Appeal As a rule, a party who does not appeal from the decision may not obtain any affirmative

relief from the appellate court other than what he has obtained from the lower tribunal, if any, whose decision is brought up on appeal. Due process prevents the grant of additional awards to parties who did not appeal. As an exception, he may assign an error where the purpose is to maintain the judgment on other grounds, but he cannot seek modification or reversal of the judgment or affirmative relief unless he has also appealed or filed a separate petition. (AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN CASTIGADOR, NUENA SERMON and JOCELYN ZOLINA, G.R. No. 178309, January 27, 2009) Likewise, by availing of a wrong or inappropriate mode of appeal, the petition merits an outright dismissal pursuant to Circular No. 290 which provides that, an appeal taken to either Supreme Court or the Court of Appeals by the wrong or inappropriate mode shall be dismissed.( HANJIN HEAVY INDUSTRIES AND CONSTRUCTION COMPANY LTD. (FORMERLY HANJIN ENGINEERING AND CONSTRUCTION CO. LTD.) v. HONORABLE COURT OF APPEALS, G.R. No. 167938, February 19, 2009) At the outset, it must be stated that petitioners adopted the wrong mode of remedy in bringing the case before this Court. It is well-settled that the proper recourse of an aggrieved party to assail the decision of the Court of Appeals is to file a petition for review on certiorari under Rule 45 of the Rules of Court. The Rules precludes recourse to the special civil action of certiorari if appeal, by way of a petition for review is available, as the remedies of appeal and certiorari are mutually exclusive and not alternative or successive. (TACLOBAN FAR EAST MARKETING CORPORATION and FRANCISCO Y. ROMUALDEZ v. THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320, September 11, 2009) Time and again, it has been held that the right to appeal is not a constitutional right, but a mere statutory privilege. Hence, parties who seek to avail themselves of it must comply with the statutes or rules allowing it. To reiterate, perfection of an appeal in the manner and within the period permitted by law is mandatory and jurisdictional. The requirements for perfecting an appeal must, as a rule, be strictly followed. Such requirements are considered indispensable interdictions against needless delays and are necessary for the orderly discharge of the judicial business. Failure to perfect the appeal renders the judgment of the court final and executory. Just as a losing 1

party has the privilege to file an appeal within the prescribed period, so does the winner also have the correlative right to enjoy the finality of the decision. Thus, the propriety of the monetary awards of the Labor Arbiter is already binding upon this Court, much more with the Court of Appeals. (ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGIMANAGERS,INC. and E. GANZON, INC. G.R. Nos. 178034 & 178117, G.R. Nos. 186984-85, September 18, 2009) From the immediately quoted pronouncement of the Court in Sy, petitioners mere filing of the Motion for Reduction of Bond did not suffice to perfect his appeal. As correctly found by the appellate court, petitioner filed a Motion for Reduction of Bond dated June 24, 1999 (which was received by the appellate court on June 28, 1999) alleging financial constraints without showing substantial compliance with the Rules or demonstrating a willingness to abide by the [R]ules by posting a partial bond. That petitioner questioned the computation of the monetary award basis of the computation of the amount of appeal bond did not excuse it from posting a bond in a reasonable amount or what it believed to be the correct amount. (THE HERITAGE HOTEL MANILA v. NATIONAL LABOR RELATIONS COMMISSION, RUFINO C. RAON II, AND ISMAEL C. VILLA, G.R. Nos. 180478-79, September 3, 2009) Certiorari

Respondent may have a point in asserting that in this case a Rule 65 petition is a wrong mode of appeal, as indeed the writ of certiorari is an extraordinary remedy, and certiorari jurisdiction is not to be equated with appellate jurisdiction. Nevertheless, it is settled, as a general proposition, that the availability of an appeal does not foreclose recourse to the extraordinary remedies, such as certiorari and prohibition, where appeal is not adequate or equally beneficial, speedy and sufficient, as where the orders of the trial court were issued in excess of or without jurisdiction, or there is need to promptly relieve the aggrieved party from the injurious effects of the acts of an inferior court or tribunal, e.g., the court has authorized execution of the judgment. This Court has even recognized that a recourse to certiorari is proper not only where there is a clear deprivation of petitioners fundamental right to due process, but so also where other special circumstances warrant immediate and more direct action. (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009) Strict Application of the Rules 2

As to the other ground cited by private respondents counsel, suffice it to say that it was a bare allegation unsubstantiated by any proof or affidavit of merit. Besides, they could have filed the petition on time with a motion to be allowed to litigate in forma pauperis. While social justice requires that the law look tenderly on the disadvantaged sectors of society, neither the rich nor the poor has a license to disregard rules of procedure. The fundamental rule of human relations enjoins everyone, regardless of standing in life, to duly observe procedural rules as an aspect of acting with justice, giving everyone his due and observing honesty and good faith. For indeed, while technicalities should not unduly hamper our quest for justice, orderly procedure is essential to the success of that quest to which all courts are devoted. (LAGUNA METTS CORPORATION v. ARIES C. CAALAM and GERALDINE ESGUERRA, G.R. No. 185220, July 27, 2009) Date of Filing

In this case, petitioner availed of the services of LBC, a private carrier, to deliver its notice of appeal to the NLRC. Had petitioner sent its notice of appeal by registered mail, the date of mailing would have been deemed the date of filing with the NLRC. But petitioner, for reasons of its own, chose to send its notice of appeal through a private letter-forwarding agency. Therefore, the date of actual receipt by the NLRC of the notice of appeal, and not the date of delivery to LBC, is deemed to be the date of the filing of the notice of appeal. Since the NLRC received petitioners notice of appeal on 26 February 2001, the appeal was clearly filed out of time. Petitioner had thus lost its right to appeal from the decision of the Labor Arbiter and the NLRC should have dismissed its notice of appeal. (CHARTER CHEMICAL AND COATING CORPORATION vs. HERBERT TAN and AMALIA SONSING, G.R. No. 163891, May 21, 2009) Delayed Filing

We agree with the Court of Appeals that since no intent to delay the administration of justice could be attributed to Guinmapang, a one day delay does not justify the appeals denial. More importantly, the Court of Appeals declared that Guinmapangs appeal, on its face, appears to be impressed with merit. The constitutional mandate to accord full protection to labor and to safeguard the employees means of livelihood should be given proper attention and sanction. A greater injustice may occur if said appeal is not given due course than if the reglementary period to appeal were strictly followed. In this case, we are inclined to excuse the one day delay in order to fully settle the merits of the case. This is in line with our policy to encourage full 3

adjudication of the merits of an appeal. (REPUBLIC CEMENT CORPORATION v. PETER I. GUINMAPANG, G.R. No. 168910, August 24, 2009) Appeal Bond

At the time of the filing of the surety bond by PJI on January 2, 2003, PPAC was still an accredited bonding company. Thus, it was but proper to honor the appeal bond issued by a bonding company duly accredited by this Court at the time of its issuance. The subsequent revocation of the authority of a bonding company should not prejudice parties who relied on its authority. The revocation of authority of a bonding company is prospective in application. (CESARIO L. DEL ROSARIO v. PHILIPPINE JOURNALISTS, INC., G.R. No. 181516, August 19, 2009) While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires that unless the NLRC grants the reduction of the cash bond within the 10 day reglementary period, the employer is still expected to post the cash or surety bond securing the full amount within the said 10-day period. If the NLRC does eventually grant the motion for reduction after the reglementary period has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the employer within the 10-day period. (ANDREW JAMES MCBURNIE v. EULALIO GANZON, EGI-MANAGERS,INC. and E. GANZON, INC. G.R. Nos. 178034 & 178117, G.R. Nos. 18698485, September 18, 2009) In addition, while the bond requirement on appeals involving a monetary award has been relaxed in certain cases, this can only be done where there was substantial compliance with the Rules; or where the appellants, at the very least, exhibited willingness to pay by posting a partial bond. ( LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032, January 19, 2009) The decisions, awards or orders of the Labor Arbiter are final and executory unless appealed to the NLRC by any parties within ten (10) calendar days from receipt thereof, with proof of payment of the required appeal fee accompanied by a memorandum of appeal. And where, as here, the judgment involves monetary award, an appeal

therefrom by the employer may be perfected only upon the posting of a cash or surety bond. A mere notice of appeal without complying with the other requisites mentioned does not stop the running of the period for perfecting an appeal as in fact no motion for extension of said period is allowed. (WALLEM MARITIME SERVICES, INC. and SCANDIC SHIPMANAGEMENT LIMITED v. ERIBERTO S. BULTRON, G.R. No. 185261, October 2, 2009) The purpose of an appeal bond is to ensure, during the period of appeal, against any occurrence that would defeat or diminish recovery by the aggrieved employees under the judgment if subsequently affirmed. The Deed of Assignment in the instant case, like a cash or surety bond, serves the same purpose. First, the Deed of Assignment constitutes not just a partial amount, but rather the entire award in the appealed Order. Second, it is clear from the Deed of Assignment that the entire amount is under the full control of the bank, and not of petitioner, and is in fact payable to the DOLE Regional Office, to be withdrawn by the same office after it had issued a writ of execution. For all intents and purposes, the Deed of Assignment in tandem with the Letter Agreement and Cash Voucher is as good as cash. Third, the Court finds that the execution of the Deed of Assignment, the Letter Agreement and the Cash Voucher were made in good faith, and constituted clear manifestation of petitioners willingness to pay the judgment amount. (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009) Attorneys Fees Finally, the Court overrules the deletion by the NLRC of the Labor Arbiters award for attorneys fees to petitioner. Petitioner is evidently entitled to attorneys fees, since h3e was compelled to litigate to protect his interest by reason of unjustified and unlawful termination of his employment by respondents CCBP and Taguibao. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551, February 10, 2009) Considering that Atty. Go successfully represented his client, it is only proper that he should receive adequate compensation for his efforts. Even as we agree with the reduction of the award of attorney's fees by the CA, the fact that a lawyer plays a vital role in the administration of justice emphasizes the need to secure to him his honorarium lawfully earned as a means to preserve the decorum and respectability of the legal profession. A lawyer is as much entitled to judicial protection against injustice or imposition of fraud on the part of 5

his client as the client is against abuse on the part of his counsel. The duty of the court is not alone to ensure that a lawyer acts in a proper and lawful manner, but also to see that a lawyer is paid his just fees. With his capital consisting of his brains and with his skill acquired at tremendous cost not only in money but in expenditure of time and energy, he is entitled to the protection of any judicial tribunal against any attempt on the part of his client to escape payment of his just compensation. It would be ironic if after putting forth the best in him to secure justice for his client, he himself would not get his due. (EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 183385, February 13, 2009) Moreover, in cases for recovery of wages, the award of attorney's fees is proper and 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. (BARON REPUBLIC THEATRICAL V. NORMITA P. PERALTA et al, G.R. No. 170525, October 2, 2009) In the case at bar, we find that the flight attendants were represented by respondent union which, in turn, engaged the services of its own counsel. The flight attendants had a common cause of action. While the work performed by respondents counsel was by no means simple, seeing as it spanned the whole litigation from the Labor Arbiter stage all the way to this Court, nevertheless, the issues involved in this case are simple, and the legal strategies, theories and arguments advanced were common for all the affected crew members. Hence, it may not be reasonable to award said counsel an amount equivalent to 10% of all monetary awards to be received by each individual flight attendant. Based on the length of time that this case has been litigated, however, we find that the amount of P2,000,000.00 is reasonable as attorneys fees. This amount should include all expenses of litigation that were incurred by respondent union. (FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), v. PHILIPPINE AIRLINES, INC.,PATRIA CHIONG and COURT OF APPEALS,G.R. No. 178083, October 2, 2009) The claim for attorneys fees is granted following Article 2208 of the New Civil Code which allows its recovery in actions for recovery of wages of laborers and actions for indemnity under the employer's liability laws. The same fees are also recoverable when the defendant's act or omission has compelled the plaintiff to incur expenses to protect his interest as in the present case following the refusal by respondent to settle his claims. Pursuant to prevailing jurisprudence, petitioner is entitled to attorneys fees of ten percent 6

(10%) of the monetary award. (LEOPOLDO ABANTE v. KJGS FLEET MANAGEMENT MANILA G.R. No. 182430, December 4, 2009) Backwages One of the natural consequences of a finding that an employee has been illegally dismissed is the payment of backwages corresponding to the period from his dismissal up to actual reinstatement. The statutory intent of this matter is clearly discernible. The payment of backwages allows the employee to recover from the employer that which he has lost by way of wages as a result of his dismissal. Logically, it must be computed from the date of petitioners illegal dismissal up to the time of actual reinstatement. There can be no gap or interruption, lest we defeat the very reason of the law in granting the same. That petitioner did not immediately file his Complaint should not affect or diminish his right to backwages, for it is a right clearly granted to him by law -- should he be found to have been illegally dismissed -- and for as long as his cause of action has not been barred by prescription. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551, February 10, 2009) He never bothered to redeem his license at the soonest possible time when there was no showing that he was unlawfully prevented by respondent from doing so. Thus, petitioner should not be paid for the time he was not working. The Court has held that where the failure of employees to work was not due to the employer's fault, the burden of economic loss suffered by the employees should not be shifted to the employer. Each party must bear his own loss. It would be unfair to allow petitioner to recover something he has not earned and could not have earned, since he could not discharge his work as a driver without his driver's license. Respondent should be exempted from the burden of paying backwages. (BERNARDINO V. NAVARRO v. P.V. PAJARILLO LINER, INC., G.R. No. 164681, April 24, 2009) Burden of Proof In termination cases, the employer bears the burden of proving that the dismissal of the employee is for a just or an authorized cause. Failure to dispose of the burden would imply that the dismissal is not lawful, and that the employee is entitled to reinstatement, back wages and accruing benefits. Moreover, dismissed employees are not required to prove their innocence of the employers accusations against them. (SAN MIGUEL CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION AND WILLIAM L. FRIEND, JR., G.R. No. 153983, May 26, 2009)

As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege nonpayment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove nonpayment. 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 employee but in the custody and absolute control of the employer. Since in the case at bar petitioner company has not shown any proof of payment of the correct amount of salary, holiday pay and 13th month pay, we affirm the award of Madriagas monetary claims. (MANTLE TRADING SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July 28,2009) Respecting the issue of illegal dismissal, the Court appreciates no evidence that petitioner was dismissed. What it finds is that petitioner unilaterally stopped reporting for work before filing a complaint for illegal dismissal, based on his belief that Guillermo and Bergonia had spread rumors that his transactions on behalf of BAYER would no longer be honored as of April 30, 2002. This belief remains just that it is unsubstantiated. While in cases of illegal dismissal, the employer bears the burden of proving that the dismissal is for a valid or authorized cause, the employee must first establish by substantial evidence the fact of dismissal. (RAMY GALLEGO v. BAYER PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT IMAGE MARKETING, INC., and EDGARDO BERGONIA, G.R. No. 179807, July 31, 2009) The burden of proving the validity of retrenchment is on the petitioner. Evidence does not sufficiently establish that petitioner had incurred losses that would justify retrenchment to prevent further losses. The Comparative Income Statement for the year 1996 and for the months of February to June 1997 which petitioner submitted did not conclusively show that petitioner had suffered financial losses. In fact, records show that from January to July 1997, petitioner hired a total of 114 new employees assigned in the petitioner's stores located in the different places of the country. (EMCOR INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009) It is well-settled that in termination cases, the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause and failure to discharge the same would mean that the dismissal is not justified and therefore illegal. Hence, in arguing that Sabulao abandoned his work, it is incumbent upon the petitioners to prove: (1) that the employee failed to report for work or had been 8

absent without valid or justifiable reason; and (2) that there must have been a clear intention to sever the employer-employee relationship as manifested by some overt acts. Clearly, jurisprudence dictates that the burden of proof to show that there was unjustified refusal to go back to work rests on the employer. (TACLOBAN FAR EAST MARKETING CORPORATION and FRANCISCO Y. ROMUALDEZ v. THE COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 182320, September 11, 2009) Cause of Action The Secretary of Labor and Employment dismissed the first petition as it was filed outside the 60-day freedom period. At that time therefore, the union has no cause of action since they are not yet legally allowed to challenge openly and formally the status of SMCGCSUPER as the exclusive bargaining representative of the bargaining unit. Such dismissal, however, has no bearing in the instant case since the third petition for certification election was filed well within the 60day freedom period. Otherwise stated, there is no identity of causes of action to speak of since in the first petition, the union has no cause of action while in the third, a cause of action already exists for the union as they are now legally allowed to challenge the status of SMCGCSUPER as exclusive bargaining representative. (CHRIS GARMENTS CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNION-PTGWO LOCAL CHAPTER No. 832, G.R. No. 167426, January 12, 2009) Circumvention of the Law Notably, private respondents purported employment with MANRED commenced only in 1996, way after she was hired by the petitioner as extra beverage attendant on April 24, 1995. There is thus much credence in the private respondents claim that the service agreement executed between the petitioner and MANRED is a mere ploy to circumvent the law on employment, in particular that which pertains on regularization. (MARANAW HOTELS AND RESORT CORP vs COURT OF APPEALS, SHERYL OABEL AND MANILA RESOURCE DEVELOPMENT CORP., G.R. No. 149660, January 20, 2009) Collective Bargaining Agreement (CBA) If the terms of a CBA are clear and have no doubt upon the intention of the contracting parties, as in the herein questioned provision, the literal meaning thereof shall prevail. That is settled. As such, the daily-paid employees must be paid their regular salaries on

the holidays which are so declared by the national government, regardless of whether they fall on rest days. Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay. (Emphasis and underscoring supplied) (RFM CORPORATION-FLOUR DIVISION and SFI FEEDS DIVISION v. KASAPIAN NG MANGGA-GAWANG PINAGKAISA-RFM (KAMPI-NAFLUKMU) and SANDIGAN AT UGNAYAN NG MANGGAGAWANG PINAGKAISASFI (SUMAPI-NAFLU-KMU), G.R. No. 162324, February 4, 2009) Company Policy As respondents creditably explained, and as admitted by petitioner herself, respondents have standing policies that an employee must be single at the time of employment and must be willing to be assigned to any of its branches in the country. Petitioners contention that upon getting married, she no longer bound herself to be assigned to any of respondents branches in the country is preposterous. Just because an employee gets married does not mean she can already renege on a commitment she willingly made at the time of her employment particularly if such commitment does not appear to be unreasonable, inconvenient, or prejudicial to her. Respondents claimed that travel time from the Bacolod City Branch to the Iloilo City Branch will only take about an hour by boat and that they were even willing to defray petitioners transportation and lodging expenses. Petitioner never disputed these matters. There is no showing either that petitioners transfer was only being used by respondents to camouflage a sinister scheme of management to rid itself of an undesirable worker in the person of petitioner. (AILEEN G. HERIDA v. F & C PAWNSHOP and JEWELRY STORE/MARCELINO FLORETE, JR., G.R. No. 172601, April 16, 2009) Computation of Award Finally, on the increase in the computation of the monetary award to respondents, the decision of the Labor Arbiter specified that for purposes of putting up a bond should petitioner appeal, the backwages were computed only for a certain period. Otherwise, the actual backwages to be paid to respondents are computed from the date of dismissal until the finality of the decision. In addition, because petitioner continues to refuse and accord regular status to respondents and to pay them their corresponding wages even after the lapse of two

