2010 Case Index

1
2010 National Labor Relations Commission Case Digest

Research Information and Publications Division
TabIe of Contents

Abandonment .................................................................................................................. 4
Absenteeism .................................................................................................................... 5
Attorney`s Fees ............................................................................................................... 5
Appeal ............................................................................................................................ 5
PerIection oI Appeal .................................................................................................... 6
Rule on Technicality ................................................................................................... 7
Appearance oI a Non-Lawyer .......................................................................................... 7
Bond ............................................................................................................................... 8
Burden oI ProoI .............................................................................................................. 8
Business Judgment Rule ................................................................................................ 10
Collective Bargaining Agreement.................................................................................. 10
CertiIicate oI Non-Forum Shopping .............................................................................. 11
CertiIication Election .................................................................................................... 11
Compensability oI a Non-occupational Disease ............................................................. 12
Construction Industry .................................................................................................... 12
Constructive Dismissal .................................................................................................. 13
Withholding oI Salary amounts to Constructive Dismissal......................................... 14
Contempt ...................................................................................................................... 14
Control Test .................................................................................................................. 14
Damages ....................................................................................................................... 15
Date oI Filing oI Pleadings ............................................................................................ 16
Dismissal oI Corporate OIIicer ...................................................................................... 16
Dole CertiIication .......................................................................................................... 16
Due Process .................................................................................................................. 17
O Hearing.............................................................................................................. 18
O Notice ................................................................................................................ 19
O Notice and Hearing ............................................................................................ 20
EIIect oI the Dismissal oI Criminal Complaint .............................................................. 20
Employment Contracts .................................................................................................. 21
Equality ........................................................................................................................ 21
Evidence ....................................................................................................................... 21
O Bad Faith ........................................................................................................... 23
O Union Fraud/Misrepresentation.......................................................................... 23
Execution ...................................................................................................................... 24
O Family Home ..................................................................................................... 24
Finality oI Factual Findings ........................................................................................... 24
Finality oI Judgment ..................................................................................................... 25
O Exception .......................................................................................................... 25
Forum Shopping............................................................................................................ 26
Grave Abuse oI Discretion ............................................................................................ 26
Illegal Dismissal............................................................................................................ 26
O Drug Test .......................................................................................................... 29
Intimidation .................................................................................................................. 29
2
Involuntary Servitude .................................................................................................... 30
Jurisdiction.................................................................................................................... 30
Job contracting/Labor-Only Contracting........................................................................ 32
O Test to determine Independent Contractorship ................................................... 33
Liability ........................................................................................................................ 33
O Liability oI Corporate OIIicers ........................................................................... 33
O Liability oI GSIS as Indirect Employer .............................................................. 34
O Liability oI Indirect Employer ........................................................................... 35
O Solidary Liability ............................................................................................... 35
Liberal Application oI the Rules .................................................................................... 36
Management Prerogative ............................................................................................... 37
Money Claims ............................................................................................................... 39
O Interest .............................................................................................................. 39
O Prescription ......................................................................................................... 39
Moral Damages ............................................................................................................. 40
NLRC Rules oI procedure ............................................................................................. 40
O ProoI and Completeness oI Service .................................................................... 40
O Reduction oI Bond ............................................................................................. 40
Piercing the Veil oI Corporate Fiction ........................................................................... 41
Preventive Suspension................................................................................................... 41
Principle oI Non-Diminution oI BeneIits ....................................................................... 42
Protection to Labor........................................................................................................ 43
Reassignment ................................................................................................................ 43
Re-computation oI Awards as against ............................................................................ 44
Principle oI Immutability oI Final Judgment ................................................................. 44
Retirement .................................................................................................................... 44
O Retirement Plans................................................................................................ 45
SeaIarer ......................................................................................................................... 45
O Death BeneIits ................................................................................................... 45
O Occupational Disease......................................................................................... 47
O Disability BeneIits ............................................................................................. 47
O Permanent Total Disability ................................................................................ 48
O Prescription oI SeaIarer Money Claims .............................................................. 49
Security oI Tenure oI Probationary Employee ............................................................... 49
Separation Pay .............................................................................................................. 50
O Separation Pay/Backwages ................................................................................ 52
Social Justice ................................................................................................................ 53
Strained Relationship .................................................................................................... 54
Strike ............................................................................................................................ 55
O Dismissal oI Union OIIicers .............................................................................. 55
O Consequence oI Illegal Strike ............................................................................ 55
O Requisites oI a Valid Strike ............................................................................... 56
O Picketing ........................................................................................................... 56
O Prohibited Activities .......................................................................................... 57
Termination oI Employment ......................................................................................... 57
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Just Causes ................................................................................................................ 57
O $erious Misconduct ........................................................................................ 57
O illful Disobedience ...................................................................................... 59
O ross and Habitual Neglect of Duty .............................................................. 60
O Loss of Trust and Confidence ......................................................................... 60
Authorized Causes .................................................................................................... 62
O Cessation of Business Operation .................................................................... 62
O Redundancy ................................................................................................... 62
O Retrenchment ................................................................................................. 63
Types oI Employees ...................................................................................................... 63
Field Personnel .......................................................................................................... 63
Project Employee ...................................................................................................... 65
Regular Employee ..................................................................................................... 65
Quitclaims ..................................................................................................................... 66
Teachers` Employment on Probationary Status ............................................................. 67
O Rule on Probationary Status ............................................................................... 67
and Fixed-term Employment oI Teachers .................................................................. 67
Thirteenth Month Pay ................................................................................................... 68
TransIer ........................................................................................................................ 68
TransIer oI Ownership ............................................................................................... 68
UnIair Labor Practice .................................................................................................... 69
Unionism ...................................................................................................................... 69
O Union Security and Closed Shop........................................................................ 70
O Employees not covered by Union Shop Clause .................................................. 70
O Termination oI Union OIIicers ........................................................................... 71
Withholding oI Salary ................................................................................................... 71

4
CASE INDEX
January-June

Abandonment

Although under normal circumstances, an employee's act of filing an
illegal dismissal complaint against his employer is inconsistent with
abandonment; in the present case, we simpIy cannot use that one act to
concIude that PuIgar did not terminate his empIoyment with PRRM, and in
the process ignore the cIear, substantiaI evidence presented by PRRM that
proves otherwise. Our ruling on this point in Leopard Integrated Services, Inc.
v. Macalinao is very relevant. We said:

The fact that respondent filed a complaint for illegal dismissal, as
noted by the CA, is not by itself sufficient indicator that respondent had
no intention of deserting his employment since the totality of
respondent's antecedent acts palpably display the contrary. n Abad v.
Roselle Cinema, the Court ruled that:

The filing of a complaint for illegal dismissal should be taken into
account together with the surrounding circumstances of a certain case.
n Arc-Men Food Industries Inc. v. NLRC, the Court ruled that the
substantiaI evidence proffered by the empIoyer that it had not, in
the first pIace, terminated the empIoyee, shouId not simpIy be
ignored on the pretext that the empIoyee wouId not have fiIed the
compIaint for iIIegaI dismissaI if he had not reaIIy been dismissed.
"This is clearly a non-sequitur reasoning that can never validly take the
place of the evidence of both the employer and the employee.
[Emphasis supplied.](PHLPPNE RURAL RECONSTRUCTON
MOVEMENT( RRM)v.VRGLO E. PULGAR, G.R. No. 169227, July 5,
2010)

Jurisprudence has held time and again that abandonment is totally
inconsistent with the immediate filing of a complaint for illegal dismissal, more so
if the same is accompanied by a prayer for reinstatement. n the present case,
however, petitioner filed his complaint more than one year after his alleged
termination from employment. Moreover, petitioner and the other complainants'
inconsistency in their stand is also shown by the fact that in the complaint form
which they personally filled up and filed with the NLRC, they only asked for
payment of separation pay and other monetary claims. They did not ask for
reinstatement. t is only in their Position Paper later prepared by their counsel
that they asked for reinstatement. This is an indication that petitioner and the
other complainants never had the intention or desire to return to their jobs. n
fact, there is no evidence to prove that petitioner and his former co-employees
5
ever attempted to return to work after they were dismissed from employment.
(ELPDO CALPAY v. NATONAL LABOR RELATONS COMMSSON,
TRANGLE ACE CORPORATON and JOSE LEE, G.R. No. 166411, August 3,
2010)
Absenteeism

Even assuming that respondent's absenteeism constitutes willful
disobedience, such offense does not warrant respondent's dismissal. Not every
case of insubordination or willful disobedience by an employee reasonably
deserves the penalty of dismissal. There must be a reasonable proportionality
between the offense and the penalty. (PHLPPNE LONG DSTANCE
TELEPHONE COMPANY v. JOEY B. TEVES, G.R. No. 143511, November
15, 2010)
Attorney's Fees

This case involves the propriety of the award of disability compensation
under the CBA to respondent, who worked as a seaman in the foreign vessel of
petitioner Barber Ship Management Ltd. The award of attorney's fees is justified
under Article 2208 (2) of the Civil Code. Even if petitioners did not withhold
payment of a smaller disability benefit, respondent was compelled to litigate to be
entitled to a higher disability benefit. Moreover, in FS Philippines, Inc. v.
Pilar
1[11]
and Iloreta v. Philippine Transmarine Carriers, Inc.,
2[12]
the Court
sustained the NLRC's award of attorney's fees, in addition to disability benefits to
which the concerned seamen-claimants were entitled. t is no different in this
case wherein respondent has been awarded disability benefit and attorney's fees
by the Labor Arbiter and the Court of Appeals. t is only just that respondent be
also entitled to the award of attorney's fees. n Iloreta v. Philippine Transmarine
Carriers, Inc.,
3[13]
the Court found the amount of US$1,000.00 as reasonable
award of attorney's fees. (NFD NTERNATONAL MANNNG AGENTS,
NC./BARBER SHP MANAGEMENT LTD v. ESMERALDO C. LLESCAS, G.R.
No. 183054, September 29, 2010)
AppeaI

The power of the Court of Appeals to review NLRC decisions via Rule 65
or Petition for Certiorari has been settled as early as in our decision in St. Martin
Funeral ome v. National Labor Relations Commission. This Court held that the
proper vehicle for such review was a Special Civil Action for Certiorari under Rule
65 of the Rules of Court, and that this action should be filed in the Court of

6
Appeals in strict observance of the doctrine of the hierarchy of courts. Moreover,
it is already settled that under Section 9 of atas Pambansa lg. 129, as
amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the
Court of Appeals, amending for the purpose of Section Nine of atas Pambansa
lg. 129 as amended, known as the Judiciary Reorganization Act of 1980), the
Court of Appeals pursuant to the exercise of its original jurisdiction over
Petitions for Certiorari is specifically given the power to pass upon the
evidence, if and when necessary, to resolve factual issues. (PCOP
RESOURCES, NCORPORATED (PR), v. ANACLETO L. TAECA, G.R. No.
160828, August 9, 2010)

Respondent alleged in his position paper that after preparing the CAPEX form
on March 3, 1999, he endorsed it to Marivic Villanueva for the signature of the
Executive Vice-President Ricardo T. Po. The next day, March 4, 1999,
respondent received the CAPEX form containing the signature of Po. Petitioner
never controverted these allegations in the proceedings before the NLRC and the
CA despite its opportunity to do so. Petitioner's belated allegations in its reply
filed before this Court that Marivic Villanueva denied having seen the CAPEX
form cannot be given credit. Points of law, theories, issues and arguments not
brought to the attention of the lower court, administrative agency or quasi-judicial
body need not be considered by a reviewing court, as they cannot be raised for
the first time at that late stage. When a party deliberately adopts a certain theory
and the case is decided upon that theory in the court below, he will not be
permitted to change the same on appeal, because to permit him to do so would
be unfair to the adverse party. (CENTURY CANNNG CORPORATON,
RCARDO T. PO, JR. and AMANCO C. RONQULLO v. VCENTE RANDY R.
RAML, G.R. No. 171630, August 8, 2010)
Perfection of Appeal

Clearly, an appeal from a judgment as that involved in the present case is
perfected onIy" upon the posting of a cash or surety bond. Accessories
Specialist, Inc. v. Alabanza enlightens:

The posting of a bond is indispensabIe to the perfection
of an appeaI in cases invoIving monetary awards from the
decision of the LA. The intention of the lawmakers to make the
bond a mandatory requisite for the perfection of an appeal by the
employer is clearly limned in the provision that an appeal by the
employer may be perfected "only upon the posting of a cash or
surety bond." The word only makes it perfectIy pIain that the
Iawmakers intended the posting of a cash or surety bond by the
empIoyer to be the essentiaI and excIusive means by which an
empIoyer's appeaI may be perfected. The word may refers to
the perfection of an appeal as optional on the part of the defeated
party, but not to the compulsory posting of an appeal bond, if he
7
desires to appeal. The meaning and the intention of the legislature in
enacting a statute must be determined from the language employed;
and where there is no ambiguity in the words used, then there is no
room for construction.

The fiIing of the bond is not onIy mandatory but aIso a
jurisdictionaI requirement that must be compIied with in order
to confer jurisdiction upon the NLRC. Non-compIiance
therewith renders the decision of the LA finaI and executory.
This requirement is intended to assure the workers that if they
prevail in the case, they will receive the money judgment in their
favor upon the dismissal of the employer's appeal. t is intended to
discourage employers from using an appeal to delay or evade their
obligation to satisfy their employees' just and lawful claims. (citations
omitted, italics in the original; emphasis and underscoring supplied)
(MNDANAO TMES CORPORATON v. MTCHEL R. CONFESOR, G.R.
No. 183417, February 5, 2010)
#:le on Technicality

n any case, even if the appeal was filed one day late, the same should have
been entertained by the NLRC. ndeed, the appeal must be perfected within the
statutory or reglementary period. This is not only mandatory, but also
jurisdictional. Failure to perfect the appeal on time renders the assailed decision
final and executory and deprives the appellate court or body of the legal authority
to alter the final judgment, much less entertain the appeal. However, this Court
has, time and again, ruled that, in exceptional cases, a belated appeal may be
given due course if greater injustice will be visited upon the party should the
appeal be denied. The Court has allowed this extraordinary measure even at the
expense of sacrificing order and efficiency if only to serve the greater principles
of substantial justice and equity. (GOVERNMENT SERVCE NSURANCE
SYSTEM v. NATONAL LABOR RELATONS COMMSSON (NLRC), ET. Al.,
G.R. No. 180045, November 17, 2010 )
Appearance of a Non-Lawyer

1. SNS submits that the CA committed a serious error in ruling that the
respondents' representative's non-membership in the bar is sufficient justification
for their failure to comply with the requirements of the law. SNS argues that this
ruling excuses the employment of a non-lawyer and places the acts of the latter
on the same level as those of a member of the ar. Our Labor Code allows a
non-lawyer to represent a party before the Labor Arbiter and the Commission,
but provides limitations: Non-lawyers may appear before the Commission or any
Labor Arbiter only: (1) If they represent themselves; or (2) If they represent their
organization or members thereof. Thus, SNS concludes that the respondents'
representative had no personality to appear before the Labor Arbiter or the
8
NLRC, and his representation for the respondents should produce no legal effect.
(SPC N' SPAN SERVCES CORPORATON v. GLORA PAJE et. al, G.R. No.
174084, August 25, 2010)
ond

n the present case, the Deed of Assignment, as well as the passbook,
which petitioner submitted to the NLRC is neither a cash nor a surety bond.
Petitioner's appeal to the NLRC was thus not duly perfected, thereby rendering
the Labor Arbiter's Decision final and executory. (MNDANAO TMES
CORPORATON v. MTCHEL R. CONFESOR, G.R. No. 183417, February 5,
2010)
urden of Proof
n termination cases, the employer has the burden of proving, by
substantial evidence, that the dismissal is for just cause. f the employer fails to
discharge the burden of proof, the dismissal is deemed illegal. n AMA Computer
College East Rizal v. Ignacio, the Court held that:
n termination cases, the burden of proof rests on the employer to
show that the dismissal is for just cause. 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. And the quantum of proof which the
employer must discharge is substantial evidence. An employee's
dismissal due to serious misconduct must be supported by
substantial evidence. Substantial evidence is that amount of relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion, even if other minds, equally reasonable, might
conceivably opine otherwise.
(ALEX GURANGO v.BEST CHEMCALS AND PLASTCS NC. and MOON
PYO HONG, G.R. No. 174593, August 25, 2010)

Nothing on record indicates the reason for the respondents' termination
from employment, although the fact of termination was never disputed. Swift
denied liability on the basis of its contract with SNS. The contract was not
presented before the Labor Arbiter, although Swift averred that under the
contract, SNS would supply promo girls, merchandisers and other promotional
personnel to handle all promotional aspects and merchandising strategy of Swift.
We can assume, for lack of proof to the contrary, that the respondents'
termination from employment was illegal since neither SNS nor Swift, as
employers, presented any proof that their termination from employment was
legal. Upon proof of termination of employment, the employer has the burden of
9
proof that the dismissal was valid; absent this proof, the termination from
employment is deemed illegal, as alleged by the dismissed employees. (SPC N'
SPAN SERVCES CORPORATON v. GLORA PAJE et. al, G.R. No. 174084,
August 25, 2010)

As to the second issue, the law mandates that the burden of proving the
validity of the termination of employment rests with the employer. Failure to
discharge this evidentiary burden would necessarily mean that the dismissal was
not justified and, therefore, illegal. Unsubstantiated suspicions, accusations, and
conclusions of employers do not provide for legal justification for dismissing
employees. n case of doubt, such cases should be resolved in favor of labor,
pursuant to the social justice policy of labor laws and the Constitution.
(CENTURY CANNNG CORPORATON, RCARDO T. PO, JR. and AMANCO
C. RONQULLO v. VCENTE RANDY R. RAML, G.R. No. 171630, August 8,
2010)

n this regard, petitioners claim that Abueva has worked with respondents
for more than a year already and was allowed to stay inside the hacienda. As
such, he is a regular employee entitled to monetary claims. However, petitioners
have not presented competent proof that respondents engaged the services of
Abueva; that respondents paid his wages or that respondents could dictate what
his conduct should be while at work. n other words, Abueva's allegations did not
establish that his relationship with respondents has the attributes of employer-
employee on the basis of the above-mentioned four-fold test. Therefore, Abueva
was not able to discharge the burden of proving the existence of an employer-
employee relationship. Moreover, Abueva was not able to refute respondents'
assertions that he hires other men to perform weeding job in the hacienda and
that he is not exclusively working for respondents. (Romeo Basay, et al v.
Hacienda Consolacion, et al., G.R. No. 175532, April 19, 2010)

The fact of filing a resignation letter alone does not shift the burden of
proving that the employee's dismissal was for a just and valid cause from the
employer to the employee. n Mora v. Avesco, we ruled that should the employer
interpose the defense of resignation, it is still incumbent upon the employer to
prove that the employee voluntarily resigned. To our mind, Outdoor Clothing did
not discharge this burden by belatedly presenting the three memoranda it relied
on. f these memoranda were authentic, they would have shown that Peaflor's
resignation preceded the appointment of Buenaobra. Thus, they would be
evidence supporting the claim of voluntariness of Peaflor's resignation and
should have been presented early on in the case any lawyer or layman by
simple logic can be expected to know this. Outdoor Clothing however raised
them only before the NLRC when they had lost the case before the labor arbiter
and now conveniently attributes the failure to do so to its former counsel.
Outddor Clothing's belated explanation as expressed in its motion for
reconsideration, to our mind, is a submission we cannot accept for serious
consideration. We find it significant that Peaflor attacked the belated
10
presentation of these memoranda in his Answer to Outdoor Clothing's
Memoranda of Appeal with the NLRC, but records do not show that Outdoor
Clothing ever satisfactorily countered Peaflor's arguments. t was not until we
pointed out Outdoor Clothing's failure to explain its belated presentation of the
memoranda in our January 21, 2010 decision that Outdoor Clothing offered a
justification. (MANOLO A. PEAFLOR V. OUTDOOR CLOTHNG
MANUFACTURNG CORPORATON, G.R. No. 177114, April 13, 2010)
usiness Judgment RuIe

