PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET
AL., Respondents.
[G.R. No. 47800. December 2, 1940.]
LAUREL, J.:
FACTS:
Maximo Calalang, in his capacity as a private citizen and as a
taxpayer of Manila, brought before this court this petition for a
writ of prohibition against the respondents.
The National Traffic Commission, in its resolution, resolved to
recommend to the Director of Public Works and to the
Secretary of Public Works and Communications that animal-
drawn vehicles be prohibited from passing along specified
areas from a period of one year from the date of the opening
of the Colgante Bridge to traffic. The Chairman of the National
Traffic Commission recommended to the Director of Public
Works the adoption of the measure proposed in the resolution
aforementioned, in pursuance of the provisions of
Commonwealth Act No. 548 which authorizes said Director of
Public Works, with the approval of the Secretary of Public
Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on
national roads. As a consequence of such enforcement, all
animal-drawn vehicles are not allowed to pass and pick up
passengers in the places above-mentioned to the detriment
not only of their owners but of the riding public as well.
Thus, it is contended by the petitioner that Commonwealth
Act No. 548 by which the Director of Public Works, with the
approval of the Secretary of Public Works and
Communications, is authorized to promulgate rules and
regulations for the regulation and control of the use of and
traffic on national roads and streets is unconstitutional because
it constitutes an undue delegation of legislative power. The
petitioner further contends that the rules and regulations
promulgated by the respondents pursuant to the provisions of
Commonwealth Act No. 548 constitute an unlawful interference
with legitimate business or trade and abridge the right to
personal liberty and freedom of locomotion. The petitioner
finally avers that the rules and regulations complained of
infringe upon the constitutional precept regarding the
promotion of social justice to insure the well-being and
economic security of all the people.
ISSUE:
Whether CA No. 48 is unconstitutional on the grounds invoked
by herein petitioner.
RATIO:
No. First, to promulgate rules and regulations on the use of
national roads and to determine when and how long a national
road should be closed to traffic, in view of the condition of the
road or the traffic thereon and the requirements of public
convenience and interest, is an administrative function which
cannot be directly discharged by the National Assembly. It
must depend on the discretion of some other government
official to whom is confided the duty of determining whether
the proper occasion exists for executing the law. Second,
Commonwealth Act No. 548 was passed by the National
Assembly in the exercise of the paramount police power of the
state. Public welfare, then, lies at the bottom of the enactment
of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and
with business and occupations. Persons and property may be
subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the state
(U.S. v. Gomer Jesus, 31 Phil., 218).
To this fundamental aim of our Government the rights of the
individual are subordinated. Lastly, Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but
1
the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated.
Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures
calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-
constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principle of
salus populi est suprema lex. Social justice, therefore, must be
founded on the recognition of the necessity of
interdependence among divers and diverse units of a society
and of the protection that should be equally and evenly
extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount
objective of the state of promoting the health, comfort, and
quiet of all persons, and of bringing about "the greatest good
to the greatest number."
RULING:
In view of the foregoing, the writ of prohibition prayed for is
hereby denied, with costs against the petitioner. So ordered.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and
Employment, and TOMAS D. ACHACOSO, as
Administrator of the Philippine Overseas Employment
Administration, respondents.
G.R. No. 81958 June 30, 1988
SARMIENTO, J.:
FACTS:
The petitioner, Philippine Association of Service Exporters, Inc.,
a firm "engaged principally in the recruitment of Filipino
workers, male and female, for overseas placement," challenges
the Constitutional validity of Department Order No. 1, Series of
1988, of the Department of Labor and Employment, in the
character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and
prohibition. Specifically, the measure is assailed for
"discrimination against males or females;" that it "does not
apply to all Filipino workers but only to domestic helpers and
females with similar skills;" and that it is violative of the right
to travel. It is held likewise to be an invalid exercise of the
lawmaking power, police power being legislative, and not
executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of
Article XIII, of the Constitution, providing for worker
participation "in policy and decision-making processes affecting
their rights and benefits as may be provided by
law." Department Order No. 1, it is contended, was passed in
the absence of prior consultations. It is claimed, finally, to be
in violation of the Charter's non-impairment clause, in addition
to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.
ISSUE:
Whether D.O. No. 1 is unconstitutional.
RATIO:
No. As a general rule, official acts enjoy a presumed
validity. In the absence of clear and convincing evidence to
the contrary, the presumption logically stands.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The petitioner has shown no satisfactory reason why
the contested measure should be nullified. There is no
question that Department Order No. 1 applies only to "female
contract workers," but it does not thereby make an undue
discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution does not
import a perfect Identity of rights among all men and women.
It admits of classifications, provided that (1) such
classifications rest on substantial distinctions; (2) they are
germane to the purposes of the law; (3) they are not confined
to existing conditions; and (4) they apply equally to all
members of the same class. The Court is satisfied that the
classification made-the preference for female workers — rests
on substantial distinctions.
The consequence the deployment ban has on the right to
travel does not impair the right. The right to travel is subject,
among other things, to the requirements of "public safety," "as
may be provided by law." Department Order No. 1 is a valid
implementation of the Labor Code, in particular, its basic policy
to "afford protection to labor," pursuant to the respondent
Department of Labor's rule-making authority vested in it by the
Labor Code. Neither is there merit in the contention that
Department Order No. 1 constitutes an invalid exercise of
legislative power. It is true that police power is the domain of
the legislature, but it does not mean that such an authority
may not be lawfully delegated. As we have mentioned, the
Labor Code itself vests the Department of Labor and
Employment with rulemaking powers in the enforcement
whereof.
The petitioner's reliance on the Constitutional guaranty of
worker participation "in policy and decision-making processes
affecting their rights and benefits" is not well-taken. The right
granted by this provision, again, must submit to the demands
and necessities of the State's power of regulation. Lastly, the
non-impairment clause of the Constitution, invoked by the
petitioner, must yield to the loftier purposes targeted by the
Government. Freedom of contract and enterprise, like all other
freedoms, is not free from restrictions, more so in this
jurisdiction, where laissez faire has never been fully accepted
as a controlling economic way of life.
RULING: WHEREFORE, the petition is DISMISSED. No costs.
C. ALCANTARA & SONS, INC., Petitioner,
vs.
COURT OF APPEALS
G.R. No. 179220
ABAD, J.:
FACTS:
C. Alcantara & Sons, Inc.is a domestic corporation engaged in
the manufacture and processing of plywood. Nagkahiusang
Mamumuo as Alsons-SPFL is the exclusive bargaining agent of
the Company‘s rank and file employees. The other parties to
these cases are the Union officers and their striking members.
The Company and the Union entered into a CBA that bound
them to hold no strike and no lockout in the course of its life.
At some point the parties began negotiating the economic
provisions of their CBA but this ended in a deadlock, prompting
the Union to file a notice of strike. After efforts at conciliation
by the DOLE failed, the Union conducted a strike vote that
resulted in an overwhelming majority of its members favoring
it. The Union reported the strike vote to the DOLE and, after
the observance of the mandatory cooling-off period, went on
strike.
The Company, on the other hand, filed a petition with the
Regional Arbitration Board to declare the Union‘s strike
illegal, citing its violation of the no strike, no lockout, provision
of their CBA. For their part, the Union, its officers, and its
affected members filed against the Company a counterclaim
for unfair labor practices, illegal dismissal, and damages.
2
The Labor Arbiter rendered a decision, declaring the Union‘s
strike illegal for violating the CBA‘s no strike, no lockout,
provision. The NLRC affirmed said decision insofar as the
former declared the strike illegal, ordered the Union officers
terminated, and directed them to pay damages to the
company. However, the NLRC ruled that the Union members
involved, who were identified in the proceedings held in the
case, should also be terminated for having committed
prohibited and illegal acts. The CA rendered a
decision annulling the NLRC decision and reinstating that of
the Labor Arbiter.
ISSUES:
(1) Whether or not the Union staged an illegal strike; and
(2) Assuming the strike to be illegal, whether or not the
impleaded Union members committed illegal acts during the
strike, justifying their termination from employment;
RATIO:
Yes. A strike may be regarded as invalid although the labor
union has complied with the strict requirements for staging
one as provided in Article 263 of the Labor Code when the
same is held contrary to an existing agreement, such as a no
strike clause or conclusive arbitration clause. Here, the CBA
between the parties contained a "no strike, no lockout"
provision that enjoined both the Union and the Company from
resorting to the use of economic weapons available to them
under the law and to instead take recourse to voluntary
arbitration in settling their disputes. No law or public policy
prohibits the Union and the Company from mutually waiving
the strike and lockout maces available to them to give way to
voluntary arbitration.
Since the Union‘s strike has been declared illegal, the Union
officers can, in accordance with law be terminated from
employment for their actions. They cannot be shielded from
the coverage of Article 264 of the Labor Code since the Union
appointed them as such and placed them in positions of
leadership and power over the men in their respective work
units.
Accordingly, the impleaded Union members‘ termination are
justified as the grounds for termination under Article 264 are
based on prohibited acts that employees could commit during
a strike.
RULING:
WHEREFORE, the Court DENIES the petition of the
Nagkahiusang Mamumuo sa Alsons-SPFL and its officers and
members in G.R. 155135 for lack of merit, and REVERSES and
SETS ASIDE the decision of the Court of Appeals in CA-G.R. SP
59604 dated March 20, 2002. The Court, on the other hand,
GRANTS the petition of C. Alcantara & Sons, Inc. in G.R.
155109 and REINSTATES the decision of the National Labor
Relations Commission in NLRC CA M-004996-99 dated
November 8, 1999.
Further, the Court PARTIALLY GRANTS the petition of the
Nagkahiusang Mamumuo sa Alsons-SPFL and their dismissed
members in G.R. 179220 and ORDERS C. Alcantara & Sons,
Inc. to pay the terminated Union members backwages for four
(4) months and nine (9) days and separation pays equivalent
to one-half month salary for every year of service to the
company up to the date of their termination, with interest of
12% per annum from the time this decision becomes final and
executory until such backwages and separation pays are paid.
The Court DENIES all other claims.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
St. MARY'S ACADEMY of Dipolog City, Petitioner,
vs.
TERESITA PALACIO, MARIGEN CALIBOD, LEVIE
LAQUIO, ELAINE MARIE SANTANDER, ELIZA SAILE,
AND MA. DOLORES MONTEDERAMOS, Respondents.
G.R. No. 164913. September 8, 2010
DEL CASTILLO, J.:
FACTS:
Petitioner hired respondents as classroom teachers
and as guidance counselor. In separate letters, however,
petitioner informed them that their re-application for school
year 2000-2001 could not be accepted because they failed to
pass the Licensure Examination for Teachers. According to
petitioner, as non-board passers, respondents could not
continue practicing their teaching profession pursuant to the
DECS Memorandum No. 10, S. 1998 which requires incumbent
teachers to register as professional teachers pursuant to
Section 27 of RA No. 7836, otherwise known as the Philippine
Teachers Professionalization Act of 1994.
Respondents filed a complaint contesting their
termination as highly irregular and premature. They admitted
that they are indeed non-board passers, however, they also
argued that their security of tenure could not simply be
trampled upon for their failure to register with the PRC or to
pass the LET prior to the deadline set by RA 7836. Further, as
the aforesaid law provides for exceptions to the taking of
examination, they opined that their outright dismissal was
illegal because some of them possessed civil service eligibilities
and special permits to teach. Furthermore, petitioner‘s
retention and acceptance of other teachers who do not also
possess the required eligibility showed evident bad faith in
terminating respondents.
Petitioner insists that it has the right to terminate
respondents‘ services as early as March 2000 without waiting
for the September 19, 2000 deadline set by law for
respondents to register as professional teachers due to the
need to fix the school organization prior to the applicable
school year. Petitioner justifies respondents‘ termination by
advancing that it would be difficult to hire licensed teachers in
the middle of the school year as respondents‘ replacements.
The Labor Arbiter adjudged petitioner guilty of illegal
dismissal because it terminated the services of the respondents
prior to the deadline fixed by PRC for the registration of
teachers as professional teachers, in violation of the doctrine
regarding the prospective application of laws. NLRC and the CA
both affirmed said decision.
ISSUE:
Whether respondents‘ premature termination on the ground of
failure to pass the LET violative of their right to security of
tenure.
RATIO:
Yes. Pursuant to RA 7836, the PRC formulated certain rules
and regulations relative to the registration of teachers and
their continued practice of the teaching profession. Specific
periods and deadlines were fixed within which incumbent
teachers must register as professional teachers in consonance
with the essential purpose of the law in promoting good quality
education by ensuring that those who practice the teaching
profession are duly licensed and are registered as professional
teachers. Clearly, respondents, in the case at bar, had until
September 19, 2000 to comply with the mandatory
requirement to register as professional teachers.
It is incumbent upon this Court to afford full protection to
labor. Thus, while we take cognizance of the employer‘s right
to protect its interest, the same should be exercised in a
manner which does not infringe on the workers‘ right to
security of tenure. "Under the policy of social justice, the law
3
bends over backward to accommodate the interests of the
working class on the humane justification that those with less
privilege in life should have more in law."
RULING:
WHEREFORE, the petition is partially GRANTED. The Decision
of the Court of Appeals dated September 24, 2003 in CA-G.R.
SP No. 67691 finding respondents Teresita Palacio, Marigen
Calibod, Levie Laquio, Elaine Marie Santander and Ma. Dolores
Montederamos to have been illegally dismissed and awarding
them separation pay and limited backwages is AFFIRMED. As
regards respondent Eliza Saile, we find her termination valid
and legal. Consequently, the awards of separation pay and
limited backwages in her favor are DELETED.
SO ORDERED.
MATERNITY CHILDREN'S HOSPITAL, represented by
ANTERA L. DORADO, President, petitioner,
vs.
THE HONORABLE SECRETARY OF LABOR AND THE
REGIONAL DIRECTOR OF LABOR, REGION
X, respondents.
G.R. No. 78909. June 30, 1989
MEDIALDEA, J.:
FACTS:
Petitioner is a semi-government hospital. Ten employees of the
petitioner employed in different capacities/positions filed a
complaint with the Office of the Regional Director of Labor and
Employment for underpayment of their salaries and ECOLAS.
The Regional Director directed two of his Labor Standard and
Welfare Officers to inspect the records of the petitioner to
ascertain the truth of the allegations in the complaints. Based
on this inspection report and recommendation, the Regional
Director issued an Order directing the payment representing
underpayment of wages and ECOLAs to all the petitioner's
employees. The Secretary of Labor affirmed the said decision.
Petitioner contended that based on the rulings in the Ong vs.
Parel and the Zambales Base Metals, Inc. vs. The Minister of
Labor cases, a Regional Director is precluded from adjudicating
money claims on the ground that this is an exclusive function
of the Labor Arbiter under Article 217 of the present Code.
ISSUE:
Whether or not the Regional Director had jurisdiction over the
case and if so, the extent of coverage of any award that should
be forthcoming, arising from his visitorial and enforcement
powers under Article 128 of the Labor Code.
RATIO:
Yes. This is a labor standards case, and is governed by Art.
128-b of the Labor Code, as amended by E.O. No. 111. Under
the present rules, a Regional Director exercises both visitorial
and enforcement power over labor standards cases, and is
therefore empowered to adjudicate money
claims, provided there still exists an employer-employee
relationship, and the findings of the regional office is not
contested by the employer concerned.
The Regional Director exercised visitorial rights only under then
Article 127 of the Code. With the promulgation of PD 850,
Regional Directors were given enforcement powers, in
addition to visitorial powers. EO 111 authorizes a Regional
Director to order compliance by an employer with labor
standards provisions of the Labor Code and other legislation.
Social justice legislation, to be truly meaningful and rewarding
to our workers, must not be hampered in its application by
long-winded arbitration and litigation. Rights must be asserted
and benefits received with the least inconvenience. Labor laws
are meant to promote, not defeat, social justice.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
ACCORDINGLY, this petition should be dismissed, as it is
hereby DISMISSED, as regards all persons still employed in the
Hospital at the time of the filing of the complaint, but
GRANTED as regards those employees no longer employed at
that time.
SO ORDERED.
PHILIPPINE AIRLINES, INC., petitioner,
vs.
ALBERTO SANTOS, JR., HOUDIEL MAGADIA, GILBERT
ANTONIO, REGINO DURAN, PHILIPPINE AIRLINES
EMPLOYEES ASSOCIATION, and THE NATIONAL LABOR
RELATIONS COMMISSION, respondents.
G.R. No. 77875 February 4, 1993
REGALADO, J.:
FACTS:
Individual respondents are all Port Stewards of Catering Sub-
Department, Passenger Services Department of petitioner. On
various occasions, several deductions were made from their
salary. The deductions represented losses of inventoried items
charged to them for mishandling of company properties.
Private respondents filed a formal grievance to their manager
who resolved the grievance by denying the petition of
individual respondents and adopted the position that inventory
of bonded goods is part of their duty as catering service
personnel. Thereafter, the individual respondents refused to
conduct inventory works and were eventually suspended.
A complaint for illegal suspension was filed but was dismissed
by the Labor Arbiter. Private respondents appealed the decision
of the labor arbiter to respondent commission which rendered
the aforequoted decision setting aside the labor arbiter's order
of dismissal.
Petitioner submits that since the grievance machinery was
established for both labor and management as a vehicle to
thresh out whatever problems may arise in the course of their
relationship, every employee is duty bound to present the
matter before management and give the latter an opportunity
to impose whatever corrective measure is possible. Citing
Section 1, Article IV of the CBA, petitioner further argues that
respondent employees have the obligation, just as
management has, to settle all labor disputes through friendly
negotiations.
ISSUE:
Whether respondent NLRC has unlawfully neglected the
performance of an act which the law specifically enjoins it to
perform as a duty or has otherwise unlawfully excluded
petitioner from the exercise of a right to which it is entitled
pursuant to the PAL-PALEA Collective Bargaining Agreement
RATIO:
No. The manager‘s failure to act on the matter may have been
due to petitioner's inadvertence, but it is clearly too much of
an injustice if the employees be made to bear the dire effects
thereof. Much as the latter were willing to discuss their
grievance with their employer, the latter closed the door to this
possibility by not assigning someone else to look into the
matter during the manager‘s absence. Thus, private
respondents should not be faulted for believing that the effects
of the CBA in their favor had already stepped into the
controversy.
If the Court were to follow petitioner's line of reasoning, it
would be easy for management to delay the resolution of labor
problems, the complaints of the workers in particular, and hide
under the cloak of its officers being "on leave" to avoid being
caught by the 5-day deadline under the CBA. If this should be
4
allowed, the workingmen will suffer great injustice for they will
necessarily be at the mercy of their employer. That could not
have been the intendment of the pertinent provision of the
CBA, much less the benevolent policy underlying our labor
laws.
It is a fact that the sympathy of the Court is on the
side of the laboring classes, not only because the Constitution
imposes such sympathy, but because of the one-sided relation
between labor and capital. The constitutional mandate for the
promotion of labor is as explicit as it is demanding. The
purpose is to place the workingman on an equal plane with
management — with all its power and influence — in
negotiating for the advancement of his interests and the
defense of his rights. Under the policy of social justice, the law
bends over backward to accommodate the interests of the
working class on the humane justification that those with less
privileges in life should have more privileges in law.
RULING:
ACCORDINGLY, on the foregoing premises, the instant petition
is hereby DENIED and the assailed decision of respondent
National Labor Relations Commission is AFFIRMED. This
judgment is immediately executory. SO ORDERED.
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC., Respondents.
G.R. No. 167614 March 24, 2009
AUSTRIA-MARTINEZ, J.:
FACTS:
Petitioner was hired by Gallant Maritime Services, Inc. and
Marlow Navigation Co., Ltd. (respondents) under a POEA-
approved Contract of Employment for 12 months. Petitioner
was constrained to accept a downgraded employment contract
for the position of Second Officer upon the assurance and
representation of respondents that he would be promoted.
Respondents did not deliver on their promise. Hence, petitioner
refused to stay on as Second Officer and was repatriated to
the Philippines. He had served only two (2) months and seven
(7) days of his contract. Petitioner then filed with the Labor
Arbiter (LA) a Complaint against respondents for constructive
dismissal and for payment of his money claims
The LA rendered a Decision declaring the dismissal of
petitioner illegal and awarding him monetary benefits. In
awarding so, the LA based his computation on the salary
period of three months only -- rather than the entire unexpired
portion of nine months and 23 days of petitioner's employment
contract - applying the last clause in the 5th paragraph of
Section 10, R.A. No. 8042. The NLRC modified the decision by
correcting the LA‘s computation. The CA affirmed the NLRC
ruling on the reduction of the applicable salary rate. However,
it skirted the constitutional issue raised by petitioner.
Petitioner contends that the subject clause is unconstitutional
because it unduly impairs the freedom of OFWs to negotiate
for and stipulate in their overseas employment contracts a
determinate employment period and a fixed salary package. It
also impinges on the equal protection clause, for it treats
OFWs differently from local Filipino workers (local workers) by
putting a cap on the amount of lump-sum salary to which
OFWs are entitled in case of illegal dismissal, while setting no
limit to the same monetary award for local workers when their
dismissal is declared illegal; that the disparate treatment is not
reasonable as there is no substantial distinction between the
two groups; and that it defeats Section 18, Article II of the
Constitution which guarantees the protection of the rights and
welfare of all Filipino workers, whether deployed locally or
overseas. Lastly, petitioner claims that the subject clause
violates the due process clause, for it deprives him of the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
salaries and other emoluments he is entitled to under his fixed-
period employment contract.
The OSG emphasizes that OFWs and local workers differ in
terms of the nature of their employment, such that their rights
to monetary benefits must necessarily be treated differently.
Hence, the OSG posits that there are rights and privileges
exclusive to local workers, but not available to OFWs; that
these peculiarities make for a reasonable and valid basis for
the differentiated treatment under the subject clause of the
money claims of OFWs who are illegally dismissed. Thus, the
provision does not violate the equal protection clause nor
Section 18, Article II of the Constitution. Lastly, the OSG
defends the rationale behind the subject clause as a police
power measure adopted to mitigate the solidary liability of
placement agencies for this "redounds to the benefit of the
migrant workers whose welfare the government seeks to
promote.
ISSUE:
Whether the last clause in the 5th paragraph of Section 10,
R.A. No. 8042 is unconstitutional.
RATIO:
No. Petitioner's claim that the subject clause unduly
interferes with the stipulations in his contract on the term of
his employment and the fixed salary package he will receive is
not tenable. The subject clause may not be declared
unconstitutional on the ground that it impinges on the
impairment clause, for the law was enacted in the exercise of
the police power of the State to regulate a business, profession
or calling with the noble end in view of ensuring respect for
the dignity and well-being of OFWs wherever they may be
employed. Police power legislations adopted by the State to
promote the health, morals, peace, education, good order,
safety, and general welfare of the people are generally
applicable not only to future contracts but even to those
already in existence, for all private contracts must yield to the
superior and legitimate measures taken by the State to
promote public welfare.
As to the issue of substantial distinction, to be valid,
the classification must comply with these requirements: 1) it is
based on substantial distinctions; 2) it is germane to the
purposes of the law; 3) it is not limited to existing conditions
only; and 4) it applies equally to all members of the class.
Under Section 10 of R.A. No. 8042, a worker
dismissed from overseas employment without just, valid or
authorized cause is entitled to his salary for the unexpired
portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less. The
subject clause classifies OFWs into two categories. The first
category includes OFWs with fixed-period employment
contracts of less than one year; in case of illegal dismissal,
they are entitled to their salaries for the entire unexpired
portion of their contract. The second category consists of
OFWs with fixed-period employment contracts of one year or
more; in case of illegal dismissal, they are entitled to monetary
award equivalent to only 3 months of the unexpired portion of
their contracts.
Viewed in that light, the subject clause creates a sub-
layer of discrimination among OFWs whose contract periods
are for more than one year: those who are illegally dismissed
with less than one year left in their contracts shall be entitled
to their salaries for the entire unexpired portion thereof, while
those who are illegally dismissed with one year or more
remaining in their contracts shall be covered by the subject
clause, and their monetary benefits limited to their salaries for
three months only. In fine, the Government has failed to
discharge its burden of proving the existence of a compelling
state interest that would justify the perpetuation of the
discrimination against OFWs under the subject clause. The
subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason that
5
the clause violates not just petitioner's right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
RULING:
WHEREFORE, the Court GRANTS the Petition. The
subject clause "or for three months for every year of the
unexpired term, whichever is less" in the 5th paragraph of
Section 10 of Republic Act No. 8042
is DECLAREDUNCONSTITUTIONAL; and the December 8, 2004
Decision and April 1, 2005 Resolution of the Court of Appeals
are MODIFIED to the effect that petitioner is AWARDED his
salaries for the entire unexpired portion of his employment
contract consisting of nine months and 23 days computed at
the rate of US$1,400.00 per month.
No costs.
SO ORDERED.
ANG TIBAY, represented by TORIBIO TEODORO,
manager and propietor, and
NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and
NATIONAL LABOR UNION, INC., respondents.
G.R. No. L-46496 February 27, 1940
LAUREL, J.:
FACTS:
Ang Tibay was a manufacturer of rubber slippers. There was a
shortage of leather soles, and it was necessary to temporarily
lay off members of the National Labor Union. According to the
Union however, this was merely a scheme to systematically
terminate the employees from work, and that the shortage of
soles is unsupported. It claims that Ang Tibay is guilty of
unjust labor practice because the owner, Teodoro, is
discriminating against the National Labor Union, and unjustly
favoring the National Workers Brotherhood, which was
allegedly sympathetic to the employer. The Court of Industrial
Relation decided the case and elevated it to the Supreme
Court, but a motion for new trial was raised by the NLU. But
the Ang Tibay filed a motion for opposing the said motion.
The motion for new trial was raised because according to NLU,
there are documents that are so inaccessible to them that even
with the exercise of due diligence they could not be expected
to have obtained them and offered as evidence in the Court of
Industrial Relations. That these documents, which NLU have
now attached as exhibits are of such far-reaching importance
and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered therein.
ISSUE:
Whether or not the Union was denied due process by the CIR
RATIO DECIDENDI:
To begin with the issue before us is to realize the functions of
the CIR. The CIR is a special court whose functions are
specifically stated in the law of its creation which is the
Commonwealth Act No. 103). It is more an administrative
board than a part of the integrated judicial system of the
nation. It is not intended to be a mere receptive organ of the
government. Unlike a court of justice which is essentially
passive, acting only when its jurisdiction is invoked and
deciding only cases that are presented to it by the parties
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
litigant, the function of the CIR, as will appear from perusal of
its organic law is more active, affirmative and dynamic. It not
only exercises judicial or quasi-judicial functions in the
determination of disputes between employers and employees
but its functions are far more comprehensive and extensive. It
has jurisdiction over the entire Philippines, to consider,
investigate, decide, and settle any question, matter
controversy or disputes arising between, and/ or affecting
employers and employees or laborers, and landlords and
tenants or farm-laborers, and regulates the relations between
them, subject to, and in accordance with, the provisions of CA
103.
SC had the occasion to point out that the CIR is not narrowly
constrained by technical rules of procedure, and equity and
substantial merits of the case, without regard to technicalities
or legal forms and shall not be bound by any technical rules of
legal evidence but may inform its mind in such manner as it
may deem just and equitable.
The fact, however, that the CIR may be said to be free from
rigidity of certain procedural requirements does not mean that
it can in justiciable cases coming before it, entirely ignore or
disregard the fundamental and essential requirements of due
process in trials and investigations of an administrative
character. There are cardinal primary rights which must be
respected even in proceedings of this character:
(1) the right to a hearing, which includes the right to present
one's cause and submit evidence in support thereof;
(2) The tribunal must consider the evidence presented;
(3) The decision must have something to support itself;
(4) The evidence must be substantial;
(5) The decision must be based on the evidence presented at
the hearing; or at least contained in the record and disclosed
to the parties affected;
(6) The tribunal or body or any of its judges must act on its
own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate;
(7) The Board or body should, in all controversial questions,
render its decision in such manner that the parties to the
proceeding can know the various Issue involved, and the
reason for the decision rendered.
RULING:
Accordingly, the motion for a new trial should be and the same
is hereby granted, and the entire record of this case shall be
remanded to the Court of Industrial Relations, with instruction
that it reopen the case, receive all such evidence as may be
relevant and otherwise proceed in accordance with the
requirements set forth hereinabove. So ordered.
6
FEDERICO M. LEDESMA, JR., Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC-
SECOND DIVISION) HONS. RAUL T. AQUINO,
VICTORIANO R. CALAYCAY and ANGELITA A. GACUTAN
ARE THE COMMISSIONERS, PHILIPPINE NAUTICAL
TRAINING INC., ATTY. HERNANI FABIA, RICKY TY,
PABLO MANOLO, C. DE LEON and TREENA CUEVA,
Respondents.
G.R. No. 174585 October 19, 2007
CHICO-NAZARIO, J.:
FACTS:
On 4 December 1998, petitioner was employed as a
bus/service driver by the private respondent on probationary
basis, as evidenced by his appointment. As such, he was
required to report at private respondent‘s training site in
Dasmariñas, Cavite, under the direct supervision of its site
administrator, Pablo Manolo de Leon (de Leon). On 11
November 2000, petitioner filed a complaint against de Leon
for allegedly abusing his authority as site administrator by
using the private respondent‘s vehicles and other facilities for
personal ends. In the same complaint, petitioner also accused
de Leon of immoral conduct allegedly carried out within the
private respondent‘s premises.
On 27 November 2000, de Leon filed a written report against
the petitioner addressed to private respondent‘s Vice-President
for Administration, Ricky Ty (Ty), citing his suspected drug
use.
In view of de Leon‘s report, private respondent‘s Human
Resource Manager, Trina Cueva (HR Manager Cueva), on 29
November 2000, served a copy of a Notice to petitioner
requiring him to explain within 24 hours why no disciplinary
action should be imposed on him.
On 3 December 2000, petitioner filed a complaint for illegal
dismissal against private respondent before the Labor Arbiter.
In his Position Paper,7 petitioner averred that in view of the
complaint he filed against de Leon for his abusive conduct as
site administrator, the latter retaliated by falsely accusing
petitioner as a drug user. VP for Administration Ty, however,
instead of verifying the veracity of de Leon‘s report, readily
believed his allegations and together with HR Manager Cueva,
verbally dismissed petitioner from service on 29 November
2000.
For its part, private respondent countered that petitioner was
never dismissed from employment but merely served a Notice
to Explain why no disciplinary action should be filed against
him in view of his superior‘s report that he was suspected of
using illegal drugs. Instead of filing an answer to the said
notice, however, petitioner prematurely lodged a complaint for
illegal dismissal against private respondent before the Labor
Arbiter.
ISSUE:
Whether or not the petitioner was illegally dismissed by the
private respondent?
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RATIO DECIDENDI:
Well-entrenched is the principle that in order to establish a
case before judicial and quasi-administrative bodies, it is
necessary that allegations must be supported by substantial
evidence. Substantial evidence is more than a mere scintilla. It
means such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
In the present case, there is hardly any evidence on record so
as to meet the quantum of evidence required, i.e., substantial
evidence. Petitioner‘s claim of illegal dismissal is supported by
no other than his own bare, uncorroborated and, thus, self-
serving allegations, which are also incoherent, inconsistent and
contradictory.
While this Court is not unmindful of the rule that in cases of
illegal dismissal, the employer bears the burden of proof to
prove that the termination was for a valid or authorized cause
in the case at bar, however, the facts and the evidence did not
establish a prima facie case that the petitioner was dismissed
from employment.31 Before the private respondent must bear
the burden of proving that the dismissal was legal, petitioner
must first establish by substantial evidence the fact of his
dismissal from service. Logically, if there is no dismissal, then
there can be no question as to the legality or illegality thereof.
―The rule is that one who alleges a fact has the burden of
proving it; thus, petitioners were burdened to prove their
allegation that respondents dismissed them from their
employment. It must be stressed that the evidence to prove
this fact must be clear, positive and convincing. The rule that
the employer bears the burden of proof in illegal dismissal
cases finds no application here because the respondents deny
having dismissed the petitioners.‖ (Machica v. Roosevelt
Services Center, Inc)
It is true that the Constitution affords full protection to labor,
and that in light of this Constitutional mandate, we must be
vigilant in striking down any attempt of the management to
exploit or oppress the working class. However, it does not
mean that we are bound to uphold the working class in every
labor dispute brought before this Court for our resolution.
The law in protecting the rights of the employees, authorizes
neither oppression nor self-destruction of the employer. It
should be made clear that when the law tilts the scales of
justice in favor of labor, it is in recognition of the inherent
economic inequality between labor and management. The
intent is to balance the scales of justice; to put the two parties
on relatively equal positions. There may be cases where the
circumstances warrant favoring labor over the interests of
management but never should the scale be so tilted if the
result is an injustice to the employer. Justitia nemini neganda
est -- justice is to be denied to none.
RULING:
WHEREFORE, premises considered, the instant Petition is
DENIED. The Court of Appeals Decision dated 28 May 2005
and its Resolution dated 7 September 2006 in CA-G.R. SP No.
79724 are hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
7
LUZ G. CRISTOBAL, PETITIONER,
VS.
EMPLOYEES' COMPENSATION COMMISSION AND
GOVERNMENT SERVICE INSURANCE SYSTEM
(NATIONAL SCIENCE DEVELOPMENT BOARD);
RESPONDENTS.
G.R. NO. L-49280 APRIL 30, 1980
MAKASIAR, J.:
FACTS:
The deceased, Fortunato S. Cristobal was employed as
Supervising Information Officer 11 of the National Science
Development Board (NSDB for short) based in Bicutan, Taguig,
Rizal. His original appointment was dated February 26, 1964
(p. 16, ECC rec.). On April 8, 1976, he developed loose bowel
movement which later worsened and his excrement was
marked with fresh blood. Self-administered medications were
made but symptoms persisted until April 22, 1976 when he
was brought to the Hospital of Infant Jesus and was there
treated by Dr. Willie Lagdameo, who diagnosed his illness as
rectal malignancy. On May 28, 1976, he was discharged with
improved conditions but just one year thereafter, he was again
confined at the UST Hospital for the same ailment. A second
operation became necessary because of the recurrence of
malignancy in the pelvis. Despite earnest medical efforts, he
succumbed to his illness on May 27, 1977
The petitioner herein, as the decedent's widow and
beneficiary, filed with the Government Service Insurance
System (GSIS for short), a claim for income (death) benefits
under Presidential Decree No. 626, as amended. The said
claim was denied by the GSIS and in a subsequent request for
reconsideration, the System reiterated its decision
The petitioner herein, as the decedent's widow and
beneficiary, filed with the Government Service Insurance
System (GSIS for short), a claim for income (death) benefits
under Presidential Decree No. 626, as amended. The said
claim was denied by the GSIS and in a subsequent request for
reconsideration, the System reiterated its decision
ISSUE:
Whether or not the family of the deceased is entitled to the
benefits under PD 626
RATIO DECIDENDI:
In the instant case, it is evident that rectal cancer is one of
those borderline cases. Like, it is clear that the purpose of the
resolution is to extend the applicability of the provisions of P.D.
626, thereby affording a greater number of employees the
opportunity to avail of the benefits under the law. This is in
consonance with the avowed policy of the State, as mandated
by the Constitution and embodied in the New Labor Code, to
give maximum aid and protection to labor. The Employees'
Compensation Commission, like the defunct Court of Industrial
Relations and the Workmen's Compensation Commission, is
under obligation at all times to give meaning and substance to
the constitutional guarantees in favor of the working man,
more specially, the social justice guarantee; for otherwise,
these guarantees would be merely "a lot of meaningless
patter."
From the foregoing statements, it is palpable that the
respondent ECC recognizes, as it is duty bound to, the policy of
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the State to afford maximum aid and protection to labor.
Therefore, to require the petitioner to show the actual causes
or factors which led to the decendent's rectal malignancy
would not be consistent with this liberal interpretation. It is of
universal acceptance that practically all kinds of cancer belong
to the class of clinical diseases whose exact etiology, cause or
origin, is unknown. It is in this regard that the evidence
submitted by the petitioner deserves serious consideration.
RULING:
WHEREFORE, THE DECISION OF RESPONDENT EMPLOYEES'
COMPENSATION COMMISSION IS HEREBY SET ASIDE AND
THE RESPONDENT GSIS IS HEREBY DIRECTED
1. TO PAY THE PETITIONER THE SUM OF TWELVE
THOUSAND (P12,000.00) PESOS AS DEATH BENEFITS;
2. TO REIMBURSE PETITIONER MEDICAL, SURGICAL
AND HOSPITAL EXPENSES DULY SUPPORTED BY PROPER
RECEIPTS;
3. TO PAY PETITIONER THE SUM OF SEVEN HUNDRED
(P700.00) PESOS AS FUNERAL EXPENSES; AND
4. TO PAY THE PETITIONER ATTORNEY'S FEES
EQUIVALENT TO TEN (10%) PERCENT OF THE DEATH
BENEFITS.
SO ORDERED.
ERNESTO G. YMBONG, Petitioner,
vs.
ABS-CBN BROADCASTING CORPORATION, VENERANDA
SY AND DANTE LUZON, Respondents.
G.R. No. 184885 March 7, 2012
VILLARAMA, JR., J.:
FACTS:
Petitioner Ernesto G. Ymbong started working for ABS-CBN
Broadcasting Corporation (ABS-CBN) in 1993 at its regional
station in Cebu as a television talent, co-anchoring Hoy Gising
and TV Patrol Cebu. His stint in ABS-CBN later extended to
radio when ABS-CBN Cebu launched its AM station DYAB in
1995 where he worked as drama and voice talent, spinner,
scriptwriter and public affairs program anchor.
Like Ymbong, Leandro Patalinghug also worked for ABS-CBN
Cebu. Starting 1995, he worked as talent, director and
scriptwriter for various radio programs aired over DYAB.
On January 1, 1996, the ABS-CBN Head Office in Manila issued
Policy No. HR-ER-016 or the ―Policy on Employees Seeking
Public Office.‖ The pertinent portions read:
1. Any employee who intends to run for any public
office position, must file his/her letter of resignation, at least
thirty (30) days prior to the official filing of the certificate of
candidacy either for national or local election.
3. Further, any employee who intends to join a political
group/party or even with no political affiliation but who intends
to openly and aggressively campaign for a candidate or group
of candidates (e.g. publicly speaking/endorsing candidate,
recruiting campaign workers, etc.) must file a request for leave
of absence subject to management‘s approval. For this
8
particular reason, the employee should file the leave request at
least thirty (30) days prior to the start of the planned leave
period.
Because of the impending May 1998 elections and based on
his immediate recollection of the policy at that time, Dante
Luzon, Assistant Station Manager of DYAB issued the following
memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any
employee/talent who wants to run for any position in the
coming election will have to file a leave of absence the
moment he/she files his/her certificate of candidacy.
The services rendered by the concerned employee/talent to
this company will then be temporarily suspended for the entire
campaign/election period.
For strict compliance.
After the issuance of the March 25, 1998 Memorandum,
Ymbong got in touch with Luzon. Luzon claims that Ymbong
approached him and told him that he would leave radio for a
couple of months because he will campaign for the
administration ticket. It was only after the elections that they
found out that Ymbong actually ran for public office himself at
the eleventh hour. Ymbong, on the other hand, claims that in
accordance with the March 25, 1998 Memorandum, he
informed Luzon through a letter that he would take a few
months leave of absence from March 8, 1998 to May 18, 1998
since he was running for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and
advised him that he will run as councilor for Naga, Cebu.
According to Luzon, he clarified to Patalinghug that he will be
considered resigned and not just on leave once he files a
certificate of candidacy.
Later, Ymbong and Patalinghug both tried to come back to
ABS-CBN Cebu. According to Luzon, he informed them that
they cannot work there anymore because of company policy.
This was stressed even in subsequent meetings and they were
told that the company was not allowing any exceptions. ABS-
CBN, however, agreed out of pure liberality to give them a
chance to wind up their participation in the radio drama,
Nagbabagang Langit, since it was rating well and to avoid an
abrupt ending. The agreed winding-up, however, dragged on
for so long prompting Luzon to issue to Ymbong the
memorandum dated September 14, 1998 automatically
terminating them.
ISSUE:
1. whether Policy No. HR-ER-016 is valid
2. whether the March 25, 1998 Memorandum issued by Luzon
superseded Policy No. HR-ER-016
3. whether Ymbong, by seeking an elective post, is deemed to
have resigned and not dismissed by ABS-CBN.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
HELD:
1.ABS-CBN had a valid justification for Policy No. HR-ER-016.
Its rationale is embodied in the policy itself, to wit:
RATIONALE:
ABS-CBN BROADCASTING CORPORATION strongly believes
that it is to the best interest of the company to continuously
remain apolitical. While it encourages and supports its
employees to have greater political awareness and for them to
exercise their right to suffrage, the company, however, prefers
to remain politically independent and unattached to any
political individual or entity.
Therefore, employees who [intend] to run for public office or
accept political appointment should resign from their positions,
in order to protect the company from any public
misconceptions. To preserve its objectivity, neutrality and
credibility, the company reiterates the following policy
guidelines for strict implementation.
We have consistently held that so long as a company‘s
management prerogatives are exercised in good faith for the
advancement of the employer‘s interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this
Court will uphold them. In the instant case, ABS-CBN validly
justified the implementation of Policy No. HR-ER-016. It is well
within its rights to ensure that it maintains its objectivity and
credibility and freeing itself from any appearance of impartiality
so that the confidence of the viewing and listening public in it
will not be in any way eroded. Even as the law is solicitous of
the welfare of the employees, it must also protect the right of
an employer to exercise what are clearly management
prerogatives. The free will of management to conduct its own
business affairs to achieve its purpose cannot be denied.
It is worth noting that such exercise of management
prerogative has earned a stamp of approval from no less than
our Congress itself when on February 12, 2001, it enacted
Republic Act No. 9006, otherwise known as the ―Fair Election
Act.‖ Section 6.6 thereof reads:
6.6. Any mass media columnist, commentator, announcer,
reporter, on-air correspondent or personality who is a
candidate for any elective public office or is a campaign
volunteer for or employed or retained in any capacity by any
candidate or political party shall be deemed resigned, if so
required by their employer, or shall take a leave of absence
from his/her work as such during the campaign period:
Provided, That any media practitioner who is an official of a
political party or a member of the campaign staff of a
candidate or political party shall not use his/her time or space
to favor any candidate or political party. [Emphasis and
underscoring supplied.]
2.The CA correctly ruled that though Luzon, as Assistant
Station Manager for Radio of ABS-CBN, has policy-making
powers in relation to his principal task of administering the
network‘s radio station in the Cebu region, the exercise of such
power should be in accord with the general rules and
regulations imposed by the ABS-CBN Head Office to its
employees. Clearly, the March 25, 1998 Memorandum issued
by Luzon which only requires employees to go on leave if they
intend to run for any elective position is in absolute
contradiction with Policy No. HR-ER-016 issued by the ABS-
CBN Head Office in Manila which requires the resignation, not
9
only the filing of a leave of absence, of any employee who
intends to run for public office. Having been issued beyond
the scope of his authority, the March 25, 1998 Memorandum is
therefore void and did not supersede Policy No. HR-ER-016.
Also worth noting is that Luzon in his Sworn Statement
admitted the inaccuracy of his recollection of the company
policy when he issued the March 25, 1998 Memorandum and
stated therein that upon double-checking of the exact text of
the policy statement and subsequent confirmation with the
ABS-CBN Head Office in Manila, he learned that the policy
required resignation for those who will actually run in elections
because the company wanted to maintain its independence.
Since the officer who himself issued the subject memorandum
acknowledged that it is not in harmony with the Policy issued
by the upper management, there is no reason for it to be a
source of right for Ymbong.
3. As Policy No. HR-ER-016 is the subsisting company policy
and not Luzon‘s March 25, 1998 Memorandum, Ymbong is
deemed resigned when he ran for councilor.
We find no merit in Ymbong‘s argument that ―[his] automatic
termination x x x was a blatant [disregard] of [his] right to due
process‖ as he was ―never asked to explain why he did not
tender his resignation before he ran for public office as
mandated by [the subject company policy].‖ Ymbong‘s overt
act of running for councilor of Lapu-Lapu City is tantamount to
resignation on his part. He was separated from ABS-CBN not
because he was dismissed but because he resigned. Since
there was no termination to speak of, the requirement of due
process in dismissal cases cannot be applied to Ymbong.
Thus, ABS-CBN is not duty-bound to ask him to explain why he
did not tender his resignation before he ran for public office as
mandated by the subject company policy.
Ruling:
WHEREFORE, the petition for review on certiorari is DENIED
for lack of merit.
With costs against petitioner.
SO ORDERED.
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and
PEDRO A. TECSON, petitioners,
vs.
GLAXO WELLCOME PHILIPPINES, INC., Respondent.
G.R. No. 162994 September 17, 2004
TINGA, J.:
FACTS:
Tecson was hired by Glaxo as a medical representative on Oct.
24, 1995. Contract of employment signed by Tecson stipulates,
among others, that he agrees to study and abide by the
existing company rules; to disclose to management any
existing future relationship by consanguinity or affinity with co-
employees or employees with competing drug companies and
should management find that such relationship poses a
prossible conflict of interest, to resign from the company.
Company's Code of Employee Conduct provides the same with
stipulation that management may transfer the employee to
another department in a non-counterchecking position or
preparation for employment outside of the company after 6
months.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Tecson was initially assigned to market Glaxo's products in the
Camarines Sur-Camarines Norte area and entered into a
romantic relationship with Betsy, an employee of Astra, Glaxo's
competition. Before getting married, Tecson's District Manager
reminded him several times of the conflict of interest but
marriage took place in Sept. 1998. In Jan. 1999, Tecson's
superiors informed him of conflict of intrest. Tecson asked for
time to comply with the condition (that either he or Betsy
resign from their respective positions). Unable to comply with
condition, Glaxo transferred Tecson to the Butuan-Surigao
City-Agusan del Sur sales area. After his request against
transfer was denied, Tecson brought the matter to Glaxo's
Grievance Committee and while pending, he continued to act
as medical representative in the Camarines Sur-Camarines
Norte sales area. On Nov. 15, 2000, the National Conciliation
and Mediation Board ruled that Glaxo's policy was valid.
ISSUE:
Whether or not the policy of a pharmaceutical company
prohibiting its employees from marrying employees of any
competitor company is valid
RATIO DECIDENDI:
On Equal Protection
Glaxo has a right to guard its trade secrets, manufacturing
formulas, marketing strategies, and other confidential
programs and information from competitors. The prohibition
against pesonal or marital relationships with employees of
competitor companies upon Glaxo's employees is reasonable
under the circumstances because relationships of that nature
might compromise the interests of the company. That Glaxo
possesses the right to protect its economic interest cannot be
denied.
It is the settled principle that the commands of the equal
protection clause are addressed only to the state or those
acting under color of its authority. Corollarily, it has been held
in a long array of US Supreme Court decisions that the equal
protection clause erects to shield against merely privately
conduct, however, discriminatory or wrongful.
The company actually enforced the policy after repeated
requests to the employee to comply with the policy. Indeed
the application of the policy was made in an impartial and
even-handed manner, with due regard for the lot of the
employee.
On Constructive Dismissal
Constructive dismissal is defined as a quitting, an involuntary
resignation resorted to when continued employment becomes
impossible, unreasonable or unlikely; when there is demotion
in rank, or diminution in pay; or when a clear discrimination,
insensibility, or disdain by an employer becomes unbearable to
the employee. None of these conditions are present in the
instant case.
RULING:
WHEREFORE, the Petition is DENIED for lack of merit. Costs
against petitioners.
SO ORDERED.
10
BRICCIO "Ricky" A. POLLO, Petitioner,
vs.
CHAIRPERSON KARINA CONSTANTINO-DAVID,
DIRECTOR IV RACQUEL DE GUZMAN BUENSALIDA,
DIRECTOR IV LYDIA A. CASTILLO, DIRECTOR III
ENGELBERT ANTHONY D. UNITE AND THE CIVIL
SERVICE COMMISSION, Respondents.
G.R. No. 181881 October 18, 2011
VILLARAMA, JR., J.:
FACTS:
CSC Chairperson Karina David received a document from an
anonymous source, making her aware that there is a corrupt
official in the Commission. She then formed personnel and
directed them to back up all the files of the computers found
therein.
David found, in Bricio Pollo, petitioner, legal pleading or
documents that are related to administrative cases and were
for on the behalf of parties who were facing charges. David
inferred that he was willfully aiding their adverse interests and
it was a practice that he pursued regularly.
Pollo argued that he was not even a lawyer to pursue such
acts. He also asserted that the CSC conducted a fishing
expedition and his right to privacy was violated and that the
source of the complaint was anonymous. The CSC charged
Pollo in violation of RA 6713. After some motions filed to the
CSC, he filed his motion to the CA wherein he was ordered to
be dismissed of his governmental duties. The CA ruled that the
search was legal because in their capacity as employers, the
government agencies could validly conduct search and seizure
in the governmental workplace without meeting the ―probable
cause‖ or warrant requirement for search and seizure.
ISSUE:
Whether there was illegal search.
RATIO DECIDENDI:
The SC ruled in favor of the CSC. Basing their decision on
other cases, the SC asked whether Pollo has a reasonable
expectation of privacy in his office and computer files and was
the search reasonable in its inception and scope.
On regards the first inquiry, the SC found that he had no
actual expectation of privacy on his work computer. He did not
have a separate office space nor did he use a password for his
computer. He would have visitors which he let them use his
computer. The CSC also implemented a policy that its
employees on notice that they have no expectation of privacy
in anything on their office computers, and that the CSC may
monitor their use. This implies that on-the-spot inspections
may be done to ensure that the computer resources were used
only for such legitimate business purposes.
On the second inquiry, the SC said that the search Pollo's files
were conducted in connection with investigation of work-
related misconduct prompted by an anonymous letter-
complaint. A search by a government employer of an
employee‘s office is justified at inception when there are
reasonable grounds for suspecting that it will turn up evidence
that the employee is guilty of work-related misconduct.
Posted 15th August 2014 by Vinson Gabato
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
WHEREFORE, the petition for review on certiorari is DENIED.
The Decision dated October 11, 2007 and Resolution dated
February 29, 2008 of the Court of Appeals in CA-G.R. SP No.
98224 are AFFIRMED
MANSION PRINTING CENTER and CLEMENT CHENG,
Petitioners,
vs.
DIOSDADO BITARA, JR. Respondent.
G.R. No. 168120 January 25, 2012
PEREZ, J.:
FACTS:
Petitioners engaged the services of respondent as a helper
(kargador). Respondent was later promoted as the companys
sole driver tasked to pick-up raw materials for the printing
business, collect account receivables and deliver the products
to the clients within the delivery schedules.
Petitioners aver that the timely delivery of the products to the
clients is one of the foremost considerations material to the
operation of the business.It being so, they closely monitored
the attendance of respondent. They noted his habitual
tardiness and absenteeism.
Thus, petitioners issued a Memorandumrequiring respondent
to submit a written explanation why no administrative sanction
should be imposed on him for his habitual tardiness.
Despite respondents undertaking to report on time, however,
he continued to disregard attendance policies.
Consequently, Davis Cheng, General Manager of the company
and son of petitioner Cheng, issued another
Memorandum(Notice to Explain) requiring respondent to
explain why his services should not be terminated. He
personally handed the Notice to Explain to respondent but the
latter, after reading the directive, refused to acknowledge
receipt thereof.He did not submit any explanation and,
thereafter, never reported for work.
Davis Cheng personally served another Memorandum(Notice of
Termination) upon him informing him that the company found
him grossly negligent of his duties, for which reason, his
services were terminated.
On even date, respondent met with the management
requesting for reconsideration of his termination from the
service. However, after hearing his position, the management
decided to implement the Memorandum. Nevertheless, the
management, out of generosity, offered respondent financial
assistance in the amount ofP6,110.00 equivalent to his one
month salary. Respondent demanded that he be given the
amount equivalent to two (2) months salary but the
management declined as it believed it would, in effect, reward
respondent for being negligent of his duties.
Respondent filed a complaintfor illegal dismissal against the
petitioners before the Labor Arbiter.
Labor Arbiter dismissed the complaint for lack of merit.
On appeal to the National Labor Relations Commission, the
findings of the Labor Arbiter was AFFIRMEDen toto.
11
Before the Court of Appeals, respondent sought the annulment
of the Commissions Resolution on the ground that they were
rendered with grave abuse of discretion and/or without or in
excess of jurisdiction.
The Court of Appeals found for the respondent and reversed
the findings of the Commission.
ISSUE:
Whether or not respondent is illegally dismissed?
RATIO DECIDENDI:
In order to validly dismiss an employee, the employer is
required to observe both substantive and procedural aspects
the termination of employment must be based on a just or
authorized cause of dismissal and the dismissal must be
effected after due notice and hearing.
We, therefore, agree with the Labor Arbiters findings, to wit:
The imputed absence and tardiness of the complainant are
documented. He faltered on his attendance 38 times of the 66
working days. His last absences on 11, 13, 14, 15 and 16
March 2000 were undertaken without even notice/permission
from management. These attendance delinquencies may be
characterized as habitual and are sufficient justifications to
terminate the complainants employment.
On this score,Valiao v. Court of Appealsis instructive:
xxx It bears stressing that petitioners absences and tardiness
were not isolated incidents but manifested a pattern of
habituality. xxx The totality of infractions or the number of
violations committed during the period of employment shall be
considered in determining the penalty to be imposed upon an
erring employee. The offenses committed by him should not
be taken singly and separately but in their totality. Fitness for
continued employment cannot be compartmentalized into tight
little cubicles of aspects of character, conduct, and ability
separate and independent of each other.
InValiao,we definedgross negligenceas want of care in the
performance of ones dutiesandhabitual neglectas repeated
failure to perform ones duties for a period of time, depending
upon the circumstances.51 These are not overly technical
terms, which, in the first place, are expressly sanctioned by the
Labor Code of the Philippines, to wit:
ART. 282.Termination by employer.- An employer may
terminate an employment for any of the following causes:
(a) xxx
(b)Gross and habitual neglect by the employee of his duties;
xxx
Clearly, even in the absence of a written company rule defining
gross and habitual neglect of duties, respondents omissions
qualify as such warranting his dismissal from the service.
We cannot simply tolerate injustice to employers if only to
protect the welfare of undeserving employees. As aptly put by
then Associate Justice Leonardo A. Quisumbing:
Needless to say, so irresponsible an employee like petitioner
does not deserve a place in the workplace, and it is within the
managements prerogative xxx to terminate his employment.
Even as the law is solicitous of the welfare of employees, it
must also protect the rights of an employer to exercise what
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
are clearly management prerogatives. As long as the
companys exercise of those rights and prerogative is in good
faith to advance its interest and not for the purpose of
defeating or circumventing the rights of employees under the
laws or valid agreements, such exercise will be upheld.
Procedural due process entails compliance with the two-notice
rule in dismissing an employee, to wit: (1) the employer must
inform the employee of the specific acts or omissions for which
his dismissal is sought; and (2) after the employee has been
given the opportunity to be heard, the employer must inform
him of the decision to terminate his employment.
RULING:
WHEREFORE, the Resolution dated 29 June 2001 and the
Order dated 21 February 2002 of the National Labor Relations
Commission in NLRC NCR CASE No. 027871-01 are hereby
REINSTATED with the MODIFICATION that petitioners are
ORDERED to pay respondent the money equivalent of the five-
day service incentive leave for every year of service covering
his employment period from August 1988 to 1 April 2000. This
case is hereby REMANDED to the Labor Arbiter for the
computation of respondent‘s service incentive leave pay.
SMART COMMUNICATIONS, INC. V. REGINA ASTORGA -
G.R. NO. 148132
SMART COMMUNICATIONS, INC. V. REGINA ASTORGA-
G.R. NO. 151079
REGINA ASTORGA V. SMART COMMUNICATIONS, INC.,
ET AL. - G.R. NO. 151372
G.R. No. 14813 January 28, 2008
PONENTE: Nachura
FACTS:
Regina M. Astorga (Astorga) was employed by respondent
Smart Communications, Incorporated (SMART) on May 8, 1997
as District Sales Manager of the Corporate Sales Marketing
Group/ Fixed Services Division (CSMG/FSD). As District Sales
Manager, Astorga enjoyed additional benefits, namely, annual
performance incentive equivalent to 30% of her annual gross
salary, a group life and hospitalization insurance coverage, and
a car plan in the amount of P455,000.00. On May 18, 1998,
SMART sent a letter to Astorga demanding that she pay the
current market value of the Honda Civic Sedan which was
given to her under the company‘s car plan program, or to
surrender the same to the company for proper disposition.
Astorga, however, failed and refused to do either, thus
prompting SMART to file a suit for replevin with the Regional
Trial Court of Makati (RTC) on August 10, 1998. In February
1998, SMART launched an organizational realignment to
achieve more efficient operations. This was made known to the
employees on February 27, 1998. Part of the reorganization
was the outsourcing of the marketing and sales force. Thus,
SMART entered into a joint venture agreement with NTT of
Japan, and formed SMART-NTT Multimedia, Incorporated
(SNMI). Since SNMI was formed to do the sales and marketing
work, SMART abolished the CSMG/FSD, Astorga‘s division.
SNMI agreed to absorb the CSMG personnel who would be
recommended by SMART.SMART then conducted a
performance evaluation of CSMG personnel and those who
garnered the highest ratings were favorably recommended to
SNMI. Astorga landed last in the performance evaluation, thus,
she was not recommended by SMART. SMART offered her a
supervisory position in the Customer Care Dept but she
refused the offer. On March 3, 1998, SMART issued a
memorandum advising Astorga of the termination of her
employment on ground of redundancy, effective April 3, 1998.
Astorga received it on March 16, 1998. The termination of her
employment prompted Astorga to file a Complaint for illegal
12
dismissal, non-payment of salaries and other benefits with
prayer for moral and exemplary damages against SMART. She
claimed that abolishing CSMG and, consequently, terminating
her employment was illegal for it violated her right tosecurity
of tenure.
ISSUE:
Whether the dismissal of Astorga be valid or illegal.
RATIO DECIDENDI:
Astorga is declared validly dismissed. Astorga was terminated
due to redundancy, which is one of the authorized causes for
the dismissal of an employee. Redundancy in an employer‘s
personnel force necessarily or even ordinarily refers to
duplication of work. The characterization of an employee‘s
services as superfluous or no longer necessary and, therefore,
properly terminable, is an exercise of business judgment on
the part of the employer. An employer is not precluded from
adopting a new policy conducive to a more economical and
effective management even if it is not experiencing economic
reverses. Neither does the law require that the employer
should suffer financial losses before he can terminate the
services of the employee on the ground of redundancy. But
while tilting the scales of justice in favor of workers, the
fundamental law also guarantees the right of the employer to
reasonable returns for his investment.
In this light, we must acknowledge the prerogative of the
employer to adopt such measures as will promote greater
efficiency, reduce overhead costs and enhance prospects of
economic gains, albeit always within the framework of existing
laws. However, SMART failed to comply with the mandated
one (1) month notice prior to termination. The record is clear
that Astorga received the notice of termination only on March
16, 1998 or less than a month prior to its effectively on April 3,
1998. Likewise, the Department of Labor and Employment was
notified of the redundancy program only on March 6,
1998.Article 283 of the Labor Code clearly provides: Art. 283.
Closure of establishment and reduction of personnel.
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 operation 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 Ministry of Labor and Employment at least
one (1) month before the intended date thereof.
RULING:
WHEREFORE, the petition of SMART docketed as G.R. No.
148132 is GRANTED. The February 28, 2000 Decision and the
May 7, 2001 Resolution of the Court of Appeals in CA-G.R. SP.
No. 53831 are SET ASIDE. The Regional Trial Court of Makati
City, Branch 57 is DIRECTED to proceed with the trial of Civil
Case No. 98-1936 and render its Decision with reasonable
dispatch.
On the other hand, the petitions of SMART and Astorga
docketed as G.R. Nos. 151079 and 151372 are DENIED. The
June 11, 2001 Decision and the December 18, 2001 Resolution
in CA-G.R. SP. No. 57065,
are AFFIRMED with MODIFICATION. Astorga is declared
validly dismissed. However, SMART is ordered to pay
Astorga P50,000.00 as indemnity for its non-compliance with
procedural due process, her separation pay equivalent to one
(1) month pay, and her salary from February 15, 1998 until the
effective date of her termination on April 3, 1998. The award
of backwages is DELETED for lack of basis.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
STAR PAPER CORPORATION, JOSEPHINE ONGSITCO &
SEBASTIAN CHUA, Petitioners, versus RONALDO D.
SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA,
Respondents.
G.R. No.: 164774 April 12, 2006
PONENTE: Puno
FACTS:
According to the respondents, Simbol and Comia allege that
they did not resign voluntarily; they were compelled to resign
in view of an illegal company policy. As to respondent Estrella,
she alleges that she had a relationship with co-worker Zuñiga
who misrepresented himself as a married but separated man.
After he got her pregnant, she discovered that he was not
separated. Thus, she severed her relationship with him to
avoid dismissal due to the company policy. On November 30,
1999, she met an accident and was advised by the doctor at
the Orthopedic Hospital to recuperate for twenty-one (21)
days. She returned to work on December 21, 1999 but she
found out that her name was on-hold at the gate. She was
denied entry. She was directed to proceed to the personnel
office where one of the staff handed her a memorandum. The
memorandum stated that she was being dismissed for immoral
conduct. She refused to sign the memorandum because she
was on leave for twenty-one (21) days and has not been given
a chance to explain. The management asked her to write an
explanation. However, after submission of the explanation, she
was nonetheless dismissed by the company. Due to her urgent
need for money, she later submitted a letter of resignation in
exchange for her thirteenth month pay.
Respondents later filed a complaint for unfair labor practice,
constructive dismissal, separation pay and attorney‘s fees.
They averred that the aforementioned company policy is illegal
and contravenes Article 136 of the Labor Code.
ISSUE:
Whether or not the 1995 Policy/Regulation of the company is
violative of the Constitutional rights towards marriage and the
family of employees and of article 136 of the Labor Code.
RATIO DECIDENDI:
The Supreme Court held that The 1987 Constitution under
Article II, Section 18; Article XIII, Section 3 state our policy
towards the protection of labor under the following provisions.
The Civil Code likewise protects labor with the following
provisions such as articles 1700 and 1702.
The Labor Code is the most comprehensive piece of legislation
protecting labor. The case at bar involves Article 136 of the
Labor Code which provides:
Art. 136. It shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a
woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or otherwise prejudice
a woman employee merely by reason of her marriage.
In denying the contention of the petitioner company, the SC
applied the two factors to justify a bona fide occupational
qualification:
Since the finding of a bona fide occupational qualification
justifies an employer‘s no-spouse rule, the exception is
interpreted strictly and narrowly. There must be a compelling
business necessity for which no alternative exists other than
the discriminatory practice. To justify a bona fide occupational
qualification, the employer must prove two factors: (1) that the
13
employment qualification is reasonably related to the essential
operation of the job involved; and, (2) that there is a factual
basis for believing that all or substantially all persons meeting
the qualification would be unable to properly perform the
duties of the job.
The requirement that a company policy must be reasonable
under the circumstances to qualify as a valid exercise of
management prerogative was also at issue in the 1997 case of
Philippine Telegraph and Telephone Company v. NLRC. In said
case, the employee was dismissed in violation of petitioner‘s
policy of disqualifying from work any woman worker who
contracts marriage. We held that the company policy violates
the right against discrimination afforded all women workers
under Article 136 of the Labor Code, but established a
permissible exception, viz.:
A requirement that a woman employee must remain unmarried
could be justified as a ―bona fide occupational qualification,‖ or
BFOQ, where the particular requirements of the job would
justify the same, but not on the ground of a general principle,
such as the desirability of spreading work in the workplace. A
requirement of that nature would be valid provided it reflects
an inherent quality reasonably necessary for satisfactory job
performance.
The cases of Duncan and PT&T instruct us that the
requirement of reasonableness must be clearly established to
uphold the questioned employment policy. The employer has
the burden to prove the existence of a reasonable business
necessity. The burden was successfully discharged in Duncan
but not in PT&T.
The SC does not find a reasonable business necessity in the
case at bar.
Petitioners‘ sole contention that ―the company did not just
want to have two (2) or more of its employees related
between the third degree by affinity and/or consanguinity‖ is
lame. That the second paragraph was meant to give teeth to
the first paragraph of the questioned rule is evidently not the
valid reasonable business necessity required by the law.
It is significant to note that in the case at bar, respondents
were hired after they were found fit for the job, but were
asked to resign when they married a co-employee. Petitioners
failed to show how the marriage of Simbol, then a Sheeting
Machine Operator, to Alma Dayrit, then an employee of the
Repacking Section, could be detrimental to its business
operations. Neither did petitioners explain how this detriment
will happen in the case of Wilfreda Comia, then a Production
Helper in the Selecting Department, who married Howard
Comia, then a helper in the cutter-machine. The policy is
premised on the mere fear that employees married to each
other will be less efficient. If we uphold the questioned rule
without valid justification, the employer can create policies
based on an unproven presumption of a perceived danger at
the expense of an employee‘s right to security of tenure.
Petitioners contend that their policy will apply only when one
employee marries a co-employee, but they are free to marry
persons other than co-employees. The questioned policy may
not facially violate Article 136 of the Labor Code but it creates
a disproportionate effect and under the disparate impact
theory, the only way it could pass judicial scrutiny is a showing
that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy
cannot prejudice the employee‘s right to be free from arbitrary
discrimination based upon stereotypes of married persons
working together in one company. Decision of the CA affirmed.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
IN VIEW WHEREOF, the Decision of the Court of Appeals in
CA-G.R. SP No. 73477 dated August 3, 2004 is AFFIRMED.
ARMANDO G. YRASUEGUI, Petitioner, versus
PHILIPPINE AIRLINES, INC., Respondent.
G.R. No.: 168081 October 17, 2008
PONENTE: REYES, R.T.
FACTS:
Armando G. Yrasuegui was a former international flight
steward of Philippine Airlines, Inc. (PAL). He stands five feet
and eight inches (5‘8‖) with a large body frame. The proper
weight for a man of his height and body structure is from 147
to 166 pounds, the ideal weight being 166 pounds, as
mandated by the Cabin and Crew Administration Manual of
PAL. His weight problem dates back to 1984 when PAL advised
him to go on an extended vacation leave from December 29,
1984 to March 4, 1985 to address his weight concerns. For
failure to meet the weight standards another leave without
pay from March 5, 1985 to November 1985 was imposed. He
met the required weight and was allowed to work but his
weight problem recurred, thus another leave without pay from
October 17, 1988 to February 1989. From 1989 to 1992 his
weight fluctuated from 209lb, 215lb, 217lb, 212lb, and 205.
During that period he was requested to lose weight and to
report for weight checks which he constantly failed to do. In
the meantime his status was ―off-duty.‖ Finally in 1993,
petitioner was formally informed by PAL that due to his
inability to attain his ideal weight, ―and considering the utmost
leniency‖ extended to him ―which spanned a period covering a
total of almost five (5) years,‖ his services were considered
terminated ―effective immediately.‖ He then filed a complaint
for illegal dismissal against PAL. The Labor Arbiter ruled that
he was illegally dismissed and entitles to reinstatement,
backwages and attorney‘s fees. The NLRC affirmed the LA. The
CA reversed the NLRC.
ISSUE:
Whether or not petitioner was illegally dismissed.
RATIO DECIDENDI:
The obesity of petitioner is a ground for dismissal under Article
282(e) of the Labor Code. The weight standards of PAL
constitute a continuing qualification of an employee in order to
keep the job. Tersely put, an employee may be dismissed the
moment he is unable to comply with his ideal weight as
prescribed by the weight standards. The dismissal would fall
under Article 282(e) of the Labor Code. As explained by the
CA:
x x x [T]he standards violated in this case were not mere
―orders‖ of the employer; they were the ―prescribed weights‖
that a cabin crew must maintain in order to qualify for and
keep his or her position in the company. In other words, they
were standards that establish continuing qualifications for an
employee‘s position. … The failure to meet the employer‘s
qualifying standards is in fact a ground that does not squarely
fall under grounds (a) to (d) and is therefore one that falls
under Article 282(e) – the ―other causes analogous to the
foregoing.‖
By its nature, these ―qualifying standards‖ are norms that
apply prior to and after an employee is hired. x x x
We hold that the obesity of petitioner, when placed in the
context of his work as flight attendant, becomes an analogous
cause under Article 282(e) of the Labor Code that justifies his
14
dismissal from the service. His obesity may not be
unintended, but is nonetheless voluntary.
The dismissal of petitioner can be predicated on the bona fide
occupational qualification defense. Employment in particular
jobs may not be limited to persons of a particular sex, religion,
or national origin unless the employer can show that sex,
religion, or national origin is an actual qualification for
performing the job. The qualification is called a bona fide
occupational qualification (BFOQ). A common carrier, from the
nature of its business and for reasons of public policy, is bound
to observe extraordinary diligence for the safety of the
passengers it transports. Thus, it is only logical to hold that the
weight standards of PAL show its effort to comply with the
exacting obligations imposed upon it by law by virtue of being
a common carrier. The primary objective of PAL in the
imposition of the weight standards for cabin crew is flight
safety. The task of a cabin crew or flight attendant is not
limited to serving meals or attending to the whims and
caprices of the passengers. The most important activity of the
cabin crew is to care for the safety of passengers and the
evacuation of the aircraft when an emergency
occurs. Passenger safety goes to the core of the job of a cabin
attendant. Truly, airlines need cabin attendants who have the
necessary strength to open emergency doors, the agility to
attend to passengers in cramped working conditions, and the
stamina to withstand grueling flight schedules. On board an
aircraft, the body weight and size of a cabin attendant are
important factors to consider in case of emergency. Aircrafts
have constricted cabin space, and narrow aisles and exit
doors. Thus, the arguments of respondent that ―[w]hether
the airline‘s flight attendants are overweight or not has no
direct relation to its mission of transporting passengers to their
destination‖; and that the weight standards ―has nothing to do
with airworthiness of respondent‘s airlines,‖ must fail. The job
of a cabin attendant during emergencies is to speedily get the
passengers out of the aircraft safely. Being overweight
necessarily impedes mobility. Indeed, in an emergency
situation, seconds are what cabin attendants are dealing with,
not minutes.
Three lost seconds can translate into three lost lives.
Evacuation might slow down just because a wide-bodied cabin
attendant is blocking the narrow aisles.
Petitioner is entitled to separation pay. Normally, a legally
dismissed employee is not entitled to separation pay. This may
be deduced from the language of Article 279 of the Labor Code
that ―[a]n employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement.‖ Luckily for petitioner, this is not an ironclad
rule. Exceptionally, separation pay is granted to a legally
dismissed employee as an act ―social justice,‖ or based on
―equity.‖ In both instances, it is required that the dismissal (1)
was not for serious misconduct; and (2) does not reflect on the
moral character of the employee. Here, We grant petitioner
separation pay equivalent to one-half (1/2) month‘s pay for
every year of service. It should include regular allowances
which he might have been receiving.
RULING:
WHEREFORE, the appealed Decision of the Court of Appeals
is AFFIRMED but MODIFIED in that petitioner Armando
G. Yrasuegui is entitled to separation pay in an amount
equivalent to one-half (1/2) months pay for every year of
service, which should include his regular allowances.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MANILA PAVILION HOTEL, OWNED AND OPERATED BY
ACESITE (PHILS.) HOTEL CORPORATION, Petitioner,
versus HENRY DELADA, Respondent.
G.R. No.: 189947 January 25, 2012
PONENTE: Sereno
FACTS:
Delada was the Union President of the Manila Pavilion
Supervisors Association at MPH. He was originally assigned as
Head Waiter of Rotisserie, a fine-dining restaurant operated by
petitioner. Pursuant to a supervisory personnel reorganization
program, MPH reassigned him as Head Waiter of Seasons
Coffee Shop, another restaurant operated by petitioner at the
same hotel. Respondent declined the inter-outlet transfer and
instead asked for a grievance meeting on the matter, pursuant
to their Collective Bargaining Agreement (CBA). He also
requested his retention as Head Waiter of Rotisserie while the
grievance procedure was ongoing.
MPH replied and told respondent to report to his new
assignment for the time being, without prejudice to the
resolution of the grievance involving the transfer. He
adamantly refused to assume his new post at the Seasons
Coffee Shop and instead continued to report to his previous
assignment at Rotisserie. Thus, MPH sent him several
memoranda on various dates, requiring him to explain in
writing why he should not be penalized for the following
offenses: serious misconduct; willful disobedience of the lawful
orders of the employer; gross insubordination; gross and
habitual neglect of duties; and willful breach of trust. Despite
the notices from MPH, Delada persistently rebuffed orders for
him to report to his new assignment. According to him, since
the grievance machinery under their CBA had already been
initiated, his transfer must be held in abeyance. Thus, on 9
May 2007, MPH initiated administrative proceedings against
him.
ISSUE:
Whether MPH retained the authority to continue with the
administrative case against Delada for insubordination and
willful disobedience of the transfer order.
RATIO DECIDENDI:
Accordingly, we rule in this case that MPH did not lose its
authority to discipline respondent for his continued refusal to
report to his new assignment. In relation to this point, we
recall our Decision in Allied Banking Corporation v. Court of
Appeals.
In Allied Banking Corporation, employer Allied Bank reassigned
respondent Galanida from its Cebu City branch to its Bacolod
and Tagbilaran branches. He refused to follow the transfer
order and instead filed a Complaint before the Labor Arbiter for
constructive dismissal. While the case was pending, Allied Bank
insisted that he report to his new assignment. When he
continued to refuse, it directed him to explain in writing why
no disciplinary action should be meted out to him. Due to his
continued refusal to report to his new assignment, Allied Bank
eventually terminated his services. When the issue of whether
he could validly refuse to obey the transfer orders was brought
before this Court, we ruled thus:
The refusal to obey a valid transfer order constitutes willful
disobedience of a lawful order of an employer. Employees may
object to, negotiate and seek redress against employers for
rules or orders that they regard as unjust or illegal. However,
until and unless these rules or orders are declared illegal or
improper by competent authority, the employees ignore or
disobey them at their peril. For Galanida‘s continued refusal to
obey Allied Bank's transfer orders, we hold that the bank
15
dismissed Galanida for just cause in accordance with Article
282(a) of the Labor Code. Galanida is thus not entitled to
reinstatement or to separation pay. (Emphasis supplied,
citations omitted).
It is important to note what the PVA said on Delada‘s defiance
of the transfer order:
In fact, Delada cannot hide under the legal cloak of the
grievance machinery of the CBA or the voluntary arbitration
proceedings to disobey a valid order of transfer from the
management of the hotel. While it is true that Delada‘s
transfer to Seasons is the subject of the grievance machinery
in accordance with the provisions of their CBA, Delada is
expected to comply first with the said lawful directive while
awaiting the results of the decision in the grievance
proceedings. This issue falls squarely in the case of Allied
Banking Corporation vs. Court of Appeals x x x.
Pursuant to Allied Banking, unless the order of MPH is
rendered invalid, there is a presumption of the validity of that
order. Since the PVA eventually ruled that the transfer order
was a valid exercise of management prerogative, we hereby
reverse the Decision and the Resolution of the CA affirming the
Decision of the PVA in this respect. MPH had the authority to
continue with the administrative proceedings for
insubordination and willful disobedience against Delada and to
impose on him the penalty of suspension. As a consequence,
petitioner is not liable to pay back wages and other benefits for
the period corresponding to the penalty of 90-day suspension.
RULING:
WHEREFORE, the Petition is GRANTED. The Decision and the
Resolution of the Court of Appeals are hereby MODIFIED. We
rule that petitioner Manila Pavilion Hotel had the authority to
continue with the administrative proceedings for
insubordination and willful disobedience against Delada and to
impose on him the penalty of suspension. Consequently,
petitioner is not liable to pay back wages and other benefits for
the period corresponding to the penalty of 90-day suspension.
PRINCE TRANSPORT, INC. and MR. RENATO CLAROS,
Petitioners, versus DIOSDADO GARCIA, LUISITO
GARCIA, RODANTE ROMERO, REX BARTOLOME,
FELICIANO GASCO, JR., DANILO ROJO, EDGAR
SANFUEGO, AMADO GALANTO, EUTIQUIO LUGTU, JOEL
GRAMATICA, MIEL CERVANTES, TERESITA CABANES,
ROE DELA CRUZ, RICHELO BALIDOY, VILMA PORRAS,
MIGUELITO SALCEDO, CRISTINA GARCIA, MARIO
NAZARENO, DINDO TORRES, ESMAEL RAMBOYONG,
ROBETO*MANO, ROGELIO BAGAWISAN, ARIEL
SNACHEZ, ESTAQULO VILLAREAL, NELSON MONTERO,
GLORIA ORANTE, HARRY TOCA, PABLITO MACASAET
and RONALD GARCITA, Respondents.
G.R. No.: 167291 January 12, 2011
PONENTE: Peralta
FACTS:
Respondents were employees of Prince Transport, Inc. (PTI), a
company engaged in the business of transporting passengers
by land; respondents were hired either as drivers, conductors,
mechanics or inspectors, except for respondent Diosdado
Garcia (Garcia), who was assigned as Operations Manager. In
addition to their regular monthly income, respondents also
received commissions equivalent to 8 to 10% of their
wages.The said commissions were reduced to 7 to 9%; this led
respondents and other employees of PTI to hold a series of
meetings to discuss the protection of their interests as
employees; these meetings led petitioner Renato Claros, who
is the president of PTI, to suspect that respondents are about
to form a union; he made known to Garcia his objection to the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
formation of a union. In December 1997, PTI employees
requested for a cash advance, but the same was denied by
management which resulted in demoralization on the
employees' ranks; later, PTI acceded to the request of some,
but not all of the employees; the foregoing circumstances led
respondents to form a union for their mutual aid and
protection. In order to block the continued formation of the
union, PTI caused the transfer of all union members and
sympathizers to one of its sub-companies, Lubas Transport
(Lubas). Despite such transfer, the schedule of drivers and
conductors, as well as their company identification cards, were
issued by PTI; the daily time records, tickets and reports of
the respondents were also filed at the PTI office; and, all
claims for salaries were transacted at the same office. Later,
the business of Lubas deteriorated because of the refusal of
PTI to maintain and repair the units being used therein, which
resulted in the virtual stoppage of its operations and
respondents' loss of employment. Petitioners, on the other
hand, denied the material allegations of the complaints
contending that herein respondents were no longer their
employees, since they all transferred to Lubas at their own
request; petitioners have nothing to do with the management
and operations of Lubas as well as the control and supervision
of the latter's employees.
ISSUE:
Whether or not the petitioners are guilty of unfair labor
practice.
RATION DECIDENDI:
Yes. The Court agrees with respondents that if Lubas is indeed
an entity separate and independent from PTI why is it that the
latter decides which employees shall work in the former?
What is telling is the fact that in a memorandum issued by PTI,
petitioner company admitted that Lubas is one of its sub-
companies. In addition, PTI, in its letters to its employees who
were transferred to Lubas, referred to the latter as its ―New
City Operations Bus.‖
Moreover, petitioners failed to refute the contention of
respondents that despite the latter‘s transfer to Lubas of their
daily time records, reports, daily income remittances of
conductors, schedule of drivers and conductors were all made,
performed, filed and kept at the office of PTI. In fact,
respondents‘ identification cards bear the name of PTI.
Petitioners are guilty of unfair labor practice, the Court held
that respondents‘ transfer of work assignments to Lubas was
designed by petitioners as a subterfuge to foil the former‘s
right to organize themselves into a union. Under Article 248 (a)
and (e) of the Labor Code, an employer is guilty of unfair labor
practice if it interferes with, restrains or coerces its employees
in the exercise of their right to self-organization or if it
discriminates in regard to wages, hours of work and other
terms and conditions of employment in order to encourage or
discourage membership in any labor organization.
Indeed, evidence of petitioners' unfair labor practice is shown
by the established fact that, after respondents' transfer to
Lubas, petitioners left them high and dry insofar as the
operations of Lubas was concerned. Petitioners withheld the
necessary financial and logistic support such as spare parts,
and repair and maintenance of the transferred buses until only
two units remained in running condition. This left respondents
virtually jobless. Petition denied.
RULING:
WHEREFORE, the instant petition is DENIED. The assailed
Decision and Resolution of the Court of Appeals,
dated December 20, 2004 and February 24, 2005, respectively,
in CA-G.R. SP No. 80953, are AFFIRMED.
16
PRODUCERS BANK OF THE
PHILIPPINES, Petitioner, versus NATIONAL LABOR
RELATIONS COMMISSION and PRODUCERS BANK
EMPLOYEES ASSOCIATION, Respondents.
G.R. No.: 100701 March 28, 2001
PONENTE: Peralta
FACTS:
The present petition originated from a complaint filed by
private respondent on 11 February 1988 with the Arbitration
Branch, NLRC, charging petitioner with diminution of benefits,
non-compliance with Wage Order No. 6 and non-payment of
holiday pay. In addition, private respondent prayed for
damages.
Labor arbiter dismissed the complaint for lack of merit. NLRC,
however, granted all of private respondent‘s claims, except for
damages. Petition filed a Motion for Partial Reconsideration,
which was denied by the NLRC. Hence, recourse to this Court.
Petitioner contends that the NLRC gravely abused its discretion
in ruling as it did for the succeeding reasons stated: (1) it
contravened the Supreme Court decision in Traders Royal Bank
v. NLRC, et al., G.R. No. 88168, promulgated on August 30,
1990, (2) its ruling is not justified by law and Art. 100 of the
Labor Code, (3) its ruling is contrary to the CBA, and (4) the
so-called ―company practice invoked by it has no legal and
moral bases‖ (4) petitioner,
under conservatorship and distressed, is exempted under
Wage Order No. 6.
ISSUE:
WON respondent is entitled for the payment of the above-
mentioned monetary claims, particularly bonus.
RATIO DECIDENDI:
A bonus is an amount granted and paid to an employee for his
industry and loyalty which contributed to the success of the
employer‘s business and made possible the realization of
profits. It is an act of generosity granted by an enlightened
employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something
given in addition to what is ordinarily received by or strictly
due the recipient.13 Thus, a bonus is not a demandable and
enforceable obligation, except when it is made part of the
wage, salary or compensation of the employee. However, an
employer cannot be forced to distribute bonuses which it can
no longer afford to pay. To hold otherwise would be to
penalize the employer for his past generosity. Thus, in Traders
Royal Bank v. NLRC,16 we held that – It is clear x x x that the
petitioner may not be obliged to pay bonuses to its employees.
The matter of giving them bonuses over and above their lawful
salaries and allowances is entirely dependent on the profits, if
any, realized by the Bank from its operations during the past
year. x x x
In light of these submissions of the petitioner, the contention
of the Union that the granting of bonuses to the employees
had ripened into a company practice that may not be adjusted
to the prevailing financial condition of the Bank has no legal
and moral bases. Its fiscal condition having declined, the Bank
may not be forced to distribute bonuses which it can no longer
afford to pay and, in effect, be penalized for its past generosity
to its employees. –
Private respondent‘s contention, that the decrease in the mid-
year and year-end bonuses constituted a diminution of the
employees‘ salaries, is not correct, for bonuses are not part of
labor standards in the same class as salaries, cost of living
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
allowances, holiday pay, and leave benefits, which are
provided by the Labor Code.
This doctrine was reiterated in the more recent case of Manila
Banking Corporation v. NLRC:
Petitioner was not only experiencing a decline in its profits, but
was reeling from tremendous losses triggered by a bank-run
which began in 1983. In such a depressed financial condition,
petitioner cannot be legally compelled to continue paying the
same amount of bonuses to its employees. Thus, the
conservator was justified in reducing the mid-year and
Christmas bonuses of petitioner‘s employees. To hold
otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore the
viability of the financially precarious bank. Ultimately, it is to
the employees‘ advantage that the conservatorship achieve its
purposes for the alternative would be petitioner‘s closure
whereby employees would lose not only their benefits, but
their jobs as well.
An employer cannot be forced to distribute bonuses which it
can no longer afford to pay, a bonus is an amount granted and
paid to an employee for his industry and loyalty which
contributed to the success of the employers business and
made possible the realization of profile. It is an act of
generosity and is a management prerogative, given in addition
to what is ordinarily received by or strictly due the recipient.
Thus, it is not a demandable and enforceable obligation,
except when it is made part of the wage, salary or
compensation of the employee.
RULING:
WHEREFORE, for the reasons above stated, the 30 April 1991
Decision of public respondent in NLRC-NCR Case No. 02-
00753-88, entitled Producers Bank Employees Association v.
Producers Bank of the Philippines, and its 18 June 1991
Resolution issued in the same case are hereby SET ASIDE,
with the exception of public respondents ruling on damages.
PHILIPPINE AIRLINES, INC., Petitioner, versus
NATIONAL LABOR RELATIONS COMMISSION and AIDA
M. QUIJANO, Respondents.
G.R. No.: 123294 October 20, 2010
PONENTE: Leonardo-De Castro
FACTS:
An investigating committee chaired by Leslie W. Espino
formally charged Quijano as Manager-ASAD in connection with
the processing and payment of commission claims to Goldair
Pty. Ltd. wherein PAL overpaid commissions to the latter.
Pending further investigation, the Espino Committee placed
Quijano under preventive suspension and at the same time
required her to submit her answer to the charges.
Another Administrative charge involving the same Goldair
anomaly was filed, this time including Committee Chairman
Leslie W. Espino and Committee Member Romeo R. Ines and
several others, for "gross incompetence and inefficiency,
negligence, imprudence, mismanagement, dereliction of duty,
failure to observe and/or implement administrative and
executive policies, and related acts or omissions." Pending the
result of investigation by another committee chaired by Judge
Martin S. Ocampo, the PAL Board of Directors suspended
respondents.
The Ocampo Committee having submitted its findings to the
PAL Board of Directors, the latter considered respondents
17
resigned from the service effective immediately, for loss of
confidence and for acts inimical to the interest of the company.
Her motion for reconsideration having been denied by the
Board, Quijano filed the instant case against PAL for illegal
suspension and illegal dismissal.
The Labor Arbiter dismissed private respondents complaint.
Undeterred, private respondent filed an appeal before the
NLRC which rendered the assailed Decision vacated and set
aside. Petitioner filed a Motion for Reconsideration but this was
denied by the NLRC.
ISSUE:
Whether or not respondent is illegally dismissed?
RATIO DECIDENDI:
At the onset, it should be noted that the parties do not dispute
the validity of private respondents dismissal from employment
for loss of confidence and acts inimical to the interest of the
employer. The assailed September 29, 1995 Decision of the
NLRC was emphatic in declaring that it was "not prepared to
rule as illegal the preventive suspension and eventual dismissal
from the service of [private respondent]" and rightfully so
because the last position that private respondent held,
Manager-ASAD (Agents Services Accounting Division),
undeniably qualifies as a position of trust and confidence.
Loss of confidence as a just cause for termination of
employment is premised from the fact that an employee
concerned holds a position of trust and confidence. This
situation holds where a person is entrusted with confidence on
delicate matters, such as the custody, handling, or care and
protection of the employers property. 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.
As a general rule, employers are allowed a wider latitude of
discretion in terminating the employment of managerial
personnel or those who, while not of similar rank, perform
functions which by their nature require the employers full trust
and confidence. This must be distinguished from the case of
ordinary rank and file employees, whose termination on the
basis of these same grounds requires a higher proof of
involvement in the events in question; mere uncorroborated
assertions and accusations by the employer will not suffice.
The language of Article 279 of the Labor Code is pregnant with
the implication that a legally dismissed employee is not entitled
to separation pay, to wit:
An employee who is unjustly dismissed from work shall be
entitled to reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
However, in exceptional cases, this Court has granted
separation pay to a legally dismissed employee as an act of
"social justice" or based on "equity." In both instances, it is
required that the dismissal (1) was not for serious misconduct;
and (2) does not reflect on the moral character of the
employee or would involve moral turpitude. This equitable and
humanitarian principle was first discussed by the Court in the
landmark case of Philippine Long Distance Telephone Co.
(PLDT) v. National Labor Relations Commission.
Serious misconduct as a valid cause for the dismissal of an
employee is defined simply as improper or wrong conduct. It is
a transgression of some established and definite rule of action,
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error of judgment. To be
serious within the meaning and intendment of the law, the
misconduct must be of such grave and aggravated character
and not merely trivial or unimportant. However serious such
misconduct, it must, nevertheless, be in connection with the
employees work to constitute just cause for his separation.
The act complained of must be related to the performance of
the employees duties such as would show him to be unfit to
continue working for the employer. On the other hand, moral
turpitude has been defined as "everything which is done
contrary to justice, modesty, or good morals; an act of
baseness, vileness or depravity in the private and social duties
which a man owes his fellowmen, or to society in general,
contrary to justice, honesty, modesty, or good morals."
In the case at bar, the transgressions imputed to private
respondent have never been firmly established as deliberate
and willful acts clearly directed at making petitioner lose
millions of pesos. At the very most, they can only be
characterized as unintentional, albeit major, lapses in
professional judgment. Likewise, the same cannot be described
as morally reprehensible actions. Thus, private respondent
may be granted separation pay on the ground of equity which
this Court had defined as "justice outside law, being ethical
rather than jural and belonging to the sphere of morals than of
law. It is grounded on the precepts of conscience and not on
any sanction of positive law, for equity finds no room for
application where there is law."
RULING:
WHEREFORE, the assailed NLRC Decision dated September
29, 1995 as well as the Resolution dated November 14, 1995
are AFFIRMED with the MODIFICATION that petitioner
Philippine Airlines, Inc. pay private respondent Aida Quijano
one-half (1/2) month salary for every year of service as
separation pay on equitable grounds.
LEPANTO CERAMICS, INC., Petitioner, vs. LEPANTO
EMPLOYEES ASSOCIATION, Respondent.
G.R. No. 180866 March 2, 2010
PEREZ, J.:
FACTS:
Petitioner Lepanto Ceramics, Incorporated is a duly organized
corporation existing and operating by virtue of Philippine Laws.
Its business is primarily to manufacture, make, buy and sell,
on wholesale basis, among others, tiles, marbles, mosaics and
other similar products.
Respondent Lepanto Ceramics Employees Association
(respondent Association) is a legitimate labor organization duly
registered with the Department of Labor and Employment. It is
the sole and exclusive bargaining agent in the establishment of
petitioner.


