|||Valladolid v. Inciong, G.R. No.

L-52364, L-53349, [March 25, 1983], 206 PHIL 161-172

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF EMPLOYMENT;

LOSS OF CONFIDENCE, A VALID GROUND. — Loss of confidence is a valid ground for
dismissing an employee. Proof beyond reasonable doubt of the employee's misconduct is not
required, it being sufficient that there is 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.
(Reyes vs. Zamora, 90 SCRA 92 (19791).

2. ID.; ID.; ID.; PRIOR CLEARANCE REQUIRED; DISMISSAL, ILLEGAL IN CASE AT BAR. —
We find basis for the finding of the Regional Director that Valladolid was terminated without prior
clearance. JRM sent a memorandum to Valladolid on February 24, 1979 advising him of his
preventive suspension effective February 26, 1979 pending approval of the application for
clearance to dismiss him. The clearance application was filed on February 28, 1979. However,
even prior to that date, or on February 22, 1979, Valladolid had already filed a complaint for
Illegal Dismissal. This shows that Valladolid was indeed refused admittance on February 16,
1979 when he reported back to work, so that he was practically dismissed before he was
formally notified of his suspension leading to his dismissal, in violation of the requirement of
Section 3, Rule XIV, Book V, Rules and Regulations Implementing the Labor Code. And as
provided in Section 2 of the same Rule, any dismissal without prior clearance shall be
"conclusively presumed to be termination of employment without a just cause."

3. CONSTITUTIONAL LAW; PROCEDURAL DUE PROCESS; NOT VIOLATED IN SUMMARY

RESOLUTION OF APPLICATIONS FOR CLEARANCE. — J.R.M. cannot claim that it was
deprived due process considering that applications for clearance have to be summarily
investigated and a decision required to be rendered within ten (10) days from the filing of the
opposition (Section 8, Rule XIV, Book V, Rules and Regulations Implementing the Labor Code).
As this Court had occasion to hold there is no violation of due process here the Regional
Director merely required the submission of position papers and resolved the case summarily
thereafter (Cebu Institute of Technology vs. Minister of Labor, 113 SCRA 237 [1982]).

4. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF EMPLOYMENT;

ILLEGAL DISMISSAL; RIGHT TO REINSTATEMENT; BACKWAGES NOT RECOVERABLE
WHERE EMPLOYEE INCURRED UNAUTHORIZED ABSENCES. — J.R.M. admits that
Valladolid requested for leave for 3 days from December 30, 1978, and thereafter for 15 days,
but denies that he notified the company of his absences subsequent to this. The Regional
Director ruled that the absences of Valladolid were unauthorized but did not amount to gross
neglect of duty or abandonment of work which requires deliberate refusal to resume
employment or a clear showing in terms of specific circumstances that the worker does not
intend to report for work. We agree. But as Valladolid had been AWOL, no error was committed
by respondent Regional Director in ordering his reinstatement without backwages (Marinduque
Mining and Industrial Corp. vs. Minister of Labor and Employment, 112 SCRA 280 [1982]).
(San Miguel Corp. v. National Labor Relations Commission, G.R. No. L-60067, [August 19,
1982], 201 PHIL 477-480)

SYNOPSIS

In a decision, the Labor Arbiter ordered petitioner San Miguel Corporation to immediately
reinstate respondent Rodolfo Calayag to his former position without loss of seniority rights and
other benefits but without back-wages. Calayag appealed from said decision for the purpose of
getting backwages but he did not apprise petitioner of this appeal. Petitioner only learned of the
appeal when it was served with a copy of the decision of the National Labor Relations
Commission (NLRC) granting Calayag back-wages. Petitioners thus filed the instant petition
praying for the annulment of the NLRC's decisions and the dismissal of Calayag's complaint for
alleged illegal termination of employment.

The Supreme Court set aside the decision of the NLRC and affirmed that of the Labor Arbiter
holding that the NLRC erred in resolving the appeal without hearing petitioner, who was entitled
to present its side of the case.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR LAWS; APPEAL TO THE NATIONAL

LABOR RELATIONS COMMISSIONS; PROCEDURE. — Section 7 Rule XIII (NLRC
Procedures) of the Rules and Regulations implementing the Labor Code provides that the
appellant should furnish the appellee with a copy of his appeal. Undoubtedly, that rule was
ordained in the interest of fair play and to preclude the NLRC from making an ex-parte
resolution of the appeal which it did in this case.

2. ID.; ID.; TERMINATION OF EMPLOYMENT; COMPUTATION OF ABSENCES WITHOUT

LEAVE IN CASE AT BAR. — The Labor Arbiter found that Calayag was absent without leave
for ten days. It is a rule of the company that for nine absences without leave within a calendar
year an employee may be dismissed. Notwithstanding that role, the Labor Arbiter ordered
Calayag's reinstatement but without backwages. The NLRC directed the payment of backwages
in addition to reinstatement. As Calayag was receiving P1,040 a month, his backwages as of
February, 1982 amounted already to P29,120. Both the Labor Arbiter and the NLRC opined that
nine-absences rule means that the prior absences, which had already been penalized with
suspension without pay, should be excluded from the computation of the nine absences
required for dismissal because their inclusion would supposedly place the employee "twice in
jeopardy of punishment for the same offense." That opinion is not correct. The rule prescribes
graduated or cumulative penalties (culminating in dismissal) for each day of absence without
leave. It is immaterial that the absences included in the nine absences required for dismissal
had already been penalized with suspension. They are included in the computation of the nine
absences.

3. ID.; ID.; ID.; REINSTATEMENT WITHOUT BACKWAGES HELD EQUITABLE IN CASE AT

BAR. — The Labor Arbiter chose to reinstate Calayag in spite of the fact that he could be
dismissed. He did so presumably because dismissal would be a very drastic penalty under the
facts of this case. (See San Miguel Corporation vs. Secretary of Labor, L-39195, May 16, 1975,
64 SCRA 56, 62.) On the other hand, to grant Calayag backwages in addition to reinstatement
is not a just and equitable solution of the controversy.

||| (Manila Press, Inc. v. Inciong, G.R. No. L-52709, [June 24, 1983], 207 PHIL 747-750)

SYLLABUS

1. LABOR LAWS; EMPLOYMENT; TERMINATION INDUCED BY MISCONDUCT ON THE

PART OF EMPLOYEE. — We hold that as to Cajucom the dismissal was proper. The labor
agencies acted with, grave abuse of discretion amounting to lack or jurisdiction in ordering his
reinstatement. He committed perjury to favor a fellow employee. He is guilty of misconduct.

2. ID.; ID.; THOUGH NON-CONVICTION IN A CRIMINAL CASE MAY STILL WARRANT

DISMISSAL OF AN EMPLOYEE, RE-INSTATEMENT GRANTED UNDER PLEA OF
COMPASSIONATE JUSTICE. — With respect to the case of Roldan, who was convicted by the
lower court of perjury and ultimately acquitted by the Court of Appeals on the ground of
reasonable doubt in its 1980 decision, Roldan pleads for compassionate justice. It is true that
conviction of an employee in a criminal case is not indispensable to warrant his dismissal by his
employer (National Labor Union Inc. vs. Standard Vacuum Oil Company, 73 Phil. 279; Nevans
vs. Court of Industrial Relations, L-21510, June 29, 1968, 23 SCRA 1321, 1328), nevertheless,
considering Roldan's plea for compassion, we think that the ends of justice would be served by
allowing his reinstatement without backwages.

(East Asiatic Co., Ltd. v. Court of Industrial Relations, G.R. No. L-29068, [August 31, 1971],
148-B PHIL 401-430)

UNFAIR LABOR PRACTICE; ILLEGAL DISMISSAL; REINSTATEMENT ORDER; MUST BE

IMMEDIATELY IMPLEMENTED. — Since the judgment was already final and executory, it is
implicit in the law that what the court should have done as the initial step was to order
immediate implementation of the ordered reinstatement, without prejudice to resolving the
question of backwages afterwards. In that manner, all of these questions vexing the parties and
the court could have been avoided or at least minimized. With immediate reinstatement upon
the court's finding of just and legal ground therefore no injury is caused to either employer or
employee, for the former gets the benefit of the latter's work and the latter receives due
compensation therefore. The obvious advantages of this arrangement in terms of industrial
peace and economic and social progress, and to the larger interests of the nation as a whole,
are incalculable.|||

BACKWAGES; MEANING. — As to the exact amount of her backwages, it is unquestionable

that under the decision being executed, respondent, as already stated, is entitled to "all the
rights and privileges acquired and due her, including seniority, and such other terms and
conditions of employment existing at the time or her lay-off." In Philippine Air Lines, Inc. vs.
PALEA, et al., G.R. No. L-21120, Feb. 28, 1967, involving an almost identically worded
judgment as in this case, We held such judgment to mean "backwages for the lay-off period,
coupled with the 'seniority or other rights and privileges' attached to the status of the employees
when they were dismissed, (or) (T)o put it differently, said employees (should be treated ) as if
they had not been absent from work and had been uninterruptedly working during the lay-off
period."|||

(Manila Electric Co. v. National Labor Relations Commission, G.R. No. 78763, [July 12, 1989],
256 PHIL 735-742)

TERMINATION OF EMPLOYMENT; REINSTATEMENT OF RESPONDENT PROPER BUT

WITHOUT AWARD OF BACKWAGES; CASE AT BAR. — Reinstatement of respondent Signo
is proper in the instant case, but without the award of backwages, considering the good faith of
the employer in dismissing the respondent.|||

LABOR AND SOCIAL LEGISLATION; LABOR CODE; ILLEGAL DISMISSAL; WHERE

ABANDONMENT OF WORK NOT ESTABLISHED. — In termination cases, the burden of
proving just and valid cause for dismissing an employee from his employment rests upon the
employer, and the latter's failure to do so would result in a finding that the dismissal is
unjustified. Abandonment as a just and valid ground for termination means the deliberate,
unjustified refusal of the employee to resume his employment, and the burden of proof is on the
employer to show a clear and deliberate intent on the part of the employee to discontinue
employment without any intention of returning. The petitioner failed to discharge this burden.
Moreover, if the private respondent was dismissed because of his abandonment of work, the
petitioner should have given him a written notice of termination in accordance with Section 2,
Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code. But, the petitioner failed
to present as evidence such notice despite its policy to record and file every transaction
including notices of termination.

||| (Reno Foods, Inc. v. National Labor Relations Commission, G.R. No. 116462, [October 18,
1995], 319 PHIL 500-510)

ACTION FOR REINSTATEMENT; PRESCRIPTIVE PERIOD IS FOUR YEARS; LACHES AND

ESTOPPEL, NOT PROPER WHERE COMPLAINT FILED WITHIN SAID PERIOD. — An action
for reinstatement by reason of illegal dismissal is one based on an injury to the complainant's
rights which should be brought within four years from the time of his dismissal pursuant to
Article 1146 of the Civil Code.The private respondent's complaint for illegal dismissal filed two
years and five months after he was dismissed from his employment was still well within the
prescriptive period. Laches cannot, therefore, be invoked yet. Besides, for lack of proof that the
private respondent did not intend to return to work, the two-year period cannot be a gauge of
such intention, much less is it indicative of laches. Finally, in labor cases laches may be applied
only upon the most convincing evidence of deliberate inaction, for the rights of laborers are
protected under the social justice provisions of the Constitution and under the Civil Code. The
relations between capital and labor are not merely contractual; they are so impressed with
public interest that labor contracts must yield to the common good. Neither is there any basis for
the claim of estoppel.