10

(2) years from the finality of the Labor Arbiters decision, the Labor Arbiter correctly included that in its order of execution. Thus, the Labor Arbiters order of execution simply covered the correct computation of wages and other payments enjoyed by petitioners regular employees. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. RIZALINA RAUT, LEILA EMNACE and GINA CAPISTRANO, G.R. No. 174209, August 25, 2009) This Court notes that the NLRC awarded backwages, 13 th month pay, and service incentive leave pay from July 10, 2005 to January 23, 2007 only. It is evident that these should not be limited to said period. These should be computed from the date of her illegal dismissal until this decision attains finality. Though Bolanos did not appeal the computation of the NLRCs award as affirmed by the Court of Appeals, we are not barred from ordering its modification. This Court is imbued with sufficient authority and discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice. Besides, substantive rights like the award of backwages, 13th month pay and service incentive leave pay resulting from illegal dismissal must not be prejudiced by a rigid and technical application of the rules. The computation of the award for backwages and other benefits from the time the compensation was withheld up to the time of actual reinstatement is a mere legal consequence of the finding that respondent was illegally dismissed by petitioners. (HENLIN PANAY COMPANY v. NATIONAL LABOR RELATIONS COMMISSION , G.R. No. 180718, October 23, 2009) Conclusiveness of Judgment Third. The matter of employer-employee relationship has been resolved with finality by the Secretary of Labor and Employment in the Resolution dated December 27, 2002. Since petitioner did not appeal this factual finding, then, it may be considered as the final resolution of such issue. To reiterate, conclusiveness of judgment has the effect of preclusion of issues. (CHRIS GARMENTS CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNIONPTGWO LOCAL CHAPTER No. 832, G.R. No. 167426, January 12, 2009) Contingent Fee Contingent fee contracts are subject to the supervision and close scrutiny of the court in order that clients may be protected from unjust charges. The amount of contingent fees agreed upon by the parties is subject to the stipulation that counsel will be paid for his 11

legal services only if the suit or litigation prospers. A much higher compensation is allowed as contingent fees because of the risk that the lawyer may get nothing if the suit fails. The Court finds nothing illegal in the contingent fee contract between Atty. Go and Evangelinas husband. The CA committed no error of law when it awarded the attorneys fees of Atty. Go and allowed him to receive an equivalent of 39% of the monetary award. (EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 183385, February 13, 2009) Contract of Adhesion In addition, the employment agreement may be likened into a contract of adhesion considering that it is petitioner who insists that there existed an express period of one year from April 1, 2002 to March 31, 2003, using as proof its own copy of the agreement. While contracts of adhesion are valid and binding, in cases of doubt which will cause a great imbalance of rights against one of the parties, the contract shall be construed against the party who drafted the same. Hence, in this case, where the very employment of respondent is at stake, the doubt as to the period of employment must be construed in her favor. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009) Contract of Employment Since respondent was already a regular employee months before the execution of the Employment with a Fixed Period contract, its execution was merely a ploy on SMCs part to deprive respondent of his tenurial security. Hence, no valid fixed-term contract was executed. The employment status of a person is defined and prescribed by law and not by what the parties say it should be. Equally important to consider is that a contract of employment is impressed with public interest such that labor contracts must yield to the common good. Provisions of applicable statutes are deemed written into the contract, and the parties are not at liberty to insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each other. (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009) Corporate Rehabilitation Given these premises, it is not difficult to understand why actions for claims against the ailing enterprise have to be suspended. 12

It then becomes easy to accept the hypothesis that the date when the claim arose, or when the action is filed, is of no moment. As long as the corporation is under a management committee or a rehabilitation receiver, all actions for claims against it --- for money or otherwise --must yield to the greater imperative of corporate rehabilitation, excepting only, as already mentioned, claims for payment of obligations incurred by the corporation in the ordinary course of business. Enforcement of writs of execution issued by judicial or quasijudicial tribunals, since such writs emanate from actions for claims, must, likewise, be suspended. (MALAYAN INSURANCE COMPANY, INC. v. VICTORIAS MILLING COMPANY, INC., G.R. No. 167768, April 17, 2009) Damages Petitioner's reliance on Viernes v. National Labor Relations Commission to support its claim for the reduction of the award of nominal damages is misplaced. The factual circumstances are different. Viernes is an illegal dismissal case, since there was no authorized cause for the dismissal of the employees; and the employer was ordered to pay backwages inclusive of allowances and other benefits, computed from the time the compensation was withheld up to the actual reinstatement. In addition, since the dismissal was done without due process, the nominal damages awarded was only P2,590.00 equivalent to one-month salary of the employee. In this case, the dismissal was valid, as it was due to an authorized cause, but without the observance of procedural due process, and the only award given was nominal damages. (CELEBES JAPAN FOODS CORPORATION V. SUSAN YERMO G.R. No. 175855 October 2, 2009) In previous cases where moral damages and attorneys fees were awarded, the manner of termination was done in a humiliating and insulting manner, such as in the case of Balayan Colleges v. National Labor Relations Commission where the employer posted copies of its letters of termination to the teachers inside the school campus and it also furnished copies to the town mayor and Parish Priest of their community for the purpose of maligning the teachers reputation. So also in the case of Chiang Kai Shek School v. Court of Appeals, this Court awarded moral damages to a teacher who was flatly, and without warning or a formal notice, told that she was dismissed. (M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009) Disability Benefits Under paragraph 20.1.5 of the parties CBA, it is stipulated that [a] seafarer whose disability is assessed at 50% or more under the 13

POEA Employment Contract shall x x x be regarded as permanently unfit for further sea service in any capacity and entitled to 100% compensation, i.e., x x x US$60,000.00 for ratings. Petitioners disability rating being 68.66%, he is entitled to a 100% disability compensation of US$60,000, as correctly found by the Labor Arbiter and the NLRC. So Philimare, Inc./Marlow Navigation Co., Ltd. v. Suganob, enlightens, thus: Apropos the appropriate disability benefits that respondent is entitled to, we find that Suganob is entitled to Grade 1 disability benefits which corresponds to total and permanent disability. . . x x x To be entitled to Grade 1 disability benefits, the employees disability must not only be total but also permanent. 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 of his body. Clearly, Suganobs disability is permanent since he was unable to work from the time he was medically repatriated on September 17, 2001 up to the time the complaint was filed on April 25, 2002, or more than 7 months. Moreover, if in fact Suganob is clear and fit to work on October 29, 2001, he would have been taken back by petitioners to continue his work as a Chief Cook, but he was not. His disability is undoubtedly permanent. Total disability, on the other hand, does not mean absolute helplessness. In disability compensation, it is not the injury which is compensated, but rather the incapacity to work resulting in the impairment of ones earning capacity. 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 his usual work and earn therefrom. Both the companydesignated physician and Suganobs physician found that Suganob is unfit to continue his duties as a Chief Cook since his illness prevented him from continuing his duties as such. Due to his illness, he can no longer perform work which is part of his daily routine as Chief Cook like lifting heavy loads of frozen meat, fish, water, etc. when preparing meals for the crew members. Hence, Suganobs disability is also total. (Emphasis supplied) 14

(JOELSON O. ILORETA v. PHILIPPINE TRANSMARINE CARRIERS, INC., G.R. NO. 183908, December 4, 2009) As with all other kinds of worker, the terms and conditions of a seafarers employment is governed by the provisions of the contract he signs at the time he is hired. But unlike that of others, deemed written in the seafarers contract is a set of standard provisions set and implemented by the POEA, called the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels, which are considered to be the minimum requirements acceptable to the government for the employment of Filipino seafarers on board foreign ocean-going vessels. Thus, the issue of whether petitioner Nisda can legally demand and claim disability benefits from respondents Sea Serve and ADAMS for an illness suffered is best addressed by the provisions of his POEA-SEC, which incorporated the Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels. When petitioner Nisda was employed on 7 August 2001, it was the 2000 Amended Standard Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels (hereinafter referred to simply as Amended Standard Terms and Conditions for brevity) that applied and were deemed written in or appended to his POEA-SEC. (CARLOS N. NISDA v. SEA SERVE MARITIME AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, July 23, 2009) Given a seafarers entitlement to permanent disability benefits when he is unable to work for more than 120 days, the failure of the company-designated physician to pronounce petitioner fit to work within the 120-day period entitles him to permanent total disability benefit in the amount of US$60,000.00. (LEOPOLDO ABANTE v. KJGS FLEET MANAGEMENT MANILA G.R. No. 182430, December 4, 2009) Dismissal In the present case, we significantly note that petitioner, after filing her explanation in response to the employers July 1, 1997 memo, never asked for any clarificatory hearing during the plant-level proceedings. She also had ample opportunity to explain her side vis-vis the principal charge against her her involvement in the incident of June 30, 1997 . It is a matter of record that the petitioner lost no time in submitting the required explanation, as she submitted it on the very same day that the memo was served on her. The explanation, in Filipino, narrated among others the indifferent and discriminatory treatment she had been receiving from the group of Nilo Echavez, which she also told her husband who got mad. Taken together with the testimonies of other witnesses who gave their statements on how 15

the petitioner encouraged her husband to attack Echavez (all of which were duly and seasonably disclosed), the petitioner cannot claim that the respondent company did not give her ample opportunity to be heard. All told, we are convinced that the respondent company acted based on a valid cause for dismissal and observed the required procedures in so acting. (ROSARIO A. GATUS v. QUALITY HOUSE, INC. and CHRISTOPHER CHUA, G.R. No. 156766, April 16, 2009) Constructive Dismissal

Case law holds that constructive dismissal occurs when there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank or diminution in pay or both; or when a clear discrimination, insensibility, or disdain by an employer becomes unbearable to the employee. Respondents sudden, arbitrary and unfounded adoption of the two-day work scheme which greatly reduced petitioners salaries renders it liable for constructive dismissal. (FE LA ROSA et. al., v. AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009) What thus surfaces is that petitioner was constructively dismissed. No actual dismissal might have occurred in the sense that petitioner was not served with a notice of termination, but there was constructive dismissal, petitioner having been placed in a position where continued employment was rendered impossible and unreasonable by the circumstances indicated above. (ODILON L. MARTINEZ v. B&B FISH BROKER/NORBERTO M. LUCINARIO, G.R. No. 179985, September 18, 2009) Time and again we have ruled that in constructive dismissal cases, 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 demonstrate that the transfer is not unreasonable, inconvenient, or prejudicial to the employee and that the transfer does not involve a demotion in rank or a diminution of salary and other benefits. If the employer fails to overcome this burden of proof, the employees transfer is tantamount to unlawful constructive dismissal. (MERCK SHARP AND DOHME (PHILIPPINES) v. JONAR P. ROBLES, et al., G.R. No. 176506, November 25, 2009) These discriminatory acts were calculated to make petitioner feel that he is no longer welcome nor needed in respondent company short of sending him an actual notice of termination. We, therefore, hold that respondent constructively dismissed petitioner from the service. (RAMON B. FORMANTES v. DUNCAN PHARMACEUTICALS, PHILS., INC., G.R. No. 170661, December 4, 2009) 16

In the present case, the petitioners ceased verbally communicating with the respondent and giving him work assignment after suspecting that he had forged purchase receipts. Under this situation, the respondent was forced to leave the petitioners compound with his family and to transfer to a nearby place. Thus, the respondents act of leaving the petitioners premises was in reality not his choice but a situation the petitioners created. (CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 177664, December 23, 2009) Dismissal of Managerial Employees

In view of the lack of proper investigation into the charges against respondent, petitioners failed to show that they have a just cause for terminating his employment. Respondents alleged infractions amount to nothing more than bare accusations and unilateral conclusions that do not provide legal justification for his termination from employment. Although petitioners have wider latitude of discretion in terminating respondent, who was a managerial employee, it is nonetheless settled that confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation. Such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. Managerial employees, no less than rank-and-file laborers are entitled to due process. (CASA CEBUANA INCORPORADA and ANGELA FIGUEROA PAULIN v. IRENEO P. LEUTERIO, G.R. No. 176040, September 4, 2009) Dismissal due to Union Security Clauses

Nonetheless, while We uphold dismissal pursuant to a union security clause, the same is not without a condition or restriction. For to allow its untrammeled enforcement would encourage arbitrary dismissal and abuse by the employer, to the detriment of the employees. Thus, to safeguard the rights of the employees, We have said time and again that dismissals pursuant to union security clauses are valid and legal, subject only to the requirement of due process, that is, notice and hearing prior to dismissal. In like manner, We emphasized that the enforcement of union security clauses is authorized by law, provided such enforcement is not characterized by arbitrariness, and always with due process. (Herminigildo Inguillo and Zenaida Bergante v. First Philippine Scales, Inc. and/or Amparo Policarpio, Manager, G.R. No. 165407, June 5, 2009) Dismissal of Union Officer 17

Note that the verb participates is preceded by the adverb knowingly. This reflects the intent of the legislature to require knowledge as a condition sine qua non before a union officer can be dismissed from employment for participating in an illegal strike. The provision is worded in such a way as to make it very difficult for employers to circumvent the law by arbitrarily dismissing employees in the guise of exercising management prerogative. This is but one aspect of the States constitutional and statutory mandate to protect the rights of employees to self-organization. (CLUB FILIPINO, INC. and ATTY. ROBERTO F. DE LEON v. benjamin bautista, et. al., G.R. No. 168406, July 13, 2009) Illegal Dismissal

With the finding that Interserve was engaged in prohibited laboronly contracting, petitioner shall be deemed the true employer of respondents. As regular employees of petitioner, respondents cannot be dismissed except for just or authorized causes, none of which were alleged or proven to exist in this case, the only defense of petitioner against the charge of illegal dismissal being that respondents were not its employees. Records also failed to show that petitioner afforded respondents the twin requirements of procedural due process, i.e., notice and hearing, prior to their dismissal. Respondents were not served notices informing them of the particular acts for which their dismissal was sought. Nor were they required to give their side regarding the charges made against them. Certainly, the respondents dismissal was not carried out in accordance with law and, therefore, illegal. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. AGITO, et al., G.R. No. 179546, February 13, 2009) As the employer, petitioner has the burden of proving that the dismissal of petitioner was for a cause allowed under the law and that petitioner was afforded procedural due process. Petitioner failed to discharge this burden. Indeed, it failed to show any valid or authorized cause under the Labor Code which allowed it to terminate the services of individual respondents. Neither did petitioner show that individual respondents were given ample opportunity to contest the legality of their dismissal. No notice of such impending termination was ever given to them. Individual respondents were definitely denied due process. Having failed to establish compliance with the requirements on termination of employment under the Labor Code, the dismissal of individual respondents was tainted with illegality. (ILIGAN CEMENT CORPORATION v. ILIASCOR EMPLOYEES AND WORKERS UNION SOUTHERN PHILIPPINES FEDERATION OF LABOR (IEWU-SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No. 158956, April 24, 2009) 18

