2006 Final Case Index

NLRC Case Index
September 2005 - December 2006
Absorption ...5 Appeal ..6 Perfection of Appeal Period of Appeal Questions of Law Assumption by the Secretary..10 Improper service of Assumption of Jurisdiction Order of the Secretary of Labor Attorneys Fees ..10 Backwages ..11 Computation of Backwages Piece Rate Workers Backwages No Backwages during the Strike Rule Exception to the NO BACKWAGES RULE Bond ....16 Posting of Appeal Bond Effect of Non-Payment of Appeal Bond Supersedeas Bond Bank Certification not a Valid Compliance with the Bond Requirement Liberal Interpretation on Posting of Bond Boundary System ........20 Burden of Proof ....21 Business Judgment Rule...... 25 Certificate of Non-Forum Shopping.26 Liberal interpretation of the rule on forum shopping Certificate of Non-forum Shopping by a Corporation Certiorari..28 Remedies of appeal under Rule 45 and an original action for certiorari under Rule 65; mutually exclusive Classification of Employment....32 a. Regular Employment Househelper as Regular Employee
National Labor Relations Commission Continuous Rehiring of Employees b. Contractual Employment Seafarers are Contractual Employees Collective Bargaining Agreement.37 Command Responsibility 38 Commissions.. 38 Company Investigation.................................... 39 Company Policy.....39 Compromise Agreement......40 Res Judicata Force and Effect of Compromise Agreement Authority to Compromise Confidentiality of Conciliation Proceeding...42 Constructive Dismissal..42 Contract of Employment....43 Alteration of Employment Contract Contract Stipulations Cooperatives.....44 Damages ......44 Decision/Judgment....46 Distinction between Xerox Copies and True Copies Conclusiveness of Decision Finality of Judgment Desertion..48 Determination of Employer-Employee Relationship....48 TWO-TIERED TEST 1. Economic Dependence Test 2. Control Test Supervision and control Relationship of employee, contractor & sub-contractor Diminution of pay ......52 Disability53 Disability" is not synonymous with "sickness" or illness Procedure to claim disability benefits Permanent Total Disability Test of determining permanent total disability Total disability is considered permanent if it lasts continuously for more than 120 days Disability Benefits for Seafarers Death of a seaman even during the term of employment does not automatically give rise to compensation
Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION
National Labor Relations Commission Dismissal/Termination from Employment.58 1. Authorized Causes58 Redundancy Retrenchment Cessation of Operation of Business Establishment Effect of Closure or Cessation of Business Operation Force majeure Requisites for a valid cessation of business operations Notice of Closure or Cessation of Business 2. Just Causes ...62 Abandonment Requisites of Abandonment Loss of Trust and Confidence Distinction on the treatment of Trust and Confidence on managerial employee/s and rank-and-file employees Incompetence/Inefficiency Gross Negligence Serious Misconduct Willful disobedience or Insubordination Due Process...76 Procedural Due Process Substantive Due Process Effect of non-compliance to procedural due process Effect of Employee's Acquittal in the Criminal Case..87 Estoppel..88 Evidence 89 Lack of Sufficient Evidence Substantial Evidence Execution..92 Exhaustion of Administrative Remedies..93 Finality of Factual Findings..93 Financial Assistance..95 Floating Status.96 Grave Abuse of Discretion96 Illegal Dismissal......97 Illegal Work Stoppage98 Independent Contractor98 Interlocutory Order.98 Job contracting ..99 Jurisdiction..99 Claims against Government Owned and Controlled Corporations
National Labor Relations Commission Labor-only Contracting102 Rationale in Prohibiting Labor-Only Contracting Management Prerogative.103 Limitations to the Exercise of Management Prerogative Managerial Staff/Supervisor106 Money Claims. 107 Money Claims arising from CBA Corporate Officers not liable for money claims Prescriptive Period Motion for Reconsideration108 Negative Pregnant.110 No Work, No Pay110 Overtime Pay..110 Payment of Interest on Awards110 Payslips111 Petition for Review112 Piercing the Veil of Corporate Fiction.112 POEA Rules113 Preliminary Injunction..113 Prescriptive Period ..113 Presumption of a Perceived Danger... 114 Presumption of Regularity of Judicial Proceeding..114 Preventive Suspension.......114 Principle of Shared Responsibility..115 Project Employee.. ..115 Protection to Labor,.116 Protest.118 Quitclaims...118 Real Party-in Interest...121 Reinstatement...121 Relaxation of the Rules on Payment of Docket Fees.122 Repatriation...122 Resignation...123 Res Judicata..124 Retirement..125 Rules of Procedure(NLRC)127 Rule on Technicality129 Security of Tenure132 Separate Corporate Personality...135 Separation Pay..135 Social Justice137 Solidary Liability..138
National Labor Relations Commission Strained Relationship.139 Strike...140 Circumstances justifying a less drastic penalty for ordinary striking workers Illegal strike Requisites for a Valid Strike Illegal Acts During Strike Effects of Illegal Strike Supervisory and Managerial Employees......141 Teacher's Probationary Employment....144 Probationary Period145 Proportionality between the Offense and the Penalty145 Termination......146 Guidelines Termination Reports Termination due to Illegal Strike Treatment on the Unexpired portion of employment contract Union......148 Chartered Local Union Union Officers Termination Purpose of Affiliation of Local Unions Unfair Labor Practice........149 Verification150 Wage Increase.....151
National Labor Relations Commission Absorption Furthermore, under the principle of absorption, a bona fide buyer or transferee of all, or substantially all, the properties of the seller or transferor is not obliged to absorb the latters employees. The most that the purchasing company may do, for reasons of public policy and social justice, is to give preference of reemployment to the selling companys qualified separated employees, who in its judgment are necessary to the continued operation of the business establishment. In any event, the national government (in whose trust APT previously held the mortgage credits of BISUDECO) is not the employer of petitioner-unions members, who had been dismissed sometime in May 1991, even before APT took over the assets of the corporation. Hence, under existing law and jurisprudence, there is no reason to expect any kind of bailout by the national government. Even the NLRC found that no employeremployee relationship existed between APT and petitioners. Thus, the Commission gravely abused its discretion in nevertheless holding that APT, as the transferee of the assets of BISUDECO, was liable to petitioners. (Abundio Barayoga, Bisudeco-Philsucor Corfarm Workers Union (PACIWU CHAP-TPC) vs. Asset Privatization Trust, G. R. No. 160073,October 24, 2005) In other words, the liabilities of the previous owner to its employees are not enforceable against the buyer or transferee, unless (1) the latter unequivocally assumes them; or (2) the sale or transfer was made in bad faith. Thus, APT cannot be held responsible for the monetary claims of petitioners who had been dismissed even before it actually took over BISUDECOs assets. (Abundio Barayoga, Bisudeco-Philsucor Corfarm Workers Union (PACIWU CHAP-TPC) vs. Asset Privatization Trust, G. R. No. 160073,October 24, 2005) Appeal Moreover, we perceive a patent error in the mode of appeal elected by petitioner for the purpose of assailing the Decision of the Court of Appeals. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground therefore is grave abuse of discretion. In the case at bar, the proper remedy of petitioner VRESCO to dispute the Decision of the appellate court is to file a petition for review on certiorari under Rule 45 of the Rules of Court, which should be instituted within 15 days from receipt of the assailed decision or resolution. In a long line of cases, the Court has consistently emphasized that after the lapse of the 15-day period to file a petition for Review on Certiorari, the special civil action of certiorari under Rule 65 is not, and cannot be, a substitute for a lost remedy of appeal. In the case at bar, the petition was filed 45 days after receipt of the Resolution of the Court of Appeals denying its Motion for Reconsideration, evidently beyond the 15-day period for filing a petition for review on certiorari, hence the period to appeal was lost. Therefore, the instant petition cannot prevail since a petition for certiorari cannot substitute for a lost appeal, specially if ones error in ones choice of remedy occasioned such loss or lapse. (MC Rural Electric Service
National Labor Relations Commission Cooperative Inc., vs The Hon. Court of Appeals, G.R. No. 153144,October 12, 2006) In Tomas Claudio Memorial College, Inc. v. Court of Appeals, we held that the above provision governs appeals from awards or final orders of the Labor Arbiter to the NLRC. The right to appeal is not part of due process but a mere statutory privilege that has to be exercised only in the manner and in accordance with the provisions of law. Since the perfection of an appeal within the statutory reglementary period is not only mandatory but also jurisdictional, petitioners failure to perfect their appeal to the NLRC seasonably rendered the Labor Arbiters Decision final and executory. Accordingly, the NLRC has no jurisdiction to give due course to petitioners appeal, much less render a Resolution modifying the Labor Arbiters Decision. Indeed, such Resolution is a patent nullity for want of jurisdiction. (United Field Sea Watchman and Checkers Agency, vs Willie Requillo,G.R. No. 143527,December 6, 2006) First, it is well settled that the remedy to obtain reversal or modification of judgment on the merits is appeal. This is true even if the error, or one of the errors, ascribed to the court rendering the judgment is its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the findings of facts or of law set out in the decision. In the present case, the CA disposed of CA-G.R. SP No. 52373 on the merits. Petitioner claims that he received the Decision of the CA on May 17, 2001. Consequently, he had 15 days from said date of receipt of assailed judgment, or until June 1, 2001, within which to file a petition for review on certiorari, the reglementary period prescribed by Rule 45 of the Rules of Court to avail of said action. On July 9, 2001 close to two months after said receipt, petitioner filed the present petition. Evidently, petitioner has lost his remedy of appeal. The filing of the instant petition for certiorari cannot be used as a means of recovering his appeal as it is settled that certiorari is not a substitute for lost appeal. The remedies of appeal and certiorari are mutually exclusive and not alternative or successive.[Felix M. Cruz, Jr., vs CA, NLRC AND Citytrust Banking Corporation ,G.R. NO. 148544,July 12, 2006) Perfection of Appeal The perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional upon the court a quo, and the failure to perfect that appeal renders its judgment final and executory. A fundamental precept is that the reglementary periods under the Rules are to be strictly observed for being considered indispensable interdictions against needless delays and an orderly discharge of judicial business. The strict compliance with such periods has more than once been held to be imperative, particularly and most significantly in respect to perfection of appeals. The finality of a judgment becomes a fact upon the lapse of the reglementary period to appeal if no appeal is perfected, and the court loses all jurisdiction over the case, and it becomes the ministerial duty of the court concerned to order execution of the judgment. After the judgment has become final and executory, vested rights are acquired by the winning party. Just as the losing party has the right to file an appeal within the prescribed period, so also the winning party has the correlative right to enjoy the finality of the resolution of
National Labor Relations Commission the case. (Becton Dickinson Phils. Inc. and Wilfredo Joaquin vs. NLRC, et. al.,G.R. Nos. 159969 & 160116, November 15, 2005) A final note. We feel the need to point out that the delay incurred by counsel for petitioner employees in filing the petition for certiorari before the Court of Appeals was inexcusable. Their counsels claim of ignorance exacerbates more than relieves him of accountability for his negligence. We can not over-emphasize that lawyers are duty-bound, nay, mandated, by the oath they took, to keep abreast of legal developments and to participate in continuing legal education programs. To reiterate, the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also jurisdictional. The rules on periods for filing appeals are to be observed religiously, and parties who seek to avail themselves of the privilege must comply with the rules. (Reynaldo Dela Cruz and Elur S. Nono vs. Golar Maritime Services Inc. and Gotaas Larsen Ltd.,G.R. No. 141277,December 16, 2005) The failure of the petitioners to comply with the aforementioned NLRC Resolution is fatal to their cause for their non-compliance with the requirement relative to the filing of certificate of non-forum shopping did not toll the running of the period for perfecting their appeal. Perfection of appeal on time is mandatory and jurisdictional. Failure to do so makes the March 26, 2002 Decision of the Labor Arbiter final and executory. (Words in bracket added). (Becton Dickinson Phils. Inc. and Wilfredo Joaquin vs. NLRC, et. al.,G.R. Nos. 159969 & 160116, November 15, 2005) The law is clear. An appeal, per article 223 of the Labor Code, shall be perfected only upon posting of a cash or surety bond in cases involving monetary award. On perfection of appeal, it is well entrenched in this jurisdiction that perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and non-compliance with such requirement is fatal and has the effect of rendering the judgment final and executory. In implementing article 223, respondent NLRC however laid down the rule allowing reduction of the amount of bond which it can approve in meritorious cases. There is a caveat however that the filing of the motion to reduce bond does not stop the running of the period to perfect appeal. The plain import of article 223 of the Labor Code and the amended section 6, Rule VI of the New Rules of Procedure is that the reduction of the bond should be approved within the ten (10) day appeal period and the appellant should exert its utmost diligence to obtain the approval of respondent NLRC before the lapse of the period or else there is a big risk that the appeal will be dismissed for non-perfection of the appeal due to the absence of the appeal bond. This is evident form the last sentence of Section 6, Rule VI that the filing xxx of the motion to reduce bond shall not stop the running of the period to perfect appeal. Thus the present rule is unequivocal that the filing of the motion does not toll the running of the period of appeal and the logical implication and inevitable result is the dismissal of the appeal if the reduction is denied. xxx. Thus respondent NLRC correctly affirmed the decision of Arbiter Santos since the appeal was not perfected due to
National Labor Relations Commission lack of an appeal bond.(Stolt-Nielsen Marine Services Inc. (now Stolt-Nielsen Transportation Group Inc.) vs. NLRC, et al, G.R. No. 147623,)December 13, 2005 There is no excuse for petitioners erroneous choice of remedy. In Heirs of Marcelino Pagobo v. Court of Appeals, this Court ruled in no uncertain terms that redress from the CAs adverse decision in a special civil action for certiorari under Rule 65 should not be sought under the same Rule but rather under Rule 45. ] After all, Rule 45 is clear that decisions, final orders or resolutions of the CA in any case, i.e., regardless of the nature of the action or proceeding involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case. And in an even earlier case,] this Court stated that the remedy to obtain a reversal or modification of a decision on the merits, as petitioners are attempting to do here, is appeal. This is true even if the error ascribed to the appellate court is its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the findings of fact or of law set out in its decision. Therefore, petitioners allegation that the CA committed grave abuse of discretion amounting to lack or excess of jurisdiction in rendering its decision and resolution in a manner contrary to law and applicable jurisprudence on the matter does nothing to advance their cause. (Davao Merchant Marine Academy, et al. Vs. Court of Appeals, et al.G.R. No. 144075. April 19, 2006) It is clear, therefore, that the appeal filed by petitioner was dismissible. Respondent did not even cite in its motion for reconsideration any justifiable excuse for the belated filing of the memorandum of appeal.[12] Well-settled is the principle that the perfection of an appeal within the statutory or reglementary period is not only mandatory, but jurisdictional, and failure to do so renders the questioned decision final and executory and deprives the appellate court of jurisdiction to alter the final judgment, much less to entertain the appeal. The underlying purpose of this principle is to prevent needless delay, a circumstance which would allow the employer to wear out the efforts and meager resources of the worker to the point that the latter is constrained to settle for less than what is due him.[13] This Court has declared that although the NLRC is not bound by the technical rules of procedure and is allowed to be liberal in the interpretation of the rules in deciding labor cases, such liberality should not be applied where it would render futile the very purpose for which the principle of liberality is adopted. The liberal interpretation stems from the mandate that the workingmans welfare should be the primordial and paramount consideration. (Sallvador Bunagan vs. Sentinel Watchman & Protective Agency, Inc.,G.R. No. 144376,September 13, 2006) Rule on the Remedy of Appeal under Rule 45 and Certiorari under Rule 65 Meanwhile, in Hanjin Engineering and Construction Co., Ltd., v. CA, we held that the remedy of appeal under Rule 45 and an original action for certiorari under Rule 65 are mutually exclusive and not alternative or cumulative.[19] Thus, a party should not join both petitions in one pleading. In Mercado v. Court Appeals, we held that when a party adopts an improper remedy, as in this case, his petition may be dismissed outright. We then further elucidated that: Indeed, not infrequently, litigants and parties to a petition have invoked liberal construction of the Rules of Court to justify lapses in its observance. Hopefully, it is not
National Labor Relations Commission simply a cover-up of their own neglect or sheer ignorance of procedure. While indeed this Court has on occasion set aside procedural irregularities in the interest of justice, it must be stressed that liberality of construction of the rules should not be a panacea for all procedural maladies. For this Court will not tolerate wanton disregard of the procedural rules under the guise of liberal construction. (Nagkahiusang Mamumuo sa Picop Resources Inc et al. vs Court of Appeals, G.R. Nos. 148839-40, November 2, 2006) Period of Appeal Evident it is from the foregoing that an appeal from rulings of the Labor Arbiter to the NLRC must be perfected within ten (10) calendar days from receipt thereof, otherwise the same shall become final and executory. In a judgment involving a monetary award, the appeal shall be perfected only upon (1) proof of payment of the required appeal fee and (2) posting of a cash or surety bond issued by a reputable bonding company and (3) filing of a memorandum of appeal. A mere notice of appeal without complying with the other requisites mentioned shall not stop the running of the period for perfection of appeal. (Stolt-Nielsen Marine Services Inc. (now Stolt-Nielsen Transportation Group Inc.) vs. NLRC, et al, G.R. No. 147623,December 13, 2005) In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. [Emphasis supplied.] The period to appeal under Rule 45 is 15 days from notice of judgment or denial of a duly-filed motion for reconsideration. Since petitioners made a timely motion for reconsideration of the adverse decision of the CA, their period to bring the matter to us on appeal began when they received notice of the CAs denial of their motion, May 2, 2000. Therefore, petitioners had until May 17, 2000 to file a petition for review on certiorari with this Court. Petitioners lost their right to appeal when they allowed that period to lapse without having filed either a petition for review or even a motion for extension of time to file one. Consequently, the decision of the CA became final and executory. (Davao Merchant Marine Academy, et al. Vs. Court of Appeals, et al.G.R. No. 144075. April 19, 2006) QUESTIONS OF LAW Petitioners are raising factual issues which are not proper in a petition for review. Well-entrenched is the rule that in an appeal via certiorari, only questions of law may be reviewed. The question of whether petitioners were regular employees and were dismissed without notice and hearing is a factual issue. It had been exhaustively discussed and ruled upon in the negative by both the Labor Arbiter and the NLRC. It bears stressing that factual findings of quasi-judicial bodies that have acquired expertise are generally accorded great respect and even finality, if they are supported by substantial evidence. In this case, we find no cogent reason to disturb the factual findings of the Labor Arbiter as affirmed by the NLRC. We find supported by evidence on record their finding that petitioners were not illegally dismissed, and that they were not regular employees to begin with.(Jimmy Kent Rambuyon, et. al. vs. Fiesta Brands Inc.,G.R. No.
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National Labor Relations Commission 157029,December 15, 2005) Assumption by the Secretary The Secretarys assumption of jurisdiction power necessarily includes matters incidental to the labor dispute, that is, issues that are necessarily involved in the dispute itself, not just to those ascribed in the Notice of Strike; or, otherwise submitted to him for resolution. As held in the case of International Pharmaceuticals, Inc. v. Sec. of Labor and Employment, x x x [t]he Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction. Accordingly, even if not exactly on the ground upon which the Notice of Strike is based, the fact that the issue is incidental to the resolution of the subject labor dispute or that a specific issue had been submitted to the Secretary of the DOLE for her resolution, validly empowers the latter to take cognizance of and resolve the same.(Skippers Pacific Inc and J.P. Samartzsis Maritime Enterprises Co., S.A., vs. Jerry Maguad and Porfero Ceudadano ,G.R. No. 166363,August 15, 2006) Improper service of Assumption of Jurisdiction Order of the Secretary of Labor Applying this principle in the case at bar, presumption of receipt of the copies of the Assumption of Jurisdiction Order could not be lightly inferred from the circumstances considering the adverse effect in case the parties failed to heed to the injunction directed by such Order. Worthy to note that in a number of cases, we have ruled that defiance of the assumption and return-to-work orders of the Secretary of Labor after he has assumed jurisdiction is a valid ground for the loss of employment status of any striking union officer or member.[26] Employment is a property right of which one cannot be deprived of without due process.[27] Due process here would demand that the respondent union be properly notified of the Assumption of Jurisdiction Order of the Secretary of Labor enjoining the strike and requiring its members to return to work. Thus, there must be a clear and unmistakable proof that the requirements prescribed by the Rules in the manner of effecting personal or substituted service had been faithfully complied with. Merely posting copies of the Assumption of Jurisdiction Order does not satisfy the rigid requirement for proper service outlined by the above stated rules. Needless to say, the manner of service made by the process server was invalid and irregular. Respondent union could not therefore be adjudged to have defied the said Order since it was not properly apprised thereof. Accordingly, the strike conducted by the respondent union was valid under the circumstances. {FEU-NRMF vs FEU-NRMF EMPLOYEES ASSOCIATION-ALLIANCE OF FILIPINO WORKERS (FEU-NRMFEA-AFW), G.R. No. 168362, October 12, 2006} Attorneys Fees Under Article 2208 of the New Civil Code, attorney's fees can be recovered in actions for the recovery of wages of laborers and actions for indemnity under employer's
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National Labor Relations Commission liability laws. Attorney's fees is also recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest. Such conditions being present in the case at bar, we find that an award of attorney's fees is warranted.(Bernardo Remigio vs. NLRC, C.F. Sharp Crew Mgt., Inc. & New Commodore Cruise Line, Inc.,April 12, 2006) The award of attorneys fees is sustained. In actions for recovery of wages or where an employee was forced to litigate and thus incurred expenses to protect his rights and interests, a maximum of ten percent (10%) of the total monetary award by way of attorneys fees is justified under Article 111 of the Labor Code, Section 8, Rule VIII, Book III of its Implementing Rules, and paragraph 7, Article 2208 of the Civil Code. There need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly and that the employee was forced to file a case, as in the instant case. (Asian International Manpower Services, Inc. (AIMS), vs Court of Appeals and Aniceta Lacerna, G.R. No. 169652, October 9, 2006) Here, petitioners illness and disability were the direct results of the demands of his shipboard employment contract and the harsh and inhumane treatment of the officers on board the vessel Olandia. For no justifiable reason, respondents refused to pay their contractual obligations in bad faith. Further, it cannot be gainsaid that petitioners disability is not only physical but mental as well because of the severe depression, mental torture, anguish, embarrassment, anger, sleepless nights and anxiety that befell him. To protect his rights and interest, petitioner was constrained to institute his complaint below and hire the services of an attorney. (Robert B. Cabuyoc vs Inter-Orient Navigation Shipmanagement, Inc. , G.R. No. 166649,November 24, 2006) In the present case, it is true that the Labor Arbiter and the NLRC failed to state the reasons why attorneys fees are being awarded. However, it is clear that private respondent was illegally terminated from his employment and that his wages and other benefits were withheld from him without any valid and legal basis. As a consequence, he is compelled to file an action for the recovery of his lawful wages and other benefits and, in the process, incurred expenses. On these bases, the Court finds that he is entitled to attorneys fees. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC,G.R. No. 153031,December 14, 2006)
Backwages However, petitioner should not be made to pay private respondents backwages. In Agabon v. National Labor Relations Commission, it was held that where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for violation of his statutory rights. Thus, applying Agabon, the Court, in Central Luzon Conference Corporation of Seventh Day Adventist Church, Inc. v. Court of Appeals, modified the decision of the Court of Appeals by awarding P30,000.00 to an employee who was dismissed for just cause but was not afforded due process. (Electro System Industries Corporation vs. NLRC, G.R. No. 165282, October 5, 2005)
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National Labor Relations Commission Resolving the protracted litigation between the parties necessitates us to revisit our pronouncements on the interpretation of the term backwages. We said that backwages in general are granted on grounds of equity for earnings which a worker or employee has lost due to his illegal dismissal. It is not private compensation or damages but is awarded in furtherance and effectuation of the public objective of the Labor Code. Nor is it a redress of a private right but rather in the nature of a command to the employer to make public reparation for dismissing an employee either due to the formers unlawful act or bad faith. The Court, in the landmark case of Bustamante v. National Labor Relations Commission, had the occasion to explicate on the meaning of full backwages as contemplated by Article 279 of the Labor Code of the Philippines, as amended by Section 34 of Rep. Act No. 6715. The Court in Bustamante said, thus: The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of backwages as enunciated in said Pines City Educational Center case, by now holding that conformably with the evident legislative intent as expressed in Rep. Act No. 6715, above-quoted, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. The underlying reason for this ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the deduction of earnings elsewhere rule. Thus, a closer adherence to the legislative policy behind Rep. Act No. 6715 points to full backwages as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for full backwages to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation. Index animi sermo est.( Equitable Banking Corpo. vs. Ricardo Sadac,G.R. No. 164772,June 8, 2006) The Tayags are correct in pointing out that they are entitled to full backwages by reason of their illegal dismissal, notwithstanding the award of separation pay. The Court made this point clear in Santos v. NLRC. 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
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National Labor Relations Commission dismissal. These twin remediesreinstatement and payment of backwagesmake 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. Separation pay was awarded in favor of petitioner Lydia Santos because the NLRC found that her reinstatement was no longer feasible or appropriate. As the term suggests, separation pay is the amount that an employee receives at the time of his severance from the service and, as correctly noted by the Solicitor General in his Comment, is designed to provide the employee with "the wherewithal during the period that he is looking for another employment." In 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 relief that restores the income that was lost by reason of unlawful dismissal; separation pay, in contrast, is oriented towards the immediate future, the transitional period the dismissed employee must undergo before locating a replacement job. It was grievous error amounting to grave abuse of discretion on the part of the NLRC to have considered an award of separation pay as equivalent to the aggregate relief constituted by reinstatement plus payment of backwages under Article 280 of the Labor Code. The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and for backwages. In effect, the NLRC in its assailed decision failed to give to petitioner the full relief to which she was entitled under the statute. (Emphasis supplied)( Equitable Banking Corpo. vs. Ricardo Sadac,G.R. No. 164772,June 8, 2006) With the reality that the petitioner was not illegally dismissed, she is not entitled to backwages. Backwages may be granted only when there is a finding that the dismissal is illegal. (Nenuca A. Velez vs Shangri-las Edsa Plaza Hotel, G.R. No. 148261,October 9, 2006) Lastly, as to the award of backwages, we refer to Article 279 of the Labor Code (as amended by Section 34 of R.A. 6715) which provides that an employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges, and to the payment of his full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time his compensation was withheld from him (which, as a rule, is from the time of his illegal dismissal) up to the time of his actual reinstatement. Similarly, under R.A. 6715,[36] 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
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National Labor Relations Commission 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. (Petron Corporation vs National Labor Relations Commission,G.R. No. 154532, October 27, 2006 Petitioner further avers that the CA committed an error of law in ordering payment of backwages from dismissal up to reinstatement instead of ordering backwages only from the time the CA ruled that there was illegal dismissal. Petitioner is mistaken. In the first place, the CA never ordered the reinstatement of respondents but instead ordered the payment of separation pay. As to issue of backwages, the Court has ruled in a long line of cases that where an employee would have been entitled to reinstatement with full backwages, but circumstances, i.e., strained relationships, makes reinstatement impossible, the more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher, in addition to full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time the employees compensation was withheld from him up to the time of his supposed actual reinstatement. In this case, since payment of backwages and separation pay were ordered only upon promulgation of the CA Decision, and the case was further elevated to this Court, then the supposed actual reinstatement, had reinstatement been feasible, would have been upon the finality of this Courts decision. Thus, the computation of full backwages, inclusive of allowances, and other benefits or their monetary equivalent, should be computed from the time the respondents compensation was withheld from them up to the time of the finality of this decision. (Star Paper Corporation vs Carlito Espiritu, et al.,G.R. NO. 154006,November 2, 2006) Computation of Backwages Article 279 mandates that an employees full backwages shall be inclusive of allowances and other benefits or their monetary equivalent. Contrary to the ruling of the Court of Appeals, we do not see that a salary increase can be interpreted as either an allowance or a benefit. Salary increases are not akin to allowances or benefits, and cannot be confused with either. The term allowances is sometimes used synonymously with emoluments, as indirect or contingent remuneration, which may or may not be earned, but which is sometimes in the nature of compensation, and sometimes in the nature of reimbursement. Allowances and benefits are granted to the employee apart or separate from, and in addition to the wage or salary. In contrast, salary increases are amounts which are added to the employees salary as an increment thereto for varied reasons deemed appropriate by the employer. Salary increases are not separate grants by themselves but once granted, they are deemed part of the employees salary. To extend the coverage of an allowance or a benefit to include salary increases would be to strain both the imagination of the Court and the language of law. As aptly observed by the NLRC, to otherwise give the meaning other than what the law speaks for by itself, will open the floodgates to various interpretations. Indeed, if the intent were to include salary increases as basis in the computation of backwages, the same should have been explicitly stated in the same manner that the law used clear and unambiguous terms in expressly providing for the inclusion of allowances and other benefits.(Equitable Banking Corpo. vs.
