Sales Manager of
private respondent, petitioner was
responsible for overseeing and managing
the sales force of the company such as
dealing with clients, getting orders, entering
into agreement with clients, subject to the
approval of higher management.
It appears that sometime in 1998,
the accounts handled by the petitioner and
his staf experienced collection problems.
This difculty in collection necessitated the
conduct of an investigation by the
respondent, which led to the discovery of
anomalies. Among the sales personnel
investigated was a member of petitioners
division. Consequently, respondent
corporation dismissed a number of its
personnel.
For its part, respondent claimed
that it also questioned petitioner and that
obviously feeling guilty for not exercising
efective supervision over his subordinates,
petitioner submitted a letter of resignation
dated October 12, 1998 but efective on
November 16, 1998. Respondent added
that petitioner went on leave from October
12, 1998 to November 16, 1998. While on
leave, petitioner worked for the release of
his clearance and the payment of 13th
month pay and leave pay benefts.
Petitioner averred that he was not
investigated. Petitioner further alleged that
after the investigation, he was surprised to
receive an advice from the respondent that
his services were being terminated by the
latter on account of command
responsibility. But since the petitioner was
not involved in the anomalies, he was
promised payment of separation pay,
commission and other benefts due him on
account of his long and dedicated
employment with the respondent. In
addition, the respondent also granted to
petitioner a distributorship agreement for
the right to be a distributor of its products.
In exchange, petitioner was asked to submit
a courtesy resignation to the respondent.
Thereafter, petitioners responsibility as the
senior sales manager of the respondent was
eventually stripped from him.
On March 21, 2000, petitioner fled
with the NLRC a complaint for constructive
dismissal, separation pay, service incentive
leave including damages and attorneys fees
against the respondent.
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On April 30, 2001, Labor Arbiter
Abrasaldo-Cuyuca rendered a Decision in
favor of the complainant and against the
respondent, declaring the dismissal of
complainant illegal and ordering
respondent to pay complainant his
backwages in the amount of P1,597,916.67,
as well as his separation pay in the amount
of P375,000.00
Respondent appealed the aforesaid
decision to the NLRC, which the latter
afrmed with modifcation the Labor
Arbiters decision. Respondent sought a
reconsideration of the NLRC decision which
was denied.
Respondent fled a petition for
certiorari with the Court of Appeals. The
Court of Appeals annulled and set aside the
twin resolutions of the NLRC.
Hence, the petition for review
Issue: Whether or not the petitioner was
constructively dismissed.
Ruling: Constructive dismissal exists where
there is a cessation of work because
continued employment is rendered
impossible, unreasonable or unlikely. It is
present when an employees functions,
which were originally supervisory in nature,
were reduced, and such reduction is not
grounded on valid grounds such as genuine
business necessity.
As correctly observed by the Court
of Appeals, it should be remembered that
the petitioner has submitted a letter of
resignation. It is thus incumbent upon him
to substantiate his claim that his
resignation was not voluntary but in truth
was actually a constructive dismissal.
The failure of the petitioner to fully
substantiate his claim that the respondent
stripped him of his duties and functions is
fatal to his present petition. Except for the
sworn statements previously discussed,
which the Court found to be lacking in
probative value, petitioner did not present
any other proof of the alleged stripping of
his functions by the respondent.
Petitioners bare allegations of constructive
dismissal, when uncorroborated by the
evidence on record, cannot be given
credence.
Further, respondent presented
copies of its confdential sales evaluation
form which prove that, contrary to the
allegations of the petitioner, he was still
performing his duties and responsibilities
one month prior to his resignation. This
clearly negates his allegations that he was
stripped of his duties.
Apparently, petitioner fully exercised
the prerogatives and the responsibilities of
his ofce as the Senior Sales Manager of
the respondent during the time that the
said functions were supposedly removed
from him. Therefore, there can be no
constructive dismissal to speak of. He who
asserts must prove.
Moreover, after petitioner resigned,
he went on leave from October 12, 1998 to
November 16, 1998, the date of the
efectivity of his resignation. While on leave,
he worked for the release of his clearance
and the payment of his 13th month pay
and leave pay benefts. In doing so, he in
fact performed all that an employee
normally does after he resigns. Petitioner
has taken his theory of coerced or
manipulated resignation out of the
equation. If indeed the petitioner was forced
into resigning from the respondent, he
would not have sought to be cleared by the
respondent and to be paid the monies due
him. Resignation is the formal
pronouncement or relinquishment of an
ofce. The voluntary nature of petitioners
acts has manifested itself clearly and belie
his claim of constructive dismissal.
The totality of the evidence
indubitably shows that petitioner resigned
from employment without any coercion or
compulsion from respondent. His
resignation was voluntary. As such, he
shall only be entitled to his 13th month pay
and leave pay benefts.
The petition was DENIED and the decision
of the Court Appeal dated June 30, 2003
was AFFIRMED. The complaint for
constructive dismissal fled by respondent
Fernando Go against petitioner was
DISMISSED.
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Resignation:
WILLI HAHN ENTERPRISES and/or
WILLI HAHNvs. LILIA R. MAGHUYOP,
G.R. No. 160348. December 17, 2004
Facts: Respondent Lilia Maghuyop was
hired by petitioner Willi Hahn as nanny of
one of his sons. Later, she was employed as
salesclerk of Willi Hahn Enterprises (Cubao
branch). Then, she was promoted as store
manager of its branch in SM Cebu.
Petitioner conducted an Inventory
Report and discovered that its SM Cebu
branch incurred stock shortages and non-
remittances. Petitioner decided to terminate
the services of respondent, however, before
he could do so, the latter tendered her
resignation. Believing the good faith of
respondent in resigning, petitioner decided
not to fle charges against her anymore.
Respondent on the other hand,
claimed that she was forced in signing the
letter. Respondent fled a complaint with
the NLRC, alleging that she should be
awarded backwages, separation pay, 13
th
month pay, damages and attorneys fees.
The Labor Arbiter ruled in her favor.
Dissatisfed with the award, respondent
appealed to the NLRC which was however
denied for lack of merit. On appeal, the
Court of Appeals granted the petition and
reversed the order of the Labor Arbiter and
NLRC. Hence, this petition
Issue: Whether or not respondent
voluntarily resigned as manager of the SM
Cebu Branch.
Held: The letter is simple, candid and direct
to the point. We fnd no merit in
respondents claim that being a mere clerk,
she did not realize the consequences of her
resignation. Although she started as nanny
to the son of petitioner Willi Hahn, she has
risen to being the manager and ofcer-in-
charge of the Willi Hahn Enterprises in SM
Cebu branch.
The failure of petitioner to pursue
the termination proceedings against
respondent and to make her pay for the
shortage incurred did not cast doubt on the
voluntary nature of her resignation. A
decision to give a graceful exit to an
employee rather than to fle an action for
redress is perfectly within the discretion of
an employer. It is not uncommon that an
employee is permitted to resign to save face
after the exposure of her malfeasance.
Under the circumstances, the failure of
petitioner to fle action against the
respondent should be considered as an act
of compassion for one who used to be a
trusted employee and a close member of the
household.
Respondents unsubstantiated and
self-serving claim that she was coerced into
signing the resignation letter does not
deserve credence. It is a basic rule in
evidence that the burden of proof is on the
part of the party who makes the
allegations. Respondent failed to discharge
this burden.
Retrenchment
EMCO PLYWOOD CORPORATION vs.
ABELGAS et al
G.R. No. 148532 April 14, 2004
Facts: EMCO is a domestic corporation
engaged in the business of wood
processing, operating through its sawmill
and ply mill sections where [respondents]
used to be assigned as regular workers.
EMCO informed the DOLE of its
intention to retrench some of its workers.
On the grounds of fnancial difculties
occasioned by alleged lack of raw materials,
frequent machinery breakdown, low market
demand and expiration of permit to operate
its sawmill department.
A memorandum was thereafter
issued by EMCO, addressed to all its
employees with the instructions that 58 yrs
above and with good attitude and good
performance will be retained. However it
turned out that more than 200 employees
were terminated including the respondents.
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They received their separation pay and
made them to sign quitclaims and the
attorneys fees were deducted from them.
Respondents questioned the validity
of their retrenchment and the sufciency of
the separation pay received by them before
the LA.
LA dismissed their complaint for
lack of merit. NLRC afrmed LAs decision.
CA concluded that the retrenchment
was illegal, because of EMCOs failure to
comply with the legal requirements.
Hence this petition by EMCO
Issue Whether or not there was a valid
retrenchment.
Ruling: Retrenchment is one of the
authorized causes for the dismissal of
employees. Resorted to by employers to
avoid or minimize business losses, it is
recognized under Article 283 of the Labor
Code.
Petitioners have failed to prove that
their alleged losses were substantial,
continuing and without any immediate
prospect of abating; hence, the nature of
the retrenchment is seriously disputable.
The losses expected should be
substantial and not merely de minimis in
extent. If the loss purportedly sought to be
forestalled by retrenchment is clearly shown
to be insubstantial and inconsequential in
character, the bonafde nature of the
retrenchment would appear to be seriously
in question. Secondly, the substantial loss
apprehended must be reasonably
imminent, as such imminence can be
perceived objectively and in good faith by
the employer.
For a valid termination due to
retrenchment, the law requires that written
notices of the intended retrenchment be
served by the employer on the worker and
on the Department of Labor and
Employment at least one (1) month before
the actual date of the retrenchment. The
purpose of this requirement is to give
employees some time to prepare for the
eventual loss of their jobs, as well as to give
DOLE the opportunity to ascertain the
verity of the alleged cause of termination.
The Notice sent to DOLE was
defective, because it stated that EMCO
would terminate the services of 104 of its
workers. The corporation, however, actually
dismissed 250 the latter were not
retrenched.
"Article 283. x x x In case of
retrenchment to prevent losses x x x, the
separation pay shall be equivalent to one (1)
month pay or at least one half (1/2) month
pay for every year of service, whichever is
higher. A fraction of at least six (6) months
shall be considered one (1) whole year.
