I pages 7 to 131

RA 10022 amending sec 6 of RA 8042, March 9, 2010

CASES
A. G.R. No. 171448
February 28, 2007.*
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. CHARLIE COMILA
and AIDA COMILA, accused-appellants.

Criminal Law; Double Jeopardy; Illegal Recruitment; Estafa; It is well-

established in jurisprudence that a person may be charged and
convicted for both illegal recruitment and estafa—illegal recruitment
is malum prohibitum while estafa is malum in se.—It is well-established
in jurisprudence that a person may be charged and convicted for both
illegal recruitment and estafa. The reason therefor is not hard to discern:
illegal recruitment is malum prohibitum, while estafa is malum in se. In
the first, the criminal intent of the accused is not necessary for conviction.
In the second, such an intent is imperative. Estafa under Article 315,
paragraph 2, of the Revised Penal Code, is committed by any person who
defrauds another by using fictitious name, or falsely pretends to possess
power, influence, qualifications, property, credit, agency, business or
imaginary transactions, or by means of similar deceits executed prior to or
simultaneously with the commission of fraud. Here, it has been sufficiently
proven that both appellants represented themselves to the complaining
witnesses to have the capacity to send them to Italy for employment, even
as they do not have the authority or license for the purpose. Doubtless, it
is this misrepresentation that induced the complainants to part with their
hard-earned money for placement and medical fees. Such act on the part
of the appellants clearly constitutes estafa under Article 315, paragraph
(2), of the Revised Penal Code.

B. G.R. No. 169076

January 23, 2007
PEOPLE OF THE PHILIPPINES, appellee, vs. JOSEPH JAMILOSA,
appellant.

Labor Law; Criminal Law; Illegal Recruitment in Large Scale;

Elements; Any recruitment activities to be undertaken by non-
licensee or non-holder of contracts shall be deemed illegal and
punishable under Article 39 of the Labor Code of the Philippines.—
Any recruitment activities to be undertaken by non-licensee or non-holder
of contracts shall be deemed illegal and punishable under Article 39 of the
Labor Code of the Philippines. Illegal recruitment is deemed committed in
large scale if committed against three (3) or more persons individually or
as a group. To prove illegal recruitment in large scale, the prosecution is
burdened to prove three (3) essential elements, to wit: (1) the person
charged undertook a recruitment activity under Article 13(b) or any
prohibited practice under Article 34 of the Labor Code; (2) accused did not
have the license or the authority to lawfully engage in the recruitment and
placement of workers; and (3) accused committed the same against three
or more persons individually or as a group. As gleaned from the collective
testimonies of the complaining witnesses which the trial court and the
appellate court found to be credible and deserving of full probative weight,
the prosecution mustered the requisite quantum of evidence to prove the
guilt of accused beyond reasonable doubt for the crime charged. Indeed,
the findings of the trial court, affirmed on appeal by the CA, are conclusive
on this Court absent evidence that the tribunals ignored, misunderstood,
or misapplied substantial fact or other circumstance.

Same; Same; Same; Even in the absence of money or other valuables

given as consideration for the “services” of the recruiter, he is still
considered as being engaged in recruitment activities—it can be
gleaned from the language of Article 13(b) of the Labor Code that the
act of recruitment may be for profit or not.—The failure of the
prosecution to adduce in evidence any receipt or document signed by
appellant where he acknowledged to have received money and liquor does
not free him from criminal liability. Even in the absence of money or other
valuables given as consideration for the “services” of appellant, the latter
is considered as being engaged in recruitment activities. It can be gleaned
from the language of Article 13(b) of the Labor Code that the act of
recruitment may be for profit or not. It is sufficient that the accused
promises or offers for a fee employment to warrant conviction for illegal
recruitment. As the Court held in People v. Sagaydo, 341 SCRA 329 (2000):
Such is the case before us. The complainants parted with their money
upon the prodding and enticement of accused-appellant on the false
pretense that she had the capacity to deploy them for employment abroad.
In the end, complainants were neither able to leave for work abroad nor
get their money back. The fact that private complainants Rogelio Tibeb and
Jessie Bolinao failed to produce receipts as proof of their payment to
accused-appellant does not free the latter from liability. The absence of
receipts cannot defeat a criminal prosecution for illegal recruitment. As
long as the witnesses can positively show through their respective
testimonies that the accused is the one involved in prohibited recruitment,
he may be convicted of the offense despite the absence of receipts.
C. G.R. No. 156029
November 14, 2008
SANTOSA B. DATUMAN, vs. FIRST COSMOPOLITAN MANPOWER AND
PROMOTION SERVICES, INC.

Labor Law; Overseas Contract Workers; Private Employment

Agencies; Private employment agencies are held jointly and severally
liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment.—The above
provisions are clear that the private employment agency shall assume joint
and solidary liability with the employer. This Court has, time and again,
ruled that private employment agencies are held jointly and severally liable
with the foreign-based employer for any violation of the recruitment
agreement or contract of employment. This joint and solidary liability
imposed by law against recruitment agencies and foreign employers is
meant to assure the aggrieved worker of immediate and sufficient payment
of what is due him. This is in line with the policy of the state to protect
and alleviate the plight of the working class.

Same; Same; Same; Employment Contracts; The signing of the

“substitute” contracts with the foreign employer/principal before the
expiration of the Philippine Overseas Employment Administration
(POEA)-approved contract and any continuation of petitioner’s
employment beyond the original one-year term, against the will of
petitioner, are continuing breaches of the original Philippine
Overseas Employment Administration (POEA)-approved contract.—
We cannot agree with the view of the CA that the solidary liability of
respondent extends only to the first contract (i.e. the original, POEA-
approved contract which had a term of until April 1990). The signing of
the “substitute” contracts with the foreign employer/principal before the
expiration of the POEA-approved contract and any continuation of
petitioner’s employment beyond the original one-year term, against the will
of petitioner, are continuing breaches of the original POEA-approved
contract. To accept the CA’s reasoning will open the floodgates to even
more abuse of our overseas workers at the hands of their foreign employers
and local recruiters, since the recruitment agency could easily escape its
mandated solidary liability for breaches of the POEA-approved contract by
colluding with their foreign principals in substituting the approved
contract with another upon the worker’s arrival in the country of
employment. Such outcome is certainly contrary to the State’s policy of
extending protection and support to our overseas workers.
Same; Same; Same; Same; The subsequently executed side agreement
of an overseas contract worker with his foreign employer which
reduced his salary below the amount approved by the Philippine
Overseas Employment Administration (POEA) is void because it is
against our existing laws, morals and public policy.—In Placewell
International Services Corporation v. Camote, 492 SCRA 761 (2006), we
held that the subsequently executed side agreement of an overseas
contract worker with his foreign employer which reduced his salary below
the amount approved by the POEA is void because it is against our existing
laws, morals and public policy. The said side agreement cannot supersede
the terms of the standard employment contract approved by the POEA.

Same; Same; Same; Same; It is the terms of the original Philippine

Overseas Employment Administration (POEA)-approved employment
contract that shall govern the relationship of petitioner with the
respondent recruitment agency and the foreign employer.—The
solidary liability of respondent with petitioner’s foreign employer for
petitioner’s money claims continues although she was forced to sign
another contract in Bahrain. It is the terms of the original POEA-approved
employment contract that shall govern the relationship of petitioner with
the respondent recruitment agency and the foreign employer. We agree
with the Labor Arbiter and the NLRC that the precepts of justice and
fairness dictate that petitioner must be compensated for all months
worked regardless of the supposed termination of the original contract in
April 1990.

Same; Same; Same; Same; The right to claim unpaid salaries (or in this
case, unpaid salary differentials) accrue as they fall due.—We do not
agree with the CA when it held that the cause of action of petitioner had
already prescribed as the three-year prescriptive period should be
reckoned from September 1, 1989 when petitioner was forced to sign
another contract against her will. As stated in the complaint, one of
petitioner’s causes of action was for underpayment of salaries. The NLRC
correctly ruled the right to claim unpaid salaries (or in this case, unpaid
salary differentials) accrue as they fall due. Thus, petitioner’s cause of
action to claim salary differential for October 1989 only accrued after she
had rendered service for that month (or at the end of October 1989). Her
right to claim salary differential for November 1989 only accrued at the
end of November 1989, and so on and so forth.
D. G.R. No. 182232.
October 6, 2008.*
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. NENITA B. HU,
accused-appellant.

Criminal Law; Illegal Recruitment; Elements; Words and Phrases;

Recruitment and placement is “any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers; and
includes referrals, contact 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 crime becomes Illegal
Recruitment in Large Scale when the foregoing two elements concur,
with the addition of a third element—the recruiter committed the same
against three or more persons, individually or as group; A conviction for
large scale illegal recruitment must be based on a finding in each case of
illegal recruitment of three or more persons whether individually or as a
group.—Illegal recruitment is committed when two elements concur,
namely: (1) the offender has no valid license or authority required by law
to enable him to lawfully engage in the recruitment and placement of
workers; and (2) he undertakes any activity within the meaning of
“recruitment and placement” defined under Article 13(b) of the Labor Code.
Recruitment and placement is “any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers; and
includes referrals, contact 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 crime becomes Illegal Recruitment in
Large Scale when the foregoing two elements concur, with the addition of
a third element—the recruiter committed the same against three or more
persons, individually or as group. A conviction for large scale illegal
recruitment must be based on a finding in each case of illegal recruitment
of three or more persons whether individually or as a group. While it is
true that the law does not require that at least three victims testify at the
trial, nevertheless, it is necessary that there is sufficient evidence proving
that the offense was committed against three or more persons.

Same; Same; In offenses in which the number of victims is essential,

failure of the prosecution to prove by convincing evidence that the
offense is committed against the minimum number of persons
required by law is fatal to its cause of action.—While there were six
private complainants in this case, four of whom were presented during the
trial, the prosecution, nonetheless, failed to establish that Hu engaged in
illegal recruitment acts against at least three of these complainants. In
offenses in which the number of victims is essential, such as in the present
petition, failure of the prosecution to prove by convincing evidence that the
offense is committed against the minimum number of persons required by
law is fatal to its cause of action. Underscoring the significance of the
number of victims was the disquisition of Justice Florenz Regalado in
People v. Ortiz-Miyake, 279 SCRA 180 (1997): It is evident that in illegal
recruitment cases, the number of persons victimized is determinative.
Where illegal recruitment is committed against a lone victim, the accused
may be convicted of simple illegal recruitment which is punishable with a
lower penalty under Article 39(c) of the Labor Code. Corollarily, where the
offense is committed against three or more persons, it is qualified to illegal
recruitment in large scale which provides a higher penalty under Article
39(a) of the same Code. (Emphasis supplied.)

Same; Same; Failure of the prosecution to prove the guilt of the

accused beyond reasonable doubt does not absolve her of her civil
obligation to return the money she collected from private
complaints.—Failure of the prosecution to prove the guilt of Hu beyond
reasonable doubt does not absolve her of her civil obligation to return the
money she collected from private complaints Panguelo, Abril and Orillano,
plus legal interest in accordance with our ruling in Domagsang v. Court of
Appeals, 347 SCRA 75 (2000). There, the prosecution failed to sufficiently
establish a case to warrant a conviction, but clearly proved a just debt
owed to the private complainant. Thus, the accused was ordered to pay
the face value of the check with 12% legal interest per annum, reckoned
from the filing of the information until the finality of the judgment. It is
well settled that acquittal based on reasonable doubt does not preclude an
award for civil damages. The judgment of acquittal extinguishes the
liability of the accused only when it includes a declaration that the facts
from which the civil liability might arise did not exist. Thus, civil liability
is not extinguished where the acquittal is based on lack of proof beyond
reasonable doubt, since only preponderance of evidence is required in civil
cases. There appears to be no sound reason to require that a separate
action be still filed considering that the facts to be proved in the civil case
have already been established in the criminal proceedings. In the present
case, the prosecution explicitly proved that private complainants parted
with substantial amounts of money upon the prodding and enticement of
Hu on the false pretense that she had the capacity to deploy them for
 employment abroad. In the end, private complainants were not able to
leave for work abroad or get their money back.

Same; Same; Words and Phrases; The act of referral, which means the
act of passing along or forwarding an applicant after an initial
interview to a selected employer, placement or bureau, is included in
recruitment.—Garcia testified that she applied for employment in Taiwan
for the position of Electronic Operator thru Brighturn in April 2002. Due
to the alleged suspension of Brighturn’s license, Hu referred her to a
neighboring agency (Best One), but Hu continued collecting placement fees
from her. The act of referral, which means the act of passing along or
forwarding an applicant after an initial interview to a selected employer,
placement or bureau, is included in recruitment. Undoubtedly, the act of
Hu in referring Garcia to another recruitment agency squarely fell within
the purview of recruitment that was undertaken by Hu after her authority
to recruit and place workers already expired on 17 December 2001.

Same; Same; Receipts; The absence of receipts in the case of illegal

recruitment does not warrant the acquittal of the accused and is not
fatal to the prosecution’s case.—Failure of Garcia to present proof of
payment is irrelevant. The absence of receipts in the case of illegal
recruitment does not warrant the acquittal of the appellant and is not fatal
to the prosecution’s case. As long as the prosecution is able to establish
through credible and testimonial evidence, as in the case at bar, that the
appellant had engaged in illegal recruitment, a conviction for the offense
can be very well justified.

E. G.R. Nos. 182978-79

April 7, 2009
BECMEN SERVICE EXPORTER AND PROMOTION, INC.,
vs
SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf of their
daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and
JAIME ORTIZ (President,White Falcon Services, Inc.)

II Pages 139; 145 to 160 Labor Code

Pages 79 to 93
(Tesda Act of 1994)

Pages 94 to 108 Special Laws

(RA 7277 – Magna Carta for Disabled Persons)

Cases:
A. G.R. No. 122917

July 12, 1999

MARITES BERNARDO et al vs. NATIONAL LABOR RELATIONS

COMMISSION and FAR EAST BANK AND TRUST COMPANY

Labor Law; Labor Code; 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.—At the outset, let it be known that this Court
appreciates the nobility of private respondent’s effort to provide
employment to physically impaired individuals and to make them
more productive members of society. However, we cannot allow it to
elude the legal consequences of that effort, simply because it now
deems their employment irrelevant. 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.

Same; Same; Since the Magna Carta accords them the rights of
qualified able-bodied persons, they are thus covered by Article
280 of the Labor Code.—The fact that the employees were qualified
disabled persons necessarily removes the employment contracts from
the ambit of Article 80. Since the Magna Carta accords them the
rights of qualified able-bodied persons, they are thus covered by
Article 280 of the Labor Code.

Same; Same; The test of whether an employee is regular was laid

down in De Leon vs. National Labor Relations Commission.—The
test of whether an employee is regular was laid down in De Leon v.
NLRC, in which this Court held: “The primary standard, therefore,
of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation
to the usual trade or business of the employer. The test is whether the
former is usually necessary or desirable in the usual business or
trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety. Also if the
employee has been performing the job for at least one year, even if the
performance is not continuous and merely intermittent, the law
deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the
business. Hence, the employment is considered regular, but only with
respect to such activity, and while such activity exists.”

Same; Same; When the bank renewed the contract after the lapse
of the six-month probationary period, the employees thereby
became regular employees.—As held by the Court, “Articles 280 and
281 of the Labor Code put an end to the pernicious practice of making
permanent casuals of our lowly employees by the simple expedient of
extending to them probationary appointments, ad infinitum.” The
contract signed by petitioners is akin to a probationary employment,
during which the bank determined the employees’ fitness for the job.
When the bank renewed the contract after the lapse of the six-month
probationary period, the employees thereby became regular
employees. No employer is allowed to determine indefinitely the fitness
of its employees.

Same; Same; As regular employees, the twenty-seven petitioners

are entitled to security of tenure; that is, their services may be
terminated only for a just or authorized cause.—As regular
employees, the twenty-seven petitioners are entitled to security of
tenure; that is, their services may be terminated only for a just or
authorized cause. Because respondent failed to show such cause,
these twenty-seven petitioners are deemed illegally dismissed and
therefore entitled to back wages and reinstatement without loss of
seniority rights and other privileges. Considering the allegation of
respondent that the job of money sorting is no longer available
because it has been assigned back to the tellers to whom it originally
belonged, petitioners are hereby awarded separation pay in lieu of
reinstatement.

Same; Same; An employee is regular because of the nature of work

and the length of service, not because of the mode or even the
reason for hiring them.—Respondent argues that petitioners were
merely “accommodated” employees. This fact does not change the
nature of their employment. As earlier noted, an employee is regular
Same; Same; The determination of whether employment is casual
or regular does not depend on the will or word of the employer,
and the procedure of hiring x x x but on the nature of the
activities performed by the employee, and to some extent, the
length of performance and its continued existence.—Equally
unavailing are private respondent’s arguments that it did not go out of
its way to recruit petitioners, and that its plantilla did not contain
their positions. In L. T. Datu v. NLRC, the Court held that “the
determination of whether employment is casual or regular does not
depend on the will or word of the employer, and the procedure of
hiring x x x but on the nature of the activities performed by the
employee, and to some extent, the length of performance and its
continued existence.”

Same; Same; The well-settled rule is that the character of

employment is determined not by stipulations in the contract,
but by the nature of the work performed.—Private respondent
argues that the petitioners were informed from the start that they
could not become regular employees. In fact, the bank adds, they
agreed with the stipulation in the contract regarding this point. Still,
we are not persuaded. The well-settled rule is that the character of
employment is determined not by stipulations in the contract, but by
the nature of the work performed. Otherwise, no employee can
become regular by the simple expedient of incorporating this
condition in the contract of employment.

Same; Same; The noble objectives of Magna Carta for Disabled

Persons are not based merely on charity or accommodation, but
on justice and the equal treatment of qualified persons, disabled
or not.—In rendering this decision, the Court emphasizes not only
the constitutional bias in favor of the working class, but also the
concern of the State for the plight of the disabled. The noble objectives
of Magna Carta for Disabled Persons are not based merely on charity
or accommodation, but on justice and the equal treatment of qualified
persons, disabled or not. In the present case, the handicap of
petitioners (deaf-mutes) is not a hindrance to their work. The eloquent
proof of this statement is the repeated renewal of their employment
contracts. Why then should they be dismissed, simply because they
are physically impaired? The Court believes, that, after showing their
 fitness for the work assigned to them, they should be treated and
granted the same rights like any other regular employees

III Pages 167 to 240 (art 84) – Labor Code

IV Pages 240 )Art. 85) to 303 – Labor Code

RA 10028 – Expanding Breastfeeding Promotion Act of 2009

Cases
Onus Probandi of Empoyer-Employee Relationship

A. G.R. No. 192558

February 15, 2012

BITOY JAVIER (DANILO P. JAVIER), vs. FLY ACE

CORPORATION/FLORDELYN CASTILLO.

Labor Law; Appeals; Generally, the Supreme Court does not review
errors that raise factual questions, however, when there is conflict
among the factual findings of the antecedent deciding bodies like
the Labor Arbiter (LA), the National Labor Relations Commission
(NLRC) and the Court of Appeals (CA), “it is proper, in the exercise
of the High Court’s equity jurisdiction, to review and re-evaluate
the factual issues and to look into the records of the case and re-
examine the questioned findings.”—It must be noted that the issue
of Javier’s alleged illegal dismissal is anchored on the existence of an
employer-employee relationship between him and Fly Ace. This is
essentially a question of fact. Generally, the Court does not review
errors that raise factual questions. However, when there is conflict
among the factual findings of the antecedent deciding bodies like the
LA, the NLRC and the CA, “it is proper, in the exercise of Our equity
jurisdiction, to review and re-evaluate the factual issues and to look
into the records of the case and re-examine the questioned findings.”
In dealing with factual issues in labor cases, “substantial evidence—
that amount of relevant evidence which a reasonable mind might accept
as adequate to justify a conclusion—is sufficient.”
Same; Same; Labor officials are enjoined to use reasonable means
to ascertain the facts speedily and objectively with little regard to
technicalities or formalities but nowhere in the rules are they
provided a license to completely discount evidence, or the lack of
it; When confronted with conflicting versions on factual matters,
it is for them in the exercise of discretion to determine which party
deserves credence on the basis of evidence received, subject only
to the requirement that their decision must be supported by
substantial evidence.—As the records bear out, the LA and the CA
found Javier’s claim of employment with Fly Ace as wanting and
deficient. The Court is constrained to agree. Although Section 10, Rule
VII of the New Rules of Procedure of the NLRC allows a relaxation of the
rules of procedure and evidence in labor cases, this rule of liberality
does not mean a complete dispensation of proof. Labor officials are
enjoined to use reasonable means to ascertain the facts speedily and
objectively with little regard to technicalities or formalities but nowhere
in the rules are they provided a license to completely discount evidence,
or the lack of it. The quantum of proof required, however, must still be
satisfied. Hence, “when confronted with conflicting versions on factual
matters, it is for them in the exercise of discretion to determine which
party deserves credence on the basis of evidence received, subject only
to the requirement that their decision must be supported by substantial
evidence.” Accordingly, the petitioner needs to show by substantial
evidence that he was indeed an employee of the company against which
he claims illegal dismissal.

Same; Employer-Employee Relationship; No particular form of

evidence is required to prove the existence of such employer-
employee relationship.—“No particular form of evidence is required
to prove the existence of such employer-employee relationship. Any
competent and relevant evidence to prove the relationship may be
admitted. Hence, while no particular form of evidence is required, a
finding that such relationship exists must still rest on some substantial
evidence. Moreover, the substantiality of the evidence depends on its
quantitative as well as its qualitative aspects.” Although substantial
evidence is not a function of quantity but rather of quality, the x x x
circumstances of the instant case demand that something more should
have been proffered. Had there been other proofs of employment, such
as x x x inclusion in petitioner’s payroll, or a clear exercise of control,
the Court would have affirmed the finding of employer-employee
relationship.”
Same; Same; Tests to Determine the Existence of Employer-
Employee Relationship.—The Court is of the considerable view that
on Javier lies the burden to pass the well-settled tests to determine the
existence of an employer-employee relationship, viz.: (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
employee’s conduct. Of these elements, the most important criterion
is whether the employer controls or has reserved the right to control
the employee not only as to the result of the work but also as to the
means and methods by which the result is to be accomplished.

Same; Same; Independent Contractors; In determining whether the

relationship is that of employer and employee or one of an
independent contractor, each case must be determined on its own
facts and all the features of the relationship are to be considered.—
The Court’s decision does not contradict the settled rule that “payment
by the piece is just a method of compensation and does not define the
essence of the relation.” Payment on a piece-rate basis does not negate
regular employment. “The term ‘wage’ is broadly defined in Article 97 of
the Labor Code as remuneration or earnings, capable of being
expressed in terms of money whether fixed or ascertained on a time,
task, piece or commission basis. Payment by the piece is just a method
of compensation and does not define the essence of the relations. Nor
does the fact that the petitioner is not covered by the SSS affect the
employer-employee relationship. However, in determining whether the
relationship is that of employer and employee or one of an independent
contractor, each case must be determined on its own facts and all the
features of the relationship are to be considered.”

Same; Social Justice; Out of its concern for the less privileged in
life, the Supreme Court has inclined, more often than not, toward
the worker and upheld his cause in his conflicts with the
employer.—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 rights which are entitled to respect
and enforcement in the interest of simple fair play. Out of its concern
for the less privileged in life, the 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 the Court 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.
B. G.R. No. 193493
June 13, 2013
JAIME N. GAPAYAO, vs. ROSARIO FULO, SOCIAL SECURITY
SYSTEM and SOCIAL SECURITY COMMISSION,

Remedial Law; Civil Procedure; Appeals; Findings of fact of

administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect but finality when
affirmed by the Court of Appeals.―At the outset, it is settled that the
Court is not a trier of facts and will not weigh evidence all over again.
Findings of fact of administrative agencies and quasi-judicial bodies,
which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect but finality
when affirmed by the CA. For as long as these findings are supported
by substantial evidence, they must be upheld.

Labor Law; Regular Employees; Project Employees; Casual

Employees; Jurisprudence has identified the three types of
employees mentioned in Article 280 of the Labor
Code.―Jurisprudence has identified the three types of employees
mentioned in the provision: (1) regular employees or those who have
been engaged to perform activities that are usually necessary or
desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has
been determined at the time of their engagement, or those whose work
or service is seasonal in nature and is performed for the duration of the
season; and (3) casual employees or those who are neither regular nor
project employees.

Same; Same; For regular employees to be considered as such, the

primary standard used is the reasonable connection between the
particular activity they perform and the usual trade or business of
the employer.―Farm workers generally fall under the definition of
seasonal employees. We have consistently held that seasonal
employees may be considered as regular employees. Regular seasonal
employees are those called to work from time to time. The nature of
their relationship with the employer is such that during the off season,
they are temporarily laid off; but reemployed during the summer season
or when their services may be needed. They are in regular employment
because of the nature of their job, and not because of the length of time
they have worked. The rule, however, is not absolute. In Hacienda
Fatima v. National Federation of Sugarcane Workers-Food & General
Trade, 396 SCRA 518 (2003), the Court held that seasonal workers who
have worked for one season only may not be considered regular
employees. Similarly, in Mercado, Sr. v. NLRC, 201 SCRA 332 (1991),
it was held that when seasonal employees are free to contract their
services with other farm owners, then the former are not regular
employees. For regular employees to be considered as such, the
primary standard used is the reasonable connection between the
particular activity they perform and the usual trade or business of the
employer. This test has been explained thoroughly in De Leon v. NLRC,
176 SCRA 615 (1989), viz.: The primary standard, therefore, of
determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation
to the usual business or trade of the employer. The test is whether the
former is usually necessary or desirable in the usual business or trade
of the employer. The connection can be determined by considering the
nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also if the employee has
been performing the job for at least one year, even if the performance
is not continuous or merely intermittent, the law deems the repeated
and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence,
the employment is also considered regular, but only with respect to
such activity and while such activity exists.

Same; Pakyaw Workers; Words and Phrases; Control Test; Pakyaw

workers are considered employees for as long as their employers
exercise control over them.―Pakyaw workers are considered
employees for as long as their employers exercise control over them. In
Legend Hotel Manila v. Realuyo, 677 SCRA 10 (2012), the Court held
that “the power of the employer to control the work of the employee is
considered the most significant determinant of the existence of an
employer-employee relationship. This is the so-called control test and
is premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and
means used to achieve that end.” It should be remembered that the
control test merely calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential that the employer
actually supervises the performance of duties by the employee. It is
enough that the former has a right to wield the power.
 Onus Probandi of Payment of Benefits

A. G.R. No. 173648

January 16, 2012
ABDULJUAHID R. PIGCAULAN, vs. SECURITY and CREDIT
INVESTIGATION, INC. and/or RENE AMBY REYES

Remedial Law; Civil Procedure; Certificate of Non-forum Shopping;

The filing of a certificate of non-forum shopping is mandatory so
much so that non-compliance could only be tolerated by special
circumstances and compelling reasons; This Court has held that when
there are several petitioners, all of them must execute and sign
Originally captioned as Oliver Canoy and Abduljuahid Pigcaulan,
petitioners vs. Security and Credit Investigation Inc. and/or Rene
Amby Reyes, respondents. The Court, however, drops Oliver Canoy
from the caption consistent with the Court’s ruling herein. The
certification against forum shopping; otherwise, those who did not
sign will be dropped as parties to the case.—The filing of a certificate of
non-forum shopping is mandatory so much so that non-compliance could
only be tolerated by special circumstances and compelling reasons. This
Court has held that when there are several petitioners, all of them must
execute and sign the certification against forum shopping; otherwise,
those who did not sign will be dropped as parties to the case. True, we held
that in some cases, execution by only one of the petitioners on behalf of
the other petitioners constitutes substantial compliance with the rule on
the filing of a certificate of non-forum shopping on the ground of common
interest or common cause of action or defense. We, however, find that
common interest is not present in the instant petition. To recall, Canoy’s
and Pigcaulan’s complaints were consolidated because they both sought
the same reliefs against the same respondents. This does not, however,
mean that they share a common interest or defense. The evidence required
to substantiate their claims may not be the same. A particular evidence
which could sustain Canoy’s action may not effectively serve as sufficient
to support Pigcaulan’s claim.

Same; Same; Same; Procedural Rules and Technicalities; Procedural

rules should not be ignored simply because their non-observance may
result in prejudice to a party’s substantial rights.—Assuming that the
petition is also filed on his behalf, Canoy failed to show any reasonable
cause for his failure to join Pigcaulan to personally sign the Certification
of Non-Forum Shopping. It is his duty, as a litigant, to be prudent in
pursuing his claims against SCII, especially so, if he was indeed suffering
 from financial distress. However, Canoy failed to advance any justifiable
reason why he did not inform anyone of his whereabouts when he knows
that he has a pending case against his former employer. Sadly, his lack of
prudence and diligence cannot merit the court’s consideration or
sympathy. It must be emphasized at this point that procedural rules
should not be ignored simply because their non-observance may result in
prejudice to a party’s substantial rights. The Rules of Court should be
followed except only for the most persuasive of reasons.

Labor Law; Holiday Pay; Service Incentive Leave Pay; The employer
has the burden of proving of paying holiday pay, service incentive
leave pay and other benefits.—Article 94 of the Labor Code provides
that: 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; x x x x
While Article 95 of the Labor Code provides: ART. 95. RIGHT TO SERVICE
INCENTIVE LEAVE.—(a) Every employee who has rendered at least one
year of service shall be entitled to a yearly service incentive of five days
with pay. x x x x Under the Labor Code, Pigcaulan is entitled to his regular
rate on holidays even if he does not work. Likewise, express provision of
the law entitles him to service incentive leave benefit for he rendered
service for more than a year already. Furthermore, under Presidential
Decree No. 851, he should be paid his 13th month pay. As employer, SCII
has the burden of proving that it has paid these benefits to its employees.

Same; Same; Same; Prescription; All money claims arising from an

employer-employee relationship shall be filed within three years from
the time the cause of action accrued.—Consistent with the rule that all
money claims arising from an employer-employee relationship shall be
filed within three years from the time the cause of action accrued,
Pigcaulan can only demand the amounts due him for the period within
three years preceding the filing of the complaint in 2000. Furthermore,
since the records are insufficient to use as bases to properly compute
Pigcaulan’s claims, the case should be remanded to the Labor Arbiter for
a detailed computation of the monetary benefits due to him. Pigcaulan vs.
Security and Credit Investigation, Inc., 663 SCRA 1, G.R. No. 173648
January 16, 2012

B. No. L-31341
March 31, 1976
PHILIPPINE AIR LINES EMPLOYEES ASSOCIATION (PALEA) and
PHILIPPINE AIR LINES SUPERVISORS’ ASSOCIATION (PALSA), vs.
PHILIPPINE AIR LINES, INC.

No. L-31341 and No. L-31343

March 31, 1976

PHILIPPINE AIR LINES, INC., vs. PHILIPPINE AIR LINES EMPLOYEES’

ASSOCIATION, PHILIPPINE AIRLINES SUPERVISORS’ ASSOCIATION,
and the COURT OF INDUSTRIAL RELATIONS,

Labor relations; Computation of basic daily rate of employees; Divisor

in computing an employee’s basic daily rate should be the actual
working days in a year; Reasons.—The divisor in computing an
employee’s basic daily rate should be the actual working days in a year.
The number of off-days are not to be counted precisely because on such
off-days, an employee is not required to work. Simple common sense
dictates that should an employee opt not to work—which he can legally
do—on an off-day, and for such he gets no pay, he would be unduly robbed
of a portion of his legitimate pay if and when in computing his basic daily
and hourly rate, such off-day is deemed subsumed by the divisor. For it is
elementary in the fundamental process of division that with a constant
dividend, the bigger your divisor is, the smaller your quotient will be.

Same; Same; Same; Off-days not paid days; Reasons.—Off-days are not
paid days. Precisely, off-days are rest days for the worker. He is not
required to work on such days. This finds support not only in the basic
principle in labor that the basis of remuneration or compensation is actual
service rendered, but in the ever-pervading labor spirit aimed at
humanizing the conditions of the working man. Since during his off-days
an employee is not compelled to work he cannot, conversely, demand for
his corresponding pay. If, however, a worker works on his off-day, our
welfare laws duly reward him with a premium higher than what he would
receive when he works on his regular working day.

Same; Same; Where employer commits itself to pay additional

compensation to employees who work on off-days.—PAL inked with the
representative unions of the employees collective bargaining agreements
wherein it bound itself to duly compensate employees working on their off-
days. It must pay not because of compulsion of law but because of
contractual obligation.
 Labor laws; Construction of.—In case of doubt, all labor legislation
and labor contracts should be construed in favor of the safety and
decent living of the laborer.

Estoppel; Applicability of estoppel depends on circumstances of

case.—The doctrine of estoppel had its origin in equity. As such, its
applicability depends, to a large extent, on the circumstances surrounding
a particular case. Where, therefore, the neglect or omission alleged to have
placed a party in estoppel is actually fraught

Same; Estoppel by silence; Element of turpitude or negligence must

be connected with silence.—Mere innocent silence will not work
estoppel. There must also be some element of turpitude or negligence
connected with the silence by which another is misled to his injury.

Same; Estoppel cannot arrest recovery of overtime compensation.—

Jurisprudence likewise fortifies the position that in the interest of public
policy, estoppel and laches cannot arrest recovery of overtime
compensation.

Same; Estoppel cannot give validity to act against public policy.—The

unilateral adoption by PAL of an irregular wage formula being an act
against public policy, the doctrine of estoppel cannot give validity to the
same.

Prescription; Where claim for overtime compensation based on

collective bargaining agreements, prescription period of ten years
applies.—The present case calls for the application of the Civil Code
provisions on the prescriptive period in the filing of actions based on
written contracts. The reason should be fairly obvious. Petitioners’ claim
fundamentally involves the strict compliance by PAL of the provisions on
wage computation embodied in the collective bargaining agreements inked
between it and the employees’ representative unions.

Same; Where claim for overtime compensation based solely on Eight-

Hour Labor Law, prescriptive period of three years applies.—The three-
year prescriptive period fixed in the Eight-Hour Labor Law (CA No. 444, as
amended) will apply, if the claim for differentials for overtime work is solely
based on said law, and not on a collective bargaining agreement or any
other contract.

C. G.R. No. 146881

 February 5, 2007
COCA-COLA BOTTLERS (PHILS.), INC./ERIC MONTINOLA, Manager,
petitioners, vs. DR. DEAN N. CLIMACO

Labor Law; Employer-Employee Relationship; Four-Fold Test.—The

Court, in determining the existence of an employeremployee relationship,
has invariably adhered to the four-fold test: (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 employee’s conduct, or the so-
called “control test,” considered to be the most important element.

Same; Same; Physicians; Retainer Agreements; Independent

Contractors; There is nothing wrong with the employment of a doctor
as a company retained physician; Where there is no
employeremployee relationship between the parties, the termination
of the Retainership Agreement, which is in accordance with the
provisions of the Agreement, does not constitute illegal dismissal of
the retained physician.—The Court also notes that the Retainership
Agreement granted to both parties the power to terminate their
relationship upon giving a 30-day notice. Hence, petitioner company did
not wield the sole power of dismissal or termination. The Court agrees with
the Labor Arbiter and the NLRC that there is nothing wrong with the
employment of respondent as a retained physician of petitioner company
and upholds the validity of the Retainership Agreement which clearly
stated that no employer-employee relationship existed between the parties.
The Agreement also stated that it was only for a period of 1 year beginning
January 1, 1988 to December 31, 1998, but it was renewed on a yearly
basis. Considering that there is no employer-employee relationship
between the parties, the termination of the Retainership Agreement, which
is in accordance with the provisions of the Agreement, does not constitute
illegal dismissal of respondent. Consequently, there is no basis for the
moral and exemplary damages granted by the Court of Appeals to
respondent due to his alleged illegal dismissal.

D. G.R. No. 168424

June 8, 2007
CONSOLIDATED BROADCASTING SYSTEM, INC., vs. DANNY OBERIO,
ELNA DE PEDRO, LUISITO VILLAMOR, WILMA SUGATON, RUFO
DEITA, JR., EMILY DE GUZMAN, CAROLINE LADRILLO, JOSE
ROBERTO REGALADO, ROSEBEL NARCISO & ANANITA TANGETE
Labor Law; Dismissals; Labor Standards; Jurisdictions; Forum
Shopping; In cases where the complaint for violation of labor standard
laws preceded the termination of the employee and the filing of the
illegal dismissal case, it would not be in consonance with justice to
charge the complainants with engaging in forum shopping when the
remedy available to them at the time their causes of action arose was
to file separate cases before different fora.—Under Article 217 of the
Labor Code, termination cases fall under the jurisdiction of Labor Arbiters.
Whereas, Article 128 of the same Code vests the Secretary of Labor or his
duly authorized representatives with the power to inspect the employer’s
records to determine and compel compliance with labor standard laws.
The exercise of the said power by the Secretary or his duly authorized
representatives is exclusive to cases where employer-employee
relationship still exists. Thus, in cases where the complaint for violation of
labor standard laws preceded the termination of the employee and the
filing of the illegal dismissal case, it would not be in consonance with
justice to charge the complainants with engaging in forum shopping when
the remedy available to them at the time their causes of action arose was
to file separate cases before different fora. Besides, in the instant case,
respondent Danny Oberio disclosed in the verification the pendency of the
case regarding wage differential. In addition, said case was discussed in
detail in the position paper, evincing the absence of any intention on the
part of respondents to mislead the Labor Arbiter.

Same; Project Employees; Broadcast Industry; Program Employment;

Policy Instruction No. 40; Project or contractual employees are
required to be apprised of the project they will undertake under a
written contract.—Petitioner failed to controvert with substantial
evidence the allegation of respondents that they were hired by the former
on various dates from 1974 to 1997. If petitioner did not hire respondents
and if it was the director alone who chose the talents, petitioner could have
easily shown, being in possession of the records, a contract to such effect.
However, petitioner merely relied on its contention that respondents were
piece rate contractors who were paid by results. Note that under Policy
Instruction No. 40, petitioner is obliged to execute the necessary contract
specifying the nature of the work to be performed, rates of pay, and the
programs in which they will work. Moreover, project or contractual
employees are required to be apprised of the project they will undertake
under a written contract. This was not complied with by the petitioner,
justifying the reasonable conclusion that no such contracts exist and that
respondents were in fact regular employees.
Same; Same; The test to determine whether employment is regular or
not is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade
of the employer—also, if the employee has been performing the job for at
least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability
of that activity to the business.—The engagement of respondents for a
period ranging from 2 to 25 years and the fact that their drama programs
were aired not only in Bacolod City but also in the sister stations of DYWB
in the Visayas and Mindanao areas, undoubtedly show that their work is
necessary and indispensable to the usual business or trade of petitioner.
The test to determine whether employment is regular or not is the
reasonable connection between the particular activity performed by the
employee in relation to the usual business or trade of the employer. Also,
if the employee has been performing the job for at least one year, even if
the performance is not continuous or merely intermittent, the law deems
the repeated and continuing need for its performance as sufficient
evidence of the necessity, if not indispensability of that activity to the
business. Thus, even assuming that respondents were initially hired as
project/contractual employees who were paid per drama or per
project/contract, the engagement of their services for 2 to 25 years justify
their classification as regular employees, their services being deemed
indispensable to the business of petitioner.

Same; Dismissals; In labor cases, the employer has the burden of

proving that the dismissal was for a just cause; failure to show this
would necessarily mean that the dismissal was unjustified and,
therefore, illegal.—We find that respondents were illegally dismissed. In
labor cases, the employer has the burden of proving that the dismissal was
for a just cause; failure to show this would necessarily mean that the
dismissal was unjustified and, therefore, illegal. To allow an employer to
dismiss an employee based on mere allegations and generalities would
place the employee at the mercy of his employer; and the right to security
of tenure, which this Court is bound to protect, would be unduly
emasculated. In this case, petitioner merely contended that it was
respondents who ceased to report to work, and never presented any
substantial evidence to support said allegation. Petitioner therefore failed
to discharge its burden, hence, respondents were correctly declared to
have been illegally dismissed.
 Same; Same; If doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in
favor of the latter—the employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable cause.—If
doubts exist between the evidence presented by the employer and the
employee, the scales of justice must be tilted in favor of the latter—the
employer must affirmatively show rationally adequate evidence that the
dismissal was for a justifiable cause. It is a timehonored rule that in
controversies between a laborer and his master, doubts reasonably arising
from the evidence should be resolved in the former’s favor. The policy is to
extend the doctrine to a greater number of employees who can avail of the
benefits under the law, which is in consonance with the avowed policy of
the State to give maximum aid and protection of labor.

Strained Relations Doctrine; In the event that reinstatement is no

longer feasible, or if the employee decides not to be reinstated, the
employer shall pay him separation pay in lieu of reinstatement—
When a person is illegally dismissed, he is entitled to reinstatement
without loss of seniority rights and other privileges and to his full
backwages. In the event, however, that reinstatement is no longer feasible,
or if the employee decides not to be reinstated, the employer shall pay him
separation pay in lieu of reinstatement. Such a rule is likewise observed
in the case of a strained employer-employee relationship or when the work
or position formerly held by the dismissed employee no longer exists. In
sum, an illegally dismissed employee is entitled to: (1) either reinstatement
if viable or separation pay if reinstatement is no longer viable, and (2)
backwages. In the instant controversy, reinstatement is no longer viable
considering the strained relations between petitioner and respondents. As
admitted by the latter, the complaint filed before the DOLE strained their
relations with petitioner who eventually dismissed them from service.
Payment of separation pay instead of reinstatement would thus better
promote the interest of both parties.

E. G.R. No. 162833

June 15, 2007
LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI NG ALYANSA-
PINAGBUKLOD NG MANGGAGAWANG PROMO NG BURLINGAME,
petitioner, vs. BURLINGAME CORPORATION

Labor Law; Job Contracting; Conditions to be considered in

determining job contracting.—The case of De Los Santos v. NLRC, 372
SCRA 723 (2001), succinctly enunciates the statutory criteria: Job
 contracting is permissible only if the following conditions are met: 1) the
contractor carries on an independent business and undertakes the
contract work on his own 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 the
work except as to the results thereof; and 2) the contractor has substantial
capital or investment in the form of tools, equipment, machineries, work
premises, and other materials which are necessary in the conduct of the
business.

Same; Employer-Employee Relationship; Elements to Determine the

Existence of an Employment Relationship.—The “four-fold test” will
show that respondent is the employer of petitioner’s members. The
elements to determine the existence of an employment relationship are: (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’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.

Same; Same; In labor-only contracting, the law creates an employer-

employee relationship to prevent a circumvention of labor laws;
Contractor is considered merely an agent of the principal employer
and the latter is responsible to the employees of the labor-only
contractor as if such employees had been directly employed by the
principal employer.—Under this circumstance, there is no doubt that F.
Garil was engaged in labor-only contracting, and as such, is considered
merely an agent of Burlingame. In labor-only contracting, the law creates
an employer-employee relationship to prevent a circumvention of labor
laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only
contractor as if such employees had been directly employed by the
principal employer. Since F. Garil is a labor-only contractor, the workers
it supplied should be considered as employees of Burlingame in the eyes
of the law.

F. G.R. No. 162813

February 12, 2007
FAR EAST AGRICULTURAL SUPPLY, INC. and/or ALEXANDER UY, vs.
JIMMY LEBATIQUE and THE HONORABLE COURT OF APPEALS
Labor Law; Illegal Dismissals; Abandonment; To constitute
abandonment as a just cause for dismissal, there must be: a) absence
without justifiable reason; and b) a clear intention, as manifested by
some overt act, to sever the employer-employee relationship.—It is
well-settled that in cases of illegal dismissal, the burden is on the employer
to prove that the termination was for a valid cause. In this case, petitioners
failed to discharge such burden. Petitioners aver that Lebatique was
merely suspended for one day but he abandoned his work thereafter. To
constitute abandonment as a just cause for dismissal, there must be: (a)
absence without justifiable reason; and (b) a clear intention, as manifested
by some overt act, to sever the employer-employee relationship.

Same; Same; Same; An employee who takes steps to protest his layoff
cannot by any stretch of imagination be said to have abandoned his
work and the filing of the complaint is proof enough of his desire to
return to work, thus negating any suggestion of abandonment—a
contrary notion would not only be illogical but also absurd.—An
employee who takes steps to protest his layoff cannot by any stretch of
imagination be said to have abandoned his work and the filing of the
complaint is proof enough of his desire to return to work, thus negating
any suggestion of abandonment. A contrary notion would not only be
illogical but also absurd.

Same; Field Personnel; Words and Phrases; Field personnel shall refer
to non-agricultural employees who regularly perform their duties
away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be
determined with reasonable certainty.—“Field personnel” shall refer to
non-agricultural employees who regularly perform their duties away from
the principal place of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with reasonable
certainty.

Same; Same; In Auto Bus Transport Systems, Inc. v. Bautista [458

SCRA 578, 2005], this Court emphasized that the definition of a field
personnel is not merely concerned with the location where the
employee regularly performs his duties but also with the fact that the
employee’s performance is unsupervised by the employer.—In Auto
Bus Transport Systems, Inc. v. Bautista, 458 SCRA 578 (2005), this Court
emphasized that the definition of a “field personnel” is not merely
concerned with the location where the employee regularly performs his
duties but also with the fact that the employee’s performance is
 unsupervised by the employer. We held that field personnel are those who
regularly perform their duties away from the principal place of business of
the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty. Thus, in order to determine whether
an employee is a field employee, it is also necessary to ascertain if actual
hours of work in the field can be determined with reasonable certainty by
the employer. In so doing, an inquiry must be made as to whether or not
the employee’s time and performance are constantly supervised by the
employer.

Same; Employees’ Compensation; Employer-Employee Relationship;

Drivers like Lebatique, are under the control and supervision of
management officers. Lebatique, therefore, is a regular employee
whose tasks are usually necessary and desirable to the usual trade
and business of the company. Thus, he is entitled to the benefits
accorded to regular employees of Far East, including overtime pay
and service incentive leave pay.—Drivers, like Lebatique, are under the
control and supervision of management officers. Lebatique, therefore, is a
regular employee whose tasks are usually necessary and desirable to the
usual trade and business of the company. Thus, he is entitled to the
benefits accorded to regular employees of Far East, including overtime pay
and service incentive leave pay.

Same; Same; The amount that can only be demanded by the aggrieved
employee shall be limited to the amount of the benefits withheld
within three years before the filing of the complaint.—The amount that
can only be demanded by the aggrieved employee shall be limited to the
amount of the benefits withheld within three years before the filing of the
complaint.

G. G.R. No. 156146

June 21, 2007.
OLONGAPO MAINTENANCE SERVICES, INC., vs. EDGARDO B.
CHANTENGCO et al

Labor Law; Regular and Project Employees; A true project employee

should be assigned to a project which begins and ends at determined
or determinable times, and be informed thereof at the time of
hiring.—The principal test in determining whether an employee is a
project employee is whether he/she is assigned to carry out a “specific
project or undertaking,” the duration and scope of which are specified at
the time the employee is engaged in the project, or where the work or
 service to be performed is seasonal in nature and the employment is for
the duration of the season. A true project employee should be assigned to
a project which begins and ends at determined or determinable times, and
be informed thereof at the time of hiring.