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National Labor Relations Commission Ricardo Sadac,G.R. No. 164772,June 8, 2006) Piece Rate Workers Backwages However, the Court recognizes that there may be some difficulty in ascertaining the proper amount of backwages, considering that the Tayags were apparently paid on a piece-rate basis. In Labor Congress of the Philippines v. NLRC, he Court was confronted with a situation wherein several workers paid on a piece-rate basis were entitled to back wages by reason of illegal dismissal. However, the Court noted that as the piece-rate workers had been paid by the piece, there [was] a need to determine the varying degrees of production and days worked by each worker, and that this issue is best left to the [NLRC]. We believe the same result should obtain in this case, and the NLRC be tasked to conduct the proper determination of the appropriate amount of backwages due to each of the Tayags. (Pepito Velasco vs. NLRC, G.R. No. 161694,June 26, 2006) No Backwages during the Strike Rule For the general rule is that backwages shall not be awarded in an economic strike on the principle that a fair days wage accrues only for a fair days labor. Even in cases of ULP strikes, award of backwages rests on the courts discretion and only in exceptional instances. Thus, J.P. Heilbronn Co. v. National Labor Union, instructs: When in case of strikes, and according to the C[ourt of] I[ndustrial] R[elations] even if the strike is legal, strikers may not collect their wages during the days they did not go to work, for the same reasons if not more, laborers who voluntarily absent themselves from work to attend the hearing of a case in which they seek to prove and establish their demands against the company, the legality and propriety of which demands is not yet known, should lose their pay during the period of such absence from work. The age-old rule governing the relation between labor and capital or management and employee is that of a fair days wage for a fair days labor. If there is no work performed by the employee there can be no wage or pay, unless of course, the laborer was able, willing and ready to work but was illegally locked out, dismissed or suspended. It is hardly fair or just for an employee or laborer to fight or litigate against his employer on the employers time. (Emphasis and underscoring supplied) This Court must thus hearken to its policy that when employees voluntarily go on strike, even if in protest against unfair labor practices, no backwages during the strike is awarded. (Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel), vs. Manila Diamond Hotel Employees Union,G.R. No. 158075,June 30, 2006) Exception to the NO BACKWAGES RULE Jurisprudential law, however, recognizes several exceptions to the no backwages rule, to wit: when the employees were illegally locked to thus compel them to stage a strike; when
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National Labor Relations Commission the employer is guilty of the grossest form of ULP; when the employer committed discrimination in the rehiring of strikers refusing to readmit those against whom there were pending criminal cases while admitting nonstrikers who were also criminally charged in court; or when the workers who staged a voluntary ULP strike offered to return to work unconditionally but the employer refused to reinstate them. Not any of these or analogous instances is, however, present in the instant case. (Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel), vs. Manila Diamond Hotel Employees Union,G.R. No. 158075,June 30, 2006) In Cromwell Commercial Employees and Laborers Union (PTUC) v. Court of Industrial Relations, this Court made a distinction between two types of employees involved in a ULP: those who are discriminatorily dismissed for union activities, and those who voluntarily go on strike even if it is in protest of an ULP. Discriminatorily dismissed employees were ordered entitled to backpay from the date of the act of discrimination, that is, from the day of their discharge, whereas employees who struck as a voluntary act of protest against what they considered a ULP of their employer were held generally not entitled to backpay. (Philippine Diamond Hotel and Resort, Inc. (Manila Diamond Hotel), vs. Manila Diamond Hotel Employees Union,G.R. No. 158075,June 30, 2006) Bond Posting of Appeal Bond From the foregoing, it is clear that the law only requires that the amount of the appeal bond be equivalent to the monetary award in the judgment appealed from. In the case at bar, the Labor Arbiters decision specified the Peso equivalent of the US dollar amounts awarded, such that the respondent companies could validly choose, as they so chose, to file a cash/surety bond in the specified Peso equivalent. Had the assailed decision not particularly indicated the Peso equivalent, but instead stated or its Peso equivalent, petitioner employees line of argument would necessarily require that the Peso equivalent be computed at the official conversion rate on the date of rendition of the decision. Anything less would inevitably result in an inadequate or deficient bond; thus, would result in non-perfection of an appeal before the NLRC. Lamentably, such is not the case here. Petitioner employees stance failed to consider that foreign currency conversion rates, which by their very nature, are floating. (Reynaldo Dela Cruz and Elur S. Nono vs. Golar Maritime Services Inc. and Gotaas Larsen Ltd.,G.R. No. 141277,December 16, 2005) The mandatory filing of a bond for the perfection of an appeal is evident from the aforequoted provision of Article 223 of the Labor Code which explicitly states that the appeal may be perfected only upon the posting of cash or surety bond. The word only makes it perfectly clear that the lawmakers intended the posting of a cash or surety bond to be the exclusive means by which an employers appeal may be perfected. This requirement is intended to dissuade employers from using the appeal to delay, or even evade, their obligation to satisfy their employees just and lawful claims. It is true that the requirement of posting a bond on appeals involving monetary
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National Labor Relations Commission awards has been given a liberal interpretation in certain cases. However, relaxation of this rule can only be done where there was substantial compliance of the NLRC Rules of Procedure or where the party involved, at the very least, demonstrated willingness to abide by the rules by posting a partial bond. Petitioner did not post a full or partial appeal bond within the prescribed period. Petitioner could have even paid a moderate and reasonable sum as premium for such bond as the law does not require outright payment but merely the posting of a bond to ensure that the award will be eventually paid should the appeal be dismissed, but still, petitioner failed to do so. Hence, we find no cogent reason to apply the same liberal interpretation in this case. While, admittedly, Section 6, Rule VI of the NLRC Rules of Procedure allows the reduction of the appeal bond upon motion of the appellant, the exercise of the authority is not a matter of right on the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds. Nevertheless, even granting arguendo that petitioner has meritorious grounds to reduce the appeal bond, the result would have been the same since it failed to post cash or surety bond within the prescribed period.(Stolt-Nielsen Marine Services Inc. (now Stolt-Nielsen Transportation Group Inc.) vs. NLRC, et al, G.R. No. 147623,December 13, 2005) The second paragraph of Article 223 of the Labor Code states that when a judgment involving monetary award is appealed by the employer, the appeal may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment. This is to assure the workers that if they finally prevail in the case, the monetary award will be given to them upon dismissal of the employers appeal, and is meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees. However, as provided for in Section 6, Rule VI of the New Rules of Procedure of the NLRC, such amount of the bond may be reduced in meritorious cases, upon motion of the appellant. The exercise of this authority is not a matter of right on the part of the movant but lies within the sound discretion of the NLRC upon showing of meritorious grounds. Indeed, an unreasonable and excessive amount of bond would be oppressive and unjust, and would have the effect of depriving a party of his right to appeal. (Ronaldo B. Casimiro, et. al. vs. Stern Real Estate Inc. Rembrandt Hotel and/or Grace Kristin Meehan (General Manager), and Eric Singson (Owner),G.R. No. 162233,March 10, 2006) The posting of appeal bond is mandatory.[ Philippine Transmarine Carriers, Inc. v. Cortina, G.R. No. 146094, 12 November 2003, 415 SCRA 714, 717. ] Thus, Section 6, Rule VI of the amendments to the New Rules of Procedure of the NLRC decrees: SECTION 6. BOND. In case the decision of the Labor Arbiter or the Regional Director involves a monetary award, an appeal by the employer may be perfected only upon the posting of a bond, which shall either be in the form of cash deposit or surety bond equivalent in amount to the monetary award, exclusive of damages and attorneys fees. In case of surety bond, the same shall be issued by a reputable bonding company duly accredited by the Commission or the Supreme Court, and shall be accompanied by
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National Labor Relations Commission original or certified true copies of the following: a) a joint declaration under oath by the employer, his counsel, and the bonding company, attesting that the bond posted is genuine, and shall be in effect until final disposition of the case; b) an indemnity agreement between the employer-appellant and bonding company; c) proof of security deposit or collateral securing the bond: provided, that a check shall not be considered as an acceptable security; d) a certificate of authority from the Insurance Commission; e certificate of registration from the Securities and Exchange Commission; f) certificate of authority to transact surety business from the Office of the President; g) certificate of accreditation and authority from the Supreme Court; and h) notarized board resolution or secretarys certificate from the bonding company showing its authorized signatories and their specimen signatures. A cash or surety bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved or terminated, or the award satisfied. This condition shall be deemed incorporated in the terms and conditions of the surety bond, and shall be binding on the appellants and the bonding company.(Ciudad Fernandina Food Corporation Employees Union-Associated Labor Unions vs.Court of Appeals,G.R. No. 166594 - July 20, 2006) Under the second paragraph of Article 223 of the Labor Code, when a judgment involving monetary award is appealed by the employer, the appeal is perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC in an amount equivalent to the monetary award in the judgment. This assures the workers that if they finally prevail in the case, the monetary award will be given to them on dismissal of the employers appeal. It is also meant to discourage employers from using the appeal to delay or evade payment of their obligations to the employees.(Intercontinental Broadcasting Corporation, vs Reynaldo Benedicto,G.R. No. 152843, July 20, 2006) Effect of Non-Payment of Appeal Bond The case of Quiambao v. National Labor Relations Commission, was stressed in the subsequent case of Santos v. Velarde where the petitioner therein appealed the Labor Arbiters decision with the NLRC within the reglementary period but did not pay the bond on the ground that the appeal is made by one who is not an employer, hence, there is no need for the posting of a cash or surety bond. This Court considered the appeal as not having been perfected due to the non-payment of the appeal bond and reiterated that the posting of a cash or surety bond is a requirement sine qua non for the perfection of an appeal from the Labor Arbiters monetary award. (Ciudad Fernandina Food Corporation Employees Union-Associated Labor Unions vs.Court of Appeals,G.R. No. 166594 - July 20, 2006) In the case at bar, petitioner did not post a full or partial appeal bond within the prescribed period, thus, no appeal was perfected from the decision of the Labor Arbiter. For this reason, the decision sought to be appealed to the NLRC had become final and
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National Labor Relations Commission executory and therefore immutable. Clearly then, the NLRC has no authority to entertain the appeal, much less to reverse the decision of the Labor Arbiter. Any amendment or alteration made which substantially affects the final and executory judgment is null and void for lack of jurisdiction, including the entire proceeding held for that purpose.[33] (Emphasis and underscoring supplied) (Rural Bank of Coron vs. Annalisa Cortes,G.R. No. 164888,December 6, 2006) Supersedeas Bond Art. 223 of the Labor Code provides that in case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award. We have ruled that the word only makes it perfectly clear that the lawmakers intended that the posting of the bond is the exclusive means by which an employers appeal may be perfected. The filing of a supersedeas bond, which is actually a security required from an appellant to ensure payment of the adjudged monetary award in case the appeal fails, is indispensable to the perfection of the appeal. We further held that the posting of a cash or surety bond for the perfection of an appeal is jurisdictional, without which the NLRC, as in this case, does not have the authority to review and revise the judgment of the labor arbiter.(Emma Cordova, et. al.vs.KEYSAS Boutique,G.R. No. 156379,September 16, 2005) Bank Certification not a valid compliance with the Bond Requirement In the case at bar, the respondents cannot be excused from making a substantial compliance with the bond requirement. The law does not require outright payment of the appealed monetary award, but only the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the NLRC or this Court, and not a mere bank certification which only states the total amount of deposit existing in such bank as of a certain date. The cash or surety bond will ensure that the award will be eventually paid in case the appeal fails. A mere bank certification of the type submitted by respondents will not. What respondents have to pay is a moderate and reasonable sum for premiums for such bond.( Emma Cordova, et. al.vs.KEYSAS Boutique,G.R. No. 156379,September 16, 2005) Liberal Interpretation on Posting of Bond The provision of Article 223 of the Labor Code requiring the posting of a bond for the perfection of an appeal of a monetary award must be given liberal interpretation in line with the desired objective of resolving controversies on the merits. If only to achieve substantial justice, strict observance of the reglementary periods may be relaxed if warranted. However, this liberal interpretation must be justified by substantial compliance with the rule. As we declared in Buenaobra v. Lim King Guan:
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National Labor Relations Commission It is true that the perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but jurisdictional, and failure to perfect an appeal has the effect of making the judgment final and executory. However, technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. We have allowed appeals from the decisions of the labor arbiter to the NLRC, even if filed beyond the reglementary period, in the interest of justice.[ Id., citing Philippine-Singapore Ports Corporation v. National Labor Relations Commission, G.R. No. 67035, 29 January 1993, 218 SCRA 77] ( Intercontinental Broadcasting Corporation, vs Reynaldo Benedicto,G.R. No. 152843, July 20, 2006) Boundary System As early as 1956, the Court ruled in National Labor Union v. Dinglasan that the jeepney owner/operator-driver relationship under the boundary system is that of employeremployee and not lessor-lessee. This doctrine was affirmed, under similar factual settings, in Magboo v. Bernardo and Lantaco, Sr. v. Llamas, and was analogously applied to govern the relationships between auto-calesa owner/operator and driver, bus owner/operator and conductor, and taxi owner/operator and driver. The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the latters daily earnings are remitted to the owner/operator less the excess of the boundary which represents the drivers compensation. Under this system, the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels where the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. (Oscar Villamaria, Jr. vs. Court of Appeals, G.R. No. 165881,April 19, 2006) Under the boundary-hulog scheme, petitioner retained ownership of the jeepney although its material possession was vested in respondent as its driver. In case respondent failed to make his P550.00 daily installment payment for a week, the agreement would be of no force and effect and respondent would have to return the jeepney to petitioner; the employer-employee relationship would likewise be terminated unless petitioner would allow respondent to continue driving the jeepney on a boundary basis of
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National Labor Relations Commission P550.00 daily despite the termination of their vendor-vendee relationship.(Oscar Villamaria, Jr. vs. Court of Appeals, G.R. No. 165881,April 19, 2006) Burden of Proof We find a flaw in petitioners assertion that private respondents reconnecting the electric service, although the payment was insufficient, was an indication that he misappropriated petitioners funds. As pointed out by the Labor Arbiter, petitioner did not adduce any evidence that private respondent caused the said reconnection. The assertion has no probative value unless proven. When private respondent cancelled the receipts, the petitioner should have been put on notice that there was something unusual, before it allowed the reconnection. In dismissal cases, the employer carries the burden of proving that the dismissal is in order. Article 277 (b) of the Labor Code states in no uncertain terms: The burden of proving that the termination was for a valid or authorized cause shall rest on the employer.(Manila Electric Company (MERALCO),VS. NLRC and Manuel H. Delos Santos,G.R. No. 153180, September 2, 2005) Time and again we have said that in illegal dismissal cases, the employer is burdened to prove just cause for terminating the employment of its employee with clear and convincing evidence. The weakness of the employees defense should not operate to relieve nor discharge the employer of its burden to prove its charges pursuant to the guaranty of tenure granted by the Constitution to employees under the Labor Code. The case of the employer must stand or fall on its own merits. (Robert C. Casol and NAGSAMA-PUREFOODS-PULO vs. Purefoods Corporation G.R. No. 166550,September 22, 2005) In dismissing an employee, the employer has the burden of proving that the former worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employers decision to dismiss him. In Tan v. NLRC, it was held that the first notice must state that dismissal is sought for the act or omission charged against the employee, otherwise, the notice cannot be considered sufficient compliance with the rules. (Electro System Industries Corporation vs. NLRC, G.R. No. 165282, October 5, 2005) In Electro System Industries Corporation v. National Labor Relations Commission, [16] we held that, in dismissing an employee, the employer has the burden of proving that the worker has been served two notices: (1) one to apprise him of the particular acts or omissions for which his dismissal is sought, and (2) the other to inform him of his employers decision to dismiss him. The first notice must state that the dismissal is sought for the act or omission charged against the employee, otherwise the notice cannot be considered sufficient compliance with the rules. It must also inform outright that an investigation will be conducted on the charges particularized therein which, if proven, will result to his dismissal. Further, we held that a notation in the notice that the employee refused to sign is not sufficient proof that the employer attempted to serve the notice to the employee. (Lakpue Drug Inc., et. al. vs. Ma. Lourdes Belga, G.R. No. 166379, October
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National Labor Relations Commission 20, 2005) In termination cases, like the present controversy, the burden of proving the circumstances that would justify the employees dismissal rests with the employer. The best proof that petitioner should have presented to prove the probationary status of respondent is her employment contract. None, having been presented, the continuous employment of respondent as an account specialist for almost 11 months, from April 17, 2000 to March 12, 2001, means that she was a regular employee and not a temporary reliever or a probationary employee. The 2 Payroll Authorities offered by petitioner showing that respondent was hired as a replacement, and later, as a probationary employee do not constitute substantial evidence. As correctly found by the NLRC, none of these documents bear the conformity of respondent, and are therefore, self-serving. And while it is true that by way of exception, the period of probationary employment may exceed six months when the parties so agree, such as when the same is established by company policy, or when it is required by the nature of the work, none of these exceptional circumstance were proven in the present case. Hence, respondent whose employment exceeded six months is undoubtedly a regular employee of petitioner.(San Miguel Corporation vs. Caroline C. Del Rosario,G.R. Nos. 168194 & 168603,December 13, 2005) On this, the Court could not be any clearer in Mayon Hotel & Restaurant vs. Rolando Adana, et al, when we held that inasmuch as respondents therein have set out with particularity in their complaint, position paper, affidavits and other documents the labor standard benefits they are entitled to, and which they alleged that petitioners therein have failed to pay them, it became incumbent upon the employers to prove that they have paid these money claims. This is in tune with the general precept that: one who pleads payment has the burden of proving it, and even where the employees must allege nonpayment, the general rule is that the burden rests on the defendant to prove nonpayment, rather than on the plaintiff to prove non payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer. (Veterans Security Agency Inc. and Jesus R. Vargas vs. Felipe Gonzalvo, jr.,G.R. No. 159293,December 16, 2005) In constructive dismissal, the employer has the burden of proving that the transfer of an employee is for just and valid grounds, such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this burden of proof, the employees transfer shall be tantamount to unlawful constructive dismissal. (Westmont Phamacueticals, Inc., United Laboratoties, Inc., and/or Jose Yao Campos, Carlos Ejercito, Ernesto Salazar, Eliezer Salazar, Jose Solidum, Jr. vs. Ricardo C. Samaniego,G.R. Nos. 146653-54,Ricardo C. Samaniego vs. Westmont Pharmaceuticals, Inc. and United Laboratories, Inc.,G.R. Nos. 147407-08,February 20, 2006)
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National Labor Relations Commission The Court is well-aware that in labor cases, the employer has the burden of proving that the employee was not dismissed or if dismissed, that the dismissal was not illegal, and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. The Court ruled in Great Southern Maritime Services Corp. v. Acua, to wit: Time and again we have ruled that in illegal dismissal cases like the present one, the onus of proving that the employee was not dismissed or if dismissed, that the dismissal was not illegal, rests on the employer and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. Thus, petitioners must not only rely on the weakness of respondents evidence but must stand on the merits of their own defense. A party alleging a critical fact must support his allegation with substantial evidence for any decision based on unsubstantiated allegation cannot stand as it will offend due process. x x x (Emphasis supplied)(Dina Abad, Joseph Martinez and Eliseo Escanillas, JR., vs. Roselle Cinema, Silverscreen Corp. and Vermy Trinidad,G.R. No. 141371March 24, 2006) In conjunction with the above-mentioned policy of the law, it is well-encrypted in our jurisprudence that the employer has the burden of proving that the dismissal is for just cause, and failure to do so would necessarily mean that the dismissal was unjustified and, therefore, illegal. It is the employer who must prove its validity, and not the employee who must prove its invalidity. To allow an employer to dismiss an employee based on mere allegations and generalities would place the employee in a dangerous situation. He would be at the mercy of his employer and the right to security of tenure, which this Court is bound to protect, would be unduly emasculated.(Sanyo Travel Corporation v. National Labor Relations Commission, 345 Phil. 346, 357 (1997)(Tower Industrial Sales, et al. Vs. Hon. Court of Appeals, et al.G.R. No. 165727. April 19, 2006)] Time honored is the rule that in dismissal cases, the burden of proof is on the employer to show that the employee was dismissed for a valid and just cause. In the case at bar, ETPI dismissed Diamse based on loss of trust and confidence. However, to be a valid ground for dismissal, the loss of trust and confidence must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Loss of trust and confidence must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion, otherwise, the employee would eternally remain at the mercy of the employer. The employer, thus, carries the burden of clearly and convincingly establishing the facts upon which loss of confidence in the employee may be made to rest. ( Eastern Communications Phils., INC., vs. Maria Charina Diamse,G.R. No. 1692997) Petitioner, however, insists that during his four-day absence, respondent was leading an illegal strike in its sister company. In the first place, there is no showing that the strike held at the Genuino Agro Industrial Development Corporation is illegal. It is a basic rule in evidence that each party must prove his affirmative allegation. Since the burden of evidence lies with the party who asserts the affirmative allegation, the plaintiff or complainant has to prove his affirmative allegations in the complaint and the defendant or
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National Labor Relations Commission the respondent has to prove the affirmative allegation in his affirmative defenses and counterclaim. Since it was petitioner who alleged that such strike is illegal, petitioner must, therefore, prove it. Except for such bare allegation, there is a dearth of evidence in this case proving the illegality of said strike. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) It bears stressing that in termination cases, the employer bears the onus of proving that the dismissal was for just cause. Indeed, a condemnation of dishonesty and disloyalty cannot arise from suspicions spawned by speculative inferences. Because of its subjective nature, this Court has been strictly scrutinizing the allegations and the evidence in cases of dismissal based on loss of trust and confidence because they can easily be concocted by an abusive employer. 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. The fact that respondent is a managerial employee does not by itself exclude him from the protection of the constitutional guarantee of security of tenure. We agree with the NLRC and the CA that one month suspension, and not dismissal, is the proper sanction against respondent under the circumstances of this case. (C.F. SHARP & CO., INC., vs Renato Zialcita,G.R. No. 157619, July 17, 2006) It must be emphasized at this point that the onus probandi to prove the lawfulness of the dismissal rests with the employer. In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause. Failure to do so would necessarily mean that the dismissal was not justified and therefore was illegal. In the instant case, petitioners failed to discharge the burden of proving the legality and validity of respondents dismissal.(NLRC vs MA. Bernabette S. Salgarino,G.R. No. 164376,July 31, 2006) As for the medical examination result which petitioner belatedly presented before the Court of Appeals, the law clearly requires that there should first be a job order relating to an existing overseas position before a worker shall be subjected to a medical examination. In this case, as petitioner is the one insisting that a job order exists, he bears the burden of producing the same. After all, the rule is settled that he who alleges must prove.[32] Petitioner miserably failed to discharge this burden.(Godofredo Morales, vs Skills International Company and/or Maher Daas and Marivic Daas and/or Wallal Al Wallan, G.R. No. 149285,August 30, 2006) In termination cases, the employer has the burden of proving that an employee has been lawfully dismissed. Respondents have discharged the burden of proving serious misconduct in this case. As defined, [m]isconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. To be a just cause for dismissal under Art. 282 of the Labor Code, such misconduct (a) must be serious; (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer.(Estrella S. Baez, et al. vs. De La Salle University,G.R. No. 167177,September 27, 2006) As correctly pointed out by petitioners, the burden of proving just cause for dismissing an employee rests upon the employer, and the employers failure to discharge such burden results in a finding that the dismissal is unjustified and therefore illegal. It is
25
National Labor Relations Commission the employer who must prove the validity of the termination and not the employee who must prove the reverse. The employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. (Nelson Zagala and Feliciano M. Angelesvs. Mikado PhilippinesCorporation ,G.R. No. 160863, September 27, 2006) Moreover, one who pleads payment has the burden of proving it. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave, and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer. Thus, the burden of showing with legal certainty that the obligation has been discharged with payment falls on the debtor, in accordance with the rule that one who pleads payment has the burden of proving it.[38] Only when the debtor introduces evidence that the obligation has been extinguished does the burden shift to the creditor, who is then under a duty of producing evidence to show why payment does not extinguish the obligation. In this case, petitioner was unable to present ample evidence to prove its claim that respondent had received all his salaries and benefits in full. (G & M Philippines, Inc vs Romil V. Cuambot,G.R. No. 162308,November 22, 2006) The Court agrees with the analysis and conclusion of the CA that, based on the facts of the case, respondents were constructively dismissed. It must be stressed that where an employee complains of constructive dismissal, it is the employer who bears the burden of proving that the transfer of an employee is for just and valid grounds, such as genuine business necessity, and such transfer is not unreasonable, inconvenient, or prejudicial to the employee. An employers failure to discharge such burden would make him liable for unlawful contructive dismissal. (Star Paper Corporation vs Carlito Espiritu, et al.,G.R. NO. 154006,November 2, 2006) It is well-settled that the employer has the burden of proving that the dismissal was for a valid and just cause. Failure to discharge this burden of proof substantially means that the dismissal was not justified and therefore, illegal.[14] Given petitioners failure to discharge this burden, the Court sustains the finding of illegal dismissal vis--vis respondent Joselito Tinghil. (Pamplona Plantation Company,vs Ramon Acosta, et al., GR. No. 15319,December 6, 2006) Business Judgment Rule While it may indeed be conceded that the previous dispensation of petitioner IBC13 footed the bill for the withholding taxes, upon discovery by the new management, this was stopped altogether as this was grossly prejudicial to the interest of the petitioner IBC13. The policy of withholding the taxes due on the differentials as a remedial measure was a matter of sound business judgment and dictates of good governance aimed at protecting the interests of the government. Necessarily, the newly-appointed board and officers of the petitioner, who learned about this grossly disadvantageous mistake committed by the former management of petitioner IBC-13 cannot be expected to just follow suit blindly. An illegal act simply cannot give rise to an obligation. Accordingly, the new officers were correct in not honoring this highly suspect practice and it is now their duty to rectify this anomalous occurrence, otherwise, they become remiss in the performance of their sworn
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National Labor Relations Commission responsibilities. .(IBC 13 vs NOEMI B. AMARILLA, G.R. No. 162775,October 27, 2006) Certificate of Non-Forum Shopping Petitioners appreciation of the Escorpizo ase is less than accurate. The petitioners therein were Esperanza Escorpizo, a dismissed teacher, and the union to which she belonged, the University of Baguio Faculty Education Workers Union. Neither the teacher nor the union signed the certification of non-forum shopping. It was their counsel who executed and signed the certification. We thus held that the certification of non-forum shopping must be by the plaintiff or any of the principal party and not the attorney. Escorpizo laid down the doctrine that a certification of non-forum shopping signed only by the parties counsel is insufficient. Nowhere in the said case, other than a mere obiter dictum, did we categorically rule that a certification of non-forum shopping signed by only one of the principal parties is sufficient compliance with the rules. Therefore, petitioners reliance on Escorpizo is patently misplaced.(Jimmy Kent Rambuyon, et. al. vs. Fiesta Brands Inc.,G.R. No. 157029,December 15, 2005) The requirement that a petitioner or principal party should sign the certificate of non-forum shopping applies even to corporations, considering that the mandatory directives of the Rules of Court make no distinction between natural and juridical persons. (LDP Marketing, Inc. and Ma. Lourdes De La Pea, vs. Erlinda Dyolde Monter,G.R. No. 159653,January 25, 2006) Liberal interpretation of the rule on forum shopping The Court finds petitioners reasons justifiable enough to warrant a relaxation of the rule on certification against forum-shopping. In addition, it has been ruled that where the parties share a common interest in the case or filed the case as a collective, raising only one common cause of action or defense, then the signature of one of the petitioners, acting as representative, is sufficient compliance.(Tirso Enopia, Virgilio Nano,et al vs Court of Appeals, G.R. No. 147396, July 31, 2006) It must also be kept in mind that while the requirement of the certificate of nonforum shopping is mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the objective of preventing the undesirable practice of forumshopping (Bernardo v. NLRC, 255 SCRA 108 [1996]). Lastly, technical rules of procedure should be used to promote, not frustrate justice. While the swift unclogging of court dockets is a laudable objective, the granting of substantial justice is an even more urgent ideal. (Italics in the original; emphasis and underscoring supplied) (LDP Marketing, Inc. and Ma. Lourdes De La Pea, vs. Erlinda Dyolde Monter,G.R. No. 159653,January 25, 2006) Certificate of Non-forum Shopping by a Corporation
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National Labor Relations Commission The necessity for a certification of non-forum shopping in filing petitions for certiorari is found in Rule 65, Section 1, in relation to Rule 46, Section 3 of the Rules of Court. These provisions require it to be executed by the corresponding petitioner or petitioners. As no distinction is made as to which party must execute the certificate, this requirement is made to apply to both natural and juridical entities. When the petitioner is a corporation, the certification should be executed by a natural person. Furthermore, not just any person can be called upon to execute the certification, although such a person may have personal knowledge of the facts to be attested to.(Philippine Airlines, Inc., Manolo Aquino, Jorge Ma. Cui, Jr. and Patricia Chiong, vs. Flight Attendants AND Stewards Association of the Philippines (FASAP) and Leonardo Bhagwani G.R. No. 143088,January 24, 2006) In Zulueta v. Asia Brewery, Inc.,[ G.R. No. 138137, 8 March 2001, 354 SCRA 100] we held that the requirement for petitioner to sign the certificate of non-forum shopping applied even to corporations, considering that the mandatory directives of the Rules of Court made no distinction between natural and juridical persons. In case of a corporation, it has long been settled that the certificate must be signed for and on its behalf by a specifically authorized officer or agent who has personal knowledge of the facts required to be disclosed. We discussed the rationale behind the rule in National Steel Corporation v. Court of Appeals: Unlike natural persons, corporations may perform physical actions only through properly delegated individuals; namely, its officers and/or agents. The corporation, such as the petitioner, has no powers except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence. In turn, a corporation exercises said powers through its board of directors and/ or its duly authorized officers or agents. Physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by specific act of the board of directors.(Metro Drug Distribution, nc. vs Noel M. Narciso, G.R. No. 147478,July 17, 2006) Board Resolution Thus, only individuals vested with authority by a valid board resolution may sign the certificate of non-forum shopping in behalf of a corporation. In addition, the Court has required that proof of said authority must be attached. Failure to provide a certificate of non-forum shopping is sufficient ground to dismiss the petition. Likewise, the petition is subject to dismissal if a certification was submitted unaccompanied by proof of the signatorys authority. (Philippine Airlines, Inc., Manolo Aquino, Jorge Ma. Cui, Jr. and Patricia Chiong, vs. Flight Attendants AND Stewards Association of the Philippines (FASAP) and Leonardo Bhagwani G.R. No. 143088,January 24, 2006)
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National Labor Relations Commission Certiorari Section 1, Article VIII, of the Constitution provides that judicial power shall be vested in one Supreme Court and in such other courts as may be established by law. Judicial power includes the duty of the courts of justice to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of bench or instrumentality of the government. The Court has original jurisdiction over petitions for certiorari, prohibitions and mandamus, and may review on appeal or certiorari as the law on the Rules of Court may provide final judgment and orders of lower courts, and cases in which only questions of law is involved. However, if a petition for certiorari involves the acts or omissions of a quasi-judicial agency and unless otherwise provided by law or the Rules of Court, the petition for certiorari shall be final and is cognizable only by the Court of Appeals. One such quasi-judicial agency is the NLRC. Inasmuch as the appellate court has exclusive appellate jurisdiction over quasi-judicial agencies under Rule 43, petitions for review on certiorari should be filed only with the CA, unless otherwise provided by law or the Rules. (Feria, 1997 RULES OF PROCEDURE, 265)(Hanjin Engineering and Construction Co. Ltd./Nam Hyum Kim VS. Court of Appeals,G.R. No. 165910,April 10, 2006) The Court cannot be tasked to go over the proofs presented by the parties and analyze, assess and weigh them all over again to ascertain if the trial court or quasijudicial agency and the appellate court were correct in according superior credit to this or that piece of evidence of one party or the other. The sole office of a writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack of jurisdiction, and does not include the review of public respondents evaluation of the evidence and the factual findings based thereon. Therefore, the present petition for certiorari fails insofar as it questions the affirmation by the CA of the factual finding of the labor arbiter that private respondents were illegally dismissed, entitling them to an award of backwages, unpaid benefits, separation pay and attorneys fees.(Romys Freight Service vs. Jesus C. Castro,Dominador Veloria and the First Division of the Court of APPEALS,G.R. No. 141637,June 8, 2006) For a Petition for Certiorari to prosper, the following requisites must be present: (1) the writ is directed against a tribunal, a board or an officer exercising judicial or quasijudicial functions: (2) such tribunal, board or officer has acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law. (Manila Memorial Park Cemetery, Inc. and/or Enrique B. Lagdameo vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006) Judicial review of decisions of the NLRC via petition for certiorari under Rule 65 is confined only to issues of lack or excess of jurisdiction and grave abuse of discretion on the part of the NLRC. Thus Danzas Intercontinental, Inc. v. Daguman teaches: x x x As a general rule, in certiorari proceedings under Rule 65 of the Rules of Court under which the petition was brought to the Court of Appeals, the appellate court does not assess and weigh the sufficiency of evidence
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National Labor Relations Commission upon which the labor arbiter and the NLRC based their conclusions, the query being limited to the determination of whether or not the NLRC acted without or in excess of its jurisdiction or with grave abuse of discretion in rendering its resolution, except if the findings of the NLRC are not supported by substantial evidence. (Italics in the original; underscoring supplied)(Digitel Telecommunications Philippines vs. Mariquit Soriano,G.R. No. 166039, June 26, 2006) Only those pleadings, parts of case records and documents which are material and pertinent, in that they may provide the basis for a determination of a prima facie case of abuse of discretion, are required to be attached to a petition for certiorari. A petition lacking such documents contravenes paragraph 2, Section 1, Rule 65 and may be dismissed outright under Section 3, Rule 46. However, if it is shown that the omission has been rectified by the subsequent submission of the documents required, the petition must be given due course or reinstated, if it had been previously dismissed. (Air Philippines Corporation vs Enrico E. Zamora,G.R. NO. 148247,August 7, 2006) The essential requisites for a Petition for Certiorari under Rule 65 are: (1) the writ is directed against a tribunal, a board, or an officer exercising judicial or quasi-judicial function; (2) such tribunal, board, or officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular proceeding, because the conditions which alone authorize the exercise of the general power in respect of it are wanting. Without jurisdiction means lack or want of legal power, right or authority to hear and determine a cause or causes, considered either in general or with reference to a particular matter. It means lack of power to exercise authority. Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.(Cathay Pacific Steel Corporation vs Court of Appeals G.R. No. 164561, August 30, 2006) Additionally, the general rule is that a writ of certiorari will not issue where the remedy of appeal is available to the aggrieved party. The remedies of appeal in the ordinary course of law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually exclusive and not alternative or cumulative. Time and again this Court reminded members of the bench and bar that the special civil action of Certiorari cannot be used as a substitute for a lost appeal where the latter remedy is available. Such a remedy will not be a cure for failure to timely file a Petition for Review on Certiorari under Rule 45. Nor can it be availed of as a substitute for the lost remedy of an ordinary appeal, especially if such loss or lapse was occasioned by ones own negligence or error in the choice of remedies. .(Cathay Pacific Steel Corporation vs Court of Appeals G.R. No. 164561, August 30, 2006)
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National Labor Relations Commission There are three essential dates that must be stated in a petition for certiorari brought under Rule 65. First, the date when notice of the judgment or final order or resolution was received; second, when a motion for new trial or reconsideration was filed; and third, when notice of the denial thereof was received. Failure of petitioner to comply with this requirement shall be sufficient ground for the dismissal of the petition. Substantial compliance will not suffice in a matter involving strict observance with the Rules.(Dr. Rey C. Tambong, vs R. Jorge Development Corporation G.R. No. 146068, August 31, 2006) At the outset, we note that this case was brought before us via petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure. The proper remedy, however, was to file a petition under Rule 45. It must be stressed that certiorari under Rule 65 is a remedy narrow in scope and inflexible in character. It is not a general utility tool in the legal workshop. Moreover, the special civil action for certiorari will lie only when a court has acted without or in excess of jurisdiction or with grave abuse of discretion. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006) The impropriety of this conclusion, as perceived by petitioner, cannot be the subject of a petition for certiorari. If ever there was indeed an error committed by the appellate court in its appreciation of the facts and the subsequent conclusions it had reached, such would be, at the least, an error of fact which is not equivalent to grave abuse of discretion. The special civil action for certiorari is a remedy designed for the correction of errors of jurisdiction and not errors of judgment. The raison detre for the rule is when a court exercises its jurisdiction, an error committed while so engaged does not deprive it of the jurisdiction being exercised when the error is committed. If it did, every error committed by a court would deprive it of its jurisdiction and every erroneous judgment would be a void judgment. Hence, where the issue or question involved affects the wisdom or legal soundness of the decision not the jurisdiction of the court to render the decision the same is beyond the province of a special civil action for certiorari. (MC Rural Electric Service Cooperative Inc., vs The Hon. Court of Appeals, G.R. No. 153144,October 12, 2006) To begin with, we must stress that herein respondents went to the CA from the adverse decision of the NLRC thru the vehicle of certiorari under Rule 65 of the Rules of Court. Reviewing the records of this case, the Court is convinced that at no time at all did the NLRC commit grave abuse of discretion. Its affirmance of the Labor Arbiters award of disability benefits in favor of the petitioner was based on the arbiters findings of facts which are supported by substantial evidence. Such findings, therefore, cannot be made the subject of the special civil action of certiorari under Rule 65. For it is settled that in a petition for certiorari under Rule 65, the inquiry is confined to issues of jurisdiction or grave abuse of discretion. Besides, resort to judicial review of the decisions of the NLRC by way of a special civil action of certiorari under Rule 65 is limited only to issues of want or excess of jurisdiction and grave abuse of discretion on the part of the labor tribunal. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor agency in reaching its conclusion. Neither is it for the CA nor this Court to re-examine conflicting evidence, re-evaluate the credibility of witnesses or substitute the findings of fact of an administrative body which has gained expertise in its specialized
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National Labor Relations Commission field. Arguably, there may even be some error in judgment. This, however, is not within the office of the extraordinary remedy of certiorari.[7] Findings of facts of quasi-judicial agencies, like the NLRC, which have acquired expertise in the specific matters entrusted to their jurisdiction are accorded by this Court not only respect but even finality if supported by substantial evidence.[8] Only substantial, not preponderance of evidence is necessary.[9] Section 5, Rule 133 of the Rules of Court states in express terms that in cases filed before administrative or quasi-judicial bodies, a fact may be deemed established if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. (Robert B. Cabuyoc vs Inter-Orient Navigation Shipmanagement, Inc. , G.R. No. 166649,November 24, 2006) Remedies of appeal under Rule 45 and an original action for certiorari under Rule 65; mutually exclusive It must be stressed that the remedies of appeal under Rule 45 and an original action for certiorari under Rule 65 are mutually exclusive. Indeed, in Land Bank of the Philippines v. Court of Appeals, the Court had the occasion to state: The general rule is that a cert writ will not issue where the remedy of appeal is available to the aggrieved party. The remedies of appeal in the ordinary course of law and that of certiorari under Rule 65 of the Revised Rules of Court are mutually exclusive and not alternative or cumulative. Hence, the special civil action for certiorari under Rule 65 is not and cannot be a substitute for an appeal, where the latter remedy is available. x x x The proper recourse of the aggrieved party from a decision of the CA is a petition for review on certiorari under Rule 45 of the Revised Rules of Court. On the other hand, if the error subject of the recourse is one of jurisdiction, or the act complained of was perpetrated by a quasi-judicial officer or agency with grave abuse of discretion amounting to lack or excess of jurisdiction, the proper remedy available to the aggrieved party is a petition for certiorari under Rule 65 of the said Rules.(Hanjin Engineering and Construction Co. Ltd./Nam Hyum Kim vs. Court of Appeals,G.R. No. 165910,April 10, 2006) Petitioners cannot now use this special civil action for certiorari, an extraordinary remedy, as a mode of obtaining a reversal of a decision they omitted to bring to us on appeal. Time and again, this Court has held that the special civil action for certiorari is not and cannot be made a substitute for a lapsed appeal. A petition under Rule 65 is an independent action that cannot be availed of as a proxy for the lost remedy of an appeal under Rule 45, especially if the loss or lapse was occasioned by ones own neglect or error in the choice of remedies. We need not belabor this point for the rule and the exception that proves it are stated quite succinctly in Federation of Free Workers v. Inciong: While the special civil action of certiorari may be availed of in the alternative situation where an appeal would not constitute a plain, speedy, and adequate remedy, this is on the theoretical assumption that the right to
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National Labor Relations Commission appeal is still available in the case. If, however, the remedy by appeal had already been lost and the loss was occasioned by petitioners own neglect or error in the choice of remedies, certiorari cannot lie as a substitute or a tool to shield the petitioner from the adverse consequences of such neglect or error.(Davao Merchant Marine Academy, et al. Vs. Court of Appeals, et al.G.R. No. 144075. April 19, 2006) Petitioners' resort to a petition for certiorari under Rule 65 is proper considering that petitioners are assailing the resolutions of the CA dismissing their petition outright. Ordinarily, the proper recourse of an aggrieved party from a decision of the CA is a petition for review on certiorari under Rule 45 of the Rules of Court. However, if the error alleged is one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion amounting to lack or excess of jurisdiction, the proper remedy available to the aggrieved party is a petition for certiorari under Rule 65 of the said Rules.[21] (Jang Lim, et al., vs Court of Appeals, G.R. No. 149748,November 16, 2006)
Classification of Employment Regular and Casual Employment In ruling for the respondent, the appellate court applied Article 280 of the Labor Code of the Philippines, as amended, which reads: Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral argument of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph; Provided, That, any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. (Philips Semiconductors (Phils.), Inc., vs. Eloisa Fadriquela,G.R. No. 141717,April 14, 2004) Where the duties of the employee consist of activities which are necessary or desirable in the usual business of the employer, the parties are not prohibited from agreeing on the duration of employment. Article 280 does not proscribe or prohibit an employment contract with a fixed period provided it is not intended to circumvent the security of tenure. (Bernardino Labayog et. al vs. M.Y. San Biscuits, Inc. and Mew Wah Lim,G.R. No. 148102,July 11, 2006) The presumption is that when the work done is an integral part of the regular
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National Labor Relations Commission business of the employer and when the worker, relative to the employer, does not furnish an independent business or professional service, such work is a regular employment of such employee and not an independent contractor. The Court will peruse beyond any such agreement to examine the facts that typify the parties actual relationship.(ABS-CBN Broadcasting Corporation vs Marlyn Nazareno, et al. G.R. No. 164156,September 26, 2006) a. Regular Employees The two kinds of regular employees under the law are (1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed. The primary standard to determine a regular employment is the reasonable connection between the particular activity performed by the employee in relation to the business or trade of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. If the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not indispensability of that activity to the business of the employer. Hence, the employment is also considered regular, but only with respect to such activity and while such activity exists. The law does not provide the qualification that the employee must first be issued a regular appointment or must be declared as such before he can acquire a regular employee status. (Philips Semiconductors (Phils.), Inc., vs. Eloisa Fadriquela,G.R. No. 141717,April 14, 2004) It is of no moment that petitioner hired respondents as talents. The fact that respondents received pre-agreed talent fees instead of salaries, that they did not observe the required office hours, and that they were permitted to join other productions during their free time are not conclusive of the nature of their employment. Respondents cannot be considered talents because they are not actors or actresses or radio specialists or mere clerks or utility employees. They are regular employees who perform several different duties under the control and direction of ABS-CBN executives and supervisors. Thus, there are two kinds of regular employees under the law:(1) those engaged to perform activities which are necessary or desirable in the usual business or trade of the employer; and (2) those casual employees who have rendered at least one year of service, whether continuous or broken, with respect to the activities in which they are employed.(ABS-CBN Broadcasting Corporation vs Marlyn Nazareno, et al. G.R. No. 164156,September 26, 2006) The law overrides such conditions which are prejudicial to the interest of the worker whose weak bargaining situation necessitates the succor of the State. What determines whether a certain employment is regular or otherwise is not the will or word of the employer, to which the worker oftentimes acquiesces, much less the procedure of hiring
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National Labor Relations Commission the employee or the manner of paying the salary or the actual time spent at work. It is the character of the activities performed in relation to the particular trade or business taking into account all the circumstances, and in some cases the length of time of its performance and its continued existence. It is obvious that one year after they were employed by petitioner, respondents became regular employees by operation of law. (ABS-CBN Broadcasting Corporation vs. Marlyn Nazareno, et al. G.R. No. 164156,September 26, 2006) The Court takes judicial notice of the fact that Lipercon and Skillpower were declared to be labor-only contractors, providing as they do manpower services to the public for a fee. The existence of an employer-employee relationship is factual and we give due deference to the factual findings of both the NLRC and the CA that an employeremployee relationship existed between SMC (or its subsidiaries) and Maliksi. Indeed, having served SMC for an aggregate period of more than three (3) years through employment contracts with these two labor contractors, Maliksi should be considered as SMCs regular employee. The hard fact is that he was hired and re-hired by SMC to perform administrative and clerical work that was necessary to SMCs business on a daily basis. In Bustamante v. National Labor Relations Commission, we ruled: In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same kind of work they were hired to perform in September 1989. Both the labor arbiter and the respondent NLRC agree that petitioners were employees engaged to perform activities necessary in the usual business of the employer. As laborers, harvesters or sprayers in an agricultural establishment which produces high grade bananas, petitioners tasks are indispensable to the year-round operations of respondent company. This belies the theory of respondent company that the employment of petitioners was terminated due to the expiration of their probationary period in June 1990. If at all significant, the contract for probationary employment was utilized by respondent company as a chicanery to deny petitioners their status as regular employees and to evade paying them the benefits attached to such status. Some of the petitioners were hired as far back as 1985, although the hiring was not continuous. They were hired and re-hired in a span of from two to four years to do the same type of work which conclusively shows the necessity of petitioners service to the respondent companys business. Petitioners have, therefore, become regular employees after performing activities which are necessary in the usual business of their employer. But, even assuming that the activities of petitioners in respondent companys plantation were not necessary or desirable to its business, we affirm the public respondents finding that all of the complainants (petitioners) have rendered non-continuous or broken service for more than one (1) year and are consequently considered regular employees. (San Miguel Corporation, vs. NLRC,G.R. No. 147566,December 6, 2006) Househelper as Regular Employee In Apex Mining Company, Inc. v. NLRC,[32] this Court held that a househelper in the staff houses of an industrial company was a regular employee of the said firm. We ratiocinated that: Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms househelper or domestic servant are defined as follows:
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National Labor Relations Commission The term househelper as used herein is synonymous to the term domestic servant and shall refer to any person, whether male or female, who renders services in and about the employers home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employers family. The foregoing definition clearly contemplates such househelper or domestic servant who is employed in the employers home to minister exclusively to the personal comfort and enjoyment of the employers family. Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and similar househelps. xxx xxx xxx
