Labor Law 2011

Philippine Supreme Court Decisions on Labor Law
1. Labor Law (2011)

JANUARY
DOCTRINE CASE / CASE CONTENT
Apprenticeship
agreement; validity.
Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et
al., G.R. No. 187320, January 26, 2011.

The apprenticeship agreements did not indicate the trade or occupation
in which the apprentice would be trained; neither was the apprenticeship
program approved by the Technical Education and Skills Development
Authority (TESDA). These were defective as they were executed in
violation of the law and the rules. Moreover, with the expiration of the
rst agreement and the retention of the employees, the employer, to all
intents and purposes, recognized the completion of their training and
their acquisition of a regular employee status. To foist upon them the
second apprenticeship agreement for a second skill which was not even
mentioned in the agreement itself, is a violation of the Labor Codes
implementing rules and is an act manifestly unfair to the employees.

Complaint;
reinstatement.
Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et
al., G.R. No. 167291, January 12, 2011.

Petitioners question the order to reinstate respondents to their former
positions, considering that the issue of reinstatement was never brought
up before the Court of Appeals and respondents never questioned the
award of separation pay to them. Section 2 (c), Rule 7 of the Rules of
Court provides that a pleading shall specify the relief sought, but may add
a general prayer for such further or other reliefs as may be deemed just
and equitable. Under this rule, a court can grant the relief warranted by
the allegation and the evidence even if it is not specically sought by the
injured party; the inclusion of a general prayer may justify the grant of a
remedy different from or in addition to the specic remedy sought, if the
facts alleged in the complaint and the evidence introduced so warrant.
The prayer in the complaint for other reliefs equitable and just in the
premises justies the grant of a relief not otherwise specically prayed
for. Therefore, the court may grant relief warranted by the allegations and
the proof even if no such relief is prayed for. In the instant case, aside
from their specic prayer for reinstatement, respondents, in their
separate complaints, prayed for such reliefs which are deemed just and
equitable.

Collection of accrued
wages; two-fold test.
Social Security System vs. Efren Capada, et al., G.R. No. 168501,
January 31, 2011.

After the Labor Arbiters decision is reversed by a higher
tribunal, the employee may be barred from collecting the accrued wages,
if it is shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer. The two-fold
test in determining whether an employee is barred from recovering his
accrued wages requires that (1) there must be actual delay or that the
order of reinstatement pending appeal was not executed prior to its
reversal; and (2) the delay must not be due to the employers unjustied
act or omission. If the delay is due to the employers unjustied refusal,
the employer may still be required to pay the salaries notwithstanding
the reversal of the Labor Arbiters Decision.

Disciplinary
measures;
management
prerogative.
Primo E. Caong, Jr., et al. vs. Avelino Regualos, G.R. No. 179428,
January 26, 2011.

The policy of suspending drivers pending payment of arrears in their
boundary obligations is reasonable. It is acknowledged that an employer
has free rein and enjoys a wide latitude of discretion to regulate all
aspects of employment, including the prerogative to instill discipline on
his employees and to impose penalties, including dismissal, if warranted,
upon erring employees. This is a management prerogative. Indeed, the
manner in which management conducts its own affairs to achieve its
purpose is within the managements discretion. The only limitation on the
exercise of management prerogative is that the policies, rules, and
regulations on work-related activities of the employees must always be
fair and reasonable, and the corresponding penalties, when prescribed,
commensurate to the offense involved and to the degree of the infraction

Dismissal;
constructive
dismissal.
The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R.
No. 181146, January 26, 2011.

Respondent was suspended for one year after being charged with and
found liable for AWOL. After serving her suspension, respondent was
allowed to return to work. Respondent cannot be considered to have been
constructively dismissed by the petitioner during her period of
suspension. Constructive dismissal occurs when there is cessation of
work because continued employment is rendered impossible,
unreasonable, or unlikely as when there is a demotion in rank or
diminution in pay or when a clear discrimination, insensibility, or disdain
by an employer becomes unbearable to the employee leaving the latter
with no other option but to quit. In this case, there was no cessation of
employment relations between the parties. It is unrefuted that
respondent promptly resumed teaching at the university right after the
expiration of the suspension period. In other words, respondent never
quit. Hence, she cannot claim to have been left with no choice but to quit,
a crucial element in a nding of constructive dismissal.

Dismissal; due
process.
Robinsons Galleria/Robinsons Supermarket Corp. and/or Jess Manuel
vs. Irene R. Ranchez, G.R. No. 177937, January 19, 2011.

Respondent employee reported to the petitioner employer the loss of
cash which she placed inside the company locker. Immediately, petitioner
ordered that she be strip-searched by the company guards. However, the
search on her and her personal belongings yielded nothing. The petitioner
also reported the matter to the police and requested the Prosecutors
Ofce for an inquest. Respondent was constrained to spend two weeks in
jail for failure to immediately post bail. The Court ruled that petitioners
failed to accord respondent substantive and procedural due process.
Article 277(b) of the Labor Code mandates that subject to the
constitutional right of workers to security of tenure and their right to be
protected against dismissal, except for just and authorized cause and
without prejudice to the requirement of notice under Article 283 of the
same Code, the employer shall furnish the worker, whose employment is
sought to be terminated, a written notice containing a statement of the
causes of termination, and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of a representative if he
so desires, in accordance with company rules and regulations pursuant to
the guidelines set by the Department of Labor and Employment. The due
process requirements under the Labor Code are mandatory and may not
be supplanted by police investigation or court proceedings. The criminal
aspect of the case is considered independent of the administrative aspect.
Thus, employers should not rely solely on the ndings of the Prosecutors
Ofce. They are mandated to conduct their own separate investigation,
and to accord the employee every opportunity to defend himself.

Dismissal; neglect of
duty.
Hospital Management Services Medical Center Manila vs. Hospital
Management Services, Inc. Medical Center Manila Employees
Association-AFW., G.R. No. 176287, January 31, 2011.

Neglect of duty, to be a ground for dismissal, must be both gross and
habitual. Gross negligence connotes want of care in the performance of
ones duties. Habitual neglect implies repeated failure to perform ones
duties for a period of time, depending upon the circumstances. A single or
isolated act of negligence does not constitute a just cause for the dismissal
of the employee.

Dismissal; negligence Hospital Management Services Medical Center Manila vs. Hospital
in patient
management.
Management Services, Inc. Medical Center Manila Employees
Association-AFW., G.R. No. 176287, January 31, 2011.

Negligence is dened as the failure to exercise the standard of care that a
reasonably prudent person would have exercised in a similar situation.
The Court emphasizes that the nature of the business of a hospital
requires a higher degree of caution and exacting standard of diligence in
patient management and health care as what is involved are lives of
patients who seek urgent medical assistance. An act or omission that falls
short of the required degree of care and diligence amounts to serious
misconduct which constitutes a sufcient ground for dismissal.
Employer-employee
relationship; jeepney
driver.

Primo E. Caong, Jr., et al. vs. Avelino Regualos, G.R. No. 179428,
January 26, 2011.

It is already settled that the relationship between jeepney
owners/operators and jeepney drivers under the boundary system is that
of employer-employee and not of lessor-lessee. The fact that the drivers
do not receive xed wages but only get the amount in excess of the so-
called boundary that they pay to the owner/operator is not sufcient to
negate the relationship between them as employer and employee.

Employer-employee
relationship; primary
element.
Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.),
Inc. and Renato A. Vergel de Dios, G.R. No. 167622, January 25, 2011

Control over the performance of the task of one providing service both
with respect to the means and manner, and the results of the service is
the primary element in determining whether an employment relationship
exists. Petitioner asserts that his employer Manulifes control over him
was demonstrated (1) when it set the objectives and sales targets
regarding production, recruitment and training programs; and (2) when
it prescribed the Code of Conduct for Agents and the Manulife Financial
Code of Conduct to govern his activities. However, the court ruled that all
these appear to speak of control by the insurance company over its
agents. There are built-in elements of control specic to an insurance
agency, which do not amount to the elements of control that characterize
an employment relationship governed by the Labor Code. They are,
however, controls aimed only at specic results in undertaking an
insurance agency, and are, in fact, parameters set by law in dening an
insurance agency and the attendant duties and responsibilities an
insurance agent must observe and undertake. They do not reach the level
of control into the means and manner of doing an assigned task that
invariably characterizes an employment relationship as dened by labor
law. To reiterate, guidelines indicative of labor law control do not
merely relate to the mutually desirable result intended by the contractual
relationship; they must have the nature of dictating the means and
methods to be employed in attaining the result. Petitioner is an insurance
agent not an employee.

Employer-employee
relationship;
probationary
employment.

A probationary employee, like a regular employee, enjoys security of
tenure. However, in cases of probationary employment, aside from just or
authorized causes of termination, an additional ground is provided under
Article 281 of the Labor Code, i.e., the probationary employee may also be
terminated for failure to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at
the time of the engagement. Thus, the services of an employee who has
been engaged on probationary basis may be terminated for any of the
following: (1) a just or (2) an authorized cause; and (3) when he fails to
qualify as a regular employee in accordance with reasonable standards
prescribed by the employer.

Employer-employee
relationship; regular
employment.
al., G.R. No. 187320, January 26, 2011.

The respondent employees were already rendering service to the
company when they were made to undergo apprenticeship. The
respondent were regular employees because they occupied positions
such as machine operator, scaleman and extruder operator tasks that
are usually necessary and desirable in petitioner employers usual
business or trade as manufacturer of plastic building materials. These
tasks and their nature characterized the respondents as regular
employees under Article 280 of the Labor Code. Thus, when they were
dismissed without just or authorized cause, without notice, and without
the opportunity to be heard, their dismissal was illegal under the law

Illegal dismissal;
strained relations.

Article 279 of the Labor Code provides that an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of
seniority rights and other privileges, to full backwages, inclusive of
allowances, and to other benets or their monetary equivalent computed
from the time his compensation was withheld from him up to the time of
his actual reinstatement. However, due to the strained relations of the
parties, the payment of separation pay has been considered an acceptable
alternative to reinstatement, when the latter option is no longer desirable
or viable. On the one hand, such payment liberates the employee from
what could be a highly oppressive work environment. On the other, the
payment releases the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust. Thus, as an
illegally or constructively dismissed employee, respondent is entitled to:
(1) either reinstatement, if viable, or separation pay, if reinstatement is no
longer viable; and (2) backwages. These two reliefs are separate and
distinct from each other and are awarded conjunctively.

Illegal recruitment;
elements.
People of the Philippines vs. Teresita Tessie Laogo, G.R. No. 176264,
January 10, 2011.

Recruitment and placement refers to the act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and
includes referrals, contract services, promising or advertising for
employment, locally or abroad, whether for prot or not. When a person
or entity, in any manner, offers or promises for a fee employment to two
or more persons, that person or entity shall be deemed engaged in
recruitment and placement. Article 38(a) of the Labor Code, as amended,
species that recruitment activities undertaken by non-licensees or non-
holders of authority are deemed illegal and punishable by law. And when
the illegal recruitment is committed against three or more persons,
individually or as a group, then it is deemed committed in large scale and
carries with it stiffer penalties as the same is deemed a form of economic
sabotage. But to prove illegal recruitment, it must be shown that the
accused, without being duly authorized by law, gave complainants the
distinct impression that he had the power or ability to send them abroad
for work, such that the latter were convinced to part with their money in
order to be employed. It is important that there must at least be a promise
or offer of an employment from the person posing as a recruiter, whether
locally or abroad.

Illegal dismissal;
execution of waiver
and quitclaim.
Bernadeth Londonio and Joan Corcoro vs. Bio Research, Inc. and
Wilson Y. Ang, G.R. No. 191459, January 17, 2011.

An employees execution of a nal settlement and receipt of amounts
agreed upon does not foreclose his right to pursue a claim for illegal
dismissal. Thus, an employee illegally retrenched is entitled to
reinstatement without loss of seniority rights and privileges, as well as to
payment of full backwages from the time of her separation until actual
reinstatement, less the amount which he/she received as retrenchment
pay.

Jurisdiction; labor
arbiter.
Renato Real vs. Sangu Philippines, Inc. et al., G.R. No. 168757. January
19, 2011.

Petitioner was removed from his position as a manager through a Board
Resolution. Petitioner led a complaint for illegal dismissal before the
labor arbiter. Respondents claimed that petitioner is both a stockholder
and a corporate ofcer of respondent corporation, hence, his action
against respondents is an intra-corporate controversy over which the
Labor Arbiter has no jurisdiction. The Court ruled that this is not an intra-
corporate controversy but a labor case cognizable by the labor arbiter. To
determine whether a case involves an intra-corporate controversy that is
to be heard and decided by the branches of the RTC specically
designated by the Court to try and decide such cases, two tests must be
applied: (a) the status or relationship test, and (2) the nature of the
controversy test. The rst test requires that the controversy arise out of
intra-corporate or partnership relations among the stockholders,
members or associates of the corporation, partnership or association,
between any or all of them and the corporation, partnership or
association of which they are stockholders, members or associates;
between such corporation, partnership, or association and the public or
between such corporation, partnership, or association and the State
insofar as it concerns its franchise, license or permit to operate. The
second test requires that the dispute among the parties be intrinsically
connected with the regulation of the corporation. The Court in this case
held that petitioner is not a corporate ofcer because he was not validly
appointed by the Board, thus, failing the relationship test, and that this is
a case of employment termination which is a labor controversy and not
an intra-corporate dispute, thus failing the nature of the controversy test.

Jurisdiction; labor
dispute.
The University of the Immaculate Conception, et al. vs. NLRC, et al., G.R.
No. 181146, January 26, 2011.

Article 217 of the Labor Code states that unfair labor practices and
termination disputes fall within the original and exclusive jurisdiction of
the Labor Arbiter. As an exception, under Article 262 the Voluntary
Arbitrator, upon agreement of the parties, shall also hear and decide all
other labor disputes including unfair labor practices and bargaining
deadlocks. For the exception to apply, there must be agreement between
the parties clearly conferring jurisdiction to the voluntary arbitrator. Such
agreement may be stipulated in a collective bargaining agreement.
However, in the absence of a collective bargaining agreement, it is enough
that there is evidence on record showing the parties have agreed to resort
to voluntary arbitration.

NLRC; factual
ndings.
al., G.R. No. 167291, January 12, 2011.

Factual ndings of labor ofcials, who are deemed to have acquired
expertise in matters within their jurisdiction, are generally accorded not
only respect but even nality by the courts when supported by
substantial evidence, i.e., the amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. But
these ndings are not infallible. When there is a showing that they were
arrived at arbitrarily or in disregard of the evidence on record, they may
be examined by the courts. The CA can grant the petition for certiorari if it
nds that the NLRC, in its assailed decision or resolution, made a factual
nding not supported by substantial evidence. Thus, it is within the
jurisdiction of the CA to review the ndings of the NLRC.

Petition; certicate of
non-forum shopping.
al., G.R. No. 167291, January 12, 2011.

While the general rule is that the certicate of non-forum shopping must
be signed by all the plaintiffs in a case and the signature of only one of
them is insufcient, the Court has stressed that the rules on forum
shopping, which were designed to promote and facilitate the orderly
administration of justice, should not be interpreted with such absolute
literalness as to subvert its own ultimate and legitimate objective. Strict
compliance with the provision regarding the certicate of non-forum
shopping underscores its mandatory nature in that the certication
cannot be altogether dispensed with or its requirements completely
disregarded. It does not, however, prohibit substantial compliance
therewith under justiable circumstances, considering especially that
although it is obligatory, it is not jurisdictional. In a number of cases, the
Court has consistently held that when all the petitioners share a common
interest and invoke a common cause of action or defense, the signature of
only one of them in the certication against forum shopping substantially
complies with the rules.

Petition; failure to
attach documents.
al., G.R. No. 187320, January 26, 2011.

The respondent workers sought that the petition be dismissed outright
for the petitioners failure to attach to the petition a copy of the
Production and Work Schedule and a copy of the compromise agreement
allegedly entered into material portions of the record that should
accompany and support the petition, pursuant to Section 4, Rule 45 of the
Rules of Court. In Mariners Polytechnic Colleges Foundation, Inc. v. Arturo
J. Garchitorena the Court held that the phrase of the pleadings and other
material portions of the record xxx as would support the allegation of the
petition clearly contemplates the exercise of discretion on the part of the
petitioner in the selection of documents that are deemed to be relevant to
the petition. The crucial issue to consider then is whether or not the
documents accompanying the petition sufciently supported the
allegations therein. The failure to attach copy of the subject documents is
not fatal as the challenged CA decision clearly summarized the
labor tribunals rulings.

Petition; verication. Prince Transport, Inc. and Mr. Renato Claros vs. Diosdado Garcia, et
al., G.R. No. 167291, January 12, 2011.

The verication requirement is deemed substantially complied with when
some of the parties who undoubtedly have sufcient knowledge and
belief to swear to the truth of the allegations in the petition had signed the
same. Such verication is deemed a sufcient assurance that the matters
alleged in the petition have been made in good faith or are true and
correct, and not merely speculative. In any case, the settled rule is that a
pleading which is required by the Rules of Court to be veried, may
be given due course even without a verication if the circumstances
warrant the suspension of the rules in the interest of justice. Indeed, the
absence of a verication is not jurisdictional, but only a formal defect,
which does not of itself justify a court in refusing to allow and act on a
case. Hence, the failure of some of the respondents to sign the verication
attached to their Memorandum of Appeal led with the NLRC is not fatal
to their cause of action.

Regional director;
review of decision.
The Heritage Hotel Manila, acting through its owner, Grand Plaza
Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC), G.R. No. 178296, January 12, 2011.

Petitioner appealed an adverse decision to the BLR. BLR Director
inhibited himself from the case because he had been a former counsel of
respondent. In view of the inhibition, DOLE Secretary took cognizance of
the appeal. Jurisdiction to review the decision of the Regional Director lies
with the BLR. Once jurisdiction is acquired by the court, it remains with it
until the full termination of the case. Thus, jurisdiction remained with the
BLR despite the BLR Directors inhibition. When the DOLE Secretary
resolved the appeal, she merely stepped into the shoes of the BLR
Director and performed a function that the latter could not himself
perform. She did so pursuant to her power of supervision and control
over the BLR.

Union registration;
cancellation.
The Heritage Hotel Manila, acting through its owner, Grand Plaza
Hotel, Corp. vs. National Union of Workers in the Hotel, Restaurant and
Allied Industries-Heritage Hotel Manila Supervisors Chapter
(NUWHRAIN-HHMSC), G.R. No. 178296, January 12, 2011.

