22. INTEGRATED CONTRACTOR AND PLUMBING WORKS, INC.

VS
NLRC

GR. 152427 AUG. 9, 2005

ISSUE:

W/N the Court of Appeals erred seriously in awarding 13th month pay for the entire
year of 1997 and service incentive leave pay to the respondent and without taking
cognizance of the evidence presented by petitioner.
W/N a project employee can be deemed as a regular employee?

RULING:

Yes, we note that the private respondent had been paid his 13th month pay for the year
1997. The Court of Appeals erred in granting the same to him.

Article 95(a) of the Labor Code governs the award of service incentive leave. It provides
that every employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay, and Section 3, Rule V, Book III of the
Implementing Rules and Regulations, defines the term "at least one year of service" to
mean service within 12 months, whether continuous or broken reckoned from the date
the employee started working, including authorized absences and paid regular holidays,
unless the working days in the establishment as a matter of practice or policy, or that
provided in the employment contract is less than 12 months, in which case said period
shall be considered as one year. Accordingly, private respondents service incentive
leave credits of five days for every year of service, based on the actual service rendered
to the petitioner, in accordance with each contract of employment should be computed
up to the date of reinstatement pursuant to Article 279 of the Labor Code.

Yes, in Maraguinot, Jr. v. NLRC17 we ruled that once a project or work pool employee
has been: (1) continuously, as opposed to intermittently, re-hired by the same employer
for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and
indispensable to the usual business or trade of the employer, then the employee must
be deemed a regular employee.

The test to determine whether employment is regular or not being the reasonable
connection between the particular activity performed by the employee in relation to the
usual business or trade of the employer. Also, if the employee has been performing the
job for at least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its performance as
sufficient evidence of the necessity, if not indispensability of that activity to the
business. Thus, we held that where the employment of project employees is extended
long after the supposed project has been finished, the employees are removed from the
scope of project employees and are considered regular employees.
While length of time may not be the controlling test for project employment, it is vital
in determining if the employee was hired for a specific undertaking or tasked to perform
functions vital, necessary and indispensable to the usual business or trade of the

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employer. Here, private respondent had been a project employee several times over.
His employment ceased to be coterminous with specific projects when he was
repeatedly re-hired due to the demands of petitioners business. Where from the
circumstances it is apparent that periods have been imposed to preclude the acquisition
of tenurial security by the employee, they should be struck down as contrary to public
policy, morals, good customs or public order.
Further, Policy Instructions No. 20 requires employers to submit a report of an
employees termination to the nearest public employment office every time his
employment was terminated due to a completion of a project. The failure of the
employer to file termination reports is an indication that the employee is not a project
employee. Department Order No. 19 Superseding Policy Instructions No. 20 also
expressly provides that the report of termination is one of the indications of project
employment. In the case at bar, there was only one list of terminated workers
submitted to the Department of Labor and Employment. If private respondent was a
project employee, petitioner should have submitted a termination report for every
completion of a project to which the former was assigned.

2
23. JPL MARKETING PROMOTIONS
VS
CA

GR. 151966 JULY. 8, 2005

ISSUE:

W/n employees falling under the cases of Art. 283 and 284 of the Labor Code are the
only ones entitled to separation pay?
W/n employees who voluntarily severed their relations with their employer entitled to
separation pay?
and granting that they are so entitled, what should be the reckoning point for
computing said awards

RULING:

No, Under Arts. 283 and 284 of the Labor Code, separation pay is authorized only in
cases of dismissals due to any of these reasons: (a) installation of labor saving devices;
(b) redundancy; (c) retrenchment; (d) cessation of the employer's business; and (e)
when the employee is suffering from a disease and his continued employment is
prohibited by law or is prejudicial to his health and to the health of his co-employees.
However, separation pay shall be allowed as a measure of social justice in those cases
where the employee is validly dismissed for causes other than serious misconduct or
those reflecting on his moral character, but only when he was illegally dismissed. In
addition, Sec. 4(b), Rule I, Book VI of the Implementing Rules to Implement the Labor
Code provides for the payment of separation pay to an employee entitled to
reinstatement but the establishment where he is to be reinstated has closed or has
ceased operations or his present position no longer exists at the time of reinstatement
for reasons not attributable to the employer.

