Case Digest: Morales v.

Metrobank
FACTS:
Sometime in August 1992, petitioner Lenn Morales (Morales) was hired by Solidbank as Teller
for its Rizal Avenue Branch in Tacloban City. With said banks merger with respondent
Metropolitan Bank & Trust Company (Metrobank), the latter absorbed Morales and assigned
him to its Customer Service Relations-Reserve Pool (CSR-RP) which was composed of
employees who, with no permanent places of assignment, acted as relievers whenever
temporary vacancies arise in other branches.
Morales was later-on promoted as a Customer Service Representative (CSR). Federico
Mariano, the Senior Manager of Metrobank, informed Morales that he was covered by the
banks Special Separation Program (SSP) and that, in accordance therewith, his employment
was going to be terminated on the ground of redundancy.
On 27 August 2003, Morales was furnished a copy of a memorandum of the same date
informing him that, after a review of its organizational structure, Metrobank had found his
services redundant and will consider him separated effective 1 October 2003. Assured that
his termination was through no fault of his own but mainly due to business exigencies and
developments in the banking industry, Morales was notified that he shall be paid the
following: (a) a redundancy premium/separation pay, on top of his entitlements under the
banks retirement plan; (b) proportionate 13th month pay; (c) cash conversion of his
outstanding vacation and sick leave credits; and, if applicable, (d) the return of his Provident
Fund contributions; and, (e) cash surrender value of his Insurance. Morales then executed
Release, Waiver and Quitclaim acknowledging receipt of the sum of P158,496.95 as full
payment of his monetary entitlements. However, Morales filed against Metrobank a
complaint for illegal dismissal.
The Labor Arbiter ruled that Morales was illegally dismissed. The NLRC reversed the Labor
Arbiter. On appeal, the Court of Appeals sustained the NLRC.
ISSUE: Whether or not Morales was illegally dismissed?
HELD: The petition is bereft of merit.
LABOR LAW: redundancy; quitclaim
One of the authorized causes for the dismissal of an employee, redundancy exists when the
service capability of the workforce is in excess of what is reasonably needed to meet the
demands of the business enterprise. For the implementation of a redundancy program to be
valid, however, the employer must comply with the following requisites: (1) written notice
served on both the employees and the DOLE at least one month prior to the intended date
of termination of employment; (2) payment of separation pay equivalent to at least one
month pay for every year of service; (3) good faith in abolishing the redundant positions;
and (4) fair and reasonable criteria in ascertaining what positions are to be declared
redundant and accordingly abolished.
Contrary to the first and second errors Morales imputes against the CA, our perusal of the
record shows that Metrobank has more than amply proven compliance with the third and
fourth of the above-enumerated requisites for the validity of his termination from service on
the ground of redundancy. Under the SSP which Metrobank adopted in 1995, employees who
voluntarily gave up their employment were paid the amount of separation pay they were
entitled under the law and a premium equivalent to 50%-75% of their salaries. It appears
that employees "whose work evaluation showed consistent poor performance and/or those
who had not been promoted for five years" were also considered primary candidates for
optional separation from service.
In implementing a redundancy program, it has been ruled that the employer is required to
adopt a fair and reasonable criteria, taking into consideration such factors as (a) preferred
status; (b) efficiency; and (c) seniority, among others. As these employees had no
permanent place of assignment and merely acted as relievers whenever temporary
vacancies arise in other branches, they were the most logical candidates for inclusion in the
SSP.

Morales next insists that Metrobank failed to comply in good faith with the notice
requirement under Article 283 of the Labor Code which allows the employer to terminate the
employment of any employee due to redundancy by serving a written notice on the worker
and the DOLE at least one (1) month before the intended date thereof. Intended to enable
the employee to prepare himself for the legal battle to protect his tenure of employment and
to find other means of employment and ease the impact of the loss of his job and his
income, said notice requirement is also designed to allow the DOLE to ascertain the verity of
the cause for the termination. As correctly determined by the CA, Metrobanks compliance
with this requirement is evident from its service of the 27 August 2003 notice of termination
upon Morales on the same date, effective 1 October 2003 or 30 days after the date of said
notice.
While it may be accepted as ground to annul a quitclaim if the consideration is
unconscionably low and the employee was tricked into accepting it, dire necessity is not,
however, an acceptable ground for annulling the release when it is not shown that the
employee has been forced to execute it. This Court has held that not all quitclaims are per
se invalid or against public policy, except (1) where there is clear proof that the waiver was
wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are
unconscionable on their face. These two instances are not present in this case.
Petition is DENIED.

