2000 CASES
Q: X had been working for a year as a
security guard with company A., a sister
company of company B. He was hired on
January 1, 1988 as he was among those
absorbed by company B when it took over
the security contracts of its sister company
A. He was forced by company B to sign a
new probationary contract for 6 mos; and on
August 1, 1988, his employment was
terminated for allegedly sleeping on post and
quarreling with a co-worker. Was B a regular
employee and thereby illegally dismissed?
A: Yes. Bs employment with company B was
just a continuation of his employment with
company A. The Court cannot sanction the
practice of companies that effects the
transfer of its employees to another entity
whose owners are the same, in order to
deprive subject employees of the benefits he
is entitled to under the law. Nevertheless, B
attained the status of a regular employee
with company B upon completion of his six-
month period of probation. He started
working on January 30, 1988; and the end of
the period of probation was on July 27, 1988.
When he was dismissed on August 1, he was
already a regular employee with a security of
tenure. Private respondents alleged
violations were first infractions and do not
amount to valid grounds for terminating
employment. (A Prime Security Services, Inc.
v. NLRC, G.R. 107320, January 19, 2000)
Q: KMDD-CFW is a union whose CBA with the
company A expired. During renegotiations,
the management panel arrived late causing
the union panel to walk out. The
management addressed a letter of apology
to the union and requested for negotiations
to resume. The union panel did not show up
despite letters from management advising
the former of the CBA meetings.
Consequently, the union struck. A complaint
was filed by Golden Donuts to declare the
strike illegal. Counsel for the union strikers
pleaded for a compromise whereupon a 257
out of 262 members agreed to a compromise
settlement whereby they shall be paid
separation pay in exchange for the dismissal
of the criminal and unfair labor practice
cases filed by petitioners against them.
Could the union compromise or waive the
rights to security of tenure and money claims
of its minority members, without the latters
consent?
A: No. Absent a showing of the unions
special authority to compromise the
individual claims of private respondents for
reinstatement and backwages, there is no
valid waiver of the aforesaid rights. The
judgment of the Labor Arbiter upholding the
dismissal of private respondents based on
the compromise agreement does not have
the effect of res judicata those who did not
agree thereto since the requirement of
identity of parties is not satisfied. A
judgment upon a compromise agreement is
conclusive only upon parties thereto and
their privies. Private respondents have not
waived their right to security of tenure nor
can they be barred from entitlement of their
individual claims. Since there was no
evidence that private respondents
committed any illegal act, petitioners failure
to reinstate them after the settlement of the
strike amounts to illegal dismissal. (Golden
Donuts, Inc. v. NLRC, G.R. Nos. 113666-68,
January 19, 2000)
Q: Union A, of which X was a part, filed with
the DOLE a notice of strike raising charges of
ULP and illegal dismissal against Company A.
The Labor Arbiter ordered Company A to pay
X separation pay of month pay for every
year of service. X filed a motion for
execution of the decision of the Labor
Arbiter. The Rehabilitation Receiver of
Company A submitted a Manifestation with
Motion, alleging that petitioner was not yet in
a position to comply with the directive of the
Labor Arbiter as it was still under
Rehabilitation Receivership by virtue of the
order of the SEC. However, the Labor Arbiter
still granted the motion for execution.
Company A contends that the NLRC should
have denied the order of the LA for the
immediate payment of separation pay
because of the order of the SEC suspending
all claims against petitioner pending before
any court, tribunal or body. Can the order of
the SEC stay the execution of judgment
against petitioner?
A: No. Although a stay of execution may be
warranted by the fact that a petitioner
corporation has been placed under
rehabilitation receivership, the SEC already
issued an order approving the rehabilitation
plan of petitioner and placing it under
liquidation pursuant to PD 902-A. Since
receivership proceedings have ceased and
petitioners rehabilitation receiver and
liquidator has been given the imprimatur to
proceed with corporate liquidation, the cited
order of the SEC has been rendered functus
oficio. Petitioners monetary obligation to
private respondent is long overdue and thus
cannot delay the satisfaction of private
respondents claim. However, due to events
subsequent to the filing of this petition,
private respondent must present its claim
with the rehabilitation receiver and liquidator
in the SEC, subject to the rules on preference
of credits. (Alemars Sibal & Sons, Inc. v.
NLRC, G.R. No. 114761, January 19, 2000)
Q: X was employed as a quality control
inspector with the duty of inspecting LPB
cylinders for any possible defects. He was
dismissed when he was allegedly caught by
petitioners company President for sleeping
on the job, thereby violating Company Rule
15-b. He was asked to explain why no
disciplinary action should be taken against
him, to which he promptly replied.
Notwithstanding his reply, he was
terminated. Was X illegally dismissed?
A: Yes. Petitioners claim that private
respondent slept on the job was not
substantiated by any evidence. In other
cases, sleeping on the job was found as a
valid ground for dismissal because such
cases involved security guards whose duty
necessitates that they be awake and
watchful at all times, such is not the degree
of discipline required of a quality control
inspector. While an employer is allowed a
wide discretion in the promulgation of
company policies, such should always be fair
and reasonable. In this case, the dismissal
meted out on private respondent for sleeping
on the job appears to be too harsh a penalty.
(VH Manufacturing, Inc. v. NLRC, G.R. No.
130957, January 19, 2000)
Q: Company Y is engaged in road
construction projects of the government. It
engaged the services of certain workers to
work on various projects on different dates.
Several of its workers joined Union A as
members. Union A filed a motion for
certification election with the regional office.
Company Y opposed stating that the workers
were project employees and not qualified to
form part of the rank and file collective
bargaining unit. Later, Company Y
terminated the employment of the workers
due to the completion of its projects or the
expiration of workers contracts. The
affected workers claimed they were
dismissed because of their union activities;
and thus staged a strike. The strike was
declared illegal and the workers were
deemed to have lost their employment
status. Were the workers validly dismissed?
A: Yes. The contracts of employment of
petitioners attest to the fact that they were
hired for specific projects and their
employment was coterminous with the
completion of the project for which they had
been hired. Also, they were informed in
advance that said project or undertaking for
which they were hired would end on a stated
or determinable date. Since the workers
were project employees, their employment
legally ended upon completion of their
respective projects. (Association of Trade
Unions v. Abella, G.R. No. 100518, January
24, 2000.
Q: Company K allowed the temporary
transfer holding of office at Kalibo, Aklan.
Nevertheless, majority of the employees
continued to work at its office in Lezo Aklan
and were paid their respective salaries. From
June 1992 to March 1993, X and Y reported
to work at the Lezo office and were not paid
their salaries. From March up to the present,
they were again allowed to draw their
salaries. It is the assertion of Company K
that X and Y voluntarily abandoned their
work assignments and that they defied the
lawful orders by the General manager and
thus the Board of Directors passed a
resolution resisting and denying X and Ys
claims under the principle of no work, no
pay. X and Y interpose that the transfer to
Kalibo was illegal. Are X and Y entitled to
claim their unpaid wages from June 1992 to
March 1993?
A: No. Petitioner was able to show that
private respondents did not render services
during the stated period. X and Y even
admitted that they did not report at the
Kalibo office, as Lezo remained to be their
office where they continuously reported. It
was not for X and Y to declare the
managements act of transferring the office
to Kalibo as an illegal act as there was no
allegation of proof that such was made in
bad faith or with malice. Private respondents
were dismissed by petitioner effective
January 1992 and were accepted back,
subject to the condition of no work, no pay
effective March 1993 which is why they were
allowed to draw their salaries again. (Aklan
Electric Cooperative Incorporated v. NLRC,
G.R. 121439, January 25, 2000)
Q: A was hired by Isetann Department Store
as a security checker to apprehend
shoplifters. As a cost-cutting measure,
private respondent decided to phase out its
security section and engage the services of
an independent security agency. A was then
terminated prompting him to file a complaint
for illegal dismissal. NLRC ordered petitioner
to be given separation pay holding that the
phase-out of the security section was a
legitimate business decision. However, A
was denied the right to be given written
notice before termination of his employment.
What is the effect of violation of the notice
requirement when termination is based on
an authorized cause?
A: The dismissal is ineffectual. In termination
of employment under Art. 283, the violation
of notice requirement is not a denial of due
process as the purpose is not to afford the
employee an opportunity to be heard on any
charge against him, for there is none. The
purpose is to give him time to prepare for
the eventual loss of his job and the DOLE to
determine whether economic causes do exist
justifying the termination of his employment.
With respect to Art. 283, the employers
failure to comply with the notice requirement
does not constitute a denial of due process
but a mere failure to observe a procedure for
the termination of employment which makes
the termination of employment merely
ineffectual.
If the employees separation is without
cause, instead of being given separation pay,
he should be reinstated. In either case,
whether he is reinstated or given separation
pay, he should be paid full backwages if he
has been laid off without written notice at
least 30 days in advance.
With respect to dismissals under 282, if he
was dismissed for any of the just causes in
282, he should not be reinstated. However,
he must be paid backwages from the time
his employment was terminated until it is
determined that the termination is for a just
cause because the failure to hear him
renders the termination of his employment
without legal effect. (Serrano v. NLRC, G.R.
No. 117040, January 27, 2000)
Q: A was employed as housekeeper with
Company B. He also owned a car-for-hire
which he rented to B who operated the car
as a taxi. One day, B approached the front
desk clerk at petitioners hotel requesting a
collectible of P2000 be added to a certain
Korean guests, Mr. Hus bill. Mr. Hu later
complained that he was overbilled. A
explained his side being the front desk
supervisor and owner of the car. Eventually,
Company Bs staff confirmed the error and
refunded the amount to the Korean.
Company B terminated the services of A on
the ground of loss of confidence for the
latters malicious intent to defraud a guest of
the hotel. Was A illegally dismissed?
A: Yes. Company B failed to prove by ample
evidence that A intended to defraud Mr. Hu.
The front desk clerk admitted being the one
responsible for entering the P2000 in Mr.
Hus statement of account. Also, B admitted
approaching the front desk clerk to demand
payment of the transportation fee as he was
hired by Mr. Hus group for two days
believing in good faith that Mr. Hu owed him
P2000. As there is no valid and just cause, he
is entitled to reinstatement without loss of
seniority rights plus full backwages and other
benefits withheld from him up to the time of
his actual reinstatement. (Condo Suite Club
Travel, Inc. v. NLRC, G.R. No. 125671, January
28, 2000)
Q: Union A and Company B were faced with a
bargaining deadlock. The union then filed a
notice of strike with the NCMB. Later, the
union conducted a strike vote among its
members and the results were submitted to
the Alliance of Nationalist and Genuine labor
Organization for submission to the NCMB,
but which was not made. The union went on
strike without the report of the strike vote
submitted to the NCMB. Company B filed a
petition to declare the strike illegal alleging
that the union barricaded gates of Company
B and committed acts of violence, threats
and coercion. Trial on the merits was
conducted wherein Company B presented
witnesses and evidence, Union A did not
present any witness but instead relied on
their Memorandum contending that
respondents evidence are inadmissible. Was
the strike illegal?
A: Yes. Failure to submit the strike vote to the
NCMB immediately makes the strikek illegal.
The illegality of the strike is further affirmed
by the acts of violence, threats and coercion
committed during the strike. The
requirements of procedural due process were
complied with as both parties were allowed
to present their witnesses and evidence,
although petitioner opted instead to file a
memorandum. (Samahan ng Manggagawa sa
Moldex Products, Inc. v. NLRC, G.R. No.
119467, February 1, 2000)
Q: V was hired by RFC as sales
representative. He avers that he was
transferred by RFC to PMCI, an agency which
provides RFC with additional contractual
workers. In PMCI, he was reassigned to RFC
as sales representative and then later
informed by the personnel manager of RFC
that his services were terminated. RFC
maintains that no employer-employee
relationship existed between V and itself. V
filed complaint for illegal dismissal. RFC
alleges that PMCI is an independent
contractor as the latter is a highly capitalized
venture. Was V a regular employee of RFC,
thereby illegally dismissed?
A: Yes. PMCI was a labor-only contractor.
Although the Neri doctrine stated that it was
enough that a contractor had substantial
capital to show it was an independent
contractor, the case of Fuji Xerox clarified the
doctrine stating that an independent
business must undertake the performance of
the contract according to its own manner
and method free from the control of the
principal. In this case, PMCI did not even
have substantial capitalization as only a
small amount of its authorized capital stock
was actually paid-in. Furthermore, PMCI did
not carry on an independent business or
undertake the performance of its contract
according to its own manner and method nor
was it engaged to perform a specific and
special job or service. In labor-only
contracting, the employees supplied by the
contractor perform activities, which are
directly related to the main business of its
principal. It is clear that in this case, the
work of petitioner as sales representative
was directly related to the business of RFC.
Due to Vs length of service, he had attained
the status of regular employee and thus
cannot be terminated without just or valid
cause. RFC failed to prove that his dismissal
was for cause and that he was afforded
procedural due process. V is thus entitled to
reinstatement plus full backwages from his
dismissal up to actual reinstatement. (Vinoya
v. NLRC, G.R. No. 126596, February 2, 2000)
Q: B is a lady Security Guard of Company O.
She was last assigned at Vicente Madrigal
Condominium II located in Ayala Avenue,
Makati. In a memorandum, the Building
Administrator of VM Condomunium II
complained of the laxity of the guards in
enforcing security measures and requested
to reorganize the men and women assigned
to the building to induce more discipline and
proper decorum. B was then transferred
another building in Taytay, Rizal. B filed a
complaint alleging that her transfer
amounted to an unjust dismissal. Was the
transfer of B illegal?
A: No. Service-oriented enterprises adhere to
the business adage that, the customer is
always right. In the employment of
personnel, the employer has management
prerogatives subject only to limitations
imposed by law. The transfer of an
employee would only amount to constructive
dismissal when such is unreasonable,
inconvenient, or prejudicial to the employee,
and when it involves a demotion in rank or
diminution of salaries, benefits and other
privileges. In this case, the transfer was
done in good faith and in the best interest of
the business enterprise. Evidence does not
show that Company O discriminated against
B in effecting her transfer as such was done
to comply with a reasonable request. The
mere inconvenience of a new job assignment
does not by itself make the transfer illegal.
(OSS Security and Allied Services, Inc. v.
NLRC, G.R. No. 112752, February 9, 2000)
Q: Company W is conducts a printing
business in Sta. Cruz Makati. The Company
informed its workers that it was going to
transfer its site in Makati to Batangas. It
gave its employees time to inform the
management of their willingness to go with
petitioner, otherwise, they would find
replacements. The Union advised the
company that its members were not willing
to transfer to the new site. Are the
employees entitled to separation pay by
virtue of their refusal to transfer to the
business in Batangas.
A: Yes. Although there is no complete
dissolution of petitioners undertaking, but a
mere relocation; the phrase, closure or
cessation of operation of an establishment
not due to serious business losses or
reverses, under Article 283 of the Labor
Code includes the cessation of only part of a
companys business. Company W had
alegitimate reason to relocate its plant due
to the expiration of the lease contract in
Makati; however, it is still required to pay its
workers separation pay. Cessation of
operation not due to serious business losses
is an authorized cause for termination; and
the Labor Code provides that such
terminated employees are entitled to
separation pay of 1 month pay or at least
month for every year of service, whichever is
higher. (Cheniver Deco Print Technics
Corporation v. NLRC, G.R. No. 122876,
February 17, 2000)
Q: Meralco and its union MEWA renegotiated
its 1992-1997 CBA insofar as the last two-
year period was concerned. The Secretary of
Labor assumed jurisdiction and granted the
arbitral awards. There was no question that
these arbitral awards were to be given
retroactive effect. However, the parties
dispute the reckoning period when
retroaction shall commence. Meralco claims
that the award should retroact only from
such time that the Secretary of Labor
rendered the award. The union argues that
the awards should retroact to such time
granted by the Secretary who has plenary
and discretionary power to determine the
effectivity of the arbitral award. The union
cited the case of St. Lukes and Mindanao
Terminal where the Secretary ordered the
retroaction of the CBA to the date of
expiration of the previous CBA. When should
the arbitral award retroact?
A: Labor laws are silent as to when an
arbitral award in a labor dispute where the
Secretary has assumed jurisdiction by virtue
of Art. 263 (g) shall retroact. Despite the
silence of the law, the Court ruled that the
CBA arbitral awards granted after six months
from the expiration of the last CBA shall
retroact to such time agreed upon by both
the employer and the employees or their
union. Absent such agreement as to
retroactivity, the award shall retroact to the
first day after the six-month period following
the expiration of the last day of the CBA
should there be one. In the absence of a
CBA, the Secretarys determination of the
date of effectivity as part of his discretionary
powers over arbitral awards shall control.
(Manila Electric Company v. Secretary of
Labor, G.R. No. 127598, February 22, 2000)
Q: A, B and C were drivers of Company Q
driving the latters taxicabs every other day
on a 24 hour work schedule under the
boundary system where petitioners earn an
average of P400 daily and private
respondent regularly deducts an amount for
the washing of the taxi units. A, B and C
decided to form a labor union. Later,
Company Q refused to let petitioners drive
their taxicabs. A, B and C filed with the labor
arbiter a complaint for ULP, illegal dismissal,
and illegal deductions. The NLRC found for
A, B and C stating that dismissal must be for
just cause and after due process. Company
Q's first motion for reconsideration was
denied. It filed another MR, which was then
granted. Should the NLRC have granted the
second MR?
A: No. Company Q exhausted administrative
remedies available to it by seeking an MR.
The rationale for allowing only one MR from
the same party is to assist the parties in
obtaining an expeditious and inexpensive
settlement of labor cases. The NLRC should
have recognized that the relationship
between jeepney-owners and jeepney drivers
under the boundary system is that of ee-er
and not that of lessor-lessee. The fact that
the drivers do not receive fixed wages is not
sufficient to withdraw the relationship f3om
that of er and ee. Therefore the termination
of A, B and Cs employment should have be
effectuated in accordance with law. With
regard to the amount deducted for washing,
such was not illegal as such is indeed a
practice in the taxi industry and is dictated
by fair play. (Jardin v. NLRC, G.R. No. 119268,
February 23, 2000)
Q: Union M is an affiliate of Federation U. A
bitter disagreement ensued between the
Federation U and the Union M culminating in
the latters declaration of general autonomy
from the former. The federation asked the
company to stop the remittance of Union Ms
share in the education funds. The federation
called a meeting placing Union M under
trusteeship and appointing an administrator.
Officers of Union M received letters from the
administrator requiring them to explain why
they should not be removed from their office
and expelled from union membership. The
officers were expelled from the federation.
The federation then advised the company of
the expulsion of the 30 union officers and
demanded their separation pursuant to the
Union Security Clause in the CBA. The
Federation filed a notice of strike with the
NCMB to compel the company to effect the
immediate termination of the expelled union
officers. Under the pressure of a strike, the
company terminated the 30 union officers
from employment. Union M filed a notice of
strike on the grounds of discrimination;
interference; mass dismissal of union officers
and shop stewards; threats, coercion and
intimidation; and union busting. Members of
Union M prayed for the suspension of the
effects of their termination. Secretary Drilon
dismissed the petition stating it was a intra-
uion matter. Later, 78 union shop stewards
were placed under preventive suspension.
The union members staged a walk-out and
officially declared a strike that afternoon.
The strike was attended by violence. Was
the dismissal of the union officers illegal?
A: Yes. The charges against respondent
company proceeded mainly from the
termination of the union officers upon the
demand of the federation pursuant to the
union security clause. Although the union
security clause may be validly enforced, such
must comply with due process. In this case,
the union officers were expelled for allegedly
committing acts of disloyalty to the
federation. The company did not inquire into
the cause of the expulsion and merely relied
upon the federations allegations. The issue
is not a purely intra-union matter as it was
later on converted into a termination dispute
when the company dismissed the petitioners
from work without the benefit of a separate
notice and hearing. As to the act of
disaffiliation by the local union; it is settled
that a local union has the right to disaffiliate
from its mother union in the absence of
specific provisions in the federations
constitution prohibiting such. There was no
such provision in federation ULGWPs
constitution.
Q: In the above case, was the strike illegal?
A: No. As to the legality of the strike; it was
based on the termination dispute and
petitioners believed in good faith that in
dismissing them, the company was guilty of
ULP. The no-strike, no lockout provision in
the CBA can only be invoked when the strike
is economic. As to the violence, both parties
agreed that the violence was not attributed
to the striking employees alone as the
company itself hired men to pacify the
strikers. Such violence cannot be a ground
for declaring the strike illegal. (Malayang
Samahan ng mga Manggagawa sa M.
Greenfield (MSMG0UWP) v. Ramos, G.R. No.
113907, February 28, 2000)
Q: The LA ordered petitioner to pay
respondents the sum of P655, 866.41.
Petitioner appealed to the NLRC with a
motion for the reduction of the supersedeas
to P100,000 and thereafter posted a cash
bond of P100,000. The NLRC dismissed the
appeal for insufficiency of the bond.
Petitioner said the Star Angel doctrine should
apply where the appeal may be perfected
after that period upon posting of a cash or
surety bond. However, the NLRC disagreed
stating that in this case, the petitioner did
not file a motion for reduction of bond within
the period but instead posted a bond in an
amount not equivalent to the monetary
award. Was the motion for the reduction of
the bond filed in time?
A: Yes. That petitioner did file a motion
within the period is supported by the
following:
1. The motion for reduction was stamped
with the received rubber stamp marker of
the NLRC and indicated the date of filing as
6.7.96.
2. Both the motion and the appeal
memorandum were sent to respondents in
one envelope and sent by registered mail
under Reg. Receipt 3576.
3. The same person notarized both the
motion and the appeal on the same date.
4. On the last page of their comments,
respondents stated that the motion for
reduction should be founded on meritorious
grounds. This was found by the SC to be an
implied admittance of the receipt of the
motion. Besides, respondents could just as
well have stated in their comments that no
motion was filed. (Coral Point Development
Corporation v. NLRC, G.R. No.129761,
February 28, 2000)
Q: A was a jeepney driver of X on the
boundary system. Due to a change in
schedule, they did not report for work as
protest. They were then replaced. A filed a
complaint for illegal dismissal asking for
separation pay and other benefits. On
November 26, 1991, the labor arbiter
rendered judgment in favor of A. X was
served a copy of the decision on April 3,
1992. X filed a memorandum on appeal on
April 13, 1992; however the appeal bond was
only filed on April 30, 1992. Also, such bond
was found to be spurious. It was only on July
20, 1993 that a substitute bond was issued
by another company. Did the NLRC have
jurisdiction to hear the appeal?
A: No. The perfection of an appeal within the
reglementary period and in the manner
prescribed by law is jurisdictional, and
noncompliance with such legal requirement
is fatal and has the effect of rendering the
judgment final and executory. Perfection of
an appeal includes the filing, within the
prescribed period of the memorandum of
appeal and posting of the appeal bond. In
cases where the judgment involves a
monetary award, as in this case, the appeal
may be perfected only upon posting of a
cash or surety bond to the NLRC. Since the X
received the LAs decision on April 3, they
had only until April 13 to file their appeal.
The bond was posted only on April 30;
beyond the reglementary period. The
requirement of posting the bond has only
been relaxed on grounds of substantial
justice and special circumstances which are
not attendant in this case. Furthermore, the
bond posted was not genuine. The decision
can no longer be amended nor altered by the
labor tribunal. (Navarro v. NLRC, G.R. No.
116464, March 1, 2000)
Q: A, is a member of the NFL, employed by X
in the Patalon Coconut Estate in Zamboanga
City. Pursuant to RA 6657, the
Comprehensive Agrarian Reform Law, the
Patalon Cocount Estate was warded to the
Patalon Estate Reform Association, of which
A is a member and co-owner. As a result of
this acquisition, the Patalon Estate shut down
operations and the employment of A was
severed. A did not receive separation pay. A
became co-owner of the land and
subsequently filed a complaint for illegal
dismissal. Should X, who had been
compelled to cease operations because of
compulsory acquisition by the government of
his land for purposes of agrarian reform, be
made liable to pay separation pay to A?
