Labor Relations

Finman General vs Inocencio Labor Standards – Impleading Sureties in Labor Cases Pan Pacific Overseas is a recruitment agency which offers jobs abroad duly registered with the POEA. Finman General is acting as Pan Pacific’s surety (as required by POEA rules and Art. 31 of the Labor Code). Pan Pacific was sued by William Inocencio and 3 others for alleged violation of Article 32 and 34 of the Labor Code. Inocencio alleged that Pan Pacific charged and collected fees but failed to provide employment abroad. POEA ruled in favor of Inocencio et al and had impleaded Finman (upon request of Inocencio) in the complaint as well (Pan Pacific changed business address without prior notice to POEA). The Labor Secretary affirmed POEA’s ruling. Finman General asserts that it should not be impleaded in the case because it is not a party to the contract between Pan Pacific and Inocencio et al. ISSUE: Whether or not Finman General is solidarily liable in the case at bar. HELD: Yes. Since Pan Pacific had thoughtfully refrained from notifying the POEA of its new address and from responding to the complaints, petitioner Finman may well be regarded as an indispensable party to the proceedings before the POEA. Whether Finman was an indispensable or merely a proper party to the proceedings, the SC held that the POEA could properly implead it as party respondent either upon the request of Inocencio et al or motu propio. Such is the situation under the Revised Rules of Court. Finman General is solidarily liable. Under Section 176 of the Insurance Code, as amended, the liability of a surety in a surety bond (Finman) is joint and several with the principal obligor (Pan Pacific). Further, Article 31 of the Labor Code provides: Art. 31. Bonds. — 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, rules and regulations, and terms and, conditions of employment as appropriate. xxx The Secretary of Labor shall have the exclusive power to determine, decide, order or direct payment from, or application of, the cash and surety bond for any claim or injury covered and guaranteed by the bonds. Eastern Assurance vs Secretary of Labor Labor Standards – Liability of Sureties – POEA Rules – Overseas Employment J&B Manpower is an overseas employment agency registered with the POEA and Eastern Assurance was its surety beginning January 1985. From 1983 to December 1985, J&B recruited 33 persons but none of them were ever deployed. These 33 persons sued J&B and the POEA as well as the Secretary of Labor ruled in favor of the 33 workers and ordered J&B to refund them (with Eastern Assurance being solidarily liable). Eastern Assurance assailed the ruling claiming that POEA and the Secretary of Labor have no jurisdiction over non-employees (since the 33 were never employed, in short, no employer-employee relations). ISSUE: Whether or not Eastern Assurance can be held liable in the case at bar. HELD: Yes. But only for the period covering from January 1985 when the surety took effect (as already held by the Labor Secretary). The Secretary of Labor was given power by Article 34 (Labor Code) and Section 35 and 36 of EO 797 (POEA Rules) to "restrict and regulate the recruitment and placement activities of all agencies," but also to "promulgate rules and regulations to carry out the objectives and implement the provisions" governing said activities. Implicit in these powers is the award of appropriate relief to the victims of the offenses committed by the respondent agency or contractor, specially the refund or reimbursement of such fees as may have been fraudulently or otherwise illegally collected, or such money, goods or services imposed and accepted in excess of what is licitly prescribed. It would be illogical and absurd to limit the sanction on an offending recruitment agency or contractor to suspension or cancellation of its license, without the concomitant obligation to repair the injury caused to its victims. Though some of the cases were filed after the expiration of the surety bond agreement between J&B and Eastern Assurance, notice was given to J&B of such anomalies even before said expiration. In this connection, it may be stressed that the surety bond provides that notice to the principal is notice to the surety. Besides, it has been held that the contract of a compensated surety like respondent Eastern Assurance is to be interpreted liberally in the interest of the promises and beneficiaries rather than strictly in favor of the surety.