BACKWAGES; CLAIM NO LONGER APPROPRIATE FOR FAILURE TO TAKE PROPER

ACTION TO RECOVER THE SAME. — The private respondent's prayer for back wages cannot
be granted by this Court. While he had appealed the Labor Arbiter's decision insofar as it denied
him an award of back wages, he failed to file a motion for reconsideration when the NLRC
affirmed the said decision. Neither did he file with this Court a petition for certiorari questioning
the refusal of the Labor Arbiter and the NLRC to adjudge back wages and other emoluments in
his favor. Thus, the said decision has already become final as far as he is concerned.

||| (Associated Labor Unions v. National Labor Relations Commission, G.R. No. 120450,
[February 10, 1999], 362 PHIL 322-331)

SYNOPSIS

Petitioner Renato Felizardo was employed at respondent company as jet printer operator. He
was dismissed from employment for dishonesty and theft of company property for bringing out a
pair of boots, one (1) piece of aluminum container and fifteen (15) pieces of hamburger patties.
He and petitioner Union filed a complaint for illegal dismissal, unfair labor practice and non-
payment of 13th month pay against respondent company. The Labor Arbiter found that with the
exception of the pair of boots, the articles which petitioner took were mere scrap, which were of
no value to the respondent company. The Labor Arbiter ruled that dismissal was too harsh a
penalty to be imposed on a first-time offender and that petitioner's unemployment for about
eleven (11) months was sufficient penalty for what he had done. Hence, the Labor Arbiter
ordered the reinstatement of petitioner without backwages. On appeal, the National Labor
Relations Commission reversed the decision of the Labor Arbiter and dismissed the complaint.
Hence, this petition. cTaDHS

The Supreme Court agreed with the Labor Arbiter that petitioner's dismissal would not be
proportionate to the gravity of the offense he had committed considering the value of the articles
he pilfered, and the fact that he had no previous derogatory record during his two (2) years of
employment. However, the Labor Arbiter was mistaken in regarding the articles taken to be
mere scraps and hence without value to the respondent company. They were of some value but
not enough to warrant dismissal. Moreover, it should also be taken into account that petitioner is
not a managerial or confidential employee in whom greater trust is placed by management and
from whom greater fidelity to duty is correspondingly expected. Hence, the Court held that
dismissal as a measure to protect the interests of respondent company is unwarranted.
Suspension would have sufficed. However, the Court was of the opinion that petitioner had
already served a reasonable period of suspension commensurate to the gravity of his offense.
Thus, it considered appropriate the Labor Arbiter's order of reinstatement of petitioner without
backwages.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; TERMINATION OF

EMPLOYMENT; PENALTY OF DISMISSAL NOT PROPORTIONATE TO THE GRAVITY OF
OFFENSE COMMITTED BY PETITIONER IN CASE AT BAR; REASONS THEREFOR. — We
agree with the Labor Arbiter that dismissal would not be proportionate to the gravity of the
offense committed by petitioner considering the value of the articles he pilfered and the fact that
he had no previous derogatory record during his two (2) years of employment in the company.
The Labor Arbiter is certainly mistaken in regarding the articles taken to be mere scraps and
hence without value to the company. They were of some value but not enough to warrant
dismissal. Moreover, it should also be taken into account that petitioner is not a managerial or
confidential employee in whom greater trust is placed by management and from whom greater
fidelity to duty is correspondingly expected. It is easy to see why an unfaithful employee who is
holding a position of trust and confidence in a company poses a greater danger to its security
than a mere clerk or machine operator like petitioner. CSIDEc

2. ID.; ID.; ID.; VIOLATIONS BY NON-CONFIDENTIAL EMPLOYEES OF COMPANY RULES

AND REGULATIONS CONSIDERED MINOR AND DO NOT DESERVE THE PENALTY OF
DISMISSAL; RATIONALE. — There is another reason why violations by non-confidential
employees of company rules and regulations such as that involved in this case are considered
minor. Such employees are generally mere wage earners whose dismissal from employment
can have severe financial consequences on their families especially at a time like the present
when unemployment is quite high. Consequently, whatever missteps may have been committed
by them ought not to be visited with a consequence so severe as dismissal.

3. ID.; ID.; ID.; PENALTY OF SUSPENSION CONSIDERED SUFFICIENT IN CASE AT BAR;

ORDER OF REINSTATEMENT WITHOUT BACKWAGES, CONSIDERED APPROPRIATE. —
Dismissal as a measure to protect the interests of respondent company is unwarranted under
the facts of this case. Suspension would have sufficed. Without deciding for how long the
suspension should be in cases such as this, considering that petitioner has been prevented
from working in respondent company since September 13, 1993, we hold that, for all purposes,
he has served a reasonable period of suspension commensurate to the gravity of his offense.
Consequently, the Labor Arbiter's order of reinstatement of petitioner without backwages may
be considered appropriate.

(Firestone Tire and Rubber Co. of the Phils. v. Lariosa, G.R. No. L-70479, [February 27, 1987],
232 PHIL 201-207)

LABOR AND SOCIAL LEGISLATIONS; LABOR LAW; PERIOD TO APPEAL DECISION OF

THE LABOR ARBITER TO THE NATIONAL LABOR RELATIONS COMMISSION; TEN
"CALENDAR" DAYS; PRINCIPALLY INTENDED MORE FOR EMPLOYEES' BENEFIT — We
shall deal first with the timeliness of the appeal. It is admitted that Lariosa filed his appeal on
June 7, 1984 or after the lapse of fourteen days from notice of the decision of the Labor Arbiter.
Article 223 of the Labor Code clearly provides for a reglementary period of ten days within which
to appeal s decision of the Labor Arbiter to the NLRC. The ten-day period has been interpreted
by this Court in the case of Vir-jen Shipping and Marine Services, Inc. vs. NLRC, G.R. No.
58011-12, July 20, 1982, 115 SCRA 347, 361, to mean ten "calendar" days and not ten
"working" days. However, the "Notice of Decision" which Lariosa's lawyer received together with
a copy of the arbiter's decision advised them that an appeal could be taken to the NLRC within
ten "working" days from receipt of the said decision. Mindful of the fact that Lariosa's counsel
must have been misled by the implementing rules of the labor commission and considering that
the shortened period for appeal is principally intended more for the employees' benefit, rather
than that of the employer. We are inclined to overlook this particular procedural lapse and to
proceed with the resolution of the instant case.

2. ID.; ID.; TERMINATION OF EMPLOYMENT; LOSS OF TRUST AND CONFIDENCE;

THEFT, VALID GROUND. — A review of the record shows that Lariosa was indubitably
involved in the attempted theft of the flannel swabs. During the investigation called by the
company's industrial relations manager Ms. Villavicencio on July 28, 1983, or one day after the
incident. Security Guards Liso and Olvez contradicted Lariosa's bare claim that he had no
intention to bring home the swabs and that he had simply overlooked that he had earlier placed
them inside his bag after they were given to him by his shift supervisor while he was busy at
work. Guard Olvez stated that when he confronted Lariosa with the swabs, the latter replied that
they were for "home use". And when he requested Lariosa to stay behind while he reported the
matter to the authorities, Lariosa refused and hurriedly left the premises and boarded a passing
jeepney. There is no gainsaying that theft committed by an employee constitutes a valid reason
for his dismissal by the employer. Although as a rule this Court leans over backwards to help
workers and employees continue with their employment or to mitigate the penalties imposed on
them, acts of dishonesty in the handling of company property are a different matter.

3. ID.; ID.; ID.; ID.; INVESTIGATION OF THEFT INCIDENT PRIOR TO DISMISSAL; DUE
PROCESS PROPERLY OBSERVED IN CASE AT BAR. — From the records, it is likewise clear
that Firestone did not act arbitrarily in terminating Lariosa's services. On the contrary, there are
transcripts to prove that an investigation of the incident was promptly conducted in the presence
of the employee concerned, the union president and the security guards who witnessed the
attempted asportation. Records also belie the allegation that Lariosa was shown his walking
papers on the very day of the incident. The letter of Ms. Villavicencio to Lariosa dated August 1,
1983 informing the latter of his dismissal effective August 2, 1983 conclusively shows that he
was discharged only on August 2, 1983, after an investigation was held to ventilate the truth
about the July 27 incident. Thus, we cannot agree with the NLRC's conclusion that even if
Firestone had found substantial proof of Lariosa's misconduct, it did not observe the statutory
requirements of due process.

4. ID.; ID.; ID.; ID.; AUTHORITY TO DISMISS EMPLOYEE BASED ON SUBSTANTIATED

LOSS OF TRUST SHOULD NOT BE DENIED TO EMPLOYER. — Thus, under Article 283 of
the Labor Code, an employer may terminate an employment for "serious misconduct" or for
"Fraud or willful breach of the employee of the trust reposed in him by his employer or
representative." If there is sufficient evidence that an employee has been guilty of a breach of
trust or that his employer has ample reasons to distrust him, the labor tribunal cannot justly deny
to the employer the authority to dismiss such an employee.

5. ID.; ID.; ID.; EMPLOYEE DISMISSED FOR LOSS OF TRUST AND CONFIDENCE NOT
ENTITLED TO BACKWAGES; PAYMENT OF SEPARATION PAY ALLOWED. — The
employer's obligation to give him workers just compensation and treatment carries with it the
corollary right to expect from the workers adequate work, diligence and good conduct. In view of
the foregoing, We rule that Firestone had valid grounds to dispense with the services of Lariosa
and that the NLRC acted with grave abuse of discretion in ordering his reinstatement. However,
considering that Lariosa had worked with the company for eleven years with no known previous
bad record, the ends of social and compassionate justice would be served if he is paid full
separation pay but not reinstatement without backwages as decreed by the NLRC.

|||

||| (People's Industrial and Commercial Employees and Workers Organization v. People's
Industrial and Commercial Corp., G.R. No. L-37687, [March 15, 1982], 198 PHIL 166-183)
SYNOPSIS

Individual Petitioners, employees of respondent People's Industrial and Commercial Corporation

(PINCOCO) and members of the Federation of Tenants and Laborers Organization, FTLO, with
Pagayatan as President, disaffiliated themselves together with 51 employees from the mother
federation and certified that they formed a new union called People's Industrial and Commercial
Employees and Workers Organization (PICEWO) which they have affiliated with the Federation
of Free Workers. Then, Pagayatan as Chapter President of FTLO notified PINCOCO in writing
of the union's desire to terminate their working agreement and as President of PICEWO sent
PINCOCO a set of proposals for a collective bargaining agreement to which no reply was made.
Individual petitioners were expelled by FTLO for disloyalty and were dismissed by PINCOCO
from their employment. On the belief that respondent company refused to bargain collectively
with PICEWO, the latter struck. The next day a new collective bargaining agreement was signed
by respondent company and the FTLO. Three separate cases filed by both FTLO against
individual petitioners and by PICEWO against PINCOCO and FTLO for unfair labor practices
were dismissed by respondent Court of Industrial Relations on the findings of its Hearing
Examiner that no unfair labor practice was committed.