The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. (Remington Industrial Sales Corporation, vs Erlinda Castaneda, G.R. Nos. 169295-96, November 20, 2006) Continuous Rehiring of Employee This Court has held that an employment ceases to be co-terminous with specific projects when the employee is continuously rehired due to the demands of employers business and re-engaged for many more projects without interruption.[20] In Maraguinot, Jr. v. NLRC (Second Division),[21] the Court ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, rehired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee, pursuant to Article 280 of the Labor Code and jurisprudence.[22] (Hermonias L. Liganza vs RBL Shipyard Corp.,G.R. No. 159862,October 17, 2006) Furthermore, as petitioners themselves admitted in their petition before this Court, private respondent was repeatedly hired as part of the boats crew and he acted in various capacities onboard the vessel. In Integrated Contractor and Plumbing Works, Inc. v. National Labor Relations Commission, we held that the test to determine whether employment is regular or not is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. And, if the employee has been performing the job for at least one year, even if the performance is not continuous or merely intermittent, the law deems the repeated and continuing need for its performance as sufficient evidence of the necessity, if not
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National Labor Relations Commission indispensability of that activity to the business. (Poseidon Fishing/Terry De Jesus vs. NLRC and Jimmy S. Estoquia,G.R. No. 168052,February 20, 2006)
The Labor Code states: Art. 280. Regular and Casual Employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration of the season. Even assuming that respondent was hired as a project employee from the onset, we have ruled that once such an employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee.[19] (PLDT vs Mayflor T. Ylagan,G.R. No. 155645,November 24, 2006) We do not sustain public respondents theory that private respondent should not be made to compensate petitioners for backwages because its termination of their employment was not made in bad faith. The act of hiring and re-hiring the petitioners over a period of time without considering them as regular employees evidences bad faith on the part of private respondent. The public respondent made a finding to this effect when it stated that the subsequent re-hiring of petitioners on a probationary status clearly appears to be a convenient subterfuge on the part of management to prevent complainants (petitioners) from becoming regular employees. (Emphasis supplied) (San Miguel Corporation, vs. NLRC,G.R. No. 147566,December 6, 2006) b. Contractual Employment From the foregoing cases, it is clear that seafarers are considered contractual employees. Their employment is governed by the contracts they sign every time they are rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time. They fall under the exception of Article 280 [of the Labor Code] whose employment has been fixed for a specific project or undertaking . . . We need not depart from the rulings of the Court in the two aforementioned cases which indeed constitute stare decisis with respect to the employment status of seafarers. (Underscoring and words in bracket added) (Amelia J. Delos Santos vs. Jebsen Maritime Inc., G.R. No. 154185, November 22, 2005)
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National Labor Relations Commission Seafarers are Contractual Employees In Ravago v. Esso Eastern Marine, Ltd., the Court traced its ruling in a number of cases that seafarers are contractual, not regular, employees. Thus, in Brent School, Inc. v. Zamora, the Court cited overseas employment contract as an example of contracts where the concept of regular employment does not apply, whatever the nature of the engagement and despite the provisions of Article 280 of the Labor Code. In Coyoca v. NLRC, the Court held that the agency is liable for payment of a seamans medical and disability benefits in the event that the principal fails or refuses to pay the benefits or wages due the seaman although the seaman may not be a regular employee of the agency. (Petroleum Shipping Ltd. vs. NLRC,G.R. No. 148130,June 16, 2006)
Collective Bargaining Agreement n the case at bar, it cannot be denied that the CBA that was about to expire at that time contained provisions respecting the Retirement Plan. As the latter benefit was already subject of the existing CBA, the members of UFE-DFA-KMU were only exercising their prerogative to bargain or renegotiate for the improvement of the terms of the Retirement Plan just like they would for all the other economic, as well as non-economic benefits previously enjoyed by them. Precisely, the purpose of collective bargaining is the acquisition or attainment of the best possible covenants or terms relating to economic and non-economic benefits granted by employers and due the employees. The Labor Code has actually imposed as a mutual obligation of both parties, this duty to bargain collectively. The duty to bargain collectively is categorically prescribed by Article 252 of the said code. It states: ART. 252. MEANING OF DUTY TO BARGAIN COLLECTIVELY. The duty to bargain collectively means the performance of a mutual obligation to meet and confer promptly and expeditiously and in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreement if requested by either party, but such duty does not compel any party to agree to a proposal or to make any concession. Further, Article 253, also of the Labor Code, defines the parameter of said obligation when there already exists a CBA, viz: ART. 253. DUTY TO BARGAIN COLLECTIVELY WHEN THERE EXISTS A COLLECTIVE BARGAINING AGREEMENT. The duty to bargain collectively shall also mean that either party shall not terminate nor modify such agreement during its lifetime. However, either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of both parties to keep the status quo and to continue in full force and effect the terms and conditions of the existing agreement during the sixty day period and/or until a new agreement is reached by the parties. And, in demanding that the terms of the Retirement Plan be opened for renegotiation, the members of UFE-DFA-KMU are acting well within their rights as we
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National Labor Relations Commission have, indeed, declared that the Retirement Plan is consensual in character; and so, negotiable.(Skippers United Pacific, Inc., and J.P. Samartzsis Maritime Enterprises Co., S.A., vs. Jerry Maguad and Porferio Ceudadano,G.R. No. 166363,August 15, 2006) A collective bargaining agreement is a contract entered into by the union representing the employees and the employer. However, even the non-member employees are entitled to the benefits of the contract. To accord its benefits only to members of the union without any valid reason would constitute undue discrimination against non-members. A collective bargaining agreement is binding on all employees of the company. Therefore, whatever benefits are given to the other employees of ABS-CBN must likewise be accorded to private respondents who were regular employees of petitioner. Besides, only talent-artists were excluded from the CBA and not production assistants who are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer. (ABS-CBN Broadcasting Corporation vs Marlyn Nazareno, et al. G.R. No. 164156,September 26, 2006)
Command Responsibility n the present case, the tape receipts presented by respondents showed that there were anomalies committed in the branches managed by the petitioners. On the principle of respondeat superior or command responsibility alone, petitioners may be held liable for negligence in the performance of their managerial duties, unless petitioners can positively show that they were not involved. Their position requires a high degree of responsibility that necessarily includes unearthing of fraudulent and irregular activities. Their bare, unsubstantiated and uncorroborated denial of any participation in the cheating does not prove their innocence nor disprove their alleged guilt. Additionally, some employees declared in their affidavits that the cheating was actually the idea of the petitioners. (Anabelle Muaje-Tuazon vs Wenphil Corporation,G..R. No. 162447,December 27, 2006) Commissions Second, by nature, commissions are given to employees only if the employer receives income. Employees, as a reward, receive a percentage of the earnings of the employer, which they, through their efforts, helped produce. Commissions are also given in the form of incentives or encouragement so that employees will be inspired to put a little more industry into their tasks. Commissions can also be considered as direct remunerations for services rendered. All these different concepts of commissions are incongruent with the claim that an employee can continue to receive them indefinitely after reaching his mandatory retirement age.(International Broadcasting Corp. vs Reynaldo Benedicto,G.R. No. 152843, July 20, 2006)
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National Labor Relations Commission Company Investigation Petitioners contend that they were not given the opportunity to confront the witnesses against them. Petitioners must be reminded, however, that confrontation of witnesses is required only in adversarial criminal prosecutions, and not in company investigations for the administrative liability of the employee. Additionally, actual adversarial proceedings become necessary only for clarification, or when there is a need to propound searching questions to witnesses who give vague testimonies. This is not an inherent right, and in company investigations, summary proceedings may be conducted. (Anabelle MuajeTuazon vs Wenphil Corporation,G..R. No. 162447,December 27, 2006) Company Policy The concept of a bona fide occupational qualification is not foreign in our jurisdiction. We employ the standard of reasonableness of the company policy which is parallel to the bona fide occupational qualification requirement. In the recent case of Duncan Association of Detailman-PTGWO and Pedro Tecson v. Glaxo Wellcome Philippines, Inc., we passed on the validity of the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company. We held that Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors. We considered the prohibition against personal or marital relationships with employees of competitor companies upon Glaxos employees reasonable under the circumstances because relationships of that nature might compromise the interests of Glaxo. In laying down the assailed company policy, we recognized that Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures.(Star Paper Corporation vs. Ronaldo D. Simbol April 12, 2006) In Coca-Cola Bottlers, Phils. Inc v. Kapisanan ng Malayang Manngagawa sa CocaCola-FFW, it was held that an employer enjoys a wide latitude of discretion in the promulgation of policies, rules and regulations on work-related activities of the employees so long as they are exercised in good faith for the advancement of the employers interest and not for the purpose of defeating or circumventing the rights of the employees under special laws or under valid agreements. Company policies and regulations are generally valid and binding on the parties and must be complied with until finally revised or amended, unilaterally or preferably through negotiation, by competent authority. For misconduct or improper behavior to be a just cause for dismissal, the same must be related to the performance of the employees duties and must show that he has become unfit to continue working for the employer. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) We have held that it is the employers prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is the duty of the employee to obey all reasonable
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National Labor Relations Commission rules, orders, and instructions of the employer, and willful or intentional disobedience thereto, as a general rule, justifies recission of the contract of service and the peremptory dismissal of the employee. Private respondent requires its store personnel to issue corresponding cash slips or invoices for every item that is brought out of the store to allow it to monitor its inventory and to protect the company from theft or unauthorized releases of its merchandise. The employees manual did not qualify whether the goods are released to customers or to its employees. As Store Supervisor, petitioner had the heavier burden to be faithful to company rules and policies not only to protect the companys business but also to set a good example to her subordinates. Under Article 282 of the Labor Code, willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work is a ground for terminating an employment.[19] Petitioners violation of the companys regulations regarding the release of its stock constitutes a valid ground for terminating her services. (Loida V. Malabago vs National Labor Relations Commission,G.R. No. 165465,September 13, 2006) Compromise Agreement A compromise agreement is valid as long as the consideration is reasonable and the employee signed the waiver voluntarily, with a full understanding of what he was entering into. All that is required for the compromise to be deemed voluntarily entered into is personal and specific individual consent. Thus, contrary to respondents contention, the employees counsel need not be present at the time of the signing of the compromise agreement.(Eurotech Hair Systems, Inc., Lutz Kunack, and Jose Barin, vs Antonio S. Go, G.R. No. 160913 August 31, 2006) The general rule that the Labor Arbiter must be present during the signing of the compromise agreement is not immune to certain exceptions. Here, the submission of the Compromise Agreement on joint motion of the parties for approval by the Labor Arbiter cured whatever defect the signing of the agreement in the absence of the Labor Arbiter would have caused. So it is that in Santiago v. De Guzman,[17] the Court ruled: A compromise agreement entered into by the parties not in the presence of the Labor Arbiter before whom the case is pending shall be approved by him, if after confronting the parties, particularly the complainants, he is satisfied that they understand the terms and conditions of the settlement and that it was entered into freely and voluntarily by them. It is incumbent upon the Labor Arbiter not only to persuade the parties to settle amicably, but equally to ensure the compromise agreement is a fair one and that the same was forged freely, voluntarily with full understanding of the terms and conditions embodies therein as well as the consequences thereof. (Lady Lydia Cornista-Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) Res Judicata In law, a compromise agreement, once approved, has the effect of res judicata between the parties and should not be disturbed except for vices of consent, forgery, fraud, misrepresentation and coercion,[23] none of which exists in this case. The Compromise Agreement between the Union and the Bank binds the minority Union
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National Labor Relations Commission members. (Lady Lydia Cornista-Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) Force and Effect of Compromise Agreement In AFP Mutual Benefit Association, Inc. v. Court of Appeals, the Court spelled out the distinguishing features of a compromise agreement that is basically intended to resolve a matter already in litigation, or what is normally termed as a judicial compromise. The Court held that once approved, the agreement becomes more than a mere contract binding upon the parties, considering that it has been entered as the courts determination of the controversy and has the force and effect of any other judgment. The Court went on to state: Adjective law governing judicial compromises annunciate that once approved by the court, a judicial compromise is not appealable and it thereby becomes immediately executory but this rule must be understood to refer and apply only to those who are bound by the compromise and, on the assumption that they are the only parties to the case, the litigation comes to an end except only as regards to its compliance and the fulfillment by the parties of their respective obligations thereunder. The reason for the rule, said the Court in Domingo v. Court of Appeals [325 Phil. 469], is that when both parties so enter into the agreement to put a close to a pending litigation between them and ask that a decision be rendered in conformity therewith, it would only be natural to presume that such action constitutes an implicit waiver of the right to appeal against that decision. The order approving the compromise agreement thus becomes a final act, and it forms part and parcel of the judgment that can be enforced by a writ of execution unless otherwise enjoined by a restraining order. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006) Authority to Compromise Speaking through Justice Reynato C. Puno, the Court held that pursuant to Section 23, Rule 138 of the then 1964 Revised Rules of Court, a special authority is required before a lawyer may compromise his clients litigation; thus, the union has no authority to compromise the individual claims of members who did not consent to the settlement. The Court also stated that the authority to compromise cannot lightly be presumed and should be duly established by evidence, and that a compromise agreement is not valid when a party in the case has not signed the same or when someone signs for and in behalf of such party without authority to do so; consequently, the affected employees may still pursue their individual claims against their employer. The Court went on to state that a judgment approving a compromise agreement cannot have the effect of res judicata upon non-signatories since the requirement of identity of parties is not satisfied. A judgment upon a compromise agreement has all the force and effect of any other judgment, and, conclusive only upon parties thereto and their privies, hence, not binding on third persons who are not parties to it. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006)
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National Labor Relations Commission Confidentiality of Conciliation Proceeding The annual salary increases of P900.00 for the 1st year, P1,000.00 and P1,100.00 for the 2nd and 3rd years, respectively, which, given the proven continued losses of the Company, are hereby modified to minimize and mitigate its operational losses to: P900.00 annual increase for the initial 3-year term of the CBA, effective upon execution of a new CBA. In this regard, the Court cannot sanction the award made by the public respondent Secretary based ostensibly on the revelation of NCMB Administrator Olalia that was sourced from the confidential position given him by the Company. The reason for this is simple. Article 233 of the Labor Code prohibits the use in evidence of confidential information given during conciliation proceedings. NCMB Administrator Olalia clearly breached this provision of law. Moreover, as correctly pointed out by the Company, this confidential information given to Administrator Olalia was made prior to the Unions slowdown and defiance of the Assumption Order of August 22, 2001 causing it additional losses.(Nissan Motors Philippines, Inc., vs. Secretary of Labor and Employment,G.R. Nos. 158190-91, June 21, 2006) Constructive Dismissal Constructive dismissal exist when an act of clear discrimination, insensibility or disdain on the part of the employer has become so unbearable as to leave an employee with no choice but to forego continued employment. On the other hand, abandonment, as a just and valid cause for termination, requires a deliberate and unjustified refusal of an employee to resume his work, coupled with a clear absence of any intention of returning to his or her work. Abandonment is incompatible with constructive dismissal.(Veterans Security Agency Inc. and Jesus R. Vargas vs. Felipe Gonzalvo, jr.,G.R. No. 159293,December 16, 2005) There may also be constructive dismissal if an act of clear insensibility or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment. This was what happened to Samaniego. Thus, he is entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time his compensation was withheld from him up to the time of his actual reinstatement.(Westmont Pharmaceuticals, Inc. vs. Ricardo C. Samaniego,G.R. Nos. 146653-54, Ricardo C. Samaniego vs. Westmont Pharmaceuticals and United Laboratories, Inc.,G.R. Nos. 147407-08,February 20, 2006 What is more, Decorions suspension persisted beyond the 30-day period allowed by the Implementing Rules. In Premiere Development Bank v. NLRC,private respondents suspension lasted for more than 30 days counted from the time she was placed on preventive suspension on March 13, 1986 up to the last day of investigation on April 23, 1986. The Court ruled that preventive suspension which lasts beyond the maximum period allowed by the Implementing Rules amounts to constructive dismissal. xxx Decorions employment may not have been actually terminated in the sense that he was not served walking papers but there is no doubt that he was constructively dismissed as
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National Labor Relations Commission he was forced to quit because continued employment was rendered impossible, unreasonable or unlikely.(Maricalum Mining Corporation Vs. Antonio Decorion, April 12, 2006) Although there is no reduction of the salary of petitioner, constructive dismissal is still present because continued employment of petitioner is rendered, at the very least, unreasonable.There is an act of clear discrimination, insensibility or disdain by the employer that continued employment may become so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment.(Arsenio T. Mendiola vs CA, G.R. No. 159333,July 31, 2006) Indeed, the combined circumstances of the immediate transfer of respondents to far-off provinces after their refusal to sign the signature sheet of the document for the ratification of the Addendum to the Collective Bargaining Agreement of 1995, and petitioners emphasis on respondents alleged previous infractions at work, point to the fact that the transfers are motivated by ill-will on the part of petitioner. Petitioners order for respondents to report for work in petitioners provincial branches on the very same day that they were served with the Memo of Transfer is extremely unreasonable as the relocation would unduly inconvenience not only respondents but their respective families. Petitioner, therefore, failed to sufficiently prove that respondents transfer is for a just and valid cause and not unreasonable, inconvenient, or prejudicial to the employee, making it liable for constructive dismissal. (Star Paper Corporation vs Carlito Espiritu, et al.,G.R. NO. 154006,November 2, 2006) Contract of Employment In Coyoca v. NLRC which involves a claim for separation pay, this Court held: Furthermore, petitioners contract did not provide for separation benefits. In this connection, it is important to note that neither does POEA standard employment contract for Filipino seamen provide for such benefits. As a Filipino seaman, petitioner is governed by the Rules and Regulations Governing Overseas Employment and the said Rules do not provide for separation or termination pay. x x x Hence, in the absence of any provision in his Contract governing the payment of 13 month pay, Tanchico is not entitled to the benefit.(Petroleum Shipping Ltd. vs. NLRC,G.R. No. 148130,June 16, 2006)
th
Two criteria validate a contract of employment with a fixed period: (1) the fixed period of employment was knowingly and voluntarily agreed upon by the parties without any force, duress or improper pressure being brought to bear on the employee and without any circumstances vitiating consent or, (2) it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. Against these criteria, petitioners contracts of employment with a fixed period were valid.(Bernardino Labayog et. al vs. M.Y. San Biscuits, Inc. and Mew Wah Lim,G.R. No. 148102,July 11, 2006)
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National Labor Relations Commission Alteration of Employment Contract R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the Department of Labor and Employment (DOLE) from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the DOLE. Thus, we held in Chavez v. Bonto-Perez that the subsequently executed side agreement of an overseas contract worker with her foreign employer which reduced her salary below the amount approved by the POEA is void because it is against our existing laws, morals and public policy. The said side agreement cannot supersede her standard employment contract approved by the POEA. (Placewell International Services Corp.vs. Ireneo B. CAMOTE G.R. NO. 169973 - JUNE 26, 2006 Contract Stipulations It must be stressed that the parties are free to enter into any contract stipulation provided it is not illegal or contrary to public morals. When such agreement freely and voluntarily entered into turns out to be advantageous to a party, the courts cannot rescue the other party without violating the constitutional right to contract. Courts are not authorized to extricate the parties from the consequences of their acts. Thus, the fact that the contract stipulations of the parties may turn out to be financially disadvantageous to them will not relieve them of their obligation under the agreement. .(IBC 13 vs NOEMI B. AMARILLA, G.R. No. 162775,October 27, 2006) Cooperatives In any event, Article 119 of the Cooperative Code itself expressly embodies the legislative intention to extend the coverage of labor statutes to cooperatives, to wit: Art. 119. Compliance with Other Laws. (1) The Labor Code and all other labor laws shall apply to all cooperatives. For this reason, petitioners must comply with the requirement set forth in Article 223 of the Labor Code in order to perfect their appeal to the NLRC. It must be pointed out that the right to appeal is not a constitutional, natural or inherent right. It is a privilege of statutory origin and, therefore, available only if granted or provided by statute. The law may validly provide limitations or qualifications thereto or relief to the prevailing party in the event an appeal is interposed by the losing party. (Balagtas Multi-Purpose Cooperative, Inc. vs Court of Appeals, G.R. No. 159268,October 27, 2006) Damages When the dismissal is not motivated by bad faith, or where the petitioners-officers have not acted in wanton, oppressive or malevolent manner, there can be no judgment against them for moral or exemplary damages. In the same vein, the individual petitioners may not be held solidarily liable with the petitioner corporation, since there is no showing that petitioners Odango and Ymbong had a direct hand in the dismissal of the private
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National Labor Relations Commission respondents,enough to attribute to them (petitioners) a patently unlawful act while acting for the corporation. (Amadeo Fishing Corporation and/or Eduardo Amadeo, Gerry Odango (General Manager), and Anita Ymbong (Personnel Manager) vs. Romeo Nierra, et. al., G.R. No. 163099, October 4, 2005) Finally, the Court cannot sustain the award of moral and exemplary damages in favor of respondent. Moral and exemplary damages cannot be justified solely upon the premise that the employer dismissed his employee without cause or due process. The termination must be attended with 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 therefrom. Similarly, exemplary damages are recoverable only when the dismissal was effected in a wanton, oppressive or malevolent manner. To merit the award of these damages, additional facts must be pleaded and proved. In the present case, respondent did not proffer substantial evidence that would overcome the legal presumption of good faith on the part of petitioner. The award of moral and exemplary damages should therefore be deleted.(San Miguel Corporation vs. Caroline C. Del Rosario,G.R. Nos. 168194 & 168603,December 13, 2005) For attorneys fees, moral and exemplary damages to be granted, the plaintiff must prove that the facts of his case fall within the enumerated instances in the Civil Code. Thus, moral damages may only be recovered where the dismissal or suspension of the employee was attended by bad faith or fraud, or constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs or public policy. In other words, the act must be a conscious and intentional design to do a wrongful act for a dishonest purpose or some moral obliquity. Exemplary damages, on the other hand, may only be awarded where the act of dismissal was effected in a wanton, oppressive or malevolent manner. In this case, the NLRC ruled that there was insufficient evidence to prove the foregoing elements, and the Court of Appeals sustained the NLRCs decision. These rulings were made despite the NLRCs conclusion that undue discrimination was committed by the respondents in dismissing the petitioner. In view of these findings, and given that the contemptible manner that the petitioner was treated is extant from the records, we rule that the NLRC and Court of Appeals erred in disallowing the award of attorneys fees, and moral and exemplary damages in favor of the petitioner.(Gloria Jean R. Chaves vs. NLRC, G.R. No. 166382 , June 27, 2006) A dismissed employee is entitled to moral damages when the dismissal is attended by bad faith or fraud or constitutes an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public policy. Exemplary damages may be awarded if the dismissal is effected in a wanton, oppressive or malevolent manner. It appears from the facts that petitioner was deliberately dismissed from the service by reason of his active involvement in the activities of the union groups of both the rank and file and the supervisory employees of PCSO, which unions he himself organized and headed. Respondent PCSO first charged petitioner before the Civil Service Commission for alleged neglect of duty and conduct prejudicial to the service because of his union activities. The Civil Service Commission recommended the dismissal of petitioner.
46
National Labor Relations Commission Respondent PCSO immediately served on petitioner a letter of dismissal even before the latter could move for a reconsideration of the decision of the Civil Service Commission. Respondent PCSO may not impute to the Civil Service Commission the responsibility for petitioners illegal dismissal as it was respondent PCSO that first filed the administrative charge against him. As found by the CIR, petitioners dismissal constituted unfair labor practice. It was done to interfere with, restrain or coerce employees in the exercise of their right to self-organization.(Geronimo Q. Quadra vs. The Court of Appeals and the Philippine Charity Sweepstakes Office, G.R. No. 147593, July 31, 2006) Lastly, it is right that petitioner be awarded moral and exemplary damages and attorneys fees. Article 2220 of the Civil Code provides: Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. (Robert B. Cabuyoc vs Inter-Orient Navigation Shipmanagement, Inc. , G.R. No. 166649,November 24, 2006) In addition, petitioner is hereby suffered to indemnify private respondent the amount of P50,000.00 as nominal damages for its bad faith in juggling the latter from one labor contractor to another and causing him unnecessary injury and inconvenience, and for denying him his proprietary right to regular employment. (United Field Sea Watchman and Checkers Agency, vs Willie Requillo,G.R. No. 143527,December 6, 2006) In the determination of the amount of nominal damages which is addressed to the sound discretion of the court, several factors are taken into account: (1) the authorized cause invoked, whether it was a retrenchment or a closure or cessation of operation of the establishment due to serious business losses or financial reverses or otherwise; (2) the number of employees to be awarded; (3) the capacity of the employers to satisfy the awards, taken into account their prevailing financial status as borne by the records; (4) the employers grant of other termination benefits in favor of the employees; and (5) whether there was a bona fide attempt to comply with the notice requirements as opposed to giving no notice at all.(Industrial Timber Corporation, Industrial Plywood Group Corporation vs. The Honorable Court of Appeals,G.R. No. 164965,March 30, 2006) Decision/Judgment Distinction between Xerox Copies and True Copies The problem presented is not novel. In fact, it is a fairly recurrent one in petitions for certiorari of NLRC decisions as it seems to be the practice of the NLRC to issue certified xerox copies only instead of certified true copies. We have, however, put an end to this issue in Quintano v. NLRC when we declared that there is no substantial distinction between a photocopy or a Xerox copy and a true copy for as long as the photocopy is certified by the proper officer of the court, tribunal, agency or office involved or his duly-authorized representative and that the same is a faithful reproduction of the original. We held therein:
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National Labor Relations Commission The submission of the duplicate original or certified true copy of judgment, order, resolution or ruling subject of a petition for certiorari is essential to determine whether the court, body or tribunal, which rendered the same, indeed, committed grave abuse of discretion. The provision states that either a legible duplicate original or certified true copy thereof shall be submitted. If what is submitted is a copy, then it is required that the same is certified by the proper officer of the court, tribunal, agency or office involved or his dulyauthorized representative. The purpose for this requirement is not difficult to see. It is to assure that such copy is a faithful reproduction of the judgment, order, resolution or ruling subject of the petition. xxxx Indeed, for all intents and purposes, a certified Xerox copy is no different from a certified true copy of the original document. The operative word in the term certified true copy under Section 3, Rule 46 of the Rules of Court is certified. The word means made certain. It comes from the Latin word certificare meaning, to make certain. Thus, as long as the copy of the assailed judgment, order, resolution or ruling submitted to the court has been certified by the proper officer of the court, tribunal, agency or office involved or his duly-authorized representative and that the same is a faithful reproduction thereof, then the requirement of the law has been complied with. It is presumed that, before making the certification, the authorized representative had compared the Xerox copy with the original and found the same a faithful reproduction thereof. (Coca Cola Bottlers Phils., Inc., vs. Rodolfo Cabalo, et.al.,G.R. No. 144180,January 30, 2006) Conclusiveness of Decision Findings of fact of administrative agencies such as the NLRC are binding when supported by substantial evidence; moreover, they become conclusive when such findings are affirmed by an appellate court. Therefore, the findings of the NLRC, sustained by the Court of Appeals, that the illness of the complainant was discovered only on 20 May 1994, is conclusive to this Court. It was only on 20 May 1994, after undergoing complete physical and laboratory examinations, that John Melchor was diagnosed to have hypertension and chronic renal failure and was declared unfit to work due to total permanent disability. John Melchor was not yet considered incapacitated for work when he was repatriated on 5 October 1993. Consequently, the 31 March 1994 amendment should apply to John Melchors claim.(Philippine Transmarine Carriers, Inc. Vs. John Melchor A. Laurente,G.R. No. 158883. April 19, 2006) Finality of Judgment Ordinarily, once a judgment has become final and executory, it can no longer be disturbed, altered or modified. However, this rule admits of exceptions in cases of special and exceptional nature as we held in Industrial Timber Corporation v. National Labor Relations Commission: It is true that after a judgment has become final and executory, it can no longer be modified or otherwise disturbed. However, this principle admits of exceptions, as where facts and circumstances transpire which render its execution impossible or unjust and it therefore becomes necessary, in the interest of justice, to direct its modification in order
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National Labor Relations Commission to harmonize the disposition with the prevailing circumstances. (Industial Timber Corp. vs. VIRGILIO ABABON et al. G.R. No. 164518, G.R. No. 164965,January 25, 2006) Once a judgment attains finality it becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land. (Rommel B. Bearneza vs Naitonal Labor Relations Commission,G.R. No. 146930, September 11, 2006 Delay More importantly, well-settled is the rule that hearings and resolutions of labor disputes are not governed by the strict and technical rules of evidence and procedure observed in the regular courts of law. Technical rules of procedure are not applicable in labor cases, but may apply only by analogy or in a suppletory character, for instance, when there is a need to attain substantial justice and an expeditious, practical and convenient solution to a labor problem.[42] In view of the nature of the matters requested for admission by the petitioners, their request for admission would have only served to delay the proceedings. (Sime Darby Employees Association vs. NLRC, G.R. No. 148021,December 6, 2006) Desertion Hence, for a seaman to be considered as guilty of desertion, it is essential that there be evidence to prove that if he leaves the ship or vessel in which he had engaged to perform a voyage, he has the clear intention of abandoning his duty and of not returning to the ship or vessel. In the present case, however, petitioners failed to present clear and convincing proof to show that when private respondent jumped ship, he no longer had the intention of returning. The fact alone that he jumped off the ship where he was stationed, swam to shore and sought medical assistance for the injury he sustained is not a sufficient basis for petitioners to conclude that he had the intention of deserting his post. Settled is the rule that in termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause. The case of the employer must stand or fall on its own merits and not on the weakness of the employees defense. In the present case, since petitioners failed to discharge their burden of proving that private respondent is guilty of desertion, the Court finds no reason to depart from the conclusion of the Labor Arbiter, NLRC and the CA that private respondents dismissal is illegal. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC,G.R. No. 153031,December 14, 2006) Determination of Employer-Employee Relationship Finally, Article 279 of the Labor Code, provides that a regular employee who is unjustly dismissed from work is entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. If reinstatement is no longer
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National Labor Relations Commission feasible, separation pay equivalent to one month salary for every year of service should be awarded as an alternative. This has been our consistent ruling in the award of separation pay to illegally dismissed employees in lieu of reinstatement.(Big AA Manufacturer vs. Eutiquio Antonio, Jay Antonio, Felicisimo Antonio, and Leonardo Antonio SR,G.R. No. 160854,March 3, 2006 ) The juridical relationship of employer-employee between petitioner and respondent was not negated by the foregoing stipulation in the Kasunduan, considering that petitioner retained control of respondents conduct as driver of the vehicle. As correctly ruled by the CA: The exercise of control by private respondent over petitioners conduct in operating the jeepney he was driving is inconsistent with private respondents claim that he is, or was, not engaged in the transportation business; that, even if petitioner was allowed to let some other person drive the unit, it was not shown that he did so; that the existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means and method of the work; that the amount earned in excess of the boundary hulog is equivalent to wages; and that the fact that the power of dismissal was not mentioned in the Kasunduan did not mean that private respondent never exercised such power, or could not exercise such power.(Oscar Villamaria, Jr. vs. Court of Appeals,G.R. No. 165881,April 19, 2006) To determine the existence of an employer-employee relationship, the Court has to resolve who has the power to select the employees, who pays for their wages, who has the power to dismiss them, and who exercises control in the methods and the results by which the work is accomplished. The most important element of an employer-employee relationship is the control test. Under the control test, there is an employer-employee relationship when the person for whom the services are performed reserves the right to control not only the end achieved but also the manner and means used to achieve that end. In this case, DIGITEL undoubtedly has the power of control. However, DIGITELs exercise of the power of control necessarily flows from the exercise of its responsibilities under the management contract which includes providing for personnel, consultancy and technical expertise in the management, administration, and operation of the telephone system. Thus, the control test has no application in this case.(Emelita Leonardo, et. al. vs. Court of Appeals,G.R. No. 152459 ,June 15, 2006) The power of control refers merely to the existence of the power, and not to the actual exercise thereof. The principal consideration is whether the employer has the right to control the manner of doing the work, and it is not the actual exercise of the right by interfering with the work, but the right to control, which constitutes the test of the existence of an employer-employee relationship. In the case at bar, private respondent Pacfor, as employer, clearly possesses such right of control. Petitioner, as private respondent Pacfors resident agent in the Philippines, is, exactly so, only an agent of the corporation, a representative of Pacfor, who transacts business, and accepts service on its behalf. (Arsenio T. Mendiola vs Court of Appeals G.R No. 159333,July 31, 2006) TWO-TIERED TEST
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National Labor Relations Commission However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. There are instances when, aside from the employers power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true nature of the relationship between the parties. This is especially appropriate in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexity of the relationship based on the various positions and responsibilities given to the worker over the period of the latters employment. 1. Economic Dependence Test Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. The proper standard of economic dependence is whether the worker is dependent on the alleged employer for his continued employment in that line of business.[24] In the United States, the touchstone of economic reality in analyzing possible employment relationships for purposes of the Federal Labor Standards Act is dependency.[25] By analogy, the benchmark of economic reality in analyzing possible employment relationships for purposes of the Labor Code ought to be the economic dependence of the worker on his employer. 2. Control Test By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because she was under the direct control and supervision of Seiji Kamura, the corporations Technical Consultant. She reported for work regularly and
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National Labor Relations Commission served in various capacities as Accountant, Liaison Officer, Technical Consultant, Acting Manager and Corporate Secretary, with substantially the same job functions, that is, rendering accounting and tax services to the company and performing functions necessary and desirable for the proper operation of the corporation such as securing business permits and other licenses over an indefinite period of engagement. Under the broader economic reality test, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check vouchers indicating her salaries/wages, benefits, 13th month pay, bonuses and allowances, as well as deductions and Social Security contributions from August 1, 1999 to December 18, 2000.[26] When petitioner was designated General Manager, respondent corporation made a report to the SSS signed by Irene Ballesteros. Petitioners membership in the SSS as manifested by a copy of the SSS specimen signature card which was signed by the President of Kasei Corporation and the inclusion of her name in the on-line inquiry system of the SSS evinces the existence of an employer-employee relationship between petitioner and respondent corporation.(Angelina Francisco VS. NLRC,G.R. No. 170087, August 31, 2006) In the case at bar, the petitioner itself admits in its position paper[33] that respondent worked at the company premises and her duty was to cook and prepare its employees lunch and merienda. Clearly, the situs, as well as the nature of respondents work as a cook, who caters not only to the needs of Mr. Tan and his family but also to that of the petitioners employees, makes her fall squarely within the definition of a regular employee under the doctrine enunciated in the Apex Mining case. That she works within company premises, and that she does not cater exclusively to the personal comfort of Mr. Tan and his family, is reflective of the existence of the petitioners right of control over her functions, which is the primary indicator of the existence of an employer-employee relationship. (Remington Industrial Sales Corporation, vs Erlinda Castaneda, G.R. Nos. 169295-96, November 20, 2006) Supervision and control The juridical relationship of employer-employee between petitioner and respondent was not negated by the foregoing stipulation in the Kasunduan, considering that petitioner retained control of respondents conduct as driver of the vehicle. As correctly ruled by the CA: The exercise of control by private respondent over petitioners conduct in operating the jeepney he was driving is inconsistent with private respondents claim that he is, or was, not engaged in the transportation business; that, even if petitioner was allowed to let some other person drive the unit, it was not shown that he did so; that the existence of an employment relation is not dependent on how the worker is paid but on the presence or absence of control over the means and method of the work; that the amount earned in excess of the boundary hulog is equivalent to wages; and that the fact that the power of dismissal was not mentioned in the Kasunduan did not mean that private respondent never exercised such power, or could not exercise such power.(Oscar Villamara vs. Court of Appeeals,G.R. No. 165881,April 19, 2006)
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National Labor Relations Commission
Determining the existence of employer-employee relationship between employer, contractor or subcontractor, and the contractors or subcontractors employee. The first two paragraphs of Art. 106 set the general rule that a principal is permitted by law to engage the services of a contractor for the performance of a particular job, but the principal, nevertheless, becomes solidarily liable with the contractor for the wages of the contractors employees. The third paragraph of Art. 106, however, empowers the Secretary of Labor to make distinctions between permissible job contracting and laboronly contracting, which is a prohibited act further defined under the last paragraph. A finding that a contractor is a labor-only contractor is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor, and the labor-only contractor is considered as a mere agent of the principal, the real employer. Section 7 of the Rules Implementing Articles 106 to 109 of the Labor Code, as amended, reiterates the rules in determining the existence of employer-employee relationship between employer, contractor or subcontractor, and the contractors or subcontractors employee. Section 7. Existence of an employer-employee relationship. The contractor or subcontractor shall be considered the employer of the contractual employee for purposes of enforcing the provisions of the Labor Code and other social legislation. The principal, however, shall be solidarily liable with the contractor in the event of any violation of any provision of the Labor Code, including the failure to pay wages. The principal shall be deemed the employer of the contractual employee in any of the following cases, as declared by a competent authority: a. where there is a labor-only contracting; or
b. where the contracting arrangement falls within the prohibitions provided in Section 6 (Prohibitions) hereof. (Aboitiz Haulers, Inc., vs Monaorai Dimapatoi, et. el, G. R. No. 148619, September 19, 2006) Diminution of pay
A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. In Globe Telecom, Inc. v. Florendo-Flores, we ruled that where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for her employer. Hence, her severance from the company was not of her own making and therefore amounted to an illegal termination of
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National Labor Relations Commission employment.(Angelina Francisco, vs. National Labor Relations Commission, G.R. No. 170087, August 31, 2006)
Disability
Disability" is not synonymous with "sickness" or illness "Disability" is generally defined as "loss or impairment of a physical or mental function resulting from injury or sickness." Clearly, "disability" is not synonymous with "sickness" or "illness," the former being a potential effect of the latter. The schedule in Sec. 30 of the POEA SEC is a Schedule of Disability or Impediment for Injuries Suffered and Diseases or Illness Contracted. It is not a list of compensable sicknesses. Unlike the 2000 POEA SEC. nowhere in the 1996 POEA SEC is there a list of "Occupational Diseases." (Bernardo Remigio vs. NLRC, April 12, 2006) Permanent disability is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. As gleaned from the records, respondent was unable to work from August 18, 1998 to February 22, 1999, at the least, or more than 120 days, due to his medical treatment. This clearly shows that his disability was permanent. Petitioners tried to contest the above findings by showing that respondent was able to work again as a chief mate in March 2001. Nonetheless, this information does not alter the fact that as a result of his illness, respondent was unable to work as a chief mate for almost three years. It is of no consequence that respondent was cured after a couple of years. The law does not require that the illness should be incurable. What is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability. An award of a total and permanent disability benefit would be germane to the purpose of the benefit, which is to help the employee in making ends meet at the time when he is unable to work. .( Crystal Shipping Inc., and/or A/S Stein Line Bergen vs. Deo P. Natividad, G.R. No. 154798, October 20, 2005) Indications that Tanchico was suffering from ischemia were detected on 8 December 1992 during Tanchicos vacation period. Thus, petitioners paid him disability benefits for 18 days in accordance with the Contract. Tanchico cannot claim that he only acquired the illness during his last deployment since the Medical Report he submitted to the NLRC showed that he has been hypertensive since 1983 and diabetic since 1987. In the absence of concrete proof that Tanchico acquired his disability during his last deployment and not during his vacation, he is only entitled to disability benefits for 18 days.(Petroleum Shipping Limited vs. National Labor Relations Commission,G.R. No.
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National Labor Relations Commission 148130,June 16, 2006)
Procedure to claim disability benefits 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 latters employment. There is no provision requiring accreditation by the POEA of such physician. In 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. If accreditation of the company-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 Insurance System must be accredited by the Employees Compensation Commission. It 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 Employment Contract the only qualification prescribed for the physician entrusted with the task of assessing the seamans disability is that he be company-designated. When the language of the contract is explicit, as in the case at bar, leaving no doubt as to the intention of the drafters thereof, the courts may not read into it any other intention that would contradict its plain import. (Lourdes D. Rivera vs Wallem Maritime Services, Inc., and Wallem Ship Management, LTD.,G.R. No. 160315 November 11, 2005) Permanent Total Disability Thus, the Court has applied the Labor Code concept of permanent total disability to the case of seafarers. In Philippine Transmarine Carriers v. NLRC, seaman Carlos Nietes was found to be suffering from congestive heart failure and cardiomyopathy and was declared as unfit to work by the company-accredited physician. The Court affirmed the award of disability benefits to the seaman, citing ECC v. Sanico GSIS v. CA, and Bejerano v. ECC that "disability should not be understood more on its medical significance but on the loss of earning capacity. Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that [he] was trained for or accustomed to perform, or any kind of work which a person of [his] mentality and attainment could do. It does not mean absolute helplessness." It likewise cited Bejerano v. ECC, that in a disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity. (Bernardo Remigio vs. NLRC,April 12, 2006)
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National Labor Relations Commission That respondent was found to be fit to return to work by Clinica Manila (where he underwent regular cardiac rehabilitation program and physical therapy from January 15 to May 28, 1998 under UPLs account) on September 22, 1998 or a few months after his rehabilitation does not matter. Crystal Shipping Inc., v. Natividad teaches: Petitioners tried to contest the above findings by showing that respondent was able to work again as a chief mate in March 2001. Nonetheless, this information does not alter the fact that as a result of his illness, respondent was unable to work as a chief mate for almost three years. It is of no consequence that respondent was cured after a couple of years. The law does not require that the illness should be incurable. What is important is that he was unable to perform his customary work for more than 120 days which constitutes permanent total disability. An award of a total and permanent disability benefit would be germane to the purpose of the benefit, which is to help the employee in making ends meet at the time when he is unable to work. (Underscoring supplied)(United Philippine Lines INC. and/or Holland America Line, Inc., vs. Francisco D. Beseril G.R. No. 165934, April 12, 2006) Time and again, the Court has consistently ruled thatdisability should not be understood more on its medical significance but on the loss of earning capacity.[17] Permanent total disability means disablement of an employee to earn wages in the same kind of work, or work of similar nature that she was trained for or accustomed to perform, or any kind of work which a person of her mentality and attainment could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of ones earning capacity. (Robert B. Cabuyoc vs Inter-Orient Navigation Shipmanagement, Inc. , G.R. No. 166649,November 24, 2006) Test of determining permanent total disability In Vicente v. ECC: x x x the test of whether or not an employee suffers from permanent total disability is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from permanent total disability regardless of whether or not he loses the use of any part of his body. (Bernardo Remigio vs. NLRC,April 12, 2006) Total disability is considered permanent if it lasts continuously for more than 120 days A total disability does not require that the employee be absolutely disabled, or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue her usual work and earn therefrom. On the other hand, a total disability is
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National Labor Relations Commission considered permanent if it lasts continuously for more than 120 days. Thus, in the very recent case of Crystal Shipping, Inc. v. Natividad, we held: Permanent disability is inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. x x x Total disability, on the other hand, means the disablement of an employee to earn wages in the same kind of work of similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could do. It does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather it is the incapacity to work resulting in the impairment of one's earning capacity.(Bernardo Remigio vs. NLRC,April 12, 2006) Disability Benefits for Seafarers Petitioner is asking for permanent disability benefits, sickwage allowance, and reimbursement for medical expenses under the Standard Employment Contract Governing the Employment of Filipino Seamen on Board Ocean-Going Vessels approved by the POEA on July 14, 1989 which provides, viz: 4. The liabilities of the employer when the seaman suffers injury or illness during the term of his contract are as follows: a. The employer shall continue to pay the seaman his basic wages during the time he is on board the vessel; b. If the injury or illness requires medical and/or dental treatment in a foreign port, the employer shall be liable for the full cost of such medical, dental, surgical and hospital treatment as well as board and lodging until the seaman is declared fit to work or to be repatriated. However, if after repatriation the seaman still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of his disability has been established by the companydesignated physician. c. The employer shall pay the seaman his basic wages from the time he leaves the vessel for medical treatment. After discharge from the vessel the seaman is entitled to one hundred percent (100%) of his basic wages until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seaman shall submit himself to a post-employment medical examination by the companydesignated physician within three working days upon his return except when he is physically incapacitated to do so, in which case a written notice to the agency within the same period is deemed as compliance. Failure of the seaman to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. x x x
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National Labor Relations Commission In case of permanent total or partial disability of the seaman during the term of employment caused by either injury or illness, the seaman shall be compensated in accordance with the schedule of benefits enumerated in Appendix 1 of his Contract. Computation of his benefits arising from an illness or disease shall be governed by the rates and the rules of compensation applicable at the time the illness or disease was contracted. (emphasis ours)(BartolomeC Pelayo vs. Aarema Shipping & Trading Co., Inc., Maritima Fullman, S.L., and Philippine Transmarine Carriers, Inc.,G.R. No. 155741,March 31, 2006) The above findings of the NLRC are in recognition of the emotional turmoil that petitioner experienced in the hands of the less compassionate German officers. This Court has ruled that schizophrenia is compensable. In NFD International Manning Agents, Inc. v. NLRC,[14] the Court went further by saying: Strict rules of evidence, its must be remembered, are not applicable in claims for compensation and disability benefits. Private respondent having substantially established the causative circumstances leading to his permanent total disablility to have transpired during his employment, we find the NLRC to have acted in the exercise of its sound discretion in awarding permanent total disability benefits to private respondent. Probability and not the ultimate degree of certainty is the test of proof in compensation proceedings. (Robert B. Cabuyoc vs Inter-Orient Navigation Shipmanagement, Inc. , G.R. No. 166649,November 24, 2006) The applicable provision in the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessel is not Section 20(A) on compensation and benefits for death, but Section 20(B)3, to wit: B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS: 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician, but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. (Lourdes Rivera vs Wallem Maritime Services, Inc., and Wallem Shipmanagement, Ltd.,G.R. No. 160315 November 11, 2005) We agree with respondent. The POEA Standard Employment Contract for Seaman is designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-going vessels. Its provisions must, therefore, be construed and applied fairly, reasonably and liberally in their favor. Only then can its beneficent provisions be fully carried into effect.