The determination that the employee's services are no longer necessary or
sustainable and, therefore, properly terminable for being redundant is an exercise of
business judgment of the employer. The wisdom or soundness of this judgment is not
subject to discretionary review of the Labor Arbiter and the NLRC, provided there is no
violation of law and no showing that it was prompted by an arbitrary or malicious act. n
other words, it is not enough for a company to merely declare that it has become
overmanned. t must produce adequate proof of such redundancy to justify the
dismissal of the affected employees. (COCA-COLA BOTTLERS PHLPPNES, NC v.
ANGEL U. DEL VLLAR, G.R. No. 163091,October 6, 2010)

Petitioner harps on the fact that there was no actual shutdown of Paper Mill No.
4 but that it continued to be operational. No evidence, however, was presented to prove
that there was continuous operation after the shutdown in the year 1999. What the
records reveal is that Paper Mill No. 4 resumed its operation in 2000 due to a more
favorable business climate. The resumption of its industrial paper manufacturing
operations does not, however, make respondent's streamlining/reorganization plan
illegal because, again, the abolishment of Paper Mill No. 4 in 1999 was a business
judgment arrived at to prevent a possible financial drain at that time. As long as no
arbitrary or malicious action on the part of an employer is shown, the wisdom of a
business judgment to implement a cost saving device is beyond this court's
determination. After all, the free will of management to conduct its own business affairs
to achieve its purpose cannot be denied. (DANNE M. PANTOJA v. SCA HYGENE
PRODUCTSCORPORATON, G.R. No. 163554, April 23, 2010)
CoIIective argaining Agreement
While a contract constitutes the law between the parties, this is so in the
present case with respect to the CBA, not to the MOA in which even the union's
signatories had expressed reservations thereto. But even assuming arguendo
that the MOA is treated as a new CBA, since it is imbued with public interest, it
must be construed liberally and yield to the common good.
WhiIe the terms and conditions of a CA constitute the
Iaw between the parties, it is not, however, an ordinary
contract to which is appIied the principIes of Iaw governing
ordinary contracts. A CBA, as a labor contract within the
11
contemplation of Article 1700 of the Civil Code of the Philippines
which governs the relations between labor and capital, is not
mereIy contractuaI in nature but impressed with pubIic
interest, thus, it must yieId to the common good. As such, it
must be construed liberally rather than narrowly and technically,
and the courts must place a practical and realistic construction
upon it, giving due consideration to the context in which it is
negotiated and purpose which it is intended to serve. (emphasis
and underscoring supplied)
(RTEK EMPLOYEES LABOR UNON-FEDERATON OF FREE
WORKERS v. CRTEK ELECTRONCS, NC, G.R. No. 190515, November 15,
2010)

Moreover, the last sentence of Article 253 which provides for automatic
renewal pertains only to the economic provisions of the CBA, and does not
include representational aspect of the CBA. An existing CBA cannot constitute a
bar to a filing of a petition for certification election. When there is a
representational issue, the status quo provision in so far as the need to await the
creation of a new agreement will not apply. Otherwise, it will create an absurd
situation where the union members will be forced to maintain membership by
virtue of the union security clause existing under the CBA and, thereafter,
support another union when filing a petition for certification election. f we apply it,
there will always be an issue of disloyalty whenever the employees exercise their
right to self-organization. The holding of a certification election is a statutory
policy that should not be circumvented, or compromised. (PCOP RESOURCES,
NCORPORATED (PR), v. ANACLETO L. TAECA, G.R. No. 160828, August 9,
2010)
Certificate of Non-Forum Shopping

The filing of a certificate of non-forum shopping is mandatory in initiatory
pleadings. The subsequent compliance with the requirement does not excuse a
party's failure to comply therewith in the first instance. n those cases where the
Court excused non-compliance with the requirement to submit a certificate of
non-forum shopping, it found special circumstances or compelling reasons which
made the strict application of the Circular clearly unjustified or inequitable. n this
case, however, the petitioners offered no valid justification for their failure to
comply with the Circular. (MANDAUE GALLEON TRADE, NC. and
GAMALLOSONS TRADERS, NC., represented by FAUSTO B. GAMALLO v.
BENVENDO SDTO et.al., G.R. No. 181051,July 5, 2010)
Certification EIection

Applying the same provision, it can be said that while it is incumbent for
the employer to continue to recognize the majority status of the incumbent
12
bargaining agent even after the expiration of the freedom period, they could only
do so when no petition for certification election was filed. The reason is, with a
pending petition for certification, any such agreement entered into by
management with a labor organization is fraught with the risk that such a labor
union may not be chosen thereafter as the collective bargaining representative.
The provision for status quo is conditioned on the fact that no certification
election was filed during the freedom period. Any other view would render
nugatory the clear statutory policy to favor certification election as the means of
ascertaining the true expression of the will of the workers as to which labor
organization would represent them. (PCOP RESOURCES, NCORPORATED
(PR), v. ANACLETO L. TAECA, G.R. No. 160828, August 9, 2010)
CompensabiIity of a Non-occupationaI Disease

On these points, we sustain the Labor Arbiter and the NLRC in granting
total and permanent disability benefits in favor of Villamater, as it was sufficiently
shown that his having contracted colon cancer was, at the very least, aggravated
by his working conditions, taking into consideration his dietary provisions on
board, his age, and his job as Chief Engineer, who was primarily in charge of the
technical and mechanical operations of the vessels to ensure voyage safety.
Jurisprudence provides that to establish compensability of a non-occupational
disease, reasonable proof of work-connection and not direct causal relation is
required. Probability, not the ultimate degree of certainty, is the test of proof in
compensation proceedings. (LEONS NAVGATON CO., NC. and WORLD
MARNE PANAMA, S.A v. CATALNO U. VLLAMATER and/or The Heirs of the
Late Catalino U. Villamater, represented herein by Sonia Mayuyu Villamater; and
NATONAL LABOR RELATONS COMMSSON, G.R. No. 179169, March 3,
2010)
Construction Industry

O Length of Service

Generally, length of service provides a fair yardstick for determining when
an employee initially hired on a temporary basis becomes a permanent one,
entitled to the security and benefits of regularization. But this standard will not be
fair, if applied to the construction industry, simply because construction firms
cannot guarantee work and funding for its payrolls beyond the life of each
project. And getting projects is not a matter of course. Construction companies
have no control over the decisions and resources of project proponents or
owners. There is no construction company that does not wish it has such control
but the reality, understood by construction workers, is that work depended on
decisions and developments over which construction companies have no say.
(DANEL P. JAVELLANA , JR.,V. ALBNO BELEN, G.R. No. 181913, ALBNO
BELEN V. DANEL P. JAVELLANA, JR. and JAVELLANA FARMS, NC., G.R.
No. 182158, March 5, 2010)
13
Constructive DismissaI

Accordingly, petitioners are liable for constructive dismissal for placing
respondents on shifts of a few days per month and in eventually denying them
workplace access, rendering respondents' employment impossible, unreasonable
or unlikely, leaving them no choice but to quit. (PASG CYLNDER MFG.,
CORP.,et. al v. DANLO ROLLO, et. al., G.R. No. 173631 September 8, 2010)

While we recognize the rule that in illegal dismissal cases, the employer
bears the burden of proving that the termination was for a valid or authorized
cause, in the present case, however, the facts and the evidence do not establish
a prima facie case that the employee was dismissed from employment. Before
the employer must bear the burden of proving that the dismissal was legal, the
employee must first establish by substantial evidence the fact of his dismissal
from service. Logically, if there is no dismissal, then there can be no question as
to its legality or illegality. Bare allegations of constructive dismissal, when
uncorroborated by the evidence on record, cannot be given credence.
As we said in Machica v. Roosevelt Services Center, Inc.:

The rule is that one who alleges a fact has the burden of proving it; thus,
petitioners were burdened to prove their allegation that respondents dismissed
them from their employment. t must be stressed that the evidence to prove
this fact must be cIear, positive and convincing. The ruIe that the empIoyer
bears the burden of proof in iIIegaI dismissaI cases finds no appIication
here because the respondents deny having dismissed the petitioners.
[Emphasis supplied.]
(PHLPPNE RURAL RECONSTRUCTON MOVEMENT( RRM)v.VRGLO E.
PULGAR, G.R. No. 169227, July 5, 2010)

Another basic principle is that expressed in Article 4 of the Labor Code that all
doubts in the interpretation and implementation of the Labor Code should be
interpreted in favor of the workingman. This principle has been extended by
jurisprudence to cover doubts in the evidence presented by the employer and the
employee. As shown above, Peaflor has, at very least, shown serious doubts
about the merits of the company's case, particularly in the appreciation of the
clinching evidence on which the NLRC and CA decisions were based. n such
contest of evidence, the cited Article 4 compels us to rule in Peaflor's favor.
Thus, we find that Peaflor was constructively dismissed given the hostile and
discriminatory working environment he found himself in, particularly evidenced by
the escalating acts of unfairness against him that culminated in the appointment
of another HRD manager without any prior notice to him. Where no less than the
company's chief corporate officer was against him, Peaflor had no alternative
but to resign from his employment. (MANOLO A. PEAFLOR v. OUTDOOR
CLOTHNG MANUFACTURNG CORPORATON, G.R. No. 177114, January 21,
2010)

14
WhiIe the Ietter states that PeafIor's resignation was irrevocabIe, it
does not necessariIy signify that it was aIso voIuntariIy executed. Precisely
because of the attendant hostile and discriminatory working environment,
Peaflor decided to permanently sever his ties with Outdoor Clothing. This falls
squarely within the concept of constructive dismissal that jurisprudence defines,
among others, as involuntarily resignation due to the harsh, hostile, and
unfavorable conditions set by the employer. t arises when a clear discrimination,
insensibility, or disdain by an employer exists and has become unbearable to the
employee. The gauge for constructive dismissal is whether a reasonable person
in the employee's position would feel compelled to give up his employment under
the prevailing circumstances. With the appointment of Buenaobra to the position
he then still occupied, Peaflor felt that he was being eased out and this
perception made him decide to leave the company. (MANOLO A. PEAFLOR V.
OUTDOOR CLOTHNG MANUFACTURNG CORPORATON, G.R. No. 177114,
April 13, 2010)
ithholding of Salary amo:nts to Constr:ctive Dismissal

n this case, the withholding of respondent's salary does not fall under any
of the circumstances provided under Article 113. Neither was it established with
certainty that respondent did not work from November 16 to November 30, 2005.
Hence, the Court agrees with the LA and the CA that the unlawful withholding of
respondent's salary amounts to constructive dismissal. (SHS PERFORATED
MATERALS, NC., WNFRED HARTMANNSHENN, and HNRCH JOHANN
SCHUMACHER v. MANUEL F. DAZ, G.R. No. 185814, October 13, 2010)
Contempt

To be considered contemptuous, an act must be clearly contrary to or prohibited
by the order of the court or tribunal. A person cannot, for disobedience, be
punished for contempt unless the act which is forbidden or required to be done is
clearly and exactly defined, so that there can be no reasonable doubt or
uncertainty as to what specific act or thing is forbidden or required. (BANK OF
THE PHLPPNE SLANDS v. LABOR ARBTER RODERCK JOSEPH
CALANZA et al., G.R. No. 180699, October 13, 2010)
ControI Test

t should be remembered that the control test merely calls for the
existence of the right to control, and not necessarily the exercise thereof. t is not
essential that the employer actually supervises the performance of duties of the
employee. t is enough that the former has a right to wield the power. (MANLA
WATER COMPANY, NC, v. JOSE J. DALUMPNES, ET. Al., G.R. No. 175501,
October 4, 2010)
CBA Coverage
15

Under these terms, the petitioners are members of the appropriate
bargaining unit because they are regular rank-and-file employees and do not
belong to any of the excluded categories. Specifically, nothing in the records
shows that they are supervisory or confidential employees; neither are they
casual nor probationary employees. Most importantly, the labor arbiter's decision
of January 17, 2002 affirmed all the way up to the CA level ruled against
ABS-CBN's submission that they are independent contractors. Thus, as regular
rank-and-file employees, they fall within CBA coverage under the CBA's express
terms and are entitled to its benefits. (FARLEY FULACHE et. al., v. ABS-CBN
BROADCASTNG CORPORATON, G.R. No. 183810, January 21, 2010)
Damages

Because of his unjustified dismissal, we likewise award in Del Villar's favor
moral and exemplary damages. Award of moral and exemplary damages for an
illegally dismissed employee is proper where the employee had been harrassed
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. We have 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. These damages, however, are
not intended to enrich the illegally dismissed employee, such that, after
deliberations, we find the amount of P100,000.00 for moral damages and
P50,000.00 for exemplary damages sufficient to assuage the sufferings
experienced by Del Villar and by way of example or correction for the public
good. (COCA-COLA BOTTLERS PHLPPNES, NC v. ANGEL U. DEL VLLAR,
G.R. No. 163091, October 6, 2010)

On the matter of damages prayed for by the petitioners, we have held that as a
general rule, a corporation cannot suffer nor be entitled to moral damages. A
corporation, and by analogy a labor organization, being an artificial person and
having existence only in legal contemplation, has no feelings, no emotions, no
senses; therefore, it cannot experience physical suffering and mental anguish.
Mental suffering can be experienced only by one having a nervous system and it
flows from real ills, sorrows, and griefs of life all of which cannot be suffered by
an artificial, juridical person. A fortiori, the prayer for exemplary damages must
also be denied. Nevertheless, we find it in order to award (1) nominal damages
in the amount of P250,000.00 on the basis of our ruling in De La Salle University
v. De La Salle University Employees Association (DLSUEA-NAFTEU) and Article
2221, and (2) attorney's fees equivalent to 10% of the monetary award. The
remittance to petitioners of the collected union dues previously turned over to
16
Remigio and Villareal is likewise in order. ( EMPLOYEES UNON OF BAYER
PHLS.,v. BAYER PHLPPNES, NC., G.R. No. 162943, December 6, 2010)
Date of FiIing of PIeadings

Thus, the date of filing is determinable from two sources: from the post office
stamp on the envelope or from the registry receipt, either of which may suffice to
prove the timeliness of the filing of the pleadings. f the date stamped on one is
earlier than the other, the former may be accepted as the date of filing. This
presupposes, however, that the envelope or registry receipt and the dates
appearing thereon are duly authenticated before the tribunal where they are
presented. (GOVERNMENT SERVCE NSURANCE SYSTEM v. NATONAL
LABOR RELATONS COMMSSON (NLRC), ET. Al., G.R. No. 180045,
November 17, 2010 )
DismissaI of Corporate Officer

The criteria for distinguishing between corporate officers who may be
ousted from office at will, on one hand, and ordinary corporate employees who
may only be terminated for just cause, on the other hand, do not depend on the
nature of the services performed, but on the manner of creation of the office. n
the respondent's case, he was supposedly at once an employee, a stockholder,
and a Director of Matling. The circumstances surrounding his appointment to
office must be fully considered to determine whether the dismissal constituted an
intra-corporate controversy or a labor termination dispute. We must also consider
whether his status as Director and stockholder had any relation at all to his
appointment and subsequent dismissal as Vice President for Finance and
Administration. (ATLNG NDUSTRAL AND COMMERCAL
CORPORATON,RCHARD K. SPENCER,CATHERNE SPENCER, AND ALEX
MANCLLA v. RCARDO R. COROS, G.R. No. 157802, October 13, 2010)
DoIe Certification

n this case, petitioners failed to discharge such burden of proof. The
Certifications from the DOLE stated that there are no pending labor cases
against petitioners filed before said office, but said certifications "do not cover
cases filed before the National Labor Relations Commission and the National
Conciliation and Mediation Board. The Order dated January 17, 2001 issued by
the DOLE, in fact, showed that in the year 2000, petitioner security agency was
found to have committed the following violations: underpayment of overtime pay,
underpayment of 13
th
month pay, underpayment of 5 days Service ncentive
Leave Pay, and underpayment of night shift differential pay. Then, said Order
stated that, since petitioner security agency had submitted "[p]ayrolls showing
backwages of the above-noted violations amounting to x x x (P443,512.51)
benefitting 279 guards to show compliance with labor laws, "the DOLE
17
considered the inspection closed and terminated. For the years 2001and 2002,
the DOLE Reports stated only that based on records submitted by petitioners, it
had no violations. Verily, such documents from the DOLE do not conclusively
prove that respondent, in particular, has been paid all her salaries and other
benefits in full. n fact, the Order dated January 17, 2001 even bolsters
respondent's claim that she had not been paid overtime pay, 13
th
month pay, and
Service ncentive Leave Pay. The statement in said Order, that backwages for
279 guards had been paid, does not in any way prove that respondent is one of
those 279 guards, since petitioners failed to present personnel files, payrolls,
remittances, and other similar documents which would have proven payment of
respondent's money claims. t was entirely within petitioners' power to present
such employment records that should necessarily be in their possession; hence,
failure to present such evidence must be taken against them. (DANSART
SECURTY FORCE & ALLED SERVCES COMPANY and DANLO A. SARTE
v. JEAN O. BAGOY, G.R. No. 168495, July 2, 2010)
Due Process

The purpose of the one month prior notice rule is to give DOLE an
opportunity to ascertain the veracity of the cause of termination. Non-compliance
with this rule clearly violates the employee's right to statutory due process.
(SHMZU PHLS. CONTRACTORS, NC. v. VRGLO P. CALLANTA, G.R. No.
165923, September 29, 2010)

With regard to the requirement of a hearing, the essence of due process
lies in an opportunity to be heard. Such opportunity was afforded the petitioner
when she was asked to explain her side of the story. n Metropolitan ank and
Trust Company v. arrientos
,
we held that, "the essence of due process lies
simply in an opportunity to be heard, and not that an actual hearing should
always and indispensably be held. Similarly in Philippine Pasay Chung ua
Academy v. Edpan, we held that, "[e]ven if no hearing or conference was
conducted, the requirement of due process had been met since he was accorded
a chance to explain his side of the controversy. (NAGKAKASANG LAKAS NG
MANGGAGAWA SA KEHN(NLMK-OLALA-KMU) andHELEN VALENZUELA v.
KEHN PHLPPNES CORPORATON, G.R. No. 171115, August 9, 2010)

Significantly, Artificio regrettably chose not to present his side at the
administrative hearing scheduled to look into the factual issues that accompanied
the accusation against him. n fact, he avoided the investigation into the charges
by filing his illegal dismissal complaint ahead of the scheduled investigation. He,
on his own decided that his preventive suspension was in fact illegal dismissal
and that he is entitled to backwages and separation pay. ndeed, Artificio would
even reject reinstatement revealing his bent to have his own way through his own
means. As aptly noted by the NLRC, Artificio preempted the investigation that
could have afforded him the due process of which he would then say he was
18
denied. (JOSE P. ARTFCO v. NATONAL LABOR RELATONS
COMMSSON, G.R. No. 172988, July 26, 2010)

The essence of due process is the opportunity to be heard; it is the denial
of this opportunity that constitutes violation of due process of law. The
respondent was given the opportunity to be heard when a proper notice of
investigation was sent to him, although the notice did not reach him for reasons
outside the petitioner's control. He was not also totally unheard on the matter as
he was able to explain his side through the two (2) explanation letters he
submitted. These letters are clear indications that he intimately knew of the
matter for which he was being investigated. f he was denied due process at all,
the denial was with respect to the charges of extortion, tardiness and
absenteeism, which are grounds invoked separately from loss of trust and
confidence and which were not serious considerations in the dismissal that
followed. We need not therefore consider these grounds as material to the
present case. (BBANA FARMS AND MLLS, NC v. ARTURO LADO, G.R. No.
157861, February 2, 2010)

