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COMPILATIONS OF DOCTRINES IN LABOR

RELATIONS

Submitted to:

ATTY. AGNES ALEXIS LUCERODE GRANO


A.Y. 2017-2018
(First Semester)

Submitted by:
DIMAL, JohanesHenrik M.
BERGONIA, Elira Jane S.
MELEGRITO, Ma. Alexia R.
MAHINAY, Marian Gizelle M.
REYNES, Abigail C.
TORRALBA, Roanna Angelica G.
TANGHAL, Noelle Christine P.
HINGAN, John Renan G.
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Interpretation and Application of Laws

PNCC Skyway Traffic Management and Security Division


Workers Organization v. PNCC Skyway Corp., G.R. No.
171231, February 17, 2010

Doctrine: The rule is that where the language of a contract is


plain and unambiguous, its meaning should be determined
without reference to extrinsic facts or aids. The intention of the
parties must be gathered from that language, and from that
language alone. Stated differently, where the language of a
written contract is clear and unambiguous, the contract must be
taken to mean that which, on its face, it purports to mean, unless
some good reason can be assigned to show that the words used
should be understood in a different sense.

Social Justice

PLDT v. NLRC, G.R. No. 80609, August 23, 1988

Doctrine: The Court held that the separation pay shall be


allowed as a measure of social justice only in those instances

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where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual
intoxication or an offense involving moral turpitude, like theft or
illicit sexual relations with a fellow worker, the employer may not
be required to give the dismissed employee separation pay, or
financial assistance, or whatever other name it is called, on the
ground of social justice.

Police Power

Philippine Association of Service Exporters, Inc. v. Drilon,


G.R. No. 81958, June 30, 1988

Doctrine: The concept of police power is well-established in this


jurisdiction. It has been defined as the "state authority to enact
legislation that may interfere with personal liberty or property in
order to promote the general welfare." As defined, it consists of
(1) an imposition of restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to
underscore its all-comprehensive embrace.

"Its scope, ever-expanding to meet the exigencies of the times,


even to anticipate the future where it could be done, provides
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enough room for an efficient and flexible response to conditions
and circumstances thus assuring the greatest benefits."

It finds no specific Constitutional grant for the plain reason that it


does not owe its origin to the Charter. Along with the taxing
power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of
government that has enabled it to perform the most vital
functions of governance. Marshall, to whom the expression has
been credited, refers to it succinctly as the plenary power of the
State "to govern its citizens."

Purpose of Self-Organization

SamahanngManggagawasaHanjin Shipyard vs BLR, et. al.,


G.R. No. 211145, October 15, 2015

Doctrine: The right to self-organization, however, is subject to


certain limitations as provided by law. For instance, the Labor
Code specifically disallows managerial employees from joining,
assisting or forming any labor union. Meanwhile, supervisory
employees, while eligible for membership in labor organizations,
are proscribed from joining the collective bargaining unit of the
rank and file employees.54 Even government employees have the

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right to self-organization. It is not, however, regarded as existing
or available for purposes of collective bargaining, but simply for
the furtherance and protection of their interests.

Who are employees

FEU-Dr. Reyes Medical Foundation Inc. vs. Trajano, G.R.


No. 76273, July 31, 1987

Doctrine: Art. 244. Coverage and employees' right to self-


organization. All persons employed in commercial, industrial
and charitable, medical or educational institutions whether
operating for profit or not, shall have the right to self-
organizations of their own choosing for purposes of collective
bargaining. Ambulant intermittent and itinerant workers, self-
employed people, rural workers and those without any definite
employers may form labor organizations for the purpose of
enhancing and defending their interests and for their mutual aid
and protection. (underscoring supplied).

Under the aforequoted provision, there is no doubt that rank and


file employees of non-profit medical institutions (as herein
petitioner) are now permitted to form, organize or join labor

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unions of their choice for purposes of collective bargaining. Since
private respondent had complied with the requisites provided by
law for calling a certification election, it was incumbent upon
respondent Director to conduct such certification election to
ascertain the bargaining representative of petitioner's employees
(SamahangManggagawa Ng Pacific Mills, Inc. vs. Noriel, 134
SCRA 152).

NUWHRAIN Manila Pavilion Chapter vs. Sec. of Labor,


G.R. No. 181531, July 31, 2009

Doctrine: A certification election is the process of


determining the sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit for purposes of
collective bargaining. Collective bargaining, refers to the
negotiated contract between a legitimate labor organization and
the employer concerning wages, hours of work and all other
terms and conditions of employment in a bargaining unit.[7]

The significance of an employees right to vote in a


certification election cannot thus be overemphasized. For he has

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considerable interest in the determination of who shall represent
him in negotiating the terms and conditions of his employment.

Ineligibility of managerial employees to join any labor


organization; right of supervisory employees.

Franklin Baker Co. vs. Trajano, G.R. No. 75039, January


28, 1988

Doctrine: A managerial employee is defined as one "who is


vested with powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees, or to effectively
recommend such managerial actions." (Reynolds Phil. Corp. v.
Eslava, 137 SCRA [1985], citing Section 212 (K), Labor Code.

Meralco vs. Sec. of Labor, G.R. No. 91902, May 20, 1991

Doctrine: While therefore under the old rules, security guards


were barred from joining a labor organization of the rank and file,
under RA 6715, they may now freely join a labor organization of
the rank and file or that of the supervisory union, depending on
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their rank. By accommodating supervisory employees, the
Secretary of Labor must likewise apply the provisions of RA 6715
to security guards by favorably allowing them free access to a
labor organization, whether rank and file or supervisory, in
recognition of their constitutional right to self-organization.

Managerial and Confidential Employees

Metrolab Industries vs Confessor, G.R. No. 108855,


February 28, 1996

Doctrine: Although Article 245 of the Labor Code limits the


ineligibility to join, form and assist any labor organization to
managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who by reason of
their positions or nature of work are required to assist or act in a
fiduciary manner to managerial employees and hence, are
likewise privy to sensitive and highly confidential records.

Confidential employees cannot be classified as rank and file. As


previously discussed, the nature of employment of confidential
employees is quite distinct from the rank and file, thus,

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warranting a separate category. Excluding confidential employees
from the rank and file bargaining unit, therefore, is not
tantamount to discrimination.

Penaranda vs BagangaPlywood Corp., G.R. No. 159577,


May 3, 2006

Doctrine: Article 82 of the Labor Code exempts managerial


employees from the coverage of labor standards. Labor standards
provide the working conditions of employees, including
entitlement to overtime pay and premium pay for working on rest
days. Under this provision, managerial employees are those
whose primary duty consists of the management of the
establishment in which they are employed or of a department or
subdivision.

United Pepsi-Cola Supervisory Union (UPSU) v.


Laguesma, G.R. No. 122226, March 25, 1998

Doctrine: At the very least, the principle of finality of


administrative determination compels respect for the finding of
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the Secretary of Labor that route managers are managerial
employees as defined by law in the absence of anything to show
that such determination is without substantial evidence to support
it. Nonetheless, the Court, concerned that employees who are
otherwise supervisors may wittingly or unwittingly be classified as
managerial personnel and thus denied the right of self-
organization, has decided to review the record of this case.

Tagaytay Highlands International Golf Club vs. Tagaytay


Highlands Employees Union-PGTWO, G.R. No. 142000,
January 22, 2003

Doctrine: The statutory authority for the exclusion of supervisory


employees in a rank-and-file union, and vice-versa, is Article 245
of the Labor Code, to wit:

Article 245. Ineligibility of managerial employees to join any


labor organization; right of supervisory employees.
Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be
eligible for membership in a labor organization of the rank-
and-file employees but may join, assist or form separate
labor organizations of their own.

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While above-quoted Article 245 expressly prohibits supervisory
employees from joining a rank-and-file union, it does not provide
what would be the effect if a rank-and-file union counts
supervisory employees among its members, or vice-versa.

Coca-Cola Bottlers Philippines, Inc., v. Ilocos Professional


and Technical Employees Union (IPTEU), G.R. No.
193798, September 9, 2015

Doctrine: As proven by the certification of the IMU President as


well as the CBAs executed between IMU and CCBPI, the 22
employees sought to be represented by IPTEU are not IMU
members and are not included in the CBAs due to reclassification
of their positions. If these documents were false, the IMU should
have manifested its vigorous opposition.

Cooperative members

Benguet Electric Cooperatives Inc. vs. Calleja, G.R. No.


79025, December 29, 1989

Doctrine: The issue of whether or not employees of a


cooperative are qualified to form or join a labor organization for
purposes of collective bargaining has already been resolved and
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clarified in the case of Cooperative Rural Bank of Davao City, Inc.
vs. FerrerCalleja, et al. [G.R. No. 7795, September 26,1988] and
reiterated in the cases of Batangas-Electric Cooperative Labor
Union v. Young, et al. [G.R. Nos. 62386, 70880 and 74560
November 9, 1988] and San Jose City Electric Service
Cooperative, Inc. v. Ministry of Labor and Employment, et
al. [G.R. No. 77231, May 31, 1989] wherein the Court had stated
that the right to collective bargaining is not available to an
employee of a cooperative who at the same time is a member
and co-owner thereof. With respect, however, to employees who
are neither members nor co-owners of the cooperative they are
entitled to exercise the rights to self-organization, collective
bargaining and negotiation as mandated by the 1987 Constitution
and applicable statutes.

Central Negros vs. Sec. of Labor, G.R. No. 94045,


September 13, 1991

Doctrine: Under Article 256 of the Labor Code, to have a


valid certification election at least a majority of all eligible voters
in the unit must have cast their votes. It is apparent that
incidental to the power of the med-arbiter to hear and decide

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representation cases is the power to determine who the eligible
voters are. In so doing, it is axiomatic that the med-arbiter should
determine the legality of the employees' membership in the
union. In the case at bar, it obviously becomes necessary to
consider first the propriety of the employees' membership
withdrawal from the cooperative before a certification election
can be had.

. 277. Miscellaneous provisions.


c. Any employee, whether employed for a definite period or not,
shall, beginning on his first day of service, be considered as an
employee for purposes of membership in any labor union.

Reyes vs. Trajano, G.R. No. 84433, June 2, 1992

Doctrine: Guaranteed to all employees or workers is the "right to


self-organization and to form, join, or assist labor organizations of
their own choosing for purposes of collective bargaining." This is
made plain by no less than three provisions of the Labor Code of
the Philippines. 2 Article 243 of the Code provides as follows:

ART. 243. Coverage and employees right to self-


organization. All persons employed in commercial,
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industrial and agricultural enterprises and in religious,
charitable, medical, or educational institutions whether
operating for profit or not, shall have the right to self-
organization and to form, join, or assist labor
organizations of their own choosing for purposes or
collective bargaining. Ambulant, intermittent and
itinerant workers, self-employed people, rural workers
and those without any definite employers may form
labor organizations for their mutual aid and protection.

Pan American World Airways Inc. vs. Pan American EU,


G.R. No. L-25094, April 29, 1969, En Banc

Doctrine: The moment management displays what in this case


appears to be grave but unwarranted distrust in the union
officials discharging their functions just because a strike was
resorted to, then the integrity of the collective bargaining process
itself is called into question. It would have been different if there
were a rational basis for such fears, purely speculative in
character. The record is bereft of slightest indication that any
danger, much less one clear and present, is to be expected from
their return to work. Necessarily, the union officials have the right

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to feel offended by the fact that, while they will be paid their
salaries in the meanwhile they would not be considered as fit
persons to perform the duties pertaining to the positions held by
them. Far from being generous such an offer could rightfully, be
considered insulting.

The greater offense is to the labor movement itself, more


specifically to the right of self-organization. There is both a
constitutional and statutory recognition that laborers have the
right to form unions to take care of their interests vis-a-vis their
employers. Their freedom organizations would be rendered
nugatory if they could not choose their own leaders to speak on
their behalf and to bargain for them.

UST Faculty Union vs. Bitonio, G.R. No.


131235, November 16, 1999

Doctrine: Self-organization is a fundamental right guaranteed by


the Philippine Constitution and the Labor Code. Employees have
the right to form, join or assist labor organizations for the
purpose of collective bargaining or for their mutual aid and
protection. Whether employed for a definite period or not, any

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employee shall be considered as such, beginning on his first day
of service, for purposes of membership in a labor union.

Corollary to this right is the prerogative not to join, affiliate with


or assist a labor union. Therefore, to become a union member, an
employee must, as a rule, not only signify the intent to become
one, but also take some positive steps to realize that intent. The
procedure for union membership is usually embodied in the
union's constitution and bylaws. An employee who becomes a
union member acquires the rights and the concomitant
obligations that go with this new status and becomes bound by
the union's rules and regulations.

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B. Labor Organizations

1. Definition

San Miguel Corporation Employees Union (PTGWO) vs. San


Miguel Packaging Products Employees Union (PDMP), G.R. No.
171153, September 12, 2007

This Court reverses the finding of the appellate court and BLR on
this ground, and rules that PDMP cannot directly create a local or
chapter. After an exhaustive study of the governing labor law
provisions, both statutory and regulatory, we find no legal
justification to support the conclusion that a trade union center is
allowed to directly create a local or chapter through chartering.
Apropos, we take this occasion to reiterate the first and
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fundamental duty of this Court, which is to apply the law. The
solemn power and duty of the Court to interpret and apply the
law does not include the power to correct by reading into the law
what is not written therein.

2. Registration

PAFLU vs. Sec. of Labor, G.R. No. L-22228, February 27, 1969, En
Banc

The theory to the effect that section 23 of Republic Act No. 875
unduly curtails the freedom of assembly and association
guaranteed in the Bill of Rights is devoid of factual basis. The
registration prescribed in paragraph (b) of said section is not a
limitation to the right of assembly or association, which may be
exercised with or without said registration. The latter is merely a
condition sine qua non for the acquisition of legal personality by
labor organizations, associations or unions and the possession of
the rights and privileges granted by law to legitimate labor

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organizations. The Constitution does not guarantee these rights
and privileges, much less said personality, which are mere
statutory creations, for the possession and exercise of which
registration is required to protect both labor and the public
against abuses, fraud, or impostors who pose as organizers,
although not truly accredited agents of the union they purport to
represent. Such requirement is a valid exercise of the police
power, because the activities in which labor organizations,
associations and unions of workers are engaged affect public
interest, which should be protected.

Coastal Subic Bay Terminal vs. DOLE, G.R. No. 157117,


November 20, 2006

Under the rules implementing the Labor Code, a chartered local


union acquires legal personality through the charter certificate
issued by a duly registered federation or national union, and
reported to the Regional Office in accordance with the rules
implementing the Labor Code. A local union does not owe its
existence to the federation with which it is affiliated. It is a

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separate and distinct voluntary association owing its creation to
the will of its members. Mere affiliation does not divest the local
union of its own personality, neither does it give the mother
federation the license to act independently of the local union. It
only gives rise to a contract of agency, where the former acts in
representation of the latter. Hence, local unions are considered
principals while the federation is deemed to be merely their
agent. As such principals, the unions are entitled to exercise the
rights and privileges of a legitimate labor organization, including
the right to seek certification as the sole and exclusive bargaining
agent in the appropriate employer unit.

San Miguel Corporation (Mandaue Packaging) vs. Mandaue


Packing Products Plants (SMAMRFU), G.R. No. 152356, August
16, 2005

In regular order, it is the federation or national union, already in


possession of legal personality, which initiates the creation of the
local/chapter. It issues a charter certificate indicating the creation
or establishment of the local/chapter. It then submits this charter

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certificate, along with the names of the local/chapters officers,
constitution and bylaws to the Regional Office or Bureau. It is the
submission of these documents, certified under oath by the
Secretary or Treasurer of the local/chapter and attested by the
President, which vests legal personality in the local/chapter,
which is then free to file on its own a petition for certification
election. In this case, the federation in question, the FFW, did not
submit any of these documentary requirements to the Regional
Office or Bureau. It did however issue a charter certificate to the
putative local/chapter (herein respondent). Respondent then
submitted the charter certificate along with the other
documentary requirements to the Regional Office, but not for the
specific purpose of creating the local/chapter, but for filing the
petition for certification election.

Tagaytay Highlands International Golf Club vs. Tagaytay


Highlands Employees Union-PGTWO, G.R. No. 142000, January
22, 2003

: The inclusion in a union of disqualified employees is not among

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the grounds for cancellation, unless such inclusion is due to
misrepresentation, false statement or fraud under the
circumstances enumerated in Sections (a) and (c) of Article 239
of above-quoted Article 239 of the Labor Code. THEU, having
been validly issued a certificate of registration, should be
considered to have already acquired juridical personality which
may not be assailed collaterally. As for petitioners allegation that
some of the signatures in the petition for certification election
were obtained through fraud, false statement and
misrepresentation, the proper procedure is, as reflected above,
for it to file a petition for cancellation of the certificate of
registration, and not to intervene in a petition for certification
election.

The Heritage Manila Hotel vs. PIGLAS-Heritage, G.R. No. 177024,


October 30, 2009
The fact that some of respondent PIGLAS unions members were
also members of the old rank and file union, the HHE union, is
not a ground for canceling the new unions registration. The right

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of any person to join an organization also includes the right to
leave that organization and join another one. Besides, HHE union
is dead. It had ceased to exist and its certificate of registration
had already been cancelled. Thus, petitioners arguments on this
point may also be now regarded as moot and academic.