Petitioner and respondent Association entered into a Collective
Bargaining Agreement (CBA) which provides for, among
others, the grant of a Christmas gift package/bonus to the
members of the respondent Association.
The Christmas bonus was one of the enumerated existing
benefits, practice of traditional rights, which shall remain in full
force and effect.
In the succeeding years, 1999, 2000 and 2001, the bonus was
not in cash. Instead, petitioner gave each of the members of
respondent Association Tile Redemption Certificates equivalent
to P3,000.00. The bonus for the year 2002 is the root of the
present dispute. Petitioner gave a year-end cash benefit of Six
Hundred Pesos (P600.00) and offered a cash advance to
interested employees equivalent to one (1) month salary
payable in one year. The respondent Association objected to
18
the P600.00 cash benefit and argued that this was in violation
of the CBA it executed with the petitioner.
In support of its claim, respondent Association insisted that it
has been the traditional practice of the company to grant its
members Christmas bonuses during the end of the calendar
year, each in the amount of P3,000.00 as an expression of
gratitude to the employees for their participation in the
company‘s continued existence in the market. The bonus was
either in cash or in the form of company tiles. In 2002, in a
speech during the Christmas celebration, one of the company‘s
top executives assured the employees of said bonus. However,
the Human Resources Development Manager informed them
that the traditional bonus would not be given as the company‘s
earnings were intended for the payment of its bank loans.
Respondent Association argued that this was in violation of
their CBA.
The petitioner averred that the complaint for nonpayment of
the 2002 Christmas bonus had no basis as the same was not a
demandable and enforceable obligation. It argued that the
giving of extra compensation was based on the company‘s
available resources for a given year and the workers are not
entitled to a bonus if the company does not make profits.
The Voluntary Arbitrator rendered a Decision, declaring that
petitioner is bound to grant each of its workers a Christmas
bonus of P3,000.00 for the reason that the bonus was given
prior to the effectivity of the CBA between the parties and that
the financial losses of the company is not a sufficient reason to
exempt it from granting the same. It stressed that the CBA is a
binding contract and constitutes the law between the parties.
In affirming respondent Associations right to the Christmas
bonus, the Court of Appeals held:
In the case at bar, it is indubitable that petitioner offered
private respondent a Christmas bonus/gift in 1998 or before
the execution of the 1999 CBA which incorporated the said
benefit as a traditional right of the employees. Hence, the
grant of said bonus to private respondent can be deemed a
practice as the same has not been given only in the 1999 CBA.
Apparently, this is the reason why petitioner specifically
recognized the grant of a Christmas bonus/gift as a practice or
tradition as stated in the CBA.
ISSUE:
Whether or not the Court of Appeals erred in affirming the
ruling of the voluntary arbitrator that the petitioner is obliged
to give the members of the respondent Association a
Christmas bonus in the amount of P3,000.00 in 2002.
RATIO DECIDENDI:
We uphold the rulings of the voluntary arbitrator and of the
Court of Appeals.
As a general proposition, an arbitrator is confined to the
interpretation and application of the CBA. He does not sit to
dispense his own brand of industrial justice: his award is
legitimate only in so far as it draws its essence from the CBA.
That was done in this case.
By definition, a bonus is a gratuity or act of liberality of the
giver. It is something given in addition to what is ordinarily
received by or strictly due the recipient. A bonus is granted
and paid to an employee for his industry and loyalty, which
contributed to the success of the employers business and
made possible the realization of profits.
Generally, a bonus is not a demandable and enforceable
obligation. For a bonus to be enforceable, it must have been
promised by the employer and expressly agreed upon by the
parties. Given that the bonus in this case is integrated in the
CBA, the same partakes the nature of a demandable
obligation. Verily, by virtue of its incorporation in the CBA, the
Christmas bonus due to respondent Association has become
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
more than just an act of generosity on the part of the
petitioner but a contractual obligation it has undertaken.
All given, business losses are a feeble ground for petitioner to
repudiate its obligation under the CBA. The rule is settled that
any benefit and supplement being enjoyed by the employees
cannot be reduced, diminished, discontinued or eliminated by
the employer. The principle of non-diminution of benefits is
founded on the constitutional mandate to protect the rights of
workers and to promote their welfare and to afford labor full
protection. Hence, absent any proof that petitioner‘s consent
was vitiated by fraud, mistake or duress, it is presumed that it
entered into the CBA voluntarily and had full knowledge of the
contents thereof and was aware of its commitments under the
contract.
The Court is fully aware that implementation to the letter of
the subject CBA provision may further deplete petitioners
resources. Petitioners remedy though lies not in the Courts
invalidation of the provision but in the parties clarification of
the same in subsequent CBA negotiations. Article 253 of the
Labor Code is relevant:
Art. 253. Duty to bargain collectively when there exists a
collective bargaining agreement. - When there is a collective
bargaining agreement, the duty to bargain collectively shall
also mean that neither party shall terminate nor modify such
agreement during its lifetime. However, either party can serve
a written notice to terminate or modify the agreement at least
sixty (60) days prior to its expiration date. It shall be the duty
of both parties to keep the status quo and to continue in full
force and effect the terms and conditions of the existing
agreement during the sixty (60)-day period and/or until a new
agreement is reached by the parties.
RULING:
WHEREFORE, Premises considered, the petition is DENIED for
lack of merit.
The Decision of the Court of Appeals dated 5 April 2006 and
the Resolution of the same court dated 13 December 2007 in
CA-G.R. SP No. 78334 are AFFIRMED.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY,
Petitioner, vs. JOEY B. TEVES, Respondent.
G.R. No. 143511 November 15, 2010
FACTS:
Respondent was employed by petitioner Philippine Long
Distance Telephone Company in 1981 as Clerk II until his
termination from service on June 1, 1992. Petitioner
terminated respondent through an Inter-Office Memorandum
dated May 29, 1992 on account of his three (3) unauthorized
leaves of absence committed within three (3) years in violation
of petitioners rules and regulations.
Respondent was absent from August 23 to September 3, 1990
as his wife gave birth on August 25 but was only discharged
from the hospital on September 2, 1990 due to complications;
since they had no household help, he had to attend to his
wife's needs in the hospital, as well as the needs of their four
kids, including bringing them to school. Respondent called up
through a third party to inform petitioner that he would go on
an extended leave. Upon his reporting for work on
September 4, 1990, he wrote petitioner a letter confirming his
leave of absence without pay for that period and stating the
reasons thereof, with his wife's medical certificate attached.
Dissatisfied, petitioner required respondent to submit further
explanation which the latter did reiterating his previous
explanation. However, in petitioner's Inter-Office Memorandum
dated October 3, 1990, it found respondents explanation to be
unacceptable and unmeritorious for the latter's failure to call,
notify or request petitioner for such leave; thus, petitioner
19
suspended respondent from work without pay for 20 days,
effective October 8, 1990.
Respondent was absent from May 29 to June 12, 1991. He was
sent a Memorandum reminding him of the July 2, 1990
Memorandum requiring written application prior to a leave of
absence without pay and was directed to report for work on
June 13, 1991 at ten o'clock in the evening lest he be meted a
disciplinary action. Respondent reported for work on even
date, and was required to explain in writing why no disciplinary
action should be taken against him for his unauthorized leave
of absence. In a Memorandum dated June 17, 1991,
respondent explained that his absences were due to the fact
that his eldest and youngest daughter were sick and had to be
confined at the nearby clinic; and the medical certificate
confirming said confinement was to follow. Further,
respondent alleged that he had relayed said message to an
officemate, Luis V. Marquez, who unfortunately did not also
report for work. As petitioner found respondents explanation
insufficient, respondent was suspended without pay for 45
days effective July 17, 1991.
Eight months thereafter, respondent availed of a seven-day
leave of absence and extended such leave to complete his
annual vacation leave, which was to end on February 11,
1992. However, respondent failed to report for work from
February 11 to February 19, 1992. Petitioner then sent him a
Memorandum dated February 19, 1992, directing him to report
for duty within 72 hours, otherwise, his services would be
terminated for abandonment of work. Respondent reported for
duty and was served another Memorandum requiring him to
explain in writing why no disciplinary action should be taken
against him for his unauthorized absences. In his explanation,
respondent stated that he incurred said absences because he
had many accounts in the office which were already due and
demandable and thought of prolonging such payment by
absenting himself. He further stated that he realized that what
he did was wrong and only worsened his situation and asked
for another chance. Petitioner found such explanation totally
unacceptable. Thus, in an Inter-Office Memorandum dated
May 29, 1992 addressed to respondent, the latter was
terminated from service effective June 1, 1992 due to his third
unauthorized absence within a three-year period.
On March 9, 1993, respondent filed a Complaint for illegal
suspension, illegal dismissal, payment of two Christmas
bonuses and monthly rice subsidy.
Labor Arbiter (LA) Benigno C. Villarente, Jr. rendered his
Decision, declaring that the dismissal of the complainant is
LEGAL
In reversing the LA, the NLRC found that respondent's
absences from August 23 to September 3, 1990 was brought
to petitioner's attention when respondent called through a
third party that respondent would go on an extended leave.
Moreover, the reason for his prolonged absence, i.e., the
unforeseen complications of his wife's condition after giving
birth, supported by a medical certificate, was an eventuality
that needed to be attended to with priority which should have
been accorded credence and favorably considered; and that
dismissing such explanation and placing respondent under
suspension, when his leave of absence was without pay,
merely exacerbated his family's plight.
The NLRC found that respondent's failure to verify whether his
message for petitioner through a co-employee that his
(respondent) two daughters were sick and confined at a
nearby clinic was duly delivered constituted a neglect of duty.
However, the NLRC took into consideration respondent's
reason for such absence and stated that certain leniency
should have been accorded respondent and that his
suspension for 45 days was too harsh for the said offense.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
A petition was made to CA which rendered its assailed
Decision, which affirmed and reiterated the NLRC decision.
ISSUE:
Whether or not sufficient ground exists for respondent's
dismissal from service.
RATIO DECIDENDI:
Respondent was terminated from employment by reason of his
third unauthorized absence from
THE TERMINATION OF RESPONDENT'S SERVICES IS
JUSTIFIED APPLYING THE TOTALITY OF INFRACTIONS
DOCTRINE.
THERE IS SUBSTANTIAL AND UNDISPUTED EVIDENCE
ESTABLISHING THAT RESPONDENT IS AN ABSENTEE
EMPLOYEE WHO HAS A PROPENSITY TO SIMPLY DISAPPEAR
WITHOUT EVEN GIVING HIS EMPLOYER THE COURTESY OF A
PRIOR NOTICE.
Respondent absented himself because he had many accounts
in the office which were already due and demandable, and he
thought that absenting himself from work would prolong the
payment of his financial obligations; and that he realized that
his action was wrong which worsened his situation and asked
for another chance. Such explanation was found by petitioner
to be unacceptable; thus, respondent was terminated effective
June 1, 1992 for committing three unauthorized absences
within a three-year period. Petitioner found respondent to have
committed the other two incidents of unauthorized absences
from August 23 to September 3, 1990 and from May 29 to
June 12, 1991.
Even assuming that respondent's absenteeism constitutes
willful disobedience, such offense does not warrant
respondent's dismissal. Not every case of insubordination or
willful disobedience by an employee reasonably deserves the
penalty of dismissal. There must be a reasonable
proportionality between the offense and the penalty.
While management has the prerogative to discipline its
employees and to impose appropriate penalties on erring
workers, pursuant to company rules and regulations, however,
such management prerogatives must be exercised in good
faith for the advancement of the employers interest and not
for the purpose of defeating or circumventing the rights of the
employees under special laws and valid agreements. The Court
is wont to reiterate that while an employer has its own interest
to protect, and pursuant thereto, it may terminate an
employee for a just cause, such prerogative to dismiss or lay
off an employee must be exercised without abuse of
discretion. Its implementation should be tempered with
compassion and understanding. The employer should bear in
mind that, in the execution of said prerogative, what is at
stake is not only the employees position, but his very
livelihood, his very breadbasket. 

Dismissal is the ultimate penalty that can be meted to an
employee. Even where a worker has committed an infraction, a
penalty less punitive may suffice, whatever missteps maybe
committed by labor ought not to be visited with a consequence
so severe. This is not only the laws concern for the
workingman. There is, in addition, his or her family to
consider.
Unemployment brings untold hardships and sorrows upon
those dependent on the wage-earner.
Considering that respondent was illegally dismissed from
service, he is entitled to be reinstated, without loss of seniority
rights and the payment of backwages from the time
respondents compensation was withheld from him until his
reinstatement on November 12, 1997. However, since we find
that respondent's absence from February 11 to 19, 1992 was
unjustified and unauthorized, thus, his suspension for thirty
20
days would be in order. Hence, the amount equivalent to the
thirty-day suspension, which respondent should have served
for his absence on February 11 to 19, 1992, should be
deducted from the backwages to be awarded to him.
RULING:
WHEREFORE, the Decision dated April 24, 2000 and the
Resolution dated May 31, 2000
of the Court of Appeals in CA-G.R. SP No. 50852, are hereby
AFFIRMED with MODIFICATION that the amount equivalent to
respondent‘s thirty-day suspension is deducted from the award
of backwages from the time his compensation was withheld up
to his reinstatement.
SAN MIGUEL BREWERY SALES FORCE UNION
(PTGWO), petitioner, vs. HON. BLAS F. OPLE, as
Minister of Labor and SAN MIGUEL CORPORATION,
respondents.
G.R. No. L-53515 February 8, 1989
GRIÑO-AQUINO, J.:
FACTS:
A collective bargaining agreement (effective on May 1, 1978
until January 31, 1981) was entered into by petitioner San
Miguel Corporation Sales Force Union (PTGWO), and the
private respondent, San Miguel Corporation, Section 1, of
Article IV of which provided as follows:
Art. IV, Section 1. Employees within the appropriate bargaining
unit shall be entitled to a basic monthly compensation plus
commission based on their respective sales.
In 1979, the company introduced a marketing scheme known
as the "Complementary Distribution System" (CDS) whereby its
beer products were offered for sale directly to wholesalers
through San Miguel's sales offices.
The labor union (herein petitioner) filed a complaint for unfair
labor practice in the Ministry of Labor, with a notice of strike
on the ground that the CDS was contrary to the existing
marketing scheme whereby the Route Salesmen were assigned
specific territories within which to sell their stocks of beer, and
wholesalers had to buy beer products from them, not from the
company. It was alleged that the new marketing scheme
violates Section 1, Article IV of the collective bargaining
agreement because the introduction of the CDS would reduce
the take-home pay of the salesmen and their truck helpers for
the company would be unfairly competing with them.
The complaint filed by the petitioner against the respondent
company raised two issues: (1) whether the CDS violates the
collective bargaining agreement, and (2) whether it is an
indirect way of busting the union.
The Minister ordered the dismissal of the notice of strike filed
by petitioner. Management however is hereby ordered to pay
an additional three (3) months back adjustment commissions
over and above the adjusted commission under the
complementary distribution system.
ISSUE:
Whether or not the CDS is a valid exercise of management
prerogatives.
RATIO DECIDENDI:
Public respondent was correct in holding that the CDS is a valid
exercise of management prerogatives:
Except as limited by special laws, an employer is free to
regulate, according to his own discretion and judgment, all
aspects of employment, including hiring, work assignments,
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision,
lay-off of workers and the discipline, dismissal and recall of
work. ... (NLU vs. Insular La Yebana Co., 2 SCRA 924;
Every business enterprise endeavors to increase its profits. In
the process, it may adopt or devise means designed towards
that goal.
So long as a company's management prerogatives are
exercised in good faith for the advancement of the employer's
interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid
agreements, this Court will uphold them (LVN Pictures Workers
vs. LVN, 35 SCRA 147; Phil. American Embroideries vs.
Embroidery and Garment Workers, 26 SCRA 634; Phil. Refining
Co. vs. Garcia, 18 SCRA 110). San Miguel Corporation's offer to
compensate the members of its sales force who will be
adversely affected by the implementation of the CDS by paying
them a so-called "back adjustment commission" to make up for
the commissions they might lose as a result of the CDS proves
the company's good faith and lack of intention to bust their
union.
RULING:
WHEREFORE, the petition for certiorari is dismissed for lack of
merit.
MANUEL SOSITO, petitioner, vs. AGUINALDO
DEVELOPMENT CORPORATION, respondent.
G.R. No. L-48926 December 14, 1987
CRUZ, J.:
FACTS:
Petitioner Manuel Sosito was employed in 1964 by the private
respondent, a logging company, and was in charge of logging
importation when he went on indefinite leave with the consent
of the company on January 16, 1976.
The private respondent, through its president, announced a
retrenchment program and offered separation pay to
employees in the active service as of June 30, 1976, who
would tender their resignations. The petitioner decided to
accept this offer and so submitted his resignation, "to avail
himself of the gratuity benefits" promised. However, his
resignation was not acted upon and he was never given the
separation pay he expected.
The petitioner complained to the Department of Labor, where
he was sustained by the labor arbiter. The company was
ordered to pay Sosito a sum of P 4,387.50, representing his
salary for six and a half months.
On appeal to the National Labor Relations Commission, this
decision was reversed and it was held that the retrenchment
program did not cover the petitioner.
ISSUE:
Whether or not the petitioner is entitled to separation pay
under the retrenchment program of the private respondent.
RATIO DECIDENDI:
It is clear from the memorandum that the offer of separation
pay was extended only to those who were in the active service
of the company. It is equally clear that the petitioner was not
eligible for the promised gratuity, as he was not actually
working with the company as of the said date. Being on
indefinite leave, he was not in the active service of the private
21
respondent although, if one were to be technical, he was still
in its employ. Even so, during the period of indefinite leave, he
was not entitled to receive any salary or to enjoy any other
benefits available to those in the active service.
Under the law then in force the private respondent could have
validly reduced its work force because of its financial reverses
without the obligation to grant separation pay. This was
permitted under the original Article 272(a), of the Labor Code,
which was in force at the time. To its credit, however, the
company voluntarily offered gratuities to those who would
agree to be phased out pursuant to the terms and conditions
of its retrenchment program, in recognition of their loyalty and
to tide them over their own financial difficulties. The Court
feels that such compassionate measure deserves
commendation and support but at the same time rules that it
should be available only to those who are qualified therefore.
We hold that the petitioner is not one of them.
While the Constitution is committed to the policy of social
justice and the protection of the working class, it should not be
supposed that every labor dispute will be automatically decided
in favor of labor. Management also has its own rights which, as
such, are entitled to respect and enforcement in the interest of
simple fair play. Out of its concern for those with less
privileges in life, this Court has inclined more often than not
toward the worker and upheld his cause in his conflicts with
the employer. Such favoritism, however, has not blinded us to
the rule that justice is in every case for the deserving, to be
dispensed in the light of the established facts and the
applicable law and doctrine.
RULING:
WHEREFORE, the petition is DISMISSED and the challenged
decision AFFIRMED, with costs against the petitioner.
UNION OF FILIPRO EMPLOYEES (UFE), petitioner, vs.
BENIGNO VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC.
(formerly FILIPRO, INC.), respondents.
G.R. No. 79255 January 20, 1992
GUTIERREZ, JR., J.:
FACTS:
Respondent Filipro, Inc. (now Nestle Philippines, Inc.) filed
with the National Labor Relations Commission (NLRC) a
petition for declaratory relief seeking a ruling on its rights and
obligations respecting claims of its monthly paid employees for
holiday pay.
Both Filipro and the Union of Filipino Employees (UFE) agreed
to submit the case for voluntary arbitration and appointed
respondent Benigno Vivar, Jr. as voluntary arbitrator.
Arbitrator Vivar rendered a decision directing Filipro to:
pay its monthly paid employees holiday pay pursuant to Article
94 of the Code, subject only to the exclusions and limitations
specified in Article 82 and such other legal restrictions as are
provided for in the Code.

