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LABOR STANDARDS SET 5

1. ABUNDIO BARAYOGA and BISUDECO-PHILSUCOR CORFARM WORKERS UNION (PACIWU CHAP-TPC) v. ASSET PRIVATIZATION Promulgated: TRUST G.R. No. 160073 October 24, 2005 Facts: Bisudeco-Philsucor Corfarm Workers Union is composed of workers of Bicolandia Sugar Development Corporation (BISUDECO), a sugar plantation mill located in Himaao, Pili, Camarines Sur. Asset Privatization Trust (APT), a public trust was created under Proclamation No. 50, as amended, mandated to take title to and possession of, conserve, provisionally manage and dispose of non-performing assets of the Philippine government identified for privatization or disposition. Pursuant to Section 23 of Proclamation No. 50, former President Corazon Aquino issued Administrative Order No. 14 identifying certain assets of government institutions that were to be transferred to the National Government. Among the assets transferred was the financial claim of the Philippine National Bank against BISUDECO in the form of a secured loan. Consequently, by virtue of a Trust Agreement executed between the National Government and APT on February 27, 1987, APT was constituted as trustee over BISUDECOs account with the PNB. Sometime later, BISUDECO contracted the services of Philippine Sugar Corporation (Philsucor) to take over the management of the sugar plantation and milling operations until August 31, 1992. Meanwhile, because of the continued failure of BISUDECO to pay its outstanding loan with PNB, its mortgaged properties were foreclosed and subsequently sold in a public auction to APT, as the sole bidder. On April 2, 1991, APT was issued a Sheriffs Certificate of Sale. The union filed a complaint for unfair labor practice, illegal dismissal, illegal deduction and underpayment of wages and other labor standard benefits plus damages. In the meantime, APTs Board of Trustees issued a resolution accepting the offer of Bicol-Agro-Industrial Cooperative (BAPCI) to buy the sugar plantation and mill. Again, on September 23, 1992, the board passed another resolution authorizing the payment of separation benefits to BISUDECOs employees in the event of the companys privatization. Then, on October 30, 1992, BAPCI purchased the foreclosed assets of BISUDECO from APT and took over its sugar milling operations under the trade name Peafrancia Sugar Mill (Pensumil). The union alleged that when Philsucor initially took over the operations of the company, it retained BISUDECOs existing personnel under the same terms and conditions of employment. Nonetheless, at the start of the season sometime in May 1991, Philsucor started recalling workers back to work, to the exception of the union members. Management told them that they will be re-hired only if they resign from the union. Just the same, thereafter, the company started to employ the services of outsiders under the pakyaw system. Issue: whether APT is liable to pay petitioners monetary claims, including back wages from May 1, 1991, to October 30, 1992 (the date of the sale of BISUDECO assets to BAPCI) Held: No. Pursuant to Administrative Order No. 14, Series of 1987, PNBs assets, loans and receivables from its borrowers were transferred to APT as trustee of the national government. Among the liabilities transferred to APT was PNBs financial claim against BISUDECO, not the latters assets and chattel. BISUDECO remained the owner of the mortgaged properties in August 1988, when the Philippine Sugar Corporation (Philsucor) undertook the operation and management of the sugar plantation until August 31, 1992, under a so-called Contract of Lease between the two corporations. At the time, APT was merely a secured creditor of BISUDECO. It was only in April 1991 that APT foreclosed the assets and chattels of BISUDECO because of the latters continued failure to pay outstanding loan obligations to PNB/APT. The properties were sold at public auction to APT, the highest bidder, as indicated in the Sheriffs Certificate of Sale issued on April 2, 1991. It was only in September 1992 (after the expiration of the lease/management Contract with Philsucor in August 1992), however, when APT took over BISUDECO assets, preparatory to the latters privatization. In the present case, petitioner-unions members who were not recalled to work by Philsucor in May 1991 seek to hold APT liable for their monetary claims and allegedly illegal dismissal. Significantly, prior to the actual sale of BISUDECO assets to BAPCI on October

30, 1992, the APT board of trustees had approved a Resolution. The Resolution authorized the payment of separation benefits to the employees of the corporation in the event of its privatization. Not included in the Resolution, though, were petitioner-unions members who had not been recalled to work in May 1991. The duties and liabilities of BISUDECO, including its monetary liabilities to its employees, were not all automatically assumed by APT as purchaser of the foreclosed properties at the auction sale. Any assumption of liability must be specifically and categorically agreed upon. Unless expressly assumed, labor contracts like collective bargaining agreements are not enforceable against the transferee of an enterprise. No succession of employment rights and obligations can be said to have taken place between the two. Between the employees of BISUDECO and APT, there is no privity of contract that would make the latter a substitute employer that should be burdened with the obligations of the corporation. Furthermore, under the principle of absorption, a bona fide buyer or transferee of all, or substantially all, the properties of the seller or transferor is not obliged to absorb the latters employees. The most that the purchasing company may do, for reasons of public policy and social justice, is to give preference of reemployment to the selling companys qualified separated employees, who in its judgment are necessary to the continued operation of the business establishment. In any event, the national government (in whose trust APT previously held the mortgage credits of BISUDECO) is not the employer of petitioner-unions members, who had been dismissed sometime in May 1991, even before APT took over the assets of the corporation. Hence, under existing law and jurisprudence, there is no reason to expect any kind of bailout by the national government. Even the NLRC found that no employer-employee relationship existed between APT and petitioners. The liabilities of the previous owner to its employees are not enforceable against the buyer or transferee, unless (1) the latter unequivocally assumes them; or (2) the sale or transfer was made in bad faith. Thus, APT cannot be held responsible for the monetary claims of petitioners who had been dismissed even before it actually took over BISUDECOs assets. Moreover, it should be remembered that APT merely became a transferee of BISUDECOs assets for purposes of conservation because of its lien on those assets -- a lien it assumed as assignee of the loan secured by the corporation from PNB. Subsequently, APT, as the highest bidder in the auction sale, acquired ownership of the foreclosed properties. Relevant to this transfer of assets is Article 110 of the Labor Code, as amended by Republic Act No. 6715, which reads: Article 110. Workers preference in case of bankruptcy. In the event of bankruptcy or liquidation of the employers business, his workers shall enjoy first preference as regards their unpaid wages and other monetary claims shall be paid in full before the claims of the Government and other creditors may be paid. Under Articles 2241 and 2242 of the Civil Code, a mortgage credit is a special preferred credit that enjoys preference with respect to a specific/determinate property of the debtor. On the other hand, the workers preference under Article 110 of the Labor Code is an ordinary preferred credit. While this provision raises the workers money claim to first priority in the order of preference established under Article 2244 of the Civil Code, the claim has no preference over special preferred credits. Workers claims for unpaid wages and monetary benefits cannot be paid outside of a bankruptcy or judicial liquidation proceedings against the employer. The application of Article 110 of the Labor Code is contingent upon the institution of those proceedings, during which all creditors are convened, their claims ascertained and inventoried, and their preferences determined.

2. PHIL AEOLUS AUTOMOTIVE UNITED CO V NLRC (CORTEZ) 331 SCRA 237 / 382 PHIL 250 BELLOSILLO; April 28, 2000 NATURE This petition seeks to set aside the Decision and the Resolution of NLRC which modified the decision of the Labor Arbiter finding petitioners not guilty of illegal dismissal. FACTS - Petitioner Philippine Aeolus Automotive United Corporation (PAAUC) is a corporation duly organized and existing under Philippine laws, petitioner Francis Chua is its President while private respondent Rosalinda C. Cortez was a company nurseof petitioner corporation until her termination on 7 November 1994.

- On 5 October 1994 a memorandum was issued by Ms. Myrna Palomares, Personnel Manager of petitioner corporation, addressed to private respondent Rosalinda C. Cortez requiring her to explain within forty-eight (48) hours why no disciplinary action should be taken against her (a) for throwing a stapler at Plant Manager William Chua, her superior, and uttering invectives against him on 2 August 1994; (b) for losing the amount of P1,488.00 entrusted to her by Plant Manager Chua to be given to Mr. Fang of the CLMC Department on 23 August 1994; and, (c) for asking a co-employee to punch-in her time card thus making it appear that she was in the office in the morning of 6 September 1994 when in fact she was not. The memorandum however was refused by private respondent although it was read to her and discussed with her by a co-employee. She did not also submit the required explanation, so that while her case was pending investigation the company placed her under preventive suspension for thirty (30) days effective 9 October 1994 to 7 November 1994. - On 20 October 1994, while Cortez was still under preventive suspension, another memorandum was issued by petitioner corporation giving her seventy-two (72) hours to explain why no disciplinary action should be taken against her for allegedly failing to process the ATM applications of her nine (9) co-employees with the Allied Banking Corporation. On 21 October 1994 private respondent also refused to receive the second memorandum although it was read to her by a co-employee. A copy of the memorandum was also sent by the Personnel Manager to private respondent at her last known address by registered mail. - Meanwhile, private respondent submitted a written explanation with respect to the loss of the P1,488.00 and the punching-in of her time card by a co-employee. - On 3 November 1994 a third memorandum was issued to private respondent, this time informing her of her termination from the service effective 7 November 1994 on grounds of gross and habitual neglect of duties, serious misconduct and fraud or willful breach of trust. - On 6 December 1994 private respondent filed with the Labor Arbiter a complaint for illegal dismissal, non-payment of annual service incentive leave pay, 13th month pay and damages against PAAUC and its president Francis Chua. - LA rendered a decision holding the termination of Cortez as valid and legal, at the same time dismissing her claim for damages for lack of merit. - NLRC reversed the decision of the LA and found petitioner corporation guilty of illegal dismissal of private respondent Cortez. ISSUES 1. WON the NLRC gravely abused its discretion in holding as illegal the dismissal of private respondent 2. WON she is entitled to damages in the event that the illegality of her dismissal is sustained HELD 1. NO - Cortez claims that as early as her first year of employment her Plant Manager, William Chua, already manifested a special liking for her, so much so that she was receiving special treatment from him who would oftentimes invite her "for a date," which she would as often refuse. On many occasions, he would make sexual advances - touching her hands, putting his arms around her shoulders, running his fingers on her arms and telling her she looked beautiful. The special treatment and sexual advances continued during her employment for four (4) years but she never reciprocated his flirtations, until finally, she noticed that his attitude towards her changed. He made her understand that if she would not give in to his sexual advances he would cause her termination from the service; and he made good his threat when he started harassing her. She just found out one day that her table which was equipped with telephone and intercom units and containing her personal belongings was transferred without her knowledge to a place with neither telephone nor intercom, for which reason, an argument ensued when she confronted William Chua resulting in her being charged with gross disrespect. - The Supreme Court, in a litany of decisions on serious misconduct warranting dismissal of an employee, has ruled that for misconduct or improper behavior to be a just cause for dismissal (a) it must be serious; (b) must relate to the performance o f the employees duties; and, (c) must show that the employee has become unfit to continue working for the employer. The act of private respondent in throwing a stapler and uttering abusive language upon the person of the plant manager may be considered, from a lay man's perspective, as a serious misconduct. However, in order to consider it a serious misconduct that would justify dismissal under the law, it must have been done in relation to the performance of her duties as would show her to be unfit to continue working for her employer. The acts complained of, under the circumstances they were done, did not in any way pertain to her duties as a nurse. Her employment identification card discloses the nature of her employment as a nurse and no other. Also, the memorandum informing her that she was being preventively suspended pending investigation of her case was addressed to her as a nurse. 2. YES - The gravamen of the offense in sexual harassment is not the violation of the employee's sexuality but the abuse of power by the employer. Any employee, male or female, may rightfully cry "foul" provided the claim is well substantiated. Strictly speaking, there is