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National Labor Relations Commission Section 20 B of the POEA Standard Employment Contract provides: B. Compensation and Benefits for Injury or Illness. The liabilities of the employer when the seaman suffers injury or illness during the term of his contract are as follows: xxx xxx
However, if after repatriation, the seafarer still requires medical attention arising from said injury or illness, he shall be so provided at cost to the employer until such time that he is declared fit to work or the degree of permanent disability has been assessed x x x. xxx xxx
5. In case of permanent, total, or partial disability of the seafarer during the term of employment caused by either injury or illness, the seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 30 of this contract x x x(Bergesen D.Y. Philippines, Inc. and/or Rolando C. Adorable M. Estenzo,G.R. No.141269,December 9, 2005) Death of a seaman even during the term of employment does not automatically give rise to compensation In fact, in Mabuhay Shipping Services, Inc. v. NLRC, the Court held that the death of a seaman even during the term of employment does not automatically give rise to compensation. The circumstances which led to the death as well as the provisions of the contract, and the right and obligation of the employer and the seaman must be taken into consideration, in consonance with the due process and equal protection clauses of the Constitution. (Lourdes Rivera vs Wallem Maritime Services, Inc., and Wallem Shipmanagement, Ltd., G.R. No. 160315 November 11, 2005) Dismissal/Termination from Employment Nevertheless, the validity of termination of services can exist independently of the procedural infirmity in the dismissal. In Agabon v. National Labor Relations Commission, [18] the Court deemed it best to revisit the doctrine in Serrano,[19] which was cited by petitioners, in relation to Wenphil Corp. v. National Labor Relations Commission. After analyzing the consequences of the divergent doctrines on employment termination, the Court held that in cases involving dismissals for cause, but without observance of statutory due process, the better rule is to abandon the Serrano doctrine and to follow Wenphil by declaring that the dismissal was for cause but imposing sanctions on the employer. By so doing, dispensing justice not just to employees but to employers as well is achieved. (Galaxie Steel Workers Union (GSWU-NAFLU-KMU), vs. NLRC,G.R. No. 165757,October 17, 2006) 1. Authorized Causes REDUNDANCY
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National Labor Relations Commission Redundancy is one of the authorized causes of dismissal, which, in the leading case of Wiltshire File Co., Inc. vs. NLRC, this Court had occasion to explain the nature of, in the following manner: x x x redundancy in an employers personnel force necessarily or even ordinarily refers to duplication of work. That no other person was holding the same position that private respondent held prior to the termination of his services, does not show that his position had not become redundant. Indeed, in any well organized business enterprise, it would be surprising to find duplication of work and two (2) or more people doing the work of one person. We believe that redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decrease in volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. (Emphasis supplied.) (Becton Dickinson Phils. Inc. and Wilfredo Joaquin vs. NLRC, et. al.,G.R. Nos. 159969 & 160116, November 15, 2005) Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. In Asufrin, Jr. v. San Miguel Corporation, it was held that the determination that the employees services are no longer necessary or sustainable and, therefore, properly terminable 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. In other words, it is not enough for a company to merely declare that it has become overmanned. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees.(San Miguel Corporation vs. Caroline C. Del Rosario,G.R. Nos. 168194 & 168603,December 13, 2005) Thus, we have held that the employer must comply with the following requisites to ensure the validity of the redundancy program: 1) a written notice served on both the employees and the Department of Labor and Employment (DOLE) at least one month prior to the intended date of retrenchment; 2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; 3) good faith in abolishing the redundant positions; and 4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. As mentioned earlier, respondent does not question the soundness of the redundancy program implemented by DAP, but the lack of notice required by law.(DAP Corporation, Felix Pineda, President, and Densil Pineda, General Manager, vs. CA and Maureen Marcial, G.R. No. 165811,December 14, 2005)
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National Labor Relations Commission Retrenchment Article 283 of the Labor Code of the Philippines authorizes retrenchment as one of the valid causes to dismiss employees as a measure to avoid or minimize business losses. Retrenchment is the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is a reduction in manpower, a measure utilized by an employer to minimize losses incurred in the operation of its business. It is a management prerogative consistently recognized and affirmed by this Court. In Danzas Intercontinental, Inc. v. Daguman, we enumerated the requirements for a valid retrenchment which the employer must prove by clear and convincing evidence.(Ronaldo B. Casimiro et. al vs. STERN REAL ESTATE INC. REMBRANDT HOTEL, G.R. No. 162233,March 10, 2006) Requisites of Retrenchment In Trendline Employees Association-Southern Philippines Federation of Labor v. NLRC,5 we enumerated the requisites of retrenchment, thus: To be valid, three requisites must concur, as provided in Article 283 of the Labor Code, as amended, namely: (1) The retrenchment is necessary to prevent losses and the same is proven; (2) Written notice to the employees and to the DOLE at least one month prior to the intended date thereof; and (3) Payment of separation pay equivalent to one month pay or at least month pay for every year of service, whichever is higher. We observe that the Court of Appeals, in finding that petitioners suffered from financial losses and justifying the separation of respondent from the service, relied on the audited reports prepared by Sycip Gorres Velayo & Co. Such reliance is in order. In Dela Salle University v. Dela Salle University Employees Association,7 we held: x x x. We believe that the standard proof of a companys financial standing is its financial statements duly audited by independent and credible external auditors. Financial statements audited by an independent external auditor, as in the case at bar, constitute the normal method of proof of profit and loss performance of a company. But respondent insists that actual, not probable losses, justify retrenchment. Article 283 (quoted earlier) entails, among others, only a situation where there is "retrenchment to prevent losses."8 The phrase "to prevent losses" means that retrenchment or termination from the service of some employees is authorized to be undertaken by the employer sometime before the losses anticipated are actually sustained or realized.9 This is the situation in the case at bar. Evidently, actual losses need not set in prior to retrenchment. We reiterate that the dismissal of respondent from the service is by reason of retrenchment, an authorized cause. But due process was not observed as the required
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National Labor Relations Commission notices were not sent to respondent and the DOLE one month prior to the effectivity of his termination. Thus, petitioners should be liable for violation of his right to due process and should pay him indemnity in the form of nominal damages, pursuant to our ruling in Agabon, which we fix at P20,000.00.11(TPI Philippines Cement Corp., vs. Benedicto A. Cajucom VII,G.R. No. 149138,February 28, 2006) Cessation of Operation of Business Establishment A reading of the foregoing law shows that a partial or total closure or cessation of operations of establishment or undertaking may either be due to serious business losses or financial reverses or otherwise. Under the first kind, the employer must sufficiently and convincingly prove its allegation of substantial losses, while under the second kind, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations was 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. Just as no law forces anyone to go into business, no law can compel anybody to continue the same. It would be stretching the intent and spirit of the law if a court interferes with management's prerogative to close or cease its business operations just because the business is not suffering from any loss or because of the desire to provide the workers continued employment.(Industrial Timber Corporation et. al. vs. Virgilio Ababon et al. G.R. No. 164518,G.R. No. 164965,January 25, 2006) It would indeed be stretching the intent and spirit of the law if a court were to unjustly interfere in managements prerogative to close or cease its business operations just because said business operation or undertaking is not suffering from any loss. As long as the companys 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 law or a valid agreement, such exercise will be upheld. Clearly then, the right to close an establishment or undertaking may be justified on grounds other than business losses but it cannot be an unbridled prerogative to suit the whims of the employer. (Capitol Medical Center, Inc. and Dr. Thelma Navarette-Clemente, VS. Dr. Cesar E. Meris,G.R. No. 155098,September 16, 2005)
Effect of Closure or Cessation of Business Operation To reiterate, the forcible closure of the Bank by operation of law permanently severed the employer-employee relationship between it and its employees when it ceased operations from April 10, 1983 to August 3, 1992. Thus, the claim for reinstatement and payment of back wages and other benefits, having no leg to stand on, must necessarily fall. (Lady Lydia Cornista-Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) Force majeure In Shoppers Gain Supermarket v. National Labor Relations Commission, we held
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National Labor Relations Commission that the non-renewal of petitioner corporations lease contract and its consequent closure and cessation of operations may be considered an event beyond petitioners control, in the nature of a force majeure situation. As such, it amounts to an authorized cause for termination of the private respondents.( (Industrial Timber Corporation et. al. vs. Virgilio Ababon et al. G.R. No. 164518,G.R. No. 164965,January 25, 2006) Requisites for a valid cessation of business operations In sum, under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business operations: (a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the employees of termination pay amounting to one month pay or at least one-half month pay for every year of service, whichever is higher.( (Industrial Timber Corporation et. al. vs. Virgilio Ababon et al. G.R. No. 164518,G.R. No. 164965,January 25, 2006) Notice of Closure or Cessation of Business Finally, with regard to the notice requirement, the Labor Arbiter found, and it was upheld by the NLRC and the Court of Appeals, that the written notice of closure or cessation of Galaxies business operations was posted on the company bulletin board one month prior to its effectivity. The mere posting on the company bulletin board does not, however, meet the requirement under Article 283 of serving a written notice on the workers. The purpose of the written notice is to inform the employees of the specific date of termination or closure of business operations, and must be served upon them at least one month before the date of effectivity to give them sufficient time to make the necessary arrangements. In order to meet the foregoing purpose, service of the written notice must be made individually upon each and every employee of the company. (Galaxie Steel Workers Union (GSWU-NAFLU-KMU), vs. NLRC,G.R. No. 165757,October 17, 2006) 3. Just Causes The requisites of a valid dismissal for just causes are: (a) the dismissal must be for one of the causes stated in Article 282 of the Labor Code; and (b) the employee must have been accorded due process, basic of which is the opportunity to be heard and defend himself. Rodriguez, Jr. v. National Labor Relations Commission, G.R. No. 153947, December 5, 2002, 393 SCRA 511, 516, citing RDS Trucking v. National Labor Relations Commission, 294 SCRA 623 (1998)] Article 282 of the Labor Code, provides: ART. 282. Termination by employer. An employer may terminate an employment for any of the following causes: a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; b) Gross and habitual neglect by the employee of his duties; c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
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National Labor Relations Commission d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and Other causes analogous to the foregoing.(Asian Terminals Inc. and Rodolfo G. Corvite, Jr., vs Danilo Marbella, Ricardo Melendrez and Felomino Mangalus G.R. No. 149074,August 10, 2006) Abandonment For accusing respondents of abandonment, petitioner must present evidence (1) not only of respondents failure to report for work or absence without valid reason, but (2) also of respondents clear intention to sever employer-employee relations as manifested by some overt acts. The second element is the more determinative factor.(Big AA Manufacturer vs. Eutiquio Antonio, Jay Antonio, Felisicimo Antonio, and Leonardo Antonio, Sr.G.R. No. 160854,March 3, 2006 ) Abandonment, involves termination of an employee by the employer. The truth of the matter is that before respondent could dismiss petitioners on ground of abandonment, petitioners filed with the LA their complaint for illegal dismissal. In the present case, it must be stressed that there is no evidence showing that respondents were actually dismissed by petitioners, let alone, on ground of abandonment. Neither is there a showing that petitioners formally resigned from work. What is actually involved herein is the informal voluntary termination of employment by the petitioners employees. (Dna Abad et. al vs. Roselle Cinema, Silverscreen Corporation and Vermy Trinidad,G.R. No. 141371March 24, 2006) We would like to reiterate some salient points laid down in our prior pronouncements concerning abandonment of employment. Abandonment as a just ground for dismissal requires the deliberate, unjustified refusal of the employee to perform his employment responsibilities. Mere absence or failure to work, even after notice to return, is not tantamount to abandonment. The records are bereft of proof that petitioners even furnished respondent such notice. Furthermore, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment. An employee who takes steps to protest his dismissal cannot logically be said to have abandoned his work. The filing of such complaint is proof enough of his desire to return to work, thus negating any suggestion of abandonment.(GSP Manufacturing Corporation and Charo Apacible, vs Paulina Cabanban, G.R. No. 150454, July 14, 2006) Certainly not lost on the Court is the fact that the cited cases are not on all fours applicable, Filipro, St. Scholastica and Telefunken involving as they do the staging of actual strikes, resulting in work stoppage and complete abandonment of employment. There lies the difference. In this case, the element of abandonment of work does not obtain, the employees engaging in work slowdown having reported for work at their usual post. Abandonment means deliberate, unjustified refusal of the employee to resume employment. (Nissan Motors Philippines, INC., vs. Secretary of Labor and Employment, G.R. Nos. 158190-91, June 21, 2006)
e)
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National Labor Relations Commission The foregoing was further elucidated in Hodieng Concrete Products v. Emilia, where the Court held: The rule is that before abandonment can be considered a valid cause for dismissal, there must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. In Samarca v. Arc-Men Industries, Inc., we held: x x x. Absence must be accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to work anymore. And the burden of proof to show that there was unjustified refusal to go back to work rests on the employer. Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee relationship. Clearly, the operative act is still the employees ultimate act of putting an end to his employment.
1. Settled is the rule that mere absence or failure to report for work is not tantamount to abandonment of work. x x x. (Emphasis ours)(L.C. Ordoez Construction vs. Imelda Nicdao, Rodrigo Sicat and Romeo Bautista, G.R. No. 149669,July 27, 2006)
Petitioners allegation that respondents abandoned their work is therefore devoid of legal and factual bases. The Court has repeatedly held that abandonment as a just and valid ground for dismissal requires the deliberate and unjustified refusal of the employee to resume his employment. Mere absence of failure to report for work, after notice to return, is not enough to amount to such abandonment. For a valid finding of abandonment, two factors must be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second element as the more determinative factor being manifested by some overt acts. In abandonment, there must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. (Aboitiz Haulers, Inc., vs Monaorai Dimapatoi, et. el, G. R. No. 148619, September 19, 2006) We agree with the Court of Appeals that respondent cannot be dismissed for abandonment. To constitute a just and valid ground for dismissal, abandonment requires the deliberate and unjustified refusal of the employee to resume his employment. Two elements must be present, namely: (1) the failure to report for work or absence without
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National Labor Relations Commission valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship. The second element is more determinative of the intent and must be evinced by overt acts. Mere absence, not being sufficient, the burden of proof rests upon the employer to show that the employee clearly and deliberately intended to discontinue his employment without any intention of returning.(Ace Promotion & Marketing Corporation vs. Reynaldo Ursabia,G.R. No. 171703,September 22, 2006) On the first issue, we agree with petitioners contention that the appellate court committed a serious error and misapprehended the facts when it ruled that he abandoned his work instead of being illegally terminated by his employer. Abandonment, as a just and valid ground for dismissal, requires the deliberate, unjustified refusal of the employee to resume his employment. Mere absence or failure to report for work is not enough to amount to such abandonment. There must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. The contemplation to discontinue the employment must be shown by clear proof that it was deliberate and unjustified, a fact that herein private respondent failed to evince. (Paulino Aliten vs U-NEED Lumber & Hardware, and Court of Appeals,G.R. No. 168931,September 12, 2006) Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty; hence, a just cause for termination of employment by the employer under Article 282 of the Labor Code, which enumerates the just causes for termination by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employee has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. This, the petitioner failed to do in the case at bar. (Remington Industrial Sales Corporation, vs Erlinda Castaneda, G.R. Nos. 169295-96, November 20, 2006) Requisites of Abandonment Jurisprudence is replete with rulings that for abandonment of work to exist, it is essential that (1) the employee must have failed to report for work or must have been absent without valid and justifiable reason; and (2) there must have been an indisputable intention to sever the employer-employee relationship manifested by some overt acts, with the second element as the more determinative factor. (Paulino Aliten vs U-NEED Lumber & Hardware, and Court of Appeals,G.R. No. 168931,September 12, 2006) Petitioners filing of the complaint for illegal dismissal on May 27, 1992, or approximately two days after his return from his hometown, likewise negates the private respondents charge of abandonment. It is highly inconsistent for an employee to abandon his employment and thereafter file a complaint for illegal dismissal. Abandonment is not compatible with constructive dismissal. (Paulino Aliten vs U-NEED Lumber & Hardware, and Court of Appeals,G.R. No. 168931,September 12, 2006) Loss of Trust and Confidence
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National Labor Relations Commission Moreover, it would simply be temerarious for the Court to sanction the reinstatement of bank employees who have clearly engaged in anomalous banking practices. The particular fiduciary responsibilities reposed on banks and its employees cannot be emphasized enough. The fiduciary nature of banking is enshrined in Republic Act No. 8791 or the General Banking Law of 2000. Section 2 of the law specifically says that the State recognizes the fiduciary nature of banking that requires high standards of integrity and performance. The bank must not only exercise high standards of integrity and performance, it must also ensure that its employees do likewise because this is the only way to ensure that the bank will comply with its fiduciary duty. All given, we affirm the conclusion that petitioners were dismissed for just cause. Loss of trust and confidence is one of the just causes for termination by employer under Article 282 of the Labor Code. The breach of trust must be willful, meaning it must be done intentionally, knowingly, and purposely, without justifiable excuse. Ideally, loss of confidence applies only to cases involving employees occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employers money or property. Utmost trust and confidence are deemed to have been reposed on petitioners by virtue of the nature of their work. (Romeo C. Cadiz, Carlito Bongkingki and Prisco Gloria IV vs. Court of Appeals and Philippine Commercial International Bank (Now Equitable PCIBank) G. R. No. 153784, October 25, 2005) Time and again, we have recognized the right of employers to dismiss employees by reason of loss of trust and confidence. However, we emphasize that such ground is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be work-related such as would show the employee concerned to be unfit to continue working for the employer. More importantly, the loss of trust and confidence must be based on the willful breach of the trust reposed in the employee by his employer. A breach of trust is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. (Lakpue Drug Inc., et. al. vs. Ma. Lourdes Belga, G.R. No. 166379, October 20, 2005) Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt. The law requires only that there be at least some basis to justify it. Thus, there must be some evidence to substantiate the claim and form a legal basis for loss of confidence. The employer cannot exercise arbitrarily and without just cause the right to dismiss an employee for loss of trust and confidence. (Ramatek Philippines Inc. and Morris Weinberg vs. Ma. Anelia De Los Reyes, G.R. No. 139526, October 25, 2005)
Thus, loss of trust and confidence is a valid ground for dismissing an employee, provided that the loss of confidence arises from particular proven facts. Termination of
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National Labor Relations Commission employment on this ground does not require proof beyond reasonable doubt of the employee's misconduct. It is sufficient that there is some basis for the loss of trust or that the employer has reasonable ground to believe that the employee is responsible for the misconduct which renders him unworthy of the trust and confidence demanded by his position. It bears stressing that the petitioner is not an ordinary rank-and-file employee. He was a sales representative, reposed with managerial duties in overseeing the respondents business in his assigned area. As a managerial employee, the petitioner was tasked to perform key and sensitive functions, and thus bound by more exacting work ethics. He should have realized that such sensitive position required the full trust and confidence of his employer in every exercise of managerial discretion insofar as the conduct of the latters business is concerned. (Edgardo B. Alcazaren vs. Univet Agricultural Products Inc.G.R. No. 149628, November 22, 2005) There is also no dispute that private respondent is a supervisor or if not, a managerial employee, in whom petitioner has reposed trust and confidence. As such therefore, loss of trust and confidence is a valid basis for termination. In the case of supervisors or personnel occupying positions of responsibility, the Supreme Court has held that loss of trust and confidence justifies termination. This ground for terminating employment, springs from the voluntary or willful act of the employee or by reason of some blameworthy act or omission on the part of the employee. (Caoile vs. NLRC, 299 SCRA 71). Additionally, as regards managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal (supra). In the case at bench, private respondent has undoubtedly breached the trust of petitioner by requiring casual workers of petitioner, whose continued employment depended upon the authority of the former to work in remodeling his house. As if that was not enough, private respondent lent money at usurious interest thus aggravating the economic misery of the lowly paid casual workers. It ought to be pointed out that loss of confidence as ground for dismissal does not require proof beyond reasonable doubt of the employees misconduct. but it only requires substantial evidence. That requirement of substantial evidence was complied with in the case of private respondent, as evidenced by the letters of Armando Sunga, and Arnillo T. Nalog, and from the Minutes of the Formal Administrative Investigation conducted by the petitioner Annexes 2, 3, & 7, respectively, of the latters Position Paper submitted to the Labor Arbiter.(Silverio Picar vs. Shangri-La Hotel,G.R. No. 146367,December 14, 2005) Under Article 282 of the Labor Code, willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work and breach of the employers trust in the employee are grounds for terminating an employment. In Gustilo vs. Wyeth Philippines, Inc.,[5] we held:
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National Labor Relations Commission It is the employers prerogative to prescribe reasonable rules and regulations necessary or proper for the conduct of its business or concern, to provide certain disciplinary measures to implement said rules and to assure that the same be complied with. At the same time, it is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies rescission of the contract of service and the preemptory dismissal of the employee.
In Maquiling vs. Philippine Tuberculosis Society, Inc.,[6] we held: Recent decisions of this Court distinguish the treatment of managerial from that of rank-and-file personnel insofar as the application of the doctrine of loss of trust and confidence is concerned. With respect to rank-and-file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer will not suffice. But as regards a managerial employee, mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal.(Silverio Picar vs. Shangri-La Hotel,G.R. No. 146367,December 14, 2005) That respondent was a managerial employee and that the ground for the termination of his employment was loss of confidence under Article 282 (c) of the Labor Code are undisputed. Due to its subjective nature which makes it prone to abuse, however, this Court has set guidelines to be followed if the ground for termination of services of an employee is loss of confidence. Thus, in order to be a valid cause for dismissal, loss of confidence should not be (a) simulated, (b) used as a subterfuge for causes which are improper, illegal or unjustified, (c) arbitrarily asserted in the face of overwhelming evidence to the contrary, and (d) a mere afterthought to justify earlier action taken in bad faith. While in the termination of services of managerial employees for loss of confidence, employers are given wider latitude of discretion, there must, however, be substantial proof thereof. The employers evidence must clearly and convincingly establish the facts and incidents upon which the loss of confidence may fairly be made to rest.(Wah Yuen Restaurant vs. Primo Jayona,G.R. No. 159448,December 16, 2005) To be a valid ground for an employees dismissal, loss of trust and confidence must be based on a willful breach and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Thus, a willful breach cannot be a breach resulting from mere carelessness. (Easycall Communications Phils. Inc. vs. Edward King,G.R. No. 145901,December 15, 2005) The loss of trust and confidence, in turn, must be based on the willful breach of the trust reposed in the employee by his employer. Ordinary breach will not suffice. A breach of trust is willful if it is done intentionally, knowingly and purposely without justifiable
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National Labor Relations Commission excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. The Court has laid down the guidelines for the application of the doctrine for loss of confidence, thus: 1. the loss of confidence must not be simulated; 2. it should not be used as a subterfuge for causes which are illegal, improper or unjustified; 3. it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; 4. it must be genuine, not a mere afterthought, to justify earlier action taken in bad faith; and 5. the employee involved holds a position of trust and confidence. (Agripino Molina vs. Pacific Plans, Inc.,G.R. No. 165476,March 10, 2006) Moreover, it is well-settled that the term trust and confidence is restricted to managerial employees or those who [are] vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, or to effectively recommend such managerial actions.(Manila Memorial Park Cemetery, Inc. and/or Enrique B. Lagdameo vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006) As Assistant Crewing Manager, the respondent occupied a position of responsibility, imbued with trust and confidence. To be a valid ground for dismissal, however, loss of trust and confidence must be based on a willful breach of trust and founded on clearly established facts. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion. Further, the act complained of must be work-related and shows that the employee concerned is unfit to continue working for the employer.[ Fujitsu Computer Products Corporation of the Philippines v. Court of Appeals, G.R. No. 158232, March 31, 2005, 454 SCRA 737, 760.] It must be premised on the fact that the employee concerned is invested with delicate matters, such as the handling or care and protection of the property and assets of the employer. (C.F. Sharp & Co., Inc., vs Renato Zialcita,G.R. No. 157619, July 17, 2006) In several cases, we made pronouncements that loss of confidence as a ground for validly dismissing an employee under Article 282 of Labor Code applies only to employees occupying positions of trust and confidence or those routinely charged with the care and custody of the employers money or property. In the case of Mabeza v. National Labor Relations Commission,[ 338 Phil. 386, 395-396 (1997)] we ruled that: Loss of confidence should ideally apply only to cases involving employees
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National Labor Relations Commission occupying positions of trust and confidence or to those situations where the employee is routinely charged with the care and custody of the employers money or property. To the first class belong the managerial employees, i.e., those vested with the powers or prerogatives to lay down management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or effectively recommend such managerial actions; and to the second class belong cashiers, auditors, property custodians, etc., or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property x x x.(NLRC vs Ma. Bernadette S. Salgarino,G.R. No. 164376,July 31, 2006) Distinction on the treatment of Trust and Confidence on managerial employee/s and rank-and-file employees Petitioner was dismissed from employment on the ground, among others, of loss of trust and confidence. Loss of trust and confidence, as a valid ground for dismissal, must be substantiated by evidence. Jurisprudence has distinguished the treatment of managerial employees or employees occupying positions of trust and confidence from that of rank-and-file personnel, insofar as the application of the doctrine of trust and confidence is concerned. In Caoile v. National Labor Relations Commission, the Court had occasion to explain as follows: Thus, with respect to rank-and-file personnel, loss of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is some basis for such loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the purported misconduct, and the nature of his participation therein renders him unworthy of the trust and confidence demanded by his position.[ 359 Phil. 399, 406 (1998).] (Emphasis supplied)(Felix M. Cruz, Jr., vs Court of Appeals,,G.R. NO. 148544,July 12, 2006) Recent decisions of this Court have distinguished the treatment of managerial employees from that of the rank-and-file personnel, insofar as the application of the doctrine of loss of trust and confidence is concerned. Thus, with respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of managerial employees, proof beyond reasonable doubt is not required, albeit the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of confidence rests and not on the employer's arbitrariness, whims and caprices or suspicion, otherwise the employee would eternally remain at the mercy of the employer. (Nenuca A. Velez vs Shangri-las Edsa Plaza Hotel, G.R. No. 148261,October 9, 2006) There is no denying that petitioners were managerial employees. They executed
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National Labor Relations Commission management policies, they had the power to hire personnel and assign them tasks; and discipline the employees in their branch. They recommended actions on employees to the head office.[19] Pertinent is Article 212 (m) of the Labor Code defining a managerial employee as one who is vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Consequently, as managerial employees, in the case of petitioners, the mere existence of grounds for the loss of trust and confidence justify their dismissal. [20] Pursuant to our ruling in Caoile v. National Labor Relations Commission,[21] as long as the employer has a reasonable ground to believe that the managerial employee concerned is responsible for the purported misconduct, or the nature of his participation renders him unworthy of the trust and confidence demanded by his position, the managerial employee can be dismissed. (Anabelle Muaje-Tuazon vs Wenphil Corporation,G..R. No. 162447,December 27, 2006) An employer may terminate an employee for fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. However, the right of an employer to terminate an employee based on loss of confidence must not be exercised arbitrarily and without just cause. To be a valid reason for dismissal, loss of confidence must be genuine. Uncorroborated assertions and accusations by the employer will not suffice, otherwise it will jeopardize the constitutional guarantee of security of tenure of the employee.(Premiere Development Bank vs. Elsie Escudero Mantal,G.R. No. 167716,March 23, 2006) A slight assistance to a direct competitor could constitute a breach of the employees duty of loyalty. However, when competition is indirect or minimal, the employer may be required to show that the employee received substantial assistance from the competitor. If an employee usurped a corporate opportunity or secretly profited from a competitive activity, the employer may receive the value of the lost opportunity or the secret profit. An employees skill, aptitude, and other subjective knowledge obtained in the course of employment are not the property of his employer. However, an employee occupying a managerial position or office is obliged to protect the trade secret of his employer consisting of formula, process, device or compilation which it uses in its business and gives it an opportunity to obtain an advantage over competitors who do not know of such trade secret. However, the rule does not apply to a matter of public knowledge or of general knowledge within the industry. Moreover, an employer has a protectible interest in the customer relationships of its former employee established and/or nurtured while employed by the employer, and is entitled to protect itself from the risk that a former employee might appropriate customers by taking unfair advantage of the contract developed while working for the employer. While acting as an agent of his employer, an employee owes the duty of fidelity and loyalty. Being a fiduciary, he cannot act inconsistently with his agency or trust. He cannot solicit his employers customers or co-employees for himself or for a business competitor of his employer. If such employee or officer connives with and induces another to betray his employer in favor of a business competitor of his employer, he is held accountable for his mischief.(Agripino V. Molina vs. Pacific Plans, INC.,G.R. No. 165476,March 10, 2006)
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National Labor Relations Commission Unlike a rank-and-file worker, where breach of trust as a ground for valid dismissal requires proof of involvement in the alleged anomaly and where mere uncorroborated accusation by the employer will not suffice, the sheer existence of a basis for believing that the employers trust has been breached is enough for the dismissal of a managerial employee. (Dennis D. Sy, vs Metropolitan Bank & Trust Company, G.R. No. 160618,November 2, 2006) Incompetence/Inefficiency In the case before this Court, the ground relied upon by the petitioners in dismissing the respondents is incompetence. Although incompetence or inefficiency as a ground for a valid dismissal is not expressly written in Article 282 as one of the just causes in dismissing an employee, this ground is considered as analogous to those enumerated under said article. Additionally, incompetence is a ground specifically provided for in Section H of the Philippine Overseas Employment Administration (POEA) Standard Employment Contract to validly dismiss an erring seaman. Such incompetence or inefficiency is understood to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted reasonable period, or by producing unsatisfactory results.(Skippers United Pacific, Inc., and J.P. Samartzsis Maritime Enterprises Co., S.A., vs. Jerry Maguad and Porferio Ceudadano,G.R. No. 166363,August 15, 2006) Gross Negligence Gross negligence means an absence of that diligence that a reasonably prudent man would use in his own affairs. To constitute a just cause for termination of employment, the neglect of duties must not only be gross but habitual as well. The single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. In JGB and Associates, Inc. v. National Labor Relations Commission, we held that gross negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. Fraud and willful neglect of duties imply bad faith of the employee in failing to perform his job to the detriment of the employer and the latters business. (Premiere Development Bank vs Elsie Escudero Mantal,G.R. No. 167716,March 23, 2006) Article 282(b) of the Labor Code, however, imposes a stringent condition before an employer may terminate an employment due to gross and habitual neglect by the employee of his duties. To sustain a termination of employment based on this provision of the law, the negligence must not only be gross but also habitual. Gross negligence implies a want or absence of or a failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.(Manila Memorial Park Cemetery, Inc. and/or Enrique B. Lagdameo vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006)
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National Labor Relations Commission Under Article 282 of the Labor Code, willful disobedience of a lawful order of the employer is a valid cause for dismissal. In Rosario v. Victory Ricemill, this Court reiterated that: willful disobedience of the employers lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being 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.(First Dominion Resources Corporation vs. Mercurio Pearanda and Romeo Vidal,G.R. No. 166616,January 27, 2006 ) 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 ones duties. Habitual neglect implies repeated failure to perform ones duties for a period of time, depending upon the circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the part of the employee in failing to perform his job to the detriment of the employer and the latters business.] Thus, the single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) Willful disobedience requires the concurrence of two (2) requisites: (1) the employees assailed conduct must have been willful, that is 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.(Asian Terminals, Inc. and Rodolfo G. Corvite JR., vs Danilo Marbella, Ricardo Melendrez and Felomino Mangalus,G.R. No. 149074,August 10, 2006) We take cognizance of the fact that in any given workplace, not all of the employees perform in accordance with what is expected of them. As such, it is not uncommon that an employees work performance is found to be unsatisfactory. As a general concept, poor performance is equivalent to inefficiency and incompetence in the performance of official duties. Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. The fact that an employees performance is found to be poor or unsatisfactory does not necessarily mean that the employee is grossly and habitually negligent of his duties. Gross negligence implies a want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them.. (Eastern Overseas Employment Center, Inc. vs. Cecilia Bea, G.R. NO. 143023, November 29, 2005) Habitual neglect implies repeated failure to perform ones duties for a period of time. Buguats repeated acts of absences without leave and her frequent tardiness reflect her indifferent attitude to and lack of motivation in her work. Her repeated and habitual infractions, committed despite several warnings, constitute gross misconduct. Habitual absenteeism without leave constitute gross negligence and is sufficient to justify
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National Labor Relations Commission termination of an employee. We find the penalty of dismissal from the service reasonable and appropriate to Buguats infraction. Her repeated negligence is not tolerable; neither should it merit the penalty of suspension only. The record of an employee is a relevant consideration in determining the penalty that should be meted out. Buguat committed several infractions in the past and despite the warnings and suspension, she continued to display a neglectful attitude towards her work. An employees past misconduct and present behavior must be taken together in determining the proper imposable penalty. The totality of infractions or the number of violations committed during the period of employment shall be considered in determining the penalty to be imposed upon an erring employee. The offenses committed by him should not be taken singly and separately but in their totality. Fitness for continued employment cannot be compartmentalized into tight little cubicles of aspects of character, conduct, and ability separate and independent of each other. It is the totality, not the compartmentalization, of such company infractions that Buguat had consistently committed which justified her dismissal. (Challenge Socks Corporation vs. CA, et. al.,G.R. No. 165268, November 8, 2005) To justify the dismissal of an employee for neglect of duties, however, it does not seem necessary that the employer show that he has incurred actual loss, damage, or prejudice by reason of the employees conduct. It is sufficient that the gross and habitual neglect by the employee of his duties tends to prejudice the employers interest since it would be unreasonable to require the employer to wait until he is materially injured before removing the cause of the impending evil.(Dr. Danilo T. Ting and Mrs. Elena Ting vs. Court of Appeals,G.R. No. 146174,July 12, 2006) Serious Misconduct We have defined misconduct 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. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however serious, must, nevertheless, be in connection with the employees work to constitute just cause for his separation. (Lakpue Drug Inc., et. al. vs. Ma. Lourdes Belga, G.R. No. 166379, October 20, 2005) Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error of judgment. To be a valid cause for termination, the misconduct must be serious.(Ha Yuan Restaurant vs National Labor Relations Commission and Juvy Soria,G.R. No. 147719,January 27, 2006) On the other hand, misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. Under Article 282 of the Labor Code, the misconduct, to be a just cause for termination,
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National Labor Relations Commission must be of such grave and aggravated character, not merely of a trivial or unimportant nature. For serious misconduct to warrant the dismissal of an employee, it (1) must be serious; (2) must relate to the performance of the employees duty; and (3) must show that the employee has become unfit to continue working for the employer.(Premiere Development Bank vs. Elsie Escudero Mantal,G.R. No. 167716,March 23, 2006) Misconduct has been defined as improper or wrong conduct; the transgression of some established and definite rule of action; a forbidden act, a dereliction of duty, unlawful in character and implies wrongful intent and not mere error of judgment. The misconduct to be serious must be of such grave and aggravated character and not merely trivial and unimportant. Such misconduct, however, serious, must nevertheless, be in connection with the employees work to constitute just cause for his separation.(Agripino V. Molina vs. Pacific Plans, Inc.,G.R. No. 165476,March 10, 2006) Misconduct is defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error of judgment. The misconduct to be serious within the meaning of the act must be of such a grave and aggravated character and not merely trivial or unimportant. Such misconduct, however serious, must nevertheless be in connection with the work of the employee to constitute just cause from his separation.[ Department of Labor Manual, Sec. 4343.01; Ha Yuan Restaurant v. National Labor Relations Commission, G.R. No. 147719, 27 January 2006, 480 SCRA 328, 331-332, citing Colegio de San Juan de Letran-Calamba v. Villas, 447 Phil. 692, 699 (2003). 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. It is equally important and required that the act or conduct must have been performed with wrongful intent. (NLRC vs Ma. Bernadette S. Salgarino,G.R. No. 164376,July 31, 2006)