The amendment introduced by RA 9481 sought to strengthen the
workers right to self-organization and enhance the Philippines
compliance with its international obligations as embodied in the
International Labour Organization (ILO) Convention No. 87, pertaining
to the non-dissolution of workers organizations by administrative
authority. ILO Convention No. 87 provides that workers and employers
organizations shall not be liable to be dissolved or suspended by
administrative authority. The ILO has expressed the opinion that the
cancellation of union registration by the registrar of labor unions, which
in our case is the BLR, is tantamount to dissolution of the organization by
administrative authority when such measure would give rise to the loss of
legal personality of the union or loss of advantages necessary for it to
carry out its activities, which is true in our jurisdiction. Although the ILO
has allowed such measure to be taken, provided that judicial safeguards
are in place, i.e., the right to appeal to a judicial body, it has nonetheless
reminded its members that dissolution of a union, and cancellation of
registration for that matter, involve serious consequences for
occupational representation. It has, therefore, deemed it preferable if
such actions were to be taken only as a last resort and after exhausting
other possibilities with less serious effects on the organization. It is
undisputed that appellee failed to submit its annual nancial reports and
list of individual members in accordance with Article 239 of the Labor
Code. However, the existence of this ground should not necessarily lead to
the cancellation of union registration. At any rate, the Court in this case
took note of the fact that on 19 May 2000, appellee had submitted its
nancial statement for the years 1996-1999. With this submission,
appellee has substantially complied with its duty to submit its nancial
report for the said period.

Wages; payment
pending
reinstatement.
Social Security System vs. Efren Capada, et al., G.R. No. 168501,
January 31, 2011.

Employees are entitled to their accrued salaries during the period
between the Labor Arbiters order of reinstatement pending appeal and
the resolution of the National Labor Relations Commission (NLRC)
overturning that of the Labor Arbiter. Otherwise stated, even if the order
of reinstatement of the Labor Arbiter is reversed on appeal, the employer
is still obliged to reinstate and pay the wages of the employee during the
period of appeal until reversal by a higher court or tribunal. On the other
hand, if the employee has been reinstated during the appeal period and
such reinstatement order is reversed with nality, the employee is not
required to reimburse whatever salary he received for he is entitled to
such, more so if he actually rendered services during the period.

FEBRUARY
Abandonment;
elements.
E.G. & I. Construction Corporation and Edsel Galeos v. Ananias P. Sato,
et al., G.R. No. 182070, February 16, 2011

Respondents led an illegal dismissal case against the petitioner-
corporation. For its defense, petitioner-corporation alleged that the
respondents abandoned their work and were not dismissed, and that it
sent letters advising respondents to report for work, but they refused.
The Court held that for abandonment to exist, it is essential (a) that the
employee must have failed to report for work or must have been absent
without valid or justiable reason; and (b) that there must have been a
clear intention to sever the employer-employee relationship manifested
by some overt acts. The employer has the burden of proof to show the
employees deliberate and unjustied refusal to resume his employment
without any intention of returning. Mere absence is not sufcient. There
must be an unequivocal intent on the part of the employee to discontinue
his employment. Based on the evidence presented, the reason why
respondents failed to report for work was because petitioner-corporation
barred them from entering its construction sites. It is a settled rule that
failure to report for work after a notice to return to work has been served
does not necessarily constitute abandonment. The intent to discontinue
the employment must be shown by clear proof that it was deliberate and
unjustied. Petitioner-corporation failed to show overt acts committed by
respondents from which it may be deduced that they had no more
intention to work. Respondents ling of the case for illegal dismissal
barely four (4) days from their alleged abandonment is totally
inconsistent with the known concept of what constitutes abandonment.

Certication election;
petition for
cancellation of union
registration.
Legend International Resorts Limited v. Kilusang Manggagawa ng
Legenda, G.R. No. 169754, February 23, 2011

Respondent union led a petition for certication election. Petitioner
moved to dismiss the petition for certication election alleging the
pendency of a petition for cancellation of the unions registration. The
DOLE Secretary ruled in favor of the legitimacy of the respondent as a
labor organization and ordered the immediate conduct of a certication
election. Pending appeal in the Court of Appeals, the petition for
cancellation was granted and became nal and executory. Petitioner
argued that the cancellation of the unions certicate of registration
should retroact to the time of its issuance. Thus, it claimed that the
unions petition for certication election and its demand to enter into
collective bargaining agreement with the petitioner should be dismissed
due to respondents lack of legal personality. The Court ruled that the
pendency of a petition for cancellation of union registration does not
preclude collective bargaining, and that an order to hold a certication
election is proper despite the pendency of the petition for cancellation of
the unions registration because at the time the respondent union led its
petition, it still had the legal personality to perform such act absent an
order cancelling its registration.

Certiorari under Rule
65; review of facts by
the Court of Appeals
Nelson A. Culili v. Eastern Telecommunications Philippines, Inc., et al.
G.R. No. 165381, February 9, 2011

While it is true that factual ndings made by quasi-judicial and
administrative tribunals, if supported by substantial evidence, are
accorded great respect and even nality by the courts, this general rule
admits of exceptions. When there is a showing that a palpable and
demonstrable mistake that needs rectication has been committed or
when the factual ndings were arrived at arbitrarily or in disregard of the
evidence on record, these ndings may be examined by the courts. In the
present case, the Court of Appeals found itself unable to completely
sustain the ndings of the NLRC thus, it was compelled to review the facts
and evidence and not limit itself to the issue of grave abuse of discretion.

Construction
Industry; project
employees.
Exodus International Construction Corporation, et al. v. Guillermo
Biscocho, et al., G.R. No. 166109, February 23, 2011

Petitioner is a duly licensed labor contractor engaged in painting houses
and buildings. Respondents, former painters of the petitioner, led an
illegal dismissal case against petitioner. Petitioner alleged that the
respondents abandoned their job and were not dismissed by the
petitioner. The Labor Arbiter ruled that there was neither illegal dismissal
nor abandonment of job and that the respondents should be reinstated
but without any backwages. On appeal, petitioner alleged that the
reinstatement of respondents to their former positions, which were no
longer existing, is impossible, highly unfair and unjust. It further alleged
that the project they were working on at the time of their alleged
dismissal was already completed. Having completed their tasks, their
positions automatically ceased to exist. Thus, there were no more
positions where they can be reinstated as painters. The Court ruled that
there are two types of employees in the construction industry. The rst is
referred to as project employees or those employed in connection with a
particular construction project or phase thereof and such employment is
coterminous with each project or phase of the project to which they are
assigned. The second is known as non-project employees or those
employed without reference to any particular construction project or
phase of a project. Respondents belonged to the second type and are
classied as regular employees of petitioner. It is clear from the records of
the case that when one project is completed, respondents were
automatically transferred to the next project awarded to petitioners.
There was no employment agreement given to respondents which
clearly spelled out the duration of their employment and the specic
work to be performed and there is no proof that they were made aware of
these terms and conditions of their employment at the time of hiring.
Thus, it is now too late for petitioner to claim that respondents are project
employees whose employment is coterminous with each project or phase
of the project to which they are assigned. Nonetheless, assuming that
respondents were initially hired as project employees, a project employee
may acquire the status of a regular employee when the following factors
concur: (1) There is a continuous rehiring of project employees even after
cessation of a project; and (2) The tasks performed by the alleged project
employee are vital, necessary and indispensable to the usual business or
trade of the employer. In this case, the evidence on record shows that
respondents were employed and assigned continuously to the various
projects of petitioners. As painters, they performed activities which were
necessary and desirable in the usual business of petitioner, which was
engaged in subcontracting jobs for painting of residential units,
condominium and commercial buildings. As regular employees,
respondents are entitled to be reinstated without loss of seniority rights.

Constructive
Dismissal; security
guards.
Nationwide Security and Allied Services, Inc. v. Ronald P. Valderama,
G.R. No. 186614, February 23, 2011

Respondent was hired by petitioner, a security agency, as a security
guard. He was assigned at the Philippine Heart Center until his relief on
January 30, 2006. Respondent was not given any assignment thereafter.
Thus, on August 2, 2006, he led a complaint for constructive dismissal
and nonpayment of 13 month pay, with prayer for damages against
petitioner. To refute the claim, petitioner alleged that respondent was not
constructively or illegally dismissed, but had voluntarily resigned. The
Court held that respondent was constructively dismissed. In cases the
involving security guards, a relief and transfer order in itself does not
sever employment relationship between a security guard and his agency.
An employee has the right to security of tenure, but this does not give him
a vested right to his position as would deprive the company of its
prerogative to change his assignment or transfer him where his service,
as security guard, will be most benecial to the client. Temporary off-
detail or the period of time security guards are made to wait until they
are transferred or assigned to a new post or client does not constitute
constructive dismissal, so long as such status does not continue beyond
six months. The onus of proving that there is no post available to which
the security guard can be assigned rests on the employer. In the instant
case, the failure of petitioner to give respondent a work assignment
beyond the reasonable six-month period makes it liable for constructive
dismissal.

Constructive
dismissal; defense of
abandonment.
G.R. No. 186614, February 23, 2011

Respondent led an illegal dismissal case against the petitioner.
Petitioner alleged that respondent abandoned his job and was not
dismissed. The Court held that respondent was illegally dismissed. The
jurisprudential rule on abandonment is constant. It is a matter of
intention and cannot lightly be presumed from certain equivocal acts. To
constitute abandonment, two elements must concur: (1) the failure to
report for work or absence without valid or justiable reason; and (2) a
clear intent, manifested through overt acts, to sever the employer-
employee relationship. In this case, petitioner failed to establish clear
evidence of respondents intention to abandon his employment.

Constructive
dismissal; defense of
resignation.
G.R. No. 186614, February 23, 2011

Respondent, a security guard, led an illegal dismissal case against the
petitioner. To refute the claim, petitioner alleged that respondent was not
constructively or illegally dismissed, but had voluntarily resigned.
Petitioner alleged that respondents resignation is evident from his
withdrawal of his cash and rearm bonds. Resignation is the voluntary act
of an employee who is in a situation where one believes that personal
reasons cannot be sacriced in favor of the exigency of the service, and
one has no other choice but to dissociate oneself from employment. It is a
formal pronouncement or relinquishment of an ofce. The intent to
relinquish must concur with the overt act of relinquishment. Thus, the
acts of the employee before and after the alleged resignation must be
considered in determining whether, he or she, in fact, intended to sever
his or her employment. Should the employer interpose the defense of
resignation, it is incumbent upon the employer to prove that the
employee voluntarily resigned. On this point, the Court held that
petitioner failed to discharge its burden. Moreover, the ling of a
complaint belies petitioners claim that respondent voluntarily resigned.

Execution of
Judgment; properties
covered.
Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007,
February 16, 2011

Premier Allied and Contracting Services, Inc. (PACSI) and its President,
the petitioner, were held liable to pay the respondents separation pay and
attorneys fees. To execute this judgment, the NLRC sheriff issued a Notice
of Sale of a property with a TCT in the name of the petitioner and his wife.
The Court ruled that the Notice of Sale is null and void. The power of the
NLRC, or the courts, to execute its judgment extends only to properties
unquestionably belonging to the judgment debtor alone. A sheriff,
therefore, has no authority to attach the property of any person except
that of the judgment debtor. Likewise, there is no showing that the sheriff
ever tried to execute on the properties of the corporation. The TCT of the
property bears out that, indeed, it belongs to petitioner and his wife.
Thus, even if we consider petitioner as an agent of the corporation and,
therefore, not a stranger to the case such that the provision on third-
party claims will not apply to him, the property was registered not only in
the name of petitioner but also of his wife. She stands to lose the property
subject of execution without ever being a party to the case. This will be
tantamount to deprivation of property without due process.

Illegal dismissal;
burden of proof.
et al., G.R. No. 182070, February 16, 2011

Respondents led an illegal dismissal case against petitioner. Petitioner
alleged that the respondents abandoned their work and were never
dismissed by the petitioner. NLRC ruled that the respondents were not
illegally dismissed since they failed to present a written notice of
termination. This was however reversed by the Court of Appeals. The
Court held that a written notice of dismissal is not a pre-requisite for a
nding of illegal dismissal. Petitioner failed to prove that respondents
were dismissed for a just or authorized cause. In an illegal dismissal case,
the onus probandi rests on the employer to prove that the dismissal of an
employee is for a valid cause.

Illegal dismissal;
burden of proof.
Exodus International Construction Corporation, et al. v. Guillermo
Biscocho, et al., G.R. No. 166109, February 23, 2011

Respondents led an illegal dismissal case against the petitioners.
Petitioners, in their defense, alleged that the respondents abandoned
their work and were not dismissed by the petitioners. Although In cases
of illegal dismissal, the employer bears the burden of proof to prove that
the termination was for a valid or authorized cause, the employee must
rst establish by substantial evidence the fact that he was dismissed. If
there is no dismissal, then there can be no question as to the legality or
illegality thereof. In the present case, the Court held that there was no
evidence that respondents were dismissed or that they were prevented
from returning to their work. It was only respondents unsubstantiated
conclusion that they were dismissed. As a matter of fact, respondents
could not name the particular person who effected their dismissal and
under what particular circumstances. Absent any showing of an overt or
positive act proving that petitioners had dismissed respondents, the
latters claim of illegal dismissal cannot be sustained.

Illegal dismissal; nal
and executory
judgment.
Filipinas Palmoil Processing, Inc. and Dennis T. Villareal v. Joel P.
Dejapa, represented by his Attorney-in-Fact Myrna Manzano, G.R. No.
167332, February 7, 2011

Respondent employee led an illegal dismissal case against the
petitioner-company and Tom Madula, its operations manager. The case
was dismissed by the labor arbiter and the dismissal was afrmed by
NLRC. On August 29, 2002, the Court of Appeals reversed and set aside
the NLRC decision and resolution. The CA ordered the petitioner company
to pay respondent separation pay, moral and exemplary damages, and
attorneys fees. The decision became nal and executory on February 27,
2004, and consequently a writ of execution was issued. Petitioner
company filed a motion to Quash a Writ of Execution. The Labor Arbiter
granted the Motion and exonerated the petitioner company from paying
backwages and held that it was petitioner Madula who should be liable to
pay backwages. Respondent then led before the CA a Very Urgent
Motion for Clarication of Judgment. On December 10, 2004, CA granted
the Motion and held the petitioner company is solely liable for judgement
award. As a general rule, nal and executory judgments are immutable
and unalterable, except under these recognized exceptions, to wit: (a)
clerical errors; (b) nunc pro tunc entries which cause no prejudice to any
party; and (c) void judgments. The underlying reason for the rule is two-
fold: (1) to avoid delay in the administration of justice and thus make
orderly the discharge of judicial business, and (2) to put judicial
controversies to an end, at the risk of occasional errors, inasmuch as
controversies cannot be allowed to drag on indenitely and the rights and
obligations of every litigant must not hang in suspense for an indenite
period of time. What the CA rendered on December 10, 2004 was a nunc
pro tunc order clarifying the decretal portion of its August 29, 2002
Decision. The object of a judgment nunc pro tunc is not the rendering of a
new judgment and the ascertainment and determination of new rights,
but is one placing in proper form on the record, the judgment that had
been previously rendered, to make it speak the truth, so as to make it
show what the judicial action really was. It is not to correct judicial errors,
such as to render a judgment anew in place of the one it rendered, nor to
supply non action by the court, however erroneous the judgment may
have been.

Illegal dismissal;
liability of corporate
ofcers.
G.R. No. 165381, February 9, 2011

Petitioner led a complaint against respondent company and its ofcers
for illegal dismissal, unfair labor practice, and money claims. Petitioner
alleged that the ofcers should be held personally liable for the acts of
company which were tainted with bad faith and arbitrariness. As a
general rule, a corporate ofcer cannot be held liable for acts done in his
ofcial capacity because a corporation, by legal ction, has a personality
separate and distinct from its ofcers, stockholders, and members. To
pierce this ctional veil, it must be shown that the corporate personality
was used to perpetuate fraud or an illegal act, or to evade an existing
obligation, or to confuse a legitimate issue. In illegal dismissal cases,
corporate ofcers may be held solidarily liable with the corporation if the
termination was done with malice or bad faith. Moral damages are
awarded only where the dismissal was attended by bad faith or fraud, or
constituted an act oppressive to labor, or was done in a manner contrary
to morals, good customs or public policy. Exemplary damages may avail if
the dismissal was effected in a wanton, oppressive or malevolent manner.
In the present case, the Court held that petitioner failed to prove that his
dismissal was orchestrated by the individual respondents and their acts
were attended with bad faith or were done oppressively.

Illegal dismissal;
redundancy.
G.R. No. 165381, February 9, 2011

Respondent-company, due to business troubles and losses, implemented
a Right-Sizing Program which entailed a company-wide reorganization
involving the transfer, merger, absorption or abolition of certain
departments of the company. As a result, respondent-company
terminated the services of petitioner on account of redundancy. Petitioner
led a complaint against respondent-company and its ofcers for illegal
dismissal, unfair labor practice, and money claims. The Court ruled that
petitioner was validly dismissed. There is redundancy when the service
capability of the workforce is greater than what is reasonably required to
meet the demands of the business enterprise. A position becomes
redundant when it is rendered superuous by any number of factors
such as over-hiring of workers, decrease in volume of business, or
dropping a particular product line or service activity previously
manufactured or undertaken by the enterprise. The Court has been
consistent in holding that the determination of whether or not an
employees services are still needed or sustainable properly belongs to
the employer. Provided there is no violation of law or a showing that the
employer was prompted by an arbitrary or malicious act, the soundness
or wisdom of this exercise of business judgment is not subject to the
discretionary review of the Labor Arbiter and the NLRC. However, an
employer cannot simply declare that it has become overmanned and
dismiss its employees without producing adequate proof to sustain its
claim of redundancy. Among the requisites of a valid redundancy program
are: (1) the good faith of the employer in abolishing the redundant
position; and (2) fair and reasonable criteria in ascertaining what
positions are to be declared redundant, such as but not limited to:
preferred status, efciency, and seniority. The Court also held that the
following evidence may be proffered to substantiate redundancy:
adoption of a new stafng pattern, feasibility studies/ proposal on the
viability of the newly created positions, job description and the approval
by the management of the restructuring.