no time period within which he or she is expected to complain through the proper channels. The time to do so may vary depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee. - Private respondent admittedly allowed four (4) years to pass before finally coming out with her employer's sexual impositions. Not many women, especially in this country, are made of the stuff that can endure the agony and trauma of a public, even corporate, scandal. If petitioner corporation had not issued the third memorandum that terminated the services of private respondent, we could only speculate how much longer she would keep her silence. Moreover, few persons are privileged indeed to transfer from one employer to another. The dearth of quality employment has become a daily "monster" roaming the streets that one may not be expected to give up one's employment easily but to hang on to it, so to speak, by all tolerable means. Perhaps, to private respondent's mind, for as long as she could outwit her employer's ploys she would continue on her job and consider them as mere occupational hazards. This uneasiness in her place of work thrived in an atmosphere of tolerance for four (4) years, and one could only imagine the prevailing anxiety and resentment, if not bitterness, that beset her all that time. But William Chua faced reality soon enough. Since he had no place in private respondent's heart, so must she have no place in his office. So, he provoked her, harassed her, and finally dislodged her; and for finally venting her pent-up anger for years, he "found" the perfect reason to terminate her. - In determining entitlement to moral and exemplary damages, we restate the bases therefor. In moral damages, it suffices to prove that the claimant has suffered anxiety, sleepless nights, besmirched reputation and social humiliation by reason of the act complained of.22 [Art. 2217, New Civil Code of the Philippines.] Exemplary damages, on the other hand, are granted in addition to, inter alia, moral damages "by way of example or correction for the public good"23 [Art. 2229, id.] if the employer "acted in a wanton, fraudule nt, reckless, oppressive or malevolent manner."24 [Art. 2232, id.] - Anxiety was gradual in private respondent's five (5)-year employment. It began when her plant manager showed an obvious partiality for her which went out of hand when he started to make it clear that he would terminate her services if she would not give in to his sexual advances. Sexual harassment is an imposition of misplaced "superiority" which is enough to dampen an employee's spirit in her capacity for advancement. It affects her sense of judgment; it changes her life. If for this alone private respondent should be adequately compensated. Thus, for the anxiety, the seen and unseen hurt that she suffered, petitioners should also be made to pay her moral damages, plus exemplary damages, for the oppressive manner with which petitioners effected her dismissal from the service, and to serve as a forewarning to lecherous officers and employers who take undue advantage of their ascendancy over their employees. Disposition Decision of NLRC finding the dismissal of private respondent without just cause and ordering petitioners to pay her back wages computed from the time of her dismissal, which should be full back wages, is AFFIRMED. However, in view of the strained relations between the adverse parties, instead of reinstatement ordered by public respondent, petitioners should pay private respondent separation pay equivalent to one (1) month salary for every year of service until finality of this judgment. In addition, petitioners are ordered to pay private respondent P25,000.00 for moral damages and P10,000.00 for exemplary damages.

3. BARCENAS V NLRC (REV SIM DEE) FACTS - In 1978, Chua Se Su (Su, for short) in his capacity as the Head Monk of the Buddhist Temple of Manila and Baguio City and as President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Phils. Inc. hired the petitioner, Filomena Barcenas, who speaks the Chinese language as secretary and interpreter. - Her position required her to receive and assist Chinese visitors to the temple, act as tourist guide for foreign Chinese visitors, attend to the callers of the Head Monk as well as to the food for the temple visitors, run errands for the Head Monk such as paying the Meralco, PLDT, MWSS bills and act as liaison in some government offices. Aside from her pay and allowances under the law, she received an amount of P500 per month plus free board and lodging in the temple. - In December, 1979, Su assumed the responsibility of paying for the education of Barcenas nephew. In 1981, Su and Barcenas had amorous relations. In May, 1982, or five months before giving birth to the alleged son of Su on October 12, 1982, she was sent home to Bicol. Upon the death of Su in July, 1983, she remained and continued in her job. - . In 1985, Manuel Chua (Chua, for short) was elected President and Chairman of the Board of the Poh Toh Buddhist Association of the Philippines, Inc. and Rev. Sim Dee (Dee, for short) was elected Head Buddhist Priest. Thereafter, Chua and Dee discontinued payment of her monthly allowance and the additional P500 effective 1983. In addition, Barcenas and her son were evicted forcibly from their quarters in the temple by six police officers. She was brought first to the Police precinct in Tondo and then brought to Aloha Hotel where she was compelled to sign a written undertaking not to return to the Buddhist temple in consideration of the sum of P10,000. She refused and Chua shouted threats against her and her son. Her personal belongings including assorted jewelries were never returned. - The Labor Arbiter ruled for Barcenas but the NLRC reversed.

ISSUES 1. WON Barcenas was a regular employee of the Manila Buddhist Temple 2. WON Barcenas was illegally dismissed HELD 1. YES Reasoning - We agree with the petitioner's claim that she was a regular employee of the Manila Buddhist Temple as secretary and interpreter of its Head Monk, Su. As Head Monk, President and Chairman of the Board of Directors of the Poh Toh Buddhist Association of the Philippines, Su was empowered to hire the petitioner under Article V of the By-laws of the Association which states: "The President or in his absence, the Vice President shall represent the Association in all its dealings with the public, subject to the Board, shall have the power to enter into any contract or agreement in the name of the Association, shall manage the active business operation of the Association, shall deal with the bank or banks." - Chua and Dee, on the other hand, claimed that Barcenas was never an employee of the Poh Toh Temple but a servant who confined herself to the temple and to the personal needs of the late Chua Se Su and thus, her position is co-terminus with that of her master. However, the work that she performed in the temple could not be categorized as mere domestic work. Barcenas, being proficient in the Chinese language, attended to the visitors, mostly Chinese, who came to pray or seek advice before Buddha for personal or business problems; arranged meetings between these visitors and Su and supervised the preparation of the food for the temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some government offices; and made the payment for the temple, Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of a household helper. They were essential and important to the operation and religious functions of the temple. 2. NO Reasoning - Her status as a regular employee ended upon her return to Bicol in May, 1982 to await the birth of her lovechild allegedly by Su. The records do not show that she filed any leave from work or that a leave was granted her. Neither did she return to work after the birth of her child on October 12,1982, whom she named Robert Chua alias Chua Sim Tiong [Whoa, wait a minute! If youre alert youll realize that Sim is the NEW Head Monks name! Hmmm dont you think something elses going on here? ]. The NLRC found that it was only in July, 1983 after Su died that she went back to the Manila Buddhist Temple. - She herself supplied the reason for her return. She stated: "It was the death-bed instruction to her by Chua Se So to stay at the temple and to take care of the two boys and to see to it that they finish their studies to become monks and when they are monks to eventually take over the two temples as their inheritance from their father." - Thus, her return to the temple was no longer as an employee but rather as Su's mistress who is bent on protecting the proprietary and hereditary rights of her son and nephew. In her pleadings, the petitioner claims that they were forcefully evicted from the temple, harassed and threatened by respondents and that the Poh Toh Buddhist Association is a trustee corporation with the children as cestui que trust. These claims are not proper in this labor case. They should be appropriately threshed out in the complaints already filed by the petitioner before the civil courts. Due to these claims, we view the respondents' offer of P10,000 as indicative more of their desire to evict the petitioner and her son from the temple rather than an admission of an employer-employee relation. - The petitioner's claim for unpaid wages since May, 1982 which she filed only in 1986, has already prescribed. Under Article 292 of the Labor Code, all money claims arising from employer-employee relations must be filed within three years from the time the cause of action accrued, otherwise they shall forever be barred. - Finally, while petitioner contends that she continued to work in the temple after Su died, there is, however, no proof that she was rehired by the new Head Monk. In fact, she herself manifested that respondents made it clear to her in no uncertain terms that her services as well as her presence and that of her son were no longer needed. However, she persisted and continued to work in the temple without receiving her salary because she expected Chua and Dee to relent and permit the studies of the two boys. Consequently, under these circumstances, no employer-employee relationship could have arisen. Disposition Decision of the NLRC is AFFIRMED.