Tested against the foregoing requisites, it is clear that Baez and Cantillas were guilty of serious misconduct. They had defrauded the University. Both accepted fees from students in violation of the University rule requiring payment of such fees only to the cashiers at the accounting office. Labor Arbiter Garduque and the Court of Appeals correctly found Baez and Cantillas to have conspired in the illegal scheme for which they were rightfully dismissed by the University. Direct evidence of such conspiracy is not necessary as the same could be deduced from their acts before, during, and after the commission of their fraudulent scheme. (Estrella S. Baez, et al. vs. De La Salle University,G.R. No. 167177,September 27, 2006) Willful disobedience or Insubordination Willful disobedience, or insubordination as otherwise branded in this case, as a just cause for dismissal of an employee, necessitates the concurrence of at least two
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National Labor Relations Commission requisites: (1) the employee's assailed conduct must have been willful, that is, 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. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) The charge of disobedience for Belgas failure to comply with the memoranda must likewise fail. Disobedience, as a just cause for termination, must be willful or intentional. Willfulness is characterized by a wrongful and perverse mental attitude rendering the employees act inconsistent with proper subordination. In the instant case, the memoranda were given to Belga two days after she had given birth. It was thus physically impossible for Belga to report for work and explain her absence, as ordered. (Lakpue Drug Inc., et. al. vs. Ma. Lourdes Belga, G.R. No. 166379, October 20, 2005) The foregoing, notwithstanding, we find that respondent should be dismissed for willful disobedience of the memoranda issued by petitioner. To be validly dismissed on the ground of willful disobedience requires the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being 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. In the instant case, the failure of respondent to answer the July 9 and 10, 2001 memoranda of petitioner is clearly intentional. He reported to and loitered outside petitioners premises but never made any oral or written reply to the said memoranda. This shows respondents wrongful and perverse attitude to defy the reasonable orders which undoubtedly pertain to his duties as an employee of petitioner. (Ace Promotion & Marketing Corporation vs. Reynaldo Ursabia,G.R. No. 171703,September 22, 2006)
Due Process Petitioners claim that the alleged failure of the company to notify them of their termination renders their dismissal illegal, and thus they should be reinstated and paid with full backwages or given separation pay, following the Courts ruling in Serrano v. Court of Appeals. The argument does not hold. The ruling in Serrano has already been superseded by the case of Agabon v. National Labor Relation Commission. The Agabon enunciates the new doctrine that if the dismissal is for just cause but statutory due process was not observed, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process. But in any case, the issue of illegal dismissal had already been resolved by the NLRC and the Court of Appeals, which both found that the company had an authorized cause and had complied with the requirements of due process when it dismissed petitioners. (Sime Darby Employees Association vs. NLRC, G.R. No. 148021,December 6, 2006)
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National Labor Relations Commission It also appears that petitioner violated respondents right to due process. In Loadstar Shipping Co., Inc. vs. Mesano,[9] we held: The law requires that an employee sought to be dismissed must be served two written notices before termination of his employment. The first notice is to apprise the employee of the particular acts or omissions by reason of which his dismissal has been decided upon; and the second notice is to inform the employee of the employers decision to dismiss him. Failure to comply with the requirement of two notices makes the dismissal illegal. The procedure is mandatory. Non-observance thereof renders the dismissal of an employee illegal and void. Records show that respondents were not served by petitioner with notices, verbal or written, informing them of the particular acts for which their dismissal is sought. Neither were they required to give their side regarding the alleged serious misconduct imputed against them. We thus sustain the Court of Appeals ruling that respondents were deprived of both their substantive and procedural rights to due process and, therefore, the termination of their employment is illegal. Since respondents were illegally dismissed from work, they are entitled to reinstatement without loss of seniority rights, full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time their compensation was withheld from them up to the time of their actual reinstatement.(Grandspan Development Corporation, vs. Ricardo Bernardo, et. al.,G.R. No. 141464,September 21, 2005) To rule that the mere dialogue between private respondent and petitioner sufficiently complied with the demands of due process is to disregard the strict mandate of the law. A conference is not a substitute for the actual observance of notice and hearing. The failure of private respondent to give petitioner the benefit of a hearing before she was dismissed constitutes an infringement on her constitutional right to due process of law and not to be denied the equal protection of the laws. The right of a person to his labor is deemed to be his property within the meaning of the constitutional guarantee. This is his means of livelihood. He cannot be deprived of his labor or work without due process of law. (Philips Semiconductors (PHILS.), INC., vs. Eloisa Fadriquela,G.R. No. 141717,April 14, 2004) On the contention of Westmont and Unilab that they were denied due process, well settled is the rule that the essence of due process is simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of. The requirement of due process in labor cases before a Labor Arbiter is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims, in the event the Labor Arbiter determines that no formal hearing would be conducted or that such hearing was not necessary.(Westmont Pharmaceuticals, Inc., United Laboratories Inc., vs. Westmont Pharmaceuticals, Inc. and United Laboratories, Inc.,G.R. Nos. 147407-08,February 20, 2006)
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National Labor Relations Commission Petitioner contends that he was denied his right to due process because the investigation conducted by Citytrust was done ex-parte and he was not given the opportunity to confront the witnesses against him. Petitioners concept of the opportunity to be heard is the chance to ventilate ones side in a formal hearing where he can have a face-to-face confrontation with his accusers. It is well settled that the basic requirement of notice and hearing in termination cases is for the employer to inform the employee of the specific charges against him and to hear his side and defenses. This does not, however, mean a full adversarial proceeding. The parties may be heard through pleadings, written explanations, position papers, memorandum or oral argument. In all of these instances, the employer plays an active role by providing the employee with the opportunity to present his side and answer the charges in substantial compliance with due process. In the present case, petitioner cannot claim that he was denied due process because he was able to respond to the letter of Citytrust dated August 6, 1993. Moreover, he admitted in his cross-examination before the labor arbiter that he was able to attend the investigation of the ad hoc committee formed by Citytrust where he was shown the check vouchers issued by MECO, informed of the charges against him and was given further opportunity to explain his side. Hence, the fact alone that he was not able to confront the witnesses against him during the investigation conducted by Citytrust does not mean that he was denied his right to due process. What is frowned upon is the absolute lack of notice and hearing.(Felix M. Cruz, JR., vs Court of Appeals,,G.R. NO. 148544,July 12, 2006) Clearly, Baez was given sufficient opportunity to refute the charges against her and confront respondents witnesses. Parties to a labor case may ask for a hearing, but such is not a matter of right. This is because the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy. The rules of evidence are not strictly observed in proceedings before administrative bodies like the NLRC where decisions may be reached on the basis of position papers only. It was thus within Labor Arbiter Garduques absolute discretion whether or not to set the case for trial on the merits. (Estrella S. Baez, et al. vs. De La Salle University,G.R. No. 167177,September 27, 2006) The essence of due process in administrative proceedings is an opportunity to explain ones side or an opportunity to seek reconsideration of the action or ruling complained of. Before an employee can be dismissed, the Labor Code requires the employer to furnish the employee a written notice containing a statement of the causes for termination and to afford said employee ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. If, after investigation, the employer decides to terminate the services of the employee, the employer must notify the worker in writing of the decision to dismiss him, stating clearly the reasons therefor. Private respondent has complied with all the procedural requirements for dismissal of an employee. (Loida V. Malabago vs National Labor Relations Commission,G.R. No. 165465,September 13, 2006) It is well-settled that the essence of due process in administrative proceedings is the opportunity to explain ones side or a chance to seek reconsideration of the action or ruling complained of. In labor cases, it has been held that due process is simply an
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National Labor Relations Commission opportunity to be heard and not that an actual hearing should always and indispensably be held since a formal type or trial-type hearing is not at all times and in all instances essential to due process the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of controversy. (NS Transport Employees Association (NSTEA),vs. NS Transport Services, Inc.,.R. No. 164049,October 30, 2006) Procedural Due Process The Labor Code requires both notice and hearing; notice alone will not suffice. The requirement of notice is intended to inform the employee concerned of the employers intent to dismiss him and the reason for the proposed dismissal. On the other hand, the requirement of hearing affords the employee an opportunity to answer his employers charges against him and accordingly to defend himself therefrom before dismissal is effected. In this case, after the warning notices were given to the respondents, the petitioners did not give the respondents an opportunity to present their sides by conducting a hearing as provided for in Section 17 of the POEA Contract. Instead, the petitioners, with breathless speed, ordered the repatriation of the erring employees to Manila. Therefore, the second notice, which must be given after hearing to inform the respondents of the petitioners decision to dismiss them, was not complied with. In view of that, the Court of Appeals correctly ruled that there was non-compliance with the two-notice requirement in effecting a valid dismissal. (Skippers United Pacific, et al. vs. Jerry Maguad and Porferio Ceudadano,G.R. No. 166363,August 15, 2006) To effectuate a valid dismissal of an employee, the law requires not only the existence of a just and valid cause but likewise prescribes the employer to give the employee the opportunity to be heard and to defend himself. Procedurally, if the dismissal is based on a just cause under Article 282 of the Labor Code, the employer must give the employee two written notices and a hearing or opportunity to be heard is requested by the employee before terminating the employment. The notices must consist of the following: a notice specifying the grounds for which dismissal is sought, a hearing or an opportunity to be heard, and after hearing or opportunity to be heard, a notice of the decision to dismiss. (Paulino Aliten vs U-NEED Lumber & Hardware, and Court of Appeals,G.R. No. 168931,September 12, 2006) There is no demand that the notices of dismissal themselves be couched in the form and language of judicial or quasi-judicial decisions. What is required is that the employer conduct a formal investigation process, with notices duly served on the employees informing them of the fact of investigation, and subsequently, if warranted, a separate notice of dismissal. Through the formal investigatory process, the employee must be accorded the right to present his/her side, which must be considered and weighed by the employer. The employee must be sufficiently apprised of the nature of the charge against him/her, so as to be able to intelligently defend against the charges. In the instant case, records show that respondent bank complied with the twonotice rule prescribed in Article 277(b) of the Labor Code. Petitioners were given all avenues to present their side and disprove the allegations of respondent bank. An
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National Labor Relations Commission informal meeting was held between the branch manager of MOB, the three petitioners and Mr. Gener, the Vice-President of the PCIB Employees Union. As per report, petitioners admitted having used Alfiscars account to divert funds intended for other accounts. A special audit investigation was conducted to determine the extent of the fraudulent transactions. Based on the results of the investigation, respondent bank sent show-cause memoranda to petitioners, asking them to explain their lapses, under pain of disciplinary action. The memoranda, which constitute the first notice, specified the various questionable acts committed by petitioners. Afterwards, petitioners submitted their respective replies to the memoranda. This very well complies with the requirement for hearing, by which petitioners were afforded the opportunity to defend themselves. The second notice came in the form of the termination memoranda, informing petitioners of their dismissal from service. From the foregoing, it is clear that the required procedural due process for their termination was strictly complied with. Moreover, the show-cause memoranda respectively served on petitioners clearly indicate that they were being made to answer questions pertaining to possible anomalous behavior on their part. For example, petitioners were asked to explain why they had posted the questioned deposits on the ledger, although there were no teller validations or teller stamps, and also on what basis they considered such transactions to be valid. On the other hand, the show-cause memorandum to Cadiz directly asks him to provide the personal details of Sonia Alfiscar, why he went out of his way to make a special arrangement for the mysterious Alfiscar, and other questions pertaining to the Alfiscar accounts. (Romeo C. Cadiz, Carlito Bongkingki and Prisco Gloria IV vs. Court of Appeals and Philippine Commercial International Bank (Now Equitable PCIBank) G. R. No. 153784, October 25, 2005) However, the NLRC also ruled that the petitioners failed to comply with the procedural requirements of dismissal, namely, notice and hearing. According to the labor tribunal, this was evident in Odangos declaration that in the morning of March 10, 1998, he ordered the preparation of the private respondents walking papers after they manifested disrespect, arrogance and insolence when made to explain their alleged stealing and attempt to take fish out from the company compound as reported by the security guard. The NLRC further held that this is anathema to the principle of due process, that which hears before it condemns, and in disregard to the purpose and reason of respondents Memorandum dated March 10, 1998 requiring complainants to explain the incident within 24 hours from receipt. The NLRC concluded that any excuse, defense, or justification by the private respondents would not matter, as their dismissal from employment was already a foregone conclusion. However, petitioners dismissal, albeit for a valid and just cause, failed to adhere to the two-notice rule which requires a previous notice to the employee of the act or omission for which his dismissal is sought requiring him to explain his side within a reasonable period and a subsequent notice to the employee of the employers decision to dismiss him. Without the required notice, the dismissal even for just cause under Article 282 of the Labor Code, is considered ineffectual, and, consistent with the doctrine laid down in Serrano v. NLRC, petitioners could not be considered terminated from employment until final determination of the legality of
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National Labor Relations Commission their dismissal for cause. They should then be paid their salaries for the period when they were not considered effectively terminated. The sanction for the non-compliance of respondent Amadeo Fishing Corporation with the two-notice rule is the payment of full backwages, including allowances and other benefits, to the employee computed from the time period of dismissal up to the time of the final determination of this case. Thus, the NLRC committed error in awarding P10,000.00 to each of the dismissed employees, herein petitioners, instead of the full backwages prayed for. (Amadeo Fishing Corporation and/or Eduardo Amadeo, Gerry Odango (General Manager), and Anita Ymbong (Personnel Manager) vs. Romeo Nierra, et. al., G.R. No. 163099, October 4, 2005) The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d), of the Omnibus Rules Implementing the Labor Code: (d) In all cases of termination of employment, the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Labor Code: (i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him. (iii)A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. (Electro System Industries Corporation vs. NLRC, G.R. No. 165282, October 5, 2005) Also, in Maquiling v. Philippine Tuberculosis Society, Inc., it was stressed that the first notice must inform outright the employee that an investigation will be conducted on the charges particularized therein which, if proven, will result to his dismissal. Such notice must not only contain a plain statement of the charges of malfeasance or misfeasance but must categorically state the effect on his employment if the charges are proven to be true. The rationale for this rule was explained by the Court as follows: This notice will afford the employee an opportunity to avail all defenses and exhaust all remedies to refute the allegations hurled against him for what is at stake is his very life and limb his employment. Otherwise, the employee may just disregard the notice as a warning without any disastrous consequence to be anticipated. Absent such statement, the first notice falls short of the requirement of due process. Ones work is everything, thus, it is not too exacting to impose this
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National Labor Relations Commission strict requirement on the part of the employer before the dismissal process be validly effected. This is in consonance with the rule that all doubts in the implementation and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, shall be resolved in favor of labor. There is no showing that private respondent was actually served with the required two notices. The first notice did not bear the signature of private respondent. In the second notice, there was a notation that private respondent refused to sign. This notation is not sufficient proof that petitioner attempted to serve the second notice to private respondent. In sum, other than petitioners bare assertions that private respondent was furnished with copies of the notices and that he attended the hearing on the charges, it presented no other proof to establish the same. Mere allegation is not equivalent to proof or evidence. Clearly therefore, petitioner was not able to discharge the burden of proving compliance with the employees right to statutory due process in termination proceedings. (Electro System Industries Corporation vs. NLRC, G.R. No. 165282, October 5, 2005) In our view, neither does the February 23, 1999 letter constitute the required notice. The letter did not inform her of the specific acts complained of and their corresponding penalty. The law requires the employer to give the worker to be dismissed two written notices before terminating his employment, namely, (1) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) the subsequent notice which informs the employee of the employers decision to dismiss him. Additionally, the letter never gave respondent Galay an opportunity to explain herself, hence denying her due process. (Heavylift Manila Inc., et. al. vs. CA, et. al. G.R. No. 154410 October 20, 2005) Procedural due process in labor law requires the employer to give the employee two notices. The first is the notice which apprises the employee of the particular acts or omissions for which his dismissal is being sought along with the opportunity for the employee to air his side, while the second is the subsequent notice of the employers decision to dismiss him. More particularly, Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code provides for the standards of due process to be substantially observed in cases of termination of employment, to wit: (d) In all cases of termination of employment, the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Labor Code: (i) A written notice served on the employee specifying the ground or grounds for termination, and giving the said employee reasonable opportunity within which to explain his side. (ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.
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National Labor Relations Commission (iii) A written notice of termination served on the employee, indicating that upon consideration of all the circumstances, grounds have been established to justify his termination. For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination. If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from effective date of termination. (Eastern overseas employment Center, Inc. vs. Cecilia Bea, G.R. NO. 143023, November 29, 2005) In Agabon v. National Labor Relations Commission, we upheld as valid the dismissal for just cause although it did not comply with the requirements of procedural due process. We ruled that while the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process. The violation of Buguats right to statutory due process by the petitioner warrants the payment of indemnity in the form of nominal damages in the amount of P30,000, which is appropriate under the circumstances. (Challenge Socks Corporation vs. CA, et. al.,G.R. No. 165268, November 8, 2005) It is horn-book law that the termination of an employee must be effected in accordance with law. Amongst others, the law requires the employer to furnish the worker or employee sought to be dismissed with two written notices, i.e., (a) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and (b) a subsequent notice which advises the employee of the employers decision to dismiss him. Upon this score, Rule XIV, Sec. 2, of the Omnibus Rules Implementing the Labor Code stipulates: Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. In case of abandonment of work, the notice shall be served at the workers last known address. (Baron Express et. al. vs. Roberto F Umanito, G.R. No. 156969, November 11, 2005) The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code: Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed: I. For termination of employment based on just causes as defined in Article 282 of the Code:
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National Labor Relations Commission (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. Dismissals based on just causes contemplate acts or omissions attributable to the employee. Procedurally, if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought, a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss. (Durban Apartments Corporation doing business under the trade name and style of City Garden Hotel-Makati, represented by Mr. Francisco Macasieb as President vs. Miguel Geraldito R. Catacutan and NLRC,G.R. No. 167136,December 14, 2005) The twin requirements of notice and hearing constitute the essential elements of due process. The law requires the employer to furnish the employee sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel, if he desires, and (2) a subsequent notice informing the employee of the employers decision to dismiss him. This procedure is mandatory and its absence taints the dismissal with illegality.(Easycall Communications Phils. Inc. vs. Edward King,G.R. No. 145901,December 15, 2005) In addition to the presence of just cause, procedural due process must also be observed to legally dismiss an employee. The Labor Code requires the employer to furnish the employee two written notices before it can terminate the latter from service: (a) a written notice containing a statement of the cause for termination to afford the employee ample opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and, (b) if the employer decides to terminate the services of the employee, the employer must notify him in writing of the decision to dismiss him, stating clearly the reasons
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National Labor Relations Commission therefor. (First Dominion Resources Corporation vs. Mercurio Pearanda and Romeo Vidal,G.R. No. 166616,January 27, 2006 ) In Ariola v. Philex Mining Corporation,[38] we held: In Agabon v. National Labor Relations Commission and Jaka Food Processing Corporation v. Pacot, the Court sustained the dismissals for just cause under Article 282 and for authorized cause under Article 283 of the Labor Code, respectively, despite non-compliance with the statutory requirement of notice and hearing. The grounds for the dismissals in those cases, namely, neglect of duty and retrenchment, remained valid because the non-compliance with the notice and hearing requirement in the Labor Code did not undermine the validity of the grounds for the dismissals. Indeed, to invalidate a dismissal merely because of a procedural defect creates absurdity and runs counter to public interest. We explained in Agabon: The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process may have far-reaching consequences. This would encourage frivolous suits, where even the most notorious violators of company policy are rewarded by invoking due process. This also creates absurd situations where there is a just or authorized cause for dismissal but a procedural infirmity invalidates the termination. Let us take for example a case where the employee is caught stealing or threatens the lives of his co-employees or has become a criminal, who has fled and cannot be found, or where serious business losses demand that operations be ceased in less than a month. Invalidating the dismissal would not serve public interest. It could also discourage investments that can generate employment in the local economy. Where the dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement, the sanction should be stiff as the dismissal process was initiated by the employers exercise of his management prerogative, as opposed to a dismissal based on a just cause under Article 282 with the same procedural infirmity where the sanction to be imposed upon the employer should be tempered as the dismissal process was, in effect, initiated by an act imputable to the employee.(Industrial Timber Corporation vs. Virgilio Ababon et al. G.R. No. 164518, G.R. No. 164965,January 25, 2006) Records disclose that Anita was repatriated to the Philippines on 25 January 1995. On the night before her departure, her employers wife merely told her that she was sending her home on account of some problem. When Anita asked Ms. Go, who accompanied her to the airport the following day, why she was being repatriated, Ms. Go merely answered that there was some kind of a problem. The information given to Anita cannot be considered as equivalent to the written
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National Labor Relations Commission notice required by law to be served on the employee. The notice should inform the employee of the ground or grounds for his termination and that his dismissal is being sought. (Philemploy Services and Resources, Inc. vs. Anita Rodriguez,G.R. No. 152616,March 31, 2006) Under the above Rule, no employee may be validly dismissed unless the employer has complied with the two notice requirements: (1) a written notice containing a statement of the cause for termination to afford the employee an opportunity to be heard and defend himself with the assistance of his representative, if he so desires; and (2) and a written notice stating clearly the reason of the termination. The procedure is mandatory and failure to comply with these procedural requirements for terminating employment taints the dismissal with illegality.(Asian Terminals, INC. and Rodolfo G. Corvite, JR., vs Danilo Marbella, Ricardo Melendrez and Felomino Mangalus,G.R. No. 149074,August 10, 2006) In the instant case, the just cause to terminate respondent was his willful disobedience to the July 9 and July 10, 2001 memoranda of petitioner. However, he was not given sufficient notice that his services will be terminated on such grounds. Respondent defied two memoranda of petitioner. Hence, it is necessary that he be furnished with a third memorandum informing him that his disobedience to the previous two memoranda may cause his dismissal. While the July 10, 2001 memorandum stated that he failed to answer the July 9, 2001 directive requiring an explanation for his absence on even date, petitioner never sent a notice to respondent ordering him to explain his disobedience to the July 10, 2001 memorandum. Moreover, the final notice of termination of respondent failed to specify the ground for his dismissal. It vaguely stated that he is being terminated for violation of company rules which were not specified by petitioner. It even added a third ground (i.e., writing a threat), for which respondent was not given a chance to controvert. Under the circumstances, we find that petitioner did not sufficiently comply with the required two notice rule. (Ace Promotion & Marketing Corporation vs. Reynaldo Ursabia,G.R. No. 171703,September 22, 2006) Substantive Due Process Even if the dismissal of an employee is conditioned not on the grounds for termination under the Labor Code, but pursuant to the provisions of a CBA, it still is necessary to observe substantive due process in order to validate the dismissal. As applied to the Labor Code, adherence to substantive due process is a requisite for a valid determination that just or authorized causes existed to justify the dismissal. As applied to the dismissals grounded on violations of the CBA, observance of substantial due process is indispensable in establishing the presence of the cause or causes for dismissal as provided for in the CBA. Substantive due process, as it applies to all forms of dismissals, encompasses the proper presentation and appreciation of evidence to establish that cause under law exists for the dismissal of an employee. This holds true even if the dismissal is predicated on particular causes for dismissal established not by the Labor Code, but by the CBA. Further, in order that any CBA-mandated dismissal may receive the warrant of the courts and labor tribunals, the causes for dismissal as provided for in the CBA must satisfy to the evidentiary threshold of the NLRC and the courts. (Del Monte Philippines Inc. and Warfredo C. Balandra, vs Mariano Saldivar, et al.,G.R. No. 158620,October 11, 2006)
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National Labor Relations Commission Effect of non-compliance to procedural due process Thus, we qualified the ruling in Agabon in this wise: Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal process was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is based on an authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employers exercise of his management prerogative.(DAP Corporation, Felix Pineda, President, and Densil Pineda, General Manager, vs. CA and Maureen Marcial, G.R. No. 165811,December 14, 2005) Records disclose that Anita was repatriated to the Philippines on 25 January 1995. On the night before her departure, her employers wife merely told her that she was sending her home on account of some problem. When Anita asked Ms. Go, who accompanied her to the airport the following day, why she was being repatriated, Ms. Go merely answered that there was some kind of a problem. The information given to Anita cannot be considered as equivalent to the written notice required by law to be served on the employee. The notice should inform the employee of the ground or grounds for his termination and that his dismissal is being sought. (Philemploy Services and resources, Inc., vs. Anita Rodriguez ,G.R. No. 152616,March 31, 2006) The absence of notice in the present case makes Anitas termination defective for which petitioner must be sanctioned for its non-compliance with the requirements of or for failure to observe due process. Not being a mere technicality but part of procedural due process, to which every employee is entitled to ensure that the employers prerogative to dismiss is not exercised arbitrarily, this requisite notice must be complied with strictly. (Philemploy Services and resources, Inc., vs. Anita Rodriguez ,G.R. No. 152616,March 31, 2006) Effect of Employee's Acquittal in the Criminal Case Citing Sea-Land Service, Inc. v. NLRCand MGG Marine Services, Inc. v. NLRC, the NLRC ruled that an employees acquittal in the criminal case does not preclude a finding that he has been guilty of acts inimical to the employers interest. The labor tribunal further pointed out that the private respondents were charged with violating the company policy of prohibiting cobit, bringing of items outside the company premises without the proper gate pass, and misconduct for challenging the blue guards in reporting their offense to the management. Considering that the private respondents did not deny the existence of such company policy and that they had no gate pass for the fish, it does not matter whether they
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National Labor Relations Commission caught it while at sea, or that such fish were chargeable to their allowance. (Amadeo Fishing Corporation and/or Eduardo Amadeo, Gerry Odango (General Manager), and Anita Ymbon (Personnel Manager) vs. Romeo Nierra, et. al., G.R. No. 163099, October 4, 2005) Estoppel It bears stressing that the law looks with disfavor on quitclaims and releases by employees who have been inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities and frustrate just claims of employees [ JMM Promotions and Management, Inc. v. Court of Appeals, 439 Phil. 1, 11 (2002). In line with the policy of the State to promote the welfare of execution, quitclaims executed by employees are often frowned upon as contrary to public policy. Acceptance of benefits therefrom does not amount to estoppel. Indeed, in Lopez Sugar Corporation v. Federation of Free Workers, this Court ruled that: Acceptance of those benefits would not amount to estoppel. The reason is plain. Employer and employee, obviously do not stand on the same footing. The employer drove the employee to the wall. The latter must have to get hold of money. Because, out of the job, he has to face harsh necessities of life. He thus found himself in no position to resist money proferred. His, then, is a case of adherence, not of choice. One thing sure, however, is that petitioners did not relent their claim. They pressed it. They are deemed not to have waived any of their rights. (Sime Darby Pilipinas, Inc. and Larry C. Dubberly vs. Alfredo Arguilla,G.R. No. 143542,June 8, 2006) Respondents received their retirement benefits from the petitioner in three staggered installments without any tax deduction for the simple reason that petitioner had remitted the same to the BIR with the use of its own funds conformably with its agreement with the retirees. It was only when respondents demanded the payment of their salary differentials that petitioner alleged, for the first time, that it had failed to present the 1993 CBA to the BIR for approval, rendering such retirement benefits not exempt from taxes; consequently, they were obliged to refund to it the amounts it had remitted to the BIR in payment of their taxes. Petitioner used this failure as an afterthought, as an excuse for its refusal to remit to the respondents their salary differentials. Patently, petitioner is estopped from doing so. It cannot renege on its commitment to pay the taxes on respondents retirement benefits on the pretext that the new management had found the policy disadvantageous. .(IBC 13 vs NOEMI B. AMARILLA, G.R. No. 162775,October 27, 2006) We find that the subsequent decision of petitioners Domingo, et. al. to repudiate the Compromise Agreement was merely an afterthought, whatever would be the reason for their subsequent change of mind. Since they had entered into a binding contract on their own volition and received benefits therefrom, they are therefore estopped from questioning the validity of said contract later on. Parenthetically, it is interesting to note that while the petitioners try to impugn the Compromise Agreement that they themselves entered into,
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National Labor Relations Commission they have not made any offer or effort to return the money they received as first payment under said agreement. (Lady Lydia Cornista-Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) Records reveal that when the Bank offered termination or separation pay to its remaining employees by way of a compromise agreement, a great majority of them accepted the amount as justifiable settlement of their claims.[21] Like these quitclaims and releases, there are voluntary agreements which represent reasonable settlements and are considered binding on the parties.[22] Petitioners, therefore, cannot renege on the compromise agreement they entered into after accepting benefits earlier simply because they may have felt that they committed a mistake in accepting their termination/separation pay. As no proof was presented to show that the compromise agreement in dispute was entered into through fraud, misrepresentation or coercion, the same must be recognized as valid and binding upon all the 529 employees of the Bank. In fine, the petitioners and the other employees are estopped from questioning the validity of the Compromise Agreement. (Lady Lydia Cornista-Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) In so doing, this Court regards such act of the petitioner as an express relinquishment of his right to proceed with this Petition. Thus, petitioner is already estopped from pursuing his claim that the awards granted in his favor by the Labor Arbiter be affirmed in full. (Herbert Williams, vs Court of Appeals,G.R. No. 166177,December 18, 2006) The Court disagrees. Petitioner is estopped from denying that respondents worked for it. In the first place, it never raised this defense in the proceedings before the Labor Arbiter. Notably, the defense it raised pertained to the nature of respondents employment, i.e., whether they are seasonal employees, contractors, or worked under the pakyaw system. Thus, in its Position Paper, petitioner alleged that some of the respondents are coconut filers and copra hookers or sakadors; some are seasonal employees who worked as scoopers or lugiteros; some are contractors; and some worked under the pakyaw system.[5] In support of these allegations, petitioner even presented the companys payroll,[6] which will allegedly prove its allegations. (Pamplona Plantation Company,vs Ramon Acosta, et al., GR. No. 15319,December 6, 2006) Evidence The foregoing disquisition notwithstanding, as reflected above, the existence of business losses is not required to justify the closure or cessation of establishment or undertaking as a ground to terminate employment of employees. Even if the ISU were not incurring losses, its abolition or closure could be justified on other grounds like that proffered by Capitol extinct demand. Capitol failed, however, to present sufficient and convincing evidence to support such claim of extinct demand. In fact, the employees of Capitol submitted a petitiol dated April 21, 1992 addressed to Dr. Clemente opposing the abolition of the ISU. The closure of ISU then surfaces to be contrary to the provisions of the Labor Code
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National Labor Relations Commission on termination of employment. The termination of the services of Dr. Meris not having been premised on a just or authorized cause, he is entitled to either reinstatement or separation pay if reinstatement is no longer viable, and to backwages. (CAPITOL MEDIAL CENTER, Inc. and Dr. Thelma Navarette-Clemente, VS. Dr. Cesar E. Meris,G.R. No. 155098,September 16, 2005) Substantial evidence is more than a mere scintilla The evidence must be real and substantial, and not merely apparent; for the duty to prove work-causation or workaggravation imposed by law is real and not merely apparent.(Spouse Ppnciano Aya-ay, Sr. and Clemencia Aya-ay, vs. Arpaphil Shipping Corp., and Magna Marine, INC., G.R. No. 155359,January 31, 2006) Doctrinally, the findings of fact of the NLRC are conclusive on this Court, absent a showing that they were reached arbitrarily. Here, the Court finds no cogent reason to deflect from the findings of the NLRC. We are, thus, bound by the findings of the NLRC that the alleged infractions of private respondent do not constitute gross misconduct to warrant his dismissal from service. Indeed, petitioners cannot rely merely on the weakness of the defense of private respondent or on his failure to present evidence to disprove the charge of gross misconduct. In the absence of substantial evidence, the contentions of petitioners are self-serving and incapable of showing that the dismissal of private respondent was justified. (Tower Industrial Sales, et al. Vs. Hon. Court of Appeals, et al.G.R. No. 165727. April 19, 2006) It is well-settled that strict rules of evidence are not applicable in claims for compensation and disability benefits. Disability should not be understood more on its medical significance but on the loss of earning capacity. As in the case of Crystal Shipping, Inc., an award of permanent total disability benefits in the petition at bar would be germane to the purpose of the benefit, which is to help the employee in making ends meet at the time when he is unable to work. (Bernardo Remigio vs. National Labor Relations Commission, April 12, 2006) Any employee, male or female, may charge an employer or superior with sexual harassment, but the claim must be well substantiated. As reflected above, however, Mariquits claim does not pass the test of credibility.(Digitel Telecommunications Philippines vs. Mariquit Soriano,G.R. No. 166039, June 26, 2006) In determining the true intent and meaning of a decision, the same must be considered in its entirety. The judgment must be treated not in isolation or as a separate item, but in connection with other portions of the decision. Thus, in order to prove petitioners salary, it behooved respondents to produce the payroll which under the Labor Code is required to be kept by an employer; they chose not to do so. Such concealment of best evidence raises the presumption that it would be adverse to them. It must be stressed that the burden of proof to establish petitioners salary falls on respondent RSSI,
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National Labor Relations Commission as employer.(Mario Danilo B. Villaflores, vs Ram System Services, Inc. and Rogelio U. Yap, G.R. No. 166136,August 18, 2006) Thus, petitioner failed to adduce a morsel of evidence to prove the factual basis for a valid retrenchment. It is not enough to allege that it had only one on-going project and that its other projects were punch-tested, that the market demands a corresponding dismissal of personnel due to advance development in the Asia-Pacific Region affecting the construction business in the Philippines, and that, consequently, it could no longer afford to pay the salaries and wages of the manpower of the corporation. As the Court explained in Central Azucarera de la Carlota v. National Labor Relations Commission, what is required to be presented is adequate, credible and persuasive evidence x x x [of] dire financial straits x x x from drastic business losses. A mere litany of woes, in the absence of any solid evidence that they translated into specific and substantial losses that would necessitate retrenchment, will not suffice; the resulting negative effects of alleged crises must be underscored.( Filipinas Systems FILSYSTEMS, Inc., et al. Vs. Ernesto Gatlabayan, et al., G.R. No. 167959. April 19, 2006) Under the immediately quoted provision, an ordinary striking worker may not be declared to have lost his employment status by mere participation in an illegal strike. There must be proof that he knowingly participated in the commission of illegal acts during the strike. While the University adduced photographs showing strikers picketing outside the university premises, it failed to identify who they were. It thus failed to meet the substantiality of evidence test applicable in dismissal cases. (Arellano University Employees and Workers Union vs Court of Appeals,G.R. No. 139940, September 19, 2006) Lack of Sufficient Evidence Nothing on record shows that Chinabank had established the petitioners culpability for the loss of the cited amount. Neither did Chinabanks investigation reveal that petitioner committed the acts complained of. While he handles money to be delivered to the requesting teller, the decision to release the requested amount is made by the cash custodian. What is so obvious in this case is that the money was released without following bank procedures. The bank, with all its expertise and mastery of banking operations and procedure could not make its employee take the blame for any loss without convincing proof nor sufficient evidence of the latters misconduct. In this case, we are convinced that private respondent Chinabank failed to discharge the burden of showing a just cause to dismiss the petitioner. To dismiss a lowly employee on mere suspicions and innuendos without substantial proof by management of his alleged misconduct could result in unfairness and injustice. (Jaime H. Ballao vs Court of Appeals,G.R. No. 162342,October 11, 2006) While the Executive Labor Arbiter cited certain pieces of documentary evidence showing that Teddy Arabi also subcontracted for private respondent M&S, it was not proven that the latter utilized the same people (petitioners) to do the work for private respondent M&S. As indeed, there was no factual finding in the main case that petitioners worked for private respondent M&S. They were merely found to have "continued working as workers/laborers at TIMEX SAWMILL and were working under the full control and supervision of CTCI's personnel as [c]heckers, [y]ard [m]asters, [c]lerk[s], [a]uditors, [f]lormen (sic) and [s]upervisors." (Jang Lim, et al., vs Court of Appeals, G.R. No.