In this case, we find no overt act on the part of petitioner that he was ready to sever his employment ties. The alleged resignation was actually premised by respondents only on the filing of the complaint for separation pay, but this alone is not sufficient proof that petitioner intended to resign from the company. What strongly negates the claim of resignation is the fact that petitioner filed the amended complaint for illegal dismissal immediately after he was not allowed to report for work on June 3, 2000. Resignation is inconsistent with the filing of the complaint for illegal dismissal. It would have been illogical for petitioner to resign and then file a complaint for illegal dismissal later on. If petitioner was determined to resign, as respondents posited, he would not have commenced the action for illegal dismissal. Undeniably, petitioner was unceremoniously dismissed in this case. (BALTAZAR L. PAYNO v. ORIZON TRADING CORP. / ORATA TRADING and FLORDELIZA LEGASPI, G.R. No. 175345, August 19, 2009) Therefore, this Court finds no reason to disturb its finding that the retrenchment of the flight attendants was illegally executed. As held in the Decision sought to be reconsidered, PAL failed to observe the procedure and requirements for a valid retrenchment. Assuming that PAL was indeed suffering financial losses, the requisite proof therefor was not presented before the NLRC which was the proper forum. More importantly, the manner of the retrenchment was not in accordance with the procedure required by law. Hence, the retrenchment of the flight attendants amounted to illegal dismissal. Consequently, the flight attendants affected are entitled to the reliefs provided by law, which include backwages and reinstatement or separation pay, as the case may be. (FLIGHT ATTENDANTS AND STEWARDS ASSOCIATION OF THE PHILIPPINES (FASAP), v. PHILIPPINE AIRLINES, INC.,PATRIA CHIONG and COURT OF APPEALS,G.R. No. 178083, October 2, 2009) Clearly, Bolanoss case is one of illegal dismissal. First, there is no just or authorized cause for petitioners to terminate her employment. Her alleged act of dishonesty of passing out food for free was not proven. Neither was there incompetence on her part when some food items were not punched in the cash register as she was not the cashier manning it when the food items were ordered. In fact, the other cashier even owned up to said mistake. Second, Bolanos was not afforded due process by petitioners before she was dismissed. A day after the incident, she was verbally dismissed from her employment without being given the chance to be heard and defend herself. (HENLIN PANAY COMPANY v. NATIONAL LABOR RELATIONS COMMISSION , G.R. No. 180718, October 23, 2009)

19

In fine, as petitioners failed to indubitably prove that respondents were guilty of drug use in contravention of its drug-free workplace policy amounting to serious misconduct, respondents are deemed to have been illegally dismissed. (PLANTATION BAY RESORT and SPA v. ROMEL S. DUBRICO, et al., G.R. No. 182216, December 4, 2009)

Docket Fees Anent petitioner's claim regarding respondent's failure to pay the full amount of docket fees at the time of the filing of the petition with the CA, we find that it is estopped from questioning the jurisdiction of the CA on this ground, because such issue had never been raised in any of the pleadings filed before the CA. Notably, the CA issued a minute resolution dated June 7, 1999 requiring respondent to remit the amount of P510.00 to complete the docket and other fees. Respondent complied, but due to inadvertence, the amount remitted lacked the amount of P10.00, thus, the CA in a Resolution dated November 22, 1999, considered the appeal abandoned pursuant to Section 1(c), Rule 50 of the 1997 Rules of Court. Upon respondent's motion for reconsideration, the appeal was reinstated on February 22, 2000. Petitioner was copy-furnished all the resolutions issued by the CA, but petitioner never raised the issue of incomplete payment of docket fees. In fact, such issue was only raised for the first time in its Reply filed with us. (EMCOR INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009) Doctrine of Strained Relationship To protect the employees security of tenure, the Court has emphasized that the doctrine of strained relations should be strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement. Every labor dispute almost always results in strained relations, and the phrase cannot be given an overarching interpretation; otherwise, an unjustly dismissed employee can never be reinstated. The assumption of strained relations was already debunked by the fact that as early as March 2006 petitioner returned to work for respondent CCBP, without any antagonism having been reported thus far by any of the parties. Neither can we sustain the NLRCs conclusion that petitioners position is confidential in nature. Receipt of proceeds from sales of respondent CCBPs products does not make petitioner a confidential employee. A confidential employee is one who (1) assists or acts in a confidential capacity, in regard to (2) 20

persons who formulate, determine, and effectuate management policies specifically in the field of labor relations. Verily, petitioners job as a salesman does not fall under this qualification. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551, February 10, 2009) In the present case, reinstatement is no longer feasible because of the strained relations between the petitioners and the respondent. Time and again, this Court has recognized that strained relations between the employer and employee is an exception to the rule requiring actual reinstatement for illegally dismissed employees for the practical reason that the already existing antagonism will only fester and deteriorate, and will only worsen with possible adverse effects on the parties, if we shall compel reinstatement; thus, the use of a viable substitute that protects the interests of both parties while ensuring that the law is respected. (CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 177664, December 23, 2009) In conclusion, it bears to stress that it is human nature that some hostility will inevitably arise between parties as a result of litigation, but the same does not always constitute strained relations in the absence of proof or explanation that such indeed exists. (REYNALDO G. CABIGTING v. SAN MIGUEL FOODS, INC, G.R. No. 167706, November 5, 2009) Downsizing Scheme This, in turn, gives rise to another question: Does the implementation of the downsizing scheme preclude petitioner from availing the services of contractual and agency-hired employees? In Asian Alcohol Corporation v. National Commission, we answered in the negative. We said: Labor Relations

In any event, we have held that an employers good faith in implementing a redundancy program is not necessarily destroyed by availment of the services of an independent contractor to replace the services of the terminated employees. We have previously ruled that the reduction of the number of workers in a company made necessary by the introduction of the services of an independent contractor is justified when the latter is undertaken in order to effectuate more economic and efficient methods of production. In the case at bar, private respondent failed to proffer any proof that the management acted in a malicious or arbitrary manner in engaging the services of an independent contractor to operate the Laura wells. Absent such proof, 21

the Court has no basis to interfere with the bona fide decision of management to effect more economic and efficient methods of production. With petitioners downsizing scheme being valid, and the availment of contractual and agency-hired employees legal, the strike staged by officers and members of respondent Union is, perforce, illegal. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATTNATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, 2009)

Due Process 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.( ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No. 182570, January 27, 2009) In the dismissal of employees, it has been consistently held that the twin requirements of notice and hearing are essential elements of due process. Article 277 (b) of the Labor Code and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code require the employer to furnish the employee with two written notices, to wit: (1) 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; and (2) 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. The first notice which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the employers decision to dismiss him. With regard to the requirement of a hearing, it should be stressed 22

that the essence of due process lies simply in an opportunity to be heard, and not that an actual hearing should always and indispensably be held. (PHILIPPINE PASAY CHUNG HUA ACADEMY and EMILIO CHING v. SERVANDO L. EDPAN, G.R. No. 168876, SERVANDO L. EDPAN v. PHILIPPINE PASAY CHUNG HUA ACADEMY and EMILIO CHING) Nonetheless, Section 2(d), Rule I of the Implementing Rules of Book VI of the Labor Code should not be taken to mean that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in termination of employment. The test for the fair procedure guaranteed under Article 277(b) cannot be whether there has been a formal pretermination confrontation between the employer and the employee. The ample opportunity to be heard standard is neither synonymous nor similar to a formal hearing. To confine the employees right to be heard to a solitary form narrows down that right. It deprives him of other equally effective forms of adducing evidence in his defense. Certainly, such an exclusivist and absolutist interpretation is overly restrictive. The very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation. (FELIX B. PEREZ and AMANTE G. DORIA vs. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS SANTIAGO, G.R. No. 152048, April 7, 2009) Also, to effectively dismiss an employee for abandonment, the employer must comply with the due process requirement of sending notices to the employee. In Brahm Industries, Inc. v. NLRC, we ruled that this requirement is not a mere formality that may be dispensed with at will. Its disregard is a matter of serious concern since it constitutes a safeguard of the highest order in response to mans innate sense of justice. Petitioner was not able to send the necessary notice requirement to Eleonor. Petitioners belated claim that it was not able to send the notice of infraction prior to the filing of the illegal dismissal case cannot simply unacceptable. Based on the foregoing, Eleonor did not abandon her work. (SOUTH DAVAO DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION) AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009) The case of Agabon v. NLRC, et al. applies to the case at bar. In Agabon, the dismissal was found by the Court to be based on a just cause because the employee abandoned his work. But it also found that the employer did not follow the notice requirement demanded by due process. It ruled that this violation of due process on the part of the employer did not nullify the dismissal, or render it illegal, or ineffectual. Nonetheless, the employer was ordered to indemnify the 23

employee for the violation of his right to due process. It further held that the penalty should be in the nature of indemnification, in the form of nominal damages and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer. The amount of such damages is addressed to the sound discretion of the court, considering the relevant circumstances. Thus, in Agabon, the Court ordered the employer to pay the employee nominal damages in the amount of P30,000.00. (MANTLE TRADING SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July 28,2009) Had Metros cause for terminating Aman rested on a just or authorized cause yet failed to observe procedural requirements, then Metro will only be liable for nominal damages worth P30,000. However, such is not the case here. We hold that Amans dismissal not only failed to observe procedural requirements, it also lacked an authorized cause. Article 279 of the Labor Code mandates that the employee who is illegally dismissed and not given due process is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. (METRO CONSTRUCTION, INC. V. ROGELIO AMAN, G.R. No. 168324, October 12, 2009) In the present case, Jose, Jr. was not given any written notice about his dismissal. However, the propriety of Jose, Jr.s dismissal is not affected by the lack of written notices. When the dismissal is for just cause, the lack of due process does not render the dismissal ineffectual but merely gives rise to the payment of P30,000 in nominal damages. (BERNARDO B. JOSE, JR. v. MICHAELMAR PHILS., INC., G.R. No. 169606, November 27, 2009) In cases of abandonment of work, the ground alleged by respondents, notice shall be served at the workers last known address. Here, no such notice was served to petitioner. Hence, for breach of the due process requirements, respondents shall also be liable in the amount of P30,000 as indemnity in the form of nominal damages. (CONCEPCION FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499, October 2, 2009) The petitioners clearly failed to comply with the two-notice requirement. Nothing in the records shows that the petitioners ever sent the respondent a written notice informing him of the ground for which his dismissal was sought. It does not also appear that the petitioners held a hearing where the respondent was given the 24

opportunity to answer the charges of abandonment. Neither did the petitioners send a written notice to the respondent informing the latter that his service had been terminated and the reasons for the termination of employment. Under these facts, the respondents dismissal was illegal. (CRC AGRICULTURAL TRADING and ROLANDO B. CATINDIG v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 177664, December 23, 2009) Employer-Employee Relationship In order to determine the existence of an employer-employee relationship, the Court has frequently applied the four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, or the so called control test, which is considered the most important element. From the time they were hired by petitioner corporation up to the time that they were reassigned to work under Gamos supervision, their status as petitioner corporations employees did not cease. Likewise, payment of their wages was merely coursed through Gamo. As to the most determinative testthe power of control, it is sufficient that the power to control the manner of doing the work exists, it does not require the actual exercise of such power. In this case, it was in the exercise of its power of control when petitioner corporation transferred the copra workers from their previous assignments to work as copraceros. It was also in the exercise of the same power that petitioner corporation put Gamo in charge of the copra workers although under a different payment scheme. Thus, it is clear that an employer-employee relationship has existed between petitioner corporation and respondents since the beginning and such relationship did not cease despite their reassignments and the change of payment scheme. (SOUTH DAVAO DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION) AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009) What is more, respondent PDMC enrolled petitioner Gomez with the Social Security System, the Medicare, and the Pag-Ibig Fund. It even issued certifications dated October 10, 2008, stating that Gomez was a permanent employee and that the company had remitted combined contributions during her tenure. The company also made her a member of the PDMCs savings and provident plan and its retirement plan. It grouped her with the managers covered by the companys group hospitalization insurance. Likewise, she underwent regular employee performance appraisals, purchased stocks through the employee stock option plan, and was entitled to vacation and 25

emergency leaves. PDMC even withheld taxes on her salary and declared her as an employee in the official Bureau of Internal Revenue forms. These are all indicia of an employer-employee relationship which respondent PDMC failed to refute. (GLORIA V. GOMEZ v. PNOC DEVELOPMENT AND MANAGEMENT CORPORATION, G.R. No. 174044, November 27, 2009) Control Test

In the case at bench, both the Labor Arbiter and the NLRC were one in their conclusion that respondents were not independent contractors, but employees of petitioner. In determining the existence of an employer-employee relationship between the parties, both the Labor Arbiter and the NLRC examined and weighed the circumstances against the four-fold test which has the following elements: (1) the power to hire, (2) the payment of wages, (3) the power to dismiss, and (4) the power to control the employees conduct, or the so-called control test. Of the four, the power of control is the most important element. More importantly, the control test merely calls for the existence of the right to control, and not necessarily the exercise thereof. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009) In this regard, it has not escaped the notice of the Court that the operations of the hotel itself do not cease with the end of each event or function and that there is an ever present need for individuals to perform certain tasks necessary in the petitioners business. Thus, although the tasks themselves may vary, the need for sufficient manpower to carry them out does not. In any event, as borne out by the findings of the NLRC, the petitioner determines the nature of the tasks to be performed by the private respondent, in the process exercising control. (MARANAW HOTELS AND RESORT CORP vs COURT OF APPEALS, SHERYL OABEL AND MANILA RESOURCE DEVELOPMENT CORP., G.R. No. 149660, January 20, 2009) Contrary to petitioners contention, the various office directives issued by Shangri-las officers do not imply that it is Shangri-las management and not respondent doctor who exercises control over them or that Shangri-la has control over how the doctor and the nurses perform their work. The letter addressed to respondent doctor dated February 7, 2003 from a certain Tata L. Reyes giving instructions regarding the replenishment of emergency kits is, at most, administrative in nature, related as it is to safety matters; while the letter dated May 17, 2004 from Shangri-las Assistant Financial Controller, Lotlot Dagat, forbidding the clinic from receiving cash payments from the resorts guests is a matter of financial policy in 26

order to ensure proper sharing of the proceeds, considering that Shangri-la and respondent doctor share in the guests payments for medical services rendered. In fine, as Shangri-la does not control how the work should be performed by petitioners, it is not petitioners employer. (JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. SHANGRI-LAS MACTAN ISLAND RESORT and DR. JESSICA J.R. PEPITO, G.R. No. 178827, March 4, 2009) To reiterate, while respondent and SSCP no longer had any legal relationship with the termination of the Agreement, petitioners remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. Clearly, such a situation makes no sense, and the denials proffered by respondent do not shed any light to the situation. It is but reasonable to conclude that, with the behest and, presumably, directive of respondent, petitioners continued with their services. Evidently, such are indicia of control that respondent exercised over petitioners. (RAUL G. LOCSIN and EDDIE B. TOMAQUIN v. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, G.R. No. 185251, October 2, 2009) Equity While the Court commiserates with the plight of Tirazona, who has recently manifested that she has since been suffering from her poor health condition, the Court cannot grant her plea for the award of financial benefits based solely on this unfortunate circumstance. For all its conceded merit, equity is available only in the absence of law and not as its replacement. Equity as an exceptional extenuating circumstance does not favor, nor may it be used to reward, the indolent or the wrongdoer, for that matter. This Court will not allow a party, in the guise of equity, to benefit from its own fault. (MA. WENELITA S. TIRAZONA, vs. PHILIPPINE EDS TECHNO- SERVICE INC. (PET INC.) AND/OR KEN KUBOTA, MAMORU ONO and JUNICHI HIROSE, G.R. No. 169712, January 20, 2009) Estoppel Estoppel, an equitable principle rooted on natural justice, prevents a person from rejecting his previous acts and representations to the prejudice of others who have relied on them. This principle of law applies to corporations as well. The PDMC in this case is estopped from claiming that despite all the appearances of regular employment that it weaved around petitioner Gomezs position it must have technically hired her only as a corporate officer. The board and its officers made her stay on and work with the company for years under the belief that she held a regular managerial position. (GLORIA V. 27

GOMEZ v. PNOC DEVELOPMENT AND MANAGEMENT CORPORATION, G.R. No. 174044, November 27, 2009) Evidence It may be true that the NBI agents affidavit did not directly implicate petitioners in the scheme. However, their co-employees Gimena, Welsh and Derupe, who had personal knowledge of petitioners activities, narrated in their affidavits the nature, dates and time of their (petitioners) participation. Petitioners did not refute these sworn statements. Neither did they explain why their former colleagues would unjustly and falsely testify against them even if they had the opportunity to defend themselves during the administrative investigations conducted by respondent. These pieces of evidence, when taken together, constituted substantial evidence to prove petitioners culpability. It is of no moment that they were acquitted in the criminal case. Petitioners infractions were willful and serious, thus their dismissal was proper under the circumstances. (RENITA DEL ROSARIO, et al., v. MAKATI CINEMA SQUARE CORPORATION, G.R. No. 170014, July 3, 2009) It is common practice for companies to provide identification cards to individuals not only as a security measure, but more importantly to identify the bearers thereof as bona fide employees of the firm or institution that issued them. The provision of companyissued identification cards and uniforms to respondents, aside from their inclusion in MCIs summary payroll, indubitably constitutes substantial evidence sufficient to support only one conclusion: that respondents were indeed employees of MCI. (MASONIC CONTRACTOR, INC. v. MAGDALENA MADJOS , et al., G.R. No. 185094, November 25, 2009)

Proof of Mailing

In this case and in like manner, while a postmasters certification is usually sufficient proof of mailing, its evidentiary value must be differentiated from the situation presently before us where the postmasters certification is intended to prove that the post office had committed a mistake in placing the date of receipt on the registry return card. In other words, the Postmasters certification is offered to overcome the presumption that the Malate Post Office regularly performed its official duties when the registry return card was filled up by the recipient of the labor arbiters decision with November 21, 1999 as the date of receipt. We find it significant that both the petitioner and 28

the postmasters certification failed to show that the Malate Post Office committed an inadvertence in handling the registry return card so that a corrective certification from the Postmaster was necessary. In the absence of such justification for the certification, we are compelled to deny it of any evidentiary value for the purpose it was submitted. (EUREKA PERSONNEL & MANAGEMENT SERVICES, INC. v. EDUARDO VALENCIA, G.R. No. 159358, July 15, 2009) Execution We would like to stress the settled rule that the power of the court in executing judgments extends only to properties unquestionably belonging to the judgment debtor alone. To be sure, one mans goods shall not be sold for another mans debts. A sheriff is not authorized to attach or levy on property not belonging to the judgment debtor, and even incurs liability if he wrongfully levies upon the property of a third person. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705) Finality of Factual Findings The well-entrenched rule is that factual findings of administrative or quasi-judicial bodies, which are deemed to have acquired expertise in matters within their respective jurisdictions, are generally accorded not only respect but even finality, and bind the Court when supported by substantial evidence. Section 5, Rule 133 defines substantial evidence as that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009) Lastly, in its assailed decision, the CA affirmed the ruling of the NLRC and adopted as its own the latter's factual findings. Longestablished is the doctrine that findings of fact of quasi-judicial bodies like the NLRC are accorded respect, even finality, if supported by substantial evidence. When passed upon and upheld by the CA, they are binding and conclusive upon the Supreme Court and will not normally be disturbed. Though this doctrine is not without exceptions, the Court finds that none are applicable to the present case. ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No. 182570, January 27, 2009)