Petitioners should thus indemnify Dy for their failure to observe the
requirements of due process. Dy is not entitled to reinstatement, backwages and
attorney's fees because Dy's dismissal is for just cause but without due process.
n light of this Court's ruling in Agabon v. National Labor Relations Commission,
the violation of Dy's right to statutory due process by petitioners, even if the
dismissal was for a just cause, warrants the payment of indemnity in the form of
nominal damages. This indemnity is intended not to penalize the employer but
to vindicate or recognize the employee's right to statutory due process which was
violated by the employer. Considering that both the Labor Arbiter and the NLRC
found that petitioners already gave Dy P120,000 of their own free will, this
amount should thus constitute the nominal damages due to Dy. (HLTON HEAVY
EQUPMENT CORPORATON v. ANANAS P. DY, G.R. No. 164860, February
2, 2010)
O earing

While no actual hearing was conducted before petitioners dismissed
respondent, the same is not fatal as only an "ample opportunity to be heard is
what is required in order to satisfy the requirements of due process. Accordingly,
this Court is guided by Solid Development Corporation Workers Association v.
Solid Development Corporation (Solid), where the validity of the dismissal of two
employees was upheld notwithstanding that no hearing was conducted, to wit:

[W]ell-settled is the dictum that the twin requirements of notice and
hearing constitute the essential elements of due process in the
dismissal of employees. t is a cardinal rule in our jurisdiction that
the employer must furnish the employee with two written notices
19
before the termination of employment can be effected: (1) the first
apprises the employee of the particular acts or omissions for which
his dismissal is sought; and (2) the second informs the employee of
the employer's decision to dismiss him. The requirement of a
hearing, on the other hand, is complied with as long as there was
an opportunity to be heard, and not necessarily that an actual
hearing was conducted.

n separate infraction reports, petitioners were both apprised of the
particular acts or omissions constituting the charges against them.
They were also required to submit their written explanation within
12 hours from receipt of the reports. Yet, neither of them complied.
Had they found the 12-hour period too short, they should have
requested for an extension of time. Further, notices of termination
were also sent to them informing them of the basis of their
dismissal. n fine, petitioners were given due process before they
were dismissed. Even if no hearing was conducted, the
requirement of due process had been met since they were
accorded a chance to explain their side of the controversy.
(PHARMACA and UPJOHN, NC. (now PFZER PHLPPNES,
NC.) v. RCARDO P. ALBAYDA, JR., G.R. No. 172724 August 23,
2010)
O otice

More importantly, the records are bereft of evidence that Loreta was duly
informed of the charges against her and that she was given the opportunity to
respond to those charges prior to her dismissal. f there were indeed charges
against Loreta that Wensha had to investigate, then it should have informed her
of those charges and required her to explain her side. Wensha should also have
kept records of the investigation conducted while Loreta was on leave. The law
requires that two notices be given to an employee prior to a valid termination: the
first notice is to inform the employee of the charges against her with a warning
that she may be terminated from her employment and giving her reasonable
opportunity within which to explain her side, and the second notice is the notice
to the employee that upon due consideration of all the circumstances, she is
being terminated from her employment. This is a requirement of due process
and clearly, Loreta did not receive any of those required notices. (WENSHA SPA
CENTER, NC. v. LORETA T. YUNG, G.R. No. 185122,
August 16, 2010)

n this case, the Labor Arbiter, the NLRC and the Court of Appeals all
found that respondents were validly terminated due to the completion of the
phases of work for which respondents' services were engaged. The above rule
clearly states, "f the termination is brought about by the completion of the
contract or phase thereof, no prior notice is required. Cioco, Jr. v. C.E.
20
Construction Corporation explained that this is because completion of the work or
project automatically terminates the employment, in which case, the employer is,
under the law, only obliged to render a report to the DOLE on the termination of
the employment. (D.M. CONSUNJ, NC. v. ANTONO GOBRES et. al., G.R.
No. 169170, August 8, 2010)

O otice and earing

As can be seen, under the peculiar circumstances of this case, it cannot
be concluded that the sending of the notices and setting of hearings were a mere
afterthought because petitioners were still awaiting the report from Bagasala
when respondents pre-empted the results of the ongoing investigation by filing
the subject labor complaint. For this reason, there was sufficient compliance with
the twin requirements of notice and hearing even if the notices were sent and the
hearing conducted after the filing of the labor complaint. Thus, the award of
nominal damages by the appellate court is improper. (New Puerto Commercial
and Richard Lim v. Rodel Lopez and Felix Gavan G.R. No. 169999, July 26,
2010) Dismissal due to closed shop CBA provision

rrefragably, GMC cannot dispense with the requirements of notice and
hearing before dismissing Casio, et al. even when said dismissal is pursuant to
the closed shop provision in the CBA. The rights of an employee to be informed
of the charges against him and to reasonable opportunity to present his side in a
controversy with either the company or his own union are not wiped away by a
union security clause or a union shop clause in a collective bargaining
agreement. An employee is entitled to be protected not only from a company
which disregards his rights but also from his own union the leadership of which
could yield to the temptation of swift and arbitrary expulsion from membership
and hence dismissal from his job. (GENERALMLLNG CORPORATON, v.
ERNESTO CASO, et al., G.R. No. 149552, March 10, 2010)

Effect of the DismissaI of CriminaI CompIaint

The mere fact that the criminal complaints against the terminated Union
members were subsequently dismissed for one reason or another does not
extinguish their liability under the Labor Code. Nor does such dismissal bar the
admission of the affidavits, documents, and photos presented to establish their
identity and guilt during the hearing of the petition to declare the strike illegal.
The technical grounds that the Union interposed for denying admission of the
photos are also not binding on the NLRC. (C. ALCANTARA & SONS, NC. v.
COURT OF APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No.
179220, September 29, 2010)

21
EmpIoyment Contracts

Significantly, too, the Articles of Merger and Plan of Merger dated April 7,
2000 did not contain any specific stipulation with respect to the employment
contracts of existing personnel of the non-surviving entity which is FEBTC.
Unlike the Voluntary Arbitrator, this Court cannot uphold the reasoning that the
general stipulation regarding transfer of FEBTC assets and liabilities to BP as
set forth in the Articles of Merger necessarily includes the transfer of all FEBTC
employees into the employ of BP and neither BP nor the FEBTC employees
allegedly could do anything about it. Even if it is so, it does not foIIow that the
absorbed empIoyees shouId not be subject to the terms and conditions of
empIoyment obtaining in the surviving corporation.

The rule is that unless expressly assumed, labor contracts such as
employment contracts and collective bargaining agreements are not enforceable
against a transferee of an enterprise, labor contracts being in personam, thus
binding only between the parties. A labor contract merely creates an action in
personam and does not create any real right which should be respected by third
parties. This conclusion draws its force from the right of an employer to select
his employees and to decide when to engage them as protected under our
Constitution, and the same can only be restricted by law through the exercise of
the police power.(BANK OF THE PHLPPNE SLANDS v. BP EMPLOYEES
UNON-DAVAO CHAPTER-FEDERATON OF UNONS N BP UNBANK, G.R.
No. 164301, August 10, 2010)
EquaIity

We find these guidelines complied with in the present case. To reiterate,
Lado held a position of trust and confidence and was given access to and
authority over company property with clear tasks and guidelines laid down very
early in his employment. Like any business entity, the petitioner has every right
to protect itself from actual threats to the viability of its operations. Lado, given
what happened on September 7, 1998, not only violated the company's trust and
confidence; he had become a threat to the viability of company operations and to
rule that he should be reinstated would be oppressive to the petitioner. The law,
in protecting the rights of the employee, authorizes neither the oppression nor the
self-destruction of the employer. (BBANA FARMS AND MLLS, NC v. ARTURO
LADO, G.R. No. 157861, February 2, 2010)

Evidence

Even if we assume that under the above provision of the contract, Dacuital
was informed of the nature of his employment and the duration of the project, that
same contract is not sufficient evidence to show that the other employees were
22
so informed. t is undisputed that petitioners had individual employment contracts,
yet respondents opted not to present them on the lame excuse that they were
similarly situated as Dacuital. The non-presentation of these contracts gives rise
to the presumption that the employees were not informed of the nature and
duration of their employment. t is doctrinally entrenched that in illegal dismissal
cases, the employer has the burden of proving with clear, accurate, consistent,
and convincing evidence that the dismissal was valid. Absent any other proof that
the project employees were informed of their status as such, it will be presumed
that they are regular employees. (JUDY O. DACUTAL , et. al. v. L.M. CAMUS
ENGNEERNG CORPORATON and/or LUS M. CAMUS, G.R. No. 176748,
September 1, 2010)

While the Court adheres to the principle of liberality in favor of the seafarer in
construing the Standard Employment Contract, we cannot allow claims for
compensation based on surmises. When the evidence presented negates
compensability, we have no choice but to deny the claim, lest we cause injustice
to the employer. (SOUTHEASTERN SHPPNG,SOUTHEASTERN SHPPNG
GROUP, LTD., G.R. No. 167678, June 22, 2010

As a final note, the Court is wont to reiterate that while an employer has its
own interest to protect, and pursuant thereto, it may terminate a managerial
employee for a just cause, such prerogative to dismiss or lay off an employee
must be exercised without abuse of discretion. ts implementation should be
tempered with compassion and understanding. The employer should bear in mind
that, in the execution of the said prerogative, what is at stake is not only the
employee's position, but his very livelihood, his very breadbasket. ndeed, the
consistent rule is that 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 justifiable cause. Thus, when the breach of trust or loss of
confidence alleged is not borne by clearly established facts, as in this case, such
dismissal on the cited grounds cannot be allowed. (Lima land, inc. v. MARLYN
CUEVAS, G.R. No. 169523, June 16, 2010)

While we can grant that the standards were duly communicated to the
petitioners and could be applied beginning the 1
st
trimester of the school year
2000-2001, glaring and very basic gaps in the school's evidence still exist. The
exact terms of the standards were never introduced as evidence; neither does the
evidence show how these standards were applied to the petitioners. Without
these pieces of evidence (effectively, the finding of just cause for the non-renewal
of the petitioners' contracts), we have nothing to consider and pass upon as valid
or invalid for each of the petitioners. nevitably, the non-renewal (or effectively,
the termination of employment of employees on probationary status) lacks the
supporting finding of just cause that the law requires and, hence, is illegal.
(YOLANDA M. MERCADO et al. v. AMA COMPUTER COLLEGE, G.R. No.
183572, April 13, 2010)
23

O ad Faith

This finding lacks basis. Based on the records, respondent failed to allege either
in his complaint or position paper that petitioner, as Vice-President of VPS
Coffee Shop and Restaurant, acted in bad faith. Neither did respondent clearly
and convincingly prove that petitioner, as Vice-President of VPS Coffee Shop
and Restaurant, acted in bad faith. n fact, there was no evidence whatsoever to
show petitioner's participation in respondent's alleged illegal dismissal. Clearly,
the twin requisites of allegation and proof of bad faith, necessary to hold petitioner
personally liable for the monetary awards to respondent, are lacking. (RENE
MARTEL FRANCSCO v. NUMERANO MALLEN, JR, G.R. No. 173169,
September 22, 2010)

O &nion Fra:d/Misrepresentation

n eritage otel Manila v. Pinag-Isang Galing at Lakas ng mga
Manggagawa sa eritage Manila, the employer filed a petition to revoke the
registration of its rank-and-file employees' union, accusing it of committing fraud
and misrepresentation. The Court held that the petition was rightfully denied
because the employer failed to prove that the labor union committed fraud and
misrepresentation. The Court held that:

Did respondent PGLAS union commit fraud and
misrepresentation in its application for union registration? We
agree with the DOLE-NCR and the BLR that it did not. Except for
the evident discrepancies as to the number of union members
involved as these appeared on the documents that supported the
union's application for registration, petitioner company has no
other evidence of the aIIeged misrepresentation. But those
discrepancies alone cannot be taken as an indication that
respondent misrepresented the information contained in these
documents.

The charge that a Iabor organization committed fraud
and misrepresentation in securing its registration is a serious
charge and deserves cIose scrutiny. t is serious because once
such charge is proved, the labor union acquires none of the rights
accorded to registered organizations. ConsequentIy, charges of
this nature shouId be cIearIy estabIished by evidence and the
surrounding circumstances. (Emphasis supplied)

(YOKOHAMA TRE PHLPPNES, NC., v. YOKOHAMA EMPLOYEES UNON,
G.R. No. 163532, March 10, 2010 )
24
Execution
O Family ome

f the family home was constructed before the effectivity of the Family
Code or before August 3, 1988, then it must have been constituted either
judicially or extra-judicially as provided under Articles 225, 229-231 and 233 of
the Civil Code. Judicial constitution of the family home requires the filing of a
verified petition before the courts and the registration of the court's order with the
Registry of Deeds of the area where the property is located. Meanwhile,
extrajudicial constitution is governed by Articles 240 to242 of the Civil Code and
involves the execution of a public instrument which must also be registered with
the Registry of Property. Failure to comply with either one of these two modes of
constitution will bar a judgment debtor from availing of the privilege.

On the other hand, for family homes constructed after the effectivity of the
Family Code on August 3, 1988, there is no need to constitute extrajudicially or
judicially, and the exemption is effective from the time it was constituted and lasts
as lo=g as any of its beneficiaries under Art. 154 actually resides therein.
Moreover, the family home should belong to the absolute community or conjugal
partnership or if exclusively by one spouse, its constitution must have been with
consent of the other, and its value must not prior to August 3, 1988, or as early
as 1944, they must comply with the procedure mandated by the Civil Code.
Pandacan property was judicially or extrajudicially constituted as the Ramos'
family home, the law's protective mantle cannot be availed of by petitioners.
Parenthetically, the records show that the sheriff exhausted all means to execute
the judgment but failed because Ramos' bank accounts were already closed
while other properties in him or the company's name had already been
transferred, and the only property left was the Pandacan property. (JUANTA
TRNDAD RAMOS,et al. v. DANLO PANGLNAN et. al.,G.R. No. 185920,
July 20, 20100)
FinaIity of FactuaI Findings

Accordingly, for want of substantial basis, in fact or in law, factual findings
of an administrative agency, such as the NLRC, cannot be given the stamp of
finality and conclusiveness normally accorded to it, as even decisions of
administrative agencies which are declared "final by law are not exempt from
judicial review when so warranted. Contrary to petitioner's assertion, therefore,
this Court sees no error on the part of the CA when it made a new determination
of the case and, upon this, reversed the ruling of the NLRC. (CENTURY
CANNNG CORPORATON, RCARDO T. PO, JR. and AMANCO C.
RONQULLO v. VCENTE RANDY R. RAML, G.R. No. 171630, August 8, 2010)

25
Finally, it bears to point out that the Decision of the Labor Arbiter was
affirmed by the NLRC and the CA. The settled rule is that the factual findings of
the Labor Arbiter and the NLRC, especially when affirmed by the CA, are
accorded not only great respect but also finality, and are deemed binding upon
this Court so long as they are supported by substantial evidence. n the present
case, the Court finds no cogent reason to depart from this rule. (ELPDO
CALPAY v. NATONAL LABOR RELATONS COMMSSON, TRANGLE ACE
CORPORATON and JOSE LEE, G.R. No. 166411, August 3, 2010)
FinaIity of Judgment

t is no longer legally feasible to modify the final ruling in this case through
the expediency of a petition questioning the order of execution. This late in the
day, petitioner Victor Morales is barred, by the fact of a final judgment, from
advancing the argument that his real property cannot be made liable for the
monetary award in favor of respondent. For a reason greater than protection
from personal liability, petitioner Victor Morales, as president of his corporation,
cannot rely on our previous ruling that "to hold a director personally liable for
debts of a corporation and thus pierce the veil of corporate fiction, the bad faith or
wrongdoing of the director must be established clearly and convincingly.
Judgments of courts should attain finality at some point lest there be no end in
litigation. The final judgment in this case may no longer be reviewed, or in any
way modified directly or indirectly, by a higher court, not even by the Supreme
Court. The reason for this is that, a litigation must end and terminate sometime
and somewhere, and it is essential to an effective and efficient administration of
justice that, once a judgment has become final, the winning party be not deprived
of the fruits of the verdict. Courts must guard against any scheme calculated to
bring about that result and must frown upon any attempt to prolong controversies.
(MARMOSY TRADNG, NC. and VCTOR MORALES v. COURT OF APPEALS,
NATONAL LABOR RELATONS COMMSSON, G.R. No. 170515, May 6, 2010)
O ception

The company insists that the Court should reinstate the original CA decision,
given the findings of the Labor Arbiter and the NLRC that it had not dismissed
Siazar. Ordinarily, the Court will not, on petition for review on certiorari,
reexamine the facts of the case. Here, however, since the CA overturned its
earlier ruling and its factual findings now differ from those of the Labor Arbiter and
the NLRC, the Court is making an exception. (AGRCULTURAL AND
NDUSTRAL SUPPLES CORPORATON,et. al., v. JUEBER P. SAZAR G.R.
No. 177970, August 25, 2010)

26
Forum Shopping

All these go to show that ABS-CBN acted with patent bad faith. A close
parallel we can draw to characterize this bad faith is the prohibition against
forum-shopping under the Rules of Court. n forum-shopping, the Rules
characterize as bad faith the act of filing similar and repetitive actions for the
same cause with the intent of somehow finding a favorable ruling in one of the
actions filed. ABS-CBN's actions in the two cases, as described above, are of
the same character, since its obvious intent was to defeat and render useless, in
a roundabout way and other than through the appeal it had taken, the labor
arbiter's decision in the regularization case. Forum-shopping is penalized by the
dismissal of the actions involved. The penalty against ABS-CBN for its bad faith
in the present case should be no less. (FARLEY FULACHE et. al., v. ABS-CBN
BROADCASTNG CORPORATON, G.R. No. 183810, January 21, 2010)

Grave Abuse of Discretion

Despite all these clear pieces of evidence of illegal obstruction, the NLRC
looked the other way and chose not to see the unmistakable violations of the law
on strikes by the union and its respondent officers and members. Needless to
say, while the law protects the rights of the laborer, it authorizes neither the
oppression nor the destruction of the employer. For grossly ignoring the
evidence before it, the NLRC committed grave abuse of discretion; for supporting
these gross NLRC errors, the CA committed its own reversible error. (PHMCO
NDUSTRES, NC. v. PHMCO NDUSTRES LABOR ASSOCATON (PLA), et
al,G.R. No. 170830, August 11, 2010)

IIIegaI DismissaI

The respondent worker's allegation that Teng summarily dismissed them
on suspicion that they were not reporting to him the correct volume of the fish
caught in each fishing voyage was never denied by Teng. Unsubstantiated
suspicion is not a just cause to terminate one's employment under Article 282

of
the Labor Code. 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 would emasculate the right to security of tenure. For his failure to
comply with the Labor Code's substantive requirement on termination of
employment, we declare that Teng illegally dismissed the respondent workers.
(ALBERT TENG, doing business under the firm name ALBERT TENG FSH
TRADNG, and EMLA TENG-CHUA v. ALFREDO S. PAHAGAC, G.R. No.
169704, November 17, 2010)
27

t is likewise evident that, even in the petition before this Court, Bonifacio
Bryan Cu signed the Verification and Certification of Non-Forum Shopping and
Antonio Cu signed the Secretary's Certificate. The fact remains that the Cu family
continues to operate petitioner's business. Despite the alleged recent sale to
SCBC, represented by Willy Deterala, petitioner failed to refute the allegations of
respondents that the Cu family still continues to own and operate petitioner, or
even to show that Willy Deterala is actually in charge of petitioner's business.
Petitioner did not confront this issue head-on, and its failure to do so is fatal to its
cause. Petitioner having failed to discharge its burden of submitting sufficient and
convincing evidence required by law, we hold that respondents were illegally
dismissed. (PEAFRANCA TOURS AND TRAVEL TRANSPORT, NC., v.
JOSELTO P. SARMENTO and RCARDO S. CATMBANG, G.R. No. 178397,
October 20, 2010)