Agoy v National Labor Relations Commission

Facts:
Marcelino Agoy, in his complaint filed with the POEA, alleged that he applied for overseas
employment as civil engineer with private respondent EUREKA and was subsequently
accepeted to work as CE/Road Engineer for private respondent Al-Khodari Establishment
under a two-year contract with basic salary of SR 1,750 per month and food allowance of SR
200 with free accommodation. However, on January 28, 1990. He was deployed by Eureka to
Jubaili, Saudi Arabia under the category of road foreman at a basic salary of 460 US dollars
which terms are different from original contract. Left with no choice, he accepted the
position. Then, he was asked again by respondent Al-Khodari to sign a new contract with
reduced salary or suffer termination and repatriation. He did not accept the new contract
resulting for his dismissal on March 26, 1990. After being paid the remaining balance of his
salary, petitioner executed a final settlement releasing respondents from liabilities and
claims. On April 5, 1990 petitioner received a letter dated April 2, 1990 with subject
Termination of Services Within the Probation Period which he was forced to sign and
consent to.
Denying petitioners claim of illegal dismissal, Eureka alleged that Agoy was actually hired
only as Road Foreman because he did not qualify to become road engineer. Also, he was
given two chances to qualify for the position of road engineer, in which both he failed.
Refusing the position of foreman, the employer dismissed the employee during his
probationary period.
POEA dismissed the petition. NRLC granted at first but later reversed.
Issue:
Whether or not the the petitioner is illegally dismissed?
Held:
The Court granted the petition.
Respondents attempt to justify peitioners dismissal failed to comply the second ground that
he fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer at the time of engagement. Petitioner constantly denied that he was
given chances to qualify for the position for which he was contracted.
Moreover, the mere signature of the petition in the letter of termination could not jump into
a conclusion that he voluntarily consented to his dismissal. In the Philippine jurisprudence, it
is well established that quitclaims and/or complete releases do not stop them from pursuing
their claims arising from the unfair labor practice of the employer. The basic reason for this
is that such quitclaims/releases are against public policy and therefore, null and void.

F.F. CRUZ & CO., INC. vs. HR CONSTRUCTION CORPORATION G.R. No. 187521 March
14, 2012

Facts:
Sometime in 2004, FFCCI entered into a contract with the Department of Public Works and
Highways (DPWH) for the construction of the Magsaysay Viaduct, known as the Lower
Agusan Development Project. On August 9, 2004, FFCCI, in turn, entered into a Subcontract
Agreement with HR Construction Corporation (HRCC) for the supply of materials, labor,
equipment, tools and supervision for the construction of a portion of the said project called
the East Bank Levee and Cut-Off Channel in accordance with the specifications of the main
contract. Pursuant to the Subcontract Agreement, HRCC would submit to FFCCI a monthly
progress billing which the latter would then pay, subject to stipulated deductions, within 30
days from receipt thereof. The parties agreed that the requests of HRCC for payment should
include progress accomplishment of its completed works as approved by FFCCI. Additionally,
they agreed to conduct a joint measurement of the completed works of HRCC together with
the representative of DPWH and consultants to arrive at a common quantity. Thereafter,
HRCC commenced the construction of the works pursuant to the Subcontract Agreement.
However, before the project was completed, HRCC pursuant to the arbitration clause in the
subcontract agreement filed with the Construction Industry Arbitration Commission a
complaint praying that FFCI pay the overdue application plus legal interests they have not
paid. FFCCI maintained that HRCC failed to comply with the condition stated under the
Subcontract Agreement for the payment of the latters progress billings, i.e. joint
measurement of the completed works, and, hence, it was justified in not paying the amount
stated in HRCCs progress billings.
Issue:
Whether or not FFCCI is already barred from contesting HRCCs valuation of the
completed works having waived its right to demand the joint measurement requirement.
Ruling:
The Supreme Court held that FFCCI had waived its right to demand for a joint measurement
of HRCCs completed works under the Subcontract Agreement. Further, on account of its
failure to demand the joint measurement of HRCCs completed works, had effectively waived
its right to ask for the conduct of the same as a condition sine qua non to HRCCs submission
of its monthly progress billings. Basically, the instant issue calls for a determination as to
which of the parties respective valuation of accomplished works should be given credence.
FFCCI claims that its valuation should be upheld since the same was the result of a
measurement of the completed works conducted by it and the DPWH. On the other hand,
HRCC maintains that its valuation should be upheld on account of FFCCIs failure to observe
the joint measurement requirement in ascertaining the extent of its completed works. FFCCI
admits that in all three instances where it paid HRCC for its progress billings, it never
required compliance with the aforequoted contractual provision of a prior joint
quantification. Such repeated omission may reasonably be construed as a waiver by FFCCI of
its contractual right to require compliance of said condition and it is now too late in the day
to so impose it. Article 6 of the Civil Code expressly provides that rights may be waived
unless the waiver is contrary to law, public order, public policy, morals or good customs.
The tribunal cannot see any such violation in this case.

Pagpalain Haulers vs Tajano

Facts:
On May 14, 1997, respondent ILO-PHILS, in a bid to represent the rank-and-file workers of
petitioner Pagpalain Haulers Inc., filed a petition for certification election with the DOLE.
However, petitioner moved to dismiss the same, alleging that ILO-PHILS was not a legitmate
labor organization due to its failure to comply with the requirements under the Labor Code.
Specifically, the books of accounts were not verified under oath by its treasurer and attested
to by its president.
The Labor Code, thru the Department Order No. 9, does not require the submission of book
of account in order for a labor organization to be registered as a legitimate labor
organization. The said administrative order was issued by the secretary of labor under his
authority. Petitioners claim that the said order is contrary to public policy as the Court held in
Progressive and Protection Technology. Pagpalain also raised the issue of authority of the
secretary in alteration of the rules because judicial decisions form part of the law of the land
and the said order cannot prevail over SC rulings.
Issue:
Whether or not ILO-PHILS is a legitimate union despite book of accounts not verified?
Held:
The Court denied the petition and affirmed the legitimacy of the union. It is the
interpretation of the laws that form part of the legal system of the Philippines, therefore the
Court does not enact law. However, the decisions in Progressive and Protection Technology
are no longer applicable because it was amended by Department Order No. 9. Also, it was a
valid exercise of authority of the secretary to issue such order because it is upon the
authority of the law and the order is not contrary to law and the Constitution. On the ground
that the order violates public policy based from the principles laid down by the Court on
Progressive and Protection Technology cases, the said department order is not violative of
public policy because through the amendment, the executive department changed this
public policy.