A: No. The peculiar circumstance in the case
at bar involves neither the closure of an
establishment nor a reduction in personnel
as contemplated in Article 283. The closure
contemplated in 283 is a voluntary act on
the part of the employer. The Labor Code
does not contemplate a situation where the
closure is forced upon the employer. As
such, petitioners are not entitled to
separation pay as private respondents did
not voluntary shut down operations as they
even sought to be exempted from the
coverage of RA 6657. (National Federation of
Labor v. NLRC, G.R. No. 127718, March 2,
2000)
Q: A and B were employed by Company E. A
applied for a leave of absence and informed
the Operations Manager of his intention to
avail of the optional retirement plan under
the Consecutive Enlistment Incentive Plan
(CEIP). Such was denied. B also applied for
a leave of absence and informed the
Operations Manger of his intention to avail of
the optional early retirement plan in view of
his 20 years of service which was likewise
denied. A and B both requested for
extension of their leaves of absence. Later,
they discovered that they had been dropped
from the roster of crew members. Company
E asserts that A and B are contractual
employees whose employment are
terminated every time their contracts expire.
Were A and B validly dismissed?
A: No. The primary standard to determine a
regular employment is the reasonable
connection between the activity performed
by the employee in relation to the usual
business or trade of the employer. In this
case it is undisputed that petitioners were
regular employees of private respondents.
Also, as they had been in the employ of
private respondents for 20 years as they
were repeatedly re-hired after the expiration
of their respective contracts, it is clear that
their service was necessary and
indispensable to private respondents
business. Therefore, they could only be
dismissed for just and valid cause. There is
no showing that they abandoned their job as
there was no showing of their unjustified
refusal to resume employment. (Millares v.
NLRC, G.R. No. 110524, March 14, 2000)
Q: X is a members of Union S. The
Executive Board of Union S decided to retain
the services of their counsel in connection
with negotiations for a new CBA. A general
membership meeting was called where
majority of union members approved a
resolution confirming the decision to engage
the services of the unions counsel, Atty.
Lacsina. The resolution provided that 10% of
the total economic benefits that may be
secured be given to the counsel at attorneys
fees. Also it contained an authorization for
Solidbank Corporation to check-off said
attorneys fees from the first lump sum of
payment of benefits under the new CBA. X
issued a complaint for illegal deduction. May
the union validly deduct attorneys fees from
Xs salary?
A: No. Article 241 has 3 requisites for the
validity of the special assessment for unions
incidental expenses, attorneys fees and
representation expenses. They are:
1. authorization by a written resolution of
majority of all the members at the general
membership meeting called for the purpose
2. secretarys record of the minutes of the
meeting
3. individual written authorization for check-
off duly signed by the employees concerned.
Such requirements were not complied with,
as there were no individual written check off
authorizations; thus, the employer cannot
legally deduct thus the assessment. The
union should be made to shoulder the
expenses incurred for the services of a
lawyer and accordingly, reimbursement
should be charged to the unions general
fund or account. No deduction can be made
from the salaries of the concerned
employees other than those mandated by
law. (Gabriel, et al v. Secretary of Labor, G.R.
No. 115949, March 16, 2000)
Q: A and B were employed by PAL as load
controller and check-in clerk, respectively.
On January 19, 1993, a passenger by the
name of Cominero checked in for the flight.
It appears that B reflected a lighter weight of
baggage on Comineros ticket to make it
appear that the same was within the
allowable level. When the anomaly was later
discovered, B went to the cashier to pay the
excess baggage fee. Cominero further paid
the sum representing the excess baggage
fee. B implicated A in the anomaly. A and B
were charged with fraud against the
company and were found guilty and meted
with the penalty of dismissal. The NLRC
found that the alleged defrauding of PALs
excess baggage revenue was not the
handiwork of A and that PAL failed to show it
suffered loss in revenues as a consequence
of private respondents questioned act. Was
A validly dismissed?
A: Yes. The core of PALs evidence against A
included the report of B. It was erroneous for
the NLRC to have discredited Bs testimony
because he appeared guilty as well. There is
substantial evidence showing that private
respondent had direct involvement in the
illegal pooling of baggage. As act is
inexcusable as it constitutes a serious
offense under petitioners Code of Discipline.
The fact that PAL failed to show it suffered
losses in revenue is immaterial as private
respondents mere attempt to deprive
petitioner of its lawful remedy is already
tantamount to fraud. Therefore, A was
validly dismissed and as such was for a just
cause, he is not entitled to backwages nor
separation pay. (PAL v. NLRC, G.R. No.
126805, March 16, 2000)
Q: The NFL was the sole and exclusive
bargaining representative for the rank and
file employees of Company X. NFL started to
negotiate for better terms and conditions of
employment; which were met with resistance
by Company X. The NFL filed a complaint for
ULP on the ground of refusal to bargain
collectively. LA issued an order declaring the
company guilty of ULP and ordering the CBA
proposals submitted by the NFL as the CBA
between the parties. Later, Y claimed that he
was wrongfully excluded from the benefits
under the CBA filed a petition for relief.
Company X asserts that Y is not entitled to
the benefits under the CBA because he was
hired after the term of a CBA and therefore,
is not a party to the agreement and may not
claim benefits thereunder. As for the CBA,
Company X maintains that the force and
effect of the CBAs terms are limited to only
three years and cannot extend to terms and
conditions which ceased to have force and
effect. Are the assertions of Company X
correct?
A: No. As to its first assertion, Y should be
able to claim benefits under the CBA. The
benefits under the CBA should be extended
to those who only became such after it
expired, to exclude them would constitute
undue discrimination. In fact, when a CBA is
entered into by the union representing the
employees and the employer, even the non-
union members are entitled to the benefits of
the contract. As to its assertion that the
CBAs terms are limited to only three years,
it is clear from Art. 253 that until a new CBA
has been executed by and between the
parties, they are duty bound to keep the
status quo and to continue in full force and
effect the terms and conditions of the
existing agreement. In the case at bar, no
new agreement was entered between the
parties pending appeal of the decision in the
NLRC. Consequently, the employees would
be deprived of a substantial amount of
monetary benefits if the terms and
conditions of the CBA were not to remain in
force and effect which runs counter to the
intent of the Labor Code to curb labor unrest
and promote industrial peace. (New Pacific
Timber Supply Co. v. NLRC, G.R. No. 124224,
March 17, 2000)
Q: A was employed as a data encoder by
private respondent. From 1988 until 1991,
she entered into 13 employment contracts
with private respondent, each contract for a
period of 3 months. In September 1991, A
and 12 other employees allegedly agreed to
the filing of a PCE of the rank and file
employees of private respondent.
Subsequently, A received a termination letter
due to low volume of work. A filed a
complaint for illegal dismissal. Was A a
regular employee entitled to tenurial
security?
A: Yes. Even though petitioner is a project
employee, as in the case of Maraguinot, Jr. v.
NLRC, the court held that a project employee
or member of a work pool may acquire the
status of a regular employee when the
following concur:
1. there is continuous rehiring of project
employees even after the cessation of a
project
2. the tasks performed by the alleged
project employee are vital, necessary and
indispensable to the usual business and
trade of the employer.
A was employed as a data encoder
performing duties, which are usually
necessary or desirable in the usual business
or trade of the employer, continuously for a
period of more than 3 years. Being a regular
employee, A is entitled to security of tenure
and could only be dismissed for a just and
authorized cause; low volume of work is not
a valid cause for dismissal under Arts. 282 or
283. Having worked for more than 3 years,
A is also entitled to service incentive leave
benefits from 1989 until her actual
reinstatement since such is demandable
after one year of service, whether continuous
or broken. (Imbuido v. NLRC, G.R. No.
114734, March 31, 2000)
Q: A was employed as a security guard by
Company X. During a routinary meeting of
the security guards, A stood up and shouted
at the presiding officer. She was then
suspended for 15 days. Later, she received a
letter that she was reassigned and required
to report to respondents Manila office. Her
services were terminated for abandonment
when she failed to report for work in her new
assignment. The Labor Arbiter found for
petitioner. Private respondent appealed to
the NLRC, which denied the appeal. The
decision having become final, the LA issued
a writ of execution on the reinstatement
aspect, but it was not implemented as the
monetary aspect remained to be determined.
Later, NLRC sheriff issued a notice of
Garnishment served on private respondents
deposit account with the PNB. The LA
directed the PNB to release the amount.
Meanwhile, Company X filed with the LA a
motion to quash the writ of execution on the
ground that there has been a change in the
situation of the parties which would make
the execution inequitable. It contended that
A accepted employment from another
security agency without previously resigning
from respondents agency. Should the Labor
Arbiter still order the release of the judgment
award?
A: Yes. Execution is the final stage of
litigation, the end of the suit. It cannot be
frustrated except for serious reasons
demanded by justice and equity. It is the
ministerial duty of the court to issue a writ of
execution to enforce the judgment.
Company Xs contention that there has been
a change in the situation of the parties is
without merit. It has been held that back
wages awarded to an illegally dismissed
employee shall not be diminished or reduced
by the earnings by him elsewhere during the
period of his illegal dismissal. The decision is
final and the total amount representing the
salary differentials and back wages awarded
to the petitioner has been garnished from
the account of respondent agency with no
opposition or resistance. Therefore, it is the
ministerial duty of the LA to release the
money to A. (Torres v. NLRC, G.R. No.
107014, April 12, 2000)
Q: On December 1986, De La Salle University
and De La Salle University Employees
Association, which is composed of regular
non-academic rank and file employees
entered into a CBA. During the freedom
period of such CBA, the Union initiated
negotiations, which turned out to be
unsuccessful. After several conciliation
meetings, 5 out of 11 issues were resolved
by the parties. A partial CBA was executed.
The parties then entered into a Submission
Agreement identifying the remaining issues
for arbitration. In resolving the issues, the VA
included the computer operators from the
scope of the CBA and excluded the
employees of the College of St. Benilde. Did
the VA act properly in ruling as such?
A: Yes. Computer operators were presently
doing clerical and routinary work and had
nothing to do with the setting of
management policies for the university. The
access they have to information to the
Universitys operations are not necessarily
confidential. The express exclusion of the
computer operators in the past does not
pose a bar to re-negotiation for future
inclusion of the said employees in the
bargaining unit. Also, as to the employees of
the CSB, they were properly excluded at the
two education institutions have their own
separate juridical personality. (De la Salle
University v. De La Salle University
Employees Association, G.R. No. 109002,
April 12, 2000)
Q: A received a letter calling to his attention
his conduct during a Sales and Marketing
Christmas gathering where she allegedly
made utterances of obscene, insulting and
offensive words towards the SPCs
Management Committee. A was given two
days to explain why no disciplinary action
should be taken against him and he was
thereafter placed on preventive suspension.
A replied stating that such utterances were
only made in reference to a decision taken
by the management committee on the Cua
Lim Case and not to any specific person. A
was thereafter informed in a letter that his
employment was terminated. Was A validly
dismissed?
A: No. As dismissal was brought about by
utterances made during an informal
Christmas gathering. For misconduct to
warrant dismissal, it must be in connection
with the employees work. In this case, the
alleged misconduct was neither in
connection with employees work, as As
utterances are not unusual in informal
gatherings, neither was it of such serious and
grave character. Furthermore, As outburst
was in reaction to the decision of the
management in a certain case and was not
intended to malign on the person of the
respondent companys president and general
manager. The company itself did not seem
to consider the offense serious to warrant an
immediate investigation. It is also provided
in the companys rules and regulations that
for conduct such as that of A, a first offense
would only warrant a verbal reminder and
not dismissal. (Samson v. NLRC, G.R.
No.121035, April 12, 2000).
Q: X was employed by Company C as
assistant mechanic. X drove Company Cs
truck to install a panel sign and accidentally
sideswiped a ten year old girl whose injuries
incurred hospitalization expenses of up to
P19,534.45. Such amount was not
reimbursed by insurance as X had no drivers
license at the time of the accident; therefore
Company C shouldered the expenses.
Company C conducted an investigation
where X was given the opportunity to defend
himself. X was then dismissed for violating
the company rules and regulation for blatant
disregard of established control procedures
resulting in company damages. Was X
validly dismissed?
A: Yes. Although X contends that he was
investigated simply for the offense of driving
without a valid drivers license, it was clear
that he was fully aware that he was being
investigated for his involvement in the
vehicular accident. It was also known to him
that the accident caused the victim to suffer
serious injuries leading to expenses which
the insurance refused to cover. Due process
does not necessarily require a hearing, as
long as one is given reasonable opportunity
to be heard. Xs actions clearly constituted
willful disobedience. Although generally, an
employee who is dismissed for just cause is
not entitled to any financial assistance, due
to equity considerations as this was Xs first
offense in 18 years of service, he is to be
granted separation pay by way of financial
assistance of months pay for every year
of service. (Aparente, Sr. v. NLRC, G.R. No.
117652, April 27, 2000)
Q: Y was a company nurse for the Company
Z. A memorandum was issued by the
personnel manager of Company Z to Y
asking her to explain why no action should
be taken against her for (1) throwing a
stapler at plant manager William Chua; (2)
for losing the amount of P1,488 entrusted to
her, (3) for asking a co-employee to punch in
her time card one morning when she was not
there. She was then placed on preventive
suspension. Another memorandum was sent
to her asking her to explain why she failed to
process the ATM applications of her co-
employees. She submitted a written
explanation as to the loss of the P1,488 and
the punching in of her time card. A third
memorandum was sent to her informing her
of her termination from service for gross and
habitual neglect of duties, serious
misconduct, and fraud or willful breach of
trust. Y claims that her throwing of the
stapler at plant manager William Chua was
because the latter had been making sexual
advances on her since her first year of
employment and that when she would not
accede to his requests, he threatened that
he would cause her termination from service.
As to the other charges, she claimed that
they were not done with malice or bad faith.
Was Y illegally dismissed, and if so, is she
entitled to recover damages?
A: Yes. The grounds by which an employer
may validly terminate the services of an
employee must be strictly construed. To
constitute serious misconduct to justify
dismissal, the acts must be done in relation
to the performance of her duties as would
show her to be unfit to continue working for
her employer. The acts complained of did
not pertain to her duties as a nurse neither
did they constitute serious misconduct. On
the question of damages, although Y allowed
four years to pass before coming out with
her employers sexual impositions; the time
to do so admittedly varies depending upon
the needs, circumstances and emotional
threshold of each person. It is clear that Y
has suffered anxiety, sleepless nights,
besmirched reputation and social humiliation
by reason of the act complained of. Thus,
she should be entitled to moral and
exemplary damages for the oppressive
manner with which petitioners effected her
dismissal and to serve as a warning to
officers who take advantage of their
ascendancy over their employees.
(Philippine Aeolus Automotive United
Corporatoin v. NLRC, G.R. No. 124617, April
28, 2000)
Q: Isetann Dept Store dismissed B due to
retrenchment. However instead of giving the
required 30 day notice, the company gave 30
days pay arguing that this is effective notice.
They made B sign quitclaims so that there
would be no more claims from them. The
Labor Arbiter ruled that the B was illegally
dismissed because they were not afforded
due process because they failed to prove
retrenchment due to losses. The NLRC
reversed the ruling saying that the dismissal
was justified because it was due to
redundancy and not retrenchment. The
NLRC however did not rule on whether the 30
day pay was a sufficient substitute for the 30
day notice. The petitioner argues further
that they should be given the chance to
present his side. Was the 30 days pay
sufficient replacement for 30 day notice?
A: No. The Court ruled that since the
dismissal is due to an authorized cause only
notice is required and that the employee has
no right to present his side. The 30 day
notice is needed in order to afford the
employee enough time to look for work and
to give the DOLE time to look into the
validity of the authorized cause. 30 days pay
is not enough to replace the notice
requirement because it would not serve the
purpose of the notice. Additionally,
backwages are not a severe punishment
because it is a consequence of the
employers failure to give notice and due
process and the employee is therefore not
deemed terminated so he should be
compensated for that period. (Serrano vs
NLRC, GR No 117040, May 4, 2000)
Q: A and B filed a petition for certification
election. Their petition was granted but they
lost in the election as majority of the
employees voted for no union. The next
day, they failed to report for work. They
claim that they were barred from entering
the premises. They filed a suit for illegal
dismissal and backwages. The company
denied these allegations and alleged that A
and B refused to return to work despite their
attention being called. Were A and B legally
dismissed?
A: No. The Court ruled that an immediate
filing of a complaint for illegal dismissal is
incompatible with abandonment.
Abandonment is a matter of intention. There
must be proof of deliberate and unjustified
intent to sever the employer-employee
relationship. This burden rests on the
employer. In this case, the employer failed
to do so. Since they were illegally dismissed,
the employees are entitled to reinstatement
with full backwages, undiminished by their
earnings elsewhere. (Villar v. NLRC, GR No
130935, May 11, 2000)
Q: A school employs both local-hire and
foreign-hire teachers. The foreign-hire
teachers were given an added 25% in their
salary and some benefits like transportation
and housing, shipping costs etc. These were
given based on two things: dislocation and
limited tenure. The added compensation
was the schools way of remaining
competitive on an international level in terms
of attracting competent teachers. The local-
hire teachers, part of the union contested the
difference, a deadlock resulted so the
teachers went on strike. Is there
discrimination in terms of wages?
A: Yes, there is discrimination. The principle
equal pay for equal work should apply in
this case. Persons who work with
substantially equal qualifications, skill, effort
and responsibility, under similar conditions,
should be paid similar salaries. If an
employee is paid less it is upon the employer
to explain why the employee is treated
differently. Dislocation and limited tenure
cannot serve as adequate or valid bases for
the difference in the salary rates. The other
benefits are enough to make up for these
two factors. There is no reasonable
distinction between the work of a local-hire
and a foreign-hire that will justify the
difference. (International School Alliance of
Educators v. Quisumbing, GR No 128845,
June 1, 2000)
Q: A company was found to have underpaid
their employees and did not pay the 13th
month pay on a routine inspection conducted
by DOLE. The regional director ordered the
company to pay the deficiency.
Subsequently, the NLRC affirmed the order.
A waiver was signed by 108 of the workers
where they reduced by half the amount that
was due. DOLE approved the waiver saying
that it was not contrary to law, good customs
and public policy. Later, petitioner filed a
motion for reconsideration alleging undue
influence, coercion, intimidation, and no
assistance of counsel. The motion was
denied. Eduardo Nietes, claiming that he
represented the workers, filed a position
paper with the same argument. The NLRC
dismissed the case for failure to acquire
jurisdiction. He again filed an appeal but the
appeal was denied for being filed out of time.
The appeal was filed 9 days late along with
the appeal fee and research fee. Was the
appeal was filed out of time?
A: Yes, the appeal was filed out of time. The
perfection of an appeal within the
reglamentary period and in the manner
prescribed by law is mandatory and
jurisdictional. Non-compliance renders the
judgement appealed final and executory. An
appeal is perfected when there is proof of
payment of the appeal fee and in cases of
the employer appealing and there is a
monetary award, payment of the appeal
bond. A mere notice of appeal without
complying with the other requisites shall not
stop the running of the period for perfecting
an appeal. Sometimes though, in the
interest of justice, late appeals have been
allowed. An instance is a class suit. In this
case there is no evidence that there is a
class suit. There is no evidence that the
workers chose Nietes to represent them.
There is no showing that the workers are
joined by a common interest. As there is no
basis to invalidate the waiver the workers
signed, the waiver is valid. (Workers of
Antique Electric Cooperative v. NLRC, GR No
120062, June 8, 2000)
Q: X was a radio operator on board a ship
where he had a contract for 12 months. He
was required to submit himself to a medical
examination. Prior to this, he had a
pacemaker inserted to help his
cardiovascular functioning but he was still
declared fit to work. On board the vessel, he
had bouts of coughing and he needed open
heart surgery. He filed for sickness and
disability benefits with the POEA and these
were awarded to him. Is the sickness
compensable?
A: Yes, it is compensable. Compensability of
the illness or death of seamen need not
depend on whether the illness was work
connected or not. It is sufficient that the
illness occurred during the term of the
employment contract. It will also be recalled
that petitioners admitted that private
respondent's work as a radio officer exposed
him to different climates and unpredictable
weather, which could trigger a heart attack
or heart failure. Even assuming that the
ailment of the worker was contracted prior to
his employment, this still would not deprive
him of compensation benefits. For what
matters is that his work had contributed,
even in a small degree, to the development
of the disease and in bringing about his
eventual death. Neither is it necessary, in
order to recover compensation, that the
employee must have been in perfect health
at the time he contracted the disease.
(Seagull ShipManagement and Transport Inc.
v. NLRC, GR No 123619, June 8, 2000)
Q: X is a merchandiser of respondent
company. He withdraws stocks from the
warehouse, fixes the prices, price-tagging,
displaying the products and inventory. He
was paid by the company through an agent.
He asked for regularization of his status. The
company denied any employer-employee
relationship. They claim that they used an
agent or independent contractors to sell the
merchandise. Was there labor-only
contracting?
A: No. The agent is a legitimate independent
contractor. Labor-only contractor occurs only
when the contractor merely recruits, supplies
or places workers to perform a job for a
principal. The labor-only contractor does not
have substantial capital or investment and
the workers recruited perform activities
directly related to the principal business of
the employer. There is permissible
contracting only when the contractor carries
an independent business and undertakes the
contract in his own manner and method, free
from the control of the principal and the
contractor has substantial capital or
investment. The agent, and not the
company, also exercises control over the
petitioners. No documents were submitted
to prove that the company exercised control
over them. The agent hired the petitioners.
The agent also pays the petitioners, no
evidence was submitted showing that it was
the company paying them and not the agent.
It was also the agent who terminated their
services. By petitioning for regularization,
the petitioners concede that they are not
regular employees. (Escario v. NLRC, GR No
124055, June 8, 2000)
Q: X was originally employed by R
Corporation as a muffler specialist, and was
subsequently appointed supervisor . He was
instructed to report at private respondents
main office where he was informed by the
companys personnel manager that he would
be transferred to its Sucat plant due to his
failure to meet his sales quota, and for that
reason, his supervisors allowance would be
withdrawn. For a short time, X reported for
work at the Sucat plant; however, he
protested his transfer, subsequently filing a
complaint for illegal termination. X decries
his transfer as being violative of his security
of tenure, the clear implication being that he
was constructively dismissed. Was X
constructively dismissed?
A: No. We have held that an employer acts
well within its rights in transferring an
employee as it sees fit provided that there is
no demotion in rank or diminution in pay. The
two circumstances are deemed badges of
bad faith, and thus constitutive of
constructive dismissal. In this regard,
constructive dismissal is defined as an
involuntary resignation resorted to when
continued employment becomes impossible,
unreasonable, or unlikely; when there is a
demotion in rank or diminution in pay; or
when a clear discrimination, insensibility or
disdain by an employer becomes unbearable
to the employee. It should be borne in
mind, however, that the right to demote an
employee also falls within the category of
management prerogatives. An employer is
entitled to impose productivity standards for
its workers, and in fact, non-compliance may
be visited with a penalty even more severe
than demotion. Failure to observe prescribed
standards of work, or to fulfill reasonable
work assignments due to inefficiency may
constitute just cause for dismissal. (Leonardo
v. NLRC, G.R. No. 125303, June 16, 2000)
Q: Y was employed as a mechanic. He was
dismissed after the company found out that
he was doing sideline work. It would appear
that late in the evening of the day in
question, the driver of a red Corolla arrived
at the shop looking for Y. The driver said that,
as prearranged, he was to pick up Y who
would perform a private service on the
vehicle. When reports of the "sideline" work
reached management, it confronted Y and
asked for an explanation. According to
private respondent, Y gave contradictory
excuses, eventually claiming that the
unauthorized service was for an aunt. When
pressed to present his aunt, it was then that
Y stopped reporting for work, filing his
complaint for illegal dismissal some ten
months after his alleged termination. Y was
even employed by another company
thereafter. Was there abandonment of work?