The common denominator of the instances where payment of separation pay is

warranted is that the employee was dismissed by the employer. In the instant case,
there was no dismissal to speak of. Private respondents were simply not dismissed at all,
whether legally or illegally. What they received from JPL was not a notice of termination
of employment, but a memo informing them of the termination of CMCs contract with
JPL. More importantly, they were advised that they were to be reassigned. At that time,
there was no severance of employment to speak of.

Furthermore, Art. 286 of the Labor Code allows the bona fide suspension of the
operation of a business or undertaking for a period not exceeding six (6) months,
wherein an employee/employees are placed on the so-called "floating status." When
that "floating status" of an employee lasts for more than six months, he may be
considered to have been illegally dismissed from the service. Thus, he is entitled to the
corresponding benefits for his separation, and this would apply to suspension either of
the entire business or of a specific component thereof.

No, as clearly borne out by the records of this case, private respondents sought
employment from other establishments even before the expiration of the six (6)-month
period provided by law. As they admitted in their comment, all three of them applied
for and were employed by another establishment after they received the notice from

3
 JPL. JPL did not terminate their employment; they themselves severed their relations
with JPL. Thus, they are not entitled to separation pay.

The Court is not inclined in this case to award separation pay even on the ground of
compassionate justice. The Court of Appeals relied on the cases wherein the Court
awarded separation pay to legally dismissed employees on the grounds of equity and
social consideration. Said cases involved employees who were actually dismissed by
their employers, whether for cause or not. Clearly, the principle applies only when the
employee is dismissed by the employer, which is not the case in this instance. In seeking
and obtaining employment elsewhere, private respondents effectively terminated their
employment with JPL.

While computation for the 13th month pay should properly begin from the first day of
employment, the service incentive leave pay should start a year after commencement of
service, for it is only then that the employee is entitled to said benefit. On the other
hand, the computation for both benefits should only be up to 15 August 1996, or the
last day that private respondents worked for JPL. To extend the period to the date of
finality of the NLRC resolution would negate the absence of illegal dismissal, or to be
more precise, the want of dismissal in this case. Besides, it would be unfair to require
JPL to pay private respondents the said benefits beyond 15 August 1996 when they did
not render any service to JPL beyond that date. These benefits are given by law on the
basis of the service actually rendered by the employee, and in the particular case of the
service incentive leave, is granted as a motivation for the employee to stay longer with
the employer. There is no cause for granting said incentive to one who has already
terminated his relationship with the employer.

The law in protecting the rights of the employees authorizes neither oppression nor self-
destruction of the employer. It should be made clear that when the law tilts the scale
of justice in favor of labor, it is but recognition of the inherent economic inequality
between labor and management. The intent is to balance the scale of justice; to put the
two parties on relatively equal positions. There may be cases where the circumstances
warrant favoring labor over the interests of management but never should the scale be
so tilted if the result is an injustice to the employer. Justitia nemini neganda est (Justice
is to be denied to none).

4
24. REPUBLIC PLANTERS BANK
VS
NLRC

GR. 117460 JAN. 6, 1997

ISSUE:

W/n a CBA for rank-and-file employees which is the existing CBA upon retirement of an
officer, instead of the expired CBA, should be used as basis in computing the gratuity
pay of its retiring officers?

RULING:

No. Per a decided case: Prior to private respondents resignation, there were other
managerial employees who resigned and/or retired from petitioners employ who
received their corresponding gratuity benefits and the cash value of their accumulated
leave credits pursuant to the provisions of the old CBA of 1971-73 despite its expiration
in 1976.

Under Section 14(a), Rule 1 of the Rules and Regulations Implementing Book VI of the
Labor Code, it is provided:
Sec. 14. Retirement Benefits. (a) An employee who is retired pursuant to a bonafide
retirement plan or in accordance with the applicable individual or collective agreement
or established employer policy shall be entitled to all the retirement benefits provided
therein.

