Case List For Labor Standards

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NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017
1. Bulletin Publishing Corp. vs Sanchez, 144 SCRA 628
2. Kap. Manggagawa ng Camara Shoes vs. Camara Shoes, 111 SCRA

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3. Victoriano vs. Elizalde Rope Workers Union, 59 SCRA 54
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4. Juat vs. CIR, 15 SCRA 395
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5. Milar vs. Inciong, 121 SCRA 444
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6. San Miguel Corp. vs. NLRC, 209 SCRA 632
7. Manila Mandarin Employee Union vs. NLRC, 154 SCRA 368
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FACTS:
Manila Mandarin Employees Union, exclusive bargaining agent of the
rank-and-file employees of the Manila Mandarin Hotel, Inc., filed a complaint to
compel the latter to pay the salary differentials of its concerned employees
because of wage distortions in their salary structure, allegedly created by the
upward revisions of the minimum wage, pursuant to various Presidential
Decrees and Wage Orders, and its failure to implement the corresponding
increases in the basic salary rate of newly-hired employees.
ISSUE:
Whether or not there was wage distortion.
RULING:
The clear mandate of the issuances was merely to increase the
prevailing minimum wages of particular employee groups. There were no
across-the-board increases to all employees; increases were required only as

regards those specified therein. Therefore, it was incorrect for MMEU to claim
that all its members became automatically entitled to across-the-board
increases upon the effectivity of the issuances in question. Even if there were
wage distortions, the appropriate remedy thereunder prescribed is for the
employer and the union to "negotiate" to correct them; or, if the dispute be
not thereby resolved, to thresh out the controversy through the grievance
procedure in the collective bargaining agreement, or through conciliation or
arbitration.
8. Sanyo vs. Canizares, 211 SCRA 361
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FACTS:
PSSLU had an existing CBA with Sanyo. The CBA contained a union
security clause. PSSLU wrote Sanyo that the private respondents/employees
were notified that their membership with PSSLU were cancelled for anti-union,
activities, economic sabotage, threats, coercion and intimidation, disloyalty
and for joining another union called KAMAO. In accordance with the security
clause of the CBA, Sanyo dismissed the employees. The dismissed employees
filed a complaint with the NLRC for illegal dismissal. Named respondent were
PSSLU and Sanyo. PSSLU filed a motion to dismiss the complaint alleging that
the Labor Arbiter was without jurisdiction over the case, relying on Article
217(c) of the Labor Code which provides that cases arising from the
interpretation or implementation of the CBA shall be disposed of by the labor
arbiter by referring the same to the grievance machinery and voluntary
arbitration. Nevertheless, the Labor Arbiter assumed jurisdiction. Public
respondent through the Sol Gen, argued that the case at bar does not involve
an "interpretation or implementation" of a collective bargaining agreement or
"interpretation or enforcement" of company policies but involves a
"termination." Where the dispute is just in the interpretation, implementation
or enforcement stage, it may be referred to the grievance machinery set up in
the CBA or by voluntary arbitration. Where there was already actual
termination, i.e., violation of rights, it is already cognizable by the Labor
Arbiter.
ISSUE:
Whether or not the Labor Arbiter has jurisdiction over the case.
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RULING:
The Court held that the Labor Arbiter and not the Grievance
Machinery
provided for in the CBA has the jurisdiction to hear and decide the case.
While it appears that the dismissal of the private respondents was made upon
the recommendation of PSSLU pursuant to the union security clause provided
in the CBA, the Court is in the opinion that these facts do not come within the
phrase "grievances arising from the interpretation or implementation of (their)
Collective Bargaining Agreement and those arising from the interpretation or
enforcement of company personnel policies," the jurisdiction of which pertains
to the Grievance Machinery or thereafter, to a voluntary arbitrator or panel of
voluntary arbitrators. No grievance between them exists which could be
brought to a grievance machinery. The problem or dispute in the present case
is between the union and the company on the one hand and some union and
non-union members who were dismissed, on the other hand. The dispute has
to be settled before an impartial body. The grievance machinery with members
designated by the union and the company cannot be expected to be impartial
against the dismissed employees. Due process demands that the dismissed
workers grievances be ventilated before an impartial body. Since there has
already been an actual termination, the matter falls within the jurisdiction of
the Labor Arbiter.
9. Salaw vs. NLRC. 202 SCRA 7

FACTS:
Herein petitioner Salaw was employed by respondent bank as a credit
investigator-appraiser. The Criminal Investigation Service of the Philippine
Constabulary extracted from the petitioner, without the assistance of counsel,
a sworn statement revealing his illegal actions for acquiring money together
with a co-employee by selling 20sewing machines and electric generators
which had been foreclosed by the Bank for P60,000.00, and dividing the
proceeds thereof in equal shares between the two of them. On December 5,
1984, petitioner requested to appear before the banks Personnel Discipline
and Investigation Committee. His request was granted. However, the
committee added that Salaw must come without counsel. On April 1, 1985
Salaw was terminated for alleged serious misconduct or wilful disobedience
and fraud. Subsequently, he filed a complaint of illegal dismissal with the
NLRC. Labor arbiter Villarente, Jr. rendered the decision that Salaw was illegally
dismissed.
ISSUE:
Whether or not the dismissal of petitioner by private respondents was
legally justified?
RULING:
No. Under the Labor Code, for a dismissal to be legal, it must follow the
2-fold requirements, which are substantive and procedural. Not only must the
dismissal be for a valid cause as provided by law, but the rudimentary
equirements of due process - notice and hearing must also be observed. The
petitioner was terminated without due process of law because he was not
given the right to a proper hearing. He was denied of his constitutional right
when his subsequent request to refute the allegations against him was
granted and a hearing was set without counsel or representative. As stated
in section 12, Article 3 of the Constitution any person under investigation for
the commission of an offense shall have the right to have competent and
independent counsel preferably of his own choice. If a person cannot afford
the service of counsel, he must be provided with one.The right to counsel, a
very basic requirement of substantive due process, has to be observed.
Indeed, the rights to counsel and to due process of law are two of the
fundamental rights guaranteed by the 1987 Constitution to any person under
investigation, be the proceeding administrative, civil, or criminal.
10. Tanduay Distillery Labor Union vs. Tanduay Distillery, Inc. and
NLRC, 149 SCRA 470
FACTS:
Private respondents were all employees of Tanduay Distillery, Inc., (TDI)
and members of the Tanduay Distillery Labor Union (TDLU), a duly organized
and registered labor organization and the exclusive bargaining agent of the
rank and file employees of the petitioner company. A Collective Bargaining
Agreement (CBA), was executed between TDI and TDLU. The CBA was duly
ratified by a majority of the workers in TDI including herein private
respondents and contained a union security clause which provides that all
workers who are or may during the effectivity of the CBA, become members of
the Union in accordance with its Constitution and By-Laws shall, as a condition
of their continued employment, maintain membership in good standing in the
Union for the duration of the agreement.
While the CBA was in effect and within the contract bar period the
private respondents joined another union, the Kaisahan Ng Manggagawang
Pilipino (KAMPIL) and organized its local chapter in TDI. KAMPIL filed a petition
for certification election to determine union representation in TDI, which
development compelled TDI to file a grievance with TDLU. TDLU created a
committee to investigate its erring members in accordance with its by-laws
which are not disputed by the private respondents. Thereafter, TDLU, through
the Investigating Committee and approved by TDLU's Board of Directors,
expelled the private respondents from TDLU for disloyalty to the Union. By
letter, TDLU notified TDI that private respondents had been expelled from
TDLU and demanded that TDI terminate the employment of private,

respondents because they had lost their membership with TDLU.
The private respondents were later on terminated. In their petition,
private respondents contend that their act of organizing a local chapter of
KAMPIL and eventual filing of a petition for certification election was pursuant
to their constitutional right to self-organization.
ISSUE:
Whether or not TDI was justified in terminating private respondents'
employment in the company on the basis of TDLU's demand for the
enforcement of the Union Security Clause of the CBA between TDI and TDLU;
and
RULING:
The dismissal of an employee pursuant to a demand of the majority
union in accordance with a union security agreement following the loss of
seniority rights is valid and privileged and does not constitute an unfair labor
practice. Article 249 (e) of the Labor Code as amended specifically recognizes
the closed shop arrangement as a form of union security. The closed shop, the
union shop, the maintenance of membership shop, the preferential shop, the
maintenance of treasury shop, and check-off provisions are valid forms of
union security and strength. They do not constitute unfair labor practice nor
are they violations of the freedom of association clause of the Constitution.
There is no showing in these petitions of any arbitrariness or a violation of the
safeguards enunciated in the decisions of this Court interpreting union security
arrangements brought to us for review.
The Labor Code mandates that "no certification election shall be
entertained if a CollectiveBargaining Agreement which has been submitted in
accordance with Article 231 of the Codeexists between the employer and a
legitimate labor organization except within sixty (60) daysprior to the
expiration of the life of such collective agreement (Art. 257). The
membersignorance of nor their dissatisfaction with the terms and condition
would not justify breachthereof or the formation by them of a union of their
own
11. Pantranco vs. Public Service Commission, 70 Phil. 221

FACTS:
PANTRANCO, a holder of an existing Certificate of Public Convenience is
applying to operate additional buses with the Public Service Commission
(PSC). The PSC granted the application but added several conditions for
PANTRANCOs compliance.
ISSUE:
PANTRANCO is questioning whether PSC can impose said conditions. If
so, wouldnt this power of the PSC, as provided for under sec. 15, CA 146,
constitute undue delegation of powers?
RULING:
Supreme Court held that there was valid delegation of powers. The
theory of the separation of powers is designed by its originators to secure
action at the same time forestall over action which necessarily results from
undue concentration of powers and thereby obtain efficiency and prevent
deposition. But due to the growing complexity of modern life, the
multiplication of subjects of governmental regulation and the increased
difficulty of administering laws, there is a constantly growing tendency toward
the delegation of greater powers by the legislature, giving rise to the adoption,
within certain limits, of the principle of subordinate legislation. All that has
been delegated to the Commission is the administrative function, involving the
use of discretion to carry out the will of the National Assembly having in view,
in addition, the promotion of public interests in a proper and suitable manner.
12. Abe vs. Foster Wheeler Corp., 110 Phil. 221

FACTS:
In a complaint filed against Foster Wheeler Corp and Caltex, herein
plaintiffs contends that they were discharged from employment without notice
and demanded recovery of separation pay and other necessary benefits. It is
contended for the defendants that since all the contracts entered into with
plaintiffs were executed before Republic Act 1052 became effective, said Act
cannot be given such effect as to make it applicable even to contracts already
existing upon its approval as were the contracts here it would become
unconstitutional under the rule prohibiting impairment of contracts.
ISSUE:
Is the contention of the defendant meritorious?
RULING:
NO. The freedom of contract under our system of government is not
meant to be absolute. It is understood to be subject to reasonable legislative
regulations aimed at the promotion of public, health, moral, safety and
welfare. By its very nature, Republic Act 1052 is a measure intended to
provide protection to the workingmen and its enactment is a valid exercise of
the police power of the State
13. Asia Bed Factory vs. National Bed and Kapok Industries Workers
Union, 100 Phil. 837
FACTS:
On June 2, 1953, the petitioner Asia Bed Factory and respondent labor
union entered into a CBA which contains that Employees paid on a monthly
basis and shall be paid on the daily basis at rates based on their present
compensation plus the additional increase of (P0.30) a day, employees shall
be provided with work on Sundays at time and one-half and in the event that
no work on Sundays is available through no fault of the employee or
employees, they shall be entitled to payment of the equivalent of their wages
as if they had performed referred to that day. In the event that an employee
shall absent himself for no excusable reasons, the Company shall be entitled
to reduce the corresponding wage or wages.
The petitioner faithfully complied with the terms until it was forced to
suspend its business on Sundays in obedience to the provisions of RA No. 946,
known as the Blue Sunday Law, which took effect on September 8, 1953,
prohibiting the opening of any commercial, industrial or agricultural enterprise
on Sundays. Petitioner's employees claimed that under the terms of their
bargaining agreement they were entitled to their Sunday wages even if they
did not work on those days, petitioner filed a petition in the Court of First
Instance of Manila for a declaratory judgment that it ceased to be bound by
the above-quoted clause of the collective bargaining agreement when the Blue
Sunday Law went into effect.
The respondent labor union filed a motion for a summary judgment
declaring that petitioner's employees were entitled to Sunday wages
notwithstanding the passage of the Blue Sunday Law.
The lower court rendered judgment holding that, in view of the provision
of the Blue Sunday Law prohibiting the opening of commercial and industrial
establishments on Sundays, the petitioner was relieved from compliance with
its agreement "to provide its employees with work on Sundays and to pay
them for Sundays." Reconsideration of the judgment having been denied, the
respondents appealed directly to this Court on a pure question of law.
ISSUE:
Whether the approval of the Blue Sunday Law relieved petitioner from
complying with its agreement to pay its laborers Sunday wages.
RULING:
The lower court answers the question in the affirmative on the ground
that the clause in question provided for mutual prestations between the
contracting parties the petitioner to provide its employees with work on
Sundays and pay them for such work and the employees to do the work given
them on those days and that these prestations became impossible of
performance when the Blue Sunday Law prohibited the opening of commercial
and industrial establishments on Sundays.
To this view we are inclined to agree. The bargaining agreement puts the
employees on a daily basis at rates of compensation therein provided, with the
express stipulation that work shall be provided on Sundays and at higher
compensation. As the trial court says, payment for Sundays is in return for
work done. It is true the agreement provides for the payment of wages on
Sundays if no work is made available on those days through no fault of the
employees. But the fact is that the agreement does give the employer the
right to provide work on Sundays. And it would seem the height of injustice to
deprive the employer of this right without, at the same time, relieving him of
the obligation to pay the employees.
Section 6 of the Blue Sunday Law which says that "it shall be unlawful
for any employer to reduce the compensation of any of his employees or
laborers by reason of the provisions of this Act" does not militate against this
view. There is here no attempt on the part of the employer to reduce the
compensation of his employees. It is the law itself which in effect reduces that
compensation by depriving the employees of work on Sundays, thus
preventing them from earning the wages stipulated in the bargaining
agreement.
There is nothing to the contention that to apply the Blue Sunday Law to
present agreement would infringe the constitutional prohibition against the
impairment of the obligations of contract. The Blue Sunday Law is intended for
the health, well-being and happiness of the working class and is a legitimate
exercise of the police power.
In view of the foregoing, the judgment appealed from is affirmed,
without pronouncement as to costs.
14. Kaisahan vs. Gotamco Sawsmills, 80 Phil. 521
FACTS:
The Kaisahan ng Manggagawa ng Kahoy sa Pilipinas declared a strike
against Gotamco Saw Mill because the latter did not accede to the formers
request of a salary increase. While the case being heard by the court of
industrial relations, the parties reached a temporary wage arrangement and
the workers were ordered to go back to work while the saw mill was ordered to
increase the salaries of the workers by P2 and let them take home small
pieces of lumber to be utilized as firewood and was enjoined from laying-off
suspending or dismissing any laborer affiliated with the petitioning union.
Conversely, the workers were enjoined from staging walkouts or strikes during
the pendency of the hearing. Gotamco Saw Mill subsequently filed an urgent
motion asking that the petitioning union be held in contempt of court for
having staged a strike during the pendency of the main case for picketing on
the premises of the saw mill and for grave threats which presented the
remaining laborers from working. The union alleged that one of its
representatives conferred with the management of the saw mill but instead of
entertaining their grievances, the saw mill ordered the stoppage of the work
and employed four new Chinese laborers without express authority of the
court and in violation of Section 19 of Commonwealth Act 103. The court ruled
that there was a violation of the previous order of the court by the union which
warranted the commencement of contempt proceedings and that the saw mill
did violate Section 19 of CA No. 103. Said provision is unconstitutional for
being in violation of the organic proscription of involuntary servitude. Among
other things, Section 19 lays down the implied condition that when any
dispute between the employer or landlord and the employee tenant or laborer
has been submitted to the court for settlement or arbitration pursuant to the
provisions of the Act No. 103 and pending award or decision by it the
employee tenant or laborer shall not strike or walk out of his employment
when so joined by the court after hearing and when public interest so requires
and if he has already done so that he shall forthwith return to it upon order of
the court which shall be issued only after hearing when public interest so
requires or when the dispute cannot in its opinion be promptly decided or
settled. Thus the voluntariness of the employees entering into such a contract
of employment, he has a free choice between entering into it or not with such
an implied condition negatives the possibility of involuntary servitude ensuing.
ISSUE:
Whether the previous order of the court which ordered the union
laborers to go back to work is unconstitutional for being in violation of the
organic proscription of involuntary servitude.
RULING:
The order of the court was for the striking workers to return to their
work. That order was made after hearing and Section 19 authorizes such order
when the dispute cannot in its opinion be promptly decided or settled. In other
words, the order to return, if the dispute can be promptly decided or settled,
may be issued only after hearing when public interest so requires, but if in
the courts opinion the dispute cannot be promptly decided or settled, then it
is also authorized after hearing to issue the order: we construe the provision to
mean that the very impossibility of prompt decision or settlement of the
dispute confers upon the power to issue the order for the reason that the
public has an interest in presenting undue stoppage or paralyzation of the
wheels of industry.
Several laws promulgated which apparently infringe the human rights of
individuals were subjected to regulation by the State basically in the exercise
of its paramount police power.
And, as well stated by the courts resolution of July 11, 1947, this
impossibility of prompt decision or settlement was a fact which was borne out
by the entire record of the case and did not need express statement in the
order. Finally, this Court is not authorized to review the findings of fact made
by the Court of Industrial Relations (Commonwealth Act No. 103, section 15, as
amended by Commonwealth Act 559, section 2; Rule 44, Rules of Court)
For all these considerations, the orders and resolution of the Court of
Industrial Relations assailed by the instant petition are hereby affirmed, with
costs against petitioner-appellant.
So ordered.
15. SSS Employees Association, et. al. vs. CA, et. al, 175 SCRA 686
FACTS:
On June 11, 1987, the SSS filed with the Regional Trial Court of Quezon
City a complaint for damages with a prayer for a writ of preliminary injunction
against petitioners, alleging that on June 9, 1987, the officers and members of
SSSEA staged an illegal strike and baricaded the entrances to the SSS
Building, preventing non-striking employees from reporting for work and SSS
members from transacting business with the SSS; that the strike was reported
to the Public Sector Labor - Management Council, which ordered the strikers to
return to work; that the strikers refused to return to work; and that the SSS
suffered damages as a result of the strike. The complaint prayed that a writ of
preliminary injunction be issued to enjoin the strike and that the strikers be
ordered to return to work; that the defendants (petitioners herein) be ordered

to pay damages; and that the strike be declared illegal.
It appears that the SSSEA went on strike after the SSS failed to act on
the union's demands, which included: implementation of the provisions of the
old SSS-SSSEA collective bargaining agreement (CBA) on check-off of union
dues; payment of accrued overtime pay, night differential pay and holiday
pay; conversion of temporary or contractual employees with six (6) months or
more of service into regular and permanent employees and their entitlement
to the same salaries, allowances and benefits given to other regular
employees of the SSS; and payment of the children's allowance of P30.00, and
after the SSS deducted certain amounts from the salaries of the employees
and allegedly committed acts of discrimination and unfair labor practices.
ISSUE:
Whether or not employees of the Social Security System (SSS) have the
right to strike.
RULING:
The 1987 Constitution, in the Article on Social Justice and Human Rights,
provides that the State "shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with law" [Art. XIII, Sec.
31].
Resort to the intent of the framers of the organic law becomes helpful in
understanding the meaning of these provisions. A reading of the proceedings
of the Constitutional Commission that drafted the 1987 Constitution would
show that in recognizing the right of government employees to organize, the
commissioners intended to limit the right to the formation of unions or
associations only, without including the right to strike.
Considering that under the 1987 Constitution "the civil service embraces
all branches, subdivisions, instrumentalities, and agencies of the Government,
including government-owned or controlled corporations with original charters"
[Art. IX(B), Sec. .2(l) see also Sec. 1 of E.O. No. 180 where the employees in
the civil service are denominated as "government employees"] and that the
SSS is one such government-controlled corporation with an original charter,
having been created under R.A. No. 1161, its employees are part of the civil
service [NASECO v. NLRC, G.R. Nos. 69870 & 70295, November 24,1988] and
are covered by the Civil Service Commission's memorandum prohibiting
strikes. This being the case, the strike staged by the employees of the SSS was
illegal.
WHEREFORE, no reversible error having been committed by the Court of
Appeals, the instant petition for review is hereby DENIED and the decision of
the appellate court dated March 9, 1988 in CA-G.R. SP No. 13192 is AFFIRMED.
Petitioners' "Petition/Application for Preliminary and Mandatory Injunction"
dated December 13, 1988 is DENIED.
16. Bangasilan vs. CA, July 31, 1997

FACTS:
Petitioners, except Rodolfo Mariano, were among the 800 public school
teachers who staged mass actions on September 17 to 19, 1990 to dramatize
their grievances concerning, in the main, the alleged failure of the public
authorities to implement in a just and correct manner certain laws and
measures intended for their material benefit.
On September 17, 1990, the Secretary of the Department of Education,

Culture and Sports (DECS) issued a Return-to-Work Order. Petitioners failed to
comply with said order, hence they were charged by the Secretary with grave
misconduct; gross neglect of duty; gross violation of Civil Service law, rules
and regulations and reasonable office regulations; refusal to perform official
duty; gross insubordination; conduct prejudicial to the best interest of the
service; and absence without official leave in violation of PD 807, otherwise
known as the Civil Service Decree of the Philippines. They were simultaneously
placed under preventive suspension.
Despite due notice, petitioners failed to submit their answer to the
complaint. On October 30, 1990, the DECS Secretary rendered a decision
finding petitioners guilty as charged and dismissing them from the service
effective immediately.
Acting on the motions for reconsideration filed by petitioners Bangalisan,
Gregorio, Cabalfin, Mercado, Montances and Pagpaguitan, the Secretary
subsequently modified the penalty of dismissal to suspension for nine months
without pay.
Petitioners then filed a petition for certiorari with this Court but, on
August 29, 1995, their petition was referred to the Court of Appeals pursuant
to Revised Administrative Circular No. 1-95.
On October 20, 1995, the Court of Appeals dismissed the petition for
lack of merit. Petitioners motion for reconsideration was also denied by
respondent court, hence the instant petition.
ISSUE:
Whether or not the mass action launched by the public school teachers
during the period from September up to the first half of October, 1990 was a
strike.
RULING:
It is an undisputed fact that there was a work stoppage and that
petitioners purpose was to realize their demands by withholding their services.
The fact that the conventional term strike was not used by the striking
employees to describe their common course of action is inconsequential, since
the substance of the situation, and not its appearance, will be deemed to be
controlling.
The ability to strike is not essential to the right of association. In
the absence of statute, public employees do not have the right to engage in
concerted work stoppages for any purpose.
Further, herein petitioners, except Mariano, are being penalized not
because they exercised their right of peaceable assembly and petition for
redress of grievances but because of their successive unauthorized and
unilateral absences which produced adverse effects upon their students for
whose education they are responsible. The actuations of petitioners definitely
constituted conduct prejudicial to the best interest of the service, punishable
under the Civil Service law, rules and regulations.
As aptly stated by the Solicitor General, It is not the exercise by the
petitioners of their constitutional right to peaceably assemble that was
punished, but the manner in which they exercised such right which resulted in
the temporary stoppage or disruption of public service and classes in various
public schools in Metro Manila. For, indeed, there are efficient but nondisruptive avenues, other than the mass actions in question, whereby
petitioners could petition the government for redress of grievances.
The CSC made specific findings that, unlike petitioner Mariano, they
indeed participated in the mass actions. It will be noted that it was their
participation in the mass actions that was the very basis of the charges
against them and their subsequent suspension.
WHEREFORE, the decision of the Court of Appeals is hereby
AFFIRMED, but with the MODIFICATION that petitioner Rodolfo Mariano shall be
given back wages without deduction or qualification from the time he was
suspended until his actual reinstatement which, under prevailing
jurisprudence, should not exceed five years.
17. Palmeria vs. NLRC, 247 SCRA 57
FACTS:
Petitioner Pedro Sr, was hired by private respondent Coca-cola
Bottlers Phil Inc (CCBPL) in June 1977 as laborer/bottling crew with salary of
P36.00 a day plus ECOLA of P17.00 a day. On April 30, 1984, CCBPI entered
into contract of service with co-respondent Lipercon Services, Inc. the contract
as extended on January 1, 1986 for another year. Under the contract, Lipercon
was to provide CCBPI certain work and services which are not regular or
normal to the establishment nor directly related to the principal business of
the CCBPI, Naga Plant.
Petitioner alleged that after the contract of service was executed,
CCBPI made it appear that it was no longer its employee but that of Lipercon.
He was able to establish, however, that he still worked with the CCBPI,
performing jobs normally necessary in the business of CCBPI, using its tools
and equipment and under the supervision of its supervisors.
On February 15, 1986, petitioner was dismissed from his
employment. He was not allowed to enter the premises of CCBPI. He then filed
a complaint principally for illegal dismissal against CCBPI and Lipercon. CCBPI
maintained that petitioner is not its employee. Lipercon claimed that it is an
independent contractor and that petitioner is its contractual employee. It
further averred that petitioners employment depends on needs of its clients,
more specifically CCBPI. Allegedly, CCBPI had informed Lipercon that it no
longer needed the services of petitioner prayed for reinstatement with full
backwages and other monetary benefits. Respondent NLRC, in a resolution
dated October 21, 1993 affirmed the decision of Arbiter Bose but refused to
reinstate petitioner. It likewise rejected the claim of petitioner for damages as
bereft of basis. Hence, this petition for Certiorari.
ISSUE:
Whether or not NLRC gravely abused its discretion when it refused to
reinstate the petitioner.
RULING:
We hold that public respondent gravely abused its discretion when it
refused to reinstate petitioner, a victim of illegal dismissal. Section 3 Article
XIII of the Constitution guarantees to our workers security of tenure. Article
279 of the Labor Code, as amended, implements this constitutional guarantee
by providing: xxx. Any employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him
up to the time of his actual reinstatement.
The importance of the remedy of reinstatement to an unjustly
dismissed employee cannot be overstated. It is the remedy that most
effectively restores the right of an employee to his employment and all its
benefits before its violation by his employer. Yet despite all its virtues,
reinstatement does not and cannot fully vindicate all of an employees injuries
for reinstatement no more than compensates for his financial damages. It
cannot make up for his other sufferings, intangible yet valuable, like the
psychological devastation which inevitably visits him after a sudden
displacement from work.
The first right of unjustly dismissed employee is therefore
reinstatement to work and it is our duty to direct it except if his reinstatement
will most probably do him less good and more harm. In determining whether
or not we should order an employees reinstatement, our eyes should focus on
the need to protect the over-all interest of the dismissed employee and not on
the necessity of preserving the interest of the employer who caused the unjust
dismissal. To give more sensitivity to the interest of the employer who violated
the law is to make a travesty of the constitutional right of an employee to
security of tenure. We do not treat our workers as merchandise and their right
to security of tenure cannot be valued in precise peso-and-centavo terms. It is
a right which cannot be allowed to be devalued by the purchasing power of
employers who are only too willing to bankroll the separation pay of their
illegally dismissed employees to get rid of them.
In view whereof, the Oct 21, 1993 resolution is modified and CCBPI
ordered to reinstate the petitioner instead of paying separation pay in accord
to Art 279 of Labor Code as amended. In all other aspects, the appealed
Resolution is affirmed.
18. People vs. Turda, 233 SCRA 702
FACTS:
GENER TURDA together with his wife Milagros Turda and Carmen
Manera, was charged with illegal recruitment in Crim. Case No. 57218 and two
(2) counts of estafa in Crim. Cases Nos. 57219 and 57220. However, Milagros
Turda and Carmen Manera were never apprehended so that only Gener Turda
could be arraigned and tried. As the three (3) cases involve the same factual
milieu, they were jointly tried.
In August 1986, appellant Turda, Milagros and Carmen could secure an
overseas job for complainant Florante in Italy and for his sister Shirley Cabalu
in France. Florante and Shirley accepted the offer and paid P70,000.00.
However, he did not ask for a receipt.
Despite several promises, Florante and Shirley were still unable to leave.
Complainant finally demanded the return of their money, but the Turdas failed
to give their money back. Consequently, Florante Rosales went to the Office of
the City Fiscal of Quezon City to file the corresponding complaint.
On September 1987, another complainant, Celina Andan, learned that
her application for an immigrant visa with the Canadian Embassy was denied.
After the denial of Celina Andan's application, Gener and Mila undertook the
processing of Celina's travel papers for a downpayment of P25,000.00 with the
promise to refund the amount if she would not be able to leave for Canada
within 45 days. However, should they succeed, Celina would have to pay them
an additional amount of P35,000.00 upon delivery to her of her visa.
On 14 September 1987, the mother of Celina gave a check for
P14,500.00 and cash of P500.00 to Mila for which the latter gave a receipt in
the presence of appellant Gener. On 22 September 1987, Celina's mother
again gave a check to the Turdas in the amount of P10,000.00 for which a
receipt was likewise issued by Milagros Turda. Celina asked spouses but failed
to return money, she decided to charge the Turda spouses with estafa and
illegal recruitment.
ISSUE:
Whether or not petitioner is in conspiracy on large-scale illegal
recruitment.
RULING:
Art. 38 of the Labor Code, as amended by P.D. No. 2018, read Art. 38. Illegal recruitment. - (a) Any recruitment activities, including the
prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority shall be deemed
illegal and punishable under Article 39 of this code. The Ministry of Labor and
Employment or any law enforcement officer may initiate complaints under this
Article. (b) Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage and shall be
penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by
a group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more
persons individually or as a group.
Article 13, (b), of the same Code defines recruitment as "any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring
workers, and includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for profit or not; provided, that any
person or entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in recruitment
and placement."
A review of the testimonies of complainants leads us to no other
conclusion than that appellant, his wife, and Manera were conspirators in the
illegal recruitment business by contributing acts in pursuance of the financial

success of their joint venture for their mutual benefit.
There is no doubt that the acts of appellant and his wife conclusively
established a common criminal design mutually deliberated upon and
accomplished through coordinated moves. Such acts constitute enlisting,
contracting or procuring workers or promising them overseas employment
under Art. 13, par. (b), of the Labor Code. Since appellant did not have the
license or authority to recruit and yet recruited at least three (3) persons, he is
guilty of large-scale illegal recruitment under Art. 38, penalized under Art. 39,
of the Labor Code.
19. People vs. Panis, 142 SCRA 664
FACTS:
On January 9, 1981, four information were filed in the in the Court of First
Instance (CFI) of Zambales and Olongapo City alleging that herein private
respondent Serapio Abug, "without first securing a license from the Ministry of
Labor as a holder of authority to operate a fee-charging employment agency,
did then and there wilfully, unlawfully and criminally operate a private fee
charging employment agency by charging fees and expenses (from) and
promising employment in Saudi Arabia" to four separate individuals. Abug filed
a motion to quash contending that he cannot be charged for illegal
recruitment because according to him, Article 13(b) of the Labor Code says
there would be illegal recruitment only "whenever two or more persons are in
any manner promised or offered any employment for a fee.
Denied at first, the motion to quash was reconsidered and granted by
the Trial Court in its Orders dated June 24, 1981, and September 17, 1981. In
the instant case, the view of the private respondents is that to constitute
recruitment and placement, all the acts mentioned in this article should
involve dealings with two or more persons as an indispensable requirement.
On the other hand, the petitioner argues that the requirement of two or more
persons is imposed only where the recruitment and placement consists of an
offer or promise of employment to such persons and always in consideration of
a fee.
ISSUE:
Whether or not Article 13(b) of the Labor Code provides for the
innocence or guilt of the private respondent of the crime of illegal recruitment
RULING:
The Supreme Court reversed the CFIs Orders and reinstated all four
information filed against private respondent.
The Article 13(b) of the Labor Code was merely intended to create a
presumption, and not to impose a condition on the basic rule nor to provide an
exception thereto.
Where a fee is collected in consideration of a promise or offer of
employment to two or more prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in the act of recruitment
and placement. The words "shall be deemed" create the said presumption.
20. Rase vs. NLRC, 327 SCRA 523