Same; Same; Evidence; Appeals; The practice of submitting evidence

late—like in a motion for reconsideration before the Court of
Appeals—cannot be tolerated, for it defeats the speedy administration
of justice involving poor workers, aside from being unfair.—In the
instant case, the record is bereft of proof that the respondents’ engagement
as project employees has been predetermined, as required by law. We
agree with the Court of Appeals that OMSI did not provide convincing
evidence that respondents were informed that they were to be assigned to
a “specific project or undertaking” when OMSI hired them. Notably, the
employment contracts for the specific project signed by the respondents
were never presented. All that OMSI submitted in the proceedings a quo
are the service contracts between OMSI and the MIAA. Clearly, OMSI
utterly failed to establish by substantial evidence that, indeed,
respondents were project employees and their employment was
coterminous with the MIAA contract. Evidently cognizant of such neglect,
OMSI attempted to correct the situation by attaching copies of the
application forms of the respondents to its motion for reconsideration of
the Court of Appeals’ Decision. Such practice cannot be tolerated. This
practice of submitting evidence late is properly rejected as it defeats the
speedy administration of justice involving poor workers. It is also unfair.

Same; Same; Same; Employers who hire project employees are

mandated to state and, once its veracity is challenged, to prove the
actual basis for the latter’s dismissal.—In termination cases, the burden
of proof rests on the employer to show that the dismissal is for a just cause.
Thus, employers who hire project employees are mandated to state and,
once its veracity is challenged, to prove the actual basis for the latter’s
dismissal. Unfortunately for OMSI, it failed to discharge the burden. All
that we have is OMSI’s selfserving assertion that the respondents were
hired as project employees.

H. G.R. No. 167622

November 7, 2008
GREGORIO V. TONGKO, vs. THE MANUFACTURERS LIFE INSURANCE
CO. (PHILS.), INC. and RENATO A. VERGEL DE DIOS
Labor Law; Employer-Employee Relationship; Four-fold test to
determine the existence of the elements of an employer-employee
relationship.—In the determination of whether an employer-employee
relationship exists between two parties, this Court applies the four-fold
test to determine the existence of the elements of such relationship. In
Pacific Consultants International Asia, Inc. v. Schonfeld, 516 SCRA 209,
228 (2007), the Court set out the elements of an employer-employee
relationship, thus: Jurisprudence is firmly settled that whenever the
existence of an employment relationship is in dispute, four elements
constitute the reliable yardstick: (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’s conduct. It is the so-called
“control test” which constitutes the most important index of the existence
of the employer-employee relationship that is, whether the employer
controls or has reserved the right to control the employee not only as to
the result of the work to be done but also as to the means and methods by
which the same is to be accomplished. Stated otherwise, an employer-
employee relationship exists where the person for whom the services are
performed reserves the right to control not only the end to be achieved but
also the means to be used in reaching such end.

Same; Same; Control not only applies to the work or goal to be done
but also to the means and methods to accomplish it; Not all forms of
control would establish an employer-employee relationship.—An
impasse appears to have been reached between the CA and the NLRC on
the sole issue of control over an employee’s conduct. It bears clarifying
that such control not only applies to the work or goal to be done but also
to the means and methods to accomplish it. In Sonza v. ABS-CBN
Broadcasting Corporation, 431 SCRA 583 (2004), we explained that not all
forms of control would establish an employer-employee relationship, to
wit: Further, not every form of control that a party reserves to himself over
the conduct of the other party in relation to the services being rendered
may be accorded the effect of establishing an employer-employee
relationship. The facts of this case fall squarely with the case of Insular
Life Assurance Co., Ltd. vs. NLRC, 179 SCRA 459 (1989). In said case, we
held that: Logically, the line should be drawn between rules that merely
serve as guidelines towards the achievement of the mutually desired result
without dictating the means or methods to be employed in attaining it, and
those that control or fix the methodology and bind or restrict the party
hired to the use of such means. The first, which aim only to promote the
result, create no employer-employee relationship unlike the second, which
address both the result and the means used to achieve it.
Same; Same; Insurance Agents; If the specific rules and regulations
that are enforced against insurance agents or managers are such that
would directly affect the means and methods by which such agents
or managers would achieve the objectives set by the insurance
company, they are employees of the insurance company.—Based on
the foregoing cases, if the specific rules and regulations that are enforced
against insurance agents or managers are such that would directly affect
the means and methods by which such agents or managers would achieve
the objectives set by the insurance company, they are employees of the
insurance company. In the instant case, Manulife had the power of control
over Tongko that would make him its employee. Several factors contribute
to this conclusion.

Same; Termination of Employment; Burden of Proof; When there is no

showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal
and the burden is on the employer to prove that the termination was
for a valid or authorized cause.—In Quebec, Sr. v. National Labor
Relations Commission, 301 SCRA 627 (1999), we ruled that: When there
is no showing of a clear, valid and legal cause for the termination of
employment, the law considers the matter a case of illegal dismissal and
the burden is on the employer to prove that the termination was for a valid
or authorized cause. This burden of proof appropriately lies on the
shoulders of the employer and not on the employee because a worker’s job
has some of the characteristics of property rights and is therefore within
the constitutional mantle of protection. 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 laws.

Same; Same; Backwages; An illegally dismissed employee shall be

entitled to backwages and separation pay, if reinstatement is no
longer viable.—In Triad Security & Allied Services, Inc. v. Ortega, Jr.
(Triad), 481 SCRA 591 (2006), we thus stated that an illegally dismissed
employee shall be entitled to backwages and separation pay, if
reinstatement is no longer viable: As the law now stands, an illegally
dismissed employee is entitled to two reliefs, namely: backwages and
reinstatement. These are separate and distinct from each other. However,
separation pay is granted where reinstatement is no longer feasible
because of strained relations between the employee and the employer. In
effect, an illegally dismissed employee is entitled to either reinstatement,
 if viable, or separation pay if reinstatement is no longer viable and
backwages.

I. G.R. No. 151309

October 15, 2008
BISIG MANGGAGAWA SA TRYCO and/or FRANCISCO SIQUIG, as
Union President, JOSELITO LARIÑO, VIVENCIO B. BARTE,
SATURNINO EGERA and SIMPLICIO AYA-AY, petitioners, vs.
NATIONAL LABOR RELATIONS COMMISSION, TRYCO PHARMA
CORPORATION, and/or WILFREDO C. RIVERA

Labor Law; Constructive Dismissals; Transfer of Employees; While the

law is solicitous of the welfare of 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.—Tryco’s
decision to transfer its production activities to San Rafael, Bulacan,
regardless of whether it was made pursuant to the letter of the Bureau of
Animal Industry, was within the scope of its inherent right to control and
manage its enterprise effectively. While the law is solicitous of the welfare
of 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.

Same; Same; Same; Management’s Prerogative; Management’s

prerogative of transferring and reassigning employees from one area
of operation to another in order to meet the requirements of the
business is, therefore, generally not constitutive of constructive
dismissal.—This prerogative extends to the management’s right to
regulate, according to its own discretion and judgment, all aspects of
employment, including the freedom to transfer and reassign employees
according to the requirements of its business. Management’s prerogative
of transferring and reassigning employees from one area of operation to
another in order to meet the requirements of the business is, therefore,
generally not constitutive of constructive dismissal. Thus, the consequent
transfer of Tryco’s personnel, assigned to the Production Department was
well within the scope of its management prerogative.

Same; Same; Same; Employer must show that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee, nor does
it involve a demotion in rank or a diminution of his salaries, privileges
and other benefits.—When the transfer is not unreasonable, or
 inconvenient, or prejudicial to the employee, and it does not involve a
demotion in rank or diminution of salaries, benefits, and other privileges,
the employee may not complain that it amounts to a constructive
dismissal. However, the employer has the burden of proving that the
transfer of an employee is for valid and legitimate grounds. The employer
must show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits.

Same; Same; Same; Mere incidental inconvenience is not sufficient to

warrant a claim of constructive dismissal.—In the instant case, the
transfer orders do not entail a demotion in rank or diminution of salaries,
benefits and other privileges of the petitioners. Petitioners, therefore,
anchor their objection solely on the ground that it would cause them great
inconvenience since they are all residents of Metro Manila and they would
incur additional expenses to travel daily from Manila to Bulacan. The
Court has previously declared that mere incidental inconvenience is not
sufficient to warrant a claim of constructive dismissal. Objection to a
transfer that is grounded solely upon the personal inconvenience or
hardship that will be caused to the employee by reason of the transfer is
not a valid reason to disobey an order of transfer.

Same; Unfair Labor Practices; Collective Bargaining Agreement; Unfair

labor practice refers to acts that violate the workers’ right to
organize; Without that element, the acts, no matter how unfair, are
not unfair labor practices.—There was no showing or any indication that
the transfer orders were motivated by an intention to interfere with the
petitioners’ right to organize. Unfair labor practice refers to acts that
violate the workers’ right to organize. With the exception of Article 248(f)
of the Labor Code of the Philippines, the prohibited acts are related to the
workers’ right to self-organization and to the observance of a CBA. Without
that element, the acts, no matter how unfair, are not unfair labor
practices.

J. G.R. No. 157680

October 8, 2008
EQUIPMENT TECHNICAL SERVICES or JOSEPH JAMES DEQUITO, vs.
COURT OF APPEALS, ALEX ALBINO et al.

Labor Law; Project Employees; The service of project employees are

coterminous with the project and may be terminated upon the end or
completion of that project or project phase for which they were hired;
The principal test for determining whether an employee is properly
characterized as “project employee” as distinguished from “regular
employee” is whether or not “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 employees were engaged for
that project; Definition of a Regular Employee vis-à-vis a Project
Employee.—As the Court has consistently held, the service of project
employees are coterminus with the project and may be terminated upon
the end or completion of that project or project phase for which they were
hired. Regular employees, in contrast, enjoy security of tenure and are
entitled to hold on to their work or position until their services are
terminated by any of the modes recognized under the Labor Code. The
principal test for determining whether an employee is properly
characterized as “project employee,” as distinguished from “regular
employee,” is whether or not “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 employees were engaged for that project. And
as Article 280 of the Labor Code, defining a regular employee vis-à-vis a
project employee, would have it: Art. 280. Regular and casual
employment.—The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer, except where the 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 x x x.

Same; Same; Where the employment of project employees is extended

long after the supposed project had been finished, the employees are
removed from the scope of project employees and they shall be
considered regular employees.—The Court can allow that, in the instant
case, private respondents may have initially been hired for specific projects
or undertaking of petitioner ETS and, hence, may be classified as project
employees. Their repeated rehiring to perform tasks necessary to the usual
trade or business of ETS changed the legal situation altogether, for in the
later instance, their continuous rehiring took them out from the scope of
workers coterminus with specific projects and had made them regular
employees. We said as much in Phesco, Inc. v. NLRC, 239 SCRA 446
(1994), that “where the employment of project employees is extended long
after the supposed project had been finished, the employees are removed
 from the scope of project employees and they shall be considered regular
employees.”

Same; Same; The constitutionally protected right of labor to security

of tenure covers both regular and project workers; Their termination
must be for lawful cause and must be done in a way which affords
them proper notice and hearing.—Petitioners’ assertion that there can
be no illegal dismissal of project employees inasmuch as they are not
entitled to security of tenure is inaccurate. The constitutionally-protected
right of labor to security of tenure covers both regular and project workers.
Their termination must be for lawful cause and must be done in a way
which affords them proper notice and hearing.

Same; Illegal Dismissals; 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.—In termination disputes, the burden
of proving that an employee had been dismissed for a lawful cause or that
the exacting procedural requirements under the Labor Code had been
complied with lies with the employer. 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.

K. G.R. No. 195466

July 2, 2014
ARIEL L. DAVID, doing business under the name and style “YIELS
HOG DEALER,” vs. JOHN G. MACASIO

Remedial Law; Civil Procedure; Appeals; Petition for Review on

Certiorari; In this Rule 45 petition for review on certiorari of the
Court of Appeals’ (CA’s) decision rendered under a Rule 65
proceeding, the Supreme Court’s (SC’s) power of review is limited to
resolving matters pertaining to any perceived legal errors that the CA
may have committed in issuing the assailed decision.—In this Rule 45
petition for review on certiorari of the CA’s decision rendered under a Rule
65 proceeding, this Court’s power of review is limited to resolving matters
pertaining to any perceived legal errors that the CA may have committed
in issuing the assailed decision. This is in contrast with the review for
jurisdictional errors, which we undertake in an original certiorari action.
In reviewing the legal correctness of the CA decision, we examine the CA
decision based on how it determined the presence or absence of grave
abuse of discretion in the NLRC decision before it and not on the basis of
whether the NLRC decision on the merits of the case was correct. In other
words, we have to be keenly aware that the CA undertook a Rule 65 review,
not a review on appeal, of the NLRC decision challenged before it.

Labor Law; Pakyaw Basis; Engagement on “pakyaw” or task basis does

not characterize the relationship that may exist between the parties,
i.e., whether one of employment or independent contractorship.—
Engagement on “pakyaw” or task basis does not characterize the
relationship that may exist between the parties, i.e., whether one of
employment or independent contractorship. Article 97(6) of the Labor Code
defines wages as “x x x the 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
services rendered or to be rendered[.]” In relation to Article 97(6), Article
101 of the Labor Code speaks of workers paid by results or those whose
pay is calculated in terms of the quantity or quality of their work output
which includes “pakyaw” work and other non-time work.

Same; Employer-Employee Relationship; Elements of.—To determine

the existence of an employer-employee relationship, four elements
generally need to be considered, namely: (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 employee’s conduct. These elements or
indicators comprise the so-called “four-fold” test of employment
relationship. Macasio’s relationship with David satisfies this test.

Same; Pakyaw Basis; A distinguishing characteristic of “pakyaw” or

task basis engagement, as opposed to straight-hour wage payment, is
the non-consideration of the time spent in working.—A distinguishing
characteristic of “pakyaw” or task basis engagement, as opposed to
straight-hour wage payment, is the non-consideration of the time spent in
working. In a task-basis work, the emphasis is on the task itself, in the
sense that payment is reckoned in terms of completion of the work, not in
terms of the number of time spent in the completion of work. Once the
work or task is completed, the

Same; Holiday Pay; Service Incentive Leave Pay; Field Personnel;

Under the Implementing Rules and Regulations (IRR), exemption
from the coverage of holiday and Service Incentive Leave (SIL) pay
refer to “field personnel and other employees whose time and
performance is unsupervised by the employer including those who are
engaged on task or contract basis.”—The general rule is that holiday
and SIL pay provisions cover all employees. To be excluded from their
coverage, an employee must be one of those that these provisions expressly
exempt, strictly in accordance with the exemption. Under the IRR,
exemption from the coverage of holiday and SIL pay refer to “field
personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
contract basis[.]” Note that unlike Article 82 of the Labor Code, the IRR on
holiday and SIL pay do not exclude employees “engaged on task basis” as
a separate and distinct category from employees classified as “field
personnel.” Rather, these employees are altogether merged into one
classification of exempted employees. Because of this difference, it may be
argued that the Labor Code may be interpreted to mean that those who
are engaged on task basis, per se, are excluded from the SIL and holiday
payment since this is what the Labor Code provisions, in contrast with the
IRR, strongly suggest. The arguable interpretation of this rule may be
conceded to be within the discretion granted to the LA and NLRC as the
quasi-judicial bodies with expertise on labor matters.

Same; Same; Same; Same; Pakyaw Basis; The payment of an employee

on task or pakyaw basis alone is insufficient to exclude one from the
coverage of Service Incentive Leave (SIL) and holiday pay.—The
payment of an employee on task or pakyaw basis alone is insufficient to
exclude one from the coverage of SIL and holiday pay. They are exempted
from the coverage of Title I (including the holiday and SIL pay) only if they
qualify as “field personnel.” The IRR therefore validly qualifies and limits
the general exclusion of “workers paid by results” found in Article 82 from
the coverage of holiday and SIL pay. This is the only reasonable
interpretation since the determination of excluded workers who are paid
by results from the coverage of Title I is “determined by the Secretary of
Labor in appropriate regulations.”

Same; Same; Same; Same; In determining whether workers engaged on

“pakyaw” or task basis is entitled to holiday and Service Incentive
Leave (SIL) pay, the presence (or absence) of employer supervision as
regards the worker’s time and performance is the key.—In determining
whether workers engaged on “pakyaw” or task basis is entitled to holiday
and SIL pay, the presence (or absence) of employer supervision as regards
the worker’s time and performance is the key: if the worker is simply
engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions
specifically provided under Article 94 (holiday pay) and Article 95 (SIL pay)
 of the Labor Code. However, if the worker engaged on pakyaw or task basis
also falls within the meaning of “field personnel” under the law, then he is
not entitled to these monetary benefits.

Same; 13th Month Pay; As with holiday and service incentive leave
pay, 13th month pay benefits generally cover all employees; an
employee must be one of those expressly enumerated to be exempted.
Section 3 of the Rules and Regulations Implementing Presidential
Decree (P.D.) No. 851 enumerates the exemptions from the coverage
of 13th month pay benefits.—The governing law on 13th month pay is
PD No. 851. As with holiday and SIL pay, 13th month pay benefits
generally cover all employees; an employee must be one of those expressly
enumerated to be exempted. Section 3 of the Rules and Regulations
Implementing P.D. No. 851 enumerates the exemptions from the coverage
of 13th month pay benefits. Under Section 3(e), “employers of those who
are paid on x x x task basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the
performance thereof” are exempted. Note that unlike the IRR of the Labor
Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations
Implementing PD No. 851 exempts employees “paid on task basis” without
any reference to “field personnel.” This could only mean that insofar as
payment of the 13th month pay is concerned, the law did not intend to
qualify the exemption from its coverage with the requirement that the task
worker be a “field personnel” at the same time.

V. Pages 304 to 409 Labor Code

Labor Advisory Bpard on Payment of Salalries thru ATM
Department Order No. 174
Wage Order No. NCR – 21 and it Implementing Rules

CASES:

A. G.R. No. 198783

April 15, 2013
ROYAL PLANT WORKERS UNION vs. COCA-COLA BOTTLERS
PHILIPPINES, INC.-CEBU PLANT
Remedial Law; Civil Procedure; Appeals; Voluntary Arbitrators; A
decision or award of a voluntary arbitrator is appealable to the
Court of Appeals (CA) via a petition for review under Rule 43.―This
procedural issue being debated upon is not novel. The Court has
already ruled in a number of cases that a decision or award of a
voluntary arbitrator is appealable to the CA via a petition for review
under Rule 43. The recent case of Samahan Ng Mga Manggagawa Sa
Hyatt (SAMASAH-NUWHRAIN) v. Hon. Voluntary Arbitrator
Buenaventura C. Magsalin and Hotel Enterprises of the Philippines,
650 SCRA 445 (2011), reiterated the well-settled doctrine on this issue.

Labor Law; Management Prerogatives; The Court has held that

management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place, and manner of work,
processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of
workers, and discipline, dismissal and recall of workers.—The Court
has held that management is free to regulate, according to its own
discretion and judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place, and manner of work,
processes to be followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of workers, and
discipline, dismissal and recall of workers. The exercise of management
prerogative, however, is not absolute as it must be exercised in good
faith and with due regard to the rights of labor.

Same; Labor Standards; There is no law that requires employers to

provide chairs for bottling operators. The Labor Code, specifically
Article 132 thereof, only requires employers to provide seats for
women. No similar requirement is mandated for men or male
workers.—The rights of the Union under any labor law were not
violated. There is no law that requires employers to provide chairs for
bottling operators. The CA correctly ruled that the Labor Code,
specifically Article 132 thereof, only requires employers to provide seats
for women. No similar requirement is mandated for men or male
workers. It must be stressed that all concerned bottling operators in
this case are men. There was no violation either of the Health, Safety
and Social Welfare Benefit provisions under Book IV of the Labor Code
of the Philippines. As shown in the foregoing, the removal of the chairs
was compensated by the reduction of the working hours and increase
in the rest period. The directive did not expose the bottling operators to
safety and health hazards. The Union should not complain too much
about standing and moving about for one and one-half (1 ½) hours
because studies show that sitting in workplaces for a long time is
hazardous to one’s health. The report of VicHealth, Australia, disclosed
that “prolonged workplace sitting is an emerging public health and
occupational health issue with serious implications for the health of
our working population. Importantly, prolonged sitting is a risk factor
for poor health and early death, even among those who meet, or exceed,
national activity guidelines.”

Same; Same; Non-Diminution of Benefits; The operators’ chairs

cannot be considered as one of the employee benefits covered in
Article 100 of the Labor Code. In the Court’s view, the term
“benefits” mentioned in the non-diminution rule refers to
monetary benefits or privileges given to the employee with
monetary equivalents. Such benefits or privileges form part of the
employees’ wage, salary or compensation making them
enforceable obligations.—The operators’ chairs cannot be considered
as one of the employee benefits covered in Article 100 of the Labor Code.
In the Court’s view, the term “benefits” mentioned in the non-
diminution rule refers to monetary benefits or privileges given to the
employee with monetary equivalents. Such benefits or privileges form
part of the employees’ wage, salary or compensation making them
enforceable obligations. This Court has already decided several cases
regarding the non-diminution rule where the benefits or privileges
involved in those cases mainly concern monetary considerations or
privileges with monetary equivalents. Some of these cases are: Eastern
Telecommunication Phils. Inc. v. Eastern Telecoms Employees Union,
665 SCRA 516 (2012), where the case involves the payment of 14th,
15th and 16th month bonuses; Central Azucarera De Tarlac v. Central
Azucarera De Tarlac Labor Union-NLU, 625 SCRA 622 (2010),
regarding the 13th month pay, legal/special holiday pay, night
premium pay and vacation and sick leaves; TSPIC Corp. v. TSPIC
Employees Union, 545 SCRA 215 (2008), regarding salary wage
increases; and American Wire and Cable Daily Employees Union vs.
American Wire and Cable Company, Inc., 457 SCRA 684 (2005),
involving service awards with cash incentives, premium pay, Christmas
party with incidental benefits and promotional increase.

Same; Management Prerogatives; The Supreme Court often

declines to interfere in legitimate business decisions of employers.
 The law must protect not only the welfare of the employees, but
also the right of the employers.—Jurisprudence recognizes the
exercise of management prerogatives. Labor laws also discourage
interference with an employer’s judgment in the conduct of its
business. For this reason, the Court often declines to interfere in
legitimate business decisions of employers. The law must protect not
only the welfare of the employees, but also the right of the employers.

B. G.R. No. 145402

March 14, 2008
MERALCO INDUSTRIAL ENGINEERING SERVICES CORPORATION,
petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION,
OFELIA P. LANDRITO GENERAL SERVICES and/or OFELIA P.
LANDRITO

Judgments; Law of the Case; Words and Phrases; Law of the case
has been defined as the opinion delivered on a former appeal—it is
a term applied to an established rule that when an appellate court
passes on a question and remands the case to the lower court for
further proceedings, the question there settled becomes the law of
the case upon subsequent appeal.—Law of the case has been defined
as the opinion delivered on a former appeal. It is a term applied to an
established rule that when an appellate court passes on a question and
remands the case to the lower court for further proceedings, the
question there settled becomes the law of the case upon subsequent
appeal. It means that whatever is once irrevocably established as the
controlling legal rule or decision between the same parties in the same
case continues to be the law of the case, whether correct on general
principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court. Indeed,
courts must adhere thereto, whether the legal principles laid down were
“correct on general principles or not” or “whether the question is right
or wrong” because public policy, judicial orderliness and economy
require such stability in the final judgments of courts or tribunals of
competent jurisdiction.

Labor Law; Labor Standards; Independent Contractors; Indirect

Employers; An indirect employer (as defined by Article 107 of the
Labor Code) can only be held solidarily liable with the independent
contractor or subcontractor (as provided under Article 109) in the
event that the latter fails to pay the wages of its employees (as
described in Article 106)—it cannot be held liable in the same way
as the employer in every respect but only for purposes of unpaid
wages.—The Court of Appeals indeed erred when it ruled that the
petitioner was jointly and solidarily liable with the private respondents
as regards the payment of separation pay. The appellate court used as
basis Article 109 of the Labor Code, as amended, in holding the
petitioner solidarily liable with the private respondents for the payment
of separation pay: ART. 109. Solidary Liability.—The provisions of
existing laws to the contrary notwithstanding, every employer or
indirect employer shall be held responsible with his contractor or
subcontractor for any violation of any provision of this Code. For
purposes of determining the extent of their civil liability under this
Chapter, they shall be considered as direct employers. [Emphasis
supplied]. However, the afore-quoted provision must be read in
conjunction with Articles 106 and 107 of the Labor Code, as amended.
Article 107 of the Labor Code, as amended, defines an indirect employer
as “any person, partnership, association or corporation which, not
being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.” To ensure that the
contractor’s employees are paid their appropriate wages, Article 106 of
the Labor Code, as amended, provides: ART. 106. CONTRACTOR OR
SUBCONTRACTOR.—x x x. 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. [Emphasis
supplied]. Taken together, an indirect employer (as defined by Article
107) can only be held solidarily liable with the independent contractor
or subcontractor (as provided under Article 109) in the event that the
latter fails to pay the wages of its employees (as described in Article
106). Hence, while it is true that the petitioner was the indirect
employer of the complainants, it cannot be held liable in the same way
as the employer in every respect. The petitioner may be considered an
indirect employer only for purposes of unpaid wages.

Same; Same; Same; Same; Backwages; The only instance when the
principal can also be held liable with the independent contractor
or subcontractor for the backwages and separation pay of the
latter’s employees is when there is proof that the principal
conspired with the independent contractor or subcontractor in the
illegal dismissal of the employees.—There is no question that private
respondents are operating as an independent contractor and that the
complainants were their employees. There was no employer-employee
relationship that existed between the petitioner and the complainants
and, thus, the former could not have dismissed the latter from
employment. Only private respondents, as the complainants’ employer,
can terminate their services, and should it be done illegally, be held
liable therefor. The only instance when the principal can also be held
liable with the independent contractor or subcontractor for the
backwages and separation pay of the latter’s employees is when there
is proof that the principal conspired with the independent contractor
or subcontractor in the illegal dismissal of the employees.

Same; Same; Same; Same; Obligations and Contracts; It is basic that

a contract is the law between the parties and the stipulations
therein, provided that they are not contrary to law, morals, good
customs, public order or public policy, shall be binding as between
the parties—if the contract does not provide for a particular
liability, the Court cannot just read the same into the contract
without possibly violating the intention of the parties.—Neither can
the liability for the separation pay of the complainants be extended to
the petitioner based on contract. Contract Order No. 166-84 executed
between the petitioner and the private respondents contains no
provision for separation pay in the event that the petitioner terminates
the same. It is basic that a contract is the law between the parties and
the stipulations therein, provided that they are not contrary to law,
morals, good customs, public order or public policy, shall be binding
as between the parties. Hence, if the contract does not provide for such
a liability, this Court cannot just read the same into the contract
without possibly violating the intention of the parties.

Same; Same; Same; Same; The joint and several liability of the
principal with the contractor and subcontractor was enacted to
ensure compliance with the provisions of the Labor Code,
principally those on statutory minimum wage, facilitating, if not
guaranteeing, payment of the workers’ compensation, thus, giving
the workers ample protection as mandated by the 1987
Constitution; While the Supreme Court had previously ruled that
the indirect employer can recover whatever amount it had paid to
the employees in accordance with the terms of the service
contract between itself and the contractor, the said ruling cannot
be applied in reverse to this case as to allow the independent
contractor, who paid for the judgment awards in full, to recover
from the indirect employer.—In this case, however, private
 respondents had already posted a surety bond in an amount sufficient
to cover all the judgment awards due the complainants, including those
for underpayment of wages and non-payment of overtime pay. The joint
and several liability of the principal with the contractor and
subcontractor were enacted to ensure compliance with the provisions
of the Labor Code, principally those on statutory minimum wage. This
liability facilitates, if not guarantees, payment of the workers’
compensation, thus, giving the workers ample protection as mandated
by the 1987 Constitution. With private respondents’ surety bond, it can
therefore be said that the purpose of the Labor Code provision on the
solidary liability of the indirect employer is already accomplished since
the interest of the complainants are already adequately protected.
Consequently, it will be futile to continuously hold the petitioner jointly
and solidarily liable with the private respondents for the judgment
awards for underpayment of wages and non-payment of overtime pay.
But while this Court had previously ruled that the indirect employer
can recover whatever amount it had paid to the employees in
accordance with the terms of the service contract between itself and the
contractor, the said ruling cannot be applied in reverse to this case as
to allow the private respondents (the independent contractor), who paid
for the judgment awards in full, to recover from the petitioner (the
indirect employer).

C. G.R. No. 146408

February 29, 2008
PHILIPPINE AIRLINES, INC., vs. ENRIQUE LIGAN, EMELITO SOCO et
al.

Labor Law; Labor-Only Contracting; Legitimate contracting and

labor-only contracting are defined in Department Order (D.O.) No.
18-02, series of 2002 (Rules Implementing Articles 106 to 109 of
the Labor Code, as amended).—Legitimate contracting and labor-only
contracting are defined in Department Order (D.O.) No. 18-02, Series
of 2002 (Rules Implementing Articles 106 to 109 of the Labor Code, as
amended) as follows: Section 3. Trilateral relationship in contracting
arrangements. In legitimate contracting, there exists a trilateral
relationship under which there is a contract for a specific job, work or
service between the principal and the contractor or subcontractor, and
a contract of employment between the contractor or subcontractor and
its workers. Hence, there are three parties involved in these
arrangements, the principal which decides to farm out a job or service
to a contractor or subcontractor, the contractor or subcontractor which
has the capacity to independently undertake the performance of the
job, work or service, and the contractual workers engaged by the
contractor or subcontractor to accomplish the job, work or service.
(Emphasis and italics supplied) 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 [sic] 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 over the performance of the work of the contractual
employee.

Same; Same; For labor-only contracting to exist, Section 5 of D.O.

No. 18-02 requires any two of the elements to be present.—For
labor-only contracting to exist, Section 5 of D.O. No. 18-02 which
requires any of two elements to be present is, for convenience, re-
quoted: (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 over the performance of the work
of the contractual employee.

Same; Same; One who claims to be an independent contractor has

to prove that he contracted to do the work according to his own
methods and without being subject to the employer’s control
except only as to the results.—One who claims to be an independent
contractor has to prove that he contracted to do the work according to
his own methods and without being subject to the employer’s control
except only as to the results.

Same; Same; Respondents having performed tasks which are

usually necessary and desirable in the air transportation business
of petitioner, they should be deemed its regular employees and
Synergy as a labor-only contractor.—Respondents having performed
tasks which are usually necessary and desirable in the air
 transportation business of petitioner, they should be deemed its regular
employees and Synergy as a labor-only contractor. The express
provision in the Agreement that Synergy was an independent
contractor and there would be “no employer-employee relationship
between [Synergy] and/or its employees on one hand, and [petitioner]
on the other hand” is not legally binding and conclusive as contractual
provisions are not valid determinants of the existence of such
relationship. For it is the totality of the facts and surrounding
circumstances of the case which is determinative of the parties’
relationship.

D. G.R. No. 177785

September 3, 2008
RANDY ALMEDA, EDWIN M. AUDENCIAL, NOLIE D. RAMIREZ,
ERNESTO M. CALICAGAN and REYNALDO M. CALICAGAN, vs.
ASAHI GLASS PHILIPPINES, INC.,

Labor Law; Subcontracting; Permissible job contracting or

subcontracting refers to an arrangement whereby a principal
agrees to put out or farm out to a contractor or subcontractor the
performance or completion 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.—Permissible job contracting or
subcontracting refers to an arrangement whereby a principal agrees to
put out or farm out to a contractor or subcontractor the performance
or completion 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. A person is considered engaged in legitimate job contracting
or subcontracting if the following conditions concur: (a) The contractor
or subcontractor 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,
and 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; (b) The contractor or subcontractor 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 and welfare benefits.
Same; Labor-only Contracting; Labor-only contracting, a prohibited
act, is an arrangement in which the contractor or subcontractor
merely recruits, supplies or places workers to perform a job, work
or service for a principal.—On the other hand, labor-only contracting,
a prohibited act, is an arrangement in which the contractor or
subcontractor merely recruits, supplies or places workers to perform a
job, work or service for a principal. In labor-only contracting, the
following elements are present: (a) The contractor or subcontractor does
not have substantial capital or investment to actually perform the job,
work or service under its own account and responsibility; (b) 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. In labor-only contracting, the statutes
create an employer-employee relationship for a comprehensive
purpose: to prevent circumvention of labor laws. The contractor is
considered as merely the agent of the principal employer and the latter
is responsible to the employees of the labor-only contractor as if such
employees are directly employed by the principal employer. Therefore,
if SSASI was a labor-only contractor, then respondent shall be
considered as the employer of petitioners who must bear the liability
for the dismissal of the latter, if any.

Same; Job Contracting; An important element of legitimate job

contracting is that the contractor has substantial capital or
investment, which respondent failed to prove.—An important
element of legitimate job contracting is that the contractor has
substantial capital or investment, which respondent failed to prove.
There is a dearth of evidence to prove that SSASI possessed substantial
capital or investment when respondent began contractual relations
with it more than a decade before 2003. Respondent’s bare allegations,
without supporting proof that SSASI had substantial capital or
investment, do not sway this Court. The Court did not find a single
financial statement or record to attest to the economic status and
financial capacity of SSASI to venture into and sustain its own business
independent from petitioner.

Same; Employer-Employee Relationship; It is not essential for the

employer to actually supervise the performance of duties of the
employee; it is enough that the former has a right to wield the
power.—The Court finds that the crucial element of control over
petitioners rested in respondent. The power of control refers to the
authority of the employer to control the employee not only with regard
to the result of work to be done, but also to the means and methods by
which the work is to be accomplished. It should be borne in mind that
the power of control refers merely to the existence of the power and not
to the actual exercise thereof. It is not essential for the employer to
actually supervise the performance of duties of the employee; it is
enough that the former has a right to wield the power.

Same; Labor-only Contracting; San Sebastian Allied Services, Inc.

(SSASI) is a labor-only contractor; hence, it is considered as the
agent of respondent.—Despite respondent’s disavowal of the existence
of an employer-employee relationship between it and petitioners and its
unyielding insistence that petitioners were employees of SSASI, the
totality of the facts and the surrounding circumstances of the case
convey otherwise. SSASI is a labor-only contractor; hence, it is
considered as the agent of respondent. Respondent is deemed by law
as the employer of petitioners. Surely, respondent cannot expect this
Court to sustain its stance and accord full evidentiary weight to the
documentary evidence belatedly procured in its vain attempt to evade
liability as petitioners’ employer.

Same; Same; A party cannot dictate, by the mere expedient of a

unilateral declaration in a contract, the character of its business,
i.e., whether as labor–only contractor or as job contractor, it being
crucial that its character be measured in terms of and determined
by the criteria set by statute.—Equally unavailing is respondent’s
stance that its relationship with petitioners should be governed by the
Accreditation Agreement stipulating that petitioners were to remain
employees of SSASI and shall not become regular employees of the
respondent. To permit respondent to disguise the true nature of its
transactions with SSASI by the terms of its contract, for the purpose of
evading its liabilities under the law, would seriously impair the
administration of justice. A party cannot dictate, by the mere expedient
of a unilateral declaration in a contract, the character of its business,
i.e., whether as labor-only contractor or as job contractor, it being
crucial that its character be measured in terms of and determined by
the criteria set by statute.

Same; Same; Since San Sebastian Allied Services, Inc. (SSASI) was
a labor-only contractor, and petitioners were to be deemed the
employees of respondent, then the said reason would not
constitute a just or authorized cause for petitioners’ dismissal.—
 The sole reason given for the dismissal of petitioners by SSASI was the
termination of its service contract with respondent. But since SSASI
was a labor-only contractor, and petitioners were to be deemed the
employees of respondent, then the said reason would not constitute a
just or authorized cause for petitioners’ dismissal. It would then appear
that petitioners were summarily dismissed based on the afore-cited
reason, without compliance with the procedural due process for notice
and hearing.

E. G.R. No. 168537

December 11, 2008
DAMIAN AKLAN et al
vs. SAN MIGUEL CORPORATION, BMA PHILASIA, INC., and
ARLENE EUSEBIO

Labor Law; Labor-Only Contracting; Employer-Employee

Relationship; The existence of an employer-employee relationship
is ultimately a question of fact and the findings by the Labor
Arbiter and the National Labor Relations Commission (NLRC) on
that score shall be accorded not only respect but even finality
when supported by ample evidence.—A finding that a contractor is a
“labor-only” contractor, as opposed to permissible job contracting, is
equivalent to declaring that there is an employer-employee relationship
between the principal and the employees of the supposed contractor,
and the “labor-only” contractor is considered as a mere agent of the
principal, the real employer. Both the Labor Arbiter and the NLRC
found that the employment contracts of petitioners duly prove that an
employer-employee relationship existed between petitioners and BMA.
We hasten to add that the existence of an employer-employee
relationship is ultimately a question of fact and the findings by the
Labor Arbiter and the NLRC on that score shall be accorded not only
respect but even finality when supported by ample evidence.

Same; Same; Same; Elements to determine the existence of an

employer-employee relationship.—In its ruling, the NLRC considered
the following elements to determine the existence of an employer-
employee relationship: (1) the selection and engagement of the workers;
(2) power of dismissal; (3) the payment of wages by whatever means;
and (4) the power to control the worker’s conduct. All four elements
were found by the NLRC to be vested in BMA. This NLRC finding was
affirmed by the CA.
 Same; Quitclaims; Unless there is a showing that the employee
signed involuntarily or under duress, quitclaims and releases are
upheld by the Court as the law between the parties.—Unless there
is a showing that the employee signed involuntarily or under duress,
quitclaims and releases are upheld by this Court as the law between
the parties. If the agreement was voluntarily entered into by the
employee, with full understanding of what he was doing, and represents
a reasonable settlement of the claims of the employee, it is binding on
the parties and may not be later disowned simply because of a change
of mind.
VI Pages 410 to 499 Labor Code
Pages 137 – 182 Special Laws
RA 10151 Employment of Night Workers
RA 10361 Domestic Workers Act

VII Pages 507 to 584 Labord Code

VIII Pages 585 to 664 – Labor Code

RA 9165 – The Comprehensive Dangerous Drug Act

Art. V and VI
RA8504 – The Philippines Aids Prevention and Control Act of
1998, Section 6, 15, 16, 30, 31, 32, 35, and 45.

XI Pages 211 to 324

Cases:

A. No. L-15045
January 20, 1961
IN RE PETITION FOR EXEMPTION FROM COVERAGE BY THE
SOCIAL SECURITY SYSTEM. ROMAN CATHOLIC
ARCHBISHOP OF MANILA
vs. SOCIAL SECURITY COMMISSION
Social security; Scope of coverage.—The coverage of the Social
Security Law is predicated on the existence of an employer-
employee relationship of more or less permanent nature and
extends to employment of all kinds except those expressly
excluded.

Statutes; Ejusdem generis.—The rule of ejusdem generis

applies only where there is uncertainty. It is not controlling where
there the plain purpose and intent of the lawmaking body would
thereby be hindered and defeated.

Same; Social security; "Employer" includes charitable and

religious organizations.—The rule of ejusdem generis does not
apply to the definition of the term "employer" in the Social
Security Law. That definition is sufficiently comprehensive as to
include religious and charitable institutions or entities, not
organized for profit. It includes the Catholic Charities and all
religious and charitable institutions and organizations directly or
indirectly operated by the Roman Catholic Archbishop of Manila.

Same; Statutes; Effect of exception and amendment.—The

inclusion of religious and charitable institutions, not organized
for profit, within the definition of the term "employer" in the
Social Security Law is shown by the circumstance that said
institutions are not included in the exception contained in said
definition and by the fact that, while in the original law, services
performed for religious and charitable institutions were expressly
excluded from the coverage of the law, in the amendment, that
portion of the law was deleted.

Same; Social Security Law and Industrial Peace Act

contrasted.—The rule, that the Industrial Peace Act applies only
to industry and occupation for purposes of profit and gain, is not
applicable to the Social Security Law because the Industrial
Peace Act expressly limits its application to commercial,
industrial or agricultural establishments or enterprises.

Constitutional law; Social Security System involves private

funds.—The inclusion of religious organizations within the
coverage of the Social Security Law does not violate the
constitutional prohibition against the application of public funds
for the use, benefit or support of any priest employed by a
 religious organization. The funds contributed to the Social
Security System are not public funds but funds belonging to the
members which are merely held in trust by the Government.
Even assuming that said funds are impressed with a public
character, nevertheless, their payment as retirement, death or
disability benefits would not violate the said constitutional
prohibition since such payment would be made to the priest, not
because he is a priest but because he is an employee.

Religious organizations; Freedom to disseminate religious

information; Social security; Purpose; Constitutional
mandate.—The inclusion of religious organizations within the
coverage of the Social Security Law would not impair their right
to disseminate religious information. Their monthly
contributions, together with the employees' contributions, are
intended for the protection of said employees against the hazards
of disability, sickness, old age and death, This is in line with the
constitutional mandate to promote social justice to insure the
wellbeing and economic security of all the people.

B. No. L-21448
August 30, 1967
POBLETE CONSTRUCTION Co., vs. JUDITH ASIAIN, SOCIAL
SECURITY COMMISSION and BENITO MACRHON, in his
capacity as Sheriff of Rizal

Employer and employee; Social Security; Employer's duty to

report employee's name, etc. to Social Security System.—It
is the duty of the employer to "report immediately to the System"
the employee's name, age, civil status, occupation, salary and
dependents. Compliance with this duty does not depend upon
the employee's willingness to give his share of the contribution.
Section 24 of the Social Security Act is mandatory, to such an
extent, that if the employee should die or become sick or disabled
without the report having been made by the employer, the latter
is liable for an amount equivalent to the benefits to which the
employee would have been entitled had such report been made.

Same; The term "claims" in Section 5(a) of Social Security Act

includes claim for "damages" under Section 24 thereof.—
Section 5(a) of the Social Security Act provides that "the filing,
determination and settlement of claims shall be governed by the
 rules and regulations promulgated by the Commission"; and the
rules and regulations thus promulgated state that "the effectivity
of membership in the System, as well as the final determination
and settlement of claims, shall be vested in the Commission." the
term "claims" is broad enough to include a claim for "damages"
under Section 24. Otherwise, an employer could nullify the
jurisdiction of the Commission by the simple expedient of not
making a report as required by said Section.

Same; Collection of employee's share is duty imposed by law

on the employer.—The collection of the employee's share is a
duty imposed by law, and his unwillingness to have it deducted
from his salary does not excuse the employer's failure to make
the report required under Section 24 of" the law.

C. G.R. No. 119891

August 21, 1995
BEN STA. RITA, petitioner, vs. THE COURT OF APPEALS,
THE PEOPLE OF THE PHILIPPINES and THE SOCIAL
SECURITY SYSTEM

Appeals; The right to appeal is a statutory right and a party

who seeks to avail of the right must comply with the rules.—
It is well-settled in our jurisdiction that the right to appeal is a
statutory right and a party who seeks to avail of the right must
comply with the rules. These rules, particularly the statutory
requirement for perfecting an appeal within the reglementary
period laid down by law, must be strictly followed as they are
considered indispensable interdictions against needless delays
and for orderly discharge of judicial business. Petitioner’s failure
to seasonably file the Petition and its failure to comply with the
aforequoted Circulars of the Court necessitate the denial of the
Petition.

Social Security Law; Criminal Procedure; Pleadings and

Practice; The information is sufficient where it clearly states
the designation of the offense by the statute and the acts or
omissions complained of as constituting the offense.—The
Court agrees with the CA that the Information filed against
petitioner was sufficient as it clearly stated the designation of the
offense by the statute, i.e. violation of the Social Security Law,
and the acts or omissions complained of as constituting the
offense, i.e., petitioner’s failure to remit his contributions to the
SSS. The CA found that there is prima facie evidence to support
the allegations in the Information and to warrant the prosecution
of petitioner.

Same; Labor Law; Overseas Contract Workers; Seamen; The

Memorandum of Agreement between the Social Security
System and the Department of Labor and Employment
providing for coverage of Filipino seafarers by the SSS is not
an implementing rule or regulation of the Social Security
Commission which is subject to approval of the President—
the Agreement relates simply to the administrative
convenience of the two agencies of government.—What the
Memorandum of Agreement did was to record the understanding
between the SSS on the one hand and the DOLE on the other
hand that the latter would include among the provisions of the
Standard Contract of Employment required in case of overseas
employment, a stipulation providing for coverage of the Filipino
seafarer by the SSS. The Memorandum of Agreement is not an
implementing rule or regulation of the Social Security
Commission which, under Section 4(a) abovequoted, is subject to
the approval of the President. Indeed, as a matter of strict law,
the participation of the SSS in the establishment by the DOLE of
a uniform stipulation in the Standard Contract of Employment
for Filipino seafarers was not necessary; the Memorandum of
Agreement related simply to the administrative convenience of
the two (2) agencies of government.

Same; Same; Same; Same; Section 8(j)(5) of R.A. No. 1161, as

amended, simply defines the term “employment” and does not
in any way relate to the scope of coverage of the Social
Security System.—Moreover, the Court finds no merit in
petitioner’s contention that Section 8 (j) (5) of R.A. No. 1161, as
amended, absolutely exempts Filipino seafarers on board foreign
vessels from the coverage of the SSS statute. Section 8 (j) (5)
simply defines the term “employment” and does not in any way
relate to the scope of coverage of the Social Security System. That
coverage is, upon the other hand, set out in Section 9 of R.A. No.
1161 as amended, which defines the scope of SSS coverage.

Same; Same; Same; Same; The extension of the coverage of

the Social Security System to Filipino seafarers arises by
virtue of the assent given in the contract of employment
signed by the employer and seafarer.—Thus, the Standard
Contract of Employment to be entered into between foreign
shipowners and Filipino seafarers is the instrument by which the
former express their assent to the inclusion of the latter in the
coverage of the Social Security Act. In other words, the extension
of the coverage of the Social Security System to Filipino seafarers
arises by virtue of the assent given in the contract of employment
signed by employer and seafarer; that same contract binds
petitioner Sta. Rita or B. Sta. Rita Company, who is solidarily
liable with the foreign shipowners/employers.

Same; Same; Same; Same; Foreign shipowners and manning

agencies had generally expressed their conformity to the
inclusion of Filipino seafarers within the coverage of the
Social Security Act.—It may be noted that foreign shipowners
and manning agencies had generally expressed their conformity
to the inclusion of Filipino seafarers within the coverage of the
Social Security Act even prior to the signing of the DOLE-SSS
Memorandum of Agreement.

