LABOR 1 CASE RECITATION

KING OF KINGS V MAMAC

Mamac was KKKK union president at KKTI.
Conductors required to accomplish Conductor Trip Report.
After audit, any irregularities are issued Irregularity Report,
employee is asked to explain.
Several sold tickets declared by Mamac as returned, amounting to
loss of P890.
No IR filed, but Mamac was made to explain.
Mamac explained in his letter that an accident where bus windshield
was smashed led to him making mistake in report.
KKTI served notice of termination on Mamac, alleging fraud against
company.
Mamac filed complaint for illegal dismissal, illegal deductions,
nonpayment of 13th month, SIL, and service pay. Denied infractions.
Alleged union busting. Claimed dismissal without due process.
LA dismissed Mamacs complaint.
NLRC affirmed LA, with modification: KKTI failed to comply with due
process, must indemnify Mamac in amount of P10k.
CA found just cause in dismissal, but sustained NLRC finding of
violation of procedural due process. Following SERRANO, CA
modified award: full backwages, from termination until finality, and
13th month pay.
Did KKTI comply with procedural due process? NO.
Termination was based on just cause. Declaring sold tickets as
returned constituted fraud or acts of dishonesty.
LC 277 requires:
1. written notice stating cause for termination; and
2. ample opportunity to be heard.
Omnibus Rules, Bk5, Ru23 requires:
1. first written notice: specific causes, reasonable opportunity
2. hearing or conference: explain defense; present evidence
in support; rebut evidence against
3. written notice of termination: all circumstances considered;
grounds established justify severance
KKTI failed to provide charge sheet.
Verbal appraisal does not comply with first notice requirement.
Employees written explanation does not excuse absence of first
notice.
Even had IR been issued, it would not comply. IR contains only
general description of charges, does not state company rule
violated, does not mention grounds for termination. KKTIs standard
charge sheet is insufficient notice.
No hearing was conducted.
Was CA correct in awarding full backwages? NO.
CA relied on doctrine in SERRANO. This has been already
abandoned in AGABON.
KKTI must pay P30k for noncompliance with due process
requirement.
Was CA correct in awarding 13th month? NO.
PD 851 IRR Sec3 provides exceptions to 13th month, does not apply
to employees on pure commission.
CA applied PHIL AGRI COMMERCIAL AND INDUSTRIAL
WORKERS UNION in ruling that Mamac was entitled to 13th month.
Case does not apply, since drivers and conducters there were
receiving fixed wages with added commission.
Mamac admitted he was paid on purely commission basis,
supported by pay slips.
SC MODIFIED: deleted award of full backwages and 13 th month.
KKTI to indemnify Mamac P30k as nominal damages for failure to
comply with procedural due process in termination.

INGUILLO V FPSI
Union security clause
Scales manufacturer FPSI employed Bergante and Inguillo.
It had CBA with FPSILU, which the two signed.
IB and other employees joined another union, NLM-KATIPUNAN,
during the effectivity of the CBA.
NLM filed with DOLE an intraunion dispute against FPSILU. It lost,
and was ordered to return P90k of collected dues to FPSILU.
Inguillo was formerly FPSILUs Sec for Finance, and his wages
along with Pres Grutas, were garnished to satisfy the award.
P3,443 was collected from Inguillos wages.
FPSILU sent Petisyon to FPSI seeking termination of several
employees, including IB on:
1. Disloyalty
2. Dereliction of duty (meetings and reports)
3. Depositing Union funds not in FPSILUs name
4. Deliberately slowing production
5. Poisoning and enticing minds
Inguillo filed complaint with NLRC for illegal withholding of salary and
for damages.
FPSI terminated employees named in Petisyon.
NLM and Inguillo filed complaints for illegal dismissal, reinstatement,
and damages.
FPSI manager Policarpio met with employees to discuss terms of
separation pay. Some complainants agreed to settle; IB were
remaining complainants.
IB: they were not aware of Petisyon, no memorandum stating their
infraction.
I: he was not party to intraunion dispute and his salary was exempt
from execution.
FPSI: dismissal was upon demand of FPSILU, and FPSI complied,
in accordance with USC in CBA. IB had signed ratification of CBA.

LA dismissed complaints.
IB were not illegally dismissed, had clearly violated USC, and
committed acts to detriment of FPSILU.
LA still ordered FPSI to pay separation pay and legal holiday pay, in
light of length of service, and amicable settlements of others.
NLRC reversed LA, but later reversed itself and sustained LA.
Ordered reinstatement of IB and payment of Is withheld salary.
FPSI failed to present evidence of inimical acts, did not inform IB of
dismissal. Summary dismissal violated IBs right to due process.
NLRC later reversed itself: IB were not illegally dismissed, because
of CBA. Complaint dismissed, but FPSI ordered to pay Inguillo his
withheld salary.