Petitioners' lack of just cause and non-compliance with the procedural
requisites in terminating respondent's employment renders them guilty of illegal
dismissal. Consequently, respondent is entitled to reinstatement to his former
position without loss of seniority rights and payment of backwages. However, if
such reinstatement proves impracticable, and hardly in the best interest of the
parties, perhaps due to the lapse of time since his dismissal, or if he decides not
to be reinstated, respondent should be awarded separation pay in lieu of
reinstatement. (ST. LUKE'S MEDCAL CENTER, NC v. ESTRELTO NOTARO,
G.R. No. 152166, October 20, 2010)

Hence, consistent with the Court's ruling in Jaculbe, having terminated
petitioner merely on the basis of a provision in the retirement plan which was not
freely assented to by her, UNPROM is guilty of illegal dismissal. Petitioner is
thus entitled to reinstatement without loss of seniority rights and to full
backwages computed from the time of her illegal dismissal in February 16, 2001
until the actual date of her reinstatement. f reinstatement is no longer possible
because the position that petitioner held no longer exists, UNPROM shall pay
backwages as computed above, plus, in lieu of reinstatement, separation pay
equivalent to one-month pay for every year of service. This is consistent with the
preponderance of jurisprudence relative to the award of separation pay in case
reinstatement is no longer feasible. LOURDES A. CERCADO v. UNPROM,
NC.,G.R. No. 188154, October 13, 2010)

To reiterate, this Court will not hesitate to defend respondents' right to
security of tenure. The premature dismissal from the service of respondents
Palacio, Calibod, Laquio, Santander and Montederamos is unwarranted.
However, we take exception to the case of respondent Saile who, as alleged by
petitioner, was not qualified to take the LET as she only had three out of the
minimum 10 required educational units to be admitted to take the LET pursuant
28
to Section 15 of RA 7836, which fact respondent Saile did not refute. Not being
qualified to take the examination to become a duly licensed professional teacher,
petitioner cannot be compelled to retain her services as she cannot possibly
obtain the needed prerequisite to allow her to continue practicing the teaching
profession. Thus, we find her termination just and legal. (St. Mary's Academy of
Dipolog City v. Teresita Palacio et. al., September 8, 2010,G.R. No. 164913)

Here, the company did not adduce any evidence to prove that Siazar's
dismissal had been for a just or authorized cause as in fact it had been its
consistent stand that it did not terminate him and that he quit on his own. But
given that the company dismissed Siazar and that such dismissal had remained
unexplained, there can be no other conclusion but that his dismissal was illegal.
(AGRCULTURAL AND NDUSTRAL SUPPLES CORPORATON,et. al., v.
JUEBER P. SAZAR G.R. No. 177970, August 25, 2010)

Verily, there was a dearth of evidence directly linking respondent Mongcal to the
commission of the crime of theft, as his mere act of loading the dump truck with
aggregates did not show that he knew of Rasote's plan to deliver the load to a
place other than petitioner's construction site. The only conclusion, therefore, is
that petitioner illegally dismissed respondent Mongcal. (SARGASSO
CONSTRUCTON and DEVELOPMENT CORPORATON v. NATONAL LABOR

The absurdity of petitioner's defense highlights the fact that respondent's
claim, that she was dismissed without any notice and hearing, rings with truth.
This Court views with approval the observation of the CA and the NLRC, to wit:

x x x the petitioners cannot justify their defense of abandonment as they
failed to prove that indeed private respondent had abandoned her work. t did
not even bother to send a letter to her last known address requiring her to report
for work and explain her alleged continued absences. The ratiocination of public
respondent [NLRC] on this score merits our imprimatur, viz:

The law clearly spells out the manner with which an unjustified refusal to
return to work by an employee may be established. Thusly, respondent should
have given complainant a notice with warning concerning her alleged absences
(Section 2, Rule XV, Book V, mplementing Rules and Regulations of the Labor
Code). The notice requirement actually consists of two parts to be separately
served on the employee to wit: (1) notice to apprise the employee of his
absences with a warning concerning a possible severance of employment in the
event of an unjustified excuse therefor, and (2) subsequent notice of the decision
to dismiss in the event of an employee's refusal to pay heed to such warning.
Only after compliance had been effected with those requirements can it be
reasonably concluded that the employee had actually abandoned his job. n
respondent's case, it is noted that more than two (2) months had already lapsed
since complainant allegedly started to absent herself when the latter instituted
her action for illegal dismissal. During the said period of time, no action was
taken by the respondents regarding complainant's alleged absences, something
which is quite peculiar had complainant's employment not been severed at all.
29
Accordingly, we do not find respondents defense of abandonment to be
impressed with merit in view of an utter lack of evidence to support the same.
Hence, complainant's charge of illegal dismissal stands uncontroverted x x x .
(DVERSFED SECURTY, NC v. ALCA V. BAUTSTA, G.R. No.
152234, April 15, 2010)

While Promm-Gem had complied with the procedural aspect of due
process in terminating the employment of petitioners-employees, i.e., giving two
notices and in between such notices, an opportunity for the employees to answer
and rebut the charges against them, it failed to comply with the substantive
aspect of due process as the acts complained of neither constitute serious
misconduct nor breach of trust. Hence, the dismissal is illegal. (JOEB M.
ALVADO, et al. v. PROCTER & GAMBLE PHLS., NC.,and PROMM-GEM
NC., G.R. No. 160506, March 9, 2010)

The injustice committed on the petitioners/drivers requires rectification.
Their dismissal was not only unjust and in bad faith as the above discussions
abundantly show. The bad faith in ABS-CBN's move toward its illegitimate goal
was not even hidden; it dismissed the petitioners already recognized as regular
employees for refusing to sign up with its service contractor. Thus, from every
perspective, the petitioners were illegally dismissed. (FARLEY FULACHE et. al.,
v. ABS-CBN BROADCASTNG CORPORATON, G.R. No. 183810, January 21,
2010)
O Dr:g Test

The law is clear that drug tests shall be performed only by authorized drug
testing centers. n 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. (JEFFREY NACAGUE v.
SULPCO LNES, NC., G.R. No. 172589, August 8, 2010)

Intimidation

None of these requisites was proven by petitioner. No demand was made
on petitioner to resign. At most, she was merely given the option to either resign
or face disciplinary investigation, which respondent had every right to conduct in
30
light of the numerous infractions committed by petitioner. There is nothing
irregular in providing an option to petitioner. Ultimately, the final decision on
whether to resign or face disciplinary action rests on petitioner alone. (MA.
SOCORRO MANDAPAT v. ADD FORCE PERSONNEL SERVCES, NC. and
COURT OF APPEALS, G.R. No. 180285, July 6, 2010)

InvoIuntary Servitude

Employment is a personal consensual contract and absorption by BP of a
former FEBTC employee without the consent of the employee is in violation of an
individual's freedom to contract. t would have been a different matter if there
was an express provision in the articles of merger that as a condition for the
merger, BP was being required to assume all the employment contracts of all
existing FEBTC employees with the conformity of the employees. n the absence
of such a provision in the articles of merger, then BP clearly had the business
management decision as to whether or not employ FEBTC's employees. FEBTC
employees likewise retained the prerogative to allow themselves to be absorbed
or not; otherwise, that would be tantamount to involuntary servitude. (BANK OF
THE PHLPPNE SLANDS v. BP EMPLOYEES UNON-DAVAO CHAPTER-
FEDERATON OF UNONS N BP UNBANK, G.R. No. 164301, August 10,
2010)

Jurisdiction

Respecting kdal's joint and solidary liability as a corporate officer, the same
is in order too following the express provision of R.A. 8042 on money claims, viz:

SEC. 10. Money Claims.Notwithstanding any provision of law to the contrary,
the Labor Arbiters of the National Labor Relations Commission (NLRC) shall
have the original and exclusive jurisdiction to hear and decide, within ninety
(90) calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual moral,
exemplary and other forms of damages.

The liability of the principal/employer and the recruitment/placement agency
for any and all claims under this section shall be joint and several. This provision
shall be incorporated in the contract for overseas employment and shall be a
condition precedent for its approval. The performance bond to be filed by the
recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the
recruitment/pIacement agency is a juridicaI being, the corporate officers
and directors and partners as the case may be, shaII themseIves be jointIy
31
and soIidariIy IiabIe with the corporation or partnership for the aforesaid
cIaims and damages. (emphasis and underscoring supplied)
(ATC OVERSEAS CORPORATON, AMALA G. KDAL and MNSTRY OF
PUBLC HEALTH-KUWAT v. MA. JOSEFA ECHN, G.R. No. 178551, October
11, 2010)

Prudential ank and Trust Company v. Reyes, a case involving a lady bank
manager who had risen from the ranks but was dismissed, the Court held that
her complaint for illegal dismissal was correctly brought to the NLRC, because
she was deemed a regular employee of the bank. The Court observed thus:

t appears that private respondent was appointed Accounting Clerk by the
Bank on July 14, 1963. From that position she rose to become supervisor.
Then in 1982, she was appointed Assistant Vice-President which she
occupied until her illegal dismissal on July 19, 1991. The bank's contention
that she mereIy hoIds an eIective position and that in effect she is not a
reguIar empIoyee is beIied by the nature of her work and her Iength of
service with the ank. As earlier stated, she rose from the ranks and has
been employed with the Bank since 1963 until the termination of her
employment in 1991. As Assistant Vice President of the Foreign Department
of the Bank, she is tasked, among others, to collect checks drawn against
overseas banks payable in foreign currency and to ensure the collection of
foreign bills or checks purchased, including the signing of transmittal letters
covering the same. t has been stated that "the primary standard 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. Additionally, "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. As Assistant Vice-President of the Foreign
Department of the Bank she performs tasks integral to the operations of the
bank and her length of service with the bank totaling 28 years speaks
volumes of her status as a regular employee of the bank. n fine, as a regular
employee, she is entitled to security of tenure; that is, her services may be
terminated only for a just or authorized cause. This being in truth a case of
illegal dismissal, it is no wonder then that the Bank endeavored to the very
end to establish loss of trust and confidence and serious misconduct on the
part of private respondent but, as will be discussed later, to no avail. (ATLNG
NDUSTRAL AND COMMERCAL CORPORATON,RCHARD K.
SPENCER,CATHERNE SPENCER, AND ALEX MANCLLA v. RCARDO R.
COROS, G.R. No. 157802, October 13, 2010)

One. The NLRC acquires jurisdiction over parties in cases before it either
by summons served on them or by their voluntary appearance before its Labor
Arbiter. Here, while the Union insists that summons were not properly served on
the impleaded Union members with respect to the Company's amended petition
that sought to declare the strike illegal, the records show that they were so
served. The Return of Service of Summons indicated that 74 out of the 81
impleaded Union members were served with summons. But they refused either
to accept the summons or to acknowledge receipt of the same. Such refusal
32
cannot of course frustrate the NLRC's acquisition of jurisdiction over them.
Besides, the affected Union members voluntarily entered their appearance in the
case when they sought affirmative relief in the course of the proceedings like an
award of damages in their favor. (C. ALCANTARA & SONS, NC. v. COURT OF
APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220,
September 29, 2010)
Job contracting/Labor-OnIy Contracting

n the present case, the maestros did not have any substantial capital or
investment. Teng admitted that he solely provided the capital and equipment,
while the maestros supplied the workers. The power of control over the
respondent workers was lodged not with the maestros but with Teng. As
checkers, the respondent workers' main tasks were to count and classify the fish
caught and report them to Teng. They performed tasks that were necessary and
desirable in Teng's fishing business. Taken together, these incidents confirm the
existence of a labor-only contracting which is prohibited in our jurisdiction, as it is
considered to be the employer's attempt to evade obligations afforded by law to
employees. (ALBERT TENG, doing business under the firm name ALBERT
TENG FSH TRADNG, and EMLA TENG-CHUA v. ALFREDO S. PAHAGAC,
G.R. No. 169704, November 17, 2010)

n order that a labor relationship can be categorized as
legitimate/permissible job contracting or as prohibited labor-only contracting, the
totality of the facts and the surrounding circumstances of the relationship ought to
be considered. Every case is unique and has to be assessed on the basis of its
facts and of the features of the relationship in question. n permissible job
contracting, the principal agrees to put out or farm out with 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. The test is whether the independent contractor has contracted to do
the work according to his own methods and without being subject to the
principal's control except only as to the results, he has substantial capital, and he
has assured 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. (SPC N' SPAN SERVCES
CORPORATON v. GLORA PAJE et. al, G.R. No. 174084, August 25, 2010)

Furthermore, the petitioners have been charged with the merchandising
and promotion of the products of P&G, an activity that has already been
considered by the Court as doubtlessly directly related to the manufacturing
business, which is the principal business of P&G. Considering that SAPS has no
substantial capital or investment and the workers it recruited are performing
activities which are directly related to the principal business of P&G, we find that
33
the former is engaged in "labor-only contracting. (JOEB M. ALVADO, et al. v.
PROCTER &GAMBLE PHLS., NC.,and PROMM-GEM NC., G.R. No. 160506,
March 9, 2010)

O Test to Determine Independent Contractorship

Petitioner cannot rely either on AMPCO's Certificate of Registration as an
ndependent Contractor issued by the proper Regional Office of the DOLE to
prove its claim. t is not conclusive evidence of such status. The fact of
registration simply prevents the legal presumption of being a mere labor-only
contractor from arising. n distinguishing between permissible job contracting and
prohibited labor-only contracting, the totality of the facts and the surrounding
circumstances of the case are to be considered.=(SAN MGUEL
CORPORATON v. VCENTE B. SEMLLANO, ET. al., G.R. No. 164257, July 5,
2010)
LiabiIity

O iability of Corporate Officers

Petitioners withheld respondent's salary in the sincere belief that respondent
did not work for the period in question and was, therefore, not entitled to it.
There was no dishonest purpose or ill will involved as they believed there was a
justifiable reason to withhold his salary. Thus, although they unlawfully withheld
respondent's salary, it cannot be concluded that such was made in bad faith.
Accordingly, corporate officers, Hartmannshenn and Schumacher, cannot be
held personally liable for the corporate obligations of SHS. (SHS PERFORATED
MATERALS, NC., WNFRED HARTMANNSHENN, and HNRCH JOHANN
SCHUMACHER v. MANUEL F. DAZ, G.R. No. 185814, October 13, 2010)

As to respondent Camus' liability as LMCEC president, it is settled that in
the absence of malice, bad faith, or specific provision of law, a director or officer
of a corporation cannot be made personally liable for corporate liabilities.

As held in Lowe, Inc. v. Court of Appeals, citing McLeod v. NLRC:

Personal liability of corporate directors, trustees or officers attaches only
when (1) 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; (2) 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; (3) they agree to hold themselves personally and solidarily
34
liable with the corporation; or (4) they are made by specific provision of
law personally answerable for their corporate action.

(JUDY O. DACUTAL , et. al. v. L.M. CAMUS ENGNEERNG CORPORATON
and/or LUS M. CAMUS, G.R. No. 176748, September 1, 2010)

n the subject decision, the CA concluded that petitioner Xu and Wensha are
jointly and severally liable to Loreta. We have read the decision in its entirety but
simply failed to come across any finding of bad faith or malice on the part of Xu.
There is, therefore, no justification for such a ruling. To sustain such a finding,
there should be an evidence on record that an officer or director acted
maliciously or in bad faith in terminating the services of an employee. Moreover,
the finding or indication that the dismissal was effected with malice or bad faith
should be stated in the decision itself. (WENSHA SPA CENTER, NC. v.
LORETA T. YUNG, G.R. No. 185122, August 16, 2010)

O iability of GSIS as Indirect mployer

Lastly, we do not agree with petitioner that the enforcement of the decision is
impossible because its charter unequivocally exempts it from execution. As held
in Government Service Insurance System v. Regional Trial Court of Pasig City,
ranch 71, citing Rubia v. GSIS:

The processual exemption of the GSS funds and properties under
Section 39 of the GSS Charter, in our view, should be read consistently
with its avowed principal purpose: to maintain actuarial solvency of the
GSS in the protection of assets which are to be used to finance the
retirement, disability and life insurance benefits of its members. Clearly,
the exemption should be limited to the purposes and objects covered.
Any interpretation that would give it an expansive construction to exempt
all GSS assets from legal processes absolutely would be unwarranted.

Furthermore, the declared policy of the State in Section 39 of the
GSS Charter granting GSS an exemption from tax, lien, attachment,
levy, execution, and other legal processes should be read together with
the grant of power to the GSS to invest its "excess funds under Section
36 of the same Act. Under Section 36, the GSS is granted the ancillary
power to invest in business and other ventures for the benefit of the
employees, by using its excess funds for investment purposes. n the
exercise of such function and power, the GSS is allowed to assume a
character similar to a private corporation. Thus, it may sue and be sued,
as also, explicitly granted by its charter x x x.