Same; Same; Same; Same; Protection to Labor; By extending

the benefits of the Social Security Act to Filipino seafarers
on board foreign vessels, the individual employment
agreements entered into with the stipulation for such
coverage contemplated in the DOLE-SSS Memorandum of
Agreement merely give effect to the constitutional mandate
to the State to afford protection to labor.—It is, finally, worthy
of special note that by extending the benefits of the Social
Security Act to Filipino seafarers on board foreign vessels, the
individual employment agreements entered into with the
stipulation for such coverage contemplated in the DOLE-SSS
Memorandum of Agreement, merely give effect to the
constitutional mandate to the State to afford protection to labor
whether “local or overseas.” Nullification of the SSS stipulation
in those individual employment contracts, through nullification
of the Memorandum of Agreement, constituted serious reversible
error on the part of the trial court. That petitioner should seek to
deprive his countrymen of social security protection after his
foreign principal had agreed to such protection, is cause for
dismay and is to be deplored.
 Constitutional Law; Criminal Procedure; Double Jeopardy;
Reinstatement of a criminal case does not violate the right
against double jeopardy where the dismissal of the
information by the trial court had been effected at the
instance of the accused.—The Court of Appeals properly held
that the reinstatement of the criminal case against petitioner did
not violate his right against double jeopardy since the dismissal
of the information by the trial court had been effected at his own
instance. There are only two (2) instances where double jeopardy
will attach notwithstanding the fact that the case was dismissed
with the express consent of the accused. The first is where the
ground for dismissal is insufficiency of evidence for the
prosecution; and the second is where the criminal proceedings
have been unreasonably prolonged in violation of the accused’s
right to speedy trial. Neither situation exists in the case at bar.
There is no legal impediment to the reinstatement of Criminal
Case No. Q-92-35426 against petitioner Sta. Rita. Sta. Rita vs.
Court of Appeals, 247 SCRA 484, G.R. No. 119891 August 21,
1995

D. G.R. No. 125837

October 6, 2004
REYNALDO CANO CHUA, doing business under the name &
style PRIME MOVER CONSTRUCTION DEVELOPMENT, vs.
COURT OF APPEALS, SOCIAL SECURITY COMMISSION,
SOCIAL SECURITY SYSTEM, ANDRES PAGUIO et al.

Labor Law; Social Security System; Petition for Review; The

Supreme Court’s jurisdiction in a petition for review is
limited to reviewing or revising errors of law allegedly
committed by the appellate court.—Well-entrenched is the
rule that the Supreme Court’s jurisdiction in a petition for review
is limited to reviewing or revising errors of law allegedly
committed by the appellate court, the findings

Same; Same; Employment; Employer-Employee

Relationship; Elements; The mandatory coverage of Republic
Act No. 1161, as amended, is premised on the existence of
an employer-employee relationship.—The Social Security Act
was enacted pursuant to the policy of the government “to develop,
establish gradually and perfect a social security system which
shall be suitable to the needs of the laborers throughout the
Philippines, and shall provide protection against the hazards of
disability, sickness, old age and death.” It provides for
compulsory coverage of all employees not over sixty years of age
and their employers. Well-settled is the rule that the mandatory
coverage of Republic Act No. 1161, as amended, is premised on
the existence of an employer-employee relationship, the essential
elements of which are: (a) selection and engagement of the
employee; (b) payment of wages; (c) the power of dismissal; and
(d) the power of control with regard to the means and methods
by which the work is to be accomplished, with the power of
control being the most determinative factor.

Same; Same; Same; Same; Control Test; It is clear that private

respondents are employees of petitioner, the latter having
control over the results of the work done, as well as the
means and methods by which the same were accomplished.—
It is clear that private respondents are employees of petitioner,
the latter having control over the results of the work done, as well
as the means and methods by which the same were
accomplished. Suffice it to say that regardless of the nature of
their employment, whether it is regular or project, private
respondents are subject of the compulsory coverage under the
SSS Law, their employment not falling under the exceptions
provided by the law. This rule is in accord with the Court’s ruling
in Luzon Stevedoring Corp. v. SSS to the effect that all employees,
regardless of tenure, would qualify for compulsory membership
in the SSS, except those classes of employees contemplated in
Section 8(j) of the Social Security Act.

Same; Same; Same; Project Employment; In Violeta vs.

National Labor Relations Commission, this Court ruled that
to be exempted from the presumption of regularity of
employment, the agreement between a project employee and
his employer must strictly conform to the requirements and
conditions under Article 280 of the Labor Code.—In Violeta v.
National Labor Relations Commission, this Court ruled that to be
exempted from the presumption of regularity of employment, the
agreement between a project employee and his employer must
strictly conform to the requirements and conditions under Article
280 of the Labor Code. It is not enough that an employee is hired
for a specific project or phase of work. There must also be a
determination of, or a clear agreement on, the completion or
 termination of the project at the time the employee was engaged
if the objectives of Article 280 are to be achieved. This second
requirement was not met in this case.

Same; Same; Same; Same; An employment ceases to be

coterminus with specific projects when the employee is
continuously rehired due to the demands of the employer’s
business and re-engaged for many more projects without
interruption.—This Court has held that an employment ceases
to be co-terminus with specific projects when the employee is
continuously rehired due to the demands of the employer’s
business and re-engaged for many more projects without
interruption. The Court likewise takes note of the fact that, as
cited by the SSC, even the National Labor Relations Commission
in a labor case involving the same parties, found that private
respondents were regular employees of the petitioner.

Same; Same; Premiums; Good Faith; Good faith or bad faith

is irrelevant for purposes of assessment and collection of the
penalty for delayed remittance of premiums.—Good faith or
bad faith is irrelevant for purposes of assessment and collection
of the penalty for delayed remittance of premiums, since the law
makes no distinction between an employer who professes good
reasons for delaying the remittance of premiums and another
who deliberately disregards the legal duty imposed upon him to
make such remittance.

E. G.R. No. 161357

November 30, 2005
ELENA P. DYCAICO, vs. SOCIAL SECURITY SYSTEM and
SOCIAL SECURITY COMMISSION

Due Process Clause; Equal Protection Clause; Labor Law;

Social Legislation; Retirement; Social Security System;
Social Security Law (R.A. No. 8282); Words and Phrases; The
proviso “as of the date of his retirement” in Section 12-B(d)
of RA No. 8282 violates the due process and equal protection
clauses of the Constitution.—For reasons which shall be
discussed shortly, the proviso “as of the date of his retirement”
in Section 12-B(d) of Rep. Act No. 8282 similarly violates the due
process and equal protection clauses of the Constitution.
Same; Same; Same; Same; Same; Same; Same; Requisites for
Valid Classifications.—A statute based on reasonable
classification does not violate the constitutional guaranty of the
equal protection clause of the law. With respect to Rep. Act No.
8282, in particular, as a social security law, it is recognized that
it “is permeated with provisions that draw lines in classifying
those who are to receive benefits. Congressional decisions in this
regard are entitled to deference as those of the institution
charged under our scheme of government with the primary
responsibility for making such judgments in light of competing
policies and interests.” However, as in other statutes, the
classification in Rep. Act No. 8282 with respect to entitlement to
benefits, to be valid and reasonable, must satisfy the following
requirements: (1) it must rest on substantial distinctions; (2) it
must be germane to the purpose of the law; (3) it must not be
limited to existing conditions only; and (4) it must apply equally
to all members of the same class.

Same; Same; Same; Same; Same; Same; Same; Classifying

dependent spouses and determining their entitlement to
survivor’s pension based on whether the marriage was
contracted before or after the retirement of the other spouse,
regardless of the duration of the said marriage, bears no
relation to the achievement of the policy objective of the law,
i.e., “provide meaningful protection to members and their
beneficiaries against the hazard of disability, sickness,
maternity, old age, death and other contingencies resulting
in loss of income or financial burden”—such classification of
dependent spouses is not germane to the aforesaid policy
objective.—The legislative history of Rep. Act No. 8282 does not
bear out the purpose of Congress in inserting the proviso “as of
the date of his retirement” to qualify the term “primary
beneficiaries” in Section 12-B(d) thereof. To the Court’s mind,
however, it reflects congressional concern with the possibility of
relationships entered after retirement for the purpose of
obtaining benefits. In particular, the proviso was apparently
intended to prevent sham marriages or those contracted by
persons solely to enable one spouse to claim benefits upon the
anticipated death of the other spouse. This concern is concededly
valid. However, classifying dependent spouses and determining
their entitlement to survivor’s pension based on whether the
marriage was contracted before or after the retirement of the
other spouse, regardless of the duration of the said marriage,
bears no relation to the achievement of the policy objective of the
law, i.e., “provide meaningful protection to members and their
beneficiaries against the hazard of disability, sickness, maternity,
old age, death and other contingencies resulting in loss of income
or financial burden.” The nexus of the classification to the policy
objective is vague and flimsy. Put differently, such classification
of dependent spouses is not germane to the aforesaid policy
objective.

Same; Same; Same; Same; Same; Same; Same; If it were the

intention of Congress to prevent sham marriages or those
entered into in contemplation of imminent death, then it
should have prescribed a definite “duration-of-relationship”
or durational period of relationship as one of the
requirements for entitlement to survivor’s pension.—If it
were the intention of Congress to prevent sham marriages or
those entered in contemplation of imminent death, then it should
have prescribed a definite “duration-of-relationship” or
durational period of relationship as one of the requirements for
entitlement to survivor’s pension. For example, in the United
States, a provision in their social security law which excludes
from social security benefits the surviving wife and stepchild of a
deceased wage earner who had their respective relationships to
the wage earner for less than nine months prior to his death, was
declared valid. Thus, nine months is recognized in the United
States as the minimum duration of a marriage to consider it as
having been contracted in good faith for the purpose of
entitlement to survivorship pension.

Same; Same; Same; Same; Same; Same; Same; Classification of

dependent spouses on the basis of whether their respective
marriages to the SSS member were contracted prior to or
after the latter’s retirement for the purpose of entitlement
to survivor’s pension does not rest on real and substantial
distinctions.—The classification of dependent spouses on the
basis of whether their respective marriages to the SSS member
were contracted prior to or after the latter’s retirement for the
purpose of entitlement to survivor’s pension does not rest on real
and substantial distinctions. It is arbitrary and discriminatory. It
is too sweeping because the proviso “as of the date of his
retirement,” which effectively disqualifies the dependent spouses
whose respective marriages to the retired SSS member were
contracted after the latter’s retirement as primary beneficiaries,
unfairly lumps all these marriages as sham relationships or were
contracted solely for the purpose of acquiring benefits accruing
upon the death of the other spouse. The proviso thus unduly
prejudices the rights of the legal surviving spouse, like the
petitioner, and defeats the avowed policy of the law “to provide
meaningful protection to members and their beneficiaries against
the hazards of disability, sickness, maternity, old age, death, and
other contingencies resulting in loss of income or financial
burden.”

Same; Same; Same; Same; Same; Same; Same; Retirees enjoy a

protected property interest in their retirement benefits.—As
earlier opined, in Government Service Insurance System v.
Montesclaros, the Court characterized retirement benefits as a
property interest of a retiree. We held therein that “[i]n a pension
plan where employee participation is mandatory, the prevailing
view is that employees have contractual or vested rights in the
pension where the pension is part of the terms of employment.”
Thus, it was ruled that, “where the employee retires and meets
the eligibility requirements, he acquires a vested right to benefits
that is protected by the due process clause” and “[r]etirees enjoy
a protected property interest whenever they acquire a right to
immediate payment under pre-existing law.” Further, since
pursuant to the pertinent law therein, the dependent spouse is
entitled to survivorship pension, “a widow’s right to receive
pension following the demise of her husband is also part of the
husband’s contractual compensation.” Although the subject
matter in the above-cited case involved the retirement benefits
under P.D. No. 1146 or the Revised Government Service
Insurance Act of 1977 covering government employees, the
pronouncement therein that retirees enjoy a protected property
interest in their retirement benefits applies squarely to those in
the private sector under Rep. Act No. 8282. This is so because
the mandatory contributions of both the employers and the
employees to the SSS do not, likewise, make the retirement
benefits under Rep. Act No. 8282 mere gratuity but form part of
the latter’s compensation. Even the retirement benefits of self-
employed individuals, like Bonifacio, who have been included in
the compulsory coverage of Rep. Act No. 8282 are not mere
gratuity because they are required to pay both the employer and
employee contributions. Further, under Rep. Act No. 8282, the
surviving spouse is entitled to survivor’s pension accruing on the
death of the member; hence, the surviving spouse’s right to
receive such benefit following the demise of the wife or husband,
as the case may be, is also part of the latter’s contractual
compensation.

Same; Same; Same; Same; Same; Same; Same; Presumptions;

The proviso “as of the date of his retirement” in Section 12-
B(d) of Rep. Act No. 8282 runs afoul of the due process clause
as it outrightly deprives the surviving spouses whose
respective marriages to the retired SSS members were
contracted after the latter’s retirement of their survivor’s
benefits—it has created the presumption that marriages
contracted after the retirement date of SSS members were
entered into for the purpose of securing the benefits under Rep.
Act No. 8282, a conclusive presumption that does not afford any
opportunity to disprove the presence of the illicit purpose; The
proviso, as it creates this conclusive presumption, is
unconstitutional because it presumes a fact which is not
necessarily or universally true.—The proviso “as of the date of his
retirement” in Section 12-B(d) of Rep. Act No. 8282 runs afoul of
the due process clause as it outrightly deprives the surviving
spouses whose respective marriages to the retired SSS members
were contracted after the latter’s retirement of their survivor’s
benefits. There is outright confiscation of benefits due such
surviving spouses without giving them an opportunity to be
heard. By this outright disqualification of the surviving spouses
whose respective marriages to SSS members were contracted
after the latter’s retirement, the proviso “as of the date of his
retirement” qualifying the term “primary beneficiaries” for the
purpose of entitlement to survi-vor’s pension has created the
presumption that marriages contracted after the retirement date
of SSS members were entered into for the purpose of securing the
benefits under Rep. Act No. 8282. This presumption, moreover,
is conclusive because the said surviving spouse are not afforded
any opportunity to disprove the presence of the illicit purpose.
The proviso, as it creates this conclusive presumption, is
unconstitutional because it presumes a fact which is not
necessarily or universally true. In the United States, this kind of
presumption is characterized as an “irrebuttable presumption”
 and statutes creating permanent and irrebutable presumptions
have long been disfavored under the due process clause.

Judicial Review; The rule is that the Court does not decide
questions of a constitutional nature unless absolutely
necessary to a decision of the case—the question of the
constitutionality of the proviso in Section 12-B(d) of R.A. No.
8282 is absolutely for the proper resolution of the present
case.—The Court concedes that the petitioner did not raise the
issue of the validity of the proviso “as of the date of his retirement”
in Section 12-B(d) of Rep. Act No. 8282. The rule is that the Court
does not decide questions of a constitutional nature unless
absolutely necessary to a decision of the case. However, the
question of the constitutionality of the proviso is absolutely
necessary for the proper resolution of the present case.
Accordingly, the Court required the parties to present their
arguments on this issue and proceeded to pass upon the same
in the exercise of its equity jurisdiction and in order to render
substantial justice to the petitioner who, presumably in her
advanced age by now, deserves to receive forthwith the survivor’s
pension accruing upon the death of her husband.

F. G.R. No. 165545

March 24, 2006
SOCIAL SECURITY SYSTEM, petitioner, vs. TERESITA
JARQUE VDA. DE BAILON

Civil Law; Family Code; Marriages; The applicable law to

determine the validity of a marriage is the law in effect at
the time of its celebration. Thus, if it was solemnized before
the Family Code took effect on August 3, 1988, the Civil Law
provisions on Marriage apply.—The two marriages involved
herein having been solemnized prior to the effectivity on August
3, 1988 of the Family Code, the applicable law to determine their
validity is the Civil Code which was the law in effect at the time
of their celebration. Article 83 of the Civil Code provides: Art. 83.
Any marriage subsequently contracted by any person during the
lifetime of the first spouse of such person with any person other
than such first spouse shall be illegal and void from its
performance, unless: (1) The first marriage was annulled or
dissolved; or (2) The first spouse had been absent for seven
consecutive years at the time of the second marriage without the
spouse present having news of the absentee being alive, or if the
absentee, though he has been absent for less than seven years,
is generally considered as dead and believed to be so by the
spouse present at the time of contracting such subsequent
marriage, or if the absentee is presumed dead according to
Articles 390 and 391. The marriage so contracted shall be valid
in any of the three cases until declared null and void by a
competent court.

Same; Same; Same; A subsequent marriage contracted during

the lifetime of the first spouse is illegal and void ab initio
unless the prior marriage is first annulled or dissolved or
contracted under any of the three exceptional
circumstances.—Under the foregoing provision of the Civil Code,
a subsequent marriage contracted during the lifetime of the first
spouse is illegal and void ab initio unless the prior marriage is
first annulled or dissolved or contracted under any of the three
exceptional circumstances. It bears noting that the marriage
under any of these exceptional cases is deemed valid “until
declared null and void by a competent court.” It follows that the
onus probandi in these cases rests on the party assailing the
second marriage.

Same; Same; Same; Under the Civil Code, a subsequent

marriage being voidable as it was contracted by the present
spouse believing the absent spouse to be dead, it is
terminated by final judgment of annulment in a case
instituted by the absent spouse who reappears or by either
of the spouses in the subsequent marriage, while under the
Family Code, no judicial proceeding to annul a subsequent
marriage is necessary as it is automatically terminated by
the recording of an affidavit of reappearance of the absent
spouse.—Under the Civil Code, a subsequent marriage being
voidable, it is terminated by final judgment of annulment in a
case instituted by the absent spouse who reappears or by either
of the spouses in the subsequent marriage. Under the Family
Code, no judicial proceeding to annul a subsequent marriage is
necessary. x x x The termination of the subsequent marriage by
affidavit provided by the above-quoted provision of the Family
Code does not preclude the filing of an action in court to prove
 the reappearance of the absentee and obtain a declaration of
dissolution or termination of the subsequent marriage.

Same; Marriages; If the absentee reappears, but no step is

taken to terminate the subsequent marriage, either by
affidavit or by court action, such absentee’s mere
reappearance, even if made known to the spouses in the
subsequent marriage, will not terminate such marriage.—If
the absentee reappears, but no step is taken to terminate the
subsequent marriage, either by affidavit or by court action, such
absentee’s mere reappearance, even if made known to the
spouses in the subsequent marriage, will not terminate such
marriage. Since the second marriage has been contracted
because of a presumption that the former spouse is dead, such
presumption continues inspite of the spouse’s physical
reappearance, and by fiction of law, he or she must still be
regarded as legally an absentee until the subsequent marriage is
terminated as provided by law.

Same; Same; Voidable Marriages; A voidable marriage cannot

be assailed collaterally except in a direct proceeding.—It
bears reiterating that a voidable marriage cannot be assailed
collaterally except in a direct proceeding. Consequently, such
marriages can be assailed only during the lifetime of the parties
and not after the death of either, in which case the parties and
their offspring will be left as if the marriage had been perfectly
valid. Upon the death of either, the marriage cannot be
impeached, and is made good ab initio.

G. G.R. No. 172101

November 23, 2007
REPUBLIC OF THE PHILIPPINES, represented by the SOCIAL
SECURITY COMMISSION and SOCIAL SECURITY SYSTEM,
vs. ASIAPRO COOPERATIVE

Jurisdictions; Appeals; Power of Review of the Supreme

Court; Although as a rule, in the exercise of the Supreme
Court’s power of review, the Court is not a trier of facts and
the findings of fact of the Court of Appeals are conclusive
and binding on the Court, said rule is not without
exceptions.—Although as a rule, in the exercise of the Supreme
Court’s power of review, the Court is not a trier of facts and the
findings of fact of the Court of Appeals are conclusive and binding
on the Court, said rule is not without exceptions. There are
several recognized exceptions in which factual issues may be
resolved by this Court. One of these exceptions finds application
in this present case which is, when the findings of fact are
conflicting. There are, indeed, conflicting findings espoused by
the petitioner SSC and the appellate court relative to the
existence of employer-employee relationship between the
respondent cooperative and its ownersmembers, which
necessitates a departure from the oft-repeated rule that factual
issues may not be the subject of appeals to this Court.

Labor Law; Labor Relations; Employer-Employee

Relationship; Elements; In determining the existence of an
employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers;
(2) the payment of wages by whatever means; (3) the power
of dismissal; and (4) the power to control the worker’s
conduct, with the latter assuming primacy in the overall
consideration. 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.—In determining the existence of
an employer-employee relationship, the following elements are
considered: (1) the selection and engagement of the workers; (2)
the payment of wages by whatever means; (3) the power of
dismissal; and (4) the power to control the worker’s conduct, with
the latter assuming primacy in the overall consideration. 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. The
power of control refers to the existence of the power and not
necessarily to the actual exercise thereof. It is not essential for
the employer to actually supervise the performance of duties of
the employee; it is enough that the employer has the right to wield
that power. All the aforesaid elements are present in this case.

Same; Same; Same; The existence of an employer-employee

relationship cannot be negated by expressly repudiating it in
a contract, when the terms and surrounding circumstances
show otherwise. The employment status of a person is
defined and prescribed by law and not by what the parties
say it should be.—As previously pointed out by this Court, an
employee-employer relationship actually exists between the
respondent cooperative and its owners-members. The four
elements in the four-fold test for the existence of an employment
relationship have been complied with. The respondent
cooperative must not be allowed to deny its employment
relationship with its owners-members by invoking the
questionable Service Contracts provision, when in actuality, it
does exist. The existence of an employer-employee relationship
cannot be negated by expressly repudiating it in a contract, when
the terms and surrounding circumstances show otherwise. The
employment status of a person is defined and prescribed by law
and not by what the parties say it should be.

Cooperatives; A cooperative acquires juridical personality

upon its registration with the Cooperative Development
Authority. It has its Board of Directors, which directs and
supervises its business; meaning, its Board of Directors is the
one in charge in the conduct and management of its affairs.
With that, a cooperative can be likened to a corporation with
a personality separate and distinct from its owners-
members.—It bears stressing, too, that a cooperative acquires
juridical personality upon its registration with the Cooperative
Development Authority. It has its Board of Directors, which
directs and supervises its business; meaning, its Board of
Directors is the one in charge in the conduct and management of
its affairs. With that, a cooperative can be likened to a
corporation with a personality separate and distinct from its
owners-members. Consequently, an owner-member of a
cooperative can be an employee of the latter and an employer-
employee relationship can exist between them.

Same; The management of the affairs of the respondent

cooperative is vested in its Board of Directors and not in its
owners members as a whole. Therefore, it is completely
logical that the respondent cooperative, as a juridical person
represented by its Board of Directors, can enter into an
employment with its owners members.—In the present case,
it is not disputed that the respondent cooperative had registered
itself with the Cooperative Development Authority, as evidenced
by its Certificate of Registration No. 0-623-2460. In its by-laws,
 its Board of Directors directs, controls, and supervises the
business and manages the property of the respondent
cooperative. Clearly then, the management of the affairs of the
respondent cooperative is vested in its Board of Directors and not
in its owners-members as a whole. Therefore, it is completely
logical that the respondent cooperative, as a juridical person
represented by its Board of Directors, can enter into an
employment with its owners-members.

H. G.R. No. 173151

March 28, 2008
EDUARDO BUGHAW, JR., vs. TREASURE ISLAND
INDUSTRIAL CORPORATION

Labor Law; Substantial Evidence; Words and Phrases; Where

the Labor Arbiter and the NLRC, on one hand, and the Court
of Appeals, on the other, arrived at divergent conclusions
although they considered the very same evidences submitted
by the parties, it becomes incumbent upon the Supreme
Court to determine whether there is substantial evidence to
support the finding of the Labor Arbiter and the NLRC that
petitioner was illegally dismissed; Substantial evidence is
such amount of relevant evidence which a reasonable mind
might accept as adequate to support a conclusion, even if
other equally reasonable minds might conceivably opine
otherwise.—The Labor Arbiter and the NLRC both ruled that
petitioner was illegally dismissed from employment and ordered
the payment of his unpaid wages, backwages, and separation
pay, while the Court of Appeals found otherwise. The Labor
Arbiter and the NLRC, on one hand, and the Court of Appeals, on
the other, arrived at divergent conclusions although they
considered the very same evidences submitted by the parties. It
is, thus, incumbent upon us to determine whether there is
substantial evidence to support the finding of the Labor Arbiter
and the NLRC that petitioner was illegally dismissed. Substantial
evidence is such amount of relevant evidence which a reasonable
mind might accept as adequate to support a conclusion, even if
other equally reasonable minds might conceivably opine
otherwise.

Same; Termination of Employment; The two (2) facets of a

valid termination of employment are: (a) the legality of the
act of dismissal, i.e., the dismissal must be under any of the
just causes provided under Article 282 of the Labor Code,
and (b) the legality of the manner of dismissal, which means
that there must be observance of the requirements of due
process, otherwise known as the two-notice rule.—Under the
Labor Code, the requirements for the lawful dismissal of an
employee are two-fold, the substantive and the procedural
aspects. Not only must the dismissal be for a just or authorized
cause, the rudimentary requirements of due process—notice and
hearing—must, likewise, be observed before an employee may be
dismissed. Without the concurrence of the two, the termination
would, in the eyes of the law, be illegal, for employment is a
property right of which one cannot be deprived of without due
process. Hence, the two (2) facets of a valid termination of
employment are: (a) the legality of the act of dismissal, i.e., the
dismissal must be under any of the just causes provided under
Article 282 of the Labor Code; and (b) the legality of the manner
of dismissal, which means that there must be observance of the
requirements of due process, otherwise known as the two-notice
rule.

Same; Same; Serious Misconduct; Dangerous Drugs Act;

Judicial Notice; Words and Phrases; Misconduct is improper
or wrong conduct, the transgression of some established and
definite rule of action, a forbidden act, a dereliction of duty,
willful in character, and implies wrongful intent and not
merely an error in judgment, and for the misconduct to be
serious within the meaning of the Act must be of such a grave
and aggravated character and not merely trivial or
unimportant; The Supreme Court has taken judicial notice
of scientific findings that drug abuse can damage the mental
faculties of the user—it is beyond question therefore that any
employee under the influence of drugs cannot possibly
continue doing his duties without posing a serious threat to
the lives and property of his co-workers and even his
employer.—The charge of drug abuse inside the company’s
premises and during working hours against petitioner
constitutes serious misconduct, which is one of the just causes
for termination. Misconduct is improper or wrong conduct. It is
the transgression of some established and definite rule of action,
a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not merely an error in judgment. The
misconduct to be serious within the meaning of the Act must be
of such a grave and aggravated character and not merely trivial
or unimportant. Such misconduct, however serious, must
nevertheless, in connection with the work of the employee,
constitute just cause for his separation. This Court took judicial
notice of scientific findings that drug abuse can damage the
mental faculties of the user. It is beyond question therefore that
any employee under the influence of drugs cannot possibly
continue doing his duties without posing a serious threat to the
lives and property of his co-workers and even his employer.

Same; Same; Same; Same; An employee’s statements given to

the police during investigation is evidence which can be
considered by the employer against another employee,
specially so if the latter did not appear in the scheduled
administrative hearing to personally present his side.—
Loberanes’s statements given to police during investigation is
evidence which can be considered by the respondent against the
petitioner. Petitioner failed to controvert Loberanes’ claim that he
too was using illegal drugs. Records reveal that respondent gave
petitioner a first notice dated 11 June 2001, giving him 120 hours
within which to explain and defend himself from the charge
against him and to attend the administrative hearing scheduled
on 16 June 2001. There is no dispute that petitioner received
said notice as evidenced by his signature appearing on the lower
left portion of a copy thereof together with the date and time of
his receipt. He also admitted receipt of the first notice in his
Memorandum before this Court. Despite his receipt of the notice,
however, petitioner did not submit any written explanation on
the charge against him, even after the lapse of the 120-day period
given him. Neither did petitioner appear in the scheduled
administrative hearing to personally present his side. Thus, the
respondent cannot be faulted for considering only the evidence
at hand, which was Loberanes’ statement, and conclude
therefrom that there was just cause for petitioner’s termination.

Same; Same; Same; Due Process; A mere copy of the notice of

termination allegedly sent by the employer to the employee,
without proof of receipt, or in the very least, actual service
thereof upon petitioner, does not constitute substantial
evidence.—The law mandates that it is incumbent upon the
employer to prove the validity of the termination of employment.
Failure to discharge this evidentiary burden would necessarily
mean that the dismissal was not justified and, therefore, illegal.
Unsubstantiated claims as to alleged compliance with the
mandatory provisions of law cannot be favored by this Court. In
case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of our labor laws and
Constitution. The burden therefore is on respondent to present
clear and unmistakable proof that petitioner was duly served a
copy of the notice of termination but he refused receipt. Bare and
vague allegations as to the manner of service and the
circumstances surrounding the same would not suffice. A mere
copy of the notice of termination allegedly sent by respondent to
petitioner, without proof of receipt, or in the very least, actual
service thereof upon petitioner, does not constitute substantial
evidence. It was unilaterally prepared by the petitioner and, thus,
evidently self-serving and insufficient to convince even an
unreasonable mind. We cannot overemphasize the importance of
the requirement on the notice of termination, for we have ruled
in a number of cases that non-compliance therewith is
tantamount to deprivation of the employee’s right to due process.

Same; Same; Same; Same; Agabon Doctrine; Words and

Phrases; The Agabon doctrine enunciates the rule that if the
dismissal was for just cause but procedural due process was
not observed, the dismissal should be upheld but the
employer should indemnify the employee for the violation of
his right to procedural due process.—The Agabon doctrine
enunciates the rule that if the dismissal was for just cause but
procedural due process was not observed, the dismissal should
be upheld. Where the dismissal is for just cause, as in the instant
case, the lack of statutory due process should not nullify the
dismissal or render it illegal or ineffectual. However, the employer
should indemnify the employee for the violation of his right to
procedural due process. The indemnity to be imposed should be
stiffer to discourage the abhorrent practice of “dismiss now, pay
later,” which we sought to deter in the Serrano, 331 SCRA 331
(2000) ruling. In Agabon, 442 SCRA 573 (2004), the nominal
damages awarded was P30,000.00.
I. G.R. No. 172589
August 9, 2010
JEFFREY NACAGUE, vs. SULPICIO LINES, INC.,

Labor Law; Termination of Employment; Two Requisites to

Constitute Valid Dismissal from Employment.—Under Article
279 of the Labor Code, an employer may terminate the services
of an employee for just causes or for authorized causes.
Furthermore, under Article 277(b) of the Labor Code, the
employer must send the employee who is about to be terminated,
a written notice stating the causes for termination and must give
the employee the opportunity to be heard and to defend himself.
Thus, to constitute valid dismissal from employment, two
requisites must concur: (1) the dismissal must be for a just or
authorized cause; and (2) the employee must be afforded an
opportunity to be heard and to defend himself.

Same; Same; Section 36 of Republic Act (R.A.) No. 9165

provides that drug tests shall be performed only by
authorized drug testing centers; Drug testing shall consist of
both the screening test and the confirmatory test.—Section
36 of R.A. No. 9165 provides that drug tests shall be performed
only by authorized drug testing centers. Moreover, Section 36
also prescribes that drug testing shall consist of both the
screening test and the confirmatory test.

Same; Same; When the alleged valid cause for the termination
of employment is not clearly proven, as in this case, the law
considers the matter a case of illegal dismissal.—The law is
clear that drug tests shall be performed only by authorized drug
testing centers. In this case, Sulpicio Lines failed to prove that
S.M. Lazo Clinic is an accredited drug testing center. Sulpicio
Lines did not even deny Nacague’s allegation that S.M. Lazo
Clinic was not accredited. Also, only a screening test was
conducted to determine if Nacague was guilty of using illegal
drugs. Sulpicio Lines did not confirm the positive result of the
screening test with a confirmatory test. Sulpicio Lines failed to
indubitably prove that Nacague was guilty of using illegal drugs
amounting to serious misconduct and loss of trust and
confidence. Sulpicio Lines failed to clearly show that it had a valid
and legal cause for terminating Nacague’s employment. When the
alleged valid cause for the termination of employment is not
 clearly proven, as in this case, the law considers the matter a
case of illegal dismissal.

J. G.R. No. 167050

June 1, 2011
SOCIAL SECURITY COMMISSION vs. RIZAL POULTRY and
LIVESTOCK ASSOCIATION, INC., BSD AGRO INDUSTRIAL
DEVELOPMENT CORPORATION and BENJAMIN SAN DIEGO

Remedial Law; Actions; Judgments; Res Judicata; Two

concepts embraced in res judicata, bar by prior judgment and
conclusiveness of judgment.—Res judicata embraces two
concepts: (1) bar by prior judgment as enunciated in Rule 39,
Section 47(b) of the Rules of Civil Procedure; and (2)
conclusiveness of judgment in Rule 39, Section 47(c). There is
“bar by prior judgment” when, as between the first case where
the judgment was rendered and the second case that is sought
to be barred, there is identity of parties, subject matter, and
causes of action. In this instance, the judgment in the first case
constitutes an absolute bar to the second action. But where there
is identity of parties in the first and second cases, but no identity
of causes of action, the first judgment is conclusive only as to
those matters actually and directly controverted and determined
and not as to matters merely involved therein. This is the concept
of res judicata known as “conclusiveness of judgment.” Stated
differently, any right, fact or matter in issue directly adjudicated
or necessarily involved in the determination of an action before a
competent court in which judgment is rendered on the merits is
conclusively settled by the judgment therein and cannot again be
litigated between the parties and their privies, whether or not the
claim, demand, purpose, or subject matter of the two actions is
the same.

Same; Same; Same; Same; Elements of Res Judicata.—The

elements of res judicata are: (1) the judgment sought to bar the
new action must be final; (2) the decision must have been
rendered by a court having jurisdiction over the subject matter
and the parties; (3) the disposition of the case must be a
judgment on the merits; and (4) there must be as between the
first and second action, identity of parties, subject matter, and
causes of action. Should identity of parties, subject matter, and
causes of action be shown in the two cases, then res judicata in
its aspect as a “bar by prior judgment” would apply. If as between
the two cases, only identity of parties can be shown, but not
identical causes of action, then res judicata as “conclusiveness
of judgment” applies.

Same; Same; Same; Same; There is substantial identity of

parties when there is a community of interest between a
party in the first case and a party in the second case, even if
the latter was not impleaded in the first case.—The parties in
SSC and NLRC cases are not strictly identical. Rizal Poultry was
impleaded as additional respondent in the SSC case.
Jurisprudence however does not dictate absolute identity but
only substantial identity. There is substantial identity of parties
when there is a community of interest between a party in the first
case and a party in the second case, even if the latter was not
impleaded in the first case.

Same; Same; Same; Same; An identity in the cause of action

need not obtain in order to apply res judicata by
“conclusiveness of judgment”; an identity of issues would
suffice.—As previously stated, an identity in the cause of action
need not obtain in order to apply res judicata by “conclusiveness
of judgment.” An identity of issues would suffice.

Same; Same; Same; Same; The doctrine of “conclusiveness of

judgment” also applies in criminal cases.—The fairly recent
case of Co v. People, 592 SCRA 381 (2009), likewise applies to
the present case. An information was filed against Co by private
respondent spouses who claim to be employees of the former for
violation of the Social Security Act, specifically for non-
remittance of SSS contributions. Earlier, respondent spouses
had filed a labor case for illegal dismissal. The NLRC finally ruled
that there was no employer-employee relationship between her
and respondent spouses. Co then filed a motion to quash the
information, arguing that the facts alleged in the Information did
not constitute an offense because respondent spouses were not
her employees. In support of her motion, she cited the NLRC
ruling. This Court applied Smith Bell and declared that the final
and executory NLRC decision to the effect that respondent
spouses were not the employees of petitioner is a ruling binding
in the case for violation of the Social Security Act. The Court
 further stated that the doctrine of “conclusiveness of judgment”
also applies in criminal cases.

K. G.R. No. 187474

February 6, 2013
GOVERNMENT SERVICE INSURANCE SYSTEM vs. MARILOU
ALCARAZ

Employees’ Compensation; Occupational Diseases; Diabetes

Mellitus; While diabetes mellitus was indeed a complicating
factor in Bernardo’s health condition and indisputably
aggravated his heart problem, we cannot discount other
employment factors, mental and physical, that had been
indisputably present; they contributed, if not as a direct
cause of the heart condition itself, as aggravation that
worsened and hastened his fatal myocardial infarction.—
While diabetes mellitus was indeed a complicating factor in
Bernardo’s health condition and indisputably aggravated his
heart problem, we cannot discount other employment factors,
mental and physical, that had been indisputably present; they
contributed, if not as a direct cause of the heart condition itself,
as aggravation that worsened and hastened his fatal myocardial
infarction.

Same; Same; Heart Diseases; Resolution No. 432; Resolution

No. 432 provides (as one of the conditions) that a heart
disease is compensable if it was known to have been present
during employment, there must be proof that an acute
exacerbation was clearly precipitated by the unusual strain
by reason of the nature of his work.—The CA’s conclusion is
bolstered by the fact that the ECC itself, the government agency
tasked by law to implement the employees compensation
program (together with the GSIS in the public sector and the
Social Security System [SSS] in the private sector), included
cardio-vascular diseases in the list of occupational diseases,
making them compensable, subject to any of the conditions
stated in its enabling Resolution No. 432. With the resolution, it
should be obvious that by itself, a heart disease, such as
myocardial infarction, can be considered work-related, with or
without the complicating factors of other non-occupational
illnesses. Thus, the Court so ruled in Rañises v. ECC, 467 SCRA
71 (2005), where it emphasized that the incidence of acute
 myocardial infarction, whether or not associated with a non-
listed ailment, is enough basis for compensation. Resolution No.
432 provides (as one of the conditions) that a heart disease is
compensable if it was known to have been present during
employment, there must be proof that an acute exacerbation was
clearly precipitated by the unusual strain by reason of the nature
of his work. Based on the evidence on record, we find as the CA
did, that the nature of Bernardo’s duties and the conditions
under which he worked were such as to eventually cause the
onset of his myocardial infarction. The stresses, the strain, and
the exposure to street pollution and to the elements that
Bernardo had to bear for almost 29 years are all too real to be
ignored. They cannot but lead to a deterioration of health
particularly with the contributing factors of diabetes and
pulmonary disease.

L. G.R. No. 188385

October 2, 2013
BENITO E. LORENZO, vs. GOVERNMENT SERVICE
INSURANCE SYSTEM (GSIS) and DEPARTMENT OF
EDUCATION (DepEd),

Labor Law; Employees’ Compensation; Sickness; Words and

Phrases; Sickness, as defined under Article 167 (l) Chapter I,
Title II, Book IV of the Labor Code of the Philippines refers
to any illness definitely accepted as an occupational disease
listed by the Employees’ Compensation Commission, or any
illness caused by employment, subject to proof that the risk
of contracting the same is increased by working
conditions.—Sickness, as defined under Article 167 (l) Chapter
I, Title II, Book IV of the Labor Code of the Philippines refers to
“any illness definitely accepted as an occupational disease listed
by the Employees’ Compensation Commission, or any illness
caused by employment, subject to proof that the risk of
contracting the same is increased by working conditions.

Same; Same; Death Benefits; In cases of death, Section 1(b),

Rule III of the Rules Implementing P.D. No. 626, as amended,
requires that for the sickness and the resulting disability or
death to be compensable, the claimant must show: (1) that it
is the result of an occupational disease listed under Annex
“A” of the Amended Rules on Employees’ Compensation with
the conditions set therein satisfied; or (2) that the risk of
contracting the disease is increased by the working
conditions.—In cases of death, such as in this case, Section 1(b),
Rule III of the Rules Implementing P.D. No. 626, as amended,
requires that for the sickness and the resulting disability or death
to be compensable, the claimant must show: (1) that it is the
result of an occupational disease listed under Annex “A” of the
Amended Rules on Employees’ Compensation with the conditions
set therein satisfied; or (2) that the risk of contracting the disease
is increased by the working conditions. Section 2(a), Rule III of
the said Implementing Rules, on the other hand, defines
occupational diseases as those listed in Annex “A” when the
nature of employment is as described therein.

Same; Same; Sickness; A claimant must submit such proof as

would constitute a reasonable basis for concluding either
that the conditions of employment of the claimant caused
the ailment or that such working conditions had aggravated
the risk of contracting that ailment.—In Sante v. Employees’
Compensation Commission, 174 SCRA 557 (1989) we held that
“x x x x a claimant must submit such proof as would constitute
a reasonable basis for concluding either that the conditions of
employment of the claimant caused the ailment or that such
working conditions had aggravated the risk of contracting that
ailment. What kind and quantum of evidence would constitute
an adequate basis for a reasonable man x x x to reach one or the
other conclusion, can obviously be determined only on a case-to-
case basis. That evidence must, however, be real and substantial,
and not merely apparent, for the duty to prove work-causation or
work-aggravation imposed by existing law is real x x x not merely
apparent.”

Same; Same; It is well to stress that the principles of

“presumption of compensability” and “aggravation” found in
the old Workmen’s Compensation Act is expressly discarded
under the present compensation scheme.—It is well to stress
that the principles of “presumption of compensability” and
“aggravation” found in the old Workmen’s Compensation Act is
expressly discarded under the present compensation scheme. As
illustrated in the said Raro case, the new principle being applied
is a system based on social security principle; thus, the
introduction of “proof of increased risk.” As further declared
 therein: The present system is also administered by social
insurance agencies — the Government Service Insurance System
and Social Security System — under the Employees
Compensation Commission. The intent was to restore a sensible
equilibrium between the employer’s obligation to pay workmen’s
compensation and the employee’s right to receive reparation for
work-connected death or disability.

M. G.R. No. 189574

July 18, 2014
ESTRELLA D. S. BAÑEZ vs. SOCIAL SECURITY SYSTEM and
DE LA SALLE UNIVERSITY

Remedial Law; Civil Procedure; Appeals; It is doctrinally

entrenched that appeal is not a constitutional right, but a
mere statutory privilege.—It is doctrinally entrenched that
appeal is not a constitutional right, but a mere statutory
privilege. Hence, parties who seek to avail themselves of it must
comply with the statutes or rules allowing it. The rule is that
failure to file or perfect an appeal within the reglementary period
will make the judgment final and executory by operation of law.
Perfection of an appeal within the statutory or reglementary
period is not only mandatory but also jurisdictional; failure to do
so renders the questioned decision/resolution final and
executory, and deprives the appellate court of jurisdiction to alter
the decision/resolution, much less to entertain the appeal. Filing
of an appeal beyond the reglementary period may, under
meritorious cases, be excused if the barring of the appeal would
be inequitable and unjust in light of certain circumstances
therein.

Same; Same; Same; Findings of fact of administrative

agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect but finality
when affirmed by the Court of Appeals (CA).—The findings of
fact of the SSS are supported by substantial evidence and
affirmed by the ECC and the Court of Appeals. This Court is not
a trier of facts. The Court accords great weight to the factual
findings of lower courts or agencies whose function is to resolve
factual matters. It is not for the Court to weigh evidence all over
again. Moreover, findings of fact of administrative agencies and
 quasi-judicial bodies, which have acquired expertise because
their jurisdiction is confined to specific matters, are generally
accorded not only respect but finality when affirmed by the Court
of Appeals.

Labor Law; Social Security System; Death Benefits;

Occupational Diseases; In order for the beneficiary of an
employee to be entitled to death benefits under the Social
Security System (SSS), the cause of death of the employee
must be a sickness listed as an occupational disease by
Employees’ Compensation Commission (ECC); or any other
illness caused by employment, subject to proof that the risk
of contracting the same is increased by the working
conditions.—In order for the beneficiary of an employee to be
entitled to death benefits under the SSS, the cause of death of
the employee must be a sickness listed as an occupational
disease by ECC; or any other illness caused by employment,
subject to proof that the risk of contracting the same is increased
by the working conditions. It is undisputed that SLE is not listed
as an occupational disease under Annex “A” of the Rules on
Employees’ Compensation. Thus, petitioner has to prove by
substantial evidence the causal relationship between her
husband’s illness and his working conditions.

Same; Same; Same; Same; For petitioner’s claim to prosper,

she must submit such proof as would constitute a reasonable
basis for concluding either that the conditions of
employment caused her husband’s ailment or that such
working conditions had aggravated the risk of contracting
that ailment.—For petitioner’s claim to prosper, she must
submit such proof as would constitute a reasonable basis for
concluding either that the conditions of employment caused her
husband’s ailment or that such working conditions had
aggravated the risk of contracting that ailment.

N. G.R. No. 196102

November 26, 2014
GOVERNMENT SERVICE INSURANCE SYSTEM, vs. AURELIA
Y. CALUMPIANO

Employees’ Compensation; Court Personnel; Stenographers;

Glaucoma; Contrary to petitioner’s submissions, there
appears to be a link between blood pressure and the
development of glaucoma, which leads the Supreme Court
(SC) to conclude that respondent’s glaucoma developed as a
result of her hypertension.—Respondent served the
government for 30 long years; veritably, as the ECC itself said,
“[h]er duties were no doubt stressful and the same may have
caused her to develop her ailment, hypertension” — which is a
listed occupational disease, contrary to the CA’s pronouncement
that it is not. And because it is a listed occupational disease, the
“increased risk theory” does not apply — again, contrary to the
CA’s declaration; no proof of causation is required. It can also be
said that given respondent’s age at the time, and taking into
account the nature, working conditions, and pressures of her
work as court stenographer — which requires her to faithfully
record each and every day virtually all of the court’s proceedings;
transcribe these notes immediately in order to make them
available to the court or the parties who require them; take down
dictations by the judge, and transcribe them; and type in final
form the judge’s decisions, which activities extend beyond office
hours and without additional compensation or overtime pay —
all these contributed to the development of her hypertension —
or hypertensive cardiovascular disease, as petitioner would call
it. Consequently, her age, work, and hypertension caused the
impairment of vision in both eyes due to “advanced to late stage
glaucoma,” which rendered her “legally blind.” Contrary to
petitioner’s submissions, there appears to be a link between
blood pressure and the development of glaucoma, which leads
the Court to conclude that respondent’s glaucoma developed as
a result of her hypertension.

Same; Probability, not certainty, is the test of proof in

compensation cases.—The Court is well guided by the
principles, declared in Government Service Insurance System v.
Baul, 497 SCRA 397 (2006) and Government Service Insurance
System v. De Castro, 593 SCRA 155 (2009), that probability, not
certainty, is the test of proof in compensation cases; that the
primordial and paramount consideration is the employee’s
welfare; that the strict rules of evidence need not be observed in
claims for compensation; that medical findings of the attending
physician may be received in evidence and used as proof of the
facts in dispute; that in any determination of compensability, the
nature and characteristics of the job are as important as raw
 medical findings and a claimant’s personal and social history;
that where the primary injury is shown to have arisen in the
course of employment, every natural consequence that flows from
the injury likewise arises out of the employment, unless it is the
result of an independent intervening cause attributable to
claimant’s own negligence or misconduct; and that the policy is
to extend the application of the law on employees’ compensation
to as many employees who can avail of the benefits thereunder.