C. Rights and Conditions of Membership


1. Fees and Collection

Del Pilar Academy vs. Del Pilar AcademyEmployees Union, G.R.


No. 170112, April 30, 2008

The collection of agency fees in an amount equivalent to union


dues and fees, from employees who are not union members, is
recognized by Article 248(e) of the Labor Code, thus: Employees
of an appropriate collective bargaining unit who are not members
of the recognized collective bargaining agent may be assessed
reasonable fees equivalent to the dues and other fees paid by the
recognized collective bargaining agent, if such non-union

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members accept the benefits under the collective bargaining
agreement. Provided, That the individual authorization required
under Article 241, paragraph (o) of this Code shall not apply to
the non-members of recognized collective bargaining agent.
When so stipulated in a collective bargaining agreement or
authorized in writing by the employees concerned, the Labor
Code and its Implementing Rules recognize it to be the duty of
the employer to deduct the sum equivalent to the amount of
union dues, as agency fees, from the employees wages for direct
remittance to the union. The system is referred to as check off.
No requirement of written authorization from the non-union
employees is necessary if the non-union employees accept the
benefits resulting from the CBA.
Moreover, no requirement of written authorization from the non-
union employees is needed to effect a valid check off. Article
248(e) makes it explicit that Article 241, paragraph (o), requiring
written authorization is inapplicable to non-union members,
especially in this case where the non-union employees receive
several benefits under the CBA.

2. Financial Reporting

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3. Election Officers and Qualifications
4. Method of Election
5. Intra-Union Disputes
6. Admission of Members & Retention of Membership
7. Disbursement of Union Funds
8. Compensation of Officers
9. Reporting
10. Assessments and Check-Offs

ABS-CBN Supervisors Employee Union vs. ABS-CBN, G.R. No.


106518, March 11, 1999

Premises studiedly considered, we are of the irresistible


conclusion and, so find, that the ruling in BPIEU-ALU vs. NLRC
that (1) the prohibition against attorneys fees in Article 222,
paragraph (b) of the Labor Code applies only when the payment
of attorneys fees is effected through forced contributions from
the workers; and (2) that no deductions must be taken from the
workers who did not sign the check-off authorization, applies to
the case under consideration.

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A check-off is a process or device whereby the employer, on
agreement with the Union, recognized as the proper bargaining
representative, or on prior authorization from its employees,
deducts union dues or agency fees from the latters wages and
remits them directly to the union. Its desirability in a labor
organization is quite evident. It is assured thereby of continuous
funding. As this Court has acknowledged, the system of check-off
is primarily for the benefit of the Union and only indirectly, for the
individual employees.

D. Rights of Legitimate Labor Organizations


1. Representation
2. Bargaining Agent:
3. Financial Statements:
4. Property Rights:
5. Personality to Sue and be Sued
6. Tax Exemptions
7. Other Activities:

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E. Appropriate Bargaining Unit

a) Globe Doctrine / The Express Will or Desire of the


Employees Test

International School Alliance of Educators (ISAE) vs. Quisumbing,


G.R. No. 128845, June 1, 2000

The Constitution enjoins the State to protect the rights of


workers and promote their welfare, to afford labor full
protection. The State, therefore, has the right and duty to
regulate the relations between labor and capital. These relations
are not merely contractual but are so impressed with public
interest that labor contracts, collective bargaining agreements
included, must yield to the common good. Should such contracts
contain stipulations that are contrary to public policy, courts will
not hesitate to strike down these stipulations.
The Constitution also directs the State to promote equality of
employment opportunities for all. Similarly, the Labor Code
provides that the State shall ensure equal work opportunities
regardless of sex, race or creed. It would be an affront to both
the spirit and letter of these provisions if the State, in spite of its

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primordial obligation to promote and ensure equal employment
opportunities, closes its eyes to unequal and discriminatory terms
and conditions of employment.

b) Substantial Mutual Interest Principle / Community or


Mutuality of Interest Test

National Association Of Free Trade Unions vs. Mainit Lumber


Development Company Workers Union, G.R. No. 79526,
December 21, 1990

The respondent Bureau of Labor Relations had already ruled on


the same in its decision dated April 28,1986 affirming the Med-
Arbiter's Order dated April 11, 1985 which granted the petition for
Certification Election. NAFTU did not elevate the April 28,1986
decision to this Court. On the contrary, it participated in the
questioned election and later it did not raise the issue in its
election protest (Rollo, p. 210). Hence, the principle of res
judicata applies. It was settled as early as 1956 that "the rule
which forbids the reopening of a matter once judicially

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determined by competent authority applies as well to the judicial
and quasi-judicial acts of public, executive or administrative
officers and boards acting within their jurisdiction as to the
judgments of courts having general judicial powers x xx" (B.F.
Goodrich Philippines, Inc. v. Workmen's Compensation
Commission and Leandro M. Castro, 159 SCRA 355 [1988]).

San Miguel Corporation vs. Laguesma, G.R. No. 100485,


September 21, 1994

The test of grouping is mutuality or commonality of interests. The


employees sought to be represented by the collective. Bargaining
agent must have substantial mutual interests in terms of
employment and working conditions as evinced by the type of
work they perform.
A bargaining unit is a group of employees of a given employer,
comprised of all or less than all of the entire body of employees,
consistent with equity to the employer, indicate to be the best
suited to serve the reciprocal rights and duties of the parties
under the collective bargaining provisions of the law.

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The fundamental factors in determining the appropriate collective
bargaining unit are: (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees interest, such
as substantial similarity of work and duties, or similarity or
compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4)
similarity of employment status.

San Miguel Foods Incorporated vs. San Miguel Corporation


Supervisors and Exempt Union, G.R. No. 146206, August 1, 2011

Confidential employees are defined as those who (1) assist or act


in a confidential capacity, in regard (2) to persons who formulate,
determine, and effectuate management policies in the field of
labor relations. The two criteria are cumulative, and both must be
met if an employee is to be considered a confidential employee
that is, the confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle the
prescribed responsibilities relating to labor relations. The
exclusion from bargaining units of employees who, in the normal
course of their duties, become aware of management policies

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relating to labor relations is a principal objective sought to be
accomplished by the confidential employee rule. A confidential
employee is one entrusted with confidence on delicate, or with
the custody, handling or care and protection of the employers
property. Confidential employees, such as accounting personnel,
should be excluded from the bargaining unit, as their access to
confidential information may become the source of undue
advantage. However, such fact does not apply to the position of
Payroll Master and the whole gamut of employees who, as
perceived by petitioner, has access to salary and compensation
data. The CA correctly held that the position of Payroll Master
does not involve dealing with confidential labor relations
information in the course of the performance of his functions.
Since the nature of his work does not pertain to company rules
and regulations and confidential labor relations, it follows that he
cannot be excluded from the subject bargaining unit. The
rationale for their separate category and disqualification to join
any labor organization is similar to the inhibition for managerial
employees, because if allowed to be affiliated with a union, the
latter might not be assured of their loyalty in view of evident
conflict of interests and the union can also become company-
denominated with the presence of managerial employees in the

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union membership. Having access to confidential information,
confidential employees may also become the source of undue
advantage. Said employees may act as a spy or spies of either
party to a collective bargaining agreement.

c) Collective Bargaining History Principle / Prior


Collective Bargaining History Test

d) Employment Status Principle / Employment Status


Test

Participation in the policy and decision-making process

PAL vs. NLRC, G.R. 85985, August 13, 1993

Indeed, industrial peace cannot be achieved if the employees are


denied their just participation in the discussion of matters
affecting their rights. Thus, even before Article 211 of the Labor
Code (P.D. 442) was amended by Republic Act No. 6715, it was
already declared a policy of the State: (d) To promote the
enlightenment of workers concerning their rights and obligations .

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. . as employees. This was, of course, amplified by Republic Act
No. 6715 when it decreed the participation of workers in decision
and policy making processes affecting their rights, duties and
welfare. PALs position that it cannot be saddled with the
obligation of sharing management prerogatives as during the
formulation of the Code, Republic Act No. 6715 had not yet been
enacted (Petitioners Memorandum, p. 44; Rollo, p. 212), cannot
thus be sustained. While such obligation was not yet founded in
law when the Code was formulated, the attainment of a
harmonious labor-management relationship and the then already
existing state policy of enlightening workers concerning their
rights as employees demand no less than the observance of
transparency in managerial moves affecting employees rights.

PURPOSE OF CERTIFICATION ELECTION

PORT WORKERS UNION OF THE PHILS V.LAGUESMA

Doctrine in Western Agusan Workers Union-Local 101 of the


United Lumber and General Workers of the Philippines vs.
Trajano: it has long been settled that the policy of the Labor

33
Code is indisputably partial to the holding of a certification
election so as to arrive in a manner definitive and certain
concerning the choice of the labor organization to represent the
workers in a collective bargaining unit. Conformably to said basic
concept, this Court recognized that the Bureau of Labor Relations
in the exercise of sound discretion, may order a certification
election notwithstanding the failure to meet the 30%
requirement.

Reyes vs. Trajano, G.R. No. 84433, June 2, 1992

Guaranteed to all employees or workers is the right to self-


organization and to form, join, or assist labor organizations of
their own choosing for purposes of collective bargaining. This is
made plain by no less than three provisions of the Labor Code of

the

Philippines. The right of self-organization includes the right to


organize or affiliate with a labor union or determine which of two
or more unions in an establishment to join, and to engage in
concerted activities with co-workers for purposes of collective
bargaining through representatives of their own choosing, or for
their mutual aid and

34
protection, i.e., the protection, promotion, or enhancement of
their rights and interests.

The right to form or join a labor organization necessarily includes


the right to refuse or refrain from exercising said right. It is self-
evident that just as no one should be denied the exercise of a
right granted by law, so also, no one should be compelled to
exercise such a conferred right. The fact that a person has opted
to acquire membership in a labor union does not preclude his
subsequently opting to renounce such membership.

EMPLOYER CERTIFICATION

NATIONAL UNION OF WORKERS IN HOTELS,


RESTAURANTS AND ALLIED INDUSTRIES- MANILA
PAVILION HOTEL CHAPTER vs. SECRETARY OF LABOR
AND EMPLOYMENT, BUREAU OF LABOR RELATIONS,
HOLIDAY INN MANILA PAVILION HOTEL LABOR UNION
AND ACESITE PHILIPPINES HOTEL CORPORATION

In a certification election, all rank and file employees in the


appropriate bargaining unit, whether probationary or permanent
are entitled to vote. This principle is clearly stated in Art. 255 of
the Labor Code which states that the labor organization
designated or selected by the majority of the employees in an

35
appropriate bargaining unit shall be the exclusive representative
of the employees in such unit for purposes of collective
bargaining. Collective bargaining covers all aspects of the
employment relation and the resultant CBA negotiated by the
certified union binds all employees in the bargaining unit. Hence,
all rank and file employees, probationary or permanent, have a
substantial interest in the selection of the bargaining
representative. The Code makes no distinction as to their
employment status as basis for eligibility in supporting the
petition for certification election. The law refers to all the
employees in the bargaining unit. All they need to be eligible to
support the petition is to belong to the bargaining unit.

For purposes of this section (Rule II, Sec. 2 of Department Order


No. 40-03, series of 2003), any employee, whether employed for
a definite period or not, shall beginning on the first day of his/her
service, be eligible for membership in any labor organization.

All other workers, including ambulant, intermittent and other


workers, the self-employed, rural workers and those without any
definite employers may form labor organizations for their mutual
aid and protection and other legitimate purposes except collective
bargaining. (Emphasis supplied)

36
The provision in the CBA disqualifying probationary employees
from voting cannot override the Constitutionally-protected right of
workers to self-organization, as well as the provisions of the
Labor Code and its Implementing Rules on certification elections
and jurisprudence thereon.

A law is read into, and forms part of, a contract. Provisions in a


contract are valid only if they are not contrary to law, morals,
good customs, public order or public policy.

CENTRAL NEGROS ELECTRIC COOPERATIVE v.


SECRETARY OF LABOR

NO DIRECT CERTIFICATION

(c) By directly certifying a Union without sufficient proof of


majority representation, he has in effect arrogated unto himself
the right, vested naturally in the employees to choose their
collective bargaining representative. (d) He has in effect imposed
upon the petitioner the obligation to negotiate with a union
whose majority representation is under serious question. This is
highly irregular because while the Union enjoys the blessing of
the Minister, it does not enjoy the blessing of the employees.
Petitioner is therefore under threat of being held liable for

37
refusing to negotiate with a union whose right to bargaining
status has not been legally established."

While there may be some factual variances, the rationale therein


is applicable to the present case in the sense that it is not alone
sufficient that a union has the support of the majority. What is
equally important is that everyone be given a democratic space in
the bargaining unit concerned. The most effective way of
determining which labor organization can truly represent the
working force is by certification election.

SAMAHANG MANGGAGAWA SA PERMEX V. SECRETARY OF


LABOR

A CERTIFICATION WHICH THE EMPLOYER HAS NO AUTHORITY


TO GIVE, for it is the employees prerogative (not the employers)
to determine whether they want a union to represent them, and,
if so, which one it should be. In accordance with this ruling,
Permex Producer should not have given its voluntary recognition
to SMP-PIILU-TUCP when the latter asked for recognition as
exclusive collective bargaining agent of the employees of the
company. The company did not have the power to declare the
union the exclusive representative of the workers for the purpose

38
of collective bargaining. It is not enough that a union has the
support of the majority of the employees. It is equally important
that everyone in the bargaining unit be given the opportunity to
express himself.

EFFECT OF WITHDRAWAL OF EMPLOYEE

TAGAYTAY HIGHLANDS INTERNATIONAL GOLF CLUB INC


V TAGAYTAY HIGHLANDS EMPLOYEES UNION-PGTWO

The best forum for determining whether there were indeed


retractions from some of the laborers is in the certification
election itself wherein the workers can freely express their choice
in a secret ballot. Suffice it to say that the will of the rank-and-file
employees should in every possible instance be determined by
secret ballot rather than by administrative or quasi-judicial
inquiry. Such representation and certification election cases are
not to be taken as contentious litigations for suits but as mere
investigations of a non-adversary, fact-finding character as to
which of the competing unions represents the genuine choice of
the workers to be their sole and exclusive collective bargaining
representative with their employer.

UNORGANIZED ESTABLISHMENT

39
Sugbuanon Rural bank v. Laguesma

Art. 245 of the Labor Code does not directly prohibit confidential
employees from engaging in union activities. However, under the
doctrine of necessary implication, the disqualification of
managerial employees equally applies to confidential employees.
The confidential-employee rule justifies exclusion of confidential
employees because in the normal course of their duties they
become aware of management policies relating to labor relations.
It must be stressed, however, that when the employee does not
have access to confidential labor relations information, there is no
legal prohibition against confidential employees from forming,
assisting, or joining a union.

One of the rights of a legitimate labor organization under Article


242(b) of the Labor Code is the right to be certified as the
exclusive representative of all employees in an appropriate
bargaining unit for purposes of collective bargaining. Having
complied with the requirements of Art. 234, it is our view that
respondent union is a legitimate labor union. Article 257 of the
Labor Code mandates that a certification election shall
automatically be conducted by the Med-Arbiter upon the filing of
a petition by a legitimate labor organization.16 nothing is said
therein that prohibits such automatic conduct of the certification
40
election if the management appeals on the issue of the validity of
the unions registration. On this score, petitioners appeal was
correctly dismissed.

Notre Dame of Greater Manila v. Laguesma

Not all the orders issued by a med-arbiter are appealable. In fact,


[i]nterlocutory orders issued by the med-arbiter prior to the
grant or denial of the petition, including orders granting motions
for intervention issued after an order calling for a certification
election, shall not be appealable. However, any issue arising there
from may be raised in the appeal on the decision granting or
denying the petition.

Article 259 clearly speaks of the order x xx of the election.


Hence, the Article pertains, not just to any of the med-arbiters
orders like the subject notation, but to the order granting the
petition for certification election. This is an unmistakable
inference from a reading of Sections 6 and 7 of the implementing
rules 6. and spirit of welfare legislations intended to protect labor
and to promote social justice.

CANCELLATION OF TRADE UNION REGISTRATION

Progressive Development Corporation v. Sec. of Labor

41
But while Article 257 cited by the Solicitor General directs the
automatic conduct of a certification election in an unorganized
establishment, it also requires that the petition for certification
election must be filed by a legitimate labor organization. Article
242 enumerates the exclusive rights of a legitimate labor
organization among which is the right to be certified as the
exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining.

It may likewise be argued that it was Kilusan (the mother union)


and not the local union which filed the petition for certification
election and, being a legitimate labor organization, Kilusan has
the personality to file such petition.

Alliance of Nationalist and Genuine Labor Organization vs.


