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Labor Law Digests 1

2000 CASES
Q: X had been working for a year as a security guard with company A., a
sister company of company B. He was hired on January 1, 1988 as he was
among those absorbed by company B when it took over the security
contracts of its sister company A. He was forced by company B to sign a new
probationary contract for 6 mos; and on August 1, 1988, his employment was
terminated for allegedly sleeping on post and quarreling with a co-worker.
Was B a regular employee and thereby illegally dismissed?

A: Yes. Bs employment with company B was just a continuation of his

employment with company A. The Court cannot sanction the practice of
companies that effects the transfer of its employees to another entity whose
owners are the same, in order to deprive subject employees of the benefits
he is entitled to under the law. Nevertheless, B attained the status of a
regular employee with company B upon completion of his six-month period of
probation. He started working on January 30, 1988; and the end of the period
of probation was on July 27, 1988. When he was dismissed on August 1, he
was already a regular employee with a security of tenure. Private
respondents alleged violations were first infractions and do not amount to
valid grounds for terminating employment. (A Prime Security Services, Inc. v.
NLRC, G.R. 107320, January 19, 2000)

Q: KMDD-CFW is a union whose CBA with the company A expired. During

renegotiations, the management panel arrived late causing the union panel
to walk out. The management addressed a letter of apology to the union and
requested for negotiations to resume. The union panel did not show up
despite letters from management advising the former of the CBA meetings.
Consequently, the union struck. A complaint was filed by Golden Donuts to
declare the strike illegal. Counsel for the union strikers pleaded for a
compromise whereupon a 257 out of 262 members agreed to a compromise
settlement whereby they shall be paid separation pay in exchange for the
dismissal of the criminal and unfair labor practice cases filed by petitioners
against them. Could the union compromise or waive the rights to security of
tenure and money claims of its minority members, without the latters

A: No. Absent a showing of the unions special authority to compromise the

individual claims of private respondents for reinstatement and backwages,
there is no valid waiver of the aforesaid rights. The judgment of the Labor
Arbiter upholding the dismissal of private respondents based on the
compromise agreement does not have the effect of res judicata those who
did not agree thereto since the requirement of identity of parties is not
satisfied. A judgment upon a compromise agreement is conclusive only upon
parties thereto and their privies. Private respondents have not waived their
right to security of tenure nor can they be barred from entitlement of their
individual claims. Since there was no evidence that private respondents
committed any illegal act, petitioners failure to reinstate them after the
settlement of the strike amounts to illegal dismissal. (Golden Donuts, Inc. v.
NLRC, G.R. Nos. 113666-68, January 19, 2000)

Q: Union A, of which X was a part, filed with the DOLE a notice of strike
raising charges of ULP and illegal dismissal against Company A. The Labor
Arbiter ordered Company A to pay X separation pay of month pay for every
year of service. X filed a motion for execution of the decision of the Labor
Arbiter. The Rehabilitation Receiver of Company A submitted a Manifestation
with Motion, alleging that petitioner was not yet in a position to comply with
the directive of the Labor Arbiter as it was still under Rehabilitation
Receivership by virtue of the order of the SEC. However, the Labor Arbiter
still granted the motion for execution. Company A contends that the NLRC
should have denied the order of the LA for the immediate payment of
separation pay because of the order of the SEC suspending all claims against
petitioner pending before any court, tribunal or body. Can the order of the
SEC stay the execution of judgment against petitioner?

A: No. Although a stay of execution may be warranted by the fact that a

petitioner corporation has been placed under rehabilitation receivership, the
SEC already issued an order approving the rehabilitation plan of petitioner
and placing it under liquidation pursuant to PD 902-A. Since receivership
proceedings have ceased and petitioners rehabilitation receiver and
liquidator has been given the imprimatur to proceed with corporate
liquidation, the cited order of the SEC has been rendered functus oficio.
Petitioners monetary obligation to private respondent is long overdue and
thus cannot delay the satisfaction of private respondents claim. However,
due to events subsequent to the filing of this petition, private respondent
must present its claim with the rehabilitation receiver and liquidator in the
SEC, subject to the rules on preference of credits. (Alemars Sibal & Sons, Inc.
v. NLRC, G.R. No. 114761, January 19, 2000)

Q: X was employed as a quality control inspector with the duty of inspecting

LPB cylinders for any possible defects. He was dismissed when he was
allegedly caught by petitioners company President for sleeping on the job,
thereby violating Company Rule 15-b. He was asked to explain why no
disciplinary action should be taken against him, to which he promptly replied.
Notwithstanding his reply, he was terminated. Was X illegally dismissed?

A: Yes. Petitioners claim that private respondent slept on the job was not
substantiated by any evidence. In other cases, sleeping on the job was found
as a valid ground for dismissal because such cases involved security guards
whose duty necessitates that they be awake and watchful at all times, such is
not the degree of discipline required of a quality control inspector. While an
employer is allowed a wide discretion in the promulgation of company
policies, such should always be fair and reasonable. In this case, the
dismissal meted out on private respondent for sleeping on the job appears to
be too harsh a penalty. (VH Manufacturing, Inc. v. NLRC, G.R. No. 130957,
January 19, 2000)

Q: Company Y is engaged in road construction projects of the government. It

engaged the services of certain workers to work on various projects on
different dates. Several of its workers joined Union A as members. Union A
filed a motion for certification election with the regional office. Company Y
opposed stating that the workers were project employees and not qualified to
form part of the rank and file collective bargaining unit. Later, Company Y
terminated the employment of the workers due to the completion of its
projects or the expiration of workers contracts. The affected workers
claimed they were dismissed because of their union activities; and thus
staged a strike. The strike was declared illegal and the workers were deemed
to have lost their employment status. Were the workers validly dismissed?

A: Yes. The contracts of employment of petitioners attest to the fact that

they were hired for specific projects and their employment was coterminous
with the completion of the project for which they had been hired. Also, they
were informed in advance that said project or undertaking for which they
were hired would end on a stated or determinable date. Since the workers
were project employees, their employment legally ended upon completion of
their respective projects. (Association of Trade Unions v. Abella, G.R. No.
100518, January 24, 2000.

Q: Company K allowed the temporary transfer holding of office at Kalibo,

Aklan. Nevertheless, majority of the employees continued to work at its
office in Lezo Aklan and were paid their respective salaries. From June 1992 to
March 1993, X and Y reported to work at the Lezo office and were not paid
their salaries. From March up to the present, they were again allowed to
draw their salaries. It is the assertion of Company K that X and Y voluntarily
abandoned their work assignments and that they defied the lawful orders by
the General manager and thus the Board of Directors passed a resolution
resisting and denying X and Ys claims under the principle of no work, no
pay. X and Y interpose that the transfer to Kalibo was illegal. Are X and Y
entitled to claim their unpaid wages from June 1992 to March 1993?

