Labor Law 1
ISSUE
7.05 CASUAL EMPLOYEES
NATURE OF WORK
A.M. ORETA & CO INC V NLRC (GRULLA)
[PAGE 88]
ONE YEAR SERVICE
KIMBERLY INDEPENDENT LABOR UNION V DRILON
185 SCRA 190
REGALADO; May 9, 1990
FACTS
- Kimberly-Clark Philippines, Inc. (KIMBERLY) executed a three-
year collective bargaining agreement (CBA) with United
Kimberly-Clark Employees Union-Philippine Transport and
General Workers' Organization (UKCEUPTGWO) which expired
on June 30, 1986.
- Within the 60-day freedom period prior to the expiration of
and during the negotiations for the renewal of the
aforementioned CBA, some members of the bargaining unit
formed another union called "Kimberly Independent Labor
Union for Solidarity, Activism and Nationalism-Organized Labor
Association in Line Industries and Agriculture (KILUSAN-OLALIA)
- April 21, 1986, KILUSAN-OLALIA filed a petition for certification
election. KIMBERLY and UKCEU-PTGWO did not object to the
holding of a certification election but objected to the inclusion of
the so-called contractual workers whose employment with
KIMBERLY was coursed through an independent contractor,
Rank Manpower Company (RANK, for short), as among the
qualified voters.
- On June 2, 1986, Med-Arbiter Bonifacio I. Marasigan, who was
handling the certification election case issued an order
declaring the following as eligible to vote in the certification
election, thus:
1) regular rank-and-file laborers/employees of the respondent
company; 2) casuals who have worked at least six (6) months;
3) Contractual employees who are allegedly in the employ of an
independent contractor and who have also worked for at least
six (6) months
- During the pre-election conference, 64 casual workers were
challenged by KIMBERLY and UKCEU-PTGWO on the ground that
they are not employees of KIMBERLY but of RANK. It was agreed
by all the parties that the 64 voters shall be allowed to cast
their votes but that their ballots shall be segregated and subject
to challenge proceedings.
- After the elections, UKCEU-PTGWO won over KILUSAN-OLALIA
by 20 votes. This count considered the votes of the 64
employees as separate.
- In a case regarding the status of the 64 employees in relation
to the certification election, it was held by med-arbiter Sanchez
that:
“…2)The other casual employees not performing janitorial
and yard maintenance services were deemed labor-only
contractuals and since labor-only contracting is prohibited,
such employees were held to have attained the status of
regular employees, the regularization being effective as of
the date of the decision;
3. UKCEU-PTGWO, having garnered more votes than
KILUSAN-OLALIA, was certified as the exclusive bargaining
representative of KlMBERLY's employees;…”
- Since the members were only considered regular at the time
of the decision, their votes were not re-considered as regards
the election.
- winning union and company executed a CBA
- KIMBERLY-OLALIA filed for a TRO on the CBA and included the
question of the status of the 64 members in question.
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WON the 64 employees were regular employees at the time of
the certification election
HELD
YES
- A280LC provides for two kinds of regular employees: (1) those
who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the
employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the
activity in which they are employed
- The individual petitioners herein who have been adjudged to
be regular employees (by law) fall under the second category.
These are the mechanics, electricians, machinists, machine
shop helpers, warehouse helpers, painters, carpenters,
pipefitters and masons. It is not disputed that these workers
have been in the employ of KIMBERLY for more than one year at
the time of the filing of the petition for certification election by
KILUSAN-OLALIA.
- While the actual regularization of these employees entails the
mechanical act of issuing regular appointment papers and
compliance with such other operating procedures as may be
adopted by the employer, it is more in keeping with the intent
and spirit of the law to rule that the status of regular
employment attaches to the casual worker on the day
immediately after the end of his first year of service
- The law is explicit. As long as the employee has rendered at
least one year of service, he becomes a regular employee with
respect to the activity in which he is employed. The law does
not provide the qualification that the employee must first be
issued a regular appointment or must first be formally declared
as such before he can acquire a regular status. Obviously,
where the law does not distinguish, no distinction should be
drawn.
- On the basis of the foregoing circumstances, and as a
consequence of their status as regular employees, those
workers not perforce janitorial and yard maintenance service
were performance entitled to the payment of salary differential,
cost of living allowance, 13th month pay, and such other
benefits extended to regular employees under the CBA, from
the day immediately following their first year of service in the
company.
-These regular employees are likewise entitled to vote in the
certification election held in July 1, 1986. Consequently, the
votes cast by those employees not performing janitorial and
yard maintenance service, which forms part of the 64
challenged votes, should be opened, counted and considered
for the purpose of determining the certified bargaining
representative.
SAN MIGUEL CORP V ABELLA
[PAGE 59]
INTEGRATED CONTRACTOR V NLRC (SOLON)
464 SCRA 265
QUISUMBING; August 9, 2005
NATURE
Appeal from a decision of the CA affirming the NLRC’s findings
which declared respondent Solon a regular employee of the
petitioner and awarded him with 13th month pay, service
incentive leave pay, reinstatement to his former position with
full backwages from the time his salary was withheld until his
reinstatement.
FACTS
- Petitioner is a plumbing contractor. Its business depends on
the number and frequency of the projects it is able to contract
with its clients.
- Respondent Solon worked for petitioner several months at a
time from 1994 to 1998.
Labor Law 1
- On Feb. 1998, while Solon was about to log out from work, he
was informed that it was his last day of work as he had been
terminated. He went back to petitioner’s office to sign a
clearance so he could claim his 13th month pay and tax refunds.
However, he refused to sign when he read the clearance
indicating that he had resigned. He then filed a complaint for
illegal dismissal without due cause and due process.
- The Labor Arbiter ruled that Solon was a regular employee
and could only be removed for cause. NLRC affirmed with only a
modification as to the computation of 13th month pay. CA also
affirmed.
ISSUE
WON respondent is a regular employee
HELD
YES
Ratio The test to determine whether employment is regular or
not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or
trade of the employer. Also, if the employee has been
performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law
deems the repeated and continuing need for its performance as
sufficient evidence of the necessity, if not indispensability of
that activity to the business. (De Leon v NLRC)
Reasoning
- While length of time may not be the controlling test for project
employment, it is vital in determining if the employee was hired
for a specific undertaking or tasked to perform functions vital,
necessary and indispensable to the usual business or trade of
the employer. Here, private respondent had been a project
employee several times over. His employment ceased to be
coterminous with specific projects when he was repeatedly re-
hired due to the demands of petitioner’s business.
Disposition assailed Decision dated October 30, 2001 and the
Resolution dated February 28, 2002 of CA are AFFIRMED with
MODIFICATION. The petitioner id hereby ORDERED to (1)
reinstate the respondent with no loss of seniority rights and
other privileges; and (2) pay respondent his backwages, 13th
month pay for the year 1998 and Service Incentive Leave Pay
computed from the date of his illegal dismissal up to the date of
his actual reinstatement.
7.06 CONTRACT – FIXED PERIOD
TESTS VALIDITY
BRENT SCHOOL V ZAMORA
181 SCRA 702
NARVASA; February 5, 1990
NATURE
Appeal from judgment
FACTS
- Alegre was athletic director at Brent, at a yearly compensation
of P20,000. Her contract fixed a specific term of 5 years for its
existence, from July, 1971, to July, 1976. Subsequent subsidiary
agreements in March 1973, August 1973, and Sept. 1974
reiterated the same terms and conditions, including the expiry
date, as those contained in the original contract of July, 1971.
- 3 months before the expiration of the stipulated period, in
April 1976, Alegre was given a copy of the report filed by Brent
with the Dep. Of Labor advising of the termination of his
services, effective July 16, 1976. The stated ground for
termination was “completion of contract, expiration of the
definite period of employment.”
- Alegre protested the announced termination of his
employment. He argued that although his contract did stipulate
that the same would terminate on July 17, 1976, since his
A2010 - 94 - Disini
services were necessary and desirable in the usual business of
his employer, and his employment had lasted for five years, he
had acquired the status of regular employee and could not be
removed except for valid cause.
- The employment contract of 1971 was executed when the
Labor Code of the Philippines had not yet been promulgated,
which came into effect some 3 years after the perfection of the
contract.
ISSUE
WON the provisions of the Labor Code (regarding
probationary/regular employees) have anathematized “fixed
period employment” or employment for a term
HELD
NO
Reasoning
- Before the Labor Code, there was no doubt about the validity
of term employment. It was impliedly but clearly recognized by
the Termination Pay law, RA 10521
- The Civil Code, which has always recognized, and continues
to recognize, the validity and propriety of contracts and
obligations with a fixed or definite period, and imposes no
restraints on the freedom of the parties to fix the duration of a
contract, whatever its object, be it specie, goods or services,
except the general admonition against stipulations contrary to
law, morals, good customs, public order or public policy. Under
the Civil Code, therefore, and as a general proposition, fixed-
term employment contracts are not limited, as they are under
the present Labor Code, to those by nature seasonal or for
specific projects with pre-determined dates of completion; they
also include those to which the parties by free choice have
assigned a specific date of termination.
-(there’s a long, long history about the changes of provisions in
the labor code, showing how fixed period employment became
less and less acceptable...)
- Where from the circumstances it is apparent that periods have
been imposed to preclude acquisition of tenurial security by the
employee, they should be struck down or disregarded as
contrary to public policy, morals, etc.
- But where no such intent to circumvent the law is shown,
where the reason for the law does not exist, e.g., where it is
indeed the employee himself who insists upon a period or
where the nature of the engagement is such that, without being
seasonal or for a specific project, a definite date of termination
is a sine qua non, would an agreement fixing a period be
essentially evil or illicit, therefore anathema? Would such an
agreement come within the scope of Article 2802 which
1
In cases of employment, without a definite period, in a commercial, industrial, or
agricultural establishment or enterprise, the employer or the employee may
terminate at any time the employment with just cause; or without just cause in the
case of an employee by serving written notice on the employer at least one month in
advance, or in the case of an employer, by serving such notice to the employee at
least one month in advance or one-half month for every year of service of the
employee, whichever is longer, a fraction of at least six months being considered as
one whole year.
The employer, upon whom no such notice was served in case of termination of
employment without just cause, may hold the employee liable for damages.
The employee, upon whom no such notice was served in case of termination of
employment without just cause, shall be entitled to compensation from the date of
termination of his employment in an amount equivalent to his salaries or wages
corresponding to the required period of notice.
2
Art. 280. Regular and casual employment. The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged
to perform activities which are usually necessary or desirable in the usual business or
trade of the employer, except where the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined
at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the
season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Labor Law 1
admittedly was enacted "to prevent the circumvention of the
right of the employee to be secured in (his) employment?"
- A280LC, under a narrow and literal interpretation would
appear to restrict, without reasonable distinctions, the right of
an employee to freely stipulate with his employer the duration
of his engagement, it logically follows that such a literal
interpretation should be eschewed or avoided. The law must be
given a reasonable interpretation, to preclude absurdity in its
application. Outlawing the whole concept of term employment
and subverting to boot the principle of freedom of contract to
remedy the evil of employer's using it as a means to prevent
their employees from obtaining security of tenure is like cutting
off the nose to spite the face or, more relevantly, curing a
headache by lopping off the head.
- Familiar examples of employment contracts which may be
neither for seasonal work nor for specific projects, but to which
a fixed term is essential: overseas employment contracts to
which, the concept of regular employment will all that it implies
does not appear ever to have been applied, Article 280 of the
Labor Code not withstanding; appointments to the positions of
dean, assistant dean, college secretary, principal, and other
administrative offices in educational institutions, which are by
practice or tradition rotated among the faculty members, and
where fixed terms are a necessity, without which no reasonable
rotation would be possible. Despite the provisions of Article 280,
Policy, Instructions No. 8 of the Minister of Labor implicitly
recognize that certain company officials may be elected for
what would amount to fixed periods, at the expiration of which
they would have to stand down, in providing that these
officials," . . . may lose their jobs as president, executive vice-
president or vice-president, etc. because the stockholders or
the board of directors for one reason or another did not re-elect
them."
- Since the entire purpose behind the development of legislation
culminating in the present Article 280 of the Labor Code clearly
appears to have been to prevent circumvention of the
employee's right to be secure in his tenure, the clause in said
article indiscriminately and completely ruling out all written or
oral agreements conflicting with the concept of regular
employment as defined therein should be construed to refer to
the substantive evil that the Code itself has singled out:
agreements entered into precisely to circumvent security of
tenure. It should have no application to instances where a fixed
period of employment was agreed upon knowingly and
voluntarily by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent
any other circumstances vitiating his consent, or where it
satisfactorily appears that the employer and employee dealt
with each other on more or less equal terms with no moral
dominance whatever being exercised by the former over the
latter. Unless thus limited in its purview, the law would be made
to apply to purposes other than those explicitly stated by its
framers; it thus becomes pointless and arbitrary, unjust in its
effects and apt to lead to absurd and unintended
consequences.
Disposition the public respondent's Decision complained of is
REVERSED and SET ASIDE. Respondent Alegre's contract of
employment with Brent School having lawfully terminated with
and by reason of the expiration of the agreed term of period
thereof, he is declared not entitled to reinstatement and the
other relief awarded and confirmed on appeal in the
proceedings below.
CIELO V NLRC
MILLARES V NLRC (TRANS-GLOBAL MARITIME
AGENCY, ESSO INTERNATIONAL SHIPPING
COMPANY)
[PAGE 79]
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VIERNES V NLRC (BENGUET ELECTRIC COOP)
400 SCRA 557
AUSTRIA-MARTINEZ; April 4, 2003
FACTS
- The 15 complainants’ services were contracted as meter
readers by Benguet Electric Cooperative (BENECO) for less than
a month’s duration from October 8 to 31, 1990. Their
employment contracts, couched in identical terms, read:
You are hereby appointed as METER READER (APPRENTICE)
under BENECO-NEA Management with compensation at the
rate of SIXTY-SIX PESOS AND SEVENTY-FIVE CENTAVOS
(P66.75) per day from October 08 to 31, 1990.
- The said term notwithstanding, the complainants were allowed
to work beyond October 31, 1990, or until January 2, 1991. On
January 3, 1991, they were each served their identical notices
of termination dated December 29, 1990. The same read:
Please be informed that effective at the close of office hours of
December 31, 1990, your services with the BENECO will be
terminated. Your termination has nothing to do with your
performance. Rather, it is because we have to retrench on
personnel as we are already overstaffed.
- The complainants filed separate complaints for illegal
dismissal. It is the contention of the complainants that they
were not apprentices but regular employees whose services
were illegally and unjustly terminated in a manner that was
whimsical and capricious. On the other hand, the respondent
invokes Article 283 of the Labor Code in defense of the
questioned dismissal.
- The Labor Arbiter dismissed the complaints for illegal
dismissal but directed BENECO to extend the contract of each
complainant, with the exception of Viernes who was ordered to
be appointed as regular employee, a month’s salary as
indemnity for failure to give the 30-day notice, and backwages.
- The NLRC declared the complainants’ dismissal illegal, thus
ordering their reinstatement to their former position as meter
readers or to any equivalent position with payment of
backwages limited to one year but deleting the award of
indemnity and attorney’s fees. The award of underpayment of
wages was affirmed.
ISSUES
1. WON the NLRC committed grave abuse of discretion in
ordering the reinstatement of petitioners to their former
position as meter readers on probationary status in spite of its
finding that they are regular employees under Article 280 of the
Labor Code
2. WON the NLRC committed grave abuse of discretion in
limiting the backwages of petitioners to one year only in spite of
its finding that they were illegally dismissed, which is contrary
to the mandate of full backwages until actual reinstatement but
not to exceed 3 years
3. WON the NLRC committed grave abuse of discretion in
deleting the award of indemnity pay which had become final
because it was not appealed and in deleting the award of
attorney’s fees because of the absence of a trial-type hearing
4. WON the mandate of immediately executory on the
reinstatement aspect even pending appeal as provided in the
decision of Labor Arbiters equally applies in the decision of the
NLRC even pending appeal, by means of a motion for
reconsideration of the order reinstating a dismissed employee
or pending appeal because the case is elevated on certiorari
before the Supreme Court
HELD
1. YES
Ratio There are two separate instances whereby it can be
determined that an employment is regular: (1) The particular
activity performed by the employee is necessary or desirable in
Labor Law 1
the usual business or trade of the employer; or (2) if the
employee has been performing the job for at least a year.
Reasoning
- Petitioners fall under the first category. They were engaged to
perform activities that are necessary to the usual business of
BENECO. We agree with the labor arbiter’s pronouncement that
the job of a meter reader is necessary to the business of
BENECO because unless a meter reader records the electric
consumption of the subscribing public, there could not be a
valid basis for billing the customers. The fact that the
petitioners were allowed to continue working after the
expiration of their employment contract is evidence of the
necessity and desirability of their service to BENECO’s business.
In addition, during the preliminary hearing of the case on
February 4, 1991, BENECO even offered to enter into another
temporary employment contract with petitioners. This only
proves BENECO’s need for the services of the petitioners. With
the continuation of their employment beyond the original term,
petitioners have become full-fledged regular employees. The
fact alone that the petitioners have rendered service for a
period of less than 6 months does not make their employment
status as probationary.
- The principle [exception to the rule in Ratio] enunciated in
Brent School vs. Zamora applies only with respect to fixed term
employments. While it is true that petitioners were initially
employed on a fixed term basis as their employment contracts
were only for October 8 to 31, 1990, after October 31, 1990,
they were allowed to continue working in the same capacity as
meter readers without the benefit of a new contract or
agreement or without the term of their employment being fixed
anew. After October 31, 1990, the employment of petitioners is
no longer on a fixed term basis. The complexion of the
employment relationship of petitioners and BENECO is thereby
totally changed. Petitioners have attained the status of regular
employees.
2. YES
Reasoning
- A279 LC, as amended by RA 6715 [effective March 21, 1989],
provides that an illegally dismissed employee is entitled to full
back wages, inclusive of allowances, 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. Since petitioners were employed on
October 8, 1990, the amended provision shall apply to the
present case. Hence, it was patently erroneous, tantamount to
grave abuse of discretion on the part of the NLRC in limiting to
one year the back wages awarded to petitioners.
3. YES
Ratio An employer becomes liable to pay indemnity to an
employee who has been dismissed if, in effecting such
dismissal, the employer fails to comply with the requirements of
due process
Reasoning
- The indemnity is in the form of nominal damages intended not
to penalize the employer but to vindicate or recognize the
employee’s right to procedural due process which was violated
by the employer. Under A2221 CC, nominal damages are
adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.
- Indemnity is not incompatible with the award of back wages.
These two awards are based on different considerations. Back
wages are granted on grounds of equity to workers for earnings
lost due to their illegal dismissal from work. On the other hand,
the award of indemnity is meant to vindicate or recognize the
right of an employee to due process which has been violated by
the employer. In this case, BENECO failed to comply with the
provisions of Article 283 of the Labor Code which requires an
employer to serve a notice of dismissal upon the employees
and to the Department of Labor, at least one month before the
intended date of termination. As to the award of attorney’s
fees, the same is justified by the provisions of Article 111 of the
Labor Code.
A2010 - 96 - Disini
4. YES
Reasoning
- A223 LC is plain and clear that the decision of the NLRC shall
be final and executory after 10 calendar days from receipt by
the parties. In addition, Section 2(b), Rule VIII of the New Rules
of Procedure of the NLRC provides that “should there be a
motion for reconsideration entertained pursuant to Section 14,
Rule VII of these Rules, the decision shall be executory after 10
calendar days from receipt of the resolution on such motion.”
We find nothing inconsistent or contradictory between the two.
The provision of the NLRC Rules of Procedure merely provides
for situations where a motion for reconsideration is filed. Since
the Rules allow the filing of a motion for reconsideration of a
decision of the NLRC, it simply follows that the ten-day period
provided under Article 223 of the Labor Code should be
reckoned from the date of receipt by the parties of the
resolution on such motion. In the case at bar, petitioners
received the resolution of the NLRC denying their motion for
reconsideration on October 22, 1992. Hence, it is on November
2, 1992 that the questioned decision became executory.
Disposition Petition PARTLY GRANTED. Decision of the NLRC
is MODIFIED. BENECO is ordered to reinstate petitioners to their
former or substantially equivalent position as regular
employees, without loss of seniority rights and other privileges,
with full back wages from the time of their dismissal until they
are actually reinstated. The indemnity to petitioners is
REINSTATED. BENECO is also ordered to pay attorney’s fees in
the amount of 10% of the total monetary award due to the
petitioners. In all other respects the assailed decision and
resolution are AFFIRMED.
PHILIPS SEMICONDUCTORS V FADRIQUELA
[PAGE 77]
PANGILINAN V GENERAL MILLING CORPORATION
[PAGE 74]
SEASONAL EMPLOYEES
MAGCALAS V NLRC (KOPPEL INC)
269 SCRA 453
PANGANIBAN; March 13, 1997
NATURE
Appeal from decision of the NLRC
FACTS
- Complainants alleged that they were all regular employees of
the respondent company, having rendered continuous services
in various capacities, ranging from leadman, tinsmith,
tradeshelper to general clerk.
- The complainants have worked for a number of years, the
minimum of which was 1.5 years and the maximum was 8 years
under several supervisors.
- August 30, 1988: they were dismissed without prior notice and
investigation, and that their dismissals were effected for no
other cause than their persistent demands for payment of
money claims as mandated by law.
- Respondent company averred that the manufacturing aspect
of its operation is handled by its regular employees, while the
installation aspect, by reason of its intermittence, is carried out
by its project or contract employees.
Labor Law 1
- The complainants herein were among the contract employees
hired by the respondent to install the air-conditioning
equipment at the ADB and Interbank projects.
- With the completion of their task in their respective projects,
the employment of the complainants expired as they had no
more work to do.
- Labor arbiter ordered petitioners to be reinstated and to be
paid backwages from the time of their dismissal/termination to
their actual reinstatement.
- NLRC reversed decision and ordered respondent to pay the
petitioners their separation pay.
ISSUES
1. WON petitioners were regular workers under the
contemplation of A280 LC
2. WON petitioners' termination and/or cessation of their
employments on August 30, 1988 were justified under the
contemplation of A279 of the LC as amended.
HELD
1. YES
Ratio The services of project employees are co-terminous with
the project and may be terminated upon the end or completion
of the project for which they were hired. Regular employees, in
contrast, are legally entitled to remain in the service of their
employer until that service is terminated by one or another of
the recognized modes of termination of service under the Labor
Code.
Reasoning
- A mere provision in the CBA recognizing contract employment
does not sufficiently establish that petitioners were ipso facto
contractual or project employees. In the same vein, the
invocation of Policy No. 20 governing the employment of project
employees in the construction industry does not, by itself,
automatically classify private respondent as part of the
construction industry and entitle it to dismiss petitioners at the
end of each project. These facts cannot be presumed; they
must be supported by substantial evidence
- The record discloses that the complainants worked not only in
one special project but also variably in other projects/jobsites
contracted by Koppel Incorporated. Some of them, after their
tour of duty on these different jobsites were reassigned to the
respondent's plant at Koppel Compound, Parañaque, Metro
Manila. A close examination of the record further reveals that
the "special projects" at the ADB and Interbank to which the
complainants were last assigned by the respondent were still in
operation before their alleged termination from employment.
Under these factual milieu, we believe that they had been
engaged to work and perform activities which were necessary
and desirable in the air-conditioning and refrigeration
installation/repair business of the respondent employer,
especially where, as in this case, the very nature of such trade
indicates that it can hardly fall under the exception of Policy
Instruction No. 20 which applies only to the construction
industry. For this reason, and considering the facts narrated in
the complainants' sworn statements were neither disputed nor
refuted by contrary evidence by the respondent, it becomes
apparent and increasingly clear that indeed they would and
ought to be classified as regular employees.
- Regular employees cannot at the same time be project
employees. Article 280 of the Labor Code states that regular
employees are those whose work is necessary or desirable to
the usual business of the employer. The two exceptions
following the general description of regular employees refer to
either project or seasonal employees
- In the realm of business and industry, we note that "project"
could refer to one or the other of at least two distinguishable
types of activities. Firstly, a project could refer to particular job
or undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and
identifiable as such, from the other undertakings of the
company. Such job or undertaking begins and ends at
determined or determinable times. Employees who are hired for
the carrying out of one of these separate projects, the scope
A2010 - 97 - Disini
and duration of which has been determined and made known to
the employees at the time of employment, are properly treated
as "project employees," and their services may be lawfully
terminated at completion of the project.
- The employment of seasonal employees, on the other hand,
legally ends upon completion of the project or the season.
- The overwhelming fact of petitioners' continuous employment
as found by the labor arbiter ineludibly shows that the
petitioners were regular employees. On the other hand, we find
that substantial evidence, applicable laws and jurisprudence do
not support the ruling in the assailed Decision that petitioners
were project employees. The Court here reiterates the rule that
all doubts, uncertainties, ambiguities and insufficiencies should
be resolved in favor of labor. It is a well-entrenched doctrine
that in illegal dismissal cases, the employer has the burden of
proof. This burden was not discharged in the present case.
2. NO
Ratio For a dismissal of an employee to be valid, two requisites
must be met: (1) the employee is afforded due process,
meaning, he is given notice of the cause of his dismissal and an
adequate opportunity to be heard and to defend himself; and
(2) the dismissal is for a valid cause as indicated in Article 282
of the Labor Code.
Reasoning
- The services of petitioners were purportedly terminated at the
end of the ADB and Interbank projects, but this could not have
been a valid cause for, as discussed above, they were regular
and not project employees.
- As a consequence of their illegal termination, petitioners are
entitled to reinstatement and backwages in accordance with the
Labor Code. The backwages however are to be computed only
for three years fromthe date of their dismissal, without
deduction or qualification.
- Where the illegal dismissal transpired before the effectivity of
RA 6715 (March 21, 1989), the award of backwages in favor of
the dismissed employees is limited to three years without
deduction or qualification.
Disposition The petition is GRANTED. The assailed Decision
and Resolution are REVERSED and SET ASIDE and the decision
of the labor arbiter is REINSTATED, with backwages to be
computed as above discussed.
PHILIPPINE TOBACCO V NLRC
300 SCRA 37
PANGANIBAN; December 10, 1998
NATURE
Petition for review on certiorari
FACTS
- This involves 2 groups of seasonal workers: Lubat group and
Luris group. They claimed separation benefits after closure of
processing plant and transfer of tobacco operations to Ilocos.
Petitioner refused to grant separation pay to Lubat group
because they had not been given work during preceding year.
It also refused to grant same to Luris group because of closure
due to “serious business losses”.
ISSUES
1. WON the Luris group has been illegally dismissed
2. WON the Lubat group has been illegally dismissed
HELD
1. YES
- Serious business losses were not proven.
- To justify retrenchment: (1) losses expected should be
substantial and not merely de minimis. (2) substantial loss
must be reasonably imminent. (3) retrenchment must be
reasonably necessary. Employer should have taken other
measures. (4) alleged losses must be proven by sufficient and
convincing evidence.
- Here, we consider the fact that the petitioner did not actually
close its operations but merely transferred its processing and
Labor Law 1
redrying operations.
- It was also engaged in corn and rental operations.
- Notice of termination, though issued, violated the one month
prior notice requisite.
2. YES
- SEASONAL WORKERS WHO ARE CALLED FROM TIME TO TIME
AND ARE TEMPORARILY LAID OFF DURING OFF-SEASON ARE
NOT SEPARATED FROM SERVICE IN SAID PERIOD, BUT ARE
MERELY CONSIDERED ON LEAVE UNTIL REEMPLOYED.
- The employer-employee relationship between petitioner and
Lubat group was not terminated at the end of 1993 season.
SAN MIGUEL CORPORATION V NLRC (GUZMAN)
[PAGE 75]
MANILA HOTEL COMPANY V CIR
9 SCRA 184
BAUTISTA ANGELO; September 30, 1963
NATURE
Appeal from CIR’s judgment
FACTS
- February 24, 1960 - The Pines Hotel Employees
Association(PHEA) filed before the CIR a petition praying,
among other things, that its employees who were working at
the Pines Hotel be paid additional compensation for overtime
service rendered due to the exigencies of the business, as well
as additional compensation for Sunday, legal holiday and
nighttime work.
- The Manila Hotel filed its answer denying the material
averments of the petition and alleging, among others, that if
overtime service was rendered the same was not authorized
but was rendered voluntarily, for the employees were interested
in the "tips" offered by the patrons of the hotel.
- CIR- judged that the employees were entitled to the additional
compensation demanded, including that for overtime work,
because an employee who renders overtime service is entitled
to compensation even if he rendered it without prior authority.
- MR was filed, but the same was denied by the industrial court
en banc.1awphîl.nèt
- The Examining Division (CIR) submitted a report- stated that
the amount due the employees as additional compensation for
overtime and night services rendered from January to
December 31, 1958 was P32,950.69.
- The management filed its objection to the report on the
ground that it included 22 names of employees who were not
employees of the Pines Hotel at the time the petition was filed
so that insofar as said employees are concerned the petition
merely involves a money claim which comes under the
jurisdiction of the regular courts.
- The trial judge, however, overruled this objection holding that,
while the 22 employees were actually not in the service at the
time of the filing of the petition, they were however
subsequently employed even during the pendency of the
incident, and so their claim comes within the jurisdiction of the
Court of Industrial Relations.
ISSUE
WON the 22 seasonal employees were correctly adjudged the
additional compensation including that for OT
HELD
YES
Ratio Seasonal employees called to work from time to time
and temporarily laid off from during off season are REGULARS
but are on LOA w/o pay.
Reasoning
- It appears that the questioned employees were never
separated from the service.
- Their status is that of regular seasonal employees who are
called to work from time to time, mostly during summer season.
A2010 - 98 - Disini
- The nature of their relationship with the hotel is such that
during off season they are temporarily laid off but during
summer season they are re-employed, or when their services
may be needed.
- They are not strictly speaking separated from the service but
are merely considered as on leave of absence without pay until
they are re-employed. Their employment relationship is never
severed but only suspended. As such, these employees can be
considered as in the regular employment of the hotel.
Disposition The order appealed from is affirmed.
INDUSTRIAL-COMMERCIAL-AGRICULTURAL
WORKERS' ORGANIZATION V CIR
16 SCRA 562
REYES; March 31, 1966
NATURE
Appeal from decision of the Court of Industrial Relations
FACTS
- Petitioner, Industrial-Commercial- Agricultural Workers'
Organization (ICAWO), declared a strike against the respondent
Central Azucarera de Pilar. The strike was amicably settled the
following day, and among the provisions of the "Amicable
Settlement" reads:
"That the company shall not discriminate against any worker
and the same treatment shall be accorded to workers (ICAWO
affiliates) who declared a strike or not. A petition for
Certification Election will be filed by the ICAWO in view of the
other labor union, CAPAWA, with whom the company has an
existing collective bargaining contract, a union which is
considered by the ICAWO as a company union."
- The CAPAWA therein referred to is the herein respondent
Central Azucarera de Pilar Allied Workers Association and the
collective bargaining contract, likewise therein referred to,
entered into in 1955, provided:
"The EMPLOYER agrees that in hiring unskilled employees and
laborers, the members of the WORKERS ASSOCIATION should
be given preference and the management should notify
accordingly to the WORKERS ASSOCIATION of any vacancy
existing in all Departments. New employees and laborers
hired who are members of the WORKERS ASSOCIATION will
be on TEMPORARY STATUS and the EMPLOYER agrees that
before they will be considered regular employees and
laborers they have to become members of the CENTRAL
AZUCARERA DE PILAR ALLIED WORKERS' ASSOCIATION within
thirty (30) days from the date of employment and if they
refuse to affiliate with the said labor organization within this
time they will be immediately dismissed by the EMPLOYER;"
- Among the strikers were 101 seasonal workers, some of whom
have worked as such for the company since pre-war years. On
the opening of the milling season for the year 1956-1957, the
respondent company refused to re-admit those 101 seasonal
workers of the ICAWO on the ground that it was precluded by
the closed shop clause in its collective bargaining agreement
with the CAPAWA. Thus, , the ICAWO filed an unfair labor
practice charge against the company. The Court of Industrial
Relations in a decision ordered the reinstatement, with back
wages, of these laborers; but on a motion for reconsideration,
the said court, en banc, reversed the said decision.
Not satisfied with the reversal, the ICAWO filed the present
petition for certiorari to review the industrial court's resolution.
- The petitioner contends that they are regular and old
employees and, as such, they should have been re-hired at the
start, in the month of October, of each milling season, which
usually last 5 months. The respondents, on the other hand, urge
that these laborers are new, their employment terminating at
the end of each milling season and, therefore, could not be re-
admitted without the company violating the closed shop
agreement with the CAPAWA.
ISSUE
Labor Law 1
WON seasonal workers are new workers
HELD
NO
- Petitioners, even if seasonal workers, were not “new workers”
within the scope of the closed shop contract between the sugar
central and the CAPAWA union; hence their discharge was
illegal.
- The cessation of the Central's milling activities at the end of
the milling season is not permanent or definitive; it is a
foreseeable suspension of work, and both activities will be
resumed, as they are in fact resumed, when sugar cane ripe for
milling is again available. There is merely a temporary cessation
of the manufacturing process due to passing shortage of raw
materials that by itself alone is not sufficient, in the absence of
other justified reasons, to sever the employment or labor
relationship between the parties. The mere fact that the
laborers assent to their medical examination at the beginning of
each milling season does not indicate that a new labor contract
is being entered into, in the absence of a stipulation to such
effect. Said examination is in the interest of both the Central
and the labor force.
Disposition Resolution set aside
HACIENDA BINO V CUENCA
456 SCRA 300
CALLEJO SR; April 15, 2005
FACTS
- Hacienda Bino (HB) is a 236-hectare sugar plantation in
Negros Occ, owned and operated by Hortencia Starke. HB
consists of 220 workers performing various works, such as
cultivation, planting of cane points, fertilization, watering,
weeding, harvesting, and loading of harvested sugarcanes to
cargo trucks. On July 18 1996, Starke issued a notice that those
who signed in favor of CARP are expressing their desire to get
out of employment. 76 workers were affected: they regarded
the notice as a notice of their termination. They filed a
complaint for illegal dismissal, wage differentials, 13th month
pay, holiday pay and premium pay for holiday, service incentive
leave pay, and moral and exemplary damages.
- Starke’s side: HB’s board of directors were petitioning for
reclassification of the hacienda (except the portion earmarked
for CARP) from agricultural to industrial, residential and
commercial. She was merely giving priority to those who
supported the reclassification. July 1996 was off-season, so not
so many workers needed; the work was seasonal in nature. She
relies on the ruling in Mercado Sr. v. NLRC where sugar farm
workers were classified as seasonal employees, and not regular
employees. The workers were free to offer their services to
neighboring haciendas.
- Respondents’ side: They are regular employees. The hacienda
was so big that they work there year-round and that they do not
offer their services to neighboring haciendas. The Mercado case
dealt with a 17.5-heactare hacienda, considerable smaller than
HB.
ISSUE
WON the respondents are seasonal employees
HELD
NO
- The respondents are regular employees.
- Starke’s reliance on Mercado is misplaced because in that
case, the workers were classified as seasonal employees
because they were employed for a definite period of time since
the hacienda was much smaller, and they offered their services
to and worked at the neighboring haciendas.
- The Court reiterated the same observations in Hacienda
Fatima v. National Federation of Sugarcane Workers-Food and
General Trade and added that the petitioners in the Mercado
case were "not hired regularly and repeatedly for the same
phase/s of agricultural work, but on and off for any single phase
A2010 - 99 - Disini
thereof." Starke did not present any evidence that the
respondents were required to perform certain phases of
agricultural work for a definite period of time. Although she
asserted that the respondents made their services available to
the neighboring haciendas, the records do not, however,
support such assertion.
- The primary standard for determining regular employment is
the reasonable connection between the particular activity
performed by the employee in relation to the usual trade or
business of the employer. There is no doubt that the
respondents were performing work necessary and desirable in
the usual trade or business of an employer. Hence, they can
properly be classified as regular employees.
- For respondents to be excluded from those classified as
regular employees, it is not enough that they perform work or
services that are seasonal in nature. They must have been
employed only for the duration of one season. While the records
sufficiently show that the respondents' work in the hacienda
was seasonal in nature, there was, however, no proof that they
were hired for the duration of one season only. In fact, the
payrolls, submitted in evidence by the petitioners, show that
they availed the services of the respondents since 1991. Absent
any proof to the contrary, the general rule of regular
employment should, therefore, stand. It bears stressing that the
employer has the burden of proving the lawfulness of his
employee's dismissal.
Disposition Petition denied. Reinstate workers without loss of
seniority, pay backwages and wage differentials, and pay attys
fees.
POSEIDON FISHING V NLRC (ESTOQUIA)
482 SCRA 717
CHICO-NAZARIO; February 20, 2006
FACTS
- Estoquia was first hired by PF as a Chief Mate in 1988. He later
on became Boat Captain; but was demoted still later to Radio
Operator. In 2000, he failed to log a 7:25am call in one logbook,
but was able to record it in another one. When he realized his
mistake, he logged the 7:25 call after a 7:30 am call (same
day). The manager noticed this mistake and summoned
Estoquia to get his separation pay. Estoquia refused to accept
the sep pay because he believed he had done nothing illegal to
warrant his immediate discharge from work.
- PF argues that Estoquia was a casual/contractual employee
whose services could be terminated at the end of contract. PF
contends that Estoquia was hired on a por viaje basis, based on
the Kasunduan which reads:
“NA, kami ay sumasang-ayon na MAGLINGKOD at GUMAWA
ng mga gawaing magmula sa pag-alis ng lantsa sa pondohan
sa Navotas patungo sa palakayahan; pabalik sa pondohan ng
lantsa sa Navotas hanggang sa paghango ng mga kargang
isda.”
- LA and NLRC found for Estoquia.
ISSUE
WON Estoquia was a regular employee when he was discharged
from work
HELD
YES
- PF's intent to evade the application of Article 280 of the Labor
Code is unmistakable. In a span of 12 years, Estoquia worked
for petitioner company first as a Chief Mate, then Boat Captain,
and later as Radio Operator. His job was directly related to the
deep-sea fishing business of petitioner Poseidon. His work was,
therefore, necessary and important to the business of his
employer. Such being the scenario involved, private respondent
is considered a regular employee of petitioner under Article 280
of the Labor Code.
- Moreover, unlike in the Brent case where the period of the
contract was fixed and clearly stated, the terms of employment
of private respondent as provided in the Kasunduan was not
Labor Law 1 A2010 - 100 - Disini
only vague, it also failed to provide an actual or specific FERNAN; January 30, 1989
date or period for the contract.
- Furthermore, as petitioners themselves admitted, private
NATURE
respondent was repeatedly hired as part of the boat's crew and
Petition to review the decision of the NLRC
he acted in various capacities onboard the vessel. In Integrated
Contractor and Plumbing Works, Inc. v. NLRC, it was held that
FACTS
the test to determine whether employment is regular or not is
- Petitioner International Catholic Migration Commission (ICMC),
the reasonable connection between the particular activity
a non-profit organization dedicated to refugee service at the
performed by the employee in relation to the usual business or
Philippine Refugee Processing Center in Morong, Bataan
trade of the employer. And, if the employee has been
engaged the services of private respondent Bernadette Galang
performing the job for at least one year, even if the
as a probationary cultural orientation teacher with a monthly
performance is not continuous or merely intermittent, the law
salary of P2,000.00.
deems the repeated and continuing need for its performance as
- Three (3) months thereafter, private respondent was informed,
sufficient evidence of the necessity, if not indispensability of
orally and in writing, that her services were being terminated
that activity to the business.
for her failure to meet the prescribed standards of petitioner as
- The act of hiring and re-hiring in various capacities is a mere
reflected in the performance evaluation of her supervisors
gambit employed by petitioner to thwart the tenurial protection
- Private respondent filed a complaint for illegal dismissal, unfair
of private respondent. Such pattern of re-hiring and the
labor practice and unpaid wages against petitioner with the
recurring need for his services are testament to the necessity
then Ministry of Labor and Employment, praying for
and indispensability of such services to petitioners' business or
reinstatement with backwages, exemplary and moral damages.
trade.
- Labor Arbiter Pelagio A. Carpio rendered his decision
ESTOQUIA IS NOT PROJECT/SEASONAL EMPLOYEE
dismissing the complaint for illegal dismissal as well as the
- The activity of catching fish is a continuous process and could
complaint for moral and exemplary damages but ordering the
hardly be considered as seasonal in nature. In Philex Mining
petitioner to pay private respondent the sum of P6,000.00 as
Corp. v. NLRC, project employees were defined as those
payment for the last three (3) months of the agreed
workers hired (1) for a specific project or undertaking, and (2)
employment period pursuant to her verbal contract of
the completion or termination of such project has been
employment.
determined at the time of the engagement of the employee.
- Both parties appealed the decision to the National Labor
The principal test for determining whether particular employees
Relations Commission.
are "project employees" as distinguished from "regular
- The NLRC, by a majority vote, sustained the decision of the
employees," is whether or not the "project employees" were
Labor Arbiter and thus dismissed both appeals for lack of merit.
assigned to carry out a "specific project or undertaking," the
- Dissatisfied, petitioner filed the instant petition.
duration and scope of which were specified at the time the
employees were engaged for that project. In this case,
ISSUE
petitioners have not shown that private respondent was
WON an employee who was terminated during the probationary
informed that he will be assigned to a "specific project or
period of her employment is entitled to her salary for the
undertaking." Neither has it been established that he was
unexpired portion of her six-month probationary employment
informed of the duration and scope of such project or
undertaking at the time of their engagement.