SAMANA BAY

Although P.D. 1391 provides:

"Item No. 6. No petition for certification election, for intervention


and disaffiliation shall be entertained or given due course except
within the 60-day freedom period immediately preceding the
expiration of a collective bargaining agreement,"

42
said law is definitely not without exceptions. Settled is the rule
that a local union has the right to disaffiliate from its mother
union when circumstances warrant.[5] Generally, a labor union
may disaffiliate from the mother union to form a local or
independent union only during the 60-day freedom period
immediately preceding the expiration of the CBA. However, even
before the onset of the freedom period, disaffiliation may be
carried out when there is a shift of allegiance on the part of the
majority of the members of the union.[6]

AFFILIATION AND DISAFFILIATION OF THE LOCAL


UNION FROM THE MOTHER UNION

Benguet Consolidated vs. BCI Employees and Workers


Union

In formulating the substitutionary doctrine, the only


consideration involved was the employees (principal) interest in
the existing bargaining agreement. The agents (union) interest
never entered the picture. The majority of the employees, as an
entity under the statute, is the true party in interest to the
contract, holding rights through the agency of the union
representative. Thus, any exclusive interest claimed by the agent
is defeasible at the will of the principal. The substitutionary

43
doctrine only provides that the employees cannot revoke the
validly executed collective bargaining contract with their employer
by the simple expedient of changing their bargaining agent. And
it is in the light of this that the phrase said new agent would
have to respect said contract must be understood. It only means
that the employees, thru their new bargaining agent, cannot
renege on their collective bargaining contract, except of course to
negotiate with management for the shortening thereof.

COLLECTIVE BARGAINING

University of the Immaculate Conception vs. Sec. of Labor

Anent the Unions Motion, we find that superseding circumstances


would not warrant the physical reinstatement of the twelve (12)
terminated employees. Hence, they are hereby ordered
placed under payroll reinstatement until the validity of their
termination is finally resolved.

As an exception to the rule, payroll reinstatement must rest on


special circumstances that render actual reinstatement
impracticable or otherwise not conducive to attaining the
purposes of the law.

NATURE

44
Collegio de San Juan De Letranvs Association of
Employees and Faculty of Letran

The petitioners failure to act upon the submitted CBA proposal


within the ten-day period exemplified in Article 250 of the Labor
Code is a clear violation of the governing procedure of collective
bargaining. As the Court has held in Kiok Loy vs. NLRC, the
companys refusal to make counter-proposal to the unions
proposed CBA is an indication of bad faith. Moreover, the
succeeding events are obvious signs that the petitioner had
merely been employing delaying tactics to the passage of the
proposed CBA. Moreover, in order to allow the employer to
validly suspend the bargaining process, there must be a valid
petition for certification election raising a legitimate
representation issue. Hence, the mere filing of a petition for
certification election does not ipso facto justify the suspension of
negotiation by the employer.

The Court recognizes the right of the employer to terminate the


services of an employee for a just or authorized cause,
nevertheless, the dismissal of employees must be made within
the parameters of aw and pursuant to the tenets of equity and
fair play. Even assuming arguendo that Ambas was guilty of
insubordination, such disobedience was not a valid ground to
45
terminate her employment. When the exercise of the
management to discipline its employees tends to interfere with
the employees right to self-organization, it amounts to union-
busting and is therefore a prohibited act.

Kiok Loy vs. NLRC, G.R. No. L-54334, January 22, 1986

Collective bargaining which is defined as negotiations towards a


collective agreement, is one of the democratic frameworks under
the New Labor Code, designed to stabilize the relation between
labor and management and to create a climate of sound and
stable industrial peace. It is a mutual responsibility of the
employer and the Union and is characterized as a legal obligation.
So much so that Article 249, par. (g) of the Labor Code makes it
an unfair labor practice for an employer to refuse to meet and
convene promptly and expeditiously in good faith for the purpose
of negotiating an agreement with respect to wages, hours of
work, and all other terms and conditions of employment including
proposals for adjusting any grievance or question arising under
such an agreement and executing a contract incorporating such
agreement, if requested by either party.

Collective Bargaining AGREEMENT

46
PNCC Skyway Traffic Management and Security Division
Workers Organization v. PNCC Skyway Corp

Article VIII, Section 1 (b) of the CBA categorically provides that


the scheduling of vacation leave shall be under the option of the
employer. The preference requested by the employees is not
controlling because respondent retains its power and prerogative
to consider or to ignore said request.

RFM Corporation vs. KAMPI-NAFLU-KMU

Holiday pay is a legislated benefit enacted as part of the


Constitutional imperative that the State shall afford protection to
labor. Its purpose is not merely "to prevent diminution of the
monthly income of the workers on account of work interruptions.
In other words, although the worker is forced to take a rest, he
earns what he should earn, that is, his holiday pay."

Halaguena vs. PAL

Jurisdiction of the court is determined on the basis of the material


allegations of the complaint and the character of the relief prayed
for irrespective of whether plaintiff is entitled to such relief.

The said issue cannot be resolved solely by applying the Labor


Code. Rather, it requires the application of the Constitution, labor

47
statutes, law on contracts and the Convention on the Elimination
of All Forms of Discrimination Against Women, and the power to
apply and interpret the constitution and CEDAW is within the
jurisdiction of trial courts, a court of general jurisdiction.

New Pacific Timber Supply Co. vs. NLRC

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. A laborer can claim
benefits from a CBA entered into the company and the union of
which he is a member at the time of the conclusion of the
agreement even after he has resigned from said union.
Therefore, the benefits under the CBA should be extended to
those who only became such after it expired; to exclude them
would constitute undue discrimination.

Effect of EXPIRY

Manila Electric Coop. vs, Quisumbing

There is no need to consult the Secretary of Labor in cases


involving contracting out for 6 months or more as it is part of
management prerogative. However, a line must be drawn with
respect to management prerogatives on business operations per

48
se and those which affect the rights of the workers. Employers
must see to it that that employees are properly informed of its
decisions to attain harmonious labor relations and enlighten the
worker as to their rights.

The contracting out business or services is an exercise of


business judgment if it is for the promotion of efficiency and
attainment of economy. Management must be motivated by good
faith and contracting out should not be done to circumvent the
law. Provided there was no malice or that it was not done

Faculty Association of Mapua Institute of Technology vs.


CA

ART. 253. Duty to bargain collectively when there exists a


collective bargaining agreement.When there is a collective
bargaining agreement, the duty to bargain collectively shall also
mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve a
written notice to terminate or modify the agreement at least sixty
(60) days prior to its expiration date. It shall be the duty of both
parties to keep the status quo and to continue in full force and
effect the terms and conditions of the existing agreement during

49
the 60-day period and/or until a new agreement is reached by the
parties.

Until a new CBA is 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.
The law does not provide for any exception nor qualification on
which economic provisions of the existing agreement are to retain
its force and effect. Therefore, it must be understood as
encompassing all the terms and conditions in the said agreement.

CONTRACT BENEFICIARIES
New Pacific Timber Supply Co. vs. NLRC

It is clear from Art. 253 that until a new CBA has been executed
by and between the parties; they are duly 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 from to
the year 1985 (after expiration of the CBA) onwards 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

50
effect which runs counter to the intent of the Labor Cod to curb
labor unrest and promote industrial peace.

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. A laborer can claim
benefits from a CBA entered into the company and the union of
which he is a member at the time of the conclusion of the
agreement even after he has resigned from said union.
Therefore, the benefits under the CBA should be extended to
those who only became such after it expired; to exclude them
would constitute undue discrimination.

UNION SECURITY ARRANGEMENTS

Inguillo vs. First Philippine Scales Inc

He explained that the two clearly violated the Union Security


Clause of the CBA when they joined NLM-KATIPUNAN and
committed acts detrimental to the interests of FPSILU and
respondents.

Tanduay Distillery Labor Union vs. NLRC

Article 249 (e) of the Labor Code as amended specifically


recognizes the closed shop arrangement as a form of union

51
security. The closed shop, the union shop, the maintenance of
membership shop, the preferential shop, the maintenance of
treasury shop, and check-off provisions are valid forms of union
security and strength. They do not constitute unfair labor practice
nor are they violations of the freedom of association clause of the
Constitution. There is no showing in these petitions of any
arbitrariness or a violation of the safeguards enunciated in the
decisions of this Court interpreting union security arrangements
brought to us for review.

GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION

1. JuanitoTabigue vs. International Copra Export Corp.

G.R. No. 183335, December 23, 2009

Pursuant to Article 260 of the Labor Code, the parties to a CBA


shall name or designate their respective representatives to the
grievance machinery and if the grievance is unsettled in that

52
level, it shall automatically be referred to the voluntary arbitrators
designated in advance by parties to a CBA. Consequently only
disputes involving the union and the company shall be referred to
the grievance machinery or voluntary arbitrators.

Clutching at straws, petitioners invoke the first paragraph of


Article 255 of the Labor Code which states:

Art. 255. The labor organization designated or selected by the


majority of the employees in an appropriate collective bargaining
unit shall be the exclusive representative of the employees in
such unit for the purpose of collective bargaining. However, an
individual employee or group of employees shall have the right at
any time to present grievances to their employer.

To petitioners, the immediately quoted provision is meant to be


an exception to the exclusiveness of the representative role of the
labor organization/union. This Court is not persuaded. The right
of any employee or group of employees to, at any time, present

53
grievances to the employer does not imply the right to submit the
same to voluntary arbitration.

2. Caltex Refinery Employees Association vs. Brillantes

G.R. No.123782, September 16, 1997

No particular setup for a grievance machinery is mandated by


law. Rather, Article 260 of the Labor Code, as incorporated by RA
6715, provides for only a single grievance machinery in the
company to settle problems arising from interpretation or
implementation of their collective bargaining agreement and
those arising from the interpretation or enforcement of company
personnel policies. Article 260, as amended, reads:

Article 260. Grievance Machinery and Voluntary Arbitration. The


parties to a Collective Bargaining Agreement shall include therein
provisions that will ensure the mutual observance of its terms and
conditions. They shall establish a machinery for the adjustment
and resolution of grievances arising from the interpretation or
implementation of their Collective Bargaining Agreement and
54
those arising from the interpretation or enforcement of company
personnel policies.

All grievances submitted to the grievance machinery which are


not settled within seven (7) calendar days from the date of its
submission shall automatically be referred to voluntary arbitration
prescribed in the Collective Bargaining Agreement.

For this purpose, parties to a Collective Bargaining Agreement


shall name and designate in advance a Voluntary Arbitrators or
panel of voluntary arbitrators, include in the agreement a
procedure for the selection of such Voluntary Arbitrator or panel
of Voluntary Arbitrators, preferably from the listing of qualified
Voluntary Arbitrators duly accredited by the Board. In case the
parties fail to select a Voluntary Arbitrator or panel of Voluntary
Arbitrators, the Board shall designate the Voluntary Arbitrator or
panel of Voluntary Arbitrators, as may be necessary, pursuant to
the selection procedure agreed upon in the Collective Bargaining
Agreement, which shall act with same force and effect as if the
Arbitrator or panel of Arbitrators has been selected by the parties
as described above.

VOLUNTARY ARBITRATION

55
3. Santuyo vs. Remerco Garments Manufacturing, Inc.

G.R. No. 174420, March 22, 2010

Article 260 of the Labor Code clarifies that such disputes must be
referred first to the grievance machinery and, if unresolved within
seven days, they shall automatically be referred to voluntary
arbitration. Thus, under Article 261 of the Labor Code, voluntary
arbitrators have original and exclusive jurisdiction over matters,
which have not been resolved by the grievance
machinery. Pursuant to Articles 217 in relation to Articles 260
and 261 of the Labor Code, the labor arbiter should have referred
the matter to the grievance machinery provided in the CBA.
Because the labor arbiter clearly did not have jurisdiction over the
subject matter, his decision was void.

UNFAIR LABOR PRACTICES

56
4. Insular Life Assurance Co., Ltd., Employees Association vs.
Insular Life Assurance

G.R. No. L-25291, January 30, 1970

It is an unfair labor practice for an employer operating under a


collective bargaining agreement to negotiate or to attempt to
negotiate with his employees individually in connection with
changes in the agreement. And the basis of the prohibition
regarding individual bargaining with the strikers is that although
the union is on strike, the employer is still under obligation to
bargain with the union as the employees' bargaining
representative

It is likewise an act of interference for the employer to send a


letter to all employees notifying them to return to work at a time
specified therein, otherwise new employees would be engaged to
perform their jobs. Individual solicitation of the employees or
visiting their homes, with the employer or his representative
urging the employees to cease union activity or cease striking,
constitutes unfair labor practice. All the above-detailed activities

57
are unfair labor practices because they tend to undermine the
concerted activity of the employees, an activity to which they are
entitled free from the employer's molestation.

The test of whether an employer has interfered with and coerced


employees within the meaning of subsection (a)(1) is whether the
employer has engaged in conduct which it may reasonably be
said tends to interfere with the free exercise of employees' rights
under section 3 of the Act, and it is not necessary that there be
direct evidence that any employee was in fact intimidated or
coerced by statements of threats of the employer if there is a
reasonable inference that anti-union conduct of the employer
does have an adverse effect on self-organization and collective
bargaining.

5.Hacienda Fatima vs. Natl. Federation of Sugarcane Workers

G.R. No. 149440, January 28, 2003

For respondents to be excluded from those classified as regular


employees, it is not enough that they perform work or services
58
that are seasonal in nature. They must have also been employed
only for the duration of one season. The evidence proves the
existence of the first, but not of the second, condition. The fact
that respondents repeatedly worked as sugarcane workers for
petitioners for several years is not denied by the latter. Evidently,
petitioners employed respondents for more than one season.
Therefore, the general rule of regular employment is applicable.
If the employee has been performing the job for at least a
year, even if the performance is not continuous & merely
intermittent, the law deems the repeated & continuing
need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the
employment is considered regular, but only w/respect to such
activity & while such activity exists. Seasonal workers who are
called to work from time to time & are temporarily laid off
during off-season are not separated from service in said period,
but merely considered on leave until re-employed (De Leonv.
NLRC).

6. Standard Chartered Bank Employees Union vs. Confessor

59
G.R. No. 114974, June 16, 2004

Article 248(a) of the Labor Code, considers it an unfair labor


practice when an employer interferes, restrains or coerces
employees in the exercise of their right to self-organization or the
right to form association. The right to self-organization
necessarily includes the right to collective bargaining.

Parenthetically, if an employer interferes in the selection of its


negotiators or coerces the Union to exclude from its panel of
negotiators a representative of the Union, and if it can be
inferred that the employer adopted the said act to yield adverse
effects on the free exercise to right to self-organization or on
the right to collective bargaining of the employees, ULP under
Article 248(a) in connection with Article 243 of the Labor Code is
committed. In order to show that the employer committed ULP
under the Labor Code, substantial evidence is required to support
the claim. Substantial evidence has been defined as such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion. In the case at bar, the Union bases its claim

60
of interference on the alleged suggestions of Diokno to exclude
Umali from the Unions negotiating panel.

Surface bargaining is defined as going through the motions of


negotiating without any legal intent to reach an agreement. The
resolution of surface bargaining allegations never presents an
easy issue. The determination of whether a party has engaged in
unlawful surface bargaining is usually a difficult one because it
involves, at bottom, a question of the intent of the party in
question, and usually such intent can only be inferred from the
totality of the challenged partys conduct both at and away from
the bargaining table. It involves the question of whether an
employers conduct demonstrates an unwillingness to bargain in
good faith or is merely hard bargaining.

7.Philippine American Cigar and Cigarette Factory Workers


Independent Union vs. Philippine American Cigar and Cigarette
Manufacturing, Co.

G.R. No. L-18364, February 28, 1963

61
Section 4(a) (5) of Republic Act No. 875, provides that :

(a) It shall be ULP for an employer:

To dismiss, discharge, or otherwise prejudice or discriminate


against an employee for having filed charges or for having given
or being about to give testimony under this Act.

Although the cited law pertains to the specific employee who filed
a case or given a testimony against the employer, it should be
construed in line with the spirit and purpose of said Section 4 and
of the legislation of which it forms part namely, to assure
absolute freedom of the employees and laborers to establish
labor organizations and unions, as well as to prefer charges
before the proper organs of the Government for violations of our
labor laws.

62
If the dismissal of an employee due to the filing by him of said
charges would be and is an undue restraint upon said freedom,
the dismissal of his brother owing to the non-withdrawal of the
charges of the former, would be and constitute as much a
restraint upon the same freedom. In fact, it may be greater and
more effective restraint thereto. Indeed, a complainant may be
willing to risk the hazards of a possible and even probable
retaliatory action by the employer in the form of a dismissal or
another discriminatory act against him personally, considering
that nobody is perfect, that everybody commits mistakes and that
there is always a possibility that the employer may find in the
records of any employee, particularly if he has long been in the
service, some act or omission constituting a fault or negligence
which may be an excuse for such dismissal or discrimination. Yet,
such complainant may not withstand the pressure that would
result if his brother or another member of his immediate family
were threatened with such action unless the charges in question
were withdrawn.

8. Victoriano vs. Elizalde Rope Workers Union

63
G.R. No. L-25246, September 12, 1974

The constitution provision only prohibits legislation for the


support of any religious tenets or the modes of worship of any
sect, thus forestalling compulsion by law of the acceptance of any
creed or the chosen form of religion within limits of utmost
amplitude. RA 3350 does not require as a qualification on
condition in joining any lawful association membership in any
particular religion on in any religious sect neither does the act
requires affiliation with a religious sect that prohibits its member
from joining a labor union as a condition on qualification for
withdrawing from labor union RA 3350 only exempts member
with such religious affililiation from the required to do a positive
act to exercise the right to join or to resign from the union.