4. COLEGIO DE SAN JUAN DE LETRAN

V ASSN OF EMPLOYEES AND FACULTY OF LETRAN

340 SCRA 587 KAPUNAN; September 18, 2000 NATURE Petition for review on certiorari FACTS - Private respondent Ambas, the newly elected president of the Association of Employees and Faculty of Letran (Union) wanted to continue the renegotiation of its CBA with petitioner Colegio de San Juan de Letran (Letran) for the last 2 years of the CBAs 5 year lifetime. However, petitioner claimed the CBA was already prepared for signing by the parties. The CBA was submitted to a referendum by the union members, who rejected it. - Petitioner accused the union officers of bargaining in bad faith before the NLRC which decided in favor of petitioner but was later reversed on appeal with the NLRC. - The Union notified the National Conciliation and Mediation Board (NCMB) of its intention to strike on the grounds of petitioners refusal to bargain. Later, the parties agreed to disregard the unsigned CBA and start negotiating a new 5 year CBA for which the Union submitted its proposals. Ambas protested a recent changing of her schedule and petitioner sent the Union a letter dismissing Ambas for alleged insubordination after which the Union amended its notice of strike to include the said dismissal. - Both parties again discussed the ground rules for the CBA renegotiation but petitioner stopped the negotiations after purportedly receiving information that a new group of employees (ACEC) filed a petition for certification election, giving rise to the issue of majority representation of the employees. - The Union finally went on strike and the Sec. of Labor and Employment assumed jurisdiction, ordering those on strike to return to work and for petitioner to accept them under the same terms before the strike. All were readmitted except Ambas. The Sec. issued an order declaring petitioner guilty of unfair labor practice and directing the reinstatement of Ambas with backwages. Letrans MFR was denied and the CA affirmed the Sec.s decision, hence this petition. ISSUES 1. WON petitioner is guilty of unfair labor practice by refusing to bargain with the union 2. WON the termination of the Ambas amounts to an interference of the employees right to self-organization HELD 1. YES - Petitioner is guilty of unfair labor practice by its stern refusal to bargain in good faith with respondent union. - Article 252 defines collective bargaining as the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement. The Union, in sending its proposals during the 2 nd CBA negotiations, kept up its end of the bargain while Letran devised ways and means to prevent the negotiation. - Letran also failed to make a timely reply to the Unions proposals (no counter-proposal a month later), violating Article 250 which requires such a reply within 10 days upon receipt of a written notice of said proposals. Letrans refusal to reply is an indication of bad faith, showing a lack of sincere desire to negotiate. - In a last ditch effort, Letran suspended the bargaining process on the ground that it allegedly received information that ACEC had filed a petition for certification election. The mere filing of a petition for certification election does not ipso facto justify the suspension of negotiations when there is no legitimate representation issue raised; also, such an action for intervention had already prescribed. 2. YES - While we recognize the right of the employer to terminate the services of an employee for just cause, the dismissal of employees must be made within the parameters of law and pursuant to the tenets of equity and fair play and must be exercised in good faith. It must not amount to interfering with, restraining or coercing employees in the exercise of their right to self-organization as it would amount to unlawful labor practice under Article 248. -It would appear that Letran terminated Ambas in order to strip the union of a leader who would fight for her co-workers rights at the bargaining table and frustrate their desire to form a new CBA. The charge of insubordination was a mere ploy to give a color of legality to the action to dismiss her. Management may have the prerogative to discipline its employees for insubordination but when it interferes with employees right to self-organization, it amounts to union-busting which is a prohibited act. Disposition petition is DENIED for lack of merit.

5. SALVADOR V PHILIPPINE MINING SERVICE CORP 395 SCRA 729 PUNO; January 22, 2003 FACTS - JOSE V. SALVADOR was first employed by respondent in 1981. He rose from the ranks and assumed the position of Plant Inspection Foreman in 1991. He was tasked to: (1) supervise plant equipment and facility inspection; (2) confirm actual defects; (3) establish inspection standards and frequency; (4) analyze troubles and recommend counter measures; and (5) prepare weekly/monthly inspection schedule.[3] - As early as March 1, 1985, respondent instituted the shift boss scheme whereby the foreman from the Plant Section and the foreman from the Mining Section rotate as shift boss throughout their night shift to oversee and supervise both the mining and plant operations. The shift boss was entrusted with the care, supervision and protection of the entire plant. - Aside from his employment with respondent, petitioner co-owned and managed LHO-TAB Enterprises, with his partner Ondo Alcantara. They were engaged in the manufacture and sale of hollow blocks. On September 29, 1997, petitioners employment relation with respondent was tainted with charges of pilferage and violation of company rules and policy, resulting to loss of confidence. Respondents evidence disclose that on September 29, 1997, at about 9:30 a.m., Koji Sawa, respondents Assistant Resident Manager for Administration, was on his way back to his office in the plant. He and his driver, Roberto Gresones, saw petitioner operating respondents payloader, scooping fine ore from the stockpile and loading it on his private cargo truck. As the truck was blocking the access road leading to the stockyards gate, Sawas car stopped near the stockpile and the driver blew the horn thrice. Petitioner did not hear him because of the noise emanating from his operation of the payloader. Sawas driver found a chance to pass through when the payloader maneuvered to get another scoop from the fine ore stockpile. - As it was contrary to respondents standard operating procedure for the plant foreman to operate the payloader, Sawa went to the administration office to check the delivery receipt covering the loading operation of petitioner that morning. However, sales-in-charge Eduardo Guangco was in the wharf, overseeing the loading of respondents product. Hence, it was only in the afternoon that Sawa was able to verify the delivery receipt covering petitioners loading transaction. The delivery receipt showed that it was dolomite spillage that was purchased by buyer Ondo Alcantara, not the fine ore that he saw petitioner loading on his truck. The receipt also showed it was not the respondent but Alcantara, the buyer, who was responsible for loading the spillage he purchased from the plant. - On the basis of the foregoing facts PMSC terminated Salvador for pilferage of company property. Labor Arbiter and NLRC ruled in favor of Salvador but CA reversed. Hence, this recourse. ISSUES 1. WON the charge of pilferage against petitioner was supported by substantial evidence to warrant his dismissal from the service 2. WON the employer was well within its rights in imposing a harsh penalty considering the length of the employees service HELD 1. YES Ratio The settled rule in administrative and quasi-judicial proceedings is that proof beyond reasonable doubt is not required in determining the legality of an employers dismissal of an employee, and not even a preponderance of evidence is necessary as substantial evidence is considered sufficient. Substantial evidence is more than a mere scintilla of evidence or relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other minds, equally reasonable, might conceivably opine otherwise. Thus, substantial evidence is the least demanding in the hierarchy of evidence. Reasoning - The Labor Code provides that an employer may terminate the services of an employee for just cause and this must be supported by substantial evidence. In the case at bar, our evaluation of the evidence of both parties indubitably shows that petitioners dismissal for loss of trust and confidence was duly supported by substantial evidence. 2. NO Ratio As a general rule, employers are allowed wider latitude of discretion in terminating the employment of managerial employees as they perform functions which require the employers full trust and confidence. Reasoning - To be sure, length of service is taken into consideration in imposing the penalty to be meted an erring employee. However, the case at bar involves dishonesty and pilferage by petitioner which resulted in respondents loss of confidence in him. Unlike other just causes for dismissal, trust in an employee, once lost is difficult, if not impossible, to regain. Moreover, petitioner was not an ordinary rank-and-file employee. He occupied a high position of responsibility. As foreman and shift boss, he had over-all control of the care, supervision and operations of respondents entire plant. It cannot be over-emphasized that there is no substitute for honesty for

sensitive positions which call for utmost trust. Fairness dictates that respondent should not be allowed to continue with the employment of petitioner who has breached the confidence reposed on him. - In the case at bar, respondent has every right to dismiss petitioner, a managerial employee, for breach of trust and loss of confidence as a measure of self-preservation against acts patently inimical to its interests. Indeed, in cases of this nature, the fact that petitioner has been employed with the respondent for a long time, if to be considered at all, should be taken against him, as his act of pilferage reflects a regrettable lack of loyalty which he should have strengthened, instead of betrayed. Disposition The petition is DENIED.

6. HABANA V NLRC (HOTEL NIKKO) 298 SCRA 537 KAPUNAN; November 16, 1998 NATURE Petition for certiorari seeking reversal of NLRC decision which affirmed LA FACTS - On March 16, 1989, petitioner Antonio Habana was employed by Hotel Nikko Manila Garden (Nikko) as Rooms Division Director (RDD). One of his tasks as RDD was to conduct regular and surprise inspection of all work areas to ensure quality of performance. In the course of his employment, petitioner encountered several problems: his frequent clashes with Dolores Samson (his Senior Rooms Mgr); frequent absence and tardiness; rampant violations of hotel rules due to his failure to effectively manage his own division; and complaints regarding the overall quality (or lack thereof) of service of Nikko. As a result, private respondent Mr. Okawa, who replaced private respondent Mr. Yokoo as the executive asst. for Sales, issued a memorandum instructing petitioner, along with 2 others, to conduct and report daily inspection of the guestrooms and public areas. Petitioner sent a memorandum of protest claiming that Mr. Okawas orders was a form of harassment to ease him out of his position and illustrated in detail the other forms of alleged harassment supposedly perpetrated by Mr. Okawa. He, however, manifested that he had no intention to resign. - But on May 2, 1990, petitioner went to the Hotels Comptroller asking for his severance pay of P120,000 plus accrued benefits of P11, 865.28. The check was not given to him until he submitted his resignation letter (part of standard procedure). He also executed an Affidavit of Quitclaim, along with his resignation. The very next day, however, respondents received a letter from petitioner (addressed to Mr. Okawa) who insisted that he was forced to resign because he could no longer endure Mr. Okawas acts of harassment against him. 2 weeks later, petitioner filed a complaint for illegal dismissal and damages against Hotel Nikko and its officers, including his direct superiors, Yokoo and Okawa. The LA dismissed the complaint finding that petitioner voluntarily resigned and that the alleged acts of harassment were non-existent. On appeal, the NLRC affirmed the LAs decision likewise finding that petitioner voluntarily resigned as manifested by his act of negotiating for a huge amount of separation pay. When his MFR was dismissed, he came to the SC. ISSUE WON the resignation was forced upon Habana or he did so voluntarily HELD The resignation was voluntary. Ratio Voluntary resignation is the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment. Reasoning - In this case, petitioner was clearly having trouble performing his job, which undeniably carries immense responsibilities. Notable too was petitioners failure to see eye to eye with his immediate bosses, Mr. Yokoo and Mr. Okawa. Because of these difficulties, it was quite reasonable for petitioner to think of, and eventually, relinquishing his position voluntarily (and get a fat sum as severance pay in the bargain) instead of waiting to be fired. - Petitioner laments that he was completely stripped of his powers and functions as Director when Mr. Okawa tasked him with inspecting the hotels guest and public areas. Conducting these daily inspections, in effect, demoted him to a mere room inspector one notch higher than a bellboy. He claims that the humiliation he endured in going room to room, inspecting toilets and garbage areas, was all part of a malicious scheme to harass him out of his position. These orders were not borne out of mere whim and caprice.