Labor Union;
collateral attack on
legal personality.
Legend International Resorts Limited v. Kilusang Manggagawa ng
Legenda, G.R. No. 169754 , February 23, 2011

Petitioner moved to dismiss the petition for certication election led by
respondent union by questioning the validity of the respondents union
registration. The Court held that legitimacy of the legal personality of
respondent cannot be collaterally attacked in a petition for certication
election proceeding but only through a separate action instituted
particularly for the purpose of assailing it. The Implementing Rules
stipulate that a labor organization shall be deemed registered and vested
with legal personality on the date of issuance of its certicate of
registration. Once a certicate of registration is issued to a union, its legal
personality cannot be subject to a collateral attack. It may be questioned
only in an independent petition for cancellation in accordance with
Section 5 of Rule V, Book V of the Implementing Rules.

Money claims; burden
of proof.
et al., G.R. No. 182070 ,February 16, 2011

Respondents alleged that petitioner-corporation failed to pay them their
full compensation. The Labor Arbiter granted their monetary claims but
the NLRC reversed the award considering that the petitioner-corporation
submitted copies of payrolls, which it annexed to its memorandum on
appeal, showing full payment. The general rule is that the burden rests on
the employer to prove payment, rather than on the employee to prove
non-payment. The reason for the rule is that the pertinent personnel les,
payrolls, records, remittances, and other similar documents which
will show that overtime, differentials, service incentive leave, and other
claims of the worker have been paid are not in the possession of the
worker but in the custody and absolute control of the employer. In this
case, the submission by petitioner-corporation of the time records and
payrolls only when the case was on appeal before the NLRC is contrary to
the elementary precepts of justice and fair play. Respondents were not
given the opportunity to check the authenticity and correctness of the
evidence submitted on appeal. Thus, the Supreme Court held that the
monetary claims of respondents should be granted. It is a time-honored
principle that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of
the latter. It is the rule in controversies between a laborer and his master
that doubts reasonably arising from the evidence, or in the interpretation
of agreements and writing, should be resolved in the formers favor.

National Labor
Relations
Commission;
jurisdiction
Paquito V. Ando v. Andresito Y. Campo, et al., G.R. No. 184007,
February 16, 2011

Respondents led an illegal dismissal case against Premier Allied and
Contracting Services, Inc. (PACSI) and its President, the petitioner. PACSI
and the petitioner were held liable to pay the respondents separation pay
and attorneys fees. To execute this judgment, NLRC sheriff issued a
Notice of Sale of a property with TCT in the name of the petitioner and
his wife. Petitioner led an action for prohibition and damages with
prayer for the issuance of a temporary restraining order (TRO) before the
Regional Trial Court (RTC). The Court ruled that the RTC lacks
jurisdiction to resolve the matter. The Court has long recognized that
regular courts have no jurisdiction to hear and decide questions which
arise from and are incidental to the enforcement of decisions, orders, or
awards rendered in labor cases by appropriate ofcers and tribunals of
the Department of Labor and Employment. To hold otherwise is to
sanction splitting of jurisdiction which is obnoxious to the orderly
administration of justice. The NLRC Manual on the Execution of Judgment
deals specically with third-party claims in cases brought before that
body. It denes a third-party claim as one where a person, not a party to
the case, asserts title to or right to the possession of the property
levied upon. It also sets out the procedure for the ling of a third-party
claim, to wit: such person shall make an afdavit of his title thereto or
right to the possession thereof, stating the grounds of such right or title
and shall le the same with the sheriff and copies thereof served upon the
Labor Arbiter or proper ofcer issuing the writ and upon the prevailing
party. In the present case, there is no doubt that petitioners complaint is
a third-party claim within the cognizance of the NLRC. Petitioner may
indeed be considered a third party in relation to the property subject of
the execution since there is no question that the property belongs to
petitioner and his wife, and not to the corporation. It can be said that the
property belongs to the conjugal partnership, and not to petitioner alone.
At the very least, the Court can consider petitioners wife to be a third
party within the contemplation of the law.

Placement Fee; proof
of excessive
collection.
Avelina F. Sagun v. Sunace International Management Services, Inc.,
G.R. No. 179242, February 23, 2011

Petitioner led a complaint against respondent for collection of excess
placement fee dened in Article 34(a) of the Labor Code. Petitioner
presented as her evidence a promissory note reecting excessive fees and
testied as to the deductions made by her foreign employer. On the other
hand, respondent presented an acknowledgment receipt reecting
collection of an amount authorized by POEA. The Court held that the
pieces of evidence presented by petitioner are not substantial enough to
show that the respondent collected from her more than the allowable
placement fee. In proceedings before administrative and quasi-judicial
agencies, the quantum of evidence required to establish a fact is
substantial evidence, or that level of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion. The Court gave
more credence to respondents evidence consisting of the
acknowledgment receipt showing the amount paid by petitioner and
received by respondent. A receipt is a written and signed
acknowledgment that money or goods have been delivered. Although a
receipt is not conclusive evidence, an exhaustive review of the records
of the case fails to disclose any other evidence sufcient and strong
enough to overturn the acknowledgment embodied in respondents
receipt as to the amount it actually received from petitioner. Having failed
to adduce sufcient rebuttal evidence, petitioner is bound by the contents
of the receipt issued by respondent. The subject receipt remains as the
primary or best evidence. The promissory note presented by petitioner
cannot be considered as adequate evidence to show the excessive
placement fee. It must be emphasized that a promissory note is a solemn
acknowledgment of a debt and a formal commitment to repay it on the
date and under the conditions agreed upon by the borrower and the
lender. A person who signs such an instrument is bound to honor it as a
legitimate obligation duly assumed by him through the signature he
afxes thereto as a token of his good faith. The fact that respondent is not
a lending company does not preclude it from extending a loan to
petitioner for her personal use. As for the deductions purportedly made
by petitioners foreign employer, the Court notedthat there is no single
piece of document or receipt showing that deductions have in fact been
made, or isthere any proof that these deductions from the salary formed
part of the subject placement fee. To be sure, mere general allegations of
payment of excessive placement fees cannot be given merit as the charge
of illegal exaction is considered a grave offense which could cause the
suspension or cancellation of the agencys license. They should be proven
and substantiated by clear, credible, and competent evidence.

Procedural due
process; notice
requirements.
G.R. No. 165381, February 9, 2011

Petitioner was dismissed by respondent-company due to redundancy.
However, it failed to provide the Department of Labor and Employment
with a written notice regarding petitioners termination. The notice of
termination was also not properly served on the petitioner. Further, a
reading of the notice shows that respondent-company failed to properly
inform the petitioner of the grounds for his termination. There are two
aspects which characterize the concept of due process under the Labor
Code: one is substantive whether the termination of employment was
based on the provision of the Labor Code or in accordance with the
prevailing jurisprudence; the other is procedural the manner in which
the dismissal was effected. There is a psychological effect or a stigma
in immediately nding ones self laid off from work. This is why our labor
laws have provided for procedural due process. While employers have the
right to terminate employees it can no longer sustain, our laws also
recognize the employees right to be properly informed of the impending
termination of his employment. Though the failure of respondent-
company to comply with the notice requirements under the Labor Code
did not affect the validity of the dismissal, petitioner is however entitled
to nominal damages in addition to his separation pay.

Quitclaims; validity. Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et
al., G.R. No. 183390, February 16, 2011

Respondents were terminated from employment due to retrenchment
implemented by petitioner. Upon their dismissal, the respondents signed
individual Release Waiver and Quitclaim. The Court ruled that a waiver
or quitclaim is a valid and binding agreement between the parties,
provided that it constitutes a credible and reasonable settlement, and that
the one accomplishing it has done so voluntarily and with a full
understanding of its import. In this case, the respondents were
sufciently apprised of their rights under the waivers and quitclaims that
they signed. Each document contained the signatures of the union
president and its counsel, which proved that respondents were duly
assisted when they signed the waivers and quitclaims. Hence, the Court
upheld the validity of thewaivers and quitclaims signed by the
respondents in this case.

Retrenchment; notice
requirements.
Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C. Gopo, et
al., G.R. No. 183390, February 16, 2011

Petitioner issued a Memorandum informing all its employees of the
decision of the companys Board of Directors to downsize and reorganize
its business operations due to the change of its corporate structure.
Petitioner served the individual notice of termination on itsmemployees
on May 14, 2004 or 30 days before the effective date of their termination
on 13 June 2004, while it submitted the notice of termination to the
Department of Labor and Employment only on 26 May 2004, short of the
one-month prior notice requirement under Article 283 of the Labor Code.
The Court held that petitioners failure to comply with the one-month
notice to the DOLE is only a procedural inrmity and does not render the
retrenchment illegal. When the dismissal is for a just cause, the absence of
proper notice will not nullify the dismissal or render it illegal or
ineffectual. Instead, the employer should indemnify the employee for
violation of his statutory rights.

Retrenchment; notice
requirements.
Plastimer Industrial Corporation and Teo Kee Bin v. Natalia C.
Gopo, et al., G.R. No. 183390, February 16, 2011

In 2004, the petitioner had to retrench and consequently terminate the
employment of the respondents. Respondents questioned the validity of
the retrenchment, and alleged that though petitioners nancial
statements in 2001 and 2002 reected losses, it declared net income in
2003. The Court ruled that the fact that there was a net income in 2003
does mean that there was no valid reason for the retrenchment. Records
showed that the net income of P6,185,707.05 in 2003 was not enough to
allow petitioners to recover the loss of P52,904,297.88 which it suffered
in 2002. Article 283 of the Labor Code recognizes retrenchment to
prevent losses as a right of the management to meet clear and continuing
economic threats or during periods of economic recession to prevent
losses. There is no need for the employer to wait for substantial losses to
materialize before exercising ultimate and drastic option to prevent such
losses.

Unfair Labor Practice;
right to self-organize.
G.R. No. 165381, February 9, 2011

Respondent-company implemented a company-wide reorganization
which resulted in the abolition of petitioners position. Petitioner alleged
that he was illegally dismissed and that respondent-company is guilty of
unfair labor practice because his functions were outsourced to labor-only
contractors. The Supreme Court held unfair labor practice refers to acts
that violate the workers right to organize. The prohibited acts are related
to the workers right to self-organization and to the observance of a CBA.
Thus, an employer may be held liable for unfair labor practice only if it
can be shown that his acts interfere with his employees right to self-
organization. Since there is no showing that the respondent companys
implementation of the Right-Sizing Program was motivated by ill will, bad
faith or malice, or that it was aimed at interfering with its employees
right to self-organization, there is no unfair labor practice to speak of in
this case.

MARCH
Abandonment;
elements.
Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No.
167751, March 2, 2011.

Respondent employee was dismissed by petitioners on the ground of
alleged habitual absenteeism and abandonment of work. Jurisprudence
provides for two essential requirements for abandonment of work to
exist: (1) the failure to report for work or absence without valid or
justiable reason, and (2) clear intention to sever the employer-employee
relationship manifested by some overt acts should both concur. Further,
the employees deliberate and unjustied refusal to resume his
employment without any intention of returning should be established and
proven by the employer. The Court held that petitioners failed to prove
that it was respondent employee who voluntarily refused to report back
for work by his deance and refusal to accept the memoranda and the
notices of absences sent to him. Petitioners failed to present evidence that
they sent these notices to respondent employees last known address for
the purpose of warning him that his continued failure to report would be
construed as abandonment of work. Moreover, the fact that respondent
employee never prayed for reinstatement and has sought employment in
another company which is a competitor of petitioners cannot be
construed as his overt acts of abandoning employment. Neither can the
delay of four months be taken as an indication that the respondent
employees ling of a complaint for illegal dismissal is a mere
afterthought. Records show that respondent employee attempted to get
his separation pay and alleged commissions from the company, but it was
only after his requests went unheeded that he resorted to judicial
recourse.

Corporate ofcer;
solidary liability.
Harpoon Marine Services, Inc., et al. v. Fernan H. Francisco, GR No.
167751, March 2, 2011.

Respondent employee led an illegal dismissal case against the Petitioner
Corporation and its President. Though the Court found that Respondent
was illegally dismissed, it held that the President of the Petitioner
Corporation should not be held solidarily liable with Petitioner
Corporation. Obligations incurred by corporate ofcers, acting as such
corporate agents, are not theirs but the direct accountabilities of the
corporation they represent. Thus, they should not be generally held
jointly and solidarily liable with the corporation. The general rule is
grounded on the theory that a corporation has a legal personality
separate and distinct from the persons comprising it. As exceptions to the
general rule, solidary liability may be imposed: (1) When directors and
trustees or, in appropriate cases, the ofcers of a corporation (a) vote for
or assent to [patently] unlawful acts of the corporation; (b) act in bad
faith or with gross negligence in directing the corporate affairs; (c) are
guilty of conict of interest to the prejudice of the corporation, its
stockholders or members, and other persons; (2) When the director or
ofcer has consented to the issuance of watered stock or who, having
knowledge thereof, did not forthwith le with the corporate secretary his
written objection thereto; (3) When a director, trustee or ofcer has
contractually agreed or stipulated to hold himself personally and
solidarily liable with the corporation; (4) When a director, trustee or
ofcer is made, by specic provision of law, personally liable for his
corporate action. To warrant the piercing of the veil of corporate ction,
the ofcers bad faith or wrongdoing must be established clearly and
convincingly as bad faith is never presumed.

Labor organization;
collateral attack on
legal personality.
Samahang Manggagawa sa Charter Chemical Solidarity of Unions in
the Philippines for Empowerment and Reforms [SMCC-SUPER],
Zacarrias Jerry Victorio Union President v. Charter Chemical and
Coating Corporation, G.R. No. 169717, March 16, 2011

Respondent company questioned the legal personality of the petitioner
union in a certication election proceeding. The Court ruled that the legal
personality of the petitioner union cannot be collaterally attacked by
respondent company. Except when it is requested to bargain collectively,
an employer is a mere bystander to any petition for certication election;
such proceeding is non-adversarial and merely investigative, considering
that its purpose is to determine if the employees would like to be
represented by a union and to select the organization that will represent
them in their collective bargaining with the employer. The choice of their
representative is the exclusive concern of the employees; the employer
cannot have any partisan interest therein; it cannot interfere with, much
less oppose, the process by ling a motion to dismiss or an appeal from it;
not even the allegation that some employees participating in a petition for
certication election are actually managerial employees will give an
employer legal personality to block the certication election. The
employers only right in the proceeding is to be notied or informed
thereof.

Labor organization;
membership of
supervisory
employees.

Petitioner union led a Petition for Certication Election among the
regular rank-and-le employees of the respondent company. Respondent
contends that petitioner union is not a legitimate labor organization
because its composition is a mixture of supervisory and rank-and-le
employees. The Court ruled that the inclusion of the supervisory
employees in petitioner union does not divest it of its status as a
legitimate labor organization. After a labor organization has been
registered, it may exercise all the rights and privileges of a legitimate
labor organization. Any mingling between supervisory and rank-and-le
employees in its membership cannot affect its legitimacy for that is not
among the grounds for cancellation of its registration, unless such
mingling was brought about by misrepresentation, false statement or
fraud under Article 239 of the Labor Code.

Labor organization;
registration.

Petitioner union led a Petition for Certication Election among the
regular rank-and-le employees of the respondent company. Respondent
company led an Answer with Motion to Dismiss on the ground that
petitioner union is not a legitimate labor organization because of its
failure to comply with the documentary requirements set by law, i.e. non-
verication of the charter certicate. The Court ruled that it was not
necessary for the charter certicate to be certied and attested by the
local/chapter ofcers. Considering that the charter certicate is prepared
and issued by the national union and not the local/chapter, it does not
make sense to have the local/chapters ofcers certify or attest to a
document which they did not prepare. In accordance with this ruling,
petitioner unions charter certicate need not be executed under oath.
Consequently, it validly acquired the status of a legitimate labor
organization upon submission of (1) its charter certicate, (2) the names
of its ofcers, their addresses, and its principal ofce, and (3) its
constitution and by-laws the last two requirements having been
executed under oath by the proper union ofcials.

Reinstatement;
accrued backwages
Pzer, Inc., et al. v. Geraldine Velasco, G.R. No. 177467, March 9, 2011

The Labor Arbiter and the NLRC held that petitioner employer illegally
dismissed the respondent employee. On appeal, the Court of Appeals
reversed the decision and ruled that the dismissal was valid. However, the
Court of Appeals ordered petitioner employer to pay respondent
employee her salary from the date of the Labor Arbiters decision
ordering her reinstatement until the Court of Appeals rendered its
decision declaring the dismissal valid. Petitioner employer questioned the
order and refused to pay. The Court held that even if the order of
reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory
on the part of the employer to reinstate and pay the wages of the
dismissed employee during the period of appeal until reversal by the
higher court. On the other hand, if the employee has been reinstated
during the appeal period and such reinstatement order is reversed with
nality, the employee is not required to reimburse whatever salary he
received, more so, if he actually rendered services during the period. The
payment of such wages cannot be deemed as unjust enrichment on
respondents part.

Reinstatement;
immediately
executory order.

The Labor Arbiter held that petitioner employer illegally dismissed the
respondent employee. Pending its appeal, petitioner employer failed to
immediately admit respondent employee back to work despite of an
order of reinstatement. The Court held that that the provision of Article
223 is clear that an award by the Labor Arbiter for reinstatement shall be
immediately executory even pending appeal and the posting of a bond by
the employer shall not stay the execution for reinstatement. The
legislative intent is to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and
issuance of a writ of execution as prerequisites for the execution of a
reinstatement award would certainly betray the executory nature of a
reinstatement order or award. In the case at bar, petitioner employer did
not immediately admit respondent employee back to work which,
according to the law, should have been done as soon as an order or award
of reinstatement is handed down by the Labor Arbiter without need for
the issuance of a writ of execution.

Reinstatement; terms
and conditions.

Due to the order of reinstatement issued by the Labor Arbiter, petitioner
employer sent a letter to the respondent employee to report back to work
and assigned her to a new location. The Court held that such is not a bona
de reinstatement. Under Article 223 of the Labor Code, an employee
entitled to reinstatement shall either be admitted back to work under the
same terms and conditions prevailing prior to his dismissal or separation
or, at the option of the employer, merely reinstated in the payroll. It is
established in jurisprudence that reinstatement means restoration to a
state or condition from which one had been removed or separated. The
person reinstated assumes the position he had occupied prior to his
dismissal. Reinstatement presupposes that the previous position from
which one had been removed still exists, or that there is an unlled
position which is substantially equivalent or of similar nature as the one
previously occupied by the employee. Applying the foregoing principle, it
cannot be said that petitioner employer has a clear intent to reinstate
respondent employee to her former position under the same terms and
conditions nor to a substantially equivalent position. To begin with, the
return-to-work order petitioner sent to respondent employee is silent
with regard to the position it wanted the respondent employee to assume.
Moreover, a transfer of work assignment without any justication
therefor, even if respondent employee would be presumably doing the
same job with the same pay, cannot be deemed as faithful compliance
with the reinstatement order.