Filipro filed a motion for clarification seeking (1) the limitation
of the award to three years, (2) the exclusion of salesmen,
sales representatives, truck drivers, merchandisers and medical
representatives (hereinafter referred to as sales personnel)
from the award of the holiday pay, and (3) deduction from the
holiday pay award of overpayment for overtime, night
differential, vacation and sick leave benefits due to the use of
251 divisor.
Petitioner UFE answered that the award should be made
effective from the date of effectivity of the Labor Code, that
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
their sales personnel are not field personnel and are therefore
entitled to holiday pay, and that the use of 251 as divisor is an
established employee benefit which cannot be diminished.
The respondent arbitrator issued an order declaring that the
effectivity of the holiday pay award shall retroact to November
1, 1974, the date of effectivity of the Labor Code. He
adjudged, however, that the company's sales personnel are
field personnel and, as such, are not entitled to holiday pay.
He likewise ruled that with the grant of 10 days' holiday pay,
the divisor should be changed from 251 to 261 and ordered
the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251
days as divisor.
ISSUES:
1) Whether or not Nestle's sales personnel are entitled to
holiday pay; and
2) Whether or not, concomitant with the award of holiday pay,
the divisor should be changed from 251 to 261 days
RATIO DECIDENDI:
The respondent arbitrator's order to change the divisor from
251 to 261 days would result in a lower daily rate, which is
violative of the prohibition on non-diminution of benefits found
in Article 100 of the Labor Code. To maintain the same daily
rate if the divisor is adjusted to 261 days, then the dividend,
which represents the employee's annual salary, should
correspondingly be increased to incorporate the holiday pay.
There is thus no merit in respondent Nestle's claim of
overpayment of overtime and night differential pay and sick
and vacation leave benefits, the computation of which are all
based on the daily rate, since the daily rate is still the same
before and after the grant of holiday pay.
Respondent Nestle's invocation of solutio indebiti, or payment
by mistake, due to its use of 251 days as divisor must fail in
light of the Labor Code mandate that "all doubts in the
implementation and interpretation of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor." (Article 4). Moreover, prior to September 1, 1980,
when the company was on a 6-day working schedule, the
divisor used by the company was 303, indicating that the 10
holidays were likewise not paid. When Filipro shifted to a 5-day
working schebule on September 1, 1980, it had the chance to
rectify its error, if ever there was one but did not do so. It is
now too late to allege payment by mistake.
The "operative fact" doctrine realizes that in declaring a law or
rule null and void, undue harshness and resulting unfairness
must be avoided. It is now almost the end of 1991. To require
various companies to reach back to 1975 now and nullify acts
done in good faith is unduly harsh. 1984 is a fairer reckoning
period under the facts of this case.
Applying the aforementioned doctrine to the case at bar, it is
not far-fetched that Nestle, relying on the implicit validity of
the implementing rule and policy instruction before this Court
nullified them, and thinking that it was not obliged to give
holiday pay benefits to its monthly paid employees, may have
been moved to grant other concessions to its employees,
especially in the collective bargaining agreement. This
possibility is bolstered by the fact that respondent Nestle's
employees are among the highest paid in the industry. With
this consideration, it would be unfair to impose additional
burdens on Nestle when the non-payment of the holiday
benefits up to 1984 was not in any way attributed to Nestle's
fault.
RULING:
WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be
22
computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED.
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner,
vs. WATERFRONT HOTEL DAVAO, Respondent.
G.R. Nos. 174040-41 September 22, 2010
PERALTA, J.:
FACTS:
Respondent Waterfront Insular Hotel Davao (respondent) sent
the Department of Labor and Employment (DOLE), Davao City,
a Notice of Suspension of Operations notifying the same that it
will suspend its operations for a period of six months due to
severe and serious business losses. In said notice, respondent
assured the DOLE that if the company could not resume its
operations within the six-month period, the company would
pay the affected employees all the benefits legally due to
them.
During the period of the suspension, Domy R. Rojas (Rojas),
the President of Davao Insular Hotel Free Employees Union
(DIHFEU-NFL), the recognized labor organization in Waterfront
Davao, sent respondent a number of letters asking
management to reconsider its decision.
In letters, Rojas intimated that the members of the Union were
determined to keep their jobs and that they believed they too
had to help respondent.
After series of negotiations, respondent and DIHFEU-NFL,
represented by its President,
Reduce the sick leaves and vacation leaves to 15 days/15days.
Emergency leave and birthday off are hereby waived.
Duty meal allowance is fixed at P30.00 only. No more midnight
snacks and double
Rojas, and Vice-Presidents, Exequiel J. Varela Jr. and Avelino
C. Bation, Jr., signed a
Memorandum of Agreement (MOA) wherein respondent agreed
to re-open the hotel subject to certain concessions offered by
DIHFEU-NFL in its Manifesto.
Accordingly, respondent downsized its manpower structure to
100 rank-and-file employees as set forth in the terms of the
MOA. Moreover, as agreed upon in the MOA, respondent also
prepared a new pay scale.
The retained employees individually signed a Reconfirmation of
Employment which embodied the new terms and conditions of
their continued employment, each employee was assisted by
Rojas who also signed the document.
ISSUE:
Whether the non-ratification of the MOA in accordance with
the Union's constitution proven fatal to the validity thereof?
RATIO DECIDENDI:
It must be remembered that after the MOA was signed, the
members of the Union individually signed contracts
denominated as Reconfirmation of Employment. Cullo did not
dispute the fact that of the 87 members of the Union, who
signed and accepted the Reconfirmation of Employment, 71
are the respondent employees in the case at bar. Moreover, it
bears to stress that all the employees were assisted by Rojas,
DIHFEU-NFL's president, who even co-signed each contract.
Stipulated in each Reconfirmation of Employment were the
new salary and benefits scheme. In addition, it bears to stress
that specific provisions of the new contract also made
reference to the MOA. Thus, the individual members of the
union cannot feign knowledge of the execution of the MOA.
Each contract was freely entered into and there is no indication
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
that the same was attended by fraud, misrepresentation or
duress. To this Court's mind, the signing of the individual
Reconfirmation of Employment should, therefore, be deemed
an implied ratification by the Union members of the MOA.
Applied to the case at bar, while the terms of the MOA
undoubtedly reduced the salaries and certain benefits
previously enjoyed by the members of the Union, it cannot
escape this Court's attention that it was the execution of the
MOA which paved the way for the re- opening of the hotel,
notwithstanding its financial distress. More importantly, the
execution of the MOA allowed respondents to keep their jobs.
It would certainly be iniquitous for the members of the Union
to sign new contracts prompting the re-opening of the hotel
only to later on renege on their agreement on the fact of the
non-ratification of the MOA.
In addition, it bears to point out that Rojas did not act
unilaterally when he negotiated with respondent's
management. The Constitution and By-Laws of DIHFEU-NFL
clearly provide that the president is authorized to represent the
union on all occasions and in all matters in
which representation of the union may be agreed or required.
Furthermore, Rojas was properly authorized under a Board of
Directors Resolution to negotiate with respondent, the
pertinent portions of which read:
while the scales of justice usually tilt in favor of labor, the
peculiar circumstances
herein prevent this Court from applying the same in the instant
petition. Even if our laws endeavor to give life to the
constitutional policy on social justice and on the protection of
labor, it does not mean that every labor dispute will be decided
in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and
enforcement in the interest of fair play.
RULING:
WHEREFORE, premises considered, the petition is DENIED.
The Decision dated October 11, 2005, and the Resolution
dated July 13, 2006 of the Court of Appeals in consolidated
labor cases docketed as CA-G.R. SP No. 83831 and CA-G.R. SP
No. 83657, are AFFIRMED.
NORBERTO SORIANO, petitioner, vs. OFFSHORE
SHIPPING AND MANNING CORPORATION, KNUT
KNUTSEN O.A.S., and NATIONAL LABOR RELATIONS
COMMISSION (Second Division), respondents.
G.R. No. 78409 September 14, 1989
FERNAN, C.J.:
FACTS:
Petitioner Norberto Soriano, a licensed Second Marine
Engineer, sought employment and was hired by private
respondent Knut Knutsen O.A.S. through its authorized
shipping agent in the Philippines, Offshore Shipping and
Manning Corporation. As evidenced by the Crew Agreement,
petitioner was hired to work as Third Marine Engineer on
board Knut Provider" with a salary of US$800.00 a month on a
conduction basis for a period of fifteen (15) days. He admitted
that the term of the contract was extended to six (6) months
by mutual agreement on the promise of the employer to the
petitioner that he will be promoted to Second Engineer. Thus,
while it appears that petitioner joined the aforesaid vessel on
July 23, 1985 he signed off on November 27, 1985 due to the
alleged failure of private respondent-employer to fulfill its
promise to promote petitioner to the position of Second
Engineer and for the unilateral decision to reduce petitioner's
basic salary from US$800.00 to US$560.00. Petitioner was
made to shoulder his return airfare to Manila.
In the Philippines, petitioner filed with the Philippine Overseas
Employment Administration (POEA for short), a complaint
23
against private respondent for payment of salary differential,
overtime pay, unpaid salary for November, 1985 and refund of
his return airfare and cash bond allegedly in the amount of
P20,000.00 contending therein that private respondent
unilaterally altered the employment contract by reducing his
salary of US$800.00 per month to US$560.00, causing him to
request for his repatriation to the Philippines.
Dissatisfied, both parties appealed the aforementioned decision
of the POEA to the National Labor Relations Commission.
Complainant-petitioner's appeal was dismissed for lack of merit
while respondents' appeal was dismissed for having been filed
out of time.
ISSUE:
Whether or not there was alteration of the original
employment contract.
RATIO DECIDENDI:
The Court has in many cases involving the construction of
statutes always cautioned against narrowly interpreting a
statute as to defeat the purpose of the legislator and stressed
that it is of the essence of judicial duty to construe statutes so
as to avoid such a deplorable result (of injustice or absurdity)
and that therefore "a literal interpretation is to be rejected if it
would be unjust or lead to absurd results."
There is no dispute that an alteration of the employment
contract without the approval of the Department of Labor is a
serious violation of law.
Specifically, the law provides:
 Article 34 paragraph (i) of the
Labor Code reads:
Prohibited Practices. — It shall be unlawful for any individual,
entity, licensee, or holder of authority:
xxxx
(i) To substitute or alter employment contracts approved and
verified by the Department of Labor from the time of actual
signing thereof by the parties up to and including the period of
expiration of the same without the approval of the Department
of Labor.
In the case at bar, both the Labor Arbiter and the National
Labor Relations Commission correctly analyzed the questioned
annotations as not constituting an alteration of the original
employment contract but only a clarification thereof which by
no stretch of the imagination can be considered a violation of
the above-quoted law. Under similar circumstances, this Court
ruled that as a general proposition, exceptions from the
coverage of a statute are strictly construed. But such
construction nevertheless must be at all times reasonable,
sensible and fair. Hence, to rule out from the exemption
amendments set forth, although they did not materially change
the terms and conditions of the original letter of credit, was
held to be unreasonable and unjust, and not in accord with the
declared purpose of the Margin Law.
The purpose of Article 34, paragraph 1 of the Labor Code is
clearly the protection of both parties. In the instant case, the
alleged amendment served to clarify what was agreed upon by
the parties and approved by the Department of Labor. To rule
otherwise would go beyond the bounds of reason and justice.
As recently laid down by this Court, the rule that there should
be concern, sympathy and solicitude for the rights and welfare
of the working class, is meet and proper. That in controversies
between a laborer and his master, doubts reasonably arising
from the evidence or in the interpretation of agreements and
writings should be resolved in the former's favor, is not an
unreasonable or unfair rule. But to disregard the employer's
own rights and interests solely on the basis of that concern
and solicitude for labor is unjust and unacceptable.
Finally, it is well-settled that factual findings of quasi-judicial
agencies like the National Labor Relations Commission which
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
have acquired expertise because their jurisdiction is confined
to specific matters are generally accorded not only respect but
at times even finality if such findings are supported by
substantial evidence.
In fact since Madrigal v. Rafferty great weight has been
accorded to the interpretation or construction of a statute by
the government agency called upon to implement the same.
RULING:
WHEREFORE, the instant petition is DENIED. The assailed
decision of the National Labor Relations Commission is
AFFIRMED in toto.
THE HONGKONG AND SHANGHAI BANKING
CORPORATION, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and EMMANUEL A.
MENESES, respondents.
G.R. No. 116542, July 30, 1996
PANGANIBAN, J.
FACTS:
Complainant called the bank to inform the latter that he had
an upset stomach and would not be able to report for work.
His superior, however, requested him to report for work
because the department he was then in was undermanned but
complainant insisted that it was impossible for him to report
for work, hence, he was allowed to go on sick leave on that
day. Later on that day, the bank called complainant at his
given Tel. No., but the bank was informed by the answering
party at the phone number given by complainant that
complainant had left early that morning. Complainant
explained that he indeed suffered from an upset stomach and
that he even consulted Dr. Arthur Logos. The bank called up
Dr. Logos to verify the truth of complainant‘s statement but
the doctor denied that he examined or attended to
complainant. For this reason, the bank directed complainant to
explain his acts of dishonesty because allegedly he was not
honest in telling the bank that he had an upset stomach, and
that he consulted Dr. Logos on that day. Complainant filed a
statement pleading for leniency such that instead of
termination, he be given a lighter penalty.
The arbiter held that the offenses of dishonesty contemplated
by the Bank‘s Employee Handbook which would warrant
termination of services are those involving deceit and resulting
in loss of trust and confidence. The arbiter further found that
the private respondents proffered excuse, assuming it to be
false, did not result in any damage to the bank, and therefore
the bank had no reason to lose its trust and confidence in the
private respondent on account of such manner of dishonesty.
Thus, the termination was illegal.
Thus, petitioner argues that the dismissal is reasonable and
valid pursuant to its Employee Handbook.
ISSUE:
Is a provision in the employee‘s handbook stating that any
form of dishonesty shall constitute serious offense(s) calling for
termination valid and binding upon the respondent NLRC?
RATIO DECIDENDI:
The general statement in Employee‘s Handbook must be
understood in the context of the enumeration of offenses, all
of which are directly related to the function of the petitioner as
a banking institution. It is unarguable that private respondent‘s
false information concerning his whereabouts is not a fraud,
nor a false entry in the books of the bank; neither is it a failure
to turn over clients funds, or theft or use of company assets,
or anything analogous as to constitute a serious offense
meriting the extreme penalty of dismissal.
24
Private respondents acts of dishonesty -- his first offense in his
seven years of employment, as noted by the respondent NLRC
-- did not show deceit nor constitute fraud and did not result in
actual prejudice to petitioner. Certainly, such peremptory
dismissal is far too harsh, too severe, excessive and
unreasonable under the circumstances.
Further, none of the enumerations under Art. 282 of the Labor
Code may apply in the instant case.
RULING:
WHEREFORE, the instant petition is hereby DISMISSED, there
being no showing of grave abuse of discretion on the part of
the respondent NLRC.
COLGATE PALMOLIVE PHILIPPINES, INC., petitioners,
vs. HON. BLAS F. OPLE, COLGATE PALMOLIVE SALES
UNION, respondents.
G.R. No. 73681, June 30, 1988
PARAS, J.
FACTS:
The respondent Union filed a Notice of Strike with the Bureau
of Labor Relations (BLR) on ground of unfair labor practice
consisting of alleged refusal to bargain, dismissal of union
officers/members; and coercing employees to retract their
membership with the union and restraining non-union
members from joining the union. On the other hand, petitioner
denied the claims of the respondent Union. It also averred that
the suspension and eventual dismissal of the three employees
were due to infractions committed by them and that the
management reserves the right to discipline erring employees.
The respondent Minister found no merit in the Union's
Complaint for unfair labor practice allegedly committed by
petitioner as regards the alleged refusal of petitioner to
negotiate with the Union, and the secret distribution of survey
sheets allegedly intended to discourage unionism. It also ruled
that the three dismissed employees were ―not without fault‖
but nonetheless ordered the reinstatement of the same. Thus,
this petition.
ISSUE:
Whether the minister erred in directly certifying the Union
based on the latter‘s self-serving assertion that it enjoys the
support of the majority of the sales force in petitioner‘s
company and in ordering the reinstatement of the three
dismissed employees.
RATIO DECIDENDI:
The court ruled that the order of the respondent Minister to
reinstate the employees despite a clear finding of guilt on their
part is not in conformity with law. Reinstatement is simply
incompatible with a finding of guilt. Where the totality of the
evidence was sufficient to warrant the dismissal of the
employees the law warrants their dismissal without making any
distinction between a first offender and a habitual delinquent.
Under the law, respondent Minister is duly mandated to
equally protect and respect not only the labor or workers' side
but also the management and/or employers' side. The law, in
protecting the rights of the laborer, authorizes neither
oppression nor self-destruction of the employer. To order the
reinstatement of the erring employees would in effect
encourage unequal protection of the laws as a managerial
employee of petitioner company involved in the same incident
was already dismissed and was not ordered to be reinstated.
RULING:
WHEREFORE, judgment is hereby rendered REVERSING and
SETTING ASIDE the Order of the respondent Minister, dated
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
December 27, 1985 for grave abuse of discretion. However, in
view of the fact that the dismissed employees are first
offenders, petitioner is hereby ordered to give them separation
pay. The temporary restraining order is hereby made
permanent.
CARLOS DE CASTRO, petitioners, vs. LIBERTY
BROADCASTING NETWORK, INC. and EDGARDO
QUIOGUE, respondents.
G.R. No. 165153, August 25, 2010
BRION, J.
FACTS:
The petitioner, Carlos C. de Castro, worked as a chief building
administrator at LBNI. On May 31, 1996, LBNI dismissed de
Castro on the grounds of serious misconduct, fraud, and willful
breach of the trust reposed in him as a managerial employee.
Allegedly, de Castro solicited and/or received money for his
own benefit from suppliers/dealers/traders, diverted company
funds by soliciting and receiving on different occasions, and
others. Aggrieved, de Castro filed a complaint for illegal
dismissal against LBNI with the NLRC. He maintained that he
could not have solicited commissions from suppliers
considering that he was new in the company. Moreover, the
accusations were belatedly filed as the imputed acts happened
in 1995. The Labor Arbiter ruled in favor of de Castro. NLRC on
motion for reconsideration affirmed the same. However, CA
reversed such decision. In September 23, 2008, the Court
found that de Castro‘s dismissal was based on unsubstantiated
charges.
ISSUE:
Whether de Castro was illegally dismissed.
RATIO DECIDENDI:
The court ruled that de Castro‘s dismissal was based on
unsubstantiated charges. De Castro had not stayed long in the
company and had not even passed his probationary period
when the acts charged allegedly took place. Properly read, we
found that the acts charged against de Castro took place when
he was still under probationary employment a finding
completely different from LBNIs claim that de Castro was
dismissed during his probationary employment. On the
contrary, de Castro was dismissed on the ninth month of his
employment with LBNI, and by then, he was already a regular
employee by operation of law. As a regular employee, de
Castro was entitled to security of tenure and his illegal
dismissal from LBNI justified the awards of separation pay,
back wages, and damages.
RULING:
WHEREFORE, we DENY the Motion for Reconsideration;
accordingly, our Decision dated September 23, 2008 is hereby
AFFIRMED. The National Labor Relations Commission is,
however, directed to SUSPEND the execution of our September
23, 2008 Decision until the Stay Order is lifted or the corporate
rehabilitation proceedings are terminated. Respondent Liberty
Broadcasting Network, Inc. is hereby directed to submit
quarterly reports to the National Labor Relations Commission
on the status of its rehabilitation, subject to the penalty of
contempt in case of noncompliance.
25
MANOLO A. PEAFLOR, petitioner, vs. OUTDOOR
CLOTHING, respondent.
G.R. No. 177114, January 21, 2010
BRION, J.
FACTS:
Peaflor was hired as probationary Human Resource
Department (HRD) Manager of respondent Outdoor Clothing
Manufacturing Corporation. When an Outdoor Clothing
employee suffered injuries in a bombing incident, the company
required Peaflor to attend to her hospitalization needs; he had
to work outside office premises to undertake this task. As he
was acting on the company‘s orders, Peaflor considered
himself to be on official business, but was surprised when the
company deducted six days salary corresponding to the time
he assisted Padilla. Further, while he was away, Buenaobra
was appointed as the new HRD Manager. Feeling betrayed and
discouraged, Peaflor submitted a letter to Syfu declaring his
irrevocable resignation from his employment with Outdoor
Clothing. Then, Peaflor filed a complaint for illegal dismissal
with the labor arbiter, claiming that he had been constructively
dismissed. Outdoor Clothing posited instead that Peaflor had
voluntarily resigned from his work.
ISSUE:
Whether Peaflor filed his letter of resignation before or after
the appointment of Buenaobra as the new/concurrent HRD
manager.
RATIO DECIDENDI:
If the resignation letter was submitted before Syfu‘s
appointment of Buenaobra as new HRD manager, little support
exists for Peaflor‘s allegation that he had been forced to resign
due to the prevailing abusive and hostile working environment.
Buenaobra‘s appointment would then be simply intended to
cover the vacancy created by Peaflor‘s resignation. On the
other hand, if the resignation letter was submitted after the
appointment of Buenaobra, then factual basis exists indicating
that Peaflor had been constructively dismissed as his
resignation was a response to the unacceptable appointment
of another person to a position he still occupied.
In our view, it is more consistent with human experience that
Peaflor indeed learned of the appointment of Buenaobra only
on March 13, 2000 and reacted to this development through
his resignation letter after realizing that he would only face
hostility and frustration in his working environment. Three very
basic labor law principles support this conclusion and militate
against the company‘s case.
1. Settled is the rule that in employee termination
disputes, the employer bears the burden of proving
that the employee‘s dismissal was for just and valid
cause. That Peaflor did indeed file a letter of
resignation does not help the companys case as,
other than the fact of resignation, the company must
still prove that the employee voluntarily resigned.
There can be no valid resignation where the act was
made under compulsion or under circumstances
approximating compulsion, such as when an
employee‘s act of handing in his resignation was a
reaction to circumstances leaving him no alternative
but to resign.
2. Article 4 of the Labor Code states that all doubts in
the interpretation and implementation of the Labor
Code should be interpreted in favor of the
workingman. Peaflor has, at very least, shown serious
doubts about the merits of the company‘s case. In
such contest of evidence, the cited Article 4 compels
us to rule in Peaflor‘s favor.
3. Is the complaint against the employer merely a
convenient afterthought subsequent to an
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
abandonment or a voluntary resignation? We find
from the records that Peaflor sought almost
immediate official recourse to contest his separation
from service through a complaint for illegal dismissal.
This is not the act of one who voluntarily resigned;
his immediate complaints characterize him as one
who deeply felt that he had been wronged.
RULING:
WHEREFORE, we GRANT the petitioners petition for review on
certiorari, and REVERSE the decision and resolution of the
Court of Appeals in CA-G.R. SP No. 87865 promulgated on
December 29, 2006 and March 14, 2007, respectively. We
REINSTATE the decision of the labor arbiter dated August 15,
2001, with the MODIFICATION that, due to the strained
relations between the parties, respondents are additionally
ordered to pay separation pay equivalent to the petitioner‘s
one month‘s salary.
FEM'S ELEGANCE LODGING HOUSE, FENITHA
SAAVEDRA and IRIES ANTHONY SAAVEDRA,
petitioners, vs. The Honorable LEON P. MURILLO, Labor
Arbiter, Regional Arbitration Branch, Region X,
National Labor Relations Commission, Cagayan de Oro
City, ALFONSO GALLETO, GEORGE VEDAD, ROLAND
PANTONIAL, REYNALDO DELAORAO, FELICISIMO
BAQUILID, CECILIO SAJOL, ANNABEL CASTRO,
BENJAMIN CABRERA, RHONDEL PADERANGA, ZENAIDA
GUTIB, AIDA IMBAT and MARIA GRACE ATUEL,
respondents.
G.R. Nos. 117442-43, January 11, 1995
QUIASON, J.:
FACTS:
Petitioner FEM's elegance Lodging House is a business
enterprise engaged in providing lodging accommodations. It is
owned by petitioner Fenitha Saavedra and managed by
petitioner Iries Anthony Saavedra. Private respondents are
former employees of petitioners whose services were
terminated
Sometime after their dismissal from the employment of
petitioners, private respondents separately filed two cases
against petitioners before the NLRC. Private respondents
sought for unpaid benefits such as minimum wage, overtime
pay, rest day pay, holiday pay, full thirteenth-month pay and
separation pay
Apre-arbitration conference of the cases took place before the
Labor Arbiter. It was agreed therein: (1) that both labor cases
should be consolidated; and (2) that the parties would file their
respective position papers within thirty days from said date
after which the cases would be deemed submitted for
resolution
Petitioners filed their position paper. They inquired from the
NLRC whether private respondents had filed their position
paper. The receiving clerk of the NLRC confirmed that as of
said date private respondents had not yet filed their position
paper.
The following events then transpired: on July 8, petitioners
filed a Motion to dismiss for failure of private respondents to
file their position paper within the agreed period (Rollo, p. 38);
on July 15, private respondents belatedly filed their position
paper; on July 18, petitioners filed a Motion to Expunge
[private respondents'] Position Paper from the records of the
case (Rollo, p. 45); and on August 23, the Labor Arbiter issued
a notice of clarificatory hearing, which was set for September 7
(Rollo, p. 47). Prior to the hearing, petitioners filed a Motion to
Resolve [petitioners'] Motion to dismiss and Motion to Expunge
[private respondent'] Position Paper from the Records of the
Case (Rollo, p. 48).
The Labor Arbiter issued the order denying the motions filed
by petitioners. He held that a fifteen-day delay in filing the
26
position paper was not unreasonable considering that the
substantive rights of litigants should not be sacrificed by
technicality. He cited Article 4 of the Labor Code of the
Philippines, which provides that all doubts in the interpretation
thereof shall be resolved in favor of labor. He said that even
under Section 15, Rule 5 of the Revised Rules of Court, a delay
in the filing of a position paper is not a ground for a motion to
dismiss under the principle of exclusio unius est excludio
alteriu.
Hence, the present petition where petitioners charged the
Labor Arbiter with grave abuse of discretion for issuing the
order in contravention of Section 3, Rule V of The New Rules
of Procedure of the NLRC
ISSUE:
Whether or not delay in the filing of a position paper is a
ground for a motion to dismiss under the principle of exclusio
unius est excludio alteriu.
RATIO DECIDENDI:
We dismiss the petition for failure of petitioners to exhaust
their remedies, particularly in seeking redress from the NLRC
prior to the filing of the instant petition. Article 223 of the
Labor code of the Philippines provides that decisions, awards
or orders of the Labor Arbiter are appealable to the NLRC.
Thus, petitioners should have first appealed the questioned
order of the Labor Arbiter to the NLRC, and not to this court.
their omission is fatal to their cause.
However, even if the petition was given due course, we see no
merit in petitioners' arguments. The delay of private
respondents in the submission of their position paper is a
procedural flaw, and the admission thereof is within the
discretion of the Labor Arbiter.
Well-settled is the rule that technical rules of procedure are not
binding in labor cases, for procedural lapses may be
disregarded in the interest of substantial justice, particularly
where labor matters are concerned.
The failure to submit a position paper on time is not on of the
grounds for the dismissal of a complaint in labor cases (The
New Rules of procedure of the NLRC, Rule V, Section 15). It
cannot therefore be invoked by petitioners to declare private
respondents as non-suited. This stance is in accord with Article
4 of the Labor Code of the Philippines, which resolves that all
doubts in the interpretation of the law and its implementing
rules and regulations shall be construed in favor of labor.
Needless to state, our jurisprudence is rich with decisions
adhering to the State's basic policy of extending protection to
Labor where conflicting interests between labor and
management exist. Petitioners cannot claim that they were
denied due process inasmuch as they were able to file their
position paper. The proper party to invoke due process would
have been private respondents, had their position paper been
expunged from the records for mere technicality. Since
petitioners assert that their defense is meritorious, it is to their
best interest that the cases be resolved on the merits. In this
manner, the righteousness of their cause can be vindicated.
HELD:
IN VIEW OF THE FOREGOING, the Court Resolved to DISMISS
the petition for lack of merit.
SO ORDERED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
DOMNA N. VILLAVERT, petitioner, vs. EMPLOYEES'
COMPENSATION COMMISSION & GOVERNMENT
SERVICE INSURANCE SYSTEM (Philippine
Constabulary), respondents.
G.R. No. L-48605 December 14, 1981
FACTS:
Marcellino N. Villavert, son of the petitioner, was an employee
in the Philippine Constabulary as a code verifier. In addition to
his duties, he also performed the duties of a computer
operator and clerk typist. He performed his duties not only as
code verifier but also handled administrative functions,
computer operation and typing jobs due to the shortage of
civilian personnel. On December 11, 1975, Marcelino reported
to his work as usual. He was complaining chest pain and
headache in the late afternoon but because of the voluminous
work, he was still required to render overtime service for
computing allowance and preparing checks for the salary of
the Philippine Constabulary and Integrated National Police
personnel throughout the country on or before December 15,
1975. When he came home due to fatigue he went to his bed
as he arrived without taking his meal. Shortly after, his
mother, the petitioner, noticed that Marcellino was grasping for
breath, perspiring profusely and mumbling incoherent words.
Petitioner tried to wake him but failed to do so. She therefore
rushed him to the hospital but he never regained
consciousness and pronounced that the case of death was
acute hemorrhagic pancreatitis. Petitioner filed claim for the
death benefits of Marcelino to the Government Service
Insurance System together with the affidavit of Lt. Colonel
Felino C. Pacheco attesting that he worked as code verifier and
performed other additional duties. Inter alia, he testified that
the deceased was computer operator consequently subject to
excessive heat and cold. He also testified that the deceased
never drinks alcohol liquor nor smokes nor engages on
immoral habits. To corroborate Pacheco‘s affidavit, Rustico P.
Valenzuela, Chief Clerk of the Constabulary Computer Center
certified that indeed the deceased was performing additional
work load due to the shortage of qualified civilian personnel.
He also certified that on the said date, the deceased was
complaining of chest pain and headache but he was obligated
to carry on work because of the said deadline. He also pointed
out that Marcelino was not able to consult for his routine
physical check-up due to the rotation of his duties. The petition
was denied by GSIS on the ground that acute hemorrhagic
pancreatitis is not an occupational disease and the petitioner
failed to show that there was causal connection between the
fatal ailment of Marcellino and the nature of his work. On the
hand, Medico-Legal of the National Bureau of Investigation
stated that the exact cause of acute hemorrhagic pancreatitis
is still unknown although the most research data are agreed
that physical and mental stresses are strong casual factors in
the development of the disease.
ISSUE:
whether in claiming death benefits of an employee in GSIS, the
causal connection of occupational disease that caused death
and the nature of work should be clearly established?
HELD:
As stated by the Medico Legal Officer of NBI that although the
cause of acute hemorrhagic pancreatitis is unknown,
researches points out that physical and mental stresses are
strong causal factors in the development of the disease. And it
was clearly established based on evidence presented by the
27
petitioner that the nature of the work of that deceased directly
caused or at least aggravates his disease. This was supported
by the fact that he never drinks nor smoke nor engages on
immoral habits. And as mandated in Art. 4 of the Labor Code,
“All doubts in the implementation and interpretation of
this Code, including its rules and implementation shall be
resolved in favor of the laborer.
RULING:
the assailed decision was set aside and GSIS was ordered to
pay petitioner death benefits
RUTH JIMENEZ, Petitioner, v. EMPLOYEES’
COMPENSATION COMMISSION and GOVERNMENT
SERVICE INSURANCE SYSTEM, Respondents.
G.R. No. 58176, March 23, 1984
MAKASIAR, J.:
FACTS:
Petitioner is the widow of the late Alfredo Jimenez, who joined
the government service as a constable in the Philippine
Constabulary.
After rendering service for one year, he was promoted to the
rank of constable second class. He was again promoted to the
rank of sergeant.
The deceased has several times admitted to the hospital due
to sickness. Subsequently, the deceased was again confined at
the Cagayan Provincial Hospital and then transferred to the
AFP V. Luna Medical Center at Quezon City for further
treatment. He complained of off-and-on back pains, associated
with occasional cough and also the swelling of the right
forearm. The doctors found a mass growth on his right
forearm, which grew to the size of 3 by 2 inches, hard and
associated with pain, which the doctors diagnosed as "aortic
aneurysm, medrastinal tumor".
His condition improved somewhat after treatment and he was
released. He was advised to have complete rest and to
continue medication. He was then given light duty inside the
barracks of their company.
Unfortunately, his ailment continued and became more serious
he died in his house.The cause of death, as found by the
doctors, is "bronchogenic carcinoma" which is a malignant
tumor of the lungs.
An administrative hearing was conducted before the PC
Regional Board. It was their official findings that the subject
enlisted man "died in line of duty‖; that the deceased was a PC
member of the 111th PC Company at Tuguegarao, Cagayan;
that he died due to "bronchogenic CA‖; and that he "died not
as a result of his misconduct and did not violate any provisions
of the Articles of War". The Board recommended "that all
benefits due to or become due subject EP be paid and settled
to his legal heirs". Thus, as per records of the GSIS, petitioner
was paid benefits due to her deceased husband under Republic
Act No. 610.
Nevertheless, petitioner filed a claim for death benefits under
PD No. 626, as amended with the respondent GSIS. Said claim
was denied by the GSIS on the ground that her husband‘s
death is not compensable "for the reason that the
injury/sickness that caused his death is not due to the
circumstances of the employment or in the performance of the
duties and responsibilities of said employment"
ISSUE:
Whether or not her husband‘s death from bronchogenic
carcinoma is compensable under the law.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RATIO DECIDENDI:
We cannot deny the fact that the causes of the illness of the
deceased are still unknown and may embrace such diverse
origins which even the medical sciences cannot tell with
reasonable certainty. Indeed, scientists attending the World
Genetic Congress in New Delhi, India, have warned that about
25,000 chemicals used around the world could potentially
cause cancer, and Lawrence Fishbein of the U.S. National
Center for Toxilogical Research pointed out that humans were
daily exposed to literally hundreds of chemical agents via air,
food, medication, both in their industrial home and
environments.
The theory of increased risk is applicable in the instant case.
The sweeping conclusion of the respondent Employees
Compensation Commission to the effect that the cause of the
bronchogenic carcinoma of the deceased was due to his being
a smoker and not in any manner connected with his work as a
soldier, is not in accordance with medical authorities nor with
the facts on record. No certitude can arise from a position of
uncertainty.
We are dealing with possibilities and medical authorities have
given credence to the stand of the petitioner that her husband
developed bronchogenic carcinoma while working as a soldier
with the Philippine Constabulary. The records show that when
the deceased enlisted with the Philippine Constabulary in 1969,
he was found to be physically and mentally healthy. A soldier‘s
life is a hard one. As a soldier assigned to field duty, exposure
to the elements, dust and dirt, fatigue and lack of sleep and
rest is a common occurrence. Exposure to chemicals while
handling ammunition and firearms cannot be discounted. WE
take note also of the fact that he became the security of one
Dr. Emilio Cordero of Anulung, Cagayan, and he always
accompanied the doctor wherever the latter went (p. 26, rec.).
Such assignment invariably involved irregular working hours,
exposure to different working conditions, and body fatigue, not
to mention psychological stress and other similar factors which
influenced the evolution of his ailment.
HELD:
WHEREFORE, THE DECISION APPEALED FROM IS HEREBY SET
ASIDE AND THE GOVERNMENT SERVICE INSURANCE SYSTEM
IS HEREBY ORDERED.
1. TO PAY THE PETITIONER THE SUM OF TWELVE THOUSAND
(P12,000.00) PESOS AS DEATH BENEFITS;
2. TO REIMBURSE THE PETITIONER‘s MEDICAL AND
HOSPITAL EXPENSES DULY SUPPORTED BY PROPER
RECEIPTS; AND
3. TO PAY THE PETITIONER THE SUM OF ONE THOUSAND
TWO HUNDRED (P1,200.00) PESOS FOR BURIAL EXPENSES.
SO ORDERED.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC. petitioner, vs. HON. RUBEN D. TORRES, as
Secretary of the Department of Labor & Employment,
and JOSE N. SARMIENTO, as Administrator of the
PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION, respondents.
[G.R. No. 101279. August 6, 1992.]
FACTS:
DOLE Secretary Ruben D. Torres issued Department Order No.
16 Series of 1991 temporarily suspending the recruitment by
private employment agencies of ―Filipino domestic helpers
going to Hong Kong‖. As a result of the department order
DOLE, through the POEA took over the business of deploying
Hong Kong bound workers.
28
The petitioner, PASEI, the largest organization of private
employment and recruitment agencies duly licensed and
authorized by the POEA to engage in the business of obtaining
overseas employment for Filipino land-based workers filed a
petition for prohibition to annul the aforementioned order and
to prohibit implementation.
ISSUES:
whether or not respondents acted with grave abuse of
discretion and/or in excess of their rule-making authority in
issuing said circulars;
whether or not the assailed DOLE and POEA circulars are
contrary to the Constitution, are unreasonable, unfair and
oppressive; and
whether or not the requirements of publication and filing with
the Office of the National Administrative Register were not
complied with.
HELD:
FIRST, the respondents acted well within in their authority
and did not commit grave abuse of discretion. This is because
Article 36 (LC) clearly grants the Labor Secretary to restrict
and regulate recruitment and placement activities, to wit:
Art. 36. Regulatory Power. — The Secretary of Labor shall
have the power to restrict and regulate the recruitment and
placement activities of all agencies within the coverage of this
title [Regulation of Recruitment and Placement Activities] and
is hereby authorized to issue orders and promulgate rules and
regulations to carry out the objectives and implement the
provisions of this title.
SECOND, the vesture of quasi-legislative and quasi-judicial
powers in administrative bodies is constitutional. It is
necessitated by the growing complexities of the modern
society.
THIRD, the orders and circulars issued are however, invalid
and unenforceable. The reason is the lack of proper publication
and filing in the Office of the National Administrative Registrar
as required in Article 2 of the Civil Code to wit:
Art. 2. Laws shall take effect after fifteen (15) days following
the completion of their publication in the Official Gazatte,
unless it is otherwise provided;
Article 5 of the Labor Code to wit:
Art. 5. Rules and Regulations. — The Department of Labor and
other government agencies charged with the administration
and enforcement of this Code or any of its parts shall
promulgate the necessary implementing rules and regulations.
Such rules and regulations shall become effective fifteen (15)
days after announcement of their adoption in newspapers of
general circulation;
and Sections 3(1) and 4, Chapter 2, Book VII of the
Administrative Code of 1987 which provide:
Sec. 3. Filing. — (1) Every agency shall file with the University
of the Philippines Law Center, three (3) certified copies of
every rule adopted by it. Rules in force on the date of
effectivity of this Code which are not filed within three (3)
months shall not thereafter be the basis of any sanction
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
against any party or persons. (Chapter 2, Book VII of the
Administrative Code of 1987.)
Sec. 4. Effectivity. — In addition to other rule-making
requirements provided by law not inconsistent with this Book,
each rule shall become effective fifteen (15) days from the
date of filing as above provided unless a different date is fixed
by law, or specified in the rule in cases of imminent danger to
public health, safety and welfare, the existence of which must
be expressed in a statement accompanying the rule. The
agency shall take appropriate measures to make emergency
rules known to persons who may be affected by them.
(Chapter 2, Book VII of the Administrative Code of 1987).
Prohibition granted.
G.R. No. L-51353 June 27, 1988
SHELL PHILIPPINES, INC., Plaintiff-Appellee, vs.
CENTRAL BANK OF THE PHILIPPINES
FACTS:
On May 1, 1970, Congress approved the Act imposing a
stabilization tax on consignments abroad (RA 6125)that there
shall be imposed, assessed and collected a stabilization tax on
the gross F.O.B. peso proceeds, based on the rate of exchange
prevailing at the time of receipt of such proceeds, whether
partial or total, of any exportation. And that "Any export
products the aggregate annual F.O.B. value of which shall
exceed five million United States dollars in any one calendar
year during the effectivity of this Act shall likewise be subject
to the rates of tax in force during the fiscal years following its
reaching the said aggregate value."
The apellee Shell Philippines reach 5 M dollars of their by
product petroleum, the Monetary Board issued its Resolution
No. 47 to the stabilization tax effective January 1, 1972. Under
the Central Bank Circular No. 309, implemented by Resolution
No. 47, appellee had to pay the stabilization tax beginning
January 1, 1972, which it did under protest. The n later filed a
suit against Central Bank praying that the resolution be
declared bul and void. The lower court sustained that the
resolution as void. The TC opined mentioning the difference
between calendar year and fiscal year wherein calendar year
refers to one year starting from January to December. Fiscal
year, as it is usually and commonly used, refers to the period
covered between July 1 of a year to June 30 of the following
year. The Central appealed the above cited decision of TC
ISSUES:
WON Monetary Board Resolution No. 47is null and void?
Which should prevail in case of discrepancy, the basic law or
the rule and regulation issued to implement said law?
HELD:
1) YES.
While it is true that under the same law the Central Bank was
given the authority to promulgate rules and regulations to
implement the statutory provision in question but its authority
is limited only to carrying into effect what the law being
implemented provides. The trial court was correct in declaring
that "Monetary Board Resolution No. 47 is void insofar as it
imposes the tax mentioned in Republic Act No. 6125 on the
export seria residue of (plaintiff) the aggregate annual F.O.B.,
value of which reached five million United States dollars in
29
1971 effective on January 1, 1972." The said resolution runs
counter to the provisions of R.A. 6125 which provides that
"(A)ny export product the aggregate annual F.O.B. value of
which shall exceed five million United States dollars in any one
calendar year during the effectivity of this Act shall likewise be
subject to the rates of tax in force during the fiscal year
following its reaching the said aggregate value."
2) In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms
and provisions of the basic law (People v. Lim, 108 Phil. 1091)
The rule or regulation should be within the scope of the
statutory authority granted by the legislature to the
administrative agency. (Davis, Administrative Law, p. 194, 197,
cited in Victorias Milling Co., Inc. v. Social Security
Commission, 114 Phil. 555, 558)
The respondent was liable to pay the tax and that the Central
Bank merely collected the said tax prematurely. There is
likewise no controversy over the rate of tax in force when
payment became due. Thus, the tax refund granted by the trial
court was not proper because the tax paid was in fact, and in
law due to the government at the correct time.
The Court decline to grant to the respondent an amount
equivalent to the interest on the prematurely collected tax
because of the well entrenched rule that in the absence of a
statutory provision clearly or expressly directing or authorizing
payment of interest on the amount to be refunded to the
taxpayer, the Government cannot be required to pay interest.
Likewise, it is the rule that interest may be awarded only when
the collection of tax sought to be refunded was attended with
arbitrariness (Atlas Fertilizer Corp. v. Commission on Internal
Revenue, 100 SCRA 556). There is no indication of
arbitrariness in the questioned act of the appellant.
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), Petitioner, vs. HON. AMADO G.
INCIONG, Deputy Minister, Ministry of Labor and
INSULAR BANK OF ASIA AND AMERICA, Respondents.
G.R. No. L-52415 October 23, 1984
FACTS:
Petitioner filed a complaint against the respondent bank for the
payment of holiday pay before the then Department of Labor,
National Labor Relations Commission, Regional Office No. IV in
Manila. Labor Arbiter Ricarte T. Soriano rendered a decision in
the above-entitled case, granting petitioner's complaint for
payment of holiday pay. The records disclosed that employees
of respondent bank were not paid their wages on unworked
regular holidays as mandated by the Code, particularly Article
208. Accordingly, on February 16, 1976, by authority of Article
5 of the same Code, the Department of Labor (now Ministry of
Labor) promulgated the rules and regulations for the
implementation of holidays with pay. The controversial section
thereof reads:
Sec. 2. Status of employees paid by the month. - Employees
who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than
the statutory or established minimum wage shall be presumed
to be paid for all days in the month whether worked or not.
For this purpose, the monthly minimum wage shall not be less
than the statutory minimum wage multiplied by 365 days
divided by twelve"
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
On April 23, 1976, Policy Instruction No. 9 was issued by the
then Secretary of Labor (now Minister) interpreting the above-
quoted rule, pertinent . When the petitioner filed motion for
the writ of execution to enforce the arbiters decision whereby
the respondent bank was ordered to pay for the daily waged
for the unworked holiday pay in accordance with the award,
respondent bank opposed claiming that it is based on and
justified by Policy Instruction No. 9 which interpreted the rules
implementing P. D. 850. NLRC dismissed the respondents bank
appeal but Minister of Labor through Deputy Minister Amado
Inciong set aside the decision of NLRC and instead dismissed
the instant case for lack of merit.
ISSUE:
Whether or not the decision of a Labor Arbiter awarding
payment of regular holiday pay can still be set aside on appeal
by the Deputy Minister of Labor even though it has already
become final and had been partially executed, the finality of
which was affirmed by the National Labor Relations
Commission sitting en banc, on the basis of an Implementing
Rule and Policy Instruction promulgated by the Ministry of
Labor long after the said decision had become final and
executory.
HELD:
NO.
Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of Labor
are null and void since in the guise of clarifying the Labor
Code's provisions on holiday pay, they in effect amended them
by enlarging the scope of their exclusion.
Article 94 of the Labor Code, as amended by P.D. 850,
provides:
Art. 94. Right to holiday pay. - (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten
(10) workers. ...
The coverage and scope of exclusion of the Labor Code's
holiday pay provisions is spelled out under Article 82 thereof
which reads:
Art. 82. Coverage. - The provision of this Title shall apply to
employees in all establishments and undertakings, whether for
profit or not, but not to government employees, managerial
employees, field personnel members of the family of the
employer who are dependent on him for support domestic
helpers, persons in the personal service of another, and
workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations
From the above-cited provisions, it is clear that monthly paid
employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated
by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting, under Rule IV,
Book Ill of the implementing rules, Section 2 which provides
that: "employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a
salary of not less than the statutory or established minimum
wage shall be presumed to be paid for all days in the month
whether worked or not.
It is elementary in the rules of statutory construction
that when the language of the law is clear and
unequivocal the law must be taken to mean exactly
30
what it says. In the case at bar, the provisions of the Labor
Code on the entitlement to the benefits of holiday pay are
clear and explicit - it provides for both the coverage of and
exclusion from the benefits. This violates Article 4 of the Labor
Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor." Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute
which would have the most beneficial effect that its language
permits (Orlosky vs. Haskell, 155 A. 112.)
Obviously, the Secretary (Minister) of Labor had exceeded his
statutory authority granted by Article 5 of the Labor Code
authorizing him to promulgate the necessary implementing
rules and regulations.
ELDEPIO LASCO, Et. Al., all represented by MARIANO R.
ESPINA, petitioner, vs. UNITED NATIONS REVOLVING
FUND FOR NATURAL RESOURCES EXPLORATION
(UNRFNRE) represented by its operations manager,
DR. KYRIACOS LOUCA, OSCAR N. ABELLA, LEON G.
GONZAGA, JR., MUSIB M. BUAT, Commissioners of
National Labor Relations Commission (NLRC), Fifth
Division, Cagayan de Oro City and IRVING PETILLA,
Labor Arbiter of Butuan City, respondents.
G.R. Nos. 109095-109107
February 23, 1995
QUIASON, J.:
FACTS:
Petitioners were dismissed from their employment
with private respondent, the United Nations Revolving Fund for
Natural Resources Exploration (UNRFNRE), which is a special
fund and subsidiary organ of the United Nations. The
UNRFNRE is involved in a joint project of the Philippine
Government and the United Nations for exploration work in
Dinagat Island.
In the case before the NLRC, the private respondent alleged in
their motion to dismiss that respondent Labor Arbiter had no
jurisdiction over its personality since it enjoyed diplomatic
immunity pursuant to the 1946 Convention on the Privileges
and Immunities of the United Nations. In support thereof,
private respondent attached a letter from the Department of
Foreign Affairs dated August 26, 1991, which acknowledged its
immunity from suit. The letter confirmed that private
respondent, being a special fund administered by the United
Nations, was covered by the 1946 Convention on the Privileges
and Immunities of the United Nations of which the Philippine
Government was an original signatory.
Private respondent issued an order dismissing the complaints
on the ground that private respondent was protected by
diplomatic immunity.
ISSUE:
Whether or not the private respondents, being a special fund
administered by the United Nations are entitled to immunity of
suit in labor disputes.
RATIO DECIDENDI:
Article 223 of the Labor Code provides that decisions of the
NLRC are final and executory. Thus, they may only be
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
questioned through certiorari as a special civil action under
Rule 65 of the Revised Rules of Court.
Convention on the Privileges and Immunities of the Specialized
Agencies of the
United Nations, to which the Philippines was a signatory,
Sections 4 and 5 of Article III thereof:
Sec. 4. The specialized agencies, their property and
assets, wherever located and by whomsoever held
shall enjoy immunity from every form of legal process
except insofar as in any particular case they have
expressly waived their immunity. It is, however,
understood that no waiver of immunity shall extend
to any measure of execution (Emphasis supplied).
Sec. 5. The premises of the specialized agencies shall
be inviolable. The property and assets of the
specialized agencies, wherever located and by
whomsoever held, shall be immune from search,
requisition, confiscation, expropriation and any other
form of interference, whether by executive,
administrative, judicial or legislative action (Emphasis
supplied).
Sec. 2, Article II of the 1987 Constitution:
Sec. 2. The Philippines renounces war as an
instrument of national policy, adopts the generally
accepted principles of international law as part of the
law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity
with all nations.
RULING:
The Office of the Solicitor General is of the view that private
respondent is covered by the mantle of diplomatic immunity.
Private respondent is a specialized agency of the United
Nations. Under Article 105 of the Charter of the United
Nations:
1. The Organization shall enjoy in the territory of its
Members such privileges and immunities as are
necessary for the fulfillment of its purposes.
2. Representatives of the Members of the United
Nations and officials of the Organization shall similarly
enjoy such privileges and immunities as are necessary
for the independent exercise of their functions in
connection with the organization.
Corollary to the cited article is the Convention on the Privileges
and Immunities of the Specialized Agencies of the United
Nations, to which the Philippines was a signatory (Vol. 1,
Philippine Treaty Series, p. 621). We quote Sections 4 and 5 of
Article III thereof:
Sec. 4. The specialized agencies, their property and
assets, wherever located and by whomsoever
held shall enjoy immunity from every form of legal
process except insofar as in any particular case they
have expressly waived their immunity. It is, however,
understood that no waiver of immunity shall
extend to any measure of execution (Emphasis
supplied).
As a matter of state policy as expressed in the
Constitution, the Philippine Government adopts the generally
accepted principles of international law (1987 Constitution, Art.
II, Sec. 2). Being a member of the United Nations and a party
to the Convention on the Privileges and Immunities of the
Specialized Agencies of the United Nations, the Philippine
Government adheres to the doctrine of immunity granted to
the United Nations and its specialized agencies. Both treaties
have the force and effect of law.
31
REPUBLIC OF THE PHILIPPINES, represented by the
NATIONAL PARKS DEVELOPMENT
COMMITTEE, petitioner, vs. THE HON. COURT OF
APPEALS and THE NATIONAL PARKS DEVELOPMENT
SUPERVISORY ASSOCIATION & THEIR
MEMBERS, respondents.
G.R. No. 87676
December 20, 1989
GRIÑO-AQUINO, J.:
FACTS:
National Parks Development Committee (NPDC) was originally
created under EO 30 and later renamed under EO 68. It was
also registered in the Securities and Exchange Commission as
a non-stock and non-profit corporation known as ―The National
Parks Development Committee, Inc.‖ For their failure to submit
certain documents, NPDC was ordered to show cause why its
Certificate of Registration should not be suspended, to which
they replied that they had no objection to the suspension,
cancellation, or revocation of the Certificate of Registration of
NPDC. By virtue of EO 120, NPDC was attached to the
Department of Tourism and was provided with a separate
budget subject to the audit by the Commission on audit.
NPDC Employees Association (NPDCEA) entered into two
collecting bargaining agreements with NPDC. These unions
staged a strike at the Rizal Park, Fort Santiago, Paco Park, and
Pook ni Mariang Makiling alleging unfair labor practices by the
NPDC. The NPDC filed with the Regional Trial Court in Manila a
complaint against the union to declare the strike illegal and to
restrain it on the ground that they have no right to strike as
government employees but they may form a union.
The lower court dismissed the petition assailing that it is the
Department of Labor who has jurisdiction over the case
because there exists an employer-employee relationship
between NPDC and the strikers. The petitioner appealed to the
CA on certiorari but the latter affirmed the decision of the trial
court. Hence, this petition.
ISSUE:
Whether the petitioner, National Parks Development
Committee (NPDC), is a government agency, or a private
corporation, for on this issue depends the right of its
employees to strike.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original charters.
RULING:
The Court ruled that NPDC is an agency of the government,
not a government-owned or controlled corporation, hence, its
employees are covered by the Civil Service rules and
regulations. Its employees are Civil Service employees.
The Court also ruled that ―While NPDC employees are allowed
under the 1987 Constitution to organize and join unions of
their choice, there is as yet no law permitting them to strike.
In case of a labor dispute between the employees and the
government, Section 15 of Executive Order No. 180 dated June
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
1, 1987 provides that the Public Sector Labor- Management
Council, not the Department of Labor and Employment, shall
hear the dispute. Clearly, the Court of Appeals and the lower
court erred in holding that the labor dispute between the NPDC
and the members of the NPDSA is cognizable by the
Department of Labor and Employment.‖
PNOC ENERGY DEVELOPMENT CORPORATION and
MARCELINO TONGCO, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and MANUEL S.
PINEDA, respondents.
G.R. No. 100947
May 31, 1993
NARVASA, C.J.:
FACTS:
Manuel Pineda was employed with the PNOC-ADC as a clerk.
He later on become a Geothermal Construction Secretary
during which he also decided to run for councilor of the
Municipality of Kananga, Leyte. An objection to his candidacy
was raised alleging that he could not actively participate in
politics unless he is officially resigned from PNOC-EDC.
However, nothing resulted from such protest and Pineda
eventually won in the elections. He was proclaimed as a
councilor. Pineda raised a question before the Secretary of
Justice on whether or not he was "considered automatically
resigned upon filing of (his) certificate of candidacy," and
whether or not, in case he was elected, he could "remain
appointed to any corporate offspring of a government-owned
or controlled corporation. Nevertheless, he took his oath of
office and continued working for PNOC-EDC
Eventually, PNOC-EDC notified Pineda that he is separated
from his service upon their [PNOC-EDC] inquiry in their legal
department regarding the status of Pineda as employee in view
of his candidacy for the office of the municipal councilor and
that the said department said that Pineda should be
considered ipso facto resigned upon the filing of his Certificate
of Candidacy. Pineda filed an illegal dismissal case in the NLRC
to which it ruled for Pineda‘s reinstatement and payment of full
backwages. NLRC stated that PNOC-EDC, being a GOCC
incorporated under the Corporation Code, the general law, are
not deemed to be within the coverage of the Civil Service Law,
and consequently their employees, like those of PNOC-EDC,
are subject to the provisions of the Labor Code rather than the
Civil Service Law.
ISSUE:
Whether an employee in a government-owned or controlled
corporation without an original charter nevertheless falls within
the scope of Sec. 66 of the Omnibus Election Code.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original charters.
RULING:
The Court held that the Congress, in reviewing the Omnibus
Election Code, made no effort to distunguis between the two
classes of GOCCs or their employees, particularly as regards
the rule that any employee ―in government-owned and
32
controlled corporations, shall be considered ipso facto resigned
from his office upon filing of his certificate of candidacy.
The Court ruled that Sec. 66 of the Omnibus Election Code
applies to officers and employees in GOCCs, even those
organized under the general laws and therefore not having an
original charter, and even if they do not fall under the Civil
Service Law but under the Labor Code. In other words, Sec. 66
constitutes as a just cause for termination of employment in
addition to those set forth in the Labor Code, as amended.
BENJAMIN C. JUCO, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and NATIONAL HOUSING
CORPORATION, respondents.
G.R. No. 98107
August 18, 1997
HERMOSISIMA, JR., J.:
FACTS:
Petitioner was hired as a project engineer of National housing
Corporation. He was separated from the service for having
been implicated in a crime of theft and/or malversation of
public funds. He filed an illegal dismissal case against the NHC
with the Department of Labor. The Labor Arbiter dismissed the
case stating that it has no jurisdiction over the case. The case
before the Labor Arbiter went up to the Supreme Court which
decided for the Respondent. Thereafter, Petitioner filed with
the Civil Service Commission a complaint for illegal dismissal
which the CSC dismissed for lack of jurisdiction. Subsequently,
petitioner filed with the NLRC a case for illegal dismissal
wherein the case was dismissed on appeal for lack of
jurisdiction.
Respondent NLRC, though Labor Arbiter Caday, ruled that
Juco‘s dismissal was illegal as there was evidence in the record
that the criminal case against Juco was fabricated, prompting
the trial court to dismiss the charges against him and ruled
furthermore that Juco‘s complaint filed was not barred by
prescription. NHC appealed the NLRC‘s decision in which the
latter reversed its earlier decision on the ground of lack of
jurisdiction.
ISSUE:
Whether or not NLRC, or the CSC has jurisdiction over the
case.
RATIO DECIDENDI:
Sec. 2, Article IX of the Philippine Constitution
(1) The civil service embraces all branches,
subdivisions, instrumentalities, and agencies of
the Government, including government-owned
and controlled corporations with original charters.
RULING:
The Court held that it is the NLRC that has jurisdiction over the
case. The National Housing Corporation is a government
owned corporation organized in 1959 in accordance with
Executive Order No. 399, otherwise known as the Uniform
Charter of Government Corporation, dated January 1, 1959. Its
shares of stock are and have been one hundred percent
(100%) owned by the Government from its incorporation
under Act 1459, the former corporation law. Considering the
fact that the NHA had been incorporated under Act 1459, the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
former corporation law, it is but correct to say that it is a
government-owned or controlled corporation whose employees
are subject to the provisions of the Labor Code. The Supreme
Court held that the NHA is now within the jurisdiction of the
Department of Labor and Employment, it being a government-
owned and/or controlled corporation without an original
charter. Thus, the NLRC erred in dismissing petitioner's
complaint for lack of jurisdiction because the rule now is that
the Civil Service now covers only government-owned or
controlled corporations with original charters. Having been
incorporated under the Corporation Law, its relations with its
personnel are governed by the Labor Code and come under
the jurisdiction of the National Labor Relations Commission.
PEOPLE OF THE PHILIPPINES VS. DOMINGO PANIS
GR No. L–58674–77, July 11, 1990
FACTS:
On January 9, 1981, four information were filed in the in the
Court of First Instance (CFI) of Zambales and Olongapo City
alleging that herein private respondent Serapio Abug, "without
first securing a license from the Ministry of Labor as a holder of
authority to operate a fee-charging employment agency, did
then and there wilfully, unlawfully and criminally operate a
private fee charging employment agency by charging fees and
expenses (from) and promising employment in Saudi Arabia"
to four separate individuals. Abug filed a motion to quash
contending that he cannot be charged for illegal recruitment
because according to him, Article 13(b) of the Labor Code says
there would be illegal recruitment only "whenever two or more
persons are in any manner promised or offered any
employment for a fee.‖
Denied at first, the motion to quash was reconsidered and
granted by the Trial Court in its Orders dated June 24, 1981,
and September 17, 1981. In the instant case, the view of the
private respondents is that to constitute recruitment and
placement, all the acts mentioned in this article should involve
dealings with two or more persons as an indispensable
requirement. On the other hand, the petitioner argues that the
requirement of two or more persons is imposed only where the
recruitment and placement consists of an offer or promise of
employment to such persons and always in consideration of a
fee.
ISSUE:
Whether or not Article 13(b) of the Labor Code provides for
the innocence or guilt of the private respondent of the crime of
illegal recruitment
COURT RULING:
The Supreme Court reversed the CFI‘s Orders and reinstated
all four-information filed against private respondent.
The Article 13(b) of the Labor Code was merely intended to
create a presumption, and not to impose a condition on the
basic rule nor to provide an exception thereto.
Where a fee is collected in consideration of a promise or offer
of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be
engaged in the act of recruitment and placement. The words
"shall be deemed" create the said presumption.
33
HELLENIC PHILIPPINE SHIPPING, INC., petitioner,
vs.
EPIFANIO C. SIETE and NATIONAL LABOR RELATIONS
COMMISSION (NLRC), respondents.
G.R. No. 84082 March 13, 1991
CRUZ, J.:
FACTS:
Siete was employed on May 22, 1985, as Master of M/V Houda
G by Sultan Shipping Co., Ltd., through its crewing agent,
herein petitioner. He boarded the vessel on May 24, 1985. On
July 8, 1985, Capt. Wilfredo Lim boarded the vessel and
advised Siete that he had instructions from the owners to take
over its command. On July 12, 1985, Siete filed a complaint
against the petitioner for illegal dismissal and non-payment of
his salary and other benefits under their employment contract.
Petitioner dismissed private respondent because of his failure
to complete with the instruction of Sultan Shipping to erase the
timber load line on the vessel and for his negligence in the
discharge of the cargo at Tripoli that endangered the vessel
and stevedores. The Philippine Overseas Employment
Administration (POEA) dismissed the complaint, holding that
there was valid cause for Siete's removal.
On January 4, 1988, the private respondent appealed to the
NLRC, contending that the records presented by the petitioner
were prepared long after his dismissal. He insisted that he
was dismissed without even being informed of the charges
against him or given an opportunity to refute them. NLRC
reversed the POEA Administrator, holding that the dismissal
violated due process and that the documents submitted by the
petitioner were hearsay, self-serving, and not verified.
ISSUE(s):
Whether the dismissal is illegal for failure to observe due
process.
Liability of the Agency with the Employer for claims which
might arise in connection with the employment contract.
HELD:
Yes.
Substantial evidence has established that the private
respondent was indeed not notified of the charges against him
and that no investigation was conducted to justify his
dismissal.
The Labor Code provides as follows:
Sec. 2. Notice of dismissal. — Any employer who seeks to
dismiss a worker shall furnish him a written notice stating the
particular acts or omission constituting the grounds for his
dismissal.
Sec. 5 xxx The employer shall afford the worker ample
opportunity to be heard and to defend himself with the
assistance of his representative, if he so desires.
Sec. 6. Decision to dismiss. — The employer shall immediately
notify a worker in writing of a decision to dismiss him stating
clearly the reasons therefor.
The petitioner argues that whatever defects might have tainted
the private respondent's dismissal were subsequently cured
when the charges against him were specified and sufficiently
discussed in the position papers submitted by the parties to
the POEA. That argument is unacceptable. The issue before
the POEA was in fact the lack of due process in Siete's
dismissal. The law requires that the investigation be
conducted before the dismissal, not after. That omission
cannot be corrected by the investigation later conducted by
the POEA. As the Solicitor General correctly maintained, the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
due process requirement in the dismissal process is different
from the due process requirement in the POEA proceeding.
Both requirements must be separately observed.
Private employment agencies are jointly and severally liable
with the foreign-based employer for any violation of the
recruitment agreement or the contract of employment. A
verified undertaking was made by the petitioner that it would
"assume joint and solidary liability with the employer for all
claims and liabilities which (might) arise in connection with the
implementation of the contract of employment.
Furthermore, the Supreme Court said that the private
respondent was illegally dismissed because, first, he was not
accorded a fair investigation as required by law, and second,
because the grounds invoked for his separation have not been
proved by the petitioner.
DELIA D. ROMERO, Petitioner,
vs
PEOPLE OF THE PHILIPPINES, ROMULO PADLAN and
ARTURO SIAPNO, Respondents
G.R. No. 171644 November 23, 2011
PERALTA, J.:
FACTS:
The Regional Trial Court (RTC) of Dagupan City, found
petitioner guilty beyond reasonable doubt of the crime of
Illegal Recruitment as defined in paragraph (a) of Article 38 of
Presidential Decree No. 2018.
Sometime in August 2000, ARTURO SIAPNO went to
petitioner's stall. He was convinced by the petitioner that if he
could give her US$3,600.00 for the processing of his papers,
he could leave the country within 1 to 2 weeks for a job
placement in Israel. Arturo was able to secure the amount
needed through relatives help then petitioner processed
Arturo's papers and contacted Jonney Erez Mokra. Jonney
instructed Arturo to attend a briefing in Dau, Mabalacat,
Pampanga.
Afterwards, Arturo left for Israel sometime in September 2000.
He was able to work and receive US$800.00 salary per month.
After three months of stay in Israel, he was caught by the
immigration officials, incarcerated for ten days and was
eventually deported. After arriving in the country, Arturo
immediately sought the petitioner who then promised him that
she would send him back to Israel, which did not happen.
Meanwhile, sometime in September 2000, ROMULO PADLAN
went to petitioner's stall at Calasiao, Pangasinan to inquire
about securing a job in Israel. Convinced by petitioner's words
of encouragement and inspired by a high potential salary,
Romulo asked petitioner the amount of money required in
order for him to be able to go to Israel. Petitioner informed
him that as soon as he could give her US$3,600.00, his papers
would be immediately processed. When he was able to raise
the amount, Romulo went back to petitioner and handed her
the money. Petitioner contacted JonneyErezMokra who
instructed Romulo to attend a briefing at his house in Dau,
Mabalacat, Pampanga. Romulo was able to leave for Israel on
October 26, 2000 and was able to secure a job but
unfortunately, after two and a half months, he was caught by
Israel's immigration police and detained for 25 days. He was
subsequently deported because he did not possess a working
visa. On his return, Romulo demanded from petitioner the
return of his money, but the latter refused and failed to do so.
Petitioner also claims that the testimony of Arturo Siapno
saying that he paid a certain amount of money to the former
must not be given any credence due to the absence of any
receipt or any other documentary evidence proving such.
34
ISSUE:
Whether or not DELIA D. ROMERO is guilty of the act of Illegal
Recruitment.
HELD:
Yes. As testimonies of SIAPNO and PADLAN shows that
petitioner was able to convince the private respondents to
apply for work in Israel after parting with their money in
exchange for the services she would render. Such act of the
petitioner, without a doubt, falls within the meaning of
recruitment and placement as defined in Article 13 (b) of the
Labor Code.
The Court ruled that in illegal recruitment cases, the failure to
present receipts for money that was paid in connection with
the recruitment process will not affect the strength of the
evidence presented by the prosecution as long as the payment
can be proved through clear and convincing testimonies of
credible witnesses.
WHEREFORE, the Petition for Review on Certiorari of petitioner
Delia D. Romero is hereby DENIED. Consequently, the Decision
and Resolution of the Court of Appeals, affirming the Decision
of the Regional Trial Court, finding petitioner guilty beyond
reasonable doubt of the crime of Illegal Recruitment as defined
in paragraph (a) of Article 38 of Presidential Decree (P.D.) No.
2018, are hereby AFFIRMED with the MODIFICATION on the
penalty to be imposed.
[1] ―Art. 38. Illegal Recruitment. — (a) Any recruitment
activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or
non-holders of authority shall be deemed illegal and
punishable under Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement officers may initiate
complaints under this Article.‖ x x x PRESIDENTIAL DECREE
NO. 2018
[2] Article 13 (b) of the Labor Code defines recruitment and
placement as: any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising
for employment, locally or abroad, whether for profit or not:
Provided, that any person or entity which, in any manner,
offers or promises for a fee, employment to two or more
persons shall be deemed engaged in recruitment and
placement.
PEOPLE OF THE PHILIPPINES, Appellee, v. MELISSA
CHUA, Appellant.
G.R. No. 184058: March 10, 2010
CARPIO MORALES, J.:
FACTS:
Appellant was indicted for Illegal Recruitment (Large Scale)
and for five counts of Estafa in violation of Article 38 (a) of the
the New Labor Code of the Philippines, in relation to Art. 13
(b) and (c ) thereof, as further amended by Sec. 6 (a), (1) and
(m) of RA 8042.
Appellant denied the charges. Claiming having worked as a
temporary cashier from January to October, 2002 at the office
of Golden Gate, owned by one Marilyn Calueng, she
maintained that Golden Gate was a licensed recruitment
agency and that Josie, who is her godmother, was an agent.
Admitting having receivedP80,000 each from Marilyn and Tan,
receipt of which she issued but denying receiving any amount
from King, she claimed that she turned over the money to the
documentation officer, one Arlene Vega, who in turn remitted
the money to Marilyn Calueng whose present whereabouts she
did not know.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ISSUE:
Whether or not the appellant is guilty of illegal recruitment?
HELD:
Yes. The term recruitment and placement is defined under
Article 13(b) of the Labor Code of the Philippines as any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring,
or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad,
whether for profit or not. Provided, That any person or entity
which, in any manner, offers or promises for a fee employment
to two or more persons shall be deemed engaged in
recruitment and placement. On the other hand, illegal
recruitment is defined under Article 38, paragraph (a) of the
Labor Code, as amended.
From the foregoing provisions, it is clear that any recruitment
activities to be undertaken by non-licensee or non-holder of
contracts, or as in the present case, an agency with an expired
license, shall be deemed illegal and punishable under Article 39
of the Labor Code of the Philippines. And illegal recruitment is
deemed committed in large scale if committed against three or
more persons individually or as a group.
Thus for illegal recruitment in large scale to prosper, the
prosecution has to prove three essential elements, to wit: (1)
the accused undertook a recruitment activity under Article
13(b) or any prohibited practice under Article 34 of the Labor
Code; (2) the accused did not have the license or the authority
to lawfully engage in the recruitment and placement of
workers; and (3) the accused committed such illegal activity
against three or more persons individually or as a group.
In the present case, Golden Gate, of which appellant admitted
being a cashier from January to October 2002, was initially
authorized to recruit workers for deployment abroad. Per the
certification from the POEA, Golden Gates license only expired
on February 23, 2002 and it was delisted from the roster of
licensed agencies on April 2, 2002.
Appellant was positively pointed to as one of the persons who
enticed the complainants to part with their money upon the
fraudulent representation that they would be able to secure for
them employment abroad. In the absence of any evidence that
the complainants were motivated by improper motives, the
trial courts assessment of their credibility shall not be
interfered with by the Court.
Even if appellant were a mere temporary cashier of Golden
Gate, that did not make her any less an employee to be held
liable for illegal recruitment as principal by direct participation,
together with the employer, as it was shown that she actively
and consciously participated in the recruitment process.
Assuming arguendo that appellant was unaware of the illegal
nature of the recruitment business of Golden Gate that does
not free her of liability either. Illegal Recruitment in Large
Scale penalized under Republic Act No. 8042, or The Migrant
Workers and Overseas Filipinos Act of 1995, is a special law, a
violation of which is malum prohibitum, not malum in se.
Intent is thus immaterial. And that explains why appellant was,
aside from Estafa, convicted of such offense.
35
IMELDA DARVIN, petitioner, vs. HON. COURT OF
APPEALS and PEOPLE OF THE PHILIPPINES,
respondents.
[G.R. No. 125044. July 13, 1998]
ROMERO, J.:
FACTS:
Imelda Darvin was convicted of simple illegal recruitment
under the Labor Code by the RTC. It stemmed from a
complaint of one Macaria Toledo who was convinced by the
petitioner that she has the authority to recruit workers for
abroad and can facilitate the necessary papers in connection
thereof. In view of this promise, Macaria gave her P150,000
supposedly intended for US Visa and air fare.
On appeal, the CA affirmed the decision of the trial court in
toto, hence this petition.
ISSUE:
Whether or not appellant is guilty beyond reasonable doubt of
illegal recruitment.
HELD:
No.
Art. 13 of the Labor Code provides the definition of recruitment
and placement as: xxx b.) any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers
and includes referrals, contract services, promising or
advertising for employment locally or abroad, whether for
profit or not: Provided, that any reason person or entity which,
in any manner, offers or promises for a fee employment to two
or more persons shall be deemed engaged in recruitment and
placement.
Art. 38 of the Labor Code provides:
a.)Any recruitment activities, including the prohibited practices
enumerated under Article 43 of the Labor Code, to be
undertaken by non-licensees or non-holders of authority shall
be deemed illegal and punishable under Article 39 of the Labor
Code.
Applied to the present case, to uphold the conviction of
accused-appellant, two elements need to be shown: (1) the
person charged with the crime must have undertaken
recruitment activities: and (2) the said person does not have a
license or authority to do so.
In the case, the Court found no sufficient evidence to prove
that accused-appellant offered a job to private respondent. It
is not clear that accused gave the impression that she was
capable of providing the private respondent work abroad.
What is established, however, is that the private respondent
gave accused-appellant P150,000.
By themselves, procuring a passport, airline tickets and foreign
visa for another individual, without more, can hardly qualify as
recruitment activities. Aside from the testimony of private
respondent, there is nothing to show that appellant engaged in
recruitment activities.
At best, the evidence proffered by the prosecution only goes
so far as to create a suspicion that appellant probably
perpetrated the crime charged. But suspicion alone is
insufficient, the required quantum of evidence being proof
beyond reasonable doubt. When the People‘s evidence fail to
indubitably prove the accused‘s authorship of the crime of
which he stand accused, then it is the Court‘s duty, and the
accused‘s right, to proclaim his innocence.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
EDGARDO M. PANGANIBAN, Petitioner, v. TARA
TRADING SHIP MANAGEMENT INC. AND SHINELINE
SDN BHD, Respondents.
G.R. No. 187116: October 18, 2010
MENDOZA,J.:
FACTS:
In November 2005, petitioner was hired by respondent Tara
Trading Ship management, Inc.(Tara),in behalf of its foreign
principal, respondent Shinline SDN BHD (Shinline) to work as
an Oiler on board MV Thailine 5 with a monthly salary of
US$409.00. Sometime in April 2006, petitioner began
exhibiting signs of mental instability. He was repatriated on
May 24, 2006 for further medical evaluation and management.
Petitioner was referred by respondents to the Metropolitan
Medical Center where he was diagnosed to be suffering from
brief psychotic disorder.
Despite his supposed total and permanent disability and
despite repeated demands for payment of disability
compensation, respondents allegedly failed and refused to
comply with their contractual obligations. Petitioner filed a
Complaint against respondents for total and permanent
disability benefits, reimbursement of medical and hospital
expenses, moral and exemplary damages, and attorney‘s fees
equivalent to 10% of total claims.
Respondents maintained that petitioner requested for an early
repatriation and arrived at the point of hire on May 24, 2006;
that while on board the vessel, he confided to a co-worker,
Henry Santos, that his eating and sleeping disorders were due
to some family problems; that Capt. Zhao, the master of the
vessel, even asked him if he wanted to see a doctor; that he
initially declined; that on May 22, 2006, petitioner approached
Capt. Zhao and requested for a vacation and early repatriation;
that the said request was granted; that upon arrival, petitioner
was subjected to a thorough psychiatric evaluation; and that
after a series of check-ups, it was concluded that his illness did
not appear to be work-related. Respondents argued that
petitioner was not entitled to full and permanent disability
benefits under the Philippine Overseas Employment
Administration Standard Employment Contract (POEA SEC)
because there was no declaration from the company-
designated physician that he was permanently and totally
disabled and that the claim for damages was without basis as
no bad faith can be attributed to them.
The Labor Arbiter ruled in favor of the petitioner. Respondents
appealed to the NLRC which affirmed the decision of the Labor
Arbiter. The Court of Appeals reversed the decision of the
NLRC.
ISSUE:
Whether the Petitioner is entitled to full and total disability
benefits.
Whether the illness is work related.
HELD: No.
In Mabuhay Shipping Services, Inc. v. NLRC, the Court held
that the death of a seaman even during the term of
employment does not automatically give rise to compensation.
This is not the work-related instance contemplated by the
provisions of the employment contract in order to be entitled
to the benefits. Otherwise, every seaman would automatically
be entitled to compensation because the nature of his work is
not land-based and the submission of the seaman to the
company-designated physician as to the nature of the illness
suffered by him would just be an exercise of futility.
36
The fact is that the petitioner failed to establish, by substantial
evidence, that his brief psychotic disorder was caused by the
nature of his work as oiler of the company-owned vessel. The
Court can only surmise that the brief psychotic disorder
suffered by him was brought about by a family problem. His
daughter was sick and, as a seafarer, he could not just decide
to go home and be with his family. Even the psychiatric report
prepared by the evaluating private psychiatrist of petitioner
shows that the hospitalization of petitioners youngest daughter
caused him poor sleep and appetite.
Further, Section 20-B of the POEA Amended Standard Terms
and Conditions Governing the Employment of Filipino Seafarers
on Board Ocean-Going Vessels (POEA-SEC) provides for
compensation and benefits for injury or illness suffered by a
seafarer. It says that, in order to claim disability benefits under
the Standard Employment Contract, it is the company-
designated physician who must proclaim that the seaman
suffered a permanent disability, whether total or partial, due to
either injury or illness, during the term of the latter‘s
employment. In this case, the findings of respondents
designated physician that petitioner has been suffering from
brief psychotic disorder and that it is not work-related must be
respected. The Court commiserates with the petitioner, but
absent substantial evidence from which reasonable basis for
the grant of benefits prayed for can be drawn, the Court is left
with no choice but to deny his petition, lest an injustice be
caused to the employer.
PEOPLE OF THE PHILIPPINES, appellee, vs. VICENTA
MEDINA LAPIS, ANGEL MATEO, AIDA DE LEON (at
large) and JEAN AM-AMLAW (at large), appellants.
G.R. Nos. 145734-35 October 15, 2002
PANGANIBAN, J.:
FACTS:
The RTC found accused Vicenta Medina Lapis and Angel Mateo
are pronounced guilty of violating Section 6, of Republic Act
No. 8042, the Migrant Workers and Overseas Filipinos Act of
1995 and Article 315 (2) (a) of the Revised Penal Code.
On March, 1998 and thereafter in Makati City, the above-
named accused, conspiring and confederating with each other,
did then and there willfully, unlawfully and feloniously recruit
the herein complainants, MELCHOR F. DEGSI and PERPETUA L.
DEGSI for employment as an office worker and as a cook or
mechanic in Japan, for and in consideration thereof, they were
required to pay the amount of P158,600.00 as alleged
placement and processing fees, which the complainants
delivered and paid the amount of P158,600.00 Philippine
Currency, knowing that they have no capacity whatsoever and
with no intention to fulfill their promise, but merely as a
pretext, scheme or excuse to get or exact money from said
complainant. For their part, appellants deny that they were
engaged in recruitment activities, and that they promised
foreign employment to the victims.
ISSUE(S):
Whether the accused are guilty of: (1) illegal recruitment
committed by a syndicate; and (2) estafa under Art. 315 of the
RPC.
HELD:
(1) Yes.
Illegal recruitment is committed when these two elements
concur: (1) the offenders have no valid license or authority
required by law to enable them to lawfully engage in the
recruitment and placement of workers, and (2) the offenders
undertake any activity within the meaning of recruitment and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
placement defined in Article 13(b) or any prohibited practices
enumerated in Article 34 of the Labor Code.
Undisputed is the fact that the former did not have any valid
authority or license to engage in recruitment and placement
activities. It is also important to determine whether illegal
recruitment committed by appellants can be qualified as a
syndicated illegal recruitment or an offense involving economic
sabotage.
Section 6 of RA 8042, otherwise known as the Migrant Workers
and Overseas Filipinos Act of 1995, provides that illegal
recruitment shall be considered an offense involving economic
sabotage when it is committed by a syndicate or carried out by
a group of three or more persons conspiring and confederating
with one another. In several cases, illegal recruitment has
been deemed committed by a syndicate if carried out by a
group of three or more persons conspiring and/or
confederating with each other in carrying out any unlawful or
illegal transaction, enterprise or scheme defined under Article
38(b) of the Labor Code.
In this case, it cannot be denied that all four (4) accused --
Jane Am-amlaw, Aida de Leon, Angel Mateo and Vicenta
Medina Lapis participated in a network of deception. Verily, the
active involvement of each in the various phases of the
recruitment scam formed part of a series of machinations.
(2) Yes
Under the cited provision of the Revised Penal Code, estafa is
committed by any person who defrauds another by using a
fictitious name; or by falsely pretending to possess power,
influence, qualifications, property, credit, agency, business; by
imaginary transactions or similar forms of deceit executed prior
to or simultaneous with the fraud. Moreover, these false
pretenses should have been the very reason that motivated
complainants to deliver property or pay money to the
perpetrators of the fraud. While appellants insist that these
constitutive elements of the crime were not sufficiently shown
by the prosecution, the records of the case prove otherwise.
The requirement that the fraudulent statements should have
been made prior to or simultaneous with the actual payment
was satisfied. Verily, by their acts of falsely representing
themselves as persons who had the power and the capacity to
recruit workers for abroad, appellants induced complainants to
pay the required fees. There is estafa if, through insidious
words and machinations, appellants deluded complainants into
believing that, for a fee, the latter would be provided overseas
jobs.
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.
MERCY LOGAN y CALDERON, accused-appellant.
G.R. Nos. 135030-33. July 20, 2001
DE LEON, JR., J.:
FACTS:
On August 1994, in Quezon City, , the above-named accused,
without any authority of law, did then and there, wilfully,
unlawfully and feloniously, for a fee, enlist, recruit and promise
employment/job placement abroad to the following persons, to
wit: (1) Rodrigo Acorda; (2) Orlando Velasco; and (3) Florente
Casia. Without first securing the required license or authority
from the Department of Labor and Employment.
Rodrigo was required by the appellant to pay a placement fee
in the amount of One Hundred Fifty Thousand Pesos
(P150,000.00). Rodrigo initially paid Ten Thousand Pesos
(P10,000.00) to the appellant on January 31, 1994 and he was
required to fill up an application form. While his travel
documents were allegedly being processed, Rodrigo was asked
by the appellant to pay the additional amount of Twenty
37
Thousand Pesos (P20,000.00). Likewise, the other private
complainants relied on the accused‘s promises of employment
in Japan. Appellant Mercy Logan denied that she swindled the
private complainants of their money nor promised them any
overseas employment. In her appeal, appellant Mercy Logan
essentially claims that she did not represent herself as a job
recruiter to the private complainants.
ISSUE:
Whether Logan is liable for estafa and illegal recruitment in
large scale.
HELD: Yes
The essential elements of the crime of illegal recruitment in
large scale , are as follows: 1) the accused engages in the
recruitment and placement of workers, as defined under Article
13(b) or in any prohibited activities under Article 34 of the
Labor Code; 2) the accused has not complied with the
guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an
authority to recruit and deploy workers, whether locally or
overseas; and 3) the accused commits the same against three
(3) or more persons, individually or as a group.
It has been established that the three (3) private complainants
met with the appellant on separate occasions where she
promised them employment either as construction workers or
piggery helpers in Japan for a fee. Despite subsequent
payment of her required fees, she failed to secure for the three
(3) private complainants any overseas employment. Clearly,
the appellant was engaged in large scale recruitment and
placement activities which were illegal for the reason that she
had no license nor authority from the Secretary of Labor and
Employment.
It is well-settled that a person who has committed illegal
recruitment may be charged and convicted separately of the
crime of illegal recruitment under the Labor Code and estafa
under paragraph 2(a) of Article 315 of the Revised Penal Code.
The reason for the rule is that the crime of illegal recruitment
is malum prohibitum where the criminal intent of the accused
is not necessary for conviction, while the crime of estafa is
malum in se where the criminal intent of the accused is
necessary for conviction. In other words, a person convicted
under the Labor Code may also be convicted of offenses
punishable by other laws. Art. 314 provides that: Any person
who shall defraud another by any of the means mentioned
hereinbelow xxx
Xxx xxx xxx
2. By means of any of the following false pretenses or
fraudulent acts executed prior to or simultaneously with the
commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess
power, influence, qualifications, property, credit, agency,
business or imaginary transactions; or by means of other
similar deceits.
xxx xxx xxx
The elements of the above mode of committing estafa are: a)
that there must be a false pretense, fraudulent act or
fraudulent means; b) that such false pretense, fraudulent act
or fraudulent means must be made or executed prior to or
simultaneously with the commission of the fraud; c) that the
offended party must have relied on the false pretense,
fraudulent act or fraudulent means, i.e., he was induced to
part with his money or property because of the false pretense,
fraudulent act or fraudulent means; and, d) that as a result
thereof, the offended party suffered damage.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PEOPLE OF THE PHILIPPINES VS. MELISSA CHUA
G.R. NO. 187052 SEPTEMBER 13, 2012
Villarama, Jr.,J:
Facts:
Private complainants allege that they were offered
employment abroad by the accused. They contend that the
accused assured them of a job abroad after payment of 80,000
pesos placement fee. However, they were not deployed even
after paying the required fee. It is later found out that the
respondent is neither authorized nor licensed to recruit
workers for overseas employment. Respondent denies
recruiting the complainants asserting that she is merely a
cashier in their agency. Accused was convicted for illegal
recruitment in large and estafa.
Issue:
Whether or not the accused is guilty for illegal recruitment in
large.
Ratio Decidendi:
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring
or confederating with one another. It is deemed committed in
large scale if committed against three (3) or more persons
individually or as a group.
The persons criminally liable for the above offenses are the
principals, accomplices and accessories. In case of juridical
persons, the officers having control, management or direction
of their business shall be liable.
Ruling:
The Court held that in order to hold a person liable for illegal
recruitment, it is enough that he or she promised or offered
employment for a fee. Appellant Chua engaged in recruitment
when she represented to private complainants that she could
send them to work abroad upon submission of the required
documents and payment of the placement fee.
PEOPLE OF THE PHILIPPINES VS. LEONIDA MERIS Y
PADILLA
G.R. NOS. 117145-50 & 117447 MARCH 28, 2000
Kapunan,J:
Facts:
Private complainants allege that the accused introduced them
to a certain recruiter Micua who assured them of a job in Hong
Kong after payment of placement fees. The complainants paid
the said fee to the accused. However, the complainants were
never deployed. Some complainants asked for the return of
their placement fees but the accused failed to return them.
The complainants filed a case for illegal recruitment in large
and estafa. The accused contends that she is also a victim of
Micua and that she only helped the complainants out of good
heart.
Issue:
Whether or not the accused engaged in illegal recruitment.
38
Ratio Decidendi:
Illegal recruitment is conducted in a large scale if perpetrated
against three (3) or more persons individually or as a group.
This crime requires proof that the accused: (1) engaged in the
recruitment and placement of workers defined under Article 13
or in any of the prohibited activities under Article 34 of the
Labor Code; (2) does not have a license or authority to lawfully
engage in the recruitment or and placement of workers; and
(3) committed the infraction against three or more, persons,
individually or as a group.
Ruling:
The Court held that the prosecution undoubtedly proved that
accused-appellant, without license or authority, engaged in
recruitment and placement activities. The accused took a direct
and active participation in the recruitment of the private
complainants by referring and persuading them to apply for
deployment abroad.
DOUGLAS MILLARES AND ROGELIO LAGDA VS.
NATIONAL LABOR RELATIONS COMMISSION
G.R. NO. 110524 JULY 29, 2002
Kapunan,J:
Facts:
Petitioners are employed as Chief Engineers in ESSO
International Shipping Company Ltd. (Esso International). Both
of them applied for an extended leave which were not
approved by the company. They were considered to be absent
without leave and later dismissed for abandonment and
unavailability for contractual sea service. Petitioners filed a
case for illegal dismissal. NLRC ruled that they were casual
employees. Petitioners insist that they should be considered
regular employees, since they have rendered services which
are usually necessary and desirable to the business of their
employer, and that they have rendered more than twenty (20)
years of service.
Issue:
Whether or not the petitioners were regular employees.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of the
Labor Code. Their employment is governed by the contracts
they sign everytime they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time.
Ruling:
The Court held that there are certain forms of employment
which also require the performance of usual and desirable
functions and which exceed one year but do not necessarily
attain regular employment status under Article 280. Overseas
workers including seafarers fall under this type of employment
which are governed by the mutual agreements of the parties.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
MARCIAL GU-MIRO VS. ROLANDO ADORABLE
G.R. NO. 160952 AUGUST 20, 2004
Ynares-Santiago, J:
Facts:
Petitioner Marcial Gu-Miro was formerly employed as a Radio
Officer of respondent Bergesen D.Y. Philippines, which acted
for and in behalf of its principal Bergesen D.Y. ASA, on board
its different vessels. Petitioner‘s services were terminated due
to the installation of labor saving devices which made his
services redundant. Upon his forced separation from the
company, petitioner requested that he be given the incentive
bonus plus the additional allowances he was entitled to.
Respondent company, however, refused to accede to his
request. Petitioner filed before the NLRC a complaint for the
payment of incentive bonus and back wages contending that
he is a regular employee of respondent company and thus,
entitled to backwages or, at the very least, separation pay.
Issues:
Whether or not the petitioner is a regular employee.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of Labor
Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under
the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the nature of the work
or services to be performed is seasonal in nature and
employment is for the duration of the season.
Ruling:
The Court held that petitioner cannot be considered as a
regular employee notwithstanding that the work he performs is
necessary and desirable in the business of respondent
company. An exception is made in the situation of seafarers.
The exigencies of their work necessitate that they be employed
on a contractual basis.
ROBERTO RAVAGO VS. ESSO EASTERN MARINE LTD.
G.R. NO. 158334 MARCH 14, 2005
Callejo, Sr., J:
Facts:
Petitioner Ravago was employed as an assistant engineer in
Esso Eastern Marine Ltd. Due to an accident, he was found to
have partial permanent inability and was declared not fit to
return to his job as seaman. Ravago filed a complaint for illegal
dismissal with prayer for reinstatement, backwages, damages
and attorney‘s fee insisting that he was fit to resume to work
and he was not a mere contractual employee because the
respondents regularly and continuously rehired him for 23
years and, for his continuous service, was awarded a CEIP
payment upon his termination from employment. Respondent
denied that Ravago was dismissed without notice and just
cause. Rather, his services were no longer engaged in view of
39
the disability he suffered which rendered him unfit to work as
a seafarer.
Issue:
Whether or not petitioner was a regular employee.
Ratio Decidendi:
Seafarers are considered contractual employees. They can not
be considered as regular employees under Article 280 of Labor
Code. Their employment is governed by the contracts they
sign every time they are rehired and their employment is
terminated when the contract expires. Their employment is
contractually fixed for a certain period of time. They fall under
the exception of Article 280 whose employment has been fixed
for a specific project or undertaking the completion or
termination of which has been determined at the time of the
engagement of the employee or where the nature of the work
or services to be performed is seasonal in nature and
employment is for the duration of the season.
Ruling:
The Court ruled that seamen and overseas contract workers
are not covered by the term "regular employment" as defined
in Article 280 of the Labor Code. Furthermore, petitioner‘s
contract did not provide for separation benefits. In this
connection, it is important to note that neither does the POEA
standard employment contract for Filipino seamen provide for
such benefits. As a Filipino seaman, petitioner is governed by
the Rules and Regulations Governing Overseas Employment
and the said Rules do not provide for separation or termination
pay.
OSM SHIPPING PHILIPPINES, INC. VS. NATIONAL
LABOR RELATIONS COMMISSION
G.R. NO. 138193 MARCH 5, 2003
Panganiban, J:
Facts:
Private respondent was hired by OSM Shipping for and in
behalf of its principal, Phil Carrier Shipping Agency Services Co.
(PC-SLC) to board its vessel M/V Princess Hoa as a Master
Mariner for a contract period of ten (10) months. Private
respondent alleged that from the start of his work with M/V
Princess Hoa, he was not paid any compensation at all and
was forced to disembark the vessel sometime in January 1995
because he cannot even buy his basic personal necessities.
Private respondent filed a case for illegal dismissal and non-
payment of salaries, overtime pay and vacation pay. OSM
alleged that the shipowner changed its plans on the use of the
vessel. Instead of using it for overseas trade, it decided to use
it in the coastwise trade, thus, the crewmembers hired never
left the Philippines and were merely used by the shipowner in
the coastwise trade. Considering that the M/V Princess Hoa
was a foreign registered vessel and could not be used in the
coastwise trade, the shipowner converted the vessel to
Philippine registry.Petitioner contends that using the vessel in
coastwise trade and subsequently chartering it to another
principal had the effect of novating the employment contract.
Issue:
Whether or not OSM Shipping is liable to the private
respondent.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Ratio Decidendi:
An employment contract, like any other contract, is perfected
at the moment (1) the parties come to agree upon its terms;
and (2) concur in the essential elements thereof: (a) consent
of the contracting parties, (b) object certain which is the
subject matter of the contract and (c) cause of the obligation.
A contract cannot be novated by the will of only one party.
Ruling:
The Court held that the non-deployment of the ship overseas
did not affect the validity of the perfected employment
contract. After all, the decision to use the vessel for coastwise
shipping was made by petitioner only and did not bear the
written conformity of private respondent. Petitioner, as
manning agent, is jointly and severally liable with its principal.
TRANS ACTION OVERSEAS CORPORATION VS.
SECRETARY OF LABOR
G.R. NO. 109573 SEPTEMBER 5, 1997
Romero, J:
Facts:
Petitioner company is a private fee-charging employment
agency. Private respondents sought employment as domestic
helpers through petitioner's employees. They failed to be
deployed despite payment of placement fees. They demanded
refund but it was proved unavailing, thus they instituted a
complaint against the petitioner. Upon finding the petitioner
liable, Secretary of Labor cancelled its license. Petitioner
asserts that Secretary of Labor acted with grave abuse of
discretion in cancelling its license as the Philippine Overseas
Employment Agency has sole jurisdiction to hear and decide
illegal recruitment cases, including the authority to cancel
recruitment licenses.
Issue:
Whether or not the Secretary of Labor can cancel recruitment
licenses.
Ratio Decidendi:
A non-licensee or non-holder of authority means any person,
corporation or entity which has not been issued a valid license
or authority to engage in recruitment and placement by the
Secretary of Labor, or whose license or authority has been
suspended, revoked or cancelled by the POEA or the Secretary.
Ruling:
The Court held that the power to suspend or cancel any license
or authority to recruit employees for overseas employment is
concurrently vested with the POEA and the Secretary of Labor.
40
MANUELA S. CATAN/M.S. CATAN PLACEMENT AGENCY
vs. THE NATIONAL LABOR RELATIONS COMMISSION,
PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION and FRANCISCO D. REYES
G.R. No. 77279 April 15, 1988
CORTES, J.:
FACTS:
Petitioner, a duly licensed recruitment agency, recruited
private respondent to work for Ali and Fahd Shabokshi Group
as a steelman. The contract is for one year from May 15, 1981
to May 14, 1982, and renewable automatically if neither of the
parties notifies the other party of his wishes to terminate the
contract by at least one month prior to the expiration of the
contractual period. It was then automatically renewed when
private respondent was not repatriated by his Saudi employer
but instead was assigned to work as a crusher plant operator
where his right ankle was crushed under the machine he was
operating. After the expiration of the renewed term, private
respondent returned to the Philippines and his ankle was
operated where he incurred expenses. Private respondent filed
a claim on the basis of the provision in the employment
contract that the employer shall compensate the employee if
he is injured or permanently disabled in the course of
employment. POEA rendered judgment in favor of the private
respondent which was affirmed by the NLRC on appeal.
However petitioner disclaims liability on the ground that its
agency agreement with the Saudi principal had already expired
when the injury was sustained, and that he was injured while
the original employment contract had already expired.
ISSUE:
Whether or not private respondent has a valid claim for
compensation due to the injury sustained against the
petitioner.
RATIO DECIDENDI:
A private employment agency may be sued jointly and
solidarily with its foreign principal for violations of the
recruitment agreement and the contracts of employment.
RULING:
Private respondent‘s contract of employment cannot be said to
have expired as it was automatically renewed because of the
non-notice of termination given one month prior as indicated in
the contract agreement. Therefore, the injury was sustained
during the lifetime of the contract. Even if indeed petitioner
and the Saudi principal had already severed their agency
agreement at the time private respondent was injured,
petitioner may still be sued for a violation of the employment
contract because no notice of the agency agreement‘s
termination was given to the private respondent. No evidence
was also introduced that private respondent was not medically
fit to work when he returned to Saudi. By purchasing a ticket
for his return to work, it is as if petitioner had certified his
fitness to work.
Wherefore, in view of the foregoing, the petition is dismissed
for lack of merit, with costs against petitioner.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ROYAL CROWN INTERNATIONALE VS. NATIONAL
LABOR RELATIONS COMMISSI0N and VIRGILIO P.
NACIONALES
G.R. No. 78085 October 16, 1989
CORTES, J.:
FACTS:
In 1983, Royal Crown International, a private employment
agency, recruited and deployed Virgilio P. Nacionales for
employment with ZAMEL as an architectural draftsman in Saudi
Arabia. On February 13, 1984, ZAMEL terminated the
employment of private respondent on the ground that his
performance was below at par. For the next three successive
days, the private respondent was detained at his quarters and
was not allowed to report to work until his exit papers were
ready. On February 16, 1984, he was made to board a plane
bound for the Philippines. Private respondent filed a complaint
for illegal termination against petitioner and ZAMEL with POEA.
Petitioner filed a motion for reconsideration but the NLRC
denied it for lack of merit. Hence petitioner filed a petition for
review.
ISSUE:
Whether or not private employment agency may be held jointly
and severally liable with foreign-based employer for any claim
arising from the employment contracts recruited and deployed
abroad.
RATIO DECIDENDI:
For petitioner voluntarily assumed solidarity liability under
various contractual undertakings it submitted to the Bureau of
Employment services.
RULING:
Under Section 2 Rule V Book 1 of Rules to Implement the
Labor Code, the requirement to operate a private employment
agency for overseas recruitment and placement is to submit a
document whereby it assumed all responsibilities for the
proper use of its recruited and deployed for overseas
employment. And also it is required to file with the Bureau a
formal appointment or agency contract executed by foreign-
based employer in its favor to recruit and hire personnel for
the former, which contained a provision empowering it to sue
and be sued jointly and solidarity with foreign principle for any
of the violations of the recruitment and the contracts of
employment. This is under Section 10 (a) (2), Rule V Book 1,
Rules to Implement the Labor Code. It was required as well to
post such cash and surety bonds as determined by the
Secretary of Labor to guarantee compliance with prescribed
recruitment procedure, rules and regulations and terms and
conditions of employment as appropriate. It cannot be denied
that the petitioner is an agent of ZAMEL, one of the documents
presented by the petitioner contains an admission that it is the
representative and agent of ZAMEL.
Wherefore, the Court Resolved to DISMISS the instant
petition.
41
PEOPLE OF THE PHILIPPINES VS. REYDANTE CALONZO
Y AMBROSIO
G.R. Nos. 115150-55 September 27, 1996
BELLOSILLO, J.:
FACTS:
Calonzo informed Danilo de los Reyes and Belarmino
Torregrosa that they can provide them employment abroad
specifically Italy, so they took stock of their assets to came up
with figures sufficient to process their application abroad. They
boarded to Thailand and were told that their visas for Italy will
be processed there. Calonzo collected money again from them
purportedly to defray the expenses for their visas, only to find
out that Calonzo returned to the Philippines. De los Reyes and
Torregrosa were able to go back to the Philippines through the
help of one Loreta Castaeda. The promises remained
unfulfilled so they looked again for Calonzo but this time their
quarry had already absconded. Upon verification, the POEA
certified that neither RAC Business Agency nor Calonzo was
authorized to recruit workers for employment abroad. Three
other victims appeared and narrated the same experience.
However Calonzo disclaims all the allegations of the
complainants.
ISSUE:
Whether or not the acts qualify as illegal recruitment.
RATIO DECIDENDI:
Illegal recruitment in large scale exists when a person
undertakes: (1) any recruitment activity prohibited under the
Labor Code; (2) does not have authority or license to engage
in such recruitment; and (3) commits the same against three
or more persons.
RULING:
In this case, the testimony of the complainants evidently
showed that Calonzo was engaged in recruitment activities in
large scale. Firstly, he deluded complainants into believing that
jobs awaited them in Italy by distinctly impressing upon them
that he had the facility to send them for work abroad.
Secondly, POEA likewise certified neither Calonzo nor RAC
Business Agency was licensed to recruit workers for
employment abroad. Thirdly, Calonzo recruited five (5)
workers thus making the crime illegal recruitment in large scale
constituting economic sabotage. The Court also reiterated the
rule that a person convicted for illegal recruitment under the
Labor Code can be convicted for violation of the Revised Penal
Code provisions on estafa provided the elements of the crime
are present. The Court is convinced that Calonzo defrauded
complainants through deceit. They were obviously misled into
believing that he could provide them employment in Italy. As a
result, the five (5) complainants who desperately wanted to
augment their income and improve their lot parted with their
hard-earned money.
Wherefore, the Court rendered judgment finding Calonzo
guilty of Illegal Recruitment in Large Scale.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
HORTENCIA SALAZAR VS. HON. TOMAS D. ACHACOSO,
in his capacity as Administrator of the Philippine
Overseas Employment Administration, and FERDIE
MARQUEZ
G.R. No. 81510 March 14, 1990
SARMIENTO, J.:
FACTS:
On October 21, 1987, Rosalie Tesoro filed with the POEA a
complaint against petitioner. Having ascertained that the
petitioner had no license to operate a recruitment agency,
public respondent Administrator Tomas D. Achacoso issued his
challenged Closure and Seizure order. The POEA brought a
team to the premises of Salazar to implement the order. There
it was found that petitioner was operating Hannalie Dance
Studio. Before entering the place, the team served said Closure
and Seizure order on a certain Mrs. Flora Salazar who
voluntarily allowed them entry into the premises. Mrs. Flora
Salazar informed the team that Hannalie Dance Studio was
accredited with Moreman Development (Phil.). However, when
required to show credentials, she was unable to produce any.
Inside the studio, the team chanced upon twelve talent
performers — practicing a dance number and saw about
twenty more waiting outside. The team confiscated assorted
costumes which were duly receipted for by Mrs. Asuncion
Maguelan and witnessed by Mrs. Flora Salazar. A few days
after, petitioner filed a letter with the POEA demanding the
return of the confiscated properties. They alleged lack of
hearing and due process, and that since the house the POEA
raided was a private residence, it was robbery. On February 2,
1988, the petitioner filed this suit for prohibition. Although the
acts sought to be barred are already fait accompli, thereby
making prohibition too late, we consider the petition as one
for certiorari in view of the grave public interest involved.
ISSUE:
Whether or not the Secretary of Labor may validly issue
warrants of search and seizure.
RATIO DECIDENDI:
The Court reiterated that the Secretary of Labor, not being a
judge, may no longer issue search or arrest warrants. Hence,
the authorities must go through the judicial process. To that
extent, it was declared Article 38, paragraph (c), of the Labor
Code, unconstitutional and of no force and effect.
RULING:
The Closure and Seizure order in question, assuming, ex gratia
argumenti, that it was validly issued, is clearly in the nature of
a general warrant. The law pronounced that a warrant must
identify clearly the things to be seized, otherwise, it is null and
void. Under Article III, Section 2, of the l987 Constitution, it is
only judges, and no other, who may issue warrants of arrest
and search, exception is in cases of deportation of illegal and
undesirable aliens, whom the President or the Commissioner of
Immigration may order arrested, following a final order of
deportation, for the purpose of deportation.
Wherefore, the petition is granted. Article 38, paragraph (c)
of the Labor Code is declared unconstitutional and null and
void. The respondents are ORDERED to return all materials
seized as a result of the implementation of Search and Seizure
Order No. 1205.
42
PEOPLE OF THE PHILIPPINES VS. SAMINA ANGELES y
CALMA
G.R. No. 132376 April 11, 2002
YNARES, SANTIAGO J.:
FACTS:
Maria Tolosa Sardeo was working in Saudi Arabia when she
received a call from her sister, Priscilla, who was in Paris,
France. Priscilla advised Maria to return to the Philippines and
await the arrival of her friend, accused Samina Angeles, who
would assist in processing her travel and employment
documents to Paris. Heeding her sister‘s advice, Maria returned
to the Philippines. Marceliano Tolosa likewise received and
followed the same instructions from his sister Priscilla. They
eventually met the accused to whom they gave the money
required for the processing of their documents. Precila Olpindo
and Vilma Brina also received the same instructions from
Precila‘s sister who met the accused in Belgium. Precila‘s sister
told her that the accused could help process her documents for
employment in Canada. The accused told Precila and Vilma
that it was easier to complete the processing of their papers if
they would start from Jakarta, Indonesia rather than from
Manila. So Precila, Vilma and accused Angeles flew to Jakarta.
However, accused returned to the Philippines after two days,
leaving the two behind. Precila tried to get in touch with the
accused but could not be reached anymore. Maria and
Marceliano also began looking for her after she disappeared
with their money. The POEA presented a certification to the
effect that accused Angeles was not duly licensed to recruit
workers here and abroad. The accused, however, contended
that she never represented to the complainants that she could
provide them with work abroad. She pointed out that none of
the complainants testified on what kind of jobs were promised
to them, how much they would earn, the length of their
employment and even the names of their employers, which are
basic subjects a prospective employee would first determine.
ISSUE:
Whether or not the accused Samina Angeles is guilty of illegal
recruitment.
RATIO DECIDENDI:
Illegal recruitment is qualified when a non-holder or non-
licensee offers or promises for a fee employment abroad to
two or more persons.
RULING:
To prove illegal recruitment, it must be shown that the
accused gave complainants the distinct impression that he had
the power or ability to send complainants abroad for work such
that the latter were convinced to part with their money in
order to be employed. To be engaged in the practice of
recruitment and placement, it is plain that there must at least
be a promise or offer of an employment from the person
posing as a recruiter whether locally or abroad. In this case,
none of the complainants testified that the accused lured them
to part with their hard-earned money with promises of jobs
abroad. On the contrary, they were all consistent in saying that
their relatives abroad where the ones who contacted them and
urged them to meet the accused who would assist them in
processing their travel documents. The accused did not have
to make promises of employment as these were already done
by complainants‘ relatives. However, clearly Samina Angeles
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
defrauded complainants by falsely pretending to possess the
power and capacity to process their travel documents.
Wherefore, in view of the foregoing, accused Samina Angeles
is found guilty beyond reasonable doubt of the crime of estafa
as to the cases of Maria Tolosa Sardeo, Marceliano Tolosa and
Precila Olpindo, and was acquitted for failure of the
prosecution to prove her guilt beyond reasonable doubt
against Vilma Brina and the filed case for illegal recruitment.
PEOPLE OF THE PHILIPPINES VS. LOMA GOCE y
OLALIA, DAN GOCE and NELLY D. AGUSTIN
G.R. No. 113161 August 29, 1995
REGALADO, J.:
FACTS:
On January 1988, an information for illegal recruitment
committed by a syndicate and in large scale, punishable under
Articles 38 and 39 of the labor code as amended by PD 2018,
filed against Dan and Loma Goce and Nelly Agustin in the RTC
of Manila, alleging that in or about during the period comprised
between May 1986 and June 25, 1987, both dates inclusive in
the City of Manila, the accused conspired and represent
themselves to have the capacity to recruit Filipino workers for
employment abroad. On January 1987, a warrant of arrest was
issued against the 3 accused bot none of them was arrested.
Hence, on February 1989, the RTC ordered the case archived
but issued a standing warrant os arrest against the accused.
Thereafter, knowing the whereabouts of the accused, Rogelio
Salado requested for a copy of the warrant of arrest and
eventually Nelly Agustin was apprehended by the Paranaque
Police. Agustin's counsel filed a motion to revive the case and
requested to set a hearing for purpose of due process and for
accused to immediately have her day in court. On the
arraignment, Agustin pleaded not guilty and the trial went on
with four complainants testified for the prosecution and
receipts of the processing fees they paid. Agustin for the
defense asserted that Goce couple were licensed recruiters but
denied her participation in the recruitment and denied
knowledge of the receipts as well. On November 1993, trial
court rendered judgment finding that Agustin as a principal in
the crime of illegal recruitment in large scale with sentence of
life imprisonment and pay P100,000.00.
ISSUES:
Whether or not the act of introducing complainants to the
Goce couple falls within the meaning of illegal recruitment and
placement under Article 13 (b) in relation to Article 34 of the
Labor Code.
RATIO DECIDENDI:
The recruitment and placement refers to any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring
or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad,
whether for profit or not; provided, that any person or entity
which, in any manner, offers or promises for a fee employment
to two or more persons shall be deemed engaged in
recruitment and placement.
RULING:
The testimonial evidence shows that she indeed further
committed acts constitutive of illegal recruitment. All four
43
prosecution witnesses testified that it was Agustin whom they
initially approached regarding their plans of working overseas.
It was from her that they learned about the fees they had to
pay, as well as the papers that they had to submit. It was after
they had talked to her that they met the accused spouses who
owned the placement agency. As correctly held by the trial
court, being an employee of the Goces, it was therefore logical
for appellant to introduce the applicants to said spouses, they
being the owners of the agency. As such, appellant was
actually making referrals to the agency of which she was a
part. She was therefore engaging in recruitment activity.
Agustin played a pivotal role in the operations of the
recruitment agency, working together with the Goce couple.
There is illegal recruitment when one gives the impression of
having the ability to send a worker abroad. It is undisputed
that appellant gave complainants the distinct impression that
she had the power or ability to send people abroad for work
such that the latter were convinced to give her the money she
demanded in order to be so employed. It cannot be denied
that Agustin received from complainants various sums for
purpose of their applications. Her act of collecting from each of
the complainants‘ payment for their respective passports,
training fees, placement fees, medical tests and other sundry
expenses unquestionably constitutes an act of recruitment
within the meaning of the law.
Wherefore, the appealed judgment of the court a quo is
hereby affirmed in toto, with costs against accused-appellant
Nelly D. Agustin.
PEOPLE OF THE PHILIPPINES VS. ABELARDO
AVENDAÑO
G.R. No. 96277-88 December 2, 1992
GRIÑO-AQUINO, J.:
FACTS:
Six (6) separate information for Illegal Recruitment of some 38
workers were filed against Abelardo Avendaño, who
represented himself to have the capacity to contract, enlist and
transport Filipino workers for employment abroad, did, then
and there, wilfully, unlawfully and feloniously, for a fee, recruit
and promise employment/job placement abroad to the
complainants. The cases were consolidated and jointly tried.
The accused was proven to be the Treasurer of MCBRAJ Agro-
Industrial Development Company (MAINDECO) located in
Malabon City which is also his residence. The company is not
licensed nor authorized to recruit workers for overseas
employment. On the other hand, the accused tried to show
that MAINDECO was really engaged in the construction
business, and was duly registered with the Securities and
Exchange Commission. Avendaño claimed that was just
appointed treasurer of the corporation and, as such, he
received payments and issued receipts.
ISSUE:
Whether or not the accused Abelardo Avendaño is guilty of
illegal recruitment.
RATIO DECIDENDI:
Illegal recruitment, when committed by a syndicate or in large
scale shall be considered an offense involving economic
sabotage. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
carrying out any unlawful or illegal transaction, enterprise or
scheme, and it is deemed committed in large scale if
committed against three (3) or more persons individually or as
a group.
RULING:
It is admitted that MAINDECO is not licensed or authorized by
the Department of Labor and Employment to engage in
recruitment of persons for overseas employment.
Consequently, the recruitment activities undertaken by
MAINDECO are illegal. The accused admitted that the
complainants, who paid for certificates of stock of MAINDECO,
were told by the President of the corporation that they would
be sent to Papua, New Guinea pursuant to the joint venture
tuna industry. The accused was aware that the complainants
were offered job opportunities in Papua, New Guinea. The
assurance that they would be sent abroad, in addition to being
stockholders of the corporation, impelled the complainants to
give their money to the accused. Thus, aside from being
required to pay for the certificates of stock, the complainants
were likewise required to submit documents, such as bio-data,
birth certificates, marriage contracts, clearances and
certificates of previous employment. Such acts constitute offer
or promise for employment abroad with a fee.
Wherefore, in view of the foregoing, judgment is hereby
rendered finding accused Abelardo Avendaño guilty beyond
reasonable doubt of the crime of Illegal Recruitment
committed in large scale, thus constituting economic sabotage.
G.R. No. 96621 October 21, 1992
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
JOEY BODOZO y BULA, and NIMFA BODOZO y
NERI, accused-appellant.
CAMPOS, JR., J.:
FACTS:
When the accused Nimfa Bodozo was in Luna, La, Union, she
told the private complainants, who are simple farmers, and at
the time unemployed, that she was recruiting workers for
employment in Saudi Arabia and Singapore. The accused
Nimfa Bodozo required the five (5) private complainants to
submit to her, in addition to their respective applications, NBI
clearances and medical certificates in connection with their
applications. The private complainants Prudencio Renon and
Fernando Gagtan were told by the accused Nimfa Bodozo that
their salary in Saudi Arabia was US$200.00 a month, while the
accused Nimfa Bodozo assured private complainant, Angelino
Obiacoro, Ludovico Gagtan and Domingo Obiacoro that they
were going to be paid, by their respective employers, in
Singapore, the amount of Singapore 16.00 dollars a day. The
private complainant Prudencio Renon and Fernando Gagtan
submitted their application forms, duly filled up, passports,
their NBI clearances and medical certificates to the accused
Nimfa Bodozo in their residence at Quirino Avenue, Manila,
Domingo Obiacoro, Angelino Obiacoro and Ludovico Gagtan
likewise submitted to the accused their NBI clearances and
medical certificates as required by the accused. Moreover, the
accused demanded from the private complainant Prudencio
Renon the amount of P19,000.00 in connection with his
application for employment abroad. Of the said amount,
P15,000.00 was to be used by the accused as processing fee
for the application and papers of the private complainant for
his employment abroad Prudencio Renon paid to the accused
Nimfa Bodozo, on October 3, 1988, the amount of P15,000.00
for which the said accused signed a Receipt. The mother of
Prudencio Renon paid the balance of P4,000.00 to the same
44
accused but the latter did not issue any receipt for said
amount.
The accused Nimfa Bodozo demanded from the private
complainant Fernando Gagtan the amount of P20,000.00 in
connection with his application for employment abroad.
Fernando Gagtan paid to the accused Nimfa Bodozo, also on
October 3, 1988, the amount of P12,000.00 for which the said
accused signed and issued Receipts and the amount of
P8,000.00 through Maxima Gagtan the mother of Fernando
Gagtan, for which the accused Nimfa Bodozo issued a Receipt
dated April 8, 1989.
The accused Nimfa Bodozo demanded from Domingo Obiacoro
the amount of P20,000.00 in connection with hi application for
employment abroad. Of the amount, P10,000.00 will be used
for the purchase of a plane ticket for the private complainant
for Singapore and the balance of P10,000.00 was to be used
as placement fee for the application of the private complainant
for employment abroad. Domingo Obiacoro paid P10,000.00 to
the accused Nimfa Bodozo in the house of the friend of the
accused in Luna, La Union but the accused did not issue any
Receipt for the amount at the time. Domingo Obiacoro paid
the balance of P10,000.00 to the accused Nimfa Bodozo in the
house of the accused Joey Bodozo later signed and issued a
Receipt for the said amount of P20,000.00.
The accused Joey Bodozo demanded from Angelino Obiacoro
the payment of P20,000.00 in connection with the latter's
application for employment abroad. Angelino Obiacoro gave to
the accused Joey Bodozo the amount of P10,000.00 in two (2)
installments on different occasion for which the accused Joey
Bodozo later signed and issued a Receipt.
The accused Joey Bodozo likewise demanded from Ludovico
Gagtan the payment of the amount of P20,000.00 in
connection with his application for employment abroad.
Ludovico Gagtan, through his mother, Maxima Gagtan, gave to
the accused Nimfa Bodozo the amount of P10,000.00 but the
latter failed to issue any receipt at that time. However,
considering that the private complainant did not have the
amount of P10,000.00 to pay the balance of the P20,000.00
demanded by the accused, but the latter offered to advance
the amount for the account of private complainant for which
the latter and his mother, Maxima Gagtan, signed a
"Promissory Note" in favor of the accused Joey
Bodozo. However, the accused added the amount of P4,000.00
to the P10,000.00 purportedly advanced by the accused for the
private complainant by the way of interests on said loan. The
accused Nimfa Bodozo later signed and issued a Receipt for
the amount of P10,000.00 remitted to her by the mother of
Ludivico Gagtan.
ISSUE:
Whether Spouses Badozo are guilty of Illegal Recruitment
RULING:
YES.
Article 38 (a) of the Labor Code provides as follows:
Art. 38. Illegal Recruitment. — (a) Any
recruitment activities, including the
prohibited practices enumerated under
Article 34 of this Code, to be undertaken by
the non-licensees or non-holders of authority
shall be deemed illegal and punishable under
Article 39 of this Code. The Ministry of Labor
and Employment or any law enforcement
officer may initiate complaints under this
Article. (Emphasis supplied.)
Under Article 13 (b) Recruitment and
Placement is defined as:
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Any act of canvassing, enlisting, contracting
transporting, utilizing, hiring or procuring
workers and includes referrals, contract
services, promising or advertising for
employment, locally or abroad, whether for
profit or not. Provided that any person or
entity which, in any manner, offers or
promises for a fee employment to two or
more persons shall be deemed engaged in
recruitment and placement. (Emphasis
supplied.)
It should be noted that any of the acts mentioned in Article 13
(b) can lawfully be undertaken only by the licensees or holders
of authority to engage in the recruitment and placement
workers.
The crime of illegal recruitment has two
elements:
1 The offender is a non-license or non-holder
of authority to lawfully engage in the
recruitment or placement of workers; and
2 That the offender undertakes either any
recruitment activities defined under Article
13 (b), or any prohibited practices
enumerated under Article 34 of the Labor
Code.
In this case at bar, it is undisputed that accused-appellants
Joey Bodozo and Nimfa Bodozo are neither licensed not
authorized to recruit workers for overseas employment as
shown by the certification issued by the Philippine Overseas
Employment Administration (POEA).
Accused-appellants want this Court to believe that they merely
helped private complainants apply for overseas employment.
Evidences on record, however, show otherwise. Accused-
appellants not only asked private complainants to fill up
application forms but also to submit to them their NBI
clearances, passports and medical certificates. In addition
thereto, accused-appellants collected payment for processing
fee and other sundry expenses from private complainants, all
which constitutes acts of recruitment within the meaning of the
law.
PEOPLE OF THE PHILIPPINES vs. TAN TIONG MENG
alias "TOMMY TAN"
G.R. No. 120835-40, April 10, 1997
PADILLA, J.:
FACTS:
Accused-appellant Tan Tiong Meng alias "Tommy Tan", using a
private employment recruiting agency, enlist and transport
Filipino workers for employment abroad and promise
employment in Taiwan when in fact he did not possess the
authority or license from the Philippine Overseas Employment
Administration to do so. He was charged with Illegal
Recruitment in Large Scale and six (6) counts of estafa. The
Court finds the accused guilty beyond reasonable doubt of the
crime of illegal recruitment in large scale. In the appeal, Tan
contends that he merely acted as a collector of money for the
principal recruiter Borja who made the representations that he
could give the applicants jobs in Taiwan. He maintains that he
merely received commissions from the transactions and that
the deceit was employed not by him but by Borja who
introduced him as a job recruiter.
ISSUE:
Whether the elements of the illegal recruitment are present in
the present case.
45
RATIO:
Yes. The Labor Code defines recruitment and placement as
"(A)ny act of canvassing, enlisting, contracting, transporting,
utilizing, hiring or procuring workers, and includes referrals,
contract services, promising or advertising for employment,
locally or abroad, whether for profit or not; Provided, that any
person or entity which, in any manner, offers or promises for a
fee employment to two or more persons shall be deemed
engaged in recruitment and placement." The Labor Code
prohibits any person or entity, not authorized by the POEA,
from engaging in recruitment and placement activities. The
argument that the deceit was employed by Borja and not by
accused-appellant is untenable. All the complainants agreed
that it was Tan who assured them of jobs in Taiwan. The
assurances were made intentionally to deceive the would-be
job applicants to part with their money. It is clear that
accused-appellant's acts of accepting placement fees from job
applicants and representing to said applicants that he could
get them jobs in Taiwan constitute recruitment and placement
under the above provision of the Labor Code. Likewise,
Accused-appellant's guilt of six (6) separate crimes of estafa
has likewise been proven because the Court reiterated the rule
that a person convicted for illegal recruitment under the Labor
Code can be convicted for violation of the Revised Penal Code
provisions on estafa provided the elements of the crime are
present, to wit: (a) that the accused defrauded another by
abuse of confidence or by means of deceit, and (b) that
damage or prejudice capable of pecuniary estimation is caused
to the offended party or third person. Both elements have
been proven in this case.
RULING:
WHEREFORE, the judgment appealed from finding accused-
appellant Tan Tiong Meng alias ―Tommy Tan‖ guilty of illegal
recruitment in large scale and six (6) counts of estafa, is
hereby AFFIRMED. Costs against accused-appellant. SO
ORDERED.
PEOPLE OF THE PHILIPPINES vs. DELIA SADIOSA y
CABENTA
G.R. No. 107084. May 15, 1998
ROMERO, J.:
FACTS:
Arsenia Conse went to Nueva Ecija where she met the four
complainants. She enticed the four to apply for overseas
employment. Apparently convinced by Conse, the four went
with her and introduced them to accused-appellant Delia
Sadiosa. On that occasion, Sadiosa assured the four that she
could dispatch them to Kuwait and forthwith demanded from
each of them for processing fee. The four did give accused-
appellant the money demanded. However, when they asked
for the return of their money, accused-appellant refused and
ignored their demand. Consequently, the four filed the
complaint for illegal recruitment against Sadiosa. It also
testified that Sadiosa was neither licensed nor authorized to
recruit workers for overseas employment. Sadiosa resolutely
denied having a hand in the illegal recruitment, claiming that
she merely received the money on behalf of one Mrs. Ganura
who owned the recruitment agency as an officer. Accused-
appellant further claimed that although she was not listed in
the POEA as an employee of the recruitment agency of Mrs.
Ganura, she had a special power of attorney issued by her
employer to receive payments from applicants.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

ISSUE: RATIO:

Whether the elements of illegal recruitment in a large scale are No. It is settled that the essential elements of the crime of
exist in the present case. illegal recruitment in large scale are: (1) the accused engages
in the recruitment and placement of workers, as defined under
RATIO: Article 13 (b) or in any prohibited activities under Article 34 of
the Labor Code; (2) accused has not complied with the
Yes, the information filed against accused-appellant sufficiently
guidelines issued by the Secretary of Labor and Employment,
shows that it is for the crime of illegal recruitment in large
particularly with respect to the securing of a license or an
scale. Under the Labor Code, the essential elements of the
authority to recruit and deploy workers, either locally or
crime of illegal recruitment in large scale are as follows: (1)
overseas; and (3) accused commits the same against three (3)
the accused engages in the recruitment and placement of
or more persons, individually or a group. In the present case,
workers, as defined under Article 13 (b) or in any prohibited
appellant's active participation in the recruitment process of
activities under Article 34 of the Labor Code; (2) accused has
complainants belies her claim of innocence. Complainants'
not complied with the guidelines issued by the Secretary of
recruitment was initiated by appellant during her initial
Labor and Employment, particularly with respect to the
meeting with Romeo Paguio. She gave the impression to
securing of a license or an authority to recruit and deploy
Romeo Paguio and the complainants that her cohort, Rosa
workers, whether locally or overseas; and (3) accused commits
Abrero, could send workers for employment abroad. She
the same against three or more persons, individually or as a
introduced Rosa Abrero to Romeo Paguio. Both women
group. It alleges that accused-appellant, knowing fully well
assured the departure of complainants to Taiwan within one
that she was not a duly licensed job recruiter, falsely
month from payment of the placement fee of P40,000.00 per
represented that she could secure employment as domestic
person. They even claimed that complainants would work as
helpers abroad for the four complainants. Accused-appellant
factory workers for a monthly salary of $850.00 per person.
promised the four complainants employment as domestic
Moreover, it was appellant who informed Romeo Paguio that
helpers in Kuwait. All the essential elements of the crime of
complainants' scheduled trip to Taiwan would be on October
illegal recruitment in large scale, which we have enumerated
10, 1991, instead of the original departure date of September
above, are present in this case.
25, 1991, due to some problems on their visas and travel
documents. Hence, the elements of illegal recruitment are
RULING:
present.