29

Exception

The appellate court predicated its reversal of the NLRC decision that petitioners were illegally dismissed on petitioners supposed abandonment of their jobs, and justified the work rotation/reduction scheme adopted by respondent as a valid exercise of management prerogative in light of respondents business losses. (FE LA ROSA et. al., v. AMBASSADOR HOTEL,G.R. No. 177059, March 13, 2009) The issue of the reasonableness of attorney's fees is a question of fact. Well-settled is the rule that conclusions and findings of fact of the CA are entitled to great weight on appeal and will not be disturbed except for strong and cogent reasons which are absent in the case at bench. The findings of the CA, which are supported by substantial evidence, are almost beyond the power of review by the Supreme Court. (EVANGELINA MASMUD (as substitute complainant for ALEXANDER J. MASMUD) v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 183385, February 13, 2009) Petitioner's argument that the CA erred and abused its discretion in reversing the findings of the Labor Arbiter and the NLRC, as it is the court's policy of non-interference in the exercise of the adjudicatory functions of the administrative bodies, is devoid of merit. We agree with petitioner 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. The CA can grant the petition for certiorari if it finds that the NLRC, in its assailed decision or resolution, made a factual finding not supported by substantial evidence. It is within the jurisdiction of the CA, whose jurisdiction over labor cases has been expanded to review the findings of the NLRC. In R & E Transport, Inc. v. Latag, we held: The power of the CA to review NLRC decisions via a Rule 65 petition is now a settled issue. As early as St. Martin Funeral Homes v. NLRC, we have definitively ruled that the proper remedy to ask for the review of a decision of the NLRC is a special civil action for certiorari under Rule 65 of the Rules of Court, and that such petition should be filed with the CA in strict observance of the doctrine on the hierarchy of courts. Moreover, it has already been explained that under Section 9 of Batas Pambansa (BP) 129, as amended by Republic Act 7902, the CA pursuant to the exercise of its original jurisdiction over petitions for certiorari was specifically given the power to pass upon the evidence, if and when necessary, to resolve factual issues.(EMCOR

30

INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009) Forum Shopping On the part of Mr. Gumarang, knowing fully well that he was no longer the representative of the NCTEA, why did he not inform both the Court of Appeals and the Supreme Court of such fact when he filed the petitions? Instead, he claimed to be the duly authorized representative of the NCTEA which he was not. His omission and misrepresentation are clear indications of bad faith of which this Court does not approve. He should have known that by including NCTEA as petitioner and signing as its representative, he should have had the authority to do so. This, he did not possess. When he alone signed on his behalf and that of the NCTEA, not once but twice, he flagrantly violated the rule on the filing of a certificate of non-forum shopping. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009) Without the required authority from the NCTEA, Mr. Gumarang cannot represent the NCTEA. As explained above, if there are several petitioners, the failure of one to sign the certificate of non-forum shopping is a deficiency which is a ground for the dismissal of the petition. In the case before us, there being two petitioners NCTEA and Mr. Gumarang both of them should sign the certificate against forum shopping. Since there was only one signatory, the requirement on the filing of the certificate against forum shopping has not been complied with. As in the Court of Appeals, Mr. Gumarang failed to show why the duly authorized representative of the NCTEA was unable to sign the certification, and to convince this Court that the outright dismissal of the petition would defeat the administration of justice. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009) Fuentebella and Rolling Hills Memorial Park v. Castro, requirement of a certification against forum shopping, explains: The reason for this is that the principal party has actual knowledge whether a petition has previously been filed involving the same case or substantially the same issues. If, for any reason, the principal party cannot sign the petition, the one signing on his behalf must have been duly authorized. on the

31

. . . Where the petitioner is a corporation, the certification against forum shopping should be signed by its duly authorized director or representative [I]f the real party-in-interest is a corporate body, an officer of the corporation can sign the certification against forum shopping as long as he is authorized by a resolution of its board of directors. xxxx A certification without the proper authorization is defective and constitutes a valid cause for the dismissal of the petition. (Citations omitted; emphasis, italics and underscoring supplied) Petitioners discourse on relaxation of technical rules of procedure in the interest of substantial justice does not impress. While there have been instances when the Court dispensed with technicalities on the basis of special circumstances or compelling reasons, there is no such circumstance or reason in the present case which warrants the liberal application of technical rules. (EAGLE STAR SECURITY SERVICES, INC. v. BONIFACIO L. MIRANDO, G.R. No. 179512, July 30, 2009) Grave Abuse of Discretion The Regional Director fully relied on the self-serving allegations of respondent and misinterpreted the documents presented as evidence by respondent. To make matters worse, DOLE denied petitioners appeal based solely on petitioners alleged failure to file a cash or surety bond, without any discussion on the merits of the case. Since the petition for certiorari before the Court of Appeals sought the reversal of the two aforesaid orders, the appellate court necessarily had to examine the evidence anew to determine whether the conclusions of the DOLE were supported by the evidence presented. It appears, however, that the Court of Appeals did not even review the assailed orders and focused instead on a general discussion of due process and the jurisdiction of the Regional Director. Had the appellate court truly reviewed the records of the case, it would have seen that there existed valid and sufficient grounds for finding grave abuse of discretion on the part of the DOLE Secretary as well the Regional Director. In ruling and acting as it did, the Court finds that the Court of Appeals may be properly subjected to its certiorari jurisdiction. After all, this Court has previously ruled that the extraordinary writ of certiorari will lie if it is satisfactorily 32

established that the tribunal had acted capriciously and whimsically in total disregard of evidence material to or even decisive of the controversy. (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009) Hearing A hearing means that a party should be given a chance to adduce his evidence to support his side of the case and that the evidence should be taken into account in the adjudication of the controversy. To be heard does not mean verbal argumentation alone inasmuch as one may be heard just as effectively through written explanations, submissions or pleadings. Therefore, while the phrase ample opportunity to be heard may in fact include an actual hearing, it is not limited to a formal hearing only. In other words, the existence of an actual, formal trial-type hearing, although preferred, is not absolutely necessary to satisfy the employees right to be heard. (FELIX B. PEREZ and AMANTE G. DORIA vs. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY and JOSE LUIS SANTIAGO, G.R. No. 152048, April 7, 2009) Dialogue not Tantamount to Hearing

Policarpio's allegations are self-serving. Except for her claim as stated in the respondent's Position Paper, nowhere from the records can We find that Bergante and Inguillo were accorded the opportunity to present evidence in support of their defenses. Policarpio relied heavily on the Petisyon of FPSILU. She failed to convince Us that during the dialogue, she was able to ascertain the validity of the charges mentioned in the Petisyon. In her futile attempt to prove compliance with the procedural requirement, she reiterated that the objective of the dialogue was to provide the employees the opportunity to receive the act of grace of FPSI by giving them an amount equivalent to one-half () month of their salary for every year of service. We are not convinced. We cannot even consider the demand and counter-offer for the payment of the employees as an amicable settlement between the parties because what took place was merely a discussion only of the amount which the employees are willing to accept and the amount which the respondents are willing to give. Such non-compliance is also corroborated by Bergante and Inguillo in their pleadings denouncing their unjustified dismissal. In fine, We hold that the dialogue is not tantamount to the hearing or conference prescribed by law. (Herminigildo Inguillo and Zenaida 33

Bergante v. First Philippine Scales, Inc. and/or Amparo Policarpio, Manager, G.R. No. 165407, June 5, 2009 Inchoate Right Again, the contention is bereft of merit. While PNB has an apparent interest in Mega Primes assets being the creditor of the latter for a substantial amount, its interest remains inchoate and has not yet ripened into a present substantial interest, which would give it the standing to maintain an action involving the subject properties. As aptly observed by the Labor Arbiter, PNB only has an inchoate right to the properties of Mega Prime in case the latter would not be able to pay its indebtedness. This is especially true in the instant case, as the debt being claimed by PNB is secured by the accessory contract of pledge of the entire stockholdings of Mega Prime to PNB-Madecor. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705) Independent Contractor The existence of an independent and permissible contractor relationship is generally established by considering the following determinants: whether the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and terms of payment. (JEROMIE D. ESCASINAS and EVAN RIGOR SINGCO v. SHANGRI-LAS In sum, there existed no employer-employee relationship between the parties. De Raedt is an independent contractor, who was engaged by SGV to render services to SGVs client TMI, and ultimately to DA on the CECAP project, regarding matters in the field of her special knowledge and training for a specific period of time. Unlike an ordinary employee, De Raedt received retainer fees and benefits such as housing and subsistence allowances and medical insurance. De Raedts services could be terminated on the ground of end of contract between the DA and TMI, and not on grounds under labor laws. Though the end of the contract between the DA and TMI was not the 34

ground for the withdrawal of De Raedt from the CECAP, De Raedt was disengaged from the project upon the instruction of SGVs client, TMI. Most important of all, SGV did not exercise control over the means and methods by which De Raedt performed her duties as Sociologist. SGV did impose rules on De Raedt, but these were necessary to ensure SGVs faithful compliance with the terms and conditions of the SubConsultancy Agreement it entered into with TMI. (SYCIP, GORRES, VELAYO & COMPANY, v. CAROL DE RAEDT, G.R. No. 161366, June 16, 2009) Insubordination Aside from the findings of sexual abuse, petitioner is also guilty of insubordination. Records show that after filing a case for constructive dismissal on April 13, 1994 against the respondent, petitioner continued working and performing his functions with the respondent company until his termination on May 19, 1994. However, despite receipt of the various notices sent by respondent to him to report to the office and to submit written explanations relative to his failure to follow instructions, the records of the case are bereft of showing that he filed any written explanation to any of these notices. His continued failure to carry out the reasonable oral or written instructions of his supervisor is punishable by insubordination, which is provided under Rule IV.5.a of the Operational Instruction OI-A-AP25, Work Rules. While petitioner cannot be faulted in believing that respondent constructively dismissed him from work, he was still, strictly speaking, respondent's employee when he received the written notices. As an employee, he should have at least responded thereto, as instructed. (RAMON B. FORMANTES v. DUNCAN PHARMACEUTICALS, PHILS., INC., G.R. No. 170661, December 4, 2009) Interpretation of Doubt We reject petitioners self-serving contention. Having failed to substantiate its allegation on the relationship between the parties, we stick to the settled rule in controversies between a laborer and his master that doubts reasonably arising from the evidence should be resolved in the formers favor. The policy is reflected in no less than the Constitution, Labor Code and Civil Code. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009) The relations between capital and labor are so impressed with public interest, and neither shall act oppressively against the other, or impair the interest or convenience of the public. In case of doubt, all 35

labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf oftheir daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99, April 7, 2009) Job contracting or Subcontracting Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out with a contractor or subcontractor the performance of a specific job, work, or service within a definite or predetermined period, regardless of whether such job, work or, service is to be performed or completed within or outside the premises of the principal. Under this arrangement, the following conditions must be met: (a) the contractor carries on a distinct and independent business and undertakes the contract work on his account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of his work except as to the results thereof; (b) the contractor has substantial capital or investment; and (c) the agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social welfare benefits. (RAMY GALLEGO v. BAYER PHILIPPINES, INC., DANPIN GUILLERMO, PRODUCT IMAGE MARKETING, INC., and EDGARDO BERGONIA, G.R. No. 179807, July 31, 2009) Joint Venture To the Court, the Contract between the Cooperative and DFI, far from being a job contracting arrangement, is in essence a business partnership that partakes of the nature of a joint venture. The rules on job contracting are, therefore, inapposite. The Court may not alter the intention of the contracting parties as gleaned from their stipulations without violating the autonomy of contracts principle under Article 1306 of the Civil Code which gives the contracting parties the utmost liberality and freedom to establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good custom, public order or public policy. (OLDARICO S. TRAVEO, et al v. BOBONGON BANANA GROWERS

36

MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. 164205, September 3, 2009) Judgment We disfavor delay in the enforcement of the labor arbiters decision. Once a judgment becomes final and executory, the prevailing party should not be denied the fruits of his victory by some subterfuge devised by the losing party. Final and executory judgments can neither be amended nor altered except for correction of clerical errors, even if the purpose is to correct erroneous conclusions of fact or of law. Trial and execution proceedings constitute one whole action or suit such that a case in which execution has been issued is regarded as still pending so that all proceedings in the execution are proceedings in the suit. (C-E CONSTRUCTION CORPORATION v. NATIONAL LABOR RELATIONS, G.R. No. 180188, March 25, 2009) Jurisdiction It is a settled rule that jurisdiction over the subject matter is conferred by law. The determination of the rights of a director and corporate officer dismissed from his employment as well as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the regular courts. Thus, the appellate court correctly ruled that it is not the NLRC but the regular courts which have jurisdiction over the present case. (LESLIE OKOL v. SLIMMERS WORLD INTERNATIONAL, BEHAVIOR MODIFICATIONS, INC., G.R. No. 160146, December 11, 2009) In sum, when the labor arbiter proceeded with the consolidated cases despite the SEC suspension order, he exceeded his jurisdiction to hear and decide illegal dismissal cases and the CA correctly reversed his June 16, 2004 order. (GINA M. TIANGCO, et al, v. UNIWIDE SALES WAREHOUSE CLUB, INC., G.R. No. 168697, December 14, 2009) Intra-Corporate Dispute Atty. Garcia tries to deny he is an officer of ETPI. Not being a corporate officer, he argues that the Labor Arbiter has jurisdiction over the case. One of the corporate officers provided for in the by-laws of ETPI is the Vice-President. It can be gathered from Atty. Garcias complaint-affidavit that he was Vice President for Business Support Services and Human Resource Departments of ETPI when his 37

employment was terminated effective 16 April 2000 . It is therefore clear from the by-laws and from Atty. Garcia himself that he is a corporate officer. One who is included in the by-laws of a corporation in its roster of corporate officers is an officer of said corporation and not a mere employee. Being a corporate officer, his removal is deemed to be an intra-corporate dispute cognizable by the SEC and not by the Labor Arbiter. (ATTY. VIRGILIO R. GARCIA v. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON, G.R. No. 173115, EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. and ATTY. SALVADOR C. HIZON v. ATTY. VIRGILIO R. GARCIA, G.R. Nos. 173163-64, April 16, 2009)

Demarcation line Between DOLEs Prerogative and NLRCs Jurisdiction

It can be assumed that the DOLE in the exercise of its visitorial and enforcement power somehow has to make a determination of the existence of an employer-employee relationship. Such prerogatival determination, however, cannot be coextensive with the visitorial and enforcement power itself. Indeed, such determination is merely preliminary, incidental and collateral to the DOLEs primary function of enforcing labor standards provisions. The determination of the existence of employer-employee relationship is still primarily lodged with the NLRC. This is the meaning of the clause in cases where the relationship of employer-employee still exists in Art. 128(b). (PEOPLES BROADCASTING(BOMBO RADYO PHILS., INC.) vs. THE SECRETARY OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR, DOLE REGION VII, and JANDELEON JUEZAN, G.R. No. 179652, May 8, 2009) In sum, respondent contested the findings of the labor inspector during and after the inspection and raised issues the resolution of which necessitated the examination of evidentiary matters not verifiable in the normal course of inspection. Hence, the Regional Director was divested of jurisdiction and should have endorsed the case to the appropriate Arbitration Branch of the NLRC. Considering, however, that an illegal dismissal case had been filed by petitioners wherein the existence or absence of an employer-employee relationship was also raised, the CA correctly ruled that such endorsement was no longer necessary. (VICTOR METEORO, et al v. CREATIVE CREATURES, INC., G.R. No. 171275, July 13, 2009) Labor-only Contractor 38

In sum, Interserve did not have substantial capital or investment in the form of tools, equipment, machineries, and work premises; and respondents, its supposed employees, performed work which was directly related to the principal business of petitioner. It is, thus, evident that Interserve falls under the definition of a labor-only contractor, under Article 106 of the Labor Code; as well as Section 5(i) of the Rules Implementing Articles 106-109 of the Labor Code, as amended. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. AGITO, et al., G.R. No. 179546, February 13, 2009) In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee who is ostensibly under the employ of the labor-only contractor; and (3) the principal who is deemed the real employer. Under this scheme, the labor-only contractor is the agent of the principal. Here, Vedali is the laboronly contractor; individual respondents are the employees and petitioner is the principal. 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. (ILIGAN CEMENT CORPORATION v. ILIASCOR EMPLOYEES AND WORKERS UNION SOUTHERN PHILIPPINES FEDERATION OF LABOR (IEWU-SPFL), AND ITS OFFICERS AND MEMBERS, et. al, G.R. No. 158956, April 24, 2009) Length of Service Although his nearly two decades of service might generally be considered for some form of financial assistance to shield him from the effects of his termination, Tomadas acts reflect a regrettable lack of concern for his employer. If length of service justifies the mitigation of the penalty of dismissal, then this Court would be awarding disloyalty, distorting in the process the meaning of social justice and undermining the efforts of labor to cleanse its ranks of undesirables. (EDUARDO M. TOMADA, SR. v. RFM CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA CONCEPCION III, G.R. No. 163270, September 11, 2009) Liability of Corporate Officers However, Article 212(e) of the Labor Code, by itself, does make a corporate officer personally liable for the debts of corporation because Section 31 of the Corporation Code is still governing law on personal liability of officers for the debts of corporation. Section 31 of the Corporation Code provides: not the the the

