1.

Penaflor vs Outdoor Clothing, January 21, 2010

FACTS:
• Penaflor was hired as a probationary Human Resource Department Manager of Respondent Outdoor Clothing.
He was assigned two staff members.
• As Manager, he was expected to: (1) maintain quality and quantity of people needed by the company, (2)
maintain harmonious relationship between the employees and the management, and (3) represent the company
in labor cases/proceedings.
• During his employment, he designed and created the company (1) policy manual, (2) personnel handbook, (3)
job expectations, and (4) organizational set-up.
• According to Penaflor, the problem started when the company VP for operations (Edgar Lee) left the company
because of an alleged fight with the Chief Corporate Officer (Nathaniel Syfu). Because he was close to Lee,
Syfu singled him out.
• Several incidents led Penaflor to believe that he was being singled out:
• The company also began downsizing, so the two staff members of Penaflor were dismissed, leaving him to
work as a one-man department.
• When an Outdoor Clothing Employee (Lynn Padilla) suffered injuries due to a bombing incident, Penaflor
had to attend to her hospitalization which led him to work outside the office. He believed that he was
under official business.
• However, he later discovered that his salary for those six days were deducted since he allegedly failed to
submit his trip ticket. (Penaflor argues that the ticket was needed only when a company vehicle was used,
which was not the case here).
• When he came back from this field work on MARCH 13, 2000, he was informed that Syfu appointed
Nathaniel Buenaobra as the new HRD Manager. (Buenaobra was appointed on March 10, through a
memorandum)
• On MARCH 15, 2000, Penaflor submitted his resignation, believing that he had little choice in the matter.
• He then filed a complaint for illegal dismissal with the labor arbiter, claiming that he was constructively
dismissed. (Asked for reinstatement and payment of backwages, illegally deducted salaries, damages,
attorneys fees and other monetary claims)
• Outdoor clothing argues that Penaflor voluntarily resigned from his work. They argue that Penaflor continued
to work until his resignation as proved by a security report he prepared on March 13.
• LABOR ARBITER: Penaflor was illegally dismissed
• Outdoor clothing appealed to the NLRC.
• They argue that Penaflor gave his resignation on MARCH 1, 2000 because he saw no future in the
company which was in dire financial standing.
• That they only appointed Buenaobra to cover the position that Penaflor would soon vacate.
• The company also gave two new evidence to show that Penaflor was given notice of his unathorized
absences: (1) March 6 and (2) March 11 (absence without official leave memo).
• Penaflor contested the evidence, claiming that these were fabricated and was not presented to the labor arbiter.
He argues that nothing in the resignation letter indicated that it was submitted on March 1 and that he could
not be on a prolonged absence because his house was only a few meters from the office.
• NLRC: Overturned the labor arbiter and held that the resignation of Penaflor was not because of
discrimination/hostile treatment, but because of the dire financial situation of the company. That the company
was only exercising its management prerogative when it appointed Buenaobras to cover the vacancy left by
Penaflor.
• Penaflor filed a certiorari with the CA but it affirmed the NLRCs decisions
• Penaflor thus appealed with the SC arguing that

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 • He was FORCED to resign due to the demeaning work, the salary deduction and the appointment of
Buenaobra as the new HRD manager even before his resignation
• Outdoor clothing argues that:
• Penaflor VOLUNTARILY resigned from work.

ISSUE: W/N Penaflor filed his resignation before or after the appointment of Buenaobra as the HRD
manager (AFTER)
• If it was BEFORE, the appointment would then be simply done to cover the vacancy created.
• If it was AFTER, then Penaflor was constructively dismissed since the resignation was a response to the
appointment of another to a position that he still occupied.

HELD/RATIO:
1. Issue as to Rule 45 dealing only with legal issues as compared to the questions of facts of this case:
• The rule on legal issues is not absolute. It admits of exceptions. One of them being on labor law settings
wherein questions of fact can be considered when there is a conflict of factual findings between the labor
arbiter, the NLRC and the CA.
2. Issue as to when the resignation was made: (March 1 or March 15)
• SC: Penaflor did submit his resignation on MARCH 15, 2000.
• FIRST, the memoranda presented (March 1- appointment of Buenaobra and March 3 - Buenaobra
accepting the position), while dated, do not constitute conclusive evidence of their dates of preparation and
communication because (1) Penaflor was never informed of these even when he was directly concerned
(2) The recipients did not sign the memo. (There was no PROOF of SERVICE).
• SECOND, the memoranda were only presented to the NLRC on appeal, not before the labor arbiter.
(although not unheard of, there must still be a valid explanation to explain the irregularity which was
absent in this case).
• THIRD, the circumstances and other evidence support the claim of Penaflor such as:
• The company issued a Memo on March 10 to inform the office about the designation of Buenaobra.
This was signed by the recipients. It is thus consistent with the fact that Penaflor only knew of the
position on March 13 .
• Other than its own claim that the company was in severe financial problems, it never presented any
evidence to prove such allegation. - hence they were not able to prove the reason for its downsizing.
• Penaflor started working on Sept. 2, 1999 so that by March 1, 2000 his probationary status would have
ended. It seems unlikely that he would give his resignation on the same day that he would be
considered a regular employee which would entitle him to benefits if he were to be separated.
• THREE very basic labor law principles support this decision in favor of Penaflor:
1. In employee termination disputes, the employer bears the burden of proof to show that the dismissal
was for a just and valid cause.
2. Under Article 4 of the Labor Code - All doubts in the interpretation and implementation of the Labor
Code should be interpreted in favor of the workingman.
3. Significance of the employees reaction to the termination of his employment: is the complaint
against the employer merely a convenient AFTERTHOUGHT subsequent to an abandonment or a
voluntary resignation? - in this case, the fact that Penaflor sought immediate recourse to contest his
separation is not an act of a person that voluntarily resigned.