Termination by
employer; willful
disobedience.
Lores Realty Enterprises, Inc., Lorenzo Y. Sumulong III v. Virginia E.
Pacia, G.R. No. 171189, March 9, 2011

Petitioner employer ordered the respondent employee to prepare checks
for payment of petitioners obligations. Respondent did not immediately
comply with the instruction since petitioner employer has no sufcient
funds to cover the checks. Petitioner employer dismissed respondent
employee for willful disobedience. The Court held that respondent
employee was illegally dismissed. The offense of willful disobedience
requires the concurrence of two (2) requisites: (1) the employees
assailed conduct must have been willful, that is characterized by a
wrongful and perverse attitude; and (2) the order violated must have
been reasonable, lawful, made known to the employee and must pertain
to the duties which he had been engaged to discharge. Though there is
nothing unlawful in the directive of petitioner employer to prepare
checks in payment of petitioners obligations, respondent employees
initial reluctance to prepare the checks, although seemingly disrespectful
and deant, was for honest and well intentioned reasons. Protecting the
petitioner employer from liability under the Bouncing Checks Law was
foremost in her mind. It was not wrongful or willful. Neither can it be
considered an obstinate deance of company authority. The Court takes
into consideration that respondent employee, despite her initial
reluctance, eventually did prepare the checks on the same day she was
tasked to do it.

Wages; facilities and
supplements.
SLL International Cables Specialist and Sonny L. Lagon v. NLRC, Roldan
Lopez, et al., G.R. No. 172161, March 2, 2011

Respondent employees alleged underpayment of their wages. Petitioner
employer claimed that the cost of food and lodging provided by petitioner
to the respondent employees should be included in the computation of
the wages received by respondents. The Court makes a distinction
between facilities and supplements. Supplements constitute extra
remuneration or special privileges or benets given to or received by the
laborers over and above their ordinary earnings or wages. Facilities, on
the other hand, are items of expense necessary for the laborers and his
familys existence and subsistence so that by express provision of law,
they form part of the wage and when furnished by the employer are
deductible therefrom, since if they are not so furnished, the laborer would
spend and pay for them just the same. In short, the benet or privilege
given to the employee which constitutes an extra remuneration above
and over his basic or ordinary earning or wage is supplement; and when
said benet or privilege is part of the laborers basic wages, it is a facility.
The distinction lies not so much in the kind of benet or item (food,
lodging, bonus or sick leave) given, but in the purpose for which it is
given. In the case at bench, the items provided were given freely by
petitioner employer for the purpose of maintaining the efciency and
health of its workers while they were working at their respective projects.
Thus, the Court is of the view that the food and lodging, or the electricity
and water allegedly consumed by respondents in this case were not
facilities but supplements which should not be included in the
computation of wages received by respondent employees.

Wages; proof of
payment.

In an illegal dismissal case against the petitioner employer, respondent
employees alleged that they were underpaid. In their defense, petitioner
employer alleged that respondent employees actually received wages
higher than the prescribed minimum. The Court held that as a general
rule, a party who alleged payment of wages as a defense has the burden of
proving it. Specically with respect to labor cases, the burden of proving
payment of monetary claims rests on the employer, the rationale being
that the pertinent personnel les, payrolls, records, remittances and other
similar documents which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid are not in
the possession of the worker but in the custody and absolute control of
the employer. In this case, petitioner employer, aside from bare
allegations that respondent employees received wages higher than the
prescribed minimum, failed to present any evidence, such as payroll or
payslips, to support their defense of payment. Thus, petitioner employer
utterly failed to discharge the onus probandi.

Wages; value of
facilities.

Petitioner employer alleged that the cost of facilities must be included in
the computation of wages paid. The Court held that before the value of
facilities can be deducted from the employees wages, the following
requisites must all be attendant: rst, proof must be shown that such
facilities are customarily furnished by the trade; second, the provision of
deductible facilities must be voluntarily accepted in writing by the
employee; and nally, facilities must be charged at reasonable value. Mere
availment is not sufcient to allow deductions from employees wages.
These requirements, however, have not been met in this case. Petitioner
employer failed to present any company policy or guideline showing that
provisions for meals and lodging were part of the employees salaries. It
also failed to provide proof of the employees written authorization, much
less show how they arrived at their valuations. At any rate, it is not even
clear whether respondent employees actually enjoyed said facilities.

APRIL
Dismissal; breach of
trust and condence.
James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564.
April 6, 2011

Petitioner was employed as Assistant Vice-President of the Jewelry
Department in respondent bank. His employment was terminated on the
ground of willful breach of trust and condence. Jurisprudence provides
for two requisites for dismissal on the ground of loss of trust and
condence; (1) the employee concerned must be holding a position of
trust and condence, and (2) there must be an act that would justify the
loss of trust and condence. Loss of trust and condence, to be a valid
cause for dismissal, must be based on a willful breach of trust and
founded on clearly established facts. The basis for the dismissal must be
clearly and convincingly established but proof beyond reasonable doubt
is not necessary. Furthermore, the burden of establishing facts as bases
for an employers loss of condence is on the employer. The court held
that the termination of petitioner was without just cause and therefore
illegal. Although the rst requisite was present, the respondent failed to
satisfy the second requisite. Respondent bank was not able to show any
concrete proof that petitioner had participated in the approval of the
questioned accounts. The invocation by respondent of the loss of trust
and condence as ground for petitioners termination has therefore no
basis at all.

Breach of Trust and
Condence; duties of
employee.
James Ben L. Jerusalem v. Keppel Monte Bank, et al., G.R. No. 169564.
April 6, 2011

Petitioner was employed as Assistant Vice-President of the Jewelry
Department in respondent bank. His employment was terminated on the
ground of willful breach of trust and condence for endorsing VISA card
applicants who later turned out to be impostors resulting in nancial
losses to respondent bank. The court held that petitioner was illegally
dismissed. As provided in Article 282 of the Labor Code, an employer may
terminate an employees employment for fraud or willful breach of trust
reposed in him. However, in order to constitute a just cause for dismissal,
the act complained of must be work-related such as would show the
employee concerned to be unt to continue working for the employer.
The act of betrayal of trust, if any, must have been committed by the
employee in connection with the performance of his function or position.
The court found that the element of work-connection was not present in
this case since petitioner was assigned under the Jewelry department, and
therefore had nothing to do with the approval of VISA Cards, which was
under a different department altogether.

Certiorari under Rule
45; questions of law
and exceptions.
Wilfredo Y. Antiquina v. Magsaysay Maritime Corporation and/or
Masterbulk Pte., Ltd., G.R. No. 168922. April 13, 2011

The Labor Arbiter and the NLRC found that respondent employer
neglected to pay petitioners sickness allowance. However, on appeal, the
Court of Appeals reversed such ndings and held that petitioner already
received his sickness allowance from respondent. Petitioner questioned
the ruling of the Court of Appeals by ling a petition for review on
certiorari under Rule 45. The Supreme Court held that, as a rule, only
questions of law, not questions of fact, may be raised in a petition for
review on certiorari under Rule 45. However, this principle is subject to
recognized exceptions. In the labor law setting, the Court will delve into
factual issues when conict of factual ndings exists among the labor
arbiter, the NLRC, and the Court of Appeals. Considering that in the
present case there were differing factual ndings on the part of the Court
of Appeals, on one hand, and the Labor Arbiter and the NLRC, on the
other, the Supreme Court found it necessary to make an independent
evaluation of the evidence on record.
Rules of Procedure;
liberal construction in
favor of working class.

Petitioner claimed disability benets under a Collective Bargaining
Agreement that the respondent employer entered into with a foreign
union. The Court of Appeals refused to admit the evidence of petitioner
showing his membership in the union on the ground that it was submitted
only with the Motion for Reconsideration. The Supreme Court, in agreeing
to examine the evidence belatedly submitted by petitioner, pointed out
that technical rules of procedure shall be liberally construed in favor of
the working class in accordance with the demands of substantial justice.
Rules of procedure and evidence should not be applied in a very rigid and
technical sense in labor cases in order that technicalities would not stand
in the way of equitably and completely resolving the rights and
obligations of the parties.

Disability Benets;
entitlement and
burden of proof.

Petitioner suffered a fractured arm while working on respondents vessel.
He led a complaint for permanent disability benets, among others.
Petitioner claims that he is entitled to the higher amount of disability
benets under the Collective Bargaining Agreement which respondent
entered into with a union of which petitioner was a member. The Court of
Appeals denied the petitioners claim. The Supreme Court, in upholding
the Court of Appeals, held that the burden of proof rests upon the party
who asserts the afrmative of an issue. And in labor cases, the quantum of
proof necessary is substantial evidence, or such amount of relevant
evidence which a reasonable mind might accept as adequate to justify a
conclusion. Petitioner had the duty to prove by substantial evidence his
own positive assertions. He did not discharge this burden of proof when
he submitted photocopied portions of a different CBA with a different
union.

Public ofce; casual
employees.
Philippine Charity Sweepstakes Ofce Board of Directors and
Reynaldo P. Martin v. Marie Jean C. Lapid, G.R. No. 191940. April 12,
2011

Respondent was a casual teller who was dismissed from service by
petitioner without being formally charged. On appeal, the Civil Service
Commission (CSC) upheld the dismissal and reasoned that respondent
was a casual employee, and therefore her services may be terminated at
any time, without need of a just cause. Upon review, both the Court of
Appeals and the Supreme Court found that respondent was illegally
terminated. The Supreme Court recognized its pronouncement in a recent
case that Even a casual or temporary employee enjoys security of tenure
and cannot be dismissed except for cause enumerated in Sec. 22, Rule XIV
of the Omnibus Civil Service Rules and Regulations and other pertinent
laws. However, the Court also went on to state that, despite this new
ruling on casual employees, it is not the intention of the Court to make the
status of a casual employee at par with that of a regular employee, who
enjoys permanence of employment. The rule is still that casual
employment will cease automatically at the end of the period unless
renewed. Casual employees may also be terminated anytime though
subject to certain conditions or qualications with reference to the CSC
Form No. 001. Thus, they may be laid-off anytime before the expiration of
the employment period provided any of the following occurs: (1) when
their services are no longer needed; (2) funds are no longer available; (3)
the project has already been completed/nished; or (4) theirperformance
are below par.

Public ofce; security
of tenure.
2011

Respondent was a casual teller who, having been found guilty of
Discourtesy in the Course of Ofcial Duties and of Grave Misconduct,
was dismissed from service by petitioner. On appeal, the Civil Service
Commission (CSC) ruled that despite lapses in procedural due process
committed by petitioner employer, the dismissal was proper since
respondent belonged to the category of a casual employee which does not
enjoy security of tenure. Hence, she may be separated from service at any
time, there being no need to show cause. The Court of Appeals disagreed
and declared the dismissal illegal. The Supreme Court afrmed the
ndings of the Court of Appeals. In doing so, the Court relied on Section
3(2), Article XIII of the Constitution which guarantees the rights of all
workers to security of tenure. The Court also recognized its
pronouncement in a recent case that Even a casual or temporary
employee enjoys security of tenure and cannot be dismissed except for
cause enumerated in Sec. 22, Rule XIV of the Omnibus Civil Service Rules
and Regulations and other pertinent laws.

Dismissal; due
process.
2011

Respondent was dismissed from her post as casual teller. When
respondent appealed her dismissal to the Civil Service Commission (CSC),
the latter found that respondent was never formally charged for the
administrative offenses for which she was dismissed. However, despite
nding that procedural due process was not complied with, the CSC
nevertheless upheld the dismissal on the ground that being a casual
employee, respondent enjoyed no security of tenure and can be dismissed
anytime. The Court found that respondent was illegally terminated and
ordered her reinstatement. Casual employees are entitled to due process
especially if they are to be removed for more serious causes or for causes
other than the reasons mentioned in CSC Form No. 001. This is pursuant
to Section 2, Article IX(B) of the Constitution. Furthermore, Section 46 of
the Civil Service Law provides that no ofcer or employee in the Civil
Service shall be suspended or dismissed except for cause as provided by
law after due process. The reason for this is that their termination from
the service could carry a penalty affecting their rights and future
employment in the government.

MAY
Section 10, Republic
Act No. 8042;
unconstitutional.
Claudio S. Yap vs. Thenamaris Ships Management and Intermare
Maritime Agencies, Inc., G.R. No. 179532, May 30, 2011

Petitioner Yap was employed as an electrician for respondents vessel
under a 12-month contract. He was found to be illegally terminated with
nine months remaining on his contract term. The Court of Appeals (CA)
awarded petitioner salaries for three months as provided under Section
10 of Republic Act No. 8042. On certiorari, the Supreme Court reversed
the CA and declared that petitioner was entitled to his salaries for the full
unexpired portion of his contract. The Court has previously declared in
Serrano v. Gallant Maritime Services, Inc. (2009) that the clause or for
three months for every year of the unexpired term, whichever is less
provided in the 5th paragraph of Section 10 of R.A. No. 8042 is
unconstitutional for being violative of the rights of Overseas Filipino
Workers (OFWs) to equal protection of the laws. The subject clause
contains a suspect classication in that, in the computation of the
monetary benets of xed-term employees who are illegally discharged,
it imposes a 3-month cap on the claim of OFWs with an unexpired portion
of one year or more in their contracts, but none on the claims of other
OFWs or local workers with xed-term employment. The subject clause
singles out one classication of OFWs and burdens it with a peculiar
disadvantage. Moreover, the subject clause does not state or imply any
denitive governmental purpose; hence, the same violates not just
petitioners right to equal protection, but also his right to substantive
due process under Section 1, Article III of the Constitution.

Doctrine of Operative
Fact; applied as a
matter of equity and
fair play.

Petitioner Yap was employed on respondents vessel under a 12-month
contract. Upon nding that he was illegally terminated, the Court of
Appeals (CA) awarded petitioner salaries for three months as provided
under Section 10 of Republic Act No. 8042 (RA 8042). While the case was
pending in the Supreme Court, Section 10 of RA 8042 was declared
unconstitutional. In deciding to award petitioner his salaries for the entire
unexpired portion of his contract, the Supreme Court rejected the
application of the operative fact doctrine. As an exception to the general
rule, the doctrine applies only as a matter of equity and fair play. It
recognizes that the existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have consequences which
cannot always be ignored. The doctrine is applicable when a declaration
of unconstitutionality will impose an undue burden on those who have
relied on the invalid law. This case should not be included in the
aforementioned exception. After all, it was not the fault of petitioner that
he lost his job due to an act of illegal dismissal committed by respondents.
To rule otherwise would be iniquitous to petitioner and other OFWs, and
would, in effect, send a wrong signal that principals/employers and
recruitment/manning agencies may violate an OFWs security of tenure
which an employment contract embodies and actually prot from such
violation based on an unconstitutional provision of law.

Migrant workers;
computation of salary
award.

Petitioner Yap was employed as an electrician for respondents vessel
under a 12-month contract. He was found to be illegally terminated with
nine months remaining on his contract term, and was declared to be
entitled to his salaries for the balance of his contract. Respondents claim
that the tanker allowance should be excluded from the denition of the
term salary. The Supreme Court, after examining the relevant clauses of
the contract, rejected respondents claim. The word salaries in Section 10
(5) does not include overtime and leave pay. For seafarers, DOLE
Department Order No. 33, series 1996, provides a Standard Employment
Contract of Seafarers, in which salary is understood as the basic wage,
exclusive of overtime, leave pay and other bonuses. A close perusal of the
contract reveals that the tanker allowance of US$130.00 was not
categorized as a bonus but was rather encapsulated in the basic salary
clause, hence, forming part of the basic salary of petitioner. If respondents
intended it differently, the contract per se should have indicated that said
allowance does not form part of the basic salary or, simply, the contract
should have separated it from the basic salary clause.

Termination for Just
Cause; separation pay
by way of nancial
assistance.
Juliet G. Apacible vs. Multimed Industries, et al., G.R. No. 178903, May
30, 2011

Petitioner Juliet Apacible was employed as Assistant Area Sales Manager
for respondents Cebu operations. She was informed that she would be
transferred to the Pasig ofce on account of the ongoing reorganization.
Petitioners repeated refusal to comply with the transfer order was
treated by respondent as insubordination and grounds for her dismissal.
The Labor Arbiter, the NLRC and the Court of Appeals all found that
petitioner was justly dismissed from employment. The NLRC awarded
separation pay as nancial assistance, however, noting that petitioners
obstinacy was upon the advice of her counsel and, therefore, there was a
modicum of good faith on her part. On appeal, the Court of Appeals (CA)
deleted the award of separation pay. The Supreme Court upheld the CA
and declared that the award of nancial assistance shall not be given to
validly terminated employees, whose offenses are iniquitous or reective
of some depravity in their moral character. When the employee commits
an act of dishonesty, depravity, or iniquity, the grant of nancial
assistance is misplaced compassion. In this case, petitioners adamant
refusal to transfer, coupled with her failure to heed the order for her to
return the company vehicle assigned to her and, more importantly,
allowing her counsel to write letters couched in harsh language to her
superiors unquestionably show that she was guilty of insubordination,
hence, not entitled to the award of separation pay.

Appeal; posting of
Appeal Bond;
Governments
exemption from the
same.
Banahaw Broadcasting Corporation vs. Cayetano PACANa III, et al,
G.R. No. 171673, May 30, 2011

Respondents are supervisory and rank and le employees of the DXWG-
Iligan City radio station which is owned by petitioner Banahaw
Broadcasting Corporation (BBC). Respondents led a complaint for illegal
dismissal, unfair labor practice, and reimbursement of unpaid Collective
Bargaining Agreement (CBA) benets against petitioner. The Labor
Arbiter rendered a decision ordering petitioner BBC to pay the money
claims. On appeal to the NLRC, petitioner BBC averred that since it is
wholly owned by the Republic of the Philippines, it need not post an
appeal bond. The NLRC dismissed the appeal of BBC for non-perfection.
The Court of Appeals afrmed the NLRC. The Supreme Court, in
sustaining the CA, held that as a general rule, the government and all the
attached agencies with no legal personality distinct from the former are
exempt from posting appeal bonds. The rationale is to protect the
presumptive judgment creditor against the insolvency of the presumptive
judgment debtor. When the State litigates, it is not required to put up an
appeal bond because it is presumed to be always solvent. This exemption,
however, does not, as a general rule, apply to government-owned and
controlled corporations (GOCCs) for the reason that the latter has a
personality distinct from its shareholders. In this case, BBC, though
owned by the government, is a corporation with a personality distinct
from the Republic or any of its agencies or instrumentalities, and
therefore do not partake in the latters exemption from the posting of
appeal bonds.