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Marsaman Manning and Diamantides Maritime vs NLRC and Cajeras Labor Standards – Standard Employment Contract – POEA – Mutual Consent – Migrant Workers Act Marsaman Manning was the local agency of Diamantides Maritime. In June 1995, Marsaman contracted Cajeras to be a cook in one of the ships operated by Diamantides (MV Prigipos). The contract was for 10 months. But less than 2 months later, Cajeras was sent back home. The captain of the shop, in his entry to the Deck Log, said that the dismissal of Cajeras was of mutual consent; that a certain Dr. Hoed diagnosed Cajeras to be having some sort of a mental disorder. Cajeras subsequently sued Marsaman for illegal dismissal. NLRC ruled in favor of Cajeras. Marsaman assailed the NLRC decision. Marsaman further alleged that in awarding backpays to workers, the law applicable should be Sec. 10 or RA 8042 (or 3 months salary for every year of service). ISSUE: Whether or not Cajeras was illegally dismissed. HELD: Yes. There was no proof of the mutual consent between the captain and Cajeras. Under the Standard Employment Contract by the POEA, mutual consent of leaving overseas employment should be reduced in writing. There was no showing that Cajeras reduced his consent to writing. The captains entry in the Deck Log is a mere unilateral act which does not bind Cajeras. Further, the Deck Log was not properly produced and authenticated (unlike in a previous case Wallem Maritime Services, Inc. v. NLRC). On the other hand, Dr. Hoed was not shown to be qualified to be making such diagnosis. The court cannot take judicial notice of his findings without competent proof as to his qualification. Neither did Dr. Hoed elaborate his findings which were mere sweeping statements as to Cajeras’ illness. It did not show how such illness affected Cajeras’ function. In fact, as per the last rating of Cajeras, he was rated as a ―Very Good‖ cook. Section 10 of RA 8042 (Migrant Workers Act) is indeed applicable but the assertion of Marsaman to pay only 3 months of Cajeras’s salary is untenable. A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his employment contract or three months salary for every year of the unexpired term, whichever is less, comes into play only when the employment contract concerned has a term of at least one year or more (Cajeras was contracted for 10 months only). This is evident from the words for every year of the unexpired term which follows the words salaries x x x for three months. To follow Marsaman’s thinking that Cajeras is entitled to three months salary only simply because it is the lesser amount is to completely disregard and overlook some words used in the statute while giving effect to some. This is contrary to the well-established rule in legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be given effect since the law-making body is presumed to know the meaning of the words employed in the statue and to have used them advisedly. Ut res magis valeat quam pereat. Pacific Asia Overseas Shipping vs NLRC and Rances Labor Standards – Delay in Filing Appeal (Employer) – Foreign Judgments Cannot Be Enforced by POEA Pacific Asia is an overseas employment agency that provided Rances work abroad. Rances was engaged by Gulf-East Ship Management a Radio Operator but due to insubordination he was dismissed our months later. According to Rances he sued Gulf-East in Dubai and the Gulf-East compromised with him that instead of paying him $9k+ they’ll just pay him $5.5k plus his fare going home to the Philippines plus if in case Rances’ wife does not agree with the amount of the allowance being sent to her via Pacific Asia, Rances is entitled to have $1.5k more from pacific Asia. Back in the Philippines, Rances was sued by Pacific Asia for acts unbecoming of a marine officer (due in part to his insubordination to Pacific Asia’s client). Rances filed a counterclaim for the $1.5k as his wife did not agree with the monthly allowance sent by Pacific Asia to her. POEA ruled in favor of Pacific Asia but did not rule on Rances’ counterclaim. Rances then filed a separate case for his $1.5k claim. Rances produced the original copy of the Dubai court decision awarding him the compromised amount of $5.5k. The said court decision was in Arabic but it came with an English translation. It also came with a certification from a certain Mohd Bin Saleh who was purportedly an Honorary Consul for the Philippines. This time he won. Pacific Asia appealed but its appeal was one day late after the reglementary period. POEA denied the appeal. NLRC likewise denied the appeal. ISSUE: Whether or not Pacific Asia can be allowed to appeal. HELD: Yes. The delay was due to an excusable mistake. Apparently, there was a mistake in the filing of the appeal when the new messenger honestly thought that the appeal was supposed to be filed in NLRC Intramuros but actually it was supposed to be in POEA Ortigas (that happened to be the last day as well, and when he was advised to go to Ortigas, offices were already closed). Also, on the merits; POEA has no jurisdiction to enforce foreign judgments. It’s the regular courts that have jurisdiction. The POEA is not a court; it is an administrative agency exercising, inter alia, adjudicatory or quasi-judicial functions. Further, Rances is not suing on the strength of an employer-employee relationship between him and Gulf-East, but rather on the strength of a foreign judgment.