O. G.R. No. 181490 April 23, 2014

MIRANT (PHILIPPINES) CORPORATION and EDGARDO A.
BAUTISTA
vs. JOSELITO A. CARO

Labor Law; Statutes; Statutory Construction; Liberal

Construction; This jurisdiction has adopted in the field of
labor protection a liberal stance towards the construction of
the rules of procedure in order to serve the ends of
substantial justice.—This jurisdiction has adopted in the field
of labor protection a liberal stance towards the construction of
the rules of procedure in order to serve the ends of substantial
justice. This liberal construction in labor law emanates from the
mandate that the workingman’s welfare should be the primordial
and paramount consideration. Thus, if the rules of procedure will
stunt courts from fulfilling this mandate, the rules of procedure
shall be relaxed if the circumstances of a case warrant the
exercise of such liberality. If we sustain the argument of
petitioners in the case at bar that the petition for certiorari
should have been dismissed outright by the CA, the NLRC
decision would have reached finality and respondent would have
lost his remedy and denied his right to be protected against illegal
dismissal under the Labor Code, as amended.

Same; Management Prerogatives; In the exercise of its

management prerogative, an employer must therefore
ensure that the policies, rules and regulations on work-
related activities of the employees must always be fair and
reasonable and the corresponding penalties, when
prescribed, commensurate to the offense involved and to the
degree of the infraction.—While the adoption and enforcement
by petitioner corporation of its Anti-Drugs Policy is recognized as
a valid exercise of its management prerogative as an employer,
such exercise is not absolute and unbridled. Managerial
prerogatives are subject to limitations provided by law, collective
bargaining agreements, and the general principles of fair play
and justice. In the exercise of its management prerogative, an
employer must therefore ensure that the policies, rules and
regulations on work-related activities of the employees must
always be fair and reasonable and the corresponding penalties,
when prescribed, commensurate to the offense involved and to
the degree of the infraction.

Same; Statutory Construction; It is not a mere

jurisprudential principle, but an enshrined provision of law,
that all doubts shall be resolved in favor of labor.—It is not a
mere jurisprudential principle, but an enshrined provision of law,
that all doubts shall be resolved in favor of labor. Thus, in Article
4 of the Labor Code, as amended, “[a]ll doubts in the
implementation and interpretation of the provisions of [the Labor]
Code, including its implementing rules and regulations, shall be
resolved in favor of labor.” In Article 1702 of the New Civil Code,
a similar provision states that “[i]n case of doubt, all labor
legislation and all labor contracts shall be construed in favor of
the safety and decent living for the laborer.” Applying these
provisions of law to the circumstances in the case at bar, it is not
fair for this Court to allow an ambiguous policy to prejudice the
rights of an employee against illegal dismissal. To hold otherwise
and sustain the stance of petitioner corporation would be to
adopt an interpretation that goes against the very grain of labor
protection in this jurisdiction. As correctly stated by the Labor
Arbiter, “when a conflicting interest of labor and capital are
weighed on the scales of social justice, the heavier influence of
the latter must be counter-balanced by the sympathy and
compassion the law must accord the underprivileged worker.”

Same; Quitclaims; Quitclaims executed by laborers are

ineffective to bar claims for the full measure of their legal
rights.—As to the other issue relentlessly being raised by
petitioner corporation that respondent’s petition for certiorari
before the CA should have been considered moot as respondent
had already previously executed a quitclaim discharging
petitioner corporation from all his monetary claims, we cannot
agree. Quitclaims executed by laborers are ineffective to bar
claims for the full measure of their legal rights, especially in this
 case where the evidence on record shows that the amount stated
in the quitclaim exactly corresponds to the amount claimed as
unpaid wages by respondent under Annex A of his Reply filed
with the Labor Arbiter. Prima facie, this creates a false
impression that respondent’s claims have already been settled by
petitioner corporation — discharging the latter from all of
respondent’s monetary claims. In truth and in fact, however, the
amount paid under the subject quitclaim represented the
salaries of respondent that remained unpaid at the time of his
termination — not the amounts being claimed in the case at bar.

Mercantile Law; Corporations; A corporation has a

personality separate and distinct from its officers and board
of directors who may only be held personally liable for
damages if it is proven that they acted with malice or bad
faith in the dismissal of an employee.—A corporation has a
personality separate and distinct from its officers and board of
directors who may only be held personally liable for damages if it
is proven that they acted with malice or bad faith in the dismissal
of an employee. Absent any evidence on record that petitioner
Bautista acted maliciously or in bad faith in effecting the
termination of respondent, plus the apparent lack of allegation in
the pleadings of respondent that petitioner Bautista acted in
such manner, the doctrine of corporate fiction dictates that only
petitioner corporation should be held liable for the illegal
dismissal of respondent.

P. G.R. No. 209741

April 15, 2015
SOCIAL SECURITY COMMISSION vs. EDNA A. AZOTE

Labor Law; Social Security Law; Republic Act (RA) No. 8282,
the amendatory law of R.A. No. 1161 or the “Social Security
Law” is a tax-exempt social security service designed to
promote social justice and provide meaningful protection to
members and their beneficiaries against the hazards of
disability, sickness, maternity, old age, death, and other
contingencies resulting in loss of income or financial
burden.—The law in force at the time of Edgardo’s death was
Republic Act (R.A.) No. 8282, the amendatory law of R.A. No.
1161 or the “Social Security Law.” It is a tax-exempt social
security service designed to promote social justice and provide
meaningful protection to members and their beneficiaries against
the hazards of disability, sickness, maternity, old age, death, and
other contingencies resulting in loss of income or financial
burden.

Same; Same; As a social security program of the government,

Section 8(e) and (k) of Republic Act (RA) No. 8282 expressly
provides who would be entitled to receive benefits from its
deceased member.—As a social security program of the
government, Section 8(e) and (k) of the said law expressly
provides who would be entitled to receive benefits from its
deceased member, to wit: SEC. 8. Terms Defined.—For
purposes of this Act, the following terms shall, unless the context
indicates otherwise, have the following meanings: x x x x (e)
Dependents – The dependents shall be the following: (1) The legal
spouse entitled by law to receive support from the member; (2)
The legitimate, legitimated or legally adopted, and illegitimate
child who is unmarried, not gainfully employed, and has not
reached twenty-one (21) years of age, or if over twenty-one (21)
years of age, he is congenitally or while still a minor has been
permanently incapacitated and incapable of self-support,
physically or mentally; and (3) The parent who is receiving
regular support from the member. x x x x (k) Beneficiaries – The
dependent spouse until he or she remarries, the dependent
legitimate, legitimated or legally adopted, and illegitimate
children, who shall be the primary beneficiaries of the member:
Provided, That the dependent illegitimate children shall be
entitled to fifty percent (50%) of the share of the legitimate,
legitimated or legally adopted children: Provided, further, That in
the absence of the dependent legitimate, legitimated children of
the member, his/her dependent illegitimate children shall be
entitled to one hundred percent (100%) of the benefits. In their
absence, the dependent parents who shall be the secondary
beneficiaries of the member. In the absence of all the foregoing,
any other person designated by the member as his/her
secondary beneficiary.

Same; Same; Applying Section 8(e) and (k) of Republic Act

(RA) No. 8282, it is clear that only the legal spouse of the
deceased member is qualified to be the beneficiary of the
latter’s Social Security Commission (SSC) benefits.—Applying
Section 8(e) and (k) of R.A. No. 8282, it is clear that only the legal
spouse of the deceased member is qualified to be the beneficiary
of the latter’s SS benefits. In this case, there is a concrete proof
that Edgardo contracted an earlier marriage with another
individual as evidenced by their marriage contract. Edgardo even
acknowledged his married status when he filled out the 1982
Form E-4 designating Rosemarie as his spouse.

Same; Same; Burden of Proof; Settled is the rule that

“whoever claims entitlement to the benefits provided by law
should establish his or her right thereto by substantial
evidence.”—Using the parameters outlined in Article 41 of the
Family Code, Edna, without doubt, failed to establish that there
was no impediment or that the impediment was already removed
at the time of the celebration of her marriage to Edgardo. Settled
is the rule that “whoever claims entitlement to the benefits
provided by law should establish his or her right thereto by
substantial evidence.” Edna could not adduce evidence to prove
that the earlier marriage of Edgardo was either annulled or
dissolved or whether there was a declaration of Rosemarie’s
presumptive death before her marriage to Edgardo. What is
apparent is that Edna was the second wife of Edgardo.
Considering that Edna was not able to show that she was the
legal spouse of a deceased-member, she would not qualify under
the law to be the beneficiary of the death benefits of Edgardo.

Administrative Agencies; Social Security Commission;

Although the Social Security Commission (SSC) is not
intrinsically empowered to determine the validity of
marriages, it is required by Section 4(b)(7) of Republic Act
(RA) No. 8282 to examine available statistical and economic
data to ensure that the benefits fall into the rightful
beneficiaries.—Although the SSC is not intrinsically empowered
to determine the validity of marriages, it is required by Section
4(b)(7) of R.A. No. 8282 to examine available statistical and
economic data to ensure that the benefits fall into the rightful
beneficiaries. As held in Social Security Commission v. Favila,
646 SCRA 462 (2011): SSS, as the primary institution in charge
of extending social security protection to workers and their
beneficiaries is mandated by Section 4(b)(7) of RA 8282 to require
reports, compilations and analyses of statistical and economic
data and to make an investigation as may be needed for its proper
administration and development. Precisely, the investigations
 conducted by SSS are appropriate in order to ensure that the
benefits provided under the SS Law are received by the rightful
beneficiaries. It is not hard to see that such measure is necessary
for the system’s proper administration, otherwise, it will be
swamped with bogus claims that will pointlessly deplete its
funds. Such scenario will certainly frustrate the purpose of the
law which is to provide covered employees and their families
protection against the hazards of disability, sickness, old age and
death, with a view to promoting their well-being in the spirit of
social justice. Moreover and as correctly pointed out by SSC,
such investigations are likewise necessary to carry out the
mandate of Section 15 of the SS Law which provides in part, viz.:
Sec. 15. Non-transferability of Benefits.—The SSS shall pay the
benefits provided for in this Act to such [x x x] persons as may be
entitled thereto in accordance with the provisions of this Act
x x x.

PART II- POST EMPLOYMENT TRANSITORY AND FINL PROVISIONS OF THE

LABOR CODE

X Pages 749 to 810.

CASE:

Duration of the Project or Specific Undertaking.

A. G.R. No. 209499
January 28, 2015
MA. CHARITO C. GADIA et al vs. SYKES ASIA, INC./CHUCK
SYKES/MIKE HINDS/MICHAEL HENDERSON

Remedial Law; Special Civil Actions; Certiorari; Grave Abuse of

Discretion; To justify the grant of the extraordinary remedy of
certiorari, petitioners must satisfactorily show that the court or
quasi-judicial authority gravely abused the discretion conferred
upon it.—At the outset, it must be stressed that to justify the grant of
the extraordinary remedy of certiorari, petitioners must satisfactorily
show that the court or quasi-judicial authority gravely abused the
discretion conferred upon it. Grave abuse of discretion connotes
judgment exercised in a capricious and whimsical manner that is
tantamount to lack of jurisdiction. To be considered “grave,” discretion
must be exercised in a despotic manner by reason of passion or
personal hostility, and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law.

Same; Same; Same; Same; Labor Law; In labor disputes, grave abuse
of discretion may be ascribed to the National Labor Relations
Commission (NLRC) when, inter alia, its findings and the
conclusions reached thereby are not supported by substantial
evidence.—In labor disputes, grave abuse of discretion may be
ascribed to the NLRC when, inter alia, its findings and the conclusions
reached thereby are not supported by substantial evidence. This
requirement of substantial evidence is clearly expressed in Section 5,
Rule 133 of the Rules of Court which provides that “in cases filed before
administrative or quasi-judicial bodies, a fact may be deemed
established if it is supported by substantial evidence, or that amount
of relevant evidence which a reasonable mind might accept as adequate
to justify a conclusion.”

Labor Law; “Project Employees” and “Regular Employees,”

Distinguished.—Article 294 of the Labor Code, as amended,
distinguishes a project-based employee from a regular employee as
follows: Art. 294. Regular and casual employment.—The provisions
of written agreement to the contrary notwithstanding and regardless of
the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade
of the employer, except where the 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 services to be performed is seasonal in nature and
the employment is for the duration of the season. x x x x (Emphasis
and underscoring supplied) In Omni Hauling Services, Inc. v. Bon, 734
SCRA 270 (2014), the Court extensively discussed how to determine
whether an employee may be properly deemed project-based or regular,
to wit: A project employee is assigned to a project which begins and
ends at determined or determinable times. Unlike regular employees
who may only be dismissed for just and/or authorized causes under
the Labor Code, the services of employees who are hired as “project[-
based] employees” may be lawfully terminated at the completion of the
project. According to jurisprudence, the principal test for determining
whether particular employees are properly characterised as “project[-
based] employees” as distinguished from “regular employees,” is
whether or not the employees were assigned to carry out a “specific
project or undertaking,” the duration (and scope) of which were
specified at the time they were engaged for that project. The project
could either be (1) a particular job or undertaking that is within the
regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other
undertakings of the company; or (2) a particular job or undertaking
that is not within the regular business of the corporation. In order to
safeguard the rights of workers against the arbitrary use of the word
“project” to prevent employees from attaining a regular status,
employers claiming that their workers are project[-based] employees
should not only prove that the duration and scope of the employment
was specified at the time they were engaged, but also, that there was
indeed a project.

Burden of Proving the Fact of Dismissal

A. G.R. No. 207888

June 9, 2014
DIONARTO Q. NOBLEJAS vs. ITALIAN MARITIME ACADEMY
PHILS., INC., CAPT. NICOLO S. TERREI, RACELI B. FERREZ and
MA. TERESA R. MENDOZA.

Labor Law; Regular Employees; Pursuant to Article 280 of the

Labor Code, there are two kinds of regular employees, namely:
(1) those who are engaged to perform activities which are
usually necessary or desirable in the usual business or trade of
the employer; and (2) those who have rendered at least one year
of service, whether continuous or broken, with respect to the
activities in which they are employed.—Pursuant to Article 280
of the Labor Code, there are two kinds of regular employees, namely:
(1) those who are engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the
employer; and (2) those who have rendered at least one year of
service, whether continuous or broken, with respect to the activities
in which they are employed. Regular employees are further classified
into (1) regular employees — by nature of work and (2) regular
employees — by years of service. The former refers to those
employees who perform a particular function which is necessary or
desirable in the usual business or trade of the employer, regardless
of their length of service; while the latter refers to those employees
who have been performing the job, regardless of its nature thereof,
for at least a year.

Same; Evidence; Burden of Proof; Fair evidentiary rule dictates

that before employers are burdened to prove that they did not
commit illegal dismissal, it is incumbent upon the employee to
first establish by substantial evidence the fact of his or her
dismissal.—Fair evidentiary rule dictates that before employers are
burdened to prove that they did not commit illegal dismissal, it is
incumbent upon the employee to first establish by substantial
evidence the fact of his or her dismissal. The Court is not unmindful
of the rule in labor cases that the employer has the burden of proving
that the termination was for a valid or authorized cause. It is
likewise incumbent upon the employees, however, that they should
first establish by competent evidence the fact of their dismissal from
employment. It is an age-old rule that the one who alleges a fact has
the burden of proving it and the proof should be clear, positive and
convincing. Mere allegation is not evidence.

Same; Same; The fact of dismissal must be established by

positive and overt acts of an employer indicating the intention
to dismiss.—Let it be underscored that the fact of dismissal must
be established by positive and overt acts of an employer indicating
the intention to dismiss. Indeed, a party alleging a critical fact must
support his allegation with substantial evidence, for any decision
based on unsubstantiated allegation cannot stand without offending
due process. Here, there is no sufficient proof showing that Noblejas
was actually laid off from work. In any event, his filing of a complaint
for illegal dismissal, irrespective of whether reinstatement or
separation pay was prayed for, could not by itself be the sole
consideration in determining whether he has been illegally
dismissed. All circumstances surrounding the alleged termination
should also be taken into account.
Transfer

A. G.R. No. 174208

January 25, 2012
JONATHAN V. MORALES, vs. HARBOUR CENTRE PORT
TERMINAL, INC.,

Labor Law; Termination of Employment; Constructive

Dismissal; Constructive dismissal exists where there is
cessation of work because “continued employment is
rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay” and
other benefits.—Constructive dismissal exists where there is
cessation of work because “continued employment is rendered
impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay” and other benefits.
Aptly called a dismissal in disguise or an act amounting to
dismissal but made to appear as if it were not, constructive
dismissal may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable
on the part of the employee that it could foreclose any choice by
him except to forego his continued employment. In cases of a
transfer of an employee, the rule is settled that the employer is
charged with the burden of proving that its conduct and action
are for valid and legitimate grounds such as genuine business
necessity and that the transfer is not unreasonable, inconvenient
or prejudicial to the employee. If the employer cannot overcome
this burden of proof, the employee’s transfer shall be tantamount
to unlawful constructive dismissal.

Same; Management Prerogatives; Transfers; Reassignment;

An employer may transfer or assign employees from one
office or area of operation to another, provided there is no
demotion in rank or diminution of salary, benefits, and other
privileges, and the action is not motivated by discrimination,
made in bad faith, or effected as a form of punishment or
demotion without sufficient cause.—The right of employees to
security of tenure does not give them vested rights to their
positions to the extent of depriving management of its prerogative
to change their assignments or to transfer them. By management
prerogative is meant the right of an employer to regulate all
aspects of employment, such as the freedom to prescribe work
assignments, working methods, processes to be followed,
regulation regarding transfer of employees, supervision of their
work, lay-off and discipline, and dismissal and recall of workers.
Although jurisprudence recognizes said management
prerogative, it has been ruled that the exercise thereof, while
ordinarily not interfered with, is not absolute and is subject to
limitations imposed by law, collective bargaining agreement, and
general principles of fair play and justice. Thus, an employer may
transfer or assign employees from one office or area of operation
to another, provided there is no demotion in rank or diminution
of salary, benefits, and other privileges, and the action is not
motivated by discrimination, made in bad faith, or effected as a
form of punishment or demotion without sufficient cause.
Indeed, having the right should not be confused with the manner
in which that right is exercised.

Same; Evidence; Substantial Evidence; In administrative or

quasi-judicial proceedings like those conducted before the
National Labor Relations Commission (NLRC), the standard
of proof is substantial evidence which is understood to be
more than just a scintilla or such amount of relevant
evidence which a reasonable mind might accept as adequate
to justify a conclusion.—As the party belatedly seeking to
justify the reassignment due to the supposed reorganization of
its corporate structure, HCPTI, in contrast, did not even bother
to show that it had implemented a corporate reorganization
and/or approved a new plantilla of positions which included the
one to which Morales was being transferred. Since the burden of
evidence lies with the party who asserts the affirmative of an
issue, the respondent has to prove the allegations in his
affirmative defenses in the same manner that the complainant
has to prove the allegations in the complaint. In administrative
or quasi-judicial proceedings like those conducted before the
NLRC, the standard of proof is substantial evidence which is
understood to be more than just a scintilla or such amount of
relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.

Same; Termination of Employment; Abandonment;

Abandonment requires the deliberate, unjustified refusal of
the employee to resume his employment, without any
intention of returning.—As a just and valid ground for
 dismissal, at any rate, abandonment requires the deliberate,
unjustified refusal of the employee to resume his employment,
without any intention of returning. Since an employee like
Morales who takes steps to protest his dismissal cannot logically
be said to have abandoned his work, it is a settled doctrine that
the filing of a complaint for illegal dismissal is inconsistent with
abandonment of employment.

B. G.R. No. 144412

November 18, 2003
ALLIED BANKING CORPORATION vs. COURT OF APPEALS
and POTENCIANO L. GALANIDA

Pleadings and Practice; A syllabus is not a part of the court’s

decision.—The syllabus of cases in official or unofficial reports
of Supreme Court decisions or resolutions is not the work of the
Court, nor does it state this Court’s decision. The syllabus is
simply the work of the reporter who gives his understanding of
the decision. The reporter writes the syllabus for the convenience
of lawyers in reading the reports. A syllabus is not a part of the
court’s decision. A counsel should not cite a syllabus in place of
the carefully considered text in the decision of the Court.

Same; Same; A lawyer shall not knowingly misquote or

misrepresent the text of a decision or authority; It is the
duty of all officers of the court to cite the rulings and
decisions of the Supreme Court accurately.—In the present
case, Labor Arbiter Almirante and Atty. Durano began by quoting
from Dosch, but substituted a portion of the decision with a
headnote from the SCRA syllabus, which they even underscored.
In short, they deliberately made the quote from the SCRA
syllabus appear as the words of the Supreme Court. We
admonish them for what is at the least patent carelessness, if not
an outright attempt to mislead the parties and the courts taking
cognizance of this case. Rule 10.02, Canon 10 of the Code of
Professional Responsibility mandates that a lawyer shall not
knowingly misquote or misrepresent the text of a decision or
authority. It is the duty of all officers of the court to cite the
rulings and decisions of the Supreme Court accurately.

Labor Law; National Labor Relations Commission (NLRC);

Factual findings of the Court of Appeals, particularly when
they affirm the findings of the NLRC or the lower courts
accorded great weight and even finality, exceptions.—We
accord great weight and even finality to the factual findings of the
Court of Appeals, particularly when they affirm the findings of
the NLRC or the lower courts. However, there are recognized
exceptions to this rule. These exceptions are: (1) when the
findings are grounded on speculation, surmise and conjecture;
(2) when the inference made is manifestly mistaken, absurd or
impossible; (3) when there is grave abuse of discretion in the
appreciation of facts; (4) when the factual findings of the trial and
appellate courts are conflicting; (5) when the Court of Appeals, in
making its findings, has gone beyond the issues of the case and
such findings are contrary to the admissions of both appellant
and appellee; (6) when the judgment of the appellate court is
premised on a misapprehension of facts or when it has failed to
consider certain relevant facts which, if properly considered, will
justify a different conclusion; (7) when the findings of fact are
conclusions without citation of specific evidence on which they
are based; and (8) when the findings of fact of the Court of
Appeals are premised on the absence of evidence but are
contradicted by the evidence on record.

Same; Dismissals; Transfer of an employee ordinarily lies

within the ambit of the employer’s prerogatives; In illegal
dismissal cases, the employer has the burden of showing that
the transfer is not unnecessary, inconvenient and prejudicial
to the displaced employee.—The rule is that the transfer of an
employee ordinarily lies within the ambit of the employer’s
prerogatives. The employer exercises the prerogative to transfer
an employee for valid reasons and according to the requirement
of its business, provided the transfer does not result in demotion
in rank or diminution of the employee’s salary, benefits and other
privileges. In illegal dismissal cases, the employer has the burden
of showing that the transfer is not unnecessary, inconvenient and
prejudicial to the displaced employee.

Same; Same; Employer has the prerogative, based on its

assessment of the employees’ qualifications and
competence, to rotate them in the various areas of its
business operations to ascertain where they will function
with maximum benefit to the company.—As regards Ms. Co,
Galanida’s letter of 16 June 1994 itself showed that her
assignment to Cebu was not in any way related to Galanida’s
transfer. Ms. Co was supposed to replace a certain Larry Sabelino
in the Tabunok branch. The employer has the prerogative, based
on its assessment of the employees’ qualifications and
competence, to rotate them in the various areas of its business
operations to ascertain where they will function with maximum
benefit to the company.

Same; Same; Unfair labor practices relate only to violations

of “the constitutional right of workers and employees to self-
organization” and are limited to the acts enumerated in
Article 248 of the Labor Code.—There is also no basis for the
finding that Allied Bank was guilty of unfair labor practice in
dismissing Galanida. Unfair labor practices relate only to
violations of “the constitutional right of workers and employees
to self-organization” and are limited to the acts enumerated in
Article 248 of the Labor Code, none of which applies to the
present case. There is no evidence that Galanida took part in
forming a union, or even that a union existed in Allied Bank.

Same; Same; Refusal to obey a valid transfer order

constitutes willful disobedience of a lawful order of an
employer.—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
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.

Constitutional Law; Due Process; The essence of due process

is simply an opportunity to be heard.—On the requirement of
a hearing, this Court has held that the essence of due process is
simply an opportunity to be heard. An actual hearing is not
necessary. The exchange of several letters, in which Galanida’s
wife, a lawyer with the City Prosecutor’s Office, assisted him, gave
Galanida an opportunity to respond to the charges against him.
C. G.R. No. 153569
January 24, 2012
LOLITA S. CONCEPCION vs. MINEX IMPORT
CORPORATION/MINERAMA CORPORATION, KENNETH
MEYERS, SYLVIA P. MARIANO, and VINA MARIANO,

Labor Law; Termination of Employment; To dismiss an

employee, the law requires the existence of a just and valid
cause.—To dismiss an employee, the law requires the existence
of a just and valid cause. Article 282 of the Labor Code
enumerates the just causes for termination by the employer: (a)
serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or the latter’s representative in
connection with the employee’s 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
his duly authorized representative; (d) commission of a crime or
offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized
representative; and (e) other causes analogous to the foregoing.

Same; Same; Acquittal of Employee; The acquittal of the

employee from the criminal prosecution for a crime
committed against the interest of the employer did not
automatically eliminate loss of confidence as a basis for
administrative action against the employee.—In Philippine
Long Distance Telephone Co. (PLDT Co.) vs. NLRC, the Court held
that the acquittal of the employee from the criminal prosecution
for a crime committed against the interest of the employer did not
automatically eliminate loss of confidence as a basis for
administrative action against the employee; and that in cases
where the acts of misconduct amounted to a crime, a dismissal
might still be properly ordered notwithstanding that the employee
was not criminally prosecuted or was acquitted after a criminal
prosecution.

Same; Same; Quantum of Proof; The quantum of proof

required for convicting an accused is thus higher—proof of
guilt beyond reasonable doubt—than the quantum prescribed
for dismissing an employee—substantial evidence.—The
employer is not expected to be as strict and rigorous as a judge
 in a criminal trial in weighing all the probabilities of guilt before
terminating the employee. Unlike a criminal case, which
necessitates a moral certainty of guilt due to the loss of the
personal liberty of the accused being the issue, a case concerning
an employee suspected of wrongdoing leads only to his
termination as a consequence. The quantum of proof required for
convicting an accused is thus higher—proof of guilt beyond
reasonable doubt—than the quantum prescribed for dismissing
an employee—substantial evidence. In so stating, we are not
diminishing the value of employment, but only noting that the
loss of employment occasions a consequence lesser than the loss
of personal liberty, and may thus call for a lower degree of proof.

Same; Same; The fair and reasonable opportunity required to

be given to the employee before dismissal encompassed not
only the giving to the employee of notice of the cause and
the ability of the employee to explain, but also the chance to
defend against the accusation.—The fair and reasonable
opportunity required to be given to the employee before dismissal
encompassed not only the giving to the employee of notice of the
cause and the ability of the employee to explain, but also the
chance to defend against the accusation. This was our thrust in
Philippine Pizza, Inc. v. Bungabong, 458 SCRA 288 (2005), where
we held that the employee was not afforded due process despite
the dismissal being upon a just cause, considering that he was
not given a fair and reasonable opportunity to confront his
accusers and to defend himself against the charge of theft
notwithstanding his having submitted his explanation denying
that he had stolen beer from the company dispenser. The
termination letter was issued a day before the employee could go
to the HRD Office for the investigation, which made it clear to
him that the decision to terminate was already final even before
he could submit his side and refute the charges against him.
Nothing that he could say or do at that point would have changed
the decision to dismiss him. Such omission to give the employee
the benefit of a hearing and investigation before his termination
constituted an infringement of his constitutional right to due
process by the employer.

D. G.R. No. 189082. July 11, 2012.*

E. JOSEPHINE RUIZ vs. WENDEL OSAKA REALTY CORP., D.M.
WENCESLAO AND ASSOCIATES, INC. and DELFIN J.
WENCESLAO, JR.,

Labor Law; Transfer of Employees; An employer has the

inherent right to transfer or assign an employee in pursuance
of its legitimate business interest, subject only to the
condition that the move be not motivated by bad faith.—An
employer has the inherent right to transfer or assign an employee
in pursuance of its legitimate business interest, subject only to
the condition that the move be not motivated by bad faith. x x x
Although it is true that petitioner has yet to be proven guilty,
respondents had the authority to reassign her, pending
investigation. As held in Blue Dairy Corporation and/or
Aviguetero and Miguel v. NLRC and Recalde: Re-assignments
made by management pending investigation of irregularities
allegedly committed by an employee fall within the ambit of
management prerogative. The purpose of reassignments is no
different from that of preventive suspension which management
could validly impose as a disciplinary measure for the protection
of the company’s property pending investigation of any alleged
malfeasance or misfeasance committed by the employee.

Same; Same; Management Prerogative; An employer’s

decision to transfer an employee, if made in good faith, is a
valid exercise of a management prerogative, although it may
result in personal inconvenience or hardship to the
employee.—An employer’s decision to transfer an employee, if
made in good faith, is a valid exercise of a management
prerogative, although it may result in personal inconvenience or
hardship to the employee. We have already ruled that the transfer
of the employment of petitioner to Cavite was not motivated by
bad faith. Thus, any resulting inconvenience or hardship on her
part is of no moment.

Same; Termination of Employments; In labor cases, directors

and officers are solidarily liable with the corporation for the
termination of employment of corporate employees if their
termination was committed with malice or bad faith.—In
labor cases, directors and officers are solidarily liable with the
corporation for the termination of employment of corporate
employees if their termination was committed with malice or bad
faith. The ruling applies when a corporate officer acts with malice
or bad faith in suspending an employee. Such malice or bad faith
is not present in this case.

Submission of Evidence for the First Time on Appeal

A. G.R. No. 175170

September 5, 2012
MISAMIS ORIENTAL II ELECTRIC SERVICE
COOPERATIVE (MORESCO II), vs. VIRGILIO M.
CAGA-LAWAN,

Labor Law; Transfer of Employees; Management

Prerogative; It is within the ambit of the employer’s
prerogative to transfer an employee for valid reasons and
according to the requirement of its business, provided
that the transfer does not result in demotion in rank or
diminution of salary, benefits and other privileges.―The
rule is that it is within the ambit of the employer’s prerogative
to transfer an employee for valid reasons and according to the
requirement of its business, provided that the transfer does
not result in demotion in rank or diminution of salary, benefits
and other privileges. This Court has always considered the
management’s prerogative to transfer its employees in pursuit
of its legitimate interests. But this prerogative should be
exercised without grave abuse of discretion and with due
regard to the basic elements of justice and fair play, such that
if there is a showing that the transfer was unnecessary or
inconvenient and prejudicial to the employee, it cannot be
upheld.

Same; Evidence; When there is doubt between the

evidence submitted by the employer and that submitted
by the employee, the scales of justice must be tilted in
favor of the employee.―When there is doubt between the
evidence submitted by the employer and that submitted by
the employee, the scales of justice must be tilted in favor of
the employee. This is consistent with the rule that an
employer’s cause could only succeed on the strength of its own
evidence and not on the weakness of the employee’s evidence.
Thus, MORESCO II cannot rely on the weakness of Ortiz’s
certification in order to give more credit to its own evidence.
Self-serving and unsubstantiated declarations are not
sufficient where the quantum of evidence required to establish
a fact is substantial evidence, described as more than a mere
scintilla. “The evidence must be real and substantial, and not
merely apparent.” MORESCO II has miserably failed to
discharge the onus of proving the validity of Cagalawan’s
transfer.

Same; Bad Faith; Bad faith does not simply connote bad
judgment or negligence; it imputes a dishonest purpose or
some moral obliquity and conscious doing of a wrong; a
breach of sworn duty through some motive or intent or ill
will; it partakes of the nature of fraud.―“[B]ad faith does
not simply connote bad judgment or negligence; it imputes a
dishonest purpose or some moral obliquity and conscious
doing of a wrong; a breach of sworn duty through some motive
or intent or ill will; it partakes of the nature of fraud.” Here,
although we agree with the Labor Arbiter that Ke-e acted in
an arbitrary manner in effecting Cagalawan’s transfer, the
same, absent any showing of some dishonest or wrongful
purpose, does not amount to bad faith.

Constructive Dismissal

A. G.R. No. 173882

February 15, 2012
JULIE’S BAKESHOP and/or Edgar Reyes
vs. Henry Arnaiz, EDGAR NAPAL,** and Jonathan
Tolores,

Labor Law; Appeals; Findings of facts of the National

Labor Relations Commission (NLRC), affirming those of
the Labor Arbiter, are accorded respect and due
consideration when supported by substantial
evidence.—Indeed, “factual findings of labor officials who
are deemed to have acquired expertise in matters within
their respective jurisdictions are generally accorded not
only respect, but even finality.” It is a well-entrenched rule
that findings of facts of the NLRC, affirming those of the
Labor Arbiter, are accorded respect and due consideration
when supported by substantial evidence. We, however, find
that the doctrine of great respect and finality has no
application to the case at bar. As stated, the Labor Arbiter
dismissed respondents’ complaints on mere technicality.
The NLRC, upon appeal, then came up with three divergent
rulings. At first, it remanded the case to the Labor Arbiter.
However, in a subsequent resolution, it decided to resolve
the case on the merits by ruling that respondents were
constructively dismissed. But later on, it again reversed
itself in its third and final resolution of the case and ruled
in petitioners’ favor. Therefore, contrary to Reyes’s claim,
the NLRC did not, on any occasion, affirm any factual
findings of the Labor Arbiter. The CA is thus correct in
reviewing the entire records of the case to determine which
findings of the NLRC is sound and in accordance with law.
Besides, the CA, at any rate, may still resolve factual issues
by express mandate of the law despite the respect given to
administrative findings of fact.

Same; Management Prerogative; Management is free to

regulate, according to its own discretion and judgment,
all aspects of employment, including hiring, work
assignments, working methods, time, place and
manner of work, processes to be followed, supervision
of workers, working regulations, transfer of employees,
work supervision, lay off of workers and discipline,
dismissal and recall of workers.—We have held that
management is free to regulate, according to its own
discretion and judgment, all aspects of employment,
including hiring, work assignments, working methods,
time, place and manner of work, processes to be followed,
supervision of workers, working regulations, transfer of
employees, work supervision, lay off of workers and
discipline, dismissal and recall of workers. The exercise of
management prerogative, however, is not absolute as it
must be exercised in good faith and with due regard to the
rights of labor.
Same; Termination of Employment; Constructive
Dismissal; The employer must demonstrate that the
transfer is not unreasonable, inconvenient, or
prejudicial to the employee and that the transfer does
not involve a demotion in rank or a diminution in
salary and other benefits. If the employer fails to
overcome this burden of proof, the employee’s transfer
is tantamount to unlawful constructive dismissal.—In
constructive dismissal cases, the employer has the burden
of proving that the transfer of an employee is for just or
valid ground, such as genuine business necessity. The
employer must demonstrate that the transfer is not
unreasonable, inconvenient, or prejudicial to the employee
and that the transfer does not involve a demotion in rank
or a diminution in salary and other benefits. “If the
employer fails to overcome this burden of proof, the
employee’s transfer is tantamount to unlawful constructive
dismissal.”

Same; Same; Same; Demotion; Demotion involves a

situation in which an employee is relegated to a
subordinate or less important position constituting a
reduction to a lower grade or rank, with a
corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary.—
“[D]emotion involves a situation in which an employee is
relegated to a subordinate or less important position
constituting a reduction to a lower grade or rank, with a
corresponding decrease in duties and responsibilities, and
usually accompanied by a decrease in salary.” When there
is a demotion in rank and/or a diminution in pay; when a
clear discrimination, insensibility or disdain by an
employer becomes unbearable to the employee; or when
continued employment is rendered impossible,
unreasonable or unlikely, the transfer of an employee may
constitute constructive dismissal.

Same; Same; Same; Abandonment; A charge of

abandonment is inconsistent with the filing of a
complaint for constructive dismissal.—Petitioners’
claim that respondents abandoned their job stands on
shallow grounds. Respondents cannot be faulted for
 refusing to report for work as they were compelled to quit
their job due to a demotion without any just cause.
Moreover, we have consistently held that a charge of
abandonment is inconsistent with the filing of a complaint
for constructive dismissal. Respondents’ demand to
maintain their positions as chief bakers by filing a case and
asking for the relief of reinstatement belies abandonment.
As the transfer proves unbearable to respondents as to
foreclose any choice on their part except to forego
continued employment, same amounts to constructive
dismissal for which reinstatement without loss of seniority
rights, full backwages, inclusive of allowances, and other
benefits or their monetary equivalent, computed from the
time their compensation was withheld up to the time of
their actual reinstatement, should be granted. The CA,
therefore, did not err in awarding the reliefs prayed for by
the respondents as they were, without a doubt,
constructively dismissed.

Loss of Trust And Confidence

A. G.R. No. 17377

January 30, 2012
MANILA ELECTRIC COMPANY vs. MA. LUISA BELTRAN

Labor Law; Termination of Employment; Loss of Trust and

Confidence; For loss of trust and confidence to be a valid ground
for dismissal, it must be based on a willful breach of trust and
founded on clearly established facts.—For loss of trust and
confidence to be a valid ground for dismissal, it must be based on a
willful breach of trust and founded on clearly established facts. A
breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done
carelessly, thoughtlessly, heedlessly or inadvertently. In addition,
loss of trust and confidence must rest on substantial grounds and
not on the employer’s arbitrariness, whims, caprices or suspicion.
Same; Same; The burden of proving the legality of an employee’s
dismissal lies with the employer.—It should be emphasized at this
point that the burden of proving the legality of an employee’s
dismissal lies with the employer. “Unsubstantiated suspicions,
accusations, and conclusions of employers do not provide legal
justification for dismissing employees.” “[M]ere conjectures cannot
work to deprive employees of their means of livelihood.” To begin
with, MERALCO cannot claim or conclude that Beltran
misappropriated the money based on mere suspicion. The NLRC
thus erred in concluding that Beltran made use of the money from
the mere fact that she took a leave of absence after having been
reminded of the unremitted funds. And even if Beltran delayed
handing over the funds to the company, MERALCO still has the
burden of proof to show clearly that such act of negligence is
sufficient to justify termination from employment. Moreover, we find
that Beltran’s delay does not clearly and convincingly establish a
willful breach on her part, that is, which is done “intentionally,
knowingly and purposely, without any justifiable excuse.” True, the
reasons Beltran proffered for her delay in remitting the cash
payment are mere allegations without any concrete proof.
Nonetheless, we emphasize that as the employer, the burden still
lies on MERALCO to provide clear and convincing facts upon which
the alleged loss of confidence is to be made to rest.

Same; Same; Gross Negligence; To justify removal from service,

the negligence should be gross and habitual.—Undoubtedly,
Beltran was remiss in her duties for her failure to immediately turn
over Chang’s payment to the company. Such negligence, however, is
not sufficient to warrant separation from employment. To justify
removal from service, the negligence should be gross and habitual.
“Gross negligence x x x is the want of even slight care, acting or
omitting to act in a situation where there is duty to act, not
inadvertently but willfully and intentionally, with a conscious
indifference to consequences insofar as other persons may be
affected.” Habitual neglect, on the other hand, connotes repeated
failure to perform one’s duties for a period of time, depending upon
the circumstances. No concrete evidence was presented by
MERALCO to show that Beltran’s delay in remitting the funds was
done intentionally. Neither was it shown that same is willful,
unlawful and felonious contrary to MERALCO’s finging as stated in
the letter of termination it sent to Beltran. Surely, Beltran’s single
 and isolated act of negligence cannot justify her dismissal from
service.

Same; Penalties; Where a penalty less punitive would suffice,

whatever missteps may be committed by an employee ought not
to be visited with a consequence so severe such as dismissal
from employment.—Under the circumstances, MERALCO’s
sanction of dismissal will not be commensurate to Beltran’s
inadvertence not only because there was no clear showing of bad
faith and malice but also in consideration of her untainted record of
long and dedicated service to MERALCO. In the similar case of
Philippine Long Distance Telephone Company v. Berbano, Jr., 606
SCRA 81 (2009), we held that: The magnitude of the infraction
committed by an employee must be weighed and equated with the
penalty prescribed and must be commensurate thereto, in view of
the gravity of the penalty of dismissal or termination from the
service. The employer should bear in mind that in termination cases,
what is at stake is not simply the employee’s job or position but [her]
very livelihood. Where a penalty less punitive would suffice,
whatever missteps may be committed by an employee ought not to
be visited with a consequence so severe such as dismissal from
employment. Hence, we find no reversible error or any grave abuse
of discretion on the part of the CA in ordering Beltran’s
reinstatement without backwages. The forfeiture of her salary is an
equitable punishment for the simple negligence committed.

Probationary Employment

A. G.R. No. 172223

February 6, 2012
CANADIAN OPPORTUNITIES UNLIMITED, INC., vs. BART Q.
DALANGIN, JR.,

Remedial Law; Civil Procedure; Appeals; The Supreme Court is not a trier
of facts, the resolution of factual issues being the function of lower courts
whose findings are received with respect and are binding on the Court
subject to certain exceptions such as when there are conflicting findings of
fact by the Court of Appeals, on the one hand, and the trial court or
government agency concerned, on the other, as in the present case.—As a
rule, the Court is not a trier of facts, the resolution of factual issues being the
function of lower courts whose findings are received with respect and are binding
on the Court subject to certain exceptions. A recognized exception to the rule is
the circumstance in which there are conflicting findings of fact by the CA, on the
one hand, and the trial court or government agency concerned, on the other, as
in the present case. The factual findings of the NLRC on the dispute between
Dalangin and the company are at variance with those of the CA, thus
necessitating our review of the case, especially the evidence on record.

Labor Law; Probationary Employees; A probationary appointment gives the

employer an opportunity to observe the fitness of a probationer while at
work, and to ascertain whether he would be a proper and efficient
employee.—In International Catholic Migration Commission v. NLRC, 169 SCRA
606 (1989), the Court explained that a probationary employee, as understood
under Article 281 of the Labor Code, is one who is on trial by an employer, during
which, the latter determines whether or not he is qualified for permanent
employment. A probationary appointment gives the employer an opportunity to
observe the fitness of a probationer while at work, and to ascertain whether he
would be a proper and efficient employee. Dalangin was barely a month on the
job when the company terminated his employment. He was found wanting in
qualities that would make him a “proper and efficient” employee or, as the
company put it, he was unfit and unqualified to continue as its Immigration and
Legal Manager.

Same; Same; The length of time the probationary employee remains on

probation depends on the parties’ agreement, but it shall not exceed six (6)
months under Article 281 of the Labor Code, unless it is covered by an
apprenticeship agreement stipulating a longer period.—The essence of a
probationary period of employment fundamentally lies in the purpose or
objective of both the employer and the employee during the period. While the
employer observes the fitness, propriety and efficiency of a probationer to
ascertain whether he is qualified for permanent employment, the latter seeks to
prove to the former that he has the qualifications to meet the reasonable
standards for permanent employment. The “trial period” or the length of time the
probationary employee remains on probation depends on the parties’ agreement,
but it shall not exceed six (6) months under Article 281 of the Labor Code, unless
it is covered by an apprenticeship agreement stipulating a longer period. Article
281 provides: 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.

B. G.R. No. 155505

February 15, 2007
EMILIO M. CAPAROSO and JOEVE P. QUINDIPAN, vs. COURT OF
APPEALS, NATIONAL LABOR RELATIONS COMMISSION, COMPOSITE
ENTERPRISES INCORPORATED, and EDITH TAN

Labor Law; Fixed-Term Employment; Even if an employee is engaged

to perform activities that are necessary or desirable in the usual trade
or business of the employer, it does not preclude the fixing of
employment for a definite period.—Under Article 280 of the Labor Code,
a regular employee is (1) one who is engaged to perform activities that are
necessary or desirable in the usual trade or business of the employer, or
(2) a casual employee who has rendered at least one year of service,
whether continuous or broken, with respect to the activity in which he is
employed. However, even if an employee is engaged to perform activities
that are necessary or desirable in the usual trade or business of the
employer, it does not preclude the fixing of employment for a definite
period.

Same; Same; Criteria for Fixed-Term Employments.—The Court thus

laid down the criteria under which fixed-term employment could not be
said to be in circumvention of the law on security of tenure, thus: 1. The
fixed period of employment was knowingly and voluntarily agreed upon by
the parties without any force, duress, or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating
his consent; or 2. It satisfactorily appears that the employer and the
 employee dealt with each other on more or less equal terms with no moral
dominance exercised by the former or the latter.

C. G.R. No. 177937

January 19, 2011
ROBINSONS GALLERIA/ROBINSONS SUPERMARKET CORPORATION
and/or JESS MANUEL, vs. IRENE R. RANCHEZ

Labor Law; Probationary Employees; Termination of Employment; A

probationary employee, like a regular employee, enjoys security of
tenure; Grounds for termination on the services of an employee
engaged on probationary basis.—There is probationary employment
when the employee upon his engagement is made to undergo a trial period
during which the employer determines his fitness to qualify for regular
employment based on reasonable standards made known to him at the
time of engagement. A probationary employee, like a regular employee,
enjoys security of tenure. However, in cases of probationary employment,
aside from just or authorized causes of termination, an additional ground
is provided under Article 281 of the Labor Code, i.e., the probationary
employee may also be terminated for failure to qualify as a regular
employee in accordance with reasonable standards made known by the
employer to the employee at the time of the engagement. Thus, the services
of an employee who has been engaged on probationary basis may be
terminated for any of the following: (1) a just or (2) an authorized cause;
and (3) when he fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer.

Same; Same; Same; The Labor Code mandates the employer to furnish
the worker whose employment is sought to be terminated, a written
notice containing a statement of the causes of termination and shall
afford the latter ample opportunity to be heard and to defend himself
with the assistance of a representative if he so desires.—Article 277(b)
of the Labor Code mandates that subject to the constitutional right of
workers to security of tenure and their right to be protected against
dismissal, except for just and authorized cause and without prejudice to
the requirement of notice under Article 283 of the same Code, the employer
shall furnish the worker, whose employment is sought to be terminated, a
written notice containing a statement of the causes of termination, and
shall afford the latter ample opportunity to be heard and to defend himself
with the assistance of a representative if he so desires, in accordance with
company rules and regulations pursuant to the guidelines set by the
Department of Labor and Employment.

Same; Same; Same; The due process requirements under the Labor
Code are mandatory and may not be supplanted by police
investigation or court proceedings; Criminal aspect of the case is
considered independent of the administrative aspect.—As correctly
pointed out by the NLRC, the due process requirements under the Labor
Code are mandatory and may not be supplanted by police investigation or
court proceedings. The criminal aspect of the case is considered
independent of the administrative aspect. Thus, employers should not rely
solely on the findings of the Prosecutor’s Office. They are mandated to
conduct their own sep,arate investigation, and to accord the employee
every opportunity to defend himself. Furthermore, respondent was not
represented by counsel when she was strip-searched inside the company
premises or during the police investigation, and in the preliminary
investigation before the Prosecutor’s Office.