A: Yes. Y, after being pressed by the
respondent company to present the
customer regarding his unauthorized
solicitation of sideline work from the latter
and whom he claims to be his aunt, he never
reported back to work anymore. It must be
stressed that while Y alleges that he was
illegally dismissed from his employment by
the respondents, surprisingly, he never
stated any reason why the respondents
would want to ease him out from his job.
Moreover, why did it take him ten (10) long
months to file his case if indeed he was
aggrieved by respondents. All the above
facts clearly point that the filing of his case is
a mere afterthought on the part of Y.
(Leonardo v. NLRC, G.R. No. 125303, June 16,
2000)
Q: X is an officer and member of the PGA
Brotherhood Association, a duly registered
labor organization, and is a security guard
employed by PSVSIA. He was informed that
his services were being terminated. He
contended that prior to such dismissal, they
were harassed by PSVSIA officers to
withdraw their membership from the PGA
Brotherhood Association. Although PSVSIA
denied the charge of illegal dismissal, the
Labor Arbiter declared PSVSIA and its
responsible officers guilty of ULP and
declared that petitioners were constructively
dismissed, thereby ordering respondent to
reinstate X to his former position with
backwages up to the time of actual
reinstatement. However, X was paid
monetary award for backwages pursuant to
an earlier decision of the NLRC limiting it to
three years where he assented to the
computation made by the NLRC reducing the
backwages to three years. No M.R. was filed.
In fact, X even filed a motion to release the
remaining balance to satisfy the judgment
awards. X filed a motion for clarification of
the resolution reiterating their prayer for the
inclusion of their backwages from time they
were terminated up to the present (until
actual or payroll reinstatement). How
should the backwages be computed?
A: The NLRC decision has become final and
executory. Neither a motion for
reconsideration nor appeal was ever taken
by petitioners on this point. This procedural
lapse is fatal. Equally significant is the fact
that petitioners actively participated in the
enforcement of the execution by garnishing
the supersedeas bond and the bank deposits
of PSVSIA. The NLRC prepared a computation
showing the back wages due petitioners for
three (3) years. X not only assented to the
computation made when they did not object
thereto but even filed a motion to release the
remaining balance amounting to
P398,600.00 still in the hands of the NLRC to
fully satisfy the judgment awards. X cannot
now claim that they have remained unpaid,
especially considering that they have already
received the judgment award. (PGA
Brotherhood Association, et al., v. NLRC, G.R.
No. 131084, June 19, 2000).
Q: X was working as driver of passenger
jeepneys. He lost his drivers license and
asked for permission to go on vacation leave
to secure a new one. X only returned after
three months when he was able to obtained
his license. He was however informed that
another driver had already taken his place.
The company argues that the prolonged
absence of X constituted abandonment. X
filed a case for illegal dismissal. Did Xs
absence constitute abandonment?
A: No. To constitute abandonment, two
elements must concur: (1) the failure to
report for work or absence without valid or
justifiable reason, and (2) a clear intention to
sever the employer-employee relationship.
Such is disputed by the fact that private
respondent immediately reported back for
work and lost no time in filing a case for
illegal dismissal against petitioners. (Icawat
v. NLRC, GR 133572, June 20, 2000)
Q: X was employed as manager by a
company for its Healthcare Division. In April
1996, fictitious invoices were sent to clients
made to inflate the gross revenues of the
Healthcare Division; and Nokom was placed
on preventive suspension as initial findings
showed her to be involved in such anomaly.
X admitted the irregularities and made no
explanation. She also failed to appear during
the hearing. After the investigation, Xs
employment was terminated. X was found
to have been dismissed for fraud or willful
breach of the trust reposed on her by her
employer or duly authorized representative.
Was X legally dismissed?
A: Yes. In the case at bar, petitioners
position demanded a high degree of
responsibility, including the unearthing of
fraudulent and irregular activities. Petitioner
failed to do such and her bare denials did not
disprove her guilt. The ordinary rule is that
one who has knowledge peculiarly within his
control, and refuses to divulge it, cannot
complain if the court puts the most
unfavorable construction upon his silence,
and infers that a disclosure would have
shown the fact to be as claimed by the
opposing party. Loss of confidence is one of
the just causes for a valid dismissal; and it is
enough that there be some basis for such
loss of confidence. The guidelines for the
application of the doctrine of loss of
confidence as enunciated in Midas Touch
Food Corporation, are:
a.....loss of confidence should not be
simulated;
b.....it should not be used as a subterfuge
for causes which are improper, illegal or
unjustified;
c.....it may not be arbitrarily asserted in
the face of overwhelming evidence to the
contrary; and
d.....it must be genuine, not a mere
afterthought to justify earlier action taken in
bad faith.
An employer enjoys a wide latitude in the
promulgation of company rules; and in this
case, the policies of respondent were fair and
reasonable. (Nokom v. NLRC, G.R.
No.140043, July 18, 2000)
Q: X, President of the exclusive bargaining
agent initiated renegotiations of its CBA with
the company for the last two years of the
CBAs 5 year lifetime from 1989-1994. On
the same year, the union elected a new set
of officers with Z as the newly elected
President. Z wanted to continue
renegotiation, but the company claimed that
the CBA was already prepared for signing.
The CBA was submitted to a referendum
which was rejected by the union members.
Later, the union notified the NCMB of its
intention to strike due to the companys
refusal to bargain. Thereafter, the parties
agreed to disregard the unsigned CBA and to
start negotiation on a new five-year CBA.
The union submitted its proposals to
petitioner, which notified the union that the
same was submitted to its Board of Trustees.
Meanwhile, Zs work schedule was changed,
which she protested and requested to be
submitted to a grievance machinery under
the old CBA. Due to the companys inaction,
the union filed a notice of strike. Later, Z
was dismissed for alleged insubordination.
Both parties again discussed the ground
rules for the CBA renegotiations; however
the company stopped negotiations after
allegedly receiving information that a new
group of employees had filed a Petition for
Certification Elections. The union held a
stike and the Secretary assumed jurisdiction
ordering all striking workers to return to
work. All were readmitted except Z.
1. Is the company guilty of unfair labor
practice by refusing to bargain with the
union when it unilaterally suspended the
ongoing negotiations for a new CBA upon
mere information that a petition for
certification has been filed by another
legitimate labor organization?
2. Does the termination of the union
president amount to an interference of the
employees right to self-organization?
A:
1. No. The duty to bargain collectively
includes the mutual obligation to meet and
convene promptly and expeditiously in good
faith for the purpose of negotiating an
agreement. Petitioner failed to make a
timely reply to the unions proposals, thereby
violating the proper procedure in collective
bargaining as provided in Article 250. In
order to allow the employer to validly
suspend the bargaining process, there must
be a valid PCE raising a legitimate
representation issue. In this case, the
petition was filed outside the 60-day freedom
period; therefore there was no legitimate
representation issue and the filing of the PCE
did not constitute a bar to the ongoing
negotiation.
2. Yes. The dismissal was in violation of the
employees right to self-organization. The
dismissal must be made pursuant to the
tenets of equity and fair play; wherein the
employers right to terminate the services of
an employee must be exercised in good
faith; furthermore, it must not amount to
interfering with, restraining or coercing
employees in their right to self-organization.
The factual backdrop of the Ambas
termination reveals that such was done in
order to strip the union of a leader.
Admittedly, management has the
prerogative to discipline its employees for
insubordination. But when the exercise of
such management right tends to interfere
with the employees right to self-
organization, it amounts to union-busting
and is therefore a prohibited act. (Colegio de
San Juan de Letran v. Association of
Employees and Faculty of Letran, G.R.
141471, September 18, 2000)
Q: X was employed as sewer by a
corporation engaged in the business of
sewing costumes, gowns and casual and
formal dresses. Eventually, she started to
feel chest pains. She then filed a leave of
absence from work as the chest pains
became unbearable. After subjecting herself
to medical examination, she was found to be
suffering from Atherosclerotic heart disease,
Atrial Fibrillation, Cardiac Arrhythmia. Upon
recommendation of her doctor, she resigned
from her work hoping that with a much-
needed complete rest, she will be cured. She
later filed a disability claim with the SSS from
the Employees Compensation Fund, under
Presidential Decree No. 626, as amended.
Was the sickness compensable?
A: Yes, the illness is compensable. Under the
Labor Code, as amended, the law applicable
to the case at bar, in order for the employee
to be entitled to sickness or death benefits,
the sickness or death resulting therefrom
must be or must have resulted from either
(a) any illness definitely accepted as an
occupational disease listed by the
Commission, or (b) any illness caused by
employment, subject to proof that the risk of
contracting the same is increased by working
conditions. In other words, for a sickness
and the resulting disability or death to be
compensable, the said sickness must be an
occupational disease listed under Annex A
the Amended Rules on Employees
Compensation; otherwise, the claimant or
employee concerned must prove that the
risk of contracting the disease is increased
by the working condition.
Indisputably, cardiovascular diseases, which,
as herein above-stated include
atherosclerotic heart disease, atrial
fibrillation, cardiac arrhythmia, are listed as
compensable occupational diseases in the
Rules of the Employees Compensation
Commission, hence, no further proof of
casual relation between the disease and
claimants work is necessary. (Salmone v.
Employees Compensation Commission and
Social Security System, G.R. No. 142392,
September 26, 2000)
1999 CASES
Q. A flight surgeon at PAL, was on duty from
4 pm until 12 midnight. At around 7 pm, he
left the clinic to have his dinner at his
residence, a 5-minute drive away. While he
was away, the clinic received an emergency
call for a PAL employee suffered from a heart
attack. The nurse on duty phoned the doctor
at home to inform him of the emergency,
then rushed the patient to the hospital at
7:50 pm. The doctor arrived at 7:51 pm. The
patient died the following day. After
investigation, the doctor was charged with
abandonment of post while on duty, and was
later suspended for 3 months. Was this
suspension legal?
A. The suspension was illegal. Article 83 of
the Labor Code (Normal hours of Work)
provides that Health personnel . . . shall hold
regular office hours for eight (8) hours a day,
for five (5) days a week, exclusive of time for
meals, (See Art. 85 - Meal Periods; Sec. 7,
Rule I, Book III of the Omnibus Rules (Meals
and Rest periods) Thus, the 8-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, as long as they return to
their posts on time. Private respondents act
of going home to take his dinner does not
constitute abandonment. (Philippine Airlines,
Inc. v. NLRC, 302 SCRA 582 (1999))
Q. A jet printer operator employed at Selecta
was dismissed from employment for
dishonesty and theft of company property.
Considering that the employee merely took
15 hamburger patties, a pair of boots and an
aluminum container, was dismissal the
appropriate remedy?
A. No. While the SC agrees that the employer
should not be required to continuously
employ someone who has betrayed its trust
and confidence, dismissal would not be
proportionate to the gravity of the offense.
Further, he is a non-confidential employee.
Dismissal as a measure to protect the
interests of Respondent Company is
unwarranted under the facts of this case.
Suspension would have sufficed. (Associated
Labor Unions-TUCP v. NLRC, 302 SCRA 708
(1999))
Q. A deliveryman of Petitioner Company filed
a complaint for illegal dismissal and non-
payment of basic wages and certain
monetary benefits. He was suspected of
selling fruits of his employer at a higher
price, and pocketing the difference. The LA
found in favor of the employee and ordered
petitioner Company to reinstate him with
back wages, salary differentials, 13th month
pay and service incentive pay. The NLRC
reversed the decision and ruled that private
respondent was not entitled to reinstatement
with back wages except for the award of
salary differentials due to underpayment.
A. The SC agrees with the LA and held that
private respondent was indeed illegally
dismissed. It was only upon his complaint
regarding his low salary that he was no
longer allowed to report for work. This
amounted to dismissal without cause and
without the requisite written notice. Such
circumstances make it difficult to sustain any
allegation of abandonment. Abandonment,
as a just and valid cause for termination,
requires a deliberate and unjustified refusal
of an employee to resume his work, coupled
with a clear absence of any intention of
returning to his or her work.
With regard to the salary differentials
granted, petitioners claim exemption under
RA 6727 (Wage Rationalization Act) and the
Rules Implementing Wage Order Nos. NCR-01
and NCR-01-A, as well as Wage Order Nos.
NCR-02 and NCR-02-A. However, regardless
of the factual circumstances in this case, the
SC was not convinced as the petitioners
could not even show any approved
application for exemption, as required by the
applicable guidelines issued by the
Commission. (C. Planas Commercial v. NLRC,
303 SCRA 49 (1999))
Q. Is due process served even when the
decision of the Labor arbiter is based solely
on position papers?
A. Petitioner likewise contends that it was not
granted its right to due process, as the
decision of the LA was based purely on
position papers. The standard of due
process that must be met in administrative
tribunals allows a certain degree of latitude
as long as fairness is not ignored. [Adamson
& Adamson, Inc. v. Amores, 152 SCRA 237,
250 (1987)] Hence it is not legally
objectionable, for being violative of due
process, for the LA to resolve a case based
solely on position papers, affidavits or
documentary evidence submitted by the
parties. (CMP Federal Security Agency, Inc. v.
NLRC, 303 SCRA 99 (1999))
Q. While petitioner was assigned to sort out
rejects in a private respondents bakery, he
went to the comfort room to answer the call
of nature, with the permission of his checker.
However, when the owner saw that
petitioner was not at his station, he
demanded from him a written explanation for
abandoning his work. Having verbally
explained that he had to answer the call of
nature, petitioner no longer submitted a
written explanation, believing that his verbal
denial would suffice. However, he was
suspended for 15 days. On another occasion,
petitioner had to answer the call of nature.
This time, he requested his fellow worker to
replace him while he was away. The owner,
however, once again noticed that he was
gone and demanded a written explanation
for his absence. Knowing better, petitioner
complied with the demand. Finding
petitioners explanation unsatisfactory, the
Company served petitioner a notice of
termination.
A. Petitioners act of relieving himself can
hardly be characterized as abandonment,
much less a willful or intentional
disobedience of company rules since bowel
movements are hardly controllable. Aside
from the discomfort it causes, restraining
ones bowel movements adversely affects
the efficiency and health of the worker.
Neither could it have disrupted the
operations of the company as to cause it
irreparable damage. As such, answering the
call of nature is a valid reason to leave the
work area. (Dimabayao v. NLRC, 303 SCRA
655 (1999))
Q. A room attendant of the Sheraton,
operated by petitioner, was dismissed for
having been caught by a hotel guest with his
left hand inside the guests suitcase. After
being charged and terminated based on the
company rules regarding qualified theft, he
filed a complaint for illegal dismissal. He
reasons that he was merely placing the
belongings of the hotel guest into the latters
suitcase, as they were scattered on the floor.
Was the dismissal illegal?
A. Yes. Petitioner reasons that the employee
was caught in flagrante delicto, and is
therefore a cause for dismissal. However,
absent any evidence that would substantiate
such imputation against the employee,
suspicions and baseless conclusions by
employers are not legal justification for
dismissing employees. The burden of proof
to show the validity of the dismissal lies on
the employer. Notably, it was shown that the
hotel guest lost nothing. (Maranaw Hotels
and Resort Corporation v. NLRC, 303 SCRA
541 (1999))
Q. Petitioner was a checker in the warehouse
of respondent Company who met an accident
while in the course of performing his job. His
hand was pinned down by a crane which
resulted in its deformity and total disability of
his middle finger. He was given a month of
sick leave which he extended for another
month. Later, he discovered that the
Company had terminated his services. He
then filed a complaint for illegal dismissal.
The LA found that there was an illegal
dismissal. In its appeal to the NLRC, the
Company alleged that the real reason why
petitioner was dismissed was due to several
gambling incidents in the work area. This
explanation was accepted by the NRLC,
which omitted reinstatement and backwages
from the award of the LA. Petitioner points
out that the issue of gambling was raised
only by the respondents upon appeal. Not
having been alleged in the Position Papers of
the respondents at the earliest instance,
should the NLRC have considered the
Companys gambling allegations?
A. The Company was allowed to submit
Annex 2 which contained the gambling
allegations with the LA, there was no
showing whether the NLRC gave the
petitioner a clear chance to rebut the
contention. Considering the lateness of its
submission, and the critical fact it alleged,
this was the least that should have been
done by the NLRC. Therefore, petition
granted. NLRC committed grave abuse of
discretion. LAs decision reinstated. (Villa v.
NLRC, 303 SCRA 481 (1999))
Q. Supervisory employees of SMC were
retired prior to reaching the compulsory age
of 60 pursuant to a CBA reducing optional
retirement to fifteen years. They claim that
their signatures in conformity with their
retirement from the service were secured
through threats, and that the employees had
no choice but no accept the benefits. Were
the employees validly retired? Did their
acceptance of benefits amount to estoppel?
A. No the employees were not validly retired.
The mere absence of actual physical force to
compel them to ink their application for
retirement did not make it voluntary. They
were confronted with the danger of being
jobless. Their acceptance of benefits did not
likewise amount to estoppel. If the intention
to retire is not clearly established or if the
retirement is involuntary, such is to be
treated as a discharge. In any case, the CBA
is not applicable to them as it expressly
excluded supervisory positions which
petitioners occupy. (San Miguel Corporation
v. NLRC; July 23, 1999)
Q. San Miguel Corporation shut down some
of its plants and declared 55 positions as
redundant, in order to streamline operations
due to financial losses. Consequently, the
union filed several grievance cases for the
said retrenched employees, and sought the
redeployment of said employees to other
divisions of the company. Grievance
proceedings were conducted pursuant to the
parties' Collective Bargaining Agreement.
The procedure outlined in the CBA required
the settlement of grievances on 3 levels -
department manager, plant manager, and a
conciliation board. During the proceedings,
many employees were redeployed, some
accepted early retirement. San Miguel
informed the union that the remaining
employees would be terminated, if they
could not be redeployed. Subsequently, the
union filed a notice of strike with the NCMB
of the DOLE due to a bargaining deadlock
and gross violation of the CBA such as non-
compliance with the grievance procedure. On
the other hand, San Miguel filed a complaint
with the NLRC to dismiss the notice of strike.
Can the union hold a strike on the grounds
relied upon?
A. The grounds relied upon by the union are
non-strikeable. A strike or lockout may only
be declared in cases of bargaining deadlocks
and ULP. Violations of the CBA, except
flagrant/malicious refusal to comply with
economic provisions shall not be strikeable.
(Sec. 1, Rule XXII, LC IRR) A collective
bargaining deadlock is the situation between
the labor and management of the company
where there is failure in the collective
bargaining negotiations resulting in a
stalemate. This situation is nonexistent in the
present case since there is a conciliation
board assigned in Step 3 of the grievance
machinery to resole the conflicting views of
the parties. For failing to exhaust all the
steps in the grievance machinery and
arbitration proceedings provided in the CBA,
the notice of strike should have been
dismissed by the NLRC and the union
ordered to proceed with the grievance and
arbitration proceedings. Moreover, in
abandoning the grievance proceedings and
refusing to avail of the remedies under the
CBA, the union violated the mandatory
provisions of the CBA. Parenthetically, it is
worthy to note that abolition of departments
or positions in the company is one of the
recognized management prerogatives. (San
Miguel Corporation v. NLRC, 304 SCRA 1 (2
March 1999))
Q. Due to alleged ULP, several employees
walked out from their jobs. The company
purportedly sent them notices urging them
to return to work, otherwise their services
would be terminated. The employees denied
having received these notices, and claimed
that they were merely informed of their
dismissal and prevented from returning to
work (removal of their machines by the
company). Was there a valid case of
abandonment, as a ground for dismissal?
A. Abandonment, as a just and valid ground
for dismissal, means the deliberate and
unjustified refusal of an employee to resume
his employment. The burden of proof is on
the employer to show an unequivocal intent
on the part of the employee to discontinue
employment. Two elements must be proved:
the intention of an employee to abandon and
an overt act from which it may be inferred
that the employee has no more intent to
resume his work. It is unlikely that the
employees abandoned their jobs, considering
the length of their service (10-17 years). In
fact, no overt act was proven by the
company from which the intention of the
employees to desist from employment may
be shown. Moreover, the abandonment of
work does not per se sever the employer-
employee relationship. IT is merely a form of
neglect of duty, which is in turn a just cause
for termination of employment. The
operative act that will ultimately put an end
to the relationship is the dismissal of the
employee, after complying with the
procedure prescribed by law. If the employer
does not follow the procedure, there is illegal
dismissal. (De Paul/King Philip Customs Tailor
v. NLRC, 304 SCRA 448, 10 March 1999)
Q: S was employed under an employment
contract that will be effective for a period of
1 year, unless sooner terminated. The first
period was for six months terminable at the
option of the employer. The second period
was also for six months but probationary in
character. After working for six months, S
was made to sign a 3-month probationary
employment and later extended by another
3-month period. After a total employment of
one year, S was dismissed on grounds of
termination of contract employment. S filed a
complaint for illegal dismissal. Was S validly
dismissed?
A: Yes. In both periods, the company did not
specify the criteria for the termination or
retention of the services of S. If the contract
was really for a fixed term, the employer
should not have been given the discretion to
dismiss S during the one year period of
employment for reasons other than the just
and authorized causes under the Labor Code.
In effect, the employer theorized that the
one-year period of employment was
probationary. It was not brought to light that
S was informed at the start of his
employment of the reasonable standards
under which he would qualify as a regular
employee. In the case of Brent, the Court
upheld the principle that when the period
was imposed to preclude the acquisition of
tenurial security, they should be disregarded
for being contrary to public opinion. It was
clear that S was hired as a regular employee
and his work was necessary and directly
related to the business of the company. S is
considered as a regular employee of the
company. At any rate, even assuming that
the original employment was probationary,
the fact that he was allowed to work beyond
the six-month probationary period converts
him to a regular employee under Article 281
of the Labor Code. S was reinstated with
backwages from the time of dismissal to
payroll reinstatement. (Servidad v. National
Labor Relations Commission, 305 SCRA 49,
18 March 1999)
Q: D learned from B that the latter needed
factory workers in Taiwan, but B told D that
as a part of his job application, he should
give a certain amount. D gave B the money
but was unable to go to Taiwan. Several
other persons paid B the required placement
fee but were also unable to work abroad. The
victims filed cases of illegal recruitment in
large scale (3 or more persons) and estafa.
Was B guilty of illegal recruitment and
estafa?
A: Yes. Illegal recruitment is committed when
the (1) offender has no valid license or
authority; and (2) he undertakes any activity
within the meaning of recruitment and
placement under the Labor Code. It is the
lack of necessary license or authority that
renders the recruitment activity unlawful or
criminal. There is illegal recruitment when
one purports to have the ability to send a
worker abroad through without license and
authority to do so. (People v. Borromeo, 305
SCRA 180, 25 March 1999)
Q: At the time AIUP filed a petition for
certification election, there was an existing
CBA between the company and CCEA, the
incumbent bargaining agent for all the rank
and file employees. This petition was
opposed by CCEA on the ground of the
contract bar rule. AIUP filed a notice of strike
citing union busting and unfair labor practice
as grounds. The union proceeded to stage a
strike, in the course of which, illegal acts
were perpetrated. When AIUP ignored the
TRO enjoining the union members to refrain
from blocking the road, the company
dismissed several employees on the ground
of illegal strike and illegal acts perpetrated in
connection with the strike. AIUP is
questioning the legality of the dismissal of
several AIUP member employees. Was the
strike illegal? Was the dismissal of the AIUP
member employees valid?
A: The Court was not persuaded by the
allegation of union busting. The strike staged
by AIUP was a union-recognition-strike. The
petition for certification election (PCE) should
not have been entertained because of the
contract bar rule. A PCE may only be
entertained 60 days before the expiration of
a CBA (freedom period).