WHEREFORE, the appealed decision of the Regional Trial Court RULING:

of Pasay City, Branch 113 finding appellant Delia Sadiosa y
Cabenta GUILTY beyond reasonable doubt of the crime of
illegal recruitment in large scale and imposing on her life
imprisonment, the payment of the fine of P100,000.00 and the
reimbursement of the amounts defrauded from complainants is
hereby AFFIRMED. Costs against accused-appellant. SO
ORDERED.
WHEREFORE, Premises considered, the decision of the Court
of Appeals, finding appellant ANITA BAUTISTA guilty beyond
reasonable doubt of the crime of Illegal Recruitment in Large
Scale (Criminal Case Nos. 92-102377) and Estafa (Criminal
Case Nos. 92-102378, 92-102379, 92-102389) is AFFIRMED.
No costs. SO ORDERED.

PEOPLE OF THE PHILIPPINES vs. ANITA BAUTISTA y PEOPLE OF THE PHILIPPINES vs. NELIA CORONACION
LATOJA y NOQUE and EDUARDO AQUINO y AQUINO
G.R. No. 113547 February 9, 1995 G.R. No. 97845 September 29, 1994

PUNO, J.: KAPUNAN, J.:

FACTS:
FACTS:
Accused Anita Bautista approached Romeo Paguio and offered
The accused representing to have the capacity to contract,
job openings abroad. At that time, Paguio had relatives who
enlist and transport Filipino workers for employment abroad,
were interested to work abroad. Bautista introduced Paguio to
recruit and promise employment in Saudi Arabia to the five
Abrico as a person who could facilitate immediate employment
persons without first having secured the required license or
in Taiwan. Abrero informed him that the applicants could leave
authority from the Ministry of Labor. The trial court found
for Taiwan within a period of one-month from the payment of
Coronacion and Aquino guilty as charged and the prosecution
placement fees and she promised Paguio and complainants
likewise proved Coronacion and Eduardo do not have any
that the latter could leave for Taiwan before September 25,
license or authority from POEA to recruit workers for overseas
1991, but they failed. Paguio secured a certification From
employment.
POEA attesting that Bautista and Abrero are not licensed or
authorized to recruit workers for overseas employment hence,
ISSUE:
complaining about their being victims of illegal recruitment by
Abrero and Bautista.
Whether the accused are liable for the large recruitment in a
large scale.
ISSUE:

Whether reasonable doubt exists to warrant the acquittal of RATIO:

appellant Anita Bautista.
Yes. The Labor Code provides that the crime of illegal
recruitment in large scale is committed when a person (a)
undertakes any recruitment activity defined under Article 13(b)
or any prohibited practice enumerated under Article 34 of the