64
SERIOUS MISCONDUCT AND DISOBEDIENCE

Dimabayao vs. NLRC, G.R. No. 122178, February 25, 1999

Willful disobedience of the employers lawful orders, as a just


cause for dismissal of an employee envisages the concurrence of
at least two requisites: (1) the employees assailed conduct must
have been willful being characterized by a wrongful and perverse
attitude; and (2) the order violated must have been reasonable,
lawful, made known to the employee and must pertain to the
duties which he had been engaged to discharge. we cannot
sustain the NLRC for upholding private respondents dismissal of
petitioner. Petitioners act of leaving his work place to relieve
himself can hardly be characterized as abandonment, much less a
willful or intentional disobedience of company rules since he was
merely answering the call of nature over which he had no control.
Restraining ones bowel movement can result in great discomfort
and affect adversely the efficiency, and even the health, of the
worker. Petitioners disobedience to his employers orders can
easily be categorized as trivial and unimportant, and as such,
does not merit a penalty as harsh as dismissal.

65
Bascon vs. CA, G.R. No. 144899, February 5, 2004

Willful disobedience of the employers lawful orders, as a just


cause for dismissal of an employee, envisages the concurrence of
at least two requisites: (1) the employees assailed conduct must
have been willful, that is, characterized by a wrongful and
perverse attitude; and (2) the order violated must have been
reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge
Not every case of willful disobedience by an employee of a
lawful work-connected order of the employer may be penalized
with dismissal. There must be reasonable proportionality
between, on the one hand, the willful disobedience by the
employee and, on the other hand, the penalty imposed therefor.

NagkakaisangLakasngManggagawasa Keihin (NLMK-


OLALIA-KMU) vs. Keihin Philippines Corporation, G.R. No.
171115, August 09, 2010

Misconduct is defined as the transgression of some


established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful

66
intent and not mere error in judgment. For serious misconduct to
justify dismissal under the law, (a) it must be serious, (b) must
relate to the performance of the employees duties; and (c) must
show that the employee has become unfit to continue working for
the employer.

Fujitsu Computer Products Corporation of the Philippines


vs. CA, G.R. No. 158232, March 31, 2005
In order to consider it a serious misconduct that would justify
dismissal under the law, the act must have been done in relation
to the performance of his duties as would show him to be unfit to
continue working for his employer.

SEXUAL HARRASMENT

Digitel Telecommunications Philippines, Inc., v. Soriano,


G.R. No. 166039, June 26, 2006

Forced resignation must be sufficiently established by


substantial, concrete and credible evidence. Evidence to be
believed, must not only proceed from the mouth of a credible
witness, but it must be credible in itself - such as the common

67
experience and observation of mankind can approve as probable
under the circumstances. We have no test of the truth of human
testimony, except its conformity to our knowledge, observation,
and experience. Whatever is repugnant to these belongs to the
miraculous and is outside of judicial cognizance.

Philippine Aeolus Automotive United Corporation. v.


NLRC, G.R. No. 4617, April 28, 2000

The gravamen of the offense in sexual harassment is not the


violation of the employee's sexuality but the abuse of power by
the employer. Any employee, male or female, may rightfully cry
"foul" provided the claim is well substantiated. Strictly speaking,
there is no time period within which he or she is expected to
complain through the proper channels. The time to do so may
vary depending upon the needs, circumstances, and more
importantly, the emotional threshold of the employee.

Sexual harassment is an imposition of misplaced "superiority"


which is enough to dampen an employee's spirit in her capacity
for advancement. It affects her sense of judgment; it changes her
life. If for this alone private respondent should be adequately

68
compensated. Thus, for the anxiety, the seen and unseen hurt
that she suffered, petitioners should also be made to pay her
moral damages, plus exemplary damages, for the oppressive
manner with which petitioners effected her dismissal from the
service, and to serve as a forewarning to lecherous officers and
employers who take undue advantage of their ascendancy over
their employees.

Aquino v. Acosta, A.M. No. CTA-01-1, April 2, 2002, En


Banc

A mere casual buss on the cheek is not a sexual conduct or


favor and does not fall within the purview of sexual harassment
under R.A. No. 7877. Section 3 (a) thereof provides, to wit:
Sec. 3. Work, Education or Training related Sexual Harassment
Defined. Work, education or training-related sexual harassment
is committed by an employer, employee, manager, supervisor,
agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person who, having authority, influence or
moral ascendancy over another in a work or training or education
environment, demands, requests or otherwise requires any sexual
favor from the other, regardless of whether the demand, request

69
or requirement for submission is accepted by the object of said
Act.
a) In a work-related or employment environment, sexual
harassment is committed when:chanrob1es virtual 1aw
library

1) The sexual favor is made as a condition in the hiring or in the


employment, reemployment or continued employment of said
individual, or in granting said individual favorable compensation,
terms, conditions, promotions or privileges; or the refusal to grant
sexual favor results in limiting, segregating or classifying the
employee which in anyway would discriminate, deprive or
diminish employment opportunities or otherwise adversely affect
said employees;
2) The above acts would impair the employees right or privileges
under existing labor laws; or
3) The above acts would result in an intimidating, hostile, or
offensive environment for the employee.
"Clearly, under the foregoing provisions, the elements of sexual
harassment are as follows:chanrob1es virtual 1aw library
1) The employer, employee, manager, supervisor, agent of the
employer, teacher, instructor, professor, coach, trainor, or any

70
other person has authority, influence or moral ascendancy over
another;
2) The authority, influence or moral ascendancy exists in a
working environment;
3) The employer, employee, manager, supervisor, agent of the
employer, teacher, instructor, professor, coach, or any other
person having authority, influence or moral ascendancy makes a
demand, request or requirement of a sexual favor.

Domingo v. Rayala, G.R. No. 155831, February 18, 2008

It is true that this provision calls for a "demand, request or


requirement of a sexual favor." But it is not necessary that the
demand, request or requirement of a sexual favor be articulated
in a categorical oral or written statement. It may be discerned,
with equal certitude, from the acts of the offender. it is not
essential that the demand, request or requirement be made as a
condition for continued employment or for promotion to a higher
position. It is enough that the respondent's acts result in creating
an intimidating, hostile or offensive environment for the employee

71
CSC v. Belagan, G. R. No. 132164, October 19, 2004, En
Banc

Generally, the character of a party is regarded as legally


irrelevant in determining a controversy.15 One statutory exception
is that relied upon by respondent, i.e., Section 51 (a) 3, Rule 130
of the Revised Rules on Evidence, which we quote here:
"SEC. 51. Character evidence not generally
admissible; exceptions. '
(a) In Criminal Cases:
xxxxxx
(3) The good or bad moral character of the offended party may
be proved if it tends to establish in any reasonable degree the
probability or improbability of the offense charged."
It will be readily observed that the above provision pertains only
to criminal cases, not to administrative offenses. And even
assuming that this technical rule of evidence can be applied here,
still, we cannot sustain respondent's posture.
Not every good or bad moral character of the offended party may
be proved under this provision. Only those which would establish
the probability or improbability of the offense charged. This
means that the character evidence must be limited to the traits

72
and characteristics involved in the type of offense charged.1 Thus,
on a charge of rape - character for chastity, on a charge of
assault - character for peaceableness or violence, and on a
charge of embezzlement - character for honesty.17 In one rape
case, where it was established that the alleged victim was morally
loose and apparently uncaring about her chastity, we found the
conviction of the accused doubtful.18
Credibility means the disposition and intention to tell the truth in
the testimony given. It refers to a person's integrity, and to the
fact that he is worthy of belief.19 A witness may be discredited by
evidence attacking his general reputation for truth,20 honesty21 or
integrity.22 Section 11, Rule 132 of the same Revised Rules on
Evidence reads:
"SEC. 11. Impeachment of adverse party's witness. 'A
witness may be impeached by the party against whom
he was called, by contradictory evidence, by evidence
that his general reputation for truth, honesty, or
integrity is bad, or by evidence that he has made at
other times statements inconsistent with his present
testimony, but not by evidence of particular
wrongful acts, except that it may be shown by the
examination of the witness, or the record of the

73
judgment, that he has been convicted of an
offense."

GROSS AND HABITUAL NEGLECT OF DUTIES

School of the Holy Spirit of Quezon City vs. Taguiam, G.R.


No. 165565, July 14, 2008

Loss of trust and confidence to be a valid ground for dismissal


must be based on a willful breach of trust and founded on clearly
established facts. A breach is willful if it is done intentionally,
knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. Otherwise stated, it must rest on
substantial grounds and not on the employer's arbitrariness,
whims, caprices or suspicion; otherwise, the employee would
eternally remain at the mercy of the employer. It should be
genuine and not simulated; nor should it appear as a mere
afterthought to justify earlier action taken in bad faith or a
subterfuge for causes which are improper, illegal or unjustified. It
has never been intended to afford an occasion for abuse because
of its subjective nature. There must, therefore, be an actual

74
breach of duty committed by the employee which must be
established by substantial evidence.

Fuentes vs. NLRC, G.R. No. L-75955, October 28, 1988

Petitioner Fuentes cannot invoke private respondents alleged


contributory negligence as there was no direct causal connection
between the negligence of the bank in not conducting the
investigation and the loss complained of. In a legal sense,
negligence is contributory only when it contributes proximately to
the injury, and not simply a condition for its occurrence. In the
case at bar, the banks inaction merely created a condition under
which the loss was sustained. Regardless of whether there was a
failure to investigate, the fact is that the money was lost in the
first place due to petitioners gross negligence. Such gross
negligence was the immediate and determining factor in the loss.

EXCESSIVE ABSENCES

Procter and Gamble Philippines vs. Bondesto, G.R. No.


139847, March 5, 2004

75
"Misconduct" has been defined as "the transgression of some
established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and implies wrongful
intent and not mere error in judgment." On the other hand,
"willful disobedience" envisages the concurrence of at least two
(2) requisites: the employees assailed conduct has been willful or
intentional, the willfulness being characterized by a "wrongful and
perverse attitude;" and the order violated must have been
reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to
discharge.Even assuming that the respondents absenteeism
constitutes willful disobedience, such offense does not warrant
the respondents dismissal. Not every case of insubordination or
willful disobedience by an employee reasonably deserves the
penalty of dismissal. There must be a reasonable proportionality
between the offense and the penalty.

Del Monte Phils., Inc., vs. Velasco, G.R. No. 153477,


March 6, 2007

Respondent's sickness was pregnancy-related and, therefore,


the petitioner cannot terminate respondent's services because in

76
doing so, petitioner will, in effect, be violating the Labor Code
which prohibits an employer to discharge an employee on
account of the latter's pregnancy.
Article 137 of the Labor Code provides:Art. 137.
Prohibited acts. - It shall be unlawful for any
employer:(2) To discharge such woman on
account of her pregnancy, while on leave or in
confinement due to her pregnancy.

Worldwide Papermills vs. NLRC, G.R. No. 113081, May 12,


1995

While it is true that compassion and human consideration


should guide the disposition of cases involving termination of
employment since it affects one's source or means of livelihood, it
should not be overlooked that the benefits accorded to labor do
not include compelling an employer to retain the services of an
employee who has been shown to be a gross liability to 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 a recognition of the

77
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 interest of
management but never should the scale be so titled if the result
is an injustice to the employer. Justicianemininegandaest (Justice
is to be denied to none).

Quiambao vs. manila Electric Company, G.R. No. 171023,


December 18, 2009

Serious misconduct is said to be a transgression of some


established and definite rule of action, a forbidden act, a
dereliction of duty, willful in character, and indicative of wrongful
intent and not mere error of judgment. it is held that a series of
irregularities when put together may constitute serious
misconduct.

Labudahon vs. NLRC, G.R. No. 112206, December 11,


1995

78
The employer is required to furnish an employee who is to be
dismissed two (2) written notices before such termination. The
first is the notice to apprise the employee of the particular acts or
omissions for which his dismissal is sought. This may be loosely
considered as the proper charge. The second is the notice
informing the employee of the employers decision to dismiss him
This decision, however, must come only after the employee is
given a reasonable period from receipt of the first notice within
which to answer the charge, and ample opportunity to be heard
and defend himself with the assistance of his representative, if he
so desires. Noncompliance by private respondent with these
requirements is a violation of the petitioners right to due process.

Brew Master Internacional vs. National Federation of


Labor Unions, G.R. No. 119243, April 17, 1997

Petitioners finding that complainant was guilty of


abandonment is misplaced. Abandonment as a just and valid
ground for dismissal requires the deliberate, unjustified refusal of
the employee to resume his employment. Two elements must
then be satisfied: (1) the failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention to

79
sever the employer-employee relationship. The second element is
the more determinative factor and must be evinced by overt acts.
Likewise, the burden of proof is on the employer to show the
employees clear and deliberate intent to discontinue his
employment without any intention of returning, mere absence is
not sufficient. These elements are not present here. First, as held
above, complainants absence was justified under the
circumstances. As to the second requisite, we are not convinced
that complainant ever intended to sever the employer-employee
relationship. Complainant immediately complied with the memo
requiring him to explain his absence, and upon knowledge of his
termination, immediately sued for illegal dismissal. These plainly
refuted any claim that he was no longer interested in returning to
work. Without doubt, the intention is lacking.

ABANDONMENT OF DUTIES

Tan Brothers of Basilan City v. Escudero, G.R. No. 188711,


July 3, 2013

Abandonment is the deliberate and unjustified refusal of an


employee to resume his employment. It constitutes neglect of

80
duty and is a just cause for termination of employment under
paragraph (b) of Article 282 of the Labor Code. To constitute
abandonment, however, there must be a clear and deliberate
intent to discontinue one's employment without any intention of
returning. In this regard, two elements must concur: (1) failure to
report for work or absence without valid or justifiable reason, and
(2) a clear intention to sever the employer-employee relationship,
with the second element as the more determinative factor and
being manifested by some overt acts. Otherwise stated, absence
must be accompanied by overt acts unerringly pointing to the fact
that the employee simply does not want to work anymore. It has
been ruled that the employer has the burden of proof to show a
deliberate and unjustified refusal of the employee to resume his
employment without any intention of returning.

Aliten vs. U-Need Lumber and Hardware, G.R. No.


168931, September 12, 2006

Abandonment, as a just and valid ground for dismissal,


requires the deliberate, unjustified refusal of the employee to
resume his employment. Mere absence or failure to report for
work is not enough to amount to such abandonment. There must

81
be a concurrence of the intention to abandon and some overt
acts from which an employee may be deduced as having no more
intention to work. The contemplation to discontinue the
employment must be shown by clear proof that it was deliberate
and unjustified. Abandonment is a matter of intention and cannot
lightly be presumed from certain equivocal acts. There must be
clear proof of deliberate and unjustified intent to sever the
employment relationship. Certainly, the operative act is still the
employees decisive act of putting an end to his employment.
Additionally, it must be stressed that the burden of proving the
existence of just cause for dismissing an employee, such as
abandonment, rests on the employer, a burden private
respondent failed to discharge. Jurisprudence is replete with
rulings that for abandonment of work to exist, it is essential that
(1) the employee must have failed to report for work or must
have been absent without valid and justifiable reason; and (2)
there must have been an indisputable intention to sever the
employer-employee relationship manifested by some overt acts,
with the second element as the more determinative factor.

Hodieng Concrete Products vs. Emilia, G.R. No. 149180,


G.R. No. February 14, 2005

82
Abandonment is a matter of intention and cannot lightly be
presumed from certain equivocal acts. To constitute
abandonment, there must be clear proof of deliberate and
unjustified intent to sever the employer-employee
relationship. Clearly, the operative act is still the
employee's ultimate act of putting an end to his
employment.Settled is the rule that mere absence or failure to
report for work is not tantamount to abandonment of work.

FRAUD OR WILLFUL BREACH OF TRUST (LOSS OF


TRUST AND CONFIDENCE)

Farrol vs. CA, G.R. No. 133259, February 10, 2000

The employer must comply with the twin requirements of two


notices and hearing. 12 The first notice is that which apprises the
employee of the particular acts or omissions for which his
dismissal is sought, and after affording the employee an
opportunity to be heard, a subsequent notice informing the latter
of the employers decision to dismiss him from work. Although the
employer has the prerogative to discipline or dismiss its

83
employee, such prerogative cannot be exercised wantonly, but
must be controlled by substantive due process and tempered by
the fundamental policy of protection to labor enshrined in the
Constitution. Infractions committed by an employee should merit
only the corresponding sanction demanded by the circumstances.
The penalty must be commensurate with the act, conduct or
omission imputed to the employee and imposed in connection
with the employers disciplinary authority

P.J. Lhuillier Inc., vs. NLRC, G.R. No. 158758, April 29,
2005

Loss of trust and confidence can constitute a just and valid


cause for an employee's dismissal. In fact, Article 282 of the
Labor Code provides the basis for the right of an employer to
dismiss his/her employee based on loss of trust and confidence.
The law provides that:
Art. 282. Termination by employer. 'An employer may
terminate an employment for any of the following causes:
(c) Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative; . . .

84
Proof beyond reasonable doubt is not needed to justify the loss.
It is sufficient that there be some basis for the same, or that the
employer has reasonable ground to believe that the employee is
responsible for the misconduct and his participation therein
renders him unworthy of the trust and confidence demanded of
his position.Nonetheless, the right of an employer to dismiss
employees on the ground of loss of trust and confidence,
however, must not be exercised arbitrarily and without just
cause. Unsupported by sufficient proof, loss of confidence is
without basis and may not be successfully invoked as a ground
for dismissal. Loss of confidence as a ground for dismissal has
never been intended to afford an occasion for abuse by the
employer of its prerogative, as it can easily be subject to abuse
because of its subjective nature, as in the case at bar, and the
loss must be founded on clearly established facts sufficient to
warrant the employee's separation from work.