PADILLO V RURAL BANK OF

NABUNTURAN
Padillo employed by Bank as SA Bookkeeper since 1977.
Bank took out insurance plans with Philamlife for all employees in
2003 because of liquidity problems.
Bank President Oropeza bought majority in 2004, took over
management, and was able to rehabilitate Bank.
Padillo suffered mild stroke in 2007, impairing his ability to work. He
wrote Oropeza requesting early retirement package, which was
unheeded.
Padillo was separated due to poor health in 2007.
Padillo filed complaint with NLRC in Davao for recovery of unpaid
retirement benefits.
He asserted existence of Bank policy of granting aging employees
early retirement benefits, citing Lusan who retired at 53 and was
given P348,672.
LA dismissed Padillos complaint, but directed Bank to pay P100k
financial assistance, as amounts receivable under the Philamlife
plan.

CA dismissed appeal, sustained NLRC: dismissal based on

enforcement of USC is not illegal or ULP.
Union can require members not to affiliate with other unions.
USC or closed shop agreement is valid.

Does enforcement of USC justify dismissal of IB? YES.

Enforcement of USC in CBA is not in LC, but is recognized as valid
cause for termination in Philippine jurisdiction.
1. Union shop: all new employees must join
2. Maintenance of membership shop: employees must
maintain.
3. Closed shop: no person may be employed in certain
departments unless member in good standing.
Requirements for enforcing USC:
1. USC is applicable
2. Union is requesting enforcement
3. Sufficient evidence supporting unions decision to expel
USC in CBA was valid. IB signed CBA.
FPSILU cited several grounds in Petisyon in recommending
dismissal.
IBs disloyalty clearly proven, in their disaffiliation, in the intraunion
dispute, in recruiting for NLM, in collecting dues for NLM.
DEL MONTE: CBA stipulations equal in import to LC provisions on
dismissal. CBA is law between company and union.
CREA V BRILLANTES: USC is for protection of union against
fickleness of its own members, to prevent its gradual weakening and
vulnerability to company machinations.
Dismissal pursuant to USC is valid and legal, subject to requirement
of due process: notice and hearing prior to dismissal.
1. first written notice: reasonable opportunity
2. hearing or conference: explain, present, rebut
3. written notice of termination: circumstances, grounds
Required two notices were lacking in present case.
Petisyon does not constitute notice. It is only recommendation by
union, for employers decision. It is not notice of termination.
Petisyon gave only general descriptions. IB could not intelligently
prepare defense.
No directive to submit written explanation within reasonable period.
Dialogue with employees negotiating pay did not constitute hearing
or conference.
SC AFFIRMED CA: IB validly dismissed. Absence of statutory due
process does not render it illegal. FPSI to indemnify IB in amount of
P30k each as nominal damages.

Padillo was disqualified from receiving benefits under LC 300 (287),

being only 55.
NLRC reversed LA and ordered Bank to pay P164k on top of
previous P100k.
NLRC applied LCC 297 (323) termination on ground of disease,
holding that Padillo resigned only because of his poor health.
CA set aside NLRC and reinstated LA decision, with modification:
ordered Bank to pay P50k as financial assistance on top of P100k
Philamlife plan which had already matured.
CA ruled that there was no basis under LC 300 to grant retirement
benefits, and also found insufficient evidence proving an existing
Bank policy of granting early retirement benefits to aging employees.
Separation pay on ground of disease should not be given, as Padillo
initiated severance of his employment.
Padillo died in 2012.
Does LC 297 on termination on ground of disease apply? NO.
Padillo stopped reporting to work. His letter showed his intent to
voluntarily retire. He was not terminated.
LC 297 presupposes that it is employer who terminates services of
employee.

Omnibus Rules Bk 6, Ru 1, Sec 8 requires certification by

competent public health authority that disease is such that it cannot
be cured within 6 months, even with proper medical treatment.
Claim for separation pay on this basis must be denied.
ABAQUIN does not apply. In that case, security guard Jose was
granted separation pay because he could not have organized with
other employees to bargain for greater benefits because of a
prohibition in the old law.
Employees prohibited to self-organize:
1. managerial employees
2. confidential employees of management
LC 300 applies. In absence of retirement plan, 60 year old employee
may retire and shall be entitled to retirement pay:
1. month pay per year service
2. at least 6 months is considered 1 year
There is no evidence of Bank retirement plan.
To be considered company practice, giving of benefits must be show
to be consistent and deliberate over a long period.
Solitary case of Lusan is insufficient.
Padillo did not meet the age requirement.
SC AFFIRMED with modification: P50k increased to P75k.