Appeal; posting of
appeal bond within
the 10-day period is
mandatory and
jurisdictional.
Banahaw Broadcasting Corporation vs. Cayetano PACANa III, et al,
G.R. No. 171673, May 30, 2011

Respondents led a complaint for illegal dismissal, unfair labor practice,
and reimbursement of unpaid Collective Bargaining Agreement (CBA)
benets against petitioner. The Labor Arbiter rendered a decision in favor
of respondents and ordered petitioner BBC to pay the money claims.
Petitioner appealed to the NLRC, and without posting the appeal bond,
led a Motion for the Re-computation of the Monetary Award in order
that the appeal bond may be reduced. The NLRC denied the motion and
dismissed the appeal of BBC for non-perfection. The Court of Appeals and
the Supreme Court both sustained the dismissal by the NLRC. The Motion
for the Re-computation of the Monetary Award led by BBC was
tantamount to a motion for extension to perfect the appeal, which is
prohibited by the rules. The payment of the appeal bond within the
period provided by law is an indispensable and jurisdictional requisite
and not a mere technicality of law or procedure. Hence, the failure on the
part of BBC to perfect the appeal had the effect of rendering the judgment
nal and executory.

Voluntary
Resignation; nancial
assistance may be
awarded on equity
considerations.
Rodolfo Luna vs. Allado Construction Company, Inc. and/or Ramon
Allado, G.R. No. 175251, May 30, 2011

Petitioner led a complaint for illegal dismissal against respondent.
Finding instead that petitioner had voluntarily resigned, the Labor Arbiter
dismissed the complaint against respondent, but ordered the latter to pay
P18,000.00 by way of nancial assistance. On appeal, the NLRC found
petitioner to be illegally dismissed. The Court of Appeals reafrmed the
ndings of the LA but deleted the award of nancial assistance, ruling that
the same may not be awarded in cases of voluntary resignation. The
Supreme Court, in upholding the award of nancial assistance, stated that
while the rule is that nancial assistance is allowed only in instances
where the employee is validly dismissed for causes other than serious
misconduct or those reecting on his moral character, there are instances
when nancial assistance may be allowed as a measure of social justice
and as an equitable concession. In this case, petitioner, who has served
respondent for more than eight years without committing any infraction,
may be granted such nancial assistance on equity considerations.

National Labor
Relations
Commission;
authority to review is
limited to issues
specically brought
before
it on appeal.
Rodolfo Luna vs. Allado Construction Company, Inc. and/or Ramon
Allado, G.R. No. 175251, May 30, 2011

Petitioner led a complaint for illegal dismissal against respondent.
Finding that petitioner had voluntarily resigned, the Labor Arbiter
dismissed the complaint against respondent, but ordered the latter to pay
P18,000.00 by way of nancial assistance. Respondents interposed an
appeal with the National Labor Relations Commission (NLRC), purely for
the purpose of questioning the validity of the grant of nancial assistance
made by the Labor Arbiter. Instead, the NLRC ruled that petitioner was
illegally dismissed and was entitled to separation pay. The Court of
Appeals (CA) held that it was grave abuse of discretion for the NLRC to
rule on the issue of illegal dismissal when the only issue raised to it on
appeal was the propriety of the award of nancial assistance. The
Supreme Court sustained the view of the CA, reasoning that Section 4(d),
Rule VI of the 2005 Revised Rules of Procedure of the NLRC expressly
provides that, on appeal, the NLRC shall limit itself only to the specic
issues that were elevated for review. In the case at bar, the NLRC
evidently went against its own rules of procedure when it passed upon
the issue of illegal dismissal although this question was not raised by
respondents in their appeal.

JUNE
Appeal; decision of
DOLE Secretary
Miguel Dela Pena Barairo vs. Ofce of the President and MST Marine
Services (Phils.) Inc., G.R. No. 189314.

For petitioners refusal to comply with his deployment assignment,
respondent manning agency led a complaint against him for breach of
contract before the Philippine Overseas Employment Administration
(POEA). The POEA penalized petitioner with one year suspension from
overseas deployment. The suspension was reduced to six months by the
Secretary of Labor. Petitioner appealed the latters decision with the
Ofce of the President (OP). The Supreme Court ruled that petitioners
appeal was erroneous. The proper remedy to question the decisions or
orders of the Secretary of Labor is via Petition for Certiorari under Rule
65. Appeals to the OP in labor cases have been eliminated, except those
involving national interest over which the President may assume
jurisdiction. The present case does not affect national interest. Hence,
petitioners appeal to the OP did not toll the running of the period and the
assailed decision of the Secretary of Labor is deemed to have attained
nality.

Appeal from decisions
of labor arbiter; bond
requirement for
perfection of appeal
may be relaxed in
meritorious cases.
University Plans, Inc. vs. Belinda P. Solano, et al., G.R. No. 170416, June
22, 2011

The posting of a bond is indispensable to the perfection of an appeal in
cases involving monetary awards from the decision of the labor arbiter.
However, under Section 6, Rule VI of the NLRCs Revised Rules of
Procedure, the bond may be reduced albeit only (1) on meritorious
grounds and (2) upon posting of a partial bond in a reasonable amount in
relation to the monetary award. For this purpose, the NLRC is not
precluded from conducting a preliminary determination of the employers
nancial capability to post the required bond, without necessarily passing
upon the merits. In the present case, the NLRC gravely abused its
discretion in denying petitioners motion to reduce bond peremptorily
without considering the evidence presented by petitioner showing that it
was under a state of receivership. Such circumstance constitutes
meritorious grounds to reduce the bond. Moreover, the petitioner
exhibited its good faith by posting a partial cash bond during the
reglementary period.

Certiorari; substantial
compliance.
William Endeliseo Barroga vs. Data Center College of the Philippines,
et al., G.R. No. 174158. June 27, 2011

The three material dates which should be stated in the petition for
certiorari under Rule 65 are the dates when the notice of judgment was
received, when a motion for reconsideration was led and when the
notice of the denial of the motion for reconsideration was received. These
dates should be reected in the petition to enable the reviewing court to
determine if the petition was led on time. In the present case, the
petition led with the Court of Appeals failed to state when petitioner
received the assailed NLRC Decision and when he led his partial motion
for reconsideration. However, this omission is not at all fatal because
these material dates are reected in petitioners Partial Motion for
Reconsideration attached to the petition. The failure to state these two
dates in the petition may be excused if the same are evident from the
records of the case. The Court further stated that the more important
material date which must be duly alleged in the petition is the date of
receipt of the resolution of denial of the motion for reconsideration. Since
petitioner has duly complied with this rule, there was substantial
compliance with the requisite formalities.

Collective bargaining
agreement; duty of
parties to maintain
status quo pending
renegotiation.
General Milling Corporation-Independent Labor Union [GMC-ILU] vs.
General Milling Corporation/General Milling Corporation vs. General
Milling Corporation-Independent Labor Union [GMC-ILU], et al., G.R.
Nos. 183122/183889, June 15, 2011

Article 253 of the Labor Code mandates the parties to keep the status quo
and to continue in full force and effect the terms and conditions of the
existing agreement during the 60-day period prior to the expiration of the
old CBA and/or until a new agreement is reached by the parties. The law
does not provide for any exception nor qualication on which economic
provisions of the existing agreement are to retain its force and effect.
Likewise, the law does not distinguish between a CBA duly agreed upon
by the parties and an imposed CBA like the one in the present case. Hence,
considering that no new CBA had been, in the meantime, agreed upon by
respondent GMC and the Union, the provisions of the imposed CBA
continues to have full force and effect until a new CBA is entered into by
the parties.
Damages; fraud or
bad faith for the
award of moral
damages.
Joeb M. Aliviado, et al. vs. Procter and Gamble Phils., Inc., et al., G.R. No.
160506, June 6, 2011

Moral and exemplary damages are recoverable where the dismissal of an
employee was attended by bad faith or fraud, or constituted an act
oppressive to labor, or were done in a manner contrary to morals, good
customs or public policy. In the present case, P&G dismissed its
employees in a manner oppressive to labor. The sudden and peremptory
barring of petitioners from work, and from admission to the work place,
after just a one-day verbal notice, and for no valid cause, constitutes
oppression and utter disregard of the right to due process of the
concerned petitioners. Hence, the Supreme Court held that an award of
moral damages is called for under the circumstances.

Dismissal;
constructive
dismissal.
William Endeliseo Barroga vs. Data Center College of the Philippines,
et al., G.R. No. 174158. June 27, 2011

Petitioner was employed as an instructor of Data Center College located
in Ilocos Norte. When the college proposed to transfer him to Abra, he
led a complaint alleging constructive dismissal since his re-assignment
will entail an indirect reduction of his salary or diminution of pay
considering that no additional allowance will be given to cover for board
and lodging expenses. He claims that such additional allowance was given
in the past and therefore cannot be discontinued and withdrawn without
violating the prohibition against non-diminution of benets. The Supreme
Court afrmed the ndings of the lower bodies and declared that
petitioners re-assignment did not amount to constructive dismissal.
Constructive dismissal is quitting because continued employment is
rendered impossible, unreasonable or unlikely, or because of a demotion
in rank or a diminution of pay. It exists when there is a clear act of
discrimination, insensibility or disdain by an employer which becomes
unbearable for the employee to continue his employment. In the present
case, the colleges right to transfer petitioner is based on contractual
stipulation, particularly the condition laid down in petitioners
employment contract that respondents have the prerogative to assign
petitioner in any of its branches or tie-up schools as the necessity
demands. In any event, it is management prerogative for employers to
transfer employees on just and valid grounds such as genuine business
necessity. Since respondents have shown that it was experiencing some
nancial constraints at the time, the re-assignment was not tainted with
bad faith. Furthermore, petitioner failed to present evidence that
respondents committed to provide the additional allowance or that they
were consistently granting such benet as to have ripened into a practice
which cannot be peremptorily withdrawn. Hence, there is no violation of
the rule against diminution of pay.

Dismissal; elements
for loss of trust or
condence
160506, June 6, 2011

Petitioners were employees of Promm-Gem, a legitimate independent
contractor, and were hired to work as merchandisers for respondent P&G.
When petitioners led a claim against P&G for regularization and other
benets, it likewise attacked Promm-Gem as being merely a labor-only
contractor. The latter treated such move as an act of disloyalty against
Promm-Gem and petitioners were dismissed on the ground of grave
misconduct and breach of trust. The Supreme Court declared such
termination illegal for being without valid cause. Loss of trust and
condence, as a cause for termination of employment, is premised on the
fact that the employee concerned holds a position of responsibility or of
trust and condence. As such, he must be invested with condence on
delicate matters, such as custody, handling or care and protection of the
property and assets of the employer. Moreover, in order to constitute a
just cause for dismissal, the act complained of must be work-related and
must show that the employee is unt to continue to work for the
employer. In the instant case, the petitioners have not been shown to be
occupying positions of responsibility or of trust and condence. Neither is
there any evidence to show that they are unt to continue to work as
merchandisers for Promm-Gem.

Dismissal; elements
for serious
misconduct.
160506, June 6, 2011

Petitioners were employees of Promm-Gem, a legitimate independent
contractor. After several years of working as merchandisers for
respondent P&G, petitioners led a claim against P&G for regularization
and other benets, and asserted incidentally that Promm-Gem was
merely a labor-only contractor. The latter treated such move as an act of
disloyalty against Promm-Gem and petitioners were dismissed on the
ground of grave misconduct and breach of trust. The Supreme Court
declared such termination illegal for lack of a valid clause. To be a just
cause for dismissal, such misconduct (a) must be serious; (b) must relate
to the performance of the employees duties; and (c) must show that the
employee has become unt to continue working for the employer. In
other words, in order to constitute serious misconduct under Article 282
(a) of the Labor Code, it is not sufcient that the act or conduct
complained of has violated some established rules or policies. It is equally
important and required that the act or conduct must have been
performed with wrongful intent. In the instant case, petitioners may have
committed an error of judgment in claiming to be employees of P&G, but
it cannot be said that they were motivated by any wrongful intent in
doing so. As such, the court found them guilty of simple misconduct only
which does not warrant a dismissal.

Dismissal; nancial
assistance based on
equity.
Romeo Villaruel vs. Yeo Han Guan, doing business under the name and
style Yuhans Enterprises, G.R. No. 169191, June 1, 2011

The award of separation pay is authorized under Article 283 and 284 of
the Labor Code, and under Section 4 (b), Rule I, Book VI of the
Implementing Rules and Regulations where there is illegal dismissal and
reinstatement is no longer feasible. By way of exception, the courts have
allowed grants of separation pay to stand as a measure of social justice
where the employee is validly dismissed for causes other than serious
misconduct or those reecting on his moral character. However, there is
no provision in the Labor Code which grants separation pay to voluntarily
resigning employees. In fact, the rule is that an employee who voluntarily
resigns from employment is not entitled to separation pay, except when it
is stipulated in the employment contract or collective bargaining
agreement (CBA), or it is sanctioned by established employer practice or
policy. In the present case, neither the abovementioned provisions of the
Labor Code nor the exceptions apply because petitioner was not
dismissed from his employment nor is there any evidence to show that
payment of separation pay is stipulated in his employment contract or
sanctioned by established practice or policy of his employer.
Nevertheless, the Court noted that petitioner never had any derogatory
record during his long years of service with respondent and that his
employment was severed not by reason of any infraction on his part but
because of his failing physical condition. Hence, as a measure of social and
compassionate justice and as an equitable concession, the Court granted
separation pay to petitioner by way of nancial assistance.

Dismissal; separation
pay due to disease.

Petitioner was employed as a machine operator until he stopped working
when he suffered from an illness. After his recovery, petitioner was
directed to report for work but he refused. Instead, he led a case with
the NLRC demanding his separation pay. The NLRC awarded him
separation benets under Article 284 of the Labor Code. However, the
Court of Appeals (CA) deleted such award. On appeal, the Supreme Court
stated that Article 284 presupposes that it is the employer who
terminates the services of the employee 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. It
does not contemplate a situation where it is the employee who severs his
or her employment ties. This is precisely the reason why Section 8, Rule 1,
Book VI of the Omnibus Rules Implementing the Labor Code, directs that
an employer shall not terminate the services of the employee unless there
is a certication 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. In the present case,
petitioner was not terminated from his employment and, instead, is
deemed to have resigned therefrom, and therefore he is not entitled to
separation pay under Article 284 of the Labor Code.

DOLE assumption of
jurisdiction; effects.
Yolito Fadriquelan, et al. vs. Monterey Foods Corporation/Monterey
Foods Corporation v. Bukluran ng mga Manggagawa sa Monterey-
ILAW, et al., G.R. No. 178409/G.R. No. 178434, June 8, 2011

A strike conducted after the Secretary of Labor has assumed jurisdiction
over a labor dispute is illegal and any union ofcer who knowingly
participates in the strike may be declared as having lost his employment.
The present case involved a slowdown strike. Unlike other forms of strike,
the employees involved in a slowdown do not walk out of their jobs to
hurt the company. They need only to stop work or reduce the rate of their
work while generally remaining in their assigned post. The Supreme
Court upheld the nding that the union ofcers committed illegal acts that
warranted their dismissal from work when they refused to work or
abandoned their work to join union assemblies after the Labor Secretary
assumed jurisdiction over the labor dispute.

Independent job
contracting; required
substantial capital.
160506, June 6, 2011

Petitioners assert that they are employees of P&G and that Promm-Gem
and SAPS are merely labor-only contractors providing manpower services
to P&G. 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 the instant case, the Supreme Court found that
Promm-Gem has substantial investment which relates to the work to be
performed. The nancial statements show that it has authorized capital
stock of P1 million and a substantial amount of paid-in capital and other
assets to support its operations. Under the circumstances, Promm-Gem
cannot be considered a labor-only contractor; it is in fact a legitimate
independent contractor. On the other hand, the nancial records of SAPS
show that it has a paid-in capital of only P31,250.00. There is no other
evidence presented to show how much its working capital and assets are.
Furthermore, there is no showing of substantial investment in tools,
equipment or other assets. Considering that SAPS has no substantial
capital or investment and the workers it recruited are performing
activities which are directly related to the principal business of P&G, SAPS
is considered to be engaged in labor-only contracting.

Labor law; labor-only
contracting v.
independent job
contracting.
160506, June 6, 2011

The law allows contracting arrangements for the performance of specic
jobs, works or services, regardless of whether such activity is peripheral
or core in nature. However, in order for such outsourcing to be valid, it
must be made to an independent contractor because the current labor
rules expressly prohibit labor-only contracting. There is labor-only
contracting when the contractor or sub-contractor merely recruits,
supplies or places workers to perform a job, work or service for a
principal and any of the following elements are present: (i) The
contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and
the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the
main business of the principal; or (ii) The contractor does not exercise the
right of control on the performance of the work of the contractual
employee. Where labor-only contracting exists, the law establishes an
employer-employee relationship between the employer and the
employees of the labor-only contractor. The statute establishes this
relationship for a comprehensive purpose: to prevent a circumvention of
labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only
contractor as if such employees had been directly employed by the
principal employer. In the present case, petitioners, who were recruited
by Promm-Gem and SAPS to work as merchandisers of respondent P&G,
led a complaint against the latter for regularization, service incentive
leave pay and other benets on the ground that they were employees of
P&G. With respect to the contractor Promm-Gem, it was found to be a
legitimate independent job contractor; hence, there was no employer-
employee relationship between its workers and P&G. On the other hand,
SAPS was found to be engaged in labor-only contracting. Consequently,
the petitioners who have been recruited and supplied by SAPS are
considered to be the employees of P&G.