FACTS:
The petitioners are the parents of Marilyn. She was recruited by private
respondent G & M (Phils.), Inc. (hereinafter G & M) and was subsequently
deployed to respondent Riyadh Medical Center in Saudi Arabia. She was to
work as a nursing aide with a salary of US$400.00 monthly. 3 On 2 July 1987,
Marilyn left for Saudi Arabia.
On 6 March 1989, Marilyn died of acute viral encephalitis. At the time of
her death, Marilyn was not working with the Riyadh Medical Center but with
Sheik Fahad Al Owaidah as a domestic helper to the Sheik's fourth wife.
On 20 March 1989, the petitioners filed a complaint before the POEA for
recovery of salary differential, for death and burial benefits, and for
reimbursement of the P50,000.00 which they had spent for the recovery of the
remains of Marilyn and for her burial. The petitioners alleged therein that a few
days after she had arrived in Saudi Arabia, Marilyn was made to work as a
domestic helper in violation of the contract she signed and which was
approved by the POEA. In its answer, G & M admitted the factual allegations
except that on Marilyn's change of employment from nursing aide to domestic
helper and the expenditure of P50,000.00 which it denied for lack of
knowledge or information sufficient to form a belief as to its truth. G & M
alleged that Marilyn had never complained of any contract violation, that her
parents never reported that Marilyn was not working as a nursing aide, and
that Marilyn's death was not work-connected. 26 October 1989, it requested
that it be allowed to present additional evidence on or before 27 November
1989. 8Then on 12 February 1990, it filed a motion for extension of time to
adduce additional evidence, wherein it admitted that its principal had
transmitted to it documents "consisting of the certification as to the
deceased's cause of death, her contract of employment as nursing aide and
other documents showing that the foreign principal had shouldered all
expenses for hospitalization and repatriation," but that it still requested for
other documents to support its defense. 9 It was only on 8 March 1990 when it
finally submitted its documentary exhibits, the most important of which is the
alleged acceptance by the Riyadh Medical Center of Marilyn's resignation
effective 15 August 1987 (Exhibit "4").
ISSUE
1. Whether or not respondent is liable for death benefits; and
2. Whether or not respondent is liable for salary differential.
and resolved them thus:
RULING:
The complainants have not sufficiently shown, through evidence that
their daughter was forced to seek employment elsewhere upon arrival in
Riyadh. The POEA Administrator attributed the cause of Marilyn's death to the
deleterious elements to which she had been exposed. Indeed, there is a
possibility that she acquired viral encephalitis at her work environment.
Unfortunately, there is not enough evidence to even make a reasonable
presumption that her work environment caused her to contract encephalitis.
Even her letters are devoid of any hint that as a domestic helper she was
exposed to any unhealthy or injurious conditions. Hence, we do not agree with
the POEA Administrator that the claim for death benefits should be allowed.
Consequently the claim for burial allowance should likewise be denied.
21. Kiaveness Maritime Agency vs. Palmos, 232 SCRA 448

FACTS:
The POEA and the NLRC held that petitioners companies had failed to
discharge their burden of establishing the existence of a just or authorized
cause for the dismissal of private respondents, who were accordingly
considered as illegally dismissed and as entitled to an award of salaries
corresponding to the unexpired portion of their contracts of employment as
seamen and unpaid and underpaid salaries. Petitioner companies were held
solidarily liable for the amount found to be due to Palmos and Sevilla. Upon
the other hand, petitioners' complaint for disciplinary action and
reimbursement of repatriation expenses was dismissed for lack of
merit.chanroblesvirtualawlibrarychanrobles virtual law library
In the present Petition for Certiorari, Denholm and Klaveness claim that
the NLRC had committed grave abuse of discretion in disregarding the
evidence which petitioners had submitted to prove their case, and in failing to
find that petitioners had terminated the services of Palmos and Sevilla for a
just or authorized cause and with due process. The Supreme Court granted
petitioners' prayer for a temporary restraining order enjoining the NLRC from
executing its Decision dated 11 October 1991, in order to prevent the present
Petition becoming in effect moot and academic. First, a procedural point.
Palmos and Sevilla ask the Court to dismiss the present Petition for having
been prematurely filed, petitioners having failed to file a motion for
reconsideration with the NLRC before instituting the present Petition for
Certiorari.
ISSUE:
Whether or not the petition for certiorari was meritorious?
RULING:
The basic conclusion reached by the POEA and the NLRC, that is, that
petitioners had not succeeded in showing that the dismissal of Palmos and
Sevilla had been due to a just or authorized cause. We must conclude,
accordingly, that petitioners have failed to show any grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the NLRC, when that
agency affirmed in to the decision of the POEA
ACCORDINGLY, for all the foregoing, the Petition for Certiorari is hereby
DISMISSED for lack of merit.
22. Rances vs. NLRC, 246 SCRA 250

FACTS:
Petitioners herein were among the members of the respondent union
who were expelled by the latter fordisloyalty in that they allegedly joined the
NAFLU a large federation. Because of the expulsion, petitioners were
dismissed by respondents Corporation. Petitioners sued for reinstatement and
backwages stating their dismissal was without due process. Losing both in the
decisions of the Labor Arbiter and the National Labor Relations Commission
(NLRC), they elevated their cause to the Supreme Court.
Respondent Polybag Workers Union as already stated expelled 125
members on the ground of disloyalty and acts inimical to the interests of the
Union (Resolution No. 84, series of 1982, Rollo, p. 16) based on the findings
and recommendations of the panel of investigators. Both the Labor Arbiter and
the NLRC found the Collective Bargaining Agreement and the "Union Security
Clause" valid and considered the termination of the petitioners justified
thereunder, for having committed an act of disloyalty to the Polybag Workers
Union by having affiliated with and having joined the NAFLU, another labor
union claiming jurisdiction similar to the former, while still members of
respondent union (Rollo, pp. 45-46).
Among the disputed portions of the NLRC decision is its finding that it
has been substantially proven that the petitioners committed acts of disloyalty
to their union as a consequence of the filing by NAFLU for and in their behalf of
the complaint in question (Rollo, p. 46).
ISSUE:
Whether or not they were in good faith.
RULING:
It is evident that private respondents were in bad faith in dismissing
petitioners. They, the private respondents, are guilty of unfair labor practice.
The decision of respondent National Labor Relations Commission in
NLRC-NCR-11-6881-82 dated April 26, 1984 is REVERSED and SET ASIDE; and
(2) respondent corporation is ordered: (1) to reinstate petitioners to their
former positions without reduction in rank, seniority and salary; (b) to pay
petitioners three-year backwages, without any reduction or qualification,
jointly and solidarily with respondent Union; and (c) to pay petitioners
exemplary damages of P500.00 each. Where reinstatement is no longer
feasible, respondents corporation and respondent union are solidarily ordered
to pay, considering their length of service their corresponding separation pay
and other benefits to which they are entitled under the law.
23. Alindao vs. Joson, 264 SCRA 211

FACTS:
Petitioner left for Saudi Arabia on 9 March 1988. Upon arrival, she was
met by a representative of her employer, the Dahem Clinic. She was told she
would stay at Alcobar until needed.
Two weeks later, the petitioners employer brought her to his residence
and was made to work as a domestic helper. Her employer did not treat her
well and paid her only 660 Saudi riyals. The unfair working conditions
prompted the petitioner to ask that she be sent home, but she was merely
returned to Alcobar. She worked for only a month and six days. From there,
she worked at several residences until she saved enough money to return
home.
She arrived in the Philippines on 7 July 1989, and filed with the POEA a
complaint against Hisham for breach of contract, violation of the terms and
conditions of its authority as a service contractor, and violation of the following
provisions of the Labor Code: Article 32 (requiring issuances of receipts for
fees paid), Article 34 (a) (prohibiting one from charging an amount greater
than that specified in the schedule of allowable fees), and Article 34(b)
(prohibiting one from furnishing false information in relation to recruitment or
employment [misrepresentation]).[2] The case was docketed as POEA Case
No. (L) 89-08-703.
A request for verification revealed that Hishams license as a service
contractor was to expire on 7 March 1991.[3]
ISSUE:
Whether the complainant is qualified to receive a refund?
RULING:
Respondent Hisham General Services is hereby ordered to refund
complainant the amount of P13,500.00 representing the excess amount of her
placement fee.(as Hisham was licensed merely as a service contractor, it was
authorized only to recruit workers for its own employment abroad and to
charge a maximum of P1,500.00 as documentation expenses.
Further, respondent is hereby ordered suspended for two (2) months or
pay a penalty fine of P20,000.00 for illegal exaction, and an additional penalty
of suspension for two (2) months or fine ofP20,000.00 for misrepresentation.
It is understood that the penalty of suspension shall be cumulatively
served.
24. Cadalin vs. POEA, 238 SCRA 721

FACTS:
This is a consolidation of 3 cases of SPECIAL CIVIL ACTIONS in the
Supreme Court for Certiorari.
On June 6, 1984, Cadalin, Amul and Evangelista, in their own behalf and
on behalf of 728 other OCWs instituted a class suit by filing an Amended
Complaint with the POEA for money claims arising from their recruitment by
ASIA INTERNATIONAL BUILDERS CORPORATION (AIBC) and employment by
BROWN & ROOT INTERNATIONAL, INC (BRI) which is a foreign corporation with
headquarters in Houston, Texas, and is engaged in construction; while AIBC is
a domestic corporation licensed as a service contractor to recruit, mobilize and
deploy Filipino workers for overseas employment on behalf of its foreign
principals.
The amended complaint sought the payment of the unexpired portion of
the employment contracts, which was terminated prematurely, and
secondarily, the payment of the interest of the earnings of the Travel and
Reserved Fund; interest on all the unpaid benefits; area wage and salary
differential pay; fringe benefits; reimbursement of SSS and premium not
remitted to the SSS; refund of withholding tax not remitted to the BIR;
penalties for committing prohibited practices; as well as the suspension of the
license of AIBC and the accreditation of BRII
On October 2, 1984, the POEA Administrator denied the Motion to Strike
Out of the Records filed by AIBC but required the claimants to correct the
deficiencies in the complaint pointed out.
AIB and BRII kept on filing Motion for Extension of Time to file their
answer. The POEA kept on granting such motions.
On November 14, 1984, claimants filed an opposition to the motions for
extension of time and asked that AIBC and BRII declared in default for failure
to file their answers.
On December 27, 1984, the POEA Administrator issued an order
directing AIBC and BRII to file their answers within ten days from receipt of the
order.
(at madami pang motions ang na-file, new complainants joined the case,
ang daming inavail na remedies ng both parties)
On June 19, 1987, AIBC finally submitted its answer to the complaint. At
the same hearing, the parties were given a period of 15 days from said date
within which to submit their respective position papers. On February 24, 1988,
AIBC and BRII submitted position paper. On October 27, 1988, AIBC and BRII
filed a Consolidated Reply, POEA Adminitartor rendered his decision which
awarded the amount of $824, 652.44 in favor of only 324 complainants.
Claimants submitted their Appeal Memorandum For Partial Appeal from the
decision of the POEA. AIBC also filed its MR and/or appeal in addition to the
Notice of Appeal filed earlier.
NLRC promulgated its Resolution, modifying the decision of the POEA.
The resolution removed some of the benefits awarded in favor of the
claimants. NLRC denied all the MRs. Hence, these petitions filed by the
claimants and by AlBC and BRII.
The case rooted from the Labor Law enacted by Bahrain where most of
the complainants were deployed. His Majesty Ise Bin Selman Al Kaifa, Amir of
Bahrain, issued his Amiri Decree No. 23 on June 16, 1176, otherwise known re
the Labour Law for the Private Sector. Some of the provision of Amiri Decree
No. 23 that are relevant to the claims of the complainants-appellants are as
follows:
Art. 79: x x x A worker shall receive payment for each extra hour
equivalent to his wage entitlement increased by a minimum of twenty-rive per
centurn thereof for hours worked during the day; and by a minimum off fifty
per centurn thereof for hours worked during the night which shall be deemed
to being from seven oclock in the evening until seven oclock in the
morning .
Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.
If employee worked, 150% of his normal wage shall be paid to him x x
x.
Art. 81; x x x When conditions of work require the worker to work on any
official holiday, he shall be paid an additional sum equivalent to 150% of his
normal wage.
Art. 84: Every worker who has completed one years continuous service
with his employer shall be entitled to Laos on full pay for a period of not less
than 21 days for each year increased to a period not less than 28 days after
five continuous years of service.
A worker shall be entitled to such leave upon a quantum meruit in
respect of the proportion of his service in that year.
Art. 107: A contract of employment made for a period of indefinite
duration may be terminated by either party thereto after giving the other
party prior notice before such termination, in writing, in respect of monthly
paid workers and fifteen days notice in respect of other workers. The party
terminating a contract without the required notice shall pay to the other party
compensation equivalent to the amount of wages payable to the worker for
the period of such notice or the unexpired portion thereof.
Art. Ill: x x x the employer concerned shall pay to such worker, upon
termination of employment, a leaving indemnity for the period of his
employment calculated on the basis of fifteen days wages for each year of the
first three years of service and of one months wages for each year of service
thereafter. Such worker shall be entitled to payment of leaving indemnity upon
a quantum meruit in proportion to the period of his service completed within a
year.
ISSUE:
1. WON the foreign law should govern or the contract of the parties.
(WON the complainants who have worked in Bahrain are entitled to the abovementioned benefits provided by Amiri Decree No. 23 of Bahrain).
2. WON the Bahrain Law should apply in the case. (Assuming it is
applicable WON complainants claim for the benefits provided therein have
prescribed.)
3. Whether or not the instant cases qualify as; a class suit (siningit ko
nalang)
(the rest of the issues in the full text of the case refer to Labor Law)
RULING:
1. NLRC set aside Section 1, Rule 129 of the 1989 Revised Rules on
Evidence governing the pleading and proof of a foreign law and admitted in
evidence a simple copy of the Bahrains Amiri Decree No. 23 of 1976 (Labour
Law for the Private Sector).
NLRC applied the Amiri Deere, No. 23 of 1976, which provides for greater
benefits than those stipulated in the overseas-employment contracts of the
claimants. It was of the belief that where the laws of the host country are more
favorable and beneficial to the workers, then the laws of the host country shall
form part of the overseas employment contract. It approved the observation of
the POEA Administrator that in labor proceedings, all doubts in the
implementation of the provisions of the Labor Code and its implementing
regulations shall be resolved in favor of labor.
The overseas-employment contracts, which were prepared by AIBC and
BRII themselves, provided that the laws of the host country became applicable
to said contracts if they offer terms and conditions more favorable than those
stipulated therein. However there was a part of the employment contract
which provides that the compensation of the employee may be adjusted
downward so that the total computation plus the non-waivable benefits shall
be equivalent to the compensation therein agree, another part of the same

provision categorically states that total remuneration and benefits do not fall
below that of the host country regulation and custom.
Any ambiguity in the overseas-employment contracts should be
interpreted against AIBC and BRII, the parties that drafted it. Article 1377 of
the Civil Code of the Philippines provides:
The interpretation of obscure words or stipulations in a contract shall
not favor the party who caused the obscurity.
Said rule of interpretation is applicable to contracts of adhesion where
there is already a prepared form containing the stipulations of the employment
contract and the employees merely take it or leave it. The presumption is
that there was an imposition by one party against the other and that the
employees signed the contracts out of necessity that reduced their bargaining
power.
We read the overseas employment contracts in question as adopting the
provisions of the Amiri Decree No. 23 of 1976 as part and parcel thereof. The
parties to a contract may select the law by which it is to be governed. In such
a case, the foreign law is adopted as a system to regulate the relations of
the parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth.
Instead of adopting the entire mass of the foreign law, the parties may just
agree that specific provisions of a foreign statute shall be deemed
incorporated into their contract as a set of terms. By such reference to the
provisions of the foreign law, the contract does not become a foreign contract
to be governed by the foreign law. The said law does not operate as a statute
but as a set of contractual terms deemed written in the contract.
A basic policy of contract is to protect the expectation of the parties.
Such party expectation is protected by giving effect to the parties own choice
of the applicable law. The choice of law must, however, bear some relationship
the parties or their transaction. There is no question that the contracts sought
to be enforced by claimants have a direct connection with the Bahrain law
because the services were rendered in that country.
2. NLRC ruled that the prescriptive period for the filing of the claims of
the complainants was 3 years, as provided in Article 291 of the Labor Code of
the Philippines, and not ten years as provided in Article 1144 of the Civil Code
of the Philippines nor one year as provided in the Amiri Decree No. 23 of 1976.
Article 156 of the Amiri Decree No. 23 of 1976 provides:
A claim arising out of a contract of employment shall not actionable
after the lapse of one year from the date of the expiry of the Contract.
As a general rule, a foreign procedural law will not be applied in the
forum (local court), Procedural matters, such as service of process, joinder of
actions, period and requisites for appeal, and so forth, are governed by the
laws of the forum. This is true even if the action is based upon a foreign
substantive law.
A law on prescription of actions is sui generis in Conflict of Laws in the
sense that it may be viewed either as procedural or substantive, depending on
the characterization given such a law. In Bournias v. Atlantic Maritime
Company (220 F. 2d. 152, 2d Cir. [1955]), where the issue was the applicability
of the Panama Labor Code in a case filed in the State of New York for claims
arising from said Code, the claims would have prescribed under the
Panamanian Law but not under the Statute of Limitations of New York. The U.S.
Circuit Court of Appeals held that the Panamanian Law was procedural as it
was not specifically intended to be substantive, hence, the prescriptive
period provided in the law of the forum should apply. The Court observed: . . .
we are dealing with a statute of limitations of a foreign country, and it is not
clear on the face of the statute that its purpose was to limit the enforceability,
outside as well as within the foreign country concerned, of the substantive
rights to which the statute pertains. We think that as a yardstick for
determining whether that was the purpose, this test is the most satisfactory
one.
The Court further noted: Applying that test here it appears to us that
the libellant is entitled to succeed, for the respondents have failed to satisfy us
that the Panamanian period of limitation in question was specifically aimed
against the particular rights which the libellant seeks to enforce. The Panama
Labor Code is a statute having broad objectives. The American court applied
the statute of limitations of New York, instead of the Panamanian law, after
finding that there was no showing that the Panamanian law on prescription
was intended to be substantive. Being considered merely a procedural law
even in Panama, it has to give way to the law of the forum (local Court) on
prescription of actions.
However the characterization of a statute into a procedural or
substantive law becomes irrelevant when the country of the forum (local
Court) has a borrowing statute. Said statute has the practical effect of
treating the foreign statute of limitation as one of substance. A borrowing
statute directs the state of the forum (local Court) to apply the foreign statute
of limitations to the pending claims based on a foreign law. While there are
several kinds of borrowing statutes, one form provides that an action barred
by the laws of the place where it accrued will not be enforced in the forum
even though the local statute was not run against it.
Section 48 of Code of Civil Procedure is of this kind. It provides: If by the
laws of the state or country where the cause of action arose, the action is
barred, it is also barred in the Philippine Islands.
Section 48 has not been repealed or amended by the Civil Code of the
Philippines. In the light of the 1987 Constitution, however, Section 48 cannot
be enforced ex proprio vigore insofar as it ordains the application in this
jurisdiction of Section 156 of the Amiri Decree No. 23 of 1976.
The courts of the forum (local Court) will not enforce any foreign claim
obnoxious to the forums public policy. To enforce the one-year prescriptive
period of the Amiri Decree No. 23 of 1976 as regards the claims in question
would contravene the public policy on the protection to labor.
In the Declaration of Principles and State Policies, the 1987 Constitution
emphasized that:The state shall promote social justice in all phases of
national development (Sec. 10).
The state affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare (Sec. 18).
In Article XIII on Social Justice and Human Rights, the 1987 Constitution
provides:
Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
Thus, the applicable law on prescription is the Philippine law.
The next question is whether the prescriptive period governing the filing
of the claims is 3 years, as provided by the Labor Code or 10 years, as
provided by the Civil Code of the Philippines.
Article 1144 of the Civil Code of the Philippines provides:
The following actions must be brought within ten years from the time
the right of action accross:
(1) Upon a written contract; (2) Upon an obligation created by law; (3)
Upon a judgment
In this case, the claim for pay differentials is primarily anchored on the
written contracts between the litigants, the ten-year prescriptive period
provided by Art. 1144(l) of the New Civil Code should govern.
3. NO. A class suit is proper where the subject matter of the controversy
is one of common or general interest to many and the parties are so numerous
that it is impracticable to bring them all before the court. When all the claims
are for benefits granted under the Bahrain law many of the claimants worked
outside Bahrain. Some of the claimants were deployed in Indonesia under
different terms and condition of employment.
Inasmuch as the First requirement of a class suit is not present (common
or general interest based on the Amiri Decree of the State of Bahrain), it is
only logical that only those who worked in Bahrain shall be entitled to rile their
claims in a class suit.
While there are common defendants (AIBC and BRII) and the nature of
the claims is the same (for employees benefits), there is no common question
of law or fact. While some claims are based on the Amiri Law of Bahrain, many
of the claimants never worked in that country, but were deployed elsewhere.
Thus, each claimant is interested only in his own demand and not in the claims
of the other employees of defendants. A claimant has no concern in protecting
the interests of the other claimants as shown by the fact, that hundreds of
them have abandoned their co-claimants and have entered into separate
compromise settlements of their respective claims. The claimants who worked

in Bahrain can not be allowed to sue in a class suit in a judicial proceeding.
WHEREFORE, all the three petitioners are DISMISSED.
25. Catan vs. NLRC, 160 SCRA 691

FACTS:
The Petitioner, a duly licensed recruitment agency, as agent of Ali and
Fahd Shabokshi Group, a Saudi Arabian firm, recruited private respondent to
work in Saudi Arabia as a steel man. The contract was automatically renewed
when private respondent was not repatriated by his Saudi employer but
instead was assigned to work as a crusher plant operator. On March 30, 1983,
while he was working as a crusher plant operator, private respondent's right
ankle was crushed under the machine he was operating. On September 9,
1983, he returned to Saudi Arabia to resume his work. On May 15, 1984, he
was repatriated. Upon his return, he had his ankle treated for which he
incurred further expenses.
ISSUE:
WON this was grounds for cancellation or suspension of license or
authority of M. S. Catan Placement Agency.
RULING:
Yes, Power of the agency to sue and be sued jointly and solidarily with
the principal or foreign-based employer for any of the violations of the
recruitment agreement and the contracts of employment. [Section 10(a) (2)
Rule V, Book I, Rules to Implement the Labor Code. The Court ruled that a
recruitment agency was solidarily liable for the unpaid salaries of a worker it
recruited for employment in Saudi Arabia. Even if indeed petitioner and the
Saudi principal had already severed their agency agreement at the time
private respondent was injured, petitioner may still be sued for a violation of
the employment contract because no notice of the agency agreement's
termination was given to the private respondent.
26. Alga Moher Int'l Placement Service vs. Atienza, 168 SCRA 174
FACTS:
On March 18, 1981, Ramon C. Ponce and Claudio M. Miraflor entered into
separate contracts of employment with the Modem System Contracting
Establishment, through its agent, Alga Moher International Placement
Services, a duly licensed recruitment and placement agency. Under the terms
and conditions of said contracts, Ponce was hired as a driver of light
equipment, while Miraflor was hired as an air conditioning technician.
Pursuant to their employment contracts, Ponce and Miraflor left for Saudi
Arabia on March 31, 1981 where, for the first two weeks, Ponce worked as a
cook while Miraflor worked as an air conditioning technician. Thereafter, Ponce
was assigned to work as a heavy equipment operator and later, as a
construction worker. Miraflor was assigned as a construction worker. Thinking
that these reassignments constituted a breach of their contracts, Ponce and
Miraflor reported the matter to Alga Moher. In due time, Modern System was
appraised of the complaint and soon thereafter, it terminated the contracts of
Ponce and Miraflor, detained them for one week, and repatriated them after
giving their passports, plane tickets.
ISSUE:
Whether or not private respondents were illegally dismissed.
RULING:
The private respondents were illegally dismissed. Under Art. 279.
Security of Tenure.in cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when
authorized by this title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and to his back
wages computed from the time his compensation was withheld from him up to
the time of reinstatement.
This law was correctly applied by the POEA and the respondent
Commission because private respondents were found to have been illegally
dismissed by their foreign employer, Modem System. The fact that they were
dismissed during the probationary period stipulated in their contracts is
immaterial.
27. Llobera vs. NLRC, 162 SCRA 788

FACTS:
Complainant alleges that Gencon forced him to sign an erroneous
statement of wages under threat that if he refused to sign, he would be put in
jail or sent home without being paid at all. Hence complainant was paid only
the sum of SRI, 576.80 and despite the fact that complainant is entitled to
additional overtime pay, as well as pro-rata leave pay, Gencon allegedly
refused to pay the same. The POEA ruled in favor of the petitioner, ordering
respondents El Greco Shipping Enterprises and General Contracting and
Importing Enterprises, jointly and severally liable to pay complainant Ceferino
C. Llobrera but the NLRC reversed the decision of the POEA holding that the
POEA failed to rule on the quit claim or final settlement which was signed by
the petitioner; and that in the absence of prima facie evidence that the said
settlement was obtained through fraud, duress, intimidation and deceit, the
same must be given full force and effect.
Petitioner argues that he could not have been in a position to avoid
signing the final settlement because of the threat of being jailed and in a
foreign country at that; however, upon his arrival in this country, he
immediately filed a protest with the manning agent, private respondent El
Greco, assailing the final settlement as having been forced upon him.
Accordingly, what the respondent NLRC could at least have done was to check
the validity of the final settlement visa a vis the petitioner's claim that he was
not paid right.
ISSUE:
Whether or not the NLRC gravely abuse its discretion in accepting and
giving weight to the final settlement relied upon by the private respondents.
RULING:
Yes. the NLRC completely disregarded the fact that the petitioner tried to
prove that the final agreement was only forced upon him not only by alleging
threats of being jailed in a foreign country which were employed by the private
respondents against him but also by presenting evidence to show that he was
entitled to much more than what was credited to him in the final settlement
and that he could not have possibly willingly agreed to receive less than what
he could prove by the evidence in his possession had there been no threat or
intimidation on the part of the private respondents. Hence, there could be no
other explanation for his signing the final settlement other than that he was
forced to do so.
Furthermore, the private respondents not only failed to deny the
allegations of the petitioner concerning the final settlement but they
altogether failed to attend the POEA hearings and present controverting
evidence. Thus, such failure should have been construed as an admission of
the petitioner's allegations by the private respondents. In Ondap v. Abugaa,
(88 SCRA 610, 612-613): It was a judgment on the pleadings, as defendants,
who did not even bother to file a written answer, merely denied at the trial
paragraphs 2 to 8 of the complaint filed with the Justice of the Peace of Court.
Clearly then, they failed to deny specifically the material allegations, a failure
which in law amounted to an admission.
28. Eastern Shipping Lines vs. POEA, 166 vs. 533

FACTS:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was
killed in an accident in Tokyo, Japan on March 15, 1985. His widow sued for
damages under Executive Order No. 797 and Memorandum Circular No. 2of
the POEA. The petitioner, as owner of the vessel, argued that the complaint
was cognizable not by the POEA but by the Social Security System and should
have been filed against the State Fund Insurance. The POEA nevertheless
assumed jurisdiction and after considering the position papers of the parties
ruled in favor of the complainant.
The petition is DISMISSED, with costs against the petitioner. The
temporary restraining order dated December 10, 1986 is hereby LIFTED. It is
so ordered.
ISSUE:
Whether or not the POEA had jurisdiction over the case as the husband
was not an overseas worker.
RULING:
Yes. The Philippine Overseas Employment Administration was created
under Executive Order No. 797, promulgated on May 1, 1982, to promote and
monitor the overseas employment of Filipinos and to protect their rights. It
replaced the National Seamen Board created earlier under Article 20 of the
Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA
is vested with "original and exclusive jurisdiction over all cases, including
money claims, involving employee-employer relations arising out of or by

virtue of any law or contract involving Filipino contract workers, including
seamen." These cases, according to the 1985Rules and Regulations on
Overseas Employment issued by the POEA, include, claims for death,
disability and other benefits arising out of such employment.
The award of P180,000.00 for death benefits and P12,000.00 for burial
expenses was made by the POEA pursuant to its Memorandum Circular No. 2,
which became effective on February 1,1984. This circular prescribed a
standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment.
29. Royal Crown International vs. NLRC, et. al., 179 SCRA 569
FACTS:
In 1983, petitioner, a duly licensed private employment agency,
recruited and deployed private respondent for employment with ZAMEL as an
architectural draftsman in Saudi Arabia. On May 25, 1983, a service
agreement was executed by private respondent and ZAMEL whereby the
former was to receive per month a salary of US$500.00 plus US$100.00 as
allowance for a period of one (1) year commencing from the date of his arrival
in Saudi Arabia. Private respondent departed for Saudi Arabia on June 28,
1983.
On February 13, 1984, ZAMEL terminated the employment of private
respondent on the ground that his performance was below par. For three (3)
successive days thereafter, he was detained at his quarters and was not
allowed to report to work until his exit papers were ready. On February 16,
1984, he was made to board a plane bound for the Philippines.
ISSUE:
Whether or not sufficient evidence was presented by petitioner to
establish the termination of private respondent's employment for just and
valid cause.
RULING:
This assertion is without merit. The NLRC upheld the POEA finding that
petitioner's evidence was insufficient to prove termination from employment
for just and valid cause. And a careful study of the evidence thus far presented
by petitioner reveals to this Court that there is legal basis for public
respondent's conclusion.
It must be borne in mind that the basic principle in termination cases is
that the burden of proof rests upon the employer to show that the dismissal is
for just and valid cause, and failure to do so would necessarily mean that the
dismissal was not justified and, therefore, was illegal [Polymedic General
Hospital v. NLRC, G.R. No. 64190, January 31, 1985,134 SCRA 420; and also
Article 277 of the Labor Code]. And where the termination cases involve a
Filipino worker recruited and deployed for overseas employment, the burden
naturally devolves upon both the foreign-based employer and the employment
agency or recruitment entity which recruited the worker, for the latter is not
only the agent of the former, but is also solidarily liable with its foreign
principal for any claims or liabilities arising from the dismissal of the worker.
In the case at bar, petitioner had indeed failed to discharge the burden
of proving that private respondent was terminated from employment for just
and valid cause.
30. Facilities Management Corporation vs. de la Cruz, 89 SCRA 131

FACTS:
Facilities Management Corporation and J. S. Dreyer are domiciled in
Wake Island while J. V. Catuira is an employee of FMC stationed in Manila.
Leonardo dela Osa was employed by FMC in Manila, but rendered work in
Wake Island, with the approval of the Department of Labor of the Philippines.
De la Osa was employed as (1) painter with an hourly rate of $1.25 from March
1964 to November 1964, inclusive; (2) houseboy with an hourly rate of $1.26
from December 1964 to November 1965, inclusive; (3) houseboy with an
hourly rate of $1.33 from December 1965 to August 1966, inclusive; and (4)
cashier with an hourly rate of $1.40 from August 1966 to March 27 1967,
inclusive.
Subsequently on 3 May 1968, FMC, et al. filed a motion to dismiss the
subject petition on the ground that the Court has no jurisdiction over the case,
and on 24 May 1968, de la Osa interposed an opposition thereto. Said motion
was denied by the Court in its Order issued on 12 July 1968. Subsequently,
after trial, the Court of Industrial Relations, in a decision dated 14 February
1972, ordered FMC, et al. to pay de la Osa his overtime compensation, as well
as his swing shift and graveyard shift premiums at the rate of 50% per cent of
his basic salary. FMC, et al. filed the petition for review on certiorari.
ISSUE:
Whether the mere act by a non-resident foreign corporation of recruiting

Filipino workers for its own use abroad, in law doing business in the
Philippines.
RULING:
In its motion to dismiss, FMC admits that Mr. Catuira represented it in
the Philippines "for the purpose of making arrangements for the approval by
the Department of Labor of the employment of Filipinos who are recruited by
the Company as its own employees for assignment abroad." In effect, Mr.
Catuira was alleged to be a liaison officer representing FMC in the Philippines.
Under the rules and regulations promulgated by the Board of Investments
which took effect 3 February 1969, implementing RA 5455, which took effect
30 September 1968, the phrase "doing business" has been exemplified with
illustrations, among them being as follows: ""(1) Soliciting orders, purchases
(sales) or service contracts. Concrete and specific solicitations by a foreign
firm, not acting independently of the foreign firm, amounting to negotiation or
fixing of the terms and conditions of sales or service contracts, regardless of
whether the contracts are actually reduced to writing, shall constitute doing
business even if the enterprise has no office or fixed place of business in the
Philippines; (2) appointing a representative or distributor who is domiciled in
the Philippines, unless said representative or distributor has an independent
status, i.e., it transacts business in its name and for its own account, and not
in the name or for the account of the principal; xxx (4) Opening offices,
whether called 'liaison' offices, agencies or branches, unless proved otherwise.
xxx (10) Any other act or acts that imply a continuity of commercial dealings
or arrangements, and contemplate to that extent the performance of acts or
works, or the exercise of some of the functions normally incident to, or in the
progressive prosecution of, commercial gain or of the purpose and objective of
the business organization."
31. del Rosario vs. NLRC, 187 SCRA 777
32. Capricorn Intl Burs vs CA, 184 SCRA 123