The strike staged by AIUP was illegal
as they formed human barricades to block
roads and prevented co-workers from
entering company premises. Even if the
strike is valid because its object or purpose is
lawful, the strike may still be declared as
invalid where the means employed are
illegal. Union officers who knowingly
participate in the commission of illegal acts
in a strike may be declared to have lost his
employment status but an ordinary striking
employee cannot be terminated for mere
participation in an illegal strike. However,
there must be proof that he committed
illegal acts during the strike. For the severest
penalty to dismissal to attach, the erring
strikers must be duly identified. Simply
referring to them as strikers is not enough
to justify their dismissal. The petitioning
members of AIUP are ordered reinstated with
full backwages. (Association of Independent
Unions in the Philippines v. NLRC, 305 SCRA
219, 25 March 1999)
Q: The original owners of AAC were driven by
mounting financial loses to sell the majority
rights of the company to PH. To thwart
further losses, PH implemented a re-
organizational plan. Workers occupying
redundant positions that were abolished
were terminated. PH duly paid their
separation pay and other benefits. Six of the
union members who were terminated filed a
case for illegal termination alleging that the
retrenchment program was a subterfuge for
union busting. They claimed that they were
singled out for their active participation in
union activities. They also asserted that AAC
was not bankrupt, as it has engaged in an
aggressive scheme of contractual hiring.
Were the union members validly dismissed?
A: Yes. The condition of business losses is
normally shown by audited financial
documents. It is the Courts ruling that
financial statements must be prepared and
signed by independent auditors. In the
instant case, the employees never contested
the veracity of the audited financial
documents presented by AAC to the Labor
Arbiter, neither did they object to the
documents admissibility. It is only necessary
that the employees show that its losses
increased through a period of time and that
the condition of the company is not likely to
improve in the near future. The allegation of
union busting is also bereft of proof. The
records show that the position on 51 other
non-union members were abolished due to
business loses.
The Court generally holds quitclaims
to be contrary to public policy. Yet as in the
instant case, as there is no showing that the
quitclaims were executed in duress, they are
binding on the parties. (Asian Alcohol
Corporation v. NLRC, 305 SCRA 416, 25
March 1999)
Q: PICOP grants certain allowances to its
employees depending on the circumstances
and need for such. The allowances in
question pertains to the following:
1. Staff/Managers Allowance: Free
housing facilities to supervisory and
managerial employees assigned in Bislig.
Due to shortage of housing facilities, the
company was constrained to grant
allowances to those who live or rent houses
near the vicinity of the mill site.
2. Transportation Allowance: granted to
Managers assigned to the mill site who use
their own vehicles in the performance of
their duties.
3. Bislig Allowance: given in consideration
of being assigned to the hostile environment
then prevailing in Bislig.
 The Executive Labor Arbiter opined that
the subject allowances formed part of the
employees wages. Citing jurisprudence, he
concluded that the allowances should be
included in the computation of the
employees base pay in determining the
separation pay. The NLRC did not share the
view of the Labor Arbiter. It found that the
allowances were contingency-based and thus
not included I their salaries. Did the subject
allowances form part of the petitioners
wage?
A: No. Wage, as defined by the Labor Code,
may include any determination by the
Secretary of Labor in appropriate instances
the fair and reasonable value of board,
lodging and other facilities customarily
furnished by an employer to his employees.
The Court agrees with the OSG that the
subject allowances were temporary and not
regularly received by the petitioners. The
allowance given to the employees in the
instant case do not represent such fair and
reasonable value because the allowance
were given by the company in lieu of actual
housing and transportation needs whereas
the Bislig allowance was given in
consideration of being assigned to the hostile
environment then prevailing in Bislig;
petitioners continuous enjoyment of the
disputed allowances was based on
contingencies the occurrence of which
terminated such enjoyment. (Millares v.
National Labor Relations Commission, 305
SCRA 500, 29 March 1999)
Q: A was employed by IBM for 16 years as an
Engineer. He was informed, through a letter,
that his employment with the company was
to be terminated on the grounds of habitual
tardiness and absenteeism. Alleging that his
dismissal was without just cause and due
process, he filed a compliant with the DOLE.
He also claimed that he was not given the
opportunity to be heard and hat he was
summarily dismissed from employment
based on charges which has not been duly
proven. IBM denied As claims. It was alleged
that A was told of his poor attendance record
and inefficiency through the companys
internal electronic mail system. Attached to
IBMs position paper were copies of printouts
of alleged computer entries/messages sent
by the company to A through the internal
email system. Was A validly dismissed?
A: No. It appears, however, that As Daily
Time Record (DTR) and pay slips showed that
he did not incur any unexcused absences, he
was not late on any day and, that no
deduction was made from his salary on
account of tardiness or absences. The
computer print outs, which constitutes the
only evidence of IBM, afford no assurance of
their authenticity because they are unsigned
It is true that administrative agencies are not
bound by the technical rules of procedure
and evidence in the adjudication of cases.
However, the liberality of procedure is
subject to limitations imposed by basic
requirements of due process. The evidence
presented before the NLRC must at least
have a modicum of admissibility for it to be
given some probative value. The print outs
likewise failed to show that A was allowed
due process before his dismissal. The law
requires an employer to furnish the
employee two written notices before
termination of his employment may be
ordered. These requirements were not
observed in this case. (IBM Philippines v.
National Labor Relations Commission, 305
SCRA 592, 13 April 1999)
Q: RP filed with the SEC a petition for the
suspension of payments and a rehabilitation
plan. A management committee was created
to oversee the rehabilitation plan.
Consequently, the SEC issued an order
suspending all actions and claims against RP.
Employees of RP filed their respective
complaints for illegal dismissal, unfair labor
practice, and payment of separation pay.
The Labor Arbiter held that the order
of the SEC suspending all action for claims
against RP does not cover the claims of
private respondents in the labor cases
because said claims and the liability of RP as
the employer still has to be determined, thus
carrying no dissipation of the assets of
petitioners. Are labor claims included in the
suspension order of the SEC?
A: Yes. The law is clear: all claims for actions
shall be suspended accordingly. No exception
in favor of labor claims is mentioned in the
law. Allowing labor cases to proceed clearly
defeats the purpose of the automatic stay
and severely encumbers the management
committees time and resources.
 The preferential right of workers and
employees under Article 110 of the Labor
Code may be invoked only upon the
institution of insolvency or judicial liquidation
proceedings. The purpose of rehabilitation
proceedings is precisely to enable the
company to gain a new lease on life and
thereby allow creditors to be paid their
claims from its earnings. In insolvency
proceedings, the company stops operations
and the claims of creditors are satisfied from
the assets of the insolvent company. The
present case involves rehabilitation, not the
liquidation, of RP Corporation. Hence the
preference of credit granted to workers is not
applicable. The labor claims filed by the
employees will temporarily be suspended
during the period of the rehabilitation plan.
(Rubberworld Philippines v. National Labor
Relations Commission, 305 SCRA 721, 14
April 1999)
Q: S was employed by JVAC Corporation in
1969. He retired on 1992 when he was 62
years old. Subsequently, S brought a
complaint for retirement benefits and service
incentive leave pay before the NLRC against
the corporation. The Labor Arbiter granted
retirement pay to S under RA 7641. The
corporation challenged this decision
asserting that S retired almost a year prior to
the effectivity of the said law (7 January
1993), and thus the retirement benefits
under RA 7641 should not be applied
retroactively. Was S entitled to the
retirement benefits under RA 7641?
A: No. The Court held in a previous case that
RA 7641 granting retirement benefits is
undoubtedly a social legislation. There
should be little doubt about the fact that the
law can apply to labor contracts still existing
at the time the statute has taken effect, and
that its benefits can be reckoned not only
from the date of the laws enactment but
retroactively to the time said employment
contract have started. The aforecited
doctrine was elaborated upon by
enumerating the circumstances which must
concur before the law could be given
retroactive effect: (1) the claimant must still
be an employee of the employer at the time
the statute took effect; and (2) the claimant
has complied with the requirements for
eligibility under the statute. In the case
under scrutiny, S retired and ceased to be an
employee of JVAC Corporation eleven months
before the effectivity of RA 7641. It is thus
decisively clear that the provisions of RA
7641 could not be given retroactive effect in
his favor. (J.V. Angeles Construction
Corporation v. NLRC, 305 SCRA 734, 14 April
1999)
Q: The corporation and ALU inked a CBA
effective until 1995. 14 days before the
expiration of the said CBA, NAFLU filed a
petition for certification election, which was
granted by the Med-Arbiter. ALU interposed a
Motion to Dismiss for failure of NAFLU to
acquire for and in behalf of its local charter
affiliates (COPPER), a legal personality as a
legitimate labor organization. ALU and NAFLU
signed an agreement to hold a certification
election and NAFLU promised to furnish ALU
a copy of its Certificate of Registration and
other pertinent documents. On the same day
COPPER was issued by the DOLE a Certificate
of Registration. Was the PCE duly filed?
A: Yes. In a previous case, the Court held
that a party is estopped to challenge the
personality of a corporation after having
acknowledged the same by entering into a
contract with it. In the present case, ALU
acknowledged the legal existence of NAFLUs
affiliate by entering into an agreement with
NAFLU. ALU aver that their agreement with
NAFLU on the holding of a certification
election with a suspensive condition was not
complied with. Considering, however, that
NAFLU was able to submit the documents
required by the agreement, such compliance
retroacted to the date the agreement was
signed.
The order of the Med-Arbiter granting
the petition for the certification election has
become final in view of ALUs failure to
appeal there from. Under the Labor Code, a
party has the right to appeal an order
allowing or granting a petition for
certification election. But the right of appeal
may only be exercised within 10 calendar
days from the receipt of the order.
(Associated Labor Unions v. Quisumbing, 305
SCRA 762, 14 April 1999)
Q: A was a police officer assigned to PNP
Vigan. While he was driving his tricycle and
ferrying passengers, he was confronted by
another police officer about his tour of duty.
A verbal tussle then ensued between the
two, which led to the fatal shooting A. On
account of As death, his wife filed a claim for
death benefits with the GSIS. In its decision,
GSIS denied the claim on the ground that at
the time of his death, A was performing a
personal activity that was not work-
connected. Subsequent appeal to the
Employees Compensation Commission (ECC)
proved to be futile as it merely affirmed the
decision of GSIS. The Court of Appeals,
however, ruled otherwise. It decided that as
applied to a peace officer, As work place is
not confined to the police precinct or any
station, but to any place where his services,
as a lawman, to maintain peace and security,
are required. At the time of his death, A was
driving his tricycle at the town complex
where the police assistance center is located.
There can be no dispute therefore that he
met his death literally in his place of work.
Policemen, by the nature of their functions,
are deemed to be on a round-the-clock duty.
Must the activity being performed at the
time of death be work-connected for it to be
compenesable?
A: Yes. While it agrees that policemen are at
the beck and call of public duty as peace
officers and technically on duty round-the-
clock, the same does not justify the grant of
compensation benefits for the death of A.
Obviously, the matter A was attending at the
time of his death, that of ferrying passenger
for a fee, was intrinsically private and
unofficial in nature proceeding as it did from
no particular directive or permission of his
superiors officers. The 24-hour duty doctrine,
as applied to policemen and soldiers, serves
more as an after-the-fact validation of their
acts to place them within the scope of the
guidelines rather than a blanket license to
benefit them in all situations that may give
rise to their deaths. In other words, the 24-
hour doctrine should not be sweepingly
applied to all acts and circumstances causing
the death of a police officer but only tot hose
which, although not on official line of duty,
are nonetheless basically police service in
character. Therefore, death benefits under
the ECC should not be granted. (Government
Service Insurance System v. Court of
Appeals, 306 SCRA 41, 20 April 1999)
Q: LG, JB and PB were accused of illegal
recruitment by a syndicate in large scale. It
was alleged that the above named accused,
without license or authority, recruited
several people for job placement abroad,
receiving a placement fee from the recruits
in exchange. The recruits flew to the
supposed country of employment yet had to
return to the Philippines as the promised job
did not exist. The victims confronted the
accused, and the accused promised to
refund their money. Were the accused guilty
of illegal recruitment in a syndicate?
A: Yes. The Court held that the appeal lacks
merit. Recruitment for overseas employment
is not in itself necessarily immoral or
unlawful. It is the lack of the necessary
license or permit, or the engagement of
prohibited activities enumerated in the Labor
Code that renders such recruitment activities
unlawful or criminal. The accused asserted
that the offense should not have been
qualified into illegal recruitment by a
syndicate since there was no proof that they
acted in conspiracy with one another.
However, the acts of the accused showed
unity in purpose. One would visit the house
of the recruits several times, convincing
them to work abroad. Another would
accompany the recruit to the house of the
person collecting the processing fee. All
these acts established a common criminal
design mutually deliberated upon and
accomplished through coordinated acts.
Against the evidence of the prosecution, the
accused merely posited the defense of
denial. Denials, if unsubstantiated by clear
and convincing evidence, are deemed
negative and self-serving evidence unworthy
of credence. (People v. Guevarra, 306 SCRA
111, 21 April 1999)
Q: Philippine Rabbit Inc. (PRI) employed PE
as a bus conductor. On 1975, petitioner
terminated the services of PE, prompting him
to sue PRI for illegal dismissal. The Labor
Arbiter declared the dismissal to be illegal
and ordered reinstatement with full
backwages. PRI appealed to the NLRC but
the appeal was dismissed, as the same was
not filed within the reglementary period. PRI
appealed to the Office of the President,
which directed PRI to reinstate PE but only
pay backwages for six months. PE was paid
the backwages but he was not reinstated.
Thus, he moved for a second writ of
execution on 1985 and the payment of
backwages from 1979 (the date he
presented himself for reinstatement) until he
could actually be reinstated. The NLRC
granted the Writ of Execution. Did the NLRC
committed a grave abuse of discretion in
modifying the amending the final and
executory order of the Office of the
President, and in enforcing by mere motion
the final judgment of the Office of the
President despite the lapse of seven years?
A: No. PRI cannot legally invoke in this case
the strict application of the rule limiting
execution of judgment by mere motion within
a period of 5 years only. There have been
cases where the Court allowed execution by
mere motion even after the lapse of 5 years.
Their common denominator in those
instances was the delay caused or occasion
by the actions of the judgment debtor and/or
those incurred for his benefit. In the instant
case, PRI unduly delayed the full
implementation of the final decision of the
Office of the President by fling numerous
dilatory appeals and persistently refusing to
reinstate private respondent PE.
Technicalities have no room in labor cases
where the Rules of Court are applied only in
a suppletory manner and only to effectuate
the objectives of the Labor Code, and not to
defeat them.
PRI can no longer assail the propriety
of the final decision of the Office of the
President issued way back in May 1978. The
finality of a decision is a jurisdictional event
that cannot be made to depend on the
convenience of a party. Once a decision
attains finality, it becomes the law of the
case whether or not the decision is
erroneous. (Philippine Rabbit Bus Lines, Inc.
v. NLRC and Evangelista, 306 SCRA 151, 21
April 1999)
Q: According to the prosecution, the accused,
RC, invited and convinced several people to
work with her as a factory worker abroad. RC
promised to process the necessary papers
for a placement fee of P8, 000.00. When the
agreed date of departure came, RC failed to
show up. The recruits went to the POEA who
issued a certification that RC had no license
to recruit overseas workers. The recruits then
went to the police and filed a compliant for
illegal recruitment in large-scale. RC
vehemently denied recruiting the
complainants and declared that she merely
tried to help them work abroad at the
insistence of the complainants. Is RC guilty of
illegal recruitment?
A: Yes. Large-scale illegal recruitment has
the following elements: (1) The accused
undertook recruitment activities or any
prohibited practice under the Labor Code. (2)
He did not have the license or authority to
lawfully engage in the recruitment and
placement of workers. (3) He committed the
same to two or more persons. The
prosecution evidence proved beyond
reasonable doubt that the foregoing
elements were present in this case. There is
no question that RC did not have a license to
engage in he recruitment of workers, as she
herself admitted, and that the crime was
committed against more than three persons.
The evidence on record belies her argument
that she did not engage in the recruitment
and placement of workers. The testimonies
of the recruits unequivocally prove that RC
promised the three jobs abroad provided
they would pay the placement fee. The fact
that each of them paid the down payment is
evidence by the receipts issued and signed
by RC. (People of the Philippines v. Castillon,
306 SCRA 271, 21 April 1999)
Q: AA is the owner of a farm who employed
the petitioners C and I. Petitioners contended
that they were verbally told by AA to stop
working and terminated their employment
without informing them of the reason for
their intended dismissal. Hence, they
charged AA for illegal dismissal with money
claims. AA asserts that C and I were
dismissed for valid causes, as they were
guilty of insubordination, both disobeying the
prescribed manner and procedure of doing
their job. The Labor Arbiter ruled that there
was no just cause for termination. On appeal,
the NLRC reversed the decision of the Labor
Arbiter for gross insufficiency of evidence to
sustain the decision, remanding the case to
the Labor Arbiter for the reception of further
evidence. Was the remand of the case to the
Labor Arbiter proper?
A: No. The remand of the case to the Labor
Arbiter for the reception of evidence has no
legal or actual basis. Subject to the
requirements of due process, proceedings
before the Labor Arbiter are generally non-
litigious, because technical rules and
procedures of ordinary courts of law do not
strictly apply. Thus, a formal or trial-type
hearing is not always essential. In the
absence of any palpable error, arbitrariness
or partiality, the method adopted by the
Labor Arbiter to decide a case must be
respected by the NLRC.
AA was not deprived of due process of
law, the essence of which is simply the
opportunity to be heard. It must be stressed
that all the parties to the case were given
equal opportunities to air their respective
positions before the Labor Arbiter. That AA
failed to fully air his position by his own
inaction or negligence does not constitute
deprivation of due process. (Caete and
Isabida v. National Labor Relations
Commission, 306 SCRA 324, 21 April 1999)
Q: AL was a seaman on board the vessel M/V
Cast Muskoz. His lifeless body was found
hanging by the neck from the ceiling of an
old abandoned warehouse in Quebec,
Canada. According to the coroner, the
probable cause of death was asphyxiation by
hanging. When ALs body was flown to
Manila, his father noted that the body bore
several bruises. They submitted the cadaver
to the NBI for an autopsy. Considering that
the findings of the NBI were all inconsistent
with suicide, the father filed a claim with the
POEA. The POEA dismissed the compliant of
the father based on the solid evidence of the
employer-shipping company. On appeal, the
NLRC affirmed the ruling of the POEA.
Apparently, both labor bodies anchored their
conclusion on the fact that had there been
foul play involved in ALs death, the $2,
000.00 in his pocket would have been taken.
Was the father of AL entitled to his sons
death benefits?
A: Yes. The employer failed to ascertain the
circumstances surrounding ALs death, which
was its duty to undertake as ALs employer.
Such willful neglect cannot but indicate that
a through investigation would have yielded a
result adverse to the employer. The records
are bereft of any substantial evidence
showing that respondent employer
successfully discharged its burden of proving
that AL committed suicide, so as to evade its
liability for death benefits under POEAs
Standard Employment Contract for Filipino
Seaman. The records of this case are
remanded to the POEA for the computation
of the death benefits to be awarded to the
father of AL. (Lapid v. National Labor
Relations Commission, 306 SCRA 349, 29
April 1999)
Q: R was employed by the hotel as a
doorman. Professional shoppers hired by the
hotel evaluating hotel employees
recommended the transfer of Rodriguez to a
non-customer-contact position because of
the negative feedback on his manner of
providing services to the hotel guests. A
memorandum was later issued transferring
him to the linen room as an attendant. He
resisted the transfer and did not assume his
new post at the linen room. The hotel
terminated his employment on the ground of
insubordination. The Labor Arbiter declared
the dismissal to be legal. On appeal, the
NLRC reversed the decision of the Labor
Arbiter declaring that the intended transfer
was in the nature of a disciplinary action. The
hotel management contends that the
employees continuous refusal to report to
his new work assignment constituted gross
insubordination. Was the transfer of the
employee a valid exercise of its management
prerogative?
A: Yes. Disobedience to be a just cause for
dismissal envisages the concurrence of at
least two requisites (a) the employees
wrongful conduct must have been willful or
intentional; (b) the order violated must have
been reasonable, lawful, made known to the
employee and must pertain to the duties
which he has been engaged to discharge. It
is the employers prerogative, based on its
assessment and perception of the
employees qualification, aptitude and
competence, to move him around in the
various areas of its business operations in
order to ascertain where the employee will
function with utmost efficiency and
maximum productivity or benefit to the
company.
Deliberate disregard of company rules
or defiance of management prerogative
cannot be countenanced. Until and unless
the rules or orders are declared to be illegal
or improper by competent authority, the
employees ignore or disobey them at their
peril. In the case at bat, the employee was
repeatedly reminded not only by
management but also by his union to report
to work station but to no avail. (Westin
Philippine Plaza Hotel v. National Labor
Relations Commission, 306 SCRA 631, 3 May
1999)
Q: Accused Enriquez promised employment
in Taiwan to at least 42 people. They were
each asked to pay processing fees ranging
from P3, 370 to P5, 000 for which no receipts
were issued and to submit documents to
facilitate their travel and subsequent
deployment abroad. The POEA issued a
certification showing the Enriquez is not
licensed to engage in the recruitment of
workers for overseas employment. In her
defense, Enriquez claimed that it was her
common-law husband who was engaged in
the business and she only acted as his
secretary when she dealt with the
complainants. She allowed him to establish
his recruitment office at her residence.
Enriquez claimed that she only helped her
husband in the office for three months while
he was looking for a secretary. Part of her
duties then was to collect the documents
submitted by the applicants and receive the
money they paid as placement fees. Is she
guilty of illegal recruitment in large-scale?
A: Yes. The essential elements of the crime
of illegal recruitment in large-scale can be
summarized as follows: (1) the accused
engages in acts of recruitment and
placement of workers as defined in the Labor
Code; (2) the accused does not have a
license or authority from the Secretary of
Labor to recruit and deploy workers; and (3)
the accused commits the same unlawful acts
against three or more persons, individually or
as a group.
The theory of the defense unduly
strains the credulity of the Court. The
complainants positively identified Enriquez
as the one who dealt directly with them from
the time they inquired about the job
prospects abroad until they complied with
the requirements and followed up their
applications. Worth reiterating is the rule
that illegal recruitment in large-scale is
malum prohibitum, not malum in se, and that
the fact alone that a person violated the law
warrants her conviction. Any claim of lack of
criminal intent is unavailing. (People of the
Philippines v. Enriquez, 306 SCRA 739, 5 May
1999)
Q: Coca Cola entered into a contract of
janitorial services with BJS. Coca Cola then
hired X first, as a casual employee; after the
casual employment was terminated, Coca
Cola again hired X as a painter in contractual
projects. He was also hired by BJS, which
assigned him to the Coca Cola considering
his familiarity with its premises. Goaded by
information that Coca Cola employed
previous BJS employees who filed a
complaint against the company for
regularization pursuant to a compromise
agreement, X submitted a similar complaint
against Coca Cola to the Labor Arbiter; he
included BJS therein as a co-respondent. He
no longer reported to work and when offered
by BJS to work in other firms, he refused. He
amended the complaint to illegal dismissal
and underpayment of wages. Is there an
employee-employer relationship in this case?
A: No. The Court takes judicial notice of the
practice adopted in several government and
private institutions and industries of hiring
janitorial services on an independent
contractor basis. Although janitorial services
may be considered directly related to the
principal business of an employer, the Court
deemed them unnecessary in the conduct of
the principal business. This judicial notice
rests on the assumption that the
independent contractor is a legitimate job
contractor so that there can be no doubt as
to the existence of an employer-employee
relationship between the contractor and the
worker. It is also clear that BJS exercises
control over the work of X as most of his
assigned task dealt with the maintenance
and sanitation of the company premises
pursuant to BJSs contract with the company.
The Court ruled that no employer-
employee relation exists between X and
Coca Cola yet the latter shall be jointly and
severally liable with BJS for the wage
differentials and 13th Month pay of X. (Coca
Cola Bottlers Philippines v. NLRC, 307 SCRA
131, 17 May 1999)
Q: Admiral Hotel hired Balani as a Cost
Controller. She received a memo from the
Managing Director calling her attention to
several violation of hotel rules she had
violated such as using the phone for personal
calls and entertaining visitors during office
hours, to the detriment of her regular work.
The employee denied the charges leveled
against her and she submitted a letter of
resignation. Consequently, she received all
salaries, benefits and separation pay, and
executed a quitclaim in favor of the hotel.
Did the employee voluntarily resign?