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25. MAYON HOTEL AND RESTAURANT
VS
ADANA

GR. 157634 MAY. 16, 2005

ISSUE:

W/n respondents were illegally dismissed by petitioner?

W/n respondents are entitled to their money claims due to underpayment of wages,
and nonpayment of holiday pay, rest day premium, SILP, COLA, overtime pay, and night
shift differential pay?

RULING:

Illegal Dismissal: claim for separation pay

Since April 1997 until the time the Labor Arbiter rendered its decision in July 2000, or
more than three (3) years after the supposed temporary lay-off, the employment of
all the respondents with petitioner had ceased, notwithstanding that the new premises
had been completed and the same resumed its operation. This is clearly dismissal or
the permanent severance or complete separation of the worker from the service on the
initiative of the employer regardless of the reasons therefor.
Article 286 of the Labor Code is clear there is termination of employment when an
otherwise bona fide suspension of work exceeds six (6) months. The cessation of
employment for more than six months was patent and the employer has the burden of
proving that the termination was for a just or authorized cause.

While we recognize the right of the employer to terminate the services of an employee
for a just or authorized cause, the dismissal of employees must be made within the
parameters of law and pursuant to the tenets of fair play. And in termination disputes,
the burden of proof is always on the employer to prove that the dismissal was for a just
or authorized cause. Where there is no showing of a clear, valid and legal cause for
termination of employment, the law considers the case a matter of illegal dismissal.

If doubts exist between the evidence presented by the employer and the employee, the
scales of justice must be tilted in favor of the latter the employer must affirmatively
show rationally adequate evidence that the dismissal was for a justifiable cause. It is a
time-honored rule that in controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation of agreements and writing
should be resolved in the former's favor. The policy is to extend the doctrine to a
greater number of employees who can avail of the benefits under the law, which is in
consonance with the avowed policy of the State to give maximum aid and protection of
labor.

Money claims. The Supreme Court reinstated the award of monetary claims granted by
the Labor Arbiter.

The cost of meals and snacks purportedly provided to respondents cannot be deducted
as part of respondents' minimum wage. As stated in the Labor Arbiter's decision.
Even granting that meals and snacks were provided and indeed constituted facilities,
such facilities could not be deducted without compliance with certain legal

6
requirements. As stated in Mabeza v. NLRC, the employer simply cannot deduct the
value from the employee's wages without satisfying the following: (a) proof that such
facilities are customarily furnished by the trade; (b) the provision of deductible facilities
is voluntarily accepted in writing by the employee; and (c) the facilities are charged at
fair and reasonable value. The law is clear that mere availment is not sufficient to allow
deductions from employees' wages.

As for petitioners repeated invocation of serious business losses, suffice to say that this
is not a defense to payment of labor standard benefits. The employer cannot exempt
himself from liability to pay minimum wages because of poor financial condition of the
company. The payment of minimum wages is not dependent on the employer's ability
to pay.

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26. MABEZA
VS
NLRC

GR. 118506 APR. 18, 1997

ISSUE:

W/n such amenities provided by the hotel be considered as facilities which are
deductible from Mabezas wage.

RULING:
No. There are requisites before such can be done and they are:1. Proof must be shown
that such facilities are customarily furnished by the trade.2. The provision of deductible
facilities must be voluntarily accepted in writing by the employee.3.Facilities must be
charged at fair and reasonable value. None of these were complied with in the case at
bar. More significantly, the food and lodging, or the electricity and water consumed by
Mabeza were not facilities but supplements. A benefit or privilege granted to an
employee for the convenience of the employer is not a facility. The criterion in making a
distinction between the two not so much lies in the kind (food, lodging) but the
purpose. Considering, therefore, that hotel workers are required to work different shifts
and are expected to be available at various odd hours, their ready availability is
a necessary matter in the operations of a small hotel, such as Hotel Supreme.