ISSUE:
Whether or not the cash bond posted by a recruitment agency in the
Philippine Overseas Employment Administration (POEA) may be garnished by a
judgment creditor of the agency.
RULING:
The requirement for the posting of a cash bond is also an indispensable
adjunct to the requirement that the agency undertakes to assume joint and
solidary liability with the employer for all claims and liabilities which may arise
in connection with the implementation of the contract of overseas
employment and to guarantee compliance with existing labor and social
legislation of the Philippines and the country of employment [POEA Rules and
Regulations, Book II, Rule II secs. l(d), (3) and (4)].
The undertaking to assume joint and solidary liability and to guarantee
compliance with labor laws, and the consequent posting of cash and surety
bonds, may be traced all the way back to the constitutional mandate for the
State to "afford full protection to labor, local and overseas" [Art. XIII, sec. 3].
The peculiar nature of overseas employment makes it very difficult for the
Filipino overseas worker to effectively go after his foreign employer for
employment-related claims and, hence, public policy dictates that, to afford
overseas workers' protection from unscrupulous employers, the recruitment or
placement agency in the Philippines be made to share in the employer's
responsibility.
Thus, it cannot be said that the Court of Appeals erred when it annulled
the assailed orders of respondent judge, enjoined petitioner from garnishing
the cash bond, and ordered it to return the amount of the bond to the POEA if
it had not yet done so.
ACCORDINGLY, after deliberating on the Petition, Comment and Reply,
the Court Resolved to DENY the petition for lack of merit.
33. Stronghold Insurance vs. CA, 205 SCRA 605

FACTS:
The petitioner invokes due process to escape liability on a surety bond
executed for the protection of a Filipino seaman.
Acting on behalf of its foreign principal, Qatar National Fishing Co., Pan
Asian Logistics and Trading, a domestic recruiting and placement agency,
hired Adriano Urtesuela as captain of the vessel M/V Oryx for the stipulated
period of twelve months. The required surety bond, in the amount of
P50,000.00, was submitted by Pan Asian and Stronghold Insurance Co., Inc.,
the herein petitioner, to answer for the liabilities of the employer. Urtesuela
assumed his duties on April 18, 1982, but three months later his services were
terminated and he was repatriated to Manila. He thereupon filed a complaint
against Pan Asian and his former employer with the Philippine Overseas
Employment Administration for breach of contract and damages.
ISSUE:
Whether or not that the decision of the POEA is not binding upon it
because it was not impleaded in the complaint; it was not notified thereof nor
did it participate in the hearing; and it was not specifically directed to pay the
damages awarded to the complainant.
RULING:
The surety bond required of recruitment agencies is intended for the
protection of our citizens who are engaged for overseas employment by
foreign companies. The purpose is to insure that if the rights of these overseas
workers are violated by their employers, recourse would still be available to

them against the local companies that recruited them for the foreign principal.
The foreign principal is outside the jurisdiction of our courts and would
probably have no properties in this country against which an adverse
judgment can be enforced. This difficulty is corrected by the bond, which can
be proceeded against to satisfy that judgment.
Given this purpose, and guided by the benign policy of social justice, we reject
the technicalities raised by the petitioner against its established legal and
even moral liability to the private respondent. These technicalities do not
impair the rudiments of due process or the requirements of the law and must
be rejected in deference to the constitutional imperative of justice for the
worker.
WHEREFORE, the petition is DENIED and the challenged decision of the
Court of Appeals AFFIRMED in toto. The respondent court is directed to
ENFORCE payment to the private respondent in full, and with all possible
dispatch of the amount awarded to him by the POEA in its decision dated
May 13, 1983.
34. JMM Promotions and Management Inc. vs. NLRC, 228 SCRA 129
35. Eagle Constructions Corporation vs. Gayda, 186 SCRA 589
36. People vs. Coronacion, 237 SCRA 227

FACTS:
Nelia Coronacion, Eduardo Aquino, and June Mendez were charged with
the crime of illegal recruitment in large scale and by a syndicate for falsely
representing themselves to have the capacity to contract, enlist and transport
Filipino workers for employment abroad. We are now asked to adjudge them
guilty or not.
ISSUE:
WON accused coronacion is also a victim of the deceitful scheme of jun
mendez; the trial court erred in finding that coronacion represented herself as
a recruiter of workers and that she promised jobs to the complainants for a
fee.
RULING:
Evidently, the crime of illegal recruitment in large scale is committed
when a person (a) undertakes any recruitment activity defined under Article
13(b) or any prohibited practice enumerated under Article 34 of the Labor
Code; (b) does not have a license or authority to lawfully engage in the
recruitment and placement of workers; and (c) commits the same against
three or more persons, individually or as a group.
In the case at bench, the presence of the second and third elements is
not disputed. The appellants are either licensees or holders of any authority
from POEA to engage in recruitment and placement activities as evidenced by
a certification of the said agency dated September 8, 1987. 11 It was likewise
established that the private complainants were unaware of the appellants' lack
of authority when they transacted business with them. It was only later, upon
inquiry at POEA, that they discovered the appellants' lack of authority. Finally,
the number of private complainants, certainly more than three, is beyond
dispute.
Now, we resolve whether the first element of the offense of illegal
recruitment, i.e., that the appellants undertook any of the recruitment
activities defined under Article 13(b) of the Labor Code, as amended, or any of
the prohibited activities defined under Article 34 of the same Code, was
successfully established by the prosecution.
To satisfy the first element, the prosecution presented the testimonies of the
complainants clearly pointing to the appellants as two of the three persons
who promised them employment abroad and who collected and received
varying amounts from them. The appellants, on the other hand, vigorously
maintain that the lower court erred (a) in finding that there was conspiracy
and (b) in giving credence to the conflicting testimonies of the private
complainants.
WHEREFORE, the judgment of conviction rendered by the trial court is hereby
AFFIRMED, with the sole modification that the penalty properly imposable and
hereby imposed is life imprisonment and not reclusion perpetua.
37. People vs. Comia, 236 SCRA 185

FACTS:
The prosecution presented eight (8) witnesses, among whom were the
four complainants: Alfonsa Acierda Mortos, Ligaya Clara Rentura, Teresita
Caballero Villegas and Nenita Balisalisa. The other four were: Teresita
Quitoriano, a nurse through whom the illegal scheme of the appellant was
discovered; Gaudencio dela Pea of the Philippine Overseas Employment
Administration (POEA) office in Davao City who issued a certification that
appellant had no authority or license to recruit; Isabelo B. Cerna, Jr., Senior
Agent of the National Bureau of Investigation (NBI) in Davao City who took
part in the entrapment operation against the appellant; and Ofelio Mortos,
husband of Complainant Alfonsa Acierda. The following may be gleaned from
the testimonies of the prosecution witnesses.
ISSUE:
Whether or Not Appellant Mildred Villas y Nique guilty of illegal
recruitment in large scale and imposing on her the penalty of life
imprisonment.
RULING:
The Appellant Mildred Villas y Nique was filed a charge and against her
because she refused to agree to the proposal of the spouses Mr. & Mrs. Mortos
is implausible to believe and does not deserve credence. Her counter-affidavit
submitted belies such accusation for there are nothing in that counter-affidavit
which states that the spouses Mortos proposed to her to recruit workers in
order to make money and that she out rightly refused to agree to the said
proposal. Such declaration is a clear after though [sic] conceived by the
accused who could not concoct any other plausible defense to exculpate her
from criminal liability.
The accused guilty beyond reasonable doubt of the crime of illegal
recruitment (qualified) of four (4) persons, namely: Alfonsa Acierda Morotos
[sic], Teresita Caballero Villegas, Nenita Balisalisa and Ligaya Rentura
punishable under Article 39 (a) of the Labor Code as amended, she is hereby
sentence[d] to a penalty of LIFE IMPRISONMENT and a fine of P100,000.00 and

to pay the cost; to indemnify Alfonsa Acierda Mortos the amount of
P11,300.00, Teresita Caballero Villegas, the amount of P11,800.00, Nenita
Balisalisa the amount of P6,200.00 and Ligaya Rentura the amount of
P2,000.00.
WHEREFORE, premises considered, the appeal is DENIED. The assailed
Decision dated July, 5, 1993 of the Regional Trial Court, Branch 16, Davao City,
in Criminal Case No. 22,608-91 is hereby AFFIRMED Costs against appellant.
38. People vs. Sendon, 228 SCRA 489

FACTS:
In July or August of 1988, Emma Concepcion- Hermogeno (complaint in
Criminal Case No. Ir-2625) met accused-appellant Lucille Sendon at the store
owned by Lydia Cepres located in the store owned by Lydia Cepres located in
the market pavilion in Iriga City. Lucille represented herself as a former
employee of Muhammad Al Jabri of Oman and that she was allegedly
authorized by the latter to directly hire someone to work as a domestic helper
in Oman. A certain Josie had allegedly backed out from the position and Lucille
asked Hermogeno if she was interested in applying therefor. However,
Hermogeno, being a nursing graduate, indicated her preference to work as a
nurse. Lucille assured her that she could easily change jobs upon her arrival in
Oman because of her employer's connections. Hermogeno's mother met with
Natividad Sendon, mother of Lucille Sendon, regarding the job offer.
Subsequently, the former readily gave her permission when she was informed
that they were related to the Sendons..
ISSUE:
Whether or not appellant Lucille Sendon was guilty of Illegal Recruitment
on, given the circumstances.
RULING:
Finally, we take judicial notice of the fact that appellant had previously
been convicted by this Court of illegal recruitment in large scale, 42 which
decidedly bolsters the present charges against her. A reading of the
aforestated case shows that appellant used the same modus operandi to
deceive her victims. Not surprisingly, the same defense of denial was also
used by appellant in said case, but which was not accorded any merit by the
trial court and by this Court.
Having falsely and unlawfully presented herself to the public at large as
a licensed recruiter and having again victimized persons in the cases at bar,
appellant Lucille Sendon is guilty beyond reasonable doubt of illegal
recruitment in large scale and must suffer the consequences thereof. Indeed,
the continuing incidence of such nefarious acts rationalizes the severe
penalties therefor under the axiom that extreme situations require extreme
remedies. the judgment of the court a quo finding accused-appellant Lucille
Sendon guilty beyond reasonable doubt of illegal recruitment in large scale
and imposing the corresponding penalties and civil liabilities.
39. People vs. Bodozo, 215 SCRA 33

FACTS:
In the evening of June 3, 2005, while Lolita Sagadsad Plan do, 23 years
old, single, was in Tumaga, Zamboanga City on her way to the house of her
grandfather, she met Ronnie Masion Aringoy and Rachel Aringoy Caete. Ronnie
greeted Lolita, Of, its good you are here (oy, maayo kay dia ka). Rachel asked
Lolita if she is interested to work in Malaysia. x x x Lolita was interested so she
gave her cell phone number to Ronnie. After their conversation, Lolita
proceeded to her grand fathers house.
On June 4, 2005, at about 7:00 o clock in the morning, Lolita received a
text message from Ronnie Aringoy inviting her to go to the latter s house. At
7:30 in the morning, they met at Tumaga on the road near the place where
they had a conversation the night before. Ronnie brought Lolita to the house of
his sister in Tumaga. Lolita inquired what job is available in Malaysia. Ronnie
told her that she will work as a restaurant entertainer. All that is needed is a
passport. She will be paid 500 Malaysian ringgits which is equivalent to
P7,000.00 pesos in Philippine currency. Lolita told Ronnie that she does not
have a passport. Ronnie said that they will look for a passport so she could
leave immediately. Lolita informed him that her younger sister, Marife Plando,
has a passport. Ronnie chided her for not telling him immediately. He told
Lolita that she will leave for Malaysia on June 6, 2005 and they will go to Hadja
Jarma Lalli who will bring her to Malaysia. Ronnie sent a text message to Lalli
but the latter replied that she was not in her house. She was at the city proper.
ISSUE:
The only issue in this case is whether the Court of Appeals committed a
reversible error in affirming in toto the RTC Decision.
RULING:
The criminal case of Trafficking in Persons as a Prostitute is an analogous
case to the crimes of seduction, abduction, rape, or other lascivious acts. In
fact, it is worse. To be trafficked as a prostitute without ones consent and to be

sexually violated four to five times a day by different strangers is horrendous
and atrocious. There is no doubt that Lolita experienced physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, and social humiliation when she was trafficked as a
prostitute in Malaysia. Since the crime of Trafficking in Persons was
aggravated, being committed by a syndicate, the award of exemplary
damages is likewise justified.
WHEREFORE, we AFFIRM the Decision of the Court of Appeals dated 26
February 2010, affirming the Decision of the Regional Trial Court of
Zamboanga City dated 29 November 2005, finding accused Lalli and Aringoy
guilty beyond reasonable doubt of the crimes of Illegal Recruitment and
Trafficking in Persons committed by a syndicate.
40. Flores vs. People, 211 SCRA 662

FACTS:
Petitioners, Francisco Flores and Francisco Angel, were accused for
robbery. Information was filed in December 1951. They were found guilty of
the crime charged in November 1955. Notice of appeal was file in December
1955. It was until February 1958 that action was taken by CAa resolution
remanding the records of the case to the lower court for a rehearing of the
testimony of a certain witness deemed material for the disposition of the case.
Such resolution was amended dated August 1959 which granted the
petitioners to set aside the decision so that evidence for the defense on new
facts may be received and a new decision in lieu of the old one may be
rendered. The case was returned to the lower court but nothing was done for
about a year because the offended party failed to appear despite the 6/7 dates
set for such hearing. Furthermore, when the offended party took the witness
stand, his testimony was characterized as a mere fiasco as he could no longer
remember the details of the alleged crime and even failed to identify the 2
accused.
The trial court instead of rendering a decision sent back the records to
the appellate tribunal. 5 more years elapsed without anything being done,
petitioners sought dismissal of the case against them due to inordinate delay
in the disposition (from December 1955- May 1965). CA was unresponsive
notwithstanding the vigorous plea of the petitioners, its last order being a
denial of a second MR dated January 1966. CAs defense is that the case was
not properly captioned as People of the Philippines and without Court of
Appeals being made a party to the petition.
ISSUE:
Whether or Not constitutional right to a speedy trial was violated.
RULING:
YES. Petition for certiorari was granted. Orders denying Motion to

dismiss as Motion to Reconsideration are set aside and nullified.
Criminal
Case against petitioners was dismissed.
Constitutional right to a speedy trial means one free from vexatious,
capricious and oppressive delays. An accused is entitled to a trial at the
earliest opportunity. He cannot be oppressed by delaying the commencement
of the trial for an unreasonable length of time. The Constitution does not say
that such right may be availed only where the prosecution of a crime is
commenced and undertaken by the fiscal. It does not exclude from its
operation cases commenced by private individuals. Where a person is
prosecuted criminally, he is entitled to a speedy trial, irrespective of the nature
of the offense or the manner in which it is authorized to be commenced.
Technicalities should give way to the realities of the situation. There
should not be too much significance attached to the procedural defect (refer to
CAs defense). CA failed to accord respect to this particular constitutional right
amounting at the very least to a grave abuse of discretion.
41. People vs. Manugas Jr., 231 SCRA 1

FACTS:
In 1987, accused-appellant Fernando Manungas, Jr. recruited Wilfrey
Mabalot, Danilo Ramirez, Leonardo Estanoco and Crisanto Collado to work as
janitors in Saudi-Arabia. In connection with this, Fernando required the
applicants the several amounts for medical, placement and other fees. The
applicants failed to be deployed to Saudi however, and upon verification with
POEA, they found out that Fernando was not a licensed recruiter. Complainants
filed complaints of Estafa and Illegal Recruitment on a Large Scale against
Fernando. Fernando maintained that he was not illegally recruiting because he
was connected with a duly licensed recruitment agency, and that only because
the job openings was subsequently awarded to another recruitment agency
that the applicants he recruited were not able to leave for Saudi.
ISSUE:
Whether or not Fernando was guilty of Illegal Recruitment on a Large
Scale, given the circumstances.
RULING:
The Supreme Court ruled that Fernando, despite of his being connected
with a licensed recruitment agency, was still guilty of illegal recruitment under
the Labor Code, because he performed the acts of recruitment as defined in
Article 13 of the Labor Code, by himself. He was the one who recruited the
applicants, and he was the one who required of them the fees he collected
himself. Illegal recruitment was also qualified because he recruited more than
three persons.
42. People vs. Goce, 247 SCRA 780

FACTS:
On January 1988, an information for illegal recruitment committed by a
syndicate in large scale, punishable under Articles 38 and 39 of the labor code
as amended by PD 2018, filed against Dan and Loma Goce and Nelly Agustin
in the RTC of Manila, alleging that in or about during the period comprised
between May 1986 and June 25, 1987, both dates inclusive in the City of
Manila, the accused conspired and represent themselves to have the capacity
to recruit Filipino workers for employment abroad.
January 1987, a warrant of arrest was issued against the 3 accused but
none of them was arrested. Hence, on February 1989, the RTC ordered the
case archived but issued a standing warrant us arrest against the accused.
Thereafter, knowing the whereabouts of the accused, Rogelio Salado
requested for a copy of the warrant of arrest and eventually Nelly Agustin was
apprehended by the Paranaque Police. Agustin's counsel filed a motion to
revive the case and requested to set a hearing for purpose of due process and
for accused to immediately have her day in court. On the arraignment, Agustin
pleaded not guilty and the trial went on with four complainants testified for the
prosecution and receipts of the processing fees they paid.
Agustin for the defense asserted that Goce couple were licensed
recruiters but denied her participation in the recruitment and denied
knowledge of the receipts as well.
On November 1993, trial court rendered judgment finding that Agustin
as a principal in the crime of illegal recruitment in large scale with sentence of
life imprisonment and pay P100,000.00.
ISSUE:
Agustin appealed with the following arguments: (1) her act of
introducing the complainants to the couple does not fall within the meaning of
illegal recruitment and placement under Article 13 in relation to Article 34 of

the labor code; (2) there is no proof of conspiracy and (3) there is no proof that
appellant offered/promised overseas employment to the complainants.
RULING:
The testimonial evidence shows that Agustin indeed further committed
acts constitutive of illegal recruitment because, the complainants had a
previous interview with Agustin (as employee of the Goce couple) about fees
and papers to submit that may constitute as referral. Agustin collected the
payments of the complainants as well as their passports, training fees,
medical tests and other expenses. On the issue of proof, the court held that
the receipts exhibited by the claimants are clear enough to prove the
payments and transaction made.
43. People vs. Avendao, 216 SCRA 187

FACTS:
Six (6) separate information for Illegal Recruitment of some 38 workers
were filled against appellant Abelardo Avendao y Crespo which were
docketed as Criminal Case Nos. 6113-MN, 6114-MN, 6125-MN, 6131-MN, 6143MN and 6148-MN in the Regional Trial Court, Branch 170, at Malabon, Metro
Manila.
Upon arraignment, Avendao pleaded not guilty to the six (6)
informations. His co-accused, Carmelito Soriano, Jr., Renato M. Soriano and
Manuel Calonog have remained at large.
The accused (Abelardo C. Avedao) is the Treasurer of MCBRAJ AgroIndustrial Development Company (MAINDECO), with offices at 26 Sta. Cecilia
St., Sto. Rosario Village, Malabon, Metro Manila, which is also his residence.
The company is not licensed nor authorized to recruit workers for overseas
employment. Carmelito Soriano, Jr. is the President of the said Company,
Manuel Calanog is the personnel manager.
The accused appealed to the Court.
ISSUES:
1. Whether or not the trial court erred in appreciating only the evidence
of the prosecution and in disregarding the evidence of the defense.
2. Whether or not the trial court erred in convicting accused-appellant of
the crime charged despite the failure of the prosecution to prove his guilt
beyond reasonable doubt.
RULING:
The appeal has no merit. The trial court correctly fount Avendao to
have conspired with his co-accused Carmelito Soriano, Jr., Manuel Calanog and
Renato M. Soriano, to illegally recruit some 38 persons for overseas

employment, charging and collecting a fee of P5,500.00 from each job
applicant although they (the accused) did not have the required license and
authority from the Department of Labor to engage in recruiting workers for
overseas employment. They defrauded the job applicants of the "fees"
(P5,500.00) which the latter paid for the false hope of obtaining employment
in Papua, New Guinea, which was never realized. Appellant's pretext that the
fee of P5,500.00 paid by each job applicant was not a placement fee but
payment for a share of stock in MAINDECO, supposedly a prerequisite for the
deployment of the "stockholder" in Papua, New Guinea, must be rejected for
the simple reason that those who purchased the "shares" did not intend to
invest, but to obtain a job placement, in Papua, New Guinea. They were not
investors but job seekers. Further proof that they were being swindled is that
those who paid P5,500.00 each received a receipt for only P4,500.00 from the
appellant who informed them that the unreceipted amount of P1,000.00 was
to pay for their medical examination and the processing of their passports,
although no passports were ever issued to them.
Appellant and his co-accused committed Illegal Recruitment on a Large
Scale as defined and penalized in Articles 38(b) and 39(a) of the Labor Code,
because they had victimized more than three (3) job applications thirty
eight (38) in fact.
WHEREFORE, as the trial court did not commit any reversible error in
finding Avendao guilty of large scale illegal recruitment in Criminal Cases
Nos. 6113, 6114 and 6125, and of simple illegal recruitment in Criminal Case
Nos. 6131, 6143 and 6148, and as the penalties imposed are in accordance
with the law, the appealed decision is hereby AFFIRMED in toto.
44. Aquino vs. CA, 204 SCRA240

FACTS:
This is a petition for review seeking the reversal of the November 15,
1989 decision of the Court of Appeals, which affirmed a trial court decision
finding the accused-petitioner, Aurora Aquino, guilty of illegal recruitment.
On or about and during the period comprised between May 23, 1974 to
May, 1975, both dates inclusive, in the City of Manila, Philippines, the said
accused did then and there willfully, unlawfully and knowingly, being then a
private individual, recruit workers for employment abroad without first
obtaining the required license or authority from the Ministry of Labor, in
violation of the said Article 25, Presidential Decree 442.
Upon arraignment, the accused pleaded not guilty. Thereupon the trial
ensued.
ISSUE:
Whether or not the petitioner was engaged in illegal recruitment
RULING:
In certain instances, the Supreme Court may review the findings of fact
of the Court of Appeals as when the inference made is manifestly mistaken or
when the judgment is based on misapprehension of facts or when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the
parties and which if properly considered, would justify a different conclusion.
(Moran v. Court of Appeals, 133 SCRA 88 [1984]; Sacay v. Sandiganbayan, 142
SCRA 593 [1986]; Manlapaz v. Court of Appeals, 147 SCRA 236 [1987])
There are relevant factual circumstances which the Court of Appeals

manifestly misconstrued, thus, necessitating the Court to re-examine the
facts.
The information was filed against Ms. Aquino because she "wilfully,
unlawfully, and knowingly . . . recruit(ed) workers for employment abroad
without first obtaining the required license or authority . . ." The Solicitor
General contends that when Ms. Aquino continued to charge and collect fees
from her applicants/recruits after May 18, 1974, she engaged in illegal
recruitment violative of Article 24 of the Labor Code.
We must emphasize that this case involves a criminal prosecution for a
violation of a penal provision. We are not concerned with whether or not the
accused-petitioner's license should be renewed nor with the administrative
actions taken by the Labor Department against recruitment agencies. By no
stretch of the imagination should an acquittal in this case mean that the Court
does not support the legitimate activities of the Government against illegal
recruiters preying on the gullibility of poor laborers, seamen, domestics, and
other workers who see employment abroad as the only way out of their
grinding poverty. We simply apply the principles of Criminal Law that an
accused is presumed innocent until proven guilty and that the burden of
establishing guilt must be satisfactorily met by the prosecution beyond
reasonable doubt.
WHEREFORE, the judgment of conviction is hereby REVERSED and
accused-petitioner Aurora Aquino is ACQUITTED of the crime of illegal
recruitment. The accused-petitioner is, however, ordered to pay to the
remaining complainants the sum of FOUR THOUSAND ONE HUNDRED SEVENTY
PESOS (P4,170.00), with legal rate of interest reckoned from the filing of the
information on December 1, 1978 until fully paid.
45. Roxas Surveying Co. vs. NLRC, 125 SCRA 36

FACTS:
Labor Arbiter Fernando A. Sambajon, in the complaint filed by private
respondent Mathew Leonardo against herein petitioner Rolando Roxas
Surveying Co. with the Regional Office No. IV, Ministry of Labor, for illegal
dismissal, unpaid wages and unpaid per diems, rendered a decision on June
27, 1979.
A review of the record shows that the complainant applied for and was
accepted as surveyman by the respondent on the strength of his 14 years of
experience in survey work with the Bureau of Lands; that on March 1, 1976, he
started working as such surveyman with seven men under him in Surigao del
Sur; that in September 1976, he requested and was granted 15 days vacation
leave; that after the expiration of his leave of absence, he reported for work
but was not allowed by the engineer of the cadastral survey party unless the
consent of the respondent had been obtained; that for his reason, he sent a
telegram to the respondent but received no reply so he proceeded to Manila
and called up the respondent who told him he could no longer return to his job
because of the irregularities he had committed during his employment; that
this created a misunderstanding between the complainant and the respondent
which resulted in the filing of charges and counter-charges against each other.
ISSUE:
Whether or not the Court erred holding that the respondent was regular
employee
RULING:
The Court find merit in the submission of the Solicitor General that
"considering the circumstances of the case and the seeming bad faith of
petitioner in dismissing private respondent, it is in consonance with justice,
reason and equity that respondent NLRC awarded back wages to private
respondent. Private respondent, during his lay-off, and his family have to
undergo difficulties and hardships of life (National Shipyards and Steel
Corporation vs. CIR, et al., 57 SCRA 642). It has not been shown that in the
interim from his illegal dismissal, private respondent has found some means of
livelihood to support himself and his family."
WHEREFORE, for lack of merit, the petition is dismissed and the
temporary restraining order issued on September 22, 1982 is hereby LIFTED.
46. Nitto Enterprises vs. NLRC, 248 SCRA 651

FACTS:
Petitioner Nitto Enterprises, a company engaged in the sale of glass and
aluminum products, hired Roberto Capili sometime in May 1990 as an
apprentice machinist, molder and core maker as evidenced by an
apprenticeship agreement 2for a period of six (6) months from May 28, 1990
to November 28, 1990 with a daily wage rate of P66.75 which was 75% of the
applicable minimum wage. On August 2, 1990, Roberto Capili who was
handling a piece of glass which he was working on, accidentally hit and injured
the leg of an office secretary who was treated at a nearby hospital. Further,
Capili entered a workshop within the office premises which was not his work
station. There, he operated one of the power press machines without authority
and in the process injured his left thumb. The following day he was asked to
resign. Three days after, , private respondent formally filed before the NLRC
Arbitration Branch, National Capital Region a complaint for illegal dismissal
and payment of other monetary benefits.
The Labor Arbiter rendered his decision finding the termination of private
respondent as valid and dismissing the money claim for lack of merit. On
appeal, NLRC issued an order reversing the decision of the Labor Arbiter. The
NLRC declared that Capili was a regular employee of Nitto Enterprises and not
an apprentice. Consequently, Labor Arbiter issued a Writ of Execution ordering
for the reinstatement of Capili and to collect his back wages. Petitioner, Nitto
Enterprises filed a case to the Supreme Court.
ISSUE:
Does the NLRC correctly rule that Capili is a regular employee and not an
apprentice of Nitto Enterprises?
RULING:
Yes. The apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 allegedly employing the latter as
an apprentice in the trade of "care maker/molder.
However, the apprenticeship Agreement was filed only on June 7,
1990.Notwithstanding the absence of approval by the Department of Labor
and Employment, the apprenticeship agreement was enforced the day it was
signed. The act of filing the proposed apprenticeship program with the
Department of Labor and Employment is a preliminary step towards its final
approval and does not instantaneously give rise to an employer-apprentice
relationship. Nitto Enterprises did not comply with the requirements of the law.
It is mandated that apprenticeship agreements entered into by the employer
and apprentice shall be entered only in accordance with the apprenticeship
program duly approved by the Minister of Labor and Employment. Thus, the
apprenticeship agreement has no force and effect; and Capili is considered to
be a regular employee of the company.
47. Bernardo vs. NLRC, et. al., 310 SCRA 166

FACTS:
Complainants numbering 43 are deaf-mutes who were hired on various
periods from 1988 to 1993 by respondent Far East Bank and Trust Co. as
Money Sorters and Counters through a uniformly worded agreement called
Employment Contract for Handicapped Workers.
Disclaiming that complainants were regular employees, respondent Far
East Bank and Trust Company maintained that complainants who are a special
class of workers the hearing impaired employees were hired temporarily under
[a] special employment arrangement which was a result of overtures made by
some civic and political personalities to the respondent Bank; that
complainant[s] were hired due to pakiusap which must be considered in the
light of the context of the respondent Banks corporate philosophy as well as its
career and working environment which is to maintain and strengthen a corps
of professionals trained and qualified officers and regular employees who are
baccalaureate degree holders from excellent schools which is an unbending
policy in the hiring of regular employees; that in addition to this, training
continues so that the regular employee grows in the corporate ladder; that the
idea of hiring handicapped workers was acceptable to them only on a special
arrangement basis; that it adopted the special program to help tide over a
group of handicapped workers such as deaf-mutes like the complainants who
could do manual work for the respondent Bank; that the task of counting and
sorting of bills which was being performed by tellers could be assigned to deafmutes; that the counting and sorting of money are tellering works which were
always logically and naturally part and parcel of the tellers normal functions;
that from the beginning there have been no separate items in the respondent
Bank plantilla for sorters or counters; that the tellers themselves already did
the sorting and counting chore as a regular feature and integral part of their
duties (p. 97, Records); that through the pakiusap of Arturo Borjal, the tellers
were relieved of this task of counting and sorting bills in favor of deaf-mutes
without creating new positions as there is no position either in the respondent
or in any other bank in the Philippines which deals with purely counting and
sorting of bills in banking operations.
ISSUE:
Whether or not the petitioners are regular employees
RULING:
The facts, viewed in light of the Labor Code and the Magna Carta for
Disabled Persons, indubitably show that the petitioners, except sixteen of
them, should be deemed regular employees. As such, they have acquired legal
rights that this Court is duty-bound to protect and uphold, not as a matter of
compassion but as a consequence of law and justice.
In rendering this Decision, the Court emphasizes not only the
constitutional bias in favor of the working class, but also the concern of the
State for the plight of the disabled. The noble objectives of Magna Carta for
Disabled Persons are not based merely on charity or accommodation, but on
justice and the equal treatment of qualified persons, disabled or not. In the
present case, the handicap of petitioners (deaf-mutes) is not a hindrance to
their work. The eloquent proof of this statement is the repeated renewal of
their employment contracts. Why then should they be dismissed, simply
because they are physically impaired? The Court believes that, after showing
their fitness for the work assigned to them, they should be treated and
granted the same rights like any other regular employees.
WHEREFORE, premises considered, the Petition is hereby GRANTED. The
June 20, 1995 Decision and the August 4, 1995 Resolution of the NLRC are
REVERSED and SET ASIDE.
48. Insular Life Ass. Co. vs. NLRC, 179 SCRA 459
FACTS:
Since 1968, respondent Basiao has been an agent for petitioner
company, and is authorized to solicit within the Philippines applications for
insurance policies and annuities in accordance with the existing rules and
regulations of the company. In return, he would receive compensation, in the
form of commissions.
Some four years later, in April 1972, the parties entered into another
contract an Agency Manager's Contract and to implement his end of it
Basiao organized an agency or office to which he gave the name M. Basiao
and Associates, while concurrently fulfilling his commitments under the first
contract with the Company. In May, 1979, the Company terminated the
Agency Manager's Contract. After vainly seeking a reconsideration, Basiao
sued the Company in a civil action and this, he was later to claim, prompted
the latter to terminate also his engagement under the first contract and to
stop payment of his commissions starting April 1, 1980.
Basiao thereafter filed with the then Ministry of Labor a complaint

against the Company and its president. The complaint sought to recover
commissions allegedly unpaid thereunder, plus attorney's fees. The
respondents disputed the Ministry's jurisdiction over Basiao's claim, asserting
that he was not the Company's employee, but an independent contractor.
ISSUE:
Whether or not there exist an employer-employee relationship between
Basiao and Insular Life.
RULING:
The SC ruled in favor of Insular Life. The Court, therefore, rules that
under the contract invoked by him, Basiao was not an employee of the
petitioner, but a commission agent, an independent contractor whose claim
for unpaid commissions should have been litigated in an ordinary civil action.
The Labor Arbiter erred in taking cognizance of, and adjudicating, said claim,
being without jurisdiction to do so, as did the respondent NLRC in affirming the
Arbiter's decision. This conclusion renders it unnecessary and premature to
consider Basiao's claim for commissions on its merits.
49. Grepalife Assurance Corp. vs. NLRC, 187 SCRA 694