Same; Constructive Dismissals; Relief granted to an illegally or

constructively dismissed employee; these two reliefs are separate and
distinct from each other and are awarded conjunctively.—As an
illegally or constructively dismissed employee, respondent is entitled to:
(1) either reinstatement, if viable, or separation pay, if reinstatement is no
longer viable; and (2) backwages. These two reliefs are separate and
distinct from each other and are awarded conjunctively.

Same; Same; The backwages that should be awarded to respondent

shall be reckoned from the time of her constructive dismissal until
the date of the termination of her employment; The computation
should not cover the entire period from the time her compensation
was withheld up to the time of her actual reinstatement.—The
backwages that should be awarded to respondent shall be reckoned from
the time of her constructive dismissal until the date of the termination of
her employment, i.e., from October 30, 1997 to March 14, 1998. The
computation should not cover the entire period from the time her
compensation was withheld up to the time of her actual reinstatement.
This is because respondent was a probationary employee, and the lapse of
her probationary employment without her appointment as a regular
 employee of petitioner Supermarket effectively severed the employer-
employee relationship between the parties.

Same; Types of Employment; In all cases involving employees

engaged on probationary basis, the employer shall make known to its
employees the standards under which they will qualify as regular
employees at the time of their engagement; Where no standards are
made known to an employee at the time, he shall be deemed a regular
employee, unless the job is self-descriptive, like maid, cook, driver,
or messenger.—In all cases involving employees engaged on probationary
basis, the employer shall make known to its employees the standards
under which they will qualify as regular employees at the time of their
engagement. Where no standards are made known to an employee at the
time, he shall be deemed a regular employee, unless the job is self-
descriptive, like maid, cook, driver, or messenger. However, the
constitutional policy of providing full protection to labor is not intended to
oppress or destroy management.

D. G.R. No. 186169

August 1, 2012
MYLENE CARVAJAL, vs. LUZON DEVELOPMENT BANK AND/OR
OSCAR Z. RAMIREZ

Civil Procedure; Appeals; Petition for Review on Certiorari; Only questions

of law can be raised in a petition for review on certiorari under Rule 45 of
the Rules of Court, the rule admits of certain exceptions.—When the NLRC
decision was reversed by the Court of Appeals, from which the issue was elevated
to us, we had a situation where “the findings of facts are conflicting.” Thus, we
find applicable the rule that while generally, only questions of law can be raised
in a petition for review on certiorari under Rule 45 of the Rules of Court, the rule
admits of certain exceptions, namely: (1) when the findings are grounded entirely
on speculations, surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of
discretion; (4) when the judgment is based on misappreciation of facts; (5) when
the findings of fact are conflicting; (6) when in making its findings, the same are
contrary to the admissions of both appellant and appellee; (7) when the findings
are contrary to those of the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts
set forth in the petition as well as in the petitioner’s main and reply briefs are
not disputed by the respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the evidence on record.

Same; Same; Same; The Supreme Court has the authority to review matters
not specifically raised or assigned as error by the parties.—Truly, it is
axiomatic that an appeal, once accepted by this Court, throws the entire case
open to review, and that this Court has the authority to review matters not
specifically raised or assigned as error by the parties, if their consideration is
necessary in arriving at a just resolution of the case.

Labor Law; Probationary Employees; A probationary employee, like a

regular employee, enjoys security of tenure. However, in cases of
probationary employment, aside from just or authorized causes of
termination, an additional ground is provided under Article 281 of the
Labor Code, i.e., the probationary employee may also be terminated for
failure to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of the
engagement.—A probationary employee, like a regular employee, enjoys security
of tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under Article
281 of the Labor Code, i.e., the probationary employee may also be terminated
for failure to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of the
engagement. Thus, the services of an employee who has been engaged on
probationary basis may be terminated for any of the following: (1) a just or (2) an
authorized cause and (3) when he fails to qualify as a regular employee in
accordance with reasonable standards prescribed by the employer.

Same; Punctuality; Habitual Tardiness; Punctuality; Punctuality is a

reasonable standard imposed on every employee, whether in government
or private sector. As a matter of fact, habitual tardiness is a serious offense
that may very well constitute gross or habitual neglect of duty, a just cause
to dismiss a regular employee.—Punctuality is a reasonable standard imposed
on every employee, whether in government or private sector. As a matter of fact,
habitual tardiness is a serious offense that may very well constitute gross or
habitual neglect of duty, a just cause to dismiss a regular employee. Assuming
that petitioner was not apprised of the standards concomitant to her job, it is
but common sense that she must abide by the work hours imposed by the bank.
As we have aptly stated in Aberdeen Court, Inc. v. Agustin, Jr., 456 SCRA 32
(2005), the rule on reasonable standards made known to the employee prior to
engagement should not be used to exculpate a probationary employee who acts
in a manner contrary to basic knowledge and common sense, in regard to which
there is no need to spell out a policy or standard to be met.

Same; Probationary Employees; Before an employer hires an employee, the

former can require the employee, upon his engagement, to undergo a trial
period during which the employer determines his fitness to qualify for
regular employment based on reasonable standards made known to him at
the time of engagement.—More importantly, satisfactory performance is and
should be one of the basic standards for regularization. Naturally, before an
employer hires an employee, the former can require the employee, upon his
engagement, to undergo a trial period during which the employer determines his
fitness to qualify for regular employment based on reasonable standards made
known to him at the time of engagement. This is the concept of probationary
employment which is intended to afford the employer an opportunity to observe
the fitness of a probationary employee while at work, and to ascertain whether
he will become an efficient and productive employee. While the employer
observes the fitness, propriety and efficiency of a probationer to ascertain
whether he is qualified for permanent employment, the probationer, on the other
hand, seeks to prove to the satisfaction of the employer that he has the
qualifications to meet the reasonable standards for permanent employment.

Same; Same; By the very nature of a probationary employment, the

employee knows from the very start that he will be under close observation
and his performance of his assigned duties and functions would be under
continuous scrutiny by his superiors.—As elucidated by this Court
in Philippine Daily Inquirer, Inc. v. Magtibay, Jr., 528 Unlike under the first
ground for the valid termination of probationary employment which is for just
cause, the second ground [failure to qualify in accordance with the standards
prescribed by employer] does not require notice and hearing. Due process of law
for this second ground consists of making the reasonable standards expected of
the employee during his probationary period known to him at the time of his
probationary employment. By the very nature of a probationary employment, the
employee knows from the very start that he will be under close observation and
his performance of his assigned duties and functions would be under continuous
scrutiny by his superiors. It is in apprising him of the standards against which
his performance shall be continuously assessed where due process regarding the
second ground lies, and not in notice and hearing as in the case of the first
ground.

Same; Same; Termination of Employment; If the termination is for cause, it

may be done anytime during the probation; the employer does not have to
wait until the probation period is over.—In sum, petitioner was validly
dismissed from probationary employment before the expiration of her 6-month
probationary employment contract. If the termination is for cause, it may be done
anytime during the probation; the employer does not have to wait until the
probation period is over. With a valid reason for petitioner’s dismissal coupled
with the proper observance of due process, the claim for backwages must
necessarily fail.

Computation of Separation Pay in Lieu of Reisntatement

A. G.R. No. 185829

April 25, 2012
ARMANDO ALILING, vs. JOSE B. FELICIANO, MANUEL F. SAN MATEO
III, JOSEPH R. LARIOSA, and WIDE WIDE WORLD EXPRESS
CORPORATION.

Remedial Law; Civil Procedure; Appeals; An appeal, once accepted by

the Supreme Court, throws the entire case open to review, and that
this Court has the authority to review matters not specifically raised
or assigned as error by the parties.—We said as much in Sociedad
Europea de Financiacion, SA v. Court of Appeals, 193 SCRA 105 (1991),
“It is axiomatic that an appeal, once accepted by this Court, throws the
entire case open to review, and that this Court has the authority to review
matters not specifically raised or assigned as error by the parties, if their
consideration is necessary in arriving at a just resolution of the case.”

Same; Same; Same; Labor Law; Findings of the Labor Arbiter, when
affirmed by the National Labor Relations Commission (NLRC) and the
Court of Appeals, are binding on the Supreme Court, unless patently
erroneous.—Settled is the rule that the findings of the Labor Arbiter, when
affirmed by the NLRC and the Court of Appeals, are binding on the
Supreme Court, unless patently erroneous. It is not the function of the
Supreme Court to analyze or weigh all over again the evidence already
considered in the proceedings below. The jurisdiction of this Court in a
petition for review on certiorari is limited to reviewing only errors of law,
not of fact, unless the factual findings being assailed are not supported by
evidence on record or the impugned judgment is based on a
misapprehension of facts. The more recent Peñafrancia Tours and Travel
Transport, Inc., v. Sarmiento, 634 SCRA 279 (2010), has reaffirmed the
above ruling, to wit: Finally, the CA affirmed the ruling of the NLRC and
adopted as its own the latter’s factual findings. Long-established is the
doctrine that findings of fact of quasi-judicial bodies x x x are accorded
respect, even finality, if supported by substantial evidence. When passed
upon and upheld by the CA, they are binding and conclusive upon this
Court and will not normally be disturbed. Though this doctrine is not
without exceptions, the Court finds that none are applicable to the present
case.

Labor Law; Termination of Employment; Gross Inefficiency; “Gross

inefficiency” falls within the purview of “other causes analogous to
the foregoing,” this constitutes, therefore, just cause to terminate an
employee under Article 282 of the Labor Code.—Article 282 of the Labor
Code considers any of the following acts or omission on the part of the
employee as just cause or ground for terminating employment: (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. (Emphasis supplied) In Lim v. National Labor
Relations Commission, 259 SCRA 485 (1996), the Court considered
inefficiency as an analogous just cause for termination of employment
under Article 282 of the Labor Code: We cannot but agree with PEPSI that
“gross inefficiency” falls within the purview of “other causes analogous to
the foregoing,” this constitutes, therefore, just cause to terminate an
employee under Article 282 of the Labor Code. One is analogous to another
if it is susceptible of comparison with the latter either in general or in some
specific detail; or has a close relationship with the latter. “Gross
inefficiency” is closely related to “gross neglect,” for both involve specific
acts of omission on the part of the employee resulting in damage to the
employer or to his business. In Buiser vs. Leogardo, this Court ruled that
failure to observed prescribed standards to inefficiency may constitute just
cause for dismissal.

Same; Same; Same; An employee’s failure to meet sales or work quotas

falls under the concept of gross inefficiency, which in turn is
analogous to gross neglect of duty that is a just cause for dismissal
under Article 282 of the Code.—In fine, an employee’s failure to meet
sales or work quotas falls under the concept of gross inefficiency, which in
turn is analogous to gross neglect of duty that is a just cause for dismissal
under Article 282 of the Code. However, in order for the quota imposed to
be considered a valid productivity standard and thereby validate a
dismissal, management’s prerogative of fixing the quota must be exercised
in good faith for the advancement of its interest. The duty to prove good
faith, however, rests with WWWEC as part of its burden to show that the
dismissal was for a just cause. WWWEC must show that such quota was
imposed in good faith.

Same; Termination of Employment; Probationary Employees; While

probationary employees do not enjoy permanent status, they enjoy
the constitutional protection of security of tenure—they can only be
terminated for cause or when they otherwise fail to meet the
reasonable standards made known to them by the employer at the
time of their engagement.—Employees must be reminded that while
probationary employees do not enjoy permanent status, they enjoy the
constitutional protection of security of tenure. They can only be terminated
for cause or when they otherwise fail to meet the reasonable standards
made known to them by the employer at the time of their engagement.
Respondent WWWEC miserably failed to prove the termination of
petitioner was for a just cause nor was there substantial evidence to
demonstrate the standards were made known to the latter at the time of
his engagement. Hence, petitioner’s right to security of tenure was
breached.

Same; Same; To effect a legal dismissal, the employer must show not
only a valid ground therefor, but also that procedural due process has
properly been observed.—To effect a legal dismissal, the employer must
show not only a valid ground therefor, but also that procedural due
process has properly been observed. When the Labor Code speaks of
procedural due process, the reference is usually to the two (2)-written
notice rule envisaged in Section 2 (III), Rule XXIII, Book V of the Omnibus
Rules Implementing the Labor Code, which provides: Section 2. Standard
of due process: requirements of notice.—In all cases of termination of
employment, the following standards of due process shall be substantially
observed. I. For termination of employment based on just causes as
defined in Article 282 of the Code: (a) A written notice served on the
employee specifying the ground or grounds for termination, and giving to
said employee reasonable opportunity within which to explain his side; (b)
A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence
presented against him; and (c) A written notice [of] termination served on
the employee indicating that upon due consideration of all the
circumstance, grounds have been established to justify his termination. In
case of termination, the foregoing notices shall be served on the employee’s
last known address.

Same; Same; Separation Pay; Backwages; The computation of

separation pay in lieu of reinstatement includes the period for which
backwages were awarded.—As the CA correctly observed, “To reinstate
petitioner [Aliling] would only create an atmosphere of antagonism and
distrust, more so that he had only a short stint with respondent company.”
The Court need not belabor the fact that the patent animosity that had
developed between employer and employee generated what may be
considered as the arbitrary dismissal of the petitioner. Following the
pronouncements of this Court Sagales v. Rustan’s Commercial
Corporation, 572 SCRA 89 (2008), the computation of separation pay in
lieu of reinstatement includes the period for which backwages were
awarded: Thus, in lieu of reinstatement, it is but proper to award petitioner
separation pay computed at one-month salary for every year of service, a
fraction of at least six (6) months considered as one whole year. In the
computation of separation pay, the period where backwages are awarded
must be included. Thus, Aliling is entitled to both backwages and
separation pay (in lieu of reinstatement) in the amount of one (1) month’s
salary for every year of service, that is, from June 11, 2004 (date of
employment contract) until the finality of this decision with a fraction of a
year of at least six (6) months to be considered as one (1) whole year. As
determined by the labor arbiter, the basis for the computation of
backwages and separation pay will be Aliling’s monthly salary at PhP
17,300.
Same; Same; Solidary Liability; In labor cases, the Court has held
corporate directors and officers solidarily liable with the corporation
for the termination of employment of employees done with malice or
in bad faith.—A corporation being a juridical entity, may act only through
its directors, officers and employees. Obligations incurred by them, acting
as such corporate agents are not theirs but the direct accountabilities of
the corporation they represent. True solidary liabilities may at times be
incurred but only when exceptional circumstances warrant such as,
generally, in the following cases: 1. When directors and trustees or, in
appropriate cases, the officers of a corporation: (a) vote for or assent to
patently unlawful acts of the corporation; (b) act in bad faith or with gross
negligence in directing the corporate affairs; x x x x In labor cases, for
instance, the Court has held corporate directors and officers solidarily
liable with the corporation for the termination of employment of employees
done with malice or in bad faith.

Exception to the Rule on Regular Employment

A. G.R. No. 167714

March 7, 2007
ROWELL INDUSTRIAL CORPORATION, petitioner, vs. HON. COURT
OF APPEALS and JOEL TARIPE

Labor Law; Employer-Employee Relationship; Article 280 of the

Labor Code, as amended, classifies employees into three
categories, namely, (1) regular employees, (2) project employees,
and (3) casual employees; Regular employees are classified into (a)
regular employees by nature of work, and, (b) regular employees by
years of service.—Article 280 of the Labor Code, as amended, classifies
employees into three categories, namely: (1) regular employees or those
whose work is necessary or desirable to the usual business of the
employer; (2) project employees or those 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 services to be
performed is seasonal in nature and the employment is for the duration
of the season; and (3) casual employees or those who are neither regular
nor project employees. Regular employees are further classified into: (1)
regular employees by nature of work; and (2) regular employees by
years of service. The former refers to those employees who perform a
particular activity which is necessary or desirable in the usual business
or trade of the employer, regardless of their length of service; while the
latter refers to those employees who have been performing the job,
regardless of the nature thereof, for at least a year.

Same; Same; Fixed-Term Employment; Article 280 of the Labor

Code does not proscribe or prohibit an employment contract with
a fixed period.—Article 280 of the Labor Code, as amended, however,
does not proscribe or prohibit an employment contract with a fixed
period. It does not necessarily follow that where the duties of the
employee consist of activities usually necessary or desirable in the
usual business of the employer, the parties are forbidden from agreeing
on a period of time for the performance of such activities. There is
nothing essentially contradictory between a definite period of
employment and the nature of the employee’s duties. What Article 280
of the Labor Code, as amended, seeks to prevent is the practice of some
unscrupulous and covetous employers who wish to circumvent the law
that protects lowly workers from capricious dismissal from their
employment. The aforesaid provision, however, should not be
interpreted in such a way as to deprive employers of the right and
prerogative to choose their own workers if they have sufficient basis to
refuse an employee a regular status. Management has rights which
should also be protected.

Same; Same; Same; Guidelines.—Although Article 280 of the Labor

Code, as amended, does not forbid fixed term employment, it
must, nevertheless, meet any of the following guidelines in order
that it cannot be said to circumvent security of tenure: (1) that the
fixed period of employment was knowingly and voluntarily agreed
upon by the parties, without any force, duress or improper
pressure being brought to bear upon the employee and absent any
other circumstances vitiating his consent; or (2) it satisfactorily
appears that the employer and employee dealt with each other on
more or less equal terms with no moral dominance whatever being
exercised by the former on the latter.
Same; Same; Same; Contracts of Adhesion; Words and Phrases; A
contract in which the terms prepared by only one party and the
other party merely affixes his signature signifying his adhesion
thereto is called contract of adhesion, an agreement in which the
parties bargaining are not on equal footing, the weaker party’s
participation being reduced to the alternative “to take it or leave
it.”—Petitioner RIC failed to controvert the claim of respondent Taripe
that he was made to sign the contract of employment, prepared by
petitioner RIC, as a condition for his hiring. Such contract in which the
terms are prepared by only one party and the other party merely affixes
his signature signifying his adhesion thereto is called contract of
adhesion. It is an agreement in which the parties bargaining are not on
equal footing, the weaker party’s participation being reduced to the
alternative “to take it or leave it.” In the present case, respondent
Taripe, in need of a job, was compelled to agree to the contract,
including the five-month period of employment, just so he could be
hired. Hence, it cannot be argued that respondent Taripe signed the
employment contract with a fixed term of five months willingly and with
full knowledge of the impact thereof.

Same; Same; Regular Employees; The primary standard of

determining regular employment is the reasonable connection
between the particular activity performed by the employee in
relation to the casual business or trade of the employer.—Settled is
the rule that the primary standard of determining regular employment
is the reasonable connection between the particular activity performed
by the employee in relation to the casual business or trade of the
employer. The connection can be determined by considering the nature
of the work performed and its relation to the scheme of the particular
business or trade in its entirety.

Same; Same; Same; Regular employees enjoy security of tenure and

they can only be dismissed for just cause and with due process,
notice and hearing.—Well-established is the rule that regular
employees enjoy security of tenure and they can only be dismissed for
just cause and with due process, notice and hearing. And in case of
employees’ dismissal, the burden is on the employer to prove that the
dismissal was legal. Thus, respondent Taripe’s summary dismissal, not
being based on any of the just or authorized causes enumerated under
Articles 282, 283, and 284 of the Labor Code, as amended, is illegal.
XI Pages 811 to 868

Termination by Employer

Theft by co-Employee’s Property

A. G.R. No. 193676

June 20, 2012
COSMOS BOTTLING CORP., vs. WILSON FERMIN

G.R. No. 194303

June 20, 2012
WILSON B. FERMIN, vs. COSMOS BOTTLING CORPORATION
and CECILIA BAUTISTA

Labor Law; Termination of Employment; Serious

Misconduct; Theft committed against a co-employee is
considered as a case analogous to serious misconduct, for
which the penalty of dismissal from service may be meted
out to the erring employee.—Theft committed against a co-
employee is considered as a case analogous to serious
misconduct, for which the penalty of dismissal from service may
be meted out to the erring employee, viz.: Article 282 of the Labor
Code provides: Article 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 his
representatives in connection with his work; x x x x x x x x x
(e) Other causes analogous to the foregoing. Misconduct involves
“the transgression of some established and definite rule of action,
forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment.” For
misconduct to be serious and therefore a valid ground for
dismissal, it must be: 1. of grave and aggravated character and
not merely trivial or unimportant and 2. connected with the work
of the employee. In this case, petitioner dismissed respondent
based on the NBI’s finding that the latter stole and used Yuseco’s
credit cards. But since the theft was not committed against
petitioner itself but against one of its employees, respondent’s
 misconduct was not work-related and therefore, she could not be
dismissed for serious misconduct. Nonetheless, Article 282(e) of
the Labor Code talks of other analogous causes or those which
are susceptible of comparison to another in general or in specific
detail. For an employee to be validly dismissed for a cause
analogous to those enumerated in Article 282, the cause must
involve a voluntary and/or willful act or omission of the
employee. A cause analogous to serious misconduct is a
voluntary and/or willful act or omission attesting to an
employee’s moral depravity. Theft committed by an employee
against a person other than his employer, if proven by
substantial evidence, is a cause analogous to serious
misconduct.

Sexual Intercourse as Serious Misconduct

A. G.R. No. 194884

October 22, 2014
IMASEN PHILIPPINE MANUFACTURING CORPORATION, vs.
RAMONCHITO T. ALCON and JOANN S. PAPA

Labor Law; Security of Tenure; The law and jurisprudence

guarantee to every employee security of tenure.—The law and
jurisprudence guarantee to every employee security of tenure.
This textual and the ensuing jurisprudential commitment to the
cause and welfare of the working class proceed from the social
justice principles of the Constitution that the Court zealously
implements out of its concern for those with less in life. Thus, the
Court will not hesitate to strike down as invalid any employer act
that attempts to undermine workers’ tenurial security. All these
the State undertakes under Article 279 (now Article 293) of the
Labor Code which bar an employer from terminating the services
of an employee, except for just or authorized cause and upon
observance of due process.

Same; In protecting the rights of the workers, the law,

however, does not authorize the oppression or self-
destruction of the employer.—In protecting the rights of the
workers, the law, however, does not authorize the oppression or
self-destruction of the employer. The constitutional commitment
to the policy of social justice cannot be understood to mean that
every labor dispute shall automatically be decided in favor of
labor. The constitutional and legal protection equally recognize
the employer’s right and prerogative to manage its operation
according to reasonable standards and norms of fair play.
Accordingly, except as limited by special law, an employer is free
to regulate, according to his own judgment and discretion, all
aspects of employment, including hiring, work assignments,
working methods, time, place and manner of work, tools to be
used, processes to be followed, supervision of workers, working
regulations, transfer of employees, worker supervision, layoff of
workers and the discipline, dismissal and recall of workers. As a
general proposition, an employer has free reign over every aspect
of its business, including the dismissal of his employees as long
as the exercise of its management prerogative is done reasonably,
in good faith, and in a manner not otherwise intended to defeat
or circumvent the rights of workers.

Same; Termination of Employment; Serious Misconduct; To

constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employee’s
misconduct must be serious, i.e., of such grave and
aggravated character and not merely trivial or
unimportant.—The just causes for dismissing an employee are
provided under Article 282 (now Article 296) of the Labor Code.
Under Article 282(a), serious misconduct by the employee
justifies the employer in terminating his or her employment.
Misconduct is defined as an improper or wrong conduct. It is a
transgression of some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. To
constitute a valid cause for the dismissal within the text and
meaning of Article 282 of the Labor Code, the employee’s
misconduct must be serious, i.e., of such grave and aggravated
character and not merely trivial or unimportant. Additionally, the
misconduct must be related to the performance of the employee’s
duties showing him to be unfit to continue working for the
employer. Further, and equally important and required, the act
or conduct must have been performed with wrongful intent.

Same; Same; Same; Sexual Intercourse in the Work Premises;

Dismissal situations (on the ground of serious misconduct)
involving sexual acts, particularly sexual intercourse
committed by employees inside company premises and
during work hours, are not usual violations and are not found
in abundance under jurisprudence.—Dis-missal situations (on
the ground of serious misconduct) involving sexual acts,
particularly sexual intercourse committed by employees inside
company premises and during work hours, are not usual
violations and are not found in abundance under jurisprudence.
Thus, in resolving the present petition, we are largely guided by
the principles we discussed above, as applied to the totality of the
circumstances that surrounded the petitioners’ dismissal. In
other words, we view the petitioners’ act from the prism of the
elements that must concur for an act to constitute serious
misconduct, analyzed and understood within the context of the
overall circumstances of the case. In taking this approach, we are
guided, too, by the jurisdictional limitations that a Rule 45 review
of the CA’s Rule 65 decision in labor cases imposes on our
discretion.

Same; Same; Same; Same; Whether aroused by lust or

inflamed by sincere affection, sexual acts should be carried
out at such place, time and circumstance that, by the
generally accepted norms of conduct, will not offend public
decency nor disturb the generally held or accepted social
morals.—Sexual acts and intimacies between two consenting
adults belong, as a principled ideal, to the realm of purely private
relations. Whether aroused by lust or inflamed by sincere
affection, sexual acts should be carried out at such place, time
and circumstance that, by the generally accepted norms of
conduct, will not offend public decency nor disturb the generally
held or accepted social morals. Under these parameters, sexual
acts between two consenting adults do not have a place in the
work environment. Indisputably, the respondents engaged in
sexual intercourse inside company premises and during work
hours. These circumstances, by themselves, are already
punishable misconduct. Added to these considerations, however,
is the implication that the respondents did not only disregard
company rules but flaunted their disregard in a manner that
could reflect adversely on the status of ethics and morality in the
company.
Pregnancy Out of wedlock as Serious Misconduct

A. G.R. No. 187226

January 28, 2015
CHERYLL SANTOS LEUS, vs. ST. SCHOLASTICA’S COLLEGE
WESTGROVE and/or SR. EDNA QUIAMBAO, OSB,

Remedial Law; Civil Procedure; Appeals; Points of law, theories,

issues, and arguments not brought to the attention of the trial
court ought not to be considered by a reviewing court, as these
cannot be raised for the first time on appeal.—“It is well-
established that issues raised for the first time on appeal and not
raised in the proceedings in the lower court are barred by estoppel.
Points of law, theories, issues, and arguments not brought to the
attention of the trial court ought not to be considered by a reviewing
court, as these cannot be raised for the first time on appeal. To
consider the alleged facts and arguments belatedly raised would
amount to trampling on the basic principles of fair play, justice, and
due process.”

Department of Education; Schools; Section 57 specifically

empowers the Department of Education (DepEd) to promulgate
rules and regulations necessary for the administration,
supervision and regulation of the educational system in
accordance with the declared policy of Batas Pambansa (BP)
Bilang 232.—The 1992 MRPS, the regulation in force at the time of
the instant controversy, was issued by the Secretary of Education
pursuant to BP 232. Section 70 of BP 232 vests the Secretary of
Education with the authority to issue rules and regulations to
implement the provisions of BP 232. Concomitantly, Section 57
specifically empowers the Department of Education to promulgate
rules and regulations necessary for the administration, supervision
and regulation of the educational system in accordance with the
declared policy of BP 232. The qualifications of teaching and
nonteaching personnel of private schools, as well as the causes for
the termination of their employment, are an integral aspect of the
educational system of private schools. Indubitably, ensuring that
the teaching and nonteaching personnel of private schools are not
only qualified, but competent and efficient as well goes hand in hand
with the declared objective of BP 232 — establishing and
maintaining relevant quality education. It is thus within the
authority of the Secretary of Education to issue a rule, which
provides for the dismissal of teaching and nonteaching personnel of
private schools based on their incompetence, inefficiency, or some
other disqualification.

Remedial Law; Civil Procedure; Appeals; In a petition for review

under Rule 45 of the Rules of Court, such as the instant
petition, where the Court of Appeals’ (CA’s) disposition in a
labor case is sought to be calibrated, the Court’s review is quite
limited.—In a petition for review under Rule 45 of the Rules of
Court, such as the instant petition, where the CA’s disposition in a
labor case is sought to be calibrated, the Court’s review is quite
limited. In ruling for legal correctness, the Court has to view the CA
decision in the same context that the petition for certiorari it ruled
upon was presented to it; the Court has to examine the CA decision
from the prism of whether it correctly determined the presence or
absence of grave abuse of discretion in the NLRC decision before it,
not on the basis of whether the NLRC decision on the merits of the
case was correct.

Labor Law; Termination of Employment; Disgraceful and

Immoral Conduct; The fact of the petitioner’s pregnancy out of
wedlock, without more, is not enough to characterize the
petitioner’s conduct as disgraceful or immoral.—The labor
tribunals concluded that the petitioner’s pregnancy out of wedlock,
per se, is “disgraceful and immoral” considering that she is employed
in a Catholic educational institution. In arriving at such conclusion,
the labor tribunals merely assessed the fact of the petitioner’s
pregnancy vis-à-vis the totality of the circumstances surrounding
the same. However, the Court finds no substantial evidence to
support the aforementioned conclusion arrived at by the labor
tribunals. The fact of the petitioner’s pregnancy out of wedlock,
without more, is not enough to characterize the petitioner’s conduct
as disgraceful or immoral. There must be substantial evidence to
establish that premarital sexual relations and, consequently,
pregnancy out of wedlock, are indeed considered disgraceful or
immoral.
Same; Same; Same; The determination of whether a conduct is
disgraceful or immoral involves a two (2)-step process: first, a
consideration of the totality of the circumstances surrounding
the conduct; and second, an assessment of the said
circumstances vis-à-vis the prevailing norms of conduct, i.e.,
what the society generally considers moral and respectable.—
The determination of whether a conduct is disgraceful or immoral
involves a two-step process: first, a consideration of the totality of
the circumstances surrounding the conduct; and second, an
assessment of the said circumstances vis-à-vis the prevailing norms
of conduct, i.e., what the society generally considers moral and
respectable. That the petitioner was employed by a Catholic
educational institution per se does not absolutely determine
whether her pregnancy out of wedlock is disgraceful or immoral.
There is still a necessity to determine whether the petitioner’s
pregnancy out of wedlock is considered disgraceful or immoral in
accordance with the prevailing norms of conduct.

Same; Same; Same; That the distinction between public and

secular morality and religious morality is important because the
jurisdiction of the Court extends only to public and secular
morality.—In Estrada v. Escritor, 408 SCRA 1 (2003), an
administrative case against a court interpreter charged with
disgraceful and immoral conduct, the Court stressed that in
determining whether a particular conduct can be considered as
disgraceful and immoral, the distinction between public and secular
morality on the one hand, and religious morality, on the other,
should be kept in mind. That the distinction between public and
secular morality and religious morality is important because the
jurisdiction of the Court extends only to public and secular morality.
The Court further explained that: The morality referred to in the law
is public and necessarily secular, not religious x x x. “Religious
teachings as expressed in public debate may influence the civil
public order but public moral disputes may be resolved only on
grounds articulable in secular terms.” Otherwise, if government
relies upon religious beliefs in formulating public policies and
morals, the resulting policies and morals would require conformity
to what some might regard as religious programs or agenda. The
nonbelievers would therefore be compelled to conform to a standard
of conduct buttressed by a religious belief, i.e., to a “compelled
religion,” anathema to religious freedom. Likewise, if government
based its actions upon religious beliefs, it would tacitly approve or
endorse that belief and thereby also tacitly disapprove contrary
religious or nonreligious views that would not support the policy. As
a result, government will not provide full religious freedom for all its
citizens, or even make it appear that those whose beliefs are
disapproved are second-class citizens. Expansive religious freedom
therefore requires that government be neutral in matters of religion;
governmental reliance upon religious justification is inconsistent
with this policy of neutrality. In other words, government action,
including its proscription of immorality as expressed in criminal law
like concubinage, must have a secular purpose. That is, the
government proscribes this conduct because it is “detrimental (or
dangerous) to those conditions upon which depend the existence
and progress of human society” and not because the conduct is
proscribed by the beliefs of one religion or the other. Although
admittedly, moral judgments based on religion might have a
compelling influence on those engaged in public deliberations over
what actions would be considered a moral disapprobation
punishable by law. After all, they might also be adherents of a
religion and thus have religious opinions and moral codes with a
compelling influence on them; the human mind endeavors to
regulate the temporal and spiritual institutions of society in a
uniform manner, harmonizing earth with heaven. Succinctly put, a
law could be religious or Kantian or Aquinian or utilitarian in its
deepest roots, but it must have an articulable and discernible
secular purpose and justification to pass scrutiny of the religion
clauses.

Same; Same; Same; The proscription against “disgraceful or

immoral conduct” under Section 94(e) of the 1992 Manual of
Regulations for Private Schools (MRPS), which is made as a
cause for dismissal, must necessarily refer to public and secular
morality.—It bears stressing that the right of an employee to
security of tenure is protected by the Constitution. Perfunctorily, a
regular employee may not be dismissed unless for cause provided
under the Labor Code and other relevant laws, in this case, the 1992
MRPS. As stated above, when the law refers to morality, it
necessarily pertains to public and secular morality and not religious
morality. Thus, the proscription against “disgraceful or immoral
conduct” under Section 94(e) of the 1992 MRPS, which is made as a
cause for dismissal, must necessarily refer to public and secular
morality. Accordingly, in order for a conduct to be considered as
disgraceful or immoral, it must be “‘detrimental (or dangerous) to
those conditions upon which depend the existence and progress of
human society’ and not because the conduct is proscribed by the
beliefs of one religion or the other.”

Same; Same; Same; Premarital sexual relations between two

consenting adults who have no impediment to marry each
other, and consequently, conceiving a child out of wedlock,
gauged from a purely public and secular view of morality, does
not amount to a disgraceful or immoral conduct under Section
94(e) of the 1992 Manual of Regulations for Private Schools
(MRPS).—Admittedly, the petitioner is employed in an educational
institution where the teachings and doctrines of the Catholic
Church, including that on premarital sexual relations, is strictly
upheld and taught to the students. That her indiscretion, which
resulted in her pregnancy out of wedlock, is anathema to the
doctrines of the Catholic Church. However, viewed against the
prevailing norms of conduct, the petitioner’s conduct cannot be
considered as disgraceful or immoral; such conduct is not
denounced by public and secular morality. It may be an unusual
arrangement, but it certainly is not disgraceful or immoral within
the contemplation of the law. To stress, premarital sexual relations
between two consenting adults who have no impediment to marry
each other, and, consequently, conceiving a child out of wedlock,
gauged from a purely public and secular view of morality, does not
amount to a disgraceful or immoral conduct under Section 94(e) of
the 1992 MRPS.

Same; Same; Burden of Proof; Settled is the rule that in

termination cases, the burden of proving that the dismissal of
the employees was for a valid and authorized cause rests on the
employer.—Settled is the rule that in termination cases, the burden
of proving that the dismissal of the employees was for a valid and
authorized cause rests on the employer. It is incumbent upon the
employer to show by substantial evidence that the termination of
the employment of the employees was validly made and failure to
discharge that duty would mean that the dismissal is not justified
and therefore illegal. “Substantial evidence is more than a mere
scintilla of evidence. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion,
even if other minds equally reasonable might conceivably opine
otherwise.”

Same; Same; Security of Tenure; Words and Phrases; Security

of tenure is a right which may not be denied on mere
speculation of any unclear and nebulous basis.—Indubitably,
bare allegations do not amount to substantial evidence. Considering
that the respondents failed to adduce substantial evidence to prove
their asserted cause for the petitioner’s dismissal, the labor
tribunals should not have upheld their allegations hook, line and
sinker. The labor tribunals’ respective findings, which were arrived
at sans any substantial evidence, amounts to a grave abuse of
discretion, which the CA should have rectified. “Security of tenure
is a right which may not be denied on mere speculation of any
unclear and nebulous basis.”

Same; Management Prerogative; The exercise of management

prerogative is not absolute as it must be exercised in good faith
and with due regard to the rights of labor.—The Court has held
that “management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work
assignments, working methods, time, place and manner of work,
processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, layoff of
workers and discipline, dismissal and recall of workers. The exercise
of management prerogative, however, is not absolute as it must be
exercised in good faith and with due regard to the rights of labor.”
Management cannot exercise its prerogative in a cruel, repressive,
or despotic manner.

Same; Illegal Dismissals; Reinstatement; Separation Pay;

Strained Relations; In cases of illegal dismissal, the accepted
doctrine is that separation pay is available in lieu of
reinstatement when the latter recourse is no longer practical or
in the best interest of the parties.—Having established that the
petitioner was illegally dismissed, the Court now determines the
reliefs that she is entitled to and their extent. Under the law and
prevailing jurisprudence, “an illegally dismissed employee is entitled
to reinstatement as a matter of right.” Aside from the instances
provided under Articles 283 and 284 of the Labor Code, separation
pay is, however, granted when reinstatement is no longer feasible
because of strained relations between the employer and the
employee. In cases of illegal reinstatement when the latter recourse
is no longer practical or in the best interest of the parties.

Same; Same; Backwages; Employees who are illegally dismissed

are entitled to full backwages, inclusive of allowances and other
benefits or their monetary equivalent, computed from the time
their actual compensation was withheld from them up to the
time of their actual reinstatement but if reinstatement is no
longer possible, the backwages shall be computed from the time
of their illegal termination up to the finality of the decision.—
“Employees who are illegally dismissed are entitled to full
backwages, inclusive of allowances and other benefits or their
monetary equivalent, computed from the time their actual
compensation was withheld from them up to the time of their actual
reinstatement but if reinstatement is no longer possible, the
backwages shall be computed from the time of their illegal
termination up to the finality of the decision.” Accordingly, the
petitioner is entitled to an award of full backwages from the time she
was illegally dismissed up to the finality of this decision.

Same; Same; Moral Damages; Exemplary Damages; The

petitioner is not entitled to moral and exemplary damages; The
records of this case are bereft of any clear and convincing
evidence showing that the respondents acted in bad faith or in
a wanton or fraudulent manner in dismissing the petitioner.—
The petitioner is not entitled to moral and exemplary damages. “A
dismissed employee is entitled to moral damages when the dismissal
is attended by bad faith or fraud or constitutes an act oppressive to
labor, or is done in a manner contrary to good morals, good customs
or public policy. Exemplary damages may be awarded if the
dismissal is effected in a wanton, oppressive or malevolent manner.”
“Bad faith, under the law, does not simply connote bad judgment or
negligence. It imports a dishonest purpose or some moral obliquity
and conscious doing of a wrong, or a breach of a known duty
through some motive or interest or ill will that partakes of the nature
 of fraud.” “It must be noted that the burden of proving bad faith
rests on the one alleging it” since basic is the principle that good
faith is presumed and he who alleges bad faith has the duty to prove
the same. “Allegations of bad faith and fraud must be proved by clear
and convincing evidence.” The records of this case are bereft of any
clear and convincing evidence showing that the respondents acted
in bad faith or in a wanton or fraudulent manner in dismissing the
petitioner. That the petitioner was illegally dismissed is insufficient
to prove bad faith. A dismissal may be contrary to law but by itself
alone, it does not establish bad faith to entitle the dismissed
employee to moral damages. The award of moral and exemplary
damages cannot be justified solely upon the premise that the
employer dismissed his employee without cause.

Same; Same; Attorney’s Fees; The petitioner is entitled to

attorney’s fees in the amount of ten percent (10%) of the total
monetary award pursuant to Article 111 of the Labor Code.—
The petitioner is entitled to attorney’s fees in the amount of ten
percent (10%) of the total monetary award pursuant to Article 111
of the Labor Code. “It is settled that where an employee was forced
to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney’s fees is legally and morally
justifiable.”

Altercation Between employees

A. G.R. No. 157633

September 10, 2014
NORTHWEST AIRLINES, INC., vs. MA. CONCEPCION M. DEL
ROSARIO,

Labor Law; Termination of Employment; Serious Misconduct; Misconduct

or improper behavior, to be a just cause for termination of employment,
must: (a) be serious; (b) relate to the performance of the employee’s duties;
and (c) show that the employee has become unfit to continue working for
the employer.—Northwest argues that Del Rosario was dismissed on the
grounds of serious misconduct and willful disobedience. Misconduct refers to
the improper or wrong conduct that transgresses some established and definite
rule of action, a forbidden act, a dereliction of duty, willful in character, and
implies wrongful intent and not mere error in judgment. But misconduct or
improper behavior, to be a just cause for termination of employment, must: (a)
be serious; (b) relate to the performance of the employee’s duties; and (c) show
that the employee has become unfit to continue working for the employer.

Same; Same; Fighting in the Workplace; In People v. Asto, 277 SCRA 697
(1997), the Supreme Court (SC) characterized fight as not just a merely
verbal tussle but a physical combat between two opposing parties.—In
several rulings where the meaning of fight was decisive, the Court has observed
that the term fight was considered to be different from the term argument. In
People v. Asto, 277 SCRA 697 (1997), for instance, the Court characterized fight
as not just a merely verbal tussle but a physical combat between two opposing
parties, to wit: Well into their second bottle of gin, at about eleven o’clock that
morning, Fernando Aquino and Peregrino had a verbal tussle. Fernando Aquino
declared that he was going to run for councilor of Alcala, Pangasinan. Peregrino
countered by saying: “If you will run for that post, cousin, I will fight you.” After
a brief exchange of words, Fernando Aquino, laughing, went to sit beside Abagat.
As Aquino continued with his mirth, Abagat stared at Peregrino with contempt.
x x x. A few minutes later, he heard a commotion in the plantation some two
hundred meters away. He claims to have seen several people fighting each other
with pieces of wood but did not go to the field to check what was happening.
(Italics supplied) Similarly, in Pilares, Sr. v. People, 518 SCRA 143 (2007), fight
was held to be more than just an exchange of words that usually succeeded the
provocation by either party, thus: When the petitioner was about to hand over
the bottles of beer to the private complainant, the latter called him “coward” and
dared him to get out for a fight. Insulted, the petitioner went out of his store and
chased the private complainant. (Italics supplied) Based on the foregoing, the
incident involving Del Rosario and Gamboa could not be justly considered as
akin to the fight contemplated by Northwest. In the eyes of the NLRC, Del Rosario
and Gamboa were arguing but not fighting. The understanding of fight as one
that required physical combat was absent during the incident of May 18, 1998.
Moreover, the claim of Morales that Del Rosario challenged Gamboa to a brawl
(sabunutan) could not be given credence by virtue of its being self-serving in
favor of Northwest, and of its being an apparent afterthought on the part of
Morales during the investigation of the incident, without Del Rosario having the
opportunity to contest Morales’ statement. In that context, the investigation then
served only as Northwest’s means to establish that the grounds of a valid
dismissal based on serious misconduct really existed.
Same; Same; Same; Even assuming arguendo that the incident was the kind
of fight prohibited by Northwest’s Rules of Conduct, the same could not be
considered as of such seriousness as to warrant Del Rosario’s dismissal
from the service.—Even assuming arguendo that the incident was the kind of
fight prohibited by Northwest’s Rules of Conduct, the same could not be
considered as of such seriousness as to warrant Del Rosario’s dismissal from the
service. The gravity of the fight, which was not more than a verbal argument
between them, was not enough to tarnish or diminish Northwest’s public image.

Actual Work Detemines Position of Trust and Confidence

A. G.R. No. 192582

April 7, 2014
BLUER THAN BLUE JOINT VENTURES COMPANY/MARY ANN
DELA VEGA, vs. GLYZA ESTEBAN

Labor Law; Termination of Employment; Loss of Trust and

Confidence; Loss of trust and confidence is premised on the fact
that the employee concerned holds a position of responsibility,
trust and confidence.—Loss of trust and confidence is premised on
the fact that the employee concerned holds a position of
responsibility, trust and confidence. The employee must be invested
with confidence on delicate matters, such as the custody, handling,
care and protection of the employer’s property and funds. “[W]ith
respect to rank-and-file personnel, loss of trust and confidence as
ground for valid dismissal requires proof of involvement in the
alleged events in question, and that mere uncorroborated assertions
and accusations by the employer will not be sufficient.”

Same; Same; Same; Loss of trust and confidence to be a valid cause

for dismissal must be work related such as would show the
employee concerned to be unfit to continue working for the
employer and it must be based on a wilful breach of trust and
founded on clearly established facts.—Loss of trust and confidence
to be a valid cause for dismissal must be work related such as would
show the employee concerned to be unfit to continue working for the
employer and it must be based on a wilful breach of trust and founded
on clearly established facts. Such breach is wilful if it is done
intentionally, knowingly, and purposely, without justifiable excuse as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. The loss of trust and confidence must spring from the
voluntary or wilful act of the employee, or by reason of some
blameworthy act or omission on the part of the employee.

Same; Same; Preventive Suspension; Penalties; Words and Phrases;

Preventive suspension is a measure allowed by law and afforded to
the employer if an employee’s continued employment poses a
serious and imminent threat to the employer’s life or property or
of his co-workers.—Preventive suspension is a measure allowed by law
and afforded to the employer if an employee’s continued employment
poses a serious and imminent threat to the employer’s life or property
or of his co-workers. It may be legally imposed against an employee
whose alleged violation is the subject of an investigation. In this case,
the petitioner was acting well within its rights when it imposed a 10-
day preventive suspension on Esteban. While it may be that the acts
complained of were committed by Esteban almost a year before the
investigation was conducted, still, it should be pointed out that Esteban
was performing functions that involve handling of the petitioner’s
property and funds, and the petitioner had every right to protect its
assets and operations pending Esteban’s investigation.

Same; Non-Diminution of Benefits; Article 113 of the Labor Code

provides that no employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees,
except in cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment,
among others.—Article 113 of the Labor Code provides that no
employer, in his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except in cases where the
employer is authorized by law or regulations issued by the Secretary of
Labor and Employment, among others. The Omnibus Rules
Implementing the Labor Code, meanwhile, provides: SECTION 14.
Deduction for loss or damage.—Where the employer is engaged in a
trade, occupation or business where the practice of making deductions
or requiring deposits is recognized to answer for the reimbursement of
loss or damage to tools, materials, or equipment supplied by the
employer to the employee, the employer may make wage deductions or
require the employees to make deposits from which deductions shall be
 made, subject to the following conditions: (a) That the employee
concerned is clearly shown to be responsible for the loss or damage; (b)
That the employee is given reasonable opportunity to show cause why
deduction should not be made; (c) That the amount of such deduction
is fair and reasonable and shall not exceed the actual loss or damage;
and (d) That the deduction from the wages of the employee does not
exceed 20 percent of the employee’s wages in a week.

XII
Authorize Causes

DISMISSAL DUE TO REDUNDANCY

A. G.R. No. 181719

April 21, 2014
EUGENE S. ARABIT ET AL
vs.
JARDINE PACIFIC FINANCE, INC.

