University of the Philippines COLLEGE OF LAW

LABOR LAW I
TFernandez Notes* 1ST Semester, AY 2008-2009
I. Introduction to Labor Law

1. 2.

LABOR: Concept LABOR LAW:
a. b.

a.In its general sense – physical toil (skilled or unskilled) b.In its technical sense – work force (working or potential workers) Definition 1. Justification: Social Justice – aim and reason or justification of labor law, promotion of public welfare.

3.

Classification a. Labor Standards
– – minimum requirements prescribed by existing laws, rules and regulations relating to wages, hours of work, cost of living, monetary and welfare benefits and occupational, safety and health hazards material or subject to be processed Regulates the institutional relationship between workers organized into a union and employers Defines status, rights and duties that govern interactions of employers and employees Designed to take care of contingencies that may affect the workers Particular kind of protection or benefits for furtherance of social welfare and justice.

b. Labor Relations

c. Welfare Legislation
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Basis a. Economic Basis
inherent inequality between labor and capital Azucena: 7 Principles underlying code i. Labor relations to be responsive and responsible for national development ii. Labor laws to substitute rationality for controntation iii. Labor justice as expeditious without sacrificing due process iv. Manpower development as a major dimension of labor policy v. Global labor market vi. Labor laws for adequate resources and capable machinery to sustain implementation vii. Policy making through tripartism of government, laborer and employer

b. Legal Basis i. 1987 constitution, *1935 Const Art XIV, Section 6, *1973 Const Art II Sec 6, 9  PNB v. Cabansag
Florence Cabansag was hired by the PNB Branch in Singapore and was terminated (even if her good work was commended) allegedly due to cost cutting then because of the need for a Chinese speaking employee. She was not properly notified by her boss and she was not given a chance to be heard. There was no due process. PNB should have 1) apprised her of her particular act or omission 2) inform her of their decision to dismiss her. 282, 283, 284 valid grounds of dismissal. She did not commit any offenses or omissions under 282, the business was not closing (283) and she did not have any diseases (284). She was simple forced to resign and was illegally dismissed. “contract of employment is imbued with public interest and cannot insinuate themselves from impact of labor laws”

i.a. Right to Security of Tenure

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Stern owns Rembrandt Hotel and due to losses, they offered a Special Separation Program which the petitioners did not avail of. Rembrandt, the court held, gave valid notifications and proved their reason for retrenching (283) due to major business losses. Quitclaims were also voluntarily signed by Casimiro and others after receiving their pay and are thus valid and binding on them. There is no illegal dismissal. Retrenchment “termination of employment initiated by employer without fault or prejudice to the employees resorted to by management in times of business recession” “It is not the function of law to compel a business to operate at a continuing loss simply because it has to maintain its workers in employment. Such an act would be tantamount to taking of property without due process of law”

 Casimiro v. Stern Real Estate, Inc

ii. Civil Code  Innodata Philippines, Inc. v. Quejada-Lopez
Quejada and Natividad were employed as formatters for Innodata under a supposed fixed-term employment. They were separated from the company and therefore they files a case for illegal dismissal. The court ruled that the fixed-term employment agreement fixed not only a one year term but also a 3 month probationary period where the employer can pre terminate the employment therefore making it illegal. “blocking the acquisition of tenure by employees deserve to be struck down for being contrary to law, morals, good customs, public order and public policy.”

iii. iv.
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Labor Code and Omnibus Rules Implementing to Labor Code International Conventions, Recommendations

International Labor Organization> tripartism: government representatives, employees, worker’s organization. Philippines is an ILO member Universal Declaration of Human Rights (23, 24, 25, Covenant on Economic, Social and Cultural Rights)

Local Hires of the ISchool claim discrimination in pay as compared to foreign hires (those who are hired from abroad to do expatriate teaching here) who earn 25% more than them and are entitled to benefits such as housing. The court ruled that salaries could not be used to entice foreign hires. (but lodging is okay) “public policy abhors inequality and discrimination. Foreign hires do not perform 25% more efficiently and thus should be paid equal pay for work of equal value.”

 International School Alliance of Educators v. Quisumbing

5. The Labor Code of the Philippines a. Brief History: began in 1968 under Blas Ople to address needs of economic development and justice. b. Name of Decree (Art 1) Labor Code of the Philippines PD 442 c. Date of Effectivity – (2) 6 mos. After promulgation which was on (May 1, 1974) therefore, Nov 1, 1974 d. Declaration of Basic Policy – (3) Full employment, Equal work opportunity, Security of Tenure, etc. e. Construction in Favor of Labor – (4) in favor of safety and decent living of the laborer however, it must be noted that the management also has rights (management prerogatives)  Reyes v. CA
Dr. Pedrito demanded PhilMalay for separation payment similar to its employees as well as for underpayment of salary, a new car, life insurance policy, office rentals and legal service costs he incurred. The LA claimed that the retrenchment of PhilM is valid. NLRC reduced the awards. His appeal was dismissed by CA for failure to attach position paper, decision by Labor Arbiter and Memorandul of Appeal. “Leniency should be applied. If the rules of procedure are applied very rigidly, justice would be defeated. Labor laws mandate speedy disposition of cases without sacrificing fundamental requisites of due process” Constant renewals by AG&P of Salinas etc. contracts as cement workers etc. as project based employees but did not comply with department order which requires them to submit to DOLE the notice and reason of termination upon the end of the project. “It would be prejudicial and would run counter to the constitutional mandate on social justice and protection to labor”

 Salinas Jr. v.NLRC

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f.

Complaint for illegal dismissal by Orbase and 11 other employees against Huntington Steel Products was dismissed due to the lack of a certificate of non-forum shopping required by Circular No. 28-91 with the petitioners commenting that the complaint was a mere scrap of paper. Labor cases must be supported by evidence. Disregarding technical rules of procedure will not sacrifice the fundamental requisites of due process ALSO the complaint form supplied by the LA were just filled up by them and therefore, respondents should not be faulted. CA ruled that “technical rules shall not be applied strictly if the result would be detrimental to the working man” REMEDIED BY A POSITION PAPER.

Technical Rules not binding (221) – Commission and its members and the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively and without regard to technicalities of law as well as due process.  Huntington Steel Products, Inc. v. NLRC

 Industrial Timber Corp v. Ababon (2 petitions are consolidated as one)
Industrial Plywood Group Corporation did not continue to lease the plant to ITC (herein petitioner) which led to ITC to close its operations. ITC posted a final notice of closure of business and asked its workers to collect the benefits due them. Ababon is one of the 387 workers laid off due to the plant’s shutdown and thus he and 96 of his co-workers filed a case of illegal dismissal. LA required (1/2 mo) separation pay, reinstatement etc. ITC filed with the NLRC who reinstated the LA’s decision. Ababon filed with the SC and was referred to the CA which ruled that retrenchment was valid because of proof on non-renewal of license HOWEVER, ITC did not properly notify its employees (1 month before) 50k as damages was awarded. ITC: they were 3 days late in filing the MoR and thus, CA cannot validly overturn NLRC’s decision. “Apply liberality in applying technical rules. Substantial Justice is best served by allowing the petition for relief despite the procedural defect of PETITIONERS of filing the motion for reconsideration 3 days late” INJUSTICE TO EMPLOYER. Art 218 (c), LC: it is within power of commission to… correct, amend, or waive any error, defect or irregularity whether in substance or in form…”

g. Rules and Regulations or Limitation (5)
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Department of Labor and Employment shall promulgate necessary regulations which shall have the force of law and is entitled to great respect + ANY OTHER (TO ADMINISTER, ENFORCE AND IMPLEMENT) EXCEPT if its in the excess of authority

The negotiated daily wage increase of P. 1.33 could be credited to and deducted from the P60/monthly living allowance which in effect, nullified the P 1. 33 increase. The LA ruled according to Sec 1(k) of the Labor department’s rules implementing PD 1123 (made to protect wages against inflation) which exempts those that have granted the 60-peso monthly allowance from paying for anything extra. ALL DOUBTS SHALL BE RESOLVED IN FAVOR OF LABOR. In the Philippine Apparel case, this paragraph was already declared void for contravening the statutory authority granted to the secretary of Labor., “Due to facts as well as the ruling with regard to dismissal for lack to serve a Memorandum of Agreement as being inconsistent with the requirement of social justice to terminate employee of his employment on a mere technicality, the petition is granted” h. Applicability (6) All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or nonagricultural. 276: Government employees. The terms and conditions of employment of all government employees…shall be governed by the Civil Service Law, rules and regulations…However, there shall be no reduction of …benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code. Consti Art IX- B Sec (2) 1 : The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations with original charters.

 Kapisanan ng mga manggagawang Pinagyakap v. NLRC

 PNOC Energy Development Corp v. NLRC
Danilo Mercado was dismissed for alleged acts of dishonesty (negotiating cost then pocketing the money) 1. The decision was made when the 1987 constitution was in effect and not the 1973 constitution therefore it is already the Labor Code and not the Civil Service Decree that it in effect. The test is the manner of its creation, those under the civil service law, CS. Those created under the General

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Corporation Law, are under the Labor Code. ALSO case arose in 1973 but it was promulgated on July 1987, therefore under the 1987 constitution. 2. Also, there was no evidence of the alleged violations, in fact the testimony as well as the explanations provided by Mercado’s affidavit is satisfactory for the Labor Arbiter.

i.

Enforcement and sanctions

217 a Labor Arbiter’s Jurisdiction 128 Visitorial and enforcement power. 129 Recovery of wages, simple money claims and other benefits. 288 Penalties. 289 Who are liable when committed by other than natural person. 290 Offenses. 291 Money claims 292 Institution of Money claims Art III Constitution Sec 11 Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any person by reason of poverty. 16 All persons shall have the right to a speedy disposition of their cases before all judicial, quasijudicial, or administrative bodies.

6.

Work Relationship a. Definition

97 a: person- individual, partner etc B: employer – person acting directly or indirectly in interest of employer 167 c: employee – employed by employer F: employer – employing employee G: employee – compulsorily covered by GSIS H: person - any individual, partnership, firm, association, trust, corporation or legal representative thereof. 212 e: employer – acting in the interest of employer F: employee: in employ of employer even those whose work has ceased given unfair labor practices.

b. Employer Employee relationship 1. Factors/ Tests Four Fold Test of ER-EE relationship i. Selection and engagement of EE ii. Payment of Wages by ER iii. Power of Dismissal is with ER iv. Control Test: is the end achieved controlled by ER?; manner or means it is achieved controlled by ER?  Television and Prod. Exponents Inc. v. RC Servana

Roberto Servana served as a security guard for TAPE and was terminated due to TAPE’s decision to hire a professional security agency. TAPE says that Servana is an independent contractor, a talent and part of the support group. His termination, TAPE said, was due to redundancy. The court ruled that there is, in fact a ER-EE relationship because the “four-fold test and the ID given as well as the bundy cards of Servana serve as proof of the employer employee relationship of TAPE and Servana” (Servana was hired, paid by and controlled by respondents)  (even if program employee, already regularized, more than 1 yr, 281). Nominal damages of 10k. POLICY INSTRUCTION 40. SHOULD BE FILED WITH BROADCAST MEDIA COUNCIL.

 Chavez v. NLRC
Pedro Chavez is a truck driver for Supreme Packaging Inc. since 1984. In 1992, he wanted to be regularized to get the benefits of the regular employees. In 1995, this not being granted, he filed complaint for regularization but he was terminated (due to gross negligence in proper maintenance of truck, wanting to sever ties with the company etc) before the case was heard. ER-EE relationship is present due to the four fold test. (Same work, paid by SPI, dismissed by SPI, his truck is owned by SPI and his truck routes are controlled by SPI.) That he was paid on a per trip basis is not significant. Reinstated to his work with full backwages, 279. However, separation pay instead of reinstatement is more equitable in this case. NOT INDEPENDENT CONTRACTOR BECAUSE NOT ENOUGH CAPITAL

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Jamie Sahot was with SB Trucking (owned by Sy) since 1965. In 1994, Sahot strated to have thigh pains and filed for leave. He was later dismissed for failure to go to work. He found out later that his SSS premiums were not paid by employers. Court found that an ER-EE relationship is present between SBT and Sahot and he was not, infact, an industrial partner (he did not receive any share of the division of profits and he was not shown to be part of any managerial duty; he was in fact content to follow the instructions of petitioners during those years). Dismissal was not valid and it was without notice (he was simply threatened then dismissed). Even if he was offered a job which is less strenuous is of no matter; also, being terminated of a disease under 284 requires a medical certificate by the employer which was not shown in the case. He is entitled to separation pay. 2. Piercing the Corporate veil See through protective shroud to distinguish a corporaion from a seemingly separate one.

 Vicente Sy v. CA

PPCI took over the operations of Hacienda Pamplona but did not absorb all of them. CA ruled that Pamplona illegally dismissed its employees. Pamplona claimed that no relationship was formed between them and that the non-joinder of ‘PAMPLONA PLANTATION LEISURE CORP’ in the complaint warrants a dismissal and that there is no ER-EE between them. The court ruled that there is a relationship (ER-EE) since they were hired, being paid under the corporate control of Jose Luis Bondoc, the managing director of the company (2 separate entities as far as workers are concerned; devious), also, “there should be no need to implead PPLC since petitioner company and Leisure Corporation are one and the same entity” (Corporation has same incorporators and are under one management)

Pamplona Plantation Co., Inc. v. Tinghil

Independent contractor: implementing rules section 8 own account and responsibility and capital free from control of performance but toward same result

c. Independent Contractor and Labor-Only Contractor

Labor only contractor no substantial capital or tools workers recruited perform activities related (necessary and desirable) to the principal business of ER Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. Art. 107. Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art. 108. Posting of bond. An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same. Art. 109. Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.

D.O. No. 10, Rule VIII-A Bk III, 1997 (Rules implementing above)

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D.O. No. 3, S. May 2001 (Revoked above D.O.) Labor only Contracting prohibited, nonimpairment of existing contracts D.O. No. 14, September 18, 2001, Section 8: Re employment of security guards and similar personnel. Security service contractor as the employer of the security guards. Not company assigned to them etc…  Phil. Bank of Communications v. NLRC

PBC and CESI (Corporate Executive Search Inc) entered into an agreement for the hiring of 11 mesengers. Orpiada and the others were relieved of their jobs because of the eventual termination of PBC and CESI’s agreement. The court ruled that although Orpiada was assigned to and not chosen by bank the fact remains that PBC agreed. Also, control as to what they are to do etc. is with bank. The payment and the power to dismiss was with CESI. Having completed more than 1 yr (16 mos) of service Orpiada is considered to be a regular employee (Art 281, LC). CESI is not a parcel delivery company it is a recruitment corporation who, in this case, made a letter agreement with PBC for only the temporary services of the msgrs. Temporary service leads to the presumption to labor-only contracting. CESI is then rendered as a mere agent. PBC to pay Orpiada because he is liable as though it directly employed him but can sue CESI of reimbursement

Alexander Vinoya worked in Regent Food as a sales rep. booking sales in groceries, getting payment etc. He was required to post a monthly bond of 200 to ensure compliance with his duties. He was then moved to PMCI then reassigned to RFC and was soon terminated because of the expiration of the contract of service between RFC and PMCI. Court said that PMCI is engaged in labor-only contracting not having substantial capital and investment and did not carry on an independent business OR own manner of undertaking of its contract. The Court cited Neri v. NLRC saying that in the case, BCC was found to be an independent contractor because (4 fold test) control of employees is with BCC, employer is concerned only with end result BCC had the power to reassign the employees, deployment of which is not subject to the approval of the employer. BCC is paid with lump sum In Vinoya’s case  PMCI did not have substantial capital or investment in form of tools. Authorized capital stock of 1M but only 75k paid in capital nor did they carry on an independent business nor did it undertake the performance of its contract according to its own manner or method. PMCI was not engaged to perform a specific and special job or service thus, satisfying the application of the 4 fold test. Issuance if ID is also proof of Vinoya’s employment with RFC prior to his reassignment to PMCI and ALSO there was no sufficient notice. Reinstatement and Backwages.

Alexander Vinoya v. NLRC

Synergy undertook loading and unloading of baggage for PAL. PAL soon cut ties with Synergy and thus, E. Ligan etc. were dismissed. Applying the 4 fold test, it is shown that respondent performed desirable and necessary duties related to the main business of PAL and that the equipment used was owned by PAL. Also, Synergy mentioned but did not show that it had substantial capital and as to how much that capital is. Also according to D.O. 18-02, labor-only contracting is present when one of these elements are present: 1. The contractor does not have substantial capital 2. Contractor does not exercise the right to control the performance of the work of the employee. Synergy was not shown to have substantial capital and it was PAL who had control over the schedule and the tasks of the employees (dependent on the frequency of plane arrivals) Also, respondent’s and PAL’s employees were doing the same kind of work therefore, there is labor only contracting. Synergy, being categorized as a mere agent and respondents having acquired security of tenure are therefore entitled to reinstatement or separation pay, wage differential and backwages from PAL.  Mandaue Galleon Trade Inc. v. V. Andales Vicente Andales is one of the 260 workers laid off due to the termination of their contracts by MGTI. MGTI claims that due to the dwindling demand for rattan products, they retrenched some of their employees and the 260 envied the substantial separation pay of the regular employees. The court held that the 260 “independent contractors” did not have substantial capital and tools and that their work is directly related to MGTI’s business. This proves a labor only contraction and thus, equivalent to declaring that there is an ER-EE relationship between the principal and the employees of the supposed contractor. They are entitled to separation pay of ½ month for every year of service. EXECPTIONS to the rule

PAL v. E. Ligan, et al.

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Sec.  Eparwa Security and Janitorial Services Inc.. Statement of objectives.When the findings are grounded entirely on speculation . It is the policy of the State: a. nevertheless.Facts set forth not disputed by respondent . Labor Standards Law Employment Policies. to hold principal liable will be absurd and unfair. and 7 . Sec 11. becomes SOLIDARILY liable with the contractor. 13 th month etc. Recruitment and Placement of Workers. Liability of Indirect Employer Sec 7 D.O.O. 9.Findings of fact are conflicting . If contractor does not pay overtime/ busts union.(in making its findings) CA went beyond issue . HDMF. allocation and utilization. the payment needed by Eparwa cannot be amended anymore). Illegal dismissal cases were filed and the LA and NLRC upheld Laguesma saying that there was illegal dismissal but that they are not employees of SSI.5** Art. Constitution.Where there is grave abuse of discretion . No 18-02 (109) indirect employers are solidarily liable with principal. Local Employment. 18-03 (11-12: registration requirements. Of article 106 set the general rule that a principal is permitted by law to engage the services of a contractor for the performance of a particular job. GSIS.) against both entities. holiday. Overseas Employment. b. *The first 2 par. Based on Eagle Security Agency Case Agencies Reference – Arts 12-39. e. 1. II. overtime.When the inference made is manifestly mistaken . It is Eparwa that may claim reimbursement from LDCU in lieu of allowing an adjustment of the contract (since their contract expired. RA 8042 Sec 2. To promote and maintain a state of full employment through improved manpower training.LDCU cannot ask for reimbursement. LDCU made a claim for reimbursement from Eparwa and was not approved by NLRC.CA overlooked relevant facts disputed by parties. EVIDENCE OF LABOR ONLY CONTRACTION. Security guards filed a claim for underpayment of wages (leave. Undersecretary Laguesma reversed saying that there is a valid subcontracting agreement between the parties.Findings are contrary to the trial court . Finding an EE-EE to exist. but the principal. submission of annual report (SSS. 12. Liceo de Cagayan University Eparwa and LDCU entered into a contract for services of 11 security guards. To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment.Conclusions without citation .4. NLRC held that although both were solidarily liable (Art 109): Eparwa as employer and LDCU as agent. 18-02. d. the Med Arbiter granted the petition. Registration of Contractors D. Sandoval Shipyards v. Employment Policies: 12 a-f. On the basis that: A) The “so-called” subcontractors do not even have a license to engage in subcontracting (presumption of LO) B) Salaries are paid by SSI C) They were hired by SSI and placed under their respective subcontractors D) Tools used are owned by SSI.Judgment is made from misapprehension of facts . Both companies appealed. CA reversed the decision and said that SSI is their direct employer. Pepito et al. 3rd par: failure to register gives rise to presumption of laboronly contracting  The Natl Fed of Labor NFL filed a petition for certification election with DOLE alleging that its members are already regular employees of SSI and were dismissed due tot heir participation in the strike.Findings premised on absence of evidence . PhilHealth) Effect of non compliance D. v. POEA Rules a.. Art II.O.

To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers. Migrant Workers and Overseas Filipino Act of 1995 declares that the state does not promote overseas employment as a means to sustain economic growth. and an improved quality of life for all. RA 8042. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes. Recognizing the contribution of overseas migrant women workers and their particular vulnerabilities. (d) The State affirms the fundamental equality before the law of women and men and the significant role of women in nation-building. organized and unorganized. organized and unorganized. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. Section 3. To facilitate a free choice of available employment by persons seeking work in conformity with the national interest. economic and legal services to Filipino migrant workers.c. f. and peaceful concerted activities. local and overseas. including the establishment of a registration and/or work permit system. local and overseas. including the right to strike in accordance with law. the State shall provide adequate and timely social. recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments. uphold the dignity of its citizens whether in country or overseas. To regulate the employment of aliens. It requires a certain guarantee of protection for the overseas worker. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services. SEC. and a living wage. at any time. It shall guarantee the rights of all workers to self-organization. including conciliation. in particular. and promote full employment and equality of employment opportunities for all. to serve national development objectives. collective bargaining and negotiations. Section 9. and promote full employment and equality of employment opportunities for all. (c) While recognizing the significant contribution of Filipino migrant workers to the national economy through their foreign exchange remittances. and to expansion and growth. To facilitate and regulate the movement of workers in conformity with the national interest. They shall be entitled to security of tenure. The State shall afford full protection to labor. g. d. instead THE STATE SHALL CONTINUOUSLY CREATE LOCAL EMPLOYMENT OPPORTUNITIES AND PROMOTE THE EQUITABLE DISTRIBUTION OF WEALTH AND THE BENEFITS OF DEVELOPMENT. national interest and the right to self-determination paramount in its relations with other states. shall continuously create local employment opportunities and promote the equitable distribution of wealth and the benefits of development. 2. (b) The State shall afford full protection to labor. and Filipino migrant workers. To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad. in general. a rising standard of living. Towards this end. be compromised or violated. The State. The State shall regulate the relations between workers and employers. DECLARATION OF POLICIES-(a) In the pursuit of an independent foreign policy and while considering national sovereignty. at all times. locally and overseas. the State shall. The existence of the overseas employment program rests solely on the assurance that the dignity and fundamental human rights and freedoms of the Filipino citizens shall not. therefore. territorial integrity. and shall enforce their mutual compliance therewith to foster industrial peace. humane conditions of work. e. the State does not promote overseas employment as a means to sustain economic growth and achieve national development . promote full employment. the State shall apply gender sensitive criteria in the 8 .

duly recognized as legitimate. and 9 . DEPLOYMENT SEC. (I) Government fees and other administrative costs of recruitment. (h) Non-governmental organizations. in particular. (b) It is a signatory to multilateral conventions. documented or undocumented. placement and assistance to migrant workers shall be rendered free without prejudice to the provision of Section 36 hereof. (g) The State recognizes that the ultimate protection to all migrant workers is the possession of skills.formulation and implementation of policies and programs affecting migrant workers and the composition of bodies tasked for the welfare of migrant workers. (c) "Overseas Filipinos" refers to dependents of migrant workers and other Filipino nationals abroad who are in distress as mentioned in Sections 24 and 26 of this Act. I. in general. declaration or resolutions relating to the protection of migrant workers. are partners of the State in the protection of Filipino migrant workers and in the promotion of their welfare. Pursuant to this and as soon as practicable.The State shall deploy overseas Filipino workers only in countries where the rights of Filipino migrant workers are protected . . the government shall deploy and/or allow the deployment only to skilled Filipino workers. Deployment of Migrant Workers . and Filipino migrant workers. The government recognizes any of the following as guarantee on the part of the receiving country for the protection and the rights of overseas Filipino workers: (a) It has existing labor and social laws protecting the rights of migrant workers. SEC. introduction. the deployment of Filipino overseas workers. it is imperative that an effective mechanism be instituted to ensure that the rights and interest of distressed overseas Filipinos. 3. the State shall cooperate with them in a spirit of trust and mutual respect. DEFINITIONS. (e) Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to any persons by reason of poverty. (c) It has concluded a bilateral agreement or arrangement with the government protecting the rights of overseas Filipino workers. (f) The right of Filipino migrant workers and all overseas Filipinos to participate in the democratic decision-making processes of the State and to be represented in institutions relevant to overseas employment is recognized and guaranteed. is engaged or has been engaged in a renumerated activity in a state of which he or she is not a legal resident to be used interchangeably with overseas Filipino worker. 4. Appropriate incentives may be extended to them. (b) "Gender-sensitivity" shall mean cognizance of the inequalities and inequities prevalent in society between women and men and a commitment to address issues with concern for the respective interests of the sexes. Nonetheless. In this regard.For purposes of this Act: (a) "Migrant worker" refers to a person who is to be engaged. whether land-based or sea-based by local service contractors and manning agencies employing them shall be encouraged. are adequately protected and safeguarded.

Employment promotion. the government.Agencies and Entities 1. Private employment agency Art. concrete measures to protect the rights of migrant workers. It is the policy of the State: i. iii. Definitions. "Private recruitment entity" means any person or association engaged in the recruitment and placement of workers. Art. Sec 3 (a) <the countries they are deployed to has existing labor and social laws protecting the rights of the migrant workers. 13. enlisting. whether employed or unemployed. terminate or impose a ban on the deployment of migrant workers . accomplices and accessories. whether for profit or not: Provided. may. That any person or entity which. Illegal recruitment is deemed committed by a syndicate carried out by a group of three (3) or more persons conspiring or confederating with one another. RA 8042.) Parties i. management or direction of their business shall be liable. The Secretary of Labor shall have the power and authority: a. Employment Agencies b.) Art. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. 13. d. contracting. transporting. locally or abroad.) Art. any fee from the workers or employers. To organize and establish new employment offices in addition to the existing employment offices under the Department of Labor as the need arises. the officers having control. without charging . 12. "Recruitment and placement" refers to any act of canvassing. Definitions. ***WON for profit. "Private fee-charging employment agency" means any person or entity engaged in recruitment and placement of workers for a fee which is charged.(d) It is taking positive. promising or advertising for employment. Art. locally and overseas. Statement of objectives. Statement of objectives. Allowed and Protected Entitites Allowed private agencies and entities 10 . contract services. e. b. Definitions. Overseas employment – Sec 6. IF ANY PERSON OFFERS OF PROMISES A FEE EMPLOYMENT TO 2 OR MORE PERSONS SHALL BE DEEMED ENGAGED IN RECRUITMENT AND PLACEMENT.Notwithstanding the provisions of Section 4 hereof. locally or overseas. In case of juridical persons. i. to serve national development objectives. offers or promises for a fee. and includes referrals. "Authority" means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. 14. RA 8042 3. Private recruitment entity Art. 13. from the workers or employers or both. 2. Private Sector. hiring or procuring workers. directly or indirectly. ii. 5. c.1. utilizing. f. in pursuit of the national interest or when public welfare so requires. at any time. It is the policy of the State: f. SEC. Recruitment and Placement Local Employment ii. The persons criminally liable for the above offenses are the principals. TERMINATION OR BAN ON DEPLOYMENT . in any manner. To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers. employment to two or more persons shall be deemed engaged in recruitment and placement. directly or indirectly. "License" means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. b. 12. Worker 13 a: Worker means any member of the labor force.

Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers.f. POEA rules II. 2nd sentence (See below) ii. Travel Agencies – Art. There. Art.1. ii. the private employment sector shall participate in the recruitment and placement of workers. Persons or partners. Prohibited business agencies and entities. Except as provided in Chapter II of this Title. b. Officers or members of the Board of any corporation engaged in the business of a travel agency. partnerships or corporations which have derogatory records. to serve national development objectives. 25. Victor Lim. d. Travel agencies and sales agencies of airline companies.Art. rules and regulations as may be issued by the Secretary of Labor. officers and Directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws. Private sector participation in the recruitment and placement of workers. locally and overseas. ii. Direct Hiring .2. Ban on direct-hiring. The issue is Won JEAC is responsible for petitioner’s recruitment and deployment to Singapore. Also the PNB checks and the letter agreements issued by JEAC to Hornales and Lim respectively show a quantum of Hornales v. No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Art. engaged in the business of a travel agency. PD 442) f. such as but not limited to the following: 1) Those certified to have derogatory record 2) Those with prima facie finding of guilt for illegal recruitment or other related cases exists. Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a Comprehensive employment program. he was assigned as a fisherman. NLRC 11 . international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision. Sec 2 Section 2. under such guidelines. Art. c. shall engage in the recruitment and placement of workers. when any of its officers is also an officer of a corp. and 22 hours/day work for no pay. no person or entity other than the public employment offices. Hornales was subjected to maltreatment. locally and overseas. He managed to return to the Philippines and demanded for the rightful payment of his wages. NLRC’s conclusions (overturning POEA’s findings) that JEAC was a mere travel agency and Hornales is a tourist is unfounded since even respondents claim they are a licensed recruitment agency. 26. Persons. 3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude 4) Those agencies whose licenses have been previously revoked or cancelled (violation of RA 8042. JEAC sent Hornales to Singapore to work and upon meeting Mr. The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas: a. Travel agencies prohibited to recruit. Exceptions: 18. Corporations. Private recruitment. Direct-hiring by members of the diplomatic corps. 26. 18. Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. Travel agencies prohibited to recruit. lack of food and water. Disqualification. JEAC simply asked him of his passport and gave him 500 pesos. 16.  Mario Hornales filed a complaint for nonpayment of wages and recovery of damages against JEAC (run by Cayanan).

POEA Rules Part II. Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of Filipino workers: a. appointment or designation of any agent/representative 3. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy 100 workers to its new principal.000. Rule II. Sec 1 (b) b. Who may use? Only the person in whose favor it was issued. Validity of the License. Registration fees – 30 12 . POEA Rules Part II.000. Licensing: Citizenship – 27: for permit to participate in recruitment and placement of 4. Prohibition? Transfer/conveyance to other person or entity. Art. 6 Section 5. No license shall be transferred. A minimum capitalization of Two Million Pesos (P2. every license shall be valid for four (4) years from the date of issuance unless sooner cancelled. to Two Million Pesos (P2. Capitalization – 28: substantial capitalization as determined by the secretary of labor. Approval of DOLE required in: 1.000. Rule II. Sec 5. POEA Rules Part II. Rule I. Requirements Qualifications. as the case may be.000. Filipino Citizens ii. Rule I. d. partnership or corporation. Sec 7 Non-Transferability of License. these rules and other pertinent issuances. Required for all applicants for authority to hire or renewal of license to recruit. a.evidence that proves JEAC’s connivance with the foreign employer (Step Up). Such license shall be valid only at the place/s stated therein and when used by the licensed person. Provisional License. Non-complying agencies will be notified of the expiration of their license.000. Provided that those with existing licenses shall. 30. b. increase their capitalization or paid up capital. The license of a complying agency shall be upgraded to a full license entitling them to another three years of operation. establishment of additional offices. Duration POEA Rules Part II. JEAC and its surety are jointly and severally liable to Hornales.000. conveyed or assigned to any person. private employment agency shall assume joint and solidary liability with the implementation of a contract) POEA decision reinstated (but minus 16. partnership or corporation. Except in case of a provisional license. Sec 1 (a) Section 1.000 paid by JEAC for Hornales’ travel) i. Where it may be used? Only at place stated in the license or authority. partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of which is owned and controlled by Filipino citizens. c.00) in case of a corporation.00) at the rate of Two Hundred Fifty Thousand Pesos (P250. It shall not be used directly or indirectly by any person. revoked or suspended for violation of applicable Philippine law.000. partnership or corporation other than the one in whose favor it was issued. (under Rule 5 Book 1 Sec 2 e or the IRR: requires a private employment agency to assume all responsibilities for the implementation of the contract of employment of an overseas worker.00) in case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos (P2. Section 6. under book 2 Rule 2 Section 3 of the POEA rules and regulations.00) every year. Filipino citizens.) Government Techniques of Regulation – Private Recruitment workers (local and overseas) i. The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority. transfer of business address 2. Registration fees. Non-transferability – 29: n-t of license or authority. within four years from effectivity hereof. Corp or partnerships at least 75% of the authorized and voting capital stock of which is owned and controlled by Filipino Citizens.

NBI/Police/Barangay Clearance c. POEA Rules Part II. The Department of Labor and Employment or any law enforcement officer may initiate complaints under this Article. Bonds. 14. The Secretary of Labor shall have the power and authority: ***d. including job vacancies. separation from jobs. a. wages. It shall be unlawful for any individual. Rule V. separation from jobs. Art. 34. Such fees shall be collected from a hired worker only after he has obtained employment through the facilities of the recruitment agency. when required by host country h. and terms and conditions of employment as may be appropriate. Medicare f. Workers’ Fees (Placement Fees) – 32 Art. Birth Certificate e. Whenever the public interest requires. Art. do not allow the charging or collection of placement and recruitment fee. Authentication d. 14 d. Rule II. The above-mentioned placement and documentation costs are the only authorized payments that may be collected from a hired worker. if necessary g. ii. Fees to be paid by workers. Illegal recruitment. shall be deemed illegal and punishable under Article 39 of this Code. Reports/ Employment Information – 33. Documentation costs to be paid by the worker shall include. other terms and conditions and other employment data. Passport b. Bonds – 31 Art. rules and regulations. but not limited to. remittance of foreign exchange earnings. Employment promotion. Art. policy or practice. Reports on employment status. organization or institution to submit such employment information as may be prescribed by the Secretary of Labor. Except where the prevailing system in the country where the worker is to be deployed. expenses for the following: a. To require any person. 33. 32. licensee. entity. or holder of authority: h. 38 a b 13 . 34. Such fee shall be always covered with the appropriate receipt clearly showing the amount paid. RA 8042 Sec 6h Art. the worker shall pay only the actual cost of the document which shall be covered by official receipts. iv. Illegal Recruitment – RA 8042 Sec 6-12. Medical Examination fees In the event that the recruitment agency agrees to perform documentation services. Prohibited practices. Sec 4: Payment of Fees and Posting of Bonds. either by law. Any recruitment activities. Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Sec 3 Section 3. details of job requisitions. 38. the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment. Inoculation. The Secretary of Labor shall promulgate a schedule of allowable fees. 34 h. shall be imposed on and be paid by the worker without prior approval of the POEA. including the prohibited practices enumerated under Article 34 of this Code. exclusive of documentation costs. establishment. placement vacancies. 31. All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures. iii. Fees/Costs Chargeable to the Workers. departures and such other matters or information as may be required by the Secretary of Labor. To fail to file reports on the status of employment. e. a landbased agency may charge and collect from its hired workers a placement fee in an amount equivalent to one month salary. manner or purpose.POEA Rules Part II. to be undertaken by non-licensees or non-holders of authority. No other charges in whatever form. Trade Test.

Pp v. The certifications were signed after the notice that he was being sued was issued because he did not present them in his counter affidavit. he avoided them. properties and other implements used in illegal recruitment activities and the closure of companies. Pp v. She had no valid license to recruit 2. They were never able to fly out of the country and upon asking the money from the petitioner. without having been licensed or authorized to do so. paraphernalia. they were left with an assurance and they were brought to Lastra who was in Manila City Jail. COURT: Petition has no merit. He even insisted to meet a few of the complainants family and showed to them the Xerox of the passport as well as the ticket. by saying that his sister is the head nurse in a nursing home in California and that he has connections in the US embassy being an FBI agent. (graduate of UE dapat mas matalino).  Rosa Rodolfo approached the complainants and invited them to apply for overseas employment in Dubai claiming that she knew Florante Hinahon. The appellant never issued receipts. As for her husband. non-holders b.b. It is sufficient that the accused promises or offers for a fee employment to warrant conviction for illegal recruitment. a. REPEALED c. he showed certifications signed by complainants stating that Jamilosa is not an illegal Recruiter. establishments and entities found to be engaged in the recruitment of workers for overseas employment. enterprise or scheme defined under the first paragraph hereof. Jamilosa claims that Bamba is an aggrieved lover who is imputing the case against him because of their separation. Also. they can be charged with estafa and illegal recruitment given that estafa is malum in se and IL is malum prohibitum. The Secretary shall order the search of the office or premises and seizure of documents. The court said that since 1. Their flights were being constantly rescheduled and as a result of this they asked for their money back. one of the agents of Mrs. She collected the processing fees. in malls etc. The court further said that she could have advised them to pay directly to the agency. Rodolfo undertook activity wherein she passed along or forwarded an applicant for employment and the court said that it is sufficient that the accused promises or offers for a fee employment. Appeal is dismissed. The complainants gave him the money (and on a few instances jewelry and 2 bottles of black label) for processing of their application. The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. he claimed that the prosecution failed in proving his participation.The court said that they cannot feign ignorance of the matters that were happening as it was Aida herself who informed the complainants of the existence of the job orders. Prohibited Practices Rodolfo v. Aida said she never professed she has the authority to recruit and was merely trying to help the complainants process their papers. A case of illegal recruitment was filed against Rodolfo who claimed that she was the one approached by complainants and that she gave the money directly to Hinahon. one of the complainants filed an illegal recruitment case against him. After their flights not pushing through. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. Also. Indira Lastra. the owner of the agency. A case of illegal recruitment was filed against them. Comila 14 . under the guise of an FBI agent of the US on a mission “recruited” a number of people whom he met on the bus. they ask for a refund which was not given but rather. Appeal of Comilas is dismissed. There must be at least a promise or offer of employment from the person posing as a recruiter whether locally or abroad. Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction. Comila introduced the complainants to Erlinda Ramos. Jamilosa  Aida and Comila was looking for workers for a factory in Intaly. Aside from the 1k given to Ferre (one of the complainants) no reimbursement was given. When Undertaken by non-licensees. People of the Philippines  Jamilosa. CA affirmed. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof. Bamba.

Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor. Requirements for Licensing. 2. Regulatory power. pursuant to Art 38. LC. Visitorial Power. MISCELLANEOUS PROVISIONS Art. having no substantial capital as well as the fact that the workers recruited are performing activities directly related to the principal business of Dole. CA reversed LA and NLRC holding that the order by DOLE should be given weight in the exercise of its visitorial and enforcement power (Art 128 a and b). The court further said that the secretary of labor. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. The president issuing an arrest of aliens for deportation is the only exception. Under the constitution. Regulatory power – 35. and act on violation of any provisions of this Title. DOLE Regional Task force found CAMPCO and Dole Phil engaged in Labor Only contracting. Upon evaluation. Every applicant for license to operate a private employment agency shall submit a written application together with the following requirements: A verified undertaking stating that the applicant: 1. ) Salazar v. and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce. 35. and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable. Dole Philippines appealed raising that the DOLE Regional Director committed error in Law in directing cooperatives to cease and desist from Labor Only Contracting saying that this had been their practice ever since. these can only be exercised by the courts. 36. Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of the license. The sole issue of the case is WON issuing of a warrant of arrest against her by the POEA/ Secretary of Labor as well as the seizing of her dance studio. and particularly describing the place to be searched and the persons or things to be seized. (declared Art 38 © unconstitutional because of Art III. CA affirmed. 37. papers. Dole Phil continued its operations. Achacoso 183 SCRA 145 Art. b. Ruling: Art 128 Secretary of Labor can issue compliance orders to give effect to Labor standards. General Orders and Letters of Instructions. books of accounts and records of any person or entity covered by this Title. Section 2. v. POEA Part II. Art. The right of the people to be secure in their persons. require it to submit reports regularly on prescribed forms. 15 . at any time. Enforcement Powers a. Due to the refusal of Salazar to return the PECC card of complainant Rosalie Tesoro. Despite the order being final and executory. 38 c of labor code is UNCONSTITUTITONAL. Rule-making power -36 c. not being a judge cannot issue search and arrest warrants. The court held that 38 c is a product of several decrees which were the dying vestiges of an authoritarian rule. the Overseas Employment Development Board. The Secretary of Labor or his duly authorized representatives may. The regional director of DOLE made procedural steps such as sending a task force to investigate before issuing his order to cease and desist based on his findings that CAMPCO is guilty of Labor Only Contracting. Tesoro filed an illegal recruitment case against her. v. Rule II Joint and Several Liability of Employment agent and principal Section 1. Dole Phil is found guilty. is valid. The POEA ordered a closure and seizure order and soon went to her dance studio and confiscated certain costumes. inspect the premises. 36 Dole Phil hired members of CAMPCO (Cannery Multi Purpose Coop) depending on their sole needs. Esteva vi. Shall select only medically and technically qualified recruits. houses. Hortencia Salazar sent a letter to POEA demanding the return of her seized items and also filed a suit for prohibition. or for violation of the provisions of this and other applicable laws. Visitorial Power – 37  DOLE Phil Inc. On appeal LA and NLRC found CAMPCO is not engaged in Labor Only Contracting.

the corporate officers and directors and partners as the case may be. The performance bond to be filed by the recruitment/placement agency. the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual. 10. v. SEC. Shall provide orientation on recruitment procedures. Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of the recruited workers. OSM alleged that the ship owner changed its plans on the use of the vessel (Princess Hoa) and instead chartered it to PCSLC. death and disability compensation and repatriations. shall be answerable for all money claims or damages that may be awarded to the workers. however. including but not limited to payment of wages. For the purpose of compliance with item (1). RA 8042 Sec 10 2nd par. Since OSM and PCSLC’s contract was terminated. from the inception of the case at the LA’s office. Service of pleadings is futile. His contract with Flourish is for 2 years. Also.A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial Court of the province or city where the offense was committed or where the offended party actually resides at the same time of the commission of the offense: Provided. (See below)  OSM Shipping Phil Inc. The fact that petitioner and its principal have already terminated their agency agreement does not retrieve the formenr of its liability. . 9. and 10. employees and representatives done in connection with recruitment and placement. a seaman was often not there. Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract. SEC. Shall deploy at least 100 workers to its new markets within one (1) year from the issuance of its license. shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. VENUE. I. PCSLC became employer of the crew. Shall negotiate for the best terms and conditions of employment. 8. exemplary and other forms of damages. as provided by law. Shall disclose the full terms and conditions of employment to the applicant workers. In RA 8042 Sec 10. The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. RA 8042. Guerrero. Salaries for the unexpired portion of the employment contract Flourish Maritime Shipping v. the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide. Responsibilities of such parties towards the contracted employees under the agreement do not end but rather extends until the expiration of the employment contract. That the aforestated provisions shall also apply to those criminal actions that have already been filed in court at the time of the effectivity of this Act.) Jurisdiction RTC over criminal action arising from illegal recruitment RA 8042. Provided. it says that there are 2 money claims available for illegal dismissal. Issues: Sec 3 Rule 46 of RoC requires a certified true copy of LA’s decision but court said that it is not necessary to send pleadings as long as Guerrero is represented by counsel. 5. 6.3. . 9. the agency may require the worker to undergo trade testing and medical examination only after the worker has been pre-qualified for employment. Shall repatriate the deployed workers and his personal belongings when the need arises. 7. within ninety (90) calendar days after filing of the complaint. This provisions shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval.Notwithstanding any provision of law to the contrary. 1. II. 5. no compensation was paid to him. If the recruitment/placement agency is a juridical being. 4. Shall assume full and complete responsibility for all acts of its officials. LA over money claims  Almazor worked in a Taiwan vessel as a fisherman for Flourish or FSM for only 26 days and he was subjected to working with almost no sleep and was not provided with food. NLRC Fermin Gurrero filed a case against OSM Shipping since despite the services he rendered to OSM. MONEY CLAIMS. terms and conditions and other relevant information to its workers and provide facilities therefor. moral. That the court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts. Donato Almazor 16 .

and adopt measures that help make them competitive Art. 40. involving employers. involving or arising out of violations of rules and regulations relating to licensing and registration of recruitment and employment agencies or entities. Disciplinary Cases Omnibus rules implementing RA 8042 Sec 28 b 2. POEA over administrative cases a. 42. said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise.1 Exemption – Rule I. Alien Employment Regulation Omnibus Rules. The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent. The State shall promote the preferential use of Filipino labor. and b. D. For an enterprise registered in preferred areas of investments. which are administrative in character. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. Jurisdiction of the POEA. Employment permit of non-resident aliens. Rule XIV D. b. 3 months salary for every year of the unexpired term. he was only made to work for 26 days. Employment permit of non-resident aliens. Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles 289 and 290 of the Labor Code.O. He was given option 2 by the LA because even if his contract is for 2 years. principals. In addition. The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent. Statement of objectives. the alien worker shall be subject to deportation after service of his sentence. disciplinary action cases and other special cases. Any employer employing non-resident foreign nationals on the effective date of this Code shall submit a list of such nationals to the Secretary of Labor within thirty (30) days after such date indicating their names. all cases. III. Prohibition against transfer of employment. Art XII: Section 12. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor. Nos 19-02. the alien shall not transfer to another job or change his employer without prior approval of the Secretary of Labor. a.O. able and willing at the time of application to perform the services for which the alien is desired. nature of employment and status of stay in the country. It is the policy of the State: e. 12 Omnibus Guidelines for Issuance of Employment Permits to Foreign Nationals (see reviwer) Book III Rule I. Submission of list.2 Const. Art. foreign and local addresses. Art. Whichever is less. 41. able and willing at the time of application to perform the services for which the alien is desired.The POEA shall exercise original and exclusive jurisdiction to hear and decide: a.2. EMPLOYMENT OF NON-RESIDENT ALIENS Art. which are administrative in character. domestic materials and locally produced goods. 40. . Art. Book I. No. The Secretary of Labor shall then determine if they are entitled to an employment permit. Pre-employment Cases Omnibus rules implementing RA 8042 Sec 28 a Section 28. contracting partners and Filipino migrant workers. including the establishment of a registration and/or work permit system. 12. To regulate the employment of aliens. citizenship. b. 26-02 a. After the issuance of an employment permit. Coverage – 40 17 ..

The court found that prior to his termination.12 Omnibus R. his allegations that Ang Tan Chai. Training and Employment of Special Workers – Apprentices and Learners 1. malice and irregularity on the part of Raytheon. it can be proven that Schonfeld is indeed an employee of PPI. He claims that there is bad faith.) Definition – Article 44 (a) Art.) General Policy – RA 7796. Schonfeld’s Alien Employment Permit obtained in the Philippines was obtained by PPI stating that Schofeld is its employee. Petition Dismissed. As used in this Title: a. Respondent company PCIJ say that it should have been filed in London or Japan where PCIJ is based and not in the Philippines since its courts did not have jurisdiction. 44. RA 7796 Sec 4 b c e 2. a Canadian was hired by PCIJ thru PPI as its VP of water and sanitation. LC he does not need a working permit. Manpower request <position and salary of workers>. Book I Part III.) Accreditation of foreign principals. 2. said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise. false documentation. Schonfeld c. Business License. Almodiel v.) Validity of Accreditation will be valid up to 4 years unless revoked by POEA (grounds: expiration of business license. Visa assurance) 3. 2. using the 4 fold test. 1 2 3 (See page 613 of Azucena if Ma’am asks) 1.  Farle Almodiel claims that he was illegally dismissed by Raytheon Philippines after the company terminated his services on the basis of redundancy.For an enterprise registered in preferred areas of investments. Validity of AEP (Alien Employment Regulation) DO. LA granted his petition for reinstatement but the NLRC only allowed him his separation pay. To help meet the demand of the economy for trained manpower. To establish apprenticeship standards for the protection of apprentices. Ang Tan Chai was found to be a resident alien and therefore according to Article 40. Statement of objectives. Pacific Consultants Int’l Asia Inc. he was notified by the company and was given separation pay which he did not accept. workers and government and non-government agencies.) Specific Goals and Objectives – RA 7796. ruling that PCIJ is its employer and PPI is only a mere subsidiary. written mutual agreement. 57. an alien with no working permit absorbed his position is untenable given the fact that it is immaterial whether his job was absorbed rendering him jobless because it is the management’s prerogative. Development of Human Resources Art 57-81 Technical Education and Skills Development of Filipino Middle-level Manpower a. To establish a national apprenticeship program through the participation of employers. Sec 3 b. Grounds Rule III.1 3.) Policy Objectives – 57 Art. LA and NLRC dismissed his complaint for illegal recruitment on the basis of the employment contract he signed stating that all disputes between employer and employee should be filed in London. This Title aims: 1. Manpower Development 1. "Manpower" shall mean that portion of the nation’s population which has actual or potential capability to contribute directly to the production of goods and services. final judgment)  Klaus Schonfeld. Employment Contract. SC denied petition and upheld CA decision. Also. CA found that Schonfeld is an employee of PPI and not PCIJ. Sec 2 3. Also.) Documentary Requirements for Accreditation to be submitted to the POEA for evaluation. Rule II. (SPoA. Conditions for Grant of Permit Omnibus rules.) Definition : RA 7796 Sec 4 j k l m n 18 . Also. and 3. CA declared that the claim of the respondents of multiple venues of filing actually shows that the venue is not limited to just one place. Furthermore. Revocation/Cancellation. He was dismissed and was not given the money claims he was promised such as the cost of shipment of goods and unpaid salary. Definitions. employers and projects with no POLO (Philippine Overseas Labor Office) shall undergo accreditation under POEA 2. NLRC b. v. Rule II 7 d.

An employee who is allowed to work after a probationary period shall be considered a regular employee. 60. (As amended by Section 1. – RA 7796 Sec 4 n 3. Apprentices without compensation. Employment of apprentices. The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination.Apprentice: Art. Learners defined. As used in this Title: a. Probationary employment shall not exceed six (6) months from the date the employee started working.) Enforcement – 65. 66. 281. The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative. 1986) Art. 111. b. (As amended by Section 1. Art. 72. 74. 76. An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this Chapter.) Conditions of Employment – 61. Learners in piecework. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. Any employer desiring to employ learners shall enter into a learnership agreement with them. 73. Apprenticeship agreements providing for wage rates below the legal minimum wage. Learnership agreement. and d. Art. Apprenticeship agreements. 75. which shall not exceed three (3) months. shall conform to the rules issued by the Secretary of Labor and Employment. A commitment to employ the learners if they so desire . Probationary employment. and the employment does not create unfair competition in terms of labor costs or impair or lower working standards. "Apprenticeship" means practical training on the job supplemented by related theoretical instruction. 281. NCR-14 5. 111. December 24. Executive Order No. the employment of learners is necessary to prevent curtailment of employment opportunities. Executive Order No. 76. 1986) Art. as regular employees upon completion of the learnership. Learners may be employed when no experienced workers are available.) Allowed Employment and When – 60. 58. Art. December 24. 74 RA 7796 Sec 4 m 4. c. When learners may be hired. The period of apprenticeship shall not exceed six months . unless it is covered by an apprenticeship agreement stipulating a longer period. Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. The Department shall develop standard model programs of apprenticeship. 72 Art. The duration of the learnership period. 67 19 . The names and addresses of the learners. 61. Art. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage. b. which agreement shall include: a. including the wage rates of apprentices. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. Wage Order No. Contents of apprenticeship agreements. – RA 7796 Sec 4 k Learner: Art. Definition of Terms. 75. Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable and which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months. may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. Only employers in the highly technical industries may employ apprentices and only in apprenticeable occupations approved by the Secretary of Labor and Employment. which in no case shall start below 75 percent of the applicable minimum wage.

81. The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representative.) 5. Upon complaint of any interested person or upon its own initiative.) Enforcement – Sec 44-46 (see pg 13 of RA) 4. Any employer who employs handicapped workers shall enter into an employment agreement with them. 80. 6. 7  Bernardo v. The court held that the an employee is considered regular because of the nature of the work & the length of the service. c. The employees filed for illegal dismissal. the workers were told from the start that they will not be regularized. The Petitioners’ contracts (except for 17 of them) were regularly renewed and since they have already completed the 6 moth probationary period. hired them only as an answer to the Government’s “pakiusap” 2. Handicapped workers may be employed when their employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition in labor costs or impair or lower working standards. The work to be performed by handicapped workers. Exhaustion of administrative remedies. 78. The decision of the Secretary of Labor and Employment shall be final and executory. The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor and Employment within five (5) days from receipt of the decision. handicapped workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired. Hours of Work Art 82-90 20 . and 4. Investigation of violation of apprenticeship agreement. 67. they are entitled to separation pay (cannot reinstate because there is no more job title of money counters. 3.) Definition – RA 7277 Sec 4 a b c d 2. 2.) Policy Declaration . Definition.Art. 66. 79.) Coverage . Eligibility for apprenticeship. LA and NLRC dismissed the complaint for lack of merit The court granted the petition because they noted that RA 7277 was controlling and not Art 80 as used by the LA and NLRC the workers being considered as QULAIFIED for their jobs. Art. Conditions of employment A.RA 7277 Sec 2 3. Appeal to the Secretary of Labor and Employment. Art. that it was already their tellers’ job to count the money 3.RA 7277 Sec 3 4.) Discrimination – Sec 32. Handicapped workers are those whose earning capacity is impaired by age or physical or mental deficiency or injury. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage. NLRC 43 deaf mute employees were dismissed by Far East Bank after their contracts with the bank as money counters were terminated. The names and addresses of the handicapped workers to be employed. 33 (see pg 8 of RA) 6. Art.) Rights and Privileges – 81 RA 7277 Sec 4 I 5. not because of the mode or reasoning for hiring them. 65. the appropriate agency of the Department of Labor and Employment or its authorized representative shall investigate any violation of an apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor and Employment. Art. The duration of employment period. unless he has exhausted all available administrative remedies. When employable. Art. Disabled Persons (Handicapped Workers) – 78-81 Magna Carta for Disabled Persons (RA 7277) 1. Employment agreement. which agreement shall include: 1. The Bank claimed that they 1. No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement. Subject to the appropriate provisions of this Code. Art.

or deformity. or cribs.000. nurseries. IA. Normal hours of work. including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one million or more. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. nurses. but not limited to. in which case. The normal hours of work of any employee shall not exceed eight (8) hours a day. General statement on coverage. or bassinets for twenty-four (24) hours use or longer by patients in the treatment of disease. persons in the personal service of another. Art. nutritionists. except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours. or in need of obstetrical or other medical and nursing care. regardless of the actual or bed occupancy. field personnel. or infirmaries. psychologists. exclusive of time for meals. Health personnel in cities and municipalities with a population of at least one million (1. SECTION 2. II (go to page 663 of Azucena if ma’am asks) RULE I-A Hours of Work of Hospital and Clinic Personnel SECTION 1. deformities. but not to government employees. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not. "health personnel" shall include resident physicians. disease. and to other officers or members of the managerial staff. and shall include. Coverage. and such other similar names by which they may be designated. resident 21 . — This Rule shall apply to: (a) All hospitals and clinics. for five (5) days a week. otherwise known as the Hospital Licensure Act. treatment and care of individuals suffering from illness. social workers. injury. members of the family of the employer who are dependent on him for support. building. Determination of bed capacity and population. Book III. injuries.000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day. SECTION 4. — The terms "hospitals" and "clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and operation of facilities for the diagnosis. and (b) All hospitals and clinics with a bed capacity of at least one hundred (100). irrespective of the size of the population of the city or municipality where they may be situated. domestic helpers. — This Rule applies to all persons employed by any private or public hospital or clinic mentioned in Section 1 hereof. Either term shall also be construed as any institution. maternity cases or sanitorial care. Personnel covered by this Rule. paramedical technicians. Omnibus Rules. the actual bed capacity of the hospital or clinic at the time of such determination shall be considered. 4226. laboratory technicians.Art. they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. dispensaries. 82. As used herein. SECTION 3. "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. or place where there are installed beds. For purposes of this Article. rule I. midwives. managerial employees. (b) The size of the population of the city or municipality shall be determined from the latest official census issued by the Bureau of the Census and Statistics. shall prima facie be considered as the actual bed capacity of such hospital or clinic. — (a) For purposes of determining the applicability of this Rule. pharmacists. Hospitals or clinics within the meaning of this Rule. attendants and all other hospital or clinic personnel. or abnormal physical and mental states. dietitians. The bed capacity of hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No. 83. and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.

they asked the Court of Industrial relations for MTC to pay them their overtime shifts. For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning at the same time each calendar year. — The regular working hours of any person covered by this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one week. it cannot be said that the watchmen have waived their rights to compensation due to laches and estoppel for this would be contrary to the 8 hour law which should always be construed as for the employee (another point: so the contract. CIR 22 . Relation to Rule I. managerial employees. — The regular working days of covered employees shall not be more than five days in a work week. Also. with the exception of those employed by the Government. designated by the employer. SECTION 6. Such employees shall also be entitled to overtime pay for services rendered in excess of forty hours a week. the salary was not reduced which proves that overtime pay was not yet included in the salary. social workers. CIR granted their request. the overtime pay is already included in the salary and that due to the passage of time. field personnel. — In determining the compensable hours of work of hospital and clinic personnel covered by this Rule. any employee covered by this Rule may be scheduled to work for more than five (5) days or forty (40) hours a week. Regular working days. CIR has jurisdiction over the case. Regular working hours.) Coverage: This rule shall apply to all employees except government. 2. SECTION 8. Employers are not precluded from changing the time at which the work day or work week begins. the pertinent provisions of Rule 1 of this Book shall apply. The findings of the court point out that after strict 8 hour shifts were imposed by MTC in lieu of the 12 hour shifts. MTRMA are barred due to laches and estoppel. These watchmen are part of the Manila Terminal Relief and Mutual Aid. provided that the change is not intended to evade the requirements of this Rule. or seven consecutive 24-hour work days. SECTION 10. pharmacists.physicians. Additional compensation. after organizing themselves. The work week may begin at any hour and on any day. — Hospital and clinic personnel covered by this Rule. retail. provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof. A "week" shall mean the work of 168 consecutive hours. nutritionists. According to the court. — All provisions of Rule I of this Book which are not inconsistent with this Rule shall be deemed applicable to hospital and clinic personnel. midwives. nurses. Hours worked. Overtime work. — Where the exigencies of the service so require as determined by the employer. Inc. beginning at the same hour and on the same calendar day each calendar week. dieticians. It is because of its nullity that he should. SECTION 7. SECTION 5. and attendants. 1. psychologists.) Night Shift differential (same as Art 86)  Manila Terminal Company Inc (MTC) took the arrastre service in some of the piers in Manila for which it hired 30 watchmen on 12 hour shifts.) 1. or in excess of eight hours a day. domestic helpers. being against the law should not be the reason why the employer should not pay. subject to the provisions of this Book on the payment of additional compensation for work performed on special and regular holidays and on rest days. v. whichever will yield the higher additional compensation to the employee in the work week. shall be entitled to an additional compensation for work performed on regular and special holidays and rest days as provided in this Book. MTC filed a petition for certiorari saying that CIR has no jurisdiction over the case and that in the agreement for the 12 hour shifts. including Saturday or Sunday. Regulation. SECTION 9. laboratory technicians paramedical technicians. RationaleManila Terminal Co.

(2) and (3) above. there shall be no reduction of existing wages. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution.Art. — The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: (a) Government employees whether employed by the National Government or any of its political subdivision. (2) They customarily and regularly direct the work of two or more employees therein. under general supervision. 2. convenience. or safety of the employer as well as the members of his employer's household. if they meet all of the following conditions: (1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof. Coverage 82. shall be governed by the Civil Service Law. or (ii) execute under general supervision work along specialized or technical lines requiring special training. are given particular weight. and (4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1). (d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof. or minister to the personal comfort. (e) Workers who are paid by results. Government Employees. including those employed in government-owned and/or controlled corporations. Domestic Servants. 2. "takay. Officers or members of Managerial Staff. experience. Exemption. or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees. Managerial Employees. Nonagricultural field personnel. Workers paid by results. (b) Managerial employees. benefits and other terms and conditions of employment being enjoyed by them at the time of the adoption of this Code. (3) They have the authority to hire or fire employees of lower rank. rules and regulations. special assignments and tasks. 276 Book III. or knowledge. Sec 1-2 (See page 658 of Azucena) 1. General Statement on Coverage: apply to all employees except to those exempted. (2) Customarily and regularly exercise discretion and independent judgment. SECTION 2. Government employees. including employees of government-owned and controlled corporations. However. and (3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof. (c) Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to management policies of their employer. or (iii) execute. Rule I. The terms and conditions of employment of all government employees." "pakiao" or task basis. 276. and other non-time work if their output rates are in accordance with the standards 23 . including those who are paid on piece-work.

In this case. NLRC  Jimmy Lebatique was hired by Far East as a truck driver to deliver animal feeds. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book. subdivisions. it must be substantiated by evidence because managerial employees are entitled to security of tenure as well. LA found that Lebatique was illegally dismissed. Exemptions a. in the interest of the employer. Section 2. Field Personnel – 82 Omnibus Rules. 276 Constitution Art IX-B. including government-owned or controlled corporations with original charters. v. Sec 2 (f) (Non agricultural field personnel)  Fermin Agao filed a case against Mercidar for illegal dismissal because when he reported back for work after his sick leave. Rule I. Petition dismissed. Lebatique 24 . Also. She was later on dismissed due to the expiration of her contract and Paz Wong replaced her as head. Supervisory employees are those who. CA reversed the NLRC decision ruling that he was illegally dismissed and that he was not a field personnel. pointing out that Quinta was continued as the Medical director and was even given the job of company physician. Rule I. or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section. assign or discipline employees. Although she was not required to report her number of hours at work as a managerial employee. v. Rule VII. Art 82 defined field personnel as the non-agricultural employees who perform their duties away from principal place of business and are therefore not covered by the Working Conditions and Rest Periods title. b. Book III. c. Book Three of these regulations. mere allegation is not sufficient. LA ordered his reinstatement and NLRC affirmed dismissing Mercidar’s claim that Agao is a “field personnel” and thus not entitled to service incentive leave pay. (1) The civil service embraces all branches. transfer. NLRC Virginia Quintia was hired by Int’l Pharmaceuticals (IPI) as its Medical Director for the Research Department which is still in its experimental stage and because of this. Government Employees – 82. "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire. she pointed out the inequality of the interest rates given to low salaried employees which led them to demand full disclosure of the financials. Agao cannot be considered as a field personnel even though his work is performed away from the principal place of business or office of Mercidar given the fact that the crew has no choice but to remain on the vessel and stay under the supervision of the vessel master. Lebatique complained of nonpayment of overtime work and was dismissed by the Uy brothers (one as the general manager of far east). recall. Separation pay and backwages. officers/ members of managerial staff)  International Pharmaceuticals Inc. In one meeting. 212 m. (f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. The court ruled that Far East failed to prove Far East Agricultural Supply. NLRC dismissed Lebatique’s complaint for lack of merit finding him to be a field personnel. IPI is allowed wider discretion in terminating the management personnel and loss of confidence can be alleged. Managerial Employees – 82 instrumentalities. The court was of the same opinion. Book III. Inc. however. the court said that if she was a project employee and that her contract expired due to the project being terminated. Omnibus Rules. discharge. and agencies of the Government. the Company refused to give him work nor issue him a certificate of employment after.prescribed under Section 8. she performed acts which are necessary and desirable to IPI’s business therefore satisfied the test of WON a person is a regular employee of the company. Sec 2 (b)(c) (Managerial employees. suspend. the contract of employment was subject to renewal. Mercidar Fishing Corp v. there would be no need to replace her. Her contract was renewed and she was given the added task of being the company Physician. effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. lay-off. LA and NLRC found her to be illegally dismissed and held that she was a regular employee not a project employee.

83. No househelper shall be assigned to work in a commercial.000. makes them regular employees. it was shown to the court that the LA disregarded the testimonies of the 99 complainants because he was of the perception that he would not be subjected to the rebuke of the NLRC if it were not for the employees. Persons in the Personal Service of Another – 82 g. Rest periods of short duration during working hours shall be counted as hours worked. Upon appeal by the employees under the Office of the Solicitor General. Petition denied. they are not exempted from giving overtime pay. They filed a case of illegal dismissal and underpayment of wages which the LA and the NLRC dismissed due to the testimonies of the company guard as well as the management and that the employees. "Domestic or household service" shall mean service in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household. Art. Normal hours of work. 25 . psychologists. are not entitled to overtime pay if the output rates are in accordance with Sec 8 Rule VII Book III or fixed rates of the Secretary of Labor (Sec 2(e) Rule I Book III). including services of family drivers. Petition granted. The court held that even if petitioners are pakiao workers does not imply that they are not regular employees. the court found. Pieceworkers. Piece Workers – 82 Omnibus Rules. 3. for five (5) days a week. nurses. For purposes of this Article. that it was his complaint for non payment of overtime work which prompted his dismissal. Sec 2 (e) (Workers who are paid by results)  Labor Congress vs. The fact that company drivers are given a specific schedule to deliver goods as well as the instance that drivers are directed to stay in the company premises during truck ban shows that Lebatique is a regular employee and thus entitled to the benefit of overtime pay. Art. exclusive of time for meals. Book III. being piece workers or “pakiao workers”. NLRC 99 rank and file employees of Empire food products were dismissed due to abandonment of post which led to the spoiling of the cheese curls. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace. of Labor therefore. Health personnel in cities and municipalities with a population of at least one million (1. Given the fact that they perform necessary operations in the day to day operations of Empire food. The court also found that he is not a field personnel given that being one does not only concern the location of the job but also the fact that the employee’s time and performance is not controlled and unsupervised by the employer. laboratory technicians. however. that Empire Foods did not adhere to the standard in Section 8 nor with the rates of the Sec. On Duty – 84(a). 84. they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. nutritionists. pharmacists. Dependent Family Members – 82 e. 141. in which case. 145. 145 Omnibus Rules. paramedical technicians. industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non-agricultural workers as prescribed herein. This Chapter shall apply to all persons rendering services in households for compensation. Book III. are not entitled to underpayment of wages. Sec 3 (a) (page 659 of Azucena): Hours worked: All time during which an employee is required to be on duty or to be at the employer’s remises or to be at the prescribed work place and. Domestic Helpers – 82. except where the exigencies of the service require that such personnel work for six (6) days or fortyeight (48) hours. midwives. Rule I. Hours worked. Normal Hours of Work – 83 Art. The normal hours of work of any employee shall not exceed eight (8) hours a day. "health personnel" shall include resident physicians.the burden that the termination was for a valid cause and in fact. Sec 2 (d) (Domestic servants) f. Coverage. d.000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day. The court found however. and (b) all time during which an employee is suffered or permitted to work. dietitians. Rule I. 141. Compensable Hours of Work – In General a. Assignment to non-household work. Book III. Sec (4) a: Principles in determining hours worked: All hours are hours worked which the employee is 4. attendants and all other hospital or clinic personnel. Art. social workers. Rule I.

Acosta died the next day.) Shorter Meal Period (Less than 1 hour but not less than 20 minutes) . Rule I Section 7 1st paragraph (page 660. The court affirmed their ruling and said that the eight hour work period does not include the meal break and no where in the law (Art 83. Rest Period i. it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. may rest completely and may leave his work place.) Short Duration or coffee break – . ii. relied on by the LA and the court held that the 30 minute assembly time was institutionalized by mutual consent of the parties under Article IV of their collective bargaining agreement and is a deeply-rooted routinary practice of the employees. Philippine Airlines v. An employee who is not required to leave 26 . Manuel Acosta suffered a heart attack and was brought to the clinic at 7:50pm.Section 7 1st par c. whether within or outside the premises of his workplace. Given that their houses are on the farms. work is necessary to prevent loss of perishable goods) b. Rule I. Art. Sec 3 (b): All time during which an employee is suffered or permitted to work.  Workers of Standard Philippine Fruits Corporation (Stanfilco) filed a complaint against the company claiming that the 30 minute assembly time is considered as waiting time or work time. Specific Rules a. Suspension is void. not less than 16 hours a day. Azucena) : Every employer shall give his employees. The Minister of Labor. left the clinic to have his dinner at his residence which was only 5 minutes away. Petition Dismissed. At Work – 84(a). Sec 5(a): Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. Waiting Time - Book III Rule I. 85. 85) is it stated that employees must take their meal within the company premises. The assembly time is primarily for the employees to indicate their availability or non availability for work during that day.required to give the employer regardless of WON such hours are spent in productive labor or involve physical or mental exertion. actual or impending emergencies. On Call - Book III. Fabros was suspended by PAL because he abandoned his post while on duty because he was obliged to stay in the company premises for not less than 8 hours. NLRC d. Book III. Fabros contested this suspension claiming that he was entitled to a thirty minute break.) Regular Meal Period (1 hour)  Dr. Book III. LA and NLRC held that an agreement of the parties includes the long standing practice of non-compensable assembly time. not less than 1 hour time of for regular meals except for (nonmanual labor. Fabros reached the clinic at 7:51 when the Nurse Eusebio has already left with Acosta. they can attend to household chores during the assembly time and are therefore not subject to the control of the management during this time.) - More than 20 minutes Book III Rule I Sec 4 (b): An employee need not leave the premises of the workplace in order that his rest period shall not be counted. Arica v. it being enough that he stops working. NLRC (1999) ii. Rule I. Meal Period i. Meal periods. b. to go elsewhere. Subject to such regulations as the Secretary of Labor may prescribe. Herminio Fabros a flight surgeon.84 2nd Par Book III Rule I Sec 7 2nd Par: Rest periods or coffee breaks running from 5 to 20 minutes shall be considered as compensable working time. LA and NLRC nullified the suspension. 5. Sec 5 (b): An employee who is required to remain on call in the employer’s premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. regardless of sex.

and other similar activities shall not be counted as working time if all of the following conditions are met: i. 6: Attendance at lectures. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. all time spent for such work shall be considered as hours worked. PD 451 is clear and unambiguous. Undertime not offset by overtime.word at his home or with company officials where he may be reached is NOT working while on call. Overtime work. The court found that Philnor hired the petitioner as a contractual or project employee as supported by documents which show that Rada was hired and re-hired during the continually extending duration of the project because of his satisfactory work. g. Having dismissed after working for 8 years with Philnor Consultants and Planters Inc.) Attendance is voluntary iii. If it is not part of Rada’s job. Proof of this is that when Rada was absent.. 88. LA ordered his reinstatement and NLRC reversed this decision dismissing Rada’s petition. an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. - Work after normal hours Book III Rule I Sec 4 (c): If the work performed was necessary. Lectures. Undertime work on any particular day shall not be offset by overtime work on any other day. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. Rada filed a case for illegal dismissal and for overtime pay for picking up and dropping off Philcor’s other employees. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive. trainings - Hilario Rada was hired as a truck driver for the construction supervision phase of the Manila North Expressway Extension. Inactive due to work interruptions - Book III. Art. h. 89. University of Pangasinan. Also. Section 4d of the Omnibus Rules Implementing the Labor Code provides that “time during which employee is inactive because of interruptions in his work beyond his control shall be considered as hours worked”. The University claims that the principle of “no work no pay” applies to this case and that the increase in tuition fees is for the increasing operating expenditures. f. there would be no need to find a replacement. Travel time  Rada v. The court held that “no work no pay” does not apply to this case because although it is a forced leave. Sec 4(d): The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered time either if the imminence of the resumption of work requires the employee’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employees own interest  The University of Pangasinan Union filed a complaint against the university for payment of the Emergency Cost of Living Allowances or ECOLA for the semestral break as well as for salary increases from 60 percent of the tuition increase mandated under PD 451 sec 3. development. or it benefited the employer. 60% of the increase should be dedicated to salary increase of the teachers. NLRC affirmed except with respect to overtime pay. e. meetings. Petition granted. The court however.) Attendance is outside of the employee’s regular working hours ii. meetings. if the work was with the knowledge of his employer or immediate supervisor. another driver replaced him for the day. they are still tasked with checking papers. Art. or the employee could not abandon his work at the end of his normal working hours because he had no replacement. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work. Emergency overtime work. As for the tuition increase. Overtime Work/Pay 27 . grading reports and other tasks during the break. Rule I. Any employee may be required by the employer to perform overtime work in any of the following cases: a. His services were rendered only for a particular project. 87. NLRC 6. student assistance and ROI of the school. granted the overtime compensation to Rada claiming that the pickup and drop off was primarily for the benefit of Philnor to delay inefficiencies.) The employee does not perform any productive work during such attendance. Art. University of Pangasinan Faculty Union v. training programs. Book III Rule I Sec.