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2. Gandara vs NLRC, December 29, 1998
FACTS:
• Milagros Sy is the owner of Gandara Mill Supply. It is a small business enterprise composed of only two
employees, one of which is Silvestre Germano (Private Respondent).
• Germano was absent without notice several times during his employment: (Not sure - maybe this was
continuous since walang date yung second)
• FIRST, February 6, 1995 to February 11, 1995 - when his wife was about to deliver their baby and he
chose to be near her side.
• SECOND, (no date) - Germano was absent for two weeks without notice -
• When he came back after two weeks, he was told that someone was hired to take his place but that he was to
be re-admitted in June 1996.
• On February 27, 1995, Germano filed a case for illegal dismissal with the Department of Labor and
Employment (DOLE).
• Gandara Mill offered 5k as settlement but this was rejected by Germano.
• The Labor Arbiter directed the parties to submit their positions papers on or before April 28, 1995 (this was
eventually extended).
• Labor Arbiter Facundo Leda gave petitioner the last opportunity to submit their paper, otherwise their right to
be heard will be deemed waived.
• Despite of this, petitioner still failed to comply. Thus the labor arbiter decided based on the documents on file
and rendered a decision ordering Gandara to pay Germano 65K (separation pay, backwages, SLIP and
attorneys fee)
• On March 4, 1996, Petitioner appealed with the NLRC which dismissed the appeal for failure to post a case/
surety bond.
• The appeal was based on the argument that Gandara is a small business and they should be exempt from
posting a bond.

ISSUES: (1) W/N the NLRC acted with GADALEJ in dismissing the appeal and not giving the petitioner
a chance to prove that Germano was not illegally dismissed but was merely suspended (NO) , and (2) W/N
the NLRC acted with GADALEJ in awarding 65k to Germano, which amount petitioner assails as
excessive? (NO)

HELD/RATIO:
1. SC: Petitioner was afforded the chance to show that Germano was not illegally dismissed.
• In this case, the labor arbiter was lenient upon the petitioner when it extended the submission of its
positions papers atleast two times.
• On the last order, it declared that failure to provide for a position paper will be deemed a waiver of the
right to be heard. By the inaction of Petitioner, it was considered to have waived or forfeited such right.
• Discussion on LACHES: “failure or neglect for an unreasonable length of time to do that which by
exercising due diligence could or should have been done earlier. Unlike the statute of limitations, it is not
a mere question of time but is principally a question of inequity or unfairness or permitting a right or
claim to be enforced or asserted”
• LAWYER issue - the fact that the petitioner was not represented by a lawyer in all the proceedings was
due to its own negligence. Petitioner was represented by a non-lawyer (Flores) who failed to follow-up on
the case until the judgement was rendered.
2. SC: Germano was ILLEGALLY DISMISSED

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 • FIRST. While a prolonged absence without notice may be ground for dismissal, due process must still be
observed
• WenPhil Doctrine: where dismissal was not preceded by the twin requirement of NOTICE and
HEARING, the legality of the dismissal in question, is under heavy clouds and therefore ineffectual.
• SECOND. While it is not clear if Germano was really dismissed, it was also not clear that he will be
reinstated. Petitioner only said that he will be readmitted by June 1996.
• Under the Labor Code - No preventive suspension shall last longer than thirty (30) days. The
employer shall thereafter reinstate the worker to his former or substantially equivalent position or the
employer may extend the period of suspension provided that during the period of extension, he pays
the wages and other benefits due to the worker. In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer decides after completion of the
hearing to dismiss the worker.
• In this case, the suspension will last more than 30 days making it an illegal dismissal.
3. SC: Even granting that Germano’s absence affected greatly the operations of the business, his current
predicament should still be considered, making his dismissal unwarranted.
• Doctrine of Compassionate Justice - since Germano is the breadwinner of his family, the rigid rules of
procedure may be dispensed with to give room to compassion.
• The social justice policy mandates a compassionate attitude towards the working class in relation to its
management.
• The Constitution itself urges a moderation of the sanction that may be applied to an employee in the light
of the many disadvantages that weigh heavily on him.
4. SC: The appeal made by the petitioner, with the interval of almost three months, was not filed on time.
• While there is no fixed period to file an appeal under the instant petition, the requirement of
reasonableness must be followed.
• The Constitution provides that: All persons shall have the right to a speedy disposition of their cases before
all judicial, quasi-judicial and administrative bodies.
5. SC: The NLRC did not act with GADALEJ when it awarded 65K to Germano which is not at all excessive
under the facts and circumstances of the case.