The obligation to pay attorneys fees
belongs to the union and cannot be
shunted to the individual workers as their
direct responsibility. The law has made
clear that any agreement to the contrary
shall be null and void ab initio. Thus,
petitioners deduction of attorneys fees
from respondents separation pay has no
basis in law.
Petition denied. SC Afrmed CAs
decision.
Valid Dismissal, Lack of Due Process
JENNY M. AGABON and VIRGILIO C.
AGABON VS. NLRC, RIVIERA HOME
IMPROVEMENTS, INC. and VICENTE
ANGELES
G.R. No. 158693. November 17, 2004
Facts: Private respondent Riviera Home
Improvements, Inc. employed petitioners
Virgilio Agabon and Jenny Agabon as
gypsum board and cornice installers until
they were dismissed for abandonment of
work.
Petitioners then fled a complaint for
illegal dismissal and payment of money
claims.
The Labor Arbiter rendered a
decision declaring the dismissals illegal and
ordered private respondent to pay the
monetary claims.
On appeal, the NLRC reversed the
Labor Arbiter because it found that the
petitioners had abandoned their work and
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were not entitled to back wages and
separation pay.
Petitioners fled a petition for
certiorari with the Court of Appeals.
CA ruled that the dismissal of the
petitioners was not illegal because they had
abandoned their employment but ordered
the payment of money claims.
Issues: (1) Whether or not the petitioners
were illegally dismissed (2) Whether or not
respondent company complied with
statutory due process
Held:Petitioners were frequently absent
having subcontracted for an installation
work for another company. Subcontracting
for another company clearly showed the
intention to severe the employer-employee
relationship with private respondent. This
was not the frst time they did this.
They did not report for work because
they were working for another
company. Private respondent at that time
warned petitioners that they would be
dismissed if this happened again.
Petitioners disregarded the warning
and exhibited a clear intention to severe
their employer-employee relationship.
In Sandoval Shipyard v. Clave, The
Court held that an employee who
deliberately absented from work without
leave or permission from his employer, for
the purpose of looking for a job elsewhere,
is considered to have abandoned his job.
We should apply that rule with more
reason here where petitioners were absent
because they were already working in
another company.
The terminations were for a just and
valid cause.
The dismissal is for just or
authorized cause but due process was not
observed. The employer should be held
liable for non-compliance with the
procedural requirements of due process.
The dismissal should be upheld
because it was established that the
petitioners abandoned their jobs to work for
another company. Private respondent,
however, did not follow the notice
requirements and instead argued that
sending notices to the last known addresses
would have been useless because they did
not reside there anymore.
Unfortunately for the private
respondent, this is not a valid excuse
because the law mandates the twin notice
requirements to the employees last known
address. Thus, they should be held liable
for non-compliance with the procedural
requirements of due process.
Prior to 1989, the rule was that a
dismissal or termination is illegal if the
employee was not given any notice. In the
1989 case of Wenphil Corp. v. National
Labor Relations Commission, we reversed
this long-standing rule and held that the
dismissed employee, although not given any
notice and hearing, was not entitled to
reinstatement and back wages because the
dismissal was for grave misconduct and
insubordination, a just ground for
termination under Article 282.
The dismissal of an employee must
be for just or authorized cause and after
due process.
Where the employer had a valid reason to
dismiss an employee but did not follow the
due process requirement, the dismissal may
be upheld but the employer will be
penalized to pay an indemnity to the
employee. This became known as the
Wenphil or Belated Due Process Rule.
An employer should not be
compelled to pay employees for work not
actually performed and in fact abandoned.
Where the dismissal is for a just
cause, as in the instant case, the lack of
statutory due process should not nullify the
dismissal, or render it illegal, or
inefectual. However, the employer should
indemnify the employee for the violation of
his statutory rights.
The violation of the petitioners right
to statutory due process by the private
respondent warrants the payment of
indemnity in the form of nominal damages.
The amount of such damages is addressed
to the sound discretion of the court, taking
into account the relevant circumstances.
It provides a vindication or
recognition of this fundamental right
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granted to the latter under the Labor Code
and its Implementing Rules.
Labor cases, jurisdiction:
CALIFORNIA BUS LINE TRANSIT, INC. v.
NLRC
Facts: Private respondents who were
employed as drivers and conductors by
petitioner CBL Inc. fled a complaint for
illegal dismissal alleging that despite their
regular employment status, they were not
given work assignments.
Petitioner claimed that the termination
of private respondents employment was a
consequence of is closure of operations due
to bankruptcy.
The labor arbiter ruled in favor of the
private respondents. The NLRC upheld the
decision of the labor arbiter.
On a petition for certiorari before this
court, the petition was dismissed and the
court ordered to reinstate private
respondents with backwages or separation
pay.
To enforce the courts resolution, the
labor arbiter ordered the computation of
the private respondents respective
monetary awards. However, the petitioner
did not agree on the method used in
arriving at the correct average monthly
contributions. It appealed to the NLRC but
the appeal was dismissed. Hence this
petition
Issue: Whether or not the court has
jurisdiction over the case.
Ruling: Findings of facts and conclusion of
the NLRC are generally accorded not only
great weight and respect but even clothed
with fnality and deemed binding on this
court as long as they are supported by
substantial evidence.
Petitioner submitted itself to the
jurisdiction of Research and Information
Unit of the NLRC. Through its authorized
accountant, petitioner agreed that the
computation of backwages and separation
pay should be based on the monthly
average earnings of the individual private
respondents appearing on their SSS forms
for 1988-1990, considering that the
payrolls were no longer available. It cannot
be allowed now to question the latters
jurisdiction.
The court has time and again
frowned on the practice of a partys
submitting his case for decision and then
accepting the verdict only if favorable, while
attacking it for lack of jurisdiction if it is
not. The principle of estoppel applies here.
The petitioner is barred from raising the
question of jurisdiction for the frst time in
this petition before us when it failed to
invoke it in the early stages of the
proceedings.
Labor cases, Due Process:
SHOPPES MANILA INC. vs. NLRC
G.R.No.147125 January 14,2004
Facts: The petitioner is a domestic
corporation engaged in garments
manufacturing using the brand name
KAMISETA. Among its employees were
private respondent Lorie Torno and Maricar
Buan.
A report was made on the alleged
stealing of KAMISETA items which was
ascribed against Buan and the private
respondent.
On the basis of the said report, the
petitioner issued a disciplinary action form
suspending the private respondent
indefnitely without pay. On August 25,
1997, a notice of dismissal was addressed
to the private respondent specifying the
charge against her, the factual basis thereof
and the imposable penalties for the said
charge if proven.
The private respondent failed to
appear during the scheduled hearing.
Consequently, the petitioner decided to
dismiss the private respondent from her
employment. When notifed of the
petitioners decision, the private respondent
fled a complaint for illegal dismissal with
prayer for reinstatement and payment of
backwages, non-payment of service
incentive leave pay and 13
th
month pay
against the petitioner before the NCR
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Branch of the NLRC. The case was initially
rafed to Labor Arbiter Emerson C.
Tumanong. In the meantime, Tumanong
was replaced by labor Arbiter Ermita
Abrasaldo-Cuyuca(Cuyuca for brevity) who
issued an order declaring that the case was
submitted for decision.
On August 31, 1998, Cuyuca
rendered decision holding that the
respondent was illegally dismissed and
directed the petitioner to pay P62,530 as
backwages and P19,240 as separation pay
to the private respondent.
Cuyuca declared that the private
respondent was denied of her right to due
process before she was dismissed from her
employment and that the petitioner failed to
show that it notifed the private respondent
of the charges against her. The petitioner
also failed to show that the Private
respondent receive the notice of dismissal.
Hence, the dismissal of the private
respondent was illegal. However, according
to the labor arbiter, reinstatement could no
longer be efected, as the relationship
between the private respondent and the
petitioner had been strained and ruptures.
The private respondents claim for non-
payment of service incentive leave and 13
th
month pay were denied for her failure to
specify the period covered therein. Her
claim of underpayment of wage was,
likewise, denied, as it was not included in
the original complaint.
Aggrieved, the petitioner appealed
the decision to the NLRC, alleging that it
deprived of its right to a formal hearing
before the labor arbiter rendered decision. It
argued that while the conduct of hering is
not mandatory in labor cases, the Labor
Arbiter was mandated to do so in this case
because Tumanong had already declared
that a formal hearing is necessary. Hence,
the petitioner had acquired a vested right
thereto. Cuyucas failure to conduct a
hearing deprived the petitioner of its vested
right; consequently, her decision was null
and void. NLRC issued a resolution
dismissing the appeal and afrming the
decision of the labor arbiter.
The NLRC reasoned that a formal
hearing of the case on its merits is not
mandatory in labor cases but is dependent
on the discretion of the labor arbiter who
has the sole power to determine whether or
not there is need for hearing. Thus, in
fnding that there was no longer a need to
conduct a hearing before rendering a
judgment of the case on the merits, Cuyuca
cannot be said to have committed an error.
The NLRC also ruled that no error
could be imputed to Cuyuca when she
found that the petitioner did not comply
with the two-notice requirement that (a)she
was notifed of the charges against her,
(b)and the notice of dismissal was sent to
her.
Motion for reconsideration was
denied.
Dissatisfed, the petitioner fled a
petition for certiorari under Rule 65 of the
Rules of Court before the Court of Appeals.
The petitioner alleged therein that Cuyuca
committed a grave abuse of discretion when
she rendered a decision without even
conducting a formal hearing to enable the
petitioner to cross-examine the private
respondent and her witnesses. It reiterated
the contention that it had acquired a vested
right to a formal hearing when Tumanong
granted its motion therefore. The CA
rendered judgment afrming the decision of
the NLRC and the fnding of both the NLRC
and Cuyuca that the private respondent
was deprived of due process and was thus
illegally dismissed. The CA ruled as laid
down in Section 4, Rule 5 of the new Rules
of Procedure of the NLRC, a formal hearing
is not required in proceedings before the
labor arbiter; hence, a failure on the part of
Cuyuca to conduct a formal hearing prior
to the rendition of judgment did not give
rise to a grave abuse of discretion on her
part. Moreover, the petitioner was able to
appeal the decision of the labor arbiter to
the NLRC; it cannot thus contend that it
was deprived of its right to defend itself.