Night shift differential. (c) Domestic helpers and persons in the personal service of another. 11: Computation: regular wage without deduction of facilities provided by employer. Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Night shift differential.88 Additional Compensation – 87 7. 10: Compulsory Overtime work. Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter. Book III. or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. 8 Emergency or compulsory overtime work -89 Undertime work/leave . Azucena) (8: overtime pay: 25%. SECTION 3. fire. without deduction on account of facilities provided by the employer. — An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays. typhoon. Computation of additional compensation. d. 86. in order to avoid serious loss or damage to the employer or some other cause of similar nature. For purposes of computing overtime and other additional remuneration as required by this Chapter. Night Work – Art. d. c. Additional compensation. 90. When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents. Rule I. purely commission basis. Coverage/ Exclusion – Sec 1 Book III. — An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning. Rule I.) a. When there is urgent work to be performed on machines. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. Overtime in ordinary working day – 87.b. SECTION 4. When the work is necessary to prevent loss or damage to perishable goods. epidemic.m. a. (d) Managerial employees as defined in Book Three of this Code. shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed. (e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis. SECTION 5. b. and e. — For work on the period covered during regular holidays. Secs. the "regular wage" of an employee shall include the cash wage only. an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed. 9: Premium and Overtime pay for holiday and rest day work: not less than 30% of his regular wage. Additional compensation on regular holidays. Secs. Additional compensation on scheduled rest day/special holiday. or other disaster or calamity. RULE II Night Shift Differential SECTION 1. installations. he shall be entitled to his regular wage plus at least twentyfive per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p. — This Rule shall apply to all employees except: (a) Those of the government and any of its political subdivisions. 28 . — Where an employee is permitted or suffered to work on the period covered after his work schedule. 8-11 (see page 660. Book III. or equipment. (b) Those of retail and service establishments regularly employing not more than five (5) workers. SECTION 2. Art. c. including government-owned and/or controlled corporations. Coverage.m. earthquake. flood. to 6 a.

a. hours of work or conditions of employment are taken cognizance by the Court of Industrial relations. earthquake. to avoid serious loss which the employer would otherwise suffer. The worker’s social life is also disarranged. typhoon. “Night was made for rest and sleep and not for work” Rule II. The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. When employer may require work on a rest day. In case of actual or impending emergencies caused by serious accident. lubricants and other duties are needed to be performed. The petitioner employees on the other hand contend that it is Commonwealth Act No. - Acting on a request by the National Labor Union. whether operated for profit or not. The industrial relations court rendered a decision allowing a 50% in salary for the night shift workers of Shell Oil Company. b. of the Philippines. Sunday or holiday work. Compensation for rest day. In cases of urgent work to be performed on the machinery. Shell invokes Commonwealth Act 444 which does not provide that night work is considered overtime work but rather provides that it is when work goes over 8 hours a day that compensation is required and that also. To prevent loss or damage to perishable goods. e. compensation. It shall be the duty of every employer. Relation to agreements. 93. flood. Shell Oil had to hire workers for night shifts because the plane from abroad often land an take off at night and chores such as supplying gasoline. General statement on coverage. The court concludes that CA 444 pertains only to wages or compensation during the day of Sunday and holidays and goes on a lengthy discussion about the effects of night work. including the recreational activities of his leisure hours and family relations. In the event of abnormal pressure of work due to special circumstances. supplements or payments as provided in existing individual or collective agreements or employer practice or policy. 103 that is in force. There is also a moral argument in the case of women working out late. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage.SECTION 6. The employer may require his employees to work on any day: a. Art. Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. 91. 86. or imminent danger to public safety. d. From on economic point of view. v. Art. Where an employee is made or permitted to work on his scheduled rest day. — The provisions of this Rule shall apply to all employees in all establishments and undertakings. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits. a. epidemic or other disaster or calamity to prevent loss of life and property. Right to weekly rest day. Sec 2 3 4 5  Shell Oil Co. Night shift differential. where the employer cannot ordinarily be expected to resort to other measures. SECTION 1. whether operating for profit or not. They say that there are injurious effects of permanently remote nightwork manifested in the later years of the employee’s life. CIR has no jurisdiction. fire. Ltd. and f. National Labor Union Art. b. 92. Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer. However. or installation. Weekly Rest Periods 29 . except to those specifically exempted under Section 2 hereof. b. An employee shall be B. the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. nightwork has an adverse effect on efficiency and output. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning. c. Additional Compensation Art. equipment. 103 stipulates that differences arising from wages. to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.

Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article. 30 . the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month. Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. SECTION 3. earthquake. equipment or installations to avoid serious loss which the employer would otherwise suffer. — (a) Where the weekly rest is given to all employees simultaneously. however. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred. — An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions: (a) In case of actual or impending emergencies caused by serious accident. (b) Where the rest period is not granted to all employees simultaneously and collectively. epidemic or other disaster or calamity. When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled. — All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule. SECTION 5. (c) In the event of abnormal pressure of work due to special circumstances. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays. fire. b. General statement on coverage. the employer shall pay such higher rate. (b) In case of urgent work to be performed on machineries. typhoon. the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures. Book III RULE III: Weekly Rest Periods SECTION 1. Preference of employee. to prevent loss of life or property.entitled to such additional compensation for work performed on Sunday only when it is his established rest day. Weekly rest day. SECTION 6. the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective. When work on rest day authorized. c. Business on Sundays/Holidays. where the employer cannot ordinarily be expected to resort to other measures. or in cases of force majeure or imminent danger to public safety. Where such holiday work falls on the employee’s scheduled rest day. — Every employer shall give his employees a rest period of not less than twenty-four (24) consecutive hours after every six consecutive normal work days. including public utilities operated by private persons. (d) To prevent serious loss of perishable goods. — This Rule shall apply to all employers whether operating for profit or not. — The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective. d. SECTION 2. Where. Schedule of rest day. he shall be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage. flood. SECTION 4.

(Union was unable to show grave abuse of discretion in the part of NLRC. vs. Relation to agreements.) Petition Dismissed. agreements. The court held that Saturday is not a day off. SECTION 7. The court is not asked to interpret Article III and Annex B of the CBA which provides that “Caltex agreed to pay ‘day of rest’ rates for work performed on ‘an employees day of rest’ ” The Union mistakenly interpreted Annex B. The Union filed a complaint of unfair labor practice against Caltex because in effect they were paying regular rates during Saturdays which was supposed to be a day of rest or “day off”. Book Three. or be used to diminish any benefit granted to the employees under existing laws. After promises by the company. However. etc. Coverage 31 . — (a) Except those employees referred to under Section 2. Caltex (Phils.) Inc. the employer shall pay such higher rate. Caltex Regular Employees. and NLRC 1. LA ruled for the Union and this decision was set aside by NLRC for lack of evidence. to appropriate Saturday as a day of rest. SECTION 8.(e) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more. — Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day. Paid-off days. (c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. that where an employee volunteers to work on his rest day under other circumstances. as in the case of the crew members of a vessel to complete a voyage and in other similar cases. the workers were paid excluding the first 2 ½ hours of Saturday. he shall be entitled to additional compensation of at least 50% of his regular wage. Compensation on rest day/Sunday/holiday. Extra compensation applies only when the worker is made to work for an excess of 40 hours per calendar week. The decision of the labor arbiter therefore was based on mere allegation by the Union. (b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled. an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. which was intended only as a guide. he shall express such desire in writing. and (f) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. holidays. No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided. subject to the provisions of Section 7 hereof regarding additional compensation. he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays. SECTION 9. Where such holiday work falls on the employee's scheduled rest day. Book Three. (d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV. Caltex claimed that Saturday was never designated as a day of rest in their CBA. of these regulations. (e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section. and voluntary employer practices.  Caltex Regular Employees Association called Caltex’s attention to the non payment of night shift differential and overtime pay for work performed during a Saturday as stipulated in their collective bargaining agreement. Rule I. or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code. — Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the employees than those provided herein.

However. whether operating for profit or not. e. As used herein. power. Art. the petitioner. b. epidemic or other disaster or calamity to prevent loss of life and property. Right to weekly rest day. Coverage. Determination. 91. water or providing means of transportation or communication The court held that the decision of the CIR is erroneous and contrary to CA 444 because appellant is a public utility which supplies electricity and is therefore obviously exempted from the prohibition. the CIR interposed a 50% increase in pay for work during these times. The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not. In cases of urgent work to be performed on the machinery. and f. The employer may require his employees to work on any day: a. d. where the employer cannot ordinarily be expected to resort to other measures. fire.Art. a. Right to weekly rest day. — This Rule shall apply to all employers whether operating for profit or not. To prevent loss or damage to perishable goods. the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. 91. managerial employees. electricity. Public Utilities Employees Association 32 . to avoid serious loss which the employer would otherwise suffer. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. persons in the personal service of another. to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days. Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. domestic helpers. Art. b. or imminent danger to public safety. c. In the event of abnormal pressure of work due to special circumstances. It shall be the duty of every employer. The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. b. and to other officers or members of the managerial staff. or installation. It shall be the duty of every employer. members of the family of the employer who are dependent on him for support. 2. However. the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. earthquake. a. assails the decision of the CIR that they should grant 1 day vacation with pay to every workingman who had worked for 7 consecutive days including Sundays and that because Sundays and holidays are for rest. General statement on coverage. typhoon. but not to government employees. Compulsory work. "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof. Manila Electric contends that the decision is against the provision of Sec 4 Commonwealth Act 444 which provides that the prohibition shall not apply to public utilities performing some public service such a supplying gas. Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer. Compensation  Manila Electric. Book III RULE III Weekly Rest Periods SECTION 1. 82. and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. flood. to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days. whether operating for profit or not. including public utilities operated by private persons. When employer may require work on a rest day. 92. In case of actual or impending emergencies caused by serious accident. field personnel. They Manila Electric Company v. equipment. WEEKLY REST PERIODS Art.

Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. otherwise known as the Administrative Code of 1987. 9492 ] amending EO 203 AN ACT RATIONALIZING THE CELEBRATION OF NATIONAL HOLIDAYS AMENDING FOR THE PURPOSE SECTION 26. a. d. 93. Premium Pay 4. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day. Chapter 7. Holidays [ REPUBLIC ACT NO.may compel workers to work on Sunday without extra compensation because public utilities are exempted from the prohibition given that they are required to perform a continuous service including Sundays. 292. Where such holiday work falls on the employee’s scheduled rest day. BOOK I OF EXECUTIVE ORDER NO. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: SECTION 1. Art. Section 26. CHAPTER 7. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays. Regular Holidays and Nationwide Special Days. AS AMENDED. b. the employer shall pay such higher rate. Book I of Executive Order No. – (1) Unless otherwise modified by law. CBA on higher premium pay C. When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled. is hereby amended to read as follows: “Sec. Sunday or holiday work. he shall be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage. Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article. 3. as amended. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987. c. Where an employee is made or permitted to work on his scheduled rest day. to fix the minimum additional compensation and to exempt public utilities affected with public interest from payment of compensation. Compensation for rest day. the following regular holidays and special days shall be observed in the country: a) Regular Holidays New year’s Day Maundy Thursday Good Friday Eidul Fitr Araw ng Kagitingan (Bataaan and Corregidor Day) Labor Day Independence Day National Heroes Day Bonifacio Day Christmas Day Rizal Day b) Nationwide Special Holidays: Ninoy Aquino Day Monday nearest August 21 January 1 Movable date Movable date Movable date Monday nearest April 9 Monday nearest May 1 Monday nearest June 12 Last Monday of August Monday nearest November 30 December 25 Monday nearest December 30 33 . The rling of the CIR is therefore contrary to law. and or proclamation. 26. The purpose of the Rule (CA 444) is to restrict the power of the CIR given in Act 103. 292.

except in retail and service establishments regularly employing less than ten (10) workers. the holiday will be observed on the Monday that follows: Provided. Pursuant to the authority granted to the Secretary of Labor and Employment under Section 13 of Republic Act No. purely commission basis.All Saints Day Last Day of the Year c) - November 1 December 31 In the event the holiday falls on a Wednesday. Retail Establishment: Rules Implementing RA 6727 par f 34 . Every worker shall be paid his regular daily wage during regular holidays. the specific date that shall be declared as a nonworking day: Provided. the following rules are hereby issued for guidance and compliance by all concerned: Pursuant to the authority granted to the Secretary of Labor and Employment under Section 13 of Republic Act No. a.” SEC. Book III RULE IV Holidays with Pay SECTION 1. 3. 6727. or part thereof SEC. (e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis. The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region in Muslim Mindanao. 6727. the following rules are hereby issued for guidance and compliance by all concerned: Definition of Terms. rules and regulations inconsistent with this Act are hereby repealed or modified accordingly. Definition RULES IMPLEMENTING REPUBLIC ACT NO. — This rule shall apply to all employees except: (a) Those of the government and any of the political subdivision. or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. the President shall issue a proclamation. Coverage. All laws. (c) Domestic helpers and persons in the personal service of another. 6727. otherwise known as the Wage Rationalization Act. 2. (b) Those of retail and service establishments regularly employing less than ten (10) workers. orders. As used in this Rules - a. Right to holiday pay. presidential issuances. 94. This Act shall take effect after fifteen (15) days following its publication in at least two newspapers of general circulation. Coverage/ Exclusions Art. the holiday will be observed on the Monday of the week. at least six months prior to the holiday concerned. including government-owned and controlled corporation. If the holiday falls on a Sunday. however. (d) Managerial employees as defined in Book Three of the Code. That for movable holidays. PD 1083 (Code of Muslim Personal Laws) 1. otherwise known as the Wage Rationalization Act.

however. Right to holiday pay."Service Establishment" is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. Faculty in Private School Book III Rule IV SECTION 8. The respondent Corporation says that the petitioner is barred from pursuing the present action regarding the holiday pay because it was already held that any stipulation of the arbitrator’s award shall be final and executory under Art 2044. CC. b. Provided. his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday. The Solicitor General Argued that holiday pay applies to all employees except those in retail/ service establishments because the purpose of holiday pay is to prevent diminution of the monthly income of the workers on account of work interruptions. with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not. such as payment on piece work. is paid by results or output. Chartered Bank Employees Association v. Service Establishment: par g  Mantrade/FMMC Division Employees and Workers Union v. The issue in the case is WON school faculty whoa re aid per lecture per hour are entitled to holiday pay. It is clear in Art 94.) The court held that In Insular Bank of Asia v. Arbitator Bacungan and Mantrade Corp Mantrade Union questions the validity of Art 94 of the LC providing holiday pay. (d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.LC and Rule IV Book III Section A. g. the Section was considered void because it AMENDED the provision of holiday pay by including monthly paid employees thus enlarging the scope. Status of employees paid by the month. the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve. (c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.  The National Alliance of Teachers and Office Workers (NATOW) in behalf of the faculty of Jose Rizal College. The decision of the Arbitrator is set aside. They shall. although the worker is forced to take a rest. Under Art 94. b. Ople also reiterated this ruling. Inciong. LC that monthly paid employees are not excluded from the benefits of holiday pay. filed a complaint with the Ministry of Labor for non-payment of holiday pay. 2. (b) Where a covered employee. and Holiday Pay a. Art. may not be paid for the regular holidays during semestral vacations. the court concluded that it is the legal duty of the Corporation to grant the holiday pay."Retail Establishment" is one principally engaged in the sale of goods to end-users for personal or household use. The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. including faculty members of colleges and universities. — (a) Private school teachers. NLRC 35 . Sec 2 Rule IV Book III of the omnibus rules provides otherwise (SECTION 2. although JRC is a non-profit Jose Rizal College v. Respondent Arbitrator stated that although monthly salaried employees are not among those excluded in Art 94 of the LC. irrespective of the number of working days therein.f. For this purpose. — Employees who are uniformly paid by the month. Petitioner maintains that it is not covered by Book V of the LC and that its hourly paid employees are paid on a contact basis. Holiday pay of certain employees. 94. be paid for the regular holidays during Christmas vacation. Therefore. he should earn what he should earn. However.

(52 weeks/yr x 44 hours per week ÷ 8 work hours per day = 286). it is already understood that when they entered their contracts. When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled. that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. 93. Where an employee is made or permitted to work on his scheduled rest day. v. — All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule. (c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work. Divisor as Factor  TAPEA entered into a Collective Bargaining Agreement with their employer with the stipulation that on a legal holiday. for special holidays. however. (262 + 26 working Saturdays of employees = 286. (b) Where a regular holiday falls on a Sunday. such as payment on piece work. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays. Trajano A routine inspection by the Labor enforcement officer held that Wellington flour wills did not pay regular holidays falling on Sunday for monthly paid employees. TAPEA filed a complaint for the non inclusion of the holiday pays in their monthly pay. his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday. they should not expect payment for the “no class days” or the regular holidays. (b) Where a covered employee. is paid by results or output. may not be paid for the regular holidays during semestral vacations. he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. the Undersecretary affirmed the order of the regional director finding the divisor of 36 . Compensation for rest day. However.institution. the following day shall be considered a special holiday for purposes of the Labor Code. Due to non-compliance of their employer. it is under the obligation to give pay even on unworked regular holidays to the hourly paid faculty members because of the purpose of the holiday pay as stated earlier. The LA dismissed the complaint and was affirmed by the NLRC. Therefore. including faculty members of colleges and universities. They shall. unless said day is also a regular holiday. b. Thus this petition. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day. Business on Sundays/Holidays. a. — (a) Private school teachers. — (a) A regular holiday falling on the employee's rest day shall be compensated accordingly. the petitioner should pay their hourly paid teachers. b. Book III Rule III SECTION 2. (d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule. their divisor). the employee is entitled to 200% of the regular daily wage and a 60% premium pay. They showed the Employee’s manual. Holiday pay of certain employees. the appointment papers of their employer as well as the CBA itself as proof that their employer does not include their holiday pay in their monthly salary. Trans-Asia Phil Employees Association (TAPEA)v. On a motion for reconsideration. For Special Public holidays. The court held that the use of 286 clearly shows the inclusion of the employee’s benefits and deductions in Trans-Asia’s computation. SECTION 9. The petitioner contends that it uses the 314 factor and that it undeniably covers and already includes payment for all the working days of the month including the 10 unworked regular holidays. The court held that for the hourly paid teachers. Provided. Sunday or holiday work. SECTION 8. The court upheld the decision of the NLRC with the slight modification of changing the divisor to 287 to include the regular and special holidays as set in EO 203. the regular class day is cancelled and the hourly paid teacher does not earn what he should earn that day. Regular holiday falling on rest days or Sundays. The petitioner raised the issue of WON a monthly paid employee receiving a fixed monthly compensation is entitled to additional pay aside from his usual holiday pay whenever a regular holiday pay falls on a Sunday.  Wellington Investment Inc. be paid for the regular holidays during Christmas vacation. Sunday: Art. NLRC c. TransAsia contended that these do not prove their non-payment of holiday pay stating that they have used the 286 divisor in computing for the employee’s overtime pay which is based on RA 6640 where 262 is used instead of 286.

Director of DOLE SMC v. (c) Lailatul Isra Wal Mi'raj (Nocturnal Journey and Ascension of the Prophet Muhammad). Zamboanga del Norte and Zamboanga del Sur. The 314 facor simply deducts the 51 Sundays from the 365 days per year to determine the monthly salary which in effect leaves no day unaccounted for during the 365 day year. Article 170. Maguindanao. Sultan Kudarat.Wellington does not reflect the actual working days in a year. That at the time of inspection. (2) The President of the Philippines may. and Zamboanga and in such other Muslim provinces and cities as may hereafter be created. agencies or establishments to excuse their Muslim employees from reporting for work during a Muslim holiday without reduction in their usual compensation. Marawi. Pagadian. Observance of Muslim employees. (d) 'Id-ul-Fitr (Hari Raya Pausa). Lanao del Norte. Tawi-Tawi. Dates of observance. by proclamation. CA 37 . require private offices. and (e) 'Id-ul-Adha (Hari Raja Haji). Iligan. (1) Muslim holidays shall be officially observed in the Provinces of Basilan. which falls on the first day of the tenth lunar month of Shawwal. (2) Upon proclamation by the President of the Philippines.  The Department of Labor and Employment conducted a routine inspection in San Miguel. Lanao del Sur. Sulu. Article 172. Muslim holidays may also be officially observed in other provinces and cities. The court held that Wellington was paying the holiday pay according to Art 94 of LC. The dates of Muslim holidays shall be determined by the Office of the President of the Philippines in accordance with the Muslim Lunar Calendar (Hijra). The public respondents have acted beyond their authority in using the power to order and administer given to the Regional director under Sec 2 Rule X Book III. which falls on the twenty-seventh day of the seventh lunar month of Rajab. Undersecretary and Regional Director’s orders are nullified. Provinces and cities where officially observed. wellington was already paying its employees a salary not less than the statutory or established minimum wage. Article 171. (b) Maulid-un-Nabi (Birthday of the Prophet Muhammad). The following are hereby recognized as legal Muslim holidays: (a) 'Amun Jadid (New Year). which falls on the first day of the first lunar month of Muharram. which falls on the twelfth day of the third lunar month of Rabi-ul-Awwal. (1) All Muslim government officials and employees in places other than those enumerated under Article 170 shall also be excused from reporting to office in order that they may be able to observe Muslim holidays. To uphold the ruling of the undersecretary that the 317 factor should be used in the year of 1988 (because of the regular holidays falling on a Sunday that year) would make it a year of 368 days. Official Muslim holidays. and in the Cities of Cotabato. North Cotabato. Iligan finding that there was underpayment by SMC of regular Muslim Holiday pay to its employees. which falls on the tenth day of the twelfth lunar month of Dhu 1-Hijja. Muslim Holiday PD 1083 169-172 Article 169. d. commemorating the end of the fasting season.

Service Incentive Leave Book III RULE V Service Incentive Leave SECTION 1. in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. (b) Domestic helpers and persons in the personal service of another. in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. 3. CA ruled that SMC should pay muslim holiday (150% of basic salary) thus this petition for certiorari. Absences 4. an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday. Absences. including government-owned and controlled corporations. he shall not be deemed to be on leave of absence on that day. LC. Rest Day. SMC’s appeal was dismissed. he shall not be deemed to be on leave of absence on that day. Successive regular holidays. (e) Those who are already enjoying the benefit herein provided. that there should be no distinction between muslims and non-m as regard the payment of benefits. Absences. The court held however. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. unless he works on the first holiday. (Only if ma’am asks: Given Art 128 of the LC as amended by RA 7730. (c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee. — This rule shall apply to all employees except: (a) Those of the government and any of its political subdivisions. (b) Employees shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee's compensation or social security payment. (d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis. Coverage. Non-Working day/Schedule. — (a) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. (f) Those enjoying vacation leave with pay of at least five days. Section 6 c Book III Rule IV SECTION 6. — Where there are two (2) successive regular holidays. (c) Managerial employees as defined in Book Three of this Code. The court upheld the decision of the CA citing PD 1083 (Sec 169-170) and 94. D. purely commission basis.issue a compliance order from which SMC filed an appeal. Book III Rule IV SECTION 6. if they are not reporting for work while on such benefits. and (g) Those employed in establishments regularly employing less than ten employees. or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. like Holy Thursday and Good Friday. 38 . — (c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee. SECTION 10. whichever is higher. Regional director Macaraya’s issuing of the compliance order is within his power) The petition is dismissed. Petitioner asserts that the provisions of PD 1083 (Art 3(3) of the PD) should be applicable only to muslims. in which case he is entitled to his holiday pay on the second holiday.

SECTION 3. Right to service incentive leave. Right to service incentive leave. SECTION 6. NLRC supra 39 . During the pendency of the case. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year. basters and plantsadoras. Accrual of benefit. SECTION 5. respondent Pelobello left a jusi barong tagalog with Zapata who admitted he as copying the design. service incentive leave pay and 13 th month. a. They filed a case of illegal dismissal and underpayment of wages which the LA and the NLRC dismissed due to the testimonies of the company guard as well as the management and that the employees. Coverage  Respondents have been working for Makati Haberdashery as tailors. 1. LA found respondents to have violated cost of living allowance. The court found that the petitioners were the employers of the respondents using the four fold test and the memorandum as the court’s basis. instead. It should not be assumed that every labor dispute would be decided in favor of labor. Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action. they did not report for work and thus they were dismissed by petitioners. This was affirmed by NLRC. in which case said period shall be considered as one year. They also found that the Respondents are entitled to the minimum wage. SECTION 4. — Entitlement to the benefit provided in this Rule shall start December 16. Upon appeal by the employees under the Office of the Solicitor General. Thus this petition. Treatment of benefit. whether continuous or broken reckoned from the date the employee started working. c. non payment of service incentive pay. Complaint for illegal dismissal dismissed. their blatant disregard of their employer’s memorandum is an open defiance to their lawful orders. Decision of NLRC modified. Definition of certain terms. those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment. Relation to agreements. it was shown to the court that the LA disregarded the testimonies of the 99 complainants because he was of the perception that he would not be subjected to the rebuke of the NLRC if it were not for the Labor Congress v. The workers filed a complaint for underpayment. supplements or payments as provided in existing individual or collective agreements or employer's practices or policies. are not entitled to underpayment of wages. including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy. 95. Makati Haberdashery Inc. They are required to work from Monday to Saturday and even Sundays on peak periods. seamstress. A memorandum was issued to each of them which they did not reply to. being piece workers or “pakiao workers”. v. nonpayment of overtime work. Also. This provision shall not apply to those who are already enjoying the benefit herein provided. They are paid on a piece rate basis and are given a daily allowance of 3 pesos to report for work before 9:30 am everyday. Haberdashery had lawful ground in terminating them. they are being paid at a fixed amount irrespective of the time consumed. They fall under the exceptions in Book III Rule V 1(d). Art. — Nothing in the Rule shall justify an employer from withdrawing or reducing any benefits. the date the amendatory provision of the Code took effect. NLRC  99 rank and file employees of Empire food products were dismissed due to abandonment of post which led to the spoiling of the cheese curls. COLA and 13th month pay but they are NOT entitled to service incentive leave pay because as piece-rate workers.SECTION 2. — The term "at least one-year service" shall mean service for not less than 12 months. or that provided in the employment contract is less than 12 months. b. 1975. — Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

an employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall likewise be liable for discrimination. Sec 1-6 AND implementing guidelines 1. For government employees. makes them regular employees. Implementing Rules Section 42. for government employees. purely commission basis. or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. a victim of VAWC who is employed shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations and other existing laws and company policies. and this is all that is required for the employer to comply with the 10-day paid leave. Rule II. Section 1 (e). The Punong Barangay/kagawad or prosecutor or the Clerk of Court.” 2. Ten-day paid leave in addition to other leave benefits. not only did petitioners labor under the control of private respondents as their employer.related rights and benefits F.related rights and benefits G. Book III which we quote hereunder. petitioners as piece-rate workers do not fall within this group. Coverage 2. Coverage 2. Employment.employees. including those who are engaged on task or contract basis. that Empire Foods did not adhere to the standard in Section 8 nor with the rates of the Sec. they are not exempted from giving overtime pay. the employee concerned must file an application for leave citing as basis R. PRESCRIBING PENALTIES THEREFORE. extendible when the necessity arises as specified in the protection order. Sec. Requirements 3. holiday pay. . “field personnel and other employees whose time and performance is unsupervised by the employer. investigation. Requirements 3. extendible when the necessity arises as specified in the protection order. as amended. of Labor therefore. 2004 AN ACT DEFINING VIOLENCE AGAINST WOMEN AND THEIR CHILDREN.At any time during the application of any protection order. Employment. The court held that even if petitioners are pakiao workers does not imply that they are not regular employees. in addition to the aforementioned certification. for employees in the private sector. prosecution and/or trial of the criminal case. service incentive leave and 13th month pay. Petition granted. 9262. Likewise. Further. Entitled to Leave. are not entitled to overtime pay if the output rates are in accordance with Sec 8 Rule VII Book III or fixed rates of the Secretary of Labor (Sec 2(e) Rule I Book III). Paternity Leave RA 8187. and the Civil Service Commission. 1(e) Rule IV and Sec. Rule V of Book II “The Rules Implementing the Labor Code exclude certain employees from receiving benefits such as nighttime pay. piece workers are specifically mentioned as being entitled to holiday pay. inter alia. Requirements E. shall issue a certification at no cost to the woman that such an action is pending. likewise did petitioners toil throughout the year with the fulfillment of their quota as supposed basis for compensation. Pieceworkers. Any employer who shall prejudice the right of the person under this section shall be penalized in accordance with the provisions of the Labor Code and Civil Service Rules and Regulations. The administrative enforcement of this leave entitlement shall be considered within the jurisdiction of the Regional Director of the DOLE under Article 129 of the Labor Code of the Philippines.A. 1(d). As mentioned earlier. Rule IV. The court found however. as the case may be. 40 . – Victims under this Act shall be entitled to take a paid leave of absence up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations. PROVIDING FOR PROTECTIVE MEASURES FOR VICTIMS. Victim’s Leave RA 9262 Sec 43 March 08.” Plainly. Given the fact that they perform necessary operations in the day to day operations of Empire food. however. in Section 8 (b). Parental Leave RA 8972 (Solo Parent’s Welfare Act of 2000) 1. AND FOR OTHER PURPOSES SECTION 43.

bars.A 9262. Coverage. SECTION 6. — This rule shall apply only to establishments collecting service charges such as hotels. restaurants and similar establishments shall be distributed at the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for management. the share of the covered employees shall be considered integrated in their wages. SECTION 3. — In case the service charges is abolished the share of covered employees shall be considered integrated in their wages. Leaves not availed of are noncumulative and not convertible to cash. SECTION 4. and irrespective of the method by which their wages are paid except to managerial employees. designations or employment status. including those entities operating primarily as private subsidiaries of the Government. assign. 96.The availment of the ten day-leave shall be at the option of the woman employee. regardless of their positions. SECTION 7. The 85% shall be distributed equally among the covered employees. Service charges. lodging houses. SECTION 2. As used herein. night clubs. lay-off. The employer/agency head who denies the application for leave. The share of the employees shall be equally distributed among them. 41 . The provision of the Labor Code and the Civil Service Rules and Regulations shall govern the penalty to be imposed on the said employer/agency head. Distribution of service charges. a "managerial employee" shall mean one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. In case the service charge is abolished. restaurants. transfer. discharge. or be used to diminish any benefit granted to the employees under existing laws. The 15% shall be for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of the management in the latter case. — This rule shall apply to all employees of covered employers. Art. and who shall prejudice the victimsurvivor or any person for assisting a co-employee who is a victim-survivor under the Act shall be held liable for discrimination and violation of R. H. recall. agreement and voluntary employer practice. suspend. cocktail lounge. — Nothing in this Rule shall prevent the employer and his employees from entering into any agreement with terms more favorable to the employees than those provided herein. Service Charges – Book III Rule VI Service Charges SECTION 1. — All service charges collected by covered employers shall be distributed at the rate of 85% for the employees and 15% for the management. All employees not falling within this definition shall be considered rank-and-file employees. and similar enterprises. Frequency of distribution. SECTION 5. which shall cover the days that she has to attend to medical and legal concerns. Relation to agreements. Employees covered. This rule shall be without prejudice to existing. The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of such charges. massage clinics. casinos and gambling houses. All service charges collected by hotels. or discipline employees or to effectively recommend such managerial actions. future collective bargaining agreements. Integration of service charges. — The shares referred to herein shall be distributed and paid to the employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.

96 5. The court found that the letter of the exchange of letters between Leyson (one of the complainants) and Mationg (the general manager).96 Sharing . 2. The State shall regulate the relations between workers and employers. General Principles a. including conciliation. and peaceful concerted activities.. it should not be part of the minimum wage the same as living quarters because the bonus is given when actual work accomplished is efficient and is paid as a prize. no pay” claim for unpaid wages. When it was safe the work at Lezo again. Regional minimum wages. temporarily moved to Kalibo Aklan because it was dangerous to hold office at Lezo during the time.22 a day is not excessive for the purpose of improving the worker’s mode of living. The extra amount of P0. NLRC 42 . ARTICLE XIII – LABOR Section 3. The court ruled ruling that P2. Republic Act No. Omnibus Rules Book III Rules VII-VIII A. The petitioner assailed the decision in this petition for certiorari saying that NLRC committed grave abuse of discretion when it reversed the findings of the LA that the workers refused to work under the lawful orders of AEO’s management and therefore. and promote full employment and equality of employment opportunities for all. That the law guarantees the laborer a fair and just wage therefore the minimum must be fair and just. No work. BY RESOLUTION. NLRC reversed the decision of the LA and ordered AEC to pay wages. the workers and the office were removed from Kalibo. local and overseas. the company legally transferred it business to Kalibo without prejudice to its workers. Minimum Wages – 99 Art.58 as provided by RA 602 is only the minimum amount needed by the laborer and his family AND that a person’s needs increase as his means increase. including the right to strike in accordance with law.20 declaring that additional compensation representing efficiency bonus should not be included as part of the wage. The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.” In this case. Atok Big Wedge Mutual Benefit Association  The main office in Lezo. 1987 Constitution. 1. and shall enforce their mutual compliance therewith to foster industrial peace. “If there is no work performed by the employee there can be no wage pay unless the laborer was able willing and ready to work but was ILLEGALLY locked out. they are not covered by the “no work. organized and unorganized. recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments. Herein complainants however. therefore not part of the wage. NLRC decision reversed.Nothing in this rule shall be construed to justify the reduction or diminution of any benefit being enjoyed by any employee at the time of effectivity of this rule. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes. Inc. was. humane conditions of work. They shall be entitled to security of tenure. 6727. 1989). v. a majority of the workers continued to report at Lezo and were not paid their wages. Despite the resolution. as well as the computation used as basis for the request of the unpaid wages are self serving and that the temporary resolution of AEO should be given credence. Inc. Petition dismissed. As for the efficiency bonus. v. 99. (As amended by Section 3. Aklan Electric Corp. reported for work at Lezo and were not paid their salaries from Apr to May 1993. Minimum Wages and Wage Fixing Machinery 97-119. and to expansion and growth. 1. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. LA dismissed complaint. June 9. It shall guarantee the rights of all workers to self-organization. Aklan. no pay OR A fair day’s wage for a fair day’s labor  A demand was sent to Atok Big Wedge Mining Corp by the Officers of the company’s union which the CIR fixed the wage at P3. Atok Big Wedge Mining Co. collective bargaining and negotiations. and a living wage. Covered Employees . Complainant and 163 other workers submitted a complaint for non-payment of wages. suspended or dismissed. The State shall afford full protection to labor.

Payment of a lesser compensation. assist or otherwise interfere with the formation or administration of any labor organization. or other facilities customarily furnished by the c. whether fixed or ascertained on a time. study and scholarship grants solely on account of their sexes. Sec. that the individual authorization required under Article 242. Quisumbing (supra) f. or i. 135. piece. of board. and b. d. (As amended by Batas Pambansa Bilang 130. lodging. Unfair labor practices of employers. if such non-union members accept the benefits under the collective bargaining agreement: Provided. including wage. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. b. Criminal liability for the willful commission of any unlawful act as provided in this Article or any violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as provided in Articles 288 and 289 of this Code: Provided. The following are acts of discrimination: a. which may include claims for damages and other affirmative reliefs. or other method of calculating the same. 248. or for services rendered or to be rendered and includes the fair and reasonable value. Form: agreement for compensation of services Art 97 (f) d. dominate. To contract out services or functions being performed by union members when such will interfere with. for work of equal value. To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs. or commission basis. associations or partnerships who have actually participated in.The provisions of the preceding paragraph notwithstanding. Favoring a male employee over a female employee with respect to promotion.b. e. To discriminate in regard to wages. Art. restrain or coerce employees in the exercise of their right to selforganization. capable of being expressed in terms of money. hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor organization.” Int’l School Alliance of Education v. (but lodging is okay) “public policy abhors inequality and discrimination. only the officers and agents of corporations. To violate a collective bargaining agreement. task. To violate the duty to bargain collectively as prescribed by this Code. restrain or coerce employees in the exercise of their rights to selforganization. Employees of an appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees paid by members of the recognized collective bargaining agent. except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. g. August 21. c. To dismiss. to a female employees as against a male employee. 1989) Art. 97. To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute. training opportunities. authorized or ratified unfair labor practices shall be held criminally liable. f. Foreign hires do not perform 25% more efficiently and thus should be paid equal pay for work of equal value. May 12. Definitions. To initiate. Equal pay for work of equal value – 135. 1981)  Local Hires of the ISchool claim discrimination in pay as compared to foreign hires (those who are hired from abroad to do expatriate teaching here) who earn 25% more than them and are entitled to benefits such as housing. 6725. To interfere with. as determined by the Secretary of Labor and Employment. As used in this Title: 43 . 248 Art. It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent. including the giving of financial or other support to it or its organizers or supporters. salary or other form of remuneration and fringe benefits. It shall be unlawful for an employer to commit any of the following unfair labor practice: a. (As amended by Republic Act No. h. "Wage" paid to any employee shall mean the remuneration or earnings. That the institution of any criminal action under this provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for money claims. The actions hereby authorized shall proceed independently of each other. Discrimination prohibited. however designated. The court ruled that salaries could not be used to entice foreign hires. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment. discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under this Code.

99. Art. Petition dismissed.  Ludivico C. or organizations. Apprenticeship agreements providing for wage rates below the legal minimum wage. LA found for Culla but denied 13 th month pay. which agreement shall include: c. including the wage rates of apprentices. Application of Title. The Department shall develop standard model programs of apprenticeship. shall conform to the rules issued by the Secretary of Labor and Employment. Any employer desiring to employ learners shall enter into a learnership agreement with them. which in no case shall start below 75 percent of the applicable minimum wage. over time pay and 15% commission. domestic service and persons working in their respective homes in needle work or in any cottage industry duly registered in accordance with law. 6727. may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. Culla filed a complaint saying that his ejectment and dismissal were illegal and he prayed for reinstatement with backwages as well as his 15% commission of the gross income of the tax business. (As amended by Section 3. The court holds that salary is a fixed compensation for regular work whereas commission is a percentage or allowance made to a factor or agent transacting business for another. Apprenticeship agreements. c. LA dismissed case claiming that the petitioner is a government owned corporation and should be under the Civil Service Commission and not the NLRC. This Title shall not apply to farm tenancy or leasehold. December 24. and The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative. "Employee" includes any individual employed by an employer. As used in this Title: b. "Employ" includes to suffer or permit to work. 75. garage caretaker etc in their taxi business and he was paid P5K a month. Costs against petitioner. Republic Act No. Both parties appealed to the NLRC which affirmed the LA. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage. or to any person affiliated with the employer. NLRC 2. Culla was found to be an employee and is entitled to reinstatement and full backwages. June 9. Art. Definitions. 97. Tanongon spouses denied that Culla was their employee. This court agrees because the guards are not employees of the petitioner but are contractual employees of Odin working for PFD therefore under the scope of the NLRC. Coverage Book III Rule VII SECTION 3. The period of apprenticeship shall not exceed six months. all government-owned or controlled corporations and institutions. 61. His quarters were forced open without his consent and he was ejected from his living quarters there and was dismissed by the spouses. Fisheries Development Authority v. Contents of apprenticeship agreements. NLRC PFD entered into a contract with Odin Security Agency for the security services of its Iloilo Fishing Port which was renewable unless terminated by either party. Odin and PFD are held jointly and severally liable (1/2. The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. janitorial and similar service contracts prompting the respondents asked for an adjustment of the contract. Thus. Wage order number 6 was enforced. e. 1986) Art. "Fair and reasonable value" shall not include any profit to the employer.  Phil. "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches. Executive Order No. 98. Art. (As amended by Section 1. 111. which was ignored by the petitioners. Culla was hired by the Tanongon spouses to work as a mechanic. The employees must be guaranteed wages due them for the performance of any work and it is the Odin as the employer’s duty to know the labor laws and adequacy of compensation. 6 into consideration. Learnership agreement. 1989).N.employer to the employee. shop manager. Odin filed a complaint for unpaid amounts of re-adjustment rate under Wage Order No. Minimum Wage 44 . Arms Taxi v. NLRC reversed. Also. as well as nonprofit private institutions. 3. ½ because Odin entered into a contract without taking Wage O. increasing the wages for security. Regional minimum wages. 6. subdivisions and instrumentalities. If it were true that he had commission he must show memorandum to prove it and he should not have waited for 6 years to claim it.

Petitioners now ask that the allowances they received on a monthly basis should be included in the computation of their separation pay. vocational or technological education. The voucher shall not be transferable except when the payee thereof dies or for a justifiable cause stops in his duties in which case it can be transferred to his brothers or sisters. piece. however designated. which agreement shall include: 1. The receipt of an allowance does not ipso facto characterize it as regular and forming part of the salary. According to Art 97.f of the LC defining wage. PROHIBITING AND PENALIZING THE FILING OF FRAUDULENT OR FICTITIOUS CLAIMS AND FOR OTHER PURPOSES Section 2. Iran noted that there were cash shortages and disallowed employees to go on their respective routes. NLRC affirmed the validity of dismissal but said that the same did not comply with proper procedure and that commissions are not included in the minimum wage already given and thus still demandable. Sixty per centum (60%) of said salary or wage shall be paid by the employer in cash and forty per centum be applicable in the payment for his tuition fees and books in any educational institution for secondary. If there be none. 97. 97 (f) c. tertiary. Facilities and Supplements or Allowances Book III Rule VII Sec 4-7  Millares v. The commission earned by private respondents selling soft drinks must be considered part of the wages paid them there is no law mandating that the commissions should be given AFTER the wage as contended by the NLRC. Also. Determination of Compliance with minimum wage Antonio Iran is engaged in Softdrinks merchandising and distribution in Cebu and they employ truck drivers who double as salesmen who receive commissions per case sold. the disputed allowance was not regularly received by petitioners and thus there is really no reason for petitioners to claim what is not part of their salary. Iran presented vouchers signed by the employees showing payment of 13 th month pay while respondents claim that they were illegally dismissed. remanded to the LA for determination of proper wages. petitioners contend that the allowances are part of the definition of “facilities” in 97. b. Cash Wage/ Commission Art. The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage. "Wage" paid to any employee shall mean the remuneration or earnings. NLRC and PICOP Petitioners are the 116 workers of Paper Industries Corp (PICOP) who were terminated in the retrenchment of the respondents due to major financial setbacks.Art. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. The names and addresses of the handicapped workers to be employed. The decision is reversed and set aside. or other method of calculating the same. 14 RA 7323 of 1992 AN ACT TO HELP POOR BUT DESERVING STUDENTS PURSUE THEIR EDUCATION BY ENCOURAGING THEIR EMPLOYMENT DURING SUMMER AND/OR CHRISTMAS VACATIONS. the amount thereof shall be paid his heirs or to the payee himself. Wage Order NO. Definitions. The amount of the education voucher shall be paid by the government to the educational institution concerned within thirty (30) days from its presentation to the officer or agency designated by the Secretary of Finance. vouchers presented only cover 1 year and thus are admissible only for that year. as the case may be. As used in this Title: f. commissions are part of wages. THROUGH INCENTIVES GRANTED TO EMPLOYERS. Also. They stopped reporting for work and Iran construed this as abandonment of post and he filed estafa charges against them. or commission basis. whether fixed or ascertained on a time. Petition Dismissed. Any employer who employs handicapped workers shall enter into an employment agreement with them. Both parties appealed to NLRC. f. capable of being expressed in terms of money. NLRC a. LA ruled for Iran but ruled that the 13th month pay was not paid. While conducting an audit. 2. Book III Rule VII  Iran v. or for 45 . Complaints were filed against Iran for illegal dismissal and underpayment of wages. The court here clarifies that the retrenchment pay under 283 is not synonymous to “wage” in Art 97f. In this petition for certiorari. 80. ALLOWING THEM TO PAY ONLY SIXTY PER CENTUM OF THEIR SALARIES OR WAGES AND THE FORTY PER CENTUM THROUGH EDUCATION VOUCHERS TO BE PAID BY THE GOVERNMENT. Employment agreement. task. LA granted the petition and NLRC reversed said decision by decreeing that allowances are not part of the salary base in computing the separation pay.

5 provided an across the board increase in salary and they incurred a 1 peso deficiency after implementing Wage order No. AND that the gratuity pay should be computed at 26 days because workers do not work on Sundays and Holidays. although similar to Sales commission (both being incentives) are tied to productivity or profit generation whereas sales commissions are directly proportional to the extent or energy of the employees endeavors such as in the case of BT and PD. Petitioner argues that Wage order No. Productivity bonuses. 1984) the increase. Thus this petition for reconsideration submitting that the decision in Boie Takeda has reversed the decision of Philippine Duplicators and should thus be applicable in their case. The court rules for BT.services rendered or to be rendered and includes the fair and reasonable value. Also. 4’s implementation to help their employees. 4 provided for the integration of the mandatory emergency cost of living allowances into the basic pay. NLRC affirmed this order and the petition for certiorari was dismissed. Petitions Granted. Regional Director issued the order of payment/ BT filed a motion for reconsideration which the Labor Secretary ruled on. Boie Takeda v. allowances etc which they receive every month. affirming the regional director. lodging. or other facilities customarily furnished by the employer to the employee. Labor Dept issued a notice of inspection results which was disputed by BT expressing that commissions are not part of the basic or regular pay of their med reps. NLRC d. 5 provided for a 3 peso increase to the basic salary of the employees. Differences  Plastic Town Center Corp (PTCC) v. Union appealed to NLRC which reversed LA’s decision. Petition is denied. the interpretation of basic salary in PD 851 should be followed in memorandum 28 which is “rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime”. NLRC as the prevailing doctrine wherein it said that “computation of backwages and separation pay should include transportation and emergency living allowances.” As for commissions. as determined by the Secretary of Labor and Employment. filed with DOLE an application to terminate Jose Songco. PD did not raise the issue of the validity of the 13 th month pay law as issued by Franklin Drilon and that the doctrines in the two cases actually co-exist. Songco v. These salesmen’s commissions form part of the definition of basic salary. Sales commissions received for every duplicating machine sold are part of the basc compensatin of the salesmen of Philippine Duplicators in doing their job and that these are not over time payments or profit sharing payments not any other benefit. Hence this petition.4 and thus advanced (to May 1. A bonus is a gratuity or act of liberality on the part of the giver which the recipient has no right to demand. 2 months before Wage order No. Petition is Granted. De La Serna  LA directed petitioner to pay 13th month pay to private respondent employees plus the sales commissions. of board. or to any person affiliated with the employer Book III Rule VII-A Section 1  F. LA excluded the commissions and NLRC dismissed the appeal. Therefore. Hence this petition. Gratuity and Salary/ Wages. contended that they are no longer contesting their dismissal but rather wanted to receive separation pay including the commissions. The petitioners opposed this claiming that the company is not suffering from any losses but later on. 46 . Inc. Cipres and Manuel on the gound of retrenchment.E. Zuelig M. the court held that commission is not part of the basic salary but is the reward of an agent or salesman and that the nature of his job as a salesman demonstrates that such type of remuneration is part of their salary. 5 and unfair labor practices by giving only 26 days of pay instead of 30 as gratuity pay. the court used Santos v. LA ruled for PTCC sating that the 1 peso increase was ahead of the implementation of the CBA and thus the LA cannot fault PTCC for a refusal for a 2 nd increase. The court said that Boie Takeda is not a precedent under stare decisis and that the petirion of PD has been decided with finality. For allowances. NLRC  A routine inspection was conducted in the premises of Boie Takeda Chemicals and it was found that BT had not been including the commissions earned by its medical representatives in the computation of their 13th month pay. Duplicators v. NLRC+Nagkakaisang Lakas ng Manggagawa (NLM) NLM Katipunan filed a complaint for violation of wage order No. "Fair and reasonable value" shall not include any profit to the employer. Wage order No. Wage order No. Motion for reconsideration was denied and thus this petition. Memorandum 28 issued by Corazon Aquino did not repeal PD 851 but rather merely modified Sec 1 of PD 851 removing the P1k salary ceiling. Phil.

Article 99 of Presidential Decree No. 123. 124. Prohibition Against Injunction. LA and NLRC ruled for ALU. Art. to read as follows: "Art. (As amended by Republic Act No. vacation. Creation of National Wages and Productivity Commission. the increase on May 1 was not a July increase but a May increase and that complying with the wage orders does not relieve them of their obligations in the CBA. Grant of this pay is not mandatory and thus s not part of salary but a reward for the employee. Art 100. Court dismissed the petition because it was devoid of merit. Agencies in Wage Fixing Machinery a. Art 120-127 Book III Rule IX Wage Studies and Determination Wage order No. to guarantee the rights of labor to its just share in the fruits of production. B. Thus this petition for review. The Commission shall have the following powers and functions: 2. expansion and growth. 1989). 121. Prohibition against elimination or diminution of benefits. 100. maternity leaves. hereinafter referred to as the Commission. June 9. Wage Order "Art. Sec 3 Sec. or other employee benefits being enjoyed at the time of promulgation of this Code. 123. petitioner had freely and continuously included these in their computation and this practice had ripened into a benefit which cannot b reduced or eliminated by the employer (Sec 10 IRR PD 851. Davao Fruits Coporation v. Non-Diminution of Benefits. 121. it is not intended to pay the worker for actual service rendered but it is supposed to “reward employees or laborers who have rendered satisfactory and efficient service o the company”. WAGE FIXING MACHINERY RA 6727. NLRC+ Associated Labor Unions (ALU) Sec.The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. 126 and 127. . "Art. 120. Standards/Criteria for Minimum Wage Fixing "Art. as amended. 122. 124. is hereby amended and Articles 120. 99.Sec 3 of the CBA provides that increases shall be granted against future allowances or wage orders and thus." "Art. Basic salary under IRR of PD 851 includes all “remunerations or earnings paid by the employer to the employee but excludes cost of living allowances. Art. There is hereby created a National Wages and Productivity Commission. Powers and functions of the Commission. In line with the declared policy under this Act. From 1975 to 1981. LC). Creation of the National Wages and Productivity Commission "Art. e. profit sharing payments and all allowances and monetary benefits which have not been considered as part of the basic salary” such as fringe benefits or allowances. 120. Rationale for Wage Rationalization (6727. Creation of Regional Tripartite Wages and Productivity Boards "Art. are hereby incorporated into Presidential Decree No. 3. Sec 2) Art. Petition dismissed NLRC affirmed. 122. as amended. It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families. Powers and Functions of the Commission "Art. 442. National Wages and Productivity Commission 47 . 121. 126. rest day and holidays. Effect on Benefits  ALU filed a complaint against Davao Fruits for payment of the 1982 13 th month pay differentials of DFC’s employees equivalent to sick. 6727. which shall be attached to the Department of Labor and Employment (DOLE) for policy and program coordination. As for the gratuity pay. which had been the practice of the company since 1975. Solution indebiti cannot be invoked because it is a concept in civil law and also because it did not demand the return of the wages mistakenly paid but rather rectify the mistake. Regional Minimum Wages. and to allow business and industry reasonable returns on investment. Nothing in this Book shall be construed to eliminate or in any way diminish supplements. to enhance employment generation in the countryside through industry dispersal. 2. Petitioner claimed that it has erroneously added these and the mistake was only discovered in 1981. NCR-14 1. 127. 442.

workers and employers for the consideration of measures to promote wage rationalization and productivity. To formulate policies and guidelines on wages. 6727. b.a. and i. 126) Region I (ILOCOS REGION) Region II (CAGAYAN VALLEY) Region III (CENTRAL LUZON) Region IV (CALABARZON & MIMAROPA) Region V (BICOL REGION) Region VI (WESTERN VISAYAS) Region VII (CENTRAL VISAYAS) Region VIII (EASTERN VISAYAS) Region IX (ZAMBOANGA PENINSULA) Region X (NORTHERN MINDANAO) Region XI (DAVAO REGION) Region XII (SOCCSKSARGEN) Region XIII (CARAGA) AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM) 48 . 6727. Regional Tripartite Wages and Productivity Board (3. 126. To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards. while the Deputy Directors shall have the same rank. To undertake studies. allowances and other benefits as those prescribed by law for labor and management representatives in the Employees’ Compensation Commission. d. upon the recommendation of the Secretary of Labor and Employment. 6727. who shall be appointed by the President of the Philippines. employment. 122. June 9. 1989) Art. c. researches and surveys necessary for the attainment of its functions and objectives. incomes and productivity. and two (2) members each from workers’ and employers’ sectors who shall be appointed by the President of the Philippines upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees submitted by the workers’ and employers’ sectors. (As amended by Republic Act No. a national tripartite conference of representatives of government. or industry levels. To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans. from time to time. Non-diminution of benefits. 1989) Art. 127. To call. salary. salary. The members of the Commission representing labor and management shall have the same rank. The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman. No wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress. To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages. 1989) Regions: b. investments and returns. The Executive Director shall have the same rank. h. benefits and other emoluments as that of a Department Assistant Secretary. June 9. To exercise such powers and functions as may be necessary to implement this Act. Prohibition against injunction. respectively. emoluments. (As amended by Republic Act No. industry and national levels. incomes and productivity improvement at the enterprise. but not limited to. labor costs. No preliminary or permanent injunction or temporary restraining order may be issued by any court. benefits and other emoluments as that of a Bureau Director. provincial. e. including. cost-of-living. June 9. the DirectorGeneral of the National Economic and Development Authority (NEDA) as exofficio vice-chairman. The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors. f. g. and to collect and compile data and periodically disseminate information on wages and productivity and other related information. To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans. (As amended by Republic Act No. To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional. and who shall serve for a term of five (5) years. The Executive Director of the Commission shall also be a member of the Commission. tribunal or other entity against any proceedings before the Commission or the Regional Boards.

That the Regional Boards shall have technical supervision over the regional office of the Department of Labor and Employment with respect to the implementation of said plans. (As amended by Republic Act No. To undertake studies. To determine and fix minimum wage rates applicable in their regions. Regional Minimum Wages. respectively. In line with the declared policy under this Act. Powers and Functions of the Commission "Art. and who shall serve for a term of five (5) years. 6727. c. letter (a) of this Article. Creation of Regional Tripartite Wages and Productivity Boards "Art. Implementation of the plans. . subject to guidelines issued by the Commission. programs and projects relative to wages. 3. 121. 122. is hereby amended and Articles 120. 123. 127. 122. 124. Creation of the National Wages and Productivity Commission "Art. The Commission shall determine the offices/headquarters of the respective Regional Boards. and to collect and compile data on wages. incomes. however." "Art. Creation of Regional Tripartite Wages and Productivity Boards. objectives and programs. 1989) 49 . provinces or industries therein and to issue the corresponding wage orders. d. June 9. To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code. are hereby incorporated into Presidential Decree No. 126. upon the recommendation of the Secretary of Labor and Employment. 99. b. Standards/Criteria for Minimum Wage Fixing "Art. Prohibition Against Injunction. the Regional Directors of the National Economic and Development Authority and the Department of Trade and Industry as vice-chairmen and two (2) members each from workers’ and employers’ sectors who shall be appointed by the President of the Philippines. 126 and 127. and projects of the Regional Boards referred to in the second paragraph. Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. productivity and other related information and periodically disseminate the same. Provided. Wage Order "Art. The Regional Boards shall have the following powers and functions in their respective territorial jurisdictions: a. 120. 121. 123. to be made on the basis of the list of nominees submitted by the workers’ and employers’ sectors. "Art. There is hereby created Regional Tripartite Wages and Productivity Boards. shall be through the respective regional offices of the Department of Labor and Employment within their territorial jurisdiction.agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. hereinafter referred to as Regional Boards.The minimum wage rates for agricultural and non. 124. to read as follows: "Art. as amended. programs. and surveys necessary for the attainment of their functions. process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order. programs and projects. as amended. To exercise such other powers and functions as may be necessary to carry out their mandate under this Code. To receive. Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman. Article 99 of Presidential Decree No. To develop plans. Non-Diminution of Benefits. e. including autonomous regions as may be established by law. Art.CORDILLERA ADMINISTRATIVE REGION (CAR) NATIONAL CAPITAL REGION (NCR) Sec. researches. 122. 442. and f. 442. in all regions. incomes and productivity improvement for their respective regions.

b. The needs of workers and their families. WON guidelines by an RTWPB without approval of NWPC is valid. logging moratorium in Bukidnon Unions claimed that company was not distressed since capitalization has not been impaired by 25% The RTWPB approved the exemption but granting them only temporary reprieve as stated in Guideline No. 120. Nasipit Lumber Co. Watershed Corp jointly filed an application for exemption to Wage Order No. is hereby amended and Articles 120. Prohibition Against Injunction." "Art. The equitable distribution of income and wealth along the imperatives of economic and social development. Wage Order "Art. Creation of Regional Tripartite Wages and Productivity Boards "Art. Wage adjustment vis-à-vis the consumer price index. 122. Fair return of the capital invested and capacity to pay of employers. h. Thus this petition. The cost of living and changes or increases therein. and Phil. Standards/Criteria for minimum wage fixing. 127. are hereby incorporated into Presidential Decree No. efficiency and general wellbeing of the employees within the framework of the national economic and social development program. NO. 124. 442. It is said that the commission does not approve rules implementing wage orders issued by the RTWPB. RA 6727 amended LC and grants NWPC power to prescribe rules and guidelines for determination of minimum wage and productivity measures 2. Insertion of Guideline of ‘distressed industry’ as criterion for exemption is void: irregularly takes away mandated increase in minimum wage awarded to workers ALCO application approved: sustained capital impairment of 28. 124) Sec. Nasipit applied for exemption from Wage Orders issued by Region 10 Board due to: 1. 3. 442. imposition of environmental fee for timber production in addition to regular forest charges 4. 121. Improvements in standards of living. v. 124. NWPC never assented to Guideline No. Creation of the National Wages and Productivity Commission "Art. 121. 123. 50 . Respondents appealed with NWPC and it affirmed ALCO’s application but reversed the two others. Anakan Lumber Co. i. 99. In line with the declared policy under this Act. RTWPB has power to issue wage orders but subject to rules on Minimum Wage Fixing 3. c. The prevailing wage levels. . as amended. 123. among other relevant factors. Regional Minimum Wages. 122. Standards or Criteria for Minimum Wage Fixing (3. 126 and 127. The need to induce industries to invest in the countryside. The demand for living wages. Standards/Criteria for Minimum Wage Fixing "Art. 3 4. 3. as amended. g. Non-Diminution of Benefits. RX-01 and 01-A (issued by Region Tripartite Wages and Productivity Board) which increased the minimum wage by 11 to 13 pesos. e. and j. National Wages and Productivity Commission (NWPC) and the Unions Art. consider the following: a. Effects on employment generation and family income. 126. 124. the Regional Board shall.The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health. 1. d. "Art. Nasipit Lumber Co. f. 3.72%. Petition dismissed. peace and order and other related problems causing disruption and suspension of normal logging operations 3. to read as follows: "Art. In the determination of such regional minimum wages. Article 99 of Presidential Decree No. Powers and Functions of the Commission "Art. depressed economic activities due to worldwide recession 2.

Powers and Functions of the Commission "Art. Regional Minimum Wages. or other logical bases of differentiation. Creation of Regional Tripartite Wages and Productivity Boards "Art. to read as follows: "Art. 442. 126 and 127. 99. 123. All workers paid by result. 3. a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills. as amended. 124. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and. 442. 4. The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of law or wage order. as amended. 121. Standards/Criteria for Minimum Wage Fixing "Art. partnership or any other entity engaged in business shall file and register annually with the appropriate Regional Board. . 126. 122. All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their wage clauses are concerned to reflect the prescribed wage rates. corporation. specifying the names of their workers and employees below the managerial level. June 9.The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every region. is hereby amended and Articles 120. the employer and the union shall negotiate to correct the distortions. such dispute shall be decided by the voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration. provinces or localities if in the judgment of the Regional Board. Non-Diminution of Benefits. pakyaw or task basis. Any person. an itemized listing of their labor component. 122. 1989) Sec. shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). if it remains unresolved after ten (10) calendar days of conciliation. 123-124) 51 . length of service. 120. Wage Order "Art. 121. (As amended by Republic Act No. Prohibition Against Injunction. company. including learners. Unless otherwise agreed by the parties in writing. Commission and the National Statistics Office. the employers and workers shall endeavor to correct such distortions. 6727." "Art. 127. if it remains unresolved. or a proportion thereof for working less than eight (8) hours. takay. "Art. In cases where there are no collective agreements or recognized labor unions. Creation of the National Wages and Productivity Commission "Art. In line with the declared policy under this Act. These wages shall include wages varying with industries. shall receive not less than the prescribed wage rates per eight (8) hours of work a day. apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment contracts. Article 99 of Presidential Decree No. Wage Order (3. through voluntary arbitration. and their corresponding salaries and wages. 124.The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. conditions make such local differentiation proper and necessary to effectuate the purpose of this Title. are hereby incorporated into Presidential Decree No. Where the application of any prescribed wage increase by virtue of a law or wage order issued by any Regional Board results in distortions of the wage structure within an establishment. It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration. As used herein. 123. including those who are paid on piecework.

Shift to this kind of salary method is brought about by labor disputes arising from wage distortions (brought about by the floor wage method)  Employers Confederation of the Phil v. ECOP claims that RA6727 may only prescribe minimum wages and not determine salary ceiling. R02-03 which raised the wage P15. In this case. 1989) - ECOP is questioning the validity of Wage Order No. provincial. 01-A of the RTWPB pursuant to RA 6727 which amended No. Methods of Fixing (According to Employer’s Confederation case) i.Art. v. In the performance of its wage-determining functions. 01 by not only increasing the minimum wage by 17 pesos but also entitling the employees receiving P125 and above to the said order. Pet filed a petition for certiorari and prohibition with the CA asking to nullify the wage order claiming that RTWPB acted without authority in issuing said order and that implementing it will cause the petitioner and similarly situated employers to incur huge financial losses and eventually labor unrest. an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase. In a letter inquiry to the NWPC. National Wages and Productivity Commission RTWPB Tuguegarao issued Wage Order No. (As amended by Republic Act No. the Regional Board shall investigate and study all pertinent facts. Wage Order. a. Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such order. BCPM asked for interpretation on the applicability of the wage order. it seems that Congress has delegated the power to fix rates to the commission and that the Commission has correctly upheld the Board’s decision in this case. The Solicitor General argued that RA 6727 is intended to correct wage distortions through the salary ceiling method. giving notices to employees’ and employers’ groups. It insists that wage fixing is a legislative function and that the boards may adjust only floor wages. b. It shall be mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing thereof. Validity  Metropolitan Bank and Trust company Inc. The state is concerned woth distributing wages more evenly. June 9. NWPC replied that they are not under the exemptible categories. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of general circulation in the region. In this petition the court held that the constitution protects that rights of the workers and ECOP is mistaken in interpreting RA 6727 in empowering management to decide the wages. In a letter inquiry.00 across the board. The statute would have no need of a board if the only question to be solved is “how much”.) Floor Wage method fixing of determinate amount that would be added to the prevailing statutory minimum wage ii. the Regional Board shall conduct public hearings/consultations. city and municipal officials and other interested parties.) Salary-ceiling or Salary Cap method wage adjustment is applied to employees receiving a certain denominated salary ceiling (RA 6640 and 6727). 6727. in the event such order is affirmed. ECOP appealed to the NWPC and this was dismissed for lack of merit. shall proceed to determine whether a Wage Order should be issued. Whenever conditions in the region so warrant. NWPC referred the inquiry to the RTWPB who said that the wage order covers all private establishments in Region II regardless of the adoption of the establishments of wage orders in Metro Manila. National Wages and Productivity Commission and Regional Tripartite Wages and Productivity Board 52 . and based on the standards and criteria herein prescribed. The filing of the appeal does not stay the order unless the person appealing such order shall file with the Commission. The Banker’s Council for Personnel Management (BCPM) in behalf of its member banks requested for an exemption from the wage order since the member banks are already paying for more than the minimum wage rate in the NCR which is the principal place of their business. 123. The petition is denied. OSG affirmed the petitioner’s claim.

Article 99 of Presidential Decree No. 442. c. as amended. 126 and 127." "Art. Wages per region depends on the situation per region as determined by the RTWPB as explained in RA 6727. The matter was submitted to a voluntary arbitration which held that there was a wage distortion. and P. Mabolo. Prubankers Association wanted to extend the application of the order to its employees outside regions V and VII claiming that regional implementation resulted in a wage distortion. In the present case however. del Rosario branches. Creation of Regional Tripartite Wages and Productivity Boards "Art. it exceeded its authority. In line with the declared policy under this Act.  Prubankers Association v. In simply increasing P15 across the board.agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. Quantitative difference in compensation between different pay classes remained the same in all branches in the affected region Disparity in wages between employees holding similar positions but in different regions does not constitute wage distortion but is expected by the law. 3. 123. "Art. it was held that there was no wage distortion Thus this petition for review on certiorari. to read as follows: "Art. On an appeal to the CA. are hereby incorporated into Presidential Decree No. Prudential Bank and Trust Co. 123. 442.Ca denied the petition saying that the wage order had long become fait accompli and that no appeal from the said wage order was done during the time allotted (10 days from publication of order as shown in Sec 13 of the wage order). issuance become VOID not only for being ultra vires but for being unreasonable.The minimum wage rates for agricultural and non. 124. is hereby amended and Articles 120. Creation of the National Wages and Productivity Commission "Art. Wage Order "Art.50 to its Naga branch employees pursuant to Wage Order RB 05-03 (issued by RTWPB which provided for COLA to workers of the private sector who had rendered services for at least 3 months before its effectivity). 120. 124. 126. as amended. When the application of administrative issuances modifies existing laws by exceeding the intended scope. Non-Diminution of Benefits. Petition partially granted. Wage distortion arises when a wage order engenders wage parity between employees in different rungs of the organizational ladder of same establishment Wage distortion involves four elements: • an existing hierarchy of positions with corresponding salaries • a significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one • elimination of the distinction between the 2 levels • existence of the distortion in the same region of the country RA 6727 recognizes that there are different needs for the different situations in different regions. Petitioner granted a Cost Of Living Allowance of 17. 99. Wage order is void as to employees who receive more than the prevailing minimum wage. The fact that a person is receiving more in one region does not mean that she/he is better off than a person in another region. Petition denied. 121. 53 . Wage Distortion (3. Issue: WON there was wage distortion Held: NO. Prohibition Against Injunction. 127. 122. . 122. Powers and Functions of the Commission "Art. RA 6727 gives RTWPB the authority to fix minimum wage rates as applicable in their respective regions. 124) Sec. 121. Regional Minimum Wages. the RTWPB did not set a wage level (floor wage method) or set a range to which a wage adjustment or increase shall be added (salary-ceiling method). It also integrated 150 per month COLA into the basic pay of its rank-and-file employees at its Cebu. Standards/Criteria for Minimum Wage Fixing "Art.

presidential decrees.CC The laborer's wages shall be paid in legal currency. vice-president. Sec 1-2 SECTION 1. including. or both such fine and imprisonment at the discretion of the court: Provided. Penalty for violation (RA 8188) AN ACT INCREASING THE PENALTY AND INCREASING DOUBLE INDEMNITY FOR VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENT IN THE WAGE RATES. No wage order shall be construed to prevent workers in particular firms or enterprises or industries from bargaining for higher wages with their respective employers. vouchers. WAGE PAYMENT AND PROTECTION 1. "The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided. SECTION 3. the president. general manager. association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine not less than Twenty-five thousand pesos (P25." SECTION 2. 1989) 5. Freedom to bargain. promissory notes. All laws. AMENDING FOR THE PURPOSE SECTION TWELVE OF REPUBLIC ACT NUMBERED SIXTY-SEVEN HUNDRED TWENTY-SEVEN. Payment by check. 125. where it is so stipulated in a collective agreement. managing director or partner. SECTION 2. corporation. trust. That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law. Any person. 54 . — As a general rule. 2nd par) 6. or any object other than legal tender. firm. executive orders. — Payment of wages by bank checks. Book III. 6727. 102. Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code. tokens. Rule VIII. chits. rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Manner of wage payment. or any other form alleged to represent legal tender is absolutely prohibited even when expressly requested by the employee. postal checks or money orders is allowed where such manner of wage payment is customary on the date of the effectivity of the Code. Freedom to Bargain (6727. 1705. C. chief executive officer. That payment of indemnity shall not absolve the employer from the criminal liability imposable under this Act. partnership. Section 12 of Republic Act Numbered Sixty-seven hundred twenty-seven is hereby amended to read to as follows: "Section 12.000) or imprisonment of not less than two (2) years nor more than four (4) years. but not limited to. This Act shall take effect fifteen (15) days after its complete publication in a newspaper of general circulation. partnership. Form of Payment Art. or where all of the following conditions are met: (a) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace. Sec 2. No employer shall pay the wages of an employee by means of promissory notes. coupons. June 9. or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.000) nor more than One hundred thousand pesos (P100. trust or firm. association or any other entity the penalty of imprisonment shall be imposed upon the entity's responsible officers. "If the violation is committed by a corporation. even when expressly requested by the employee.*establishment (NWPC Guideline No 1) an economic unit which engages in one or predominantly one kind of economic activity with a single fixed location Art. coupons. vouchers. OTHERWISE KNOWN AS THE WAGE RATIONALIZATION ACT SECTION 1. (As amended by Republic Act No. tickets. wages shall be paid in legal tender and the use of tokens. Forms of payment.

Place of payment. wages shall be paid only by means of legal tender. NLRC Art. in the absence of a collective bargaining agreement or arbitration award: 1. payment of wages on or within the time herein provided cannot be made. — (a) Wages shall be paid not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. 104. except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages. holiday pay. They were paid P1 per tuna weighing 30 to 80 kilos. and (d) The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks. Time of payment. the place of payment shall be at or near the place of undertaking. Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. payment shall be made at intervals not exceeding sixteen days in proportion to the amount of work completed. they had been replaced. in proportion to the amount of work completed. Time of Payment Book III. Rule VIII SECTION 3. Place of Payment Book III. 2. When they reported for work the next day. (c) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done during working hours. No employer shall make payment with less frequency than once a month. nonpayment of overtime pay. unless payment cannot be made with such regularity due to force majeure or circumstances beyond the employer's control in which case the employer shall pay the wages immediately after such force majeure or circumstances have ceased. 3.  Dominico Congson is the owner of Southern Fishing Industry and Respondents are hired as piece rate workers. for constructive dismissal as well as for violation of the minimum wage law alleging that with the petitioner’s rates and the scarcity of tuna. That final settlement is made upon completion of the work. Congson v. Thus this petition. Rule VIII SECTION 4. (b) In case of payment of wages by results involving work which cannot be finished in two (2) weeks. — As a general rule. They filed a case for underpayment of wages. Petitioners claim that they paid the respondents with up to 3 kilos of the valuable liver and intestines of the tuna which is highly convertible to cash (15 to 20 pesos per kilo). 2. 103. this exceeds the minimum wage. Court explains that as stated in Art 102 of the LC. That payments are made at intervals not exceeding sixteen (16) days. Art. Time of payment. The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall be subject to the following conditions. LA ruled for respondents (illegally dismissed!) and NLRC affirmed this decision. 5 day incentive leave pay. Place of payment. Petitioner announced that it will reduce the rate-per-tuna and Respondents resisted the said reduction.(b) The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from the arrangement. Combined with the per-tuna rate. Payment in a place other than the work place shall be permissible only under the following circumstances: 55 . If on account of force majeure or circumstances beyond the employer’s control. Payment of wages shall be made at or near the place of undertaking. Final settlement shall be made immediately upon completion of the work. Petitioners claim that the respondents abandoned their work for 1 month and that they failed to return to work when asked. the employer shall pay the wages immediately after such force majeure or circumstances have ceased. They unloaded the fish from the fishing boats to the truck haulers then unloaded them again at the cold storage plant of the petitioner. NLRC affirmed. The only instance when an employer is permitted to pay wages in forms other than legal tender is by checks or money order. their earnings did not exceed P1k a month. restday pay.