On review by certiorari, the Supreme Court held that petitioners do not merit dismissal as the
act of disaffiliation is not disloyalty to the union. Neither is the strike illegal where the union
believes that respondent company committed unfair labor practices and the circumstances
warranted such belief, although later such allegations were proven to be untrue.

Decision appealed from, set aside.

SYLLABUS

1. REMEDIAL LAW; PLEADINGS AND PRACTICE; PERIOD FOR FILING; TECHNICALITIES

OF PROCEDURE SHOULD BE DISREGARDED TO PROTECT SUBSTANTIAL RIGHTS. —
Where the last day for filing the motion for reconsideration was April 9, 1973 which was a
holiday (BATAAN DAY), and the last day for filing the arguments in support of the motion for
reconsideration, ten days after, was April 19, 1973, also a holiday (MAUNDY THURSDAY) and
petitioners have filed their pleadings on the next respective business days, that is April 10, 1973
for the motion for reconsideration and April 23, for the arguments in support thereof (April 20 to
22 not being business days), the respondent court erred in holding that the Motion for
Reconsiderations and the Memorandum in support of the Motion for Reconsideration were filed
out of time. It is the policy of the law to disregard technicalities in procedure so as not to deprive
the litigant's pursuit of his substantial rights under the Rules.

2. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; COMPUTATION OF PERIOD. —

Under Article 13, last paragraph. of the Civil Code in computing the period. the first day shall be
excluded, and the last day included.

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; UNFAIR LABOR PRACTICE;

DISAFFILIATION FROM THE MOTHER FEDERATION; NOT DISLOYALTY IN THE ABSENCE
OF PROHIBITION IN THE UNION'S CONSTITUTION. BY-LAWS AND CHARTER; CASE AT
BAR.— The right of the local members to withdraw from the federation and to form a new local
depends upon the provisions of the union's constitution, by-laws and charter. In the absence of
enforceable provisions in the federation's constitution preventing disaffiliation of a local union, a
local may sever its relationship with its parent. In the case at bar, there is nothing shown in the
records nor is it claimed by respondent federation that the local union was expressly forbidden
to disaffiliate from the federation. Fifty-one out of sixty employees is equivalent to eighty five
percent (85%) of the total working Force. This is not a case where one or two members of the
old union decided to organize another union in order to topple down the former, but it is a case
where majority of the union members decided to reorganize the union and to disaffiliate from the
mother Federation.

4. ID.; ID.; ID.; ID.; ID.; FORMATION OF NEW UNION IS THE VERY ESSENCE OF SELF-
ORGANIZATION. — The federation and the union are two different entities and it was the
federation which actively initiated the dismissal of the individual petitioners. A local union does
not owe its existence to the federation to which it is affiliated. It is a separate and distinct
voluntary association owing its creation and continued existence to the will of its members. The
very essence of self-organization is for the workers to form a group for the effective
enhancement and protection of their common interests.

5. ID.; ID.; ID.; STRIKE; WHEN IT MAY BE CONSIDERED LEGAL.— A strike may be
considered legal when the union believed that the respondent company committed unfair labor
acts and the circumstances warranted such belief in good faith although subsequently such
allegation of unfair labor practices are found out as not true.

6. ID.; ID.; ID.; ID.; ID.; RIGHTS OF THE STRIKING MEMBERS, UNDER THE FERRER
RULING AND UNDER THE PEPITO RULING; CASE AT BAR. — Where the strike of the union
was in response to what it was warranted in believing in good faith to be unfair labor practice on
the part of the management, said strike following the Ferrer ruling (Ferrer, et al. vs. CIR, et al.,
L-242678, May 31,1966, 17 SCRA 532) did not result in the termination of the striking members'
status as employees and therefore, they are still entitled to reinstatement without backwages.
The Ferrer ruling was also upheld in Shell Oil Workers Union vs. Shell Company of the Phil. Ltd.
(L-28607, May 31, 1971, 39 SCRA 276). In the case of Pepito vs. Secretary of Labor, L-49418,
Feb. 29, 1980, the petitioner therein was separated for having been implicated in a pilferage
case by a co-employee but was later absolved from a charge, the Supreme Court thru Chief
Justice Fernando ruled that the cause for His dismissal was proved non-existent or false and
thus ordered his reinstatement with three years backwages, without deduction and qualification.
In the case at bar, following the Pepito ruling the Supreme Court held that petitioners are
entitled not only to reinstatement but also to three years backwages without deduction and
qualification. This is justified and proper since the strike was proved to be not illegal but was
induced in the honest belief that management had committed unfair labor practices and,
therefore, the cause of their dismissal from employment was non-existent.

7. CONSTITUTIONAL LAW; PROTECTION OF LABOR PROVISIONS; ASSURES RIGHTS OF

WORKERS TO SELF-ORGANIZATION. COLLECTIVE BARGAINING AND SECURITY OF
TENURE; CIRCUMSTANCES IN CASE AT BAR DESERVING WORKERS PROTECTION. — It
has been twelve years since petitioners were dismissed from their employment and in their
destitute and deplorable condition, to them the benign provisions of the New Constitution for the
protection of labor, assuring the rights of workers to self-organizaton, collective bargaining and
security of tenure would be useless and meaningless. Labor, being the weaker in economic
power and resources than capital, deserve protection that is actually substantial and material.
||| (Philippine Long Distance Telephone Co. v. National Labor Relations Commission, G.R. No.
53552, [October 18, 1988], 248 PHIL 655-661)

SYLLABUS

1.LABOR AND SOCIAL LEGISLATION; EMPLOYER-EMPLOYEE RELATIONSHIP; THEFT OF

COMPANY PROPERTY VALID CAUSE FOR DISMISSAL OF EMPLOYEE; REASON. — The
Court finds that petitioner had valid ground to terminate private respondent and NLRC acted
with grave abuse of discretion in ordering his reinstatement. Theft of company property is a
recognized just and valid cause for dismissing an employee as falling under the Article 282 of
the Labor Code. The Supreme Court set aside the NLRC decision ordering the worker's
reinstatement without backwages, stating that: . . . There is no gainsaying that theft committed
by an employee constitutes a valid reason for his dismissal by the employer. Although as a rule
this Court leans over backwards to help workers and employees continue with their employment
or to mitigate the penalties imposed on them, acts of dishonesty in the handling of company
property are a different matter. [at p. 192.] (Emphasis supplied.) . . . The reason for this rule is to
protect both labor and management. Labor, because: . . . The dismissal of a dishonest
employee is as much in the interests of labor as it is of management. The labor force in any
company is protected and the workers' security of tenure strengthened when pilferage of
equipment, goods, and products which endangers the viability of an employer and, therefore,
the workers' continued employment is minimized or eliminated and consequently labor-
management relations based on mutual trust and confidence are promoted. (International
Hardwood and Veneer Co. of the Phils v. Leogardo, G.R. No. 57429, October 28, 1982, 117
SCRA 967, 973-974.] . . . And management, because as this Court had consistently held: . . .
An employer cannot legally be compelled to continue with the employment of a person who
admittedly was guilty of misfeasance or malfeasance towards his employer, and whose
continuance in the service of the latter is patently inimical to his interests. The law, in protecting
the rights of the laborer, authorizes neither oppression nor self-destruction of the employer . . .
[Manila Trading and Supply Co. v. Zulueta, 69 Phil. 485, 486-487 (1940).]

2.ID.; ID.; ID.; PENALTY OF DISMISSAL OF EMPLOYEE ON FIRST OFFENSE JUSTIFIED. —

In the case at bar private respondent is admittedly guilty not only of violating the law but also the
company rules and regulations as well imposing the penalty of dismissal on first offense of an
employee found guilty of selling or disposing of company property without proper authority
[Code of Conduct of PLDT Employees, Labor Arbiter s decision, p. 5, Rollo, p. 22.] This Court is
not unmindful of the plight of the workers throughout the country nor of the Constitutional
provisions, laws and statutes protecting them. However, the Court must likewise balance these
with the rights given to management particularly when there is just cause for dismissing an
erring employee.

(Sandigan Savings & Loan Bank, Inc. v. National Labor Relations Commission, G.R. No.
112877, [February 26, 1996], 324 PHIL 348-365)

ENTITLED TO REINSTATEMENT AND BACKWAGES IN CASE OF ILLEGAL DISMISSAL. —

There being a finding of illegal dismissal of private respondent Anita Javier, her reinstatement
should follow as a matter of course, unless it be shown that the same is no longer possible, in
which case, payment of separation pay will be ordered, in lieu thereof. In this case, we do not
find any such showing or basis to preclude private respondent's reinstatement. In effect, the
petitioner bank is liable to private respondent only for backwages, inclusive of allowances, and
other benefits or their monetary equivalent computed from the time her compensation was
withheld from her up to the time of her actual reinstatement, at the rate of her latest monthly
salary and allowance which was in the total amount of P2,350.00 as shown by Javier's latest
"Notice of Salary Adjustment."|||

||| (Philippine National Oil Co.-Energy Development Corp. v. National Labor Relations
Commission, G.R. No. 97747, [March 31, 1993])

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; EMPLOYMENT; GUIDELINES IN

DETERMINING WHETHER FIXED CONTRACTS OF EMPLOYMENT CIRCUMVENT
SECURITY OF TENURE. — The two guidelines, by which fixed contracts of employments can
be said not to circumvent security of tenure, are either: 1. The fixed period of employment was
knowingly and voluntarily agreed upon by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any other circumstances vitiating
his consent; or: 2. It satisfactorily appears that the employer and employee dealt with each other
on more or less equal terms with no moral dominance whatever being exercised by the former
on the latter. (Brent School v. Zamora, 181 SCRA 702 [1990]).

2. ID.; ID.; ID.; WORKER HIRED FOR SPECIFIC PROJECT AND DOES NOT BELONG TO
THE "WORK POOL," PROJECT EMPLOYEE. — Paraphrasing Rada v. NLRC, (205 SCRA 69
[1992]) it is clear that private respondent Mata is a project employee considering that he does
not belong to a "work pool" from which petitioner PNOC would draw workers for assignment to
other projects at its discretion. It is likewise apparent from the facts of the case that private
respondent Mata was utilized only for one particular project, the well-completion project which
was part of the exploration stage of the PNOC Bacon-Manito Geothermal Project. Hence,
private respondent Mata can be dismissed upon the termination of the project as there would be
no need for his services. We should not expect petitioner to continue on hiring private
respondent in the other phases of the project when his services will no longer be needed.