The petitioners motion for
reconsideration was denied in CA. The
petitioner forthwith fled the instant
petition.
Issue: Whether or not petitioner was
deprived of due process
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Rulings: The Court agree with the CA that
the petitioner did not have a vested right to
a formal hearing simply and merely
because Tumanong granted its motion and
set the case for hearing. Pursuant to
section 5, Rule 5 of the New Rules of
Procedure of the NLRC, the labor arbiter
has the authority to determine whether or
not there is necessity to conduct formal
hearings in cases brought before him for
adjudication. The holding of a formal
hearing or trial is discretionary with the
labor arbiter and is something that the
parties cannot demand as a matter of
right. It is entirely within his authority
to decide a labor case before him based
on the position papers and supporting
documents of the parties, without trial
or formal hearing. The requirements of
due process are satisfed when the
parties are given the opportunity to
submit position papers wherein they are
supposed to attach all the documents
that would prove their claim in case it be
decided that no hearing should be
conducted or was necessary. The order of
Labor Arbiter Tumanong granting the
petitioners motion for a hearing of the case
was not conclusive and binding on Cuyuca
who had the discretion either to hear the
case was not conclusive and binding on
Cuyuca who had the discretion either to
hear the case before deciding it, or to forego
with the hearing if, in her view, there was
no longer a need therefore as the case could
be resolved on its merits based on the
records.
We afrm the fnding of the CA that the
private respondent was illegally dismissed.
In order to efect a valid dismissal, the
law requires that (a) there be just and
valid cause as provided under Article
282 of the Labor Code; and (b) the
employee be aforded on opportunity to
be heard and defend himself.
As stated by the CA, the petitioner
had failed to show that it had complied
with the two-notice requirement: (a) a
written notice containing a statement of
the cause for the termination to aford
the employee ample opportunity to be
heard and defend himself with the
assistance of his representative, if he so
desires; (b) if the employer decides to
terminate the services of the employee,
the employer must notify him in writing
of the decision to dismiss him, stating
clearly the reason therefore. Hence, the
petition was DENIED for lack of merit.
Labor cases, certifcation of forum
shopping:
HUNTINGTON STEEL PRODUCTS, INC. &
SERAFIN NG, vs. NATIONAL LABOR
RELATIONS COMMISSION, ORBASE et.
al,
G.R. No. 158311. November 17, 2004
Facts:An Illegal dismissal complaint with
claim for damages was initiated by
respondent Jaime Orbase and eleven others
against petitioners Huntington Steel
Products, Inc. and its President, Serafn Ng.
Petitioner fled a Motion to Dismiss
assailing the private respondents failure to
comply with the requirements of Revised
Circular No. 28-91as implemented by
Supreme Court Administrative Circular No.
04-94 averring that the Complaint which
private respondents fled in the Arbitration
Branch of the NLRC lacked a certifcation of
non-forum shopping.
Petitioners Motion to Dismiss was
granted by the Labor Arbiter.
Petitioners fled a petition for
certiorari before the Court of
Appeals which denied the petition.
Issue: Whether the case should be
dismissed by Labor Arbiter for failure to
comply with Supreme Court Administrative
Circular No. 04-94 on certifcation of non-
forum shopping
Held:Compliance with the Circular was
mandatory even in labor cases. The
certifcate of non-forum shopping as
provided by this Court Circular 04-94 is
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mandatory and should accompany
pleadings fled before the NLRC.
Nevertheless, in Loyola v. Court of
Appeals, The Court held that substantial
compliance with the requirement of
certifcate of non-forum shopping is
sufcient. Here, we fnd that the
certifcation of non-forum shopping was not
fled simultaneously with the initiatory
pleading; but the fling of the certifcation
within the reglementary period of fling the
initiatory pleading was substantial
compliance.
The certifcation is a mandatory part
of an initiatory pleading, i.e., the complaint,
and its omission may be excused only upon
manifest equitable grounds proving
substantial compliance therewith.
In the present case, the respondents
reasoned that they failed to comply with the
Circular because the complaint form
supplied by the Labor Arbiter did not
contain the required undertaking. They
simply flled up the blanks therein. Hence,
respondents should not be faulted for not
having the certifcation of non-forum
shopping in their complaint.
The strict application of the Circular
in the instant case would be contrary to the
goals of the Rules of Civil Procedure that
is, just, speedy and inexpensive disposition
of every action and proceeding. Technical
rules of procedure in labor cases are not to
be strictly applied if the result would be
detrimental to the working-man.
Labor cases, memorandum of appeal:
SUNRISE MANNING AGENCY, INC. vs.
NATIONAL LABOR RELATIONS
COMMISSION and RUEL ZARASPE
G.R. No. 146703. November 18, 2004
Facts:Private respondent Ruel Zaraspe
was hired as Chief Cook of petitioners
vessel M.V. Nikolaos.
Zeraspes services were terminated by
petitioner due to undesirable acts involving
insubordination, inefciency and neglect of
duty, and theft. Aggrieved by his dismissal,
private respondent fled an illegal dismissal
case with the National Labor Relations
Commission (NLRC).
The labor arbiter found the
dismissal legal and accordingly dismissed
the complaint.On appeal by private
respondent, the NLRC reversed the Labor
Arbiters decision.
Petitioner fled a Motion for
Reconsideration which only raised the
procedural issue of private respondents
failure to serve it a copy of his
memorandum of appeal.
This motion was denied by NLRC.
Petitioner fled a petition for
certiorari with the Court of Appeals which
afrmed the resolutions of the NLRC.
Issues: Whether or not the Labor Arbiters
decision became fnal and executory for
failure of respondent to serve a copy of his
memorandum of appeal to petitioner
Whether or not the petitioners right
to due process was violated for it was not
given the opportunity to refute private
respondents allegations in his
memorandum of appeal
Held:Mere failure to serve a copy of a
memorandum of appeal upon the opposing
party does not bar the NLRC from
entertaining an appeal.
Respondent's failure to furnish copy
of his memorandum appeal to petitioner is
not a jurisdictional defect and does not
justify dismissal of the appeal.
The failure to give a copy of the
appeal to the adverse party was a mere
formal lapse, an excusable neglect.
SC acts on the petitions and simply
require the petitioners to comply with the
rule
While petitioner was not furnished a
copy of private respondents memorandum
of appeal, it eventually became a
participant in the proceedings on appeal
when it fled a motion for reconsideration of
the NLRC Decision.
Petitioner cannot complain that it
has been denied its right to due process by
having been allegedly deprived of the
opportunity to answer respondent's appeal
on account of the latter's failure to furnish
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the former with a copy of his memorandum
of appeal.
Petitioner had already the
opportunity to answer respondent's appeal
when he fled a motion for reconsideration
of the earlier decision of the NLRC.
In limiting its motion for
reconsideration to procedural or technical
issues, petitioner efectively waived its
opportunity to be heard on the merits of
the case.
It was thus not deprived of its right
to due process.
Deprivation of due process cannot
be successfully invoked where a party was
given the chance to be heard on his motion
for reconsideration, as in the instant case,
when private respondents were given the
opportunity to present their side when they
fled a letter of reconsideration of NLRC
decision.
The essence of due process is simply
an opportunity to be heard, or as applied to
administrative proceedings, an opportunity
to explain one's side or an opportunity to
seek a reconsideration of the action or
ruling complained of. The requirements are
satisfed when the parties are aforded fair
and reasonable opportunity to explain their
side of the controversy at hand. What is
frowned upon is the absolute lack of notice
or hearing.
Labor cases, appeal bond
Buenaobra vs. Lim King Guan
Facts: Petitioners were employees of private
respondent. Petitioners fled a case against
respondent for unfair labor practice. Labor
arbiter ruled in favor of the petitioners.
Respondents fled a memorandum
on appeal and a motion to dispense with
the posting of a cash or surety appeal bond.
NLRC granted such motion.
Petitioners moved for reconsideration on the
ground that timely posting of an appeal
bond is mandatory for the perfection of the
appeal.
Issue: Whether or not the timely posting of
an appeal bond is mandatory for the
perfection of the appeal.
Held: The provision of Art.223 of the Labor
Code requiring the posting of bond on
appeals involving awards must be given
liberal interpretation in the light of the
desired objective of resolving controversies
on the merits, if only to achieve substantial
justice. Technicalities have no room in labor
cases where the Rules of Court is applied
only in a supplemental manner and only to
efectuate objectives of the Labor Code.
Labor cases, verifcation
LORETA TORRES, ALCAIDE, ROSARIO
MABANA, ET AL. vs. SPECIALIZED
PACKAGING DEVELOPMENT
CORPORATION and/or ALFREDO GAO
(President) and PETER CHUA (General
Manager) ET AL.
G.R. No. 149634. July 6, 2004
Facts:Petitioners were employees of the
Specialized Packaging Development
Corporation (SPDC). They were laid of from
they claim for illegal dismissal. It appears
that there are (25) principal parties-
petitioners who were former workers of
private respondent Corporation and
complainants in case as a result of their
being laid-of from employment. Perusing
the verifcation however, it was executed
and signed by only two (2) petitioners,
namely, Evelyn Dolom and Criselina
Anquilo. To allow only two (2) of them to
execute the required verifcation and
certifcation, without the proper
authorization of the others, would render
Sec. 5, Rule 7 of the 1997 Rules of Civil
Procedure inutile in avoiding the practice of
non-forum shopping because the other
principal petitioners, who did not execute
and sign the same. The Petitioner raised
the case to the CA but the same was
dismissed by the CA, which found the
verifcation and the certifcation against
forum shopping to be either defective or
insufcient. Hence the Petition was elevated
to the S.C.
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Issue: Whether or not the lack of necessary
required signature for the verifcation on
forum shopping committed by the 25
principal parties-petitioner were fatal to the
denial of the case.