That the time spent by the employees in collecting their wages shall be considered as compensable hours worked. (b) When the employer provides free transportation to the employees back and forth. In cases of force majeure rendering such payment impossible or under other special circumstances to be determined by the Secretary of Labor and Employment in appropriate regulations. except: a. or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places. the worker may be paid through another person under written authority given by the worker for the purpose. they shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs to the exclusion of all other persons. dance hall. to the exclusion of all other persons. he shall make payment to the heirs as representative of the Secretary of Labor. Rule VIII SECTION 5. and (c) Under any other analogous circumstances. The claimants. 4. the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs. if they are all of age. or by reason of actual or impending emergencies caused by fire.  Case was originally instituted by the Democratic Labor Association and the Katubsanan sa Mamumuo in the CIR praying for reinstatement with backwages and direct payment to the workers rather than to the union. the affidavit shall be executed on his behalf by his natural guardian or next-of-kin. In case any of the heirs is a minor. The affidavit shall be presented to the employer who shall make payment through the Secretary of Labor and Employment or his representative. The payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid. (d) No employer shall pay his employees in any bar. Person to Pay Book III. The unions are laborers from Visayas and Mindanao who load and unload vessels in cebu and have respondent Jose Muana and Vitaliano Sabay as general president and gen treasurer Bermiso v. night or day club. Wages of deceased employee. Escano. — The payment of the wages of a deceased employee shall be made to his heirs without the necessity of intestate proceedings. SECTION 6. CIR found that Hijos de F. or (c) In case of death of the employee as provided in the succeeding Section. epidemic or other calamity rendering payment thereat impossible. Upon presentation of the affidavit to the employer. Inc. in which case. (b) Where payment to another person of any part of the employee's wages is authorized by existing law. Escano is a corporation engaged in transporting people and goods for compensation. — Payment of wages shall be made direct to the employee entitled thereto except in the following cases: (a) Where the employer is authorized in writing by the employee to pay his wages to a member of his family. If any of the heirs is a minor. flood. Direct payment of wages. Art. The representative of the Secretary of Labor and Employment shall act as referee in dividing the amount paid among the heirs. Where the worker has died. Provided. including payments for the insurance premiums of the employee and union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the individual employees concerned. Direct payment of wages. When the heirs are of age. 105. drinking establishment. 56 . or b. et al. such affidavit shall be executed in his behalf by his natural guardian or next of kin. in which case. massage clinic. Wages shall be paid directly to the workers to whom they are due.(a) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions.

and the deduction is to recompense the employer for the amount paid by him as premium on the insurance. materials. That the latter does not receive any pecuniary benefit. Respondents admitted the money due to the petitioner but said that the same was offset to the unpaid balance of his subscription. CIR ordered the reinstatement of the SABAY group but without backwages . in his own behalf or in behalf of any person. Art. No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. or oblige his employees to purchase merchandise. and c. Wage deduction. WAGE PROHIBITIONS Prohibition against interference in disposal of wages Book III Rule VIII SECTION 12. Art. except: a. Futhermore. The court found that the workers are employees of Escano.500. There was also no evidence that racketeering was employed by the unions. from the transaction. including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself. 112. D. gasoline etc. He shall not in any manner force. Deposits for loss or damage. SECTION 12. No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools. compel. However. or otherwise make use of any store or services of such employer or any other person. Petition denied. — Deductions from the wages of the employees may be made by the employer in any of the following cases: (a) When the deductions are authorized by law. b. thus this petition wherein it is held that the NLRC has NO jurisdiction to resolve a claim for nonpayment of stock subscriptions to a corporation. shall make any deduction from the wages of his employees. NLRC + Jose Mirasol+ Intrans Phil Corp 57 . he instituted a complaint with the NLRC for payment of unpaid wages. except when the employer is engaged in such trades. One of these chapters are headed by Sabay (SABAY group). — No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize any store or avail of the setrvices offered by any person. directly or indirectly. commodities or other property from any other person. cost of living allowance. Petition granted. He resigned in 1986. in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned. Apocada v. Provided. Wage deduction. 114. Thus this petition for certiorari. Mirasol persuaded him to subscribe to 1. No employer. there is no ground for escano to pay backwages. They were collected by the group from the shippers themselves. NLRC ruled for the co. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. or equipment supplied by the employer. Non-interference in disposal of wages. Non-interference in disposal of wages. the work of stevedoring was taken as a group and not as individuals. the unpaid subscriptions are not yet due and demandable and such setoff was without lawful basis. Escano did not pay for the stevedoring charges.respectively. Its members in cebu are numerous and divided to chapters. Prohibition against requirement to make deposits for loss or damage Art. On 1975. Furthermore. In cases where the worker is insured with his consent by the employer. This jurisdiction belongs to the SEC. Prohibition against wage deduction  Ernesto Apocada is employed in Intrans. Book III Rule VIII SECTION 13.500 shares of the corporation at 100 per share (150k). That same year. For union dues. Petitioner said that he was not even informed or notified for the unpaid subscription and thus the obligation is not enforceable. He made an initial payment of 37. 113. (b) When the deductions are with the written authorization of the employees for payment to the third person and the employer agrees to do so. Apocada was appointed President and General Manager of the Company.

Court held that 1k salary ceiling in PD 851 pertains to basic salary and not monthly compensation and that in invoking exemption. the company said that these have been given to a certain carinderia to pay for the outstanding accounts of private respondents. LA ruled for reinstating complainants and NLRC affirmed LA. and his responsibility has been clearly shown. Maldigan: allegedly working with Mine of Gold Sabsalon: allegedly working with Bulaklak Company after not reporting for work after a holdap incident while driving taxi. Refund! Petition dismissed. — Where the employer is engaged in a trade. No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon. They were dismissed: allegedly because of union activities (Confederation of Citizens Labor Union) They wanted to get their 13 th month pay as well as refund of cash bond filed. upholsterers. or is necessary or desirable as determined by the Secretary of Labor and Employment in appropriate rules and regulations. under the same PD. (c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage. Art. Case was elevated to the Supreme Ct. 28 (eliminating 1k salary ceiling) does not apply to the case since it was enforced long after he case was instituted. They cited PD 851 saying that they are receiving more than 1k per month and thus they are entitled (under the PD) to 13th month pay. Company failed to show that it is authorized by law to require workers to file cash bond. Book III Rule VIII SECTION 14. 115. and painters of company making dental equipment. the company must be deemed qualified after prior authorization from the Secretary of Labor and Employment. (b) That the employee is given reasonable opportunity to show cause why deduction should not be made. exempted as distressed employers. The same is illegal. Five J Taxi v. equipment). The main issue is WON such requirement of cash bond is valid. Deduction for loss or damage. they are. LA and NLRC dismissed the case  abandoned cab in Makati without fuel refill worth 300  refused to work Wanted reimbursement of daily cash deposit: 20. by the Pet saying that Respondents abandoned their work and that Memorandum No.for any deficiency in their boundary for every actual day Issue: WON such deposits may be reimbursed Court Held: Yes to 15.  Respondents used to work as welders.occupations or business where the practice of making deductions or requiring deposits is a recognized one. and (d) That the deduction from the wages of the employee does not exceed 20 percent of the employee's wages in a week. the employer may make wage deductions or require the employees to make deposits from which deductions shall be made. occupation or business where the practice of making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools. materials. As to another Issue: As for refund of the cash bond. subject to the following conditions: (a) That the employee concerned is clearly shown to be responsible for the loss or damage.car washing 15. or equipment supplied by the employer to the employee. NLRC  The two drivers of Five J Taxi failed to report for work. NLRC 58 . to defray deficiency in boundary is not contemplated by 114 (loss or damage to tools. Company claimed that due to financial losses. Limitations. Dentech Manufacturing Corp v. No. materials. no to 20 Ratio: 1.

Rule X. or record filed or kept pursuant to the provisions of this Code knowing such statement. False reporting. It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits. Prohibition against retaliatory measures Prohibition against false reporting Prohibition against keeping of employee’s records in a place other than the work place Book III. discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. SECTION 12. MFR filed were all denied. RULE X. 1706. Retaliatory measures. False reporting. The premises of a work-place shall be understood to mean the main or branch office of the establishment. It is only when the ff requisites do not concur that the jurisdiction falls with the LA: claim of a worker employed as a domestic helper or household service under the code claim arises from employer-employee relations does not seek reinstatement money claim does not exceed 5k. depending upon where the employees are regularly assigned. 15 deposit reimbursable. — All employment records required to be kept and maintained by employers shall be preserved for at least three (3) years from the date of the last entry in the records. 117. not entitled to refund 2. The keeping of the employee's records in another place is prohibited. Preservation of records.Also. — It shall be unlawful for any employer or any person to make any false statement. CC. report or record on matters required to be kept or maintained pursuant to the provisions of this Rule. report. shall not be made by the employer. Deduction to ensure employment. 2. Art.  On the strength of an inspection report. intimidation. to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force. 116. Withholding of the wages. Art. if any. Withholding of wages and kickbacks prohibited. Prohibition against Withholding of wages Art. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. Art 129 (Recovery of Wages) and Art 217 (Jurisdiction of LA) were applied by the court to this case in explaining that regional directors are empowered to hear and decide in summary proceeding claims for recovery of wages and other monetary claims or benefits. Art. SECTION 11. — All employment records of the employees shall be kept and maintained by the employer in or about the premises of the work place. nothing prevents them from washing cars themselves NLRC decision modified. It shall be unlawful for any person. It shall be unlawful for any person to make any statement. an order was issued by Labor Officer Domingo Reyes directing South Motorists to pay Tostoc his ECOLA. report or record to be false in any material respect. Hence this petition by South Motorists questioning the monetary award as well as his jurisdiction to grant the same and claiming that only the labor arbiter may determine the existence of an employer employee relationship. alleged purpose for deposits no longer existed and should be returned 20 pesos: 1. stealth. Prohibition against deduction to ensure employment Art. 118. Book III. 119. except for a debt due. < Art 217 (6)> South Motorists Enterprises v. Place of records. Tostoc 59 . threat or by any other means whatsoever without the worker’s consent. directly or indirectly. when they stopped working. SECTION 13.

substance and identity. taxes and fees due thereon to the State or any subdivision thereof. (4) Credits guaranteed with a pledge so long as the things pledged are in the hands of the creditor. up to the value of the same. With reference to specific movable property of the debtor. 1989) Civil Code Art. gate passes of their employees. commission. 1708 used the word wages and not salary. This was denied by the CA because Gaa. removing its name from building directory. provided it has not lost its form. the money claims being above 5k should be remanded to the LA. paid at stated times. or those guaranteed by a chattel mortgage. Gaa is not part of this group. repaired. (5) Credits for the making. up to the value thereof. commission/remuneration are exempted from execution according to Art 1708 of the NCC. Art. upon the things pledged or mortgaged. Worker preference in case of bankruptcy. on the movables. She filed a motion to lift the writ on the ground that her salaries. (2) Claims arising from misappropriation. Payment of wages and other monetary claims in case of bankruptcy. CFI ruled for Europhil. is not a laborer as the word is contemplated in 1708. shelter. (As amended by Section 1. skilled or unskilled. 1708.The court ruled that 11 out of the 46 respondents. Republic Act No. — In case of bankruptcy or liquidation of the employer’s business. (6) Claims for laborers' wages. so long as they are in the possession of the debtor. and measured by day. the lien may be enforced on the price. In the event of bankruptcy or liquidation of an employer’s business. or malfeasance by public officials committed in the performance of their duties. Wages refer to those who look to the reward of a day. kept or possessed. any provisions of law to the contrary notwithstanding. repair. wages vs salary: wages for manual labor. and thus in need of the exeption of 1708.s labor for immediate or present support. CA affirmed. on said movables. March 21. when the price thereof can be determined proportionally. (3) Claims for the unpaid price of movables sold. CC. 1707. money or securities obtained by them. CA +Europhil Industries Corporation Art. breach of trust. week. the following claims or liens shall be preferred: (1) Duties. 60 . 1989) E. and/or remuneration was served to El Grande Hotel where petitioner worked due to these acts. except for debts incurred for food. his workers shall enjoy first preference as regards their wages and other monetary claims. Rule VIII Sec SECTION 10. Decision Modified and Petition partially granted. this right is not lost by the immobilization of the thing by destination. being a person who holds a managerial position. The laborer's wages shall not be subject to execution or attachment. on the goods manufactured or the work done. Prohibition against garnishment or execution  Gaa was building admin of Trinity Building. WORKER PREFERNCE IN THE EVENT OF BANKRUPTCY Book III. the unpaid wages and other monetary claims of the employees shall be given first preference and shall be paid in full before the claims of government and other creditors may be paid (as amended by Sec 1 of the IRR of RA 6715. Salary is contemplated as to relate to a person of office or position. neither is the right lost by the sale of the thing together with other property for a lump sum. 110. and if the movable has been resold by the debtor and the price is still unpaid. safekeeping or preservation of personal property. The laborer's wages shall be a lien on the goods manufactured or the work done Art. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. on the movable thus made. 2241. Europhil Industries filed a civil action in CFI for damages against petitioner for cutting off its electricity. Writ of garnishment of Gaa’s salary. 6715. clothing and medical attendance. month or season while salary denotes a higher degree of employment Rosario Gaa v. 1.

The Secretary of Labor and Employment or his duly authorized representatives. the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. In case the violation is attributable to the fault of the employer. Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary. after appropriate administrative investigation. It shall be unlawful for any person or entity to obstruct. An order issued by the duly authorized representative of the Secretary of Labor and Employment under this Article may be appealed to the latter. e. the following claims. the creditor may demand them from any possessor. 7730. canals or other works. engineers and contractors. 2242. 7730. In case said order involves a monetary award. Any government employee found guilty of violation of. including labor regulation officers. 1994). b. as well as of architects. June 2. a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article. an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. mortgages and liens shall be preferred. 128. a. reconstruction or repair of buildings. and the right to copy therefrom. With reference to specific immovable property and real rights of the debtor. mechanics and other workmen. wage order or rules and regulations issued pursuant thereto. he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. within thirty days from the unlawful seizure. engaged in the construction. ADMINISTRATION AND ENFORCEMENT Art. (1922a) Art. delay or otherwise render ineffective the orders of the Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority granted under this Article. June 2. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders.In the foregoing cases. With reference to other property. except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection. shall have access to employer’s records and premises at any time of the day or night whenever work is being undertaken therein. or household helpers for one year preceding the commencement of the proceedings in insolvency. The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. or abuse of authority. under this Article shall. 1994) c. d. 2244. masons. laborers. real and personal. canals or other works. if the movables to which the lien or preference attaches have been wrongfully taken. the following claims or credits shall be preferred in the order named: (2) Credits for services rendered the insolvent by employees. (As amended by Republic Act No. to question any employee and investigate any fact. and in cases where the relationship of employer-employee still exists. Art. upon said buildings. (As amended by Republic Act No. condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law. impede. Within twenty-four hours. of the debtor. and shall constitute an encumbrance on the immovable or real right: (3) Claims of laborers. Visitorial and enforcement power. F. be subject to summary dismissal from the service. WAGE RECOVERYJURIDICTION 61 .

Republic Act No. including those of persons in domestic or household service. the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered. 3. Except as otherwise provided under this Code. In cases of unlawful withholding of wages. b. Attorney’s fees. the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered. all other claims arising from employer-employee relations. Social Security. Republic Act No. 6715. even in the absence of stenographic notes. 6715. a. within five (5) calendar days from receipt of a copy of said decision or resolution. hours of work and other terms and conditions of employment. Termination disputes. Recovery of wages. Medicare and maternity benefits. It shall be unlawful for any person to demand or accept. those cases that workers may file involving wages. and 6. The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits. 129.000. c. the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide.000. 4. require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code. shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code. involving an amount exceeding five thousand pesos (P5. 5. Art. attorney’s fees which exceed ten percent of the amount of wages recovered BOOK III RULE X Administration and Enforcement 62 . The Secretary of Labor and Employment may. moral. including legal interest. March 21. 217. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by. to hear and decide any matter involving the recovery of wages and other monetary claims and benefits. simple money claims and other benefits. Jurisdiction of the Labor Arbiters and the Commission. That such complaint does not include a claim for reinstatement: Provided further. including questions involving the legality of strikes and lockouts. 1989) Art. a. found owing to any employee or househelper under this Code. to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules. 111. including legal interest. 1989) Art. the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Claims for actual. (As amended by Section 9. The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. Unfair labor practice cases. within thirty (30) calendar days after the submission of the case by the parties for decision without extension. arising from employeremployee relations: Provided. 2. in any judicial or administrative proceedings for the recovery of wages. March 21. b. Upon complaint of any interested party. (As amended by Section 2. the following cases involving all workers. Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. If accompanied with a claim for reinstatement. Cases arising from any violation of Article 264 of this Code. whether agricultural or nonagricultural: 1. rates of pay.f. exemplary and other forms of damages arising from the employeremployee relations. owing to an employee or person employed in domestic or household service or househelper under this Code. That the aggregate money claims of each employee or househelper does not exceed Five thousand pesos (P5. Any such sum not paid to the employee or househelper because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years. by appropriate regulations.00) regardless of whether accompanied with a claim for reinstatement.00). and shall be paid on order of. Except claims for Employees Compensation. through summary proceeding and after due notice.

wage order or rules and regulations issued pursuant thereto. the Regional Director concerned shall indorse the case to the appropriate arbitration branch of the National Labor Relations Commission for adjudication. safety order or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. The order of the Regional Director shall be immediately final and executory unless stayed by the Secretary of Labor and Employment upon posting by the employer of a reasonable cash or surety bond as fixed by the Regional Director. including Labor Regulations Officers or Industrial Safety Engineers. — (a) The Secretary of Labor and Employment. shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken therein. impede. Interference and injunctions prohibited. and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with the Code. Visitorial power. Power to review. The proceedings shall be terminated within seventy-two (72) hours and a copy of such order or resolution shall be immediately furnished the Secretary of Labor and Employment. In line with the provisions of Article 128 in relation to Articles 289 and 290 of the Labor Code as amended in cases. compliance with the labor standards provisions of the Code and other labor legislations based on the findings of the Labor Regulation Officers or Industrial Safety Engineers (Labor Standard and Welfare Officer) and made in the course of inspection. shall be subject to the provisions of Presidential Decree No. — It shall be unlawful for any person or entity to obstruct. — (a) The Regional Director may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law. In case the violation is attributable to the fault of the employer. Thirteenth Month Pay (PD 851) 63 . 851. 6. 6 PRESIDENTIAL DECREE NO. delay or otherwise render ineffective the exercise of the enforcement power of the Secretary of Labor and Employment. (b) Within 24 hours from issuance of the order of stoppage or suspension. (b) The Regional Director shall give the employer fifteen (15) days within which to comply with his order before issuing a writ of execution. shall have the power to order and administer. — (a) The Regional Director in cases where employer relations shall exist. Enforcement power on health and safety of workers. may review the order of the Regional Director. REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES A 13thMONTH PAY WHEREAS. and right to copy therefrom. it is necessary to further protect the level of real wages from the ravage of worldwide inflation.SECTION 1. the Secretary of Labor and Employment may direct the Bureau of Working Conditions to evaluate the findings or orders of the Regional Director. he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. SECTION 3. and to investigate any fact. however. after due notice and hearing. any government employees found guilty of violation or abuse of authority. — The Secretary of Labor and Employment or his duly authorized representatives. In addition to the penalties provided for by the Labor Code. SECTION 2. (b) In aid of his power of review. Regional Director or their duly authorized representatives pursuant to the authority granted by the Code and its implementing rules and regulations. Copy of such order or writ of execution shall immediately be furnished the Secretary of Labor and Employment. a hearing shall be conducted to determine whether the order for the stoppage of work or suspension of operation shall be lifted or not. and to issue writs of execution to the appropriate authority of the enforcement of his order. The decision of the Secretary of Labor and Employment shall be final and executory. Enforcement power. to question any employee. at his own initiative or upon request of the employer and/or employee. SECTION 4. condition or matter relevant to the enforcement of any provision of the Code and of any labor law. SECTION 5. where the employer contests the findings of the Labor Standards and Welfare Officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.

the Christmas season is an opportune time for society to show its concern for the plight of the working masses so they may properly celebrate Christmas and New Year.000.00 a month. they are. Court held that 1k salary ceiling in PD 851 pertains to basic salary and not monthly compensation and that in invoking exemption.D. Sec. 28 which provides as follows: "Section 1 of Presidential Decree No. No. all rank and file employees are now entitled to a 13th month pay regardless of the amount of basic salary that they receive in a month if their employers are not otherwise exempted from the application of P. With the removal of the salary ceiling of P1. by virtue of the powers vested in me by the Constitution. a 13th-month pay not later than December 24 of every year. and painters of company making dental equipment. All employers are hereby required to pay all their employees receiving a basic salary of not more than P1. Coverage 64 . provided that they have worked for at least one (1) month during a calendar year. Such employees are entitled to the benefit regardless of their designation or employment status. Aquino issued Memorandum Order No. 851. 1. Exempted Employers. Corp v. exempted as distressed employers. They cited PD 851 saying that they are receiving more than 1k per month and thus they are entitled (under the PD) to 13th month pay. Removal of Salary Ceiling. Company failed to show that it is authorized by law to require workers to file cash bond. Case was elevated to the Supreme Ct. and irrespective of the method by which their wages are paid. b. Refund! Petition dismissed. The main issue is WON such requirement of cash bond is valid. 2. the company said that these have been given to a certain carinderia to pay for the outstanding accounts of private respondents. THEREFORE. 1986. upholsterers. FERDINAND E. 3. MARCOS. As to another Issue: As for refund of the cash bond. 851 excludes from entitlement to the 13th month pay those employees who were receiving a basic salary of more than P1. there has been no increase in the legal minimum wage rates since 1970. do hereby decree as follows: Section 1. Sec.000 a month. History of the Law  Dentech Mfg. Respondents used to work as welders. No. 851 is hereby modified to the extent that all employers are hereby required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year. NLRC REVISED GUIDELINES ON THE IMPLEMENTATION OF THE 13TH MONTH PAY LAW. Employers already paying their employees a 13th-month pay or its equivalent are not covered by this Decree. 2. 28 (eliminating 1k salary ceiling) does not apply to the case since it was enforced long after he case was instituted. I. a. LA ruled for reinstating complainants and NLRC affirmed LA. NOW. regardless of the nature of their employment. the company must be deemed qualified after prior authorization from the Secretary of Labor and Employment.D. by the Pet saying that Respondents abandoned their work and that Memorandum No.000. No. P. Company claimed that due to financial losses." Before its modification by the aforecited Memorandum Order. under the same PD. On August 13. WHEREAS.00. President Corazon C.WHEREAS. This Decree shall take effect immediately. They were dismissed: allegedly because of union activities (Confederation of Citizens Labor Union) They wanted to get their 13 th month pay as well as refund of cash bond filed.

without regard to the time spent in producing the same. and those who are paid a fixed amount for performing specific work. All employees not falling within this definition are considered rank-and-file employees. The term "its equivalent" as used on paragraph (b) hereof shall include Christmas bonus. 178 provides. in the computation of the 13th month pay for 1987. Amount and payment of 13th Month Pay (a) Minimum of the Amount.50 effective on 1 May 1987. as well as non-monetary benefits. Who are Rank-and File Employees. No. the computation of the 13th month pay shall include the cost of living allowances (COLA) integrated into the basic salary of a covered employee pursuant to Executive Order 178. 3. 4. lay-off.000 or less. the employer shall pay the difference. As used herein. For the year 1987. including government-owned and controlled corporations.D. boundary. Thus. Employers of household helpers and persons in the personal service of another in relation to such workers. Where an employer pays less than required 1/12th of the employees basic salary. 851: a. mid-year bonus. cost of living allowances and all other allowances regularly enjoyed by the employee. among other things.The following employers are still not covered by P. suspend. The above distinction shall be used as guide for the purpose of determining who are rank-and-file employees entitled to the mandated 13th month pay. The Government and any of its political subdivisions.00 of the daily COLA of P17. Employers of those who are paid on purely commission. Where the total P17. It provides that a managerial employee is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire.50 on 1 October 1987. — The minimum 13th month pay required by law shall not be less than one-twelfth of the total basic salary earned by an employee within a calendar year.O. recall discharge. workers paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated. b. and d. and P8. 65 . P4. transfer. irrespective of the time consumed in the performance thereof. c. No. assign or discipline employees. For establishments with less than 30 employees and paid-up capital of P500.00 effective 1 January 1988. the integration of COLAs shall be as follows: P4. excepts those corporations operating essentially as private subsidiaries of the Government. or task basis.00 for nonagricultural workers shall be integrated into the basic pay of covered employees effective 1 May 1987. and the remaining P8. The Labor Code distinguishes a rank-and-file employee from a managerial employee. except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to such workers. cash bonuses and other payments amounting to not less than 1/12 of the basic salary but shall not include cash and stock dividends. the COLAs integrated into the basic pay shall be included as of the date of their integration. or to effectively recommend such managerial actions. E. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance.00 daily COLA was integrated effective 1 May 1987 or earlier the inclusion of said COLA as part of the of the basic pay for the purpose of computing the 13th month pay shall be reckoned from the date of actual integration.00 effective 1 October 1987. that the P9.

including private educational institutions. Thus. — Government employees working part time in a private enterprise. so can the employee demand the payment of all benefits due him upon the termination of the relationship. and cost-of-living allowances. (b) Those with Multiple Employers. 66 . as well as employees working in two or more private firms. (c) Private School Teachers. 13th Month Pay for Certain Types of Employees. — Employees who are paid on piece work basis are by law entitled to the 13th month pay. 7. whether on full or part time basis. regardless of the number of months they teach or are paid within a year. such as the cash equivalent of unused vacation and sick leave credits. overtime. The mandated 13th month pay need not be credited as part of regular wage of employees for purposes of determining overtime and premium pays. However. are entitled to the required 13th month pay from all their private employers regardless of their total earnings from each or all their employers. company practice or policy. The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship. (a) Employees Paid by Results.The "basic salary" of an employee for the purpose of computing the 13th month pay shall include all remunerations or earning paid by this employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary. i. Social Security. This is consistent with the principle of equity that as the employer can require the employee to clear himself of all liabilities and property accountability. however. on both their fixed or guaranteed wage and commission. the same are treated as part of the basic salary of the employees. An employer. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees. 5. night differential and holiday pay. Medicare and private retirement plans. An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year. Non-inclusion in Regular Wage. Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay. — Private school teachers. Prohibitions against reduction or elimination of benefits. are entitled to the required 13th month pay. including faculty members of universities and colleges. fringe benefits insurance fund.. may give to his employees one half (½) of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year. 13th Month Pay of Resigned or Separated Employee. if he worked only from January up to September his proportionate 13th month pay should be equivalent of 1/12 his total basic salary he earned during that period. 6. reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the service. premium. based on their total earnings during the calendar year. these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement. if they have rendered service for at least one (1) month within a year.e. — The required 13th month pay shall be paid not later than December 24 of each year. (b) Time of Payment.

overtime. contended that they are no longer contesting their dismissal but rather wanted to receive separation pay including the commissions. The "basic salary" of an employee for the purpose of computing the 13th month pay shall include all remunerations or earning paid by this employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary. the same are treated as part of the basic salary of the employees. the computation of the 13th month pay shall include the cost of living allowances (COLA) integrated into the basic salary of a covered employee pursuant to Executive Order 178. or other employee benefits or favorable practice being enjoyed by the employee at the time of promulgation of this issuance. or diminish in any way. Hence this petition. these salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement. such as the cash equivalent of unused vacation and sick leave credits. the COLAs integrated into the basic pay shall be included as of the date of their integration. For establishments with less than 30 employees and paid-up capital of P500. supplements. the court used Santos v. — The minimum 13th month pay required by law shall not be less than one-twelfth of the total basic salary earned by an employee within a calendar year. The frequency of payment of this monetary benefit may be the subject of agreement between the employer and the recognized/collective bargaining agent of the employees. filed with DOLE an application to terminate Jose Songco.000 or less. NLRC as the prevailing doctrine wherein it said that “computation of backwages and separation pay should include transportation and emergency living allowances. (b) Time of Payment. The petitioners opposed this claiming that the company is not suffering from any losses but later on.” As for commissions. Rationale (Whereas Clauses) d. An employer.00 effective 1 January 1988. Thus. and P8. For allowances.E. Amount and Date of Payment.50 effective on 1 May 1987. Basic Wage/ Commissions – Sec 4  Songco v. premium. however. Inc. among other things. E. Amount and payment of 13th Month Pay (a) Minimum of the Amount. and cost-of-living allowances. 1. Petition is Granted. Labor Dept issued a notice of inspection results which was disputed by BT expressing that commissions are not part of the basic or regular pay of their med reps. NLRC  A routine inspection was conducted in the premises of Boie Takeda Chemicals and it was found that BT had not been including the commissions earned by its medical representatives in the computation of their 13th month pay.O. the integration of COLAs shall be as follows: P4. Zuelig M.Nothing herein shall be construed to authorize any employer to eliminate. No.00 daily COLA was integrated effective 1 May 1987 or earlier the inclusion of said COLA as part of the of the basic pay for the purpose of computing the 13th month pay shall be reckoned from the date of actual integration. De La Serna 67 . For the year 1987.00 of the daily COLA of P17. and the remaining P8.Revised Guidelines Revised Guidelines. company practice or policy. Sec 4. Regional Boie Takeda v. LA excluded the commissions and NLRC dismissed the appeal.00 for nonagricultural workers shall be integrated into the basic pay of covered employees effective 1 May 1987. night differential and holiday pay. — The required 13th month pay shall be paid not later than December 24 of each year. Cipres and Manuel on the gound of retrenchment. allowances etc which they receive every month. F. the court held that commission is not part of the basic salary but is the reward of an agent or salesman and that the nature of his job as a salesman demonstrates that such type of remuneration is part of their salary. Where the total P17. in the computation of the 13th month pay for 1987. may give to his employees one half (½) of the required 13th month pay before the opening of the regular school year and the other half on before the 24th of December of every year. P4. 178 provides. c. However.00 effective 1 October 1987. that the P9.50 on 1 October 1987.

Nightwork prohibition. The State shall protect working women by providing safe and healthful working conditions. or in cases of force majeure or imminent danger to public safety. epidemic or other disasters or calamity. whether operating for profit or not.  LA directed petitioner to pay 13th month pay to private respondent employees plus the sales commissions. Bonus a. The court rules for BT. Women RA 7192 Women in Development and Nation Building Act RA 7877 Anti sexual Harassment Act 1. or c. Hence this petition. religious and charitable institutions. Working Conditions for Special Groups of Workers A. PD did not raise the issue of the validity of the 13 th month pay law as issued by Franklin Drilon and that the doctrines in the two cases actually co-exist. Prohibited Acts a. and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation. regardless of age.Director issued the order of payment/ BT filed a motion for reconsideration which the Labor Secretary ruled on. Coverage Book III. In any industrial undertaking or branch thereof between ten o’clock at night and six o’clock in the morning of the following day. The prohibitions prescribed by the preceding Article shall not apply in any of the following cases: a. 2. In cases of actual or impending emergencies caused by serious accident. Substitute Payment – Sec 2 Art II Section 14. These salesmen’s commissions form part of the definition of basic salary. including educational. Women under the constitution 2. fire. Night Work/Exception 68 . The court said that Boie Takeda is not a precedent under stare decisis and that the petirion of PD has been decided with finality. SECTION 1. 131. taking into account their maternal functions. or b. Also. Sales commissions received for every duplicating machine sold are part of the basc compensatin of the salesmen of Philippine Duplicators in doing their job and that these are not over time payments or profit sharing payments not any other benefit. to prevent loss of life or property. Memorandum 28 issued by Corazon Aquino did not repeal PD 851 but rather merely modified Sec 1 of PD 851 removing the P1k salary ceiling. Art XIII Section 14. except to the Government and to government-owned or controlled corporations and to employers of household helpers and persons in their personal service insofar as such workers are concerned. Art. 130. Productivity bonuses. Phil. When demandable 8. Nature b. NLRC affirmed this order and the petition for certiorari was dismissed. NLRC 7. In any agricultural undertaking at nighttime unless she is given a period of rest of not less than nine (9) consecutive hours. with or without compensation: a. A bonus is a gratuity or act of liberality on the part of the giver which the recipient has no right to demand. In any commercial or non-industrial undertaking or branch thereof. — This Rule shall apply to all employers. between midnight and six o’clock in the morning of the following day. other than agricultural. Therefore. Petition is denied. Duplicators v. General statement on coverage. No woman. Rule XII. flood. earthquake. 3. The State recognizes the role of women in nation-building. Definition. Art. and shall ensure the fundamental equality before the law of women and men. Petitions Granted. typhoon. the interpretation of basic salary in PD 851 should be followed in memorandum 28 which is “rate of pay for a standard work period exclusive of such additional payments as bonuses and overtime”. Thus this petition for reconsideration submitting that the decision in Boie Takeda has reversed the decision of Philippine Duplicators and should thus be applicable in their case. although similar to Sales commission (both being incentives) are tied to productivity or profit generation whereas sales commissions are directly proportional to the extent or energy of the employees endeavors such as in the case of BT and PD. Exceptions. affirming the regional director. shall be employed or permitted or suffered to work.

b. In case of urgent work to be performed on machineries, equipment or installation, to avoid serious loss which the employer would otherwise suffer; c. Where the work is necessary to prevent serious loss of perishable goods; d. Where the woman employee holds a responsible position of managerial or technical nature, or where the woman employee has been engaged to provide health and welfare services; e. Where the nature of the work requires the manual skill and dexterity of women workers and the same cannot be performed with equal efficiency by male workers; f. Where the women employees are immediate members of the family operating the establishment or undertaking; and g. Under other analogous cases exempted by the Secretary of Labor and Employment in appropriate regulations. Art. 135. Discrimination prohibited. It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. The following are acts of discrimination: a. Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employees as against a male employee, for work of equal value; and b. Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grants solely on account of their sexes. Criminal liability for the willful commission of any unlawful act as provided in this Article or any violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as provided in Articles 288 and 289 of this Code: Provided, That the institution of any criminal action under this provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative reliefs. The actions hereby authorized shall proceed independently of each other. (As amended by Republic Act No. 6725, May 12, 1989)

b. Discrimination

Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

c. Stipulation against Marriage

Book III Rule XII SECTION 13. Prohibited acts. — It shall be unlawful for any employer:
(e) To require as a condition for a continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

Art. 137. Prohibited acts. a. It shall be unlawful for any employer: 1. To deny any woman employee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code. Book III Rule XII SECTION 13. Prohibited acts. — It shall be unlawful for any employer: (a) To discharge any woman employed by him for the purpose of preventing such woman from enjoying the maternity leave, facilities and other benefits provided under the Code;

d. Discharge to prevent enjoyment of benefits (137, 1)

Art. 137. Prohibited acts. a. It shall be unlawful for any employer: 2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy;

e. Discharge on account of pregnancy (137, 2-3)

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3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant. Book III Rule XII SECTION 13. Prohibited acts. — It shall be unlawful for any employer: (b) To discharge such woman employee on account of her pregnancy, or while on leave or in confinement due to her pregnancy; (c) To discharge or refuse the admission of such woman upon returning to her work for fear that she may be pregnant;

f.

Discharge on account of testimony

Book III Rule XII SECTION 13. Prohibited acts. — It shall be unlawful for any employer: (d) To discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code; and

Art. 132. Facilities for women. The Secretary of Labor and Employment shall establish standards that will ensure the safety and health of women employees. In appropriate cases, he shall, by regulations, require any employer to: a. Provide seats proper for women and permit them to use such seats when they are free from work and during working hours, provided they can perform their duties in this position without detriment to efficiency; b. To establish separate toilet rooms and lavatories for men and women and provide at least a dressing room for women; c. To establish a nursery in a workplace for the benefit of the women employees therein; and d. To determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like. Art. 134. Family planning services; incentives for family planning. a. Establishments which are required by law to maintain a clinic or infirmary shall provide free family planning services to their employees which shall include, but not be limited to, the application or use of contraceptive pills and intrauterine devices. b. In coordination with other agencies of the government engaged in the promotion of family planning, the Department of Labor and Employment shall develop and prescribe incentive bonus schemes to encourage family planning among female workers in any establishment or enterprise. Book III Rule XII SECTION 14. Facilities for woman employees. — Subject to the approval of the Secretary of Labor and Employment, the Bureau of Women and Young Workers shall, within thirty (30) days from the effective date of these Rules, determine in an appropriate issuance the work situations for which the facilities enumerated in Article 131 of the Code shall be provided, as well as the appropriate minimum age and other standards for retirement or termination of employment in special occupations in which women are employed. Art. 138. Classification of certain women workers. Any woman who is permitted or suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishments under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an employee of such establishment for purposes of labor and social legislation. Social Security Act of 1997, RA 8282, Sec 14-A Maternity Leave Benefit. - A female member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject to the following conditions:

4. Facilities

5. Special Women Matters

6. Maternity Leave

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"(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; "(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application; "(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received; "(d) That the maternity benefits provided under this section shall be paid only for the first four (4) deliveries or miscarriages; "(e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and "(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to. Art. 133. Maternity leave benefits. a. Every employer shall grant to any pregnant woman employee who has rendered an aggregate service of at least six (6) months for the last twelve (12) months, maternity leave of at least two (2) weeks prior to the expected date of delivery and another four (4) weeks after normal delivery or abortion with full pay based on her regular or average weekly wages. The employer may require from any woman employee applying for maternity leave the production of a medical certificate stating that delivery will probably take place within two weeks. b. The maternity leave shall be extended without pay on account of illness medically certified to arise out of the pregnancy, delivery, abortion or miscarriage, which renders the woman unfit for work, unless she has earned unused leave credits from which such extended leave may be charged. c. The maternity leave provided in this Article shall be paid by the employer only for the first four (4) deliveries by a woman employee after the effectivity of this Code.

Art. 139. Minimum employable age. a. No child below fifteen (15) years of age shall be employed, except when he works directly under the sole responsibility of his parents or guardian, and his employment does not in any way interfere with his schooling. b. Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of hours and such periods of the day as determined by the Secretary of Labor and Employment in appropriate regulations. c. The foregoing provisions shall in no case allow the employment of a person below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as determined by the Secretary of Labor and Employment. Art. 140. Prohibition against child discrimination. No employer shall discriminate against any person in respect to terms and conditions of employment on account of his age.

7. Sexual Harrassment (RA 7877) B. Minors

Omnibus Rules RULE XII Employment of Women and Minors
SECTION 2. Employable age. — Children below fifteen (15) years of age may be allowed to work under the direct responsibility of their parents or guardians in any non-hazardous undertaking where the work will not in any way interfere with their schooling. In such cases, the children shall not be considered as employees of the employers or their parents or guardians.

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"For purposes of this Article. a non-hazardous work or undertaking shall mean any work or activity in which the employee is not exposed to any risk which constitutes an imminent danger to his safety and health. That the following requirements in all instances are strictly complied with: "(a) The employer shall ensure the protection." Book III RULE XII. may be employed in any non-hazardous work. before engaging such child. except to the 72 . theater. Coverage RA 9231 Section 2. religious and charitable institutions. No employer shall discriminate against such person in regard to terms and conditions of employment on account of his age. SECTION 1. Art II Section 13. safety. a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. if possible. Minors under the constitution 2. "(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into account the system and level of remuneration. It shall inculcate in the youth patriotism and nationalism. between 15 and 18 years of age. the term "child" shall apply to all persons under eighteen (18) years of age. The Secretary of Labor and Employment shall from time to time publish a list of hazardous work and activities in which persons 18 years of age and below cannot be employed. That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education. That the employment contract is concluded by the child's parents or legal guardian. Employment of Children . and the approval of the Department of Labor and Employment: Provided. television or other forms of media is essential: Provided. General statement on coverage. the employer shall first secure. morals and normal development of the child. further.SECTION 3. That his/her employment neither endangers his/her life. safety.Children below fifteen (15) years of age shall not be employed except: "1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided. including educational. — This Rule shall apply to all employers. moral. intellectual. and encourage their involvement in public and civic affairs. as amended. — Any person of either sex. however. health. nor impairs his/her normal development: Provided. health. and "(c) The employer shall formulate and implement. Eligibility for employment. with the express agreement of the child concerned. radio. subject to the approval and supervision of competent authorities. further. and the duration and arrangement of working time. Section 12 of the same Act. 1. spiritual. For purposes of this Rule. Employment of Women and Minors. and social well-being. a continuing program for training and skills acquisition of the child. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical. 2. "In the above-exceptional cases where any such child may be employed. is hereby further amended to read as follows: "Sec. or "2) Where a child's employment or participation in public entertainment or information through cinema. and morals. whether operating for profit or not.

(c) The employer shall institute measures to prevent exploitation or discrimination taking into account the system and level of remuneration. SECTION 14. Provided. Duty of Employer. a.000) or imprisonment of not less than three (3) months but not more than three (3) years. — No person shall employ child models in all commercials or advertisements promoting alcoholic beverages. 3. Employment of Children Art. 603. No child below fifteen (15) years of age shall be employed. Penalties. — Children below fifteen (15) years of age may be employed: Provided. SECTION 15. SECTION 16. Such course design shall integrate the learning process deemed most effective under giver circumstances. — Every employer shall comply with the duties provided for in Articles 108 and 109 of Presidential Decree No. (b) The employer shall ensure the protection. the offender's license to operate shall be revoked. or both at the discretion of the court. intoxicating drinks. c. — Any person who shall violate any provision of this Article shall suffer the penalty of a fine of not less than One thousand pesos (P1. health. SECTION 13. b. and (d) The employer shall formulate and implement a continuous program for training and skill acquisition of the child. That. 139. moral and vocational efficiency of working children who have not undergone or finished elementary or secondary education. — The Department of Education.000) but not more than Ten thousand pesos (P10. The foregoing provisions shall in no case allow the employment of a person below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as determined by the Secretary of Labor and Employment. safety and morals of the child. in case of repeated violations of the provisions of this Article. Non-formal Education for Working Children . Culture and Sports shall promulgate a course design under its non-formal education program aimed at promoting the intellectual. and his employment does not in any way interfere with his schooling. That the following minimum requirements are present: (a) The employer shall secure for the child a work permit from the Department of Labor and Employment. and the duration and arrangement of working time. Employment of Children. Department Order No.Government and to government-owned or controlled corporations and to employers of household helpers and persons in their personal service insofar as such workers are concerned. The Department of Labor Employment shall promulgate rules and regulations necessary for the effective implementation of this section. except when he works directly under the sole responsibility of his parents or guardian. Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of hours and such periods of the day as determined by the Secretary of Labor and Employment in appropriate regulations. tobacco and its byproducts and violence. RA 7610 ARTICLE VIII WORKING CHILDREN SECTION 12. 4: RE: Hazardous Work and Activities to Persons Below 18 Years of Age 73 . Minimum employable age. Prohibition on the Employment of Children Certain Advertisements .

equipment and tools such as power-driven or explosive power-actuated tools." 5. or "b) Exposes the child to physical. is hazardous or likely to be harmful to the health.g.. offering or exposing of a child for prostitution. or "c) Is performed underground. Prohibitions against Worst forms of child labor RA 9231 Sec 3 "Sec. 4. and in no case beyond forty (40) hours a week.. adhesives used in footwear manufacture).g.No child shall be engaged in the worst forms of child labor. Hours of Work RA 9231 Section 3. 12-B. 2-A. heat. . underwater or at dangerous heights. noise or pressure (e.The Department of Labor and Employment’s (DOLE) Order No.Under the exceptions provided in Section 12 of this Act. by its nature or the circumstances in which it is carried out. 12-D.g. as defined under the "Anti-trafficking in Persons Act of 2003". deep-sea diving and underground work). and work that is hazardous by its nature (e. is hereby further amended by adding new sections to be denominated as Sections 12-A.g. The phrase "worst forms of child labor" shall refer to any of the following: "(1) All forms of slavery. debt bondage and serfdom and forced or compulsory labor. for the production of pornography or for pornographic performances. "(2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day. The same Act. procuring. "(3) No child below fifteen (15) years of age shall be allowed to work between eight o'clock in the evening and six o'clock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten o'clock in the evening and six o'clock in the morning of the following day. such that it: "a) Debases. mining. and 12-D to read as follows: "Sec. or "(3) The use. as amended: "(1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided. degrades or demeans the intrinsic worth and dignity of a child as a human being. emotional or sexual abuse. The list includes work with dangerous substances (e. as amended. work hazardous to morals (e. safety or morals of children. including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws.. employment in dance halls). That the work shall not be more than four (4) hours at any given day.. procuring or offering of a child for illegal or illicit activities. 4 of 1999 outlines categories of hazardous work and prohibits the employment of children in these categories. or 74 . including recruitment of children for use in armed conflict. or "(2) The use. 12-C. logging and pyrotechnics production). or is found to be highly stressful psychologically or may prejudice morals. Hours of Work of a Working Child. or practices similar to slavery such as sale and trafficking of children. or "(4) Work which. work that entails exposure to extreme elements of cold. Prohibition Against Worst Forms of Child Labor . . or "d) Involves the use of dangerous machinery.

elements. he/she shall be exempt from payment of filing fees. Decision on said cases shall be rendered within a period of fifteen (15) days from the date of submission of the case. fungi. but not limited to the dangerous feats of balancing. substances. Prohibition against child discrimination. flammable substances. or "f) Is performed in an unhealthy environment exposing the child to hazardous working conditions."e) Exposes the child to physical danger such as. noise levels. 16-A." C. General statement on coverage." 6. — (a) The provisions of this Rule shall apply to all househelpers whether employed on full or part-time basis. 16-B and 16-C to read as follows: "Sec. Discrimination Art. or "i) Involves the manufacture or handling of explosives and other pyrotechnic products.When the victim of child labor institutes a separate civil action for the recovery of civil damages. nematodes and other parasites. 140. 15. That in cities or provinces where there are no family courts yet. physical strength or contortion. No employer shall discriminate against any person in respect to terms and conditions of employment on account of his age. or which requires the manual transport of heavy loads.The working child shall have the right to free legal. "The preliminary investigation of cases filed under this Act shall be terminated within a period of thirty (30) days from the date of filing. 75 . or vibrations. Exemptions from Filing Fees.The family courts shall have original jurisdiction over all cases involving offenses punishable under this Act: Provided. co-agents or processes involving ionizing. Definition. "If the preliminary investigation establishes a prima facie case. the regional trial courts and the municipal trial courts shall have concurrent jurisdiction depending on the penalties prescribed for the offense charged. 7. then the corresponding information shall be filed in court within forty eight (48) hours from the termination of the investigation. or "h) Exposes the child to biological agents such as bacteria. radiation. HOUSEHELPERS/ CAREGIVERS 1. . Jurisdiction RA 9231 Section 9. Jurisdiction . "Trial of cases under this Act shall be terminated by the court not later than ninety (90) days from the date of filing of information. Medical and Psycho-Social Services . medical and psycho-social services to be provided by the State. "Sec. or "g) Is performed under particularly difficult conditions. Section 1b RULE XIII Employment of Househelpers SECTION 1. The same Act is hereby further amended by adding new sections to Section 16 to be denominated as Sections 16-A. 16-C. viruses. "Sec. or to extreme temperatures. fire. Access to Immediate Legal. protozoans. noxious components and the like.

145. Began as piece rate worker then later was paid on monthly basis. Muntinlupa. 145. On Dec.(b) The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person. 146. while she was hanging laundry. Five hundred fifty pesos (P550. criteria: personal comfort and enjoyment of the family of the employer in the home of said employer Separation pay granted. 141. 4. 147. her immediate supervisor who offered her 2thou then 5thou for her to quit her job. who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof. Taguig and Pateros in Metro Manila and in highly urbanized cities. Navotas. whether male or female. In no case shall physical violence be used upon the househelper. The minimum wage rates prescribed under this Chapter shall be the basic cash wages which shall be paid to the househelpers in addition to lodging. Minimum wage. (As amended by Republic Act No. Marikina. 1993) Art. Treatment of househelpers. The cost of education shall be part of the househelper’s compensation. 2. Reinstatement no longer possible. That the employers shall review the employment contracts of their househelpers every three (3) years with the end in view of improving the terms and conditions thereof.00) a month for those in other municipalities. Quezon. whether male or female. No househelper shall be assigned to work in a commercial. 143. 144. If the househelper is under the age of eighteen (18) years. food and medical attendance. a. Valenzuela. This Chapter shall apply to all persons rendering services in households for compensation. Assignment to non-household work. 18. unless there is a stipulation to the contrary.000. industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non-agricultural workers as prescribed herein. Issue: WON Candida was a householder. Coverage. Art. Mandaluyong. 141. That those househelpers who are receiving at least One thousand pesos (P1. 1987. Pasig. NLRC Candido performed laundry services at the staff house of company. Ratio: 1. further. and ministers exclusively to the personal comfort and enjoyment of the employer's family. Househelpers shall be paid the following minimum wage rates: 1. Contract of domestic service. Art.00) shall be covered by the Social Security System (SSS) and be entitled to all the benefits provided thereunder. The employer shall treat the househelper in a just and humane manner. Las Piñas. 2. she fell on her back. and Caloocan cities and municipalities of Makati. Six hundred fifty pesos (P650. Art. the employer shall give him or her an opportunity for at least elementary education. Parañaque. August 19. Art. including services of family drivers.00) a month for those in other chartered cities and first-class municipalities. Minimum cash wage. She refused and preferred to return to work but petitioner did not allow her to work and she was dismissed. Malabon. 2. (b) The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person. 142. and 3. Provided. The original contract of domestic service shall not last for more than two (2) years but it may be renewed for such periods as may be agreed upon by the parties. Pasay. San Juan. Coverage Art. who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof. Conditions of Employment 76 . Held: No. Eight hundred pesos (P800. Opportunity for education. and ministers exclusively to the personal comfort and enjoyment of the employer's family. Provided. 3. She immediately reported incident to dela Rosa.00) a month for househelpers in Manila. "Domestic or household service" shall mean service in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household. Art. Petitioner claims that Candido should be treated as a mere househelper or domestic servant and not as a regular employee. Non Household Work  Apex Mining Co v. 7655.

the head of the family shall give an opportunity to the house helper for at least elementary education. food. the employer shall give the househelper a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper. Art. according to the following rules: (1) If the compensation is paid by the day. Art. suitable and sanitary living quarters as well as adequate food and medical attendance. such contract may be renewed from year to year. 1689. 1691. If the house helper is unjustly dismissed. No contract for household service shall last for more than two years. unless there is a stipulation to the contrary. which the latter shall authenticate by signature or thumbmark upon request of the employer. Employment record. Service of termination notice. Art. Art. 149. Any stipulation that household service is without compensation shall be void. and medical attendance. The house helper's clothes shall be subject to stipulation. to the house helper. However. Art. for not exceeding fifteen days. lodging. If the house helper leaves without justifiable reason. Household service shall always be reasonably compensated. 1695. Such compensation shall be in addition to the house helper's lodging. The employer may keep such records as he may deem necessary to reflect the actual terms and conditions of employment of his househelper. The cost of such education shall be a part of the house helper's compensation. 1690. The employer shall furnish the househelper. If the househelper is unjustly dismissed. notice may be given on any day that the service shall end at the close of the following day. the head of the family shall bear the funeral expenses if the house helper has no relatives in the place where the head of the family lives. he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of indemnity. In no case shall physical violence be used upon the house helper. 1693.Art. except for a just cause. The head of the family shall treat the house helper in a just and humane manner. If the house helper is under the age of eighteen years. The head of the family shall furnish. Art. Art. 1697. Employment certification. the employer or the househelper may give notice to put an end to the relationship five (5) days before the intended termination of the service. 150. Art. 77 . with pay. free of charge. Every house helper shall be allowed four days' vacation each month. 152. If the duration of the household service is not determined either in stipulation or by the nature of the service. the head of the family or the house helper may give notice to put an end to the service relation. suitable and sanitary quarters as well as adequate food and medical attendance. Indemnity for unjust termination of services. he shall be paid the compensation already earned plus that for fifteen days by way of indemnity. 1696. neither the employer nor the househelper may terminate the contract before the expiration of the term. with sufficient means therefor. Art. 1692. 1694. If the househelper leaves without justifiable reason. except for a just cause. 151. If the period for household service is fixed neither the head of the family nor the house helper may terminate the contract before the expiration of the term. Art. he shall forfeit any salary due him and unpaid. If the duration of the household service is not determined either by stipulation or by the nature of the service. Art. Upon the severance of the household service relation. and medical attendance. Civil Code Art. 1698. In case of death of the house helper. If the period of household service is fixed. any contract for household service shall be void if thereby the house helper cannot afford to acquire suitable clothing. Art. Art. However. Board. 148. he or she shall forfeit any unpaid salary due him or her not exceeding fifteen (15) days. free of charge. House helper shall not be required to work more than ten hours a day.

natural or artificial who. for his account or benefit. — This Rule shall apply to any homeworker who performs in or about his home any processing of goods or materials. at the latest on the first business day of the week. Art. on the fifth day of the month. or other premises used regularly. at the latest. the latter. Coverage and Regulation 2. for his own account or benefit. house. and the work performed therein is under the active or personal supervision by.O 5 now Book IIII Rule XIV. except those situated within the premises or compound of an employer. or causes to be delivered. sub-contractor. — As used in this Rule. in whole or in part.O 5 now Book IIII Rule XIV. or for. SECTION 2. or on behalf of any person residing outside the Philippines. directly or indirectly. that the service shall be terminated at the end of the seventh day from the beginning of the week. Sells any goods. contractor. the following terms shall have the meanings indicated hereunder: (a) "Home" means any room. DEPARTMENT ORDER NUMBER 5 D. or 2. subcontractor or any other person: 1. the "employer" of homeworkers includes any person. directly or indirectly. apartment. Definitions. SEC 2 D. any goods. HOMEWORKERS 1. agent contractor. or through an employee. articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication. 154. Distribution of homework. or (2) Sells any goods or articles for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing. agent. 153. 1699. notice may be given. D. Art. contractor. that the service shall cease at the end of the month. 78 . The regulations or orders to be issued pursuant to this Chapter shall be designed to assure the minimum terms and conditions of employment applicable to the industrial homeworkers or field personnel involved. Delivers. For purposes of this Chapter. General statement on coverage. Regulation of industrial homeworkers. Regulations of Secretary of Labor. (3) If the compensation is paid by the month. Art. the house helper may demand from the head of the family a written statement on the nature and duration of the service and the efficiency and conduct of the house helper. or through any employee. Definition DEPARTMENT ORDER NUMBER 5. or any other person: (1) Delivers or causes to be delivered any goods or articles to be processed in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his direction. notice may be given. which have been furnished directly or indirectly by an employer and thereafter to be returned to the latter. as a dwelling place. Art. (b) "Employer" means any natural or artificial person who. either by himself or through some other person. The employment of industrial homeworkers and field personnel shall be regulated by the government through the appropriate regulations issued by the Secretary of Labor and Employment to ensure the general welfare and protection of homeworkers and field personnel and the industries employing them. Upon the extinguishment of the service relation. SECTION 1. 155.(2) If the compensation is paid by the week. in whole or in part. articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions. or on behalf of any person residing outside the country.

(d) "Processing" means manufacturing.(c) "Contractor" or "sub-contractor" means any person who. (b) An employer. (c) The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages. for the account or benefit of an employer. (b) The employee is given reasonable opportunity to show cause why deductions should not be made. Joint and Several Liability of Employment/ Contractor DEPARTMENT ORDER NUMBER 5. — (a) The employer may require the homeworker to re-do work which has been improperly executed without having to pay the stipulated rate more than once. packing. — No employee. fabricating. Prohibitions DEPARTMENT ORDER NUMBER 5. and (d) The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker's earnings in a week. SECTION 7. or sub-contractor shall make any deduction from the homeworker's earnings for the value of materials which have been lost. in the same manner as if the employees or homeworkers were directly engaged by the employer. Coverage 79 . or sub-contractor need not pay the homeworker for any work which has been done on goods and articles which have been returned for reasons attributable to the fault of the homeworker. contractor. SEC 13 7. 6 TO 9 Book IIII Rule XIV. wrapping or handling any material. In the event that such contractor or sub-contractor fails to pay the wages or earnings of his employees or homeworkers as specified in this Rule. soiled or otherwise damaged unless the following conditions are met: (a) The homeworker concerned is clearly shown to be responsible for the loss or damage. 3. to the extent that such work is performed under such contract. disposed of or distributed in accordance with the direction of the employer. SECTION 5. SEC 10 9. 6. finishing. altering. 4 AND 6 4. Medical Dental and Occupational Safety a. Book IIII Rule XIV. Enforcement DEPARTMENT ORDER NUMBER 5. SEC 11 Book IIII Rule XIV. Registration DEPARTMENT ORDER NUMBER 5. repairing. 5. destroyed. Conditions of Employment/ Deductions DEPARTMENT ORDER NUMBER 5. Conditions for payment of work. — Whenever an employer shall contract with another for the performance of the employer's work. delivers or caused to be delivered to a homeworker goods or articles to be processed in or about his home and thereafter to be returned. contractor. Deductions. it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter's sub-contractor shall be paid in accordance with the provisions of this Rule. such employer shall be jointly and severally liable with the contractor or subcontractor to the workers of the latter. Liability of employer and contractor. SECTION 4.

the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order. whether operating for profit or not. in which case. It shall be the duty of any employer to provide all the necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in case of emergency. in the case of those engaged on part-time basis. Assistance of employer. no employer shall engage the services of a physician or a dentist who cannot stay in the premises of the establishment for at least two (2) hours. where no registered nurse is available. 157. It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of: a. Section 26) c. hazardous workplaces for purposes of this Article. Coverage. When Required Art. including the Government and any of its political subdivisions and government-owned or controlled corporations. d. subject to such regulations as the Secretary of Labor and Employment may prescribe to insure immediate availability of medical and dental treatment and attendance in case of emergency. the physician and dentist may be engaged on retainer basis. When Required 80 . the services of a graduate first-aider shall be provided for the protection of workers. 2. When emergency hospital not required. in the case of those employed on fulltime basis. The development and enforcement of dental standards shall continue to be under the responsibility of the Bureau of Dental Health Services of the Department of Health. Employer Assistance Book IV Rule II SECTION 5. The employer shall take steps for the training of a sufficient number of employees in first-aid treatment. Where the undertaking is non-hazardous in nature. Every employer shall keep in his establishment such first-aid medicines and equipment as the nature and conditions of work may require. First Aid Treatment Art. First-aid treatment. Emergency Medical and Dental Services 1. and c. 161. b. training of supervisor or technician 1. and an emergency clinic. dentist and a full-time registered nurse as well as a dental clinic and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees when the number of employees exceeds three hundred (300). which employs in any workplace one or more workers. and not less than eight (8) hours. Emergency medical and dental services. Art. In cases of hazardous workplaces. in accordance with such regulations as the Department of Labor and Employment shall prescribe. Training of personnel in safety and health. — This Rule shall apply to all employers. Safety and Welfare Benefits RULE I Medical and Dental Services SECTION 1. The Secretary of Labor and Employment shall provide by appropriate regulations.BOOK FOUR Health. 570-A. 156. The services of a full-time registered nurse when the number of employees exceeds fifty (50) but not more than two hundred (200) except when the employer does not maintain hazardous workplaces. The services of a full-time physician. — Every employer shall take steps to train a sufficient number of his supervisors or technical personnel in occupational safety and health. 158. The requirement for an emergency hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic which is accessible from the employer’s establishment and he makes arrangement for the reservation therein of the necessary beds and dental facilities for the use of his employees. when the number of employees exceeds two hundred (200) but not more than three hundred (300). (As amended by Presidential Decree NO. When Not Required Art. b. The services of a full-time registered nurse. Occupational Safety and Health Standards. a part-time physician and dentist. An employer may observe the following guidelines in the training of his personnel: e.

the test and approval for safe use of materials. When Not Required Chapter II OCCUPATIONAL HEALTH AND SAFETY Art. functional capacity. through appropriate regulations. 162. The Department of Labor and Employment shall develop and implement training programs to increase the number and competence of personnel in the field of occupational safety and industrial health. The Secretary of Labor and Employment shall. Research. Art. (d) In every hazardous establishment or workplace having over two hundred (200) workers each shift. however. equipment and other safety devices and the approval of f. techniques and approaches for dealing with occupational safety and health problems. pressure vessels and pipings and electrical installations. Art. He shall be appointed as secretary of the safety committee therein. Administration of safety and health laws. programs to ensure safe and healthful working conditions in all places of employment. 164. An employer may observe the following guidelines in the training of his personnel: (e) The employment of a full-time safety man not be required where the employer enters into a written contract with a qualified consulting organization which shall develop and carry out his safety and health activities. Art. by appropriate orders. The Department of Labor and Employment shall be solely responsible for the administration and enforcement of occupational safety and health laws. and to develop medical criteria which will assure insofar as practicable that no employee will suffer impairment or diminution in health. 163. collect reasonable fees for the inspection of steam boilers. or life expectancy as a result of his work and working conditions. a. Such safety man shall be the secretary of the safety committee. to discover latent diseases by establishing causal connections between diseases and work in environmental conditions. at least two of its supervisors shall be trained and a full-time safety man shall be provided. Training of personnel in safety and health. at least two of its supervisors or technical personnel shall be trained and one of them shall be appointed full-time safety man and secretary of the safety committee therein. (b) In every non-hazardous establishment or workplace having over four hundred (400) workers per shift. Safety and health standards. b. (c) In every hazardous establishment or workplace having from twenty (20) to two hundred (200) workers each shift. and update existing. The provisions of this Section shall be made mandatory upon orders of the Secretary of Labor and Employment as soon as he is satisfied that adequate facilities on training in occupational safety and health are available in the Department of Labor and Employment and other public or private entities duly accredited by the Secretary of Labor and Employment. regulations and standards in all establishments and workplaces wherever they may be located. Book IV Rule II SECTION 5. Provided. Training programs. The Secretary of Labor and Employment may. at least one of it supervisors or technical man shall be trained who shall work as part-time safety man. 165. It shall be the responsibility of the Department of Labor and Employment to conduct continuing studies and research to develop innovative methods. — Every employer shall take steps to train a sufficient number of his supervisors or technical personnel in occupational safety and health. 2. Enforcement or DOLE obligations 81 . chartered cities may be allowed to conduct industrial safety inspections of establishments within their respective jurisdictions where they have adequate facilities and competent personnel for the purpose as determined by the Department of Labor and Employment and subject to national standards established by the latter. at least one of the supervisors or technical personnel shall be trained in occupational health and safety and shall be assigned as part-time safety man. That the consultant shall conduct plant visits at least four (4) hours a week and is subject to call anytime to conduct accident investigations and is available during scheduled inspections or surveys by the Secretary of Labor and Employment or his authorized representatives. set and enforce mandatory occupational safety and health standards to eliminate or reduce occupational safety and health hazards in all workplaces and institute new.(a) In every non-hazardous establishment or workplace having from fifty (50) to four hundred (400) workers each shift.

Coverage.plans for such materials. medical. The provisions of this Title shall apply to all establishments or undertakings. 6: TITLE I: Termination of Employment Section 1. charitable and religious institutions and organizations in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. Employee Classification – 280 to 281 82 . including educational. medical. whether such service is continuous or broken. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. Art. — This Rule shall apply to all establishments and undertakings. 5. equipment and devices. The fee so collected shall be deposited in the national treasury to the credit of the occupational safety and health fund and shall be expended exclusively for the administration and enforcement of safety and other labor laws administered by the Department of Labor and Employment. as amended. 280. 5. An employee who is allowed to work after a probationary period shall be considered a regular employee. Omnibus Rules Book VI (Post Employment) Sec 1. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. (a) Regular employment. whether operated for profit or not. 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.The provisions of written agreements to the contrary 1. 281. Administration and enforcement. whether for profit or not. 209. Employee Classification Omnibus Rules Book VI (Post Employment) Sec 1. 278. 209 See: NHI Law Art. The Philippine Medical Care Plan shall be implemented as provided under RA 6111. whether operated for profit or not. may be authorized by the Regional Office to investigate accidents. Coverage – 2. (b) Every establishment or workplace shall be inspected at least once a year to determine compliance with the provisions of this Rule. Special inspection visits. worker or a labor union in the establishment III. Probationary employment. 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. 5. That any employee who has rendered at least one year of service. conduct surveys requested by the Bureau of Working Conditions. Regular and casual employment. charitable and religious institutions and organizations in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. 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. follow-up inspection. Probationary employment shall not exceed six (6) months from the date the employee started working. Art. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. 6: TITLE I: Termination of Employment Section 1. Coverage. however. Article 166 to 208 is repealed by the SSS Law of 1997 Re: Art. . unless it is covered by an apprenticeship agreement stipulating a longer period. including educational. Art. Coverage. Medical care. 6: TITLE I: Termination of Employment Section 5. Book IV Rule II SECTION 8. — This Rule shall apply to all establishments and undertakings. — (a) Every employer shall give to the Secretary of Labor and Employment or his duly authorized representative access to its premises and records at any time of the day and night when there is work being undertaken therein for the purpose of determining compliance with the provisions of this Rule. Omnibus Rules Book VI (Post Employment) Sec 1. recommendations or to conduct investigations or inspections upon request of an employer.

when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. terminated. 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. The contracts were not of Romares’ temporary employment but a clear circumvention of the employee’s right to security of tenure. . employment shall be deemed regular for purposes of Book VI of the Labor Code where employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. Artemio Romares was employed by PILMICO Foods Corporation in its Maintenance/Projects/Engineering Department to paint. (d) In all cases of probationary employment. (b) Where the work is neither learnable nor apprenticeable. the period of probationary employment shall be limited to the authorized learnership or apprenticeship period. he was assigned to the same position. that any employee who has rendered at least one year of service. Both of which were not complied with by PILMICO. Thus this petition. Notwithstanding the foregoing distinctions. is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. (c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause. NLRC 83 .) Those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer 2. except where the employment has been fixed for a specific project or undertaking. work or service which is merely incidental to the business of the employer. (b) Casual employment. the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. The LA agreed with him saying that the records revealed that he was hired. NLRC which are: 1.There is probationary employment where the employee. and shall be subject to the duties and obligations. As for his illegal dismissal the 2 requisites laid down in National Service Corp v. and rehired again 3 times in a span of more than 3 years and performed the same functions in the same department. The court cited Brent School v. The court found the petition meritorious because the petitioner’s work with the company as a mason is usually necessary and desirable in the business and trade of PILMICO and during each rehiring. Zamora which laid down criteria under which the “term employment” cannot be said to be in circumvention of the law of security of tenure (279. They said that the applicable rule is Art 280.) Those who have rendered at least one year of service whether continuous or broken. NLRC ruled that the termination was due to the expiration of the contracts and reversed the ruling f the LA.There is casual employment where an employee is engaged to perform a job. repair and conduct maintenance on the Corporation’s business premises.LC) a. work or service is for a definite period made known to the employee at the time of engagement: Provided. "Probationary employment shall be governed by the following rules: (a) Where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor and Employment. Upon his dismissal from the company he filed a complaint with the LA for illegal dismissal. which is applicable. upon his engagement. . In Kimberly Independent Labor Union v. whether such service is continuous or not.) Notice which apprises the employee of particular acts or omissions 2. he shall be deemed a regular employee. Where no standards are made known to the employee at that time. Employer recognition  Romares v. Hon. every employee shall be entitled to the rights and privileges. Probationary employment. work or service to be performed is seasonal in nature and the employment is for the duration of the season.notwithstanding and regardless of the oral agreements of the parties.) Subsequent notice which informs the employee of the employer’s decision to dismiss him. the completion or termination of which has been determined at the time of the engagement of the employee or where the job. the court classified 2 kinds of regular employees 1. the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working. and such job. The LA ruled that Romares falls within the 2nd classification and thus a regular employee. as may be granted by law to regular employees during the period of their actual employment. LC which governs employment contracts for fixed or temporary periods." Section 6. Franklin Drilon.

) Fixed Period of employment was knowingly and voluntarily agreed upon by the parties without any force. However. NLRC defined a probationary employee as one who is on trail by an employer who determines whether he is qualified for permanent employment. She was dismissed in 1991. b.) ER and EE dealt with each other in equal terms with no moral dominance exercised by the former on the latter. NLRC and Victoria Abril c. The court allowed the petition for relief despite procedural defect of filing the motion for reconsideration three days late. duress or improper pressure. LC. The court found no merit in the company’s petition. IPGC notified ITC of the expiration of the lease contract in August 1990 and its intention not to renew the same. ITC notified the DOLE and its workers of the plant’s shutdown due to the non-renewal of anti-pollution permit that expired in April 1990. he cannot be terminated. The court also held that the right to close the operation of an establishment or undertaking is one of the authorized causes in terminating employment of workers. to file a complaint against ITC and IPGC for illegal dismissal. They hired 387 workers. This prompted Virgilio Ababon. 1985 for a period of five years. Management Prerogative  Industrial Timber v. Therefore the dismissal is illegal and the petition is dismissed. NLRC reversed the decision thus this petition. and 84 . it was dismissed for being filed out of time. CA set aside the decision of the NLRC. probationary employees are also afforded by the Labor Code with security of tenure. et al. International Catholic Migration v. Victoria Abril was employed by Philippine Federation of Credit Cooperatives (PFCCI) in different positions within the company such as secretary in 1985 and cashier and again as secretary in 1988. Art 280 defines 3 kinds of employees: 1. IPGC took over the plywood plant after it was issued a Wood Processing Plant Permit which included the anti-pollution permit. (b) the cessation of business must be bona fide in character. ITC notified the Department of Labor and Employment (DOLE) and its workers that effective March 19. the present consolidated petitions. Three requirements are necessary for a valid cessation of business operations: (a) service of a written notice to the employees and to the DOLE at least one month before the intended date thereof.) Casual employees: neither regular nor private. it can be seen that the stipulations are ambiguous and thus because a contract of employment is a contract of adhesion. Article 283 of the Labor Code provides that a partial or total closure or cessation of operations of establishment or undertaking may either be due to serious business losses or financial reverses or otherwise. it must be construed strictly against the party who prepared it. 1990 with an advice for all the workers to collect the benefits due them under the law and CBA. appealed to the NLRC. hence. Ababon. shortly after resuming her position.) Project employees: those whose employment has been fixed for a specific project (only for the duration of the season) 3. the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code.) Regular employees: those whose work is necessary and desirable to the usual business of the employer 2. The court held that none of the requisites were complied with by PILMICO and thus the petition is granted. The petitioners argue that Abril is a casual employee under Art 280. Employer Determination/ Designation  Phil Federation v. she gave birth and upon her return in Nov 1989. However. Ababon Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant leased to Industrial Timber Corporation (ITC) on August 30. NLRC ordered the reinstatement of the employees to their former positions. 1990 it will undergo a “no plant operation” due to lack of raw materials. Upon construing the contract. except for a just cause. by the DENR on the same day the ITC ceased operation of the plant. et al. she found that she was already replaced. She then filed a case for illegal dismissal which was dismissed by the LA for lack of merit. (with consent) 2. LA ruled for ITC. she accepted the offer of the position of Regional Field Officer as evidenced by the contract prepared by PFCCI which stipulated tat respondent’s employment status shall be probationary for 6 months. ITC and IPGC filed a Motion for Reconsideration.1. Both parties filed their respective motions for reconsideration which were denied. This was followed by a final notice of closure or cessation of business operations on August 17.