Labor strikes; liability
of union ofcers and
participating workers.
Yolito Fadriquelan, et al. vs. Monterey Foods Corporation/Monterey
Foods Corporation v. Bukluran ng mga Manggagawa sa Monterey-
ILAW, et al., G.R. No. 178409/G.R. No. 178434, June 8, 2011

A distinction exists between the ordinary workers liability for illegal
strike and that of the union ofcers who participated in it. The ordinary
worker cannot be terminated for merely participating in the strike. There
must be proof that he committed illegal acts during its conduct. On the
other hand, a union ofcer can be terminated upon mere proof that he
knowingly participated in the illegal strike. Moreover, the participating
union ofcers have to be properly identied. In the present case, with
respect to those union ofcers whose identity and participation in the
strike having been properly established, the termination was legal.

Secretary of Labor;
power to give arbitral
awards.
Cirtek Employees Labor Union-Federation of Free workers vs. Cirtek
Electronics, Inc., G.R. No. 190515. June 6, 2011

The Secretary of Labor is empowered to give arbitral awards in the
exercise of his authority to assume jurisdiction over labor disputes under
Art. 263 (g) of the Labor Code. In the present case, the Supreme Court
upheld the authority of the Secretary of Labor to impose arbitral awards
higher than what was supposedly agreed upon in the Memorandum of
Agreement (MOA) between the parties. The Court further stated that
while an arbitral award cannot per se be categorized as an agreement
voluntarily entered into by the parties because it requires the
interference and imposing power of the State thru the Secretary of Labor
when he assumes jurisdiction, the award can be considered as an
approximation of a collective bargaining agreement which would
otherwise have been entered into by the parties. Hence, it has the force
and effect of a valid contract obligation between the parties.

Termination of
employment;
resignation v.
dismissal.

Petitioner claims he was dismissed on the ground of illness and was
therefore entitled to separation benets under Article 284 of the Labor
Code. The Supreme Court (SC) disagreed and instead found that
petitioner was the one who initiated the severance of his employment
relations on the ground that his health was failing. In fact, he rejected
respondents offer for him to return to work. The SC declared that this is
tantamount to resignation. Resignation is dened as the voluntary act of
an employee who nds himself in a situation where he believes that
personal reasons cannot be sacriced in favor of the exigency of the
service and he has no other choice but to disassociate himself from his
employment.

Unions; disafliation. Cirtek Employees Labor Union-Federation of Free workers vs. Cirtek
Electronics, Inc., G.R. No. 190515. June 6, 2011

A local union may disafliate at any time from its mother federation,
absent any showing that the same is prohibited under its constitution or
rules. Such disafliation, however, does not result in it losing its legal
personality. A local union does not owe its existence to the federation
with which it is afliated. It is a separate and distinct voluntary
association owing its creation to the will of its members. The mere act of
afliation does not divest the local union of its own personality, neither
does it give the mother federation the license to act independently of the
local union. It only gives rise to a contract of agency where the former acts
in representation of the latter. In the present case, whether the FFW went
against the will of its principal (the member-employees) by pursuing the
case despite the signing of the MOA, is not for the Court, nor for
respondent employer to determine, but for the Union and FFW to resolve
on their own pursuant to their principal-agent relationship. Moreover, the
issue of disafliation is an intra-union dispute which must be resolved in
a different forum in an action at the instance of either or both the FFW
and the union or a rival labor organization, but not the employer as in this
case.

AUGUST
Labor relations;
appropriate
bargaining unit.
San Miguel Foods, Inc. vs. San Miguel Corp. Supervisors and Exempt
Union, G.R. No. 146206. August 1, 2011

An appropriate bargaining unit is dened as a group of employees of a
given employer, comprised of all or less than all of the entire body of
employees, which the collective interest of all the employees, consistent
with equity to the employer, indicate to be best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining
provisions of the law. The test of grouping is community or mutuality of
interest. In this case, there should be only one bargaining unit for the
employees in the Cabuyao, San Fernando, and Otis plants of the Magnolia
Poultry Products involved in dressed chicken processing and Magnolia
Poultry Farms engaged in live chicken operations. Certain factors, such
as specic line of work, working conditions, location of work, mode of
compensation, and other relevant conditions do not affect or impede their
commonality of interest. Although they seem separate and distinct from
each other, the specic tasks of each division are actually interrelated and
there exists mutuality of interests which warrants the formation of a
single bargaining unit.

Labor organization;
condential
employees.

Condential employees are dened as those who (1) assist or act in a
condential capacity, in regard (2) to persons who formulate, determine,
and effectuate management policies in the eld of labor relations. The two
criteria are cumulative, and both must be met if an employee is to be
considered a condential employee. Condential employees, such as
accounting personnel, should be excluded from the bargaining unit, as
their access to condentia information may become the source of undue
advantage. However, such fact does not apply to the position of Payroll
Master (as in this case) and the whole gamut of employees who has access
to salary and compensation data. The CA correctly held that the position
of Payroll Master does not involve dealing with condential labor
relations information in the course of the performance of his functions.
In other words, since the nature of his work does not pertain to company
rules and regulations and condential labor relations, it follows that he
cannot be excluded from the subject bargaining unit.

Labor organization;
ineligibility to join.

Although Article 245 of the Labor Code limits the ineligibility to join, form
and assist any labor organization to managerial employees, jurisprudence
has extended this prohibition to condential employees. In this regard,
the CA correctly ruled that the positions of Human Resource Assistant and
Personnel Assistant belong to the category of condential employees and,
hence, are excluded from the bargaining unit, considering their respective
positions and job descriptions. As Human Resource Assistant, the scope of
ones work necessarily involves labor relations, recruitment and selection
of employees, access to employees personal les and compensation
package, and human resource management. As regards a Personnel
Assistant, ones work includes the recording of minutes for management
during collective bargaining negotiations, assistance to management
during grievance meetings and administrative investigations, and
securing legal advice for labor issues from thepetitioners team of
lawyers, and implementation of company programs. Therefore, in the
discharge of their functions, both gain access to vital labor relations
information which outrightly disqualies them from union membership.

Certication election;
role of employers.

The general rule is that an employer has no standing to question the
process of certication election, since this is the sole concern of the
workers. Law and policy demand that employers take a strict, hands-off
stance in certication elections. The bargaining representative of
employees should be chosen free from any extraneous inuence of
management. The only exception is where the employer itself has to le
the petition pursuant to Article 258 of the Labor Code because of a
request to bargain collectively.

Appeal of the decision
of the labor arbiter;
posting of bond.
Marticio Semblante and Dubrick Pilar vs. Court of Appeals, G.R. No.
196426. August 15, 2011

The posting of a bond is indispensable to the perfection of an appeal in
cases involving monetary awards from the Decision of the Labor Arbiter.
However, the Supreme Court, considering the substantial merits of the
case, has on certain occasions relaxed this rule on, and excused the late
posting of, the appeal bond when there are strong and compelling reasons
for the liberality. In this case, the exception applies. The rule on the
posting of an appeal bond cannot defeat the substantive rights of
respondents to be free from an unwarranted burden of answering for an
illegal dismissal for which they were never responsible since no
employer-employee relationship existed between the two.

Employer-employee
relationship; four-fold
test.
Marticio Semblante and Dubrick Pilar vs. Court of Appeals, G.R. No.
196426. August 15, 2011

Petitioners are not employees of respondents, since their relationship
failed to pass the four-fold test of employment: (1) the selection and
engagement of the mployee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employees conduct, which is
the most important element. As found by both the NLRC and the CA,
respondents had no part in petitioners selection and management;
petitioners compensation was paid out of the arriba (which is a
percentage deducted from the total bets), not by petitioners; and
petitioners performed their functions as masiador and sentenciador free
from the direction and control of respondents.

Labor; illegal
recruitment in large
scale
People of the Philippines vs. Rosario Rose Ochoa, G.R. No. 173792.
August 31, 2011

To prove illegal recruitment, it must be shown that appellant gave
complainants the distinct impression that she had the power or ability to
send complainants abroad for work such that the latter were convinced to
part with their money in order to be employed. All eight private
complainants in this case consistently declared that Ochoa offered and
promised them employment overseas. Moreover, Ochoa can also be
convicted for illegal recruitment based on Section 6 of Republic Act No.
8042, which clearly provides that any person, whether or not a licensee
or holder of authority may be held liable for illegal recruitment for certain
acts as enumerated in paragraphs (a) to (m). Among such acts is the
failure to reimburse expenses incurred by the worker in connection with
his documentation and processing for purposes of deployment, in cases
where the deployment does not actually take place without the workers
fault. In this case, Ochoa received placement and medical fees from
private complainants and failed to reimburse the private complainants
the amounts they had paid when they were not able to leave for Taiwan
and Saudi Arabia, through no fault of their own.

admissibility of POEA
certication.
August 31, 2011

Section 36, Rule 130 of the Revised Rules on Evidence, states that a
witness can testify only to those facts which he knows of or comes from
his personal knowledge, that is, which are derived from his perception.
This is known as the hearsay rule. The law, however, provides for specic
exceptions to the hearsay rule, and one of the exceptions refers to entries
in ofcial records made in the performance of duty by a public ofcer.
Accordingly, in the case at bar, although Dir. Mateo was not presented in
court or did not testify during the trial to verify the said certication, such
certication is considered as prima facie evidence of the facts stated
therein and is therefore presumed to be truthful, because Ochoa did not
present any plausible proof to rebut its truthfulness.

Illegal recruitment
and estafa; may be
charged separately.
August 31, 2011

A person may be charged and convicted separately of illegal recruitment
under Republic Act No. 8042, in relation to the Labor Code, and estafa
under Article 315, paragraph 2(a) of the Revised Penal Code. The offense
of illegal recruitment is malum prohibitum, while estafa is malum in se. In
this case, therefore, Ochoa may also be charged and correspondingly held
liable for estafa since all the elements for the crime are present in
Criminal Case Nos. 98-77301, 98-77302, and 98-77303. Ochoas deceit
was evident in her false representation to private complainants Gubat,
Cesar, and Agustin that she possessed the authority and capability to send
said private complainants to Taiwan/Saudi Arabia for employment as
early as one to two weeks from completion of the requirements, among
which were the payment of placement fees and submission of a medical
examination report.

Floating status;
validity.
Nippon Housing Phil. Inc., et al. vs. Maiah Angela Leynes, G.R. No.
177816, August 3, 2011

The rule is settled that off-detailing is not equivalent to dismissal, so
long as such status does not continue beyond a reasonable time and that
it is only when such a oating status lasts for more than six months that
the employee may be considered to have been constructively dismissed. A
complaint for illegal dismissal led prior to the lapse of the six-month
period and/or the actual dismissal of the employee is generally
considered as prematurely led. In this case, the evidence adduced a quo
clearly indicates that petitioners were not in bad faith when they placed
Leynes under oating status. Disgruntled by NHPIs countermanding of
her decision to bar Engr. Cantuba from the Project, Leynes twice signied
her intention to resign from her position on 12 February 2002. In view of
the sensitive nature of Leynes position and the critical stage of the
Projects business development, NHPI was constrained to hire Engr. Jose
as Leynes replacement as a remedial measure.

Constructive
dismissal; burden of
proof.
Nippon Housing Phil. Inc., et al. vs. Maiah Angela Leynes, G.R. No.
177816, August 3, 2011

Constructive dismissal exists where there is cessation of work because
continued employment is rendered impossible, unreasonable or unlikely,
as an offer involving a demotion in rank and a diminution in pay. In
constructive dismissal cases, the employer is, concededly, charged with
the burden of proving that its conduct and action or the transfer of an
employee are for valid and legitimate grounds such as genuine business
necessity. The Supreme Court found that in this case, respondents have
more than amply discharged this burden with proof of the circumstances
surrounding Engr. Carlos employment as Property Manager for the
Project and the consequent unavailability of a similar position for Leynes.

Pleading; verication. Francis Bello, represented herein by his daughter and attorney-in-
fact, Geraldine Bello-Ona vs. Bonifacio Security Services, Inc. and
Samuel Tomas, G.R. No. 188086, August 3, 2011

Verication of a pleading is a formal, not jurisdictional, requirement
intended to secure the assurance that the matters alleged in a pleading
are true and correct. It is deemed substantially complied with when one
who has ample knowledge to swear to the truth of the allegations in the
complaint or petition signs the verication, and when matters alleged in
the petition have been made in good faith or are true and correct. In this
case, the Supreme Court found that the petitions verication
substantially complied with the requirements of the rules. The SPA
authorized Bello-Ona to represent Bello in the case from which the
present petition with the Supreme Court originated. As the daughter of
Bello, Bello-Ona is deemed to have sufcient knowledge to swear to the
truth of the allegations in the petition, which are matters of record in the
lower tribunals and the appellate court.

Dismissal;
constructive
dismissal.
Francis Bello, represented herein by his daughter and attorney-in-
fact, Geraldine Bello-Ona vs. Bonifacio Security Services, Inc. and
Samuel Tomas, G.R. No. 188086, August 3, 2011

Case law denes constructive dismissal as a cessation of work because
continued employment has been rendered impossible, unreasonable, or
unlikely, as when there is a demotion in rank or diminution in pay, or
both, or when a clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee. In this case, other than
his bare and self serving allegations, Bello has not offered any evidence
that he was promoted in a span of four months since his employment as
trafc marshal in July 2001 to a detachment commander in November
2001. At most, the BSSI merely changed his assignment or transferred
him to the post where his service would be most benecial to its clients.
The managements prerogative of transferring and reassigning employees
from one area of operation to another in order to meet the requirements
of the business is generally not constitutive of constructive dismissal. This
was what exactly occurred in this case.

Procedural rules;
failure to attach
duplicate original or
certied true copy of
the assailed decision.
Jobel Enterprises and/or Mr. Benedict Lim vs. NLRC and Eric Martinez,
Sr., G.R. No. 194031, August 8, 2011

The refusal of the Court of Appeals to consider the petition was the
absence of a duplicate original or certied true copy of the assailed NLRC
decision, in violation of Section 3, Rule 46 of the Rules of Court (in
relation to Section 1, Rule 65). The company, however, corrected the
procedural lapse by attaching a certied copy of the NLRC decision to its
motion for reconsideration. The Supreme Court found that the CA
precipitately denied the petition for certiorari based on an overly rigid
application of the rules of procedure. In effect, it sacriced substance to
form in a situation where the petitioners recourse was not patently
frivolous or meritless. Thus, the case was remanded to the NLRC for
resolution of its appeal.

Appeal; decision or
resolution of NLRC.
Atok Big Wedge Company, Inc. vs. Jesus P. Gison, G.R. No. 169510,
August 8, 2011

As was enunciated in the case of St. Martin Funeral Home v. NLRC, the
special civil action of certiorari under Rule 65 of the Rules of Civil
Procedure, which is led before the CA, is the proper vehicle for judicial
review of decisions of the NLRC. The petition should be initially led
before the Court of Appeals in strict observance of the doctrine on
hierarchy of courts as the appropriate forum for the relief desired. Thus,
respondents recourse to the CA was the proper remedy to question the
resolution of the NLRC.
Employer-employee
relationship; four-fold
test.
August 8, 2011

To ascertain the existence of an employer-employee relationship
jurisprudence has invariably adhered to the four-fold test, to wit: (1) the
selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power tocontrol the employees
conduct, or the so-called control test. Applying the aforementioned test,
an employer-employee relationship was found to be absent in the case at
bar. Among other things, respondent was not required to report everyday
during regular ofce hours of petitioner. Respondents monthly retainer
fees were paid to him either at his residence or a local restaurant. More
importantly, petitioner did not prescribe the manner in which respondent
would accomplish any of the tasks in which his expertise as a liaison
ofcer was needed; respondent was left alone and given the freedom to
accomplish the tasks using his own means and method. Verily, the
absence of the element of control on the part of the petitioner engenders
a conclusion that he is not an employee of the petitioner.

Employment; regular
employee.
August 8, 2011

Article 280 of the Labor Code, in which the lower court used to buttress
its ndings that respondent became a regular employee of the petitioner,
is not applicable in the case at bar. The Supreme Court has ruled that said
provision is not the yardstick for determining the existence of an
employment relationship because it merely distinguishes between two
kinds of employees, i.e., regular employees and casual employees, for
purposes of determining the right of an employee to certain benets, to
join or form a union, or to security of tenure; it does not apply where the
existence of an employment relationship is in dispute. It is, therefore,
erroneous on the part of the Court of Appeals to rely on Article 280 in
determining whether an employer-employee relationship exists between
respondent and the petitioner. Therefore, despite the fact that petitioner
made use of the services of respondent as a part-time consultant on
retainer basis for eleven years, he still cannot be considered as a regular
employee of petitioner using only as basis Article 280 of the Labor Code.

Claim of disability
benets and sickness
allowance; reporting
requirements.
Coastal Safeway Marine Services vs. Esguerra, G.R. No. 185352, August
10, 2011

Anent a seafarers entitlement to compensation and benets for injury
and illness, Section 20- B (3) of 2000 POEA-SEC provides that in order for
the seafarer to claim the said benets, he must submit himself to a post-
employment medical examination by a company-designated physician
within three working days upon his return, except when he is physically
incapacitated to do so, in which case, a written notice to the agency within
the same period is deemed as compliance. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benets. In this case, there was
no dispute regarding the fact that Esguerra had altogether failed to
comply with the mandatory reporting requirement. Esguerra also did not
present any evidence to prove justication for his inability to submit
himself to a post-employment medical examination by a company-
designated physician. Self-serving and unsubstantiated declarations are
insufcient to establish a case before quasi-judicial bodies where the
quantum of evidence required in establishing a fact is substantial
evidence.
SEPTEMBER
Employee;
probationary
employee.
St. Paul College Quezon City, et al. vs. Remigio Michael A. Ancheta II
and Cynthia A. Ancheta, G.R. No. 169905. September 7, 2011

Employment on probationary status of teaching personnel is not only
governed by the Labor Code but also by the Manual of Regulations for
Private Schools. Section 91 of the Manual of Regulations for Private
Schools, states that: Every contract of employment shall specify the
designation, qualication, salary rate, the period and nature of service
and its date of effectivity, and such other terms and condition of
employment as may be consistent with laws and rules, regulations and
standards of the school. Thus, it is important that the contract of
probationary employment specify the period or term of its effectivity. In
this case, therefore, the letters sent by petitioner College Dean Sr.
Racadio, which were devoid of specics, cannot be considered as
contracts. The closest they can resemble to are that of informal
correspondence among the said individuals. As such, petitioner school has
the right not to renew the contracts of the respondents, the old ones
having expired at the end of their terms. Assuming, arguendo, that the
employment contracts between the petitioner school and the respondent
spouses were renewed, the SC found that there was a valid and just cause
for their dismissal since petitioners have repeatedly violated several
departmental and instructional policies, such as the late submission of
nal grades, failure to submit nal test questions to the Program
Coordinator, the giving of tests in essay form instead of the multiple
choice format as mandated by the school and the high number of students
with failing grades in the classes that he handled.