Held: The purpose of requiring
verifcation is to secure an assurance
that the allegations of the petition have
been made in good faith; or are true and
correct, not merely speculative, this
requirement is simply a condition
afecting the form of pleadings, and
noncompliance therewith does not
necessarily render it fatally defective.
Verifcation is only a formal, not a
jurisdictional requirement. These two
signatories are unquestionably real parties
in interest, who undoubtedly have sufcient
knowledge and belief to swear to the truth
of the allegations in the Petition. This
verifcation is enough assurance that the
matters alleged therein have been made
in good faith or are true and correct, not
merely speculative. The requirement of
verifcation has thus been substantially
complied with.
Petitioners need only show, therefore,
that there was reasonable cause for the
failure of some of them to sign the
certifcation against forum shopping, and
that the outright dismissal of the Petition
would defeat the administration of justice.
Petition is GRANTED.
CBA, Signing bonus:
PHILACOR vs. Court of Appeals
G.R. No. 149434 June 3, 2004
Facts: Petitioner is a domestic corporation
engaged in the business of manufacturing
refrigerators, freezers and washing
machines. Respondent United Philacor
Workers Union NAFLU is the duly elected
collective bargaining representative of the
rank-and-fle employees of petitioner.
During the collective bargaining
negotiations in 1997 petitioner ofered to
each employee and early conclusion
bonus. Upon conclusion of the CBA
negotiations, petitioner accordingly gave
this early signing bonus. In view of the
expiration of this CBA, respondent union
sent notice to petitioner of its desire to
negotiate a new CBA. Petitioner and
respondent union began their negotiations.
Respondent union expressed dissatisfaction
at the outcome of the negotiations and
declared a deadlock. A conciliation and
mediation conference (NCMB) was held but
CBA negotiation between petitioner and
respondent union failed notwithstanding
the intervention of the NCMB. Respondent
union went on strike for 11 days and
blocked the ingress to and egress from
petitioners 2 work plants. The labor
dispute had to be referred to the Secretary
of Labor and Employment because neither
of the parties was willing to compromise
their respective positions. Thereafter DOLE
ordered the striking workers to return to
work and the award of the signing bonus.
Petitioner fled a Motion for Reconsideration
which was denied thus it fled a petition for
certiorari before CA which later dismissed
the petition
Issue: Whether or not the award erroneous
Ruling: The SC on Petition for review held
that the award for a signing bonus should
partake the nature of an incentive and
premium for peaceful negotiations and
amicable resolution of disputes which
apparently are not present in the instant
case. Two things militate against the grant
of the signing bonus: frst, the non-
fulfllment of the condition for which it was
ofered, i.e., the speedy and amicable
conclusion of the CBA negotiations; and
second, the failure of respondent union to
prove that the grant of the said bonus is a
long established tradition or a regular
practice on the part of petitioner. While we
do not fault any one party for the failure of
the negotiations, it is apparent that there
was no more goodwill between the parties
and that the CBA was clearly not signed
through their mutual eforts alone. Hence,
the payment of the signing bonus is no
longer justifed and to order such payment
would be unfair and unreasonable for
petitioner.
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A bonus is not a demandable and
enforceable obligation. True, it may
nevertheless be granted on equitable
considerations as when the giving of
such bonus has been the company's long
and regular practice. To be considered a
regular practice, however, the giving of
the bonus should have been done over a
long period of time, and must be shown
to have been consistent and deliberate.
In the case at bar the giving of such bonus
cannot be deemed as an established
practice considering that the same was
given only once, that is, during the 1997
CBA negotiation.
CBA, Duty to bargain collectively
GENERAL MILLING CORPORATION vs.
COURT OF APPEALS, GENERAL MILLING
CORPORATION INDEPENDENT LABOR
UNION (GMC-ILU), and RITO MANGUBAT
G.R. No. 146728 February 11, 2004
Facts: In its two plants located at Cebu
City and Lapu-Lapu City, petitioner General
Milling Corporation (GMC) employed 190
workers. They were all members of private
respondent General Milling Corporation
Independent Labor Union, a duly certifed
bargaining agent. GMC and the union
concluded a collective bargaining agreement
(CBA), which included the issue of
representation efective for a term of three
years. The CBA was efective for three years
retroactive to December 1, 1988. Hence, it
would expire on November 30, 1991.On
November 29, 1991, a day before the
expiration of the CBA, the union sent GMC
a proposed CBA, with a request that a
counter-proposal be submitted within ten
(10) days.
As early as October 1991, however,
GMC had received collective and individual
letters from workers who stated that they
had withdrawn from their union
membership, on grounds of religious
afliation and personal diferences.
Believing that the union no longer had
standing to negotiate a CBA, GMC did not
send any counter-proposal.
On December 16, 1991, GMC wrote
a letter to the unions ofcers, Rito
Mangubat and Victor Lastimoso. The letter
stated that it felt there was no basis to
negotiate with a union which no longer
existed, but that management was
nonetheless always willing to dialogue with
them on matters of common concern and
was open to suggestions on how the
company may improve its operations. In
answer, the union ofcers wrote a letter
dated December 19, 1991 disclaiming any
massive disafliation or resignation from
the union and submitted a manifesto,
signed by its members, stating that they
had not withdrawn from the union. On
January 13, 1992, GMC dismissed Marcia
Tumbiga, a union member, on the ground of
incompetence. The union protested and
requested GMC to submit the matter to the
grievance procedure provided in the CBA.
GMC, however, advised the union to "refer
to our letter dated December 16, 1991.
The union fled a case for unfair
labor practices against GMC for refusal to
bargain collectively, the Labor Arbiter
dismissed the complaint and instead
ordered that a certifcation election be held
to determine if the union still has the
majority of the workers. On appeal, the
NLRC ser aside the Labor Arbiters ruling
stating that Art. 253-A of the Labor Code
fxed the terms of the CBA and ordered
GMC to abide with the proposed draft CBA
of the union until November 30, 1993 or
two (2) years after the expiration of the
CBA. On GMCs motion for reconsideration,
the NLRC set aside its decision of January
30, 1998, through a resolution dated
October 6, 1998. It found GMCs doubts as
to the status of the union justifed and the
allegation of coercion exerted by GMC on
the unions members to resign unfounded.
Hence, the union fled a petition for
certiorari before the Court of Appeals. The
CA granted the petition, hence this appeal.
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Issue/s: Whether or not the Court of
Appeals acted with grave abuse of
discretion amounting to lack or excess of
jurisdiction in fnding GMC guilty of unfair
labor practice for violating the duty to
bargain collectively and/or interfering with
the right of its employees to self-
organization
Whether or not the Court of Appeals
acted with grave abuse of discretion in
imposing upon GMC the draft CBA
proposed by the union for two years to
begin from the expiration of the original
CBA?
Held: The law mandates that the
representation provision of a CBA should
last for fve years. The relation between
labor and management should be
undisturbed until the last 60 days of the
ffth year. Hence, it is indisputable that
when the union requested for a
renegotiation of the economic terms of the
CBA on November 29, 1991, it was still the
certifed collective bargaining agent of the
workers, because it was seeking said
renegotiation within fve (5) years from the
date of efectivity of the CBA on December
1, 1988. The unions proposal was also
submitted within the prescribed 3-year
period from the date of efectivity of the
CBA, albeit just before the last day of said
period. It was obvious that GMC had no
valid reason to refuse to negotiate in good
faith with the union. For refusing to send a
counter-proposal to the union and to
bargain anew on the economic terms of the
CBA, the company committed an unfair
labor practice under Article 248 of the
Labor Code, which provides that: (g) To
violate the duty to bargain collectively as
prescribed by this Code;
ART. 252. Meaning of duty to bargain
collectively. The duty to bargain collectively
means the performance of a mutual
obligation to meet and convene promptly and
expeditiously in good faith for the purpose of
negotiating an agreement....
Under Article 252 above cited,
both parties are required to perform
their mutual obligation to meet and
convene promptly and expeditiously in
good faith for the purpose of negotiating
an agreement. The union lived up to this
obligation when it presented proposals for a
new CBA to GMC within three (3) years
from the efectivity of the original CBA. But
GMC failed in its duty under Article 252.
What it did was to devise a fimsy excuse,
by questioning the existence of the union
and the status of its membership to prevent
any negotiation. It bears stressing that the
procedure in collective bargaining
prescribed by the Code is mandatory
because of the basic interest of the state in
ensuring lasting industrial peace. We hold
that GMCs refusal to make a counter-
proposal to the unions proposal for CBA
negotiation is an indication of its bad faith.
Where 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.
STANDARD CHARTERED BANK
EMPLOYEES UNION (NUBE) v. NIEVES
CONFESSOR.
Facts:The Standard Chartered Bank and
its union signed a fve year collective
bargaining agreement (CBA) with a
provision to renegotiate the terms thereof
on the third year.
After the initiation of the collective
bargaining process, with the inclusion of
Umali, the President of the NUBE, the
federation to which the union was afliated,
in the unions negotiating panel, the
negotiation pushed through.
The parties negotiated. However, for
the provisions on signing bonuses and
uniforms, the Union and the Bank failed to
agree.
The union declared a deadlock and
fled a Notice of Strike before the NCMB.
The bank fled a complaint for ULP and
damages before the NLRC.
The bank alleged that the union
violated its duty to bargain as it did not
bargain in good faith. Further, the union
violated its no-strike no lock-out clause by
fling a notice of strike before the NCMB.
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The Secretary of Labor and
Employment, Nieves Confesor, ordered the
Standard Chartered Bank and the Union to
execute a CBA incorporating the
dispositions contained therein.
It shall retroact and remain efective
for two years or until such time as a new
CBA has superseded it. All provisions in the
expired CBA not expressly modifed or not
passed upon are deemed retained while all
new provisions which are being demanded
by either party are deemed retained, but
without prejudiced to such agreements as
the parties may have arrived.
Issue:Whether or not, there was a ULP
committed by the employees.
Held: The duty to bargain does not
compel either party to agree to a proposal
or require the making of a concession.
Hence, the parties failure to agree did not
amount to ULP under Art. 248(g) for
violation of the duty to bargain.