75. That any employee who has rendered at least one year of service. unless it is covered by an apprenticeship agreement stipulating a longer period. the expiration of the anti-pollution permit. P50. 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. c. The court said that where dismissal is based on an authorized cause under Article 283 of the Labor Code but the employer failed to comply with the notice requirement.00 to each employee was awarded as nominal damages. employment shall be deemed regular for purposes of Book VI of the Labor Code where employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. However.000. Omnibus Rules Book VI Rule I Sec 5 A&B and 6 Section 5.(c) payment to the employees of termination pay amounting to one month pay or at least one-half month pay for every year of service. 1990 due to the expiration of the anti-pollution permit. the completion or termination of which has been determined at the time of the engagement of the employee or where the job. work or service is for a definite period made known to the employee at the time of engagement: Provided. which shall not exceed three (3) months. work or service to be performed is seasonal in nature and the employment is for the duration of the season. and d. A commitment to employ the learners if they so desire. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. whether such service is continuous or broken. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage. 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. we find that ITC did not comply with the notice requirement. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. Art. Regular Employees Art. But although the closure was done in good faith and for valid reasons. 85 . . Learnership agreement. 281. The names and addresses of the learners. which agreement shall include: a. Any employer desiring to employ learners shall enter into a learnership agreement with them. (a) Regular employment. that any employee who has rendered at least one year of service. ITC notified its employees and the DOLE of the ‘no plant operation’ on March 16. Art. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. CA reversed. The court found that ITC’s closure or cessation of business was done in good faith and for valid reasons. work or service which is merely incidental to the business of the employer. This was followed by a ‘shut down’ notice dated June 26. as regular employees upon completion of the learnership. and such job. b.The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties. except where the employment has been fixed for a specific project or undertaking. A. Records reveal that the decision to permanently close business operations was arrived at after a suspension of operation for several months precipitated by lack of raw materials used for milling operations. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. The duration of the learnership period. Probationary employment shall not exceed six (6) months from the date the employee started working. 1990 due to lack of raw materials. NLRC affirmed. whichever is higher. An employee who is allowed to work after a probationary period shall be considered a regular employee. this shutdown was only temporary as ITC assured its employees that they could return to work once the renewal is acted upon by the DENR. 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. whether such service is continuous or not. 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. . Regular and casual employment. the sanction should be stiff because the dismissal process was initiated by the employer’s exercise of his management prerogative.There is casual employment where an employee is engaged to perform a job. (b) Casual employment. Probationary employment. 280.

the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. which is applicable. Petitioners filed a Complaint against respondent for unfair labor practice and illegal dismissal with claims for regularization. 86 . . the Kasunduan was not only vague." Section 6. the completion of which has been determined at the time of employment or engagement of the employee. for every delivery truck. Petition denied. Zamora. Thus this petition. He was demoted to radio operator in 1999 for unknown reasons. Estoquia was hired by Poseidon Fishing as a Chief Mate and was promoted to Boat Captain 5 years later (1993). he shall be deemed a regular employee. and shall be subject to the duties and obligations. who was supposed to carry the records was not able to refute the payrolls and SSS shown by Estioquia. The test is WON the project employees were assigned to carry out a specific project for a duration which was already specified to the employees at the time they were engaged. "Probationary employment shall be governed by the following rules: (a) Where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor and Employment. It was shown by the respondent through his SSS employee contribution and payrolls that he was repeatedly hired as an employee of the company for 12 years. NLRC affirmed the LA. NLRC that fishing is not seasonal but continuous in nature. (b) Where the work is neither learnable nor apprenticeable. Estoquia filed for illegal dismissal with the LA who ruled in his favor. Where no standards are made known to the employee at that time.There is probationary employment where the employee.Notwithstanding the foregoing distinctions. he failed to record a 7:25am call in the log book but was able to record it after the 7:30 call. In Pakistan International Airlines Corporation v. the period of probationary employment shall be limited to the authorized learnership or apprenticeship period. he earned the status of regular employee after 12 years of service. Jimy S. (d) In all cases of probationary employment. the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working. Also. This prompted Poseidon to demand from him an explanation and he was instructed the same day to collect his separation pay from the company. every employee shall be entitled to the rights and privileges. when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. These were not complied with by the petitioner. Coca Cola Eddie Pacquing was one of the sales route helpers or cargadores-pahinantes of Coca-Cola Bottlers Philippines.) Nature of Work  Poseidon Fishing v. NLRC  Eddie Pacquing v. as may be granted by law to regular employees during the period of their actual employment. it also failed to provide an actual of specific date or period for the contract. They also say that deep sea fishing is seasonal in nature and thus he was only a project employee (assigned to carry out a specific project for the project’s duration and scope only). Ople it ruled that the critical consideration is the presence or absence of a substantial indication that the period specified in an employment agreement was designed to circumvent the security of tenure of regular employees. they should be disregarded for being contrary to public policy. the court held in Philex Mining v. The court held that in Brent v. Poseidon. upon his engagement. is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. In the case at bar. project employees were defined as 1) those hired for a specific project or undertaking 2. The LA ruled that even if he was hired as a casual employee. In the same case. Petitioners filed their memorandum of appeal with the NLRC for the reversal of the aforesaid decision. Petitioners were part of a complement of three personnel comprised of a driver. recovery of benefits. Estoquia is a regular employee. Probationary employment. i. (c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause. The petitioner claims that he was paid on a por viaje scheme and that Estoquia was hired on a fixed term contract.Respondent denied liability to petitioners and countered that petitioners were temporary workers who were engaged for a five-month period to act as substitutes for an absent regular employee. On July 2000. Inc. a salesman and a regular route helper. Petitioners alleged that they should be declared regular employees of respondent since the nature of their work as cargadores-pahinantes was necessary or desirable to respondent's usual business. the acid test in considering fixed term contracts as valid if from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee.

However. The question is whether or not petitioner was illegally dismissed by respondents. NLRC affirmed LA. The NLRC reversed the LA holding that the workers were already regularized and the NLRC pierced the corporate veil of the companies holding they solidarily liable for the payment of wages. Dela Cruz v. It was denied. The basic law on the case is Article 280 of the Labor Code.S. the contracts described the construction workers as project employees. They were asked to explain why they refused to sign and were later on dismissed. It was petitioner's position that he was already a regular employee when his services were terminated.  Dante D. The court held it is sufficient. Thus this petition saying that the petitioners were merely trying to formalize the workers’ status as project employees. The court found that the principal test is whether the project employees are 87 . Thus this petition. Respondent Elite Shipping A. The applicable test is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. acting as representative. insisted that he was then still on probationary status. if he has been performing the job for at least one year the law deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of that activity to the business or trade of the employer. It held that the failure of all the petitioners to affix their signatures in the verification and certification against non-forum shopping rendered the petition dismissable. In 1989. petitioners are entitled to security of tenure. Zamora the court already held that seafarers are not covered by the term regular employment they are considered contractual employees whose rights and obligations are governed primarily by the POEA Standard Employment Contract for Filipino Seamen in no case shall a contract of employment concerning seamen exceed 12 months. Respondents claim that they are working under the Lao Group of Companies: Tomas Lao Corp. Petition GRANTED. Petitioner filed a motion for reconsideration of the CA decision. sharing a common interest and having a common single cause of action against respondent. In Brent School. Petitioner thereafter filed a complaint for illegal dismissal with claims for the monetary equivalent of the unexpired portion of his contract. Lao (Managing Director of LVM and president of T&J) issued a memorandum asking the employees to sign employment contract forms allegedly for audit purposes.) Extended Period  Tomas Lao Construction v.LA dismissed the complaint NLRC affirmed the LA. It is an accepted maritime industry practice that the employment of seafarers is for a fixed period only. for one of the plaintiffs. CA reversed NLRC because it deemed the logbook entries to be sufficient compliance with the first notice requirement of the law. In using the terms "probationary" and "permanent" vis-Ã -vis seafarers. In the instant case where petitioners have filed their case as a collective group. He was subsequently informed of hid dismissal. hired petitioner Dante D. to sign the certificate provided that the plaintiffs share a common interest in the subject matter of the case or filed the case as a collective raising only one common cause of action or defense. They filed a case with the LA who ruled that the workers were project employees and agreed with the Lao company that they were merely trying to formalize their position as project employees. Even if he is a project or season employee. Inc. The employer is bound to furnish him two notices: (1) the written charge and (2) the written notice of dismissal (in case that is the penalty imposed). All but one refused to sign the contract. NLRC Respondents filed individual complaints against petitioner for illegal dismissal. Petitioner was deployed UAE> His chief engineer expressed dissatisfaction over petitioner's performance and wrote this is a log book. The repeated rehiring of respondent workers and the continuing need for their services clearly attest to the necessity or desirability of their services in the regular conduct of the business or trade of petitioner company. Being regular employees of respondent. it should also comply with the rudimentary requirements of due process. de la Cruz as third engineer. on the other hand. The contract of employment was for a period of nine months. Contrary to the decision of the CA the logbook entries did not substantially comply with the first notice because it was only a vague and general accusation and the nature of the acts or omissions relied upon as basis for the termination of petitioner's employment were not given. what was really meant was "eligible for re-hire” and not employees. The court held that an employer has the burden of proving that an employee's dismissal was for a just cause. Petition is hereby GRANTED. respondents. Maersk Filipinas Crewing ii. v. Thomas and James Developers. Hence. The petitioners filed a Petition for Certiorari with the CA who dismissed the petition. this petition. An employment shall be deemed to be casual if it is not covered by the preceding paragraph. and LVM Construction Company. The issue left to be resolved is WON the petitioners are regular employees of the respondent. LA ruled for petitioner. which enter into joint venture agreements with each other and lease tools and equipment to one another.

and 2) Non-Project employees. he shall be entitled to reinstatement with backwages. Nonproject employees are those employed by a construction company without reference to any particular project. For this reason. her services were terminated. Specific undertaking means: a special type of venture or project whose duration is coterminous with the completion of the project. LA. 88 . If such an employee is terminated without a clearance from the Secretary of Labor. The court held that she was already a regular employee. the company is not required to obtain a clearance from the Secretary of Labor in connection with such termination. 280. Her work is not temporary just because her employment hinged from contract to contract. her tenure having exceeded six months. 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. the nature of the work is not seasonal or specific but rather. employees terminated upon the completion of their phase of the project are not entitled to separation pay and exempt from the clearance requirement. the fact that the workers were continuously being rehired due to the demands of the petitioners business satisfied the court as proof of their regular employment. there are two types of employees in the construction industry. What is required of the company is a report to the nearest Public Employment Office for statistical purposes. Luzviminda Petilla was hired as a clerk typist and was given 5 extensions after which. Contrary to the allegations of the petitioner. the following policy instructions are hereby issued for the guidance of all concerned: Generally. Project employees are those employed in connection with a particular construction project. Regular and casual employment. the Lao corporations should have immediately submitted the report of termination as required by DOLE for termination of project employees. If a construction project or any phase thereof has a duration of more than one year and a Project employee is allowed to be employed therein for at least one year. Petition Dismissed. In other words. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties. In the case at bar. namely: 1) Project employees. NLRC B.) Repeated renewal of contract  Beta Electric Corp v. Petition is dismissed. The employees of a particular project are not terminated at the same time. this does not apply to the case at bar. iii. regardless of the number of projects in which they have been employed by a particular construction company. Moreover. Project Employees – 1st paragraph 280 Policy Instructions 20 on 1977 entitled "Stabilizing Employer-Employee Relations in the Construction Industry". The court also reiterated their ruling that project employees whose service has been employed long after the supposed project has been finished are considered regular employees. the duration of which are specified at the time the employees were engaged for the project. 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. it was engaged as an activity which I necessary and desirable in the usual business of the employer. Some phases of the project are completed ahead of others. the completion of a phase of the Project is the completion of the project for an employee employed in such phase. such employee may not be terminated until the completion of the project or of any phase thereof in which he is employed with a previous written clearance from the Secretary of Labor. The court upheld NLRC.assigned to carry out specific project or undertaking. provides in relevant part: "In the interest of stabilizing employer-employee relations in the construction industry and taking into consideration its unique characteristics. Art. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed. Moreover. NLRC and the court ruled in her favor.

19 (series of 1993) dated April 1. Project employees terminated because their services are no longer needed in their particular phase of the project are not entitled to separation pay and are exempt from the clearance requirement. casual employees. second.On the other hand. upon the completion of the probationary period. (e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work. 19. 1993 of the Department of Labor and Employment. [April 1. provided they are not replaced. and third. If they are employed in a particular project. However. In ABC. probationary employees. there are three (3) types of non-project employees: first. or termination of the regular holder thereof. (b) Such duration. using the prescribed form on employees’ terminations/dismissals/suspensions. Regular employees are those who have completed the probationary period or those appointed to fill up regular positions vacated as a result of death. the Supreme Court has ruled that “the length of service of a project employee is not the controlling test of employment tenure but whether or not 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. are non-project employees or employees for an indefinite period.’” 89 . Normally. On the other hand. casual employees are those employed for a short term duration to perform work not related to the main line of the business of the employer. 20 was subsequently superseded by Department Order No. (f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies. NLRC. while not employed and awaiting engagement. as well as the specific work/service to be performed. is defined in an employment agreement and is made clear to the employee at the time of hiring. Policy Instructions No. Probationary employees are those who. the following are considered indicators of project employment: (a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable. 19 of 1993 According to the Department of Labor and Employment Order No. 1993] Series of 1993. D. If they are replaced. if considered employees of the construction company while in the work pool. if the workers in the work pool are free to leave anytime and offer their services to other employers then they are project employees employed by a construction company in a particular project or in a phase thereof. are entitled to regularization. less and less employees are required as the phase draws closer to completion. No. (c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged. (d) The employee. Inc. is free to offer his services to any other employer. resignation. they shall be entitled to reinstatement with backwages.O. retirement. Generally. Members of a work pool from which a construction company draws its project employees. xxx xxx xxx. regular employees. the completion of the project or of any phase thereof will not mean severance of employer-employee relationship. v. those employed in a particular phase of a construction project are also not terminated at the same time.

Being a regular employee.. As observed by the court through the employment contracts. A “day” as used herein. Imbuido worked for a specific undertaking. there is a presumption that the services of the project employee has been terminated with no valid cause prior to the expiration of the period of his project employment. project employees whose services are terminated because they have no more to do or their services are no longer needed in the particular phase of the project are not by law entitled to separation pay. She was employed for a span of 3 years (August 1988 to October 1991) wherein 13 separate contracts of employment were entered into by the petitioner. To rule otherwise would be to allow circumvention of labor laws in industries not falling within the ambit of Policy instruction 20 or DO 19. Project employees who have become regular shall be entitled to separation pay. such project employee may not be considered regular. she being a project employee. until the date of completion of the project. necessary and indispensable to the usual business or trade of the employer. the project employee can no longer be reinstated. Although she is a project employee. Vivian Imbuido was employed as a data encoder by International Information Services Inc. NLRC it was held that a project employee or a member of the work pool may acquire the status of a regular employee when 1. Instead. In such a case. what are the rights of a project employee under labor laws if he has been illegally dismissed? Well settled is the rule that the burden of proving that an employee was lawfully dismissed lies with the employer. inclusive of allowances and other benefits.” The rights of an illegally dismissed project employee is based only in the current project contract where he was illegally terminated. although is may not be known exactly when. 19. in the absence of a “day certain” agreed upon by the parties for the termination of their relationship. i. he shall be entitled to the payment of his salary and other benefits corresponding to the unexpired portion of his employment. specifically from the time of the termination of his employment. Imbuido filed a case for illegal dismissal claiming that she was fire not because of the volume of her work but because she signed a petition for certification election among the rank and file employees of the company. This means that where the final completion of a project or phase thereof is in fact determinable and the expected completion is made known to the employee. the illegally dismissed project employee is entitled to reinstatement with full back wages.) Definition  Imbuido v.2 of Department Order No. Considering the above facts and circumstances. in Maraguinot v. there is a continuous rehiring of project employees even after a cessation of the project 2. The company insisted that she was terminated due to her work as well as because of the expiration of the complainant’s contact. which states: “Project employees whose aggregate period of continuous employment in a construction company is at least one year shall be considered regular employees. notwithstanding the one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments in the same project or phase of the object. NLRC 90 .. 19. Section 3. The SC ruled that petitioner is a project employee using the principal test which is determining WON the employee was assigned to carry out a specific project.3(a) of Department Order No. If the employer fails to prove that the project was already completed. the tasks performed by the alleged project employee are vital. Series of 1993 states that: “Project employees are not entitled to separation pay if their services are terminated as a result of the completion of the project or any phase thereof in which they are employed. If the project has already been completed during the pendency of the labor suit. the duration and scope of which were specified at the time the employee was engaged for that project. is understood to be that which must necessarily come. the completion or termination of which had been determined at the time of her engagement. She was terminated allegedly due to low volume of work. Likewise. Imbuido is entitiled to security of tenure (Art 279).It is also worthy to note Clause 3. Thus she filed a petition for certiorari in the SC. The LA ruled in favor of petitioner and ordered her reinstatement finding her to be a regular employee while the NLRC reversed the decision and ruled that she is a project employee employed for a specific project of the company. each lasting 3 months. Thus employers who hire project employees are mandated to state the actual basis for the project employees’ dismissal. Petition is granted.

a specific project or undertaking 2. A project employment terminates as soon as the project is completed. the exception is that if it is fixed for a specific project or undertaking. the private respondents are non-project employees ii. They embarked on a 5 year program using 100% scrap venturing into a ship breaking operation wherein a ship would be cut up into large chunks and brought to land to be further cut into smaller sizes.. the completion of which has been predetermined at the time of engagement or where the services to be performed is seasonal in nature. Thus this petition. Uy insists that the employees are just project employees and as such they were validly terminated. The court held that. The court held that Art 280 contemplates on 3 kinds of employees: i.. NLRC + National Steel Corporation NSC is one of the biggest modern steel mills in southeast asia. Petition dismissed.. There are two kinds of projects a business or industry may undertake 1. were also not presented. a project may refer to a particular job or undertaking that is not within the regular business of the corporation NSC’s project falls under the second type. 20: members of a work pool from which a construction company draws its project employees are non-project employees if considered employees of the construction company while in the work pool. Petitioner filed a motion for reconsideration and a manifestation to admit and consider evidence. they remain project employees. Petitioner asserted he was a regular employee having been engaged to perform works which are "usually necessary or desirable" in respondents' business. In the present case. The NSC association filed a notice of strike with the company for illegal termination. According to Policy Instructions No. A complaint filed by petitioner against Undaloc Construction and/or Engineer Cirilo Undaloc for illegal dismissal by Virgilio Sapio saying that he had been employed as watchman for 3 years when he was terminated on the ground that the project he was assigned to was already finisished.) project employment  Uy v. 280 stating that employees working for more than 1 year are deemed to be regular employees pertain to casual and not project employees. NLRC  Villa v. project employees (whose employment has been fixed for a specific project the termination of which has been predetermined at the time of engagement) iii. This was stopped due to high costs as well as lack of ships. carpenters) with illegal dismissal. Undaloc 91 . were charged by his employees (masons. a project referring to a particular job or undertaking that is within the usual business of company but is distinct and separate from other undertakings of the company 2. The La ruled for the company stating that the short periods wherein the company hired the petitioners clearly show the intent of the company to hire them on a per project basis only. the same is considered as casual or temporary in nature. casual employees (those who are neither regular nor project employees) The court held that contracts of project employment are valid under our law. Thus this petition.Rizalino Uy. But upon appeal. If they are employed in a particular project. The employees claimed that they also rendered services in their other business of UY. The LA dismissed the complaints for lack of merit and NLRC reversed the LA after finding private respondents to be regular employees and not project employees. However.. Regardless of how many projects the employees worked on. a private contractor. Felix Villa and the other petitioners were the workers for this particular project and were terminated from their service once the project was stopped.. the completion or termination of which has been determined at the time of engagement of the employee. Their jobs were continuous and ongoing. the completion of the project or any phase therof will non means severance of EE-ER relationship. for an indefinite period. the NLRC accepted the motion and ruled that project employees are not regular employees within the purview of Art 280 of the LC. laborers. NLRC affirmed the LA upon the factual findings it reviewed saying that the test in determining regularity or employment is the nature of the functions performed which should be necessary and desirable in the usual business or trade of the employer. regular employees (engaged to perform activities which are necessary and desirable in the usual business and trade of the employer) ii.. required to be submitted to DOLE upon termination of project employees. Cirilo Undaloc maintained that petitioner was hired as a project employee and was assigned as watchman from one project to another until the  Sapio v. Motions for reconsideration were denied. Art. Uy did not identify the specific project or the phase of the project for which the employees were hired. The court held that according to 280 of the LC project employees are those workers hired for 1. The services of project employees are coterminous with the project and may be terminated upon the end or completion of the project for which they were hired. Termination reports.

280. Thus this petition. Moreover. It may not be argued that petitioners are subject to the control of the Movie Director and not Viva’s control.termination of the project on 30 May 1998.. Petition is granted. Court of Appeals which deleted the award of salary differential and attorney's fees. that any employee who has rendered at least one year of service. 92 . They claim that they asked for an increase in their wage in accordance with the minimum wage law and that thereafter.) application of rule in non construction industries  Maraguinot v. Petitioners filed for illegal dismissal and the LA declared them to be illegally dismissed. this petition for review on the ground that respondents failed to attach certified true copies of the NLRC's decision and resolution denying the motion for reconsideration. job contracting is permitted id the contractor has substantial capital and creates the job according to his own mean or method. 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. equipment and crew fro another company) This was. he is a regular employee because to rule otherwise would be to prevent the acquisition of tenurial security by project or work pool employees who have already gained the status of employee due to the employer’s conduct. they were asked to sign a blank employment contract and when they refused to sign. The court found in the case at hand that the movie-making equipment are supplied BY Viva and that the associate producer merely leases the equipment from VIVA (Viva’s generators broke down and they had to rent generators. NLRC + Viva Films C. Alejandro Maraguinot and Paulino Enero claim that they have been employed by Viva films as part of their filming crew tasked to load. work or service is for a definite period made known to the employee at the time of engagement: Provided. and 2. whether such service is continuous or broken. the tasks performed by the alleged “project employee” are vital. That petitioner was a project employee became a non-issue beginning with the decision of the Labor Arbiter. 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. Labor Arbiter and NLRC concluded that the entries were susceptible to change or erasure and that that susceptibility in turn rendered the other payroll sheets though typewritten less credible. work or service which is merely incidental to the business of the employer. respondents submitted typewritten and signed payroll sheets. there is continuous rehiring of project employees even after cessation of the project. claims that they contracts producers or associate producers who produce the movies and hire project employees such as petitioner. iii. Regular and casual employment. as found by the court. absent any evidence to the contrary. The court disagrees with the OSG. 2nd paragraph. labor only contracting. Thus. unload and arrange the movie equipment. He should have contested this issue when Undaloc filed a motion for reconsideration of award with the NLRC. The court further held that once these requisites are complied with. Art. Petitioner's bare assertions of fraud do not suffice to overcome the disputable presumption of regularity. . Petition is partially granted. and such job. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided. LA found complainant to be a project employee and his termination was for an authorized cause. According to Sec 8 Rule VIII Book VIII of the Omnibus rules implementing the LS. necessary and indispensable to the usual business or trade of the employer. It is only now before this Court that petitioner proffered the same. good faith must be presumed in this case. whether such service is continuous or not. The court then said that a project employee or a member of the work pool ma acquire the status of a regular employee when the following concur: 1. they are deemed as regular employees.There is casual employment where an employee is engaged to perform a job. Casual Employees Omnibus Rules Book VI Rule 1 Sec 5b Section 5. The appellate court pointed out that allegations of fraud in the preparation of payroll sheets must be substantiated by evidence. Court of Appeals did not subscribe to the common findings of the Labor Arbiter and the NLRC. they were terminated. That any employee who has rendered at least one year of service.. Viva films on the other hand. Petitioner avers that he was paid a daily salary way below the minimum wage provided for by law To counter petitioner's assertions. The OSG rejects their contention that since they were hired for a series of projects. (b) Casual employment. The relationship between Viva and its producers or associate producers are that of agency and the control as to the quality of the film lies with Viva. NLRC reversed the LA. Respondents appealed the award of salary differential to NLRC which sustained the findings of the Labor Arbiter.

He started working again but was later given a notice of termination due to his alleged unsatisfactory performance. insubordination and abandonment of post. Oreta and Co. NLRC affirmed. However. v. i. Oreta and Co. the LA awarded them financial assistance. as a carpenter in its project n Saudi for a period of 12 months. What is the Liability of Livi and California? The court holds that they have become regular employees of California and acquired security of tenure after performing 6 months of servces which was renewed for another 6 months. Fortunato Mercado. LA found no EEER relationship to exist.M. Grulla met an accident which fractured his lumbar vertebrae while working at the jobsite. Petitioners were found to be project employees or seasonal employees and that their employment legally ends upon the completion of the project. California did not show evidence that it had suffered serious business reverses as to warrant valid retrenchment of petitioners. every employee shall be entitled to the rights and privileges. A project employee is defined as to be one whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.Notwithstanding the foregoing distinctions. Prudential Shipping and Management Corporation Deogracias Cansino worked as a seaman in the Medbulk Maritime Management Corporation for a term of 12 mos. Both parties appealed to the NLRC who affirmed the decision of the LA deleting the financial assistance. Even given that he was a project employee. Oreta contends that since he is still a probationary employee. and shall be subject to the duties and obligations." Sixto Grulla was engaged by Engineering Construction and Industrial Development Company (ENDECO) through A. Petitioners signed a 6-month contract. Also the twin requirements of notice and hearing were not complied with. In the case at bar. LA ruled in favor of Sto. v. The court reverses saying that the EE-ER relationship cannot be subject to agreement but rather must be proved through evidence as well as the four fold test. Thus this petition. Nino saying that the workers are not permanent workers because the nature of the terms and conditions of their hiring reveal that they were required to perform phases of agricultural work for a definite period of time only. Petition granted. the court found that Livi contracts out labor in favor of its clients thus falling within the ambit of Labor only contracting. Petition dismissed. The court rules otherwise satying that Grulla was employed in the company for 12 month before he was dismissed and it is clear from the contract that the company hired him as a regular employee and not just a probationary employee. Inc Petitioners were prior employees of Livi Manpower Services who assigned them to work as promotional merchandisers wherein an agreement was made stipulating that California Manufacturing company had no control over the employees and that the assignment shall be on a seasonal and contractual basis. Capt. A. California Manufacturing Co. Thus this petition.M. the ground of unsatisfactory performance is not one of the just causes of dismissal in Art 282. Nino Realty Incorporated +Aurora Cruz  Cansino v.) Nature of Work  A. NLRC ii. Aurora Cruz denied the allegations saying that she engaged the services of petitioners through Sps. Grulla is validly dismissed. as gleaned from the provision of Art 281 in the LC probationary employees may be terminated only for a just cause. they demand for benefits in accordance with the fact that they are regular employees.) One Year Service  Tabas v. NLRC affirmed LA. Grulla filed a complaint for illegal dismissal with the POEA who ruled for Grulla. He was discharged from the hospital 12 days after and he underwent therapy for 2 weeks before he was told that he was physically fit to go back to work. as may be granted by law to regular employees during the period of their actual employment. there was no stipulation in the contract that the latter shall undergo a probationary period and there is no evidence that he has been apprised of is probationary status. LC. NLRC+Sto. Thus this petition.M. The court held that based on the sworn statements of the Mercados.  Fortunato Mercado Sr. NLRC denied the MFR. Several derogatory reports were received by the Captain against Cansino for drunkenness. The issue is WON the employment of Grulla was illegally terminated. 7 members of the crew including Cansino 93 . Petitioners are agricultural workers utilized by private respondents in all phases of the work on the 7 ½ hectares of rice land and 10 hectares of sugar land owned by the company. NLRC dismissed the appeal for lack of merit. Nikolaos Kandylis altered the terms and conditions of the contract asnd changed his position to pumpman. the petitioners were only hired as casuals. Petitioners now allege that they have become regular California employees and demand similar benefits as the employees of California due to their being terminated by the company. 10 days into the job. In the case at bar.

CA reversed. Does the time matter (5 years v.submitted a request for early repatriation because f family problems which were granted. Code of Commerce (Article 302 discusses the mesada who is given the salary of the month. It should have no application to instances when the employee knowingly and voluntarily entered into the contract of employment for a fixed term. Petition granted. Parañaque on probationary employment as a college dean on his appointment as dean was confirmed by AMA’s Officer-in-Charge. 3 months)? Or does the amount of renewing matter (none v. Respondent filed a Complaint for Illegal Dismissal. After four years of constant renewals of her talent contract. The court relied on the Master’s Report signed by the Captain as to the illegal consumption of alcoholic drinks of the crew. does it make him a regular employee??? 94 . Doroteo Alegre was engaged as athletic director by Brent School by virtue of a contract fixed at a specific term of 5 years. she sent a letter to the VP of ABC saying that she was interested in renewing her contract subject to a salary increase. Fixed Term Employees  Brent School v. The Labor Director denied the application and required his reinstatement. Sometime in August 2000. M confused. The court held that the talent contracts are valid but not as to categorizing her as a fixed term employee. Thelma had no choice but to sign her name every 3 months without objection as to maintain the job she loved and the workplace she has grown accustomed to. no force. 14 times)? So if Alegre’s contract was renewed and the again. he filed a complaint for illegal dismissal. Applying the four fold test (selection and engagement. Alegre was given a copy of the application for clearance filed by Brent with the Department of Labor advising the termination of his services stating the ground of completion of contract as its reason. it found that an ER-EE relationship existed and that she was a regular employee. term employment was already recognized as valid due to the Termination pay law (RA1052). Office of the president and applied it to Alegre’s case saying that in a fixed term contract. dismissal. The court cited Escudero v. Alegre filed a protest to his termination with the Labor Director saying his services are usual and necessary to the business of Brent. control) the court found that it applies to the case. the day certain came and his services were terminated. wages. Austria (respondent) was hired by AMA Computer College.  AMA Computer College Paranaque v. in this case Art 280 LC. 1 Respondent Rolando A. She stopped reporting for work after and a month later ABC still has not replied thus prompting Thelma to send a demand letter to ABC asking for her reinstatement as well as backwages. The court held that there is nothing contradictory with fixing the term of employment of an employer who renders usual and necessary services to the company. Although the Labor Code is more strict than the Civil code as to fixed term employments. mes=month in Spanish) and the civil code which repealed the code of commerce specifically provisions of oblicon which discusses contracts with a period. NLRC reversed and ruled for Cansino. the law. Petition denied. Before the advent of the labor code. CA. in a petition for certiorari by ABS. D. no notice is needed as he already knows the dae of its expiration at the time of engagement. Upon appeal to the NLRC. As a regular employee. LA dismissed the complaint. Austria 1 How do you reconcile this with Brent? Shouldn’t ABC have let her work again instead of ignored her “constructive resignation” in order to recognize her services as regularized? The 4 fold test is present in Brent also… but is it necessary to use the 4 fold test as to fixed term employment? E wala namang conflict sa job nila and sa term kasi they know the day certain. forwarding the case to the Secretary of Labor who affirmed the decision. Thus this petition. Thus this petition. those who have worked for more than a year as regular employees. Respondent refuted the charges against him but was placed on preventive suspension and eventually dismissed due to the loss of trust and confidence in hisr credibility as a company officer holding a highly sensitive position. CA Thelma Dumpit-Morillo was employed by the Associated Broadcasting company (ABC) as a newscaster and a co-anchor of Balitang Balita and Live on Five for which her contract of 3 months was constantly renewed. The court held that drunkenness is equivalent to serious misconduct and thus a valid cause of termination in Art 282 of the LC. The school appealed to the office of the president but the appeal was dismissed. For the contract to be valid as a fixed term contract. CA set aside the decision of NLRC. must be given a reasonable interpretation as to reflect the intent of the law which is to prevent the circumvention of the employee right to security of tenure. she is entitled to security of tenure and can be dismissed only for just cause. in the case at hand. She then filed a case of illegal constructive dismissal with the LA who dismissed the complaint. Brent school filed a MFR and the Regional Director denied it. reversed the decision saying that she entered into the contract knowingly and that she was a fixed term employee and not a regular employee according to Art 280. The law also recognizes those who 1. Zamora  Dumpit Murillo v. Upon his return. perform activities necessary and desirable in the usual business and trade of the employer as well as 2. Three months before its expiration. duress or improper pressure should be brought upon the employee thus in effect vitiating her consent. respondent was charged with violating AMA’s Employees’ Conduct and Discipline provided in its Orientation Handbook.

of total working days in one year x Daily rate of 15 days. of days worked/ No. They were given separation pay which was not based on the number of years served but rather based only on the duration of the 1994 season. The court ruled that the petition is not meritorious. The services of an employee who has been engaged on a probationary E. which the petitioners failed to deny or contravene. As to the Luris group. and leaking of test questions filed against him but held that the nature of respondent's employment is one for a fixed term. Petitioners tried to invoke Mercado v. Zamora. there was defective notice given by the petitioner as they did not inform their employees 1 month before their termination which is a requisite under Art 283 LC. which are by practice or tradition rotated among the faculty members. this Petition asking the nature of respondent's employment? And WON he lawfully dismissed? As an exception to the general rule.LA held that respondent substantially refuted the charges of gross inefficiency. the Luris group is entitled to 1 month pay or at least ½ month pay for every year of service. The court found that the business losses pertain only to a unit or division and not the WHOLE business of the petitioner which is the “loss” that is referred to in Art 283 LC. they were informed that their employment has been terminated as of the 1993 season. whichever is higher. Probationary employment shall not exceed six (6) months from the date the employee started working. the financial statement given by the petitioner reflects not only its tobacco business but also its other businesses. As for the Lubat group. these are normally an employment for a fixed term. the court held that separation pay should be at ½ of their average monthly pay times the number of years worked. incompetence. v. Probationary Employees 95 . CIR which ruled that seasonal workers who are called to work from time to time are temporarily laid off during the off-season are not separated from service during this period but are merely considered on unpaid leave until employed. The NLRC and the CA both held that respondent is a regular employee because respondent had fully served the three (3)-month probationary period required in the Handbook. the court ruled that they were illegally dismissed citing Manila Hotel Company v. Seasonal Employees  Phil Tobacco v. Art. 2000 to September 17. The court held that the letter of appointment states that he was officially confirmed as Dean of AMA College. A perusal made by the court shows that there is a net gain made by the petitioner for each year of business. and where fixed terms are a necessity without which no reasonable rotation would be possible. LA decision REINSTATED. This is so that a company will not be able to easily feign excuses to get rid of unwanted employees. in the exercise of its equity jurisdiction. The Luris group is made up of seasonal employees who worked for the 1994 season in the Balintawak plant and was informed that due to serious business losses. NLRC and Magcalas v. For this case. Philippine Tobbaco has 2 groups of employees. Inc. ruling that the closure of the business was due to serious financial losses and thus the termination of employment is due to a legal cause. unless it is covered by an apprenticeship agreement stipulating a longer period. 2000 and that the nature of respondent's employment as dean is one with a fixed term. Parañaque. The court computed a seasonal worker’s separation pay as No. Pacific Plans. The NLRC affirmed the decision upon appeal thus this petition. Hence. Citing Brent School. may look into the records of the case. Art. infact. the court said that as to appointments to the positions of dean. NLRC affirmed with modification. college secretary. the court held in Molina v. that when the findings of the National Labor Relations Commission contradict those of the Labor Arbiter. assistant dean. 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period. It is axiomatic that a contract of employment for a definite period terminates on its own force at the end of such period. Both groups filed a case for illegal dismissal against the petitioner to which the LA ruled that the petitioner should pay separation pay and differential plus attorney’s fees ACCORDING TO THE NUMBER OF YEARS SERVED. The resolution of the second question requires full cognizance of respondent’s fixed term of employment and all the effects thereof. Inc. petitioner planned to move its operations to Ilocos Sur. Thus. NLRC F. 281. effective from April 17. Petition is GRANTED. the Lubat group and the Luris groups The Lubat group is composed of seasonal workers who were not rehired for the next year’s season (1994) at the start of the season. Serious business losses as contemplated by Art 283 was not proved by the petitioners. Probationary employment. NLRC but the court ruled that the facts in this case are different from those cases because Mercado and Magcalas offered their services to other farm owners which makes them project employees. this Court.

iron trays etc. (d) In all cases of probationary employment. traditions. Court of Appeals 96 . Javier that probationary employees who are unjustly dismissed from work during the probationary period shall be entitled to reinstatement and payment of full backwages. Thus this petition for review. Apprenticeship agreements providing for wage rates below the legal minimum wage. which shall not exceed three (3) months. Hon. Inc. 1986) Art. he shall be deemed a regular employee. the period of probationary employment shall not exceed six months reckoned from the date the employee actually started working. Respondent M.Y. Where no standards are made known to the employee at that time. A commitment to employ the learners if they so desire. One day Sasaki suddenly scolded respondednts and hurld at them brooms. which in no case shall start below 75 percent of the applicable minimum wage. (c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause. Learnership agreement. and d. They filed a case for illegal dismissal pending which the company sent letters to them demanding them to explain why they shuld not be terminated from work due to abandonment and FAILURE TO QUALIFY WITH THE STANDARDS OF PROBATIONARY EMPLOYEES. (As amended by Section 1. On appeal. is made to undergo a trial period during which the employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement. 61. warning them not to come back. i. 75. may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. (b) Where the work is neither learnable nor apprenticeable. (M.) Definition/Purpose  Cebu Marine Beach Resort v. the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. The names and addresses of the learners. The period of apprenticeship shall not exceed six months. c. Apprenticeship agreements. NLRC ruled that the employees have been illegally dismissed. as regular employees upon completion of the learnership. shall conform to the rules issued by the Secretary of Labor and Employment. did not give time to employees to rove that they possess the qualifications to meet reasonable standards for permanent employment due to premature dismissal. The petitioner in this case. 111. The court ruled in Lopez v.basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement.Y. In a conciliation proceeding M. . Executive Order No.There is probationary employment where the employee. Contents of apprenticeship agreements. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learners. b. "Probationary employment shall be governed by the following rules: (a) Where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor and Employment. upon his engagement. San) was previously engaged in the business of manufacturing biscuits and other related products. The duration of the learnership period. The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage. An employee who is allowed to work after a probationary period shall be considered a regular employee. which agreement shall include: a. including the wage rates of apprentices. the period of probationary employment shall be limited to the authorized learnership or apprenticeship period. San Worker’s Union was informed of the closure or cessation of business operations because of the intended sale of the business to  Espina v. CA affirmed. LA dismissed complaint but held that respondents should go back to work. Omnibus Rules Book VI Rule I Sec 6 Section 6. San Biscuits. NLRC CBMR is owned by Victor Dualan and recruited respondent employees. Any employer desiring to employ learners shall enter into a learnership agreement with them. Probationary employment. when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. The Department shall develop standard model programs of apprenticeship. Petitioners filed a petitioner for certiorari which was referred to the CA who then affirmed the decision of the NLRC. Art. discipline as well as hotel and resort services. which is applicable. The dismissal was ratified due to petitioners subsequent acts of sending the letter to employees demanding explanation of their failure to qualify with the standards. December 24. The court ruled that they were illegally dismissed and that the utterances of Sasaki was tantamount to a dismissal despite his lack of authority to terminated the employees.Y. The resort caters primarily to Japanese tourists and thus Dualan hired Tsuyoshi Sasaki to give respondents special training in Japanese customs.

Out of the one hundred sixteen (116) probationary employees engaged by respondent Monde. All the former employees of respondent M. petitioners were terminated on various dates. competence and attitude of the employee to determine if he has the qualification to meet the reasonable standards for permanent employment. A separation package and cash equivalents of their vacation and sick leaves were given to the employees. a total of seventy-four employees qualified for regular employment. All the employees of respondent M. He claimed that he started to work without even being briefed as to the rules and regulations of Cathay and that he did not commit any infraction during his probationary period as shown by his performance ratings. informed of the rules and regulations of the company as testified to by the reservations manager.Y. NLRC+Shemberg Marketing Corporation (SMC)  Cathay Pacific Airways Ltd v.Y.Y. The court held that as long as the company’s exercise of the same is in good faith to advance its interest and not for the purpose of circumventing the rights of employees under the law or a valid agreement. San’s closure and cessation of business was lawful. The evidence shows that petitioner was informed of the standards to be met before he could qualify as a regular employee. San to respondent Monde was merely a ploy to circumvent the provisions of the Labor Code. Thus this petiton. Cathay recommended Marin that he should resign so as not to prejudice him in applying in other companies. a probationary employee is placed under observation and evaluation to determine WON he is qualified for permanent employment. He was subsequently fired 4 months after due to his failure to meet the required company standards and for loss of trust and confidence (alleged poor performance. there was no illegal dismissal of petitioners to speak of. As the termination was made before the expiration of the 6 month probationary period. gross and habitual neglect of duties. CA denied petition. Thus. failure to qualify as regular employees in accordance with the terms and conditions of their probationary employment with respondent Monde. Cathay Pacific as represented by Marin’s supervisor Gozun. such exercise will be upheld.) Duration: Rule/ Exception  Dela Cruz v. including petitioners herein.Y San to respondent Monde. respondent Monde alleged that petitioners had no cause of action saying that the probationary employees of Monde who passed the performance appraisal and who qualified as regular employees thereof were accordingly appointed as such. testified that Marin has been constantly caught chatting with his workers who are not on break and thus disrupting their work. the employer was well within his rights to sever the employer-employee relationship. During the probationary period. San who were terminated upon its closure and who applied and qualified for probationary employment. The written notice of the sale and purchase of the assets of respondent M. LA dismissed the complaint. Monde commenced its operations. Florencio Dela Cruz was hired by SMC as senior sales manager with a probationary period of 6 months. Respondent Monde exercised its management prerogative in good faith when it dismissed petitioners due to absence without leave (AWOL).Y.Monde. In the case at bar. Subsequently. He said that he never received any memorandum calling attention to his alleged infractions and that he did not resign as Cathay was impleading against him. He was also caught chatting while on the job leaving calls unanswered. NLRC affirmed the Decision of the Labor Arbiter. Thereafter. CA dismissed the case for lack of merit. the employer is given the opportunity to observe the skill. they signed their respective Quitclaims. Thus. M. started working for respondent Monde on a contractual basis for a period of six months. the dissatisfaction of his subordinates over his management style. as long as the termination was made before the expiration of the six-month probationary period. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during said period. since private respondent M. NLRC 97 . NLRC dismissed the appeal. Petition dismissed. He was terminated before the end of the probationary period and he filed for illegal dismissal. Philip Luis Marin Marin applied as a Reservation Officer in Cathay Pacific wherein he was accepted with an initial probationary period of 6 months. CA reversed. He was also.) He filed a case for illegal dismissal. The court found the petition to be without merit. petitioners were notified of the standards they have to meet to qualify as regular employees of respondent Monde when the latter apprised them. LA dismissed the case for lack of merit.Y. despite his denials. at the start of their employment. He was informed of this as disruptive conduct and was asked to mend his ways. Petitioners filed a Complaint for illegal dismissal alleging that sale of respondent M. Hence this petition. For a given period of a time. the employer was within his right to terminate the ER-EE relationship. San insisted that its employer-employee relationship with petitioners had ceased to exist. San received their separation pay and the cash equivalent of their vacation and sick leaves. his unauthorized use of company cellular phone and the unauthorized plane tickets of his wife and child. LA declared he was illegally dismissed. ii.

affirmed LA. CA reversed NLRC. Thus this petition. The court held that the employment of a probationary employee may only be terminated either 1.. for a just cause ; or 2.. when the employee fails to qualify as a regular employee in accordance with the reasonable standards made known to him at the start of the employment. _____________________________________ Power of an employer to terminate an employee on probation is subject to the following conditions: 1.. it must be exercised in accordance with the specific requirements of the contract 2.. the dissatisfaction on the part of the employer must be real and in good faith (not violating the contract nor the law) 3.. there must be no unlawful discrimination in the dismissal The burden of proof rests on the employer. A probationary employee remains secure in his employment during the time of contract remains in effect but once it expires, the employee can no longer invoke the constitutional protection because it is in the discretion of the employer WON to renew the contract. The court found that based on his staff assessment reports, his work was unsatisfactory especially conduct wise which is a very important field in a working environment. Petition granted.

Victoria Abril was employed by Philippine Federation of Credit Cooperatives, Inc. (PFCCI), Respondent, shortly after resuming her position as office secretary, subsequently went on leave until she gave birth to a baby girl. When she returned, she had already been replaced and thus she was offered the position of Regional Field Officer as evidenced by a contract which stipulated, among other things, that respondent’s employment status shall be probationary for a period of six (6) months, which she accepted. Respondent was allowed to work until PFCCI presented to her another employment contract for a period of one year after which period, her employment was terminated. She filed a complaint for illegal dismissal. LA dismissed the same for lack of merit. NLRC reversed LA. Thus this petition. The court found no merit in the petition. Article 281 of the Labor Code, as amended, allows the employer to secure the services of an employee on a probationary basis which allows him to terminate the latter for just cause or upon failure to qualify in accordance with reasonable standards set forth by the employer. Probationary employees, notwithstanding their limited tenure, are also entitled to security of tenure. Except for just cause as provided by law, or under the employment contract, a probationary employee cannot be terminated. In the instant case, petitioner refutes the findings of the NLRC arguing that, after respondent had allegedly abandoned her secretarial position for eight (8) months, she applied for the position of Regional Field Officer. Petitioner insisted that respondent was employed to perform work related to a project funded by the World Council of Credit Unions (WOCCU) and hence, her status is that of a project employee. The court cited Villanueva v. NLRC, where the Court ruled that where a contract of employment, being a contract of adhesion, is ambiguous, any ambiguity therein should be construed strictly against the party who prepared it. The court found from the facts that the respondent has become a regular employee Regardless of the designation petitioner may have conferred upon respondent’s employment status, having completed the probationary period and allowed to work thereafter, she became a regular employee who may be dismissed only for just or authorized causes under Articles 282, 283 and 284 of the Labor Code, as amended. Petition is hereby DISMISSED.

iii.) Extension of Contract  Phil Federation v. NLRC+Victoria Abril supra

iv.) Absorbed Employees  Cebu Stevedoring Co. Inc. v. Regional Director/Minister of Labor
Arsenio Gelig and Maria Quijano were former employees of Cebu Customs Arrastre Service (CCAS) which was abolished by a resolution by the Secretary of Finance for which all the employees of CCAS were given their termination pay. All the employees of CCAS were absorbed by herein petitioner Cebu Stevedoring with the same positions they formerly held. 5 months after they were terminated allegedly for redundancy and retrenchment and that their probationary period has already expired. A complaint for reinstatement with backwages was filed by the respondents. The Labor Regional Director ruled for the employees saying that there was no need to employ them as probationary employees as they have been doing the same work for a long time prior to being absorbed by the petitioner company. The Minister of Labor affirmed this ruling. Petitioner appealed to the Office of the President who dismissed the appeal. Thus this petition. The petitioner claimed that the employees, being casuals, can be terminated within the 6 month period without clearance from the Minister of Labor. The court however, agrees with the Minister of Labor that the private respondents cannot be considered as probationary

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employees as they were already well-trained in their respective functions. Also, the petitioners were unable to substantiate supposed business losses. Petitions dismissed.

Antonio Flores was hired as a crane operator by Orient Express Placement Philippines in behalf of Nadrico Saudi Limited. After only a month, Flores was repatriated to the Philippines allegedly due to poor job performance for his uncooperative attitude. He filed a complaint for illegal termination with the POEA who decided in his favor. NLRC affirmed this decision saying that he was originally assigned as a crane operator and was instead assigned to be a floorman thus, his employer could not have observed his work as a crane operator. Thus this petition. The court held that petitioner failed to specify the reasonable standards by which the private respondent’s poor performance was evaluated. They were also not able to prove that these standards were made known to him at the time of his recruitment in Manila. That there was a Licensure Examination on which depended his ultimate employment cannot be attributable as the fault of Flores. Art 281 LC implicitly requires that reasonable standards be made known to the employee AT THE TIME OF HIS ENGAGEMENT. NLRC affirmed.

v.) Standards- not-determined  Orient Express v. NLRC + Flores

vi.) Private School Teachers Rule  La Salette of Santiago Inc. v. NLRC
La Salette of Santiago hired Clarita Javier as a highschool principal for 3 years. She then became a college instructor for the company’s college and became head of the College’s Education and Liberal Arts Department. She later on accepted the offer to return to the highschool as assistant principal. She then finished her doctorate degree and worked only part time at the college. After this, she transferred back to the highschool as its principal for one year. Her term was extended for another year. Before the term ended, the school wrote to her asking her to move to the college as a certain Sister Saturnina Pascual will replace her as principal. Javier wrote to the board of trustees of La Salette questioning her sudden removal. They did not inform her of the reason but rather advised her of her teaching load in the college. Clarita filed a complaint for illegal dismissal. The President of La Salette College wrote to her saying that there would be no dimunition of compensation or loss of seniority in her transfer. Despite this, she still refused to report to her teaching assignment. LA ruled in her favor. NLRC upon appeal affirmed the LA. An MFR was denied thus this petition. The court held that she had not acquired permanency or tenure as a principal of La Salette. As observed by the court, she had been regularly moved from the highschool to the college department and that she was aware that her position with the highschool as an administrative staff is not a permanent one but rather at the pleasure of the school or at a fixed term. It is her work as a teacher that is continuous. Unlike teachers, those appointed as department heads or administrative officials (college or department secretaries, dean, assistant dean, principal, director) should not expect to acquire a second status of permanency. The petition is granted.2 Esperanza Escorpizo was hired as a highschool teacher. Attainment of permanent status depended on passing the professional board examination for teachers (PBET). She failed. She appealed her employment and asked for a second chance. She failed again. She took the next exam at the end of the same school year. As the results were not yet given, she was not included in the final list of the accepted teachers for the incoming school year. Even though she passed, the school no longer renewed her contract of employment. She filed a case for illegal dismissal. The LA ruled that the school had permissible reason not to hire her. NLRC affirmed the LA. Thus this petition. The court held that a probationary employee is one who, for a given period of time, is being observed and evaluated to determine WON he is qualified for permanent employment. She was made aware of the fact of the rules given to her at the time of her engagement that she had to pass the PBET before she becomes a permanent employee and that she was on probation for a period of four semesters of two years. Also, the court cited DECS Order No. 38 of 1990 saying that ‘no teacher in the private schools shall be allowed to teach unless he or she is a registered professional teacher. Undoubtedly, Escorpizo was entitled to security of tenure during her probationary period but it is the discretion of management WON they will rehire her once the contract expires. Her separation is not without justifiable cause as the university was not under the obligation to rehire her. Petition dismissed.

 Escorpizo v. University of Baguio

 Aklan College v. Guarino
Rodolfo Guarino was hired as an instructor and was later on appointed as Dean of the Commerce and Secretarial Department and was dean for 17 years. Guarino eventually took a 1 year leave. A month

2 I think the issue here more than anything is her unceremonious termination as a principal WITHOUT ANY EXPLANATION except that the benefits and the seniority will still be the same. Its more of besmirched
feelings and reputation. I don’t know why the court did not dwell on this given that EXACTLY, she knows the position is not permanent but that it had a TERM, her term was inappropriately and without reason suddenly deprived from her. Weird.

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before the end of his leave, he informed the school of his intention to resume his position in the college to which Aklan wrote back saying that he is not qualified for the position due to DECS Order No. 5 of 1990 which required that appointment as a Dean depended on graduation in an MBA course; and also that the position was already filled up by the regular incumbent. The respondent filed a case for illegal dismissal against petitioner. LA dismissed the case for lack of merit. NLRC reversed the LA saying that Guarino should he reinstated. The CA affirmed the NLRC. Hence this petition. Aklan cited La Salette of Santiago v. NLRC which lad down the rule that while an employee attains security of tenure as a member of the teaching staff, he cannot aspire for a second tenure in an administrative position. The court sides with Aklan saying that the facts of La Salette are similar to this case. The court cited Achacoso v. Macaraig saying that a permanent employment can only be issued to a person who meets all of the requirement s for the position to which he is being appointed. In the case at hand, Guarino was not able to finish his MBA. Also, DECS Order No. 35 of 1990 and the Manual of Regulations of Private Schools required that an incumbent dean should have finished his masters and that he should have taught for 3 years at the college. The court also cited La Salette saying that ‘unlike teachers, those appointed as department heads or administrative officials (college or department secretaries, dean, assistant dean, principal, director) should not expect to acquire a second status of permanency.’ Petition is granted. (No separation pay. He was not dismissed. He was still an instructor.)

IV. Termination of Employment Constitution, ARTICLE XIII – LABOR

Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; b. Gross and habitual neglect by the employee of his duties; c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and e. Other causes analogous to the foregoing. Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. Art. 285. Termination by employee.

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An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1. Despite her 35 years of service. — This Rule shall apply to all establishments and undertakings. General Concepts i. The court held that it was the petitioner bank who had the burden of proving the legality of the dismissal through substantial evidence. Caguioa may be validly terminated for breach of trust. Caguioa Generosa Caguioa was a senior manager of Equitable PCI Bank and had been serving the bank for 35 years when she was discharged for alleged connection with accounting activities specifically discounting checks which caused Antonio Jarina (the customer who instituted the complaint against her) considerable damage. Serious insult by the employer or his representative on the honor and person of the employee. Hence this petition. The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months. The provisions of this Title shall apply to all establishments or undertakings. b. Petition granted.  Equitable PCI Bank v. 278. In all such cases. Art. An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. Caguioa only had denials and imputation of lack of probative value of the evidence to counter the bank’s evidence. medical. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the 101 . Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family. and 4. 286. 277. whether operated for profit or not. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission.) Coverage Art.a. The court found that there was more than substantial evidence supporting the decision of the labor arbiter in Caguioa’s participation in the check-discounting scheme when the LA used bank records of Jarina and Caguioa which showed 21 matches of deposits and withdrawals. the letter of Jarina to the bank as well as the testimonies of the audit examiner. Omnibus Rules Book VI (Post Employment) TITLE I: Termination of Employment Section 1. including educational. When employment not deemed terminated. Other causes analogous to any of the foregoing. Inhuman and unbearable treatment accorded the employee by the employer or his representative. or the fulfillment by the employee of a military or civic duty shall not terminate employment. charitable and religious institutions and organizations in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. 3. Coverage. ii. She denied any connection with the said activities and filed a case of illegal dismissal. Upon appeal. the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. The employer upon whom no such notice was served may hold the employee liable for damages. A. Miscellaneous provisions. 2. CA held that she has been illegally dismissed. Coverage. b. The LA upheld the dismissal of the private respondent ruling that the dismissal was a valid exercise of management prerogative for having violated the code of conduct on loyalty and honesty. the court held being a managerial employee and because of her proven acts.) Security of Tenure Art. the same was denied and thus it was raised to the CA who held that the testimonies of the people who were in on her with the scheme were insufficient to prove her involvement and justify her dismissal. whether for profit or not. Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.

The court held that as long as the company’s exercise of the same is in good faith to advance its interest and not for the purpose of circumventing the rights of employees under the law or a valid agreement. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. (M. competence and attitude of the employee to determine if he has the qualification to meet the reasonable standards for permanent employment. NLRC reversed LA saying that the probationary employment has already ripened into a regular one.termination may cause a serious labor dispute or is in implementation of a mass lay-off. 1989) Respondent M. Security of tenure. petitioners were terminated on various dates. there was no basis for his dismissal. respondent Monde alleged that petitioners had no cause of action saying that the probationary employees of Monde who passed the performance appraisal and who qualified as regular employees thereof were accordingly appointed as such. petitioners were notified of the standards they have to meet to qualify as regular employees of respondent Monde when the latter apprised them. All the employees of respondent M. he did not say that he has a child and that he locked the room without switching the proper lines to the company guards such that no calls were entertained. Subsequently. Magtibay’s contract was extended for 15 days. Magtibay filed a complaint for illegal dismissal saying that he had been employed for 10 months. more than the 6 month probationary period requires and that he was not appraised of the company standards and thus.Y.Y. M. San insisted that its employer-employee relationship with petitioners had ceased to exist. March 21. including petitioners herein. Thereafter. CA denied petition. San Worker’s Union was informed of the closure or cessation of business operations because of the intended sale of the business to Monde. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. at the start of their employment. PDI announce the availability of a position for telephone operator for which Magtibay was hired for an initial 6 month probationary period.  Espina v. (As amended by Section 34. NLRC affirmed the Decision of the Labor Arbiter.Y. Petitioners filed a Complaint for illegal dismissal alleging that sale of respondent M. they signed their respective Quitclaims. Republic Act No. San received their separation pay and the cash equivalent of their vacation and sick leaves. During the probationary period. CA agreed with the NLRC because it said that PDI failed to prove that the standards were made known to him at the time of engagement. failure to qualify as regular employees in accordance with the terms and conditions of their probationary employment with respondent Monde. 279. since private respondent M. Thus this petiton. inclusive of allowances. Respondent Monde exercised its management prerogative in good faith when it dismissed petitioners due to absence without leave (AWOL). Thus this petition. LA ruled for PDI saying that the dismissal is for a valid reason since he repeatedly violated the company rule of letting unauthorized people to enter the operators room. San’s closure and cessation of business was lawful. CA reversed. LA dismissed the case for lack of merit. Republic Act No. A separation package and cash equivalents of their vacation and sick leaves were given to the employees. 6715. March 21. In the case at bar. Thus. 102 . such exercise will be upheld. Hon of Court of Appeals  Philippine Daily Inquirer v. 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. The length of time is immaterial in determining the correlative rights of both the employer and the employee in dealing with each other during said period. as long as the termination was made before the expiration of the six-month probationary period.Y. PDI terminated Magtibay for failure to meet company standards. after the expiration of the contract. a total of seventy-four employees qualified for regular employment. the employer was well within his rights to sever the employer-employee relationship. Thus.Y. Magtibay PDI hired Leon Magtibay on a contractual basis for 5 months as a phone operator. 1989) Art. there was no illegal dismissal of petitioners to speak of. (As amended by Section 33. San who were terminated upon its closure and who applied and qualified for probationary employment. started working for respondent Monde on a contractual basis for a period of six months. gross and habitual neglect of duties. In cases of regular employment.Y.Y. Out of the one hundred sixteen (116) probationary employees engaged by respondent Monde. Inc.Y. San) was previously engaged in the business of manufacturing biscuits and other related products. The written notice of the sale and purchase of the assets of respondent M. the employer is given the opportunity to observe the skill. San to respondent Monde was merely a ploy to circumvent the provisions of the Labor Code. A week before the end of the probationary period. 6715. Monde commenced its operations.Y San to respondent Monde. In a conciliation proceeding M. PDI denied this and also countered that the period of his contractual employment does not count as probationary period. San Biscuits. All the former employees of respondent M.

Art 279 provides security of tenure for both regular as well as probationary employees. A surprise audit was conducted on the records of Rusipan where the company found he incurred cash shortages due to “reimburseable expenses” he has incurred. when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. In cases of constructive dismissal. that he was not constructively dismissed as he participated in the Christmas party. The Dean recommended her assignment outside the College of Law because of this. He failed to report for work the following day because he was sick and he was barred from entering the premises. Cimech Systems Construction Inc. Due to the lack of jobs that could be assigned to him. A law student filed a case against her for irregularities in the performance of her work as well as fraternizing with students of the College. the burdn of proof is in the employer to show that his dismissal is for a just and valid cause. The rationale that Magtibay did not follow this because he was not advised to follow these rules does not convince the court. The CA reversed the NLRC. a. his arrogant asking for a raise as well as not reporting for work also. Petition granted. The court found that even if the transfer is valid. As to the christmas party. PDI was only exercising its hiring prerogative in not hiring Magtibay. it can be shown that he readily accepted the transfer. Thus this petition. The court held that all employees. regular or probationary are expected to comply with company imposed rules and regulations. He is only entitiled to damages. upon presentment of a medical certificate. The LA found that he was indeed constructively dismissed. The petitioner was asked to submit her answer to the complaint but she failed to do so. Both parties appealed to the NLRC. In this case. She filed a motion to extend her answer with the dean which was not allowed as the matter was already elevated to the Executive Board. he was asked to take a leave of absence for 15 days in which he complied. the manner in which he was barred after the transfer runs counter to good faith. Management Prerogative  Suldao v. Petition granted. The court held that the LA found a valid ground for dismissal which was not disputed by the NLRC and that to order reinstatement would be circuitous because the case would have to be remanded to the LA. He filed a complaint for illegal dismissal. Art 281 or probationary employment stresses that employment shall not exceed 6 months from the day the employee started working and that they may be terminated only for 1. The petitioner filed a case with the BCF Grievance Committee but the case was transferred to the Administrative Investigating Committee who  Duldulao v. Alhambra is a Filipino cigar manufacturing company. NLRC ruled for Rupisan’s reinstatement due to lack of due process. The court also found that. v. NLRC affirmed the LA. His services were continually contracted by the company until he became a permanent employee. He filed a case of constructive dismissal. He was then asked to make a letter request for field work transfer which he did. LA ruled for the company finding his termination is for a just cause but it also ruled that the company violated Rupisan’s right to due process when he was not given a copy of the audit report on which his dismissal was based. that he was indeed sick that day and that because of his letter request as required by the company. Constancia Duldulao was hired by Baguio Colleges Foundation as a secretary or clerk typist in their College of Law. CA 103 . Thus this petition. the court held that this not prove that he has not been constructively dismissed. The desicion to dismiss Rupisan was not according to the rules (then Sec 6 Rule XIV Book V) because it did not state the reason for his termination but having been found guilty of serous misconduct. Nature of Right/ Rationale  Alhambra Industries Inc. the employers say that Suldao committed insubordination and abandonment in his refusal to move to the fabrication department. just cause or 2. reinstatement and separation pay cannot be awarded.The court held that Magtibay is not a regular employee. CA reversed. He was suspended for one month and was eventually terminated at the end of that month for serious misconduct. NLRC b. It employed Danilo Rupisan as a salesman on a 6 month probationary basis. the Vice President of Administration issued a Department Order asking her to move to the highschool. unreasonable or unlikely. dismissing the petition. The court held that constructive dismissal is equal to quitting because continued employment is rendered impossible. Ruperto Suldao was hired as a machinist by Cimech for 5 months on a contractual status.

he was carrying something and he merely replied in a loud voice for which he apologized for his actions. 262 of the LC tackle the jurisdiction of the LA. it initiated the grievance procedure and Ayson’s case should have been subjected to voluntary arbitration. It did not comply with the requisite number of participants. The court ruled that the transfer is not as a penalty but a preventive measure to avoid further damage to the college.” The court awarded him separation pay. However. Petitioner then finally filed a complaint for constructive dismissal. Petition denied. Landtex hired Salvador Ayson. when the union called for a meeting with Landtex. For any of the causes in Art 282 c. Requisites for Lawful dismissal: Concurrence of Substantive and Procedural Due Process  Landtex Industries v. almost the same distance from her house as that of her job in the college of law. 7 union in their meeting) and there was nothing in the minutes that shows that the attendes constituted a Management-Employement Committee (as mandated in their CBA during a grievance proceeding). 2 landtex. Thus this petition saying that the constructive dismissal was tainted in bad faith and that it was intended as a punishment. BCF can exercise its management prerogative. The petitioner did not report for work and instead took a vacation leave and several other leave of absences. Landtex wanted to overturn the decision and insists that the subject of the petition is covered by the CBA provision on voluntary arbitration and thus excluded from the LA’s jurisdiction. the CA ruled that the jurisdiction in with the LA and found Ayson to be illegally dismissed as there was no proof or reason of his alleged acts and that his termination was characterized by “bad faith and wanton and reckless exercise of management prerogative. NLRC reversed LA saying that petitioner was neither demoted nor dismissed and her salary remained he same. Landtex decided to conduct an investigation.” The court held that at the onset. Ayson wanted reinstatement. who is also an officer of the union. Petitioner cannot claim constructive dismissal simply becaue her transfer to another department was against her wishes. as a knitting operator. if Landtx believed that the LA does not have jurisdiction. LA ruled in Duldulao’s favor. Ayson replied that he cannot defend himself as to the rumors because he does not know what those rumors are and that as to the ID pictures. NLRC agreed with Landtex that Ayson’s case falls in the original and exclusive jurisdiction of the voluntary arbitrators as provided in Art 261 of the LC and as agreed by them in their CBA. Lastly. The requisites for valid dismissal are 1. it should have filed a motion to dismiss and not have participated in the proceedings before the LA. Ayson later on received a letter requiring him to explain within 24 hours why no disciplinary action should be taken against him for spreading damaging rumors about the personal life of an unspecified person and for having an altercation with one of the company owners when he was asked to submit an ID picture. the petitioner has no vested tight to the position of secretary/clerk typist to the college of law because petitioner was employed not by the college but the BCF system itself and thus. Both Landtex and Ayson filed a petition for review. there is nothing in the records which show that the meetings are already the grievance machinery contemplated in their CBA. It exists when there is cessation of work because “continued employment is rendered impossible. Ayson and the union filed a complaint before the LA.found the Department Order appropriate since it was intended to prevent to prevent the controversy from affecting the harmonious relationship within the College of Law. According to the NLRC. insensibility or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment”. In a letter. Landtex reaffirmed its decision to terminate and thus. The LA ruled in favor of Ayson saying that it has jurisdiction and that it did not find any evidence supporting Landtex’s allegations that Ayson spread malicious rumors he allegedly spread during a drinking session about Wiliam Go (owner of Landtex) and in shouting at Go’s wife regarding the ID picture. The union asked to hold meeting with Landtex to discuss Ayson’s case. The court held that there is “constructive dismissal if an act of clear discrimination. The respondednt constituted a Fact Finding Committee to investigate the allegations concerning the administrative matters and found the petitioner guilty of the charges against her. unreasonable or unlikely as an offer involving a demotion in rank and a dimunition in pay. the company informed Ayson of his termination due to his lack of cooperation during the investigations. She claimed that she was arbitrarily asked to transfer from her place of work which is far from her original place of assignment. In this case. CA upheld the NLRC. 261. Upon appeal. she merely had to change the route she took for her new assignment. (CBA: 3 members from union and landtex. transfer her to any of the departments as long as the transfer does not result in a demotion in rank or diminution in benefits or salary of the employee. CA 104 . Substantive and Procedural Due Process Art 217.

Landtex invokes the second requisite and says that it invokes its management prerogative in dismissing Ayson for insubordination. The court answered in the negative. Respondent. Valentina Garcia d. The Court is not persuaded by such argument. In dismissing an employee.2. However. proof that respondent was properly apprised of the charges against her and given an opportunity to explain her side is lacking. As a result. The Secretary of the Department of Labor and Employment may suspend the 105 . Coca-Cola Bottlers Philippines. NLRC reversed. Yet. However. it found that the dismissal was ineffectual since it did not comply with due process requirements. instead of terminating respondent on ground of redundancy. otherwise. respondent filed a complaint for illegal dismissal with Regional Arbitration Branch. petitioner failed to satisfy the two-notice requirement. In the case. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Petitioner gave respondent notice of her transfer to take effect on July 2. A suspicion no matter how sincerely felt cannot substitute for factual findings carefully established through an orderly procedure . there was not evidence of the alleged offenses of Ayson. hired Valentina G. and (2) the second to inform the employee of his employer’s decision to terminate him. Miscellaneous provisions. on said date. Petitioner informed respondent that she would be transferred to the Iloilo plant for being an excess or redundant employee in the Tacloban plant. Inc this notice will afford the employee an opportunity to avail all defenses and exhaust all remedies to refute the allegations hurled against him for what is at stake is his very life and limb his employment. After she was refused entry. The sole issue for resolution in the present petition is whether respondent was accorded procedural due process before her separation from work. respondent reported for work at the Tacloban plant. Inc. the work load of their employees was substantially reduced. Respondent's dismissal was effected without the notice required by law. Petitioner adopted some modernization programs which resulted in increased efficiency and production. Garcia as Quality Control Technician on probationary status. It held petitioner liable for backwages from the time respondent was dismissed Petitioner and respondent filed their respective motions for partial reconsideration. one employee in the Department became redundant. b. Article 277 of the Labor Code explicitly provides that the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination Section 2. the employer has the burden of proving that the dismissed worker has been served two notices: (1) the first to inform the employee of the particular acts or omissions for which the employer seeks his dismissal. as the most junior employee of the Department could be validly terminated. All the meetings conducted were not free from arbitrariness and Ayson was not able to defend himself from the accusations. petitioner decided to assign her to its Iloilo plant. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission . LA ruled for her. the notice does not comply with the rules. Likewise. the present petition. According to the case of Maquiling v. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. Rule XXIII. Thus. Book V of the Omnibus Rules Implementing the Labor Code provides the proper Standards of due process: requirements of notice. Respondent refused to be transferred. The first notice must state that the employer seeks dismissal for the act or omission charged against the employee. 3rd sentence. Burden of Proof Art. 277. Hence. Procedural due process in the dismissal of the employee requires notice and hearing. Petition is DENIED  Coca-cola Bottlers v. CA held that abandonment of work was a just cause to effect respondent's dismissal. Petitioner argues that the purpose of the notice requirement was achieved when petitioner sent several notices to respondent at her last known address. Opportunity to be heard and to defend one’s self. Philippine Tuberculosis Society. as earlier stated. No witness was ever presented against Ayson. 1990. Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. Petition Denied. Landtex failed to understand the law’s purpose in requiring the opportunity of being heard.

he filed complaint for regularization but he was terminated (due to gross negligence in proper maintenance of truck. The single and isolated case of petitioner’s negligence in proper maintenance of the truck does not amount to gross and habitual neglect. the onus probandi rests on the employer to prove that its dismissal of an employee is for a valid cause. it was only on February 14. 11 months later. Save for the notice of termination. 6715. the employer bears the burden of proving that the dismissal was for a valid and just cause. (Same work. That there is ER-EE relationship. Gochuico a memorandum charging him with violation of company rules and Article 282(a) of the Labor Code. The court found that he just filed a complaint for regularization and that a charge of abandonment s totally inconsistent with the immediate filing of a complaint for illegal dismissal. In 1992. In 1995. A complaint was filed by Celia Abordo. Petitioners appealed to the NLRC which affirmed the LA. the failure to report for work or absence without valid or justifiable reason 2.  Pepsi Cola Product Philippines v. dismissed by SPI. Thus this petition. Santos Emmanuel V.effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. LA ruled for Chavez finding them guilty of illegal dismissal. However due to the circumstances of the case.V.454. wanting to sever ties with the company etc) before the case was heard. March 21. he wanted to be regularized to get the benefits of the regular employees. To constitute abandonment. the head of the Tuguegarao Branch of SICI. In the instant case. there are 2 factors that must concur 1. Petition granted. The charges arose out of alleged artificial sales by the sales personnel of the Libis Sales Office allegedly upon the instruction of respondent which resulted in damage to petitioners amounting to P795. NLRC affirmed the decision of the LA. on a motion for reconsideration. Santos was employed by petitioner Pepsi Cola Products Phils he was promoted as Acting Regional Sales Manager. he is deemed to have admitted the same. The respondents sought reconsideration which was granted by the NLRC saying that the fixed period f employment was already included in the contract of employment and dismissed the petition. In this case. NLRC + Standard Insurance Co Inc. the CA affirmed the decision of the LA. there is no other evidence which would clearly and convincingly show that respondent was guilty of the charges imputed against him. It also observed that while petitioners discovered the alleged fictitious sales in April 1996. 1989) Pedro Chavez is a truck driver for Supreme Packaging Inc. since 1984. the respondents failed to prove abandonment as the cause for the petitioner’s dismissal. Republic Act No. against Bago for manipulating money out of the agent’s commissions and for the spreading of rumors that Abordo was having an affair with the claims assistant. Negligence can’t also be invoked by the company as a reason because it implied want or absence or failure to exercise slight care or diligence. It is petitioners’ view that since respondent never denied these allegations.) That he was paid on a per trip basis is not significant. Upon appeal. he received from petitioner Ernesto F. this not being granted. separation pay instead of reinstatement is more equitable in this case.  Chavez v. a clear intention to sever employer-employee relationship. Due to the lack of valid and just causes in terminating the services of the petitioner thus violating Art 279 LC or security of tenure of Chavez. Petitioners appealed to the CA who affirmed the NLRC decision ruling that the charges in the memorandum of suspension and the notice of termination were not satisfactorily proven. NLRC + Supreme Packaging Inc. Petition is PARTIALLY GRANTED. his truck is owned by SPI and his truck routes are controlled by SPI. It also disbelieved the respondent’s clam that the petitioner abandoned his job noting that he just filed a complaint for regularization. E. Petitioners found respondent guilty of the aforesaid charges Respondent filed a case for illegal dismissal which the Labor Arbiter. the CA made a complete turn and reinstated the decision of the NLRC. 1997 that petitioners placed respondent on preventive suspension and commenced administrative investigation. The Labor Arbiter ruled that petitioners failed to satisfactorily prove the serious charges against respondent. there is an illegal dismissal. The court found that the ER-EE relationship is present due to the four fold test. petitioners failed to present evidence to justify respondent’s dismissal. Arlyn Bago was hired by Standard as an encoder. As a rule. Thus this petition. (As amended by Section 33. Measure of Penalty  Bago v. An audit was conducted against Bago which disclosed that the commission slips were not signed and were e. paid by SPI. The only evidence submitted by petitioners was the notice of termination which narrated what happened during the administrative investigation. The court held that in an illegal dismissal case. he is reinstated to his work with full backwages. However.54. 106 .