FACTS:
Petition to review the decision of the NLRC. Grepalife contends that
Rodrigo and Ernesto are agents, not employees, of the company by alleging
that they were hired under agency agreements, that they were not among the
company's "organic personnel" who handled technical and administrative
functions of the company, that they were paid on the basis of
production/output (by way of commissions and bonuses, and not salaries), and
that they were neither under any form of control whatsoever as to hours of
work nor were they "on call" by the company. On the basis of the foregoing,
Grepalife concluded that the relationship was one of principal-agent and
therefore, necessarily, it is the Civil Code and the Insurance Code which
properly govern the relationship, to the exclusion of the Labor Code.
ISSUE:
(1) Whether or not there was grave abuse of discretion on the part of
public respondent in holding that Ernesto and Rodrigo are employees of
Grepalife;
(2) Whether or not there was grave abuse of discretion on the part of
public respondent in ordering the award of separation pay to private
respondents as sanction for Grepalife's failure to accord them due process
even though there was finding of just cause for their dismissal.
RULING:
The Court finds that, as correctly held by public respondent, the
relationships of the Ruiz brothers and Grepalife were those of employeremployee. The Insurance Code may govern the licensing requirements and
other particular duties of insurance agents, but it does not bar the application
of the Labor Code with regard to labor standards and labor relations.
It is well-settled that the existence of an employer-employee relationship
is ultimately a question of fact, and such findings of fact of the labor arbiter
and the NLRC shall be accorded not only respect but even finality when
supported by substantial evidence [RJL Martinez Fishing Corporation v. NLRC,
G.R. Nos. 63550-51, January 31, 1984, 127 SCRA 454; Asim v. Castro, G.R. Nos.
75063-64, June 30, 1988, 163 SCRA 344; Murillo v. Sun Valley Realty, Inc., G.R.
No. 67272, June 30, 1988, 163 SCRA 271], as in this case.
With respect to the second issue, petitioner argues that private
respondents are not entitled to separation pay since there was clear finding of
just cause for dismissal, and furthermore "neither the law nor the rules
implementing the same authorizes the award of separation pay as 'penalty."
The Court held therein that an indemnity, not "separation pay", must be
imposed on the employer for failure to observe the procedural requirements of
notice and hearing prior to the dismissal of an employee for just cause.
Considering the circumstances of the case at bar, petitioner must indemnify
private respondents in the amount of One Thousand Pesos (P1,000.00) each
[See also Shoemart, Inc. v. NLRC, G.R. No. 74229, August 11, 1989].
IN VIEW OF THE FOREGOING, the decision of the NLRC is hereby
MODIFIED insofar as the award of "separation pay" is concerned. In lieu of
"separation pay" petitioner Grepalife is hereby ordered to indemnify private
respondents Rodrigo Ruiz and Ernesto Ruiz the amount of One Thousand Pesos
(P1,000.00) each.
50. Cosmopolitan Funeral Homes, Inc. vs. Maalat, 187 SCRA 773
FACTS:
Sometime in 1962, petitioner Cosmopolitan Funeral Homes, Inc.
engaged the services of private respondent Noli Maalat as a "supervisor" to
handle the solicitation of mortuary arrangements, sales and collections. The
funeral services which he sold refer to the taking of the corpse, embalming,
casketing, viewing and delivery. The private respondent was paid on a
commission basis of 3.5% of the amounts actually collected and remitted.
On January 15, 1987, respondent Maalat was dismissed by the petitioner
for commission of the following violations despite previous warnings: (a)
Understatement of the reported contract price against the actual contract
price charged to and paid by the customers;(b) Misappropriation of funds or
collections by non-remittance of collections and non-issuance of Official
Receipt; (c) Charging customers additional amount and pocketing the same for
the cost of medicines, linen, and security services without issuing Official
Receipt; (d) Non-reporting of some embalming and re-embalming charges and
pocketing the same and non-issuance of Official Receipt; (e) Engaging in tomb
making and inclusion of the price of the tomb in the package price without
prior knowledge of the customers and the company
Maalat filed a complaint for illegal dismissal and non-payment of
commissions.
On the basis of the parties' position papers, Labor Arbiter Newton R.
Sancho rendered a decision declaring Maalat's dismissal illegal and ordering
the petitioner to pay separation pay, commission, interests and attorney's fee
in the total amount of P205,571.52.
In an appeal from the decision, the National Labor Relations Commission
(NLRC), on May 31, 1988, reversed the Arbiter's action and rendered a new
decision with judgment rendered declaring the dismissal of complainant Noli
Maalat by respondent-appellant as justified and with lawful cause
ISSUE:
Whether or not the NLRC erred in ruling that an employment relationship
existed between the parties
RULING:
In determining whether a person who performs work for another is the
latter's employee or an independent contractor, the prevailing test is the "right
of control" test. Under this test, an employer-employee relationship exists
where the person for whom the services are performed reserves the right to
control not only the end to be achieved, but also the manner and means to be
used in reaching that end.
The petitioner argues that Maalat was never its employee for he was
only a commission agent whose work was not subject to its control. Citing
Investment Planning Corporation of the Philippines v. Social Security System
(21 SCRA 924 [1967]), the petitioner states that the work of its agents
approximates that of an independent contractor since the agent is not under
control by the latter with respect to the means and methods employed in the
performance of the work, but only as to the results.
The fact that the petitioner imposed and applied its rule prohibiting
superiors from engaging in other funeral business which it considered inimical
to company interests proves that it had the right of control and actually
exercised its control over the private respondent. In other words, Maalat
worked exclusively for the petitioner.
The non-observance of regular office hours does not sufficiently show
that Maalat is a "supervisor on commission basis" nor does the same indicate
that he is an independent salesman. As a supervisor, although compensated
on commission basis, he is exempt from the observance of normal hours of
work for his compensation is measured by the number of sales he makes. He
may not have had the usual fixed time for starting and ending his work as in
other types of employment but he had to spend most of his working hours at
his job. People die at all times of the day or night.
All considered, we rule that private respondent is an employee of
petitioner corporation.
51. Martinez vs. NLRC, 272 SCRA 793

FACTS:
Raul Martinez was an operator of two taxicab units under business name
PAMATX and another two units under business name TIGERTX. Private
respondents worked for him as drivers. When Martinez died, he left behind his
mother, Nelly Martinez as his sole heir. July 1992, the drivers lodged complaint
against Raul and Nelly before the labor arbiter for violation of PD 851 and
illegal dismissal. They alleged that they have been regular drivers of Raul
earning 400 a day, not once during their employment that they received 13th
month pay. When Nelly assumed the management of the units, she informed
the drivers that she will sell the units for she can't manage it, but later did not
proceed with her plan and assigned the units to other drivers instead. Nelly
traversed that the 13th month pay was personal to Raul and therefore didn't
survive the death of Raul. Nelly contend too that the drivers were not entitled
of the benefits of PD 851 because paid on purely boundary basis which are not
covered by PD 851, the relationship was not employer-employee but that od
lessee-lessor.
On 30 August 1993 the Labor Arbiter dismissed the complaint on the
following grounds:(a) private respondents' claims being personal were
extinguished upon the death of Raul Martinez; (b) petitioner was a mere
housewife who did not possess the required competence to manage the
business; and, (c) private respondents were not entitled to 13th month pay
because the existence of employer-employee relationship was doubtful on
account of the boundary system adopted by the parties. However, respondent
National Labor Relations Commission viewed the case differently. According to
NLRC, (a) private respondents were regular drivers because payment of
wages, which is one of the essential requisites for the existence of
employment relation, may either be fixed, on commission, boundary, piecerate or task basis; (b) the management of the business passed on to petitioner
who even replaced private respondents with a new set of drivers; and, (c) the
claims of private respondents survived the death of Raul Martinez considering
that the business did not cease operation outright but continued presumably,
in the absence of proof of sale, up to the moment. On 28 January 1994
respondent NLRC thus set aside the appealed decision, and as alternative to
reinstatement, ordered petitioner to grant respondents separation pay. On 30
September 1994 the motion for reconsideration was denied. Hence, this
recourse of petitioner.
ISSUE:
Whether or not the contention of the petition is meritorious.
RULING:
The claim for 13th month pay pertains to the personal obligation of Raul
Martinez which did not survive his death. The rule is settled that unless
expressly assumed, labor contracts are not enforceable against the transferee
of an enterprise. In the present case, petitioner does not only disavow that
she continued the operation of the business of her son but also disputes the
existence of labor contracts between her son and private respondents. The
reason for the rule is that labor contracts are in personam, and that claims for
back wages earned from the former employer cannot be filed against the new
owners of an enterprise. Nor is the new operator of a business liable for claims
for retirement pay of employees. Thus the claim of private respondents should
have been filed instead in the intestate proceedings involving the estate of
Raul Martinez in accordance with Sec. 5, Rule 86, of the Rules of Court.
In National Labor Union v. Dinglasan,[9] this Court ruled that the
relationship between jeepney owners/operators on one hand and jeepney
drivers on the other under the boundary system is that of employer-employee
and not of lessor-lessee. In the present case, however, private respondents
simply assumed the continuance of an employer-employee relationship
between them and petitioner, when she took over the operation of the
business after the death of her son Raul Martinez, without any supporting
evidence. Consequently, we cannot sustain for lack of basis the factual finding
of respondent NLRC on the existence of employer-employee relationship
between petitioner and private respondents. Clearly, such finding emanates
from grave abuse of discretion. With this conclusion, consideration of the
issue on illegal dismissal becomes futile and irrelevant.
The petition is GRANTED. The Decision of respondent National Labor
Relations Commission dated 28 January 1994 ordering petitioner Nelly Acta
Martinez to grant respondents separation pay as well as its Order of 30
September 1994 denying reconsideration is SET ASIDE. The Decision of the
Labor Arbiter dated 30 August 1993 dismissing the complaint is REINSTATED.
52. Eastern Shipping Lines vs. POEA, 160 SCRA 533
FACTS:
Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was
killed in an accident in Tokyo, Japan, March 15, 1985. His widow sued for
damages under Executive Order No. 797 and Memorandum Circular No. 2 of
the POEA. The petitioner, as owner of the vessel, argued that the complaint
was cognizable not by the POEA but by the Social Security System and should
have been filed against the State Insurance Fund.
The POEA nevertheless assumed jurisdiction and after considering the
position papers of the parties ruled in favor of the complainant.
The decision is challenged by the petitioner on the principal ground that
the POEA had no jurisdiction over the case as the husband was not an
overseas worker.
ISSUE:
Whether or not POEA has jurisdiction over the case
RULING:
The Philippine Overseas Employment Administration was created under
Executive Order No. 797, promulgated on May 1, 1982, to promote and
monitor the overseas employment of Filipinos and to protect their rights. It
replaced the National Seamen Board created earlier under Article 20 of the
Labor Code in 1974. Under Section 4(a) of the said executive order, the POEA
is vested with "original and exclusive jurisdiction over all cases, including
money claims, involving employee-employer relations arising out of or by
virtue of any law or contract involving Filipino contract workers, including
seamen."
The award of P180,000.00 for death benefits and P12,000.00 for burial
expenses was made by the POEA pursuant to its Memorandum Circular No. 2,
which became effective on February 1, 1984. This circular prescribed a
standard contract to be adopted by both foreign and domestic shipping
companies in the hiring of Filipino seamen for overseas employment.
But the petitioner questions the validity of Memorandum Circular No. 2
itself as violative of the principle of non-delegation of legislative power. It
contends that no authority had been given the POEA to promulgate the said
regulation; and even with such authorization, the regulation represents an
exercise of legislative discretion which, under the principle, is not subject to
delegation.
Memorandum Circular No. 2 is an administrative regulation. The model
contract prescribed thereby has been applied in a significant number of the
cases without challenge by the employer. The power of the POEA (and before
it the National Seamen Board) in requiring the model contract is not unlimited
as there is a sufficient standard guiding the delegate in the exercise of the said
authority. That standard is discoverable in the executive order itself which, in
creating the Philippine Overseas Employment Administration, mandated it to
protect the rights of overseas Filipino workers to "fair and equitable
employment practices."
53. Union of Filipino Employees vs. Vivar, 205 SCRA 200
FACTS:
This labor dispute stems from the exclusion of sales personnel from the
holiday pay award and the change of the divisor in the computation of benefits
from 251 to 261days.
On November 8, 1985, respondent Filipro, Inc. (now Nestle Philippines,
Inc.) filed with the National Labor Relations Commission (NLRC) a petition for
declaratory relief seeking a ruling on its rights and obligations respecting
claims of its monthly paid employees for holiday pay in the light of the Court's
decision in Chartered Bank Employees Association v. Ople (138 SCRA 273
[1985]). Both Filipro and the Union of Filipino Employees (UFE) agreed to
submit the case for voluntary arbitration and appointed respondent Benigno
Vivar, Jr. as voluntary arbitrator. Filipro filed a motion for clarification seeking
(1) the limitation of the award to three years, (2) the exclusion of salesmen,
sales
representatives,
truck
drivers,
merchandisers
and
medical
representatives (hereinafter referred to as sales personnel) from the award of
the holiday pay, and (3) deduction from the holiday pay award of overpayment
for overtime, night differential, vacation and sick leave benefits due to the use
of 251 divisor. (Rollo, pp. 138-145) Petitioner UFE answered that the award
should be made effective from the date of effectivity of the Labor Code, that
their sales personnel are not field personnel and are therefore entitled to
holiday pay, and that the use of 251 as divisor is an established employee
benefit which cannot be diminished.
ISSUE:
Whether or not the respondent's sales personnel are not field personnel
under Article 82 of the Labor Code?
RULING:
The criteria for granting incentive bonus are: (1) attaining or exceeding
sales volume based on sales target; (2) good collection performance; (3)
proper compliance with good market hygiene; (4) good merchandising work;
(5) minimal market returns; and (6) proper truck maintenance. (Rollo, p. 190).
The Court thereby resolves that the grant of holiday pay be effective, not from
the date of promulgation of the Chartered Bank case nor from the date of
effectivity of the Labor Code, but from October 23, 1984, the date of
promulgation of the IBAA case.
WHEREFORE, the order of the voluntary arbitrator in hereby MODIFIED.
The divisor to be used in computing holiday pay shall be 251 days. The holiday
pay as above directed shall be computed from October 23, 1984. In all other
respects, the order of the respondent arbitrator is hereby AFFIRMED.
54. Cagampan vs. NLRC, 195 SCRA 533

FACTS:
On April 17 and 18,1985, petitioners, all seamen, entered into separate
contracts of employment with the Golden Light Ocean Transport, Ltd., through its
local agency, private respondent ACE MARITIME AGENCIES, INC. with their
respective ratings and monthly salary rates. Petitioners were deployed on May 7,
1985, and discharged on July 12, 1986. Thereafter, petitioners collectively and/or
individually filed complaints for non-payment of overtime pay, vacation pay and
terminal pay against private respondent. In addition, they claimed that they were
made to sign their contracts in blank; that although they agreed to render
services on board the vessel Rio Colorado managed by Golden Light Ocean
Transport, Ltd., the vessel they actually boarded was MV "SOIC I" managed by
Columbus Navigation; and more so, petitioners de Castro and de Jesus charged
that although they were employed as ordinary seamen, they actually performed
the work and duties of Able Seamen. Private respondent furnished with copies of
petitioners' complaints and summons, but it failed to file its answer within the
period. Thus, on January 12, 1987, an Order was issued declaring that private
respondent has waived its right to present evidence in its behalf and that the
cases are submitted for decision.
On August 5, 1987, the Philippine Overseas Employment Administration
(POEA) rendered a Decision DISMISSING petitioners' claim for terminal pay but
GRANTED their prayer for leave pay and overtime pay. Private respondent
appealed from the POEA's Decision to the NLRC on August 24, 1987. On March 16,
1988, the NLRC promulgated a Decision, REVERSING and SETTING ASIDE and
another one entered dismissing the cases for lack of merit.
On May 8, 1988, petitioners filed an Urgent Motion for Reconsideration of
the NLRC's Decision but the same was denied by the NLRC for lack of merit in its
Resolution dated September 12, 1988. Hence, this appeal from the decision and
resolution of the respondent NLRC. Petitioners allege that respondent
Commission, NLRC, gravely abused its discretion or erred in reversing and setting
aside the POEA decision and correspondingly dismissing the appeal of petitioners,
allegedly in contravention of law and jurisprudence. Private respondent maritime
company disclaims the aforesaid allegations of petitioners. The Solicitor General,
arguing for public respondent NLRC, contends that: The NLRC did not abuse its
discretion in the rendition of subject decision because the evidence presented by
petitioners in support of their complaint is by itself sufficient to back up the
decision. The issue of the disallowance of overtime pay stems from an
interpretation of particular provisions of the employment contract.
ISSUE:
WON respondent Commission NLRC gravely abused its discretion or erred
in REVERSING the decision of POEA (in granting overtime pay to petitioners
equivalent to 30% of their basic pay).
RULING:
No, The NLRC cannot be faulted for disallowing the payment of overtime
pay because it merely straightened out the distorted interpretation asserted by
petitioners and defined the correct interpretation of the provision on overtime pay
embodied in the contract conformably with settled doctrines on the matter.
Notably, the NLRC ruling on the disallowance of overtime pay is ably supported by
the fact that petitioners never produced any proof of actual performance of
overtime work. Petitioners have conveniently adopted the view that the
"guaranteed or fixed overtime pay of 30% of the basic salary per month"
embodied in their employment contract should be awarded to them as part of a
"package benefit." They have theorized that even without sufficient evidence of
actual rendition of overtime work, they would automatically be entitled to
overtime pay. Their theory is erroneous for being illogical and unrealistic.
Their thinking even runs counter to the intention behind the provision. The
contract provision means that the fixed overtime pay of 30% would be the basis
for computing the overtime pay if and when overtime work would be rendered.
Simply, stated, the rendition of overtime work and the submission of sufficient
proof that said work was actually performed are conditions to be satisfied before a
seaman could be entitled to overtime pay which should be computed on the basis
of 30% of the basic monthly salary. In short, the contract provision guarantees the
right to overtime pay but the entitlement to such benefit must first be
established. Realistically speaking, a seaman, by the very nature of his job, stays
on board a ship or vessel beyond the regular eight-hour work schedule. For the
employer to give him overtime pay for the extra hours when he might be sleeping
or attending to his personal chores or even just lulling away his time would be
extremely unfair and unreasonable.
55. Stolt Nielsen Marine Services, Inc. vs. NLRC, 264 SCRA 307
FACTS:
Respondent Meynardo J. Hernandez was hired by Stolt-Nielsen Marine
Services Inc. as radio officer on board M/T Stolt Condor for a period of ten months.
He boarded the vessel on January 20, 1990.On April 26, 1990, the ship captain
ordered private respondent to carry the baggage of crew member Lito Loveria
who was being repatriated. He refused to obey the order out of fear in view of the
utterance of said crew member "makakasaksak ako" and also because he did not
perceive such task as one of his duties as radio officer. As a result of such refusal,
private respondent was ordered to disembark on April 30, 1990 and was himself
repatriated on May 15, 1990. He was paid his salaries and wages only up to May
16, 1990.
Private respondent filed before public respondent POEA a complaint for
illegal dismissal and breach of contract paying for, among other things, payment
of salaries, wages, overtime and other benefits due him for the unexpired portion
of the contract which was six (6) months and three (3) days. Petitioner in its
answer alleged that private respondent refused to follow the "request" of the
master of the vessel to explain to Lolito Loveria, the reason for the latter's
repatriation and to assist him in carrying his baggage, all in violation of Article
XXIV, Section I of the Collective Bargaining Agreement (CBA) and the POEA
Standard Contract. Hence, private respondent, after being afforded the
opportunity to explain his side, was dismissed for gross insubordination and
serious misconduct. Respondent denied that the master of the vessel requested
him to explain to Loveria the reason for the latter's repatriation.
Thereafter, POEA Administrator rendered an award in favor of private
respondent. Aggrieved, petitioner Stolt-Nielsen appealed to the National Labor
Relations Commission (NLRC). The NLRC concurred with the POEA Administrator in
ruling that private respondent, having been illegally dismissed, was, therefore,
entitled to the monetary award. It further stated that private respondent's duty
as a radio officer or radio operator does not include the carrying of the luggage of
any seaman or explaining to said seaman the reason for his repatriation. Thus,
concluded the NLRC, his termination on this ground was not proper and, therefore,
he had every right to the monetary award. The NLRC likewise granted private
respondent's claim for fixed overtime pay and attorney's fees.
ISSUES:
1. Whether or not private respondent was legally dismissed on the ground
of gross insubordination and serious misconduct.
2. Whether or not private respondent was entitled to the award of over-time
pay.
RULING:
1. YES. Willful disobedience of the employer's lawful orders, as a just cause
for the dismissal of an employee, envisages the concurrence of at least two (2)
requisites. The employee's assailed conduct must have been willful or intentional,
the willfulness being characterized by a "wrongful and perverse attitude", and the
order violated must have been reasonable, lawful, made known to the employee
and must pertain to the duties which he had been engaged to discharge. The
Court agrees that by virtue of the aforementioned CBA and POEA Standard
Contract provisions cited by petitioner, private respondent is indeed bound to
obey the lawful commands of the captain of the ship, but only as long as these
pertain to his duties. The order to carry the luggage of a crew member, while
being lawful, is not part of the duties of a radio officer. Assuming arguendo that
lawful commands of a ship captain aresupposed to be obeyed by the complement
of a ship, private respondent's so-called act of disobedience" does not warrant the
supreme penalty of dismissal. In instant case, the POEA found that private
respondent's actuation which led to his dismissal was the first and only act of
disobedience during his service with the petitioner, Furthermore, examination of
the circumstances surrounding private respondent'sdisobedience shows that the
repatriated seaman's utterance of "makakasaksak ako" so instilled fear in private
respondent that he was deterred from carrying out the order of the captain.
Hence, his act could not be rightfully characterized as one motivated by a

"wrongful and perverse attitude." Besides, said incident posed no serious or
substantial danger to the well-being of his other co-employees or of the general
public doing business with petitioner employer, neither did such behavior
threaten substantial prejudice to the business of his employer.
2. NO. The Court reiterated that the rendition of overtime work and the
submission of sufficient proof that said work was actually performed are
conditions to be satisfied before a seaman could be entitled to overtime pay
which should be computed on the basis of 30% of the basic monthly salary. In
short, the contract provision guarantees the right to overtime pay but the
entitlement to such benefit must first be established. Realistically speaking, a
seaman, by the very nature of his job, stays on board a ship or vessel beyond the
regular eight-hour work schedule. For the employer to give him overtime pay for
the extra hours when he might be sleeping or attending to his personal chores or
even just lulling away his time would be extremely unfair and unreasonable.
56. Nawasa vs. Nawasa Consolidated Unions, 11 SCRA 766
FACTS:
The case above-mentioned was filed by herein petitioner NWSA
Consolidated Unions against herein respondent National Waterworks and
Sewerage Authority demanding implementation of the 40-Hour Week Law
(Republic Act No. 1880), and alleging violations of the collective bargaining
agreement, dated 28 December 1956, concerning "distress pay"; minimum
wage of P5.25; promotional appointments and filling of vacancies of newly
created positions; additional compensation for night work; wage increases to
some laborers, and employees; and strike duration pay.
Two lawyers of the petitioner union, Attys. Cipriano Cid and Israel
Bocobo, who had participated in both Cases Nos. 19-IPA and 66-IPA, moved for
the payment of their attorney's fees. On agreement of the parties, their fees
were fixed and ordered paid by the court. A third lawyer, Atty. Atanacio Pacis,
who did not appear in Case No. 66-IPA but was a counsel for the union in Case
No. 19-IPA as member of the Cid Law firm, from which he later separated, also
moved for his fees. His motion was granted in the appealed order of 18 July
1966, issued "pursuant, to the order of 27 November 1964," and allowing
payment of ttorney's fees to Atty.
Records further show that there exists a contract for professional
services entered into, by and between the Consolidated Unions in the NWSA
and Cipriano Cid and Associates, providing for a twenty per cent (20%)
attorney's fee for the latter, for any and all sums that may be collected by the
unions, in this case, or five (5%) of which shall be given to the general fund
of the union.
ISSUE:
Whether or not the contention of the petition is meritorious.
RULING:
The claim of Attys. Cipriano Cid and Atanacio E. Pacis of Twenty Per
centum (20%) attorney's fee is hereby approved and shall be noted as lien
upon the amount of money that may be due and payable to the employees
involved in the above-entitled case. Briefly, the participations of Attys. Cid,
Pacis and Bocobo in the prosecution of this case may be given as follows. Atty.
Cipriano Cid as chief counsel prepared the basic pleadings. He headed the
union panel during the negotiation and he appeared on trial during the initial
stage of the proceedings. Atty. Atanacio E. Pacis, on the other hand actively
handled the prosecution of the case during the trial on the merits. He was the
one who filed the opposition to the motion for reconsideration filed by the
respondent against the decisions of the trial judge. And finally, when the
resolution of the Court en banc affirming the decisions of the trial judge, was
appealed by respondent to the Supreme Court, Atty Israel Bocobo, handled the
appeal. Court is constrained to modify the order of the trial judge dated 26 July
1961, under its power granted under Section 17 Commonwealth Act 103.
It is just that Atty. Pacis should share in the 23% counsel fees
corresponding to the amounts appropriated by the NWSA under Item IV abovementioned of the collective bargaining agreement since these were the claims
adjudicated in the case wherein he acted as one of the attorneys. No error

was, therefore, committed in the appealed order of 18 July 1966.
IN VIEW THEREOF, the appealed order is affirmed, with costs against
appellants.
57. Manggagawa ng PRC vs. Phil. Refining Co., 194 Phil 608
FACTS:
On April 15,1966, the Bisig ng Manggagawa ng Philippine Refining
Company, Inc., as the representative union of the rank and file employees of
the Philippine Refining Co., Inc., filed with the Court of First Instance of Manila
a petition for declaratory relief praying that the Christmas bonus of one month
or thirty days pay and other de determinable benefits should be included for
the purpose of computation of the overtime pay.
On May 3, 1966, the Philippine Refining Co.. Inc. filed its answer to the
petition alleging, among others, that never did the parties intend to include
the employees' Christmas bonus and other fringe benefits in the computation
of the overtime pay. After the requisite pre-trial was held, the Court of First
Instance of Manila issued an order dated September 16, 1966, limiting the
issues to the proper interpretation of the above quoted provision of the 1965
collective bargaining agreement and to the applicability to the case of the
NAWASA ruling and requiring the parties to submit evidence as to the
circumstances under which the questioned provision had been included in the
agreement of 1965.
During the trial, the parties presented their respective witnesses.
On December 8, 1966, the Court of First Instance of Manila rendered declaring
that the term "regular base pay" in Section 6, Ararticle VI of Exhibit A refers
only to "regular base pay" and does not include Christmas bonus and other
fringe benefits.
A motion for reconsideration of the decision was filed by the petitioner
union but the same was denied in an order dated February 17, 1967.
ISSUES:
(1) whether or not the phrase "regular base pay" as used in the abovequoted provision of the 1965 CBA includes Christmas bonus and other fringe
benefits; and
(2) whether or not the stipulation in the CBA on overtime pay violates
the Nawasa doctrine if the answer to question No. I is in the negative.
RULING:
We answer both questions in the negative. The phrase "regular base
pay" is clear, unequivocal and requires no interpretation. It means regular
basic pay and necessarily excludes money received in different concepts such
as Christmas bonus and other fringe benefits. In this connection it is necessary
to remember that in the enforcement of previous collective bargaining
agreements containing the same provision of overtime pay at the rate of
regular base pay plus 50@'c thereof", the overtime compensation was
invariably based only on the regular basic pay, exclusive of Christmas bonus
and other tinge benefits. Appellant union knew all the while of such
interpretation and precisely attempted to negotiate for a provision in the
subject collective bargaining agreement that would include the Christmas

bonus and other fringe benefits in the computation of the overtime pay.
Significantly, the appellee company did not agree to change the phrase
"regular base pay" as it could not consent to the inclusion of the fringe
benefits in the computation of the overtime pay. Hence, the appellant union
could not question the intended definition of the phrase but could only claim
that the same violated the Nawasa doctrine and insist that the phrase should
be redefined to conform to said doctrine.
58. Shell Oil Workers Union vs. Shell Oil Co., 70 SCRA 223
FACTS:
Respondent Shell Company of the Philippines (COMPANY) dissolved its
security guard section stationed at its Pandacan Installation, notwithstanding
its (guard section) continuance and that such is assured by an existing
collective bargaining contract. The respondent company transferred 18
security guards to its other department and consequently hired a private
security agency to undertake the work of said security guards. This resulted in
a strike called by petitioner Shell Oil Workers Union (UNION), The President
certified it to respondent Court of Industrial Relations (CIR). CIR declared the
strike illegal on the ground that such dissolution was a valid exercise of a
management prerogative. Thus this appeal is taken.
Petitioner argued that the 18 security guards affected are part of the
bargaining unit and covered by the existing collective bargaining contract, as
such, their transfers and eventual dismissals are illegal being done in violation
of the existing contract. The Company maintained that in contracting out the
security service and redeploying the 18 security guards affected, it was merely
performing its legitimate prerogative to adopt the most efficient and
economical method of operation, that said action was motivated by business
consideration in line with past established practice and made after notice to
and discussion with the Union, that the 18 guards concerned were dismissed
for wilfully refusing to obey the transfer order, and that the strike staged by
the Union is illegal.
ISSUE:
Whether the existing collective bargaining contract on maintaining
security guard section, among others, constitute a bar to the decision of the
management to contract out security guards.
RULING:
YES. The strike was legal because there was a violation of the collective
bargaining agreement by Company. It was part of the CBA that the Security
Guard Section will remain. Yet, the Company did not comply with the
stipulation in CBA. It was thus an assurance of security of tenure, at least,
during the lifetime of the agreement.
For what is involved is the integrity of the agreement reached, the terms
of which should be binding on both parties
The stand of Shell Company as to the scope of management prerogative
is not devoid of plausibility, management prerogative of the Company would
have been valid if it were not bound by what was stipulated in CBA. The
freedom to manage the business remains with management. It cannot be

denied the faculty of promoting efficiency and attaining economy by a study of
what units are essential for its operation. To it belongs the ultimate
determination of whether services should be performed by its personnel or
contracted to outside agencies. However, while management has the final say
on such matter, the labor union is not to be completely left out.
An unfair labor practice is committed by a labor union or its agent by its
refusal to bargain collectively with the employer. Collective bargaining does
not end with the execution of an agreement, being a continuous process, the
duty to bargain necessarily imposing on the parties the obligation to live up to
the terms of such a collective bargaining agreement if entered into, it is
undeniable that non-compliance therewith constitutes an unfair labor practice.
The right to self-organization guarded by the Industrial Peace Act
explicitly includes the right to engage in concerted activities for the purpose
of collective bargaining and to the mutual aid or protection.
WHEREFORE, the decision of respondent Court of Industrial Relations of
August 5, 1967 is reversed.
59. PNB vs. PEMA, 115 SCRA 507

FACTS:
PNB and PNB Employees Association (PEMA) had a dispute regarding the
proper computation of overtime pay. PEMA wanted the cost of living allowance
(granted in 1958) and longevity pay (granted in 1961) to be included in the
computation. PNB disagreed and the 2 parties later went before the CIR to
resolve the dispute.
CIR decided in favor of PEMA and held that PNB should compute the
overtime pay of its employees on the basis of the sum total of the employees
basic salary or wage plus cost of living allowance and longevity pay. The CIR
relied on the ruling in NAWASA v NAWASA Consolidated Unions, which held
that for purposes of computing overtime compensation, regular wage
includes all payments which the parties have agreed shall be received during
the work week, including differentiated payments for working at undesirable
times, such as at night and the board and lodging customarily furnished the
employee. This prompted PNB to appeal, hence this case.
ISSUE:
WON the cost of living allowance and longevity pay should be included
in the computation of overtime pay as held by the CIR.
RULING:
NO. Overtime pay is for extra effort beyond that contemplated in the
employment contract; additional pay given for any other purpose cannot be
included in the basis for the computation of overtime pay.
Absent a specific provision in the CBA, the bases for the computation of
overtime pay are 2 computations, namely: WON the additional pay is for extra
work done or service rendered, WON the same is intended to be permanent
and regular, not contingent nor temporary as a given only to remedy a
situation which can change any time.
Longevity pay cannot be included in the computation of overtime pay for
the very simple reason that the contrary is expressly stipulated in the CBA,
which constitutes the law between the parties.
As regards cost of living allowance, there is nothing in Commonwealth
Act 444 [or the 8-hour Labor Law, now Art. 87 Labor Code] that could justify
PEMAs posture that it should be added to the regular wage in computing
overtime pay. C.A. 444 prescribes that overtime work shall be paid at the
same rate as their regular wages or salary, plus at least 25% additional. The
law did not define what is a regular wage or salary. What the law emphasized
is that in addition to regular wage, there must be paid an additional 25% of
that regular wage to constitute overtime rate of pay. Parties were thus
allowed to agree on what shall be mutually considered regular pay from or
upon which a 25% premium shall be based and added to makeup overtime
compensation.
No rule of universal application to other cases may be justifiably
extracted from the NAWASA case. CIR relies on the part of the NAWASA
decision where the SC cited American decisions whose legislation on overtime
is at variance with the law in this jurisdiction. The US legislation considers
work in excess of forty hours a week as overtime; whereas, what is generally
considered overtime in the Philippines is work in excess of the regular 8 hours
a day. It is understandably material to refer to precedents in the US for
purposes of computing weekly wages under a 40-hour week rule, since the
particular issue involved in NAWASA is the conversion of prior weekly regular
earnings into daily rates without allowing diminution or addition.
Disposition decision appealed from is REVERSED
60. Phil. Duplicators Inc. vs. NLRC, 241 SCRA 380