While the refusal to furnish
requested information is in itself an unfair
labor practice but request must be written
request as required by the Labor Code.
Wages, lien
SPECIAL STEEL PRODUCTS, INC. V.
VILLAREAL
434 SCRA 19
Facts: Lutgardo Villareal and Frederick So,
worked for Special Steel as assistant
sales manager and salesman,
respectively.
Villareal obtained a car loan from
the Bank of Commerce, with Special Steel
as surety. Later on, he resigned.
Special Steel sponsored So, to
attend a training course in Austria, as a
reward for his outstanding sales
performance. When he returned nine
months thereafter, the company directed
him to sign a memorandum providing that
BOHLER, Special Steels principal company,
requires trainees from Austria to continue
working with the company for a period of
three years after the training. Otherwise,
the trainee shall refund to BOHLER
$6,000.00.
Two years later, So resigned from the
company.
The two demanded from the
company payment of their separation
benefts and other benefts, but the
company refused and instead withheld their
13
th
month pay and other benefts.
The labor arbiter rendered judgment
in favor of the two employees and was
afrmed by the NLRC.
Issue: May an employer withhold its
employees wages and benefts as lien
to protect its interest.
Held: Article 116 of the Labor Code
provides that it shall be unlawful for
any person, directly or indirectly, to
withhold any amount from the wages of
a worker xxx.
The company has no legal authority
to withhold its employees 13
th
month pay
and other benefts. What an employee has
worked for, his employer must pay.
Wage distortion;
BANKARD EMPLOYEES UNION-WATO vs.
NLRC, BANKARD
G.R. No. 140689 February 17,2004
Facts: Bankard, Inc. (Bankard) classifes its
employees by levels, to wit: Level I, Level II,
Level III, Level IV, and Level V. On May 28,
1993, its Board of Directors approved a
New Salary Scale, made retroactive to
April 1, 1993, for the purpose of making its
hiring rate competitive in the industrys
labor market. The New Salary Scale
increased the hiring rates of new
employees, to wit: Levels I and V by one
thousand pesos (P1,000.00), and Levels II,
III and IV by nine hundred pesos (P900.00).
Accordingly, the salaries of employees who
fell below the new minimum rates were also
adjusted to reach such rates under their
levels.
Bankards move drew the Bankard
Employees Union-WATU (petitioner), the
duly certifed exclusive bargaining agent of
the regular rank and fle employees of
Bankard, to press for the increase in the
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salary of its old, regular employees.
Bankard took the position, however,
that there was no obligation on the part of
the management to grant to all its
employees the same increase in an across-
the-board manner.
As the continued request of petitioner
for increase in the wages and salaries of
Bankards regular employees remained
unheeded, it fled a Notice of Strike on
August 26, 1993 on the ground of
discrimination and other acts of Unfair
Labor Practice (ULP).
A director of the National Conciliation
and Mediation Board treated the Notice of
Strike as a Preventive Mediation Case
based on a fnding that the issues therein
were not strikeable.
Petitioner fled another Notice of Strike
on October 8, 1993 on the grounds of
refusal to bargain, discrimination, and
other acts of ULP - union busting. The
strike was averted, however, when the
dispute was certifed by the Secretary of
Labor and Employment for compulsory
arbitration.
The NLRC, Find no wage distortion,
dismissed the case for lack of merit.
Petitioners motion for reconsideration
denied.
Petitioner thereupon fled a petition for
certiorari before this Court, docketed as
G.R. 121970. In accordance with its ruling
in St. Martin Funeral Homes v. NLRC(295
SCRA 494), the petition was referred to the
Court of Appeals which, by October 28,
1999, denied the same for lack of merit.
Hence, the present petition.
Issue: WHETHER OR NOT THE
UNILATERAL ADOPTION BY AN
EMPLOYER OF AN UPGRADED SALARY
SCALE WITHOUT INCREASING THE RATES
OF OLD EMPLOYEES resulted in wage
distortion within the contemplation of
Article 124 of the Labor Code.
Ruling: The issue of whether wage
distortion exists being a question of fact
that is within the jurisdiction of quasi-
judicial tribunals, and it being a basic rule
that fndings of facts of quasi-judicial
agencies, like the NLRC, are generally
accorded not only respect but at times even
fnality if they are supported by substantial
evidence, as are the fndings in the case at
bar, they must be respected. For these
agencies have acquired expertise, their
jurisdiction being confned to specifc
matters.
It is thus clear that there is no
hierarchy of positions between the newly
hired and regular employees of Bankard,
hence, the frst element of wage distortion is
wanting.
Apart from the fndings of fact of the
NLRC and the Court of Appeals that some
of the elements of wage distortion are
absent, petitioner cannot legally obligate
Bankard to correct the alleged wage
distortion as the increase in the wages and
salaries of the newly-hired was not due to a
prescribed law or wage order.
The wordings of Article 124 are clear. If
it was the intention of the legislators to
cover all kinds of wage adjustments, then
the language of the law should have been
broad, not restrictive as it is currently
phrased:
Article 124. Standards/Criteria for
Minimum Wage Fixing.
x x x
Where the application of any prescribed wage
increase by virtue of a law or Wage Order
issued by any Regional Board results in
distortions of the wage structure within an
establishment, the employer and the union shall
negotiate to correct the distortions. Any dispute
arising from the wage distortions shall be
resolved through the grievance procedure under
their collective bargaining agreement and, if it
remains unresolved, through voluntary
arbitration.
Holiday Pay:
ASIAN TRANSMISSION CORP. vs. COURT
OF APPEALS
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G.R. No. 144664 March 15, 2005
Facts: The DOLE through Undersecretary
Cresenciano Trajano issued an Explanatory
Bulletin dated March 11, 1993 wherein it
clarifed that employees are entitled to
200% of their basic wage on April 9, 1993,
whether unworked, which apart from being
a Good Friday is also Araw ng Kagitingan
(both are legal holiday). Said Bulletin was
reproduced on January 23, 1998 when
April 9, 1998 was both Maundy Thursday
and Araw ng Kagitingan. Despite the
explanatory bulletin, petitioner opted to pay
its daily paid wage only 100% of their basic
pay on April 9, 1998. Respondent Bisig ng
Asian Transmission Labor (BATLU)
protested.
The ofce of the Voluntary
Arbitration rendered a decision directing a
petitioner to pay its covered employees
200% and not just 100% of their regular
daily wages for the unworked April 9,1998
which cover two(2) holidays. CA upheld the
decision of Voluntary Arbitrator. Hence, this
petition
Issue: Whether or not Asian Transmission
Corporation can be hold liable for 200%
wages, unworked which covers two regular
holiday
Ruling: YES. Holiday pay is a legislated
beneft enacted or part of the
constitutional imperative that the state
shall aford protection to labor. Its
purpose is not merely to prevent
dimunition of the monthly income of the
workers on account of work interruption.
In other words, although the worker is
forced to take a rest, he earns what he
should earn, that is, his holiday pay. It is
also intended to enable the worker to
articipate in the national celebrations held
during the days identifed as with great
historical and cultural signifcance.
Independence Day (June 12), Araw
ng Kagitingan (April 9), National Heroes
Day(last Sunday of August), Bonifacio
Day(November 30) and Rizal Day (December
30) were declared national holidays to
aford Filipinos with a recurring
opportunity to commemorate the heroism of
the Filipino people, promote national
identity and deepen the spirit of patriotism.
Labor Day (May 1) is a day traditionally
reserved to celebrate the contributions of
the working class to the development of the
nation, while the religious holidays
designated in EO No.203 allow the worker
to celebrate his faith with his family.
As refected above, Article 94 of
the Labor Code, as amended, afords a
worker the enjoyment of ten paid regular
holidays. The provision is mandatory
regardless whether an employee is paid
on a monthly or daily basis. Unlike a
bonus, which is a management
prerogative, holiday pay is a statutory
beneft demandable under the law. Since
a worker is entitled to the enjoyment of ten
paid regular holidays the fact that two
holidays toll on the same date should not
operate to reduce to nine the ten holiday
pay benefts a worker is entitled to receive.
Separation Pay:
CAMA vs. JONIS FOOD SERVICES, INC.
GR No. 153021 March 10, 2004
FACTS: The respondent Jonis is a
corporation engaged in the cofee shop and
restaurant business with several branches
or outlets. Co-respondent Feliciano is the
President and General Manager of said
corporation. Petitioners were employees of
the said corporation.
The corporation experienced serious
business losses prompting it and leaving it
no choice but to close all its branches and
outlets. One month before the target
closure date of its remaining outlets, Jonis
sent notices of closure to the DOLE and to
the complainants/petitioners who were
then employed at the last remaining outlets
of the respondent corporation.
The petitioners thereafter fled a
petition for illegal dismissal, separation pay,
service incentive leave pay, 13
th
month pay,
attorneys fees, remittance of SSS and Pag-
Ibig contributions, and refund of excess
withholding taxes against Jonis.
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The Labor Arbiter declared that
Jonis is not guilty of illegal dismissal but
the petitioners were entitled to separation
pay. The Labor Arbiter ruled that though
the corporation sufered business losses,
nonetheless, he did not consider these
serious enough so as to warrant denial of
the petitioners separation pay. In an appeal
to the NLRC, the decision of the Labor
Arbiter was upheld. Respondent company
appealed to the CA and the CA reversed the
decision of the Arbiter and the NLRC that
Jonis is required to give the petitioners
separation pay.
ISSUE: Whether or not the petitioners are
entitled to separation pay even if the cause
of their termination was serious business
losses and fnancial reverses
HELD: It was duly established that
corporation sufered losses which let it to
close all its outlets. Using ratio analyses of
the fnancial statements of the respondent
corporation, it was found out and it can be
said that the solvency position of the latter
was indeed poor. The greater proportion of
assets of the corporation was being
provided for by creditors rather than its
owners. The situation became worse, with
long-term debt accounting largely for its
assets, hence there was a huge capital
defcit.
From the foregoing analyses, there
is inadequate and unsatisfactory proft ratio
creating greater losses than proft. It
becomes clear now that given these losses,
the Jonis found no other recourse but to
shut down its outlets. And eventually they
have no other option but to lay of their
employees.