Moreno thus instituted with the NLRC a complaint for illegal termination against SSC-R. the misconduct must be serious or that it must be of such grave and aggravated character and not merely trivial or unimportant. Moreno received a memorandum from the Dean of her college. On appeal. He filed a complaint for illegal dismissal with the LA. Moreno admitted she did not formally disclose her teaching loads and that she went beyond the maximum limit because she needed to support her mother and sister. Phil. Even given that she is an ordinary rank and file employer. SSC-R filed a Motion for Reconsideration of the NLRC Decision. LA ruled that Bardaje is illegally dismissed and that the company failed to substantiate its claim that complainant was guilty for serious misconduct but that the suspension was proper as he could just have called the attention of his superiors instead of inciting a fight. That loss of trust is one of the reasons for her termination and that she is NOT a management employee does not lie as her work required a substantial amount of trust and confidence on the part of her employer. requiring her to explain the reports allegedly violated Section 2. Petition is denied. Bardaje  Jackqui R. Later on Arlyn stated that she admitted to the offense deliberately as to end the form of dishonesty served against her and that she had not been involved in any act of dishonesty. As to the penalty. NLRC reversed the LA and found them to be validly terminated.  Supreme Steel Pipe Corporation v. Petition Denied. San Sebastian Collegio Recoletos San Sebastian College-Recoletos. The audit also disclosed that the rumor started when she asked the claims assistant to drive her home and allowed him to bring home her car. Even if Arlyn has been working there for 8 years. he was terminated due to previous infraction of company rules. Manila (SSC-R). it must show that the employee has become unfit to continue working with the employer. the court held in the cases of Salvador v.2 of Article II of SSC-R’s Faculty Manual.pocketed by those in connivance in the scheme to get part of the commission. A security guard arrogantly ordered him to remove his shirt and Bardaje feeling singled out and offended challenged him to fight wherein a scuffle ensued but was later on subdued by another security guard. Thus this petition. NLRC dismissed the complaint and imposed the penalty of dismissal. Moreno had unauthorized teaching assignments at the Centro Escolar University and at the College of the Holy Spirit. When he reported back after his suspension. it must relate to the performance of the employee’s duties 3. Thus for misconduct or improper behavior to be a just cause of dismissal (Lopez v. it must be serious 2. The court found that the accusations of violent temper of the respondent were due to the provocations of the security guard as corroborated by witnesses from the company. the grievance committee unanimously found that she violated the prohibition and her employment was to be terminated. On the same day that Moreno sent her letter. The court said that not every fight within the company premises would automatically warrant a dismissal from service. the same cannot be used as a mitigating factor for it will be like rewarding disloyalty. Reports and rumors of Moreno’s unauthorized external teaching engagements allegedly circulated and reached SSC-R. Thus this petition. the court agrees that the same is too harsh and that it is cruel and unjust to impose the drastic penalty of dismissal if not commensurate to the gravity of the misdeed. 2. CA denied the petition. She was also offered the chairmanship of the Business Finance and Accountancy Department. 107 . The court ruled that for the reason to be a just cause of termination under Art 282 of the LC. Rogelio Bardaje was hired by Petitioner Supreme as a warehouseman. HRD wrote back asking why proper sanction should not be given them due to their admission. Arlyn wrote back asking for forgiveness. Mining Service Corp and Flores v. Moreno v. Petitioners appealed but pending this reinstated the petitioner in their payroll. The court held that the dismissal is valid. The LA found the employees to be illegally dismissed. Bardaje later on received a memorandum of his 1 month suspension due to his violation of the rule prohibiting the inciting of a fight. a domestic corporation and an educational institution employed petitioner Jackqui R. Supreme employees are required to wear the yellow uniform while at work but it was common practice for warehousemen to wear longsleeved shirts over their uniform to serve as protection from heat and dust while working. LA dismissed Moreno’s complaint for lack of merit. NLRC that the measure of penalty takes the length of time of service into consideration but given that the offense is pilferage by petitioner which shoes a lack of loyalty. The accused employees were soon terminated from employment and Bago filed a complaint for illegal dismissal with the LA. the CA reversed the NLRC and reinstated the decision of the LA finding the penalty of dismissal too harsh. Moreno (Moreno) as a teaching fellow. HRD asked Arlyn and those liable to explain why appropriate sanction should not be imposed. Moreno became a member of the permanent college faculty. Moreno sent a written explanation in which she admitted her failure to secure any written permission before she taught in other schools. there is sufficient evidence to show her involvement in the dishonest scheme of pocketing the commissions. NLRC): 1.

Later. The Shipmaster assured him that the workers will be paid accordingly. Thus this petition. the willfulness being characterized by a wrongful or perverse attitude. 282(a) of the Labor Code. willful disobedience of the employer’s lawful orders as a just cause for termination of employment envisages the concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful or intentional. Well-entrenched is the rule that resignation is inconsistent with the filing of a complaint for illegal dismissal. Resignation is defined as 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. As such respondents filed Complaint against Oriental and Kara Seal for illegal dismissal. Respondent SSC-R contends that Moreno’s dismissal from employment was valid because she knowingly violated the prohibition and in so doing. is petitioner's foreign-based principal. The court used the doctrine of Pacta privata juri publico derogare non possunct. given the period of time in which Moreno was actually prevented from working in the respondent school. lawful. v. the burden of proof rests on the employer to show that the dismissal is for just cause.. as a just cause for dismissal of an employee. 282(a) of the Labor Code. Upon reaching Port Piombino. Petition for Review is GRANTED. Upon appeal. Moreno allegedly committed serious misconduct and willful disobedience against the school. It would have been illogical for respondents to resign and then claim that they were illegally terminated. the court ruled that they were illegally dismissed since there was no justification for terminating B.) Resignation Oriental Shipmanagement Co Inc. Private agreements between parties cannot derogate from public right in ruling that the quitclaims are invalid. Public policy dictates that they be presumed to have been executed at the behest of the employer. however. Orental is a recruitment agency duly licensed by the Philippine Overseas Employment Administration (POEA) to recruit seafarers for employment on board vessels accredited to it. Kara Seal through its vessel’s Shipmaster signed an Agreement with the International Transport Workers Federation (ITF for brevity) increasing the monthly salary. The CA also denied the MFR filed by Oriental and Kara Seal. LA dismissed the complaint saying “The voluntariness of their resignation is confirmed and reflected from the Letter of Indemnity they executed. and (2) the order violated must have been reasonable. The court said that: No worker shall be dismissed from employment without the observance of substantive and procedural due process and in termination cases. Based on the foregoing disquisition. The SC is convinced that respondents were forced to sign the Letters of Indemnity. the willfulness being characterized by a "wrongful and perverse attitude". said Letters of Indemnity must be deemed void. The Court finds the punishment to be disproportionate to the offense. However. they were made to sign Letters of Indemnity saying “the contract of employment of the above crewmember is terminated by mutual agreement…consequently he declares to have no claim whatever against the Shipowner. which owns and manages M/V Agios Andreas. Given this. a vessel accredited to petitioner.which was denied for lack of merit. envisages the concurrence of at least two (2) requisites: the employee’s assailed conduct must have been willful or intentional. The court held that: Under Art. Thus. and he has no other choice but to disassociate himself from his employment. the CA reversed the NLRC decision saying that the Letters of Indemnity were void. the ITF inspector found out that the vessel’s crew has not been paid properly.” Respondents received from Kara Seal payments not in accordance with the Agreement. Kara Seal Shipping Co. made known to the employee and must pertain to the duties which he has been engaged to discharge. Termination of Employment by Employee i. made known to the employee and must pertain to the duties which he had been engaged to discharge and that the charges are present in the case” Moreno impugns the CA decision. SSC-R instituted with the Court of Appeals which granted the petition saying that: “Willful disobedience of the employer’s lawful orders. The employee's acknowledgment of his termination is not enough to satisfy the requirement of voluntariness on his part. Respondents Cuesta and Gonzaga were hired as Third Engineers on board the said vessel for a one-year contract. Wilfredo Gonzaga 108 . Ltd. respondents were ordered repatriated to Manila and before such repatriation. SSC-R miserably failed to prove that Moreno’s misconduct was induced by a perverse and wrongful intent as required in Art. lawful. Court deems it appropriate to impose the penalty of suspension of one (1) year on Moreno. They were executed in the presence and with the participation of the ITF… there is no evidence of threat or intimidation to the complainant's resignation. and the order violated must have been reasonable. It is the employer's duty to prove that such quitclaims were voluntary. NLRC + Felecisimo Cuesta. the said suspension should already be deemed served. to be counted from her illegal dismissal. Moreno insists that her right to security of tenure is a more significant consideration in this case.” NLRC affirmed LA.

1. Petition DENIED. The SC also noted that there is no evidence on record of payment of placement fee. as required by the Labor Code. Clara International Transport and Equipment Corporation. Globe Telecom v. whichever is less. Dacut and Tungala resigned in July 1999 due to the vessel’s alleged unseaworthiness. Tungala were crew members of the LCT “BASILISA”. for petitioner's breach of contract and bad faith. Dacut et al Lazaro V. The court defined resignation as the voluntary act of an employee who finds herself in a situation where she believes that personal reasons cannot be sacrificed in favor of the exigency of the service. The court noted that her letter of resignation expressed gratitude towards the company and in Michael Academy v. an inter-island cargo vessel owned by private respondent Sta. In addition. They also resigned because the vessel has become unseaworthy after the company refused to have it repaired properly. During her pregnancy. Cajote went on leave from April 12-28. a certification of her resignation was issued.000 in moral damages and another P50. Technical rules of procedure are not binding in labor cases. Thus this petition. and that she resigned because of the health of her child. Dacut discovered a hole in the vessel’s engine room. it is unable to award reimbursement of the same. The fact that the Labor Arbiter admitted the company’s reply after the case had been submitted for decision did not make the proceedings before him irregular. the court held that expressions of gratitude cannot possibly come from an employee who is just forced to resign since it belies the allegation of coercion. told them that they will be paid their separation pay if they voluntarily resigned. concise and categorical language.000 as exemplary damages. Petitioners appealed to the NLRC. Dacut. The court is asked to resolve: (1) whether the Labor Arbiter erred in admitting the company’s reply after the case had been submitted for decision. Globe accepted her resignation. the CA granted the petition stating that given that there is no sufficient proof that she voluntarily resigned and that it is unlikely that a person receiving a high salary to resign. The certification was not given. (As an add on if ma’am asks) paragraph 5. also. The company had the hole patched up with a piece of iron and cement. There was sufficient evidence to prove that the vessel was seaworthy. Tungala and Cajote voluntarily resigned from their employment. Marie Crisologo is a lawyer who was employed by Globe as a manager in its corporate legal services department. NLRC affirmed LA. Lastly. the secretary of the Personnel Manager. Cajote has incurred excessive unauthorized absences which would warrant his dismissal under the Labor Code. She requested a copy but was declined as there was no longer any reason to pursue the matter. valid or authorized cause as defined by law or contract. and (3) whether petitioners were entitled to their monetary claims. Hence. When he returned. She filed a complaint for illegal dismissal saying that she was fired on the basis of a rumor.their services and there was no due process as Oriental did not serve two written notices to respondents prior to their termination from employment. the veracity of which was never proven. 109 . Cesario G. 8042 provides: In case of termination of overseas employment without just. Petition Granted. A few weeks after. Petitioners elevated the case to the Court of Appeals which likewise affirmed the findings of the NLRC. she was rushed to the hospital due to profuse bleeding and possible miscarriage and after a week tendered her resignation citing the advise of the doctor for her to rest for the duration of her pregnancy. 1999 to undergo eye treatment. the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum. She also asked for a certification to clear her reputation and said that she resigned because of the damaging email. the fear of Dacut and Tungala was unfounded. she was informed that an email was circulating within the company that she solicited money from one of the company’s suppliers. respondents should be awarded P50. LA dismissed the complaint saying that a lawyer like her would never sign her rights away. NLRC . Jenette Marie Crisologo Lazaro v. Romerlo F. Cajote alleged that he resigned because the company hired a replacement while he was still on leave. Orlina. they should also be awarded attorney's fees equivalent to ten percent (10%) of the aggregate monetary awards. Thus this petition. NLRC affirmed the Labor Arbiter’s decision. Dacut and Tungala claimed that they resigned after Reynalyn G. that a person of her professional standing will not easily relinquish her legal rights. Cajote resigned in June 1999. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. instead. the Operations Manager told him that he will be paid his separation pay if he voluntarily resigned. (2) whether Dacut. Fearing that he will be charged as Absent Without Leave (AWOL). Cuesta is also entitled to vacation leave pay. Petitioners filed a complaint for constructive dismissal amounting to illegal dismissal. Labor Arbiter dismissed petitioners’ complaint. The court said that the resignation letter was drafted in a clear. Despite the repair. Section 10 of Republic Act No. Cajote. Thus. Upon appeal.

LA dismissed the complaint. The court looked at the subject resignation letters and found that the letters were pre drafted with blank spaces filled up with the alleged date of resignation and it was in English which was not the normal vernacular of Capulso given his low level of education. NLRC Othello Moreno had been working as a security guard for a year with the Sugarland Security Services. ARTICLE III – BILL OF RIGHTS Section 18. 285. A Prime said that Moreno was caught sleeping on post for which he was sent a memorandum giving him a last warning after which he had a quarrel with another security guard. Just Causes Art. He asked to go on sick leave as recommended by his doctor because he had developed bronchial asthma due to his work at the ceramic factory (inhaled ceramic dust due to the lack of safety gadgets). Petition is DENIED. Inc. 2. In this case. a. and 4. Serious insult by the employer or his representative on the honor and person of the employee. it must be unconditional and with the intent to operate as such. As crew members.. (2) No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. 3. a. The employer upon whom no such notice was served may hold the employee liable for damages. The court held that to constitute a resignation. and the Court of Appeals were unanimous in their findings that they voluntarily resigned. The petitioners failed to submit sufficient proof that overtime and night shift work were actually performed to entitle them to the corresponding pay. evincing petitioner’s design to ignore or violate labor laws through the 110 . which resulted in a near shootout. the correct criterion in determining whether they are entitled to overtime pay or night shift differential is not whether they were on board. During the pendency of the case. Azcor Manufacturing Inc. Termination by employee. When it became apparent that he will not be reinstated. He was allowed to do so but upon returning to work. Embassy Building after A Prime absorbed Sugarland. 2. There must be an intent to relinquish a portion of the term of office. the NLRC. petitioners were required to stay on board the vessel by the very nature of their duties.Here. LA ruled for Moreno. The court ruled that Moreno’s employment with A Prime is just a continuation of his employment in Sugarland. Azcor Manufacturing hired Capulso as a ceramics worker for more than 2 years. Hence this petition. The court rules that all factual findings are amply supported by substantial evidence. In fact. Capulso died of the asthma and a heart disease. Separation pay. (1) No person shall be detained solely by reason of his political beliefs and aspirations. Other causes analogous to any of the foregoing. An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one (1) month in advance. Moreno filed a complaint for illegal dismissal. Thus this petition. Also that based on a psychological test in which he did not pass the company standard and therefore. the Labor Arbiter. a sister company of petitioner A Prime. Termination by employee. 285. NLRC affirmed the LA. his supervisor informed him that only the owner can allow him to continue his job. The company claims that Capulso resigned as evidenced by a letter of resignation. He was rehired as a security guard by the petitioner and assigned to the same post at the U. He was forced by petitioner to sign new probationary contracts of employment for 6 months and before the period was over. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family. the company tried to give Cajote another assignment but he refused it. v. There is insufficient evidence to prove petitioners’ entitlement thereto. NLRC reversed and ruled that there is illegal dismissal. 3. Capulso signified his desire to return to work after he recuperated. The court said that the company failed to show that the dismissal of the employee is for a valid reason and that they are now liable for illegal dismissal. he filed the complaint for illegal dismissal. he could not be hired as a regular employee. her was terminated.S. b. NLRC + Candido Capulso A’ Prime Security Services Inc. Petitioner’s failure to deny that Sugarland is its sister company and that petitioner absorbed Sugarland’s security contract and security personnel assumes overriding significance over the resignation theorized upon. Without Just Cause Art. b. An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: 1. Petition dismissed. v. Inhuman and unbearable treatment accorded the employee by the employer or his representative.

Warning 2nd Offense. They were not valid grounds for terminating the employment of private respondent. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to special laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy.. Rule I.. He was deprived of an opportunity to be heard. they were not punishable by dismissal. In all such cases.SLEEPING ON POST 1st Offense. ruled that he has been illegally dismissed because there was just. the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. governing discipline. The respondents were forced to resign and pre-terminate their employment contracts in view of the petitioners breach of its provisions... may not be proper grounds for dismissal. The dismissal of private respondent was presumably based on the results of his behavioral and neuropsychological tests and on his violation of a company rule on sleeping on post. In the petition with the CA. Gerardo Ferrer and the other respondents were deployed to Taiwan but only 20 workers were employed as construction workers at the Formosa Plastics Corporation.Dismissal SECTION IX . valid or authorized cause. he was not given a chance to contest his dismissal. iii. Petition denied. — The employer-employee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months. I of A’ Prime. considering that the said test appeared to have been conveniently contrived to be conducted. the Court agrees with NLRC’s assessment: "Complainant’s result of his behavioral research and neuropsychological test to our mind. The court said that Moreno has already gained the status of regular employee upon completing the probationary period imposed on him when he was employed in Sugarland. The court held that the petitioners violated their contract by not hiring the respondents as construction workers as agreed upon. having found that Moreno is a regular employee. the NLRC affirmed the LA.. as the same were first infractions. is of no moment.. the CA dismissed the petition saying that the corporation was not able to prove that the private respondent’s dismissal was for just.) Forced Resignation JSS Indochina Corp v. Termination of Employment by Employer 111 .. The LA ruled for the employees saying that they have been forced to resign. What is more. or the fulfillment by the employee of a military or civic duty shall not terminate employment... When employment not deemed terminated. 1 by private respondent were first offenses.. they shall be entitled to full reimbursement of placement fee plus salaries for the unexpired portion of the contract or for 3 months for every year of the unexpired term. With respect to the behavioral and neuropsychological tests.. Petition is DISMISSED ii. 286. SECTION 12.. suspension and separation from the service of security guards. unless the suspension is for the purpose of defeating the rights of the employees under the Code.. and the result produced on the very day of his dismissal. Circular No. Upon appeal..) Performance of Military of Civic Duty Art. Thus this petition...CHALLENGING A POSTED SECURITY/LADY GUARD AND SUPERIORS 1st Offense . The court. The respondent’s decision to resign from their employment was made by force of circumstances not attributable to their own fault. Also. private respondent’s alleged violations of sleeping on post. RA 8042 (Migrant workers act) provides that in cases of termination of contract without valid cause.One (1) month suspension 2nd Offense – Dismissal The infractions of Sections VIII and IX of Circular No. The Company said that they refused to work after being assigned as pipe tract workers in Shin Kwan.. Ferrer C. The respondents sought assistance from the Manila Economic and Cultural Office who directed them to sign separate affidavits saying that they were assigned at Shin Kwan Enterprise and not at Formosa.. legal and valid basis to do so. and quarrelling with a co-worker. They were soon repatriated to the Philippines... The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months...30 days suspension without pay 3rd Offense.. in question. and in case of mandatory fulfillment by the employee of a military or civic duty. Suspension of relationship.use of the veil of corporate personality. provides: "SECTION VIII . Book VI. The employees filed a complaint for illegal dismissal with the LA.

(As amended by Section 33. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Republic Act No. 6715. Art. Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. Ocean East terminated his services. The court held that the transfer clause in the SEC is not violative of Art 34 I of the LC which provides that it shall be unlawful to substitute or alter employment contracts approved by the DOLE without the approval of the Secretary of Labor and that in fact it is complementary as a transfer is sanctioned only if it is to any vessel owned by the same employer and that the rating (terms of service and wages) are in no way inferior or that the period of employment is not shortened. CA the court held that an employer may terminate an employee on the ground of willful disobedience or to the employer’s order. NLRC + Capt. LA dismissed the complaint. 1989) Ocean East hired Capt. 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. 277. sufficiently known to the employee at the time of his engagement 3. Pepito Gucor - b. Miscellaneous provisions. reasonable and lawful 2. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. The company assured him that he is not being terminated and that the repatriation s for documentary purposes only. regulation or instruction. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. a. Basis – Employer Right Ocean East Agency Corp v.) Substantive Requirements – Just Causes Art.) In the case at hand. (given that the regulations are: 1. Just Causes – Requisites Serious Misconduct. b. (As amended by Section 34. March 21. 1989) Art. 6715. Willful disobedience (Insubordination) 112 . In cases of regular employment. Gucor as a master of M/V Alpine for one year. Republic Act No. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. Termination by employer. An employer may terminate an employment for any of the following causes: a. Security of tenure. He filed a complaint for illegal dismissal. In AHS Philippines v. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. He finally agreed to be repatriated to the M/V Eleptheria but failed to disembark when ordered to do so. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. b. inclusive of allowances. and e. On the ground of serious misconduct or willful disobedience. c. The transfer clause is incorporated into the original contract and so the approval of the Sec of Labor is no longer necessary. NLRC reversed the LA. respondent’s defiance of the order posed a considerable prejudice to the business of the employer.i. He was later on informed of his transfer to another vessel pursuant to the transfer clause of the Standard Employment Contract (SEC). Thus this petition. in connection with the duties which the employee has been engaged to discharge. 282. there is a valid and legal cause for the termination of the respondent. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. 279. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. March 21. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. He viewed this as an insult and he signified that all his benefits should be accorded him and that the cause for his repatriation is unreasonable. Other causes analogous to the foregoing. d. Gross and habitual neglect by the employee of his duties. Petition granted.

Teresa Sumalague and hit the latter on the face causing injuries and resulting in a scuffle between the two. Respondents filed separate complaints for illegal dismissal which were consolidated. respondent is not entitled to an award of separation pay. Petition is hereby GRANTED. NLRC reversed the decision of the labor arbiter. Separation pay therefore. it also conducted an investigation. The court held that under Article 282 of the Labor Code. however.Her cause of dismissal amounting to a serious misconduct. lawful. 2001. NLRC that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. ruling that the dismissal was without just cause. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. the willfulness being characterized by a “wrongful and perverse attitude”. separation pay should not have been awarded to her. The machines’ functions are interlocked in a way that a disruption in one interrupts the entire operation. vs. Petitioner not only satisfied the two-notice requirement. 282. albeit summary. NLRC: The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. Willful disobedience of the employer’s lawful orders. petitioner utilizes machines which are operated continuously. Both parties moved for reconsideration of the decision but both motions were denied. SM Food Court Manager banned the two from working within the SM Food Court’s premises. due process is served. Petitioner. CA affirmed NLRC. Respondents were confronted in detail with the charges against them and given the opportunity to present their side. ignored the same and continued sleeping. when respondent rushed toward Ma. The second requisite is also present in this case. NLRC affirmed. Respondent’s co-worker Sumalague was eating at the back of the store. made known to the employee and must pertain to the duties which he had been engaged to discharge. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. Despite the intervention of their supervisor Fiderlie Recide. Respondent then filed with the Labor Arbiter a complaint for illegal dismissal LA dismissed case. but withheld reinstatement and payment of backwages. Ha Yuan Restaurant v. Peñaranda. it is undisputed that respondents violated Company Rule 8 twice. Respondents elevated the case to the Court of Appeals ruled that the dismissal was illegal. NLRC 113 . Peñaranda merely denied the allegations against him. We find Company Rule 8 to be a valid exercise of management prerogative. An employer may terminate an employment for any of the following causes: a. Vidal cleverly tried to avoid being caught sleeping a second time by sneaking inside the container van. As a manufacturer of finished textile. Both were assigned to the night shift. As long as the employee is given the opportunity to explain his side and to present evidence in support of his defense. and (2) the order violated must have been reasonable. Penarenda Petitioner is a domestic corporation engaged in textile manufacturing. depends on the cause of dismissal. Thus. As for affording due process to the respondents. vs. On the first requisite. Hence. found his denial insufficient and terminated his employment on June 20. Petition is GRANTED. requires the concurrence of at least two requisites: (1) the employee’s assailed conduct must have been willful or intentional. to determine the culpability of the respondents. the petition should be granted. Court has recognized that management has the right to formulate reasonable rules to regulate the conduct of its employees for the protection of its interests. Peñaranda was caught sleeping on the job on two occasions for which he was asked to explain why he should not be terminated for committing the same offense. willful disobedience of a lawful order of the employer is a valid cause for dismissal.Art. herein petition The court held in Philippine Long Distance Telephone Co. after being awakened and warned by his supervisor. Thus this petition. It employed Peñaranda as packer and Vidal as drugman. Termination by employer. or (2) the dismissal reflected on the employee’s moral character. They were brought to the SM Food Court Administration Office and then to the Customer Relations Office for further investigation. Citibank NA v. NLRC First Dominion Resources Corp v. Juvy Soria worked as a cashier in petitioner’s establishment located inside the SM Food Court Makati. As further stated in Philippine Long Distance Telephone Co. as a just cause for the dismissal of an employee. and may be accordingly awarded provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct. they were not pacified. The Court holds that respondent’s cause of dismissal in this case amounts as a serious misconduct and as such.

” In the case of Cathedral School of Technology v. any mention of the Provident Fund therein would fail to adhere to the above-ruling in the Mañebo case cited by the court which requires all facts. Correspondingly. Having been validly dismissed on the ground of serious misconduct. P Nagrama 114 . An administrative conference took place with the complainant. terminating her employment on the ground of serious misconduct. Thus this petition. Petitioner thereupon filed a petition for certiorari with the Court of Appeals to set aside and nullify the NLRC Resolution. to conduct training seminars and Respondent was instructed to attend the seminar. Following the termination of her services. the court held that respondent is not entitled to retirement benefits as this Court finds that she was validly dismissed for serious misconduct and not merely for work inefficiency. petition is GRANTED Cosmos Bottling Corporation hired Pablo Nagrama. gross and habitual neglect of her duties and gross inefficiency. The court held that the there is no evidence to justify Nagrama’s termination. In support of its ruling that respondent’s dismissal was valid. and consequently. LA rendered judgment sustaining the legality of the dismissal due to the letter Nagrama sent to Cosmos apologizing. her counsel and the Union President in attendance.Rosita Paragas was hired by Citibank as Secretary to several important people but because of the reorganization. by the abovementioned October 24. She was moved around from task to task until she was assigned to undertake the special project of reorganizing the Universal Account Opening Forms. as a maintenance mechanic he was elected by the local union as chief shop steward. Respondent filed his explanation and contended that he had to attend to an administrative hearing for fellow unionists. AVP Ferrera directed complainant to explain in writing why her employment should not be terminated on the ground of serious misconduct. The second is a clear intention to sever the employer- Cosmos Bottling Co v. respondent is thus disqualified from receiving her retirement benefits pursuant to the provision of petitioner’s “Working Together” Manual. considering it as a judicial admission of guilt. but prayed that petitioner be ordered to pay her the “Provident Fund” benefits under its retirement plan for which she claimed to be qualified pursuant to petitioner’s “Working Together” Manual. Respondent filed a MOTION FOR PARTIAL RECONSIDERATION of the NLRC Resolution. Respondent appealed the matter to the NLRC who affirmed the decision of the LA. respondent filed a complaint for illegal dismissal LA dismissed the complaint for lack of merit. This level of errors is not acceptable because a misfiled document is considered LOST and you will have to go through the file one by one to be able to retrieve it. Respondent was designated by petitioner as waste water treatment operator. Thus. he is obligated to attend to the problems of his fellow union members. The company went thru 9 files boxes only and found 9 misfiles. 2001 Resolution granted respondent’s motion for partial reconsideration. On petition for certiorari to the CA. Two (2) elements must be satisfied for an employee to be guilty of abandonment. willful disobedience. He averred that as a union official. Evaluation of respondent cited above finds corroboration in her admission that “she may have been tactless and insolent in dealing with her superior but it does not allegedly warrant the supreme penalty of dismissal. Jr. Josephine D. He was required to submit his written explanation. Finding that respondent’s dismissal was “for causes other than misconduct. gross and habitual neglect of duties and gross inefficiency. NLRC. She no longer challenged her dismissal on the ground of work inefficiency. Respondent bank notified complainant that her written explanation were found self-serving. it reversed the NLRC. not in any later pleading. and causes of action should already be proffered in the position papers and the supporting documents thereto. the court held that her unreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment.” the NLRC. It is respondent’s obstinate refusal to reform herself which ultimately persuades this Court to find that her dismissal on the ground of serious misconduct was valid. Calacien wrote a letter to Nagrama informing him that the charges of abandonment of duty and gross insubordination had been lodged against him. The first is the failure to report for work or absence without valid or justifiable reason. complainant was placed under Preventive suspension. As she failed to complete the project she was given another 30 days to complete it. He failed to attend the first two (2) days of the seminar. Also. willful disobedience. respondent bank declared Paragas’ position redundant. is analogous to the other “just causes” enumerated under the Labor Code. Inc. His immediate supervisor. evidence. the labor arbiter relied on the performance appraisals of respondent wherein the court noted significant behavioral problems in respondent. Petitioner hired Clean Flow Philippines. Thus this present petition. The court held that: her “Notice of Appeal and Appeal Memorandum” was filed after she had already submitted her position paper. Ca dismissed for lack of merit. NLRC affirmed LA.

The private respondents retrieved the bags from the Assistant Manager the next day in order to give the money to the roving tellers of PCIB and INTERBANK. Second. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. It was found that the amount was short of 42. National Bookstore Inc. Petitioners appealed to NLRC who affirmed the LA.000. A review of the facts discloses that these twin elements are not present here. Petitioners denied their involvement in the theft and countered that the filing of the charges against them was a form of harassment against their union.employee relationship. Court cannot agree that no direct evidence was presented on the theft of the properties or the cover-up thereof. They also claimed that they have served the petitioner for 13 years without being required to have a proof of receipt in turning over the collection. The money is to be deposited with INTERBANK and PCIB. it bound itself by the concurrent factual findings of the LA and NLRC. They were subsequently terminated for gross National Book Store v. they were subjected to a thorough body search. Petition is DENIED for lack of merit. He also asked for and was given permission. c. There is no proof that Morales knew the contents of the parcel. CA 115 . through a letter dated February 28. First. CA affirmed the NLRC. After preparing the deposit slips. two (2) requisites are also necessary. Inc.” to lie. The management asked the respondents why they should not be dismissed for the loss of company funds. Hence. Other causes analogous to the foregoing. Nowhere does it appear that petitioner Morales had knowledge of what was to happen or had participation in it. Malayan issued to petitioner Garcia an Inter-Office Memorandum giving him 24 hours to explain his involvement in the theft of company property. d. the same cannot be said of the connection of Morales to said incidents.While the participation of petitioner Garcia in said theft and cover-up is detailed in said affidavit. Oscar P. 2000. and e. Ymasa placed the money n her cabinet and locked it. the present petition. the assailed conduct must have been intentional and characterized by a wrongful and perverse attitude. employed Marietta Ymasa and Edna Gabriel as Cash Custodian and Head Cashier respectively. Gross and habitual neglect by the employee of his duties. They reported for work to count the previous day’s sales as a matter of routine. Petitioners were employed as risk inspectors by Malayan Insurance Company. In writing. and made known to the employee and should pertain to the duties which he has been engaged to discharge. Petitioners filed before the Labor Arbiter (LA) a Complaint for illegal dismissal. the order violated must have been reasonable. Petitioners argue that the affidavits of Umila and De Guzman have no probative value for neither had direct knowledge of the taking of private respondent's properties. 282. LA and the NLRC declared the dismissal of petitioners valid in view of substantial evidence that petitioner Garcia was involved in the theft of private respondent's confidential records and that petitioner Morales participated in the cover-up thereof relying on the affidavits of Umila and De Guzman. It was handed over to the Assistant Manager for safekeeping in the Branch vault. Garcia and Alex Morales v. An employer may terminate an employment for any of the following causes: b. They were assigned to the SM North Branch. also called “willful disobedience of a lawful order. The NLRC found these witnesses credible because they were not shown to hold any “grudge against [petitioners]. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. much more because said witnesses are ordinary members of the union. LA dismissed their Complaint. While the CA did not elaborate on its view. Termination by employer. dismissal. Malayan notified petitioner Garcia. These were not found to be present in the case. Malayan Insurance - Gross and Habitual Neglect of Duties Art. Private respondent also issued to petitioner Morales a similar memorandum but with additional instruction for his preventive suspension for 30 days pending investigation. of the termination of his employment. De Guzman's statement detailed the effort to bring said properties back into the premises of private respondent and to make it appear that these were merely misplaced. It was again counted before being deposited. lawful. It was only in the evening when the plastic bags were taken out because the branch manager was not in his office. Petition is PARTLY GRANTED as to Morales only. The only evidence of petitioner Morales's involvement in the cover-up is the statement of De Guzman that it was said petitioner who instructed him to get a parcel from a third person. For the second charge against him: for gross insubordination. the employees explained that they had no access to the Bookstore’s vault and that before leaving the office. the counted money was placed inside 2 separate plastic bags sealed with scotch tapes and rubber bands. Court finds the affidavit of De Guzman so lacking in crucial detail as to Morales.

282. LA found that the allegations against Zenaida were fabricated and the the evidence was not substantial to prove her dishonesty. The court held that for valid dismissal. employee must be afforded due process 2. In this case. the CA ruled in favor of the employer. Zenaida Serrano 116 . NLRC affirmed the LA. the court found that truck was n the wrong lane and that it was purely an accident. Petition is granted. The court found the respondents to have been illegally dismissed and they are entitled to full backwages inclusive of allowances. Termination by employer. he figured in an accident when a 10 wheeler truck failed to stop during a red light and struck the van he was driving. 1 to inform the cause of the termination 2. as stated earlier said yes as he was the victim of the vehicular accident. The Branch Manager enlisted the help of a mason and 2 students. Loss of trust and confidence does not need proof beyond reasonable doubt. Thus this petition. Upon appeal. in doing the alleged negligent act. NLRC dismissed the petition finding the respondent dishonest in her duties. An employer may terminate an employment for any of the following causes: c. Mercury did not accept this and made her undergo an investigation who subsequently found her guilty. She then took out the 120 pesos from her pocket and gave it to the cashier. he was terminated. the mason soon bought 10 capsules of squalene worth 120 pesos which was the exact amount given by the mason. asking for the receipt and pinpointing Zenaida as the woman who served him. Zenaida Serrano was employed by Mercury Drug as a pharmacy assistant who was tasked to attend to customers and handing the money paid to them to the cashier for the receipt. She filed a complaint for illegal dismissal saying that she had a lot customers at the time and that she just forgot about the 120 pesos. Maxim’s Tea House - Loss of Trust and Confidence Art. The court held that although the reason for her termination. the CA affirmed the NLRC. The argument that it was already his second vehicular accident is not also applicable to the case because the court found that the same was also a pure accident wherein Tres Reyes was a victim. Mercury. the immediate dismissal of the petitioner is unjustified. He soon came back as per the Branch Manager’s instruction. put Serrano under observation due to the reports from other pharmacy assistants that she has been pocketing money. the dismissal must be for a valid and just cause as provided in Art 282 of the LC As to the requirement of due process. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative. He was not given the receipt. the employer should give 2 written notices. the 1. Hence the instant case. The test to determine the existence of negligence is the question: Did the petitioner. After the 2 students bought the medicine furnished with the receipt. The management of Maxim required him to explain what happened that morning but upon finding his explanation unsatisfactory. Even given arguendo that they are negligent. to inform the employee of the decision to dismiss him. Upon appeal. can be terminated due to the betrayal of trust. LA is affirmed. The NLRC reversed the decision of the La saying that there was no negligence on his part. entitling them t reinstatement. LA ruled for them. Furthermore. The records show that they were not even remotely negligent of their duties and that they had no access to the vault. CA upheld the LA. In the wee hors of the morning as he was driving to fetch the employees from a ballroom dancing establishment. Thus. mercury alleged that the pocketing of the 120 pesos was a ground for her termination due to her dishonesty. if the employee holds a position whose functions may only be performed by someone who has the confidence f management or has a greater duty to management than ordinary workers. The court held that the case before the Labor Arbiter depended primarily on the position papers of the parties and no trial was held thus the finding of the CA that the LA was in a better position to observe the parties cannot be applied to this case. Maxim’s Tea House employed Ariel Tres Reyes as a driver. loss of trust and confidence. National Bookstore complied with this requirement but they also carry the burden of showing convincing evidence that the dismissal is based on the just causes enumerated in Art 282 of the LC. upon decision of the Branch Manager.neglect of duty and loss of confidence. she was already convicted of the crime of Mercury Drug Corp v. use that reasonable care and caution which an ordinarily prudent person would use in the same situation? The court. Hence this petition. thus he filed the complaint for illegal dismissal where the LA found him grossly negligent in failing to avoid the collision. The Branch Manager confronted her and thus she gave a resignation letter apologizing as well as saying that she as tempted because it was the exact amount. Mercury sent a letter to Zenaida terminating her employment due to loss of trust and confidence. it was only a single and isolated act and this does not constitute gross or habitual neglect of duties. Defenisve driving is also not a defense. The employees filed a complaint for illegal dismissal against the company. Upon looking at the evidence. Tres Reyes v. generally applies to management employees.

Fregil was allegedly informed that teller Descartin was going to prepare a “white lie” report. Respondents. Thus. instead of betrayed. The petition should be denied. even if done in good faith. Private respondent filed a case for illegal dismissal before the LA. Initial discrepancy was accounted for. Zambrano mistakenly wrote the wrong surname in the med cert which led to a shouting match between Apduhan and Kawada which allegedly caused her to collapse. failure to report a shortage is not a ground to terminate employment. Enriquez and Sia were the branch manager and assistant branch manager of BPI-Bacolod. Apduhan sent 2 other Memorandums where Apduhan claimed that the answers given by the private respondent were all hypothetical. she may be awarded damages. Remedios Descartin (Remedios). Private respondent sought medical help due to complaints of dizziness. Private respondent reported the confrontation between her and Apduhan to the Central Police District. Petition is DENIED. 117 . Petitioners appealed the NLRC Decision to the CA. and seeking from the private respondent an explanation regarding the incidents. Petition partly granted. have a different version of what transpired. It is the position of petitioners that as there was neither shortage nor loss to the bank. Adding credence to her committing of the offense. However. petitioners aver. Dr. Uniwide. There is no denying that loss of trust and confidence is a valid ground for termination of employment. Kawada was employed by Uniwide and was promoted to Full Assistant Store Manager in 1995. LA dismissed the complaint for lack of merit. Their manifest condonation and even concealment of an offense prejudicial to their employer’s interest committed by a subordinate under their supervision reflect a regrettable lack of loyalty which they should have reinforced. Thus this petition. The court found the petition to be meritorious.00 due to an innocent oversight of her mother-in-law. the transaction was regularized before the end of the day. Descartin was permitted to leave the bank to look for Remedios so that the latter could sign the withdrawal slip. Finding private respondent to be suffering from hypertension. denied petitioners’ appeal and affirmed in toto the latter’s assailed decision. It is well-settled that the power to dismiss an employee is a recognized prerogative that is inherent in the employer’s right to freely manage and regulate his business. Also. NLRC ruled that respondents had just cause to terminate their employment. was incurred because she had temporarily borrowed the money that week.” under BPI’s bank policy. Taken together with the attending circumstances of the case. Petitioners were dismissed from employment on grounds of breach of trust and confidence and dishonesty. the present petition. issued a Memorandum summarizing the various reported incidents signifying unsatisfactory performance (commingling of good and damaged items. Uniwide received reports from the other employees regarding some problems in Kawada’s departments. Thus. Amelia R. it must be shown that the employee is a managerial employee. BPI Uniwide Sales Warehouse Club v. agreeing with the NLRC. the failure of petitioners to report the cash shortage of teller Descartin. sale of a voluminous quantity of damaged stocks) Private respondent answered all the allegations. Apduhan issued a Memorandum advising Kawada of a hearing and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence. Enriquez v. Petitioners filed their respective Complaints for illegal dismissal against respondents and prayed for reinstatement. A review of the teller’s transaction summary of teller Descartin reinforces the conclusion that the shortage in her pico box was due to a “temporary borrowing.qualified theft to which the mason testified aganst her. through Store Manager Apduhan. Apduhan issued a Memorandum stating that since private respondent was unable to attend the scheduled hearing. to sign the withdrawal slip when the latter withdrew P36. CA affirmed in toto the NLRC Decision. Petitioners thereafter elevated the case to the Court of Appeals. however. nonetheless resulted in their abetting the dishonesty committed by the latter. Dr. They maintain their branch experienced a heavy volume of transactions owing to the fact that it was the last banking day of the year and that Descartin. NLRC Amalia P.00 earlier that day. The Court agrees with the findings of the LA that the termination of private respondent was grounded on the existence of just cause under Article 282 (c) of the Labor Code or willful breach by the employee of the trust reposed on him by his employer or a duly authorized representative.000. one of the tellers had a cash shortage of P36. Unsatisfied. Zambrano advised her to take five days sick leave. Petitioners were instructed to report to the BPI head office for polygraph testing. the case was evaluated on the basis of the evidence on record. since the term “trust and confidence” is restricted to said class of employees. Mercury failed to abide by the two notice rule and thus deprived her of due process. Hence. LA found that petitioners had been illegally dismissed.000. Descartin confided to her co-teller Fregil. The appellate court. In 1998. Petitioners submitted their respective replies in which they denied the charges against them. Private respondent appealed the LA’s decision to NLRC the NLRC ruled in favor of private respondent.

An employer may terminate an employment for any of the following causes: e. NLRC affirmed the LA but deleted the award of financial assistance. nor any motive for them to make up the story. records. which are just causes for termination under the Labor Code. For serious misconduct to exist. through its Industrial Relations Department.00 per sack of rice given to petitioner’s employees threatening him that they would no longer get him as a rice supplier. thus it has been said that a finding of guilt may be based on the uncorroborated testimony of a single witness when the tribunal finds such testimony positive and credible. Analogous Cases Cathedral School of Technology v. We see no reason to doubt their credibility. Upon appeal CA granted the petition. However. but also the union members whom they had sworn to serve. Rodolfo Siena. they claim that respondents betrayed not only the Company. They are not employees of petitioner. Respondent’s denials and alibi of committing said act fall flat in the face of the credible testimonies of the spouses Siena. 282. Rolando Simon - Commission of a Crime Art. An employer may terminate an employment for any of the following causes: d. after which respondents were found guilty. Clearly. this is not sufficient to overcome the findings of petitioners that the private respondent is guilty of the charges imputed to her. The September 1.” Thus. issued a Notice of Disciplinary Charge with Preventive Suspension against respondents. in the case of managerial employees. the act complained of should be corrupt or inspired by an intention to violate the law or a persistent disregard of well-known legal rules. mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. Termination by employer. According to petitioner. Although she worked for Uniwide for almost 17 years with a clean bill of record. private respondent chose not to attend the scheduled hearing because of her mistaken belief that she had already been constructively dismissed. Hence. mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. she volunteered to assist as a library aide and in return for her work she was given 118 . considering that respondents were dismissed for cause on the ground of serious misconduct. However. constitute substantial evidence. Thus this petition. one of the accredited rice suppliers complained to petitioner that respondents had extorted money from him in exchange for union protection for his rice store’s continued accreditation. corroborated by the various pieces of evidence supporting such charges. in the mind of the Court. private respondent was given an opportunity to be heard.Private respondent occupies a managerial position. The court finds for the petitioner. National Labor Relations Commission managerial employee. in loss of trust and confidence. 1998 Memorandum where the private complainant was dismissed for loss of trust and confidence is valid and complies with the due process requirement. In Caoile v.e. proof beyond reasonable doubt is not required. He detailed that he was approached by respondents who introduced themselves as newly elected union officers. Termination by employer. Administrative hearings were conducted. Petition is GRANTED. not numbered. 282. Simon was designated as Union Chairman. said act is “a clear case of serious misconduct. Rolando Simon and Constantino Ajero (respondents) were employees of petitioner and members of the Hourly Union. Other causes analogous to the foregoing. We find substantial evidence to support respondents’ dismissal. Respondents’ acts constitute serious misconduct and willful breach of trust reposed by the employer. NLRC Teresita Vallejera aspired to be a nun in their congregation and thus she came to live with the sisters. reports and testimonies of Uniwide employees. During her stay. and - Art. Respondents filed a case for illegal dismissal but their complaint was dismissed by the LA. The irregularities and offenses committed by private respondent. testimonies are to be weighed. fraud and willful breach of trust. i. and demanded that he pay them P50. As a managerial employee. it must be shown that the employee concerned is responsible for the misconduct or infraction and that the nature of his participation therein rendered him absolutely unworthy of the trust and confidence demanded by his position. and disloyalty to the Company as their employer” as it “sabotages the Company’s Rice Subsidy Program and disrupts the efficient administration of services and benefits to employees. even respondents admitted that they could not think of any motive why Siena would accuse them of extortion. The core of petitioner’s decision to dismiss respondents is the statements of the spouses Siena. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives. Petitioner. Petition is GRANTED Mitsubishi Motors Phil v. On the other hand.

after trying to settle her differences with the directress after storming out of the meeting. she pleaded however. the Ratings were changed to Significantly Above Target. On T. may terminate an employee for fraud or willful breach of trust. infact. Sixta Lim was employed by the Pepsi Cola Company as a secretary since 1981 and when she was dismissed due to low performance levels. even the SBT is just a ground for probation not termination.200/month. On appeal to the CA. Thus this petition. Lim v. Genuino asked for a bill of particulars. Petition Granted. Later on. The court further held that there can be no backwages or separation pay given that the termination was for a just cause. However. NLRC Marilou Genuino was employed by Citibank as a Treasury Sales Division Head. LA ruled fro her reinstatement. Yasuki Mihara of PepsiCo Japan but before Mihara could visit the Philippines. The evidence shows that Genuino did not have her employer’s interest during these transactions. found her guilty of using their family’s corporation Global Pacific in diversion of bank client’s funds to their products which yielded higher interests that what Citibank offered. She filed a case for illegal dismissal and the LA ruled for her saying she was illegally dismissed. She filed a complaint for dismissal without due process. Fair. She even managed to have the chief librarian resign She was summoned to the office of the directress where she walked out upon hearing the negative comments about her while saying OK I will resign” The school. The court held that her unreasonable behavior and unpleasant deportment in dealing with the people she closely works with in the course of her employment. the dismissal remains valid since the employer. For loss of trust and confidence to be a valid ground. willful breach f trust and commission of crime against the bank. she was never informed of her gross inefficiency and the brochure of PEPSI entitled “Managing Performance”. according to Art 282 of the LA. Being a Catholic School. she has rated BT since she was poor in production reporting which was raised to 40% of the overall rating. the fact remains that the charges were too general to enable Genuino to intelligently and adequately prepare her defense. This time. she was asked to voluntarily resign but she refused to do so. The company set an investigation and Genuino. NLRC’ s decisions annulled. It is respondent’s obstinate refusal to reform herself which ultimately persuades this Court to find that her dismissal on the ground of serious misconduct was valid. She asked for a reappraisal which returned with the same results. Other Causes Abandonment 119 . PEPSI violated her right to due process when they served her with the notice of her resignation but did not afford her a venue to be heard or defend herself of the charges before her actual termination. PEPSI did not characterize the deficiencies it attributed to the petitioner as gross inefficiency. The NLRC and the CA affirmed the decision of the LA Thus this petition. the court dismissed both petitions. The LA ruled for her. In the case however. The lack of procedural due process in giving her notice and hearing. who did not attend. Significantly BT. As for procedure. she was already the staff accountant. Below T. Both parties appealed to the NLRC who ruled that the dismissal was valid and legal. Superior and Distinguished wherein Lim rated as Superior. NLRC Genuino v. Later on. She was accused of using her family corporations in order to participate in the diversion of bank client funds from Citibank. it is expected that good behavior and proper deportment is exercised at all times. gross Inefficiency is related to gross neglect because both involve specific acts of omission on the part of the employee resulting in damage to the employer or to his business. She filed a complaint for illegal dismissal. She was appraised negatively regarding this matter. Citibank affirmed. is analogous to the other “just causes” enumerated under the Labor Code. Genuino’s petition dismissed. she confessed to the sisters that she no longer wanted to be an nun. it must be substantial and not arbitrary and must be founded on clearly established facts but t need not be proven beyond reasonable doubt. this does not make her illegally dismissed. - c. She wrote to the Mr. she received a letter from the bank charging her with knowledge or involvement which was irregular or even fraudulent. The sisters then began receiving numerous complaints about her sour disposition at work and her difficult personality both the students as well as with her co-workers. She was terminated on grounds of serious misconduct. t that they allow her to live with them. Later on. NLRC Reversed the LA. Commendable. Thus these petitions. BT rating does not merit a dismissal. AT. The sisters agreed and tasked her as a library aide with a salary of more than 1k. The court agrees with PEPSI that gross inefficiency falls within the purview of other causes analogous to those enumerated in Art 282. was informed that her resignation has been accepted. Pepsi evaluated its employees as Marginal. The court held that Genuino was dismissed for just cause but without the observance of due process since even if the bank gave Genuino an opportunity to deny the truth of the allegations in writing and participate in the administrative investigation. Petitioner was verbally informed of her termination. NLRC + CITIBANK v.

Rufino Javilgas Big AA Manufacturer v. in this case. the latter transferred him to the Novaliches branch office. The NLRC ruled that respondents were regular employees. as he did not even get to finish Grade School. In illegal dismissal cases. alleged that SSS and Medicare contributions were deducted from Javilgas’ salary and remitted to the SSS. to 5:00 p. their contractual relationship ended. Javilgas returned and pleaded to be re-employed with them. to show that Javilgas was dismissed for a valid and just cause. He alleged that Javilgas had opened his own machine shop and even “pirated” the clients of petitioners. the applicable test to determine whether an employment should be considered regular or non-regular is the reasonable connection between the particular activity performed by the employee in relation to the usual business or trade of the employer. Javilgas again voluntarily left Padilla Machine Shop without prior notice. It also claimed that the workers are project employees only. LA ruled against petitioners.” but “without giving any reason therefor. It said that its independent contractors were paid by results and were responsible for the salaries of their own workers. that Rodolfo Padilla took Javilgas back to work. It held that the burden of proof is on the petitioners. It ordered petitioner to reinstate respondents to their former positions or to pay them separation pay in case reinstatement was no longer feasible. the court found that respondents cannot be considered project employees. some months after. The NLRC modified the Labor Arbiter’s decision. The court found Javilgas was found to be illiterate. in like manner. not independent contractors.m. Also. that he abandoned his employment when he walked out after his conversation with Rodolfo and never returned to work again. at petitioner’s office manufacturing company using petitioner’s tools and equipment and they received P250 per day. Padilla (Rodolfo). they (petitioners) submitted a report to the SSS that Javilgas had voluntarily left and abandoned his work. Petitioners. Respondents filed a complaint with the LA for illegal lay-off and illegal deductions saying that they worked from 8:00 a. and finally. It likewise declared as without basis the petitioners’ claim that Javilgas was operating a rival machine shop. proprietor of Padilla Machine Shop. With respect to Javilgas’ claim of illegal dismissal.” He stopped reporting for work and sued petitioners for illegal dismissal. Respondents appealed for not ordering their reinstatement to their former positions. consistently deny that Javilgas was dismissed from service. Antonio Big AA Manufacturer is a sole proprietorship registered in the name of its proprietor. Padilla Machine Shop v. Petitioners have failed to discharge themselves of the burden. Petitioner had neither shown that respondents were hired for a specific 120 . It further held that petitioner failed to justify its reason for terminating respondents and its failure to comply with the due process requirements. Thus this petition. and. since petitioners failed to prove with sufficient evidence the veracity of said claim. but their customers were not satisfied with the quality of his work. It claimed that Eutiquio Antonio was one of its independent contractors who used the services of the other respondents. Alejo who fired the respondents due to abandonment. (b) that there must have been a clear intention to sever the employer-employee relationship manifested by some overt acts. Allegedly. 280 of the Labor Code. CA reinstated decision of LA. with full backwages in either case. Enrico E. The court found that respondents were employed for more than 1 year and their work as carpenters was necessary or desirable in petitioner’s usual trade or business of manufacturing office furniture. it should be coupled with evidence to support it. The NLRC found no sufficient evidence to show that Javilgas was dismissed or prevented from reporting for work. petitioners merely alleged that Javilgas did not anymore report for work. when he complained about the failure of his employer to remit his SSS contributions. the burden of proof is on the employer to show that the employee was dismissed for a valid and just cause. Big AA denied that respondents were its regular employees.Rufino Javilgas was hired by Padilla Machine Shop. CA affirmed NLRC ruling. Thus this petition. does not suffice. His work consisted of reconditioning machines. The establishment of his own shop is not enough proof that Javilgas intended to sever his relationship with his employer. LA held that Javilgas was illegally dismissed. that in 2000. Under Art. but sometime in 2002. hence Javilgas was assigned to the Novaliches branch.m. For abandonment to exist. Rodolfo Padilla called him by telephone and told him to “stop working. it allowed respondents to use its facilities to meet job orders. He did not elaborate or show proof of the claimed abandonment. petitioners failed to adduce evidence to rebut Javilgas’ claim of dismissal and satisfy the burden of proof required. In the instant case. it is essential (a) that the employee must have failed to report for work or must have been absent without valid or justifiable reason. Petition is DENIED. he found out that his employer was not remitting the contributions to the SSS. Both appealed to NLRC. But denial. It added that since Eutiquio Antonio had refused a job order of office tables. Petitioners made regular deductions for his SSS contributions.

Thus this petition. LA rules that he was illegally dismissed. 1982. a just cause for termination of employment by the employer under Article 282 of the Labor Code. that he sent a memorandum to Cairlan asking him to report for duty. but (2) also of respondents’ clear intention to sever employer-employee relations as manifested by some overt acts. Contrary to petitioner’s claim of abandonment as a valid just cause for termination. The court said that to "streamline" its operation. The consistent rule is that the employer must affirmatively show rationally adequate evidence that the dismissal was for a justifiable cause. Petition is hereby DENIED. Cairlan in 1978 as driver. Nueva Ecija Electric Cooperative (NEECO) II employed private respondent Eduardo M. the court ruled that the Labor Arbiter is given the latitude to determine the necessity for a formal hearing or investigation. Petitioner failed to prove that (1) not only of respondents’ failure to report for work or absence without valid reason. He filed a complaint for illegal dismissal. as in this case. by directing its employees to submit letters of courtesy resignation. terminated private respondent’s services on ground of abandonment.Cairlan is entitled to reinstatement without loss of seniority rights and other privileges and full backwages. Petition denied. a lawyer. Thus this petition. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. also because of insubordination in view of his failure to comply with the order to submit his letter of courtesy resignation. Immediately thereafter. As for the due process issue. dela Cruz regarding this and dela Cruz promised that he would talk to the Board of Directors about it. The court held that insubordination may not be imputed to one who refused to follow an unlawful order. Courtesy Resignation Batongbacal v. once the position papers and other documentary evidence of the parties have been submitted before him. The court found that petitioner miserably failed to establish the fact of abandonment to justify private respondent’s dismissal. The court added that Batongbacal’s dismissal was effected through a letter "accepting" his resignation and based on the pleadings. the new management of the bank called upon all its employees to submit their courtesy resignations and considered all executive positions vacant. the bank in effect forced upon its employees an act which they themselves should voluntarily do. Dela Cruz also said that upon investigation. he found that Cairlan has been working for the Provincial Government of Nueva Ecija under a different name. herein respondents did not abandon their work. Batongbacal. the memorandum was not found in the records and the claim of him working for another was not sufficiently proven by evidence. Resignation means voluntary relinquishment of a position or office. private respondent talked with Mr. NLRC dismissed for lack of merit. Nueva Ecija Electric Corp v. The court also held that they were illegally dismissed. Danilo dela Cruz. failing in which would make the termination illegal. appointed assistant vice-president of Rizal Devt Bank. Dela Cruz said that since he assumed the position of General Manager he never saw Cairlan also. The evidence submitted by petitioner to buttress its allegation that private respondent abandoned his work consists merely of indexes of payments to employees under the name Eduardo Caimay without any further evidence showing that Eduardo Caimay and private respondent Eduardo Cairlan. It is settled that an employee who forthwith protests his layoff cannot be said to have abandoned his work. More than six years later or in March. Bank's board of directors met and approved the resolution asking all those with the rank of manager or higher to submit their courtesy resignations due to the DEWEY DEE scandal. Court of Appeal upheld the decisions of the NLRC and the Labor Arbiter. Associatied Bank 121 . NLRC - Bienvenido R. Petitioner did not submit his courtesy resignation but was later on set a letter thanking him for his service and saying that his resignation has been accepted. However. which he never did thus Cairlan filed a complaint for illegal dismissal with prayer for reinstatement and payment of backwages. By filing the complaint for illegal dismissal within two days of their dismissal and by seeking reinstatement in their position paper. He wrote the bank's board of directors asking foe the money due him. petitioner learned that the salary and allowances he was receiving were very much below the standard remuneration of the bank's other assistant vice presidents.project the duration of which was determined at the time of their hiring nor identified the specific project or phase thereof for which respondents were hired. petitioner’s General Manager. As for the issue of illegal dismissal. The bank merged with Associated Banking Corporation and here. NLRC found the petitioner's dismissal valid. LA upheld the petitioner's arguments and claims. respondents manifested their intention against severing their employment relationship with petitioner and abandoning their jobs. it is a form of neglect of duty hence. the petitioner resumed his position as assistant VP.

The petitioners were advised of such change of ownership and thus they were terminated. through Garnele. the employees have been validly dismissed. For their alleged absence without leave. Because the transfer was in good faith. The contract of lease executed between Garnele and HILLA stipulated the continued employment of 120 of the former employees by the latter. - Change of Ownership Manlimos v. 8 which was issued by the then Secretary of Labor and which took effect on April 23. 1976. etc. The lease agreement Elecee Farms Inc. (2) who have the power to hire. to have abandoned their work. is not one of the just causes x x x terminate employment without a definite period. v. and (3) HILLA filed their own Motions for Reconsideration." Thus. 212(k) of the Labor Code defines a managerial employee as "one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire. and (3) who have the power to recommend effectively (1) and (2). the change in ownership of the management was done bona fide. The NLRC ruled that the simulation of the lease agreement between Elcee Farms and Garnele was made in bad faith. Elcee Farms entered into a Lease Agreement with Garnele Aqua Culture Corporation (Garnele). Thus. it leased the hacienda to HILLA. demote. LA ruled for the employees saying that the transfer of ownership partook of a cessation of business operation not due to business reverses under Article 283 of the Labor Code and the following requisites must be complied with before the dismissal of employees may be effected: (1) service of a written notice to the employees and to the Ministry of Labor and Employment (MOLE) at least one month before the intended date thereof. Sugar Agricultural Industrial Labor Organization (SAILO). were considered as not up to the standards of production of the company. In the case at bar. The court held that the above findings show that even after the execution of the lease agreement between Elcee and Garnele. Thus this Petition for Certiorari. represented by their labor union. they are therefore on trial to afford new management to determine whether or not they would qualify for permanent employment. or to effectively recommend such managerial actions. the transferee is under no legal duty to absorb the transferor's employees as there is no law compelling such absorption. transfer. NLRC reversed LA saying that the general rule is that "(C)hange of ownership or management of a business establishment or enterprise however. as of 4 May 1992. A new owner/management group headed by Alfredo Roxas acquired complete ownership of the corporation. Thus. lay-off. subsequent hiring of complainants on probationary basis by the new management/corporate owners being the prerogative of management must be sustained As probationary employees. fire. they should have been accorded the constitutional protection of security of tenure such that they may only be terminated for just cause. but were compensated on piece-rate or task basis. Perla Cumpay and Virginia Etic were considered. (2) the cessation of or withdrawal from business operations must be bona fide in character. The new owner published a notice for the hiring of workers. They filed a complaint for illegal dismissal. The Labor Arbiter ruled that the first and third requisites were present in this case. discharge. "an innocent transferee of a business has no liability to the employees of the transfer or to continue employing them hiring of employees on probationary basis is an exclusive management prerogative. The three sets of parties (1) the complainants. recall. Elcee continued to act as the employer of the farm workers of Hacienda Trinidad. The petitioners then filed their applications for employment and were hired on probationary basis for six months as patchers or tapers. who operated HILLA. assign or discipline employees. managerial employees are those (1) who have the power to lay down management policies. As to Cumpay and Etic. NLRC Super Mahogany Plywood Corporation hired petitioners as patchers. filed this complaint for illegal dismissal. and receiversdryers. the employer-employee relationship between the farm employees and Elcee Farms was severed. however. Garnele sub-leased Hacienda Trinidad to Daniel Hilado. (2) Elcee Farms and Corazon Saguemuller. the private respondents were terminated by HILLA. Pampelo Semillano and one hundred forty-three (143) other complainants. promote. Labor Arbiter dismissed their claim for damages and denied all claims." Policy Instructions No. and (3) payment to the employees of termination pay amounting to at least one half month pay for each year of service or one month pay whichever is higher. suspend. the case is remanded to the NLRC to determine WON he is a management employee.As to the salary. After the said lease was executed.. Complainants appealed and NLRC affirmed the amount awarded by the Labor Arbiter as separation pay. but the contract was silent as to the benefits which may accrue to the employees Soon after HILLA took over it entered into a CBA with another union and due to their refusal to join the labor union. Elcee Farms effectively ceased to operate and manage Hacienda Trinidad when. NLRC 122 . They were all dismissed. the NLRC merely relied on the presumption that Batongbacal is a management employee. Petition is partly GRANTED (as to Cumpay and Etic only. The others. taper-graders.

The court held that the regulation of manpower by the company clearly falls within the ambit of management prerogative. will not be employed by the lessee. and (2) the order violated must have been reasonable. there is no question that petitioner’s order for respondent to render overtime service to meet a production deadline complies with the second requisite and that the excuse he used will not hold water as not evidence was shown to support it. LA dismissed the case for lack of merit. this petition. National Labor Relations Commission. “In the case at bar. When he was ordered to render overtime service in order to comply with a deadline. Thus this petition. The fact that the numerous infractions of respondent have not been immediately subjected to sanctions cannot be interpreted as condonation of the offenses or waiver of the company to enforce company rules. CA affirmed the NLRC. Fixed Term Employment Medenilla v. but ten (10) times and an employee’s habitual absenteeism without leave. But although they were absorbed by the new management of the hacienda. In a similar case. was employed on probationary status by Meralco as a lineman driver. PVB 123 . he refused to do so. (2) commission of discourteous acts and disrespectful conduct when addressing superiors. And so her was told not to work. LA came out with a decision declaring petitioners' dismissal illegal. under Section 283 of the Labor Code. and (4) insubordination The court held that habitual tardiness is a form of neglect of duty. it was established that complainant violated respondent’s Code on Employee Discipline. (3) failure to render overtime work despite instruction to do so. Jr. lawful. This court had defined a valid exercise of management prerogative as the employer being free to regulate. there was a cessation of operations of Elcee Farms. diligence. Petitioners aver that Galit was dismissed due to the following offenses: (1) habitual and excessive tardiness. which renders it liable for separation pay to its employees. The petition is GRANTED. according to his own discretion and judgment. and discipline to come to work on time everyday exhibit the employee’s deportment towards work. NLRC reversed the decision of the LA and dismissed the Complaints for lack of merit. CA REVERSED RB Michael Press v. they will be considered as new employees. Galit was employed by petitioner R. is still required to pay the separation pay. Nicasio Galit - Because of the liquidation of Philippine Veteran’s banks. respondent was terminated from employment. in the absence of any showing that the latter has assumed the responsibilities of the former employer. not only once. For willful disobedience to be a valid cause for dismissal. Lack of initiative. these two elements must concur: (1) conduct must have been characterized by a wrongful and perverse attitude. Hence.between Garnele and Daniel Hilado identified the employees who will continue working with the new management and stipulated that workers who were not in the list. NLRC affirmed the LA. and therefore no longer manages and controls the hacienda. He filed a complaint for illegal dismissal against petitioner. Michael Press as an offset machine operator and he was tardy for a total of 190 times and was absent without leave for a number of days. Cortez’ service with petitioner is his perennial suspension from work and he was found to have grossly neglected his duties by not attending to his work as lineman. LA found him to be illegally dismissed. and must pertain to the duties which he had been engaged to discharge. which violated company rules and regulation is sufficient to justify termination from the service. NLRC Jeremias Cortez. Abella v. Galit filed a complaint for illegal dismissal. whether new or employed in the past. The petitioners instituted a case for illegal dismissal. In the hearing. NLRC set aside the decision of the Labor Arbiter and ordered petitioner to reinstate respondent with backwages. Petition is partially granted. and to return later in the afternoon for a hearing. all aspects of employment. Petitioners received a uniform notice of dismissal containing the reasons justifying the termination.B. the Court ruled that an employer whose lease agreement had already expired. supposedly because he was not feeling well. Clearly. made known to the employee. In the present case. (modification: Corazon Saguemuller should not be held subsidiarily liable) - Habitual Absenteeism Manila Electric Co v. The nature of Cortez’ job as a lineman-driver requires his physical presence to minister to incessant complaints often faulted with electricity. petitioners were terminated but were rehired on the condition that the employment shall be strictly on a temporary basis and only for the duration of the particular undertaking.

But because PVB is already liquidated. LA ruled that he breached company rules. Respondents filed a complaint for illegal dismissal and unfair labor practice against petitioner with the Public Sector Labor-Management Council 1 ("PSLMC"). Guidelines by which fixed contracts of employment can be said NOT to circumvent security of tenure. the burden is on the employer to prove that there was a valid ground for dismissal. and (2) Refusing or neglecting to obey Company management orders to perform work without justifiable reason. if the contract is for a fixed term and the employee is dismissed without just cause. A Notice of Preventive Suspension against respondent was also issued for (1) Failure to turn over company vehicles assigned after the receipt of instruction to that effect from superiors. During his employment. the irresistible conclusion is that the dismissal in question was illegal. A Notice of Disciplinary Action was issued finding respondent guilty of (1) delayed submission of process reports. As held by this Court. he is entitled to the payment of his salaries corresponding to the unexpired portion of the employment contract. cannot be reinstated. PLM was directed to produce the evaluation results of the 16 complainants. PLM interposed (1) the temporary nature of private respondents' contracts of employment and (2) reasons that could justify the non. Civil Service Commission - Janssen employed Benjamin Silayro as a Medical Representative. This rule. Petition is PARTLY granted. As the respondents failed to rebut petitioners’ evidence. Mere allegation of reduction of costs without any proof to substantiate the same cannot be given credence by the Court. for which he was subjected to a one-day suspension without pay. PSLMC found that on two occasions. The court held that unfair labor practice charge and the complaint for illegal dismissal both filed by private respondents are linked since the non-renewal of an employment contract with a term. The Court has repeatedly upheld the validity of fixed-term employment. is ordinarily a valid mode of removal at the end of each period. The finding of the PSLMC that the nonrenewal by petitioner of the questioned contracts of employment had been motivated by private respondents' union activities is conclusive on the parties. respondent received from petitioner several awards and citations and a Nomination as one of the Ten Outstanding Philippine Salesmen but he was also investigated and was found guilty of several administrative charges. sustaining the findings of the PSLMC. duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent 2. PLM denied having committed any unfair labor practice or having illegally dismissed private respondents. it certainly may not. however. Silayro 124 . it is true. In cases of illegal dismissal. NLRC declared that reinstatement was improper Past Offenses Janssen Pharmaceuticals v. evidence points to the fact that PLM seeks to remove their employees that have been appointed as officers of the union. Silayro was terminated and thus he filed a complaint for illegal dismissal. must yield to the superior constitutional right of employees to self-organization. Thus this petition.The court held that the important features of the contract were that the employment shall be on a strictly temporary basis and only for the duration of the particular undertaking for which he was hired and only for the particular days during which actual work is available. are either: 1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties. and which were sufficient grounds for dismissal but found that the penalty of dismissal is too harsh and recommended his reinstatement. and (2) cheating in his ROL test. While. be terminated for an illegal cause. PSLMC found petitioner guilty of "Unfair Labor Practice" PSLMC transmitted the case to the CSC for appropriate action who then held that the findings of PSLMC are entitled to respect and there is no need to conduct an investigation of their own. Petition for certiorari is DISMISSED Pamantasan ng Lungsod ng Maynila v. however. 16 individual private respondents were full-time instructors of PLM under "temporary contracts" of employment renewable on a yearly basis.renewal of the contracts. for which he was subjected again to a one-day suspension. In its defense. a temporary employment may be ended with or without cause. They were given uniform notices of termination informing them of "the expiration of their temporary appointments and that their retention was not recommended by their respective Deans. It satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former on the latter. The employment contract entered into by the parties herein appears to have observed the said guidelines since the termination of petitioners' employment was in line with the objective of the Central Bank of the Philippines to reduce costs and expenses in the liquidation of closed banks. without any force.

where respondent was dismissed for just and authorized causes. CA affirmed LA decision. Thus this petition. The court ruled that to constitute a valid dismissal from employment, two requisites must concur: (1) the dismissal must be for any of the causes provided in Article 282 of the Labor Code; and, (2) the employee must be given an opportunity to be heard and to defend himself. Petitioner had not been able to identify an act of dishonesty, misappropriation, or any illicit act, which the respondent may have committed in connection with the erroneously reported product samples. As for the three other offenses, Silayro already admitted to them. The court said that even if the respondent was already punished for the three prior infractions, these offenses, among other offenses, may still be used as justification for his dismissal. The court found him negligent in preparing his reports and he was guilty of giving free samples and in answering the ROL exam. However, the records show that in the same year it was committed, in 1994, petitioner still gave respondent two awards (5 year service and Wild Boar Arard) Also, the rest of the infractions were committed during the time he was undergoing serious family problems. As for the ROL exam, the court found him guilty of such but ratiocinated that his inability to comply with the deadlines for his process reports are the result of his preoccupation with very serious problems and that due consideration must be given because of the ill fortune that befell a normally excellent employee. The petitioner had not shown that during his employment, respondent took a willfully defiant attitude against it. It also failed to show a pattern of negligence which would indicate that respondent is incapable of performing his responsibilities. Petition is DISMISSED. Silayro subjected to 5 months suspension without pay. Virginia Ramoran started working with Jardine as an accounting clerk and later on was promoted to junior accountant with Antonio Robles as her immediate supervisor. The HRD noticed some irregularities in the overtime slips submitted by Ramoran and upon confirmation of its invalidity with Robles, petitioner was terminated from employment. Petitioner stated that she just wanted to catch up with work backlog caused by her serving a previous penalty of suspension for tampering with the receipt for her 6K glasses (she bought P100 worth contacts lang naman talaga) and, for that reason, she did not immediately file her OT authorization slips and submitted only when she was reminded by the HRD. On the other hand, Robles, consistently denied having signed and approved the OT She filed a complaint of illegal dismissal. Jardine filed a complaint with the Arbitration Board of the National Labor Relations Commission. Jardine also filed a criminal complaint against petitioner. LA dismissed the case. The MTC acquitted her of the crime. Believing that the decision of the Panel of Voluntary Arbitrators may now be overturned following her acquittal in the two criminal cases filed against her, petitioner filed with CA. Hence, this petition. The court held that conclusions of voluntary arbitrator (or a panel as in this case) when they are sufficiently corroborated by the evidence on record, should be respected by appellate tribunals. It should be noted that the panel did not have the benefit of examining the other evidence apparently adduced by RAMORAN. Even if the trial court found the same documentary evidence to be inadequate to sustain Ramoran's conviction, by no means does it prevent the panel from considering the evidence sufficient to warrant dismissal. The authorized time must be indicated in the overtime authorization for the purpose of establishing and limiting the basis of overtime to be performed by an employee. After the same was signed by Mr. Robles she entered her alleged overtime. Also, due to her previous infraction with the company causing her suspension, she was already issued a memorandum, warning her that "any future violation of the same nature, irrespective of the time frame that it is repeated or committed, would result in the imposition of the maximum penalty of dismissal." Dismissal on the basis of loss of trust and confidence calls for substantial evidence and in the instant case, petitioner was apprised of the charges against her but petitioner offers no evidence to disprove her accusation.Petition is hereby DENIED.