B. G.R. No. 191154

April 7, 2014
SPI TECHNOLOGIES INC.
vs.
MAPUA
Labor Law; Termination of Employment; Redundancy; Requisites
for a Valid Implementation of a Redundancy Program.—For a valid
implementation of a redundancy program, the employer must comply
with the following requisites: (1) written notice served on both the
employee and the DOLE at least one month prior to the intended date
of termination; (2) payment of separation pay equivalent to at least one
month pay or at least one month pay for every year of service, whichever
is higher; (3) good faith in abolishing the redundant position; and (4)
fair and reasonable criteria in ascertaining what positions are to be
declared redundant.

Same; Same; Same; In cases of redundancy, the management

should adduce evidence and prove that a position which was
created in place of a previous one should pertain to functions
which are dissimilar and incongruous to the abolished office.—“It
is not the job title but the actual work that the employee performs.”
Also, change in the job title is not synonymous to a change in the
functions. A position cannot be abolished by a mere change of job title.
In cases of redundancy, the management should adduce evidence and
prove that a position which was created in place of a previous one
should pertain to functions which are dissimilar and incongruous to
the abolished office.

Same; Same; Same; Illegal Dismissals; Liability of Corporate

Officers; Conditions in Order for Personal Liability of Corporate
Officers to Attach for the Corporate Acts.—On the issue of the
solidary obligation of the corporate officers impleaded vis-à-vis the
corporation for Mapua’s illegal dismissal, “[i]t is hornbook principle that
personal liability of corporate directors, trustees or officers attaches
only when: (a) they assent to a patently unlawful act of the corporation,
or when they are guilty of bad faith or gross negligence in directing its
affairs, or when there is a conflict of interest resulting in damages to
the corporation, its stockholders or other persons; (b) they consent to
the issuance of watered down stocks or when, having knowledge of
such issuance, do not forthwith file with the corporate secretary their
written objection; (c) they agree to hold themselves personally and
solidarily liable with the corporation; or (d) they are made by specific
provision of law personally answerable for their corporate action.”

Same; Same; Same; Same; Moral Damages; Exemplary Damages;

Award of moral and exemplary damages for an illegally dismissed
employee is proper where the employee had been harassed and
arbitrarily terminated by the employer.—Award of moral and
exemplary damages for an illegally dismissed employee is proper where
the employee had been harassed and arbitrarily terminated by the
employer. Moral damages may be awarded to compensate one for
diverse injuries such as mental anguish, besmirched reputation,
 wounded feelings, and social humiliation occasioned by the employer’s
unreasonable dismissal of the employee. The Court has consistently
accorded the working class a right to recover damages for unjust
dismissals tainted with bad faith; where the motive of the employer in
dismissing the employee is far from noble. The award of such damages
is based not on the Labor Code but on Article 220 of the Civil Code.
However, the Court observes that the CA decision affirming the LA’s
award of P500,000.00 and P250,000.00 as moral and exemplary
damages, respectively, is evidently excessive because the purpose for
awarding damages is not to enrich the illegally dismissed employee.
Consequently, the Court hereby reduces the amount of P50,000.00
each as moral and exemplary damages. SPI Technologies, Inc. vs.
Mapua, 720 SCRA 743, G.R. No. 191154 April 7, 2014

“FLAOTING STATUS”

A. G.R. No. 204761

April 2, 2014
EMERITUS SECURITY AND MAINTENANCE SYSTEMS, INC,
vs.
JANRIE C. DAILIG,

Labor Law; Security Guards; Floating Status; Constructive Dismissals;

The Supreme Court agrees with the ruling of the Labor Arbiter,
National Labor Relations Commission (NLRC) and Court of Appeals
(CA) that a floating status of a security guard, such as respondent, for
more than six months constitutes constructive dismissal.—The Court
agrees with the ruling of the Labor Arbiter, NLRC and Court of Appeals
that a floating status of a security guard, such as respondent, for more
than six months constitutes constructive dismissal. In Nationwide
Security and Allied Services, Inc. v. Valderama, 644 SCRA 299 (2011), the
Court held: x x x the temporary inactivity or “floating status” of security
guards should continue only for six months. Otherwise, the security
agency concerned could be liable for constructive dismissal. The failure of
petitioner to give respondent a work assignment beyond the reasonable
six-month period makes it liable for constructive dismissal.
Remedial Law; Appeals; Substantial Evidence; Factual findings of quasi-
judicial bodies like the National Labor Relations Commission (NLRC), if
supported by substantial evidence, are accorded respect and even finality
by this Court, more so when they coincide with those of the Labor
Arbiter.—The Court notes that the Labor Arbiter, NLRC, and Court of
Appeals unanimously found that respondent was illegally dismissed by
petitioner. Factual findings of quasi-judicial bodies like the NLRC, if
supported by substantial evidence, are accorded respect and even finality
by this Court, more so when they coincide with those of the Labor Arbiter.
Such factual findings are given more weight when the same are affirmed
by the Court of Appeals. The Court finds no reason to depart from the
foregoing rule.

Same; Reinstatement; Separation Pay; Reinstatement is the general

rule, while the award of separation pay is the exception. Article 279
of the Labor Code of the Philippines mandates the reinstatement of
an illegally dismissed employee, to wit: Security of Tenure.—x x x 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 back wages, 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. Thus,
reinstatement is the general rule, while the award of separation pay is the
exception. The circumstances warranting the grant of separation pay, in
lieu of reinstatement, are laid down by the Court in Globe-Mackay Cable
and Radio Corporation v. National Labor Relations Commission, 206 SCRA
701 (1992), thus: Over time, the following reasons have been advanced by
the Court for denying reinstatement under the facts of the case and the
law applicable thereto; that reinstatement can no longer be effected in view
of the long passage of time (22 years of litigation) or because of the realities
of the situation; or that it would be ‘inimical to the employer’s interest’; or
that reinstatement may no longer be feasible; or, that it will not serve the
best interests of the parties involved; or that the company would be
prejudiced by the workers’ continued employment; or that it will not serve
any prudent purpose as when supervening facts have transpired which
make execution on that score unjust or inequitable or, to an increasing
extent, due to the resultant atmosphere of ‘antipathy and antagonism’ or
‘strained relations’ or ‘irretrievable estrangement’ between the employer
and the employee. Emeritus Security<br/>and Maintenance Systems, Inc.
vs. Dailig, 720 SCRA 572, G.R. No. 204761 April 2, 2014
B. G.R. No. 198538. September 29, 2014.*
EXOCET SECURITY AND ALLIED SERVICES CORPORATION and/or
MA. TERESA MARCELO, vs. ARMANDO D. SERRANO

Labor Law; Security Guards; Floating Status or Off-Detail; While there

is no specific provision in the Labor Code which governs the “floating
status” or temporary “off-detail” of security guards employed by
private security agencies, this situation was considered by the
Supreme Court (SC) in several cases as a form of temporary
retrenchment or layoff.—While there is no specific provision in the Labor
Code which governs the “floating status” or temporary “off-detail” of
security guards employed by private security agencies, this situation was
considered by this Court in several cases as a form of temporary
retrenchment or layoff. The concept has been defined as that period of time
when security guards are in between assignments or when they are made
to wait after being relieved from a previous post until they are transferred
to a new one. As pointed out by the CA, it takes place when the security
agency’s clients decide not to renew their contracts with the agency,
resulting in a situation where the available posts under its existing
contracts are less than the number of guards in its roster. It also happens
in instances where contracts for security services stipulate that the client
may request the agency for the replacement of the guards assigned to it,
even for want of cause, such that the replaced security guard may be
placed on temporary “off-detail” if there are no available posts under the
agency’s existing contracts.

Same; Same; Same; As the circumstance is generally outside the

control of the security agency or the employer, the Supreme Court
(SC) has ruled that when a security guard is placed on a “floating
status,” he or she does not receive any salary or financial benefit
provided by law.—As the circumstance is generally outside the control of
the security agency or the employer, the Court has ruled that when a
security guard is placed on a “floating status,” he or she does not receive
any salary or financial benefit provided by law. Pido v. National Labor
Relations Commission, 516 SCRA 609 (2007), explains why: Verily, a
floating status requires the dire exigency of the employer’s bona fide
suspension of operation of a business or undertaking. In security services,
this happens when the security agency’s clients which do not renew their
contracts are more than those that do and the new ones that the agency
gets. Also, in instances when contracts for security services stipulate that
the client may request the agency for the replacement of the guards
assigned to it even for want of cause, the replaced security guard may be
placed on temporary “off-detail” if there are no available posts under
respondent’s existing contracts. When a security guard is placed on a
“floating status,” he does not receive any salary or financial benefit
provided by law. Due to the grim economic consequences to the employee,
the employer should bear the burden of proving that there are no posts
available to which the employee temporarily out of work can be assigned.

Same; Same; Same; Although placing a security guard on “floating

status” or a temporary “off-detail” is considered a temporary
retrenchment measure, there is similarly no provision in the Labor
Code which treats of a temporary retrenchment or layoff.—It must be
emphasized, however, that although placing a security guard on “floating
status” or a temporary “off-detail” is considered a temporary retrenchment
measure, there is similarly no provision in the Labor Code which treats of
a temporary retrenchment or layoff. Neither is there any provision which
provides for its requisites or its duration. Nevertheless, since an employee
cannot be laid off indefinitely, the Court has applied Article 292 (previously
Article 286) of the Labor Code by analogy to set the specific period of
temporary layoff to a maximum of six (6) months.

Same; Same; Same; The Supreme Court (SC) has held, citing Sebuguero
v. NLRC, 248 SCRA 532 (1995), that the placement of the employee
on a floating status should not last for more than six (6) months. After
six months, the employee should be recalled for work, or for a new
assignment; otherwise, he is deemed terminated.—This Court has
held, citing Sebuguero v. NLRC, 248 SCRA 532 (1995), that the placement
of the employee on a floating status should not last for more than six
months. After six months, the employee should be recalled for work, or for
a new assignment; otherwise, he is deemed terminated. There is no specific
provision of law which treats of a temporary retrenchment or layoff and
provides for the requisites in effecting it or a period or duration therefor.
These employees cannot forever be temporarily laid off. To remedy this
situation or fill the hiatus, Article 286 [now 292] may be applied but only
by analogy to set a specific period that employees may remain temporarily
laid off or in floating status. Six months is the period set by law that the
operation of a business or undertaking may be suspended thereby
suspending the employment of the employees concerned. The temporary
layoff wherein the employees likewise cease to work should also not last
longer than six months. After six months, the employees should either be
recalled to work or permanently retrenched following the requirements of
the law, and that failing to comply with this would be tantamount to
dismissing the employees and the employer would thus be liable for such
dismissal.

Same; Termination of Employment; The lack of service assignment

for a continuous period of six (6) months is an authorized cause for
the termination of the employee, who is then entitled to a separation
pay equivalent to half-month pay for every year of service.—The
Department of Labor and Employment (DOLE) issued Department Order
No. 14, Series of 2001 (DO 14-01), entitled “Guidelines Governing the
Employment and Working Conditions of Security Guards and Similar
Personnel in the Private Security Industry,” Section 6.5, in relation to Sec.
9.3, of which states that the lack of service assignment for a continuous
period of six (6) months is an authorized cause for the termination of the
employee, who is then entitled to a separation pay equivalent to half-
month pay for every year of service.

Same; Same; Security Guards; Floating Status or Off-Detail; To validly

terminate a security guard for lack of service assignment for a
continuous period of six (6) months under Secs. 6.5 and 9.3 of
Department Order (DO) 14-01, the security agency must comply with
the provisions of Article 289 (previously Art. 283) of the Labor Code,
which mandates that a written notice should be served on the
employee on temporary off-detail or floating status and to the
Department of Labor and Employment (DOLE) one (1) month before
the intended date of termination.—To validly terminate a security guard
for lack of service assignment for a continuous period of six months under
Secs. 6.5 and 9.3 of DO 14-01, the security agency must comply with the
provisions of Article 289 (previously Art. 283) of the Labor Code, which
mandates that a written notice should be served on the employee on
temporary off-detail or floating status and to the DOLE one (1) month
before the intended date of termination.

Same; Same; Same; Burden of Proof; The Supreme Court (SC) has
declared that the burden of proving that there are no posts available
to which the security guard may be assigned rests on the employer.—
In every case, the Court has declared that the burden of proving that there
are no posts available to which the security guard may be assigned rests
on the employer. We ruled in Nationwide Security and Allied Services, Inc.
v. Valderama, 644 SCRA 299 (2011): In cases involving security guards, a
relief and transfer order in itself does not sever employment relationship
between a security guard and his agency. An employee has the right to
security of tenure, but this does not give him a vested right to his position
as would deprive the company of its prerogative to change his assignment
or transfer him where his service, as security guard, will be most beneficial
to the client. Temporary “off-detail” or the period of time security guards
are made to wait until they are transferred or assigned to a new post or
client does not constitute constructive dismissal, so long as such status
does not continue beyond six months. The onus of proving that there is no
post available to which the security guard can be assigned rests on the
employer x x x.

Same; Security Guards; While the Supreme Court (SC) has recognized
the security guards’ right to security of tenure under the “floating
status” rule, the Court has similarly acknowledged the management
prerogative of security agencies to transfer security guards when
necessary in conducting its business, provided it is done in good
faith.—It cannot, therefore, be gainsaid that the right of security guards
to security of tenure is safeguarded by administrative issuances and
jurisprudence, in parallel with the mandate of the Labor Code and the
Constitution to protect labor and the working people. Nonetheless, while
the Court has recognized the security guards’ right to security of tenure
under the “floating status” rule, the Court has similarly acknowledged the
management prerogative of security agencies to transfer security guards
when necessary in conducting its business, provided it is done in good
faith.

Same; Same; Security of Tenure; The security guard’s right to security

of tenure does not give him a vested right to the position as would
deprive the company of its prerogative to change the assignment of,
or transfer the security guard to, a station where his services would
be most beneficial to the client.—The security guard’s right to security
of tenure does not give him a vested right to the position as would deprive
the company of its prerogative to change the assignment of, or transfer the
security guard to, a station where his services would be most beneficial to
the client. Indeed, an employer has the right to transfer or assign its
employees from one office or area of operation to another, or in pursuit of
its legitimate business interest, provided there is no demotion in rank or
diminution of salary, benefits, and other privileges, and the transfer is not
motivated by discrimination or bad faith, or effected as a form of
punishment or demotion without sufficient cause.

Same; Same; Since respondent Serrano was not actually or

constructively dismissed from his employment by petitioner Exocet,
 it is best that petitioner Exocet direct him to report for work, if any
security assignment is still available to him. If respondent Serrano
still refuses to be assigned to any available guard position, he shall be
deemed to have abandoned his employment with petitioner.—In this
factual milieu, since respondent Serrano was not actually or constructively
dismissed from his employment by petitioner Exocet, it is best that
petitioner Exocet direct him to report for work, if any security assignment
is still available to him. If respondent Serrano still refuses to be assigned
to any available guard position, he shall be deemed to have abandoned his
employment with petitioner. If no security assignment is available for
respondent, petitioner Exocet should comply with the requirements of DO
14-01, in relation to Art. 289 of the Labor Code, and serve a written notice
on Serrano and the DOLE one (1) month before the intended date of
termination, and pay Serrano separation pay equivalent to half month pay
for every year of his actual service. Exocet Security and Allied Services
Corporation vs. Serrano, 737 SCRA 40, G.R. No. 198538 September 29,
2014

PROCEDURAL DUE PROCESS IN DISMISSAL DUE TO DESEASE

A. G.R. No. 202996
June 18, 2014
MARLO A. DEOFERIO, , vs. INTEL TECHNOLOGY PHILIPPINES,
INC. and/or MIKE WENTLING,

Labor Law; Termination of Employment; Burden of Proof; In

termination cases, the law places the burden of proof upon the
employer to show by substantial evidence that the termination
was for a lawful cause and in the manner required by law.—
Concomitant to the employer’s right to freely select and engage an
employee is the employer’s right to discharge the employee for just
and/or authorized causes. To validly effect terminations of
employment, the discharge must be for a valid cause in the manner
required by law. The purpose of these two-pronged qualifications is to
protect the working class from the employer’s arbitrary and
unreasonable exercise of its right to dismiss. Thus, in termination
cases, the law places the burden of proof upon the employer to show
by substantial evidence that the termination was for a lawful cause
and in the manner required by law.

Same; Same; Disease; The Supreme Court (SC) liberally construed

the phrase “prejudicial to his health as well as to the health of his
co- employees” to mean “prejudicial to his health or to the health
of his co-employees.”—The present case involves termination due to
disease —The present case involves termination due to disease — an
authorized cause for dismissal under Article 284 of the Labor Code. As
substantive requirements, the Labor Code and its IRR require the
presence of the following elements: (1) An employer has been found to
be suffering from any disease. (2) His continued employment is
prohibited by law or prejudicial to his health, as well as to the health
of his co-employees. (3) A competent public health authority certifies
that the disease is of such nature or at such a stage that it cannot be
cured within a period of six months even with proper medical
treatment. With respect to the first and second elements, the Court
liberally construed the phrase “prejudicial to his health as well as to
the health of his co-employees” to mean “prejudicial to his health or to
the health of his co-employees.” We did not limit the scope of this
phrase to contagious diseases for the reason that this phrase is
preceded by the phrase “any disease” under Article 284 of the Labor
Code, to wit: Art. 284. Disease as ground for termination.—An
employer may terminate the services of an employee who has been
found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well
as to the health of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month salary or to one-
half (1/2) month salary for every year of service, whichever is greater,
a fraction of at least six (6) months being considered as one (1) whole
year.

Same; Same; Same; Procedural Due Process; The Labor Code and
its Implementing Rules and Regulations (IRR) are silent on the
procedural due process required in terminations due to disease.
Despite the seeming gap in the law, Section 2, Rule 1, Book VI of
the IRR expressly states that the employee should be afforded
procedural due process in all cases of dismissals.—The Labor Code
and its IRR are silent on the procedural due process required in
terminations due to disease. Despite the seeming gap in the law,
Section 2, Rule 1, Book VI of the IRR expressly states that the employee
should be afforded procedural due process in all cases of dismissals.
In Sy v. Court of Appeals, 398 SCRA 301, and Manly Express, Inc. v.
Payong, Jr., 474 SCRA 323, promulgated in 2003 and 2005,
respectively, the Court finally pronounced the rule that the employer
must furnish the employee two written notices in terminations due to
disease, namely: (1) the notice to apprise the employee of the ground
for which his dismissal is sought; and (2) the notice informing the
employee of his dismissal, to be issued after the employee has been
given reasonable opportunity to answer and to be heard on his defense.
These rulings reinforce the State policy of protecting the workers from
being terminated without cause and without affording them the
opportunity to explain their side of the controversy.

Same; Same; Same; Same; Nominal Damages; Intel’s violation of

Deoferio’s right to statutory procedural due process warrants the
payment of indemnity in the form of nominal damages; Dismissals
for just cause imply that the employee has committed a violation
against the employer, while terminations under Article 283 of the
Labor Code are initiated by the employer in the exercise of his
management prerogative.—Intel’s violation of Deoferio’s right to
statutory procedural due process warrants the payment of indemnity
in the form of nominal damages. In Jaka Food Processing Corp. v.
Pacot, 454 SCRA 119 (2005), we distinguished between terminations
based on Article 282 of the Labor Code and dismissals under Article
283 of the Labor Code. We then pegged the nominal damages at
P30,000.00 if the dismissal is based on a just cause but the employer
failed to comply with the twin-notice requirement. On the other hand,
we fixed the nominal damages at P50,000.00 if the dismissal is due to
an authorized cause under Article 283 of the Labor Code but the
employer failed to comply with the notice requirement. The reason is
that dismissals for just cause imply that the employee has committed
a violation against the employer, while terminations under Article 283
of the Labor Code are initiated by the employer in the exercise of his
management prerogative.

Same; Same; Same; Same; Same; Several Factors to be Taken Into

Consideration in Fixing Nominal Damages.—In fixing the amount of
nominal damages whose determination is addressed to our sound
discretion, the Court should take into account several factors
surrounding the case, such as: (1) the employer’s financial, medical,
and/or moral assistance to the sick employee; (2) the flexibility and
leeway that the employer allowed the sick employee in performing his
duties while attending to his medical needs; (3) the employer’s grant of
other termination benefits in favor of the employee; and (4) whether
there was a bona fide attempt on the part of the employer to comply
with the twin-notice requirement as opposed to giving no notice at all.
Same; Civil Law; Compensation; Under Article 1278 of the Civil
Code, in relation to Article 1706 of the Civil Code and Article
113(c) of the Labor Code, compensation shall take place when two
persons are creditors and debtors of each other in their own
right.—We award Deoferio the sum of P30,000.00 as nominal damages
for violation of his statutory right to procedural due process. In so
ruling, we take into account Intel’s faithful compliance with Article 284
of the Labor Code and Section 8, Rule 1, Book VI of the IRR. We also
note that Deoferio’s separation pay equivalent to one-half month salary
for every year of service was validly offset by his matured car loan.
Under Article 1278 of the Civil Code, in relation to Article 1706 of the
Civil Code and Article 113(c) of the Labor Code, compensation shall
take place when two persons are creditors and debtors of each other
in their own right. We likewise consider the fact that Intel exhibited
real concern to Deoferio when it financed his medical expenses for
more than four years. Furthermore, prior to his termination, Intel
liberally allowed Deoferio to take lengthy leave of absences to allow him
to attend to his medical needs.

Same; Same; Damages; Nominal Damages; Liability of Corporate

Officers; Wentling, as a corporate officer, cannot be held liable for
acts done in his official capacity because a corporation, by legal
fiction, has a personality separate and distinct from its officers,
stockholders, and members.—Intel shall be solely liable to Deoferio
for the satisfaction of nominal damages. Wentling, as a corporate
officer, cannot be held liable for acts done in his official capacity
because a corporation, by legal fiction, has a personality separate and
distinct from its officers, stockholders, and members. There is also no
ground for piercing the veil of corporate fiction because Wentling acted
in good faith and merely relied on Dr. Lee’s psychiatric report in
carrying out the dismissal.

Same; Employer-Employee Relationships; Damages; Money

Claims; Under Article 291 of the Labor Code, all money claims
arising from employer-employee relations shall be filed within
three years from the time the cause of action accrued.—Deoferio’s
claim for salary differential is already barred by prescription. Under
Article 291 of the Labor Code, all money claims arising from employer-
employee relations shall be filed within three years from the time the
cause of action accrued. In the current case, more than four years have
elapsed from the pretermination of his assignment to the United States
until the filing of his complaint against the respondents. We thus see
no point in further discussing this matter. His claim for backwages,
separation pay, moral and exemplary damages, as well as attorney’s
 fees must also necessarily fail as a consequence of our finding that his
dismissal was for an authorized cause and that the respondents acted
in good faith when they terminated his services. Deoferio vs. Intel
Technology Philippines, Inc., 726 SCRA 676, G.R. No. 202996 June
18, 2014
B. G.R. Nos. 204944-45.
December 3, 2014.
FUJI TELEVISION NETWORK, INC vs. ARLENE S. ESPIRITU

Remedial Law; Civil Procedure; Verification; Certification Against

Forum Shopping; Rule 7, Section 4 of the 1997 Rules of Civil
Procedure provides the requirement of verification, while Section
5 of the same rule provides the requirement of certification
against forum shopping.—Rule 7, Section 4 of the 1997 Rules of Civil
Procedure provides the requirement of verification, while Section 5 of
the same rule provides the requirement of certification against forum
shopping. x x x Section 4(e) of Rule 45 requires that petitions for review
should “contain a sworn certification against forum shopping as
provided in the last paragraph of Section 2, Rule 42.” Section 5 of the
same rule provides that failure to comply with any requirement in
Section 4 is sufficient ground to dismiss the petition.

Same; Same; Same; Same; Although the general rule is that failure
to attach a verification and certification against forum shopping
is a ground for dismissal, there are cases where this court allowed
substantial compliance.—Although the general rule is that failure to
attach a verification and certification against forum shopping is a
ground for dismissal, there are cases where this court allowed
substantial compliance.

Same; Same; Same; Same; The physical act of signing the

verification and certification against forum shopping can only be
done by natural persons duly authorized either by the corporate
bylaws or a board resolution.—Being a corporation, Fuji exercises its
power to sue and be sued through its board of directors or duly
authorized officers and agents. Thus, the physical act of signing the
verification and certification against forum shopping can only be done
by natural persons duly authorized either by the corporate bylaws or
a board resolution. In its petition for review on certiorari, Fuji attached
Hideaki Ota’s secretary’s certificate, authorizing Shuji Yano and Jin
Eto to represent and sign for and on behalf of Fuji. The secretary’s
certificate was duly authenticated by Sulpicio Confiado, Consul-
General of the Philippines in Japan. Likewise attached to the petition
is the special power of attorney executed by Shuji Yano, authorizing
Corazon to sign on his behalf. The verification and certification against
forum shopping was signed by Corazon.

Same; Same; Same; Same; The Supreme Court (SC) has recognized
that there are instances when officials or employees of a
corporation can sign the verification and certification against
forum shopping without a board resolution.—This court has
recognized that there are instances when officials or employees of a
corporation can sign the verification and certification against forum
shopping without a board resolution. In Cagayan Valley Drug
Corporation v. CIR, 545 SCRA 10 (2008), it was held that: In sum, we
have held that the following officials or employees of the company can
sign the verification and certification without need of a board
resolution: (1) the Chairperson of the Board of Directors, (2) the
President of a corporation, (3) the General Manager or Acting General
Manager, (4) Personnel Officer, and (5) an Employment Specialist in a
labor case. While the above cases do not provide a complete listing of
authorized signatories to the verification and certification required by
the rules, the determination of the sufficiency of the authority was
done on a case to case basis. The rationale applied in the foregoing
cases is to justify the authority of corporate officers or representatives
of the corporation to sign the verification or certificate against forum
shopping, being ‘in a position to verify the truthfulness and correctness
of the allegations in the petition.’ Corazon’s affidavit states that she is
the “office manager and resident interpreter of the Manila Bureau of
Fuji Television Network, Inc.” and that she has “held the position for
the last twenty-three years.” As the office manager for 23 years,
Corazon can be considered as having knowledge of all matters in Fuji’s
Manila Bureau Office and is in a position to verify “the truthfulness
and the correctness of the allegations in the Petition.” Thus, Fuji
substantially complied with the requirements of verification and
certification against forum shopping.

Labor Law; Appeals; Article 223 of the Labor Code does not provide
any mode of appeal for decisions of the National Labor Relations
Commission (NLRC).—Article 223 of the Labor Code does not provide
any mode of appeal for decisions of the National Labor Relations
Commission. It merely states that “[t]he decision of the Commission
shall be final and executory after ten (10) calendar days from receipt
thereof by the parties.” Being final, it is no longer appealable. However,
the finality of the National Labor Relations Commission’s decisions
does not mean that there is no more recourse for the parties.

Same; Same; The Supreme Court (SC) clarified that judicial review
of National Labor Relations Commission’s (NLRC’s) decisions shall
be by way of a petition for certiorari under Rule 65. Citing the
doctrine of hierarchy of courts, it further ruled that such petitions
shall be filed before the Court of Appeals (CA). From the CA, an
aggrieved party may file a petition for review on certiorari under
Rule 45.—In St. Martin Funeral Home v. National Labor Relations
Commission, 295 SCRA 494 (1998), this court cited several cases and
rejected the notion that this court had no jurisdiction to review
decisions of the National Labor Relations Commission. It stated that
this court had the power to review the acts of the National Labor
Relations Commission to see if it kept within its jurisdiction in deciding
cases and also as a form of check and balance. This court then clarified
that judicial review of National Labor Relations Commission’s decisions
shall be by way of a petition for certiorari under Rule 65. Citing the
doctrine of hierarchy of courts, it further ruled that such petitions shall
be filed before the Court of Appeals. From the Court of Appeals, an
aggrieved party may file a petition for review on certiorari under Rule
45. A petition for certiorari under Rule 65 is an original action where
the issue is limited to grave abuse of discretion. As an original action,
it cannot be considered as a continuation of the proceedings of the
labor tribunals. On the other hand, a petition for review on certiorari
under Rule 45 is a mode of appeal where the issue is limited to
questions of law. In labor cases, a Rule 45 petition is limited to
reviewing whether the Court of Appeals correctly determined the
presence or absence of grave abuse of discretion and deciding other
jurisdictional errors of the National Labor Relations Commission.

Same; Employer-Employee Relationship; The Supreme Court (SC)

has often used the four (4)-fold test to determine the existence of
an employer-employee relationship.—This court has often used the
four-fold test to determine the existence of an employer-employee
relationship. Under the four-fold test, the “control test” is the most
important. As to how the elements in the four-fold test are proven, this
court has discussed that: [t]here is no hard and fast rule designed to
establish the aforesaid elements. Any competent and relevant evidence
to prove the relationship may be admitted. Identification cards, cash
vouchers, social security registration, appointment letters or
employment contracts, payrolls, organization charts, and personnel
lists, serve as evidence of employee status.

Same; Same; Independent Contractors; There is no employer-

employee relationship between the contractor and principal who
engages the contractor’s services, but there is an employer-
employee relationship between the contractor and workers hired
to accomplish the work for the principal.—In Department Order No.
18-A, Series of 2011, of the Department of Labor and Employment, a
contractor is defined as having: Section 3. . . . . . . . (c) . . . an
arrangement whereby a principal agrees to put out or farm out with a
contractor the performance or completion 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. This department order also states
that there is a trilateral relationship in legitimate job contracting and
subcontracting arrangements among the principal, contractor, and
employees of the contractor. There is no employer-employee
relationship between the contractor and principal who engages the
contractor’s services, but there is an employer-employee relationship
between the contractor and workers hired to accomplish the work for
the principal.

Same; Same; Same; Since no employer-employee relationship

exists between independent contractors and their principals, their
contracts are governed by the Civil Code provisions on contracts
and other applicable laws.—Since no employer-employee relationship
exists between independent contractors and their principals, their
contracts are governed by the Civil Code provisions on contracts and
other applicable laws. A contract is defined as “a meeting of minds
between two persons whereby one binds himself, with respect to the
other, to give something or to render some service.” Parties are free to
stipulate on terms and conditions in contracts as long as these “are
not contrary to law, morals, good customs, public order, or public
policy.” This presupposes that the parties to a contract are on equal
footing. They can bargain on terms and conditions until they are able
to reach an agreement.

Same; Same; Same; Employees under fixed-term contracts cannot

be independent contractors because in fixed-term contracts, an
employer-employee relationship exists.—Fuji’s argument that
Arlene was an independent contractor under a fixed-term contract is
contradictory. Employees under fixed-term contracts cannot be
independent contractors because in fixed-term contracts, an employer-
employee relationship exists. The test in this kind of contract is not the
necessity and desirability of the employee’s activities, “but the day
certain agreed upon by the parties for the commencement and
termination of the employment relationship.” For regular employees,
the necessity and desirability of their work in the usual course of the
employer’s business are the determining factors. On the other hand,
independent contractors do not have employer-employee relationships
with their principals.

Same; Same; Same; Wages should not be the conclusive factor in

determining whether one is an employee or an independent
contractor.—The Court of Appeals did not err when it relied on the
ruling in Dumpit-Murillo v. Court of Appeals, 524 SCRA 290 (2007),
and affirmed the ruling of the National Labor Relations Commission
finding that Arlene was a regular employee. Arlene was hired by Fuji
as a news producer, but there was no showing that she was hired
because of unique skills that would distinguish her from ordinary
employees. Neither was there any showing that she had a celebrity
status. Her monthly salary amounting to US$1,900.00 appears to be a
substantial sum, especially if compared to her salary when she was
still connected with GMA. Indeed, wages may indicate whether one is
an independent contractor. Wages may also indicate that an employee
is able to bargain with the employer for better pay. However, wages
should not be the conclusive factor in determining whether one is an
employee or an independent contractor.

Same; Same; Regular Employees; The test for determining regular

employment is whether there is a reasonable connection between
the employee’s activities and the usual business of the
employer.—The test for determining regular employment is whether
there is a reasonable connection between the employee’s activities and
the usual business of the employer. Article 280 provides that the
nature of work must be “necessary or desirable in the usual business
or trade of the employer” as the test for determining regular
employment. As stated in ABS-CBN Broadcasting Corporation v.
Nazareno, 503 SCRA 204 (2006): In determining whether an
employment should be considered regular or non-regular, the
applicable test is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or
trade of the employer. The standard, supplied by the law itself, is
whether the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by
looking into the nature of the services rendered and its relation to the
general scheme under which the business or trade is pursued in the
usual course. It is distinguished from a specific undertaking that is
divorced from the normal activities required in carrying on the
particular business or trade.

Same; Same; Same; An employee can be a regular employee with a

fixed-term contract.—An employee can be a regular employee with a
fixed-term contract. The law does not preclude the possibility that a
regular employee may opt to have a fixed-term contract for valid
reasons. This was recognized in Brent School, Inc. v. Zamora, 181
SCRA 702 (1990): For as long as it was the employee who requested,
or bargained, that the contract have a “definite date of termination,” or
that the fixed-term contract be freely entered into by the employer and
the employee, then the validity of the fixed-term contract will be
upheld.

Same; Same; Probationary Employees; Security of Tenure; Even

probationary employees are entitled to the right to security of
tenure.—Even probationary employees are entitled to the right to
security of tenure. This was explained in Philippine Daily Inquirer, Inc.
v. Magtibay, Jr., 528 SCRA 355 (2007): Within the limited legal six-
month probationary period, probationary employees are still entitled
to security of tenure. It is expressly provided in the aforequoted Article
281 that a probationary employee may be terminated only on two
grounds: (a) for just cause, or (b) 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. (Citation
omitted) The expiration of Arlene’s contract does not negate the finding
of illegal dismissal by Fuji. The manner by which Fuji informed Arlene
that her contract would no longer be renewed is tantamount to
constructive dismissal. To make matters worse, Arlene was asked to
sign a letter of resignation prepared by Fuji. The existence of a fixed-
term contract should not mean that there can be no illegal dismissal.
Due process must still be observed in the pretermination of fixed-term
contracts of employment.

Same; Termination of Employment; Disease; Requirements for

Termination of Employment on the Ground of Disease Under
Article 284 of the Labor Code.—For dismissal under Article 284 to
be valid, two requirements must be complied with: (1) the employee’s
disease cannot be cured within six (6) months and his “continued
employment is prohibited by law or prejudicial to his health as well as
to the health of his co-employees”; and (2) certification issued by a
competent public health authority that even with proper medical
treatment, the disease cannot be cured within six (6) months. The
burden of proving compliance with these requisites is on the employer.
Non-compliance leads to the conclusion that the dismissal was illegal.

Same; Same; Illegal Dismissals; The law itself provides that

illegally dismissed employees are entitled to reinstatement,
backwages including allowances, and all other benefits.—The Court
of Appeals’ modification of the National Labor Relations Commission’s
decision was proper because the law itself provides that illegally
dismissed employees are entitled to reinstatement, backwages
including allowances, and all other benefits. On reinstatement, the
National Labor Relations Commission ordered payment of separation
pay in lieu of reinstatement, reasoning “that the filing of the instant
suit may have seriously abraded the relationship of the parties so as
to render reinstatement impractical.” The Court of Appeals reversed
this and ordered reinstatement on the ground that separation pay in
lieu of reinstatement is allowed only in several instances such as (1)
when the employer has ceased operations; (2) when the employee’s
position is no longer available; (3) strained relations; and (4) a
substantial period has lapsed from date of filing to date of finality.

Same; Quitclaims; Quitclaims in labor cases do not bar illegally

dismissed employees from filing labor complaints and money
claim.—Quitclaims in labor cases do not bar illegally dismissed
employees from filing labor complaints and money claim. As explained
by Arlene, she signed the nonrenewal agreement out of necessity. In
Land and Housing Development Corporation v. Esquillo, 471 SCRA
488 (2005), this court explained: We have heretofore explained that the
reason why quitclaims are 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 to
get hold of money. Because, out of a job, he had to face the 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.
Same; Moral Damages; Exemplary Damages; Moral damages are
awarded “when the dismissal is attended by bad faith or fraud or
constitutes an act oppressive to labor, or is done in a manner
contrary to good morals, good customs or public policy.” On the
other hand, exemplary damages may be awarded when the
dismissal was effected “in a wanton, oppressive or malevolent
manner.”—With regard to the Court of Appeals’ award of moral and
exemplary damages and attorney’s fees, this court has recognized in
several cases that moral damages are awarded “when the dismissal is
attended by bad faith or fraud or constitutes an act oppressive to labor,
or is done in a manner contrary to good morals, good customs or public
policy.” On the other hand, exemplary damages may be awarded when
the dismissal was effected “in a wanton, oppressive or malevolent
manner.” The Court of Appeals and National Labor Relations
Commission found that after Arlene had informed Fuji of her cancer,
she was informed that there would be problems in renewing her
contract on account of her condition. This information caused Arlene
mental anguish, serious anxiety, and wounded feelings that can be
gleaned from the tenor of her email dated March 11, 2009. A portion
of her email reads: I WAS SO SURPRISED . . . that at a time when I am
at my lowest, being sick and very weak, you suddenly came to deliver
to me the NEWS that you will no longer renew my contract. I knew this
will come but I never thought that you will be so ‘heartless’ and
insensitive to deliver that news just a month after I informed you that
I am sick. I was asking for patience and understanding and your
response was not to RENEW my contract. Apart from Arlene’s illegal
dismissal, the manner of her dismissal was effected in an oppressive
approach with her salary and other benefits being withheld until May
5, 2009, when she had no other choice but to sign the nonrenewal
contract. Thus, there was legal basis for the Court of Appeals to modify
the National Labor Relations Commission’s decision.

Same; Attorney’s Fees; Article 111 of the Labor Code states that
“[i]n cases of unlawful withholding of wages, the culpable party
may be assessed attorney’s fees equivalent to ten percent (10%)
of the amount of wages recovered”; Where an employee was forced
to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney’s fees is legally and morally
justifiable.—With regard to the award of attorney’s fees, Article 111 of
the Labor Code states that “[i]n cases of unlawful withholding of wages,
the culpable party may be assessed attorney’s fees equivalent to ten
percent of the amount of wages recovered.” Likewise, this court has
 recognized that “in actions for recovery of wages or where an employee
was forced to litigate and, thus, incur expenses to protect his rights
and interest, the award of attorney’s fees is legally and morally
justifiable.” Due to her illegal dismissal, Arlene was forced to litigate.
Fuji Television Network, Inc. vs. Espiritu, 744 SCRA 31, G.R. Nos.
204944-45 December 3, 2014

FAILURE TO PROVIDE WORKABLE ENVIRONMENT AS QUASI-DELICT

A. G.R. No. 171212

August 4, 2014
INDOPHIL TEXTILE MILLS, INC.,
vs.
ENGR. SALVADOR ADVIENTO,

XIII

CONSEQUENCES OF TERMINATION

PREVENTIVE SUSPENSION AND SUSPENSION AS PENALTY

A. G.R. No. 189947

January 25, 2012
MANILA PAVILION HOTEL, owned and operated by ACESITE
(PHILS.) HOTEL CORPORATION, vs. HENRY DELADA

Labor Law; Voluntary Arbitrators; Jurisdiction; The voluntary

arbitrator had plenary jurisdiction and authority to interpret the
agreement to arbitrate and to determine the scope of his own
authority—subject only, in a proper case, to the certiorari jurisdiction
of this Court. In that case, the specific issue presented was “the issue
of performance bonus.”—In Sime Darby Pilipinas, Inc. v. Deputy
Administrator Magsalin, 180 SCRA 177 (1989), we ruled that the
voluntary arbitrator had plenary jurisdiction and authority to interpret
the agreement to arbitrate and to determine the scope of his own
authority—subject only, in a proper case, to the certiorari jurisdiction
of this Court. In that case, the specific issue presented was “the issue
of performance bonus.” We then held that the arbitrator had the
authority to determine not only the issue of whether or not a
performance bonus was to be granted, but also the related question of
the amount of bonus, were it to be granted. We then said that there
was no indication at all that the parties to the arbitration agreement
had regarded “the issue of performance bonus” as a two-tiered issue,
only one aspect of which was being submitted to arbitration; thus, we
held that the failure of the parties to specifically limit the issues to that
which was stated allowed the arbitrator to assume jurisdiction over the
related issue.

Same; Same; Same; Even if the specific issue brought before the
arbitrators merely mentioned the question of “whether an
employee was discharged for just cause,” they could reasonably
assume that their powers extended beyond the determination
thereof to include the power to reinstate the employee or to grant
back wages.—A more recent case is Ludo & Luym Corporation v.
Saornido, 395 SCRA 451 (2003). In that case, we recognized that
voluntary arbitrators are generally expected to decide only those
questions expressly delineated by the submission agreement; that,
nevertheless, they can assume that they have the necessary power to
make a final settlement on the related issues, since arbitration is the
final resort for the adjudication of disputes. Thus, we ruled that even if
the specific issue brought before the arbitrators merely mentioned the
question of “whether an employee was discharged for just cause,” they
could reasonably assume that their powers extended beyond the
determination thereof to include the power to reinstate the employee or
to grant back wages. In the same vein, if the specific issue brought
before the arbitrators referred to the date of regularization of the
employee, law and jurisprudence gave them enough leeway as well as
adequate prerogative to determine the entitlement of the employees to
higher benefits in accordance with the finding of regularization. Indeed,
to require the parties to file another action for payment of those benefits
would certainly undermine labor proceedings and contravene the
constitutional mandate providing full protection to labor and speedy
labor justice.

Same; Termination of Employment; Willful Disobedience; The

refusal to obey a valid transfer order constitutes willful
disobedience of a lawful order of an employer.—In Allied Banking
Corporation vs. Court of Appeals, 416 SCRA 65 (2003), 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 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.
Manila Pavilion Hotel vs. Delada, 664 SCRA 334, G.R. No. 189947
January 25, 2012

B. G.R. No. 175932

February 15, 2012
WUERTH PHILIPPINES, INC.,
vs.
RODANTE YNSON

C. G.R. Nos. 142732-33

December 4, 2007

MARILOU S. GENUINO, petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM FERGUSON,
and AZIZ RAJKOTWALA, respondents.

G.R. Nos. 142753-54

December 4, 2007
CITIBANK, N.A., WILLIAM FERGUSON, and AZIZ RAJKOTWALA,
petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and
MARILOU GENUINO, respondents Genuino vs. National Labor
Relations Commission, 539 SCRA 342, G.R. Nos. 142732-33, G.R.
Nos. 142753-54 December 4, 2007

Labor Law; Dismissals; Termination of Employees; Due Process;

Twin Notice Requirement.—In a string of cases, we have repeatedly
said that the requirement of twin notices must be met. In the recent
case of King of Kings Transport, Inc. v. Mamac, 526 SCRA 116 (2007),
we explained: To clarify, the following should be considered in
terminating the services of employees: (1) The first written notice to be
served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are
given the opportunity to submit their written explanation within a
reasonable period. “Reasonable opportunity” under the Omnibus Rules
means every kind of assistance that management must accord to the
employees to enable them to prepare adequately for their defense. This
should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the
accusation against them, consult a union official or lawyer, gather data
and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently
prepare their explanation and defenses, the notice should contain a
detailed narration of the facts and circumstances that will serve as
basis for the charge against the employees. A general description of the
charge will not suffice. Lastly, the notice should specifically mention
which company rules, if any, are violated and/or which among the
grounds under Art. 282 is being charged against the employees. (2)
After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given
the opportunity to: (1) explain and clarify their defenses to the charge
against them; (2) present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the management. During
the hearing or conference, the employees are given the chance to defend
themselves personally, with the assistance of a representative or
counsel of their choice. Moreover, this conference or hearing could be
used by the parties as an opportunity to come to an amicable
settlement. (3) After determining that termination of employment is
justified, the employers shall serve the employees a written notice of
termination indicating that: (1) all circumstances involving the charge
against the employees have been considered; and (2) grounds have been
established to justify the severance of their employment.
Same; Same; Same; Same; Where the notice of charges given to an
employee is inadequate, the charges being too general to enable
the employee to intelligently and adequately prepare her defense,
the dismissal could not be in accordance with due process.—While
the bank gave Genuino an opportunity to deny the truth of the
allegations in writing and participate in the administrative
investigation, the fact remains that the charges were too general to
enable Genuino to intelligently and adequately prepare her defense. The
two-notice requirement of the Labor Code is an essential part of due
process. The first notice informing the employee of the charges should
neither be pro forma nor vague. It should set out clearly what the
employee is being held liable for. The employee should be afforded
ample opportunity to be heard and not mere opportunity. As explained
in King of Kings Transport, Inc., ample opportunity to be heard is
especially accorded the employees sought to be dismissed after they are
specifically informed of the charges in order to give them an opportunity
to refute such accusations leveled against them. Since the notice of
charges given to Genuino is inadequate, the dismissal could not be in
accordance with due process.

Same; Same; Loss of Confidence; In order to constitute as just

cause for dismissal, loss of confidence should relate to acts
inimical to the interests of the employer; For loss of trust and
confidence to be a valid ground for an employee’s dismissal, it
must be substantial and not arbitrary, and must be founded on
clearly established facts sufficient to warrant the employee’s
separation from work.—Art. 282(c) of the Labor Code provides that an
employer may terminate an employment for fraud or willful breach by
the employee of the trust reposed in him/her by his/her employer or
duly authorized representative. In order to constitute as just cause for
dismissal, loss of confidence should relate to acts inimical to the
interests of the employer. Also, the act complained of should have
arisen from the performance of the employee’s duties. For loss of trust
and confidence to be a valid ground for an employee’s dismissal, it must
be substantial and not arbitrary, and must be founded on clearly
established facts sufficient to warrant the employee’s separation from
work. We also held that: [L]oss of confidence is a valid ground for
dismissing an employee and proof beyond reasonable doubt of the
employee’s misconduct is not required. It is sufficient if there is some
basis for such loss of confidence or if the employer has reasonable
ground to believe or to entertain the moral conviction that the employee
concerned is responsible for the misconduct and that the nature of his
participation therein rendered him unworthy of the trust and
confidence demanded by his position.
Same; Same; Due Process; Agabon Doctrine; The violation of an
employee’s right to statutory due process by the employer
warrants the payment of indemnity in the form of nominal
damages, the amount of which is addressed to the sound discretion
of the court, taking into account the relevant circumstances.—In
view of Citibank’s failure to observe due process, however, nominal
damages are in order but the amount is hereby raised to PhP 30,000
pursuant to Agabon v. NLRC, 442 SCRA 573 (2004). The NLRC’s order
for payroll reinstatement is set aside. In Agabon, we explained: The
violation of the petitioners’ right to statutory due process by the private
respondent warrants the amount of such damages is addressed to the
sound discretion of the court, taking into account the relevant
circumstances. Considering the prevailing circumstances in the case at
bar, we deem it proper to fix it at P30,000.00. We believe this form of
damages would serve to deter employers from future violations of the
statutory due process rights of employees. At the very least, it provides
a vindication or recognition of this fundamental right granted to the
latter under the Labor Code and its Implementing Rules.