They were made in response to the complaints they were getting. Moreover, these measures executed by the hotels top management were legitimate exercise of management prerogatives. - Petitioner asserts that private respondents coerced and intimidated him to resigning through their collective acts of harassment. Contrariwise, private respondents contend that it was petitioner who approached them indicating his desire to resign due to his difficulty in coping with his responsibilities and his differences with his immediate boss, Mr. Okawa. - Petitioner could not have been intimidated by private respondents to quit. In his memorandum, petitioner emphatically vowed not to resign despite private respondents alleged acts of harassment. Surprisingly, however, after only a few days he did quit alleging that he was forced and harassed to do so. If petitioner was adamant in his intention not to be coerced into leaving, how could he suddenly be forced to resign? Petitioner glaringly contradicted himself. His excuse is thus, unbelievable and unjustifiable. - Moreover, the issue in this case is factual in nature and firm is the principle that factual findings of the NLRC, particularly when they coincide with those of the LA, are accorded respect, even finality, and will not be disturbed for as long as such findings are supported by substantial evidence. We have painstaking reviewed the records of this case and we find no justifiable reason to overturn the findings of both the LA and the NLRC. Disposition Petition is DISMISSED. 7. PEARL S. BUCK FOUNDATION V NLRC 182 SCRA 446 GUTIERREZ; February 21, 1990 NATURE Appeal from the decision of the NLRC as well as the resolution denying the motion for reconsideration FACTS - Petitioner Pearl S. Buck Foundation, Inc. extends financial, education and medical assistance to indigent "Amerasian" youth through funds provided by individuals and church groups in the US. Private respondent Rubini Gosiaco Querimit was employed by the petitioner as a case worker in the Olongapo City branch. One of the wards assigned to Mrs. Querimit as such case worker was Richard Aliarte, Amerasian son of Andrea Aliarte. - It appears that Mrs. Querimit borrowed P300 from Andrea Aliarte. It is not clear from the records when she paid said debt but Mrs. Querimit once again borrowed P3,000.00 from Aliarte, who requested assistance from petitioner for the collection of the indebtedness. Mrs. Querimit paid the amount allegedly only after the petitioner had exerted incessant pressure on her. Thereafter, she received a letter dated from the petitioner's resident director informing her that her services would be terminated. Mrs. Querimit filed in the NLRC a complaint for illegal dismissal, underpayment, overtime pay and maternity benefits. - The labor arbiter dismissed the complaint for lack of merit. On appeal, the NLRC opined that borrowing money is not a ground for termination of employment under the Labor Code and that the loan is a "personal transaction" between Andrea Aliarte and Mrs. Querimit "the respondent not being a privy to (the) transaction and hence, had no cause to dismiss the complainant from her job more so that the loan had earlier been paid and settled." The petitioner filed an MFR. After it was denied, the petitioner filed the instant petition. ISSUE WON private respondent was illegally dismissed HELD 1. NO Ratio Borrowing money is neither dishonest, nor immoral, nor illegal, much less criminal. However, said act becomes a serious misconduct that may justly be asserted as a ground for dismissal when reprehensible behavior such as the use of a trust relationship as a leverage for borrowing money is involved. Reasoning - The fact that Aliarte has retracted her complaint is of no moment. She loaned money to the respondent, not once but twice and there can be no other assumption where the money came from except from the trust funds intended for the ward. The NLRC should have considered that a higher degree of prudence is required of the foundation's employees especially when it comes to financial matters affecting the petitioner's wards. The petitioner solicits or "begs" for money from abroad to support its wards. It cannot be a third person where that money is involved. Disposition The petition is GRANTED. The decision of the NLRC is REVERSED and SET ASIDE. The decision of the Labor Arbiter is REINSTATED.

8. G.R. No. 141926 July 14, 2004 CONRADO TAN, petitioner, vs. RESTITUTO TIMBAL, JR., respondent. Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals in CA-G.R. SP No. 51404 which affirmed with modification the decision of the National Labor Relations Commission (NLRC) in NLRC Case No. NCR-00-08-03596-89. The antecedents are as follows: On July 17, 1989, Restituto Timbal, Jr. and Ernesto Valenciano received a letter from their employer, Nationwide Steel Corporation (NSC), through Conrado Tan, its general manager, informing them that they were found to be among those employees who filed a complaint with the Social Security System (SSS) in which they claimed that NSC was not remitting its employees' SSS premiums. Tan required the two to explain their side on the matter within 24 hours. After submitting their explanation, Timbal, Jr. and Valenciano were instructed by Tan to report the following day for the resolution of the matter. However, when Timbal, Jr. and Valenciano arrived the following day, they were not allowed entry by the security guard. Both were handed a memorandum signed by Tan stating that they were being suspended indefinitely. Timbal, Jr. and Valenciano refused to receive the memorandum and tried to report for work the next day. Again, they were refused entry by the security guard. Aggrieved, Timbal, Jr. and Valenciano filed, on August 3, 1989, a complaint for illegal dismissal with the NLRC, against NSC, and impleaded Conrado Tan as respondent, in his capacity as general manager of the said corporation. 2 The case was docketed as NLRCNCR-00-08-03596-89. The respondents alleged in their position papers that the complainants falsely charged NSC of not paying the SSS premium contributions of its employees, and that both complainants were indefinitely suspended as a result of the criminal case filed by Benny Sy against them for their false charge. At the conclusion of the proceedings, the Labor Arbiter rendered his decision on August 9, 1990 in favor of the complainants and against the NSC only, the decretal portion of which reads as follows: WHEREFORE, finding the respondent company guilty of illegal dismissal as charged, judgment is hereby rendered ordering it to reinstate complainants to their former or equivalent positions without loss of seniority rights and to pay them full backwages and other benefits. SO ORDERED.3 Labor Arbiter Cornelio L. Linsangan found that the respondents failed to substantiate the charge that Timbal, Jr. and Valenciano falsely accused NSC of not paying the SSS premium contributions of its employees and failing to remit the said contributions. He also declared that the evidence on record showed that the legal officer of the SSS 4 cleared the complainants, through his letter, in which he stated that the SSS complaints against the NSC were the result of an investigation conducted by their field representative, and not by any of the employees of the NSC. The decision became final and executory as no appeal from the decision was filed by any of the parties. On October 10, 1990, the Labor Arbiter issued a Writ of Execution directing the sheriff to effect the complainants' reinstatement and to collect from the respondent NSC the accrued backwages, and remit the same to the complainants. The sheriff served a notice of garnishment on the Philippine Banking Corporation. However, the Bank did not respond to the notice, and the decision of the labor arbiter remained unsatisfied.5 The complainants filed an omnibus motion, praying that they be paid separation pay instead of being reinstated, as part of the monetary award in their favor. They also prayed for the issuance of an alias writ of execution enforceable against the respondent NSC and its officers/stockholders. Appended to their motion was a copy of the Articles of Incorporation of the NSC showing that Conrado Tan was one of its incorporators and member of the Board of Directors. They averred that all of the incorporators had unpaid subscribed capital stock, and that they had the right to collect their monetary claim from Conrado Tan's unpaid subscribed capital stock under the trust fund doctrine as provided in the Corporation Code. The Labor Arbiter granted the motion and issued his Order dated January 16, 1991, ordering Conrado D. Tan, Joseph O. Tiu, Rudy D. Ang, Pablo C. King and William T. Ang to pay to the respondent corporation, through the Office of the Labor Arbiter, their unpaid