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National Labor Relations Commission 149748,November 16, 2006) Substantial Evidence Substantial evidence is defined as that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. As all three tribunals found, the Report cannot be given any weight or credibility because it is uncorroborated, based purely on hearsay, and obviously merely an afterthought. While rules of evidence are not strictly observed in proceedings before administrative bodies, petitioner should have offered additional proof to corroborate the statements described therein. Thus, in Ranises v. National Labor Relations Commission, involving a seafarer who was repatriated to the Philippines for allegedly committing illegal acts amounting to a breach of trust, as based on a telex dispatch by the Master of the M/V Southern Laurel, the Court rejected the weight given by the NLRC on the telex, to wit: Unfortunately, the veracity of the allegations contained in the aforecited telex was never proven by respondent employer. Neither was it shown that respondent employer exerted any effort to even verify the truthfulness of Capt. Sonodas report and establish petitioners culpability for his alleged illegal acts. Worse, no other evidence was submitted to corroborate the charges against petitioner.(Skippers United Pacific Inc. vs. National Labor Relations Commission, G.R. NO. 148893,July 12, 2006) This Court is mindful of the fact that in administrative proceedings like illegal dismissal cases, the guilt of a party need not be shown by proof beyond reasonable doubt. What is required is mere substantial evidence. In this connection, the ruling in Ang Tibay v. CIR becomes relevant anew, to wit: Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. (MC Rural Electric Service Cooperative Inc., vs The Hon. Court of Appeals, G.R. No. 153144,October 12, 2006) Execution The power of the sheriff to rule on the issue of ownership is settled. The Sheriffs Manual was promulgated pursuant to the provision of Article 218(a) of the Labor Code, as amended, in relation to Section 4, Rule VIII of the New Rules of Procedure of the NLRC. The Sheriffs Manual recognizes a situation wherein the real properties to be levied may not be registered in the name of the party against which the levy is being issued. Section 3(b), Rule 5 of the Sheriffs Manual states: Levy on real property. -- Real property or any interest therein may be levied in the following manner: x x x (b) Real property, or growing crops thereon or any interest therein, belonging to the party against whom levy is issued, and held by any other person or standing on the records of the register of deeds in the name of any other person, by filing with the register of deeds a copy of the decision, order or award, together with a description of the property,
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National Labor Relations Commission and a notice that such real property, and any interest therein on said property, held by or standing, in the name of such other person, naming him are levied by leaving with the occupant of the property, if any, and with such other persons, or his agents, if found within the province or city or at the residence of either, if within the province or city a copy of such decision, order or award, description and notice. (Jang Lim, et al., vs Court of Appeals, G.R. No. 149748,November 16, 2006) It is noteworthy that the parcel of land covered by TCT No. T-107,201 has been registered in the name of private respondent M&S since March 16, 1993 which is prior to the institution of the instant case on October 17, 1994. Since it was not sufficiently proven that private respondent M&S is a mere alter ego of private respondent CTCI and there being no proof to show that this particular property was fraudulently transferred to private respondent M&S by private respondent CTCI, there is no basis to make said parcel of lot covered by TCT No. T-107,201 the subject of execution in the case at bar. (Jang Lim, et al., vs Court of Appeals, G.R. No. 149748,November 16, 2006) Exhaustion of Administrative Remedies Time and again, this Court has exhorted that before a party is allowed to seek the intervention of the court, it is a pre-condition that he should have availed of all the means of administrative processes afforded him. Hence, if a remedy within the administrative machinery can still be resorted to by giving the administrative officer concerned every opportunity to decide on a matter that comes within his jurisdiction, then such remedy should be exhausted first before the courts judicial power can be sought. The premature invocation of courts judicial intervention is fatal to ones cause of action. This rule is certainly not without reason The underlying principle of the rule on exhaustion of administrative remedies rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly. There are both legal and practical reasons for the principle. The administrative process is intended to provide less expensive and more speedy solutions to disputes. Where the enabling statute indicates a procedure for administrative review and provides a system of administrative appeal or reconsideration, the courts for reasons of law, comity and convenience will not entertain a case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum.(Metro Drug Distribution, Inc., VS. Metro Drug Corporation Employees Association Federation of Free Workers, G.R. No. 142666,September 26, 2005) Finality of Factual Findings The first issue raises factual matters which may not be reviewed by the Court. Our jurisdiction is limited to reviewing errors of law. Not being a trier of facts, the Court cannot re-examine and re-evaluate the probative value of evidence presented to the Labor Arbiter, the NLRC and the Court of Appeals, which formed the basis of the questioned decision and resolution. Indeed, their findings when in absolute agreement are accorded
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National Labor Relations Commission not only respect but even finality as long as they are supported by substantial evidence. (Roberto T. Domondom vs. NLRC, G.R. No. 154376 September 30, 2005) We agree with the findings of the Labor Arbiter and the NLRC that RAMATEK illegally dismissed Anelia. This Court defers to the factual findings of labor officials, who possess the expertise in matters within their jurisdiction, provided substantial evidence support such factual findings.[19] Thus, absent any proof that the factual findings of the Labor Arbiter and the NLRC are capricious or arbitrary, such findings have conclusive effect on this Court and deserve finality. (Ramatek Philippines Inc. and Morris Weinberg vs. Ma. Anelia De Los Reyes, G.R. No. 139526, October 25, 2005) We agree with petitioners that factual findings of quasi-judicial and administrative bodies are accorded great respect and even finality by the courts. However, this rule is not absolute. When there is a showing that the factual findings of administrative bodies were arrived at arbitrarily or in disregard of the evidence on record, they may be examined by the courts. In this case, the Court of Appeals found nothing in the records [to support] the conclusion that DIGITEL became the absolute owner of BALTEL or that the former absorbed the latters employees. Hence, the Court of Appeals is justified in reviewing the factual findings of both the Labor Arbiter and the NLRC.(Emelita Leonardo, et. al. vs. Court of Appeals,G.R. No. 152459 ,June 15, 2006) As a rule, judicial review of labor cases does not go beyond the evaluation of the sufficiency of the evidence upon which the labor officials findings rest. Hence, where the factual findings of the Labor Arbiter and the NLRC conform and are confirmed by the Court of Appeals, the same are accorded respect and finality, and are binding upon this Court. It is only when the factual findings of the NLRC and the appellate court are in conflict that this Court will review the records to determine which finding should be upheld as being more in conformity with the evidentiary facts. Where the Court of Appeals affirms the findings of the labor agencies on review and there is no showing whatsoever that said findings are patently erroneous, this Court is bound by the said findings.(Bernabe Falco, Jaime Rodriguez, Ervin Abad and Joseph Laron, vs Mercury Freight International, Inc., and/or Bayani Coching, G.R. No. 153824, August 9, 2006) Under Rule 45 of the 1997 Rules of Civil Procedure, only questions of law, not of fact, may be raised before this Court.[5] We have consistently reiterated that the findings of fact by the Court of Appeals are final and conclusive and cannot be reviewed on appeal to the Supreme Court. The only time this Court will disregard the appellate courts factual findings, which are accorded great respect, is when these are based on speculation, surmises or conjectures or when these are not based on substantial evidence.(Rizal Commercial Banking Corporation, vs Leonardo Bithao,G.R. No. 162240,August 29, 2006) Furthermore, factual findings of administrative agencies that are affirmed by the Court of Appeals are conclusive on the parties and not reviewable by this Court. This is so because of the special knowledge and expertise gained by these quasi-judicial agencies from presiding over matters falling within their jurisdiction. So long as these factual findings are supported by substantial evidence, this Court will not disturb the same. (Godofredo Morales vs Skills International Company and/ or Maher Daas and Marivic and/or Wallan al Wallan G.R. No. 149285,August 30, 2006)
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National Labor Relations Commission It is well-settled that the findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the findings are supported by substantial evidence; more so when such findings were affirmed by the CA and such findings are binding and conclusive upon this Court. Thus, we rule that petitioner committed fraud or willful breach of the employers trust reposed in her under Article 282 of the Labor Code. (Estrellita G. Salazar vs Philippine Duplicators, Inc, G.R. No. 154628, December 6, 2006) Anent the first assigned error, it is a settled rule that under Rule 45 of the Rules of Court, only questions of law may be raised in this Court. Judicial review by this Court does not extend to a re-evaluation of the sufficiency of the evidence upon which the proper labor tribunal has based its determination. Firm is the doctrine that this Court is not a trier of facts, and this applies with greater force in labor cases. Factual issues may be considered and resolved only when the findings of facts and conclusions of law of the Labor Arbiter are inconsistent with those of the NLRC and the CA. The reason for this is that the quasi-judicial agencies, like the Arbitration Board and the NLRC, have acquired a unique expertise because their jurisdiction are confined to specific matters. In the present case, the question of whether private respondent is guilty of desertion is factual. The Labor Arbiter, NLRC and the CA are unanimous in their findings that private respondent is not guilty of desertion and that he has been illegally terminated from his employment. After a review of the records of the instant case, this Court finds no cogent reason to depart from the findings of these tribunals. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC,G.R. No. 153031,December 14, 2006) Financial Assistance That Maynilad suffered no damage resulting from the acts of petitioner is inconsequential. In Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado ng Wellcome-DFA (NEW-DFA), we held that deliberate disregard or disobedience of company rules could not be countenanced, and any justification that the disobedient employee might put forth would be deemed inconsequential. The lack of resulting damage was unimportant, because the heart of the charge is the crooked and anarchic attitude of the employee towards his employer. Damage aggravates the charge but its absence does not mitigate nor negate the employees liability. What is abhorrent and punishable is the act of contracting unauthorized work for a fee, regardless of whether the act caused damage to the company. Thus, we hold that Maynilad validly terminated the services of petitioner on the ground of serious miconduct which resulted to the loss of trust of Maynilad upon petitioner because his credibility in doing his job as a team leader of a repair crew has already been eroded. As regards the amount of P13,260 awarded to petitioner by way of financial assistance, the same must be deleted for lack of basis. Financial assistance may be given as a measure of social justice in exceptional circumstances and as an equitable concession. It is allowed only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.(Jesus B. Lopez vs. NLRC, et. al.,G.R. No. 167385,December 13, 2005)
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National Labor Relations Commission The propriety of awarding financial assistance has long been tackled by this Court. In Philippine Long Distance Telephone Co. v. NLRC, we laid down the rule that henceforth separation pay shall be allowed as a measure of social justice only in the instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. A contrary rule, we said would have the effect of rewarding rather than punishing an erring employee.(Eastern Shipping Lines, Inc., et al. Vs. Dioscoro D. Sedan,G.R. No. 159354. April 7, 2006) Floating Status Article 286 applies only when there is a bona fide suspension of the employers operation of a business or undertaking for a period not exceeding six (6) months. In security agency parlance, being placed off detail or on floating status means waiting to be posted. Here, prior to his tour of duty in Pasay City, respondent had a regular posting, but he was dislodged by a newly-hired security guard and respondent had to be assigned to a client whose service contract was to end. Thus, there was no suspension of operation, business or undertaking, bona fide or not, that would have justified placing the respondent off-detail and making him wait for a period of more than six months. In the same vein, the records are shorn of any indication that respondent had to be placed on temporary offdetail for lack of available post. VSAI just stopped giving respondent his assignment after his duty at the OWWA Parking Lot in Pasay City.(Veterans Security Agency Inc. and Jesus R. Vargas vs. Felipe Gonzalvo, jr.,G.R. No. 159293,December 16, 2005) Grave Abuse of Discretion The Supreme Court is not a trier of facts, more so in the consideration of the extraordinary writ of certiorari where neither questions of fact nor of law are entertained, but only questions of lack or excess of jurisdiction or grave abuse of discretion. The sole object of the writ is to correct errors of jurisdiction or grave abuse of discretion. The phrase grave abuse of discretion has a precise meaning in law, denoting abuse of discretion too patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility. It does not encompass an error of law. Nor does it include a mistake in the appreciation of the contending parties respective evidence or the evaluation of their relative weight. (Romys Freight Service vs. Jesus C. Castro,Dominador Veloria and the First Division of the Court of Appeals,G.R. No. 141637,June 8, 2006) There is grave abuse of discretion when there is a capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, such as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross so as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. (Manila Memorial Park Cemetery, Inc. and/or Enrique B. Lagdameo vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006)
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National Labor Relations Commission The term grave abuse of discretion, in its juridical sense, connotes capricious, despotic, oppressive or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse must be of such degree as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, as where the power is exercised in an arbitrary and capricious manner by reason of passion and hostility. The word "capricious", usually used in tandem with the term "arbitrary", conveys the notion of willful and unreasoning action. Thus, when seeking the corrective hand of certiorari, a clear showing of caprice and arbitrariness in the exercise of discretion is imperative. (Bibiana Farms & Mills, Inc., vs National Labor Relations Commission (5th Division),G.R. NO. 154284, October 27, 2006) In a Petition for Certiorari, it is the burden of petitioner to show grave, not just ordinary, abuse of discretion. Grave abuse of discretion exists where an act of a court or tribunal is performed with a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility which must be so patent and gross as to amount to an invasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law mere abuse of discretion is not enough. Mere errors of fact or law committed by the lower court are not correctable via a Rule 65 Petition for Certiorari. (MC Rural Electric Service Cooperative Inc., vs The Hon. Court of Appeals, G.R. No. 153144,October 12, 2006) Illegal Dismissal Under Article 279 of the Labor Code, an employee unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (Robert C. Casol and Nagsama-Purefoods-Pulo, vs. Purefoods Corporation, G.R. No. 166550,November 18, 2005) Even assuming there was abandonment, petitioner did not comply with the statutory requirement of notice and hearing. The law requires the employer to furnish the worker sought to be dismissed two written notices. The first notice apprises the employee of the particular acts or omissions for which dismissal is sought, while the second notice informs the employee of the employers decision to dismiss him. In the present case, the petitioner failed to serve the respondents either of the two notices. Neither did petitioner afford the respondents an opportunity to contest their dismissal. Having failed to establish the requirements of notice and hearing, the dismissal of the respondents is tainted with illegality. Respondents, having been illegally dismissed, are, therefor, entitled to (1) reinstatement, or separation pay, if reinstatement is no longer viable; and (2) full back wages. (Aboitiz Haulers, Inc., vs Monaorai Dimapatoi, et. el, G. R. No. 148619, September 19, 2006) Considering the entirety of the case, the Court finds that petitioners have been illegally dismissed from employment. They are entitled to reinstatement without loss of seniority rights and the payment of back wages computed from the time of their
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National Labor Relations Commission termination minus the amount equivalent to a 3-day suspension which Angeles should have served for his absences in 1997 and which amount shall be deducted from the backwages to be awarded to him. (Nelson Zagala and Feliciano M. Angelesvs. Mikado PhilippinesCorporation ,G.R. No. 160863, September 27, 2006) It is well-settled that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable 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. For failure to prove otherwise, the Court has no recourse but to grant the petition. (Hermonias L. Liganza vs RBL Shipyard Corp.,G.R. No. 159862,October 17, 2006) Illegal Work Stoppage Employees who have no labor dispute with their employer but who, on a day they are scheduled to work, refuse to work and instead join a welga ng bayan commit an illegal work stoppage. (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006)
Independent Contractor In the case of Vinoya v. NLRC, the Court declared that it is not enough to show substantial capitalization or investment in the form of tools, equipment, etc. to determine whether one is an independent contractor. Other factors that may be considered include the following: whether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of specified pieces of work; the control and supervision of the work to another; the employers power with respect to the hiring, firing and payment of the contractors workers; the control of the premises; the duty to supply premises, tools, appliances, materials and labor; and the mode and manner or terms of payment. (Arnulfo C. Acevedo vs. Advanstar Company Inc. and/or Felipe LOI, Manager, and Tony Jalapadan, G.R. No. 157656, November 11, 2005) Interlocutory Order The 25 August 1998 Order of the labor arbiter partakes the nature of an interlocutory order, or one which refers to something between the commencement and end of the suit which decides some point or matter but it is not the final decision of the whole controversy. An interlocutory order is not appealable until after the rendition of the judgment on the merits for a contrary rule would delay the administration of justice and unduly burden the courts. The 25 August 1998 Order merely terminated formal trial of the consolidated cases, declared that the motion for inspection will be dealt with in the resolution of the case, and ordered the submission of the parties respective memoranda after which the case shall be submitted for resolution. It did not put an end to the issues
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National Labor Relations Commission of illegal lockout, ULP, and illegal dismissal. (Sime Darby Employees Association vs. NLRC, G.R. No. 148021,December 6, 2006)
Job contracting A person is considered engaging in legitimate job contracting or subcontracting if the following conditions concur: (a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; The contractor or subcontractor has substantial capital or investment; and The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits. (Arnulfo C. Acevedo vs. Advanstar Company Inc. and/or Felipe LOI, Manager, and Tony Jalapadan, G.R. No. 157656, November 11, 2005)
(b) (c)
Liability of Principal Employer and Job Contractor Even granting en arguendo that Universal is a legitimate job contractor and not a labor-only contractor, still petitioner cannot escape liability because even without a direct employer-employee relationship between the principal employer and the employees, the former is still jointly and severally liable with the job contractor for the employees monetary claims[32] following Arts. 106, 107 and 109 of the Labor Code, to wit: Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. (7K Corporation vs NLRC,G.R. No. 148490,November 22, 2006) Jurisdiction Jurisdiction of the Labor Arbiter to hear and decide question on the transfer of ownership of a company car This is not an issue of first impression. The jurisdiction of Labor Arbiters is provided under Article 217(a) of the Labor Code, as amended, viz: (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether
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National Labor Relations Commission agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; 6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. In all these instances, the matrix is the existence of an employer-employee relationship. In the case at bar, there is no dispute that petitioner is an employee of the respondents. In Baez v. Valdevilla, we held: x x x Presently, and as amended by R.A. 6715, the jurisdiction of Labor Arbiters and the NLRC in Article 217 is comprehensive enough to include claims for all forms of damages arising from the employer-employee relations. Whereas this Court in a number of occasions had applied the jurisdictional provisions of Article 217 to claims of damages filed by employees, we hold that by the designating clause arising from the employer-employee relations Article 217 should apply with equal force to the claim of an employer for actual damages against its dismissed employee, where the basis for the claim arises from or is necessarily connected with the fact of termination, and should be entered as a counterclaim in the illegal dismissal case. Baez is in accord with paragraph 6 of Article 217(a), which covers all other claims, arising from employer-employee relations, viz: Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.(Roberto T. Domondon vs. NLRC, G.R. No. 154376 September 30, 2005) Lacking this evidence, the act of petitioner Uy in dismissing respondent cannot be deemed an act as an officer of the bank. Consequently, it cannot be held that there
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National Labor Relations Commission existed an employer-employee relationship between petitioner Uy and respondent Bueno when the former allegedly dismissed the latter. This requirement of employer-employer relationship is jurisdictional for the provisions of the Labor Code, specifically Book VI thereof, on Post-Employment, to apply. Since the employer-employee relationship between petitioner Uy and respondent Bueno was not established, the labor arbiter never acquired jurisdiction over petitioner Uy. Consequently, whether petitioner Uy was properly served with summons is immaterial. Likewise, that she terminated the services of respondent Bueno in bad faith and with malice is of no moment. Her liability, if any, should be determined in another forum.(Atty. Andrea Uy and Felix Yusay vs Amalia A. Bueno,G.R. No. 159119,March 14, 2006) The fact that the Order, which dismissed the case in view of the compromise agreement, was issued during the pendency of the petition for certiorari in the Court of Appeals does not divest the Labor Arbiter of jurisdiction. A petition for certiorari is an original action and does not interrupt the course of the principal case unless a temporary restraining order or a writ of preliminary injunction has been issued against the public respondent from further proceeding.[16] The Labor Arbiter thus acted well within his jurisdiction. Therefore, the Labor Arbiters Order dismissing the case with prejudice in view of the compromise agreement entered into by the parties must be upheld. (Eurotech Hair Systems, Inc., Lutz Kunack, and Jose Barin, vs Antonio S. Go, G.R. No. 160913 August 31, 2006) In reconciling the grants of jurisdiction vested under Articles 261 and 217 of the Labor Code, the Court has pronounced that the original and exclusive jurisdiction of the Labor Arbiter under Article 217(c) for money claims is limited only to those arising from statutes or contracts other than a Collective Bargaining Agreement. The Voluntary Arbitrator or Panel of Voluntary Arbitrators will have original and exclusive jurisdiction over money claims arising from the interpretation or implementation of the Collective Bargaining Agreement and, those arising from the interpretation or enforcement of company personnel policies, under Article 261. (Del Monte Philippines Inc. and Warfredo C. Balandra, vs Mariano Saldivar, et al.,G.R. No. 158620,October 11, 2006) Being interlocutory in nature, the 25 August 1998 Order could not have been validly appealed such that it would divest the labor arbiter of his jurisdiction over the consolidated cases. This being the case, the labor arbiter still had jurisdiction when he rendered his Decision. (Sime Darby Employees Association vs. NLRC, G.R. No. 148021,December 6, 2006) Claims against Government Owned and Controlled Corporations We therefore hold that the employees of petitioner METRO cannot be considered as employees of petitioner LRTA. The employees hired by METRO are covered by the Labor Code and are under the jurisdiction of the Department of Labor and Employment, whereas the employees of petitioner LRTA, a government-owned and controlled corporation with original charter, are covered by civil service rules. Herein private respondent workers cannot have the best of two worlds, e.g., be considered government employees of petitioner LRTA, yet allowed to strike as private employees under our labor laws. Department of Justice Opinion No. 108, Series of 1999, issued by then Secretary of Justice Serafin R. Cuevas on whether or not employees of petitioner METRO could go on
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National Labor Relations Commission strike is persuasive.(Metro Transit Organization, Inc., vs. Court of Appelas, G.R. No. 163881,March 24, 2006) Labor-only Contracting Article 106 of the Labor Code, as amended, provides in part: ART. 106. Contractor or subcontracting. x x xx x x x x x There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. x x x. On the basis of the records, we have no reason to deviate from the Appellate Courts finding that J. Narag Construction is indeed a labor-only contractor. These are the reasons: (1) it is not registered as a building contractor with the SEC; (2) it has no contract with petitioner; and (3) there is no proof of its financial capability and has no list of equipment, tools, machineries and implements used in the business. Clearly, J. Narag Construction could not be respondents employer.(Grandspan Development Corporation, vs. Ricardo Bernardo, et. al.,G.R. No. 141464,September 21, 2005) The pertinent provision of the Labor Code on labor-only contracting is paragraph 4 of Article 106, which provides: There is labor-only contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. (Arnulfo C. Acevedo vs Advanstar Company INC., G.R. No. 157656, November 11, 2005) Thus, Grigio is obviously a labor-only contractor since it did not have substantial capital or investment which relates to the service performed; the respondents performed activities which were directly related to the main business of the petitioner; and Grigio did not exercise control over the performance of the work of the respondents. Consequently, the petitioner is considered as the employer of the respondents. (Aboitiz Haulers, Inc., vs Monaorai Dimapatoi, et. el, G. R. No. 148619, September 19, 2006) Thus, petitioner, the principal employer, is solidarily liable with Universal, the laboronly contractor, for the rightful claims of the employees.[30] Under this set-up, Universal, as the labor-only contractor, is deemed an agent of the principal, herein petitioner, and the law makes the principal responsible to the employees of the labor-only contractor as if the principal itself directly hired or employed the employees.(7K Corporation vs
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National Labor Relations Commission NLRC,G.R. No. 148490,November 22, 2006) On the other hand, in labor-only contracting, the statute creates an employeremployee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees. (7K Corporation vs NLRC,G.R. No. 148490,November 22, 2006) Rationale in Prohibiting Labor-Only Contracting In prohibiting labor-only contracting and creating an employer-employee relationship between the principal and the supposed contractors employees, the law intends to prevent employers from circumventing labor laws intended to protect employees. In the case of Aurora Land Projects Corp. v. National Labor Relations Commission, this Court pronounced: The question as to whether an employer-employee relationship exists in a certain situation continues to bedevil the courts. Some businessmen try to avoid the bringing about of an employer-employee relationship in their enterprises because that judicial relation spawns obligations connected with workmens compensation, social security, medicare, minimum wage, termination pay, and unionism. In light of this observation, it behooves this Court to be ever vigilant in checking the unscrupulous efforts of some of our entrepreneurs, primarily aimed at maximizing their return on investments at the expense of the lowly workingman. (Aboitiz Haulers, Inc., vs Monaorai Dimapatoi, et. el, G. R. No. 148619, September 19, 2006)
Management Prerogative In general, management has the prerogative to discipline its employees and to impose appropriate penalties on erring workers pursuant to company rules and regulations. In this case, there is no dispute that the private respondents were aware of the company policy requiring a gate pass for all fish that would be taken out of the premises. If, indeed, it were true that respondent Nierra previously had a gate pass, which he claimed was destroyed, he could have just as easily gotten a new one. Moreover, there was no mention of this allegation in the Spot Report prepared by the guard on duty; the private respondents insisted that the fish was part of their fish allowance. (Amadeo Fishing Corporation and/or Eduardo Amadeo, Gerry Odango (General Manager), and Anita Ymbong (Personnel Manager) vs. Romeo Nierra, et. al., G.R. No. 163099, October 4, 2005) Now, on the crux of the matter, jurisprudence abounds that, except as limited by special laws, an employer is free to regulate, according to his own discretion and
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National Labor Relations Commission judgment, all aspects of employment, including the transfer of employees. It is the employers prerogative, based on its assessment and perception of its employees qualifications, aptitudes, and competence, to deploy its employees in the various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. An employees right to security of tenure does not give him such a vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful. (PLDT, et. al. vs. Alfredo S. Paguio G.R. No. 152689, Alfredo S. Paguio vs. PLDT, et. al. G.R. No. 154072, October 12, 2005) An employee who cannot get along with his co-employees is detrimental to the company for he can upset and strain the working environment. Without the necessary teamwork and synergy, the organization cannot function well. Thus, management has the prerogative to take the necessary action to correct the situation and protect its organization. When personal differences between employees and management affect the work environment, the peace of the company is affected. Thus, an employees attitude problem is a valid ground for his termination. It is a situation analogous to loss of trust and confidence that must be duly proved by the employer. Similarly, compliance with the twin requirement of notice and hearing must also be proven by the employer. (Heavylift Manila Inc., et. al. vs. CA, et. al. G.R. No. 154410 October 20, 2005) True, it is the inherent prerogative of an employer to transfer and reassign its employees to meet the requirements of its business. Be that as it may, the prerogative of the management to transfer its employees must be exercised without grave abuse of discretion. The exercise of the prerogative should not defeat an employee's right to security of tenure. The employers privilege to transfer its employees to different workstations cannot be used as a subterfuge to rid itself of an undesirable worker. (Veterans Security Agency Inc. and Jesus R. Vargas vs. Felipe Gonzalvo, jr.,G.R. No. 159293,December 16, 2005) Work is a necessity that has economic significance deserving legal protection. The social justice and protection to labor provisions in the Constitution dictate so. On the other hand, employers are also accorded rights and privileges to assure their self-determination and independence, and reasonable return of capital. This mass of privileges comprises the so-called management prerogatives. Although they may be broad and unlimited in scope, the State has the right to determine whether an employer's privilege is exercised in a manner that complies with the legal requirements and does not offend the protected rights of labor. One of the rights accorded an employer is the right to close an establishment or undertaking. (Industrial Timber Corporation vs. Virgilio Ababon et al. G.R. No. 164518,G.R. No. 164965,January 25, 2006) Indeed, an employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to determine his fitness to perform his work. The employees services may be terminated for a just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him at the time of his engagement. (Philemploy Services and Resources, Inc., vs. Anita Rodriguez,G.R. No. 152616,March 31, 2006) The rule is that the transfer of an employee ordinarily lies within the ambit of the
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National Labor Relations Commission employers prerogatives. The employer exercises the prerogative to transfer an employee for valid reasons and according to the requirement of its business, provided the transfer does not result in demotion in rank or diminution of the employees salary, benefits and other privileges. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) The harassing acts of the private respondent are unjustified. They were undertaken when petitioner sought clarification from the private respondent about his supposed 50% equity on Pacfor Phils. Private respondent Pacfor invokes its rights as an owner. Allegedly, its issuance of the foregoing directives against petitioner was a valid exercise of management prerogative. We remind private respondent Pacfor that the exercise of management prerogative is not absolute. By its very nature, encompassing as it could be, management prerogative must be exercised in good faith and with due regard to the rights of labor verily, with the principles of fair play at heart and justice in mind. The exercise of management prerogative cannot be utilized as an implement to circumvent our laws and oppress employees.(Arsenio T. Mendiola vs. Court of Appelas, NLRC,G.R. No. 159333,July 31, 2006) Employers are accorded rights and privileges to assure their self-determination and independence and reasonable return of capital. This mass of privileges comprises the socalled management prerogatives. In this connection, the rule is that good faith is always presumed. As long as the companys exercise of the same is in good faith to advance its interest and not for purpose of defeating or circumventing the rights of employees under the law or a valid agreement, such exercise will be upheld.(Skippers United Pacific, Inc. and J.P. Samartzsis Maritime Enterprises Co., S.A., vs. Jerry Maguad and Porferio Ceudadano,G.R. No. 166363,August 15, 2006) In this case, the main argument of petitioner is that the transfers were an act of management right and prerogative and respondents should not complain about such transfers since from the beginning of their employment, they (respondents) signified their willingness to be transferred to any of petitioners branches as shown in the Information Sheet each of them accomplished as a pre-requisite for employment. Be that as it may, petitioner must show that the transfer was done in good faith. As stated in Urbanes, Jr. v. Court of Appeals, [t]he management prerogative to transfer personnel must be exercised without grave abuse of discretion and putting to mind the basic elements of justice and fair play. There must be no showing that it is unnecessary, inconvenient and prejudicial to the displaced employee. (Star Paper Corporation vs Carlito Espiritu, et al.,G.R. NO. 154006,November 2, 2006) In Gold City Integrated Port Service, Inc. v. National Labor Relations Commission, this Court, passing on the use of the word may in the immediately quoted provision, held that [t]he law . . . grants the employer the option of declaring a union officer who participated in an illegal strike as having lost his employment. Reinstatement of a striker or retention of his employment, despite his participation in an illegal strike, is a management prerogative which this Court may not supplant. (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006)
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National Labor Relations Commission Limitations to the Exercise of Management Prerogative Nonetheless, as correctly pointed out by the Court of Appeals, there are limits to the management prerogative. While it may be conceded that management is in the best position to know its operational needs, the exercise of management prerogative cannot be utilized to circumvent the law and public policy on labor and social justice. That prerogative accorded management should not defeat the very purpose for which our labor laws exist: to balance the conflicting interests of labor and management. By its very nature, management prerogative must be exercised always with the principles of fair play and justice. In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. The employer bears the burden of proving that the transfer of the employee has complied with the foregoing test. (PLDT, et. al. vs. Alfredo S. Paguio G.R. No. 152689, Alfredo S. Paguio vs. PLDT, et. al. G.R. No. 154072, October 12, 2005) The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. (Emphasis ours.) Along the same vein is this Courts ruling in Metrolab Industries, Inc. vs. RoldanConfesor, to wit: the exercise of management prerogatives was never considered boundless. Thus, in Cruz vs. Medina (177 SCRA 565 [1989]), it was held that managements prerogative must be without abuse of discretion All these point to the conclusion that the exercise of managerial prerogatives is not unlimited. It is circumscribed by limitations found in law, a collective bargaining agreement, or the general principles of fair play and justice (University of Sto. Tomas v. NLRC, 190 SCRA 758 [1990]) (Emphasis ours) (Becton Dickinson Phils. Inc. and Wilfredo Joaquin vs. NLRC, et. al.,G.R. Nos. 159969 & 160116, November 15, 2005) Managerial Staff/Supervisor The Court disagrees with the NLRCs finding that petitioner was a managerial employee. However, petitioner was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards. The Implementing Rules of the Labor Code define members of a managerial staff as those with the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of the employer;
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National Labor Relations Commission (2) Customarily and regularly exercise discretion and independent judgment; (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute under general supervision special assignments and tasks; and (4) who do not devote more than 20 percent of their hours worked in a workweek to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2), and (3) above.(Charlito Pearanda Vs. Baganga Plywood Corporation, et al.,G.R. No. 159577. May 3, 2006) Money Claims A seafarer is not a regular employee as defined in Article 280 of the Labor Code. Hence, he is not entitled to full backwages and separation pay in lieu of reinstatement as provided in Article 279 of the Labor Code. Seafarers are contractual employees whose rights and obligations are governed primarily by the POEA Standard Employment Contract for Filipino Seamen, the Rules and Regulations Governing Overseas Employment, and, more importantly, by Republic Act (R.A.) No. 8042, or the Migrant Workers and Overseas Filipinos Act of 1995.[ Ravago v. ESSO Eastern Marine, Ltd., id] While the POEA Standard Employment Contract for Filipino Seamen and the Rules and Regulations Governing Overseas Employment do not provide for the award of separation or termination pay, Section 10 of R.A. 8042 provides for the award of money claims in cases of illegal dismissals, thus: Section 10. Money Claims. x x x x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. x x x The award of salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less, is not an award of backwages or separation pay, but a form of indemnity for the worker who was illegally dismissed. The Labor Arbiter may have mislabeled it as separation pay, nonetheless, the award was made in conformity with law.(Skippers United Pacific, Inc. and J.P. Samartzsis Maritime Enterprises Co., S.A., vs. Jerry Maguad and Porferio Ceudadano,G.R. No. 166363,August 15, 2006) Money Claims arising from CBA
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National Labor Relations Commission Thus, as the law indubitably precludes the Labor Arbiter from enforcing money claims arising from the implementation of the CBA, the CBA herein complementarily recognizes that it is the Voluntary Arbitrators which have jurisdiction to hear the claim. The Labor Arbiter correctly refused to exercise jurisdiction over Del Montes cross-claim, and the Court of Appeals would have no basis had it acted differently. At the same time, even as we affirm the award of backwages against Del Monte, our ruling should not operate to prejudice in any way whatever causes of action Del Monte may have against ALU, in accordance with the CBA. (Del Monte Philippines Inc. and Warfredo C. Balandra, vs Mariano Saldivar, et al.,G.R. No. 158620,October 11, 2006) Corporate Officers not liable for money claims In this case, there is no basis from which it may be deduced that Bondoc, as manager of petitioner, is also a corporate officer such that he may be held liable for the money claims awarded in favor of respondents. Even assuming that he is a corporate officer, still, there is no showing that he acted with evident malice and bad faith. Bondoc may have signed and approved the payrolls; nevertheless, it does not follow that he had a direct hand in determining the amount of respondents corresponding salaries and other benefits. Bondoc, therefore, should not have been held liable together with petitioner. (Pamplona Plantation Company,vs Ramon Acosta, et al., GR. No. 15319,December 6, 2006) Prescriptive Period Article 291 provides that all money claims arising from employer-employee relations shall be filed within three years from the time the cause of action accrued, otherwise, these shall be forever barred. A cause of action accrues upon the categorical denial of claim. Petitioners cause of action accrued only on January 6, 1998, when Avantgarde denied his claim and so breached its obligation to petitioner. Petitioner could not have a cause of action prior to this because his earlier requests were warded off by indefinite promises. The complaint filed on March 2, 2001 is beyond the three-year period mandated by the Labor Code. (Lauro C. Degamo vs. Avantgarde Shipping Corp., and/or Levy Rabamontan and Sembawang Johnson Mgt. Pte. Ltd.,G.R. No. 154460,November 22, 2005) Regarding prescription, the applicable prescriptive period for the money claims against the respondents is the three year period pursuant to Article 291 of the Labor Code which provides that: ART. 291. Money Claims. All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.(Roberto G. Famanila vs Court of Appeals G.R. No. 150429,August 29, 2006) Motion for Reconsideration Jurisprudence abounds on the subject that a motion for reconsideration is a prerequisite for the filing of a special civil action for certiorari. A literal interpretation of this
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National Labor Relations Commission prerequisite would require a motion for reconsideration of the NLRC decision, which granted a previous motion for reconsideration and reversed a prior decision. After all, the second decision is considered as entirely new. `The reason for requiring a motion for reconsideration is to make sure that administrative remedies have been exhausted before a case is appealed to a higher court. It allows the adjudicator a second opportunity to review the case, to grapple with the issues therein, and to decide anew a question previously raised. It is presumed that an administrative agency, if afforded an opportunity to pass upon a matter, will decide the same correctly, or correct any previous error committed in its forum.( Crystal Shipping Inc., and/or A/S Stein Line Bergen vs. Deo P. Natividad, G.R. No. 154798, October 20, 2005) Before certiorari may be availed of, the petitioner must have filed a motion for the reconsideration of the order or act complained of to enable the tribunal, board, or office concerned to pass upon and correct its mistakes without the intervention of the higher court.(PLDT, INC. vs. Homer Imperial,G.R. No. 149379, June 15, 2006) A motion for reconsideration of an assailed decision is deemed a plain and adequate remedy expressly available under the law. The general rule is that a motion for reconsideration is indispensable before resort to the special civil action for certiorari to afford the court or tribunal the opportunity to correct its error, if any. This rule is subject to certain recognized exceptions, to wit: (a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceeding was ex parte or in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved. None of these exceptions are present in the instant case. Hence, petitioners unjustified failure to file a motion for reconsideration of the decision of the CA before recourse to this special civil action was made calls for the outright dismissal of this case
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National Labor Relations Commission In the present case, the issues raised in respondents petition for certiorari with the CA, i.e., whether there was constructive dismissal and whether respondents are entitled to their monetary claims, were the exact same issues raised before both the Labor Arbiter and the NLRC. The matter of an employers abuse of management prerogatives also involves public interest. Verily, the present case qualifies as an exemption to the general rule; thus, the filing of a motion for reconsideration with the NLRC may be dispensed with. (Star Paper Corporation vs Carlito Espiritu, et al.,G.R. NO. 154006,November 2, 2006) Negative Pregnant By setting forth these defenses, petitioner, in effect, admitted that respondents worked for it, albeit in different capacities. Such allegations are negative pregnants denials pregnant with the admission of the substantial facts in the pleading responded to which are not squarely denied,[7] and amounts to an acknowledgement that respondents were indeed employed by petitioner. (Pamplona Plantation Company,vs Ramon Acosta, et al., GR. No. 15319,December 6, 2006) No Work, No Pay As for petitioners claim of substantial diminution of their salary on account of the divisor used by the University in its computation 314 days, instead of 365 days, this Court finds nothing wrong therewith. Sundays being un-worked and considered unpaid rest days, while regular holidays as well as special holidays considered as paid days, the factor used by the University merely complies with the basic rule in this jurisdiction of no work, no pay. The right to be paid for un-worked days is generally limited to the ten legal holidays in a year. (Arellano University Employees and Workers Union vs Court of Appeals,G.R. No. 139940, September 19, 2006) Overtime Pay With respect, however, to the award of overtime pay, the correct criterion in determining whether or not sailors are entitled to overtime pay is not whether they were on board and can not leave ship beyond the regular eight working hours a day, but whether they actually rendered service in excess of said number of hours. In the present case, the Court finds that private respondent is not entitled to overtime pay because he failed to present any evidence to prove that he rendered service in excess of the regular eight working hours a day. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC,G.R. No. 153031,December 14, 2006)
Payment of Interest on Awards In Eastern Shipping Lines, Inc. v. Court of Appeals, the Court, speaking through the Honorable Justice Jose C. Vitug, laid down the following rules of thumb: I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be
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National Labor Relations Commission held liable for damages. The provisions under Title XVIII on Damages of the Civil Code govern in determining the measure of recoverable damages. II. With regard particularly to an award of interest in the concept of actual or compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code. 2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Article 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. 3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2 above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit. It is obvious that the legal interest of twelve percent (12%) per annum shall be imposed from the time judgment becomes final and executory, until full satisfaction thereof. Therefore, petitioner Bank is liable to pay interest from 28 July 1997, the finality of our Decision in G.R. No. 102467. The Court of Appeals was not in error in imposing the same notwithstanding that the parties were at variance in the computation of respondent Sadacs backwages. What is significant is that the Decision of 13 June 1997 which awarded backwages to respondent Sadac became final and executory on 28 July 1997. (Equitable Banking Corporation vs. Ricardo Sadac,G.R. No. 164772,June 8, 2006) Payslips The Court notes that DIGITEL did not hire petitioners. BALTEL had already employed petitioners when BALTEL entered into the management contract with DIGITEL.