Same; Same; Payroll Reinstatement; Where the decision of the

labor arbiter is for the reinstatement of the employee, the
employee shall either be admitted back to work or, at the option
of the employer, merely reinstated in the payroll, and if the
decision of the labor arbiter is later reversed on appeal upon the
finding that the ground for dismissal is valid, then the employer
has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case
was pending appeal, or it can be deducted from the accrued
benefits that the dismissed employee may be entitled to receive
from his/her employer under existing laws, collective bargaining
agreement provisions, and company practices.— Ordinarily, the
employer is required to reinstate the employee during the pendency of
the appeal pursuant to Art. 223, paragraph 3 of the Labor Code, which
states: In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement aspect
is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms
and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting of
a bond by the employer shall not stay the execution for reinstatement
provided herein. If the decision of the labor arbiter is later reversed on
appeal upon the finding that the ground for dismissal is valid, then the
employer has the right to require the dismissed employee on payroll
reinstatement to refund the salaries s/he received while the case was
pending appeal, or it can be deducted from the accrued benefits that
the dismissed employee was entitled to receive from his/her employer
 under existing laws, collective bargaining agreement provisions, and
company practices. However, if the employee was reinstated to work
during the pendency of the appeal, then the employee is entitled to the
compensation received for actual services rendered without need of
refund

D. G.R. No. 164856.

January 20, 2009.*

JUANITO A. GARCIA and ALBERTO J. DUMAGO, vs. PHILIPPINE

AIRLINES, INC.

Labor Law; Wages; A dismissed employee whose case was favorably

decided by the Labor Arbiter is entitled to receive wages pending
appeal upon reinstatement, which is immediately executory—
unless there is a restraining order, it is ministerial upon the Labor
Arbiter to implement the order of reinstatement and it is
mandatory on the employer to comply therewith.—A dismissed
employee whose case was favorably decided by the Labor Arbiter is
entitled to receive wages pending appeal upon reinstatement, which is
immediately executory. Unless there is a restraining order, it is
ministerial upon the Labor Arbiter to implement the order of
reinstatement and it is mandatory on the employer to comply therewith.

Same; Reinstatement; It settles the view that the Labor Arbiter’s

order of reinstatement is immediately executory and the employer
has to either re-admit them to work under the same terms and
conditions prevailing prior to their dismissal, or to reinstate them
in the payroll, and that failing to exercise the options in the
alternative, employer must pay the employee’s salaries.—The Court
reaffirms the prevailing principle that even if the order of reinstatement
of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court. It settles
the view that the Labor Arbiter’s order of reinstatement is immediately
executory and the employer has to either re-admit them to work under
the same terms and conditions prevailing prior to their dismissal, or to
reinstate them in the payroll, and that failing to exercise the options in
the alternative, employer must pay the employee’s salaries.

Same; Same; While reinstatement pending appeal aims to avert the

continuing threat or danger to the survival or even the life of the
dismissed employee and his family, it does not contemplate the
period when the employer-corporation itself is similarly in a
judicially monitored state of being resuscitated in order to
survive.—While reinstatement pending appeal aims to avert the
continuing threat or danger to the survival or even the life of the
dismissed employee and his family, it does not contemplate the period
when the employer-corporation itself is similarly in a judicially
monitored state of being resuscitated in order to survive.

Same; Writ of Execution; The new National Labor Relations

Commission (NLRC) Rules of Procedure, which took effect on
January 7, 2006, now require the employer to submit a report of
compliance within ten (10) calendar days from receipt of the Labor
Arbiter’s decision, disobedience to which clearly denotes a refusal
to reinstate—the employee need not file a motion for the issuance of
the writ of execution since the Labor Arbiter shall thereafter motu
proprio issue the writ, and, with the new rules in place, there is hardly
any difficulty in determining the employer’s intransigence in
immediately complying with the order.—The new NLRC Rules of
Procedure, which took effect on January 7, 2006, now require the
employer to submit a report of compliance within 10 calendar days from
receipt of the Labor Arbiter’s decision, disobedience to which clearly
denotes a refusal to reinstate. The employee need not file a motion for
the issuance of the writ of execution since the Labor Arbiter shall
thereafter motu proprio issue the writ. With the new rules in place,
there is hardly any difficulty in determining the employer’s
intransigence in immediately complying with the order.

Same; Corporate Rehabilitation; Had there been no need to rehabilitate,

respondent may have opted for actual physical reinstatement pending
appeal to optimize the utilization of resources—then again, though the
management may think this wise, the rehabilitation receiver may
decide otherwise, not to mention the subsistence of the injunction on
claims.—There are legal effects arising from a judicial order placing a
corporation under rehabilitation. Respondent was, during the period
material to the case, effectively deprived of the alternative choices under
Article 223 of the Labor Code, not only by virtue of the statutory
 injunction but also in view of the interim relinquishment of
management control to give way to the full exercise of the powers of the
rehabilitation receiver. Had there been no need to rehabilitate,
respondent may have opted for actual physical reinstatement pending
appeal to optimize the utilization of resources. Then again, though the
management may think this wise, the rehabilitation receiver may
decide otherwise, not to mention the subsistence of the injunction on
claims. Garcia vs. Philippine Airlines, Inc., 576 SCRA 479, G.R. No.
164856 January 20, 2009

E. G.R. No. 158693

November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, vs. NATIONAL

LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME
IMPROVEMENTS, INC. and VICENTE ANGELES

Labor Law; Administrative Law; If the factual findings of the NLRC

and the Labor Arbiter are conflicting, the reviewing court may
delve into the records and examine for itself the questioned
findings.—It is well-settled that findings of fact of quasi-judicial
agencies like the NLRC are accorded not only respect but even finality
if the findings are supported by substantial evidence. This is especially
so when such findings were affirmed by the Court of Appeals. However,
if the factual findings of the NLRC and the Labor Arbiter are conflicting,
as in this case, the reviewing court may delve into the records and
examine for itself the questioned findings. Accordingly, the Court of
Appeals, after a careful review of the facts, ruled that petitioners’
dismissal was for a just cause. They had abandoned their employment
and were already working for another employer.

Same; Dismissal of Employees; To dismiss an employee, the law

requires not only the existence of a just and valid cause but also
enjoins the employer to give the employee the opportunity to be
heard and to defend himself.—To dismiss an employee, the law
requires not only the existence of a just and valid cause but also enjoins
the employer to give the employee the opportunity to be heard and to
defend himself. Article 282 of the Labor Code enumerates the just
causes for termination by the employer: (a) serious misconduct or
willful disobedience by the employee of the lawful orders of his employer
or the latter’s representative in connection with the employee’s 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 his duly authorized representative; (d) commission of a
crime or offense by the employee against the person of his employer or
any immediate member of his family or his duly authorized
representative; and (e) other causes analogous to the foregoing.

Same; Same; Abandonment; Words and Phrases; Abandonment is

the deliberate and unjustified refusal of an employee to resume his
employment—it is a form of neglect of duty, hence, a just cause
for termination of employment by the employer.—Abandonment is
the deliberate and unjustified refusal of an employee to resume his
employment. It is a form of neglect of duty, hence, a just cause for
termination of employment by the employer. For a valid finding of
abandonment, these two factors should be present: (1) the failure to
report for work or absence without valid or justifiable reason; and (2) a
clear intention to sever employer-employee relationship, with the
second as the more determinative factor which is manifested by overt
acts from which it may be deduced that the employees has no more
intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified.

Same; Same; Same; Moonlighting; Subcontracting for another

company clearly shows the intention to sever the employer-
employee relationship; The record of an employee is a relevant
consideration in determining the penalty that should be meted out
to him.—In February 1999, petitioners were frequently absent having
subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to
sever the employer-employee relationship with private respondent. This
was not the first time they did this. In January 1996, they did not report
for work because they were working for another company. Private
respondent at that time warned petitioners that they would be
dismissed if this happened again. Petitioners disregarded the warning
and exhibited a clear intention to sever their employer-employee
relationship. The record of an employee is a relevant consideration in
determining the penalty that should be meted out to him.

Same; Same; The employer may not be compelled to continue to

employ such persons whose continuance in the service will
patently be inimical to his interests.—The law imposes many
obligations on the employer such as providing just compensation to
workers, observance of the procedural requirements of notice and
hearing in the termination of employment. On the other hand, the law
also recognizes the right of the employer to expect from its workers not
only good performance, adequate work and diligence, but also good
conduct and loyalty. The employer may not be compelled to continue to
employ such persons whose continuance in the service will patently be
inimical to his interests.

Same; Same; Dismissals based on just causes contemplate acts or

omissions attributable to the employee while dismissals based on
authorized causes involve grounds under the Labor Code which
allow the employer to terminate employees.—Dismissals based on
just causes contemplate acts or omissions attributable to the employee
while dismissals based on authorized causes involve grounds under the
Labor Code which allow the employer to terminate employees. A
termination for an authorized cause requires payment of separation
pay. When the termination of employment is declared illegal,
reinstatement and full backwages are mandated under Article 279. If
reinstatement is no longer possible where the dismissal was unjust,
separation pay may be granted.

Same; Same; Due Process; Notice Requirement; Procedurally, (1) if

the dismissal is based on a just cause under Article 282 of the
Labor Code, the employer must give the employee two written
notices and a hearing or opportunity to be heard if requested by
the employee before terminating the employment, and (2) if the
dismissal is based on authorized causes under Articles 283 and
284, the employer must give the employee and the Department of
Labor and Employment written notices 30 days prior to the
effectivity of his separation; Failure to observe due process in a
dismissal for just or authorized cause does not invalidate the
dismissal but makes the employer liable for non-compliance with
the procedural requirements of due process.—Procedurally, (1) if the
dismissal is based on a just cause under Article 282, the employer must
give the employee two written notices and a hearing or opportunity to
be heard if requested by the employee before terminating the
employment: a notice specifying the grounds for which dismissal is
sought a hearing or an opportunity to be heard and after hearing or
opportunity to be heard, a notice of the decision to dismiss; and (2) if
the dismissal is based on authorized causes under Articles 283 and
284, the employer must give the employee and the Department of Labor
and Employment written notices 30 days prior to the effectivity of his
separation. From the foregoing rules four possible situations may be
derived: (1) the dismissal is for a just cause under Article 282 of the
Labor Code, for an authorized cause under Article 283, or for health
reasons under Article 284, and due process was observed; (2) the
dismissal is without just or authorized cause but due process was
observed; (3) the dismissal is without just or authorized cause and
there was no due process; and (4) the dismissal is for just or authorized
cause but due process was not observed. In the first situation, the
dismissal is undoubtedly valid and the employer will not suffer any
liability. In the second and third situations where the dismissals are
illegal, Article 279 mandates that the employee is entitled to
reinstatement without loss of seniority rights and other privileges and
full backwages, inclusive of allowances, and other benefits or their
monetary equivalent computed from the time the compensation was
not paid up to the time of actual reinstatement. In the fourth situation,
the dismissal should be upheld. While the procedural infirmity cannot
be cured, it should not invalidate the dismissal. However, the employer
should be held liable for non-compliance with the procedural
requirements of due process.

Same; Same; Same; Same; The fact that the employee may not be
residing in the address indicated in the employer’s records does
not excuse the employer from sending the notices to the
employee’s last known address.—The present case squarely falls
under the fourth situation. The dismissal should be upheld because it
was established that the petitioners abandoned their jobs to work for
another company. Private respondent, however, did not follow the
notice requirements and instead argued that sending notices to the last
known addresses would have been useless because they did not reside
there anymore. Unfortunately for the private respondent, this is not a
valid excuse because the law mandates the twin notice requirements to
the employee’s last known address. Thus, it should be held liable for
non-compliance with the procedural requirements of due process.

Same; Same; Same; Same; The Court believes that the ruling in
Serrano v. National Labor Relations Commission, 323 SCRA 445
(2000), did not consider the full meaning of Article 279 of the
Labor Code which provision means that the termination is illegal
only if it is not for any of the justified or authorized causes
provided by law and that payment of backwages and other benefits,
including reinstatement, is justified only if the employee was
unjustly dismissed; The fact that the Serrano ruling can cause
unfairness and injustice which elicited strong dissent has
prompted the Court to revisit the doctrine.—The rationale for the
re-examination of the Wenphil doctrine in Serrano was the significant
number of cases involving dismissals without requisite notices. We
 concluded that the imposition of penalty by way of damages for
violation of the notice requirement was not serving as a deterrent.
Hence, we now required payment of full backwages from the time of
dismissal until the time the Court finds the dismissal was for a just or
authorized cause. Serrano was confronting the practice of employers to
“dismiss now and pay later” by imposing full backwages. We believe,
however, that the ruling in Serrano did not consider the full meaning
of Article 279 of the Labor Code which states: ART. 279. Security of
Tenure.—In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when
authorized by this Title. 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. This means that the termination is illegal only if
it is not for any of the justified or authorized causes provided by law.
Payment of backwages and other benefits, including reinstatement, is
justified only if the employee was unjustly dismissed. The fact that the
Serrano ruling can cause unfairness and injustice which elicited strong
dissent has prompted us to revisit the doctrine.

Same; Same; Same; Constitutional Law; The Due Process Clause in

Article III, Section 1 of the Constitution embodies a system of rights
based on moral principles so deeply imbedded in the traditions and
feelings of our people as to be deemed fundamental to a civilized
society as conceived by our entire history.—To be sure, the Due Process
Clause in Article III, Section 1 of the Constitution embodies a system of
rights based on moral principles so deeply imbedded in the traditions and
feelings of our people as to be deemed fundamental to a civilized society
as conceived by our entire history. Due process is that which comports
with the deepest notions of what is fair and right and just. It is a
constitutional restraint on the legislative as well as on the executive and
judicial powers of the government provided by the Bill of Rights.

Same; Same; Same; Same; Statutory due process should be

differentiated from failure to comply with constitutional due
process—constitutional due process protects the individual from the
government and assures him of his rights in criminal, civil or
administrative proceedings while statutory due process found in the
Labor Code and Implementing Rules protects employees from being
unjustly terminated without just cause after notice and hearing.—Due
process under the Labor Code, like Constitutional due process, has two
aspects: substantive, i.e., the valid and authorized causes of employment
termination under the Labor Code; and procedural, i.e., the manner of
dismissal. Procedural due process requirements for dismissal are found in
the Implementing Rules of P.D. 442, as amended, otherwise known as the
Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by
Department Order Nos. 9 and 10. Breaches of these due process
requirements violate the Labor Code. Therefore statutory due process
should be differentiated from failure to comply with constitutional due
process. Constitutional due process protects the individual from the
government and assures him of his rights in criminal, civil or
administrative proceedings; while statutory due process found in the
Labor Code and Implementing Rules protects employees from being
unjustly terminated without just cause after notice and hearing.

Same; Same; Same; The better rule is to abandon the Serrano doctrine
and to follow Wenphil v. National Labor Relations Commission, 170
SCRA 69 (1989), by holding that the dismissal was for just cause but
imposing sanctions on the employer, which sanctions, however, must
be stiffer than that imposed in Wenphil.—After carefully analyzing the
consequences of the divergent doctrines in the law on employment
termination, we believe that in cases involving dismissals for cause but
without observance of the twin requirements of notice and hearing, the
better rule is to abandon the Serrano doctrine and to follow Wenphil by
holding that the dismissal was for just cause but imposing sanctions on
the employer. Such sanctions, however, must be stiffer than that imposed
in Wenphil. By doing so, this Court would be able to achieve a fair result
by dispensing justice not just to employees, but to employers as well.

Same; Same; Same; The constitutional policy to provide full

protection to labor is not meant to be a sword to oppress
employers—the commitment of this Court to the cause of labor
does not prevent it from sustaining the employer when it is in the
right.—The unfairness of declaring illegal or ineffectual dismissals for
valid or authorized causes but not complying with statutory due
process may have far-reaching consequences. This would encourage
frivolous suits, where even the most notorious violators of company
policy are rewarded by invoking due process. This also creates absurd
situations where there is a just or authorized cause for dismissal but a
procedural infirmity invalidates the termination. Let us take for
example a case where the employee is caught stealing or threatens the
lives of his co-employees or has become a criminal, who has fled and
cannot be found, or where serious business losses demand that
operations be ceased in less than a month. Invalidating the dismissal
would not serve public interest. It could also discourage investments
that can generate employment in the local economy. The constitutional
policy to provide full protection to labor is not meant to be a sword to
oppress employers. The commitment of this Court to the cause of labor
does not prevent us from sustaining the employer when it is in the right,
as in this case. Certainly, an employer should not be compelled to pay
employees for work not actually performed and in fact abandoned. The
employer should not be compelled to continue employing a person who
is admittedly guilty of misfeasance or malfeasance and whose
continued employment is patently inimical to the employer. The law
protecting the rights of the laborer authorizes neither oppression nor
self-destruction of the employer.

Same; Same; Social Justice; An employee who is clearly guilty of

conduct violative of Article 282 should not be protected by the
Social Justice Clause of the Constitution—social justice must be
founded on the recognition of the necessity of interdependence among
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; Social justice is not based on rigid formulas set in stone—
it has to allow for changing times and circumstances.—An employee
who is clearly guilty of conduct violative of Article 282 should not be
protected by the Social Justice Clause of the Constitution. Social
justice, as the term suggests, should be used only to correct an
injustice. As the eminent Justice Jose P. Laurel observed, social justice
must be founded on the recognition of the necessity of interdependence
among 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.” This is not to say that the Court was wrong when it
ruled the way it did in Wenphil, Serrano and related cases. Social
justice is not based on rigid formulas set in stone. It has to allow for
changing times and circumstances.

Same; Same; Due Process; The violation of an employee’s right to

statutory due process by the employer warrants the payment of
indemnity in the form of nominal damages, the amount of which
is addressed to the sound discretion of the court, taking into
account the relevant circumstances.—The violation of the
petitioners’ right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages.
The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances. Considering
the prevailing circumstances in the case at bar, we deem it proper to
fix it at P30,000.00. We believe this form of damages would serve to
deter employers from future violations of the statutory due process
rights of employees. At the very least, it provides a vindication or
recognition of this fundamental right granted to the latter under the
Labor Code and its Implementing Rules.

Same; Evidence; Payment; Burden of Proof; As a general rule, one

who pleads payment has the burden of proving it—even where the
employee must allege non-payment, the general rule is that the
burden rests on the employer to prove payment, rather than on
the employee to prove non-payment.—We affirm the ruling of the
appellate court on petitioners’ money claims. Private respondent is
liable for petitioners’ holiday pay, service incentive leave pay and 13th
month pay without deductions. As a general rule, one who pleads
payment has the burden of proving it. Even where the employee must
allege non-payment, the general rule is that the burden rests on the
employer to prove payment, rather than on the employee to prove non-
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.

Same; Wages; Thirteenth Month Pay; The 13th month pay is

included in the definition of wage under Article 97(f) of the Labor
Code from which the employer is prohibited under Article 113 from
making any deductions without the employee’s knowledge and
consent.—Anent the deduction of SSS loan and the value of the shoes
from petitioner Virgilio Agabon’s 13th month pay, we find the same to
be unauthorized. The evident intention of Presidential Decree No. 851
is to grant an additional income in the form of the 13th month pay to
employees not already receiving the same so as “to further protect the
level of real wages from the ravages of world-wide inflation.” Clearly, as
additional income, the 13th month pay is included in the definition of
wage under Article 97(f) of the Labor Code, to wit: (f) “Wage” paid to any
employee shall mean the 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 services rendered or to be rendered and
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 . . .” from which an employer is prohibited
under Article 113 of the same Code from making any deductions
without the employee’s knowledge and consent. In the instant case,
private respondent failed to show that the deduction of the SSS loan
and the value of the shoes from petitioner Virgilio Agabon’s 13th month
 pay was authorized by the latter. The lack of authority to deduct is
further bolstered by the fact that petitioner Virgilio Agabon included
the same as one of his money claims against private respondent

RETROACTIVE APPLICATIN OF AGABON DOCTRINE

A. G.R. No. 164662

February 18, 2013
MARIA LOURDES C. DE JESUS, vs. HON. RAUL T. AQUINO,
PRESIDING COMMISSIONER, NATIONAL LABOR RELATIONS
COMMISSION, SECOND DIVISION, QUEZON CITY, and
SUPERSONIC SERVICES, INC.

G.R. No. 165787

February 18, 2013

SUPERSONIC SERVICES, INC., vs. MARIA LOURDES C. DE JESUS

Statutory Construction; Judicial Interpretation; As a rule, a judicial

interpretation becomes a part of the law as of the date that the law
was originally passed, subject only to the qualification that when
a doctrine of the Court is overruled and the Court adopts a
different view, and more so when there is a reversal of the doctrine,
the new doctrine should be applied prospectively and should not
apply to parties who relied on the old doctrine and acted in good
faith.—The CA did not err. Relying on Serrano, the CA precisely ruled
that the violation by Supersonic of the two-written notice requirement
rendered ineffectual the dismissal of De Jesus for just cause under
Article 282 of the Labor Code, and entitled her to be paid full backwages
from the time of her dismissal until the finality of its decision. The Court
cannot ignore that the applicable case law when the CA promulgated
its decision on July 23, 2004, and when it denied Supersonic’s motion
for reconsideration on October 21, 2004 was still Serrano. Considering
that the Court determines in this appeal by petition for review on
certiorari only whether or not the CA committed an error of law in
promulgating its assailed decision of July 23, 2004, the CA cannot be
declared to have erred on the basis of Serrano being meanwhile
abandoned through Agabon if all that the CA did was to fully apply the
law and jurisprudence applicable at the time of its rendition of the
 judgment. As a rule, a judicial interpretation becomes a part of the law
as of the date that the law was originally passed, subject only to the
qualification that when a doctrine of the Court is overruled and the
Court adopts a different view, and more so when there is a reversal of
the doctrine, the new doctrine should be applied prospectively and
should not apply to parties who relied on the old doctrine and acted in
good faith. To hold otherwise would be to deprive the law of its quality
of fairness and justice, for, then, there is no recognition of what had
transpired prior to such adjudication.

Labor Law; Agabon Doctrine; Under Agabon, the new doctrine is

that the failure of the employer to observe the requirements of due
process in favor of the dismissed employee (that is, the two-written
notices rule) should not invalidate or render ineffectual the
dismissal for just or authorized cause.—Although Agabon, being
promulgated only on November 17, 2004, ought to be prospective, not
retroactive, in its operation because its language did not expressly state
that it would also operate retroactively, the Court has already deemed
it to be the wise judicial course to let its abandonment of Serrano be
retroactive as its means of giving effect to its recognition of the
unfairness of declaring illegal or ineffectual dismissals for valid or
authorized causes but not complying with statutory due process. Under
Agabon, the new doctrine is that the failure of the employer to observe
the requirements of due process in favor of the dismissed employee
(that is, the two-written notices rule) should not invalidate or render
ineffectual the dismissal for just or authorized cause. The Agabon Court
plainly saw the likelihood of Serrano producing unfair but far-reaching
consequences, such as, but not limited to, encouraging frivolous suits
where even the most notorious violators of company policies would be
rewarded by invoking due process; to having the constitutional policy
of providing protection to labor be used as a sword to oppress the
employers; and to compelling the employers to continue employing
persons who were admittedly guilty of misfeasance or malfeasance and
whose continued employment would be patently inimical to the interest
of employers.

EFFECT OF REVERSAL OF EXECUTED JUDGMENT

A. G.R. No. 202791

June 10, 2013
PHILIPPINE TRANSMARINE CARRIERS, INC., vs. LEANDRO LEGASPI
Labor Law; Certiorari; In St. Martin Funeral Home v. National Labor
Relations Commission, 295 SCRA 494 (1998), it was ruled that
judicial review of decisions of the National Labor Relations
Commission (NLRC) may be sought via a petition for certiorari before
the Court of Appeals under Rule 65 of the Rules of Court; and under
Section 4 thereof, petitioners are allowed sixty (60) days from notice
of the assailed order or resolution within which to file the petition.—
Section 14, Rule VII of the 2011 NLRC Rules of Procedure provides that
decisions, resolutions or orders of the NLRC shall become final and
executory after ten (10) calendar days from receipt thereof by the parties,
and entry of judgment shall be made upon the expiration of the said
period. In St. Martin Funeral Home v. NLRC, 295 SCRA 494 (1998),
however, it was ruled that judicial review of decisions of the NLRC may be
sought via a petition for certiorari before the CA under Rule 65 of the Rules
of Court; and under Section 4 thereof,

petitioners are allowed sixty (60) days from notice of the assailed order or
resolution within which to file the petition. Hence, in cases where a petition
for certiorari is filed after the expiration of the 10-day period under the
2011 NLRC Rules of Procedure but within the 60-day period under Rule
65 of the Rules of Court, the CA can grant the petition and modify, nullify
and reverse a decision or resolution of the NLRC.

Civil Law; Contracts; As the agreement was voluntarily entered into

and represented a reasonable settlement, it is binding on the parties
and may not later be disowned simply because of a change of mind.—
As the agreement was voluntarily entered into and represented a
reasonable settlement, it is binding on the parties and may not later be
disowned simply because of a change of mind. Respondent agreed to the
stipulation that he would return the amount paid to him in the event that
the petition for certiorari would be granted. Since the petition was indeed
granted by the CA, albeit partially, respondent must comply with the
condition to return the excess amount.

Human Relations; Unjust Enrichment; Words and Phrases; Unjust

enrichment is a term used to depict result or effect of failure to make
remuneration of or for property or benefits received under
circumstances that give rise to legal or equitable obligation to
account for them.—Unjust enrichment is a term used to depict result or
effect of failure to make remuneration of or for property or benefits received
under circumstances that give rise to legal or equitable obligation to
account for them. To be entitled to remuneration, one must confer benefit
 by mistake, fraud, coercion, or request. Unjust enrichment is not itself a
theory of reconveyance. Rather, it is a prerequisite for the enforcement of
the doctrine of restitution. There is unjust enrichment when: 1. A person
is unjustly benefited; and 2. Such benefit is derived at the expense of or
with damages to another.

VALIDITY OF RELEASE AND QUITCLAIM

A. G.R. No. 198662

September 12, 2012
RADIO MINDANAO NETWORK, INC. and ERIC S. CANOY, vs.
DOMINGO Z. YBAROLA, JR. and ALFONSO E. RIVERA, JR.,

Labor Law; Quitclaims; The separation pay the respondents each

received was deficient by at least P400,000.00; thus, they were
given only half of the amount they were legally entitled to. To be
sure, a settlement under these terms is not and cannot be a
reasonable one, given especially the respondents’ length of
service―25 years for Ybarola and 19 years for Rivera.―In Talam, the
employee received a valuable consideration for his less than two years
of service with the company; he was not shortchanged and no essential
unfairness took place. In this case, as the CA noted, the separation pay
the respondents each received was deficient by at least P400,000.00;
thus, they were given only half of the amount they were legally entitled
to. To be sure, a settlement under these terms is not and cannot be a
reasonable one, given especially the respondents’ length of service―25
years for Ybarola and 19 years for Rivera. The CA was correct when it
opined that the respondents were in dire straits when they executed the
release/quitclaim affidavits. Without jobs and with families to support,
they dallied in executing the quitclaim instrument, but were eventually
forced to sign given their circumstances.

B. G.R. No. 197528

September 5, 2012
PERT/CPM MANPOWER EXPONENT CO., INC., , vs. ARMANDO A.
VINUYA, LOUIE M. ORDOVEZ, ARSENIO S. LUMANTA, JR.,
ROBELITO S. ANIPAN, VIRGILIO R. ALCANTARA, MARINO M. ERA,
SANDY O. ENJAMBRE and NOEL T. LADEA,.

Labor Law; Illegal Recruitment; Words and Phrases; Article 38 of

the Labor Code, as amended by R.A. 8042, defined “illegal
recruitment” to include the following act: To substitute or alter to
the prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of the
Department of Labor and Employment.—Clearly, the agency and
Modern Metal committed a prohibited practice and engaged in illegal
recruitment under the law. Article 34 of the Labor Code provides: Art.
34. Prohibited Practices. It shall be unlawful for any individual, entity,
licensee, or holder of authority: x x x x (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 periods of expiration of the same without the approval of the
Secretary of Labor[.] Further, Article 38 of the Labor Code, as amended
by R.A. 8042, defined “illegal recruitment” to include the following act:
(i) To substitute or alter to the prejudice of the worker, employment
contracts approved and verified by the Department of Labor and
Employment from the time of actual signing thereof by the parties up to
and including the period of the expiration of the same without the
approval of the Department of Labor and Employment[.]

Same; Termination of Employment; Constructive Dismissal; A

constructive dismissal or discharge is a quitting because continued
employment is rendered impossible, unreasonable or unlikely, as,
an offer involving a demotion in rank and a diminution in pay.—
With their original contracts substituted and their oppressive working
and living conditions unmitigated or unresolved, the respondents’
decision to resign is not surprising. They were compelled by the dismal
state of their employment to give up their jobs; effectively, they were
constructively dismissed. A constructive dismissal or discharge is “a
quitting because continued employment is rendered impossible,
unreasonable or unlikely, as, an offer involving a demotion in rank and
a diminution in pay.”

Statutory Construction; Retroactivity of Laws; Laws shall have no

retroactive effect, unless the contrary is provided.—Laws shall have
no retroactive effect, unless the contrary is provided. By its very nature,
the amendment introduced by R.A. 10022—restoring a provision of R.A.
8042 declared unconstitutional—cannot be given retroactive effect, not
only because there is no express declaration of retroactivity in the law,
but because retroactive application will result in an impairment of a
right that had accrued to the respondents by virtue of the Serrano
 ruling—entitlement to their salaries for the unexpired portion of their
employment contracts.

C. G.R. No. 193493

June 13, 2013
JAIME N. GAPAYAO, vs. ROSARIO FULO, SOCIAL SECURITY
SYSTEM and SOCIAL SECURITY COMMISSION.

Remedial Law; Civil Procedure; Appeals; Findings of fact of

administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect but finality when
affirmed by the Court of Appeals.―At the outset, it is settled that the
Court is not a trier of facts and will not weigh evidence all over again.
Findings of fact of administrative agencies and quasi-judicial bodies,
which have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect but finality
when affirmed by the CA. For as long as these findings are supported by
substantial evidence, they must be upheld.

Labor Law; Regular Employees; Project Employees; Casual

Employees; Jurisprudence has identified the three types of
employees mentioned in Article 280 of the Labor
Code.―Jurisprudence has identified the three types of employees
mentioned in the provision: (1) regular employees or those who have
been engaged to perform activities that are usually necessary or
desirable in the usual business or trade of the employer; (2) project
employees or those whose employment has been fixed for a specific
project or undertaking, the completion or termination of which has been
determined at the time of their engagement, or those whose work or
service is seasonal in nature and is performed for the duration of the
season; and (3) casual employees or those who are neither regular nor
project employees.

Same; Same; For regular employees to be considered as such, the

primary standard used is the reasonable connection between the
particular activity they perform and the usual trade or business of
the employer.―Farm workers generally fall under the definition of
seasonal employees. We have consistently held that seasonal employees
may be considered as regular employees. Regular seasonal employees
are those called to work from time to time. The nature of their
relationship with the employer is such that during the off season, they
are temporarily laid off; but reemployed during the summer season or
when their services may be needed. They are in regular employment
because of the nature of their job, and not because of the length of time
they have worked. The rule, however, is not absolute. In Hacienda
Fatima v. National Federation of Sugarcane Workers-Food & General
Trade, 396 SCRA 518 (2003), the Court held that seasonal workers who
have worked for one season only may not be considered regular
employees. Similarly, in Mercado, Sr. v. NLRC, 201 SCRA 332 (1991), it
was held that when seasonal employees are free to contract their
services with other farm owners, then the former are not regular
employees. For regular employees to be considered as such, the primary
standard used is the reasonable connection between the particular
activity they perform and the usual trade or business of the employer.
This test has been explained thoroughly in De Leon v. NLRC, 176 SCRA
615 (1989), viz.: The primary standard, therefore, of determining a
regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or
trade of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer.
The connection can be determined by considering the nature of the work
performed and its relation to the scheme of the particular business or
trade in its entirety. Also if the employee has been performing the job
for at least one year, even if the performance is not continuous or merely
intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment
is also considered regular, but only with respect to such activity and
while such activity exists.

Same; Pakyaw Workers; Words and Phrases; Control Test; Pakyaw

workers are considered employees for as long as their employers
exercise control over them.―Pakyaw workers are considered
employees for as long as their employers exercise control over them. In
Legend Hotel Manila v. Realuyo, 677 SCRA 10 (2012), the Court held
that “the power of the employer to control the work of the employee is
considered the most significant determinant of the existence of an
employer-employee relationship. This is the so-called control test and is
premised on whether the person for whom the services are performed
reserves the right to control both the end achieved and the manner and
means used to achieve that end.” It should be remembered that the
control test merely calls for the existence of the right to control, and not
necessarily the exercise thereof. It is not essential that the employer
 actually supervises the performance of duties by the employee. It is
enough that the former has a right to wield the power.

D. G.R. No. 167225

October 22, 2014
RADIO MINDANAO NETWORK, INC., vs. MICHAEL MAXIMO R.
AMURAO III.

Remedial Law; Civil Procedure; Appeals; Petition for Review on

Certiorari; Question of Fact; The Supreme Court (SC) recognizes
that the issue concerning the validity of the quitclaim was a
question of fact that is not within the province of a review on
certiorari under Rule 45.—This Court recognizes that the issue
concerning the validity of the quitclaim was a question of fact that is not
within the province of a review on certiorari under Rule 45. However,
there is reason to hold that the CA manifestly overlooked certain
relevant and undisputed facts that, if properly considered, would justify
a different conclusion herein. On that basis, the Court has to delve into
the factual issue, and has to review the evidence again to ensure that
its ruling on the issue jibes with the evidence on record. Its doing so is
an acceptable exception to the general rule of non-review of factual
matters.

Labor Law; Quitclaims; A quitclaim is invalid or contrary to public

policy only: (1) where there is clear proof that the waiver was
wrangled from an unsuspecting or gullible person; or (2) where the
terms of settlement are unconscionable on their face.—Not all
quitclaims are per se invalid or against public policy. A quitclaim is
invalid or contrary to public policy only: (1) where there is clear proof
that the waiver was wrangled from an unsuspecting or gullible person;
or (2) where the terms of settlement are unconscionable on their face. In
instances of invalid quitclaims, the law steps in to annul the
questionable waiver. Indeed, there are legitimate waivers that represent
the voluntary and reasonable settlements of laborers’ claims that should
be respected by the Court as the law between the parties. Where the
party has voluntarily made the waiver, with a full understanding of its
terms as well as its consequences, and the consideration for the
quitclaim is credible and reasonable, the transaction must be recognized
as a valid and binding undertaking, and may not later be disowned
simply because of a change of mind. A waiver is essentially contractual.
 Same; Same; The quitclaim is ineffective in barring recovery of the
full measure of an employee’s rights only when the transaction is
shown to be questionable and the consideration is scandalously low
and inequitable.—With the quitclaim having been freely and voluntarily
signed, RMN was released and absolved from any liability in favor of
Michael. Suffice it to say that the quitclaim is ineffective in barring
recovery of the full measure of an employee’s rights only when the
transaction is shown to be questionable and the consideration is
scandalously low and inequitable. Such is not true here.

E. G.R. No. 173012

June 13, 2012
DOLORES T. ESGUERRA, petitioner, vs. VALLE VERDE COUNTRY
CLUB, INC. and ERNESTO VILLALUNA, respondents.

Labor Law; Termination of Employment; Under the Labor Code, the

requirements for the lawful dismissal of an employee are two-fold:
the substantive and the procedural aspects.—Under the Labor Code,
the requirements for the lawful dismissal of an employee are two-fold[:]
the substantive and the procedural aspects. Not only must the dismissal
be for a just or authorized cause, the rudimentary requirements of due
process—notice and hearing—must, likewise, be observed x x x.
Without the concurrence of the two, the termination would x x x be
illegal[;] employment is a property right of which one cannot be deprived
of without due process.

Same; Same; Right to be Heard; The existence of an actual, formal

“trial-type” hearing, although preferred, is not absolutely necessary
to satisfy the employee’s right to be heard.—In sum, the existence of
an actual, formal “trial-type” hearing, although preferred, is not
absolutely necessary to satisfy the employee’s right to be heard.
Esguerra was able to present her defenses; and only upon proper
consideration of it did Valle Verde send the second memorandum
terminating her employment. Since Valle Verde complied with the two-
notice requirement, no procedural defect exists in Esguerra’s
termination.

Same; Same; Loss of Trust and Confidence; In Jardine Davies, Inc.

v. National Labor Relations Commission, 311 SCRA 289 (1999), we
held that loss of confidence as a just cause for termination of
employment can be invoked when an employee holds a position of
responsibility, trust and confidence.—In Jardine Davies, Inc. v.
 National Labor Relations Commission, 311 SCRA 289 (1999), we held
that loss of confidence as a just cause for termination of employment
can be invoked when an employee holds a position of responsibility,
trust and confidence. In order to constitute a just cause for dismissal,
the act complained of must be related to the performance of the duties
of the dismissed employee and must show that he or she is unfit to
continue working for the employer for violation of the trust reposed in
him or her.

F. G.R. No. 185335

June 13, 2012
PRUDENTIAL GUARANTEE AND ASSURANCE EMPLOYEE LABOR
UNION and SANDY T. VALLOTA, vs. NATIONAL LABOR RELATIONS
COMMISSION, PRUDENTIAL GUARANTEE AND ASSURANCE INC.,
and/or JOCELYN RETIZOS.

Labor Law; Termination of Employment; Loss of Trust and

Confidence; To be a valid ground for dismissal, loss of trust and
confidence must be based on a willful breach of trust and founded
on learly established facts; A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse,
as distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently.—To be a valid ground for dismissal, loss
of trust and confidence must be based on a willful breach of trust and
founded on clearly established facts. A breach is willful if it is done
intentionally, knowingly and purposely, without justifiable excuse, as
distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial grounds and not on the
employer’s arbitrariness, whims, caprices or suspicion; otherwise, the
employee would remain eternally at the mercy of the employer. Further,
in order to constitute a just cause for dismissal, the act complained of
must be work-related and show that the employee concerned is unfit to
continue working for the employer. Such ground for dismissal has never
been intended to afford an occasion for abuse because of its subjective
nature.

Same; Same; Illegal Dismissals; In illegal dismissal cases, the burden

of proof is upon the employer to show by substantial evidence that
the employee’s termination from service is for a just and valid
cause.—It must also be remembered that in illegal dismissal cases like
the one at bench, the burden of proof is upon the employer to show that
the employee’s termination from service is for a just and valid cause.
 The employer’s case succeeds or fails on the strength of its evidence and
not the weakness of that adduced by the employee, in keeping with the
principle that the scales of justice should be tilted in favor of the latter
in case of doubt in the evidence presented by them. Often described as
more than a mere scintilla, the quantum of proof is substantial evidence
which is understood as such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other equally
reasonable minds might conceivably opine otherwise. Failure of the
employer to discharge the foregoing onus would mean that the dismissal
is not justified and, therefore, illegal.

Same; Same; When the act complained of is not so grave as to result

in a complete loss of trust and confidence, a lower penalty such as
censure, warning, or even suspension, would be more
circumspect.—Termination of employment is a drastic measure
reserved for the most serious of offenses. When the act complained of is
not so grave as to result in a complete loss of trust and confidence, a
lower penalty such as censure, warning, or even suspension, would be
more circumspect. This is of particular significance here where during
Vallota’s ten years of service to PGAI, not once was he ever warned or
reprimanded for such printing services.

Same; Same; Strained Relations; Reinstatement; Backwages; Where

reinstatement is no longer viable as an option, separation pay
equivalent to one (1) month salary for every year of service should
be awarded as an alternative; An illegally dismissed employee is
entitled to two reliefs: backwages and reinstatement, which are
separate and distinct.—In view of the strained relations between
Vallota and PGAI, however, it is not in the best interest of the parties,
nor is it advisable or practical to order reinstatement. Where
reinstatement is no longer viable as an option, separation pay equivalent
to one (1) month salary for every year of service should be awarded as
an alternative. It must be stressed, however, that an illegally dismissed
employee is entitled to two reliefs: backwages and reinstatement, which
are separate and distinct.

G. G.R. No. 174893

July 11, 2012
FLORDELIZA MARIA REYES-RAYEL, vs. PHILIPPINE LUEN THAI
HOLDINGS, CORPORATION/L&T INTERNATIONAL GROUP
PHILIPPINES, INC.
Labor Law; Termination of Employment; Loss of Trust and
Confidence; Managerial Employees; As distinguished from a rank
and file personnel, mere existence of a basis for believing that a
managerial employee has breached the trust of the employer
justifies dismissal.—Jurisprudence provides that an employer has a
distinct prerogative and wider latitude of discretion in dismissing a
managerial personnel who performs functions which by their nature
require the employer’s full trust and confidence. As distinguished from
a rank and file personnel, mere existence of a basis for believing that a
managerial employee has breached the trust of the employer justifies
dismissal. “[L]oss of confidence as a ground for dismissal does not
require proof beyond reasonable doubt as the law requires only that
there be at least some basis to justify it.”

Same; Same; Management Prerogative; An employer has the right to

regulate, according to its discretion and best judgment, all aspects
of employment, including work assignment, working methods,
processes to be followed, working regulations, transfer of
employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers.—An employer “has the right to
regulate, according to its discretion and best judgment, all aspects of
employment, including work assignment, working methods, processes
to be followed, working regulations, transfer of employees, work
supervision, lay-off of workers and the discipline, dismissal and recall
of workers.” “[S]o long as they 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,” the exercise of this management
prerogative must be upheld.

Same; Due Process; The Supreme Court pronounced that an

employee may be afforded ample opportunity to be heard by means
of any method, verbal or written, whether in a hearing, conference
or some other fair, just and reasonable way.—Neither can there be
any denial of due process due to the absence of a hearing or
investigation at the company level. It has been held in a plethora of cases
that due process requirement is met when there is simply an
opportunity to be heard and to explain one’s side even if no hearing is
conducted. In the case of Perez v. Philippine Telegraph and Telephone
Company, 584 SCRA 110 (2009), this Court pronounced that an
employee may be afforded ample opportunity to be heard by means of
 any method, verbal or written, whether in a hearing, conference or some
other fair, just and reasonable way.

H. G.R. No. 193789

September 19, 2012
ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ,
ROSEMARIE P. PIMENTEL, and ROWENA B. BARDAJE, vs.
BIOMEDICA HEALTH CARE, INC. and CARINA “KAREN” J. MOTOL.

Labor Law; Termination of Employment; 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.―It bears pointing out that in the dismissal of an employee, the
law requires that due process be observed. Such due process
requirement is two-fold, procedural and substantive, that is, “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.” In the instant case, petitioners were not afforded both
procedural and substantive due process.

Same; Same; Petitioners were charged with conducting an illegal

strike, not a mass leave, without specifying the exact acts that the
company considers as constituting an illegal strike or violative of
company policies. Such allegation falls short of the requirement in
King of Kings Transport, Inc. of “a detailed narration of the facts
and circumstances that will serve as basis for the charge against
the employees.”―Petitioners were charged with conducting an illegal
strike, not a mass leave, without specifying the exact acts that the
company considers as constituting an illegal strike or violative of
company policies. Such allegation falls short of the requirement in King
of Kings Transport, Inc. of “a detailed narration of the facts and
circumstances that will serve as basis for the charge against the
employees.” A bare mention of an “illegal strike” will not suffice.

Same; Same; It is incumbent upon respondent company to show

that petitioners were duly informed of said company policies at the
time of their employment and were given copies of these
policies.―It is incumbent upon respondent company to show that
petitioners were duly informed of said company policies at the time of
their employment and were given copies of these policies. No such proof
was presented by respondents. There was even no mention at all that
such requirement was met. Worse, respondent Biomedica did not even
quote or reproduce the company policies referred to in the notice as
pointed out by the CA stating: It must be noted that the company policy
which the petitioner was referring to was not quoted or reproduced in
the petition, a copy of which is not also appended in the petition, as
such we cannot determine the veracity of the existence of said policy.
Without a copy of the company policy being presented in the CA or the
contents of the pertinent policies being quoted in the pleadings, there is
no way by which one can determine whether or not there was, indeed, a
violation of said company policies.

Same; Same; Serious Misconduct; To justify the dismissal of an

employee on the ground of serious misconduct, the employer must
first establish that the employee is guilty of improper conduct, that
the employee violated an existing and valid company rule or
regulation, or that the employee is guilty of a wrongdoing.―Clearly,
to justify the dismissal of an employee on the ground of serious
misconduct, the employer must first establish that the employee is
guilty of improper conduct, that the employee violated an existing and
valid company rule or regulation, or that the employee is guilty of a
wrongdoing. In the instant case, Biomedica failed to even establish that
petitioners indeed violated company rules, failing to even present a copy
of the rules and to prove that petitioners were made aware of such
regulations. In fact, from the records of the case, Biomedica has failed
to prove that petitioners are guilty of a wrongdoing that is punishable
with termination from employment.

Same; Same; Mass Leave; Words and Phrases; The phrase “mass
leave” may refer to a simultaneous availment of authorized leave
benefits by a large number of employees in a company.―The term
“Mass Leave” has been left undefined by the Labor Code. Plainly, the
legislature intended that the term’s ordinary sense be used. “Mass” is
defined as “participated in, attended by, or affecting a large number of
individuals; having a large-scale character.” While the term “Leave” is
defined as “an authorized absence or vacation from duty or employment
usually with pay.” Thus, the phrase “mass leave” may refer to a
simultaneous availment of authorized leave benefits by a large number
of employees in a company.

Same; Same; Same; It is undeniable that going on leave or absenting

one’s self from work for personal reasons when they have leave
benefits available is an employee’s right.―It is undeniable that going
on leave or absenting one’s self from work for personal reasons when
they have leave benefits available is an employee’s right. In Davao
Integrated Port Stevedoring Services v. Abarquez, 220 SCRA 197 (1993),
the Court acknowledged sick leave benefits as a legitimate economic
benefit of an employee, carrying a purpose that is at once legal as it is
practical: Sick leave benefits, like other economic benefits stipulated in
the CBA such as maternity leave and vacation leave benefits, among
others, are by their nature, intended to be replacements for regular
income which otherwise would not be earned because an employee is
not working during the period of said leaves. They are non-contributory
in nature, in the sense that the employees contribute nothing to the
operation of the benefits. By their nature, upon agreement of the parties,
they are intended to alleviate the economic condition of the workers. In
addition to sick leave, the company, as a policy or practice or as agreed
to in a CBA, grants vacation leave to employees. Lastly, even the Labor
Code grants a service incentive leave of 5 days to employees.