HELD
- More to the point, in Maraguinot, Jr. v. NLRC, the SC ruled that
NO
once a project or work pool employee has been:
- There is justifiable basis for the reversal of public respondent's
(1) continuously, as opposed to intermittently, re-hired by the
award of salary for the unexpired three-month portion of private
same employer for the same tasks or nature of tasks; and
respondent's six-month probationary employment in the light of
(2) these tasks are vital, necessary and indispensable to the
its express finding that there was no illegal dismissal
usual business or trade of the employer, then the employee
- There is no dispute that private respondent was terminated
must be deemed a regular employee.
during her probationary period of employment for failure to
- In fine, inasmuch as private respondent's functions as
qualify as a regular member of petitioner's teaching staff in
described above are no doubt "usually necessary or desirable in
accordance with its reasonable standards: private respondent
the usual business or trade" of petitioner fishing company and
was found by petitioner to be deficient in classroom
he was hired continuously for 12 years for the same nature of
management, teacher-student relationship and teaching
tasks, we are constrained to say that he belongs to the ilk of
techniques.
regular employee. Being one, private respondent's dismissal
- Failure to qualify as a regular employee in accordance with the
without valid cause was illegal. And, where illegal dismissal is
reasonable standards of the employer is a just cause for
proven, the worker is entitled to back wages and other similar
terminating a probationary employee specifically recognized
benefits without deductions or conditions.
under Article 282 (now Article 2813) of the Labor Code.
Disposition Petition denied.
- It must be noted that notwithstanding the finding of legality of
the termination of private respondent, public respondent
SECTION 8: PROBATIONARY justified the award of salary for the unexpired portion of the
probationary employment on the ground that a probationary
EMPLOYEES employment for six (6) months is an employment for a "definite
period" which requires the employer to exhaust the entire
probationary period to give the employee the opportunity to
meet the required standards.
8.01 PROBATIONARY - The legal basis of public respondent is erroneous. A
EMPLOYEES probationary employee, as understood under Article 282 (now

3
DEFINITION ART. 281. Probationary employment. — Probationary employment shall not exceed
six months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employer
INTERNATIONAL CATHOLIC MIGRATION who has been engaged in a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employer in accordance with reasonable
COMMISSION V NLRC (GALANG) standard made known by the employer to the employer at the time of his
engagement. An employee who is allowed to work after a probationary period shall
169 SCRA 606 be considered a regular employee.
Labor Law 1
Article 281) of the Labor Code, is one who is on trial by an
employer during which the employer determines whether or not
he is qualified for permanent employment. A probationary
appointment is made to afford the employer an opportunity to
observe the fitness of a probationer while at work, and to
ascertain whether he will become a proper and efficient
employee.
- The word "probationary", as used to describe the period of
employment, implies the purpose of the term or period, but not
its length.
- Being in the nature of a "trial period" the essence of a
probationary period of employment fundamentally lies in the
purpose or objective sought to be attained by both the
employer and the employee during said period. The length of
time is immaterial in determining the correlative rights of both
in dealing with each other during said period.
- A281 LC gives ample authority to the employer to terminate a
probationary employee for a just cause or when he fails to
qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the
time of his engagement.
- There is nothing under Article 281 of the Labor Code that
would preclude the employer from extending a regular or a
permanent appointment to an employee once the employer
finds that the employee is qualified for regular employment
even before the expiration of the probationary period.
Conversely, Article 281 of the Labor Code does not likewise
preclude the employer from terminating the probationary
employment on justifiable causes as in the instant case.
- There was no showing, as borne out by the records, that there
was circumvention of the rights of private respondent when she
was informed of her termination. Private respondent was duly
notified, orally and in writing, that her services as cultural
orientation teacher were terminated for failure to meet the
prescribed standards of petitioner.
- The dissatisfaction of petitioner over the performance of
private respondent in this regard is a legitimate exercise of its
prerogative to select whom to hire or refuse employment for
the success of its program or undertaking.
- It was a grave abuse of discretion on the part of public
respondent to order petitioner to pay private respondent her
salary for the unexpired three-month portion of her six-month
probationary employment when she was validly terminated
during her probationary employment. To sanction such action
would not only be unjust, but oppressive on the part of the
employer
Disposition Petition granted.
PHIL. FEDERATION OF CREDIT COOPERATIVES INC
(PFCCI) V NLRC (ABRIL)
[PAGE 73]
PURPOSE
PHILEMPLOY SERVICES V RODRIGUEZ
486 SCRA 302
CARPIO; March 31, 2006
NATURE
Petition for review to annul CA decision
FACTS
- Anita RODRIGUEZ applied with respondent PHILEMPLOY
Services and Resources, Inc. for deployment abroad as a factory
worker. When she was asked to report for work, Ms. Brenda
Castro, an official of respondent, demanded from her the sum of
P60T as placement fee.
- Since she could not afford such amount, they agreed that she
would initially pay P30T as downpayment and the balance of
P30T, plus 7% interest every month thereafter through salary
A2010 - 101 - Disini
deductions. She then paid Ms. Castro the P30T but was not
issued any receipt.
- Thereafter, she executed a contract of employment as a
domestic helper of one Chao Hung Ching of Taipei, Taiwan with
a monthly salary of NT$14,010, plus free food and
accommodation for a period of 1 year.
- On 13 Jan 1995, she was deployed to Taiwan. As such DH, she
worked from 5am until 10pm. Among her chores were to
carwash the vehicle of her master, cook the meals,
housecleaning and babysitting. On 24 Jan 1995, she had a talk
with her master where she was told that she is being sent home
due to certain problems.
- Complainant pleaded that she continue her employment,
confronted as she was with the debts she had to pay. But she
was sent home the following day. While at the airport, a certain
Ms. Go forced her to sign an Affidavit where it stated that her
leaving as a DH was voluntary and that she would assume all
the obligations for her travel back to the Philippines.
- She was only paid the sum of NT$1,931 (12 days work)
- Respondent alleged that it was stipulated and agreed upon in
the contract, that she would undergo a 40-day probationary
period before she becomes a regular domestic helper. Also, she
was charged of her placement fees as allowed by law and by
the POEA rules and regulations. During the first 10 days of her
probationary period, she was observed to be inattentive and
incompetent to perform her duties and responsibilities.
- Labor Arbiter ruled in favor of Rodriguez.
- NLRC deleted award of P155T for unearned wages since there
is no illegal dismissal that took place.
- CA reversed NLRC decision and reinstated Labor Arbiter’s.
ISSUES
1. WON Rodriguez was illegally dismissed
2. WON she was afforded due process
HELD
1. NO
Ratio Even if it were true that Anita’s foreign employer
terminated her services after 10 days of her employment, there
could be no illegal dismissal as the termination was effected
during the agreed probationary period.
- There is probationary employment4 where the employee, upon
his engagement, is made to undergo a trial period during which
the employer determines his fitness to qualify for regular
employment, based on reasonable standards made known to
him at the time of engagement.
2. NO
Ratio Although Anita’s employment was terminated because
she failed to meet the standards of her foreign employer, still it
is necessary and obligatory to afford Anita her basic right to
notice.
- Section 2, Rule 1, Book VI of the Omnibus Rules Implementing
the Labor Code provides:
“(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:
If the termination is brought about by the completion of a
contract or phase thereof, or by failure of an employee to meet
the standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served
the employee within a reasonable time from the effective date
of termination.
Reasoning
- Anita was repatriated to the Philippines on 25 January 1995.
On the night before her departure, her employer’s wife merely
told her that she was sending her home “on account of some
problem.” This information given to Anita cannot be considered
as equivalent to the written notice required by law to be served
on the employee. The notice should inform the employee of the
ground or grounds for his termination and that his dismissal is
being sought.
4
Section 6, Rule 1, Book VI of the Omnibus Rules Implementing the Labor Code
Labor Law 1
* Thus, absence of notice makes her termination DEFECTIVE for
which petitioner must be sanctioned for its non-compliance with
the requirements of or for failure to observe due process.
- As held in the Agabon case: “Where the dismissal is for a just
cause, as in the instant case, the lack of statutory due process
should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the
employee for the violation of his statutory rights.”
Disposition Petition GRANTED. CA decision set aside.
However, petitioner Philemploy Services and Resources, Inc.
shall pay respondent Rodriguez P30T as nominal damages.
DELA CRUZ V NLRC
418 SCRA 226
CORONA; December 11, 2003
NATURE
Petition for review on certiorari
FACTS
- On May 27, 1996, petitioner Florencio de la Cruz, Jr. was hired
by private respondent Shemberg Marketing Corporation as
senior sales manager, a newly created position in line with the
company’s objective of product positioning in the consumer
market. However, on Sept. 14, 1996, petitioner was informed
that his services were terminated. His request for a meeting
with Shemberg’s VP and to be furnished a 30-day written notice
was denied by management. Hence, petitioner filed a complaint
for illegal dismissal., non-payment of salary, backwages, 13th
month pay and damages.
- Private respondent answered that petitioner’s dismissal was
premised, among others, on his unauthorized reimbursement of
the plane tickets of his wife and child, resulting to loss of trust
and confidence of the company.
- Labor arbiter ruled that petitioner was illegally dismissed and
granted his claim for separation pay, backwages and unpaid
wages. Upon appeal, NLRC modified the decision, deleting the
award for separation pay and backwages. Hence, this petition.
ISSUE
WON petitioner was legally dismissed, as he was a probationary
employee
HELD
YES
- Petitioner was hired by Shemberg on May 27, 1996 and was
terminated on Sept. 14, 1996. A281 LC provides:
Probationary employment shall not exceed six (6) months
from the date the employee started working , unless it is
covered in apprenticeship[ agreement stipulating a longer
period. The services of an employee who has been engaged
on a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance
with reasonable standards, made known by the employer to
the employee at the time of his engagement. An employee
who is allowed to work after a probationary period shall be
considered a regular employee.
- The evidence on record clearly shows that petitioner was well
informed of the standards to be met before he could qualify as
a regular employee. Attached to his appointment papers was a
job description of sales manager.
- A probationary employee is one who, for a given period of
time, is under observation or evaluation to determine whether
or not he is qualified for permanent employment. During the
probationary period, the employer is given the opportunity to
observe the skill, competence and attitude of the employee
while the latter seeks to prove to the employer that he has the
qualifications to meet the reasonable standards for permanent
employment. The length of time is immaterial in determining
the correlative rights of both the employer and the employee in
dealing with each other during this period.
- There is no dispute that petitioner, as a probationary
employee enjoyed only a temporary employment status. This
A2010 - 102 - Disini
meant that he was terminable anytime, permanent employment
not having been attained in the mean time. The employer could
well decide he no longer needed the probationary employee’s
service or hi performance fell short of expectation. As long as
the termination was made before the expiration of the 6-month
probationary period, the employer was well within his rights to
sever the employer-employee relationship. A contrary
interpretation would defect the clear meaning of the term
probationary. In this case, Shemberg had good reason to
terminate petitioner’s employment. Petitioner was holding a
managerial position in which he was tasked to perform key
functions in accordance with an exacting work ethic. His
position required the full trust and confidence of his employer.
While petitioner could exercise some discretion, this obviously
did not cover acts for his own personal benefit. He committed a
transgression which betrayed the trust and confidence of his
employer – reimbursing his family’s personal travel expenses
out of company funds.
Disposition Petition is DISMISSED. The decision of the CA is
affirmed.
GRAND MOTORS PARTS CORP V MINISTER OF
LABOR
GUERRERO; July 16, 1984
NATURE
Petition for certiorari assailing the Order of the Minister of
Labor which affirmed the decision of the Regional Director of
Region VI
FACTS
- Respondent Balicena was the Branch Manager of the
petitioner company’s Iloilo Branch. He was the Finance Officer
of Warner, Barnes, & Co. (no.2 of the company) when allegedly,
Mr. Alfredo Cisneros (the then acting branch manager of the
company in Iloilo) induced him to apply for the position of
Branch Manager, as their company (petitioner) was looking for a
CPA. He applied for the job and was accepted. He started
working for the petitioner company on April 1 but resigned from
his position in Warner, Barnes, & Co. only on April 28.
- However, he was terminated only after working for the
company for 4 months (April to August). Petitioner company
alleged that (a) he failed to submit promptly the monthly
Income and Loss Statement, Comparative Projections & Actual
Sales Report; (b) the Comparative Performance Report dated
July 8, 1980 on the operation of the Iloilo Branch for the month
of June and May, 1980, the Cash Sales of the Iloilo Branch went
down to P91,318.41 for June, 1980, as compared with the sales
for the month of May, 1980 in the sum of P174,697.77; (c)
Belicena in violation of company policy and without clearance
from the head office in Cebu, extended personal accounts in
favor of 15 persons which as of November, 1980 produced
delinquent accounts amounting to P18,435.80; and (d) Belicena
claimed lack of knowledge of the vehicular accident caused by
a subordinate and failed to provide prompt administrative
disciplinary action against the erring employee. They claimed
that Balicena is only a probationary employee, which would be
observed by the company for 4-6 months and that Balicena
knew that there is a possibility that he would not get the job.
- Balicena on the other hand alleged that he is a regular
employee, although he was not able to present any contract
establishing his status as a regular employee; that the mishap
involving the company's vehicle which was used without his
permission and knowledge could not be blamed upon him; that
the alleged reports which he failed to send were not reminded
to him, verbally or in writing; that his sales for the period April
to August, 1980 is higher compared to that for the same period
in 1979; and that the alleged accounts remaining unpaid as of
November 6, 1980 would have been collected in full if he were
still the Manager, among other things.
- Regional Director and Minister of Labor ruled in favor of
Balicena, ordering his reinstatement, payment of his
backwages, and other privileges.
Labor Law 1 A2010 - 103 - Disini
not know) and for extending personal accounts to some
ISSUES individuals in violation of their company’s policy.
1. WON private respondent's employment as Branch Manager - Fourth, the sales target were not being reached, and because
was probationary, and not regular and permanent of this, the Vice President/GM notified him about this (“Can we
2. WON private respondent, if he’s a probationary Branch not improve that performance this July?”). Balicena was clearly
Manager, was terminated for just cause not discharging his duties to the satisfaction of the
management.
HELD - SO THEREFORE: “[The Court is] satisfied that petitioner has
1. YES valid grounds to charge its Branch Manager with loss of
Ratio Indeed, the employer has the right or is at liberty to confidence by reason of the overall performance he has
choose as to who will be hired and who will be declined. It is demonstrated within the probationary period which showed that
within the exercise of this right to select his employees that the he is not qualified to be the regular or permanent Branch
employer may set or fix a probationary period within which the Manager of petitioner corporation in Iloilo City. His dismissal
latter may test and observe the conduct of the former before does not appear to Us as arbitrary, fanciful or whimsical. In the
hiring him permanently. "The right of a laborer to sell his labor last and ultimate analysis, the prerogative and judgment to
to such persons as he may choose is, in its essence, the same hire employees under terms and conditions designed to
as the right of an employer to purchase labor from any person achieve success in its business activities belongs to
whom it chooses. The employer and the employee have thus an management which may not be unduly impaired, limited
equality of right guaranteed by the Constitution. 'If the or restricted.“
employer can compel the employee to work against the latter's Disposition the Order of the Deputy Minister of Labor dated
will, this is servitude. If the employee can compel the employer October 22, 1981 is hereby REVERSED and SET ASIDE.
to give him work against the employer's will, this is
oppression.'"
INTERNATIONAL CATHOLIC MIGRATION
Reasoning
- First, Balicena could not present any written proof of his COMMISSION V NLRC (GALANG)
appointment or employment as regular and permanent Branch [PAGE 98]
Manager of petitioner corporation. Then there was the fact that
he assumed his work as of April 1 but resigned from his PHIL. FEDERATION OF CREDIT COOPERATIVES INC
previous company only on April 28, meaning that if he was
really appointed as regular and permanent then he would have (PFCCI) V NLRC (ABRIL)
resigned immediately from his old company. But since he was [PAGE 73]
not yet sure of his status in the petitioner corporation, he
resigned late.
-Second, Balicena claims that there was no written contract
because the contracts were given only to those who will pass
the probationary period and the rank-and-file employees – not ESCORPIZO V UNIVERSITY OF BAGUIO
to those managerial ones. This practice is not supported and 306 SCRA 497
contrary to usual business practice. Also, being a CPA, Finance QUISUMBING; April 30, 1999
Officer, and No.2 man in his former company, he should have
insisted on a written contract for the security of his tenure in his
NATURE
new position! (in short, he already had a stable position in his
Special civil action for certiorari
former company and in not insisting on a written contract, he
took the risk of being jobless…for he may be terminated as
FACTS
Branch Manager!)
- Petitioner Esperanza Escorpizo was initially hired by
-Third, Balicena had never been hired as manager, and the
respondent university on June 13, 1989 as a high school
petitioner company and Balicena’s former company are
classroom teacher. Under the rules of the respondent
engaged in different kinds of business so it was necessary for
university, appointment to teach during the first two years at
Balicena to undergo a period of probation to test his
the university is probationary in nature. During the probation
qualifications, skills and experience since managing is a new
period, the teacher is observed and evaluated to determine his
experience for him.
competency. Attainment of a permanent status by a faculty
2. YES
member is conditioned upon compliance with certain
Ratio A probationary employee may be terminated after six
requirements, such as passing the professional board
months for a just cause or when he fails to qualify as a regular
examination for teachers (PBET).
employee. It is true that mere allegation of loss of confidence
- On March 18, 1991, respondent university informed Escorpizo
by employer on his employee is not sufficient cause for his
that her employment was being terminated at the end of the
dismissal. But loss of confidence is a valid ground for dismissing
school semester in view of her failure to pass the PBET. But
an employee, and proof beyond reasonable doubt of the
before the start of the school year 1991-1992, Escorpizo
employee's misconduct is not required to dismiss him of this
reapplied and pleaded that she be given another chance. She
charge. It is sufficient if there is some basis for such loss of
told the respondent school that she had just taken the PBET and
confidence.
hoped to pass it.
Reasoning
- As Escorpizo’s appeal was favorably considered, she was
- Balicena was proven and demonstrated to fail in submitting
allowed to teach during the school year 1991-1992. However,
monthly reports. A monthly report of operations is essential to
her continued employment was conditioned on her passing the
the business of the petitioner company, and this cannot be
PBET. Unfortunately, Escorpizo failed again. Undaunted,
ignored by a Branch Manager for the viability of its business life
Escorpizo took the examination a third time. At the end of the
may well depend on these reports.
school year, respondent university evaluated the teachers
- Second, it was proven that after being on the job as Branch
performance to determine who would be in the list for the next
Manager for nearly a month, Balicena wrote to the company to
school year. Escorpizo, not having passed the PBET yet, was
ask what his duties were. This manifests that Balicena had not
not included.
shown any effort or initiative to familiarize himself with his
- Much later, on June 8, 1992, the results of the PBET were
duties and obligations, although petitioner corporation provided
released and this time Escorpizo passed said examination.
him with a brochure containing what he was supposed to do.
Nevertheless, on June 15, 1992, respondent university no longer
- Third, he cannot escape responsibility for the acts of his
renewed Escorpizo’s contract of employment on the ground
subordinates (vehicular accident which he claims that he did
Labor Law 1
that she failed to qualify as a regular teacher. This prompted
Escorpizo to file on July 16, 1992 a complaint for illegal
dismissal, payment of backwages and reinstatement against
private respondents.
ISSUE
WON the dismissal was illegal since Escorpizo had attained the
status of a regular employee having rendered very satisfactory
performance as probationary teacher for two years, consistent
with the collective bargaining agreement between the
respondent university and petitioner union of which Escorpizo is
a member
HELD
NO
- Escorpizo was not illegally dismissed. Her contract merely
expired.
Ratio A probationary employee is one who, for a given period
of time, is being observed and evaluated to determine whether
or not he is qualified for permanent employment. A known to the employee.
probationary appointment affords the employer an opportunity
to observe the skill, competence and attitude of a probationer.
The word “probationary”, as used to describe the period of
employment, implies the purpose of the term or period. While
the employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent
employment, the probationer at the same time, seeks to prove
to the employer that he has the qualifications to meet the
reasonable standards for permanent employment.
Reasoning
- the rules of the university clearly states that the first two
years at the University is probationary in nature and the
following conditions must concur in order that a probationary
teacher may be extended a regular appointment; (1) the faculty
member must satisfactorily complete the probationary period of
four semesters or two years, within which his performance shall
be observed and evaluated for the purpose of determining his
competency and fitness to be extended permanent status; and
(2) the faculty member must pass the PBET or an equivalent
civil service examination. Escorpizo failed to meet the 2nd
requirement to be a regular employee which is to pass the
PBET.
- Though the CBA does not mention that passing the PBET is a
prerequisite for attaining permanent status as a teacher.
Nevertheless, the aforecited CBA provision must be read in
conjunction with statutory and administrative regulations
governing faculty qualifications. It is settled that an existing
law enters into and forms part of a valid contract without the
need for the parties expressly making reference to it.[16]
Further, while contracting parties may establish such
stipulations, clauses, terms and conditions as they may see fit,
such right to contract is subject to limitation that the agreement
must not be contrary to law or public policy.
- DECS Order No. 38, series of 1990, a regulation implementing
Presidential Decree No. 1006[18] or the Decree
Professionalizing Teaching stipulates that no person shall be
allowed to engage in teaching and/or act as a teacher unless
he has registered as professional teacher with the National
Board for Teachers.
Disposition DISMISSED, and the assailed RESOLUTION of
public respondent is hereby AFFIRMED.
EMPLOYER RIGHT SET
PERIOD/OBLIGATION
GRAND MOTORS PARTS CORP V MINISTER OF
LABOR
[PAGE 100]
A2010 - 104 - Disini
ORIENT EXPRESS PLACEMENT PHILIPPINES V NLRC
(POEA, FLORES)
273 SCRA 256
BELLOSILLO; June 11, 1997
FACTS
- Antonio Flores was hired as crane operator with a monthly
salary of US$500 for 1year subject to a 3month probationary
period. After 1month and 5days, he was repatriated to the
Philippines. He filed a complaint to POEA fro having been
terminated for no valid reason. His employers Orient Express
and Nadrico (the foreign principal) claimed that he was
terminated for poor job performance as shown in his
performance evaluation sheet.
- POEA decided in favor of Flores held that when the ground
invoked for dismissal of an employee was incompetence or poor
job performance, it must be shown that the reasonable
standards of work prescribed by the employer were made
The dismissal was unwarranted
because the employers failed to point out the reasonable
standards of work required.
- NLRC affirmed POEA decision on appeal. It also ruled that the
designation of Flores as floorman instead of crane operator for
which he was hired violated his employment contract. Orient
Express and Nadrico filed for MFR but it was denied.
ISSUES
1. WON NLRC committed grave abuse of discretion in
concluding that Flores was never assigned as crane operator
(not important)
2. WON NLRC and POEA committed grave abuse of discretion
for ruling that poor job performance and uncooperative work
attitude did not justify his dismissal
HELD
1. Factual determination. NLRC and POEA did overlook the fact
that the private respondent admitted that he was ale to work as
crane operator (as shown in his affidavit)
2. NO
- Flores was not validly dismissed. Petition is denied.
- A281 LC, the services of an employee hired on probationary
basis may be terminated when he fails to qualify as a regular
employee in accordance with reasonable standards made
known by the employer to the employee at the time of the
engagement. The Court cannot sustain dismissal on this ground
because petitioner failed to specify the reasonable standards by
which Flores was alleged to have been evaluated to have poor
performance.
- Neither of the 2 original petitioners provided ever made
mention that he must first take and pass a Crane Operators’
License Examination before he would be allowed to touch a
crane. Neither did he know that he was to be assigned as
floorman pending the release of the exam results. He also did
not know that if he failed the exam, he would be subject to a
performance evaluation 1 month after his hiring to determine
whether the company was amenable to continuing his
employment. Flores could not be faulted for harboring the
impression that he was hired as crane operator for a definite
period of 1 year to commence upon his arrival at the work-site
and to terminate at the end of 1 year. No other condition was
laid out except that he was to be on probation for 3 months.
- Due process dictates that an employee be apprised
beforehand of the condition of his employment and of the terms
of advancement therein. Even if unsatisfactory performance
was true, it is not 1 of the just causes for dismissal under the
LC. There was no standard by which such probationary period
was made known to him.
Disposition the assailed Decision and Resolution of NLRC,
declaring that private respondent Antonio F. Flores was illegally
dismissed is AFFIRMED.
Labor Law 1
MITSUBISHI MOTORS CORP V CHRYSLER PHIL
LABOR UNION
4333 SCRA 206
CALLEJO; June 29, 2004
NATURE
Petition for review on certiorari
FACTS
- Mitsubishi Motors Philippines Corporation (MMPC) is a
domestic corporation engaged in the assembly and distribution
of Mitsubishi motor vehicles. Chrysler Philippines Labor Union
(CPLU) is a legitimate labor organization and the duly certified
bargaining agent of the hourly-paid regular rank and file
employees of MMPC. Nelson Paras was a member of CPLU while
wife, Cecille Paras, was the President of the Chrysler Philippines
Salaried Employees Union (CPSU).
- Nelson Paras was first employed by MMPC as a shuttle bus
driver. He resigned and went to Saudi Arabia work. When he
returned to the Philippines, he was re-hired as a welder-
fabricator at the MMPC. Sometime in May of 1996, Paras was
re-hired on a probationary basis as a manufacturing trainee at
the Plant Engineering Maintenance Department. As part of the
MMPC’s policy, Paras was evaluated by his immediate
supervisors after 6 months, and received an average rating.
They informed him that based on his performance rating, he
would be regularized. However, the Department and Division
Managers reviewed the performance evaluation made on
Parasand unanimously agreed, along with Paras’ immediate
supervisors, that the performance of Paras was unsatisfactory.
As a consequence, Paras was not considered for regularization.
On November 26, 1996, he received a Notice of Termination
dated November 25, 1996, informing him that his services were
terminated effective the said date since he failed to meet the
required company standards for regularization.
- Utilizing the grievance machinery in the collective bargaining
agreement, the CPLU demanded the settlement of the dispute
which arose from Paras’ termination. They argued that Paras
rd
was dismissed on his 183 day of employment, or 3 days after
the expiration of the probationary period of 6 months. It was
contended that Paras was already a regular employee on the
date of the termination of his “probationary employment.”
According to CPLU and Paras, the latter’s dismissal was an
offshoot of the heated argument during the CBA negotiations
between MMPC Labor Relations Manager, Atty. Carlos S. Cao, on
the one hand, and Cecille Paras, the President of the Chrysler
Philippines Salaried Employees Union (CPSU) and Paras’ wife,
on the other.
- PETITIONER'S CLAIM:
> Paras and CPLU asserted that pursuant to Article 13 of the
New Civil Code, the period of May 27, 1996 to November 26,
1996 consisted of one hundred eighty-three (183) days. They
asserted that the maximum of the probationary period is six (6)
months, which is equivalent to 180 days; as such, Paras, who
th
continued to be employed even after the 180 day, had
become a regular employee as provided for in Article 282 of the
Labor Code. They averred that as a regular employee, Paras’
employment could be terminated only for just or authorized
causes as provided for under the Labor Code, and after due
notice. They posited that in the Letter of Termination dated
November 25, 1996, the ground for Paras’ termination was not
among those sanctioned by the Labor Code; hence, his
dismissal was illegal. Paras and CPLU also stressed that he had
already been in the employ of MMPC from October 3, 1994 to
March 3, 1995 as a welder-fabricator. Such period, in addition
to the six-month probationary period, amounted to eleven (11)
months of service, which is sufficient for him to be considered
as a regular employee.
A2010 - 105 - Disini
- RESPONDENT'S CLAIM:
> The MMPC, for its part, averred that under Article 13 of the
New Civil Code, Paras’ probationary employment which
commenced on May 27, 1996 would expire on November 27,
1996. Since he received the notice of termination of his
employment on November 25, 1996, the same should be
considered to have been served within the six-month
probationary period.
- CA agreed with the petitioner's claim and held the dismissal of
Paras illegal.
ISSUE
WON Paras was illegally dismissed, he being dismissed after the
maximum 6 month probation (MAY 27, 1996 - NOVEMBER 23,
1996)
HELD
YES
Ratio Indeed, an employer, in the exercise of its management
prerogative, may hire an employee on a probationary basis in
order to determine his fitness to perform work. Under Article
281 of the Labor Code, the employer must inform the employee
of the standards for which his employment may be considered
for regularization. Such probationary period, unless covered by
an apprenticeship agreement, shall not exceed six (6) months
from the date the employee started working. The employee’s
services may be terminated for just cause or for his failure to
qualify as a regular employee based on reasonable standards
made known to him. Respondent Paras was employed as a
management trainee on a probationary basis. During the
orientation conducted on May 15, 1996, he was apprised of the
standards upon which his regularization would be based. He
reported for work on May 27, 1996. As per the company’s
policy, the probationary period was from 3 months to a
maximum of 6 months. As clearly provided for in the last
paragraph of Article 13, in computing a period, the first day
shall be excluded and the last day included. Thus, the one
hundred eighty (180) days commenced on May 27, 1996, and
ended on November 23, 1996. The termination letter dated
November 25, 1996 was served on respondent Paras only at
3:00 a.m. of November 26, 1996. He was, by then, already a
regular employee of the petitioner under A281 LC
Reasoning
- The basis for which respondent Paras’ services were
terminated was his alleged unsatisfactory rating arising from
poor performance. It is a settled doctrine that the employer has
the burden of proving the lawfulness of his employee’s
dismissal. The validity of the charge must be clearly
established in a manner consistent with due process.Under
Article 282 of the Labor Code, an unsatisfactory rating can be a
just cause for dismissal only if it amounts to gross and habitual
neglect of duties. A careful perusal of the records of this case
does not show that respondent Paras was grossly negligent in
the performance of his duties. Considering that respondent
Paras was not dismissed for a just or authorized cause, his
dismissal from employment was illegal. Furthermore, the
petitioner’s failure to inform him of any charges against him
deprived him of due process. Clearly, the termination of his
employment based on his alleged unsatisfactory performance
rating was effected merely to cover up and “deodorize” the
illegality of his dismissal.
Disposition Petition is PARTIALLY GRANTED. The
September 13, 2000 Decision of the Court of Appeals in CA–GR
SP No. 46030 is hereby AFFIRMED WITH MODIFICATIONS.
The petitioner is ORDERED to pay respondent Nelson Paras
separation pay equivalent to one (1) month, or to at least one-
half (1/2) month pay for every year of service, whichever is
higher, a fraction of at least six (6) months to be considered as
one year; and to pay full backwages, computed from the
time of his dismissal up to March 25, 1998. That portion of
the decision of the Court of Appeals directing the reinstatement
of the respondent Paras is DELETED.
Labor Law 1
DURATION/EXCEPTION
BUISER V LEOGARDO
131 SCRA 151
GUERRERO; July 31, 1984
FACTS
- Petitioners were employed by the private respondent
GENERAL TELEPHONE DIRECTORY COMPANY as sales
representatives and charged with the duty of soliciting
advertisements for inclusion in a telephone directory.
- The records show that petitioners Iluminada Ver Buiser and
Ma. Mercedes P. Intengan entered into an "Employment
Contract (on Probationary Status)" on May 26, 1980 with private
respondent, a corporation engaged in the business of
publication and circulation of the directory of the Philippine
Long Distance Telephone Company. Petitioner Ma. Cecilia Rillo-
Acuna entered into the same employment contract on June 11,
1980 with the private respondent.
Among others, the "Employment Contract (On Probationary
Status)" included the following common provisions:
The company hereby employs the employee as telephone
representative on a probationary status for a period of
eighteen (18) months, i.e. from May 1980 to October 1981,
inclusive. It is understood that daring the probationary period
of employment, the Employee may be terminated at the
pleasure of the company without the necessity of giving
notice of termination or the payment of termination pay.
The Employee recognizes the fact that the nature of the
telephone sales representative's job is such that the company
would be able to determine his true character, conduct and
selling capabilities only after the publication of the directory,
and that it takes about eighteen (18) months before his worth
as a telephone saw representative can be fully evaluated
inasmuch as the advertisement solicited by him for a
particular year are published in the directory only the
following year.
- Private respondent prescribed sales quotas to be
accomplished or met by the petitioners. Failing to meet their
respective sales quotas, the petitioners were dismissed from
the service by the private respondent.
ISSUE
1. WON the probationary employment of petitioners herein is
eighteen (18) months instead of the mandated six (6) months
under the Labor Code, and WON petitioners are entitled to
security of tenure while under said probation for 18 months
2. WON petitioners were dismissed for a just and valid cause
HELD
1. Generally, the probationary period of employment is limited
to six (6) months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such
as when the same is established by company policy or when the
same is required by the nature of work to be performed by the
employee.
- In the latter case, there is recognition of the exercise of
managerial prerogatives in requiring a longer period of
probationary employment, such as in the present case where
the probationary period was set for eighteen (18) months, i.e.
from May, 1980 to October, 1981 inclusive, especially where
the employee must learn a particular kind of work such as
selling, or when the job requires certain qualifications, skills,
experience or training.
- In the case at bar, it is shown that private respondent
Company needs at least eighteen (18) months to determine the
character and selling capabilities of the petitioners as sales
representatives. The Company is engaged in advertisement and
publication in the Yellow Pages of the PLDT Telephone
Directories. Publication of solicited ads are only made a year
A2010 - 106 - Disini
after the sale has been made and only then win the company
be able to evaluate the efficiency, conduct, and selling ability of
its sales representatives, the evaluation being based on the
published ads. Moreover, an eighteen month probationary
period is recognized by the Labor Union in the private
respondent company, which is Article V of the Collective
Bargaining Agreement.
2. YES
- The practice of a company in laying off workers because they
failed to make the work quota has been recognized in this
jurisdiction. (Philippine American Embroideries vs. Embroidery
and Garment Workers, 26 SCRA 634, 639).
- In the case at bar, the petitioners' failure to meet the sales
quota assigned to each of them constitute a just cause of their
dismissal, regardless of the permanent or probationary status of
their employment. Failure to observe prescribed standards of
work, or to fulfill reasonable work assignments due to
inefficiency may constitute just cause for dismissal.
- Such inefficiency is understood to mean failure to attain work
goals or work quotas, either by failing to complete the same
within the alloted reasonable period, or by producing
unsatisfactory results. This management prerogative of
requiring standards availed of so long as they are exercised in
good faith for the advancement of the employer's interest.
INTERNATIONAL CATHOLIC MIGRATION
COMMISSION V NLRC (GALANG)
[PAGE 98]
HOLIDAY INN MANILA V NLRC (HONASAN)
226 SCRA 417
AUSTRIA-MARTINEZ; July 12, 2006
NATURE
Appeal from a decision of the CA
FACTS
- Private respondent Gervasio Rosaroso was employed as a
Third Engineer with Nicolakis Shipping, S.A., a foreign firm
through its recruitment and manning agency, petitioner
Skippers. The employment contract was for the period of one
year beginning July 10, 1997 with a salary of $800 per month
and other benefits. Rosaroso boarded M/V Naval Gent on July
15, 1997. He was however ordered to disembark in Bulgaria on
August 7, 1997 and repatriated to the Philippines.
- Soon after arrival in Manila, respondent filed a complaint for
illegal dismissal and monetary claims. The Labor Arbiter found
the respondent was in fact illegally dismissed and issued an
order directing petitioner, Skippers, to pay Rosaroso separation
pay of $2,4000 or the equivalent of P100,000, representing
three months pay and unpaid salary for seven days of $186.69
or the equivalent of P7,840.98. Atorney’s fees of P5,000 was
also awarded. The NLRC and the CA affirmed en toto the ruling
of the Arbiter.
- Hence this appeal to the SC.
ISSUE
WON private respondent Rosaroso was illegal dismissed
HELD
YES
- The employer of Rosaroso did not provide the quantum of
evidence needed to prove that dismissal was in fact for cause.
The evidence presented was just a telefax coming from the
alleged Chief Engineer of the vessel which the Arbiter up to the
CA considered as mere hearsay. While the Master of the vessel
was grated under Paragraph D of Section 17 of the Philippine
Overseas employment Administration (POEA) Standard
Employment condition governing the employment of Filipino
Seafarers on Board Ocean Going Vessels the power to dismiss
Labor Law 1
for just cause without furnishing the seafarer with a notice of
dismissal if doing so will prejudice the safety of the crew and
the vessel, the SC noted that the complete report on the
circumstances of the dismissal was not forwarded to the
manning agency as called for under the same provision.
Minor issues
- The award of backwages and separation pay in lieu of
reinstatement as provided for in Article 279 of the Labor Code is
not applicable in this case. The Seafarer is a contractual
employee whose rights and obligations are governed by the
POEA Employment Contract and by RA 8042 (1995). The
Employment contract does not provide for the award of
separation or termination pay. However, under Section 10 of RA
8042 the award of money claims in cases of illegal dismissal is
allowed. Under this provision, an illegal dismissed seafarer is
entitled to indemnity equivalent to his salary for the unexpired
term of his employment contract or three months for every year
of the unexpired term, whichever is less.
- The award by the Arbiter of the peso equivalent of the dollar
awards cannot be enforced as the same is contrary to law. The
peso equivalent must be computed at the exchange rate
computed at the time of payment as provided for by RA 8183.
Disposition The questioned decision is affirmed with the
modification that the dollar award should be payable in its peso
equivalent computed at the prevailing rate of exchange at the
time of payment.
BERNARDO V NLRC (FAR EAST BANK AND TRUST
COMPANY)
310 SCRA 186
PANGANIBAN; July 12, 1999
NATURE
Petition for Certiorari of June 20, 1995 Decision of NLRC which
affirmed the August, 22 1994 ruling of Labor Arbiter Linsangan
and August 4, 1995 Resolution of NLRC denying the MFR
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".
In compliance with Article 80 of the Labor Code of the
Philippines as amended, the BANK and the EMPLOYEE have
entered into this Employment Contract as follows:
1. The BANK agrees to employ and train the EMPLOYEE, and the
EMPLOYEE agrees to diligently and faithfully work with the
BANK, as Money Sorter and Counter.
2. The EMPLOYEE shall perform among others, the following
duties and responsibilities:
i. Sort out bills according to color;
ii. Count each denomination per hundred, either manually or
with the aid of a counting machine;
iii. Wrap and label bills per hundred;
iv. Put the wrapped bills into bundles; and
v. Submit bundled bills to the bank teller for verification.
3. The EMPLOYEE shall undergo a training period of one (1)
month, after which the BANK shall determine whether or not
he/she should be allowed to finish the remaining term of this
Contract.
4. The EMPLOYEE shall be entitled to an initial compensation of
P118.00 per day, subject to adjustment in the sole judgment of
the BANK, payable every 15th and end of the month
5. The regular work schedule of the EMPLOYEE shall be five (5)
days per week, from Mondays thru Fridays, at eight (8) hours a
day. The EMPLOYEE may be required to perform overtime work
as circumstance may warrant, for which overtime work he/she
[shall] be paid an additional compensation of 125% of his daily
rate if performed during ordinary days and 130% if performed
during Saturday or [a] rest day.
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6. The EMPLOYEE shall likewise be entitled to the following
benefits:
i. Proportionate 13th month pay based on his basic daily
wage.
ii. Five (5) days incentive leave.
iii. SSS premium payment.
7. The EMPLOYEE binds himself/herself to abide [by] and
comply with all the BANK Rules and Regulations and Policies,
and to conduct himself/herself in a manner expected of all
employees of the BANK.
8. The EMPLOYEE acknowledges the fact that he/she had been
employed under a special employment program of the BANK,
for which reason the standard hiring requirements of the BANK
were not applied in his/her case.
9. The Employment Contract shall be for a period of six (6)
months unless earlier terminated by the BANK for any just or
reasonable cause.
- DEAF-MUTES HIRED
> 1988 - 2
> 1989 – 2
> 1990 – 19
> 1991 – 6
> 1992 – 6
> 1993 – 21
TOTAL: 56 (last: Thelma Malindoy who was employed in 1992
and whose contract expired on July 1993)
- FAR EAST states:
> disclaimed that BERNARDO ET AL were regular employees
AND that they are a special class of workers — the hearing
impaired employees
> BERNARDO ET AL were hired temporarily under a special
employment arrangement which was a result of overtures made
by some civic and political personalities to the Bank
> BERNARDO ET AL were hired due to "pakiusap" which must
be considered in the light of the context 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
> 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
> counting and sorting of money are tellering works which were
always logically and naturally part and parcel of the tellers'
normal functions
> the tellers themselves already did the sorting and counting
chore as a regular feature and integral part of their duties >
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 FAR EAST or any other Bank in the Philippines
which deals with purely counting and sorting of bills in banking
operations.
- NLRC: affirmed ruling of the labor arbiter that BERNARDO ET
AL could not be deemed regular employees under A280 LC;
gave credence to conclusion that BERNARDO ET AL were hired
as an accommodation to recommendation of civic oriented
personalities; the terms of the contract shall be the law
between the parties; AND Magna Carta for Disabled Persons is
not applicable, "considering the prevailing circumstances/milieu
of the case."
ISSUES
WON NLRC is guilty of grave abuse of discretion in holding that
1. money sorters and counters working in a bank are not
regular employees
2. employment contracts signed and renewed by the
petitioners, which provide for a period of 6 months, were valid
3. not applying the provisions of the Magna Carta for the
Disabled (RA 7277), on proscription against discrimination
against disabled persons.
HELD
Labor Law 1
Preliminary Matter
- Propriety of Certiorari: the Court, as a rule, does not review
the factual findings of public respondents in a certiorari
proceeding. In resolving whether the petitioners have become
regular employees, SC shall not change the facts found by
NLRC. SC’s task is merely to determine whether the NLRC
committed grave abuse of discretion in applying the law to the
established facts
1. YES. Only the employees, who worked for more than 6
months and whose contracts were renewed are deemed
regular. Hence, their dismissal from employment was illegal.