Ramoran v. Jardine CMG

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Gustilo was employed by Wyeth Phils Inc. as a pharmaceutical territory manager and among his tasks was submitting periodic reports of his daily call visits, monthly itinerary and weekly locator and expenses but he was often suspended or reprimanded for neglecting to submit his periodic reports. - Wyeth put Gustilo in charge of promoting 4 Lederle (W’s sister company) pharmaceutical products. G then submitted to W a plan of action but Gustilo failed to achieve his objectives so W sent him 2 notices charging him with willful violation of company rules and regulations and directed him to submit a written explanation. G explained that he was overworked and an object of reprisal by his immediate supervisor. Wyeth, upon the recommendation of a review panel, terminated Gustilo’s services.

Habitual Infractions Gustilo v. Wyeth Phil

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G filed a complaint for illegal dismissal. LAfound that G was illegally dismissed. NLRC- affirmed. W’s MR was denied. CA- reversed NLRC’s decision and dismissed G’s complaint for illegal dismissal (as G was terminated based on A282 of the LC-gross and habitual neglect by the employee of his duties) but awarded him separation pay considering the Gustilo isn’t entitled to his SP OR to reinstatement as there was a just cause for dismissal. - Piedad v Lanao del Norte Electric Cooperative, Inc .- a series of irregularities when put together may constitute serious misconduct, which under A282 of the LC, as amended, is a just cause for dismissal. - The rule embodied in the Omnibus Rules Implementing the Labor Code is that a person dismissed for cause as defined therein is not entitled to separation pay. In the case at bar, there is NO exceptional circumstances to warrant the grant of financial assistance or separation pay to petitioner. G did not only violate company disciplinary rules and regulations. He falsified his employment application form by not stating therein that he is the nephew of Mr. Danao, respondent Wyeth’s Nutritional Territory Manager. G manifested his slack of moral principle through his infractions. In simple terms, he is dishonest. Petition is DENIED

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Immorality Santos v. NLRC

Jose Santos and Arlene T. Martin both married to different people and employed by the same school Hagonoy Institute Inc. fell in love with each other. Rumors of their affair spread and prompted the school officials to inquire about the matter. She was asked to take a leave of absence but she continued to work and was eventually terminated by force. Martin filed a compliant for illegal dismissal. LA dismissed petition. NLRC reversed the petition because of lack of due process. Meanwhile, Santos was charged administratively for immorality and was dismissed from service. he filed a complaint for illegal dismissal. LA dismissed complaint but awarded monetary sums as financial assistance. NLRC dismissed appeal and removed the awards. Thus this petition. The court upheld the NLRC saying that in order to constitute a valid dismissal, two requisites must concur: (a) the dismissal must be for any of the causes expressed in Art. 282 of the Labor Code, and (b) the employee must be accorded due process, basic of which are the opportunity to be heard and defend himself. Also, under Section 94 (E) of the Manual of Regulations for Private Schools: is says that school personnels, including faculty, may be terminated for disgraceful or immoral conduct. The court held that teachers must adhere to the exacting standards of morality and decency. There is no dichotomy of morality and when a teacher engages in extra-marital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment. In this case, the burden of proof rests upon the employer to show that the dismissal was for a just and valid cause and the testimonies of nine witnesses (a fourth year student, a security guard, a janitor and six co-teachers) as well as the absence of any motive on their part to falsely testify against the petitioner led to the court’s decision to dismiss petition.

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Conviction or Commission of a Crime Sampaguita Garments Corp v. NLRC

Emilia Santos, an employee of petitioner Sampaguita Garments Corporation was charged with theft for attempting to bring out of the company premises a piece of cloth belonging to the petitioner. She was dismissed and so she filed a complaint for illegal dismissal LA ruled for the company and the decision was reversed by the NLRC, which ordered her reinstatement. Sampaguita also filed a criminal action against Santos. After trial, she was found guilty Court dismissed the petition for certiorari against the decision of the NLRC. The decisions in both cases became final and executory; the petitioner opposed, invoking her conviction in the criminal case. However, the NLRC sustained her on the ground that its decision had long become final and executory. Thus this petition. The court held that even if once a judgment has become final and executory, it can no longer be disturbed but reinstatement is no longer feasible in view of the subsequent conviction of the private respondent. A contrary rule would have the effect of rewarding rather than punishing the erring employee for his offense. The punishment is not dismissal only because if the employee who steals from the company is granted separation pay even as he is validly dismissed, he might commit a similar offense in the future. Santos’ conviction of the crime of theft of property belonging to the petitioner has affirmed the existence of a valid ground for her dismissal and thus removed the justification for the decision ordering her reinstatement with back wages. Petition is GRANTED.

Eduardo Bughaw Jr. v. Treasure Island Industrial

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Eduardo Bughaw was employed as production worker by Treasure Island. Erlito Loberanes (Loberanes), who was caught in flagrante delicto by the police officers in possession of shabu implicated Bughaw as providing him the money to buy the illegal drugs. Treasure Island served a Memo for Explanation to Bughaw but he failed to appear before the counsel during the hearing date to explain his side. A second letter was sent to him asking him to attend an administrative hearing but he failed to show up. A third letter as issued terminating the services of the petitioner. Bughaw filed a complaint for illegal dismissal. He claimed that he was suspended for 30 days based on the unfounded allegation of his coworker that he used illegal drugs within company premises and that when he reported back to work he was no longer allowed to enter the work premises and was told not to report back to work. LA ruled in favor of Bughaw saying that the company failed to substantiate the charge against him. NLRC affirmed the decision of the LA saying that Treasue Island failed to accord due process to petitioner when it dismissed him from employment and that the use of illegal drugs can be a valid ground for terminating employment only if it is proven true. An accusation of illegal drug use, standing alone, without any proof or evidence presented in support thereof, would just remain an accusation. CA reversed NLRC saying that the petitioner was afforded the opportunity to explain and defend himself from. Hence this petition. The court ruled that the requirements for the lawful dismissal of an employee are two-fold, the substantive and the procedural aspects. 2 facets of a valid termination of employment are: (a) the legality of the act of dismissal, i.e., the dismissal must be under any of the just causes provided under Article 282 of the Labor Code; and (b) the legality of the manner of dismissal, which means that there must be observance of the requirements of due process. Loberanes’s statements given to police during investigation is evidence which can be considered by the respondent against the petitioner. Bughaw failed to controvert Loberanes’ claim that he too was using illegal drugs through the administrative hearings which were set. The respondent cannot be faulted for considering only the evidence at hand, which was Loberanes’ statement. The burden therefore is on respondent to present clear and unmistakable proof that petitioner was duly served a copy of the notice of termination. The Agabon v. NLRC doctrine enunciates the rule that if the dismissal was for just cause but procedural due process was not observed, the dismissal should be upheld. Where the dismissal is for just cause the lack of statutory due process should not nullify the dismissal or render it illegal or ineffectual. Petition is DENIED.

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Qualification Requirements Santos + St Luke’s Medical Center Employees Association AFW v. St. Lukes

Maribel Santos was hired as X-Ray Technician in the Radiology department of St. Luke’s Medical Center. At this time, congress passed and enacted RA 7431 known as the “Radiologic Technology Act of 1992” which requires radiology and/or x-ray technologists in the Philippines to get a proper certificate of registration from the Board of Radiologic Technology. Director of the Institute of Radiology issued a final notice to petitioner Maribel S. Santos requiring her to comply with RA 7431. Another memorandum to petitioner Maribel S. Santos advising her that only a license can assure her of her continued employment at the Institute of Radiology of the private respondent SLMC. A month later, Santos was imformed that the management of private respondent SLMC has approved her retirement in lieu of separation pay. She filed a complaint for illegal dismissal. LA ruled for Santos ordering SLMC to pay her separation pay but denied all her other requests. NLRC and CA affirmed the LA. Thus this petition. The court held that in section 2 of RA 7431, it clearly states that: Sec. 2. Statement of Policy. — It is the policy of the State to upgrade the practice of radiologic technology in the Philippines for the purpose of protecting the public from the hazards posed by radiation as well as to ensure safe and proper diagnosis, treatment and research through the application of machines and/or equipment using radiation. And that the enactment of R.A. 7431 is an exercise of the State’s inherent police power. No malice or ill-will can be imputed upon private respondent as the separation of petitioner Santos was undertaken by it conformably to an existing statute. It is undeniable that her continued employment without the required Board certification exposed the hospital to possible sanctions and even to a revocation of its license to operate. Private respondent is free to determine, using its own discretion and business judgment, all elements of employment, "from hiring to firing" except in cases of unlawful discrimination or those which may be provided by law. None of these exceptions is present in the instant case. Furthermore, the records show that Ms. Santos did not even seriously apply for another position in the company. Petition is DENIED

d. Constructive Dismissal Uniwide Sales v. NLRC supra 23

127

NLRC reversed LA saying that petitioner was neither demoted nor dismissed and her salary remained he same. Apduhan issued a Memorandum stating that since private respondent was unable to attend the scheduled hearing. Private respondent sought medical help due to complaints of dizziness. private respondent claims that she had been subjected to constant harassment. The petitioner filed a case with the BCF Grievance Committee but the case was transferred to the Administrative Investigating Committee who found the Department Order appropriate since it was intended to prevent to prevent the controversy from affecting the harmonious relationship within the College of Law. Hence. Uniwide. issued a Memorandum summarizing the various reported incidents signifying unsatisfactory performance (commingling of good and damaged items. Constancia Duldulao was hired by Baguio Colleges Foundation as a secretary or clerk typist in their College of Law. through Store Manager Apduhan. Petitioners gave private respondent successive memoranda so as to give the latter an opportunity to explain herself. CA affirmed in toto the NLRC Decision. Unsatisfied. CA supra 21 128 . or disdain by an employer becomes unbearable to the employee. Private respondent appealed the LA’s decision to NLRC the NLRC ruled in favor of private respondent. sale of a voluminous quantity of damaged stocks) Private respondent answered all the allegations. the present petition. when uncorroborated by the evidence on record. ridicule and inhumane treatment by Apduhan. Zambrano mistakenly wrote the wrong surname in the med cert which led to a shouting match between Apduhan and Kawada which allegedly caused her to collapse. when there is a demotion in rank or diminution in pay or both. as it even appears the “constructive dismissal” allegedly committed on complainant looks simply an excuse to avoid and/or evade the investigation and consequences of the violations imputed against her while employed and/or acting as respondent’s assistant store manager. Zambrano advised her to take five days sick leave. The memoranda are not forms of harassment. The court adopts the findings of the LA: In fact. LA dismissed the complaint for lack of merit. Finding private respondent to be suffering from hypertension. As to the September 1. It is an act amounting to dismissal but made to appear as if it were not. cannot be given credence in court. The court found the petition to be meritorious. but petitioners’ compliance with the requirements of due process. A law student filed a case against her for irregularities in the performance of her work as well as fraternizing with students of the College. The petitioner did not report for work and instead took a vacation leave and several other leave of absences. the case was evaluated on the basis of the evidence on record. Private respondent reported the confrontation between her and Apduhan to the Central Police District. She claimed that she was arbitrarily asked to transfer from her place of work which is far from her original place of assignment. Apduhan sent 2 other Memorandums where Apduhan claimed that the answers given by the private respondent were all hypothetical. Petitioner then finally filed a complaint for constructive dismissal. 1998 Memorandum where the private complainant was dismissed for loss of trust and confidence. Case law defines constructive dismissal as a cessation of work because continued employment is rendered impossible. unreasonable or unlikely. She filed a motion to extend her answer with the dean which was not allowed as the matter was already elevated to the Executive Board. The Dean recommended her assignment outside the College of Law because of this. (dismissal in disguise. However. Dr. Thus this petition saying that the Duldulao v. The Court finds that private respondent’s allegation of harassment is a specious statement which contains nothing but empty imputation.) The law recognizes and resolves this situation in favor of employees in order to protect their rights and interests from the coercive acts of the employer.Amalia P. private respondent chose not to attend the scheduled hearing because of her mistaken belief that she had already been constructively dismissed. In 1998. Court finds the records bereft of evidence to substantiate the conclusions of the NLRC and the CA that private respondent was constructively dismissed from employment. Private respondent filed a case for illegal dismissal before the LA. Petitioners appealed the NLRC Decision to the CA. The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. The respondednt constituted a Fact Finding Committee to investigate the allegations concerning the administrative matters and found the petitioner guilty of the charges against her. the Vice President of Administration issued a Department Order asking her to move to the highschool. Petition is GRANTED. The petitioner was asked to submit her answer to the complaint but she failed to do so. Apduhan issued a Memorandum advising Kawada of a hearing and warning her that failure to appear shall constitute as waiver and the case shall be submitted for decision based on available papers and evidence. In the present case. Bare allegations of constructive dismissal. or when a clear discrimination. Kawada was employed by Uniwide and was promoted to Full Assistant Store Manager in 1995. LA ruled in Duldulao’s favor. Dr. Respondent was given an opportunity to be heard. and seeking from the private respondent an explanation regarding the incidents. CA upheld the NLRC. Uniwide received reports from the other employees regarding some problems in Kawada’s departments. the Court finds the notice of the scheduled August 12. insensibility. 1998 hearing sufficient compliance with the due process requirement.

Petitioner cannot claim constructive dismissal simply becaue her transfer to another department was against her wishes. CA affirmed the NLRC. Petitioners submit that the positions of Credit and Collection Manager and Marketing Assistant does not constitute demotion. Transfer Norkis Trading Co v. The work of a Marketing Assistant. and usually accompanied by an increase in salary. The NLRC ruled that respondent was constructively dismissed and therefore he was entitled to reinstatement.” Promotion.” A demotion involves a situation in which an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank. He filed a complaint for illegal dismissal with the LA who dismissed the case for lack of merit. NLRC reversed the LA. he was appointed as Marketing Assistant. there was a reduction in his duties and responsibilities which amounted to a demotion tantamount to a constructive dismissal since the position of Credit and Collection Manager entails great duties and responsibilities and involves discretionary powers. Petition denied. It exists when there is cessation of work because “continued employment is rendered impossible. making deposits in banks. the petitioner has no vested tight to the position of secretary/clerk typist to the college of law because petitioner was employed not by the college but the BCF system itself and thus. she merely had to change the route she took for her new assignment. the employer bears the burden of showing that the transfer is not unreasonable. Later. He was transferred to Metro Manila pending investigation of his involvement in a sales discount and Rx trade-off controversy. without break in service. when there is a demotion in rank or a diminution of pay. on the other hand. The court held that there is “constructive dismissal if an act of clear discrimination. Unilab promoted him as Senior Business Development Associate and assigned him in Isabela as Acting District Manager of Westmont. Melvin Gnilo Westmont Pharmaceuticals v.constructive dismissal was tainted in bad faith and that it was intended as a punishment. unreasonable or unlikely as an offer involving a demotion in rank and a dimunition in pay. and does not involve a demotion in rank or a diminution of his salaries. In this case. He was then placed under "floating status" and assigned to perform duties not connected with his position. Another memorandum was issued to him to report to the head office for a re-training or a possible new assignment. transfer her to any of the departments as long as the transfer does not result in a demotion in rank or diminution in benefits or salary of the employee. Westmont. since respondent's position is more encompassing and vital to the company and he is receiving the same salary. is clerical in nature. While petitioners have the prerogative to transfer respondent to another position. inconvenient or prejudicial to the employee. such transfer should be done without diminution of rank and benefits which has been shown to be present in respondent's case. fetching field men and doing messengerial works. and usually accompanied by a decrease in salary. level or salary. constructive dismissal exists when an act of clear discrimination. Ricardo 129 . Norkis placed him in a 15 day suspension. insensibility or disdain by an employer becomes so unbearable on the part of the employee that it would foreclose any choice by him except to forego his continued employment”. is the “advancement from one position to another with an increase in duties and responsibilities as authorized by law. Petitioner requsted that he be assigned as Sales Engineer or to any position commensurate with his qualifications. BCF can exercise its management prerogative. like fetching at the airport physicians coming from the provinces. Melvin Gnilo held various positions in the company until he was appointed as Credit and Collection Manager. Constructive dismissal is defined as a quitting because continued employment is rendered impossible. on the other hand. leaving him with no option but to forego his continued employment. Thus this petition. with a corresponding decrease in duties and responsibilities. A special audit team was conducted and Gnilo admitted his negligence for the monthly collection reports of his subordinates which were all overstated. Well-settled is the rule that it is the prerogative of the employer to transfer and reassign employees for valid reasons and according to the requirement of its business however. insensibility or disdain by an employer becomes unbearable to the employee.” The court held that at the onset. while the transfer of respondent from Credit and Collection Manager to Marketing Assistant did not result in the reduction of his salary. A transfer is defined as a “movement from one position to another which is of equivalent rank. In this case. unreasonable or unlikely. However. Ricardo Samaniego Unilab hired Samaniego as Professional Service Representative of its marketing arm. Petition is DENIED e. Likewise. almost the same distance from her house as that of her job in the college of law. The court ruled that the transfer is not as a penalty but a preventive measure to avoid further damage to the college. His transfer to Metro Manila resulted in the diminution of his salary.

the employer has the burden of proving that the transfer of an employee is for just and valid grounds. provided the transfer does not result in demotion in rank or diminution of the employee’s salary. CA affirmed NLRC. The private respondents explained that their new assignment involve distant places which would require their separation from their respective families. This was what happened to Samaniego. a management prerogative. CA Petitioner came up with a Relocation and Restructuring Program designed to (a) sustain its (PT&T’s) retail operations. Angel C. CA reinstated LA. He was eventually terminated for violating company rules and regulations. or prejudicial to the employee. The records show that respondent was not singled out for the transfer and that it was the effect of the integration of the functions of the company’s 2 operations. SMC v. he was placed on "floating status" and directed to perform functions not related to his position. immediately after his transfer to Metro Manila. the petitioner considered the private respondents’ refusal as insubordination and willful disobedience to a lawful order. Dissatisfied with this explanation. Avelino Acha. The employer must be able to show that the transfer is not unreasonable. NLRC ruled that respondent was not informed of his transfer and that her was a victim of discrimination. San Miguel Corporation employed Angel Pontillas as a daily wage company guard. It must not involve a demotion in rank or a diminution of salary and other benefits. that is. Respondent also alleged that he was wary of the transfer because of his pending case against petitioner. and must pertain to the duties which he had been engaged to discharge. NLRC declared the LA’s Decision null and void. We hold that such transfer is economically and emotionally burdensome on his part. SMC’s Vice President issued a Memorandum ordering the transfer of responsibility of the Oro Verde Warehouse to the newly-organized VisMin Logistics Operations. benefits. Jesus Paracale. Hence. In constructive dismissal. Thus this petition. Willful disobedience requires the concurrence of two elements: (1) the employee’s assailed conduct must have been willful. such as genuine business necessity. He alleged that he was not properly notified of the transfer and that he did not receive any written order from Capt. NLRC ruled that the employees have been illegally dismissed thus said transfers of the respondents as a 130 . and (2) the order violated must have been reasonable. we found that the order of transfer was reasonable and lawful considering the integration of Oro Verde Warehouse with VisMin Logistics. CA AFFIRMED. LA dismissed the complaint. inconvenient. Samaniego was unceremoniously transferred from Isabela to Metro Manila. Respondent continued to report at Oro Verde Warehouse. and other privileges. The court held that an employer may terminate an employment for serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. Benjamin Lakandula. Petitioner informed of an administrative investigation relative to his alleged offenses of Insubordination or Willful Disobedience in Carrying Out Reasonable Instructions of his superior. Ricardo Elizagaque. If the employer cannot overcome this burden of proof. The petitioner sent letters to the private respondents requiring them to explain in writing why no disciplinary action should be taken against them for their refusal to be transferred/relocated. hence. made known to the employee. filed a complaint against the petitioner for illegal dismissal. Angel filed an amended complaint against petitioner for illegal dismissal. the employee’s transfer shall be tantamount to unlawful constructive dismissal. Romeo Tee. Pontillas f. characterized by a wrongful and perverse attitude. Worse. The employer exercises the prerogative to transfer an employee for valid reasons and according to the requirements of its business. (b) decongest surplus (c) lower expenses and (d) avoid retrenchment Respondents Cristina Rodiel. his immediate superior. Samaniego claims that upon his reassignment and/or transfer to Metro Manila. Westmont and Unilab explain that his transfer is based on a sound business judgment. Promotion Phil Telegraph Telephone Company (PT&T) v. Fortich. performing functions no longer supervisory in on the part of the employee that it could foreclose any choice by him except to forego his continued employment. Ignacio Dela Cerna and Guillermo Demigillo rejected the petitioner’s offer of giving them the option of the branch of transfer.Samaniego then filed a complaint for illegal dismissal with the LA who ordered his reinstatement and payment of his full backwages. During the investigation. He was constrained to maintain two residences. PT&T Workers Union-NAFLU-KMU. LA dismissed the case for lack of merit. respondent was given an opportunity to present his evidence and be assisted by counsel. these consolidated petitions. the private respondents were dismissed from work. Westmont and Unilab failed to discharge this burden. he was placed "on floating status" and was demoted in rank. For their part. Petiion Granted. lawful. In this case.

No. Promotion. or R. the Mapua Rules were not Renato Gabonton v. Faculty of Civil Engineering. Rule II Section 1 of the MIT Rules and Regulations provides: Section 1. In fact. With or without a corresponding increase in salary. the Mapua Rules itself explicitly required publication of the rules for its effectivity thus. Preventive suspension. 7877. with petitioner questioning the dismissal of his claim for damages. that the movement was not merely lateral but of scalar ascent. — The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. the respondents had the right to accept or refuse the said promotions. Subido. Hence. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension. he pays the wages and other benefits due to the worker. An employee cannot be promoted. The court ruled for their reinstatement.A. As such. The court held that the transfer of the complainants is not unreasonable nor does it involve demotion in rank. and the corresponding increase in salaries. Period of suspension. NLRC + Mapua Institute of Technology 131 . No. Pending investigation Gatbonton was placed under a 30-day preventive suspension. sexual harassment and conduct unbecoming of an academician. without his consent. damages and attorney’s fees. Renato Gatbonton is an associate professor of respondent Mapua Institute of Technology (MIT). even if merely as a result of a transfer. when it is determined that there is no sufficient basis to justify an employee’s preventive suspension. In such case. As such. He filed a complaint for illegal suspension. there was no valid cause for the private respondents’ dismissal. and usually accompanied by an increase in salary. the latter is entitled to the payment of salaries during the time of preventive suspension. CA affirmed. Hence. Preventive Suspension Book V. SECTION 4. R. Preventive Suspension of Accused in Sexual Harassment Cases. — No preventive suspension shall last longer than 30 days. 7877 imposed the duty on educational or training institutions to “promulgate rules and regulations in consultation with and jointly approved by the employees or students or trainees and Gatbonton’s preventive suspension was based on respondent MIT’s Rules and Regulations for the Implemention of the Anti-Sexual Harassment Act of 1995. considering the movement of the job grades. Any member of the educational community may be placed immediately under preventive suspension during the pendency of the hearing of the charges of grave sexual harassment against him if the evidence of his guilt is strong and the school head is morally convinced that the continued stay of the accused during the period of investigation constitutes a distraction to the normal operations of the institution or poses a risk or danger to the life or property of the other members of the educational community.promotion. g. to dismiss the worker. CA affirmed the NLRC. since its purpose is to enforce and implement R. is “the advancement from one position to another with an increase in duties and responsibilities as authorized by law. after completion of the hearing.. NLRC granted respondents’ appeal and set aside the Labor Arbiter’s decision. Thus this petition. They are being moved to branches where the complainants will function with maximum benefit to the company and they were in fact promoted not demoted from a lower job-grade to a higher job-grade and receive even higher salaries than before and considering the fact that they were being moved to provinces provides them with greater spending power. the present petition. advancement or reduction or a transfer that aims to ‘lure the employee away from his permanent position cannot be done without the employees’ consent. No. at the time of his suspension. LA ruled that his suspension is illegal. The admissions of the petitioner are conclusive on it. 7877. A transfer that results in promotion or demotion. However. A civil engineering student of respondent MIT filed a complaint against petitioner for unfair/unjust grading system.A. as defined in Millares v. Both respondents and petitioner filed their appeal from the Labor Arbiter’s Decision. The Mapua Rules is one of those issuances that should be published for its effectivity. RULE XIV: Termination of Employment (OLD RULES) SECTION 3. The court held that: Preventive suspension is a disciplinary measure for the protection of the company’s property pending investigation of any alleged malfeasance or misfeasance committed by the employee. the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides. the respective transfer of the private respondents were in fact promotions. the exercise by the private respondents of their right cannot be considered in law as insubordination. CA affirmed the NLRC. or willful disobedience of a lawful order of the employer. The increase in the respondents’ responsibility can be ascertained from the scalar ascent of their job grades. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers.A.

The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his coworkers. In the event the employer chooses to extend the period of suspension. The bona fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months or the fulfillment of the employee of a military or civic duty shall not terminate employment. In such case. it set aside the award of separation pay. Due to the grim economic consequences to the employee. Federito Pido v. CA upheld the NLRC decision and accordingly dismissed petitioner’ s appeal. Respondent thus conducted an investigation. As provided in Section 8. Court of Appeals are AFFIRMED Art. Period of suspension. 9. After more than nine months had elapsed since the investigation was conducted by respondent with no categorical findingsmade. albeit the displacement should not exceed six (6) months. Pido filed a complaint for illegal constructive dismissal. there is no termination of employment but only a temporary displacement of employees. SEC. Book V of the Omnibus Rules Implementing the Labor Code SEC. In Philippine Industrial Security Agency Corporation v. When a security guard is placed on a "floating status. Closure of establishment and reduction of personnel. NLRC + Cherubim Security Services (2007) ii. In all such cases the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. nor did it pay him his wages and other benefits after the lapse of the 30day period of suspension. petitioner’s preventive suspension finds no valid justification. Rule XXIII. When employment not deemed terminated. Even under the Labor Code. 286." he does not receive any salary or financial benefit provided by law. or that petitioner poses a risk or danger to the life or property of the other members of the educational community. He had an altercation with Richard Alcantara of the ASF because Alcantara allegedly questiones the expiration of the gun of Pido and tried to grab the gun from his holster.” La found him to be constructiveley dismissed. said “pahinga muna ako. responsible for observing occurrences. 8. the Court finds that there is no sufficient basis to justify his preventive suspension since it is not shown that evidence of petitioner’s guilt is strong and that the school head is morally convinced that petitioner’s continued stay during the period of investigation constitutes a distraction to the normal operations of the institution. Preventive suspension. even assuming that the Mapua Rules are applicable. after a new assignment was offered to him. The employer may also terminate the employment of any employee due to the installation of labor-saving devices. In such a case. In this case. Thus this petition.) Substantive Requirements – Business Related Causes 132 . and therefore the suspension had no legal basis. after completion of the hearing. NLRC found that petitioner was indeed constructively dismissed. ART. The employer may place the worker concerned under preventive suspension if his continued employment poses a serious threat to the life or property of the employer or of his coworkers. Inc. the court held that Article 286 applies only when there is a bona fide suspension of the employer's operation of a business or undertaking for a period not exceeding six (6) months. he is required to pay the wages and other benefits due the worker and the worker is not bound to reimburse the amount paid to him during the extended period of suspension even if. No preventive suspension shall last longer than thirty (30) days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension. to dismiss the worker.yet legally effective. after the completion of the hearing or investigation. (damages denied because no showing of Badfaith by MIT) Federito Pido was hired on October 1. the employer decides to dismiss him. the employer should bear the burden of proving that there are no posts available to which the employee temporarily out of work can be assigned. (respondent) as a security guard at the tower and Exchange Plaza of Ayala Center where he worked as a computer operator at the Console Room. Dapiton. 283. Book V of the Omnibus Rules Implementing the Labor Code: Sec. the respondent did not inform petitioner that it was extending its investigation. 1995 by Cherubim Security and General Services. Cherubim failed to discharge this burden. Moreover. the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides. Petition is PARTIALLY GRANTED. Sections 8 and 9 of Rule XXIII. Preventive Suspension. The company denied this saying that Pido. 8. he pays the wages and other benefits due to the worker.

retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. Complex Electronics Corporation received a message from their client Lite-On Philippines requiring it to lower its price by 10%. dismissed private respondents due to retrenchment and thus Antipuesto. Complex informed its Lite-On personnel that such request of lowering their selling price by 10% was not feasible as they were already incurring losses at the present prices of their products and thus the employees were informed Complex was closing down the operations of the Lite-On Line. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. The Court sustains the position of the LA. and labor unrest. machinery. Additional award of separation pay deleted. whichever is higher. In order to be justified. NLRC - b.. The payment of separation pay would be due when a dismissal is on account of an authorized cause. The union filed a complaint for illegal closure and filed a notice of strike. actual and real. in contrast to redundancy. In case of termination due to the installation of laborsaving devices or redundancy. NLRC reversed the LA and ordered the company to pay the employees in lieu of notice and separation pay. A fraction of at least six (6) months shall be considered one (1) whole year. 1984 or eight (8) years before the labor dispute arose at Complex. v. against Edge Apparel. the termination of employment by reason of retrenchment must be due to business losses or reverses which are serious.. retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. Eventually. stiff competition. is an economic ground to reduce the number of employees. A fraction of at least six (6) months shall be considered one (1) whole year. Edge Apparel filed a motion for a partial reconsideration due to the award of separation pay. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. redundancy. Retrenchment. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. et al. Thus. Business Related or Authorized Causes Installation of Labor Devices Art. NLRC held that "There is therefore basis in the retrenchment of these 27 workers. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. whichever is higher. NLRC 133 . Ionics contended that it was an entity separate and distinct from Complex and had been in existence since July 5. thus this petition. Basis – Employer’s Right  Edge Apparel Inc. Closure of establishment and reduction of personnel. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. LA ruled for the Union asking Complex to reinstate them. on the other hand. Hence these petitions. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. 283. whichever is higher. In case of termination due to the installation of laborsaving devices or redundancy. a. pushed for a retrenchment pay. businessmen are always pressured to adopt certain changes and programs in order to enhance their profits . The Union claimed that the said clipping showed that both  Complex Electronics Employees Association v. Due to this demand. whichever is higher. The Union of Complex. equipment and materials being used for production at Complex were pulled-out from the company premises and transferred to the premises of Ionics Circuit.redundancy. NLRC denied the motion. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. But business enterprises today are faced with the pressures of economic recession. Inc. averred that the retrenchment program was a mere subterfuge used by Edge Apparel to give a semblance of regularity and validity to the dismissal of the complainants. Inc. Edge Apparel. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. The employer may also terminate the employment of any employee due to the installation of labor-saving devices.. LA dismissed the complaint of Antipuesto. the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. The amount of separation pay depends on the ground for the termination of employment. The court held that: the employer has a right to dismiss employees for valid causes after proper observance of due process. et al.

National Labor Relations Commission where the Court stated that substantial identity of the incorporators of two corporations does not necessarily imply that there was fraud committed to justify piercing the veil of corporate fiction. The closure. The case of Magnolia Dairy Products v. allow the business establishment to disregard the requirements of the law. whichever is higher. - Art. The court cited Del Rosario vs. The court held that in Trendline Employees Association-Southern Philippines Federation of Labor v. 1998. it does not. this did not excuse petitioner from complying with the required written notice to the employee and to the Department of Labor and Employment (DOLE) at least one month before the intended date of termination. Cajucom filed a complaint for illegal dismissal. whichever is higher. an authorized cause. redundancy. But due process was not observed as the required notices were not sent to respondent and the DOLE one month prior to the effectivity of his termination. (4) expansion in 1998 of their operations by including sales and marketing of oil products. 1998. He contested TPI’s action. As a result of the economic slowdown of the Philippines. 1998. as in this case. The purpose of the notice requirement is to enable the proper authorities to determine after hearing whether such closure is being done in good faith. NLRC reversed the LA. Cajucom TPI Philippines Cement Corporation employed Atty. or maliciousness on the part of management. We reiterate that the dismissal of respondent from the service is by reason of retrenchment. as VicePresident for Legal Affairs. NLRC is AFFIRMED. (3) Payment of separation pay equivalent to one month pay or at least ½ month pay for every year of service. 283. Cajucom VII. respondent. Benedicto A. Clearly. – The employer may also terminate the employment of any employee due to the installation of labor-saving devices. A fraction of at least six (6) months shall be considered as one (1) whole year. While the law acknowledges the management prerogative of closing the business. Retrenchment to Prevent Losses -283  TPI Philippines Cement Corp v. petitioners sent respondent and the DOLE separate notices of retrenchment effective December 30. CA affirmed the NLRC. or on November 30. Ionics may be engaged in the same business as that of Complex. Closure of Establishment and Reduction of Personnel . petitioners failed to comply with the one-month notice requirement. x x x. at least one (1) month before the intended date thereof. Ionics and Complex are one and the same. Following the provision of Article 283. these notices should have been served one month before. Thus. however.corporations. was not motivated by the union activities of the employees. claiming that the termination of his services was based erroneously on petitioners’ probable losses. The court held that the mere fact that one or more corporations are owned or controlled by the same or single stockholder is not a sufficient ground for disregarding separate corporate personalities. Nonetheless. LA held that TPI failed to adduce sufficient evidence to show thattheir alleged losses are substantial and imminent. petitioners should be liable for violation of his right to due process and 134 . arbitrariness. and the courts will not interfere with its exercise in the absence of abuse of discretion. the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. by serving a written notice on the worker and the Department of Labor and Employment. Petitioners sent Cajucom a notice terminating his services. substantial and imminent losses. NLRC as cited by the court says that: The installation of these devices is a management prerogative. The court held that: Retrenchment is an authorized cause for the dismissal of an employee from the service. NLRC. (2) Written notice to the employees and to the DOLE at least one month prior to the intended date thereof. but rather by necessity since it can no longer engage in production without the much needed materials. TPI had cut on its expenses. the requisites of retrenchment are: (1) The retrenchment is necessary to prevent losses and the same is proven. therefore. but this fact alone is not enough reason to pierce the veil of corporate fiction of the corporation. retrenchment to prevent losses or the closing or cessation of operations of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. In case of retrenchment to prevent losses and in cases of closure or cessation of operations of the establishment or undertaking not due to serious business losses or financial reverses. instead of their actual. as shown by the following: (1) an increase or raise in his monthly salary from (2) hiring by petitioners of more marketing and accounting (3) acquisition by petitioners in 1998 of a warehouse. Records show that on December 3. Hence this petition. equipment and machinery.

seasonal fluctuations. ACC informed Garcia and Balla and 52 other employees of the termination of their employment. (b) efficiency. dropping of a particular product line) Requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position. (3) the retrenchment is reasonably necessary and is likely to be effective in preventing the expected losses. and not because the employee unsatisfactorily performed the duties and responsibilities required by his position. In the case at bar. At the outset that ACC raised different grounds to justify its dismissal of Garcia and Balla: LA. e. which we fix at P20. (2) the losses are actual or reasonably imminent. Redundancy exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the business enterprise. and (4) the alleged losses or the expected imminent losses are proven by sufficient and convincing evidence. Balla and Garcia filed a complaint for illegal dismissal LA affirmed by NLRC and CA. lack of work or considerable reduction in the volume of the employer's business. industrial depression. CA. whichever is higher. There is no showing that ACC applied any of these criteria in determining that. retrenchment. thus. There are three basic requisites for a valid retrenchment to exist: (a) the retrenchment is necessary to prevent losses and such losses are proven. the Court has identified the necessary conditions for the company losses to justify retrenchment: (1) the losses incurred are substantial and not de minimis. making their dismissal arbitrary and illegal. said memoranda are irrelevant to prove redundancy of the positions held by Garcia and Balla. ruled for the employees. and (c) seniority. Not only was ACC unable to prove its losses. this Petition. In a number of cases. LA ruled that the retrenchment program is invalid. as well as perennially tardy and absent. and (c) payment of separation pay equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service. it also failed to present proof that it served the necessary notice to the DOLE one month before the purported retrenchment of Garcia and Balla. Phil Telegraph and Tel. redundancy.000. Hence. Garcia and Balla should be dismissed. She was separated from employment due to the Temporary Staff Reduction Program adopted by respondent due to serious business reverses which gave her the option to avail of the Staff Reduction Program Package. ACC itself is confused as to the real reason why it terminated Garcia and Balla's employment. She did not avail of the package and was subsequently retrenched from employment. Petition is partly GRANTED Ely Garcia was hired as a janitress by ACC and Balla was hired as a Social Worker. temporary employee. 135 . Redundancy arises because there is no more need for the employee's position in relation to the whole business organization. they are in no way interchangeable. and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished ACC presented several memoranda to prove that Garcia and Balla had been remiss in the performance of their duties. Both retrenchment and redundancy are authorized causes for the termination of employment as enumerated in Article 283 of the Labor Code but retrenchment and redundancy are two distinct grounds for termination arising from different circumstances.. CA reversed the NLRC. thus. both retrenchment and redundancy. decreased volume of business.should pay him indemnity in the form of nominal damages. Thus this petition. among its employees. (overhiring of workers.  AMA Computer College v. She filed a complaint for illegal dismissal saying that respondent was obtaining profits and was that it was economically viable for respondent to continue its business operations without downsizing its workforce. pursuant to our ruling in Agabon.00.  Juvy Manatad v. the burden of proving just and valid cause for dismissing an employee from his employment rests upon the employer. (b) written notice to the employees and to the DOLE at least one (1) month prior to the intended date of retrenchment. Among the accepted criteria in implementing a redundancy are: (a) less preferred status. Petition DENIED. The court held that in termination cases. NLRC affirmed the LA. and the latter's failure to discharge that burden would result in a finding that the dismissal is unjustified. Other than being self-serving. NLRC. ACC miserably failed to prove any of the foregoing. Ely Garcia and Teresa Balla Retrenchment is the termination of employment effected by management during periods of business recession. ACC claimed that the retrenchment of Garcia and Balla was justified due to the financial difficulties experienced by the college.g. Co Manatad was employed by respondent Philippine Telegraph and Telephone Corporation (PT&T) as junior clerk.

LA dismissed the complaint for illegal dismissal on the ground that a business entity has the right to reduce its work force if necessitated by compelling economic factors which endanger its existence or stability. supervised the negotiation for separation package. The financial statements prepared by SGV & Co. One of the prerogatives of management is the decision to close the entire establishment or to close or abolish a department or section thereof for economic reasons. it still substantially complied with the requirement. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business. (c) payment of separation pay equivalent to one-month pay or at least one-half month pay for every year of service. NLRC acknowledged the right of ACCI to regulate. In this case. this Court finds that individual respondents were dismissed on the ground of closure or cessation of an undertaking not due to serious business losses or financial reverses. no law can compel anybody to continue the same. v. Although respondent failed to furnish DOLE with a formal letter notifying it of the retrenchment. it did not reduce the number of personnel assigned thereat. but for several years prior to and even after the program. 1994 into an agreement with La Tasca Restaurant Inc. we agree with the petitioner is not entitled to backwages. CA reversed those of the NLRC. For any bona fide reason. branch. In the present case. all aspects of employment including the lay-off of workers and dismissed the appeal. plant or shop will be upheld as long as it is done in good faith to advance the employer’s interest and 136 . respondent instituted a retrenchment program to arrest its alleged escalating financial losses by downsizing its workforce. Just as no law forces anyone to go into business. ACCI sent its F & B employees letters of termintation. reflect that respondent suffered substantial loss in the amount of P558 Million. such as to minimize expenses and reduce capitalization. Retrenchment and closure of a business establishment or undertaking are are independent authorized causes for termination of employment. or seasonal fluctuations. not only for a single fiscal year. such as a concessionaire. It terminated the employment of all personnel assigned at the department. whichever is higher. department. according to its own discretion and judgment. when petitioner decided to cease operating its F & B Department and open the same to a concessionaire. Management’s exercise of its prerogative to close a section. (b) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment. Petition is DENIED. - Retrenchment vis-à-vis closure  Alabang Country Club Inc. Juvy failed to refute that she received the written notice of retrenchment from respondent. which would be willing to operate its own food and beverage business within the club. The fact that the financial statements were audited by independent auditors settles any doubt on the authenticity of these documents for lack of signature of the person who prepared it. NLRC + Union Francisco Ferrer. The court held that the case is not retrenchment but of the closure of a business undertaking. It held that due to ACCI’s failure to prove by sufficient and competent evidence that its alleged losses were substantial. For a valid retrenchment. continuing. the company is still authorized by Article 283 of the Labor Code to cease its business operations .Petitioner’s failure to prove that the closure of its F & B Department was due to substantial losses notwithstanding. The law recognizes the right of every business entity to reduce its work force if the same is made necessary by compelling economic factors which would endanger its existence or stability.The court defines retrenchment as the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter. A complaint for illegal dismissal was filed against ACCI. In the case at bar. Retrenchment is a valid management prerogative but subject to faithful compliance with the substantive and procedural requirements. then President of ACCI found that the profitability of ACCI’s Food and Beverage Department was not profitable and thus management decided to cease from operating the department and to open the same to a contractor. industrial depression. The company was fully justified in implementing a retrenchment program since it was undergoing business reverses. Even if there were no losses. the following requisites must be complied with: (a) the retrenchment is necessary to prevent losses and such losses are proven. resorted to by management during periods of business recession. the reconciliatory arm of DOLE. Since the National Conciliation and Mediation Board. Closure of a business or undertaking due to business losses is the reversal of fortune of the employer whereby there is a complete cessation of business operations to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped. Thus this petition. ACCI subsequently entered on December 1. an employer can lawfully close shop anytime.

LA dismissed the complaint. including Agoncillo. Retrenchment and redundancy are two different concepts. she suggested the position of reservation clerk but the Hotel only allowed her the option of Linen Dispatcher of Head of Houekeeping “para nakatago” because the Hotel wanted fresh graduates and new faces since “nagpabaya na daw si Agoncillo sa katawan niya” Agoncillo filed a complaint for illegal dismissal. On March 10. on the other hand. the Union and the Hotel executed a MOA however. they are not synonymous and therefore should not be used interchangeably. which are lower positions than what she held before. NUWHRAIN Rowena Agoncillo was employed by the Hotel and after some time. It is however not enough for a company to merely declare that positions have become redundant. Legend gave said employees a period of one week or until January 14. NLRC 137 . 161 of whom were Union officers and members. The court held that the requisites of a valid redundancy program are: (1) the good faith of the employer in abolishing the redundant position. It is the prerogative of management to transfer an employee from one office to another within the business establishment based on its assessment and perception of the employee’s qualification. Thus this petition. Legend sent the 34 employees their respective notices of retrenchment. A total of 243 employees. instead of reinstating her to her former position. with option number 2 (permanent retrenchment) as the default choice in case they failed to express their preferences. Petitioners Ruben Andrada et al. were separated from the Hotel’s employment. Legend also failed to establish redundancy.” It is an act of the employer of dismissing employees because of losses in the operation of a business. Petition GRANTED. Agoncillo wanted to a complaint for illegal dismissal against the Hotel but before she could do so. In the present case. Inc.283  Dusit School Nikko v. Thus this petition. to either minimize or prevent losses. NLRC reversed the LA relying on the evidence of the complainant and the Order of the SOLE. and surveyors in the Subic Legend Resorts and Casino. the MOA was not submitted to the NLRC for its approval. she was offered the position of Linen Dispatcher in the hotel basement or Secretary of the Roomskeeping Section. is used interchangeably with the term “layoff. Her supervisor advised Agoncillo to just avail of the Hotel's SERP. - Redundancy . draftsmen. respondent Agoncillo had not been transferred to another position at all. It failed to submit audited financial statements regarding its alleged financial losses. 1998 to choose their option. Petition Denied.not for the purpose of defeating or circumventing the rights of employees under the law or a valid agreement. were hired on various dates from 1995 up to 1997 and worked as architects. the petitioners recalled the termination of respondent Agoncillo when they learned that she was going to file a complaint against them with the NLRC for illegal dismissal. Legend glaringly failed to show its financial condition prior to and at the time it enforced its retrenchment program. and (2) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. CA dismissed the petition. Neither did Agoncillo receive any monetary benefits based on the MOA. aptitude and competence but the managerial prerogative to transfer personnel must be exercised without grave abuse of discretion. NLRC reversed the LA. and considerable reduction on the volume of his business. Retrenchment is an exercise of management’s prerogative to terminate the employment of its employees en masse. The CA held that the retrenched employees were validly dismissed from employment due to redundancy and not retrenchment. The pieces of evidence submitted by Legend (such as a status review of its project division where it reported that the 78-man personnel exceeded the needs of the company ) are mere allegations and conclusions not  Andrada v. 2000. LA ruled for petitioners. she was offered to be reinstated but not to her former position. Redundancy exists when the number of employees are in excess of what is reasonably necessary to operate the business. in fact. Offers by the petitioners to transfer respondent Agoncillo to other positions were made in bad faith. The CA ratiocinated that Legend had validly terminated the employment of its employees since it had proven that complainants’ positions were superfluous. operators. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. Legend sent notice to the DOLE of its intention to retrench and terminate the employment of thirty-four (34) of its employees due to its last-in-first-out basis on the strength of the status report of its Project Development Division. she was promoted as Supervisor of Outlet Cashiers and later promoted as Senior Front Office Cashier. Retrenchment. The petitioners filed a complaint for illegal dismissal when they found out that Legend was hiring (on the same day) new employees for the positions they vacated. lack of work. engineers. However. The Hotel though an Inter-Office Memorandum offered a Special Early Retirement Program (SERP) to all its employees. In the present case. SOLE issued an Order in NCMB-NCR-NS-11-425-96 in favor of the Union.

Allado personally gave notices of termination effective immediately to the spouses due to negative cashflow. Thus this petition. He filed a complaint for retirement benefits. Regina Astorga - Mailboxes. Inc. provided the former acted in good faith and paid adequate consideration for such 138 . The sps filed a complaint for illegal dismissal.supported by other evidence.. rejecting offers of other motary awards by the company. SMART failed to comply with the mandated one (1) month notice prior to termination. Inc. NLRC reversed the LA ordering Peggy Mills alone to pay the money claims. (UTEX) and was eventually promoted to Senior Manager. LA ruled that the dismissal was illegal. As a rule. (3) the spouses were not entitled to backwages. a corporation that purchases the assets of another will not be liable for the debts of the selling corporation. vacation and sick leave benefits. The court cited Agabon v. Astorga landed last in the performance evaluation so she was not recommended but she was offered a supervisory position in the Customer Care Department. or ineffectual. Veruasa  John Mcleod v.’’s sstockholders are petitioner Ramon Allado et al. Since the NLRC and the CA found bonafide reason for closing shop ang that the records before us revealed that there were losses from 1996 to 1998. Petition is PARTIALLY GRANTED. SMART launched an organizational realignment to achieve more efficient operations and entered into a joint venture agreement with NTT forming SNMI. Rosa Textiles. or render it illegal. NLRC dismissed the case saying that (1) Gilbert was both a BSFTI employee and stockholder (2) BSFTI was not obliged to pay separation benefits to the spouses since there was a valid closure of business due to serious financial losses. CA affirmed with modification of 50K to be paid as damages for not issuing the proper notices. the lack of statutory due process should not nullify the dismissal. it would not have offered her a position in any department in the enterprise. National Labor Relations Commission. Astorga filed a complaint for illegal dismissal. They hired spouses Gilbert and Ma. SMART issued a memorandum advising Astorga of the termination of her employment on ground of redundancy. Astorga claims that the termination of her employment was illegal and tainted with bad faith and that the reorganization was done in order to get rid of her but she did not substantiate these claims. CA reversed the NLRC and the LA saying that using the 4fold test.000 as nominal damages are awarded. He retired and demanded the full benefits of his retirement plan. moral and exemplary damages. Regina M. Thus this petition. PMI hired McLeod as its acting Vice President and General Manager and PMI confirmed McLeod’s appointment as Vice President/Plant Manager in the Special Meeting of its Board of Directors. NLRC ruled for Smart. Patricio Lim and Eric Hu. The nature of redundancy in Wiltshire File Co. Moreover. Inc. as manager and assistant manager. hence. National Labor Relations Commission. Sta. Astorga was terminated due to redundancy. The court found that records disclose that McLeod was a managerial employee only of PMI. No written notice of closure of business was given to DOLE. Legend also failed to establish by the same quantum of proof the fact of redundancy. SMART abolished the CSMG/FSD. Celestina Veruasa. When PMI’s rank-and-file employees staged a strike PMI incurred serious business losses and thus PMI closed shop and sent a notice of closure to DOLE. Astorga’s division. NLRC + Filipinas Synthetic Corporation (Filsyn). Petition is GRANTED. petitioners’ termination from employment was illegal. Far Eastern Textile Mills. LA ruled that the companies are solidarily liable for Mcleod’s money claims. v.  Smart Communications Inc. Etc. Allado then padlocked the office and appropriated for himself all the transferable rights and equipment of the office. v. Astorga never denied that SMART offered her a supervisory position in the Customer Care Department. but she refused the offer because the position carried lower salary rank and rate. Since SNMI was formed to do the sales and marketing work. CA affirmed the NLRC that the reorganization undertaken by SMART resulting in the abolition of CSMG was a legitimate exercise of management prerogative. Closure of Business -283  Business Services of the Future today Inc +Ramon Allado v. attorney’s fees plus interest against the respondents. Hence. is that it ordinarily refers to duplication of work. P40. LA ruled for them. non-payment of unused airline tickets. CA + Sps. The court held that if SMART wanted to get rid of her. SMART then conducted a performance evaluation of CSMG personnel and those with the highest ratings were recommended. Inc. Mcleod was hired as the Assistant Spinning Manager of Universal Textiles.. However. where it was held that if the dismissal is for an authorized cause. underpayment of salary and 13th month pay. NMI agreed to absorb the CSMG personnel who would be recommended by SMART.. this petition. CA upheld the NLRC. Astorga was employed by respondent Smart Communications as District Sales Manager. holiday pay. absent the requisite of due notice. the sps are in fact employees of the Company.

and Arbiter Ortiguerra did not make any finding. As for his liability as an employer as enumerated under Article 212(e) of the Labor Code (‘Employer' includes any person acting in the interest of an employer. he is entitled to a retirement pay equivalent to ½ month salary for every year of service based on his latest salary rate of P50. or (4) they are made by specific provision of law personally answerable for their corporate action. McLeod is not entitled to payment of vacation leave and sick leave as well as to holiday pay. LA found them liable for illegal closure. McLeod was aware that the company had incurred “huge loans from DBP. ─ The provisions of this title shall apply to employees in all establishments and undertakings whether for profit or not. persons in the personal service of another. In this case. directly or indirectly. by itself. With McLeod having worked with PMI for 12 years. Book Three of the Labor Code. Carag cannot be held personally liable for the separation pay of complainants. the NLRC. and workers who are paid by results McLeod knew that PMI was then suffering from serious business losses. PMI transferred its assets to SRTI to settle its obligation to SRTI. and MAC LABOR UNION 139 . CA affirmed. having knowledge of such issuance. Merger on the other hand is a union whereby one corporation absorbs one or more existing corporations and the absorbing corporation survives and continues the combined business. Thus. provides: Coverage. or when they are guilty of bad faith or gross negligence in directing its affairs.) The court recounted the cases of McLeod v. ─ For the purpose of determining the minimum retirement pay due an employee under this Rule. On this score alone. from 1980 to 1992. NLRC and Spouses Santos v. members of the family of the employer who are dependent on him for support. The term shall not include any labor organization or any of its officers or agents except when acting as employer.495 a month. (3) they agree to hold themselves personally and solidarily liable with the corporation. There was also no merger or consolidation of PMI and SRTI. NLRC dismissed the petitions and affirmed the LA. It is a combination by agreement between two or more corporations by which their rights Franchises and property are united and become those of a single new corporation. field personnel. does not make a corporate officer personally liable for the debts of the corporation. In fact. NLRC that Article 212(e) of the Labor Code. an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service.1 In the absence of an applicable agreement or retirement plan. Thus in McLeod: Personal liability of corporate directors. we apply Section 5. but not to government employees. The court held that the LA’s decision to hold Antonio Carag as MAC’s stockholder and Chairman has not basis since Complainants did not allege or prove. the term “one-half month salary” shall include all of the following: (a) Fifteen (15) days salary of the employee based on his latest salary rate. trustees or officers attaches only when (1) they assent to a patently unlawful act of the corporation. and the Court of Appeals to hold Carag personally liable for the separation pay owed by MAC to complainants based on Article 212(e) since it does not state that corporate officers are personally liable for the unpaid salaries or separation pay of  Antonio Carag v.assets. domestic helpers. McLeod testified that PMI was not able to operate or a period because of the strike. managerial employees. that Carag approved or assented to any patently unlawful act to which the law attaches a penalty for its commission. NLRC + NAFLU. 5.2 Components of One-half (1/2) Month Salary. Consolidation is the union of two or more existing corporations to form a new corporation called the consolidated corporation. The governing law on personal liability of directors for debts of the corporation is still Section 31 of the Corporation Code.” Since PMI has no retirement plan. MAC’s employees filed a complant for illegal closure of business through their labor union. Without notice of any kind Mariveles Apparel Corporation for unknown reasons ceased operations with the intention of completely closing its shop as manifested in a letter filed on the same day the company closed. Thus this petition. Rule II of the Rules Implementing the New Retirement Law which provides: 5. do not forthwith file with the corporate secretary their written objection. a fraction of at least six (6) months being considered as one whole year. on Working Conditions and Rest Periods. As Vice President of PMI. Title I. (2) they consent to the issuance of watered down stocks or when. Article 82. it was error for Arbiter Ortiguerra.

CA affirmed the NLRC but was required by law to grant the 13th month pay and that since its exemption from paying service incentive leave pay was not shown. However.) Disease Art. What they received from JPL was not a notice of termination of employment. When employment not deemed terminated. But in this case. NLRC affirmed the LA. he was in fact content to follow the instructions of petitioners during those years). respondents filed complaints for illegal dismissal. Even if he was offered a job which is less strenuous is of no matter. In all such cases. LA dismissed the complaints for lack of merit. the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. Temporary Closure/ Bona fide suspension of operations –  JPL Marketing Promotions v. In the the employees were not dismissed at all. The liability of corporate officers for corporate debts remains governed by Section 31 of the Corporation Code. whichever is greater. Petition partly granted. an industrial partner as ruled by the LA (since he did not receive any share of the division of profits and he was not shown to be part of any managerial duty. separation pay shall be allowed as a measure of social justice in those cases where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. he may be considered illegally dismissed. but only when he was illegally dismissed. (d) cessation of the employer's business. The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months. That he is paid separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service.” After 6 months. iii. - Art. (e) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co-employees. wherein an employee is placed on a “floating status. separation pay is authorized only in cases of dismissals due to any of these reasons: (a) installation of labor saving devices.  Vicente Sy v. Thus this petition. He found out later that his SSS premiums were not paid by employers. 283 and 284 of the Labor Code. whether legally or illegally. CA supra 140 . CA affirmed NLRC. being terminated of a disease under 284 requires a medical certificate by the employer and is indispensable which was not complied with by Sy. Ramon Abesa and Faustino Aninipot as merchandisers.employees of the corporation. JPL notified respondents that it would stop its direct merchandising activity in the Bicol Region and that they would be ransferrd to other clients effective 15 August 1996. it should be liable for it as well. (b) redundancy. Court found that an ER-EE relationship is present between SBT and Sahot and he was not. The Labor Arbiter found that Gonzales and Abesa applied with and were employed by the store where they were originally assigned by JPL even before the lapse of the six (6)-month period given by law to JPL to provide private respondents a new assignment. 286 of the Labor Code allows the bona fide suspension of the operation of a business or undertaking for a period not exceeding (6) months. Only liable for 13th month pay. He asked for extension of leave but he was later dismissed for failure to go to work. LA ruled for Sy. Thus the petition. The court also held that dismissal was not valid and it was without notice (he was simply threatened then dismissed). Petition Denied. private respondents effectively terminated their employment with JPL. On 17 October 1996. or the fulfillment by the employee of a military or civic duty shall not terminate employment. Art. NLRC found Sahot to be an employee of Sy. Disease as ground for termination. Sahot strated to have thigh pains and filed for leave. In 1994. The court held that under Arts. CA JPL Marketing and Promotions is a domestic corporation engaged in the business of recruitment and placement of workersmand they hired Noel Gonzales. (c) retrenchment. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided. the 6 month period has not yet elapsed and also as they admitted in their comment. In seeking and obtaining employment elsewhere. He is entitled to separation pay. a fraction of at least six (6) months being considered as one (1) whole year. The burden is on the employer to show that all the requisites for valid dismissal due to disease have been complied with. infact. but a memo informing them of the termination of CMC’s contract with JPL. 286. 284. also. Petition Granted. Jamie Sahot was with SB Trucking (owned by Sy) since 1965. all three of them applied for and were employed by another establishment after they received the notice from JPL.

LA ruled for Pula. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. The termination as upheld by the NLRC was grounded on Article 284 of the Labor Code. charitable and religious institutions and organizations in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. he was advised by his physician to take a leave of absence from work for one (1) month. termination on the ground of disease is prohibited unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six months even with proper medical treatment. medical. Pula refused the offer and instead filed a complaint for illegal dismissal. Miscellaneous provisions. NLRC ruled for Crayons saying that the fact that Pula was on leave for more than six months due to his illness rendered unnecessary the certification from a public health authority as required under the Omnibus Implementing Rules. Diagnosed as having suffered a relapse. Republic Act No. Coverage.Crayons Processing. Without the required certification. including educational. — This Rule shall apply to all establishments and undertakings.  Crayons Processing v. and in the absence of such certification. 277. Decision of LA reinstated. where he was confined for a week. Disease as a ground for dismissal. Book VI of the Omnibus Rules Implementing the Labor Code. whether operated for profit or not . Pula was advised to rest for 3 months. the dismissal must necessarily be declared illegal. Art. (As amended by Section 33. b. The burden falls upon the employer to establish these requisites. the characterization or even diagnosis of the disease would primarily be shaped according to the interests of the parties rather than the studied analysis of the appropriate medical professionals. 13 days after returning to work. It was pointed out that under Section 8. At a young age of 34. March 21. . Pula suffered a heart attack and was rushed to the hospital. Rule I. The requirement of a medical certificate under Article 284 cannot be dispensed with. and subject to the requirements of due process. When he returned for work. two requisites must concur: (a) the employee must be suffering from a disease which cannot be cured within six months and his continued employment is prohibited by law or prejudicial to his health or to the health of his coemployees. CA reinstated the decision of the LA. Petition is DENIED. he was asked by the company to resign and to accept P12. and (b) a certification to that effect must be issued by a competent public health authority. Procedural Requirements 141 . the employer shall not terminate the services of an employee except for just or authorized causes as provided by law.” However. — Where the employee suffers from a disease unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. For a dismissal on the ground of disease to be considered valid. After an angiogram procedure he was certified as “fit to work.000 as financial assistance. 1989) Omnibus Rules Book VI (Post Employment) TITLE I: Termination of Employment Section 1. Inc. Section 2. he was taken to the company clinic after complaining of dizziness. employed Felipe Pula as a Preparation Machine Operator. which reads: An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Sec. implementing in particular Article 284 of the Labor Code. Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code. 8. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. Security of tenure. the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment.(a) In cases of regular employment. 6715. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. Felipe Pula D.

hence. (d) In all cases of termination of employment. the following standards of due process shall be substantially observed: For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination. The court held that abandonment is the deliberate and unjustified refusal of an employee to resume his employment. In case of termination. grounds have been established to justify his termination. were dismissed for abandonment of work. termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment. Hence. that in such cases. this petition. present his evidence. NLRC and Riviera Home i. The court found that the Agabond were frequently absent having subcontracted for an installation work for another company. and (2) a clear intention to sever employer-employee relationship through overt acts.) 142 . "(ii) A hearing or conference during which the employee concerned. the requirement of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination. and giving said employee reasonable opportunity within which to explain his side. if he so desires. and giving to said employee reasonable opportunity within which to explain his side. is given opportunity to respond to the charge. the following standards of due process shall be substantially observed: For termination of employment based on just cases as defined in Article 282 of the Labor Code: "(i) A written notice served on the employee specifying the ground or grounds for termination. Section 3. the foregoing notices shall be served on the employee’s last known address. (iii) A written notice of termination served on the employee. LA declared the dismissals illegal. and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances. Reinstatement – An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to backwages . in any case. however. or is brought about by the completion of the phase of the contract for which the employee was engaged but. Book III of these Rules. employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers and after years under their employ. Petitioners then filed a complaint for illegal dismissal and payment of money claims. For a valid finding of abandonment. specifying the ground or grounds for termination. indicating that upon due consideration of all the circumstances. NLRC reversed the LA. with the assistance of counsel. or rebut the evidence presented against him. these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason. (c) In cases of employment covered by contracting or subcontracting arrangements. If the termination is brought about by the completion of a contract or phase thereof. unless the dismissal is for just or authorized cause. In General/Liability for non-compliance with procedural requisites/Essential Elements of Due Process  Agabon v. It is a form of neglect of duty. it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. For termination of employment as defined in Article 283 of the Labor Code. (b) A hearing or conference during which the employee concerned. or by failure of an employee to meet the standards of the employer in the case of probationary employment. Riviera Home Improvements. a just cause for termination of employment by the employer. grounds have been established to justify his termination. with the assistance of counsel if the employee so desires.(b) The foregoing shall also apply in cases of probationary employment: Provided. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent Standards of due process: requirements of notice.CA ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims. no employee shall be dismissed prior to the expiration of the contract between the principal and contractor or subcontractor as defined in Rule VIII-A. is given opportunity to respond to the charge. subject to the requirements of due process or prior notice. present his evidence or rebut the evidence presented against him. – In all cases of termination of employment.

(3) the dismissal is without just or authorized cause and there was no due process. The court held that contrary to the allegations of Serrano. Hence this petition. To cut costs. the dismissal or termination is illegal if effected without notice to the employee. the manner of dismissal. Serrano filed a complaint for illegal dismissal upon his termination. A termination for an authorized cause requires payment of separation pay. like Constitutional due process.. The shift in doctrine took place in 1989 in Wenphil Corp.Dismissals based on just causes contemplate acts or omissions attributable to the employee Dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees.e. However. violation by the employer of the notice requirement cannot be considered a denial of due process resulting in the nullity of the employee’s dismissal or layoff. but the employer did not give him and the DOLE a 30-day written notice of termination in advance. The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment of his wages during the period of his separation until his actual reinstatement but not exceeding three (3) years should be re-examined. There are three reasons why. the dismissal falls under Art. 283 of the Labor Code for redundancy Art. has two aspects: substantive. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. The remedy is to order the payment to the employee of full backwages from the time of his dismissal until the court finds that the dismissal was for a just cause. it should not invalidate the dismissal. Breaches of these due process requirements violate the Labor Code. ( Wenphil or Belated Due Process Rule.e. and procedural. Procedural due process requirements for dismissal are found in the Implementing Rules of P. It does not apply to the exercise of private power. if an employee is laid off for any of the causes in Arts. 2. 9 and 10.) In the fourth situation. But. his dismissal must be upheld and he should not be reinstated. installation of a labor-saving device. v. Isetann phased out its entire security section and engage the services of an independent security agency. Due process under the Labor Code..e. Book VI. 283-284. otherwise. Rule I. then the termination of his employment should be considered ineffectual and he should be paid backwages. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. NLRC held that the phase-out of private respondent’s security section and the hiring of an independent security agency constituted an exercise by private respondent of a legitimate business decision. NLRC. i. i. First is that the Due Process Clause of the Constitution is a limitation on governmental powers. the valid and authorized causes of employment termination under the Labor Code. The LA found this termination to be illegal. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code for an authorized cause under Article 283 or for health reasons under Article 284 and due process was observed. 442. i. 283 also provides that to terminate the employment of an employee for any of the authorized causes the employer must serve "a written notice on the workers and the DOLE at least one (1) month before the intended date thereof. and (4) the dismissal is for just or authorized cause but due process was not observed. Petition Denied. NLRC and Isetann Ruben Serrano was hired by private respondent Isetann Department Store as a security checker to apprehend shoplifters and prevent pilferage of merchandise. Serrano was given notice the same day of his termination The rule reversed a long standing policy theretofore followed that even though the dismissal is based on a just cause or the termination of employment is for an authorized cause.  Serrano v. Sec. as amended by Department Order Nos. on the other hand. the dismissal should be upheld." In this case. The case at bar squarely falls under the fourth situation. the employer should be held liable for non-compliance with the procedural requirements of due process . (2) the dismissal is without just or authorized cause but due process was observed. This is because his dismissal is ineffectual For the same reason.D. Procedurally (1) if the dismissal is based on a just cause under Article 282 the employer must give the employee two written notices and a hearing or opportunity to be heard (2) if the dismissal is based on authorized causes under Articles 283 and 284 the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. While the procedural infirmity cannot be cured.. such as the termination of employment under the Labor 143 .

in as much as he was not given a chance to defend himself. then. 282. he must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination of his employment without legal effect. The CA Decision held that except for respondents Vizier Inocencio and Vincent Edward Mapa whose petitions were dismissed . 283 of the Labor Code. NLRC reversed the LA and dismissed the case for lack of merit. On the other hand. Thus. 281. in this motion of reconsideration. he should not be reinstated. with respect to dismissals for cause under Art. Second reason is that notice and hearing are required under the Due Process Clause before the power of organized society are brought to bear upon the individual. the court held that It is the employer’s burden to prove a valid dismissal. 283 can not be considered a requirement of the Due Process Clause is that the employer cannot really be expected to be entirely an impartial judge of his own cause. Petitioners unfortunately failed in all respects. he should be reinstated. Quiambao ii. as provided in Rule XIV. This duty is all the more pressing in the case of Quiambao considering that it was he who called the management’s attention to the incidents of tip pocketing among some of his coemployees. 282. Henry dela Vega Balen and Roderick Malana. only to be charged with the offense he had asked to be investigated. the employer’s failure to comply with the notice requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes the termination of employment merely ineffectual. Criminal Investigation Service (CIS) of the Philippine Constabulary. Reynaldo Madrigal sold twenty sewing machines and electric generators which had been foreclosed by the respondent bank. they also had to prove that he and the rest of the respondents were responsible for it. 282-284. The court held that the requirements for the lawful dismissal of an employee by his employer are two-fold: the substantive and the procedural. The investigation of petitioner Salaw by the respondent Bank' investigating committee violated his constitutional right to due process. but the rudimentary requirements of due process notice and hearing must also be observed before an employee may be dismissed. National Capital Region. If the employee’s separation is without cause. Art. in cahoots with a co-employee. extracted from the petitioner without the assistance of counsel a Sworn Statement which made it appear that the petitioner. Salaw was asked to appear before the bank's Personnel Discipline and Investigation Committee (PDIC) and he was soon terminated from his employment for alleged serious misconduct or willful disobedience and fraud or willful breach of the trust reposed on him by the private respondents. Petitioners also had to prove that due process was observed in terminating the employment of respondents. instead of being given separation pay. Third reason why the notice requirement under Art. whether he is reinstated or only granted separation pay.  Cabalen Management Co Inc v.Code. Salaw filed a complaint for illegal dismissal.) Right to Counsel Espero Santos Salaw v. Not only must the dismissal be for a valid or authorized cause as provided by law (Articles 279. Section 5 of the said Rule requires that "the employer shall afford the 144 . in accordance with that article. NLRC Espero Santos Salaw was employed by the private respondents as a credit investigator-appraiser. only if the termination of employment is not for any of the causes provided by law is it illegal and. In either case. Thus this motion of reconsideration because Cabalen argues that the affidavits of their witnesses. he should be paid full backwages if he has been laid off without written notice at least 30 days in advance. Petition Granted. if it is shown that the employee was dismissed for any of the just causes mentioned in said Art. New Labor Code). It is not enough that petitioners showed that Quiambao had confirmed the occurrence of incidents of tip pocketing. Petition Denied except as to Quiambao’s dismissal since it is still unresolved. as well as the audit report are admissible and of rational probative value becasue the respondents did not contest the findings of the audit report that the cancelled Order Slips (OS) and receipts. However. this petition. therefore. LA ruled that the complaint is illegal. However. the SC affirmed the CA. Book V of the Implementing Rules and Regulations of the Labor Code governing the dismissal of employees. Hence. and the incidents of swapping dining OS with bar OS were beyond the course of ordinary business and as opined by the LA and NLRC gives a “wholly credible scenario” of tip pocketing by respondents and the alleged admission of respondent Jesus Quiambao in his Sinumpaang Salaysay of the existence of the anomalous activity. the employee should be reinstated and paid backwages.

” Art. Third. Regardless of respondent’s written explanation. In his letter of explanation. respondent was not issued a written notice charging him of committing an infraction. Respondent was elected KKKK president. respondent said that the erroneous declaration was unintentional. Thus. the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them. Upon audit KKTI noted an irregularity. First. The court held that the right to counsel. He filed a complaint for illegal dismissal. This should be construed as a period of at least five (5) calendar days from receipt of the notice After serving the first notice. In this case. and second. the windshield of the bus assigned to them was smashed. Decision of LA reinstated. a very basic requirement of substantive due process. As a result of the incident. Santiago Mamac 145 . Pending the holding of a certification election in DMTC. Decision of the CA is MODIFIED by deleting the award of backwages and 13th-month pay. He explained that during that day’s trip. iii. LA dismissed the complaint for lack of merit. he got confused in making the trip report.000) as damages. no hearing was conducted.000) for failure to comply with due process prior to termination. if he so desires. The court held that Due process under the Labor Code involves two aspects: first. Santiago O. for non-compliance with the due process requirements in the termination of respondent’s employment. He was later on terminated. Mamac was required to accomplish a “Conductor’s Trip Report” and submit it to the company after each trip. and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. procedural––the manner of dismissal. “Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. a hearing was still necessary in order for him to clarify and present evidence in support of his defense. and they had to cut short the trip in order to immediately report the matter to the police. substantive––the valid and authorized causes of termination of employment under the Labor Code. the CA affirmed the findings of the labor arbiter and the NLRC that the termination of employment of respondent was based on a “just cause. the employees are given the chance to defend themselves personally. it can not be admitted in evidence against him. Considering further that the admission by the petitioner was made without the assistance of counsel and was the sole basis for his dismissal. we have this petition. has to be observed as guaranteed by the 1987 constitution. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. Affirming the NLRC. 277 of the Labor Code provides the manner of termination of employment. (2) present evidence in support of their defenses. In the present case. Mamac worked as a bus conductor of King of Kings Transport. with the assistance of a representative or counsel of their choice. Hence. It discovered that respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight hundred and ninety pesos. It ruled that respondent’s act in “declaring sold tickets as returned tickets constituted fraud or acts of dishonesty justifying his dismissal. Many DMTC employees were subsequently transferred to KKTI they organized the Kaisahan ng mga Kawani sa King of Kings (KKKK) which was registered with DOLE. Inc. the CA held that there was just cause for respondent’s dismissal. and (3) rebut the evidence presented against them by the management. petitioner KKTI is sanctioned to pay respondent the amount of thirty thousand pesos (PhP 30. the following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them. even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report notifying him of his offense. Second. such would not comply with the requirements of the law. The law is clear on the matter.) Notice King of Kings Transport v. We observe from the irregularity reports against respondent for his other offenses that such contained merely a general description of the charges against him.worker ample opportunity to be heard and to defend himself with the assistance of his representative. petitioner KKTI was incorporated with the Securities and Exchange Commission which acquired new buses. The implementing rule of the aforesaid provision states: To clarify. Petition is PARTLY GRANTED. During the hearing or conference. NLRC ordered KKTI to indemnify complainant in the amount of ten thousand pesos (P10." Here petitioner was perfunctorily denied the assistance of counsel during investigation.