A: No. Petitioner was able to show that private respondents did not render
services during the stated period. X and Y even admitted that they did not
report at the Kalibo office, as Lezo remained to be their office where they
continuously reported. It was not for X and Y to declare the managements
act of transferring the office to Kalibo as an illegal act as there was no
allegation of proof that such was made in bad faith or with malice. Private
respondents were dismissed by petitioner effective January 1992 and were
accepted back, subject to the condition of no work, no pay effective March
1993 which is why they were allowed to draw their salaries again. (Aklan
Electric Cooperative Incorporated v. NLRC, G.R. 121439, January 25, 2000)

Q: A was hired by Isetann Department Store as a security checker to

apprehend shoplifters. As a cost-cutting measure, private respondent
decided to phase out its security section and engage the services of an
independent security agency. A was then terminated prompting him to file a
complaint for illegal dismissal. NLRC ordered petitioner to be given
separation pay holding that the phase-out of the security section was a
legitimate business decision. However, A was denied the right to be given
written notice before termination of his employment. What is the effect of
violation of the notice requirement when termination is based on an
authorized cause?

A: The dismissal is ineffectual. In termination of employment under Art. 283,

the violation of notice requirement is not a denial of due process as the

purpose is not to afford the employee an opportunity to be heard on any

charge against him, for there is none. The purpose is to give him time to
prepare for the eventual loss of his job and the DOLE to determine whether
economic causes do exist justifying the termination of his employment. With
respect to Art. 283, the employers failure to comply with the notice
requirement does not constitute a denial of due process but a mere failure to
observe a procedure for the termination of employment which makes the
termination of employment merely ineffectual.
If the employees separation is without cause, instead of being given
separation pay, he should be reinstated. In either case, whether he is
reinstated or given separation pay, he should be paid full backwages if he has
been laid off without written notice at least 30 days in advance.
With respect to dismissals under 282, if he was dismissed for any of the just
causes in 282, he should not be reinstated. However, he must be paid
backwages from the time his employment was terminated until it is
determined that the termination is for a just cause because the failure to hear
him renders the termination of his employment without legal effect. (Serrano
v. NLRC, G.R. No. 117040, January 27, 2000)

Q: A was employed as housekeeper with Company B. He also owned a carfor-hire which he rented to B who operated the car as a taxi. One day, B
approached the front desk clerk at petitioners hotel requesting a collectible
of P2000 be added to a certain Korean guests, Mr. Hus bill. Mr. Hu later
complained that he was overbilled. A explained his side being the front desk
supervisor and owner of the car. Eventually, Company Bs staff confirmed the
error and refunded the amount to the Korean. Company B terminated the
services of A on the ground of loss of confidence for the latters malicious
intent to defraud a guest of the hotel. Was A illegally dismissed?

A: Yes. Company B failed to prove by ample evidence that A intended to

defraud Mr. Hu. The front desk clerk admitted being the one responsible for
entering the P2000 in Mr. Hus statement of account. Also, B admitted
approaching the front desk clerk to demand payment of the transportation
fee as he was hired by Mr. Hus group for two days believing in good faith that
Mr. Hu owed him P2000. As there is no valid and just cause, he is entitled to
reinstatement without loss of seniority rights plus full backwages and other
benefits withheld from him up to the time of his actual reinstatement. (Condo
Suite Club Travel, Inc. v. NLRC, G.R. No. 125671, January 28, 2000)

Q: Union A and Company B were faced with a bargaining deadlock. The union
then filed a notice of strike with the NCMB. Later, the union conducted a
strike vote among its members and the results were submitted to the Alliance
of Nationalist and Genuine labor Organization for submission to the NCMB,
but which was not made. The union went on strike without the report of the
strike vote submitted to the NCMB. Company B filed a petition to declare the
strike illegal alleging that the union barricaded gates of Company B and
committed acts of violence, threats and coercion. Trial on the merits was
conducted wherein Company B presented witnesses and evidence, Union A
did not present any witness but instead relied on their Memorandum
contending that respondents evidence are inadmissible. Was the strike

A: Yes. Failure to submit the strike vote to the NCMB immediately makes the
strikek illegal. The illegality of the strike is further affirmed by the acts of
violence, threats and coercion committed during the strike. The
requirements of procedural due process were complied with as both parties
were allowed to present their witnesses and evidence, although petitioner
opted instead to file a memorandum. (Samahan ng Manggagawa sa Moldex
Products, Inc. v. NLRC, G.R. No. 119467, February 1, 2000)

Q: V was hired by RFC as sales representative. He avers that he was

transferred by RFC to PMCI, an agency which provides RFC with additional
contractual workers. In PMCI, he was reassigned to RFC as sales
representative and then later informed by the personnel manager of RFC that
his services were terminated. RFC maintains that no employer-employee
relationship existed between V and itself. V filed complaint for illegal
dismissal. RFC alleges that PMCI is an independent contractor as the latter is
a highly capitalized venture. Was V a regular employee of RFC, thereby
illegally dismissed?

A: Yes. PMCI was a labor-only contractor. Although the Neri doctrine stated
that it was enough that a contractor had substantial capital to show it was an
independent contractor, the case of Fuji Xerox clarified the doctrine stating
that an independent business must undertake the performance of the
contract according to its own manner and method free from the control of the
principal. In this case, PMCI did not even have substantial capitalization as
only a small amount of its authorized capital stock was actually paid-in.

Furthermore, PMCI did not carry on an independent business or undertake the

performance of its contract according to its own manner and method nor was
it engaged to perform a specific and special job or service. In labor-only
contracting, the employees supplied by the contractor perform activities,
which are directly related to the main business of its principal. It is clear that
in this case, the work of petitioner as sales representative was directly related
to the business of RFC. Due to Vs length of service, he had attained the
status of regular employee and thus cannot be terminated without just or
valid cause. RFC failed to prove that his dismissal was for cause and that he
was afforded procedural due process. V is thus entitled to reinstatement plus
full backwages from his dismissal up to actual reinstatement. (Vinoya v.
NLRC, G.R. No. 126596, February 2, 2000)

Q: B is a lady Security Guard of Company O. She was last assigned at Vicente

Madrigal Condominium II located in Ayala Avenue, Makati. In a
memorandum, the Building Administrator of VM Condomunium II complained
of the laxity of the guards in enforcing security measures and requested to
reorganize the men and women assigned to the building to induce more
discipline and proper decorum. B was then transferred another building in
Taytay, Rizal. B filed a complaint alleging that her transfer amounted to an
unjust dismissal. Was the transfer of B illegal?