Reasoning
- According to FAR EAST, the employment contracts were
prepared in accordance with A80 LC, which provides
Art. 80. Employment agreement. — Any employer who
employs handicapped workers shall enter into an
employment agreement with them, which agreement shall
include:
(a) The names and addresses of the handicapped workers to
be employed;
(b) The rate to be paid the handicapped workers which shall
be not less than seventy five (75%) per cent of the applicable
legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by
the Secretary of Labor or his duly authorized representatives.
- However, succeeding events and the enactment of RA No.
7277 (the Magna Carta for Disabled Persons) justify the
application of A280 LC.
- FAR EAST entered into contract with a total of 56 handicapped
workers and renewed the contracts of 37 of them. In fact, two of
them worked from 1988 to 1993. Verily, the renewal of the
contracts of the handicapped workers and the hiring of others
lead to the conclusion that their tasks were beneficial and
necessary to the bank. More important, these facts show that
they were qualified to perform the responsibilities of their
positions. In other words, their disability did not render them
unqualified or unfit for the tasks assigned to them.
- Magna Carta for Disabled Persons mandates that a qualified
disabled employee should be given the same terms and
conditions of employment as a qualified able-bodied person.
- Section 5 of the Magna Carta provides:
Sec. 5. Equal Opportunity for Employment. — No disabled
person shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject
to the same terms and conditions of employment and the
same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.
- Since the Magna Carta accords them the rights of qualified
able-bodied persons, they are thus covered by Article 280 of the
Labor Code, which provides:
Art. 280. Regular and Casual Employment. — The provisions
of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the
employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the work or services
to be performed is seasonal in nature and the employment is
for the duration of the season.
An employment shall be deemed to be casual if it is not
covered by the preceding paragraph: Provided, That, any
employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be
considered as regular employee with respect to the activity in
which he is employed and his employment shall continue
while such activity exists.
- The test of whether an employee is regular
> De Leon v. NLRC: The primary standard, therefore, of
determining regular employment is the reasonable connection
A2010 - 108 - Disini
between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test
is whether the former is usually necessary or desirable in the
usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed
and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing
the job for at least one year, even if the performance is not
continuous and merely intermittent, the law deems repeated
and continuing need for its performance as sufficient evidence
of the necessity if not indispensibility of that activity to the
business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exist.
- The task of counting and sorting bills is necessary and
desirable to the business of respondent bank. With the
exception of sixteen of them, BERNARDO ET AL performed
these tasks for more than six months.
- As held by the Court, "Articles 280 and 281 of the Labor Code
put an end to the pernicious practice of making permanent
casuals of our lowly employees by the simple expedient of
extending to them probationary appointments, ad infinitum."
The contract signed by petitioners is akin to a probationary
employment, during which the bank determined the employees'
fitness for the job. When the bank renewed the contract after
the lapse of the six-month probationary period, the employees
thereby became regular employees. No employer is allowed to
determine indefinitely the fitness of its employees.
- As regular employees, the 27 petitioners are entitled to
security of tenure; that is, their services may be terminated
only for a just or authorized cause. Therefore, when FAR EAST
failed to show such cause, they are deemed illegally dismissed
and entitled to back wages and reinstatement without loss of
seniority rights and other privileges. Considering that the job of
money sorting is no longer available because it has been
assigned back to the tellers to whom it originally belonged,
petitioners are hereby awarded separation pay in lieu of
reinstatement.
2. YES
- Brent Ruling, which upheld the validity of an employment
contract with a fixed term, is not applicable. The term limit in
the contract was premised on the fact that the petitioners were
disabled, and that the bank had to determine their fitness for
the position. Its validity is based on A80 LC. Petitioners proved
themselves to be qualified disabled persons who, under the
Magna Carta for Disabled Persons, are entitled to terms and
conditions of employment enjoyed by qualified able-bodied
individuals; hence, A80 does not apply.
- Moreover, it must be emphasized that a contract of
employment is impressed with public interest. Provisions of
applicable statutes are deemed written into the contract, and
the "parties are not at liberty to insulate themselves and their
relationships from the impact of labor laws and regulations by
simply contracting with each other." 23 Clearly, the agreement
of the parties regarding the period of employment cannot
prevail over the provisions of the Magna Carta for Disabled
Persons, which mandate that petitioners must be treated as
qualified able-bodied employees.
- Because sorting is done in the nighttime, FAR EAST contended
that this task "could not be done by deaf mutes because of their
physical limitations as it is very risky for them to travel at
night." But the court found no basis in this because traveling at
night involves risks to handicapped and able-bodied persons
alike
- Datu v. NLRC: the determination of whether employment is
casual or regular does not depend on the will or word of the
employer, and the procedure of hiring . . . but on the nature of
the activities performed by the employee, and to some extent,
the length of performance and its continued existence.
- The well-settled rule is that the character of employment is
determined not by stipulations in the contract, but by the
nature of the work performed. Otherwise, no employee can
become regular by the simple expedient of incorporating this
condition in the contract of employment.
Labor Law 1
> Romares v. NLRC: A280 was emplaced in our statute books to
prevent the circumvention of the employee's right to be secure
in his tenure by indiscriminately and completely ruling out all
written and oral agreements inconsistent with the concept of
regular employment defined therein. Where an employee has
been engaged to perform activities which are usually necessary
or desirable in the usual business of the employer, such
employee is deemed a regular employee and is entitled to
security of tenure notwithstanding the contrary provisions of his
contract of employment.
3. YES
- 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.
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.
Disposition Petition is hereby GRANTED. The June 20, 1995
Decision and the August 4, 1995 Resolution of the NLRC are
REVERSED and SET ASIDE. Respondent Far East Bank and Trust
Company is hereby ORDERED to pay back wages and
separation pay to each of the following twenty-seven (27)
petitioners
MITSUBISHI MOTORS CORP V CHRYSLER PHIL
LABOR UNION
[PAGE 102]
ALCIRA V NLRC
(MIDDLEBY PHILS/THOMAS, PENA, MAMARADLO)
431 SCRA 508
CORONA; June 9, 2004
NATURE
Appeal from decision of CA (dismissing complaint for illegal
dismissal)
FACTS
- Alcira was hired by Middleby as an engineering support
services supervisor on a probationary basis for 6 months.
Apparently unhappy with Alcira’s performance, the company
terminated Alcira’s services. The issue arises on whether the
termination occurred before or after the 6-month probationary
period.
- Alcira: he was hired on May 20, 1996
- Middleby: Alcira was hired May 27, 1996
- The appointment paper indicated that the status was
“probationary (6mos)” and a remark that “after 5 mos,
performance shall be evaluated and any adjustment shall
depend on work performance”
- On November 20, 1996, Alcira was not allowed to work
(allegedly by withholding of his time card by a senior officer).
- Alcira filed a complaint with the Labor Arbiter, contending that
he was already a regular employee as of the date he was
dismissed. (he computed the 6mos probationary period as
30days x 6 mos = 180 days, thus coming to the conclusion that
the period ended on the 180th day after the day of
employment).
- The company (and its officers, herein private respondents)
presented evidence that showed Alcira’s poor performance,
tardiness, absences, and violations of company rules on
wearing of uniform during the probationary period, and said
that since he failed to meet the standards, Alcira’s application
to become a regular employee was denied.
LA, NLRC, and CA all ruled in favor of the company, upholding
the validity of the dismissal.
- Central to the matter at hand is art. 281 of Labor Code:
ART. 281. PROBATIONARY EMPLOYMENT. Probationary
employment shall not exceed six (6) months from the date
the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
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services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to
the employee at the time of his engagement. An employee
who is allowed to work after a probationary period shall be
considered a regular employee.
ISSUES
1. WON petitioner was allowed to work beyond his probationary
period, and was therefore already a regular employee at the
time of his dismissal
2. WON Middleby informed petitioner of standards for
regularization at the start of his employment
3. WON Alcira was illegally dismissed when Middleby opted not
to renew his contract on the last day of the probationary period
HELD
1. NO
Ratio Computation of the 6-month probationary period is
reckoned from the date of appointment up to the same
calendar date of the 6th month following, thus dismissal on
November 20, 1996 was well within the probationary period.
Reasoning
- the computation of Alcira (using 30 days x 6 months = 180
days) is wrong. As held in CALS Poultry Supply Corp v Roco:
(O)ur computation of the 6-month probationary period is
reckoned from the date of appointment up to the same
calendar date of the 6th month following.
- In short, since the number of days in each particular month
was irrelevant, Alcira was still a probationary employee when
Middleby opted not to "regularize" him on November 20, 1996.
2. YES
Ratio An employer is deemed to substantially comply with the
rule on notification of standards if he apprises the employee
that he will be subjected to a performance evaluation on a
particular date after his hiring.
Reasoning
- Middleby substantially notified the petitioner of the standards
of a regular employee when it apprised him, at the start of his
employment, that it would evaluate his supervisory skills after 5
months.
- That the appointment paper contained the remark that Alcira
would be subjected to a performance evaluation is enough
notice that the probationary basis of his employment was
conditional (conditioned upon his meeting of performance
standards)
3. NO
Ratio Although probationary employees are also accorded
security of tenure, this protection ends upon expiration of the
probationary period.
Reasoning
- It is settled that even if probationary employees do not enjoy
permanent status, they are accorded the constitutional
protection of security of tenure. This means they may only be
terminated for just cause or when they otherwise fail to qualify
as regular employees in accordance with reasonable standards
made known to them by the employer at the time of their
engagement.
- But we have also ruled in Manlimos, et. al. vs. National Labor
Relations Commission that this constitutional protection ends
on the expiration of the probationary period. On that date, the
parties are free to either renew or terminate their contract of
employment.
In this case, Middleby exercised its option not to renew the
contract when it informed Alcira on the last day of his
probationary employment that it did not intend to grant him a
regular status.
Disposition Petition DENIED.
CRITERIA REGULARIZATION
Labor Law 1
ALCIRA V NLRC
(MIDDLEBY PHILS/THOMAS, PENA, MAMARADLO)
[PAGE105]
EXTENSION OF CONTRACT
MARIWASA V LEOGARDO
169 SCRA 465
NARVASA; January 26, 1989
NATURE
Certiorari
FACTS
- Dequila was hired on probation by Mariwasa as a general
utility worker on Jan.10, 1979. After the probationary period of
six months, MAriwasa informed him that his work had proved
unsatisfactory and had failed to meet the required standards
and to give him a chance to improve his performance and
qualify for regular employment, instead of dispensing with his
service then and there, with his written consent Mariwasa
extended his probation period for another three months from
July 10 to October 9, 1979. His performance, however, did not
improve and on that account Mariwasa terminated his
employment at the end of the extended period.
ISSUE
WON employer and employee may by agreement extend the
probationary period of employment beyond the six months
prescribed in A282 LC
HELD
YES
- An extension of the probationary period of employment may
lawfully be covenanted, notwithstanding the seemingly
restrictive language of Article 282.
Reasoning
- Buiser vs. Leogardo, Jr . recognized agreements stipulating
longer probationary periods as constituting lawful exceptions to
the statutory prescription limiting such periods to six months,
when it upheld as valid an employment contract between an
employer and two of its employees that provided for an
eigthteen-month probation period. This Court there held:
- Generally, the probationary period of employment is limited to
six (6) months. The exception to this general rule is when the
parties to an employment contract may agree otherwise, such
as when the same is established by company policy or when the
same is required by the nature of work to be performed by the
employee. In the latter case, there is recognition of the exercise
of managerial prerogatives in requiring a longer period of
probationary employment.xxxxxx especially where the
employee must learn a particular kind of work such as selling,
or when the job requires certain qualifications, skills experience
or training.
- In this case the inability of the probationer to make the grade
became apparent only at or about the end of the six-month
period, hence an extension could not have been pre-arranged
as was done in Buiser assumes no adverse significance, given
the lack, of any indication that the extension to which Dequila
gave his agreement was a mere stratagem of petitioners to
avoid the legal consequences of a probationary period
satisfactorily completed. For the extension of Dequila's
probation was ex gratia, an act of liberality on the part of his
employer affording him a second chance to make good after
having initially failed to prove his worth as an employee. Such
an act cannot now unjustly be turned against said employer's
account to compel it to keep on its payroll one who could not
A2010 - 110 - Disini
perform according to its work standards. The law, surely, was
never meant to produce such an inequitable result.
- By voluntarily agreeing to an extension of the probationary
period, Dequila in effect waived any benefit attaching to the
completion of said period if he still failed to make the grade
during the period of extension. The Court finds nothing in the
law which by any fair interpretation prohibits such a waiver. And
no public policy protecting the employee and the security of his
tenure is served by prescribing voluntary agreements which, by
reasonably extending the period of probation, actually improve
and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
ABSORBED EMPLOYEES
CEBU STEVEDORING CO INC V REGIONAL
DIRECTOR
168 SCRA 315
REGALADO; December 8, 1988
FACTS
- Complainants Gelig and Quijano (COMPLAINANTS) were former
employees of the Cebu Customs Arrastre Service (CCAS).
Pursuant to an Administrative Order by the Bureau of Customs,
CCAS was abolished "for the reason that the objectives for
which it was created had already been attained". Consequently,
all the employees of CCAS, including COMPLAINANTS, were
given their termination separation pay by the Bureau.
- After the abolition, all the employees of CCAS, including
COMPLAINANTS, were absorbed by CSCI with the same
positions that they held in the CCAS. Almost 6 months later,
however, COMPLAINANTS were dismissed by CSCI without prior
clearance. COMPLAINANTS consequently filed an action for
reinstatement with backwages with the Labor Regional Office.
The Regional Director ruled in COMPLAINANTS’ favor, which
ruling was affirmed on appeal by the then Ministry of Labor and,
subsequently, by the Office of the President.
ISSUES
1. WON the CSCI was denied due process due to the lack of
hearing before the Regional Director and COMPLAINANTS’
failure to file their respective position papers
2. WON the COMPLAINANTS were merely casuals and could,
therefore, be terminated even without prior clearance from the
then Ministry of Labor and without entitlement to separation
pay
3. WON the positions occupied by COMPLAINANTS with CCAS
are identical with the positions already filled up and being
discharged in the main office of CSCI, COMPLAINANTS may be
terminated for redundancy
HELD
1. NO
- The right to be heard, as a preliminary step essential to the
rendition of an enforceable judgment, constitutes a basic
element of the constitutional requirement of due process of law.
However, while CSCI was not afforded an opportunity to be
heard by oral argument on its position paper due to its absence
at the scheduled hearing, it is likewise true that it was required
to, as in fact it actually did, submit a position paper which,
together with the evidence presented during the hearing,
Labor Law 1
became the basis of the questioned order of the Regional
Director. From this order, CSCI appealed to the Labor Minister,
and then to the Office of the President. It is, therefore, apparent
that CSCI was not denied adequate remedies from the alleged
procedural infirmities surrounding the Regional Director's order.
The entire record of the case was reviewed and duly considered
on appeal, which appellate proceeding remedied any
inadequacy in the procedural due process with which the trial
proceedings are being faulted.
2. NO
- We agree with the Regional Director that COMPLAINANTS
could not be considered probationary employees because they
were already well-trained in their respective functions. While
COMPLAINANTS were still with the CCAS they were already
clerks with 10 years of service, on the average. They were,
therefore, experienced workers. Findings of quasi-judicial
agencies (like the Labor Regional Office) which have acquired
expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but, at times,
even finality where such findings are supported by substantial
evidence.
3. NO
- Despite Art. 283’s provision on termination of employment
due to redundancy and retrenchment, records fail to establish
clearly that the positions occupied by COMPLAINANTS are
identical with those presently existing in CSCI's office. CSCI also
kept COMPLAINANTS in its employ for almost 6 months without
raising this issue. CSCI does not mention which positions are
allegedly duplicated by the positions held by COMPLAINANTS.
CSCI does not even explain why COMPLAINANTS should be the
ones to be terminated, without regard to the comparative
lengths of service, qualifications and performance of all
employees concerned.
- CSCI’s claim of financial losses is untenable since it appears
that it absorbed and employed for almost 6 months, without
any intimation of supposed financial distress, the majority of the
former employees of CCAS. It never advised COMPLAINANTS of
a company retrenchment program; the first time this supposed
program was mentioned was when CSCI was trying to justify the
dismissal of COMPLAINANTS before the labor arbiter. CSCI
presented a Statement of Operations, which, however, remains
an uncorroborated and self-serving piece of evidence.
Disposition Petition DISMISSED. COMPLAINANTS ordered
reinstated with backwages. In the event reinstatement becomes
impossible, COMPLAINANTS to be given 1-month-salary worth of
separation pay.
DOUBLE PROBATION
A’ PRIME SECURITY SERVICES INC V NLRC
(GUANIO, MORENO)
322 SCRA 283
PURISIMA; January 19, 2000
NATURE
A special civil action for certiorari seeks to annul the decision of
the NLRC
FACTS
- The complaint alleged, among others, that complainant
(Othello C. Moreno) had been working as a security guard for a
year with the Sugarland Security Services, Inc., a sister
company of petitioner; that he was rehired as a security guard
on January 30, 1988 by the petitioner and assigned to the same
post at the U.S. Embassy Building; that he was among those
absorbed by the petitioner when it took over the security
contracts of its sister company with the U.S. Embassy; that he
was forced by petitioner to sign new probationary contracts of
employment for 6 months; that on August 1, 1988, his
employment was terminated; that during his employment, the
amount of P20.00 per month was deducted from his salary
A2010 - 111 - Disini
allegedly for withholding tax, and the salary he was receiving
was only P2,187.00 a month, which was way below the
P2,410.17 stipulated in the PADPAO memorandum of
agreement.
- Petitioner alleged that the private respondent was hired on
January 30, 1988, on a probationary basis, and he signed an
authority to deduct from his salary any reimbursement for any
loss or damage caused to properties of the client; that he was
given a copy of petitioner’s rules and regulations which provide
that sleeping on post is punishable by warning, suspension and
dismissal and he was caught sleeping on post on March 17,
1988, for which he was sent a memorandum giving him a last
warning; that on March 25, 1988, he figured in a quarrel with
another security guard, which resulted in a near shootout; that
at the end of his probationary employment, he was given a
psychological test and on the basis of the foregoing, petitioner
told him that his probationary employment had come to an end
as he did not pass the company standard and therefore, he
could not be hired as a regular employee.
- LA Guanio handed down a decision in favor of complainant.
The respondent was ordered to reinstate the complainant to his
former position and accord to him the status of a regular
employee, and to refund to the complainant the deduction it
had made from his salary in the amount of P20.00 per month.
The claim of the complainant for underpayment of wages is
dismissed for lack of merit.
- NLRC affirmed the decision with a slight modification: the
refund of the deductions made by respondent from
complainant’s salaries in the amount of P20.00 per month was
vacated and set aside.
ISSUES
1. WON private respondent’s employment with A’ Prime
Security Services, Inc. was just a continuation of his
employment with Sugarland Security Services, Inc
2. WON private respondent is a regular employee of petitioner
3. WON private respondent’s dismissal is illegal
HELD
1. YES
Ratio The Court cannot sanction the practice of some
companies which, shortly after a worker has become a regular
employee, effects the transfer of the same employee to another
entity whose owners are the same, or identical, in order to
deprive subject employee of the benefits and protection he is
entitled to under the law.
Reasoning
- The allegations of the private respondent that Sugarland is a
sister company of A’ Prime and that the latter absorbed the
security contracts and security guards of Sugarland with the
U.S. Embassy were neither denied nor controverted by the
petitioner before the Labor Arbiter.
- Petitioner’s failure to deny that Sugarland is its sister company
and that petitioner absorbed Sugarland’s security contract and
security personnel assumes overriding significance over the
resignation theorized upon, evincing petitioner’s design to
ignore or violate labor laws through the use of the veil of
corporate personality.
2. YES
Ratio The complainant became a regular employee upon
completion of his six-month period of probation. Private
respondent started working on January 30, 1988 and completed
the said period of probation on July 27, 1988. Thus, at the time
private respondent was dismissed on August 1, 1988, he was
already a regular employee with a security of tenure. He could
only be dismissed for a just and authorized cause.
- There is no basis for subjecting private respondent to a new
probationary or temporary employment on January 30, 1988,
considering that he was already a regular employee when he
was absorbed by A’ Prime from Sugarland, its sister company.
3. YES
Ratio The dismissal of complainant, a regular employee, was
sans any just, legal and valid basis. What is more, he was not
Labor Law 1
given a chance to contest his dismissal. He was deprived of an
opportunity to be heard.
Reasoning
- The dismissal of private respondent was presumably based on
the results of his behavioral and neuropsychological tests and
on his violation of a company rule on sleeping on post.
- With respect to the behavioral and neuropsychological tests,
the Court agrees with NLRC’s assessment: "Complainant’s
result of his behavioral research and neuropsychological test to
our mind, is of no moment, considering that the said test
appeared to have been conveniently contrived to be conducted,
and the result produced on the very day of his dismissal, in
question.
- So also, private respondent’s alleged violations of sleeping on
post, and quarrelling with a co-worker, may not be proper
grounds for dismissal, as the same were first infractions.
Circular No. I of A’ Prime, governing discipline, suspension and
separation from the service of security guards, provides:
"SECTION VIII - SLEEPING ON POST
1st Offense........- Warning
2nd Offense.......- 30 days suspension without pay
3rd Offense........- Dismissal
SECTION IX - CHALLENGING A POSTED SECURITY/LADY
GUARD AND SUPERIORS
1st Offense - One (1) month suspension
2nd Offense – Dismissal
- As the infractions of Sections VIII and IX of Circular No. 1 by
private respondent were first offenses, they were not
punishable by dismissal. They were not valid grounds for
terminating the employment of private respondent.
Disposition petition is DISMISSED
TERMINATION AND SALARY
INTERNATIONAL CATHOLIC MIGRATION
COMMISSION V NLRC (GALANG)
[PAGE 98]
ORIENT EXPRESS PLACEMENT PHILIPPINES V NLRC
(POEA, FLORES)
[PAGE 102]
DELA CRUZ V NLRC
[PAGE 100]
RULE PRIVATE SCHOOL TEACHERS
CHIANG KAI SHEK COLLEGE V CA (NLRC,
CALAYLAY, AQUINO, GACUTAN, BELO)
[PAGE 40]
LA CONSOLACION COLLEGE V NLRC
366 SCRA 226
PARDO; September 28, 2001
NATURE
Petition for certiorari with preliminary injunction or restraining
order
FACTS
- Respondent Jose de la Peña was initially employed by La
Consolacion College (LCC) as a CAT Commandant for the school
year 1975-1976 & lasted until Sept. 1979, after which he
resigned. Prior to resignation & despite demands by LCC for him
to submit a syllabi in YDT and CAT containing course objectives,
A2010 - 112 - Disini
subject matter, content, concepts, skills activities & evaluation,
de la Peña failed to comply.
- 11 years later, or on Dec.2, 1991, respondent applied to the
LCC again, for the positions of CAT Commander. He was
appointed instead as classroom teacher in P.E. and health. The
written contract of employment between LCC & respondent
expressly provided that the employment was for 1 academic
year, from June 19992 - March 1993, & the same was accepted
by respondent.
- July 1992: A reminder was sent to respondent by the academic
evaluation team regarding the school’s standard procedures:
timely submission of lesson plans, class records & attendance
at regular meetings which respondent defied & continued to
ignore even after having been reminded. In an emergency
meeting of faculty members, respondent berated one
Bayoguing, a member of the academic evaluation team &
threatened him with bodily harm, although no untoward
incident ensued.
- As his contract was only for one academic school year, de la
Peña applied for reinstatement in Feb. 1993 but the same was
denied by the academic team because of his unsatisfactory
performance.
- Respondent then filed a complaint in the Regional Arbitration
Bacolod Branch for illegal dismissal against LCC & members of
the academic team. The Labor Arbiter (LA) dismissed this
complaint. On appeal, the NLRC reversed the LA’s decision and
held that respondent attained regular status at the time he was
dismissed & that LCC failed to prove just cause for his dismissal.
Petitioner LCC then filed a MFR to the NLRC which was denied,
hence this petition.
ISSUE
WON de la Peña was a permanent employee of LCC
HELD
NO. He did not attain permanent status.
Ratio In resolving issues regarding security of tenure of private
school teachers, it is the Manual of Regulations for Private
Schools, not the Labor Code, which is applicable.
Reasoning
- For a private school teacher to acquire permanent status in
employment the following must concur: (1) The teacher is a full-
time teacher; (2) The teacher must have rendered 3
consecutive yrs. of service; (3) Such service must have been
satisfactory
- The written contract of respondent stated that he shall be
employed by the LCC for the school year June 1992 - March
1993, a fixed term of 10 mos. Clearly, the employment was not
permanent but for a specified duration of one school year.
Respondent was a new hire having previously resigned & never
denied the fact that he failed to comply with the requirements
of the school.
Disposition Petition granted, NLRC decision reversed and set
aside.
PART TWO
LABOR STANDARDS LAW
PURPOSE
MARIVELES SHIPYARD CORP V CA (REGONDOLA)
415 SCRA 573
QUISUMBING; November 11, 2003
NATURE
Petition for review on certiorari of the decision of the CA
FACTS
Labor Law 1
- In Oct 1993, Mariveles Shipyard Corp engaged the services of
Longest Force Investigation and Security Agency, Inc. to render
security services at the former’s premises.
- Petitioner religiously complied with the terms and conditions
of the security contract with Longest Force, promptly paying its
bills and contract rates. However, it found the services being
rendered by the assigned guards unsatisfactory and
inadequate, causing Mariveles Shipyard Corp to terminate its
contract with Longest Force on April 1995. Longest Force, in
turn, terminated the employment of the security guards it had
deployed at the shipyard.
- Private respondents filed a case with the Labor Arbiter.
Longest Force, in turn, filed a cross-claim against Mariveles
Shipyard.
- Longest force admitted the following:
> that it employed private respondents as security guards
and assigned them to work at petitioner’s shipyard, rendering
12 hours duty per shift
> it is liable as to the non-payment of the alleged wage
differential, but passed liability to petitioner alleging that the
service fee paid by Mariveles was way below the PNPSOSIA
and PADPAO rates
- Petitioner denied liability on account of alleged illegal
dismissal, stressing that no employer-employee relationship
exists between it and security guards
- Labor Arbiter declared Mariveles and Longest Force jointly and
severally liable to pay the money claims of private respondents,
and ordered their reinstatement.
- NLRC affirmed in toto the decision of the Labor Arbiter. CA
denied due course to petitioner’s appeal and dismissed the case
ISSUE
WON petitioner Mariveles should be held jointly and severally
liable with Longest Force for the payment of wage differentials
and overtime pay owing to private respondents
HELD
YES, petitioner’s liability is joint and several that of Longest
Force pursuant to Articles 106, 107 and 109 of the Labor Code.
Art 106. CONTRACTOR OR SUBCONTRACTOR –
Whenever an employer enters into a contract with
another person in the performance of the former’s work,
the employees of the contractor and of the latter’s
subcontractor, if any, shall be paid in accordance with
the provisions of this Code.
In the event that the contractor or subcontractor
fails to pay the wages of his employees in accordance
with this Code, the employer shall be jointly and
severally liable with this contractor or subcontractor to
such employees to the extent of the work performed
under the contract, in the same manner and extent that
he is liable to employee directly employed by him.
Art 107. INDIRECT EMPLOYER – The provisions of the
immediately preceding Article shall likewise apply to any
person, partnership, association or corporation which, not
being an employer, contracts with an independent
contractor for the performance of any work, task, job or
project.
Art 109. SOLIDARY LIABILITY – The provisions of
existing laws to the contrary notwithstanding, every
employer or indirect employer shall be held responsible
with his contractor or subcontractor for any violation of
any provision of this Code. For purposes of determining
the extent of their civil liability under this Chapter, they
shall be considered as direct employers.
- When petitioner contracted for security services with Longest
Force, petitioner became an indirect employer of private
respondents. When the agency as contractor failed to pay the
guards, the corporation as principal becomes jointly and
severally liable to the guards’ wages. The security agency is
held liable by virtue of its status as direct employer, while the
corporation is deemed the indirect employer of the guards for
the purpose of paying their wages in the event of failure of the
agency to pay them. This statutory scheme gives the workers
A2010 - 113 - Disini
the ample protection consonant with labor and social justice
provisions of the 1987 Constitution.
- Labor standards are enacted by the legislature to alleviate the
plight of workers whose wages barely meet the spiraling costs
of basic needs. Labor laws are considered written in every
contract. Stipulations in violation thereof are considered null.
Similarly, legislated wage increases are deemed amendments
to the contract. Thus, employers cannot hide behind their
contracts in order to evade their (or their contractors’ or
subcontractors’) liability for noncompliance with the statutory
minimum wage.
- However, the solidary liability of petitioner with that of Longest
Force does not preclude the application of the Civil Code
provisions on the right of reimbursement from his co-debtor by
the one who paid.
Disposition Decision of Appellate Court affirmed. Petitioner
and Longest Force are held liable jointly and severally for
underpayment of wages and overtime pay of the security
guards, without prejudice to petitioner’s right of reimbursement
from Longest Force Investigation and Security Agency, Inc.
SECTION 1: EMPLOYMENT
POLICY
SECTION 2: RECRUITMENT AND
PLACEMENT OF WORKERS
2.01 RECRUITMENT AND
PLACEMENT OF WORKERS –
DEFINITION
DEFINITION – LAW STRUCTURE
PEOPLE V PANIS
142 SCRA 664
CRUZ; July 11, 1986
NATURE
APPEAL by certiorari to review the orders of the CFI Zambales
and Olongapo, by Judge Panis
FACTS
- Serapio Abug was charged w/ illegal recruitment for operating
a private fee-charging employment agency by charging fees
and expenses and promising employment in Saudi Arabia to
four separate individuals w/o a license.
- Abug filed a motion to quash on the ground that the
informations did not charge an offense because he was accused
of illegally recruiting only one person in each of the four
informations. Under the proviso in Article 13(b), he claimed,
there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any
employment for a fee." The motion was granted by the trial
court.
- Private respondent: to constitute recruitment and
placement, all the acts mentioned in Article 13(b) should
involve dealings with two or more persons as an indispensable
requirement.
- Petitioner: 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. The other acts mentioned in the body
Labor Law 1
of the article may involve even only one person and are not
necessarily for profit.
ISSUE
Which is the correct interpretation of Article 13(b) of P.D. 4425
HELD
NEITHER
- The number of persons dealt with is not an essential
ingredient of the act of recruitment and placement of workers.
Any of the acts mentioned in the basic rule in Article 13(b) will
constitute recruitment and placement even if only one
prospective worker is involved. The proviso merely lays down a
rule of evidence that 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 proviso was intended neither to impose a condition on the
basic rule nor to provide an exception thereto but merely to
create a presumption. The presumption is that the individual or
entity is engaged in recruitment and placement whenever he or
it is dealing with two or more persons to whom, in consideration
of a fee, an offer or promise of employment is made in the
course of the "canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring (of) workers."
PEOPLE V SAULO
344 SCRA 605
GONZAGA-REYES; November 15, 2000
FACTS
- Romulo Saulo, together with Amelia and Clodualo de la Cruz,
were charged with violation of A38 of the Labor Code for illegal
recruitment in large scale.
- From April to May 1990, the three accused falsely represented
themelves to have the capacity to contract, enlist and recruit
workers for employment abroad. They promised job
placements to Maullon, Maligaya and Javier without first
securing the required license or authority from DOLE. In
addition, the three were also charged with three counts of
estafa.
- Maligaya had learned from a relative of Saulo that the latter
was recruiting workers for Taiwan. He, along with Maullon and
Javier, went to visit Saulo in Saulo’s San Francisco del Monte
home. Saulo told Maligaya that she could leave for Taiwan as
soon as she paid the fees for the processing of documents.
- Saulo pleaded not guilty to the charges against him. Amelia
and Clodualdo still remain at large. Saulo was eventually found
guilty of three counts of estafa and illegal recruitment.
- Petitioners’ Claim:
> Maligaya paid P35,000 evidenced by a receipt dated May 21,
1990. Javier was also told to pay the same amount but she
gave an initial amount of P20,000. She did not ask for a receipt
since she trusted Saulo. Maullo was told to pay P30,000 as
processing fee for work in Taiwan. Maullon made an initial
payment of P7,900 to Saulo’s wife who issued him a receipt in
turn. Maullon then made an additional payment of P6,800 in
the presence of Amelia de la Cruz and another payment of
P15,700 to Tumalig, a friend of Saulo, who also issued him
another receipt.
> In all three instances, Saulo failed to deliver what he
promised. The prosecution also presented a certification dated
July 26, 1994 which stated that Saulo was not authorized by the
POEA to recruit workers for overseas employment.
- Respondents’ Comments:
5
'Recruitment and placement' refers to any act of canvassing, enlisting, contracting,
transporting, 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."
A2010 - 114 - Disini
> Saulo interposes for his defense a claim that he was also
applying for work abrad through Amelia de la Cruz which led
him to meet the three complainants. They were all there to
follow-up their applications and that he was also deceived by
Amelia.
> He denied being an overseas recruiter nor an agent for one.
He also denies receiving the abovementioned amounts from
complainants.
> He could not have committed the crime because testimony
from a POEA employee showed that licenses for recruitment are
issued only to corporations and not to natural persons.
ISSUE
WON the appeal of accused should be given merit
HELD
NO
Ratio Recruitment under the Labor Code refers to “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 in
which, in any manner, offers or promises for a fee employment
to two or more persons shall be deemed engaged in
recruitment and placement.”
Reasoning
- The essential elements of illegal recruitment in large scale are
as follows:
(a) the accused engages in the recruitment and placement of
workers as defined under Art. 13(b) or in any of the
enumerated prohibitions in Art. 31 of the Labor Code
(b) the accused has not complied with the guidelines issued
by the Secretary of Labor and Employment, particularly with
respect to the securing of a license or an authority to recruit
and deploy workers whether locally or overseas
(c) accused commits the same against three more persons
individually or as a group.
- Saulo proferred inadequate evidence to prove his innocence.
Even if Saulo did not sign all the receipts presented by the
complainants, it does not weaken the case in any way. A
person charged with illegal recruitment may be convicted on
the strength of the testimonies of the complainants, if found to
be credible and convincing.
- On the argument that licenses for recruitment are issued only
to corporations, the Labor Code states 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 nonlicensee or nonholder of
authority is a person, corporation or entity which has not been
issued a valid license or authority to engage in recruitment and
placement by the Secretary of Labor or whose license or
recovery has been suspended, revoked or cancelled by the
POEA. Agents or representatives appointed by a licensee or a
holder of authority but whose appointments were not previously
recognized by the POEA fall within the definition stated above.
Disposition Judgment affirmed.
2.02 EMPLOYMENT AGENCY
2.03 ALLOWED ENTITIES
A. GENERAL RULE
B. ALLOWED ENTITIES
2.04 PROHIBITED ENTITY
Labor Law 1
2.05 TECHNIQUES IN
REGULATION
LICENSE
PEOPLE V BULI-E
404 SCRA 105
AZCUNA; June 17, 2003
NATURE
Appeal by certiorari
FACTS
- Complainants (8 in number) went to the house of appellant
Buli-e in Baguio City upon learning that she was recruiting
workers for overseas employment. Buli-e confirmed that she
was recruiting workers for Taiwan and although she did not
have a license of her own, her boss in Manila (Josefina Alolino)
was a licensed recruiter.
- Buli-e told complaints to submit the requirements to her which
she in turn will submit to her boss who was in charge of
processing the documents. Complainants complied with the
requirements and paid the downpayment.
- Buli-e brought the complainants to the spouses Alolino’s house
in Las Pinas to follow up their applications where they were
assured by the spouses that they were licensed to recruits
OCW’s and that they can deploy workers within two to three
months.
- After months of waiting, complainants were not deployed
abroad as promised by appellants. Hence they went to the
POEA in Baguio to find out whether or not appellants are
licensed recruiters. When they learned otherwise, they filed a
complaint with the POEA-CAR and eight separate informations
for estafa with the Baguio City Prosecutor.
- During trial, Buli-e testified that she was tasked to find job
applicants whom she can refer to RSI through Josefina. She
would be paid for each referral. When Buli-e asked Josefina had
a license, Josefina answered in the affirmative. Buli-e presented,
Mrs. Nonette Villanueva, the unit coordinator of POEA-CAR to
testify that RSI was a licensed employment agency and that
Josefina was a licensed recruiter at the time that Buli-e had
dealings with her co-appellant.
- Mrs. Villanueva clarified that licenses of permits to recruit
workers are territorial in nature so that an agency licensed in
Manila can only engage in recruitment activities within the
place specified in the license although the applicants may be
nonresidents of Metro Manila.
- Josefina however denied that Buli-e was an agent of Mrs. Fe
Go, another Marketing Director for RSI. Josefina said she
accepted referrals from Buli-e even though the latter was not
her agent or connected with RSI because their agency accepts
referrals from everyone.
- The trial court found Buli-e and Josefina guilty of illegal
recruitment in a large scale and estafa. Hence this petition.
ISSUE
1. WON appellants are guilty of illegal recruitment in a large
scale
2. WON appellants are guilty of estafa
HELD
1. YES
Ratio The essential elements of the crime of illegal
recruitment in large scale are (1) the accused engages in acts
of recruitment and placement of workers defined under Article
13(b) or in any prohibited activities under Article 34 of the
Labor Code; (2) the accused has not complied with the
guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an
authority to recruit and deploy workers, either locally or
A2010 - 115 - Disini
overseas; and (3) the accused commits the unlawful acts
against three or more persons, individually or as a group. When
illegal recruitment is committed in large scale or when it is
committed by a syndicate, it is considered as an offense
involving economic sabotage.
Reasoning
- When complainants approached Buli-e, she gave the
impression that she had the ability to send workers abroad by
saying that although she did not have a license, her boss did.
- There is no showing that complainants ever set foot in the RSI
office. They were always brought to the house of the spouses
Alolino in Las Pinas.
- Josefina’s acts clearly show that she and Buli-e acted in
concert towards the accomplishment of a common felonious
purpose which was to recruit workers for overseas employment
even though they had no license to do so.
- There is nothing on record to corroborate Josefina’s claim that
as Marketing Director she was authorized to solicit applicants
for overseas placement through advertisements, referrals, walk-
ins, etc.
- Josefina, despite the suspension and expiration of the RSI
license, continued to engage in recruitment activities for
overseas employment.
- Licensed agencies are prohibited from conducting any
provincial recruitment, job fairs or recruitment activities of any
form outside of the address stated in the license, acknowledged
branch or extension office, without securing prior authority from
the POEA.
2. YES
Ratio It is settled that a person convicted of illegal recruitment
under the Labor Code can also be convicted of violation of the
Revised Penal Code provisions on estafa provided that the
elements of the crime are present.
Reasoning
- The elements of estafa are: (1) the accused defrauded another
by abuse of confidence or by means of deceit, and (2) that
damage or prejudice capable of pecuniary estimation is caused
to the offended party or third person.
- Appellants deceived complainants into believing that they had
the authority and capability to send them to Taiwan for
employment. On the strength of such assurance, complainants
parted with their money in payment of the placement fees.
Disposition AFFIRMED
2.06 ILLEGAL RECRUITMENT
ELEMENTS OF CRIME
PEOPLE V ORDONO
335 SCRA 331
MENDOZA; July 10, 2000
NATURE
Appeal from the decision of RTC
FACTS
- Complainant Presenio Lorena is a resident of Libtong, Tagudin,
Ilocos Sur. He only finished grade school. He earns his living as
a farmer. He was introduced to accused-appellant by her
relative, Zenaida Ordoño, when they went to his residence.
Accused-appellant represented herself as one connected with a
recruitment agency and able to deploy workers abroad,
particularly in Korea.
- Attracted by the alleged high salaries in Korea, he was
convinced to apply for an overseas job by the accused-
appellant. He paid sums of money and in return accused-
appellant secured for Lorena a passport, a two-way plane ticket
and some pocket money in U.S. currency from the money she
received from him.
Labor Law 1
- Accused-appellant informed Lorena that Kuala Lumpur is in
Korea and that, upon arrival there, he would be fetched by a
certain Joy Mejia from the Metro Hotel, where he was told to
check in. On January 23, 1993, Lorena took a Philippine Airlines
flight to Kuala Lumpur, Malaysia. As instructed, he stayed at the
Metro Hotel for several days, but no one came to fetch him.
Lorena went to the Philippine Embassy for assistance, but he
was asked to give U.S. $500.00 for the processing of his work
permit. As he did not have enough money, he came back to the
Philippines on February 4, 1993. He went to see accused-
appellant to confront her, but she told him that if he wanted to
try his luck again in finding employment abroad, he must recruit
two more persons so that the placement fees they would pay
would be used for his second job application.
- The other complainant, Jerry Lozano, is also a resident of
Libtong, Tagudin, Ilocos Sur. Like Lorena, he is also a farmer. He
never reached high school. Sometime in December 1993, he
was called to Lorena’s house upon accused-appellant’s request.
There, Lorena introduced accused-appellant to him. Accused-
appellant introduced herself to Lozano as a recruiter of
overseas workers for Korea. Lozano was convinced to apply in
the hope of landing a good job in Korea. Lozano paid her the
total amount of P41,000.00 in two installments. His passport,
two-way ticket and pocket money in U.S. dollars were obtained
from the money he had paid to accused-appellant. He arrived in
Kuala Lumpur, Malaysia, not in Korea as he was promised.
There, he was apprehended by the Malaysian police at the
airport after finding that he had no other travel documents with
him except his passport. He was kept in a flooded jail for one
night. The next day, he was deported to the Philippines. After
arriving home, he saw accused-appellant and confronted her.
As in Lorena’s case, he was told to recruit two persons so that
the money they would pay for their placement fees would be
used by him for another overseas employment application.