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National Labor Relations Commission We also agree with the Court of Appeals that the fact that DIGITEL uses its payslips does not necessarily imply that DIGITEL pays petitioners salaries. As pointed out by the Court of Appeals, DIGITEL introduced its own financial and accounting systems to BALTEL and it included the use of DIGITELs payslips for accounting purposes. The management contract provides that BALTEL shall reimburse DIGITEL for all expenses incurred in the performance of its services and this includes reimbursement of whatever amount DIGITEL paid or advanced to BALTELs employees.(Emelita Leonardo, et. al. vs. Court of Appeals,G.R. No. 152459 ,June 15, 2006) Petition for Review Be that as it may, a petition for certiorari may be treated as a petition for review under Rule 45. Such move is in accordance with the liberal spirit pervading the Rules of Court and in the interest of substantial justice. As the instant petition was filed within the prescribed fifteen-day period, and in view of the substantial issues raised, the Court resolves to give due course to the petition and treat the same as a petition for review on certiorari. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006) As provided in Sec. 1, Rule 45, the petition for review must be from a judgment or final order or resolution of the CA, Sandiganbayan, Regional Trial Court, and other courts, whenever authorized by law. Since a petition for review is a mode of appeal, the judgment, order, or resolution must be one that completely disposes of the case or of a particular matter in it. It is clear however, that the assailed March 7, 2001 and July 4, 2001 CA Resolutions are merely interlocutory orders or provisional remedies. The aggrieved party must await the final decision in the petition and then appeal from the adverse judgment, in the course of which the party may question the issuance of the interlocutory orders as errors of judgment. As there was still no final judgment from the CA at the time of the filing of the petition, then a petition for review under Rule 45 is not the appropriate remedy. (Nagkahiusang Mamumuo sa Picop Resources Inc et al. vs Court of Appeals, G.R. Nos. 148839-40, November 2, 2006) Piercing the Veil of Corporate Fiction The consistent rulings of the labor arbiter, the NLRC and the appellate court should be respected and petitioners veil of corporate fiction should likewise be pierced. These are based on the following uncontroverted facts: (1) respondent worked with ESIA and petitioner ESSI; (2) his employment with both security agencies was continuous and uninterrupted; (3) both agencies were owned by the Enriquez family and (4) petitioner ESSI maintained its office in the same place where ESIA previously held office. The attempt to make the security agencies appear as two separate entities, when in reality they were but one, was a devise to defeat the law and should not be permitted. Although respect for corporate personality is the general rule, there are exceptions. In appropriate cases, the veil of corporate fiction may be pierced as when it is used as a means to perpetrate a social injustice or as a vehicle to evade obligations. Petitioner was thus correctly ordered to pay respondents retirement under RA 7641, computed from January 1979 up to the time he applied for retirement in July 1997. (Enriquez Security
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National Labor Relations Commission Services,Inc. vs. Victor A. Cabotaje, G.R. No. 147993,July 21, 2006)
POEA Rules THIRD DOCTOR CLAUSE OF THE POEA STANDARD CONTRACT. Section 20 B, paragraph 3 of the POEA Standard Employment Contract reads: 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-designated physician but in no case shall this period exceed one hundred twenty (120) days. For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctors decision shall be final and binding on both parties. (Emphasis supplied)(United Philippine Lines, Inc. and/or Holland America Line Inc. vs. Francisco D. Beseri,GR. No. 165934 ,April 12, 2006) Preliminary Injunction Section 1, Rule 58 of the Rules of Court, as amended, defines a preliminary injunction as an order granted at any stage of an action prior to the judgment or final order requiring a party or a court, agency or a person to refrain from a particular act or acts. Injunction is accepted as the strong arm of equity or a transcendent remedy to be used cautiously as it affects the respective rights of the parties, and only upon full conviction on the part of the court of its extreme necessity. As an extraordinary remedy, injunction is designed to preserve or maintain the status quo of things and is generally availed of to present actual or threatened acts until the merits of the case can be heard. It may be resorted to only by a litigant for the preservation or protection of his rights or interests and for no other purpose during the pendency of the principal action. It is resorted to only when there is a pressing necessity to avoid injurious consequences, which cannot be remedied under any standard compensation. The resolution of an application for a writ of preliminary injunction rests upon the existence of an emergency or of a special recourse before the main case can be heard in due course of proceedings. (Nagkahiusang Mamumuo sa Picop Resources Inc et al. vs Court of Appeals, G.R. Nos. 148839-40, November 2, 2006) Prescriptive Period
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National Labor Relations Commission In the instant case, the proceedings before the PACU were not completed because respondent subsequently filed his complaint for illegal dismissal before the NLRC on March 14, 2001. Hence, it took respondent only 17 days from his last day at petitioners employ to protest his dismissal before the PACU, and another 49 days to file his complaint for illegal dismissal before the NLRC. In Kingsize Manufacturing Corp. v. NLRC, this Court even considered a lapse of nine months before filing a complaint for illegal dismissal a non-issue. Under the law, an employee has four years within which to institute his action for illegal dismissal. An employee who forthwith takes steps to protest his removal from employment cannot, by any stretch of imagination, be said to have abandoned his work. (City Trucking, Inc. / John Edles, vs Antonio Balajadia, G.R. No. 160769,August 9, 2006) Presumption of a Perceived Danger It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but were asked to resign when they married a co-employee. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule without valid justification, the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employees right to security of tenure.(Star Paper Corporation vs. Ronaldo D. Simbol April 12, 2006 Presumption of Regularity of Judicial Proceeding The presumption is that the decision was delivered to a person in his office, who was duly authorized to receive papers for him, in the absence of proof to the contrary. It is likewise a fundamental rule that unless the contrary is proven, official duty is presumed to have been performed regularly and judicial proceedings regularly conducted, which includes the presumption of regularity of service of summons and other notices. The registry return of the registered mail as having been received is prima facie proof of the facts indicated therein. Thus, it was necessary for respondent to rebut that legal presumption with competent and proper evidence. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006) Preventive Suspension The University correctly suspended Baez and Cantillas during the pendency of the administrative investigation. Where the continued employment of an employee poses a serious and imminent threat to the life and property of the employer or his co-employees, preventive suspension is proper. This is especially so where, as here, the employee repeatedly committed acts of misconduct and willful breach of trust.(Estrella S. Baez, et
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National Labor Relations Commission al. vs. De La Salle University,G.R. No. 167177,September 27, 2006) Preventive suspension, which is never obligatory on the part of the employer, may be resorted to only when the continued employment of the employee poses a serious and imminent threat to the life or property of the employer or of his co-workers. The bank points out that the Alfiscar account, through which the anomalous transactions were coursed, was no longer active at the time the fraud was discovered. Clearly, the bank had reason to conclude that the imminence of the threat posed by the employees was not as vital as it would have been had the dubious account still been open. (Romeo C. Cadiz, Carlito Bongkingki and Prisco Gloria IV vs. Court of Appeals and Philippine Commercial International Bank (Now Equitable PCIBank) G. R. No. 153784, October 25, 2005) The Rules are explicit that preventive suspension is justified where the employees continued employment poses a serious and imminent threat to the life or property of the employer or of the employees co-workers. Without this kind of threat, preventive suspension is not proper. In this case, Decorion was suspended only because he failed to attend a meeting called by his supervisor. There is no evidence to indicate that his failure to attend the meeting prejudiced his employer or that his presence in the companys premises posed a serious threat to his employer and co-workers. The preventive suspension was clearly unjustified.( Maricalum Mining Corporation Vs. Antonio Decorion,April 12, 2006) Principle of Shared Responsibility Even if petitioners joining the welga ng bayan were considered merely as an exercise of their freedom of expression, freedom of assembly or freedom to petition the government for redress of grievances, the exercise of such rights is not absolute.[17] For the protection of other significant state interests such as the right of enterprises to reasonable returns on investments, and to expansion and growth[18] enshrined in the 1987 Constitution must also be considered, otherwise, oppression or self-destruction of capital in order to promote the interests of labor would be sanctioned. And it would give imprimatur to workers joining demonstrations/rallies even before affording the employer an opportunity to make the necessary arrangements to counteract the implications of the work stoppage on the business, and ignore the novel principle of shared responsibility between workers and employers[19] aimed at fostering industrial peace. (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006) Project Employee Project Employees as distinguished from Regular Employees In Kiamco vs. NLRC,[5] we held: The principal test for determining whether particular employees are properly characterized as project employees, as distinguished from regular employees, is
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National Labor Relations Commission whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. As defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee. Here, petitioner could not present employment contracts signed by respondents showing that their employment was for the duration of the HCMG or Sogo project. (Grandspan Development Corp., vs. Ricardo Bernardo et. al.,G.R. No. 141464,September 21, 2005) As correctly pointed out by the Court of Appeals, the activity of catching fish is a continuous process and could hardly be considered as seasonal in nature. In Philex Mining Corp. v. National Labor Relations Commission, we defined project employees as those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project has been determined at the time of the engagement of the employee. The principal test for determining whether particular employees are project employees as distinguished from regular employees, is whether or not the project employees were assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employees were engaged for that project. In this case, petitioners have not shown that private respondent was informed that he will be assigned to a specific project or undertaking. As earlier noted, neither has it been established that he was informed of the duration and scope of such project or undertaking at the time of their engagement. More to the point, in Maraguinot, Jr. v. National Labor Relations Commission, we ruled that once a project or work pool employee has been: (1) continuously, as opposed to intermittently, re-hired by the same employer for the same tasks or nature of tasks; and (2) these tasks are vital, necessary and indispensable to the usual business or trade of the employer, then the employee must be deemed a regular employee. In fine, inasmuch as private respondents functions as described above are no doubt usually necessary or desirable in the usual business or trade of petitioner fishing company and he was hired continuously for 12 years for the same nature of tasks, we are constrained to say that he belongs to the ilk of regular employee. Being one, private respondents dismissal without valid cause was illegal. And, where illegal dismissal is proven, the worker is entitled to back wages and other similar benefits without deductions or conditions. (Poseidon Fishing/Terry de Jesus vs. NLRC,G.R. No. 168052,February 20, 2006) Protection to Labor Indeed, while an employer has the prerogative to discipline an erring employee, such right must not be arbitrarily exercised and must yield to the constitutional precept guaranteeing full protection to labor. Transgressions committed by an employee should merit only the corresponding sanction demanded by the situation. Even where there exists an agreement between an employer and his employees regarding dismissal, the State is not precluded from inquiring on whether its strict application would work too harshly on an employee.(Manila Memorial Park Cemetery, Inc. vs.. Enrique B. Lagdameo vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006)
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National Labor Relations Commission In affording full protection to labor, this Court must ensure equal work opportunities regardless of sex, race or creed. Even as we, in every case, attempt to carefully balance the fragile relationship between employees and employers, we are mindful of the fact that the policy of the law is to apply the Labor Code to a greater number of employees. This would enable employees to avail of the benefits accorded to them by law, in line with the constitutional mandate giving maximum aid and protection to labor, promoting their welfare and reaffirming it as a primary social economic force in furtherance of social justice and national development.(Angelina Francisco vs NLRC,G.R. No. 170087, August 31, 2006) Moreover, even granting that Lacerna truly resigned as domestic helper of Low See Ting, the liability of AIMS was not extinguished. The contract of Lacerna as approved by the Philippine Overseas Employment Administration (POEA) reveals that Proxy was her designated principal employer; the agreed salary was HK$3,670.00 a month; and the contract duration was for two years.[12] Since AIMS was the local agency which recruited Lacerna for Proxy, it is solidarily liable with the latter for liabilities arising from her illegal dismissal. To detach itself from the liability of Proxy, AIMS must show by clear and convincing evidence that its contract is limited to Lacernas employment by Low See Ting. However, aside from its bare allegation, AIMS presented no proof to corroborate its claim. On the contrary, it appears that in transferring Lacerna from one employer to another, Proxy did not demand a new placement fee from Lacerna. This only shows that Proxys conduct was in accordance with the original contract executed with AIMS and not on an entirely new and separate agreement entered into in Hong Kong. This interpretation is in accord with the rule that all doubts in the construction of labor contracts should be resolved in favor of the working class. The Constitution mandates the protection of labor and the sympathetic concern of the State for the workers conformably to the social justice policy.[13] Verily, to absolve AIMS from liability based on its unsubstantiated claim that it is not privy to the subsequent employment provided by Proxy for Lacerna would be to undermine the avowed policy of the State. The joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. (Asian International Manpower Services, Inc. (AIMS), vs Court of Appeals and Aniceta Lacerna, G.R. No. 169652, October 9, 2006) All considered, there are serious doubts in the evidence on record that petitioner is a project employee, or that he was terminated for just cause. These doubts shall be resolved in favor of petitioner, in line with the policy of the law to afford protection to labor and construe doubts in favor of labor. (Hermonias L. Liganza vs RBL Shipyard Corp.,G.R. No. 159862,October 17, 2006) Indeed, the rule is that all doubts in the implementation and the interpretation of the Labor Code shall be resolved in favor of labor,[35] in order to give effect to the policy of the State to afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers, and to assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.[36] We reiterate the following pronouncement in Nicario v. National Labor Relations Commission: It is a well-settled doctrine, 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. It
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National Labor Relations Commission is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and writing should be resolved in the formers favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits under the law, which is in consonance with the avowed policy of the State to give maximum aid and protection of labor. (G & M Philippines, Inc vs Romil V. Cuambot,G.R. No. 162308,November 22, 2006) In termination cases, the burden of proof rests upon the employer to show that the dismissal is for a just and valid cause; failure to do so would necessarily mean that the dismissal was illegal. The employers case succeeds or fails on the strength of its evidence and not on the weakness of the employees defense. If doubt exists between the evidence presented by the employer and the employee, the scales of justice must be tilted in favor of the latter. (Remington Industrial Sales Corporation, vs Erlinda Castaneda, G.R. Nos. 169295-96, November 20, 2006) The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment under the fundamental law is that the cause of labor does not prevent us from sustaining the employer when the law is clearly on its side. (Estrellita G. Salazar vs Philippine Duplicators, Inc, G.R. No. 154628, December 6, 2006) Protest Lastly, SJCI asserts that the strike conducted by the 25 employees on May 4, 1998 was illegal for failure to take the necessary strike vote and give a notice of strike. However, we agree with the findings of the NLRC and CA that the protest actions of the Union cannot be considered a strike because, by then, the employer-employee relationship has long ceased to exist because of the previous closure of the high school on March 31, 1998. (St. John Colleges Inc., vs St. John Academy Faculty and Employees Union,G.R. No. 167892 ,October 27, 2006) Unfair Labor Practice In sum, the timing of, and the reasons for the closure of the high school and its reopening after only one year from the time it was closed down, show that the closure was done in bad faith for the purpose of circumventing the Unions right to collective bargaining and its members right to security of tenure. Consequently, SJCI is liable for ULP and illegal dismissal. (St. John Colleges Inc., vs St. John Academy Faculty and Employees Union,G.R. No. 167892 ,October 27, 2006) Quitclaims It has been held that not all quitclaims are per se invalid or against public policy, except (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face. In these cases, the law will step in to annul the questionable transactions. Such quitclaim and release agreements are regarded as ineffective to bar the workers from claiming the full measure of their legal rights.
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National Labor Relations Commission In Samaniego v. NLRC, we ruled that: A quitclaim executed in favor of a company by an employee amounts to a valid and binding compromise agreement between them." Recently, we held that in the absence of any showing that petitioner was "coerced or tricked" into signing the above-quoted Quitclaim and Release or that the consideration thereof was very low, she is bound by the conditions thereof. (C. Planas Commercial &/or Marcial Cohu vs. NLRC, et. al., G.R. No. 144619, November 11, 2005) The validity of quitclaims executed by laborers has long been recognized in this jurisdiction. In Periquet vs. National Labor Relations Commission, this Court ruled that not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement of the claims of the employee, it is binding on the parties and may not later be disowned simply because of a change of mind. Such legitimate waivers resulting from voluntary settlements of laborers claims should be treated and upheld as the law between the parties (Labor Congress of the Philippines vs. NLRC, 292 SCRA 469, 477 [1998]). However, when as in this case, the voluntariness of the execution of the quitclaim or release is put into issue, then the claim of employee may still be given due course. The law looks with disfavor upon quitclaims and releases by employees pressured into signing the same by unscrupulous employers minded to evade legal responsibilities (Labor Congress, supra.). (Emphasis ours.) The factual and legal bases of the Labor Arbiters ruling on the supposed Release and Quitclaim are well established. We cannot subscribe to petitioners reasoning that the foregoing ruling on the validity and binding effect of releases and quitclaims apply only to rank-and-file workers, and find no application to respondent in this case, who happens to be a highly intelligent man who once held the top sales position at petitioner company. There is no nexus between intelligence, or even the position which the employee held in the company when it concerns the pressure which the employer may exert upon the free will of the employee who is asked to sign a release and quitclaim. A lowly employee or a sales manager, as in the present case, who is confronted with the same dilemma of whether signing a release and quitclaim and accept what the company offers them, or refusing to sign and walk out without receiving anything, may do succumb to the same pressure, being very well aware that it is going to take quite a while before he can recover whatever he is entitled to, because it is only after a protracted legal battle starting from the labor arbiter level, all the way to this Court, can he receive anything at all. The Court understands that such a risk of not receiving anything whatsoever, coupled with the probability of not immediately getting any gainful employment or means of livelihood in the meantime, constitutes enough pressure upon anyone who is asked to sign a release and quitclaim in exchange of some amount of money which may be way below what he may be entitled to based on company practice and policy or by law. (Becton Dickinson Phils. Inc. and Wilfredo Joaquin vs. NLRC, et. al.,G.R. Nos. 159969 & 160116, November 15, 2005) Hence, quitclaims signed by our migrant workers, such as the Letters of Indemnity in the instant case, are viewed with strong disfavor. Public policy dictates that they be presumed to have been executed at the behest of the employer. It is the employers duty to prove that such quitclaims were voluntary. The employees acknowledgment of his termination with nary a protest or objection is not enough to satisfy the requirement of
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National Labor Relations Commission voluntariness on his part. (Oriental Shipmanagement Co., Inc., vs. Court of Appeals, Felicisimo S. Cuesta and Wilfredo B. Gonzaga,G.R. No. 153750,January 25, 2006) The Court also finds that the quitclaims executed by the individual petitioners in this case are valid and binding. Indeed, quitclaims executed by employees are commonly frowned upon as being contrary to public policy, and where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or where the terms of settlement are unconscionable on their faces, the law will step in to annul the questionable transactions. However, when such quitclaim was made voluntarily and there is no evidence that the employer was guilty of fraud or intimidation in obtaining such waiver, as in this case, the validity of the quitclaim must be upheld. As the Court held in Magsalin v. National Organization of Working Men.(Ronaldo B. Casimiro et. al vs. Stern Real Estate Inc. Rembrandt Hotel, G.R. No. 162233,March 10, 2006) In exceptional cases, the Court has given effect to quitclaim executed by employees if the employer is able to prove the following requisites: (1) the employee executes a deed of quitclaim voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the quitclaim is credible and reasonable; and (4) the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. In this case, petitioners failed to prove all the foregoing requisites.(Sime Darby Pilipinas, Inc. and Larry C. Dubberly vs. Alfredo Arguilla and Hennry C. Pedrajas,G.R. No. 143542,June 8, 2006) In Periquet v. National Labor Relations Commission, however, we clarified the standards for determining the validity of a waiver, release and quitclaim as follows: Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. . . . In the instant case, when the quitclaim was executed, petitioners appeal before the Court of Appeals was still pending. Since both the Labor Arbiter and the NLRC have previously ruled in respondents favor, petitioner was aware of the slim chances it had before the appellate court. Under these circumstances, when the quitclaim was offered and accepted, petitioner could not deny that the quitclaim was in its own interest. For respondent, it was not so. The Latin maxim renuntiatio non praesumitur, in our view, applies in this instance.(Rizal commercial Banking Corporation, vs. Leonardo Bithao,,G.R. No. 162240,August 29, 2006)
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National Labor Relations Commission It is true that quitclaims and waivers are oftentimes frowned upon and are considered as ineffective in barring recovery for the full measure of the workers right and that acceptance of the benefits therefrom does not amount to estoppel. The reason is plain. Employer and employee, obviously do not stand on the same footing. However, not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of change of mind. It is only where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of the settlement are unconscionable on its face, that the law will step in to annul the questionable transaction. But where it is shown that the person making the waiver did so voluntarily, with full understanding of what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking, as in this case. (Roberto G. Famanila vs. CA, G.R. No. 150429,August 29, 2006) Lastly, it could not be said that the employees in this case are barred from pursuing their claims because of their acceptance of separation pay and their signing of quitclaims. It is settled that quitclaims, waivers and/or complete releases executed by employees do not stop them from pursuing their claims if there is a showing of undue pressure or duress. The basic reason for this is that such quitclaims, waivers and/or complete releases being figuratively exacted through the barrel of a gun, are against public policy and therefore null and void ab initio (ACD Investigation Security Agency, Inc. v. Pablo D. Daquera, G.R. No. 147473, March 30, 2004). In the case at bar, the employees were faced with impending termination. As such, it was but natural for them to accept whatever monetary benefits that they could get. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006) Real Party-in Interest Throughout the proceedings before the Voluntary Arbitrator, that is, from the filing of the position papers up to the filing of the motion for reconsideration, UPMC was duly represented by its counsel, Atty. Archimedes O. Yanto. True it is that Cesarios complaint for illegal dismissal was filed against the corporation and Daniel. It appears obvious to us, however, that Daniel was merely a nominal party in that proceedings, as in fact he was impleaded thereat in his capacity as UPMCs Personnel Superintendent who signed the termination letter. For sure, Cesarios complaint contains no allegation whatsoever for specific claim or charge against Daniel in whatever capacity. As it is, Daniel was not in anyway affected by the outcome of the illegal dismissal case because only the corporation was made liable therein to Cesario. Being not a real party-in-interest, Daniel has no right to file the petition in CA-G.R. SP No. 44450 in behalf of the corporation without any authority from its board of directors. It is basic in law that a corporation has a legal personality entirely separate and distinct from that of its officers and the latter cannot act for and on its behalf without being so authorized by its governing board. (United Paragon Mining Corp. vs. CA, G.R. No. 150959,August 4, 2006) Reinstatement Under Article 279 of the Labor Code, an employee who is unjustly dismissed from
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National Labor Relations Commission work shall be entitled to reinstatement without loss of seniority rights and other privileges, inclusive of allowances, and other benefits or their monetary equivalent from the time the compensation was withheld up to the time of actual reinstatement. In addition, recovery of attorneys fees is reasonable under the circumstances. It is settled that in actions for recovery of wages or where an employee was forced to litigate and incur expenses to protect his rights and interest, he is entitled to an award of attorneys fees. (Premiere Development Bank vs. Elsie Escudero Mantal,G.R. No. 167716,March 23, 2006) Moreover, we have ruled in many instances that reinstatement is no longer viable where the business of the employer has closed, or where the relations between the employer and the employee have been so severely strained that it is not advisable to order reinstatement, or where the employee decides not to be reinstated. Respondent expressly prayed for an award of separation pay in lieu of reinstatement from the very start of the proceedings at the PACU and the NLRC. By so doing, he forecloses reinstatement as a relief by implication. (City Trucking, INC., vs. Antonio Balajadia, G.R. No. 160769,August 9, 2006) Reinstatement means restoration to the former position occupied prior to dismissal or to substantially equivalent position. Reinstatement does not mean promotion. Promotion is based primarily on an employees performance during a certain period. Just because their contemporaries are already occupying higher positions does not automatically entitle respondents to similar positions. (Asian Terminals, Inc., formerly Marina Port Services, Inc., vs Renato P. Villanueva,G.R. No. 143219) Relaxation of the Rules on Payment of Docket Fees In several cases, however, the Court entertained certain exceptions due to the peculiar circumstances attendant in these cases, which warrant a relaxation of the rules on payment of docket fees. It was held in La Salette College v. Pilotin, that the strict application of the rule may be qualified by the following: first, failure to pay those fees within the reglementary period allows only discretionary, not automatic, dismissal; second, such power should be used by the court in conjunction with its exercise of sound discretion in accordance with the tenets of justice and fair play, as well as with a great deal of circumspection in consideration of all attendant circumstances. (Bibiana Farms & Mills, Inc., vs National Labor Relations Commission (5th Division),G.R. NO. 154284, October 27, 2006) Repatriation Petitioners argument that Section 15 does not provide that it shall be primarily responsible for the repatriation of a deceased OFW is specious and plain nitpicking. While Republic Act No. 8042 does not expressly state that petitioner shall be primarily obligated to transport back here to the Philippines the remains of the deceased Razon, nevertheless, such duty is imposed upon him as the statute clearly dictates that the repatriation of remains and transport of the personal belongings of a deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency. The mandatory nature of said obligation is characterized by the legislatures use of the word shall. That the concerned government agencies opted to demand the performance of
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National Labor Relations Commission said responsibility solely upon petitioner does not make said directives invalid as the law plainly obliges a local placement agency such as herein petitioner to bear the burden of repatriating the remains of a deceased OFW with or without recourse to the principal abroad. In this regard, we see no reason to invalidate Section 52 of the omnibus rules as Republic Act No. 8042 itself permits the situation wherein a local recruitment agency can be held exclusively responsible for the repatriation of a deceased OFW. (Equi-Asia Placement, Inc., vs Department of Foreign Affairs (DFA) G.R. No. 152214,September 19, 2006) It is clear under the above-quoted provision that the employer shall have the right to recover the cost of repatriation from the seamans wages and other earnings only if the concerned seaman is validly discharged for disciplinary measures. In the present case, since petitioners failed to prove that private respondent was validly terminated from employment on the ground of desertion, it only follows that they do not have the right to deduct the costs of private respondents repatriation from his wages and other earnings. (PCL Shipping Philippine, Inc. and U-Ming Marine Transport Corporation, vs NLRC,G.R. No. 153031,December 14, 2006) Resignation In termination cases, the employer decides for the employee. It is different in resignation cases for resignation is a formal pronouncement of relinquishment of an office. It is made with the intention of relinquishing the office accompanied by an act of relinquishment. In the instant case, petitioner relinquished his position when he submitted his letter of resignation. His subsequent act of receiving and keeping his requested soft landing financial assistance of P300,000.00, and his retention and use of the car subject of his arrangement with private respondents showed his resolve to relinquish his post. (Roberto T. Domondon, vs.. NLRC, G.R. No. 154376 September 30, 2005) Resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and has no other choice but to dissociate from employment. Resignation is a formal pronouncement or relinquishment of an office, and must be made with the intention of relinquishing the office accompanied by the act of relinquishment. A resignation must be unconditional and with the intent to operate as such. Moreover, the intention to relinquish an office must concur with the overt act of relinquishment. The act of the employee before and after the alleged resignation must be considered to determine whether in fact, he or she intended to relinquish such employment. If the employer introduces evidence purportedly executed by an employee as proof of voluntary resignation and the employee specifically denies the authenticity and due execution of said document, the employer is burdened to prove the due execution and genuineness of such document. (Fortuny Garments/Johnny Co. vs. Elena J. Castro,,G.R. No. 150668,December 15, 2005)
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National Labor Relations Commission Parenthetically, a resignation once accepted by the employer cannot be withdrawn without the consent of the employer. As Intertrod Maritime, Inc. v. NLRC emphasized: Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were reapplying for the job. It will then be up to the employer to determine whether or not his service would be continued. If the employer accepts said withdrawal, the employee retains his job. x x x(Digitel Philippines vs.Mariquit Soriano,G.R. No. 166039 - June 26, 2006) FORCED RESIGNATION There is no question that petitioner violated its contract with respondents. As found by the Labor Arbiter, the NLRC and the Appellate Court, petitioner did not assign them as construction workers for Formosa Plastics Corporation. Instead, they were directed to work as cable tray/pipe tract workers at Shin Kwan Enterprise Co., Ltd. The Labor Arbiter found that respondents decision to resign from their employment were made by force of circumstances not attributable to their own fault, and it was not their fault that they were left out from among those workers who were considered for employment by the foreign employer. Likewise, the NLRC held that respondents decision to go home to the Philippines was justified in view of the evident breach of contract by petitioner, as it clearly appeared that upon their arrival at the jobsite, there was no employer on hand. Clearly, both labor tribunals correctly concluded, as affirmed by the Court of Appeals, that they were forced to resign and to pre-terminate their employment contracts in view of petitioners breach of their provisions. Undoubtedly, the termination of respondents services is without just or valid cause. (JSS Indochina Corporation vs. Gerardo R. Ferrer, et. al. G.R. No. 156381 October 14, 2005) Res Judicata The decision of the NLRC in the unfair labor practice case (NLRC NCR Case No. 00-06-0355-91) is not a bar to the instant case, for the reason that respondents were not parties therein. The principle of res judicata does not apply because one who was not a party to a case is not bound by any decision rendered therein. Only parties in interest in an action are bound by the judgment. Strangers to a case are not bound by the judgment rendered therein and such judgment is not available as an adjudication either against or in favor of such person. For res judicata to apply, there must be identity of parties in both cases. While the requirement does not mean that the parties be physically identical, it is satisfied if there is privity between the parties or their successors-in-interest by title subsequent to the commencement of the previous causes of action, litigating for the same thing, title or capacity. Sunflower Umbrella Manufacturing Co., Inc. v. De Leon, G.R. No. 107349, September 26, 1994, 237 SCRA 153] It must be stressed that there is no privity between the Union, which is the complainant in NLRC NCR Case No. 00-06-0355-91 for unfair labor practice, and the respondents who as complainants below filed the case for
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National Labor Relations Commission illegal dismissal. Although the Union sued for and in behalf of its members, who were at the same time employees of petitioner SDPI, respondents who were employees of SDPI were not members thereof. (Sime Darby Pilipinas, INC. vs. Alfredo Arguilla,G.R. No. 143542,June 8, 2006) The doctrine of res judicata thus lays down two main rules which may be stated as follows: (1) The judgment or decree of a court of competent jurisdiction on the merits concludes the parties and their privies to the litigation and constitutes a bar to a new action or suit involving the same cause of action either before the same or any other tribunal; and (2) Any right, fact, or matter in issue directly adjudicated or necessarily involved in the determination of an action before a competent court in which a judgment or decree is rendered on the merits is conclusively settled by the judgment therein and cannot again be litigated between the parties and their privies whether or not the claim or demand, purpose, or subject matter of the two suits is the same. These two main rules mark the distinction between the principles governing the two typical cases in which a judgment may operate as evidence. In speaking of these cases, the first general rule above stated, and which corresponds to the aforequoted paragraph (b) of Section 49, is referred to as bar by former judgment, while the second general rule, which is embodied in paragraph (c) of the same section, is known as conclusiveness of judgment.(Commander Realty, INC., vs. Freddie Fernandez et.al.,G.R. No. 167945,July 14, 2006) Res judicata literally means, a matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment. Res judicata lays the rule that an existing final judgment or decree rendered on the merits, and without fraud or collusion, by a court of competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in issue in the first suit.[17] The elements of res judicata are: (1) there is a final judgment or order; (2) the court rendering it has jurisdiction over the subject matter and the parties; (3) the judgment or order is on the merits; and (4) there is between the two cases identity of parties, subject matter and causes of action.[18] This Court holds that the Resolution of this Courts Third Division dated 14 February 2005 in G.R. No. 166178 is a final judgment on the merits rendered by a court having jurisdiction over the subject matter and the parties. Moreover, the parties involve in the two cases, to wit: G.R. No. 166177, which is the case under consideration, and G.R. No. 166178 are identical, and this can be gleaned from the title of these two cases, i.e., the former is Herbert Williams v. Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion, while the latter is Days Hotel Philippines, Inc., Omnisource Management, Inc., and Reynaldo Concepcion v. Herbert Williams. There is no doubt that the above-mentioned cases involve exactly the same parties in the same capacity as employers and employee. Hence, the requisite of identity of parties is clearly established. (Herbert Williams, vs Court of Appeals,G.R. No. 166177,December 18, 2006)
Retirement
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National Labor Relations Commission Retirement is a different specie of termination of employment from dismissal for just or authorized causes under Articles 282 and 283 of the Labor Code. While in all three cases, the employee to be terminated may be unwilling to part from service, there are eminently higher standards to be met by the employer validly exercising the prerogative to dismiss for just or authorized causes. In those two instances, it is indispensable that the employer establish the existence of just or authorized causes for dismissal as spelled out in the Labor Code. Retirement, on the other hand, is the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the former. (Cainta Catholic School, et al. Vs. Cainta Catholic School Employees Union,G.R. No. 151021, May 4, 2006). Thus, for the retirement benefits to be exempt from the withholding tax, the taxpayer is burdened to prove the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by the employer; (2) the retiring official or employee has been in the service of the same employer for at least 10 years; (3) the retiring official or employee is not less than 50 years of age at the time of his retirement; and (4) the benefit had been availed of only once. xxx Respondents were qualified to retire optionally from their employment with petitioner. However, there is no evidence on record that the 1993 CBA had been approved or was ever presented to the BIR; hence, the retirement benefits of respondents are taxable. .(IBC 13 vs NOEMI B. AMARILLA, G.R. No. 162775,October 27, 2006) Under the Labor Code, only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and backwages.[23] Since petitioners dismissal was for a just cause, he is not entitled to any retirement benefit. To hold otherwise would be to reward acts of willful breach of trust by the employee. It would also open the floodgate to potential anomalous banking transactions by bank employees whose employments have been extended. Since a banks operation is essentially imbued with public interest, it owes great fidelity to the public it deals with. In turn, it cannot be compelled to continue in its employ a person in whom it has lost trust and confidence and whose continued employment would patently be inimical to the banks interest. While the scale of justice is tilted in favor of workers, the law does not authorize blind submission to the claim of labor regardless of merit. (Dennis D. Sy, vs Metropolitan Bank & Trust Company, G.R. No. 160618,November 2, 2006) Optional Retirement Records show that private respondent was only 48 years old when he applied for optional retirement. Thus he cannot claim optional retirement benefits as a matter of right. His application for optional retirement was subject to the exclusive prerogative and sole option of the shipping company pursuant to the abovecited agreement between the workers and the company. In this regard, no error was committed by the appellate court when it set aside the ruling of the Labor Arbiter and the NLRC granting herein private respondent P253,000 retirement gratuity/separation pay.(Eastern Shipping Lines, Inc., et al. Vs. Dioscoro D. Sedan,G.R. No. 159354. April 7, 2006)
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Rules of Procedure a. Appeal In the present case, it is undisputed that under the NLRC rules, no appeal may be taken from an order denying a motion to dismiss. The NLRC rule proscribing appeal from a denial of a motion to dismiss is similar to the general rule observed in civil procedure that an order denying a motion to dismiss is interlocutory and, hence, not appealable until final judgment or order is rendered. The remedy of the aggrieved party in case of denial of the motion to dismiss is to file an answer and interpose, as a defense or defenses, the ground or grounds relied upon in the motion to dismiss, proceed to trial and, in case of adverse judgment, to elevate the entire case by appeal in due course. In order to avail of the extraordinary writ of certiorari, it is incumbent upon petitioner to establish that the denial of the motion to dismiss was tainted with grave abuse of discretion.] In labor cases, Article 223 of Presidential Decree No. 442, as amended, also known as the Labor Code of the Philippines states: ART. 223. APPEAL Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; In Air Services Cooperative, et al. v. The Court of Appeals, et al., a case where the jurisdiction of the labor arbiter was put in issue and was assailed through a petition for certiorari, prohibition and annulment of judgment before a regional trial court, this Court had the opportunity to expound on the nature of appeal as embodied in Article 223 of the Labor Code, thus: . . . Also, while the title of the Article 223 seems to provide only for the remedy of appeal as that term is understood in procedural law and as distinguished from the office of certiorari, nonetheless, a closer reading thereof reveals that it is not as limited as understood by the petitioners. . .. . . Abuse of discretion is admittedly within the ambit of certiorari and its grant of review thereof to the NLRC indicates the lawmakers intention to broaden the meaning of appeal as that term is used in the Code. For this reason, petitioners cannot argue now that the NLRC is devoid of any corrective power to rectify a supposed erroneous assumption of jurisdiction by the Labor Arbiter. . . . Since the legislature had clothed the NLRC with the appellate authority to correct a claimed erroneous assumption of jurisdiction on the part of the labor arbiter a case of
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National Labor Relations Commission grave abuse of discretion - the remedy availed of by petitioner in this case is patently erroneous as recourse in this case is lodged, under the law, with the NLRC.(Metro Drug Distribution Inc. vs. Netro Drug Corp. Employees Association, G.R. No. 142666,September 26, 2005) Transfer of Venue The petition to change or transfer venue filed by Westmont and Unilab with the NLRC is not the proper remedy to assail the Labor Arbiters Order denying their motion to dismiss. Such Order is merely interlocutory, hence, not appealable. Section 3, Rule V of the Rules of Procedure of the NLRC, as amended, provides: SECTION 3. Motion to Dismiss. On or before the date set for the conference, the respondent may file a motion to dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by prior judgment, prescription or forum shopping, shall be immediately resolved by the Labor Arbiter by a written order. An order denying the motion to dismiss or suspending its resolution until the final determination of the case is not appealable. In Indiana Aerospace University v. Commission on Higher Education, we held: An order denying a motion to dismiss is interlocutory, and so the proper remedy in such a case is to appeal after a decision has been rendered. Assuming that the petition to change or transfer venue is the proper remedy, still we find that the Court of Appeals did not err in sustaining the Labor Arbiters Order denying the motion to dismiss. Section 1(a), Rule IV of the NLRC Rules of Procedure, as amended, provides: SECTION 1. Venue. (a) All cases which Labor Arbiters have authority to hear and decide may be filed in the Regional Arbitration Branch having jurisdiction over the workplace of the complainant/petitioner. For purposes of venue, workplace shall be understood as the place or locality where the employee is regularly assigned when the cause of action arose. It shall include the place where the employee is supposed to report back after a temporary detail, assignment or travel. In the case of field employees, as well as ambulant or itinerant workers, their workplace is where they are regularly assigned, or where they are supposed to regularly receive their salaries/wages or work instructions from and report the results of their assignment to, their employers.(Westmont Pharmaceuticals, Inc. United Laboratories Inc. vs. Ricardo C. Samaniego,G.R. Nos. 14665354,G.R. Nos. 147407-08,February 20, 2006)
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Rule on Technicality A careful scrutiny of the facts and circumstances of these consolidated cases warrants liberality in the application of technical rules and procedure. We agree with the NLRC that substantial justice is best served by allowing the petition for relief despite procedural defect of filing the motion for reconsideration three days late, for to rule otherwise, a greater injustice would be done to ITC by ordering it to reinstate the employees to their former positions that no longer exist due to valid and legitimate cessation of business and pay huge judgment award. (Industrial Timber Corporation et. al. vs. Virgilio Ababon et al. G.R. No. 164518, G.R. No. 164965,January 25, 2006) That administrative quasi-judicial bodies like the NLRC are not bound by technical rules of procedure in the adjudication of cases does not mean that the basic rules on proving allegations should be entirely dispensed with. A party alleging a critical fact must still support his allegation with substantial evidence. Any decision based on unsubstantiated allegation cannot stand as it will offend due process. xxx the liberality of procedure in administrative actions is subject to limitations imposed by basic requirements of due process. As this Court said in Ang Tibay v. CIR, the provision for flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative value. More specifically, as held in Uichico v. NLRC: It is true that administrative and quasi-judicial bodies like the NLRC are not bound by the technical rules of procedure in the adjudication of cases. However, this procedural rule should not be construed as a license to disregard certain fundamental evidentiary rules. While this Court commiserates with petitioners plight, absent substantial evidence from which reasonable basis for the grant of death benefits prayed for can be drawn, it is left with no alternative but to deny their petition.(Sps. Ponciano Aya-ay, Sr. and Clemencia Aya-ay, vs. Arpaphil Shipping Corp., and Magna Marine, INC., G.R. No. 155359,January 31, 2006) The Court likewise holds that the NLRC did not err in admitting the receipts and other evidence attached to the Memorandum of Appeal of respondents. In Tanjuan v. Philippine Postal Savings Bank, Inc., where this Court was confronted with the similar question, i.e., whether proof of business losses may be admitted on appeal before the NLRC, we declared that the NLRC is not precluded from receiving evidence on appeal because technical rules of procedure are not binding in labor cases, which rule applies to both employer and employee. Moreover, the fact that evidence was not presented before the Labor Arbiter will not justify its outright rejection, particularly since such evidence is absolutely necessary to resolve the issue of whether retrenched employees were validly terminated. No less than the Labor Code directs labor officials to use all reasonable
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National Labor Relations Commission means to ascertain the facts speedily and objectively, with little regard to technicalities or formalities, while Section 10, Rule VII of the New Rules of Procedure of the NLRC provides that technical rules are not binding. Indeed, the application of technical rules of procedure may be relaxed in labor cases to serve the demand of substantial justice. (Ronaldo B. Casimiro, et al. vs. Stern real Estate Inc. Rembrandt,G.R. No. 162233,March 10, 2006) In the same vein, in NYK International Knitwear Corporation v. National Labor Relations Commission, this Court did not mince words in ruling that for this Court to issue the extraordinary writ of certiorari to reverse the Court of Appeals denial of a petition on technical grounds there must exist compelling reason to do so. Thus- The members of this Court are not unmindful that in exceptional cases and for compelling reasons, we have disregarded similar procedural defects in order to correct a patent injustice made. However, petitioners here have not shown any compelling reason for us to relax the rule. Petitioners are hereby reminded that the right to file a special civil action of certiorari is neither a natural right nor a part of due process. A writ of certiorari is a prerogative writ, never demandable as a matter of right, never issued except in the exercise of judicial discretion. Hence, he who seeks a writ of certiorari must apply for it only in the manner and strictly in accordance with the provisions of the law and the Rules.(Tower Industrial Sales, et al. Vs. Hon. Court of Appeals, et al.G.R. No. 165727. April 19, 2006)
Further, the proceedings before the Labor Arbiter and the NLRC are non-litigious in nature. As such, the proceedings before it are not bound by the technical niceties of the law and procedure and the rules obtaining in courts of law, as dictated by Article 221 of the Labor Code:
ART. 221. Technical rules not binding and prior resort to amicable settlement. In any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing in courts of law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process. (Genuino Ice Company, Inc. vs. Alfonso S. Magpantay, G.R. No. 147790,June 27, 2006)
In Roquero v. Philippine Airlines, Inc., we resolved the same issue as follows:
We reiterate the rule that technicalities have no room in labor cases where the Rules of Court are applied only in a suppletory manner and only to effectuate the objectives of the Labor Code and not to defeat them.[ Durban Apartments
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National Labor Relations Commission Corporation v. Catacutan, G.R. No. 167136, December 14, 2005, 477 SCRA 801, 808.] Hence, even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court. On the other hand, if the employee has been reinstated during the appeal period and such reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received for he is entitled to such, more so if he actually rendered services during the period. (Air Philippines Corporation, vs Enrico E. Zamora,G.R. NO. 148247,August 7, 2006)