Employee; existence
of employer-
employee
relationship.
Jose Mel Bernante vs. Philippine Basketball Association, et al., G.R. No.
192084. September 14, 2011

To determine the existence of an employer-employee relationship, case
law has consistently applied the four-fold test. Respondents argue that
the element of control is lacking in this case, making petitioner-referee an
independent contractor and not an employee of respondents. The
Supreme Court agreed as it found that there was no control over the
means and methods by which petitioner performs his work as a referee
ofciating a PBA basketball game. The contractual stipulations in the
retainer contracts do not pertain to, much less dictate, how and when
petitioner will blow the whistle and make calls. On the contrary, they
merely serve as rules of conduct or guidelines in order to maintain the
integrity of the professional basketball league. Moreover, the following
circumstances indicate that petitioner is an independent contractor: (1)
the referees are required to report for work only when PBA games are e
scheduled, which is three times a week spread over an average of only
105 playing days a year, and they ofciate games at an average of two
hours per game; and (2) the only deductions from the fees received by the
referees are withholding taxes. There are no deductions for contributions
to the Social Security System, Philhealth or Pag-Ibig, which are the usual
deductions from employees salaries. These undisputed circumstances
buttress the fact that petitioner is an independent contractor, and not an
employee of respondents.

Employee benets;
principle against
diminution of
benets.
University of the East vs. University of the East Employees
Association, G.R. No. 179593. September 14, 2011

The issue in this case was whether or not the change in the scheme of
distribution of the incremental proceeds from tuition fee increase is a
diminution of benet. The Court held that it was not. Generally,
employees have a vested right over existing benets voluntarily granted
to them by their employer. The principle against diminution of benets,
however, is applicable only if the grant or benet is founded on an
express policy or has ripened into a practice over a long period of time
which is consistent and deliberate. In other words, the benet must be
characterized by regularity and the voluntary and deliberate intent of the
employer to grant the benets over a signicant period of time. In the
case at bench, contrary to UEEAs claim, the distribution of the 70%
incremental proceeds based on equal sharing scheme cannot be held to
have ripened into a company practice since the practice has not been for a
long period of time. The same could not also have ripened into a vested
right because such grant was not a deliberate and voluntary act on the
part of the petitioner. The Supreme Court held that the grant by an
employer of benets through an erroneous application of the law due to
the absence of clear administrative guidelines is not considered a
voluntary act which cannot be unilaterally discontinued.

Employment benets;
entitlement to
vacation and sick
leave.
BPI Employees Union-Metro Manila, et al. vs. Bank of the Philippine
Islands/Bank of the Philippine Islands vs. BPI Employees Union-Metro
Manila, et al., G.R. Nos. 178699/178735. September 21, 2011

BPI contends that at the time of Uys dismissal, she was no longer
functioning as a teller of the bank but as a low-counter staff and as such,
Uy is not anymore entitled to the tellers functional allowance pursuant to
company policy. BPI further argues that Uy is neither entitled to the
monetary conversion of vacation and sick leaves for failure to prove that
she is entitled to these benets at the time of her dismissal. The Supreme
Court ruled that Uy is entitled to the tellers functional allowance but not
to the monetary conversion of vacation and sick leaves. Uys function as a
teller at the time of her dismissal was factually established and was never
impugned by the parties during the proceedings held in the main case.
Besides, BPI did not present any evidence to substantiate its allegation
that Uy was assigned as a low-counter staff at the time of her dismissal. It
is a hornbook rule that he who alleges must prove. As to the vacation and
sick leave cash conversion benet, the Supreme Court held that
entitlement to the same should be necessarily proved since this privilege
is not statutory or mandatory in character but only voluntarily granted.
As such, the existence of this benet as well as the employees entitlement
thereto cannot be presumed but should be proved by the employee. In
this case, however, the records failed to prove that Uy was receiving this
benet at the time of her dismissal on December 14, 1995.

Termination;
constructive
dismissal.
United Laboratories, Inc. vs. Jaime Domingo Substituted by his spouse
Carmencita Punzalan Domingo, et al., G.R. No. 186209, September 21,
2011

The concept of constructive dismissal is inapplicable to respondents in
this case. Constructive dismissal occurs when there is cessation of work
because continued employment is rendered impossible, unreasonable, or
unlikely as when there is a demotion in rank or diminution in pay or
when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee leaving the latter with no other
option but to quit. That the respondents were indeed not constructively
dismissed was found by the Supreme Court to be supported by
substantial evidence. First, respondents Domingo and Remigio, even
while their petition for certiorari was pending before the CA, remained
employed at UNILAB. In those instances, there was actually no dismissal
to speak of. Second, the respondents positions were not abolished, unlike
its provincial depots where the employees therein were considered
redundant employees. In this case, their accounting functions were
merely consolidated under the Finance Division of Unilab pursuant to its
Shared Services Policy (SSP). Respondents, who are accounting
employees, cannot refuse their assignment to the Finance Division. The
Supreme Court noted that it cannot accept the proposition that when an
employee opposes his employers decision to transfer him to another
work place, there being no bad faith or underhanded motives on the part
of either party, that the employees wishes should be made to prevail.

Termination; loss of
trust and condence.
Elmer Lopez vs. Keppel Bank Philippines, Inc. et al., G.R. No. 176800.
September 5, 2011

Loss of condence should ideally apply only to: (1) cases involving
employees occupying positions of trust and condence, or (2) situations
where the employee is routinely charged with the care and custody of the
employers money or property. As branch manager of the bank, Lopez
occupied a position of trust. His hold on his position and his stay in the
service depend on the employers trust and condence in him and on his
managerial services. In this case, the Supreme Court found that Lopezs
dismissal was justied. He betrayed the trust and condence of the
employer-bank when he issued the subject purchase orders without
authority and despite the express directive of the bank to put the clients
application on hold. The bank had a genuine concern over the granted
loan applications as it found through its credit committee that Hertz was a
credit risk. Whether the credit committee was correct or not is immaterial
as the banks direct order left Lopez without any authority to clear the
loan application on his own.

Termination; loss of
trust and condence.
Pamela Florentina P. Jumuad vs. Hi-Flyer Food, Inc. and/or Jesus R.
Montemayor, G.R. No. 187887. September 7, 2011

Jumuad was found to have willfully breached her duties as to be
unworthy of the trust and condence of Hi-Flyer. First, Jumuad was a
managerial employee; she executed management policies and had the
power to discipline the employees of KFC branches in her area. She
recommended actions on employees to the head ofce. According to the
Supreme Court, based on established facts, the mere existence of the
grounds for the loss of trust and condence justies petitioners
dismissal. In the present case, the CERs reports of Hi-Flyer show that
there were anomalies committed in the KFC branches managed by
Jumuad. On the principle of respondeat superior or command
responsibility alone, Jumuad may be held liable for negligence in the
performance of her managerial duties. She may not have been directly
involved in causing the cash shortages in KFC-Bohol, but her involvement
in not performing her duty monitoring and supporting the day to day
operations of the branches and ensure that all the facilities and
equipment at the restaurant were properly maintained and serviced,
could have prevented the whole debacle from occurring.

Termination; illegal
dismissal.
Alert Security and Investigation Agency, Inc., et al. vs. Saidali
Pasawilan, et al., G.R. No. 182397. September 14, 2011

In the case at bar, respondent security guards were relieved from their
posts because they led with the Labor Arbiter a complaint against their
employer for money claims due to underpayment of wages. The Supreme
Court found that this was not a valid cause for dismissal. The Labor Code
enumerates several just and authorized causes for a valid termination of
employment. An employee asserting his right and asking for minimum
wage is not among those causes.

Termination;
abandonment of
Alert Security and Investigation Agency, Inc., et al. vs. Saidali
Pasawilan, et al., G.R. No. 182397. September 14, 2011
work.
Petitioners aver that respondents were merely transferred to a new post
wherein the wages are adjusted to the current minimum wage standards.
They maintain that the respondents voluntarily abandoned their jobs
when they failed to report for duty in the new location. Assuming that this
contention was true, the Supreme Court held that there was no
abandonment of work. For there to be abandonment: rst, there should
be a failure of the employee to report for work without a valid or
justiable reason, and second, there should be a showing that the
employee intended to sever the employer-employee relationship. The fact
that petitioners led a complaint for illegal dismissal is indicative of their
intention to remain employed with private respondent. On the rst
element of failure to report for work, in this case, there was no showing
that respondents were notied of their new assignments. Granting that
the Duty Detail Orders were indeed issued, they served no purpose
unless the intended recipients of the orders are informed of such.
Therefore, the Court held that there was no abandonment of work in this
case.

Termination; gross
and habitual neglect.
Nissan Motors Phils., Inc. vs. Victorino Angelo, G.R. No. 164181.
September 14, 2011

Neglect of duty, to be a ground for dismissal, must be both gross and
habitual. In this case, Respondents repeated failure to turn over his task
of preparing the payroll of the petitioners employees to someone capable
of performing the vital tasks which he could not effectively perform or
undertake because of his heart ailment or condition constitutes gross
neglect. However, although the dismissal was legal, respondent was still
held to be entitled to a separation pay as a measure of compassionate
justice, considering his length of service and his poor physical condition
which was one of the reasons he led a leave of absence. As a general rule,
an employee who has been dismissed for any of the just causes
enumerated under Article 282 of the Labor Code is not entitled to
separation pay. By way of exception, however, the grant of separation pay
or some other nancial assistance may be allowed to an employee
dismissed for just causes on the basis of equity.

Termination; award
of backwages
BPI Employees Union-Metro Manila, et al. vs. Bank of the Philippine
Islands/Bank of the Philippine Islands vs. BPI Employees Union-Metro
Manila, et al., G.R. Nos. 178699/178735. September 21, 2011

The base gure in computing the award of back wages to an illegally
dismissed employee is the employees basic salary plus regular
allowances and benets received at the time of dismissal, unqualied by
any wage and benet increases granted in the interim. The full
backwages, as referred to in the body of the March 31, 2005 Supreme
Court decision pertains to backwages as dened in Republic Act No.
6715. Under said law, and as provided in jurisprudence, full backwages
means backwages without any deduction or qualication, including
benets or their monetary equivalent the employee is enjoying at the
time of his dismissal. Consequently, any benet or allowance over and
above that allowed and provided by said law is deemed excluded under
the said Supreme Court Decision.

OCTOBER
Dismissal;
constructive
dismissal.
Emirate Security and Maintenance Systems, Inc. and Roberto Yan vs.
Glenda M. Menese, G.R. No. 182848. October 5, 2011

For a transfer not to be considered a constructive dismissal, the employer
must be able to show that the transfer is for a valid reason, entails no
diminution in the terms and conditions of employment, and must not be
unreasonably inconvenient or prejudicial to the employee. If the
employer fails to meet these standards, the employees transfer shall
amount, at the very least, to constructive dismissal. In this case, the
Supreme Court found that the real reason Menese was transferred from
being the agencys payroll and billing clerk of the PGH detachment to
being a lady guard in the agencys main ofce, was because of the request
of Dapula, the new chief of the UP-PGH Security Division. The latters
request was based on the fact that she had committed the previous
position of Menese to a certain Amy Claro, a protge of Dapula. Thus, the
Supreme Court found justication for Meneses refusal to be transferred.
Not only was the transfer arbitrary and done in bad faith, it would also
result in a demotion in rank and a diminution in pay: (1) she would hold
the position of lady guard and (2) she would be paid in accordance with
the statutory minimum wage, or from P11,720.00 to P7,500.00. Clearly,
there was a demotion in rank and salary undertaken in bad faith
amounting to constructive dismissal.

Dismissal; illegal. Jhorizaldy Uy vs. Centro Ceramica Corporation, et al., G.R. No. 174631.
October 19, 2011

Resignation is dened as the voluntary act of employees who are
compelled by personal reasons to disassociate themselves from their
employment. It must be done with the intention of relinquishing an ofce,
accompanied by the act of abandonment. In this case, the evidence on
record suggested that petitioner did not resign; he was orally dismissed
by Sy. The crucial factor is the verbal order directly given by Sy, the
company president, for petitioner to immediately turn over his
accountabilities. It is this lack of clear, valid and legal cause, not to
mention due process that made his dismissal illegal, warranting
reinstatement and the award of backwages. Moreover, the ling of a
complaint for illegal dismissal just three weeks later is difcult to
reconcile with voluntary resignation. Had petitioner intended to
voluntarily relinquish his employment after being unceremoniously
dismissed by no less than the company president, he would not have
sought redress from the NLRC and vigorously pursued this case against
the respondents.

Employee; death
benets.
Maritime Factors Inc. vs. Bienvenido R. Hindang, G.R. No. 151993.
October 19, 2011

The death of a seaman during the term of employment makes the
employer liable to his heirs for death compensation benets. This rule,
however, is not absolute. The employer may be exempt from liability if he
can successfully prove that the seamans death was caused by an injury
directly attributable to his deliberate or willful act. The Supreme Court
agreed that Danilo died of Asphyxia by strangulation as proved by the NBI
post-mortem ndings and certication issued by the medico-legal ofcer,
Dr. Reyes. The photocopy of the fax transmission of the purported English
translation of Dr. Hameeds medical report to prove that Danilo
committed suicide should not be considered since the medical reports
genuineness and due execution were unveriable: (1) the existence of the
original medical report, which was written in the arabic language, was not
even attached to the records and has not been proved; (2) the identity of
the person who made the translation and whether the translator has the
recognized competence in both English and the language the medical
report was originally written were not established; (3) the alleged
translated medical report was not even signed by Dr. Hameed which
creates doubt as to its authenticity. The unsigned translated medical
report is nothing but a self-serving document which ought to be treated
as a mere scrap of paper devoid of any evidentiary value even in
administrative proceedings.

Employee benets;
entitlement to
retirement benets.
Enrique U. Betoy vs. The Board of Directors, National Power
Corporation, G.R. Nos. 156556-57. October 4, 2011

A separation pay at the time of the reorganization of the National Power
Corporation and retirement benets at the appropriate future time are
two separate and distinct entitlements. Stated otherwise, a retirement
plan is a different program from a separation package. In R.A. No. 1616,
the retirees are entitled to gratuity benets to be paid by the last
employer and refund of premiums to be paid by the GSIS. On the other
hand, retirement benets under C.A. No. 186, as amended by R.A. No.
8291, are to be paid by the GSIS. In view of the fact that separation pay
and retirement benets are different entitlements, as they have different
legal bases, different sources of funds, and different intents, the
exclusiveness of benets rule provided under R.A. No. 8291 is not
applicable. (Section 55 of R.A. No. 8291 states: Whenever other laws
provide similar benets for the same contingencies covered by this Act,
the member who qualies to the benets shall have the option to choose
which benets will be paid to him.)

Employee; overtime
pay.
Emirate Security and Maintenance Systems, Inc. and Roberto Yan vs.
Glenda M. Menese, G.R. No. 182848. October 5, 2011

A claim for overtime pay will not be granted in the absence of any factual
and legal basis. In this respect, the records indicated that the labor arbiter
granted Meneses claim for holiday pay, rest day and premium pay on the
basis of payrolls. There is no such proof in support of Meneses claim for
overtime pay other than her contention that she worked from 8:00 a.m.
up to 5:00 p.m. She presented no evidence to show that she was working
during the entire one hour meal break. The Supreme Court thus found the
NLRCs deletion of the overtime pay award in order.

Employee; permanent
disability benets.
Carmelito N. Valenzona vs. Fair Shipping Corporation, et al., G.R. No.
176884. October 19, 2011

Permanent disability refers to the inability of a worker to perform his job
for more than 120 days, regardless of whether he loses the use of any part
of his body. What determines petitioners entitlement to permanent
disability benets is his inability to work for more than 120 days. The
certication by the company-designated physician that petitioner is t to
work was issued after 199 days or more than 120 days from the time he
was medically repatriated to the Philippines. Petitioner herein was
medically repatriated to the Philippines on October 8, 2001. However,
it was only on April 25, 2002 or after a lapse of 199 days that Dr. Cruz
issued a certication declaring him t to work. Thus, the Supreme Court
found that petitioners disability is considered permanent and total
because the t to work certication was issued by Dr. Cruz only on April
25, 2002, or more than 120 days after he was medically repatriated on
October 8, 2001. Furthermore, the company-designated physicians
certication that petitioner is t to work does not make him ineligible for
permanent total disability benets. It does not matter that the company-
designated physician assessed petitioner as t to work. It is undisputed
that from the time petitioner was repatriated on October 8, 2001, he was
unable to work for more than 120 days as he was only certied t to work
on April 25, 2002. Consequently, petitioners disability is considered
permanent and total.

GSIS; retirement plan. Government Service Insurance System (GSIS), et al. vs. Commission on
Audit, et al., G.R. No. 162372. October 19, 2011

Section 41(n) of Republic Act No. 8291 contemplates a situation wherein
GSIS, due to a reorganization, a streamlining of its organization, or some
other circumstance, which calls for the termination of some of its
employees, must design a plan to encourage, induce, or motivate these
employees, who are not yet qualied for either optional or compulsory
retirement under our laws, to instead voluntarily retire. Such is not the
case with the GSIS RFP. Its very objective, to motivate and reward
employees for meritorious, faithful, and satisfactory service, contradicts
the nature of an early retirement incentive plan, or a nancial assistance
plan, which involves a substantial amount that is given to motivate
employees to retire early. Instead, it falls exactly within the purpose of a
retirement benet, which is a form of reward for an employees loyalty
and lengthy service, in order to help him or her enjoy the remaining years
of his life. Without a doubt, the GSIS RFP is a supplementary retirement
plan, which is prohibited by the Teves Retirement Law.

Strike; illegal strike. Magdala Multipurpose & Livelihood, et al. vs. KMLMS, et al., G.R. No.
191138-39. October 19, 2011

There is no question that the May 6, 2002 strike was illegal, rst, because
when Kilusang Manggagawa ng LGS, Magdala Multipurpose and
Livelihood Cooperative (KMLMS) led the notice of strike on March 5 or
14, 2002, it had not yet acquired legal personality and, thus, could not
legally represent the eventual union and its members. And second,
similarly, when KMLMS conducted the strike-vote on April 8, 2002, there
was still no union to speak of since KMLMS only acquired legal
personality as an independent legitimate labor organization only on April
9, 2002 or the day after it conducted the strike-vote. Consequently, the
mandatory notice of strike.