39

Liability of directors, trustees or officers. Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons. x x x There was no showing of David willingly and knowingly voting for or assenting to patently unlawful acts of the corporation, or that David was guilty of gross negligence or bad faith. (ARMANDO DAVID v. NATIONAL FEDERATION OF LABOR UNION and MARIVELES APPAREL CORPORATION, G.R. Nos. 148263 and 148271-72, April 21, 2009)

Liability of General Manager Lastly, we come to the issue of whether Wiltschek, as the General Manager, should be personally liable together with M+W Zander. We agree with petitioners that he should not be made personally liable. The general manager of a corporation should not be made personally answerable for the payment of an illegally dismissed employee's monetary claims arising from the dismissal unless he had acted maliciously or in bad faith in terminating the services of the employee. The employer corporation has a separate and distinct personality from its officers who merely act as its agents. (M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009) Liability of Recruitment Agencies and Foreign-Based Employer Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf oftheir daughter, Jasmin G. Cuaresma), 40

WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99, April 7, 2009) Management Prerogative As aptly cited by the CA: The general rule is that the characterization by an employer of an employees services as no longer necessary or sustainable is an exercise of business judgment on the part of the employer. The wisdom or soundness of such a characterization or decision is not, as a general rule, subject to discretionary review on the part of the Labor Arbiter, the NLRC and the CA. Such characterization may, however, be rejected if the same is found to be in violation of the law or is arbitrary or malicious. We find no violations of law in the respondents actions against the petitioner, nor was the respondent arbitrary or influenced by malice in terminating the petitioners employment for redundancy. This ground for termination is a legitimate exercise of management prerogative unless attended to by arbitrariness or by the failure to follow statutory requirements. No arbitrariness or any violations took place in the present case. (MIRIAM B. ELLECCION VDA. DE LECCIONES v. NATIONAL LABOR RELATIONS COMMISSION, NNA PHILIPPINES CO., INC. and MS. KIMI KIMUR A, G.R. No. 184735, September 17, 2009) Transfer

In this case, we find no reason to disturb the conclusion of the Court of Appeals that there was no constructive dismissal. Reassignments made by management pending investigation of violations of company policies and procedures allegedly committed by an employee fall within the ambit of management prerogative. The decision of Quantum Foods to transfer Endico pending investigation was a valid exercise of management prerogative to discipline its employees. The transfer, while incidental to the charges against Endico, was not meant as a penalty, but rather as a preventive measure to avoid further loss of sales and the destruction of Quantum Foods image and goodwill. It was not designed to be the culmination of the then on-going administrative investigation against Endico. (ARNULFO O. ENDICO vs. QUANTUM FOODS DISTRIBUTION CENTER, G.R. No. 161615, January 30, 2009) ATIs transfer of Bismark IVs base from Manila to Bataan was, contrary to Aguanzas assertions, a valid exercise of management 41

prerogative. The transfer of employees has been traditionally among the acts identified as a management prerogative subject only to limitations found in law, collective bargaining agreement, and general principles of fair play and justice. Even as the law is solicitous of the welfare of employees, it must also protect the right of an employer to exercise what are clearly management prerogatives. The free will of management to conduct its own business affairs to achieve its purpose cannot be denied. (GUALBERTO AGUANZA v. ASIAN TERMINAL, INC., KEITH JAMES, RICHARD BARCLAY, and ATTY. RODOLFO CORVITE, G.R. No. 163505, August 14, 2009) Money Claims An employee should be compensated for the work he has rendered in accordance with the minimum wage, and must be appropriately remunerated when he was suffered to work on a regular holiday during the time he was employed by the petitioner company. As regards the 13th month pay, an employee who was terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his termination from the service. (MANTLE TRADING SERVICES, INCORPORATED AND/OR BOBBY DEL ROSARIO v. NATIONAL LABOR RELATIONS COMMISSION and PABLO S. MADRIAGA,G.R. No. 166705,July 28,2009) Motion for Reconsideration In this case, the Decision dated January 18, 2005 of the Secretary of Labor and Employment was received by petitioner on January 25, 2005. It would have become final and executory on February 4, 2005, the tenth day from petitioners receipt of the decision. However, petitioner filed a petition for certiorari with the Court of Appeals on even date. Clearly, petitioner availed of the proper remedy since Department Order No. 40-03 explicitly prohibits the filing of a motion for reconsideration. Such motion becomes dispensable and not at all necessary. (CHRIS GARMENTS CORPORATION vs HON. PATRICIA A. STO. TOMAS and CHRIS GARMENTS WORKERS UNIONPTGWO LOCAL CHAPTER No. 832, G.R. No. 167426, January 12, 2009) NLRC Rules of Procedure Reinstatement Compliance Report

The new NLRC Rules of Procedure, which took effect on January 7, 2006, now require the employer to submit a report of compliance 42

within 10 calendar days from receipt of the Labor Arbiters decision, disobedience to which clearly denotes a refusal to reinstate. The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall thereafter motu proprio issue the writ. With the new rules in place, there is hardly any difficulty in determining the employers intransigence in immediately complying with the order. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009) Liberal Application of the Rules of Procedure

The Court is unimpressed. The gravity of Maralits infraction demands the relaxation of strict rules of procedure. Strict rules of procedure may be set aside to serve the demands of substantial justice. Labor cases must be decided according to justice, equity, and the substantial merits of the controversy. In Azul v. Banco Filipino Savings and Mortgage Bank, the Court held: The seriousness of petitioners infraction demanded the setting aside of strict rules of procedure as to allow the determination on the merits of whether he was lawfully dismissed. As held by the Court, the application of technical rules of procedure may be relaxed to serve the demands of substantial justice, particularly in labor cases, because they must be decided according to justice and equity and the substantial merits of the controversy. There is substantial evidence showing that there was valid cause for the bank to dismiss petitioners employment for loss of trust and confidence. Petitioner was a bank accountant, which is a position of trust and confidence. The amount involved is significant, almost P4.5 million. (ESTER B. MARALIT v. PHILIPPINE NATIONAL BANK, G.R. No. 163788, August 24, 2009) Notice of Change of Address PALs argument that its chaotic situation due to its rehabilitation rendered the filing of a notice of change of address impractical does not merit consideration. Since moving out from its office at Allied Bank Center, where the NLRC decision was sent, PAL occupied four different office addresses. Yet these office addresses could be found in the same building, the PAL Center Building in Makati City. PAL merely moved from one floor to another. To our mind, it would have been more prudent had PAL informed the NLRC that it has moved from one floor to another rather than allowed its old address at Allied Bank Center to remain as its official address. To rule in favor of PAL considering the circumstances in the instant case would negate the 43

purpose of the rules on completeness of service and the notice of change of address, which is to place the date of receipt of pleadings, judgments and processes beyond the power of the party being served to determine at his pleasure. (PHILIPPINE AIRLINES, INC. v. HEIRS OF BERNARDIN J. ZAMORA, G.R. No. 164267, G.R. No. 166996) Overseas Employment Contracts Respondents service award for the sixth contract is equivalent only to half-months pay plus the proportionate amount for the additional nine days of service he rendered after one year. Respondents employment contracts expressly stated that his employment ended upon his departure from work. Each year he departed from work and successively new contracts were executed before he reported for work anew. His service was not cumulative. Pertinently, in Brent School, Inc. v. Zamora, we said that a fixed term is an essential and natural appurtenance of overseas employment contracts, as in this case. We also said in that case that under American law, [w]here a contract specifies the period of its duration, it terminates on the expiration of such period. A contract of employment for a definite period terminates by its own terms at the end of such period. As it is, Article 72 of the Saudi Labor Law is also of similar import. It reads: A labor contract concluded for a specified period shall terminate upon the expiry of its term. If both parties continue to enforce the contract, thereafter, it shall be considered renewed for an unspecified period. (LWV CONSTRUCTION CORPORATION v. MARCELO B. DUPO, G.R. No. 172342, July 13, 2009 In Placewell International Services Corporation v. Camote, we held that the subsequently executed side agreement of an overseas contract worker with the foreign employer is void, simply because it is against our existing laws, morals and public policy. The subsequent agreement cannot supersede the terms of the standard employment contract approved by the POEA. Republic Act No. 8042, commonly known as the Migrant Workers Act of 1995, expressly 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 the actual signing thereof by the parties up to and including the period of the expiration of the same, without the approval of DOLE. Since the second employment contract petitioner Nisda signed with respondent ADAMS was void for not having been sanctioned by the POEA, then petitioner Nisdas employment with respondent ADAMS was still 44

governed by his POEA-SEC until his repatriation to the Philippines on 17 July 2002. (CARLOS N. NISDA v. SEA SERVE MARITIME AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, July 23, 2009) Payment of Wages Pending Appeal In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to comply therewith. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009) Prescriptive Period for Illegal Dismissal The law fixes the period of time within which petitioner could seek remedy for his illegal dismissal and for as long as he filed his Complaint within the prescriptive period, he shall be entitled to the full protection of his right to backwages. In illegal dismissal cases, the employee concerned is given a period of four years from the time of his illegal dismissal within which to institute the complaint. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. Here, petitioner was dismissed from service on 15 September 2001. He filed his complaint for illegal dismissal on 14 June 2004. Clearly, then, the instant case was filed within the prescriptive period. (ERWIN H. REYES v. NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 180551, February 10, 2009) Prescriptive Period for Money Claims In the present case, the earliest incident covered by Article 1155 is the extrajudicial demand which came on January 7, 1995 . As the CA correctly computed, the period for prescription started to run on January 15, 1993 , and was interrupted on January 7, 1995 . UNILAB only answered the petitioners January 7, 1995 letter on February 26, 1996 , with a categorical denial of the petitioners demand; the running of the prescription period re-started on the date of this denial, but again stopped again on August 9, 1996 , when the complaint before the NLRC was filed. Adding all the running periods yields a total of less 45

than three (3) years; hence, the petitioner seasonably filed her monetary claim when she filed her complaint before the NLRC. (JANUARIA A. RIVERA v. UNITED LABORATORIES, INC.,G.R. No. 155639 April 22, 2009) Money Claims - OFWs

In Cadalin v. POEAs Administrator, we held that Article 291 covers all money claims from employer-employee relationship and is broader in scope than claims arising from a specific law. It is not limited to money claims recoverable under the Labor Code, but applies also to claims of overseas contract workers. The following ruling in Cadalin v. POEAs Administrator is instructive: First to be determined is whether it is the Bahrain law on prescription of action based on the Amiri Decree No. 23 of 1976 or a Philippine law on prescription that shall be the governing law. Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of employment shall not be actionable after the lapse of one year from the date of the expiry of the contract x x x. As a general rule, a foreign procedural law will not be applied in the forum. Procedural matters, such as service of process, joinder of actions, period and requisites for appeal, and so forth, are governed by the laws of the forum. This is true even if the action is based upon a foreign substantive law (Restatement of the Conflict of Laws, Sec. 685; Salonga, Private International Law, 131 [1979]). A law on prescription of actions is sui generis in Conflict of Laws in the sense that it may be viewed either as procedural or substantive, depending on the characterization given such a law. xxxx However, the characterization of a statute into a procedural or substantive law becomes irrelevant when the country of the forum has a borrowing statute. Said statute has the practical effect of treating the foreign

46

statute of limitation as one of substance (Goodrich, Conflict of Laws, 152-153 [1938]). A borrowing statute directs the state of the forum to apply the foreign statute of limitations to the pending claims based on a foreign law (Siegel, Conflicts, 183 [1975]). While there are several kinds of borrowing statutes, one form provides that an action barred by the laws of the place where it accrued, will not be enforced in the forum even though the local statute has not run against it (Goodrich and Scoles, Conflict of Laws, 152-153 [1938]). Section 48 of our Code of Civil Procedure is of this kind. Said Section provides: If by the laws of the state or country where the cause of action arose, the action is barred, it is also barred in the Philippine Islands. Section 48 has not been repealed or amended by the Civil Code of the Philippines. Article 2270 of said Code repealed only those provisions of the Code of Civil Procedure as to which were inconsistent with it. There is no provision in the Civil Code of the Philippines, which is inconsistent with or contradictory to Section 48 of the Code of Civil Procedure (Paras, Philippine Conflict of Laws, 104 [7th ed.]). In the light of the 1987 Constitution, however, Section 48 [of the Code of Civil Procedure] cannot be enforced ex proprio vigore insofar as it ordains the application in this jurisdiction of [Article] 156 of the Amiri Decree No. 23 of 1976. The courts of the forum will not enforce any foreign claim obnoxious to the forums public policy x x x. To enforce the one-year prescriptive period of the Amiri Decree No. 23 of 1976 as regards the claims in question would contravene the public policy on the protection to labor. xxxx Thus, in our considered view, respondents complaint was filed well within the three-year prescriptive period under Article 291 of our Labor Code. This point, however, has already been mooted by our finding that respondents service award had been paid, albeit the payroll termed such payment as severance pay. (LWV CONSTRUCTION CORPORATION v. MARCELO B. DUPO, G.R. No. 172342, July 13, 2009) Probationary Employee

47

A probationary employee or probationer is one who is on trial for an employer, during which the latter determines whether or not he is qualified for permanent employment. The probationary employment is intended to afford the employer an opportunity to observe the fitness of a probationary employee while at work, and to ascertain whether he will become an efficient and productive employee. While the employer observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other hand, seeks to prove to the employer that he has the qualifications to meet the reasonable standards for permanent employment. Thus, the word probationary, as used to describe the period of employment, implies the purpose of the term or period, not its length. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009 ) Probationary Employment for Academic Personnel

For academic personnel in private schools, colleges and universities, probationary employment is governed by Section 92 of the 1992 Manual of Regulations for Private Schools (Manual), which reads: Section 92. Probationary Period. Subject in all instances to compliance with the Department and school requirements, the probationary period for academic personnel shall not be more than three (3) consecutive years of satisfactory service for those in the elementary and secondary levels, six (6) consecutive regular semesters of satisfactory service for those in the tertiary level, and nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where collegiate courses are offered on a trimester basis. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009 )

Security of Tenure of Probationary Employees

As above discussed, probationary employees enjoy security of tenure during the term of their probationary employment such that they may only be terminated for cause as provided for by law, or if at the end of the probationary period, the employee failed to meet the 48

reasonable standards set by the employer at the time of the employees engagement. Undeniably, respondent was hired as a probationary teacher and, as such, it was incumbent upon petitioner to show by competent evidence that she did not meet the standards set by the school. This requirement, petitioner failed to discharge. To note, the termination of respondent was effected by that letter stating that she was being relieved from employment because the school authorities allegedly decided, as a cost-cutting measure, that the position of Principal was to be abolished. Nowhere in that letter was respondent informed that her performance as a school teacher was less than satisfactory. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009 ) Termination of Probationary Employee

Under Article 281 of the Labor Code, a probationary employee can be legally dismissed either: (1) for a just cause; or (2) when he fails to qualify as a regular employee in accordance with the reasonable standards made known to him by the employer at the start of the employment. Nonetheless, the power of the employer to terminate the services of an employee on probation is not without limitations. First, this power must be exercised in accordance with the specific requirements of the contract. Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law. Third, there must be no unlawful discrimination in the dismissal. In termination cases, the burden of proving just or valid cause for dismissing an employee rests on the employer. (DAVAO CONTRACTORS DEVELOPMENT COOPERATIVE (DACODECO) v. MARILYN A. PASAWA,G.R. No. 172174,July 9, 2009) Project Employee While respondent performed tasks that were clearly vital, necessary and indispensable to the usual business or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of every project. Records show that respondent was hired by Alcatel from 1988 to 1995 for three projects, namely the PLDT X-5 project, the PLDT X-4 IOT project and the PLDT 1342 project. On 30 April 1988, upon the expiration of respondents contract for the PLDT X-4 IOT project, Alcatel did not rehire respondent until 1 February 1991, or after a lapse of 33 months, for the PLDT 1342 project. Alcatels continuous rehiring of respondent in various capacities from February 1991 to December 1995 was done entirely within the framework of one and the same project the PLDT 1342 project. This did not make respondent a regular employee of Alcatel as respondent was not 49

continuously rehired after the cessation of a project. Respondent remained a project employee of Alcatel working on the PLDT 1342 project. (ALCATEL PHILIPPINES, INC., v. RENE R. RELOS, G.R. No. 164315, July 3, 2009) Protection to Labor Whether employed locally or overseas, all Filipino workers enjoy the protective mantle of Philippine labor and social legislation, contract stipulations to the contrary notwithstanding. This pronouncement is in keeping with the basic public 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. This ruling is likewise rendered imperative by Article 17 of the Civil Code which states that laws which have for their object public order, public policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or conventions agreed upon in a foreign country. (BECMEN SERVICE EXPORTER v. SPOUSES SIMPLICIO and MILA CUARESMA (for and in behalf oftheir daughter, Jasmin G. Cuaresma), WHITE FALCON SERVICES, INC. and JAIME ORTIZ (President,White Falcon Services, Inc.) AND PROMOTION, INC.,G.R. Nos. 182978-79, G.R. Nos. 184298-99, April 7, 2009) Thus, as held in that case, "the right of an employee to be informed of the charges against him and to reasonable opportunity to present his side in a controversy with either the company or his own Union is not wiped away by a Union Security Clause or a Union Shop Clause in a collective bargaining agreement. An employee is entitled to be protected not only from a company which disregards his rights but also from his own Union, the leadership of which could yield to the temptation of swift and arbitrary expulsion from membership and mere dismissal from his job." (HERMINIGILDO INGUILLO AND ZENAIDA BERGANTE V. FIRST PHILIPPINE SCALES, INC. and/or AMPARO POLICARPIO, MANAGER, G.R. No. 165407, June 5, 2009) Question of Law / Fact There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The resolution of the issue must rest solely on what the law provides on a given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact. If the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to one another, the issue in that query is factual. 50

(GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 178647) Quitclaim However, with respect to the second batch of quitclaims signed by 85 of the remaining 160 employees who were terminated following Hyatts permanent closure, we hold that these are valid and binding undertakings. The said documents indicate that the amount received by each of the employees represents a reasonable settlement of their monetary claims against petitioner and were even signed in the presence of a DOLE representative. A quitclaim, with clear and unambiguous contents and executed for a valid consideration received in full by the employee who signed the same, cannot be later invalidated because its signatory claims that he was pressured into signing it on account of his dire financial need. When it is shown that the person executing 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. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, 2009) To excuse petitioners from complying with the terms of their waivers, they must locate their case within any of three narrow grounds: (1) the employer used fraud or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. The preceding discussion on the voluntariness of petitioners retirement from service effectively removes these grounds beyond petitioners argumentative reach. Accordingly, petitioners, by the terms of their waivers, are barred from filing this suit. (ARSENIO F. QUEVEDO, et al., v. BENGUET ELECTRIC COOPERATIVE,INCORPORATED (BENECO) and GERARDO P. VERZOSA, G.R. No. 168927, September 11, 2009) Invalid Quitclaims

Significantly, the Manifestations filed by petitioner with respect to the quitclaims executed by members of respondent Union state that 34 of the 48 employees terminated on account of the downsizing program 51

have already executed quitclaims on various dates. We, however, take judicial notice that 33 of these quitclaims failed to indicate the amounts received by the terminated employees. Because of this, petitioner leaves us no choice but to invalidate and set aside these quitclaims. However, the actual amount received by the employees upon signing the said documents shall be deducted from whatever remaining amount is due them to avoid double recovery of separation pay and other monetary benefits. We hereby order the Labor Arbiter to effect the necessary computation on this matter. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAH-NUWHRAIN), G.R. No. 165756, June 5, 2009) Also, SMC cannot take refuge in the Receipt and Release document signed by the respondent. Generally, deeds of release, waivers, or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the legality of their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as contrary to public policy. Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the consideration for the quitclaim is credible and reasonable, the transaction must be recognized as a valid and binding undertaking. The burden of proving that the quitclaim or waiver was voluntarily entered into rests on the employer. (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009) Real Party in Interest To qualify a person to be a real party in interest in whose name an action must be prosecuted, he must appear to be the present real holder of the right sought to be enforced. Interest within the meaning of the rule means material interest, an interest in essence to be affected by the judgment as distinguished from mere interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial interest, as distinguished from a mere expentancy or a future, contingent, subordinate or consequential interest. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009) It has been repeatedly stated that the Pantranco properties which were the subject of execution sale were owned by Macris and later, the PNB-Madecor. They were never owned by PNEI or PNB. Following our earlier discussion on the separate personalities of the 52

different corporations involved in the instant case, the only entity which has the right and interest to question the execution sale and the eventual right to annul the same, if any, is PNB-Madecor or its successor-in-interest. Settled is the rule that proceedings in court must be instituted by the real party in interest. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705) Re-computation of Awards Furthermore, the CA sufficiently explained the need to increase the award of 13th month pay and SIL pay. It modified the award after finding that the computation of the amount given by the NLRC in its Decision dated March 25, 2002 does not conform to the dismissed employees employment history. The CA aptly explained, viz.: A cursory reading of the assailed Decision of the NLRC dated March 25, 2002 readily reveals that the labor tribunal awarded private respondents their unpaid 13th Month Pay and Service Incentive Leave (SIL) Pay without regard to their employment history with the petitioner. There was even no explanation or adequate showing on the face of the questioned judgment why the award of the unpaid 13th Month and SIL Pay differs from one private respondent to another. This Court, therefore, after determining that indeed the petitioner had not paid the private respondents these special benefits for the whole period of their employment therewith, modified the award by painstakingly basing it to each of the dismissed employees employment history with petitioner. xxxx The procedural lapse on the part of the NLRC in this case in failing to take into account the number of years when the private respondents did not receive their 13 th Month and SIL Pay cannot defeat their right to receive these benefits as granted under substantive law. This Court simply could not uphold an erroneous computation of the said unpaid benefits. Hence, it had to re-compute, and as a consequence, increased it.

53

(AKLAN COLLEGE, INC. vs. PERPETUO ENERO, ARLYN CASTIGADOR, NUENA SERMON and JOCELYN ZOLINA, G.R. No. 178309, January 27, 2009) Recruitment Agency As the Court previously observed, the Contract of Services between Interserve and petitioner did not identify the work needed to be performed and the final result required to be accomplished. Instead, the Contract specified the type of workers Interserve must provide petitioner (Route Helpers, Salesmen, Drivers, Clericals, Encoders & PD) and their qualifications (technical/vocational course graduates, physically fit, of good moral character, and have not been convicted of any crime). The Contract also states that, to carry out the undertakings specified in the immediately preceding paragraph, the CONTRACTOR shall employ the necessary personnel, thus, acknowledging that Interserve did not yet have in its employ the personnel needed by petitioner and would still pick out such personnel based on the criteria provided by petitioner. In other words, Interserve did not obligate itself to perform an identifiable job, work, or service for petitioner, but merely bound itself to provide the latter with specific types of employees. These contractual provisions strongly indicated that Interserve was merely a recruiting and manpower agency providing petitioner with workers performing tasks directly related to the latters principal business. (COCA-COLA BOTTLERS PHILS., INC v. ALAN M. AGITO, et al., G.R. No. 179546, February 13, 2009)

Refusal to Return to Work Therefore, the complaint for illegal dismissal filed by respondents was premature, since even after the expiration of their suspension period, they refused, despite due notice, to report to work. In fact, in their Memorandum of Appeal, respondents admitted having received petitioners return-to-work memorandum which, however, became futile because they hastily filed the complaint for illegal dismissal. (INDUSTRIAL & TRANSPORT EQUIPMENT, INC. RAYMOND JARINA, vs. TOMAS TUGADE and CRESENCIO TUGADE, G.R. No. 158539, January 15, 2009) Regular Employment Undoubtedly, respondents were regular employees of petitioner with respect to the escort or comboy activity for which they had 54

been engaged since 1993 and 1994, respectively, without regard to continuity or brokenness of the service. (DEALCO FARMS, INC., vs. NATIONAL LABOR RELATIONS COMMISSION (5th DIVISION), G.R. No. 153192 January 30, 2009) Thus, there are two kinds of regular employees, namely: (1) those who are engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are employed. Simply stated, regular employees are classified into (1) regular employees - by nature of work and (2) regular employees - by years of service. The former refers to those employees who perform a particular activity which is necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a year. 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. (SAN MIGUEL CORPORATION v. EDUARDO L. TEODOSIO, G.R. No. 163033, October 2, 2009) Reinstatement The spirit of the rule on reinstatement pending appeal animates the proceedings once the Labor Arbiter issues the decision containing an order of reinstatement. The immediacy of its execution needs no further elaboration. Reinstatement pending appeal necessitates its immediate execution during the pendency of the appeal, if the law is to serve its noble purpose. At the same time, any attempt on the part of the employer to evade or delay its execution, as observed in Panuncillo and as what actually transpired in Kimberly, Composite, Air Philippines, and Roquero, should not be countenanced. After the labor arbiters decision is reversed by a higher tribunal, the employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the employer. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009) Reinstatement during Corporate Rehabilitation

55

Case law recognizes that unless there is a restraining order, the implementation of the order of reinstatement is ministerial and mandatory. This injunction or suspension of claims by legislative fiat partakes of the nature of a restraining order that constitutes a legal justification for respondents non-compliance with the reinstatement order. Respondents failure to exercise the alternative options of actual reinstatement and payroll reinstatement was thus justified. Such being the case, respondents obligation to pay the salaries pending appeal, as the normal effect of the non-exercise of the options, did not attach. (JUANITO A. GARCIA and ALBERTO J. DUMAGO vs. PHILIPPINE AIRLINES, INC., G.R. No. 164856, January 20, 2009)

Republic Act No. 8042 Fifth Paragraph of Section 10; Unconstitutional

The argument of the Solicitor General, that the actual purpose of the subject clause of limiting the entitlement of OFWs to their threemonth salary in case of illegal dismissal, is to give them a better chance of getting hired by foreign employers. This is plain speculation. As earlier discussed, there is nothing in the text of the law or the records of the deliberations leading to its enactment or the pleadings of respondent that would indicate that there is an existing governmental purpose for the subject clause, or even just a pretext of one. The subject clause does not state or imply any definitive governmental purpose; and it is for that precise reason that the clause violates not just petitioner's right to equal protection, but also her right to substantivedue process under Section 1, Article III of the Constitution. (ANTONIO M. SERRANO v. GALLANT MARITIME SERVICES,INC. and MARLOW NAVIGATION CO., INC., G.R. No. 167614, March 24, 2009) Retirement Coverage A twist in Riveras case is that she continued working beyond the compulsory separation from service that resulted from her retirement. Whether she could or could not resume working with the company is, as a rule, a consensual matter for the parties to agree upon, limited only by company policies and the applicable terms of the retirement 56

plan. To be sure, there is no limitation by law that barred her from continuing her work with UNILAB; even the above-quoted Implementing Rules, in setting the retirement age at 60, deferred to the parties agreement. Her employment terms under this renewed employment are based on what she and the company agreed upon. Whether these terms included renewed coverage in the retirement plan is an evidentiary gap that could have been conclusively shown by evidence of deductions of contributions to the plan after 1988. Two indicators, however, tell us that no such coverage took place. The first is that the terms of the retirement plan, before and after its 1992 amendment, continued to exclude those who have rendered 30 years of service or have reached 60 years of age. Therefore, the plan could not have covered her. The second is the absence of evidence of, or of any demand for, any reimbursement of what Rivera would have paid as contributions to the plan had her coverage and deductions continued after 1988. Thus, we conclude that her renewed service did not have the benefit of any retirement plan coverage. (JANUARIA A. RIVERA v. UNITED LABORATORIES, INC.,G.R. No. 155639 April 22, 2009) Seafarer Death Benefits The general rule is that the employer is liable to pay the heirs of the deceased seafarer for death benefits once it is established that he died during the effectivity of his employment contract. However, the employer may be exempted from liability if he can successfully prove that the seafarers death was caused by an injury directly attributable to his deliberate or willful act. In sum, respondents entitlement to any death benefits depends on whether the evidence of the petitioners suffices to prove that the deceased committed suicide; the burden of proof rests on his employer. (GREAT SOUTHERN MARITIME SERVICES CORP. and IMC SHIPPING CO., PTE. LTD. v. LEONILA SURIGAO for Herself and In Behalf of Her Minor Children,Namely KAYE ANGELI and MIRIAM,Both Surnamed SURIGAO G.R. No. 183646) Post-Employment Medical Examination

But even assuming that petitioner was repatriated for medical reasons, he failed to submit himself to the company-designated doctor in accordance with the post-employment medical examination requirement under the above-quoted paragraph 3 of Section 20(B) of the POEA Standard Employment Contract. Failure to comply with this requirement which is a sine qua non bars the filing of claim for disability benefits. (DIONISIO M. MUSNIT v. SEA STAR SHIPPING CORPORATION , G.R. No. 182623, December 4, 2009)

57

Security Guard Temporary offdetail Petitioners citation of Article 286 of the Labor Code reading: ART. 286. When employment not deemed terminated. The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. (Emphasis in the original; underscoring supplied) is misplaced. teaches: We stress that Article 286 applies only when there is a bonafide suspension of the employers operation of a business or undertaking for a period not exceeding six (6) months. In such a case, there is no termination of employment but only a temporary displacement of employees, albeit the displacement should not exceed six (6) months. The paramount consideration should be the dire exigency of the business of the employer that compels it to put some of its employees temporarily out of work. In security services, the temporary off-detail of guards takes place when the security agencys clients decide not to renew their contracts with the security agency, resulting in a situation where the available posts under its existing contracts are less than the number of guards in its roster. (Underscoring supplied) In the present case, there is no showing that there was lack of available posts at petitioners clients or that there was a request from the client-bank, where respondent was last posted and which Philippine Industrial Security Agency v. Dapiton

58

continued to hire petitioners services, to replace respondent with another. Petitioner suddenly prevented him from reporting on his tour of duty at the bank on December 15, 2001 and had not thereafter asked him to report for duty. (EAGLE STAR SECURITY SERVICES, INC. v. BONIFACIO L. MIRANDO, G.R. No. 179512, July 30, 2009) Separate Corporate Personality Assuming, for the sake of argument, that PNB may be held liable for the debts of PNEI, petitioners still cannot proceed against the Pantranco properties, the same being owned by PNB-Madecor, notwithstanding the fact that PNB-Madecor was a subsidiary of PNB. The general rule remains that PNB-Madecor has a personality separate and distinct from PNB. The mere fact that a corporation owns all of the stocks of another corporation, taken alone, is not sufficient to justify their being treated as one entity. If used to perform legitimate functions, a subsidiarys separate existence shall be respected, and the liability of the parent corporation as well as the subsidiary will be confined to those arising in their respective businesses. (PANTRANCO EMPLOYEES ASSOCIATION (PEA-PTGWO) and PANTRANCO RETRENCHED EMPLOYEES ASSOCIATION (PANREA) v. NATIONAL LABOR RELATIONS COMMISSION (NLRC), G.R. No. 170689, G.R. No. 170705) Separation Pay Since petitioner was not faultless in regard to the offenses imputed against her, we hold that the award of separation pay only, without backwages, is proper. (ELIZABETH D. PALTENG v. UNITED COCONUT PLANTERS BANK, G.R. No. 172199, February 27, 2009) We thus find the dismissal to be illegal. Consequently, respondent is entitled to reinstatement without loss of seniority rights and other privileges, and to full backwages, inclusive of allowances, and other benefits or their monetary equivalent, computed from the time of the withholding of the employee's compensation up to the time of actual reinstatement. If reinstatement is not possible due to the strained relations between the employer and the employee, separation pay should instead be paid the employee equivalent to one month salary for every year of service, computed from the time of engagement up to the finality of this decision. (M+W ZANDER PHILIPPINES, INC. and ROLF WILTSCHEK v. TRINIDAD M. ENRIQUEZ, G.R. No. 169173, June 5, 2009)

59

Article 279 of the Labor Code provides that [a]n employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Since, in the present case, reinstatement is no longer practicable or feasible, separation pay may be awarded in lieu of reinstatement. Moreover, the awards of separation pay and backwages are not mutually exclusive and both may be given to Tagulao and Serrano. The normal consequences of a finding that an employee has been illegally dismissed are, firstly, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and, secondly, the payment of backwages corresponding to the period from his illegal dismissal up to actual reinstatement. The statutory intent on this matter is clearly discernible. Reinstatement restores the employee who was unjustly dismissed to the position from which he was removed, that is, to his status quo ante dismissal, while the grant of backwages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. These twin remedies reinstatement and payment of backwages make the dismissed employee whole who can then look forward to continued employment. Thus do these two remedies give meaning and substance to the constitutional right of labor to security of tenure. The two forms of relief are distinct and separate, one from the other. Though the grant of reinstatement commonly carries with it an award of backwages, the inappropriateness or non-availability of one does not carry with it the inappropriateness or non-availability of the other. x x x As the term suggests, separation pay is the amount that an employee receives at the time of his severance from the service and x x x is designed to provide the employee with the wherewithal during the period that he is looking for another employment. 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. x x x The grant of separation pay was a proper substitute only for reinstatement; it could not be an adequate substitute both for reinstatement and for 60

backwages. (Emphasis added) (NISSAN NORTH EDSA BALINTAWAK, QUEZON CITY v. ANGELITO SERRANO, JR. and EDWIN TAGULAO, G.R. No. 162538, June 4, 2009) Above all, the intention to sever the employer-employee relationship was not duly established by respondents. The prior submission of a medical certificate that petitioner is fit to resume work negates the claim of respondents that the former demanded for separation pay on account of her failing health. Certainly, petitioner cannot demand for separation benefits on the ground of illness while at the same time presenting a certification that she is fit to work. Respondents could have denied petitioners demand at that instance and ordered her to return to work had it not been their intention to sever petitioner from their employ. Hence, we find the allegation that petitioner presented herself for work but was refused by respondents more credible. (CONCEPCION FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499, October 2, 2009) Since Dusit Hotel is explicitly mandated by the afore-quoted statutory provision to pay its employees and management their respective shares in the service charges collected, the hotel cannot claim that payment thereof to its 82 employees constitute substantial compliance with the payment of ECOLA under WO No. 9. Undoubtedly, the hotel employees right to their shares in the service charges collected by Dusit Hotel is distinct and separate from their right to ECOLA; gratification by the hotel of one does not result in the satisfaction of the other. (PHILIPPINE HOTELIERS, INC., DUSIT HOTEL NIKKO-MANILA v. NATIONAL UNION OF WORKERS IN HOTEL, RESTAURANT, AND ALLIED INDUSTRIES (NUWHRAIN-APL-IUF)- DUSIT HOTEL NIKKO CHAPTER, G.R. No. 181972, August 25, 2009) Social Justice The Court is not unmindful of the equally important right of respondent as employer under the Constitution to be protected in its property and interest. The particular circumstances attendant in this case, however, convince the Court that the supreme penalty of dismissal upon petitioner is not justified. The law regards the workers with compassion. Even where a worker has committed an infraction of company rules and regulations, a penalty less punitive than dismissal may suffice. This is not only because of the law's concern for the workingman. There is, in addition, his family to consider. Unemployment brings untold hardships and sorrows on those 61