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3. TSPIC Corporation vs TSPIC Employees Union, February 13, 2008
FACTS:
• TSPIC is a business engaged in designing, manufacturing, and marketing integrated circuits to serve the
communication, automotive, data processing and aerospace industries.
• Respondent TSPIC employees Union is the registered bargaining agent of the rank-and-file employees of
TSPIC.
• In 1999, the parties entered into a Collective Bargaining Unit (CBA) for the years 2000 to 2004.
• It included a provision on yearly salary increases (10% (2000) - 12% (2001) - 11% (2002) to all employees
(1) on regular status, and (2) within the bargaining unit.
• It also provided that employees who acquire regular employment within the year but after the effectivity of
the salary increase shall receive a proportionate part of the increase upon attainment of regular status. (1st
quarter - 100%, 2nd quarter - 75%, 3rd quarter - 50% and 4th quarter - 25%).
• Note: The employees are divided into two groups: Those who were already regular employees and those
probationary employees who attained regular employment.
• On October 6, 2000, the Regional Tripartite Wage and Productivity Board issued Wage Order No. 8 which
raised the daily minimum wage from PhP 223.50 to PhP 250 effective November 1, 2000.
• During this time, the second group of employees became regular so they received a 25% (4th quarter) of
the 10% (Year 2000) of their salaries.
• By January 2001, TSPIC implemented the new wage rate as mandated by the CBA (12% increase) - this
resulted to the first group receiving less wages.
• On January 19, 2001, the TSPIC’s Human Resources Department notified the employees that due to an error in
the payroll system, they were overpaid and the overpayment will be deducted from their salaries in a staggered
basis.
• The Union argues that there was no error and the deduction constituted diminution of pay.
• The parties agreed to undergo voluntary arbitration on the issue of whether the deduction constituted
diminution of pay.
• The arbitrator (Jimenez) held that the deduction made by the company violated Article 100 of the labor
code (Prohibition against elimination or diminution of benefits).
• The company filed an MR with was denied.
• It also filed a petition for review with the CA which dismissed the petition and affirmed the decision of the
arbitrator.
• It held that the computation allowing PhP 287 as daily wages to the newly regularized employees
conformed to Wage Order No. 8 and the CBA.

ISSUE: W/N the TSPIC’s decision to deduct the alleged overpayment from the salaries of the members of
the Union constitute diminution of benefits in violation of the Labor Code? (NO)

HELD/RATIO:
1. SC: According to the CBA, the wage/salary increases in 2001 and 2002 is deemed as compliance to future
wage orders AFTER WO no. 7.
• A CBA is the law between the parties and they are obliged to comply with its provisions. It refers to the
negotiated contract between a legitimate labor organization and the employer concerning wages, hours of
work and all other terms and conditions of employment in a bargaining unit.
• In this case, while the CBA is clear and unambiguous, the parties arrive at conflicting interpretations, with
the main conflict as to w/n the increase granted by WO no. 8 should be credited to the increase granted
under the CBA.
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 • TSPIC argues that the CBA provides that the salary/wage increase for 2001 shall be deemed inclusive
of the mandated minimum wage increase under future wage orders.
• The Union argues that this crediting provision is not applicable to the present case since at the time
WO No. 8 was issued, the probationary employees were not yet covered by the CBA.
• In this case, the court looked at the intention of the parties (Littera necat spiritus vivificat)
• The company granted the salary increase under the condition that any wage order made subsequent to
it shall be credited against the previously granted increase.
2. SC: The charging of the overpayments does not constitute diminution of benefits
• Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the
employees. There is diminution if (1) the benefit is founded on policy or has ripened into a practice over a
long period of time, (2) the practice is consistent and deliberate, (3) the practice is not due to error in the
construction or application of a doubtful or difficult question of law, and (4) the diminution or
discontinuance is done unilaterally by the employer.
• In this case, the overpayment was a result of an error. This was rectified immediately upon discovery.
• Based on jurisprudence (Globe-Mackay Cable case) an erroneously granted benefit may be withdrawn
without violating the prohibition against non-diminution of benefits.
• There is no vested right accrued to the employees.
3. SC: As a last word, the court adds that, in resolving disputes between labor and capital, fairness and justice
should always prevail.
• In the resolution of labor cases, we have always been guided by the State policy enshrined in the
Constitution: SOCIAL JUSTICE and protection of the working class.
• However, this does not mean that every dispute should be automatically decided in favor of labor. Justice
is to be granted to the deserving and dispensed in the light of the established facts and applicable law and
doctrine.