subscribed capital stock in the total amount of P135,514.05 in order that the same may be applied to satisfy the complainants' backwages, failing which, an alias writ of execution would be issued by his Office against their assets. 6 The Arbiter, thereafter, issued an alias writ of execution. On March 7, 1991, the respondent NSC filed an Urgent Motion to Set Aside the Alias Writ of Execution filed by the complainants. However, the Labor Arbiter denied the said motion in his Order dated May 2, 1991. 7 Conrado Tan and William Ang filed with the NLRC a petition for the issuance of a writ of preliminary injunction and a temporary restraining order to enjoin the implementation of the alias writ of execution issued by the Labor Arbiter. They alleged that they were never furnished copies of the omnibus motion filed by Timbal, Jr. and Valenciano; that they were not notified of any hearing on the matter; and, that the Labor Arbiter acted in excess or lack of jurisdiction when he issued an alias writ of execution ordering the sheriff to collect from the respondent NSC their unpaid subscriptions. On June 18, 1997, the NLRC rendered a Decision granting the motion of Tan and Ang and setting aside the assailed order and alias writ of execution of the Labor Arbiter. The NLRC ruled as follows: It may be true that the petitioners were/are stockholders of Nation Wide (sic) Steel Corp. and that accordingly, they have unpaid subscription to the letter but the records likewise, readily show that petitioners were not impleaded as party respondents in NLRC Case No. 08-3596-80 (sic). A stockholder who has an unpaid subscription is not automatically held liable in case of judgment against the corporation where he has an unpaid subscription. A separate complaint for the payment of the unpaid subscription should be filed so that unpaid subscriptions of stockholders be made answerable and liable to the obligations and debts of the corporation. This Commission has not acquired jurisdiction over the stockholders of the respondent corporation.8 The NLRC denied the complainants' motion for reconsideration of the said decision. Aggrieved, Restituto Timbal, Jr., filed his petition for certiorari under Rule 65, with this Court for the nullification of the decision of the NLRC, asserting that the NLRC committed a grave abuse of its discretion in setting aside the order and alias writ of execution issued by the Labor Arbiter.9 On January 20, 1999, this Court issued a Resolution referring the case to the Court of Appeals conformably to its ruling in St. Martin Funeral Homes vs. NLRC.10 After due proceedings, the Court of Appeals rendered a Decision on September 24, 1999, affirming the decision of the NLRC as far as William Ang was concerned, but granting the petition and affirming the Order and Alias Writ of Execution of the Labor Arbiter against Conrado Tan. The decretal portion of the decision reads: IN VIEW OF ALL THE FOREGOING, the assailed NLRC decision dated June 18, 1997 is AFFIRMED insofar as Joseph O. Tiu, Rudy D. Ang, Pablo C. King and William T. Ang are concerned. However, as regard (sic) Conrado D. Tan, the Orders of Labor Arbiter Cornelio L. Linsangan dated January 16 and May 2, 1991, are REINSTATED, SUSTAINED and UPHELD. No pronouncement as to costs. SO ORDERED.11 After the CA denied petitioner Tan's motion for reconsideration, the latter filed the petition at bar contending that the Court of Appeals erred in finding him, jointly and severally, liable with the NSC for the Labor Arbiter's monetary award in favor of the respondent on its finding that he acted in bad faith and with malice in suspending the respondent. The sole issue in this case is whether the petitioner is liable, either jointly or severally with the NSC, for the monetary award in favor of the respondent herein in NLRC Case No. NCR-00-08-03596-89. The petitioner avers that under his decision, the Labor Arbiter found the NSC solely liable for the monetary award issued in favor of the respondent. Hence, the alias writ of execution issued by the Labor Arbiter should be directed only against the NSC and not against him. As such, his property, real and personal, should not be burdened by the said award. For his part, the respondent contends that the Court of Appeals did not err in holding the petitioner, jointly and severally, liable with NSC for the monetary award in his favor on its finding that the petitioner acted in bad faith and with malice in suspending him. The petition is meritorious.

Irrefragably, under the decision of the Labor Arbiter in NLRC Case No. NCR-00-08-03596-89, only the NSC was found liable for the monetary awards in favor of the complainants therein, including the herein respondent. The petitioner, although the general manager of NSC, was not ordered to pay for the monetary award in favor of the complainants, jointly or severally, with the NSC. The decision of the Labor Arbiter had become final and executory; hence, immutable. As we held in Industrial Management International Development Corporation vs. NLRC:12 It is an elementary principle of procedure that the resolution of the court in a given issue as embodied in the dispositive part of a decision or order is the controlling factor as to settlement of rights of the parties. Once a decision or order becomes final and executory, it is removed from the power or jurisdiction of the court which rendered it to further alter or amend it. It thereby becomes immutable and unalterable and any amendment or alteration which substantially affects a final and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that purpose. An order of execution which varies the tenor of the judgment or exceeds the terms thereof is a nullity. None of the parties in the case before the Labor Arbiter appealed the Decision dated March 10, 1987; hence the same became final and executory. It was, therefore, removed from the jurisdiction of the Labor Arbiter or the NLRC to further alter or amend it. Thus, the proceedings held for the purpose of amending or altering the dispositive portion of the said decision are null and void for lack of jurisdiction. Also, the Alias Writ of Execution is null and void because it varied the tenor of the judgment in that it sought to enforce the final judgment against "Antonio Gonzales/Industrial Management Development Corp. (INIMACO) and/or Filipinas Carbon and Mining Corp. and Gerardo Sicat," which makes the liability solidary.13 Not even the NLRC, the Court of Appeals and this Court has any appellate jurisdiction to alter or reverse the decision of the Labor Arbiter. The Court of Appeals correctly cited our ruling in MAM Realty Development Corporation vs. NLRC,14 that in labor cases, corporate directors and officers are solidarily liable with the corporation for the termination of employment of corporate employees committed with malice or bad faith. The ruling applies in a case where a corporate officer acts with malice or bad faith in suspending an employee. Whether or not the petitioner acted with malice or bad faith in ordering the suspension of the respondent is a question of fact submitted by the parties to the Labor Arbiter for resolution. In the instant case, the Labor Arbiter did not make any finding in his decision in NLRC Case No. NCR-00-08-03596-89 that the petitioner acted with malice or bad faith in ordering the suspension of the respondent. Neither did he hold the petitioner liable, either jointly or severally with the NSC, for the monetary award in favor of the complainants therein including the respondent herein. The Court of Appeals had no jurisdiction to delve into and resolve an issue already passed upon by the Labor Arbiter with finality. For the Court of Appeals to do so in a petition for certiorari from the decision of the NLRC, by granting the petitioner's petition for a writ of injunction, is to do indirectly what it is proscribed from doing directly. Far from committing a grave abuse of its discretion amounting to excess or lack of jurisdiction, the NLRC acted in accordance with law and current jurisprudence. IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 51404 is REVERSED and SET ASIDE. The assailed decision of the NLRC is AFFIRMED. No costs. SO ORDERED.

9. VIERNES V NLRC (BENGUET ELECTRIC COOP) 400 SCRA 557 AUSTRIA-MARTINEZ; April 4, 2003 FACTS - The 15 complainants services were contracted as meter readers by Benguet Electric Cooperative (BENECO) for less than a months duration from October 8 to 31, 1990. Their employment contracts, couched in identical terms, read: You are hereby appointed as METER READER (APPRENTICE) under BENECO-NEA Management with compensation at the rate of SIXTY-SIX PESOS AND SEVENTY-FIVE CENTAVOS (P66.75) per day from October 08 to 31, 1990. - The said term notwithstanding, the complainants were allowed to work beyond October 31, 1990, or until January 2, 1991. On January 3, 1991, they were each served their identical notices of termination dated December 29, 1990. The same read:

Please be informed that effective at the close of office hours of December 31, 1990, your services with the BENECO will be terminated. Your termination has nothing to do with your performance. Rather, it is because we have to retrench on personnel as we are already overstaffed. - The complainants filed separate complaints for illegal dismissal. It is the contention of the complainants that they were not apprentices but regular employees whose services were illegally and unjustly terminated in a manner that was whimsical and capricious. On the other hand, the respondent invokes Article 283 of the Labor Code in defense of the questioned dismissal. - The Labor Arbiter dismissed the complaints for illegal dismissal but directed BENECO to extend the contract of each complainant, with the exception of Viernes who was ordered to be appointed as regular employee, a months salary as indemnity for failure to give the 30-day notice, and backwages. - The NLRC declared the complainants dismissal illegal, thus ordering their reinstatement to their former position as meter readers or to any equivalent position with payment of backwages limited to one year but deleting the award of indemnity and attorneys fees. The award of underpayment of wages was affirmed. ISSUES 1. WON the NLRC committed grave abuse of discretion in ordering the reinstatement of petitioners to their former position as meter readers on probationary status in spite of its finding that they are regular employees under Article 280 of the Labor Code 2. WON the NLRC committed grave abuse of discretion in limiting the backwages of petitioners to one year only in spite of its finding that they were illegally dismissed, which is contrary to the mandate of full backwages until actual reinstatement but not to exceed 3 years 3. WON the NLRC committed grave abuse of discretion in deleting the award of indemnity pay which had become final because it was not appealed and in deleting the award of attorneys fees because of the absence of a trial-type hearing 4. WON the mandate of immediately executory on the reinstatement aspect even pending appeal as provided in the decision of Labor Arbiters equally applies in the decision of the NLRC even pending appeal, by means of a motion for reconsideration of the order reinstating a dismissed employee or pending appeal because the case is elevated on certiorari before the Supreme Court HELD 1. YES Ratio There are two separate instances whereby it can be determined that an employment is regular: (1) The particular activity performed by the employee is necessary or desirable in the usual business or trade of the employer; or (2) if the employee has been performing the job for at least a year. Reasoning - Petitioners fall under the first category. They were engaged to perform activities that are necessary to the usual business of BENECO. We agree with the labor arbiters pronouncement that the job of a meter reader is necessary to the business of BENECO because unless a meter reader records the electric consumption of the subscribing public, there could not be a valid basis for billing the customers. The fact that the petitioners were allowed to continue working after the expiration of their employment contract is evidence of the necessity and desirability of their service to BENECOs business. In addition, during the preliminary hearing of the case on February 4, 1991, BENECO even offered to enter into another temporary employment contract with petitioners. This only proves BENECOs need for the services of the petitioners. With the continuation of their employment beyond the original term, petitioners have become full-fledged regular employees. The fact alone that the petitioners have rendered service for a period of less than 6 months does not make their employment status as probationary. - The principle [exception to the rule in Ratio] enunciated in Brent School vs. Zamora applies only with respect to fixed term employments. While it is true that petitioners were initially employed on a fixed term basis as their employment contracts were only for October 8 to 31, 1990, after October 31, 1990, they were allowed to continue working in the same capacity as meter readers without the benefit of a new contract or agreement or without the term of their employment being fixed anew. After October 31, 1990, the employment of petitioners is no longer on a fixed term basis. The complexion of the employment relationship of petitioners and BENECO is thereby totally changed. Petitioners have attained the status of regular employees. 2. YES Reasoning - A279 LC, as amended by RA 6715 [effective March 21, 1989], provides that an illegally dismissed employee is entitled to full back wages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. Since petitioners were employed on October 8, 1990, the amended provision shall apply to the present case. Hence, it was patently erroneous, tantamount to grave abuse of discretion on the part of the NLRC in limiting to one year the back wages awarded to petitioners. 3. YES