POSITION OF TRUST AND CONFIDENCE

Philippine Pizza, Inc., vs. Bungabong, G. R. No. 154315,


May 9, 2005

85
Where the employee has access to the employer's property in
the form of merchandise and articles for sale, the relationship of
the employer and the employee necessarily involves trust and
confidence Termination of an employee on the ground of loss of
trust and confidence is allowed so long as there is basis for the
loss of trust or that the employer has reasonable ground to
believe that the employee is responsible for the misconduct that
rendered him unworthy of the trust and confidence demanded by
his position.22 In this regard, the employer must establish clearly
and convincingly by substantial evidence the facts and incidents
upon which the loss of trust and confidence in the employee may
fairly be made to rest.

University of the Immaculate Conception v. Office of the


Secretary of Labor and Employment, et. al., G.R. No.
178085-178086, September 14, 2015

In determining whether loss of confidence is a just cause for


dismissal under Article 282(c), we laid down the following
requisites in the 2008 case of Bristol Myers Squibb (Phils.), Inc. v.
Baban:55cralawlawlib

86
(a) The employee must hold a position of trust and
confidence.
(b) There must be a willful ad that would justify the loss of
trust and confidence.56
As a rule, loss of confidence may only be invoked by the
employer against an employee occupying a position of
responsibility, trust and confidence57 hence, the first
requisite.Confidentiality is not a matter of official rank, it is a
matter of job content and authority. It is not measured by
closeness to or distance from top management but by the
significance of the jobholder's role in the pursuit of corporate
objectives and strategy. In principle, every managerial position is
confidential one does not become a manager without having
gained the confidence of the appointing authority. But not every
confidential employee is managerial; lie may be a supervisory or
even a rank-and-file employee. Confidentiality, in other words,
cuts across the pyramid of jobs from the base to the apex, from
messengerial to managerial.63
chanrobleslaw

A confidential employee is defined as one entrusted with


confidence on delicate matters, or with the custody, handling, or

87
care and protection of the employer's property.64 For all intents
and purposes, the terms "confidential employee" and "employee
holding a position of trust and confidence" are synonymous.
Fundamentally, the two categories mentioned in Mabeza are
simply subcategories of the broader category of confidential
employeesThe essence of the second requisite is that the loss of
confidence must be based on a willful breach of trust founded on
clearly established facts.

TERMINATION OF EMPLOYMENT PURSUANT TO A


UNION SECURITY CLAUSE

Tanduay Distillery Labor Union vs. NLRC, G.R. No. 75037,


April 30, 1987

Article 249 (e) of the Labor Code as amended specifically


recognizes the closed shop arrangement as a form of union
security. The closed shop, the union shop, the maintenance of
membership shop, the preferential shop, the maintenance of
treasury shop, and check-off provisions are valid forms of union
security and strength. They do not constitute unfair labor practice

88
nor are they violations of the freedom of association clause of the
Constitution.

TOTALITY OF INFRACTIONS DOCTRINE

Valiao vs. CA, G.R. No. 146621, July 30, 2004

The essence of due process is simply an opportunity to be


heard, or as applied to administrative proceedings, an opportunity
to explain ones side or an opportunity to seek a reconsideration
of the action or ruling complained of. A formal or trial-type
hearing is not at all times and in all instances essential, as the
due process requirements are satisfied where the parties are
afforded fair and reasonable opportunity to explain their side of
the controversy at hand. What is frowned upon is the absolute
lack of notice and hearing. Even as the law is solicitous of the
welfare of employees, it must also protect the rights of an
employer to exercise what are clearly management
prerogatives. As long as the companys exercise of those rights
and prerogative is in good faith to advance its interest and not for
the purpose of defeating or circumventing the rights of

89
employees under the laws or valid agreements, such exercise will
be upheld.

Alvarez vs. Golden Tri Bloc, Inc., G.R. No. 202158,


September 25, 2013

The totality of infractions or the number of violations


committed during the period of employment shall be
considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by petitioner should
not be taken singly and separately. Fitness for continued
employment cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and ability separate
and independent of each other. While it may be true that
petitioner was penalized for his previous infractions, this does
not and should not mean that his employment record would be
wiped clean of his infractions. After all, the record of an
employee is a relevant consideration in determining the penalty
that should be meted out since an employee's past misconduct
and present behavior must be taken together in determining
the proper imposable penalty. Despite the sanctions imposed
upon petitioner, he continued to commit misconduct and

90
exhibit undesirable behavior onboard. Indeed, the employer
cannot be compelled to retain a misbehaving employee, or one
who is guilty of acts inimical to its interests. It has the right to
dismiss such an employee if only as a measure of self-
protection.

ANALOGOUS CASES

Yrasuegui vs. PAL, G.R. No. 168081, October 17, 2008

[v]oluntariness basically means that the just cause is solely


attributable to the employee without any external force
influencing or controlling his actions. This element runs
through all just causes under Article 282, whether they be in
the nature of a wrongful action or omission. Gross and habitual
neglect, a recognized just cause, is considered voluntary
although it lacks the element of intent found in Article 282(a),
(c), and (d)

John HancockLifeInsuranceCorporation vs. Davis, G.R.


No. 169549, September 3, 2009

91
Article 282(e) of the Labor Code talks of other analogous
causes or those which are susceptible of comparison to another in
general or in specific detail. For an employee to be validly
dismissed for a cause analogous to those enumerated in Article
282, the cause must involve a voluntary and/or willful act or
omission of the employee. A cause analogous to serious
misconduct is a voluntary and/or willful act or omission attesting
to an employees moral depravity. Theft committed by an
employee against a person other than his employer, if proven by
substantial evidence, is a cause analogous to serious misconduct.

INSTALLATION OF LABOR-SAVING DEVICES

Magnolia Dairy Products Corporation vs. NLRC, G.R. NO.


114952, January 29, 1996

Article 283 of the Labor Code authorizes an employer, like the


herein petitioner, to terminate the employment of any employee
due to the installation of labor saving devices. The installation of
these devices is a management prerogative, and the courts will
not interfere with its exercise in the absence of abuse of

92
discretion; arbitrariness, or maliciousness on the part of
management, as in this case. Nonetheless, this did not excuse
petitioner from complying with the required written notice to the
employee and to the Department of Labor and Employment
(DOLE) at least one month before the intended date of
termination. This procedure enables an employee to contest the
reality or good faith character of the asserted ground for the
termination of his services before the DOLE.

REDUNDANCY

Asian Alcohol Corporation vs. NLRC, G.R. No. 131108,


March 25, 1999

The requirements for valid retrenchment which must be proved


by clear and convincing evidence are: (1) that the retrenchment
is reasonably necessary and likely to prevent business losses
which, if already incurred, are not merely de minimis, but
substantial, serious, actual and real, or if only expected, are
reasonably imminent as perceived objectively and in good faith by
the employer; 24 (2) that the employer served written notice
both to the employees and to the Department of Labor and

93
Employment at least one month prior to the intended date of
retrenchment; 25 (3) that the employer pays the retrenched
employees separation pay equivalent to one month pay or at
least month pay for every year of service, whichever is higher;
26 (4) that the employer exercises its prerogative to retrench
employees in good faith for the advancement of its interest and
not to defeat or circumvent the employees right to security of
tenure; 27 and (5) that the employer used fair and reasonable
criteria 28 in ascertaining who would be dismissed and who would
be retained among the employees, such as status (i.e., whether
they are temporary, casual, regular or managerial employees),
efficiency, seniority, 29 physical fitness, age, and financial
hardship for certain workers.

Wiltshire File Co., Inc., vs. NLRC, G.R. No. 82249 February
7, 1991

REDUNDANCY; DOES NOT NECESSARY MEAN DUPLICATION


OF WORK.--We do not believe that redundancy in an employers
personnel force necessarily or even ordinarily refers to duplication
of work. That no other person was holding the same position that
private respondent held prior to the termination of his services,

94
does not show that his position had not become redundant.
Indeed, in any well-organized business enterprise, it would be
surprising to find duplication of work and two (2) or more people
doing the work of one person. We believe that redundancy, for
purposes of our Labor Code, exists where the services of an
employee are in excess of what is reasonably demanded by the
actual requirements of the enterprise. Succinctly put, a position is
redundant where it is superfluous, and superfluity of a position or
positions may be the outcome of a number of factors, such as
overhiring of workers, decreased volume of business, or dropping
of a particular product line or service activity previously
manufactured or undertaken by the enterprise. The employer has
no legal obligation to keep in its payroll more employees than are
necessary for the operation of its business.

"An employer has a much wider discretion in terminating the


employment relationship of managerial personnel as compared to
rank and file employees. However, such prerogative of
management to dismiss or lay off an employee must be made
without abuse of discretion, for what is at stake is not only the
private respondents position but also his means of livelihood . . ."
The determination of the continuing necessity of a particular

95
officer or position in a business corporation is managements
prerogative, and the courts will not interfere with the exercise of
such so long as no abuse of discretion or merely arbitrary or
malicious action on the part of management is shown.

DISMISSAL; DOES NOT REQUIRE HEARING WHEN TERMINATION


WAS DONE FOR ACTS NOT ATTRIBUTABLE TO THE EMPLOYEE
Termination of an employees services because of retrenchment
to prevent further losses or redundancy, is governed by Article
283 of the Labor Code. Termination of services for any of the
above described causes should be distinguished from termination
of employment by reason of some blameworthy act or omission
on the part of the employee, in which case the applicable
provision is Article 282 of the Labor Code. We note that Section 2
of Rule XIV quoted above requires the notice to specify "the
particular acts or omissions constituting the ground for his
dismissal", a requirement which is obviously applicable where the
ground for dismissal is the commission of some act or omission
falling within Article 282 of the Labor Code. Again, Section 5 gives
the employee the right to answer and to defend himself against
"the allegations stated against him in the notice of dismissal." It is
such allegations by the employer and any counter-allegations that

96
the employee may wish to make that need to be heard before
dismissal is effected. Thus, Section 5 may be seen to envisage
charges against an employee constituting one or more of the just
causes for dismissal listed in Article 282 of the Labor Code.
Where, as in the instant case, the ground for dismissal or
termination of services does not relate to a blameworthy act or
omission on the part of the employee, there appears to us no
need for an investigation and hearing to be conducted by the
employer who does not, to begin with, allege any malfeasance or
non-feasanceon the part of the employee. In such case, there are
no allegations which the employee should refute and defend
himself from. Thus, to require petitioner Wiltshire to hold a
hearing, at which private respondent would have had the right to
be present, on the business and financial circumstances
compelling retrenchment and resulting in redundancy, would be
to impose upon the employer an unnecessary and inutile hearing
as a condition for legality of termination. This is not to say that
the employee may not contest the reality or good faith character
of the retrenchment or redundancy asserted as grounds for
termination of services. The appropriate forum for such
controversion would, however, be the Department of Labor and
Employment and not an investigation or hearing to be held by the

97
employer itself It is precisely for this reason that an employer
seeking to terminate services of an employee or employees
because of "closure of establishment and reduction of personnel",
is legally required to give a written notice not only to the
employee but also to the Department of Labor and Employment
at least one month before effectivity date of the termination. In
the instant case, private respondent did controvert before the
appropriate labor authorities the grounds for termination of
services set out in petitioners letter to him dated 17 June 1985.

AWARD OF DAMAGES; NOT WARRANTED WHEN DISMISSAL WAS


NOT CARRIED OUT IN AN ARBITRARY, CAPRICIOUS AND
MALICIOUS MANNERthe termination of private respondents
services was not a wrongful act. There is in this case no clear and
convincing evidence of record showing that the termination of
private respondents services, while due to an authorized or
statutory cause, had been carried out in an arbitrary, capricious
and malicious manner, with evident personal ill-will.
Embarrassment, even humiliation, that is not proximately caused
by a wrongful act does not constitute a basis for an award of
moral damages.

98
Smart Communications, Inc., vs. Astorga, G.R. No.
January 28, 2008

The characterization of an employee's services as superfluous


or no longer necessary and, therefore, properly terminable, is an
exercise of business judgment on the part of the employer. The
wisdom and soundness of such characterization or decision is not
subject to discretionary review provided, of course, that a
violation of law or arbitrary or malicious action is not shown. an
employer is not precluded from adopting a new policy conducive
to a more economical and effective management even if it is not
experiencing economic reverses. Neither does the law require
that the employer should suffer financial losses before he can
terminate the services of the employee on the ground of
redundancy. his procedural infirmity would not render the
termination of Astorga's employment illegal. The validity of
termination can exist independently of the procedural infirmity of
the dismissal. In DAP Corporation v. CA, we found the dismissal
of the employees therein valid and for authorized cause even if
the employer failed to comply with the notice requirement under
Article 283 of the Labor Code.

99
RETRENCHMENT

Flight Attendants and Stewards Association of the


Philippines (FASAP) vs. PAL, G.R. No. 178083, July 22,
2008

The following elements under Article 283 of the Labor Code


must concur or be present, to wit:
(1) That retrenchment is reasonably necessary and likely to
prevent business losses which, if already incurred, are not merely
de minimis, but substantial, serious, actual and real, or if only
expected, are reasonably imminent as perceived objectively and
in good faith by the employer;
(2) That the employer served written notice both to the
employees and to the Department of Labor and Employment at
least one month prior to the intended date of retrenchment;
(3) That the employer pays the retrenched employees
separation pay equivalent to one (1) month pay or at least
one-half () month pay for every year of service, whichever is
higher;
(4) That the employer exercises its prerogative to retrench
employees in good faith for the advancement of its interest and

100
not to defeat or circumvent the employees right to security of
tenure; and,
(5) That the employer uses fair and reasonable criteria in
ascertaining who would be dismissed and who would be
retained among the employees, such as status, efficiency,
seniority, physical fitness, age, and financial hardship for
certain workers.
In the absence of one element, the retrenchment scheme
becomes an irregular exercise of management prerogative.

Revidad vs. NLRC, G.R. No. 111105, June 27, 1995

To prevent losses means that retrenchment or termination of


the services of some employees is authorized to be undertaken by
the employer sometime before the anticipated losses are actually
sustained or realized. Not every asserted possibility of loss is
sufficient legal warrant for the reduction of personnel. Employer
bears the burden to prove his allegation of economic or business
reverses with clear and satisfactory evidence, it being in the
nature of affirmative defense.

Saballa vs. NLRC, G.R. Nos. 102472-84, August 22, 1996

101
Elements of a valid retrenchment:

1. the losses expected should be substantial and not merely de


minimis in extent: If the loss purportedly sought to be
forestalled by retrenchment is clearly shown to be insubstantial
and inconsequential in character, the bonafide nature of the
retrenchment would appear to be seriously in question.
2. the substantial loss apprehended must be reasonably
imminent: as such imminence can be perceived objectively and
in good faith by the employer. There should, in other words, be
a certain degree of urgency for the retrenchment, which is
after all a drastic recourse with serious consequences for the
livelihood of the employees retired or otherwise laid-off.
3. it must be reasonably necessary and likely to effectively
prevent the expected losses. The employer should have taken
other measures prior or parallel to retrenchment to forestall
losses, i.e., cut other costs than labor costs. An employer who,
for instance, lays off substantial numbers of workers while
continuing to dispense fat executive bonuses and perquisites or
so-called "golden parachutes", can scarcely claim to be
retrenching in good faith to avoid losses. To impart operational

102
meaning to the constitutional policy of providing "full
protection" to labor, the employers prerogative to bring down
labor costs by retrenching must be exercised essentially as a
measure of last resort, after less drastic means e.g.,
reduction of both management and rank-and-file bonuses and
salaries, going on reduced time, improving manufacturing
efficiencies, trimming of marketing and advertising costs, etc.
have been tried and found wanting.
4. Alleged losses if already realized, and the expected imminent
losses sought to be forestalled, must be proved by sufficient
and convincing evidence. The reason for requiring this
quantum of proof is readily apparent: any less exacting
standard of proof would render too easy the abuse of this
ground for termination of services of employees.

Andrada vs. NLRC, G.R. No. 173231, December 28, 2007

Retrenchment and redundancy are two different concepts;


they are not synonymous and therefore should not be used
interchangeably. This Court explained in detail the difference
between the two concepts in Sebuguero v. NLRC:

103
Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual
requirements of the enterprise. A position is redundant where
it is superfluous, and superfluity of a position or positions may
be the outcome of a number of factors, such as over hiring of
workers, decreased volume of business, or dropping of a
particular product line or service activity previously
manufactured or undertaken by the enterprise.
Retrenchment, on the other hand, is used interchangeably with
the term "lay-off." It is the termination of employment initiated
by the employer through no fault of the employee's and
without prejudice to the latter, resorted to by management
during periods of business recession, industrial depression, or
seasonal fluctuations, or during lulls occasioned by lack of
orders, shortage of materials, conversion of the plant for a new
production program or the introduction of new methods or
more efficient machinery, or of automation. Simply put, it is an
act of the employer of dismissing employees because of losses
in the operation of a business, lack of work, and considerable
reduction on the volume of his business, a right consistently
recognized and affirmed by this Court.Thus, simply put,
redundancy exists when the number of employees is in excess

104
of what is reasonably necessary to operate the business. The
declaration of redundant positions is a management
prerogative. The determination that the employee's services
are no longer necessary or sustainable and therefore properly
terminable is an exercise of business judgment by the
employer. The wisdom or soundness of this judgment is not
subject to the discretionary review of the Labor Arbiter and
NLRC.