To be sure, petitioner's charter should not be used to evade its
liabilities to its employees, even to its indirect employees, as mandated by
the Labor Code. (GOVERNMENT SERVCE NSURANCE SYSTEM v.
35
NATONAL LABOR RELATONS COMMSSON (NLRC), ET. Al., G.R.
No. 180045, November 17, 2010 )

O iability of Indirect mployer

Petitioner's liability covers the payment of respondents' salary differential and
13
th
month pay during the time they worked for petitioner. n addition, petitioner is
solidarily liable with DNL Security for respondents' unpaid wages from February
1993 until April 20, 1993. While it is true that respondents continued working for
petitioner after the expiration of their contract, based on the instruction of DNL
Security, petitioner did not object to such assignment and allowed respondents to
render service. Thus, petitioner impliedly approved the extension of respondents'
services. Accordingly, petitioner is bound by the provisions of the Labor Code on
indirect employment. Petitioner cannot be allowed to deny its obligation to
respondents after it had benefited from their services. So long as the work, task,
job, or project has been performed for petitioner's benefit or on its behalf, the
liability accrues for such services. The principal is made liable to its indirect
employees because, after all, it can protect itself from irresponsible contractors
by withholding payment of such sums that are due the employees and by paying
the employees directly, or by requiring a bond from the contractor or
subcontractor for this purpose. (GOVERNMENT SERVCE NSURANCE
SYSTEM v. NATONAL LABOR RELATONS COMMSSON (NLRC), ET. Al.,
G.R. No. 180045, November 17, 2010 )

O Solidary iability

Thus, petitioner SMC, as principal employer, is solidarily liable with
AMPCO, the labor-only contractor, for all the rightful claims of respondent. Under
this set-up, AMPCO, as the "labor-only" contractor, is deemed an agent of the
principal (SMC). The law makes the principal responsible over the employees of
the "labor-only" contractor as if the principal itself directly hired=the employees.
(SAN MGUEL CORPORATON v. VCENTE B. SEMLLANO, ET. Al., G.R. No.
164257, July 5, 2010)

We modify, however, our ruling on the extent of liability of Outdoor
Clothing and its co-respondents. A corporation, as a juridical entity, may act only
through its directors, officers and employees. Obligations incurred as a result of
the directors' and officers' acts as corporate agents, are not their personal liability
but the direct responsibility of the corporation they represent. As a rule, they are
only solidarily liable with the corporation for the illegal termination of services of
employees if they acted with malice or bad faith. n the present case, malice or
bad faith on the part of the Syfu, Demogena, and Lee, as corporate officers of
Outdoor Clothing, was not sufficiently proven to justify a ruling holding them
solidarily liable with Outdoor Clothing. (MANOLO A. PEAFLOR V. OUTDOOR
36
CLOTHNG MANUFACTURNG CORPORATON, G.R. No. 177114, April 13,
2010

LiberaI AppIication of the RuIes
The appellate court's brushing aside of the "Paliwanag and the minutes of
the meeting that resulted in the conclusion of the MOA because they were not
verified and notarized, thus violating, so the appellate court reasoned, the rules
on parol evidence, does not lie. Like any other rule on evidence, parol evidence
should not be strictly applied in labor cases.
The reIiance on the paroI evidence ruIe is mispIaced. In
Iabor cases pending before the Commission or the Labor Arbiter,
the ruIes of evidence prevaiIing in courts of Iaw or equity are
not controIIing. Rules of procedure and evidence are not applied
in a very rigid and technical sense in labor cases. Hence, the Labor
Arbiter is not precluded from accepting and evaluating evidence
other than, and even contrary to, what is stated in the CBA.
(emphasis supplied)
(RTEK EMPLOYEES LABOR UNON-FEDERATON OF FREE WORKERS v.
CRTEK ELECTRONCS, NC, G.R. No. 190515, November 15, 2010)

"While the Court adheres to the principle of liberality in favor of the seafarer in
construing the Standard Employment Contract, we cannot allow claims for
compensation based on surmises. When the evidence presented negates
compensability, this Court has no choice but to deny the claim, lest we cause injustice
to the employer. (MEDLNE MANAGEMENT, NC. and GRECOMAR SHPPNG
AGENCY v. GLCERA ROSLNDA and AREL ROSLNDA, G.R. No. 168715,
September 15, 2010)

t is well-settled that the application of technical rules of procedure may be
relaxed to serve the demands of substantial justice, particularly in labor cases.
Labor cases must be decided according to justice and equity and the substantial
merits of the controversy. Procedural niceties should be avoided in labor cases
in which the provisions of the Rules of Court are applied only in suppletory
manner. ndeed, rules of procedure may be relaxed to relieve a part of an
injustice not commensurate with the degree of non-compliance with the process
required.(ARNOLD F. ANB v. COCA-COLA BOTTLERS PHLS., NC. and/or
RHOGE FELCANO,G.R. No. 190216, August 16, 2010)

Finally, it bears stressing that while it is true that litigation is not a game of
technicalities and that rules of procedure shall not be strictly enforced at the cost
of substantial justice, it does not mean that the Rules of Court may be ignored at
37
will and at random to the prejudice of the orderly presentation and assessment of
the issues and their just resolution. t must be emphasized that procedural rules
should not be belittled or dismissed simply because their non-observance might
have resulted in prejudice to a party's substantial rights. Like all rules, they are
required to be followed, except only for the most persuasive of reasons.
(MANDAUE GALLEON TRADE, NC. and GAMALLOSONS TRADERS, NC.,
represented by FAUSTO B. GAMALLO v. BENVENDO SDTO et.al., G.R. No.
181051,July 5, 2010)

Management Prerogative

While management has the prerogative to discipline its employees and to
impose appropriate penalties on erring workers, pursuant to company rules and
regulations, however, such management prerogatives must be exercised in good
faith for the advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws and
valid agreements. The Court is wont to reiterate that while an employer has its
own interest to protect, and pursuant thereto, it may terminate an employee for a
just cause, such prerogative to dismiss or lay off an employee must be exercised
without abuse of discretion. ts implementation should be tempered with
compassion and understanding. The employer should bear in mind that, in the
execution of said prerogative, what is at stake is not only the employee's
position, but his very livelihood,

his very breadbasket. (PHLPPNE LONG
DSTANCE TELEPHONE COMPANY v. JOEY B. TEVES, G.R. No. 143511,
November 15, 2010)

The foregoing illustrates why it is dangerous for this Court and even the
CA to look into the wisdom of a management prerogative. Certainly, one can
argue for or against the pros and cons of transferring respondent to another
territory. Absent a definite finding that such exercise of prerogative was tainted
with arbitrariness and unreasonableness, the CA should have left the same to
petitioners' better judgment. The rule is well settled that labor laws discourage
interference with an employer's judgment in the conduct of his business. Even as
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. As long as
the company's exercise of the same is in good faith to advance its interest and
not for the purpose of defeating or circumventing the rights of employees under
the laws or valid agreements, such exercise will be upheld. (PHARMACA and
UPJOHN, NC. (now PFZER PHLPPNES, NC.) v. RCARDO P. ALBAYDA,
JR., G.R. No. 172724 August 23, 2010)

n the absence of arbitrariness, the CA should not have looked into the
wisdom of a management prerogative. t is the employer's prerogative, based on
its assessment and perception of its employee's qualifications, aptitudes, and
competence, to move them around in the various areas of its business
38
operations in order to ascertain where they will function with maximum benefit to
the company. (PHARMACA and UPJOHN, NC. (now PFZER PHLPPNES,
NC.) v. RCARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

We held that work reassignment of an employee as a genuine business
necessity is a valid management prerogative. After being given an option to be
transferred, petitioner rejected the offer for reassignment to Paper Mill No. 5 even
though such transfer would not involve any diminution of rank and pay. nstead,
he opted and preferred to be separated by executing a release and quitclaim in
consideration of which he received separation pay in the amount of P356,335.20
equal to two months pay for every year of service plus other accrued benefits.
Clearly, petitioner freely and voluntarily consented to the execution of the release
and quitclaim. Having done so apart from the fact that the consideration for the
quitclaim is credible and reasonable, the waiver represents a valid and binding
undertaking. As aptly concluded by the CA, the quitclaim was not executed under
force or duress and that petitioner was given a separation pay more than what
the law requires from respondent. (DANNE M. PANTOJA v. SCA HYGENE
PRODUCTSCORPORATON, G.R. No. 163554, April 23, 2010)

Approval of applications for the ERP is within Korean Air's management
prerogatives. The exercise of management prerogative is valid as long as it is
not done in a malicious, harsh, oppressive, vindictive, or wanton manner. n the
present case, the Court sees no bad faith on Korean Air's part. The 21 August
2001 memorandum clearly states that Korean Air, on its discretion, was offering
ERP to its employees. The memorandum also states that the reason for the
ERP was to prevent further losses. Korean Air did not abuse its discretion when
it excluded Yuson in the ERP. To allow Yuson to avail of the ERP would have
been contrary to the purpose of the ERP. (KOREAN AR CO., LTD v. ADELNA
A.S. YUSON, G.R. No. 170369, June 16, 2010)

We will emphasize anew that the power to dismiss is a normal prerogative
of the employer. This, however, is not without limitations. The employer is bound
to exercise caution in terminating the services of his employees especially so
when it is made upon the request of a labor union pursuant to the Collective
Bargaining Agreement. Dismissals must not be arbitrary and capricious. Due
process must be observed in dismissing an employee, because it affects not only
his position but also his means of livelihood. Employers should, therefore,
respect and protect the rights of their employees, which include the right to labor.
(PCOP RESOURCES, NCORPORATED (PR), v. ANACLETO L. TAECA,
G.R. No. 160828, August 9, 2010)

Besides, as the employer, respondent 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,
39
transfer of employees, work supervision, lay-off of workers and the discipline,
dismissal and recall of workers. Management has the prerogative to discipline its
employees and to impose appropriate penalties on erring workers pursuant to
company rules and regulations. (JOSE P. ARTFCO v. NATONAL LABOR
RELATONS COMMSSON, G.R. No. 172988 , July 26, 2010)

Here, there was no diminution of petitioner's salary and other benefits.
There was no evidence that she was harassed or discriminated upon, or that
respondents made it difficult for her to continue with her other duties. Absent any
evidence of bad faith, it is within the exercise of respondents' management
prerogative to transfer some of petitioner's duties if in their judgment, it would be
more beneficial to the corporation. There was no basis for the NLRC's finding
that from performing managerial functions, petitioner was reduced to performing
clerical tasks. (ESTRELLA VELASCO v. TRANST AUTOMOTVE SUPPLY,
NC., G.R. No. 171327, June 18, 2010)

Money CIaims

O Interest

Further, since the monetary awards remained unpaid even after it became
final on September 22, 2008 because of issues raised respecting the correct
computation of such awards, it is but fair that respondent Javellana be required
to pay 12% interest per annum on those awards from September 22, 2008 until
they are paid. The 12% interest is proper because the Court treats monetary
claims in labor cases the equivalent of a forbearance of credit. t matters not that
the amounts of the claims were still in question on September 22, 2008. What is
decisive is that the issue of illegal dismissal from which the order to pay
monetary awards to petitioner Belen stemmed had been long terminated.
(DANEL P. JAVELLANA , JR.,V. ALBNO BELEN, G.R. No. 181913, ALBNO
BELEN V. DANEL P. JAVELLANA, JR. and JAVELLANA FARMS, NC., G.R.
No. 182158, March 5, 2010)

O Prescription

n Southeastern Shipping v. Navarra, Jr., we ruled that "Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment
Contract for Seafarers which provides for claims to be brought only within one
year from the date of the seafarer's return to the point of hire. We further
declared that "for the guidance of all, Section 28 of the Standard Employment
40
Contract for Seafarers, insofar as it limits the prescriptive period within which the
seafarers may file their money claims, is hereby declared null and void. The
applicable provision is Article 291 of the Labor Code, it being more favorable to
the seafarers and more in accord with the State's declared policy to afford full
protection to labor. The prescriptive period in the present case is thus three
years from the time the cause of action accrues. (MEDLNE MANAGEMENT, NC.
and GRECOMAR SHPPNG AGENCY v. GLCERA ROSLNDA and AREL
ROSLNDA, G.R. No. 168715, September 15, 2010)

MoraI Damages

As for P&G, the records show that it dismissed its employees through
SAPS in a manner oppressive to labor. The sudden and peremptory barring of
the concerned petitioners from work, and from admission to the work place, after
just a one-day verbal notice, and for no valid cause bellows oppression and utter
disregard of the right to due process of the concerned petitioners. Hence, an
award of moral damages is called for. (JOEB M. ALVADO, et al. v. PROCTER
& GAMBLE PHLS., NC.,and PROMM-GEM NC., G.R. No. 160506, March 9,
2010)

NLRC RuIes of procedure
O Proof and Completeness of Service

t cannot be determined from the records who hired Naronio; but it is also
undisputed that petitioners are not his employers. ndeed, Naronio serviced all
the businesses operating within the compound where the arbiter's ruling was
mailed. Thus, it is not even necessary to determine whether Naronio's "duties are
not so integrated to the business that [his] absence or presence will not toll the
entire operation of petitioners' business. This test presupposes that the
recipient of the legal document is employed by the addressee. For remedial law
purposes, Naronio's receipt of any processes intended for petitioners was receipt
by a stranger, without legal significance to petitioners. (PASG CYLNDER MFG.,
CORP.,et. al v. DANLO ROLLO, et. al., G.R. No. 173631 September 8, 2010)

O #ed:ction of ond

Nor was petitioners' filing of a reduced appeal bond fatal to their appeal. True,
Article 223 of the Labor Code requires the filing of appeal bond "in the amount
equivalent to the monetary award in the judgment appealed from. However, both
the Labor Code and this Court's jurisprudence abhor rigid application of
procedural rules at the expense of delivering just settlement of labor cases.
41
Petitioners' reasons for their filing of the reduced appeal bond the downscaling
of their operations coupled with the amount of the monetary award appealed
are not unreasonable. Thus, the recourse petitioners adopted constitutes
substantial compliance with Article 223 consistent with our ruling in Rosewood
Processing, Inc. v. NLRC, where we allowed the appellant to file a reduced bond
of P50,000 (accompanied by the corresponding motion) in its appeal of an
arbiter's ruling in an illegal termination case awarding P789,154.39 to the private
respondents. (PASG CYLNDER MFG., CORP.,et. al v. DANLO ROLLO, et.
al., G.R. No. 173631 September 8, 2010)

Piercing the VeiI of Corporate Fiction

Applying the doctrine to the case at bar, we find no reason to pierce the
corporate veil of respondent and go beyond its legal personality. Control, by
itself, does not mean that the controlled corporation is a mere instrumentality or a
business conduit of the mother company. Even control over the financial and
operational concerns of a subsidiary company does not by itself call for
disregarding its corporate fiction. There must be a perpetuation of fraud behind
the control or at least a fraudulent or illegal purpose behind the control in order to
justify piercing the veil of corporate fiction. Such fraudulent intent is lacking in
this case. (NASECO GUARDS ASSOCATON-PEMA (NAGA-PEMA) v.
NATONAL SERVCE CORPORATON (NASECO), G.R. No. 165442, August 25,
2010)

Preventive Suspension

n this case, Artificio's preventive suspension was justified since he was
employed as a security guard tasked precisely to safeguard respondents' client.
His continued presence in respondents' or its client's premises poses a serious
threat to respondents, its employees and client in light of the serious allegation of
conduct unbecoming a security guard such as abandonment of post during night
shift duty, light threats and irregularities in the observance of proper relieving
time. (JOSE P. ARTFCO v. NATONAL LABOR RELATONS COMMSSON,
G.R. No. 172988, July 26, 2010)

n this case, Artificio's preventive suspension was justified since he was
employed as a security guard tasked precisely to safeguard respondents' client.
His continued presence in respondents' or its client's premises poses a serious
threat to respondents, its employees and client in light of the serious allegation of
conduct unbecoming=g a security guard such as abandonment of post during
night shift duty, light threats and irregularities in the observance of proper
relieving time. (JOSE P. ARTFCO v. NATONAL LABOR RELATONS
COMMSSON, G.R. No. 172988, July 26, 2010)
42
PrincipIe of Non-Diminution of enefits

Article 100 of the Labor Code, otherwise known as the Non-Diminution
Rule, mandates that benefits given to employees cannot be taken back or
reduced unilaterally by the employer because the benefit has become part of the
employment contract, written or unwritten. The rule against diminution of
benefits applies if it is shown that the grant of the benefit is based on an express
policy or has ripened into a practice over a long period of time and that the
practice is consistent and deliberate. Nevertheless, the rule will not apply if the
practice is due to error in the construction or application of a doubtful or difficult
question of law. But even in cases of error, it should be shown that the correction
is done soon after discovery of the error. The argument of petitioner that the
grant of the benefit was not voluntary and was due to error in the interpretation of
what is included in the basic salary deserves scant consideration. No doubtful or
difficult question of law is involved in this case. The guidelines set by the law are
not difficult to decipher. The voluntariness of the grant of the benefit was
manifested by the number of years the employer had paid the benefit to its
employees. Petitioner only changed the formula in the computation of=the 13
th
-
month pay after almost 30 years and only after the dispute between the
management and employees erupted. This act of petitioner in changing the
formula at this time cannot be sanctioned, as it indicates a badge of bad faith.
(CENTRAL AZUCARERA DE TARLAC DECSON v. CENTRAL AZUCARERA
DE TARLAC LABOR UNON-NLU, G.R. No. 188949,July 26, 2010)

All given, business losses are a feeble ground for petitioner to repudiate
its obligation under the CBA. The rule is settled that any benefit and supplement
being enjoyed by the employees cannot be reduced, diminished, discontinued or
eliminated by the employer. The principle of non-diminution of benefits is founded
on the constitutional mandate to protect the rights of workers and to promote
their welfare and to afford labor full protection. (LEPANTO CERAMCS, NC.V.
LEPANTO CERAMCS EMPLOYEES ASSOCATON, G.R. No. 180866, March
2, 2010)

Albeit the amounts representing tollgate fees were deducted from gross
revenues and not directly from Taroy's commissions, the labor tribunal and the
appellate court correctly held that the withholding of those amounts reduced the
amount from which Taroy's 9% commission would be computed. Such a
computation not only marks a change in the method of payment of wages,
resulting in a diminution of Taroy's wages in violation of Article 113 vis--vis
Article 100 of the Labor Code, as amended. t need not be underlined that
without Taroy's written consent or authorization, the deduction is considered
illegal.
Besides, the invocation of the rule on "company practice is generally used
with respect to the grant of additional benefits to employees, not on issues
involving diminution of benefits. (GENESS TRANSPORT SERVCE, NC. v.
43
UNYON NG MALAYANG MANGGAGAWA NG GENESS TRANSPORT
(UMMGT), G.R. No. 182114, April 5, 2010)

Protection to Labor

Although it cannot be determined with certainty whether respondent worked for
the entire period from November 16 to November 30, 2005, the consistent rule is
that if doubt exists between the evidence presented by the employer and that by
the employee, the scales of justice must be tilted in favor of the latter in line with
the policy mandated by Articles 2 and 3 of the Labor Code to afford protection to
labor and construe doubts in favor of labor. For petitioners' failure to satisfy their
burden of proof, respondent is presumed to have worked during the period in
question and is, accordingly, entitled to his salary. Therefore, the withholding of
respondent's salary by petitioners is contrary to Article 116 of the Labor Code
and, thus, unlawful. (SHS PERFORATED MATERALS, NC., WNFRED
HARTMANNSHENN, and HNRCH JOHANN SCHUMACHER v. MANUEL F.
DAZ, G.R. No. 185814, October 13, 2010)

Reassignment

n Abbott Laboratories (Phils.), Inc. v. National Labor Relations
Commission, which involved a complaint filed by a medical representative
against his employer drug company for illegal dismissal for allegedly terminating
his employment when he refused to accept his reassignment to a new area, the
Court upheld the right of the drug company to transfer or reassign its employee in
accordance with its operational demands and requirements. The ruling of the
Court therein, quoted hereunder, also finds application in the instant case:

Therefore, Bobadilla had no valid reason to disobey the order of transfer. He had
tacitly given his consent thereto when he acceded to the petitioners' policy of
hiring sales staff who are willing to be assigned anywhere in the Philippines
which is demanded by petitioners' business.

By the very nature of his employment, a drug salesman or medical representative
is expected to travel. He should anticipate reassignment according to the
demands of their business. t would be a poor drug corporation which cannot
even assign its representatives or detail men to new markets calling for opening
or expansion or to areas where the need for pushing its products is great. More
so if such reassignments are part of the employment contract.