Ratio An employer becomes liable to pay indemnity to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process Reasoning - The indemnity is in the form of nominal damages intended not to penalize the employer but to vindicate or recognize the employees right to procedural due process which was violated by the employer. Under A2221 CC, nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. - Indemnity is not incompatible with the award of back wages. These two awards are based on different considerations. Back wages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. On the other hand, the award of indemnity is meant to vindicate or recognize the right of an employee to due process which has been violated by the employer. In this case, BENECO failed to comply with the provisions of Article 283 of the Labor Code which requires an employer to serve a notice of dismissal upon the employees and to the Department of Labor, at least one month before the intended date of termination. As to the award of attorneys fees, the same is justified by the provisions of Article 111 of the Labor Code. 4. YES Reasoning - A223 LC is plain and clear that the decision of the NLRC shall be final and executory after 10 calendar days from receipt by the parties. In addition, Section 2(b), Rule VIII of the New Rules of Procedure of the NLRC provides that should there be a motion for reconsideration entertained pursuant to Section 14, Rule VII of these Rules, the decision shall be executory after 10 calendar days from receipt of the resolution on such motion. We find nothing inconsistent or contradictory between the two. The provision of the NLRC Rules of Procedure merely provides for situations where a motion for reconsideration is filed. Since the Rules allow the filing of a motion for reconsideration of a decision of the NLRC, it simply follows that the ten-day period provided under Article 223 of the Labor Code should be reckoned from the date of receipt by the parties of the resolution on such motion. In the case at bar, petitioners received the resolution of the NLRC denying their motion for reconsideration on October 22, 1992. Hence, it is on November 2, 1992 that the questioned decision became executory. Disposition Petition PARTLY GRANTED. Decision of the NLRC is MODIFIED. BENECO is ordered to reinstate petitioners to their former or substantially equivalent position as regular employees, without loss of seniority rights and other privileges, with full back wages from the time of their dismissal until they are actually reinstated. The indemnity to petitioners is REINSTATED. BENECO is also ordered to pay attorneys fees in the amount of 10% of the total monetary award due to the petitioners. In all other respects the assailed decision and resolution are AFFIRMED.

10. ARIOLA V PHILEX MINING CORP 446 SCRA 514 CARPIO; August 9, 2005 NATURE Petition for review of the decision of the CA finding the retrenchment of the petitioners to be valid FACTS - Petitioners are former supervisors of respondent Philex Mining Corp. Philex sustained financial losses in its operations and adopted several measures including reducing personnel through early voluntary retirement and retrenchment programs to save costs. The labor union representing the rank-and-file employees and the union representing the supervisory employees signed a MOA with Philex prescribing the criteria for retrenchment. - Petitioners, with 6 other supervisors and 49 rank-and-file employees, received from Philex termination notices informing them of their retrenchment. Philex paid them separation pay, and all of them signed Deeds of Release and Quitclaim in Philexs favor. Claiming that Philex dismissed them illegally, these supervisors and rank-and-file employees separately submitted for voluntary arbitration the legality of their separation from service. The rank-and-file employees case - The rank-and-file employees case was referred to Arbitrator Valdez. Valdez ruled in the employees favor, declared their dismissal illegal, and ordered their reinstatement. He held that Philex failed to prove its claim of financial losses and that the criteria for retrenchment in the rank-and-files MOA were arbitrary and inconsistent with the CBA then in force. The CA reversed Valdezs finding on Philexs financial condition and held that Philex had a valid reason to undertake retrenchment. Nevertheless, the appellate court affirmed Valdezs ruling that Philex is liable for illegal dismissal because the criteria for retrenchment in the rank-and-files MOA were inequitable. Philex further appealed to this Court, which denied Philexs petition. The supervisory employees case

- The supervisors case was referred to Arbitrator Advincula, who issued an order to reinstate petitioners and their co-complainants, after Philex failed to timely file its Position Paper. On Philexs motion, Advincula admitted Philexs Position Paper and Supplementary Position Paper. He rendered judgment finding sufficient basis or just cause for Philex to undertake a retrenchment. Advincula also held that petitioners were barred from questioning their separation from service because they availed of the early retirement program and executed the Deeds of Release and Quitclaim releasing Philex from further liability. Petitioners appealed to the CA, which denied the petition for lack of merit. The appellate court no longer ruled on the validity of Philexs retrenchment program because it treated its decision in the rank-and-file employees case as the law of the case on that issue. ISSUES 1. WON petitioners retired or whether Philex dismissed them from service 2. WON petitioners dismissal was illegal HELD 1. NO Ratio If the intent to retire is not clearly established or if the retirement is involuntary, it is to be treated as a discharge. Reasoning - Although there is no dispute that petitioners received varied amounts denominated as retirement gratuity, the records show that Philex paid these amounts because of petitioners retrenchment. Under Philexs Retirement Gratuity Plan, retirement gratuity is paid not only to retiring employees but also to those who, like petitioners, are dismissed for cause beyond their control such as retrenchment. Philex treated the retirement gratuity as petitioners basic separation pay as indicated in Deeds of Release and Quitclaims petitioners signed. Significantly, Philex paid petitioners such separation pay after notifying them of their retrenchment. Obiter - In the letter addressed to petitioner Biete, Roxas of Philex Retirement Trust informed Biete that he was entitled to receive retirement gratuity because his separation, as a result of the retrenchment program, is for cause beyond his control. Biete submitted Roxas letter to the CA after that court had rendered its decision. However, at that time, petitioners did not yet file their MFR. Considering the import of the letter, it was error for the CA not to have considered the letter in resolving petitioners MFR. There can be no denial of due process where the party claiming to be aggrieved is the one who is guilty of not disclosing to the court the vital document that contains the most conclusive evidence regarding the matter in dispute. Philex cannot feign ignorance of this letter. 2. YES Ratio A substantive defect invalidates a dismissal because the ground for dismissal is negated by such defect, rendering the dismissal without basis. Reasoning - Philexs financial condition justified petitioners retrenchment. What Philex failed to do was implement its retrenchment program in a just and proper manner. Its failure to use a reasonable and fair standard in the computation of the supervisors demerits points is not merely a procedural but a substantive defect which invalidates petitioners dismissal. When the defect is procedural, the dismissal remains valid because the basis of the dismissal is not in any way affected by such defect. Disposition The petition is GRANTED. The decision of the CA is SET ASIDE. We ENTER another judgment finding petitioners to have been illegally dismissed and ordering Philex to reinstate petitioners with full backwages, provided that the amounts petitioners received shall be deducted therefrom. If reinstatement is no longer possible, Philex shall pay backwages as computed above plus separation pay.

11. PRODUCERS BANK OF THE PHILIPPINES v. NATIONAL LABOR RELATIONS COMMISSION and PRODUCERS BANK EMPLOYEES ASSOCIATION G.R. No. 100701 March 28, 2001 Facts: Producers Bank of the Philippines, a banking institution, has been providing several benefits to its employees since 1971 when it started its operation. Among the benefits it had been regularly giving is a mid-year bonus equivalent to an employees one-month basic pay and a Christmas bonus equivalent to an employees one whole month salary (basic pay plus allowance). When P.D. 851, the law granting a 13th month pay, took effect, the basic pay previously being given as part of the Christmas bonus was applied as compliance to it (P.D. 851), the allowances remained as Christmas bonus. From 1981 up to 1983, the bank continued giving one month basic pay as mid-year bonus, one month basic pay as 13th month pay but the Christmas bonus was no longer based on the allowance but on the basic pay of the employees which is higher.

In the early part of 1984, the bank was placed under conservatorship but it still provided the traditional mid-year bonus. By virtue of an alleged Monetary Board Resolution No. 1566, bank only gave a one-half (1/2) month basic pay as compliance of the 13th month pay and none for the Christmas bonus. Private respondent argues that the mid-year and Christmas bonuses, by reason of their having been given for thirteen consecutive years, have ripened into a vested right and, as such, can no longer be unilaterally withdrawn by petitioner without violating Article 100 of Presidential Decree No. 4429 which prohibits the diminution or elimination of benefits already being enjoyed by the employees. Although private respondent concedes that the grant of a bonus is discretionary on the part of the employer, it argues that, by reason of its long and regular concession, it may become part of the employees regular compensation. On the other hand, petitioner asserts that it cannot be compelled to pay the alleged bonus differentials due to its depressed financial condition, as evidenced by the fact that in 1984 it was placed under conservatorship by the Monetary Board. According to petitioner, it sustained losses in the millions of pesos from 1984 to 1988, an assertion which was affirmed by the labor arbiter. Moreover, petitioner points out that the collective bargaining agreement of the parties does not provide for the payment of any mid-year or Christmas bonus. Issue # 1: whether private respondent is entitled to the bonuses pay prayed for Held #1: No. A bonus is an amount granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. It is an act of generosity granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits. The granting of a bonus is a management prerogative, something given in addition to what is ordinarily received by or strictly due the recipient. Thus, a bonus is not a demandable and enforceable obligation, except when it is made part of the wage, salary or compensation of the employee. However, an employer cannot be forced to distribute bonuses which it can no longer afford to pay. To hold otherwise would be to penalize the employer for his past generosity. Issue #2: whether private respondent is entitled to 13th month pay Held #2: No. PD 851 requires all employers to pay their employees receiving a basic salary of not more than P 1,000 a month, regardless of the nature of the employment, a 13th month pay, not later than December 24 of every year. However, employers already paying their employees a 13th month pay or its equivalent are not covered by the law. Under the Revised Guidelines on the Implementation of the 13th Month Pay Law, the term equivalent shall be construed to include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary. The intention of the law was to grant some relief - not to all workers but only to those not actually paid a 13thmonth salary or what amounts to it, by whatever name called. It was not envisioned that a double burden would be imposed on the employer already paying his employees a 13th month pay or its equivalent whether out of pure generosity or on the basis of a binding agreement. To impose upon an employer already giving his employees the equivalent of a 13th month pay would be to penalize him for his liberality and in all probability, the employer would react by withdrawing the bonuses or resist further voluntary grants for fear that if and when a law is passed giving the same benefits, his prior concessions might not be given due credit. In the case at bar, even assuming the truth of private respondents claims regarding the payments received by its members in the form of 13th month pay, mid-year bonus and Christmas bonus, it is noted that, for each and every year involved, the total amount given by petitioner would still exceed, or at least be equal to, one month basic salary and thus, may be considered as an equivalent of the 13thmonth pay mandated by PD 851. Issue # 3: whether private respondent is entitled to holiday pay Held #3: No. The reduction of the divisor to 303 (from 314) was done for the sole purpose of increasing the employees overtime pay, and was not meant to exclude holiday pay from the monthly salary of petitioners employees. In fact, it was expressly stated in the inter-office memorandum - also referred to by private respondent in its pleadings - that the divisor of 314 will still be used in the computation for cash conversion and in the determination of the daily rate. Thus, based on the records of this case and the parties own admissions, the Court holds that petitioner has complied with the requirements of Article 94 of the Labor Code.