Cresenciano Hernandez Hearing a. Filoteo entered his time-in at 8:45 p. From these facts. National Labor Relations Commission. The amount of such damages is addressed to the sound discretion of the Court. He was soon repatriated to the Philippines for the reason that he was recruited for Al Yamama as Auto Electrician. Since they were informed that no butchering would be done.. He was hired by Al Yamama in Jeddah. Orbit. Labor Arbiter dismissed the complaint for lack of merit. two requisites must concur: (a) the dismissal must be for any of the causes provided for in Article 282 of the Labor Code. Thus this petition. he was given P2. As found by the NLRC iv.m. First. Thus this petition. One day. but he was not qualified to work in Budget Rent-A-Car Company & Nissan. Without prior notice or explanation. he received a memorandum from the Assistant Personnel Officer asking him to explain. which must be supported by clear and convincing evidence.A. Filoteo complied and submitted his written explanation that same evening. Hearing Permex Inc v. Al Yamama took respondent's passport and simply brought him to petitioner's foreign principal. LA dismissed the case for lack of merit. To constitute a valid dismissal from employment. the employee must be given notice. The court held that Al Yamama failed to satisfy the two-notice requirement. with adequate opportunity to be heard. the entry he made in his DTR. He filed a Complaint for illegal dismissal. Respondent executed a Statement that: he could no longer continue his job with Al Yamama. Later. in his scheduled time-out but at around 9:20 p.000. pursuant to prevailing jurisprudence. However. before he is notified of his actual dismissal for cause. he wrote 7:00 a. the next day. This means that an employer can terminate the services of an employee for just and valid causes.00 as financial assistance. Article 277 of the Labor Code explicitly provides: The Serrano doctrine which awarded full backwages in “ineffectual dismissal cases” where an employee dismissed for cause was denied due process. In the present case. Court deems the amount of P30.m. K. the Court held that if the dismissal was for a cause. Petition is PARTLY GRANTED Magro Placement v.000.m.Cresenciano E. the employer’s violation of the employee’s right to statutory due process warrants the payment of indemnity in the form of nominal damages. Respondent worked at the Al Yamama as an electrician but because of lack of equipment or tools.S. the work became harder. Respondent heard his employer's complaint against him at that instance only. the private respondent was not afforded an opportunity to be heard. it is clear that respondent's dismissal was effected without the notice required by law. and told the latter that respondent did not know his job as electrician. petitioner's charge of serious misconduct of falsification or deliberate misrepresentation was not supported by the evidence on the record contrary Second. the NLRC found that the two-fold requirements for a valid dismissal were not satisfied by the petitioners. NLRC reversed LA. he was allowed to find a new job. the lack of statutory due process should not nullify the dismissal. The court held that whether private respondent was illegally dismissed or not is governed by Article 282 of the Labor Code. NLRC affirmed this ruling and the CA MODIFIED THE DECISION by ordering private respondents to pay petitioner separation pay equivalent to one (1) month pay for every year of service since it found that Magro had just cause to effect respondent's dismissal but that it found the dismissal did not comply with the due process requirements. Filoteo was soon suspended indefinitely and thus he filed a complaint for illegal dismissal. for a two-year contract. in writing. Hernandez filed with Magro Placement for an application for employment abroad as Auto Electrician. which was applied by the CA. and (b) the employee must be afforded an opportunity to be heard and defend himself. taking into account the relevant circumstances. he was allowed to go for a trade test but failed. In that case.) 146 . NLRC Permex initially hired Emmanuel Filoteo as a mechanic but he was soon promoted to water treatment operator. or render it illegal or ineffectual. and since he was scheduled to work until 7:00 a. he asked permission to go home and caught the service jeep provided by Permex without correcting the 7:00am time out. procedurally. It also means that. has been abandoned by the Court's ruling in Agabon v.m. but he was not qualified since he had no experience as Auto Electrician.00 as sufficient nominal damages. Filoteo went to see the Assistant Production Manager to inquire if "butchering" of fish would be done that evening so they could start operating the boiler.

that Bul-An was uncooperative. Petitioners insisted that the real reason for their termination was their persistent demands for overtime and holiday pay. They filed a complaint for illegal dismissal. 147 . petitioners were dismissed. Petition is DENIED. not to mention that it was his first offense committed without malice. thinking that their verbal explanations were sufficient. On February 29. moral and exemplary damages against the petitioners. the tape receipts presented by respondents showed that there were anomalies committed in the branches managed by the petitioners . An internal investigation ensued. some employees declared in their affidavits that the cheating was actually the idea of the petitioners. of respondent Wenphil Corporation. opted to forego a written explanation. 2000 for investigation. respectively. Use of Position Paper Seastar Marine Services Inc v. Even without the affidavits.Such dismissal. but instead of receiving assistance. Wendy’s had a “Biggie Size It! Crew Challenge” promotion contest. the he filed a complaint for illegal dismissal with prayer for payment of back wages. Tandang Sora and Fairview branches cheated. Shortly thereafter. Additionally. as well as actual. Bul-An was terminted and thus. Wenphil Corp b. Muaje-Tuazon v. and executed an Affidavit on the matter. refused to obey his orders and those of the chief officer. They were not notified of the accusation against them before they were summoned to the main office of Wenphil on February 3. he confronted the Master of the vessel and told him “that the vessel was too small for him and too many work. LA ruled in favor of the employees. CA found substantial proof of petitioners’ misconduct. and notifying them of the scheduled hearings. Paruginog denied the respondent’s allegations that he made threats to kill the respondent. Bul-an. He not only refused to obey orders from his superior officers. after about a week on board. Bul-An immediately reported the incident to Master Captain Stumpe Jacobus. It was averred that even only after a few days of boarding the M/V Blue Topaz. Paruginog mauled the respondent. He immediately reported the matter to the petitioners. Petitioners aver that their right to due process was violated. From September 14 to November 8. 1998. petitioners were notified. Spain. Meycauayan branch won 2 times in a row. Lucio Bul-an Jr. Bul-An was forced to seek help from the Philippine Embassy at Barcelona. Captain Jacobus reported to his superiors at the Topaz Seal Shipping Company. he was dismissed and repatriated. NLRC affirmed the LA. was hired by petitioner Seastar as an Able Seaman for and in behalf of H. namely: (1) a notice which apprises the employee of the particular acts or omissions for which his dismissal is sought. Tuazon and Almer R. Seastar alleged that the respondent was “psychologically ill” and was dismissed for a justified and lawful cause. Considering the factory practice which management tolerated the court held that Filoteo. The petitioners. in our view. the law requires that the employee be given two written notices before terminating his employment. Immediately thereafter. and often pretended to be ill. of scheduled hearings regarding the matter and of their immediate suspension. in his rush to catch the service vehicle. Lucio A. sufficient basis exists for respondents’ loss of trust and confidence on the petitioners as managerial officers. The court held that First.” Due to the troubles and problems being encountered by the Master of the vessel and the crew with complainant. Abing worked as branch managers of the Wendy’s food chains in MCU Caloocan and Meycauayan. causing bodily harm and physical injuries. The records show that the petitioners were given written notices informing them that they were charged with serious misconduct and dishonesty in relation to the “Biggie Size It! Crew Challenge” program. the respondent already showed unusual behavior. MCU Caloocan. he also refused to work. 2000. and (2) the subsequent notice which informs the employee of the employer’s decision to dismiss him. Jr. Thus this petition. Holland Ship. In a Letter. he was even scolded for returning home. Petitioners contend that respondents did not sufficiently prove the existence of a just cause for their termination. who assured him that he would settle the matter. and committed also by others who were not equally penalized. In the present case. merely forgot to correct his initial time-out entry. hence they were illegally dismissed. Annabelle M. Respondents maintained that petitioners were terminated for dishonesty amounting to serious misconduct and willful breach of trust. In a Letter Paruginog reported the respondent’s unusual behavior since boarding the ship. Management received reports that as early as the first round of the contest. the Meycauayan. in writing.S. Chief Mate Benjamin A. was too harsh a penalty for an unintentional infraction.S. and did not appear during the set hearing. Petition is DENIED.

Section 14.Thus. No decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based. and other documents. – (a) Should the Labor Arbiter find it necessary to conduct a hearing. The parties shall. with proof of having furnished each other with copies thereof. In the absence of any palpable error. outlines the procedure to be followed in cases before the labor arbiter. (b) If the Labor Arbiter finds no necessity of further hearing after the parties have submitted their position papers and supporting documents. he shall issue an Order to that effect and shall inform the parties. affidavits. Macaraya was dismissed by her employer and repatriated to the Philippines. National Labor Relations Commission is instructive: “The case may be decided on the basis of the pleadings and other documentary evidence presented by the parties. Inc. a formal trial-type hearing is not at all times and in all instances essential to due process. He shall render his decision within thirty (30) calendar days. Petition is DENIED. After working for three months and thirteen days. Saudi Arabia where her employer took the only copy of her employment contract and never returned it to her and she was forced to work as a domestic helper. either in whole or in part. at his discretion and for the purpose of making such determination.) Decision or Award ARTICLE VIII – JUDICIAL DEPARTMENT. At this stage. not referred to and any cause or causes of action not included in the complaint or position papers. as amended. No petition for review or motion for reconsideration of a decision of the court shall be refused due course or denied without stating the legal basis therefor. Mohmina Macaraya applied for employment as a dressmaker with respondent Mars International Manpower. POEA. however. Petitioners allege that the NLRC should have remanded the case to the labor arbiter for further proceedings.LA ruled that the petitioner was dismissed without just cause. Macaraya filed with the POEA a complaint for illegal dismissal. that OFW cases shall be decided within ninety (90) calendar days after the filing of the complaint and the acquisition by the labor arbiter of jurisdiction over the parties. Section 5. the Labor Arbiter shall direct both parties to submit simultaneously their position papers/memorandum with the supporting documents and affidavits within fifteen (15) calendar days from the date of the last conference. after the submission of the case by the parties for decision. ruled that Macaraya had been illegally dismissed as both her foreign employer and recruitment agency ABD Overseas v. Macaraya was soon deployed to Riyadh. – Should the parties fail to agree upon an amicable settlement. Unless otherwise requested in writing by both parties. – Immediately after the submission by the parties of their position papers/memorandum.00. Those verified position papers shall cover only those claims and causes of action raised in the complaint excluding those that may have been amicably settled. thereafter. v. during the conferences. without extension. or present evidence to prove facts. and shall be accompanied by all the supporting documents including the affidavits of their respective witnesses which shall take the place of the latter’s direct testimony. not be allowed to allege facts. he shall render his decision in the case within the same period provided in paragraph (a) hereof. ask clarificatory questions to further elicit facts or information. he shall issue an order to that effect setting the date or dates for the same which shall be determined within ninety (90) days from initial hearing. the Labor Arbiter shall issue an order stating therein the matters taken up and agreed upon during the conferences and directing the parties to simultaneously file their respective verified position papers. the Labor Arbiter shall motu proprio determine whether there is a need for a formal trial or hearing. MARS submitted to the POEA an overseas contract worker information sheet stating that she would be employed as a domestic helper for two years with a monthly salary of US$200. It is enough that the parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present supporting evidence on which a fair decision can be based. the method adopted by the labor arbiter to decide a case must be respected by the NLRC. stating the reasons therefore. In any event. Section 4. if any from any party or witness. Submission of Position Papers/Memorandum . as follows: Section 3. NLRC + Mohmina Macaraya 148 . even in the absence of stenographic notes: Provided. Rule V of the Rules of Procedure of the NLRC. Period to Decide Case. the following pronouncement of the Court in Cañete v. including but not limited to the subpoena of relevant documentary evidence. he may. NLRC ruled in favor of the respondent and dismissed the appeal for lack of merit. arbitrariness or partiality. Determination of Necessity of Hearing.

Petitioners simply alleged that respondent’s failure to report to the quality control head the batch that did not meet the minimum standard showed connivance to sabotage petitioners’ business.Nicos Industrial Corporation v. NLRC reversed the LA. M. Basic principles of justice and equity dictate that MARS should not be totally cleared of its liability to Macaraya under the peculiar circumstances of this case. it is an instance of arguing non sequitur. Court of Appeals the Court said: “It is a requirement of due process that the parties to a litigation be informed of how it was decided with an explanation of the factual and legal reasons that led to the conclusions of the court. In the case at bar. NLRC affirmed the LA. Barely a month after boarding the vessel M/V Naval Gent respondent was ordered to disembark in Varna. Bulgaria and repatriated to the Philippines. The willful breach by the employee of the trust reposed in him by his employer must be founded on facts established by the employer. without deducting earnings earned elsewhere during the period of his illegal dismissal. respondent ABD Overseas Manpower Corporation being the transferee agency must assume (the) full liability of the principal. Form of Decision/Resolution/Order .” . It ill becomes an appellate judge to write his rulings with a pair of scissors and a pot of paste as if he were a mere researcher. The burden is on the employer to prove that the termination of employment was for a just or authorized cause. submitted their respective written explanations and were placed under preventive suspension. through its recruitment and manning agency. Labor Arbiter found that respondent was 149 . Editha Llamera Skippers United Pacific Inc v. An employee who has been illegally dismissed is entitled to reinstatement and full back wages. Thus this petition. Al Babtain Recruitment In labor cases. NLRC Gervacio Rosaroso was signed up as a Third Engineer with Nicolakis Shipping. herein petitioner Skippers United Pacific. Thus this petition.) Burden of Proof Limketkai Sons Milling Inc. however. then it would result in undue enrichment on the part of MARS. we find untenable petitioners’ claim of breach of trust and confidence committed by the employee. Limketkai Sons Milling received reports that some of its oil products.” In the case at bar. Section 13 Rule VII of the New Rules of Procedure of the NLRC provides as follows: “SEC. Not only is petitioners’ logic flawed. On appeal to the NLRC ABB Overseas opined that the failure of MARS to prove the legality of Macaraya’s dismissal from employment should not mean that the same burden should fall upon petitioner who was not even privy to Macaraya’s employment contract. v. Rule I.failed to prove that the dismissal was for a just and valid cause. respondent filed a complaint for illegal dismissal. CA affirmd the NLRC with the MODIFICATION that petitioner’s dismissal was illegal. Immediately after arriving in the Philippines. petitioner became the accredited recruitment agency of the principal. Considering that it was MARS with whom Macaraya entered into a contract and that it had been accorded due process at the proceedings before the POEA MARS is the one to be held accountable for her claims. particularly Marca Leon Cooking Oil and Corn Oil had visible impurities and rancid taste. – The Decision/ Resolution shall state clearly and distinctly the findings of facts issues and conclusions of law on which it is based and the relief granted if any.” This provision of the Rules is obviously in consonance with Section 14 Article VIII of the Constitution providing that “(n)o decision shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is based.S. vi. LSMI terminated the services of the suspended employees. He is an innovator not an echo.A. The court held that where there is no showing of a just or authorized cause for termination of employment. Petition is DENIED. If the decision or resolution involves monetary awards the same shall contain the specific amount awarded as of the date the decision is rendered. The latter must clearly and convincingly prove by substantial evidence the facts and incidents leading to the loss of confidence in the employee. except respondent who was then on maternity leave. If it were to be held liable for the monetary awards in favor of Macaraya. Llamera filed against LSMI a complaint for illegal dismissal. The concerned employees. LA ruled in her favor. Book III of the POEA Rules and Regulation which provides: It is clear from the aforementioned provision of the POEA Rules and Regulation that the transferee agency shall assume full and complete responsibility to all contractual obligations of the principals to its workers originally recruited and processed by its former agency. 13. In the case at hand. The court cited Section 6. that is. The term of the contract was for one year. S. NLRC Affirmed. technical rules of procedure are not applicable. but may apply only by analogy or in a suppletory character. the law considers the case a matter of illegal dismissal.

In the minutes of the company’s investigation. fraud. hired Vicente Ectuban in 1978 and in 1994 he was the Chief Purser of the M/V Surigao Princess. CA affirmed with the modification that in lieu of reinstatement. The painter reported that he was being forced by respondent to overprice by P1. respondent is awarded separation pay.The two-fold requirements for a valid dismissal are as follows: (1) dismissal must be for a cause provided for in the Labor Code. Philtread found respondent guilty of extortion. reflects a regrettable lack of loyalty. it will actually become a prize for disloyalty. The infraction that he committed. Ectuban thought that he was fired from his work. Petition Denied. Vicente was employed by Philtread Tire and Rubber Corporation as a housekeeping coordinator. the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. the petitioner is not an ordinary rank-and-file employee. Substantial evidence is that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. it was revelaed that Avis did not categorically state that he was pressured by respondent to overprice his service fee. he filed a compalint for illegal dismissal claiming that the dismissal was without basis. the Chief Engineer. NLRC reversed the LA and held that the respondent was illegally dismissed. he failed to comply. The court held that the rule in labor cases is that the employer has the burden of proving that the dismissal was for a just cause. Uncorroborated assertions and accusations by the employer will not be sufficient but as regards a managerial employee. proof beyond reasonable doubt is not required. Thus this petition. based purely on hearsay. which is substantive. and (2) the observance of notice and hearing prior to the employee’s dismissal.00 his service fee of P3. A complaint against Vicente was from a sign painter with whom petitioner had a service contract. Sulpicio Lines Inc. it being sufficient that there is some basis for such loss of confidence. NLRC affirmed LA since the offense allegedly has not been established by clear and competent evidence that the alleged irregular condition of the tickets was attributable to the complainant or to other members of the team of inspectors who have equal access to the tickets. Vicente Etcuban v. serious misconduct and willful breach of trust and confidence and he was terminated. having come from a source. which is procedural Substantial evidence is defined as that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. the Report cannot be given any weight or credibility because it is uncorroborated. The reason was that the Report cannot be given any probative value as it is uncorroborated by other evidence and that it is merely hearsay. it was logical that Etcuban committed the tampering. not giving credence to the telexed Chief Engineer’s Report saying that Rosaroso was slacking in his duties and was unwilling to help with the repairs. and obviously merely an afterthought. Petitioner assigned respondent to perform janitorial duties.00 – the fare for adult passengers for the boat’s route.000. who did not have any personal knowledge of the events reported therein. 150 . Sulpicio Lines. The boat was subjected to a surprise inspection an it was discovered that several yellow passenger’s duplicate original of unissued passage tickets already contained the amount of P88. Skippers failed to overcome the burden of proof tasked upon it in proving that the dismissal has a just cause. If an employee’s length of service is to be regarded as a justification for moderating the penalty of dismissal.00. prompting him to request an immediate disposition of his case. The court held that there is neither direct nor documentary evidence to prove that respondent was involved in extortion. Hence this petition. illegal. vis-a-vis his long years of service with the company. Thus this Petition. Inc. Alberto M. Barely a week after the preventive suspension. But when petitioner directed him to submit his evidence within three (3) days from notice. As all three tribunals found. The petitioner’s work is of such nature as to require a substantial amount of trust and confidence on the part of the employer. CA affirmed the NLRC. The court held that the petitioner failed to prove its charge by substantial evidence. in the case of managerial employees. He refused to sign the minutes of the investigation claiming that it was “self-incriminatory. and the fact that the tampered tickets were in his possession. LA ruled for Philtread.illegally dismissed.” And thus he was placed under suspension and replaced by the company.800. failure to show this would necessarily mean that the dismissal was unjustified and. LA ruled for him. Suplicio Lines instructed him to report to the main office for an explanation and investigation. CA reversed NLRC saying that there was sufficient basis for loss of trust and confidence on him since as the custodian of the tickets with the authority to issue them. In the present case. The court held that the degree of proof required in labor cases is not as stringent as in other types of cases. NLRC and CA affirmed the LA. therefore. Hence.) Degree of Proof/Substantial Evidence Philtread Tire and Rubber Corp v. vii. The fact that the petitioner has worked with the respondent for more than 16 years should be taken against him.

the bus Race was driving was bumped by a Dagupan-bound bus and he suffered a fractured left leg. In Zurich Airport he committed a noise violation offense for which he apologized. S’pore Air was hit by a recession and he was one of the pilots who were terminated. He thereafter received a memorandum in reply which claims that he has abandoned his post.) Prescription Menandro B. De Guzman filed a complaint for illegal dismissal. LA dismissed the complaint. 1982 has already prescribed. v. The Company’s operation manager placed him under preventive suspenson when he went beyond the period of the leave of absence he applied for. The court found that there was a dismissal and that for a dismissal to be completely valid and faultless. He also figured in a tail scraping incident. his termination of employment effective November 1. A bullet was still imbedded in his leg which allegedly still gave him chronic pain. CA +Singapore Airlines. 1983. Money claims. he did not report for duty because the left side of his body above his thigh was very painful and rendered him unable to stand. Petition is DENIED. Race 151 . we agree with the appellate court's conclusion that petitioner's action for damages due to illegal termination filed again on January 8. He filed an LOA since he claimed he was experiencing chronic pain from the gunshot wounds he sustained when he tried to defend the earnings of the company from “brigands. vs. Pablo Race was employed by Victory Liner as a bus driver and as a requisite for his hiring. The burden of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue employment. In the case at bar. Menandro B. the respondent deposited a cash bond in the amount of P10. Petitioner raises the issue of whether his action is one based on Article 1144 or on Article 1146 of the Civil Code. To constitute abandonment.According to him. CA reversed the trial court due to prescription and dismissed the complaint.perverting the meaning of social justice and undermining the efforts of labor to cleanse its ranks of all undesirables. then filed again in 1987 before the Regional Trial Court. its dismissal or voluntary abandonment by the plaintiff leaves in exactly the same position as though no action had been commenced at all. had already prescribed. two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason. We base our conclusion not on Article 1144 of the Civil Code but on which sets the prescription period at three (3) years and which governs under this jurisdiction. and (2) a clear intention to sever the employer-employee relationship. What is applicable is Article 291 of the Labor Code: Art. Laureano v. He filed a complaint for illegal dismissal.The NLRC granted the appeal and gave DeGuzman the money clams. One month after his release from the hospital. but which was withdrawn. that the ten year prescriptive period fixed in Article 1144 of the Civil Code may not be invoked by petitioners.000. Thus this petition. the employer must show that the dismissal was for a just or authorized cause and that it observed procedural due process. the respondent was confined again for further treatment of his fractured left leg. The court held that neither Article 1144 nor Article 1146 of the Civil Code is here pertinent. the court held that "although the commencement of a civil action stops the running of the statute of prescription or limitations. NLRC viii. Upon his return to the office to report for work he was informed that he was Victory Liner Inc. 1987 or more than four (4) years after the effective date of his dismissal on November 1. 1982. According to him. Laureano was hired as B-707 captain. CA reinstated the LA. In the light of Article 291. De Guzman gave a statement on the reason for his absences. was based on an employment contract which is under Article 1144. The appellate court concluded that the action for illegal dismissal originally filed before the Labor Arbiter on June 29. All money claims arising from employee employer relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued. Court of Appeals.” His leg shrunk by at least two (2) inches and three (3) feet of his intestines had to be removed. De Guzman v. Fernandito De Guzman was employed as a bus conductor by private respondent Philippine Rabbit Bus Line Company. Thus this petition. private respondents contend that petitioner was validly dismissed for abandonment of work. so his action should prescribe in 10 years and not 4 years under Article 1146 used as basis by the CA. the respondent company failed to discharge this burden. 291.. for the Civil Code is a law of general application. Petition is GRANTED. Inc.. it is settled. In this case.00 to the petitioner. He was offered an extension of his two-year contract to five (5) years. In Olympia International. In Tarlac." CA AFFIRMED. The trial court found for Menandro. aforecited. In illegal dismissal.

Jr.. It ratiocinated that respondent did not abandon his work and. Race talked with his officer who told him that he was resigned and asked him to accept 50k. Emano. The court ruled that even if Bithao’s quitclaim was to the effect that the amount stated therein was the full and final settlement of all his claims (including all the amounts due him by reason of the decisions of the Labor Arbiter and the NLRC) it does not mean that he actually received the judgment award. when the quitclaim was executed. Ballon. In Callanta v. Lacerna. Hence. holiday pay. Carnation Philippines. trade or calling is a "property right. The four-year prescriptive period shall commence to run only upon the accrual of a cause of action of the worker. Leonardo Bithao was hired by Rizal Commercial Banking Corporation and eventually filed a complaint for illegal dismissal when he was terminated based on his signing of a quitclaim. still confined at the Specialist Group Hospital. NLRC reversed the LA and ordered the reinstatement of the employees. overtime pay and 13th month pay. the employee concerned is given a period of four years from the time of his dismissal within which to institute a complaint. RCBC could not deny that the quitclaim was in its own interest. LA ruled for Bithao. Petitioner failed to establish the fact that the respondent ceased to be its employee on 10 November 1994. as such. CA affirmed the LA and the NLRC. Since both the Labor Arbiter and the NLRC have previously ruled in respondent’s favor. RCBC says that (1) when respondent executed the quitclaim. This is based on Article 1146 of the New Civil Code which states that actions based upon an injury to the rights of the plaintiff must be brought within four years. Bithao Solgus Corporation v. CA affirmed the NLRC with a few modifications in the award such as 152 . LA dismissed the complaint saying that respondent was not a regular employee but a mere field personnel and. and attorney’s fees. therefore. They were subsequently dismissed from employment. the NLRC affirmed the Labor Arbiter’s decision. It is apparent that respondent did not abandon his work. The right is considered to be property within the protection of a constitutional guaranty of due process of law. In fact. and Alagos had executed Affidavits of Desistance evidencing that their complaints had been amicably settled. His absence from work for a long period of time was obviously due to the fact that he was still recuperating from two operations on his fractured leg. they filed a compalont for illegal dismissal. therefore. and the complaints of Deseo and Soriano should be dismissed because they failed to complete their six-month probationary period and were. through hi counsel sent a demand letter to the company and there being no response. expose to danger the lives of the passengers and the property of the petitioner. Dagupan City. Race. LA dismissed the complaints and affirmed the validity of the Affidavits of Desistance. Menor. ix. not entitled to service incentive leave. it was held that: [O]ne's employment. Inc. Solgus submitted a Memorandum alleging that: complainants Telin. Petition is DENIED. not regular employees. continued to be an employee of petitioner after he was discharged from the hospital. profession." and the wrongful interference therewith is an actionable wrong. In illegal dismissal cases. this appeal. at that time. Except for its flimsy reason that the sick leave. It is error to conclude that the employment of the respondent was unjustly terminated on 10 November 1994 because he was. Petition is PARTLY GRANTED insofar as it prays for the non-reinstatement of respondent. petitioner was aware of the slim chances it had before the appellate court. undoubtedly. petitioner’s appeal before the Court of Appeals was still pending. disability leave and physician consultations were given to the respondent as mere accommodations for a former employee. the decisions of both the Labor Arbiter and the NLRC were still pending review by the Court of Appeals. instead. petitioner shouldered the respondent's medication and hospital expenses during the latter's confinement and operation in two hospitals. It should be stressed that petitioner is a common carrier and.considered resigned from his job. On appeal. CA The employees of Solgus separately filed complaints for illegal dismissal and underpayment of salaries and related benefits allegeing that upn hiring there was no stipulation that they were being hired as probationary employees and that they worked twelve (12) hours daily and were made to sign blank payrolls. except for deleting the award of moral and exemplary damages. (2) respondent expressly acknowledged and waived in the quitclaim all amounts due him based on the Labor Arbiter’s decision.) Quitclaim RCBC v. is obliged to exercise extraordinary diligence in transporting its passengers safely. NLRC reversed the LA. He also ruled that Race failed to present evidence showing that Race was entitled to the abovestated money claims.To allow the respondent to drive the petitioner's bus under such uncertain condition would. Petitioner knew this very well. The SC agreed with the appellate court that petitioner took undue advantage of respondent’s predicament and dire financial needs to let him sign the quitclaim in exchange for his retirement benefits. In the instant case.

in the case the company presented the Affidavits of Desistance for the 1st time 7 months after the company received the order of the LA. committed grave abuse of discretion. releases and other waivers of benefits granted by law or contracts in favor of workers should be strictly scrutinized to protect the weak and the disadvantaged. The court held that in Section 3. it is binding on the parties and transaction. the submission by the petitioner of copies of the assailed NLRC resolutions each bearing the stamp “certified xerox copy” instead of “certified true copy” is substantial compliance with the aforesaid requirement. with full understanding of what he was doing.) 153 . as amended). It did not require him to post such bond. Rule 46. he requested for a cash advance in the amount of P5.150. a despedida party was tendered for the petitioner at the Heritage Hotel in Pasay City. The Affidavits of Desistance do not even bear the prima facie evidence of their due execution accorded to private documents. In this case. order.reintstatement of Diosdado Telin. ANTONIO S. NLRC dismissed the appeal. National Labor Relations Commission. The purpose for this requirement is not difficult to see. but also to the factual circumstances under which they have been executed. CA dismissed the petition saying that Quintano failed to attach to the instant petition for certiorari certified true copies of the assailed NLRC Orders and copies of the following: his complaint for illegal dismissal. Rule 46 of the 1997 Rules of Civil Procedure. 1999 (Section 1. indeed. the transaction must be recognized as a valid and binding undertaking. In this case. and to pay for his outstanding cash advances from his former employer and that later on the company learned that he mortgaged the condominium unit to Citytrust Bank.00 to purchase a condominium unit.[6] The provision states that either a legible duplicate original or certified true copy thereof shall be submitted. justified the dismissal of the petition for certiorari for the petitioner’s failure to manifest his willingness to post a bond which would answer for whatever damages that may be caused to the respondents The Court agrees with the petitioner that his failure to manifest his willingness to post the said bond is not fatal. QUINTANO filed a complaint for illegal dismissal against Moldex Group saying that he joined respondent MLI as Senior Executive Vice-President upon respondent Uy’s inducement of a superior compensation package that included a signing bonus in the amount of P5. Rule 65 in relation to Section 3. without any warning or explanation.00. He refused to do so. 1997. The petitioner alleged that he was to use the said amount to purchase condominium unit and that the employment contract was for a period of five years. during a company party held on November 13. However. resolution or ruling subject of a petition for certiorari is essential to determine whether the court. likewise. Ths this petition. neither did the CA determine the amount that he must Dismissal of case purely on a technical ground – frowned upon Quintano v. which rendered the same. on November 11. tribunal.” notice of appeal. The mere fact that the respondents were not physically coerced or intimidated does not necessarily imply that they freely or voluntarily consented to the terms thereof.000. Citing Section 4(b). Petition is denied. 1997. If what is submitted is a copy. The company averred that when the petitioner joined respondent MRMI. of the Rules of Court it reads: The submission of the duplicate original or certified true copy of the judgment. Nonetheless. It is to assure that such copy is a faithful reproduction of the judgment.[8] Rule 48 of the Rules of Court. However. Thus this petition. to the petitioner’s consternation. motion for “formal trial. agency or office involved or his duly authorized representative. Uy and Vinuya asked the petitioner to resign for loss of trust and confidence. and the consideration for the quitclaim is credible and reasonable. it was held that: Not all waivers and quitclaims are invalid as against public policy. in regard not only to the words and terms used. The LA found that petitioner violated his contractual obligation to the respondents by renting out the condo and resulted in a loss of trust and confidence in the petitioner. body or tribunal. Quitclaims. On November 13. a car. In Periquet v. NLRC x. The waivers should be carefully examined. The court held that the Affidavits deserve little consideration. because even the notaries public before whom they were acknowledged issued a certification that no such affidavit was acknowledged by Telin and Alagos before them. But where it is shown that the person making the waiver did so voluntarily. resolution or ruling subject of the petition.150. If the agreement was voluntarily entered into and represents a reasonable settlement.000. and the Decision of the Labor Arbiter dated April 16. the appellate court. the CA did not act upon the petitioner’s application for injunctive relief. respondent Uy made a unilateral announcement of the petitioner’s resignation from the company. order. 1997. then it is required that the same is certified by the proper officer of the court. respondents Uy and Vinuya enjoined him to resign from his position.

obviously selfserving. Respondent company conducted its investigation on the alleged theft before filing the criminal charges and the application for clearance. cannot support the private respondent’s claim of loss of trust and confidence in petitioner. In fact. unwarranted. which found that it was not petitioner Quiambao but the company’s cashier. NLRC found no evidence substantiating the charges nor is there evidence that he misappropriated funds of the company or extorted money from customers. The purpose of the proceedings before the fiscal is to determine if there is sufficient evidence to warrant the prosecution and conviction of the accused. He was subsequently suspended for an indefinite period for poor performance in extending credit to customers. that his union activities prompted his termination. there is entire want of evidence to justify the dismissal of the petitioner. IV. contends that the dismissal by the Provincial Fiscal of the criminal complaint for qualified theft filed against him by private respondent for insufficiency of evidence supports his claim that he is innocent of the imputed acts of stealing. The court held that petitioner was accorded more than ample opportunities to fully present his side of the case. The dismissal was upheld but the criminal complaint was however.post for the grant thereof. some of whch were brand new. now Associate Justice of this Court. 1977. however. the fiscal considers the basic rule that to successfully convict the accused the evidence must be beyond reasonable doubt and not merely substantial. Puno reversed the provincial fiscal and ordered the filing of an information for estafa against Quiambao. The NLRC merely relied on the fact that the Ministry of Justice found petitioner probably guilty of estafa. no investigation by the private respondent. he was made permanent Branch Manager. He was found to have committed certain acts in breach of the trust and confidence of his employer and was terminated. Thus this petition. Inciong Quiambao v. therefore. violation of company rules and regulations and gross negligence. the case was set for hearing in Regional Office No. On appeal by petitioner. the aforementioned order was affirmed. as was the civil case brought in the RTC of Makati. The filing of these cases. There was only a financial and performance audit conducted. On the other hand. Reynato S. while a civil case for collection was brought against him in the Regional Trial Court of Makati. The rulings in those cases were based on findings that the evidence in the criminal case was not sufficient to satisfy the requirement of proof beyond reasonable doubt but otherwise adequate to support a finding that there was substantial evidence that the employee was guilty. In contrast. That the company investigated the incident first while allowing petitioner to stay on his job pending the investigation is not only proper but in accord with fair process. Petitioner filed a complaint for illegal dismissal. That case was eventually dismissed by the RTC of Tuguegarao for failure of prosecution witnesses to testify. It was found that he brought out more than he purchased. Six months later. the Labor Arbiter found petitioner to have been illegally dismissed. As a result of further investigation petitioner was charged with estafa before the Provincial Fiscal of Tuguegarao. Petition is dismissed. in this case. After hearing. This case is to be distinguished from those cases in which it was held that the acquittal of the employee in the criminal case was not a bar to his dismissal on the ground of loss of confidence. he asked to purchase the junk of the company and signed a cash invoice. thus. who had misappropriated the money. The criminal complaint was dismissed but on appeal to the Ministry of Justice the then Deputy Minister of Justice. xii. In assessing the evidence before him. One day. xi. dismissed for insufficiency of evidence. Lacorte. SALVADOR LACORTE was hired by Asean Fabricators as a warehouseman who was tasked to receive and store raw and junk materials used by the respondent. in the case at bar. Antonio Kho. NLRC reversed the LA saying that the case was subsequently dismissed by the RTC of Tuguegarao for failure of the prosecution to prosecute. the NLRC found that the charges against him had not been substantiated. ASEAN filed a case for qualified theft against Salvador.) Criminal Cases Salvador Lacorte v. and only after having been convinced of the veracity of the reported attempt to steal. Moreover there was. NLRC Rodolfo Quiambao was hired as officer-in-charge of private respondent Central Cement Corporation’s Tuguegarao Branch. Petition is GRANTED. After private respondent's application for clearance to terminate petitioner's employment was filed on October 7. the civil suit for collection was dismissed by the RTC of Makati for failure of private respondent to prove its case. The appellate court’s dismissal of the petition for certiorari on the ground that the petitioner failed to manifest his willingness to post the said bond is. Petition is GRANTED. It defies explanation other than that it was a mere afterthought why it took petitioner so much time to prepare those two affidavits which contain nothing more than the bare allegation.) Good Faith of Employee 154 .

To discourage frivolous or dilatory appeals. An investigation was conducted on the alleged violations committed by petitioner and he was eventually terminated. Laguna. (As amended by Section 34. an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from. If made purely on questions of law. He went out again but when asked to be subjected to inspection ge shouted. 223. respondent company failed to satisfy the procedural requirements because the notices it sent to petitioner were “legally deficient in failing to notify with particularity the specific acts of violation he was being charged of”. merely reinstated in the payroll. he gets designated as Acting Salesman for respondent’s soft drinks and other beverages. Thus this peitition. NLRC found the penalty of dismissal too excessive and not proportionate to the alleged infractions committed. 1989) Art. which provides that an employer can terminate the employment of the employee concerned for “fraud or willful breach by an employee of the trust reposed in him. at the option of the employer. “Ayos na”. with the penalty of suspension. Coca-Cola Bottlers Phils Inc E. which spans almost fifteen (15) years. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. Termination of employment by reason of loss of confidence is governed by Article 282(c) of the Labor Code. awards. LA dismissed the complaint. 279. insofar as the reinstatement aspect is concerned. Court of Appeals which ruled that while there was valid cause for petitioner’s termination. At this point. the greater is his responsibility for knowledge and compliance with the norms of conduct and the code of discipline in the company. shall immediately be executory. the Commission or the Labor Arbiter shall impose reasonable penalty. In case of a judgment involving a monetary award. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or. CRUZ has been working for respondent company’s plant in Calamba. Decisions. upon the erring parties. Republic Act No. one of the security guards. In cases of regular employment. Reliefs/Remedies in Illegal Dismissal 155 . An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. Several factors militate against petitioner’s claim of good faith. petitioner drove back inside the plant on the pretext of refueling. even pending appeal. After gate inspection. or orders. In any event. Petitioner’s length of service. order or award was secured through fraud or coercion. After the required verification and confirmation of the products loaded petitioner proceeded to leave the plant vicinity. Security of tenure. inclusive of allowances. awards. March 21. the nature of petitioner’s offenses is downright inimical to the interests of respondent company. petitioner allegedly asked Aguila to load an additional thirty (30) cases of assorted canned soft drinks as “plus load”. If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter. as a driver/helper at times. Art. and petitioner merely replied. Miguel Legaspi. If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. including graft and corruption. If the decision. in his sworn statement. Moreover. it was confirmed that petitioner did not actually secure any paper for the added products nor did he follow the established procedure before taking out the extra cases. However. In all cases. He was then directed to return to the plant and unload the products. c.CORNELIO C. noticed several cases of canned soft drinks loaded at the back of the truck which he verified to be unlisted in the truck’s LOGP. including fines or censures. however. To be sure. While waiting in line to refuel. He loaded their their truck with CCBPI products. or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions. the decision of the Labor Arbiter reinstating a dismissed or separated employee. 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. and d. the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later Cruz v. Cruz filed a complaint for illegal dismissal. respondent company has presented evidence showing that petitioner has a record of other violations from as far back as 1986. Such appeal may be entertained only on any of the following grounds: a. the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. “ Ayos na”. Appeal. Aguilar attested that he reminded petitioner of whether he had secured the gate pass for the products. 6715. b. works against his favor in this case. Petition is DENIED. We have held that the longer an employee stays in the service of the company. for the first offense.” The company rules violated by petitioner are punishable.

Thus. created an agenda where the students witnessed soldiers exhibit. 156 . without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. the focal inquiry being addressed is whether or not such alleged misconduct was in connection with. NLRC with regard to illegal dismissals effected after March 21. Labor Arbiter found that petitioner was dismissed for just cause and with due process. We ruled in recent cases that an illegally dismissed employee is entitled to his full backwages from the time his compensation was withheld from him up to the time of his actual reinstatement. LA ruled that they were illegally dismissed. The legislative policy behind Republic Act No. Estanislao Ebarle received the Decision of the Labor Arbiter not on April 27. ordered Dr. the appeal not having been filed within the ten (10) day period to appeal. i.e. Records are bereft of such fact. Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of decisions. UFSWCA denied dismissing the respondents from employment. Thus this petition. Republic Act No. petitioner and they applied for loans but they founs that their SSS was not remitted. They were transferred but they continued reporting for work at the PPA office in Surigao City. 6715. Ramos to remove complainant as Elementary Guidance Counselor and she was replaced by another staff who had no experience in the school set-up. Edwin Lao is of no moment. 1989) Melody Paulino Lopez. the appeal filed by private respondents before the NLRC should not have been given due course. petitioner should not be reinstated. In general. Upon advice of the SSS. The fact remains that petitioner is not required to prove her innocence on the charges leveled against her but the burden rests upon private respondents to establish the valid cause of petitioner's termination. Requillo Willie Requillo etc. THE SC HELD that despite a finding of illegal dismissal against private respondent school. The non-submission of the original return slips is an indication that if the originals were submitted they would reveal that private respondent Jaime Amamio and Atty. i. Bustamante vs. then Guidance Counselor of the elementary department. 1989. But there may be instances as when reinstatement is not a viable remedy as where – as in this case – the relations between the employer and the employee have been so severely strained that it is not advisable to reinstate. Elementary Principal. She was soon dismissed by Letran. 1998 but on a much earlier date. the remedy for illegal dismissal is the reinstatement of the employee to his former position without loss of seniority rights and the payment of backwages. They filed a complaint for illegal dismissal. with the work of complainant as Head Psychometrician. The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties. Whether or not complainant uttered defamatory words against respondent Fr. or in relation to.) In general Lopez v. complainant was offered a sizable amount of money by respondents in exchange for her voluntary resignation. The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. NLRC - NLRC is AFFIRMED subject to the MODIFICATION that private respondents are also ordered to pay petitioner full backwages. Estanislao Ebarle show a significant difference when compared to the registry return slips addressed to PPA. NLRC ruled that there was an illegal dismissal due to absence of just cause and due process but ordered private respondents to grant petitioner separation pay in lieu of reinstatement. (As amended by Section 12. UFSWCA refused to pay their salaries for the month of June 1997 as they were considered absent without leave. they filed with the Department of Labor and Employment in Surigao del Norte complaints against UFSWCA. were security guards of the United Field Sea Watchman and Checkers Agency (UFSWCA).than ten (10) calendar days from receipt thereof. She wrote a letter to Letran College where she said that the program was a success but that some quarters had objections. Later. Hence. United Field Sea Watchman and Checkers Agency v. she couldn’t help but feel that she was being forced to resign since after the Career Orientation. March 21. NLRC agreed and deleted the awards. awards or orders. The sole issue for our resolution is whether the Court of Appeals erred in holding that petitioners’ appeal to the NLRC was filed beyond the reglementary period. CA set aside the NLRC. The registry return slips addressed to Jaime Amamio and Atty. 6715 points to " full backwages" as meaning exactly that. After that event. Mr. Moralino. They were merely transferred to other places of work.

MPSI reinstated respondents. Article 223 (3rd paragraph) of the Labor Code. The person reinstated assumes the position he had occupied prior to his dismissal. holding that there was no illegal dismissal since respondents' contracts of employment were for a fixed period. 6715. as amended by Section 12 of Republic Act (R. the present petition. 6715. Amending the Labor Code.e.A. Consistent with its stand that physical reinstatement was no longer possible. Respondents also prayed for additional backwages because they were allegedly not reinstated to their former positions or to equivalent positions. Reinstatement means restoration to the former position occupied prior to dismissal or to substantially equivalent position. The 4 respondents were employees of Marina Port Services. Labor Arbiter Bartolabac held that it was proper for MPSI to reinstate them to their former positions. MPSI asserts that it reinstated respondents to their former positions. petitioner reinstated respondents into its payroll. v. Labor Arbiter issued a Writ of Execution directing the Sheriff to effect respondent's reinstatement. provide that an order of reinstatement by the Labor Arbiter is immediately executory even pending appeal. NLRC set aside the Decision of the Labor Arbiter. Petitioner insists that the NLRC should have ordered the payment of separation pay since respondents' reinstatement to their former positions was physically impossible due to petitioner's implementation of a retrenchment program. Definition Asian Terminals Inc. However.ART. Hence.. Labor Arbiter Dinopol issued a partial writ of execution. Caparoso COMPOSITE ENTERPRISES hired EMILIO M. No. Just because their contemporaries are already occupying higher positions does not automatically entitle respondents to similar positions. NLRC modified the order of Labor Arbiter Bartolabac by deleting the award of additional backwages. The NLRC found that MPSI indeed reinstated respondents to their former positions or to substantially equivalent positions. 223. Reinstatement does not mean promotion. conditioned on the NLRC's ruling on its motion to be allowed to pay separation pay in lieu of reinstatement. CAPAROSO and JOEVE QUINDIPAN who filed a complaint for illegal dismissal upon their termination. respondents alleged that MPSI did not reinstate them to their former positions or to equivalent positions. – Decisions awards or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions awards or orders. LA found the termination to be illegal. (MPSI) and members of the Associated Workers Union of the Philippines (AWU). Promotion is based primarily on an employee’s performance during a certain period. Petition Granted. AWU president sought the dismissal from service of respondents who were expelled from AWU. Respondents filed a complaint for constructive illegal dismissal and unfair labor practice. a. Petitioner appealed ans said that it cannot reinstate respondents to their former positions since their previous positions were no longer available. or that there is an unfilled position which is substantially equivalent or of similar nature as the one previously occupied by the employee. respondents were already regular employees. Pursuant thereto. Appeals. i. respondents were regular employees and that their designation as casual rotation employees merely meant that they work on rotation. to restore the status quo in the workplace in the meantime that the issues raised and the proofs presented by the contending parties have not yet been finally resolved. Inc. and Section 2 of the NLRC Interim Rules on Appeals under R. CA dismissed the petition for petitioner's failure to present proof that its General Manager was duly authorized to sign the petition's Verification and Certification of Non-Forum Shopping. NLRC affirmed the decision which became final and executory. The right to appeal is not part of due process but a mere statutory privilege that has to be exercised only in the manner and in accordance with the provisions of law. Reinstatement is the restoration to a state or condition from which one has been removed or separated. Reinstatement means restoration to a state or condition from which one had been removed or separated. The intent of the law in making a reinstatement order immediately executory is much like a return to work order. Petition Denied. Labor Arbiter Bartolabac granted additional backwages. LA ruled in favor of the employees.A. Respondents filed a motion for contempt against AWU and MPSI for non-compliance with the partial writ of execution. Reinstatement presupposes that the previous position from which one had been removed still exists. According to MPSI. Reinstatement 1. Villanueva Composite Enterprises v. The Court of Appeals held that at the time of respondents’ illegal dismissal. 157 .) No.

hence. It is engaged in the construction business. 2. Neither party appealed from the resolution decision of the NLRC within the reglementary period. on the other hand. or abolishes the position due to the installation of labor-saving devices. which directed the reinstatement of respondents Aggrieved. Court of Appeals rendered the assailed Decision dismissing the petition and affirming the resolutions of the NLRC Hence. In this case. however. Johnson Office and Sales Union - “Private respondent. which had already become final and executory and which clearly granted petitioners the option to either reinstate respondents to their former positions or to pay the monetary award. NLRC rendered a Resolution. is a family-owned corporation managed and operated principally by Antonio Murillo. and his son.who is in severe financial strait. Labor Arbiter found Murillos guilty of illegal dismissal. viz: (1) when reasons exist which are not attributable to the fault or are beyond the control of the employer. the instant petition. Hence. Petitioners found themselves in the middle of the crossfire and were told to temporarily stop working. It did not submit its financial statements. it would be more prudent to order payment of separation pay.implements retrenchment. Petitioners filed a complaint for illegal dismissal. and assumed control of the company.). the petition is GRANTED. Inc. The NLRC ruled that the violations of company procedure committed by respondents did not constitute serious misconduct or willful disobedience warranting their dismissal. or. Inc. 2000. Labor Arbiter dismissed the complaint.” However. Hon. NLRC issued a Resolution. (b) the substantial losses apprehended must be reasonably imminent such as can be perceived objectively and in good faith by the employer. Dumarpa 158 . has suffered serious business losses. Inc. Petition DENIED. the former discharged the latter from his position as manager of Insular Builders. For retrenchment to be considered valid the following substantial requirements must be met: (a) the losses expected should be substantial and not merely de minimis in extent. 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. At the height of the feud between private respondents Antonio Murillo and Rodolfo Murillo. case law developed that where reinstatement is not feasible. At the conference petitioners reiterated their intention to satisfy respondents’ monetary award but the latter refused and insisted on their reinstatement. petitioners filed a petition for certiorari with the Court of Appeals. Exceptions Johnson and Johnson v. Ma. modifying the decision of the Labor Arbiter. Rodolfo Murillo. Jesusa Bonsol and Rizalinda Hirondo filed against petitioners Johnson & Johnson (Phils. which it sent to the Department of Labor and Employment on July 25. The Resolution dated 14 December 2001 became final and executory. It is However subject to faithful compliance with the substantive and procedural requirements laid down by law and jurisprudence. and (d) the alleged losses if already incurred and the expected imminent losses sought to be forestalled must be proved by sufficient and convincing evidence. Over the years.Payment of separation pay as a substitute for reinstatement is allowed only under exceptional circumstances. and has ceased operations -. respondents were entitled to reinstatement. and Janssen Pharmaceutica. petitioner only submitted as evidence the notice of its intention to implement a retrenchment program. (c) the retrenchment must be reasonably necessary and likely to effectively prevent the expected losses. Insular Builders. this Petition. were workers who have rendered services in various corporations of private respondents. They contended that respondents’ Motion for the Issuance of a Writ of Execution had the effect of altering the Resolution. Petitioners. petitioner sought to justify the payment of separation pay instead of reinstatement on the basis of its implementation of a retrenchment program for “serious and persistent financial difficulties. An illegally dismissed employee is entitled to reinstatement as a matter of right. father. (3) where a strained relationship exists between the employer and the dismissed employee. particularly where the illegally dismissed employee held a managerial or key position in the company. expedient or practical. (2) when the illegally dismissed employee has contracted a disease and his reinstatement will endanger the safety of his co-employees. Retrenchment: it is a management prerogative consistently recognized and affirmed by this Court. Closure of Business Retuya v. such as when the employer -.

” While it may be true that petitioners continued to work in the same place and office as in their previous employment. Under the circumstances. the respondent Bank followed up its harassment of Mr. THE RESPONDENT REPUBLIC BANK IS HEREBY DIRECTED TO IMMEDIATELY REINSTATE COMPLAINANT NORBERTO LUNA TO HIS FORMER POSITION WITHOUT LOSS OF SENIORITY RIGHTS ?????????????????????????????????????????????????????????????????????????????????????????????????? ???????? - Employee’s Unsuitability Divine Word High School v. These are distinct and separate reliefs given to alleviate the economic setback brought about by the employee’s dismissal. The other basis for dismissal insubordination appears to be likewise without justifiable ground. “Therefore.A. You have been tried. Such charge arose out of the alleged refusal of Luna to obey the order of his superior. The award of one does not bar the other. Absent any showing that its business was deliberately stopped to avoid reinstating the complaining employees. Luna by terminating his employment as Branch Manager and as trustee. The respondent bank. neither probative value nor credibility could be accorded to such minutes. upon receipt of such written explanation. Luna vehemently objected to this. Why can we not appoint a new administrator and give us a chance to do things in our way or fashion ? Luna challenged the accuracy of the stenographic notes of the said meeting on the ground that Mrs. petitioners were dismissed because of a “change of management. As shown in the above narration of events. Inc. Mr. but simply told that their services were terminated on the day they stopped working for Insular Builders. de Vera. petitioners are entitled to their full backwages. from the time their actual compensation was withheld from them up to the time of their actual reinstatement. At the meeting of the Board of Trustees of the RB Provident Fund. petitioners are entitled to separation pay. NLRC 159 . the amount of back wages shall be computed from the time of their illegal termination. The Board of Trustees. No. Respondent bank had wanted to do away with Luna even before that eventful February 12th meeting of the PF Board of Trustees. has ceased operations. the CA was correct in upholding the labor arbiter’s finding that they had been illegally dismissed. Insular Builders. WHEREFORE. Secretary of Labor Luna filed a complaint against respondent Bank. Inc.In the present case. it is equally true that they had in fact been illegally dismissed by their previous employer. and that the same was for cause. saying that the Provident Fund does not belong to the respondent bank but to the officers and employees. The minutes should have been signed by him before being officially released. NLRC. the Petition is PARTLY GRANTED. charging it with unfair labor practice committed against its president Mr. argues that Luna's union activities had nothing to do with his dismissal. Mr. Unson was not a court stenographer and her notes do not truly reflect all that transpired during the meeting. Thus. to turn over the records of the Provident Fund to the new administrator. which wants to have control of the fund so as to tie it up with the Investment Money Market Operations of the bank. The Decision of the CA is AFFIRMED with the MODIFICATION that petitioners shall be paid full back wages from the date of their dismissal until the cessation of the business operations - Economic Business Conditions Union of Supervisors v. Luna allegedly uttered the libelous remarks. Without such signature. It was during the ensuing discussion that Mr. the testimonies of witnesses who were not even under oath were taken without notice to Luna and without giving him a chance to cross-examine them. Norberto Luna. These allegations were never refuted. Having been illegally dismissed. de Vera proposed a reorganization of the fund in order to carry out the instruction of the (respondent's) Board of Directors. 6715.” They were not given any prior written notice. inclusive of allowances and other benefits or their monetary equivalent. This is evident from the words of de Vera when he said. That the respondent bank tried to maneuver Luna's ouster is evident from the way the investigation was conducted by its Committee on Personnel. who had just been appointed to fill the temporary vacancy therein. when one of its Assistant Vice-Presidents. The records indicate that reinstatement is no longer feasible. however. in accordance with R. should have referred the matter to the grievance machinery under the collective bargaining agreement. they lost their former work status and benefits in a manner violative of the law. A supplemental complaint was filed by the same petitioner with the allegation that after filing of the original complaint. "the management proposed a reorganization because it thinks that a new administration can serve the PF better. petitioners should be awarded back wages in accordance with Bustamante v.

She alleged in her complaint that she went on a vacation leave but that when she tried to report back to work she was informed that she is not anymore allowed to teach because of the "misdeeds" and "immoral acts" of her husband Pablo Catenza. CISP did not have any retirement plan for its employees. then the principal of petitioner school. An award of damages would be improper. Petitioner filed a case against CISP for illegal dismissal. as in charge of its Industrial Service Unit (ISU). Scrutiny of the records shows that petitioners were afforded every opportunity to present their evidence but they repeatedly failed to appear at the four (4) consecutive hearings scheduled for the purpose. v. NLRC promulgated its decision affirming the finding of illegal dismissal by the Labor Arbiter but modifying the rest thereof by deleting the reinstatement of petitioner for having become moot and academic considering that he (petitioner) was already 60 years old. Dr. but that of at least a majority of the respondent’s board of directors. In such situation. Pay separation pay equivalent to one month pay for every year of service. ESPEJO was hired by Cooperative Insurance System of the Philippines (CISP) as General Manager. the only limitation being that the closure must not be for the purpose of circumventing the provisions on termination of employment embodied in the Labor Code. The law recognizes as valid any retirement plan. for illegal dismissal. Court agrees with the following finding of the Labor Arbiter (which finding has also been affirmed by the NLRC). Labor Arbiter rendered a decision ordering CISP to (1) reinstate petitioner to his former position. Meris to Dr. an employee held to be illegally dismissed cannot be reinstated if he had already reached the age of sixty (60) years at the time of his second complaint (pressing for reinstatement). a notice advising him of the management’s decision to close or abolish the ISU. Board overruled petitioner’s opposition prompting the latter to tender his resignation. Petitioner objected to such sale. agreement or management policy regarding retirement at an earlier or older age.” In order to put up the needed capital requirements. NLRC EDUARDO M. Clemente for illegal dismissal. we agree with NLRC that petitioner is entitled only to backwages. Labor Arbiter held that the abolition of the ISU was a valid and lawful exercise of management prerogatives. Thus. SC sustains the challenged decision insofar as it disallowed reinstatement. NLRC AFFIRMED. there being no clear showing that complainant's husband was ever investigated or convicted of the serious act alluded to him. was not that of Director Benjamin Cruz (the complainant’s ostensible enemy) alone. Dr. Meris thus filed on September 7. - Employee’s Retirement/Overage Espejo v. Inc. of the Omnibus Rules Implementing the Labor Code provides that in the absence of a retirement plan. We hesitate ordering the reinstatement of private respondent Luz Ballano Catenza as a high school teacher in the petitioner high school. The decision to sell certain company properties. including the company car assigned to petitioner for his personal use. “cease and desist order” was issued by the Office of the Insurance Commission against CISP on grounds of “capital impairment and margin of solvency deficiency. hired Dr. Clemente). serving the educational and moral needs of its Catholic studentry. Granting that allegation is true. Board authorized the sale of some CISP properties. a high school teacher of petitioner Divine Word College. 1992 a complaint against Capitol and Dr. Hence. Dr. - Antipathy and Antagonism – Strained Relations Capitol Medical Center Inc. Thelma Navarette-Clemente (Dr. However considering that petitioner has already reached the statutory retirement age of sixty (60). A careful review and evaluation of the entire records of the case show clearly that complainant was dismissed without a valid cause. Meris Capitol Medical Center. why should his wife be made to suffer for her husband's indiscretion and infidelity. The phrase “closures or cessation of operations of establishment or undertaking” includes a partial or total closure or cessation AND That not due to serious business losses or financial reverses recognizes 160 . It held that in the exercise of Capitol’s management prerogatives. plus her backwages. Sec.Complaint filed by Luz Catenza. Cesar Meris one of its stockholders. agreement or policy an employee may be retired upon reaching the age of sixty (60) years. In the case of petitioner. The appellate court went on to hold that the ISU was not in fact abolished. ALL throughout the records of the case it is very apparent that the main reason she was dismissed was because of the alleged immoral conduct of her husband. The right to close the operation of an establishment or undertaking is explicitly recognized under the Labor Code as one of the authorized causes in terminating employment of workers. the present petition. Book IV. NLRC modified the Labor Arbiter’s decision. Meris received from Capitol’s president and chairman of the board. including the complainant’s car. 13. it had the right to close the ISU. its operation and management having merely changed hands from Dr. which is a Catholic institution. Clemente.

or prejudicial to the employee. to terminate Ranara's employment. Samaniego claims that upon his reassignment and/or transfer to Metro Manila. immediately after his transfer to Metro Manila. In constructive dismissal. Meris is thus entitled to payment of separation pay at the rate of one (1) month salary for every year of his employment. Yet they took no steps to rectify the secretary's act if it was really unauthorized. and to backwages. Capitol failed to sufficiently prove its good faith in closing the ISU. We reject as a rank falsity the private respondents' claim that the petitioner had not been illegally dismissed and in fact abandoned his work Private respondents themselves claim they have a staff of less than ten persons. A more equitable disposition would be an award of separation pay equivalent to at least one month pay. he was placed "on floating status" and was demoted in rank. If the employer cannot overcome this burden of proof. be reported for work as usual. as in the instant case. The employer must be able to show that the transfer is not unreasonable. It would indeed be stretching the intent and spirit of the law if a court were to unjustly interfere in management’s prerogative to close or cease its business operations just because said business operation or undertaking is not suffering from any loss. NLRC declared the LA’s Decision null and void. the circumstances obtaining in this case do not warrant the reinstatement of Samaniego. secretary of the other private respondent. 1989. Offer to Reinstate Ranara v. allowances and other benefits. Thinking that she was only joking. the employee’s transfer shall be tantamount to unlawful constructive dismissal. these consolidated petitions. We hold that such transfer is economically and emotionally burdensome on his part. to present sufficient and convincing evidence to support such claim of extinct demand. however. 1992 until the expiration of his term as Chief of ISU. Worse. inconvenient. NLRC Petitioner Carlos Ranara had been working as a driver with Oro Union Construction Supply when he was told by Fe Leonar. Westmont Pharmaceuticals v.CA AFFIRMED. Capitol failed. Westmont and Unilab failed to discharge this burden. and Chang or his mother could not have failed to notice Ranara's absence after November 1. a management prerogative. such as genuine business necessity. This was what happened to Samaniego. or one month pay for every year of service. however. He was transferred to Metro Manila pending investigation of his involvement in a sales discount and Rx trade-off controversy. The termination of the services of Dr. For their part. performing functions no longer supervisory in on the part of the employee that it could foreclose any choice by him except to forego his continued employment.the right of the employer to close or cease his business operations or undertaking even if he is not suffering from serious business losses or financial reverses. and full backwages from the time of his dismissal from April 30. fetching field men and doing messengerial works. It must not involve a demotion in rank or a diminution of salary and other benefits. making deposits in banks. with a fraction of at least six (6) months being considered as one(1) year. In the case at bar. its abolition or closure could be justified on other grounds like that proffered by Capitol – extinct demand. He was then placed under "floating status" and assigned to perform duties not connected with his position. However. Reinstatement. Antagonism caused a severe strain in the relationship between him and his employer. the employer has the burden of proving that the transfer of an employee is for just and valid grounds. is not feasible in case of a strained employer-employee relationship or when the work or position formerly held by the dismissed employee no longer exists. CA reinstated LA. CA affirmed. Westmont. His transfer to Metro Manila resulted in the diminution of his salary. Samaniego supra 25 3. or even his mother who was the officerin-charge during his absence. Neither can Ranara's rejection of 161 . whichever is higher (with a fraction of at least six [6 months being considered as one [1 whole year). 9 in addition to his full backwages. like fetching at the airport physicians coming from the provinces. Hence. Later. Jimmy Ting Chang. Even if the ISU were not incurring losses. Chang said he was in a hospital in Manila and that he had not authorized Leonar. he was placed on "floating status" and directed to perform functions not related to his position. He was constrained to maintain two residences. Existence of business losses is not required to justify the closure or cessation of establishment or undertaking as a ground to terminate employment of employees. Westmont and Unilab explain that his transfer is based on a sound business judgment. Unilab hired Samaniego as Professional Service Representative of its marketing arm. Dr. he is entitled to either reinstatement or separation pay if reinstatement is no longer viable. Samaniego was unceremoniously transferred from Isabela to Metro Manila. Meris not having been premised on a just or authorized cause. Unilab promoted him as Senior Business Development Associate and assigned him in Isabela as Acting District Manager of Westmont. not to come back the following day. Ricardo Samaniego then filed a complaint for illegal dismissal with the LA who ordered his reinstatement and payment of his full backwages.

Ranara would have found it uncomfortable to continue working under the hostile eyes of the employer who had been forced to reinstate him. Article 279 of the Labor Code. Effect of Failure Order Aurora Land etc v. Private respondent. who was then already sixty-two (62) years old. payment of separation pay is intended to provide the employee money during the period in which he will be looking for another employment. and implies wrongful intent and not mere error of judgment. Santos Carmelita Santos. In termination of employment disputes that the burden of proof is always on the employer to prove that the dismissal was for a just and valid cause. As a just cause for termination. Petition is partly GRANTED. disobedience. Ostensibly. an illegally dismissed employee is entitled to (1) either reinstatement. In the instant case. 1991 under the petitioners. if viable. Payment of backwages is specifically designed to restore an employee's income that was lost because of his unjust dismissal. The fact that his employer later made an offer to re-employ him did not cure the vice of his earlier arbitrary dismissal. Michaels Institution v. separation pay is awarded to the employee. willful in character. filed a complaint for illegal dismissal with the Labor Arbiter. must be willful or intentional. Backwages 1. that private respondent Dagui is a job contractor has been disbelieved by the Labor Arbiter and NLRC. They are separate and distinct from each other. and then from 1982 up to June 8. On the other hand. b. or separation pay if reinstatement is no longer viable. The Court." on the alleged ground that his work was unsatisfactory. The wrong had been committed and the harm done. so to speak. as in this case. Upon the death of Doña Aurora Tanjangco in 1982. The award of separation pay is in lieu of reinstatement and not of backwages. evidence is wanting on the depravity of conduct. for a total of twenty-nine (29) and nine (9) years respectively. In other words. beginning 1953 until 1982. The dismissal meted out on the respondents for dereliction of duty for one school day and denouncing school authority.00 a day (latest salary). Honorio Dagui earns a measly sum of P180. mandates that 162 . Michael’s Institute. and by no stretch of the imagination can Dagui qualify as a job contractor. Florencio Magcamit and Albert Rosarda were regular classroom teachers and Their service with the school was abruptly interrupted when each of them was served a notice of termination of employment stemming from a public rally held at the town plaza aimed at calling the attention of the school administration to certain grievances relative to substandard school facilities and the economic demands of teachers and other employees of St.” We do not agree. Quazon suddenly told him: "Wala ka nang trabaho mula ngayon. In the event that reinstatement is no longer possible. Dagui was hired by Doña Aurora Suntay Tanjangco in 1953 to take charge of the maintenance and repair of the Tanjangco apartments and residential buildings. the appellate court “unwittingly reversed a time-honored doctrine that a party who has not appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the appealed decision. without more. There would be a certain degree of anonymity. Private respondent Dagui should likewise be considered a regular employee by the mere fact that he rendered service for the Tanjangcos for more than one year. her daughter. The bare allegation of petitioners. that is.It was not as if Ranara were only one among many other complainants ordered reinstated in a big company.Chang's offer to reinstate him be legally regarded as an abandonment because the petitioner had been placed in an untenable situation that left him with no other choice. It must be remembered that backwages and reinstatement are two reliefs that should be given to an illegally dismissed employee. the misconduct must be serious. No backwages were awarded. On the matter of the award of backwages. petitioners advance the view that by awarding backwages. and a resultant immunity from retaliation It is clear that the petitioner was illegally dismissed without even the politeness of a proper notice. however. Mrs. appears to be too harsh a penalty. NLRC is AFFIRMED. On the other hand. a dereliction of duty. as amended. took over the administration of all the Tanjangco properties. for whatever enmity the employer might harbor against them would be diluted and less personalized. NLRC St. under Doña Aurora. and (2) backwages. and willfulness of the disobedience on the part of the respondents. Given again the smallness of the private respondents' staff. is bewildered why only an award for separation pay in lieu of reinstatement was made by both the Labor Arbiter and the NLRC. as a just cause for termination. Misconduct is the transgression of some established and definite rule of action. a forbidden act. Evidence must be clear. petitioner Teresita Tanjangco Quazon.

if reinstatement is no longer viable. Computation Mercury Drug Co. and (b) backwages. THE PETITION IS HEREBY DISMISSED AND PETITIONERS ARE HEREBY DIRECTED: (1) TO PAY PRIVATE RESPONDENT NARDO DAYAO BACK WAGES EQUIVALENT TO ONE YEAR. he should not be compelled to reinstate an employee who is no longer physically fit for the job from which he was illegally ousted. Itogon-Suyoc Mines. the employee whose services are terminated for just cause is not entitled to termination pay. To be deducted from the backwages accruing to each of the laborers to be reinstated is the total amount of earnings obtained by him from other employment Second. Inc. then as checker and was last promoted to the position of assistant chief checker in the checking department. Dayao in vain urged herein petitioners to pay them overtime pay. Petition is hereby DENIED. Nardo Dayao was employed by the petitioners originally as driver. The first labor relations law governing the award of backwages was Republic Act No. Mercury Drug Co. approved on 17 June 1953. 2. Inc v. thus: "First. 1052. (2) TO REINSTATE HIM AFTER CERTIFICATION OF HIS PHYSICAL FITNESS BY A GOVERNMENT PHYSICIAN. Both are distinct reliefs given to alleviate the economic damage suffered by an illegally dismissed employee and. Hearing of Dayao's union activities company told him to resign and persuaded him to accept the amount of P562. The period of delay in instituting this ULP charge with claim for reinstatement and back wages. employees' association for failing to protect the welfare of the employees by not securing such additional compensation for overtime. the Industrial Peace Act. then there was no reason for petitioners-employers to give him termination pay. and fifteen days without further disqualifications. Justice Teehankee opined that: "… an award of back wages equivalent to three 163 . account should be taken of whether in the exercise of due diligence respondents might have obtained income from suitable remunerative employment. WHEREFORE. . in mitigation of the damages that the dismissed respondents are entitled to. Unfair labor practice charge with the prayer for reinstatement with back wages should be filed within a reasonable period of time. But laches. like estoppel. AND (3) TO PAY THE COSTS. 11 months and 15 days which represented the remainder of the prescriptive period after deducting the period corresponding to the delay incurred by the employee in filing the complaint for unfair labor practice and reinstatement. Inc. Finally. criticized their. should be deducted from the liability of the employer to him for back wages.In fairness to the employer. the award of one does not bar the other. later assigned as delivery man. Sañgilo-Itogon Workers' Union. AND FIFTEEN DAYS. because under the Termination Pay Law. NLRC The decision of the Labor Arbiter dated 26 April 1991 is AFFIRMED with the modification that backwages shall be paid to petitioners. v.. et al. CIR Bustamante v. However. v. should also be alleged as a defense in the answer. if the dismissal of herein private respondent Dayao was for just cause. Both reliefs are rights granted by substantive law which cannot be defeated by mere procedural lapses. ELEVEN MONTHS. Exactly two years and fifteen days from his separation on April 10. et al. although within the prescriptive period. eleven months. The remaining question is how much back wages shall be allowed private respondent Dayao. 875. thus.an illegally dismissed employee is entitled to the twin reliefs of (a) either reinstatement or separation pay. 1787. the lapse of two years and 15 days from the dismissal from the service to the filing of the ULP charge is not an unreasonable period of time under the circumstances.50 as termination pay and to sign a clearance stating to the effect that he has no claims whatsoever of any kind and nature against herein petitioners. Likewise. otherwise the same is considered renounced. otherwise known as Republic Act No. this Court restated the guidelines for deternination of total backwages. as amended by Republic Act No.: Justice Teehankee dissented from the majority view that the employee in said case should be awarded backwages only for a period of 1 year. From this ruling came the burden of disposing of an illegal dismissal case on its merits of determining whether or not the computation of the award of backwages is correct. and campaigned among his co-employees to organize another labor union.. CIR. Dayao filed a complaint for unfair labor practice against herein petitioners for dismissing him because of his having campaigned among his coemployees to become members of a new labor union that he was then organizing. 1961.The employer in the case at bar should be directed to pay private respondent Dayao back wages equivalent to one year.

Security of Tenure. Petitioner. Act No. computed from the time the employee’s compensation was withheld from him up to the time of his supposed actual reinstatement. Jr. The Court agrees with the analysis and conclusion of the CA that. Complainants in this case worked in respondents’ paper manufacturing business in various capacities as machine operator.e. They were instructed by the company to receive a Memorandum of Transfer which they refused. and such transfer is not unreasonable. Peititon Denied. inclusive of allowances. 442 Art 279. The computation of full backwages. even if the death is caused by a fortuitous event 164 . 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. a closer adherence to the legislative policy behind Rep. respondents were constructively dismissed. and other benefits or their monetary equivalent. in addition to full backwages. . should be computed from the time the respondents’ compensation was withheld from them up to the time of the finality of this decision. subject to deduction where there are aggravating circumstances (e. 6715 points to "full backwages" as meaning exactly that.D. failed to sufficiently prove that respondents’ transfer is for a just and valid cause.years (where the case is not terminated sooner) should serve as the base figure for such awards without deduction. Surigao del Sur. Such refusal prompted Florentina to institute an action seeking indemnity. strained relationships. bookbinding head and/or helper. M/V David. without deducting from backwages the earnings derived elsewhere. The effectivity of P. On 21 march 1989 Republic Act No. 279. The vessel encountered rough seas and strong winds while traversing the waters of Lianga Bay. Thus. it is the employer who bears the burden of proving that the transfer of an employee is for just and valid grounds. the more equitable disposition would be an award of separation pay equivalent to at least one month pay. No. since payment of backwages and separation pay were ordered only upon promulgation of the CA Decision. the Court has ruled in a long line of cases that where an employee would have been entitled to reinstatement with full backwages. They claimed that. whichever is higher. they were subjected to acts of harassment. Florantina Sugata-On Candano Shipping hired Melquiades Sugata-on was employed by Candano Shipping as Third Marine Engineer.D. i. . It must be stressed that where an employee complains of constructive dismissal. The combined circumstances of the immediate transfer of respondents to far-off provinces after their refusal to sign the signature sheet of the document for the ratification of the Addendum to the Collective Bargaining Agreement point to the fact that the transfers are motivated by ill-will on the part of petitioner. therefore. 6715 took effect amending the Labor Code. based on the facts of the case." (underscoring supplied) An illegally dismissed employee is entitled to his full backwages from the time his compensation was withheld from him (which as a rule. Star Paper Corporation v.e. inconvenient. but circumstances. inclusive of allowances. i. Espiritu Candano Shipping Lines Inc v. such as genuine business necessity. or one month pay for every year of service. Florentina immediately went to the office of Candano Shipping in Manila to claim the death benefits of her husband but it refused to pay. is from the time of his illegal dismissal) up to the time of his actual reinstatement. An employee who unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. which imposes upon the employer liability for the death of his employee in the course of employment. oppression or dilatory appeals) on the employer's part. Petition is DENIED. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the "deduction of earnings elsewhere" rule. makes reinstatement impossible. . Upon learning of Melquiades’ fate. 442 by limiting the award of backwages to three (3) years.g. Article 279 thereof states in part: "ART. sank together with her cargo at around eleven o’clock in the evening. for refusal to sign for the ratification of an addendum to an existing Collective Bargaining Agreement which was intended to effect a reduction in their leave benefits of fifteen (15) days for every year of service. In this case. and other benefits or their monetary equivalent.. She grounded her case on the provision of Article 1711 of the New Civil Code. or prejudicial to the employee.. the Court enforced the Mercury Drug rule and in effect qualified the provision under P. causing her to tilt. The clear legislative intent of the amendment in Rep. Act No.