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And, even if the POEA has jurisdiction over the matter, it cannot take in evidence the alleged original copy o the court decision from Dubai as it was not properly authenticated pursuant to the Rules of Court (Sect 25, 26 Rule 132). The translation was also not duly authenticated. And an honorary consul is not authorized to make authentication of foreign public records. Chavez vs Bonto-Perez Labor Standards – Standard Employment Contract for Entertainers – Laches Chavez is a dancer who was contracted by Centrum Placement & Promotions Corporation to perform in Japan for 6 months. The contract was for $1.5k a month, which was approved by POEA. After the approval of said contract, Chavez entered into a side contract reducing her salary with her Japanese employer through her local manager-agency (Jaz Talents Promotion). The salary was reduced to $500 and $750 was to go to Jaz Talents. In February 1991 (two years after the expiration of her contract), Chavez sued Centrum Placement and Jaz Talents for underpayment of wages before the POEA. The POEA ruled against her. POEA stated that the side agreement entered into by Chavez with her Japanese employer superseded the Standard Employment Contract; that POEA had no knowledge of such side agreement being entered into; that Chavez is barred by laches for sleeping on her right for two years. ISSUE: Whether or not Chavez is entitled to relief. HELD: Yes. The SC ruled that the managerial commission agreement executed by Chavez to authorize her Japanese Employer to deduct her salary is void because it is against our existing laws, morals and public policy. It cannot supersede the standard employment contract approved by the POEA with the following stipulation appended thereto: It is understood that the terms and conditions stated in this Employment Contract are in conformance with the Standard Employment Contract for Entertainers prescribed by the POEA under Memorandum Circular No. 2, Series of 1986. Any alterations or changes made in any part of this contract without prior approval by the POEA shall be null and void; The side agreement which reduced Chavez's basic wage is null and void for violating the POEA's minimum employment standards, and for not having been approved by the POEA. Here, both Centrum Placement and Jaz Talents are solidarily liable. Laches does not apply in the case at bar. In this case, Chavez filed her claim well within the three-year prescriptive period for the filing of money claims set forth in Article 291 of the Labor Code. For this reason, laches is not applicable. Filamer Christian Institute vs IAC and Kapunan August 17, 1992 Labor Standards – Human Resources Development – Torts – Section 14, Rule X, Book III, IRR (Labor Code) NOTE: This case reversed Filamer vs CA (October 16, 1990) Daniel Funtecha was a working student of Filamer. He was assigned as the school janitor to clean the school 2 hours every morning. Allan Masa was the son of the school president and at the same time he was the school’s jeepney service driver. On October 20, 1977 at about 6:30pm, after driving the students to their homes, Masa returned to the school to report and thereafter have to go home with the jeep so that he could fetch the students early in the morning. Masa and Funtecha live in the same place so they usually go home together. Funtecha had a student driver’s license so Masa let him take the driver’s seat. While Funtecha was driving, he accidentally hit an elderly Kapunan which led to his hospitalization for 20 days. Kapunan filed a criminal case and an independent civil action based on Article 2180 against Funtecha. In the independent civil action, the lower court ruled that Filamer is subsidiarily liable for the tortious act of Funcheta and was compelled to pay for damages based on Article 2180 which provides that employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks. Filamer assailed the decision and it argued that under Section 14, Rule X, Book III of the Labor Code IRR, working scholars are excluded from the employment coverage hence there is no employer-employee relations between Filamer and Funcheta; that the negligent act of Funcheta was due to negligence only attributable to him alone as it is outside his assigned task of being the school janitor. The CA denied Filamer’s appeal but the Supreme Court agreed with Filamer. Kapunan filed for a motion for reconsideration. ISSUE: Whether or not Filamer should be held subsidiarily liable. HELD: Yes. This time, the SC ruled in favor of Kapunan (actually his heirs cause by this time Kapunan was already dead). The provisions of Section 14, Rule X, Book III of the Labor Code IRR was only meant to provide guidelines as compliance with labor provisions on working conditions, rest periods, and wages is concerned. This does not in any way affect the provisions of any other laws like the civil code. The IRR cannot defeat the provisions of the Civil Code. In other words, Rule X is merely a guide to the