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4. Serrano vs NLRC, January 27, 2000
FACTS:
• Petitioner Ruben Serrano was hired by Isetann Department Store (Private Respondent) as a security checker to
apprehend shoplifters and prevent stealing of merchandise.
• He was initially hired on a contractual basis (1984) and eventually became a regular employee (1985). He
later on became head of the Security Checkers Section (1988).
• Sometime in 1991, Isetann decided to phase out its entire security section and engage the services of an
independent security agency, for cost cutting measures.
• Pursuant to this, Serrano was terminated from service on October 11, 1991.
• He then filed a complaint on December 3, 1991 for illegal dismissal, illegal layoff, unfair labor practice,
underpayment of wages, and nonpayment of salary and overtime pay.
• The issues presented before the labor arbiter were: (1) W/N there is a valid ground for dismissal, (2) W/N the
complainant is entitled to his monetary claims, and (3) W/N Isetann is guilty of unfair labor practice.
• LABOR ARBITER: Found Serrano to have been illegally dismissed.
• Isetann failed to establish that it had retrenched its security section to prevent or minimize losses.
• It failed to accord due process to Serrano.
• It failed to use reasonable standards in selecting employees whose employment would be terminated.
• It failed to show that Serrano and other employees in the security section were inefficient as to justify the
replacement by a security agency.
• Isetann appealed to the NLRC which reversed the decision of the Labor Arbiter. It held that:
• The phase-out of the security section and the hiring of an agency is an exercise by Isetann of a legitimate
business decision whose wisdom we do not intend to inquire upon.
• The term “retrenchment” is used in its plain and ordinary sense, which is to layoff or remove from one’s
job, regardless of the reason therefor.

ISSUE: W/N the hiring of an independent security agency to replace the security section is a valid ground
for the dismissal of the employees classed under the latter - YES, but notice requirement was not met,
BUT this does not make the dismissal void

HELD/RATIO:
1. SC: The termination of petitioner’s services was for an authorized cause = REDUNDANCY
• Under Art. 283 of the Labor Code, an employer may terminate the employment of any employee due to
several reasons, and this can be done by serving a written notice at least one month before the intended
date of termination.
• The employer may also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of operations of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this
Title, by serving a written notice on the, workers and the Department of Labor and Employment at least
one (1) month before the intended date thereof.
2. SC: However, in this case there was a violation of the notice requirement.
• In this case, Serrano was given a notice of termination on October 11, 1991, the same day that his services
were terminated.
• WenPhil Doctrine - The dismissal of an employee must be for just or authorized cause and after due
process. However, lack of notice does not make the dismissal/termination illegal. Only a fine is imposed
for violation of the notice requirement.

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3. SC: The lack of notice does not make the dismissal/termination null and void.
• There must be a balance between the right of the employee to notice before he is dismissed, and the right
of the employee to dismiss for any just cause.
• The remedy is to order the payment to the employee of full backwages from the time of his dismissal up to
the time that the court finds that his dismissal was for a just cause. But, otherwise, his dismissal must be
upheld and he should not be reinstated anymore.
• In this case, it only makes it ineffectual.
4. SC: There is a need to revisit the WenPhil Doctrine
• The imposition of a fine has not been effective in deterring the violations of the notice requirement. “It is
too insignificant, too niggardly and sometimes even too late” - Justice Panganiban.
5. SC: The violation of notice requirement is NOT a denial of due process
• Violation by the employer of the notice requirement is not considered a denial of due process:
1. The due process clause of the Constitution is a limitation on governmental powers. It does not apply
to the exercise of private power.
2. Requirement of notice and hearing under the Due process clause is different under the case of
termination of employment. Under the Due process clause, the person is given the opportunity to
answer the charges against him.This is not the case here. The purpose of notice is to give the
employee time to prepare for the eventual loss of his job and for the DOLE to determine whether the
termination is justified.
3. The employer cannot be expected to be an impartial judge of his own cause (grievance machinery).
6. SC: While the Constitution regards labor as a primary social economic force, it is also true that the law, in
protecting the rights of the laborer, authorizes neither oppression nor self-destruction of the employer.
• It is oppression to compel an employer to continue to employ someone when it is clearly against his
interests to do so.
7. SUMMARY:
• If the termination was JUST, then the employee should not be ordered reinstated even if there is a failure
to comply with the notice requirement. He must instead be granted separation pay. (art. 283)
• If there is NO JUST CAUSE, the employee should be reinstated. In either case, whether he is reinstates or
granted separation pay only, he should be paid FULL backwages if there is no notice.
• If the termination is JUST under Art 282, he should not be reinstated. However, he must be paid
backwages from the time of his termination until it is determined by the court that his termination is for a
just cause.