A: No. Service-oriented enterprises adhere to the business adage that, the

customer is always right. In the employment of personnel, the employer has
management prerogatives subject only to limitations imposed by law. The
transfer of an employee would only amount to constructive dismissal when
such is unreasonable, inconvenient, or prejudicial to the employee, and when
it involves a demotion in rank or diminution of salaries, benefits and other
privileges. In this case, the transfer was done in good faith and in the best
interest of the business enterprise. Evidence does not show that Company O
discriminated against B in effecting her transfer as such was done to comply
with a reasonable request. The mere inconvenience of a new job assignment
does not by itself make the transfer illegal. (OSS Security and Allied Services,
Inc. v. NLRC, G.R. No. 112752, February 9, 2000)

Q: Company W is conducts a printing business in Sta. Cruz Makati. The

Company informed its workers that it was going to transfer its site in Makati
to Batangas. It gave its employees time to inform the management of their
willingness to go with petitioner, otherwise, they would find replacements.
The Union advised the company that its members were not willing to transfer

to the new site. Are the employees entitled to separation pay by virtue of
their refusal to transfer to the business in Batangas.

A: Yes. Although there is no complete dissolution of petitioners undertaking,

but a mere relocation; the phrase, closure or cessation of operation of an
establishment not due to serious business losses or reverses, under Article
283 of the Labor Code includes the cessation of only part of a companys
business. Company W had alegitimate reason to relocate its plant due to the
expiration of the lease contract in Makati; however, it is still required to pay
its workers separation pay. Cessation of operation not due to serious
business losses is an authorized cause for termination; and the Labor Code
provides that such terminated employees are entitled to separation pay of 1
month pay or at least month for every year of service, whichever is higher.
(Cheniver Deco Print Technics Corporation v. NLRC, G.R. No. 122876, February
17, 2000)

Q: Meralco and its union MEWA renegotiated its 1992-1997 CBA insofar as the
last two-year period was concerned. The Secretary of Labor assumed
jurisdiction and granted the arbitral awards. There was no question that
these arbitral awards were to be given retroactive effect. However, the
parties dispute the reckoning period when retroaction shall commence.
Meralco claims that the award should retroact only from such time that the
Secretary of Labor rendered the award. The union argues that the awards
should retroact to such time granted by the Secretary who has plenary and
discretionary power to determine the effectivity of the arbitral award. The
union cited the case of St. Lukes and Mindanao Terminal where the Secretary
ordered the retroaction of the CBA to the date of expiration of the previous
CBA. When should the arbitral award retroact?

A: Labor laws are silent as to when an arbitral award in a labor dispute where
the Secretary has assumed jurisdiction by virtue of Art. 263 (g) shall retroact.
Despite the silence of the law, the Court ruled that the CBA arbitral awards
granted after six months from the expiration of the last CBA shall retroact to
such time agreed upon by both the employer and the employees or their
union. Absent such agreement as to retroactivity, the award shall retroact to
the first day after the six-month period following the expiration of the last day
of the CBA should there be one. In the absence of a CBA, the Secretarys
determination of the date of effectivity as part of his discretionary powers
over arbitral awards shall control. (Manila Electric Company v. Secretary of
Labor, G.R. No. 127598, February 22, 2000)

Q: A, B and C were drivers of Company Q driving the latters taxicabs every

other day on a 24 hour work schedule under the boundary system where
petitioners earn an average of P400 daily and private respondent regularly
deducts an amount for the washing of the taxi units. A, B and C decided to
form a labor union. Later, Company Q refused to let petitioners drive their
taxicabs. A, B and C filed with the labor arbiter a complaint for ULP, illegal
dismissal, and illegal deductions. The NLRC found for A, B and C stating that
dismissal must be for just cause and after due process. Company Q's first
motion for reconsideration was denied. It filed another MR, which was then
granted. Should the NLRC have granted the second MR?

A: No. Company Q exhausted administrative remedies available to it by

seeking an MR. The rationale for allowing only one MR from the same party is
to assist the parties in obtaining an expeditious and inexpensive settlement
of labor cases. The NLRC should have recognized that the relationship
between jeepney-owners and jeepney drivers under the boundary system is
that of ee-er and not that of lessor-lessee. The fact that the drivers do not
receive fixed wages is not sufficient to withdraw the relationship f3om that of
er and ee. Therefore the termination of A, B and Cs employment should
have be effectuated in accordance with law. With regard to the amount
deducted for washing, such was not illegal as such is indeed a practice in the
taxi industry and is dictated by fair play. (Jardin v. NLRC, G.R. No. 119268,
February 23, 2000)

Q: Union M is an affiliate of Federation U. A bitter disagreement ensued

between the Federation U and the Union M culminating in the latters
declaration of general autonomy from the former. The federation asked the
company to stop the remittance of Union Ms share in the education funds.
The federation called a meeting placing Union M under trusteeship and
appointing an administrator. Officers of Union M received letters from the
administrator requiring them to explain why they should not be removed from
their office and expelled from union membership. The officers were expelled
from the federation. The federation then advised the company of the
expulsion of the 30 union officers and demanded their separation pursuant to
the Union Security Clause in the CBA. The Federation filed a notice of strike
with the NCMB to compel the company to effect the immediate termination of
the expelled union officers. Under the pressure of a strike, the company
terminated the 30 union officers from employment. Union M filed a notice of
strike on the grounds of discrimination; interference; mass dismissal of union

officers and shop stewards; threats, coercion and intimidation; and union
busting. Members of Union M prayed for the suspension of the effects of their
termination. Secretary Drilon dismissed the petition stating it was a intrauion matter. Later, 78 union shop stewards were placed under preventive
suspension. The union members staged a walk-out and officially declared a
strike that afternoon. The strike was attended by violence. Was the dismissal
of the union officers illegal?

A: Yes. The charges against respondent company proceeded mainly from the
termination of the union officers upon the demand of the federation pursuant
to the union security clause. Although the union security clause may be
validly enforced, such must comply with due process. In this case, the union
officers were expelled for allegedly committing acts of disloyalty to the
federation. The company did not inquire into the cause of the expulsion and
merely relied upon the federations allegations. The issue is not a purely
intra-union matter as it was later on converted into a termination dispute
when the company dismissed the petitioners from work without the benefit of
a separate notice and hearing. As to the act of disaffiliation by the local
union; it is settled that a local union has the right to disaffiliate from its
mother union in the absence of specific provisions in the federations
constitution prohibiting such. There was no such provision in federation
ULGWPs constitution.

Q: In the above case, was the strike illegal?

A: No. As to the legality of the strike; it was based on the termination dispute
and petitioners believed in good faith that in dismissing them, the company
was guilty of ULP. The no-strike, no lockout provision in the CBA can only be
invoked when the strike is economic. As to the violence, both parties agreed
that the violence was not attributed to the striking employees alone as the
company itself hired men to pacify the strikers. Such violence cannot be a
ground for declaring the strike illegal. (Malayang Samahan ng mga
Manggagawa sa M. Greenfield (MSMG0UWP) v. Ramos, G.R. No. 113907,
February 28, 2000)

Q: The LA ordered petitioner to pay respondents the sum of P655, 866.41.

Petitioner appealed to the NLRC with a motion for the reduction of the
supersedeas to P100,000 and thereafter posted a cash bond of P100,000.