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enforcement of the substantive law on labor. There is a distinction hence Section 14, Rule X, Book III of the Rules is not the decisive law in a civil suit for damages instituted by an injured person during a vehicular accident against a working student of a school and against the school itself. The present case does not deal with a labor dispute on conditions of employment between an alleged employee and an alleged employer. It invokes a claim brought by one for damages for injury caused by the patently negligent acts of a person, against both doer-employee and his employer. Hence, the reliance on the implementing rule on labor to disregard the primary liability of an employer under Article 2180 of the Civil Code is misplaced. An implementing rule on labor cannot be used by an employer as a shield to void liability under the substantive provisions of the Civil Code. Funtecha is an employee of Filamer. He need not have an official appointment for a driver's position in order that Filamer may be held responsible for his grossly negligent act, it being sufficient that the act of driving at the time of the incident was for the benefit of Filamer (the act of driving the jeep from the school to Masa’s house is beneficial to the school because this enables Masa to do a timely school transportation service in the morning). Hence, the fact that Funtecha was not the school driver or was not acting with the scope of his janitorial duties does not relieve Filamer of the burden of rebutting the presumption juris tantum that there was negligence on its part either in the selection of a servant or employee, or in the supervision over him. Filamer has failed to show proof of its having exercised the required diligence of a good father of a family over its employees Funtecha and Allan. Escorpizo vs University of Baguio Labor Standards – Illegal Dismissal - CBA Escorpizo was a high school teacher in UB contracted to be a probationary teacher from 1989-1991. The terms of her employment stipulate that in order for her to be regularized, she should get a satisfactory rating and she should pass the board examination for teachers. After the lapse of her probationary period, UB was not supposed to re-sign her because she failed the board exam but upon her pleading she was re-signed for one year but still a probationary. She took the board exam again but she failed during the same school year. So when UB was considering the list of teachers for next year, Escopizo was no longer considered. Meanwhile, Escorpizo again took the exam this time she passed. But UB no longer took her in to teach. Her labor union assisted her in suing UB averring that in the CBA, passing the board is not a requisite to be regularized. ISSUE: Whether or not Escorpizo should be reinstated as a teacher. HELD: No. Escorpizo was not illegally dismissed. UB was well within its right to require its teachers to pass the board before teaching, The Department of Education also rolled out an order requiring that teachers should pass the board before teaching. This is to ensure the quality of education in the country. As between the CBA and the DECS order, what should prevail is the requirements so provided by the government. Arica vs NLRC February 28, 1989 Labor Standards – Hours of Work – Assembly Time Teofilo Arica et al and 561 others sued Standard Fruits Corporation (STANFILCO) Philippines for allegedly not paying the workers for their assembly time which takes place every work day from 5:30am to 6am. The assembly time consists of the roll call of the workers; their getting of assignments from the foreman; their filling out of the Laborer’s Daily Accomplishment Report; their getting of tools and equipments from the stockroom; and their going to the field to work. The workers alleged that this is necessarily and primarily for STANFILCO’s benefit. ISSUE: Whether or not the worker’s assembly time should be paid. HELD: No. The thirty minute assembly time long practiced and institutionalized by mutual consent of the parties under Article IV, Section 3, of the Collective Bargaining Agreement cannot be considered as 'waiting time' within the purview of Section 5, Rule I, Book III of the Rules and Regulations Implementing the Labor Code . . . Furthermore, the thirty (30)-minute assembly is a deeply-rooted, routinary practice of the employees, and the proceedings attendant thereto are not infected with complexities as to deprive the workers the time to attend to other personal pursuits. In short, they are not subject to the absolute control of the company during this period, otherwise, their failure to report in the assembly time would justify the company to impose disciplinary measures.