- Criminal cases were filed (illegal recruitment and estafa). The
trial court found accused guilty beyond reasonable doubt and
imposed the death penalty for the illegal recruitment cases.
ISSUE
WON accused is guilty of illegal recruitment
HELD
YES
- Illegal recruitment is committed when two elements concur,
namely: (1) the offender has no valid license or authority
required by law to enable one to lawfully engage in recruitment
and placement of workers; and (2) he undertakes either any
activity within the meaning of “recruitment and placement”
defined under Art. 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code. Art. 13(b) of the
Labor Code defines “recruitment and placement” 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, is considered engaged in recruitment
and placement.”
- In these cases, these elements concur. The certification issued
by the DOLE Regional Office in La Union that at the time
material to these cases the accused-appellant had no authority
to engage in recruitment activities is unrebutted. The acts of
accused-appellant, consisting of her promise of employment to
the complainants and of transporting them abroad, fall squarely
within the ambit of recruitment and placement as defined by
law.
- Another indication that accused-appellant recruited
complainants was the fact that Presenio Lorena’s “contact” in
Kuala Lumpur was Joy Mejia, who is a close friend of accused-
appellant. Indeed, accused-appellant’s claim that she did not
represent herself as a licensed recruiter but that she merely
tried to help complainants secure “tourist visas” could not make
her less guilty of illegal recruitment, it being enough that she
gave the impression of having had the authority to recruit
workers for deployment abroad.
A2010 - 116 - Disini
- Accused-appellant is clearly guilty of illegal recruitment. But
accused-appellant is correct that she cannot be sentenced to
suffer life imprisonment and pay a fine of P100,000.00 for each
count of illegal recruitment. This is the penalty for illegal
recruitment committed either by a syndicate or in large scale,
but this has not been shown in this case. The informations do
not allege the offense of illegal recruitment committed in large
scale or by a syndicate but only of illegal recruitment. Nor does
the evidence show that the illegal recruitment was committed
in large scale or by a syndicate. Hence, the applicable penalty is
that provided under Art. 39(c) of the Labor Code which states:
Any person who is neither a licensee nor a holder of authority
under this Title found violating any provision thereof or its
implementing rules and regulations shall, upon conviction
thereof, suffer the penalty of imprisonment of not less than
four years nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such imprisonment
and fine, at the discretion of the court.
Disposition Decision appealed from is affirmed with
modification as to sentence
PEOPLE V SAGAYAGA
423 SCRA 468
CALLEJO SR; February 23, 2004
NATURE
This is an appeal from the Decision of the Regional Trial Court of
Manila, Branch 35, convicting the appellant Leticia Sagayaga of
large scale illegal recruitment as defined in Section 6, Republic
Act No. 8042 and sentencing her to suffer life imprisonment.
FACTS
- The appellant was charged with large scale illegal recruitment
in an Information. Sometime in the last week of October 1997,
Elmer Janer went to the office of Alvis Placement Service
Corporation to apply for overseas employment as factory
worker in Taiwan. Appellant Leticia Sagayaga, after personally
receiving Elmer’s application, required him to submit the
necessary documents. Appellant further asked Elmer to pay
seventy-five thousand pesos (P75,000.00) as placement fee.
Elmer paid the said fee to appellant in three (3) installments,
the first, on November 5, 1997, in the amount of twenty-five
thousand pesos (P25,000.00); the second, on November 13,
1997, in the amount of five thousand pesos (P5,000.00); and
the third, on November 19, 1997, in the amount of forty-five
thousand pesos (P45,000.00). All the payments were made
inside Alvis Placement Agency.
- As required, Elmer also had his medical examination at the
Angeles Medical Clinic, the result of which confirmed that he
was fit to work. Thereafter, he was told to wait for the arrival of
the employer. After seven (7) months, no employer arrived.
Tired of waiting, Elmer demanded that he be refunded of his
money (Id.). Despite appellant’s promises to pay, Elmer was
not refunded of his money.
- Exasperated, Elmer asked appellant for a promissory note,
which appellant executed, promising to pay Elmer seventy-five
thousand (P75,000.00) on May 6, 1998 (pp. 10 and 11, TSN,
September 7, 1999). In said promissory note, appellant
designated herself as the assistant general manager of
the placement agency. When appellant failed to refund the
amount to Elmer on the date stated in the promissory note, the
latter went to the Philippine Overseas Employment
Administration (POEA) and filed a sworn complaint against
appellant. Elmer Ramos and Eric Farol filed their complaint
based on basically similar facts.
- Appellants Contention:
> The appellant avers that she is not criminally liable for the
crime charged because the prosecution failed to prove that she
had a direct or actual control, management or direction of the
business and recruitment activities of the Alvis Placement
Services Corporation (APSC). She asserts that she had no
knowledge of the recruitment activities of APSC and had no
participation whatsoever in its operation. In dealing with the
Labor Law 1
private complainants, she was merely performing routinary
office work as a mere employee. Her participation as an
employee of APSC with respect to the employment application
of Elmer Ramos for Taiwan was to receive his placement fee of
P20,000.00. Hence, the appellant avers, she cannot be held
criminally liable for illegal recruitment in large scale. If, at all,
she can be held liable only with respect to the employment
applications of Janer and Farol. Thus, according to the
appellant, the trial court erred in sentencing her to life
imprisonment.
ISSUE
WON the accused-appellant was a top ranking officer of said
corporation, with authority to participate directly in the control,
management or direction of its business affairs
HELD
YES
Ratio Recruitment is “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.
Reasoning
- The appellant, as shown by the records of the POEA, was both
the APSC Vice-President-Treasurer and the Assistant General
Manager. She was a high corporate officer who had direct
participation in the management, administration, direction and
control of the business of the corporation.
- Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment
may be committed by any person, whether a non-licensee, non-
holder of authority, licensee or holder of authority, thus:
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment, in cases where the deployment does
not actually take place without the worker’s fault....
- Under the last paragraph of the said section, those criminally
liable are the principals, accomplices and accessories. In case
of a juridical person, the officers having control, management or
direction of the business shall be criminally liable.
- At any rate, the accused has expressly admitted in the course
of her testimony that she was at the time the Treasurer of their
recruitment agency. As such she was in charge of the
management and control of the financial affairs and resources
of the corporation. She was in charge of collecting all its
receivables, safely keeping them, and disbursing them. She
testified that it was part of her duties to receive and collect the
monies paid by applicants. Her disbursing authority has been
clearly demonstrated by her co-signing the checks Exhibits D-2
and G.
- The appellant is guilty of illegal recruitment as a principal by
direct participation, having dealt directly with the private
complainants.
- The appellant’s bare denial of her involvement in the
management, administration, control and operation of APSC
cannot prevail over her judicial admissions, the positive
testimonies of the private complainants and the documentary
evidence adduced by the prosecution.
- Section 6 of Rep. Act No. 8042 provides that illegal
recruitment shall be considered an offense involving economic
sabotage if committed in large scale, viz, committed against
three (3) or more persons individually or as a group, the
imposable penalty for which is life imprisonment and a fine of
not less than P500,000.00 nor more than P1,000,000.00. In this
case, there are three private complainants, namely, Elmer
Janer, Eric Farol and Elmer Ramos. The trial court, thus,
correctly convicted the appellant of large scale illegal
recruitment and sentenced her to suffer life imprisonment.
Under Section 6 (m) of Rep. Act No. 8042, illegal recruitment
may be committed by any person, whether a non-licensee, non-
holder of authority, licensee or holder of authority, thus:
A2010 - 117 - Disini
(m) Failure to reimburse expenses incurred by the worker in
connection with his documentation and processing for
purposes of deployment, in cases where the deployment does
not actually take place without the worker’s fault....
- Under the last paragraph of the said section, those criminally
liable are the principals, accomplices and accessories. In case
of a juridical person, the officers having control, management or
direction of the business shall be criminally liable.
PEOPLE V BAYTIC
398 SCRA 18
CARPIO-MORALES; February 20, 2003
NATURE
Appeal from the decision of the Regional Trial Court of Quezon
City ffinding the accused guilty of illegal recruitment in large
scale
FACTS
- On 24 September 1998 Kennedy Hapones accompanied by
accused Alex Baytic went to the house of his aunt Ofelia
Bongbonga at 514 Tabigo Street, Manggahan, Quezon City.
There they found Ofelia, Nolie and Zenaida, all surnamed
Bongbonga, together with Millie Passi, Yolanda Barrios and
Elvira Nacario. Accused Alex Baytic told the girls that he was
looking for workers willing to work in Italy as utility personnel.
He explained that interested applicants should give him money
for processing of their medical certificate, certificate of
employment and other travel documents. Since the offer
appeared to be a good opportunity to work abroad, Ofelia
Bongbonga on the same day gave the accused P3,500.00,
followed by Millie Passi with P4,000.00 the next day, and Nolie
Bongbonga with P4,000.00 on 5 October as their placement
fees. All these transactions were evidenced by receipts issued
by accused Alex Baytic.
- According to private complainant Ofelia Bongbonga, accused
Baytic promised her and her two (2) co-applicants an interview
by his cousin, a doctor from Italy, on 7 October 1998 at the
Corinthian Gardens. However, on the appointed date of their
interview, the accused failed to appear. Ofelia, Millie and Nolie
frantically searched for him but he was nowhere to be found.
Ofelia further testified that sometime in January 1999 they
heard over the radio that accused Baytic was arrested in Pasig
City for illegal recruitment activities. Upon inquiry from the
radio station, she learned that the accused was already
detained at the Pasig Provincial Jail, so she followed him there.
Thereafter, she and her two (2) other companions, Millie and
Nolie, who were likewise victimized by the accused filed the
instant case against him.
- Accused Alex Baytic, testifying in his defense, not only denied
the accusations against him but also insisted that it was
actually Kennedy Hapones, a new acquaintance, who was the
illegal recruiter. He recounted that sometime in November
1999, he went to the house of Hapones who was trying to
recruit him for deployment abroad. According to the accused,
Hapones told him to prepare P250,000.00 although the former
eventually accepted an initial advance payment of P4,500.00.
He again met Hapones the following month when the latter told
him and a group of other applicants, including Ofelia
Bongbonga, that their requirements were ready. That was the
last time he saw Hapones who, he later learned, had already
left for abroad. He was suspected of being in cahoots with
Hapones because whenever the latter and the applicants
talked, Hapones would always point at him, although he never
had the opportunity to know what Hapones had actually said to
them.
- But the trial court sustained the complaining witnesses and
gave more credence to their straightforward and consistent
testimonies. It opined that all the essential requisites of the
crime of illegal recruitment in large scale as defined in Art. 13,
Labor Law 1
par. (b), of the Labor Code were present - The accused made
representations to each of the complainants that he could send
them to Italy as janitor/utility aides through direct hiring, which
constitutes a promise of employment which amounted to
recruitment as defined under Article 13(b) of the Labor Code.
The testimonies of the three prosecution witnesses that they
were actually recruited for overseas employment by the
accused and were induced by him to part with their money
retain undiminished probative worth and weight. The receipts
respectively issued to the complainants are sufficient proofs of
his guilt as against accused’s mere denial of the signatures
appearing therein. The modus operandi of the accused was well
established by the corroborative testimonies of the witnesses.
- Accused-appellant now prays that the Court to take a second
hard look at his conviction in view of the alleged failure of the
prosecution to prove his guilt beyond reasonable doubt. He
takes exception to the finding of the trial court that all the
elements of the crime of illegal recruitment in large scale are
present. He argues that the first element, i.e., the accused
engages in the recruitment and placement of workers, defined
under Art. 13, or in any prohibited activities under Art. 34, of
the Labor Code, is not present because he did not solicit any
money from the complainants nor did he promise them
employment in Italy. The truth of the matter, according to him,
is that he himself was victimized by Kennedy Hapones, the real
illegal recruiter. He explained that when Hapones could not be
contacted, the complainants vented their anger towards him,
being Hapones’ constant companion.
Such being the case, accused-appellant insists that the second
element, which is the absence of license or authority to recruit,
could not have been present because there was in fact no need
for him to apply for the license as he was not in the recruitment
business.
ISSUE
WON the accused is guilty of illegal recruitment
HELD
YES
- The appealed decision finding accused-appellant guilty of
illegal recruitment in large scale is affirmed
Ratio Illegal recruitment is committed when two (2) elements
concur. First, the offender has no valid license or authority
required by law to enable one to engage lawfully in recruitment
and placement of workers. Second, he or she undertakes either
any activity within the meaning of "recruitment and placement"
defined under Art. 13, par. (b), or any prohibited practices
enumerated under Art. 34 of the Labor Code.1awphi1.nét In
case of illegal recruitment in large scale, a third element is
added: that the accused commits the acts against three or
more persons, individually or as a group.
Reasoning
- The first element is present. POEA representative Flordeliza
Cabusao presented in evidence a certification from one
Hermogenes Mateo, Director III, Licensing Branch, showing that
accused-appellant was neither licensed nor authorized to recruit
workers for overseas employment. The second element is
likewise present. Accused-appellant is deemed engaged in
recruitment and placement under Art. 13, par. (b), of the Labor
Code when he made representations to each of the
complainants that he could send them to Italy for employment
as utility personnel. Prosecution witness Ofelia Bongbonga
categorically stated that accused-appellant promised her
employment for a fee, a testimony corroborated by both
complaining witnesses Nolie Bongbonga and Millie Passi. His
promises and misrepresentations gave the complainants the
distinct impression that he had the authority to engage in
recruitment, thus enabling him to collect from them various
amounts for recruitment and placement fees without license or
authority to do so. Accused-appellant’s vain attempt at
exculpating himself by pinpointing Hapones as the culprit
cannot mislead this Court from his transparent and obvious
machinations. His self-serving statement that he himself was a
victim of Hapones wilts in the face of the complaining-
A2010 - 118 - Disini
witnesses’ testimonies that he made promises of employment,
solicited money from them and even signed receipts as proof of
payment.
LARGE SCALE
PEOPLE V BULI-E
[PAGE 110]
PEOPLE V DUJUA
422 SCRA 169
TINGA; February 5, 2004
FACTS
- Ramon Dujua, his mother Rose Dujua, his aunt Editha Singh,
and his uncle were charged with Illegal Recruitment in Large
Scale.
- The prosecution presented a Certification issued by
Hermogenes C. Mateo, Director II, Licensing Branch of the
POEA, stating that Ramon Dujua is not licensed or authorized by
the POEA to recruit workers abroad. Another Certification, of
even date shows that neither is the World Pack Travel and
Tours authorized to recruit workers abroad.
- The RTC rendered its decision convicting Ramon Dujua of
illegal recruitment in large scale.
ISSUE
WON Ramon Dujua committed the crime of illegal recruitment
in large scale
HELD
YES
- The essential elements of the crime of illegal recruitment in
large scale are:
(1) the accused engages in acts of recruitment and
placement of workers defined under Article 13(b) or in any
prohibited activities under Art. 34 of the Labor Code;
(2) the accused has not complied with the guidelines issued
by the Secretary of Labor and Employment, particularly
with respect to the securing of a license or an authority to
recruit and deploy workers, either locally or overseas; and
(3) the accused commits the unlawful acts against three or
more persons, individually or as a group.
- All three elements have been established beyond reasonable
doubt.
- First, the testimonies of the complaining witnesses
satisfactorily prove that appellant promised them employment
and assured them placement overseas. Complainants were
firm and categorical. All of them positively identified appellant
as the person who recruited them for employment abroad.
There is no adequate showing that any of them was impelled by
any ill motive to testify against appellant. The absence of
receipts in a case for illegal recruitment does not warrant the
acquittal of the appellant and is not fatal to the prosecution’s
case. As long as the prosecution is able to establish through
credible testimonial evidence that the appellant has engaged in
Illegal Recruitment, a conviction for the offense can very well be
justified.
- Second, appellant did not have any license or authority to
recruit persons for overseas work, as shown by the Certification
issued by the POEA. Neither did his employer, the World Pack
Travel and Tours, possess such license or authority.
- Third, it bears clarifying that although Romulo Portos was
named as among those recruited by appellant the evidence
reveals that Romulo withdrew his application in lieu of which his
wife Melodea Villanueva applied for placement with appellant.
Villanueva, however, is not named as one of appellant’s victims.
- Nevertheless, it has been alleged and proven that appellant
undertook the recruitment of not less than three persons,
namely, Cabus, Caluten and Perlas.
Disposition The decision was affirmed with modifications.
Labor Law 1
PEOPLE V REYES
242 SCRA 264
MENDOZA; March 9, 1995
NATURE
Appeal from decision of RTC Laguna finding accused Thelma
Reyes guilty beyond reasonable doubt of Illegal Recruitment
defined and penalized under Article 38, P.D. No. 442 as
amended, and sentencing her to suffer a penalty of Reclusion
Perpetua and to pay a fine of P100,000.00 and to indemnify
Rosalino Bitang and Fabian Baradas, Mr. de Castro, Lorenzo
Blanza and Ramon Mendoza the sum of P45,000 and to pay the
costs.
FACTS
- Appellant Thelma Reyes was charged together with her
husband Nick Reyes, but the latter was at large and so has
remained up to now. The trial proceeded only with respect to
Thelma Reyes in view of her plea of not guilty.
- Evidence show that sometime in 1985, the five victims
individually went to the house of appellant in Los Baños,
Laguna, to apply for employment abroad. They were required to
submit travel documents (passports, birth certificates, NBI
clearances, etc). They paid various amounts of money to Nick
Reyes for recruitment fees, placement fees, etc. Nick Reyes
handed the money to his wife Thelma Reyes, and afterward
issued a receipt.
- Nick Reyes allegedly promised to notify them as soon as they
were accepted for employment so that they could leave for
abroad, but this promise was not fulfilled. When they later
checked with the Philippine Overseas Employment
Administration (POEA), they found out that the spouses were
not licensed recruiters.
- As soon as they obtained the POEA certification that appellant
and her husband were not licensed to recruit, they demanded
from the spouses the return of their money and when the latter
did not give back their money, they filed the complaint in this
case.
- Thelma Reyes defense is that of denial. But on cross-
examination she admitted that there were fourteen other cases
of Illegal Recruitment filed and/or pending against her and her
husband in different courts of Manila and claimed that some of
the cases had been dismissed or settled after she had refunded
the money of the complainants.
- The lower court found Thelam Reyes guilty and sentenced her
as stated above. Hence this appeal.
ISSUES
1. WON the evidence for the prosecution is sufficient to warrant
conviction
2. WON the verbal testimonies of private complainants should
be given more credit than the documentary evidence for the
accused
3. WON two complainants will suffice for conviction of illegal
recruitment in large scale
HELD
1. YES
- An accused can be convicted on the strength of the testimony
of a single witness, if such testimony is credible and positive
and produces a conviction beyond reasonable doubt. That the
witness is also the complainant in a case makes little difference
so long as the court is convinced beyond doubt that the witness
is telling the truth.
-In determining the value and credibility of evidence, witnesses
are to be weighed, not counted (People v. Villalobos, 209 SCRA
304 [1992]).
- When the issue is the credibility of witnesses, appellate courts
will in general not disturb the findings of the trial court unless
certain facts or circumstances of weight have been overlooked,
misunderstood or misapplied which, if considered, might affect
the result of the case.
A2010 - 119 - Disini
2. YES
- Evidence shows that after receiving the amounts from
complainants, Nick Reyes handed the money paid to the
appellant and that Nick Reyes issued the receipts in question
only after appellant Thelma Reyes had counted it. Mere claim is
not enough to overcome the evidence of the prosecution. If
there was anyone whose testimony needed corroboration it was
appellant.
- The fact that the purpose for which payment was made is not
stated in the receipts nor why the receipts purport to have been
issued in "Manila" and not in Los Baños where they said they
had made all the payments is something to be explained not by
the complainants who have an elementary education only, but
by appellant and her husband because it was the latter who
made the receipts. It is not far fetched that they made the
receipts this way precisely to create doubt as to their real
import.
3. NO
- Labor Code provisions:
Art. 38 (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.
Art. 39(a): The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P100,000) shall be imposed of
illegal recruitment constitutes economic sabotage as defined
herein.
- The information against appellant mentioned only the two
complainants Fabian Baradas and Rosalino Bitang as having
been illegally recruited by appellant and her husband. The trial
court, however, held appellant guilty of illegal recruitment on a
large scale because aside from Baradas and Bitang, appellant
and her husband allegedly recruited others, namely, Lorenzo
Blanza, Edgardo Garcia, Ramon Mendoza, and Dionisio de
Castro.
- When the Labor Code speaks of illegal recruitment "committed
against three (3) or more persons individually or as a group," it
must be understood as referring to the number of complainants
in each case who are complainants therein, otherwise,
prosecutions for single crimes of illegal recruitment can be
cumulated to make out a case of large scale illegal recruitment.
In other words, a conviction for large scale illegal
recruitment must be based on a finding in each case of
illegal recruitment of three or more persons whether
individually or as a group.
- Even if Blanza and Garcia had been illegally recruited so as to
make the number of persons illegally recruited four and make
the crime that of illegal recruitment of a large scale, this can
not be the basis of conviction since this was not alleged in the
information.
- Appellant must be punished under Art. 39(c) of the Labor
Code: “Any person who is neither a licensee nor a holder of
authority under this Title found violating any provision thereof
or its implementing rules and regulations shall upon conviction
thereof, suffer the penalty of imprisonment of not less than four
years nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such imprisonment
and fine, at the discretion of the court.”
Disposition RTC decision is SET ASIDE. Appellant Thelma
Reyes is declared guilty of illegal recruitment on two (2) counts
and is sentenced for each crime to suffer imprisonment of 6
years and 1 day to 8 years and pay a fine of P50,000.00; and
ordered to indemnify Rosalino Bitang in the amount of
P13,500.00 and Fabian Baradas in the amount of P18,000.00
and pay the costs.
REFERRALS
PEOPLE V MERIS
329 SCRA 33
KAPUNAN; March 28, 2000
Labor Law 1
NATURE
This is an appeal from the Joint Decision of the Regional Trial
Court of Manila, Branch 1, convicting accused-appellant Leonida
Meris of illegal recruitment in large-scale and six counts of
estafa.
FACTS
- During the period comprised between January 12, 1991 and
February 17, 1991, accused conspiring and confederating with
three others defrauded NAPOLEON RAMOS, by means of false
manifestations and fraudulent representation which they made
to Napoleon Ramos to the effect that they had the power and
capacity to recruit and employ him as Factory Worker in
Hongkong and could facilitate the processing of the pertinent
papers if given the necessary amount to meet the
requirements.
- They succeeded in inducing said Ramos to give and deliver the
amount of P30,000.00 on the strength of said manifestations
and representations. The accused obtained P30K, with intent to
defraud, and unlawfully misappropriated the money for their
personal use.
- The seventh information in Criminal Case No. 91-94198
charged accused-appellant with illegal recruitment in large-
scale. Meris for a fee recruited and promised employment
abroad to Leo D. delos Santos, Merlita L. Bombarda, Margarita
R. madae (sic), Purita A. Conceja, Cristina I. Nava and Napoleon
E. Ramos, without first securing the required license or
authority from the Dept. of Labor.
- Testifying in her own defense, accused-appellant denied the
charges of engaging in recruitment activities and of receiving
money from complainants. She described herself as a public
school teacher living in Pangasinan with her four children and
unemployed husband. Like the other complainants, she claimed
she was a victim of Julie Micua. When complainants learned that
she had applied for overseas employment, they sought her help
in going to the agency where she applied. Hence, on January
12, 1991, accused-appellant accompanied the complainants to
see Julie Micua who assured them that they would be leaving
for Hongkong within two or three months. Accused-appellant
claims she never represented herself as having the capacity to
deploy workers abroad. She only told them that she could
accompany them to the agency where she also applied.
ISSUE
WON Meris is guilty of the charges of estafa and illegal
recruitment
HELD
YES, she is guilty of estafa and illegal-recruitment (wide-scale).
Reasoning
- All the complainants are one in saying that accused-appellant
made representations that she knew someone who could help
them secure employment in Hongkong. Relying on these
representations, they applied for placement for employment
abroad and paid various sums of money therefor. Unfortunately,
accused-appellant failed to comply with her promise of
employment or restitute the amounts she received from them.
- The prosecution undoubtedly proved that accused-appellant,
without license or authority, engaged in recruitment and
placement activities. This was done in collaboration with Julie
Micua, when they promised complainants employment in
Hongkong. Art. 13, par. (b) of the Labor Code defines
recruitment and placement 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."
- Although accused-appellant was not an employee of the
alleged illegal recruiter Julie Micua, the evidence show that she
was the one who approached complainants and prodded them
A2010 - 120 - Disini
to seek employment abroad. It was through her that they met
Julia Micua. This is clearly an act of referral.
- Illegal recruitment is conducted in a large scale if perpetrated
against three (3) or more persons individually or as a group.
This crime requires proof that the accused: (1) engaged in the
recruitment and placement of workers defined under Article 13
or in any of the prohibited activities under Article 34 of the
Labor Code; (2) does not have a license or authority to lawfully
engage in the recruitment and placement of workers; and (3)
committed the infraction against three or more persons,
individually or as a group. All these three essential elements are
present in the case.
Disposition Decision in question is affirmed.
PEOPLE V FORTUNA
395 SCRA 354
VITUG; January 16, 2003
NATURE
Appeal from decision of RTC finding petitioner guilty of Illegal
Recruitment in Large Scale
FACTS
- Private complainants met Dominga Fortuna y Corrales in a
seminar on "Tupperware" products being then promoted for
sale in Cabanatuan City. Fortuna offered the complainants job
placements in Taiwan. Convinced that Fortuna could actually
provide them with jobs abroad, private complainants each gave
her the amount of P5,400.00 to take care of the processing fee
for medical examination and other expenses for securing their
respective passports. Private complainants took the medical
examination in Manila. Weeks went by but the promised
departure had not materialized. Suspecting that something was
not right, they finally demanded that Fortuna return their
money. Fortuna, in the meanwhile, went "into hiding." After
having later learned that Fortuna had neither a license nor an
authority to undertake recruiting activities, Angelyn Magpayo
filed a complaint which, in due time, ultimately resulted in the
indictment of Fortuna for illegal recruitment. During the
preliminary investigation, as well as later at the trial, Fortuna
gave assurance to have the money she had received from
private complainants returned to them but Fortuna was unable
to make good her promise.
ISSUE
WON the lower court erred in finding petitioner guilty of Illegal
Recruitment in Large Scale
HELD
NO
Ratio The rule has been said that a person charged with illegal
recruitment may be convicted on the strength of the testimony
of the complainants, if found to be credible and convincing, and
that the absence of receipts to evidence payment to the
recruiter would not warrant an acquittal.
Reasoning
- The requisites constituting the offense of Illegal Recruitment
in Large Scale have sufficiently been proven by the prosecution.
First, appellant, undeniably, has not been duly licensed to
engage in recruitment activities; second, she has engaged in
illegal recruitment activities, offering private complainants
employment abroad for a fee; and third, she has committed the
questioned illegal recruitment activities against three or more
persons. The pertinent provisions of RA 8042 state:
“SEC. 6. Definition. – … illegal recruitment shall mean any act
of canvassing, enlisting, contracting, transporting, utilizing,
hiring, or procuring workers and includes referring, contract
of services, promising or advertising for employment abroad
… when undertaken by a non-license or non-holder of
authority contemplated …
xxx xxx x x x.
Labor Law 1
Illegal recruitment … is deemed committed in large scale if
committed against three (3) or more persons individually or
as a group.”
Disposition the appealed decision of the RTC is AFFIRMED
EMPLOYEES
PEOPLE V CORPUZ
412 SCRA 479
YNARES-SANTIAGO; October 1, 2003
NATURE
Appeal from the decision of the RTC of Manila
FACTS
- Private complainants Belinda Cabantog, Concepcion San
Diego, Erlinda Pascual and Restian Surio went to Alga-Moher
International Placement Services Corporation to apply as
factory workers in Taiwan. There they met Mrs. Reyes, the
president of the said agency. They were asked to fill up
application forms and return to the office to pay P10,000 as
processing fee
- They returned after a month. Mrs. Reyes was not at the office
at that time but she called appellant Corpuz to receive the fees.
- 2 months later, nothing happened to their applications. They
asked Corpuz to refund the money. She said it was already
remitted to Mrs. Reyes. Complainants approached Mrs. Reyes
but she told them that the money she received from Corpuz
was in payment of the latter’s debt.
- The complainants filed a complaint and Corpuz was arrested
and detained. While the case was on the RTC, the complainants
received a refund of their money from complainant’s sister-in-
law. They then executed affidavits of desistance.
- Appelant contends she did not have a part with the illegal
recruitment as she merely received the money on behalf of Mrs.
Reyes, whome she was working as a secretary for about 3
months.
- RTC found Corupuz guilty for violation of RA 8042.
ISSUE
WON Corpuz can be held liable under RA 8042
HELD
NO
- Appellant contends that she is not liable for the foregoing
illegal recruitment activities considering that she was merely an
employee having no control over the recruitment business of
the Alga-Moher International Placement Services Corporation
and that she did not actually recruit the private complainants.
Moreover, she did not appropriate for her own use the
processing fees she received and she had no knowledge that
the agency’s license was suspended by the POEA. RTC
convicted her because despite the suspension of the license
since she was able to convince the complainants to give her
their money.
- From the foregoing testimony, it is clear that all appellant did
was receive the processing fees upon instruction of Mrs. Reyes.
She neither convinced the private complainants to give their
money nor promised them employment abroad
- As stated in the last sentence of Section 6 of RA 8042, the
persons who may be held liable for illegal recruitment are the
principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or direction
of their business shall be liable.
- An employee of a company or corporation engaged in illegal
recruitment may be held liable as principal, together with his
employer, if it is shown that he actively and consciously
participated in illegal recruitment. However, where it is shown
that the employee was merely acting under the direction of his
superiors and was unaware that his acts constituted a crime, he
A2010 - 121 - Disini
may not be held criminally liable for an act done for and in
behalf of his employer.
- In the case at bar, the prosecution failed to adduce sufficient
evidence to prove appellant’s active participation in the illegal
recruitment activities of the agency. As already established,
appellant received the processing fees of the private
complainants for and in behalf of Mrs. Reyes who ordered her to
receive the same. She neither gave an impression that she had
the ability to deploy them abroad nor convinced them to part
with their money. More importantly, she had no knowledge that
the license was suspended the day before she received the
money. Their failure to depart for Taiwan was due to the
suspension of the license, an event which appellant did not
have control of. Her failure to refund their money immediately
upon their demand was because the money had been remitted
to Mrs. Reyes on the same day she received it from them.
Disposition Decision reversed
PEOPLE V SAGAYAGA
[PAGE 111]
PEOPLE V GUTIERREZ
422 SCRA 32
TlNGA; February 5, 2004
NATURE
Appeal from the decision of the trial court
FACTS
- FLOR GUTIERREZ Y TIMOD with CECILIA BAUTISTA, ESTHER
GAMILDE, LINDA RABAINO and MARILYN GARCIA mutually
helped one another in recruiting for overseas job placement and
actual contract EVELYN V. RAMOS, ROSEMARIE I. TUGADE,
GENEROSA G. ASUNCION and ROSALYN B. SUMAYO as domestic
helpers in Dubai, United Arab Emirates, for a fee ranging from
P10,000.00 to P15,000.00 each, without first obtaining the
required license and/or authority from the Philippine Overseas
Employment Administration (POEA).
- In her defense, the accused claimed that as an “employee” of
a duly licensed agency who was tasked to recruit and offer job
placements abroad, she could not be held liable for illegal
recruitment. She admitted that she had no authority to recruit
in her personal capacity, but that her authority emanated from
a Special Power of Attorney (SPA) and a Certification issued by
a licensed agency.
- At the time complainants applied for overseas employment,
the accused was “employed” as a Marketing Directress of
Sarifudin Manpower and General Services, a duly licensed
agency. A Special Power of Attorney (SPA) from Sarifudin, dated
May 1, 1994. A Certification dated February 3, 1995, issued by
the same agency, also states that: “MRS. FLOR T. GUTIERREZ
was (sic) employed as OVERSEAS MARKETING DIRECTRESS of
SARIFUDIN MANPOWER AND GENERAL SERVICES, effective May
1994, up to the present”
- But Edwin Cristobal, POEA Labor Employment Officer, found
that the said agency revoked the appointment of Ms. Flor
Gutierrez as Overseas Mktg. Director/Manager in a letter dated
Dec. 15, 1995, although POEA has not received nor
acknowledged the representation of Ms. Gutierrez. Cristobal
explained that the POEA, “Never had a letter from Sarifudin
registering or authorizing Flor Gutierrez... rather, [what] we
received [was a] revocation of her appointment.” He also
revealed that the name of the accused does not appear in the
records of the POEA as being employed by the agency from the
assumption of its license on June 11, 1993, up to its termination
on June 11, 1995.
- Defense likewise alleged that complainants Rosemarie Tugade
and Evelyn Ramos executed Affidavits of Desistance dated May
12, 1995, stating that the accused had returned to them the
amounts they paid her and that the complaint was a result of a
misunderstanding.
Labor Law 1
- Trial court rendered its Decision finding the accused guilty
beyond reasonable doubt of Illegal Recruitment in Large Scale.
Accused Flor Gutierrez filed an appeal seeking the reversal of
her conviction.
ISSUE
WON Gutierres as a representative of a duly licensed
recruitment agency, she cannot be held guilty of Illegal
Recruitment in Large Scale
HELD
NO
- Appellant cannot escape liability by claiming that she was not
aware that before working for her employer in the recruitment
agency, she should first be registered with the POEA. Illegal
recruitment in large scale is malum prohibitum, not malum in
se. Good faith is not a defense.
- That appellant engaged in recruitment and placement is
beyond dispute. The complaining witnesses categorically
testified that the accused promised them on several occasions
that they would be leaving for work abroad. Appellant received
complainants’ money and documents, a fact that the
complainants themselves witnessed and which the accused
acknowledged when she returned the same to them after the
filing of the case against her. Appellant even brought
complainant Rosalyn Sumayo to the airport three times, raising
her expectations, but leaving her hanging in mid-air. The
accused even had the audacity to demand cancellation fees
from the complainants when they asked for a refund. Moreover,
the Affidavits of Desistance executed by two of the
complainants deserve little weight. The Court attaches no
persuasive value to affidavits of desistance, especially when
executed as an afterthought.
- Section 11, Rule II, Book II of the Rules and Regulations
Governing Overseas Employment requires the prior approval of
the POEA of the appointment of representatives or agents:
Section 11. Appointment of Representatives. Every
appointment of representatives or agents of licensed agency
shall be subject to prior approval or authority of the
Administration.
The approval may be issued upon submission of or
compliance with the following requirements:
a. Proposed appointment or Special Power of Attorney;
b. Clearances of the proposed representative or agent
from NBI;
c. A sworn or verified statement by the designating or
appointing person or company assuming full responsibility for
all the acts of the agent or representative done in connection
with the recruitment and placement of workers.
Approval by the Administration of the appointment or
designation does not authorize the agent or representative to
establish a branch or extension office of the licensed agency
represented.
Any revocation or amendment in the appointment should be
communicated to the administration. Otherwise, the
designation or appointment shall be deemed as not revoked
or amended.
Section 1, Rule X of the same Book, in turn, provides that
“recruitment and placement activities of agents or
representatives appointed by a licensee, whose appointments
were not authorized by the Administration shall likewise
constitute illegal recruitment.”
- The Certification from the POEA that it “has not received nor
acknowledged the representation of Ms. Gutierrez” establishes
that the appointment of appellant by Serafudin as a
representative or agent was not authorized by the POEA. It may
be true that the POEA received from Serafudin a revocation of
appellant’s appointment, but still is of no consequence since
Serafudin in the first place did not submit her appointment to
the POEA, and so the POEA has nothing to approve.
- As found by the trial court the evidence on record, notably
appellant’s own version, indicates that she was running her own
labor recruitment business.
A2010 - 122 - Disini
Disposition Decision of the Regional Trial Court, finding
appellant Flor Gutierrez y Timod guilty beyond reasonable
doubt of the crime of Illegal Recruitment in Large Scale and
sentencing her to life imprisonment and to pay a fine of
P100,000.00 is AFFIRMED.
2.07 ENFORCEMENT AND
SANCTIONS
EXECUTIVE SECRETARY V CA
[PAGE 20]
2.08 LIABILITY OF AGENCY
G & M (PHIL) INC V BATOMALAQUE
461 SCRA 111
CARPIO MORALES; June 23, 2005
NATURE
Appeal from a decision of CA
FACTS
- In Feb.‘92, Abdul Aziz Car Maintenance Association, a Saudi
Arabian entity based in Riyadh, hired respondent, Willie
Batomalaque, as a car painter at a monthly salary of US$370 for
a 2-year period through its agent, petitioner G&M (Phil.), Inc. In
accordance with the employment contract, respondent started
working for Abdul Aziz in Mar.’92 at a monthly salary of US$370
which according to him was equivalent to 1,200 Saudi riyals.
- In June ‘94 respondent was repatriated and later filed a
complaint against petitioner, Abdul Aziz, and Country Empire
Insurance Company with the POEA for non-payment and
underpayment of salaries and damages.
- Batomalaque claimed that for the first 4 months of
employment, he received a monthly salary of 900 Saudi riyals,
and for the fifth month (July ‘92) up to the end of the 12th
month (Feb ‘93), he received a monthly salary of 700 Saudi
riyals; that after a 1-year stint with Abdul Aziz, the workshop
where he was working was sold but the new owner did not hire
him; that for 11 months he was jobless; that Abdul Aziz hired
him again and started working for it in Feb ‘94 for which he was
paid 1,200 Saudi riyals; and that he resigned in May ‘94 since
he was not paid his salary for the months of March and April
‘94, which 2-month salary, was, however, used to purchase his
airline ticket on his repatriation to the Philippines. LA, NLRC and
CA ruled in favor of respondent.
ISSUES
1. WON CA erred in awarding respondent his underpayment of
salaries and wages
2. WON petitioner, as the recruiter and agent of Abdul Aziz, is
thus solidarily liable with the latter for the unpaid wages of
respondent
HELD
1. NO
Ratio It is settled that as a general rule, a party who alleges
payment as a defense has the burden of proving it. Specifically
with respect to labor cases, the burden of proving payment of
monetary claims rests on the employer, the rationale being that
the pertinent personnel files, payrolls, records, remittances and
other similar documents — which will show that overtime,
differentials, service incentive leave and other claims of
workers have been paid — are not in the possession of the
worker but in the custody and absolute control of the employer.
Reasoning
- Aside from its bare allegation that its principal Abdul Aziz had
fully paid respondent’s salaries, petitioner did not present any
Labor Law 1
evidence, e.g., payroll or payslips, to support its defense of
payment.
2. YES
Ratio Contractual undertakings submitted to the Bureau of
Employment Services constitute the legal basis for holding
petitioner, and other private employment or recruitment
agencies, liable jointly and severally with its principal, the
foreign-based employer, for all claims filed by recruited workers
which may arise in connection with the implementation of the
service agreements or employment contracts.
Reasoning
[1] Basis for liability: First, in applying for its license to operate
a private employment agency for overseas recruitment and
placement, petitioner was required to submit, among others, a
document or verified undertaking whereby it assumed all
responsibilities for the proper use of its license and the
implementation of the contracts of employment with the
workers it recruited and deployed for overseas employment.
Second, it was also required to file with Bureau a formal
appointment or agency contract executed by the foreign-based
employer in its favor to recruit and hire personnel for the
former, which contained a provision empowering it to sue and
be sued jointly and solidarily with the foreign principal for any of
the violations of the recruitment agreement and the contracts
of employment. And third, it was required as well to post such
cash and surety bonds as determined by the Sec. of Labor to
guarantee compliance with prescribed recruitment procedures,
rules and regulations, and terms and conditions of employment
as appropriate.
[2] The fact of underpayment does not shift the burden of
evidence to the respondent Batomalaque because partial
payment does not extinguish the obligation. Only when the
debtor introduces evidence that the obligation has been
extinguished does the burden of evidence shift to the creditor
who is then under a duty of producing evidence to show why
payment does not extinguish the obligation.
Disposition CA decision is AFFIRMED with the MODIFICATION.
Batomalaque is only entitled to 5,200 Saudi riyals, instead of
5,500 Saudi riyals.
2.09 MIGRANT WORKERS ACT
PHIL EMPLOY SERVICES AND RESOURCES INC V
PARAMIO
427 SCRA 732
CALLEJO SR; April 15, 2004
FACTS
- petitioners are a local agency engaged in the business of
providing employment overseas.
- Respondents are overseas workers sent by said agency to
work for Kuan Yuan Fiber Co., Ltd. Hsei-Chang. They had
separate contracts and each paid P19,000 as placement fee.
- They experienced and endured harsh conditions including
eating just one meal a day, substandard living quarters,
excessive working hours, unexplained deductions in salaries
among others.
- Paramio, in the course of his work and due to not being fed
dinner and breakfast, injured his thumb while carrying a heavy
load. Due to this he was sent home with significant deductions
to his pay.
- Navarra allegedly had an altercation with his superior and due
to this was repatriated.
- other respondents opted to go home due to said inhumane
work conditions they were subjected to. They were made to
write quitclaims and pay for their own airfare.
- Upon arriving in Manila, they instituted separate actions for
illegal dismissal, non-payment of overtime pay, refund of
placement fee, tax refund, refund of plane fares, attorney’s fees
and litigation expenses against the agency
A2010 - 123 - Disini
- Paramio et al argued that under Section 10, Republic Act
No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, PSRI was solidarily liable
with Kuan Yuan for their claims. Since they were repatriated
prior to the expiration of their respective contracts for no valid
reason, PSRI was liable to pay their salaries for the unexpired
portion of their contracts
- agency on the other hand contended that all of them were
validly dismissed
- Labor Arbiter ruled that their dismissal was illegal and
awarded damages. NLRC reversed. CA affirmed decision of
Labor Arbiter.