3. ID.; ID.; ID.; PROJECT EMPLOYEE; ENTITLED TO REINSTATEMENT AND BACKWAGES

WHERE TERMINATION WAS WITHOUT CLEARANCE FROM THE SECRETARY OF LABOR;
CASE AT BAR. — Paragraph No. 5, Policy Instruction No. 20, reads, as follows: "If a
construction project or any phase thereof has a duration of more than one year and a Project
employee is allowed to be employed therein for at least one year, such employee may not be
terminated until the completion of the project or of any phase thereof in which he is employed
without a previous written clearance from the Secretary of Labor. If such an employee is
terminated without a clearance from the Secretary of Labor, he shall be entitled to reinstatement
with backwages. The records do not show that petitioners obtained the necessary written
clearance to terminate the contract of employment of private respondent Mata. The latter is,
therefore, entitled to reinstatement with backwages.

4. ID.; ID.; ID.; ID.; ID.; PAYMENT OF SEPARATION PAY PROPER WHERE
REINSTATEMENT NO LONGER POSSIBLE. — Considering, however, that the Bacon-Manito
project has already been completed and is, presumably, now operating, reinstatement of private
respondent is impossible. He is, however, entitled to backwages and separation pay. For this
purpose, We adopt the Executive Labor Arbiter's computation as to how much backwages and
separation pay private respondent will get.

||| (Big Five Products Workers Union-CLP v. Court of Industrial Relations, G.R. No. L-17600,
[July 31, 1963], 118 PHIL 575-582)

SYLLABUS

1. COURT OF INDUSTRIAL RELATIONS; AUTHORITY TO ORDER REINSTATEMENT OF

EMPLOYEES DISMISSED DUE TO UNFAIR LABOR PRACTICE WITH OR WITH BACK PAY.
— Although Section 5, paragraph (c) of Republic Act No. 875 empowers the Court of Industrial
Relations to order the employer convicted of unfair labor practices to reinstate the victims
thereof "with or without back pay," this authority must be availed of in accordance with the
dictates of justice, reason and equity. Thus, where there is no explicit finding on the existence of
good faith on the part of the employer in dismissing the laborers involved, it is held that the
order of said lower court that said laborers be reinstated without back pay should be modified in
the sense that the reinstatement therein ordered shall be with full back pay.

2. ID.; ID.; CASES UPHOLDING REINSTATEMENT WITHOUT BACK WAGES

DISTINGUISHED FROM CASE AT BAR. — The cases upholding the discretion of the lower
court to order the reinstatement of dismissed employees without backpay should be
distinguished from the case at bar, because there were in said cases explicit findings on the
existence of a fact — good faith on the part of the employer — which was considered sufficient
to warrant exemption from the payment of backwages, despite the reinstatements therein
decreed. Such, however, is not the situation obtaining in the case at bar, because the resolution
appealed from does not mention any fact which may justify the granting of a similar exemption
to respondents, but on the contrary, the lower court found that said respondents in dismissing
the employees involved are guilty of unfair labor practices with malice aforethought.

||| (National Mines and Allied Workers' Union v. National Labor Relations Commission, G.R. No.
L-59596, [November 19, 1982], 204 PHIL 268-276)

SYNOPSIS

After petitioner union had filed a petition for certification election with the Bureau of Labor
Relations, respondent company falsely charged four union members with falsification and
"temporarily laid off" the chairman of the union's board of directors. When the petition for
certification election was granted and a date was set for the holding thereof, respondent
company applied for clearance to close its business operations. Then respondent company
informed its workers that a gradual transfer of business from the old premises to a new site one
kilometer away would be effected, but no order regarding the transfer was issued to the
workers. When petitioners reported for work at the old site, they were refused entry by the
guards. When they reported to the new site, they were given no work and no assignments, and
were thereafter dismissed for insubordination and abandonment of duties. Consequently,
petitioners filed a complaint for unfair labor practice before respondent National Labor Relations
Commission against respondent company which in turn filed a counter-complaint for
abandonment of work. In the meantime, the certification election was held wherein a convincing
majority of workers voted for a "non-union status" of the company. Respondent company did not
push through its threat to stop its operations. In spite of the facts of the case, the Labor Arbiter
ruled that respondent company is not guilty of unfair labor practice and the individual petitioners
not guilty of abandonment of work but merely of refusal to report to their assignments. Hence,
he ordered reinstatement of individual petitioners without backwages. Respondent Commission
fully agreed with the decision of the Labor Arbiter. Hence, this petition.

On review, the Supreme Court, granting the petition and setting aside the decision of the Labor
Arbiter, ordered respondent company to reinstate individual petitioners with full backwages and
without any loss of seniority rights. The Court held that respondent Commission committed
grave abuse of discretion in affirming in its entirety the inconsistent and illogical ruling of the
Labor Arbiter as derogatory to the rights of the workers and the protection given them by the
Constitution and statutes.

Petition granted. Assailed decision set aside.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATIONS; LABOR CODE; UNFAIR LABOR PRACTICE;

ILLEGAL DISMISSAL; LACK OF FACTUAL BASIS FOR EMPLOYER'S CLAIM THAT
WORKERS ARE GUILTY OF THE CHARGES; CASE AT BAR. — We find the private
respondent's contention that the petitioners are guilty of gross insubordination, malicious
neglect of duties, abandonment of duties, and unlawful severance of employer-employee
relationship illogical and without any factual basis. On January 6, 1979, the company informed
its workers that a gradual transfer of business from the old premises to a new site one kilometer
away would be effected. On Monday, January 9, 1979 when the petitioners reported for work at
the old site, they were refused entry. No memorandum or orders about their place of work was
given to them. They were simply refused admission by security guards. On January 11, 1979,
the company issued a memorandum regarding the petitioners' transfer but to the guards on duty
at the old site and not to the workers concerned. Somehow, the petitioners learned of the memo
and reported for work at the new site. They stayed at the place of work but were given no work
and no assignments. As stated by the Solicitor General, there is no showing that in only two
days from the January 9, 1979 commencement of the proposed gradual transfer, there would be
equipment, machineries, and materials for these petitioners suddenly "transferred" to the new
site to enable them to do any work.

2. ID.; ID.; ID.; ID.; EMPLOYER WHO IS GUILTY THEREOF GENERALLY REQUIRED TO
REINSTATE WORKERS WITH FULL BACKWAGES. — It is the established rule that an
employer who commits an unfair labor practice may be required to reinstate with full backwages
the workers affected by such act. (Compania Maritima v. United Seamen's Union, 104 Ins Phil.
7; Talisay Silay Milling Co v. CIR, 106 Phil. 1081; Velez v. PAV Watchmen's Union, 107 Phil.
689; Phil. Sugar Institute v. CIR, et at., 109 Phil. 452; Big Five Products Workers Union v. CIR,
8 SCRA 559; MD Transit & Taxi Co. v. De Guzman, 7 SCRA 726).

3. ID.; ID.; ID.; ID.; REINSTATEMENT WITHOUT AWARD OF BACKWAGES TO WORKERS

DEROGATORY TO THEIR RIGHTS AND PROTECTION UNDER THE CONSTITUTION; CASE
AT BAR. — The labor arbiter who, inspite of the facts of the case, found the acts of the
employer insufficient and not substantial enough to warrant a finding of dismissal due to union
activities could not bring himself to go all the way in favor of the employer. He ruled that there
was no insubordination or abandonment and that there was every reason for the petitioners to
want to cling to their work. He ordered reinstatement but without any backwages. In affirming in
its entirety such an inconsistent and illogical ruling so derogatory to the rights of the workers and
the protections given them by the Constitution and statutes, the respondent National Labor
Relations Commission committed grave abuse of discretion. The petition is granted. The
October 25, 1979 decision of the Labor Arbiter and the November 9, 1981 resolution of the
respondent Commission are set aside. The private respondent company is ordered to reinstate
the individual petitioners with full backwages and without any loss of seniority rights.

SYNOPSIS

Private respondent was employed as Master of the petitioner's vessel for a period of six months.
He was able to work only for two months because he was recalled by petitioners for transfer to
another vessel. Despite several follow-ups, private respondent was, however, not redeployed.
Hence, private respondent, averring that he was dismissed without just cause nor due process,
filed a complaint for illegal dismissal and non-payment of the salaries and allowances owing to
the unexpired portion of his contract. Petitioners denied private respondent's allegations. It
insisted that the letter-petition allegedly signed by certain officers and crewmembers of the
vessel charging private respondent with acts of dishonesty and embezzlement of company
funds, warrant the penalty of dismissal. The Labor Arbiter, the NLRC and the Court of Appeals
all found the dismissal of private respondent illegal and declared him entitled to three months
salary. cDaEAS

Hence, this petition.

The Supreme Court held that an employer can terminate the services of an employee only for
valid and just causes, which must be supported by clear and convincing evidence. In the
present case, the Court found that the petitioners utterly failed to establish by convincing
evidence private respondent's culpability. The acts allegedly complained of in the letter-petition
were not substantiated at all. No original of the letter-petition allegedly submitted to them by
crewmembers of the vessel was ever produced by petitioners. A condemnation of dishonesty
and disloyalty cannot arise from suspicions spawned by speculative inferences. Moreover, the
Court found that the manner of dismissal by petitioners of private respondent was devoid of due
process. Petitioners failed to furnish private respondent with the required written notices before
he was dismissed. Hence, the Court affirmed the decision of the Court of Appeals, but with
modification ordering the petitioners to pay private respondent his salaries for four months
representing the unexpired portion of his employment contract.
SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; DISMISSAL; TO BE VALID,

THE EVIDENCE MUST BE SUBSTANTIAL AND NOT ARBITRARY AND MUST BE FOUNDED
ON CLEARLY ESTABLISHED FACTS. — The appellate court concluded that private
respondent had been illegally dismissed based on evidence adduced before the Labor Arbiter
and later the NLRC. We see no reason to disturb the appellate court's findings, which are amply
supported by the evidence. It clearly shows that petitioners relied on sheer surmises and
hearsay in dismissing private respondent. An employer can terminate the services of an
employee only for valid and just causes, which must be supported by clear and convincing
evidence. The employer has the burden of proving that the dismissal was for a valid and just
cause. In the present case, petitioners utterly failed to establish by convincing evidence private
respondent's culpability. No original of the letter-petition allegedly submitted to them by
crewmembers of the vessel was ever produced by petitioners. The acts allegedly complained of
therein were not substantiated at all. Failure to discharge this burden of proof substantially
means that the dismissal was not justified and therefore, illegal. For dismissal to be valid, the
evidence must be substantial and not arbitrary and must be founded on clearly established
facts. A condemnation of dishonesty and disloyalty cannot arise from suspicions spawned by
speculative inferences.