The NLRC dismissed the appeal for insufficiency of the bond. Petitioner said
the Star Angel doctrine should apply where the appeal may be perfected after
that period upon posting of a cash or surety bond. However, the NLRC
disagreed stating that in this case, the petitioner did not file a motion for
reduction of bond within the period but instead posted a bond in an amount
not equivalent to the monetary award. Was the motion for the reduction of
the bond filed in time?

A: Yes. That petitioner did file a motion within the period is supported by the
1. The motion for reduction was stamped with the received rubber stamp
marker of the NLRC and indicated the date of filing as 6.7.96.
2. Both the motion and the appeal memorandum were sent to respondents
in one envelope and sent by registered mail under Reg. Receipt 3576.
3. The same person notarized both the motion and the appeal on the same
4. On the last page of their comments, respondents stated that the motion
for reduction should be founded on meritorious grounds. This was found by
the SC to be an implied admittance of the receipt of the motion. Besides,
respondents could just as well have stated in their comments that no motion
was filed. (Coral Point Development Corporation v. NLRC, G.R. No.129761,
February 28, 2000)

Q: A was a jeepney driver of X on the boundary system. Due to a change in

schedule, they did not report for work as protest. They were then replaced.
A filed a complaint for illegal dismissal asking for separation pay and other
benefits. On November 26, 1991, the labor arbiter rendered judgment in
favor of A. X was served a copy of the decision on April 3, 1992. X filed a
memorandum on appeal on April 13, 1992; however the appeal bond was
only filed on April 30, 1992. Also, such bond was found to be spurious. It was
only on July 20, 1993 that a substitute bond was issued by another company.
Did the NLRC have jurisdiction to hear the appeal?

A: No. The perfection of an appeal within the reglementary period and in the
manner prescribed by law is jurisdictional, and noncompliance with such legal
requirement is fatal and has the effect of rendering the judgment final and
executory. Perfection of an appeal includes the filing, within the prescribed

period of the memorandum of appeal and posting of the appeal bond. In

cases where the judgment involves a monetary award, as in this case, the
appeal may be perfected only upon posting of a cash or surety bond to the
NLRC. Since the X received the LAs decision on April 3, they had only until
April 13 to file their appeal. The bond was posted only on April 30; beyond
the reglementary period. The requirement of posting the bond has only been
relaxed on grounds of substantial justice and special circumstances which are
not attendant in this case. Furthermore, the bond posted was not genuine.
The decision can no longer be amended nor altered by the labor tribunal.
(Navarro v. NLRC, G.R. No. 116464, March 1, 2000)

Q: A, is a member of the NFL, employed by X in the Patalon Coconut Estate in

Zamboanga City. Pursuant to RA 6657, the Comprehensive Agrarian Reform
Law, the Patalon Cocount Estate was warded to the Patalon Estate Reform
Association, of which A is a member and co-owner. As a result of this
acquisition, the Patalon Estate shut down operations and the employment of
A was severed. A did not receive separation pay. A became co-owner of the
land and subsequently filed a complaint for illegal dismissal. Should X, who
had been compelled to cease operations because of compulsory acquisition
by the government of his land for purposes of agrarian reform, be made liable
to pay separation pay to A?

A: No. The peculiar circumstance in the case at bar involves neither the
closure of an establishment nor a reduction in personnel as contemplated in
Article 283. The closure contemplated in 283 is a voluntary act on the part of
the employer. The Labor Code does not contemplate a situation where the
closure is forced upon the employer. As such, petitioners are not entitled to
separation pay as private respondents did not voluntary shut down
operations as they even sought to be exempted from the coverage of RA
6657. (National Federation of Labor v. NLRC, G.R. No. 127718, March 2, 2000)

Q: A and B were employed by Company E. A applied for a leave of absence

and informed the Operations Manager of his intention to avail of the optional
retirement plan under the Consecutive Enlistment Incentive Plan (CEIP). Such
was denied. B also applied for a leave of absence and informed the
Operations Manger of his intention to avail of the optional early retirement
plan in view of his 20 years of service which was likewise denied. A and B
both requested for extension of their leaves of absence. Later, they
discovered that they had been dropped from the roster of crew members.
Company E asserts that A and B are contractual employees whose

employment are terminated every time their contracts expire. Were A and B
validly dismissed?

A: No. The primary standard to determine a regular employment is the

reasonable connection between the activity performed by the employee in
relation to the usual business or trade of the employer. In this case it is
undisputed that petitioners were regular employees of private respondents.
Also, as they had been in the employ of private respondents for 20 years as
they were repeatedly re-hired after the expiration of their respective
contracts, it is clear that their service was necessary and indispensable to
private respondents business. Therefore, they could only be dismissed for
just and valid cause. There is no showing that they abandoned their job as
there was no showing of their unjustified refusal to resume employment.
(Millares v. NLRC, G.R. No. 110524, March 14, 2000)

Q: X is a members of Union S. The Executive Board of Union S decided to

retain the services of their counsel in connection with negotiations for a new
CBA. A general membership meeting was called where majority of union
members approved a resolution confirming the decision to engage the
services of the unions counsel, Atty. Lacsina. The resolution provided that
10% of the total economic benefits that may be secured be given to the
counsel at attorneys fees. Also it contained an authorization for Solidbank
Corporation to check-off said attorneys fees from the first lump sum of
payment of benefits under the new CBA. X issued a complaint for illegal
deduction. May the union validly deduct attorneys fees from Xs salary?

A: No. Article 241 has 3 requisites for the validity of the special assessment
for unions incidental expenses, attorneys fees and representation expenses.
They are:
1. authorization by a written resolution of majority of all the members at
the general membership meeting called for the purpose

secretarys record of the minutes of the meeting

3. individual written authorization for check-off duly signed by the

employees concerned.
Such requirements were not complied with, as there were no individual
written check off authorizations; thus, the employer cannot legally deduct
thus the assessment. The union should be made to shoulder the expenses

incurred for the services of a lawyer and accordingly, reimbursement should

be charged to the unions general fund or account. No deduction can be
made from the salaries of the concerned employees other than those
mandated by law. (Gabriel, et al v. Secretary of Labor, G.R. No. 115949,
March 16, 2000)

Q: A and B were employed by PAL as load controller and check-in clerk,

respectively. On January 19, 1993, a passenger by the name of Cominero
checked in for the flight. It appears that B reflected a lighter weight of
baggage on Comineros ticket to make it appear that the same was within the
allowable level. When the anomaly was later discovered, B went to the
cashier to pay the excess baggage fee. Cominero further paid the sum
representing the excess baggage fee. B implicated A in the anomaly. A and
B were charged with fraud against the company and were found guilty and
meted with the penalty of dismissal. The NLRC found that the alleged
defrauding of PALs excess baggage revenue was not the handiwork of A and
that PAL failed to show it suffered loss in revenues as a consequence of
private respondents questioned act. Was A validly dismissed?