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5. Yrasuegi vs PAL, October 17, 2008
FACTS:
• Armando Yrasuegi was a former international flight steward of PAL. (5’8 with a large body frame).
• Under the Manual of PAL, the ideal weight for a man of his height and body structure is 166 pounds.
• However, Yrasuegi experienced weight problems sometime in 1984. He was advised to go on an extended
vacation leave to address the weight concerns.
• His weight problem recurred to he went on leave again. But when he returned, he weighed 209 pounds. He
was then requested to trim down and report for weight checks,
• Instead of trimming down, he started to gain weight (215 pounds) so his off-duty status was retained.
• He eventually stopped reporting for weight checks.
• He was warned about his refusal to report for weight checks but he ignored the directive.
• His last weight check was on July 30 1990 wherein he weighed 212 pounds. The next time that he followed up
on his case was in 1992.
• PAL served him a notice of administrative charge for violation of the weight requirements of the company.
• Petitioner answered and claimed that his violation was condoned by PAL due to its inaction. He adds that PAL
discriminated against him because other crew members similarly situated were treated differently.
• On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight,
and considering the leniency extended to him (5 years), his services were considered terminated effective
immediately.
• Petitioner filed a complaint for illegal dismissal against PAL
• LABOR ARBITER - Petitioner was illegally dismissed. While the weight standards are reasonable in view of
the nature of the job, it need not be complied with under the pain of dismissal. He could be transferred to other
positions where weight would not be a factor.
• NLRC - Affirmed the decision of the Labor Arbiter. It held that obesity is a disease in itself. Thus, there is no
intentional defiance on the part of petitioner.
• CA - Reversed the NLRC decision.
• The NLRC looked at the wrong considerations. The case is not an issued of wilfulness.
• The weight standards of PAL is a continuing qualification. Failure to adhere to it is a cause of dismissal
under the Labor Code (Art. 282(e)).
• Petitioner was dismissed because he repeatedly failed to meet the prescribed weight standards.

ISSUE/HELD/RATIO:
1. W/N Obesity can be a ground for dismissal under the labor code - YES
• Under the manual of PAL, the weight standards is a continuing qualification to keep the job. Hence, an
employee can be dismissed the moment he is unable to comply with this standard.
• Petitioner argues that obesity is a physical abnormality and/or illness. He presented the ff. cases:
• Nadura v. Benguet - Miner laid off from work because of asthma. - SC: Nadura is VERY different
from this case (1) it was not decided under the labor code, (2) issue on flight safety is absent etc.
• Bonnie Cook v. State of Rhode Island - Institutional attendant who weighed over 320 pounds. Being
morbidly obese is a form of handicap/disability under the Rehabilitation Act. SC: In this case,
petitioner is NOT morbidly obese. His weight must be read in context with his work as a flight
attendant.
2. W/N the petitioners dismissal for obesity can be predicated on the bona fide occupation qualification
(BFOQ) defense - YES

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 • Bona fide occupational qualification - Employment must not be limited to a particular sex/religion/national
origin UNLESS the employer can show that these are actual qualifications for performing the job.
• There is no need for a statute for the BFOQ to be justified:
1. The Constitution, the Labor Code, and the Magna Carta for Disable Persons contain provisions
similar to BFOQ.
• CONSTITUTION (1987), Art. XIII, Sec. 3. The State shall afford full protection to labor, local
and overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all. It shall guarantee the rights of all workers to self-organization,
collective bargaining and negotiations, and peaceful concerted activities, including the right to
strike in accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law. The State shall promote the principle
of shared responsibility between workers and employers and the preferential use of voluntary
modes in settling disputes, including conciliation, and shall enforce their mutual compliance
therewith to foster industrial peace. The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to expansion and growth.
• Labor Code - ART. 3. Declaration of Basic Policy. The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex, race or creed, and
regulate the relations between workers and employers. The State shall assure the rights of workers
to self-organization, collective bargaining, security of tenure, and just and humane conditions of
work.
• Magna Carta - SEC. 32. Discrimination of Employment. No entity, whether public or private shall
discriminate against a qualified disabled person by reason of disability in regard to job application
procedures, the hiring, promotion, or discharge of employees compensation, job training and other
terms, conditions and privileges of employment. The following constitute acts of discrimination:a)
Limiting, segregating or classifying a disabled job applicant in such a manner that adversely
affects his work opportunities; b) Using qualification standards, employment tests or other
selection criteria that screen out or tend to screen out a disabled person unless such standards, tests
or other selection criteria are shown to be related for the position in question and are consistent
with business necessity; ETC (See case for others)
2. Meiorin Test - determine whether an employment policy is justified: (a) the standard is adopted for a
purpose rationally connected to the performance of the job, (b) that the standard is reasonably
necessary. (etc). - Basically, BFOQ is valid if it is reasonably necessary for satisfactory job
performance.
• In this case, the business of PAL is air transportation and its primary objective is flight safety.
Flight attendants must be agile and strong to ensure the safety of the passengers.
• Petitioner is also estopped since the weight standards were known to him even before
employment.
3. W/N petitioner was unduly discriminated when he was dismissed while other overweight cabin
attendants were not - NO
• There is nothing on the records to support the finding of discriminatory treatment, aside from pointing out
other overweigh cabin attendants as well. He did not consider other factors that might be relevant such as
their ideal weights, the flights assigned to them etc.
4. W/N the CA erred when it brushed aside the claims for restatement and wages for being moot and
academic - NO
• The option to exercise actual reinstatement or payroll reinstatement belongs to the employer.
5. SC: However, petitioner is entitled to separation pay.
• Normally, a legally dismissed employee is not entitled to separation pay. But such is granted to a legally
dismissed employee as an act of social justice or based on equity.

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• In this case, the dismissal was (1) not for serious misconduct, and (2) does not reflect on the moral
character of the employee.
• Granted separation pay equivalent to 1/2 months pay for every year of service.