dependent upon the wage-earner. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31, 2009) While the Court commiserates with petitioners on their loss of employment, especially now that the Cooperative is no longer a going concern, it cannot simply, by default, hold the Cooperatives corespondents liable for their claims without any factual and legal justification therefor. The social justice policy of labor laws and the Constitution is not meant to be oppressive of capital. (OLDARICO S. TRAVEO, et al v. BOBONGON BANANA GROWERS MULTI-PURPOSE COOPERATIVE, TIMOG AGRICULTURAL CORPORATION, DIAMOND FARMS, INC., and DOLE ASIA PHILIPPINES, G.R. No. 164205, September 3, 2009) In the present case, respondent had been employed with the petitioner for almost twelve (12) years. On February 13, 1996, he suffered from a fractured left transverse process of fourth lumbar vertebra, while their vessel was at the port of Yokohama, Japan. After consulting a doctor, he was required to rest for a month. When he was repatriated to Manila and examined by a company doctor, he was declared fit to continue his work. When he reported for work, petitioner refused to employ him despite the assurance of its personnel manager. Respondent patiently waited for more than one year to embark on the vessel as 2rd Engineer, but the position was not given to him, as it was occupied by another person known to one of the stockholders. Consequently, for having been deprived of continued employment with petitioner's vessel, respondent opted to apply for optional retirement. In addition, records show that respondent's seaman's book, as duly noted and signed by the captain of the vessel was marked Very Good, and recommended for hire. Moreover, respondent had no derogatory record on file over his long years of service with the petitioner. Considering all of the foregoing and in line with Eastern, the ends of social and compassionate justice would be served best if respondent will be given some equitable relief. Thus, the award of P100,000.00 to respondent as financial assistance is deemed equitable under the circumstances.( EASTERN SHIPPING LINES, INC V. FERRER D. ANTONIO G.R. No. 171587, October 13, 2009) Petitioners bare invocation of the interest of substantial justice does not lie. Only under exceptionally meritorious cases may a relaxation from an otherwise stringent rule be allowed to relieve a litigant of an injustice not commensurate with the degree of thoughtlessness in not complying with the procedure prescribed the existence of which petitioners failed to demonstrate. (WALLEM

62

MARITIME SERVICES, INC. and SCANDIC SHIPMANAGEMENT LIMITED v. ERIBERTO S. BULTRON, G.R. No. 185261, October 2, 2009) Strike Illegal Strike

The use of unlawful means in the course of a strike renders such strike illegal. Therefore, pursuant to the principle of conclusiveness of judgment, the March 9, 1998 strike was ipso facto illegal. The filing of a petition to declare the strike illegal was thus unnecessary. (JACKBILT INDUSTRIES, INC.v. JACKBILT EMPLOYEESWORKERS UNION-NAFLUKMU,G.R. Nos. 171618-19, March 20, 2009) Dinopol and Lustria Decision

There is no conflict between the Dinopol and the Lustria decisions. While both rulings involve the same parties and same issues, there is a distinction between the remedies sought by the parties in these two cases. In the Dinopol decision, it was QCSC which filed a petition to declare the illegality of the 12 August 1997 strike by the union. The consequence of the declaration of an illegal strike is termination from employment, which the Labor Arbiter did so rule in said case. However, not all union members were terminated. In fact, only a few union officers were validly dismissed in accordance with Article 264 of the Labor Code. Corollarily, the other union members who had merely participated in the strike but had not committed any illegal acts were not dismissed from employment. Hence, the NLRC erred in declaring the employment status of all employees as having been lost or forfeited by virtue of the Dinopol decision. On the other hand, the Lustria decision involved the unfair labor practices alleged by the union with particularity. In said case, Labor Arbiter Lustria sided with the Union and found QCSC guilty of such practices. As a consequence, the affected employees were granted backwages and separation pay. The grant of backwages and separation pay however was not premised on the declaration of the illegality of the strike but on the finding that these affected employees were constructively dismissed from work, as evidenced by the layoffs effected by the company. As explained in the Lustria decision: Considering that the temporary lay-off of listed employees effected by the respondents on 16 August 1997 was without documentary evidence to determine its validity, it is our considered view and we so hold that said employees were constructively dismissed without just or 63

authorized cause and observance of due process. This opinion finds support from the hard and cold fact of absence of prior notice, report with the regional office of the Department of Labor and Employment having jurisdiction over the area and they remain under lay-off status of employment. In conclusion, they are entitled to backwages and separation pay in lieu of reinstatement as prayed. Clearly, there are two separate decisions issued by two different labor arbiters involving the same parties and interests. Considering that the remedies sought by the parties in each case differ, these two rulings may co-exist. (LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032, January 19, 2009) Substitution of Parties Finally, as to the prayer of the counsel of Mr. Gumarang to allow the latter to be substituted by his wife, and by his former co-employees whom he had allegedly represented before the Regional Arbitration Branch of the NLRC, we grant the same insofar as the wife is concerned, she being his heir, but not as to the other co-employees. We cannot allow petitioner Gumarangs co-employees to take his place because, if we do, we would be allowing them to become parties to the instant petition when they are not. It would have been different if they presented evidence showing that they had authorized Mr. Gumarang to file the petition on their behalf before this Court and even before the Court of Appeals. This, they had not done. (NORTHEASTERN COLLEGE TEACHERS AND EMPLOYEES ASSOCIATION vs. NORTHEASTERN COLLEGE, INC., G.R. No. 152923, January 19, 2009) Suspension Thus, the CA and the NLRC correctly observed that the worst that respondent committed was an inadvertent infraction. For that, the extreme penalty of dismissal imposed on him by petitioners was grossly disproportionate. Taking into account the managerial position he held and the prior warning issued to him for failing to communicate with his superiors, the penalty commensurate to the violation he committed should be suspension for three months. The period of his suspension is to be deducted from the period for which he is entitled to backwages as awarded by the NLRC and affirmed by the CA. (GULF AIR, JASSIM HINDRI ABDULLAH and RESTY AREVALO v. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO J.C. REYES, G.R. No. 159687, April 24, 2009)

64

Teachers Employment Status

The common practice is for the employer and the teacher to enter into a contract, effective for one school year. At the end of the school year, the employer has the option not to renew the contract, particularly considering the teachers performance. If the contract is not renewed, the employment relationship terminates. If the contract is renewed, usually for another school year, the probationary employment continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for another school year would then be the last year since it would be the third school year of probationary employment. At the end of this third year, the employer may now decide whether to extend a permanent appointment to the employee, primarily on the basis of the employee having met the reasonable standards of competence and efficiency set by the employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the expiration of his contract of employment, being simply on probation, he cannot automatically claim security of tenure and compel the employer to renew his employment contract. It is when the yearly contract is renewed for the third time that Section 93 of the Manual becomes operative, and the teacher then is entitled to regular or permanent employment status. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA MANALO, G.R. No. 178835, February 13, 2009 ) Probationary Period for Teachers

Thus, in light of our ruling of Espiritu Santo Parochial School v. NLRC that, in the absence of an express period of probation for private school teachers, the three-year probationary period provided by the Manual of Regulations for Private Schools must apply likewise to the case of respondent. In other words, absent any concrete and competent proof that her performance as a teacher was unsatisfactory from her hiring on April 18, 2002 up to March 31, 2003, respondent is entitled to continue her three-year period of probationary period, such that from March 31, 2003, her probationary employment is deemed renewed for the following two school years. (MAGIS YOUNG ACHIEVERS LEARNING CENTER and MRS. VIOLETA T. CARIO v. ADELAIDA . MANALO, G.R. No. 178835, February 13, 2009 ) Termination of Employment

65

Just Causes Neglect of Duty/Abandonment

Hence, we find it hard to believe that he will just abandon his job after petitioners gave him a chance to continue working for them. We uphold the following findings of the Court of Appeals that respondent did not abandon his job: In the case at bar, the charge of abandonment is belied by the following circumstances: First, the high improbability of private respondent to intentionally abandon his work considering that he had already served a penalty of suspension for his infractions and violations as well as the petitioners tacit condonation of the infractions he committed, by permitting him to go back to work and by asking him to execute a promissory note. It is incongruent to human nature, that after having ironed things out with his employer, an employee would just not report for work for no apparent reason. Secondly, there was no proof that petitioner sent private respondent a notice of termination on the ground of abandonment, if indeed it is true that he really failed to go back to work. Section 2, Rule XVI, Book V, Rules and regulations implementing the Labor Code provides that any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular act or omission constituting the ground for his dismissal. In cases of abandonment of work, the notice shall be served at the workers last known address (Icawat vs. National Labor Relations Commission, 334 SCRA 75, 81 [2000]). For this reason, We are constrained to give credence to private respondents assertion that he attempted to report back to work but he was just asked to leave as he was considered terminated. And lastly, private respondents filing of a case for illegal dismissal with the labor arbiter negates abandonment. As held by the Supreme Court, a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement (Globe Telecom, Inc. vs Florendo-Flores, 390 SCRA 201, 2002[sic]-203 [2002]). (BC CABLE MASTER SYSTEM AND/OR EVELYN CINENSE vs. MARCIAL BALUYOT, G.R. No. 172670,January 20, 2009)

66

In the instant case, respondent was informed by no less than his immediate superior, the chief cook and by his brother that he was being terminated. Like the Court of Appeals, the Court finds no reason why these two would give respondent the false impression that he was being dismissed, and in turn, the Court, like the appellate court again, is inclined to believe that they were given prior instruction, or they at least had prior knowledge of the termination. Moreover, as previously discussed, the charge of abandonment does not square with the fact that a week after respondents alleged dismissal, he filed a complaint with the NLRC. (HARBORVIEW RESTAURANT v. REYNALDO LABRO, G.R. No. 168273, April 30, 2009) 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. However, an employee who takes steps to protest her layoff cannot be said to have abandoned her work because a charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for reinstatement. When Eleonor filed the illegal dismissal complaint, it totally negated petitioners theory of abandonment. (SOUTH DAVAO DEVELOPMENT COMPANY, INC. (NOW SODACO AGRICULTURAL CORPORATION) AND/OR MALONE PACQUIAO AND VICTOR A. CONSUNJI, v. SERGIO L. GAMO, et. al., G.R. No. 171814, May 8, 2009) In petitioners case, despite the directive cum caveat of CASI for them to report back for work within two days from receipt thereof, they failed to comply therewith. After three years, as reflected above, they offered to return to work. Their intention to sever the employeremployee relationship with CASI is manifested, however, by the length of time they refused to return to work, for they had, in the interim, been looking for other jobs. (MIGUEL A. PILAPIL, et al. v. NATIONAL LABOR RELATIONS COMMISSION G.R. No. 178229 October 23, 2009) Respondents failed to discharge this burden. Mere absence of petitioner is not sufficient to establish the allegation of abandonment. The prolonged absence of petitioner was not without justifiable reason because it was established that her failure to report for work was due to the injury she suffered in the course of her employment and with sufficient notice to respondents. Petitioner also presented herself for work on the date stated in the medical certificate which stated that she is fit to resume work. (CONCEPCION FAELDONIA v. TONG YAK GROCERIES,JAYME GO and MERLITA GO,G.R. No. 182499, October 2, 2009)

67

Furthermore, the Court agrees with respondents when they argued in their petition filed with the CA that if an employee's aim is to secure the benefits due him from his employer, abandonment would surely be an illogical and impractical recourse, especially for simple laborers such as respondent Aguilar. Considering the difficult times in which our country is in it is illogical and even suicidal for an employee like Aguilar to abandon his work, knowing fully well of the widespread unemployment and underemployment problems as well as the difficulty of looking for a means of livelihood, simply because his employer rejected his demand for salary increase. Under the given facts, no basis in reason exists for the petitioners' theory that Aguilar abandoned his job. (BARON REPUBLIC THEATRICAL V. NORMITA P. PERALTA et al, G.R. No. 170525, October 2, 2009) Gross Negligence

An employer cannot legally be compelled to continue with the employment of a person admittedly guilty of gross negligence in the performance of his duties. This holds true specially if the employees continued tenure is patently inimical to the employers interest. What happened was not a simple case of oversight and could not be attributed to a simple lapse of judgment. No amount of good intent, or previous conscientious performance of duty, can assuage the damage Mateo caused LBC when he failed to exercise the requisite degree of diligence required of him under the circumstances.( LBC EXPRESS METRO MANILA, INC. and LORENZO A. NIO v. JAMES MATEO, G.R. No. 168215, June 9, 2009) To warrant removal from service, the negligence should not merely be gross but also habitual. Gross negligence implies a want or absence of or failure to exercise even slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. The single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31, 2009) Serious Misconduct

PNB may rightfully terminate Maralits services for a just cause, including serious misconduct. Serious misconduct is improper conduct, a transgression of some established and definite rule of action, a forbidden act, or a dereliction of duty. Having been dismissed for a just cause, Maralit is not entitled to her retirement benefits. (ESTER B. 68

MARALIT v. PHILIPPINE NATIONAL BANK, G.R. No. 163788, August 24, 2009) By sleeping on the job and leaving his work area without prior authorization, Tomada did not merely disregard company rules. Tomada, in effect, issued an open invitation for others to violate those same company rules. Indeed, considering the presence of trainees in the building and Tomadas acts, Tomada failed to live up to his companys reasonable expectations. Tomadas offenses cannot be excused upon a plea of being a first offense, or have not resulted in prejudice to the company in any way. No employer may rationally be expected to continue in employment a person whose lack of morals, respect and loyalty to his employer, regard for his employers rules, and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared. (EDUARDO M. TOMADA, SR. v. RFM CORPORATION-BAKERY FLOUR DIVISION and JOSE MARIA CONCEPCION III, G.R. No. 163270, September 11, 2009) Moreover, the peculiar nature of Espaderos position aggravates her misconduct. Misconduct has been defined as improper or wrong conduct; the transgression of some established or 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 a grave character and not merely trivial or unimportant. To constitute just cause for termination, it must be in connection with the employees work. With the degree of trust expected of Espadero, such infraction can hardly be classified as one that is trivial or unimportant. Her failure to promptly report the incident reflects a cavalier regard for the responsibility required of her in the discharge of the duties of her position. (EATS-CETERA FOOD SERVICES OUTLET and/or SERAFIN RAMIREZ v. MYRNA B. LETRAN and MARY GRACE ESPADERO, G.R. No. 179507, October 2, 2009) An employee who fails to account for and deliver the funds entrusted to him is liable for misappropriating the same and is consequently guilty of serious misconduct. Petitioner therefore validly dismissed respondent.( SUPERLINES TRANSPORTATION COMPANY, INC. v. EDUARDO PINERA G.R. No. 188742, October 13, 2009) o Simple Misconduct

Based on the foregoing, we consider respondents offense to be a simple misconduct which does not merit termination of his employment. The penalty of dismissal from service is not commensurate to respondents offense. Although petitioner, as an

69

employer, has the right to discipline its erring employees, exercise of such right should be tempered with compassion and understanding. The magnitude of the infraction committed by an employee must be weighed and equated with the penalty prescribed and must be commensurate thereto, in view of the gravity of the penalty of dismissal or termination from the service. The employer should bear in mind that in termination cases, what is at stake is not simply the employees job or position but his very livelihood. (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. INOCENCIO B. BERBANO, JR., G.R. No. 165199, November 27, 2009) Loss of Trust and Confidence