Although several telegrams were sent to private respondent Gonzales. Pangasinan. Petition is DENIED. as previously discussed. NLRC reversed that of the Labor Arbiter. In the case at bar. the common carrier was made liable for the death of its passenger on board a passenger bus owned and operated by Villa Rey Transit. after Candano Shipping refused to compensate her husband’s death. only the award of actual damages. 279 SECURITY OF TENURE. NLRC ii.) Damages and Attorney’s fees 165 . the records do not show compliance by petitioners with the two (2)-notice rule prescribed in the above provision of law. In the present case. Life expectancy is determined in accordance with the formula: 2 / 3 x [80 – age of deceased at the time of death] Life expectancy = 2 / 3 x [80 – age of deceased at the time of death] 2 /3 x [80 – 56] 2 / 3 x [24] Life expectancy = 16 The argument raised by Candano Shipping that the formula for determining the life expectancy under Villa Rey cannot be automatically applied without proof of the basis for the expected length of life of a Filipino does not merit our consideration. Angerbauer. 1998 a complaint against Acesite for illegal dismissal. going to Manila from Lingayen. perhaps also too presumptuous in thinking that the telegrams ordering the latter to report for work were all received on time. Court affirms the assailed decision.reasonable and necessary living expenses). finding that Gonzales was illegally dismissed. Philex Mining Company: employee cannot pursue both remedies simultaneously but has the option to proceed by interposing one remedy and waiving his right over the other. – In cases of regular employment. Candano Shipping cannot validly assert that the standard life expectancy factor laid down in Villa Rey cannot be applied in this case. Court of Appeals. As to the deletion of the “fringe benefits or their monetary equivalent. the employer shall not terminate the services of an employee except for just cause or when authorized by this Title. The formula for the computation of unearned income is: Net Earning Capacity = life expectancy x (gross annual income . In Villa Rey. (Emphasis and underscoring supplied). by Decision of February 7. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. In the case at bar. specifically the award for unearned income is warranted by the circumstances since it has been duly proven that the cause of death of Melquiades is a fortuitous event for which Candano Shipping cannot be faulted. there is not one (1) telegram Moreover. Gonzales was hired on October 18.RTC resolved the controversy in favor of Florentina and ratiocinated that the provision of Article 391 of the New Civil Code on presumptive death had become operative since the period of four years had already elapsed since Melquiades was reported missing Appellate court applied the standard prescribed by Article 194 of the Labor Code of the Philippines Hence.” this Court agrees with Gonzales that it is not in accord with law and jurisprudence. 1993 as Chief of Security of Manila Pavillion Hotel. 3. Fringe Benefits  Acesite Corp. bad faith or malice was not proven. this instant Petition Floresca v. v. In the same breadth. The obligation of the common carrier to indemnify its passenger or his heirs for injury or death arose from the contract of carriage entered into by the common carrier and the passenger. Article 279 of the Labor Code provides: ART. affirmed with modification the NLRC decision. drawing him to hastily conclude that Gonzales intentionally disobeyed the orders contained therein. like Gonzales. Labor Arbiter. acting on behalf of Acesite. In the case at bar. Inc. 1998. As we have explained in Floresca. Leo A. thereby using up all leaves that he was entitled for the year. dismissed the complaint. Angerbauer issued the following Notice of Termination[10] through an inter-office memo: Gonzales thus filed on May 27. the employer shall be liable for the death or personal injury of its employees in the course of employment as sanctioned by Article 1711 of the New Civil Code. It appears that on May 7. was. inclusive of allowances. Florentina was forced to institute a civil suit for indemnity under the New Civil Code. 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. 2000. this doctrinal rule is rooted on the theory that the basis of the compensation under the Workmen’s Compensation Act is separate and distinct from the award of damages under the Civil Code. Gonzales took a 4-day sick leave and took emergency leave he again took a 12-day vacation leave.

the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered… The afore-quoted Article 111 is an exception to the declared policy of strict construction in the awarding of attorney’s fees. Respondents even offered to pay petitioner separation pay. LA held the termination to be legal. Pedrito demanded PhilMalay for separation payment similar to its employees as well as for underpayment of salary. Also. As for the punching in of the time card. it must be proven that the complainant suffered anxiety. 7 thereof which pertains to actions for recovery of wages. Exemplary damages may be awarded only if the act was done in a wanton. separation pay must be included in the basis for the computation of attorney’s fees. or malevolent manner. 111. what was withheld from petitioner was not only his salary. Also. office rentals and legal service costs he incurred. In the case at bar. The instances where these may be awarded are those enumerated in Article 2208 of the Civil Code. decision by Labor Arbiter and Memorandul of Appeal. the employee’s welfare should be the primordial and paramount consideration. the plant manager. Court of Appeals should have reconsidered its dismissal of petitioner’s appeal after petitioner submitted a certified true copy of the MeTC’s decision. this is a violation of company rules but is not SERIOUS misconduct. That she failed to report the sexual harassment right away is of no matter. The company placed her under preventive suspension. Thus this petition. Elcee Farms entered into a Lease Agreement with Garnele Aqua Culture Corporation (Garnele). NLRC 166 . His appeal was dismissed by CA for failure to attach position paper. The LA claimed that the retrenchment of PhilM is valid. but also his separation pay. there is no basis in awarding moral and exemplary damages. Hence. The extraordinary concept of attorney’s fees is the one contemplated in Article 111 of the Labor Code. or where it is oppressive to labor. Attorney’s fees. For moral damages. for the loss of money to be deposited and for asking a co-employee to punch in her time card making it appear she was in the office earlier than her actual time to arrive. or public policy. NLRC  Reyes v. There need only be a showing that the lawful wages were not paid accordingly. specifically par. NLRC affirmed. She filed a complaint for illegal dismissal. vacation and sick leave pay. there need not be any showing that the employer acted maliciously or in bad faith when it withheld the wages. Moral damages are recoverable only where the act complained of is tainted by bad faith or fraud. It was clear from the petition for review that the RTC incurred serious errors in awarding damages to private respondents which were made without evidence to support the award and without any explanation… In the same vein. NLRC reduced the awards. Petition is GRANTED. and is payable not to the lawyer but to the client. – (a) In cases of unlawful withholding of wages. the other offenses are not connected to her duties as a company nurse. inasmuch as respondents were not shown to have acted in bad faith in initially refusing to award separation pay equivalent to 1 month salary for every year of service. sleepless nights. it must be serious. was not done in the performance of her duties.A memorandum was issued to Rosalinda Cortez. oppressive. and 13th month pay differential. Petitioner is entitled to attorney’s fees equivalent to 10% of his total monetary award. NLRC reversed and found her the victim of illegal dismissal. the company nurse.  Philippine Aeolus Auto-Motive United Corp v. relate to the performance of the employee’s duties and must show that the employee has become unfit to continue working for the employer. For exemplary damages are granted by way of example or correction for the public good. good customs. pursuant to current jurisprudence. as in this case. and done in a manner contrary to morals. In its extraordinary concept. albeit in an amount not acceptable to petitioner. it was found that Chua has been continually harassing her since her first year at work.  Elcee Farms v. Her dismissal even her 30 day suspension was not found by the court to be commensurate to her offense. life insurance policy. unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part thereof. requiring her to explain why no disciplinary action should be taken against her for throwing a stapler at William Chua. Although an express finding of facts and law is still necessary to prove the merit of the award. CA Dr. None of these circumstances exist in the present case. In carrying out and interpreting the Labor Code's provisions and its implementing regulations. The throwing of a stapler though serious misconduct. She was terminated from services. attorney’s fees are deemed indemnity for damages ordered by the court to be paid by the losing party in a litigation. The court held that for misconduct or improper behavior to be a just cause for dismissal. which provides: Art. besmirched reputation and social humiliation. a new car.

The contract of lease executed between Garnele and HILLA stipulated the continued employment of 120 of the former employees by the latter. SM Food Court Manager banned the two from working within the SM Food Court’s premises. iii. it leased the hacienda to HILLA. as provided by the Labor Code. the private respondents were terminated by HILLA. Petition is GRANTED. Separation pay therefore. The NLRC ruled that the simulation of the lease agreement between Elcee Farms and Garnele was made in bad faith and thus the award of damages isjustifed. they will be considered as new employees. and again when the hacienda was leased to Daniel Hilado. and may be accordingly awarded provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct. Elcee continued to act as the employer of the farm workers of Hacienda Trinidad. Bad faith on the part of Elcee Farms is shown by the act of simulating a lease agreement with Garnele in order to evade paying private respondents the proper amount of separation benefits based on the number of years they worked in the hacienda. NLRC affirmed. NLRC: The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. Thus. when respondent rushed toward Ma. whether new or employed in the past. but although they were absorbed by the new management of the hacienda.) Separation Pay  Ha Yuan Restaurant v. However. Sugar Agricultural Industrial Labor Organization (SAILO). Records show that Elcee Farms did not pay any separation benefits to the private respondents when they allegedly leased the hacienda to Garnele.Garnele sub-leased Hacienda Trinidad to Daniel Hilado. the petition should be granted. good customs or public policy. moral damages are recoverable when the dismissal of an employee is attended by bad faith or fraud or constitutes an act oppressive to labor. NLRC 167 . NLRC that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. The lease agreement between Garnele and Daniel Hilado identified the employees who will continue working with the new management and stipulated that workers who were not in the list. Teresa Sumalague and hit the latter on the face causing injuries and resulting in a scuffle between the two. but the contract was silent as to the benefits which may accrue to the employees Soon after HILLA took over it entered into a CBA with another union and due to their refusal to join the labor union. are recoverable when the dismissal was done in a wanton. the court held that. Exemplary damages. separation pay should not have been awarded to her. vs. who operated HILLA. vs. Labor Arbiter dismissed their claim for damages and denied all claims. Respondent’s co-worker Sumalague was eating at the back of the store. (modification: Corazon Saguemuller should not be held subsidiarily liable) Juvy Soria worked as a cashier in petitioner’s establishment located inside the SM Food Court Makati. and (3) HILLA filed their own Motions for Reconsideration. (2) Elcee Farms and Corazon Saguemuller. filed this complaint for illegal dismissal. Petition is partially granted and the awards of damages and separation pay are given. represented by their labor union. As further stated in Philippine Long Distance Telephone Co. they were not pacified. oppressive. herein petition The court held in Philippine Long Distance Telephone Co. on the other hand. After the said lease was executed. They were brought to the SM Food Court Administration Office and then to the Customer Relations Office for further investigation. Elcee Farms effectively ceased to operate and manage Hacienda Trinidad when. or is done in a manner contrary to good morals. Social justice cannot be permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment of the guilty. or (2) the dismissal reflected on the employee’s moral character. Hence. Thus this Petition for Certiorari. Despite the intervention of their supervisor Fiderlie Recide.Her cause of dismissal amounting to a serious misconduct. Pampelo Semillano and one hundred forty-three (143) other complainants. The Court holds that respondent’s cause of dismissal in this case amounts as a serious misconduct and as such. there was a cessation of operations of Elcee Farms. Respondent then filed with the Labor Arbiter a complaint for illegal dismissal LA dismissed case. or malevolent manner. the employer-employee relationship between the farm employees and Elcee Farms was severed. Clearly. CA affirmed NLRC. The court held that the above findings show that even after the execution of the lease agreement between Elcee and Garnele. will not be employed by the lessee. The three sets of parties (1) the complainants. through Garnele. Complainants appealed and NLRC affirmed the amount awarded by the Labor Arbiter as separation pay and allowed their petition for damages for disturbance of their right to labor. in the absence of any showing that the latter has assumed the responsibilities of the former employer. respondent is not entitled to an award of separation pay. depends on the cause of dismissal.

Records show that due to business losses. Instead. She failed to present evidence to contradict their statements. we affirmed with modification the Decision dated October 20. The voluntariness of her retirement is attested and confirmed by top ranking officials of petitioner. she could have been duped into signing a retirement letter against her will. 2006. alleging that she signed the same under duress and intimidation. Petitioners anchored their motion for partial reconsideration on our recent Decision in Domondon v. and reinstatement.  Amkor Technology Philippine Inc. Book VI of the Omnibus Rules Implementing the Labor Code provides that when the employee is dismissed for any of the just causes under Article 282 of the Labor Code. the Court of Appeals found that respondent was coerced to retire.company then present during the meeting in October 2001. Separation pay should not be awarded. Juanco  Central Pangasinan Electric Cooperative v. Thereafter. she returned to the company to sign the Receipt and Release Waiver and Quit Claim and to receive her retirement package. petition is GRANTED - Backwages and Separation Pay. However. Distinct Reliefs  Triad Security and Allied Services v. (2) dishonest or unauthorized activity whether for personal gain or not. Thereafter. Cagampan was found guilty of violating CENPELCO’s Code of Ethics and Discipline. She also requested the immediate installation of the transformer. We upheld the appellate court’s ruling that respondent is entitled to separation pay. was illegally dismissed. Inc. She claimed that she was threatened that she will receive nothing if she will not sign it. does not call for such award of benefits. Bonifacio informed CENPELCO’s General Manager Salvador de Guzman of the said transaction and that Cagampan did not issue a receipt for the partial payment made. Separation pay in such case is granted to stand as a “measure of social justice. It is highly improbable that with her employment stature and educational attainment. Cagampan filed a complaint for illegal dismissal.It is safe to conclude that such retirement package was the reason why she opted to retire. He was dismissed from service. Section 7. Respondent received her retrenchment backwage a week after she submitted her resignation paper. she looked for employment in other companies. Respondent denied the due execution of her Release Quitclaim and Waiver. On the other hand. since his violation reflects a regrettable lack of loyalty and worse. (CENPELCO).In our Decision of September 20. National Labor Relations Commission The NLRC.” If the cause for the termination of employment cannot be considered as one of mere inefficiency or incompetence but an act that constitutes an utter disregard for the interest of the employer or a palpable breach of trust in him. Although long years of service might generally be considered for the award of separation benefits or some form of financial assistance to mitigate the effects of termination The fact that private respondent served petitioner for more than twenty years with no negative record prior to his dismissal. namely: (1) unauthorized acceptance of payments for new connection. in our view of this case. Ortega 168 . Respondent is a well-educated woman holding a managerial position. Juangco.831 from Aurora B. we deleted the awards for moral and exemplary damages for lack of basis. petitioner-company saw the need to reduce its existing manpower complement. at issue in this case is the propriety of the award of separation pay to private respondent.It is thus clear that the filing of the complaint was merely an afterthought when she failed to find another employment. relying on the affidavits of the officers of petitioner-company. respondent. and (3) defrauding others by using the name of the company. praying for payment of backwages and damages. found that respondent was not coerced into signing the notice of voluntary retirement. We GRANT petitioner’s Motion for Partial Reconsideration and RECONSIDER our Decision. he shall not be entitled to termination pay Separation pay shall be allowed only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. backwages and other privileges and benefits. Cagampan received a check amounting to P100. Bonifacio as partial payment for the installation of a transformer in her building and expansion of a threephase line. 2004 of the Court of Appeals finding that Nory A. We find for petitioner. NLRC Lito Cagampan was the Acting Power Use Coordinator of petitioner Central Pangasinan Electric Cooperative. v. Several meetings were held among its officers and department heads to discuss actions to be taken to implement the same. Rule I. Cagampan was directed to explain in writing why he should not be disciplined or dismissed for the unauthorized acceptance of payments for new electrical connections. betrayal of the company. She had ample time to mull over what courses of action to take if indeed she was illegally dismissed. the grant by the Court of separation benefits is hardly justifiable.

Skippers failed to overcome the burden of proof tasked upon it in proving that the dismissal has a just cause. but a form of indemnity for the worker who was illegally dismissed. valid or authorized cause as defined by law or contract. whichever is less. Bulgaria and repatriated to the Philippines. They posit the argument that with respondents’ receipt of their separation pay. through its recruitment and manning agency. However. the Chief Engineer. 8042 provides for the award of money claims in cases of illegal dismissals. Labor Arbiter issued an alias writ of execution commanding the sheriff to collect from petitioners the amount of six hundred three thousand seven hundred ninety-four and seventy-seven centavos (P603. They were also made to render services everyday for 12 hours but were not paid the requisite overtime pay. 8042.. Hence. states: ART. The Labor Arbiter may have mislabeled it as separation pay.Respondents Silvestre Ortega. respondents had already found new employments and to award them further backwages would be tantamount to unjust enrichment. they were receiving compensation which was below the minimum wage fixed by law. Thus this Petition. In case of termination of overseas employment without just. NLRC and CA affirmed the LA. the court held that a seafarer is not a regular employee as defined in Article 280 of the Labor Code. had already been fully satisfied. S. with regard to the monetary claims of the respondent.77) representing the unsatisfied balance of the judgment award. the Rules and Regulations Governing Overseas Employment. separation pay is granted where reinstatement is no longer feasible because of strained relations between the employee and the employer. Labor Arbiter found that respondent was illegally dismissed. The reason was that the Report cannot be given any probative value as it is uncorroborated by other evidence and that it is merely hearsay. in the interest of substantial justice. Section 10 of R. The court held that as all three tribunals found. respondent filed a complaint for illegal dismissal. is not an award of backwages or separation pay. Notwithstanding this procedural defect committed by petitioners.794. Martin Callueng. whichever is less. or the Migrant Workers and Overseas Filipinos Act of 1995. we shall proceed to resolve the other issues presented by petitioners.  Skippers United Pacific v. based purely on hearsay. the Report cannot be given any weight or credibility because it is uncorroborated. The award of salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term. As the law now stands. thus: Section 10. The term of the contract was for one year. and Isagani Capila were formerly employed by petitioner Triad Security as security guards. Given the foregoing. an illegally dismissed employee is entitled to two reliefs. Seafarers are contractual employees whose rights and obligations are governed primarily by the POEA Standard Employment Contract for Filipino Seamen. therefore. Jr.) No. the worker shall be entitled to the full reimbursement of his placement fee with interest at twelve percent (12%) per annum.A. we hold that the Court of Appeals correctly dismissed the petition for certiorari brought before it. Gervacio Rosaroso was signed up as a Third Engineer with Nicolakis Shipping.A. premises considered. These are separate and distinct from each other. herein petitioner Skippers United Pacific. 279.A. Article 279 of the Labor Code. Backwages and separation pay are. namely: backwages and reinstatement. this Court AFFIRMS the Decision of the Court of Appeals dated 31 July 2003 and the Order dated 23 April 2003 of the Labor Arbiter declaring petitioners liable for additional accrued backwages. distinct reliefs granted to one who was illegally dismissed from employment. not giving credence to the telexed Chief Engineer’s Report saying that Rosaroso was slacking in his duties and was unwilling to help with the repairs. who did not have any personal knowledge of the events reported therein. inclusive of allowances. Petitioners insist that their monetary obligation. they had opted not to seek reinstatement to their former jobs and elected instead to sever their employment with petitioner Triad Security. 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. Ariel Alvaro. according to petitioners. Money Claims. as contained in the 28 February 2000 decision of the labor arbiter. WHEREFORE. Barely a month after boarding the vessel M/V Naval Gent respondent was ordered to disembark in Varna. as amended. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages. during the time that they were in the employ of petitioners. SECURITY OF TENURE In cases of regular employment the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. he is not entitled to full backwages and separation pay in lieu of reinstatement as provided in Article 279. and obviously merely an afterthought. Richard Sevillano. having come from a source. the award was made in conformity with law. NLRC supra 27 169 . In fact. by Republic Act (R. Finally. and. Immediately after arriving in the Philippines. nonetheless. more importantly. Respondents filed a complaint against petitioners According to respondents.

the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service. The court took judicial notice of the fact that the nature of his job as a salesman 170 . a.00 and US$186. CA affirmed with the modifications that monetary awards of US$2." (Labor Code.NLRC AFFIRMED. 283. barely two and a half months later. redundancy. However. petitioners' right to terminate employees on account of retrenchment to prevent losses or closure of business operations. in the guise of exercising management prerogatives. collective bargaining agreements. or general principles of fair play and justice (UST vs.400. In case of retrenchment of a company to prevent losses and closure of business operation. Article 283 of the Labor Code. the court held that commission is not part of the basic salary. Inc.) Undoubtedly. Zuelig M. by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. some plant employees.Petition Denied. as amended. retrenchment to prevent losses or the closing or cessation of operations of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title. NLRC as the prevailing doctrine wherein it said that “computation of backwages and separation pay should include transportation and emergency living allowances. A fraction of at least six (6) months shall be considered one (1) whole year. v. At the conciliation proceedings before Labor Arbiter Manuel P. Cipres and Manuel on the ground of retrenchment. NLRC. NLRC supra F.” As for commissions. but it may not pay separation benefits unequally for such discrimination breeds resentment and ill-will among those who have been treated less generously than others. The respondent argued that the giving of more separation benefit to the second and third batches of employees separated was their expression of gratitude and benevolence to the remaining employees who have tried to save and make the company viable in the remaining days of operations. contended that they are no longer contesting their dismissal but rather wanted to receive separation pay including the commissions. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking nut due to serious business losses or financial reverses. The law requires the granting of the same amount of separation benefits to the affected employees in any of the cases. while the remaining employees were granted higher "separation" benefits because their termination was on account of the closure of the business. NLRC  Songco v. In case of termination due to the installation of labor saving devices or redundancy. LA excluded the commissions and NLRC dismissed the appeal. Closure of establishment and reduction of personnel. grant greater benefits to some and less to others. The law requires an employer to extend equal treatment to its employees. Hence this petition. allowances etc which they receive every month. filed with DOLE an application to terminate Jose Songco. 190 SCRA 758). including the private respondents. Businessday Information Systems due to financial reverses. whichever is higher. Asuncion.-The employer may also terminate the employment of any employee due to the installation of labor saving devices. these remaining employees were likewise discharged because the company decided to cease business operations altogether. were laid off. whichever is higher.E. the court used Santos v.69 made by the Labor Arbiter in its Decision should be payable in its equivalent in Philippine currency computed at the prevailing rate of exchange at the time of payment. is recognized by law. the purpose of the separation pay will not be satisfied. the law provides: Art. NLRC. protects workers whose employment is terminated because of closure of the establishment or reduction of personnel (Abella vs. Management prerogatives are not absolute prerogatives but are subject to legal limits. 145). Computation/Rationale  Business Day Information Systems and Services Inc. the separation pay shall be equivalent to one (1) month pay or at least one half (1/2) month pay for every year of service. BSSI retained some employees in an attempt to rehabilitate its business as a trading company. It may not. 152 SCRA 141. For allowances. petitioners denied that there was unlawful discrimination in the payment of separation benefits to the employees. The court held that the purpose of separation pay is to alleviate the difficulties which confront the dismissed employee (thrown to the streets to face the harsh necessities of life) and in adopting the general rule that commissions aren’t part of the basic salary of salesmen. The petitioners opposed this claiming that the company is not suffering from any losses but later on. They argued that the first batch of employees was paid "retrenchment" benefits mandated by law. emphasis supplied.

CIR (56 SCRA 694) as aptly cited in the decision of the Labor Arbiter. He figured in an accident and was initially confined at the Figueroa Emergency Hospital. There is no doubt it is compassionate to give separation pay to a salesman if he is dismissed for his inability to fill his quota but surely he does not deserve such generosity if his offense is misappropriation of the receipts of his sales. is not depraved. Upon his discharge from the hospital private respondent was fetched by his immediate supervisor However. private respondent. Petition is DISMISSED for lack of merit. especially to labor. This being so. Javate iv. rely on allowances or commissions. and to justify the helping hand to the validly dismissed employee whatever the reason for his dismissal. Bulacan. the situation is changed completely. as it were. even assuming arguendo that private respondent indeed received his retirement benefits. We hold that henceforth separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Private respondent vehemently denied this contention. he suddenly found himself jobless with a family of eight (8) children to support. have the effect. But if he was in fact not really sleeping but sleeping with a prostitute during his tour of duty and in the company premises.00 in consideration of her promise to facilitate approval of their applications for telephone installation. was accused by two complainants of having demanded and received from them the total amount of P3. The policy of social justice is not intended to countenance wrongdoing simply because it is committed by the underprivileged. to make it fair to both labor and management. the generosity of the law must be more discerning. At best it may mitigate the penalty but it certainly will not condone the offense 171 . This is not only inefficiency but immorality and the grant of separation pay would be entirely unjustified. A contrary rule would. Petition is Granted. A security guard found sleeping on the job is doubtless subject to dismissal but may be allowed separation pay since his conduct. The Court feels that distinctions are in order. NLRC: The contention of respondents that petitioner is barred from contesting the illegality of his dismissal since he has already received his separation pay cannot be sustained. to prevent his being declared absent without leave.) Financial Assistance (When Allowed/Not Allowed)  Phil Long Distance Tel Co. and the filing of the complaint for illegal dismissal indisputably strengthens such denial. But where the cause of the separation is more serious than mere inefficiency. The benediction of compassion was made to cover a multitude of sins. as the petitioner correctly argues. We note that heretofore the separation pay. Private respondent was a casual employee of the petitioner assigned to its B-Meg warehouse in San Miguel. when it was considered warranted. while inept. it does not estop him from questioning the legality of his dismissal. Bulacan. This is no longer mere incompetence but clear dishonesty. be it mere inefficiency or something graver like immorality or dishonesty. of rewarding rather than punishing the erring employee for his offense. Effect of Receipt  San Miguel Corp v. was required regardless of the nature or degree of the ground proved. We find no merit in petitioner's contention. Since he was forced to retire. . In the case at bar. they were unable to reach San Miguel. a traffic operator of the Philippine Long Distance Telephone Company. The acceptance of those benefits would not amount to estoppel as held in the leading case of Mercury Drug Co. the labor arbiter found that the evidence presented by private respondent sufficiently showed his fitness to resume his work thereby making his termination illegal. As this Court stated in De Leon vs. . v. vs. It is time we rationalized the exception.demonstrates that such type of remuneration is part of their salary since some salesmen do not receive basic salary but rather. Marilyn Abucay. (emphasis supplied). filed an application for vacation leave for eleven (11) days with pay. Furthermore. . NLRC The only issue presented in the case at bar is the legality of the award of financial assistance to an employee who had been dismissed for cause as found by the public respondent. with the assistance of his supervisor. the absences incurred by private respondent during said period were charged to his remaining sick leave benefits with pay. He had no alternative but to accept what was offered to him. There is likewise no merit to petitioner's contention that private respondent is estopped from assailing his retirement as he has accepted the benefits under the retirement plan. b. thus fully exhausting them.800. Employees who received their separation pay are not barred from contesting the legality of their dismissal. as the roads were rendered impassable by typhoon "Norming". This policy should be re-examined.

professional and technical employee. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case. The court held that contrary to the allegations of Serrano. To cut costs. In this case. NLRC and Isetan supra 26  Agabon v. v. Petition is GRANTED. instead of being given separation pay. NLRC held that the phase-out of private respondent’s security section and the hiring of an independent security agency constituted an exercise by private respondent of a legitimate business decision. taking into special consideration the gravity of the due process violation of the employer. with respect to dismissals for cause under Art. in accordance with that article. assuming the length of such service is deemed material.000. whether he is reinstated or only granted separation pay. 283 of the Labor Code. an Industrial Engineer. the court held in that where the dismissal is for a just cause.CA ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims. the employee should be reinstated and paid backwages. he should be paid full backwages if he has been laid off without written notice at least 30 days in advance. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. as a managerial. Isetann phased out its entire security section and engage the services of an independent security agency. as in the case. NLRC supra 26 Riviera Home Improvements. Petition Granted. Hence this petition. On the other hand. 283 also provides that to terminate the employment of an employee for any of the authorized causes the employer must serve "a written notice on the workers and the DOLE at least one (1) month before the intended date thereof. Hence. he should not be reinstated. when Mantos. The indemnity to be imposed should be stiffer to discourage the abhorrent practice of “dismiss now. Petitioners then filed a complaint for illegal dismissal and payment of money claims. Serrano was given notice the same day of his termination Art. should be computed at the rate of one month salary for every year of service. Pettion Dismissed. Petron. a copy of which was received by him on November 18. if it is shown that the employee was dismissed for any of the just causes mentioned in said Art. was suspended for 30 days for violating company rules and regulations vi. Serrano filed a complaint for illegal dismissal upon his termination. he must be paid backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause because the failure to hear him before he is dismissed renders the termination of his employment without legal effect. It was while assigned at Petron’s Cebu District Office with petitioner Peter Maligro as his immediate superior. the dismissal falls under Art. Given that abandonment was established. 283 of the Labor Code for redundancy Art. Ruben Serrano was hired by private respondent Isetann Department Store as a security checker to apprehend shoplifters and prevent pilferage of merchandise. thru a Notice of Disciplinary Action dated October 29. However. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent. NLRC reversed the LA." In this case. he should be reinstated. were dismissed for abandonment of work. if found due under the circumstances of each case. only if the termination of employment is not for any of the causes provided by law is it illegal and. 1996. the employer’s failure to comply with the notice requirement does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes the termination of employment merely ineffectual. In either case.The Court also rules that the separation pay. pay later. LA declared the dismissals illegal. If the employee’s separation is without cause. the lack of statutory due process should not nullify the dismissal but the employer should indemnify the employee for the violation of his statutory rights. then.” which the court sought to deter in the Serrano ruling.) Liability of Corporate Officers  Petron Corp v.00. 282. NLRC 172 . this petition. The LA found this termination to be illegal. through its Cebu District Office. the award was fixed at P30. Mantos. hired the herein private respondent Chito S. therefore. The violation of the petitioners’ right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers and after years under their employ. Thus.) Indemnity  Serrano v. 1996. 282. The court found that the Agabon were frequently absent having subcontracted for an installation work for another company.

WHEREFORE. True. and nowhere is there any showing that Maligro. On this score alone. and (2) the basis for the charge of insubordination was the private respondent’s alleged making of false accusations against Maligro. As for his liability as an employer as enumerated under Article 212(e) of the Labor Code (‘Employer' includes any person acting in the interest of an employer. Subsequently. does not make a corporate officer personally liable for the debts of the corporation. that Carag approved or assented to any patently unlawful act to which the law attaches a penalty for its commission. however. It is undisputed that Maligro was private respondent’s superior. Mantos’ services were altogether terminated. with Maligro no less being the chairman thereof. as committee chairman. with the petitioners in their submission that the NLRC erred in holding petitioner Peter Maligro jointly and severally liable with petitioner Petron for the money claims of the private respondent. NLRC and Spouses Santos v. We quote the NLRC’s finding in this regard: Whether he really caught the ire of his immediate supervisor (respondent Maligro) in view of his alleged closeness to the previous one who migrated to Canada. The term shall not include any labor organization or any of its officers or agents except when acting as employer. In any event. from the people comprising it. 11-1439-96 was received. and the NLRC decision dated July 31. In the present case. cannot justify a finding of personal liability on the part of Maligro inasmuch as said findings do not point to Maligro’s extreme personal hatred and animosity with the respondent. influenced the other committee members to side against the private respondent. in general. Those findings. NLRC dismissed the petitions and affirmed the LA. corporate directors and officers may be held solidarily liable with the corporation for the termination of employment if done with malice or in bad faith. the creation of the investigation committee and said committee’s consideration of the insubordination charge against the private respondent. and whether or not he was assigned to menial clerical jobs when his designation was that of Operations Engineer. Settled is the rule in this jurisdiction that a corporation is invested by law with a legal personality separate and distinct from those acting for and in its behalf and. the fact that Maligro himself was the committee chairman is not itself sufficient to impute bad faith on his part or attribute bias against him. trustees or officers attaches only when (1) they assent to a patently unlawful act of the corporation. however. in a notice Termination of Services received by him. Thus. not having reported for work. the lack of just cause therefor and the non-observance of procedural due process. and Arbiter Ortiguerra did not make any finding. Thus in McLeod: Personal liability of corporate directors. If at all. but only when exceptional circumstances so warrant. therefore.) The court recounted the cases of McLeod v. For instance. being Petron’s Operations Assistant Manager for Visayas and Mindanao. by itself. were merely aimed to cover up the illegal dismissal or to give it a semblance of legality. LA found them liable for illegal closure.regarding Absence Without Leave (AWOL). be said that Maligro was motivated by malice and bad faith in connection with private respondent’s dismissal from the service. The governing law on personal liability of directors for debts of the corporation is still Section 31 of the Corporation Code.  Carag v. Thus this petition. MAC’s employees filed a complant for illegal closure of business through their labor union. the apparent basis for the NLRC in holding petitioner Maligro solidarily liable with Petron were its findings that (1) the Investigation Committee was created a day after the summons in NLRC RAB-VII Case No. the assailed Resolution of the Court of Appeals is SET ASIDE. NLRC that Article 212(e) of the Labor Code. We are. NLRC supra 26 173 . It is thus logical for him to be part of the committee that will investigate private respondent’s alleged infractions of company rules and regulations. As well. Verily. directly or indirectly. Carag cannot be held personally liable for the separation pay of complainants. or when they are guilty of bad faith or gross negligence in directing its affairs. what said findings show are the illegality itself of private respondent’s dismissal. solidary liabilities may at times be incurred by corporate officers. The court held that the LA’s decision to hold Antonio Carag as MAC’s stockholder and Chairman has not basis since Complainants did not allege or prove. it must be stressed that private respondent’s allegation of bad faith on the part of Maligro was not established in this case. Besides. were not clearly established by complainant. in labor cases. 2000 is AFFIRMED Without notice of any kind Mariveles Apparel Corporation for unknown reasons ceased operations with the intention of completely closing its shop as manifested in a letter filed on the same day the company closed. the committee was composed of three other Petron officers as members. It cannot. obligations incurred by corporate officers acting as corporate agents are not theirs but the direct accountabilities of the corporation they represent.

Thus. V. designation or status and irrespective of the method by which their wages are paid. — This Rule shall apply to all employees in the private sector. and the Court of Appeals to hold Carag personally liable for the separation pay owed by MAC to complainants based on Article 212(e) since it does not state that corporate officers are personally liable for the unpaid salaries or separation pay of employees of the corporation. the term “Act” shall refer to Republic Act No. do not forthwith file with the corporate secretary their written objection. having knowledge of such issuance. SECTION 2. the full text of which shall read as follows: RULE II Retirement Benefits SECTION 1. the NLRC. 7641. 7641 (December 9. RULE II of Book VI of the Rules Implementing the Labor Code is hereby issued. "In case of retirement.(2) they consent to the issuance of watered down stocks or when. Confessor on May 31. 174 . — This Rule shall not apply to the following employees: 2. That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. "Unless the parties provide for broader inclusions. 1993. is hereby amended to read as follows: "Art. except to those specifically exempted under Section 2 hereof. however. 442. 2. 3. . service and agricultural establishments or operations employing not more than (10) employees or workers are exempted from the coverage of this provision. whichever comes earlier. 1992):RETIREMENT PAY LAW: AN ACT AMENDING ARTICLE 287 OF PRESIDENTIAL DECREE NO. Retirement REPUBLIC ACT NO. otherwise known as the Labor Code of the Philippines. General Statement on Coverage.) 2. Petition Granted. 2. Nothing in this Act shall deprive any employee of benefits to which he may be entitled under existing laws or company policies or practices. if they are covered by the Civil Service Law and its regulations. "Retail. AS AMENDED. The liability of corporate officers for corporate debts remains governed by Section 31 of the Corporation Code. Article 287 of Presidential Decree No. Exemptions. it was error for Arbiter Ortiguerra. 442.3 Employees of retail.Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. "Violation of this provision is hereby declared unlawful and subject to the penal provisions provided under Article 288 of this Code. As used herein. a fraction of at least six (6) months being considered as one whole year. who has served at least five (5) years in the said establishment. (3) they agree to hold themselves personally and solidarily liable with the corporation. (Deleted by Department Order No. 7641 which took effect on January 7. 1994. but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age. Nieves R. Pursuant to the provisions of Article 287 of the Labor Code as amended by Republic Act No. OTHERWISE KNOWN AS THE LABOR CODE OF THE PHILIPPINES. Retirement. as amended.2 Domestic helpers and persons in the personal service of another. or (4) they are made by specific provision of law personally answerable for their corporate action. "In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation.1 Employees of the National Government and its political subdivisions. including Government-owned and/or controlled corporations. 287. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. an employee upon reaching the age of sixty (60) years or more. service and agricultural establishment or operations regularly employing not more than ten (10) employees. BY PROVIDING FOR RETIREMENT PAY TO QUALIFIED PRIVATE SECTOR EMPLOYEES IN THE ABSENCE OF ANY RETIREMENT PLAN IN THE ESTABLISHMENT Section 1. Sec. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided. the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. 20 issued by Secretary Ma. in relation to Article 5 of the same Code. regardless of their position. As used in this sub-section." Sec.

the term “one-half month salary” shall include all of the following: (a) Fifteen (15) days salary of the employee based on his latest salary rate. (c) “Agricultural establishment/operations” refers to an employer which is engaged in “agriculture”.4 Service Requirement. an employee may retire upon reaching the age of sixty (60) years or more if he has served for at least five (5) years in said establishment.2 Compulsory Retirement.2 Components of One-half (½) Month Salary. Optional. SECTION 3. of 175 . the culture of fish and other aquatic products in farms or ponds. the term “salary” includes all remunerations paid by an employer to his employees for services rendered during normal working days and hours.1 In the absence of an applicable agreement or retirement plan.(a) “Retail establishment” is one principally engaged in the sale of goods to end-users for personal or household use. — In the absence of a retirement plan or other applicable agreement providing for retirement benefits of employees in an establishment. whether such payments are fixed or ascertained on a time. the cultivation and tillage of the soil. SECTION 5. cultivation. pineapple. — Where there is no such plan or agreement referred to in the immediately preceding sub-section.2 In case of retirement under this Section. as determined by the Secretary of Labor and Employment. that an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided under this Rule. Compulsory Retirement. regular holidays and mandatory fulfillment of a military or civic duty. 3. growing and harvesting of any agricultural or horticultural commodities. tobacco. 4. 5.1 Optional Retirement. production.3 Upon retirement of an employee. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements.1 Any employee may retire or be retired by his employer upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract or retirement plan subject to the provisions of Section 5 hereof on the payment of retirement benefits. raising of livestock or poultry. 4. abaca. aquatic or other farm products. an employee shall be retired upon reaching the age of sixty-five (65) years. whether optional or compulsory. Retirement Benefits. (b) “Service establishment” is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. but does not include the manufacture and/or processing of sugar. an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (½) month salary for every year of service. provided. It shall lose its retail character qualified for exemption if it is engaged in both retail and wholesale sale of goods. and includes the fair and reasonable value. 5. and any activities performed by a farmer or on a farm as incident to or in conjunction with such farming operations. 4. however. — The minimum length of service in an establishment or with an employer of at least five (5) years required for entitlement to retirement pay shall include authorized absences and vacations. the employer shall pay the deficiency. 4. 3. and provided further that if such benefits are less. or other method of calculating the same. coconut. task. a fraction of at least six (6) months being considered as one whole year. SECTION 4. dairying. — For the purpose of determining the minimum retirement pay due an employee under this Rule. the employer shall pay the difference between the amount due the employee under this Rule and that provided under the collective or individual agreement or retirement plan. 3. his services may be continued or extended on a case to case basis upon agreement of the employer and employee. In case the employer’s contribution is less than the retirement benefits provided under this Rule. piece of commission basis. As used herein. This terms refers to all farming activities in all its branches and includes among others. Retirement under CBA/contract.3 Where both the employer and the employee contribute to a retirement fund in accordance with an individual or collective agreement or other applicable employment contract. the employer’s total contribution thereto shall not be less than the total retirement benefits to which the employee would have been entitled had there been no such retirement fund.

SECTION 6. Book III of the Rules Implementing the Labor Code on the payment of wages of workers who are paid by results. subject to the provisions of Rule VII-A. service and agricultural establishments or operations employing not more than ten (10) employees or workers and employees of the National Government and its political subdivisions. THE RETIREMENT PAY LAW A. Violations thereof shall be subject to the penal provisions provided under Article 288 of the Labor Code of the Philippines. if the following requirements are met: (i) The benefit plan must be approved by the Bureau of Internal Revenue. 7641 or the Retirement Pay Law shall apply to all employees in the private sector. B. 2 (b) item (1) of Revenue Regulations No. retirement and separation pay constitute compensation subject to withholding. 176 . Computation of Retirement Pay A covered employee who retires pursuant to RA 7641 shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. lodging or other facilities customarily furnished by the employer to his employees. — For covered workers who are paid by results and do not have a fixed monthly rate. (ii) The retiring official or employee must have been in the service of the same employer for at least ten (10) years and is not less than fifty (50) years of age at the time of retirement. 1986 are met. 1993 when the Act went into force. 12-86 dated August 1. Coverage Republic Act No. except the following: (1) Retirement benefits received by officials and employees of private firms under a reasonable private benefit plan maintained by the employer. divided by the number of actual working days in that particular period. retirement and separation pay.food. SECTION 9. Relation to agreements and regulations. including Government-owned and/or controlled corporations. the basis for determination of the salary for fifteen days shall be their average daily salary (ADS). employees of service and other job contractors and domestic helpers or persons in the Personal service of another. policy issuances or orders contrary to or inconsistent with these rules are hereby repealed or modified accordingly. The law does not cover employees of retail. profit-sharing payments and other monetary benefits which are not considered as part of or integrated into the regular salary of the employees.A. and (iii) The retiring official or employee shall not have previously availed of the privilege under the retirement benefit plan of the same or another employer. — This Rule took effect on January 7. to wit: Pensions. regardless of their position. SECTION 8. if they are covered by the Civil Service Law and its regulations. All rules and regulations. — The retirement pay provided in the Act may be exempted from tax if the requirements set by the Bureau of Internal Revenue under Sec. (c) One-twelfth of the 13th month pay due the employee. — Nothing in this Rule shall justify an employer from withdrawing or reducing any benefits. Labor Advisory on Retirement Pay: GUIDELINES FOR THE EFFECTIVE IMPLEMENTATION OF R. Effectivity. SECTION 7. The ADS is the average salary for the last twelve (12) months reckoned from the date of their retirement. Penal Provision. (b) The cash equivalent of not more than five (5) days of service incentive leave. supplements or payments as provided in existing laws. They shall include part-time employees.3 One-half month salary of employees who are paid by results. — Pensions. The term does not include cost of living allowances. The law is explicit that “one-half month salary shall mean fifteen (15) days plus onetwelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days service incentive leaves” unless the parties provide for broader inclusions. 5. Exemption from tax. (d) All other benefits that the employer and employee may agree upon that should be included in the computation of the employee’s retirement pay. — It shall be unlawful for any person or entity to circumvent or render ineffective the provisions of the Act. a fraction of at least six (6) months being considered as one whole year. 7641. designation or status and irrespective of the method by which their wages are paid. individual or collective agreements or employment practices or policies.

the employer is liable to pay the difference. From the language of the school’s retirement plan rules. through its Human Resources Development Office. First. According to the assailed decision. Petitioner emphatically insisted that the compulsory retirement under the plan was tantamount to a dismissal. the PAG-IBIG Fund can be considered as a substitute retirement plan of the company for its employees provided that such scheme offers benefits which are more than or at least equal to the benefits under RA 7641. Lucas. In case there is such an agreement. C. 1996 by the Department of Labor and Employment. Thus. In short. As provided in RA 7742. Cabotaje was employed as a security guard by Enriquez Security and Investigation Agency (ESIA). If said scheme provides less than what the employee is entitled to under RA 7641. where the employee is the lone contributor to the PAG-IBIG Fund. however. was that the retirement plan came into being in 1970 or 12 years after petitioner started working for respondent. policy or practice providing retirement benefit which is equal or superior to that which is provided in the Act. Substitute Retirement Plan Qualified workers shall be entitled to the retirement benefit under RA 7641 in the absence of any individual or collective agreement. policy or practice will prevail. In fact. 1993 should be included. such option does not in any way contravene an existing collective bargaining agreement or other employment agreement. a private employer shall have the option to treat the coverage of the PAG-IBIG Fund as a substitute retirement benefit for the employee concerned within the purview of the Labor Code as amended. On the other hand.Evidently. informed petitioner that she was approaching her 35th year of service with the university and was due for automatic retirement. Sr: RA 7641 is undoubtedly a social legislation. The law has been enacted as a labor protection measure and as a curative statute that – absent a retirement plan devised by. If both the employee and the employer contribute to a retirement plan. respondent. Petition is hereby DENIED IN 1958 ALPHA C. Petitioner’s contention that RA 7641 cannot be applied retroactively has long been settled in the Guidelines for Effective Implementation of RA 7641 issued on October 24. Petitioner was thus correctly ordered to pay respondent’s retirement under RA 7641. Petitioner acknowledged that respondent was entitled to retirement benefits but opposed his claim that the computation of such benefits must be reckoned from January 1979 when he started working for ESIA. an employer – can respond. or a voluntary grant from. only the employer’s contribution and its increments shall be considered for full or partial compliance with the benefit under RA 7641. an agreement with. the period of employment with the same employer before the effectivity date of the law on January 7. In reckoning the length of service. the compulsory nature of both membership in and contribution to the plan debunked the CA’s theory that petitioner’s “voluntary contributions” were evidence of her willing participation therein. In a letter dated December 3. computed from January 1979 up to the time he applied for retirement in July 1997. It was through no voluntary act of her own that petitioner became a member of the plan. provided.” What was not pointed out. the employer being exempted from its coverage. in part at least. company policy or practice. Paragraph B of the guidelines provides: In reckoning the length of service. 1992. Siliman University 177 . Adopted: 24 October 1996 Victor A. it was not part of the terms of employment to which petitioner agreed when she started working for respondent. the only way she could have ceased to be a member thereof was if she stopped working for respondent altogether. and that its benefits can be reckoned not only from the date of the law’s enactment but retroactively to the time said employment contracts have started. to the financial well-being of workers during their twilight years soon following their life of labor. There should be little doubt about the fact that the law can apply to labor contracts still existing at the time the statute has taken effect. 1993 should be included. Rufina Patis Factory v. Cabotaje  Jaculbe v. the law expanded the concept of “one-half month salary” from the usual one-month salary divided by two.  Enriquez Security Services Inc. JACULBE began working for respondent’s university medical center as a nurse. said agreement. the period of employment with the same employer before the effectivity date of the law on January 7. v. respondent’s retirement plan “ha(d) been in effect for more than 30 years. the employer is under obligation to give his employee retirement benefits under the Act. We find no merit in the petition.

The petition lacks merit. Article 287 of the Labor Code. 178 . 287. the so-called commissions paid to or received by medical representatives of BoieTakeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co. Further. The salesmen’s commission are not overtime payments. the term one half (1/2) month salary shall mean fifteen (15) days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. v. commissions paid by the Boie-Takeda Company to its medical representatives could not have been sales commissions in the same sense that Philippine Duplicators paid the salesmen their sales commissions. Insisting that his retirement benefits and 13th month pay must be based on the average monthly salary petitioner refused to accept the check issued by private respondent. as represented by their bargaining unit. but a portion of the salary structure which represents an automatic increment to the monetary value initially assigned to each unit of work rendered by a salesman. Medical representatives are not salesmen. — Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. as amended by Republic Act No. to which both the CA and respondent refer. may retire and shall be entitled to retirement pay equivalent to at least one half (1/2) month salary for every year of service. an employee upon reaching the age of sixty (60) years or more. 1997. nor profit-sharing payments nor any other fringe benefit. Boie-Takeda. a position he held until his retirement on November 30. Inc. they do not effect any sale of any article at all. should petitioner’s commissions be considered in the computation of his retirement benefits and 13th month pay? We rule in the negative.” Thus. Retirement. were properly included in the term basic salary for purposes of computing the 13th month pay. a fraction of at least six (6) months being considered as one whole year. otherwise known as The New Retirement Law. respondent was guilty of illegal dismissal. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment. comprising a pre-determined percentage of the selling price of the goods sold by each salesman. or capacity for revenue production. who has served at least five (5) years in the said establishment. 7641. . Philippine Duplicators. whether or not a commission forms part of the basic salary depends upon the circumstances or conditions for its payment.Retirement is the result of a bilateral act of the parties. Any seeming inconsistencies between Philippine Duplicators and Boie-Takeda had been clarified by the Court. The consent of the employees. a voluntary agreement between the employer and the employee whereby the latter. instead. he filed a complaint before the arbitration branch of the NLRC for retirement benefits. Thereafter. Unless the parties provide for broader inclusions. Not only was petitioner still a good eight years away from the compulsory retirement age but she was also still fully capable of discharging her duties as shown by the fact that respondent’s board of trustees seriously considered rehiring her after the effectivity of her “compulsory retirement. Nevertheless. which are generally tied to the productivity. Petition is hereby GRANTED Petitioner was employed as a salesman at respondent’s Grocery Division in Davao.. having terminated petitioner solely on the basis of a provision of a retirement plan which was not freely assented to by her. but not beyond sixty five (65) years which is hereby declared the compulsory retirement age. he received a letter regarding the computation of his separation pay. NLRC. the imposition of a retirement age below the compulsory age of 65 was deemed acceptable because this was part of the CBA between the employer and the employees. the salesmen’s commissions.Pantranco North Express.. NLRC - In fine. after reaching a certain age agrees to sever his or her employment with the former. of a corporation and such bonuses closely resemble profit-sharing payments and have no clear direct or necessary relation to the amount of work actually done by each individual employee. to be retired even before the statutory retirement age of 65 was laid out clearly in black and white and was therefore in accord with Article 287. were excluded from the term basic salary because these were paid to the medical representatives and rank-and-file employees as productivity bonuses. provides:Art. He was eventually appointed as unit manager of Sales Department.  Reyes v.

the four (4) employees retired from the company. while the second is primarily determined by the collective bargaining agreement or other employment contract or employer’s retirement plan. it shall not include the following: 1) cost of living allowance. an employee who retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. The complainants averred that their retirement benefits are exempt from income tax under Article 32 of the NIRC. 2) profit-sharing payments. In the absence of any provision on optional retirement in a collective bargaining agreement. and includes the fair and reasonable value.22 as the commissions he received are in the form of profit-sharing payments specifically excluded by the foregoing rules. Petition is DENIED On various dates.2 Components of One-half (1/2) Month Salary. However. “one-half month salary” shall include all of the following: 1) 15 days salary based on the latest salary rate. a fraction of at least six (6) months being considered as one whole year. provides: Section 5. under Article VIII of the CBA. and 3) other monetary benefits which are not considered as part of or integrated into the regular salary of the employees Petitioner filed for optional retirement upon reaching the age of 60. or employer’s retirement plan. or other facilities customarily furnished by the employer to his employees. an employee may optionally retire upon reaching the age of 60 years or more. other employment contract. but not beyond 65 years. (b) The cash equivalent of not more than five (5) days of service incentive leave.919. – For the purpose of determining the minimum retirement pay due an employee under this Rule. piece or commission basis. (d) All other benefits that the employer and employee may agree upon that should be included in the computation of the employee’s retirement pay. Retirement Benefits. or other method of calculating the same. which petitioner relied upon in withholding their differentials. the basis in computing his retirement benefits is his latest salary rate of P10. task.Section 5 of Rule II of the Rules Implementing the New Retirement Law. They pointed out that.1 In the absence of an applicable agreement or retirement plan. For the purpose of computing retirement pay. of food. 2) cash equivalent of 5 days of service incentive leave (or vacation leave). as determined by the Secretary of Labor and Employment. only those employees who reached the age of 60 were considered retired. The first takes place at age 65. the term “salary” includes all remunerations paid by an employer to his employees for services rendered during normal working days and hours. provided he has served at least five years in the establishment concerned. the term “one-half-month salary” shall include all the following: (a) Fifteen (15) days salary of the employee based on his latest salary rate. (c) One-twelfth of the 13 month pay due the employee. As used herein. 3) 1/12 of the 13th month pay. do not apply to them since these provisions deal with the applicable income tax rates on foreign corporations and suits to recover taxes based on false or fraudulent returns. The term does not include cost of living allowance. And eventually. petitioner employed the following persons at its Cebu station. Amarilla 179 . 5. While petitioner admits that its “previous directors” had paid the withholding taxes on the retirement benefits of respondents. 4) other benefits as may be agreed upon by employer and employee for inclusion. 5. profit-sharing payments and other monetary benefits which are not considered as part of or integrated into the regular salary of the employees. it explains that this practice was stopped when the new management took  Intercontinental Broadcasting Corporation v. lodging. whether such payments are fixed or ascertained on a time. Sections 28 and 72 of the NIRC. But. (Emphasis supplied) The article provides for two types of retirement: (a) compulsory and (b) optional.

Gross Income. We have carefully reviewed the CBA and find no provision where petitioner obliged itself to pay the taxes on the retirement benefits of its employees. the taxpayer is burdened to prove the concurrence of the following elements: (1) a reasonable private benefit plan is maintained by the employer. On January 23. (ii) The retiring official or employees must have been in the service of the same employer for at least ten (10) years and is not less than fifty (50) years of age at the time of retirement. 3 kinds of retirement plans  Gerlach v. Phils. for the first time. pensions. For purposes of this subsection. stock bonus or profit-sharing plan maintained by an employer for the benefit of some or all of his officials or employees. as its local correspondent. petitioner. 28.(A) Retirement benefits received by officials and employees of private firms whether individuals or corporate. hence. – Pensions. Petitioner had agreed to shoulder such taxes to entice them to voluntarily retire early.over. The new management could not be expected to enforce and follow through the illegal policy of the old management which is adverse to the interests of the petitioner. provides: (b) Pensions. further. gratuity. or be diverted to. the implementing rules of the foregoing provisions. (2) the retiring official or employee has been in the service of the same employer for at least 10 years.The following items shall not be included in gross income and shall be exempt from taxation under this Title: (7) Retirement benefits. it is not obliged to pay for the taxes on the respondents’ retirement benefits. Reuters 180 . 1984. An agreement to pay the taxes on the retirement benefits as an incentive to prospective retirees and for them to avail of the optional retirement scheme is not contrary to law or to public morals. under the NIRC. (Reuters). Respondents agreed and relied on the commitment of petitioner. the retirement benefits of respondents are part of their gross income subject to taxes. if the following requirements are met: (i) The retirement plan must be approved by the Bureau of Internal Revenue. respondent assigned petitioner as a journalist to Reuters Singapore. 1. rendering such retirement benefits not exempt from taxes. (3) the retiring official or employee is not less than 50 years of age at the time of his retirement. Petition is DENIED Reuters Limited. Thus. and wherein it is provided in said plan that at no time shall any part of the corpus or income of the fund be used for. except the following: (1) Retirement benefit received by official and employees of private firms under a reasonable private benefit plan maintained by the employer. Rachel Addison. the decisions of the NLRC and the CA affirming such undertaking should be reversed. . That the retiring official or employee has been in the service of the same employer for at least ten (10) years and is not less than fifty years of age at the time of his retirement: Provided. or both. – (b) Exclusions from gross income. Section 28 (b) (7) (A) of the NIRC of 1986 provides: Sec. and (iii) The retiring official or employee shall not have previously availed of the privilege under the retirement benefit plan of the same or another employer. Respondents received their retirement benefits from the petitioner in three staggered installments without any tax deduction for the simple reason that petitioner had remitted the same to the BIR with the use of its own funds. under the CBA. retirements and separation pay. etc. hired Marilyn Odchimar Gerlach. We also agree with petitioner’s contention that. We agree with petitioner’s contention that. For petitioner to renege on its contract with respondents simply because its new management had found the same disadvantageous would amount to a breach of contract. a company engaged in news dissemination with offices worldwide. and (4) the benefit had been availed of only once. on its belief that this would prove advantageous to it. retirement and separation pay constitute compensation subject to withholding tax. It was only when respondents demanded the payment of their salary differentials that petitioner alleged. . where contributions are made by such employer for officials or employees. Before leaving. 12-86. that it had failed to present the 1993 CBA to the BIR for approval. in accordance with a reasonable private benefit plan maintained by the employer: Provided. the term "reasonable private benefit plan" means a pension. That the benefits granted under this subparagraph shall be availed of by an official or employee only once. Revenue Regulation No. for the retirement benefits to be exempt from the withholding tax. for the purpose of distributing to such officials and employees the earnings and principal of the fund thus accumulated. gratuities. any purpose other than for the exclusive benefit of the said official and employees.

petitioner’s theory that the computation of her retirement benefits should be based on her basic annual salary while stationed abroad is untenable. In fact. Besides.000 hours for PAL shall be eligible for normal retirement. whichever is the greater amount. Article VII. Issue is between PAL and respondent Airline Pilots Association of the Philippines (ALPAP). petitioner contends that its pilots who retire below the retirement age of 60 years not only receive the benefits under the 1967 PAL-ALPAP Retirement Plan but also an equity of the retirement  PAL v. . It is very clear that from the very start of her first assignment overseas. Based on this peculiar circumstance that PAL pilots are in. She soon retired. The pertinent provision of the 1967 PAL-ALPAP Retirement Plan states: SECTION 1. . Significantly. does not in itself purport to impose any obligation upon employers to set up a retirement scheme for their employees over and above that already established under existing laws. vs.000 hours would still be in the prime of his life and at the peak of his career. Inc. 14. Nonetheless. apprised her of the details of her forthcoming assignment.000. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements. (a) Any member who completed twenty (20) years of service as a pilot for PAL or has flown 20. In case of retirement. Rather." (Emphasis supplied) The first paragraph of the above provisions deals with the retirement age of an employee established in (a) a collective bargaining agreement or (b) other applicable employment contract. respondent apprised her that the company’s contribution to the Plan is based on her notional Philippine salary. The normal retirement date is the date on which he completes twenty (20) years of service. compared to one who retires at the age of 60 years old.00 for each completed year of service rendered as a pilot. Consequently. like the Social Security Act. Normal Retirement. provides: "Sec. Respondent also informed petitioner of the amount of her notional Philippine salary whenever she was transferred to her next overseas assignment or when there were increases in her salary. it is a basic rule in evidence that the burden of proof is on the part of the party who makes the allegations – ei incumbit probatio. Article 287 of the Labor Code reads: "Article 287. It follows that the amount of retirement benefits of a retiring employee assigned abroad is based on his notional salary. the parties provided for a special scheme of retirement different from that contemplated in the Labor Code. (b) a collective bargaining or (c) other agreements. specifically that her home base will always be the Philippines.[29] we held that Article 287. – (a) An employee who is retired pursuant to a bona fide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy shall be entitled to all the retirement benefits provided therein . it was intended for those who have no more plans of employment after retirement. SECTION 2. non qui negat. stemmed from petitioner's act of unilaterally retiring airline pilot Captain Albino Collantes under Section 2.000 hours as a pilot for PAL. Retirement benefits. Petition is hereby DENIED. or on which he logs his 20.Reuters’ Eastern Region Staff Manager. whichever is the greater amount. or (b) to such termination pay benefits to which he may be entitled under existing laws. Any member who remains in the service of the Company after his normal retirement date may retire either at his option or at the option of the Company and when so retired he shall be entitled either (a) to a lump sum payment of P5. Drilon. In any event.000.00 or (b) to such termination pay benefits to which he may be entitled to under existing laws. under the Plan. of the 1967 PAL-ALPAP Retirement Plan. Rule 1 of the Rules and Regulations Implementing Book VI of the Labor Code. The member who retires on his normal retirement shall be entitled to either (a) a lump sum payment of P100. Retirement. A pilot who retires after twenty years of service or after flying 20. the company’s contribution to the fund is 10% of the basic monthly salary of each participant. Section 14(a). respondent was able to prove that it has been its practice worldwide that the notional salary of an employee is its basis in computing its contribution to the retirement plan for a local employee detailed abroad . both actual and notional. Late Retirement. We agree with the Court of Appeals that petitioner’s retirement benefits must be based on her notional Philippine salary. qui dicit. and are thus in need of financial assistance and reward for the years that they have rendered service. Airline Pilots Association 181 . the exclusive bargaining representative of all commercial airline pilots of petitioner. – Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract." Respondent based petitioner’s retirement benefits on its Plan and established policy. Llora Motors. The second paragraph deals with the retirement benefits to be received by a retiring employee which he may have earned under (a) an existing law. Provisions of Article 287 of the Labor Code could not have contemplated the situation of PAL’s pilots. which is in accord with the above provision.

Petition is GRANTED Aniceto W. On the other hand. the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: provided.fund under the PAL Pilots’ Retirement Benefit Plan. he (Cabuhat) having merely driven for him to Pagbilao. In fine. Petitioner’s attempt at exoneration deserves scant consideration. 1959. Unless the parties provide for broader inclusions. This is in addition to the amount of not less than P100. Imposing a penalty less harsh than dismissal and ordering his reinstatement are thus functus oficio. To date. that retirement of an employee may be done upon initiative and option of the management. entered into between petitioner and respondent on May 30. petitioner. In sum. the Labor Arbiter’s order for his reinstatement not having been executed. may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service. Jr. 1987. an employee upon reaching the age of sixty (60) years or more. it having already borne the signature of the approving officer and. however. In the absence of a retirement plan or agreement plan providing for retirement benefits of employees in the establishment. each pilot stands to receive the full amount of the contribution. which dishonesty calls for reprimand to dismissal under MERALCO’s rules. an employee of respondent Manila Electric Company (MERALCO) since August 11. given his admission that he very well knew that Cabuhat did not conduct any field work on June 6. As custodian of the petty cash fund. 287. At the time petitioner was dismissed.  Naguit v. The PAL Pilots’ Retirement Benefit Plan is a retirement fund raised from contributions exclusively from petitioner of amounts equivalent to 20% of each pilot’s gross monthly pay. Retirement. – Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. he had the duty to ascertain that the circumstances which brought about any claim therefrom were in order.00 that he shall receive under the 1967 Retirement Plan. The requirement to consult the pilots prior to their retirement defeats the exercise by management of its option to retire the said employees. Bulletin Publishing Corp. 1987. In case of retirement. he is now about 65. 1987. however. Upon retirement. he should not be held culpable. That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.000. Article 287 of the Labor Code: Art. NLRC 182 .m. therefore. In short. the pilot gets an amount equivalent to 240% of his gross monthly income for every year of service he rendered to petitioner. who has served at least five (5) years in the said establishment. but not beyond sixty-five (65) years which is hereby declared as the compulsory retirement age. the retirement benefits that a pilot would get under the provisions of the above-quoted Article 287 of the Labor Code are less than those that he would get under the applicable retirement plans of petitioner. a fraction of at least six (6) months being considered as one whole year. v. this Court held: The aforestated sections explicitly declare. he was still below the retirement age of employees of MERALCO at 60.. And where there are cases of voluntary retirement. As clearly established by his own account. this Court credits the petitioner with good faith when he did not correct the entry in the Notice of Overtime and Timesheet reflecting that he worked up to 5:00 p. on June 6. the same is effective only upon the approval of management. in no uncertain terms. despite his knowledge that Cabuhat did not hire any jeep nor conduct field verification on June 6. was dismissed after 32 years of service. Petitioner thus committed dishonesty and breached MERALCO’s trust. Sanchez. He cannot now shirk from this responsibility by indirectly pinning the blame on the approving officer and asserting that the transgression was the result of mere inadvertence. xxx xxx xxx. Naguit. released the petty cash representing Cabuhat’s meal allowance and rental fee for a jeep. petitioner wants to convey that it was mere oversight on his part not to have “reviewed” the voucher. 1972. At best. the term ‘one-half (1/2) month salary’ shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. therefore. The charge of falsification against him does not thus lie.

that her retirement benefits should be computed on the basis of her thirty years of service. however. she abandoned her teaching position as in fact she was employed elsewhere. In case of retirement the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided however That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein.73 number of years in service x one-half month salary 15 years x P6.33 P6. Retirement. Catalina v. Hilaria was hired as an elementary school teacher at the Sta.45 computed as follows: One-half month salary = + (1/12 of 13th month pay) = = Retirement Pay = = = (15 days x latest salary per day) + (5 days leave x latest salary per day) P4. 287.580. JAM Transportation Co. Hilaria reached the compulsory retirement age of 65. She went back to the school and on May 31. Hilaria cannot be credited for her services in 1955-1970 in the determination of her retirement benefits. Likewise Section 3.A.43 P98. and that the gratuity pay earlier given to her should not be deducted therefrom. NLRC Hence. be deprived of his retirement benefits. computed on the basis of fifteen years of service from 1982 to 1997. she had not been heard from by petitioner school.706. As Hilaria was considered a new employee when she rejoined petitioner school upon re-applying in 1982.3 Rule II of the Rules Implementing R.95 183 . she applied for and was granted a one year leave of absence without pay on account of the illness of her mother. He should not.. Inc. Hilaria insisted. inclusive of the period from 1955 to 1970. In case the employer’s contribution is less than the retirement benefits provided under this Rule the employer shall pay the difference. Hilaria is entitled to receive P98.  Sta. 1997.455. NLRC are hereby SET ASIDE. as his entire previous eighteen (18) years of service with petitioner. – Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. For. Catalina College In 1970.30 + P1.3 Where both the employer and the employee contribute to a retirement fund in accordance with an individual or collective agreement or other applicable employment contract the employer’s total contribution thereto shall not be less than the total retirement benefits to which the employee would have been entitled had there been no such retirement fund. for example. as amended by Republic Act 7641.512. however.10 + P547. Retiring pursuant to Article 287 of the Labor Code. Article 287 of the Labor Code as amended by Republic Act 7641 or the New Retirement Law provides: ART. her retirement benefits should thus be computed only on the basis of her years of service from 1982 to 1997.563.504. v. 7641 provides: 3. petitioner school pegged her retirement benefits at P59.To this Court. retirement benefits. 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. Flores teaches:Private respondent’s re-employment as a new employee x x x would mean a demotion in rank and privileges. In June 1955.038. a denial of the award of backwages to petitioner from the time of his dismissal up to his age of retirement suffices as punishment for his dishonesty.35. After the expiration in 1971 of her leave of absence. would simply be considered as non-existent.

Despite her 35 years of service. Voluntary Retirement  Ariola v. She denied any connection with the said activities and filed a case of illegal dismissal. received from Philex termination notices informing them of their retrenchment. the valid dismissal of Caguioa from service deprives her of retirement benefits. As basis for their findings that petitioners retired from service. Banayat. Cordillera Administrative Region. Messrs. On 14 May 1993. it clearly appears that complainants voluntarily retired from the company for a valuable consideration. which should indicate the reason for petitioners’ separation from service. Ferraro. Baguio City. which. the vouchers in question do not suffice to prove petitioners’ retirement from Philex. with six[9] other supervisors and 49 rank-and-file employees.” Although there is no dispute that petitioners received varied amounts denominated in the vouchers in question as “retirement gratuity. Philex paid petitioners such separation pay after notifying them of their retrenchment. Petition granted. “retirement gratuity” is paid not only to retiring employees but also to those who. Mallare. from the evidences presented. the court held that since banks thrive on honesty and loyalty of its employees. CA held that she has been illegally dismissed. Benjamin Biete and Hermogenes Mamayson (“petitioners”) are former supervisors of respondent Philex Mining Corporation. Thus. On 1 June 1993. with transportation allowance. of its plan to retrench 241 employees. Caguoia Generosa Caguioa was a senior manager of Equitable PCI Bank and had been serving the bank for 35 years when she was discharged for alleged connection with accounting activities specifically discounting checks which caused Antonio Jarina (the customer who instituted the complaint against her) considerable damage. Brian and Biente (sic) may not be questioned because complainants opted to avail of the early voluntary retirement program offered by the Company. Indeed. such as their applications for retirement under Philex’s early voluntary retirement program and their clearance slips. Caguioa only had denials and imputation of lack of probative value of the evidence to counter the bank’s evidence. Furthermore. Mamayson. are dismissed for cause “beyond their control” such as retrenchment. Retirement results from a voluntary agreement between the employer and the employee where the latter. like petitioners. Caguioa may be validly terminated for breach of trust. Upon appeal. Franco Mallare. would have put to rest any doubt on the cause of such separation. Clearly. Roberto Ariola. in lieu of reinstatement. The court said that even government employees who are validly terminated are also deprived of these benefits. undermines its claim. Philex’s failure to submit other documents proving petitioners’ claimed retirement. Philex Mining Corp 3. Forfeiture of Benefits  Equitable PCI Bank v. Philex treated the “retirement gratuity” as petitioners’ basic separation pay. Philex informed the Department of Labor and Employment (“DOLE”). Ariola. Being a managerial employee. If reinstatement is no longer possible Philex Mining Corporation shall pay backwages as computed above plus. the letter of Jarina to the bank as well as the testimonies of the audit examiner. Hence this petition. the same was denied and thus it was raised to the CA who held that the testimonies of the people who were in on her with the scheme were insufficient to prove her involvement and justify her dismissal.  Sy v. The submission of these documents. In sum.Petition is GRANTED in part. The LA upheld the dismissal of the private respondent ruling that the dismissal was a valid exercise of management prerogative for having violated the code of conduct on loyalty and honesty. agrees to sever his employment with the former. under Philex’s Retirement Gratuity Plan. The quitclaim[s] executed in favor of the company [amount] to a valid and binding agreement. The intent to retire is not clearly established or if the retirement is involuntary. Significantly. This Office holds that the separation of the other complainants namely. 2.” the records show that Philex paid these amounts because of petitioners’ retrenchment. Candol. the Court of Appeals and Arbitrator Advincula cited the vouchers petitioners signed showing their receipt of “retirement gratuity. Martin. Metropolitan Bank and Trust Company 184 . it is to be treated as a discharge. after reaching a certain age. The court held that it was the petitioner bank who had the burden of proving the legality of the dismissal through substantial evidence. we hold that by themselves. separation pay equal to one-half month pay for every year of service. We GRANT the petition. The court found that there was more than substantial evidence supporting the decision of the labor arbiter in Caguioa’s participation in the check-discounting scheme when the LA used bank records of Jarina and Caguioa which showed 21 matches of deposits and withdrawals. petitioners.

he would have qualified for compulsory retirement under the bank's Retirement Plan. We hold that petitioner Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. VI. an employee must retire upon reaching the age of 55 years or after rendering 30 years of service. he opted to accept the bank's offer of extending his employment for another year with a corresponding salary increase. It was sufficient basis for the bank to lose trust in him. Pompenada. he authorized "kiting" or drawing of checks against uncollected funds in wanton violation of the bank's policies. reflect a regrettable lack of loyalty which he should have strengthened instead of betrayed. However. Unfortunately for him. He cannot now elude dismissal for a just cause by claiming he was already retired compulsorily. Under the bank's Retirement Plan. Although no such prohibition in the retirement plan was alleged or proved in this case. Is petitioner nevertheless entitled to retirement benefits? Under the Labor Code. vis-á-vis his long years of service with the bank. Sy. we nevertheless deny petitioner's claims because his offenses. Records show that as bank manager. To hold otherwise would be to reward acts of willful breach of trust by the employee. His premise is absurd. Such act is a clear breach of the trust reposed in him by the bank. in effect. Thus. the bank discovered his unauthorized grant of accommodation to accounts engaged in "kiting" activity. was the branch manager in Bajada. he is not entitled to any retirement benefit. whichever comes first. It would also open the floodgate to potential anomalous banking transactions by bank employees Notably. while serving such extended term. Ronald Allan Y. he could no longer be dismissed by the bank. herein substituted by his heirs Soledad Y. and Melinda S. however. Indeed.Petition is hereby DENIED. Petitioner. Since petitioner's dismissal was for a just cause. The end. the Court has also disallowed claims for retirement benefits in valid dismissal cases because the retirement plan itself precluded employees dismissed for cause from availing it. only unjustly dismissed employees are entitled to retirement benefits and other privileges including reinstatement and backwages. Davao City. theorizes that having been compulsorily retired.Dennis D. Bow. he had never retired. 185 . of respondent Metropolitan Bank and Trust Company. Sy. Sy.

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