A: Yes, this is a case if voluntary resignation.
The employee claims that she was
constructively dismissed from her office as
its location was transferred from under the
steps of the stairs to the kitchen. Such
transfer caused her mental torture, which
forced her to resign. However, it was not
shown that her transfer was prompted by ill
will of management. Indeed, the resident
manager of the hotel swore that the transfer
affected not only the Cost Control office but
also the other offices. The transfer only
involved a change in location of the office. It
does not involve a change in the employees
position. Even a transfer in position is valid
when based on sound judgment, unattended
by demotion in rank or diminution of pay or
bad faith. (Admiral Realty Company (Admiral
Hotel) v. NLRC, 307 SCRA 162, 18 May 1999)
Q: While the oiler was anchored on port,
seaman H was directed to open and clean
the main engine. To accomplish this, he had
to enter a manhole in a crouching position.
After working for 4 consecutive days, he
experienced back pains and foot swelling.
However, he was instructed to continue with
his work until he was finally repatriated to
the Philippines where medical examinations
confirmed that he suffered from a slipped
disc, which required surgery. Upon hearing
that the surgery would cost more than P
40,000, the company disregarded the
recommendation for surgery and instead
proposed a less costly treatment. But this did
not improve the condition of H. After seven
months, H filed a complaint with the POEA
against the maritime agencies for disability
and medical benefits. The employers allege
that H signed a Receipt and Release in favor
of the maritime agencies while the case was
pending in POEA, that affirmed the findings
of the POEA that his illness was work-
connected. H supposedly acknowledged
receipt of a certain amount in complete and
final settlement of all his wages, benefits and
claims. The maritime agencies assert that
the signed Receipt is a quitclaim that
releases them from any liability whatsoever.
Is the agreement valid?
A: No, the law does not consider as valid any
agreement to receive less compensation
than what a worker is entitled to recover nor
prevent him from demanding benefits to
which he is entitled. It is appalling that H
would settle for a measly consideration of
P15, 000 which is grossly inadequate, that is
could not have given rise to a valid waiver on
the part of the disadvantaged employee.
In order that a quitclaim may be valid,
the requisites are: (1) there was no fraud or
deceit on the part of any party; (2) the
consideration of the quitclaim is credible and
reasonable; and (3) that the contract is not
contrary to law, public order, public policy,
morals or good custom. But even assuming
that the ailment of H was contracted prior to
his employment with the maritime agency,
this fact would not exculpate petitioners from
liability. Compensability of an ailment does
not depend on whether the injury or disease
was pre-existing at the time of the
employment but rather if the disease or
injury is work-related or aggravated his
condition. It is safe to presume, at the very
least, the arduous nature of Hs employment
had contributed to the aggravation of his
injury, if indeed it was pre-existing at the
time of his employment. Therefore, it is but
just that he be duly compensated for it.
(More Maritime Agencies and Alpha
Insurance v. NLRC, 307 SCRA 189, 18 May
1999)
Q: The General Manger of the Toll way
received reports that certain security
personnel are involved in mulcting activities.
Acting on the complaint, the manager along
with police officers staged an entrapment.
Angeles, security guard on duty in one of the
exits was caught in flagrante delicto
receiving bribe money from an undercover
passenger pretending to illegally transport
dogs. A notice of dismissal on the ground of
serious misconduct was issued. After formal
investigations, dismissal was advised and
Angeles was informed of his dismissal.
Angeles claimed that the entrapment was
masterminded by the manager as a
retaliation for his being critical of the
managers administration. He now claims
separation pay. Is he entitled to separation
pay?
A: An employee who is dismissed for just
cause is generally not entitled to separation
pay. In some cases, the Court awards
separation pay to a legally dismissed
employee on the grounds of equity and
social justice. This is not allowed, though,
when the employee has been dismissed for
serious misconduct or other causes reflecting
on his moral character. The act of accepting
bribe money constituted serious misconduct
that warrants the dismissal from the service.
(Philippine National Construction Corporation
v. NLRC, 307 SCRA 218, 18 May 1999)
Q: C, a managerial employee, was accused
of sexually harassing a subordinate, S. After
hearing and investigation, the Management
Evaluation Committee concluded that the
charges against C constituted a violation of
the Plants rules and regulations. It stated
that, touching a female subordinates hand
and shoulder, caressing her nape and telling
other people that S was the one who hugged
and kissed or that she responded to the
sexual advances are unauthorized acts that
damaged her honor. It referred to the
manual of the Philippine Daily Inquirer in
defining sexual harassment, which defined
sexual harassment as unwelcome or
uninvited sexual advances, requests for
sexual favors and other verbal or physical
conduct of sexual nature with any of the
following elements...(including) such conduct
as unreasonably interferes with the
individuals performance at work, or creates
an intimidating, hostile or offensive working
environment. C was charged with 30 days
suspension without pay. C filed a complaint
for illegal suspension. The Labor Arbiter
dismissed the petition which ruling was
affirmed by the NLRC. The C assailed the
failure to apply RA 7877 in determining
whether or not he actually committed sexual
harassment. Was C correctly charged with
sexual harassment justifying his suspension?
A: Yes. RA 7877 was not yet in effect at the
time of the occurrence of the act complained
of. IT was still being deliberated upon in
Congress. As a rule, laws shall have no
retroactive effect unless otherwise provided.
Hence, the Labor Arbiter had to rely on the
MEC report and the common connotation of
sexual harassment as it is generally
understood by the public. Also, as a
managerial employee, is bound by more
exacting work ethics. When such moral
perversity is perpetrated against a
subordinate, there is a justifiable ground for
dismissal based on loss of trust and
confidence. (Libres v. NLRC, 307 SCRA 674,
May 28, 1999)
Q: In an intra-union dispute involving the
examination of union accounts of a Local
Chapter, the parties submitted the matter to
the Office of the Regional Director, who
sustained the order for an audit to be
conducted. The ILM union officers appealed
the order to the DOLE Secretary, who
endorsed it to the Bureau of Labor Relations.
The BLR subsequently dismissed the appeal.
Is the DOLE Secretary correct in endorsing
the case?
A: Yes. Examinations of union accounts are
expressly classified by the Rules of Procedure
on Med-Arbitration, and a different process is
provided for the resolution of the same.
According to Art. 226 of the Labor Code, the
BLR has appellate jurisdiction over the
matter, so the DOLE Secretary was correct in
its endorsement of the case. (Barles v.
Bitonio, 308 SCRA 288, June 1999)
Q: Q and L were supervisors whose jobs
involved the overseeing of the withdrawal
and sorting of sacks of sugar. In one
transaction involving 50,000 Class C sacks,
large numbers of sacks were misplaced, and
sacks of other classes were mixed in with the
lot. As they were supervising other
operations at the time, Q and L were lax with
their duties to see that the sacks were
properly segregated and delivered. As a
result, a large number of sacks was stolen
from the company. Q and L were
subsequently fired for gross negligence. Are
they validly dismissed?
A: NO. While Quimba and Lagrana were
partially responsible for the unfortunate
incident, their negligence is not gross or
habitual, and as such does not merit outright
dismissal. Thus, they would be entitled to
reinstatement, but the employees have
accepted the NLRCs judgement for
separation pay instead due to the animosity
between the parties. (National Sugar
Refineries Corp. v. NLRC, 308 SCRA 599, June
1999)
Q: R worked as the driver of T, the owner of
Ultra Villa Food Haus. During the May 1992
elections, he acted as a poll watcher for
Lakas-NUCD and did not report for work for
two days. For the past years, the T gave R
13th mo. Pay. He alleged that he was an
employee of Ultra Villa Food Haus, and as
such, he was entitled to the benefits
accorded to employees under the Labor
Code. What is R entitled to?
A: Geniston is a personal driver of Tio, and
as such, the company is not obliged to grant
overtime pay, holiday pay, premium pay and
service incentive leave, including 13th mo.
pay. However, since T admitted that she has
given R 13th mo. pay every December, it is
but just to award R such benefit. (Ultra Villa
Food Haus v. Geniston, 309 SCRA 17, June
1999).
Q, a former employee of SURNECO, sent
letters to the company management
requesting separation benefits for her 9
years of faithful service to the company.
Nearly four months later, E, then Personnel
Officer of SURNECO, followed up and made a
review of Qs case. Subsequently, Q filed a
complaint for illegal dismissal, based largely
on the report of E acting in favor of Q. The
complaint was barred by prescription, but
because of what had happened, E was
terminated for having provided Q with the
weapons and ammunition to wage a war
against the cooperative. Furthermore, the
Board of SURNECO concluded that advancing
the interest of Q instead of the company,
especially since she divulged the contents of
her internal memorandum to Q, were
inimical to the company and merited
dismissal. Was E illegally dismissed?
A: YES. E was a Personnel Officer, holding a
managerial position that is considered vested
with a certain amount of discretion and
independent judgement. She was simply
doing her job when she reviewed Quintos
case, and she is not proscribed from taking
the side of labor when she makes
recommendations as to what must be done
in each situation. Also, there is no evidence
that Quinto got the copy of the internal
memorandum directly from Esculano she
could have acquired it from other sources.
As such, Es actions do not qualify as breach
of confidence or serious misconduct.
(Surigao Del Norte Electric Cooperative v.
NLRC, 309 SCRA 233, June 1999).
Q: RA 6715 was passed creating a new
classification of employee, the supervisory
employee, as not being a member of the
rank and file but also not considered a
managerial employee. At around this time,
the supervisory employees of Semirara Coal
decided to form their own union and
intervene in the certification elections.
However, the company filed a motion to
disqualify the supervisory employees from
participating in the certification elections, as
their functions were managerial in nature.
Should they be allowed to participate in the
certification elections?
A: Yes, they should be allowed. The said
employees fall under the category of
supervisory employees. Nothing in the
company policies alters the nature and duty
of these supervisory employees to
managerial. There is no showing that the
power to discipline erring employees is
vested in their immediate supervisors. As
such, they fall outside of the restriction on
managerial employees from joining unions
and participating in certification elections.
(Semirara Coal Corporation v. Secretary of
Labor, 309 SCRA 292, June 1999)
Q: Complainants are deaf-mutes hired by
Company F as money sorters and counters
through an agreement called, Employment
Contract for Handicapped Worker. The
Labor Arbiter and NLRC ruled that Article 280
was not controlling as complainants were
hired as an accommodation to the
recommendation of civic oriented
personalities whose employments were
covered by Employment Contracts with
special provisions on duration of contract as
specified under Art. 80. Hence, the terms of
the contract was be the law between the
parties. Complainants allege that the
contracts served to preclude the application
of Article 280 and to bar them from
becoming regular employees. Company F
submits that complainants were hired as
special workers under Art. 80 of the Labor
Code and they never solicited the services of
petitioners. Were complainants regular
employees?
A: Yes. The enactment of RA 7277, the
Magna Carta for Disabled Persons, justify the
application of Art. 280 of the Labor Code.
Such law mandates that a qualified disabled
employee should be given the same terms
and conditions of employment as a qualified
able bodies person. The fact that
complainants were qualified disabled
persons removes the employment contracts
from the ambit of Art. 280, since the Magna
Carta accords them the rights of qualified
able-bodied persons. The task of
complainants was necessary and desirable in
the usual trade of the employer and
therefore they should be deemed regular
employees. (Bernardo v. NLRC, 310 SCRA
186, July 12, 1999)
Q: A labor dispute arose between Company Y
and Union A, which caused the union to file a
notice of stricke with the NCMB charging the
company with ULP for union-busting and
violations of the CBA. This was followed by
picketing and the holding of assemblies by
the union outside the gate of Company Ps
plant. The Secretary of Labor assumed
jurisdiction over the labor dispute and
certified it for compulsory arbitration. During
the pendency of the labor dispute, Company
Y agreed to sell its plant and equipment to
Company Z. The union was informed of the
purchase of the plant. Company Z asked the
union to desist from picketing outside its
plant. The Union refused petitioners request,
and Company Z filed a compalint for
injunction. The Union moved to dismiss the
complaint alleging lack of jurisdiction on the
part of the trial court and that Company Z
was an alter ego of Company Y and not
merely an innocent by-stander.
A: An innocent by-stander, who seeks to
enjoin a labor strike, must satisfy the court
that its interests are totally foreign to the
context of the labor dispute. It must appear
that the inevitable result of its exercise is to
create an impression that a labor dispute
with which they have no connection or
interest exists between them and the
picketing union or constitutes an invasion of
their rights. In this case, Company Z clearly
has a connection with the labor dispute as
the sale between Company Y and Company
Z reveals a legal relation between them that
cannot be ignored. (MSF Tire and Rubber,
Inc. v. CA, 311 SCRA 784, August 5, 1999)
Q: M was employed by petitioner as a truck
driver. One day, he was accused of
tampering with the vale sheet and he was
subsequently barred from entering company
premises. M filed a complaint of illegal
dismissal against private respondent before
the NLRC. A copy of the summons was sent
to petitioners by registered mail and was
duly received and signed. The petitioner was
also notified of the hearing date by
registered mail but no one appeared for the
petitioner. The Labor Arbiter deemed
petitioners non-appearance as a failure to
controvert the facts as claimed by M and
decided the case ex-parte. The petitioners
allege that they never received copies of
summons or notices and that the Labor
Arbiter never acquired jurisdiction over them,
as there was no valid service of summons.
Were the petitioners denied due process?
A: No. The bare assertion of petitioner that
the persons who signed the summons which
were sent by registered mail were impostors
or persons unknown to them requires
substantiation by competent evidence. In
quasi-judicial proceedings of the NLRC,
procedural rules governing service of
summons are not strictly construed and
substantial compliance is therefore sufficient.
Further, official duty is presumed to have
been performed regularly unless the contrary
is proven. In administrative proceedings, due
process simple means the opportunity to
explain ones side or seek a reconsideration
of the action complained of. Petitioners were
able to file an appeal before the NLRC of the
Labor Arbiters decision and a party who has
availed of the opportunity to present his
position cannot claim to have been denied
due process.
The Court also ruled that M was
constructively dismissed when he was
accused of tampering with the vale sheet
and prevented from going to work. The
assertion of petitioner that M abandoned his
work is also without merit as it is highly
illogical for an employee to abandon his
employment and thereafter file a complaint
for illegal dismissal. Even assuming that
there was abandonment, there was non-
compliance with the statutory requirement of
notice; therefore M is entitled to separation
pay and backwages. (Masagana Concrete
Products v. NLRC, 313 SCRA 576, 3 Q: In a case of illegal dismissal against the
September 1999)
Q: L was employed by NAPCO-Luzmart,
which was managed by petitioner Garcia. A
mauling incident occurred in the company
premise involving L and another employee.
The following day after the incident, L
submitted his written explanation of the
event. 3 days later, L attempted to report for
work but the company refused to admit him.
L immediately filed a complaint for illegal
dismissal with the NLRC. After the company
knew of the illegal dismissal charge against
it, a memorandum was issued ordering the
suspension of L. The company asserted that
L remains an employee and was merely
suspended for a month. Proof of this, the
company presented the payrolls where the
name of L continued to be listed as a regular
employee during the period after the alleged
illegal dismissal. The company claimed that L
abandoned his work when he failed to report
for work after notice of return. Was L illegally
dismissed?
A: The Court ruled that the payroll is of
doubtful probative value, as it does not
contain the signature of employees as proof
that they received their salaries for the said
period. For a valid finding of abandonment,
two factors must be present: (1) failure to
report for work without any valid or
justifiable reason; and (2) a clear intention to
sever the employer-employee relationship
manifested by some overt acts. It was the
company who refused him entry into the
work place and made it impossible for him to
return to work. Moreover, the filing of the
complaint for illegal dismissal 7 days after
the alleged dismissal negates said charge.
Although fighting within company
premises may be considered as a serious
misconduct under Article 282 of the Labor
Code, not all fights within company premises
would warrant dismissal. This is especially
true if the employee did not instigate the
fight and it appears from the facts of the
case that L was just defending himself from
the assault of a co-employee.
The company was ordered to reinstate
L and pay backwages computed from the
date of illegal dismissal. (Garcia v. National
Labor Relations Commission, 313 SCRA 597,
3 September 1999)
petitioner, the Labor Arbiter ruled that the
dismissal of P was illegal and awarded
damages, separation pay and backwages.
The company filed a Motion for Appeal and a
Motion to Reduce Appeal Bond before the
NLRC reiterating that P voluntarily resigned
and was not illegally dismissed. Petitioners
argued that considering the authorized
capital stock of the corporation was only P2,
000,000.00, an award of P1, 870,000.00 as
backwages alone was excessive and initially
posted only a P50,000.00 cash bond. The
NLRC denied the Motion to Reduce the
Appeal Bond. The NLRC gave the company
three extensions (totaling 30 days) for them
to comply with the appeal bond requirement.
A certain R, wife of the companys chairman,
posted the required bond. Yet when R
learned that she was not under any
obligation to post the bond on behalf of her
husband, she withdrew the bond. Should
petitioners still be made to post another
bond?
A: Yes. Since effectively, no appeal bond was
posted by petitioners, no appeal was
perfected from the decision of the Labor
Arbiter, for which reason the decision sought
to be appealed to the NLRC became final and
executory and immutable. The requirement
of cash or surety bond to perfect an appeal
from the Labor Arbiters monetary award is
jurisdictional; non-compliance is fatal and
renders the award final and executory. It is
not an excuse that the bond of P2 million is
too much for a small business enterprise.
The law does not require outright payment
but only the posting of a bond to ensure that
the award will eventually be paid should the
appeal fail. (Biogenerics Marketing and
Research Corporation v. NLRC, 313 SCRA
748, 8 September 1999)
Q: X was employed by petitioner Restaurante
Las Conchas while the latter was involved in
a legal battle with company Y over the land
being allegedly occupied by the petitioner.
Company Y was able to obtain a favorable
judgment which eventually caused petitioner
to vacate the premises. As no other suitable
location was found for petitioner to move,
the restaurant was forced to close down,
thereby resulting in the termination of
employment of X. No separation pay was
given to X based on the argument of
petitioner that only closure of business not
due to business losses mandates payment of
separation pay to dismissed employees.
Should separation be given and should the
manager of the Restaurante Las Conchas be
held liable as a corporate officer?
A: The Court rules that the burden of proof
that business losses actually occurred rests
on the employers. Since no statements of
assets and liabilities certified by a CPA or
accounting firm was offered, nor the
corporations Income Tax Return certified by
the BIR was shown, such business losses
were not proven. As regards the liability of
the manager, generally, the officers and
members of a corporation are not personally
liable for the acts done in the performance of
their duties. An exception is when the
employer corporation is no longer existing
and is unable to satisfy the judgment in favor
of the employees. In such a case, the officers
should be held liable for acting on behalf of
the corporation. (Restaurante Las Conchas
and/or David Gonzales vs. Llego, 314 SCRA
24, Sept. 9, 1999)
Q: X was hired by Respondent under a 2 year
contract in Kuwait. Only after 1 year,
however, X was terminated from
employment and was sent back to the
Philippines. X then filed a complaint for
illegal dismissal with the Labor Arbiter.
Respondents were given by the Labor Arbiter
10 days to answer the charges against.
Respondents submitted a bill of particulars
instead alleging that X was lacking in the
required narration of facts constituting the
causes of action. X, on the other hand,
moved to declare respondents in default for
failing to submit their position papers. Both
parties agreed that the Labor Arbiter should
decide on the motion on the Bill of
Particulars. The Labor Arbiter, however,
declared the respondents in default for
failure to submit their position papers within
the period given. Were the respondents
denied due process?
A: Yes. The court rules that there was denial
of due process since no notice or order
requiring respondents to file their position
paper, nor an order informing the parties
that the case was already submitted for
decision. There was an utter absence of
opportunity to be heard at the arbitration
level. What the Labor Arbiter should have
done was to rule on the pending motions, or
at least notify private respondents that he
would no longer resolve their motions, and to
direct them forthwith to submit within a
reasonable time their position paper as well
as all the evidence. (Habana vs. NLRC, 314
SCRA 187, September 1999)
Q: Petitioner X was an Italian citizen who
was the Exec. Vice President and Gen.
Manager of Company Y when he was
terminated by the latter. X then filed a
complaint for illegal dismissal. Company Y
based the dismissal of X on the ground that
X failed to secure his employment permit. X,
on the other hand, argued that it was the
duty of the company to secure his work
permit during the term of his office. The
Labor Arbiter rendered a decision in favor of
X. Company Y however appealed such
decision to the NLRC. X now questions the
jurisdiction of NLRC as he is a corporate
officer, it is the SEC who should have
jurisdiction. Did the NLRC have jurisdiction
over the case?
A: No. According to Sec 5(c) of P.D. No. 902-
A, the SEC exercises exclusive jurisdiction
over controversies over regarding the
election and/or designation of directors,
trustees, officers, or managers of a
corporation, partnership or association.
Jurisdiction therefore is not which the Labor
Arbiter nor the NLRC. (De Rossi vs. NLRC, 314
SCRA 245, September 1999)
Q: Respondent X was hired by the Blue Dairy
to work as a food technologist in the latters
laboratory. One day however, while attending
to a client outside company premises as
accompanied by the company driver, the
vehicle was hit by a post, as there was a
typhoon. Afterwards, X was then transferred
from the laboratory to the vegetable
processing section; she was then barred from
the laboratory. X claims that she was
constructively dismissed as she was
evidently demoted. Was X constructively
dismissed from work?
A: Yes. The Court rules that although the
employer has managerial prerogative to
transfer personnel, such must be exercised
without grave abuse of discretion. The
employer has the burden of proof to show
that such transfer was not unreasonable,
inconvenient or prejudicial to the employee,
nor does it involve a demotion in rank or a
diminution of his salaries, privileges and
other benefits. The company in this case,
alleges that the reason for the transfer was
loss of trust and confidence. X however, was
never given the chance to refute such
reason, nor was she notified in advance of
the transfer. (Blue Dairy Corporation vs.
NLRC, 314 SCRA 401, September 1999)
Q. A check was mis-posted, resulting in an
overstatement of a clients outstanding daily
balance. The President of the bank sent a
letter to petitioner to explain the mis-
posting. Internal auditors, after
investigation, reported that petitioner was
liable, and the bank notified her that 20% of
the amount would be deducted from her
salary. Upon petitioners demand for a full-
dress investigation, she was informed of her
preventive suspension until the end of the
investigation. Petitioner then filed a
complaint for illegal dismissal and damages.
Was she illegally dismissed? Did filing of
damages amount to abandonment of work?
A. Yes, her preventive suspension was
without valid cause since she was suspended
outright. Preventive suspension beyond the
maximum period amounts to constructive
dismissal. Likewise, her claim for damages
did not amount to abandonment of work. To
constitute abandonment, these should
concur: 1. Failure to report for work or
absence without valid or justifiable cause;
and 2. A clear intention to sever the
employee-employer relationship (more
determinative factor manifested by over
acts). She merely took steps to protest her
indefinite suspension. Her failure to report
for work was even due to her indefinite
suspension. (Premiere Devt Bank v. NLRC)
1998 CASES
Q. In an illegal dismissal case, the Labor
Arbiter ruled in favor of the worker. The
total monetary award was more than ONE
MILLION Pesos. The employer appealed and
posted a bond in the amount of P700,000.00
only. In computing the monetary amount for
the purpose of posting an appeal bond, the
employer excluded the award for damages,
litigation expenses and attorneys fees. Is
the employers computation correct?
A. Yes, the computation of the monetary
award is correct. Under the NLRC New Rules
of Procedure, an appeal is deemed perfected
upon the posting of the bond equivalent to
the monetary award exclusive of moral and
exemplary damages as well as attorneys
fees. The said implementing rule is a
contemporaneous construction of Article 223
of the Labor Code by the NLRC pursuant to
the mandate. The exclusion of moral and
exemplary damages and attorneys fees from
the computation of the monetary award has
been recognized by the Supreme Court in a
number of cases. (Fernandez v. NLRC, 285
SCRA 149, January 28, 1998)
Q. Reynaldo worked as a bus driver for
Nelbusco, Inc.. On February 28, 1993, the
airconditioning unit of the bus which
Reynaldo was driving suffered a mechanical
breakdown. The company told Reynaldo to
wait until the airconditioning unit was
repaired. No other bus was assigned to
Reynaldo to keep him gainfully employed.