EASTRIDGE GOLF CLUB V EGCILUS

Closure
Club employed EGCILUS members as kitchen staff in its Food and
Beverage Department.
Club terminated employment in 1999 on ground that operations of
FBD had been turned over to concessionaire Mothers Choice.
Club filed Establishment Termination Report with DOLE, citing
reorganization, downsizing, and transfer of operations to a
concessionaire.

Failure to prove first requirement renders retrenchment illegal, and

employer becomes liable for reinstatement and full backwages.
If bona fide, absence of notice does not invalidate, but employer
becomes liable for nominal damages of P50k per employee.
Closure: partial or complete cessation of operations.
Unlike retrenchment, closure does not depend on evidence of actual
or imminent reversal of employers fortune.
SC: Club invokes cessation, not retrenchment. It need not present
evidence of financial losses.
CA erred in declaring clubs cessation invalid for lack of evidence.

EGCILUS filed complaint for illegal dismissal, ULP, and 13 th month

pay with NLRC regional branch.
Union claimed dismissal is not based on any cause allowed by law,
and was done without due process.
Club denied unions claims. It issued memoranda several months
before dismissal to inform union of partial cessation and bidding out
of part of operations to minimize losses.
There was procedure for old FBD staff to be rehired by
concessionaire, but respondents failed to comply
Respondents presented evidence to show that Club was still real
employer of FBD staff and that there was no real transfer of
operations: payslips, payroll register, health insurance and SSS
remittances.

LA ruled in favor of the union.

Club did not cease operation of its FBD, as evidenced by payslips,
SSS payments, payroll.
Club did not show evidence of financial losses incurred.
Ordered reinstatement, with full seniority rights and backwages.
Awarded complainants and union P5k each.
NLRC reversed LA.
Club did not act in malicious or arbitrary manner.
Club is not required to prove financial losses under LC 283.
Closure is valid exercise of management prerogative to prevent
losses.
Employers are not required to keep employees until losses are
actually incurred.
CA reversed NLRC, and affirmed LA.
Retrenchment preserves viability of business.
Employer must prove allegation of economic reverses with clear
evidence.
Union was able to prove that club continued to operate FBD even
after dismissal.

Was the termination under retrenchment? NO.

LC 283 allows various modes of termination.
Retrenchment: economic ground for dismissing employees,
initiated by employer during business recession, primarily to avoid or
minimize business losses
1. Necessary to prevent loss; proven by sufficient convincing
evidence; losses substantial, not flimsy, actual, or reasonably
imminent; retrenchment is only effective measure to prevent
such imminent losses; (NPSO Necessary Proven Substantial
Only)
2. Written notice served on employee and DOLE at least 1 month
prior to retrenchment;
3. Separation pay of month pay per year service, or 1 month
pay, whichever is higher.

Closure is management prerogative, but must still comply with LC

283:
1. Closure or cessation is bona fide
2. Written notice to employee and DOLE of at least 1 month
3. If not due to financial losses, separation pay of month pay
per year service, or 1 month pay, whichever is higher
If closure is in bad faith, dismissal shall be declared illegal, and
employer is liable for reinstatement and full backwages. If
reinstatement is no longer feasible, employer is liable for full
backwages and separation pay of 1 month pay per year service, with
at least 6 months considered 1 year.
If closure is in good faith, due to business losses, dismissal shall be
upheld, with no separation benefits.
If closure is in good faith, but not due to business losses, dismissal
shall be upheld, with separation pay of month pay per year
service, or 1 month pay, whichever is higher.
SC: Club did not cease operations, but merely simulated transfer to
concessionaire: payslips, payroll register, PhilHealth and SSS
remittances. Club remained employer of FBD staff even after alleged
takeover by Mothers Choice.
Clubs evidence are of doubtful veracity:
1. Agreement with Mothers Choice is not notarized.
2. Certificate of Registration of Business Name and Mayors
Permit were in the name of Bilibiran, not Mothers Choice
SC SUSTAINED CA AND LA, ruled in favor of union. Transfer was
simulated. Dismissal was illegal.