46
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Labor Code; (b) does not have a license or authority to lawfully
engage in the recruitment and placement of workers; and (c)
commits the same against three or more persons, individually
or as a group. Illegal recruitment is deemed committed by a
syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in
carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal
recruitment is deemed committed in large scale if committed
against three (3) or more persons individually or as a group. In
the case at bench, the appellants are neither licensees nor
holders of any authority from POEA to engage in recruitment
and placement activities as evidenced by a certification of the
said agency. It was likewise established that the private
complainants were unaware of the appellants' lack of authority
when they transacted business with them. It was only later,
upon inquiry at POEA, that they discovered the appellants' lack
of authority. Finally, the number of private complainants,
certainly more than three, is beyond dispute.
RULING:
WHEREFORE, the judgment of conviction rendered by the trial
court is hereby AFFIRMED, with the sole modification that the
penalty properly imposable and hereby imposed is life
imprisonment and not reclusion perpetua. Costs against
appellants. SO ORDERED.
PEOPLE OF THE PHILIPPINES v. CARMELITA
PUERTOLLANO COMIA
G.R. No. 109761, September 1, 1994
DAVIDE, JR., J.:
FACTS:
Carmelita Puertollano Comia was charged with illegal
recruitment in large scale. The complaining victims were
testified in open court that the accused defrauded each of
them of sizeable cash on the assurance that they would be
given janitorial jobs in Hongkong. To the mind of the Court,
Dr. Zenaida Andres is a non-existent person invented by the
accused and when the complainants started to show their
impatience to the accused, they waited for the Dra. Andres to
come, after which they agreed to call her but the telephone
number they dialed turned out to be McDonald's. After trial on
the merits, the court promulgated its decision finding the
accused guilty beyond reasonable doubt of the offense
charged and sentencing her to suffer the penalty of life
imprisonment and to pay a fine.
ISSUE:
Whether the accused may be held liable for the illegal
recruitment.
RATIO:
Yes. Under the Labor Code, Illegal recruitment is deemed
committed by a syndicate if carried out by a group of three (3)
or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction,
enterprise or scheme defined under the first paragraph hereof.
Illegal recruitment is deemed committed in large scale when a
person (a) undertakes any recruitment activity defined under
Article 13(b) or any prohibited practice enumerated under
Article 34 of the Labor Code; (b) does not have a license or
authority to lawfully engage in the recruitment and placement
47
of workers; and (c) commits the same against three or more
persons, individually or as a group. In this case, the accused
cannot feign innocence of the illegal recruitment by claiming
that she too was a victim of the illegal recruitment of Dr.
Andres. Firstly, all the transactions from the beginning to the
end were handled by the accused. In fact, none of the
complainants ever met said Dr. Andres. Secondly, if the
accused were a victim of Dr. Andres and she really felt
aggrieved, she could have filed a case against her for illegal
recruitment. Well-founded belief that said Dr. Andres is a
fictitious person conjured by the accused to support her
nefarious scheme in the recruitment process.
RULING:
WHEREFORE, the appealed decision of the Regional Trial Court
of Makati, Metro Manila, in Criminal Case No. 91-6443 is
hereby AFFIRMED, subject to the above modification decreeing
the restitution of the amounts the accused had obtained from
the complainants. Costs against accused Carmelita Puertollano
Comia. SO ORDERED.
DOUGLAS MILLARES and ROGELIO LAGDA v.
NATIONAL LABOR RELATIONS COMMISSION, TRANS-
GLOBAL MARITIME AGENCY, INC. and ESSO
INTERNATIONAL SHIPPING CO., LTD.
GR. No. 110524. July 29, 2002
KAPUNAN, J.:
FACTS:
Millares was employed by ESSO through its local manning
agency as promoted as chief engineer until he retired. Millares
applied for leave of absence for one month which was
approved then he wrote to the operations manager for his
intention to avail the optional retirement. But ESSO denied the
retirement because he was employed on a contractual basis
and he did not comply with requirement for claiming benefits
under CEIP. ESSO advised Millares that in view of his absence
without leave, which is equivalent to abandonment of his
position, he had been dropped from the roster of crew
members. On the other hand, Lagda applied for a leave of
absence which was approved by Trans-global and advised him
to report for re-assignment but Trans-global denied availing
the optional retirement plan on the same grounds as with
Millares. Millares and Lagda filed a complaint-affidavit before
POEA for illegal dismissal and non-payment of employee
benefits against ESSO and Trans-global. POEA dismissed the
complaint for lack of merit, which was affirmed by NLRC.
ISSUE:
Whether Petitioners may be considered as regular employees
despite of being seafarers.
RATIO:
No. From the foregoing cases, it is clear that seafarers are
considered contractual employees. Their employment is
governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280
whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of engagement of the employee or
where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Thus, petitioners are not considered regular or permanent
employees under Article 280 of the Labor Code. Since there
was no dismissal to speak of, it follows that petitioners are not
entitled to reinstatement or payment of separation pay or
backwages, as provided by law. However, with respect to the
benefits under the Consecutive Enlistment Incentive Plan
(CEIP), petitioners are still entitled to receive 100% of the total
amount credited to him under the CEIP. Although petitioners
are contractual employees, their compensation and benefits
are covered by the contracts they signed and the CEIP is part
and parcel of the contract.
RULING:
IN VIEW OF THE FOREGOING, THE COURT Resolved to
Partially GRANT Private Respondents Second Motion for
Reconsideration and Intervenor FAMES Motion for
Reconsideration in Intervention. The Decision of the National
Labor Relations Commission dated June 1, 1993 is hereby
REINSTATED with MODIFICATION. The Private Respondents,
Trans-Global Maritime Agency, Inc. and Esso International
Shipping Co.,Ltd. are hereby jointly and severally ORDERED to
pay petitioners One Hundred Percent (100%) of their total
credited contributions as provided under the Consecutive
Enlistment Incentive Plan (CEIP). SO ORDERED.
PENTAGON INTERNATIONAL SHIPPING INC.
VS. ADELANTAR
GR. No. 157373. July 27, 2004
FACTS:
Respondent Adelantar was hired by Dubai Ports Authority of
Jebel Ali under an employment contract (1st contract) which
provided for an unlimited period of employment. A month later
Adelantar and Pentagon, for and in behalf of Dubai Ports
Authority of Jebel Ali, entered into a POEA standard
employment contract (2nd contract), this time providing for a
12-month period. Later on, however, the management barred
Adelantar from entering the port due to a previous dispute
with his superior, which causes his termination and was
eventually repatriated after 9 months and 7 days of service.
Adelantar filed a complaint for illegal dismissal with money
claim against Pentagon.
The Labor Arbiter (LA) found that the dismissal of Adelantar
was illegal. Consequently, he ordered Pentagon to pay
Adelantar the backwages representing the latters 3 months
basic salary. Adelantar appealed to the NLRC arguing that the
LA erred in granting backwages of only three (3) months. The
NLRC affirmed the LA decision and held that under Section 10
of R.A. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, an illegally dismissed contract
worker is entitled to the salaries corresponding to the
unexpired portion of his contract, or for three (3) months for
every year of the unexpired term, whichever is less.
Adelantar appealed to CA. In CA, the court modified the
amounts awarded by the LA and NLRC. It awards the full
backwages of respondent computing from the time of dismissal
up to the finality of the decision using as a basis Article 279
of the Labor Code and not RA 8042.
ISSUE
Whether Art. 279 of the Labor Code governs in the awards for
backwages of Adelantar, a seafarer.
48
RULING:
NO.
We held that Filipino seamen are governed by the Rules and
Regulations of the POEA. The Standard Employment Contract
governing the Employment of All Filipino Seamen on Board
Ocean-Going Vessels of the POEA, particularly in Part I, Sec. C
specifically provides that the contract of seamen shall be for a
fixed period. In no case should the contract of seamen be
longer than 12 months.
Under the circumstances, the Court of Appeals erred in
resolving the issue of backwages based on the first contract
which provided for an unlimited period of employment as this
violated the explicit provision of the Rules and Regulations of
the POEA. While we recognize that Adelantar executed a
contract with Dubai Ports Authority of Ali Jebel and might even
have applied said contract in his overseas station, this contract
was not sanctioned by the POEA.
The Court of Appeals erred when it adjudged the first contract
as the basis for Pentagons liability instead of the second
contract, which is in conformity with the POEAs Standard
Employment Contract.
Besides, in Millares v. NLRC, we held that:
. . . It is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees
under Article 280 of the Labor Code. Their employment is
governed by the contracts they sign every time they are
rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain
period of time. They fall under the exception of Article 280
whose employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of engagement of the employee or
where the work or services to be performed is seasonal in
nature and the employment is for the duration of the season.
Therefore, Adelantar, a seafarer, is not a regular employee as
defined in Article 280 of the Labor Code. Hence, he is not
entitled to full backwages and separation pay in lieu of
reinstatement as provided in Article 279 of the Labor Code. As
we held in Millares, Adelantar is a contractual employee whose
rights and obligations are governed primarily by Rules and
Regulations of the POEA and, more importantly, by R.A. 8042,
or the Migrant Workers and Overseas Filipinos Act of 1995.
SKIPPERS UNITED PACIFIC, INC. VS. CABILES
GR. No. 175558. February 08 2012
FACTS:
Skippers United Pacific, Inc. deployed, in behalf of Skippers,
De Gracia, Lata, and Aprosta to work on board the vessel MV
Wisdom Star. Respondents claimed that Skippers failed to
remit their respective allotments for almost five months,
compelling them to air their grievances with the Romanian
Seafarers Free Union. The Romanian Seafarers Union sent a
fax letter, relaying the complaints of his crew. Respondents
were unceremoniously discharged from MV Wisdom Stars and
immediately repatriated. Upon arrival in the Philippines,
respondents filed a complaint for illegal dismissal with the
Labor Arbiter. Petitioner claims that respondents demanded
immediate repatriation because they were not satisfied with
the ship. The Labor Arbiter dismissed respondents‘ complaint
for illegal dismissal because the seafarers voluntarily pre-
terminated their employment contracts by demanding for
immediate repatriation due to dissatisfaction with the ship.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ISSUE:
(1) Whether the dismissal of the respondents is valid
(2) Whether the computation of money claims is correct.
RULING:
(1) NO. Article 285 of the Labor Code recognizes termination
by the employee of the employment contract by serving
written notice on the employer at least one (1) month in
advance. Given that provision, the law contemplates the
requirement of a written notice of resignation. In the absence
of a written resignation, it is safe to presume that the
employer terminated the seafarers. In addition, the telex
message relied upon by the Labor Arbiter and NLRC bore
conflicting dates of 22 January 1998 and 22 January 1999,
giving doubt to the veracity and authenticity of the document.
In 22 January 1998, respondents we‘re not even employed yet
by the foreign principal. For these reasons, the dismissal of De
Gracia, et al. was illegal.
(2) NO. The Migrant Workers Act provides that salaries for the
unexpired portion of the employent contract or three (3)
months for every year of the unexpired term, whichever is
less, shall be awarded to the overseas Filipino worker, in cases
of illegal dismissal. However, in Serrano v. Gallant Maritime
Services and Marlow Navigation Co. Inc., the Supreme Court,
declared unconstitutional the clause or for three months for
every year of the unexpired term, whichever is less and
awarded the entire unexpired portion of the employment
contract to the overseas Filipino worker. Later, Section 7 of
Republic Act No. 10022 (RA 10022) amended Section 10 of the
Migrant Workers Act, and once again reiterated the provision
of awarding the unexpired portion of the employment contract
or three (3) months for every year of the unexpired term,
whichever is less. Nevertheless, since the termination occurred
on January 1999 before the passage of the amendatory RA
10022, we shall apply RA 8042, as unamended, without
touching on the constitutionality of Section 7 of RA 10022
because an unconstitutional clause in the law confers no
rights, imposes no duties and affords no protection. The
unconstitutional provision is inoperative, as if it was not passed
into law at all.
ELIZABETH M. GAGUI, Petitioner,
vs.
SIMEON DEJERO and TEODORO R.
PERMEJO, Respondents.
G.R. No. 196036 October 23, 2013
SERENO, CJ:
FACTS:
Simeon Dejero and Teodoro Permejo filed separate
Complaints for illegal dismissal, nonpayment of salaries and
overtime pay, refund of transportation expenses, damages,
and attorney‘s fees against PRO Agency Manila, Inc., and
Abdul Rahman Al Mahwes. After due proceedings, Labor
Arbiter Pedro Ramos rendered a decision ordering respondents
Pro Agency Manila, Inc., and Abdul Rahman Al Mahwes to
jointly and severally pay complainants. Pursuant to such
decision, Labor Arbiter Ramos issued a Writ of Execution.When
the writ was returned unsatisfied, an Alias Writ of Execution
was issued, but was also returned unsatisfied. Respondents
filed a Motion to Implead Respondent Pro Agency Manila,
Inc.‘s Corporate Officers and Directors as Judgment Debtors. It
included petitioner as the Vice-President/Stockholder/Director
of PRO Agency, Manila, Inc. After due hearing, Executive
49
Labor Arbiter Voltaire A. Balitaan issued an Order granting
respondents‘ motion.
A 2nd Alias Writ of Execution was issued, which resulted in the
garnishment of petitioner‘s bank deposit in the amount of
₱85,430.48. However, since the judgment remained
unsatisfied, respondents sought the issuance of a third alias
writ of execution on 26 February 2004.
Executive Labor Arbiter Lita V. Aglibut issued an Order granting
respondents‘ motion for a third alias writ. Accordingly, the 3rd
Alias Writ of Execution was issued, resulting in the levying of
two parcels of lot owned by petitioner located in San
Fernando, Pampanga.
Petitioner then filed a Motion to Quash 3rd Alias Writ of
Execution; and a Supplemental Motion to Quash Alias Writ of
Execution. In these motions, petitioner alleged that apart from
not being made aware that she was impleaded as one of the
parties to the case, the dispositive portion of the 7 May 1997
Decision (1997 Decision) did not hold her liable in any form
whatsoever. More importantly, impleading her for the purpose
of execution was tantamount to modifying a decision that had
long become final and executory.
Executive Labor Arbiter Lita V. Aglibut issued an Order denying
petitioner‘s motions on the following grounds: (1) records
disclosed that despite having been given sufficient notices to
be able to register an opposition, petitioner refused to do so,
effectively waiving her right to be heard; and (2) under Section
10 of Republic Act No. 8042 (R.A. 8042) or the Migrant
Workers and Overseas Filipinos Act of 1995, corporate officers
may be held jointly and severally liable with the placement
agency for the judgment award.
Aggrieved, petitioner appealed to the NLRC, which rendered a
Decision denying the respondents Gagui appeal.
The NLRC ruled that "in so far as overseas migrant workers are
concerned, it is R.A. 8042 itself that describes the nature of
the liability of the corporation and its officers and directors. x x
x [I]t is not essential that the individual officers and directors
be impleaded as party respondents to the case instituted by
the worker. A finding of liability on the part of the corporation
will necessarily mean the liability of the corporate officers or
directors."
Upon appellate review, the CA affirmed the NLRC in a
Decision28 promulgated on 15 November 2010:
From the foregoing, the Court finds no reason to hold the
NLRC guilty of grave abuse of discretion amounting to lack or
excess of jurisdiction in affirming the Order of Executive Labor
Arbiter Aglibut which held petitioner solidarily liable with PRO
Agency Manila, Inc. and Abdul Rahman Al Mahwes as
adjudged in the May 7, 1997 Decision of Labor Arbiter Pedro
Ramos.
The CA stated that there was "no need for petitioner to be
impleaded x x x because by express provision of the law, she
is made solidarily liable with PRO Agency Manila, Inc., for any
and all money claims filed by private respondents." The CA
further said that this is not a case in which the liability of the
corporate officer must be established because an allegation of
malice must be proven. The general rule is that corporate
officers, directors and stockholders are not liable, except when
they are made liable for their corporate act by a specific
provision of law, such as R.A. 8042.
ISSUES:
1. Whether or not this petition was filed on time; and
2. Whether or not petitioner may be held jointly and severally
liable with PRO Agency Manila, Inc. in accordance with Section
10 of R.A. 8042, despite not having been impleaded in the
Complaint and named in the Decision.
RATIO DECIDENDI:
Liability of Corporate Officers
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of
law to the contrary, the Labor Arbiters of the National Labor
Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90)
calendar days after filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any
law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and
other forms of damages.
The liability of the principal/employer and the
recruitment/placement agency for any and all claims under this
section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall
be a condition precedent for its approval. The performance
bond to be filed by the recruitment/placement agency, as
provided by law, shall be answerable for all money claims or
damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may
be, shall themselves be jointly and solidarily liable with the
corporation or partnership for the aforesaid claims and
damages. (Emphasis supplied)
In Sto. Tomas v. Salac, we had the opportunity to pass upon
the constitutionality of this provision. We have thus
maintained:
The key issue that Gumabay, et al. present is whether or not
the 2nd paragraph of Section 10, R.A. 8042, which holds the
corporate directors, officers, and partners of recruitment and
placement agencies jointly and solidarily liable for money
claims and damages that may be adjudged against the latter
agencies, is unconstitution.
ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL and
MINISTRY OF PUBLIC HEALTH-KUWAIT Petitioners,
vs.
MA. JOSEFA ECHIN, Respondent.
G.R. No. 178551 October 11, 2010
CARPIO MORALES, J.:
FACTS:
Respondent Echin was hired by petitioner ATCI in behalf of its
principal co-petitioner, Ministry of Public Health of Kuwait, for
the position of medical technologist under a two-year contract
with a monthly salary of US$1,200.00.Within a year,
Respondent was terminated for not passing the probationary
period which was under the Memorandum of Agreement.
Ministry denied respondent‗s request and she returned to the
Philippines shouldering her own fair. Respondent filed with the
National Labor Relations Commission (NLRC) a complaint
against ATCI for illegal dismissal. Labor Arbiter rendered
judgment in favor of respondent and ordered ATCI to pay
her$3,600.00, her salary for the three months unexpired
portion of the contract. ATCI appealed Labor Arbiter‗s decision,
however, NLRC affirmed the latter‗s decision and denied
petitioner ATCI‗s motion for reconsideration. Petitioner
appealed to the Court Appeals contending that their principal
being a foreign government agency is immune from suit, and
as such, immunity extended to them. Appellate Court affirmed
NLRC‗s decision. It noted that under the law, a private
employment agency shall assume all responsibilities for the
implementation of the contract of employment of an overseas
worker; hence, it can be sued jointly and severally with the
foreign principal for any violation of the recruitment agreement
or contract of employment.
Petitioner‗s motion for reconsideration was denied; hence, this
present petition.
50
ISSUE:
Whether or not petitioners be held liable considering that the
contract specifically stipulates that respondent‗s employment
shall be governed by the Civil Service Law and Regulations of
Kuwait.
RATIO DECIDENDI:
Doctrine of Procesual Presumption: The party invoking the
application of a foreign law has the burden proving the law,
otherwise the same shall be presumed as similar to ours.
RULING:
Court denied the petition. According to RA 8042:
―The obligations covenanted in the recruitment agreement
entered into by and between the local agent and its foreign
principal are not coterminous with the term of such agreement
so that if either or both of the parties decide to end the
agreement,the responsibilities of such parties towards the
contracted employees under the agreement do not at all end,
but the same extends up to and until the expiration of the
employment contracts of the employees recruited and
employed pursuant to the said recruitment agreement. In
international law, the party who wants to have a foreign law
applied to a dispute or case has the burden of proving the
foreign law. Where a foreign law is not pleaded or, even if
pleaded, is not proved, the presumption is that foreign law is
the same as ours. Thus, we apply Philippine labor laws in
determining the issues presented before us.
ANTONIO M. SERRANO, Petitioner,
vs.
Gallant MARITIME SERVICES, INC. and MARLOW
NAVIGATION CO., INC., Respondents.
G.R. No. 167614 March 24, 2009
FACTS:
Petitioner was hired by Gallant Maritime Services, Inc. and
Marlow Navigation Co., Ltd. (respondents) under a Philippine
Overseas Employment Administration (POEA)-approved
Contract of Employment with the following terms and
conditions:
Duration of contract 12 months
Position Chief Officer
Basic monthly salary US$1,400.00
Hours of work 48.0 hours per week
Overtime US$700.00 per month
Vacation leave with pay 7.00 days per month
On March 19, 1998, the date of his departure, petitioner was
constrained to accept a downgraded employment contract for
the position of Second Officer with a monthly salary of
US$1,000.00, upon the assurance and representation of
respondents that he would be made Chief Officer by the end of
April 1998. Respondents did not deliver on their promise
to make petitioner Chief Officer. Hence, petitioner refused to
stay on as Second Officer and was repatriated to the
Philippines on May 26, 1998. Petitioner‘s employment contract
was for a period of 12 months or from March 19, 1998 up to
March 19, 1999, but at the time of his repatriation on May 26,
1998, he had served only two (2) months and seven (7) days
of his contract, leaving an unexpired portion of nine (9)
months and twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his
money claims in the total amount of US$26,442.73. The LA
rendered a Decision, declaring the dismissal of petitioner illegal
and awarding him monetary benefits, declaring that the
dismissal of the complainant (petitioner) by the respondents in
the above-entitled case was illegal and the respondents are
hereby ordered to pay the complainant [petitioner], jointly and
severally, in Philippine Currency, based on the rate of
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
exchange prevailing at the time of payment, the amount of
EIGHT THOUSAND SEVEN HUNDRED SEVENTY U.S. DOLLARS
(US $8,770.00), representing the complainant‘s salary for three
(3) months of the unexpired portion of the aforesaid contract
of employment.
Respondents appealed to the National Labor Relations
Commission (NLRC) to question the finding of the LA that
petitioner was illegally dismissed. The NLRC modified the LA
Decision and corrected the LA‘s computation of the lump-sum
salary awarded to petitioner by reducing the applicable salary
rate from US$2,590.00 to US$1,400.00 because R.A. No. 8042
―does not provide for the award of overtime pay, which should
be proven to have been actually performed, and for vacation
leave pay.
Petitioner filed a Motion for Partial Reconsideration, but this
time he questioned the constitutionality of the subject clause.
The NLRC denied the motion.
Petitioner filed a Petition for Certiorari with the CA, reiterating
the constitutional challenge against the subject clause. After
initially dismissing the petition on a technicality, the CA
eventually gave due course to it, as directed by this Court in its
Resolution which granted the petition for certiorari,filed by
petitioner.
The CA affirmed the NLRC ruling on the reduction of the
applicable salary rate; however, the CA skirted the
constitutional issue raised by petitioner.
His Motion for Reconsideration having been denied by the CA,
petitioner brings his cause to this Court on the following
grounds:
The Court of Appeals and the labor tribunals have decided the
case in a way not in accord with applicable decision of the
Supreme Court involving similar issue of granting unto the
migrant worker back wages equal to the unexpired portion of
his contract of employment instead of limiting it to three (3)
months.
Even without considering the constitutional limitations [of] Sec.
10 of Republic Act No. 8042, the Court of Appeals gravely
erred in law in excluding from petitioner‘s award the overtime
pay and vacation pay provided in his contract since under the
contract they form part of his salary.
The Court now takes up the full merit of the petition mindful of
the extreme importance of the constitutional question raised
therein.
ISSUES:
 Whether Section 10 (par 5) of RA 8042 is unconstitutional
 Proper computation of the Lump-sum salary to be
awarded to petitioner by reason of his illegal dismissal
 Whether the overtime and leave pay should form part of
the salary basis in the computation of his monetary award
RULING:
1. The answer is in the affirmative.
Section 1, Article III of the Constitution guarantees:
No person shall be deprived of life, liberty, or property without
due process of law nor shall any person be denied the equal
protection of the law.
Section 18, Article II and Section 3, Article XIII accord all
members of the labor sector, without distinction as to place of
deployment, full protection of their rights and welfare.
To Filipino workers, the rights guaranteed under the foregoing
constitutional provisions translate to economic security and
parity: all monetary benefits should be equally enjoyed by
workers of similar category, while all monetary obligations
should be borne by them in equal degree; none should be
denied the protection of the laws which is enjoyed by, or
spared the burden imposed on, others in like circumstances.
Imbued with the same sense of ―obligation to afford protection
to labor,‖ the Court in the present case also employs the
51
standard of strict judicial scrutiny, for it perceives in the
subject clause a suspect classification prejudicial to OFWs.
Upon cursory reading, the subject clause appears facially
neutral, for it applies to all OFWs. However, a closer
examination reveals that the subject clause has a
discriminatory intent against, and an invidious impact on OFWs
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason
that the clause violates not just petitioner‘s right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
2. Second Issue
It is plain that prior to R.A. No. 8042, all OFWs, regardless of
contract periods or the unexpired portions thereof, were
treated alike in terms of the computation of their monetary
benefits in case of illegal dismissal. Their claims were
subjected to a uniform rule of computation: their basic salaries
multiplied by the entire unexpired portion of their employment
contracts.
The enactment of the subject clause in R.A. No. 8042
introduced a differentiated rule of computation of the money
claims of illegally dismissed OFWs based on their employment
periods, in the process singling out one category whose
contracts have an unexpired portion of one year or more and
subjecting them to the peculiar disadvantage of having their
monetary awards limited to their salaries for 3 months or for
the unexpired portion thereof, whichever is less, but all the
while sparing the other category from such prejudice, simply
because the latter‘s unexpired contracts fall short of one year.
Prior to R.A. No. 8042, a uniform system of computation of the
monetary awards of illegally dismissed OFWs was in place.
This uniform system was applicable even to local workers with
fixed-term employment.
The subject clause does not state or imply any definitive
governmental purpose; and it is for that precise reason that
the clause violates not just petitioner‘s right to equal
protection, but also her right to substantive due process under
Section 1, Article III of the Constitution.
The subject clause being unconstitutional, petitioner is entitled
to his salaries for the entire unexpired period of nine months
and 23 days of his employment contract, pursuant to law and
jurisprudence prior to the enactment of R.A. No. 8042.
3. Third Issue
Petitioner contends that his overtime and leave pay should
form part of the salary basis in the computation of his
monetary award, because these are fixed benefits that have
been stipulated into his contract.
Petitioner is mistaken.
The word salaries in Section 10(5) does not include overtime
and leave pay. For seafarers like petitioner, DOLE Department
Order No. 33, series 1996, provides a Standard Employment
Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work
―performed‖ in excess of the regular eight hours, and holiday
pay is compensation for any work ―performed‖ on designated
rest days and holidays.
In the same vein, the claim for the day‘s leave pay for the
unexpired portion of the contract is unwarranted since the
same is given during the actual service of the seamen.
WHEREFORE, the Court GRANTS the Petition. The subject
clause ―or for three months for every year of the unexpired
term, whichever is less‖ in the 5th paragraph of Section 10 of
Republic Act No. 8042 is DECLARED UNCONSTITUTIONAL; and
the December 8, 2004 Decision and April 1, 2005 Resolution of
the Court of Appeals are MODIFIED to the effect that
petitioner is AWARDED his salaries for the entire unexpired
portion of his employment contract consisting of nine months
and 23 days computed at the rate of US$1,400.00 per month.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
CLAUDIO S. YAP VS. THENAMARIS SHIPS
MANAGEMENT AND INTERMARE MARITIME AGENCIES
G.R. NO. 179532 MAY 30, 2011
NACHURA, J.:
FACTS:
Claudio S. Yap was employed as electrician of the vessel, M/T
SEASCOUT on 14 August 2001 by Intermare Maritime
Agencies, Inc. in behalf of its principal, Vulture Shipping
Limited. The contract of employment entered into by Yap and
Capt. Francisco B. Adviento, the General Manager of
Intermare, was for a duration of 12 months. On 23 August
2001, Yapboarded M/T SEASCOUT and commenced his job
as electrician. However, on or about 08 November 2001, the
vessel was sold. The Philippine Overseas Employment
Administration (POEA) was informed about the sale on 06
December 2001 in a letter signed by Capt. Adviento. Yap,
along with the other crewmembers, was informed by the
Master of their vessel that the same was sold and will be
scrapped. They were also informed about the Advisory sent by
Capt. Constatinou, which states, among others: ―Please Ask Yr
Officers And Ratings If They Wish To Be Transferred To Other
Vessels After Vessel S Delivery (Greek Via Athens-Philipinos
Via Manila For Crew Not Wish Transfer To Declare Their
Prospected Time For Reembarkation In Order To Schedule
Them Accly‖
Yap received his seniority bonus, vacation bonus, extra bonus
along with the scrapping bonus. However, with respect to the
payment of his wage, he refused to accept the payment of
one-month basic wage. He insisted that he was entitled to the
payment of the unexpired portion of his contract since he was
illegally dismissed from employment. He alleged that he opted
for immediate transfer but none was made.
Respondents, for their part, contended that Yap was not
illegally dismissed. They alleged that following the sale of the
M/T SEASCOUT, Yap signed off from the vessel on 10
November 2001 and was paid his wages corresponding to the
months he worked or until 10 November 2001 plus his
seniority bonus, vacation bonus and extra bonus. They further
alleged that Yaps employment contract was validly terminated
due to the sale of the vessel and no arrangement was made
for Yaps transfer to Thenamaris other vessels.
Thus, Claudio S. Yap (petitioner) filed a complaint for Illegal
Dismissal with Damages and Attorneys Fees before the Labor
Arbiter (LA). Petitioner claimed that he was entitled to the
salaries corresponding to the unexpired portion of his contract.
Subsequently, he filed an amended complaint, impleading
Captain Francisco Adviento of respondents Intermare Maritime
Agencies, Inc. (Intermare) and Thenamaris Ships Management
(respondents), together with C.J. Martionos, Interseas Trading
and Financing Corporation, and Vulture Shipping Limited/Stejo
Shipping Limited.
ISSUES:
Whether or not Section 10 of R.A. [No.] 8042, to the extent
that it affords an illegally dismissed migrant worker the lesser
benefit of salaries for [the] unexpired portion of his
employment contract or for three (3) months for every year of
the unexpired term, whichever is less is constitutional; and
Assuming that it is, whether or not the Court of Appeals
gravely erred in granting petitioner only three (3) months
backwages when his unexpired term of 9 months is far short of
the every year of the unexpired term threshold.
RATIO DECIDENDI:
Equal Protection; No law should single out one classification of
OFWs and burden it witha peculiar disadvantage.
52
RULING:
This case should not be different from Serrano.
As a general rule, an unconstitutional act is not a law; it
confers no rights; it imposes no duties; it affords no
protection; it creates no office; it is inoperative as if it has not
been passed at all. The general rule is supported by Article 7
of the Civil Code, which provides:
Art. 7. Laws are repealed only by subsequent ones, and their
violation or non-observance shall not be excused by disuse or
custom or practice to the contrary.
The doctrine of operative fact serves as an exception to the
aforementioned general rule. In Planters Products, Inc. v.
Fertiphil Corporation,[29] we held:
The doctrine of operative fact, as an exception to the general
rule, only applies as a matter of equity and fair play. It nullifies
the effects of an unconstitutional law by recognizing that the
existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The past
cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of
unconstitutionality will impose an undue burden on those who
have relied on the invalid law. Thus, it was applied to a
criminal case when a declaration of unconstitutionality would
put the accused in double jeopardy or would put in limbo the
acts done by a municipality in reliance upon a law creating
it.[30]
Following Serrano, we hold that this case should not be
included in the aforementioned exception. After all, it was not
the fault of petitioner that he lost his job due to an act of
illegal dismissal committed by respondents. To rule otherwise
would be iniquitous to petitioner and other OFWs, and would,
in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFWs security of
tenure which an employment contract embodies and actually
profit from such violation based on an unconstitutional
provision of law.
In the same vein, we cannot subscribe to respondents
postulation that the tanker allowance of US$130.00 should not
be included in the computation of the lump-sum salary to be
awarded to petitioner.
First. It is only at this late stage, more particularly in their
Memorandum, that respondents are raising this issue. It was
not raised before the LA, the NLRC, and the CA. They did not
even assail the award accorded by the CA, which computed
the lump-sum salary of petitioner at the basic salary of
US$1,430.00, and which clearly included the US$130.00 tanker
allowance. Hence, fair play, justice, and due process dictate
that this Court cannot now, for the first time on appeal, pass
upon this question. Matters not taken up below cannot be
raised for the first time on appeal. They must be raised
seasonably in the proceedings before the lower tribunals.
Questions raised on appeal must be within the issues framed
by the parties; consequently, issues not raised before the
lower tribunals cannot be raised for the first time on
appeal.[31]
Second. Respondents invocation of Serrano is unavailing.
Indeed, we made the following pronouncements in Serrano, to
wit:
The word salaries in Section 10(5) does not include overtime
and leave pay. For seafarers like petitioner, DOLE Department
Order No. 33, series 1996, provides a Standard Employment
Contract of Seafarers, in which salary is understood as the
basic wage, exclusive of overtime, leave pay and other
bonuses; whereas overtime pay is compensation for all work
performed in excess of the regular eight hours, and holiday
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
pay is compensation for any work performed on designated
rest days and holidays.
SAMEER OVERSEAS PLACEMENT AGENCY,
INC., Petitioner, v. JOY C. CABILES, Respondent.
G.R. No. 170139 August 05, 2014
LEONEN, J.:
FACTS:
Sameer Overseas Placement Agency, Inc., is a recruitment and
placement agency. Responding to an ad it published,
respondent, Joy C. Cabiles, submitted her application for a
quality control job in Taiwan. Such application was accepted.
Joy was later asked to sign a one-year employment contract
for a monthly salary of NT$15,360.00. She alleged that Sameer
Overseas Agency required her to pay a placement fee of
P70,000.00 when she signed the employment contract.
Joy was deployed to work for Taiwan Wacoal, Co. Ltd.
(Wacoal) on June 26, 1997. She alleged that in her
employment contract, she agreed to work as quality control for
one year. In Taiwan, she was asked to work as a cutter.
Sameer Overseas Placement Agency claims that on July 14,
1997, a certain Mr. Huwang from Wacoal informed Joy,
without prior notice, that she was terminated and that "she
should immediately report to their office to get her salary and
passport." She was asked to "prepare for immediate
repatriation."
Joy claims that she was told that from June 26 to July 14,
1997, she only earned a total of NT$9,000. According to her,
Wacoal deducted NT$3,000 to cover her plane ticket to Manila.
Then Joy filed a complaint with the National Labor Relations
Commission against petitioner and Wacoal. She claimed that
she was illegally dismissed. She asked for the return of her
placement fee, the withheld amount for repatriation costs,
payment of her salary for 23 months as well as moral and
exemplary damages. She identified Wacoal as Sameer
Overseas Placement Agency's foreign principal.
ISSUE:
Whether the Court of Appeals erred when it affirmed the ruling
of the NLRC finding respondent illegally dismissed and
awarding her three months7 worth of salary, the
reimbursement of the cost of her repatriation,and attorneys
fees despite the alleged existence of just causes of
termination.
Whether there was a just cause for termination because there
was a finding of wacoal that respondent was inefficient in her
work.
Whether the Pacific that should not assume responsibility for
wacoal‘s contractual obligations to the workers originally
recruited by petitioner.
RULING:
Sameer Overseas Placement Agency failed to show that there
was just cause for causing Joy's dismissal. The employer,
Wacoal, also failed to accord her due process of law.
Indeed, employers have the prerogative to impose productivity
and quality standards at work. They may also impose
reasonable rules to ensure that the employees comply with
these standards. Failure to comply may be a just cause for
their dismissal. Certainly, employers cannot be compelled to
retain the services of an employee who is guilty of acts that
are inimical to the interest of the employer. While the law
acknowledges the plight and vulnerability of workers, it does
not "authorize the oppression or self-destruction of the
employer." Management prerogative is recognized in law and
in our jurisprudence.
53
This prerogative, however, should not be abused. It is
"tempered with the employee's right to security of
tenure."Workers are entitled to substantive and procedural due
process before termination. They may not be removed from
employment without a valid or just cause as determined by law
and without going through the proper procedure.
Security of tenure for labor is guaranteed by our Constitution.
Employees are not stripped of their security of tenure when
they move to work in a different jurisdiction. With respect to
the rights of overseas Filipino workers, we follow the principle
of lex loci contractus.
By our laws, overseas Filipino workers (OFWs) may only be
terminated for a just or authorized cause and after compliance
with procedural due process requirements.
Article 282 of the Labor Code enumerates the just causes of
termination by the employer. Thus:
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 representatives; and
(e) Other causes analogous to the foregoing.
GENERAL MILLING CORPORATION and EARL TIMOTHY
CONE, petitioners, vs. HON. RUBEN D. TORRES, in his
capacity as Secretary of Labor and Employment, HON.
BIENVENIDO E. LAGUESMA, in his capacity as Acting
Secretary of Labor and Employment, and BASKETBALL
COACHES ASSOCIATION OF THE PHILIPPINES,
respondents.
G.R. No. 93666 April 22, 1991
FELICIANO, J.:
FACTS:
An Alien Employment Permit was issued by the DOLE in favor
of petitioner Cone, a US citizen, as sports consultant and
assistant coach for petitioner GMC. A contract of employment
was entered into between Cone and GMC. Cone changed his
status from temporary to visitor to pre-arranged employee,
which the Commission on Immigration and Deportation
approved. After a year, GMC requested the renewal of Cone's
alien employment permit and the same was approved by the
DOLE. However, the Basketball Coaches Association of the
Philippines (BCAP) appealed the issuance of said alien
employment permit to the Secretary of Labor on the ground
that there was no showing that there is no person in the
Philippines who is competent, able and willing to perform the
services required nor that the hiring of petitioner Cone would
redound to the national interest. GMC filed a petition for
Certiorari alleging that the Secretary abused his discretion
when he revoked Cone's alien employment permit and that the
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Labor Code does not empower the Secretary to determine if
the employment of an alien would redound to national interest.
ISSUE:
Whether the Secretary of Labor acted with grave abuse of
discretion in revoking Cone‘s Alien Employment Permit
RACIO DECIDENDI:
The Supreme Court ruled that the Secretary of Labor did not
act with grave abuse of discretion in revoking Cone‘s Alien
Employment Permit. GMC‘s claim that hiring of a foreign coach
is an employer‘s prerogative has no legal basis. Under Section
40 of the Labor Code, an employer seeking employment of an
alien must first obtain an employment permit from the
Department of Labor. The permissive language used indicates
that the authority granted involves the exercise of discretion
on the part of the issuing authority.
GMC‘s right to choose whom to employ is limited by the
statutory requirement of an employment permit. The Labor
Code empowers the Labor Secretary to determine as to the
availability of the services of a ―person in the Philippines who is
competent, able and willing at the time of the application to
perform the services for which an alien is desired‖ and DOLE is
the agency vested with jurisdiction to determine the question
of availability of local workers.
RULING:
ACCORDINGLY, the Court Resolved to DISMISS the Petition for
certiorari for lack of merit. Costs against petitioners.
ATLANTA INDUSTRIES, INC. and/or ROBERT CHAN,
Petitioners, vs. APRILITO R. SEBOLINO, KHIM V.
COSTALES, ALVIN V. ALMOITE, and JOSEPH S. SAGUN,
Respondents.
G.R. No. 187320 January 26, 2011
BRION, J.:
FACTS:
Sebolino et al filed several complaints for illegal dismissal
against petitioners Atlanta and its President, Chan. Atlanta is a
domestic corporation engaged in the manufacture of steel
pipes. The complainants alleged that they had attained regular
status since they work with Atlanta for more than 6 months
from the start of an apprenticeship agreement and were
illegally dismissed when the apprenticeship agreement expired.
Atlanta and Chan argued that the workers were not entitled to
regularization and to their money claims because they were
engaged as apprentices under a government-approved
apprenticeship program and that their names did not appear in
the list of employees. Subsequently a compromise agreement
was entered into by the respondent with Atlanta, but the
remaining respondents had refused to sign.
ISSUE:
Whether the respondents are employees of Atlanta and thus
entitled to their money claims
RATIO DECIDENDI:
The Supreme Court ruled in favor of the employees. Even if we
recognize the company‘s need to train its employees through
apprenticeship, we can only consider the first apprenticeship
54
agreement for the purpose. With the expiration of the first
agreement and the retention of the employees, Atlanta had, to
all intents and purposes, recognized the completion of their
training and their acquisition of a regular employee status. This
reality is highlighted by the CA finding that the respondents
occupied positions such as machine operator, scale man and
extruder operator - tasks that are usually necessary and
desirable in Atlanta‘s usual business or trade as manufacturer
of plastic building materials. These tasks and their nature
characterized the four as regular employees under Article 280
of the Labor Code. Thus, when they were dismissed without
just or authorized cause, without notice, and without the
opportunity to be heard, their dismissal was illegal under the
law.
On the supposed compromise agreement they entered into,
Costales, Almoite, Sebolino and Sagun refuse to accept the
agreements‘ validity, contending that the company‘s
apprenticeship program is merely a ploy ―to continually deprive
them of their rightful wages and benefits which are due them
as regular employees.‖
RULING:
WHEREFORE, premises considered, we hereby DENY the
petition for lack of merit. The assailed decision and resolution
of the Court of Appeals are AFFIRMED. Costs against the
petitioner Atlanta Industries, Inc.
PROFESSIONAL VIDEO, INC., Petitioner, vs.
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT
AUTHORITY, Respondent.
G.R. No. 155504 June 26, 2009
BRION, J.:
Facts:
Professional Video Inc. (PROVI) signed and executed the
―Contract Agreement Project PVC ID Card Issuance‖ for the
provision of goods and services in the printing and encoding of
the PVC cards. PROVI was to provide TESDA with the system
and equipment compliant with the specifications defined in the
proposal. In return, TESDA would pay PROVI a specified sum
of money after TESDA‘s acceptance of the contracted goods
and services. PROVI alleged that TESDA has still an
outstanding balance of 35 Million pesos and still remains
unpaid. TESDA argued that public funds cannot be the subject
of garnishment. RTC denied TESDA's motion to quash. CA set
aside the RTC's order and denied PROVI's motion for
reconsideration.
ISSUE:
Whether the writ of attachment or garnishment against TESDA
is valid
RATIO DECIDENDI:
The Supreme Court ruled that TESDA‘s funds are public in
character, hence exempt from attachment or garnishment. It
agrees with TESDA that it is not engaged in business, and
there is nothing in the records to show that its purchase of the
PVC cards from PROVI is for a business purpose. While TESDA
admits that it will charge the trainees with a fee for the PVC
cards, it claims that this fee is only to recover their costs and is
not intended for profit. TESDA is an instrumentality of the
government undertaking governmental functions.
Disbursements of public funds must be covered by the
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
corresponding appropriation as required by law. The functions
and public services rendered by the State cannot be allowed to
be paralyzed or disrupted by the diversion of public funds from
their legitimate and specific objects, as appropriated by law.
RULING:
WHEREFORE, premises considered, we hereby DENY the
petition filed by petitioner Professional Video, Inc., and AFFIRM
the Court of Appeals‘ Decision dated July 23, 2002, and
Resolution of September 27, 2002, in CA-G.R. SP No. 67599.
Costs against the petitioner.
CENTURY CANNING CORPORATION, Petitioner, vs.
COURT OF APPEALS and GLORIA C. PALAD,
Respondents.
G.R. No. 152894 August 17, 2007
CARPIO, J.:
FACTS:
Petitioner hired Gloria C. Palad as "fish cleaner" at petitioner‘s
tuna and sardines factory. Palad signed on an apprenticeship
agreement with petitioner and received an apprentice
allowance. Petitioner submitted its apprenticeship program for
approval to the TESDA of the DOLE. Months after, TESDA
approved petitioner‘s apprenticeship program. Palad received a
rating of "needs improvement" based on her performance and
numerous tardiness and absences. As a consequence,
petitioner issued a termination notice to Palad. Palad then filed
a complaint for illegal dismissal, underpayment of wages, and
non-payment of pro-rated 13th month pay for the year 1997.
The Labor Arbiter dismissed Palad's complaint, however
ordered Century Canning to pay the complainant representing
her last salary and prorated 13th month pay. NLRC affirmed
LA's decision. Upon denial of Palad‘s motion for
reconsideration, she filed a special civil action for certiorari
with the CA. CA set aside the NLRC's decision on the ground
that the apprenticeship agreement was not valid and binding
because it was executed more than two months before the
TESDA approved petitioner‘s apprenticeship program.
ISSUE:
Whether Palad was an apprentice of Century Canning
Corporation
RATIO DECIDENDI:
The Supreme Court cited its previous ruling in the case of Nitto
Enterprises vs. NLRC that Article 61 of the Labor Code held
that an apprenticeship program should first be approved by
the DOLE before an apprentice may be hired, otherwise the
person hired will be considered a regular employee. Prior
approval by the DOLE of the proposed apprenticeship program
is, therefore, a condition sine qua non before an
apprenticeship agreement can be validly entered into. The act
of filing the proposed apprenticeship program with the DOLE is
a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice
relationship. Hence, since the apprenticeship agreement
between petitioner and private respondent has no force and
effect in the absence of a valid apprenticeship program duly
approved by the DOLE.
Since Palad is not considered an apprentice because the
apprenticeship agreement was enforced before the TESDA‘s
approval of petitioner‘s apprenticeship program, Palad is
55
deemed a regular employee performing the job of a "fish
cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioner‘s business as a tuna and sardines factory. Under
Article 280 of the Labor Code, an employment is deemed
regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
business or trade of the employer.
RULING:
WHEREFORE, we AFFIRM the Decision dated 12 November
2001 and the Resolution dated 5 April 2002 of the Court of
Appeals in CA-G.R. SP No. 60379.
NITTO ENTERPRISES, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and ROBERTO CAPILI,
respondents.
G.R. No. 114337 September 29, 1995
KAPUNAN, J.:
FACTS:
Nitto Enterprises hired Capili as an apprentice machinist for a
period of 6 months with a daily wage rate of P66.75 which was
75% of the applicable minimum wage. While working, Capili
accidentally hit and injured the leg of an office secretary. On
the same day after office hours, he entered a workshop which
was not his work station and then operated a machine without
authority and in the process injured his left thumb. Petitioner
covered the expenses for his medication. He was asked to
resign in a letter. A Quitclaim and Release was executed by
Capili in favor of petitioner. Capili filed a complaint for illegal
dismissal and payment of other monetary benefits. However,
the Labor Arbiter held that the termination was valid. The
NLRC reversed the same and declared Capili as a regular
employee, thus was illegally dismissed. The Labor Arbiter now
ruled for the reinstatement of Capili and his backwages.
Petitioner filed a motion for reconsideration but was denied.
ISSUE:
Whether Capili is a regular employee or an apprentice
RATIO DECIDENDI:
The Supreme Court ruled that he is a regular employee.
Petitioner did not comply with the requirements of the law.
The apprenticeship agreement between petitioner and private
respondent was executed on May 28, 1990 and on the same
date, an apprenticeship program was prepared by petitioner
and submitted to the DOLE. However, the apprenticeship
agreement was filed only on June 7, 1990.
It is mandated under Article 61 of the Labor Code that
apprenticeship agreements entered into by the employer and
apprentice shall be entered only in accordance with the
apprenticeship program duly approved by the Minister of Labor
and Employment. Absence of such renders the apprenticeship
agreement no force and effect.
Prior approval by the DOLE of the proposed apprenticeship
program is, therefore, a condition sine quo non before an
apprenticeship agreement can be validly entered into. The act
of filing the proposed apprenticeship program with the DOLE is
a preliminary step towards its final approval and does not
instantaneously give rise to an employer-apprentice
relationship. He should rightly be considered as a regular
employee of petitioner as defined by Article 280 of the Labor
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Code and pursuant to the constitutional mandate to protect
the rights of workers and promote their welfare.
RULING:
WHEREFORE, finding no abuse of discretion committed by
public respondent National Labor Relations Commission, the
appealed decision is hereby AFFIRMED.
MARITES BERNARDO, ET. Al, petitioners, vs. NATIONAL
LABOR RELATIONS COMMISSION and FAR EAST BANK
AND TRUST COMPANY, respondents.
G.R. No. 122917 July 12, 1999
PANGANIBAN, J.:
FACTS:
Petitioners numbering 43 are deaf–mutes who were hired on
various periods from 1988 to 1993 by respondent Far East
Bank and Trust Co. as Money Sorters and Counters through a
uniformly worded agreement called "Employment Contract for
Handicapped Workers", among which included that the
EMPLOYEE shall undergo a training period of 1 month, after
which the BANK shall determine whether or not he/she should
be allowed to finish the remaining term of this Contract.
Subsequently, they were dismissed.
Petitioners maintain that they should be considered regular
employees, because their task as money sorters and counters
was necessary and desirable to the business of respondent
bank. They further allege that their contracts served merely to
preclude the application of Article 280 and to bar them from
becoming regular employees. Private respondent, on the other
hand, submits that petitioners were hired only as ―special
workers and should not in any way be considered as part of
the regular complement of the Bank‖ and were only hired due
to "pakiusap". They were told from the start, "with the
assistance of government representatives," that they could not
become regular employees. They were ―special‖ workers under
Article 80 of the Labor Code.
ISSUE:
Whether petitioners are regular employees
RATIO DECIDENDI:
The Supreme Court ruled that the facts, viewed in light of the
Labor Code and the Magna Carta for Disabled Persons,
indubitably show that the petitioners, except sixteen of them,
should be deemed regular employees. As such, they have
acquired legal rights that this Court is duty-bound to protect
and uphold, not as a matter of compassion but as a
consequence of law and justice.
The uniform employment contracts of the petitioners stipulated
that they shall be trained for a period of one month, after
which the employer shall determine whether or not they
should be allowed to finish the 6-month term of the contract.
Furthermore, the employer may terminate the contract at any
time for a just and reasonable cause. Unless renewed in
writing by the employer, the contract shall automatically expire
at the end of the term.
The renewal of the contracts of the handicapped workers and
the hiring of others lead to the conclusion that their tasks were
beneficial and necessary to the bank. More important, these
facts show that they were qualified to perform the
responsibilities of their positions. In other words, their
56
disability did not render them unqualified or unfit for the tasks
assigned to them.
Section 5 of the Magna Carta provides that no disabled person
shall be denied access to opportunities for suitable
employment. Since the Magna Carta accords them the rights
of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code which provides for the regular
and casual employment. The test whether an employee is
regular as laid down in De Leon vs. NLRC is whether the
particular activity performed by the employee is usually
necessary or desirable in the usual business or trade of the
employer.
RULING:
WHEREFORE, premises considered, the Petition is hereby
GRANTED. The June 20, 1995 Decision and the August 4, 1995
Resolution of the NLRC are REVERSED and SET ASIDE.
Respondent Far East Bank and Trust Company is hereby
ORDERED to pay back wages and separation pay to each of
the following twenty-seven (27) petitioners, namely, Marites
Bernardo, Elvira Go Diamante, Rebecca E. David, David P.
Pascual, Raquel Estiller, Albert Hallare, Edmund M. Cortez,
Joselito O. Agdon, George P. Ligutan Jr., Liliberh Q. Marmolejo,
Jose E. Sales, Isabel Mamauag, Violeta G. Montes, Albino
Tecson, Melody V. Gruela, Bernadeth D. Agero, Cynthia de
Vera, Lani R. Cortez, Ma. Isabel B. Concepcion, Margaret
Cecilia Canoza, Thelma Sebastian, Ma. Jeanette Cervantes,
Jeannie Ramil, Rozaida Pascual, Pinky Baloloa, Elizabeth
Ventura and Grace S. Pardo. The NLRC is hereby directed to
compute the exact amount due each of said employees,
pursuant to existing laws and regulations, within fifteen days
from the finality of this Decision. No costs.
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE
PHILIPPINES (BLUM), ET AL., petitioners, vs. HON.
RONALDO B. ZAMORA, PRESIDENTIAL ASSISTANT FOR
LEGAL AFFAIRS, OFFICE OF THE PRESIDENT, HON.
AMADO G. INCIONG, UNDERSECRETARY OF LABOR,
SAN MIGUEL CORPORATION, GENARO OLIVES,
ENRIQUE CAMAHORT, FEDERICO OÑATE, ERNESTO
VILLANUEVA, ANTONIO BOCALING and GODOFREDO
CUETO, respondents.
G.R. No. L-48645 January 7, 1987
GUTIERREZ, JR., J.:
FACTS:
The petitioners worked exclusively at the San Miguel
Corporation (SMC) as pahinantes or kargadors for almost 7
years. Their work was neither regular nor continuous,
depending on the volume of bottles to be loaded and
unloaded, as well as the business activity of the company.
However, work exceeded the eight-hour day and sometimes,
necessitated work on Sundays and holidays and for this, they
were neither paid overtime nor compensation. BLUM filed a
complaint against SMC and its officers for unfair labor practice
and illegal dismissal. It was alleged that respondents ordered
the individual complainants to disaffiliate from the complainant
union; and that management dismissed the individual
complainants when they insisted on their union membership.
Respondents denied the same contending that complainants
are not and have never been employees of respondent
company but employees of the independent contractor; that
respondent company has never had control over the means
and methods followed by the independent contractor. The
Labor Arbiter found for complainants which was concurred in
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
by the NLRC. On appeal, the Secretary set aside the NLRC
ruling, stressing the absence of an employer-employee
relationship.
ISSUE:
Whether an employer-employee relationship exists between
the workers and San Miguel Corporation
RATIO DECIDENDI:
The Supreme Court ruled that there exists an employer-
employee relationship in this case. In determining the
existence of an employer-employee relationship, the elements
that are generally considered are the following: (a) the
selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the employer's
power to control the employee with respect to the means and
methods by which the work is to be accomplished. It is the
called "control test" that is the most important element.
The records fail to show that SMC entered into mere oral
agreements of employment with the workers. Considering the
length of time that the petitioners have worked with the
company, there is justification to conclude that they were
engaged to perform activities necessary in the usual business
or trade and the petitioners are, therefore regular employees.
Despite past shutdowns of the glass plant, the workers
promptly returned to their jobs. The term of the petitioner‘s
employment appears indefinite and the continuity and
habituality of the petitioner‘s work bolsters the claim of an
employee status.
The existence of an independent contractor relationship is
generally established by the following criteria: "whether or not
the contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term and
duration of the relationship; the right to assign the
performance of a specified piece of work; the control and
supervision of the work to another; the employer's power with
respect to the hiring, firing and payment of the contractor's
workers; the control of the premises; the duty to supply the
premises tools, appliances, materials and labor; and the mode,
manner and terms of payment". None of the above criteria
exists in the case at bar.
RULING:
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
GRANTED. The San Miguel Corporation is hereby ordered to
REINSTATE petitioners, with three (3) years backwages.
However, where reinstatement is no longer possible, the
respondent SMC is ordered to pay the petitioners separation
pay equivalent to one (1) month pay for every year of service.
GRANDTEQ INDUSTRIAL STEEL PRODUCTS, INC. and
ABELARDO M. GONZALES, Petitioners, vs. EDNA
MARGALLO, Respondent.
G.R. No. 181393 July 28, 2009
CHICO-NAZARIO, J.:
FACTS
Grandteq, the petitioner is a domestic corporation engaged in
the business of selling welding electrodes, alloy steels,
aluminum and copper alloys. It employed Edna Margallo,
respondent as Sales Engineer. As an employee, the respondent
availed of the car loan program offered to her by the
petitioner. She paid the downpayment and the amortization of
the car from her own pocket. However, due to alleged
57
moonlighting, sabotage and breach of trust and confidence
against her, she resigned from the company unfortunately the
car that she had was sold to another employee. Further, she
was never paid from her money claims. The petitioner
contended that the respondent had no right to the refund of
her car loan payments because under the terms it expressly
provided that in the event of resignation during the effectivity
of said agreement, her car loan payments would be forfeited in
favor of Grandteq, and Grandteq would regain possession of
the car. As to the money claims, Margallo was not entitled to
sales commission because the computation should be based on
actual collections within 180 days from invoice date which she
failed to achieve. Hence, the respondent filed a complaint to
the Labor Arbiter.
ISSUE/S:
1. WHETHER OR NOT THE TERMS IN THE CAR LOAN
AGREEMENT IS VALID?
2. WHETHER OR NOT TMS. MARGALLO IS ENTITLED TO
MONEY CLAIMS?
RATIO:
The contracting parties may establish such stipulations,
clauses, terms and conditions as they want, and their
agreement would have the force of law between them.
However, those terms and conditions agreed upon must not be
contrary to law, morals, customs, public policy or public order.
Precisely, the law overrides such conditions which are
prejudicial to the interest of the worker. The law affords
protection to an employee, and it will not countenance any
attempt to subvert its spirit and intent. The sheer inequality
that characterizes employer-employee relations, where the
scales generally tip against the employee, often scarcely
provides him real and better options. Moreover, in
controversies between a laborer and his master, doubts
reasonably arising from the evidence, or in the interpretation
of agreements and writing should be resolved in the former‘s
favor
In cases involving money claims of employees, the employer
has the burden of proving that the employees did receive their
wages and benefits and that the same were paid in accordance
with law.
RULING:
The court held that the said provisions plainly are contrary to
the fundamental principles of justice and fairness. It must be
remembered that Margallo herself paid for the down payment
and her share in the monthly amortization of the car. The
principle that no person may unjustly enrich oneself at the
expense of another (Nemo cum alteris detrimento locupletari
potest) is embodied in Article 22 of the New Civil Code.
SANDIGAN SAVINGS and LOAN BANK, INC., and
SANDIGAN REALTY DEVELOPMENT CORPORATION,
petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION and
ANITA M. JAVIER, respondents.
G.R. No. 112877 February 26, 1996
HERMOSISIMA, JR., J.:
FACTS:
Private respondent Anita M. Javier worked as a realty sales
agent of the petitioner Sandigan Realty Development
Corporation (Sandigan Realty). Their agreement was that
Javier would receive a 5% commission for every sale, or if no
sale was made, she would receive a monthly allowance of
P500,00. Subsequently, Javier was hired as a marketing
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
collector of petitioner Sandigan Savings and Loan Bank
(Sandigan Banks) by Angel Andan, the President of both the
Sandigan Bank and Sandigan Realty. On 20 April 1990, Javier
was advised by Angel Andan not to report for work anymore.
This in effect was a notice of dismissal. Despite the notice,
respondent kept showing to work until she left because she
could no longer find her table. Hence, the complaint of illegal
dismissal and requesting for reinstatement.
ISSUE:
WHETHER OR NOT THERE WAS AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED?
RATIO:
In determining the existence of an employer-employee
relationship, the following elements are generally considered:
(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the
employer's power to control the employee with respect to the
means and methods by which the work is to be accomplished.
RULING:
The court held that private respondent was not a regular
employee of Sandigan Realty Development Corporation but of
the Sandigan Savings and Loan Bank, Inc.
As it appears that Sandigan Realty had no control over the
conduct of Javier as a realty sales agent since its only concern
or interest was in the result of her work and not in how it was
achieved, there cannot now be any doubt that Javier was not
an employee, much less a regular employee of the Sandigan
Realty. Hence, she cannot be entitled to the right to security of
tenure nor to backwages and separation pay as a consequence
of her separation therefrom. Evidently, the legal relation of
Javier to the Sandigan Realty can be that of an independent
contractor, where the control of the contracting party is only
with respect to the result of the work, as distinguished from an
employment relationship where the person rendering service is
under the control of the hirer with respect to the details and
manner of performance
However, private respondent Anita Javier is considered a
regular employee of Sandigan Banks since the four elements of
an employee-employer relationship are present, so by virtue of
her employment status, is, under the law entitled to security of
tenure, which means that she has the right to continue in
employment until the same is terminated under conditions
required by Article 279 of the Labor Code.
SMART COMMUNICATIONS, INC., petitioner, vs. REGINA
M. ASTORGA, respondent.
G.R. No. 148132 January 28, 2008
NACHURA, J.:
FACTS:
Regina M. Astorga was employed by respondent Smart
Communications, Incorporated (SMART) as District Sales
Manager of the Corporate Sales Marketing Group/ Fixed
Services Division (CSMG/FSD). In February 1998, SMART
launched an organizational realignment to achieve more
efficient operations. Part of the reorganization was the
outsourcing of the marketing and sales force. Thus, SMART
entered into a joint venture agreement with NTT of Japan, and
formed SMART-NTT Multimedia, Incorporated (SNMI). Since
SNMI was formed to do the sales and marketing work, SMART
abolished the CSMG/FSD, Astorga‘s division. SMART then
58
conducted a performance evaluation of CSMG personnel and
those who garnered the highest ratings were favorably
recommended to SNMI. Astorga landed last in the performance
evaluation, thus, she was not recommended by SMART.
SMART, nonetheless, offered her a supervisory position in the
Customer Care Department, but she refused the offer because
the position carried lower salary rank and rate. The termination
of her employment prompted Astorga to file a Complaint for
illegal dismissal, non-payment of salaries and other benefits
with prayer for moral and exemplary damages against SMART.
She claimed that abolishing CSMG and, consequently,
terminating her employment was illegal for it violated her right
to security of tenure. She also posited that it was illegal for an
employer, like SMART, to contract out services which will
displace the employees, especially if the contractor is an in-
house agency.
SMART responded that there was valid termination. It argued
that Astorga was dismissed by reason of redundancy, which is
an authorized cause for termination of employment, and the
dismissal was effected in accordance with the requirements of
the Labor Code. The redundancy of Astorga‘s position was the
result of the abolition of CSMG and the creation of a
specialized and more technically equipped SNMI, which is a
valid and legitimate exercise of management prerogative.
ISSUE:
WHETHER OR NOT THE DISMISSAL OF ASTORGA WAS VALID?
RATIO:
Article 283 of the Labor Code clearly provides:
Closure of establishment and reduction of personnel. — 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
operation 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
Ministry of Labor and Employment at least one (1) month
before the intended date thereof
RULING:
The court held that the dismissal of Astorga was valid. The
organizational realignment introduced by SMART, which
culminated in the abolition of CSMG/FSD and termination of
Astorga‘s employment was an honest effort to make SMART‘s
sales and marketing departments more efficient and
competitive.
Indeed, the labor law has inclined towards the worker and
upheld his cause in most of his conflicts with his employer.
This favored treatment is consonant with the social justice
policy of the Constitution. But while tilting the scales of justice
in favor of workers, the fundamental law also guarantees the
right of the employer to reasonable returns for his
investment. In this light, we must acknowledge the prerogative
of the employer to adopt such measures as will promote
greater efficiency, reduce overhead costs and enhance
prospects of economic gains, albeit always within the
framework of existing laws. Accordingly, the Court found the
dismissal of the employees therein valid and for authorized
cause even if the employer failed to comply with the notice
requirement under Article 283 of the Labor Code.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ANGELINA FRANCISCO, Petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION, KASEI
CORPORATION, SEIICHIRO TAKAHASHI, TIMOTEO
ACEDO, DELFIN LIZA, IRENE BALLESTEROS, TRINIDAD
LIZA and RAMON ESCUETA, Respondents.
G.R. No. 170087 August 31, 2006
YNARES-SANTIAGO, J.:
FACTS:
Petitioner was hired by the respondent, Kasei Corporation
during its incorporation stage. In 1996, petitioner was
designated as Acting Manager, handling recruitment of all
employees as well as handling all other matters pertaining to
the operation of Kasei Restaurant which is owned and
operated by Kasei Corporation.
In January 2001, petitioner was replaced by Liza R. Fuentes as
Manager. On October 15, 2001, petitioner asked for her salary
from the treasurer but she was informed that she is no longer
connected with the company. Since she was no longer being
paid, she did not report for work and instead filed an action for
constructive dismissal before the Labor Arbiter.
Private respondents averred that petitioner is not an employee
of Kasei Corporation for she was only as one of its technical
consultants on accounting matters and act concurrently as
Corporate Secretary. As technical consultant, she works at her
own discretion without control and supervision of Kasei
Corporation. Since her designation depended solely upon the
will of management, she may be terminated any time
considering that her services were only temporary in nature
and dependent on the needs of the corporation.
ISSUE:
Whether or not there was an employer-employee relationship
between petitioner and private respondent Kasei Corporation?
RATIO:
Generally, courts have relied on the so-called right of control
test where the person for whom the services are performed
reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end. However, in
certain cases the control test is not sufficient to give a
complete picture of the relationship between the parties, owing
to the complexity of such a relationship where several
positions have been held by the worker. The better approach
would therefore be to adopt a two-tiered test involving: (1) the
putative employer‘s power to control the employee with
respect to the means and methods by which the work is to be
accomplished; and (2) the underlying economic realities of the
activity or relationship.
Thus, the determination of the relationship between employer
and employee depends upon the circumstances of the whole
economic activity, such as: (1) the extent to which the services
performed are an integral part of the employer‘s business; (2)
the extent of the worker‘s investment in equipment and
facilities; (3) the nature and degree of control exercised by the
employer; (4) the worker‘s opportunity for profit and loss; (5)
the amount of initiative, skill, judgment or foresight required
for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the
worker and the employer; and (7) the degree of dependency
of the worker upon the employer for his continued
employment in that line of business.
59
RULING:
The court held that there was an employer-employee
relationship between the petitioner and the private respondent.
When petitioner was designated as General Manager,
respondent corporation made a report to the SSS. Petitioner‘s
membership in the SSS as manifested by a copy of the SSS
specimen signature card which was signed by the President of
Kasei Corporation and the inclusion of her name in the on-line
inquiry system of the SSS prove the existence of an employer-
employee relationship between petitioner and respondent
corporation. It is therefore apparent that petitioner is
economically dependent on respondent corporation for her
continued employment in the latter‘s line of business.
In Domasig v. National Labor Relations Commission, it was
held that in a business establishment, an identification card is
provided not only as a security measure but mainly to identify
the holder thereof as a bona fide employee of the firm that
issues it.
ABS-CBN BROADCASTING CORPORATION, petitioner,
vs.
MARLYN NAZARENO, MERLOU GERZON, JENNIFER
DEIPARINE, and JOSEPHINE LERASAN, respondents.
G.R. No. 164156 September 26, 2006
CALLEJO, SR., J.:
FACTS
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is
engaged in the broadcasting business and owns a network of
television and radio stations, Petitioner employed respondents
Nazareno, Gerzon, Deiparine, and Lerasan as production
assistants (PAs) on different dates. They were assigned at the
news and public affairs, for various radio programs in the Cebu
Broadcasting Station. They were issued ABS-CBN employees‘
identification cards and were required to work for a minimum
of eight hours a day, including Sundays and holidays.
On December 19, 1996, petitioner and the ABS-CBN Rank-and-
File Employees executed a Collective Bargaining Agreement
(CBA) However, since petitioner refused to recognize PAs as
part of the bargaining unit, respondents were not included to
the CBA.
On October 12, 2000, respondents filed a Complaint for
Recognition of Regular Employment Status, Underpayment of
Overtime Pay, Holiday Pay, Premium Pay, Service Incentive
Pay, Sick Leave Pay, and 13th Month Pay with Damages
against the petitioner before the NLRC.
ISSUE:
WHETHER OR NOT THERE EXISTS AN EMPLOYER-EMPLOYEE
RELATIONSHIP?
RATIO:
Where a person has rendered at least one year of service,
regardless of the nature of the activity performed, or where
the work is continuous or intermittent, the employment is
considered regular as long as the activity exists, the reason
being that a customary appointment is not indispensable
before one may be formally declared as having attained
regular status, as provided in Article 280 of the Labor Code.
Thus, there are two kinds of regular employees under the law:
(1) those engaged to perform activities which are necessary or
desirable in the usual business or trade of the employer; and
(2) those casual employees who have rendered at least one
year of service, whether continuous or broken, with respect to
the activities in which they are employed.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
The court held that there exist an employer-employee
relationship between the petitioner and the respondent.
In the case at bar, the employer-employee relationship
between petitioner and respondents has been proven. First, in
the selection and engagement of respondents, no peculiar or
unique skill, talent or celebrity status was required from them
because they were merely hired through petitioner‘s personnel
department just like any ordinary employee. Secondly, The so-
called "talent fees" of respondents correspond to wages given
as a result of an employer-employee relationship. Respondents
did not have the power to bargain for huge talent fees, a
circumstance negating independent contractual relationship.
Thirdly, Petitioner could always discharge respondents should
it find their work unsatisfactory, and respondents are highly
dependent on the petitioner for continued work. Lastly, the
degree of control and supervision exercised by petitioner over
respondents through its supervisors negates the allegation that
respondents are independent contractors.The presumption is
that when the work done is an integral part of the regular
business of the employer and when the worker, relative to the
employer, does not furnish an independent business or
professional service, such work is a regular employment of
such employee and not an independent contractor. It follows
then that respondents are entitled to the benefits provided for
in the existing CBA between petitioner and its rank-and-file
employees. As regular employees, respondents are entitled to
the benefits granted to all other regular employees of
petitioner under the CBA
DANILO B. TABAS, Et. Al., petitioners,
vs.
CALIFORNIA MANUFACTURING COMPANY, INC., LILY-
VICTORIA A. AZARCON, NATIONAL LABOR RELATIONS
COMMISSION, and HON. EMERSON C.
TUMANON, respondents.
G.R. No. L-80680 January 26, 1989
SARMIENTO, J.:
FACTS
Petitioners were employees of Livi Manpower Services, Inc.
(Livi), which subsequently assigned them to work as
"promotional merchandisers" to California Manufacturing
Company pursuant to a manpower supply agreement. The
agreement provided that California "has no control or
supervisions whatsoever over [Livi's] workers with respect to
how they accomplish their work or perform [Californias]
obligation"; the Livi "is an independent contractor and nothing
herein contained shall be construed as creating between
[California] and [Livi] . . . the relationship of principal[-]agent
or employer[-]employee'; that "it is hereby agreed that it is
the sole responsibility of [Livi] to comply with all existing as
well as future laws, rules and regulations pertinent to
employment of labor" and that "[California] is free and
harmless from any liability arising from such laws or from any
accident that may befall workers and employees of [Livi] while
in the performance of their duties for [California].
It was further expressly stipulated that the assignment of
workers to California shall be on a "seasonal and contractual
basis"; that "[c]ost of living allowance and the 10 legal
holidays will be charged directly to [California] at cost "; and
that "[p]ayroll for the preceeding [sic] week [shall] be
delivered by [Livi] at [California's] premises." The petitioners
were then made to sign employment contracts with durations
of six months, upon the expiration of which they signed new
agreements with the same period, and so on.
The petitioners now allege that they had become regular
California employees and demand, as a consequence whereof,
similar benefits. They likewise claim that pending further
proceedings below, they were notified by California that they
60
would not be rehired. As a result, they filed an amended
complaint charging California with illegal dismissal.
ISSUE:
WHETHER OR NOT THE PETIONERS ARE ALREADY REGULAR
EMPOLYEES OF THE RESPONDENT?
RATIO:
ART. 106. Contractor or sub-contractor. — Whenever an
employee enters into a contract with another person for the
performance of the former's work, the employees of the
contractor and of the latter's sub-contractor, if any, shall be
paid in accordance with the provisions of this Code. In the
event that the contractor or sub-contractor fails to pay wages
of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or sub-
contractor to such employees to the extent of the work
performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him
Article 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the date the
employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when
he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is
allowed to work after a probationary period shall be considered
a regular employee.
RULING:
The court granted the petition.
In the case at bar, Livi is admittedly an "independent
contractor providing temporary services of manpower to its
client. When it thus provided California with manpower, it
supplied California with personnel, as if such personnel had
been directly hired by California. Hence, Article 106 of the
Code applies. Further, petitioners had been given an initial six-
month contract renewed for another six months. Accordingly,
under Article 281 of the Code, they had become regular
employees-of-California-and had acquired a security of tenure,
by virtue of the required one-year length-of-service. Hence,
they cannot be separated without due process of law.
LOLITA LOPEZ, petitioner,
vs.
BODEGA CITY (Video-Disco Kitchen of the Philippines)
and/or ANDRES C. TORRES-YAP, respondents.
G.R. No. 155731 September 3, 2007
AUSTRIA-MARTINEZ, J.:
FACTS:
Petitioner was the "lady keeper" of Bodega City tasked with
manning its ladies' comfort room. However, in February 25,
1995, respondent decided to terminate the concessionaire
agreement between them. Hence, the complaint to the Labor
Arbiter for illegal dismissal.
The respondents contended that no employer-employee
relationship ever existed between them and petitioner; that the
latter's services rendered within the premises of Bodega City
was by virtue of a concessionaire agreement she entered into
with respondents.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ISSUE:
WHETHER OR NOT THERE WAS AN EMPLOYER-EMPLOYEE
RELATIONSHIP EXISTED?
RATIO:
To ascertain the existence of an employer-employee
relationship, jurisprudence has invariably applied the four-fold
test, namely: (1) the manner of selection and engagement; (2)
the payment of wages; (3) the presence or absence of the
power of dismissal; and (4) the presence or absence of the
power of control. Of these four, the last one is the most
important. Under the control test, an employer-employee
relationship exists where the person for whom the services are
performed reserves the right to control not only the end
achieved, but also the manner and means to be used in
reaching that end.
RULING:
The court held that there was no employer-employee
relationship between the petitioner and the respondent.
Petitioner failed to cite a single instance to prove that she was
subject to the control of respondents insofar as the manner in
which she should perform her job as a "lady keeper" was
concerned.
It is true that petitioner was required to follow rules and
regulations prescribing appropriate conduct while within the
premises of Bodega City. However, this was imposed upon
petitioner as part of the terms and conditions in the
concessionaire agreement embodied in a 1992 letter of Yap
addressed to petitioner. The concessionaire agreement merely
stated that petitioner shall maintain the cleanliness of the
ladies' comfort room and observe courtesy guidelines that
would help her obtain the results they wanted to achieve.
There is nothing in the agreement which specifies the methods
by which petitioner should achieve these results. Respondents
did not indicate the manner in which she should go about in
maintaining the cleanliness of the ladies' comfort room. Neither
did respondents determine the means and methods by which
petitioner could ensure the satisfaction of respondent
company's customers. In other words, petitioner was given a
free hand as to how she would perform her job as a "lady
keeper." In fact, the last paragraph of the concessionaire
agreement even allowed petitioner to engage persons to work
with or assist her in the discharge of her functions.
VICTORY LINER, INC., Petitioner, vs. PABLO M. RACE,
Respondent.
G.R. No. 164820 March 28, 2007
CHICO-NAZARIO, J.
FACTS:
In June 1993, Pablo Race was employed by the petitioner as a
bus driver. He was assigned to the Alaminos, Pangasinan -
Cubao, Quezon City, route on the evening schedule. On the
night of 24 August 1994, While traversing Moncada, Tarlac,
the bus he was driving was bumped by a Dagupan-bound bus.
Respondent suffered a fractured left leg and was rushed to the
Country Medical and Trauma Center in Tarlac City where he
was operated on and confined from 24 August 1994 up to 10
October 1994. He was further treated at a hospital in Dagupan
City, where his confinement lasted one month. In January
1998, the respondent went to Victory Liner‘s office to report
for work. He was, however, informed by the petitioner that he
was considered resigned from his job. He was offered a
consideration of 50,000, but this was later raised to 100,000.
61
Respondent refused the offer and filed a complaint for illegal
dismissal.
The Labor Arbiter dismissed the complaint for lack of merit. He
stated that the prescriptive period for filing an illegal dismissal
case is four years from the dismissal of the employee
concerned. The Arbiter also ruled that the respondent was not
a regular employee but a mere field personnel and, therefore,
not entitled to service incentive leave, holiday pay, overtime
pay and 13th month pay. He also ruled that respondent failed
to present evidence showing that he was entitled to the money
claims. On the other hand, the NLRC reversed the Labor
Arbiter‘s decision and ordered Race to be reinstated with full
back wages. It ruled that Race was illegally dismissed and that
the respondent‘s filing of complaint was well-within the four-
year prescriptive period. The CA ruled that there was no grave
abuse of discretion by the NLRC and ruled that Race did not
abandon his work.
ISSUES:
1) Whether or not the respondent was illegally dismissed.
2) Whether or not respondent abandoned his work.
3) Whether or not the complaint for illegal dismissal was filed
within the prescriptive period.
RATIO DECIDENDI:
1) Yes, the respondent was illegally dismissed. In the
termination of employment, the employer must (a) give the
employee a written notice specifying the ground or grounds of
termination, giving to said employee reasonable opportunity
within which to explain his side; (b) conduct a hearing or
conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given the
opportunity to respond to the charge, present his evidence or
rebut the evidence presented against him; and (c) give the
employee a written notice of termination indicating that upon
due consideration of all circumstances, grounds have been
established to justify his termination. Petitioner miserably
failed to comply with the foregoing requirements. There was
nothing in the records which evinces that petitioner had sent a
written notice to the respondent informing him of the ground
or grounds of his termination or the reason why he was
deemed resigned. It does not also appear that the petitioner
held a hearing or conference where the respondent was given
the opportunity to answer the charges of abandonment,
insubordination and habitual neglect of duty against him.
Neither did the petitioner send a written notice to the
respondent informing the latter that his service is terminated
after considering all the circumstances.
2) Respondent did not abandon his work. It should be
emphasized that two factors must be present in order to
constitute an abandonment: (a) the failure to report for work
or absence without valid or justifiable reason; and (2) a clear
intention to sever employer-employee relationship. The second
factor is the more determinative factor and is manifested by
overt acts from which it may be deduced that the employee
has no more intention to work. The intent to discontinue the
employment must be shown by clear proof that it was
deliberate and unjustified. Mere absence from work does not
imply abandonment.
The respondent‘s absence from work for a long period of time
was obviously due to the fact that he was still recuperating
from two operations on his fractured leg. Petitioner knew this
very well. In fact, petitioner shouldered the respondent‘s
medication and hospital expenses during the latter‘s
confinement and operation in two hospitals. Moreover, when
the respondent was able to walk, although limping heavily, he
still reported for work to the petitioner and was granted sick
and disability leave. Clearly then, respondent did not abandon
his job on 10 November 1994.
3) Yes, it was filed within the prescriptive period. The four-
year prescriptive period shall commence to run only upon the
accrual of a cause of action of the worker. It is settled that in
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
illegal dismissal cases, the cause of action accrues from the
time the employment of the worker was unjustly terminated.
Thus, the four-year prescriptive period shall be counted and
computed from the date of the employee‘s dismissal up to the
date of the filing of complaint for unlawful termination of
employment.
It is error to conclude that the employment of the respondent
was unjustly terminated on 10 November 1994 because he
was, at that time, still confined at the Specialist Group
Hospital, Dagupan City, for further treatment of his fractured
left leg. He must be considered as merely on sick leave at such
time. Likewise, the respondent cannot also be deemed as
illegally dismissed from work upon his release from the said
hospital in December 1994 up to December 1997 since the
records show that the respondent still reported for work to the
petitioner and was granted sick and disability leave by the
petitioner during the same period. The respondent must be
considered as unjustly terminated from work in January 1998
since this was the first time he was informed by the petitioner
that he was deemed resigned from his work. During that same
occasion, the petitioner, in fact, tried to convince the
respondent to accept an amount of ₱50,000.00 as a
consolation for his dismissal but the latter rejected it. Thus, it
was only at this time that the respondent‘s cause of action
accrued. Consequently, the respondent‘s filing of complaint for
illegal dismissal on 1 September 1999 was well within the four-
year prescriptive period.
RULING:
WHEREFORE, the petition is PARTLY GRANTED insofar as it
prays for the non-reinstatement of respondent. The Decision of
the Court of Appeals dated 26 April 2004 in CA-G.R. SP No.
74010, is hereby AFFIRMED with the following
MODIFICATIONS: Petitioner is ordered to pay the respondent,
in lieu of reinstatement, separation pay of ONE (1) MONTH
PAY for every year of service, and full backwages inclusive of
allowances and other benefits or their monetary equivalent
from 1 January 1998 up to the finality of this Decision. No
costs.
BIENVENIDO D. GOMA, Petitioner, vs. PAMPLONA
PLANTATION INCORPORATED, Respondent.
G.R. No. 160905 July 4, 2008
NACHURA, J.
FACTS:
Bienvenido Goma rendered service in the construction of the
facilities of Pamplona Leisure Corporation (PPLC) in 1995. He
alleges that he worked as a carpenter at the Hacienda
Pamplona and that he worked from 7:30 a.m. to 12:00 noon
and from 1:00 p.m. to 5:00 p.m. daily with a salary rate of
P90.00 a day paid weekly. He further alleged that he worked
continuously until 1997, when he was not given any work
assignment. On a claim that he was a regular employee,
petitioner claimed that he was illegally dismissed when the
respondent refused without just cause to give him work
assignment.
On the other hand, respondent denied having hired the
petitioner as its regular employee. It argued that petitioner
Goma was hired by a certain Antoy Caaveral, the manager of
the hacienda at the time it was owned by Mr. Bower and
leased by Manuel Gonzales, a jai-alai pelotari known as Ybarra.
Respondent Pamplona added that it was not obliged to absorb
the employees of the former owner.
Petitioner filed a complaint for illegal dismissal, underpayment
of wages, non-payment of premium pay for holiday and rest
day, five (5) days incentive leave pay, damages and attorneys
fees, against the respondent.
The Labor Arbiter dismissed the case for lack of merit,
concluding that petitioner was hired by the former owner,
hence, was not an employee of the respondent. Consequently,
62
his money claims were denied. On appeal to the NLRC, the
petitioner obtained favorable judgment when the tribunal
reversed and set aside the Labor Arbiters decision. It upheld
the existence of an employer-employee relationship, taking
into consideration that petitioner worked for the respondent
for a period of two years, which makes him a regular
employee.
Respondent Pamplona then instituted a special civil action
for certiorari under Rule 65 before the Court of Appeals which
granted the same and consequently annulled and set aside the
NLRC decision. It concluded that there was no employer-
employee relationship, and that while the respondents
business required the performance of occasional repairs and
carpentry work, the retention of a carpenter in its payroll was
not necessary or desirable in the conduct of its usual business.
It added that although the petitioner was an employee of the
former owner of the hacienda, the respondent was not
required to absorb such employees because employment
contracts are in personam and binding only between the
parties.
ISSUE:
Whether or not an employee-employer relationship existed
between the petitioner and the respondent.
RATIO DECIDENDI:
The petitioner admitted having been employed by the former
owner prior to 1993 or before the respondent took over the
ownership and management of the plantation, however, he
likewise alleged having been hired by the respondent as a
carpenter in 1995 and having worked as such for two years
until 1997. At the outset, respondent denied that it hired the
petitioner. However, in its petition filed before the CA,
respondent admitted that the petitioner was hired as a project
employee. The Court further ruled that petitioner is a regular
employee by operation of law under Article 280 of the Labor
Code for the reason that he has worked for a period of 2 years
for the respondent.
RULING:
WHEREFORE, premises considered, the petition is GRANTED.
The Decision of the Court of Appeals dated August 27, 2003
and its Resolution dated November 11, 2003 in CA-G.R. SP No.
74892 are REVERSED and SET ASIDE. Petitioner is found to
have been illegally dismissed from employment and thus, is
ENTITLED to: 1) Salary Differential embodied in the NLRC
decision dated October 24, 2000 in NLRC Case No. V-000882-
99; 2) Separation Pay; 3) Backwages; and 4) Attorneys fees
equivalent to ten percent (10%) of the monetary awards.
Upon finality of this judgment, let the records of the case be
remanded to the NLRC for the computation of the exact
amounts due the petitioner.
DR. CARLOS L. SEVILLA and LINA O. SEVILLA,
petitioners-appellants, vs. THE COURT OF APPEALS,
TOURIST WORLD SERVICE, INC., ELISEO S. CANILAO,
and SEGUNDINA NOGUERA, respondents-appellees.
G.R. No. L-41182-3 April 16, 1988
SARMIENTO, J.
FACTS:
Segundina Noguera entered into a lease contract with Tourist World
Service Inc., represented by Eliseo Canilao, wherein the former
agreed to lease her premises to the latter for use as a branch office. When
the office was opened, it was run by Lina Sevilla, petitioner
herein, who was also a signatory to the lease agreement. She
held herself solidarily liable with Tourist World Inc. to pay the
monthly rentals and was given the title of branch manager for
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
appearance‘s sake only. Sevilla earned her own commissions
and did not receive any salary from Tourist World.
The respondent was later informed that Sevilla was connected
with rival firm, and since the branch office was losing its
business, Tourist World considered closing down its office. On
January 3, 1962, the contract with appellee for the use of the
branch office premises was terminated and while the effectivity
thereof was January 31, 1962, the appellees no longer used it.
Because of this, Gabino Canilao, the secretary of Tourist
World, went over to the branch office, and found the
premises locked. Being unable to contact Lina Sevilla, he
padlocked the premises on June 4, 1962 to protect the
interests of the Tourist World Service. When neither
appellant Sevilla nor any of his employees could
enter, a complaint was filed by the appellants against
the appellees. Tourist World insisted that Sevilla was a mere
employee, being the ―branch manager‖ of its branch office and
that she had no say on the lease executed with the private
respondent, Noguera.
ISSUE:
Whether or not an employer-employee relationship existed
between Sevilla and Tourist World Service.
RATIO DECIDENDI:
No employer-employee relationship existed between the
parties. Lina Sevilla, was not subject to control by the private
respondent Tourist World Service, Inc., either as to the result
of the enterprise or as to the means used in connection
therewith. In the first place, under the contract of lease
covering the Tourist Worlds Ermita office, she had bound
herself insolidum as and for rental payments, an arrangement
that would be like claims of a master-servant relationship. True
the respondent Court would later minimize her participation in
the lease as one of mere guaranty, that does not make her an
employee of Tourist World, since in any case, a true employee
cannot be made to part with his own money in pursuance of
his employer's business, or otherwise, assume any liability
thereof. In that event, the parties must be bound by some
other relation, but certainly not employment.
In addition to this, when the branch office was opened, the
same was run by the herein appellant Lina O. Sevilla payable
to Tourist World Service, Inc. by any airline for any fare
brought in on the effort of Mrs. Lina Sevilla. Under these
circumstances, it cannot be said that Sevilla was under the
control of Tourist World Service, Inc. "as to the means used."
Sevilla in pursuing the business, obviously relied on her own
gifts and capabilities.
The fact that Sevilla had been designated 'branch manager"
does not make her, ergo, Tourist World's employee.
Employment is determined by the right-of-control test and
certain economic parameters. Titles are weak indicators.
RULING:
WHEREFORE, the Decision promulgated on January 23, 1975
as well as the Resolution issued on July 31, 1975, by the
respondent Court of Appeals is hereby REVERSED and SET
ASIDE. The private respondent, Tourist World Service, Inc.,
and Eliseo Canilao, are ORDERED jointly and severally to
indemnify the petitioner, Lina Sevilla, the sum of 25,00.00 as
and for moral damages, the sum of P10,000.00, as and for
exemplary damages, and the sum of P5,000.00, as and for
nominal and/or temperate damages.
Costs against said private respondents.
63
GRAND ASIAN SHIPPING LINES, INC., EDUARDO P.
FRANCISCO and WILLIAM HOW, Petitioners, vs.
WILFREDO GALVEZ, JOEL SALES, CRISTITO GRUTA,
DANILO ARGUELLES, RENATO BATAYOLA, PATRICIO
FRESMILLO, JOVY NOBLE, EMILIO DOMINICO, BENNY
NILMAO, and JOSE AUSTRAL, Respondents.
G.R. No. 178184 January 29, 2014
DEL CASTILLO, J.
FACTS:
Petitioner Grand Asian Shipping Lines, Inc. (GASLI) is a
domestic corporation engaged in transporting liquified
petroleum gas from Petron Corporation‘s refinery to its plant
and depot. Sometime in January 2000, one of the vessel‘s
Oilers, Richard Abis, reported to GASLI‘s Office and Crewing
Manager, an alleged illegal activity being committed by
respondents involving the vessel, M/T Dorothy Uno. It was
reported that in about four to five voyages a week, a
substantial volume of fuel oil is unconsumed and stored in the
vessel‘s fuel tanks. However, Gruta, the vessel‘s Chief
Engineer, would misdeclare it as consumed fuel in the
Engineer‘s Voyage Reports. Then, the saved fuel oil is
siphoned and sold to other vessels out at sea usually at
nighttime. The respondents would then divide among
themselves the proceeds of the sale.
As a result of Abis‘ report, an investigation, audit and
examination of the Engineer‘s Voyage Reports was conducted
by the petitioner‘s internal auditor. A Certification of
Overstatement of Fuel Oil Consumption was issued, which led
to the filing of a formal complaint for qualified before the
Criminal Investigation and Detection Group (CIDG) at Camp
Crame against respondents. GASLI then placed respondents
under preventive suspension, and after conducting
administrative hearings, petitioner company decided to
terminate respondents from employment. The respondents
except Joel Sales, the vessel‘s Chief Mate, were thus served
with notices informing them of their termination for serious
misconduct, willful breach of trust, and commission of a crime
or offense against their employer.
Respondents and the other dismissed crewmembers filed with
the NLRC separate complaints for illegal suspension and
dismissal, underpayment/non-payment of salaries/wages,
overtime pay, premium pay for holiday and rest day, holiday
pay, service incentive leave pay, hazard pay, tax refunds and
indemnities for damages and attorney‘s fees against
petitioners. The Labor Arbiter rendered a Decision finding the
dismissal of all 21 complainants illegal. However, the NLRC
found that the respondent‘s dismissal was valid, with the
exception of Sales. It also struck down the monetary awards
given by the Labor Arbiter. In addition, it also ruled that
Galvez, a ship captain, is considered a managerial employee
not entitled to premium pay for holiday and rest day, holiday
pay and service incentive leave pay.
Respondents, excluding the other complainants, filed a Petition
for Certiorari with the CA. The CA conformed with the Labor
Arbiter‘s ruling that petitioners‘ evidence was inadequate to
support the charge of pilferage and justify respondents‘
termination.
ISSUES:
1) Whether or not the respondents were illegally
dismissed.
2) Whether or not Gruta and Galvez are entitled to
holidays pay and their other monetary claims.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RATIO DECIDENDI:
1) Not all the respondents were dismissed for just
causes. In termination disputes, the burden of
proving that the dismissal is for a just or valid cause
rests on the employers. Failure on their part to
discharge such burden will render the dismissal
illegal. As specified in the termination notice,
respondents were dismissed on the grounds of (i)
serious misconduct, particularly in engaging in
pilferage while navigating at sea, (ii) willful breach of
the trust reposed by the company, and (iii)
commission of a crime or offense against their
employer. Mere filing of a formal charge does not
automatically make the dismissal valid. Evidence
submitted to support the charge should be evaluated
to see if the degree of proof is met to justify
respondents‘ termination. The affidavit executed by
Montegrico simply contained the accusations of Abis
that respondents committed pilferage, which
allegations remain uncorroborated.
With regard to the issue of lost of trust and
confidence, distinction should be made between
managerial and rank and file employees. With respect
to rank-and-file personnel, loss of trust and
confidence, as ground for valid dismissal, requires
proof of involvement in the alleged events while for
managerial employees, the mere existence of a basis
for believing that such employee has breached the
trust of his employer would suffice for his dismissal.
Galvez, as the ship captain, is considered a
managerial employee since his duties involve the
governance, care and management of the vessel.
Gruta, as chief engineer, is also a managerial
employee for he is tasked to take complete charge of
the technical operations of the vessel. As captain and
as chief engineer, Galvez and Gruta perform functions
vested with authority to execute management policies
and thereby hold positions of responsibility over the
activities in the vessel. Indeed, their position requires
the full trust and confidence of their employer for
they are entrusted with the custody, handling and
care of company property and exercise authority over
it. Thus, there is some basis for the loss of confidence
reposed on Galvez and Gruta.
2) Galvez and Gruta, as managerial employees, are not
entitled to their claims for holiday pay, service
incentive leave pay and premium pay for holiday and
restday. Article 82 of the Labor Code specifically
excludes managerial employees from the coverage of
the law regarding conditions of employment which
include hours of work, weekly rest periods, holidays,
service incentive leaves and service charges.
RULING:
WHEREFORE, the Court of Appeals‘ Decision dated September
12, 2006 and the Resolution dated May 23, 2007 in CA-G.R. SP
No. 82379 are ANNULLED and SET ASIDE. Respondents
Wilfredo Galvez and Cristito Gruta are hereby DECLARED
dismissed from employment for just cause while respondent
Joel Sales was not dismissed from employment.
64
"BROTHERHOOD" LABOR UNITY MOVEMENT OF THE
PHILIPPINES, ET AL., petitioners, vs. HON. RONALDO
B. ZAMORA, PRESIDENTIAL ASSISTANT FOR LEGAL
AFFAIRS, OFFICE OF THE PRESIDENT, HON. AMADO G.
INCIONG, UNDERSECRETARY OF LABOR, SAN MIGUEL
CORPORATION, GENARO OLIVES, ENRIQUE
CAMAHORT, FEDERICO OÑATE, ERNESTO VILLANUEVA,
ANTONIO BOCALING and GODOFREDO CUETO,
respondents.
G.R. No. L-48645 January 7, 1987
GUTIERREZ, JR., J
FACTS:
The petitioners are workers who have been employed at the
San Miguel Parola Glass Factory since 1961, averaging about
seven years of service at the time of their termination. They
worked as "cargadores" or "pahinante" at the SMC Plant. Their
Work did not necessarily mean a full eight hour day for the
petitioners. However, work,at times, exceeded the eight hour
day and necessitated work on Sundays and holidays. For this,
they were neither paid overtime nor compensation for work on
Sundays and holidays. Petitioners were also paid every ten
days on a piece rate basis.
Sometime in January, 1969, 140 workers organized and
affiliated themselves with the petitioner union and engaged in
union activities. They aired their grievances such as being paid
below the minimum wage law, inhuman treatment, being
forced to borrow at usurious rates of interest and to buy raffle
tickets, coerced by withholding their salaries, and salary
deductions made without their consent. However, their gripes
and grievances were not heeded by the respondents. On
February 6, 1969, the petitioner union filed a notice of strike
with the Bureau of Labor Relations in connection with the
dismissal of some of its members who were allegedly
castigated for their union membership and warned that should
they persist in continuing with their union activities they would
be dismissed from their jobs. Although several conciliation
conferences were scheduled for the parties to settle their
differences, San Miguel refused to bargain with its workers,
reasoning that the petitioners were not its employees.
On February 20, 1969, all the petitioners were dismissed from
their jobs and, thereafter, denied entrance to respondent
company's glass factory despite their regularly reporting for
work. A complaint for illegal dismissal and unfair labor practice
was filed by the petitioners.
ISSUE:
Whether or not the petitioners are not employees for the
reason that they rendered work on piece basis.
RATIO DECIDENDI:
The petitioners are still employees despite working on piece
basis. As reiterated in the Court‘s ruling in Dy Keh Beng v.
International Labor and Marine Union of the Philippines (90
SCRA 161): "Circumstances must be construed to determine
indeed if payment by the piece is just a method of
compensation and does not define the essence of the relation.
Units of time and units of work are in establishments like
respondent are just yardsticks whereby to determine rate of
compensation, to be applied whenever agreed upon. We
cannot construe payment by the piece where work is done in
such an establishment so as to put the worker completely at
liberty to turn him out and take in another at pleasure."
Article 106 of the Labor Code provides the legal effect of a
labor only contracting scheme, to wit:
... the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers
in the same manner and extent as if the latter were directly
employed by him.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
GRANTED. The San Miguel Corporation is hereby ordered to
REINSTATE petitioners, with three (3) years backwages.
However, where reinstatement is no longer possible, the
respondent SMC is ordered to pay the petitioners separation
pay equivalent to one (1) month pay for every year of service.
NATIONAL WATERWORKS and SEWERAGE AUTHORITY,
petitioner, vs. NWSA CONSOLIDATED UNIONS, ET AL.,
respondents.
G.R. No. L-18939 August 31, 1964
BAUTISTA ANGELO, J.
FACTS:
Petitioner NAWASA and respondent NWASA Consolidated
Labor Unions are parties in a controversy involving the
implementation of RA No. 1880 or the 40-Hour Work Week
Law and the alleged violations of their CBA. The intervenors,
Jesus Centeno, Cesar Cabrera, Feliciano Duiguan, Cecilio
Remotigue also demanded overtime pay as managerial
employees. NAWASA contends that as a public corporation, it
does not have control, supervision or jurisdiction to fix rates
concerning the operation of its services. It further argued that
as a public utility, it is exempted from paying additional
compensation for work rendered on Sundays and legal
holidays, and that the intervenors are not entitled to the
benefits of CA No. 444 as amended.
ISSUES:
1) Whether or not NAWASA is a public utility and,
therefore, exempted from paying additional
compensation for work on Sundays and legal
holidays.
2) Whether or not the intervenors are "managerial
employees" within the meaning of Republic Act 2377
and, therefore, not entitled to the benefits of
Commonwealth Act No. 444, as amended.
RATIO DECIDENDI:
1) NAWASA is a public utility because its primary
function is to construct, maintain and operate water
reservoirs and waterworks for the purpose of
supplying water to the inhabitants, as well as
consolidate and centralize all water supplies and
drainage systems in the Philippines. A public utility is
exempt from paying additional compensation for work
on Sundays and legal holidays conformably to Section
4 of Commonwealth Act No. 444 which provides that
the prohibition, regarding employment of Sundays
and holidays unless an additional sum of 25% of the
employee's regular remuneration is paid shall not
apply to public utilities such as those supplying gas,
electricity, power, water or providing means of
transportation or communication. In other words, the
employees and laborers of NAWASA can be made to
work on Sundays and legal holidays without being
required to pay them an additional compensation of
25%.
In the case at bar, however, it has been stipulated
that prior to the enactment of Republic Act No. 1880,
providing for the implementation of the 40-Hour
Week Law, the Metropolitan Water District had been
paying 25% additional compensation for work on
Sundays and legal holidays to its employees and
laborers by virtue of Resolution No. 47, series of
1948, of its board of Directors, which practice was
65
continued by the NAWASA when the latter took over
the service. And in the collective bargaining
agreement entered into between the NAWASA and
respondent unions it was agreed that all existing
benefits enjoyed by the employees and laborers prior
to its effectivity shall remain in force and shall form
part of the agreement, among which certainly is the
25% additional compensation for work on Sundays
and legal holidays therefore enjoyed by said laborers
and employees. It may, therefore, be said that while
under Commonwealth Act No. 444 a public utility is
not required to pay additional compensation to its
employees and workers for work done on Sundays
and legal holidays, there is, however, no prohibition
for it to pay such additional compensation if it
voluntarily agrees to do so. The NAWASA committed
itself to pay this additional compensation. It must pay
not because of compulsion of law but because of
contractual obligation.
2) The intervenors in the case at bar are not managerial
employees and are thus, entitled to compensation.
Section 2 of Republic Act 2377 provides:
Sec. 2. This Act shall apply to all persons employed in
any industry or occupation, whether public or private
with the exception of farm laborers, laborers who
prefer to be paid on piece work basis, managerial
employees, outside sales personnel, domestic
servants, persons in the personal service of another
and members of the family of the employer working
for him.
The term "managerial employee" in this Act shall
mean either (a) any person whose primary duty
consists of the management of the establishment in
which he is employed or of a customarily recognized
department or subdivision thereof, or (b) ally officer
or member of the managerial staff.
One of the distinguishing characteristics managerial employee
may be known as expressed in the explanatory note of
Republic Act No. 2377 is that he is not subject to the rigid
observance of regular office hours. The true worth of his
service does not depend so much on the time he spends in
office but more on the results he accomplishes. In fact, he is
free to go out of office anytime.
The intervenors herein are holding position of responsibility.
One of them is the Secretary of the Board of Directors.
Another is the private secretary of the general manager.
Another is a public relations officer, and many other chiefs of
divisions or sections and others are supervisors and overseers.
Respondent court, however, after examining carefully their
respective functions, duties and responsibilities found that their
primary duties do not bear any direct relation with the
management of the NAWASA, nor do they participate in the
formulation of its policies nor in the hiring and firing of its
employees. The chiefs of divisions and sections are given ready
policies to execute and standard practices to observe for their
execution. Hence, it concludes, they have little freedom of
action, as their main function is merely to carry out the
company's orders, plans and policies. As a matter of fact, they
are required to observe working hours and record their time
work and are not free to come and go to their offices, nor
move about at their own discretion. They do not, therefore,
come within the category of "managerial employees" within
the meaning of the law.
RULING:
We hereby affirm the decision of respondent court in all other
respects, without pronouncement as to costs.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
SAN MIGUEL BREWERY, INC., petitioner, vs.
DEMOCRATIC LABOR ORGANIZATION, ET AL.,
respondents.
G.R. No. L-18353 July 31, 1963
BAUTISTA ANGELO, J.:
FACTS:
The Democratic Labor Association demanded overtime, night-
shift differential and additional compensation for work done
during Sundays and holidays as provided for in CA No. 444 on
behalf of its outside sales personnel. Petitioner San Miguel
Brewery, on the other hand, contended that its salesmen are
not covered by CA No. 444 for the reason that the
commissions they earn outside of the required eight hours of
work already takes the place of overtime compensation. The
situation of their salesmen can be likened to an employee who
is paid on piece-work or commission basis, which is excluded
from the operation of the Eight-Hour Labor Law.
ISSUE:
Whether or not the petitioner‘s salesmen are covered by the
compensation paid to employees for work rendered beyond
eight hours and for work done during Sundays and legal
holidays.
RATIO DECIDENDI:
Compensation for overtime work under the Eight Hour Law
only has application where an employee or laborer is paid on a
monthly or daily basis, or is paid a monthly or daily
compensation, in which case, if he is made to work beyond the
requisite period of 8 hours, he should be paid the additional
compensation prescribed by law. This law has no application
when the employee or laborer is paid on a piece-work,
"pakiao", or commission basis, regardless of the time
employed. The philosophy behind this exemption is that his
earnings in the form of commission based on the gross
receipts of the day. His participation depends upon his industry
so that the more hours he employs in the work the greater are
his gross returns and the higher his commission. As explained
in Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202:
The reasons for excluding an outside salesman are fairly
apparent. Such salesman, to a greater extent, works
individually. There are no restrictions respecting the time he
shall work and he can earn as much or as little, within the
range of his ability, as his ambition dictates. In lieu of overtime
he ordinarily receives commissions as extra compensation. He
works away from his employer's place of business, is not
subject to the personal supervision of his employer, and his
employer has no way of knowing the number of hours he
works per day.
With regard to the compensation for work performed during
Sundays and holidays, the employees in the case herein are
entitled to the compensation abovementioned for the reason
that it runs counter to law. Section 4 of Commonwealth Act
No. 444 expressly provides that no person, firm or corporation
may compel an employee or laborer to work during Sundays
and legal holidays unless he is paid an additional sum of 25%
of his regular compensation. This proviso is mandatory,
regardless of the nature of compensation. The only exception
is with regard to public utilities who perform some public
service.
RULING:
WHEREFORE, the decision of the industrial court is hereby
modified as follows: the award with regard to extra work
performed by those employed in the outside or field sales force
is set aside. The rest of the decision insofar as work performed
on Sundays and holidays covering watchmen and security
66
guards, as well as the award for night salary differentials, is
affirmed. No costs.
ARICA, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION, respondents.
G.R. No. 78210. February 28, 1989.
PARAS, J.
FACTS:
Petitioners contend that the preliminary activities as workers of
respondents STANFILCO in the assembly area is compensable
as working time (from 5:30 to 6:00 o'clock in the morning)
since these preliminary activities are necessarily and primarily
for private respondent's benefit.
These preliminary activities of the workers are as follows:
a. First there is the roll call. This is followed by getting
their individual work assignments from the foreman.
b. Thereafter, they are individually required to
accomplish the Laborer's Daily Accomplishment
Report during which they are often made to explain
about their reported accomplishment the following
day.
c. Then they go to the stockroom to get the working
materials, tools and equipment.
d. Lastly, they travel to the field bringing with them their
tools, equipment and materials.
All these activities take 30 minutes to accomplish.
The Minister of Labor RULING that the thirty-minute assembly
time long practiced and institutionalized by mutual consent of
the parties under the Collective Bargaining Agreement cannot
be considered as waiting time within the Labor Code. The
thirty-minute assembly is a deeply-rooted, routinary practice of
the employees, and the proceedings attendant thereto are not
infected with complexities as to deprive the workers the time
to attend to other personal pursuits. They are not new
employees as to require the company to deliver long briefings
regarding their respective work assignments. The thirty-minute
assembly time was not primarily intended for the interests of
the employer, but ultimately for the employees to indicate their
availability or non-availability for work during every working
day.
ISSUE:
Whether or not the 30-minute activity of the petitioners before
the scheduled working time is compensable under the Labor
Code.
RATIO DECIDENDI:
The records show that the Labor Arbiters' decision pointed out
in detail the basis of his findings and conclusions, and no
cogent reason can be found to disturb these findings nor of
those of the National Labor Relations Commission which
affirmed the same.
RULING:
PREMISES CONSIDERED, the petition is DISMISSED for lack of
merit and the decision of the National Labor Relations
Commission is AFFIRMED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
UNIVERSITY OF PANGASINAN FACULTY UNION,
petitioner, vs. UNIVERSITY OF PANGASINAN,
respondent.
G.R. No. L-63122. February 20, 1984.
GUTIERREZ, JR., J.
FACTS:
In November and December, 1981, the petitioner‘s members
were fully paid their regular monthly salaries. However, from
November 7 to December 5, during the semestral break, they
were not paid their ECOLA. The private respondent claims that
the teachers are not entitled thereto because the semestral
break is not an integral part of the school year and there being
no actual services rendered by the teachers during said period,
the principle of "No work, no pay" applies.
ISSUE:
Whether or not petitioner‘s members are entitled to ECOLA
during the semestral break.
RATIO DECIDENDI:
The semestral breaks are in the nature of work interruptions
beyond the employees‘ control. These breaks cannot be
considered as absences within the meaning of the law for
which deductions may be made from monthly allowances. The
"No work, no pay" principle does not apply in the instant case.
It is clear from the aforequoted provision of law that it
contemplates a "no work" situation where the employees
voluntarily absent themselves. Petitioners, in the case at bar,
certainly do not, ad voluntatem, absent themselves during
semestral breaks. Rather, they are constrained to take
mandatory leave from work.
By analogy, we may apply the principle enunciated in the
Omnibus Rules Implementing the Labor Code to wit, the
principles in determining hours worked [Sec. 4(d)] ―The time
during which an employee is inactive by reason of interruptions
in his work beyond his control shall be considered time either if
the imminence of the resumption of work requires the
employee‘s presence at the place of work or if the interval is
too brief to be utilized effectively and gainfully in the
employee‘s own interest.‖
The semestral break scheduled is an interruption beyond
petitioner‘s control. Thus, the semestral break may also be
considered as "hours worked." For this, the teachers are paid
regular salaries and, for this, they should be entitled to ECOLA.
Not only do the teachers continue to work during this short
recess but much less do they cease to live for which the cost
of living allowance is intended. The legal principles of "No
work, no pay; No pay, no ECOLA" must necessarily give way to
the purpose of the law to augment the income of employees to
enable them to cope with the harsh living conditions brought
about by inflation; and to protect employees and their wages
against the ravages brought by these conditions.
RULING:
WHEREFORE the petition for certiorari is hereby GRANTED.
The private respondent is ordered to pay its regular fulltime
teachers/employees emergency cost of living allowances for
the semestral break from November 7 to December 5, 1981
and the undistributed balance of the sixty (60%) percent
incremental proceeds from tuition increases for the same
schoolyear as outlined above. The respondent Commission is
sustained insofar as it DENIED the payment of salaries for the
suspended extra loads on September 21, 1981.
67
SIME DARBY PILIPINAS INC., petitioner, vs. NATIONAL
LABOR RELATIONS COMMISSION, respondent.
G.R. NO. 119205. April 15, 1998.
BELLOSILLO, J.
FACTS:
Prior to the present controversy, all company factory workers
in Marikina including members of private respondent union
worked from 7:45 a.m. to 3:45 p.m. with a 30 minute paid on
call lunch break. Petitioner issued a memorandum to all
factory-based employees advising all its monthly salaried
employees in its Marikina Tire Plant a change in work schedule.
By the change in the work schedule and discontinuance of the
30-minute paid on call lunch break, private respondent filed a
complaint before the Labor Arbiter for unfair labor practice,
discrimination and evasion of liability. However, the Labor
Arbiter dismissed the complaint on the ground that the change
in the work schedule and the elimination of the 30-minute paid
lunch break of the factory workers constituted a valid exercise
of management prerogative and that the new work schedule,
break time and one-hour lunch break did not have the effect of
diminishing the benefits granted to factory workers as the
working time did not exceed eight hours.
On the other hand, the public respondent declared that the
new work schedule deprived the employees of the benefits of
time-honored company practice of providing its employees a
30-minute paid lunch break resulting in an unjust diminution of
company privileges prohibited by Art. 100 of the Labor Code,
as amended. Hence, this petition.
ISSUE:
Is the act of management in revising the work schedule of its
employees and discarding their paid lunch break constitutive of
unfair labor practice?
RATIO DECIDENDI:
The right to fix the work schedules of the employees rests
principally on their employer. In the instant case petitioner, as
the employer, cites as reason for the adjustment the efficient
conduct of its business opeRATIO DECIDENDIns and its
improved production. It RATIO DECIDENDInalizes that while
the old work schedule included a 30-minute paid lunch break,
the employees could be called upon to do jobs during that
period as they were on call.
For a full one-hour undisturbed lunch break, the employees
can freely and effectively use this hour not only for eating but
also for their rest and comfort which are conducive to more
efficiency and better performance in their work. Since the
employees are no longer required to work during this one-hour
lunch break, there is no more need for them to be
compensated for this period. We agree with the Labor Arbiter
that the new work schedule fully complies with the daily work
period of eight hours without violating the Labor Code.
RULING:
WHEREFORE, the Petition is GRANTED. The Resolution of the
National Labor Relations Commission dated 29 November 1994
is SET ASIDE and the decision of the Labor Arbiter dated 26
November 1993 dismissing the complaint against petitioner for
unfair labor practice is AFFIRMED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PAN AMERICAN WORLD AIRWAYS SYSTEM
(PHILIPPINES), petitioner, vs. PAN AMERICAN
EMPLOYEES ASSCOIATION, respondent.
G.R. No. L-16275. February 23, 1961.
REYES, J.B.L., J.
FACTS:
Petitioner herein claims that the one-hour meal period should
not be considered as overtime work (after deducting 15
minutes), because the evidence showed that complainants
could rest completely, and were not in any manner under the
control of the company during that period.
The court below found, on the contrary, that during the so
called meal period, the mechanics were required to stand by
for emergency work; that if they happened not to be available
when called, they were reprimanded by the leadman; that as
in fact it happened on many occasions, the mechanics had
been called from their meals or told to hurry Employees
Association up eating to perform work during this period.
ISSUE:
Whether the one-hour meal period should be considered
overtime work is not supported by substantial evidence.
RATIO DECIDENDI:
Far from being unsupported by substantial evidence, the
record clearly confirms the above factual findings of the
Industrial Court.
RULING:
The judgment appealed from is affirmed. Costs against
appellant.
NATIONAL DEVELOPMENT COMPANY vs. CIR
GR. NO. L-15422. November 30,1962
FACTS:
At the National Development Co., a government-owned and
controlled corporation, there were four shifts of work. In each
shift, there was a one-hour mealtime period.
The records disclose that although there was a one-hour
mealtime, petitioner nevertheless credited the workers with
eight hours of work for each shift and paid them for the same
number of hours. However, since 1953, whenever workers in
one shift were required to continue working until the next
shift, petitioner instead of crediting them with eight hours of
overtime work, has been paying them for six hours only,
petitioner that the two hours corresponding to the mealtime
periods should not be included in computing compensation. On
the other hand, respondent National Textile Workers Union
whose members are employed at the NDC, maintained the
opposite view and asked the Court of Industrial Relations to
order the payment of additional overtime pay corresponding to
the mealtime periods.
ISSUE:
Whether on the basis of the evidence, the mealtime breaks
should be considered working time under the following
provision of the law.
68
RULING:
The legal working day for any person employed by another
shall be of not more than eight hours daily. When the work is
not continuous, the time during which the laborer is not
working and can leave his working place and can rest
completely shall not be counted. (Sec. 1, Com. Act No. 444, as
amended. Emphasis ours.)
It will be noted that, under the law, the idle time that an
employee may spend for resting and during which he may
leave the spot or place of work though not the premises2 of
his employer, is not counted as working time only where the
work is broken or is not continuous.
The determination as to whether work is continuous or not is
mainly one of fact which We shall not review as long as the
same is supported by evidence.
In this case, the CIR's finding that work in the petitioner
company was continuous and did not permit employees and
laborers to rest completely.
While it may be correct to say that it is well-high impossible for
an employee to work while he is eating, yet under Section 1 of
Com. Act No. 444 such a time for eating can be segregated or
deducted from his work, if the same is continuous and the
employee can leave his working place rest completely. The
time cards show that the work was continuous and without
interruption. There is also the evidence adduced by the
petitioner that the pertinent employees can neither freely leave
their working place nor rest completely.
MERCURY DRUG CO., INC., petitioner, vs. NARDO
DAYAO, ET AL., respondent.
G.R. No. L-30452. September 30, 1982.
GUTIERREZ, JR., J.
FACTS:
This is a verified petition filed by Nardo Dayao and 70 others
against Mercury Drug Co., Inc. and Mercury Drug Co., Inc.,
Employees Association, praying for payment of extra
compensation on work done at night. In a separate motion,
respondent management and respondent union move to
dismiss on the ground that the CIR has no jurisdiction over the
acts complained of against the respondent union. The CIR and
Court En Banc dismiss the motion. Thus, respondent
management filed an affirmative and special defenses. Then,
the respondent court ruled that respondent Mercury Drug
Company, Inc. is hereby ordered to pay additional sum or
premium equivalent to 25% of their respective basic or regular
salaries for nighttime services. Not satisfied, respondents filed
a motion for its reconsideration but was denied by the court.
Then, petitioner Mercury Drug Company, Inc. contended that
respondent CIR erred in sustaining private respondents' claims
for nighttime work premiums not only because of the declared
policy on collective bargaining freedom expressed in RA 875
and the express prohibition in section 7 of said statute, but
also because of the waiver of said claims and the total absence
of evidence thereon.
ISSUE:
Whether respondent CIR erred in sustaining respondent‘s claim
on nighttime work premiums.
RATIO DECIDENDI:
The respondent CIR did not err in sustaining respondent‘s
claim on nighttime work premiums. The computations
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
presented by the petitioner miserably failed to show the exact
and correct annual salary as stated in the respective contracts
of employment of the respondent employees. The figures
arrived at in each case did not tally with the annual salaries on
to the employees' contracts of employment, the difference
varying from P1.20 to as much as P14.40 always against the
interest of the employees. The respondent court sustained the
private respondents' evidence to the effect that their 25%
additional compensation for work done on Sundays and Legal
Holidays were not included in their respective monthly salaries.
The private respondents presented evidence through the
testimonies of Nardo Dayao, Ernesto Talampas, and Josias
Federico who are themselves among the employees who filed
the case for unfair labor practice in the respondent court and
are private respondents herein.
RULING:
WHEREFORE, the petition is hereby dismissed. The decision
and resolution appealed from are affirmed with costs against
the petitioner.
EMIRATE SECURITY AND MAINTENANCE SYSTEMS,
INC., petitioners, vs. GLENDA MENESE, respondent.
G.R. No. 182848. October 5, 2011.
BRION, J.
FACTS:
Menese was required to work 7 days a week, from 8:00 a.m.
to 5:00 p.m. She was also required to report for work on
holidays, except on New Year‘s Day and Christmas. She
claimed that she was never given overtime, holiday, rest day
and premium pay. Menese further alleged that on May 4,
2001, she started getting pressures from the agency for her to
resign from her position because it had been committed to a
certain Amy Claro. She claimed that the petitioners dismissed
her from the service without just cause and due process. The
petitioners denied liability. They alleged that they had been
receiving numerous complaints from security guards and other
agency employees about Menese‘s unprofessional conduct.
The petitioners posit that Menese is not entitled to overtime
pay because she did not work beyond the eight 8 hour working
period; her 1 hour time off from twelve noon to 1:00 p.m. is
not compensable. However, Menese contended that she
continued working even during the 1 hour break meal.
ISSUE:
Whether Menese is entitled to overtime pay.
RATIO DECIDENDI:
In Global Incorporated v. Commissioner Atienza, a claim for
overtime pay will not be granted for want of factual and legal
basis. There is no such proof in support of Menese‘s claim for
overtime pay other than her contention that she worked from
8:00 a.m. up to 5:00 p.m. She presented no evidence to show
that she was working during the entire one hour meal break.
Thus, she is not entitled to overtime pay.
RULING:
WHEREFORE, premises considered, except for the overtime
pay award and the refund of deposit for the cash bond, the
petition is DENIED for lack of merit. The assailed decision and
resolution of the Court of Appeals are AFFIRMED, with the
following modifications:
1) The deletion of the overtime pay award; and
2) Adjustment of the refund of the cash or surety bond deposit
award from P2, 500.00 to P600.00.
Costs against the petitioners.
69
NATIONAL SUGAR REFINERIES CORPORATION,
petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and NBSR SUPERVISORY UNION,
(PACIWU) TUCP, respondents.
G.R. No. 101761. March 24, 1993.
REGALADO, J.
FACTS:
Private respondent union represents the former supervisors of
the NASUREFCO Batangas Sugar Refinery. The petitioner
implemented a Job Evaluation (JE) Program affecting all
employees, from rank-and-file to department heads. As a
result, all positions were re-evaluated, and all employees
including the members of respondent union were granted
salary adjustments and increases in benefits commensurate to
their actual duties and functions. About ten years prior to the
JE Program, the members of respondent union used to be paid
overtime, rest day and holiday pay. Two years after the
implementation of the JE Program, the members of herein
respondent union filed a complainant with the executive labor
arbiter for non-payment of overtime, rest day and holiday pay
allegedly in violation of Article 100 of the Labor Code.
ISSUE:
Whether supervisory employees, as defined in Article 212(m),
Book V of the Labor Code, should be considered as officers or
members of the managerial staff under Article 82, Book III of
the same Code, and hence are not entitled to overtime rest
day and holiday pay.
RATIO DECIDENDI:
Article 82, Book III of the Labor Code states that ―The
provisions of this title shall apply to employees in all
establishments and undertakings whether for profit or not, but
not to xxx xxx xxx managerial employees xxx xxx xxx
'managerial employees' refer to those whose primary duty
consists of the management of the establishment in which they
are employed or of a department or subdivision thereof, and to
other officers or members of the managerial staff.‖ Section 2,
Rule I, Book III of the Rules to Implement the Labor Code
states
―(b) Managerial employees, if they meet all of the following
conditions, namely:
(1) Their primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof:
(2) They customarily and regularly direct the work of two
or more employees therein:
(3) They have the authority to hire or fire other
employees of lower rank; or their suggestions and
recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
employees are given particular weight.
(c) Officers or members of a managerial staff if they perform
the following duties and responsibilities:
(1) The primary duty consists of the performance of work
directly related to management policies of their
employer;
(2) Customarily and regularly exercise discretion and
independent judgment;
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of
the management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or
technical lines requiring special training, experience,
or knowledge; or (iii) execute under general
supervision special assignments and tasks; and
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
(4) Who do not devote more 20 percent of their hours
worked in a work-week to activities which are not
directly and closely related to the performance of the
work described in paragraphs (1), (2), and above."
The respondent union is clearly officers or members of the
managerial staff because they meet all the conditions
prescribed by law and, hence, they are not entitled to
overtime, rest day. In other words, for purposes of forming
and joining unions, certification elections, collective bargaining,
and so forth, the union members are supervisory employees.
In terms of working conditions and rest periods and
entitlement to the questioned benefits, however, they are
officers or members of the managerial staff, hence they are
not entitled thereto.
RULING:
WHEREFORE, the impugned decision and resolution of
respondent National Labor Relations Commission promulgated
on July 19, 1991 and August 30, 1991, respectively, are hereby
ANNULLED and SET ASIDE for having been rendered and
adopted with grave abuse of discretion, and the basic
complaint of private respondent union is DISMISSED.
WILGEN LOON, ET. AL., Petitioners,
vs.
POWER MASTER, INC., TRI-C GENERAL SERVICES, and
SPOUSES HOMER and CARINA ALUMISIN,
Respondents.
G.R. No. 189404 December 11, 2013
BRION, J.:
FACTS:
Respondents Power Master, Inc. and Tri-C General Services
employed and assigned the petitioners as janitors and
leadsmen in various PLDT offices in Metro Manila area.
Subsequently, the petitioners filed a complaint for money
claims against respondents for alleged nonpayment of
minimum wages, overtime, holiday, premium, service incentive
leave, and thirteenth month pays. They further averred that
the respondents made them sign blank payroll sheets. On June
11, 2001, the petitioners amended their complaint and
included illegal dismissal as their cause of action. They claimed
that the respondents relieved them from service in retaliation
for the filing of their original complaint.
The Labor Arbiter partially ruled in favor of the petitioners. The
LA awarded the petitioners salary differential, service incentive
leave, and thirteenth month pays. In awarding these claims,
the LA stated that the burden of proving the payment of these
money claims rests with the employer. The LA also awarded
attorney‘s fees in favor of the petitioners, pursuant to Article
111 of the Labor Code.
However, the LA denied the petitioners claims for backwages,
overtime, holiday, and premium pays. The LA observed that
the petitioners failed to show that they rendered overtime
work and worked on holidays and rest days without
compensation. The LA further concluded that the petitioners
cannot be declared to have been dismissed from employment
because they did not show any notice of termination of
employment.
ISSUES:
Whether petitioners are entitled to overtime pay?
70
RATIO:
NO. Petitioners failed to provide sufficient factual basis for the
award of overtime, and premium pays for holidays and rest
days. The burden of proving entitlement to overtime pay and
premium pay for holidays and rest days rests on the employee
because these are not incurred in the normal course of
business. In the present case, the petitioners failed to adduce
any evidence that would show that they actually rendered
service in excess of the regular eight working hours a day, and
that they in fact worked on holidays and rest days.
RULING:
WHEREFORE, based on these premises, we REVERSE and SET
ASIDE the decision dated June 5, 2009, and the resolution
dated August 28, 2009 of the Court of Appeals in CA-G.R. SP
No. 95182. This case is REMANDED to the Labor Arbiter for the
sole purpose of computing petitioners' full backwages
(computed from the date of their respective dismissals up to
the finality of this decision) and their salary differential, service
incentive leave, holiday, thirteenth month pays, and attorney's
fees equivalent to ten percent (10%) of the withheld wages.
The respondents are further directed to immediately post a
satisfactory bond conditioned on the satisfaction of the awards
affirmed in this Decision.
JULIO N. CAGAMPAN, SILVINO C. VICERA, JORGE C. DE
CASTRO, JUANITO R. DE JESUS, ARNOLD J. MIRANDA,
MAXIMO O. ROSELLO & ANICETO L.
BETANA, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, & ACE
MARITIME AGENCIES, INC., respondents.
G.R. Nos. 85122-24 March 22, 1991
PARAS, J.:
FACTS:
On April 17 and 18,1985, petitioners, all seamen, entered into
separate contracts of employment with the Golden Light Ocean
Transport, Ltd., through its local agency, private respondent
ACE MARITIME AGENCIES, INC.
Petitioners were deployed on May 7, 1985, and discharged on
July 12, 1986.
Thereafter, petitioners filed complaints for non-payment of
overtime pay, vacation pay and terminal pay against private
respondent. In addition, they claimed that they were made to
sign their contracts in blank. Likewise, petitioners averred that
although they agreed to render services on board the vessel
Rio Colorado managed by Golden Light Ocean Transport, Ltd.,
the vessel they actually boarded was MV "SOIC I" managed by
Columbus Navigation. Two (2) petitioners, Jorge de Castro and
Juanito de Jesus, charged that although they were employed
as ordinary seamen (OS), they actually performed the work
and duties of Able Seamen (AB).
POEA granted their prayers, but NLRC reversed such decision.
ISSUE:
Whether petitioners, which are seafarers are entitled to
overtime pay.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RATIO:
NO. The grant of overtime pay embodied in an employment
contract is not automatic. There must be first rendition of
overtime work and the proof to such rendition.
The contract provision means that the fixed overtime pays of
30% would be the basis for computing the overtime pay if and
when overtime work would be rendered. Simply, stated, the
rendition of overtime work and the submission of sufficient
proof that said work was actually performed are conditions to
be satisfied before a seaman could be entitled to overtime pay
which should be computed on the basis of 30% of the basic
monthly salary. In short, the contract provision guarantees the
right to overtime pay but the entitlement to such benefit must
first be established. Realistically speaking, a seaman, by the
very nature of his job, stays on board a ship or vessel beyond
the regular eight-hour work schedule. For the employer to give
him overtime pay for the extra hours when he might be
sleeping or attending to his personal chores or even just lulling
away his time would be extremely unfair and unreasonable.
Seamen are required to stay on board their vessels by the very
nature of their duties, and it is for this reason that, in addition
to their regular compensation, they are given free living
quarters and subsistence allowances when required to be on
board. It could not have been the purpose of our law to
require their employers to pay them overtime even when they
are not actually working; otherwise, every sailor on board a
vessel would be entitled to overtime for sixteen hours each
day, even if he spent all those hours resting or sleeping in his
bunk, after his regular tour of duty. The correct criterion in
determining whether or not sailors are entitled to overtime pay
is not, therefore, whether they were on board and cannot
leave ship beyond the regular eight working hours a day, but
whether they actually rendered service in excess of said
number of hours.
RULING:
WHEREFORE, the decision of the NLRC is hereby AFFIRMED
with the modification that petitioners Cagampan and Vicera are
awarded their leave pay according to the terms of the
contract.
ROMEO LAGATIC, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION,
CITYLAND DEVELOPMENT CORPORATION, STEPHEN
ROXAS, JESUS GO, GRACE LIUSON, and ANDREW
LIUSON, respondents.
G.R. No. 121004 January 28, 1998
ROMERO, J.:
FACTS:
Petitioner Romeo Lagatic was employed in May 1986 by
Cityland, first as a probationary sales agent, and later on as a
marketing specialist. He was tasked with soliciting sales for the
company, with the corresponding duties of accepting call-ins,
referrals, and making client calls and cold calls. Cold calls refer
to the practice of prospecting for clients through the telephone
directory. Cityland, believing that the same is an effective and
cost-efficient method of finding clients, requires all its
marketing specialists to make cold calls.
71
Petitioner was dismissed by City Land on the ground of Gross
Insubordination by non-compliance with the submission of cold
calls and for issuing a written statement posted in his desk ―TO
HELL WITH COLD CALLS‖.
Petitioner filed complaint against City Land for illegal dismissal,
illegal deduction, underpayment, overtime and rest day pay,
damages and attorney‘s fees.
ISSUE:
Whether petitioner is entitled to Overtime pay.
RATIO:
NO. With respect to petitioners claims for overtime pay, rest
day pay and holiday premiums, Cityland maintains that
Saturday and Sunday call-ins were voluntary activities on the
part of sales personnel who wanted to realize more sales and
thereby earn more commissions. It is their contention that
sales personnel were clamoring for the privilege to attend
Saturday and Sunday call-ins, as well as to entertain walk-in
clients at project sites during weekends, that Cityland had to
stagger the schedule of sales employees to give everyone a
chance to do so. But simultaneously, Cityland claims that the
same were optional because call-ins and walk-ins were not
scheduled every weekend. If there really were a clamor on the
part of sales staff to voluntarily work on weekends, so much so
that Cityland needed to schedule them, how come no call-ins
or walk-ins were scheduled on some weekends?
In addition to the above, the labor arbiter and the NLRC
sanctioned respondents practice of offsetting rest day or
holiday work with equivalent time on regular workdays on the
ground that the same is authorized by Department Order 21,
Series of 1990. As correctly pointed out by petitioner, said D.
O. was misapplied in this case. The D. O. involves the
shortening of the workweek from six days to five days but with
prolonged hours on those five days. Under this scheme, non-
payment of overtime premiums was allowed in exchange for
longer weekends for employees. In the instant case,
petitioner‘s workweek was never compressed. Instead, he
claims payment for work over and above his normal 5 days of
work in a week. Applying by analogy the principle that
overtime cannot be offset by undertime, to allow off-setting
would prejudice the worker. He would be deprived of the
additional pay for the rest day work he has rendered and
which is utilized to offset his equivalent time off on regular
workdays. To allow Cityland to do so would be to circumvent
the law on payment of premiums for rest day and holiday
work.
Notwithstanding the foregoing discussion, petitioner failed to
show his entitlement to overtime and rest day pay due, to the
lack of sufficient evidence as to the number of days and hours
when he rendered overtime and rest day work. Entitlement to
overtime pay must first be established by proof that said
overtime work was actually performed, before an employee
may avail of said benefit.
RULING:
WHEREFORE, premises considered, the assailed Resolution is
AFFIRMED and this petition is hereby DISMISSED for lack of
merit. Costs against petitioner.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
PHILIPPINE NATIONAL BANK, petitioner,
vs.
PHILIPPINE NATIONAL BANK EMPLOYEES
ASSOCIATION (PEMA) and COURT OF INDUSTRIAL
RELATIONS, respondents.
G.R. No. L-30279 July 30, 1982
BARREDO, J.:
FACTS:
Petitioner and PEMA disputed the revision in the computation
of overtime pay in the CBA. PEMA wanted the cost of living
allowance which was granted in 1958, and longevity pay which
was granted in 1961 to be included in the computation. PNB
refused and the 2 parties later went before the CIR to resolve
the dispute.
CIR favors PEMA and ordered the inclusion of COLA and
Longevity pay in the computation of Overtime pay. CIR relied
in the ruling of NAWASA v. NAWASA Consolidated Unions
which held that ―for purposes of computing overtime
compensation, regular wage includes all payments which the
parties have agreed shall be received during the work week,
including differentiated payments for working at undesirable
times, such as at night and the board and lodging customarily
furnished the employee.‖ This prompted PNB to appeal, hence
this case.
ISSUE:
Whether the cost of living allowance and longevity pay should
be included in the computation of overtime pay
RATIO:
NO. In any event, as stressed by Us in the Shell cases, the
basis of computation of overtime pay beyond that required by
CA 444 must be the collective bargaining agreement; it is not
for the court to impose upon the parties anything beyond what
they have agreed upon which is not tainted with illegality. On
the other hand, where the parties fail to come to an
agreement, on a matter not legally required, the court abuses
its discretion when it obliges any of them to do more than
what is legally obliged.
Doctrinally, We hold that, in the absence of any specific
provision on the matter in a collective bargaining agreement,
what are decisive in determining the basis for the computation
of overtime pay are two very germane considerations, namely,
(1) whether or not the additional pay is for extra work done or
service rendered and (2) whether or not the same is intended
to be permanent and regular, not contingent nor temporary
and given only to remedy a situation which can change any
time. We reiterate, overtime pay is for extra effort beyond that
contemplated in the employment contract, hence when
additional pay is given for any other purpose, it is illogical to
include the same in the basis for the computation of overtime
pay.
RULING:
WHEREFORE, judgment is hereby rendered reversing the
decision appealed from, without costs.
72
PAMPANGA SUGAR DEVELOPMENT CO.,
INC., petitioner,
vs.
COURT OF INDUSTRIAL RELATIONS AND SUGAR
WORKERS ASSOCIATION, respondents.
G.R. No. L-39387 June 29, 1982
MAKASIAR, J.:
FACTS:
Petitioner Pampanga Sugar Development Company Inc. seeks
the reversal of the decision of the respondent CIR awarding
respondent Sugar Workers Association's counsel attorney's
fees equivalent to 20% in the judgment and ordering the lower
court's Examining Division to compute the wage and fringe
benefits differentials due the 28 individual workers who did not
execute quitclaims as well as attorney's fees corresponding to
20% of the benefits due to 53 workers who entered into
agreements waiving their rights and benefits under the
decision.
Sometime in February, 1956, the workers' affiliates of
respondent Union staged a strike against petitioner company.
This labor dispute was certified by the President to the Court
of Industrial Relations. After six years, the said Court issued an
order directing petitioner company to reinstate the members of
respondent union. On March 12, 1963 some 88 union
members were thus reinstated by petitioner. However,
petitioner discriminated against the reemployed workers with
respect to wage rates, off-season pay, cost of living allowance,
milling bonus and Christmas bonus by depriving them of
aforesaid benefits or by granting to some members benefits
lesser than those given to members of the Pasudeco Workers
Union, another labor group in the service of petitioner. On
December 4, 1972, the CIR handed down a decision adjudging
herein petitioner guilty of unfair labor practice acts and
directing petitioner to pay wage differentials to certain workers
and fringe benefits as would be found due and payable to
them and to readmitted seasonal and casual members of
respondent union totalling 88 with the exception of 7 workers.
ISSUE:
Whether quitclaims (waiver) are valid
RATIO:
NO. The court held that such quitclaims are not valid because
of these reasons: Firstly, the quitclaims are secured after the
petitioner lost its case on the lower court. It's obvious that
petitioner wants to frustrate the decision of the lower court not
to grant benefits to the workers. Secondly, while rights may be
waived they must not be contrary to law, public order, public
policy, morals or good customs or prejudicial to a third person
with a right recognized by law. The quitclaims are not valid
because they are contrary to law. It is provided in the
quitclaims that the workers will forego their benefits and the
petitioner company is exempt from legal liability. Third, the
quitclaims are contrary to public policy. Parties to litigations
cannot be allowed to trifle with the judicial system by coming
to court and later on agreeing to a compromise without the
knowledge and approval of the court. In the case at bar, the
lower court has already rendered a decision on the issues
presented before the alleged quitclaims agreements were
made. It shows the evident bad faith of the petitioner to
comply with its legal obligation.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
Wherefore, the petition is hereby dismissed and respondent cir
(now the nlrc) is hereby directed to implement its order dated
june 6,1974.
Costs against petitioner.
JPL MARKETING PROMOTIONS, Petitioner,
vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS
COMMISSION, NOEL GONZALES, RAMON ABESA III and
FAUSTINO ANINIPOT, Respondents.
G.R. No. 151966 July 8, 2005
TINGA, J.:
FACTS:
JPL Marketing and Promotions is a domestic corporation
engaged in the business of recruitment and placement of
workers. On the other hand, private respondents were
employed by JPL as merchandisers on separate dates and
assigned at different establishments in Naga City and Daet,
Camarines Norte as attendants to the display of California
Marketing Corporation (CMC), one of petitioner‘s clients.
On 13 August 1996, JPL notified private respondents that CMC
would stop its direct merchandising activity in the Bicol Region,
Isabela, and Cagayan Valley effective 15 August 1996. They
were advised to wait for further notice as they would be
transferred to other clients. However, on 17 October
1996, private respondents filed before the NLRC complaints for
illegal dismissal, praying for separation pay, 13th month pay,
service incentive leave pay and payment for moral
damages. While the case is pending and before the expiration
of 6 months having a floating status, some of the respondents
applied and was employed to the store where they were
originally assigned by JPL.
ISSUE:
Whether respondents are entitled to separation pay, 13th
month pay, and service incentive leave pay.
RATIO:
Under Arts. 283 and 284 of the Labor Code, separation pay is
authorized only in cases of dismissals due to any of these
reasons:
(a) installation of labor saving devices;
(b) redundancy;
(c) retrenchment;
(d) cessation of the employer's business; and
(e) when the employee is suffering from a disease and his
continued employment is prohibited by law or is prejudicial to
his health and to the health of his co-employees.
However, separation pay shall be allowed as a measure of
social justice in those cases where the employee is validly
dismissed for causes other than serious misconduct or those
reflecting on his moral character, but only when he was
illegally dismissed.
The common denominator of the instances where payment of
separation pay is warranted is that the employee was
dismissed by the employer. In the instant case, there was no
dismissal to speak of. What they received from JPL was not a
73
notice of termination of employment, but a memo informing
them of the termination of CMC‘s contract with JPL.
More importantly, they were advised that they were to be
reassigned. At that time, there was no severance of
employment to speak of.
Furthermore, Art. 286 of the Labor Code allows the bona fide
suspension of the operation of a business or undertaking for a
period not exceeding six (6) months, wherein some
employee/employees are placed on the so-called "floating
status." When that "floating status" of an employee lasts for
more than six months, he may be considered to have been
illegally dismissed from the service. Thus, he is entitled to the
corresponding benefits for his separation, and this would apply
to suspension either of the entire business or of a specific
component thereof.
As clearly borne out by the records of this case, private
respondents sought employment from other establishments
even before the expiration of the six (6)-month period
provided by law. JPL did not terminate their employment; they
themselves severed their relations with JPL. Thus, they are not
entitled to separation pay.
Nonetheless, JPL cannot escape the payment of 13th month
pay and service incentive leave pay to private respondents.
Said benefits are mandated by law and should be given to
employees as a matter of right.
RULING:
WHEREFORE, the petition is GRANTED IN PART.
The Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 62631 are hereby MODIFIED. The award of separation
pay is deleted. Petitioner is ordered to pay private respondents
their 13th month pay commencing from the date of
employment up to 15 August 1996, as well as service incentive
leave pay from the second year of employment up to 15
August 1996. No pronouncement as to costs.
INSULAR BANK OF ASIA AND AMERICA EMPLOYEES'
UNION (IBAAEU), petitioner,
vs.
HON. AMADO G. INCIONG, Deputy Minister, Ministry of
Labor and INSULAR BANK OF ASIA AND
AMERICA, respondents.
G.R. No. L-52415 October 23, 1984
MAKASIAR, J.:
FACTS:
On June 20, 1975, the petitioner who are monthly paid
employees filed a complaint against the respondent bank for
the payment of holiday pay before the then Department of
Labor, NLRC in Manila. The Labor Arbiter granted petitioner‘s
complaint. Respondent bank complied by paying the holiday
pay to and including January 1976. On December 1975, PD
850 was promulgated amending the provisions of the Labor
Code with the controversial section stating that monthly paid
employees receiving uniform monthly pay is presumed to be
already paid the ―10 paid legal holidays‖. Policy instruction 9
was issued thereafter interpreting the said rule. Respondents
bank stopped the payment by reason of the promulgated PD
850 and Policy Instruction 9.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
ISSUE:
Whether monthly paid employees are excluded from the
benefit of holiday pay.
RATIO:
NO. Article 94 of the Labor Code, as amended by P.D. 850,
provides:
Art. 94. Right to holiday pay. — (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten
(10) workers. ...
The coverage and scope of exclusion of the Labor Code's
holiday pay provisions is spelled out under Article 82 thereof
which reads:
Art. 82. Coverage. — The provision of this Title shall apply to
employees in all establishments and undertakings, whether for
profit or not, but not to government employees, managerial
employees, field personnel members of the family of the
employer who are dependent on him for support domestic
helpers, persons in the personal service of another, and
workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.
From the above-cited provisions, it is clear that monthly paid
employees are not excluded from the benefits of holiday pay.
However, the implementing rules on holiday pay promulgated
by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting that: "employees
who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than
the statutory or established minimum wage shall be presumed
to be paid for all days in the month whether worked or not.
Public respondent maintains that ―The rules implementing P.
D. 850 and Policy Instruction No. 9 were issued to clarify the
policy in the implementation of the ten (10) paid legal
holidays. As interpreted, 'unworked' legal holidays are deemed
paid insofar as monthly paid employees are concerned if (a)
they are receiving not less than the statutory minimum wage,
(b) their monthly pay is uniform from January to December,
and (c) no deduction is made from their monthly salary on
account of holidays in months where they occur. As explained
in Policy Instruction No, 9, 'The ten (10) paid legal holidays
law, to start with, is intended to benefit principally daily paid
employees. In case of monthly, only those whose monthly
salary did not yet include payment for the ten (10) paid legal
holidays are entitled to the benefit' ". This contention is
untenable.
It is elementary in the rules of statutory construction that
when the language of the law is clear and unequivocal the law
must be taken to mean exactly what it says. In the case at
bar, the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit - it provides for
both the coverage of and exclusion from the benefits. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to
categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay. This is a flagrant
violation of the mandatory directive of Article 4 of the Labor
Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor
of labor." Moreover, it shall always be presumed that the
74
legislature intended to enact a valid and permanent statute
which would have the most beneficial effect that its language
permits.
Obviously, the Secretary of Labor had exceeded his statutory
authority granted by Article 5 of the Labor Code authorizing
him to promulgate the necessary implementing rules and
regulations.
RULING:
Wherefore, the petition is hereby granted, the order of public
respondent is set aside, and the decision of labor arbiter
Ricarte t. Soriano dated August 25, 1975, is hereby reinstated.
Costs against private respondent Insular Bank of Asia And
America
THE CHARTERED BANK EMPLOYEES
ASSOCIATION, petitioner,
vs.
HON. BLAS F. OPLE, in his capacity as the Incumbent
Secretary of Labor, and THE CHARTERED
BANK, respondents.
G.R. No. L-44717 August 28, 1985
GUTIERREZ, JR., J.:
FACTS:
Petitioner instituted a complaint with the Department of Labor
against Chartered Bank, for the payment of ten (10) unworked
legal holidays, as well as for premium and overtime
differentials for worked legal holidays from November 1, 1974.
Both the arbitrator and NLRC ruled in favor of the petitioners.
On appeal, the Minister of Labor set aside the decision of the
NLRC and dismissed the petitioner's claim for lack of merit
basing its decision on the provisions of Book III of the
Integrated Rules and Policy Instruction No. 9. Hence, this
petition.
ISSUE:
Whether the petitioners as monthly paid employees are
excluded from the benefit of holiday pay
RATIO:
YES. This is similar in the case of IBAAEU vs. Inciong, as
ruled, Section 2, Rule IV, Book III of the Integrated Rules and
Policy Instruction No. 9, must be declared null and void for
being ultra vires.
The provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit it provides for
both the coverage of and exclusion from the benefit. In Policy
Instruction No. 9, the then Secretary of Labor went as far as to
categorically state that the benefit is principally intended for
daily paid employees, when the law clearly states that every
worker shall be paid their regular holiday pay.
ART. 82. Coverage. The provision of this Title shall apply to
employees in all establishments and undertakings, whether for
profit or not, but not to government employees, managerial
employees, field personnel members of the family of the
employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and
workers who are paid by results.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
The questioned Section 2, Rule IV, Book III of the Integrated
Rules and the Secretary's Policy Instruction No. 9 add another
excluded group, namely, "employees who are uniformly paid
by the month."
When the law provides benefits for "employees in all
establishments and undertakings, whether for profit or not"
and lists specifically the employees not entitled to those
benefits, the administrative agency implementing that law
cannot exclude certain employees from its coverage simply
because they are paid by the month or because they are
already highly paid.
RULING:
WHEREFORE, order of the public respondent is hereby
REVERSED and SET ASIDE. The decision of the National Labor
Relations Commission which affirmed the resolution of the
Labor Arbiter but deleted interest payments is REINSTATED.
UNION OF FILIPRO EMPLOYEES (UFE) vs. BENIGNO
VIVAR, JR., NATIONAL LABOR RELATIONS
COMMISSION and NESTLÉ PHILIPPINES, INC.
(formerly FILIPRO, INC.)
G.R. No. 79255, January 20, 1992
GUTIERREZ, JR., J.
FACTS:
This labor dispute stems from the exclusion of sales personnel
from the holiday pay award and the change of the divisor in
the computation of benefits from 251 to 261 days.
Filipro, Inc. (now Nestle Philippines, Inc.) filed with the
National Labor Relations Commission (NLRC) a petition for
declaratory relief seeking a ruling on its rights and obligations
respecting claims of its monthly paid employees for holiday pay
in the light of the Court's decision in Chartered Bank
Employees Association v. Ople. Both Filipro and the Union of
Filipino Employees (UFE) agreed to submit the case for
voluntary arbitration and appointed respondent Benigno Vivar,
Jr. as voluntary arbitrator. On January 2, 1980, Arbitrator Vivar
rendered a decision directing Filipro to: pay its monthly paid
employees holiday pay pursuant to Article 94 of the Code,
subject only to the exclusions and limitations specified in
Article 82 and such other legal restrictions as are provided for
in the Code. Filipro filed a motion for clarification seeking (1)
the limitation of the award to three years, (2) the exclusion of
salesmen, sales representatives, truck drivers, merchandisers
and medical representatives (hereinafter referred to as sales
personnel) from the award of the holiday pay, and (3)
deduction from the holiday pay award of overpayment for
overtime, night differential, vacation and sick leave benefits
due to the use of 251 divisor. UFE answered that the award
should be made effective from the date of effectivity of the
Labor Code, that their sales personnel are not field personnel
and are therefore entitled to holiday pay, and that the use of
251 as divisor is an established employee benefit which cannot
be diminished. On 1986, Vivar issued an order declaring that
the effectivity of the holiday pay award shall retroact to
November 1, 1974, the date of effectivity of the Labor Code.
He adjudged, however, that the company's sales personnel are
field personnel and, as such, are not entitled to holiday pay.
He likewise ruled that with the grant of 10 days' holiday pay,
the divisor should be changed from 251 to 261 and ordered
the reimbursement of overpayment for overtime, night
differential, vacation and sick leave pay due to the use of 251
days as divisor.
75
ISSUE:
1) Whether Nestle's sales personnel are entitled to holiday
pay;
2) Whether concomitant with the award of holiday pay, the
divisor should be changed from 251 to 261 days
RATIO DECIDENDI:
1) Sales personnel in this case are not entitled to holiday
pay. The law requires that the actual hours of work in
the field be reasonably ascertained. The company has
no way of determining whether or not these sales
personnel, even if they report to the office before
8:00 a.m. prior to field work and come back at 4:30
p.m, really spend the hours in between in actual field
work. The Court ruled that the requirement for the
salesmen and other similarly situated employees to
report for work at the office at 8:00 a.m. and return
at 4:00 or 4:30 p.m. is not within the realm of work in
the field as defined in the Code but an exercise of
purely management prerogative of providing
administrative control over such personnel. The
theoretical analysis that salesmen and other similarly-
situated workers on the given time creating the
assumption that their field work is supervised, is
surface projection. Actual field work begins after 8:00
a.m., when the sales personnel follow their field
itinerary, and ends immediately before 4:00 or 4:30
p.m. when they report back to their office. The period
between the given time comprises their hours of work
in the field, the extent or scope and result of which
are subject to their individual capacity and industry
and which "cannot be determined with reasonable
certainty." This is the reason why effective
supervision over field work of salesmen and medical
representatives, truck drivers and merchandisers is
practically a physical impossibility. Consequently, they
are excluded from the ten holidays with pay award.
Moreover, the requirement that "actual hours of work
in the field cannot be determined with reasonable
certainty" must be read in conjunction with Rule IV,
Book III of the Implementing Rules which provides:
This rule shall apply to all employees except: xxx xxx
xxx (e) Field personnel and other employees whose
time and performance is unsupervised by the
employer xxx xxx
Hence, in deciding whether or not an employee's
actual working hours in the field can be determined
with reasonable certainty, query must be made as to
whether or not such employee's time and
performance is constantly supervised by the
employer.
As enunciated in the case of San Miguel Brewery, Inc.
v. Democratic Labor Organization, the Court had
occasion to discuss the nature of the job of a
salesman. Citing the case of Jewel Tea Co. v.
Williams, C.C.A. Okla., 118 F. 2d 202, the Court
stated: The reasons for excluding an outside
salesman are fairly apparent. Such a salesman, to a
greater extent, works individually. There are no
restrictions respecting the time he shall work and he
can earn as much or as little, within the range of his
ability, as his ambition dictates. In lieu of overtime he
ordinarily receives commissions as extra
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
compensation. He works away from his employer's
place of business, is not subject to the personal
supervision of his employer, and his employer has no
way of knowing the number of hours he works per
day. While in that case the issue was whether or not
salesmen were entitled to overtime pay, the same
rationale for their exclusion as field personnel from
holiday pay benefits also applies.
2) The divisor should be 251 days. The reimbursement
of such overpayment with the use of 251 as divisor
arises concomitant with the award of ten holidays
with pay. The divisor assumes an important role in
determining whether or not holiday pay is already
included in the monthly paid employee's salary and in
the computation of his daily rate. As held in the case
of, Chartered Bank Employees Association v. Ople
(supra) that even without the presumption found in
the rules and in the policy instruction, the company
practice indicates that the monthly salaries of the
employees are so computed as to include the holiday
pay provided by law.
In the case of Chartered Bank, in computing overtime
compensation for its employees, employs a "divisor"
of 251 days. The 251 working days divisor is the
result of subtracting all Saturdays, Sundays and the
ten (10) legal holidays from the total number of
calendar days in a year. In the petitioner's case, its
computation of daily ratio since September 1, 1980, is
as follows: monthly rate x 12 months (251 days).
Following the criterion laid down in the Chartered
Bank case, the use of 251 days' divisor by respondent
Filipro indicates that holiday pay is not yet included in
the employee's salary, otherwise the divisor should
have been 261. It must be stressed that the daily
rate, assuming there are no intervening salary
increases, is a constant figure for the purpose of
computing overtime and night differential pay and
commutation of sick and vacation leave credits.
Necessarily, the daily rate should also be the same
basis for computing the 10 unpaid holidays. To
change the divisor from 251 to 261 days would result
in a lower daily rate which is violative of the
prohibition on non-diminution of benefits found in
Article 100 of the Labor Code.
RULING:
WHEREFORE, the order of the voluntary arbitrator in hereby
MODIFIED. The divisor to be used in computing holiday pay
shall be 251 days. The holiday pay as above directed shall be
computed from October 23, 1984. In all other respects, the
order of the respondent arbitrator is hereby AFFIRMED. SO
ORDERED.
PRODUCERS BANK OF THE PHILIPPINES, vs.
NATIONAL LABOR RELATIONS COMMISSION and
PRODUCERS BANK EMPLOYEES ASSOCIATION
G.R. No. 100701, March 28, 2001
GONZAGA-REYES, J.:
FACTS:
Present petition originated from a complaint filed by private
respondent on 11 February 1988. The Labor Arbiter found
private respondents claims to be unmeritorious and dismissed
76
its complaint. In a complete reversal, however, the NLRC
granted all of private respondents claims, except for damages:
1. The unpaid bonus (mid-year and Christmas bonus) and
13th month pay; 2) xxx 3) xxx
ISSUE:
Whether the NLRC gravely abused its discretion in granting the
payment of bonuses and 13th month pay?
RATIO DECIDENDI:
a) As to Bonuses
As to the bonuses, private respondent declared in its position
paper filed with the NLRC that:
1. Producers Bank of the Philippines, a banking institution, has
been providing several benefits to its employees since 1971
when it started its operation. Among the benefits it had been
regularly giving is a mid-year bonus equivalent to an
employees one-month basic pay and a Christmas bonus
equivalent to an employees one whole month salary (basic pay
plus allowance);
2. When P.D. 851, the law granting a 13th month pay, took
effect, the basic pay previously being given as part of the
Christmas bonus was applied as compliance to it (P.D. 851),
the allowances remained as Christmas bonus;
3. From 1981 up to 1983, the bank continued giving one
month basic pay as mid-year bonus, one month basic pay as
13th month pay but the Christmas bonus was no longer based
on the allowance but on the basic pay of the employees which
is higher;
4. In the early part of 1984, the bank was placed under
conservatorship but it still provided the traditional mid-year
bonus;
5. By virtue of an alleged Monetary Board Resolution No. 1566,
the bank only gave a one-half (1/2) month basic pay as
compliance of the 13th month pay and none for the Christmas
bonus
Private respondent argues that the mid-year and Christmas
bonuses, by reason of their having been given for thirteen
consecutive years, have ripened into a vested right and, as
such, can no longer be unilaterally withdrawn by petitioner
without violating Article 100 prohibits the diminution or
elimination of benefits already being enjoyed by the
employees. Although private respondent concedes that the
grant of a bonus is discretionary on the part of the employer, it
argues that, by reason of its long and regular concession, it
may become part of the employees regular compensation.
On the other hand, petitioner asserts that it cannot be
compelled to pay the alleged bonus differentials due to its
depressed financial condition, as evidenced by the fact that in
1984 it was placed under conservatorship by the Monetary
Board. According to petitioner, it sustained losses in the
millions of pesos from 1984 to 1988, an assertion which was
affirmed by the labor arbiter. Moreover, petitioner points out
that the collective bargaining agreement of the parties does
not provide for the payment of any mid-year or Christmas
bonus.
A bonus is an amount granted and paid to an employee for his
industry and loyalty which contributed to the success of the
employers business and made possible the realization of
profits. It is an act of generosity granted by an enlightened
employer to spur the employee to greater efforts for the
success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something
given in addition to what is ordinarily received by or strictly
due the recipient. Thus, a bonus is not a demandable and
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
enforceable obligation, except when it is made part of the
wage, salary or compensation of the employee.
However, an employer cannot be forced to distribute bonuses
which it can no longer afford to pay. To hold otherwise would
be to penalize the employer for his past generosity.
It was established by the labor arbiter and the NLRC and
admitted by both parties that petitioner was placed under
conservatorship by the Monetary Board.
Under Section 28-A, the Monetary Board may place a bank
under the control of a conservator when it finds that the bank
is continuously unable or unwilling to maintain a condition of
solvency or liquidity.
Petitioner was not only experiencing a decline in its profits, but
was reeling from tremendous losses triggered by a bank-run
which began in 1983. In such a depressed financial condition,
petitioner cannot be legally compelled to continue paying the
same amount of bonuses to its employees. Thus, the
conservator was justified in reducing the mid-year and
Christmas bonuses of petitioner's employees. To hold
otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore the
viability of the financially precarious bank. Ultimately, it is to
the employees' advantage that the conservatorship achieves its
purposes for the alternative would be petitioner's closure
whereby employees would lose not only their benefits, but
their jobs as well.
b) As to 13th Month Pay
With regard to the 13th month pay, the NLRC adopted the
position taken by private respondent and held that the
conservator was not justified in diminishing or not paying the
13th month pay and that petitioner should have instead applied
for an exemption, in accordance with section 7 of Presidential
Decree No. 851 (PD 851), as amended by Presidential Decree
No. 1364, but that it did not do so. In the case at bar, even
assuming the truth of private respondent's claims as contained
in its position paper or Memorandum regarding the payments
received by its members in the form of 13th month pay, mid-
year bonus and Christmas bonus, it is noted that, for each and
every year involved, the total amount given by petitioner
would still exceed, or at least be equal to, one month basic
salary and thus, may be considered as an "equivalent" of the
13thmonth pay mandated by PD 851.
Thus, petitioner is justified in crediting the mid-year bonus and
Christmas bonus as part of the 13th month pay.
RULING:
WHEREFORE, for the reasons above stated, the 30 April 1991
Decision of public respondent in NLRC-NCR Case No. 02-
00753-88, entitled Producers Bank Employees Association v.
Producers Bank of the Philippines, and its 18 June 1991
Resolution issued in the same case are hereby SET ASIDE,
with the exception of public respondents ruling on damages.
SO ORDERED.
ASIAN TRANSMISSION CORPORATION vs. The Hon.
COURT OF APPEALS,
G.R. No. 144664, March 15, 2004
CARPIO-MORALES, J.
FACTS:
The Department of Labor and Employment (DOLE), through
Undersecretary Cresenciano B. Trajano, issued an Explanatory
Bulletin dated March 11, 1993 wherein it clarified, inter alia,
that employees are entitled to 200% of their basic wage on
77
April 9, 1993, whether unworked, which, apart from being
Good Friday [and, therefore, a legal holiday], is also Araw ng
Kagitingan [which is also a legal holiday]. The bulletin reads:
"On the correct payment of holiday compensation on April 9,
1993 which apart from being Good Friday is also Araw ng
Kagitingan, i.e., two regular holidays falling on the same day,
this Department is of the view that the covered employees are
entitled to at least two hundred percent (200%) of their basic
wage even if said holiday is unworked. The first 100%
represents the payment of holiday pay on April 9, 1993 as
Good Friday and the second 100% is the payment of holiday
pay for the same date as Araw ng Kagitingan. Said bulletin was
reproduced on January 23, 1998, when April 9, 1998 was both
Maundy Thursday and Araw ng Kagitingan x x x x Despite the
explanatory bulletin, petitioner opted to pay its daily paid
employees only 100% of their basic pay on April 9, 1998.
Respondent Bisig ng Asian Transmission Labor Union (BATLU)
protested.
Subject of interpretation in the case at bar is Article 94 of the
Labor Code which reads: ART. 94. Xxx xxx (c) As used in this
Article, "holiday" includes by virtue of Executive Order No. 203
issued on June 30, 1987, regular holidays are now: 1. New
Year‘s Day January 1 2. Maundy Thursday Movable Date 3.
Good Friday Movable Date 4. Araw ng Kagitingan April 9
(Bataan and Corregidor Day) 5. Labor Day May 1 6.
Independence Day June 12 7. National Heroes Day Last
Sunday of August 8. Bonifacio Day November 30 9. Christmas
Day December 25 10. Rizal Day December 30
The voluntary arbitrator ruled in favor of the Bisig ng Asian
Transmission Labor Union (BATLU), it was held that Article 94
of the Labor Code provides for holiday pay for every regular
holiday, the computation of which is determined by a legal
formula which is not changed by the fact that there are two
holidays falling on one day, like on April 9, 1998 when it was
Araw ng Kagitingan and at the same time was Maundy
Thursday; and that the law, as amended, enumerates ten
regular holidays for every year should not be interpreted as
authorizing a reduction to nine the number of paid regular
holidays "just because April 9 (Araw ng Kagitingan) in certain
years, like 1993 and 1998, is also Holy Friday or Maundy
Thursday." In the assailed decision, the Court of Appeals
upheld the findings of the Voluntary Arbitrator, holding that
the Collective Bargaining Agreement (CBA) between petitioner
and BATLU, the law governing the relations between them,
clearly recognizes their intent to consider Araw ng Kagitingan
and Maundy Thursday, on whatever date they may fall in any
calendar year, as paid legal holidays during the effectivity of
the CBA and that "[t]here is no condition, qualification or
exception for any variance from the clear intent that all
holidays shall be compensated." The Court of Appeals further
held that "in the absence of an explicit provision in law which
provides for [a] reduction of holiday pay if two holidays
happen to fall on the same day, any doubt in the interpretation
and implementation of the Labor Code provisions on holiday
pay must be resolved in favor of labor."
ISSUE:
Whether the respondent court of appeals committed grave
abuse of discretion in holding that any doubts about the
validity of the policies enunciated in the explanatory bulletin
was laid to rest by the reissuance of the said explanatory
bulletin
RATIO DECIDENDI:
This Court finds no ground to disturb the assailed decision of
the Court of Appeals. Holiday pay is a legislated benefit
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
enacted as part of the Constitutional imperative that the State
shall afford protection to labor.7 Its purpose is not merely "to
prevent diminution of the monthly income of the workers on
account of work interruptions. In other words, although the
worker is forced to take a rest, he earns what he should earn,
that is, his holiday pay." It is also intended to enable the
worker to participate in the national celebrations held during
the days identified as with great historical and cultural
significance. Independence Day (June 12), Araw ng Kagitingan
(April 9), National Heroes Day (last Sunday of August),
Bonifacio Day (November 30) and Rizal Day (December 30)
were declared national holidays to afford Filipinos with a
recurring opportunity to commemorate the heroism of the
Filipino people, promote national identity, and deepen the
spirit of patriotism. Labor Day (May 1) is a day traditionally
reserved to celebrate the contributions of the working class to
the development of the nation, while the religious holidays
designated in Executive Order No. 203 allow the worker to
celebrate his faith with his family.
As reflected above, Art. 94 of the Labor Code, as amended,
affords a worker the enjoyment of ten paid regular holidays.
The provision is mandatory,10 regardless of whether an
employee is paid on a monthly or daily basis. Unlike a bonus,
which is a management prerogative, holiday pay is a statutory
benefit demandable under the law. Since a worker is entitled
to the enjoyment of ten paid regular holidays, the fact that two
holidays fall on the same date should not operate to reduce to
nine the ten holiday pay benefits a worker is entitled to
receive. It is elementary, under the rules of statutory
construction, that when the language of the law is clear and
unequivocal, the law must be taken to mean exactly what it
says. In the case at bar, there is nothing in the law which
provides or indicates that the entitlement to ten days of
holiday pay shall be reduced to nine when two holidays fall on
the same day.
Only an employee who works on the day immediately
preceding or after a regular holiday shall be entitled to the
holiday pay. A paid legal holiday occurring during the
scheduled vacation leave will result in holiday payment in
addition to normal vacation pay but will not entitle the
employee to another vacation leave. Under similar
circumstances, the COMPANY will give a day‘s wage for
November 1st and December 31st whenever declared a
holiday. When required to work on said days, the employee
will be paid according to Art. VI, Sec. 3B hereof.
RULING:
WHEREFORE, the petition is hereby DISMISSED. SO ORDERED
SAN MIGUEL CORPORATION, petitioner, vs. THE
HONORABLE COURT OF APPEALS-FORMER
THIRTEENTH DIVISION, HON. UNDERSECRETARY JOSE
M. ESPAOL, JR., Hon. CRESENCIANO B. TRAJANO, and
HON. REGIONAL DIRECTOR ALLAN M. MACARAYA
G.R. No. 146775, January 30, 2002
KAPUNAN, J.
FACTS:
The Department of Labor and Employment (DOLE), Iligan
District Office, conducted a routine inspection in the premises
of San Miguel Corporation (SMC) in Sta. Filomena, Iligan City.
In the course of the inspection, it was discovered that there
was underpayment by SMC of regular Muslim holiday pay to its
employees. DOLE sent a copy of the inspection result to SMC
and it was received by and explained to its personnel officer
78
Elena dela Puerta. SMC contested the findings and DOLE
conducted summary hearings. Still, SMC failed to submit proof
that it was paying regular Muslim holiday pay to its employees.
Hence, Alan M. Macaraya, Director IV of DOLE Iligan District
Office issued a compliance order, dated 17 December 1993,
directing SMC to consider Muslim holidays as regular holidays
and to pay both its Muslim and non-Muslim employees holiday
pay within thirty (30) days from the receipt of the order. SMC
appealed to the DOLE main office in Manila but its appeal was
dismissed for having been filed late. The dismissal of the
appeal for late filing was later on reconsidered in the order of
17 July 1998 after it was found that the appeal was filed within
the reglementary period. However, the appeal was still
dismissed for lack of merit and the order of Director Macaraya
was affirmed. SMC went to this Court for relief via a petition
for certiorari, which this Court referred to the Court of Appeals.
The appellate court, in the now questioned decision,
promulgated on 08 May 2000, ruled, as follows: WHEREFORE,
the Order dated December 17, 1993 of Director Macaraya and
Order dated July 17, 1998 of Undersecretary Espaol, Jr. is
hereby MODIFIED with regards the payment of Muslim holiday
pay from 200% to 150% of the employee's basic salary. Let
this case be remanded to the Regional Director for the proper
computation of the said holiday pay. SO ORDERED. Its motion
for reconsideration having been denied for lack of merit, SMC
filed a petition for certiorari before this Court, alleging that:
ISSUE:
Whether public respondents seriously erred and committed
grave abuse of discretion when they granted muslim holiday
pay to non-muslim employees of SMC-ilicoco and ordering SMC
to pay the same retroactive for one (1) year from the date of
the promulgation of the compliance order issued on December
17, 199
RATIO DECIDENDI:
Muslim holidays are provided under Articles 169 and 170, Title
I, Book V, of Presidential Decree No. 1083,[8] otherwise
known as the Code of Muslim Personal Laws, which states: Art.
169. Official Muslim holidays. - The following are hereby
recognized as legal Muslim holidays: (a) Amun Jadīd (New
Year), which falls on the first day of the first lunar month of
Muharram; (b) Maulid-un-Nabī (Birthday of the Prophet
Muhammad), which falls on the twelfth day of the third lunar
month of Rabi-ul-Awwal; (c) Lailatul Isrā Wal Mirāj (Nocturnal
Journey and Ascension of the Prophet Muhammad), which falls
on the twenty-seventh day of the seventh lunar month of
Rajab; (d) Īd-ul-Fitr (Hari Raya Puasa), which falls on the first
day of the tenth lunar month of Shawwal, commemorating the
end of the fasting season; and (e) Īd-ūl-Adhā (Hari Raya
Haji),which falls on the tenth day of the twelfth lunar month of
Dhūl-Hijja. Art. 170. Provinces and cities where officially
observed. - (1) Muslim holidays shall be officially observed in
the Provinces of Basilan, Lanao del Norte, Lanao del Sur,
Maguindanao, North Cotabato, Iligan, Marawi, Pagadian, and
Zamboanga and in such other Muslim provinces and cities as
may hereafter be created; (2) Upon proclamation by the
President of the Philippines, Muslim holidays may also be
officially observed in other provinces and cities. The foregoing
provisions should be read in conjunction with Article 94 of the
Labor Code, which provides: Art. 94. Right to holiday pay. (a)
Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments
regularly employing less than ten (10) workers; (b) The
employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent to
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
twice his regular rate; x x x. Petitioner asserts that Article 3(3)
of Presidential Decree No. 1083 provides that (t)he provisions
of this Code shall be applicable only to Muslims x x x.
However, there should be no distinction between Muslims and
non-Muslims as regards payment of benefits for Muslim
holidays. The Court of Appeals did not err in sustaining
Undersecretary Espaol who stated: Assuming arguendo that
the respondents position is correct, then by the same token,
Muslims throughout the Philippines are also not entitled to
holiday pays on Christian holidays declared by law as regular
holidays. We must remind the respondent-appellant that
wages and other emoluments granted by law to the working
man are determined on the basis of the criteria laid down by
laws and certainly not on the basis of the workers faith or
religion. At any rate, Article 3(3) of Presidential Decree No.
1083 also declares that x x x nothing herein shall be construed
to operate to the prejudice of a non-Muslim. In addition, the
1999 Handbook on Workers Statutory Benefits, approved by
then DOLE Secretary Bienvenido E. Laguesma on 14 December
1999 categorically stated: Considering that all private
corporations, offices, agencies, and entities or establishments
operating within the designated Muslim provinces and cities
are required to observe Muslim holidays, both Muslim and
Christians working within the Muslim areas may not report for
work on the days designated by law as Muslim holidays.
On the question regarding the jurisdiction of the Regional
Director Allan M. Macaraya, Article 128, Section B of the Labor
Code, as amended by Republic Act No. 7730, provides: Article
128. Visitorial and enforcement power. x x x (b)
Notwithstanding the provisions of Article 129 and 217 of this
Code to the contrary, and in cases where the relationship of
employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have
the power to issue compliance orders to give effect to the
labor standards provisions of this Code and other labor
legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the
course of the inspection. The Secretary or his duly authorized
representative shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases
where the employer contests the findings of the labor
employment and enforcement officer and raises issues
supported by documentary proofs which were not considered
in the course of inspection. x x x In the case before us,
Regional Director Macaraya acted as the duly authorized
representative of the Secretary of Labor and Employment and
it was within his power to issue the compliance order to SMC.
In addition, the Court agrees with the Solicitor General that the
petitioner did not deny that it was not paying Muslim holiday
pay to its non-Muslim employees. Indeed, petitioner merely
contends that its non-Muslim employees are not entitled to
Muslim holiday pay.
RULING:
WHEREFORE, in view of the foregoing, the petition is
DISMISSED. SO ORDERED.
79
VIVIAN Y. IMBUIDO vs. NATIONAL LABOR RELATIONS
COMMISSION, INTERNATIONAL INFORMATION
SERVICES, INC. and GABRIEL LIBRANDO
G.R. No. 114734, March 31, 2000
BUENA, J.
FACTS:
Imbuido was employed as a data encoder by International
Information Services, Inc., (ISSI) a domestic corporation
engaged in the business of data encoding and keypunching,
she entered into thirteen (13) separate employment contracts
with ISSI, each contract lasting only for a period of three (3)
months. Aside from the basic hourly rate, specific job contract
number and period of employment, each contract contains the
following terms and conditions:
a. This Contract is for a specific project/job contract only and
shall be effective for the period covered as above-mentioned
unless sooner terminated when the job contract is completed
earlier or withdrawn by client, or when employee is dismissed
for just and lawful causes provided by law. The happening of
any of these events will automatically terminate this contract
of employment.
b. Subject shall abide with the Companys rules and regulations
for its employees attached herein to form an integral part
hereof
c. The nature of your job may require you to render overtime
work with pay so as not to disrupt the Companys commitment
of scheduled delivery dates made on said job contract.
Imbuido and twelve (12) other employees of ISSI allegedly
agreed to the filing of a petition for certification election
involving the rank-and-file employees of ISSI. Thus, on
October 8, 1991, Lakas Manggagawa sa Pilipinas (LAKAS) filed
a petition for certification election with the Bureau of Labor
Relations (BLR), docketed as NCR-OD-M-9110-128.
Subsequently, Imbuido received a termination letter from ISSI
allegedly "due to low volume of work."
Thus, Imbuido filed a complaint for illegal dismissal with prayer
for service incentive leave pay and 13th month differential pay,
with the NLRC, National Capital Region, Arbitration Branch,
docketed as NLRC-NCR Case No. 05-02912-92.
Imbuido alleged that her employment was terminated not due
to the alleged low volume of work but because she "signed a
petition for certification election among the rank and file
employees of respondents," thus charging private respondent
with committing unfair labor practices.
She further complained of non-payment of service incentive
leave benefits and underpayment of 13th month pay. On the
other hand, ISSI maintained that it had valid reasons to
terminate Imbuido they stressed that its business "relies
heavily on companies availing of its services. And the
employment of Imbuido was for a "specific project with a
specified period of engagement."
Labor Arbiter ruled in favor of Imbuido, and accordingly
ordered her reinstatement without loss of seniority rights and
privileges, and the payment of backwages and service
incentive leave pay. Citing that Imbuido is a regular employee,
after finding that it is crystal clear that herein complainant
performed a job which are usually necessary or desirable in
the usual business of ISSI. Furthermore, the LA concluded that
petitioner was illegally dismissed because the alleged reason
for her termination, that is, low volume of work, is "not among
the just causes for termination recognized by law," hence, he
ordered her immediate reinstatement without loss of seniority
rights and with full backwages.
On appeal, the NLRC reversed the decision of the labor arbiter
in a decision. The NLRC held that the complainant while hired
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
as a regular worker, is statutorily guaranteed, in her tenurial
security, only up to the time the specific project for which she
was hired is completed." Hence, the NLRC concluded that
"[w]ith the specific project "at RCBC 014" admittedly
completed, Imbuido has therefore no valid basis in charging
illegal dismissal for her concomittant (sic) dislocation.
ISSUE:
Whether Imbuido was a regular employee, not a project
employee
RATIO DECIDENDI:
The Court agreed with the findings of the NLRC that petitioner
is a project employee. The principal test for determining
whether an employee is a project employee or a regular
employee is whether the project employee was assigned to
carry out a specific project or undertaking, the duration and
scope of which were specified at the time the employee was
engaged for that project. A project employee is one whose
employment has been fixed for a specific project or
undertaking, the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.
In the instant case, petitioner was engaged to perform
activities which were usually necessary or desirable in the
usual business or trade of the employer, as admittedly,
petitioner worked as a data encoder for private respondent,
and her employment was fixed for a specific project or
undertaking the completion or termination of which had been
determined at the time of her engagement, as may be
observed from the series of employment contracts between
petitioner and private respondent, all of which contained a
designation of the specific job contract and a specific period of
employment.
However, even as we concur with the NLRCs findings that
petitioner is a project employee, we have reached a different
conclusion. In the recent case of Maraguinot, Jr. vs. NLRC, we
held that "[a] project employee or a member of a work pool
may acquire the status of a regular employee when the
following concur: 1) There is a continuous rehiring of project
employees even after the cessation of a project; and 2) The
tasks performed by the alleged "project employee" are vital,
necessary and indispensable to the usual business or trade of
the employer. The evidence on record reveals that petitioner
was employed by private respondent as a data encoder,
performing activities which are usually necessary or desirable
in the usual business or trade of her employer, continuously
for a period of more than three (3) years, from August 26,
1988 to October 18, 1991[36] and contracted for a total of
thirteen (13) successive projects.
We have previously ruled that "[h]owever, the length of time
during which the employee was continuously re-hired is not
controlling, but merely serves as a badge of regular
employment." Based on the foregoing, we conclude that
petitioner has attained the status of a regular employee of
private respondent.
RULING:
WHEREFORE, the instant petition is GRANTED. The assailed
decision of the National Labor Relations Commission in NLRC
NCR CA No. 003845-92 dated September 27, 1993, as well as
its Order dated January 11, 1994, are hereby ANNULLED and
SET ASIDE for having been rendered with grave abuse of
discretion, and the decision of the Labor Arbiter in NLRC NCR
80
Case No. 05-02912-92 is REINSTATED with MODIFICATION as
above-stated, with regard to the computation of back wages
and service incentive leave pay. Sc SO ORDERED.
NICANOR M. BALTAZAR vs. SAN MIGUEL BREWERY,
INC.
G.R. No. L-23076, February 27, 1969
DIZON, J.
FACTS:
It appears that Baltazar was appointed salesman-in-charge of
San Miguel Brewery, Inc., Dagupan warehouse. Sixteen (16)
regular workers went on a strike. For the purpose of relieving
the tension prevailing at the place — because it was alleged
that the unfair treatment dispensed to the employees by
Baltazar was the cause of the strike — Baltazar was recalled to
the Manila office upon recommendation of its sales supervisor
and industrial relations officer, who found out, after a personal
investigation, that the employees' grievance was well founded.
The day following Baltazar's recall to Manila the strikers
returned to work voluntarily. When Baltazar reported at main
office in Manila, the latter's sales supervisor informed him that
he was not to return to Dagupan anymore. Thereafter, he
reported for work at the main office apparently without being
given any specific work or assignment. For a period of more
than one and one-half months, he absented himself from work
without prior authority from his superiors and without advising
them or anybody else of the reason for his prolonged absence.
For this reason, pursuant firstly, to existing rules and
regulations considering ten unexcused or unauthorized
absences within a calendar year as sufficient ground for an
outright dismissal from employment, and secondly, the
provisions of appellant's health, welfare and retirement plan
requiring that sick leave, to be considered authorized or
excusable, must be certified to by the company physician.
Baltazar received a letter informing him that he was dismissed
for a cause.
Baltazar commenced the present action. After trial upon the
issues arising from the parties' pleadings, the trial court ruled
that Baltazar's dismissal was justified, and, as a consequence,
dismissed his complaint. For insufficiency of evidence, the
court also dismissed appellant's counterclaim. But despite the
dismissal of Baltazar's complaint and the finding that his
dismissal from employment was for cause, the trial court
ordered appellant to pay him one month separation pay, plus
the cash value of six months accumulated sick leave.
ISSUE:
Whether the trial court erred in requiring the defendant
appellant to pay separation pay after having found and
declared as an established fact that the dismissal of Baltazar
was fully justified.
RATIO DECIDENDI:
The Court ruled that Baltazar is not entitled to one month
separation pay. In the Marcaida case this Court, speaking
through the now Chief Justice Roberto Concepcion, said the
following: Republic Act No. 1052 makes reference to
termination of employment, instead of dismissal, precisely to
exclude employees separated from the service for causes
attributable to their own fault. It would, patently, be absurd to
grant a right thereto to an employee guilty of the same breach
of obligation, when the employment is without a definite
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
period, as if he were entitled to greater protection than
employees engaged for a fixed duration.
RULING:
WHEREFORE, the appealed decision is hereby reversed,
without special pronouncement as to costs. It is so ordered.
LEIDEN FERNANDEZ, ET. AL., PETITIONERS, VS.
NATIONAL LABOR RELATIONS COMMISSION, FOURTH
DIVISION, MARGUERITTE LHUILLIER AND/OR
AGENCIA CEBUANA-H. LHUILLIER, RESPONDENTS.
GR No. 105892
January 28, 1998
Panganiban, J:
FACTS:
The herein petitioners are employees of private respondent
Agencia Cebuana-H. Lhuillier and/or Margueritte Lhuillier, filed
a complaint before Department of Labor for illegal dismissal
and payment of bank wages when the latter denied them their
demand to increase their salaries and subsequently terminated
their employment. The Labor Arbiter favored petitioners but
the public respondent NLRC vacated the Labor Arbiter‘s order.
The motion for reconsideration is denied thus this petition.
It is the Solicitor General‘s opinion that the Labor Arbiter‘s
decision be reinstated substantially, that the award of service
incentive leave be limited to three years. This is based on
Article 291 of the Labor Code which provides; that all money
claims arising from employer-employee relations accruing
during the effectivity of this code shall be filed within three
years from the time the cause of action accrued; otherwise
they shall be forever barred.
ISSUE:
Whether or not the claim for service incentive leaves may be
limited to a certain number of years.
RATIO DECIDENDI:
The Supreme Court held in negative. Sec. 2, Rule V, Book III
of the Implementing Rules and Regulations provides that every
employee who has rendered at least one year of service shall
be entitled to a yearly service incentive leave of five days with
pay.
To limit the award to three years is to unduly restrict such
right. The law does not prohibit its communication. Therefore,
in accordance with RA No. 6715, petitioners are entitled to
their full backwages, inclusive of allowances and other benefits
or their monetary equivalent, from the time their actual
compensation was withheld form them up to the time of their
actual reinstatement.
RULING:
Wherefore, the petition is hereby granted, and the assailed
decision and resolution are reversed and set aside. The Labor
Arbiter‘s decision is reinstated with modificcations.
81
AUTO BUS TRANSPORT SYSTEMS, INC., PETITIONER
VS ANTONIO BAUTISTA, RESPONDENT
GR No. 156367
May 16, 2005
Chico-Nazario, J:
FACTS:
Antonio Bautista was employed by Auto Bus Transport
Systems, Inc. he was assigned to Isabela-Manila route and he
was paid by commission. In January 2000, while he was
driving his bus, he bumped another bus owned by Auto Bus.
He claimed that the accident was due to fatigue for he did not
slept for more than 24 hours. Auto Bus terminated Bautista
after due hearing as part of management prerogative. Bautista
sued Auto Bus for illegal dismissal and among others claim for
his unpaid service incentive leave pay.
Auto Bus averred that Bautista is a commissioned employee
and a field personnel thus not entitled to service incentive
leave pay.
ISSUE:
Whether or not Antonio Bautista is entitled to service incentive
leave pay.
Whether Bautista is a field employee.
RATIO DECIDENDI:
Yes. Bautista is entitled to service incentive leave pay, the
Supreme Court emphasized that it does not mean that just
because an employee is paid on commission basis he is already
banned to received service incentive leave pay.
Bautista is not a field employee. He has a specific route to
traverse as a bus driver and that is a specific place that he
needs to be at work. There are inspectors haired by Auto Bus
stops who inspects the passengers the punched tickets and the
driver. Therefore, he is supervised though he is away from the
Auto Bus main office, contrary to Article 82 of Labor Code
which he defines field personnel.
Wherefore, premises considered, the instant petition is hereby
denied. The assailed decision of the Court of Appeals is hereby
affirmed. No costs.
So ordered.
MANSION PRINTING CENTER AND CLEMENT CHENG,
PETITIONERS, VS. DIOSDADO BITARA JR.,
RESPONDENT
GR No. 168120 January 25, 2012
Carpio, J:
FACTS:
Mansion Printing Center is a single proprietorship engaged in
the printing of quality self-adhesive labels, brochures, posters
and stickers.
Mansion engaged the services of Bitara as a helper.
Respondent later was promoted as the company‘s sole driver
tasked, among others, to deliver the products to the clients
within the delivery schedules.
Petitioners avert that the timely delivery of the products to the
clients is one of the foremost considerations material to the
operation of the business. It being so, they closely monitored
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the attendance of respondent. They noted his habitual
tardiness and absenteeism.
Petitioners issued a Memorandum requiring respondent to
submit a written explanation why no administrative sanction
should be imposed on him for his habitual tardiness. However,
despite respondents undertaking to report on time, he
continued to disregard attendance policies, and was eventually
dismissed. Respondent filed a complaint for illegal dismissal.
ISSUE:
Whether or not Bitara is illegally dismissed.
RATIO DECIDENDI:
No. there is no illegal dismissal. Article 282 of the Labor Code
provides that an employer may terminate an employment for
any of the following reasons:
b) Gross and habitual neglect by the employee of his duties…
Clearly, even in the absence of a written company rule defining
gross and habitual neglect of duties, respondent‘s omission
qualify as such warranting his dismissal from the service. The
court cannot simply tolerate injustice to employees if only to
protect the welfare of undeserving employees. It is within the
management prerogative to terminate his employment. Even
as the law is solicitous of the welfare of the employees, it must
also protect the rights of an employer to exercise what are
clearly management prerogatives.
Accordingly the court affirmed the ruling of the National Labor
Relations Commission that the dismissal is valid however the
respondent shall be entitled to the money equivalent of five
day service incentive leave.
RULING:
Wherefore the resolution dated June 29, 2001 and the order
dated February 21, 2002 of the National Labor Relations
Commission are hereby reinstated with modification that
petitioners are ordered to pay respondent the money
equivalent of the five day service incentive leave.
MAYON HOTEL & RESTAURANT, et. al., petitioners, vs.
ROLANDO ADANA, et. al., respondents
GR No. 157634 May 16, 2005
PUNO, J.:
FACTS:
Petitioner Mayon Hotel & Restaurant is a single proprietor
business registered in the name of petitioner Pacita O. Po,
whose mother, petitioner Josefa Po Lam, manages the
establishment. The hotel and restaurant employed about
sixteen (16) employees.
Due to the expiration and non-renewal of the lease contract for
the rented space occupied by the said hotel and restaurant at
Rizal Street, the hotel operations of the business were
suspended on March 31, 1997. The operation of the restaurant
was continued in its new location at Elizondo Street, Legazpi
City, while waiting for the construction of a new Mayon Hotel &
Restaurant at Peñaranda Street, Legazpi City. Only nine (9) of
the sixteen (16) employees continued working in the Mayon
Restaurant at its new site. The 16 employees filed complaints
for underpayment of wages and other money claims against
petitioners.
Executive Labor Arbiter Gelacio L. Rivera, Jr. rendered a Joint
Decision in favor of the employees. The Labor Arbiter awarded
substantially all of respondents‘ money claims, and held that
respondents Loveres, Macandog and Llarena were entitled to
separation pay, while respondents Guades, Nicerio and
82
Alamares were entitled to their retirement pay. The Labor
Arbiter also held that based on the evidence presented, Josefa
Po Lam is the owner/proprietor of Mayon Hotel & Restaurant
and the proper respondent in these cases.
On appeal to the NLRC, the decision of the Labor Arbiter was
reversed, and all the complaints were dismissed.
Respondents filed a motion for reconsideration with the NLRC
and when this was denied, they filed a petition for certiorari
with the CA. CA reversed the NLRC decision and the employers
filed MR which was denied, hence the case before the SC.
ISSUE:
Whether or not tin the absence of illegal dismissal case, where
an employee may not be entitled to a separation pay, may still
be entitled to the Labor Standards benefits.
RATIO DECIDENDI:
Illegal Dismissal: claim for separation pay
First, petitioners admit that since April 1997, when hotel
operations were suspended due to the termination of the lease
of the old premises, respondents Loveres, Macandog, Llarena,
Nicerio and Guades have not been permitted to work. Second,
even after six months of what should have been just a
temporary lay-off, the same respondents were still not recalled
to work. As a matter of fact, the Labor Arbiter even found that
as of the time when he rendered his Joint Decision on July
2000 — or more than three (3) years after the supposed
―temporary lay-off,‖ the employment of all of the respondents
with petitioners had ceased, notwithstanding that the new
premises had been completed and the same operated as a
hotel with bar and restaurant. This is clearly dismissal — or the
permanent severance or complete separation of the worker
from the service on the initiative of the employer regardless of
the reasons therefor. But they made no mention of any intent
to recall these respondents to work upon completion of the
new premises. And even assuming that the closure was due to
a reason beyond the control of the employer, it still has to
accord its employees some relief in the form of severance pay.
While we recognize the right of the employer to terminate the
services of an employee for a just or authorized cause, the
dismissal of employees must be made within the parameters of
law and pursuant to the tenets of fair play.66 And in
termination disputes, the burden of proof is always on the
employer to prove that the dismissal was for a just or
authorized cause.67 Where there is no showing of a clear,
valid and legal cause for termination of employment, the law
considers the case a matter of illegal dismissal.
RULING:
IN VIEW WHEREOF, the petition is hereby DENIED. The
Decision of January 17, 2003 of the Court of Appeals in CA-
G.R. SP No. 68642 upholding the Joint Decision of July 14,
2000 of the Labor Arbiter in RAB V Case Nos. 04-00079-97 and
04-00080-97 is AFFIRMED, with the following
MODIFICATIONS:
(1) Granting separation pay of one-half (1/2) month
for every year of service to respondents Loveres,
Macandog and Llarena;
(2) Granting retirement pay for respondents Guades,
Nicerio, and Alamares;
(3) Removing the deductions for food facility from the
amounts due to all respondents;
(4) Awarding moral damages of P20,000.00 each for
respondents Loveres, Macandog, Llarena, Guades,
Nicerio, Atractivo, and Broola;
(5) Deleting the award of exemplary damages
of P10,000.00 from all respondents except
Loveres, Macandog, Llarena, Guades, Nicerio,
Atractivo, and Broola; and
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
(6) Granting attorney‘s fees of P10,000.00 each to all
respondents.
The case is REMANDED to the Labor Arbiter for the
RECOMPUTATION of the total monetary benefits awarded and
due to the employees concerned in accordance with the
decision. The Labor Arbiter is ORDERED to submit his
compliance thereon within thirty (30) days from notice of this
decision, with copies furnished to the parties.
SO ORDERED.
ROSARIO A. GAA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, EUROPHIL
INDUSTRIES CORPORATION, and CESAR R. ROXAS,
Deputy Sheriff of Manila, respondents.
G.R. No. L-44169 December 3, 1985
Patajo, J.:
FACTS:
Europhil Industries Corporation was formerly one of the
tenants in Trinity Building while Gaa was then the building
administrator. December 12, 1973 - Europhil Industries
commenced an action in the CFI of Manila for damages against
Gaa for trespassing upon its rights, namely, cutting of
its electricity, and removing its name from the building
directory and gate passes of its officials and employees. June
28, 1974 – CFI ruled in favor of Europhil ordering Gaa to pay
the former actual damages, moral damages, exemplary
damages and to pay the costs. August 1, 1975 - A writ of
garnishment was issued pursuant to which Deputy Sheriff
Roxas served a Notice of Garnishment upon El Grande Hotel,
where Gaa was then employed, garnishing her "salary,
commission and/or remuneration." Gaa then filed with the CFI
of Manila a motion to lift said garnishment on the ground that
her salaries, commission and, or remuneration are
exempted from execution under Article 1708 of the New Civil
Code. CFI: denied Gaa‘s motion and her subsequent MR. CA:
dismissed Gaa‘s petition on the ground that Gaa is not a mere
laborer as contemplated under Article 1708 as the term laborer
does not apply to one who holds a managerial or supervisory
position like that of petitioner, but only to those "laborers
occupying the lower strata." It also held that the term "wages"
means the pay given" as hire or reward to artisans, mechanics,
domestics or menial servants, and laborers employed
in manufactories, agriculture, mines, and other manual
occupation and usually employed to distinguish the sums paid
to persons hired to perform manual labor, skilled or unskilled,
paid at stated times, and measured by the day, week, month,
or season.
ISSUE:
Whether or not Gaa may be considered a laborer as contemplated under
Article 1708 of the Civil Code.
RATION DECIDENDI:
NO. Gaa is not an ordinary or rank and file laborer but a
responsibly placed employee of El Grande Hotel. Considering
the importance of Gaa's function in El Grande Hotel, it is
undeniable that Gaa is occupying a position equivalent to that
of a managerial or supervisory position. The word "laborer"
includes everyone who performs any kind of mental or physical
labor, but as commonly and customarily used and understood,
it only applies to one engaged in some form of manual or
physical labor. In Kline vs. Russell it was held that a laborer,
within the statute exempting from garnishment the wages of a
"laborer," is one whose work depends on mere physical power
83
to perform ordinary manual labor, and not one engaged
in services consisting mainly of work requiring mental skill or
business capacity, and involving the exercise of intellectual
faculties. Article 1708 used the word "wages" and not "salary"
in relation to "laborer" when it declared what are to be
exempted from attachment and execution. The term "wages"
as distinguished from "salary", applies to the compensation for
manual labor, skilled or unskilled, paid at stated times,
and measured by the day, week, month, or season, while
"salary" denotes a higher degree of employment, or a superior
grade of services, and implies a position of office: by contrast,
the term wages " indicates considerable pay for a lower and
less responsible character of employment, while "salary" is
suggestive of a larger and more important service. Bell vs.
Indian Livestock Co it was held that salary is understood to
relate to position of office, to be the compensation given
for official or other service, as distinguished from 'wages', the
compensation for labor." Persons belonging to this class
usually look to the reward of a day's labor for immediate or
present support, and such persons are more in need of the
exemption than any others.
RULING:
IN VIEW OF THE FOREGOING, We find the present petition to
be without merit and hereby AFFIRM the decision of the Court
of Appeals, with costs against petitioner.
SO ORDERED.
SLL INTERNATIONAL CABLES SPECIALIST and SONNY
L. LAGON, Petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION, 4th
DIVISION, ROLDAN LOPEZ, EDGARDO ZUÑIGA and
DANILO CAÑETE, Respondents.
G.R. No. 172161 March 2, 2011
Mendoza, J.:
FACTS:
Respondents were supposedly employed by petitioner as
project employees in 11996, 1997, 1998, and 1999. They were
paid less than the minimum wage for the four periods of their
employment. During their 4th employment, Lagon, the
employer, due to economic constraints, had to cut down on
the overtime work of the employees. Thus, when respondent-
employees asked for overtime work, Lagon had to refuse
them, and told them that if they insist, they would have to go
home at their own expense and that they would not be given
any more time nor be allowed to stay in their quarters. The
case was brought before the Labor Arbiter, on a complaint for
illegal dismissal, non-payment of wages, non-payment of 13th
month pay, among other things, against the employer. The
employer reasoned that the employees were project
employees, since they were employed for a specific
undertaking, and thus were not regular employees entitled to
minimum wage. Further, the employer reasoned that the
employees were actually paid above the minimum wage, since
the allowances for snacks, lodging house, electricity, water,
and transportation should be included in the wages.
The LA opined that private respondents were regular
employees because they were repeatedly hired by petitioners
and they performed activities which were usual, necessary and
desirable in the business or trade of the employer. With regard
to the underpayment of wages, the LA found that private
respondents were underpaid. It ruled that the free board and
lodging, electricity, water, and food enjoyed by them could not
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
be included in the computation of their wages because these
were given without their written consent. The LA, however,
found that petitioners were not liable for illegal dismissal.The
LA viewed private respondent's act of going home as an act of
indifference when petitioners decided to prohibit overtime
work. The NLRC and CA affirmed and ruled against the
employer.
ISSUE:
Whether or not the employees entitled to minimum wage?
Whether or not the free board and lodging, electricity, water,
and food enjoyed by the employees be included in the
computation of the wages
RATION DECIDENDI:
Preliminarily, the Court noted that the case involves factual
disputes decided by the trial courts, whose decisions the Court
cannot disturb. Settled is the fact that decisions by labor
arbiters, due to their expertise, cannot be disturbed and are
accorded respect and finality when supported by substantial
evidence. Thus it cannot decide on the issue of whether the
employees are project or regular employees, and must affirm
the ruling that they are regular employees. In any case,
project employees are entitled to the minimum wage, since
they are not among the exclusions enumerated in the Labor
Code Implementing Rules.
On the issue of whether the facilities should be included as
wages, a four-pronged test must be completed: proof must be
shown that such facilities are customarily furnished by the
trade; second, the provision of deductible facilities must be
voluntarily accepted in writing by the employee; and finally,
facilities must be charged at reasonable value. Mere availment
is not sufficient to allow deductions from employees‘ wages.
These requirements, however, have not been met in this case.
SLL failed to present any company policy or guideline showing
that provisions for meals and lodging were part of the
employees‘ salaries. It also failed to provide proof of the
employees written authorization, much less show how they
arrived at their valuations. At any rate, it is not even clear
whether private respondents actually enjoyed said facilities.
RULING:
WHEREFORE, the petition is DENIED. The temporary
restraining order issued by the Court on November 29, 2006 is
deemed, as it is hereby ordered, DISSOLVED.
SO ORDERED.
NORMA MABEZA, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, PETER NG/HOTEL
SUPREME, respondents.
G.R. No. 118506 April 18, 1997
KAPUNAN, J.:
Facts:
Petitioner Mabeza contends that she and her co-employees at
the Hotel Supreme were asked by the hotel's management to
sign an instrument attesting to the latter's compliance with
minimum wage and other labor standard provisions of law.
Petitioner signed the affidavit but refused to go to the City
Prosecutor's Office to swear to the veracity and contents of the
affidavit as instructed by management. According to her,
respondent strongly chided her for refusing to attest to the
84
affidavit. She thereafter reluctantly filed a leave of absence
from her job which was denied by management. When she
attempted to return to work, she was informed not report to
work and, instead, continue with her unofficial leave of
absence. Consequently, filed a complaint for illegal dismissal.
In his defense, respondent Peter Ng alleged that petitioner
surreptitiously left (her job) without notice to the
management" and that she actually abandoned her work.
Eleven (11) months after the original complaint for illegal
dismissal was filed, private respondent raised a new ground,
loss of confidence, which was supported by a criminal
complaint for Qualified Theft.
Issue:
Whether or not the dismissal by the private respondent of
petitioner constitutes an unfair labor practice.
Ratio Decidendi:
It is settled that in termination cases the employer bears the
burden of proof to show that the dismissal is for just cause,
the failure of which would mean that the dismissal is not
justified and the employee is entitled to reinstatement. It is
crystal clear that the circumstances upon which private
respondent anchored his claim that petitioner "abandoned" her
job were not enough to constitute just cause to sanction the
termination of her services under Article 283 of the Labor
Code. For abandonment to arise, there must be concurrence of
two things: 1) lack of intention to work; and 2) the presence of
overt acts signifying the employee's intention not to work.
Loss of confidence as a just cause for dismissal was never
intended to provide employers with a blank check for
terminating their employees. Such a vague, all-encompassing
pretext as loss of confidence, if unqualifiedly given the seal of
approval by this Court, could readily reduce to barren form the
words of the constitutional guarantee of security of tenure.
Having this in mind, loss of confidence should ideally apply
only to cases involving employees occupying positions of trust
and confidence or to those situations where the employee is
routinely charged with the care and custody of the employer's
money or property.
Without doubt, the act of compelling employees to sign an
instrument indicating that the employer observed labor
standards provisions of law when he might have not, together
with the act of terminating or coercing those who refuse to
cooperate with the employer's scheme constitutes unfair labor
practice.
Ruling:
WHEREFORE, premises considered, the RESOLUTION of the
National Labor Relations Commission dated April 24, 1994 is
REVERSED and SET ASIDE, with costs.
ATOK-BIG WEDGE MUTUAL BENEFIT ASSOCIATION,
petitioner, vs. A TOK-BIG WEDGE MINING COMPANY,
INCORPORATED, respondents. Pablo C. Sanidad for
petitioner. Roxas and Sarmiento for respondents.
G.R. No. L-7349 July 19, 1955
REYES, J. B. L., J.:
Facts:
The petitioner labor union submitted to the respondents
several demands, among which was an increase in daily wage.
The matter was referred to the CIR for arbitration and
settlement. In 1951, the Court rendered a decision fixing the
minimum wage which the mining company appealed from
(G.R. No. L-5276). Subsequently, the respondent filed an
urgent petition for authority to stop operations and lay off
employees and laborers as the continued operation of the
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
company would lead to its immediate bankruptcy and collapse.
To avert the closure, the parties were convened for voluntary
conciliation which, after lengthy discussion, arrived at an
agreement (October 1952) fixing minimum wage and provision
of facilities to be charged in full or partially by the respondent,
against laborer or employee, as it may see fit pursuant to the
exigencies of its operation.
Later, Case No. G.R. No. L-5276 was decided by this Court
affirming the decision of the CIR fixing the minimum cash
wage of the laborers and employees at P3.20 cash, without
rice ration, or P2.65, with rice ration. In June 1953, the labor
union filed a petition for the enforcement of the terms of the
agreement of October 29, 1952, as allegedly modified by the
decision of this Court in G.R. No. L-5276 and the provisions of
the Minimum Wage Law, which has since taken effect, praying
for the payment of the minimum cash wage of P3.45 a day
with rice ration, or P4.00 without rice ration, and the payment
of differential pay from August 4, 1952, when the award
became effective. Petitioner argues that to allow the
deductions stipulated in the Agreement of October 1952 from
the minimum daily wage would be a waiver of the minimum
wage fixed by the law and hence null and void, since RA 602,
section 20, provides that "no agreement or contract, oral or
written, to accept a lower wage or less than any other under
this Act, shall be valid". Petitioner also argues that to allow the
deductions of the facilities would be contrary to the mandate
of RA 602 prohibiting reduction in supplements furnished on
the date of enactment.
Issue:
Whether or not deductions stipulated in agreement from the
minimum wage is void.
Ratio Decidendi:
An agreement to deduct certain facilities received by the
laborers from their employer is not a waiver of the minimum
wage fixed by the law. Wage, as defined by Sec. 2 of RA 602,
"includes the fair and reasonable value as determined by the
Secretary of Labor, of board, lodging, or other facilities
customarily furnished by the employer to the employee."
The meaning of the term "supplements" has been fixed by the
Code of Rules and Regulations promulgated by the Wage
Administration Office to implement the Minimum Wage Law as:
extra renumeration or benefits received by wage earners from
their employees and include but are not restricted to pay for
vacation and holidays not worked; paid sick leave or maternity
leave; overtime rate in excess of what is required by law; sick,
pension, retirement, and death benefits; profit-sharing; family
allowances; Christmas, war risk and cost-of-living bonuses; or
other bonuses other than those paid as a reward for extra
output or time spent on the job. "Supplements", therefore,
constitute extra renumeration or special privileges or benefits
given to or received by the laborers over and above their
ordinary earnings or wages. Facilities, on the other hand, are
items of expense necessary for the laborer's and his family's
existence and subsistence, so that by express provision of the
law (sec. 2 [g]) they form part of the wage and when
furnished by the employer are deductible therefrom since if
they are not so furnished, the laborer would spend and pay for
them just the same. It is thus clear that the facilities
mentioned in the agreement of October 29, 1952 do not come
within the term "supplements" as used in Art. 19 of the
Minimum Wage Law.
Ruling:
Finding no reason to sustain the present petition for review,
the same is, therefore, dismissed, with costs against the
petitioner Atok-Big Wedge Mutual Benefit Association
85
STATES MARINE CORPORATION and ROYAL LINE, INC.,
petitioners, vs. CEBU SEAMEN'S ASSOCIATION, INC.,
respondent. Pedro B. Uy Calderon for petitioners.
Gaudioso C. Villagonzalo for
respondent.
G.R. No. L-12444 February 28, 1963
PAREDES, J.:
Facts:
In a complaint filed by the herein respondent, the Union
alleged that the officers and men working on board the
petitioners' vessels have not been paid their sick leave,
vacation leave and overtime pay and that after the Minimum
Wage Law had taken effect, the petitioners required their
employees on board their vessels, to pay the sum of P.40 for
every meal, while the masters and officers were not required
to pay their meals.
In their defense, that petitioners argued that the company
have suffered financial losses in the operation of their vessels
and that there is no law which provides for the payment of sick
leave or vacation leave to employees or workers of private
firms and that in enacting Rep. Act No. 602 (Minimum Wage
Law), the Congress had in mind that the amount of P.40 per
meal, furnished the employees should be deducted from the
daily wages. The CIR rendered a decision in favor of the
respondent union. Hence, the instant petition.
Issue:
Whether or not the ―meals‖ are deductible from the salaries in
view of the passage of the Minimum Wage Law.
Ratio Decidendi:
We hold that such deductions are not authorized. Section 3,
par. f, of the Minimum Wage Law, (R.A. No. 602), provides as
follows — (f) Until and unless investigations by the Secretary
of Labor on his initiative or on petition of any interested party
result in a different determination of the fair and reasonable
value, the furnishing of meals shall be valued at not more than
thirty centavos per meal for agricultural employees and not
more than forty centavos for any other employees covered by
this Act…‖
It would appear that there exists a contradiction between the
provisions of section 3(f) and section 19 of Rep. Act No. 602;
but from a careful examination of the same, it is evident that
Section 3(f) constitutes the general rule, while section 19 is the
exception. It is argued that the food or meals given to the
deck officers, marine engineers and unlicensed crew members
in question, were mere "facilities" which should be deducted
from wages, and not "supplements" which, according to said
section 19, should not be deducted from such wages, because
it is provided therein: "Nothing in this Act shall deprive an
employee of the right to such fair wage..or in reducing
supplements furnished on the date of enactment."
The benefit or privilege given to the employee which
constitutes an extra remuneration above and over his basic or
ordinary earning or wage, is supplement; and when said
benefit or privilege is part of the laborers' basic wages, it is a
facility. The criterion is not so much with the kind of the
benefit or item (food, lodging, bonus or sick leave) given, but
its purpose. Considering, therefore, as definitely found by the
respondent court that the meals were freely given to crew
members prior to August 4, 1951, while they were on the high
seas "not as part of their wages but as a necessary matter in
the maintenance of the health and efficiency of the crew
personnel during the voyage", the deductions therein made for
the meals given after, should be returned to them, and the
operator of the coastwise vessels affected should continue
giving the same benefit.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
RULING:
In view hereof, the petition is dismissed, with costs against the
petitioners.
CEBU INSTITUTE OF TECHNOLOGY (CIT), petitioner, vs.
HON. BLAS OPLE, in his capacity as Minister, Ministry of
Labor and Employment, et.al
G.R. No. L-58870 December 18, 1987
CORTES, J.:
Facts:
The present controversy was precipitated by the claims of
some school personnel for allowances and other benefits and
the refusal of the private schools concerned to pay said
allowances and benefits on the ground that said items should
be deemed included in the salary increases they had paid out
of the 60% portion of the proceeds from tuition fee increases
provided for in section 3 (a) of Pres. Decree No. 451. In the
instant case, petitioner filed a Complaint against petitioner CIT
for non-payment of: a) cost of living allowances (COLA), b)
thirteenth (13th) month pay differentials and c) service
incentive leave. The position taken by CIT during the
conference held by the labor management committee was that
it had paid the allowances mandated by various decrees but
the same had been integrated in the teacher's hourly rate. The
Minister of Labor and Employment ruled that the basic hourly
rate designated in the Teachers' Program is regarded as the
basic hourly rate of teachers exclusive of the COLA, and that
COLA should not be taken from the 60% incremental proceeds
of the approved increase in tuition fee. Hence, this instant
petition.
Issue:
Whether or not allowances and other fringe benefits of faculty
members and other school employees may be charged against
the 60% portion of the tuition fee increases provided for in
section 3(a) of Pres. Dec. No. 451.
Ratio Decidendi:
Section 3(a) of Pres. Dec. No. 451 imposes among the
conditions for the approval of tuition fee increases, the
allocation of 60% per cent of the incremental proceeds thereof
for increases in salaries or wages of school personnel and not
for any other item such as allowances or other fringe benefits.
As aptly put by the Court in University of Pangasinan Faculty
Union v. University of Pangasinan, supra: ―The sixty (60%)
percent incremental proceeds from the tuition increase are to
be devoted entirely to wage or salary increases which means
increases in basic salary. The law cannot be construed to
include allowances which are benefits over and above the basic
salaries of the employees. To charge such benefits to the 60%
incremental proceeds would be to reduce the increase in basic
salary provided by law, an increase intended also to help the
teachers and other workers tide themselves and their families
over these difficult economic times.‖
In the light of existing laws which exclude allowances from the
basic salary or wage in the computation of the amount of
retirement and other benefits payable to an employee, this
Court will not adopt a different meaning of the terms "salaries
or wages" to mean the opposite, i.e. to include allowances in
the concept of salaries or wages.
86
RULING:
WHEREFORE, the Court rules: In G.R. No. 58870, the Order of
respondent Minister of Labor and Employment is SUSTAINED
insofar as it ordered petitioner Cebu Institute of Technology to
pay its teaching staff. (1) Cost of living allowance under Pres.
Dec.Nos.525 and 1123; (2) Cost of living allowance under
Pres. Dec. Nos. 1614, 1634, 1678 and 1713; and (3) Service
incentive leave due them.
TRADERS ROYAL BANK, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION & TRADERS ROYAL BANK
EMPLOYEES UNION, respondents.
G.R. No. 88168 August 30, 1990
GRIÑO-AQUINO, J.:
Facts:
In 1986, the Union filed a letter-complaint against TRB with
the Bureau of Labor Relations which was later on Certified by
the Secretary of Labor for resolution, claiming diminution of
benefits enjoyed by the employees since time immemorial, e.g.
mid-year and yearend bonus. Petitioner, on the other hand,
insisted that it had paid the employees holiday pay. The
practice of giving them bonuses at year's end, would depend
on how profitable the operation of the bank had been.
Generally, the bonus given was two (2) months basic mid-year
and two (2) months gross end-year.
The NLRC rendered a decision ordering respondent bank to
pay petitioner members-employees holiday differential, and
mid-year bonus differential for 1986. A motion for
reconsideration was filed by TRB but it was denied. Hence, this
petition for certiorari.
Issue:
Whether or not decrease in the midyear and yearend bonuses
constitutes a diminution of benefits due to employees.
Ratio Decidendi:
Private respondent's contention, that the decrease in the
midyear and year-end bonuses constituted a diminution of the
employees' salaries, is not correct, for bonuses are not part of
labor standards in the same class as salaries, cost of living
allowances, holiday pay, and leave benefits, which are
provided by the Labor Code.
A bonus is "a gratuity or act of liberality of the giver which the
recipient has no right to demand as a matter of right". "It is
something given in addition to what is ordinarily received by or
strictly due the recipient." The granting of a bonus is basically
a management prerogative which cannot be forced upon the
employer "who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside from the
employee's basic salaries or wages.‖
It is clear that the petitioner may not be obliged to pay
bonuses to its employees. The matter of giving them bonuses
over and above their lawful salaries and allowances is entirely
dependent on the profits, if any, realized by the Bank from its
operations during the past year.
In the light of these submissions of the petitioner, the
contention of the Union that the granting of bonuses to the
employees had ripened into a company practice that may not
be adjusted to the prevailing financial condition of the Bank
has no legal and moral bases. Its fiscal condition having
declined, the Bank may not be forced to distribute bonuses
which it can no longer afford to pay and, in effect, be
penalized for its past generosity to its employees.
RULING:
WHEREFORE, the petition for certiorari is granted. The
decision of the National Labor Relations Commission is
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
modified by deleting the award of bonus differentials to the
employees for 1986. In other respects, the decision is
affirmed. Costs against the respondent union
KAMAYA POINT HOTEL, petitioner, vs.NATIONAL
LABOR RELA TIONS COMMISSION, FEDERA TION OF
FREE WORKERS and MEMIA QUIAMBAO, respondent.
G.R. No. 75289 August 31, 1989
FERNAN, C.J.:
Facts:
Respondent Memia Quiambao with thirty others who are
members of private respondent Federation of Free
Workers (FFW) were employed by petitioner as hotel
crew . On the basis of the profitability of the company's
business operations, management granted a 14th month
pay to its employees starting in 1979. In January 1982,
operations ceased to give way to the hotel's conversion
into a training center for Libyan scholars. However, due
totechnical and financing problems, the Libyans pre-terminated
the program which the company suffered losses. In a couple of
months it effected a retrenchment program until finally on
January 7, 1984, it totally closed its business.
In 1983, private respondent filed withthe Ministry of
Labor and Employmenta complaint against petitioner for
illegal suspension, violation of the CBA and non-payment
of the 14thmonth pay for the year 1982 . After the hearing,
Labor Arbiter ordered the payment of 14th month and other
monetary equivalent of benefits mentioned in the CBA. On
appeal, the National Labor Relations Commission (NLRC)
set aside the award of monetary benefits under the CBA but
affirmed the grant of the 14th month. This 14th month payis
now an existing benefit which cannot be withdrawn without
violating article 100 of the Labor Code. To allow its withdrawal
now would certainly amount to a diminution of existing
benefits which complainants are presently enjoying. Hence,
this instant petition.
Issue:
Whether or not the private respondents are entitled to a 14th
month pay?
Ratio Decidendi:
We find it difficult to comprehend why the NLRC and the
Labor Arbiter, despite their admission that the 14th
month pay has no contractual or legal basis, still chose
to rule in favor of private respondents. It is patently
obvious thatArticle 100 is clearly without applicability. The date
of effectivity of the Labor Code is May 1, 1974. In the case at
bar, petitioner extended its 14th month pay beginning 1979
until 1981. What is demanded is payment of the 14th month
pay for 1982. Indubitably from these facts alone, Article 100 of
the Labor Code cannot apply.Also contractually, as gleaned
from the collective bargaining agreement between
management and the union, there is no stipulation as to
such extra remuneration. Evidently, this omission is an
acknowledgment that such benefit is entirely contilagent or
dependent on the profitability of the company's operations
Verily , a 14th month pay is a misnomer because it is
basically a bonus and, therefore, gratuitous in nature.
The granting of the 14th month pay is a management
prerogative which cannot be forced upon the employer.
It is something given in addition to what is ordinarily
received by or strictly due the recipient. It is a gratuity to
which the recipient has no right to make a demand.
Ruling:
WHEREFORE, the petition is hereby GRANTED. The portion of
the decision of the National Labor Relations Commission dated
87
June 25, 1986 ordering the payment of 14th month pay to
private respondents is set aside.
EMPLOYERS CONFEDERATION OF THE PHILIPPINES,
petitioner, vs. NATIONAL WAGES AND PRODUCTIVITY
COMMISSION AND REGIONAL TRIPARTITE WAGES
AND PRODUCTIVITY BOARD-NCR, TRADE UNION
CONGRESS OF THE PHILIPPINES, respondents.
G.R. No. 96169 September 24, 1991
SARMIENTO, J.:
Facts:
On October 15, 1990, the Regional Board of the National
Capital Region issued Wage Order No. NCR-01, increasing the
minimum wage by P17.00 daily in the National Capital Region.
The Trade Union Congress of the Philippines (TUCP) moved for
reconsideration; so did the Personnel Management Association
of the Philippines (PMAP). ECOP opposed.
On October 23, 1990, the Board issued Wage Order No.
NCR01-A, amending Wage Order No. NCR-01. It provides that
all workers and employees in the private sector in the National
Capital Region already receiving wages above the statutory
minimum wage rates up to one hundred and twenty-five pesos
(P125.00) per day shall also receive an increase of seventeen
pesos (P17.00) per day.
ECOP appealed to the National Wages and Productivity
Commission contending that the board's grant of an "across-
the-board" wage increase to workers already being paid more
than existing minimum wage rates (up to P125.00 a day) as an
alleged excess of authority. ECOP further alleges that under
the Republic Act No. 6727, the boards may only prescribe
"minimum wages," not determine "salary ceilings." ECOP
likewise claims that Republic Act No. 6727 is meant to promote
collective bargaining as the primary mode of settling wages,
and in its opinion, the boards cannot preempt collective
bargaining agreements by establishing ceilings.
On November 6, 1990, the Commission promulgated an Order,
dismissing the appeal for lack of merit. On November 14,
1990, the Commission denied reconsideration. ECOP then,
elevated the case via petition for review on certiorari to the
Supreme Court.
Issue:
Whether Wage Order No. NCR-01-A providing for new wage
rates, as well as authorizing various Regional Tripartite Wages
and Productivity Boards to prescribe minimum wage rates for
all workers in the various regions, and for a National Wages
and Productivity Commission to review, among other functions,
wage levels determined by the boards is valid.
Ratio Decidendi:
The Supreme Court ruled in favor of the National Wages and
Productivity Commission and Regional Tripartite Wages and
Productivity Board-NCR, Trade Union Congress of the
Philippines and denied the petition of ECOP.
The Supreme Court held that Republic Act No. 6727 was
intended to rationalize wages, first, by providing for full-time
boards to police wages round-the-clock, and second, by giving
the boards enough powers to achieve this objective. The Court
is of the opinion that Congress meant the boards to be creative
in resolving the annual question of wages without labor and
management knocking on the legislature's door at every turn.
The Court's opinion is that if Republic No. 6727 intended the
boards alone to set floor wages, the Act would have no need
for a board but an accountant to keep track of the latest
consumer price index, or better, would have Congress done it
as the need arises, as the legislature, prior to the Act, has
done so for years. The fact of the matter is that the Act sought
a "thinking" group of men and women bound by statutory
standards. The Court is not convinced that the Regional Board
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
of the National Capital Region, in decreeing an across-the-
board hike, performed an unlawful act of legislation. It is true
that wage-firing, like rate-fixing, constitutes an act Congress; it
is also true, however, that Congress may delegate the power
to fix rates provided that, as in all delegations cases, Congress
leaves sufficient standards. As this Court has indicated, it is
impressed that the above-quoted standards are sufficient, and
in the light of the floor-wage method's failure, the Court
believes that the Commission correctly upheld the Regional
Board of the National Capital Region.
Ruling:
WHEREFORE, premises considered, the petition is DENIED. No
pronouncement as to costs.
KAR ASIA, INC. and/or CELESTINO S. BARETTO,
petitioners, vs. MARIO CORONA, RICKY HEPGANO,
JOHNNY COLLADOS, CONSTANTINO LAGARAS, RANEL
BALANSAG, ARNOLD AVILA, PETER ARCENAL, ARNOLD
CABAHUG, BERNARD BETE, RUPERTO RESTAURO,
WILLY CRUZ, RANDY BASNILLO, ARMAN BASTE,
ERNESTO ESPINA, PATRICIO AGUDELA, IRENEO
BANGOY, PALERMO AUTENTICO, GEORGE TAGAYTAY,
BENITO MATUGAS, and WILFREDO ESPINA,
respondents.
G.R. No. 154985. August 24, 2004
YNARES-SANTIAGO, J.:
Facts:
Respondents, regular employees of petitioner KAR ASIA, Inc.,
an automotive dealer in Davao City, filed a complaint for
underpayment of wages and attorney‘s fees before Branch XI,
Regional Arbitration Branch of Davao City. They claimed that
they were not paid their cost of living allowance (COLA), as
mandated by the Regional Tripartite and Wages Productivity
Board (RTWPB) XI Wage Order No. 3, for the months of
December 1993 and December 1994, and prayed that
petitioner be ordered to pay the same with 1% interest per
month, as well as attorney‘s fees equivalent to 10% of the
total monetary award.
Petitioner Company and its president presented in evidence
the payrolls for December 1993 and December 1994 showing
that the respondents acknowledged in writing the receipt of
their COLA, and the affidavits of Ermina Daray and Cristina
Arana, cashiers of KAR ASIA, refuting respondents claim that
they were made to sign blank pieces of paper.
The Labor Arbiter rendered a decision in favor of petitioners.
NLRC affirmed the decision of the Labor Arbiter but deleted the
award of moral damages, attorney‘s fees, and litigation
expenses for lack of sufficient basis. Respondents filed a
petition for certiorari with the Court of Appeals, which reversed
the decision of the NLRC and ordered petitioner company to
pay the respondents the P25.00 per day COLA plus interest
thereon.
Hence, this petition.
Issue:
Whether or not the COLA of the employees for year 1993 and
1994 have been paid as mandated under RTWPB XI Wage
Order No. 3.
Ratio Decidendi:
Yes, the COLA of the employees for the year 1993 and 1994
have been deemed paid.
The allegations of harassment are inadmissible as self-serving
statements and therefore cannot be repositories of truth. He
who asserts not he who denies must prove; unfortunately, the
respondents miserably failed to discharge this burden. We also
88
agree with the observation of the Labor Arbiter that in 1993
there was no labor dispute since the labor unrest took place
only in the later part of 1997. Hence, there was no reason for
management to harass its employees. Regarding the 1993
COLA, the respondents filed the complaint for underpayment
of wage on September 24, 1997. Thus, the action for the
payment of the December 1993 COLA has already prescribed.
On the other hand, the 1994 COLA contains a computation of
the amounts payable to the employees for the given period,
including a breakdown of the allowances and deductions on
the amount due, but the signatures of the respondents are
conspicuously missing. Ideally, the signatures of the
respondents should appear in the payroll as evidence of actual
payment. However, the absence of such signatures does not
necessarily lead to the conclusion that the December 1994
COLA was not received. It appears that the payslips for the
same period bear the signatures of the respondents plus a
certification that they received the full compensation for the
services rendered.
Ruling:
WHEREFORE, based on the foregoing, the petition is
GRANTED. The February 28, 2002 decision of the Court of
Appeals in CA-G.R. SP No. 57972 is REVERSED and SET ASIDE.
The Decision of the NLRC dated August 23, 1999 dismissing
respondent‘s claims of unpaid COLA for December 1993 and
December 1994, and deleting the awards for moral damages,
attorney‘s fees and litigation expenses for lack of sufficient
basis, is AFFIRMED.
G & M (Phils.), Inc., petitioner, vs. EPIFANIO CRUZ,
respondent.
G.R. NO. 140495. April 15, 2005
AUSTRIA-MARTINEZ, J.:
Facts:
Respondent Epifanio Cruz filed a complaint against petitioner
for illegal dismissal, underpayment and non-payment of
wages, and refund of transportation expenses after being
deported by his employer, Salim Al Yami Est. According to
respondent, the cause for his dismissal was his complaint for
sub-human working conditions, non-payment of wages and
overtime pay, salary deduction and change of employer.
Respondent alleged that when he arrived in the Kingdom of
Saudi Arabia, he was made to sign an employment contract in
blank and his salary was reduced to SR604.00. Respondent
further claims that he was only paid in an amount equivalent
to five months‘ salary and he did not receive his salary for the
last two months. Respondent submitted a copy of his pay slip
showing the amount of SR604.00 as his basic salary. Petitioner
G & M (Phils.), Inc. recruited respondent Cruz as trailer driver
for its foreign principal, Salim Al Yami Est., for a period of two
years, and with a stipulated monthly salary of US$625.
Petitioner contends that respondent abandoned his job when
he joined an illegal strike and refused to report for work,
constituting a breach of his employment contract and a valid
cause for termination of employment. The Labor Arbiter and
the NLRC granted Cruz's claim for underpayment of wages and
two months unpaid salary, strengthened by the Court of
Appeals' dismissal of G & M's special civil action for certiorari,
hence this petition for review on certiorari under Rule 45 of the
Rules of Court.
Issues:
Whether or not in complaints involving underpayment of
salaries, the employee has the burden of proving such
underpayment?
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Ratio Decidendi:
No. It is the burden of petitioner, G&M Phils. Inc. to prove that
the salaries paid by its foreign principal complied with the
contractual stipulations of their agency-worker agreement. The
rule is that the burden of proving payment of monetary claims
rests on the employer, in this case, herein petitioner, being the
employment agency or recruitment entity, and agent of the
foreign principal, Salim Al Yami Est. which recruited
respondent. Where a person is sued for a debt admits that the
debt was originally owed, and pleads payment in whole or in
part, it is incumbent upon him to prove such payment. This is
based on the principle of evidence that each party must prove
his affirmative allegations. Since petitioner asserts that
respondent has already been fully paid of his stipulated salary,
the burden is upon petitioner to prove such fact of full
payment. The debtor has the burden of showing with legal
certainty that the obligation has been discharged by payment.
Ruling:
WHEREFORE, the petition is DENIED for lack merit.
PEDRO CHAVEZ, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION, SUPREME PACKAGING, INC.
and ALVIN LEE, Plant Manager, respondents.
G.R. No. 146530. January 17, 2005
CALLEJO, SR., J.:
Facts:
The respondent company, Supreme Packaging Inc., is in the
business of manufacturing cartons and other packaging
materials for export and distribution. The petitioner, Pedro
Chavez, was a truck driver (from October 25, 1984) tasked to
deliver the respondent company‘s products to its various
customers. The respondent furnished petitioner with a truck
that all deliveries were made in accordance with the routing
slips issued by the respondent company indicating the order,
time and urgency of delivery.
On 1992, the petitioner expressed his desire to avail the
benefits that a regular employee were receiving such as
overtime pay, nightshift differential pay, and 13th month pay,
among others but nothing was complied. On February 20,
1995, petitioner filed a complaint for regularization with the
Regional Arbitration Branch No. III of NLRC in San Fernando,
Pampanga. Before the case could be heard, respondent
terminated the services of the petitioner.
Consequently, on May 25, 1995, the petitioner filed an
amended complaint against the respondents for illegal
dismissal, unfair labor practice and non-payment of overtime
pay, nightshift differential pay, 13th month pay, among others.
The Labor Arbiter found that the petitioner‘s dismissal was
anchored on his insistent demand to be regularized. Hence, for
lack of a valid and just cause therefor and for their failure to
observe the due process requirements, the respondents were
found guilty of illegal dismissal.
The respondents seasonably interposed an appeal with the
NLRC. However, the appeal was dismissed by the NLRC.
However, upon reconsideration, NLRC reversed its initial
decision and, this time, holding that no employer-employee
relationship existed between the respondent company and the
petitioner. The NLRC ruled that the contract of service was not
intended to circumvent Article 280 of the Labor Code on the
regularization of employees. Said contract, including the fixed
period of employment contained therein, having been
knowingly and voluntarily entered into by the parties.
89
On appeal, the appellate court rendered decision reversing
decision of the NLRC and reinstating the decision of the Labor
Arbiter. However, on motion for reconsideration by the
respondents, the CA made a complete turnaround as it
rendered the assailed Resolution upholding the contract of
service between the petitioner and the respondent company.
In reconsidering its decision, the CA explained that the extent
of control exercised by the respondents over the petitioner was
only with respect to the result but not to the means and
methods used by him.
Hence this petition.
Issue:
Whether there exists an employer-employee relationship?
Ratio Decidendi:
Yes an employer-employee do exist. The elements to
determine the existence of an employment relationship are:
(1) the selection and engagement of the employee;
(2) the payment of wages;
(3) the power of dismissal; and
(4) the employer‘s power to control the employee‘s
conduct.
The most important element is the employer‘s control of the
employee‘s conduct, not only as to the result of the work to be
done, but also as to the means and methods to accomplish it.
First. Undeniably, it was the respondents who engaged the
services of the petitioner without the intervention of a third
party.
Second. Wages are defined as ―remuneration or earnings,
however designated, capable of being expressed in terms of
money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or
to be done, or for service rendered or to be rendered. The
petitioner is paid on a per trip basis is not significant. This is
merely a method of computing compensation.
Third. The respondent‘s power to dismiss the petitioner was
inherent in the fact that they engaged the services of the
petitioner as truck driver. They exercised this power by
terminating the petitioner‘s services albeit in the guise of
severance of contractual relation due allegedly to the latter‘s
breach of his contractual obligation.
Fourth. Compared to an employee, an independent contractor
is one who carries on a distinct and independent business and
undertakes to perform the job, work or service on its own
account and under its own responsibility according to its own
manner and method, free from the control and direction of the
principal in all matters connected with the performance of the
work except as to the results thereof. Hence while an
independent contractor enjoys independence and freedom
from the control and supervision of his principal, an employee
is subject to the employer‘s power to control the means and
methods by which the employee‘s work is to be performed and
accomplished.
A careful review of the records shows that the latter performed
his work under the respondents‘ supervision and control. The
existence of an employer-employee relationship cannot be
negated by expressly repudiating it in a contract and providing
therein that the employee is an independent contractor when
the facts clearly show otherwise. Employment status is defined
by law and not by what the parties say it should be.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Ruling:
WHEREFORE, the instant petition is GRANTED. The Resolution
dated December 15, 2000 of the Court of Appeals reversing its
Decision dated April 28, 2000 in CA-G.R. SP No. 52485 is
REVERSED and SET ASIDE. The Decision dated February 3,
1997 of the Labor Arbiter in NLRC Case No. RAB-III-02-6181-
5, finding the respondents guilty of illegally terminating the
employment of petitioner Pedro Chavez, is REINSTATED.
BERNARDO JIMENEZ and JOSE JIMENEZ, as Operators
of JJs TRUCKING, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION, PEDRO JUANATAS and
FREDELITO JUANATAS, respondents.
G.R. No. 116960. April 2, 1996
REGALADO, J.:
Facts:
Private respondents Pedro and Fredelito Juanatas, father and
son, filed a claim for unpaid wages/commissions, separation
pay and damages against JJ s Trucking and/or Dr. Bernardo
Jimenez. They alleged that they were hired by herein
petitioner as driver-mechanic and helper, respectively, in his
trucking firm, JJ Trucking. They were assigned to a ten-
wheeler truck to haul soft drinks of Coca-Cola Bottling
Company and paid on commission basis. Private respondents
further alleged that for the years 1988 and 1989 they received
only a partial commission of P84,000.00 from petitioners total
gross income of almost P1,000,000.00 for the said two years.
Consequently, with their commission for that period being
computed at 20% of said income, there was an unpaid balance
to them of P106,211.86; that until March, 1990 when their
services were illegally terminated, they were further entitled to
P15,050.309 which, excluding the partial payment of
P7,000.00, added up to a grand total of P114,261.86 due and
payable to them; and that petitioners refusal to pay their
aforestated commission was a ploy to unjustly terminate them.
Disputing the complaint, petitioners contend that respondent
Fredelito was not an employee of the firm but was merely a
helper of his father Pedro and that all commissions for 1988
and 1989, as well as those up to March, 1990, were duly paid;
and that the truck driven by respondent Pedro was sold to one
Winston Flores in 1991 and, therefore, private respondents
were not illegally dismissed.
Labor Arbiter rendered a decision ordering respondents JJs
Trucking and/or Dr. Bernardo Jimenez to pay jointly and
severally complainant Pedro a separation pay plus attorneys
fee and dismissing the complaint of Fredelito for lack of merit.
On appeal, NLRC modified the decision of the labor arbiter and
declared Fredelito as respondent‘s employee and shares in
(the) commission and separation pay awarded to his father.
Hence, this petition.
Issue:
1. Whether or not private respondents were not paid
their commissions in full, and
2. Whether or not respondent Fredelito was an
employee of JJs Trucking
Ratio Decidendi:
1. Yes, the entire amount of commissions was not paid,
this by reason of the evident failure of herein
petitioners to present evidence that full payment
thereof has been made. It is a basic rule in evidence
that each party must prove his affirmative allegations.
90
As a general rule, one who pleads payment has the
burden of proving it. In the instant case, the right of
respondent Pedro Juanatas to be paid a commission
equivalent to 17%, later increased to 20%, of the
gross income is not disputed by petitioners. Although
private respondents admit receipt of partial payment,
petitioners still have to present proof of full payment.
For failure to present evidence to prove payment,
petitioners defaulted in their defense and in effect
admitted the allegations of private respondents.
2. No, Fredelito, the son, was not an employee of
petitioners. The elements that are generally
considered are the following: (1) the selection and
engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power
to control the employees conduct,18 with the control
test assuming primacy in the overall consideration.
In the case at bar, the aforementioned elements are
not present. The agreement was between petitioner
JJs Trucking and respondent Pedro. The hiring of a
helper was discretionary on the part of Pedro. Under
their contract, should he employ a helper, he would
be responsible for the latters compensation. With or
without a helper, respondent Pedro was entitled to
the same percentage of commission. Respondent
Fredelito was hired by his father, Pedro, and the
compensation he received was paid by his father out
of the latter‘s commission. Further, Fredelito was not
subject to the control and supervision of and
dismissal by petitioners but of and by his father.
Ruling:
WHEREFORE, the judgment of respondent National Labor
Relations Commission is hereby AFFIRMED, with the
MODIFICATION that paragraph 1 thereof, declaring Fredelito
Juanatas an employee of petitioners and entitled to share in
the award for commission and separation pay, is hereby
DELETED.
ALLAN VILLAR, DANILO INDITA, ARTURO MANIMTIM,
GERSON DATALIO, GERRY VILLARALBO, ALFONSO
PIPINO, NOEL ANGAY and EXEQUIEL MANIMTIM,
petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and HI-TECH MANUFACTURING
CORPORATION, respondents.
G.R. No. 130935. May 11, 2000
BELLOSILLO, J.:
Facts:
HI-TECH MANUFACTURING CORPORATION (HI-TECH), a
corporation duly organized and existing under Philippine laws,
is engaged in the business of manufacturing cartons for
commercial purposes. On different dates, HI-TECH hired
petitioners to perform various jobs for the company such as
slitter machine operator, inkman, silk screen printer, truck
helper, rubber dye setter, forklift operator and stitching
machine operator.
Petitioners, who were members of the Federation of Free
Workers Union, filed before the Department of Labor a petition
for certification election among the rank-and-file employees of
HI-TECH. The petition was granted and a certification election
was conducted inside the company premises. However,
petitioners lost in the election as the HI-TECH employees voted
for "No Union."
On succeeding days, petitioners failed to report for work. They
alleged that they were barred from entering the premises of
HI-TECH; hence, they immediately filed before the Labor
Arbiter separate complaints for illegal dismissal and labor
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
standards claims against HI-TECH, Herman T. Go, owner, and
Carmen Belano, general manager.
Petitioners claimed that they were summarily dismissed from
employment by the management of HI-TECH in retaliation for
organizing a labor union in the work premises as well as in
filing the petition for certification election before the
Department of Labor. They further averred that they were paid
daily wages below the minimum fixed by law and that they
were required to work six (6) days a week from 8 oclock in the
morning to 7 oclock in the evening without being paid for the
overtime. Neither were they paid their service incentive leave
pay and 13th month pay.
On the other hand, HI-TECH denied having dismissed
petitioners. It contended that petitioners were probably stung
by their defeat in the certification election such that they
refused to work thereafter. In support of these allegations,
private respondent presented in evidence the affidavits of
employees who initially joined petitioners in filing their
complaints but later desisted from pursuing their claims. The
pertinent portions of the affidavits uniformly read that they
were not dismissed by the company but they resigned
voluntarily ad that they received salary in accordance with law.
A consolidated decision was rendered by Labor Arbiter in favor
of petitioners ordering HI-TECH to reinstate petitioners to their
former positions without loss of seniority rights and with full
back wages, and to pay their mandated monetary benefits.
On appeal by HI-TECH, the NLRC in its decision vacated and
set aside the Labor Arbiters Decision and ordered petitioners to
report back to work, or if no longer feasible, directed HI-TECH
to pay petitioners their separation benefits.
Hence, this petition.
Issue:
1. Whether or not the petitioners were illegally
dismissed.
2. Whether or not petitioners are entitled to back wages
and other monetary benefits
Ratio Decidendi:
1. Yes, the petitioners were illegally dismissed. It is
well-settled that factual findings of quasi-judicial
agencies such as the NLRC are generally accorded not
only respect but, at times, even finality. However, the
rule is not absolute and admits of certain well-
recognized exceptions. Thus, when the findings of
fact of the NLRC are not supported by substantial
evidence, capricious or arbitrary, and directly at
variance with those of the Labor Arbiter, this Court
may make an independent evaluation of the facts of
the case.
It is clear from the records that sometime in August
1994, immediately after petitioners supposedly
"refused to work" having lost earlier in the
certification election, several complaints for illegal
dismissal against HI-TECH were filed by petitioners.
These are sufficient proofs that they were never guilty
of leaving their jobs. The concept of abandonment of
work is inconsistent with the immediate filing of
complaints for illegal dismissal. An employee who
took steps to protest his layoff could not by any logic
be said to have abandoned his work. Abandonment is
a matter of intention and cannot lightly be presumed
from certain equivocal acts. To constitute
abandonment, there must be clear proof of deliberate
and unjustified intent to sever the employer-employee
relationship. Mere absence of the employee is not
sufficient. The burden of proof to show a deliberate
and unjustified refusal of an employee to resume his
employment without any intention of returning rests
on the employer. HI-TECH failed to discharge its
burden. Hence, it is concluded that petitioners did not
abandon their jobs but were illegally dismissed
91
therefrom by private respondent. As a consequence,
they are entitled to reinstatement with full back
wages, undiminished by earnings elsewhere, to be
computed from their illegal dismissal to their actual
reinstatement.
2. Yes, petitioners are entitled to back wages and other
monetary benefits. First, petitioners executed a JOINT
AFFIDAVIT specifying their daily wages, positions and
periods of employment, which was made the basis of
the Labor Arbiters computation of the monetary
awards. Second, all that the NLRC needed to do was
to refer to the prevailing minimum wage to ascertain
the correctness of petitioners claims. Third, and most
importantly, the burden of proving payment of
monetary claims rests on the employer.
As a general rule, one who pleads payment has the
burden of proving it. Even where the plaintiff must
allege non-payment, the general rule is that the
burden rests on the defendant to prove payment,
rather than on the plaintiff to prove non-payment.
The debtor has the burden of showing with legal
certainty that the obligation has been discharged with
payment. The reason for the rule is that the pertinent
personnel files, payrolls, records, remittances and
other similar documents which will show that
overtime, differentials, service incentive leave and
other claims of workers have been paid are not in the
possession of the worker but in the custody and
absolute control of the employer. Thus, in choosing
not to present evidence to prove that it had paid all
the monetary claims of petitioners, HI-TECH failed
once again to discharge the onus probandi.
Ruling:
WHEREFORE, the petition is GRANTED. The assailed Decision
dated 30 May 1997 and Resolution dated 31 July 1997 of the
National Labor Relations Commission are SET ASIDE, and the
Labor Arbiters Decision of 15 August 1996 is REINSTATED.
Private respondent is directed to reinstate petitioners to their
former positions without loss of seniority rights and with full
back wages, as well as to pay their monetary benefits in
accordance with the computation made by Labor Arbiter
Emerson C. Tumanon in his Decision of 15 August 1996.
However, insofar as Arturo Manimtim and Exequiel Manimtim
are concerned, this case is remanded to the Labor Arbiter for
purposes of determining the amounts they received as
consideration for their quitclaims and thereafter deducting
these amounts from their monetary awards.
TRADERS ROYAL BANK EMPLOYEES UNION-
INDEPENDENT, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and EMMANUEL NOEL A.
CRUZ, respondents.
G.R. No. 120592. March 14, 1997
REGALADO, J.:
Facts:
Petitioner Traders Royal Bank (TRB) Employees Union and
private respondent Atty. Emmanuel Noel A. Cruz, head of the
E.N.A. Cruz and Associates law firm, entered into a retainer
agreement on February 26, 1987 in the amount of P3,000.00
as monthly retainer fee. Said retainer agreement was
terminated by the union on April 4, 1990.
During the existence of that agreement, petitioner union
referred to private respondent the claims of its members for
holiday, mid-year and year-end bonuses against their
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
employer, Traders Royal Bank (TRB). After the appropriate
complaint was filed by private respondent, the case was
certified by the Secretary of Labor to the National Labor
Relations Commission (NLRC) on March 24, 1987.
The NLRC rendered a decision awarding the employees holiday
pay differential, mid-year bonus differential, and year-end
bonus differential.
Petitioner TRB challenged the NLRC‘s decision before the
Supreme Court. The Court modified the decision of the NLRC
by deleting the award of mid-year and year-end bonus
differentials while affirming the award of holiday pay
differential.
The bank voluntarily complied with such final judgment and
paid its concerned employees their respective entitlement in
said sum through their payroll.
After private respondent received the above decision of the
Supreme Court, he notified the petitioner union, the TRB
management and the NLRC of his right to exercise and enforce
his attorney‘s lien over the award of holiday pay differential.
Thereafter, private respondent filed a motion before the Labor
Arbiter for the determination of his attorney‘s fees, praying
that 10% of the total award for holiday pay differential
computed by TRB at P175,794.32, or the amount
of P17,579.43, be declared as his attorneys fees, and that
petitioner union be ordered to pay said amount to him.
The labor arbiter granted the motion of private respondent,
ordering petitioner union to pay the attorney‘s fees due the
private respondent the amount of P17,574.43 or 10% per cent
of the P175,794.32 awarded by the Supreme Court to its
members.
Petitioner to file an appeal with the NLRC which affirmed the
Labor Arbiter‘s decision. The motion for reconsideration filed
by petitioner was denied by the NLRC. Hence the petition.
Petitioner contends that the challenged resolution of the NLRC
is null and void as it is in violation of the retainer agreement.
All attorney‘s fees due to private respondent were covered by
the retainer fee of P3,000.00 which it has been regularly
paying to private respondent under their retainer
agreement. To be entitled to the additional attorney‘s fees as
provided in Part D (Special Billings) of the agreement, it avers
that there must be a separate mutual agreement between the
union and the law firm prior to the performance of the
additional services by the latter. Since there was no agreement
as to the payment of the additional attorney‘s fees, then it is
considered waived.
Private respondent contends that a retainer fee is not the
attorney‘s fees contemplated for and commensurate to the
services he rendered to petitioner. He asserts that although
there was no express agreement as to the amount of his fees
for services rendered in the case for recovery of differential
pay, Article 111 of the Labor Code supplants this omission by
providing for an award of ten percent (10%) of a money
judgment in a labor case as attorney‘s fees.
Issue:
Whether or not the attorney‘s fees of private respondent is
included in his monthly retainer fee of P3,000.00.
Ratio Decidendi:
As provided in the retainer agreement, the P3,000.00 which
petitioner pays monthly to private respondent does not cover
the services the latter actually rendered before the labor
arbiter and the NLRC in behalf of the former. As stipulated in
Part C of the agreement, the monthly fee is intended merely as
a consideration for the law firms commitment to render the
services enumerated in Part A (General Services) and Part B
(Special Legal Services) of the retainer agreement.
There are two kinds of retainer fees a client may pay his
lawyer: general retainer, or a retaining fee, and a special
retainer. A general retainer, or retaining fee, is the fee paid to
a lawyer to secure his future services as general counsel for
any ordinary legal problem that may arise in the routinary
92
business of the client and referred to him for legal action. The
future services of the lawyer are secured and committed to the
retaining client. For this, the client pays the lawyer a fixed
retainer fee which could be monthly or otherwise, depending
upon their arrangement. The fees are paid whether or not
there are cases referred to the lawyer. The reason for the
remuneration is that the lawyer is deprived of the opportunity
of rendering services for a fee to the opposing party or other
parties. In fine, it is a compensation for lost opportunities.
A special retainer is a fee for a specific case handled or special
service rendered by the lawyer for a client.
Evidently, the P3,000.00 monthly fee provided in the retainer
agreement between the union and the law firm refers to a
general retainer, or a retaining fee, as said monthly fee covers
only the law firms pledge, or its commitment to render certain
legal services. The fee is not payment for private respondent‘s
execution or performance of the services listed in the contract,
subject to some particular qualifications or permutations stated
there.
Petitioner and private respondent were not able to come into
agreement as to the law firm‘s actual performance of services
in favor of the union. Hence, the retainer agreement cannot
control the measure of remuneration for private respondent‘s
services.
Petitioner cannot deny that it did benefit from private
respondents efforts as the law firm was able to obtain an
award of holiday pay differential in favor of the union. It
cannot even hide behind the cloak of the monthly retainer
of P3,000.00 paid to private respondent because, as
demonstrated earlier, private respondents actual rendition of
legal services is not compensable merely by said amount.
Private respondent is entitled to an additional remuneration for
pursuing legal action in the interest of petitioner before the
labor arbiter and the NLRC, on top of the P3,000.00 retainer
fee he received monthly from petitioner. The law firm‘s
services are decidedly worth more than such basic fee in the
retainer agreement.
Ruling:
WHEREFORE, the impugned resolution of respondent National
Labor Relations Commission affirming the order of the labor
arbiter is MODIFIED, and petitioner is hereby ORDERED to pay
the amount of TEN THOUSAND PESOS (P10,000.00) as
attorney‘s fees to private respondent for the latter‘s legal
services rendered to the former.
LOURDES G. MARCOS, ALEJANDRO T. ANDRADA,
BALTAZARA J. LOPEZ AND VILMA L.
CRUZ, petitioners, vs. NATIONAL LABOR RELATIONS
COMMISSION and INSULAR LIFE ASSURANCE CO.,
LTD., respondents.
G.R. No. 111744 September 8, 1995
REGALADO, J.:
FACTS:
Petitioners were regular employees of private respondent
Insular Life Assurance Co., Ltd., but they were dismissed on
November 1, 1990 due to redundancy. A special redundancy
benefit was paid to them, which included payment of accrued
vacation leave and 50% of unused current sick leave, special
redundancy benefit, equivalent to 3 months salary for every
year of service; and additional cash benefits, in lieu of other
benefits provided by the company or required by law.
Petitioner Marcos had been in the employ of private
respondent for more than 20 years; petitioner Andrada, more
than 25 years; petitioner Lopez, exactly 30 years; and
petitioner Cruz, more than 20 years.
Petitioners, particularly Baltazara J. Lopez, sent a letter to
respondent company claiming that they should receive their
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
respective service awards and other prorated bonuses which
they had earned.
Private respondent required petitioners to execute a "Release
and Quitclaim," and petitioners complied but with a written
protest reiterating their previous demand that they were
nonetheless entitled to receive their service awards.
Petitioners inquired from the Legal Service of the
DOLE whether respondent corporation could legally refuse the
payment of their service awards as mandated in their
Employee's Manual.
The labor department issued its opinion holding that: First… a
gratuity or bonus… may become regarded as part of regular
compensation and thus demandable; Second, the award is
earned at the pertinent anniversary date which becomes a
crucial determining factor. Since the award accrues on that
date, it is of no moment that the entitled employee is
separated from service (for whatever cause) before the awards
are physically handed out; Third, even if the award has not
accrued — as when an employee is separated from service
because of redundancy before the applicable 5th year
anniversary, the material benefits of the award must be given,
prorated, by Insular Life. This is especially true (in)
redundancy, wherein he/she had no control; and Fourth, the
fact that you were required to sign "Release and Quitclaim"
does not affect petitioners‘ right to the material benefits of the
service award. . . .
Meanwhile, private respondent celebrated its 80th anniversary
wherein the management approved the grant of an
anniversary bonus equivalent to one month salary only to
permanent and probationary employees. Respondent company
announced the grant of performance bonus to both rank and
file employees and supervisory specialist grade and managerial
staff equivalent to 2 months salary and 2.75 basic salary,
respectively, as of December 30, 1990. The performance
bonus, however, would be given only to permanent employees
as of March 30, 1991.
Despite the opinion of the DOLE, private respondent refused to
pay petitioners‘ service awards. This prompted the latter to file
a consolidated complaint before the NLRC Labor Arbiter, for
payment of their service awards, including performance and
anniversary bonuses.
In their complaint, petitioners contended that they are likewise
entitled to the performance and anniversary bonuses because,
at the time the performance bonus was announced to be
given, they were only short of 2 months service to be entitled
to the full amount thereof as they had already served the
company for 10 months prior to the declaration of the grant of
said benefit. Also, they lacked only 15 days to be entitled to
the full amount of the anniversary bonus when it was
announced to be given to employees as of November 15,
1990.
The labor arbiter ordered respondent company to pay
petitioners their service awards, anniversary bonuses and
prorated performance bonuses, including 10% thereof as
attorney's fees.
Respondent company appealed to the NLRC.
The NLRC upheld the validity of the quitclaim document
executed by petitioners, holding that they were not placed
under duress or were compelled by means of force to sign the
document and that they voluntarily accepted the redundancy
benefit package.
Hence, this petition.
Issues:
1. Whether or not quitclaim document is valid.
2. Whether or not petitioners are entitled to the service
awards.
Ratio Decidendi:
1. The law does not consider as valid any agreement
whereby a worker agrees to receive less
compensation than what he is entitled to recover. A
93
deed of release or quitclaim cannot bar an employee
from demanding benefits to which he is legally
entitled.
We have heretofore explained that the reason why quitclaims
commonly frowned upon as contrary to public policy, and why
they are held to be ineffective to bar claims for the full
measure of the workers' legal rights, is the fact that the
employer and the employee obviously do not stand on the
same footing. The employer drove the employee to the wall.
The latter must have harsh necessities of life. He thus found
himself in no position to resist money proffered. His, then, is a
case of adherence, not of choice. One thing sure, however, is
that petitioners did not relent on their claim. They pressed it.
They are deemed not have waived any of their
rights. Renuntiatio non praesumitur.
Quitclaims and/or complete releases executed by the
employees do not estop them from pursuing their claims
arising from unfair labor practices of the employer. The basic
reason for this is that such quitclaims and/or complete releases
are against public policy and, therefore, null and void. The
acceptance of termination does not divest a laborer of the right
to prosecute his employer for unfair labor practice acts. While
there maybe possible exceptions to this holding, we do not
perceive any in the case at bar.
In the instant case, when petitioners signed the instrument of
release and quitclaim, they made a written manifestation
reserving their right to demand the payment of their service
awards. The element of total voluntariness in executing that
instrument is negated by the fact that they expressly stated
therein their claim for the service awards, a manifestation
equivalent to a protest and a disavowal of any waiver thereof.
2. Equity demands that the performance and
anniversary bonuses should be prorated to the
number of months that petitioners actually served
respondent company in the year 1990.
In Insular Life Assurance Co., Ltd., et al. vs. NLRC, et al., this
Court ruled that "as to the service award differentials claimed
by some respondent union members, the company policy shall
likewise prevail, the same being based on the employment
contracts or collective bargaining agreements between the
parties. As the petitioners had explained, pursuant to their
policies on the matter, the service award differential is given at
the end of the year to an employee who has completed years
of service divisible by 5.
A bonus is not a gift or gratuity, but is paid for some services
or consideration and is in addition to what would ordinarily be
given. The term "bonus" as used in employment contracts,
also conveys an idea of something which is gratuitous, or
which may be claimed to be gratuitous, over and above the
prescribed wage which the employer agrees to pay.
If one enters into a contract of employment under an
agreement that he shall be paid a certain salary by the week
or some other stated period and, in addition, a bonus, in case
he serves for a specified length of time, there is no reason for
refusing to enforce the promise to pay the bonus, if the
employee has served during the stipulated time, on the ground
that it was a promise of a mere gratuity.
In the case at bar, equity demands that the performance and
anniversary bonuses should be prorated to the number of
months that petitioners actually served respondent company in
the year 1990.
Ruling:
WHEREFORE, the assailed decision and resolution of
respondent National Labor Relations Commission are hereby
SET ASIDE and the decision of Labor Arbiter Alex Arcadio
Lopez is REINSTATED.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
JPL MARKETING PROMOTIONS, Petitioner, versus
COURT OF APPEALS, NATIONAL LABOR RELATIONS
COMMISSION, NOEL GONZALES, RAMON ABESA III and
FAUSTINO ANINIPOT, Respondents.
G.R. No. 151966 July 8, 2005
TINGA, J.:
Facts:
JPL Marketing and Promotions (JPL) is a domestic corporation
engaged in the business of recruitment and placement of
workers. On the other hand, private respondents Noel
Gonzales, Ramon Abesa III and Faustino Aninipot were
employed by JPL as merchandisers on separate dates and
assigned at different establishments in Naga City and Daet,
Camarines Norte as attendants to the display of California
Marketing Corporation (CMC), one of petitioner‘s clients.
On 13 August 1996, JPL notified private respondents that CMC
would stop its direct merchandising activity in the Bicol Region,
Isabela, and Cagayan Valley effective 15 August 1996. They
were advised to wait for further notice as they would be
transferred to other clients. However, on 17 October
1996, private respondents Abesa and Gonzales filed before the
NLRC Sub V complaints for illegal dismissal, praying for
separation pay, 13th month pay, service incentive leave pay
and payment for moral damages. Aninipot filed a similar case.
The Executive Labor Arbiter dismissed the complaints for lack
of merit. The Labor Arbiter found that Gonzales and Abesa
applied with and were employed by the store where they were
originally assigned by JPL even before the lapse of the 6-
month period given by law to JPL to provide private
respondents a new assignment. Thus, they may be considered
to have unilaterally severed their relation with JPL, and cannot
charge JPL with illegal dismissal. The Labor Arbiter held that it
was incumbent upon private respondents to wait until they
were reassigned by JPL, and if after six months they were not
reassigned, they can file an action for separation pay but not
for illegal dismissal. The claims for 13th month pay and service
incentive leave pay was also denied since private respondents
were paid way above the applicable minimum wage during
their employment.
Private respondents appealed to the NLRC. In
its Resolution, the NLRC agreed with the Labor Arbiter‘s finding
that when private respondents filed their complaints, the 6-
month period had not yet expired, and that CMC‘s decision to
stop its operations in the areas was beyond the control of JPL,
thus, they were not illegally dismissed. However, it found that
despite JPL‘s effort to look for clients to which private
respondents may be reassigned it was unable to do so, and
hence they are entitled to separation pay.
The NLRC ordered the payment of separation pay, Service
Incentive Leave pay, and 13th month pay.
JPL filed a petition for certiorari with the Court of Appeals
claiming that private respondents are not by law entitled to
separation pay, service incentive leave pay and 13th month
pay.
The Court of Appeals dismissed the petition and affirmed
in toto the NLRC resolution.
In the instant petition for review, JPL claims that the case does
not fall under any of the instances where separation pay is
due.
In addition, even assuming arguendo that private respondents
are entitled to the benefits awarded, the computation thereof
should only be from their first day of employment with JPL up
to 15 August 1996, the date of termination of CMCs contract,
94
and not up to the finality of the 27 July 2000 resolution of the
NLRC.
Private respondents claim that their dismissal, while not illegal,
was tainted with bad faith. They allege that they were
deprived of due process because the notice of termination was
sent to them only 2 days before the actual termination.
JPL denied that the notice it sent to them was a notice of
actual termination. The said memo merely notified them of the
end of merchandising for CMC, and that they will be
transferred to other clients. Moreover, JPL is not bound to
observe the 30-day notice rule as there was no dismissal to
speak of.
Issues:
1. Whether or not private respondents are entitled to
separation pay, 13thmonth pay and service incentive
leave pay; and
2. Granting that they are so entitled, what should be the
reckoning point for computing said awards.
Ratio Decidendi:
1. Private respondents are not entitled to separation
pay, but can claim 13th month pay and service
incentive leave pay.
Under Arts. 283 and 284 of the Labor Code, separation pay is
authorized only in cases of dismissals due to any of these
reasons: (a) installation of labor saving devices; (b)
redundancy; (c) retrenchment; (d) cessation of the employer's
business; and (e) when the employee is suffering from a
disease and his continued employment is prohibited by law or
is prejudicial to his health and to the health of his co-
employees. However, separation pay shall be allowed as a
measure of social justice in those cases where the employee is
validly dismissed for causes other than serious misconduct or
those reflecting on his moral character, but only when he was
illegally dismissed. In addition, Sec. 4(b), Rule I, Book VI of
the Implementing Rules to Implement the Labor Code provides
for the payment of separation pay to an employee entitled to
reinstatement but the establishment where he is to be
reinstated has closed or has ceased operations or his present
position no longer exists at the time of reinstatement for
reasons not attributable to the employer.
The common denominator of the above instances is that the
employee was dismissed by the employer. In the instant case,
there was no dismissal to speak of. Private respondents were
simply not dismissed at all, whether legally or illegally. What
they received from JPL was not a notice of termination of
employment, but a memo informing them of the termination of
CMCs contract with JPL. More importantly, they were advised
that they were to be reassigned. At that time, there was no
severance of employment to speak of.
Furthermore, Art. 286 of the Labor Code allows the bona fide
suspension of the operation of a business or undertaking for a
period not exceeding 6 months, wherein an
employee/employees are placed on the so-called floating
status. When that floating status of an employee lasts for more
than six months, he may be considered to have been illegally
dismissed from the service. Thus, he is entitled to the
corresponding benefits for his separation, and this would apply
to suspension either of the entire business or of a specific
component thereof.
As clearly borne out by the records of this case, private
respondents sought employment from other establishments
even before the expiration of the 6-month period provided by
law. As they admitted in their comment, all three of them
applied for and were employed by another establishment after
they received the notice from JPL. JPL did not terminate their
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
employment; they themselves severed their relations with JPL.
Thus, they are not entitled to separation pay.
Nonetheless, JPL cannot escape the payment of 13th month
pay and service incentive leave pay to private respondents.
Said benefits are mandated by law and should be given to
employees as a matter of right.
Presidential Decree No. 851, as amended, requires an
employer to pay its rank and file employees a 13th month pay
not later than 24 December of every year. However, employers
not paying their employees a 13th month pay or its equivalent
are not covered by said law. The term its equivalent was
defined by the laws implementing guidelines as including
Christmas bonus, mid-year bonus, cash bonuses and other
payment amounting to not less than 1/12 of the basic salary
but shall not include cash and stock dividends, cost-of-living-
allowances and all other allowances regularly enjoyed by the
employee, as well as non-monetary benefits.
On the other hand, service incentive leave, as provided in Art.
95 of the Labor Code, is a yearly leave benefit of five (5) days
with pay, enjoyed by an employee who has rendered at least
one year of service. The term at least one year of service shall
mean service within 12 months, whether continuous or broken
reckoned from the date the employee started working.
In this case, private respondents were not given their
13th month pay and service incentive leave pay while they
were under the employ of JPL. Instead, JPL provided salaries
which were over and above the minimum wage. The Court
rules that the difference between the minimum wage and the
actual salary received by private respondents cannot be
deemed as their 13th month pay and service incentive leave
pay as such difference is not equivalent to or of the same
import as the said benefits contemplated by law. Thus, as
properly held by the Court of Appeals and by the NLRC, private
respondents are entitled to the 13th month pay and service
incentive leave pay.
2. While computation for the 13th month pay should
properly begin from the first day of employment, the
service incentive leave pay should start a year after
commencement of service, for it is only then that the
employee is entitled to said benefit. On the other
hand, the computation for both benefits should only
be up to 15 August 1996, or the last day that private
respondents worked for JPL.
These benefits are given by law on the basis of the service
actually rendered by the employee, and in the particular case
of the service incentive leave, is granted as a motivation for
the employee to stay longer with the employer. There is no
cause for granting said incentive to one who has already
terminated his relationship with the employer.
Ruling:
WHEREFORE, the petition is GRANTED IN PART.
The Decision and Resolution of the Court of Appeals in CA-G.R.
SP No. 62631 are hereby MODIFIED. The award of separation
pay is deleted. Petitioner is ordered to pay private respondents
their 13th month pay commencing from the date of
employment up to 15 August 1996, as well as service incentive
leave pay from the second year of employment up to 15
August 1996. No pronouncement as to costs.
95
HONDA PHILS., INC., petitioner, vs. SAMAHAN NG
MALAYANG MANGGAGAWA SA HONDA, respondent.
G.R. No. 145561. June 15, 2005
YNARES-SANTIAGO, J.:
Facts:
The case stems from the Collective Bargaining Agreement
(CBA) forged between petitioner Honda and respondent union
Samahan ng Malayang Manggagawa sa Honda (respondent
union) which binds the company to maintain the present
practice in the implementation of the 13th month pay; grant a
14th Month Pay, computed on the same basis as computation
of 13th Month Pay; and continue the practice of granting, in its
discretion, financial assistance to covered employees in
December of each year, of not less than 100% of basic pay.
This CBA is effective until year 2000. In the latter part of 1998,
the parties started re-negotiations for the fourth and fifth years
of their CBA. When the talks between the parties bogged
down, respondent union filed a Notice of Strike on the ground
of bargaining deadlock. Thereafter, Honda filed a Notice of
Lockout.
Respondent union filed a second Notice of Strike on the
ground of unfair labor practice alleging that Honda illegally
contracted out work to the detriment of the workers.
Respondent union went on strike and picketed the premises of
Honda. The striking employees were ordered to return to work
and the management accepted them back under the same
terms prior to the strike staged.
The management of Honda issued a memorandum announcing
its new computation of the 13th and 14th month pay to be
granted to all its employees whereby the 31-day long strike
shall be considered unworked days for purposes of computing
said benefits. As per the company‘s new formula, the amount
equivalent to 1/12 of the employees‘ basic salary shall be
deducted from these bonuses, with a commitment however
that in the event that the strike is declared legal, Honda shall
pay the amount deducted.
Respondent union opposed the pro-rated computation of the
bonuses. Honda sought the opinion of the Bureau of Working
Conditions (BWC) on the issue. BWC agreed with the pro-rata
payment of the 13th month pay as proposed by Honda.
The matter was brought before the Grievance Machinery in
accordance with the parties‘ existing CBA but when the issue
remained unresolved, it was submitted for voluntary
arbitration. The Voluntary Arbitrator invalidated Honda‘s
computation.
A petition was filed with the Court of Appeals but was
dismissed.
Hence, the instant petition for review.
Issue:
Whether or not the pro-rated computation of the 13th month
pay and the other bonuses in question is valid and lawful.
Ratio Decidendi:
The Court denied the pro-rated computation.
A CBA 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. As in all contracts, the parties in a CBA may
establish such stipulations, clauses, terms and conditions as
they may deem convenient provided these are not contrary to
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
law, morals, good customs, public order or public policy. Thus,
where the CBA is clear and unambiguous, it becomes the law
between the parties and compliance therewith is mandated by
the express policy of the law.
In this case, Honda wanted to implement a pro-rated
computation of the benefits based on the no work, no pay
rule. According to the company, the phrase ―present practice‖
as mentioned in the CBA refers to the manner and requisites
with respect to the payment of the bonuses, i.e., 50% to be
given in May and the other 50% in December of each year.
Respondent union, however, insists that the CBA provisions
relating to the implementation of the 13th month pay
necessarily relate to the computation of the same.
The provisions of the CBA did not state categorically state
whether the computation of the 13th month pay, 14th month
pay and the financial assistance would be based on one full
month‘s basic salary of the employees, or pro-rated based on
the compensation actually received. The arbitrator thus
properly resolved the ambiguity in favor of labor as mandated
by Article 1702 of the Civil Code. The Court of Appeals
affirmed the arbitrator‘s finding and added that the
computation of the 13thmonth pay should be based on the
length of service and not on the actual wage earned by the
worker.
Presidential Decree No. 851, otherwise known as the
13th Month Pay Law, which required all employers to pay their
employees a 13th month pay, was issued to protect the level of
real wages from the ravages of worldwide inflation. Under the
Revised Guidelines on the Implementation of the 13th month
pay, the minimum 13th month pay required by law shall not be
less than 1/12 of the total basic salary earned by an employee
within a calendar year, which includes all remunerations or
earnings paid by his employer for services rendered but does
not include allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary,
such as the cash equivalent of unused vacation and sick leave
credits, overtime premium, night differential and holiday pay,
and cost-of-living allowances.
The revised guidelines also provided for a pro-ration of this
benefit only in cases of resignation or separation from work. As
the rules state, an employee is also entitled to a pay in
proportion to the length of time he worked during the year,
reckoned from the time he started working during the calendar
year. Thus, the computation of the 13th month pay should be
based on the length of service and not on the actual wage
earned by the worker. In the present case, there being no gap
in the service of the workers during the calendar year in
question, the computation of the 13th month pay should not
be pro-rated but should be given in full.
Lastly, the foregoing interpretation of law and jurisprudence is
more in keeping with the underlying principle for the grant of
this benefit. It is primarily given to alleviate the plight of
workers and to help them cope with the exorbitant increases in
the cost of living. To allow the pro-ration of the 13th month pay
in this case is to undermine the wisdom behind the law and
the mandate that the workingman‘s welfare should be the
primordial and paramount consideration. What is more, the
factual milieu of this case is such that to rule otherwise
inevitably results to dissuasion, if not a deterrent, for workers
from the free exercise of their constitutional rights to self-
organization and to strike in accordance with law.
Ruling:
WHEREFORE, the instant petition is DENIED. The decision and
the resolution of the Court of Appeals dated September 14,
2000 and October 18, 2000, respectively, in CA-G.R. SP No.
59052, affirming the decision rendered by the Voluntary
Arbitrator on May 2, 2000, are hereby AFFIRMED in toto.
96
SEVILLA TRADING COMPANY, petitioner, vs. A.V.A.
TOMAS E. SEMANA, SEVILLA TRADING WORKERS
UNION–SUPER, respondents.
G.R. No. 152456. April 28, 2004
PUNO, J.:
Facts:
For two to three years prior to 1999, petitioner Sevilla Trading
Company added to the base figure, in its computation of the
13th-month pay of its employees, the amount of other benefits
received by the employees which are beyond the basic pay:
Overtime premium for regular overtime, legal and special
holidays; Legal holiday pay, premium pay for special holidays;
Night premium; Bereavement leave pay; Union leave pay;
Maternity leave pay; Paternity leave pay; Company vacation
and sick leave pay; and Cash conversion of unused company
vacation and sick leave.
Petitioner alleged that it entrusted the preparation of the
payroll to its office staff, including the computation and
payment of the 13th-month pay and other benefits. It then
allegedly discovered the error of including non-basic pay or
other benefits in the base figure used in the computation of
the 13th-month pay of its employees.
Petitioner then effected a change in the computation of the
thirteenth month pay. Now excluded from the base figure used
in the computation of the thirteenth month pay were the
above-cited benefits previously included in the computation.
The daily piece-rate workers represented by private
respondent Sevilla Trading Workers Union – SUPER (Union, for
short), a duly organized and registered union, through the
Grievance Machinery in their Collective Bargaining Agreement,
contested the new computation and reduction of their
thirteenth month pay but failed to resolve the issue.
The issue of "whether or not the exclusion of leaves and other
related benefits in the computation of 13th-month pay is valid"
to respondent Accredited Voluntary Arbitrator Tomas E.
Semana of the National Conciliation and Mediation Board, for
resolution.
The Union alleged that petitioner violated the rule prohibiting
the elimination or diminution of employees‘ benefits as
provided for in Art. 100 of the Labor Code, as
amended. Petitioner insisted that the computation of the 13th-
month pay is based on basic salary, excluding benefits such as
leaves with pay, as per P.D. No. 851, as amended.
A.V.A. Semana decided in favor of the Union. Petitioner
appealed which the CA dismissed. Hence, this petition. In
addition to its earlier allegations, petitioner claimed that
assuming the old computation will be upheld, the reversal to
the old computation can only be made to the extent of
including non-basic benefits actually included by petitioner in
the base figure in the computation of their 13th-month pay in
the prior years. It must exclude those non-basic benefits
which, in the first place, were not included in the original
computation.
Issue:
Whether or not the computation for the employees‘ 13th month
pay which includes other benefits may be withdrawn by
petitioner.
Ratio Decidendi:
Such practice favorable to the employees cannot be
unilaterally withdrawn by the employer without violating Art.
100 of the Labor Code.
When petitioner Sevilla Trading still included over the years
non-basic benefits of its employees, such as maternity leave
pay, cash equivalent of unused vacation and sick leave, among
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
others in the computation of the 13th-month pay, this may
only be construed as a voluntary act on its part. Putting the
blame on the petitioner‘s payroll personnel is inexcusable.
In Davao Fruits Corporation vs. Associated Labor
Unions, “For two to three years prior to 1999, petitioner had
freely, voluntarily and continuously included in the
computation of its employees‘ thirteenth month pay, without
the payments for sick, vacation and maternity leave, premium
for work done on rest days and special holidays, and pay for
regular holidays. The considerable length of time the
questioned items had been included by petitioner indicates a
unilateral and voluntary act on its part, sufficient in itself to
negate any claim of mistake.‖
A company practice favorable to the employees had indeed
been established and the payments made pursuant thereto,
ripened into benefits enjoyed by them. And any benefit and
supplement being enjoyed by the employees cannot be
reduced, diminished, discontinued or eliminated by the
employer, by virtue of Sec. 10 of the Rules and Regulations
Implementing P.D. No. 851, and Art. 100 of the Labor Code of
the Philippines which prohibit the diminution or elimination by
the employer of the employees‘ existing benefits. [Tiangco vs.
Leogardo, Jr., 122 SCRA 267 (1983)]
The grant of these benefits has ripened into company practice
or policy which cannot be peremptorily withdrawn. In the case
at bar, petitioner Sevilla Trading kept the practice of including
non-basic benefits such as paid leaves for unused sick leave
and vacation leave in the computation of their 13th-month pay
for at least two (2) years. This, we rule likewise constitutes
voluntary employer practice which cannot be unilaterally
withdrawn by the employer without violating Art. 100 of the
Labor Code:
Art. 100. Prohibition against elimination or diminution of
benefits. – Nothing in this Book shall be construed to eliminate
or in any way diminish supplements, or other employee
benefits being enjoyed at the time of promulgation of this
Code.
Ruling:
IN VIEW WHEREOF, the petition is DENIED. The Decision
of the Court of Appeals in CA-G.R. SP No. 63086 dated 27
November 2001 and its Resolution dated 06 March 2002 are
hereby AFFIRMED.
INSULAR HOTEL EMPLOYEES UNION-NFL, Petitioner
versus WATERFRONT INSULAR HOTEL DAVAO,
Respondent
G.R. Nos. 174040-41, September 22, 2010
PERALTA, J.:
Facts:
On November 6, 2000, respondent Waterfront Insular Hotel
Davao sent the DOLE Region XI, Davao City, a Notice of
Suspension of Operations notifying the same that it will
suspend its operations for a period of 6 months due to severe
and serious business losses.
During the period of the suspension, Domy R. Rojas, the
President of Davao Insular Hotel Free Employees Union sent
respondent a number of letters asking management to
reconsider its decision.
Rojas intimated that the members of the Union were
determined to keep their jobs and that they intend to help
respondent by suspension of the CBA for ten years, among
others.
After series of negotiations, respondent and DIHFEU-NFL
signed a MOA wherein respondent agreed to re-open the hotel
subject to certain concessions offered by DIHFEU-NFL in its
Manifesto. Respondent downsized its manpower structure to
97
100 rank-and-file employees. Moreover, a new pay scale was
also prepared by respondent.
On June 15, 2001, respondent resumed its business
operations.
On August 22, 2002, Darius Joves and Debbie Planas, claiming
to be local officers of the National Federation of Labor, filed a
Notice of Mediation before the National Conciliation and
Mediation Board. The issue raised in said Notice was the
Diminution of wages and other benefits through unlawful MOA.
Respondent and petitioner signed a Submission Agreement.
Submitted for the resolution of the Voluntary Arbiter was the
determination of whether or not there was a diminution of
wages and other benefits through an unlawful MOA.
Respondent filed with the NCMB a Manifestation that the
persons who filed the instant complaint in the name of the
Insular Hotel Employees Union-NFL have no authority to
represent the Union and in reiterated in another letter its
position that the individual union members have no standing to
file the notice of mediation before the NCMB.
The Voluntary Arbiter rendered a decision in favor of
petitioners. The CA reversed the Voluntary Arbiter‘s decision.
Thus, this petition.
Issue:
1. Whether or not the individual members of the Union
have the requisite standing to question the MOA
before the NCMB; and
2. Whether or not the federation to which the local
union is affiliated have the standing to do so.
Ratio Decidendi:
1. No. Petitioners have not been duly authorized to
represent the union.
In Atlas Farms, Inc. v. National Labor Relations
Commission. Pursuant to Article 260 of the Labor
Code, the parties to a CBA shall name or designate
their respective representatives to the grievance
machinery and if the grievance is unsettled in that
level, it shall automatically be referred to the
voluntary arbitrators designated in advance by parties
to a CBA. Consequently, only disputes involving the
union and the company shall be referred to the
grievance machinery or voluntary arbitrators.
2. No.
In Coastal Subic Bay Terminal, Inc. v. Department of
Labor and Employment: A local union does not owe
its existence to the federation with which it is
affiliated. It is a separate and distinct voluntary
association owing its creation to the will of its
members. Mere affiliation does not divest the local
union of its own personality, neither does it give the
mother federation the license to act independently of
the local union. It only gives rise to a contract of
agency, where the former acts in representation of
the latter. Hence, local unions are considered
principals while the federation is deemed to be merely
their agent.
As provided under the NCMB Manual of Procedures,
only a certified or duly recognized bargaining
representative and an employer may file a notice of
mediation, declare a strike or lockout or request
preventive mediation. The Collective Bargaining
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