Reynaldo continued reporting to his
employers office for work, only to find out
that the airconditioning unit had not been
repaired. More than six months elapsed but
Reynaldo was not given work. He filed a
complaint for illegal dismissal. The NLRC
ruled that there was no illegal dismissal. Is
the ruling correct?
A. No, the ruling is erroneous. Under Article
286 of the labor Code, the bona fide
suspension of the operation of a business or
undertaking for a period not exceeding six
months shall not terminate employment.
Consequently, when the suspension exceeds
six months, the employment of the employee
shall be deemed terminated. By the same
token and applying said rule by analogy, if
the employee was forced to remain without
work or assignment for a period exceeding
six months, then he is in effect constructively
dismissed. The so-called floating status of
an employee should last only for a legaly
prescribed period of time. When that
floating status lasts for more than six
months, he may be considered to have been
illegally dismissed from the service. (Valdez
v. NLRC, 286 SCRA 87, February 9, 1998)
Q. An employer appealed a Writ of Execution
issued by the Labor Arbiter claiming that it
had varied the tenor of the judgment. The
NLRC dismissed the appeal stating that it
had lost jurisdiction over the case. The
NLRC stated that an order of execution is not
merely interlocutory but final in character
and that after a decision has become final,
the prevailing party becomes entitled as a
matter of right to its execution. Is the
dismissal of the appeal correct?
A. No, the dismissal of the appeal is
erroneous. The NLRCs ruling is based on
the general rule that after a decision has
become final, the prevailing party becomes
entitled as a matter of right to its execution,
that it becomes merely the ministerial duty
of the court to issue the execution. This
general rule cannot be applied, however,
whhere the writ of execution is assailed as
having varied the decision. In this case, the
employer alleged that the writ of execution
materially altered the decision. If this
allegation is correct, the appellant is entitled
to the remedy of appeal. The NLRC is
vested with authority to look into the
correctness of the execution of the decision
and to consider supervening events that may
affect such execution. (SGS Far East Ltd. V.
NLRC, 286 SCRA 335, February 12, 1998)
Q. Federico was a regular work pool
employee of PNCC. He was employed in
1971 and worked in various construction
projects of PNCC. IN 1979, he worked for a
project of PNCC in the Middle East with a
salary of $2.20 per hour. After the
completion of the project in 1984, Federico
returned to the Philippines. PNCC then
failed to give him work in its local projects.
Consequently, Federico filed a complaint for
illegal dismissal and obtained a ruling in his
favor. When the backwages were
computed, the NLRC used Federicos salary
rate in the Middle East. PNCC questions the
correctness of the computation and claimed
that the computation should be based on
Federicos local wage rate at the time of his
transfer to the overseas project. Decide.
A. The NLRCs computation is erroneous.
Federico was not illegally dismissed while
working in the Middle East project. He was
dismissed from the work pool after the
completion of the Middle East project. If
Federico were given local assignments after
his stint abroad, he would have received the
local wage. This is the loss which
backwages aim to restore. The computation
should be based on the local rate. (PNCC v.
NLRC, 286 SCRA 329, February 12, 1998)
Q. Alleging serious business losses, Edge
Apparel implemented a retrenchment
program by phasing out its sewing line for
simple garments. The workers assigned to
this particular sewing line were terminated.
The other lines were maintained. In the
illegal dismissal case filed by the dismissed
workers, the NLRC upheld the legality of the
dismissal but treated such dismissal as due
to redundancy. Was the dismissal due to
redundancy?
A. No, the dismissal was due to a
retrenchment program. In exercising its
right to retrench employees, the firm may
choose to close all, or a part of, its business
to avoid further losses or mitigate expenses.
The fact that only the dismissed employees
sewing line was phased out does not make
their termination a case of redundancy.
Redundancy exists where the services of an
employee are in excess of what would
reasonably be demanded by the actual
requirements of the enterprise. A position is
redundant when it is superfluous.
Retrenchment, in contrast to redundancy, is
an economic ground to reduce the number of
employees. In order to be justified, it must
be due to business losses which are serious,
actual and real. In this case, the phasing
out of the line for simple garments and,
consequently, the termination of employees
assigned to such line, was due to serious
business losses. Hence, it constitutes
retrenchment. (Edge Apparel, Inc. v. NLRC,
286 SCRA 303, February 12, 1998)
Q. Simultaneous with the filing of the appeal,
the appellant-employer filed a motion to
reduce the amount of the bond. The motion
was partially granted. In the order partially
granting the motion to reduce the amount of
the bond, the NLRC directed the appellant to
post the bond within ten (10) days from
receipt of the order. Instead of filing the
bond, the appellant employer filed a motion
for reconsideration of the NLRCs order
reducing the amount of the bond. Because
of the appellant employers failure to post
the bond, the NLRC dismissed the appeal. Is
the NLRCs ruling correct?
A. Yes, the ruling is correct. To have the
bond reduced is not a matter of right on the
part of the appellant but lies within the
sound discretion of the NLRC upon showing
of meritorious grounds. After the NLRC had
exercised its discretion in fixing the bond, the
appellant should have complied with it. To
file a subsequent motion seeking another
reconsideration of the already reduced
amount of the bond is to request for an
extension of time to perfect an appeal which
is prohibited. (MERS Shoes Manufacturing,
Inc. v. NLRC, 286 SCRA 647, February 27,
1998)
Q. Juana is a worker in Del Monte Phil., Inc..
The company rules provide for an Absence
Without Permission (AWOP) Policy. If the
worker intends to be absent from work, he
should first file an application for leave and
wait for its approval before going on leave.
The first offense is punishable by oral
reprimand; 2nd offense written reprimand;
3rd offense 1-7 days suspension; 4th
offense 8-15 days suspension; 5th offense
16-30 days suspension; and 6th offense
dismissal. From 1992-1994, Juana incurred
57 AWOP. Without initially penalizing Juana
for her past AWOP, the company dismissed
her from service in 1994.
a) Is the dismissal valid?
b) Can Juana be considered to have
abandoned her job due to her intermittent
absences without permission?
A. (a) No, the dismissal is not valid. The rule
is that an employers power to discipline its
workers may not be exercised in an arbitrary
manner as to erode the constitutional
guarantee of security of tenure. In this case,
the company rules provide for a graduation
of penalties for violation of the AWOP policy.
Even granting that Juana incurred previous
AWOPs as far back as 1992, the company
should have initially penallized her with
reprimand or suspension for her previous
AWOPs instead of dismissing her outright
from service.
(b) No, Juana did not abandon her job.
Abandonment, as a just and valid ground for
termination, means the deliberate,
unjustified refusal of an employee to resume
his employment. The burden of proof is on
the employer to show a clear and deliberate
intent on the part of the employee to
discontinue employment. The intent cannot
be lightly inferred from certain equivocal
acts. For abandonment to be a valid ground
for dismissal, two elements must be proved:
the intention of an employee to abandon,
coupled with an overt act from which it may
be inferred that the employee has no more
intent to resume his/her work. In this case,
these elements are not present. (Del Monte
Philippines, Inc. v. NLRC, 287 SCRA 71, March
5, 1998)
Q. Ernesto was employed by Baliwag Transit
as a bus driver. On May 20, 1983, the bus
driven by Ernesto was heavily damaged in an
accident with two other vehicles. Ernesto
was grounded and was advised by Baliwag
Transit to wait for the result of the police
investigation and the actions that may be
taken by the owners of the other vehicles.
Ernesto paitiently waited. Realizing that he
has waited too long, Ernesto on December
11, 1986 requested Baliwag Transit to
reinstate him. Baliwag Transit formally
informed him to look for another job because
the management has terminated his services
on account of the vehicular accident. On
November 15, 1990, Ernesto filed a
complaint for illegal dismissal. The labor
arbiter dismissed the complaint on the
ground that Ernestos action is barred by
prescription since it was filed more than four
years from the accrual of the cause of action
on May 20, 1983. Is Ernestos action barred
by prescription?
A. No, the action is not barred. The four
year period should not be reckoned from the
time of the accident on May 20, 1983
because Ernesto was not yet considered
terminated at that time. He was merely
grounded and advised to wait. Ernestos
cause of action accrued only in December
1986 when baliwag Transit formally
dismissed him from the service. Hence, the
action filed on November 1990 had not yet
prescribed. (Mendoza v. NLRC, 287 SCRA 51,
March 5, 1998)

Q. Jose, a married man, was employed as a
teacher by Hagonoy Institute. Likewise
working as a teacher for Hagonoy Institute
was Arlene, also married. In the course of
their employment, Jose and Arlene fell in love
and had a relationship. After complying with
the procedural requirements, Hagonoy
terminated the services of the couple. Is the
dismissal valid?
A. Yes, the dismissal is valid. The illicit
relationship between Jose and Arlene can be
considered immoral as to constitute just
cause to terminate the couple. To constitute
immorality, the circumstances of each
particular case must be considered and
evaluated in light of the prevailing norms of
conduct and applicable laws. In the present
case, the gravity of the charges against the
couple stem from their being married and at
the same time teachers. Teachers must
adhere to the exacting standards of morality
and decency. A teacher, both in his/her
official and personal conduct, must display
exemplary behavior. He/she must freely
and willingly accept restrictions on his/her
conduct that might be viewed irksome by
ordinary citizens. Teachers must abide by a
standard of personal conduct which not only
proscribes the commission of immoral acts,
but also prohibits behavior creating a
suspicion of immorality because of the
harmful impression it might have on
students. (Santos v. NLRC, 287 SCRA 117,
March 6, 1998)
Q. Philippine Airlines terminated the services
of two flight stewards for their alleged
involvement in currency smuggling in Hong
Kong. Instead of filing an illegal dismissal
case with the Labor Arbiter, the workers filed
with the NLRC (Commission) a petition for
injunction. The NLRC issued a temporary
mandatory injunction enjoining PAL to cease
an desist from enforcing its memorandum of
dismissal. The NLRC further ruled that the
filing of an illegal dismissal case with the
Labor Arbiter was not an adequate remedy
for the workers. Is the NLRCs ruling
correct?
A. No, the NLRCs ruling is erroneous. The
power of the NLRC to issue an injunctive writ
originates from any labor dispute, i.e. a
case between the contending parties before
the labor arbiter. In the present case, there
is no labor dispute yet between the workers
and PAL since there has yet been no illegal
dismissal complaint filed with the labor
arbiter. The petition for injunction directly
filed before the NLRC is in reality an action
for illegal dismissal. The petition should
have been filed with the labor arbiter who
has the original and exclusive jurisdiction
over termination disputes. The Labor Code
does not provide blanket authority to the
NLRC or any of its divisions to issue writs of
injunction, considering that the New Rules of
Procedure of the NLRC makes injunction only
an ancillary remedy in ordinary labor
disputes. (PAL v. NLRC, 287 SCRA672,
March 20, 1998)
Q. The factory workers of Sime Darby used to
work from 7:45 a.m. to 3:45 p.m. with a 30-
minute paid on call lunch break. In 1992,
Sime Darby issued a memorandum to all
factory workers advising them of a change in
work schedule. The new work schedule
eliminated the 30-minute paid on call lunch
break and gave the workers a one-hour
unpaid lunch break. Under the new
schedule, the workers will still work for eight
hours per day. The workers filed a complaint
for unfair labor practice. Did the company
commit any unfair labor practice when it
revised the work schedule?
A. No, the company did not commit any
unfair labor practice. The right to fix the
work schedules of the employees rests
principally on their employer. Under the old
schedule, the workers could be called upon
to do jobs during their 30-minute paid lunch
break. Under the new schedule, the workers
were given a one-hour lunch break without
any interruption from their employer. Thus,
there is no need to compensate the workers
for this period. Since the new schedule
applies to all employees in the factory
whether union members or not, it is not
discriminatory. It cannot be said that this
new scheme prejudices the workers right to
self-organization. Hence, there is no unfair
labor practice in this case.
Q. Should the appeal bond be posted within
the ten (10) day reglementary period for
filing an appeal from the Labor Arbiters
decision?
A. As a general rule, yes. When the
judgment involves a monetary award, an
appeal by the employer may be perfected
only upon posting of a cash or surety bond in
an amount equivalent to the monetary award
in the judgment appealed from. Compliance
with the requirement of posting a bond is
both mandatory and imperative as the
perfection of an appeal within the
reglementary period is jurisdictional. In a
growing number of cases, however, the
Supreme Court has relaxed the stringent
application of the rule concerning the posting
of the appeal bond within the ten (10) day
reglementary period as a requirement for the
perfection of an appeal. The Supreme Court
has allowed the filing of a motion for
reduction of bond in lieu of the appeal bond
within the reglementary period for filing an
appeal. In such case, the appeal bond may
be filed after the lapse of the reglementary
period and after the resolution of the motion
to reduce the amount of the bond .
(Alcosero v. NLRC, 288 SCRA 129, March 26,
1998)
Q. Roberto was a driver of Philtranco who
was assigned to the Legaspi City-Pasay City
route. He was dismissed from the service.
He filed a complaint for illegal dismissal
before the NLRCs National Capital region
Arbitration Branch in Manila. Philtranco filed
a Motion to Dismiss stating that the
complaint should have been lodged with the
NLRCs Regional Arbitration Branch in
Legaspi City not only because Roberto was a
resident thereof but also because the latter
was hired, assigned, and based in Legaspi
City. Decide.
A. The Motion to Dismiss must be denied.
The question of venue pertains to the trial
and relates more to the convenience of the
parties rather than upon the substance and
merits of the case. Provisions on venue are
intended to assure convenience for the
plaintiff and his witnesses and to promote
the ends of justice. The New Rules of
Procedure of the NLRC cited by Philtranco
speaks of the complainants workplace,
evidently showing that the rule is intended
for the exclusive benefit of the worker. This
being the case, the worker may waive said
benefit. Moreover, since Roberto was
assigned to Legaspi City-Pasay City route,
the filing of the complaint with the National
Capital Region Arbitration Branch was
proper, Manila being considered as part of
Robertos workplace. (Philtranco Service
Enterprises, Inc. v. NLRC, 288 SCRA 585, April
1, 1998)
Q. Mario was hired to work on board the
passenger cruise vessel Odyssey for 12
months as utility man. When he boarded
the vessel, he was unaware that there was
an existing animosity between the Filipino
crew and the Greek crew. One day, a
heated argument occurred between Mario
and a Greek deck steward, Zakkas, which
resulted in a scuffle between the two.
Zakkas pushed Mario who fell hitting his
head against the steel molding of the door.
Mario suffered a cut in the head. Prior to
this incident, Zakkas and the other Greek
workers continuously ridiculed Mario. The
night before the incident, Zakkas threatened
to pour hot coffee on Marios head. Mario
reported the abuses to the ship captain but
the latter just blamed Mario for joining the
ship. Because of his fear that further
trouble may erupt between him and the
Greek crew, Mario left the ship. When he
was repatriated to the Philippines, he filed a
complaint for illegal dismissal. The labor
arbiter dismissed the complaint on the
ground that Mario voluntarily signed off from
the vessel. Is the ruling correct?
A. No, the ruling is erroneous. Constructive
dismissal exists when there is a quitting
because continued employment is rendered
impossible, unreasonable or unlikely. In this
case, Mario quit because he feared for his life
and his fear was well founded. His decision
to leave the ship was not voluntary but was
impelled by a legitimate desire for self-
preservation. The ship captain, as the
general agent of the ship owner, could be
held responsible for failing to make the
workplace safe for Mario. This is a clear
case of constructive dismissal. (Singa Ship
Managament Phils., Inc. v. NLRC, 288 SCRA
692, April 14, 1998)
Q. PISI is a duly licensed security agency. It
hired Escobin and several other security
guards to work as guards in the premises of
Basilan Plantations, Inc. in Basilan,
Mindanao. Escobin and his companions
were residents of Basilan and heads of
families. After working for five years as
guards in the plantation, Escobin and his
group were placed under reserved or floating
status. This was due to the reduction of the
security force ordered by Basilan Plantations,
Inc.. Later, the guards placed on reserved
or floating status were instructed by
registered letter to report to PISI Head Office
in Metro Manila for posting to PISI clients
within Metro Manila. The guards did not
reply. A second letter was sent but the
guards likewise failed to reply. PISI sent
individual letters to the guards ordering them
to explain why no disciplinary action should
be taken against them for failing to comply
with PISIs order. The guards did not send
their answers to PISI. PISI dismissed the
guards on the ground of insubordination or
willful disobedience to lawful orders of their
employer. During the proceedings before
the Labor Arbiter, the guards justified their
inability to comply with PISIs order to report
to the head office in Metro Manila, saying:
they were residents of Basilan, have families
of their own in Basilan, have never traveled
beyond Visayas and Mindanao, not provided
by PISI with fare money as they cannot, on
their own, finance their travel from Basilan to
Manila. Assuming the allegations of the
guards were true, was the dismissal valid?
A. No, the dismissal was not valid.
Disobedience, to be a just cause for
termination, must be willful and perverse
mental attitude rendering the employees act
inconsistent with proper subordination. A that commissions are excluded from wages
willful or intentional disobedience justifies
dismissal only when the rule, order or
instruction is (1) reasonable and lawful, (2)
sufficiently known to the employee, and (3)
connected with the duties which the
employee has been engaged to discharge.
The reasonableness and lawfulness of a rule
depend on the circumstances of each case.
Reasonableness pertains to the kind or
character of directives and commands and to
the manner in which they are ade. In this
case, the order to report to the Manila office
fails to meet this standard. It was grossly
inconvenient for the guards who were
residents and heads of families in Basilan.
The guards were not provided with funds to
defray their transportation and living
expenses. The dismissal in this case was
too harsh a penalty for the insubordination
which was neither willful nor intentional.
The guards failure to answer PISIs show-
cause letters does not negate this conclusion
as PISI granted other guards a second
chance to explain, an opportunity it denied
Escobin and his group. (Escobin v. NLRC, 289
SCRA 48, April 15, 1998)
Q. Drivers/salesmen and truck helpers of a
softdrinks merchandiser filed a case for
illegal dismissal, underpayment of wages,
and other claims. The Labor Arbiter
decided, among others, that the employer
had not complied with the minimum wage
requirements. In arriving at this conclusion,
the Labor Arbiter refused to include the
commissions paid to the workers in
determining compliance with the minimum
wage requirement. As part of their
compensation, the workers received
commissions per case of softdrinks sold. Is
the Labor Arbiters ruling correct?
A. No, the ruling is erroneous. The definition
of the term wage in the Labor Code
explicitly includes commissions. While
commissions are incentives or forms of
encouragement to inspire workers to put a
little more industry on their jobs, still these
commissions are direct remunerations for
services rendered. There is no law
mandating that commissions be paid only
after the minimum wage has been paid to
the worker. The establishment of a
minimum wage only sets a floor below which
an employees remuneration cannot fall, not
in determining compliance with the minimum
wage law. (Iran v. NLRC, 289 SCRA 433,
April 22, 1998)
Q. In a complaint for illegal dismissal and
unfair labor practices, judgment was
rendered in favor of Buda Labor Union. The
Labor Arbiter ordered the company, Buda
Enterprises to reinstate the individual
complainants and to pay them full
backwages. The decision became final and
executory and a writ of execution was issued.
Parcels of land allegedly belonging to Buda
Enterprises, but later found to be registered
under the names of Co Tuan, S. Ang, J. Lim,
and E Gotamco, were levied upon. Upon
learning of such levy, Co Tuan and his three
other relatives filed an Urgent Motion to
Quash the Writ of Execution claiming that
they hold valid and lawful title to the said
properties by virtue of the Extra-judicial
Settlement and Sale of the Estate of the
Deceased Edilberto Soriano executed by the
heirs. None of the heirs, except Lourdes
Soriano, the proprietress and manager of
Buda Enterprises, were parties in the labor
case. The motion was granted. The
workers appealed and asked the Commission
to order the Labor Arbiter to implead the
movants, praying that the sale between the
movants and Buda Enterprises be declared
void. Is the NLRC competent to determine
the legality of the sale?
A. No. The power of the NLRC to execute its
judgment extends only to properties
unquestionably belonging to the judgment
debtor. If the property under levy does not
belong to the judgment debtor in the NLRC
case, it could not be levied upon by the
sheriff for the satisfaction of the judgment
therein. Even upon a mere prima facie
showing of ownership by the third-party
claimant, if the third party claim does not
involve nor grows out of a labor dispute, a
separate action for injunctive relief against
such levy may be maintained in court. If
there is suspicion that the sale of properties
was not in good faith, i.e. was made in fraud
of creditors, the NLRC is incompetent to
make a determination . The task is judicial
and the proceedings must be adversary. (Co
Tuan v. NLRC, 289 SCRA 415, April 22, 1998)
Q. The Regional Wage Board for Region X
issued Wage Order No. RX-01. Three
corporations filed applications for exemption
as distressed establishments under
Guidelines No. 3 issued by the Regional
Wage Board. Under the Regional Wage
Boards guideline, a corporation is a
distressed establishment if it is engaged in
an industry that is distressed due to
conditions beyond its control. This criterion
is different from the criterion laid down in the
guidelines promulgated by the National
Wages and Productivity Commission. Should
the applications be granted pursuant to the
Regional Wage Boards guidelines?
A. No, the applications should be denied.
The law grants the NWPC, not the Regional
Wage Board, the power to prescribe the
rules and guidelines for the determination
of minimum wage and productivity
measures. While the Regional Wage Board
has the power to issue wage orders, such
wage orders are subject to the guidelines
prescribed by the NWPC. Since the Regional
Wage Boards Guideline No. 3 was not
approved by the NWPC and is contrary to
NWPCs guidelines, the said guideline issued
by the Regional Wage Board is inoperative
and cannot be used by the latter in deciding
on the applications for exemption. (Nasipit
Lumber Company, Inc. v. NWPC, 289 SCRA
667, April 27, 1998)
Q. Virginia was an employee of Judy
Philippines, Inc.. Because of her erroneous
assortment and packaging of 2,680 dozens
of infant wear, the company dismissed her
from employment on the ground of gross
negligence. Virginia committed the
infraction for the first time. Is the dismissal
valid?
A. No, the dismissal is invalid. Gross
negligence implies a want or absence of or
failure to exercise slight care or diligence, or
the entire absence of care. It evinces a
thoughtless disregard of consequences
without exerting any effort to avoid them.
Article 282 (b) of the Labor Code requires
that such neglect must not only be gross, it
should be gross and habitual neglect. The
penalty of dismissal is quite severe here
since the worker committed the infraction for
the first time. (Judy Philippines, Inc. v. NLRC,
289 SCRA 755, April 29, 1998)
Q. In an illegal dismissal case filed by
security guards of Scout Security Agency, the
labor arbiter held Rosewood, Inc., the
principal, jointly and severally liable with the
security agency for wage differential,
backwages, and separation pay. The labor
arbiter stated that Rosewood was liable as
the guards indirect employer under Arts.
106, 107, and 109 of the Labor Code.
Rosewood appealed claiming that it had no
participation in the illegal dismissal of the
guards. Assuming Rosewoods claim is true,
should the labor arbiters ruling be reversed?
A. Yes, the labor arbiters ruling should be
reversed. Under the Labor Code, an
employer is solidarily liable for legal wages
due security guards for the period of time
they were assigned to it by its contracted
security agency. However, in the absence of
proof that the employer itself committed the
acts constitutive of illegal dismissal or
conspired with the security agency in the
performance of such acts, the employer shall
not be liable for backwages and/or
separation pay arising as a consequence of
such unlawful termination. (Rosewood
Processing, Inc. v. NLRC, 290 SCRA 408, May
21, 1998)
Q. In an illegal dismissal case, the Labor
Arbiter upheld the validity of a retrenchment
program implemented by a mining company.
As basis for the ruling, the Labor Arbiter took
judicial notice of the economic difficulties
suffered by the mining sector. Is the ruling
correct?