A: Yes. The core of PALs evidence against A included the report of B. It was
erroneous for the NLRC to have discredited Bs testimony because he
appeared guilty as well. There is substantial evidence showing that private
respondent had direct involvement in the illegal pooling of baggage. As act
is inexcusable as it constitutes a serious offense under petitioners Code of
Discipline. The fact that PAL failed to show it suffered losses in revenue is
immaterial as private respondents mere attempt to deprive petitioner of its
lawful remedy is already tantamount to fraud. Therefore, A was validly
dismissed and as such was for a just cause, he is not entitled to backwages
nor separation pay. (PAL v. NLRC, G.R. No. 126805, March 16, 2000)

Q: The NFL was the sole and exclusive bargaining representative for the rank
and file employees of Company X. NFL started to negotiate for better terms
and conditions of employment; which were met with resistance by Company
X. The NFL filed a complaint for ULP on the ground of refusal to bargain
collectively. LA issued an order declaring the company guilty of ULP and
ordering the CBA proposals submitted by the NFL as the CBA between the
parties. Later, Y claimed that he was wrongfully excluded from the benefits
under the CBA filed a petition for relief. Company X asserts that Y is not
entitled to the benefits under the CBA because he was hired after the term of
a CBA and therefore, is not a party to the agreement and may not claim

benefits thereunder. As for the CBA, Company X maintains that the force and
effect of the CBAs terms are limited to only three years and cannot extend to
terms and conditions which ceased to have force and effect. Are the
assertions of Company X correct?

A: No. As to its first assertion, Y should be able to claim benefits under the
CBA. The benefits under the CBA should be extended to those who only
became such after it expired, to exclude them would constitute undue
discrimination. In fact, when a CBA is entered into by the union representing
the employees and the employer, even the non-union members are entitled
to the benefits of the contract. As to its assertion that the CBAs terms are
limited to only three years, it is clear from Art. 253 that until a new CBA has
been executed by and between the parties, they are duty bound to keep the
status quo and to continue in full force and effect the terms and conditions of
the existing agreement. In the case at bar, no new agreement was entered
between the parties pending appeal of the decision in the NLRC.
Consequently, the employees would be deprived of a substantial amount of
monetary benefits if the terms and conditions of the CBA were not to remain
in force and effect which runs counter to the intent of the Labor Code to curb
labor unrest and promote industrial peace. (New Pacific Timber Supply Co. v.
NLRC, G.R. No. 124224, March 17, 2000)

Q: A was employed as a data encoder by private respondent. From 1988 until

1991, she entered into 13 employment contracts with private respondent,
each contract for a period of 3 months. In September 1991, A and 12 other
employees allegedly agreed to the filing of a PCE of the rank and file
employees of private respondent. Subsequently, A received a termination
letter due to low volume of work. A filed a complaint for illegal dismissal.
Was A a regular employee entitled to tenurial security?

A: Yes. Even though petitioner is a project employee, as in the case of

Maraguinot, Jr. v. NLRC, the court held that a project employee or member of
a work pool may acquire the status of a regular employee when the following
1. there is continuous rehiring of project employees even after the
cessation of a project
2. the tasks performed by the alleged project employee are vital,
necessary and indispensable to the usual business and trade of the employer.

A was employed as a data encoder performing duties, which are usually

necessary or desirable in the usual business or trade of the employer,
continuously for a period of more than 3 years. Being a regular employee, A
is entitled to security of tenure and could only be dismissed for a just and
authorized cause; low volume of work is not a valid cause for dismissal under
Arts. 282 or 283. Having worked for more than 3 years, A is also entitled to
service incentive leave benefits from 1989 until her actual reinstatement
since such is demandable after one year of service, whether continuous or
broken. (Imbuido v. NLRC, G.R. No. 114734, March 31, 2000)

Q: A was employed as a security guard by Company X. During a routinary

meeting of the security guards, A stood up and shouted at the presiding
officer. She was then suspended for 15 days. Later, she received a letter
that she was reassigned and required to report to respondents Manila office.
Her services were terminated for abandonment when she failed to report for
work in her new assignment. The Labor Arbiter found for petitioner. Private
respondent appealed to the NLRC, which denied the appeal. The decision
having become final, the LA issued a writ of execution on the reinstatement
aspect, but it was not implemented as the monetary aspect remained to be
determined. Later, NLRC sheriff issued a notice of Garnishment served on
private respondents deposit account with the PNB. The LA directed the PNB
to release the amount. Meanwhile, Company X filed with the LA a motion to
quash the writ of execution on the ground that there has been a change in
the situation of the parties which would make the execution inequitable. It
contended that A accepted employment from another security agency
without previously resigning from respondents agency. Should the Labor
Arbiter still order the release of the judgment award?

A: Yes. Execution is the final stage of litigation, the end of the suit. It cannot
be frustrated except for serious reasons demanded by justice and equity. It is
the ministerial duty of the court to issue a writ of execution to enforce the
judgment. Company Xs contention that there has been a change in the
situation of the parties is without merit. It has been held that back wages
awarded to an illegally dismissed employee shall not be diminished or
reduced by the earnings by him elsewhere during the period of his illegal
dismissal. The decision is final and the total amount representing the salary
differentials and back wages awarded to the petitioner has been garnished
from the account of respondent agency with no opposition or resistance.
Therefore, it is the ministerial duty of the LA to release the money to A.
(Torres v. NLRC, G.R. No. 107014, April 12, 2000)

Q: On December 1986, De La Salle University and De La Salle University

Employees Association, which is composed of regular non-academic rank and
file employees entered into a CBA. During the freedom period of such CBA,
the Union initiated negotiations, which turned out to be unsuccessful. After
several conciliation meetings, 5 out of 11 issues were resolved by the parties.
A partial CBA was executed. The parties then entered into a Submission
Agreement identifying the remaining issues for arbitration. In resolving the
issues, the VA included the computer operators from the scope of the CBA
and excluded the employees of the College of St. Benilde. Did the VA act
properly in ruling as such?

A: Yes. Computer operators were presently doing clerical and routinary work
and had nothing to do with the setting of management policies for the
university. The access they have to information to the Universitys operations
are not necessarily confidential. The express exclusion of the computer
operators in the past does not pose a bar to re-negotiation for future inclusion
of the said employees in the bargaining unit. Also, as to the employees of
the CSB, they were properly excluded at the two education institutions have
their own separate juridical personality. (De la Salle University v. De La Salle
University Employees Association, G.R. No. 109002, April 12, 2000)

Q: A received a letter calling to his attention his conduct during a Sales and
Marketing Christmas gathering where she allegedly made utterances of
obscene, insulting and offensive words towards the SPCs Management
Committee. A was given two days to explain why no disciplinary action
should be taken against him and he was thereafter placed on preventive
suspension. A replied stating that such utterances were only made in
reference to a decision taken by the management committee on the Cua Lim
Case and not to any specific person. A was thereafter informed in a letter that
his employment was terminated. Was A validly dismissed?