FACTS:
Petitioner Corporation pays its salesmen a small fixed or guaranteed
wage; the greater part of the latters wages or salaries being composed of the
sales or incentive commissions earned on actual sales of duplicating machines
closed by them. Thus the sales commissions received for every duplicating
machine sold constituted part of the basic compensation or remuneration of
the salesmen of the Philippine Duplicators for doing their job.
The Labor Arbiter directed Petitioner Duplicators to pay 13th month pay
to private respondent employees computed on the basis of their fixed wages
plus sales commission.
Sec. 4 of the Supplementary Rules and Regulations Implementing PD No.
851 (Revised Guidelines Implementing 13th Month Pay) provides that overtime
pay, earning and other remuneration which are not part of the basic salary
shall not be included in the computation of the 13th month pay.
Petitioner Corporation contends that their sales commission should not
be included in the computation of the 13th month pay invoking the
consolidated cases of Boie-Takeda Chemicals, Inc. vs Hon. Dionisio dela Serna
and Philippine Fuji Xerox Corp. vs Hon. Crecencio Trajano, were the so-called
commissions of medical representatives of Boie-Takeda Chemicals and rankand-file employees of Fuji Xerox Co. were not included in the term basic
salary in computing the 13th month pay.
ISSUE:
WON sales commissions comprising a pre-determined percent of the
selling price of the goods are included in the computation of the 13th month
pay.
RULING:
Yes. These commission which are an integral part of the basic salary
structure of the Philippine Duplicators employees-salesmen, are not overtime
payments, nor profit-sharing payments nor any other fringe benefit. Thus,
salesmens commissions comprising a pre-determined percent of the selling
price of the goods were properly included in the term basic salary for
purposes of computing the 13th month pay.
Commissions of medical representatives of Boie-Takeda Chemicals and
rank-and-file employees of Fuji Xerox Co. were not included in the term basic
salary because these were paid as productivity bonuses which is not
included in the computation of 13th month pay.
61. Shell Co. of the Phil. vs. National Labor Union, 81 Phil 315
FACTS:
National Labor Union instituted this action to ask for 50% additional
compensation for the employees of Shell Company who work at night to attend to
the foreign planes landing and taking off (at night), to supply petrol and
lubricants, and perform other duties. Court of Industrial Relations held that The
Shell Company pay its workers working at night an additional compensation of
50% over their regular salaries by working during daytime. Shell argues that
there is no legal provision empowering CIR to order payment of additional
compensation to workers who work at night, and that Act No. 444 relieved the
employer of such obligation as it is provided in the Act where it made compulsory
the "overtime" (additional compensation) pay for work rendered beyond 8 hours,
and such cases do not include the work at night. NLU argues decision of the CIR is
part of its broad and effective powers as granted by Commonwealth Act No. 103 the charter of the Industrial Relations Court, and that Act No. 444 has no
Application to this case because it is referring only to particular and the maximum
working day permitted in industrial establishments - the 8-hour day.
ISSUES:
WON CIR has the authority to order payment of additional compensation to
workers who work at night?
RULING:
YES. Articles 1, 4 and 13 of Commonwealth Act No. 103:
It is evident from the Com Act. No. 103 : SECTION 1. (a) that when a
dispute arises between the principal and the employee or worker on the question
of wages, CIR has jurisdiction throughout the Philippines to consider, investigate
and resolve the dispute, setting the wages they deem fair and reasonable,
SEC. 4. (b) that for the purposes of prevention, arbitration, decision and
arrangement, CIR also has jurisdiction over any dispute - industry and agriculture
- resulting from any differences in wages, compensation or participation, working
hours, conditions of employment or tenancy between the employers and
employees or between workers and owners and the landowners or farm workers
subject to the fulfillment of certain requirements and conditions when it sees that
the dispute could cause results or a strike,
SEC. 13. (c) that in exercising its powers specified above, the Court
Industrial Relations is not limited, to decide the dispute, to grant the remedy or
remedies requested by the parties to the dispute, but may include in any order or
decision or determination relating to the purpose of settling the dispute or to
prevent further agricultural or industrial disputes.
The argument of Shell is mistaken. Law No. 444 does not apply to this
case, it is evident that it has a specific objective, namely: (a) set at 8 hours the
maximum working day, (b) at some exceptional cases employees could be
allowed Work off the day, (c) provide increment, which must be not less than 25%
of regular salary for the "overtime" or work in excess of 8 hours.
The work required by Shell is not covered by the overtime of Com Act. 444
since the work which is the subject of controversy in this case is not overtime but
a full day of work for 8 hours, done at night or in night shift.Hence, if CIR has the
authority to fix wages for the work done during the day, it also has the authority
to fix wages done at night.(Work Day- 24-hr period commencing from the time an
employee regularly starts to work regardless of whether the work is broken or
continuous. It may not coincide with a calendar day. -Beda Reviewer). WON those
who work at night are entitled to 50% additional compensation?(YES)
SC discussed a lot of issues about the pernicious effect of working at night
justifying the award of additional 50% to the compensation of affected workers,
affirming the decision of CIR. Conclusion of SC
The case against nightwork, then, may be said to rest upon several
grounds. In the first place, there are the remotely injurious effects of permanent
nightwork manifested in the later years of the worker's life. Of more immediate
importance to the average worker is the disarrangement of his social life,
including the recreational activities of his leisure hours and the ordinary
associations of normal family relations. From an economic point of view,
nightwork is to be discouraged because of its adverse effect upon efficiency and
output. A moral argument against nightwork in the case of women is that the
night shift forces the workers to go to and from the factory in darkness. Recent
experiences of industrial nations have added much to the evidence against the
continuation of nightwork, except in extraordinary circumstances and unavoidable
emergencies. The immediate prohibition of nightwork for all laborers is hardly
practicable; its discontinuance in the case of women employees is unquestionably
desirable. 'The night was made for rest and sleep and not for work' is a common
saying among wage-earning people, and many of them dream of an industrial
order in which there will be no night shift. (Labor Problems, 3rd Edition, pp. 325328, by Watkins & Dodd.).
62. NARIC vs. Workers Union, 105 Phil. 891
FACTS:
Luis Mabagos started working in the service of the Government in 1918.
He had three civil service eligibilities, third grade, second grade and typist. In
1937 he transferred to the Naric. He served in said Government corporation in
various capacities, namely, as provincial inspector, district inspector, branch
manager, provincial buyer and cashier, warehouseman, and lastly supervisor
of all Naric warehouses in Manila. According to the records he was an efficient
employee. In July, 1948, he was suspended because he was implicated in a
case of theft in a warehouse under his supervision. The case was not finished
until 1950, when he was acquitted by the Court of Appeals. Upon his acquittal,
he demanded his reinstatement and the payment of his back wages. He was
paid back wages until December 31, 1949, but the reinstatement was denied
on the ground that his position had been abolished. He sought the payment of
his gratuity under the Osmea Retirement Act, but this was also denied. So his
union instituted these proceedings for his reinstatement and for the payment
of his back salary from January 1, 1950 until he is actually reinstated. The
Court of Industrial Relations found that his separation was without just cause
and granted the petition. The Naric appealed from this decision.
ISSUE:
Whether or not Mabagos should be considered separated from the
service.
RULING:
In order to decide the issue presented, it seems pertinent and relevant
to determine the status of Mabagos as an employee by reason of his
suspension.
The suspension of Mabagos in 1948 did not operate to separate him

from the service. The rule is that if an employee is exonerated from the
charges preferred against him, by virtue of which he was suspended, his back
salaries withheld during the full period of his suspension are paid to him
(section 260, Revised Administrative Code.) To this effect is our ruling in the
case of Batungbakal vs. NDC, et al, 93 Phil., 182; 49 Off. Gas. No. 6, pp. 2290,
3399.
Having proven that he (the Plaintiff had been suspended and dismissed
without cause, contrary to the express provision of the Constitution, his
reinstatement becomes a plain ministerial duty of the Auditor General, a duty
whose performance may be controlled and enjoined by mandamus. There is no
room for discretion. The Auditor General is not being directed to perform an
act which he may or may not execute according to his discretion. He is being
asked and enjoined to redress a grievance, to right a wrong. And the payment
of the back salary is merely incidental to and follows reinstatement, this, aside
from the parallel and analogy which may be found in section 260, paragraph
1, Revised Administrative Code which provides for the payment of back salary
upon reinstatement.
The import of section 260 of the Revised Administrative Code and of the
ruling herein above-quoted, which direct the payment of back salaries of a
suspended employee, is that the position is not vacated by the incumbent or
suppressed by reason of the suspension. The legal provision requiring
payment of salaries during the suspension implies the continuance of the
position during the said suspension; chan roblesvirtualawlibrarythe salaries
corresponding to the position during the time of suspension cannot be ordered
paid if the position is suppressed or eliminated. The argument of the Petitioner
that Mabagos was no longer in the employ of the Naric upon the approval of
Executive Order No. 350, s. 1950, by reason of the suspension, is therefore
incorrect. The position was still in existence, with the salary corresponding
thereto. The suspension merely operated to prevent Mabagos from exercising
the duties and prerogatives pertaining to his office, not his removal or
dismissal therefrom. The Petitioner should have retained the position of
Mabagos during the suspension, to await the result of the charges brought
against him. The Petitioner had no right to abolish the suspended employees
position, or to give it permanently to another during the pendency of the case
against the employee. For the foregoing considerations, the decision of the
Court of Industrial Relations appealed from is hereby affirmed, with costs
against the Petitioner.
63. Jose Rizal College vs. NLRC, 156 SCRA 27

FACTS:
Petitioner is a non-stock, non-profit educational institution. It has three
groups of employees:(a) personnel on monthly basis, who receive their
monthly salary uniformly throughout the year, irrespective of the actual
number of working days in a month without deduction for holidays;(b)
personnel on daily basis who are paid on actual days worked and they receive
unworked holiday pay and(c) collegiate faculty who are paid on the basis of
student contract hour. Before the start of the semester they sign contracts
with the college undertaking to meet their classes as perschedule.2. Petitioner
did not pay holiday pay from 1975 1977. Thus private respondent NATOW
filed with the Ministry of Labor a complaint in behalf of the faculty and
personnel of Jose Rizal College.3. February 5, 1979
LABOR ARBITERs decision:(a) Faculty and personnel paid by the month
uniformly in a school year, irrespective of the number of working days in a
month, without deduction for holidays, are presumed to be already paid the 10
paid legal holidays and are no longer entitled to separate payment for the said
regular holidays;(b) Personnel who are paid their wages daily are entitled to be
paid the 10 unworked regular holidays according to the pertinent provisions of
the Rules and Regulations Implementing the Labor Code;(c) Faculty who by
contract are paid compensation per student contract hour are not entitled to
unworked regular holiday pay considering that these regular holidays have
been excluded in the programming of the student contact hours.4. NLRC
decision: Modified. Teaching personnel paid by the hour are declared to be
entitled to holidaypay5. In counting student contract hours, legal holidays are
excluded and labeled in the schedule as "no class day." On the other hand, if a
regular week day is declared a holiday, the school calendar is extended to
compensate for that day. Thus petitioner argues that the advent of any of the
legal holidays within the semester will not affect the faculty's salary because
this day is not included in their schedule while the calendar is extended to
compensate for special holidays. Thus the required number of lecture hours is
not diminished.
ISSUE:
Whether the school faculty who according to their contracts are paid per
lecture hour are entitled tounworked holiday pay
RULING:
NO (for regular holidays) YES (for special holidays)
(a) petitioner is exempted from paying hourly paid faculty members their
pay for regular holidays, whether the same be during the regular semesters of
the school year or during semestral, Christmas, or Holy Week vacations;(b)
petitioner is ordered to pay said faculty members their regular hourly rate on
days declared as special holidays or for some reason classes are called off or
shortened for the hours they are supposed to have taught, whether extensions
of class days be ordered or not; in case of extensions said faculty members
shall likewise be paid their hourly rates should they teach during said
extensions.
RATIO:
The Court held that the aforementioned implementing rule is not
justified by the provisions of the law which after all is silent with respect
to faculty members paid by the hour who because of their teaching
contracts are obliged to work and consent to be paid only for work
actually done.- On the other hand, both the law and the Implementing
Rules governing holiday pay are silent as to payment on Special Public
Holidays.1. It is readily apparent that the declared purpose of the holiday
pay which is the prevention of diminution of the monthly income of the
employees on account of work interruptions is defeated when a regular
class day is cancelled on account of a special public holiday and class
hours are held on another working day to make up for time lost in the
school calendar.
64. Samahang Manggagawa sa Bandolino vs. NLRC, 275 SCRA 633

FACTS:
This is a petition for certiorari to set aside the decision of the National
Labor Relations Commission (NLRC), dated May 31, 1995, which reversed the
decision of the labor arbiter, dated July 22, 1992, finding petitioners to have
been illegally dismissed and consequently ordering their reinstatement and
the payment to them of their monetary claims.
On August 22, 1990, they filed a complaint for illegal dismissal, unfair
labor practice, underpayment, overtime pay, and holiday pay. At the initial
conference, the labor arbiter issued a return to work order to the private
respondents based on the private respondents claim that they had not
dismissed petitioners. But petitioners were not allowed to work by private
respondents.
On July 22, 1992, the Labor Arbiter, Potenciao S. Caizares, Jr., concluded
that private respondents were guilty of unfair labor practice for having
restrained the petitioners exercise of the right to self-organization. Thus,
ordering the respondents to reinstate the complainants in their previous jobs

and to pay them backwages for one (1) year without qualifications or
deductions for earning elsewhere during their illegal dismissal and to pay the
complainants salary differential and legal holiday pay.
Private respondents appealed to the NLRC, and in its decision dated May
31, 1995, the NLRC reversed the labor arbiter. It ruled that except for Jaime
Sibug, petitioners were all piece-rate workers entitled only to 13th month pay
for three years.
ISSUE:
WON the petitioners are entitled to salary differentials, as found by the
labor arbiter, and to 13th-month pay.
RULING:
Petitioners do not dispute the NLRCs finding that, except for Jaime Sibug,
the rest of petitioners are piece-rate workers. Consequently, all petitioners are
entitled to minimum wage and 13th-month pay, but only Jaime Sibug is
entitled to an additional award of holiday pay. All of the petitioners are entitled
to salary differentials, as found by the labor arbiter, and to 13th-month pay, as
ruled by the NLRC. Pursuant to Art. 279 of the Labor Code, as amended by
Republic Act No. 6715, and our ruling in Bustamante v. National Labor
Relations Commission, the petitioners are entitled to full back wages from the
time their compensation was withheld up to the time of their actual
reinstatement or, where reinstatement is no longer possible, to full back
wages up to the time of finality of this decision.
WHEREFORE, in view of the foregoing, the decision of the NLRC dated
May 31, 1995 is set aside and the decision of the labor arbiter dated July 22,
1992 is reinstated, with the modification that only Jaime Sibug should be given
holiday pay, while all petitioners should be given 13th-month pay and full back
wages.
65. Osias Academy vs. DOLE, 191 SCRA 612

FACTS:
The award by the respondent Minister of Labor 1 of separation pay, on
grounds of equity, to two employees 2 of petitioner Osias Academy despite the
avowedly correct grant of clearance to it to terminate the services of said
employees on the ground of loss of confidence based on a satisfactory
showing of embezzlement of company funds, serious misconduct, etc., is
challenged in the special civil action of certiorari at bar.
ISSUE:
WON the grant of separation pay by respondent Minister of Labor is
justified.
RULING:
The grant was unjustifiable. We hold that henceforth separation pay

shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character. Where the reason for the valid
dismissal is, for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker, the employer
may not be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the ground of
social justice.
A contrary rule would, as the petitioner correctly argues, have the effect
of rewarding rather than punishing the erring employee for his offense. And we
do not agree that the punishment is his dismissal only and that the separation
pay has nothing to do with the wrong he has committed. Of course it has.
Indeed, if the employee who steals from the company is granted separation
pay even as he is validly dismissed, it is not unlikely that he will commit a
similar offense in his next employment because he thinks he can expect a
little leniency if he is again found out.
Those who invoke social justice may do so only if their hands are clean
and their motives blameless and not simply because they happen to be poor.
This great policy of our Constitution is not meant for the protection of those
who have proved they are not worthy of it, like the workers who have tainted
the cause of labor with the blemishes of their own character.
In light of the foregoing propositions, it is evident that the grant of
separation pay to the private respondents is unjustified, they having been
dismissed for causes reflecting on their moral character.
WHEREFORE, the order of respondent Minister of Labor dated January
16, 1987, upholding the grant by the Regional Director to petitioner Academy
of clearance to terminate the services of the respondent spouses, is AFFIRMED
except for the grant of separation pay to the latter which is hereby
DISALLOWED.
66. Dentech Manufacturing Corp. vs. NLRC, 172 SCRA 588

FACTS:
On June 26, 1985, the private respondents filed a Complaint with the
arbitration branch of the respondent National Labor Relations Commission
(NLRC) against the petitioners for, among others, illegal dismissal and violation
of Presidential Decree No. 851.
Private respondent sought their reinstatement as well as the payment of
their 13th month pay and service incentive leave pay, and separation pay in
the event that they are not reinstated. It is alleged in the Complaint and
Position Paper accompanying the same that they were dismissed from the firm
for pursuing union activities.
The petitioners also argued that the private respondents are not entitled
to a 13th month pay. They maintained that each of the private respondents
receive a total monthly compensation of more that Pl,000.00 and that under
Section 1 of Presidential Decree No. 851, such employees are not entitled to
receive a 13th month pay. The petitioners likewise alleged that the company is
in bad financial shape and that pursuant to Section 3 of the Decree, the firm is
exempted from complying with the provisions of the Decree.
The Labor arbiter rendered decision in favor of the private respondents,
and the same was affirmed by NLRC.
ISSUE:
WON the private respondents are entitled as a matter of right to a 13th
month pay.
RULING:
Presidential Decree No. 851 was signed into law in 1975 by then
President Ferdinand Marcos. Under the original provisions of Section 1 thereof,
all employers are required to pay all their employees receiving a basic salary
of not more than Pl,000.00 a month, regardless of the nature of their
employment, a 13th month pay not later than December 24 of every year.
Under Section 3 of the rules and regulations implementing said Presidential
Decree financially distressed employers, i., e., those currently incurring
substantial losses, are not covered by the Decree. Section 7 thereof requires,
however, that such distressed employers must obtain the prior authorization
of the Secretary of Labor and Employment before they may qualify for such
exemption.
On May 1, 1978, Presidential Decree No. 1364 was signed into law. The
Decree enjoined the Department of Labor and Employment to stop accepting
applications for exemption under, inter alia, Presidential Decree No. 851.
On August 13, 1986, President Corazon C. Aquino issued Memorandum
Order No. 28 which modified Section 1 of Presidential Decree No. 851. The said
issuance eliminated the Pl,000.00 salary ceiling.
From the foregoing, it clearly appears that the petitioners have no basis
to claim that the company is exempted from complying with the pertinent
provisions of the law relating to the payment of 13th month compensation.
The Pl,000.00 salary ceiling provided in Presidential Decree No. 851
pertains to basic salary, not total monthly compensation. The petitioners
admit that the private respondents work only five days a week and that they
each receive a basic daily wage of P40.00 only. A simple computation of the
basic daily wage multiplied by the number of working days in a month results
in an amount of less than Pl,000.00. Thus, there is no basis for the contention
that the company is exempted from the provision of Presidential Decree No.
851 which mandated the payment of 13th month compensation to employees
receiving less than P1,000.00 a month.
WHEREFORE, in view of the foregoing, the instant Petition is hereby
DISMISSED for lack of merit. We make no pronouncement as to costs.
67. Leiden Fernandez vs. NLRC, Jan. 28, 1998

FACTS:
The instant case stemmed from a consolidated complaint against private
respondents Agencia Cebuana-H. Lhuillier and/or Margueritte Lhuillier
(Lhuillier) for illegal dismissal (Rec., pp. 56-58). The Agencia Cebuana is a sole
proprietorship operated by Margueritte Lhuillier.
This is a petition for certiorari under Rule 65 of the Rules of Court
assailing the March 11, 1992 Decision of Respondent National Labor Relations
Commission (NLRC) decision:
WHEREFORE, judgment is hereby rendered in favor of the complainants

and against the respondent. The respondent is hereby ordered: To reinstate
the complainants to their respective position [sic] at the Agencia Cebuana with
full back wages without qualification; if reinstatement is not feasible, for one
reason or another, to pay to the complainants their respective separation pay,
service incentive leave pay with full back wages without qualification
ISSUE:
WON there is a limit to the amount of service incentive leave pay and
back wages that may be awarded to an illegally dismissed employee.
RULING:
The clear policy of the Labor Code is to grant service incentive leave pay
to workers in all establishments, subject to a few exceptions. Section 2, Rule V,
Book III of the Implementing Rules and Regulations provides that [e]very
employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay. Service incentive leave is
a right which accrues to every employee who has served within 12 months,
whether continuous or broken reckoned from the date the employee started
working, including authorized absences and paid regular holidays unless the
working days in the establishment as a matter of practice or policy, or that
provided in the employment contracts, is less than 12 months, in which case
said period shall be considered as one year. It is also commutable to its money
equivalent if not used or exhausted at the end of the year. In other words, an
employee who has served for one year is entitled to it. He may use it as leave
days or he may collect its monetary value. To limit the award to three years, as
the solicitor general recommends, is to unduly restrict such right. The law
indeed does not prohibit its commutation.
The Implementing Rules clearly state that entitlement to benefit
provided under this Rule shall start December 16, 1975, the date the
amendatory provision of the [Labor] Code took effect. Hence, petitioners,
except Lim and Canonigo, should be entitled to service incentive leave pay
from December 16, 1975 up to their actual reinstatement.
WHEREFORE, the petition is hereby GRANTED and the assailed Decision
and Resolution are REVERSED and SET ASIDE. The labor arbiters decision is
REINSTATED with MODIFICATIONS, such that the award of separation pay is
deleted and the service incentive leave pay is computed from December 16,
1975 up to petitioners actual reinstatement.
68. Songco vs. NLRC, 183 SCRA 610

FACTS:
This is a petition for certiorari seeking to modify the decision of the
National Labor Relations Commission in NLRC Case No. RB-IV-20840-78-T
entitled, "Jose Songco and Romeo Cipres, Complainants-Appellants, v. F.E.
Zuellig (M), Inc., Respondent-Appellee" and NLRC Case No. RN- IV-20855-78-T
entitled, "Amancio Manuel, Complainant-Appellant, v. F.E. Zuellig (M), Inc.,
Respondent-Appellee," which dismissed the appeal of petitioners herein and in

effect affirmed the decision of the Labor Arbiter ordering private respondent to
pay petitioners separation pay equivalent to their one month salary (exclusive
of commissions, allowances, etc.) for every year of service.
Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as
Zuellig) filed with the Department of Labor (Regional Office No. 4) an
application seeking clearance to terminate the services of petitioners Jose
Songco, Romeo Cipres, and Amancio Manuel (hereinafter referred to as
petitioners) allegedly on the ground of retrenchment due to financial losses.
This application was seasonably opposed by petitioners alleging that the
company is not suffering from any losses. They alleged further that they are
being dismissed because of their membership in the union. At the last hearing
of the case, however, petitioners manifested that they are no longer
contesting their dismissal. The parties then agreed that the sole issue to be
resolved is the basis of the separation pay due to petitioners. Petitioners, who
were in the sales force of Zuellig received monthly salaries of at least P40,000.
In addition, they received commissions for every sale they made.
ISSUE:
WON earned sales commissions and allowances should be included in
the monthly salary of petitioners for the purpose of computation of their
separation pay.
RULING:
It could be deduced that wage is used in its generic sense and obviously
refers to the basic wage rate to be ascertained on a time, task, piece or
commission basis or other method of calculating the same. It does not,
however, mean that commission, allowances or analogous income necessarily
forms part of the employee's salary because to do so would lead to anomalies
(sic), if not absurd, construction of the word "salary." For what will prevent the
employee from insisting that emergency living allowance, 13th month pay,
overtime, and premium pay, and other fringe benefits should be added to the
computation of their separation pay. This situation, to our mind, is not the real
intent of the Code and its rules.
We rule otherwise. The ambiguity between Article 97(f), which defines
the term 'wage' and Article XIV of the Collective Bargaining Agreement, Article
284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules,
which mention the terms "pay" and "salary", is more apparent than real.
Broadly, the word "salary" means a recompense or consideration made to a
person for his pains or industry in another man's business. Whether it be
derived from "salarium," or more fancifully from "sal," the pay of the Roman
soldier, it carries with it the fundamental idea of compensation for services
rendered. Indeed, there is eminent authority for holding that the words
"wages" and "salary" are in essence synonymous (Words and Phrases, Vol. 38
Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89
App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the Latin
word "salarium," is often used interchangeably with "wage", the etymology of
which is the Middle English word "wagen". Both words generally refer to one
and the same meaning, that is, a reward or recompense for services
performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black's
Law Dictionary, 5th Ed.). Inasmuch as the words "wages", "pay" and "salary"
have the same meaning, and commission is included in the definition of
"wage", the logical conclusion, therefore, is, in the computation of the
separation pay of petitioners, their salary base should include also their
earned sales commissions. ACCORDINGLY, the petition is hereby GRANTED.
69. Santos vs. NLRC, 154 SCRA 166

FACTS:
The present petition for certiorari is directed at: (1) the decision of the
National Labor Relations Commission (NLRC) dated 29 August 1985 in NLRC
Case No. RB-IV-20056-78-T, entitled "Lydia Santos, complainant-appellee,
versus Security Bank and Trust Company, respondent-appellant;" and (2) the
Resolution issued by the NLRC on 7 November 1986 denying petitioner Lydia
Santos's Motion for Reconsideration of the mentioned Decision.
On 10 January 1978, petitioner filed a complaint for illegal dismissal. On
16 October 1978, Labor Arbiter Bienvenido S. Fernandez rendered a decision
finding petitioner's dismissal to be illegal and ordering private respondent
Bank to reinstate her with backwages and other accrued benefits. The
dispositive portion of the Labor Arbiter's decision reads as follows:
IN VIEW OF ALL THE FOREGOING, respondent is ordered to immediately
reinstate complainant to her position as Branch Manager without loss of rights
and with backwages from May 1976 at P2,650.00 per month, plus other
accrued benefits.
Private respondent appealed to NLRC in which, NLRC modified the
decision rendered by the labor arbiter on the matters of the orders for the
reinstatement of the complainant with full backwages of petitioner.
ISSUE:
WON petitioner is entitled to an award for backwages, in addition to: (1)
her separation pay,-and (2) gratuities accruing before the Labor Arbiter's order
for reinstatement was modified.
RULING:
It was grievous error amounting to grave abuse of discretion on the part
of the NLRC to have considered an award of separation pay as equivalent to
the aggregate relief constituted by reinstatement plus payment of backwages
under Article 280 of the Labor Code. The grant of separation pay was a proper
substitute only for reinstatement; it could not be an adequate substitute both
for reinstatement and for backwages. In effect, the NLRC in its assailed
decision failed to give to petitioner the full relief to which she was entitled
under the statute.
We conclude that petitioner Lydia Santos is entitled to receive, and
private respondent Bank is obligated to pay, (1) the benefits which had
accrued in petitioner's favor during the period from her illegal dismissal and
until reinstatement was declared non-available; (2) separation pay equivalent
to one-half (1/2) month's pay for every year of service, in lieu of
reinstatement; and (3) backwages for three (3) years without qualification and
deduction.
WHEREFORE, the petition for certiorari is granted. The private
respondent Bank is ordered to pay petitioner the amount of P223,685.50,
which represents the totality of the accrued benefits petitioner is entitled to as
a result of her illegal dismissal. The decision of public respondent NLRC dated
29 August 1985 in NLRC Case No. RB-IV-20056-78-T is hereby modified
accordingly. This decision is immediately executory.
70. Consunji vs. K'ucan, 159 SCRA 107

FACTS:
On Nov. 2, 1990, Jose Juego, a construction worker of D.M. Consunji, Inc.,
fell 14 floors from the Renaissance Tower, Pasig City to his death. On May 9,
1991, Jose Juegos widow, filed in the RTC of Pasig a complaint for damages
against the deceaseds employer, D.M. Consunji, Inc. The employer raised,
among other defenses, the widows prior availment of the benefits from the
State Insurance Fund. The RTC rendered a decision in favor of the widow Maria
Juego, ordering the defendant to pay plaintiff. On appeal by D.M. Consunji, the
CA affirmed the decision of the RTC in toto. Hence, this petition.
ISSUE:
WON the petitioner (Consunji) is negligent and should be liable.
RULING:
The decision of the CA is affirmed.
Ratio:
The claims for damages sustained by workers in the course of their
employment could be filed only under the Workmens Compensation
Law, to the exclusion of all further claims under other laws. The CA held
that the case at bar came under exception because private respondent
was unaware of petitioners negligence when she filed her claim for
death benefits from the State Insurance Fund.
71. State Marine Corp. vs. Cebu Seamen's Asso. 7 SCRA 294
FACTS:
The Union (CEBU SEAMEN'S ASSOCIATION, INC) alleged that the officers
and men working on board the petitioners' vessels have not been paid their
sick leave, vacation leave and overtime pay; that the petitioners threatened or
coerced them to accept a reduction of salaries, observed by other shipowners;
that after the Minimum Wage Law had taken effect, the petitioners required
their employees on board their vessels, to pay the sum of P.40 for every meal,
while the masters and officers were not required to pay their meals and that
because Captain Carlos Asensi had refused to yield to the general reduction of
salaries, the petitioners dismissed said captain who now claims for
reinstatement and the payment of back wages from December 25, 1952, at
the rate of P540.00, monthly. The petitioners' shipping companies, answering,
averred that there is no law which provides for the payment of sick leave or
vacation leave to employees or workers of private firms, and that in enacting
Rep. Act No. 602 (Minimum Wage Law), the Congress had in mind that the
amount of P.40 per meal, furnished the employees should be deducted from
the daily wages. A decision was rendered on February 21, 1957 in favor of the
respondent union. The motion for reconsideration thereof, having been denied,
the companies filed the present writ of certiorari, to resolve legal question
involved.
ISSUES:
1) WON there is a conflict between Section 3, par. F and SEC. 19 of the
Minimum Wage Law, (R.A. No. 602).
2) WON the CIR erred in declaring that the deduction for costs of meals
from the wages or salaries after August 4, 1951, is illegal and same should be
reimbursed to the employee concerned, in spite of said section 3, par. (f) of
Act No. 602.
RULING:
Section 3, par. f, of the Minimum Wage Law, (R.A. No. 602), provides as
follows
(f) xxx the furnishing of meals shall be valued at not more than thirty
centavos per meal for agricultural employees and not more than forty
centavos for any other employees covered by this Act, and the furnishing of
housing shall be valued at not more than twenty centavos daily for agricultural
workers and not more than forty centavos daily for other employees covered
by this Act.
However, section 19, same law, states:
SEC. 19. Relations to other labor laws and practices.
Nothing in this Act shall deprive an employee of the right to seek fair
wages, shorter working hours and better working conditions nor justify an
employer in violating any other labor law applicable to his employees, in
reducing the wage now paid to any of his employees in excess of the minimum
wage established under this Act, or in reducing supplements furnished on the
date of enactment.
It is evident that Section 3(f) constitutes the general rule, while section
19 is the exception. In other words, if there are no supplements given, within
the meaning and contemplation of section 19, but merely facilities, section 3(f)
governs. There is no conflict; the two provisions could, as they should be
harmonized. And even if there is such a conflict, the respondent CIR should
resolve the same in favor of the safety and decent living laborers (Art. 1702,
new Civil Code).. 2) The benefit or privilege given to the employee which
constitutes an extra remuneration above and over his basic or ordinary
earning or wage, is supplement; and when said benefit or privilege is part of
the laborers' basic wages, it is a facility. The criterion is not so much with the
kind of the benefit or item (food, lodging, bonus or sick leave) given, but its
purpose. Considering, therefore, as definitely found by the respondent court
that the meals were freely given to crew members prior to August 4, 1951,
while they were on the high seas "not as part of their wages but as a
necessary matter in the maintenance of the health and efficiency of the crew
personnel during the voyage", the deductions therein made for the meals
given after August 4, 1951, should be returned to them, and the operator of
the coastwise vessels affected should continue giving the same benefit.
72. Mabeza vs. NLRC, 271 SCRA 670