A. No, the ruling is erroneous. Jurisprudence
prescribes the minimum standards necessary
to prove the validity of a retrenchment: (a)
the losses expected must be substantial and
not merely de minimis in extent; (b) the
substantial losses apprehended must be
reasonably imminent; (c) the retrenchment
must be reasonably necessary and likely to
effectively prevent the expected losses; and
(d) the alleged losses, if already incurred,
and the expected imminent losses sought to
be forestalled must be proved by sufficient
and convincing evidence. In this case, the
retrenchment cannot be considered valid on
the basis of the judicial notice taken by the
Labor Arbiter. (Anino v. NLRC, 290 SCRA 489,
May 21, 1998)
Q. Included in a complaint for illegal
dismissal is a claim for night shift
differentials. The employer did not deny
that the complainant rendered night shift
work. The labor arbiter dismissed the claim
for night shift differentials because the
complainant allegedly failed to substantiate
his claim for night shift differentials. Is the
ruling correct?
A. No, the ruling is erroneous. The fact that
the complainant neglected to substantiate
his claim for night shift differentials is not
prejudicial to his cause. The burden of
proving payment rests on the employer.
The workers claim of non-payment of this
benefit is a negative allegation which need
not be supported by evidence. The worker
cannot adequately prove the fact of non-
payment of the night shift differentials since
the pertinent employee files, payrolls,
records, and other similar documents are not
in his possession but in the custody and
absolute control of petitioner. By choosing
not to fully and completely disclose
information to prove that it had paid all the
nights shift differentials due the worker, the
employer failed to discharge the burden of
proof. (National Semiconductor Distribution,
Ltd. V. NLRC, 291 SCRA 348, June 26, 1998)
Q. After the Labor Arbiter dismissed a
complaint for illegal dismissal, the worker
appealed. The employer was not furnished
a copy of the memorandum of appeal.
Thus, the employer was not aware of the
appeal and did not participate in the appeal
interposed by the worker. Without the
employers participation, the NLRC reversed
the Labor Arbiters decision and ruled in
favor of the appellant worker. Is the
decision valid?
A. No, the NLRCs decision is null and void.
It is a cardinal rule in law that a decision or
judgment is fatally defective if rendered in
violation of a party-litigants right to due
process. The fault lies with the NLRC and
not with the appellant worker. While the
New Rules of Procedure of the NLRC require
proof of service of the appeal on the other
party, non-compliance therewith will present
no obstacle to the perfection of the appeal
nor does it amount to a jurisdictional defect
to the NLRCs taking cognizance thereof.
While the law excuses the appellant from
notifying the other party of the appeal, no
reason can be given by the NLRC that would
exempt it from informing the latter of the
appeal and giving it an opportunity to be
heard. The case should be set for further
proceedings to afford the employer the
opportunity to be heard. (Philippine National
Construction Corporation v. NLRC, 292 SCRA
266, July 10, 1998)
Q. In their answer to a case for illegal
dismissal, the employer filed position papers
supported by affidavits. Subsequently, the
Labor Arbiter ordered the company to pay
wage differentials and other benefits. They
appealed to the NLRC by filing a
supplemental memorandum to correct and
amplify inadequate allegations and certain
omissions. In this appeal, the seek to
introduce new evidence to prove that there
was no employee-employer relationship.
Should the NLRC admit new evidence?

A. No. Hearings had already been scheduled,
yet the employer chose merely to submit
position papers. As such, the company had
every opportunity to submit before the labor
arbiter the evidence which they sought to
adduce before the NLRC. (Santos v. NLRC;
July 23, 1998)
Q. Petitioner was employed as Accounting
Manager entrusted with the evaluation and
assessment of contacts. A contractor
complained that petitioner was asking two
thousand pesos for every contract the
contractor gets from the company. Petitioner
admitted having accepted money on four
different occasions. The company terminated
petitioner on this ground. Was she validly
dismissed?
A. Yes, the companys reliance on petitioners
assessment of contracts was based primarily
on trust and confidence. Her acceptance of
money, even if voluntary on the contractors
part, casts doubt on her integrity. Having
occupied a managerial position, petitioner
maybe dismissed on the ground of loss of
trust and confidence. Even if she was a first-
time offender, a company may resort to acts
of self-defense against a managerial
employee who has breached their trust and
confidence. Furthermore, each of the four
occasions is treated as a separate offense;
hence, militating her plea of first infraction.
(Villanueva v. NLRC; July 27, 1998)
Q. Petitioners were dismissed from service
after they were asked by the company to go
through drug-tests, as the company received
information that they were smoking
something (shabu) inside the work
premises. Petitioners and the company
submitted their respective position papers on
the incident. The Labor Arbiter found the
dismissal based on the position papers as
valid which the NLRC affirmed. Can a full-
blown trial be dispensed with by the labor
arbiter?
A. Yes. Rules of evidence in courts shall not
be controlling in any case brought before the
commission (Art. 221, LC). The Labor Code
allows the labor arbiter and NLRC to decide
the case based on position papers and other
documents. The holding of a trial is
discretionary on the labor arbiter and cannot
be demanded as a matter of right by the
parties. (Suarez v. NLRC; July 31, 1998)
Q. A supervisory employee labor organization
was issued a charter certificate by a national
federation to which the companys rank and
file union was also affiliated` with. It filed a
petition for certification election, opposed by
the company because the union was
allegedly composed of both supervisory and
rank and file employees since both unions
are affiliated with the same federation.
Should the petition for certification elections
be granted?
A. Yes. The affiliation of two local unions in a
company with the same national federation
is not a negation of their independence (as
unions) since in relation to the employer, the
local unions are considered as principals
while the federation is deemed as their
agent. The locals are separate from each
other and their affiliation with the same
federation would not make them members of
the same labor union. A supervisory
organization is prohibited from joining the
same federation as that of the rank and file
organization only if two conditions are
present: 1. The R & F employees are directly
under the authority of supervisory
employees and 2. The national federation is
actively involved in union activities in the
company. (DLSU Medical Center v.
Laguesma; August 12, 1998)
Q. Private respondents were employed by
PAL with a salary of P1,860. They got a
salary increase of P400/mo. for a total
monthly compensation of P2,260 under the
CBA. Subsequently, RA 6640 was passed
raising the minimum wage of worker. Their
salaries were adjusted again by adding P304
pursuant to the RA thus their total gross pay
amounted to P2,565. After four months,
they were promoted and their basic pay of
P1,860 was raised to P2,300/mo. plus the
CBA wage increase of P400/mo. thereby
making their gross pay to P2,700/mo.. The
employees were not satisfied with their gross
pay, invoking the P304 wage increase under
RA 6640. PAL however refused claiming that
the increase of P440 which is the difference
between their new basic salary and their old
basic salary (P2,300-1,860) was sufficient
compliance with the RA. Thus respondents
instituted an action against PAL for violations
of RA 6640. Is the salary increase of the
employees sufficient compliance with RA
6640? Should the CBA increase be credited
to the wage increase under the RA?
A. No. Sec. 7 of the RA prohibits the
diminution of existing benefits and
allowances by workers. Consequently, it was
improper and not allowed by law for
petitioner to apply or consider as
compliance, with the mandated wage hike of
its workers, the salary increases
corresponding to their promotion in rank.
Unlike the Wage Order Nos. 5 and 6 in the
Apex ruling, there is no creditability provision
in RA 6640. It was not the intention of
Congress to credit salary increases by reason
of CBA wage adjustments or promotions in
rank for the mandated wage increase. (PAL v.
NLRC; Sept. 3,1998)
Q. Complaints for illegal dismissal were filed
against respondent. Summons and notices
of hearings were sent to the respondent
which were received by its bookkeeper.
Thereafter, the labor arbiter rendered a
judgment by default after finding that the
respondent tried merely evaded all the
summons and notices by refusing to claim its
mails. Respondent contends that the he was
not validly served with summons since the
bookkeeper cannot be considered an agent
under the Rules of Court and thus the labor
arbiter never acquired jurisdiction over
respondent. Did the labor arbiter acquire
jurisdiction over respondent?
A. Yes. Procedural rules are liberally
construed and applied in quasi-judicial
proceedings. Substantial compliance in this
case is considered adequate. The
bookkeeper can be considered an agent
because his job is integrated with the
corporation. (Pabon v. NLRC, Sept. 24,1998)
Q. Can a company, dissatisfied with the
decision of the Labor Arbiter, file a Motion to
Amend the Order of the Labor Arbiter more
than a month after the date of issuance of
the Order?
A. No. To allow the amendment of the order
will result in the circumvention of Sec. 17 of
the Rules of Procedure of the NLRC which
provide that No Motion for Reconsideration
of any order or decision of the Labor Arbiter
shall be allowed. To permit this would only
allow the petitioner to violate the statutory
10-day period requirement for appeal.
(Schering Employees Labor Union v. NLRC,
Sept. 25,1998)
Q. Respondent was first hired by SMC
(engaged in the manufacture of glass) for a
period of 4 months to repair and upgrade its
furnace. 10 days after his first contract
ended, he was again hired to drain another
furnace for 3 months. Is he a project
employee?
A. Yes. There are two kinds of project
employees: 1.Those employed in a project
usually necessary or desirable in the usual
trade or business (UNOD in UTOB) of the
employer but is separate and distinct from
the other undertaking of the company; or
2.Those not UNOD in UTOB but is also
distinct and separate from the other
undertaking of the company. But both jobs
begin and end at determined or
determinable time. In the case at bar, the
employee falls under the second category.
The process of manufacturing glass requires
a furnace which is to be repaired only after
being used continuously for varying period of
5-10 years. Therefore, the job of the
respondent is a project not UNOD in UTOB.
(SMC v. NLRC, October 7,1998)
Q. Petitioner was employed as an assistant
credit and collection manager. From the
start, he was informed that those not eligible
for membership in the bargaining unit are
not entitled to CBA benefits, but to benefits
at least equivalent or higher than that
provided in the CBA. Subsequently, petitioner
was diagnosed with pulmonary disease,
prompting him to apply for optional
retirement as provided by the CBA. He
wished to retire on July 16,1992 but was
asked by the company to change it to April
30,1992. The employee, due to urgent need,
agreed, for which he received P100,000 as
advances on his retirement pay. Could the
employee avail of the optional retirement
benefit in the CBA? Could the employer vary
the effective date of retirement?
A. Yes, although managerial employees are
not covered by the CBA, the employer
voluntarily agreed to grant them benefits at
least equivalent or higher than that provided
in the CBA. Thus, this agreement is the
applicable retirement contract under the
Labor Code. Moreover, the employer may
vary the effective date of retirement as
petitioner assented to the change, in
consideration for an advance of his
retirement pay. So long as the agreement is
voluntary and reasonable, it is valid.
(Martinez v. NLRC, October 12, 1998)
Q. Respondent employee was a truck driver
who was dismissed because he allegedly
drove while drunk after he chase an office
personnel with a knife. The incident resulted
to the damage of the ten-wheeler truck he
drove. The employee only reported the
incident on March 1993, though it happened
on December 1992. Prior to the accident, he
was already caught stealing diesel fuel from
the company. As a result of these actions, he
was dismissed for serious misconduct. Was
the dismissal valid? Can the company rely
on past offenses to justify the dismissal?
A. No, the reliance by petitioner corporation
on his past offenses to justify his dismissal is
unavailing. The correct rule has always been
that such previous offenses may be used as
valid justification for dismissal from work
only if the infractions are related to the
subsequent offense upon which basis the
termination is decreed. The vehicular
accident causing damage to the truck is not
a just cause for dismissal. The penalty of
dismissal is grossly disproportionate to the
offense of driving through reckless
imprudence resulting in damage to property.
He was likewise deprived of due process as
he was not afforded ample opportunity to be
heard. If after the thirty-day period the
employee does not give his explanation of
what happened, he must again be sent a
notice of dismissal stating the particular acts
constituting the ground for dismissal and an
inquiry why he did not give his explanation.
(La Carlota Planters Association v. NLRC,
October 27, 1998)
Q. PAL entered into a service agreement with
STELLAR Corp., a corporation in the business
of job contracting janitorial services. After
the agreement expired, PAL called for a
bidding but in the meantime allowed
STELLAR to maintain the janitorial contract.
Subsequently, PAL sent a letter to STELLAR
informing them that the contract would no
longer be renewed. STELLAR, terminated
their services, so respondent employees filed
a case for illegal dismissal against PAL and
STELLAR. The NLRC affirmed the decision of
the labor arbiter finding the dismissal illegal.
Was there an employee-employer
relationship existing between PAL and
respondents? And were they illegally
dismissed?
A. No, there is no employee-employer
relationship between PAL and the
respondents. PAL is not engaged in labor-
only contracting evidenced by the service
agreement that it would be STELLAR who will
employ the janitors. PAL was engaged in
permissible job contracting and the
employees were employees of STELLAR not
PAL. However, the employees were illegally
dismissed by STELLAR. They were regular
employees not project employees. A project
employee must be employed in a project
distinct, separate and identifiable from the
main business of the employer and its
duration must be determined or
determinable. While the service agreement
may have had a specific term, STELLAR
disregarded it and repeatedly renewed the
agreement and continued hiring the
respondents for thirteen years. (PAL. V. NLRC,
Nov. 9, 1998)
Q. Several security guards of Sentinel
Security, assigned to PHILAM were found to
have been illegally dismissed. Can PHILAM
be made liable for the payment of
backwages and separation pay of the
illegally dismissed employees?
A. Yes. Although an indirect employer should
not be made liable without a finding that it
had committed or conspired in the illegal
dismissal (Rosewood ruling), in the case at
bar the exoneration of PHILAM was not
included in the dispositive portion of the
Courts decision despite the fact that it was
clearly stated in the body of the decision that
they were exonerated. The decision did not
completely exonerate PHILAM which, as an
indirect employer is solidarily liable with
Sentinel for the complainants unpaid service
incentive leave pursuant to Art. 106, 107 and
109 of the Labor Code. Should the
contractor fail to pay the wages of its
employees in accordance with law, the
indirect employer is jointly and severally
liable with the contractor, but such
responsibility should be understood to be
limited to the extent of work performed
under the contract, in the same manner and
extent that he is liable to the employees
directly employed by him. (Sentinel Security
v. NLRC, Nov. 16,1998)
Q. Producers Bank was placed by the Central
Bank under a conservator to protect its
assets. When the retired employees sought
the implementation of the CBA regarding
their retirement plan and uniform allowance,
the conservator objected, resulting in an
impasse between the bank and the union.
Should the CBA provisions be implemented,
despite the banks status?
A. Yes. The conservator cannot rescind a
valid and existing contract and the CBA is
the law between the contracting parties.
Although the employees are already retired,
retirement does not affect their employment
status when it involves all rights and benefits
due them. The retirement scheme was part
of their employment package and the
benefits under the scheme constituted a
continuing consideration for services
rendered and effective inducement to remain
in the company. The employees were not
pleading for the companys generosity but
were demanding their rights under the CBA.
(Producers Bank v. NLRC, Nov. 16,1998)
Q. After negotiations failed to produce any
agreement, the exclusive bargaining agent of
Coca-Cola decided to file a notice of strike.
Conciliation hearings were conducted but
were unavailing. The union conducted a
strike vote on April 14, which shoed that the
members were in favor of conducting a
strike. On April 20, the union staged the
strike. The company filed a petition to
declare the strike illegal as it was staged
without observing the mandatory seven-day
strike ban and that it was staged in bad faith.
The company then fired alleged union
officers by virtue of the illegal strike. Was the
strike legal? Was the termination of the
employees (allegedly, union officers) valid?
A. The strike was illegal for failure to observe
the mandatory requirements of Articles 264
and 265 of the Labor Code. The failure of the
union to observe the 7-day strike ban made
the strike illegal. While the strike vote was
conducted around 7:30 am to 8:45 am and
the strike held on April 20 was around 8:30
am, the Civil Code states that in computing a
period, the first day shall be excluded and
the last day included; hence the failure to
observe 7 days. However, the dismissal of
the strikers was not valid. The employees
were mere union members and not officers
who should not be dismissed unless they
knowingly participate in illegal acts during a
strike. Although these employees signed the
CBA, nowhere in these documents can it be
found that the cited employees signed it as
union officers. Their active participation in
the negotiations did not render them union
officers. (CCBPI Postmix Workers Union v.
NLRC, Nov. 27,1998)
Q. A case for illegal dismissal was filed
against Orlando Farms Growers Association,
an informal association of landowners
engaged in the production of export quality
bananas. Can an unregistered association be
considered an employer independently of the
respective members it represents?
A. Yes, being an unregistered association and
having been formed solely to serve as an
affective medium for dealing collectively with
another company is not an element of an
employee-employer relationship. The Labor
Code does not require an employer to
register before he may come within the
purview of the said law. (Orlando Farms
Growers Association v. NLRC, Nov. 25,1998)
Q. Respondent employee was recruited for
employment with Gulf Catering Company in
Saudi as a waitress. When she was deployed
to Saudi, she was made to wash dishes,
cooking pots and utensils, janitorial work and
other unrelated jobs in 12-hour shifts without
overtime pay. Due to the strenuous work, she
was confined in a housing facility during
which, she was not paid her salaries. She
worked again after getting well but was not
paid her compensation. Subsequently, she
was hospitalized and went through surgical
operations, again without compensation. She
was then dismissed on the ground of illness
without any separation pay or salary
payment for the periods she was not allowed
to work. She filed a complaint before POEA
against petitioner for underpaid salaries and
damages. Was she illegally dismissed? Is the
employee entitled to the payment of
underpaid salaries?
A. She was illegally dismissed because the
manner by which she was terminated was in
violation of the Labor Code since her illness
was not prohibited by law nor was it
prejudicial to her health as well as that of her
co-employees (Art. 284). Her illness was not
even contagious (Carpal Tunnel Syndrome).
As for the time she was hospitalized and she
was not given any compensation, the no
work-no pay rule does not apply since that
period was due to her illness which was
clearly work-related. (Triple Eight Integrated
Services v. NLRC, Dec. 3, 1998)
Q. Does Section 4, Rule V of the NLRC New
Rules of Procedure require the Labor Arbiter
to propound clarificatory questions to the
parties in order to determine whether a
formal hearing is necessary?
A. There is no legal justification for a
mandatory interpretation. A reading of Sec 4
Rule V of the New Rules of Procedure of the
NLRC readily shows that clarificatory
questions may be propounded to the parties
at the discretion of the LA. Aside from
employing the word may which denotes
discretion negating a mandatory or
obligatory effect, the provision expressly
states that it is discretionary on the part of
the LA. (RDS Trucking vs NLRC, 294 SCRA
NLRC)
Q. Melchor, a taxi driver under the boundary
system, met a vehicular accident. After filing
a report to the office of respondents, he was
allegedly advised to stop working and have a
rest. He thus filed a complaint for illegal
dismissal. The company maintains that
Melchor was not illegally dismissed, there
being in the first place no employer-
employee relationship between them. Is
there an employer-employee relationship
under the boundary system?
A. The employer-employee relationship was
deemed to exist. (Martinez v. NLRC)
The relationship of taxi owners and taxi
drivers is the same as that between jeepney
owners and jeepney drivers under the
boundary system. The taxi operator
exercises control over the driver. In Martinez
v NLRC this court already ruled that the
relationship of taxi owners and taxi drivers is
the same as that between jeepney owners
and jeepney drivers under the boundary
system. In both cases the employer-
employee relationship was deemed to exist,
viz: The relationship between jeepney
owners/operators on one hand and jeepney
drivers on the other under the boundary
system is that of employer-employee and not
of lessor-lessee.xxx Thus, private respondent
were employees xxx because they had been
engaged to perform activities which were
usually necessary or desirable in the usual
trade or business of the employer. (Paguio
Transport Corporation v NLRC, 294 SCRA 65)
Q. Moneral Andal applied with G & M Phils.
Inc. for an overseas employment as a
domestic helper in Riyadh KSA. She was
hired for a term of 2 years (1991-1993) at a
monthly basic salary of $200.00. However,
she was repatriated on 11 Jan 1992. Upon
her repatriation she filed a complaint before
the POEA for illegal dismissal, non-payment
and underpayment of salaries. Impleaded as
co-respondent in the complaint was Empire
Insurance (petitioner), in its capacity as the
surety of G & M. Is Empire solidarily liable
for the payment of the employees monetary
claims?
A. Yes. Petitioner is solidarily liable with its
principal. When Empire entered into
suretyship agreement with G & M Phils Inc it
bound itself to answer for the debt or default
of the latter. Where the surety bound itself
solidarily with the principal obligor, the
former is so dependent on the principal
debtor such that the surety is considered in
law as being the same party as the debtor in
relation to whatever is adjudged touching the
obligation of the latter, and the liabilities are
interwoven as to be inseparable. The
purpose of the required bond is to insure that
the rights of the overseas are violated by
their employer recourse would still be
available to them against the local
companies that recruited them for the
foreign principal. (Empire Insurance
Company v NLRC, 294 SCRA 263)

Q. Private respondent is Samuel L. Bangloy
was a production supervisor and radio
commentator of the DZJC-AM radio station in
Laoag City, owned by MBC. Bangloy
subsequently applied for a leave of absence
in order to run for Board Member in Ilocos
Norte. The company later on informed him
that, as a matter of company policy, any
employee who files a certificate of candidacy
for any elective national or local office would
be considered resigned from the company.
Bangloy nonetheless ran, but lost. Neither
was he permitted to return to work. Is MBCs
policy that any employee who is running for
elective public position shall be considered to
have voluntarily terminated his employment
relations valid?
A. The policy is justified. Working for the
government and the company at the same
time is clearly disadvantageous and
prejudicial to the rights and interest not only
of the company but the public as well. In the
event that the employee loses in the
election, the impartiality and cold neutrality
of an employee as broadcast personality is
suspect, thus readily eroding and adversely
affecting the confidence and trust of the
listening public to employers station. As
such, the dismissal is justified. An employee
may be dismissed for willful disobedience of
the lawful orders of his employer in
connection with his work. (Manila
Broadcasting Company v NLRC, 294 SCRA
486)
Q. What are the requirements for a valid
closure due to retrenchment?
A. The following requirements must be met
to justify retrenchment. First, the loss should
be substantial and not merely de minimis.
Second, the loss must be reasonably
imminent, perceived objectively and in good
faith by the employer. In other words, there
should be a certain degree of urgency for the
retrenchment. Third, the retrenchment must
be reasonably necessary and likely to
effectively prevent the expected losses.
Fourth, the employer should have taken
other measures prior or parallel to
retrenchment to forestall losses, so
retrenchment may only be undertaken as a
last resort. Finally, the alleged losses if
already realized, and the expected imminent
losses to be forestalled must be proven by
sufficient evidence. (Stainless Steel
Corporation v. NLRC, 11 March 1998)
Q. Victoria Abril was employed by PFCCI in
different capacities from 1982-1988, until
she went on maternity leave. Upon her
return in 1989, she discovered that another
person had been appointed to her former
position. Nevertheless, she accepted another
position as evidenced by a contract which
stipulated that her employment would be
probationary for a period of 6 months. After
the period elapsed, she continued to work
until she and her employer entered into
another employment contract for a period of
1 year, after which her employment was
terminated. Abril filed a case for illegal
dismissal. PFCCI claims that her appointment
had been fixed for a specific project, and
should therefore be considered as causal or
contractual employment under Article 280 of
the Labor Code. Was Abril's termination
valid? Is she a regular employee?
A. Article 281 of the Labor Code allows the
employer to secure the services of an
employee on a probationary basis allowing
the employer to terminate the latter for just
cause or upon failure to qualify in accordance
with reasonable standards set forth by the
employer at the time of his employment. A
probationary employee is one who is on trial
by an employer during which the employer
determines whether or not he is qualified for
permanent employment. Probationary
employees, notwithstanding their limited
tenure, are also entitled to security of tenure.
Thus, except for just cause as provided by
law, or under the employment contract a
probationary employee cannot be
terminated.