(PHARMACA and UPJOHN, NC. (now PFZER PHLPPNES, NC.) v.
RCARDO P. ALBAYDA, JR., G.R. No. 172724 August 23, 2010)

44
Re-computation of Awards as against
PrincipIe of ImmutabiIity of FinaI Judgment

Consistent with what we discussed above, we hold that under the terms of
the decision under execution, no essential change is made by a re-computation
as this step is a necessary consequence that flows from the nature of the
illegality of dismissal declared in that decision. A re-computation (or an original
computation, if no previous computation has been made) is a part of the law
specifically, Article 279 of the Labor Code and the established jurisprudence on
this provision that is read into the decision. By the nature of an illegal dismissal
case, the reliefs continue to add on until full satisfaction, as expressed under
Article 279 of the Labor Code. The re-computation of the consequences of illegal
dismissal upon execution of the decision does not constitute an alteration or
amendment of the final decision being implemented. The illegal dismissal ruling
stands; only the computation of monetary consequences of this dismissal is
affected and this is not a violation of the principle of immutability of final
judgments. (SESSON DELGHTS CE CREAM AND FAST FOODS v. THE
HON. COURT OF APPEALS (Sixth Division), HON. NATONAL LABOR
RELATONS COMMSSON, G.R. No. 172149, February 8, 2010)

Retirement

At the risk of stating the obvious, private respondent was not separated
from petitioner's employ due to mandatory or optional retirement but, rather, by
termination of employment for a just cause. Thus, any retirement pay provided
by PAL's "Special Retirement & Separation Program dated February 15, 1988
or, in the absence or legal inadequacy thereof, by Article 287 of the Labor Code
does not operate nor can be made to operate for the benefit of private
respondent. Even private respondent's assertion that, at the time of her lawful
dismissal, she was already qualified for retirement does not aid her case
because the fact remains that private respondent was already terminated for
cause thereby rendering nugatory any entitlement to mandatory or optional
retirement pay that she might have previously possessed. (NATONAL LABOR
RELATONS COMMSSON and ADA M. QUJANO v. PHLPPNE ARLNES,
NC. G.R. No. 123294,October 20, 2010)

Admittedly, petitioner worked for 14 years for the bus company which did
not adopt any retirement scheme. Even if petitioner as bus conductor was paid
on commission basis then, he falls within the coverage of R.A. 7641 and its
implementing rules. As thus correctly ruled by the Labor Arbiter, petitioner's
retirement pay should include the cash equivalent of the 5-day SL and
1
/
12
of the
13
th
month pay. (RODOLFO J. SERRANO v. SEVERNO SANTOS TRANST
G.R. No. 187698, August 9, 2010)

45
Undoubtedly, under this provision, the retirement age is primarily
determined by the existing agreement or employment contract. Absent such an
agreement, the retirement age shall be fixed by law. The above-cited law
mandates that the compulsory retirement age is at 65 years, while the minimum
age for optional retirement is set at 60 years. Moreover, Article 287 of the Labor
Code, as amended, applies only to a situation where (1) there is no CBA or other
applicable employment contract providing for retirement benefits for an
employee; or (2) there is a collective bargaining agreement or other applicable
employment contract providing for retirement benefits for an employee, but it is
below the requirement set by law. The rationale for the first situation is to
prevent the absurd situation where an employee, deserving to receive retirement
benefits, is denied them through the nefarious scheme of employers to deprive
employees of the benefits due them under existing labor laws. The rationale for
the second situation is to prevent private contracts from derogating from the
public law. (AMELA R. OBUSAN v. PHLPPNE NATONAL BANK, G.R. No.
181178, July 26, 2010)

O #etirement Plans

Retirement plans allowing employers to retire employees who have not yet
reached the compulsory retirement age of 65 years are not per se repugnant to
the constitutional guaranty of security of tenure. By its express language, the
Labor Code permits employers and employees to fix the applicable retirement
age at 60 years or below, provided that the employees' retirement benefits under
any CBA and other agreements shall not be less than those provided therein. By
this yardstick, the PNB-RP complies. (AMELA R. OBUSAN v. PHLPPNE
NATONAL BANK, G.R. No. 181178, July 26, 2010)

Seafarer
O Death enefits

n the present case, Eduardo was repatriated for medical reasons; he arrived in
the Philippines on June 17, 1999, to undergo further evaluation and treatment
after being diagnosed with advanced mycobacterium tuberculosis, advanced IV
disease, cardiac dysrhythmias, and anemia. Eduardo's employment was
therefore terminated upon his repatriation on June 17, 1999. Thus, when
Eduardo died on June 9, 2001, approximately two (2) years after his repatriation,
his employment with the respondents had long been terminated. As we held in
Prudential Shipping and Management Corporation v. Sta. Rita:

The death of a seaman during the term of employment makes the employer
liable to his heirs for death compensation benefits. Once it is established that the
seaman died during the effectivity of his employment contract, the employer is
46
liable. However, if the seaman dies after the termination of his contract of
empIoyment, his beneficiaries are not entitIed to the death benefits
enumerated above. [Emphasis supplied.]
(LYDA ESCARCHA v. LEONS NAVGATON CO., NC. and/or WORLD
MARNE PANAMA, S.A., G.R. No. 182740, July 5, 2010)

Moreover, there is no evidence to show that Juliano's illness was acquired during
the term of his employment with petitioners. n respondents' Position Paper, they
admitted that Juliano was discharged not because of any illness but due to the
expiration of his employment contract. Although they stated that Juliano was
hospitalized on August 28, 1999, or five months before his contract expired, they
presented no proof to support this allegation. nstead, what respondents
presented were the Medical Certificates issued by Dr. Lloren attesting to the fact
that on March 6, 2000, Juliano consulted her complaining of abdominal
distention. We find this not substantial evidence to prove that Juliano's illness
which caused his death was contracted during the term of his contract. "ndeed,
the death of a seaman several months after his repatriation for illness does not
necessarily mean that: a) the seaman died of the same illness; b) his working
conditions increased the risk of contracting the illness which caused his death;
and c) the death is compensable, unless there is some reasonable basis to
support otherwise. n the instant case, Juliano was repatriated not because of
any illness but because his contract of employment expired. There is likewise no
proof that he contracted his illness during the term of his employment or that his
working conditions increased the risk of contracting the illness which caused his
death. (MEDLNE MANAGEMENT, NC. and GRECOMAR SHPPNG AGENCY
v. GLCERA ROSLNDA and AREL ROSLNDA, G.R. No. 168715,
September 15, 2010)

Thus, as we declared in Gau Sheng Phils., Inc. v. Joaquin, ermogenes v. Oseo
Shipping Services, Inc., Prudential Shipping and Management Corporation v.
Sta. Rita, Klaveness Maritime Agency, Inc. v. eneficiaries of Allas, in order to
avail of death benefits, the death of the employee should occur during the
effectivity of the employment contract. For emphasis, we reiterate that the death
of a seaman during the term of employment makes the employer liable to his
heirs for death compensation benefits, but if the seaman dies after the
termination of his contract of employment, his beneficiaries are not entitled to the
death benefits. Federico did not die while he was under the employ of
petitioners. His contract of employment ceased when he arrived in the
Philippines on March 30, 1998, whereas he died on April 29, 2000. Thus, his
beneficiaries are not entitled to the death benefits under the Standard
Employment Contract for Seafarers. (SOUTHEASTERN
SHPPNG,SOUTHEASTERN SHPPNG GROUP, LTD., G.R. No. 167678, June
22, 2010)

47
O Occ:pational Disease

The wording of the section cited above clearly states that for an injury or
illness to be compensable under the POEA Standard Employment Contract, it
must be work-related. Petitioner has failed to convince this Court that the illness
he suffered can be reasonably linked to the performance of his work as 2
nd

Assistant Engineer on board M/V Chaiten or to prove that it was aggravated
during his stint in the vessel. We therefore find that the Court of Appeals correctly
affirmed the findings of the NLRC dismissing his appeal for lack of merit.
(ARNALDO G. GABUNAS, SR.,v. SCANMAR MARTME SERVCESSERENO,
JJ.NC., G.R. No. 188637, December 15, 2010)

ADS is not listed as an occupational disease both under the POEA-SEC
and the ECC Rules. Thus, the claimant bears the burden of reasonably proving
the relationship between the work of the deceased and ADS, or that the risk of
contracting ADS was increased by the working conditions of the deceased.
(LYDA ESCARCHA v. LEONS NAVGATON CO., NC. and/or WORLD MARNE
PANAMA, S.A., G.R. No. 182740, July 5, 2010)

O Disability enefits

Although strict rules of evidence are not applicable in claims for
compensation and disability benefits, the Court cannot just disregard the
provisions of the POEA SEC. Significantly, a seaman is a contractual and not a
regular employee. His employment is contractually fixed for a certain period of
time. Petitioner and respondents entered into a contract of employment. t was
approved by the POEA on October 25, 2005 and, thus, served as the law
between the parties. Undisputedly, Section 20-B of the POEA Amended
Standard Terms and Conditions Governing the Employment of Filipino Seafarers
on Board Ocean-Going Vessels (POEA-SEC) provides for compensation and
benefits for injury or illness suffered by a seafarer. t says that, in order to claim
disability benefits under the Standard Employment Contract, it is the 'company-
designated' physician who must proclaim that the seaman suffered a permanent
disability, whether total or partial, due to either injury or illness, during the term of
the latter's employment. n German Marine Agencies, Inc. v. NLRC, the Court's
discussion on the seafarer's claim for disability benefits is enlightening. Thus:

[n] order to claim disability benefits under the Standard Employment
Contract, it is the "company-designated physician who must proclaim that
the seaman suffered a permanent disability, whether total or partial, due to
either injury or illness, during the term of the latter's employment. There is no
provision requiring accreditation by the POEA of such physician. n fact, aside
from their own gratuitous allegations, petitioners are unable to cite a single
provision in the said contract in support of their assertions or to offer any
credible evidence to substantiate their claim. f accreditation of the company-
48
designated physician was contemplated by the POEA, it would have
expressly provided for such a qualification, by specifically using the term
"accreditation in the Standard Employment Contract, to denote its intention.
For instance, under the Labor Code, it is expressly provided that physicians
and hospitals providing medical care to an injured or sick employee covered
by the Social Security System or the Government Service nsurance System
must be accredited by the Employees Compensation Commission. t is a
cardinal rule in the interpretation of contracts that if the terms of a contract
are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulation shall control. There is no ambiguity in the
wording of the Standard EmpIoyment Contract - the onIy quaIification
prescribed for the physician entrusted with the task of assessing the
seaman's disabiIity is that he be 'company-designated.' When the
Ianguage of the contract is expIicit, as in the case at bar, Ieaving no
doubt as to the intention of the drafters thereof, the courts may not read
into it any other intention that wouId contradict its pIain import.
[Emphasis supplied]

n this case, the findings of respondents' designated physician that
petitioner has been suffering from brief psychotic disorder and that it is not
work-related must be respected. (EDGARDO M. PANGANBAN v. TARA
TRADNG SHPMANAGEMENT NC.AND SHNLNE SDN BHD, G.R.
No. 187032, October 18, 2010)

Specifically with respect to mental diseases, for the same to be
compensable, the POEA-SEC requires that it must be due to traumatic injury to
the head which did not occur in this case. While disability should be
understood less on its medical significance but more on the loss of earning
capacity, the appellate court's sweeping observations that "the hostile working
environment and the emotional turmoil suffered by [herein] respondent from
his employers caused him mental and emotional stress that led to severe
mental disorder and rendered him permanently unable to perform any work,
and that "his working condition increased the risk of sustaining the illness
complained of do not lie. (PHLPPNE TRANSMARNE CARRERS, NC.,
GLOBAL NAVGATON, LTD., v. SLVNO A. NAZAM G.R. No.
190804,October 11, 2010)

O Permanent Total Disability

n accordance with the avowed policy of the State to give maximum aid
and full protection to labor, the Court has applied the Labor Code concept of
permanent total disability to Filipino seafarers, it holding that the notion of
disability is intimately related to the worker's capacity to earn, what is
compensated being not his injury or illness but his inability to work resulting in
the impairment of his earning capacity; hence, disability should be understood
less on its medical significance but more on the loss of earning capacity.
49
(RZALDY M. QUTORANO v. JEBSENS MARTME, NC., G.R. No. 179868,
January 21, 2010)

O Prescription of Seafarer Money Claims

Based on the foregoing, it is therefore clear that Article 291 is the law
governing the prescription of money claims of seafarers, a class of overseas
contract workers. This law prevails over Section 28 of the Standard Employment
Contract for Seafarers which provides for claims to be brought only within one
year from the date of the seafarer's return to the point of hire. Thus, for the
guidance of all, Section 28 of the Standard Employment Contract for Seafarers,
insofar as it limits the prescriptive period within which the seafarers may file their
money claims, is hereby declared null and void. The applicable provision is
Article 291 of the Labor Code, it being more favorable to the seafarers and more
in accord with the State's declared policy to afford full protection to labor. The
prescriptive period in the present case is thus three years from the time the
cause of action accrues. (SOUTHEASTERN SHPPNG,SOUTHEASTERN
SHPPNG GROUP, LTD., G.R. No. 167678, June 22, 2010)

Thus, when petitioner signed his contract with respondent on 22
December 2001, it was the 2000 POEA Standard Employment Contract that was
already in effect. Consequently, his action, which was filed on 10 June 2004, was
filed within the three year prescription period under the 2000 POEA Standard
Employment Contract. Despite having filed his action within the prescriptive
period, his action must fail. (ARNALDO G. GABUNAS, SR.,v. SCANMAR
MARTME SERVCES SERENO, JJ.NC., G.R. No. 188637, December 15,
2010)

Security of Tenure of Probationary EmpIoyee

Respondent was constructively dismissed and, therefore, illegally
dismissed. Although respondent was a probationary employee, he was still
entitled to security of tenure. Section 3 (2) Article 13 of the Constitution
guarantees the right of all workers to security of tenure. n using the expression
"all workers, the Constitution puts no distinction between a probationary and a
permanent or regular employee. This means that probationary employees cannot
be dismissed except for cause or for failure to qualify as regular employees.
(SHS PERFORATED MATERALS, NC., WNFRED HARTMANNSHENN, and
HNRCH JOHANN SCHUMACHER v. MANUEL F. DAZ, G.R. No. 185814,
October 13, 2010)

50
Separation Pay

We are aware that in several instances this Court has awarded separation
pay as a measure of social justice. However, the matter of the award of
separation pay based on social justice has been clarified in Philippine Long
Distance Telephone Company v. National Labor Relations Commission where
the Court categorically declared that "separation pay shall be allowed as a
measure of social justice only in those instances where the employee is validly
dismissed for cause other than serious misconduct x x x. Likewise, we ruled
in Toyota Motor Philippines Corp. Workers Association (TMPCWA) v. National
Labor Relations Commission that in addition to serious misconduct, separation
pay should not be conceded to an employee who was dismissed based on willful
disobedience. (Equitable PC Bank (Now Banco De Oro Unibank, nc.), v. Castor
A. Dompor, G.R. Nos. 163293 & 163297, December 8, 2010)

Petitioner's liability, however, cannot extend to the payment of separation
pay. An order to pay separation pay is invested with a punitive character, such
that an indirect employer should not be made liable without a finding that it had
conspired in the illegal dismissal of the employees. (GOVERNMENT SERVCE
NSURANCE SYSTEM v. NATONAL LABOR RELATONS COMMSSON
(NLRC), ET. Al., G.R. No. 180045, November 17, 2010 )

n other words, under the present jurisprudential framework, the grant of
separation pay as a matter of equity to a validly dismissed employee is not
contingent on whether the ground for dismissal is expressly under Article 282(a)
but whether the ground relied upon is akin to serious misconduct or involves
willful or wrongful intent on the part of the employee. (NATONAL LABOR
RELATONS COMMSSON and ADA M. QUJANO v. PHLPPNE ARLNES,
NC. G.R. No. 123294,October 20, 2010)

Under the circumstances, the grant of separation pay in lieu of
reinstatement of the petitioners was proper. t is not disputable that the grant of
separation pay or some other financial assistance to an employee is based on
equity, which has been defined as justice outside law, or as being ethical rather
than jural and as belonging to the sphere of morals than of law.
4[21]
This Court
has granted separation pay as a measure of social justice even when an
employee has been validly dismissed, as long as the dismissal has not been due
to serious misconduct or reflective of personal integrity or morality. (DANLO
ESCARO v. NATONAL LABOR RELATONS COMMSSON, G.R. No. 160302,
September 27, 2010)

An employee who is illegally dismissed is entitled to the twin reliefs of full
backwages and reinstatement. f reinstatement is not viable, separation pay is
awarded to the employee. n awarding separation pay to an illegally dismissed

51
employee, in lieu of reinstatement, the amount to be awarded shall be equivalent
to one month salary for every year of service. Under Republic Act No. 6715,
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. Moreover, respondents, having been compelled to litigate in order to
seek redress for their illegal dismissal, are entitled to the award of attorney's fees
equivalent to 10% of the total monetary award. (PCOP RESOURCES,
NCORPORATED (PR), v. ANACLETO L. TAECA, G.R. No. 160828, August 9,
2010)

n awarding separation pay to an illegally dismissed employee, in lieu of
reinstatement, the amount to be awarded shall be equivalent to one month salary
for every year of service reckoned from the first day of employment until the
finality of the decision. Payment of separation pay is in addition to payment of
backwages. And if separation pay is awarded instead of reinstatement,
backwages shall be computed from the time of illegal termination up to the finality
of the decision. (AGRCULTURAL AND NDUSTRAL SUPPLES
CORPORATON,et. al., v. JUEBER P. SAZAR G.R. No. 177970, August 25,
2010)

n the instant case, this Court rules that an award to respondent of
separation pay by way of financial assistance, equivalent to one-half (1/2)
month's pay for every year of service, is equitable. Although respondent's
actions constituted a valid ground to terminate his services, the same is to this
Court's mind not so reprehensible as to warrant complete disregard of his long
years of service. t also appears that the same is respondent's first offense. While
it may be expected that petitioners will argue that respondent has only been in
their service for four years since the merger of Pharmacia and Upjohn took place
in 1996, equity considerations dictate that respondent's tenure be computed from
1978, the year when respondent started working for Upjohn. (PHARMACA and
UPJOHN, NC. (now PFZER PHLPPNES, NC.) v. RCARDO P. ALBAYDA,
JR., G.R. No. 172724 August 23, 2010)

An employee who is illegally dismissed is entitled to the twin reliefs of full
backwages and reinstatement. f reinstatement is not viable, separation pay is
awarded to the employee. n awarding separation pay to an illegally dismissed
employee, in lieu of reinstatement, the amount to be awarded shall be equivalent
to one month salary for every year of service. Under Republic Act No. 6715,
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
52
decision. Thus, Casio, et al. are entitled to backwages and separation pay
considering that reinstatement is no longer possible because the positions they
previously occupied are no longer existing, as declared by GMC.
(GENERALMLLNG CORPORATON, v. ERNESTO CASO, et al., G.R. No.
149552, March 10, 2010)

Separation pay, on the other hand, is equivalent to one month pay for
every year of service, a fraction of six months to be considered as one whole
year. Here that would begin from January 31, 1994 when petitioner Belen began
his service. Technically the computation of his separation pay would end on the
day he was dismissed on August 20, 1999 when he supposedly ceased to render
service and his wages ended. But, since Belen was entitled to collect
backwages until the judgment for illegal dismissal in his favor became final, here
on September 22, 2008, the computation of his separation pay should also end
on that date. (DANEL P. JAVELLANA , JR.,V. ALBNO BELEN, G.R. No.
181913, ALBNO BELEN V. DANEL P. JAVELLANA, JR. and JAVELLANA
FARMS, NC., G.R. No. 182158, March 5, 2010)

O Separation Pay/ackwages

The awards of separation pay and backwages are not mutually exclusive
and both may be given to the respondent. n Nissan North Edsa alintawak,
Quezon City v. Serrano, Jr., the Court held that:

The normal consequences of a finding that an employee has
been illegally dismissed are, firstly, that the employee becomes
entitled to reinstatement to his former position without loss of
seniority rights and, secondly, the payment of backwages
corresponding to the period from his illegal dismissal up to actual
reinstatement. The statutory intent on this matter is clearly
discernible. Reinstatement restores the employee who was unjustly
dismissed to the position from which he was removed, that is, to his
status quo ante dismissal, while the grant of backwages allows the
same employee to recover from the employer that which he had lost
by way of wages as a result of his dismissal. These twin remedies
reinstatement and payment of backwages make the dismissed
employee whole who can then look forward to continued
employment. Thus, do these two remedies give meaning and
substance to the constitutional right of labor to security of tenure.
The two forms of relief are distinct and separate, one from the
other. Though the grant of reinstatement commonly carries with it
an award of backwages, the inappropriateness or non-availability of
one does not carry with it the inappropriateness or non-availability
of the other. x x x As the term suggests, separation pay is the
amount that an employee receives at the time of his severance from
53
the service and x x x is designed to provide the employee with "the
wherewithal during the period that he is looking for another
employment. n the instant case, the grant of separation pay was a
substitute for immediate and continued re-employment with the
private respondent Bank. The grant of separation pay did not
redress the injury that is intended to be relieved by the second
remedy of backwages, that is, the loss of earnings that would have
accrued to the dismissed employee during the period between
dismissal and reinstatement. Put a little differently, payment of
backwages is a form of reIief that restores the income that was
Iost by reason of unIawfuI dismissaI; separation pay, in
contrast, is oriented towards the immediate future, the
transitionaI period the dismissed empIoyee must undergo
before Iocating a repIacement job. x x x The grant of separation
pay was a proper substitute onIy for reinstatement; it couId not
be an adequate substitute both for reinstatement and for
backwages. (Emphasis supplied.)