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6. PAL vs NLRC, 225 SCRA 301
FACTS:
• On March 15, 1985, PAL revised its 1966 Code of Discipline. As a result, some employees were subjected to
the disciplinary measures therein.
• On August 20, 1985, PALEA filed a complaint before the NLRC for unfair labor practices. They argue that:
• Copies of the code had been circulated but in limited numbers
• Being penal in nature, the code must conform to the requirement of sufficient publication
• The code was arbitrary, oppressive, and prejudicial to the rights of the employees.
• PAL filed a Motion to Dismiss asserting that it has the prerogative as an employer, to prescribe the rules and
regulations.
• The Labor Arbiter (Ortiguerra) held that there is no bad faith on the part of PAL and that no unfair labor
practice has been committed.
• However, PAL failed to prove that the new code was properly circulated.
• It ordered that all employees be furnished with the new code and to continue its discussion with PALEA
• NLRC - affirmed the decision of the labor arbiter but held that the new code should be reviewed and discussed
with the union.

ISSUE: W/N the formulation of the code is a shared responsibility of the employer and the employee - YES

HELD/RATIO:
1. SC: While it is true that when the code was revised on March 15, 1985, there was still no law which
mandated the sharing of responsibility between the employer and the employee. However, even without an
existing law, the exercise of managerial prerogative is NOT unlimited. (It was only on March 2, 1989 that
RA 6715 was passed explicitly requiring participation of workers in policy making).
• Furthermore, there is a difference between management prerogatives regarding business operations and
those which affect the rights of the employees. Those involving the latter must be done through proper
modes, such as proper dissemination of information.
• There must be transparency in managerial moves that affect the rights of the employees so as to attain a
harmonious relationship between labor and management.

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7. Brew Master vs NFL, April 17, 1997
FACTS:
• Complainant (Estrada) was employed by Brew Master as route helper in 1991.
• However, Estrada failed to appear for a period of one month, without notice/permission. (April-May 1993)
• The company sent him a memo to explain within 24 hours why no disciplinary action should be taken against
him.
• Estrada answered that his wife left him so he had to bring his children to Samar. That he was not able to call or
send notice because he had no money.
• The company found the explanation unsatisfactory so Estrada was issued a Notice of Termination.
• Estrada filed this complaint arguing that his dismissal was done without just cause. That, as a first offender, his
penalty is excessive.
• LABOR ARBITER: Dismissed the complaint for lack of merit.
• Citing the principle of managerial control - it is the employers prerogative to prescribe reasonable rules
and regulations to govern the conduct of his employees.
• Complainant appealed to the NLRC alleging that he never intended to abandon his work. That prolonged
absence does not mean abandonment, absent the concurrence of intent and other overt acts.
• NLRC: Modified the decision and held that the dismissal was invalid
• The dismissal is too severe considering that the complainant is a first offender.
• It is impossible for an employee to anticipate when he would be ill or when he would be compelled to
attend to a family problem or emergency.
• Petitioner company thus filed this special civil action for certiorari.
• OSG comment: Dismissal was too severe a penalty. His absences were justified.

ISSUE: W/N the dismissal was valid - NO

HELD/RATIO:
1. SC: The reason for his absence was justified, given the circumstances. The complainant had a full time job,
and when his wife left, there was no on to whom he could entrust his children. He believed that his best
recourse was to bring them back to their province.
• The lack of notice does not merit this severe penalty.
2. SC: The complainant is not guilty of abandonment
• Abandonment is a just and valid ground for dismissal, but it requires the deliberate, unjustified refusal of
the employee to resume work. There must be (a) a failure to work or absence without a valid reason, and
(b) a clear intention to sever the employer-employee relationship.
• These elements are not present here. The absence was justified and it is clear that by his actions, the
complainant never intended to sever the employer-employee relationship.

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8. International School Alliance vs Quisumbing, 333 SCRA 13
FACTS:
• International School is a domestic educational institution established for the dependents of foreign diplomatic
personnel and other temporary residents.
• The members of the faculty are divided into two: (1) the foreign hires, and (2) the local hires.
• The school uses four tests to determined which group you belong to: (1) What is one’s domicile?, (2)
Where is one’s home economy?, (3) To which country does one ow economic allegiance?, (4) Was the
individual hired abroad specifically to work in the School and was the School responsible for bringing the
individual to the PH? - if the answer to any of this is the Philippines, then the employee is a local hire;
otherwise, he/she is a foreign hire.
• The school grants foreign hires certain benefits not given to local hires:
• Housing, transportation, shipping costs, taxes, and home leave travel allowance
• They are also given 25% more in salary than local hires.
• The school justifies this on two significant economic disadvantages: (1) Disclocation factor, and (2) limited
tenure and argues that these are adaptive measures to remain competitive.
• These foreign hires would have to uproot themselves from their country and leave their family and friends
just to move to the PH to teach.
• They are also confronted with the issue on what to do after their tenure has ended.
• Because of this, the petitioner, a labor union and collective bargaining representative of the faculty members
contested the salary difference (25%).
• Since the parties failed to compromise, DOLE assumed jurisdiction. It resolved the issue in favor of the
school.
• The secretary held that the point-of-hire classification is valid for the distinction.
• Certain benefits must be afforded to foreign hires to entice them into rendering their services in the PH.