The Constitution, while afording
full protection to labor, nonetheless,
recognizes the right of enterprises to
reasonable returns on investments, and to
expansion and growth. In line with this
protection aforded too business by
fundamental law, Article 283 of the Labor
Code clearly makes a policy distinction. It is
only in instances of retrenchment to
prevent losses and in cases of closures or
cessation of operations of establishment or
undertaking not due to serious business
losses or fnancial reverses that employees
whose employment has been terminated as
a result are entitled to separation pay. In
other words, Article 283 of the Labor Code
does not obligate an employer to pay
separation pay benefts when the closure is
due to serious losses like in the present
case. To require an employer to be generous
when it is no longer in a position to do so,
in our view, would be unduly oppressive,
unjust, and unfair to the employer. Ours is
a system of laws, and the law in protecting
the rights of the working man, authorizes
neither the oppression nor self-destruction
of the employer. Hence, we fnd that the CA
did not err when it decreed that petitioners
herein are not entitled to separation pay
under the same Labor Code article.
Strike:
PINERO VS. NLRC
G.R. NO. 149610, AUG. 20, 2004
Facts: Dumaguete Cathedral College, Inc.
was the employer of the members of the
labor union DUCACOFSA-NAFTEU. The
Union and the College failed to conclude
another CBA after the expiration of the
previous CBA.
The Union fled a Notice of Strike with
the DOLE on the ground of refusal to
bargain. The Union conducted a strike
without submitting to the Dole the required
results of the strike vote obtained from the
members of the Union. The College fled
with the DOLE a complaint to declare the
strike illegal and to dismiss the ofcers of
the Union. Pinero was the President.
The Labor Arbiter declared the strike
illegal and declared the Union ofcers to
have lost their employment. While the case
was pending with the NLRC, an agreement
was made between the Union and the
College. The Ofcers were all allowed to
resume service without prejudice to the
outcome of the case. NLRC afrmed the
Labor Arbiters decision. CA also afrmed
NLRC. Thus, the petition
Issue: Whether or not the strike was illegal
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Held: Yes, Under the Labor Code, The
requirements of a valid strike are as
follows: 1) notice of strike fled with the
DOLE 30 days before the intended date
thereof, or 15 days in case of ULP; 2)
strike vote approved by a majority of the
total union membership in the
bargaining unit concerned obtained by a
secret ballot in a meeting called for such
purpose; and 3) notice given to the DOLE
of the results of the voting at least 7
days before the intended strike. These
requirements are mandatory and failure
of a union to comply therewith renders
the strike illegal.
The Court notes that petitioner
Pinero had already retired from service
rendering his dismissal from service moot
and academic. However, in view of the
propriety of his termination due to illegal
strike, he is no longer entitled to payment of
retirement benefts.
Illegal strike
ELIZABETH C. BASCON and NOEMI V.
COLE, vs. COURT OF APPEALS, METRO
CEBU COMMUNITY HOSPITAL, INC., and
GREGORIO IYOY
G.R. No. 144899 February 5, 2004
Facts: The petitioners were employees of
private respondent Hospital and members
of the NAMA-MCCH, a labor union of
MCCH employees. The instant controversy
arose from an intra-union confict between
the NAMA-MCCH and the National Labor
Federation (NFL), the mother federation of
NAMA-MCCH. NAMA-MCCH asked MCCH
to renew their Collective Bargaining
Agreement (CBA). NFL, however, opposed
this move by its local afliate. Mindful of
the apparent intra-union dispute, MCCH
decided to defer the CBA negotiations until
there was a determination as to which of
said unions had the right to negotiate a
new CBA. Believing that their union was
the certifed collective bargaining agent, the
members and ofcers of NAMA-MCCH
staged a series of mass actions inside
MCCHs premises.
The DOLE issued certifcations
stating that NAMA-MCCH was not a
registered labor organization. This fnding,
however, did not deter NAMA-MCCH from
fling a notice of strike. Said notice was,
however, disregarded by the NCMB for want
of legal personality of the union. The MCCH
management received reports that
petitioners participated in NAMA-MCCHs
mass actions. Consequently, notices were
served on all union members, petitioners
included, asking them to explain in writing
why they were wearing red and black
ribbons and roaming around the hospital
with placards.
Petitioner was dismissed from
employment because of her participation in
the mass action. Bascon and Cole fled a
complaint for illegal dismissal. They denied
having participated in said mass actions or
having received the notices (1) enjoining
them from wearing armbands and putting
up placards, with warning that disciplinary
measure would be imposed, and (2)
informing them of the schedule of hearing.
They admit, however, to wearing armbands
for union identity while nursing patients as
per instruction of their union leaders. The
Labor Arbiter found the termination
complained to be valid and legal, and
dismissed the complaint. The Labor Arbiter
held that petitioners were justly dismissed
because they actually participated in the
illegal mass action. It also concluded that
petitioners received the notices of hearing,
but deliberately refused to attend the
scheduled investigation. On appeal, the
NLRC reversed the ruling of the Labor
Arbiter. But the CA reversed the ruling of
the NLRC.
Issue: Whether or not petitioners were
validly terminated for (1) allegedly
participating in an illegal strike.
Held: The Supreme Court said that
petitioner was not validly terminated. While
a union ofcer can be terminated for mere
participation in an illegal strike, an
ordinary striking employee, like petitioners
herein, must have participated in the
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commission of illegal acts during the strike.
There must be proof that they committed
illegal acts during the strike. But proof
beyond reasonable doubt is not required.
Substantial evidence, which may justify the
imposition of the penalty of dismissal, may
sufce.
In case at bar, the Court of Appeals
found that petitioners actual participation
in the illegal strike was limited to wearing
armbands and putting up placards. There
was no fnding that the armbands or the
placards contained ofensive words or
symbols. Thus, neither such wearing of
armbands nor said putting up of placards
can be construed as an illegal act. In fact,
per se, they are within the mantle of
constitutional protection under freedom of
speech.
Evidence on record shows that
various illegal acts were committed by
unidentifed union members in the course
of the protracted mass action. But it cannot
hold petitioners responsible for acts they
did not commit. The law, obviously
solicitous of the welfare of the common
worker, requires, before termination may be
considered, that an ordinary union member
must have knowingly participated in the
commission of illegal acts during a strike.
Samahang Manggagawa sa Sulpicio Lines,
Inc.-NAFLU.et.al. vs. Sulpicio Lines
Facts: Respondent and petitioner union are
in the process of negotiation on the CBAs
economic provisions. But this negotiation
remained at stalemate.
On March 20, 1994 upon
respondents petition, Sec. Confessor issued
an order, assuming jurisdiction over the
labor dispute pursuant to Art.263 (g) of the
Labor Code.
On May 23,1994, union fled with
NCMB a second notice of strike. Petitioner
union immediately conducted a strike vote.
Thus, on that same day, members of
petitioner union did not report to work and
proceeded with the strike.
As a remedial measure, Sec.
Confessor issued an order directing the
striking employees to return to work and
certifying the labor dispute to NLRC for
compulsory arbitration.
Respondent company fled with the
NLRC a complaint for Illegal strike/
clearance for termination to which NLRC
declared the strike of Petitioners members
illegal.
Issue: Whether or not the acts of the union
members constitute an illegal strike.
Held: There is no showing that the
petitioner union observed the 7-day strike
ban and that the result of the strike vote
were submitted by the petitioners to DOLE
at least 7 days before the strike.
Participants in an illegal strike
forfeit their employment status. It is worth
reiterating that the strike votes to the
Department of Labor and Employment at
least 7 days prior thereto. Also, petitioner
failed to prove that respondent company
committed any unfair labor practice. Amid
this background, the participation of the
union ofcers in an illegal strike forfeits
their employment status.
When the Secretary of Labor and
Employment certifes the labor dispute to
the NLRC for compulsory arbitration, the
latter is concomitantly empowered to
resolve all questions and controversies
arising therefrom including cases otherwise
belonging originally and exclusively to the
Labor Arbiter.
Strike, Compromise agreements:
Filcon Manufacturing Co. v. LMF-LMLC
GR 150166, July 26, 2004
Facts: Petitioner (Filcon) is a domestic
corporation engaged in the manufacture of
Converse rubber shoes. Its factory located
at General Molina, Parang, Marikina.
In 1989, it employed 1,000 workers.
Respondent Lakas Manggagawa sa Filcon-
Lakas Manggagawa Labor Center is one of
the legitimate labor organizations of the
rank-and-fle employees of the Filcon. On
the other hand, the Shoe Workers Assoc.
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and Tech.(SWAT) is the exclusive bargaining
agent of such rank-and-fle employees.
The dispute started when 11
employees of the Filcon staged a strike after
they were terminated by the latter.
Thereafter, employees fled a
complaint for illegal dismissal with the
National Arbitration Branch of the NLRC.
In turn, Filcon fled a complaint
against the said employees to declare the
strike illegal.
Pending the resolution of the (2)
complaints, the respondent union-Bisig
Manggagawa and Kampil Katipunan staged
another stike.
To prevent the transfer of raw
materials by the Filcon, members of the
LMF-LMLC formed the picket lines at the
factory gate.
On July 4, 1990,Filcon fled a
Petition for Injunction with Prayer for an Ex
Parte Temporary Restraining Order with
NLRC aginst the respondent Union, SWAT
praying that the respondent union's
members be enjoined from picketing its
premises, and desist from threatening the
management personnel and non-strikers
with bodily harm.
On August 30, 1990, the petitioner
and respondents entered into a
Compromise Agreement to maintain the
status quo ante litem.
Petitioner alleged that: a)
Respondent Union had no legal personality
to fle a notice of strike because the SWAT
was the exclusive bargaining agent of the
rank-and-fle employees and b) that the
fling of the notice of strike was violative of
the existing CBA provisions - no-strike-no-
lockout clause.
The respondent asserted that its
agreement with the compromise contained
a non-retaliatory clause and thereby,
admitted without any reservation.
Issue:Was there a valid compromise
agreement?