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Rada vs NLRC January 9, 1992 Labor Standards – Hours of Work – OT Pay of a Project Based Employee In 1977, Rada was contracted by Philnor Consultants and Planners, Inc as a driver. He was assigned to a specific project in Manila. The contract he signed was for 2.3 years. His task was to drive employees to the project from 7am to 4pm. He was allowed to bring home the company vehicle in order to provide a timely transportation service to the other project workers. The project he was assigned to was not completed as scheduled hence, since he has a satisfactory record, he was re-contracted for an additional 10 months. After 10 months the project was not yet completed. Several contracts thereafter were made until the project was finished in 1985. At the completion of the project, Rada was terminated as his employment was co-terminous with the project. He later sued Philnor for non payment of separation pay and overtime pay. He said he is entitled to be paid OT pay because he uses extra time to get to the project site from his home and from the project site to his home everyday – in total, he spends an average of 3 hours OT every day. ISSUE: Whether or not Rada is entitled to separation pay and OT pay. HELD: Separation pay – NO. Overtime pay – Yes. Separation Pay The SC ruled that Rada was a project employee whose work was coterminous with the project for which he was hired. Project employees, as distinguished from regular or non-project employees, are mentioned in Section 281 of the Labor Code as those '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. '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, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination.' OT Pay Rada is entitled to OT pay. The fact that he picks up employees of Philnor at certain specified points along EDSA in going to the project site and drops them off at the same points on his way back from the field office going home to Marikina, Metro Manila is not merely incidental to Rada's job as a driver. On the contrary, said transportation arrangement had been adopted, not so much for the convenience of the employees, but primarily for the benefit of Philnor. As embodied in Philnor’s memorandum, they allowed their drivers to bring home their transport vehicles in order for them to provide a timely transport service and to avoid delay – not really so that the drivers could enjoy the benefits of the company vehicles nor for them to save on fair. Engineering Equipment vs Minister of Labor September 25, 1985 Labor Standards – Working Conditions and Rest Periods – Overtime Pay In 1977, Aspera was contracted by Engineering Equipment, Inc. to work as a mechanical engineer in Saudi Arabia. He was contracted to work for 10 hours a day. Later he sued Engineering Equipment claiming that he is entitled to overtime pay because under the law, the working hours should be 8 hours a day only hence the extra 2 hours should be paid as overtime. Engineering Equipment averred that Aspera is a managerial employee. ISSUE: Whether or not Aspera is entitled to OT pay. HELD: No. Engineering Equipment was able to prove that Aspera is part of the managerial staff, a fact which Aspera did not deny. Aspera was a managerial employee exercising supervision and control over rank-and-file employees with power to recommend disciplinary action or their dismissal. As a managerial employee within the meaning of the law, he was not entitled to overtime pay.