The case is, therefore, remanded to the Labor Arbiter for the purpose of
computing the proper monetary award due to the respondent. (CENTURY
CANNNG CORPORATON, RCARDO T. PO, JR. and AMANCO C.
RONQULLO v. VCENTE RANDY R. RAML, G.R. No. 171630, August 8, 2010)

The basis for the payment of backwages is different from that for the
award of separation pay. Separation pay is granted where reinstatement is no
longer advisable because of strained relations between the employee and the
employer. Backwages represent compensation that should have been earned
but were not collected because of the unjust dismissal. The basis for computing
backwages is usually the length of the employee's service while that for
separation pay is the actual period when the employee was unlawfully prevented
from working. (GOLDEN ACE BULDERS v. JOSE A. TALDE, G.R. No. 187200
May 5, 2010)
SociaI Justice

Bitter labor disputes, especially strikes, always generate a throng of odium
and abhorrence that sometimes result in unpleasant, although unwanted,
consequences. Considering this, the striking employees' breach of certain
restrictions imposed on their concerted actions at their employer's doorsteps
cannot be regarded as so inherently wicked that the employer can totally
disregard their long years of service prior to such breach. The records also fail to
disclose any past infractions committed by the dismissed Union members.
Taking these circumstances in consideration, the Court regards the award of
financial assistance to these Union members in the form of one-half month salary
for every year of service to the company up to the date of their termination as
54
equitable and reasonable. (C. ALCANTARA & SONS, NC. v. COURT OF
APPEALS, et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220,
September 29, 2010)

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 those with less privileges in life, the Supreme 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. (PHLPPNE
RURAL RECONSTRUCTON MOVEMENT( RRM)v.VRGLO E. PULGAR, G.R.
No. 169227, July 5, 2010)

Nonetheless, given the attendant circumstances in this case, namely, that
Artificio had been working with the company for a period of sixteen (16) years
and without any previous derogatory record, the ends of social and
compassionate justice would be served if Artificio be given same equitable relief
in the form of separation pay. (JOSE P. ARTFCO v. NATONAL LABOR
RELATONS COMMSSON, G.R. No. 172988, July 26, 2010

Strained ReIationship

We are in accord with the pronouncement of the CA that the reinstatement
of Loreta to her former position is no longer feasible in the light of the strained
relations between the parties. Reinstatement, under the circumstances, would
no longer be practical as it would not be in the interest of both parties. Under the
law and jurisprudence, an illegally dismissed employee is entitled to two reliefs -
backwages and reinstatement, which are separate and distinct. f reinstatement
would only exacerbate the tension and further ruin the relations of the employer
and the employee, or if their relationship has been unduly strained due to
irreconcilable differences, particularly where the illegally dismissed employee
held a managerial or key position in the company, it would be prudent to order
payment of separation pay instead of reinstatement. n the case of Golden Ace
uilders v. Talde, We wrote:
Under the doctrine of strained relations, the payment of separation
pay has been considered an acceptable alternative to reinstatement
when the latter option is no longer desirable or viable. On the one
hand, such payment liberates the employee from what could be a
highly oppressive work environment. On the other, the payment
releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.

55
(WENSHA SPA CENTER, NC. v. LORETA T. YUNG, G.R. No. 185122,
August 16, 2010)

The Court has held that, under Article 279 of the Labor Code, separation
pay may be awarded to an illegally dismissed employee in lieu of reinstatement
when continued employment is no longer possible where, as in this case, the
continued relationship between the employer and the employee is no longer
viable due to strained relations between them and reinstatement appears no
longer practical due to the length of time that had since passed.
(AGRCULTURAL AND NDUSTRAL SUPPLES CORPORATON,et. al., v.
JUEBER P. SAZAR G.R. No. 177970, August 25, 2010)

Strike
O Dismissal of &nion Officers

n the present case, respondents Erlinda Vazquez, Ricardo Sacristan,
Leonida Catalan, Maximo Pedro, Nathaniela Dimaculangan, Rodolfo Mojico,
Romeo Caramanza, Reynaldo Ganitano, Alberto Basconcillo,

and Ramon Falcis
stand to be dismissed as participating union officers, pursuant to Article 264(a),
paragraph 3, of the Labor Code. This provision imposes the penalty of dismissal
on "any union officer who knowingly participates in an illegal strike. The law
grants the employer the option of declaring a union officer who participated in an
illegal strike as having lost his employment. (PHMCO NDUSTRES, NC. v.
PHMCO NDUSTRES LABOR ASSOCATON (PLA), et al,G.R. No. 170830,
August 11, 2010)
O Conseq:ence of Illegal Strike

Contemplating two causes for the dismissal of an employee, that is: (a)
unlawful lockout; and (b) participation in an illegal strike, the third paragraph of
Article 264(a) authorizes the award of full backwages only when the termination
of employment is a consequence of an unlawful lockout. On the consequences of
an illegal strike, the provision distinguishes between a union officer and a union
member participating in an illegal strike. A union officer who knowingly
participates in an illegal strike is deemed to have lost his employment status, but
a union member who is merely instigated or induced to participate in the illegal
strike is more benignly treated. Part of the explanation for the benign
consideration for the union member is the policy of reinstating rank-and-file
workers who are misled into supporting illegal strikes, absent any finding that
such workers committed illegal acts during the period of the illegal strikes.
(DANLO ESCARO v. NATONAL LABOR RELATONS COMMSSON, G.R.
No. 160302, September 27, 2010)

56
As regards the rank and file Union members, Article 264 of the Labor
Code provides that termination from employment is not warranted by the mere
fact that a union member has taken part in an illegal strike. t must be shown that
such a union member, clearly identified, performed an illegal act or acts during
the strike. (C. ALCANTARA & SONS, NC. v. COURT OF APPEALS, et al.,G.R.
No. 155109, G.R. No. 155135, G.R. No. 179220, September 29, 2010)

We explained in Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU
v. Sulpicio Lines, Inc. that the effects of illegal strikes, outlined in Article 264 of
the Labor Code, make a distinction between participating workers and union
officers. The services of an ordinary striking worker cannot be terminated for
mere participation in an illegal strike; proof must be adduced showing that he or
she committed illegal acts during the strike. The services of a participating union
officer, on the other hand, may be terminated, not only when he actually commits
an illegal act during a strike, but also if he knowingly participates in an illegal
strike. (PHMCO NDUSTRES, NC. v. PHMCO NDUSTRES LABOR
ASSOCATON (PLA), et al,G.R. No. 170830, August 11, 2010)

O #eq:isites of a Valid Strike

Since strikes affect not only the relationship between labor and
management but also the general peace and progress of the community, the law
has provided limitations on the right to strike. Procedurally, for a strike to be valid,
it must comply with Article 263 of the Labor Code, which requires that: (a) a
notice of strike be filed with the Department of Labor and Employment (DOLE) 30
days before the intended date thereof, or 15 days in case of unfair labor practice;
(b) a strike vote be approved by a majority of the total union membership in the
bargaining unit concerned, obtained by secret ballot in a meeting called for that
purpose; and (c) a notice be given to the DOLE of the results of the voting at
least seven days before the intended strike. PHIMCO INDUSTRIES, INC. v.
PHIMCO INDUSTRIES LAOR ASSOCIATION PILA, et aI,G.R. No. ,
August 11, 2010)

O Picketing

To strike is to withhold or to stop work by the concerted action of
employees as a result of an industrial or labor dispute. The work stoppage may
be accompanied by picketing by the striking employees outside of the company
compound. While a strike focuses on stoppage of work, picketing focuses on
publicizing the labor dispute and its incidents to inform the public of what is
happening in the company struck against. A picket simply means to march to
and from the employer's premises, usually accompanied by the display of
placards and other signs making known the facts involved in a labor dispute. t is
57
a strike activity separate and different from the actual stoppage of work.
(PHMCO NDUSTRES, NC. v. PHMCO NDUSTRES LABOR ASSOCATON
(PLA), et al,G.R. No. 170830, August 11, 2010)

O Prohibited Activities

With a virtual human blockade and real physical obstructions (benches
and makeshift structures both outside and inside the gates), it was pure
conjecture on the part of the NLRC to say that "[t]he non-strikers and their
vehicles were x x x free to get in and out of the company compound
undisturbed by the picket line. Notably, aside from non-strikers who wished to
report for work, company vehicles likewise could not enter and get out of the
factory because of the picket and the physical obstructions the respondents
installed. The blockade went to the point of causing the build up of traffic in the
immediate vicinity of the strike area, as shown by photographs. This, by itself,
renders the picket a prohibited activity. Pickets may not aggressively interfere
with the right of peaceful ingress to and egress from the employer's shop or
obstruct public thoroughfares; picketing is not peaceful where the sidewalk or
entrance to a place of business is obstructed by picketers parading around in a
circle or lying on the sidewalk. (PHMCO NDUSTRES, NC. v. PHMCO
NDUSTRES LABOR ASSOCATON (PLA), et al,G.R. No. 170830, August 11,
2010)

Termination of EmpIoyment
:st Ca:ses
O Serio:s Miscond:ct

t is noteworthy that prior to this incident, there had been several cases of
theft and vandalism involving both respondent company's property and personal
belongings of other employees. n order to address this issue of losses,
respondent company issued two memoranda implementing an intensive
inspection procedure and reminding all employees that those who will be caught
stealing and performing acts of vandalism will be dealt with in accordance with
the company's Code of Conduct. Despite these reminders, Helen took the
packing tape and was caught during the routine inspection. All these
circumstances point to the conclusion that it was not just an error of judgment on
the part of Helen, but a deliberate act of theft of company property.
(NAGKAKASANG LAKAS NG MANGGAGAWA SA KEHN (NLMK-OLALA-
KMU) and HELEN VALENZUELA v. KEHN PHLPPNES CORPORATON,
G.R. No. 171115, August 9, 2010)

58
Respondent's acts constitute serious misconduct which is a just cause for
termination under the law. Theft committed by an employee is a valid reason for
his dismissal by the employer. Although as a rule this Court leans over
backwards to help workers and employees continue with their employment or to
mitigate the penalties imposed on them, acts of dishonesty in the handling of
company property, petitioner's income in this case, are a different matter.
(MARBAGO BLUEWATER BEACH RESORT, NC. v. NTO DUAL, G.R. No.
180660, July 20, 2010)

Withal, the law, in protecting the rights of the laborers, authorizes neither
oppression nor self-destruction of 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. The management also has its own rights, as such, are entitled to
respect and enforcement in the interest of simple fair play. Out of its concern for
those with less privileges in life, the Supreme 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 applicable law and doctrine. (MARBAGO BLUEWATER BEACH RESORT,
NC. v. NTO DUAL, G.R. No. 180660, July 20, 2010)

n other words, in order to constitute serious misconduct which will warrant
the dismissal of an employee under paragraph (a) of Article 282 of the Labor
Code, it is not sufficient that the act or conduct complained of has violated some
established rules or policies. t is equally important and required that the act or
conduct must have been performed with wrongful intent. n the instant case,
petitioners-employees of Promm-Gem may have committed an error of judgment
in claiming to be employees of P&G, but it cannot be said that they were
motivated by any wrongful intent in doing so. As such, we find them guilty of only
simple misconduct for assailing the integrity of Promm-Gem as a legitimate and
independent promotion firm. A misconduct which is not serious or grave, as that
existing in the instant case, cannot be a valid basis for dismissing an employee.
(JOEB M. ALVADO, et al. v. PROCTER & GAMBLE PHLS., NC.,and PROMM-
GEM NC., G.R. No. 160506, March 9, 2010)

Based on these considerations, we can only conclude that Lado has
become unfit to remain in employment with the petitioner. When he disregarded
Manalo's note, Lado violated company procedures, laying the company open to
the possibility of loss. This is already serious misconduct for which he should be
held accountable. When he failed to unload despite the clear obligation to do so,
he consummated his end of the deal that would have led to the loss of company
property and thereby violated his fiduciary duty as custodian of company
property. (BBANA FARMS AND MLLS, NC v. ARTURO LADO, G.R. No.
157861, February 2, 2010)
59

Considering these findings, it is clear that Agad committed a serious
infraction amounting to theft of company property. This act is akin to a or willful
disobedience by the employee of the lawful orders of his employer in connection
with his work, a just cause for termination of employment recognized under
Article 282(a) of the Labor Code.

Misconduct has been defined as 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 be serious, the
misconduct must be of such grave and aggravated character. (CALTEX
(PHLPPNES), NC., v. HERME G. AGAD, G.R. No. 162017, April 23, 2010)

O illf:l Disobedience

As a just cause for dismissal of an employee under Article 282 of the
Labor Code, willful disobedience of the employer's lawful orders requires the
concurrence of two elements: (1) the employee's assailed conduct must have
been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee,
and must pertain to the duties which he had been engaged to discharge. Both
requisites are present in the instant case. t is noteworthy that upon receipt of
the notice of suspension, petitioner did not question such order at the first
instance. He immediately defied the order by reporting on the first day of his
suspension. Deliberate disregard or disobedience of rules by the employee
cannot be countenanced. t may encourage him to do even worse and will
render a mockery of the rules of discipline that employees are required to
observe. (JMMY ARENO, JR., v. SKYCABLE PCC-BAGUO, G.R. No. 180302,
February 5, 2010)

As a just cause for dismissal of an employee under Article 282 of the
Labor Code, willful disobedience of the employer's lawful orders requires the
concurrence of two elements: (1) the employee's assailed conduct must have
been willful, i.e., characterized by a wrongful and perverse attitude; and (2) the
order violated must have been reasonable, lawful, made known to the employee,
and must pertain to the duties which he had been engaged to discharge. Both
requisites are present in the instant case. t is noteworthy that upon receipt of
the notice of suspension, petitioner did not question such order at the first
instance. He immediately defied the order by reporting on the first day of his
suspension. Deliberate disregard or disobedience of rules by the employee
cannot be countenanced. t may encourage him to do even worse and will
render a mockery of the rules of discipline that employees are required to
observe. (JMMY ARENO, JR., v. SKYCABLE PCC-BAGUO, G.R. No. 180302,
February 5, 2010)
60
O Gross and abit:al eglect of D:ty

t is significant that petitioner did not even deny that it was he who signed,
approved and facilitated the subject transactions relating to the various
abstractions committed by a bank employee. t was an implied admission that he
was the one who opened the door for the commission of the unlawful
abstractions by failing to ensure that all requirements for the opening of accounts
were complied with. This constituted gross negligence. (JESUS E. DYCOCO, JR.
v. EQUTABLE PC BANK (NOW BANCO DE ORO) , G.R. No. 188271,August
16, 2010)

Under Article 282 (b) of the Labor Code, an employer may terminate an
employee for gross and habitual neglect of duties. Neglect of duty, to be a
ground for dismissal, must be both gross and habitual. Gross negligence
connotes want of care in the performance of one's duties. Habitual neglect
implies repeated failure to perform one's duties for a period of time, depending
upon the circumstances. A single or isolated act of negligence does not
constitute a just cause for the dismissal of the employee. Under the prevailing
circumstances, respondent exercised his best judgment in monitoring the CCTV
cameras so as to ensure the security within the hospital premises. Verily,
assuming arguendo that respondent was negligent, although this Court finds
otherwise, the lapse or inaction could only be regarded as a single or isolated act
of negligence that cannot be categorized as habitual and, hence, not a just cause
for his dismissal. (ST. LUKE'S MEDCAL CENTER, NC v. ESTRELTO
NOTARO, G.R. No. 152166, October 20, 2010)

O oss of Tr:st and Confidence

With respect to the third issue, while We have previously held that
employers are allowed a wider latitude of discretion in terminating the services of
employees who perform functions which by their nature require the employers'
full trust and confidence and the mere existence of basis for believing that the
employee has breached the trust of the employer is sufficient, this does not mean
that the said basis may be arbitrary and unfounded. (CENTURY CANNNG
CORPORATON, RCARDO T. PO, JR. and AMANCO C. RONQULLO v.
VCENTE RANDY R. RAML, G.R. No. 171630, August 8, 2010)

We cannot give credence to petitioner's claim that the Labor Arbiter and
the NLRC decided his case purely on the basis of respondent's evidence. A
perusal of petitioner's own pleadings and evidence readily showed his admission
that he personally processed the two Certificates of Time Deposit (CTDs) at
issue, despite his knowledge that they were unfunded. n fact, he admittedly
issued them even before he received the purported manager's checks that would
fund the time deposits and, again by his own allegation, he had to cancel the
61
CTDs when the promised checks were not delivered to him at the appointed
time. To be sure, it is incomprehensible why petitioner was so eager to issue the
CTDs (which may be used as evidence of the existence of time deposits in the
names of petitioner's clients for the total amount of P538,360,000.00) on the
mere verbal representations of the clients and the expedient of being shown a
passbook from a different bank. We hardly find it believable that petitioner was,
as he averred, motivated by a noble desire to generate more business for the
respondent bank. f he truly had the bank's best interests at heart, with more
reason that he would exercise caution before issuing CTDs for enormous
amounts by waiting for the funds to be actually deposited instead of exposing his
employer to great risk. The fact that petitioner had the unfunded CTDs
eventually cancelled is of no moment. He should have never issued those CTDs
in the first place since, through those documents, he was in effect certifying the
existence of time deposits in his branch that were actually fictitious. Thus, it can
be said that his obvious laxity or negligence in the issuance of the said CTDs
was even tainted with dishonesty. We can come to no other conclusion but that
respondent bank was justified in terminating petitioner's employment on the
ground of loss of trust and confidence. (LEANDRO M. ALCANTARA v. THE
PHLPPNE COMMERCAL AND NTERNATONAL BANK ,G.R. No. 151349,
October 20, 2010)

After committing gross negligence, petitioner surprisingly still expects
respondent bank to retain him. Nothing can compel an employer to continue
availing of the services of an employee guilty of acts inimical to its interests as
this is a ground for loss of confidence. Petitioner's breach of respondent bank's
policies intended to safeguard the bank and its clients' funds was clearly inimical
to the interests of his employer. Loss of confidence and dismissal from
employment were therefore justified. (JESUS E. DYCOCO, JR. v. EQUTABLE
PC BANK (NOW BANCO DE ORO), G.R. No. 188271, August 16, 2010)

Further, Agad's conduct constitutes willful breach of the trust reposed in
him, another just cause for termination of employment recognized under Article
282(c) of the Labor Code. Loss of trust and confidence, as a just cause for
termination of employment, 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.