2. ID.; ID.; ID.; LOSS OF TRUST AND CONFIDENCE; EMPLOYEE'S BREACH OF DUTY
MUST BE SUPPORTED BY SUBSTANTIAL EVIDENCE. — Petitioners' submission, that
private respondent was dismissed because of loss of trust and confidence, is quite belated. This
issue could not be raised for the first time on appeal. Moreover, loss of trust or breach of
confidence must have some basis, and without said basis cannot be successfully invoked as a
ground for dismissal. Otherwise put, there must be some breach of duty on the part of the
employee and the same must be supported by substantial evidence.

3. ID.; ID.; ID.; CONSIDERED VOID IF REQUIREMENTS OF DUE PROCESS WERE NOT
OBSERVED. — Not only must the reasons for dismissing an employee be substantiated, the
manner of his dismissal must be in accordance with governing rules and regulations. Otherwise
the termination itself would be grossly defective, and illegal. This means that the requirements
of due process must be observed. The employer is required to furnish the concerned employee
with two written notices before his dismissal: (1) the notice which apprises the employee of the
particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice of
the employer's decision to dismiss him. This procedure is mandatory; otherwise the order of
dismissal is void.

4. ID.; ID.; ID.; 'TWO-NOTICE RULE'; REQUIRED NOTICE MAY BE DISPENSED WITH IN
EXCEPTIONAL CASE OF CLEAR AND EXISTING DANGER TO THE SAFETY OF THE
CREW OR VESSEL. — Note that under Section 17 of what is termed the Standard Format, the
"two-notice rule" is indicated. An erring seaman is given a written notice of the charge against
him and is afforded an opportunity to explain or defend himself. Should sanctions be imposed,
then a written notice of penalty and the reasons for it shall be furnished the erring seafarer. It is
only in the exceptional case of clear and existing danger to the safety of the crew or vessel that
the required notices are dispensed with; but just the same, a complete report should be sent to
the manning agency, supported by substantial evidence of the findings.

5. ID.; ID.; ID.; CONSIDERED ILLEGAL ABSENT DUE PROCESS; CASE AT BAR. — Nothing
on record supports petitioners' allegations that the giving of a notice to private respondent
posed a clear and present danger to crew and vessel. He who invokes an exemption from a rule
must by convincing and credible evidence show why the exemption should apply to him. On this
score, petitioners failed to adduce pertinent evidence. Further, nothing on record shows that the
Master, who replaced private respondent, or any other officer of M/V Rita V or of petitioners,
submitted "a complete report to the manning agency substantiated by witnesses, testimonies,
and any other documents" supporting a finding of clear and existing danger to the ship and the
company. Hence, we are constrained to agree that the manner of dismissal by petitioners of
private respondent was devoid of due process, hence illegal.

6. ID.; REPUBLIC ACT NO. 8042, SECTION 10 THEREOF; MONEY CLAIM; AN ILLEGALLY
DISMISSED EMPLOYEE IS ENTITLED TO HIS UNPAID SALARIES FOR THE UNEXPIRED
PORTION OF HIS EMPLOYMENT CONTRACT. — In Marsaman Manning Agency, Inc. vs.
NLRC, involving Section 10 of Republic Act No. 8042, we held: [W]e cannot subscribe to the
view that private respondent is entitled to three (3) months salary only. A plain reading of Sec.
10 clearly reveals that the choice of which amount to award an illegally dismissed overseas
contract worker, i.e., whether his salaries for the unexpired portion of his employment contract
or three (3) months salary for every year of the unexpired term, whichever is less, comes into
play only when the employment contract concerned has a term of at least one (1) year or more.
This is evident from the words "for every year of the unexpired term" which follows the words
"salaries . . . for three months." To follow petitioners' thinking that private respondent is entitled
to three (3) months salary only simply because it is the lesser amount is to completely disregard
and overlook some words used in the statute while giving effect to some. This is contrary to the
well-established rule in legal hermeneutics that in interpreting a statute, care should be taken
that every part or word thereof be given effect since the lawmaking body is presumed to know
the meaning of the words employed in the statute and to have used them advisedly. Ut res
magis valeat quam pereat. It is not disputed that private respondent's employment contract in
the instant case was for six (6) months. Hence, we see no reason to disregard the ruling in
Marsaman that private respondent should be paid his salaries for the unexpired portion of his
employment contract.

||| (Skippers Pacific, Inc. v. Mira, G.R. No. 144314 *, [November 21, 2002], 440 PHIL 906-923)

LABOR LAW; NATIONAL LABOR RELATIONS COMMISSION; JUDGMENTS; MAY NO

LONGER BE AMENDED OR CORRECTED ONCE IT HAS BECOME FINAL AND
EXECUTORY. — Inasmuch as the August 1, 1983 order merely directed the reinstatement of
private respondents to their former positions without backwages, the Regional Director acted
without or in excess of jurisdiction when he awarded backwages, upon motion of the private
respondents, computed from September 2, 1983 to August 19, 1984, representing the span of
time after the lapse of the ten (10) day period within which Supercars should effect
reinstatement until the date prior to the actual reinstatement of the private respondents on
August 20, 1984. Thus, in affirming the aforestated order, the Minister of Labor and Employment
likewise acted without or in excess of jurisdiction. It bears emphasis that the award constituted a
modification of a final order. In this regard, We quote with approval what was said in Maramba
vs. Lozano, et al., G.R. No. L-21533, June 29, 1967, 20 SCRA 474 and Nieva vs. Manila
Banking Corporation, et al., G.R. No. L-30811, September 2, 1983, 124 SCRA 453, to wit: "It is
hornbook doctrine that 'a decision which has become final and executory can no longer be
amended or corrected by the court except for clerical errors or mistakes and however erroneous
it may be, cannot be disobeyed, otherwise litigations would be endless and no questions could
be considered settled.'"
2. ID.; ID.; ID.; IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; MOTION FOR THE
ISSUANCE OF A WRIT OF EXECUTION; FILING THEREOF NECESSARY TO PREVENT
DELAY IN THE IMPLEMENTATION OF THE SUBJECT DECISION. — In National Steel
Corporation vs. National Labor Relations Commission, et al., G.R. No. 74711, September 19,
1988, We held: Under Article 223 of the Labor Code, as amended, the decision of the National
Labor Relations Commission is immediately executory even pending appeal. Remolado could
have moved for the issuance of a writ of execution of the decision during the pendency of the
appeal and insisted on his right to be reinstated or the Respondent commission could have
issued a writ of execution on its own initiative, conformably with Article 224 (a) of the same
Code. Thus, the delay in the implementation of the decision cannot be wholly attributed to
petitioner." The order dated August 1, 1983 being immediately executory, private respondents
should have moved for the issuance of a writ of execution of said order even while the motion
for reconsideration is still pending. It is significant to note that no mention was made of a motion
for execution having been filed and it was only on August 29, 1985 when the Regional Director
ordered the issuance of the writ of execution, motu proprio. It is fitting to mention again our
observation in National Steel Corporation vs. National Labor Relations Commission, et al.,
supra to wit: "What obviously caused the delay was the sheer inaction of private respondent
who was entitled to enforce it. Under the circumstances, it would definitely be offensive to
justice and fair play to hold petitioner liable for the consequence of such inaction."

||| (Supercars, Inc. v. Minister of Labor and Employment, G.R. Nos. 74151-54, [April 10, 1989],
253 PHIL 652-659)

LABOR AND SOCIAL LEGISLATIONS; EMPLOYER-EMPLOYEE RELATIONSHIP; SERIOUS

MISCONDUCT AND WILLFUL BREACH OF TRUST; GROUNDS FOR TERMINATION;
ABSENCE IN THE CASE AT BAR. — There is no disputing the proposition that if the private
respondents really committed serious misconduct and willful breach of trust, the termination of
their employment is expressly authorized under Article 283, paragraphs (b) and (d) of the Labor
Code, as amended. Sadly enough, however, the record is bereft of any competent showing to
prove the imputation that the private respondents acted in connivance with the perpetrators, or
participated somehow in the commission of the so-called "telehygienic" racket. The petitioner
not having conducted its own investigation to determine the truth of the alleged involvement of
the private respondents in the alleged racket, it relies merely on the action taken by the military
authorities may have arrived at was not presented in evidence, nor revealed by the petitioner in
its petition.

2. ID.; ID.; SECURITY OF TENURE; REINSTATEMENT IN CASE OF UNJUST AND INVALID

TERMINATION. — The petitioner not having proved nor substantiated any ground to justify its
alleged loss of confidence in the private respondents so as to authorize their dismissal based on
said ground, We fail to see how the decision complained of may be said to have been rendered
in wave abuse of discretion. We have to recognize the constitutional right of the private
respondents to "security of tenure" (Article II, Section 9, Constitution); They not having given
just and valid causes to warrant the termination of their employment (Article 280, New Labor
Code, as amended). Their reinstatement entitles them to the payment of their back wages.
Considering, however, that the private respondents have been laid off for over four years during
which period they were not prevented from deriving income from some other gainful activity, the
Court deems it fair that their backwages should be limited to two years without deduction.
||| (Philippine Long Distance Telephone Co. v. National Labor Relations Commission, G.R. No.
L-58004, [May 30, 1983], 207 PHIL 529-534)

LABOR LAWS AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; LOSS OF

CONFIDENCE AS GROUND FOR EMPLOYEE'S DISMISSAL MUST BE FOUNDED ON
FACTS ESTABLISHED BY SUBSTANTIAL EVIDENCE; BURDEN OF PROOF RESTS ON
EMPLOYER; EMPLOYEE'S FATE CANNOT BE HINGED UPON CONJECTURES AND
SURMISES. — We have consistently held that loss of confidence is a recognized ground for the
discharge of an employee from employment. But such ground must be founded on facts
established by substantial evidence. The burden of establishing such facts as reasonably cause
loss of confidence in an employee — such facts as reasonably generate belief by the employer
that the employee was connected with some misconduct and the nature of his participation
therein is such as to render him unworthy of trust and confidence demanded of his position — is
on the employer.

2. ID.; ID.; AVOWED POLICY OF THE LAW IS PROTECTION OF LABOR; EMPLOYEE'S

POSITION AND MEANS OF LIVELIHOOD AT STAKE IN DISMISSAL. — It is the avowed
policy of the law to protect labor. So that, unless based on a ground provided by law and is
supported by substantial evidence, dismissal will be disallowed, for what is at stake is not only
the employee's position, but also his means of livelihood.