CLOSURE OR CESSATION OF BUSINESS OPERATIONS

Eastridge Golf Club, Inc., vs. Eastridge Golf Club, Inc.,


Labor Union-Super, G.R. No. 166760, August 22, 2008

Closure or cessation of business is the complete or


partial cessation of the operations and/or shut-down of the
establishment of the employer. It is carried out to either stave
off the financial ruin or promote the business interest of the
employer. Unlike retrenchment, closure or cessation of
business, as an authorized cause of termination of
employment, need not depend for validity on evidence
of actual or imminent reversal of the employer's

105
fortune. Article 283 authorizes termination of employment due
to business closure, regardless of the underlying reasons and
motivations therefore, be it financial losses or not.

Industrial Timber Corporation vs. NLRC, G.R. No. 107302


and 107306, June 10, 1997

Under the law, for an employer to validly terminate the service


of his employees under the aforesaid ground, he has to comply
with two (2) requirements, namely: (a) serving a written notice
on the workers and the DOLE at least one (1) month before
the effective date of the closure and (b) payment of separation
pay equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher, with
a fraction of at least six (6) months to be considered one (1)
whole year.

DISEASE OR ILLNESS

Crayons Processing, Inc., vs. Pula, G.R. No. 167727, July


30, 2007

106
For a dismissal on the ground of disease to be considered
valid, two requisites must concur: (a) the employee must be
suffering from a disease which cannot be cured within six months
and his continued employment is prohibited by law or prejudicial
to his health or to the health of his co-employees; and (b) a
certification to that effect must be issued by a competent public
health authority. The burden falls upon the employer to establish
these requisites,and in the absence of such certification, the
dismissal must necessarily be declared illegal. I is only where
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 that the latter
could be validly terminated from his job."

Without the required certification, the characterization or even


diagnosis of the disease would primarily be shaped according to
the interests of the parties rather than the studied analysis of the
appropriate medical professionals. The requirement of a medical
certificate under Article 284 cannot be dispensed with; otherwise,
it would sanction the unilateral and arbitrary determination by the

107
employer of the gravity or extent of the employee's illness and
thus defeat the public policy in the protection of labor.

Cebu Royal Plant vs. Minister of Labor, G.R. No. L-58639,


August 12, 1987

TERMINATION ON THE BASIS OF DISEASE; CERTIFICATE


FROM A COMPETENT PUBLIC HEALTH AUTHORITY,
INDISPENSABLE The applicable rule on the ground for dismissal
invoked against him is Section 8, Rule I, Book VI, of the Rules
and Regulations Implementing the Labor Code. The record does
not contain the certification required by the above rule. The
medical certificate offered by the petitioner came from its own
physician, who was not a "competent public health authority,"
and merely stated the employees disease, without more. We may
surmise that if the required certification was not presented, it was
because the disease was not of such a nature or seriousness that
it could not be cured within a period of six months even with
proper medical treatment. If so, dismissal was unquestionably a
severe and unlawful sanction.

108
PROCEDURE TO BE OBSERVED IN JUST CAUSES
TERMINATION

Ruffy vs. NLRC, G.R. No. 84193, February 15, 1990

LABOR LAW AND SOCIAL LEGISLATION; TERMINATION OF


EMPLOYMENT; PROCEDURE UNDER BATAS BLG. 130 AND THE
RULES IMPLEMENTING IT ARE CONDITIONS SINE QUA NON
BEFORE DISMISSAL MAY BE VALIDLY EFFECTED. As we can
see, the law lays down the procedure prior to the dismissal of an
employee. It need not be observed to the letter, but at least, it
must be done in the natural sequence of notice, hearing, and
judgment. In the case at bar, there is no doubt that at the very
outset, that is, prior to investigation, the petitioner was informed
that his services had been terminated. He was made to air his
side subsequently, it is true, yet the stubborn fact remains that
notwithstanding such an opportunity, if an opportunity it was, he
had been dismissed from the firm. We have held that the
procedure under Batas Blg. 130 and the rules implementing it are
conditions sine qua non, before dismissal may be validly effected.
We reiterate that the process set forth by the law need not be
obeyed according to its letter, but rather, according to its spirit,

109
as a due process measure. "Fire the employee, and let him
explain later" is not in accord with that expedient.

MEANING OF "AMPLE OPPORTUNITY." It does not matter that


the petitioners termination, given on December 19, 1984, was
effective on January 1, 1985, which, so the respondent
Commission insists, gave him enough chance to present his side.
This is not the "ample opportunity" referred to by the labor
relations law of 1981. By "ample opportunity" is meant every kind
of assistance that management must accord to the employee to
enable him to prepare adequately for his defense. Under the rules
indeed, the worker may be provided with a representative. In this
case, although the interregnum between the date or the notice of
dismissal and the date of its effectivity ostensibly provided the
petitioner time within which to defend himself, there really was
nothing to defend, because the fact is, he had been fired. We can
not countenance such a situation.

King of Kings Transport, Inc., vs. Mamac, G.R. No.


166208, June 29, 2007

110
Reasonable opportunity under the Omnibus Rules means
every kind of assistance that management must accord to the
employees to enable them to prepare adequately for their
defense.15 This should be construed as a period of at least five
(5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them,
consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint.
Moreover, in order to enable the employees to intelligently
prepare their explanation and defenses, the notice should contain
a detailed narration of the facts and circumstances that will serve
as basis for the charge against the employees. A general
description of the charge will not suffice. Lastly, the notice should
specifically mention which company rules, if any, are violated
and/or which among the grounds under Art. 282 is being charged
against the employees.

IBM Philippines vs. NLRC, G.R. No. 117221, April 13, 1999

The liberality of procedure in administrative actions is subject


to limitations imposed by basic requirements of due process; this
procedural rule should not be construed as a license to disregard

111
certain fundamental evidenciary rules. The computer print-outs,
which constitute only evidence of petitioners, afford no assurance
of their authenticity since they are unsigned. The liberal view in
the conduct of proceedings before administrative agencies, have
nonetheless consistently required some PROOF OF
AUTHENTICITY OR RELIABILITY as condition for the
admission of documents. The procedural technicality and
concerns are more paramount principles and requirements of due
process, which may not be sacrificed to speed or expediency,
Article 22 of the Labor Code which states that DUE PROCESS
MUST NEVER BE SUBORDINATED TO EXPEDIENCY OR
DISPATCH

112
L. Management Prerogative

1. Discipline

Sagales vs. Rustans Commercial Corporation, G.R. No.


166554, November 27, 2008

The Supreme Court took into consideration the various


circumstances attendant to the case. Sagales has worked for
Rustan for almost 31 years; (2) his tireless and faithful service is
attested by the numerous awards he has received; (3) the
incident in June 2001 was his first offense in his long years of
service; (4) the value of the squid heads worth P50.00 is
negligible; (5) Rustan practically did not lose anything as the
squid heads were considered scrap goods and usually thrown
away in the wastebasket; (6) the ignominy and shame undergone
by Sagales in being imprisoned, however momentary, is
punishment in itself; and (7) Sagales was already preventively
suspended for one month, which is already a commensurate
punishment for the infraction committed. Truly, Sagales has more

113
than paid his due. Nevertheless, it is useless to reinstate Sagales
because he should have been retired already at the time of this
decision. So instead of reinstatement, Sagales was awarded
separation pay computed at one-month salary for every year of
service; backwages were also awarded.

The Supreme Court also emphasized: the right of every employee


to security of tenure is all the more secured by the Labor Code by
providing that the employer shall not terminate the services of
an employee except for a just cause or when authorized by law.
However, the employer, in exercising its right to terminate
employees for just and authorized causes must impose a penalty
commensurate with the act, conduct, or omission imputed to the
employee.

Solvic Industrial Corp. vs. NLRC, G.R. No. 125548,


September 25, 1998

We agree with the NLRC that the acts of private respondent


are not so serious as to warrant the extreme penalty of
dismissal. Private respondent was accused of hitting the victim
once with the blunt side of a bolo. Private respondent could have
attacked him with the blade of the weapon, and he could have

114
struck him several times. But he did not, thus negating any intent
on his part to inflict fatal injuries. In fact, the victim merely
sustained a minor abrasion and has since forgiven and reconciled
with the private respondent. If the party most aggrieved --
namely, the foreman -- has already forgiven the private
respondent, then petitioner cannot be more harsh and
condemning than the victim. Besides, no criminal or civil action
has been instituted against private respondent. Furthermore, in
his twenty years of service in the company, he has not been
charged with any similar misconduct.

Arguing that the length of private respondents service cannot


atone for his serious misconduct, petitioner invokes Villeno v.
NLRCin which the Court held that considerations of first offense
and length of service are overshadowed by the seriousness of the
offense. Villeno, however, is not applicable. In that case, the
employee disconnected the steering line cable of the ship,
thereby needlessly delaying its departure. The Court recognized
the gravity of the work-related misconduct, for the concomitant
delay affected the business and the reputation of the shipping
company and exposed it to lawsuits for breach of contract. In the
present case, private respondents offense was not as serious as

115
that in Villeno. Its consequences did not directly affect the
business of petitioner or the atmosphere in the work premises.

Verily, we do not condone the action of the private respondent.


We believe, however, that the NLRC did not commit grave abuse
of discretion in ruling that the penalty of dismissal was too harsh
and not commensurate with the said offense. Where a penalty
less punitive would suffice, whatever missteps may be committed
by labor ought not to be visited with a consequence so severe. In
so ruling, we reiterate that an employers power to discipline its
workers must be exercised with caution, lest it erode the
constitutional guarantee of security of tenure. This is especially
true when the penalty being imposed is dismissal, which leads to
severance of employment ties and the economic dislocation of the
employee. Because of the serious implications of this penalty, our
Labor Code decrees that an employee cannot be dismissed,
except for the most serious causes. The overly concern of our
laws for the welfare of employees is in accord with the social
justice philosophy of our Constitution.

2. Transfer of Employees

Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, July

116
7, 2004

The so-called harassment which Mendoza allegedly experienced


in the aftermath of the reshuffling of employees at the bank is
but a figment of his imagination as there is no evidence extant on
record which substantiates the same. His alleged demotion, the
cold shoulder stance, the things about his chair and table, and
the alleged reason for the harassment are but allegations bereft
of proof and are perforce inadmissible as self-serving statements
and can never be considered repositories of truth nor serve as
foundations of court decisions anent the resolution of the litigants
rights.

When Mendoza was reshuffled to the position of clerk at the


bank, he was not demoted as there was no [diminution] of his
salary benefits and rank. He could even retain his position title,
had he only requested for it pursuant to the reply of the
Chairman of the banks board of directors to Mendozas letter
protesting the reshuffle. There is, therefore, no cause to doubt
the reasons which the bank propounded in support of its move to
reshuffle its employees, viz:

1. to familiarize bank employees with the various phases of bank


operations, and
117
2. to further strengthen the existing internal control system of the
bank.

The reshuffling of its employees was done in good faith and


cannot be made the basis of a finding of constructive dismissal.

The fact that Mendoza was no longer included in the banks


payroll for July 1 to 15, 1999 does not signify that the bank has
dismissed the former from its employ. Mendoza separated himself
from the banks employ when, on June 24, 1999, while on leave,
he filed the illegal dismissal case against his employer for no
apparent reason at all.

PT&T vs. Lapalana, G.R. No. 76645, July 23, 1991

An employer transferring an employee to another office in the


exercise of what it took to be sound business judgment and in
accordance with pre-determined and established office policy and
practice, and of the latter having what was believed to be
legitimate reasons for declining that transfer, rooted in
considerations of personal convenience and difficulties for the
family. Under these circumstances, the solution proposed by the
employee herself, of her voluntary termination of her employment
and the delivery to her of corresponding separation pay, would
118
appear to be the most equitable. Certainly, the Court cannot
accept the proposition that when an employee opposes his
employer's decision to transfer him to another work place, there
being no bad faith or underhanded motives on the part of either
party, it is the employee's wishes that should be made to prevail.
In adopting that proposition by way of resolving the controversy,
the respondent NLRC gravely abused its discretion.

Allied Banking Corporation vs. CA, G.R. No. 144412,


November 18, 2003

The constant transfer of bank officers and personnel with


accounting responsibilities from one branch to another is a
standard practice of Allied Bank, which has more than a hundred
branches throughout the country.Allied Bank does this primarily
for internal control. It also enables bank employees to gain the
necessary experience for eventual promotion. The
BangkoSentralngPilipinas, in its Manual of Regulations for Banks
and Other Financial Intermediaries, requires the rotation of these
personnel. The Manual directs that the duties of personnel
handling cash, securities and bookkeeping records should be
rotated and that such rotation should be irregular, unannounced

119
and long enough to permit disclosure of any irregularities or
manipulations.

Galanida was well aware of Allied Banks policy of periodically


transferring personnel to different branches. As the Court of
Appeals found, assignment to the different branches of Allied
Bank was a condition of Galanidas employment. Galanida
consented to this condition when he signed the Notice of
Personnel Action.

The refusal to obey a valid transfer order constitutes willful


disobedience of a lawful order of an employer.Employees may
object to, negotiate and seek redress against employers for rules
or orders that they regard as unjust or illegal. However, until and
unless these rules or orders are declared illegal or improper by
competent authority, the employees ignore or disobey them at
their peril. For Galanidas continued refusal to obey Allied Banks
transfer orders, we hold that the bank dismissed Galanida for just
cause in accordance with Article 282 (a) of the Labor
Code.Galanida is thus not entitled to reinstatement or to
separation pay.

120
Genuino Ice Company, Inc. vs. Magpantay, G.R. No.
147790, June 27, 2006

Under Article 282 of the Labor Code, as amended, an employer


may terminate an employment for any of the following causes:
(a) serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work; (b) gross and
habitual neglect by the employee of his duties; (c) fraud or
willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative; (d) commission of a
crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly
authorized representative; and, (e) other causes analogous to the
foregoing. The employer has the burden of proving that the
dismissal was for a just cause; failure to show this would
necessarily mean that the dismissal was unjustified and,
therefore, illegal.Neglect of duty, to be a ground for dismissal,
must be both gross and habitual.Gross negligence connotes want
of care in the performance of ones duties. Habitual neglect
implies repeated failure to perform ones duties for a period of
time, depending upon the circumstances. On the other hand,

121
fraud and willful neglect of duties imply bad faith on the part of
the employee in failing to perform his job to the detriment of the
employer and the latters business. Thus, the single or isolated act
of negligence does not constitute a just cause for the dismissal of
the employee.

Thus, the Court agrees with the CA that respondents four-day


absence is not tantamount to a gross and habitual neglect of
duty. Willful disobedience, or insubordination as otherwise
branded in this case, as a just cause for dismissal of an
employee, necessitates the concurrence of at least two requisites:
(1) the employee's assailed conduct must have been willful, that
is, characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known
to the employee and must pertain to the duties which he had
been engaged to discharge.

The rule is that the transfer of an employee ordinarily lies within


the ambit of the employers prerogatives. The employer exercises
the prerogative to transfer an employee for valid reasons and
according to the requirement of its business, provided the
transfer does not result in demotion in rank or diminution of the
employees salary, benefits and other privileges. Respondent
122
cannot adamantly refuse to abide by the order of transfer without
exposing himself to the risk of being dismissed. Hence, his
dismissal was for just cause in accordance with Article 282 (a) of
the Labor Code. Consequently, respondent is not entitled to
reinstatement or separation pay and backwages.

3. Grant of Bonus

Philippine Duplicators v. NLRC, G.R. No. 110068, February


15, 1995, En Banc

Productivity bonuses and sales commissions may have an


incentive effect. But there is reason to distinguish one from the
other here. Productivity bonuses are generally tied to the
productivity or profit generation of the employer corporation.
Productivity bonuses are not directly dependent on the extent an
individual employee exerts himself. A productivity bonus is
something extra for which no specific additional services are
rendered by any particular employee and hence not legally
demandable, absent a contractual undertaking to pay it. Sales
commissions, on the other hand, such as those paid in
Duplicators, are intimately related to or directly proportional to
the extent or energy of an employee's endeavors. Commissions

123
are paid upon the specific results achieved by a salesman-
employee. It is a percentage of the sales closed by a salesman
and operates as an integral part of such salesman's basic pay.

Finally, the statement of the Second Division in Boie-Takeda


declaring null and void the second paragraph of Section 5(a) of
the Revised Guidelines Implementing the 13th Month Pay issued
by former Labor Secretary Drilon, is properly understood as
holding that that second paragraph provides no legal basis for
including within the term "commission" there used additional
payments to employees which are, as a matter of fact, in the
nature of profit- sharing payments or bonuses. If and to the
extent that such second paragraph is so interpreted and applied,
it must be regarded as invalid as having been issued in excess of
the statutory authority of the Secretary of Labor. That same
second paragraph however, correctly recognizes that
commissions, like those paid in Duplicators, may constitute part
of the basic salary structure of salesmen and hence should be
included in determining the 13th month pay; to this extent, the
second paragraph is and remains valid.