ISSUES
WON the respondents were illegally dismissed
HELD
NO
- We rule that respondents’ dismissal was not based on just,
valid and legal grounds.
- The rule lex loci contractus (the law of the place where the
contract is made) governs. Therefore, the Labor Code, its
implementing rules and regulations, and other laws affecting
labor, apply in this case
- In order to effect a valid dismissal of an employee, the law
requires that there be just and valid cause as provided in Article
282 and that the employee was afforded an opportunity to be
heard and to defend himself
- regarding Paramio agency insists that his dismissal was valid
based on paragraph 8.2, Nos. 5 and 6, Article VIII of the
employment contract which states that if employer finds
employee with a disease which cannot be cured within a month;
or being found losing ability to work, employer may rescind
contract and repatriate employee with airfare costs against
employee.
- However Art. 284 of Labor Code and Section 8, Rule 1, Book VI
of the Omnibus Rules Implementing the Labor Code state that
“…the employer shall not terminate his employment unless
there is a certification by competent public authority that the
disease is of such nature or at such a stage that it cannot be
cured within a period of six (6) months with proper medical
treatment”
- employer has the duty to prove that employee cannot
continue work due to the disease.
- this was not proven. In fact, despite the thumb injury
sustained by Paramio, he was even assigned to the most
physically taxing jobs. Only after he could no longer bear the
pain did he ask for a little break.
- thus his dismissal based on his injury was illegal.
Consequently, respondent Paramio is entitled to the full
reimbursement of his placement fee with interest at twelve
percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract for three months for every
year of the unexpired term, whichever is less under paragraph
5, Section 10 of Rep. Act No. 8042: “Section 10. Money
Claims –…In case of termination of overseas employment
without just, valid or authorized cause as defined by law or
contract, the worker shall be entitled to the full reimbursement
of his placement fee with interest at twelve percent (12%) per
annum, plus his salaries for the unexpired portion of his
employment contract or three (3) months for every year of the
unexpired term, whichever is less.”
- also, Skippers Pacific, Inc. v. Mira, we ruled that an overseas
Filipino worker who is illegally terminated shall be entitled to his
salary equivalent to the unexpired portion of his employment
contract if such contract is less than one year. However, if his
contract is for a period of at least one year, he is entitled to
receive his salaries equivalent to the unexpired portion of his
contract, or three months’ salary for every year of the
unexpired term, whichever is lower
- Regarding Paramio, it was also not proven that he had an
altercation with his superior. The agency never presented
evidence to prove such claim. They weren’t even able to
provide a statement from his superior regarding the issue.
Labor Law 1
Respondent Navarra asserted that he merely enforced his rights
under the employment contract when he requested, time and
again, that the provisions of his contract regarding the
accommodation be fulfilled
- Navarra was deployed on November 6, 1996 He was
repatriated on May 10, 1997, approximately five months prior
to the expiration of his one-year contract. He shall be entitled to
an amount equivalent to three months’ salary, or NT$46,080.
Similarly, having admitted that he paid a placement fee of
P19,000 only, he is entitled to be fully reimbursed therefore,
plus 12% interest per annum.
- regarding the other respondents, their quitclaims were not
valid. The records reveal that the three respondents agreed to
execute the foregoing because they could no longer bear the
working conditions in their place of employment. Despite
protestations to their employer and the attempt to seek help
from the OWWA in Taiwan.
- they were constructively dismissed from their employment.
There is constructive dismissal if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable
on the part of the employee that it would foreclose any choice
by him except to forego his continued employment
- Under Section 10, paragraph 5 of Rep. Act No. 8042,
respondents Sarmiento, Bautista, Curameng and Guillermo are
entitled to the full reimbursement of their placement fees.
Since each of the respondents remitted only P19,000 to the
petitioner, each of them is entitled to P19,000, plus 12%
interest per annum.
- Section 10, paragraph 2 of Rep. Act No. 8042, the agency
which deployed the employees whose employment contract
were adjudged illegally terminated, shall be jointly and
solidarily liable with the principal for the money claims awarded
to the aforesaid employees. Consequently, the petitioner, as
the agency of the respondents, is solidarily liable with its
principal Kuan Yuan for the payment of the salaries due to the
respondents corresponding to the unexpired portion of their
contract, as well as the reimbursement of their placement fees.
PLACEWELL INTERNATIONAL SERVICES V CAMOTE
492 SCRA 761
YNARES-SANTIAGO; June 26, 2006
NATURE
Petition for certiorari of the September 27, 2005 Decision of the
CA in CA-G.R. SP No. 77145, which set aside the November 20,
2002 Resolution of the NLRC and reinstated with modifications
the May 31, 2002 Decision of Labor Arbiter Arturo L. Gamolo.
FACTS
- On August 15, 1999, petitioner deployed respondent to work
as building carpenter for SAAD Trading and Contracting Co.
(SAAD) at the Kingdom of Saudi Arabia (KSA) for a 2 yr. contract
with a salary of US$370/month.
- At the job site, respondent was allegedly found incompetent
by his foreign employer; thus the latter decided to terminate his
services. However, respondent pleaded for his retention and
consented to accept a lower salary of SR 800.00 per month.
Thus, SAAD retained respondent until his return to the
Philippines two years after
- On November 27, 2001, respondent filed a complaint for
money claims against petitioner alleging that when he arrived
at the job site, he and his fellow Filipino workers were required
to sign another employment contract written in Arabic under
the constraints of losing their jobs if they refused; that for the
entire duration of the new contract, he received only SR 590.00
per month; that he was not given his overtime pay despite
working 9hrs/day; that he and his co-workers sought assistance
from the Philippine Embassy but they did not succeed in
pursuing their cause of action because of difficulties in
communication.
- On May 31, 2002, the labor arbiter rendered a decision
holding that the modification of respondent’s employment
contract is not allowed under Section 10 of R.A. 8042; thus, he
A2010 - 124 - Disini
should have received the original contracted salary of
US$370/month instead of the new rate given by SAAD. It was
also noted that respondent did not refute petitioner’s allegation
regarding the non-payment of placement and other processing
fees prior to deployment. The labor arbiter also found that there
is no differential as far as respondent’s overtime pay is
concerned considering that he was given overtime pay based
on the new rate of SR 800.00. Since respondent rendered one
hour of overtime work per day for only 18 months, and not the
entire 24 months as claimed, the total overtime pay he
received is more or less equivalent to the amount he ought to
have received if the original contracted rate of US$370.00 was
used. Finally, the labor arbiter awarded respondent attorney’s
fees equivalent to 10% of the total judgment award for being
compelled to hire a counsel to protect his rights and interests.
- NLRC set aside the decision. CA set aside NLRC’s decision and
affirmed Labor Arbiter.
ISSUES
WON respondent has a right to the money claims
HELD
YES
Ratio R.A. No. 8042 explicitly prohibits the substitution or
alteration to the prejudice of the worker, of employment
contracts already approved and verified by the Department of
Labor and Employment (DOLE) from the time of actual signing
thereof by the parties up to and including the period of the
expiration of the same without the approval of the DOLE.
Reasoning
- The unauthorized alteration in the employment contract of
respondent, particularly the diminution in his salary from
US$370.00 to SR 800.00 per month, is void for violating the
POEA-approved contract which set the minimum standards,
terms, and conditions of his employment.
- Moreover, we find that there was no proper dismissal of
respondent by SAAD; the "termination" of respondent was
clearly a ploy to pressure him to agree to a lower wage rate for
continued employment. Thus, the original POEA-approved
employment contract of respondent subsists despite the so-
called new agreement with SAAD. Consequently, the solidary
liability of petitioner with SAAD for respondent’s money claims
continues in accordance with Section 10 of R.A. 8042.
- As to petitioner’s claim that respondent was barred by laches,
respondent filed his claim within the three-year prescriptive
period for the filing of money claims set forth in Article 291 of
the Labor Code from the time the cause of action accrued.
Thus, we find that the doctrine of laches finds no application in
this case.
- The labor arbiter and the CA did not err in awarding attorney’s
fees to respondent. It is settled that in actions for recovery of
wages or where an employee was forced to litigate and incur
expenses to protect his rights and interests, he is entitled to an
award of attorney’s fees. However, with regard to Unauthorized
Deductions amounting to P171,780.00; we note that the
appellate court did not state any basis for its award, thus, the
same is deleted for lack of factual and legal basis.
Disposition Instant petition is PARTLY GRANTED. The Decision
of the Court of Appeals in CA-G.R. SP No. 77145 dated
September 27, 2005 is AFFIRMED with MODIFICATION that the
amount of P171,780 representing Unauthorized Deductions is
DELETED for lack of basis.
SECTION 3: ALIEN EMPLOYMENT
3.01 COVERAGE
NON-RESIDENT ALIEN
ALMODIEL V NLRC (RAYTHEON PHILS INC)
Labor Law 1
223 SCRA 341
NOCON; June 14, 1993
NATURE
Petition for certiorari of an NLRC decision which set aside the
Labor Arbiter’s decision and ordered instead the payment of
separation pay and financial assistance.
FACTS
- Petitioner Almodiel is a CPA, was a Cost Accounting Manager
of respondent Raytheon Philippines. His major duties were: (1)
plan, coordinate, carry out year and physical inventory; (2)
formulate and issue out hard copies of Standard Product
costing and other cost/pricing analysis if needed and (3) set up
the written Cost Accounting System for the whole company.
- The standard cost accounting system was installed and used
at the Raytheon plants and subsidiaries worldwide. As a
consequence, the services of a Cost Accounting Manager
allegedly entailed only the submission of periodic reports that
would use computerized forms prescribed and designed by the
international head office in California
- Later, Almodiel was summoned told of the abolition of his
position on the ground of redundancy.
- Almodiel thus filed the complaint for illegal dismissal before
the Arbitration Branch of NCR, NLRC.
- The court below found that the parties had no arrived at a
definite understanding.
Labor Arbiter rendered judgment in favor of Almodiel, finding
that the ground of redundancy was highly irregular and without
legal and factual basis, ordering the respondents to reinstate
complainant, with full backwages, and moral and exemplary
damages.
- NLRC reversed the decision, and instead merely ordered
Raytheon to pay P100,000 separation pay/financial assistance
- Petitioner thus filed this petition: The public respondent
committed grave abuse of discretion amounting to (lack of) or
in excess of jurisdiction in declaring as valid and justified the
termination of petitioner on the ground of redundancy in the
face of clearly established finding that petitioner's termination
was tainted with malice, bad faith and irregularity.
- Termination of an employee’s services because of redundancy
is governed by Art. 283 of the Labor code:
Art. 283. Closure of establishment and reduction of
personnel. — The employer may also terminate the
employment of any employee due to installation of labor-
saving devices, redundancy, retrenchment to prevent losses
or the closing or cessation of operation of the establishment
or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written
notice on the worker and the Department of Labor and
Employment at least one (1) month before the intended date
thereof. In case of termination due to installation of labor-
saving devices or redundancy, the worker affected thereby
shall be entitled to a separation pay equivalent to at least one
(1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of
closure or cessation of operations of establishment or
undertaking not due to serious business losses or financial
reverses, the separation pay shall be equivalent to at least
one (1) month pay or at least one-half (1/2) month pay for
every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered as one (1) whole
year.
ISSUE
WON bad faith, malice, and irregularity crept in the abolition of
petitioner’s position of Cost Accounting Manager on the ground
of redundancy, thus making the dismissal illegal
HELD
NO
Reasoning
A2010 - 125 - Disini
- There simply wasn’t evidence showing that there was bad
faith or malice or irregularity at all.
- The wisdom or soundness of such characterization or decision
was not subject to discretionary review on the part of the Labor
Arbiter nor of the NLRC so long, of course, as violation of law or
merely arbitrary and malicious action is not shown.
- It is a well-settled rule that labor laws do not authorize
interference with the employer's judgment in the conduct of his
business. The determination of the qualification and fitness of
workers for hiring and firing, promotion or reassignment are
exclusive prerogatives of management. The Labor Code and its
implementing Rules do not vest in the Labor Arbiters nor in the
different Divisions of the NLRC (nor in the courts) managerial
authority. The employer is free to determine, using his own
discretion and business judgment, all elements of employment,
"from hiring to firing" except in cases of unlawful discrimination
or those which may be provided by law. There is none in the
instant case.
Disposition Finding no grave abuse of discretion on the part
of the National Labor Relations Commission in reversing and
annulling the decision of the Labor Arbiter and that on the
contrary, the termination of petitioner's employment was
anchored on a valid and authorized cause under Article 283 of
the Labor Code, the instant petition for certiorari must fail.
*** the only part relevant to this part of the outline:
Likewise destitute of merit is petitioner's imputation of unlawful
discrimination when Raytheon caused corollary functions
appertaining to cost accounting to be absorbed by Danny Ang
Tan Chai, a resident alien without a working permit. Article 40
of the Labor Code which requires employment permit refers to
non-resident aliens. The employment permit is required for
entry into the country for employment purposes and is issued
after determination of the non-availability of a person in the
Philippines who is competent, able and willing at the time of
application to perform the services for which the alien is
desired. Since Ang Tan Chai is a resident alien, he does not fall
within the ambit of the provision
3.02 TECHNIQUE REGULATION –
EMPLOYMENT PERMIT
AUTHORITY EMPLOYMENT PERMIT –
ISSUANCE
GENERAL MILLING CORP V TORRES
SECTION 4: EMPLOYMENT OF
APPRENTICES, LEARNERS AND
HANDICAPPED WORDERS
4.01 POLICY OBJECTIVES
A. APPRENTICE
4.02 APPRENTICE
REQUIREMENT PROGRAM APPROVAL
NITTO ENTERPRISES V NLRC (CAPILI)
248 SCRA 654
Labor Law 1 A2010 - 126 - Disini
KAPUNAN; September 29, 1995 Ratio The twin requirements of due process, substantive and
procedural, must be complied with, before valid dismissal
exists. Without which, the dismissal becomes void.
FACTS
Reasoning
- Nitto Enterprises, a company engaged in the sale of glass and
- This simply means that the employer shall afford the worker
aluminum products, hired Roberto Capili sometime in May 1990
ample opportunity to be heard and to defend himself with the
as an apprentice machinist, molder and core maker as
assistance of his representative, if he so desires. Ample
evidenced by an apprenticeship agreement for a period of 6
opportunity connotes every kind of assistance that
months from May 28, 1990 to November 28, 1990 with a daily
management must accord the employee to enable him to
wage rate of P66.75 which was 75% of the applicable minimum
prepare adequately for his defense including legal
wage.
representation.
- At around 1 pm of August 2, 1990, Capili who was handling a
- As held in the case of Pepsi-Cola Bottling Co., Inc. v. NLRC:
piece of glass which he was working on, accidentally hit and
The law requires that the employer must furnish the worker
injured the leg of an office secretary who was treated at a
sought to be dismissed with 2 written notices before
nearby hospital. Later that same day, after office hours, Capili
termination can be legally effected: (1) notice which apprises
entered a workshop within the office premises which was not
the employee of the particular acts or omissions for which his
his work station. There, he operated one of the power press
dismissal is sought; and (2) the subsequent notice which
machines without authority and in the process injured his left
informs the employee of the employer's decision to dismiss
thumb. Nitto Enterprises spent the amount of P1,023.04 to
him (Sec. 13, BP 130; Sec. 2-6, Rule XIV, Book V, Rules and
cover his medication.
Regulations Implementing the Labor Code as amended).
- The following day, Capili was asked to resign [letter was in
Failure to comply with the requirements taints the dismissal
Tagalog and quite long but basically narrates the events above
with illegality. This procedure is mandatory; in the absence of
as grounds for dismissal]. On August 3, 1990 he executed a
which, any judgment reached by management is void and
Quitclaim and Release in favor of Nitto Enterprises in
inexistent.
consideration of the sum of P1,912.79. Capili filed a complaint
- Capili filed a case of illegal dismissal with the Labor Arbiter
for illegal dismissal and payment of other monetary benefits.
only 3 days after he was made to sign a Quitclaim, a clear
- The Labor Arbiter found the termination valid and dismissed
indication that such resignation was not voluntary and
the money claim for lack of merit. Nitto, however was ordered
deliberate. He averred that he was actually employed by
to pay Capili the amount of P500 as financial assistance. The
petitioner as a delivery boy ("kargador" or "pahinante"). He
NLRC reversed and declared that Capili was a regular employee
further asserted that petitioner "strong-armed" him into signing
of Nitto Enterprises.
the resignation letter and quitclaim without explaining to him its
contents. Petitioner made it clear to him that anyway, he did
ISSUES
not have a choice.
1. WON the NLRC committed grave abuse of discretion in
- Nitto Enterprises cannot disguise the summary dismissal of
holding that Capili was not an apprentice
Capili by orchestrating the latter's alleged resignation and
2. WON the NLRC committed grave abuse of discretion in
subsequent execution of a Quitclaim and Release. A judicious
holding that Nitto Enterprises had not adequately proven the
examination of both events belies any spontaneity on Capili's
existence of a valid cause in terminating the service of Capili
part.
Disposition Decision of the NLRC is AFFIRMED.
HELD
1. NO
Ratio Prior approval by the DOLE of a proposed apprenticeship B. LEARNERS
program is a condition sine qua non before an apprenticeship
agreement can be validly entered into.
C. HANDICAPPED WORKERS
Reasoning
- The act of filing the proposed apprenticeship program with the REGULAR WORKER
Department of Labor and Employment is a preliminary step
towards its final approval and does not instantaneously give rise BERNARDO V NLRC (FAR EAST BANK AND TRUST
to an employer-apprentice relationship. Article 61 of the Labor
Code provides:
COMPANY)
Contents of apprenticeship agreement. - Apprenticeship [PAGE 104]
agreements, including the main rates of apprentices, shall
conform to the rules issued by the Minister of Labor and
Employment. The period of apprenticeship shall not exceed 6 SECTION 5: CONDITIONS OF
months. Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall start
EMPLOYMENT – HOURS OF
below 75% per cent of the applicable minimum wage, may he WORK
entered into only in accordance with apprenficeship program
duly approved by the Minister of Labor and Employment. The
Ministry shall develop standard model programs of
apprenticeship. 5.01 HOURS REGULATION
- The apprenticeship agreement between Nitto Enterprises and
Capili was executed on May 28, 1990 allegedly employing the RATIONALE AND ENFORCEMENT
latter as an apprentice in the trade of "core maker/molder." On
the same date, an apprenticeship program was prepared by
petitioner and submitted to the DOLE. However, the
MANILA TERMINAL CO INC V CIR
apprenticeship agreement was filed only on June 7, 1990.
Notwithstanding the absence of approval by the DOLE the
apprenticeship agreement was enforced the day it was signed. 5.02 COVERAGE
Nitto Enterprises did not comply with the requirements of the
law.
2. NO RATIONALE EXEMPTION –
MANAGERIAL EMPLOYEES
Labor Law 1
PEÑARANDA V BAGANGA PLYWOOD CORP
[PAGE 1]
ASIA PACIFIC CHARTERING (PHILS) INC V FAROLAN
393 SCRA 454
CARPIO-MORALES; December 4, 2002
NATURE
CERTIORARI under Rule 45 of the
FACTS
- Asia Pacific Chartering (Phils) Inc. [APC] was, until 1996, the
general sales agent (GSA) of the Scandinavian Airline System
(SAS), an off-line international airline company with license to
do business in the Philippines.
- As GSA, APC sold passenger and cargo spaces for airlines
operated by SAS.
- Maria Linda R. Farolan was hired as Sales Manager of APC for
its passenger and cargo GSA operations for SAS, following her
conformity to a letter-offer of employment from APC through its
Vice President/Comptroller Catalino Bondoc.
- In a report by Farolan, she indicated that there was a drop in
SAS’ sales revenues which to her was attributable to market
forces beyond her control.
- Noting the marked decline in SAS’ sales revenues, APC
directed its high ranking officer Roberto Zozobrado to conduct
an investigation on the matter and identify the problem/s and
implement possible solutions.
- Zozobrado thus informally took over some of FAROLAN’s
marketing and sales responsibilities, albeit respondent retained
her title as Sales Manager and continued to receive her salary
as such.
- APC claimed that:
> Zozobrado found out that FAROLAN did not adopt any sales
strategy nor conduct any sales meeting or develop other
sources of revenue for SAS, she having simply let her sales staff
perform their functions all by themselves;
> In 1994, Soren Jespersen, GM of SAS in Hongkong, Southern
China, Taipei and the Philippines, came to the Philippines to
assess the statistics on SAS’ sales revenues and SAS was
convinced that FAROLAN was not fit for the job of Sales
Manager; and in view of the changes introduced by Zozobrado,
SAS-GSA sales operations drew positive results.
- May 1994: Jespersen sent a message to Farolan and
Zozobrado congratulating them for the increase in sales results
and for exceeding the target set by 50% while June 1994:
Jespersen sent a msg to Farolan saying that the sales report for
June 1994 did unfortunately not reach target.
- On even date, APC sent respondent a letter of termination on
the ground of "loss of confidence."
- This spawned the filing by FAROLAN of a complaint for illegal
dismissal against APC, Bondoc, Zozobrado and one Donald
Marshall (the record indicates that he had ceased to be
connected with petitioner when the case was pending before
the Labor Arbiter), with prayer for damages and attorney’s fees.
- In her complaint petitioner alleged that Bondoc and Zozobrado
had asked her to tender her resignation as she was not the
person whom SAS was looking for to handle the position of
Sales Manager but that she refused, hence, she was terminated
by the letter of July 18, 1994 letter.
- LA: found for FAROLAN that APC dismissed her without just
cause, effected with malice, ill will and bad faith
- NLRC: reversed the LA’s decision; recognized the right of APC
as employer to terminate or dismiss employees based on loss of
trust and confidence, the right being a management
prerogative.
- Farolan’s MR denied; appealed to CA
- CA: reversed the NLRC decision; LA’s decision upheld with
modifications
ISSUE
WON FAROLAN’s dismissal was legal
A2010 - 127 - Disini
HELD
YES
Reasoning
- Requisites for a valid dismissal of an EMPLOYEE:
(a) the employee must be afforded due process, i.e., he must
be given opportunity to be heard and to defend himself; and
(b) dismissal must be for a valid cause as provided in Article
282 of the Labor Code or any of the authorized causes under
Article 283 and 284 of the same Code.
- AS REGARDS (A) THE LA FOUND THAT FAROLAN WAS
DEPRIVED OF DUE PROCESS (this was upheld by the CA):
*W/O any semblance of, or written authority whatsoever,
Zozobrado took over the functions of complainant.
Complainant claims that she has been told it was upon the
will of respondent Marshall that she be replaced. Bondoc
summoned Farolan and told her to tender her resignation or
face termination, which she refused to do. Thereafter, she
was finally terminated, without being afforded the
opportunity to be heard and to present evidence in her
defense. She was never given a written notice stating the
particular acts or omission constituting the grounds for her
dismissal as required by law.
- AS REGARDS (B): the rule is settled that in termination cases,
the employer bears the onus of proving that the dismissal is for
just cause failing which the dismissal is not justified and the
employee is entitled to reinstatement.
APC’S CLAIMS:
- FAROLAN failed to live up to management’s expectation in
light of her failure to adopt sales and marketing strategies to
increase sales revenues of SAS, which failure is reflective of her
incompetence and inefficiency, thus resulting to loss of
revenues in 1993 and 1994.
- Had it not been through Zozobrado’s efforts, SAS sales
revenues could not have recovered.
- Jespersen was the one who initiated the termination of
respondent because of her "dismal performance" in handling its
operations.
- Reiterated the principle that the right to dismiss a managerial
employee is a measure of self-preservation; Cited the cases of
Grand Motor Parts Corp. v. Minister of Labor et al., and Buiser et
al. v. Legardo.
THE NATURE OF FAROLAN’S JOB AS SALES MANAGER
- It is not disputed that her job description, and the terms and
conditions of her employment, with the exception of her salary
and allowances, were never reduced to writing.
- Recent decisions of this Court distinguish the treatment of
managerial employees from that of rank and file personnel
insofar as the application of the doctrine of loss of trust and
confidence is concerned.
"Thus with respect to rank and file personnel, loss of trust
and confidence as ground for valid dismissal requires proof of
involvement in the alleged events in question and that mere
uncorroborated assertions and accusations by the employer
will not be sufficient. But as regards a managerial employee,
mere existence of a basis for believing that such employee
has breached the trust of his employer would suffice for his
dismissal."
- Samson v. NLRC: (RULE FOR THIS CASE!)
"Before one may be properly considered a managerial
employee, all the following conditions must be met:
(1) Their primary duty consists of the management of
the establishment in which they are employed or of a
department or subdivision thereof;
(2) They customarily and regularly direct the work of
two or more employees therein;
(3) They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
employees are given particular weight. (Section 2(b),
Rule I, Book III of the Omnibus Rules Implementing the
Labor Code, emphasis supplied).
Labor Law 1
- FAROLAN’S JOB: dealt mainly with servicing of existing
clientele. Bondoc, however, described respondent’s functions
and duties as critical.
- Paper Industries Corp. of the Philippines v. Laguesma:
"Managerial employees are ranked as Top Managers, Middle
Managers and First Line Managers. The mere fact that an
employee is designated "manager" does not ipso facto make
him one-designation should be reconciled with the actual job
description of the employee for it is the job description that
determines the nature of employment."
- Dismissal on the ground of "loss of confidence" should have a
basis and determination cannot be left entirely to the employer.
-Loss of trust and confidence to be a valid ground for an
employee’s dismissal must be based on a willful breach and
founded on clearly established facts.
- A breach is willful if it is done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished from an
act done carelessly, thoughtlessly, heedlessly or inadvertently.
- The two letters sent by SAS to respondent in 1994 in fact
negate willful breach of her duties by respondent.
- While APC attributed the improvement of sales in 1994 to
Zozobrado, the fact remains that FAROLAN was still the Sales
Manager up to July 1994, in charge of those "sales meetings"
during which pertinent market strategies were developed and
utilized to increase sales.
- The Grand Motors case cited by APC, however, involved a
probationary employee-manager who failed to, among other
things, submit required monthly reports and violated company
policy, clearly mirroring his insubordination and disrespect to
express instructions of management.
- In the Buiser case: "[f]ailure to observe prescribed standards
of work, or to fulfill reasonable work assignments due to
inefficiency" may be just cause for dismissal, petitioner has
neither shown what standards of work or reasonable work
assignments were prescribed which respondent failed to
observe nor that if she did fail to observe any such, it was due
to inefficiency.
-It bears noting that there is no showing that respondent
represented herself as possessed of the highest degree of skill
and care known in the trade.
- FAROLAN was the one approached or offered the job; She thus
could not just be unceremoniously discharged for "loss of
confidence" arising from alleged incompetency
- "While an employee may be dismissed because of
inefficiency, neglect or carelessness, the law implies a
situation or undertaking by an employee in entering into
a contract of employment that he is competent to
perform the work undertaken and is possessed of the
requisite skill and knowledge to enable him to do so,
and that he will do the work of the employer in a careful
manner. If he is not qualified to do the work which he
undertakes, if he is incompetent, unskillful or inefficient,
or if he executes his work in a negligent manner or is
otherwise guilty of neglect of duty, he may lawfully be
discharged before the expiration of his term of
employment."
DAMAGES:
- AS FAROLAN was instructed to resign or be terminated, she
was deprived of due process and denied "basic precepts of
fairness" when she was terminated. Her resultant sufferings
thus entitle her to an award of moral damages.
- Award of moral and exemplary damages for an illegally
dismissed employee is proper where the employee had been
harassed and arbitrarily terminated by the employer.
-In determining the amount of moral damages recoverable,
however, the business, social and financial position of the
offended party and the business or financial position of the
offender are taken into account.
Disposition CA’S decision is AFFIRMED with the
MODIFICATION that the amount of moral damages and
exemplary damages awarded to Farolan is hereby reduced to
P500,000.00 Pesos and P250,000.00, respectively.
A2010 - 128 - Disini
NATIONAL WATERWORKS & SEWERAGE
AUTHORITY V NWSA CONSOLIDATED UNIONS
11 SCRA 766
BAUTISTA ANGELO; August 31, 1964
NATURE
Petition for review of a decision of the Court of Industrial
Relations
FACTS
- Petitioner National Waterworks & Sewerage Authority is a
government-owned and controlled corporation created under
Republic Act No. 1383, while respondent NWSA Consolidated
Unions are various labor organizations composed of laborers
and employees of the NAWASA. The other respondents are
intervenors Centeno, et al., hereinafter referred to as
intervenors.
- Petitioner and respondent unions, conformably to a suggestion
of the Court of Industrial Relations on the controversy between
them, submitted a joint stipulation of facts on the issues
concerning the 40-Hour Week Law, “distress pay,” minimum
wage, filling of vacancies, night compensation, and salary
adjustments, reserving the right to present evidence on matters
not covered herein. Respondent intervenors filed a petition in
intervention on the issue for additional compensation for
nightwork. Later, however, they amended their petition by
including a new demand for overtime pay in favor of Centeno
and other employees receiving P4200 per annum or more.
- Petitioner filed a motion to dismiss the claim for overtime pay
alleging that respondent Court of Industrial Relations was
without jurisdiction to pass upon the same because, as mere
intervenors, the latter cannot raise new issues not litigated in
the principal case, the same not being the lis mota therein
involved. To this motion, the intervenors filed an opposition.
Thereafter, respondent court issued an order allowing the issue
to be litigated. Petitioners’s motion to reconsider having been
denied, it filed its answer to the petition for intervention.
- Finally, respondent rendered its decision stating among others
that (1) the NAWASA is an agency not performing governmental
functions and, therefore, is liable to pay additional
compensation for work on Sundays and legal holidays
conformably to Commonwealth Act No. 444, known as the
Eight-Hour Labor Law, even if said days should be within the
staggered five work-days authorized by the President and (2)
the intervenors do not fall within the category of “managerial
employees” as contemplated in Republic Act 2377 and so are
not exempt from the coverage of the Eight-Hour Labor Law;
even those intervenors attached to the General Auditing Office
and the Bureau of Public Works come within the purview of
Commonwealth Act No. 444.
- Its motion for reconsideration having been denied, NAWASA
filed the present petition for review.
ISSUE
WON the intervenors are “managerial employees” within the
meaning of Republic Act 2377 and, therefore, not entitled to the
benefits of Commonwealth Act No. 444, as amended
HELD
NO
- One of the distinguishing characteristics by which a
managerial employee may be known as expressed in the
explanatory note of Republic Act 2377 is that he is not subject
to the rigid observance of regular office hours. The true worth of
his service does not depend so much on the time he spends in
office but more on the results he accomplishes. In fact, he is
free to go out of office anytime.
- Section 2 of Republic Act 2377 provides:
“Sec. 2. This Act shall apply to all persons employed in any
industry or occupation whether public or private, with the
exception of farm laborers, laborers who prefer to be paid on
piece work basis, managerial employees, outside sales
personnel, domestic servants, persons in the personal service
Labor Law 1
of another and members of the family of the employer
working for him.
“The term `managerial employee’ in this Act shall mean
either (a) any person whose primary duty consists of the
management of the establishment in which he is employed or
of a customarily recognized department or subdivision
thereof, or (b) any officer or member of the managerial staff.”
- The philosophy behind the exemption of managerial
employees from the 8-Hour Labor Law is that such workers are
not usually employed for every hour of work but their
compensation is determined considering their special training,
experience, or knowledge which requires the exercise of
discretion and independent judgment, or perform work related
to management policies or general work related to
management policies or general business operations along
specialized or technical lines. For these workers it is not feasible
to provide a fixed hourly rate of pay or maximum hours of labor.
- The intervenors herein are holding positions of responsibility.
One of them is the Secretary of the Board of Directors. Another
is the private secretary of the general manager. Another is a
public relations officer, and many other chiefs of divisions or
sections and others are supervisors and overseers. Respondent
court, however, after examining carefully their respective
functions, duties, and responsibilities found that their primary
duties do not bear any direct relation with the management of
the NAWASA, nor do they participate in the formulation of its
policies nor in the hiring and firing of its employees. The chiefs
of divisions and sections are given ready policies to execute
and standard policies to observe for their execution. Hence, it
concludes, they have little freedom of action, as their main
function is merely to carry out the company’s orders, plans, and
policies.
- To the foregoing comment, the Court agrees. As a matter of
fact, they are required to observe working hours and record
their time work and are not free to come and go to their offices,
nor move about at their own discretion. They do not, therefore,
come within the category of “managerial employees” within the
meaning of the law.
Disposition Decision affirmed with modification.
SAMSON V NLRC (SCHERING-PLOUGH CORP)
330 SCRA 460
KAPUNAN; April 12, 2000
FACTS
- Samson was a District Sales Manager at SPC. During the 1993
Christmas party, he said obscene, offensive and insulting words
towards the management and the president infront of other
employees. On Jan 25 1994, he was given a letter which
enumerated conduct inimical to SPC. He was given 2 days to
explain. He replied on the same day, saying that it was an
informal event and that he was tipsy and denying the
accusations. He was preventively suspended that same day. He
was terminated on Feb 3 1994, for loss of confidence. He filed
complaint for illegal dismissal. LA decided in his favor. NLRC
reversed because it found that his gross misconduct warranted
termination. NLRC also said that in terminating the employment
of managerial employees, the employer is allowed a wider
latitude of discretion than in the case of ordinary rank-and-file.
ISSUES
1. WON termination was warranted
2. WON petitioner is managerial employee
HELD
1. NO
- The termination was illegal. The company’s code of conduct
punishes such misconduct by a verbal warning for a first
offense. There was no demoralization among the ranks, or at
least the behavior of the company doesn’t show urgency --- he
was given a letter weeks after the event occurred. Also, at a
meeting on Jan 3 1994, the president himself civilly and calmly
A2010 - 129 - Disini
told him that if there were disagreements, they should be
handled in a professional manner.
2. NO
- Before one may be properly considered a managerial
employee, all the following conditions must be met:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a department
or sub-division thereof;
(2) They customarily and regularly direct the work of two
or more employees therein;
(3) They have the authority to hire or fire other employees
of lower rank; or their suggestions and recommendations as
to the hiring and firing and as to the promotion or any other
change of status of other employees are given particular
weight.
- Although his position is a District Sales Manager, his job
description do not meet the above conditions for him to be
considered a managerial employee.
- Granting he was a managerial employee, loss of confidence as
a ground for termination is still without basis. Loss of trust and
confidence to be a valid ground for an employee's dismissal
must be clearly established. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable
excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on
substantial grounds and not on the employer's arbitrariness,
whims, caprices or suspicion, otherwise, the employee would
remain at the mercy of the employer. When petitioner made the
offensive utterances, it can be said that he merely acted
carelessly, thoughtlessly or heedlessly and not intentionally,
knowingly, purposely, or without justifiable excuse.
Disposition Petition granted. NLRC reversed and set aside.
Petitioner is thus entitled to reinstatement to his position as
District Sales Manager, unless such position no longer exists, in
which case he shall be given a substantially equivalent position
without loss of seniority rights. He is likewise entitled to the
payment of his full backwages.
TESTS- FIELD PERSONNEL
UNION OF FILIPRO EMPLOYEES V VIVAR
205 SCRA 200
GUTIERREZ JR; January 20, 1992
FACTS
- 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.
- 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.
- The respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November
1, 1974, the date of effectivity of the Labor Code. He adjudged,
however, that the company's sales personnel are field
personnel and, as such, are not entitled to holiday pay. He
likewise ruled that with the grant of 10 days' holiday pay, the
divisor should be changed from 251 to 261 and ordered the
reimbursement of overpayment for overtime, night differential,
vacation and sick leave pay due to the use of 251 days as
divisor.
ISSUES
1. WON Nestle's sales personnel are entitled to holiday pay
Labor Law 1
2. WON concomitant with the award of holiday pay, the divisor
should be changed from 251 to 261 days and WON the previous
use of 251 as divisor resulted in overpayment for overtime,
night differential, vacation and sick leave pay
HELD
1. NO
- Under Article 82, field personnel are not entitled to holiday
pay. Said article defines field personnel as "non-agricultural
employees who regularly perform their duties away from the
principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined
with reasonable certainty."
- The controversy centers on the interpretation of the clause
"whose actual hours of work in the field cannot be determined
with reasonable certainty." The SC concurs with the following
disquisition by the respondent arbitrator:.
- "The requirement for the salesmen and other similarly situated
employees to report for work at the office at 8:00 a.m. and
return at 4:00 or 4:30 p.m. is not within the realm of work in the
field as defined in the Code but an exercise of purely
management prerogative of providing administrative control
over such personnel. This does not in any manner provide a
reasonable level of determination on the actual field work of the
employees which can be reasonably ascertained. The
theoretical analysis that salesmen and other similarly-situated
workers regularly report for work at 8:00 a.m. and return to
their home station at 4:00 or 4:30 p.m., creating the
assumption that their field work is supervised, is surface
projection. Actual field work begins after 8:00 a.m. when the
sales personnel follow their field itinerary, and ends
immediately before 4:00 or 4:30 p.m. when they report back to
their office. The period between 8:00 a.m. and 4:00 or 4:30 p.m.
comprises their hours of work in the field, the extent or scope
and result of which are subject to their individual capacity and
industry and which 'cannot be determined with reasonable
certainty.' This is the reason why effective supervision over field
work of salesmen and medical representatives, truck drivers
and merchandisers is practically a physical impossibility.
Consequently, they are excluded from the ten holidays with pay
award.'
2. NO
- The divisor to be used is 251. The respondent arbitrator's
order to change the divisor from 251 to 261 days would result
in a lower daily rate which is violative of the prohibition on non-
diminution of benefits found in Article 100 of the Labor Code.
The Court 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.
Disposition Decision of Labor Arbiter is MODIFIED.
SALAZAR V NLRC (H. L. CARLOS CONSTRUCTION,
CO INC)
256 SCRA 273
KAPUNAN; April 17, 1996
NATURE
Petition for certiorari to annul the decision of the National Labor
Relations Commission
FACTS
- On 17 April 1990, private respondent, at a monthly salary of
P4,500.00, employed petitioner as construction/project engineer
for the construction of the Monte de Piedad building in Cubao,
Quezon City.
- Allegedly, by virtue of an oral contract, petitioner would also
receive a share in the profits after completion of the project and
that petitioner’s services in excess of eight (8) hours on regular
days and services rendered on weekends and legal holidays
shall be compensable overtime at the rate of P27.85 per hour.
A2010 - 130 - Disini
- On 16 April 1991, petitioner received a memorandum issued
by private respondent’s project manager, Engr. Nestor A.
Delantar informing him of the termination of his services
effective on 30 April 1991.
- Petitioner filed a complaint against private respondent for
illegal dismissal, unfair labor practice, illegal deduction, non-
payment of wages, overtime rendered, service incentive leave
pay, commission, allowances, profit-sharing and separation pay
with the NLRC.
- Labor Arbiter Raul T. Aquino dismissed the complaint for lack
of merit.
- NLRC affirmed, and also denied MFR
ISSUE
WON petitioner is entitled to overtime pay, premium pay for
services rendered on rest days and holidays and service
incentive leave pay, pursuant to Articles 87, 93, 94 and 95 of
the Labor Code
HELD
NO
- The NLRC concurred with the Labor Arbiter’s ruling that
petitioner was a managerial employee and, therefore, exempt
from payment of overtime pay, premium pay for holidays and
rest days and service incentive leave pay under the law.
- Petitioner claims that since he performs his duties in
the project site or away from the principal place of
business of his employer, he falls under the category of
“field personnel.”
- However, petitioner accentuates that his case constitutes the
exception to the exception because his actual working hours
can be determined as evidenced by the disbursement vouchers
containing payments of petitioner’s salaries and overtime
services. Strangely, petitioner is of the view that field personnel
may include managerial employees.
- In his original complaint, petitioner stated that the nature of
his work is ”supervisory-engineering.” Similarly, in his own
petition and in other pleadings, petitioner confirmed that his job
was to supervise the laborers in the construction project.
- Although petitioner cannot strictly be classified as a
managerial employee under Art. 82 of the Labor Code,
and Sec. 2(b), Rule 1, Book III of the Omnibus Rules
Implementing the Labor Code, nonetheless he is still not
entitled to payment of the aforestated benefits because
he falls squarely under another exempt category -
“officers or members of a managerial staff” as defined
under Sec. 2(c)6 of the abovementioned implementing rules:
- A case in point is National Sugar Refineries Corporation v.
NLRC. On the issue of “whether supervisory employees, as
defined in Article 212 (m), Book V of the Labor Code, should be
considered as officers or members of the managerial staff under
Article 82, Book III of the same Code and hence not entitled to
overtime, rest day and holiday pay,” this Court ruled: A cursory
perusal of the Job Value Contribution Statements of the union
members will readily show that these supervisory employees
are under the direct supervision of their respective
department superintendents and that generally they
assist the latter in planning, organizing, staffing,
directing, controlling, communicating and in making
decisions in attaining the company’s set goals and
6
Sec. 2. Exemption. - The provisions of this Rule shall not apply to the
following persons if they qualify for exemption under the condition set forth
herein: (c) Officers or members of a managerial staff if they perform the
following duties and responsibilities: (1) The primary duty consists of the
performance of work directly related to management policies of their
employer; (2) Customarily and regularly exercise discretion and independent
judgment; (3) [i] Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or [ii] execute
under general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or [iii] execute under general
supervision special assignments and tasks; and (4) who do not devote more
than 20 percent of their hours worked in a work-week to activities which are
not directly and closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.