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Jose Rizal College vs NLRC December 1, 1987 Labor Standards – Working Conditions and Rest Periods – Holiday Pay The National Alliance of Teachers sued Jose Rizal College for alleged nonpayment of unworked holidays from 1975 to 1977. The members of the Alliance concerned are faculty members who are paid on the basis of student contract hour. ISSUE: Whether or not the school faculty are entitled to unworked holiday pay. HELD: As far as unworked regular holidays are concerned, the teachers are not entitled to holiday pay. Regular holidays specified as such by law are known to both school and faculty members as no class days;" certainly the latter do not expect payment for said unworked days, and this was clearly in their minds when they entered into the teaching contracts. On the other hand, the teachers are entitled to be paid for unworked special holidays. Otherwise stated, the faculty member, although forced to take a rest, does not earn what he should earn on that day. Be it noted that when a special public holiday is declared, the faculty member paid by the hour is deprived of expected income, and it does not matter that the school calendar is extended in view of the days or hours lost, for their income that could be earned from other sources is lost during the extended days. Similarly, when classes are called off or shortened on account of typhoons, floods, rallies, and the like, these faculty members must likewise be paid, whether or not extensions are ordered. Associated Labor Unions vs Montejo October 14, 1994 Labor Standards – Working Conditions and Rest Periods – Holiday Pay – SK Elections Associated Labor Union entered into a CBA with AMS Farming Corporation in 1990. The CBA was to be effective from 1990 to 1995. Part of the CBA provides that AMS Farming shall be paying for holiday pay which shall include among others local and national elections. In 1992, the President declared December 4, 1992 as a general election for Sanggunian Kabataan throughout the nation. AMS Farming did not pay any holiday for said day as it argued that said election by any stretch of the imagination cannot be considered as a local election within the meaning of CBA because not all people can vote in the said election but only qualified youths. The issue reached the Labor Arbiter and the arbiter (Montejo) ruled in favor of AMS Farming. ISSUE: Whether or not the SK Election held on December 4, 1994 is a holiday. HELD: Yes. It is in fact a regular election as even defined by the Revised Administrative Code of 1987. It was even announced through the media that such day is a nonworking holiday. Consequently, whether in the context of the CBA or the Labor Code, December 4, 1992 was a holiday for which holiday pay should be paid by AMS Farming Corporation. Maranaw Hotels and Resort Corporation vs NLRC February 23, 1999 Labor Standards – Working Conditions and Rest Periods – Illegal Dismissal Damalerio was a roomboy for Maranaw Hotels. One day, he was cleaning the room of one of the guests when he saw the private stuff of the guest scattered all over the floor. So he took it upon him to pick those up and put in the guest’s bag but then when he was doing so the guest (Jamie Glaser) entered the room and saw Damalerio’s hand inside Glaser’s bag. Glaser filed a complaint against Damalerio. Damalerio was dismissed subsequently. ISSUE: Whether or not Damalerio was illegally dismissed. HELD: Yes. Although it was not completely proper for Damalerio to be touching the things of a hotel guest while cleaning the hotel rooms, personal belongings of hotel guests being off-limits to roomboys, under the attendant facts and circumstances, that the dismissal of Damalerio was unwarranted. To be sure, the investigation held by the hotel security people did not unearth enough evidence of culpability. It bears repeating that Glaser lost nothing. Albeit Maranaw Hotels may have reasons to doubt the honesty and trustworthiness of Damalerio, as a result of what happened, absent sufficient proof of guilt, Damalerio, who is a rank-and-file employee, cannot be legally dismissed. As for the service charges received by Maranaw Hotels during the period where he was not able to work he’s entitled to the shares therefrom. But if he chooses not to be reinstated by reason of the estranged relations with the hotel, he’s entitled to separation pay but without the shares from the service charges anymore.