A: No. As dismissal was brought about by utterances made during an

informal Christmas gathering. For misconduct to warrant dismissal, it must
be in connection with the employees work. In this case, the alleged
misconduct was neither in connection with employees work, as As
utterances are not unusual in informal gatherings, neither was it of such
serious and grave character. Furthermore, As outburst was in reaction to the
decision of the management in a certain case and was not intended to malign

on the person of the respondent companys president and general manager.

The company itself did not seem to consider the offense serious to warrant an
immediate investigation. It is also provided in the companys rules and
regulations that for conduct such as that of A, a first offense would only
warrant a verbal reminder and not dismissal. (Samson v. NLRC, G.R.
No.121035, April 12, 2000).

Q: X was employed by Company C as assistant mechanic. X drove Company

Cs truck to install a panel sign and accidentally sideswiped a ten year old girl
whose injuries incurred hospitalization expenses of up to P19,534.45. Such
amount was not reimbursed by insurance as X had no drivers license at the
time of the accident; therefore Company C shouldered the expenses.
Company C conducted an investigation where X was given the opportunity to
defend himself. X was then dismissed for violating the company rules and
regulation for blatant disregard of established control procedures resulting in
company damages. Was X validly dismissed?

A: Yes. Although X contends that he was investigated simply for the offense
of driving without a valid drivers license, it was clear that he was fully aware
that he was being investigated for his involvement in the vehicular accident.
It was also known to him that the accident caused the victim to suffer serious
injuries leading to expenses which the insurance refused to cover. Due
process does not necessarily require a hearing, as long as one is given
reasonable opportunity to be heard. Xs actions clearly constituted willful
disobedience. Although generally, an employee who is dismissed for just
cause is not entitled to any financial assistance, due to equity considerations
as this was Xs first offense in 18 years of service, he is to be granted
separation pay by way of financial assistance of months pay for every
year of service. (Aparente, Sr. v. NLRC, G.R. No. 117652, April 27, 2000)

Q: Y was a company nurse for the Company Z. A memorandum was issued

by the personnel manager of Company Z to Y asking her to explain why no
action should be taken against her for (1) throwing a stapler at plant manager
William Chua; (2) for losing the amount of P1,488 entrusted to her, (3) for
asking a co-employee to punch in her time card one morning when she was
not there. She was then placed on preventive suspension. Another
memorandum was sent to her asking her to explain why she failed to process
the ATM applications of her co-employees. She submitted a written
explanation as to the loss of the P1,488 and the punching in of her time card.
A third memorandum was sent to her informing her of her termination from

service for gross and habitual neglect of duties, serious misconduct, and
fraud or willful breach of trust. Y claims that her throwing of the stapler at
plant manager William Chua was because the latter had been making sexual
advances on her since her first year of employment and that when she would
not accede to his requests, he threatened that he would cause her
termination from service. As to the other charges, she claimed that they were
not done with malice or bad faith. Was Y illegally dismissed, and if so, is she
entitled to recover damages?

A: Yes. The grounds by which an employer may validly terminate the services
of an employee must be strictly construed. To constitute serious misconduct
to justify dismissal, the acts must be done in relation to the performance of
her duties as would show her to be unfit to continue working for her
employer. The acts complained of did not pertain to her duties as a nurse
neither did they constitute serious misconduct. On the question of damages,
although Y allowed four years to pass before coming out with her employers
sexual impositions; the time to do so admittedly varies depending upon the
needs, circumstances and emotional threshold of each person. It is clear that
Y has suffered anxiety, sleepless nights, besmirched reputation and social
humiliation by reason of the act complained of. Thus, she should be entitled
to moral and exemplary damages for the oppressive manner with which
petitioners effected her dismissal and to serve as a warning to officers who
take advantage of their ascendancy over their employees. (Philippine Aeolus
Automotive United Corporatoin v. NLRC, G.R. No. 124617, April 28, 2000)

Q: Isetann Dept Store dismissed B due to retrenchment. However instead of

giving the required 30 day notice, the company gave 30 days pay arguing
that this is effective notice. They made B sign quitclaims so that there would
be no more claims from them. The Labor Arbiter ruled that the B was illegally
dismissed because they were not afforded due process because they failed to
prove retrenchment due to losses. The NLRC reversed the ruling saying that
the dismissal was justified because it was due to redundancy and not
retrenchment. The NLRC however did not rule on whether the 30 day pay
was a sufficient substitute for the 30 day notice. The petitioner argues
further that they should be given the chance to present his side. Was the 30
days pay sufficient replacement for 30 day notice?

A: No. The Court ruled that since the dismissal is due to an authorized cause
only notice is required and that the employee has no right to present his side.
The 30 day notice is needed in order to afford the employee enough time to

look for work and to give the DOLE time to look into the validity of the
authorized cause. 30 days pay is not enough to replace the notice
requirement because it would not serve the purpose of the notice.
Additionally, backwages are not a severe punishment because it is a
consequence of the employers failure to give notice and due process and
the employee is therefore not deemed terminated so he should be
compensated for that period. (Serrano vs NLRC, GR No 117040, May 4, 2000)

Q: A and B filed a petition for certification election. Their petition was

granted but they lost in the election as majority of the employees voted for
no union. The next day, they failed to report for work. They claim that they
were barred from entering the premises. They filed a suit for illegal dismissal
and backwages. The company denied these allegations and alleged that A
and B refused to return to work despite their attention being called. Were A
and B legally dismissed?

A: No. The Court ruled that an immediate filing of a complaint for illegal
dismissal is incompatible with abandonment. Abandonment is a matter of
intention. There must be proof of deliberate and unjustified intent to sever
the employer-employee relationship. This burden rests on the employer. In
this case, the employer failed to do so. Since they were illegally dismissed,
the employees are entitled to reinstatement with full backwages,
undiminished by their earnings elsewhere. (Villar v. NLRC, GR No 130935,
May 11, 2000)

Q: A school employs both local-hire and foreign-hire teachers. The foreignhire teachers were given an added 25% in their salary and some benefits like
transportation and housing, shipping costs etc. These were given based on
two things: dislocation and limited tenure. The added compensation was the
schools way of remaining competitive on an international level in terms of
attracting competent teachers. The local-hire teachers, part of the union
contested the difference, a deadlock resulted so the teachers went on strike.
Is there discrimination in terms of wages?