Petitioner, in his Position Paper filed before the LA and in his Sagot na Sinumpaang Salaysay, averred that sometime in August 2004, Alido informed him of the illegal activities in the company premises. But this fact was not reflected in his Partial Audit Report; instead, petitioner made it appear therein that it was upon the initiative of Lejos that he discovered the illegal activities only on October 28, 2004, after Lejos already resigned from the company. The basis for terminating the employment of petitioner actually came from petitioner himself due to the substantial and irreconcilable inconsistencies in the narration of facts in his Audit Report and his Sagot na Sinumpaang Salaysay filed before the company, and his pleadings before the lower tribunals and before this Court. In sum, it cannot be denied that he withheld this information from his immediate supervisor and from the company a clear breach of the trust and confidence the company had reposed in him as one of its Auditors.( ROMEO N. VENTURA, vs. COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION, GENUINO ICE CO., INC., and HECTOR GENUINO, G.R. No. 182570, January 27, 2009 Indeed, by obtaining an altered police report and medical certificate, petitioners deliberately attempted to cover up the fact that Sales was under the influence of liquor at the time the accident took place. In so doing, they committed acts inimical to respondents interests. They thus committed a work-related willfull breach of the trust and confidence reposed in them. (ERIC DELA CRUZ and RAUL M. LACUATA v. COCA-COLA BOTTLERS PHILS. INC., G.R. No. 180465, July 31, 2009) The amount misappropriated by petitioner Manliclic is irrelevant. More than the resulting material damage or prejudice, it is petitioner Manliclics very act of misappropriation that is offensive to respondent PELCO I. If taxes are the lifeblood of the state, then, by analogy, the 70

payment collection is the lifeblood of the cooperative. The collection provides respondent PELCO I with the financial resources to continue its operations. Respondent PELCO I cannot afford to continue in its employ dishonest bill collectors. By his own admission, petitioner Manliclic committed a breach of the trust reposed in him by his employer, respondent PELCO I. This constitutes valid cause for his dismissal from service. (CHONA ESTACIO and LEOPOLDO MANLICLIC v. PAMPANGA I ELECTRIC COOPERATIVE, INC., and LOLIANO E. ALLAS, G.R. No. 183196, August 19, 2009) We are not unmindful of the employers right to dismiss an employee based on fraud or willful breach of trust. However, the loss of confidence must be based not on an ordinary breach by the employee of the trust reposed in him by the employer, but, in the language of Article 282(c) of the Labor Code, on a 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. 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; nor should it appear as a mere afterthought to justify an earlier action taken in bad faith or as a subterfuge for causes that 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. In this case, SLMC utterly failed to establish the requirements prescribed by law and jurisprudence for a valid dismissal on the ground of breach of trust and confidence. (ST. LUKES MEDICAL CENTER, INCORPORATED v. JENNIFER LYNNE C. FADRIGO, G.R. No. 185933, November 25, 2009) Verily, the actions of Tirazona reflected an obdurate character that is arrogant, uncompromising, and hostile. By immediately and unreasonably adopting an adverse stance against PET, she sought to impose her will on the company and placed her own interests above those of her employer. Her motive for her actions was rendered even more questionable by her exorbitant and arbitrary demand for P2,000,000.00 payable within five days from demand. Her attitude towards her employer was clearly inconsistent with her position of trust and confidence. Her poor character became even more evident when she read what was supposed to be a confidential letter of the legal counsel of PET to PET officers/directors expressing his legal opinion on Tirazonas administrative case. PET was, therefore, fully justified in terminating Tirazonas employment for loss of trust and confidence. 71

(MA. WENELITA S. TIRAZONA, vs. PHILIPPINE EDS TECHNO- SERVICE INC. (PET INC.) AND/OR KEN KUBOTA, MAMORU ONO and JUNICHI HIROSE, G.R. No. 169712, January 20, 2009) To recapitulate, the right of an employer to dismiss an employee on account of loss of trust and confidence must not be exercised whimsically. To countenance an arbitrary exercise of that prerogative is to negate the employees constitutional right to security of tenure. In other words, the employer must clearly and convincingly prove by substantial evidence the facts and incidents upon which loss of confidence in the employee may be fairly made to rest; otherwise, the latters dismissal will be rendered illegal. (SAN MIGUEL CORPORATION vs. NATIONAL LABOR RELATIONS COMMISSION AND WILLIAM L. FRIEND, JR., G.R. No. 153983, May 26, 2009) Loss of confidence must not be indiscriminately used as a shield by the employer against a claim that the dismissal of an employee was arbitrary. Loss of confidence as a just cause for termination of employment is premised on the fact that the employee concerned holds a position of responsibility or trust and confidence. He must be invested with confidence on delicate matters, such as custody handling or care and protection of the property and assets of the employer. And, in order to constitute a just cause for dismissal, the act complained of must be work-related and shows that the employee concerned is unfit to continue to work for the employer. (ADAM B. GARCIA v. NATIONAL LABOR RELATIONS COMMISSION (SECOND DIVISION), LEGAZPI OIL COMPANY, INC., ROMEO F. MERCADO and GUS ZULUAGA G.R. No. 172854, April 16, 2009) Considering the foregoing, we find that respondents Apostol and Opulencia were dismissed by TIPI for a valid and just cause. The relationship of employer and employee, specially where the employee has access to the employers property, necessarily involves trust and confidence. Where the rules laid down by the employer to protect its property are violated by the very employee who is entrusted and expected to follow and implement the rules, the employee may be validly dismissed from service. (TRIUMPH INTERNATIONAL(PHILS.), INC.FIRST DIVISION v. RAMON L. APOSTOL and BEN M. OPULENCIA, G.R. No. 164423, June 16, 2009) As Airport Manager, respondent occupies a position of such extreme sensitivity that the existence of some basis or reasonable ground for his involvement in any irregularity is enough to destroy the trust and confidence which petitioner Gulf Air had reposed in him. However, it is settled that for breach of trust to constitute a valid cause for dismissal, the same must be willful. Ordinary breach of trust will not 72

suffice. (GULF AIR, JASSIM HINDRI ABDULLAH and RESTY AREVALO v. NATIONAL LABOR RELATIONS COMMISSION and ROBERTO J.C. REYES, G.R. No. 159687, April 24, 2009) The second requisite is that there must be an act that would justify the loss of trust and confidence. Loss of trust and confidence, to be a valid cause for dismissal, must be based on a willful breach of trust and founded on clearly established facts. The basis for the dismissal must be clearly and convincingly established but proof beyond reasonable doubt is not necessary. Respondents evidence against petitioner fails to meet this standard. Its lone witness, Lupega, did not support his affidavit and testimony during the company investigation with any piece of evidence at all. No other employee working at respondents mine site attested to the truth of any of his statements. Standing alone, Lupegas account of the subsidence area anomaly could hardly be considered substantial evidence. And while there is no concrete showing of any ill motive on the part of Lupega to falsely accuse petitioner, that Lupega himself was under investigation when he implicated petitioner in the subsidence area anomaly makes his uncorroborated version suspect. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31, 2009) o Application of the Doctrine of Loss of Trust and Confidence 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. It is sufficient that there is some basis for the employers loss of trust and 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 of his position. Nonetheless, the evidence must be substantial and must establish clearly and convincingly the facts on which the loss of confidence rests and not on the employers arbitrariness, whims, and caprices or suspicion. (TRIUMPH INTERNATIONAL(PHILS.), INC.FIRST DIVISION v.

73

RAMON L. APOSTOL and BEN M. OPULENCIA, G.R. No. 164423, June 16, 2009) o Positions of Trust There are two classes of positions of trust. The first class consists of managerial employees. They are defined as those vested with the powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such managerial actions. The second class consists of cashiers, auditors, property custodians, etc. They are defined as those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property. (ABELARDO P. ABEL v. PHILEX MINING CORPORATION, G.R. No. 178976, July 31, 2009) Authorized Causes Retrenchment

The proper view, therefore, is that the Sec. 1 criteria qualify the factors of seniority and needs of the company in Sec. 5(c). Stated a bit differently, Sec. 5(c) should be understood in the light of Sec. 1 which, to stress, provides seniority, efficiency and attitude, job knowledge and potential, and attendance as among the factors that should guide the company in choosing the employees to be laid-off or kept. All other things being equal, a company would necessarily need to retain those who had rendered dedicated and highly efficient service and whose knowledge, attendance, and potential hew with company standards. Any other measure would be senseless in the business viewpoint. Accordingly, the merit rating used by MMPC based on Sec. 5 in conjunction with and as qualified by the factors provided under Sec. 1 is fair and reasonable, and, to be sure, well within the contemplation of the parties CBA. In fact, Alfredo, shorn of the contention that the merit rating is against the CBA, has not shown any arbitrariness on the part of MMPC in the evaluation, selection, and retrenchment of employees. (ALFREDO A. MENDROS, JR v. MITSUBISHI MOTORS PHILS. CORPORATION (MMPC), G.R. No. 169780, February 16, 2009) Records do not show any criterion adopted or used by petitioner in dismissing respondent. Respondent was terminated without considering her seniority. Retrenchment scheme without taking seniority into account rendered the retrenchment invalid. While respondent was the third most senior employee among the 7 employees in petitioner's personnel department, she was retrenched

74

while her other co-employees junior than her were either retained in the Personnel Department or were transferred to other positions in the company. There was no showing that respondent was offered to be transferred to other positions.(EMCOR INCORPORATED v. MA. LOURDES D. SIENES, G.R. No. 152101, September 8, 2009) At all events, even if the comparative report were to be considered, the Court is not persuaded on the necessity of resorting to retrenchment to prevent or minimize actual or imminent business losses on the part of petitioner. For retrenchment should only be resorted to when other less drastic means have been tried and found to be inadequate. So Polymart Paper Industries, Inc. v. NLRC instructs: . . . [E]ven if business losses were indeed sufficiently proven, the employer must still prove that retrenchment was resorted to only after less drastic measures such as the reduction of both management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing efficiency, reduction of marketing and advertising costs, faster collection of customer accounts, reduction of raw materials investment and others, have been tried and found wanting. (Emphasis supplied) In the case at bar, petitioner did not adduce evidence to prove that retrenchment was resorted to because other measures were undertaken to abate actual or future business losses but thus failed. (BIO QUEST MARKETING INC. and/or JOSE L. CO v. EDMUND REY, G.R. No. 181503,September 18, 2009) Requirement for Retrenchment

For a valid termination due to retrenchment, the law also requires that written notices of the intended retrenchment be served by the employer on the worker and on the DOLE at least one month before the actual date of the retrenchment. The purpose of this requirement is to give employees time to prepare for the eventual loss of their jobs, as well as to give DOLE the opportunity to ascertain the veracity of the alleged cause of termination. In this case, petitioner insists that the payment of 30 days salary to respondents in place of notice was sufficient compliance with the 30-day notice rule. We cannot agree. Nothing in the law gives petitioner the option to substitute the required prior written notice with payment of 30 days

75

salary. Indeed, a job is more than the salary it carries. Payment of 30 days salary cannot compensate for the psychological effect or the stigma of immediately finding ones self laid off from work. It cannot be a fully effective substitute for the 30 days written notice requirement by law, especially when, as in this case, no notice was given to the DOLE. Even as the letters of voluntary acceptance were dated July 25, 1998, the notices of termination given on July 23, 1998 were effective the following day. In essence, respondents had already been dismissed before they signed the letters of voluntary acceptance. Clearly, petitioner deprived respondents of their right to statutory due process. For this, we affirm the appellate courts award of nominal damages to respondents. But, consistent with our ruling in Agabon v. National Labor Relations Commission, the amount of nominal damages should be P30,000. We also sustain the award of attorneys fees as it is sanctioned by law. (MOBILIA PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No. 170669, February 4, 2009) Losses

Third, it bears to state that the aforequoted Art. 283 of the Code uses the phrase retrenchment to prevent losses. The phrase necessarily implies that retrenchment may be effected even in the event only of imminent, impending, or expected losses. The employer need not wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. In the case at bench, MMPC was already financially hemorrhaging before finally resorting to retrenchment. (ALFREDO A. MENDROS, JR v. MITSUBISHI MOTORS PHILS. CORPORATION (MMPC), G.R. No. 169780, February 16, 2009) However, apart from petitioners bare assertion of reduced orders from Japan, the only evidence it presented were the letters of voluntary acceptance of retrenchment, and waivers and quitclaims signed by respondents. To our mind, these were insufficient to show that petitioner indeed suffered business losses so serious as to necessitate the reduction of personnel. We have constantly ruled that financial statements audited by independent external auditors constitute the normal method of proof of the profit and loss performance of a company. Any less exacting standard of proof would render too easy the abuse of this ground for termination of services of employees. Petitioner submitted none. Further, let it be clarified that our ruling in International Hardware, Inc. v. NLRC did not dispense with the responsibility of the employer to substantiate losses. It merely exempts the latter from giving notice of retrenchment to its employees and DOLE. (MOBILIA PRODUCTS, INC. v. ALAN G. DEMECILLO, et al., G.R. No. 170669, February 4, 2009) 76

Unfair Labor Practice Totality of the Conduct Doctrine

Then came the Lustria decision, issued two (2) months later, finding that QCSC had committed unfair labor practices against the union and accordingly granting backwages and separation pay in favor of 112 employees. The Lustria decision emanated from a complaint for unfair labor practice against QCSC. Culled from the unions pleadings were the specific acts committed by QCSC, such as: 1.Insulting of the Union President as evidenced by the Salaysay of Ma. Cecilia Pangan; 2.Cuddling and treating the minority union with favor, such as paying their salaries/wages fully and ahead of the incumbent union and as if it were the incumbent bargaining agents; 3.Discouraging the members of the incumbent union from continuing their membership with the incumbent union as evidenced by the Pinagsamang Salaysay of Ramiro Espinosa and Ronaldo Q. Lim; 4.Bribing union member and promising promotion if he will not join the strike as evidenced by the Salaysay of Bernard Delta; 5.Transferring union members to another job description; 6.Replacing them with members of minority union evidenced by Leslie Tamayos Salaysay; 7.Subjecting one union member to a very tense confrontation in the General Managers Office after she commented during the NCMB conference that the 201 file of the employees are intact, resulting to her being taken to the hospital for nervous breakdown; and 8.Requiring the union members to submit another information sheet, and failure to do so would mean no payment of their June 16-30, 1997 salary. Applying the totality of the conduct doctrine, Labor Arbiter Lustria held that QCSC had committed unfair labor practices. (LOLITA A. LOPEZ, ET. al., vs. QUEZON CITY SPORTS CLUB, INC.,G.R. No. 164032, January 19, 2009) Unfair labor practice refers to acts that violate the workers right to organize. The prohibited acts are related to the workers right 77

to self-organization and to the observance of a CBA. Without that element, the acts, even if unfair, are not unfair labor practices. (GENERAL SANTOS COCA-COLA PLANT FREE WORKERS UNION-TUPAS vs. COCA-COLA BOTTLERS PHILS., INC. (GENERAL SANTOS CITY), THE COURT OF APPEALS and THE NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 178647) Here, respondent Union went on strike in the honest belief that petitioner was committing ULP after the latter decided to downsize its workforce contrary to the staffing/manning standards adopted by both parties under a CBA forged only four (4) short months earlier. The belief was bolstered when the management hired 100 contractual workers to replace the 48 terminated regular rank-and-file employees who were all Union members. Indeed, those circumstances showed prima facie that the hotel committed ULP. Thus, even if technically there was no legal ground to stage a strike based on ULP, since the attendant circumstances support the belief in good faith that petitioners retrenchment scheme was structured to weaken the bargaining power of the Union, the strike, by exception, may be considered legal. (HOTEL ENTERPRISES OF THE PHILIPPINES, INC. (HEPI), owner of Hyatt Regency Manila, v. SAMAHAN NG MGA MANGGAGAWA SA HYATT-NATIONAL UNION OF WORKERS IN THE HOTEL AND RESTAURANT AND ALLIED INDUSTRIES (SAMASAHNUWHRAIN), G.R. No. 165756, June 5, 2009) Petitioners never substantiated their allegations. In a similar case, Schering Employees Labor Union (SELU) et al. v. Schering Plough Corporation, petitioner Sereneo, the president of SELU, charged respondent with ULP and illegal dismissal because she was in the process of renegotiating the CBA with respondent when she was dismissed on the ground of loss of trust and confidence. We said: Petitioners' accusation of union busting is bereft of any proof. We scanned the records very carefully and failed to discern any evidence to sustain such charge. In Tiu vs. NLRC, we held: . . . . It is the union, therefore, who had the burden of proof to present substantial evidence to support its allegations (of unfair labor practices committed by management). xxx xxx xxx.

78

. . ., but in the case at bar the facts and the evidence did not establish even at least a rational basis why the union would wield a strike based on alleged unfair labor practices it did not even bother to substantiate during the conciliation proceedings. It is not enough that the union believed that the employer committed acts of unfair labor practice when the circumstances clearly negate even a prima facie showing to warrant such a belief. (RENITA DEL ROSARIO, et al., v. MAKATI CINEMA SQUARE CORPORATION, G.R. No. 170014, July 3, 2009) Voluntary Resignation Finally, respondent claims that in light of the opinion of the physician in Korea that he had suspected ischemic heart, petitioners affirmed his medical repatriation. As reflected in the immediately preceding paragraph, however, ischemic heart disease cannot develop in a short span of time that respondent served as chief cook for petitioners. In fact, as indicated above, the Gleneagles Maritime Medical Centre doctor who treated respondent in May 2000 for abscess in his left hand had noted respondents [h]istory of hypertension for 3 years. Moreover, the Korean physician did not make any recommendation as to respondents bill of health for petitioners to assume that he was fit for repatriation. IN FINE, respondents actions show that he voluntarily resigned. (VIRGEN SHIPPING CORPORATION, CAPT. RENATO MORENTE & ODYSSEY MARITIME PTE. LTD., NATIONAL LABOR RELATIONS COMMISSION v. JESUS B. BARRAQUIO, G.R. No. 178127, April 16, 2009) Work-related Disease If we found in Seagull Shipmanagement that the different climates and unpredictable weather, as well as the stress of the job, had a correlation with the heart disease of a seafarer working as a radioman on a vessel, then what more in the heart disease of a seafarer serving as a ship master, a position involving more strain and pressure? A Tug (boat) Master is primarily tasked to operate tug boats, a powerful marine vessel that meets large ships out at sea and attach a line to guide/steer the same into and out of berths. In operating such a powerful vessel, a Tug Master requires not just a thorough knowledge of the port environment in which he is operating, but a high level of skill as well. In fact, in the case at bar, respondent ADAMS recognized how grueling petitioner Nisdas job was, according the latter a month of paid vacation every three months of straight service. Thus, more than a reasonable connection between the nature of petitioner Nisdas job and his Coronary Artery Disease has been 79

established. Petitioner Nisda was able to sufficiently prove, by substantial evidence, that his Coronary Artery Disease was workrelated, given the arduous nature of his job that caused his disease or, at least, aggravated any pre-existing condition he might have had. Respondents Sea Serve and ADAMS, on the other hand, utterly failed to refute the said connection. (CARLOS N. NISDA v. SEA SERVE MARITIME AGENCY and KHALIFA A. ALGOSAIBI DIVING AND MARINE SERVICES, G. R. No. 179177, July 23, 2009)

80