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Mabeza vs NLRC April 18, 1997 Labor Standards – Abandonment of Work – Loss of Confidence Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an inspection was made by the DOLE at Hotel Supreme and the DOLE inspectors discovered several violations by the hotel management. Immediately, the owner of the hotel, Peter Ng, directed his employees to execute an affidavit which would purport that they have no complaints whatsoever against Hotel Supreme. Mabeza signed the affidavit but she refused to certify it with the prosecutor’s office. Later, when she reported to work, she was not allowed to take her shift. She then asked for a leave but was not granted yet she’s not being allowed to work. In May 1991, she then sued Peter Ng for illegal dismissal. Peter Ng, in his defense, said that Mabeza abandoned her work. In July 1991, Peter Ng also filed a criminal complaint against Mabeza as he alleged that she had stolen a blanket and some other stuff from the hotel. Peter Ng went on to amend his reply in the labor case to make it appear that the reason why he dismissed Mabeza was because of his loss of confidence by reason of the theft allegedly committed by Mabeza. The labor arbiter who handled the case, a certain Felipe Pati, ruled in favor of Peter Ng. ISSUE: Whether or not there is abandonment in the case at bar. Whether or not loss of confidence as ground for dismissal applies in the case at bar. HELD: No. The side of Peter Ng is bereft of merit so is the decision of the Labor Arbiter which was unfortunately affirmed by the NLRC. Abandonment Abandonment is not present. Mabeza returned several times to inquire about the status of her work or her employment status. She even asked for a leave but was not granted. Her asking for leave is a clear indication that she has no intention to abandon her work with the hotel. Even the employer knows that his purported reason of dismissing her due to abandonment will not fly so he amended his reply to indicate that it is actually ―loss of confidence‖ that led to Mabeza’s dismissal. Loss of Confidence It is true that loss of confidence is a valid ground to dismiss an employee. But this is ideally only applied to workers whose positions require a certain level or degree of trust particularly those who are members of the managerial staff. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property from the property custodian each day and who has to account for each and every towel or bedsheet utilized by the hotel's guests at the end of her shift would not fall under any of these two classes of employees for which loss of confidence, if ably supported by evidence, would normally apply. Further, the suspicious filing by Peter Ng of a criminal case against Mabeza long after she initiated her labor complaint against him hardly warrants serious consideration of loss of confidence as a ground of Mabeza’s dismissal. Norma Mabeza vs NLRC April 18, 1997 Labor Standards – Wages – Facilities vs Supplements Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an inspection was made by the DOLE at Hotel Supreme and the DOLE inspectors discovered several violations by the hotel management. Immediately, the owner of the hotel, Peter Ng, directed his employees to execute an affidavit which would purport that they have no complaints whatsoever against Hotel Supreme. But Mabeza refused to certify said affidavit with the fiscal’s office so this led to her dismissal. She sued Peter Ng and one of her complaints against him is underpayment because her wage was less than the minimum wage. Peter Ng argued that the reason for such low payment was because she was being given free lodging, water, electricity and water consumption by the hotel. ISSUE: Whether or not such amenities provided by the hotel be considered as facilities which are deductible from Mabeza’s wage. HELD: No. There are requisites before such can be done and they are: 1. 2. 3. Proof must be shown that such facilities are customarily furnished by the trade. The provision of deductible facilities must be voluntarily accepted in writing by the employee. Facilities must be charged at fair and reasonable value.

None of these were complied with in the case at bar. More significantly, the food and lodging, or the electricity and water consumed by Mabeza were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not a facility. The criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the purpose. Considering, therefore, that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel, such as Hotel Supreme.

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Racho vs Ilagan January 2, 1968 Labor Standards – Minimum Wage Law – Exemption from Compliance Racho was a market cleaner in the municipality of Ilagan from 1954 to January 1960. At the time of his retirement, he was earning P60.00 per month. He died in October 1960. His wife petitioned to claim the salary differentials because supposedly, the minimum wage at the time when his husband was working was P120.00 a month. The municipality of Ilagan appealed that they cannot comply with the Minimum Wage Law because it lack funds. ISSUE: Whether or not lack of funds of a local government unit excuses it from compliance with the Minimum Wage Law. HELD: No. Lack of funds of a municipality does not excuse it from paying the statutory minimum wages to its employees, which, after all, is a mandatory statutory obligation of the municipality. To uphold such defense of lack of available funds would render the Minimum Wage Law futile and defeat its purpose.

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