FACTS:
Norma Mabeza was an employee hired by Hotel Supreme in Baguio City.
In 1991, an inspection was made by the Department of Labor and Employment
(DOLE) at Hotel Supreme and the DOLE inspectors discovered several
violations by the hotel management. Immediately, the owner of the hotel,
Peter Ng, directed his employees to execute an affidavit which would purport
that they have no complaints whatsoever against Hotel Supreme. Mabeza
signed the affidavit but she refused to certify it with the prosecutors office.
Later, when she reported to work, she was not allowed to take her shift. She
then asked for a leave but was not granted yet shes not being allowed to
work. In May 1991, she then sued Peter Ng for illegal dismissal. Peter Ng, in his
defense, said that Mabeza abandoned her work. In July 1991, Peter Ng also
filed a criminal complaint against Mabeza as he alleged that she had stolen a
blanket and some other stuff from the hotel. Peter Ng went on to amend his
reply in the labor case to make it appear that the reason why he dismissed
Mabeza was because of his loss of confidence by reason of the theft allegedly
committed by Mabeza. The labor arbiter who handled the case, a certain
Felipe Pati, ruled in favor of Peter Ng.
ISSUE:
1.) Whether or not there is abandonment in the case at bar
2.) Whether or not loss of confidence as ground for dismissal applies in the
case at bar
RULING:
No. The side of Peter Ng is bereft of merit so is the decision of the Labor
Arbiter which was unfortunately affirmed by the NLRC.
Abandonment is not present. Mabeza returned several times to inquire
about the status of her work or her employment status. She even asked for a
leave but was not granted. Her asking for leave is a clear indication that she
has no intention to abandon her work with the hotel. Even the employer knows
that his purported reason of dismissing her due to abandonment will not fly so
he amended his reply to indicate that it is actually loss of confidence that led
to Mabezas dismissal.
It is true that loss of confidence is a valid ground to dismiss an
employee. But this is ideally only applied to workers whose positions require a
certain level or degree of trust particularly those who are members of the
managerial staff. Evidently, an ordinary chambermaid who has to sign out for
linen and other hotel property from the property custodian each day and who
has to account for each and every towel or bedsheet utilized by the hotels
guests at the end of her shift would not fall under any of these two classes of
employees for which loss of confidence, if ably supported by evidence, would
normally apply. Further, the suspicious filing by Peter Ng of a criminal case
against Mabeza long after she initiated her labor complaint against him hardly
warrants serious consideration of loss of confidence as a ground of Mabezas
dismissal.
73. PNB vs. Andrada Electric and Engineering Co., April 17, 2002
FACTS:
Respondent is a partnership duly organized, existing, and operating
under the laws of the Philippines is a semi-government corporation duly
organized, existing and operating under the laws of the Philippines; whereas,
NASUDECO is also a semi-government corporation and the sugar arm of the
PNB; and the defendant Pampanga Sugar Mills (PASUMIL), is a corporation
organized, existing and operating under the 1975 laws of the Philippines. The
plaintiff is engaged in the business of general construction for the repairs
and/or construction of different kinds of machineries and buildings. On August
26, 1975, PNB acquired the assets of the defendant PASUMIL that were earlier
foreclosed by the DBP. PNB organized the defendant NASUDECO in September,
1975, to take ownership and possession of the assets and ultimately to
nationalize and consolidate its interest in other PNB controlled sugar mills.
Prior to October 29, 1971, the defendant PASUMIL engaged the services of
defendant for electrical rewinding and repair, most of which were partially paid
by the defendant PASUMIL, leaving several unpaid accounts with the plaintiff.
On October 29, 1971, the plaintiff and the defendant PASUMIL entered into a
construction contract. The defendant PASUMIL and the defendant PNB, and
now the defendant NASUDECO, failed and refused to pay the plaintiff their
just, valid and demandable obligation based on the contract. Defendant
prayed that judgment be rendered against the defendants PNB, NASUDECO,
and PASUMIL.
ISSUE:
Whether or not the Veil of Corporate Fiction should be pierced in this
case
RULING:
NO. The absence of the elements in the present case precludes the
piercing of the corporate veil. First, other than the fact that petitioners
acquired the assets of PASUMIL, there is no showing that their control over it
warrants the disregard of corporate personalities. Second, there is no evidence
that their juridical personality was used to commit a fraud or to do a wrong; or
that the separate corporate entity was farcically used as a mere alter ego,
business conduit or instrumentality of another entity or person. Third,
respondent was not defrauded or injured when petitioners acquired the assets
of PASUMIL. Being the party that asked for the piercing of the corporate veil,
respondent had the burden of presenting clear and convincing evidence to
justify the setting aside of the separate corporate personality rule. However, it
utterly failed to discharge this burden; it failed to establish by competent
evidence that petitioners separate corporate veil had been used to conceal
fraud, illegality or inequity.
74. A. C. Ransom Labor Union vs. Ople, 150 SCRA 49

FACTS:
On June 6, 1961, employees of AC Ransom, most being members of the
AC Ransom Labor Union, went on strike. The said strike was lifted on June 21
with most of the strikers being allowed to resume their work. However, twenty
two strikers were refused reinstatement. During 1969, the Hernandez family
(owners of AC RANSOM) organized another corporation under the name of
Rosario Industrial Corporation. The said company dealt in the same type of
business as AC Ransom. The issue of back wages was brought before the
Court of Industrial Relations which rendered a decision on December 19, 1972
ordering the twenty two strikers to be reinstated with back wages. On April 2,
1973,
RANSOM filed an application for clearance to close or cease operations. The
same was granted by the Ministry of Labor and Employment. Although it has
stopped operations, RANSOM has continued its personality as a corporation.
For practical purposes, reinstatement of the 22 strikers has been precluded. As
a matter of fact, reinstatement is not an issue in this case. A motion of
execution was filed by the Union against AC Ransom but the former was
unable to collect due to the inability to find leviable assets of the company.
The Union subsequently asked the officers of Ransom to be personally liable
for payment of the back wages. The motion was granted by the Labor Arbiter
but was subsequently reversed bythe NLRC.
ISSUE:
Whether or not the officers of the corporation should be held personally
liable to pay for the back wages
RULING:
YES. Under Article 212 (c) of the Labor Code, Employee includes any
person acting in the interest of an employer, directly or indirectly. Since
Ransom is an artificial person, it must have an officer who can be presumed to
be the employer, being the person acting in the interest of the employer
(Ransom).In PD 525, where a corporation fails to pay the emergency
allowance therein provided, the prescribed penaltyshall be imposed upon the
guilty officer or officers of the corporation. In the instant case, RANSOM, in
foreseeing the possibility or probability of payment of back wages to the 22
strikers, organized ROSARIO to replace RANSOM, with the latter to be
eventually phased out if the 22 strikers win their case. The record does not
clearly identify the officer or officers of RANSOM directly responsible for
failure to pay the back wages of the 22 strikers. In the absence of definite
proof in that regard, it should be presumed that the responsible officer is the
President of the corporation who can be deemed the chief operation officer
thereof.
It is very obvious that the second corporation seeks the protective shield
of a corporate fiction whose veil in the present case could, and should, be
pierced as it was deliberately and maliciously designed to evade its financial
obligation to its employees.... When a notion of legal entity is used to defeat
public convenience, justify wrong, protect fraud, or defend crime, the law will
regard the corporation as an association or persons, or, in the case of two
corporations, will merge them into one.
75. Pabalan and Lagdameo vs. NLRC

FACTS:
Eighty-four (84) workers of the PIF filed a complaint against the latter for
illegal transfer simultaneous with illegal dismissal without justifiable cause and
in violation of the provision of the Labor Code on security of tenure as well as
the provisions of Batas Pambansa Blg. 130. Complainants demanded
reinstatement with full backwages, living allowance, 13th month pay and other
benefits under existing laws and/or separation pay. The LA ruled in its favor.
The NLRC affirmed the appealed decision. Hence, this petition alleging lack of
jurisdiction and grave abuse of jurisdiction in adjudging herein petitioners as
jointly and severally liable with the PIF
ISSUE:
(1) Whether the respondents acquired jurisdiction over the petitioners
(2) Whether the officers of the PIF could be held jointly and severally liable
with the corporation for its liability
RULING:
(1) Yes. Record shows that while originally it was PIF which was
impleaded as respondent before the LA, petitioners also appeared in their
behalf through counsel. Thereafter when the supplemental position paper was
filed by complainants, petitioners were impleaded as respondents to which
they filed an opposition inasmuch as they filed their own supplemental
position papers. They were therefore properly served with summons and they
were not deprived of due process.
(2) No. The settled rule is that the corporation is vested by law with a
personality separate and distinct from the persons composing it, including its
officers as well as from that of any other legal entity to which it may be
related. Thus, a company manager acting in good faith within the scope of his
authority in terminating the services of certain employees cannot be held
personally liable for damages. Here, complainants did not allege or show that
petitioners, as officers of the corporation deliberately and maliciously designed
to evade the financial obligation of the corporation to its employees, or used
the transfer of the employees as a means to perpetrate an illegal act or as a
vehicle for the evasion of existing obligations, the circumvention of statutes,
or to confuse the legitimate issues. Hence petitioners cannot be held jointly
and severally liable with the PIF Corporation.
76. Carmelcraft Corp. vs. NLRC, 186 SCRA 393

FACTS:
After its registration as a labor union, the Camelcraft Employees Union
sought but did not get recognition from its employer, the petitioner.
Consequently, it filed a petition for certification election in June 1987. On July
13, 1987, Camelcraft Corporation, through its president and general manager,
Carmen Yulo, announced in a meeting with the employees that it would cease
operations on August 13, 1987, due to serious financial losses. Operations did
cease as announced. On August 17, 1987, the union filed a complaint with the
DOLE against the petitioners for illegal lockout, unfair labor practice and
damages, followed the next day with another complaint for payment of unpaid
wages, emergency cost of living allowances, holiday pay, and other benefits.
On November 29, 1988, the Labor Arbiter declared the shutdown illegal and
violative of the employees' right to self-organization. The claim for unpaid
benefits was also granted.
ISSUE:
Whether or not the cessation of operations of Carmelcraft Corporation is
justified
RULING:
The reason invoked by the petitioner company to justify the cessation of its
operations is hardly credible and could not be considered serious enough to
call for the closure of the company. The real reason for the decision of the
petitioners to cease operations was the establishment of respondent
Carmelcraft Employees Union. It was apparently unwelcome to the
corporation, which would rather shut down than deal with the union.
The act of the petitioners was an unfair labor practice prohibited by Article 248
of the Labor Code, to wit:
ART. 248. Unfair labor practices of employers.-It shall be unlawful for an
employer to commit any of the following unfair labor practice:
(a)
To interfere with, restrain or coerce employees in the exercise of their
right to self-organization;
It was a defiance of the constitutional provision guaranteeing to workers the
right to self-organization and to enter into collective bargaining with
management through the labor union of their own choice and confidence. In
this situation, the employees are entitled to separation pay at the rate of onehalf month for every year of service under Art. 283 of the Labor Code.
77. Gudez vs. NLRC, 183 SCRA 644

FACTS:
Petitioners were formerly employed by respondent Retired Army
Protective and Security Agency Inc. (RAPSA for brevity) as executive director,
security guards and supervisors. Respondent RAPSA is a corporation engaged
in providing security services. It has for its president and treasurer, respondent
Herminia A. Crisologo.
In a letter dated July 3, 1986, Col. Ricardo A. Carranceja of the Philippine
Constabulary, Supervisory Unit for Security and Investigation Agencies
(PCSUSIA for brevity) ordered RAPSA to cease operations and to turn over their
firearms to the Firearms and Explosive Unit of the Philippine Constabulary.
However, in another letter dated July 18, 1986, the PCSUSIA allowed RAPSA to
continue its operations up to August 15, 1986 for the winding up of its affairs.
Hence on the aforesaid date, RAPSA ceased its operations and terminated the
employment of petitioners.
In view of the closing of RAPSA, the latter's clients obtained the security
services of another agency named Emilio Salting Alviar Protective and Security
Agency (ESAPSA fr brevity). Petitioners filed their separate complaints with
the Labor Arbiter against RAPSA, Herminia Crisologo, for separation pay,
recovery of lost tool deposit, allowances and other monetary claims. The Labor
Arbiter rendered its decision in favor of the petitioners.
RULING:
Whether or not respondent Crisologo may be held solidarity liable with
respondent corporation for separation pay and other monetary claims due to
petitioners
RULING:
On the basis of the legal definition of employer provided for in Article
212 par. c of the Labor Code, not only is the juridical entity held liable for the
money claims due to its employees but also the responsible natural person or
persons acting in the interest of such juridical entity; and that respondent
Crisologo, being the president of respondent RAPSA should therefore be held
jointly and severally liable with the corporation for such labor claims. The term
employer includes any person acting in the interest of an employer, directly
or indirectly.
There is no dispute herein that respondent Crisologo is in fact the
president of respondent corporation, RAPSA. Neither is there any doubt that
respondent RAPSA had closed its business upon the order of the Philippine
Constabulary and that as a consequence thereof the services of petitioner
employees were terminated without awarding them separation pay as required
under the Labor Code. It is significant to note that the respondent corporation
had ceased to exist when the Labor Arbiter rendered its decision holding
respondent Crisologo jointly and severally liable with respondent corporation
for the money claims of its employees. Moreover, records show that on
September 25, 1987, which is the same day when the Labor Arbiter's decision
was promulgated, RAPSA filed a petition for voluntary insolvency with the
Regional Trial Court of Makati. The foregoing circumstances make it more
necessary to hold respondent Crisologo liable for the claims due to petitioners;
otherwise, any decision that would be rendered in favor of the latter would be
useless and ineffective for there would be no one against whom it can be
enforced. Thus, where the employer corporation is no longer existing and
unable to satisfy the judgment in favor of the employee, the officer should be
held liable for acting on behalf of the corporation
78. Neri vs. NLRC et. al., 224 SCRA 717

FACTS:
Respondents are sued by two employees of Building Care Corporation,
which provides janitorial and other specific services to various firms, to compel
Far Bast Bank and Trust Company to recognize them as its regular employees
and be paid the same wages which its employeesreceive. Building Care
Corporation (BCC, for brevity), in the proceedings below, established that it
had substantial capitalization of P1 Million or a stockholders equity of P1.5
Million. Thus the Labor Arbiter ruled that BCC was only job contracting and
that consequently its employees were not employees of Far East Bank and
Trust Company (FEBTC, for brevity). on appeal, this factual finding was
affirmed by respondent National Labor Relations Commission (NLRC, for
brevity). Nevertheless, petitioners insist before us that BCC is engaged in
"labor-only" contracting hence, they conclude, they are employees of
respondent FEBTC .On 28 June 1989, petitioners instituted complaints against
FEBTC and BCC before Regional Arbitration Branch No. 10 of the Department
of Labor and Employment to compel the bank to accept them as regular
employees and for it to pay the differential between the wages being paid
them by BCC and those received by FEBTC employees with similar length of
service.
ISSUE:
Whether or not BCC is only a job contracting company, hence petitioners
are not regular employees of FEBTC.
RULING:
We cannot sustain the petition. Respondent BCC need not prove that it
made investments in the form of tools, equipment, machineries, work
premises, among others, because it has established that it has sufficient
capitalization. The Labor Arbiter and the NLRC both determined that BCC had a
capital stock of P1 million fully subscribed and paid for. BCC is therefore a
highly capitalized venture and cannot be deemed engaged in "labor-only"
contracting. It is well-settled that there is "labor-only" contracting where:
(a) the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others; and
(b) the workers recruited and placed by such person are performing
activities which are directly related to the principal business of the
employer. Article 106 of the Labor Code defines "labor-only" contracting
thus Art. 106.Contractor or subcontractor
. . . . There is "labor-only" contracting where the person supplying
workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machineries, work premises, among others, and the
workers recruited by such persons are performing activities which are directly
related to the principal business of such employer . . . . (emphasis
supplied).Based on the foregoing, BCC cannot be considered a "labor-only"
contractor because it has substantial capital. While there may be no evidence
that it has investment in the form of tools, equipment, machineries, work

premises, among others, it is enough that it has substantial capital, as was
established before the Labor Arbiter as well as the NLRC. In other words, the
law does not require both substantial capital and investment in the form of
tools, equipment, machineries, etc. This is clear from the use of the
conjunction "or". If the intention was to require the contractor to prove that he
has both capital and the requisite investment, then the conjunction "and"
should have been used. But, having established that it has substantial capital,
it was no longer necessary for BCC to further adduce evidence to prove that it
does not fall within the purview of "labor-only" contracting. There is even no
need for it to refute petitioners' contention that the activities they perform are
directly related to the principal business of respondent bank. Even assuming
ex argumenti that petitioners were performing activities directly related to the
principal business of the bank, under the "right of control" test they must still
be considered employees of BCC. In the case of petitioner Neri, it is admitted
that FEBTC issued a job description which detailed her functions as a
radio/telex operator. However, a cursory reading of the job description shows
that what was soughtto be controlled by FEBTC was actually the end-result of
the task, e.g., that the daily incoming and outgoing telegraphic transfer of
funds received and relayed by her, respectively, tallies with that of the
register. The guidelines were laid down merely to ensure that the desired endresult was achieved. It did not, however, tell Neri how the radio/telex machine
should be operated. More importantly, under the terms and conditions of the
contract, it was BCC alone which had the power to reassign petitioners. Their
deployment to FEBTC was not subject to the bank's acceptance. Cabelin was
promoted to messenger because the FEBTC branch manager promised BCC
that two (2) additional janitors would be hired from the company if the
promotion was to be effected. Furthermore, BCC was to be paid in lump sum
unlike in the situation in Philippine Bank of Communications where the
contractor, CESI, was to be paid at a daily rate on a per person basis. And, the
contract therein stipulated that the CESI was merely to provide manpower that
would render temporary services. In the case at bar, Neri and Cabelin were to
perform specific special services. Consequently, petitioners cannot be held to
be employees of FEBTC as BCC "carries an independent business" and
undertaken the performance of its contract with various clients according to its
"own manner and method, free from the control and supervision" of its
principals in all matters "except as to the results thereof. The Petition for
Certiorari is dismissed.
79. Phil. Bank of Communications vs. NLRC, 146 SCRA 347

FACTS:
Petitioner Philippine Bank of Communications and the Corporate
Executive Search Inc. (CESI) entered into a letter agreement dated January
1976 under which CESI undertook to provide "Tempo[rary] Services" to
petitioner consisting of the "temporary services" of eleven (11)messengers.
The contract period is described as being "from January 1976 ---- ." The
petitioner in truth undertook to pay a "daily service rate of P18," on a per
person basis.
Ricardo Orpiada was thus assigned to work with the petitioner bank. As
such, he rendered services to the bank, within the premises of the bank and
alongside other people also rendering services to the bank. There was some
question as to when Ricardo Orpiada commenced rendering services to the
bank. As noted above, the letter agreement was dated January 1976.
However, the position paper submitted by CESI to the National Labor Relations
Commission stated that CESI hired Ricardo Orpiada on 25 June 1975 as a
Tempo Service employee, and assigned him to work with the petitioner bank
"as evidenced by the appointment memo issued to him on 25 June 1975-." Be
that as it may, on or about October1976, the petitioner requested CESI to
withdraw Orpiada's assignment because, in the allegation of the bank,
Orpiada's services "were no longer needed.
On 29 October 1976, Orpiada instituted a complaint in the Department
of Labor (now Ministry of Labor and Employment) against the petitioner for
illegal dismissal and failure to pay the 13th month pay provided for in
Presidential Decree No. 851. This complaint was docketed as Case No.RO4-1010184-76-E. After investigation, the Office of the Regional Director, Regional
Office No. IV of the Department of Labor, issued an order dismissing Orpiada's
complaint for failure of Mr. Orpiada to show the existence of an employeremployee relationship between the bank and himself.
Accordingly, on 2 April 1984, the bank filed the present petition for
certiorari with this Court seeking to annul and set aside (a) the decision of
respondent Labor Arbiter Dogelio dated 12 September 1977 in Labor Case No.
RB-IV-1118-77 and (b) the decision of the NLRC promulgated on29 December
1983 affirming with some modifications the decision of the Labor Arbiter. This
Court granted a temporary restraining order on 11April 1984.
ISSUE:
Whether or not the relationship is one of employer and
(independent) contractor or one of employer and "labor-only" contractor.
job
RULING:
There is "labor-only" contracting where the person supplying workers to
an employer does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are
directly related to the principal business of such employer. In such cases, the
person or intermediary shall be considered merely as an agent of the
employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
Under the general rule set out in the first and second paragraphs of
Article 106, an employer who enters into a contract with a contractor for the
performance of work for the employer, does not thereby create an employeremployee relationship between himself and the employees of the contractor.
Thus, the employees of the contractor remain the contractor's employees and
his alone. Nonetheless, when a contractor fails to pay the wages of his
employees in accordance with the Labor Code, the employer who contracted
out the job to the contractor becomes jointly and severally liable with his
contractor to the employees of the latter "to the extent of the work performed
under the contract" as if such employer were the employer of the contractor's
employees. The law itself, in other words, establishes an employer-employee
relationship between the employer and the job contractor's employees for a
limited purpose, i.e., in order to ensure that the latter get paid the wages due
to them.
A similar situation obtains where there is "labor only" contracting. The
"labor-only" contractor ---- i.e. "the person or intermediary" ---- is considered
"merely as an agent of the employer." The employer is made by the statute
responsible to the employees of the "labor only" contractor as if such
employees had been directly employed by the employer. Thus, where "labor
only" contracting exists in a given case, the statute itself implies or establishes
an employer-employee relationship between the employer (the owner of the
project) and the employees of the "labor only" contractor, this time for a
comprehensive purpose: "employer for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code." The law in effect
holds both the employer and the "labor-only" contractor responsible to the
latter's employees for the more effective safeguarding of the employees'
rights under the Labor Code.
The definition of "labor-only" contracting in Rule VIII, Book III of the
Implementing Rules must be read in conjunction with the definition of job
contracting given in Section 8 of the same Rules. The undertaking given by
CESI in favor of the bank was not the performance of a specific job ---- for
instance, the carriage and delivery of documents and parcels to the addresses
thereof. There appear to be many companies today which perform this
discrete service, companies with their own personnel who pick up documents
and packages from the offices of a client or customer, and who deliver such
materials utilizing their own delivery vans or motorcycles to the addresses. In
the present case, the undertaking of CESI was to provide its client ---- the bank
---- with a certain number of persons able to carry out the work of messengers.
Such undertaking of CESI was complied with when the requisite number of
persons were assigned or seconded to the petitioner bank. Orpiada utilized the
premises and office equipment of the bank and not those of CESI.
Messengerial work ---- the delivery of documents to designated persons
whether withi nor without the bank premises ---- is of course directly related to
the day-to-day operations of the bank. Section 9(2) quoted above does not
require for its applicability that the petitioner must be engaged in the delivery
of items as a distinct and separate line of business.
Succinctly put, CESI is not a parcel delivery company: as its name
indicates, it is a recruitment and placement corporation placing bodies, as it
were, in different client companies for longer or shorter periods of time. It is
this factor that, to our mind, distinguishes this case from American President
Lines v. Clave et al., 114 SCRA 826 (1982) if indeed such distinguishing way is
needed. We hold that, in the circumstances of this case, CESI was engaged in
"labor-only" contracting vis-a-vis the petitioner bank and in respect of Ricardo
Orpiada, and that consequently, the petitioner bank is liable to Orpiada as if
Orpiada had been directly employed not only by CESI but also by the bank. It
may well be that the bank may in turn proceed against CESI to obtain
reimbursement of, or some contribution to, the amount which the bank will
have to pay to Orpiada; but this it is not necessary to determine here. The
petition for certiorari is denied and the decision promulgated on 29 December
1983 of the National Labor Relations Commission is affirmed.
80. Guarin, et. al., vs. NLRC & Lipercon Services, 178 SCRA 267
FACTS:
Novelty Philippines, Inc. is a domestic corporation that is engaged in the
garment manufacturing business. Lipercon Services, Inc. is also a domestic
corporation which is engaged in business as a service contractor providing
workers for other companies. A Contract of service was entered into by
Lipercon as the contractor and Novelty as the company. Petitioners were hired
by Lipercon and assigned to Novelty as helpers, janitors, janitresses, firemen,
and mechanics under the above agreement. Petitioners worked for Novelty for
some three years. On December 31, 1986, Novelty terminated its agreement
with Lipercon, resulting in the dismissal of the petitioners.
On January 9, 1987, petitioners filed a complaint for illegal dismissal
against both Lipercon and Novelty (Case No. NLRC-NCR-1-107-87). Lipercon
did not answer. In a decision dated June 29, 1987, the Labor Arbiter ruled that
the petitioners were regular employees of Novelty and declared their dismissal
illegal. Both employers appealed. The appealed decision was set aside and
another judgement was entered ordering Lipercon Service to reinstate the
complainants their former position.
ISSUE:
WON the petition for certiorari as found by the NLRC, respondent
Lipercon Sevices Inc. is an independent contractor and that petitioners are its
employees.
RULING:
NO. It is clear from the foregoing definitions that under the "Contract of
Services" between Lipercon and Novelty, Lipercon was a "labor-only"
contractor, hence, only an agent of Novelty to procure workers for the latter,
the real employer.
The NLRC's finding that Lipercon was not a mere labor-only contractor
because it has substantial capital or investment in the form of tools,
equipment, machineries, work premises, is based on insubstantial evidence,
as the NLRC pointed out, that "it (Lipercon) claims to be possessed among
others, of substantial capital and equipment essential to carry out its business
as a general independent contractor" (p. 25, Rollo).
The law casts the burden on the contractor to prove that he/it has
substantial capital, investment, tools, etc. The petitioners, on the other hand,
need not prove the negative fact that the contractor does not have substantial
capital, investment, and tools to engage in job contracting.
The jobs assigned to the petitioners as mechanics, janitors, gardeners,
firemen and grasscutters were directly related to the business of Novelty as a
garment manufacturer. In the case of Philippine Bank of Communications vs.
NLRC, 146 SCRA 347, we ruled that the work of a messenger is directly related
to a bank's operations. In its Comment, Novelty contends that the services
which are directly related to manufacturing garments are sewing, textile
cutting, designs, dying, quality control, personnel, administration, accounting,
finance, customs, delivery and similar other activities; and that allegedly, "[i]t
is only by stretching the imagination that one may conclude that the services
of janitors, janitresses, firemen, grasscutters, mechanics and helpers are
directly related to the business of manufacturing garments" (p. 78, Rollo). Not
so, for the work of gardeners in maintaining clean and well-kept grounds
around the factory, mechanics to keep the machines functioning properly, and
firemen to look out for fires, are directly related to the daily operations of a
garment factory. That fact is confirmed by Novelty's rehiring the workers or
renewing the contract with Lipercon every year from 1983 to 1986, a period of
three (3) years.
As Lipercon was a "labor-only" contractor, the workers it supplied Novelty
became regular employees of the latter.
WHEREFORE, the decision of the NLRC is set aside and that of the Labor
Arbiter is reinstated. Novelty Philippines, Inc. is ordered to reinstate the
petitioners with backwages for one (1) year without qualification or deduction.
In case reinstatement is no longer feasible, respondent Novelty Philippines,
Inc. is hereby ordered to grant the complainants separation pay equivalent to
one (1) month salary for every year of service, a fraction of six (6) months to
be considered as one (1) whole year, in addition to their backwages. Costs
against respondent Novelty Philippines, Inc.
81. Filsyn vs. NLRC, June 14, 1996

FACTS:
On 4 April 1991 FILSYN, a domestic corporation engaged in the
manufacture of polyester fiber, contracted with De Lima Trading and General
Services (DE LIMA) for the performance of specific janitorial services Pursuant
to the agreement Felipe Loterte, among others, was deployed at FILSYN to
take care of the plants and maintain general cleanliness around the premises.
On 24 February 1992 Loterte sued FILSYN and DE LIMA as alternative

defendants for illegal dismissal, underpayment of wages, non-payment of
legal holiday pay, service incentive leave pay and 13th month pay alleging
that he was first assigned to perform janitorial work at FILSYN in 1981 by the
La Saga General Services; that the La Saga was changed to DE LIMA on August
1991; that when a movement to demand increased wages and 13th month
pay arose among the workers on December 1991 he was accused by a certain
Dodie La Flores of having posted in the bulletin board at FILSYN an article
attributing to management a secret understanding to block the demand; and,
for denying responsibility, his gate pass was unceremoniously cancelled on 6
February 1992 and he was subsequently dismissed.
Loterte was classified by the Labor Arbiter as a regular employee on the
ground that he performed tasks usually necessary or desirable in the main
business of FILSYN for more than ten (10) years or since 1981. FILSYN was
declared to be the real employer of Loterte and DE LIMA as a mere labor
contractor. Hence, FILSYN was adjudged liable for Loterte's reinstatement,
payment of salary differentials and back wages and other benefits. Hence,
this petition for certiorari by FILSYN.
ISSUE:
Whether or not there exists an employer-employee relationship between
FILSYN and private respondent Felipe Loterte.
RULING:
DE LIMA is an independent job contractor, therefore no direct employeremployee relationship exists between petitioner FILSYN and private
respondent Felipe Loterte. The relationship between petitioner Filipinas
Synthetic Fiber Corporation (FILSYN) and private respondent De Lima Trading
and General Services (DE LIMA) is one of job contractorship.
Under the Labor Code, two (2) elements must exist for a finding of laboronly contracting: (a) the person supplying workers to an employer does not
have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and (b) the workers recruited and
placed by such persons are performing activities directly related to the
principal business of such employer.
These two (2) elements do not exist in the instant case. As pointed out
by petitioner, private respondent DE LIMA is a going concern duly registered
with the Securities and Exchange Commission with substantial capitalization of
P1,600,000.00, P400,000.00 of which is actually subscribed. Hence, it cannot
be considered as engaged in labor-only contracting being a highly capitalized
venture. Moreover, while the janitorial services performed by Felipe Loterte
pursuant to the agreement between FILSYN and DE LIMA may be considered
directly related to the principal business of FILSYN which is the manufacture of
polyester fiber, nevertheless, they are not necessary in its operation. On the
contrary, they are merely incidental thereto, as opposed to being integral,
without which production and company sales will not suffer. Judicial notice has
already been taken of the general practice in private as well as in government
institutions and industries of hiring janitorial services on an independent
contractor basis.
Respondent De Lima Trading and General Services (DE LIMA) are ordered
to reinstate private respondent FELIPE LOTERTE to his former position or its
equivalent without loss of seniority rights. And private respondent De Lima
Trading and General Services (DE LIMA) is ordered jointly and severally with
petitioner Filipinas Synthetic Fiber Corporation (FILSYN) to pay private
respondent FELIPE LOTERTE hi salary differentials, 13th month pay, service
incentive leave pay, and backwages without prejudice to FILSYN seeking
reimbursement from DE LIMA for whatever amount the former may pay or
have paid the latter.
82. Brotherhood Labor Unity Movement vs. Zamora, 147 SCRA 49