Eastern Telecomunications Phil. Inc. v. Eastern Telecoms

124
Union, G.R. No. 185665, February 8, 2012

A bonus is a gratuity or act of liberality of the giver, which the


recipient has no right to demand as a matter of right. The grant
of a bonus is basically a management prerogative which cannot
be forced upon the employer who may not be obliged to assume
the onerous burden of granting bonuses or other benefits aside
from the employees basic salaries or wages. A bonus, however,
becomes a demandable or enforceable obligation when it is made
part of the wage or salary or compensation of the employee. The
rule is settled that any benefit and supplement being enjoyed by
the employees cannot be reduced, diminished, discontinued or
eliminated by the employer. The principle of non-diminution of
benefits is founded on the constitutional mandate to protect the
rights of workers and to promote their welfare and to afford labor
full protection.

4. Change of working hours

Manila Jockey Club Employees Labor Union, G.R. No.


167760, March 7, 2007

125
Section 1, Article IV, of the CBA does not guarantee overtime
work for all the employees but merely provides that "all work
performed in excess of seven (7) hours work schedule and on
days not included within the work week shall be considered
overtime and paid as such."

Respondent was not obliged to allow all its employees to render


overtime work everyday for the whole year, but only those
employees whose services were needed after their regular
working hours and only upon the instructions of management.
The overtime pay was not given to each employee consistently,
deliberately and unconditionally, but as a compensation for
additional services rendered. Thus, overtime pay does not fall
within the definition of benefits under Article 100 of the Labor
Code on prohibition against elimination or diminution of benefits.

5. Marital Discrimination

Duncan Association of Detailman-PTGWO and Pedro


Tecson v. GlaxoWellcome Philippines, Inc., G.R. No.
162994, September 17, 2004

126
It is the settled principle that the commands of the equal
protection clause are addressed only to the state or those acting
under color of its authority. Corollarily, it has been held in a long
array of US Supreme Court decisions that the equal protection
clause erects to shield against merely privately conduct, however,
discriminatory or wrongful. The company actually enforced the
policy after repeated requests to the employee to comply with the
policy. Indeed the application of the policy was made in an
impartial and even-handed manner, with due regard for the lot of
the employee.

Philippine Telegraph and Telephone Company v. NLRC,


G.R. No. 118978, May 23, 1997

The Constitution provides a gamut of protective provisions due to


the disparity in rights between men and women in almost all
phases of social and political life. Article II Section 14 of the 1987
Constitution states that The State recognizes the role of women
in nation-building, and shall ensure the fundamental equality
before the law of women and men. Corollary to this is Article
XIII Section 3 which states that The State shall afford full
protection to labor, local and overseas, organized and

127
unorganized, and promote full employment and equality of
employment opportunities for all and Article XIII Section 14
which states that The State shall protect working women by
providing safe and healthful working conditions, taking into
account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to
realize their full potential in the service of the nation. Since the
Labor Code was enacted on May 1, 1974, corrective labor and
social laws on gender inequality have emerged with more
frequency in the years. Two of these are Republic Act No. 6727
which explicitly prohibits discrimination against women with
respect to terms and conditions of employment, promotion, and
training opportunities; and Republic Act No. 7192 or the Women
in Development and Nation Building Act which, among others,
affords women equal opportunities with men to act and to enter
into contracts. In the Labor Code, Article 136 explicitly prohibits
discrimination merely by reason of the marriage of a female
employee. The private respondents act of concealing the true
nature of her status from PT&T could not be properly
characterized as willful or in bad faith as she was moved to act
the way she did mainly because she wanted to retain a
permanent job in a stable company. In other words, she was

128
practically forced by that very same illegal company policy into
misrepresenting her civil status for fear of being disqualified from
work

Star Paper Corporation vs. Simbol, G.R. No, 164774, April


12, 2006

The case at bar involves Art. 136 of the Labor Code which
provides, it shall be unlawful for an employer to require
as a condition of employment or continuation of
employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that upon
getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee
merely by reason of her marriage. The company policy of
Star Paper, to be upheld, must clearly establish the
requirement of reasonableness. In the case at bar, there
was no reasonable business necessity. Petitioners failed
to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of
the Repacking Section could be detrimental to its

129
business operations. The questioned policy may not
facially violate Art. 136 of the Labor Code but it creates a
disproportionate effect and under the disparate impact
theory, the only way it could pass judicial scrutiny is a
showing that it is reasonable despite the discriminatory,
albeit disproportionate effect. Lastly, the absence of a
statute to expressly prohibiting marital discrimination in
our jurisdiction cannot benefit the petitioners.

6. Post-employment ban

Ferrazzinni vs. Gsell, G.R. No. L-10712, August 10, 1916,


En Banc

The general tendency, we believe, of modern authority, is to


make the test whether the restraint is reasonably necessary for
the protection of the contracting parties. If the contract is
reasonably necessary to protect the interest of the parties, it will
be upheld.

Hence, the policy of the law requires that the freedom of persons
to enter into contracts shall not be lightly interfered with, but if a
130
contract be not founded upon a legal consideration (causa) or if it
conflicts with the morals of the times or contravenes some
established interest of society, the courts will not aid in its
enforcement.

Passing over the question whether "consideration" of the


American law and the "causa" of the civil law are equivalent and
whether there was adequate or legal consideration or "causa" on
which the contract was founded, we will limit our further inquiry
to the determination of the question whether that part of the
contract under consideration is against public policy
(ordenpublico).

The contract under consideration, tested by the law, rules and


principles above set forth, is clearly one in undue or unreasonable
restraint of trade and therefore against public policy. It is limited
as to time and space but not as to trade. It is not necessary for
the protection of the defendant, as this is provided for in another
part of the clause. It would force the plaintiff to leave the
Philippine Islands in order to obtain a livelihood in case the
defendant declined to give him the written permission to work
elsewhere in this country.

131
Del Castillo vs. Richmond, G.R. No. L-21127, February 9,
1924, En Banc

The law concerning contracts which tend to restrain business or


trade has gone through a long series of changes from time to
time with the changing conditions of trade and commerce. With
trifling exceptions, said changes have been a continuous
development of a general rule. The early cases show plainly a
disposition to avoid and annul all contract which prohibited or
restrained any one from using a lawful trade "at any time or at
any place," as being against the benefit of the state. Later,
however, the rule became well established that if the restraint
was limited to "a certain time" and within "a certain place," such
contracts were valid and not "against the benefit of the state."
Later cases, and we think the rule is now well established, have
held that a contract in restraint of trade is valid providing there is
a limitation upon either time or place. A contract, however, which
restrains a man from entering into a business or trade without
either a limitation as to time or place, will be held invalid.

The public welfare of course must always be considered, and if it


be not involved and the restraint upon one party is not greater

132
than protection to the other requires, contracts like the one we
are discussing will be sustained. The general tendency, we
believe, of modern authority, is to make the test whether the
restraint is reasonably necessary for the protection of the
contracting parties. If the contract is reasonably necessary to
protect the interest of the parties, it will be upheld.

In that case we held that a contract by which an employee agrees


to refrain for a given lenght of time, after the expiration of the
term of his employment, from engaging in a business,
competitive with that of his employer, is not void as being in
restraint of trade if the restraint imposed is not greater than that
which is necessary to afford a reasonable protection. In all cases
like the present, the question is whether, under the particular
circumstances of the case and the nature of the particular
contract involved in it, the contract is, or is not, unreasonable. Of
course in establishing whether the contract is a reasonable or
unreasonable one, the nature of the business must also be
considered. What would be a reasonable restriction as to time
and place upon the manufacture of railway locomotive engines
might be a very unreasonable restriction when imposed upon the
employment of a day laborer.

133
Considering the nature of the business in which the defendant is
engaged, in relation with the limitation placed upon the plaintiff
both as to time and place, we are of the opinion, and so decide,
that such limitation is legal and reasonable and not contrary to
public policy.

Rivera vs. Solidbank Corporation, G.R. No. 163269, April


19, 2006

A post-retirement competitive employment restriction is designed


to protect the employer against competition by former employees
who may retire and obtain retirement or pension benefits and, at
the same time, engage in competitive employment.

Thus, in determining whether the contract is reasonable or not,


the trial court should consider the following factors: (a) whether
the covenant protects a legitimate business interest of the
employer; (b) whether the covenant creates an undue burden on
the employee; (c) whether the covenant is injurious to the public
welfare; (d) whether the time and territorial limitations contained
in the covenant are reasonable; and (e) whether the restraint is

134
reasonable from the standpoint of public policy.

7. Preventive Suspension

Gatbonton v. NLRC, G.R. No. 146779, January 23, 2006

Preventive suspension is a disciplinary measure for the protection


of the companys property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. The
employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his
co-workers.However, when it is determined that there is no
sufficient basis to justify an employees preventive suspension, the
latter is entitled to the payment of salaries during the time of
preventive suspension.

R.A. No. 7877 imposed the duty on educational or training


institutions to promulgate rules and regulations in consultation
with and jointly approved by the employees or students or
trainees, through their duly designated representatives,
prescribing the procedures for the investigation of sexual
harassment cases and the administrative sanctions therefor.
Petitioners preventive suspension was based on respondent MITs

135
Rules and Regulations for the Implemention of the Anti-Sexual
Harassment Act of 1995, or R.A. No. 7877. Rule II, Section 1 of
the MIT Rules and Regulations provides:

Section 1. Preventive Suspension of Accused in Sexual


Harassment Cases. Any member of the educational
community may be placed immediately under preventive
suspension during the pendency of the hearing of the
charges of grave sexual harassment against him if the
evidence of his guilt is strong and the school head is
morally convinced that the continued stay of the
accused during the period of investigation constitutes a
distraction to the normal operations of the institution or
poses a risk or danger to the life or property of the
other members of the educational community.

The Mapua Rules is one of those issuances that should be


published for its effectivity, since its purpose is to enforce and
implement R.A. No. 7877, which is a law of general application. In
fact, the Mapua Rules itself explicitly required publication of the
rules for its effectivity, as provided in Section 3, Rule IV
(Administrative Provisions), which states that [T]hese Rules and
Regulations to implement the Anti-Sexual Harassment Act of 1995

136
shall take effect fifteen (15) days after publication by the
Committee. Thus, at the time of the imposition of petitioners
preventive suspension on January 11, 1999, the Mapua Rules
were not yet legally effective, and therefore the suspension had
no legal basis.

Moreover, even assuming that the Mapua Rules are applicable,


the Court finds that there is no sufficient basis to justify his
preventive suspension. Under the Mapua Rules, an accused may
be placed under preventive suspension during pendency of the
hearing under any of the following circumstances:

(a) if the evidence of his guilt is strong and the school


head is morally convinced that the continued stay of the
accused during the period of investigation constitutes a
distraction to the normal operations of the institution; or

(b) the accused poses a risk or danger to the life or


property of the other members of the educational
community.

M. Termination of Employment

1)How to Reckon Six Months

137
CALS Poultry Supply Corporation vs. Roco, G.R. No. 150660, July
30, 2002

The 6-month probationary period is reckoned from the date of


appointment up to the same calendar date of the 6th month
following.

2)Reasonable Standards made known by the employer


to the employee at the time of engagement

Alcira vs. NLRC, G.R. No. 149859, June 9, 2004

Article 13 of the Civil Code provides that when the law speaks of
years, months, and days and nights, it shall be understood that
years are of 365 days, months of 30 days, days of 24 hours and
nights are from sunset to sunrise. Since, one month is composed
of 30 days, then, 6 months shall be understood to be composed
of 180 days. And the computation of the 6- month period is
reckoned from the date of appointment up to the same calendar
date of the 6th month following. Since, the number of days of a
particular month is irrelevant, petitioner was still a probationary

138
employee at the time of his dismissal. Wherefore, the petition is
dismissed.

Mitsubishi Motors Philippines Corporation vs. Chrysler Philippines


Labor Union, G. R. No. 148738, June 29, 2004

There is probationary employment where the employee upon his


engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment
based on reasonable standards made known to him at the time of
engagement. The probationary employment is intended to afford
the employer an opportunity to observe the fitness of a
probationary employee while at work, and to ascertain whether
he will become an efficient and productive employee. While the
employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent
employment, the probationer, on the other hand, seeks to prove
to the employer that he has the qualifications to meet the
reasonable standards for permanent employment. Thus, the word
probationary, as used to describe the period of employment,
implies the purpose of the term or period, not its length.

139
Alcira vs. NLRC, G.R. No. 149859, June 9, 2004

Article 13 of the Civil Code provides that when the law speaks of
years, months, and days and nights, it shall be understood that
years are of 365 days, months of 30 days, days of 24 hours and
nights are from sunset to sunrise. Since, one month is composed
of 30 days, then, 6 months shall be understood to be composed
of 180 days. And the computation of the 6- month period is
reckoned from the date of appointment up to the same calendar
date of the 6th month following. Since, the number of days of a
particular month is irrelevant, petitioner was still a probationary
employee at the time of his dismissal. Wherefore, the petition is
dismissed.

Aberdeen Court, Inc. v. Agustin, Jr., G.R. No. 149371, April 13,
2005

Constructive dismissal is defined as a quitting because continued


employment is rendered impossible, unreasonable or unlikely, as
an offer involving demotion in rank and a diminution in pay. As
140
there is no showing in the record of any circumstance to support
the proposition that the petitioner was constructively dismissed,
the private respondents correctly point out the flaw in the first
ground proffered by the petitioner in support of his petition. Be
that as it may, the petitioners erroneous choice of terminology
does not, to our mind, preclude a finding of illegal dismissal.
Alongside the private respondents contention that it was the
petitioner who unceremoniously quit his employment after being
confronted with his negligence, greater stock m[a]y be taken of
the petitioners immediate recourse for assistance from the
Department of Labor and his subsequent filing of his complaint.
The rule is settled that the immediate filing of a complaint for
illegal dismissal is inconsistent with abandonment and, in such
cases, the burden of proof to establish the validity of the
dismissal of an employee lies on the employer (Gonpu Services
Corporation vs. National Labor Relations Commission, 266 SCRA
657, 662). Rather than the employee who must prove its
invalidity, it is the employer who should prove the validity of a
dismissal. and failure to do so will result in a finding that the
dismissal was unfounded.

Dela Cruz vs. NLRC, G.R. No. 145417, December 11, 2003

141
We reiterate the well-established rule that findings of fact of the
Court of Appeals are conclusive on the parties and are not
generally reviewable by this Court when supported by substantial
evidence. The rationale is that this Court, not being a trier of
facts, relies in good part on the assessment and evaluation of
evidence by the lower courts. We thus subscribe to the following
findings of the Court of Appeals in affirming the NLRC decision,
that petitioners dismissal was for a just cause.

Cathay Pacific Airways, Limited vs. Marin, G.R. No. 148931,


September 12, 2006

It is settled that a probationary employee enjoys only a


temporary employment status, not a permanent status. In
general terms, he is terminable anytime as long as such
termination is made before the expiration of the six-month
probationary period. The employment of a probationary employee
may only be terminated either (1) for a just cause; or (2) when
the employee fails to qualify as a regular employee in accordance
with the reasonable standards made known to him by the
employer at the start of his employment. The power of the
employer to terminate an employee on probation is thus subject

142
to the following conditions: (1) it must be exercised in accordance
with the specific requirements of the contract; (2) the
dissatisfaction on the part of the employer must be real and in
good faith, not prejudicial so as to violate the contract or the law;
and (3) there must be no unlawful discrimination in the dismissal.
The burden of proving just or valid cause for dismissing an
employee rests on the employer.

3) When to end the probationary period

Espina, et. al., vs. CA, G.R. No. 164582, March 28, 2007

One of the rights accorded an employer is the right to close


an establishment or undertaking. Just as no law forces anyone to
go into business, no law can compel anybody to continue the
same. The right to close the operations of an establishment or
undertaking is explicitly recognized under the Labor Code as
one of the authorized causes in terminating employment of
workers, the only limitation being that the closure must not be for
the purpose of circumventing the provisions on terminations of
employment embodied in the Labor Code and may be justified on

143
grounds other than business losses but it cannot be an unbridled
prerogative to suit the whims of the employer.Under Article 283
of the Labor Code, three requirements are necessary for a valid
cessation of business operations, namely: (1) service of a written
notice to the employees and to the DOLE at least one (1) month
before the intended date thereof; (2) the cessation must be bona
fide in character; and(3) payment to the employees of
termination pay amounting to at least one half (1/2) month pay
for every year of service, or one (1) month pay, whichever is
higher. The ultimate test of the validity of closure or cessation of
establishment or undertaking is that it must be bona fide in
character. Burden of proof is upon the employer.