Held: There was no valid compromise
agreement. The Supreme Court held that
the parties' presentation of their respective
evidence after the execution of the
compromise agreement was conclusive
proof that the said agreement is not
compromise agreement contemplated in
Article 2028, New Civil Code which stated
that a compromise is a contract whereby
the parties, by making reciprocal
concessions, avoid litigation or put an end
to one already commenced.
The parties merely agreed that the
respondent would stop its strike against the
petitioner and in turn, the latter (Filcon)
would allow the members of the respondent
Union to return back to their respective
works to enable the petitioner to resume its
business operation.
Stamford Marketing Corp. vs. Josephine
Julian
G.R. No. 145496 February 24, 2004
Facts: This is a consolidation of three
cases
1
st
Case: Josephine Julian, et al. vs.
Stamford Marketing Corp.
On November 9, 1994, or just a day
after Apacible received the letter of PACIWU-
TUCP, herein private respondents
Josephine Julian, president of the newly
organized labor union; Jacinta Tejada, and
Jecina Burabod, board member and
member of the said union, respectively,
were efectively dismissed from
employment.
Without further ado, the three
dismissed employees fled suit with the
Labor Arbiter. In their Complaint, the three
dismissed employees alleged that
petitioners had not paid them their
overtime pay, holiday pay/premiums, rest
day premium, 13
th
month pay for the year
1994, salaries for services actually
rendered, and that illegal deduction had
been made without their consent from their
salaries for a cash bond.
2
nd
Case: Philippine Agricultural,
Commercial and Industrial Workers
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Union, et al. vs. GSP Manufacturing
Corp.
PACIWU-TUCP, fled on behalf of ffty
(50) employees allegedly illegally dismissed
for union membership by the petitioners, a
Complaint before the Arbitration Branch of
NLRC, Metro Manila. PACIWU-TUCP
charged petitioners herein with unfair labor
practice. The Complaint alleged that when
Apacible received the letter of PACIWU-
TUCP, management began to harass the
members of the local chapter, a move which
culminated in their outright dismissal from
employment, without any just or lawful
cause. It was a clear case of union-busting,
averred PACIWU-TUCP.
3
rd
Case: Lucita Casero, et al. vs.
GSP Manufacturing Corp., et al.
This separate case was also fled by the
dismissed union members (complainants in
NLRC NCR Case No. 00-03-02114-95),
against the petitioners herein for payment
of their monetary claims. The dismissed
employees demanded the payment of (1)
salary diferentials due to underpayment of
wages; (2) unpaid salaries/wages for work
actually rendered; (3) 13
th
month pay for
1994; (4) cash equivalent of the service
incentive leave; and (5) illegal deductions
from their salaries for cash bonds.
In the frst case the NLRC held
respondent g Declaring the strike
conducted by complainants to be illegal
guilty of unfair labor practice, and
declaring complainants dismissals
illegal; in the second case, the NLRC
declared the strike conducted by
complainants to be illegal and in the
third case, the NLRC ordered the
company to pay individual
complainants. The Court of Appeals
modifed the decision.
Issue: Whether or not the Court of
Appeals ruling is correct
Ruling: The Supreme Court
AFFIRMED with MODIFICATION.
Dismissal of the union ofcers is
declared NOT INVALID, and the award
of separation pay to said union ofcers
is hereby DELETED. However, as a
sanction for non-compliance with
notice requirements for lawful
termination by the petitioners,
backwages are AWARDED to the union
ofcers computed from the time they
were dismissed until the fnal entry of
judgment of this case. The rest of the
dispositions of the Court of Appeals in
its Decision of April 26, 2000, in CA-
G.R. SP No. 53169, are hereby
AFFIRMED.
The right to strike, while
constitutionally recognized, is not
without legal restrictions. The Labor
Code regulates the exercise of said right
by balancing the interests of labor and
management in the light of the
overarching public interest. Thus,
paragraphs (c) and (f) of Article 263
mandate the following procedural steps
to be followed before a strike may be
staged: fling of notice of strike, taking
of strike vote, and reporting of the strike
vote result to the Department of Labor
and Employment. It bears stressing that
these requirements are mandatory,
meaning, non-compliance therewith
makes the strike illegal. The evident
intention of the law in requiring the
strike notice and strike-vote report is to
reasonably regulate the right to strike,
which is essential to the attainment of
legitimate policy objectives embodied in
the law.
Article 264 of the Labor Code, in
providing for the consequences of an
illegal strike, makes a distinction
between union ofcers and members
who participated thereon. Thus,
knowingly participating in an illegal
strike is a valid ground for termination
from employment of a union ofcer. The
law, however, treats diferently mere
union members. Mere participation in an
illegal strike is not a sufcient ground
for termination of the services of the
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union members. The Labor Code
protects an ordinary, rank-and-fle union
member who participated in such a
strike from losing his job, provided that
he did not commit an illegal act during
the strike. Thus, absent any clear,
substantial and convincing proof of
illegal acts committed during an illegal
strike, an ordinary striking worker or
employee may not be terminated from
work.
There is no dispute they could be
dismissed for participating in an illegal
strike. Union ofcers are duty- bound to
guide their members to respect the law.
Nonetheless, as in other termination cases,
union ofcers must be given the required
notices for terminating an employment, i.e.,
notice of hearing to enable them to present
their side, and notice of termination, should
their explanation prove unsatisfactory.
Nothing in Article 264 of the Labor Code
authorizes an immediate dismissal of a
union ofcer for participating in an illegal
strike. The act of dismissal is not intended
to happen ipso facto but rather as an option
that can be exercised by the employer and
after compliance with the notice
requirements for terminating an employee.
In this case, petitioners did not give the
required notices to the union ofcers.
Powers of Labor Secretary
MANILA DIAMOND HOTEL EMPLOYEES
UNION vs. CA
G.R. No. 140518. December 16, 2004
Facts: The Union fled a petition for a
certifcation election which was dismissed
by the DOLE.A Notice of Strike was
thereafter fled with the NCMB for the
Hotels alleged refusal to bargain and for
alleged acts of unfair labor practice. The
Union staged a strike, which prompted the
hotel to dismiss some employees.
The Secretary of Labor, Cresencio
Trajano, assumed jurisdiction over the
labor dispute. An Order was issued
directing the union to return to work within
twenty-four (24) hours upon receipt of this
Order and the Hotel to accept them back
under the same terms and conditions
prevailing prior to the strike.
The Union received the aforesaid Order
and its members reported for work the next
day. The Hotel, however, refused to accept
the returning workers and instead fled a
Motion for Reconsideration of the
Secretarys Order.
Then Acting Secretary of Labor Jose
Espaol, issued the disputed Order, which
modifed the earlier one issued by Secretary
Trajano. Instead of an actual return to
work, Acting Secretary Espaol directed
that the strikers be reinstated only in the
payroll.
On appeal, CA dismissed the Unions
petition and afrmed the Secretary of
Labors Order for payroll reinstatement.
The Court of Appeals held that the
challenged order is merely an error of
judgment and not a grave abuse of
discretion and that payroll reinstatement is
not prohibited by law, but may be called
for under certain circumstances. Hence,
this appeal
Issue: Whether or not CA erred in ruling
that the Secretary of Labors unauthorized
order of mere payroll reinstatement is not
grave abuse of discretion.
Held: It is, therefore, evident from the
foregoing that the Secretarys
subsequent order for mere payroll
reinstatement constitutes grave abuse
of discretion amounting to lack or
excess of jurisdiction. Indeed, this
Court has always recognized the great
breadth of discretion by the Secretary
once he assumes jurisdiction over a
labor dispute.
However, payroll reinstatement in lieu of
actual reinstatement is a departure from
the rule in these cases and there must be
showing of special circumstances rendering
actual reinstatement impracticable, as in
the UST case aforementioned, or otherwise
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not conducive to attaining the purpose of
the law in providing for assumption of
jurisdiction by the Secretary of Labor and
Employment in a labor dispute that afects
the national interest. None appears to have
been established in this case.
Even in the exercise of his discretion
under Article 236(g), the Secretary must
always keep in mind the purpose of the
law. Time and again, this Court has held
that when an ofcial by-passes the law on
the asserted ground of attaining a laudable
objective, the same will not be maintained if
the intendment or purpose of the law would
be defeated.
Trans-Asia Shipping lines- Unlicensed
Crews Employees Union- Associated
Labor Union ( Tasli-Alu) vs. CA
Facts: This Case was elevated to the SC
from the decision of CA enjoining the NLRC
from implementing its return to work order
in connection with labor dispute of Trans-
Asia and holding that it is within the
management prerogative to not give
embarkation order to returning employees.
Issue: Whether or not the CA enjoin a
return to work order issued by NLRC in
case certifed to it by the Secretary of Labor,
Whether or not the a return to work order
in violation of the management prerogative?
Held: When the Secretary of Labor
assumes jurisdiction over a labor dispute
in an industry indispensable to national
interest or certifes the same to NLRC
for compulsory arbitration, it always co-
exist with an order for workers to return
to work immediately and for the
employers to readmit all workers under
the same terms and conditions
prevailing before the strike or lock-out.
The power granted to the Secretary
of Labor under Article 263 (g) of Labor Code
is characterized as an exercise of police
power of the State with the aim of
promoting public good.
Law recognizes employers right to
transfer or assign employees from one area
to another in view of its management
prerogative, however it is not absolute but
subject to limitations imposed by law such
as in Article 263 (g) of the Labor Code.
Illegal Recruitment:
PEOPLE OF THE PHILIPPINES vs. FLOR
GUTIERREZ
G.R. No. 124439 February 5, 2004
Facts: An information was fled against
appellant for engaging in recruitment
activities for overseas job placement
without frst obtaining the required license
and/or authority from the Philippine
Overseas Employment Administration
(POEA).
The accused claimed that as an
"employee" of Serafudin, a duly licensed
agency who was tasked to recruit and ofer
job placements abroad, she could not be
held liable for illegal recruitment. She
admitted that she had no authority to
recruit in her personal capacity, but that
her authority emanated from a Special
Power of Attorney (SPA) and a Certifcation
issued by a licensed agency.