FACTS:
On July 11, 1969, Brotherhood Labor Unity Movement of the Philippines

(BLUMP), filed a complaint against San Miguel Corporation. It alleged that
respondents ordered the individual complainants to disaffiliate from the
complainant union, the management then dismissed the individual
complainants when they insisted on their union membership. Petitioners are
workers who have been employed at the San Miguel Parola Glass Factory for
nearly 7 years prior to their dismissal. They worked as cargadores
orpahinantes at the SMC plant loading, unloading, piling or palleting empty
bottles andwooded shells to and from company trucks and warehouses.
Respondents alleged that the complainants have never been their employees
and were employees of an independent contractor, Camahort. Petitioners first
reported for work to Camahort who signs their gate passes and the respondent
company provided them with tools, equipment and paraphernalia used
inloading, unloading, piling and hauling operations. Job orders came from
Camahort. The orders are then transmitted to an assistant-officer-in-charge. In
turn, the assistant informs the warehouseman and checkers regarding the
same. The latter, thereafter, relays said orders to the capatazes or group
leaders who then give orders to the workers as to where, when and what to
load, unload, pile, pallet or clean. Petitioners were pain every 10 days on piece
rate. The group leader notes down the number or volume of work that each
individual worker has accomplished. Camahort approves the final report.
Petitioners also worked exclusively for SMC plnt, never having been assigned
to other companies or departments of SMC plant, even when the volume of
work is minimum.
ISSUE:
WON the petitioners are employees of private respondent, San Miguel
Corporation.
RULING:
YES. In determining the existence of employee-employer relationship,
the elements that are generally considered are the following:
1. The selection and engagement of the employee
2. The payment of wages
3. The power of dismissal; and
4. The employers power to control the employee with respect to the
means and methods by which the work is to be accomplished. It is the socalled control test that is the most important element.
Applying the above criteria, the evidence strongly indicates the
existence of an employer, employee relationship between the petitioner
workers and respondent San Miguel Corporation. The respondent asserts that
the petitioners are employees of the Guaranteed Labor Contractor, an
independent labor contracting firm.
The facts and evidence on record negate respondent SMC's claim.
The existence of an independent contractor relationship is generally
established by the following criteria: "whether or not the contractor is carrying
on an independent business; the nature and extent of the work; the skill
required; the term and duration of the relationship; the right to assign the
performance of a specified piece of work; the control and supervision of the
work to another; the employer's power with respect to the hiring, firing and
payment of the contractor's workers; the control of the premises; the duty to
supply the premises tools,a ppliances, materials and labor; and the mode,
manner and terms of payment.
None of the above criteria exists in the case at bar.
Highly unusual and suspect is the absence of a written contract to
specify the performance of a specified piece of work, the nature and extent of
the work and the term and duration of the relationship. The records fail to
show that a large commercial outfit, such as the San Miguel Corporation,
entered into mere oral agreements of employment or labor contracting here
the same would involve considerable expenses and dealings with a large
number of workers over a long period of time. Despite respondent company's
allegations not an iota of evidence was offered to prove the same or its
particulars. Such failure makes respondent SMC's stand subject to serious
doubts.
Uncontroverted is the fact that for an average of seven (7) years, each
of the petitioners had worked continuously and exclusively for the respondent
company's shipping and warehousing department. Considering the length of
time that the petitioners have worked with the respondent company, there is
justification to conclude that they were engaged to perform activities
necessary or desirable in the usual business or trade of the respondent, and
the petitioners are, therefore regular employees.
83. Deferia vs. NLRC, 194 SCRA 525
FACTS:
On May 3, 1979, the private respondent Erma Industries, Inc. (ERMA), as
private corporation engaged in exporting shrimps, prawns, squids and other
marine products and as represented by its Vice-President Sergio Oritz Luis, Jr.,
entered into a contract with the private co-respondent Cirilo Undan for the latter
to supply the former with marine products in Bacolod City. Under the said
contract, ERMA would provide both the financing and the equipment to Undan
while the latter would be responsible for hiring the workers. Since the
employment of the petitioners in 1982 up to June 30, 1984, they worked
continuously for Undan who paid them on a piece-work basis or pakiao.
Sometimes in April, 1984, the petitioners constituting a majority of the
employees of Undan, joined and became members of the co-petitioner
Commercial and Agro-Industrial Labor Organization (CAILO), a duly registered and
existing labor union.
On May 9, 1984, the petitioners filed a petition for certification for nonpayment of wage differentials, emergency and cost allowances, 13th month pay,
night shift differentials and service incentive pay with the National Labor Relations
Commission, Regional Arbitration Branch No. VI, which case was designated as
RAB 0230-84. A letter complaint was likewise filed with the Social Security System
for the failure of the private respondents to register the petitioners as their
employees.
Consequently, the petitioners filed another case designated for unfair labor
practice committed by the private respondents through the alleged pretended
closure of the said business. The petitioners contended that the same business
continued to operate at another place which was at the residence of Undan's
relative and that the purported closure was made without prior notice to the then
Ministry (now Department) of Labor and Employment.
All petitions were dismissed on the same ground that there was no
employer-employee relationship between the said parties. On appeal, the National
Labor Relations Commission in a Resolution dated August 31, 1987, affirmed the
said decision of the Labor Arbiter and denied a subsequent motion for
reconsideration.
ISSUE/S:
1. Whether or not an employer-employee relationship exists between ERMA
and the petitioners; and
2. Whether or not ERMA is the indirect employer of petitioners so as to
make it jointly and severally liable with Cirilo Undan for the petitioners' claims.
RULING:
With regard to the first issue, we affirm the challenged ruling of the National
Labor Relations Commission that, indeed, there is no employer-employee
relationship between ERMA and the petitioners. Settled jurisprudence enumerates
four (4) elements necessary to establish the existence of an employer-employee

relationship, to wit: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control
employees' conduct.
Be that as it may, notwithstanding the lack of employer-employee
relationship between ERMA and the petitioners, we however cannot hold ERMA
free from any liability to the petitioners for the payment of emergency cost of
living allowance, 13th moth pay, and minimum wages due the latter under
applicable laws.
Addressing the second issue, we agree with the Solicitor-General in his strong
support of the submission on this score of the petitioners that ERMA is their
indirect employer and therefore solidarily liable with Undan.
WHEREFORE, the petitions are GRANTED and all the challenged Resolutions
of the National Labor Relations Commission are hereby ANNULLED and SET ASIDE.
Private respondent Carlos Undan is ordered to REINSTATE the petitioners to their
same or substantially equivalent positions at the time of their termination, with
three years backwages and without loss of seniority lights and benefits
appurtenant thereto.
Should the said reinstatement be rendered impossible by the supervention
of circumstances, Undan is further ordered to PAY the petitioners separation pay
equivalent to one (1) month's salary for every year of service rendered, computed
at the minimum daily wage level at the time of their termination.
In addition, we FIND that each of the petitioners is entitled to moral
damages in the amount of Five Thousand Pesos (P5,000.00) for the evident bad
faith shown by Undan in illegally dismissing the former.
In all instances, Undan and ERMA are jointly and severally liable for all the
aforementioned monetary awards. Costs against the private respondents.
84. Aquino vs. NLRC, 206 SCRA 118

FACTS:
This is a petition for certiorari seeking to modify the decision of the
National Labor Relations Commission in NLRC Case No. RB-IV-20840-78-T
entitled, "Jose Songco and Romeo Cipres, Complainants-Appellants, v. F.E.
Zuellig (M), Inc., Respondent-Appellee" and NLRC Case No. RN- IV-20855-78-T
entitled, "Amancio Manuel, Complainant-Appellant, v. F.E. Zuellig (M), Inc.,
Respondent-Appellee," which dismissed the appeal of petitioners herein and in
effect affirmed the decision of the Labor Arbiter ordering private respondent to
pay petitioners separation pay equivalent to their one month salary (exclusive
of commissions, allowances, etc.) for every year of service.
Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as
Zuellig) filed with the Department of Labor (Regional Office No. 4) an
application seeking clearance to terminate the services of petitioners Jose
Songco, Romeo Cipres, and Amancio Manuel (hereinafter referred to as
petitioners) allegedly on the ground of retrenchment due to financial losses.
This application was seasonably opposed by petitioners alleging that the
company is not suffering from any losses. They alleged further that they are
being dismissed because of their membership in the union. At the last hearing
of the case, however, petitioners manifested that they are no longer
contesting their dismissal. The parties then agreed that the sole issue to be
resolved is the basis of the separation pay due to petitioners. Petitioners, who
were in the sales force of Zuellig received monthly salaries of at least P40,000.
In addition, they received commissions for every sale they made.
ISSUE:
WON earned sales commissions and allowances should be included in
the monthly salary of petitioners for the purpose of computation of their
separation pay.
RULING:
It could be deduced that wage is used in its generic sense and obviously
refers to the basic wage rate to be ascertained on a time, task, piece or
commission basis or other method of calculating the same. It does not,
however, mean that commission, allowances or analogous income necessarily
forms part of the employee's salary because to do so would lead to anomalies
(sic), if not absurd, construction of the word "salary." For what will prevent the
employee from insisting that emergency living allowance, 13th month pay,
overtime, and premium pay, and other fringe benefits should be added to the
computation of their separation pay. This situation, to our mind, is not the real
intent of the Code and its rules.
We rule otherwise. The ambiguity between Article 97(f), which defines
the term 'wage' and Article XIV of the Collective Bargaining Agreement, Article
284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules,
which mention the terms "pay" and "salary", is more apparent than real.
Broadly, the word "salary" means a recompense or consideration made to a
person for his pains or industry in another man's business. Whether it be
derived from "salarium," or more fancifully from "sal," the pay of the Roman
soldier, it carries with it the fundamental idea of compensation for services
rendered. Indeed, there is eminent authority for holding that the words
"wages" and "salary" are in essence synonymous (Words and Phrases, Vol. 38
Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89
App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the Latin
word "salarium," is often used interchangeably with "wage", the etymology of
which is the Middle English word "wagen". Both words generally refer to one
and the same meaning, that is, a reward or recompense for services
performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black's
Law Dictionary, 5th Ed.). Inasmuch as the words "wages", "pay" and "salary"
have the same meaning, and commission is included in the definition of
"wage", the logical conclusion, therefore, is, in the computation of the
separation pay of petitioners, their salary base should include also their
earned sales commissions. ACCORDINGLY, the petition is hereby GRANTED.
85. Eagle Security Agency vs. NLRC, 172 SCRA 479

FACTS:
In 1980, petitioners Philippine Tuberculosis Society, Inc. (hereinafter
referred to as PTSI) and Eagle Security Agency, Inc. (hereinafter referred to as
EAGLE) entered into a "Contract for Security Services" wherein the latter
agreed to provide security services in the formers premises. The contract
covered the period from November 2, 1979 to July 31, 1985. Pursuant to this
agreement, private respondents were assigned by EAGLE to PTSI as security
guards.
Petitioners PTSI and EAGLE, in this special civil action of certiorari,
impugn the decision of the NLRC as having been issued with grave abuse of
discretion amounting to lack or excess of jurisdiction. Petitioners assail the
decision of the NLRC finding them jointly and severally liable to the security
guards for payment of the minimum wage and cost of living allowance
increases under the wage orders. Both PTSI and EAGLE point to the other as
the one who should be solely liable for paying the increases.
ISSUE:
Whether or not PTSI and EAGLE are jointly and severally liable to the
security guards as principal and contractor, respectively, for the payment of
minimum wage and cost of living allowance increases.
RULING:
The Wage Orders are explicit that payment of the increases are "to be
borne" by the principal or client. "To be borne however, does not mean that
the principal, PTSI in this case, would directly pay the security guards the
wage and allowance increases because there is no privity of contract between
them. The security guards' contractual relationship is with their immediate
employer, EAGLE. Eagle an employer, EAGLE is tasked, among others, with the
payment of their wages.
WHEREFORE, in view of the foregoing, the petitions in G.R. No. 81314
and G.R. No. 81447 are hereby DISMISSED and the decision and resolution of
the NLRC in NLRC-NCR-11-3652-85 dated November 27, 1987 and December
29, 1987, respectively, are AFFIRMED. The temporary restraining order issued
by the Court on June 20, 1988 is hereby LIFTED and SET ASIDE.
86. Republic vs. Peralta, 150 SCRA 37

FACTS:
The Republic of the Philippines seeks the review on certiorari of the
Order of the CFI of Manila in its Civil Case No. 108395 entitled In the Matter of
Voluntary Insolvency of Quality Tobacco Corporation, Quality Tobacco. In its
questioned Order, the trial court held that the above enumerated claims of
USTC and FOITAF (hereafter collectively referred to as Unions for separation
pay of their respective members embodied in final awards of the NLRC were to
be preferred over the claims of the Bureau of Customs and the BIR. The trial
court, in so ruling, relied primarily upon Article 110 of the Labor Code. The
Solicitor General, in seeking the reversal of the questioned Orders, argues that
Article 110 of the Labor Code is not applicable as it speaks of a term which he
asserts does not include the separation pay claimed by the Unions. Separation
pay, the Solicitor General contends: is given to a laborer for a separation from
employment computed on the basis of the number of years the laborer was
employed by the
employer; it is a form of penalty or damage against the employer in
favor of the employee for the latters dismissal or separation from service
ISSUE:
WON separation pay of their respective members embodied in final
awards of the NLRC were to be preferred over the claims of the Bureau of
Customs and the BIR.
RULING:
Ratio For the specific purposes of Article 1109 and in the context of
insolvency termination or separation pay is reasonably regarded as forming
part of the remuneration or other money benefits accruing to employees or
workers by reason of their having previously rendered services to their
employer; as such, they fall within the scope of remuneration or earnings
for services rendered or to be rendered Liability for separation pay might
indeed have the effect of a penalty, so far as the employer is concerned. So
far as concerns the employees, however, separation pay is additional
remuneration to which they become entitled because, having previously
rendered services, they are separated from the employers service.
We note, in this connection, that in Philippine Commercial andIndustrial
Bank (PCIB) us. National Mines and Allied Workers Union, the Solicitor General
took a different view and there urged that the term wages under Article 110 of
the Labor Code may be regarded as embracing within its scope severance pay
or termination or separation pay. In PCIB, this Court agreed with the position
advanced by the Solicitor General. We see no reason for overturning this
particular position.
The resolution of the issue of priority among the several claims filed in
the insolvency proceedings instituted by the Insolvent cannot, however, rest
on a reading of Article 110 of the labor Code alone.
Article 110 of the Labor Code, in determining the reach of its terms,
cannot be viewed in isolation. Rather, Article 110 must be read in relation to
the provisions of the Civil Code concerning the classification, concurrence and
preference of credits, which provisions find particular application in insolvency
proceedings where the claims of all creditors, preferred or non-preferred, may
be adjudicated in a binding manner. Disposition MODIFIED and REMANDED to
the trial court for further proceedings in insolvency.
87. DBP vs. NLRC, 183 SCRA 328

FACTS:
In September 1983, petitioner Development Bank of the Philippines, as
mortgagee of TPWII, foreclosed its plant facilities and equipment.
Nevertheless, TPWII continued its business operations interrupted only by brief
shutdowns for the purpose of servicing its plant facilities and equipment. In
January 1986 petitioner took possession of the foreclosed properties. From
then on the company ceased its operations. As a consequence, private
respondent Leonor A. Ang was on 15 April 1986 verbally terminated from the
service. After hearing on a complaint for separation pay, 13th month pay,
vacation and sick leave pay, salaries and allowances against TPWII, its General
Manager, and petitioner, the Labor Arbiter found TPWII primarily liable to
private respondent but only for her separation pay and vacation and sick leave
pay because her claims for unpaid wages and 13th month pay were later paid
after the complaint was filed. The General Manager was absolved of any
liability. But with respect to petitioner, it was held subsidiarily liable in the
event the company failed to satisfy the judgment. The Labor Arbiter
rationalized that the right of an employee to be paid benefits due him from the
properties of his employer is superior to the right of the latter's mortgagee,
citing this Court's resolution in PNB v. Delta Motor Workers Union. On 16
November 1992 public respondent National Labor Relations Commission
affirmed the ruling of the Labor Arbiter. Petitioner argues that the decision of
public respondent runs counter to the consistent rulings of this Court in a long
line of cases emphasizing that the applicant of Art. 110 of the Labor Code is
contingent upon the institution of bankruptcy or judicial liquidation
proceedings against the employer.
ISSUE:
Whether or not Art. 110 of the Labor Code, as amended, which refers to
worker preference in case of bankruptcy or liquidation of an employer's
business, is applicable to the present case notwithstanding the absence ofany
formal declaration of bankruptcy or judicial liquidation of TPWII.
RULING:
Article 110 is NOT applicable in the absence of any formal declaration of
bankruptcy or judicial liquidation of TPWII. We hold that public respondent
gravely abused its discretion in affirming the decision of the Labor Arbiter. Art.
110 should not be treated apart from other laws but applied in conjunction
with the pertinent provisions of the Civil Code and the Insolvency Law to the
extent that piece-meal distribution of the assets of the debtor is avoided.
The present controversy could have been easily settled by public
respondent had it referred to ample jurisprudence which already provides the
solution. Stare decisis et non quieta movere. Once a case is decided by this
Court as the final arbiter of any justiciable controversy one way, then another
case involving exactly the same point at issue should be decided in the same
manner. Public respondent had no choice on the matter. It could not have
ruled any other way. This Court having spoken in a string of cases against
public respondent, its duty is simply to obey judicial precedents. Any further
disregard, if not defiance, of our rulings will be considered a ground to hold
public respondent in contempt.
88. Bolinao vs. Padolina, 186 SCRA 368

FACTS:
This is a petition for certiorari with preliminary injunction which seeks to
reverse and to set aside the order of the Regional Trial Court of Pasig, Metro
Manila, dated January 5, 1988 in Civil Case No. 50936 entitled "Phelps Dodge
(Phils.) Inc. v. Sabena Mining Corporation" denying the motion to intervene
and dismissing the third party claim filed by herein petitioners.
Petitioners A.N. Bolinao, Jr., Reynold P. Dannug, Juan A. Agsalon, Jr. and
Zosimo L. Carreon were all former employees of Sabena Mining Corporation,
which had a copper and gold project in operation, located in New Bataan,
Davao del Norte. In 1982 and 1983 they were laid off without being recalled
(Rollo, Petition, pp. 3-4).
On May 29,1984, a compromise agreement was entered into by the
parties, wherein petitioners were to be paid on a staggered basis the collective
amount of P385,583.95 (Rollo, Petition, Annex "A, pp. 22-24). The company
faithfully complied with the scheduled payments only up to March, 1985
because it ceased operations effective April 1, 1985. With this development,
petitioners moved for the issuance of a writ of execution in June, 1985 (Rollo,
Petition, p. 6).
Petitioners filed their reply to the opposition and at the same time filed a
motion to resolve the third party claim (Rollo, Annex "G, pp. 58-62; Annex "G1", pp. 63- 67).
ISSUE:
Whether or not petitioners enjoy preferential right or claim over the
funds of Sabena Mining Corporation as provided for under the provisions of
Article 110 of the New Labor Code, as amended, and Section 10, Rule VIII,
Book III of the Implementing Rules and Regulations of the Labor Code.
RULING:
In the case at bar, there was no showing of any insolvency proceeding or
declaration of bankruptcy or judicial liquidation that was being filed by Sabena
Mining Corporation. It is only an extra-judicial foreclosure that was being
enunciated as when DBP extra-judicially foreclosed the assets of Sabena
Mining Corporation. Conversely, to hold that Article 110 is also applicable in
extra-judicial proceedings would be putting the worker in a better position
than the State which could only assert its own prior preference in case of a
judicial proceeding. Article 110 must not be viewed in isolation and must
always be reckoned with the provisions of the Civil Code (DBP v. Labor Arbiter,
supra).
The reason behind the necessity for a judicial proceeding or a
proceeding in rem before the concurrence and preference of credits may be
appealed is to bind all interested persons whether known to the parties or not.
The claims of all credits whether preferred or non-preferred, the Identification
of the preferred ones and the totality of the employer's assets should be
brought into the picture. There can then be an authoritative, fair and binding
adjudication instead of the piece meal settlement which would result from the
questioned decision in this case 1(DBP v. Labor Arbiter, supra).
PREMISES CONSIDERED, the petition is hereby DISMISSED for lack of
merit and the questioned Order dated January 5, 1988 issued by the
respondent court is hereby AFFIRMED.
89. Banco Filipino vs. NLRC, 188 SCRA 700

FACTS:
After BANCO FILIPINO SAVINGS AND MORTGAGE BANK was placed under
receivership, and later ordered liquidated by the Monetary Board of the
Central Bank, FORTUNATO M. DIZON. Jr., who was then holding the position of
Executive Vice President and Chief Operating Officer of the bank, received a
letter from the Central Bank appointed liquidator, MS. CARLOTA P.
VALENZUELA, informing him that all management authority in the bank had
been assumed by the Central Bank appointed liquidators and that his
employment is being terminated.
Dizon filed on March 31, 1986 a complaint with the labor arbiter against
the bank for recovery of unpaid salary, the cash equivalent of his accumulated
vacation and sick leaves, termination pay under Article 283 of the Labor Code
and moral damages and attorney's fees.
On November 14, 1986, the labor arbiter upheld her jurisdiction and
promulgated a decision in favor of Dizon but withheld his demand for payment
of moral damages and attorney's fees. Both parties appealed to the National
Labor Relations Commission which increased the award due Dizon and further
ordered payment of actual and moral damages and attorney's fees. The award
of moral damages was later deleted in the resolution of February 24, 1988 of
the Commission.
ISSUE:
Whether or not petitioner Dizon is entitled to his separation pay.
RULING:
It is common knowledge that the taking over of the management and
assets of Banco Filipino by the Monetary Board of the Central Bank is being
contested by some stockholders of the bank who insist that the bank is solvent
and in sound financial condition and that its closure was illegal. The
controversy has generated quite a number of cases in this Court and in one of
them, G.R. No. 70054, entitled Banco Filipino Savings and Mortgage Bank v.
The Monetary Board, et al., We adopted a resolution, dated August 29, 1985,
enjoining the Monetary Board, its officers, and the Central Bank appointed
receivers "from executing further acts of liquidation of a bank "save" acts such
as receiving collectibles and receivables or paying off creditors claims and
other transactions pertaining to normal operations of a bank," and later,
further ordered that a hearing be conducted by the Regional Trial Court of
Makati, Branch 146 to afford the former management/stockholders of the bank
an opportunity to prove that the bank's closure was illegal. The temporary
restraining order still stands and it appears that a report and recommendation
on the hearing has yet to be filed. For the moment, therefore, the bank is not
being liquidated and the possibility lurks that it might not be at all.
Respondent Dizon, cognizant of these, argues that it is the labor arbiter and
the NLRC which has jurisdiction over his money claims since there is no
liquidation court to speak of.
Such was our ruling in International Hardware, Inc. v. NLRC, G.R. No.
80770, August 10, 1989. As regards the commutation to cash of Dizon's
accumulated vacation and sick leaves, both the Labor Arbiter and the NLRC
found that this was authorized by the Collective Bargaining Agreement then
existing before the bank's closure and which CBA the liquidators manifested to
honor. This is a factual issue which We are not inclined to disturb. Also, since
Dizon was forced to litigate, he is entitled to attorney's fees.
ACCORDINGLY, the decision under review is AFFIRMED save that the
money due the private respondent should be presented to the liquidators for
processing.
90. Lantion vs. NLRC, 181 SCRA 513

FACTS:
The instant controversy traces its roots to the retrenchment and
reorganization program (RRR) adopted in 1983 by respondent Gregorio
Araneta University Foundation (the University, for short).
In particular, this Petition for Certiorari seeks a reversal of the Decision
of public respondent National Labor Relations Commission (NLRC), dated 20
January 1988, which modified the judgment of the Labor Arbiter in the Illegal
Dismissal Case entitled "Filomeno N. Lantion et als. vs. Gregorio Araneta
University Foundation et als." in NLRC Case No. NCR-3-98185.
The three (3) Complainants in this case charged the University with
Illegal Dismissal, Non-payment of separation pay, retirement pay, and gratuity
pay, Unfair Labor Practice with Damages, and Attorney's Fees.
ISSUE:
Whether or not the NLRC gravely abused its discretion in holding in this
case that petitioners were not illegally dismissed.
RULING:
Following the First GAUF Case as a precedent, the answer must be in the
affirmative. Under the guidelines to the retrenchment program given by the
University and the Ministry of Labor, the following considerations emerge
clear: (1) there was to be a separation or retirement of ALL personnel with
corresponding grant of termination pay or retirement benefits, whichever is
higher; (2) top-to-bottom University-wide reorganization subject, however, to
the condition of rehiring of ALL personnel so separated or retired; (3) but with
the exception of those whose present positions will be affected by the
proposed reorganizational changes.
And in regards attorney's fees, respondent NLRC properly disallowed the
award as the same is granted only in case of unlawful withholding of wages
(Gregorio Araneta University Foundation vs. NLRC, et al., G.R. No. L-75583,
November 8, 1988, 167 SCRA 79; Article III (a), P.D. 442 as amended). In this
case, it cannot be said that wages had been unlawfully withheld by the
University. In fact, it had made partial payments of retirement benefits.
WHEREFORE, the Decision of respondent National Labor Relations
Commission is REVERSED in so far as it holds that the dismissal of petitioners
was not illegal and hereby ORDERS respondent Gregorio Araneta University
Foundation to REINSTATE petitioners to their former positions with three (3)
years backwages under the new terms and conditions of employment in the
University as reorganized. In all other respects, the Decision of the National
Labor Relations Commission is AFFIRMED. No costs.
91. Maternity Children's Hospital vs. Secretary of Labor et. al., 174 SCRA 632
FACTS:
Petitioner has first- one (4) employees. Aside from the salary and hiring
allowance, the employees are given food, but the amount spent therefor is
dedicated from their respective salaries.
On May 23, 1986; ten(10) employees of the refiner employed in Afferent
Capauties/ positions bled a complaint with the coffle of the Regional Director
of Labor and employment for underpayment of the Salaries and EZOLAS.
On June 16, 1986, the Regional Director directed two of his Labor SFLS
and Welfare appliers to inspect the records of the petitioner to as certain the
truth of the Allegations in the complaints.
ISSUE:
Won the Regional Director had prediction over the case.
RULING:
This is a Labor standards are, and is governed my article 128-b of the
Labor cod, as amended by ED.III under the present rules, the Regional Director
Exercises both visiterial and enforcement prever over labor standards cases,
and is therefore empowered to adjudicate money claims, provided there still
exists an EE-ER relationship, and the bidings of the Regional Office is not
contested by the employer amounted Petition Dismissed
92. M. Ramirez Industries vs. DOLE, 266 SCRA 111
FACTS:
Petitioner M. Romirez Industries is a single proprientship in Tungkop,
Minglanilla, Cebu. It is engaged in the manufacture of handmade valter
baskets for expert abroad, principally to japan, and has in its employ from 400
to 500 employees.
On April, 1 1986, Carelyn Alfonso and 2000 employees filed a complaint
with the Regional office No. VII of the Department of Labor in Cebu City,
alleging non-payment of minimum arge, living allowances and non-Compliance
an perspective war conducted in the company premises an the same day by

the Labor Standard officer, Juanito Yallosa.
On April 11, 1986, petitioner filed an exparle motion to dismiss the case
alleging voluntary desistance my private respondents,
ISSUE:
WON the DOLE has the prediction to the case involving revelry of wages,
simple money claims, and other benefits under article RA of the new Labor
Code.
RULING:
Upon complaint of any interested pasly, the Regional Director of the
DOLE or any of the duly authorized hearing officers of the department is
empowered, through summary providing and after due notice to hear and
decide ant matter involving the revelry of wages and other monetary claims
and benefits, including legal interest owning to an employed in domestic or
household services or house keeper under this cods, arising from EE-ER
relations: provided that such complaint does nt include a claims for
reinstatement; provided further, that the aggregate money claims of each
employee or househelper does not exceed five thousand pesos (P5,000.00)
Wherefore, respondent M. Remirez Industries is hereby ordered to pay
the complainants claims in the aggregate amount of (430,901.75)
93. Atilano vs. de la Sema, 182 SCRA 886
FACTS:
This petition for certiorari is directed against the order of respondent
undersecretary of Labor and employment dated 3 March 1988 which sustained
the decision of respondent Regional Director. The decision awarded salary
differentials, allowances, 13th month pay and every time pay to the seventeen
(17) private respondent employees of petitioner Vicente Atilano who is doing
business under the Rubriz Rose Shipping lines.
ISSUE:
WON the requirements that compromise agreement must be signed in
the presence of the Regional Director not followed in case at bar.
RULING:
The quit claim papers with petitioner alleges embodied a compromise or
settlement agreement were in any case lot duly executed, that is, the were not
signed in the presence of the Regional Director or his duly authorized
representative, in disregard of the requirements of section 8, rule II of the
rules on the disposition of the Labor Standards cases in the Regional Offices,
which provides that: Section 8. Compromise agreement- Should the party
arrive at an agreement as to the whole part of the dispute, said agreement
shall we reduced (to) writing and signed by the parties in the presence of the
Regional Director or Luz duly authorized representative,
Thus, the issue of the authenticity and genuineness of the two (2) sets of
supposed quit claims had been squarely raised before and passed upon and
resolved by the Regional Director and the undersecretary of Labor
Wherefore, the Petition is Dismissed for lack of merit
94. Marcopper Mining Corp. vs. Ople, 106 SCRA 75

FACTS:
Private respondent, Marcopper Employees Labor Union filed a complaint
before the National Labor Relations Commission for the payment of 13th
month salary, petitioner marcopper miming corporation opposed on the
ground that in view of its then existing collective bargaining agreement which
granted the employees belonging to private respondent midyear and year end
bemuses, it was exempt from the operation of the presidential decree 857.
ISSUE:
WON there was a grave abuse of discretion as under the term of the
decree, petitioner is excluded from its coverage.
RULING:
The Decree is Specific and mandatory, employees without exception, are
required to pay their employees receiving a basic salary of not more than
P1,000.00 a month irrespective of the nature of employment, a 13th month
pay not labor than December 24 of every year, where the employers,
however, actually grant such for the 13th month pay they could be exampled
from the operation of the Decree. To fall within the exempting clause, it must
be shown that there is such actual payment. There is no such showing here,
since the payment of business is obligatory a the part of the petitioner, then
the petitioner does not come under the exempting clause of PD No. 857 and it
has to pay its employees the 13th month pay required under said Decree.
Petition Dismissed
95. Osias Academy vs. DOLE, 192 SCRA 612

FACTS:
The award by the respondent minister of Labor of Separation pay, an
grounds of equity, to two employees of petitioner OSIAS Academy despite the
allowedly correct grant of clearance to it to terminate the services of said
employees on the ground of loss of confidence based on a satisfactory
showing of embezzlement of company fondle saviors misconduct,. Etc.,. is
challenged in the special civil action of certiorari at bar
ISSUE:
WON the grant of separation pay to the private respondent is
uncertified.
RULING:
The courts, rule in a case devised in San Miguel corporation V. the
deputy minister of labor and employment, et al.,. a similar issue was involved
in Philippines long Distance telephone company V. NLRC, et al.,. in that case,
the court undertook a review of past precedents, sanctioned the grant of
separation pay to employees dismissed for some first cause. The court then
proceeded to lay down principle which are hereby affirmed; a contrary rule
would, as the petitioner correctly argues, have the effect of rewarding rather
than punishing the erring employ for his offense. And we do not agree that the
punishment is his dismissal only and that the separation pay has nothing to do
with the wrong he has committed, indeed, if the employee who steals from the
company is granted separation pay even as he is rahdly dismissed, it is not
unlikely that he will commit a similar offense in his next employment because
he think he can expect a little leniency if he is again found out. This kind of
misplaced compression is not going to do labors in general any good as it will
encourage the infiltration of its ranks by those who do not deserve the
protection and concern of the constitution
Wherefore, Termination affirmed, Separation pay Disallowed
96. Davao Fruits Corp. vs. ALU, 225 SCRA 562

FACTS:
Respondent ALU for and in behalf of an the rank-and-file workers end
employees of petitioner sight to recover from the butter the 13th month pay
differential for 982 and said employees, equivalent to their sick, reaction and
maternity leaves, premium for work done on rest days and special holidays
and pay for regular holidays which petitioner, allegedly in disregard of
company practice since 1975m excluded from the computation of the 13th
month pay for 1982.
ISSUE:
WON the computation of the 13th month pay under PD No. 851, may be
excluded in the computation and payment thereof.
RULING:
Basic salary does not hereby exclude the benefits expressly, mentioned
but all payments which may be in the form of fringe benefits or allowances.
Sec; 4 of the supplementary IRR rules and regulations PD. No. 851 provider
that every time pay, earnings, and other resurrections which are not part of
the basic salary, shell not be included in the computation of the 13th month
pay. whatever compensation an employee receives for an 8-hour work daily
on the daily wage rate is the basic salary. My compensation recommender
other them the daily wage rate is excluded it follows, therefore, that the
payments for sick, reation , and maturing leaves, premiums for work dene an
rest days and special holidays, as well as pay for regular holidays, are likewise
excluded in computing basic salary for the purpose of determining the 13th
month pay.
97. Songco vs. NLRC, 183 SCRA 610

FACTS:
Zuelig filed an application for clearance to terminate the services of
Songco, and others an the ground of retrenchment due to financials losses.
The Labor arbiter ordered Zuelig to pay Songco, et al., separation pay
equivalent to their one-month salary (Exclusive of Commissions, allowances,
etc.) for every year of service with the company The National Labor Relations
Commissions sustained the arbiter.
ISSUE:
WON Earned sales commission and allowances should be included in

the monthly salary of Songco, et al. for the purpose of computing their
separation pay.
RULING:
In computation of back wages and separation pay, account must be
fallen not only of the basic salary of the employee, but also of the
transportation and emergency living allowances.
In Soriano V. NLRC (155 SCRA 124), we held that the commissions also
claimed by the employee ( override Commissions plus net deposit incentive)
are not properly includible in such base figure since such commissions must be
earned by actual market transactions attributable to the petitioner (Salesman).
Since the commissions in the present case wore earned by actual transactions
attributable to Songco, et al.. these should be included in their separation pay.
In the computation thereof, what should be fallen into account os the average
commissions earned during their last year of employment
98. Phil. Fuji Xerox Corp. vs. Trajano et. al., 228 SCRA 329
FACTS:
Petitioner Corporation pays its salesmen a small fixed or guaranteed
wage; the greater part of the latters wages or salaries being composed of the
sales or incentive commissions earned on actual sales of duplicating machines
closed by them. Thus the sales commissions received for every duplicating
machine sold constituted part of the basic compensation or remuneration of
the salesmen of the Philippine Duplicators for doing their job.
The Labor Arbiter directed Petitioner Duplicators to pay 13th month pay
to private respondent employees computed on the basis of their fixed wages
plus sales commission.
Sec. 4 of the Supplementary Rules and Regulations Implementing PD No.