Labor Law 1
objectives. These supervisory employees are likewise
responsible for the effective and efficient operation of
their respective departments. From the foregoing, it is
apparent that the members of respondent union discharge
duties and responsibilities which ineluctably qualify
them as officers or members of the managerial staff, as
defined in Section 2, Rule 1, Book III of the Rules to Implement
the Labor Code
- The same applies to petitioner herein considering in
the main his supervisory duties as private-respondent’s
project engineer, duties which, it is significant to note,
petitioner does not dispute.
- Petitioner, likewise, claims that the NLRC failed to give due
weight and consideration to the fact that private respondent
compensated him for his overtime services as indicated in the
various disbursement vouchers he submitted as evidence.
- Petitioner’s contention is unmeritorious. That petitioner was
paid overtime benefits does not automatically and necessarily
denote that petitioner is entitled to such benefits. Art. 82 of the
Labor Code specifically delineates who are entitled to the
overtime premiums and service incentive leave pay provided
under Art. 87, 93, 94 and 95 of the Labor Code and the
exemptions thereto.
- As previously determined, petitioner falls under the
exemptions and therefore has no legal claim to the said
benefits. It is well and good that petitioner was compensated for
his overtime services. However, this does not translate into a
right on the part of petitioner to demand additional payment
when, under the law, petitioner is clearly exempted therefrom.
MERCIDAR FISHING CORP V NLRC (AGAO JR)
297 SCRA 440
MENDOZA; October 8, 1998
NATURE
Petition for certiorari to set aside NLRC decision dismissing
Mercidar’s appeal from Labor Arbiter decision
FACTS
- Fermin AGAO Jr. had been employed as a “bodegero” or ship’s
quartermaster. He claimed to have been constructively
dismissed by petitioner when it refused him assignments
aboard its boats. He then filed a COMPLAINT against MERCIDAR
for ILLEGAL DISMISSAL, violation of P.D. No. 851, and non-
payment of five days service incentive leave for 1990.
- He had been sick and was allowed to go on leave without pay
for one month but when he reported to work with a health
clearance, he was told to come back another time as he could
not be reinstated immediately. For this reason, he asked for a
certificate of employment from petitioner but it refused to issue
the certificate unless he submitted his resignation.
- MERCIDAR claimed that it was Agao who actually abandoned
his work. Agao was absent without leave for three months. Agao
should also be considered field personnel because: Agao’s work
is performed away from Mercidar’s principal place of business,
thus, it has no way of verifying his actual hours of work on the
vessel.
- Labor Arbiter: ordered Mercidar to reinstate complainant with
backwages, pay his 13th month pay and incentive leave pay.
- NLRC: affirmed decision of LA.
ISSUE
WON fishing crew members can be classified as field personnel
under A82 LC
HELD
NO
- Art. 82. Coverage. - The provisions of this Title [Working
Conditions and Rest Periods] shall apply to employees in all
establishments and undertakings whether for profit or not, but
not to government employees, field personnel, members of the
family of the employer who are dependent on him for support,
domestic helpers, persons in the personal service of another,
A2010 - 131 - Disini
and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.
“Field personnel” shall refer to non-agricultural employees who
regularly perform their duties away from the principal place of
business or branch office of the employer and whose actual
hours of work in the field cannot be determined with reasonable
certainty.
- In the case of Union of Filipro Employees (UFE) v. Vicar, SC
explained that the requirement of “whose actual hours of work
in the field cannot be determined with reasonable certainty”
must be read in conjunction with Rule IV, Book III7 of the
Implementing Rules.
- The clause “whose time and performance is unsupervised by
the employer” did not amplify but merely interpreted and
expounded the clause “whose actual hours of work in the field
cannot be determined with reasonable certainty.” There is no
contradiction; the former clause is still within the scope and
purview of Art. 82 which defines field personnel. Hence, in
deciding whether or not an employee’s actual working hours in
the field can be determined with reasonable certainty, query
must be made as to whether or not such employee’s time and
performance is constantly supervised by the employer.
- During the entire course of their fishing voyage, fishermen
employed by petitioner have no choice but to remain on board
its vessel. Although they perform non-agricultural work away
from petitioner’s business offices, the fact remains that
throughout the duration of their work they are under the
effective control and supervision of petitioner through the
vessel’s patron or master as the NLRC correctly held.
Disposition Petition DISMISSED.
AUTO BUS TRANSPORT SYSTEMS INC V BAUTISTA
458 SCRA 578
CHICO-NAZARIO; May 16, 2005
NATURE
Petition for Review on Certiorari
FACTS
- Since 24 May 1995, respondent Antonio Bautista has been
employed by petitioner Auto Bus Transport Systems, Inc.
(Autobus), as driver-conductor with travel routes Manila-
Tuguegarao via Baguio, Baguio- Tuguegarao via Manila and
Manila-Tabuk via Baguio. Respondent was paid on commission
basis, 7% of the total gross income per travel, on a twice a
month basis.
- On January 3, 2000, the bus that the respondent was driving
accidentally bumped the rear portion of Autobus No. 124, as the
latter vehicle suddenly stopped at a sharp curve without giving
any warning. Respondent averred that the accident happened
because he was compelled by the management to go back to
Roxas, Isabela, although he had not slept for almost 24 hours.
Respondent further alleged that he was not allowed to work
until he fully paid the amount of P75,551.50, representing 30%
of the cost of repair of the damaged buses and that despite
respondent’s pleas for reconsideration, the same was ignored
by management. After a month, management sent him a letter
of termination.
- Respondent instituted a Complaint for Illegal Dismissal with
Money Claims for nonpayment of 13th month pay and service
incentive leave pay against Autobus.
Petitioner, on the other hand, maintained that respondent’s
employment was replete with offenses involving reckless
imprudence, gross negligence, and dishonesty. To support its
claim, petitioner presented copies of letters, memos,
irregularity reports, and warrants of arrest pertaining to several
incidents wherein respondent was involved.
7
Rule IV Holidays with Pay
Section 1. Coverage - This rule shall apply to all employees except:
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer xxx (Italics supplied)
Labor Law 1 A2010 - 132 - Disini
- Furthermore, petitioner avers that in the exercise of its at specific times, employees including drivers cannot be said
management prerogative, respondent’s employment was to be field personnel despite the fact that they are
terminated only after the latter was provided with an performing work away from the principal office of the
opportunity to explain his side regarding the accident. employee.
- Labor Arbiter Tabingan dismissed the complaint for illegal - the definition of a “field personnel” is not merely concerned
dismissal but ordered petitioner to pay respondent his 13th with the location where the employee regularly performs his
month pay from the date of his hiring to the date of his duties but also with the fact that the employee’s performance is
dismissal, and his service incentive leave pay for all the years unsupervised by the employer. As discussed above, field
he had been in service with the respondent. Upon appeal, the personnel are those who regularly perform their duties away
NLRC deleted the award for 13th month pay and maintained the from the principal place of business of the employer and whose
award for service incentive leave. The CA affirmed the decision actual hours of work in the field cannot be determined with
of NLRC. reasonable certainty. Thus, in order to conclude whether an
employee is a field employee, it is also necessary to ascertain if
ISSUES actual hours of work in the field can be determined with
WON respondent is entitled to service incentive leave reasonable certainty by the employer. In so doing, an inquiry
must be made as to whether or not the employee’s time and
HELD performance are constantly supervised by the employer.
- A95 LC provides: - It is of judicial notice that along the routes that are plied by
Art. 95. RIGHT TO SERVICE INCENTIVE LEAVE these bus companies, there are its inspectors assigned at
(a) Every employee who has rendered at least one year of strategic places who board the bus and inspect the passengers,
service shall be entitled to a yearly service incentive leave of the punched tickets, and the conductor’s reports. There is also
five days with pay. the mandatory once-a-week car barn or shop day, where the
Book III, Rule V: SERVICE INCENTIVE LEAVE bus is regularly checked as to its mechanical, electrical, and
SECTION 1. Coverage. – This rule shall apply to all hydraulic aspects, whether or not there are problems thereon
employees except: as reported by the driver and/or conductor. They too, must be
… at specific place and specified time, as they generally observe
(d) Field personnel and other employees whose performance prompt departure and arrival from their point of origin to their
is unsupervised by the employer including those who are point of destination. In each and every depot, there is always
engaged on task or contract basis, purely commission basis, the Dispatcher whose function is precisely to see to it that the
or those who are paid in a fixed amount for performing work bus and its crew leave the premises at specific times and arrive
irrespective of the time consumed in the performance at the estimated proper time. These, are present in the case at
thereof; . . . bar. The driver, the complainant herein, was therefore under
- The grant of service incentive leave has been delimited by the constant supervision while in the performance of this work. He
Implementing Rules and Regulations of the Labor Code to apply cannot be considered a field personnel.
only to those employees not explicitly excluded by Section 1 of - Respondent is not a field personnel but a regular employee
Rule V. According to the Implementing Rules, Service Incentive who performs tasks usually necessary and desirable to the
Leave shall not apply to employees classified as “field usual trade of petitioner’s business. Accordingly, respondent is
personnel.” The phrase “other employees whose performance entitled to the grant of service incentive leave.
is unsupervised by the employer” must not be understood as a
separate classification of employees to which service incentive
leave shall not be granted. Rather, it serves as an amplification RATIONALE – EXEMPTION
of the interpretation of the definition of field personnel under
the Labor Code as those “whose actual hours of work in the
field cannot be determined with reasonable certainty.” RED V COCONUT PRODUCTS LTD V CIR (TANGLAW
- The same is true with respect to the phrase “those who are NG PAGGAWA LABOR UNION)
engaged on task or contract basis, purely commission basis.” 17 SCRA 553
Said phrase should be related with “field personnel,” applying
BENGZON; June 30, 1966
the rule on ejusdem generis that general and unlimited terms
are restrained and limited by the particular terms that they
follow. Hence, employees engaged on task or contract basis or NATURE
paid on purely commission basis are not automatically Petition for review of CIR decision and MFR
exempted from the grant of service incentive leave, unless,
they fall under the classification of field personnel. FACTS
- Therefore, petitioner’s contention that respondent is not - Red V Coconut Products, Ltd has a desiccated coconut factory
entitled to the grant of service incentive leave just because he wherein 800 of its workers were members of members of
was paid on purely commission basis is misplaced. What must Tanglaw ng Paggawa labor union. The workers were classified
be ascertained in order to resolve the issue of propriety of the into 2 groups: the 3-shift group and the 2-shift group.
grant of service incentive leave to respondent is whether or not - In 1958 and 1961, the company and labor union entered into a
he is a field personnel. CBA wherein they agreed on payment for differentials to night
- According to A82 LC, “field personnel” shall refer to non- shift workers, as follows: 35c for 2nd shift, 55c for 3rd shift.
agricultural employees who regularly perform their duties away
from the principal place of business or branch office of the Gro Hrs of differen Paym
employer and whose actual hours of work in the field cannot be up work tials ent
determined with reasonable certainty. This definition is further 1st shift 4am-
elaborated in the Bureau of Working Conditions (BWC), Advisory 3- (8hrs) 12nn
None
Opinion to Philippine Technical-Clerical Commercial Employees shift 2nd shift 12nn-
35c
Association[10] which states that: grou (8hrs) 8pm
55c
As a general rule, field personnel are those whose p 3rd shift 8pm-
performance of their job/service is not supervised by the (8hrs) 4am
employer or his representative, the workplace being away 2- 1st shift 4am-
from the principal office and whose hours and days of work shift (12hrs) 4pm None
cannot be determined with reasonable certainty; hence, they grou 2nd shift 4pm- 55c
are paid specific amount for rendering specific service or p (12hrs) 4am
performing specific work. If required to be at specific places
Labor Law 1
- In 1962, Tanglaw ng Paggawa and member-workers who
belong to the 2-shift group filed a petition with CIR arguing that
they should receive what the 2nd and 3rd shifts of the 3-shif
group, combined, receive as differential pay (90c = 55c + 35c)
since their nightwork is equivalent to the nightwork of the 2 nd
and 3rd shift of 3-shift group combined. They were therefore
asking for an additional 35c for work done by them from 4pm to
4am. On the other hand, Red V claims that CIR has no
jurisdiction over the case since the claim asserted by Tanglaw is
a simple money claim and that an interpretation of a
contract (CBA) is involved (should have gone to CFI).
- CIR: had jurisdiction since it involved unpaid overtime pay of
laborers still employed by the company.
- Tanglaw filed another petition alleging unfair labor practice
for refusing to grant 15 days leave with pay to members of the
union in violation of CBA.
- CIR: workers were engaged in pakiao (piece-work basis) and
should not be entitled to overtime pay under the Eight-Hour
labor law (Sec. 2, CA444); that their petition for nigh shift
differentials based on CBA is meritorious because the
company having paid night differentials indiscriminately to the
night shift workers of 3-shift group and 2-shift group alike, the
payments should be uniform and equal for the night shifts of
both groups(90c). –pay deficiency to workers of 2-shift group.
ISSUES
1. WON the CIR has jurisdiction over the case
2. WON the Eight-Hour Labor Law regarding payment of
overtime compensation to piece-workers is applicable in the
case
HELD
1. YES
Ratio To determine the issue of the jurisdiction, resort is to be
made to the allegations in the petition or complaint.
Reasoning
- Red V claims that the case involves mere money claim. The
petition did not expressly mention the Eight-Hour Labor Law.
Still, (1) respondents are working for the company and (2) these
workers work in 2 shifts, approximately 12 hours each shift.
Therefore, the petition is one for overtime pay by workers
still employed by the company which falls within the
jurisdiction of the CIR.
Obiter
- petitioner presented evidence which does not appear from the
petition or complaint filed with CIR (proving that workers were
engaged on a piece-work basis) so it cannot affect CIR’s
jurisdiction over the case which was already acquired.
Jurisdiction, once acquired, continues until final adjudication of
the litigation.
2. YES
Ratio Although the Eight-Hour Labor Law provides that it does
not cover those workers who prefer to be paid on piece-work
basis (Sec. 2, CA 444), nothing in said law precludes an
agreement for the payment of overtime precludes an
agreement for the payment of overtime compensation to piece-
workers. And in agreeing to the provision for payment of shift
differential to the petitioners-workers aforementioned, in the
bargaining agreement, as well as in actually paying to them
said differentials, though not in full, the company in effect freely
adhered to an application and implementation of the Eight-Hour
Labor Law, or its objectives, to said workers.
Reasoning
- It should be observed that while the provision in the
bargaining agreements speaks of shift differentials for the
"second shift" and the "third shift" and 2-shift group has no
third shift, said 2-shift group has a second shift, which performs
work equivalent to that of the corresponding shifts of 3-shift
A2010 - 133 - Disini
group. It follows that respondent court did not err in ordering
the company to pay the full and equivalent amount of said
differentials (P .90) corresponding, under the bargaining
agreements, to the workers who performed 12 hours of work,
from 4 P.M. to 4 A.M.
- The laborers are not strictly under the full concept of piece-
workers because their hours of work are fixed by the
employer. Piece workers were excluded from the Eight-Hour
Labor Law because said workers are paid depending upon
the work they do "irrespective of the amount of time
employed" in doing said work. Such freedom as to hours of
work does not apply to the respondent workers since they are
assigned by the employer to work in two shifts for 12 hours
each shift. Thus it cannot be said that for all purposes these
workers fall outside the law requiring payment of compensation
for work done in excess of eight hours. At least for the
purpose of recovering the full differential pay stipulated
in the bargaining agreement as due to laborers who
perform 12 hours of work under the night shift, said
laborers should be deemed pro tanto or to that extent
within the scope of the afore-stated law.
Disposition decision and resolution of the Court of Industrial
Relations under review are affirmed.
5.03 NORMAL HOURS OF WORK
5.04 HOURS WORKED
IDLE TIME
NATIONAL DEVELOPMENT CO V CIR
6 SCRA 763
REGALA; November 30, 1962
FACTS
- At the National Development Co. (NDC), there were four Eight-
hour shifts of work, each one having a 1-hour mealtime period.
Petitioner nevertheless credited the workers with and paid them
for the full 8-hour shift. However, since 1953, whenever workers
continued working through the next shift, petitioner only paid
them for 6 hours, claiming the 2 hours for meals should not be
compensated. The National Textile Workers Union (NTWU)
disagreed and asked for an order for overtime pay with the CIR
which was granted.
- Petitioner appealed, contending that (1) the CIR had no
jurisdiction over claims of overtime compensation and that (2)
the CIR did not make a correct appraisal of the facts in holding
that mealtime periods should be included in overtime work.
ISSUES
1. WON the CIR had jurisdiction over claim of overtime
compensation
2. WON the mealtime periods should be considered working
time
HELD
1. YES
- It was recently held in Campos v. Manila Railroad Co. that the
ff are the requisites for jurisdiction: (1) there must exist an
employer-employee relationship between the parties or the
claimant must seek reinstatement; (2) the controversy must
relate to a case certified by the President to the CIR as one
involving national interest, or must have a bearing on an unfair
labor practice charge, or must arise either under the Eight-Hour
Labor Law, or under the Minimum Wage Law. Absent either
requisite renders the claim a mere money claim coming under
the jurisdiction of regular courts. Because there was clearly an
employer-employee relationship existing between the NDC and
Labor Law 1
the union members and the claim was based on the Eight-Hour
Labor Law, CIR had jurisdiction of over the case.
2. YES
- As stated in Sec 1 of Com. Act No. 444, “The legal working day
for any person employed by another shall be of not more than 8
hours daily. When the work is not continuous, the time during
which the laborer is not working and can leave his working
place and can rest completely shall not be counted.” It is clear
from the provision that idle time spent resting and during which
an employee may leave the workplace is not counted as
working time only where the work is broken or not continuous.
In this case, the CIR's finding that work in the NDC was
continuous and did not permit employees and laborers to rest
completely is not without basis in evidence and following the
Court’s earlier rulings, these findings are not to be disturbed.
- In addition, because petitioner failed to serve a copy of its
motion for reconsideration to NTWU as required by Sec. 15 of
the rules of the CIR, there is no decision of the CIR en banc that
petitioner can bring to the Court for review.
Disposition CIR order and resolution are AFFIRMED and the
appeal DISMISSED
LUZON STEVEDORING CO V LUZON MARINE
DEPARTMENT UNION
101 Phil 257
FELIX; April 29 1957
NATURE
Petition for certiorari filed by Luzon Stevedoring Co (LSC) to
review a resolution by CIR.
FACTS
- Luzon Marine Development Union (LMDU) filed a petition with
the CIR containing several demands against LSC, among which
were the petition for full recognition of the right of collective
bargaining, close shop and check off.
-While the case was still pending, the union conducted a strike
which was ruled down as illegal. Due to the ruling, the union
filed a “constancia” with the CIR praying that the remaining
unresolved demands of the union be presented in their original
petition, be granted. Other demands included the OT pay,
payment of the employees who have not received their pay
corresponding to the second half of Dec 941, reinstatement of
certain individuals suspended without justifiable cause.
-The unresolved demands are the ff: performed work in excess
of 8 hrs be paid an OT pay of 50% of the regular rate and that
work performed on Sundays and holidays be paid 2x the regular
rate (point no. 2); that all the officers, etc who haven’t received
their pay corresponding to the 2nd half of Dec be paid
accordingly (point no. 7); that Ciriaco, etc who have been
suspended without justifiable cause for union activities be
reinstated (point no 11); that all officers, etc who have been
discharged because of union activities be reinstated (point no.
12).
- Due to these demands the case was set for hearing. The
original intervenor, moved for the withdrawal of said Union from
the case, which motion was granted by the Court.
- TC found that the company gave employees 3 free meals
every day and about 20 minutes rest after each mealtime; that
they worked from 6am-6pm every day including Sundays and
holidays, and for work performed in excess of 8 hours, the
officers, patrons and radio operators were given overtime pay in
the amount of P4 each and P2 each for the rest of the crew up
to March, 1947, and after said date, these payments were
A2010 - 134 - Disini
increased to P5 and P2.50, respectively, until the time of their
separation or the strike; that when the tugboats underwent
repairs, their personnel worked only 8 hours a day excluding
Sundays and holidays; that although there was an effort on the
part of claimants to show that some had worked beyond 6pm,
the evidence was uncertain and indefinite and that demand was
denied; that Company, by the nature of its business and as
defined by law is considered a public service operator by the
Public Service Commission and, therefore, exempt from paying
additional remuneration or compensation for work performed
on Sundays and legal holidays. (Sec4 CA No.444)
- For the reasons above, employees are only entitled to receive
overtime pay for work rendered in excess of 8hrs on ordinary
days including Sundays and legal holidays. The company was
able to prove that it has paid its employees for such overtime
wok as shown above. It was only a matter of computation
whether the OT services paid cover actual OT work performed
equivalent to 25% (min rate fixed by law in the absence of other
proof to justify the granting of more beyond said min rate.
- Demands nos. 11 & 12 were denied and LSC was only ordered
to pay separation pay and OT after finding that the suspensions
and dismissals were for valid legal grounds.
- LMDU filed MFR to declare that those who work from 6am-6pm
were entitled to 4hrs OT pay, that the time allotted for their
meals should not be deducted from the said 4hrs, that the
amounts set aside for the meals of should be considered as part
of their actual compensation, that the employees separated
without just cause be paid their unearned wages from the time
of decision became final, and for other relief.
- LSC filed MFR in so far as it interpreted that the period during
which a seaman aboard a tugboat should be considered as
“working time” for the purposes of the Eight-Hour-Labor Law
- The Court made a resolution, in pursuance of CA 103 as
amended, modifying the previous judgment saying that the
4hrs of OT work included in the regular daily sked of ^am-6pm
should be paid independently of the so-called “coffee-money”
after finding that said extra amount were given to some
tugboat crew members for work performed beyond 6pm. LSC’s
MFR was denied.
- LSC filed the present petition of certiorari when CIR ruled that
the 20mins rest given the claimants after mealtime should not
be deducted from the 4hrs of OT work performed.
- LMLU filed a MTD which SC considered as an answer, alleging
that the CIR decision (under consideration in the case) does not
present any question of law, the issues being purely factual. CIR
judges also asserted that there is no question of law.
ISSUES
1. WON “hours of work” as applied to dryland laborers are
equally applicable to seamen
2. WON a person should be penalized for following an opinion
of the Sec of Justice absent any pronouncement
3. WON compensation for 2 years agreed upon legally and
deemed retroactively is presumed to constitute full payment of
all services rendered (including OT pay) provided employees
with full knowledge of the law, voluntarily agreed to work in
consideration of such wage and continued working without
protest
4. WON members of Union having expressly manifested
acquiescence over a period of almost two years with reference
to the sufficiency of their wages and having made no protest
whatsoever with reference to said compensation are estopped
from claiming OT compensation
5. Granting, without conceding, that any OT is due, what is the
extent and rule of retroactivity as set forth and established by
the precedents and policies of the CIR as affirmed by the SC?
6. WON the grant of sizeable amount of back OT wages by the
CIR is in consonance with the dictates of public policy on
recovery and financial stability
7. WON a CIR resolution, unsupported in fact and in law, can be
declared illegal
HELD
1. YES
Labor Law 1 A2010 - 135 - Disini
Ratio There is no need to set a different criterion to be The law also provides that after a judge of the CIR, duly
applied to the seamen. A laborer doesn’t need to leave the designated by the Presiding Judge therein to hear a particular
premises in order that his period of rest shall not be counted, case, had rendered a decision, any aggrieved party may
such that it is enough that he “ceases to work”, may rest request for reconsideration thereof and the judges of said Court
completely and leave his spot where he actually has stays while shall sit together, the concurrence of the 3 of them being
working.8 necessary for the pronouncement of a decision, order or award.
Reasoning In virtue of these rules and upon MFR presented by both
- LSC claims that the 12hr work is not continuous but parties, the resolution subject of the present petition was
interrupted or broken. It was found true however they could not issued, the Court en banc finding it necessary to modify a part
just leave due to the nature of their duty preventing them to of the decision, which is clearly within its power to do.
leave the tugboats Disposition on the strength of the foregoing consideration, the
2. The court cannot pass upon the issue because there was resolutions of CIR appealed from are hereby
nothing on the record saying that would support the petitioner’s affirmed
assertion that in dealing with its employees, it was guided by
such opinion.
3 & 4. Ratio NO. The right of the laborers to OT cannot be CONTINUOUS WORK
waived. CA444, Sec 69 applies
Reasoning
- Estoppel and laches cannot be invoked against employees or STATES MARINE CORP V CEBU SEAMEN'S ASSOC
laborers in an action for the recovery of compensation for past 7 SCRA 294
OT work. It would be contrary to the spirit of the Eight-Hour PAREDES; February 28, 1963
Labor Law such that the laborers cannot waive their right to
extra compensation. Secondly, the law principally obligates the
NATURE
employer to observe it that it punishes the employer for its
Writ for certiorari
violation and leaves the employee free and blameless. Thirdly,
the employee or laborer is in such a disadvantageous position
FACTS
as to be naturally reluctant or even apprehensive in asserting a
- States Marine Corporation and Royal Line, Inc. (SMC) were
claim which may cause the employer to devise a way for
engaged in the business of marine coastwise transportation,
exercising his right to terminate the employment.
employing steamships of Philippine registry. They had a
- Moreover, if the principle of estoppel and laches is to be
collective bargaining contract with Cebu Seamen's Association,
applied, it would bring about a situation whereby the employee
Inc. (CSA)
or laborer who can not expressly renounce the right to extra
- On September 12, 1952, the SMC filed with the CIR, a petition
compensation, may be compelled to accomplish the same
against SMC. The Union alleged that the officers and men
thing by mere silence or lapse of time, frustrating the purpose
working on board the petitioners' vessels have not been paid
of the law by indirection. (Manila Terminal Co. v CIR)
their sick leave, vacation leave and overtime pay; that CSA
- In the case at hand, the complaining laborers have even
threatened or coerced them to accept a reduction of salaries,
declared before the filing of the case that they informed the
observed by other shipowners; that after the Minimum Wage
overseer of the LSC that they have been working OT claiming
Law had taken effect, the petitioners required their employees
for their compensation. The records do not show that some
on board their vessels, to pay the sum of P.40 for every meal,
members of LMLU had received salaries les than the min wage.
while the masters and officers were not required to pay their
5. Ratio The employee in rendering extra services at the
meals.
request of his employer has the right to assume that the latter
- CSA answered by saying that they have suffered financial
has complied with the requirements of the law.
losses in the operation of their vessels and that there is no law
Reasoning
which provides for the payment of sick leave or vacation leave
- Fear of possible unemployment inhibits the employee from
to employees or workers of private firms; that as regards the
asserting his right under the law. To allow the workingman to
claim for overtime pay, the petitioners have always observed
be compensated only from the date of filing would be to
the provisions of Comm. Act No. 444, (Eight-Hour Labor Law),
penalize him for his silence. Although LSC claims that the
notwithstanding the fact that it does not apply to those who
computation of the OT in arrears should be based from the filing
provide means of transportation.
of the petition this case is not in point.
- A decision was rendered in favor of the union. In its decision, it
6. Ratio Separation of powers
also held that Pepito Severino, one of its boatsmen, rendered
Reasoning
overtime work and was not paid. The motion for
- The courts cannot go outside the field of interpretation so as
reconsideration, having been denied, the companies filed the
to inquire into the motives of Congress in enacting a piece of
present writ of certiorari, to resolve legal question involved.
legislation.
7. YES
ISSUES
- However, the issue under consideration is predicated on a
WON the CIR erred in holding that Severino Pepito, a boatsman,
situation not obtaining in the case at bar. It supposes that the
had rendered overtime work notwithstanding the provisions of
CIR resolution is unsupported, which does not seem to be the
section 1, of C.A. No. 444
case.
- The CIR is a court with well-defined powers vested by the law
HELD
creating it and with such other powers that pertain to a court of
NO
justice. The general rule that before judgment becomes final,
- The provisions of sec. 1, of Comm. Act No. 444, states that
the Court that rendered the same may alter or modify it so as to
"When the work is not continuous, the time during which the
conform with the law and the evidence, is applicable to the CIR.
laborer is not working and can leave his working place and can
rest completely shall not be counted." Severino Pepito
8
CA 444 (Eight-Hour-Labor Law) Sec 1 is applied to contemporary regulations issued categorically stated that he worked during the late hours of the
by administrative authorities. evening and during the early hours of the day when the boat
SEC. 1. The legal working day for any person employed by another shall be of not docks and unloads. Aside from the above, he did other jobs
more than eight hours daily. When the work is not continuous, the time during which
the laborer is not working AND CAN LEAVE HIS WORKING PLACE and can rest such as removing rusts and cleaning the vessel, which overtime
completely, shall not be counted. work totalled to 6 hours a day, and of which he has not been
9 paid as yet. Sec. 1, of Comm. Act No. 444 find no application in
SEC. 6. Any agreement or contract between the employer and the laborer or
employee contrary to the provisions of this Act shall be null and void ab initio. his case.
Labor Law 1
Disposition petition is dismissed, with costs against the
petitioners.
WAITING TIME
ARICA V NLRC
170 SCRA 776
PARAS; February 28, 1989
FACTS
- This case stemmed from a complaint filed on April 9, 1984
against private respondent Stanfilco for assembly time, moral
damages and attorney's fees.
- After the submission by the parties of their respective position
papers, Labor Arbiter Pedro C. Ramos rendered a decision dated
October 9, 1985 in favor of private respondent STANFILCO,
holding that: the thirty-minute assembly time long practiced
cannot be considered waiting time or work time and, therefore,
not compensable, has become the law of the case which can no
longer be disturbed without doing violence to the time- honored
principle of res-judicata.
- NLRC upheld the Labor Arbiters' decision stating that the
customary functions referred to in the provision of the
agreement includes the long-standing practice and
institutionalized non-compensable assembly time. This, in
effect, estopped complainants from pursuing this case.
- NLRC denied motion for reconsideration.
- Hence this petition for review on certiorari filed on May 7,
1987.
- Petitioners: the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable
as working time (from 5:30 to 6:00 o'clock in the morning) since
these preliminary activities are necessarily and primarily for
private respondent's benefit: roll call, getting individual work
assignments from the foreman; accomplishing the Laborer's
Daily Accomplishment Report; getting work materials; travel to
the field bringing with them their tools, equipment and
materials.
- Respondent: the instant complaint is not new, the very same
claim having been brought against herein respondent by the
same group of rank and file employees in the case of
Associated Labor Union and Standard Fruit Corporation when
ALU was the bargaining agent of respondent's rank and file
workers.
ISSUE
WON NLRC committed a grave abuse of discretion in its
resolution of Dec 17, 1986
HELD
- The decision of the Minister of Labor, on May 12, 1978 in the
aforecited case (Associated Labor Union vs. Standard (Phil.)
Fruit Corporation made significant findings of facts and
conclusions on the matter. The Minister of Labor held: The thirty
(30)-minute assembly time long practiced and institutionalized
by mutual consent of the parties under Article IV, Section 3, of
the Collective Bargaining Agreement cannot be considered as
waiting time within the purview of Section 5, Rule I, Book III of
the Rules and Regulations Implementing the Labor Code. ...
- It is clear that herein petitioners are merely reiterating the
very same claim which they filed through the ALU and which
records show had already long been considered terminated and
closed by this Court in G.R. No. L-48510. Therefore, the NLRC
can not be faulted for ruling that petitioners' claim is already
barred by res-judicata.
- Be that as it may, petitioners' claim that there was a change in
the factual scenario which are "substantial changes in the facts"
makes respondent firm now liable for the same claim they
earlier filed against respondent which was dismissed. It is thus
axiomatic that the non-compensability of the claim having been
earlier established, constitute the controlling legal rule or
A2010 - 136 - Disini
decision between the parties and remains to be the law of the
case making this petition without merit.
- As a rule, the findings of facts of quasi-judicial agencies which
have acquired expertise because their jurisdiction is confined to
specific matters are accorded not only respect but at times
even finality if such findings are supported by substantial
evidence. The records show that the Labor Arbiters' decision
dated October 9, 1985 pointed out in detail the basis of his
findings and conclusions, and no cogent reason can be found to
disturb these findings nor of those of the National Labor
Relations Commission which affirmed the same.
SEPARATE OPINION
SARMIENTO [dissent]
- It is my opinion that res judicata is not a bar.
- The decision penned by then Minister Blas Ople in ALU v.
STANFILCO (NLRC Case No. 26-LS-XI-76) relied upon by the
respondents as basis for claims of res judicata, is not, to my
mind, a controlling precedent. In that case, it was held that the
thirty-minute "waiting time" complained of was a mere
"assembly time" and not a waiting time as the term is known in
law, and hence, a compensable hour of work.
- Precisely, it is the petitioners' contention that the assembly
time in question had since undergone dramatic changes.
- The petitioners have vehemently maintained that in view
thereof, the instant case should be distinguished from the first
case. And I do not believe that the respondents have
successfully rebutted these allegations. The Solicitor General
relies solely on the decision of then Minister Ople, the decision
the petitioners precisely reject in view of the changes in the
conditions of the parties. The private respondent on the other
hand insists that these practices were the same practices taken
into account in ALU v. STANFILCO. If this were so, the Ople
decision was silent thereon.
TRAVEL TIME
RADA V NLRC (PHILNOR)
205 SCRA 69
REGALADO; 1992
NATURE
Special civil Action for certiorari to review NLRC decision
FACTS
- Hilario Rada was hired by private respondent Philnor as driver
under a “Contract of Employment for a Definite Period” in
connection with Philnor’s contract with the Manila North Express
Extension. The original contract was for a period of about 24
months effective July 1, 1977. Due to delays in the project, the
petitioner was rehired under a second contract for a period of
ten months. Prior to the end of the second contract and as the
project remained uncompleted, petitioner was again offered
another contract for another period of 19 months. This third
contract was extended for several times again due to delays in
the project. The last extension was for a period of three months
from October 1 1985 to December 31m 1985. As the project
was in fact completed at the end of the end of the final
extension , petitioner sought “personnel Clearance from the
company. At that time, he also received the cash equivalent of
his unsed leaves and financial assistance. Also at that time, the
petitioner signed a Release, Waiver and Quitclaim.
- Rada, on May 20, 1987, filed before the NLRC a complaint
against private respondent for nonpayment of separation pay
Labor Law 1
and overtime. This complaint was subsequently amended to
include allegation of illegal termination.
- The labor arbiter found for the petitioner but this was reversed
by the NLRC. Hence the appeal to the SC
ISSUE
1. WON the petitioner was a permanent employee of the
private respondent
2. WON the petitioner is entitled to overtime pay for three
hours per work day
HELD
1. NO
- The Court ruled that the petitioner was a project employee
and thus his period of employment was fixed for a specific
project or undertaking. Once the specific project or undertaking
has been completed, the services of the employee not being
required, the employment is terminated, subject only to the
obligation of the employer to render a report on the termination
of the employment..
2. YES
- It was the job of Rada to pick up and drop off employees of the
project at certain specified points along EDSA. Hence the time
he spent in doing this work should be included in determining
the number of hours he had worked. Rada is hence entitled to
the overtime pay claimed.(Note: Ordinarily, the travel time
of employees from house to place of work and vice versa
is not included as part of time worked. Time of work
starts when the employee reports at the place of
workand ends when he leaves the same place.)
Disposition Subject to the modification wih regard the
overtime pay, the decision of the NLRC is affirmed.
ENTRY TIME CARDS
PRANGAN V NLRC (MASAGANA SECURITY
SERVICES CORP, PADILLA)
289 SCRA 142
ROMERO; April 15, 1998
FACTS
- November 4, 1980 - MASAGANA SECURITY SERVICES CORP
hired PRANGAN as one of its security guards assigned to the Cat
House Bar and Restaurant with a monthly salary of P2,000.00
until its closure on August 31, 1993.
- May 4, 1994 - PRANGAN filed a complaint against MASAGANA
for underpayment of wages, non-payment of salary from August
16-31, 1993, overtime pay, premium pay for holiday, rest day,
night shift differential, uniform allowance, service incentive
leave pay and 13th month pay from the year 1990 to 1993.
- MASAGANA rejected PRANGAN’S claim alleging it merely acted
as an agent of the latter in securing his employment at the Cat
House Bar and Restaurant. Thus, the liability for the claims of
the petitioner should be charged to Cat House Bar and its
owner, being his direct employer.
- Labor Arbiter > brushed aside MASAGANA’S contention that it
was merely an agent of the petitioner and ordered to pay within
10 days P9,932.16 premium pay for holiday and rest days, night
shift differential, service incentive leave pay, 13th month pay,
uniform allowance, and unpaid salary and dismissed other
claims either for the reason of prescription and/or lack of merit
- PRANGAN was not satisfied with the LA’s decision and he
appealed to NLRC contending that LA erred in concluding that
he only worked for four hours and not twelve hours a day. But,
NLRC dismissed his appeal for failure to file the same within
ten-day reglementary period.
- PRANGAN filed a MFR which, in the “interest of justice,” was
favorably granted by the NLRC resulting in the reinstatement of
his appeal. But it was short-lived as the appeal was eventually
dismissed for lack of merit
A2010 - 137 - Disini
- PRANGAN is now before us imputing GRAVE ABUSE OF
DISCRETION on the part of NLRC (a) declaring that he rendered
only four hours and not twelve hours of work, and (b) affirming
the monetary award.
- As proof of petitioner’s actual hours of work, MASAGANA
submitted the DAILY TIME RECORDS allegedly signed by the
PRANGAN himself showing that he only worked four hours daily.
- PRANGAN argues that these daily time records were falsified
for the simple reason that he was not required to submit one.
He further stressed that, assuming such documents exist, its
authenticity and due execution are questionable and of doubtful
source.
ISSUE
WON NLRC erred in finding Prangan’s work hours to be four
hours instead of twelve
HELD
Ratio Matters concerning an employee’s actual hours of work
are within the ambit of management prerogative. However,
when an employer alleges that his employee works less than
the normal hours of employment as provided for in the law, he
bears the burden of proving his allegation with clear and
satisfactory evidence.
Reasoning
- Findings of fact of quasi-judicial bodies like the NLRC,
particularly when they coincide with those of the Labor Arbiter,
are accorded with respect even finality if supported by
substantial evidence. Substantial evidence is defined as such
amount of relevant evidence which a reasonable mind might
accept as adequate to justify a conclusion. Absent such
quantum of evidence, the Court is not precluded from making
its own independent evaluation of facts.
- NLRC, in declaring that PRANGANonly worked for four hours,
relied solely on the supposed daily time records of the
petitioner submitted by MASAGANA. We, however, are of the
opinion that these documents cannot be considered substantial
evidence as to conclude that petitioner only worked for four
hours.
- As PRANGAN’S employer, MASAGANA has unlimited access to
all relevant documents and records on the hours of work of the
petitioner. Yet, even as it insists that petitioner only worked for
four hours and not twelve, no employment contract, payroll,
notice of assignment or posting, cash voucher or any other
convincing evidence which may attest to the actual hours of
work of the petitioner were even presented. Instead, what the
private respondent offered as evidence were only petitioner’s
daily time record, which the latter categorically denied ever
accomplishing, much less signing.
- daily time record showed that PRANGAN started work at 10PM
and would leave his post at exactly 2AM. Obviously, such
unvarying recording of a daily time record is improbable and
contrary to human experience. It is impossible for an employee
to arrive at the workplace and leave at exactly the same time,
day in day out. The very uniformity and regularity of the entries
are “badges of untruthfulness and as such indices of dubiety.
- Personnel data sheet of the PRANGAN, duly signed by the
former’s operation manager, it shows on its face that the
latter’s hours of work are from 7PM to 7AM or twelve hours a
day. Hence, MASAGANA is estopped from assailing the
contents of its own documents.
- attendance sheets of Cat House Bar and Restaurant showed
that PRANGAN worked from 7:00 p.m. to 7:00 a.m. daily,
documents which were never repudiated by MASAGANA.
- As is well-settled, if doubts exist between the evidence
presented by the employer and the employee, the scales of
justice must be tilted in favor of the employee. Since it is a
time-honored rule that in controversies between a laborer and
his master, doubts reasonably arising from the evidence, or in
the interpretation of agreements and writings should be
resolved in the former’s favor.
Disposition instant petition is hereby GRANTED. NLRC
decision on July 31, 1996 is hereby VACATED. Whatever money
claims due to the petitioner shall be computed on the basis of a
Labor Law 1
twelve-hour daily work schedule. For this purpose, the case is
hereby REMANDED to the Labor Arbiter for immediate
recomputation of said claims in accordance with the foregoing
findings.
NICARIO V NLRC (MANCAO)
193 SCRA 603
ROMERO; September 17, 1998
NATURE
special civil action for certiorari to review decision of NLRC
FACTS
- Nicario was an employee of Mancao Supermarket (which was
managed by Antonio Mancao). She was terminated, and she
filed a complaint for illegal dismissal, with prayer for
backwages, overtime pay, and unpaid wages.
- She alleges that she reported to work everyday from 7:30am
till 7:30pm (12 hrs a day), thus rendering overtime work for
4hrs each day.
- The labor arbiter awarded her OT pay, by taking judicial notice
of the fact that all Mancao establishments operate from 8am til
8pm. On appeal by the supermarket to the NLRC, the
commission deleted the award for OT pay, giving credence to
the daily time records (DTRs) presented by the company, which
showed that Nicario worked for 8 hrs a day only, from 9am-
12nn and 2pm-7pm, each day. Also, the NLRC absolved the
liability of the manager. Nicario appealed to the SC.
ISSUES
1. WON Nicario must be given overtime pay
2. WON the manager must be held solidarily liable with the
corporation
HELD
1. YES
Ratio The Daily Time Record with uniform entries day in and
day out, cannot be given much credence.