Under Article 280 of the Labor Code,
there are 3 kinds of employees: regular,
project and casual employees. With respect
to contractual employees, stipulations in
employment contracts providing for term
employment are valid when the period was
agreed upon knowingly and voluntarily by
the parties without force, duress or improper
pressure being brought to bear upon the
employee, and absent any other
circumstances vitiating his consent, or where
is satisfactorily appears that the employer
and employee dealt with each other in more
or less equal terms.
The present employment contract
entered into initially provides that the period
of employment is for a fixed period.
However, the succeeding provisions
contradicted the same when it provided that
respondent would be under probationary
status. Given the ambiguity in the contract,
and following the pronouncement in
Villanueva v. NLRC (10 Sept. 1998), where a
contract of employment, being a contract of
adhesion, is ambiguous, any ambiguity
therein should be construed strictly against
the party who prepared it. Furthermore, all
labor contracts should be construed in favor
of the laborer, pursuant to Article 1702 of the
Civil Code. Thus, notwithstanding the
designation made by PFCCI, having
completed the probationary period and
allowed to work thereafter, Abril became a
regular employee who may be dismissed
only for just or authorized causes under the
Labor Code. Hence, the dismissal, premised
on the expiration of the contract, is illegal.
(Phil. Federation of Credit Cooperatives v.
NLRC, 300 SCRA 72, 11 December 1998)
Q. X was dismissed by her employer, FTH.
Upon her dismissal, FTH withheld 15 days
worth of her salary, and applied it to a Xs
personal loan to the companys general
manager. Both the labor arbiter and the
NLRC approved the deduction of the amount
of the personal loan from Xs salary. Is this
action of the labor arbiter correct?
A. Article 217 of the Labor Code limits the
jurisdiction of labor arbiters to:
(a) unfair labor practice cases;
(b) termination disputes
(c) if accompanied by a claim for
reinstatement, cases involving wages, rates
of pay, hours of work, and other terms and
conditions of employment
(d) claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relations
(e) cases arising from violations of Article
264 of the Labor Code, including questions
on the legality of strikes and lockouts
(f) all other claims from employer-employee
relations, including those of persons in
domestic/household service involving an
amount not exceeding P5,000 regardless of
whether accompanied by a claim for
reinstatement (except for claims of
Employees Compensation, SSS, Medicare
and maternity benefits)
As the personal loan did not arise from
the employer-employee relationship, said
loan is not within the ambit of the Labor
Arbiter's jurisdiction. Moreover, following
Article 217 of the Labor Code, if a claim does
not fall within the exclusive original
jurisdiction of the labor arbiter, the NLRC
cannot have appellate jurisdiction therein.
Thus, the garnishment of Espino's salary was
disregarded. (Food Traders House v. NLRC,
300 SCRA 360, 21 December 1998)
Q. In a case for illegal dismissal, the Labor
Arbiter found the dismissal of X unjustified,
and ordered the employer to reinstate X with
full backwages. On appeal by the company,
the NLRC reversed the labor arbiters
decision, in effect finding the termination
legal. However, the NLRC ordered the
employer to pay Xs wages from 25 January
1991 (date of filing the appeal with the
NLRC) up to 23 September 1993
(promulgation of the NLRC decision),
pursuant to Article 223 of the Labor Code.
Under Article 223 of the Labor Code, the
employer found to have illegally dismissed
an employee is required to reinstate the
employee either actually or through payroll
at the employer's option. Does this
requirement need execution of enforcement?
Or was the LA's decision immediately self-
executory?
A. While the interpretation of Article 223 has
been divergent, the Court in the 1997
Pioneer Case laid down the doctrine that
henceforth an award or order for
reinstatement is self-executory, and does not
require a writ of execution, much less a
motion for its issuance. Article 224 only
applies to final and executory decisions
which are not within the coverage of Article
223. Thus, the employer was bound to either
re-admit X or include him in the payroll, and
inform X of its choice in order to enable him
to act accordingly. Failing to exercise these
options, the company must pay his salary,
which automatically accrued from notice of
the LA's order until its reversal by the NLRC.
International Container Terminal Services,
Inc. v. NLRC 300 SCRA 335 (21 December
1998)

Q. Eduardo Felipe, employee of Hyundai
Engineering and Construction Co., through its
local agent Omanfil, perished in an accident.
Hyundai deposited 14,400 Malaysian Ringgit
as Felipe's death benefits in the Melacca
labor office. This was done pursuant to
Section 8 of Malaysia's labor law, which
provides that death benefits in a lump sum
equal to 45 months earnings ($27,902.02) or
MR 14,400 shall be awarded, whichever is
less. Felipe's widow alleged that the amount
should be US$27,902.02, and that the
deposit made by Hyundai to the Melacca
labor office did not constitute payment.
What amount is the Felipe family entitled to?
A. The Felipe's are entitled to MR 14,400, in
compliance with the provisions of Malaysia's
labor law. A manning agency cannot be
faulted for following applicable foreign law.
As a result, Omanfil has discharged its
monetary obligation to Mrs. Felipe. (Omanfil
International Manpower Devt. Corp v. NLRC,
300 SCRA 454 ,22 December 1998)
Q. X was one of the 2 employees of Gandara
Mill Supply. In February 1995, X did not
report to work for 2 weeks, and when he
returned, he was informed that someone had
been hired to replace him. However he was
advised that he was to be readmitted in June
of 1996. Was there an illegal dismissal?
A. Admittedly, it is unclear whether
respondent was actually dismissed. However,
there is no indication that he was to be
reinstated. In effect, the offer to re-admit
Germano was merely a gesture used to
mitigate the impact of his extended
suspension. This is contrary to the explicit
provisions of the Labor Code, which provide
that no preventive suspension should last
more than 30 days. As the supposed
suspension was expected to last for more
than the period allowed by law, the
suspension constitutes an illegal dismissal.
Even assuming that X's absence
caused difficulty to the company, his
dismissal was unwarranted. Given the
constitutional mandate of protection to labor,
the rigid rules of procedure may sometimes
be dispensed with to give room for
compassion. In calling for the protection of
labor, the Constitution does not condone
wrongdoing by the employee, it nevertheless
urges a moderation of the sanctions to be
applied, in the light of the many
disadvantages of laborers. (Gandara Mill
Supply v. NLRC, 300 SCRA 702, 29 December
1998)
Q. The offices and factory of Master Shirt Co.
were burned, so the company had to cease
operations. Management and the union held
a conference with the NCMB, where they
agreed that the company would try to
resume operations ASAP, but if this did not
occur within 6 months, the workers would be
paid their corresponding separation benefits.
After 6 months, the company failed to
resume operations, but the company refused
to grant separation pay, for it had not
recovered on their claim for damages against
their insurance company. The union and its
members filed a complaint for illegal
dismissal, separation pay and damages
against Manila Shirt Co. Are the employees
entitled to separation pay?
A. Separation pay is paid to an employee
whose services are validly terminated as a
result of retrenchment, suspension, closure
of business or disease. IT does not
necessarily follow that if there is no illegal
dismissal, no award of separation pay may
be made. The basis for the award in this case
is the agreement entered into between the
company and the employees. The agreement
is the law between the parties and must be
enforced. The claim for damages is
unavailing, in the absence of malice or bad
faith. (Master Shirt Co. v. NLRC, 300 SCRA
649, 29 December 1998)
Thank you to Cris, Yumi, Andrew and Sten.
1997 CASES
Q. In an illegal dismissal case, the Labor
Arbiter ruled in favor of the complainant and
ordered his reinstatement. The employer
appealed. Refusing to reinstate the worker
pending appeal, the employer claims that
the order of reinstatement needs a writ of
execution. The employer further maintains
that even if a writ of execution was issued, a
timely appeal coupled by the posting of
appropriate supersedeas bond effectively
forestalled and stayed the execution of the
Labor Arbiters reinstatement order. Is the
employers contention correct?
A. No, the employers contention is
erroneous. The law as now worded employs
the phrase shall immediately be executory
without qualification emphasizing the need
for prompt compliance. The term shall
denotes an imperative obligation and is
inconsistent with the idea of discretion. The
Labor Arbiters order of reinstatement does
not need a writ of execution. It is self-
executory. The posting of a bond by the
employer shall not stay the execution for
reinstatement. After receipt of the decision
ordering reinstatement, the employer has
the right to chose whether to re-admit the
employee to work under the same terms and
conditions prevailing prior to his dismissal or
to reinstate the employee in the payroll. In
either instance, the employer has to inform
the employee of his choice. (Pioneer
Texturizing Corp. v. NLRC, 280 SCRA 806,
October 16, 1997)
Q. When can R.A. No. 7641 (Retirement Pay
Law), which took effect on January 7, 1993,
be given retroactive effect?
A. R.A. 7641 may be given retroactive effect
where (1) the claimant for retirement
benefits was still the employee of the
employer at the time the statute took effect;
and (2) the claimant was in compliance with
the requirements for eligibility under the
statute for such retirement benefits. Thus,
the law can apply to labor contracts still
existing at the time the statute took effect
and its benefits can be reckoned not only
from the date of the laws enactment but
retroactively to the time said employment
contracts have started. (Cabcaban v. NLRC,
277 SCRA 671, August 18, 1997)
Q. An insurance agent was required to solicit
business exclusively for AFP Mutual Benefit
Association, Inc. pursuant to an Insurance
Commission regulation. He was also bound
by company policies, memo/circulars, rules
and regulations issued by the company
relating to payment of the agents
accountabilities, availment by the agent of
cash advances, incentives and awards, and
other matters concerning the selling of
insurance, in accordance with the rules
promulgated by the Insurance Commission.
Given this set of facts, can the insurance
agent be considered an employee of the
company?
A. No, the facts are not sufficient to support
the conclusion that there exists an employer-
employee relationship between the agent
and the company. The significant factor in
determining the relationship of the parties is
the presence or absence of supervisory
authority to control the method and the
details of performance of the service being
rendered, and the degree to which the
principal may intervene to exercise such
control. Not every form of control, however,
may be accorded the effect of establishing
an employer-employee relationship. There
is a difference between rules that merely
serve as guidelines towards the achievement
of the mutually desired result without
dictating the means or methods to be
employed in attaining it, and those that
control or fix the methodology and bind or
restrict the party hired to the use of such
means. The first, which aim only to promote
the result, create no employer-employee
relationship unlike the second, which address
both the result and the means used to
achieve it. In this case, the rules that the
agent should follow merely aim to promote
the result desired, primarily to conform to
the requirements of the Insurance
Commission. (AFP Mutual Benefit
Association v. NLRC, 267 SCRA 47, January
28, 1997)
Q. An employer appealed from the Labor
Arbiters decision. Instead of posting cash
or surety bond, the employer posted a Real
Estate Bond consisting of land and various
improvements. Is such property bond
allowed?
A. While Article 223 of the Labor Code
provides that an appeal by the employer
may be perfected only upon the posting of
cash or surety bond, this provision should be
given a liberal interpretation. This policy
stresses the importance of deciding cases on
the basis of their substantive merit and not
on strict technical rules. When the real
property bond sufficiently protects the
interests of the workers should they finally
prevail, the appeal should be allowed.
(UERM-Memorial Medical Center v. NLRC, 269
SCRA 70, March 3, 1997)
Q. CFTI, a close family corporation owned by
the Naguiat family, stopped its taxi business
within Clark Air Base because of the phase-
out of U.S. military presence at the said
installation. In an illegal dismissal
complaint filed by CFTIs dismissed
employees, the Labor Arbiter ruled that
Sergio Naguiat, CFTIs president who had
actively engaged in the management and
operation of the corporation, was solidarily
liable with CFTI for the separation pay due
the employees. Is the Labor Arbiters ruling
correct?
A. Yes, the ruling is correct. Sergio Naguiat
can be held solidarily liable with the
corporation. First, as the president of CFTI
who actively managed the business, Naguiat
falls within the meaning of an employer as
contemplated by the Labor Code, who may
be held jointly and severally liable for the
obligations of the corporation to its
dismissed employees. Second, Section 100
of the Corporation Code states that
stockholders actively engaged in the
management or operation of the business of
a close corporation shall be personally liable
for corporate torts unless the corporation has
obtained reasonably adequate liability
insurance. Tort is a breach of a legal duty.
Since the Labor Code mandates the payment
of separation pay to employees in case of
closure or cessation of operations not due to
business losses, failure to comply with this
law-imposed duty can be considered a
corporate tort. Hence, pursuant to the
Corporation Code, Naguiat should be held
solidarily liable for this corporate tort. In
this case, the rule that a corporate officer
cannot be held solidarily liable with a
corporation in the absence of evidence that
he acted in bad faith is not applicable.
(Naguiat v. NLRC, 269 SCRA 564, March 13,
1997)
***In another case, the Court held:
The fictional veil of a corporation can be
pierced by the very same law which created
it when the notion of the legal entity is used
as a means to perpetrate fraud, an illegal
act, as a vehicle for the evasion of an
existing obligation, and to confuse legitimate
issues. Under the Labor Code, for instance,
when a corporation violates a provision
declared to be penal in nature, the penalty
shall be imposed upon the guilty officer or
officers of the corporation.
To justify solidary liability, there must be
an allegation or showing that the officers of
the corporation deliberately or maliciously
designed to evade the financial obligation of
the corporation to its employees, or a
showing that the officers indiscriminately
stopped its business to perpetrate an illegal
act, as a vehicle for the evasion of existing
obligations, in circumvention of statutes, and
to confuse legitimate issues. (Reahs
Corporation v. NLRC, 271 SCRA 247, April 15,
1997)
Q. Purificacion was a founding member, a
member of the Board of Trustees, and the
corporate secretary of pamana Golden Care
Medical Center Foundation, a non-stock
corporation engaged in extending medical
and surgical services. In 1990, the Board of
Trustees issued a memorandum appointing
Purificacion as Medical Director and Hospital
Administrator of the foundations medical
center. A medical director and aa hospital
administrator are considered as corporate
officers under the foundations by-laws.
When the Board of Trustees relieved
Purificacion of her position as Medical
Director and Hospital Administrator, she filed
a complaint for illegal dismissal and non-
payment of wages before the Labor Arbiter.
Does the Labor Arbiter have jurisdiction over
the case?
A. No, the Labor Arbiter has no jurisdiction
over the case. The Securities and Exchange
Commission has jurisdiction. The charges
filed by Purificacion partake of the nature of
an intra-corporate controversy. An office is
created by the charter of the corporation and
the officer is elected by the directors or
stockholders. On the other hand, an
employee usually occupies no office and
generally is employed not by action of the
directors or stockholders but by the
managing officer of the corporation who also
determines the compensation to be paid
such employee. In this case, Purificacion
was appointed by the Board of Trustees to
offices stated in the by-laws. She is
deemed an officer of the corpporation. An
officers dismissal is always a corporate act,
or an intra-corporate controversy, and the
nature is not altered by the reason or
wisdom which the Board of Directors may
have in taking such action. The question of
remuneration of an officer is likewise not a
simple labor problem but a matter that
comes within the area of corporate affairs
and management and is a corporate
controversy. (Tabang v. NLRC, 266 SCRA
462, January 21, 1997)
Q. Reformist Union, a labor union staged a
strike against R.B. Liner in 1989. R.B. Liner
petitioned the Secretary of Labor to assume
jurisdiction over the dispute or certify it to
the NLRC. The Secretary certified the case
to the NLRC for compulsory arbitration. The
certified case was dismissed after the union
and the company reached an agreement
providing, among others, for the holding of a
certification election. Later, when the union
filed a complaint for unfair labor practice
against the company, i.e. illegal lockout that
allegedly took place after the strike and the
election, R.B. Liner countered with another
case that sought to declare the 1989 strike
illegal. Can the company still contest the
legality of the 1989 strike?
A. No, the company can no longer contest
the legality of the strike. The company itself
sought compulsory arbitration in order to
resolve that very issue. The dispute or
strike was settled when the company and the
union entered into an agreement. By
acceding to the peaceful settlement brokered
by the NLRC, the company waived the issue
of the illegality of the strike. The very
nature of compulsory arbitration makes the
settlement binding upon the company.
Compulsory arbitration has been defined
both as the process of settlement of labor
disputes by a government agency which has
the authority to investigate and to make an
award which is binding on all the parties,
and as a mode of arbitration where the
parties are compelled to accept the
resolution of their dispute through arbitration
by a third party. Clearly, the legality of the
strike can no longer be reviewed. (Reformist
Union of R.B. Liner, Inc. v. NLRC, 266 SCRA
713, January 27, 1997)
Q. From 1953 until 1991, Honorio worked as
maintenance man, carpenter, plumber,
electrician and mason at the Tanjangco
apartments and residential buildings. In
short, he took charge of the maintenance
and repair of the buildings. He reported for
work from 7:00 a.m. to 4:00 p.m.. He earned
P180 a day (latest salary). When Honorio
filed a complaint for illegal dismissal,
Tanjangco claimed that Honorio was an
independent contractor. Tanjangco further
claimed that even assuming that Honorio can
be considered an employee, he was merely a
project employee whose services were hired
only with respect to a specific job and only
while the same exists.
(a) On the basis of this set of facts, can
Honorio be considered an independent
contractor?
A. No, Honorio was not an independent
contractor but an employee of Tanjangco.
He was not compensated in terms of profits
for his labor orservices like an independent
contractor. Rather, he was paid on a daily
wage basis. It is absurd to expect that with
such humble resources, Honorio woulld have
substantial capital or investment in the form
of tools, equipment, and machineries with
which to conduct the business of supplying
Tanjangco with manpower and services for
maintaining the apartments and buildings.
The most important requisite of control that
determines the existence of an employer-
employee relationship is present. The
power of control refers merely to the
existence of the power and not to the actual
exercise thereof. Naturally, Honorios work
as maintenance man had to be performed
within the premises of Tanjangco. It is not
far-fetched to expect that Honorio had to
observe the instructions and specifications
given by Tanjangco as to how his work had to
be performed. Tanjangco could easily
exercise control on Honorio.
b) What kind of an employee is Honorio?
A. Honorio is a regular employee. There are
two kinds of regular employees: (1) those
who are engaged to perform activities which
are usually necessary or desirable in the
usual trade or business 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. Whichever standard is
applied, Honorio qualifies as a regular
employee. Honorio cannot be considered a
project employee. If he was employed as a
project employee, Tanjangco should have
submitted a report of termination to the
nearest public employment office everytime
his employment is terminated due to
completion of each project, as required by
Policy Instruction No. 20. There should
have been filed as many reports of
termination as there were projects actually
finished. (Aurora Land Projects Corp. v.
NLRC, 266 SCRA 48, January 2, 1997)
Q. Antonio was hired by Orient Express as
crane operator subject to a 3-month
probationary period. After only one month
and five days, he was dismissed. When he
filed a complaint for illegal dismissal, Orient
Express claimed that he was terminated for
poor job performance. Orient Express did
not inform Antonio about the standards of
work required of him by which his
competency would be adjudged. When he
was dismissed, Orient Express did not point
out the reasonable standards of work by
which he was evaluated and how he failed to
live up to such standards. Is the dismissal
valid?
A. No, the dismissal is not valid. The
services of an employee hired on a
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 his engagement. Antonios
dismissal cannot be sustained on this ground
because Orient Express failed to specify the
reasonable standards by which Antonios
alleged poor performance was evaluated,
much less to prove that such standards were
made known to him at the time of his
recruitment. (Orient Express Placement
Philippines v. NLRC, 273 SCRA 256, June 11,
1997)
Q. Capili was an instructor of a private
educational institution. In 1993, the school
informed Capili that he would be eligible for
retirement when he would reach the age of
60 years. Capili answered that he was not
opting to retire but would continue to serve
until he reaches the age of 65. When the
school reiterated its position that it could
retire him, Capili filed a complaint
questioning his forced retirement. Later,
after receiving the Labor Arbiters decision
but before filing his appeal, Capili received
partial payment of his retirement pay.
During the pendency of his apppeal with the
NLRC, he received full payment of his
retirement benefiits.
a) Can an employee be compelled to retire at
the age of sixty years?
A. No, an employee cannot be compelled to
retire at the age of sixty years in the absence
of a provision on retirement in the CBA or if
the employer has no retirement plan. Under
the Labor Code, as amended by R..A. NO.
7641, the option of the employer to retire an
employee at age 60 no longer exists. Under
the present rule, the option to retire upon
reaching the age of 60 years or more but not
beyond 65 is the exclusive prerogative of the
employee if there is no provision on
retirement in the CBA or any agreement or if
the employer has no retirement plan.
b) Will the subsequent acceptance of
retirement benefits estop an employee
from pursuing his complaint questioning the
validity of his forced retirement?
A. Yes, the acceptance of retirement benefits
will estop the employee from pursuing his
case. By accepting the retirement benefits,
the employee is deemed to have opted to
retire under the present rule stated above.
(Capili v. NLRC, 273 SCRA 576, June 17,
1997)
Q. Can an employee unilaterally withdraw
his/her resignation?
A. No, an employee cannot unilaterally
withdraw his/her resignation. Resignation,
once accepted, may not be withdrawn
without the consent of the employer. If the
employer consents to the withdrawal, the
employee retains the job. If the employer
does not, the employee cannot claim illegal
dismissal. To say that an employee who has
resigned is illegally dismissed is to encroach
upon the right of the employers to hire
persons who will be of service to them. An
employment contract is consensual and
voluntary. If the resignation is accepted by
the employer, its consequent effect is
severance of the contract of employment. A
resigned employee who desires to take his
job back has to reapply therefor and cannot
demand an appointment. (Philippines
Today, Inc. v. NLRC, 267 SCRA 202, January
30, 1997)
Q. Can the employer dismiss an employee
who is afflicted with pulmonary tuberculosis?
A. Yes, but only if there is a prior certification
from a competent public authority that the
disease afflicting the employee sought to be
dismissed is of such nature or at such stage
that it cannot be cured within six (6) months
even with proper medical treatment. The
fact that an employee is suffering from a
disease and whose continued employment is
prohibited by law or is prejudicial to his
health as well as to that of his co-employees
does not ipso facto make the employee a
candidate for dismissal. (Tan v. NLRC, 271
SCRA 216, April 14, 1997)
Q. In the proceedings before the Labor
Arbiter, only the unregistered trade name of
the employercorporation, Hacienda
Lanutan, and its administrator-manager
were impleaded and subsequently held liable
for illegal dismissal. On appeal, the NLRC
motu proprio included the corporate name of
the employer as jointly and severally liable
for the workers claims. There is no dispute
that Hacienda Lanutan which was owned
solely by the employer-corporation was
impleaded and heard. It was represented by
its corporate officer in the proceedings
before the Labor Arbiter. Is the NLRCs
action justified?
A. Yes, the action is justified. In quasi-
judicial proceedings, procedural rules
governing service of summons are not
strictly construed. Substantial compliance
thereof is sufficient. In labor cases,
punctillious adherence to stringent technical
rules may be relaxed in the interest of the
worker; it should not defeat the complete
and equitable resolution of the rights and
obligations of the parties. Furthermore, the
NLRC is given the power to correct, amend,
or waive any error, defect or irregularity
whether in the substance or in the form of
the proceedings before it. The non-inclusion
of the corporate name of the employer was a
mere procedural error which did not at all
affect the jurisdiction of the labor tribunals.
(Pison-Arceo Agricultural and Development
Corp. v. NLRC, 279 SCRA 312, September 18,
1997)
The State is bound under the Constitution to
afford full protection to labor and when
conflicting interests of labor and capital are
to be weighed
on the scales of social justice
the heavier influence of the latter should be
counterbalanced
with the sympathy and compassion
the law accords the less privileged worker.
This is only fair
if the worker is to be given the opportunity
and the right
to assert and defend his/her cause
not as a subordinate
but as part of management with which
he/she can negotiate on even plane.
Thus labor is not a mere employee of capital
but its active and equal partner.
(Fuentes v. NLRC, 266 SCRA 24, January 2,
1997)
http://dc261.4shared.com/web/textFile/textPr
eview?
fid=766760208&sId=7OJFwbDum6VcrmTL&h
ttpSessId=ABC736AEA3B20EFEC9337CAC9D
006652.dc328