Agreement (CBA), on the other, recognizes that
DIHFEU-NFL is the exclusive bargaining
representative of all permanent employees. The
inclusion of the word NFL after the name of the local
union merely stresses that the local union is NFL's
affiliate. It does not, however, mean that the local
union cannot stand on its own. The local union owes
its creation and continued existence to the will of its
members and not to the federation to which it
belongs. The spring cannot rise higher than its
source, so to speak.
Ruling:
benefits of petitioner's intermittent workers contending that it
is a deviation from the true intent of the parties that
negotiated the CBA; that it would violate the principle in labor
laws that benefits already extended shall not be taken away
and that it would result in discrimination between the non-
intermittent and the intermittent workers of the petitioner-
company.
Issue:
Whether or not intermittent workers are entitled to
commutation of their unenjoyed sick leave benefits with pay.

WHEREFORE, premises considered, the petition Ratio Decidendi:

is DENIED. The Decision dated October 11, 2005, and the
Resolution dated July 13, 2006 of the Court of Appeals in A collective bargaining agreement (CBA), as used in Article 252
consolidated labor cases docketed as CA-G.R. SP No. 83831 of the Labor Code, refers to a contract executed upon request
and CA-G.R. SP No. 83657, are AFFIRMED. of either the employer or the exclusive bargaining
representative incorporating the agreement reached after
DAVAO INTEGRATED PORT STEVEDORING SERVICES,
negotiations with respect to wages, hours of work and all other
petitioner, vs. RUBEN V. ABARQUEZ, in his capacity as
terms and conditions of employment, including proposals for
an accredited Voluntary Arbitrator and THE
adjusting any grievances or questions arising under such
ASSOCIATION OF TRADE UNIONS (ATU-TUCP),
agreement.
respondents.
A CBA, as a labor contract within the contemplation of Article
G.R. No. 102132. March 19, 1993
1700 of the Civil Code of the Philippines which governs the
relations between labor and capital, is not merely contractual
ROMERO, J p:
in nature but impressed with public interest, thus, it must yield
to the common good. As such, it must be construed liberally
Facts:
rather than narrowly and technically, and the courts must
place a practical and realistic construction upon it, giving due
Petitioner Davao Integrated Port Stevedoring Services
consideration to the context in which it is negotiated and
(petitioner-company) and private respondent ATU-TUCP
purpose which it is intended to serve.
(Union) entered into a collective bargaining agreement (CBA)
It is thus erroneous for petitioner to isolate Section 1, Article
which, under Sections 1 and 3, Article VIII thereof, provide for
VIII of the 1989 CBA from the other related section on sick
sick leave with pay benefits each year to its employees who
leave with pay benefits, specifically Section 3 thereof, in its
have rendered at least one (1) year of service with the
attempt to justify the discontinuance or withdrawal of the
company, thus:
privilege of commutation or conversion to cash of the
"ARTICLE VIII
unenjoyed portion of the sick leave benefit to regular
Section 1. Sick Leaves — The Company agrees to
intermittent workers.
grant 15 days sick leave with pay each year to every
regular non-intermittent worker who already rendered
Ruling:
at least one year of service with the company.
However, such sick leave can only be enjoyed upon
WHEREFORE, in view of the foregoing, the petition is
certification by a company designated physician, and
DISMISSED. The award (decision) of public respondent dated
if the same is not enjoyed within one year period of
September 10, 1991 is hereby AFFIRMED. No costs.
the current year, any unenjoyed portion thereof, shall
be converted to cash and shall be paid at the end of
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,
the said one year period. And provided however, that
vs. THE NATIONAL LABOR RELATIONS COMMISSION,
only those regular workers of the company whose
ONG PENG, ET AL., respondents.,
work are not intermittent, are entitled to the herein
G.R. No. 100264-81, Jan 29, 1993
sick leave privilege.
xxx xxx xxx
GUTIERREZ, JR., J.
Section 3. — All intermittent field workers of the
company who are members of the Regular Labor Pool
Facts:
shall be entitled to vacation and sick leaves per year
of service with pay under the following schedule
November 14, 1986, private respondents filed with DOLE-
based on the number of hours rendered including
Daet, Camarines Norte, 17 individual complaints against
overtime, Republic Hardwood Inc. (RHI) for unpaid wages and
xxx xxx xxx separation pay. These complaints were thereafter endorsed to
The commutation of the unenjoyed portion of the sick leave Regional Arbitration Branch of the NLRC since the petitioners
with pay benefits of the intermittent workers or its conversion had already been terminated from employment.
to cash was, however, discontinued or withdrawn when RHI alleged that it had ceased to operate in 1983 due to the
petitioner-company under a new assistant manager, Mr. government ban against tree-cutting and that in May 24, 1981,
Benjamin Marzo (who replaced Mr. Cecilio Beltran, Jr. upon the its sawmill was totally burned resulting in enormous losses and
latter's resignation in June 1989), stopped the payment of its that due to its financial setbacks, RHI failed to pay its loan with
cash equivalent on the ground that they are not entitled to the the DBP. RHI contended that since DBP foreclosed its
said benefits under Sections 1 and 3 of the 1989 CBA. mortgaged assets on September 24,1985, then any
adjudication of monetary claims in favor of its former
The Union objected to the said discontinuance of commutation
or conversion to cash of the unenjoyed sick leave with pay

98
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
employees must be satisfied against DBP. Private respondent
impleaded DBP.
Labor Arbiter favored private respondents and held RHI and
DBP jointly and severally liable to private respondents. DBP
appealed to the NLRC. NLRC affirmed LA‘s judgment. DBP filed
M.R. but it was dismissed.
Issue:
Whether or not private respondents‘ separation pay should be
preferred than the DBP‘s lien over the RHI‘s mortgaged assets.
Ratio Decidendi:
Article 110 must be read in relation to the Civil Code
concerning the classification, concurrence and preference of
credits, which is application in insolvency proceedings where
the claims of all creditors, preferred or non-preferred, may be
adjudicated in a binding manner. Before the workers‘
preference provided by Article 110 may be invoked, there must
first be a declaration of bankruptcy or a judicial liquidation of
the employer‘s business.
NLRC committed grave abuse of discretion when it affirmed
the LA‘s ruling. DBP‘s lien on RHI‘s mortgaged assets, being a
mortgage credit, is a special preferred credit under Article
2242 of the Civil Code while the workers‘ preference is
an ordinary preferred credit under Article 2244.
A distinction should be made between a preference of credit
and a lien. A preference applies only to claims which do not
attach to specific properties. A lien creates a charge on a
particular property. The right of first preference as regards
unpaid wages recognized by Article 110 does not constitute a
lien on the property of the insolvent debtor in favor of workers.
It is but a preference of credit in their favor, a preference in
application. It is a method adopted to determine and specify
the order in which credits should be paid in the final
distribution of the proceeds of the insolvent‘s assets. It is a
right to a first preference in the discharge of the funds of the
judgment debtor.
Article 110 of the Labor Code does not create a lien in favor of
workers or employees for unpaid wages either upon all of the
properties or upon any particular property owned by their
employer. Claims for unpaid wages do not therefore fall at all
within the category of specially preferred claims established
under Articles 2241 and 2242 of the Civil Code, except to the
extent that such claims for unpaid wages are already covered
by Article 2241, (6)- (claims for laborers‘ wages, on the goods
manufactured or the work done); or by Article 2242,(3)-
(claims of laborers and other workers engaged in the
construction, reconstruction or repair of buildings, canals and
other works, upon said buildings, canals and other works.
Since claims for unpaid wages fall outside the scope of Article
2241 (6) and 2242 (3), and not attached to any specific
property, they would come within the category of ordinary
preferred credits under Article 2244.
Ruling:
WHEREFORE, the petition is hereby GRANTED. The assailed
decision of public respondent National Labor Relations
Commission dated April 15, 1991 and its resolution dated May
17, 1991 are SET ASIDE. The temporary restraining order
issued by the Court on July 29, 1991 is made PERMANENT.
A.N. BOLINAO, JR., JUAN A. AGSALON, JR., ZOSIMO L.
CARREON AND REYNOLD P. DANNUG, petitioners, vs.
HON. MANUEL S. PADOLINA, PHELPS DODGE (PHILS.)
INC., BANK OF AMERICA, AND DEPUTY SHERIFF
CARLOS G. MAOG, respondents.
G.R. No. 81415 June 6, 1990
PARAS, J.
99
Facts:
Petitioners A.N. Bolinao, Jr., Reynold P. Dannug, Juan A.
Agsalon, Jr. and Zosimo L. Carreon were all former employees
of Sabena Mining Corporation, which had a copper and gold
project in operation, located in New Bataan, Davao del Norte.
In 1982 and 1983 they were laid off without being recalled.
Petitioners filed a formal complaint for collection of unpaid
salaries, unused accrued vacation and sick leave benefits, 13th
month pay and separation pay before the National Labor
Relations Commission (NLRC).
A compromise agreement was entered into by the parties,
wherein petitioners were to be paid on a staggered basis the
collective amount of P385,583.95. The company faithfully
complied with the scheduled payments only up to March, 1985
because it ceased operations effective April 1, 1985. With this
development, petitioners moved for the issuance of a writ of
execution.
The Labor Arbiter issued a writ of execution against the
company to collect the balance of P311,580.14. On June 27,
1985 Deputy Sheriff Antonio P. Soriano garnished the
remaining amount of P150,279.64 in the savings account of
the company at the Development Bank of the Philippines
(DBP). However, the same amount was previously garnished
by two creditors of the company; namely, Bank of America and
Phelps Dodge (Phils.).
Issue:
Whether or not petitioners enjoy preferential right or claim
over the funds of Sabena Mining Corporation.
Ratio Decidendi:
Clear from the provisions of Article 110 of the Labor Code and
Section 10, Rule VIII, Book H of the Revised Rules and
Regulations Implementing the Labor Code, that a declaration
of bankruptcy or a judicial liquidation must be present before
the worker's preference may be enforced. Thus, it was held
that Article 110 of the Labor Code and its implementing rule
cannot be invoked absent a formal declaration of bankruptcy
or a liquidation order.
In the case at bar, there was no showing of any insolvency
proceeding or declaration of bankruptcy or judicial liquidation
that was being filed by Sabena Mining Corporation. It is only
an extra-judicial foreclosure that was being enunciated as
when DBP extra-judicially foreclosed the assets of Sabena
Mining Corporation. Conversely, to hold that Article 110 is also
applicable in extra-judicial proceedings would be putting the
worker in a better position than the State which could only
assert its own prior preference in case of ajudicial proceeding.
Article 110 must not be viewed in isolation and must always be
reckoned with the provisions of the Civil Code
Ruling:
PREMISES CONSIDERED, the petition is hereby DISMISSED for
lack of merit and the questioned Order dated January 5, 1988
issued by the respondent court is hereby AFFIRMED.
RTG Construction, Inc., petitioner vs. Roberto Facto,
respondent
GR No. 163872, Dec 21, 2009
PERALTA, J.
Facts:
Private respondent Roberto Facto was employed by RTG
Construction as helper mechanic. In 1985, he was promoted to
the position of junior mechanic. He was suspended on four
occasions because of various infractions ranging from
absenteeism to creating disturbance in the workplace.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
On August 10, 2000, Facto again received a Memorandum of
even date, this time informing him that he was terminated
from his employment effective that same day.
Facto filed a Complaint for illegal dismissal against RTG
Construction. He alleged in his Position Paper that his
termination was illegal, as the same was not based on just or
authorized cause. He also alleged that he was denied his right
to due process because he was not given the chance to explain
his side.
Issue:
Whether or not there was a violation of due process.
Ratio Decidendi:
Yes. There is a violation of due process.
Procedural due process in the dismissal of employees requires
notice and hearing. The employer must furnish the employee
two written notices before termination may be effected. The
first notice apprises the employee of the particular acts or
omissions for which his dismissal is sought, while the second
notice informs the employee of the employer's decision to
dismiss him. The requirement of a hearing, on the other hand,
is complied with as long as there is an opportunity to be
heard; an actual hearing need not necessarily be conducted.
In the present case, while petitioners complied with the second
notice, apprising Facto of petitioner's decision to terminate him
from his employment, the records are bereft of any evidence
to prove that there was compliance with the first notice as well
as with the requirement of a hearing.
Moreover, petitioner failed to afford Facto his right to be heard
in connection with the aforementioned charge. Section 2(d),
Rule 1, Book VI of the Omnibus Rules Implementing the Labor
Code states that:
Sec. 2. Security of Tenure. x x x
(d) In all cases of termination of employment, the following
standards of due process shall be substantially observed:
For termination of employment based on just causes as
defined in Article 282 of the Labor Code:
xxx xxx xxx
A written notice served on the employee specifying the
ground or grounds for termination, and giving said
(i)
employee reasonable opportunity within which to explain
his side.
A hearing or conference during which the employee
concerned, with the assistance of counsel if he so
(ii) desires, is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented
against him.
A written notice of termination served on the employee,
indicating that upon due consideration of all the
(iii)
circumstances, grounds have been established to justify
his termination.
Ruling:
WHEREFORE, the petition is PARTLY GRANTED. The Decision
of the Court of Appeals dated August 21, 2003 is MODIFIED by
deleting the award for backwages. In lieu thereof, petitioners
are ORDERED to pay respondent nominal damages in the
amount of Thirty Thousand Pesos (P30,000.00). In all other
respects, the assailed Decision and Resolution of the Court of
Appeals are AFFIRMED.
COCA-COLA BOTTLERS PHILIPPINES, INC., petitioner,
vs RICKY E. DELA CRUZ, ROLANDO M. GUASIS, MANNY
C. PUGAL, RONNIE L. HERMO, ROLANDO C. SOMERO,
JR., DIBSON D. DIOCARES, and IAN B. ICHAPARE,
respondents.
G.R. No. 184977, December 7, 2009
100
BRION, J.
Facts:
Respondents filed two separate complaints for regularization
with money claims against Coca-Cola Bottlers Philippines, Inc.
Before the Labor Arbiter, the respondents alleged that they are
route helpers assigned to work in the petitioner‘s trucks. They
go from the Coca-Cola sales offices or plants to customer
outlets; they were hired either directly by the petitioner or by
its contractors, but they do not enjoy the full remuneration,
benefits and privileges granted to the petitioner‘s regular sales
force.
They argued that the services they render are necessary and
desirable in the regular business of the petitioner. In defense,
the petitioner contended that it entered into contracts of
services with Peerless and Excellent Partners Cooperative, Inc.
(Excellent) to provide allied services; under these contracts,
Peerless and Excellent retained the right to select, hire,
dismiss, supervise, control and discipline and pay the salaries
of all personnel they assign to the petitioner; in return for
these services, Peerless and Excellent were paid a stipulated
fee.
The petitioner posited that there is no employer-employee
relationship between the company and the respondents and
the complaints should be dismissed for lack of jurisdiction on
the part of the NLRC. In reply, the respondents countered that
they worked under the control and supervision of the
company‘s supervisors who prepared their work schedules and
assignments. Peerless and Excellent, too, did not have
sufficient capital or investment to provide services to the
petitioner. The respondents thus argued that the petitioner‘s
contracts of services with Peerless and Excellent are in the
nature of "labor-only" contracts prohibited by law.
Issue:
Whether or not there was labor-only contracting.
Ratio Decidendi:
Yes. The contract between the principal and the contractor is
not the final word on how the contracted workers relate to the
principal and the purported contractor; the relationships must
be tested on the basis of how they actually operate. The
legitimate job contractor must have the capitalization and
equipment to undertake the sale and distribution of the
manufacturer‘s products, and must do it on its own using its
own means and selling methods.
Even before going into the realities of workplace operations,
the Court of Appeals found that the service contracts
themselves provide ample leads into the relationship between
the company, on the one hand, and Peerless and Excellent, on
the other. The Court of Appeals noted that both the Peerless
and the Excellent contracts show that their obligation was
solely to provide the company with ―the services of contractual
employees,‖ and nothing more. These contracted services
were for the handling and delivery of the company‘s products
and allied services. Following D.O. 18-02 and the contracts
that spoke purely of the supply of labor, the Court of Appeals
concluded that Peerless and Excellent were labor-only
contractors unless they could prove that they had the required
capitalization and the right of control over their contracted
workers.
The contractors were not independently selling and distributing
company products, using their own equipment, means and
methods of selling and distribution; they only supplied the
manpower that helped the company in the handing of products
for sale and distribution. In the context of D.O. 18-02, the
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

contracting for sale and distribution as an independent and Yes. In De Los Santos v. NLRC, the character of the business,
self-contained operation is a legitimate contract, but the pure i.e., whether as labor-only contractor or as job contractor,
supply of manpower with the task of assisting in sales and should be measured in terms of, and determined by, the
distribution controlled by a principal falls within prohibited criteria set by statute. The parties cannot dictate by the mere
labor-only contracting. Consequently, the contracted expedience of a unilateral declaration in a contract the
personnel, engaged in component functions in the main character of their business.
business of the company under the latter‘s supervision and
control, cannot but be regular company employees. The Court has observed that:
First, petitioners worked at LSC‘s premises, and nowhere else.
Ruling: Other than the provisions of the Agreement, there was no
WHEREFORE, premises considered, we hereby DENY the showing that it was BMSI which established petitioners‘
petition and accordingly AFFIRM the challenged decision and working procedure and methods, which supervised petitioners
resolution of the Court of Appeals in CA-G.R. SP No. 102988. in their work, or which evaluated the same. There was
Costs against the petitioner. absolute lack of evidence that BMSI exercised control over
them or their work.
EMMANUEL BABAS, DANILO T. BANAG, ARTURO V.
VILLARIN, SR., EDWIN JAVIER, SANDI BERMEO, REX Second, LSC was unable to present proof that BMSI had
ALLESA, MAXIMO SORIANO, JR., ARSENIO ESTORQUE, substantial capital. There was no proof pertaining to the
and FELIXBERTO ANAJAO, petitioners, vs LORENZO contractor‘s capitalization, nor to its investment in tools,
SHIPPING CORPORATION, respondent. equipment, or implements actually used in the performance or
completion of the job, work, or service that it was contracted
G.R. No. 186091, December 15, 2010
to render. What is clear was that the equipment used by BMSI
were owned by, and merely rented from, LSC.
NACHURA, J.
Third, petitioners performed activities which were
Facts:
directly related to the main business of LSC. The work of
petitioners as checkers, welders, utility men, drivers, and
Lorenzo Shipping Corporation (LSC) is a duly organized
mechanics could only be characterized as part of, or at least
domestic corporation engaged in the shipping industry. LSC
clearly related to, and in the pursuit of, LSC‘s business.
entered into a General Equipment Maintenance Repair and
Management Services Agreement (Agreement) with Best
Lastly, BMSI had no other client except for LSC, and neither
Manpower Services, Inc. (BMSI). Under the Agreement, BMSI
BMSI nor LSC refuted this finding, thereby bolstering the NLRC
undertook to provide maintenance and repair services to LSC‘s
finding that BMSI is a labor-only contractor.
container vans, heavy equipment, trailer chassis, and
generator sets. BMSI further undertook to provide checkers to
The CA erred in considering BMSI‘s Certificate of Registration
inspect all containers received for loading to and/or unloading
as sufficient proof that it is an independent contractor.
from its vessels.
Jurisprudence states that a Certificate of Registration issued by
the Department of Labor and Employment is not conclusive
Simultaneous with the execution of the Agreement, LSC leased
evidence of such status. The fact of registration simply
its equipment, tools, and tractors to BMSI. The period of lease
prevents the legal presumption of being a mere labor-only
was coterminous with the Agreement.
contractor from arising.
BMSI then hired petitioners on various dates to work at
Ruling:
LSC as checkers, welders, utility men, clerks, forklift operators,
WHEREFORE, the petition is GRANTED. The Decision and the
motor pool and machine shop workers, technicians, trailer
Resolution of the Court of Appeals in CA-G.R. SP. No. 103804
drivers, and mechanics.
are REVERSED and SET ASIDE. Petitioners Emmanuel Babas,
Danilo T. Banag, Arturo V. Villarin, Sr., Edwin Javier, Sandi
In September 2003, petitioners filed with the Labor Arbiter
Bermeo, Rex Allesa, and Arsenio Estorque are declared regular
(LA) a complaint for regularization against LSC and BMSI. On
employees of Lorenzo Shipping Corporation. Further, LSC is
October 1, 2003, LSC terminated the Agreement, effective
ordered to reinstate the seven petitioners to their former
October 31, 2003. Consequently, petitioners lost their
position without loss of seniority rights and other privileges,
employment.
and to pay full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, computed from the time
BMSI asserted that it is an independent contractor. It averred
compensation was withheld up to the time of actual
that it was willing to regularize petitioners; however, some of
reinstatement.
them lacked the requisite qualifications for the job. LSC
No pronouncement as to costs.
averred that petitioners were employees of BMSI and were
assigned to LSC by virtue of the Agreement. BMSI is an
AVELINO S. ALILIN v. PETRON CORPORATION
independent job contractor with substantial capital or
GR No. 177592, Jun 09, 2014
investment in the form of tools, equipment, and machinery
necessary in the conduct of its business. The Agreement
DEL CASTILLO, J.:
between LSC and BMSI constituted legitimate job contracting.
Thus, petitioners were employees of BMSI and not of LSC.
FACTS:
The Labor Arbiter dismissed petitioners‘ complaint on
Petron is a domestic corporation engaged in the oil
the ground that petitioners were employees of BMSI. It was
business. It owns several bulk plants in the country for
BMSI which hired petitioners, paid their wages, and exercised
receiving, storing and distributing its petroleum products.
control over them. The NLRC reversed the Labor Arbiter.
In 1968, Romualdo D. Gindang Contractor started recruiting
laborers for fielding to Petron's Mandaue Bulk Plant. His
Issue:
son took over the business and continued to provide
Whether or not respondent was engaged in labor-only
manpower services to Petron. On June 1, 2000, Petron and
contracting.
RDG entered into a Contract for Services for the period from
June 1, 2000 to May 31, 2002, whereby RDG undertook to
Ratio Decidendi:
provide Petron with janitorial, maintenance, tanker receiving,