12. STA. CATALINA COLLEGE V NLRC (TERCERO) 416 SCRA 233 CARPIO MORALES; November 19, 2003 NATURE Petition for review on cetiorari FACTS - In June 1955, Hilaria was hired as an elementary school teacher at the Sta. Catalina College. In 1970, she applied for and was granted a one year leave of absence without pay on account of the illness of her mother. After the expiration in 1971 of her leave of absence, she had not been heard from by petitioner school. In the meantime, she was employed as a teacher at the San Pedro Parochial School during school year 1980-1981 and at the Liceo de San Pedro, Bian, Laguna during school year 1981-1982. - In 1982, she applied anew at petitioner school which hired her. - On May 31, 1997, Hilaria reached the compulsory retirement age of 65. Retiring pursuant to Article 287 of the Labor Code, as amended by Republic Act 7641, petitioner school pegged her retirement benefits at P59,038.35, computed on the basis of fifteen years of service from 1982 to 1997. Her service from 1955 to 1970 was excluded in the computation, petitioner school having asserted that she had, in 1971, abandoned her employment. - Hilaria insisted, however, that her retirement benefits should be computed on the basis of her thirty years of service, inclusive of the period from 1955 to 1970. She thus concluded that she was entitled to P190,539.90. ISSUE WON Hilarias services for petitioner school during the period from 1955 to 1970 should be factored in the computation of her retirement benefits HELD - Hilaria cannot be credited for her services in 1955-1970 in the determination of her retirement benefits. For, after her one year leave of absence expired in 1971 without her requesting for extension thereof as in fact she had not been heard from until she resurfaced in 1982 when she reapplied with petitioner school, she abandoned her teaching position as in fact she was employed elsewhere in the interim and effectively relinquished the retirement benefits accumulated during the said period. - It is not disputed that the approved one year leave of absence without pay of Hilaria expired in 1971, without her, it bears repeating, requesting for extension thereof or notifying petitioner school if and when she would resume teaching. Nor is it disputed that she was rehired only in 1982 after filing anew an application, without her proffering any explanation for her more than a decade of absence. Under the circumstances, abandonment of work at petitioner school in 1971 is indubitably manifest. - It should be noted that when Hilaria abandoned her teaching position in 1971, the law in force was Republic Act 1052 or the Termination Pay Law, as amended by Republic Act 1787, Section 1 of which provides: SEC. 1. In cases of employment, without a definite period, in a commercial, industrial, or agricultural establishment or enterprise, the employer or the employee may terminate at any time the employment with just cause; or without just cause in the case of an employee by serving written notice on the employer at least one month in advance, or in the case of an employer, by serving such notice to the employee at least one month in advance or one-half month for every year of service of the employee, whichever is longer, a fraction of at least six months being considered as one whole year. The employer, upon whom no such notice was served in case of termination of employment without just cause may hold the employee liable for damages. The employee, upon whom no such notice was served in case of termination of employment without just cause shall be entitled to compensation from the date of termination of his employment in an amount equivalent to his salaries or wages corresponding to the required period of notice. xxx - Above-stated law should thus apply in the case at bar. Abandonment of work being a just cause for terminating the services of Hilaria, petitioner school was under no obligation to serve a written notice to her. - As Hilaria was considered a new employee when she rejoined petitioner school upon re-applying in 1982, her retirement benefits should thus be computed only on the basis of her years of service from 1982 to 1997. - In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory

retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Disposition Petition granted in part. 13. CHUA V NLRC 218 SCRA 545 FELICIANO; February 8, 1993 NATURE Petition for certiorari FACTS - The Union of Filipro Employees, of which petitioner Chua was a member, declared a strike against the private respondent company, Nestle Philippines, Inc. During the strike, several of the striking employees threw stones at the trucks entering and leaving the company premises. One truck. whose driver was rendered unconscious by a stone hitting him on the head, rammed a private vehicle and crashed into a beauty parlor resulting in the death of three persons and extensive damage to private property. Consequently, a criminal complaint for multiple murder and frustrated murder was filed against petitioner and several other employees who were believed to be responsible for the stoning incident which resulted in the deaths and property damage. The criminal complaint was dismissed for insufficiency of evidence. The strike itself was, however, declared illegal in two decisions of the National Labor Relations Commission (NLRC) which were affirmed by the Supreme Court. - Subsequently, the union and its striking members offered to return to work and were readmitted by the company except 69 union officers and 33 union members, including petitioner. The union's counsel wrote to the private respondent requesting the reinstatement of five employees, including petitioner. The request, however, was denied. Petitioner received a notice of dismissal from private respondent for having participated in the illegal strike. - Two days later, petitioner initiated a complaint for illegal dismissal against private respondent company. The Labor Arbiter rendered a decision finding that petitioner had been validly dismissed. It was held that the evidence introduced by private respondent, in the form of the testimony of Maniego, Personnel Supervisor of its Cabuyao Plant, that he positively saw and identified petitioner as one of the union members who actively participated and manned the barricades during the strike is "a concrete manifestation of an illegal act that is frowned upon by law." Wishing to be reinstated also, petitioner appealed the Labor Arbiter's decision to the NLRC which, however, affirmed in toto the decision of the Labor Arbiter. Hence, this petition. ISSUE WON the NLRC committed grave abuse of discretion in affirming the decision of the Labor Arbiter HELD NO - We find this contention to be without merit, Petitioner's participation in the illegal strike and his commission of illegal acts while the strike was in progress, i.e., he participated in the barricade which barred people from entering and/or leaving the employer's premises, had been sufficiently established by substantial evidence, including the testimony of Mr. Maniego, Personnel Supervisor at the Cabuyao Plant. Mr. Maniego testified, among other things, that he was not able to report to work because of the presence of the barricade. The law prohibits any person engaged in picketing from obstructing free ingress to or egress from the employer's premises for lawful purposes. - While the criminal complaint where petitioner was included as one of the accused was dismissed for insufficiency of evidence, the Court considers that the dismissal of the criminal complaint did not preclude a finding by the competent administrative authorities, that petitioner had indeed committed acts inimical to the interest of his employer. - Private respondent's guilt or innocence in the criminal case is not determinative of the existence of a just or authorized cause for his dismissal. This doctrine follows from the principle that the quantum and weight of evidence necessary to sustain conviction in criminal cases are quite different from the quantum of evidence necessary for affirmance of a decision of the Labor Arbiter and of the NLRC. - Since petitioner's participation in the unlawful and violent strike was amply shown by substantial evidence, the NLRC was correct in holding that the dismissal of petitioner was valid being based on lawful or authorized cause. Disposition Petition dismissed.

14. KIAMCO V NLRC (PNOC) 309 SCRA 424 BELLOSILLO; June 29, 1999 FACTS - Private respondent PHILIPPINE NATIONAL OIL COMPANY (PNOC) through its Energy Research and Development Division, hired petitioner Cisell Kiamco as a project employee in its Geothermal Agro-Industrial Plant Project in Valencia, Negros Oriental. The Contract of Employment1 stipulated among others that Kiamco was being hired by the company as a technician for a period of 5 months from July 1 1992 to Nov 30 1992, or up to the completion of the project, whichever would come first. - After the termination of the contract, a 2nd one was entered into by the parties containing basically the same terms and conditions. The period of employment was from Dec 1 1992 to April 30 1993. - Kiamco was again re-hired for 6 months (May 1 1993 to Nov 30 1993) - On Oct 20 1993 Kiamco received a Memorandum from the administration department demanding an explanation from him on certain infractions he allegedly committed: 1. Misconduct 2. Absence without official leave (AWOL) 3. Non-compliance of administrative reporting procedure on accidents 4. Unauthorized use of company vehicles - Kiamco tried to explain his side but private respondents found his explanation unsatisfactory. On Oct 28 1993 Kiamco received a Memorandum placing him under preventive suspension from Nov 1 1993 to Nov 30 1993 pending further investigation. No investigation however was ever conducted. Private respondents contended that an investigation was not necessary since Kiamco had ceased to be an employee ipso facto upon the expiration of his employment contract on Nov 30 1993. - On Dec 1 1993 Kiamco reported back to work but was prevented by security guards from entering the company premises. On May 27 1994 private respondent reported to the Department of Labor and Employment that petitioner Kiamco was terminated on Nov 1 1993 due to the expiration of his employment contract and the abolition of his position. - On April 25 1994 Kiamco filed before the NLRC Sub-Regional Arbitration Branch No. VII a Complaint for illegal suspension and dismissal against the PNOC. He prayed that he be reinstated to his former position and paid back wages. Labor Arbiter dismissed the complaint for lack of merit. According to the Labor Arbiter, the three (3) employment contracts were freely and voluntarily signed by Kiamco and the PNOC representatives. The contracts plainly stated that Kiamco was being hired for a specific project and for a fixed term. Therefore Kiamco could not question his dismissal since it was in accordance with his employment contract. - Kiamco appealed the decision of the Labor Arbiter to public respondent NLRC which on Sept 27 1996 reversed the Labor Arbiter and declared Kiamco as a regular employee of the respondents and to have been illegally dismissed by the latter. Ordering respondents to REINSTATE the complainant to his former position without loss of seniority rights and privileges with back wages from the date of his dismissal up to actual reinstatement less any income he may have earned during the pendency of the case. - Private respondents filed a MFR of the decision of the NLRC contending that it erred in holding that Kiamco was a regular employee and that the findings of the Labor Arbiter that Kiamco was a project employee should be affirmed. - NLRC modified its Sept 27 1996 Decision declaring that the complainant-appellant is declared a project employee at respondents Geothermal Plant and to continue with said employment until the full completion of the project but in the absence of proof to that effect, complainant is hereby awarded back wages for a period of 6 months or in the amount of P23,100.00. The order declaring the complainant-appellant as a regular employee of respondent PNOC, and for said company to reinstate the complainant with full back wages is hereby deleted. - In his petition for certiorari, Kiamco charges the NLRC with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the questioned Resolution and prays that it be nullified and he reinstated to his former position. He also seeks payment of back wages, damages and attorneys fees. ISSUES 1. WON petitioner is a regular employee or a project employee 2. WON petitioner is entitled to reinstatement without loss of seniority rights and privileges and to the payment of full back wages 3. WON petitioner is entitled to moral and exemplary damages. HELD 1. Kiamco was correctly labeled by the NLRC as a project employee. -Article 280 of the Labor Code Regular and casual employment. - The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed

- for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. - An employee shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, that any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. - In Violeta v. NLRC [10 October 1997, 280 SCRA 520.] it was held The principal test for determining whether particular employees are properly characterized as "project employees," as distinguished from "regular employees," is whether or not the "project employees" were assigned to carry out a "specific project or undertaking," the duration (and scope) of which were specified at the time the employees were engaged for that project. As defined, project employees are those workers hired (1) for a specific project or undertaking, and (2) the completion or termination of such project or undertaking has been determined at the time of engagement of the employee. - Under Policy Instruction No. 20 of the Secretary of Labor, project employees are those employed in connection with a particular project. Non-project or regular employees are those employed without reference to any particular project. - The three Contracts of Employment entered into by Kiamco clearly established that he was a project employee because (a) he was specifically assigned to work for a particular project, which was the Geothermal Agro-Industrial Demonstration Plant Project of private respondents, and (b) the termination and the completion of the project or undertaking was determined and stipulated in the contract at the time of his employment. 2. YES - In Santos v. NLRC (154 SCRA 166) it was held The normal consequences of a finding that an employee has been illegally dismissed are, that the employee becomes entitled to reinstatement to his former position without loss of seniority rights and the payment of back wages. - 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 back wages allows the same employee to recover from the employer that which he had lost by way of wages as a result of his dismissal. - The argument of private respondents that reinstatement and payment of back wages could not be made since Kiamco was not a regular employee is apparently misplaced. As quoted above, the normal consequences of an illegal dismissal are the reinstatement of the aggrieved employee and the grant of back wages. These rights of an employee do not depend on the status of his employment prior to his dismissal but rather to the legality and validity of his termination. The fact that an employee is not a regular employee does not mean that he can be dismissed any time, even illegally, by his employer. 3. NO - Moral damages are recoverable only where the dismissal of the employee was attended with bad faith or fraud or constituted an act oppressive to labor or was done in a manner contrary to morals, good custom or public policy. Exemplary damages, on the other hand, may be awarded only if the dismissal was effected in a wanton, oppressive or malevolent manner. The evidence on record does not show any fraud, malice or bad faith on the part of private respondents that would justify payment to petitioner of moral and exemplary damages. 15. QUIJANO V MERCURY DRUG 292 SCRA 109 PUNO; July 8, 1998 FACTS - Petitioner DANDY QUIJANO was a warehouseman at the central warehouse of MERCURY DRUG CORPORATION in Libis, Quezon City, since 1983. During his 8-year stay in the company, he received high performance ratings and a corresponding 15% increase in salary per annum. Through the years, the company has also recognized and commanded him for his dedication to his work. He has actively articulated the employees' concerns and, since 1990, has written to the management about the malpractices committed by some officers of the company. He exposed the existence of a "five-six" loan system in their workplace operated by some of its officers. He incurred the ire of the manager, Antonio Altavano, who operated the usurious transactions. - Then followed the harassment of Quijano. In April 1991, Mercury Drug charged him with 4 violations of company policies, all allegedly committed on March 19, 1991. It started at about 11 am when he allegedly left his workplace without permission. He was charged with loafing and abandonment of work. Then, between 11:30 am to 12:30 pm, he allegedly entered the warehouse employees' locker room and angrily uttered in a loud voice: "Niloloko tayo ng kalbong yan.", referring to the warehouse manager, Altavano. He was charged with disrespect to his superiors. Thirty minutes later, at about 1:00 pm, he allegedly grabbed the public address system at the central warehouse without permission and angrily announced: "Wala kay Mrs. Azcona ang incentive natin, na kay Mr.

Concepcion. Niloloko lang tayo (ng superiors natin)." He was charged with disrupting the work of his co-employees. Finally, after an hour and a half, at about 2:30 pm, he allegedly saw Mr. Simon peeping through a rack divider, and shouted: "Anong tinitingin-tingin mo?" He was charged with using abusive language in company premises. - Consequently, in April 1991, 4 notices of corrective/disciplinary action were served on him. These were the very first disciplinary sanctions imposed on petitioner in his 8 years of service and all were allegedly committed on the same day, March 19, 1991. - Quijano gave a different version of the incidents. He alleged that on said date, he had been following-up the payment of incentives due to his co-employees. Altavano, informed him that the incentives were already in the office of Mrs. Vivian Azcona. However, when he inquired from Azcona about their incentives, she referred him to the office of Mr. Concepcion and asked him to inform his co-employees. Petitioner did as he was told. He used the microphone for a few minutes and informed his co-employees about the status of their incentives. His co-employees submitted a joint written statement confirming his allegations. They further declared that his brief use of the microphone did not distract them in the performance of their work. Quijano also denied uttering rude or insulting language in referring to or communicating with his superiors. Again his co-employees submitted statements to corroborate his denial. Finally, he claimed that the charges against him were merely concocted by the warehouse manager and the supervisor in retaliation to his exposure of the latter's usurious loan scheme in the warehouse, thereby taking undue advantage of the plight of his co-employees. Quijano was cleared of the four charges. - However, his employment woes did not end there. He was served another notice of corrective action for serious misconduct for allegedly challenging his superior to a fistfight and uttering death threats to the manager, Altavano, on April 25, 1991, or about 7 months earlier. The next day, a Special Investigating Committee, found him guilty not only of challenging his superior to a fistfight and issuing death threats to the manager, but also guilty of the 4 charges of misbehavior earlier hurled against him. On November 19, 1991, Mercury Drug sent him a notice of termination of employment. The dismissal was to take effect the next day, November 20, 1991. - The labor arbiter ruled that Quijano was illegally dismissed from service for lack of just cause. The NLRC affirmed. However, it modified the labor arbiter's decision by: (1) limiting the award of backwages to three years; (2) deleting the award of moral and exemplary damages; and (3) ordering respondent to pay petitioner separation pay in lieu of reinstatement. Acting on the MFR, the NLRC modified but only as to the period of computation of back wages. It refused to reinstate petitioner in view of the brewing antagonism between him and his supervisor and awarded him separation pay instead. ISSUE WON the NLRC committed grave abuse of discretion when it awarded separation pay in lieu of reinstatement HELD YES Ratio 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. Reasoning - An illegally dismissed employee is entitled to reinstatement as a matter of right. Where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. Unscrupulous employers, however, have taken advantage of the overgrowth of this doctrine of "strained relations" by using it as a cover to get rid of its employees and thus defeat their right to job security. - Mercury Drugs charges of misbehavior against Quijano cannot serve as basis to justify his dismissal, let alone his non-reinstatement. These charges had been found to be baseless and both the labor arbiter and the NLRC agreed that there was no just cause for petitioner's dismissal. It can even be granted in arguendo that a certain antagonism may characterize the relationship of petitioner and the respondents. However, the antagonism was caused substantially if not solely by the misdeeds of respondent's superiors. The arbiter found as a fact that the false charges were filed against Quijano by two of his superiors to punish him for exposing their usurious loan operations. Hence, to deny his reinstatement due to the "strained relations" with his accusers whose charges were found to be false would result in rewarding the accusers and penalizing the victim. This would set a bad precedent for no employer should be allowed to profit from his own misdeed. In addition, it is most inequitable to rule that the antagonism engendered by Quijanos performance of his legal right to expose the usurious lending operations of some warehouse officers will cause him to lose the security of his job. The expose is work related and is intended to protect the economic welfare of employees, and hence its exercise cannot be visited by any punishment especially by the supreme penalty of separation from service. Again, it bears emphasis that the State guarantees a worker security of

tenure which can well be his most precious economic right. Thus, all efforts must be exerted to protect him from unjust deprivation of his job. - The alleged antagonism is a mere conclusion bereft of evidentiary support. Mercury Drug did not raise the defense of strained relationship before the labor arbiter. Consequently, this issue which is factual in nature was not the subject of evidence on the part of both the petitioner and the respondent. There is thus no competent evidence upon which to base the conclusion that the relationship between the petitioner and the respondent has reached the point where it is now best to sever their employment relationship. The NLRC's ruling on the alleged brewing antagonism between the petitioner and the respondent is a mere guesswork and cannot justify the non-reinstatement of petitioner to his job. Disposition Petition is GRANTED. MERCURY DRUG is ordered: (1) to reinstate QUIJANO to his former or substantially equivalent position; (2) to pay back wages from the time of his illegal dismissal until his reinstatement (3) to pay moral and exemplary damages in the amount of P50,000 and P25,000, respectively, and; (4) to pay 10% of the total amount due as attorney's fees.