Union shop; new
employees.
Bank of the Philippine Islands vs. BPI Employees Union-Davao
Chapter-Federation of Unions in BPI Unibank, G.R. No. 164301.
October 19, 2011

May a corporation invoke its merger with another corporation as a valid
ground to exempt its absorbed employees from the coverage of a union
shop clause contained in its existing Collective Bargaining Agreement
(CBA) with its own certied labor union? The Supreme Court ruled in the
negative. The former FEBTC employees retained the regular status that
they possessed while working for their former employer upon their
absorption by petitioner BPI. This fact would not remove them from the
scope of the phrase new employees as contemplated in the Union Shop
Clause of the CBA. The Union Shop Clause in the CBA simply states that
new employees who during the effectivity of the CBA may be regularly
employed by the Bank must join the union within thirty (30) days from
their regularization. The plain language of the CBA provision
notwithstanding, the SC held that there is nothing in the said clause that
limits its application to only new employees who possess non-regular
status, meaning probationary status, at the start of their employment.
What is indubitable from the Union Shop Clause is that upon the
effectivity of the CBA, petitioners new regular employees (regardless of
the manner by which they became employees of BPI) are required to join
the Union as a condition of their continued employment.

NLRC; Certiorari. AGG Trucking and/or Alex Ang Gaeid vs. Melanio B. Yuag, G.R. No.
195033. October 12, 2011

A writ of certiorari is a remedy to correct errors of jurisdiction, for which
reason it must clearly show that the public respondent has no jurisdiction
to issue an order or to render a decision. Rule 65 of the Rules of Court has
instituted the petition for certiorari to correct acts of any tribunal, board
or ofcer exercising judicial or quasi-judicial functions with grave abuse
of discretion amounting to lack or excess of jurisdiction. This remedy
serves as a check on acts, either of excess or passivity, that constitute
grave abuse of discretion of a judicial or quasi-judicial function. In this
case, the SC found that the CA proceeded to review the records and to rule
on issues that were no longer disputed during the appeal to the NLRC,
such as the existence of an employer-employee relationship. The pivotal
issue before the NLRC was whether petitioners telling respondent to take
a rest, or to have a break, was already a positive act of dismissing him.
This issue was not discussed by the CA. The SC reviewed the NLRC
Resolution that reversed the LA Decision and found nothing in it that was
whimsical, unreasonable or patently violative of the law. It was the CA
which erred in nding faults that were inexistent in the NLRC Resolution.

NLRC; motion for
reconsideration.
AGG Trucking and/or Alex Ang Gaeid vs. Melanio B. Yuag, G.R. No.
195033. October 12, 2011

On the issue of the propriety of entertaining the Petition for Certiorari
despite the prescribed Motion for Reconsideration with the NLRC, the SC
found that the CA committed error when it entertained the petition for
certiorari and explained that when respondent failed to le a Motion for
Reconsideration of the NLRCs 30 November 2006 Resolution within the
reglementary period, the Resolution attained nality and could no longer
be modied by the Court of Appeals. Untimeliness in ling motions or
petitions is not a mere technical or procedural defect, as leniency
regarding this requirement will impinge on the right of the winning
litigant to peace of mind resulting from the laying to rest of the
controversy.

NOVEMBER
Award of attorneys
fees; concepts.
Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East
Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc.,
G.R. No. 174179. November 16, 2011

There are two commonly accepted concepts of attorneys fees the
ordinary and extraordinary. In its ordinary concept, an attorneys fee is
the reasonable compensation paid to a lawyer by his client for the legal
services the former renders; compensation is paid for the cost and/or
results of legal services per agreement or as may be assessed. In its
extraordinary concept, attorneys fees are deemed indemnity for damages
ordered by the court to be paid by the losing party to the winning party.
This is payable not to the lawyer but to the client, unless the client and his
lawyer have agreed that the award shall accrue to the lawyer as
additional or part of his compensation. Article 111 of the Labor Code, as
amended, contemplates the extraordinary concept of attorneys fees.
Although an express nding of facts and law is still necessary to prove the
merit of the award, there need not be any showing that the employer
acted maliciously or in bad faith when it withheld the wages. Thus the SC
concluded that the CA erred in ruling that a nding of the employers
malice or bad faith in withholding wages must precede an award of
attorneys fees under Article 111 of the Labor Code. To reiterate, a plain
showing that the lawful wages were not paid without justication is
sufcient.

Award of attorneys
fees; Article 111.
Kaisahan at Kapatiran ng mga Manggagawa at Kawani sa MWC-East
Zone Union and Eduardo Borela, etc. vs. Manila Water Company, Inc.,
G.R. No. 174179. November 16, 2011

One of the issues of this case involved the effect of the Memorandum of
Agreement provision that attorneys fees shall be deducted from the
amelioration allowance (AA) and CBA receivables. In this regard, the CA
held that the additional grant of 10% attorneys fees by the NLRC violates
Article 111 of the Labor Code, considering that the MOA between the
parties already ensured the payment of 10% attorneys fees deductible
from the AA and CBA receivables of the Unions members. In the present
case, the Union bound itself to pay 10% attorneys fees to its counsel
under the MOA and also gave up the attorneys fees awarded to the
Unions members in favor of their counsel. The award by the NLRC cannot
be taken to mean an additional grant of attorneys fees, in violation of the
ten percent (10%) limit under Article 111 of the Labor Code since it rests
on an entirely different legal obligation than the one contracted under the
MOA. Simply stated, the attorneys fees contracted under the MOA do not
refer to the amount of attorneys fees awarded by the NLRC; the MOA
provision on attorneys fees does not have any bearing at all to the
attorneys feesawarded by the NLRC under Article 111 of the Labor Code.
Based on these considerations, it is clear that the CA erred in ruling that
the LAs award of attorneys fees violated the maximum limit of ten
percent (10%) xed by Article 111 of the Labor Code.

Disability benets;
compensable.
Fil-star Maritime Corporation, et al. vs. Hanziel O. Resete, G.R. No.
192686. November 23, 2011

In this case, respondent was diagnosed with Central Retinal Vein
Occlusion of his left eye. Central retinal vein occlusion causes painless
vision loss which is usually sudden, but it can also occur gradually over a
period of days to weeks. This condition, despite numerous medical
procedures undertaken, eventually led to a total loss of sight of
respondents left eye. Loss of one bodily function falls within the
denition of disability which is essentially loss or impairment of a
physical or mental function resulting from injury or sickness. The
disputable presumption that a particular injury or illness that results in
disability, or in some cases death, is work-related stands in the absence of
contrary evidence. In the case at bench, the said presumption was not
overturned by the petitioners. Although, the employer is not the insurer
of the health of his employees, he takes them as he nds them and
assumes the risk of liability. Consequently, the Court concurred with the
nding of the lower courts that respondents disability is compensable.

Disability benets;
total disability.
Fil-star Maritime Corporation, et al. vs. Hanziel O. Resete, G.R. No.
192686. November 23, 2011

A total disability does not require that the employee be completely
disabled, or totally paralyzed. What is necessary is that the injury must be
such that the employee cannot pursue his or her usual work and earn
from it. On the other hand, a total disability is considered permanent if it
lasts continuously for more than 120 days. What is crucial is whether the
employee who suffers from disability could still perform his work
notwithstanding the disability he incurred. Evidently, respondent was
not able to return to his job as a seafarer after his left eye was declared
legally blind. Records showed that the petitioners did not give him a new
overseas assignment after his disability. This only proved that his
disability effectively barred his chances to be deployed abroad as an
ofcer of an ocean-going vessel. Hence, the Supreme Court found it tting
that respondent be entitled to permanent total disability benets
considering that he would not be able to resume his position as a
maritime ofcer, and the probability that he would be hired by other
maritime employers would be close to impossible.

Dismissal; gross and
habitual neglect of
duties.
Philippine National Bank vs. Dan Padao, G.R. Nos. 180849 and 187143.
November 16, 2011

Gross negligence connotes want of care in the performance of ones
duties, while habitual neglect implies repeated failure to perform ones
duties for a period of time, depending on the circumstances. In the case at
bench, Padao was accused of having presented a fraudulently positive
evaluation of the business, credit standing/rating and nancial capability
of Reynaldo and Luzvilla Baluma and eleven other loan applicants. Some
businesses were eventually found not to exist at all, while in other
transactions, the nancial status of the borrowers simply could not
support the grant of loans in the approved amounts. Moreover, Padao
over-appraised the collateral of spouses Gardito and Alma Ajero, and that
of spouses Ihaba and Rolly Pango. Padaos repeated failure to discharge
his duties as a credit investigator of the bank amounted to gross and
habitual neglect of duties under Article 282 (b) of the Labor Code. He not
only failed to perform what he was employed to do, but also did so
repetitively and habitually, causing millions of pesos in damage to
PNB. Thus, PNB acted within the bounds of the law by meting out the
penalty of dismissal, which it deemed appropriate given the
circumstances.

Dismissed employees;
separation pay.
November 16, 2011

Padao is not entitled to nancial assistance. The rule regarding separation
pay as a measure of social justice is that it shall be paid only in those
instances where the employee is validly dismissed for causes other than
serious misconduct, willful disobedience, gross and habitual neglect of
duty, fraud or willful breach of trust, commission of a crime against the
employer or his family, or those reecting on his moral character. In this
case, Padao was guilty of gross and habitual neglect of duties.

Employment of
seafarers.
Gilbert Quizora vs. Denholm Crew Management (Philippines), Inc., G.R.
No. 185412. November 16, 2011

The employment of seafarers, including claims for death benets, is
governed by the contracts they sign every time they are hired or rehired;
and as long as the stipulations therein are not contrary to law, morals,
public order or public policy, they have the force of law between the
parties. While the seafarer and his employer are governed by their
mutual agreement, the POEA rules and regulations require that the POEA
Standard Employment Contract (POEA-SEC) be integrated in every
seafarers contract. In this case, considering that petitioner executed an
overseas employment contract with respondent company in November
1999, the 1996 POEA-SEC should govern. The 2000 POEA-SEC initially
took effect on June 25, 2000. Thereafter, the Court issued the Temporary
Restraining Order (TRO) which was later lifted on June 5, 2002. Thus,
petitioner cannot simply rely on the disputable presumption provision
mentioned in Section 20 (B)(4) of the 2000 POEA-SEC which states that:
Those illnesses not listed in Section 32 of this Contract are disputably
presumed as work related.

Employment of
seafarers; disability
compensation.
Gilbert Quizora vs. Denholm Crew Management (Philippines), Inc., G.R.
No. 185412. November 16, 2011

Granting that the provisions of the 2000 POEA-SEC apply, the disputable
presumption provision in Section 20 (B) does not allow petitioner to just
sit down and wait for respondent company to present evidence to
overcome the disputable presumption of work- relatedness of the illness.
Contrary to his position, the seafarer still has to substantiate his claim in
order to be entitled to disability compensation. He has to prove that the
illness he suffered was work-related and that it must have existed during
the term of his employment contract. For disability to be compensable
under Section 20 (B) of the 2000 POEA-SEC, two elements must concur:
(1) the injury or illness must be work-related; and (2) the work-related
injury or illness must have existed during the term of the seafarers
employment contract. In other words, to be entitled to compensation and
benets under this provision, it is not sufcient to establish that the
seafarers illness or injury has rendered him permanently or partially
disabled; it must also be shown that there is a causal connection between
the seafarers illness or injury and the work for which he had been
contracted. Unfortunately for petitioner, he failed to prove that his
varicose veins arose out of his employment with respondent company.

Employees
compensation;
increased risk theory
Government Service Insurance System vs. Manuel P. Besitan, G.R. No.
178901. November 23, 2011

For a sickness or resulting disability or death to be compensable, the
claimant must prove either (1) that the employees sickness was the
result of an occupational disease listed under Annex A of the Amended
Rules on Employees Compensation, or (2) that the risk of contracting the
disease was increased by his working conditions. Under the increased
risk theory, there must be a reasonable proof that the employees working
condition increased his risk of contracting the disease, or that there is a
connection between his work and the cause of the disease. In this case,
since Besitans ailment, End Stage Renal Disease secondary to Chronic
Glomerulonephritis is not among those listed under Annex A, of the
Amended Rules on Employees Compensation, he needs to show by
substantial evidence that his risk of contracting the disease was increased
by his working condition.

Employeess
Compensation;
proceedings; quantum
of proof.
Government Service Insurance System vs. Manuel P. Besitan, G.R. No.
178901. November 23, 2011

Direct and clear evidence, is not necessary to prove a compensable claim.
Strict rules of evidence do not apply as PD No. 626 only requires
substantial evidence. The SC found that Besitan has sufciently proved
that his working condition increased his risk of contracting
Glomerulonephritis, which according to GSIS may be caused by bacterial,
viral, and parasitic infection. When Besitan entered the government
service in 1976, he was given a clean bill of health. In 2005, he was
diagnosed with End Stage Renal Disease secondary to Chronic
Glomerulonephritis. It would appear therefore that the nature of his work
could have increased his risk of contracting the disease. His frequent
travels to remote areas in the country could have exposed him to certain
bacterial, viral, and parasitic infection, which in turn could have caused
his disease. Delaying his urination during his long trips to the provinces
could have also increased his risk of contracting the disease. As a matter
of fact, even the Bank Physician of Bangko Sentral ng Pilipinas, Dr.
Gregorio Suarez II, agreed that Besitans working condition could have
contributed to the weakening of his kidneys, which could have caused the
disease. This Medical Certicate is sufcient to prove that the working
condition of Besitan increased his risk of contracting Glomerulonephritis.
In claims for compensation benets, a doctors certication as to the
nature of a claimants disability deserves full credence because no
medical practitioner would issue certications indiscriminately.

Illegal dismissal;
employer-employee
relationship.
Cesar C. Lirio, doing business under the name and style of Celkor Ad
Sonimix vs. Wilmer D. Genovia, G.R. No. 169757. November 23, 2011

The elements to determine the existence of an employment relationship
are: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power of dismissal; and (d) the employers power to
control the employees conduct. In this case, the documentary evidence
presented by respondent to prove that he was an employee of petitioner
are as follows: (a) a document denominated as payroll (dated July 31,
2001 to March 15, 2002) certied correct by petitioner, which showed
that respondent received a monthly salary of P7,000.00 with the
corresponding deductions due to absences incurred by respondent; and
(2) copies of petty cash vouchers, showing the amounts he received and
signed for in the payrolls. These documents showed that petitioner hired
respondent as an employee and he was paid monthly wages of P7,000.00.
Additionally, as to the existence of the power of control, it is not essential
for the employer to actually supervise the performance of duties of the
employee. It is sufcient that the former has a right to wield the power. In
this case, petitioner even stated in his Position Paper that it was agreed
that he would help and teach respondent how to use the studio
equipment. In such case, petitioner certainly had the power to check on
the progress and work of respondent.

elements.
Delia D. Romero vs. People of the Philippines, Romulo Padlan and
Aruturo Siapno, G.R. No. 171644. November 23, 2011

The crime of illegal recruitment is committed when two elements concur,
namely: (1) the offender has no valid license or authority required by law
to enable one to lawfully engage in recruitment and placement of
workers; and (2) he undertakes either any activity within the meaning of
recruitment and placement dened under Article 13 (b), or any
prohibited practices enumerated under Article 34 of the Labor Code.
First, the petitioner was found not to have been issued a license as proven
by the certication from the DOLE-Dagupan District Ofce stating that
petitioner has not been issued any license by the POEA and neither is it a
holder of an authority to engage in recruitment and placement activities.
Second, from the testimonies of the private respondents, it is apparent
that petitioner was able to convince the private respondents to apply for
work in Israel after parting with their money in exchange for the services
she would render. The said act of the petitioner, without a doubt, falls
within the meaning of recruitment and placement as dened in Article 13
(b) of the Labor Code. Finally, the Supreme Court noted that in illegal
recruitment cases, the failure to present receipts for money that was paid
in connection with the recruitment process will not affect the strength
of the evidence presented by the prosecution as long as the payment can
be proved through clear and convincing testimonies of credible witnesses.

Probationary
employment; security
of tenure.
Tamsons Enterprises, Inc., et al. vs. Court of Appeals and Rosemarie L.
Sy, G.R. No. 192881. November 16, 2011

It is settled that even if probationary employees do not enjoy permanent
status, they are accorded the constitutional protection of security of
tenure. This means they may only be terminated for a just cause or when
they otherwise fail to qualify as regular employees in accordance with
reasonable standards made known to them by the employer at the time of
their engagement. In this case, the justication given by the petitioners
for Sys dismissal was her alleged failure to qualify by the companys
standard. Other than the general allegation that said standards were
made known to her at the time of her employment, however, no evidence,

documentary or otherwise, was presented to substantiate the same.
Neither was there any performance evaluation presented to prove that
indeed hers was unsatisfactory. Hence, for failure of the petitioners to
support their claim of unsatisfactory performance by Sy, the SC held that
Sys employment was unjustly terminated to prevent her from acquiring a
regular status in circumvention of the law on security of tenure.

Probationary
employment;
termination.
Tamsons Enterprises, Inc., et al. vs. Court of Appeals and Rosemarie L.
Sy, G.R. No. 192881. November 16, 2011

Even on the assumption that Sy indeed failed to meet the standards set by
the petitioner-employer and made known to the former at the time of her
engagement, still, the termination was awed for failure to give the
required notice to Sy. Section 2, Rule I, Book VI of the Implementing Rules
provides that: If the termination is brought about by the completion of a
contract or phase thereof, or by failure of an employee to meet the
standards of the employer in the case of probationary employment, it
shall be sufcient that a written notice is served the employee, within a
reasonable time from the effective date of termination.

Termination of
employment; when
company tolerated
violation of company
policy
November 16, 2011

The CA was correct in stating that when the violation of company policy
or breach of company rules and regulations is tolerated by management,
it cannot serve as a basis for termination. This principle, however, only
applies when the breach or violation is one which neither amounts to nor
involves fraud or illegal activities. In such a case, one cannot evade
liability or culpability based on obedience to the corporate chain of
command. In this case, Padao, in afxing his signature on the fraudulent
reports, attested to the falsehoods contained therein. Moreover, by doing
so, he repeatedly failed to perform his duties as a credit investigator.
Thus, the termination of his employment is justied.

Labor Law 2011

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Labor Law 2011

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Philippine Supreme Court Decisions on Labor Law

1. Labor Law (2011)

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