Servidad vs. NLRC, G.R. No. 128682, March 18, 1999

NLRC found that the contract in question is for a fixed term. The
said contract provides for two periods. The first period was for six
months terminable at the option of private respondent, while
the second period was also for six months but probationary in
character. In both cases, the private respondent did not specify
the criteria for the termination or retention of the services of

144
petitioner. It is violative of the right of the employee against
unwarranted dismissal. By the provisions of the very contract
itself, petitioner has become a regular employee of private
respondent.As to the private respondent statement that the one-
year period stipulated in subject contract was to enable petitioner
to acquire the skill necessary for the job. In effect, what
respondent employer theorized upon is that the one-year term of
employment is probationary. If the nature of the job did actually
necessitate at least one year for the employee to acquire the
requisite training and experience, the same could not be a valid
probationary employment as it falls short of the requirement of
Article 281[10] of the Labor Code. It was not brought to light that
the petitioner was duly informed at the start of his employment,
of the reasonable standards under which he could qualify as a
regular
employee.

c) Kinds of Employment

Bernardo, et. al., vs. NLRC, G.R. No. 122917, July 12, 1999

145
for Employment.No disabled person shall be denied access to
opportunities for suitable employment. A qualified disabled
employee shall be subject to the same terms and conditions of
employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able bodied
person.The fact that the employees were qualified disabled
persons necessarily removes the employment contracts from the
ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code, which provides:ART. 280. Regular
and Casual Employment. The provisions of written agreement
to the contrary notwithstanding and regardless of the oral
agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer, x xxThe primary standard,
therefore, of determining regular employment is the reasonable
connection between the particular activity performed by the
employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or
desirable in the usual business or trade of the employer. The
connection can be determined by considering the nature of the

146
work performed and its relation to the scheme of the particular
business or trade in its entirety. Also if the employee has been
performing the job for at least one year, even if the performance
is not continuous and merely intermittent, the law deems
repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to
the business. Hence, the employment is considered regular, but
only with respect to such activity, and while such activity exists.

Regular employment: by period of service

Paguio vs. NLRC, G.R. No. 147816, May 9, 2003

A "regular employment," whether it is one or not, is aptly gauged


from the concurrence, or the non-concurrence, of the following
factors a) the manner of selection and engagement of the
putative employee, b) the mode of payment of wages, c) the
presence or absence of the power of dismissal; and d) the
presence or absence of the power to control the conduct of the
putative employee or the power to control the employee with
respect to the means or methods by which his work is to be
accomplished.[ The "control test" assumes primacy in the overall

147
consideration. Under this test, an employment relation obtains
where work is performed or services are rendered under the
control and supervision of the party contracting for the service,
not only as to the result of the work but also as to the manner
and details of the performance desired.

2) Casual Employment

Conti vs. NLRC, G.R. No. 119253, April 10, 1997

This Court has consistently held that the twin requirements of


notice and hearing constitute essential elements of due process in
the dismissal of employees.As to the requirement of notice, it has
been held that the employer must furnish the worker with two
written notices before termination of employment can be legally
effected: (a) notice which apprises the employee of the particular
acts or omissions for which his dismissal is sought, and; (b)
subsequent notice which informs the employee of the employer's
decision to dismiss him.With regard to the requirement of a
hearing, this Court has held that the essence of due process is
simply an opportunity to be heard.and not that an actual hearing
should always and indispensably be held.

148
Fablea, et. al. vs. San Miguel Corporation, G.R. 150658, February
9, 2007

Fixedtermcontracts are validundercertainconditions,


suchtheseshould be 1) a natural and essentialundertaking b)
shouldnotcircumventsecurity of tenure and
c)insisteduponbytheemployee.

3) SeasonalEmployment

i) Requisitestoattain regular employment

Hacienda Fatima vs. Nacional Federation of Sugarcane Workers


Food and General Trade, G.R. No. 149440, January 20, 2003

Seasonal employee in nature is enough to perform work or


services and for the duration of one season they are considered a
regular employee .The primary standard of determining regular
employment relatively between the particular activity performed
by the employee in relation to the usual trade or business of the

149
employer. The test is whether the former is usually necessary or
desirable in the usual trade or business ofthe employer can be
determined by considering the nature of the work performed and
its relation to the scheme of the particular business or trade if the
employee has been performing the job for at least a year even if
the performance is not continuous and merely intermittent.
Hence, the employment is considered regular, but only with
respect to such activity and while such activity exists.

4) Project Employment

i) Indicators of project employment

Cocomangas Hotel Beach Resort vs. Visca, G.R. No. 167045,


August 29, 2008

A project employee is one whose employment has been fixed for


a specific project or undertaking, the completion or termination of
which has been determined at the time of the engagement of the
employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the
season. Before an employee hired on a per-project basis can be

150
dismissed, a report must be made to the nearest employment
office, of the termination of the services of the workers every
time completes a project, pursuant to Policy Instruction No. 20.

Equipment Technical Services vs. CA, G.R. No. 157680, October


8, 2008

Under Policy Instruction No. 20, Series of 1977, the report


must be made to the nearest public office employment. The
decision in Violeta v. NLRC is also apropos, particularly when it
held:

[The employer] should have filed as many reports


of termination as there were construction projects
actually finished if petitioners [employees] were indeed
project employees, considering that petitioners were
hired and again [hired] for various projects or phases
of work therein. Its failure to submit reports of
termination cannot but sufficiently convince us further
that petitioners are truly regular employees. Just as
important, the fact that petitioners had rendered more
than one year of service at the time of their dismissal

151
overturns private respondents allegations that
petitioners were hired for a specific or fixed
undertaking for a limited period of time. The Court can
allow that, in the instant case, private respondents
may have initially been hired for specific projects or
undertaking of petitioner ETS and, hence, may be
classified as project employees. Their repeated rehiring
to perform tasks necessary to the usual trade or
business of ETS changed the legal situation altogether,
for in the later instance, their continuous rehiring took
them out from the scope of workers coterminus with
specific projects and had made them regular
employees. We said as much in Phesco,Inc. v.
NLRC that where the employment of project
employees is extended long after the supposed project
had been finished, the employees are removed from
the scope of project employees and they shall be
considered regular employees.

152
Termination of Employment

G.R. No. 149074 August 10, 2006

ASIAN TERMINALS, INC. and RODOLFO G. CORVITE,


JR., Petitioners,
vs.
DANILO MARBELLA, RICARDO MELENDREZ and
FELOMINO MANGALUS, Respondents.

Doctrine:

The requisites of a valid dismissal for just causes are: (a) the
dismissal must be for one of the causes stated in Article 282 of
the Labor Code; and (b) the employee must have been accorded
due process, basic of which is the opportunity to be heard and
defend himself.

153
Settled is the rule that in an illegal dismissal case, the onus
probandi is on the employer to prove that the dismissal of an
employee is for a valid cause.

G.R. No. 110731 July 26, 1996

SHOPPERS GAIN SUPERMART, JERRY TAN, JACK TAN and


HEIRS OF JAMES TAN, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, SHOPPERS
GAIN SUPERMART EMPLOYEES UNION-UMP and
EDUARDO TARROSA, WARLITO AQUAIADAN, ARREO
JOSE, MAGDALENA ARZAGA, JEROGE BANAGA, CORA
BOLOTAOLO, ELMAR DOLUNTAR, FRANCISCO CABULADA,
EVELYN CENA, ROQUITO CENA, JUANITO DAYMON,
PABLITO ESMAS, ARTEMIO GERE, ROSALINDA GO,
ROLITO HANDIG, ALBERTO HOLANDA, AIDA JAVIER,
AVELINO JAVIER, JR., JESUS LEGASPI, MARIETA
LEGASPI, PEDRO LOPEZ, ELARIO LOS BANES, GEORGE
MANAL, EMMA MATIRA, RAFAEL MENODIADO, LUCILA
MONARES, MYRNA ORTIZ, TERESITA PANGAHIN,
ALFREDO PERLAS, JR., PACITA MANALO, ORLANDO SAN
154
JOSE, TERESITA SANTOS, TERESITA SENGSENG, and
NARCITO TUAZON; respondents.

Doctrine:

The law is very clear than an employer who seeks to terminate


the employment of its employee must notify him in writing at
least 30 days before the intended dismissal. The requisite of
notice is intended to inform the employee concerned of the
employer's intent to dismiss him and the reason for the proposed
dismissal.

G.R. No. 154308. March 10, 2005

BERNARDINO A. CAINGAT, Petitioners,


vs.
NATIONAL LABOR RELATIONS COMMISSION, STA. LUCIA
REALTY & DEVT., INC., R.S. MAINTENANCE & SERVICES,
INC., and R.S. NIGHT HAWK SECURITY &
INVESTIGATION AGENCY, INC., Respondents.

Doctrine:

155
The due process prescribed in Article 277 of the Labor Code are
mandatory. Two notices should be sent to the employee. The first
notice apprises the employee of the particular acts or omissions
for which his dismissal is sought; while the second informs the
employee of the employers decision to dismiss him. The latter
must come after the employee is given a reasonable period from
receipt of the first notice within which to answer the charge, and
ample opportunity to be heard and defend himself with the
assistance of his representative, if he so desires.

G.R. No. 80587 February 8, 1989

WENPHIL CORPORATION, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION AND
ROBERTO MALLARE, respondents.

Doctrine:

Under Section 1, Rule XIV of the Implementing Regulations of the


Labor Code, it is provided that "No worker shall be dismissed
except for just or authorized cause provided by law and after due
process." Sections 2, 5, 6, and 7 of the same rules require that
156
before an employer may dismiss an employee the latter must be
given a written notice stating the particular act or omission
constituting the grounds thereof; that the employee may answer
the allegations within a reasonable period; that the employer shall
afford him ample opportunity to be heard and to defend himself
with the assistance of his representative, if he so desires; and
that it is only then that the employer may dismiss the employee
by notifying him of the decision in writing stating clearly the
reasons therefor. Such dismissal is without prejudice to the right
of the employee to contest its validity in the Regional Branch of
the NLRC.

G.R. No. 124013 June 5, 1998

ROSARIO MANEJA, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION and MANILA
MIDTOWN HOTEL, respondents.

Doctrine:

Well-settled is the dictum that the twin requirements of notice


and hearing constitute the essential elements of due process in
the dismissal of employees. It is a cardinal rule in our jurisdiction

157
that the employer must furnish the employee with two written
notice before the termination of employment can be effected: (a)
the first apprises the employee of the particular acts or omissions
for which his dismissal is sought; and, (b) the second informs the
employee of the employer's decision to dismiss him. The
requirement of a hearing, on the other hand, is complied with as
long as there was an opportunity to be heard, and not necessarily
that an actual hearing was conducted.

G.R. No. 149349. March 11, 2005

GLAXO WELLCOME PHILIPPINES, INC. (now known as


GLAXO SMITHKLINE), Petitioners,
vs.
NAGKAKAISANG EMPLEYADO NG WELLCOME-DFA (NEW-
DFA), JOSSIE RODA DE GUZMAN, and NORMAN B.
CEREZO, Respondents.

Doctrine:

The first is the notice to apprise the employee of the particular


acts or omissions for which his dismissal is sought. This may be
loosely considered as the proper charge. The second is the notice
informing the employee of the employer's decision to dismiss him.

158
This decision, however, must come only after the employee is
given a reasonable period from receipt of the first notice within
which to answer the charge, and ample opportunity to be heard
and defend himself with the assistance of his representative, if he
so desires. The requirement of notice is not a mere technicality
but a requirement of due process to which every employee is
entitled."

Development of Doctrines
Wenphil Doctrine

G.R. No. 80587 February 8, 1989

WENPHIL CORPORATION, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION AND
ROBERTO MALLARE, respondents.

Doctrine:

Where the employer had a valid reason to dismiss an employee


but did not follow the due process requirement, the dismissal may
be upheld but the employer will be penalized to pay an indemnity
to the employee.

159
Serrano Doctrine

G.R. No. 117040 January 27, 2000

RUBEN SERRANO, petitioner,


vs.
NATIONAL LABOR RELATIONS COMMISSION and
ISETANN DEPARTMENT STORE, respondents.

Doctrine:

The rule on the extent of the sanction was changed. We held that
the violation by the employer of the notice requirement in
termination for just or authorized causes was not a denial of due
process that will nullify the termination. However, the dismissal is
ineffectual and the employer must pay full backwages from the
time of termination until it is judicially declared that the dismissal
was for a just or authorized cause.

Agabon Doctrine

G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners,


vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC),
160
RIVIERA HOME IMPROVEMENTS, INC. and VICENTE
ANGELES, respondents.

Doctrine:

Abandon the Serrano doctrine and to follow Wenphil by holding


that the dismissal was for just cause but imposing sanctions on
the employer. Such sanctions, however, must be stiffer than that
imposed in Wenphil.

Reinstatement to previous position or substantially


equivalent

G.R. No. 143219 November 28, 2006

ASIAN TERMINALS, INC., formerly MARINA PORT


SERVICES, INC., Petitioner,
vs.
RENATO P. VILLANUEVA, ROLANDO T. RODOLFO,
ALFREDO L. LANZA, and BRENDO S. POQUIZ,Respondents

Doctrine:

Reinstatement means restoration to the former position occupied


prior to dismissal or to substantially equivalent position.
Reinstatement does not mean promotion. Promotion is based
161
primarily on an employees performance during a certain period.
Just because their contemporaries are already occupying higher
positions does not automatically entitle respondents to similar
positions.

Separation pay as financial assistance

G.R. No. 80609 August 23, 1988

PHILIPPINE LONG DISTANCE TELEPHONE


COMPANY, petitioner,
vs.
THE NATIONAL LABOR RELATIONS COMMISSION and
MARILYN ABUCAY, respondents.

Doctrine:

Separation pay shall be allowed as a measure of social justice


only in those instances where the employee is validly dismissed
for causes other than serious misconduct or those reflecting on
his moral character. Where the reason for the valid dismissal is,
for example, habitual intoxication or an offense involving moral
turpitude, like theft or illicit sexual relations with a fellow worker,
the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever
162
other name it is called, on the ground of social justice.A contrary
rule would, as the petitioner correctly argues, have the effect, of
rewarding rather than punishing the erring employee for his
offense.

G.R. No. 187200 May 5, 2010

GOLDEN ACE BUILDERS and ARNOLD U. AZUL, Petitioners,


vs.
JOSE A. TALDE, Respondent.

Doctrine :

Under the doctrine of strained relations, the payment of


separation pay is considered an acceptable alternative to
reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from
what could be a highly oppressive work environment. On the
other hand, it releases the employer from the grossly unpalatable
obligation of maintaining in its employ a worker it could no longer
trust.

G.R. No. 186344 February 20, 2013

163
LEOPARD SECURITY AND INVESTIGATION
AGENCY, Petitioner,
vs.
TOMAS QUITOY, RAUL SABANG and DIEGO
MORALES, Respondents

Doctrine:

As a relief granted in lieu of reinstatement, however, it


consequently goes without saying that an award of separation
pay is inconsistent with a finding that there was no illegal
dismissal. Standing alone, the doctrine of strained relations will
not justify an award of separation pay, a relief granted in
instances where the common denominator is the fact that the
employee was dismissed by the employer.

Backwages and Separation pay

G.R. No. 187200 May 5, 2010

GOLDEN ACE BUILDERS and ARNOLD U. AZUL, Petitioners,


vs.
JOSE A. TALDE, Respondent.

Doctrine:

164
An illegally dismissed employee is entitled to two reliefs:
backwages and reinstatement. The two reliefs provided are
separate and distinct. In instances where reinstatement is no
longer feasible because of strained relations between the
employee and the employer, separation pay is granted. In effect,
an illegally dismissed employee is entitled to either reinstatement,
if viable, or separation pay if reinstatement is no longer viable,
and backwages.

Separation pay is granted where reinstatement is no longer


advisable because of strained relations between the employee
and the employer. Backwages represent compensation that
should have been earned but were not collected because of the
unjust dismissal. The basis for computing backwages is usually
the length of the employees service while that for separation pay
is the actual period when the employee was unlawfully prevented
from working.

Constructive Dismissal

G.R. No. 154503 February 29, 2008

UNIWIDE SALES WAREHOUSE CLUB and VIVIAN M.


APDUHAN, petitioners,

165
vs.
NATIONAL LABOR RELATIONS COMMISSION and AMALIA
P. KAWADA, respondents.

Doctrine:

Case law defines constructive dismissal as a cessation of work


because continued employment is rendered impossible,
unreasonable or unlikely; when there is a demotion in rank or
diminution in pay or both; or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to
the employee.

The test of constructive dismissal is whether a reasonable


person in the employee's position would have felt compelled to
give up his position under the circumstances. It is an act
amounting to dismissal but made to appear as if it were not. In
fact, the employee who is constructively dismissed may be
allowed to keep on coming to work. Constructive dismissal is
therefore a dismissal in disguise. The law recognizes and resolves
this situation in favor of employees in order to protect their rights
and interests from the coercive acts of the employer.

166
GLOBE TELECOM, INC., DELFIN LAZARO, JR., and
ROBERTGALANG, petitioners,

vs. JOAN FLORENDO-FLORES, respondent.

G.R. No. 150092. September 27, 2002

Doctrine:

Constructive dismissal exists where there is cessation of work


because "continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank
and a diminution in pay."

Termination of employment by employee


(Resignation)

G.R. No. 198261 October 16, 2013

HECHANOVA BUGAY VILCHEZ LAWYERS, HECHANOVA &


CO., INC., ATTY. EDITHA R. HECHANOVA,Petitioners,
vs.
ATTY. LENY O. MATORRE, Respondent.

Doctrine:

167
"once resignation is accepted, the employee no longer has any
right to the job. It, therefore, goes without saying that
resignation terminates the employer-employee relationship."

Bare allegations of constructive dismissal, when uncorroborated


by the evidence on record, cannot be given credence.

168
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