Reasoning
- While the supermarket submitted the daily time records of
Nicario to show that she rendered work for only 8hrs a day, it
did not refute nor seek to disprove the judicial notice taken by
the Labor Arbiter that Mancao establishments, including the
establishment where NIcario worked, opens 12 hrs a day,
opening at 8:00 a.m. and closing at 8:00 p.m.
In evaluating the evidentiary value of daily time records,
especially those which show uniform entries with regard to the
hours of work rendered by an employee, the court has ruled
that “such unvarying recording of a daily time record is
improbable and contrary to human experience. It is impossible
for an employee to arrive at the workplace and leave at exactly
the same time, day in day out. The uniformity and regularity of
the entries are 'badges of untruthfulness and as such indices of
dubiety.” On the other hand, the supermarket failed to present
substantial evidence, other than the disputed DTRs, to prove
that Nicario indeed worked for only 8 hrs a day.
2. NO
Ratio There appearing to be no evidence that Antonio Mancao
acted maliciously or deliberately in the non-payment of benefits
to Nicarion, he cannot he held jointly and severally liable with
Mancao supermarket.
Reasoning
- The general rule is that officers of a corporation are not
personally liable for their official acts unless it is shown that
they have exceeded their authority. However, the legal fiction
that a corporation has a personality separate and distinct from
stockholders and members may be disregarded if it is used as a
means to perpetuate fraud or an illegal act or as a vehicle for
the evasion of an existing obligation, the circumvention of
statutes, or to confuse legitimate issues.
- In this case, there is no showing that Antonio Mancao, as
manager of respondent company, deliberately and maliciously
A2010 - 138 - Disini
evaded the respondent's company financial obligation to the
petitioner.
Disposition Petition PARTLY GRANTED. Nicario awarded
overtime pay, but manager held not to be solidarily liable with
corporation
AKLAN ELECTRIC COOP INC V NLRC
5.05 MEAL PERIOD
MEAL TIME - FREE TIME
PAN AMERICAN WORLD AIRWAYS SYSTEM (PHILS)
V PAN AMERICAN EMPLOYEES ASSOCIATION
1 SCRA 527
REYES; February 23, 1961
NATURE
Appeal by certiorari from the decision of the Court of Industrial
Relations
FACTS
- After failing to reach a compromise with their company, PAN
AM workers filed a case against PAN AM PHILIPPINES to seek
redress for their grievances at the workplace. They demanded
payment of overtime compensation, inclusion in the
computation of overtime pay the one-hour meal period during
overtime, adoption of straight eight hour shift inclusive of the
meal period.
- It appears that most of their grievances were addressed by the
Court of Industrial Relations prompting the management to
make this appeal.
ISSUES
1. WON CIR had jurisdiction over claims of overtime pay
2. WON the one-hour meal period should be considered as
overtime work
HELD
1. YES
Ratio The Industrial Court may properly take cognizance of
overtime claims, if at the time of the petition, the complainants
were still in the service of the employer, or, having been
separated from such service, should ask for reinstatement;
otherwise, such claims should be brought before the regular
courts.
Reasoning
- overtime compensation were still in the service of the
company when the case was filed, the jurisdiction of the Court
of Industrial Relations cannot be assailed. In fact, since it is not
pretended that, thereafter, the complainants were discharged
or otherwise terminated their relationship with the company for
any reason, all of said complainants could still be with the
company up to the present.
2. NO
Ratio The one-hour meal period shall be considered as part of
overtime work if the evidence shows that during that period,
the company may call resting employees to render some
services.
Labor Law 1
Reasoning
- Petitioner herein claims that the one-hour meal period should
not be considered as overtime work (after deducting 15
minutes), because the evidence showed that complainants
could rest completely and were not in any manner under the
control of the company during that period. The court below
found, on the contrary, that during the so-called meal period,
the mechanics were required to stand by for emergency work;
that if they happened not to be available when called, they
were reprimanded by the leadman; that as in fact it happened
on many occasions, the mechanics had been called from their
meals or told to hurry up eating to perform work during this
period. Far from being unsupported by substantial evidence, the
record clearly confirms the above factual findings of the
Industrial Court.
- The Industrial Court's order for permanent adoption of a
straight 8-hour shift including the meal period was but a
consequence of its finding that the meal hour was not one of
complete rest, but was actually a work hour, since, for its
duration, the laborers had to be on ready call. Of course, if the
Company practices in this regard should be modified to afford
the mechanics a real rest during that hour (f. ex., by installing
an entirely different emergency crew, or any similar
arrangement), then the modification of this part of the decision
may be sought from the Court below. As things now stand, we
see no warrant for altering the decision.
Disposition The judgment appealed from is affirmed. Costs
against appellant.
PHILIPPINE AIRLINES INC V NLRC (PROTACIO,
FABROS)
302 SCRA 582
PUNO; February 2, 1999
NATURE
Appeal from the decision of the NLRC
FACTS
- Private respondent was employed as flight surgeon at
petitioner company. He was assigned at the PAL Medical Clinic
at Nichols and was on duty from 4:00 in the afternoon until
12:00 midnight.
- At around 7:00 pm, one night, private respondent left the
clinic to have his dinner at his residence, which was about 5-
minute drive away. A few minutes later, the clinic received an
emergency call from the PAL Cargo Services. One of its
employees, Mr. Manuel Acosta, had suffered a heart attack. The
nurse on duty, Mr. Merlino Eusebio, called private respondent at
home to inform him of the emergency. The patient arrived at
the clinic at 7:50 pm and Mr. Eusebio immediately rushed him
to the hospital. When private respondent reached the clinic at
around 7:51 pm, Mr. Eusebio had already left with the patient.
Mr. Acosta died the following day. PAL Medical Director ordered
the Chief Flight Surgeon to conduct an investigation. The Chief
Flight Surgeon, in turn, required private respondent to explain
why no disciplinary sanction should be taken against him.
Private respondent asserted that he was entitled to a 30 min.
meal break; that he immediately left his residence upon being
informed by Mr. Eusebio about the emergency and he arrived at
the clinic a few minutes later; that Mr. Eusebio panicked and
brought the patient to the hospital without waiting for him.
- The management charged private respondent with
abandonment of post while on duty. In his answer, private
respondent reiterated that he only left the clinic to have his
dinner at home. In fact, he returned to the clinic at 7:51 in the
A2010 - 139 - Disini
evening upon being informed of the emergency. PAL decided to
suspend private respondent for three months.
- Private respondent filed a complaint for illegal suspension
against petitioner.
- Labor Arbiter Romulus A. Protasio rendered a decision
declaring the suspension of private respondent illegal.
- Petitioner appealed to the NLRC. The NLRC, however,
dismissed the appeal.
ISSUES
1. WON the 3-month suspension of private respondent should
be nullified despite the fact that the private respondent has
committed an offense that warranted the imposition of
disciplinary action
2. WON moral damages should be awarded
HELD
1. YES
Ratio The eight-hour work period does not include the meal
break. Nowhere in the law may it be inferred that employees
must take their meals within the company premises. Employees
are not prohibited from going out of the premises as long as
they return to their posts on time.
Reasoning
- A83 and 85 LC read:
Art. 83. Normal hours of work. — The normal hours of work of
any employee shall not exceed eight hours a day.
Health personnel in cities and municipalities with a population
of at least one million or in hospitals and clinics with a bed
capacity of at least one hundred shall hold regular office
hours for eight hours a day, for five days a week, ...
Art. 85. Meal periods. — Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60)
minutes time-off for their regular meals.
Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the
Labor Code further states:
Sec. 7. Meal and Rest Periods. — Every employer shall give
his employees...not less than one (1) hour time-off for regular
meals...
- Private respondent left the clinic that night only to have his
dinner at his house, which was only a few minutes' drive away
from the clinic. His whereabouts were known to the nurse on
duty so that he could be easily reached in case of emergency.
Upon being informed of Mr. Acosta's condition, private
respondent immediately left his home and returned to the
clinic. These facts belie petitioner's claim of abandonment.
2. NO
Ratio Not every employee who is illegally dismissed or
suspended is entitled to damages. As a rule, moral damages are
recoverable only where the dismissal or suspension of the
employee was attended by bad faith or fraud, or constituted an
act oppressive to labor, or was done in a manner contrary to
morals, good customs or public policy.
Reasoning
- Bad faith does not simply mean negligence or bad judgment. It
involves a state of mind dominated by ill will or motive. It
implies a conscious and intentional design to do a wrongful act
for a dishonest purpose or some moral obliquity.
- there is no showing that the management of petitioner
company was moved by some evil motive in suspending private
respondent. It suspended private respondent on an honest,
albeit erroneous, belief that private respondent's act of leaving
the company premises to take his meal at home constituted
abandonment of post which warrants the penalty of suspension
Disposition petition is PARTIALLY GRANTED. The portion of
the assailed decision awarding moral damages to private
respondent is DELETED. All other aspects of the decision are
AFFIRMED.
5.06 OVERTIME WORK AND
OFFSETTING PROHIBITION
Labor Law 1
DEFINITION AND RATIONALE
OVERTIME PAY
PNB V PNB EMPLOYEES ASSOCIATION
115 SCRA 507
BARREDO; July 30, 1982
NATURE
Appeal from decision of the Court of Industrial Relations (CIR)
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 employee’s 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
HELD
NO
Ratio 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:
1. WON the additional pay is for extra work done or service
rendered
2. 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.
Reasoning
- 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 PEMA’s 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
A2010 - 140 - Disini
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.
- To apply the NAWASA computation would require a different
formula for each and every employee. It would require
reference to and continued use of individual earnings in the
past, thus multiplying the administrative difficulties of the
Company. It would be cumbersome and tedious a process to
compute overtime pay and this may again cause delays in
payments, which in turn could lead to serious disputes. To apply
this mode of computation would retard and stifle the growth of
unions themselves as Companies would be irresistibly drawn
into denying, new and additional fringe benefits, if not those
already existing, for fear of bloating their overhead expenses
through overtime which, by reason of being unfixed, becomes
instead a veritable source of irritant in labor relations.
**Overtime Pay Rationale Why is a laborer or employee who
works beyond the regular hours of work entitled to extra
compensation called, in this enlightened time, overtime pay?
Verily, there can be no other reason than that he is made to
work longer than what is commensurate with his agreed
compensation for the statutorily fixed or voluntarily agreed
hours of labor he is supposed to do. When he thus spends
additional time to his work, the effect upon him is multi-
faceted; he puts in more effort, physical and/or mental; he is
delayed in going home to his family to enjoy the comforts
thereof; he might have no time for relaxation, amusement or
sports; he might miss important pre-arranged engagements;
etc. It is thus the additional work, labor or service employed
and the adverse effects just mentioned of his longer stay in his
place of work that justify and are the real reasons for the extra
compensation that is called overtime pay.
**Overtime Pay Definition The additional pay for service or
work rendered or performed in excess of 8 hours a day by
employees or laborers in employment covered by the 8 hour
Labor Law [C.A. 444, now Art. 87 Labor Code] and not exempt
from its requirements. It is computed by multiplying the
overtime hourly rate by the number of hours worked in excess
of eight.
Disposition decision appealed from is REVERSED
CALTEX REGULAR EMPLOYEES V CALTEX (PHILS)
INC
247 SCRA 398
FELICIANO; August 15, 1995
NATURE
Petition for certiorari
FACTS
- On 12 December 1985, petitioner Union and Caltex
(Philippines), Inc. (Caltex) entered into a Collective Bargaining
Agreement ("1985 CBA") which was to be in effect until
midnight of 31 December 1988. The CBA included, among
others, the following provision:
"ARTICLE III
HOURS OF WORK
In conformity with Presidential Decree 442, otherwise known
as the Labor Code of the Philippines, as amended, the regular
work week shall consist of eight (8) hours per day, seven (7)
days, Monday through Sunday, during which regular rates of
pay shall be paid in accordance with Annex B and work on the
employee's one 'Day of Rest,' shall be considered a special
work day, during which 'Day of Rest' rates of pay shall be paid
as provided in Annex B. Daily working schedules shall be
established by management in accordance with the
requirements of efficient operations on the basis of eight (8)
hours per day for any five (5) days. Provided, however,
Labor Law 1
employees required to work in excess of forty (40) hours in
any week shall be compensated in accordance with Annex B
of this Agreement.
- Sometime in August 1986, the Union called Caltex's attention
to alleged violations by Caltex of Annex "B" of the 1985 CBA,
e.g. non-payment of night-shift differential, non-payment of
overtime pay and non-payment at "first day-off rates" for work
performed on a Saturday.
- Caltex’s Industrial Relations manager informed Union that
differential payments would be timely implemented.
- In the implementation of the re-computed claims, however, no
differential payment was made with respect to work performed
on the first 2 1/2 hours on a Saturday.
Union instituted a complaint for unfair labor practice against
Caltex alleging violation of the provisions of the 1985 CBA.
- Petitioners’ Claims:
> charged Caltex with shortchanging its employees when
Caltex compensated work performed on the first 2 1/2 hours of
Saturday, an employees' day of rest, at regular rates, when it
should be paying at "day of rest" or "day off" rates.
> Caltex was violating the statutory prohibition against off-
setting undertime for overtime work on another day. The
employees had been required to render "overtime work" on a
Saturday but compensated only at regular rates of pay,
because they had not completed the eight (8)-hour work period
daily from Monday thru Friday.
- Respondent’s Comments
> denied the accusations of the Union. It averred that Saturday
was never designated as a day of rest, much less a "day-off".
> the 1985 CBA provided only 1 day of rest for employees at
the Manila Office, as well as employees similarly situated at the
Legazpi and Marinduque Bulk Depots. This day of rest,
according to Caltex was Sunday.
- Ruling of Labor Arbiter
> ruled in favor of petitioner Union, while finding at the same
time that Caltex was not guilty of any unfair labor practice.
- In interpreting Article III and Annex "B" of the 1985 CBA, Labor
Arbiter concluded that Caltex's employees had been given two
(2) days (instead of one day) of rest, with the result that work
performed on the employee's first day of rest, viz. Saturday,
should be compensated at "First day-off" rates.
- Ruling of NLRC
> NLRC set aside the decision of Labor Arbiter; conclusions of
the Labor Arbiter were not supported by the evidence on
record.
- In interpreting the provisions of the 1985 CBA, NLRC
concluded that CBA granted only one (1) day of rest, e.g.,
Sunday.
- The Union's motion for reconsideration was denied.
ISSUE
WON Article III in relation to Annex B of the 1985 CBA should be
interpreted as giving the workers two days of rest (Saturday
and Sunday), thus entitling the workers to “day off” rates on
work performed on a Saturday
HELD
NO, the intention of the parties to the 1985 CBA was to provide
the employees with only one (1) day of rest.
- the use of the word "one" describing the phrase "day of rest
[of an employee]" emphasizes the fact that the parties had
agreed that only a single day of rest shall be scheduled and
shall be provided to the employee.
- contract clauses governing hours of work in previous CBAs
executed in 1973, 1976, 1979 and 1982 contained provisions
parallel if not identical to those set out in Article III of the 1985
CBA. In all these CBAs (1973, 1976, 1979, 1982), Article III
provide that only "work on an employee's one day of rest" shall
be paid on the basis of "day of rest rates".
A2010 - 141 - Disini
Petitioner Union had never suggested that more than 1 day of
rest had been agreed upon, and Caltex had never treated
Article III or any other portion of the CBAs as providing two (2)
days of rest.
- An annex expresses the idea of joining a smaller or
subordinate thing with another, larger or of higher importance.
An annex has a subordinate role, without any independent
significance separate from that to which it is tacked on. Annex
"B," in the case at bar, is one such document. It is not a
memorandum of amendments or a codicil containing additional
or new terms or stipulations. Annex "B" cannot be construed as
modifying or altering the terms expressed in the body of the
agreement contained in the 1985 CBA. It did not confer any
rights upon employees represented by petitioner Union; neither
did it impose any obligations upon private respondent Caltex. In
fact, the contents of Annex "B" have no intelligible significance
in and of themselves when considered separately from the 1985
CBA.
- Petitioner Union also contended that private respondent
Caltex in the instant petition was violating the statutory
prohibition against off-setting undertime for overtime work on
another day. 11 Union counsel attempted to establish this
charge by asserting that the employees had been required to
render "overtime work" on a Saturday but compensated only at
regular rates of pay, because they had not completed the eight
(8)-hour work period daily from Monday thru Friday.
- Overtime work consists of hours worked on a given day in
excess of the applicable work period, which here is eight (8)
hours. It is not enough that the hours worked fall on
disagreeable or inconvenient hours. In order that work may be
considered as overtime work, the hours worked must be in
excess of and in addition to the eight (8) hours worked during
the prescribed daily work period, or the forty (40) hours worked
during the regular work week Monday thru Friday.
- In the present case, under the 1985 CBA, hours worked on a
Saturday do not, by that fact alone, necessarily constitute
overtime work compensable at premium rates of pay, contrary
to petitioner's assertion. These are normal or regular work
hours, compensable at regular rates of pay, as provided in the
1985 CBA; under that CBA, Saturday is not a rest day or a "day
off". It is only when an employee has been required on a
Saturday to render work in excess of the forty (40) hours which
constitute the regular work week that such employee may be
considered as performing overtime work on that Saturday.
Disposition Petition dismissed
MANILA TERMINAL CO INC V CIR
[ ]
NO COMPUTATION FORMULA BASIC
CONTRACT
MANILA TERMINAL CO INC V CIR
[ ]
BUILT-IN COMPENSATION
ENGINEERING EQUIPMENT INC V MINISTER OF
LABOR (ASPERA)
138 SCRA 616
AQUINO; September 23, 1985
NATURE
Petition to review the resolution of the Minister of Labor
FACTS
- Miguel Aspera worked for Engineering Equipment, Inc. in Saudi
Arabia for nearly a year from April 26, 1977 to April 16, 1978.
Labor Law 1
- He had a monthly salary of P750 (P860) with a six-day work
week consisting of ten working hours.
- According to his written contract of employment, he may be
required to work overtime in excess of the ten-hour work each
day and to work on rest days or on Saudi Arabian holidays.
- He was also promised overtime pay on top of his P750 salary
for work rendered in excess of what was required from him as a
minimum.
- Jonathan de la Cruz, the director of Employment Services and
the NLRC sustained his claim and awarded him that amount as
overtime pay. The 10 hour-a-week workload was declared void
for going against the Eight Hour Labor Law and section 87 of
the Code which states that any work beyond 8 hours a day
should be considered overtime work.
- Petitioners’ Claim:
> Aspera is a managerial employee and should thus not be
entitled to overtime pay in accordance with Section 82 of the
Labor Code.
> Aspera also signed a written contract with a “built-in”
overtime pay in the ten hour workday which meant that his
basic monthly pay was adjusted to reflect the higher amount
covering the guaranteed two-hour extra time whether worked
or unworked.
> The contracts were submitted to respondent Jonathan de la
Cruz who approved of the same.
- Respondents’ Comments:
> Aspera worked 10 hours daily for 335 days and he claims that
his monthly salary should correspond to eight hours of daily
work and that for the additional two hours daily, he was entitled
to overtime pay at $1.2162 per hour or to $814.85 for 670
hours during 335 working days.
ISSUE
WON the Minister of Labor erred in awarding the overtime pay
to Aspera
HELD
YES
- De la Cruz acted with lack of discretion and in excess of his
jurisdiction when he awarded the overtime pay to Aspera.
- He himself approved the contract even he knew of the Eight
Hour Labor Law. Because of that approval, petitioner
Engineering Equipment Inc. acted in good faith in enforcing the
contract.
- Aspera also did not deny that he was a managerial employee.
Disposition The resolution of the MOLE is reversed and set
aside. Aspera’s complaint is dismissed. No costs.
PROOF OF WORK
LAGATIC V NLRC
285 SCRA 251
ROMERO; January 28, 1998
NATURE
Petition by certiorari
FACTS
- Petitioner Romeo Lagatic was employed by Cityland as a
marketing specialist. He was tasked with soliciting sales for the
company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls. Cold calls refer
to the practice of prospecting for clients through the telephone
directory.
- In order to assess cold calls made by the sales staff, as well as
to determine the results thereof, Cityland requires the
submission of daily progress reports on the same.
- On October 22, 1991, Cityland issued a written reprimand to
petitioner for his failure to submit cold call reports for certain
A2010 - 142 - Disini
days of September & October 1991. This notwithstanding,
petitioner again failed to submit cold call reports for September
& October 1992. Petitioner was required to explain his inaction,
with a warning that further non-compliance would result in his
termination from the company. In a reply, petitioner claimed
that the same was an honest omission brought about by his
concentration on other aspects of his job. Cityland found said
excuse inadequate and suspended him for three days, with a
similar warning.
- Notwithstanding the aforesaid suspension and warning,
petitioner again failed to submit cold call reports for February
1993. He was verbally reminded to submit the same and was
even given up to February 17, 1993 to do so. Instead of
complying with said directive, petitioner wrote a note, “TO HELL
WITH COLD CALLS! WHO CARES?” and exhibited the same to
his co-employees.
- Petitioner received a memorandum requiring him to explain
why Cityland should not make good its previous warning for his
failure to submit cold call reports, as well as for issuing the
written statement aforementioned. Petitioner sent a letter-reply
alleging that his failure to submit cold call reports should not be
deemed as gross insubordination. He denied any knowledge of
the damaging statement, “TO HELL WITH COLD CALLS!”
- Finding petitioner guilty of gross insubordination, Cityland
served a notice of dismissal upon him. Petitioner filed a
complaint against Cityland for illegal dismissal, illegal
deduction, underpayment, overtime and rest day pay, damages
and attorney’s fees.
- The labor arbiter dismissed the petition for lack of merit. On
appeal, the same was affirmed by the NLRC; hence the present
recourse.
ISSUE
1. WON respondent NLRC gravely abused its discretion in not
finding that petitioner was illegally dismissed
2. WON respondent NLRC gravely abused its discretion in ruling
that petitioner is not entitled to salary differentials, backwages,
separation pay, overtime pay, rest day pay, unpaid
commissions, moral and exemplary damages and attorney’s
fees
HELD
1. NO
Ratio Except as provided for, or limited by, special laws, an
employer is free to regulate, according to his discretion and
judgment, all aspects of employment.” Employers may, thus,
make reasonable rules and regulations for the government of
their employees, and when employees, with knowledge of an
established rule, enter the service, the rule becomes a part of
the contract of employment. It is also generally recognized that
company policies and regulations, unless shown to be grossly
oppressive or contrary to law, are generally valid and binding
on the parties and must be complied with.
Reasoning
- Said company policy of requiring cold calls and the
concomitant reports thereon is clearly reasonable and lawful,
sufficiently known to petitioner, and in connection with the
duties which he had been engaged to discharge. There is, thus,
just cause for his dismissal.
- Based on the foregoing, we find petitioner guilty of willful
disobedience. Willful disobedience requires the concurrence of
at least two 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.
- Well settled is the dictum that the twin requirements of notice
and hearing constitute the elements of due process in the
dismissal of employees. Thus, the employer must furnish the
employee with two written notices before the termination of
employment can be effected. The first apprises the employee
of the particular acts or omissions for which his dismissal is
Labor Law 1
sought; the second informs him of the employer’s decision to
dismiss him.
- The chronology of events clearly shows that petitioner was
served with the required written notices.
- The requirement of a hearing is complied with as long as there
was an opportunity to be heard, and not necessarily that an
actual hearing be conducted. Petitioner had an opportunity to
be heard as he submitted a letter-reply to the charge. He,
however, adduced no other evidence on his behalf. In fact, he
admitted his failure to submit cold call reports, praying that the
same be not considered as gross insubordination.
- Denials are weak forms of defenses, particularly when they
are not substantiated by clear and convincing evidence. Given
the foregoing, we hold that petitioner’s constitutional right to
due process has not been violated.
2. NO
- There is no law which requires employers to pay commissions,
and when they do so, there is no law which prescribes a method
for computing commissions. The determination of the amount
of commissions is the result of collective bargaining
negotiations, individual employment contracts or established
employer practice. Since the formula for the computation of
commissions was presented to and accepted by petitioner, such
prescribed formula is in order.
- Petitioner failed to show his entitlement to overtime and rest
day pay due, to the lack of sufficient evidence as to the number
of days and hours when he rendered overtime and rest day
work. Entitlement to overtime pay must first be established by
proof that said overtime work was actually performed, before
an employee may avail of said benefit.
- Lastly, with the finding that petitioner’s dismissal was for a
just and valid cause, his claims for moral and exemplary
damages, as well as attorney’s fees, must fail.
Disposition AFFIRMED.
SOCIAL SECURITY SYSTEM V CA
VILLAR V NLRC (HI-TECH MANUFACTURING CORP)
331 SCRA 686
BELLOSILLO; May 11, 2000
NATURE
Petitioners, in this petition for certiorari, assail for having been
rendered with grave abuse of discretion the 30 May 1997
Decision of the National Labor Relations Commission (NLRC)
vacating and setting aside the Decision of the Labor Arbiter, as
well as its 31 July 1997 Resolution denying reconsideration.
FACTS
- HI-TECH MANUFACTURING CORPORATION (HI-TECH), a
corporation duly organized and existing under Philippine laws, is
engaged in the business of manufacturing cartons for
commercial purposes. On different dates, HI-TECH hired
petitioners to perform various jobs for the company such as
slitter machine operator, inkman, silk screen printer, truck
helper, rubber dye setter, forklift operator and stitching
machine operator.
- Sometime in March 1994 petitioners, who were members of
the Federation of Free Workers Union, filed before the
Department of Labor a petition for certification election among
the rank-and-file employees of HI-TECH. The petition was
granted and a certification election was conducted inside the
company premises on 31 July 1994. However, petitioners lost in
the election as the HI-TECH employees voted for "No Union."
- On 1 August 1994 and the succeeding days thereafter,
petitioners failed to report for work. They alleged that they were
barred from entering the premises of HI-TECH; hence, they
immediately filed before the Labor Arbiter separate complaints
for illegal dismissal and labor standards claims against HI-TECH,
Herman T. Go, owner, and Carmen Belano, general manager.
- Petitioners claimed that they were summarily dismissed from
employment by the management of HI-TECH in retaliation for
A2010 - 143 - Disini
organizing a labor union in the work premises as well as in filing
the petition for certification election before the Department of
Labor. They further averred that they were paid daily wages
ranging from P81.00 to P145.00 which were below the minimum
fixed by law and that they were required to work six (6) days a
week from 8 o’clock in the morning to 7 o’clock in the evening
without being paid for the overtime. Neither were they paid
their service incentive leave pay and 13th month pay.
- The Labor Arbiter ruled for the petitioners. On appeal by HI-
TECH, the NLRC in its Decision of 30 May 1997 vacated and set
aside the Labor Arbiter’s Decision and ordered petitioners to
report back to work, or if no longer feasible, directed HI-TECH to
pay petitioners their separation benefits.
ISSUE
WON petitioners are entitled to back wages and other monetary
benefits
HELD
Ratio The burden of proving payment of monetary claims rests
on the employer. In Jimenez v. National Labor Relations
Commission we held -
As a general rule, one who pleads payment has the burden of
proving it. Even where the plaintiff must allege non-payment,
the general rule is that the burden rests on the defendant to
prove payment, rather than on the plaintiff to prove non-
payment. The debtor has the burden of showing with legal
certainty that the obligation has been discharged with
payment.
- The petitioners’ claims for underpayment of wages, 13th
month pay and service incentive leave pay should be upheld.
- Petitioners executed a JOINT AFFIDAVIT specifying their daily
wages, positions and periods of employment, which was made
the basis of the Labor Arbiter’s computation of the monetary
awards. All that the NLRC needed to do was to refer to the
prevailing minimum wage to ascertain the correctness of
petitioners’ claims. And most importantly, the burden of
proving payment of monetary claims rests on the
employer.
- The reason for the rule is that the pertinent personnel files,
payrolls, records, remittances and other similar documents –
which will show that overtime, differentials, service incentive
leave and other claims of workers have been paid – are not in
the possession of the worker but in the custody and absolute
control of the employer. Thus, in choosing not to present
evidence to prove that it had paid all the monetary claims of
petitioners, HI-TECH failed once again to discharge the onus
probandi. Consequently, we have no choice but to award those
claims to petitioners.
EMPLOYER OBLIGATION
SOCIAL SECURITY SYSTEM V CA
[ ]
5.07 NIGHT WORK
RATIONALE PROHIBITION
SHELL OIL CO. OF THE PHILS LTD V NATIONAL
LABOR UNION
81 Phil 315
BRIONES; July 26, 1948
NATURE
Petition for review on certiorari
Labor Law 1
FACTS
- Acting on a petition of the company "National Work Union,"
the Court of Industrial Relations has dictated a decision in
which, among others things, the petroleum firm is obliged to
pay its laborers for work at night a compensation additional of
50% on its regular salaries. It seems that the company has need
of the nocturnal service of a determined number of laborers,
since some of the necessary tasks are done at night for the
supply of gasoline and lubricants, and for other needs. The
company alleges and argues that there’s not any disposition
that authorizes the Court of Industrial Relations to order the
payment of additional compensation to laborers that work at
night, but, on the contrary, the law of the Commonwealth Not.
444 exempts all owners of similar obligation every time that in
said law the cases are provided in which the payment of
"overtime" is compulsory, and among such cases of overtime
does not figure the work at night. In turn, the union maintains
that the law Not. 444 of the Commonwealth that is invoked
does not have any application al present case, therefore the
same one is of reach inevitably limited, being referred And
exclusively to the day maxima of work contidiano permitted in
the industrial establishments — the day of 8 hours. Our
conclusion is that the union has the reason on its part.
- Commonwealth No. 444 states:
SECTION 1. The legal working day for any person employed
by another shall be of not more than eight hours daily. When
the work is not continuous, the time during which the laborer
is not working and can leave his working place and can rest
completely shall not be counted.
SEC. 3. Work may be performed beyond eight hours a day in
case of actual or impending emergencies caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other
disaster or calamity in order to prevent loss to life and
property or imminent danger to public safety; or in case
urgent work to be performed on the machines, equipment, or
installations in order to avoid a serious loss which the
employer would otherwise suffer, or some other just cause of
a similar nature; but in all such cases the laborers and
employees shall be entitled to receive compensation for the
overtime work performed at the same rate as their regular
wages or salary, plus at least twenty-five per centum
additional.
In case of national emergency the government is empowered
to establish rules and regulations for the operation of the
plants and factories and to determine the wages to be paid
the laborers.
SEC. 4. No person, firm, or corporation, business
establishment or place or center of labor shall compel an
employee or laborer to work during Sundays and legal
holidays, unless he is paid an additional sum of at least
twenty-five per centum of his regular remuneration: Provided
however, That this prohibition shall not apply to public
utilities performing some public service such as supplying
gas, electricity, power, water, or providing means of
transportation or communication.
- The lawyers of the company argues that in these articules the
cases are specified in which payment of extra of additional
compensation is authorized: (A) in case of "overtime" or work
over and above the hours regulated by reasons dangers of
urgency because of some disaster or accident, or to avoid lost
or to repair them; (b) in case of work by Sundays and festivals;
(c) in case of emergency, and nothing it is necessary refer at
work at night; then the order that treats is illegal, therefore not
this authorized by the law. "In the absence of legislation
authorizing the payment of extra compensation for work at
night, the Court of Industrial Relations has not the power or
authority to order the petitioner company to pay extra
compensation for by its laborers at night. Expressio unius est
exclusio alterius. Where, in the statute expressly specifies the
cases where payment of extra compensation may be
demanded, extra compensation may be allowed in those cases
only, and in not others. The provisions of the Commonwealth
Act Not. 444 cannot be enlarged by implication or otherwise.
A2010 - 144 - Disini
Expressum facit cessare tacitum. The argumentation is
erronea. The Law Not. 444 is not applicable al present case,
being evident that the same one has an object I specify, to
know: (A) to set in 8 hours the day maxima of work; (b) senalar
certain exceptional cases in which the work out of said day can
be authorized; (c) to provide a bonus, that should not be less
than 25% of the salary to regulate, for the "overtime" or I work
over and above the 8 hours.
ISSUE
WON the petroleum company is obligated to give additional pay
for its night workers
HELD
YES
Ratio The night work that the company Shell requires of its
laborers is not an "overtime", in the sense in which this word is
employed in Commonwealth Act 444, but is a complete day of
work, of 8 hours. In other words, the work at night is not only
unexceso, prolongacion or "overtime" of the regular daywork ,
but is another type of work, absolutely independent of the day.
Therefore there are two shifts: the shift of laborers that work
during the day; and the shift of the ones that work at night. It is
not strange that the legislator have not included this type of
work among the cases of "overtime" in the above-mentioned
law Not. 444.
Reasoning
- And with respect with the apreciation that the work at night is
but heavy and burdensome than that of day and, therefore, he
deserves greater remuneration, there is no reason to revoke it
or to alter it. There is not possible argument against the
universal fact that the ordinary, normal, and regular work is that
of day and that the work at night is very exceptional and
justified alone certainly imperatively inevitable motives.
- Reasons of hygiene, of medicine, of morale, of culture, of
sociologia, they establish with one accord that the work at night
has many objections, and when there is not but remedy that to
cause is alone just that I am paid better than usually to
compensate hasa certain point al working of such objections. It
must be remembered that it is distinctly unphysiological to turn
the night into day and deprive the body of the beneficial effects
of sunshine. The human organism revolts against this
procedure. Added to artificial lighting are reversed and
unnatural times of eating, resting, and sleeping. Much of the
inferiority of nightwork can doubtless be traced to the failure of
the workers to secure proper rest and sleep, by day. Because of
inability or the lack of opportunity to sleep, nightworkers often
spend their days in performing domestic duties, joining the
family in the midday meal, 'tinkering about the place', watching
the baseball game, attending the theater or taking a ride in the
car. It is not strange that nightworkers tend to be less efficient
than dayworkers and lose more time. . . (The Management of
Labor Relations, by Watkins & Dodd, page 524.).
> Nightwork. — Nightwork has gained a measure of
prominence in the modern industrial system in connection
with continuous industries, that is, industries in which the
nature of the processes makes it necessary to keep
machinery and equipment in constant operation. Even in
continuous industries the tendency is definitely in the
direction of FOUR shifts of 6 hours each, with provision for an
automatic change of shift for all workers at stated intervals.
Some discussion has taken place with regard to the lengths of
the period any workers should be allowed to remain on the
night shift. A weekly change of shifts is common, specially
where three or four shifts are in operation; in other cases the
change is made fortnightly or monthly; in still other instances,
no alternation is provided for, the workers remaining on day
— or nightwork permanently, except where temporary
changes are made for individual convenience.
There is sharp difference of opinion concerning the relative
merits of these systems. Advocates of the weekly change of
shifts contend that the strain of nightwork and the difficulty of
getting adequate sleep during the day make it unwise for
workers to remain on the"graveyard" shift for more than a
Labor Law 1
week at a time. Opponents urge that repeated changes make
it more difficult to settle down to either kind of shift and that
after the first week nightwork becomes less trying while the
ability to sleep by day increases. Workers themselves react in
various ways to the different systems. This much, however, is
certain: Few persons react favorably to nightwork, whether
the shift be continuous or alternating. Outside of continuous
industries, nightwork can scarcely be justified, and, even in
these, it presents serious disadvantages which must be
recognized in planing for industrial efficiency, stabilization of
the working force, the promotion of industrial good-will, and
the conservation of the health and vitality of the workers.
> Nightwork cannot be regarded as desirable, either from the
point of view of the employer or of the wage earner. It is
uneconomical unless overhead costs are unusually heavy.
Frequently the scale of wages is higher as an inducement to
employees to accept employment on the night shift, and the
rate of production is generally lower.
> The lack of sunlight tends to produce anemia and
tuberculosis and to predispose to other ills. Nightwork brings
increased liability to eyestrain and accident. Serious moral
dangers also are likely to result from the necessity of
traveling the streets alone at night, and from the interference
with normal home life. From an economic point of view,
moreover, the investigations showed that nightwork was
unprofitable, being inferior to day work both in quality and in
quantity. Wherever it had been abolished, in the long run the
efficiency both of the management and of the workers was
raised. Furthermore, it was found that nightwork laws are a
valuable aid in enforcing acts fixing the maximum period of
employment. (Principles of Labor Legislation, by Commons
and Andrews, 4th Revised Edition, p. 142.)
Special regulation of nightwork for adult men is a
comparatively recent development. Some European countries
have adopted laws placing special limitations on hours of
nightwork for men, and others prohibit such work except in
continuous processes. (Principles of Labor legislation, 4th
Revised Edition by Common & Andrews, p. 147.)
> Nightwork has almost invariably been looked upon with
disfavor by students of the problem because of the excessive
strain involved, especially for women and young persons, the
large amount of lost time consequent upon exhaustion of the
workers, the additional strain and responsibility upon the
executive staff, the tendency of excessively fatigued workers
to "keep going" on artificial stimulants, the general
curtailment of time for rest, leisure, and cultural
improvement, and the fact that night workers, although
precluded to an extent from the activities of day life, do
attempt to enter into these activities, with resultant
impairment of physical well-being. It is not contended, of
course, that nightwork could be abolished in the continuous-
process industries, but it is possible to put such industries
upon a three- or four-shifts basis, and to prohibit nightwork
for women and children. (Labor's Progress and Problems, Vol.
I, p. 464, by Professors Millis and Montgomery.)
> Nightwork. — Civilized peoples are beginning to recognize
the fact that except in cases of necessity or in periods of
great emergency, nightwork is socially undesirable. Under our
modern industrial system, however, nightwork has greatly
aided the production of commodities, and has offered a
significant method of cutting down the ever-increasing
overhead costs of industry. This result has led employers to
believe that such work is necessary and profitable. Here
again one meets a conflict of economic and social interests.
Under these circumstances it is necessary to discover
whether nightwork has deleterious effects upon the health of
laborers and tends to reduce the ultimate supply of efficient
labor. If it can proved that nightwork affects adversely both
the quality and quantity of productive labor, its
discontinuance will undoubtedly be sanctioned by employers.
From a social point of view, even a relatively high degree of
efficiency in night operations must be forfeited if it is
purchased with rapid exhaustion of the health and energy of
the workers. From an economic point of view, nightwork may
A2010 - 145 - Disini
be necessary if the employer is to meet the demand for his
product, or if he is to maintain his market in the face of
increasing competition or mounting variable production costs.
> Industrial experience has shown that the possession of
extra-ordinary physical strength and self-control facilitates
the reversal of the ordinary routine of day work and night
rest, with the little or no unfavorable effect on health and
efficiency. Unusual vitality and self-control, however, are not
common possessions. It has been found that the most serious
obstacle to a reversal of the routine is the lack of self-
discipline. Many night workers enter into the numerous
activities of day life that preclude sleep, and continue to
attempt to do their work at night. Evidence gathered by the
British Health of Munition Workers' Committee places
permanent night workers, whether judged on the basis of
output or loss of time, in a very unfavorable positions as
compared with day workers.
> Systems of nightwork differ. There is the continuous
system, in which employees labor by night and do not attend
the establishment at all by day, and the discontinuous
system, in which the workers change to the day turn at
regular intervals, usually every other week. There are, of
course, minor variations in these systems, depending upon
the nature of the industry and the wishes of management.
Such bodies as the British Health Munition Workers'
Committee have given us valuable conclusions concerning
the effect of nightwork. Continuous nightwork is definitely
less productive than the discontinuous system. The output of
the continuous day shift does not make up for this loss in
production.
> There is, moreover, a marked difference between the rates
of output of night and day shifts on the discontinuous plan. In
each case investigated the inferiority of night labor was
definitely established. This inferiority is evidently the result of
the night worker's failure to secure proper amounts of sleep
and rest during the day. The system of continuous shifts,
especially for women, is regarded by all investigators as
undesirable. Women on continuous nightwork are likely to
perform domestic duties, and this added strain undoubtedly
accounts for the poorer results of their industrial activities.
The tendency to devote to amusement and other things the
time that should be spent in rest and sleep is certainly as
common among men as among women workers and accounts
largely for the loss of efficiency and time on the part of both
sexes in nightwork.
- 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.
Disposition Petition denied
SECTION 6: CONDITIONS OF
EMPLOYMENT – WEEKLY REST
PERIODS
Labor Law 1
6.01 RATIONALE
RATIONALE
MANILA ELECTRIC COMPANY V THE PUBLIC
UTILITIES EMPLOYEES' ASSOCIATION
79 PHIL. 409
FERIA; October 30, 1947
FACTS
- This is an appeal interposed by the petitioner Manila Electric
Company against the decision of the Court of Industrial
Relations, which reads as follows:
Although the practice of the company, according to the
manifestations of counsel for said company, has been to
grant one day vacation with pay to every workingman who
had worked for seven consecutive days including Sundays,
the Court considers justified the opposition presented by
the workingmen to the effect that they need Sundays and
holidays for the observance of their religion and for rest.
The Court, therefore, orders the respondent company to
pay 50 per cent increase for overtime work done on
ordinary days and 50 per cent increase for work done
during Sundays and legal holidays irrespective of the
number of days they work during the week.
- The appellant contends that the said decision is against
Section 4, Commonwealth Act No. 444, which reads as
follows:
No person, firm, or corporation, business establishment or
place or center of labor shall compel an employee or
laborer to work during Sundays and legal holidays, unless
he is paid an additional sum of at least 25% of his regular
remuneration: Provided, however, That this prohibition
shall not apply to public utilities performing some public
service such as supplying gas, electricity, power, water, or
providing means of transportation or communication.
ISSUE
WON the decision of the Court of Industrial Relations is
erroneous and contrary to Section 4, Commonwealth Act No.
444
HELD
YES
- Commonwealth Act No. 444 provides that public utilities
supplying electricity, gas, power, water, or providing means of
transportation or communication may compel their employees
or laborers to work during Sundays and legal holidays without
paying them an additional compensation of not less than 25 per
cent of their regular remuneration on said days.