As a superintendent, Agad occupied a position tasked to perform key and
sensitive functions which necessarily involved the custody and protection of
Caltex's properties. Consequently, Agad comes within the purview of the trust
and confidence rule. (CALTEX (PHLPPNES), NC., v. HERME G. AGAD,
G.R. No. 162017, April 23, 2010)

62
A:thorized Ca:ses
O Cessation of :siness Operation

The Court is not impressed with the claim that actual severe financial
losses exempt MMC from paying separation benefits to complainants. n the first
place, MMC did not appeal the decision of the Court of Appeals which affirmed
the NLRC's award of separation pay to complainants. MMC's failure had the
effect of making the awards final so that MMC could no longer seek any other
affirmative relief. n the second place, the non-issuance of a permit forced MMC
to permanently cease its business operations, as confirmed by the Court of
Appeals. Under Article 283, the employer can lawfully close shop anytime as
long as cessation of or withdrawal from business operations is bona fide in
character and not impelled by a motive to defeat or circumvent the tenurial rights
of employees, and as long as he pays his employees their termination pay in the
amount corresponding to their length of service. The cessation of operations, in
the case at bar is of such nature. t was proven that MMC stopped its operations
precisely due to failure to secure permit to operate a tailings pond. Separation
pay must nonetheless be given to the separated employees. (MANLA MNNG
CORP. EMPLOYEES ASSOCATON-FEDERATON OF FREE WORKERS
CHAPTER, SAMUEL G. ZUGA, in his capacity as President v. MANLA
MNNG CORP., et. al., G.R. Nos. 178222-23, September 29, 2010)

Furthermore, petitioner cannot use the argument that it is suffering from
financial losses to claim exemption from the coverage of the law on 13
th
-month
pay, or to spare it from its erroneous unilateral computation of the 13
th
(CENTRAL
AZUCARERA DE TARLAC DECSON v. CENTRAL AZUCARERA DE TARLAC
LABOR UNON-NLU, G.R. No. 188949, July 26, 2010)

O #ed:ndancy

Del Villar's poor employee performance is irrelevant as regards the issue on
redundancy. Redundancy arises because there is no more need for the employee's
position in relation to the whole business organization, and not because the employee
unsatisfactorily performed the duties and responsibilities required by his position.
(COCA-COLA BOTTLERS PHLPPNES, NC v. ANGEL U. DEL VLLAR, G.R. No.
163091, October 6, 2010)

n this case, there is no proof that the essential requisites for a valid redundancy
program as a ground for the termination of the employment of respondent are present.
There was no showing that the function of respondent is superfluous or that the
business was suffering from a serious downturn that would warrant redundancy
considering that such serious business downturn was the ground cited by petitioners in
the termination letter sent to respondent. (LAMBERT PAWNBROKERS and JEWELRY
63
CORPORATON and LAMBERT LM v. HELEN BNAMRA, G.R. No. 170464, July 12,
2010)
O #etrenchment

Respondent, in any of the pleadings filed by him, never refuted the
foregoing facts. Respondent's argument that he was singled out for termination
as allegedly shown in petitioner's monthly termination report for the month of July
1997 filed with the DOLE does not persuade this Court. Standing alone, this
document is not proof of the total number of retrenched employees or that
respondent was the only one retrenched. t merely serves as notice to DOLE of
the names of employees terminated/ retrenched only for the month of July. n
other words, it cannot be deemed as an evidence of the number of employees
affected by the retrenchment program. Thus we cannot conclude that no other
employees were previously retrenched. (SHMZU PHLS. CONTRACTORS,
NC. v. VRGLO P. CALLANTA, G.R. No. 165923, September 29, 2010)

Fourth. TSF resorted to other measures to abate its losses. t claimed
that during the crises period, it used as an office a small-room (a mere cubicle)
with only a two-person support staff in the persons of Grapilon and Hermle; it
reduced the salaries of its employees by as much as 30%. This submission by
the company is substantiated by the schedule of Operating Expenses for the
year ended December 31, 2002 and September 30, 2002. A quick glance at the
schedule readily shows a reduction of TSF's operating expenses across the
board. The schedule indicates a substantial decrease in the operating expenses,
from P5,733,735.00 in September 2002 to P1,698,552.36 as of the end of
December 2002.
On the whole, we find that TSF satisfied the requisites for a valid
retrenchment. (FRANCS RAY TALAM V. NATONAL LABOR RELATONS
COMMSSON, G.R. No. 175040, April 6, 2010)

Types of EmpIoyees

O Field Personnel

t bears emphasis that under P.D. 851 or the SL Law, the exclusion from
its coverage of workers who are paid on a purely commission basis is only with
respect to field personnel. The more recent case of Auto us Transport Systems,
Inc., v. autista clarifies that an employee who is paid on purely commission
basis is entitled to SL:

A careful perusal of said provisions of law will result in the
conclusion that the grant of service incentive leave has been delimited by
64
the mplementing Rules and Regulations of the Labor Code to apply only
to those employees not explicitly excluded by Section 1 of Rule V.
According to the mplementing Rules, Service ncentive Leave shall not
apply to employees classified as "field personnel. The phrase "other
employees whose performance is unsupervised by the employer must not
be understood as a separate classification of employees to which service
incentive leave shall not be granted. Rather, it serves as an amplification
of the interpretation of the definition of field personnel under the Labor
Code as those "whose actual hours of work in the field cannot be
determined with reasonable certainty.

The same is true with respect to the phrase "those who are engaged on
task or contract basis, purely commission basis." Said phrase should be related
with "field personnel, applying the rule on ejusdem generis that general and
unlimited terms are restrained and limited by the particular terms that they follow.
Hence, employees engaged on task or contract basis or paid on purely
commission basis are not automatically exempted from the grant of service
incentive leave, unless, they fall under the classification of field personnel.
x x x x

According to Article 82 of the Labor Code, "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. This
definition is further elaborated in the ureau of Working Conditions (WC),
Advisory Opinion to Philippine Technical-Clerical Commercial Employees
Association which states that:

As a general rule, [field personnel] are those whose performance of
their job/service is not supervised by the employer or his
representative, the workplace being away from the principal office
and whose hours and days of work cannot be determined with
reasonable certainty; hence, they are paid specific amount for
rendering specific service or performing specific work. If required to
be at specific places at specific times, employees including drivers
cannot be said to be field personnel despite the fact that they are
performing work away from the principal office of the employee.
x x x x (emphasis, italics and underscoring supplied)

(RODOLFO J. SERRANO v. SEVERNO SANTOS TRANST G.R. No. 187698,
August 9, 2010)

65
O Project mployee

A project employee is assigned to a project which begins and ends at
determined or determinable times. Employees who work under different project
employment contracts for several years do not automatically become regular
employees; they can remain as project employees regardless of the number of
years they work. Length of service is not a controlling factor in determining the
nature of one's employment. Their rehiring is only a natural consequence of the
fact that experienced construction workers are preferred. n fact, employees who
are members of a "work pool from which a company draws workers for
deployment to its different projects do not become regular employees by reason
of that fact alone. The Court has consistently held that members of a "work pool
can either be project employees or regular employees. (JUDY O. DACUTAL , et.
al. v. L.M. CAMUS ENGNEERNG CORPORATON and/or LUS M. CAMUS,
G.R. No. 176748, September 1, 2010)

But the test for distinguishing a "project employee from a "regular
employee is whether or not he has been assigned to carry out a "specific project
or undertaking, with the duration and scope of his engagement specified at the
time his service is contracted. Here, it is not disputed that petitioner company
contracted respondent Trinidad's service by specific projects with the duration of
his work clearly set out in his employment contracts. He remained a project
employee regardless of the number of years and the various projects he worked
for the company. (WLLAM UY CONSTRUCTON CORP. and/or TERESTA UY
and WLLAM UY V. JORGE R. TRNDAD, G.R. No. 183250, March 10, 2010)

O #eg:lar mployee

Assuming arguendo that petitioner hired respondent initially on a per
project basis, his continued rehiring, as shown by the sample payrolls converted
his status to that of a regular employee. Following Cocomangas each otel
Resort v. Visca, the repeated and continuing need for respondent's services is
sufficient evidence of the necessity, if not indispensability, of his services to
petitioner's business and, as a regular employee, he could only be dismissed
from employment for a just or authorized cause. (MLLENNUM ERECTORS
CORPORATON v. VRGLO MAGALLANES, G.R. No. 184362, November 15,
2010)

The primary standard of determining 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. n this case, the
connection is obvious when we consider the nature of the work performed and its
relation to the scheme of the particular business or trade in its entirety. Finally,
the repeated and continuing need for the performance of the job is sufficient
evidence of the necessity, if not indispensability of the activity to the business.
66
(MANLA WATER COMPANY, NC. v. JOSE J. DALUMPNES, G.R. No. 175501,
October 4, 2010)

QuitcIaims

The Receipt and Quitclaim executed by respondent lacks the elements of
voluntariness and free will and, therefore, does not absolve petitioners from
liability in paying him the sickness wages and other monetary claims.
(VARORENT SHPPNG CO., NC., and.,d ARA MARTME CO., LTD v. GL A.
FLORES, G.R. No. 161934, October 6, 2010)

A perusal of the provisions of the Receipt and Quitclaim shows that
respondent would be releasing and discharging petitioners from all claims,
demands, causes of action, and the like in an all-encompassing manner,
including the fact that he had not contracted or suffered any illness or injury in the
course of his employment and that he was discharged in good and perfect
health. These stipulations clearly placed respondent in a disadvantageous
position vis--vis the petitioners. (VARORENT SHPPNG CO., NC., and.,d
ARA MARTME CO., LTD v. GL A. FLORES, G.R. No. 161934, October 6,
2010)

First, the contents of the quitclaim documents that have been signed by
the respondents are simple, clear and unequivocal.

The records of the case are
bereft of any substantial evidence to show that respondents did not know that
they were relinquishing their right short of what they had expected to receive and
contrary to what they have so declared. Put differently, at the time they were
signing their quitclaims, respondents honestly believed that the amounts received
by them were fair and reasonable settlements of the amounts which they would
have received had they refused to voluntarily resign from the said company.
(GOODRCH MANUFACTURNG CORPORATON & MR. NLO CHUA GOY v.
EMERLNA ATVO ET. Al, G.R. No. 188002, February 1, 2010)

Given the release and quitclaim, we do not see how TSF can be made to
answer for failure to afford Talam procedural due process. The release and
quitclaim, to our mind, erased whatever infirmities there might have been in the
notice of termination as Talam had already voluntarily accepted his dismissal
through the release and quitclaim. With this acceptance, the written notice
became academic; the notice, after all, is merely a protective measure put in
place by law and serves no useful purpose after protection has been assured.
We thus find no basis for the conclusion that TSF violated procedural due
process and should pay nominal damages. (FRANCS RAY TALAM V.
NATONAL LABOR RELATONS COMMSSON, G.R. No.175040, April 6, 2010)

67
Teachers' EmpIoyment on Probationary Status

A reality we have to face in the consideration of employment on
probationary status of teaching personnel is that they are not governed purely by
the Labor Code. The Labor Code is s:pplemented with respect to the period of
probation by special rules found in the Manual of Regulations for Private
Schools. On the matter of probationary period, Section 92 of these regulations
provides:

Section 92. Probationary Period. Subject in aII instances to compIiance
with the Department and schooI requirements, the probationary period for
academic personnel shall not be more than three (3) consecutive years of
satisfactory service for those in the elementary and secondary levels, six (6)
consecutive regular semesters of satisfactory service for those in the tertiary
level, and nine consecutive trimesters of satisfactory service for those
in the tertiary IeveI where coIIegiate courses are offered on a trimester
basis. [Emphasis supplied] (YOLANDA M. MERCADO et al. v. AMA
COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010)

O #:le on Probationary Stat:s
and Fied-term mployment of Teachers

Given the clear constitutional and statutory intents, we cannot but
conclude that in a situation where the probationary status overlaps with a fixed-
term contract not specifically used for the fixed term it offers, Article 281 should
assume primacy and the fixed-period character of the contract must give way.
This conclusion is immeasurably strengthened by the petitioners' and the
AMACC's hardly concealed expectation that the employment on probation could
lead to permanent status, and that the contracts are renewable unless the
petitioners fail to pass the school's standards.

To highlight what we mean by a fixed-term contract specifically used for
the fixed term it offers, a replacement teacher, for example, may be contracted
for a period of one year to temporarily take the place of a permanent teacher on
a one-year study leave. The expiration of the replacement teacher's contracted
term, under the circumstances, leads to no probationary status implications as
she was never employed on probationary basis; her employment is for a specific
purpose with particular focus on the term and with every intent to end her
teaching relationship with the school upon expiration of this term.

f the school were to apply the probationary standards (as in fact it says it
did in the present case), these standards must not only be reasonable but must
have also been communicated to the teachers at the start of the probationary
period, or at the very least, at the start of the period when they were to be
applied. These terms, in addition to those expressly provided by the Labor Code,
68
would serve as the just cause for the termination of the probationary contract. As
explained above, the details of this finding of just cause must be communicated
to the affected teachers as a matter of due process. (YOLANDA M. MERCADO
et al. v. AMA COMPUTER COLLEGE, G.R. No. 183572, April 13, 2010)

Thirteenth Month Pay

The argument of petitioner that the grant of the benefit was not voluntary
and was due to error in the interpretation of what is included in the basic salary
deserves scant consideration. No doubtful or difficult question of law is involved
in this case. The guidelines set by the law are not difficult to decipher. The
voluntariness of the grant of the benefit was manifested by the number of years
the employer had paid the benefit to its employees. Petitioner only changed the
formula in the computation of the 13
th
-month pay after almost 30 years and only
after the dispute between the management and employees erupted. This act of
petitioner in changing the formula at this time cannot be sanctioned, as it
indicates a badge of bad faith. (CENTRAL AZUCARERA DE TARLAC
DECSON v. CENTRAL AZUCARERA DE TARLAC LABOR UNON-NLU, G.R.
No. 188949, July 26, 2010)
Transfer

This Court has long stated that the objection to the transfer being
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. Such being the case, respondent cannot adamantly refuse to
abide by the order of transfer without exposing himself to the risk of being
dismissed. Hence, his dismissal was for just cause in accordance with Article
282(a) of the Labor Code. (PHARMACA and UPJOHN, NC. (now PFZER
PHLPPNES, NC.) V. RCARDO P. ALBAYDA, JR., G.R. No. 172724 August
23, 2010)

Transfer of Ownership

On this ground, petitioner terminated the employment of respondents.
However, what petitioner apparently made was a transfer of ownership. t is
true that, as invoked by petitioner, in Manlimos, et al. v. NLRC, et al., we held
that a change of ownership in a business concern is not proscribed by law.
Lest petitioner forget, however, we also held therein that the sale or disposition
must be motivated by good faith as a condition for exemption from liability.
Thus, where the charge of ownership is done in bad faith, or is used to defeat
the rights of labor, the successor-employer is deemed to have absorbed the
employees and is held liable for the transgressions of his or her predecessor.
69
(PEAFRANCA TOURS AND TRAVEL TRANSPORT, NC., v. JOSELTO P.
SARMENTO and RCARDO S. CATMBANG, G.R. No. 178397, October 20,
2010)

Unfair Labor Practice

This is the reason why it is axiomatic in labor relations that a CBA entered into by
a legitimate labor organization that has been duly certified as the exclusive
bargaining representative and the employer becomes the law between them.
Additionally, in the Certificate of Registration issued by the DOLE, it is specified
that the registered CBA serves as the covenant between the parties and has the
force and effect of law between them during the period of its duration.
Compliance with the terms and conditions of the CBA is mandated by express
policy of the law primarily to afford protection to labor and to promote industrial
peace. Thus, when a valid and binding CBA had been entered into by the
workers and the employer, the latter is behooved to observe the terms and
conditions thereof bearing on union dues and representation. f the employer
grossly violates its CBA with the duly recognized union, the former may be held
administratively and criminally liable for unfair labor practice. ( EMPLOYEES
UNON OF BAYER PHLS.,v. BAYER PHLPPNES, NC., G.R. No. 162943,
December 6, 2010)

For a charge of unfair labor practice to prosper, it must be shown that CAB
was motivated by ill will, "bad faith, or fraud, or was oppressive to labor, or done
in a manner contrary to morals, good customs, or public policy, and, of course,
that social humiliation, wounded feelings or grave anxiety resulted x x x in
suspending negotiations with CABEU-NFL. Notably, CAB believed that CABEU-
NFL was no longer the representative of the workers. t just wanted to foster
industrial peace by bowing to the wishes of the overwhelming majority of its rank
and file workers and by negotiating and concluding in good faith a CBA with
CABELA. Such actions of CAB are nowhere tantamount to anti-unionism, the
evil sought to be punished in cases of unfair labor practices. (CENTRAL
AZUCARERA DE BAS EMPLOYEES UNON-NFL [CABEU-NFL] v. CENTRAL
AZUCARERA DE BAS, NC. [CAB], G.R. No. 186605, November 17, 2010)

Unionism

n the case at bar, since the former FEBTC employees are deemed
covered by the Union Shop Clause, they are required to join the certified
bargaining agent, which supposedly has gathered the support of the majority of
workers within the bargaining unit in the appropriate certification proceeding.
Their joining the certified union would, in fact, be in the best interests of the
70
former FEBTC employees for it unites their interests with the majority of
employees in the bargaining unit. t encourages employee solidarity and affords
sufficient protection to the majority status of the union during the life of the CBA
which are the precisely the objectives of union security clauses, such as the
Union Shop Clause involved herein. We are indeed not being called to balance
the interests of individual employees as against the State policy of promoting
unionism, since the employees, who were parties in the court below, no longer
contested the adverse Court of Appeals' decision. Nonetheless, settled
jurisprudence has already swung the balance in favor of unionism, in recognition
that ultimately the individual employee will be benefited by that policy. n the
hierarchy of constitutional values, this Court has repeatedly held that the right to
abstain from joining a labor organization is subordinate to the policy of
encouraging unionism as an instrument of social justice. (BANK OF THE
PHLPPNE SLANDS v. BP EMPLOYEES UNON-DAVAO CHAPTER-
FEDERATON OF UNONS N BP UNBANK, G.R. No. 164301, August 10,
2010)
O &nion Sec:rity and Closed Shop

"Union security is a generic term which is applied to and comprehends
"closed shop, "union shop, "maintenance of membership or any other form of
agreement which imposes upon employees the obligation to acquire or retain
union membership as a condition affecting employment. There is union shop
when all new regular employees are required to join the union within a certain
period for their continued employment. There is maintenance of membership
shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union
membership as a condition for continued employment until they are promoted or
transferred out of the bargaining unit or the agreement is terminated. A closed-
shop, on the other hand, may be defined as an enterprise in which, by agreement
between the employer and his employees or their representatives, no person
may be employed in any or certain agreed departments of the enterprise unless
he or she is, becomes, and, for the duration of the agreement, remains a
member in good standing of a union entirely comprised of or of which the
employees in interest are a part. (BANK OF THE PHLPPNE SLANDS v. BP
EMPLOYEES UNON-DAVAO CHAPTER-FEDERATON OF UNONS N BP
UNBANK, G.R. No. 164301, August 10, 2010)

O mployees not covered by &nion Shop Cla:se

All employees in the bargaining unit covered by a Union Shop Clause in
their CBA with management are subject to its terms. However, under Iaw and
jurisprudence, the foIIowing kinds of empIoyees are exempted from its
coverage, namely, employees who at the time the union shop agreement takes
effect are bona fide members of a religious organization which prohibits its
71
members from joining labor unions on religious grounds; empIoyees aIready in
the service and aIready members of a union other than the majority at the
time the union shop agreement took effect; confidential employees who are
excluded from the rank and file bargaining unit; and empIoyees excIuded from
the union shop by express terms of the agreement. ANK OF THE
PHILIPPINE ISLANDS v. PI EMPLOYEES UNION-DAVAO CHAPTER-
FEDERATION OF UNIONS IN PI UNIANK, G.R. No. , August ,

O Termination of &nion Officers

Three. Since the Union's strike has been declared illegal, the Union
officers can, in accordance with law be terminated from employment for their
actions. This includes the shop stewards. They cannot be shielded from the
coverage of Article 264 of the Labor Code since the Union appointed them as
such and placed them in positions of leadership and power over the men in their
respective work units. (C. ALCANTARA & SONS, NC. v. COURT OF APPEALS,
et al.,G.R. No. 155109, G.R. No. 155135, G.R. No. 179220, September 29,
2010)
WithhoIding of SaIary

Management prerogative refers "to 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 work. Although management prerogative refers to "the right to regulate
all aspects of employment, it cannot be understood to include the right to
temporarily withhold salary/wages without the consent of the employee. To
sanction such an interpretation would be contrary to Article 116 of the Labor
Code, which provides:

ART. . Withholding of wages and kickbacks prohibited. t shall
be unlawful for any person, directly or indirectly, to withhold any
amount from the wages of a worker or induce him to give up any
part of his wages by force, stealth, intimidation, threat or by any
other means whatsoever without the worker's consent.

(SHS PERFORATED MATERALS, NC., WNFRED
HARTMANNSHENN, and HNRCH JOHANN SCHUMACHER v. MANUEL F.
DAZ, G.R. No. 185814, October 13, 2010)

By: RMDeleon

2010 Case Index

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2010 Case Index

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2010 National Labor Relations Commission Case Digest

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