3. ID.; ID.; ILLEGAL DISMISSAL; PERIOD COVERED BY BACKWAGES DUE EMPLOYEE;

SEVERANCE PAY GRANTED IN LIEU OF REINSTATEMENT; REASON THEREFOR; CASE
AT BAR. — Thus, there being no basis in law or in fact for Jemina's dismissal, We hereby affirm
the order of the public respondent NLRC for the payment to Jemina of his backwages starting
from the period of his dismissal but not to exceed three (3) years, without qualification and
deduction; and severance pay equivalent to one month's salary for every year of service. This is
the more equitable disposition than reinstatement, considering the strained relations between
Jemina and petitioner Bank. This way, (Jemina) can be spared the agony of having to work
anew with the (petitioner Bank) under an atmosphere of antipathy and antagonism, and the
latter does not have to endure the continued service of the former in whom it has lost
confidence.

||| (Pilipinas Bank v. National Labor Relations Commission, G.R. No. 101372, [November 13,
1992], 290 PHIL 244-252)

SYNOPSIS

Petitioner Jardine Davies, Inc. was engaged in general trading which include the exclusive
distributorship of "Union 76" lubricating oil which was manufactured by Unoco Philippines, Inc.
The private respondent Virgilio Reyes was its former sales representative. However, there were
reports that "Union 76" lubricating oil was being illegally manufactured, blended, packed and
distributed. The said report was confirmed by a private investigator who reported further that it
was being undertaken by the private respondent. A Search Warrant was secured by petitioner
which led to the seizure of the alleged fake items found in the apartment complex occupied by
private respondent. This eventually resulted to the dismissal from employment of private
respondent since he committed serious misconduct inimical to the interest of the petitioner.
Meantime, all the materials seized by virtue of a petition filed by private respondent's younger
brother, Donato Reyes, being the legal tenant of the apartment and all the materials seized are
legally claimed by him. By reason thereof, private respondent sued petitioner for illegal
dismissal. But the Labor Arbiter dismissed the complaint. On appeal, the National Labor
Relations Commission reversed the judgment of the Labor Arbiter. TcHEaI

Hence, this petition.

The Court ruled that there was no factual basis for petitioner's distrust of private respondent as
evidenced by the subsequent judicial order releasing the articles seized during the search. As it
appears on record, the trial court believed the explanation of Donato Reyes, brother of private
respondent, that he was the lessee of the aforesaid apartment. Besides, the court declared that
the owner of the confiscated goods was Donato Reyes, and there was no proof that the
mentioned articles belonged to private respondent. In sum, the Court held that public
respondent did not gravely abuse its discretion in ruling that petitioner failed to duly prove that
the dismissal of private respondent was justified on account of loss of trust and confidence.
Hence, private respondent's dismissal was found illegal and petitioner was ordered to pay
private respondent backwages and separation pay in lieu of reinstatement.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; RULES OF PROCEDURE OF THE NATIONAL

LABOR RELATIONS COMMISSION; APPEAL; IF THE LAST DAY FOR FILING IS A NON-
WORKING DAY, IT CAN BE FILED ON THE NEXT WORKING DAY. — The last day for filing
the appeal was November 2, 1985, which was a Saturday and a non-working day for NLRC.
Clearly, the appeal could not have been filed on such date. Neither could it have been sent by
registered mail because the post office was closed. The next day, November 3, 1985, was a
Sunday. Accordingly, the appeal could still be filed on the next working day, Monday, November
4, 1985, the earliest day this could have been done.

2. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; DOES NOT INCLUDE INQUIRY
AS TO CORRECTNESS OF EVALUATION OF EVIDENCE. — Resort to judicial review of the
decisions of the National Labor Relations Commission by way of a special civil action for
certiorari under Rule 65 of the Rules of Court is confined only to issues of want or excess of
jurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an
inquiry as to the correctness of the evaluation of evidence which was the basis of the labor
agency in reaching its conclusion. Neither is it for this Court to re-examine conflicting evidence,
re-evaluate the credibility of the witnesses nor substitute findings of fact for those of an
administrative body which has gained expertise in its specialized field. Arguably, there may
even be an error in judgment. This, however, is not within the ambit of the extraordinary remedy
of certiorari.

3. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF EMPLOYMENT;

GROUND FOR DISMISSAL; LOSS OF CONFIDENCE; ACT COMPLAINED OF MUST BE
WORK-RELATED. — It is settled that loss of confidence as a just cause for terminating
employment must be premised on the fact that an employee concerned holds a position of trust
and confidence. This situation obtains where a person is entrusted with confidence on delicate
matters, such as care and protection, handling or custody of the employer's property, as in this
case. But, in order to constitute a just cause for dismissal, the act complained of must be "work-
related" such as would show the employee concerned to be unfit to continue working for the
employer.

4. ID.; ID.; ID.; ID.; ID., PROOF BEYOND REASONABLE DOUBT NOT REQUIRED. —
Likewise, it must be noted that proof beyond reasonable doubt is not required to dismiss an
employee on the ground of loss of confidence. It is sufficient that there is some basis for such
loss of confidence, such as when the employer has reasonable ground to believe that the
employee concerned is responsible for the purported misconduct, and the nature of his
participation therein renders him unworthy of the trust and confidence demanded of his position.

5. ID.; ID.; ID.; ID.; ID.; MUST ARISE FROM PARTICULAR PROVEN FACTS. — This Court,
however, has repeatedly stressed that the right of an employer to dismiss employees on
account of loss of trust and confidence must not be exercised arbitrarily and without showing
just cause, so as not to render the employee's constitutional right to security of tenure nugatory.
Thus, although the dropping of a criminal charge for an employee's alleged misconduct does
not bar his dismissal, and proof beyond reasonable doubt is not necessary to justify the same,
still the basis thereof must be clearly and convincingly established. Besides, for loss of
confidence to be a valid ground for dismissal, such loss of confidence must arise from particular
proven facts. In other words, this ground must be founded on facts established by the employer
who must clearly and convincingly prove by substantial evidence the facts and incidents upon
which loss of confidence in the employee may be fairly made to rest; otherwise the dismissal will
be rendered illegal.

6. ID.; ID.; ID.; ID.; ID.; NOT ESTABLISHED IN CASE AT BAR. — In the case at bar, private
respondent was suspended and eventually dismissed for allegedly committing fraudulent acts
and unfairly competing with petitioner. To justify its administrative action, petitioner somehow
gave credence to the surveillance report implicating private respondent in the illegal
manufacture, blending, packing and distribution of petitioner's products. Petitioner likewise
relied on the result of the search on the apartment reportedly leased by private respondent from
which alleged counterfeit "Union 76" oil products were seized. Unfortunately, these could not be
deemed sufficient basis for petitioner to lose its trust and confidence on private respondent so
as to justify the latter's dismissal.

7. ID.; ID.; ID.; ILLEGALLY DISMISSED EMPLOYEES STARTING FROM MARCH 21, 1989
ARE ENTITLED TO FULL BACKWAGES. — It must be emphasized, though, that jurisprudence
distinguishes between employees illegally dismissed prior to the effectivity of Republic Act No.
6715 on March 21, 1989, and those whose illegal dismissals were effected after such date.
Thus, employees illegally dismissed prior to March 21, 1989, are entitled to backwages up to
three (3) years without deduction or qualification, while those illegally dismissed after are
granted full backwages inclusive of allowances and other benefits or their monetary equivalent
from the time their actual compensation was withheld from them up to the time of their actual
reinstatement.

8. ID.; ID.; ID.; ILLEGALLY DISMISSED EMPLOYEES ARE ENTITLED TO SEPARATION PAY
IF REINSTATEMENT IS NO LONGER VIABLE. — In addition to backwages, illegally dismissed
employees are entitled to either reinstatement, if feasible, or separation pay, if reinstatement is
no longer viable. In our view, the circumstances obtaining in this case would not warrant the
reinstatement of the private respondent. Antagonism and imputations of criminal act caused a
severe strain in the relationship between petitioner and private respondent, not to mention the
considerable length of time private respondent has been out of petitioner's employ. Thus, a
more equitable disposition would be an award of separation pay equivalent to one (1) month's
pay for every year of service with petitioner, a fraction of at least six (6) months being
considered as one (1) whole year. In the computation of separation pay, the three-year period
wherein backwages are awarded must be included. cdphil

||| (Jardine Davies, Inc. v. National Labor Relations Commission, G.R. No. 76272, [July 28,
1999], 370 PHIL 310-322)

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT; GROSS

NEGLIGENCE; DEFINITION. — Gross negligence has been defined as the want of any or slight
care (Caunan v. Campania General de Tabacos, 56 Phil. 547) or the utter disregard of
consequences (Marinduque Iron Mines Agents, Inc. v. WCC, 99 Phil. 485 [1956]).

2. ID.; ID.; ID.; CASE AT BAR. — Admittedly, the encashment of the checks in question is a
violation of Policy No. 014 of said hotel. But as found by the Labor Arbiter, it was established
that: (a) complainant was not motivated by bad faith; (b) Policy No. 014 is not strictly or
consistently enforced but has been relaxed repeatedly to meet business exigencies; and (c)
complainant's encashment of the checks in question was not only with the knowledge but with
clearance from her superiors who are more knowledgeable as to the circumstances under which
the enforcement of the same may be relaxed. Verily, complainant was placed under most
difficult circumstances and she deserves the full protection of the law.

3. ID.; ID.; LOSS OF TRUST AND CONFIDENCE; NOT TO BE USED AS SHIELD TO

DISMISS AN EMPLOYEE; RIGHT TO DISMISS MUST BE DONE WITHOUT ABUSE OF
DISCRETION. — It is well settled that dismissal based on loss of trust and confidence arising
from alleged misconduct of employee, is not to be used as a shield to dismiss an employee
arbitrarily (Callanta v. Carnation Philippines, Inc., 145 SCRA 268 [1986]). Although the power to
dismiss is a normal prerogative of the employer, the same is not without limitations (Rance v.
NLRC, 163 SCRA 279 ([1988]). The right of the employer must not be exercised arbitrarily and
without just cause. Otherwise, the constitutional guarantee of security of tenure of the workers
would be rendered nugatory. While dismissing or laying off of an employee is a management's
prerogative, it must nevertheless be done without abuse of discretion (Atlas Consolidated
Mining Corp. v. NLRC, G.R. No. 75755, November 24, 1988).

4. ID.; ID.; ID.; ID.; STATE REGULATES RIGHT OF EMPLOYER; LABOR PROVISIONS ARE
INTERPRETED IN FAVOR OF THE EXERCISE OF LABOR RIGHTS. — The right of employer
to freely select or discharge his employees is regulated by the State, because the preservation
of the lives of the citizens is a basic duty of the State, more vital than the preservation of the
corporate profit (Euro-Linea, Phils., Inc. v. NLRC, 156 SCRA 78 [1987]). In addition, security of
tenure is a right of paramount value guaranteed by the Constitution and should not be denied on
mere speculation (Tolentino v. NLRC, 152 SCRA 717 [1987]). Protection to labor and social
justice provisions of the Constitution and the labor laws and rules and regulations are
interpreted in favor of the exercise of labor rights (Euro-Linea, Phils., Inc. v. NLRC, supra).
HcISTE
5. ID.; NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER; FINDINGS OF
FACTS THEREOF ARE CONCLUSIVE ON SUPREME COURT. — It has been ruled time and
again that finding of facts of the Labor Arbiters is conclusive on the Supreme Court if supported
by substantial evidence (Reyes v. Philippine Duplication, Inc., 109 SCRA 489 [1981]).