101
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
packaging and other utility services in its Mandaue Bulk
Plant. This contract was extended on July 31, 2002 and
further extended until September 30, 2002. Upon expiration
thereof, no further renewal of the service contract was done.
Alleging that they were barred from continuing their services
on October 16, 2002, filed a Complaint[10] for illegal dismissal,
underpayment of wages, damages and attorney's fees against
Petron and RDG on November 12, 2002. Petitioners did not
deny that RDG hired them and paid their salaries. They,
however, claimed that the latter is a labor-only contractor,
which merely acted as an agent of Petron, their true
employer.
They asseverated that their jobs, which are directly related to
Petron's business, entailed them to work inside the premises of
Petron using the required equipment and tools furnished by it
and that they were subject to Petron's supervision.
RDG alleged that Petron directly supervised their activities;
they performed jobs necessary and desirable to Petron's
business; Petron provided petitioners with supplies, tools and
equipment used in their jobs; and that petitioners' workplace
since the start of their employment was at Petron's bulk plant
in Mandaue City. RDG denied liability over petitioners' claim of
illegal dismissal and further argued that Petron cannot
capitalize on the service contract to escape liability.
Petron, on the other hand, maintained that RDG is an
independent contractor and the real employer of the
petitioners. It was RDG which hired and selected petitioners,
paid their salaries and wages, and directly supervised their
work
ISSUE:
Whether RDG is a legitimate job contractor
RATIO DECIDENDI
Generally, the contractor is presumed to be a labor-only
contractor, unless such contractor overcomes the burden of
proving that it has the substantial capital, investment, tools
and the like. However, where the principal is the one claiming
that the contractor is a legitimate contractor, as in the present
case, said principal has the burden of proving that supposed
status. It is thus incumbent upon Petron, and not upon
petitioners as Petron insists, to prove that RDG is an
independent contractor. RDG establish does not have
sufficient working capital to meet the requirements of its
service contract.
RULING:
Petron failed to discharge the burden of proving that RDG is a
legitimate contractor. Hence, the presumption that RDG is a
labor-only contractor stands.
SUPERIOR PACKAGING CORPORATION V. ARNEL
BALAGSAY, ET AL.
G.R. NO. 178909 OCTOBER 10, 2012
REYES, J.
FACTS:
The petitioner engaged the services of Lancer to provide
reliever services to its business, which involves the
manufacture and sale of commercial and industrial corrugated
boxes. According to petitioner, the respondents were engaged
for four (4) months from February to June 1998 and their
tasks included loading, unloading and segregation of
corrugated boxes. They filed a complaint filed against the
petitioner and its President for underpayment of wages, non-
payment of premium pay for worked rest, overtime pay and
non-payment of salary, the Department of Labor and
Employment (DOLE). Petitioner averred that respondents are
102
not its employees but of Lancer and that they pay Lancer in
lump sum for the services rendered. petitioner objects to the
finding that it is engaged in labor-only contracting.
ISSUE:
Whether Lancer was an agent of the Petitioner
RATIO DECIDENDI:
Lancer was a "labor only" contractor. The ratio of Lancers
authorized capital stock of P 400,000.00 as against its
subscribed and paid-up capital stock of P 25,000.00 shows the
inadequacy of its capital investment necessary to maintain its
day-to-day operations. And while the Court does not set an
absolute figure for what it considers substantial capital for an
independent job contractor, it measures the same against the
type of work which the contractor is obligated to perform for
the principal.27ςrνll Moreover, the nature of respondents
work was directly related to the petitioners business.
The marked disparity between the petitioners actual
capitalization (P25,000.00) and the resources needed to
maintain its business, supports the finding that Lancer was,
indeed, a labor-only contractor.
RULING:
Lancer was "labor only" contractor. WHEREFORE, the petition
for review is DENIED.
TEMIC AUTOMOTIVE PHILS. VS. TEMIC AUTOMOTIVE
PHILS. INC. EMPLOYEE UNION-FFW
G.R. NO. 186965 DECEMBER 23, 2009
BRION, J.:
FACTS:
The petitioner is a corporation engaged in the manufacture of
electronic brake systems and comfort body electronics for
automotive vehicles. Respondent Temic Automotive
Philippines, Inc. Employees Union-FFW (union) is the exclusive
bargaining agent of the petitioner's rank-and-file
employees. On May 6, 2005, the petitioner and the union
executed a collective bargaining agreement (CBA) for the
period January 1, 2005 to December 31, 2009.
By practice established since 1998, the petitioner contracts out
some of the work in the warehouse department, specifically
those in the receiving and finished goods sections, to three
independent service providers or forwarders. The regular
employees of the petitioner and those of the forwarders share
the same work area and use the same equipment, tools and
computers all belonging to the petitioner.
This outsourcing arrangement gave rise to a union grievance
on the issue of the scope and coverage of the collective
bargaining unit, specifically to the question of whether or not
the functions of the forwarders employees are functions being
performed by the regular rank-and-file employees covered by
the bargaining unit
The union thus demanded that the forwarders' employees be
absorbed into the petitioner's regular employee force and be
given positions within the bargaining unit. The petitioner, on
the other hand, on the premise that the contracting
arrangement with the forwarders is a valid exercise of its
management prerogative, posited that the union's position is a
violation of its management prerogative to determine who to
hire and what to contract out, and that the regular rank-and-
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
file employees and their forwarders employees serving as its
clerks, material handlers, system encoders and general clerks
do not have the same functions as regular company
employees.
ISSUE:
Whether the contracting out arrangement is valid
RATIO DECIDENDI:
Yes. the petitioner was within its right in entering the
forwarding agreements with the forwarders as an exercise of
its management prerogative. The petitioner's declared
objective for the arrangement is to achieve greater economy
and efficiency in its operations a universally accepted business
objective and standard that the union has never questioned. In
Meralco v. Quisumbing,[25] we joined this universal
recognition of outsourcing as a legitimate activity when we
held that a company can determine in its best judgment
whether it should contract out a part of its work for as long as
the employer is motivated by good faith; the contracting is not
for purposes of circumventing the law; and does not involve or
be the result of malicious or arbitrary action.
The forwarding arrangement complies with the requirements
of Article 106[26] of the Labor Code and its implementing
rules.[27] To reiterate, no evidence or argument questions the
companys basic objective of achieving greater economy and
efficiency of operations. This, to our mind, goes a long way to
negate the presence of bad faith.
From the perspective of the union in the present case, we note
that the forwarding agreements were already in place when
the current CBA was signed.[30] In this sense, the union
accepted the forwarding arrangement, albeit implicitly, when it
signed the CBA with the company.
RULING:
Wherefore, petition granted.
ALIVIADO ET. AL., VS. PROCTER AND GAMBLE
G.R. NO. 160506 JUNE 6, 2011
DEL CASTILLO, J.:
FACTS:
P&G is principally engaged in the manufacture and production
of different consumer and health products, which it sells on a
wholesale basis to various supermarkets and distributors.8 To
enhance consumer awareness and acceptance of the products,
P&G entered into contracts with Promm-Gem and SAPS for the
promotion and merchandising of its products.
Petitioners worked as merchandisers of P&G from various
dates. They all individually signed employment contracts with
either Promm-Gem or SAPS for periods of more or less five
months at a time.5 They were assigned at different outlets,
supermarkets and stores where they handled all the products
of P&G. They received their wages from Promm-Gem or SAPS.
SAPS and Promm-Gem imposed disciplinary measures on
erring merchandisers for reasons such as habitual
absenteeism, dishonesty or changing day-off without prior
notice.
Petitioners assert that Promm-Gem and SAPS are labor-only
contractors providing services of manpower to their client.
They claim that the contractors have neither substantial capital
nor tools and equipment to undertake independent labor
contracting. Petitioners insist that since they had been
engaged to perform activities which are necessary or desirable
103
in the usual business or trade of P&G, then they are its regular
employees.
P&G also contends that the Labor Code neither defines nor
limits which services or activities may be validly outsourced. It
insists that the determination of whether to engage the
services of a job contractor or to engage in direct hiring is
within the ambit of management prerogative.
ISSUE:
Whether P&G is the employer of petitioners
RATIO DECIDENDI:
In the instant case, the financial statements26 of Promm-Gem
show that it
has authorized capital stock of ₱1 million and a paid-in capital,
or capital available for operations. Promm-Gem has also
proven that it maintained its own warehouse and office space
with a floor area of 870 square meters. It also had under its
name three registered vehicles which were used for its
promotional/merchandising business. Promm-Gem also has
other clients aside from P&G. Under the circumstances, we find
that Promm-Gem has substantial investment which relates to
the work to be performed.
The records also show that Promm-Gem supplied its
complainant-workers with the relevant materials, such as
markers, tapes, liners and cutters, necessary for them to
perform their work. Promm-Gem also issued uniforms to them.
It is also relevant to mention that Promm-Gem already
considered the complainants working under it as its regular,
not merely contractual or project, employees.
Under the circumstances, Promm-Gem cannot be considered
as a labor-only contractor. We find that it is a legitimate
independent contractor.
RULING:
"Where ‗labor-only‘ contracting exists, the Labor Code itself
establishes an employer-employee relationship between the
employer and the employees of the ‗labor-only‘ contractor
Consequently, the following petitioners, having been recruited
and supplied by SAPS41 -- which engaged in labor-only
contracting -- are considered as the employees of P&G
The following petitioners, having worked under, and been
dismissed by Promm-Gem, are considered the employees of
Promm-Gem, not of P&G.
GARDEN OF MEMORIES V. NLRC
G.R. NO. 160278 FEBRUARY 8, 2012
MENDOZA, J.:
FACTS:
Petitioner Garden of Memories is engaged in the business of
operating a memorial park situated at Calsadang Bago,
Pateros, Metro-Manila and selling memorial Plan and services.
Respondent Cruz, on the other hand, worked at the Garden of
Memories Memorial Park as a utility worker from August 1991
until her termination in February 1998.
Upon motion of Garden of Memories, Requiño was impleaded
as respondent on the alleged ground that she was its service
contractor and the employer of Cruz.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Cruz argued that as a regular employee of the Garden of
Memories, she could not be terminated without just or valid
cause.
Garden of Memories denied liability for the claims of Cruz and
asserted that she was not its employee but that of Requiño, its
independent service contractor, who maintained the park for a
contract price. Garden of Memories claimed that Requiño was
a service contractor who carried an independent business and
undertook the contract of work on her own account, under her
own responsibility and according to her own manner and
method, except as to the results thereof.
ISSUE:
Whether Raquino was an independent service contractor
RATIO DECIDENDI:
Both the capitalization requirement and the power of control
on the part of Requiño are wanting. Requiño was not a
licensed contractor and had no substantial capital or
investment in the form of tool, equipment and work premises,
among others.
Generally, the presumption is that the contractor is a labor-
only contracting unless such contractor overcomes the burden
of proving that it has the substantial capital, investment, tools
and the like.17 In the present case, though Garden of
Memories is not the contractor, it has the burden of proving
that Requiño has sufficient capital or investment since it is
claiming the supposed status of Requiño as independent
contractor. 18 Garden of Memories, however, failed to adduce
evidence purporting to show that Requiño had sufficient
capitalization. Neither did it show that she invested in the form
of tools, equipment, machineries, work premises and other
materials which are necessary in the completion of the service
contract.
The requirement of the law in determining the existence of
independent contractorship is that the contractor should
undertake the work on his own account, under his own
responsibility, according to his own manner and method, free
from the control and direction of the employer except as to the
results thereof.21 In this case, however, the Service Contract
Agreement clearly indicates that Requiño has no discretion to
determine the means and manner by which the work is
performed. Rather, the work should be in strict compliance
with, and subject to, all requirements and standards of Garden
of Memories.
RULING:
WHEREFORE, the petition is DENIED
NORKIS TRADING V. BUENAVISTA ET. AL.,
G.R. NO. 182018OCTOBER 10, 2012
REYES, J.:
FACTS:
The petition stems from an amended complaint for illegal
suspension, illegal dismissal, unfair labor practice and other
monetary claims filed with the NLRC against Norkis Trading
and Panaghiusa sa Kauswagan Multi-Purpose Cooperative
(PASAKA).
The respondents were hired by Norkis Trading, a domestic
corporation engaged in the business of manufacturing and
marketing of Yamaha motorcycles and multi-purpose vehicles,
on separate dates and for various positions.
Although they worked for Norkis Trading as skilled workers
they were not treated as regular employees by Norkis Trading.
104
Instead, they were regarded by Norkis Trading as members of
PASAKA, a cooperative organized under the Cooperative Code
of the Philippines, and which was deemed an independent
contractor that merely deployed the respondents to render
services for Norkis Trading.4 The respondents nonetheless
believed that they were regular employees of Norkis Trading.
The materials and supplies used by complainants in their work
are supplied by respondent Norkis Trading. Despite having
served respondent Norkis Trading for many years and
performing the same functions as regular employees,
complainants were not accorded regular status. It was made to
appear that complainants are not employees of said company
but that of respondent PASAKA.
The filing of the complaint for labor-only contracting allegedly
led to the suspension of the respondents‘ membership with
PASAKA.
the respondents were to report back to work but during the
hearing in their NLRC case, they were informed by PASAKA
that they would be transferred to Norkis Tradings‘ sister
company, Porta Coeli Industrial Corporation (Porta Coeli), as
washers of Multicab vehicles. The respondents opposed the
transfer as it would allegedly result in a change of employers,
from Norkis Trading to Porta Coeli. The respondents also
believed that the transfer would result in a demotion since
from being skilled workers in Norkis Trading, they would be
reduced to being utility workers. both Norkis Trading and
PASAKA claimed that the respondents were not employees of
Norkis Trading. They insisted that the respondents were
members of PASAKA, which served as an independent
contractor that merely supplied services to Norkis International
Co., Inc. (Norkis International) pursuant to a job contract16
which PASAKA and Norkis International.
ISSUE:
PASAKA is a mere labor-only contractor
RATIO DECIDENDI:
Yes. It is therefore evident that herein respondents are
engaged in "labor-only" contracting as defined in Art. 106 of
the Labor Code.
First. PASAKA evidently lacked substantial capital or investment
required from legitimate job contractors, as reflected in its
Financial Statements and Supplementary Schedules evidence
which consisted of pictures showing machineries and
equipment which were owned by and located at the premises
of petitioner NORKIS TRADING
Second. PASAKA likewise did not carry out an independent
business from NORKIS TRADING.
Third. Private respondents performed activities directly related
to the principal business of NORKIS TRADING. Private
respondents‗ functions therefore are directly related and vital
to NORKIS TRADING‘s business of manufacturing of Yamaha
motorcycles.
Ruling:
WHEREFORE, premises considered, the petition is DENIED.
RAMY GALLEGO, petitioner vs. BAYER PHILIPPINES,
INC., DANPIN GUILLERMO, PRODUCT IMAGE
MARKETING, INC., and EDGARDO BERGONIA,
respondents
G.R. No. 179807 July 31, 2009
CARPIO MORALES, J.:
FACTS:
Ramy Gallego was a crop protection technician to promote and
market BAYER products. Petitioner‘s employment with BAYER
came to a halt, and sought employment with another
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
company. BAYER reemployed petitioner through PRODUCT
IMAGE, Respondent Bergonia being President and General
Manager. In 2001, he was directed by Pet Pascual, the newly
assigned BAYER sales representative, to submit a resignation
letter, but he refused; In 2002, he was summoned by his
immediate supervisors and was ordered to quit his
employment to which he refused. He then received a
memorandum that his area of responsibility would be
transferred to Luzon, of which memorandum he sought
reconsideration but to no avail; and that Guillermo and
Bergonia spread rumors that reached the dealers in Antique to
the effect that he was not anymore connected with BAYER and
any transaction with him would no longer be honored.
He filed a complaint for illegal dismissal with NLRC against
respondents BAYER, Guillermo, PRODUCT IMAGE, and
Bergonia. They denied the existence of an employer-employee
relationship between BAYER and petitioner, that his work was
occasioned by Contract of Promotional Services had executed
with PRODUCT IMAGE whereby PRODUCT IMAGE was to
promote and market BAYER products on its own account and
in its own manner and method. That as an independent
contractor, PRODUCT IMAGE retained the exclusive power of
control over petitioner as it assigned full-time supervisors to
exercise control and supervision over its employees assigned at
BAYER. They alleged that petitioner was a field worker who
had no fixed hours and worked under minimal supervision, his
performance being gauged only by his accomplishment reports
duly certified to by BAYER acting as his de
facto supervisor; that petitioner was not dismissed, but went
on official leave, and stopped reporting for work
thereafter; and that petitioner was supposed to have been
reassigned to South Luzon for personnel reorganization
program, but he likewise failed to report to his new work
station. LA held respondents guilty of illegal dismissal
ISSUE:
Whether or not, PRODUCT IMAGE is a labor-only contactor and
BAYER should be deemed petitioners‘ principal employer; and
whether petitioner was illegally dismissed from his
employment.
RATIO DECIDENDI:
No. the Court finds substantial evidence to support the finding
of the NLRC that PRODUCT IMAGE is a legitimate job
contractor. Permissible job contracting or subcontracting refers
to an arrangement whereby a principal agrees to farm out with
a contractor or subcontractor the performance of a specific
job, work, or service within a definite or predetermined period,
regardless of whether such job, work or, service is to be
performed or completed within or outside the premises of the
principal. Under this arrangement, the following conditions
must be met: (a) the contractor carries on a distinct and
independent business and undertakes the contract work on his
account under his own responsibility according to his own
manner and method, free from the control and direction of his
employer or principal in all matters connected with the
performance of his work except as to the results thereof; (b)
the contractor has substantial capital or investment; and
(c) the agreement between the principal and contractor or
subcontractor assures the contractual employees entitlement
to all labor and occupational safety and health standards, free
exercise of the right to self-organization, security of tenure,
and social welfare benefits.
The existence of an employer-employee relationship is
determined on the basis of four standards, namely: (a) the
manner of selection and engagement of the putative
employee; (b) the mode of payment of wages; (c) the
presence or absence of power of dismissal; and (d) the
presence or absence of control of the putative employees
105
conduct. Most determinative among these factors is the so-
called control test.
The presence of the first requisite which refers to selection and
engagement is evidenced by a document entitled Job Offer,
whereby PRODUCT IMAGE offered to hire petitioner as crop
protection technician. On the second requisite regarding the
payment of wages, it was PRODUCT IMAGE that paid the
wages and other benefits of petitioner, pursuant to the
stipulation in the contract between PRODUCT IMAGE and
BAYER that BAYER shall pay PRODUCT IMAGE an amount
based on services actually rendered without regard to the
number of personnel employed by PRODUCT IMAGE; and that
PRODUCT IMAGE shall faithfully comply with the provisions of
the Labor Code and hold BAYER free and harmless from any
claim of its employees arising from the contract. As to the third
requisite which relates to the power of dismissal, and the
fourth requisite which relates to the power of control, both
powers are vested in PRODUCT IMAGE. The Contract of
Promotional Services provides that PRODUCT IMAGE shall have
the power to discipline its employees assigned at BAYER, such
that no control whatsoever shall be exercised by BAYER over
those personnel on the manner and method by which they
perform their duties, and that all directives, complaints, or
observations of BAYER relating to the performance of the
employees of PRODUCT IMAGE shall be addressed to the
latter. The only control measure retained by BAYER over
petitioner was to act as his de facto supervisor. PRODUCT
IMAGE is ineluctably the employer of petitioner.
SC held no evidence that petitioner was dismissed. What it
finds is that petitioner unilaterally stopped reporting for work
before filing a complaint for illegal dismissal. While in cases of
illegal dismissal, the employer bears the burden of proving that
the dismissal is for a valid or authorized cause, the employee
must first establish by substantial evidence the fact of
dismissal.
RULING:
WHEREFORE, the petition is, in light of the
foregoing, DENIED.
COCA-COLA BOTTLERS PHILS., INC., Petitioner vs ALAN
M. AGITO, REGOLO S. OCA III, ERNESTO G. ALARIAO,
JR., ALFONSO PAA, JR., DEMPSTER P. ONG, URRIQUIA
T. ARVIN, GIL H. FRANCISCO, and EDWIN M. GOLEZ,
Respondents.
G.R. No. 179546 February 13, 2009
CHICO-NAZARIO, J.:
FACTS:
In 2002, respondents filed before the NLRC two complaints
against petitioner, Interserve, Peerless Integrated Services,
Inc., Better Builders, Inc., and Excellent Partners, Inc. for
reinstatement with backwages, regularization, nonpayment of
13th month pay, and damages. Respondents alleged that they
were salesmen assigned at the Lagro Sales Office, but were
not regularized. Their employment was terminated without just
cause and due process. LA held that respondents were
employees of Interserve and not of petitioner. LA placed
considerable weight on the fact that Interserve was registered
with the DOLE as an independent job contractor. It was
Interserve that kept and maintained respondent‘s employee
records, including their Personal Data Sheets; Contracts of
Employment; and remittances to SSS, Medicare and Pag-ibig
Fund, thus, further supporting the LA finding that respondents
were employees of Interserve. She ruled that the circulars,
rules and regulations which petitioner issued from time to time
to respondents were not indicative of control as to make the
latter its employees.
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
NLRC affirmed LA Decision and pronounced that no employer-
employee relationship existed between petitioner and
respondents. It reiterated the findings that Interserve was an
independent contractor as evidenced by its substantial assets
and registration with the DOLE. CA reversed the NLRC
decision. The CA deemed that the respondents, who were
tasked to deliver, distribute, and sell Coca-Cola products,
carried out functions directly related and necessary to the main
business of petitioner. The appellate court finally noted that
certain provisions of the Contract of Service between petitioner
and Interserve suggested that the latters undertaking did not
involve a specific job, but rather the supply of manpower.
ISSUE:
Whether or not, Interserve is a legitimate job contractor.
RATIO DECIDENDI:
No, Intersevere is engaged in prohibited, labor-contracting.
Article 106. Contractor or subcontractor. - Whenever an
employer enters into a contract with another person for the
performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code. In the event
that the contractor or subcontractor fails to pay the wages of
his employees in accordance with this Code, the employer shall
be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him. There
is labor-only contracting where the person supplying workers
to an employee does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises,
among others, and the workers recruited and placed by such
persons are performing activities which are directly related to
the principal business of such employer.
In such cases, the person or intermediary shall be considered
merely as an agent of the employer who shall be responsible
to the workers in the same manner and extent as if the latter
were directly employed by him. Rules Implementing Articles
106-109 of the Labor Code, as amended, provides the
guidelines in determining whether labor-only contracting exists
provides in Section 5 that Prohibition against labor-only
contracting. Labor-only contracting is hereby declared
prohibited. For this purpose, labor-only contracting shall refer
to an arrangement where the contractor or subcontractor
merely recruits, supplies, or places workers to perform a job,
work or service for a principal, and any of the following
elements are [is] present: i) The contractor or subcontractor
does not have substantial capital or investment which relates
to the job, work, or service to be performed and the
employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly
related to the main business of the principal; or ii) The
contractor does not exercise the right to control the
performance of the work of the contractual employee.
Interserve did not have substantial capital or investment in the
form of tools, equipment, machineries, and work premises;
and respondents, its supposed employees, performed work
which was directly related to the principal business of
petitioner. Interserve did not obligate itself to perform an
identifiable job, work, or service for petitioner, but merely
bound itself to provide the latter with specific types of
employees. These contractual provisions strongly indicated
that Interserve was merely a recruiting and manpower agency
providing petitioner with workers performing tasks directly
related to the latters principal business.
With the finding that Interserve was engaged in prohibited
labor-only contracting, petitioner shall be deemed the true
employer of respondents. As regular employees of petitioner,
respondents cannot be dismissed except for just or authorized
106
causes, none of which were alleged or proven to exist in this
case, the only defense of petitioner against the charge of
illegal dismissal being that respondents were not its
employees. Records also failed to show that petitioner afforded
respondents the twin requirements of procedural due
process, i.e., notice and hearing, prior to their
dismissal. Respondents were not served notices informing
them of the particular acts for which their dismissal was
sought. Nor were they required to give their side regarding the
charges made against them. Certainly, the respondents
dismissal was not carried out in accordance with law and,
therefore, illegal.[48]
Given that respondents were illegally dismissed by petitioner,
they are entitled to reinstatement, full backwages, inclusive of
allowances, and to their other benefits or the monetary
equivalents thereof computed from the time their
compensations were withheld from them up to the time of
their actual reinstatement, as mandated under Article 279 of
the Labor Code,.
RULING:
IN VIEW OF THE FOREGOING, the instant Petition
is DENIED. The Court AFFIRMS WITH MODIFICATION the
Decision dated 19 February 2007 of the Court of Appeals in
CA-G.R. SP No. 85320. The Court DECLARES that respondents
were illegally dismissed and, accordingly, ORDERS petitioner to
reinstate them without loss of seniority rights, and to pay them
full back wages computed from the time their compensation
was withheld up to their actual reinstatement. Costs against
the petitioner.
MANILA MANDARIN EMPLOYEES UNION, petitioner,
vs. NATIONAL LABOR RELATIONS COMMISSION,
Second Division, and the MANILA MANDARIN
HOTEL, respondents.
G.R. No. 108556. November 19, 1996
NARVASA, C.J.:
FACTS:
In 1986, the Manila Mandarin Employees Union was an
exclusive bargaining agent of MANDARIN filed with the NLRC
Arbitration Branch a complaint in its members behalf to compel
MANDARIN to pay the salary differentials of the individual
employees concerned because of wage distortions in their
salary structure allegedly created by the upward revisions of
the minimum wage pursuant to various Presidential Decrees
and Wage Orders, and the failure of MANDARIN to implement
the corresponding increases in the basic salary rate of newly-
hired employees. LA ruled in favor of the UNION, holding that
there were in fact wage distortions entitling its members to
salary adjustments.
ISSUE:
Whether or not a wage distortion exists as a consequence of
the grant of a wage increase to employees
RATIO DECIDENDI:
No wage distortion. Upon the enactment of R.A. No. 6727
(Wage Rationalization Act, amending, among others, Article
124 of the Labor Code), that the term wage distortion came to
be explicitly defined as a situation where an increase in
prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation. The issue of
whether or not a wage distortion exists as a consequence of
the grant of a wage increase to certain employees, is a
question of fact; and as a rule, factual findings in labor cases,
where grounded on substantial evidence. It indeed appears
that the clear mandate of those issuances was merely to
increase the prevailing minimum wages of particular employee
groups. There were no across-the-board increases to all
employees; increases were required only as regards those
specified therein. It was therefore incorrect for the UNION to
claim that all its members became automatically entitled to
across-the-board increases upon the effectivity of the Decrees
and Wage Orders in question. And even if there were wage
distortions, which is not the case here, the appropriate remedy
thereunder prescribed is for the employer and the union to
negotiate to correct them; or, if the dispute be not thereby
resolved, to thresh out the controversy through the grievance
procedure in the collective bargaining agreement, or through
conciliation or arbitration.
A review of the records convinces this Court that respondent
NLRC committed no grave abuse of discretion in holding that
no wage distortion was demonstrated by the UNION. It was, to
be sure, incumbent on the UNION to prove by substantial
evidence its assertion of the existence of a wage distortion. It
presented no such evidence to establish, as required by the
law, what, if any, were the designed quantitative differences in
wage or salary rates between employee groups, and if there
were any severe contractions or elimination of these
quantitative differences.
The Court agrees that the claimed wage distortion was actually
a result of the UNIONS failure to appreciate various
circumstances relating to the employment of the thirteen
employees.
Neither did respondent Commission gravely abuse its discretion
in ruling against the UNION on the issue of underpayment of
wages. A comparative analysis of the wages of the Hotels
employees from 1978 to 1984 vis a vis the minimum wages
fixed by law for the same period reveals that at no time during
the said period was there any underpayment of wages by the
respondent Hotel. On the contrary, the prevailing monthly
salaries of the subject hotel employees appear to be and
above the minimum amounts required under the applicable
Presidential Decrees and Wage Orders.
RULING:
WHEREFORE, the assailed Decision of respondent
Commission promulgated on September 11, 1992 -- reversing
the judgment of the Labor Arbiter and dismissing the UNIONS
complaint - - being based on substantial evidence and in
accord with applicable laws and jurisprudence, as well as said
Commissions Resolution dated November 24, 1992 -- denying
reconsideration -- are hereby AFFIRMED in toto.
METROPOLITAN BANK and TRUST COMPANY,
Petitioner, vs NATIONAL LABOR RELATIONS
COMMISSION, FELIPE A. PATAG and BIENVENIDO C.
FLORA, Respondents.
G.R. No. 152928 June 18, 2009
LEONARDO-DE CASTRO, J.:
FACTS:
Respondents Patag and Flora were former employees of
Metrobank. Both respondents availed of the banks compulsory
retirement plan. When a new negotiations were on-going
between Metrobank and its rank and file employees. Patag and
Flora wrote a letter to the bank requesting that his retirement
benefits be computed at the new rate should there be an
increase in anticipation of possible changes in officers benefits
after the signing of the new CBA with the rank and
107
file. Metrobank did not reply to their requests. Metrobank‘s
First Vice-President Paul Lim, Jr. informed Patag and Flora of
their ineligibility to the improved officers benefits as they had
already ceased their employment and were no longer officers
of the bank. Patag and Flora filed with LA their consolidated
complaint against Metrobank for underpayment of retirement
benefits and damages, asserting that pursuant to the 1998
Officers Benefits Memorandum, they were entitled to additional
retirement benefits. LA dismissed the complaint of Patag and
Flora. NLRC partially granted the appeal and directed
Metrobank to pay Patag and Flora their unpaid beneficial
improvements under the 1998 Officers Benefits Memorandum.
ISSUE:
Whether or not, respondents can still recover higher benefits
under the 1998 Officers Benefits Memorandum despite the fact
that they have compulsorily retired prior to the issuance of said
memorandum and did not meet the condition therein requiring
them to be employed.
RATIO DECIDENDI:
No. To be considered a company practice, the giving of the
benefits should have been done over a long period of time,
and must be shown to have been consistent and
deliberate. The test or rationale of this rule on long
practice requires an indubitable showing that the employer
agreed to continue giving the benefits knowing fully well that
said employees are not covered by the law requiring payment
thereof.
Petitioner Metrobank favorably adjusted its officers benefits,
including retirement benefits, after the approval of each CBA
with the rank and file employees, to be effective every January
1st of the same year as the CBAs approval, and without any
condition regarding the date of employment of the officer,
from 1986 to 1997 or for about eleven (11) years.
It is the jurisprudential rule that where there is an established
employer practice of regularly, knowingly and voluntarily
granting benefits to employees over a significant period of
time, despite the lack of a legal or contractual obligation on
the part of the employer to do so, the grant of such benefits
ripens into a vested right of the employees and can no longer
be unilaterally reduced or withdrawn by the employer.
When Metrobank opted to impose a new condition in its
Officers Benefits Memorandum dated June 10, 1998, it already
had knowledge of respondents requests. Indeed, the
imposition of the said condition shortly after respondents made
their requests is suspicious, to say the least. Such conduct on
the part of Metrobank deserves no sympathy from this Court.
It is a time-honored rule that in controversies between a
laborer and his master, doubts reasonably arising from the
evidence or in the interpretation of agreements and writings
should be resolved in the formers favor. The policy is to extend
the applicability to a greater number of employees who can
avail of the benefits under the law, which is in consonance
with the avowed policy of the State to give maximum aid and
protection to labor. This principle gives us even greater reason
to affirm the findings of the CA.
RULING:
WHEREFORE, the petition for review is hereby DENIED. The
assailed decision and resolution of the CA in CA-G.R. No.
63144 are hereby AFFIRMED.
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE
TRADE UNIONS, petitioner, vs. NATIONAL LABOR
RELATIONS COMMISSION and BANKARD,
INC., respondents.
G.R. No. 140689. February 17, 2004
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
CARPIO MORALES, J.:
FACTS:
Bankard classifies its employees by levels, to wit: Level I, Level
II, Level III, Level IV, and Level V. On May 28, 1993, its Board
of Directors approved a New Salary Scale for the purpose of
making its hiring rate competitive in the industry‘s labor
market. The New Salary Scale increased the hiring rates of
new employees by P900.00. Accordingly, the salaries of
employees who fell below the new minimum rates were also
adjusted to reach such rates under their levels.
Bankards move drew the petitioner to press for the increase in
the salary of its old, regular employees. Petitioner filed Notices
of Strike on the grounds of refusal to bargain, discrimination,
and other acts of ULP. The strike was averted, when the
dispute was certified by the Secretary of Labor and
Employment for compulsory arbitration.
ISSUE:
Whether or not the unilateral adoption by an employer of an
upgraded salary scale that increased the hiring rates of new
employees without increasing the salary rates of old employees
resulted in wage distortion.
HELD:
No wage distortion. Upon the enactment of R.A. No. 6727,
WAGE RATIONALIZATION ACT, wage distortion was explicitly
defined as a situation where an increase in prescribed wage
rates results in the elimination or severe contraction of
intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as
to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical
bases of differentiation. Four elements of wage distortion, to
wit: (1.) An existing hierarchy of positions with corresponding
salary rates; (2) A significant change in the salary rate of a
lower pay class without a concomitant increase in the salary
rate of a higher one; (3) The elimination of the distinction
between the two levels; and (4) The existence of the distortion
in the same region of the country. To determine the existence
of wage distortion, the historical classification of the employees
prior to the wage increase must be established. Likewise, it
must be shown that as between the different classification of
employees, there exists a historical gap or difference. Thus the
employees of private respondent have been
historically classified into levels, i.e. I to V, and not on
the basis of their length of service. Petitioner cannot make
a contrary classification of private respondents employees
without encroaching upon recognized management prerogative
of formulating a wage structure, in this case, one based
on level.
It is thus clear that there is no hierarchy of positions between
the newly hired and regular employees of Bankard, hence, the
first element of wage distortion provided in Prubankers is
wanting. While seniority may be a factor in determining the
wages of employees, it cannot be made the sole basis in cases
where the nature of their work differs. Whether or not a new
additional scheme of classification of employees for
compensation purposes should be established by the Company
(and the legitimacy or viability of the bases of distinction there
embodied) is properly a matter of management judgment
and discretion, and ultimately, perhaps, a subject
matter for bargaining negotiations between employer and
employees. It is assuredly something that falls outside the
concept of wage distortion.
As did the Court of Appeals, this Court finds that the third
element provided in Prubankers is also wanting. Even
assuming that there is a decrease in the wage gap between
the pay of the old employees and the newly hired employees,
108
to Our mind said gap is not significant as
to obliterate or result in severe contraction of the intentional
quantitative differences in the salary rates between the
employee group. As already stated, the classification under the
wage structure is based on the rank of an employee, not on
seniority. For this reason, ,wage distortion does not appear to
exist.
Apart from the findings of fact of the NLRC and the Court of
Appeals that some of the elements of wage distortion are
absent, petitioner cannot legally obligate Bankard to correct
the alleged wage distortion as the increase in the wages and
salaries of the newly-hired was not due to a prescribed law or
wage order.
The wordings of Article 124 are clear. If it was the intention of
the legislators to cover all kinds of wage adjustments, then the
language of the law should have been broad, not restrictive as
it is currently phrased:
Article 124. Standards/Criteria for Minimum Wage Fixing.
Where the application of any prescribed wage increase by
virtue of a law or Wage Order issued by any Regional
Board results in distortions of the wage structure within an
establishment, the employer and the union shall negotiate to
correct the distortions. Any dispute arising from the wage
distortions shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration be preserved.
If the compulsory mandate under Article 124 to correct wage
distortion is applied to voluntary and unilateral increases by
the employer in fixing hiring rates which is inherently a
business judgment prerogative, then the hands of the
employer would be completely tied even in cases where an
increase in wages of a particular group is justified due to a re-
evaluation of the high productivity of a particular group, or as
in the present case, the need to increase the competitiveness
of Bankards hiring rate. An employer would be discouraged
from adjusting the salary rates of a particular group of
employees for fear that it would result to a demand by all
employees for a similar increase, especially if the financial
conditions of the business cannot address an across-the-board
increase. The mere factual existence of wage distortion does
not, however, ipso facto result to an obligation to
rectify it, absent a law or other source of obligation which
requires its rectification.
In fine, absent any indication that the voluntary increase of
salary rates by an employer was done arbitrarily and illegally
for the purpose of circumventing the laws or was devoid of any
legitimate purpose other than to discriminate against the
regular employees, this Court will not step in to interfere with
this management prerogative. Employees are of course not
precluded from negotiating with its employer and lobby for
wage increases through appropriate channels, such as through
a CBA.
RULING:
WHEREFORE, the present petition is hereby DENIED.
ZIALCITA V. PHILIPPINE AIRLINES, INC. (Case No.
RO4-3-3398-76; February 20, 1977)
FACTS:
Zialcita is a stewardess of PAL. She was fired from work
because she had gotten married. PAL argued and cited its
policy that stewardesses must be single. The policy also states
that subsequent marriage of a stewardess shall automatically
terminate employment.
Zialcita anchored on Article 136 of the Labor Code. PAL sought
refuge from Article 132.
Article 132 provides, "Article 132. Facilities for women. The
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Secretary of Labor and Employment shall establish standards
that will ensure the safety and health of women employees. In
appropriate cases, he shall, by regulations, require any
employer to: To determine appropriate minimum age and
other standards for retirement or termination in special
occupations such as those of flight attendants and the like."
Article 136 provides, "Article 136. Stipulation against marriage.
It shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or
tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman
employee merely by reason of her marriage."
ISSUE:
Was Zialcita's termination proper?
HELD:
The termination was improper. First of all, during the time
Zialcita was terminated, no regulation had yet been issued by
the Secretary of Labor to implement Article 132. Second, even
assuming that the Secretary of Labor had already issued such
a regulation and to the effect that stewardesses should remain
single, such would be in violation of Article 136 of the Labor
Code.
Article 136's protection of women is broader and more
powerful than the regulation provided under Article 132.
PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY
VS NLRC
G.R. NO. 118978. MAY 23, 1997
FACTS:
PT&T (Philippine Telegraph & Telephone Company) initially
hired Grace de Guzman specifically as ―Supernumerary Project
Worker‖, for a fixed period from November 21, 1990 until April
20, 1991 as reliever for C.F. Tenorio who went on maternity
leave. She was again invited for employment as replacement
of Erlina F. Dizon who went on leave on 2 periods, from June
10, 1991 to July 1, 1991 and July 19, 1991 to August 8, 1991.
On September 2, 1991, de Guzman was again asked to join
PT&T as a probationary employee where probationary period
will cover 150 days. She indicated in the portion of the job
application form under civil status that she was single although
she had contracted marriage a few months earlier. When
petitioner learned later about the marriage, its branch
supervisor, Delia M. Oficial, sent de Guzman a memorandum
requiring her to explain the discrepancy. Included in the
memorandum, was a reminder about the company‘s policy of
not accepting married women for employment. She was
dismissed from the company effective January 29,
1992. Labor Arbiter handed down decision on November 23,
1993 declaring that petitioner illegally dismissed De Guzman,
who had already gained the status of a regular
employee. Furthermore, it was apparent that she had been
discriminated on account of her having contracted marriage in
violation of company policies.
ISSUE:
Whether the alleged concealment of civil status can be
grounds to terminate the services of an employee.
RATIO DECIDENDI:
109
Article 136 of the Labor Code, one of the protective laws for
women, explicitly prohibits discrimination merely by reason of
marriage of a female employee. It is recognized that company
is free to regulate manpower and employment from hiring to
firing, according to their discretion and best business
judgment, except in those cases of unlawful discrimination or
those provided by law.
PT&T‘s policy of not accepting or disqualifying from work any
woman worker who contracts marriage is afoul of the right
against discrimination provided to all women workers by our
labor laws and by our Constitution. The record discloses
clearly that de Guzman‘s ties with PT&T were dissolved
principally because of the company‘s policy that married
women are not qualified for employment in the company, and
not merely because of her supposed acts of dishonesty.
The government abhors any stipulation or policy in the nature
adopted by PT&T. As stated in the labor code: ―ART. 136.
Stipulation against marriage. — It shall be unlawful for an
employer to require as a condition of employment or
continuation of employment that a woman shall not get
married, or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of
marriage.‖
The policy of PT&T is in derogation of the provisions stated in
Art.136 of the Labor Code on the right of a woman to be free
from any kind of stipulation against marriage in connection
with her employment and it likewise is contrary to good morals
and public policy, depriving a woman of her freedom to choose
her status, a privilege that is inherent in an individual as an
intangible and inalienable right. The kind of policy followed by
PT&T strikes at the very essence, ideals and purpose of
marriage as an inviolable social institution and ultimately,
family as the foundation of the nation. Such policy must be
prohibited in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land not
only for order but also imperatively required.
HELD:
ON THE FOREGOING PREMISES, the petition of Philippine
Telegraph and Telephone Company is hereby DISMISSED for
lack of merit, with double costs against petitioner.
SO ORDERED.
COCA-COLA BOTTLERS PHILS., INC. VS. ALAN M.
AGITO, ET AL.
G.R. NO. 179546, FEBRUARY 13, 2009
FACTS:
Agito, et al. are salesmen assigned at the Lagro Sales Office of
Coca-Cola for a number of years but were not regularized.
Their employment was terminated without just cause and due
process. They filed complaints against Coca-Cola, Interserve,
Peerless Integrated Services, Inc. Better Builders, Inc., and
Excellent Partners, Inc. However, they failed to state a reason
for filing complaints against Interserve, Peerless, Better
Builders and Excellent Partners.
Coca-Cola averred that Agito, et al. were employees of
Interserve who were tasked to perform contracted services in
accordance with the provision of the Contract of Services. The
contract covering the period of April 1, 2002 to September 30,
2002 constituted legitimate job contracting.
To prove that Interserve is an independent contractor, Coca-
Cola presented the following: (1) AOI of Interserve; (2)
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LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Certificate of Registration of Interserve with BIR; (3) ITR with
Audited Financial Statements of Interserve for 2001; and (4)
Certificate of Registration of Interserve as an independent
contractor issued by DOLE.
As a result, Coca-Cola asserted that Agito, et al. were
employees of Interserve since it was the latter which hired
them, paid their wages and supervised their work, as proven
by: (1) PDFs are in the records of Interserve; (2) Contracts of
Temporary Employment with Interserve; and (3) payroll
records of Interserve.
LA found for Coca-Cola and held that Interserve was a
legitimate job contractor. The complaints against Peerless,
Better Building and Excellent Partners was dismissed for failure
to pursue the case.
On appeal, NLRC affirmed LA's decision.
CA reversed the NLRC decision and ruled that Interserve was a
labor-only contractor with insufficient capital and investments
for the services which it was contracted to perform.
Additionally, CA determined that Coca-Cola had effective
control over the means and method of Agito, et al.'s work as
evidenced by the Daily Sales Monitoring Report, the
Conventional Route System Proposed Set-Up, and the
memoranda issued by the supervisor of petitioner addressed to
workers. Respondents' tasks were directly related and
necessary to the main business of Coca-Cola. Finally, certain
provisions of the Contract of Service between Coca-Cola and
Interserve suggested that the latter's undertaking did not
involve a specific job but rather the supply of manpower.
ISSUE:
Whether or not Interserve is a legitimate job contractor
HELD:
Legitimate Contracting vs. Labor-Only Contracting
The relations which may arise in a situation, where there is an
employer, a contractor, and employees of the contractor, are
identified and distinguished under Article 106 of the Labor
Code:
Article 106. Contractor or subcontractor. - Whenever an
employer enters into a contract with another person for the
performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay
the wages of his employees in accordance with this Code, the
employer shall be jointly and severally liable with his contractor
or subcontractor to such employees to the extent of the work
performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
The Secretary of Labor may, by appropriate regulations,
restrict or prohibit the contracting out of labor to protect the
rights of workers established under this Code. In so prohibiting
or restriction, he may make appropriate distinctions between
labor-only contracting and job contracting as well as
differentiations within these types of contracting and
determine who among the parties involved shall be considered
the employer for purposes of this Code, to prevent any
violation or circumvention of any provision of this Code.
There is labor-only contracting where the person supplying
workers to an employee does not have substantial capital or
investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed
by such persons are performing activities which are directly
related to the principal business of such employer. In such
110
cases, the person or intermediary shall be considered merely
as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were
directly employed by him.
The afore-quoted provision recognizes two possible relations
among the parties: (1) the permitted legitimate job contract,
or (2) the prohibited labor-only contracting.
A legitimate job contract, wherein an employer enters into a
contract with a job contractor for the performance of the
formers work, is permitted by law. Thus, the employer-
employee relationship between the job contractor and his
employees is maintained. In legitimate job contracting, the law
creates an employer-employee relationship between the
employer and the contractors employees only for a limited
purpose, i.e., to ensure that the employees are paid their
wages. The employer becomes jointly and severally liable with
the job contractor only for the payment of the employees
wages whenever the contractor fails to pay the same. Other
than that, the employer is not responsible for any claim made
by the contractors employees.
On the other hand, labor-only contracting is an arrangement
wherein the contractor merely acts as an agent in recruiting
and supplying the principal employer with workers for the
purpose of circumventing labor law provisions setting down the
rights of employees. It is not condoned by law.A finding by the
appropriate authorities that a contractor is a labor-only
contractor establishes an employer-employee relationship
between the principal employer and the contractors employees
and the former becomes solidarily liable for all the rightful
claims of the employees.
Section 5 of the Rules Implementing Articles 106-109 of the
Labor Code, as amended, provides the guidelines in
determining whether labor-only contracting exists:
Section 5. Prohibition against labor-only contracting. Labor-
only contracting is hereby declared prohibited. For this
purpose, labor-only contracting shall refer to an arrangement
where the contractor or subcontractor merely recruits,
supplies, or places workers to perform a job, work or service
for a principal, and any of the following elements are [is]
present:
i) The contractor or subcontractor does not have
substantial capital or investment which relates to the job,
work, or service to be performed and the employees recruited,
supplied or placed by such contractor or subcontractor are
performing activities which are directly related to the main
business of the principal; or
ii) The contractor does not exercise the right to
control the performance of the work of the contractual
employee.
The foregoing provisions shall be without prejudice to the
application of Article 248(C) of the Labor Code, as amended.
Substantial capital or investment refers to capital stocks and
subscribed capitalization in the case of corporations, tools,
equipment, implements, machineries and work premises,
actually and directly used by the contractor or subcontractor in
the performance or completion of the job, work, or service
contracted out.
The right to control shall refer to the right reversed to the
person for whom the services of the contractual workers are
performed, to determine not only the end to be achieved, but
also the manner and means to be used in reaching that end.
(Emphasis supplied.)
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
When there is labor-only contracting, there is
employer-employee relationship between the principal
and the contractual employee
When there is labor-only contracting, Section 7 of the same
implementing rules, describes the consequences thereof:
Section 7. Existence of an employer-employee relationship.
The contractor or subcontractor shall be considered the
employer of the contractual employee for purposes of
enforcing the provisions of the Labor Code and other social
legislation. The principal, however, shall be solidarily liable with
the contractor in the event of any violation of any provision of
the Labor Code, including the failure to pay wages.
The principal shall be deemed the employer of the contractual
employee in any of the following case, as declared by a
competent authority:
a. where there is labor-only contracting; or
b. where the contracting arrangement falls within
the prohibitions provided in Section 6 (Prohibitions) hereof.
According to the foregoing provision, labor-only contracting
would give rise to: (1) the creation of an employer-employee
relationship between the principal and the employees of the
contractor or sub-contractor; and (2) the solidary liability of
the principal and the contractor to the employees in the event
of any violation of the Labor Code.
Even if employees are not performing activities
indispensable to the business of the principal, labor-
contracting may still exist if the contractor does not
demonstrate substantial capital or investment
The law clearly establishes an employer-employee relationship
between the principal employer and the contractors employee
upon a finding that the contractor is engaged in labor-only
contracting. Article 106 of the Labor Code categorically
states: There is labor-only contracting where the person
supplying workers to an employee does not have substantial
capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers
recruited and placed by such persons are performing activities
which are directly related to the principal business of such
employer. Thus, performing activities directly related to the
principal business of the employer is only one of the two
indicators that labor-only contracting exists; the other is lack of
substantial capital or investment. The Court finds that both
indicators exist in the case at bar.
Interserve has no substantial capital; it is impossible to
measure whether or not there is substantial capital
because the Contract between Coca-Cola and
Interserve does not specify the work or the project
that needs to be performed or completed.
At the outset, the Court clarifies that although Interserve has
an authorized capital stock amounting toP2,000,000.00,
only P625,000.00 thereof was paid up as of 31 December
2001. The Court does not set an absolute figure for what it
considers substantial capital for an independent job contractor,
but it measures the same against the type of work which the
contractor is obligated to perform for the principal. However,
this is rendered impossible in this case since the Contract
between petitioner and Interserve does not even specify the
work or the project that needs to be performed or completed
by the latters employees, and uses the dubious phrase tasks
and activities that are considered contractible under existing
laws and regulations. Even in its pleadings, petitioner carefully
sidesteps identifying or describing the exact nature of the
services that Interserve was obligated to render to
petitioner. The importance of identifying with particularity the
111
work or task which Interserve was supposed to accomplish for
petitioner becomes even more evident, considering that
the Articles of Incorporation of Interserve states that its
primary purpose is to operate, conduct, and maintain the
business of janitorial and allied services. But respondents were
hired as salesmen and leadman for petitioner. The Court
cannot, under such ambiguous circumstances, make a
reasonable determination if Interserve had substantial capital
or investment to undertake the job it was contracting with
petitioner.
Burden of proof of substantial capital rests in the
contractor, or in its absence, the principal claiming it to
be an independent contractor
The contractor, not the employee, has the burden of proof that
it has the substantial capital, investment, and tool to engage in
job contracting. Although not the contractor itself (since
Interserve no longer appealed the judgment against it by the
Labor Arbiter), said burden of proof herein falls upon petitioner
who is invoking the supposed status of Interserve as an
independent job contractor. Noticeably, petitioner failed to
submit evidence to establish that the service vehicles and
equipment of Interserve, valued at P510,000.00
and P200,000.00, respectively, were sufficient to carry out its
service contract with petitioner. Certainly, petitioner could have
simply provided the courts with records showing the deliveries
that were undertaken by Interserve for the Lagro area, the
type and number of equipment necessary for such task, and
the valuation of such equipment. Absent evidence which a
legally compliant company could have easily provided, the
Court will not presume that Interserve had sufficient
investment in service vehicles and equipment, especially since
respondents allegation that they were using equipment, such
as forklifts and pallets belonging to petitioner, to carry out
their jobs was uncontroverted.
Interserve did not exercise the right to control the
performance of the work of the respondents
The lack of control of Interserve over the respondents can be
gleaned from the Contract of Services between Interserve (as
the CONTRACTOR) and petitioner (as the CLIENT).
Paragraph 3 of the Contract specified that the personnel of
contractor Interserve, which included the respondents, would
comply with CLIENT as well as CLIENTs policies, rules and
regulations. It even required Interserve personnel to subject
themselves to on-the-spot searches by petitioner or its duly
authorized guards or security men on duty every time the said
personnel entered and left the premises of petitioner. Said
paragraph explicitly established the control of petitioner over
the conduct of respondents. Although under paragraph 4 of
the same Contract, Interserve warranted that it would exercise
the necessary and due supervision of the work of its
personnel, there is a dearth of evidence to demonstrate the
extent or degree of supervision exercised by Interserve over
respondents or the manner in which it was actually
exercised. There is even no showing that Interserve had
representatives who supervised respondents work while they
were in the premises of petitioner.
Also significant was the right of petitioner under paragraph 2
of the Contract to request the replacement of the
CONTRACTORS personnel. True, this right was conveniently
qualified by the phrase if from its judgment, the jobs or the
projects being done could not be completed within the time
specified or that the quality of the desired result is not being
achieved, but such qualification was rendered meaningless by
the fact that the Contract did not stipulate what work or job
the personnel needed to complete, the time for its completion,
or the results desired. The said provision left a gap which could
enable petitioner to demand the removal or replacement of
any employee in the guise of his or her inability to complete a
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
project in time or to deliver the desired result. The power to
recommend penalties or dismiss workers is the strongest
indication of a companys right of control as direct employer.
Paragraph 4 of the same Contract, in which Interserve
warranted to petitioner that the former would provide relievers
and replacements in case of absences of its personnel, raises
another red flag. An independent job contractor, who is
answerable to the principal only for the results of a certain
work, job, or service need not guarantee to said principal the
daily attendance of the workers assigned to the latter. An
independent job contractor would surely have the discretion
over the pace at which the work is performed, the number of
employees required to complete the same, and the work
schedule which its employees need to follow.
As the Court previously observed, the Contract of Services
between Interserve and petitioner did not identify the work
needed to be performed and the final result required to be
accomplished. Instead, the Contract specified the type of
workers Interserve must provide petitioner (Route Helpers,
Salesmen, Drivers, Clericals, Encoders & PD) and their
qualifications (technical/vocational course graduates, physically
fit, of good moral character, and have not been convicted of
any crime). The Contract also states that, to carry out the
undertakings specified in the immediately preceding
paragraph, the CONTRACTOR shall employ the necessary
personnel, thus, acknowledging that Interserve did not yet
have in its employ the personnel needed by petitioner and
would still pick out such personnel based on the criteria
provided by petitioner. In other words, Interserve did not
obligate itself to perform an identifiable job, work, or service
for petitioner, but merely bound itself to provide the latter with
specific types of employees. These contractual provisions
strongly indicated that Interserve was merely a recruiting and
manpower agency providing petitioner with workers
performing tasks directly related to the latters principal
business.
Certification issued by DOLE is not sufficient to prove
independent contractorship
The certification issued by the DOLE stating that Interserve is
an independent job contractor does not sway this Court to take
it at face value, since the primary purpose stated in the Articles
of Incorporation of Interserve is misleading. According to its
Articles of Incorporation, the principal business of Interserve is
to provide janitorial and allied services. The delivery and
distribution of Coca-Cola products, the work for which
respondents were employed and assigned to petitioner, were
in no way allied to janitorial services. While the DOLE may
have found that the capital and/or investments in tools and
equipment of Interserve were sufficient for an independent
contractor for janitorial services, this does not mean that such
capital and/or investments were likewise sufficient to maintain
an independent contracting business for the delivery and
distribution of Coca-Cola products.
HELD:
IN VIEW OF THE FOREGOING, the instant Petition
is DENIED. The Court AFFIRMS WITH
MODIFICATION the Decision dated 19 February 2007 of the
Court of Appeals in CA-G.R. SP No. 85320. The
Court DECLARES that respondents were illegally dismissed
and, accordingly, ORDERS petitioner to reinstate them
without loss of seniority rights, and to pay them full back
wages computed from the time their compensation was
withheld up to their actual reinstatement. Costs against the
petitioner.
SO ORDERED.
DELFIN VILLARAMA VS NLRC
112
GR NO. 106341, SEP 02, 1994
FACTS:
Petitioner Villarama was charged with sexual harassment by
Divina Gonzaga, a clerk-typist assigned in his department. The
humiliating experience compelled her to resign from work. The
letter prompted Mr. Leopoldo Prieto, President of Golden
Donuts, Inc., to call petitioner to a meeting then required to
explain the letter against him. It appears that petitioner agreed
to tender his resignation. Private respondent moved swiftly to
separate petitioner. Thus, private respondent approved
petitioner's application for leave of absence with pay. It also
issued an inter-office memorandum, advising "all concerned"
that petitioner was no longer connected with the company. Mr.
Prieto sent a letter to petitioner confirming their agreement
that petitioner would be officially separated from the private
respondent. For his failure to tender his resignation, petitioner
was dismissed by private respondent. Feeling aggrieved,
petitioner filed an illegal dismissal case 2 against private
respondent.
Labor Arbiter Salimar V. Nambi held that due process was not
observed in the dismissal of petitioner and there was no valid
cause for dismissal. On appeal to NLRC, it reversed prior
decision of LA.
ISSUE:
whether there was valid cause to terminate petitioner.
RATIO DECIDENDI:
Petitioner claims that his alleged immoral act was
unsubstantiated, hence, he could not be dismissed. We hold
otherwise. The records show that petitioner was confronted
with the charge against him. Initially, he voluntarily agreed to
be separated from the company. He took a leave of absence
preparatory to this separation. This agreement was confirmed
by the letter to him by Mr. Prieto dated August 7, 1989. A few
days after, petitioner reneged on the agreement. He refused to
be terminated on the ground that the seriousness of his
offense would not warrant his separation from service. So he
alleged in his letter to Mr. Prieto dated August 16, 1989. But
even in this letter, petitioner admitted his "error" vis-a-vis Miss
Gonzaga. As a manager, petitioner should know the
evidentiary value of his admissions. Needless to stress, he
cannot complain there was no valid cause for his separation.
Moreover, loss of trust and confidence is a good ground for
dismissing a managerial employee. It can be proved by
substantial evidence which is present in the case at bench. As
further observed by the Solicitor General:
. . . assuming arguendo that De Jesus and Gonzaga were
sweethearts and that petitioner merely acceded to the request
of the former to drop them in the motel, petitioner acted in
collusion with the immoral designs of De Jesus and did not
give due regard to Gonzaga's feeling on the matter and acted
in chauvinistic disdain of her honor, thereby justifying public
respondent's finding of sexual harassment. Thus, petitioner not
only failed to act accordingly as a good father of the family
because he was not able to maintain his moral ascendancy and
authority over the group in the matter of morality and
discipline of his subordinates, but he actively facilitated the
commission of immoral conduct of his subordinates by driving
his car into the motel.
As a managerial employee, petitioner is bound by a more
exacting work ethics. He failed to live up to this higher
standard of responsibility when he succumbed to his moral
perversity. And when such moral perversity is perpetrated
against his subordinate, he provides justifiable ground for his
dismissal for lack of trust and confidence. It is the right, nay,
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
the duty of every employer to protect its employees from over
sexed superiors.
To be sure, employers are given wider latitude of discretion in
terminating the employment of managerial employees on the
ground of lack of trust and confidence.
HELD:
WHEREFORE, premises considered, the assailed resolution of
public respondent is hereby AFFIRMED WITH
MODIFICATION that the award of separation pay is
DELETED. Private respondent is ordered to pay petitioner the
amount of P1,000.00 for non-observance of due process, and
the equivalent amount of his unused vacation/sick leave and
proportionate 13th month pay. No pronouncement as to costs.
SO ORDERED.
LIBRES V NLRC G.R. NO. 123737. MAY 28, 1999
J. Bellosillo
FACTS:
Petitioner Carlos G. Libres, an electrical engineer, was holding
a managerial position with National Steel Corporation (NSC)
as Assistant Manager. He was then asked to comment
regarding the charge of sexual harrassment filed against him
by the VP's secretary Capiral. This was included with a waiver
of his right tobe heard once he didn't comment.
On 14 August 1993 petitioner submitted his written
explanation denying the accusation against him and offering to
submit himself for clarificatory interrogation.
The Management Evaluation Committee said that "touching a
female subordinate's hand and shoulder, caressing her nape
and telling other people that Capiral was the one who hugged
and kissed or that she responded to the sexual advances are
unauthorized acts that damaged her honor." They suspended
Libres for 30 days without pay.
He filed charges against the corporation in the Labor Arbiter,
but the latter held that the company acted with due process
and that his punishment was only mild.
Moreover, he assailed the NLRC decision as without basis due
to the massaging of her shoulders never ―discriminated
against her continued employment,‖ ―impaired her rights and
privileges under the Labor Code,‖ or ―created a hostile,
intimidating or offensive environment.‖
He claimed that he wasn't guaranteed due process because he
wasn't given the right be heard. This was due to his demand
for personal confrontation not being recognized by the MEC.
In the Supreme Court, petitioner assailed the failure of the
NLRC to strictly apply RA No. 7877 or the law against sexual
harassment to the instant case. Moreover, petitioner also
contends that public respondent‘s reliance on Villarama v.
NLRC and Golden Donuts was misplaced. He draws attention
to victim Divina Gonzaga‘s immediate filing of her letter of
resignation in the Villarama case as opposed to the one year
delay of Capiral in filing her complaint against him. He now
surmises that the filing of the case against him was merely an
afterthought and not borne out of a valid complaint, hence,
the Villarama case should have no bearing on the instant case.
113
ISSUE:
Was Libres accorded due process when the MEC denied his
request for personal confrontatiom?
HELD:
Yes Petition denied.
RATIO:
On not strictly applying RA 7877- Republic Act No. 7877 was
not yet in effect at the time of the occurrence of the act
complained of. It was still being deliberated upon in Congress
when petitioner‘s case was decided by the Labor Arbiter. As a
rule, laws shall have no retroactive effect unless otherwise
provided, or except in a criminal case when
their application will favor the accused. Hence, the
Labor Arbiter have to rely on the MEC report and the
common connotation of sexual harassment as it is generally
understood by the public. Faced with the same predicament,
the NLRC had to agree with the Labor Arbiter. In so doing, the
NLRC did not commit any abuse of discretion in affirming the
decision of the Labor Arbiter.
On the Villarama afterthought-it was both fitting and
appropriate since it singularly addressed the issue of a
managerial employee committing sexual harassment on a
subordinate. The disparity in the periods of filing the
complaints in the two (2) cases did not in any way reduce this
case into insignificance. On the contrary, it even invited the
attention of the Court to focus on sexual harassment as a just
and valid cause for termination. Whereas petitioner Libres was
only meted a 30-day suspension by the NLRC, Villarama, in the
other case was penalized with termination. As a managerial
employee, petitioner is bound by more exacting work
ethics. He failed to live up to his higher standard of
responsibility when he succumbed to his moral perversity. And
when such moral perversity is perpetrated against his
subordinate, he provides a justifiable ground for his dismissal
for lack of trust and confidence.
―It is the the duty of every employer to protect his employees
from oversexed superiors.‖ Public respondent therefore is
correct in its observation that the Labor Arbiter was in fact
lenient in his application of the law and jurisprudence for which
petitioner must be grateful for.
As pointed out by the Solicitor General, it could be expected
since Libres was Capiral‘s immediate superior. Fear of
retaliation and backlash, not to forget the social humiliation
and embarrassment that victims of this human frailty usually
suffer, are all realities that Capiral had to contend
with. Moreover, the delay did not detract from the truth
derived from the facts. Petitioner Libres never questioned the
veracity of Capiral‘s allegations. In fact his narration even
corroborated the latter‘s assertion in several material
points. He only raised issue on the complaint‘s protracted
filing.
On the question of due process- Requirements were
sufficiently complied with. Due process as a constitutional
precept does not always and in all situations require a trial
type proceeding. Due process is satisfied when a person is
notified of the charge against him and given an opportunity to
explain or defend himself. The essence of due process is
simply to be heard, or as applied to administrative
proceedings, an opportunity to explain one‘s side, or an
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
opportunity to seek a reconsideration of the action or ruling
complained of.
It is undeniable that petitioner was given a Notice of
Investigation informing him of the charge of sexual
harassment as well as advising him to submit a written
explanation regarding the matter; that he submitted his
written explanation to his superior. The VP further allowed him
to air his grievance in a private session He was given more
than adequate opportunity to explain his side and air his
grievances.
Personal confrontation was not necessary. Homeowners v
NLRC- litigants may be heard through pleadings,
written explanations, position papers, memoranda or oral
arguments.
MARIA LOURDES DOMINGO VS ROGELIO AYALA
G.R. No. 155831, February 18, 2008
FACTS:
On November 16, 1998, Ma. Lourdes T. Domingo (Domingo),
then Stenographic Reporter III at the NLRC, filed a Complaint
for sexual harassment against Rayala before Secretary
Bienvenido Laguesma of the Department of Labor and
Employment (DOLE). To support the Complaint, Domingo
executed an Affidavit narrating the incidences of sexual
harassment complained of. After the last incident narrated,
Domingo filed for leave of absence and asked to be
immediately transferred. Thereafter, she filed the Complaint
for sexual harassment on the basis of Administrative Order No.
250, the Rules and Regulations Implementing RA 7877 in the
Department of Labor and Employment.
Upon receipt of the Complaint, the DOLE Secretary referred
the Complaint to the OP, Rayala being a presidential
appointee. The OP, through then Executive Secretary Ronaldo
Zamora, ordered Secretary Laguesma to investigate the
allegations in the Complaint and create a committee for such
purpose.
The Committee heard the parties and received their respective
evidence. On March 2, 2000, the Committee submitted its
report and recommendation to Secretary Laguesma. It found
Rayala guilty of the offense charged and recommended the
imposition of the minimum penalty provided under AO 250,
which it erroneously stated as suspension for six (6) months.
Rayala filed a Motion for Reconsideration, which the OP
denied. He then filed a Petition for Certiorari and Prohibition
with Prayer for Temporary Restraining Order under Rule 65 of
the Revised Rules on Civil Procedure which was also denied.
Rayala argued that his acts does not constitute sexual
harassment because for it to exist, there must be a demand,
request or requirement of sexual favor.
ISSUE:
Whether or not Rayala commited sexual harassment.
RATIO DECIDENDI:
Yes.
The law penalizing sexual harassment in our jurisdiction is RA
7877. Section 3 thereof defines work-related sexual
harassment in this wise:
Sec. 3. Work, Education or Training-related Sexual
Harassment Defined. – Work, education or training-related
114
sexual harassment is committed by an employer, manager,
supervisor, agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a
work or training or education environment, demands, requests
or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for
submission is accepted by the object of said Act.
(a) In a work-related or employment environment, sexual
harassment is committed when:
(1) The sexual favor is made as a condition in the
hiring or in the employment, re-employment or
continued employment of said individual, or in
granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the
refusal to grant the sexual favor results in limiting,
segregating or classifying the employee which in a
way would discriminate, deprive or diminish
employment opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the employee‘s
rights or privileges under existing labor laws; or
(3) The above acts would result in an intimidating,
hostile, or offensive environment for the employee.
Even if we were to test Rayala‘s acts strictly by the standards
set in Section 3, RA 7877, he would still be administratively
liable. It is true that this provision calls for a ―demand, request
or requirement of a sexual favor.‖ But it is not necessary that
the demand, request or requirement of a sexual favor be
articulated in a categorical oral or written statement. It may be
discerned, with equal certitude, from the acts of the offender.
Holding and squeezing Domingo‘s shoulders, running his
fingers across her neck and tickling her ear, having
inappropriate conversations with her, giving her money
allegedly for school expenses with a promise of future
privileges, and making statements with unmistakable sexual
overtones – all these acts of Rayala resound with deafening
clarity the unspoken request for a sexual favor.
HELD:
WHEREFORE, the foregoing premises considered, the
October 18, 2002 Resolution of the Court of Appeals in CA-G.R.
SP No. 61026 is AFFIRMED. Consequently, the petitions in
G.R. Nos. 155831, 155840, and 158700 are DENIED. No
pronouncement as to costs.
SO ORDERED.
REMINGTON INDUSTRIAL SALES CORP VS ERLINDA
CASTANEDA
G.R. Nos. 169295-96, November 20, 2006
FACTS:
The present controversy began when private respondent,
Erlinda Castaneda ("Erlinda") instituted a complaint for illegal
dismissal, underpayment of wages, non-payment of overtime
services, non-payment of service incentive leave pay and non-
payment of 13th month pay against Remington before the
NLRC. Erlinda alleged that she started working as company
cook for Remington, a corporation engaged in the trading
business; that she worked for six (6) days a week, starting as
early as 6:00 a.m. because she had to do the marketing and
would end at around 5:30 p.m., or even later, after most of
the employees, if not all, had left the company premises; that
she continuously worked with Remington until she was
unceremoniously prevented from reporting for work when
Remington transferred to a new site. She averred that she
reported for work at the new site only to be informed that
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA
Remington no longer needed her services. Erlinda believed
that her dismissal was illegal because she was not given the
notices required by law; hence, she filed her complaint for
reinstatement without loss of seniority rights, salary
differentials, service incentive leave pay, 13th month pay and
10% attorney‘s fees.
ISSUE:
Whether or not Castaneda is a regular employee or a domestic
servant?
RATIO DECIDENDI:
Castaneda is deemed a regular employee.
In Apex Mining Company, Inc. v. NLRC, this Court held that
a househelper in the staff houses of an industrial company was
a regular employee of the said firm. We ratiocinated that:
Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended, the terms ―househelper‖ or ―domestic servant‖ are
defined as follows:
―The term ‗househelper‘ as used herein is synonymous to the
term ‗domestic servant‘ and shall refer to any person, whether
male or female, who renders services in and about the
employer‘s home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of
the employer‘s family.‖
The foregoing definition clearly contemplates such househelper
or domestic servant who is employed in the employer‘s home
to minister exclusively to the personal comfort and enjoyment
of the employer‘s family. Such definition covers family drivers,
domestic servants, laundry women, yayas, gardeners,
houseboys and similar househelps.
xxx xxx xxx
The criteria is the personal comfort and enjoyment of the
family of the employer in the home of said employer. While it
may be true that the nature of the work of a househelper,
domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually
serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is
being rendered in the staffhouses or within the premises of the
business of the employer. In such instance, they are
employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
Petitioner contends that it is only when the househelper or
domestic servant is assigned to certain aspects of the business
of the employer that such househelper or domestic servant
may be considered as such an employee. The Court finds no
merit in making any such distinction. The mere fact that the
househelper or domestic servant is working within the
premises of the business of the employer and in relation to or
in connection with its business, as in its staffhouses for its
guest or even for its officers and employees, warrants the
conclusion that such househelper or domestic servant is and
should be considered as a regular employee of the employer
and NOT as a mere family househelper or domestic servant as
contemplated in Rule XIII, Section 1(b), Book 3 of the Labor
Code, as amended.
In the case at bar, the petitioner itself admits in its position
paper that respondent worked at the company premises and
her duty was to cook and prepare its employees‘ lunch and
merienda. Clearly, the situs, as well as the nature of
respondent‘s work as a cook, who caters not only to the needs
115
of Mr. Tan and his family but also to that of the petitioner‘s
employees, makes her fall squarely within the definition of a
regular employee under the doctrine enunciated in the Apex
Mining case. That she works within company premises, and
that she does not cater exclusively to the personal comfort of
Mr. Tan and his family, is reflective of the existence of the
petitioner‘s right of CONTROL over her functions, which is the
PRIMARY indicator of the existence of an employer-employee
relationship.
HELD:
IN VIEW WHEREOF, the petition is DENIED for lack of
merit. The assailed Decision dated January 31, 2005, and the
Resolution dated August 11, 2005, of the Court of Appeals in
CA-G.R. SP Nos. 64577 and 68477 are AFFIRMED. Costs
against petitioner.
SO ORDERED.
APEX MINING CO., INC. VS NLRC
G.R. NO. 94951, APRIL 22, 1991
FACTS:
Private respondent Sinclita Candida was employed by
petitioner Apex Mining Company, Inc. to perform laundry
services at its staff house located at Masara, Maco, Davao del
Norte. While she was attending to her assigned task and she
was hanging her laundry, she accidentally slipped and hit her
back on a stone. She reported the accident to her immediate
supervisor Mila de la Rosa and to the personnel officer,
Florendo D. Asirit. As a result of the accident she was not able
to continue with her work. She was permitted to go on leave
for medication. De la Rosa offered her the amount of P
2,000.00 which was eventually increased to P5,000.00 to
persuade her to quit her job, but she refused the offer and
preferred to return to work. Petitioner did not allow her to
return to work and dismissed her. Private respondent filed a
request for assistance with the Department of Labor and
Employment to which the latter ordered to pay monetary
awards.
ISSUE:
Whether or not the private respondent should be treated as
househelper or domestic servant or regular employee?
RATIO DECIDENDI:
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as
amended, the terms "househelper" or "domestic servant" are
defined as follows:
The term "househelper" as used herein is synonymous to the
term "domestic servant" and shall refer to any person, whether
male or female, who renders services in and about the
employer's home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of
the employer's family.
The foregoing definition clearly contemplates such househelper
or domestic servant who is employed in the employer's home
to minister exclusively to the personal comfort and enjoyment
of the employer's family. Such definition covers family drivers,
domestic servants, laundry women, yayas, gardeners,
houseboys and other similar househelps.
The definition cannot be interpreted to include househelp or
laundrywomen working in staffhouses of a company, like
petitioner who attends to the needs of the company's guest
and other persons availing of said facilities. By the same token,
it cannot be considered to extend to then driver, houseboy, or
PUP COLLEGE OF LAW
LABOR LAW CASES REVIEWER A.Y. 17-18 ATTY. TEOFILO VILLANUEVA

gardener exclusively working in the company, the staffhouses

and its premises. They may not be considered as within the
meaning of a "househelper" or "domestic servant" as above-
defined by law.

The criteria is the personal comfort and enjoyment of the

family of the employer in the home of said employer. While it
may be true that the nature of the work of a househelper,
domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their
circumstances is that in the former instance they are actually
serving the family while in the latter case, whether it is a
corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is
being rendered in the staffhouses or within the premises of the
business of the employer. In such instance, they are
employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.

HELD:

WHEREFORE, the petition is DISMISSED and the appealed

decision and resolution of public respondent NLRC are hereby
AFFIRMED. No pronouncement as to costs.
SO ORDERED.

116