851 (Revised Guidelines Implementing 13th Month Pay) provides that overtime
pay, earning and other remuneration which are not part of the basic salary
shall not be included in the computation of the 13th month pay.
Petitioner Corporation contends that their sales commission should not
be included in the computation of the 13th month pay invoking the
consolidated cases of Boie-Takeda Chemicals, Inc. vs Hon. Dionisio dela Serna
and Philippine Fuji Xerox Corp. vs Hon. Crecencio Trajano, were the so-called
commissions of medical representatives of Boie-Takeda Chemicals and rankand-file employees of Fuji Xerox Co. were not included in the term basic
salary in computing the 13th month pay.
ISSUE:
WON sales commissions comprising a pre-determined percent of the
selling price of the goods are included in the computation of the 13th month
pay.
RULING:
Yes. These commission which are an integral part of the basic salary
structure of the Philippine Duplicators employees-salesmen, are not overtime
payments, nor profit-sharing payments nor any other fringe benefit. Thus,
salesmens commissions comprising a pre-determined percent of the selling
price of the goods were properly included in the term basic salary for
purposes of computing the 13th month pay.
Commissions of medical representatives of Boie-Takeda Chemicals and
rank-and-file employees of Fuji Xerox Co. were not included in the term basic
salary because these were paid as productivity bonuses which is not
included in the computation of 13th month pay.
99. Phil. Agricultural Commercial & Industrial Workers Union vs.

NLRC, 247 SCRA 256
FACTS:
Petitioner union complaint for payment of 13th month pay to the drivers
and conductors of respondent company, on the ground that although said
drivers and conductors are compensated on purely commission basis as
described in their CBA, they are automatically entitled to the basic minimum
pay mandated by law should said commission be less than their basic
minimum for eight (8) hours work. Respondent Vallacar Transit, Inc. contended
that since said drivers are compensated on a purely commission basis, they
are not entitled to 13th month pay pursuant to the exempting provisions
enumerated in paragraph 2 of the Revised Guidelines on the Implementation

of the 13th Month Pay Law. Section of Article XIV of the CBA expressly provides
that drivers and conductors paid on a purely commission are not legally
entitled to 13th month pay. Said CBA, being the law between the parties, must
be respected.
ISSUE:
WON the bus drivers and conductors of respondent Vallacar Transit, Inc.
are entitled to 13th month pay.
RULING:
Yes, For purposes of entitling rank and file employees a 13th month pay,
it is immaterial whether the employees concerned are paid a guaranteed wage
plus commission or a commission with guaranteed wage inasmuch as the
bottom line is that they receive a guaranteed wage. Thus is correctly
construed in the MOLE Explanatory Bulletin No. 8612.The 13th month pay of
bus drivers and conductors must be one-twelfth (1/12) of their total earnings
during the calendar year
100. Archilles Manufacturing Corp. vs, NLRC, 244 SCRA 750

FACTS:
Private respondents Geronimo Manuel, Arnulfo Diaz, Jaime Carunungan
and Benjamin Rindon were employed by ARCHILLES as laborers in its steel
factory.
On 11 May 1990 the management ordered private respondent to remove
their families from the bunkhouse and to explain their violation of the
company rule. Private respondents remove their families from the premises
but failed to report to the management as required; instead, they absented
themselves from 14 to 18 May 1990. Consequently, on 18 May 1990,
ARCHILLES terminated their employment for abandonment and for violation of
the company rule regarding the use of the bunkhouse. Private respondents
filed a complaint for illegal dismissal. On 10 July 1991 the Labor Arbiter found
the dismissal of private respondents illegal and ordered their reinstatement as
well as the payment to them the back wages, proportionate 13th month pay
for the year 1990 and attorney's fees.
ISSUES:
Whether a writ of execution is still necessary to enforce the Labor
Arbiter's order of immediate reinstatement pending appeal; (b) whether
dismissal for cause results in the forfeiture of the employee's right to a 13th
month pay; and, (c) whether the award of attorney's fees is proper in the
instant case.
RULING:
As regards the first issue, i.e., whether a writ of execution is still
necessary to enforce the Labor Arbiter's order of immediate reinstatement
even when pending appeal, we agree with petitioners that it is necessary. The
third paragraph of Art. 223 of the Labor Code provides
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall
be immediately executory, even pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated
in the payroll.
In the case at bench, there was no occasion for petitioners to exercise
their option under Art. 223 of the Labor Code in connection with the
reinstatement aspect of the decision of the Labor Arbiter. The motions of
private respondents for the issuance of a writ of execution were not acted
upon by NLRC. It was not shown that respondent exerted efforts to have their
motions resolved. They are deemed to have abandoned their motions for
execution pending appeal. They cannot now ask that the writ of execution be
issued since their dismissal was found to be for cause.
On the second issue, which refers to the propriety of the award of a 13th
month pay, paragraph 6 of the Revised Guidelines on the Implementation of
the 13th Month Pay Law (P. D. 851) provides that "(a)n employee who has
resigned or whose services were terminated at any time before the payment
of the 13th month pay is entitled to this monetary benefit in proportion to the
length of time he worked during the year, reckoned from the time he started
working during the calendar year up to the time of his resignation or
termination from the service . The payment of the 13th month pay may be
demanded by the employee upon the cessation of employer-employee
relationship. This is consistent with the principle of equity that as the employer
can require the employee to clear himself of all liabilities and property
accountability, so can the employee demand the payment of all benefits due
him upon the termination of the relationship."
With respect to the third issue, the disputed attorney's fees can only be
assessed in cases of unlawful withholding of wages. 7 It cannot be said that
petitioners were guilty of unlawfully withholding private respondents' salaries
since, as earlier discussed, the occasion never arose for them to exercise that
option under Art. 223 of the Labor Code. Clearly, the award of attorney's fees
is baseless.
WHEREFORE, the instant petition is partly granted. The challenged
Decision of the National Labor Relations Commission dated 11 August 1992 is
MODIFIED by deleting that portion ordering petitioners to pay private
respondents their salaries from 19 September 1991 to 20 September 1992 as
well as that portion awarding 10% of the total judgment award as attorney's
fees for lack of legal and factual basis. In other respects, the Decision is
AFFIRMED.
101. United CMC Textile Workers Union vs. Valenzuela, 149 SCRA 424
FACTS:
Petitioner union filed a complaint against CTMI for non-payment of the

1978 Christmas bonus of rank and file employees as provided in their CBA.
The decision of the SC has become final and executory in favor of the
petitioner union.
Subsequently, CTMI filed an appeal stating that the decision of the SC
has become moot and academic by virtue of a previous jurisprudence (La
Carlota) ruling that employers already paying the equivalent of the 13th
month pay to their employees, such as Christmas bonus, are under no legal
obligation to pay an additional month pay prescribed under PD 851.
Respondent Labor Arbiter refused to continue with the execution of the
decision contending that it has become moot and academic.
ISSUE:
WON employer paying its employees the Christmas bonus under the
CBA is no longer required to pay the 13th month pay provided under PD 851.
WON the Carlota ruling is applicable in the case herein.
RULING:
Yes. If the Christmas bonus was included in the 13th month pay, then
there would be no need for having a specific provision on Christmas bonus in
the CBA. But it did provide, thus the intention is clear that said bonus is meant
to be in addition to the legal requirement.
No. La Carlota doctrine cannot be applied because judgments which had
been long become final and executory can no longer be amended or modified
by the courts. Such doctrine known as the law of the case.
102. Universal Corn Products vs. NLRC, 153 SCRA 191

FACTS:
The petitioner invokes National Federation of Sugar Workers (NFSW) v.
Ovejera, the 13th-month pay law, does not cover employers already paying
their employees an "equivalent" to the 13th month pay.
Sometime in May, 1972, the petitioner and the Universal Corn Products
Workers Union entered into a collective bargaining agreement in which it was
provided, among other things, that: the company agrees to grant all regular
workers within the bargaining unit with at least one (1) year of continuous
service, a Christmas bonus equivalent to the regular wages for seven (7)
working days, effective December, 1972. The bonus shall be given to the
workers on the second week of December.
The agreement had duration of three years, effective June 1, 1971, or
until June 1, 1974.
On account however of differences between the parties with respect to
certain economic issues, the collective bargaining agreement in question
expired without being renewed. On June 1, 1979, the parties entered into an
"addendum" stipulating certain wage increases covering the years from 1974
to 1977.
For failure of the petitioner to pay the seven-day Christmas bonus for
1975 to 1978 inclusive, in accordance with the 1972 CBA, the union went to
the labor arbiter for relief. In his decision, 6 the labor arbiter ruled that the
payment of the 13th month pay precluded the payment of further Christmas
bonus. The union appealed to the National Labor Relations Commission
(NLRC). The NLRC set aside the decision of the labor arbiter appealed from and
entered another one, "directing respondent company [now the petitioner] to
pay the members concerned of complainants [sic] union their 7-day wage
bonus in accordance with the 1972 CBA from 1975 to 1978."
ISSUE:
WON employer paying its13th month pay provided under PD 851 is no
longer required to pay Christmas bonus.
WON the Carlota ruling is applicable in the case herein.
RULING:
We hold that in the case at bar, Ovejera (La Carlota) case does not apply.
We apply instead, United CMC Textile Workers Union v. Valenzuela 8 a
recent decision. In that case this Court, speaking through Mr. Justice Edgardo
Paras,held that if the Christmas bonus was included in the 13th month pay,
then there would be no need for having a specific provision on Christmas
bonus in the CBA. But it did not provide for a bonus in graduated amounts
depending on the length of service of the employee. The intention is clear
therefore that the bonus provided in the CBA was meant to be in addition to
the legal requirement.
It is claimed, however, that as a consequence of the impasse between
the parties beginning 1974 through 1979, no collective bargaining agreement
was in force during those intervening years. Hence, there is allegedly no basis
for the money award granted by the respondent labor body. But it is not
disputed that under the 1972 collective bargaining agreement, if no
agreement and negotiations are continued, all the provisions of this
Agreement shall remain in full force up to the time a new agreement is
executed.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
The Decision of the public respondent NLRC promulgated on February 11,
1982, and its Resolution dated March 23, 1982, are hereby AFFIRMED. The
temporary restraining order issued on May 19, 1982 is LIFTED.
This Decision is IMMEDIATELY EXECUTORY.
103. Metro Transit Organization vs. NLRC, 245 SCRA 767

FACTS:
In this Petition for Certiorari, petitioner Metro Transit Organization, Inc.

("Metro") asks us to set aside the Decision and Resolution of the National
Labor Relations Commission ("NLRC") dated 30 March and 22 June 1994
respectively in NLRC-NCR-CA No. 000042-92 ordering it to pay its supervisory
employees amounts representing (i) a demanded wage increase based on
company practice and (ii) a correction or adjustment of an underpayment of
an annual wage increase granted in the collective bargaining agreement (CBA)
between Metro and herein private respondent Supervisory Employees
Association Metro ("SEAM").
On 1 December 1989, the first collective bargaining agreement between
petitioner Metro and private respondent SEAM took effect. 1 Prior to December
1989, Metro had a CBA only with its rank-and-file employees. During the
period when no CBA governed the terms and conditions of employment
between Metro and its supervisory employees, whenever rank-and-file
employees were paid a statutorily mandated salary increase, supervisory
employees were, as a matter of practice, also paid the same amount plus
P50.00.
On 24 March 1992, private respondent SEAM filed a Notice of Strike
before the National Conciliation and Mediation Board ("NCMB") charging
petitioner Metro with (a) discrimination in terms of wages; (b) underpayment
of salary increase per CBA for 1990 and/or adjustment of salaries for
correction of disparity/inequity in pay with rank-and-file employees and (c)
harassment and demotion of union officers. Conciliation and mediation efforts
before the NCMB failed.
On 23 June 1992, acting on a petition filed by Metro, the Secretary of
Labor assumed jurisdiction over the labor dispute and certified the same to
public respondent NLRC for same compulsory arbitration. On 30 March 1994,
the NLRC rendered its decision. On 22 June 1994, NLRC denied the motion for
reconsideration filed by Metro. The instant Petition for Certiorari was filed on
14 July 1994 accompanied by a prayer for issuance of a temporary restraining
order to enjoin public respondents from enforcing their award.
On 31 August 1994, the Court, after an oral hearing, issued a Resolution
encouraging petitioner Metro and private respondent SEAM to vigorously and
earnestly exercise their best efforts to reach an amicable and mutually
acceptable settlement of their claims and counterclaims. In the meantime, the
disputants were to maintain the status quo, in particular, private respondent
SEAM and public respondent NLRC were to refrain from seeking and granting,
respectively, the issuance of a writ of execution in respect of the decision of
the NLRC.
On 29 and 30 September 1994, petitioner Metro and private respondent
SEAM respectively informed the Court that their efforts amicably to settle their
dispute had failed. Cognizant of (a) the huge disparity between the financial
capability of Metro and the amount awarded to SEAM, 3 (b) the essential
public services being rendered by the parties and (c) in the interest of avoiding
any disruption of these basic services, the Court reiterated its Order of 31
August 1994 enjoining respondents SEAM and the NLRC from seeking and
granting a writ of execution until further orders from this Court.
ISSUE:
Whether or not a bonus forms part of wages depends upon the
circumstances and conditions for its payment.
RULING:
As a rule, a bonus is an act of liberality which cannot be demanded as a
matter or right. But a bonus becomes a demandable or enforceable obligation
when it is made part of the wage or salary or compensation of the employee.
Whether or not a bonus forms part of wages depends upon the circumstances
and conditions for its payment. If it is additional compensation which the
employer promised and agreed to give without any conditions instead for its
payment, such as successful business or greater production or output, then it
is of he Where it is not payable to all, but only to some employees and only
when their labor becomes more efficient or productive, its only an inducement
for efficiency, a prize therefore, and not a part of the wage.
104. Marcos vs. NLRC, 248 SCRA 146

FACTS:
Petitioners herein have served respondent Insular for more than 20
years in multiples of five (20-30 years). They were terminated due to
redundancy and thus were given special redundancy benefits. But they were
denied their service awards which was set apart from the redundancy fund.
They were made to sign a quit claim, which they complied, but they still
submitted a letter of protest. They inquired from the DOLE-LS on the validity of
the denial of their service awards, to which DOLE decided in their favor. The
service awards were part of the Employees Manual and was therefore
company policies. The award was earned on the anniversary date. Even if the
employees were separated from service before the anniversary date, they
were still entitled to the material benefits of the award.
However, respondent still refused to pay this. On its 80th anniversary,
the company approved an anniversary equivalent of one-month salary to its
employees. The petitioners alleged that they were entitled to this. The LA
ruled in petitioners favor, but NLRC reversed this, upholding the validity of the
quitclaim they signed voluntarily.
ISSUE:
W/N the quitclaim was invalid and if so, petitioners would be entitled to
their service award.
RULING:
Release and quitclaim invalid, petitioners were entitled to the service
awards. A deed of release or quitclaim cannot bar an employee from
demanding payment to which he is entitled. Quitclaims are against public
policy and are therefore null and void. The Court does not believe that
petitioners signed the Release and Quitclaim voluntarily, as the subsequent
submission of a letter of protest and the inquiry before the NLRC contradicted
their willingness to execute the quitclaim.
The special redundancy package could not have covered the service
awards, and respondents actions stopped it from claiming such. Service
awards are not bonuses. They are stated in the Employees Manual, which is
contractual in nature therefore the law between the parties. It is company
policy and has been in practice by the company.
105. ECOP vs. NWPC, 201 SCRA 759

FACTS:
Petitioners ECOP questioned the validity of the wage order issued by the
RTWPB dated October 23, 1990 pursuant to the authority granted by RA 6727.
The wage order increased the minimum wage by P17.00 daily in the National
Capital Region. The wage order is applied to all workers and employees in the
private sector of an increase of P 17.00 including those who are paid above
the statutory wage rate. ECOP appealed with the NWPC but dismissed the
petition. The Solicitor General in its comment posits that the Board upon the
issuance of the wage order fixed minimum wages according to the salary
method. Petitioners insist that the power of RTWPB was delegated, through RA
6727, to grant minimum wage adjustments and in the absence of authority, it
can only adjust floor wages.
ISSUE:
Is the wage order issued by RTWPB dated October 23, 1990 valid?
RULING:
The Court agrees with the Solicitor General. It noted that there are two
ways in the determination of wage, these are floor wage method and salary
ceiling method. The floor wage method involves the fixing of determinate
amount that would be added to the prevailing statutory minimum wage while
the salary ceiling method involves where the wage adjustment is applied to
employees receiving a certain denominated salary ceiling. RA 6727 gave
statutory standards for fixing the minimum wage. ART. 124. Standards/Criteria
for Minimum Wage Fixing
The regional minimum wages to be established by the Regional Board
shall be as nearly adequate as is economically feasible to maintain the
minimum standards of living necessary for the health, efficiency and general
well-being of the employees within the framework of the national economic
and social development program. In the determination of such regional
minimum wages, the Regional Board shall, among other relevant factors,
consider the following: (a) The demand for living wages; (b) Wage adjustment
vis-a-vis the consumer price index; (c) The cost of living and changes or
increases therein; (d) The needs of workers and their families; (e) The need to
induce industries to invest in the countryside; (f) Improvements in standards of
living; (g) The prevailing wage levels; (h) Fair return of the capital invested and
capacity to pay of employers; (i) Effects of employment generation and family
income; and (j) The equitable distribution of income and wealth along the
imperatives of economic and social development." The wage order was not
acted in excess of boards authority. The law gave reasonable limitations to the
delegated power of the board.
106. Alpha Investigation & Security Agency vs. NLRC, 272 SCRA 653
FACTS:
AISA is a private corporation engaged in providing security
services and the Don Mariano Marcos State University is their client. The
private respondents were as security guards by ASIA for DMMSU. Five months
after, private respondents filed a complaint against AISA and then included
DMMSU for non compliance with the current minimum wage order. The
agreement was that they will be paid 1,200php every month but was only paid
900php as their monthly salary. AISA made representations for an increase in
the contract rates to make up for the mandated minimum wage rates.
DMMSU replied that it cannot grant said request due to budgetary
constraints. The Labor Arbiter rendered a decision finding AISA and DMMSU
solidarily liable and ordering
them to pay each of the
complainant
Php41,459.51 representing salary differential from Feb 16, 1990-Sept 30,
1991. NLRC affirmed this decision. Only AISA filed a motion for reconsideration
but was denied by the NLRC. The judgment against DMMSU is final and
executor since no motion for certiorari was filed while AISA filed a motion to
the SC.
AISA argues that the payment of wage increases under the current
minimum wage order should be borne exclusively by DMMSU citing Section 6
of RA 6727 which states that In case of contracts for construction projects
and security...the prescribed increases in the wage rates of the workers shall
be borne by the principals or clients... Articles 106, 107 and 109 generally
refer to the failure of the contract or sub-contractor to pay wages in
accordance with the labor code with a mandate that failure to pay such wages
would make the employer and contractor jointly and severally liable. AISA
insists that the matter involved in this case hinges on wage differentials or
wage increase not wages in general as provided by the Labor Code.
NLRC cited Articles 106, 107 and 109 of the Labor Code. Article 106
states that,...In the event the contractor or sub contractor fails to
pay
the
pages
of
his employees in accordance with this Code, the
employer shall be jointly and severally liable with his contractor or subcontractor... Article 107 states that, The provisions shall apply to any person,
partnership, corporation, which not being an employer, contracts with an
independent contractor for the performance of any work, task , job or project.108: every employer or indirect employer shall be held responsible with his
contractor or sub-contractor for any violation of any provision of this Code.
ISSUE:
Whether or not AISA was solidarily liable with DMMSU
RULING:
Yes. Wage orders cannot be waived since it is mandatory and statutory.
AISA cannot escape liability since the law provides for a joint and
solidary
liability
of
the
principal
(DMMSU)
and
the contractor
(AISA).Section 6 of RA 6727 merely provides that in the case of wage increase
resulting in a salary differential, the liability of the principal and contractor
shall be joint and several. Same goes with the liability attached in Articles 106,
107 and 109 which refer to the standard minimum wage.
107. Ilaw at Buklod ng Manggagawa vs. NLRC et. al., 198 SCRA 586
FACTS:
IBM representing 4500 employees of SMC working at various plants,
offices and warehouses in NCR presented to the company a demand for
correction of the significant distortion in the workers wages pursuant to the
Wage Rationalization Act. Demand unheeded by company hence the union
members refused to render overtime services until the distortion has been
corrected by SMC. It appears that the employees working hours/schedule has
been freely observed by the employees for the past 5 years and due to the
abandonment of the longstanding schedule of work and reversion to the eighthour shift substantial losses were incurred by SMC. SMC filed a complaint with
arbitration branch of NLRC then before the NLRC for the latter to declare the
strike illegal. Unions contention: workers refusal to work beyond 8 hours was
a legitimate means of compelling SMC to correct distortion.
Per SMC, the coordinated reduction by the Unions members of the work
time in order to compel SMC to yield to the demand was an illegal and
unprotected activity.
ISSUE:
Whether or not the strike was legal
RULING:
It was illegal. The strike invoking the issue of wage distortion is illegal.
The legality of these activities depends on the legality of the purposes sought
to be attained. These joint or coordinated activities may be forbidden or
restricted by law or contract.
The legislative intent that solution of the problem of wage distortions
shall be sought by voluntary negotiation or arbitration, and not by strikes,
lockouts, or other concerted activities of the employees or management, is
made clear in the rules implementing RA 6727 issued by the Secretary of
Labor and Employment pursuant to the authority granted by Section 13 of the
Act. Section 16, Chapter I of these implementing rules, after reiterating the
policy that wage distortions be first settled voluntarily by the parties and
eventually by compulsory arbitration, declares that, Any issue involving wage
distortion shall not be a ground for a strike/lockout.
Moreover, the collective bargaining agreement between the SMC and
the Union, relevant provisions of which are quoted by the former without the
latters demurring to the accuracy of the quotation, also prescribes a similar
eschewal of strikes or other similar or related concerted activities as a mode of
resolving disputes or controversies, generally, said agreement clearly stating
that settlement of all disputes, disagreements or controversies of any kind
should be achieved by the stipulated grievance procedure and ultimately by
arbitration.
108. Eagle Security Agency vs. NLRC, 173 SCRA 479

FACTS:
Employees of Eagle Security Agency, security guards in the Philippine
Tuberculosis Society, Inc., filed a complaint against ESA and PTSI for unpaid
wage increases granted under four wage orders. PTSI alleged that the wage
increases should be borne exclusively by ESA, pursuant to the provision in
their contract, while the latter contended that, under the wage orders, the
former should be held liable forthe same.
ISSUE:
Whether or not ESA and PTSI should be jointly and severally liable for
the wage increases
RULING:
YES. The joint and several liability of the contractor and the principal is
mandated by the Labor Code to assure compliance of the provisions therein
includingthe statutory minimum wage. The contractor is made liable by virtue
of his status as direct employer. The principal, on the other hand, is made the
indirect employer of the contractor's employees for purposes of paying the
employees their wages should the contractor be unable to pay them. The
solidary liability, however, does not preclude the right of reimbursement from
the co-debtor by the one who paid.
109. Mindanao Terminal & Brokerage Services Inc. vs. RoldanConfesor, 272 SCRA 161
FACTS:
Petitioner the Company and respondent the Union entered into a CBA for
a period of five years. The period was August 31, 1989 to July 31, 1994. On
August 1, 1992, parties met to renegotiate CBA provisions for the fourth and
fifth years. A deadlock between the parties followed. Deadlock is a state of
inaction resulting from opposition or lack of compromise. It is a standstill
resulting from the opposition of two unrelenting forces or factions
(defnitions.uslegal.com). On November 12, Notice of deadlock for the following
issues was sent: wages, vacation leave, sick leave, hospitalization, optional
retirement, 13th month pay and signing bonus. On November 18, the
company announces retrenchment program (A strategy used by corporations
to reduce the diversity or the overall size of the operations of the company from businessdictionary.com). On December 3, Union filed notice of strike with
the National Conciliation and Mediation Board (NCMB). On December 18, both
parties re-bargained for the following agreed provisions: wage increase,
vacation and sick leaves, hospitalization, 13th month pay, signing bonus, and
seniority. Retirement was not resolved until another meeting with the NCMB on
Jan. 14, 1993. Notice of strike and its issues are dissolved as a result. On Jan.
28, 1993, Union again filed a notice of strike resulting from issues regarding
retroactivity and creditability in compliance with future mandated wage
increases. On March 7, Union staged the strike itself. On March 9, the
Company demanded that Labor Secretary Nieves Confesor assume jurisdiction
over the case. As NCMB's attempt to resolve the issue proved futile, the board
handed the conflict resolution over to Labor Secretary Confesor. Secretary of
Labor issued an Order for both parties to incorporate all improved provisions
which were results from the course of their renegotiations. Company sought
reconsideration for May 14 order. Motion is denied for lack of merit by
Confesor on July 7.
ISSUE:
Whether or not there is a perfected contract between the two parties
RULING:
Yes. The signing of the CBA does not determine whether the agreement
was entered into within the 6 month period from the date of expiration of the
old CBA. In the present case, there was already a meeting of the minds
between the company and the union prior to the end of the 6 month period
after the expiration of the old CBA. Hence, such meeting of the mind is
sufficient to conclude that an agreement has been reached within the 6 month
period as provided under Art. 253A of th
110. C. Plans Commercial et. al., vs. NLRC, Feb. 11, 1999
FACTS:
In September 1993, Morente, Allauigan and Ofialda and others filed a
complaint for underpayment of wages, nonpayment of overtime pay, holiday
pay, service incentive leave pay, and premium pay for rest day and holiday
and night shift differential against petitioners in the Arbitration Branch of
NLRC. It alleged that Cohu is engaged in the business of wholesale of plastic
products and fruits of different kinds with more than 24 employees.
Respondents were hired on January 1990, May 1990 and July 19991 as
laborers and were paid below the minimum wage for the past 3 years. They
were required to work for more than 8 hours a day and never enjoyed the
minimum benefits. Petitioners filed their comment stating that the
respondents were their helpers. The Labor Arbiter rendered a decision
dismissing the money claims. Respondents filed an appeal with the NLRC
where it granted the money claims. Petitioners appealed with the CA but it
was denied. It said that the company having claimed of exemption of the
coverage of the minimum wage shall have the burden of proof to the claim.
Petitioners insist that C. Planas Commercial is a retail establishment principally
engaged in the sale of plastic products and fruits to the customers for personal
use, thus exempted from the application of the minimum wage law; that it
merely leases and occupies a stall in the Divisoria Market and the level of its
business activity requires and sustains only less than ten employees at a time.
Petitioners contend that private respondents were paid over and above the
minimum wage required for a retail establishment, thus the Labor Arbiter is
correct in ruling that private respondents claim for underpayment has no
factual and legal basis. Petitioners claim that since private respondents
alleged that petitioners employed 24 workers, it was incumbent upon them to
prove such allegation which private respondents failed to do.
ISSUE:
Whether or not petitioner is exempted from the application of minimum
wage law
RULING:
No. Petitioners have not successfully shown that they had applied for the
exemption. R.A. No. 6727 known as the Wage Rationalization Act provides for
the statutory minimum wage rate of all workers and employees in the private
sector. Section 4 of the Act provides for exemption from the coverage, thus:
Sec. 4. (c) Exempted from the provisions of this Act are household or domestic
helpers and persons employed in the personal service of another, including
family drivers. Also, retail/service establishments regularly employing not
more than ten (10) workers may be exempted from the applicability of this Act
upon application with and as determined by the appropriate Regional Board in
accordance with the applicable rules and regulations issued by the
Commission. Whenever an application for exemption has been duly filed with
the appropriate Regional Board, action on any complaint for alleged noncompliance with this Act shall be deferred pending resolution of the application
for exemption by the appropriate Regional Board. In the event that
applications for exemptions are not granted, employees shall receive the
appropriate compensation due them as provided for by this Act plus interest of
one percent (1%) per month retroactive to the effectivity of this Act.
111. Ems Manpower & Placement Services vs. NLRC, July 24, 1997
FACTS:
Luisa G. Manuel was hired as a domestic helper in Hong Kong by
Deborah Li Siu Yee. Her contract was for two years, but stayed for only two
months because she was dismissed and repatriated to the Philippines after
she made repeated demands for her rights under the employment contract.
Luisa filed a complaint with POEA for illegal dismissal.
ISSUE:
Was Manuel illegally dismissed?
RULING:
Yes. There was illegal dismissal in the case at bar although Yee
adequately complied with the employment contract. Said contract is not in
conformity with our laws in as much as it failed to stipulate the "just causes for
the termination of the contract or of the service of the workers," as mandated
by Section 14(e), Rule V, Book I of the Omnibus Rules Implementing the Labor
Code.

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NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

1. Bulletin Publishing Corp. vs Sanchez, 144 SCRA 628

2. Kap. Manggagawa ng Camara Shoes vs. Camara Shoes, 111 SCRA

3. Victoriano vs. Elizalde Rope Workers Union, 59 SCRA 54

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

4. Juat vs. CIR, 15 SCRA 395

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

5. Milar vs. Inciong, 121 SCRA 444

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

6. San Miguel Corp. vs. NLRC, 209 SCRA 632

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

7. Manila Mandarin Employee Union vs. NLRC, 154 SCRA 368

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

across-the-board increases to all employees; increases were required only as

8. Sanyo vs. Canizares, 211 SCRA 361

NDU-LAW | LABOR STANDARDS | CASE DIGEST | 2A SY.2016-2017

9. Salaw vs. NLRC. 202 SCRA 7

TDLU and demanded that TDI terminate the employment of private,

11. Pantranco vs. Public Service Commission, 70 Phil. 221

12. Abe vs. Foster Wheeler Corp., 110 Phil. 221

ordered to return to work; that the defendants (petitioners herein) be ordered

16. Bangasilan vs. CA, July 31, 1997

On September 17, 1990, the Secretary of the Department of Education,

illegal recruitment business by contributing acts in pursuance of the financial

20. Rase vs. NLRC, 327 SCRA 523

21. Kiaveness Maritime Agency vs. Palmos, 232 SCRA 448

22. Rances vs. NLRC, 246 SCRA 250

23. Alindao vs. Joson, 264 SCRA 211

24. Cadalin vs. POEA, 238 SCRA 721

be equivalent to the compensation therein agree, another part of the same

compromise settlements of their respective claims. The claimants who worked

25. Catan vs. NLRC, 160 SCRA 691

27. Llobera vs. NLRC, 162 SCRA 788

28. Eastern Shipping Lines vs. POEA, 166 vs. 533

money claims, involving employee-employer relations arising out of or by

30. Facilities Management Corporation vs. de la Cruz, 89 SCRA 131

Whether the mere act by a non-resident foreign corporation of recruiting

31. del Rosario vs. NLRC, 187 SCRA 777

32. Capricorn Intl Burs vs CA, 184 SCRA 123

33. Stronghold Insurance vs. CA, 205 SCRA 605

workers are violated by their employers, recourse would still be available to

35. Eagle Constructions Corporation vs. Gayda, 186 SCRA 589

36. People vs. Coronacion, 237 SCRA 227

37. People vs. Comia, 236 SCRA 185

sentence[d] to a penalty of LIFE IMPRISONMENT and a fine of P100,000.00 and

38. People vs. Sendon, 228 SCRA 489

39. People vs. Bodozo, 215 SCRA 33

fact, it is worse. To be trafficked as a prostitute without ones consent and to be

40. Flores vs. People, 211 SCRA 662

YES. Petition for certiorari was granted. Orders denying Motion to

41. People vs. Manugas Jr., 231 SCRA 1

42. People vs. Goce, 247 SCRA 780

illegal recruitment and placement under Article 13 in relation to Article 34 of

43. People vs. Avendao, 216 SCRA 187

Renato M. Soriano, to illegally recruit some 38 persons for overseas

44. Aquino vs. CA, 204 SCRA240

There are relevant factual circumstances which the Court of Appeals

45. Roxas Surveying Co. vs. NLRC, 125 SCRA 36

46. Nitto Enterprises vs. NLRC, 248 SCRA 651

47. Bernardo vs. NLRC, et. al., 310 SCRA 166

Basiao thereafter filed with the then Ministry of Labor a complaint