Same; Same; In case of doubt, a case should be resolved in favor of

labor pursuant to the social justice policy of labor laws and the
Constitution.―It cannot be overemphasized that in case of doubt, a
case should be resolved in favor of labor. As aptly stated in Century
Canning Corporation v. Ramil, 627 SCRA 192 (2010): x x x
Unsubstantiated suspicions, accusations, and conclusions of employers
do not provide for legal justification for dismissing employees. In case of
doubt, such cases should be resolved in favor of labor, pursuant to the
social justice policy of labor laws and the Constitution. Biomedica has
failed to adduce substantial evidence to prove that petitioners’ dismissal
from their employment was for a just or authorized cause. The
conclusion is inescapable that petitioners were illegally dismissed.

Same; Same; An ordinary striking worker cannot be terminated for

mere participation in an illegal strike.―It has not been shown that
petitioners are officers of the Union. On this issue, the NLRC correctly
cited Gold City Integrated Port Service, Inc. v. NLRC, 245 SCRA 627
(1995), wherein We ruled that: “An ordinary striking worker cannot be
terminated for mere participation in an illegal

Same; Same; Reinstatement; Backwages; Given the illegality of their

dismissal, petitioners are entitled to reinstatement and backwages
as provided in Article 279 of the Labor Code.―Given the illegality of
their dismissal, petitioners are entitled to reinstatement and backwages
as provided in Art. 279 of the Labor Code, which states: 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.

Same; Same; Separation Pay; Strained Relationship Doctrine;

Petitioners were terminated in swift fashion and in gross violation
of their right to due process revealing that they are no longer
wanted in the company. The convergence of these facts coupled
with the filing by petitioners of their complaint with the
Department of Labor and Employment (DOLE) shows a relationship
governed by antipathy and antagonism as to justify the award of
separation pay in lieu of reinstatement.―Respondent Motol, in the
course of denying entry to them on November 8, 2006, uttered harsh,
degrading and bad words. Petitioners were terminated in swift fashion
and in gross violation of their right to due process revealing that they
are no longer wanted in the company. The convergence of these facts
coupled with the filing by petitioners of their complaint with the DOLE
shows a relationship governed by antipathy and antagonism as to justify
the award of separation pay in lieu of reinstatement. Thus, in addition
to backwages, owing to the strained relations between the parties,
separation pay in lieu of reinstatement would be proper.

NOTICE OD INTENTION TO TERMINATE EMPLOYMENT

A. G.R. No. 185280

January 18, 2012
TIMOTEO H. SARONA, vs. NATIONAL LABOR RELATIONS
COMMISSION, ROYALE SECURITY AGENCY (FORMERLY SCEPTRE
SECURITY AGENCY) and CESAR S. TAN,

Labor Law; Money Claims; The prevailing party’s receipt of the full
amount of the judgment award pursuant to a writ of execution
issued by the labor arbiter does not close or terminate the case if
such receipt is qualified as without prejudice to the outcome of
the petition for certiorari pending with the Court of Appeals (CA).—
The petitioner’s receipt of the monetary award adjudicated by the NLRC
is not absolute, unconditional and unqualified. The petitioner’s May 3,
2007 Motion for Release contains a reservation, stating in his prayer
that: “it is respectfully prayed that the respondents and/or Great
Domestic Insurance Co. be ordered to RELEASE/GIVE the amount of
P23,521.67 in favor of the complainant TIMOTEO H. SARONA without
prejudice to the outcome of the petition with the CA.” In Leonis
Navigation Co., Inc., et al. v. Villamater, et al., 614 SCRA 182 (2010),
this Court ruled that the prevailing party’s receipt of the full amount of
the judgment award pursuant to a writ of execution issued by the labor
arbiter does not close or terminate the case if such receipt is qualified
as without prejudice to the outcome of the petition for certiorari
pending with the CA.

Same; The finality of the National Labor Relations Commission’s

(NLRC’s) decision does not preclude the filing of a petition for
certiorari under Rule 65 of the Rules of Court.—The finality of the
NLRC’s decision does not preclude the filing of a petition for certiorari
under Rule 65 of the Rules of Court. That the NLRC issues an entry of
judgment after the lapse of ten (10) days from the parties’ receipt of its
decision will only give rise to the prevailing party’s right to move for the
execution thereof but will not prevent the CA from taking cognizance of
a petition for certiorari on jurisdictional and due process
considerations. In turn, the decision rendered by the CA on a petition
for certiorari may be appealed to this Court by way of a petition for
review on certiorari under Rule 45 of the Rules of Court. Under Section
5, Article VIII of the Constitution, this Court has the power to “review,
revise, reverse, modify, or affirm on appeal or certiorari as the law or
the Rules of Court may provide, final judgments and orders of lower
courts in x x x all cases in which only an error or question of law is
involved.” Consistent with this constitutional mandate, Rule 45 of the
Rules of Court provides the remedy of an appeal by certiorari from
decisions, final orders or resolutions of the CA in any case, i.e.,
regardless of the nature of the action or proceedings involved, which
would be but a continuation of the appellate process over the original
case. Since an appeal to this Court is not an original and independent
action but a continuation of the proceedings before the CA, the filing of
a petition for review under Rule 45 cannot be barred by the finality of
the NLRC’s decision in the same way that a petition for certiorari under
Rule 65 with the CA cannot.

Same; Appeals; It is well-settled and oft-repeated that findings of

fact of administrative agencies and quasi-judicial bodies, which
have acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect, but
finality when affirmed by the Court of Appeals (CA).—As a general
rule, this Court is not a trier of facts and a petition for review on
certiorari under Rule 45 of the Rules of Court must exclusively raise
questions of law. Moreover, if factual findings of the NLRC and the LA
have been affirmed by the CA, this Court accords them the respect and
finality they deserve. It is well-settled and oft-repeated that findings of
fact of administrative agencies and quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to specific
matters, are generally accorded not only respect, but finality when
affirmed by the CA. Nevertheless, this Court will not hesitate to deviate
from what are clearly procedural guidelines and disturb and strike
down the findings of the CA and those of the labor tribunals if there is
a showing that they are unsupported by the evidence on record or there
was a patent misappreciation of facts. Indeed, that the impugned
decision of the CA is consistent with the findings of the labor tribunals
does not per se conclusively demonstrate the correctness thereof. By
way of exception to the general rule, this Court will scrutinize the facts
if only to rectify the prejudice and injustice resulting from an incorrect
assessment of the evidence presented.

Same; Procedural Rules and Technicalities; Technical rules are not

binding in labor cases and are not to be applied strictly if the result
would be detrimental to the working man.—Under Section 4(c), Rule
VI of the NLRC Rules, the NLRC shall limit itself to reviewing and
deciding only the issues that were elevated on appeal. The NLRC, while
not totally bound by technical rules of procedure, is not licensed to
disregard and violate the implementing rules it implemented.
Nonetheless, technicalities should not be allowed to stand in the way
of equitably and completely resolving the rights and obligations of the
parties. Technical rules are not binding in labor cases and are not to
be applied strictly if the result would be detrimental to the working
man. This Court may choose not to encumber itself with technicalities
and limitations consequent to procedural rules if such will only serve
as a hindrance to its duty to decide cases judiciously and in a manner
that would put an end with finality to all existing conflicts between the
parties.

Corporation Law; Piercing the Veil of Corporate Fiction; It has a

personality separate and distinct from the persons composing it,
as well as from any other legal entity to which it may be related.
Equally well-settled is the principle that the corporate mask may
be removed or the corporate veil pierced when the corporation is
just an alter ego of a person or of another corporation.—A
corporation is an artificial being created by operation of law. It
possesses the right of succession and such powers, attributes, and
properties expressly authorized by law or incident to its existence. It
has a personality separate and distinct from the persons composing it,
as well as from any other legal entity to which it may be related. This is
basic. Equally well-settled is the principle that the corporate mask may
be removed or the corporate veil pierced when the corporation is just
an alter ego of a person or of another corporation. For reasons of public
policy and in the interest of justice, the corporate veil will justifiably be
impaled only when it becomes a shield for fraud, illegality or inequity
committed against third persons.

Same; Same; Instances When the Doctrine of Piercing the

Corporate Veil Applies.—The doctrine of piercing the corporate veil
applies only in three (3) basic areas, namely: 1) defeat of public
convenience as when the corporate fiction is used as a vehicle for the
evasion of an existing obligation; 2) fraud cases or when the corporate
entity is used to justify a wrong, protect fraud, or defend a crime; or 3)
alter ego cases, where a corporation is merely a farce since it is a mere
alter ego or business conduit of a person, or where the corporation is
so organized and controlled and its affairs are so conducted as to make
it merely an instrumentality, agency, conduit or adjunct of another
corporation.

Same; Same; A settled formulation of the doctrine of piercing the

corporate veil is that when two business enterprises are owned,
conducted and controlled by the same parties, both law and equity
will, when necessary to protect the rights of third parties,
disregard the legal fiction that these two entities are distinct and
treat them as identical or as one and the same.—For the piercing
doctrine to apply, it is of no consequence if Sceptre is a sole
proprietorship. As ruled in Prince Transport, Inc., et al. v. Garcia, et al.,
639 SCRA 312 (2011), it is the act of hiding behind the separate and
distinct personalities of juridical entities to perpetuate fraud, commit
illegal acts, evade one’s obligations that the equitable piercing doctrine
was formulated to address and prevent: A settled formulation of the
doctrine of piercing the corporate veil is that when two business
enterprises are owned, conducted and controlled by the same parties,
both law and equity will, when necessary to protect the rights of third
parties, disregard the legal fiction that these two entities are distinct
and treat them as identical or as one and the same. In the present case,
it may be true that Lubas is a single proprietorship and not a
corporation. However, petitioners’ attempt to isolate themselves from
and hide behind the supposed separate and distinct personality of
Lubas so as to evade their liabilities is precisely what the classical
doctrine of piercing the veil of corporate entity seeks to prevent and
remedy.

Labor Law; Separation Pay; Separation pay is computed from the

commencement of employment up to the time of termination,
including the imputed service for which the employee is entitled
to backwages, with the salary rate prevailing at the end of the
period of putative service being the basis for computation.—
Effectively, the petitioner cannot be deemed to have changed employers
as Royale and Sceptre are one and the same. His separation pay should,
thus, be computed from the date he was hired by Sceptre in April 1976
until the finality of this decision. Based on this Court’s ruling in
Masagana Concrete Products, et al. v. NLRC, et al., the intervening
period between the day an employee was illegally dismissed and the day
the decision finding him illegally dismissed becomes final and executory
shall be considered in the computation of his separation pay as a period
of “imputed” or “putative” service: Separation pay, equivalent to one
month’s salary for every year of service, is awarded as an alternative to
reinstatement when the latter is no longer an option. Separation pay is
computed from the commencement of employment up to the time of
termination, including the imputed service for which the employee is
entitled to backwages, with the salary rate prevailing at the end of the
period of putative service being the basis for computation.

Same; Backwages; Backwages is a remedy affording the employee

a way to recover what he has lost by reason of the unlawful
dismissal.—Backwages is a remedy affording the employee a way to
recover what he has lost by reason of the unlawful dismissal. In
awarding backwages, the primordial consideration is the income that
should have accrued to the employee from the time that he was
dismissed up to his reinstatement and the length of service prior to his
dismissal is definitely inconsequential. As early as 1996, this Court, in
Bustamante, et al. v. NLRC, et al., clarified in no uncertain terms that
if reinstatement is no longer possible, backwages should be computed
from the time the employee was terminated until the finality of the
decision, finding the dismissal unlawful.

Same; Separation Pay; In case separation pay is awarded and

reinstatement is no longer feasible, backwages shall be computed
from the time of illegal dismissal up to the finality of the decision
should separation pay not be paid in the meantime.—In case
 separation pay is awarded and reinstatement is no longer feasible,
backwages shall be computed from the time of illegal dismissal up to
the finality of the decision should separation pay not be paid in the
meantime. It is the employee’s actual receipt of the full amount of his
separation pay that will effectively terminate the employment of an
illegally dismissed employee. Otherwise, the employer-employee
relationship subsists and the illegally dismissed employee is entitled to
backwages, taking into account the increases and other benefits,
including the 13th month pay, that were received by his co-employees
who are not dismissed. It is the obligation of the employer to pay an
illegally dismissed employee or worker the whole amount of the salaries
or wages, plus all other benefits and bonuses and general increases, to
which he would have been normally entitled had he not been dismissed
and had not stopped working.

Same; Damages; Moral Damages; Exemplary Damages; Moral

damages may be recovered where the dismissal of the employee
was tainted by bad faith or fraud, or where it constituted an act
oppressive to labor, and done in a manner contrary to morals, good
customs or public policy while exemplary damages are recoverable
only if the dismissal was done in a wanton, oppressive, or
malevolent manner.—Moral damages and exemplary damages at
P25,000.00 each as indemnity for the petitioner’s dismissal, which was
tainted by bad faith and fraud, are in order. Moral damages may be
recovered where the dismissal of the employee was tainted by bad faith
or fraud, or where it constituted an act oppressive to labor, and done
in a manner contrary to morals, good customs or public policy while
exemplary damages are recoverable only if the dismissal was done in a
wanton, oppressive, or malevolent manner.

B. G.R. No. 193756

April 10, 2013
VENANCIO S. REYES, EDGARDO C. DABBAY, WALTER A. VIGILIA,
NEMECIO M. CALANNO, ROGELIO A. SUPE, JR., ROLAND R.
TRINIDAD, and AURELIO A. DULDULAO, vs. RP GUARDIANS
SECURITY AGENCY, INC.

Labor Law; Termination of Employment; Constructive Dismissal;

Security Guards; Temporary displacement or temporary off- detail
of security guard is, generally, allowed in a situation where a
security agency’s client decided not to renew their service
contract with the agency and no post is available for the relieved
security guard. Such situation does not normally result in a
constructive dismissal. Nonetheless, when the floating status lasts
for more than six (6) months, the employee may be considered to
have been constructively dismissed.—There is no doubt that
petitioners were constructively dismissed. The LA, the NLRC and the
CA were one in their conclusion that respondent was guilty of illegal
dismissal when it placed petitioners on floating status beyond the
reasonable six-month period after the termination of their service
contract with Banco de Oro. Temporary displacement or temporary off
detail of security guard is, generally, allowed in a situation where a
security agency’s client decided not to renew their service contract with
the agency and no post is available for the relieved security guard. Such
situation does not normally result in a constructive dismissal.
Nonetheless, when the floating status lasts for more than six (6)
months, the employee may be considered to have been constructively
dismissed. No less than the Constitution guarantees the right of
workers to security of tenure, thus, employees can only be dismissed
for just or authorized causes and after they have been afforded the due
process of law.

Same; Same; Illegal Dismissals; Reinstatement; Backwages; 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 up to the time of actual
reinstatement.—Settled is the rule that that 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 up
to the time of actual reinstatement. If reinstatement is not possible,
however, the award of separation pay is proper. Backwages and
reinstatement are separate and distinct reliefs given to an illegally
dismissed employee in order to alleviate the economic damage brought
about by the employee’s dismissal. “Reinstatement is a restoration to a
state from which one has been removed or separated” while “the
payment of backwages is a form of relief that restores the income that
was lost by reason of the unlawful dismissal.” Therefore, the award of
one does not bar the other.
FINALITY OF DECISION

A. G.R. No. 198423

October 23, 2012
LEO A. GONZALES, vs. SOLID CEMENT CORPORATION and ALLEN
QUERUBIN.

Labor Law; Backwages; In the case of BPI Employees Union―Metro

Manila and Zenaida Uy v. Bank of the Philippine Islands and Bank
of the Philippine Islands v. BPI Employees Union―Metro Manila
and Zenaida Uy, G.R. Nos. 178699 and 178735, September 21,
2011, 658 SCRA 127, the Court ruled that in computing
backwages, salary increases from the time of dismissal until actual
reinstatement, and benefits not yet granted at the time of
dismissal are excluded.―In the case of BPI Employees Union―Metro
Manila and Zenaida Uy v. Bank of the Philippine Islands and Bank of
the Philippine Islands v. BPI Employees Union―Metro Manila and
Zenaida Uy, 658 SCRA 127 (2011), the Court ruled that in computing
backwages, salary increases from the time of dismissal until actual
reinstatement, and benefits not yet granted at the time of dismissal are
excluded. Hence, we cannot fault the CA for finding that the NLRC
committed grave abuse of discretion in awarding the salary differential
amounting to P617,517.48 and the 13th month pay differentials
amounting to P51,459.48 that accrued subsequent to Gonzales’
dismissal.

Remedial Law; Special Civil Actions; Certiorari; In a certiorari

petition, the scope of review is limited to the determination of
whether a judicial or quasi-judicial tribunal acted without or in
excess of its jurisdiction or grave abuse of discretion amounting to
lack of jurisdiction; such grave abuse of discretion can exist when
the ruling entity used the wrong considerations and thereby acted
outside the contemplation of law.―In a certiorari petition, the scope
of review is limited to the determination of whether a judicial or quasi-
judicial tribunal acted without or in excess of its jurisdiction or grave
abuse of discretion amounting to lack of jurisdiction; such grave abuse
of discretion can exist when the ruling entity used the wrong
considerations and thereby acted outside the contemplation of law. In
justifying the return to and adoption of the LA’s execution order, the
CA solely relied on the doctrine of immutability of judgment which it
considered to the exclusion of other attendant and relevant factors.
This is a fatal error that amounted to grave abuse of discretion,
 particularly on the award of 12% interest. The seminal case of Eastern
Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994), cannot
be clearer on the rate of interest that applies: 3. When the judgment of
the court awarding a sum of money becomes final and executory, the
rate of legal interest x x x shall be 12% per annum from such finality
until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit. (emphasis ours)

Same; Civil Procedure; Judgments; Immutability of Final

Judgments; The immutability principle, rather than being
absolute, is subject to well-settled exceptions, among which is its
inapplicability when a decision claimed to be final is not only
erroneous, but null and void.―The above discussions unavoidably
lead to the conclusion that the Court’s Minute Resolutions denying
Gonzales’ petition were not properly issued and are tainted by the
nullity of the CA decision these Resolutions effectively approved. We do
not aim to defend these actions, however, by mechanically and blindly
applying the principle of immutability of judgment, nor by tolerating
the CA’s inappropriate application of this principle. The immutability
principle, rather than being absolute, is subject to well-settled
exceptions, among which is its inapplicability when a decision claimed
to be final is not only erroneous, but null and void.

Pages 1043 to 1091 (XIV)

RA 7641 “The New Retirement Plan”

xxx

CASES

A. G.R. No. 175558

February 8, 2012
SKIPPERS UNITED PACIFIC, INC. and SKIPPERS MARITIME
SERVICES, INC., LTD., vs. NATHANIEL DOZA, NAPOLEON DE
GRACIA, ISIDRO L. LATA, and CHARLIE APROSTA.

Labor Law; Termination of Employment; Two-Notice Rule; The

employer must furnish the employee with two written notices
before the termination of employment can be effected: (1) the first
notice apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the second notice informs
the employee of the employer’s decision to dismiss him.—For a
worker’s dismissal to be considered valid, it must comply with both
procedural and substantive due process. The legality of the manner of
dismissal constitutes procedural due process, while the legality of the
act of dismissal constitutes substantive due process. Procedural due
process in dismissal cases consists of the twin requirements of notice
and hearing. The employer must furnish the employee with two written
notices before the termination of employment can be effected: (1) the
first notice apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the second notice informs the
employee of the employer’s decision to dismiss him. Before the issuance
of the second notice, the requirement of a hearing must be complied
with by giving the worker an opportunity to be heard. It is not necessary
that an actual hearing be conducted. Substantive due process, on the
other hand, requires that dismissal by the employer be made under a
just or authorized cause under Articles 282 to 284 of the Labor Code.

Same; Seafarers; Resignation; 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.” In the absence of a written resignation, it
is safe to presume that the employer terminated the seafarers.—
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, De Gracia, et al. were not even
employed yet by the foreign principal. For these reasons, the dismissal
of De Gracia, et al. was illegal.

Same; Same; Home Allotment Pay; The seafarer is required to make

an allotment of at least 80% of the seafarer’s salary which is
payable once a month to his designated allottee in the Philippines
through any authorized Philippine bank.—On the issue of home
allotment pay, Skippers effectively admitted non-remittance of home
allotment pay for the month of December 1998 in its Position Paper.
Skippers sought the repatriation expenses to be offset with the home
allotment pay. However, since De Gracia, et al.’s dismissal was illegal,
their repatriation expenses were for the account of Skippers and could
not be offset with the home allotment pay. Contrary to the claim of the
Labor Arbiter and NLRC that the home allotment pay is in “the nature
of extraordinary money where the burden of proof is shifted to the
worker who must prove he is entitled to such monetary benefit,” Section
8 of POEA Memorandum Circular No. 55, series of 1996, states that the
allotment actually constitutes at least eighty percent (80%) of the
seafarer’s salary: The seafarer is required to make an allotment which
is payable once a month to his designated allottee in the Philippines
through any authorized Philippine bank. The master/employer/agency
shall provide the seafarer with facilities to do so at no expense to the
seafarer. The allotment shall be at least eighty percent (80%) of the
seafarer’s monthly basic salary including backwages, if any. (Emphasis
supplied)

Same; Same; Migrant Workers Act; The Migrant Workers Act

provides that salaries for the unexpired portion of the employment
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 24 March 2009, Serrano
v. Gallant Maritime Services and Marlow Navigation Co. Inc., the
Court, in an En Banc Decision, 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.—Section 10
of Republic Act No. 8042 (Migrant Workers Act) provides for money
claims in cases of unjust termination of employment contracts: In case
of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, the workers shall be entitled to the
full reimbursement of his placement fee with interest of twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his
employment contract or for three (3) months for every year of the
unexpired term, whichever is less. 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 24 March 2009, Serrano v. Gallant Maritime
Services and Marlow Navigation Co., Inc., 582 SCRA 254 (2009), the
Court, in an En Banc Decision, 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.

Same; Same; Same; On 8 March 2010, 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.—On 8 March 2010,
however, 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 employent 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. The declaration in March 2009 of the
unconstitutionality of the clause “or for three months for every year of
the unexpired term, whichever is less” in RA 8042 shall be given
retroactive effect to the termination that occurred in January 1999
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.

Same; Damages; Moral Damages; Instances where Moral Damages

may be Recovered.—Article 2219 of the Civil Code of the Philippines
provides for recovery of moral damages in certain cases: Art. 2219.
Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries; (2) Quasi-delicts
causing physical injuries; (3) Seduction, abduction, rape, or other
lascivious acts; (4) Adultery or concubinage; (5) Illegal or arbitrary
detention or arrest; (6) Illegal search; (7) Libel, slander or any other
form of defamation; (8) Malicious prosecution; (9) Acts mentioned in
Article 309; (10) Acts and actions referred to in Articles 21, 26, 27, 28,
29, 30, 32, 34, and 35. The parents of the female seduced, abducted,
raped, or abused, referred to in No. 3 of this article, may also recover
moral damages. The spouse, descendants, ascendants, and brothers
and sisters may bring the action mentioned in No. 9 of this article, in
the order named.

Same; Same; Exemplary Damages; Exemplary or corrective

damages are imposed, by way of example or correction for the
public good, in addition to the moral, temperate, liquidated or
 compensatory damages.—Article 2229 of the Civil Code, on the other
hand, provides for recovery of exemplary damages: Art. 2229.
Exemplary or corrective damages are imposed, by way of example or
correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.

Same; Same; Attorney’s Fees; Article 111 of the Labor Code

provides for a maximum award of attorney’s fees in cases of
recovery of wages.—Article 2208 of the Civil Code provides for recovery
of attorney’s fees and expenses of litigation: Art. 2208. In the absence
of stipulation, attorney’s fees and expenses of litigation, other than
judicial costs, cannot be recovered, except: (1) When exemplary
damages are awarded; (2) When the defendant’s act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses
to protect his interest; (3) In criminal cases of malicious prosecution
against the plaintiff; (4) In case of a clearly unfounded civil action or
proceeding against the plaintiff; (5) Where the defendant acted in gross
and evident bad faith in refusing to satisfy the plaintiff’s plainly valid,
just and demandable claim; (6) In actions for legal support; (7) In
actions for the recovery of wages of household helpers, laborers and
skilled workers; (8) In actions for indemnity under workmen’s
compensation and employer’s liability laws; (9) In a separate civil action
to recover civil liability arising from a crime; (10) When at least double
judicial costs are awarded; (11) In any other case where the court deems
it just and equitable that attorney’s fees and expenses of litigation
should be recovered. In all cases, the attorney’s fees and expenses of
litigation must be reasonable. Article 111 of the Labor Code provides
for a maximum award of attorney’s fees in cases of recovery of wages:
Art. 111. Attorney’s fees. a. In cases of unlawful withholding of wages,
the culpable party may be assessed attorney’s fees equivalent to ten
percent of the amount of wages recovered. b. It shall be unlawful for
any person to demand or accept, in any judicial or administrative
proceedings for the recovery of wages, attorney’s fees which exceed ten
percent of the amount of wages recovered.

B. G.R. No. 177167

January 17, 2013
NELSON B. GAN, vs. GALDERMA PHILIPPINES, INC. and ROSENDO
C. VENERACION.

Remedial Law; Civil Procedure; Appeals; Settled is the rule that

factual findings of labor officials, who are deemed to have acquired
expertise in matters within their jurisdiction, are generally
accorded not only with respect but even finality by the courts
when supported by substantial evidence, i.e., such amount of
relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion.—Settled is the rule that factual
findings of labor officials, who are deemed to have acquired expertise in
matters within their jurisdiction, are generally accorded not only with
respect but even finality by the courts when supported by substantial
evidence, i.e., such amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion. Likewise, factual
findings arrived at by a trier of facts, who is uniquely positioned to
observe the demeanor of the witnesses appearing before him and is
most competent in judging the credibility of the contending parties, are
accorded great weight and certitude.

Same; Same; Courts; Appeals; Petition for Review on Certiorari; The

jurisdiction of the Supreme Court in cases brought before it from
the Court of Appeals via Rule 45 is generally limited to reviewing
errors of law or jurisdiction; Exceptions.—The jurisdiction of this
Court in cases brought before it from the CA via Rule 45 is generally
limited to reviewing errors of law or jurisdiction. In the exercise of its
power of review, the findings of fact of the CA are conclusive and
binding. The reason is that this Court does not entertain factual issues.
It is not our function to analyze or weigh evidence all over again as the
evaluation of facts is best left to the trial or administrative
agencies/quasi-judicial bodies and appellate court which are better
equipped for the task. Admittedly, the above rule is not ironclad. There
are instances in which factual issues may be resolved by this Court, to
wit: (1) the conclusion is a finding grounded entirely on speculation,
surmise and conjecture; (2) the inference made is manifestly mistaken,
absurd or impossible; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of
fact are conflicting; (6) the Court of Appeals goes beyond the issues of
the case, and its findings are contrary to the admissions of both
appellant and appellees; (7) the findings of fact of the CA are contrary
to those of the trial court (in this case, the Labor Arbiter and NLRC); (8)
said findings of fact are conclusions without citation of specific evidence
on which they are based; (9) the facts set forth in the petition, as well
as in the petitioner’s main and reply briefs, are not disputed by the
respondent; and (10) the findings of fact of the CA are premised on the
supposed absence of evidence and contradicted by the evidence on
record.
Labor Law; Termination of Employment; Constructive Dismissal;
Words and Phrases; Constructive dismissal is defined as quitting
or cessation of work because continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in
rank or a diminution of pay and other benefits.—To begin with,
constructive dismissal is defined as quitting or cessation of work
because continued employment is rendered impossible, unreasonable
or unlikely; when there is a demotion in rank or a diminution of pay
and other benefits. It exists if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the
part of the employee that it could foreclose any choice by him except to
forego his continued employment. There is involuntary resignation due
to the harsh, hostile, and unfavorable conditions set by the employer.
The test of constructive dismissal is whether a reasonable person in the
employee’s position would have felt compelled to give up his
employment/position under the circumstances.

Same; Same; Resignation; Words and Phrases; Resignation is the

voluntary act of an employee who is in a situation where one
believes that personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but to
dissociate oneself from employment.—“[R]esignation is the
voluntary act of an employee who is in a situation where one believes
that personal reasons cannot be sacrificed in favor of the exigency of
the service, and one has no other choice but to dissociate oneself from
employment. It is a formal pronouncement or relinquishment of an
office, with the intention of relinquishing the office accompanied by the
act of relinquishment. As the intent to relinquish must concur with the
overt act of relinquishment, the acts of the employee before and after
the alleged resignation must be considered in determining whether he
or she, in fact, intended to sever his or her employment.”

Same; Same; Same; Coercion; Coercion exists when there is a

reasonable or well-grounded fear of an imminent evil upon a person
or his property or upon the person or property of his spouse,
descendants or ascendants.—Since Gan submitted a resignation
letter, it is incumbent upon him to prove with clear, positive, and
convincing evidence that his resignation was not voluntary but was
actually a case of constructive dismissal; that it is a product of coercion
or intimidation. He has to prove his allegations with particularity. Gan
could not have been coerced. Coercion exists when there is a reasonable
 or well-grounded fear of an imminent evil upon a person or his property
or upon the person or property of his spouse, descendants or
ascendants. Neither do the facts of this case disclose that Gan was
intimidated. In St. Michael Academy v. NLRC, 292 SCRA 478 (1998),
We enumerated the requisites for intimidation to vitiate one’s consent,
thus: x x x (1) that the intimidation caused the consent to be given; (2)
that the threatened act be unjust or unlawful; (3) that the threat be real
or serious, there being evident disproportion between the evil and the
resistance which all men can offer, leading to the choice of doing the
act which is forced on the person to do as the lesser evil; and (4) that it
produces a well-grounded fear from the fact that the person from whom
it comes has the necessary means or ability to inflict the threatened
injury to his person or property.

C. G.R. No. 174300. December 5, 2012.*

D. MINDANAO TERMINAL AND BROKERAGE SERVICE, INC. et al vs.
NAGKAHIUSANG MAMUMUO SA MINTERBRO–SOUTHERN
PHILIPPINES FEDERATION OF LABOR et al.

Remedial Law; Civil Procedure; Appeals; Petition for Review on

Certiorari; Only questions of law should be raised in a petition for
review under Rule 45.―In this case, this Court is effectively being
called upon to determine who among the parties is asserting the truth
regarding the date the union members were laid-off. Such venture
requires the evaluation of the respective pieces of evidence presented
by the parties as well as the consideration of “the existence and
relevancy of specific surrounding circumstances as well as their
relation to each other and to the whole, and the probability of the
situation.” However, the nature of petitioners’ action, a petition for
review under Rule 45 of the Rules of Court, renders that very action
inappropriate for this Court to take. Only questions of law should be
raised in a petition for review under Rule 45. While there are recognized
exceptions to that rule, this case is not among them.

Labor Law; Termination of Employment; Lay-Offs; Retrenchment;

A lay-off, used interchangeably with “retrenchment,” is a
recognized prerogative of management. It is the termination of
employment resorted to by the employer, through no fault of nor
with prejudice to the employees, during periods of business
recession, industrial depression, seasonal fluctuations, or during
lulls occasioned by lack of orders, shortage of materials,
conversion of the plant for a new production program, or the
introduction of new methods or more efficient machinery, or of
automation.―In sum, petitioners’ inaction on what they allege to be
the unexplained abandonment by Del Monte of its obligations under
the Contract for the Use of Pier coupled with petitioners’ belated action
on the damaged condition of the pier caused the absence of available
work for the union members. As petitioners were responsible for the
lack of work at the pier and, consequently, the layoff of the union
members, they are liable for the separation from employment of the
union members on a ground similar to retrenchment. In this
connection, this Court has ruled: A lay-off, used interchangeably with
“retrenchment,” is a recognized prerogative of management. It is the
termination of employment resorted to by the employer, through no
fault of nor with prejudice to the employees, during periods of business
recession, industrial depression, seasonal fluctuations, or during lulls
occasioned by lack of orders, shortage of materials, conversion of the
plant for a new production program, or the introduction of new methods
or more efficient machinery, or of automation. Simply put, it is an act
of the employer of dismissing employees because of losses in operation
of a business, lack of work, and considerable reduction on the volume
of his business, a right consistently recognized and affirmed by this
Court. The requisites of a valid retrenchment are covered by Article 283
of the Labor Code. When a lay-off is temporary, the employment status
of the employee is not deemed terminated, but merely suspended.
Article 286 of the Labor Code provides, in part, that the bona fide
suspension of the operation of the business or undertaking for a period
not exceeding six months does not terminate employment.

Same; Same; Constructive Dismissal; Under Article 286 of the

Labor Code, the bona fide suspension of the operation of a business
or undertaking for a period not exceeding six months shall not
terminate employment. Consequently, when the bona fide
suspension of the operation of a business or undertaking exceeds
six months, then the employment of the employee shall be deemed
terminated.―When petitioners failed to make work available to the
union members for a period of more than six months starting April 14,
1997 by failing to call the attention of Del Monte on the latter’s
obligations under the Contract of Use of Pier and to undertake a timely
rehabilitation of the pier, they are deemed to have constructively
dismissed the union members. As this Court held in Valdez v. National
Labor Relations Commission, 286 SCRA 87 (1998): Under Article 286
of the Labor Code, the bona fide suspension of the operation of a
 business or undertaking for a period not exceeding six months shall
not terminate employment. Consequently, when the bona fide
suspension of the operation of a business or undertaking exceeds six
months, then the employment of the employee shall be deemed
terminated. By the same token and applying said rule by analogy, if the
employee was forced to remain without work or assignment for a period
exceeding six months, then he is in effect constructively dismissed.

Same; Same; Lay-Offs; Retrenchment; Lay-off is essentially

retrenchment and under Article 283 of the Labor Code a
retrenched employee is entitled to separation pay equivalent to
one (1) month salary or one-half (12) month salary per year of
service, whichever is higher.―As the Court of Appeals did not err in
ruling that Sebuguero applies to this case, the consequences arrived at
in Sebuguero also apply. Lay-off is essentially retrenchment and under
Article 283 of the Labor Code a retrenched employee is entitled to
separation pay equivalent to one (1) month salary or one-half (12)
month salary per year of service, whichever is higher.

E. G.R. No. 113592

January 15, 1998
INDUSTRIAL AND TRANSPORT EQUIPMENT, INC. and/or ANTONIO
JARINA, vs. NATIONAL LABOR RELATIONS COMMISSION and
LEOPOLDO MEDRANO

Labor Law; Judgment; Contempt; The New Rules of Procedure of

the NLRC provides that the Commission or any labor arbiter may
cite any person for indirect contempt upon grounds and in the
manner prescribed under Section 3(b), Rule 71 of the 1997 Rules
of Civil Procedure.—Section 2, Rule X of the New Rules of Procedure
of the NLRC provides that the Commission or any labor arbiter may cite
any person for indirect contempt upon grounds and in the manner
prescribed under Section 3(b), Rule 71 of the 1997 Rules of Civil
Procedure. Section 3(b), Rule 71 provides: “Section 3—Indirect
contempt to be punished after charge and hearing—x x x a) x x x x x x
x x x b) Disobedience of or resistance to a lawful writ, process, order,
or judgment of a court x x x.”

Same; Same; Same; Contempt Defined; There is no question that

disobedience or resistance to a lawful writ, process, order,
judgment or command of a court or injunction granted by a court
or judge constitutes indirect contempt punishable under Rule 71
of the Rules of Court.—Contempt is defined as a disobedience to the
Court by setting up an opposition to its authority, justice and dignity.
It signifies not only a willful disregard or disobedience of the court’s
orders but such conduct as tends to bring the authority of the court
and the administration of law into disrepute or in some manner to
impede the due administration of justice. There is no question that
disobedience or resistance to a lawful writ, process, order, judgment or
command of a court or injunction granted by a court or judge
constitutes indirect contempt punishable under Rule 71 of the Rules of
Court.

Same; Same; The labor arbiter erred in omitting the award of

backwages.—Notably, the March 27, 1991 decision of the labor arbiter,
while ordering the reinstatement of respondent, excluded the award of
backwages. On this point, we rule that the labor arbiter erred in
omitting such award. The law provides that an illegall dismissed
employee is “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.” Having become final and executory, however, we
are constrained to uphold this decision, albeit deficient, for failure of
the respondent himself to question the inadequacy of the remedy due
him.

Same; Same; Except for correction of clerical errors or the making

of nunc pro tunc entries which cause no prejudice to any party or
where the judgment is void, after the judgment has become final
and executory, the same can neither be amended nor altered even
if the purpose is to correct a perceived conclusion of fact or of
law.—In Asuncion v. NLRC, the Court ruled that perfection of an appeal
within the statutory or reglementary period is not only mandatory but
also jurisdictional and failure to do so renders the questioned decision
final and executory as to deprive the appellate court of jurisdiction to
alter the final judgment, much less to entertain the appeal. In the
recently decided case of Aboitiz Shipping Employees Association v.
Trajano, it was pointed out therein that, except for correction of clerical
errors or the making of nunc pro tunc entries which cause no prejudice
to any party or where the judgment is void, after the judgment has
become final and executory, the same can neither be amended nor
altered even if the purpose is to correct a perceived conclusion of fact
or of law. This is true regardless of whether the modification is to be
 made by the magistrate that rendered the judgment, or by the appellate
magistrate that reviewed the same. Indeed, all litigation must come to
an end however unjust the result of error may appear. Otherwise,
litigation would even be more intolerable than the wrong or injustice it
is designed to correct. Industrial and Transport Equipment, Inc. vs.
NLRC, 284 SCRA 144, G.R. No. 113592 January 15, 1998

F. G.R. No. 172013

October 2, 2009
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A.
CABALQUINTO, LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE,
CYNTHIA A. STEHMEIER, ROSE ANNA G. VICTA, NOEMI R.
CRESENCIO, and other flight attendants of PHILIPPINE AIRLINES, vs.
PHILIPPINE AIRLINES, INCORPORATED.
Actions; Jurisdiction; Labor Law; Pleadings and Practice;
Jurisdiction of the court is determined on the basis of the material
allegations of the complaint and the character of the relief prayed
for irrespective of whether plaintiff is entitled to such relief.—
Jurisdiction of the court is determined on the basis of the material
allegations of the complaint and the character of the relief prayed for
irrespective of whether plaintiff is entitled to such relief. In the case at
bar, the allegations in the petition for declaratory relief plainly show
that petitioners’ cause of action is the annulment of Section 144, Part
A of the PAL-FASAP CBA.

Same; Same; Same; Collective Bargaining Agreements; An action

raising the issue as to whether a provision of the Collective
Bargaining Agreement is unlawful and unconstitutional is beyond
the jurisdiction of labor tribunals; The jurisdiction of labor arbiters
and the National Labor Relations Commission (NLRC) under Article
217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their
collective bargaining agreement.—From the petitioners’ allegations
and relief prayed for in its petition, it is clear that the issue raised is
whether Section 144, Part A of the PAL-FASAP CBA is unlawful and
unconstitutional. Here, the petitioners’ primary relief in Civil Case No.
04-886 is the annulment of Section 144, Part A of the PAL-FASAP CBA,
which allegedly discriminates against them for being female flight
attendants. The subject of litigation is incapable of pecuniary
estimation, exclusively cognizable by the RTC, pursuant to Section 19
(1) of Batas Pambansa Blg. 129, as amended. Being an ordinary civil
action, the same is beyond the jurisdiction of labor tribunals. The said
issue cannot be resolved solely by applying the Labor Code. Rather, it
requires the application of the Constitution, labor statutes, law on
contracts and the Convention on the Elimination of All Forms of
Discrimination Against Women, and the power to apply and interpret
the constitution and CEDAW is within the jurisdiction of trial courts, a
court of general jurisdiction. In Georg Grotjahn GMBH & Co. v. Isnani,
235 SCRA 217 (1994), this Court held that not every dispute between
an employer and employee involves matters that only labor arbiters and
the NLRC can resolve in the exercise of their adjudicatory or quasi-
judicial powers. The jurisdiction of labor arbiters and the NLRC under
Article 217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by
reference to the Labor Code, other labor statutes, or their collective
bargaining agreement.

Same; Same; Same; Actions between employees and employer

where the employer-employee relationship is merely incidental
and the cause of action precedes from a different source of
obligation is within the exclusive jurisdiction of the regular
court.—Not every controversy or money claim by an employee against
the employer or vice-versa is within the exclusive jurisdiction of the
labor arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of
action precedes from a different source of obligation is within the
exclusive jurisdiction of the regular court. Here, the employer-employee
relationship between the parties is merely incidental and the cause of
action ultimately arose from different sources of obligation, i.e., the
Constitution and CEDAW.

Same; Same; Same; Voluntary Arbitrators; Grievance machinery

and voluntary arbitrators do not have jurisdiction and
competence to decide constitutional issues relative to the
allegedly discriminatory compulsory retirement age.—If We divest
the regular courts of jurisdiction over the case, then which tribunal or
forum shall determine the constitutionality or legality of the assailed
CBA provision? This Court holds that the grievance machinery and
voluntary arbitrators do not have the power to determine and settle the
issues at hand. They have no jurisdiction and competence to decide
constitutional issues relative to the questioned compulsory retirement
age. Their exercise of jurisdiction is futile, as it is like vesting power to
someone who cannot wield it.

Same; Same; Same; It does not necessarily follow that a resolution

of a controversy that would bring about a change in the terms and
conditions of employment is a labor dispute, cognizable by labor
tribunals.—The change in the terms and conditions of employment,
should Section 144 of the CBA be held invalid, is but a necessary and
unavoidable consequence of the principal relief sought, i.e.,
nullification of the alleged discriminatory provision in the CBA. Thus,
it does not necessarily follow that a resolution of controversy that would
bring about a change in the terms and conditions of employment is a
labor dispute, cognizable by labor tribunals. It is unfair to preclude
petitioners from invoking the trial court’s jurisdiction merely because it
may eventually result into a change of the terms and conditions of
employment. Along that line, the trial court is not asked to set and fix
the terms and conditions of employment, but is called upon to
determine whether CBA is consistent with the laws.

Same; Same; Same; Collective Bargaining Agreements; Even if the

Collective Bargaining Agreement (CBA) provides for a procedure for
the adjustment of grievances, such referral to the grievance
machinery and thereafter to voluntary arbitration would be
inappropriate to the complaining employees where the union and
the management have unanimously agreed to the terms of the CBA
and their interest is unified.—Although the CBA provides for a
procedure for the adjustment of grievances, such referral to the
grievance machinery and thereafter to voluntary arbitration would be
inappropriate to the petitioners, because the union and the
management have unanimously agreed to the terms of the CBA and
their interest is unified. In Pantranco North Express, Inc., v. NLRC, 259
SCRA 161 (1996), this Court held that: x x x Hence, only disputes
involving the union and the company shall be referred to the grievance
machinery or voluntary arbitrators. In the instant case, both the union
and the company are united or have come to an agreement regarding
the dismissal of private respondents. No grievance between them exists
which could be brought to a grievance machinery. The problem or
dispute in the present case is between the union and the company on
the one hand and some union and non-union members who were
dismissed, on the other hand. The dispute has to be settled before an
impartial body. The grievance machinery with members designated by
the union and the company cannot be expected to be impartial against
the dismissed employees. Due process demands that the dismissed
workers’ grievances be ventilated before an impartial body. x x x.

Same; Same; Same; Words and Phrases; Interpretation, as defined

in Black’s Law Dictionary, is the art of or process of discovering
and ascertaining the meaning of a statute, will, contract, or other
written document.—The trial court in this case is not asked to
interpret Section 144, Part A of the PAL-FASAP CBA. Interpretation, as
defined in Black’s Law Dictionary, is the art of or process of discovering
and ascertaining the meaning of a statute, will, contract, or other
written document. The provision regarding the compulsory retirement
of flight attendants is not ambiguous and does not require
interpretation. Neither is there any question regarding the
implementation of the subject CBA provision, because the manner of
implementing the same is clear in itself. The only controversy lies in its
intrinsic validity.

Same; Same; Same; Contracts; Doctrine of Party Autonomy;

Counter-balancing the principle of autonomy of contracting
parties is the equally general rule that provisions of applicable law,
especially provisions relating to matters affected with public
policy, are deemed written into the contract—the governing
principle is that parties may not contract away applicable provisions of
law especially peremptory provisions dealing with matters heavily
impressed with public interest.—Although it is a rule that a contract
freely entered between the parties should be respected, since a contract
is the law between the parties, said rule is not absolute. In Pakistan
International Airlines Corporation v. Ople, 190 SCRA 90 (1990), this
Court held that: The principle of party autonomy in contracts is not,
however, an absolute principle. The rule in Article 1306, of our Civil
Code is that the contracting parties may establish such stipulations as
they may deem convenient, “provided they are not contrary to law,
morals, good customs, public order or public policy.” Thus, counter-
balancing the principle of autonomy of contracting parties is the equally
general rule that provisions of applicable law, especially provisions
relating to matters affected with public policy, are deemed written into
the contract. Put a little differently, the governing principle is that
parties may not contract away applicable provisions of law especially
peremptory provisions dealing with matters heavily impressed with
public interest. The law relating to labor and employment is clearly
such an area and parties are not at liberty to insulate themselves and
 their relationships from the impact of labor laws and regulations by
simply contracting with each other.

Same; Same; Same; Same; The relations between capital and labor
are not merely contractual—they are so impressed with public
interest that labor contracts must yield to the common good.—The
relations between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to
the common good. x x x The supremacy of the law over contracts is
explained by the fact that labor contracts are not ordinary contracts;
these are imbued with public interest and therefore are subject to the
police power of the state. It should not be taken to mean that retirement
provisions agreed upon in the CBA are absolutely beyond the ambit of
judicial review and nullification. A CBA, as a labor contract, is not
merely contractual in nature but impressed with public interest. If the
retirement provisions in the CBA run contrary to law, public morals, or
public policy, such provisions may very well be voided.

Same; Same; Same; The question as to whether a provision of a

Collective Bargaining Agreement is discriminatory or not is a
question of fact which would require the presentation and
reception of evidence by the parties in order for the trial court to
ascertain the facts of the case and whether said provision violates
the Constitution, statutes and treaties.—The rule is settled that
pure questions of fact may not be the proper subject of an appeal by
certiorari under Rule 45 of the Revised Rules of Court. This mode of
appeal is generally limited only to questions of law which must be
distinctly set forth in the petition. The Supreme Court is not a trier of
facts. The question as to whether said Section 114, Part A of the PAL-
FASAP CBA is discriminatory or not is a question of fact. This would
require the presentation and reception of evidence by the parties in
order for the trial court to ascertain the facts of the case and whether
said provision violates the Constitution, statutes and treaties. A full-
blown trial is necessary, which jurisdiction to hear the same is properly
lodged with the the RTC. Therefore, a remand of this case to the RTC
for the proper determination of the merits of the petition for declaratory
relief is just and proper. Halagueña vs. Philippine Airlines,
Incorporated, 602 SCRA 297, G.R. No. 172013 October 2, 2009

G.