ISSUE: W/N the salary difference between the foreign hires and local hires are valid - NO

HELD/RATIO:
1. SC: The salary difference is discriminatory.
• No less than the Constitution provides that Congress must "give highest priority to the enactment of
measures that protect and enhance the right of all people to human dignity, reduce social, economic, and
political inequalities”.
• The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good
faith.”
• Even International law proscribes discrimination (UDHR, Convention of elimination of all forms of racial
discrimination etc).
• The Labor Code also provides that the State shall "ensure equal work opportunities regardless of sex, race
or creed."
2. SC: Salary as defined, means the reward for the rendering of services. While the court recognizes the need of
the school to attract foreign hires, it should not be uses as an enticement to the prejudice of the local hires.
• The point of hire classification is an invalid one. They perform the same services as foreign hires and they
should be paid the same. The faculty members enjoy the same position and perform equal work.

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 • The economic factors such as the dislocation factor and limited tenure are adequately compensated by
benefits accorded to them which are not enjoyed by local hires: housing, transportation, shipping costs,
taxes, and home leave travel allowances.
3. SC: The two groups do not belong to the same bargaining unit.
• A bargaining unit is a group of employees of a given employer, comprised of all or less than all of the
entire body of employees, consistent with equity to the employer indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining provisions of the law.”
• The factors in determining the appropriate collective bargaining unit are (1) the will of the employees
(Globe Doctrine); (2) affinity and unity of the employees' interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3)
prior collective bargaining history; and (4) similarity of employment status.
• In this case, the foreign hires have shown no indication that they want to be grouped with the local hires.
• In fact, the two groups were always treated separately given their difference in tenure and benefits.

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9. Price vs Innodata, September 30, 2008
FACTS:
• Innodata was a domestic corporation engaged in data encoding and data conversion.
• Petitioners (Price, Domingo, and Arbilera) were employed by the company as formatters.
• The parties entered into a “Contract of Employment for a Fixed Period” stipulating that the contract shall
be for a period of one year only.(Feb. 16, 1999 to Feb. 16, 2000).
• During their time of employment, the petitioners were assigned to handle jobs for various clients of the
company. When they were finished with one client, another is immediately assigned to them.
• On Feb. 16, 2000, the HR Manager of the company wrote the petitioners to inform them that it will the last day
of work for them due to their contract ending.
• Because of this, petitioners filed a complaint for illegal dismissal and damages against respondents.
• They argue that they should be considered regular employees since their positions as formatters were
necessary to the usual business of the company.
• They could not be considered as project based since their employment was not coterminous with any
project.
• Innodata argues that due to the wide range of services that they give, they were constrained to hire new
employees for a fixed period of one year. They add that:
• Petitioners were not illegally dismissed. Their employment just terminated pursuant to their contract.
• The petitioners were estopped from asserting the contrary since they knowingly entered int such contract
of employment.
• LABOR ARBITER: The termination was illegal for having no just or authorized cause.
• By the very nature of their work, petitioners should be considered as regular employees who were entitled
to security of tenure.
• NLRC: Overturned the decision and held that petitioners were NOT regular employees but were fixed-term
employees as stipulated in their contract.
• The determining factor of fixed-term contracts is not the duty of the employee but the day certain that the
parties agree to commence and terminate the employment relationship.
• CA: Sustained the ruling of the NLRC that the petitioners were not illegally dismissed.
• Although the court has declared that employees of Innodata working as data encoders and abstractors were
regular, this ruling does not apply to petitioners since they admitted entering into fixed-term contracts.
• Under these contracts, the period of employment is governing and not the nature thereof.

ISSUE: (1) W/N the fixed-term employment contracts were valid, (NO) and (2) W/N the petitioners were
illegally dismissed (YES)

HELD/RATIO:

1. SC: There were no valid fixed-term contract and the petitioners were regular employees that could not be
dismissed except for just or authorized cause.
• The employment status of an employee is defined and prescribed by LAW and not by what the parties
agree it should be.
• Under Article 280 of the labor code, an employment is deemed regular (1) when the employee has been
engaged to perform activities which are usually necessary or desirable in the usual business or trade of the
employer, regardless of the length of employment, and (2) those who were initially hired as casual