A: Yes, there is discrimination. The principle equal pay for equal work
should apply in this case. Persons who work with substantially equal
qualifications, skill, effort and responsibility, under similar conditions, should
be paid similar salaries. If an employee is paid less it is upon the employer to

explain why the employee is treated differently. Dislocation and limited

tenure cannot serve as adequate or valid bases for the difference in the
salary rates. The other benefits are enough to make up for these two factors.
There is no reasonable distinction between the work of a local-hire and a
foreign-hire that will justify the difference. (International School Alliance of
Educators v. Quisumbing, GR No 128845, June 1, 2000)

Q: A company was found to have underpaid their employees and did not pay
the 13th month pay on a routine inspection conducted by DOLE. The regional
director ordered the company to pay the deficiency. Subsequently, the NLRC
affirmed the order. A waiver was signed by 108 of the workers where they
reduced by half the amount that was due. DOLE approved the waiver saying
that it was not contrary to law, good customs and public policy. Later,
petitioner filed a motion for reconsideration alleging undue influence,
coercion, intimidation, and no assistance of counsel. The motion was denied.
Eduardo Nietes, claiming that he represented the workers, filed a position
paper with the same argument. The NLRC dismissed the case for failure to
acquire jurisdiction. He again filed an appeal but the appeal was denied for
being filed out of time. The appeal was filed 9 days late along with the
appeal fee and research fee. Was the appeal was filed out of time?

A: Yes, the appeal was filed out of time. The perfection of an appeal within
the reglamentary period and in the manner prescribed by law is mandatory
and jurisdictional. Non-compliance renders the judgement appealed final and
executory. An appeal is perfected when there is proof of payment of the
appeal fee and in cases of the employer appealing and there is a monetary
award, payment of the appeal bond. A mere notice of appeal without
complying with the other requisites shall not stop the running of the period
for perfecting an appeal. Sometimes though, in the interest of justice, late
appeals have been allowed. An instance is a class suit. In this case there is
no evidence that there is a class suit. There is no evidence that the workers
chose Nietes to represent them. There is no showing that the workers are
joined by a common interest. As there is no basis to invalidate the waiver the
workers signed, the waiver is valid. (Workers of Antique Electric Cooperative
v. NLRC, GR No 120062, June 8, 2000)

Q: X was a radio operator on board a ship where he had a contract for 12

months. He was required to submit himself to a medical examination. Prior
to this, he had a pacemaker inserted to help his cardiovascular functioning
but he was still declared fit to work. On board the vessel, he had bouts of

coughing and he needed open heart surgery. He filed for sickness and
disability benefits with the POEA and these were awarded to him. Is the
sickness compensable?

A: Yes, it is compensable. Compensability of the illness or death of seamen

need not depend on whether the illness was work connected or not. It is
sufficient that the illness occurred during the term of the employment
contract. It will also be recalled that petitioners admitted that private
respondent's work as a radio officer exposed him to different climates and
unpredictable weather, which could trigger a heart attack or heart failure.
Even assuming that the ailment of the worker was contracted prior to his
employment, this still would not deprive him of compensation benefits. For
what matters is that his work had contributed, even in a small degree, to the
development of the disease and in bringing about his eventual death.
Neither is it necessary, in order to recover compensation, that the employee
must have been in perfect health at the time he contracted the disease.
(Seagull ShipManagement and Transport Inc. v. NLRC, GR No 123619, June 8,

Q: X is a merchandiser of respondent company. He withdraws stocks from

the warehouse, fixes the prices, price-tagging, displaying the products and
inventory. He was paid by the company through an agent. He asked for
regularization of his status. The company denied any employer-employee
relationship. They claim that they used an agent or independent contractors
to sell the merchandise. Was there labor-only contracting?

A: No. The agent is a legitimate independent contractor. Labor-only

contractor occurs only when the contractor merely recruits, supplies or places
workers to perform a job for a principal. The labor-only contractor does not
have substantial capital or investment and the workers recruited perform
activities directly related to the principal business of the employer. There is
permissible contracting only when the contractor carries an independent
business and undertakes the contract in his own manner and method, free
from the control of the principal and the contractor has substantial capital or
investment. The agent, and not the company, also exercises control over the
petitioners. No documents were submitted to prove that the company
exercised control over them. The agent hired the petitioners. The agent also
pays the petitioners, no evidence was submitted showing that it was the
company paying them and not the agent. It was also the agent who
terminated their services. By petitioning for regularization, the petitioners

concede that they are not regular employees. (Escario v. NLRC, GR No

124055, June 8, 2000)

Q: X was originally employed by R Corporation as a muffler specialist, and

was subsequently appointed supervisor . He was instructed to report at
private respondents main office where he was informed by the companys
personnel manager that he would be transferred to its Sucat plant due to his
failure to meet his sales quota, and for that reason, his supervisors
allowance would be withdrawn. For a short time, X reported for work at the
Sucat plant; however, he protested his transfer, subsequently filing a
complaint for illegal termination. X decries his transfer as being violative of
his security of tenure, the clear implication being that he was constructively
dismissed. Was X constructively dismissed?

A: No. We have held that an employer acts well within its rights in transferring
an employee as it sees fit provided that there is no demotion in rank or
diminution in pay. The two circumstances are deemed badges of bad faith,
and thus constitutive of constructive dismissal. In this regard, constructive
dismissal is defined as an involuntary resignation resorted to when
continued employment becomes impossible, unreasonable, or unlikely; 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. It should be borne in mind, however, that the right to demote
an employee also falls within the category of management prerogatives. An
employer is entitled to impose productivity standards for its workers, and in
fact, non-compliance may be visited with a penalty even more severe than
demotion. Failure to observe prescribed standards of work, or to fulfill
reasonable work assignments due to inefficiency may constitute just cause
for dismissal. (Leonardo v. NLRC, G.R. No. 125303, June 16, 2000)

Q: Y was employed as a mechanic. He was dismissed after the company

found out that he was doing sideline work. It would appear that late in the
evening of the day in question, the driver of a red Corolla arrived at the shop
looking for Y. The driver said that, as prearranged, he was to pick up Y who
would perform a private service on the vehicle. When reports of the "sideline"
work reached management, it confronted Y and asked for an explanation.
According to private respondent, Y gave contradictory excuses, eventually
claiming that the unauthorized service was for an aunt. When pressed to
present his aunt, it was then that Y stopped reporting for work, filing his
complaint for illegal dismissal some ten months after his alleged termination.

Y was even employed by another company thereafter. Was there

abandonment of work?

A: Yes. Y, after being pressed by the respondent company to present the

customer regarding his unauthorized solicitation of sideline work from the
latter and whom he claims to be his aunt, he never reported back to work
anymore. It must be stressed that while Y alleges that he was illegally
dismissed from his employment by the respondents, surprisingly, he never
stated any reason why the respondents would want to ease him out from his
job. Moreover, why did it take him ten (10) long months to file his case if
indeed he was aggrieved by respondents. All the above facts clearly point
that the filing of his case is a mere afterthought on the part of Y. (Leonardo v.
NLRC, G.R. No. 125303, June 16, 2000)

Q: X is an officer and member of the PGA Brotherhood Association, a duly

registered labor organization, and is a security guard employed by PSVSIA.
He was informed that his services were being terminated. He contended that
prior to such dismissal, they were harassed by PSVSIA officers to withdraw
their membership from the PGA Brotherhood Association. Although PSVSIA
denied the charge of illegal dismissal, the Labor Arbiter declared PSVSIA and
its responsible officers guilty of ULP and declared that petitioners were
constructively dismissed, thereby ordering respondent to reinstate X to his
former position with backwages up to the time of actual reinstatement.
However, X was paid monetary award for backwages pursuant to an earlier
decision of the NLRC limiting it to three years where he assented to the
computation made by the NLRC reducing the backwages to three years. No
M.R. was filed. In fact, X even filed a motion to release the remaining balance
to satisfy the judgment awards. X filed a motion for clarification of the
resolution reiterating their prayer for the inclusion of their backwages from
time they were terminated up to the present (until actual or payroll
reinstatement). How should the backwages be computed?