UNILEVER V RIVERA
Procedure

Rivera was employed as Area Activation Executive of Unilever

in Cotabato and Davao: sales, distribution, promotion,
supervising 3rd party provider Ventureslink.
Random audit in 2007 discovered fictitious billing and receipts
of P11.2m. Also, funds were diverted from original intended
projects.
Unilever issed show-cause notice:
o
Conversion and misappropriation
o
Breach of fiduciary trust
o
Policy breaches
o
Integrity issues
Rivera replied by email:
o
mere resourceful utilization of budget
o
difficulty of procuring funds from head office
o
all funds used for promotion
Unilever sent letter to Rivera informing her that she was found
guilty of serious breach of regulations, and that the company
was severing professional relations.
Rivera asked for retirement benefits in view of 14 years service,
which Unilever denied.
Rivera filed complaint for illegal dismissal.
LA dismissed complaint, but awarded Rivera 13 th month and
unused leave credits. No retirement benefits.
NLRC found Unilever guilty of violating two-notice requirement,
even if dismissal was for just cause. Awarded Rivera retirement
benefits and P20k nominal damages.
CA modified.
o
Retirement was deleted, as dismissal was just.
o
Separation awarded as social justice, because there was
no proof of personal gain.

Is Rivera entitled to separation pay? NO.

GR: employee dismissed for just cause under LC 282 is not

entitled to separation pay. SGFCO
1. Serious misconduct
2. Gross habitual neglect
3. Fraud
4. Commission of crime
5. Other analogous

EX: separation pay granted on social justice or equitable

grounds (PLDT V NLRC). It requires that dismissal is
1. Not for serious misconduct
2. Not reflecting on moral character

Social justice cannot be permitted to be refuge of scoundrels

any more than can equity be an impediment to the punishment
of the guilty. PLDT

TMPCWA V NLRC: other grounds under LC 282 also bar award

of separation pay.

Rivera dismissed because of intentional circumvention of strict

company policy.
Was CA empowered to award affirmative relief? NO.

Rivera did not appeal to CA, Unilever did.

It was erroneous for CA to grant affirmative relief when Rivera

did not ask for it.
Was the grant of nominal damages proper? YES.

RILC Bk 5, Ru 23, Sec 2 on requirements of notice for

termination under LC 282:
1. First written notice specifying grounds
a. Directive to submit written explanation within five
calendar days from receipt
b. Detailed narration of facts
c. Specific mention of rules violated or LC grounds
2. Hearing and conference
3. Written notice of termination

Unilever was not direct or specific in its first written notice to

Rivera.
SC increased nominal back to P30k as initially awarded by NLRC.

NUWHRAIN V CA
Illegal strike
NUWHRAIN negotiated for Dusit rank and file. No agreement
reached. It filed Notice of Strike on 20 Dec 2001.
14 Jan: Union voted to strike
18 Jan: Employees reported for work with shaved heads. They were
barred from entering. Union picketed outside hotel premises. Hotel
had to shut down restaurant operations.

Confidential employees

Teachers in middle of first term

Sec DOLE decision to order payroll reinstatement instead of actual
is valid, because of the appearance of the workers, mutual
antagonism.
Payroll reinstatement was meant to insure industrial peace.
Were the acts of reporting for work with shaved heads and
picketing outside hotel premises illegal? YES.
LC 212o defines strike: any temporary stoppage of work by
concerted action as result of dispute.

20 Jan: Dusit issued notice of preventive suspension to several

union members for:
1. Violation of duty to bargain in good faith
2. Illegal picket
3. ULP
4. Violation of grooming standards
5. Illegal strike
6. Illegal acts during strike

1.

26 Jan: Dusit terminated several unin officers and members.

NUWHRAIN engaged in picket and unlawfully blocked ingress and
egress of hotel premises.

4.

Sec of DOLE certified to NLRC for compulsory arbitration

NLRC: 18 Jan strike was illegal because it violated thirty day cooling
off period (from notice of strike) and seven day strike ban (from
submission of strike vote).
CA affirmed NLRC.

Is payroll reinstatement proper in lieu of actual reinstatement?

MOOT
NLRC upheld the dismissal.
LC 263g is subject to exception: if actual reinstatement is
impracticable, payroll reinstatement allowed.

2.
3.

5.

Violation of hotels grooming standards was deliberate and

concerted attempt to embarrass and coerce the hotel.
Allowing them to work would be to the detriment of its
finances and reputation.
CBA had no strike, no lockout provision.
Union decision to violate grooming standards was not
bargaining in good faith, violating RILC Bk 5, Ru 13, Sec 6
prohibiting any act impeding early settlement of labor
disputes under conciliation.
Violation of thirty day cooling off period and seven day
strike ban.
Obstruction of driveway was illegal under LC 264e (Strikes
and Lockouts, prohibited acts).

LC 264a: Union officers who knowingly participate in illegal strike

lose employment status. Union officers and workers who knowingly
participate in illegal acts during strike lose employment status.
Hotel failed to specify participation of members.
SC: Fair days wage for fair days labor.
Strike was illegal no work, no pay.
Officers lost employment status.
Workers reinstated, without backwages. Hotel has option of
separation pay.