This date is material for it would determine whether his motion for reconsideration of the said Resolution was seasonably filed. While there are exceptional cases where we set aside procedural defects to correct a patent injustice, however, petitioner failed to satisfy the Court of Appeals that the noncompliance with the requirement is justified. We have ruled time and again that litigants should have the amplest opportunity for a proper and just disposition of their cause free, as much as possible, from the constraints of procedural technicalities. But equally settled is the rule that, save for the most persuasive of reasons, strict compliance with procedural rules is enjoined to facilitate the orderly administration of justice. (Dr. Rey C. Tambong, vs R. Jorge Development Corporation, No. 146068, August 31, 2006 In the case at bar, the NLRC did not commit a grave abuse of its discretion in giving Article 223 of the Labor Code a liberal application to prevent the miscarriage of justice. Technicality should not be allowed to stand in the way of equitably and completely resolving the rights and obligations of the parties. We have held in a catena of cases that technical rules are not binding in labor cases and are not to be applied strictly if the result would be detrimental to the workingman. (ABS-CBN Broadcasting Corporation vs Marlyn Nazareno, et al. G.R. No. 164156,September 26, 2006) The procedural flaw notwithstanding, especially considering that this is a labor case and the decision of the NLRC differs from that of the Labor Arbiter, the ends of substantial justice would be better served by relaxing the application of technical rules of procedure. (Ma. Ellaine D. Panaga vs Court of Appeals,G.R. No. 164816,September 27, 2006,) Petitioner, however, appeals for liberality. Petitioner does not deserve it. Liberality is not a mantra that, once chanted, will cast away all the infirmities of a petition. Invocation of liberality must be coupled with a showing that there has been a substantial or subsequent compliance with all the technical requirements or that it will serve the higher interest of justice that the petition be given due course and decided on the merits. Petitioner has not shown any earnest, even if belated, effort to comply. Instead, it has obstinately clung to the mistaken notion that its attachments were certified true copies of the assailed NLRC Decision and Resolution. In its Motion for Reconsideration from the
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National Labor Relations Commission March 25, 2002 CA Resolution, petitioner made no effort to rectify its error by attaching the real certified true copies of the needed documents. Even in the present Petition, copies of the assailed NLRC Decision and Resolution petitioners attached are also xerox copies of the certified true copies thereof. There is no basis at all for us to suspend enforcement of the technical requirements of the Rules and allow its Petition. (Pinakamasarap Corporation vs. National Labor Relations Commission,G.R. No. 155058, September 26, 2006) Rules of procedures are intended to promote, not to defeat, substantial justice and, therefore, they should not be applied in a very rigid and technical sense. The exception is that, while the Rules are liberally construed, the provisions with respect to the rules on the manner and periods for perfecting appeals are strictly applied. As an exception to the exception, these rules have sometimes been relaxed on equitable considerations. Also, in some cases the Supreme Court has given due course to an appeal perfected out of time where a stringent application of the rules would have denied it, but only when to do so would serve the demands of substantial justice and in the exercise of equity jurisdiction of the Supreme Court. (Bibiana Farms & Mills, Inc., vs National Labor Relations Commission (5th Division),G.R. NO. 154284, October 27, 2006) Time and again, we have said the lack of verification is merely a formal defect that is neither jurisdictional nor fatal. In a proper case, the court may order the correction of the pleading or act on the unverified pleading, if the attending circumstances are such that strict compliance with the rule may be dispensed with in order to serve the ends of justice. [12] It should be stressed that rules of procedure are merely tools designed to facilitate the attainment of justice. They were conceived and promulgated to effectively aid the court in the dispensation of justice. Courts cannot be enslaved by technical rules, shorn of judicial discretion. In rendering justice, courts have always been, as they ought to be, conscientiously guided by the norm that on the balance, technicalities take a backseat vis-vis substantive rights, and not the other way around. Thus, if the application of the Rules would tend to frustrate rather than promote justice, it is always within the Courts power to suspend the rules or except a particular case from its operation.[13] This is more so in labor cases where social justice should be emphasized. In light of the circumstances of this case, we find that the lack of verification may be excused, so that the case could be decided on its merits. (Jaime H. Ballao vs Court of Appeals,G.R. No. 162342,October 11, 2006) In the case at bar, applying the Rules strictly would result in the pernicious delay sought to be avoided. At stake is the protection of the rights of almost a hundred employees to the satisfaction of a judgment that has become final and executory in a decision rendered by us more than seven (7) years ago. A scheme to thwart the execution of our final and executory decision is extant in the records. Moreover, barring the instant petition on technical grounds would leave the workers without recourse since the subject real properties were levied due to the insufficiency of judgment debtor CTCI's money and personal properties to satisfy the decision sought to be executed. (Jang Lim, et al., vs Court of Appeals, G.R. No. 149748,November 16, 2006) Security of Tenure We, therefore, uphold the finding of the Court of Appeals that respondents are
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National Labor Relations Commission petitioners regular employees. As such, they are entitled to security of tenure and can only be dismissed for a just or authorized cause, as provided by Article 279 of the Labor Code, as amended, thus: "ARTICLE 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement."(Grandspan Development Corp., vs. Ricardo Bernardo, et. al.,G.R. No. 141464,September 21, 2005) We reiterate, however, that probationary employees enjoy security of tenure, but only within the period of probation. Likewise, an employee on probation can only be dismissed for just cause or when he fails to qualify as a regular employee in accordance with the reasonable standards made known by the employer at the time of his hiring. Upon expiration of their contract of employment, academic personnel on probation cannot automatically claim security of tenure and compel their employers to renew their employment contracts. In the instant case, petitioner, did not attain permanent status and was not illegally dismissed. As found by the NLRC, her contract merely expired. Lastly, we find that petitioner had already signed a valid quitclaim, discharge and release which bars the present action. This Court has held that not all quitclaims are per se invalid or against public policy, except (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person, or (2) where the terms of settlement are unconscionable on their face. In this case, there is no showing that petitioner was coerced into signing the quitclaim. In her sworn quitclaim, she freely declared that she received to her full satisfaction all that is due her by reason of her employment and that she was voluntarily releasing respondent Ateneo from all claims in relation to her employment. Nothing on the face of her quitclaim has been shown as unconscionable.(Lolita R. Lacuesta, vs Ateneo DE Manila University, Dr. R. Leovino Ma. Garcia and Dr. Marijo Ruiz,G.R. No. 152777, December 9, 2005) Ostensibly, in the case at bar, at different times, private respondent occupied the position of Chief Mate, Boat Captain, and Radio Operator. In petitioners interpretation, however, this act of hiring and re-hiring actually highlight private respondents contractual status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of employment changed when the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners business or trade. (Poseidon Fishing vs. NLRC, G.R. No. 168052,February 20, 2006) Third. We take occasion to stress that there must be a reasonable proportionality
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National Labor Relations Commission between the offense and the gravity of the penalty. At the time of the dismissal, private respondent had worked for the petitioner-spouses and/or GST Fishing Enterprises for 24 years, beginning on March 1974 as laborer, and rising from the ranks to become patron. Verily, not every case of insubordination or willful disobedience by an employee of a lawful work-connected order of the employer is reasonably penalized with dismissal. Dismissal has always been regarded as the ultimate penalty. Security of tenure is one of the highest rights of workers aptly protected and guaranteed by the Constitution, specifically embodied in Section 3, Article XIII thereof.(Dr. Danilo T. Ting and Mrs. Elena Ting vs. Court of Appeals,G.R. No. 146174,July 12, 2006) The Constitution looks with compassion on the workingman and its intent in protecting his rights. A workers employment is property in a constitutional sense and while the Court recognizes the right of an employer to terminate the services of an employee for a just or authorized cause, the dismissal of an employee must be made within the parameters of law and pursuant to the tenets of equity and fair play. An employers power to discipline his employees must not be exercised in an arbitrary manner as to erode the constitutional guarantee of security of tenure. (Nelson Zagala and Feliciano M. Angelesvs. Mikado PhilippinesCorporation ,G.R. No. 160863, September 27, 2006) Respondents alleged that it hired contractual employees majority of whom were those retrenched because of the increased but uncertain demand for its publications. Respondent did this almost immediately after its alleged retrenchment program. Another telling feature in the scheme of respondent is the fact that these contractual employees were given contracts of five (5) month durations and thereafter, were offered regular employment with salaries lower than their previous salaries. The Labor Code explicitly prohibits the diminution of employees benefits. Clearly, the situation in the case at bar is one of the things the provision on security of tenure seeks to prevent. (Philippine Journalists, Inc.,vs. National Labor Relations Commission,G.R. No. 166421,September 5, 2006) Surely, length of time is not the controlling test for project employment. Nevertheless, it is vital in determining if the employee was hired for a specific undertaking or tasked to perform functions vital, necessary and indispensable to the usual business or trade of the employer.[29] Here, respondent had been a project employee several times over. His employment ceased to be coterminous with specific projects when he was repeatedly re-hired due to the demands of petitioners business. Where from the circumstances it is apparent that periods have been imposed to preclude the acquisition of tenurial security by the employee, they should be struck down as contrary to public policy, morals, good customs or public order.[30] (Hermonias L. Liganza vs RBL Shipyard Corp.,G.R. No. 159862,October 17, 2006) As a regular employee, respondent enjoys the right to security of tenure under Article 279[38] of the Labor Code and may only be dismissed for a just[39] or authorized[40] cause, otherwise the dismissal becomes illegal and the employee becomes entitled to reinstatement and full backwages computed from the time compensation was withheld up to the time of actual reinstatement. (Remington Industrial Sales Corporation, vs Erlinda Castaneda, G.R. Nos. 169295-96, November 20, 2006)
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National Labor Relations Commission The contrivances may be many and the schemes ingenious and imaginative. But this Court will not hesitate to put pen to a line and defend the workers right to be secure in his (or her) proprietary right to regular employment and his right to a secure employment, viz, one that is free from fear and doubt, that anytime he could be removed, retrenched, his contract not renewed or he might not be re-hired. The ramifications may seem trivial, but we cannot allow the ordinary Filipino workers right to tenurial security to be put in jeopardy by recurrent but abhorrent practices that threaten the very lives of those that depend on him. (San Miguel Corporation, vs. NLRC,G.R. No. 147566,December 6, 2006) Separate Corporate Personality In the present case, the corporations have basically the same incorporators and directors and are headed by the same official. Both use only one office and one payroll and are under one management. In their individual Affidavits, respondents allege that they worked under the supervision and control of Petitioner Bondoc -- the common managing director of both the petitioner-company and the leisure corporation. Some of the laborers of the plantation also work in the golf course. Thus, the attempt to make the two corporations appear as two separate entities, insofar as the workers are concerned, should be viewed as a devious but obvious means to defeat the ends of the law. Such a ploy should not be permitted to cloud the truth and perpetrate an injustice. (Pamplona Plantation Company,vs Ramon Acosta, et al., GR. No. 15319,December 6, 2006) Separation Pay However, the circumstances obtaining in this case do not warrant the reinstatement of respondents. Antagonism caused a severe strain in the parties employer-employee relationship. Thus, a more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher, (with a fraction of at least six (6) months being considered as one (1) whole year), in addition to their full backwages, allowances and other benefits.(Grandspan Development Corporation, vs. Ricardo Bernardo, et. al.,G.R. No. 141464,September 21, 2005) The sole issue in this case --- whether a validly dismissed employee like respondent is entitled to an award of separation pay --- has already been squarely settled as early as 1988 in the leading case of Philippine Long Distance Telephone Co. vs. NLRC, wherein it was stated, viz.: We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. (Ha Yuan Restaurant vs National Labor Relations Commission and Juvy Soria,G.R. No. 147719,January 27, 2006) But still, petitioners insist that since respondent already received her separation benefits, she can no longer claim that they coerced her to retire. On this point, the Court
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National Labor Relations Commission of Appeals ruled that employees who receive their separation pay are not barred from contesting the legality of their dismissal from the service and their acceptance of those benefits would not amount to estoppel. We agree. Otherwise, employees who have been forced to resign and accept their separation pay can no longer resort to legal remedies. (Amkor Technology Philippines, Inc. vs Nory A. Juangco, G.R. No. 166507, September 27, 2006) In the case at bar, we agree with the findings of the Court of Appeals that the cause for petitioners dismissal did not reflect on her moral character. The appellate court said: In the instant case, the cause of petitioners dismissal was the violation of company policy on releasing stocks without any cash slip or charge slip. While petitioner was found to have violated the said offense, the same however, does not reflect on her moral character. The Court accords due consideration to petitioners honesty in informing the branch clerks of the items she took out and her further act of paying the value of the items. However and to reiterate, her honesty does not absolve her from any liability she may have incurred for violating a known company policy. The Court also considers [the] fact that petitioners record of employment with private respondent for more than five (5) years is entirely unblemished. Hence, the consequent award of separation pay. (Loida V. Malabago vs National Labor Relations Commission,G.R. No. 165465,September 13, 2006) Explaining the policy distinction in Article 283 of the Labor Code, this Court, in Cama v. Jonis Food Services, Inc., declared:[16] The Constitution, while affording full protection to labor, nonetheless, recognizes the right of enterprises to reasonable returns on investments, and to expansion and growth. In line with this protection afforded to business by the fundamental law, Article 283 of the Labor Code clearly makes a policy distinction. It is only in instances of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer. Ours is a system of laws, and the law in protecting the rights of the working man, authorizes neither the oppression nor the selfdestruction of the employer. x x x (Emphasis supplied) (Galaxie Steel Workers Union (GSWU-NAFLU-KMU), vs. NLRC,G.R. No. 165757,October 17, 2006) Here, the petitioners and other employees legally separated were in fact given termination or separation pay despite the staggering loss sustained by the Bank. They were given a very good bargain in the compromise agreement. They, therefore, have no reason to complain. Without the subject compromise agreement, they would not have received any separation pay in light of our ruling in State Investment House, Inc. v. CA,[19] and North Davao Mining Corporation v. NLRC,[20] where we held that in cases of serious losses or financial reverses, the Labor Code does not impose any obligation upon the employer to pay separation benefits, for obvious reasons. (Lady Lydia CornistaCreated by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION
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National Labor Relations Commission Domingo,et al. vs.NLRC, G.R. No. 156761,October 17, 2006) Since the circumstances obtaining in this case do not warrant private respondents reinstatement in the light of the antagonism generated by this litigation which must have caused a severe strain in the parties' employer-employee relationship, an award of separation pay in lieu of reinstatement, equivalent to one month pay for every year of service, in addition to full backwages, allowances, and other benefits or the monetary equivalent thereof, is in order. The award of attorneys fees is sanctioned by law and must be upheld. (Petron Corporation vs National Labor Relations Commission,G.R. No. 154532, October 27, 2006) Considering, however, the supervening event that SMCs Magnolia Division has been acquired by another entity, it appears that private respondents reinstatement is no longer feasible. Instead, he should be awarded separation pay as an alternative. Likewise, owing to petitioners bad faith, it should be held liable to pay damages for causing undue injury and inconvenience to the private respondent in its contractual hiring-firing-rehiring scheme. (San Miguel Corporation, vs. NLRC,G.R. No. 147566,December 6, 2006) Social Justice Her cause of dismissal amounting to a serious misconduct, respondent is not entitled to an award of separation pay. As further stated in Philippine Long Distance Telephone Co. vs. NLRC: The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. At best it may mitigate the penalty but it certainly will not condone the offense. Compassion for the poor is an imperative of every humane society but only when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Those who invoke social justice may do so only if their hands are clean and their motives blameless and not simply because they happen to be poor. This great policy of our Constitution is not meant for the protection of those who have proved they are not worthy of it, like the workers who have tainted the cause of labor with the blemishes of their own character. (Ha Yuan Restaurant vs National Labor Relations Commission and Juvy Soria,G.R. No. 147719,January 27, 2006) It must be remembered at all times that the Philippine Constitution, while inexorably committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed, we should not be unmindful of the legal norm that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.(Skippers United Pacific vs. Jerry Maguad,G.R. No. 166363,August 15, 2006)
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National Labor Relations Commission It should be remembered that The Philippine Constitution, while inexorably committed towards the protection of the working class from exploitation and unfair treatment, nevertheless mandates the policy of social justice so as to strike a balance between an avowed predilection for labor, on the one hand, and the maintenance of the legal rights of capital, the proverbial hen that lays the golden egg, on the other. Indeed, we should not be unmindful of the legal norm that justice is in every case for the deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence. (Cebu Metal Corporation vs Gregorio Robert Saliling, et al.,G. R. No. 154463,September 5, 2006) Solidary Liability The Solidary Liability under Section of the Omnibus Rules Implementing the Migrant Workers and Overseas and Filipino Act of 1995, will only apply if there is an existing valid contract and signed by the parties concerned.(Godofredo Morales vs Skills International Company, G.R. No. 149285,August 30, 2006) Also, according to Section 10, paragraph 2 of Republic Act No. 8042, the agency which deployed the employees whose employment contract were adjudged illegally terminated, shall be jointly and solidarily liable with the principal for the money claims awarded to the aforesaid employees. Therefore, petitioner Skippers Pacific United, Inc. as the manning agency which hired the respondents is jointly and solidarily liable with its principal and co-petitioner J.P. Samartzsis Maritime Enterprises Co., S.A., for the money claims of the respondents. The Affidavits of Assumption of Responsibility, though valid as between petitioner Skippers United Pacific Inc. and the other two manning agencies, are not enforceable as against the respondents because the latter were not parties to those agreements. The provisions of the POEA Rules and Regulations are clear enough that the manning agreement extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to the said recruitment agreement. Hence, despite the execution of the aforementioned affidavits, petitioner Skippers United Pacific Inc. cannot exempt itself from the liabilities and responsibilities towards the respondents. (Skippers United Pacific vs. Jerry Maguad,G.R. No. 166363,August 15, 2006) Settled is the rule in this jurisdiction that a corporation is invested by law with a legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. Thus, obligations incurred by corporate officers acting as corporate agents are not theirs but the direct accountabilities of the corporation they represent. True, solidary liabilities may at times be incurred by corporate officers, but only when exceptional circumstances so warrant. For instance, in labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of employment if done with malice or in bad faith. (Petron Corporation vs National Labor Relations Commission,G.R. No. 154532, October 27, 2006) In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed
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National Labor Relations Commission under the contract, in the same manner and extent that he is liable to employees directly employed by him. xxx Art. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer contracts with an independent contractor for the performance of any work, task, job or project. xxx Art. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers. (7K Corporation vs NLRC,G.R. No. 148490,November 22, 2006) For the security guards, the actual source of the payment of their wage differentials and premium for holiday and rest day work does not matter as long as they are paid. This is the import of Eparwa and LDCUs solidary liability. Creditors, such as the security guards, may collect from anyone of the solidary debtors. Solidary liability does not mean that, as between themselves, two solidary debtors are liable for only half of the payment. (Eparwa Security & Janitorial Services, Inc., vs Liceo De Cagayan University,G.R. No. 150402, November 28, 2006) Solidary Liability of Contractor and Sub-Contractor In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. (Eparwa Security & Janitorial Services, Inc., vs Liceo De Cagayan University,G.R. No. 150402, November 28, 2006) Strained Relationship Where the relationship of employer to employee is so strained and ruptured as to preclude a harmonious working relationship should reinstatement of the employee be decreed, the latter should be afforded the right to separation pay where the employer does not have to endure the continued services of the employee in whom it has lost confidence. (Wah Yuen Restaurant vs. Primo Jayona,G.R. No. 159448,December 16, 2005) However, the circumstances obtaining in this case do not warrant the reinstatement of Samaniego. Antagonism caused a severe strain in the relationship between him and his employer. A more equitable disposition would be an award of separation pay
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National Labor Relations Commission equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six [6] months being considered as one [1] whole year), in addition to his full backwages, allowances and other benefits. (WestmontPharmaceuticals Inc., United Laboratories Inc. vs. Ricardo C. Samaniego vs. Westmont Pharmaceuticals Inc.,G.R. Nos. 147407-08,February 20, 2006) As expounded by this Court in Kunting v. National Labor Relations Commission Strained relations, as amplified in Employees Association of the Philippine American Life Insurance Company v. NLRC, 199 SCRA 628 [1991], must be of such a nature or degree as to preclude reinstatement. But, where the differences between the parties are neither personal nor physical, nor serious, then there is no reason why the illegally dismissed employee should not be reinstated rather than simply given separation pay and backwages. More so if the cause of the perceived strained relations is the filing of a complaint for illegal dismissal. As the Court held in GlobeMackay Cable and Radio Corporation v. NLRC, 206 SCRA 701 [1992], citing Anscor Transport and Terminals v. NLRC, 190 SCRA 147 [1990]; Sibal v. Notre Dame of Greater Manila, 182 SCRA 538 [1990]: Obviously, the principle of strained relations cannot be applied indiscriminately. Otherwise, reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature. Besides, no strained relations should arise from a valid and legal act of asserting ones right; otherwise an employee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his employer had already become strained.(Tower Industrial Sales, et al. Vs. Hon. Court of Appeals, et al.G.R. No. 165727. April 19, 2006) However, the state of affairs obtaining in this case do not justify the reinstatement of petitioner. Discernible resentment and animosity caused a severe strain in the relationship between him and the private respondent. A more equitable disposition would be an award of separation pay equivalent to at least one month pay, or one month pay for every year of service, whichever is higher (with a fraction of at least six months being considered as one whole year), in addition to his full backwages, allowances and other benefits. (Paulino Aliten vs U-NEED Lumber & Hardware, and Court of Appeals,G.R. No. 168931,September 12, 2006) Strike It is doctrinal that the exercise of the right of private sector employees to strike is not absolute. Thus Section 3 of Article XIII of the Constitution, provides: SECTION 3. x x x It shall guarantee the rights of all workers to self-organization, collective
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National Labor Relations Commission bargaining and negotiations and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. (Emphasis and underscoring supplied) Even if the purpose of a strike is valid, the strike may still be held illegal where the means employed are illegal. Thus, the employment of violence, intimidation, restraint or coercion in carrying out concerted activities which are injurious to the rights to property renders a strike illegal. And so is picketing or the obstruction to the free use of property or the comfortable enjoyment of life or property, when accompanied by intimidation, threats, violence, and coercion as to constitute nuisance.(Philippine Diamond Hoteland Resort Inc.vs. Manila Diamond Hotel Employees Union,G.R. No. 158075,June 30, 2006) It is true that the strike may still be declared invalid where the means employed are illegal even if the procedural requisites before staging a strike were satisfied.[30] However, in the absence of evidence to support the allegations that the respondent union did not commit illegal acts during the strike, we are constrained to dismiss the allegations and uphold the strike as a valid exercise of the workers constitutional right to selforganization and collective bargaining. The affidavits presented by the petitioner FEU-NRMF and relied upon by the Labor Arbiter and the NLRC, in arriving at the conclusion that the respondent union committed illegal acts during the strike, could not be given probative value by this Court as the adverse party was not given a chance to cross-examine the affiants. In a catena of labor cases, this Court has consistently held that where the adverse party is deprived of the opportunity to cross-examine the affiants, affidavits are generally rejected for being hearsay, unless the affiants themselves are placed on the witness stand to testify thereon. Neither can this Court rely on the photographs supporting these allegations without verifying its authenticity. {FEU-NRMF vs FEU-NRMF EMPLOYEES ASSOCIATIONALLIANCE OF FILIPINO WORKERS (FEU-NRMFEA-AFW), G.R. No. 168362, October 12, 2006} In fine, the legality of a strike is determined not only by compliance with its legal formalities but also by the means by which it is carried out. (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006)
Circumstances justifying a less drastic penalty for ordinary striking workers With the view we take of this case, the public respondent Secretary of Labor and Employment - and necessarily the CA - acted within the bounds of the law and certainly rendered a judicious solution to the dispute when she spared the striking workers or union members from the penalty of dismissal. This disposition takes stock of the following circumstances justifying a less drastic penalty for ordinary striking workers: a) the employees who engaged in slowdown actually reported for work and continued to occupy their respective posts, or, in fine, did not abandon their jobs; b) they were only following
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National Labor Relations Commission orders of their leaders; and c) no evidence has been presented to prove their participation in the commission of illegal activities during the strike. Not to be overlooked is a factor which the CA, perhaps having in mind PAL vs. Brillantes, regarded as justifying the leniency assumed by the public respondent Secretary towards the members of the Union. We refer to the fact that Nissan Motor appeared to have also exacerbated, as earlier indicated, the emerging volatile atmosphere despite the Secretarys order veritably enjoining the parties to respect the status quo prevailing when she assumed jurisdiction over the dispute. Foremost of these exacerbating acts is the en masse termination of most of the Union members, albeit it may be conceded that the employer has the prerogative of imposing disciplinary sanctions against assumption-order-defying employees. (Nissan Motors Philippines, Inc.., vs. Secretary of Labor and Employment,G.R. Nos. 158190-91, June 21, 2006) Illegal strike As the appellate court correctly held, the union officers should be dismissed for staging and participating in the illegal strike, following paragraph 3, Article 264(a) of the Labor Code which provides that . . .[a]ny union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during strike may be declared to have lost his employment status . . . An ordinary striking worker cannot, thus be dismissed for mere participation in an illegal strike. There must be proof that he committed illegal acts during a strike, unlike a union officer who may be dismissed by mere knowingly participating in an illegal strike and/or committing an illegal act during a strike.(Philippine Diamond Hoteland Resort Inc.vs. Manila Diamond Hotel Employees Union,G.R. No. 158075,June 30, 2006) With respect to the union officers, as already discussed, their mere participation in the illegal strike warrants their dismissal. (Arellano University Employees and Workers Union vs Court of Appeals,G.R. No. 139940, September 19, 2006) Even assuming arguendo that in staging the strike, petitioners had complied with legal formalities, the strike would just the same be illegal, for by blocking the free ingress to and egress from the company premises, they violated Article 264(e) of the Labor Code which provides that [n]o person engaged in picketing shall obstruct the free ingress to or egress from the employers premises for lawful purposes, or obstruct public thoroughfares. (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006) Requisites for a Valid Strike For a strike to be valid, the following requisites must concur: (1) the thirty-day notice or the fifteen-day notice, in case of unfair labor practices; (2) the two-thirds (2/3) required vote to strike done by secret ballot; and (3) the submission of the strike vote to the Department of Labor and Employment at least seven days prior to the strike.[28] In addition, in case of strikes in hospitals, clinics and medical institutions, it shall be the duty of the striking employees to provide and maintain an effective and skeletal workforce of medical and other health personnel in order to insure the proper and adequate protection of the life and health of its patients.[29] These procedural requirements, along with the mandatory cooling off and strike ban periods had been fully observed by the respondent
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National Labor Relations Commission union. {FEU-NRMF vs FEU-NRMF EMPLOYEES ASSOCIATION-ALLIANCE FILIPINO WORKERS (FEU-NRMFEA-AFW), G.R. No. 168362, October 12, 2006} Illegal Acts During Strike What is more, the strike had been attended by the widespread commission of prohibited acts. Well-settled is the rule that even if the strike were to be declared valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal.[ Among such limits are the prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall: a) commit any act of violence, coercion, or intimidation or b) obstruct the free ingress to or egress from the employer's premises for lawful purposes, or c) obstruct public thoroughfares. The following acts have been held to be prohibited activities: where the strikers shouted slanderous and scurrilous words against the owners of the vessels; where the strikers used unnecessary and obscene language or epithets to prevent other laborers to go to work, and circulated libelous statements against the employer which show actual malice;] where the protestors used abusive and threatening language towards the patrons of a place of business or against co-employees, going beyond the mere attempt to persuade customers to withdraw their patronage; where the strikers formed a human cordon and blocked all the ways and approaches to the launches and vessels of the vicinity of the workplace and perpetrated acts of violence and coercion to prevent work from being performed; and where the strikers shook their fists and threatened non-striking employees with bodily harm if they persisted to proceed to the workplace. Permissible activities of the picketing workers do not include obstruction of access of customers.(Sukhothai Cuisine and Restaurant vs. Court of Appeals,G.R. No. 150437 .July 17, 2006) Effects of Illegal Strike In the determination of the liabilities of the individual respondents, the applicable provision is Article 264(a) of the Labor Code: Art. 264. Prohibited Activities (a) x x x x x x x Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. In Samahang Manggagawa sa Sulpicio Lines, Inc.-NAFLU v. Sulpicio Lines, Inc. this Court explained that the effects of such illegal strikes, outlined in Article 264, make a distinction between workers and union officers who participate therein: an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. A union officer, on the other
OF
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National Labor Relations Commission hand, may be terminated from work when he knowingly participates in an illegal strike, and like other workers, when he commits an illegal act during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Liability for prohibited acts is to be determined on an individual basis.(Sukhothai Cuisine and Restaurant vs. Court of Appeals,G.R. No. 150437 .July 17, 2006) Supervisory and Managerial Employees Accordingly, Article 212(m) of the Labor Code, as amended, differentiates supervisory employees from managerial employees, to wit: supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment; whereas, managerial employees are those who are vested with powers or prerogatives to lay down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. Thus, from the foregoing provision of the Labor Code, it can be clearly inferred that private respondent Tamondong was just a supervisory employee. Private respondent Tamondong did not perform any of the functions of a managerial employee as stated in the definition given to it by the Code. Hence, the Labor Code provisions regarding disqualification of a managerial employee from joining, assisting or forming any labor organization does not apply to herein private respondent Tamondong. Being a supervisory employee of CAPASCO, he cannot be prohibited from joining or participating in the union activities of private respondent CUSE, and in making such a conclusion, the Court of Appeals did not act whimsically, capriciously or in a despotic manner, rather, it was guided by the evidence submitted before it. Thus, given the foregoing findings of the Court of Appeals that private respondent is a supervisory employee, it is indeed an unfair labor practice [Article 248(a) of the Labor Code as amended.] on the part of petitioner CAPASCO to dismiss him on account of his union activities, thereby curtailing his constitutionally guaranteed right to self-organization.[Article 13, Section 3 of the 1987 Philippine Constitution.] (Cathay Pacific Steel Corporation vs. COURT OF APPEALS, G.R. No. 164561, August 30, 2006)
Teacher's Probationary Employment The Manual of Regulations for Private Schools, and not the Labor Code, determines whether or not a faculty member in an educational institution has attained regular or permanent status. In University of Santo Tomas v. National Labor Relations Commission the Court en banc said that under Policy Instructions No. 11 issued by the Department of Labor and Employment, the probationary employment of professors, instructors and teachers shall be subject to the standards established by the Department of Education and Culture. Said standards are embodied in paragraph 75 (now Section 93) of the Manual of Regulations for Private Schools. Section 93 of the 1992 Manual of Regulations for Private Schools provides that fullCreated by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION
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National Labor Relations Commission time teachers who have satisfactorily completed their probationary period shall be considered regular or permanent. Moreover, for those teaching in the tertiary level, the probationary period shall not be more than six consecutive regular semesters of satisfactory service. The requisites to acquire permanent employment, or security of tenure, are (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory. As previously held, a part-time teacher cannot acquire permanent status. Only when one has served as a full-time teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer before she was appointed as a full-time instructor on probation. As a part-time lecturer, her employment as such had ended when her contract expired. Thus, the three semesters she served as part-time lecturer could not be credited to her in computing the number of years she has served to qualify her for permanent status. Completing the probation period does not automatically qualify her to become a permanent employee of the university. Petitioner could only qualify to become a permanent employee upon fulfilling the reasonable standards for permanent employment as faculty member. Consistent with academic freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide standards for its teachers and determine whether these standards have been met.[19] At the end of the probation period, the decision to re-hire an employee on probation, belongs to the university as the employer alone.(Lolita R. Lacuesta vs Ateneo de Manila University,,G.R. No. 152777, December 9, 2005) Probationary Period Probationary Period; We note that in its Position Paper filed before the Labor Arbiter, petitioner pointed out that they had agreed in their employment contract that Anitas placement was subject to a 40-day probationary period. Anita is deemed to have admitted the existence of this stipulation in the employment contract as she never disputed petitioners assertion in all the pleadings that she submitted to the NLRC, the Court of Appeals, and this Court. Hence, even if it were true that Anitas foreign employer terminated her services after 10 days of her employment, there could be no illegal dismissal as the termination was effected during the agreed probationary period. (Philemploy Services and Resources, Inc. vs. Anita Rodriguez,G.R. No. 152616,March 31, 2006) Proportionality between the Offense and the Penalty There must be a reasonable proportionality between the offense and the penalty. Dismissal, without doubt, is the ultimate penalty that can be meted to an employee.[41] Thus, where a penalty less punitive would suffice, whatever missteps may be committed by labor ought not to be visited with a consequence so severe. In this case, the only basis of respondents in terminating the services of petitioners is that they incurred absences in 1997, in excess of the allowed number, despite a
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National Labor Relations Commission previous warning for their absences in 1996 and 1995. We find that in this case, termination is not a commensurate penalty. Even assuming that petitioners absenteeism constitutes willful disobedience, such offense does not warrant their dismissal. (Nelson Zagala and Feliciano M. Angelesvs. Mikado PhilippinesCorporation ,G.R. No. 160863, September 27, 2006)
Termination Likewise, the alleged damage on the company car assigned to respondent cannot justify his dismissal. Termination is simply disproportionate to such infraction not only because the extent of the damage was never proved by petitioner but more importantly, no substantial evidence was presented to establish the guilt of respondent. With regard to the anonymous note purportedly written by the latter, petitioner failed to discharge the burden of proving that the same was indeed a threat and that respondent was the author thereof. (Ace Promotion & Marketing Corporation vs. Reynaldo Ursabia,G.R. No. 171703,September 22, 2006)
a. Guidelines An employers prerogative to dismiss his employee, however, is not absolute. The court, in the exercise of its inherent power to interpret the law, has declared the guidelines that every employer must observe in terminating the services of his employee. Particularly in the case of Article 282(c) of the Labor Code, this Court has made the following pronouncement: It is of course settled that an employer may terminate the services of an employee due to loss of trust and confidence. However, the loss must be based not on ordinary breach by the latter of the trust reposed in him by the former, but, in the language of Article 282(c) of the Labor Code, on willful breach. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. Elsewise stated, it must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer. It should be genuine and not simulated; or should it appear as a mere afterthought to justify earlier action taken in bad faith or a subterfuge for causes which are improper, illegal or unjustified. It has never been intended to afford an occasion for abuse because of its subjective nature. There must, therefore, be an actual breach of duty committed by the employee which must be established by substantial evidence. (Manila Memorial Park Cemetery, Inc. vs. Delia V. Panado,G.R. No. 167118 ,June 15, 2006) b. Termination Reports Section 2.2 (e) of the Labor Department Order No. 19 expressly provides that the
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National Labor Relations Commission report of termination is one of the indications of project employment. Time and again, we held that failure of the employer to file termination reports after every project completion with the nearest public employment office is an indication that respondents were not project employees. (Grandspan Development Corporation vs. Ricardo Bernardo, et al., G.R. No. 141464,September 21, 2005) Most important of all, based on the records, PLDT did not report the termination of respondents supposed project employment to the Department of Labor and Employment as project employee. Department Order No. 19 (as well as the old Policy Instructions No. 20) required employers to submit a report of an employees termination to the nearest public employment office every time his employment was terminated due to a completion of a project.[13] PLDTs failure to file termination reports was an indication that the respondent was not a project employee but a regular employee.(PLDT vs Mayflor T. Ylagan,G.R. No. 155645,November 24, 2006)
c. Termination due to Illegal Strike While the employer is authorized to declare a union officer who participated in an illegal strike as having lost his employment, his/its option is not as wide with respect to union members or workers for the law itself draws a line and makes a distinction between union officers and members/ordinary workers. An ordinary striking worker or union member cannot, as a rule, be terminated for mere participation in an illegal strike; there must be proof that he committed illegal acts during the strike. And lest it be forgotten, the law invests the Secretary of Labor and Employment the prerogative of tempering the consequence of the defiance to the assumption order. The Secretary may thus merely suspend rather than dismiss the employee involved. This is as it should be. For as then Associate, now Chief, Justice Artemio V. Panganiban prefaced his ponencia in Solvic Industrial Corporation vs. NLRC - Except for the most serious causes affecting the business of the employer, our labor laws frown upon dismissal. Where a penalty less punitive would suffice, an employee should not be sanctioned with a consequence so severe. (Nissan Motors Phiippines Inc. vs. Secretary of Labor and Employment, G.R. Nos. 158190-91, June 21, 2006) issuing the writ shall conduct a hearing with due notice to all parties concerned and resolve the validity of the claim within ten (10) working days from receipt thereof and his decision is appealable to the Commission within ten (10) working days from notice, and the Commission shall resolve the appeal within the same period. (Jang Lim, et al., vs Court of Appeals, G.R. No. 149748,November 16, 2006) Treatment on the Unexpired portion of employment contract In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.
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National Labor Relations Commission This Court held in the case of Marsaman Manning Agency, Inc. v. National Labor Relations Commission, [45] thus: A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three (3) months salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one (1) year or more. This is evident from the words for every year of the unexpired term which follows the words salaries x x x for three months. To follow petitioners thinking that private respondent is entitled to three (3) months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the wellestablished rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the words employed in the statute and to have used them advisedly. Ut res magis valeat quam pereat. (Skippers United Pacific vs. Jerry Maguad,G.R. No. 166363,August 15, 2006) Union A word of caution though, under Article 245 of the Labor Code, supervisory employees are not eligible for membership in a labor union of rank-and-file employees. The supervisory employees are allowed to form their own union but they are not allowed to join the rank-and-file union because of potential conflicts of interest. Further, to avoid a situation where supervisors would merge with the rank-and-file or where the supervisors labor union would represent conflicting interests, a local supervisors union should not be allowed to affiliate with the national federation of unions of rank-and-file employees where that federation actively participates in the union activity within the company. Thus, the limitation is not confined to a case of supervisors wanting to join a rank-and-file union. The prohibition extends to a supervisors local union applying for membership in a national federation the members of which include local unions of rank-and-file employees. In De La Salle University Medical Center and College of Medicine v. Laguesma, we reiterated the rule that for the prohibition to apply, it is not enough that the supervisory union and the rank-and-file union are affiliated with a single federation. In addition, the supervisors must have direct authority over the rank-and-file employees. (Coastal Subic Bay Terminal, Inc., vs DOLE,G.R. No. 157117,November 20, 2006) Chartered Local Union Under the rules implementing the Labor Code, a chartered local union acquires legal personality through the charter certificate issued by a duly registered federation or national union, and reported to the Regional Office in accordance with the rules implementing the Labor Code. A local union does not owe its existence to the federation with which it is affiliated. It is a separate and distinct voluntary association owing its creation to the will of its members. Mere affiliation does not divest the local union of its own personality, neither does it give the mother federation the license to act independently of the local union. It only gives rise to a contract of agency, where the former acts in
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National Labor Relations Commission representation of the latter.Hence, local unions are considered principals while the federation is deemed to be merely their agent. As such principals, the unions are entitled to exercise the rights and privileges of a legitimate labor organization, including the right to seek certification as the sole and exclusive bargaining agent in the appropriate employer unit.(Coastal Subic Bay Terminal, Inc., vs DOLE,G.R. No. 157117,November 20, 2006) Union Officers Termination Petitioners, being union officers, should thus bear the consequences of their acts of knowingly participating in an illegal strike, conformably with the third paragraph of Article 264 (a) of the Labor Code which provides: . . . Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status: Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. (Emphasis and underscoring supplied) (Biflex Phils. Inc. Labor Union (NAFLU) vs Filflex Industrial & Manufacturing Corporation,G.R. No. 155679, December 19, 2006) Purpose of Affiliation of Local Unions The purpose of affiliation of the local unions into a common enterprise is to increase the collective bargaining power in respect of the terms and conditions of labor. When there is commingling of officers of a rank-and-file union with a supervisory union, the constitutional policy on labor is circumvented. Labor organizations should ensure the freedom of employees to organize themselves for the purpose of leveling the bargaining process but also to ensure the freedom of workingmen and to keep open the corridor of opportunity to enable them to do it for themselves. (Coastal Subic Bay Terminal, Inc., vs DOLE,G.R. No. 157117,November 20, 2006) Unfair Labor Practice The concept of unfair labor practice is defined by the Labor Code as: ART. 247. CONCEPT OF UNFAIR LABOR PRACTICE AND PROCEDURE FOR PROSECUTION THEREOF. Unfair labor practices violate the constitutional right of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. The same code likewise provides the acts constituting unfair labor practices committed by employers, to wit: ART. 248. UNFAIR LABOR PRACTICES OF EMPLOYERS. It shall be unlawful for an employer to commit any of the following unfair labor practices:
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National Labor Relations Commission (a) To interfere with, restrain or coerce employees in the exercise of their right to self-organization; (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs; (c) To contract out services or functions being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their right to selforganization; (d) To initiate, dominate, assist or otherwise interfere with the formation or administration of any labor organization, including the giving of financial or other support to it or its organizers or supporters; (e) To discriminate in regard to wages, hours of work, and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. (Skippers United Pacific vs. Jerry Maguad,G.R. No. 166363,August 15, 2006) In Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, et al. v. NLRC, et al., we found it proper to award moral and exemplary damages to illegally dismissed employees as their dismissal was tainted with unfair labor practice. The Court said: Unfair labor practices violate the constitutional rights of workers and employees to self-organization, are inimical to the legitimate interests of both labor and management, including their right to bargain collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect; and disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. As the conscience of the government, it is the Courts sworn duty to ensure that none trifles with labor rights. (Geronimo Q. Quadra vs. Court of Appeals G.R. No. 147593, July 31, 2006) To constitute ULP, however, violations of the CBA must be gross. Gross violation of the CBA, under Article 261 of the Labor Code, means flagrant and/or malicious refusal to comply with the economic provisions thereof. Evidently, the University can not be faulted for ULP as it in good faith merely heeded the above-said request of Union members. (Arellano University Employees and Workers Union vs Court of Appeals,G.R. No. 139940, September 19, 2006) Verification The Court has consistently held that the requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a condition affecting the form of the pleading, non-compliance with which does not necessarily render the pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. The court may order the
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National Labor Relations Commission correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may thereby be served.(LDP Marketing Inc. vs. Erlinda Dyolde,G.R. No. 159653,January 25, 2006) Wage Increase The Wage Orders are explicit that payment of the increases are to be borne by the principal or client. To be borne, however, does not mean that the principal, PTSI in this case, would directly pay the security guards the wage and allowance increases because there is no privity of contract between them. The security guards contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE is tasked, among others, with the payment of their wages [See Article VII Sec. 3 of the Contract for Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 665]. (Eparwa Security & Janitorial Services, Inc., vs Liceo De Cagayan University,G.R. No. 150402, November 28, 2006)
By: Atty. C. Estole & RPManalo

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2006 Final Case Index

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NLRC Case Index

September 2005 - December 2006

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

National Labor Relations Commission

National Labor Relations Commission 148130,June 16, 2006)

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

Created by: RESEARCH, INFORMATION & PUBLICATIONS DIVISION

National Labor Relations Commission

National Labor Relations Commission

In Roquero v. Philippine Airlines, Inc., we resolved the same issue as follows:

By: Atty. C. Estole & RPManalo

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