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 employees, but have rendered at least one year of service, whether continuous or broken, with respect to
the activity in which they are employed.
• The test is the reasonable connection between the activity performed by the employee, in relation to the
usual business or trade of the employer.
• In this case, the petitioners belong to the first type of regular employees. Their work as formatters is
necessary in the business or trade of Innodata (they organize data that are encoded so that clients/users can
easily understand)
2. SC: While the court recognizes the validity of fixed-term employment, this is the exception rather than the
general rule. It is valid only under certain circumstances.
• Examples: if the fixed -term is an essential and natural appurtenance such as positions of dean, assistant
dean, college secretary, principal and other administrative offices in educational institutions. - election of
certain company officials.
• In this case, the SC held that the circumstances surrounding the fixed-term contract show that it was only
meant to circumvent the petitioners’ right to security of tenure and are, therefore, invalid.
• These contracts are not only ambiguous, but also appeared to be tampered with since the contract states
that it became effective on Feb. 16 and the first day of work was on Feb. 17. The certificate of employment
also indicated the date of employment on Feb. 17. However, in several of the contracts, the original
beginning date of effectivity was crossed out and replaced with Sept. 6, 1990. (to show that they worked
there for less than a year)
• If the contracts were truly fixed-term, then a change in term or period is material and would constitute
a novation of the original contract.
• Furthermore, where a contract of employment is ambiguous, any ambiguity therein should be construed
strictly against the party who prepared it.
3. SC: The petitioners are not project employees
• Project employees are hired (1) for a specific project or undertaking, and wherein (2) the completion or
termination of such project as been determined at the time of the engagement of the employee.
• In this case, under the contracts, there was no mention of a specific project or undertaking.
• In fact, petitioners allegedly worked continuously for various clients of the company.
4. SC: Other provisions of the contract also show the total disregard for their security if tenure.
• Section 6.1 - if the company has no more need for the employee’s services, his contract may be pre-
terminated upon the giving of three days notice.
• Section 6.4 - the employee or the employer may pre-terminate the contract with or without cause, by
giving at least fifteen days notice.
• Under the Constitution (sec. 4, Art. XVI) it is the policy of the State to assure workers of security of
tenure. Based on this contract, petitioners have no right to expect security of tenure since they can be
terminated (1) upon completion of a project or (2) with or without just cause as long as there is a three day
notice.
5. SC: Considering that restatement is no longer possible since Innodata has ceased operations. The proper
award is separation pay equivalent to one month pay for every year of service, to be computed from the
commencement of their employment up to the closure of the company.
• Note: Corporate officers are, as a general rule, not personally liable for their official acts. An exception is
where terminations of employment are done with malice or in bad faith. - in this case there is an absence
of evidence hence the individual respondents are absolved from liability.

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10. Tirazona vs Phil. Eds, January 20, 2009
FACTS: (Some are from the 2008 case)
• Philippine EDS-Techno Services Inc. (PET) is a corporation registered in the PH and is engaged in the
business of designing automotive wiring harnesses for automobile manufacturers.
• Tirazona was employed on July 21, 1999 as Administrative Manager. She acted as the liaison between the
Japanese management and the Filipino staff.
• Sometime in 2002, a rank-and-file employee complained that Tirazona humiliated her while she was reporting
back to work after recuperating from tuberculosis. (She said that the employee still had the disease despite
having a medical clearance)
• The PET management sent a memorandum to Tirazona saying that her handling of the situation was less than
ideal.
• However, the counsel of Tirazona sent demand letters to the company giving them 5 days to give her payment
of 2M in damages, injured feelings, serious anxiety and besmirched reputation.
• The management rejected her demand letter
• In the earlier case (2008) the NLRC and the CA both held that petitioner was a managerial employee which
held a position of trust and confidence. That through her actions (improper handling of employee/demand
letter for money/ and admittedly reading a confidential letter addressed to the company officers containing the
legal opinion of the counsel of PET regarding her case) she was validly terminated in the ground that she
wilfully breached the trust and confidence reposed in her by her employer.
• Petitioner now filed a Motion for Leave to file a Second Motion for Reconsideration - she contends that the
court failed to consider the length of her service to PET in their decision.

ISSUE: W/N petitioner should be awarded separation pay and retirement benefits - NO

HELD/RATIO:
1. SC: A second MR is a prohibited pleading.
• Under Sec. 2 Rule 52 of the RoC, no second motion for reconsideration of a judgement or final resolution
by the same party shall be entertained.
• An exception is given to extraordinary persuasive reasons and only after an express leave is first obtained.
• In this case, there is no extraordinary persuasive reason to allow the second MR.
2. SC: Tirazona is NOT entitled to separation pay
• If an employee is dismissed for any of the causes under Article 282, he/she is not entitled to separation
pay.
• ART. 282. Termination by employer. - An employer may terminate an employment for any of the following
causes:
• a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;
• b. Gross and habitual neglect by the employee of his duties;
• c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly
authorized representative;
• d. Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representative; and
• e. Other causes analogous to the foregoing.
• Only those unjustly dismissed are entitled to retirement benefits and other privileges including restatement
and backwages.
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 • Although in certain cases, separation pay is allowed as a measure of social justice only in those instances
where the employee is validly dismissed for causes other than serious misconduct or those reflecting on
his moral character.
• However, in this case, the actions of petitioner reflect an arrogant and hostile character. Her attitude
towards her employer was clearly inconsistent with her position of trust and confidence. The company
was, therefore, justified in terminating her employment for loss of trust and confidence and no separation
pay is needed.
3. SC: This court cannot consider the length of service since her allegations have been inconsistent
• Petitioner first claimed that she has been employed by PET for 26 years and that the court must give due
course to this length of stay.
• However, she retracted this and stated that her length of employment has been for 8 years, more or less.
• But the court still finds the statements inaccurate. Petitioner was employed on July 19, 1999 and was
terminated on April 22, 2002. Given this time frame, she was only employed for 2 years and 9 months.

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