-The provisions of the above quoted section 4, are plain and
unambiguous and convey a clear and definite meaning.
- Said section 1 consists of two parts: the first, which is the
enactment clause, prohibits a person, firm or corporation,
business establishment, or place or center of labor from
compelling an employee or laborer to work during Sundays and
legal holidays, unless the former pays the latter an additional
sum of at least twenty five per centum of his regular
remuneration; and the second part, which is an exception,
exempts public utilities performing some public service, such as
supplying gas, electricity, power, water or providing means of
transportation or communication, from the prohibition
established in the enactment clause.
- As the appellant is a public utility that supplies the electricity
and provides means of transportation to the public, it is evident
that the appellant is exempt from the qualified prohibition
established in the enactment clause, and may compel its
employees or laborers to work during Sundays and legal
holidays without paying them said extra compensation.
A2010 - 146 - Disini
- To construe section 4, Commonwealth Act No. 444, as
exempting public utilities, like the appellant, from the obligation
to pay the additional remuneration required by said section 4
should they compel their employees or laborers to work on
Sundays and legal holidays, would not make such exception a
class legislation, violative of the constitutional guaranty of
equal protection of the laws.
- And it is evident that the division made by section 4, of
Commonwealth Act No. 444, of persons, firms, and corporations
into two classes: one composed of public utilities performing
some public service such as supplying gas, electricity, power,
water or providing means of transportation; and another
composed of persons, firms, and corporations which are not
public utilities and do not perform said public service, is not
arbitrary and is based indifferences which are apparent and
reasonable.
- The division is not arbitrary, and the basis thereof is
reasonable. Public utilities exempted from the prohibition set
forth in the enactment clause of section 4, Commonwealth Act
No. 444, are required to perform a continuous service including
Sundays and legal holidays to the public, since the public good
so demands, and are not allowed to collect an extra charge for
services performed on those days; while the others are not
required to do so and are free to operate or not their shops,
business, or industries on Sundays and legal holidays.
- If they operate and compel their laborers to work on those
days it is but just and natural that they should pay an extra
compensation to them, because it is to be presumed that they
can make money or business by operating on those days even if
they have to pay such extra remuneration.
It would be unfair for the law to compel public utilities like the
appellant to pay an additional or extra compensation to
laborers whom they have to compel to work during Sundays
and legal holidays, in order to perform a continuous service to
the public. To require public utilities performing service to do
so, would be tantamount to penalize them for performing public
service during said days in compliance with the requirement of
the law and public interest.
Disposition The ruling of the Court of Industrial Relations was
set aside.
SEPARATE OPINION
PERFECTO [dissent]
- It will be seen that section 4 of Commonwealth Act No.444
divides the employers into two classes: 1. Those not engaged in
public utilities, and 2. those engaged in public utilities.
- The first class cannot compel their employees or laborers to
work on Sundays and holidays without giving them an
additional salary or renumeration equivalent to not less than
twenty-five per centum of the basic remuneration. There is no
limit as to the time or circumstances under which the additional
compensation is to be paid. Employers engaged in public
utilities are excluded from the prohibition.
- This means simply that employers engaged in public utilities
may or may not pay the additional compensation or any
additional compensation for compelling their laborers to work
on Sundays and holidays. The exception should not be
interpreted as providing that employers engaged in public
utilities cannot be compelled to pay additional compensation to
workers required to work on Sundays and holidays. As to them,
section 4of Commonwealth Act No. 444 may be considered as
not having been enacted at all. Exception or exemption from a
negative or prohibitory legal provision is not a positive or
affirmative provision commanding the excepted or exempted
person to do what is enjoined in the general provision.
- The right to collect an additional sum of at least twenty-five
per centum of the basic remuneration is guaranteed to all
workers and employees not engaged in public utilities and that
right is enforceable not only in the Court of Industrial Relations
but in any other competent court of justice.
- It is a fact that Sundays and legal holidays are set aside by law
as days of rest. The life, existence, and happiness of a person
Labor Law 1
do not depend only on the satisfaction of his physical needs.
There are moral, intellectual and spiritual needs as imperative
as the physical ones.
- Ordinarily, Sundays and legal holidays are dedicated to
reading and instruction so as to fill the mind with culture or
some sort of advancement. On those days the laborer enjoys
longer hours in the company of his family. That gives him an
opportunity to satisfy his moral needs. During Sundays and
holidays more time is dedicated to worship and other religious
services. That gives a laborer an opportunity to satisfy his
spiritual needs. The deprivation of that opportunity to satisfy
mental, moral, and spiritual needs should not be ignored, and
should be properly compensated.
Petition should be dismissed.
6.02 COVERAGE
6.03 SCHEDULING OF REST DAY
6.04 COMPULSORY WORK AND
COMPENSATION
SECTION 7: CONDITIONS OF
EMPLOYMENT – HOLIDAYS
7.01 COVERAGE
COVERAGE AND PURPOSE
MANTRADE/FMC DIVISION EMPLOYEES AND
WORKERS UNION V BACUNGAN
SAN MIGUEL V CA (ESPAÑOL)
375 SCRA 311 (02)
KAPUNAN; January 30, 2002
NATURE
Petition for a review of the decision of the Court of Appeals
FACTS
- 17 October 1992: the Department of Labor and Employment
(DOLE), Iligan District Office, conducted a routine inspection in
the premises of San Miguel Corporation (SMC) in Sta. Filomena,
Iligan City. In the course of the inspection, it was discovered
that there was underpayment of regular Muslim holiday pay to
its employees.
- SMC failed to submit proof that it was paying regular Muslim
holiday pay to its employees. Alan M. Macaraya, Director IV of
DOLE Iligan District Office issued a compliance order directing
SMC to consider Muslim holidays as regular holidays and to pay
both its Muslim and non-Muslim employees holiday pay within
thirty (30) days from the receipt of the order.
ISSUES
1. WON CA erred in granting non-Muslim employees Muslim
holiday pay
2. WON Macaraya and Español have jurisdiction in issuing
compliance orders over said labor standard case
HELD
1. NO
A2010 - 147 - Disini
Ratio Wages and other emoluments granted by law to the
working man are determined on the basis of the criteria laid
down by laws and certainly not on the basis of the worker’s
faith or religion.
Reasoning
- Muslim holidays are provided under Articles 169 and 170, Title
I, Book V, of Presidential Decree No. 1083, otherwise known as
the Code of Muslim Personal Laws. The aforementioned
provisions should be read in conjunction with Art. 94 of the
Labor Code:
Art. 94. Right to holiday pay:
(a) Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any
holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; x x x.
- There should be no distinction between Muslims and non-
Muslims as regards payment of benefits for Muslim holidays.
Petitioner asserts that Article 3(3) of Presidential Decree No.
1083 provides that “(t)he provisions of this Code shall be
applicable only to Muslims x x x.” However, said article also
declares that “x x x nothing herein shall be construed to
operate to the prejudice of a non-Muslim.”
1999 Handbook on Workers’ Statutory Benefits:
“Considering that all private corporations, offices, agencies, and
entities or establishments operating within the designated
Muslim provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the Muslim
areas may not report for work on the days designated by law as
Muslim holidays.”
- As regards the allegation that the issue on Muslim holiday pay
was already resolved in Napoleon E. Fernan vs. San Miguel
Corporation Beer Division and Leopoldo Zaldarriaga, the Court
notes that the case was primarily for illegal dismissal and the
claim for benefits was only incidental to the main case.
2. YES
- Regional Director Macaraya acted as the duly authorized
representative of the Secretary of Labor and Employment and it
was within his power to issue the compliance order to SMC.
Reasoning
- Article 128. Visitorial and enforcement power.
(b) Notwithstanding the provisions of Article 129 and 217 of
this Code to the contrary, and in cases where the relationship
of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have
the power to issue compliance orders to give effect to the
labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in
the course of the inspection.
- Petitioner merely contends that its non-Muslim employees are
not entitled to Muslim holiday pay. The issue could be resolved
even without documentary proofs. In any case, there was no
indication that Regional Director Macaraya failed to consider
any documentary proof presented by SMC in the course of the
inspection.
Disposition The petition is dismissed.
ASIAN TRANSMISSION CORP V CA (BISIG NG ASIAN
TRANSMISSION LABOR UNION)
[PAGE 45]
7.02 HOLIDAYS
Labor Law 1
7.03 HOLDAY PAY
FACULTY PRIVATE SCHOOL
JOSE RIZAL COLLEGE V NLRC
156 SCRA 27
PARAS; 1987
NATURE
- Petition for certiorari with preliminary injunction to review the
decision of the National Labor Relations Commission
FACTS
- Petitioner is a non-stock, non-profit educational institution duly
organized and existing under the laws of the Philippines. It has
three groups of employees categorized as follows: (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 per schedule.
- Unable to receive their corresponding holiday pay, as claimed,
from 1975 to 1977, private respondent National Alliance of
Teachers and Office Workers (NATOW) in behalf of the faculty
and personnel of Jose Rizal College filed with the Ministry of
Labor a complaint against the college for said alleged non-
payment of holiday pay
- After the parties had submitted their respective position
papers, the Labor Arbiter rendered a decision on February 5,
1979:
1. The faculty and personnel of the respondent Jose Rizal
College who are paid their salary 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;
2. The personnel of the respondent Jose Rizal College 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;
3. Collegiate faculty of the respondent Jose Rizal College 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.
- On appeal, respondent National Labor Relations Commission in
a decision promulgated on June 2, 1982, modified the decision
appealed from, in the sense that teaching personnel paid by the
hour are declared to be entitled to holiday pay
ISSUE
WON the school faculty who according to their contracts are
paid per lecture hour are entitled to unworked holiday pay
HELD
NO (for regular holidays)/YES(for special holidays)
- Labor Arbiter sustains the view that said instructors and
professors are not entitled to holiday pay, his decision was
modified by the National Labor Relations Commission holding
the contrary. Petitioner maintains the position among others,
that it is not covered by Book V of the Labor Code on Labor
A2010 - 148 - Disini
Relations considering that it is a non-profit institution and that
its hourly paid faculty members are paid on a "contract" basis
because they are required to hold classes for a particular
number of hours. In the programming of these student contract
hours, legal holidays are excluded and labelled 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 programmed number of lecture hours
is not diminished.
- The Solicitor General on the other hand, argues that under
Article 94 of the Labor Code, holiday pay applies to all
employees except those in retail and service establishments. To
deprive therefore employees paid at an hourly rate of unworked
holiday pay is contrary to the policy considerations underlying
such presidential enactment, apart from the constitutional
mandate to grant greater rights to labor. And under Article 94
of the Labor Code, the petitioner, although a nonprofit
institution is under obligation to give pay even on unworked
regular holidays to hourly paid faculty members subject to the
terms and conditions provided for therein.
- 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.
- 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.
Otherwise stated, the faculty member, although forced to take
a rest, does not earn what he should earn on that day. Be it
noted that when a special public holiday is declared, the faculty
member paid by the hour is deprived of expected income, and it
does not matter that the school calendar is extended in view of
the days or hours lost, for their income that could be earned
from other sources is lost during the extended days. Similarly,
when classes are called off or shortened on account of
typhoons, floods, rallies, and the like, these faculty members
must likewise be paid, whether or not extensions are ordered.
Disposition Decisions set aside. New decision rendered:
(a) exempting petitioner 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) but ordering petitioner 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.
DIVISOR AS FACTOR
UNION OF FILIPRO EMPLOYEES V VIVAR
[PAGE 122]
TRANSASIA PHILS EMPLOYER ASSN V NLRC
(TRANS ASIA, DE CASTRO)
320 SCRA 547
KAPUNAN; December 13, 1999
Labor Law 1
NATURE
Petition for certiorari
FACTS
- On 7 July 1988, Trans-Asia Philippines Employees Association
(TAPEA), entered into a Collective Bargaining Agreement with
their employer. The CBA, provided for, the payment of holiday
pay with a stipulation that if an employee is permitted to work
on a legal holiday, the said employee will receive a salary
equivalent to 200% of the regular daily wage plus a 60%
premium pay.
- Despite the conclusion of the CBA, an issue was still left
unresolved with regard to the claim of TAPEA for payment of
holiday pay covering the period from January of 1985 up to
December of 1987.
- The parties underwent preventive mediation meetings with a
representative from the National Mediation and Conciliation
Board
- The parties were not able to arrive at an amicable settlement.
- TAPEA filed a complaint before the labor arbiter for the
payment of their holiday pay in arrears.
- Petitioners amended their complaint to include the payment
of holiday pay for the duration of the recently concluded CBA
(from 1988 to 1991), unfair labor practice, damages and
attorney's fees.
- Petitioners contend:
> their claim for the holiday pay in arrears is based on the non-
inclusion of the same in their monthly pay. First, petitioners
presented Trans-Asia's Employees' Manual which requires, that
the employee should have worked or was on authorized leave
with pay on the day immediately preceding the legal holiday.
They argued that if the intention of Trans-Asia was not to pay
holiday pay in addition to the employee's monthly pay, then
there would be no need to impose or specify the pre-condition
for the payment. Second, petitioners proffered as evidence their
appointment papers which do not contain any stipulation on the
inclusion of holiday pay in their monthly salary. Third,
petitioners noted the inclusion of a provision in the CBA for the
payment of an amount equivalent to 200% of the regular daily
wage plus 60% premium pay to employees who are permitted
to work on a regular holiday. Finally, petitioners cited the
current CBA provision which obligates Trans-Asia to give holiday
pay.
> Trans-Asia is guilty of bad faith in negotiating and executing
the current CBA since, after it recognized the right of the
employees to receive holiday pay, Trans-Asia allegedly refused
to honor the CBA provision on the same.
- Respondents claim:
> Tans-Asia refuted the allegations.
> Trans-Asia asserted that the above circumstances are not
indicative of its non-payment of holiday pay since it has always
honored the labor law provisions on holiday pay by
incorporating the same in the payment of the monthly salaries
of its employees. In support of this claim, Trans-Asia pointed out
that it has long been the standing practice of the company to
use the divisor of "286" days in computing for its employees'
overtime pay and daily rate deductions for absences.
> Trans-Asia further clarified that the "286" days divisor already
takes into account the ten (10) regular holidays in a year since
it only subtracts from the 365 calendar days the unworked and
unpaid 52 Sundays and 26 Saturdays
> Trans-Asia claimed that if the ten (10) regular holidays were
not included in the computation of their employee's monthly
salary, the divisor which they would have used would only be
277.
> Furthermore, Trans-Asia explained that the "286" days
divisor is based on Republic Act No. 6640 wherein the divisor of
262 days is used in computing for the monthly rate of workers
who do not work and are not considered paid on Saturdays and
Sundays or rest days.
- On the second contention of the petitioners, Trans-Asia
explained that this holiday pay rate was included in the CBA in
A2010 - 149 - Disini
order to comply with Section 4, Rule IV, Book III of the Omnibus
Rules Implementing the Labor Code:
Sec. 4. Compensation for holiday work. - Any employee who
is permitted or suffered to work on any regular holiday, not
exceeding eight (8) hours, shall be paid at least two hundred
percent (200%) of his regular daily wage. If the holiday falls
on the scheduled rest day of the employee, he shall be
entitled to an additional premium pay of at least 30% of his
regular holiday rate of 200% based on his regular wage rate.
- On the contention that Trans-Asia's acquiescence to the
inclusion of a holiday pay provision in the CBA is an admission
of non-payment of the same in the past, Trans-Asia reiterated
that it is simply a recognition of the mandate of the Labor Code
that employees are entitled to holiday pay.
- With regard to the accusation of unfair labor practice, Trans-
Asia explained that what petitioners would like the company to
do is to give double holiday pay since, as previously stated, the
company has already included its employees monthly salary
and, yet, petitioners want it to pay a second set of holiday pay.
- On 13 February 1989, the labor arbiter rendered a decision
dismissing the complaint
- Petitioners appealed to the National Labor Relations
Commission. In its Resolution, dated 23 November 1993, the
NLRC dismissed the appeal and affirmed the decision of the
labor arbiter
- Petitioners' motion for reconsideration was, likewise, denied
by the NLRC in its Resolution, dated 13 September 1994.
ISSUES
1. WON NLRC erred in upholding the labor arbiter’s decision
2. WON NLRC violated the constitutional and legal mandate to
resolve all doubts in social legislation in favor of labor
HELD
1. NO
- Trans-Asia's inclusion of holiday pay in petitioner's monthly
salary is clearly established by its consistent use of the divisor
of "286" days in the computation of its employees' benefits and
deductions. The use by Trans-Asia of the "286" days divisor was
never disputed by petitioners.
- Nevertheless, petitioners' cause is not entirely lost. The Court
notes that there is a need to adjust the divisor used by Trans-
Asia to 287 days, instead of only 286 days, in order to properly
account for the entirety of regular holidays and special days in a
year as prescribed by Executive Order No. 203 in relation to
Section 6 of the Rules Implementing Republic Act 6727. Section
1 of Executive Order No. 203 provides:
SECTION 1. Unless otherwise modified by law, order or
proclamation, the following regular holidays and special days
shall be observed in the country:
A.Regular Holidays
New Year's Day Maundy Thursday Good Friday Araw ng
Kagitingan (Bataan & Corregidor Day) Labor Day
Independence Day National Heroes Day Bonifacio Day
Christmas Day Rizal Day -January 1 -Movable Date
-Movable Date -April 9 -May 1 -June 12 -Last Sunday of August
-November 30 -December 25 -December 30
B.Nationwide Special Days
All Saints Day Last Day of the Year -November 1
-December 31
- On the other hand, Section 6 of the Implementing Rules and
Regulations of Republic Act No. 6727 provides that the total
number of working days is 262 days (see original for the
formula and computation)
- In the present case, since the employees of Trans-Asia are
required to work half-day on Saturdays, 26 days should be
added to the divisor of 262 days, thus, resulting to 288 days.
However, due to the fact that the rest days of petitioners fall on
a Sunday, the number of unworked but paid legal holidays
should be reduced to nine (9), instead of ten (10), since one
legal holiday under E.O. No. 203 always falls on the last Sunday
of August, National Heroes Day. Thus, the divisor that should be
used in the present case should be 287 days.
Labor Law 1
- However, the Court notes that if the divisor is increased to 287
days, the resulting daily rate for the purposes of overtime pay,
holiday pay and conversions of accumulated leaves would be
diminished.
- Clearly, this muddled situation would be violative of the
proscription on the non-diminution of benefits under Section
100 of the Labor Code. On the other hand, the use of the divisor
of 287 days would be to the advantage of petitioners if it is
used for purposes of computing for deductions due to the
employee's absences. In view of this situation, the Court rules
that the adjusted divisor of 287 days should only be used by
Trans-Asia for computations which would be advantageous to
petitioners and not for computations which would diminish the
existing benefits of the employees.
2. NO
- As previously stated, the decision of the labor arbiter and the
resolutions of the NLRC were based on substantial evidence
and, as such, no ambiguity or doubt exists which could be
resolved in petitioner's favor.
Disposition Affirmed with modification (on the divisor that
Trans- Asia should use in computing the salaries of its
employees including holiday pay)
COMPUTATION
AGGA V NLRC (SUPPLY OILFIELD SERVICES INC,
UNDERSEAS DRILLING INC)
298 SCRA 285
PUNO; November 16, 1998
NATURE
Petition for Certiorari
FACTS
- Private respondent Supply Oilfield Services, Inc. hired
petitioners to work on board a drillship owned and operated by
private respondent Underseas Drilling, Inc.
- The employment contracts ran for one year with petitioners
enjoying two months off with pay for every two months' duty.
The contracts also provided that for service of 12 hours a day, 7
days a week in a two-shift 24-hour operation, petitioners would
receive a fixed monthly compensation covering "basic rate,
allowances, privileges, travel allowances and benefits granted
by law during and after employment with the company."
- Petitioners claim:
> private respondents failed to pay them overtime pay, holiday
pay, rest day pay, 13th month pay and night shift differential.
They likewise alleged that private respondents did not comply
with the mandatory insurance requirement. They further
averred that while private respondents made them use
passports for overseas contract workers, they were also
instructed to use seaman's books upon reaching port for
transfer to, and while aboard, the oilrig. Petitioners opined that
this practice entitled them to the benefits granted by law to
both land-based workers and seamen.
- Respondents contend:
> denied liability. In addition, they alleged that petitioners were
insured with Blue Cross (Asia-Pacific) Insurance, Ltd. against
death and permanent disability. Lastly, private respondents
contended that petitioners, as offshore oilriggers, had nothing
to do with manning a vessel or sea navigation. Hence,
petitioners were merely land-based workers, not seamen.
- On July 2, 1992, the POEA dismissed petitioners' complaint for
lack of merit.
- Petitioners appealed to the National Labor Relations
Commission.
- Upon the other hand, private respondents informed the NLRC
that the POEA had already dismissed the claims for
underpayment of labor benefits and lack of insurance coverage
in the consolidated cases, and that the dismissal was affirmed
on appeal. The decision has become final.
A2010 - 150 - Disini
- On November 27, 1995, the respondent NLRC promulgated
the Decision assailed herein, dismissing petitioners' appeal.
- In an appeal dated February 26, 1993, the complainants
questioned the aforesaid decision.
- On January 17, 1996, petitioners filed a motion for
reconsideration. In an Order 4 dated January 30, 1996, the
respondent NLRC denied petitioners' motion.
ISSUES
1. WON respondent NLRC acted without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack
or excess jurisdiction in not declaring that the lumpsum mode
of payment of petitioners’ monthly salaries by private
respondents is illegal
2. WON respondent NLRC erred in not ordering private
respondents, jointly and severally, to pay the admitted
underpayment as shown by private respondents’ computation
3. WON respondent NLRC erred in not ordering the POEA to
comply with its mandated duty to set up standard employment
contract and guiding rates for oilrig workers
4. WON respondent NLRC erred in not declaring that private
respondents failed to comply with the legal requirement of
mandatory personal insurance
5. WON respondent NLRC erred in not penalizing private
respondent
6. WON respondent NLRC erred in not awarding damages and
attorney’s fees to petitioners
HELD
1. NO
- Petitioners contend that the lumpsum mode of payment of
salaries is illegal, citing Articles 5 and 6 of the New Civil Code,
Articles 86, 87, 90, 93 and 94 of PD 442 and Book V, Rule II,
Section 2(a) of the 1991 POEA Rules.
- As correctly observed by the respondents, none of the
aforementioned laws and rules prohibit the subject payment
scheme. The cited articles of the New Civil Code merely provide
that agreements in violation of law or public policy cannot be
entered into and have legal effect. The cited provisions of PD
442 simply declare that night shift differential and additional
remuneration for overtime, rest day, Sunday and holiday work
shall be computed on the basis of the employee's regular wage.
In like fashion, the 1991 POEA Rules merely require employers
to guarantee payment of wages and overtime pay. Thus,
petitioners' stance is bereft of any legal support.
2. NO
- Petitioners allege that their fixed monthly salaries represented
only their basic salaries and did not include overtime pay,
holiday pay, 13th month pay and night shift differential.
- Decisions and/or awards of the Administration shall be final
and executory unless appealed to the National Labor Relations
Commission (NLRC) by any or both parties, it then follows that ,
to the extent that the POEA has concluded that there is 'no case
of underpayment at bar,' the same has to be bindingly observed
by us vis-a-vis complainants' submitted issue in their draft
decision of whether or not there had been underpayments as
claimed by appellants under the provisions of P.D. 442.
3. NO
- The matter of ordering the NLRC to compel the POEA to set up
standard employment contract and guiding rates for oilrig
workers is beyond the jurisdiction of this Court.
4. NO
- The POEA and the NLRC have found that private respondents
insured petitioners with Blue Cross (Asia-Pacific) Insurance, Ltd.
under two policies which even provide for coverage superior to
that mandated by the rules. Before this Court, however,
petitioners assail these insurance policies as they were
allegedly issued by a foreign insurance company not licensed to
do business in the Philippines. The contention is raised for the
first time and cannot be considered.
5. NO
- Evidence shows that petitioners are land-based workers and
hence, not entitled to benefits appertaining to sea-based
workers. Petitioners have nothing to do with manning vessels or
with sea navigation. Their use of a seaman's book does not
Labor Law 1
detract from the fact that they are truly land-based employees.
Petitioners' plea that we suspend SOS' license for making them
use two (2) passports is off-line. Again, they never prayed for
this relief before the POEA and the NLRC. This Court is the
improper venue for the belated plea.
6. NO
- The claims for attorney's fees and damages of the petitioners
have no basis as private respondents did not act in bad faith or
with malice.
Disposition assailed decision of NLRC affirmed.
SUNDAY
WELLINGTON INVESTMENT V TRAJANO
245 SCRA 561
NARVASA; July 3, 1995
NATURE
Special Civil Action for Certiorari
FACTS
- A labor Enforcement Officer conducted a routine inspection of
the Wellington Flour Mills, owned and operated by Wellington
Investment and Manufacturing Corporation, and reported the
non-payment of regular holidays falling on a Sunday for
monthly-paid employees. A copy of the report was explained to
and received by Wellington’s personnel manager.
- Wellington sought reconsideration and argued that "the
monthly salary of the company's monthly-salaried employees
already includes holiday pay for all regular holidays and hence
there is no legal basis for the finding of alleged non-payment of
regular holidays falling on a Sunday." In a position paper
subsequently submitted to the Regional Director, it asserted
that it pays its monthly-paid employees a fixed monthly
compensation "using the 314 factor which undeniably covers
and already includes payment for all the working days in a
month as well as all the 10 unworked regular holidays within a
year."
- July 28, 1992: the Regional Director ruled that "when a regular
holiday falls on a Sunday, an extra or additional working day is
created and the employer has the obligation to pay the
employees for the extra day except the last Sunday of August
since the payment for the said holiday is already included in the
314 factor," and accordingly directed Wellington to pay its
employees compensation corresponding 4 extra working days.
- September 22: the Undersecretary affirmed the challenged
order, holding that "the divisor being used by Wellington does
not reliably reflect the actual working days in a year," and
consequently commanded Wellington to pay its employees the
"six additional working days resulting from regular holidays
falling on Sundays in 1988, 1989 and 1990." He said that
whenever a regular holiday coincides with a Sunday, an
additional working day is created and left unpaid. In other
words, while the said divisor may be utilized as proof
evidencing payment of 302 working days, 2 special days and
the ten regular holidays in a calendar year, the same does not
cover or include payment of additional working days created as
a result of some regular holidays falling on Sundays.
A2010 - 151 - Disini
ISSUE
WON a monthly-paid employee, receiving a fixed monthly
compensation, is entitled to an additional pay aside from his
usual holiday pay, whenever a regular holiday falls on a Sunday
HELD
NO
- Wellington simply deducts 51 Sundays from the 365 days
normally comprising a year and used the difference, 314, as
basis for determining the monthly salary. The monthly salary
thus fixed actually covers payment for 314 days of the year,
including regular and special holidays, as well as days when no
work is done by reason of fortuitous cause, as above specified,
or causes not attributable to the employees.
- The monthly salary in Wellington for all 365 days of a year.
The respondents' theory would make each of the years in
question, a year of 368 days. Pursuant to this theory, no
employer opting to pay his employees by the month would have
any definite basis to determine the number of days in a year for
which compensation should be given to his work force.
- There is no provision of law requiring any employer to make
such adjustments in the monthly salary rate set by him to take
account of legal holidays falling on Sundays in a given year, or,
contrary to the legal provisions bearing on the point, otherwise
to reckon a year at more than 365 days. What the law requires
of employers opting to pay by the month is to assure that "the
monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve," and
to pay that salary "for all days in the month whether worked or
not," and "irrespective of the number of working days therein."
That salary is due and payable regardless of the declaration of
any special holiday in the entire country or a particular place
therein, or any fortuitous cause precluding work on any
particular day or days (such as transportation strikes, riots, or
typhoons or other natural calamities), or cause not imputable to
the worker. The legal provisions governing monthly
compensation are evidently intended precisely to avoid re-
computations and alterations in salary on account of the
contingencies just mentioned, which, by the way, are routinely
made between employer and employees when the wages are
paid on daily basis.
Disposition The orders complained of, namely: that of the
respondent Undersecretary dated September 22, 1993, and
that of the Regional Director dated July 30, 1992, are NULLIFIED
AND SET ASIDE, and the proceeding against petitioner
DISMISSED.
PROOF OF PAYMENT
BUILDING CARE CORP V NLRC (RODIL)
268 SCRA 666
PANGANIBAN; February 26, 1997
NATURE
Petition for certiorari under rule 56 of the ROC
FACTS
- Private respondent, Rodil, a janitor under Building Care Corp.
(BCC) and working at Far East Bank and Trust Co. (FEBTC)
alleged that his wages, 13th month pay and service incentive
leave pay were unpaid; that he was not paid for work rendered
during legal holidays; that on Feb. 11, 1988 he was suspended
for a week without just cause or the requirements of due
process.
- BCC on the other hand, alleged that Rodil had been given his
wages and holiday pay and that it was willing to pay his salary
differentials from Dec. to Feb. FEBTC once complained that
Rodil had improperly cleaned his area and twice failed to report
to the night shift supervisor when instructed to do so. Also, the
suspension on Feb. 11 was erroneously noted in the logbook but
private respondent was allowed to work the next day as shown
Labor Law 1
by the time records. He came to work only a month later and,
when prompted to explain his long absence, said he had been
suspended by his supervisor for no reason and was advised to
report on April 4 to await the investigation on the alleged
suspension. FEBTC later indicated it would no longer accept
Rodil and he was advised that he was to be temporarily
assigned as reliever at BCC while no other posts were available.
When advised to report to BCC, he never appeared but instead
filed the instant case.
- Rodil maintained that he had been absent for that long period
because he had been sick, then later had to care for his wife
who also got sick, and was again absent for the last week
because he was illegally suspended.
- Rodil filed with the NLRC a complaint for illegal dismissal,
underpayment and non-payment of legal holiday pay against
petitioner. At the initial hearing, Rodil was offered
reinstatement but he insisted on payment of backwages;
petitioner did not agree, so both parties submitted their
respective position papers. The Labor Arbiter issued a decision
in favor of private respondent, hence this petition for certiorari.
ISSUE
WON NLRC erred in awarding Rodil holiday pay and salary
differentials
HELD
YES
- If BCC had really paid Rodil his holiday pay, it could easily
have presented its payrolls, which constitute the best proof of
payment. To prove payment of salary differentials, it could have
presented proofs of such monetary benefits—but it did not. It
failed to comply with the mandate of the law; as NLRC ruled,
the burden of proof in this regard lies with the employer, not
the employee.
Disposition Petition is DISMISSED and the assailed Decision is
AFFIRMED
SECTION 8: CONDITIONS OF
EMPLOYMENT – LEAVES
A. SERVICE INCENTIVE LEAVE
8.01 COVERAGE
MAKATI HABERDASHERY INC V NLRC (SANDIGAN-
TUCP AND MEMBERS GRACIANO, ET AL)
179 SCRA 449
FERNAN; November, 15 1989
FACTS
- Private respondents have been working for petitioner Makati
Haberdashery, Inc. (Haberdashery) as tailors, seamstress,
sewers, basters and "plantsadoras". They were paid on a piece-
rate basis (except two who are paid on a monthly basis). In
addition to their piece-rate, they were given a daily allowance
of P3.00 pesos provided they report for work before 9:30 a.m.
everyday. They were required to work from or before 9:30 a.m.
A2010 - 152 - Disini
to 6:00 or 7:00 p.m. Mon to Sat, and during peak periods even
on Sundays and holidays.
- The Sandigan ng Manggagawang Pilipino filed a complaint for
underpayment of the basic wage; underpayment of living
allowance; non-payment of overtime work; non-payment of
holiday pay; non-payment of service incentive pay; 13th month
pay; and benefits provided for under Wage Orders Nos. 1, 2, 3,
4 and 5.
- During the pendency of case, private respondent Pelobello left
a package w/ a salesman of the Haberdashery, w/c contained a
barong tagalog. When confronted, Pelobello said that it was
respondent Zapata’s. Zapata allegedly admitted that he copied
the design of Haberdashery. A memorandum was issued to
each of them to explain why no action should be taken against
them for accepting a job order which is prejudicial and in direct
competition with the business of the company. Both
respondents did not submit their explanation and did not report
for work. They were dismissed by petitioner. They countered by
filing a complaint for illegal dismissal.
- Labor Arbiter found Haberdashery guilty of illegal dismissal
and ordered them to reinstate Pelobello and Zapata. The charge
of unfair labor practice and claims for underpayment re
violation of the minimum wage law were dismissed for lack of
merit. And found Haberdashery to have violated the decrees on
the cost of living allowance, service incentive leave pay and the
13th Month Pay. NLRC affirmed decision.
ISSUES
1. WON an employee-employer relationship existed between
Haberdashery and respondent workers
2. WON the respondent workers were entitled to their
monetary claims (COLA, service incentive, 13th month pay, etc)
3. WON Pelobello and Zapata were illegally dismissed
HELD
1. YES
Ratio The facts at bar indubitably reveal that the most
important requisite of control is present. When a customer
enters into a contract with the haberdashery or its proprietor,
the latter directs an employee who may be a tailor, pattern
maker, sewer or "plantsadora" to take the customer's
measurements, and to saw the pants, coat or shirt as specified
by the customer. Supervision is actively manifested in all these
aspects -- the manner and quality of cutting, sewing and
ironing.
- The test of employee-employer relationship is four-fold: (1) the
selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control
the employee's conduct. It is the so-called "control test" that is
the most important element. This means the determination of
whether the employer controls or has reserved the right to
control the employee not only as to the result of the work but
also as to the means and method by which the same is to be
accomplished. - It is evident that petitioner has reserved the
right to control its employees not only as to the result but also
the means and methods by which the same are to be
accomplished. That private respondents are regular employees
is further proven by the fact that they have to report for work
regularly from 9:30 a.m. to 6:00 or 7:00 p.m. and are paid an
additional allowance of P3.00 daily if they report for work before
9:30 a.m.
- Private respondents did not exercise independence in their
own methods, but on the contrary were subject to the control of
petitioners from the beginning of their tasks to their completion.
Unlike independent contractors who generally rely on their own
resources, the equipment, tools, accessories, and paraphernalia
used by private respondents are supplied and owned by
petitioners. Private respondents are totally dependent on
petitioners in all these aspects.
2. Minimum Wage- YES; COLA – YES
- As a consequence of their status as regular employees of the
petitioners, they can claim cost of living allowance. This is
apparent from the provision defining the employees entitled to
said allowance, thus: ". . . All workers in the private sector,
Labor Law 1
regardless of their position, designation or status, and
irrespective of the method by which their wages are paid."
13th Month Pay – YES
- Section 3(e) of the Rules and Regulations Implementing P.D.
No. 851 provides: " The Decree shall apply to all employers
except to:
xxx xxx xxx
(e) Employers of those who are paid on purely commission,
boundary, or task basis, and those who are paid a fixed
amount for performing a specific work, irrespective of the
time consumed in the performance thereof, except where
the workers are paid on piece-rate basis in which case the
employer shall be covered by this issuance insofar as such
workers are concerned."
SERVICE INCENTIVE LEAVE PAY – NO
- While private respondents are entitled to Minimum Wage,
COLA and 13th Month Pay, they are not entitled to service
incentive leave pay because as piece-rate workers being
paid at a fixed amount for performing work irrespective
of time consumed in the performance thereof, they fall
under one of the exceptions stated in Section 1(d), Rule
V, Implementing Regulations, Book III, Labor Code. (pls
see provision)
Holiday Pay- NO.
- Private respondents cannot also claim holiday pay under
Section 1(e), Rule IV, Implementing Regulations, Book III, Labor
Code.
3. NO
- Haberdashery had valid grounds to terminate the services of
private respondents.
- It does show that a violation of the employer's rules has been
committed and the evidence of such transgression, the copied
barong tagalog, was in the possession of Pelobello who pointed
to Zapata as the owner. When required by their employer to
explain in a memorandum issued to each of them, they not only
failed to do so but instead went on AWOL, waited for the period
to explain to expire and for petitioner to dismiss them.
Assuming that such acts do not constitute abandonment of their
jobs as insisted by private respondents, their blatant disregard
of their employer's memorandum is undoubtedly an open
defiance to the lawful orders of the latter, a justifiable ground
for termination of employment by the employer expressly
provided for in Article 283(a) of the Labor Code as well as a
clear indication of guilt for the commission of acts inimical to
the interests of the employer, another justifiable ground for
dismissal under the same Article of the Labor Code, paragraph
(c). Well established in our jurisprudence is the right of an
employer to dismiss an employee whose continuance in the
service is inimical to the employer's interest.
- We have ruled that:
"No employer may rationally be expected to continue in
employment a person whose lack of morals, respect and
loyalty to his employer, regard for his employer's rules, and
appreciation of the dignity and responsibility of his office, has
so plainly and completely been bared.
"That there should be concern, sympathy, and solicitude for
the rights and welfare of the working class, is meet and
proper. That in controversies between a laborer and his
master, doubts reasonably arising from the evidence, or in
the interpretation of agreements and writings should be
resolved in the former's favor, is not an unreasonable or
unfair rule. But that disregard of the employer's own rights
and interests can be justified by that concern and solicitude is
unjust and unacceptable." (Stanford Microsystems, Inc. v.
NLRC, 157 SCRA 414-415 [1988]).
- The law is protecting the rights of the laborer authorizes
neither oppression nor self-destruction of the employer. More
importantly, while the Constitution is committed to the policy of
social justice and the protection of the working class, it should
not be supposed that every labor dispute will automatically be
decided in favor of labor.
- The right to dismiss or otherwise impose disciplinary sanctions
upon an employee for just and valid cause, pertains in the first
place to the employer, as well as the authority to determine the
A2010 - 153 - Disini
existence of said cause in accordance with the norms of due
process.
8.02 ENTITLEMENT AND
ARBITRATION
8.03 COMPUATION AND
LIABILITY
SENTINEL SECURITY AGENCY INC V NLRC
(CABANO)
295 SCRA 123
PANGANIBAN; September 3, 1998
FACTS
- The complainants were employees of Sentinel Security
Agency, Inc. They were assigned to render guard duty at the
premises of [Philippine American Life Insurance Company] at
Jones Avenue, Cebu City. On December 16, 1993 Philippine
American Life Insurance Company [‘the Client,’ ], sent notice to
all concerned that the [Agency] was again awarded the contract
of security services together with a request to replace all the
security guards in the company’s offices at the cities of Cebu,
Bacolod, Cagayan de Oro, Dipolog and Ilagan. In compliance
therewith, [the Agency] issued a Relief and Transfer Order
replacing the complainants as guards [of the Client] and for
then to be re-assigned to other clients. As ordered, the
complainants reported but were never given new assignments
but instead they were told that ‘they were replaced because
they are already old.’ Precisely, the complainants lost no time
but filed the subject illegal dismissal cases and prayed for
payment of separation pay and other labor standard benefits.
- Defendant’s Comment
"[The Client and the Agency] maintained there was no dismissal
on the part of the complainants, constructive or otherwise, as
they were protected by the contract of security services which
allows the recall of security guards from their assigned posts at
the will of either party. It also advanced that the complainants
prematurely filed the subject cases without giving the [Agency]
a chance to give them some assignments.
- “On the part of [the Client], it averred further that there [was]
no employer-employee relationship between it and the
complainants as the latter were merely assigned to its Cebu
Branch under a job contract; that [the Agency] ha[d] its own
separate corporate personality apart from that of [the Client].
Besides, it pointed out that the functions of the complainants in
providing security services to [the Client’s] property [were] not
necessary and desirable to the usual business or trade of [the
Client], as it could still operate and engage in its life insurance
business without the security guards. In fine, [the Client]
maintains that the complainants have no cause of action
against it."
ISSUES
1. WON the complainants were illegally dismissed
2. WON the Client is jointly and severally liable for their
thirteenth-month and service incentive leave pays
HELD
1. YES
Ratio The transfer of an employee involves a lateral movement
within the business or operation of the employer, without
demotion in rank, diminution of benefits or, worse, suspension
of employment even if temporary. The recall and transfer of
security guards require reassignment to another post and are
not equivalent to their placement on "floating status." Off-
detailing security guards for a reasonable period of six months
Labor Law 1 A2010 - 154 - Disini
is justified only in bona fide cases of suspension of operation,
business or undertaking.
Reasoning
a. The legally recognized concept of transfer was not
implemented. The agency hired new security guards to replace
the complainants, resulting in a lack of posts to which the
complainants could have been reassigned. Thus, it refused to
reassign Complainant Andoy when he reported for duty on
February 2, 4 and 7, 1994; and merely told the other
complainants on various dates from January 25 to 27, 1994 that
they were already too old to be posted anywhere.
b. A floating status requires the dire exigency of the employer’s
bona fide suspension of operation, business or undertaking. In
security services, this happens when the clients that do not
renew their contracts with a security agency are more than
those that do and the new ones that the agency gets. However,
in the case at bar, the Agency was awarded a new contract by
the Client. There was no surplus of security guards over
available assignments. If there were, it was because the Agency
hired new security guards. Thus, there was no suspension of
operation, business or undertaking, bona fide or not, that would
have justified placing the complainants off-detail and making
them wait for a period of six months. If indeed they were merely
transferred, there would have been no need to make them wait
for six months.
(2) The Client did not, as it could not, illegally dismiss the
complainants. Thus, it should not be held liable for separation
pay and back wages. But even if the Client is not responsible for
the illegal dismissal of the complainants, it is jointly and
severally liable with the Agency for the complainants’ service
incentive leave pay.
Disposition The petition is DISMISSED and the assailed
Decision and Resolution are hereby AFFIRMED, but the award of
the thirteenth-month pay is DELETED.

AUTO BUS TRANSPORT SYSTEMS INC V BAUTISTA

[PAGE 123]