The trial court rendered its decision
fnding the accused guilty beyond
reasonable doubt of Illegal Recruitment in
Large Scale.
Issue: Whether or not the appellant is
guilty of Illegal Recruitment in Large Scale.
Held: YES, appellant is guilty of Illegal
Recruitment in Large Scale. The essential
elements of the crime of illegal
recruitment in large scale are: (1) the
accused engages in acts of recruitment
and placement of workers defned under
Article 13(b) or in any prohibited
activities under Art. 34 of the Labor
Code; (2) the accused has not complied
with the guidelines issued by the
Secretary of Labor and Employment,
particularly with respect to the securing
of a license or an authority to recruit
and deploy workers, either locally or
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overseas; and (3) the accused commits
the unlawful acts against three or more
persons, individually or as a group.
Section 11, Rule II, Book II of the
Rules and Regulations Governing Overseas
Employment requires the prior approval of
the POEA of the appointment of
representatives or agents. Approval by the
Administration of the appointment or
designation does not authorize the agent or
representative to establish a branch or
extension ofce of the licensed agency
represented.
Section 1, Rule X of the same Book,
in turn, provides that "recruitment and
placement activities of agents or
representatives appointed by a licensee,
whose appointments were not authorized
by the Administration shall likewise
constitute illegal recruitment."
In the case at bar, the Certifcation
from the POEA that it "has not received nor
acknowledged the representation of Ms.
Gutierrez" establishes that the appointment
of appellant by Serafudin as a
representative or agent was not authorized
by the POEA. It may be true that the POEA
received from Serafudin a revocation of
appellant's appointment, but still is of no
consequence since Serafudin in the frst
place did not submit her appointment to
the POEA, and so the POEA has nothing to
approve.
Certifcation Election:
NOTRE DAME OF MANILA vs.
LAGUESMA
G.R. No. 149833
Facts: Private respondent fled a petition
for direct certifcation as the sole and
exclusive bargaining agent for
certifcation election among the rank
and fle employees of petitioner. The
petition was granted.
A pre-election conference was
conducted. The date of the certifcation
election was agreed and that the eligible
voters shall be those employees appearing
in the list submitted by management as
agreed upon by the parties.
Petitioner fled a motion to include
probationary and substitute employees in
the list, motion denied by a handwritten
notation. Petitioner fled an appeal from
said notation.
Thereafter, public respondent
conducted the certifcation election.
Petitioner later fled a written notice
of protest against the conduct and results
of the certifcation of election.
The appeal was dismissed hence the
petition.
Issue: Whether or not petitioner as the
employer is a real party to the
proceedings.
Ruling: Unless it fled a petition for a
certifcation election pursuant to
Article 258 of the Labor Code, the
employer has no standing to question
the election, which is the sole concern
of the workers. The Labor Code stated
that any party to an election may
appeal the decision of the med-
arbiter. Petitioner was not such a
party to the proceedings, but a
stranger which had no right to
interfere therein.
Retirement Pay:
DIVINA S. LOPEZvs. NATIONAL STEEL
CORPORATION
G.R. No. 149674, February 16, 2004
FACTS: Sometime in 1980,
respondent National Steel Corporation,
embarked on two (2) massive projects, the
Five-Year Expansion Program (Phase II-B)
and the Integrated Steel Mill Project. It
employed and trained several employees for
the operation of the projects. One of them
was petitioner Divina S. Lopez, who was
appointed as researcher eventually, she
was promoted as a senior researcher at
respondents Market Research Department,
receiving a monthly base pay of
P22,481.00.
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In 1994, respondent sufered
substantial fnancial losses. With this
development, respondent adopted an
organizational streamlining program. On
June 30, 1994, respondent issued a
memorandum announcing the
retrenchment of several workers at its Iligan
and Pasig Plants and Makati Head Ofce.
Petitioners services was terminated. She
was paid P543,379.26 representing
separation benefts for her 12 years of
service and executed a Quitclaim and
Release.
Barely three (3) years thereafter,
petitioner fled with the Labor Arbiter a
complaint for payment of retirement
benefts against respondent. The Labor
Arbiter rendered a Decision dismissing the
complaint which was afrmed by the NLRC.
This was elevated to the CA. However, it
likewise upheld the resolution of the NLRC.
ISSUE: Whether or not petitioner is entitled
to retirement benefts
RULING: It bears stressing that as held by
the Labor Arbiter, the NLRC and the Court
of Appeals, there is no provision in the
parties CBA authorizing the payment to
petitioner retirement benefts in addition to
her retrenchment pay; and that there is no
indication that she was forced or "duped"
by respondent to sign the Release and
Quitclaim. The Court of Appeals also ruled
that petitioner, not having reached the
retirement age, is not entitled to retirement
benefts under Article 287 of the Labor
Code.
The Court has always accorded
respect and fnality to the fndings of fact of
the Court of Appeals, particularly if they
coincide with those of the Labor Arbiter and
the NLRC when supported by substantial
evidence, as in this case. The reason for
this is that quasi-judicial agencies, like the
Arbitration Board and the NLRC, have
acquired a unique expertise because their
jurisdictions are confned to specifc
matters. Sufce it to reiterate that the
respondents retirement plan, quoted
earlier, precludes employees, whose services
were terminated for cause, from availing
retirement benefts. Petition was denied.
Money Claims:
KAR ASIA, INC., ET AL. VS. CORONA, ET
AL.
G.R. NO. 154985, AUG. 24, 2004
Facts: Respondents were regular employees
of petitioner, an automotive dealer in Davao
City. On Sept. 24, 1997, a complaint for
underpayment of wages was fled before the
Regional Arbitration Branch of Davao City.
They claimed that they were not paid
their COLA for the months of Dec. 1993
and Dec. 1994. Petitioner countered that
the complaint was false and malicious. It
denied the non-payment of COLA and
alleged that respondents scare of potential
customers. The Labor Arbiter decided in
favor of petitioners. NLRC afrmed such
decision. CA, However, reversed NLRCs
decision.
Issue: Whether the petitioner company paid
respondents their COLA for Dec. 1993 and
Dec. 1994.
Held: Yes, A close scrutiny of the payroll
readily discloses the signatures of the
respondents opposite their printed names
and the numeric value of P654.
Respondents averment that petitioner
harassed them into signing the payroll
without giving them its cash equivalent
cannot be given credence.
The allegations of harassment are
inadmissible as self-serving statements and
therefore cannot be repositories of truth.
He who asserts, not he who denies must
prove. More importantly, the unreasonable
length of time in pursuing respondents
claim militates against its grant. Art. 291
of the Labor Code requires that all money
claims arising from employee-employer
relations shall be fled within 3 years from
the time that the cause of action accrued:
otherwise they will be barred forever.
TEXON MANUFACTURING vs. MILLENA
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G.R. No. 141380 April 14, 2004
Facts: Marilyn and Grace Millena,
respondents, were employed by Texon
Manufacturing, petitioner Company.
Petitioner company terminated the services
of respondent Grace Millena, prompting her
to fle with the Labor Arbiter.
Similarly, on September 8, 1995,
Petitioner Company terminated the services
of respondent Marilyn Millena. The
following day, she went to petitioners ofce
to get her salary. Betty Chua then ofered
her the sum of P1, 500.00 as a starting
capital for a small business and asked her
to sign a blank piece of paper and turned
out that it was a resignation letter and
quitclaim of her back salaries. Thus, she
fled with the Labor Arbiter a complaint for
illegal dismissal with prayer for payment of
full back wages and benefts money claims.
Petitioners fled a motion to dismiss
both complaints on the ground of
prescription.
The Labor Arbiter issued an Order
denying the motion to dismiss. Petitioners
then interposed an appeal to the
(NLRC).NLRC promulgated an Order
dismissing the appeal and afrming the
Arbiters Order. Petitioners fled a motion for
reconsideration but was denied by the
NLRC.Consequently, petitioners fled a
petition for certiorari with the Court of
Appeals.CA rendered a Decision afrming
the NLRC Order. In sustaining the denial by
the NLRC of petitioners motion to dismiss
Issue: Whether or not the complaints,
including money claims should be
dismissed on the ground of prescription.
Ruling: Under "Article 291 of the Labor
Code. Money claims. All money claims
arising from employer-employee relations
accruing during the efectivity of this Code
shall be fled within three years from the
time the cause of action accrued,
otherwise they shall be forever barred."
The Court disagree with petitioners
contention that respondent Grace Millenas
cause of action for money claims accrued
"in the summer of 1991 and 1992" when,
by reason of her employment, she became
entitled to the companys monetary
benefts. Records show that it was only
after petitioner company terminated her
services, sometime in the summer of 1995,
that she decided to fle with the Labor
Arbiter her complaint for money claim. The
three (3) year prescriptive period should
then be counted, not from 1991 or 1992,
but from 1995. Respondents complaint was
fled on August 21, 1995 or barely three (3)
months after the termination of her
employment in the summer of 1995. There
is, therefore, no question that her complaint
was seasonably fled.
As regards the claim for illegal
dismissal, "Ones employment or profession
is a property right and the wrongful
interference therewith is an actionable
wrong. The right is considered to be
property within the protection of the
constitutional guarantee of due process of
law. Clearly then, when one is arbitrarily
and unjustly deprived of his job or means of
livelihood, the action instituted to contest
the legality of ones dismissal from
employment constitutes, in essence, an
action predicated upon an injury to the
rights of the plaintif, as contemplated
under Article 1146 of the New Civil Code,
which must be brought within 4 years."
The order of the Labor Arbiter
denying petitioners motion to dismiss was
not yet fnal as there was something else to
be done, namely the fling of the answer
and the subsequent proceedings wherein
the respective parties would ventilate their
respective sides. The Order of the Labor
Arbiter denying petitioners motion to
dismiss is interlocutory. It is well-settled
that a denial of a motion to dismiss a
complaint is an interlocutory order and
hence, cannot be appealed, until a fnal
judgment on the merits of the case is
rendered. The Court afrmed the decision
of CA.
2006 BAR OPERATIONS
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