6. ID.; TERMINATION OF EMPLOYMENT; REINSTATEMENT AND BACKWAGES OF THREE

YEARS; WHERE THERE IS FINDING OF ILLEGAL DISMISSAL, EMPLOYEE IS ENTITLED
THERETO. — However, it is axiomatic that where there is a finding of illegal dismissal,
petitioner is entitled not only to reinstatement but also award of backwages (Alzosa v. NLRC,
120 SCRA 611 [1983]; Atlas Consolidated Mining & Dev. Corp. v. NLRC, 167 SCRA 759
[1988]). Accordingly, also recently, this Court holding that NLRC gravely abused its discretion in
setting aside the decision of the Labor Arbiter and in granting respondent company clearance to
dismiss the petitioner, ruled that petitioner is entitled to reinstatement and to payment of full
backwages from date of termination but not more than a maximum of three (3) years (Jaballas
v. Const. Dev. Corp. of the Phils., 165 SCRA 716 [1988]).

||| (Llosa-Tan v. Silahis International Hotel, G.R. No. 77457, [February 5, 1990], 260 PHIL 787-
796)

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; NATIONAL LABOR RELATIONS COMMISSION;

FINDINGS OF FACT THEREOF; RULE. — The findings of fact of the NLRC are conclusive on
this Court in the absence of a showing that they were arrived at arbitrarily. (De Vera v. NLRC,
191 SCRA 632).

2. ID.; EMPLOYER-EMPLOYEE RELATIONSHIP; AS A GENERAL RULE, EMPLOYER HAS

THE PREROGATIVE TO ORDER PAYMENT OF BACKWAGES PLUS SEPARATION PAY IN
LIEU OF REINSTATEMENT; EXCEPTION. — As a rule, the Court recognizes the prerogative
of the employer to order merely payment of backwages plus separation pay in lieu of
reinstatement even when the employee was eventually cleared of the charges, where relations
between employer and the employee are so strained or where an employee would no longer be
useful because his employer has lost trust and confidence in him. However, this rule is not
without exception. In the case of Sibal v. Notre Dame of Greater Manila, 182 SCRA 538, the
Court held: ". . . Clearly, therefore, when the assailed NLRC decision was rendered on April 11,
1986, the alleged `strained relations' of `irritant factors' which the Labor Arbiter capitalized on
had been totally eliminated. Respondent NLRC obviously failed to consider this and thus
perpetrated the error committed by the Labor Arbiter in her prior decision. The eventual
replacement of Fr. Garcia all the more confirmed the discretionary and oppressive treatment
which he gave petitioner. The dissenting NLRC Commissioner aptly observed thus: Moreover, it
should be emphasized that no strained relations should arise from a valid and legal act of
asserting one's right, such as in the instant case, for otherwise, an employee who still asserts
his/her separation pay on the pretext that his/her relationship with his/her employer and already
become strained relations in order that it may justify the award of separation pay in lieu of
reinstatement with backwages should be such that they are so compelling, and so serious. . . .."

3. ID.; TERMINATION OF EMPLOYMENT; DISMISSAL; FOUND ILLEGAL IN CASE AT BAR.

— Private respondent was illegally terminated because (a) the Board of Directors had no
authority to terminate her and (b) the charges or offenses imputed against her were not
substantiated and that private respondent was not guilty thereof. But she was not reinstated
because of animosity giving rise to a strained relationship between Rolando Romero (the Board
President) and the former. However, during the pendency of the motion for reconsideration
before the NLRC, Rolando Romero died. Hence, the NLRC realizing that the obstacle to
reinstate private respondent to her former position is already removed, modified its decision and
ordered her reinstatement. This ruling is conformable to the aforecited case of Sibal v. Notre
Dame of Greater Manila (182 SCRA 538). We therefore sustain the same. Besides, we rule that
private respondent's termination can only be made by the General Assembly and not by the
Board of Directors. To pay her separation pay instead of reinstatement would in effect validate
her termination which was not authorized and illegal. If petitioner believes that private
respondent's continued stay would be most detrimental to the cooperative, let them present the
matter to the General Assembly, in accordance with petitioner's constitution and by-laws.

||| (Talaga Barangay Water Service Cooperative v. National Labor Relations Commission, G.R.
No. 94803, [March 16, 1992], 283 PHIL 1105-1113)

SYNOPSIS

In L-18461, decided by this Court of February 10, 1967, petitioner Company was adjudged to
reinstate without back wages its striking employees (members of respondent union). It filed a
Motion for Clarification of the decision informing the Court that it cannot accommodate and
reinstate all the strikers on account of this automation and modernization of its plant. This
motion was denied. Meanwhile, in the court a quo, the respondents filed motions for the
issuance of an order directing the petitioner to accept in its employ its member-strikers and to
pay back wages from the time they presented themselves to work until reinstatement. Petitioner
filed its opposition thereto. Subsequently however, the court a quo, in three separate orders,
directed the union-member-strikers to report for work and the petitioner-company to accept
them back. Some reported for work; others ignored the order; a few were told to rest until fit for
work while others who were found with tuberculosis were given their compensation pay. In still
another order, dated December 28, 1973, the lower court ordered the petitioner to pay back
wages. The motion for reconsideration having been denied in a resolution en banc dated July
31, 1974, petitioner filed this instant petition for review raising as errors the Industrial Court's
order for the payment of back wages to the strikers; the extension of time within which those
who failed to report for work to ask for reinstatement; and for an award of back wages to those
found unfit to work.

The Supreme Court held that the court a quo exceeded its authority and amended the judgment
in L-18461 when it issued the questioned orders. It set aside the order of December 28, 1973
and the resolution en banc of July 31, 1974 and directed petitioner to immediately reinstate
strikers formerly found unfit for work because of tuberculosis and other illness upon presentation
of a certificate of their physical fitness for work by a government physician.

SYLLABUS

1. LABOR DISPUTES; STRIKES; RETURN-TO-WORK ORDER; FAILURE TO COMPLY

THEREWITH A FORFEITURE OF RIGHT TO REINSTATEMENT. — The strikers' failure,
without proper justification, to report for work assignment despite the issuance of the orders
reinstating them to their job is deemed a forfeiture of their right to reinstatement. Their
unexplained failure to request for another period or an extended period within which to comply
with the reinstatement orders and report back to work militate against them. In East Asiatic Co.,
Ltd., et al. vs. CIR, et al. G.R. No. L-29068, August 31, 1971, this Court had occasion to rule
that the failure to report for work when one had the opportunity to do so waived thereby his right
to reinstatement.

2. ID.; ID.; ID.; NON-ACCEPTANCE OF SERVICE OF STRIKERS FOUND UNFIT TO WORK

BUT ABSENT THE DISMISSAL OR TERMINATION BY THE EMPLOYER; GRANT OF
SEPARATION PAY NOT PROPER; CASE AT BAR. — Where the strikers, found unfit for work
because of tuberculosis and other illness were advised by their employer to report back for work
as soon as they have recovered from their illness and promised that upon proof that they are
physically fit for work, they shall be accepted, no separation pay should be required of the
employer. Reason: The Termination Pay Law, R.A. No. 1052, as amended requires payment of
separation pay or termination pay only in cases wherein a covered employer dismisses or
terminates in its employ an employee without just cause or advance notice. In the instant case,
the employees concerned went on strike on the belief that an unfair labor practice was
committed against them by the petitioners. It was not, however, established that the petitioners
did commit any unfair labor practice. On the contrary, the petitioners were absolved of the
charge of unfair labor practice. Furthermore, the record of the case is bereft of any showing of
the soundness of the physical condition of the strikers concerned when they reported back for
work with the petitioners on September 7, 1967,

3. ID.; ID.; EMPLOYER CANNOT BE COMPELLED TO REINSTATE UNFIT WORKERS. — In

the recent case of Mercury Drug Co., Inc., et al. vs. CIR. et al., L-23357, April 30, 1974, it was
held that an employer should not be compelled to reinstate an employee who is no longer
physically fit for the job from which he was ousted. However, the employee can be reinstated
after securing a certification of his physical fitness from a government physician.

4. ID.; ID.; LABOR COURTS DECISION AWARDING BACKWAGES TO STRIKERS, AN

AMENDMENT OF HIGH COURT'S FINAL VERDICT; CASE AT BAR. — The final verdict of this
Court in L-18464 was explicit — "reinstatement but without back wages", in view of the absence
of finding that company petitioners were guilty of unfair labor practice. This notwithstanding, the
Court of Industrial Relations ordered petitioners to pay backwages to union-member-strikers.
HELD: The Court a quo exceeded its authority in seeing to it that the decision of this Court
should be executed, "without in any way authorizing the Court of Industrial Relations to amend"
the same, there being no showing of unjust refusal on the part of the herein petitioners to
reinstate their striker-employees. To rule otherwise, in the face of the uncontroverted
automation and modernization of the business operations of the petitioner, would be tantamount
to exacting and thus making Our decisions to hang in the precipice of uncertainty or to remain
on the brink of disaster.

||| (Jackbilt Concrete Block Co., Inc. v. Norton & Harrison Co., G.R. No. L-39174, L-39186, [May
7, 1976], 162 PHIL 895-896)

SYLLABUS
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; DENIAL THEREOF WHERE
STRIKERS IN CASE AT BAR WERE AUTOMATICALLY DISMISSED ON A MERE FINDINGS
OF ILLEGALITY OF STRIKE ASCERTAINED THROUGH AN IRREGULAR PROCEDURE. — A
mere finding of the illegality of a strike should not be automatically followed by wholesale
dismissal of the strikers from their employment. What is more, the finding of the illegality of the
strike by respondent Minister of Labor and Employment is predicated on the evidence
ascertained through an irregular procedure conducted under the semblance of summary
methods and speedy disposition of labor disputes involving striking employees. While it is true
that administrative agencies exercising quasi-judicial functions are free from the rigidities of
procedure, it is equally well-settled in this jurisdiction that avoidance of such technicalities of law
or procedure in ascertaining objectively the facts in each case should not, however, cause a
denial of due process. The relative freedom of the labor arbiter from the rigidities of procedure
cannot be invoked to evade what was clearly emphasized in the landmark case of Ang Tibay vs.
Court of Industrial Relations that all administrative bodies cannot ignore or disregard the
fundamental and essential requirements of due process. As clearly pointed out in Free
Employees and Workers Association (FEWA) vs. Court of Industrial Relations, this Court,
speaking thru Justice J.B.L. Reyes, stated, thus: "That the Court of Industrial Relations is only
quasi-judicial in character, and not bound by strict rules of evidence, does not mean that it can
dispense with any and all rules, even the most substantial, and those shown by experience to
be essential in arriving at the truth, . . . for the more liberal the practice in admitting testimony,
the more imperative the obligation to preserve the essential rules of evidence by which rights
are asserted or defended." The principle of due process furnishes a standard to which
governmental action should conform in order to impress it with the stamp of validity. Fidelity to
such standard must of necessity be the overriding concern of government agencies exercising
quasi-judicial functions. Although a speedy administration of action implies a speedy trial, speed
is not the chief objective of a trial. Respect for the rights of all parties and the requirements of
procedural due process equally apply in proceedings before administrative agencies with quasi-
judicial powers. For, the statutory grant of power to use summary procedures should heighten a
concern for due process, for judicial perspective in administrative decision-making, and for
maintaining the vision which led to the creation of the administrative office. We see no cogent
reason to deviate from the aforecited principles of law enunciated by this Court in earlier cases.
The requirements of procedural due process were not observed in the instant case. Petitioners
were not afforded full opportunity to be heard to warrant a drastic consequence like outright
dismissal from employment. Procedural due process, requires a hearing before condemnation,
with the investigation to proceed in an orderly manner, and judgment to be rendered only after
such inquiry.

2. ID.; ID.; ID.; PRESUMPTION OF REGULARITY IN THE PERFORMANCE OF

GOVERNMENTAL FUNCTIONS NOT APPLICABLE WHERE THERE IS DENIAL OF DUE
PROCESS. — The labor arbiter should have shown a more perceptive and adequate grasp,
even of the minimum of the cardinal requirements of due process of law. As a reminder, it must
not be lost sight of that the legal presumption of regularity in the performance of governmental
functions is not applicable, as in the case at bar, where due process was denied the parties.

3. LABOR AND SOCIAL LEGISLATIONS; LABOR RELATIONS; RIGHT TO STRIKE; NOT

EVERY FORM OF VIOLENCE SUFFICES TO AFFIX SEAL OF ILLEGALITY ON STRIKE OR
CAUSE LOSS OF EMPLOYMENT BY GUILTY PARTY. — The decision of the respondent
Minister of Labor and Employment, thru Deputy Minister Amado Inciong, did not reflect
adherence to authoritative pronouncements of this Court on matters relating to the right of the
workers to strike. Evidently, there appears in the decision unsympathetic attitude towards the
workers' right to strike as a legitimate expression of a valid grievance against the management
resorted to for their mutual aid and protection. What is worse, the clearance application to
terminate the employment of the ten (10) workers, now petitioners, was granted on the basis of
a finding that the ten (10) workers were the instigators and leaders of the strike lasting from
February 19 to March 13, 1979 allegedly marred by acts of violence such as the stoning of the
Company power plant, coercing, and threats to prevent non-striking workers from reporting for
work. Affixing the stamp of illegality to the strike on the ground that it was marred by acts of
violence committed by the workers, is to Us an unrealistic and outmoded view of the right to
strike. From all indications, under the facts and circumstances of the instant case, staging such
a concerted action by not reporting for work, as in the case at bar, may be viewed as one
inspired by good faith. In Shell Oil Workers' Union vs. Shell Company of the Philippines Ltd., the
facts therein indicate a greater degree of violence, this Court, speaking thru Justice Enrique M.
Fernando, now Chief Justice, held that not every form of violence suffices to affix the seal of
illegality on a strike or to cause the loss of employment by the guilty party.

4. ID.; ID.; ID.; GOOD FAITH OF WORKERS IN STAGING STRIKE IN VIOLATION OF STRIKE
BAN, AND NO-STRIKE CLAUSE OF CBA AND LACK OF NOTICE-TO-STRIKE
CATEGORIZES ACTION AS PREMATURE. — Even on the assumption that the illegality of the
strike is predicated on its being a violation of the ban or prohibition of strikes in export-oriented
industries, lack of notice-to-strike, and as a violation of the no-strike clause of the CBA, still, the
automatic finding of the illegality of the strike finds no automotive support in the light of the
attendant circumstances. As this Court held in Cebu Portland Cement Co. vs. Cement Workers
Union, a strike staged by the workers, inspired by good faith, does not automatically make the
same illegal. In Ferrer vs. Court of Industrial Relations, the belief of the strikers that the
management was committing unfair labor practice was properly considered in declaring an
otherwise premature strike, not unlawful, and in affirming the order of the Labor Court for the
reinstatement without backwages of said employees. In the instant case, it is not disputed that,
indeed, the Company did not pay the salaries of the workers for one and a half mouths, more or
less. Such act of the Company broke the patience of the workers and those who depended on
them for support and daily subsistence. On the other hand, the act of the workers in demanding
a valid grievance for the payment of their salaries is inspired by their honest belief that the
Company was committing acts inimical to their interests relative to wages which, basically, is a
violation of the CBA existing between the parties. At the very least, respondent Minister of Labor
and Employment should have viewed the strike as premature following the cases of Cebu
Portland Cement Co., Ferrer and Shell Oil Workers Union. The ruling laid down in the three
aforecited cases was reiterated in Almira vs. B.F. Goodrich Phils., Inc., a 1974 case, that the
strike should have been viewed with a little less disapproval and even if declared illegal, need
not have been attended with such a drastic consequence as termination of employment
relationship. This is so because, according to the Court, of the security of tenure provision under
the Constitution.

5. ID.; ID.; ID.; INDIVIDUAL RESPONSIBILITY FOR SERIOUS ACTS OF VIOLENCE IN CASE
AT BAR. — In view however of the pronouncement in Shell Oil Workers' Union vs. Shell
company of the Phils., Ltd., supra, that if the existence of force (acts of violence) while the strike
lasts is not pervasive and widespread, nor consistently and deliberately resorted to as a matter
of policy, responsibility for serious acts of violence should be individual and not collective, We
deem it proper under the circumstances that the charges of serious acts of violence imputed
against the herein petitioners (10 workers) must be heard anew affording the petitioners all the
opportunity to air their side in accordance with the requirements of due process of law. Pending
further proceedings and/or hearing of the serious acts of violence imputed against the
petitioners, the Company should reinstate them to their former positions without loss of seniority
rights and other privileges.
||| (Bacus v. Ople, G.R. No. L-56856, [October 23, 1984], 217 PHIL 670-690)

Verily, respondent who was illegally dismissed from work is entitled to reinstatement
without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or
their monetary equivalent computed from the time his compensation was withheld from him
up to the time of his actual reinstatement. 8

However, the circumstances obtaining in this case do not warrant the reinstatement
of respondent. Aside from the fact that antagonism caused a severe strain in the parties'
employer-employee relationship, petitioner company has "completely ceased its tire
manufacturing and marketing operations effective November 11, 1994," as evidenced by its
Notice of Indefinite Suspension of Manufacturing Operations dated November 10, 1994 9 to
the Securities and Exchange Commission and its Application for Business Retirement dated
February 22, 1996 10 filed with the Business Permits & Licensing Office of the City of
Muntinlupa. Thus, a more equitable disposition would be an award of separation pay
equivalent to at least one month pay, or one month pay for every year of service, whichever
is higher, (with a fraction of at least six (6) months being considered as one (1) whole year),
11 in addition to his full backwages, allowances and other benefits. 12
||| (Philtread Tire & Rubber Corp. v. Vicente, G.R. No. 142759, [November 10, 2004], 484 PHIL
543-551)

Having been constructively dismissed, Escudero was correctly found entitled to backwages and
attorney's fees by the Labor Arbiter, the NLRC and the CA. Under Article 279 of the Labor
Code, as amended, employees who have been illegally terminated from employment are
entitled to the twin reliefs of reinstatement without loss of seniority rights and to the payment of
full back wages 41 corresponding to the period from their illegal dismissal up to actual
reinstatement. 42 Reinstatement is a restoration to the state from which one has been removed
or separated, 43 while the payment of backwages is a form of relief that restores the income
that was lost by reason of the unlawful dismissal. 44 Proper where reinstatement is not
advisable or feasible as when antagonism already caused a severe strain in the relationship
between the employer and the employee, 45 separation pay may also be awarded where, as
here,, reinstatement is no longer practical or in the best interest of the parties or when the
employee decides not to be reinstated anymore. 46 |||

(Tan Brothers Corp. of Basilan City v. Escudero, G.R. No. 188711, [July 3, 2013], 713 PHIL
392-405)

LABOR LAW; NATIONAL LABOR RELATIONS COMMISSION; LABOR ARBITERS,

AUTHORIZED TO DETERMINE NECESSITY OF HEARINGS. — Section 4, Rule V of the New
Rules of Procedure of the National Labor Relations Commission empowers labor arbiters to
further clarify factual matters even after the parties have submitted their position papers or
memoranda, thus: "Section 4. Determination of Necessity of Hearing. — Immediately after the
submission of the parties of their position papers/memoranda, the Labor Arbiter shall motu
propio determine whether there is need for a formal trial or hearing. At this stage, he may, at his
discretion and for the purpose of making such determination, ask clarificatory questions to
further elicit facts or information, including but not limited to the subpoena or relevant
documentary evidence, if any, from any party or witness." It is clear from the law that it is the
arbiters who are authorized to determine whether or not there is a necessity for conducting
formal hearings in cases brought before them for adjudication. Such determination is entitled to
great respect in the absence of arbitrariness. prcd

2. ID.; REINSTATEMENT; SHALL IMMEDIATELY BE EXECUTORY EVEN PENDING

APPEAL. — In the case at bench, both parties agreed to submit NLRC Case No. RAB-III-05-
5044-93 to Labor Arbiter Saludares on the basis of their position papers and replies, as well as
the documentary evidence annexed thereto. They are likewise of the view that public
respondent erred in ordering the case remanded for hearings and further reception of evidence.
They submit that there is ample evidence on record for public respondent to have decided on
the appeal, even with respect to the issue of illegal dismissal. Even the Solicitor General finds
public respondent's order for remand as constitutive of grave abuse of discretion. Anent the
issue of the stoppage of Calibot's and Duval's payroll reinstatement, there is no need to look
further than Article 223 of the Labor Code, as amended, which provides, in part: " . . . In any
event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar
as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein. . . ." Since the May 16, 1994 Resolution of public respondent
ordering the remand of the illegal dismissal case to the labor arbiter was issued in grave abuse
of discretion and must be set aside, it inescapably follows that the payroll reinstatement of the
two employees should not be stopped. prcd

||| (Coca-Cola Salesforce Union v. National Labor Relations Commission, G.R. No. 116637,
[April 21, 1995], 313 PHIL 612-619)

LABOR LAW; TERMINATION OF EMPLOYMENT; DISMISSAL WITHOUT DUE

PROCESS HELD ILLEGAL () |||