A: The NLRC decision has become final and executory. Neither a motion for
reconsideration nor appeal was ever taken by petitioners on this point. This
procedural lapse is fatal. Equally significant is the fact that petitioners
actively participated in the enforcement of the execution by garnishing the
supersedeas bond and the bank deposits of PSVSIA. The NLRC prepared a
computation showing the back wages due petitioners for three (3) years. X
not only assented to the computation made when they did not object thereto
but even filed a motion to release the remaining balance amounting to

P398,600.00 still in the hands of the NLRC to fully satisfy the judgment
awards. X cannot now claim that they have remained unpaid, especially
considering that they have already received the judgment award. (PGA
Brotherhood Association, et al., v. NLRC, G.R. No. 131084, June 19, 2000).

Q: X was working as driver of passenger jeepneys. He lost his drivers license

and asked for permission to go on vacation leave to secure a new one. X only
returned after three months when he was able to obtained his license. He
was however informed that another driver had already taken his place. The
company argues that the prolonged absence of X constituted abandonment.
X filed a case for illegal dismissal. Did Xs absence constitute abandonment?

A: No. To constitute abandonment, two elements must concur: (1) the failure
to report for work or absence without valid or justifiable reason, and (2) a
clear intention to sever the employer-employee relationship. Such is
disputed by the fact that private respondent immediately reported back for
work and lost no time in filing a case for illegal dismissal against petitioners.
(Icawat v. NLRC, GR 133572, June 20, 2000)

Q: X was employed as manager by a company for its Healthcare Division. In

April 1996, fictitious invoices were sent to clients made to inflate the gross
revenues of the Healthcare Division; and Nokom was placed on preventive
suspension as initial findings showed her to be involved in such anomaly. X
admitted the irregularities and made no explanation. She also failed to
appear during the hearing. After the investigation, Xs employment was
terminated. X was found to have been dismissed for fraud or willful breach
of the trust reposed on her by her employer or duly authorized
representative. Was X legally dismissed?

A: Yes. In the case at bar, petitioners position demanded a high degree of

responsibility, including the unearthing of fraudulent and irregular activities.
Petitioner failed to do such and her bare denials did not disprove her guilt.
The ordinary rule is that one who has knowledge peculiarly within his control,
and refuses to divulge it, cannot complain if the court puts the most
unfavorable construction upon his silence, and infers that a disclosure would
have shown the fact to be as claimed by the opposing party. Loss of
confidence is one of the just causes for a valid dismissal; and it is enough
that there be some basis for such loss of confidence. The guidelines for the

application of the doctrine of loss of confidence as enunciated in Midas Touch

Food Corporation, are:
a.....loss of confidence should not be simulated; should not be used as a subterfuge for causes which are improper,
illegal or unjustified; may not be arbitrarily asserted in the face of overwhelming evidence to
the contrary; and must be genuine, not a mere afterthought to justify earlier action taken
in bad faith.
An employer enjoys a wide latitude in the promulgation of company rules;
and in this case, the policies of respondent were fair and reasonable. (Nokom
v. NLRC, G.R. No.140043, July 18, 2000)

Q: X, President of the exclusive bargaining agent initiated renegotiations of its

CBA with the company for the last two years of the CBAs 5 year lifetime from
1989-1994. On the same year, the union elected a new set of officers with Z
as the newly elected President. Z wanted to continue renegotiation, but the
company claimed that the CBA was already prepared for signing. The CBA
was submitted to a referendum which was rejected by the union members.
Later, the union notified the NCMB of its intention to strike due to the
companys refusal to bargain. Thereafter, the parties agreed to disregard the
unsigned CBA and to start negotiation on a new five-year CBA. The union
submitted its proposals to petitioner, which notified the union that the same
was submitted to its Board of Trustees. Meanwhile, Zs work schedule was
changed, which she protested and requested to be submitted to a grievance
machinery under the old CBA. Due to the companys inaction, the union filed
a notice of strike. Later, Z was dismissed for alleged insubordination. Both
parties again discussed the ground rules for the CBA renegotiations; however
the company stopped negotiations after allegedly receiving information that
a new group of employees had filed a Petition for Certification Elections. The
union held a stike and the Secretary assumed jurisdiction ordering all striking
workers to return to work. All were readmitted except Z.
1. Is the company guilty of unfair labor practice by refusing to bargain with
the union when it unilaterally suspended the ongoing negotiations for a new
CBA upon mere information that a petition for certification has been filed by
another legitimate labor organization?
2. Does the termination of the union president amount to an interference of
the employees right to self-organization?

1. No. The duty to bargain collectively includes the mutual obligation to
meet and convene promptly and expeditiously in good faith for the purpose
of negotiating an agreement. Petitioner failed to make a timely reply to the
unions proposals, thereby violating the proper procedure in collective
bargaining as provided in Article 250. In order to allow the employer to
validly suspend the bargaining process, there must be a valid PCE raising a
legitimate representation issue. In this case, the petition was filed outside the
60-day freedom period; therefore there was no legitimate representation
issue and the filing of the PCE did not constitute a bar to the ongoing
2. Yes. The dismissal was in violation of the employees right to selforganization. The dismissal must be made pursuant to the tenets of equity
and fair play; wherein the employers right to terminate the services of an
employee must be exercised in good faith; furthermore, it must not amount
to interfering with, restraining or coercing employees in their right to selforganization. The factual backdrop of the Ambas termination reveals that
such was done in order to strip the union of a leader. Admittedly,
management has the prerogative to discipline its employees for
insubordination. But when the exercise of such management right tends to
interfere with the employees right to self-organization, it amounts to unionbusting and is therefore a prohibited act. (Colegio de San Juan de Letran v.
Association of Employees and Faculty of Letran, G.R. 141471, September 18,

Q: X was employed as sewer by a corporation engaged in the business of

sewing costumes, gowns and casual and formal dresses. Eventually, she
started to feel chest pains. She then filed a leave of absence from work as the
chest pains became unbearable. After subjecting herself to medical
examination, she was found to be suffering from Atherosclerotic heart
disease, Atrial Fibrillation, Cardiac Arrhythmia. Upon recommendation of her
doctor, she resigned from her work hoping that with a much-needed
complete rest, she will be cured. She later filed a disability claim with the
SSS from the Employees Compensation Fund, under Presidential Decree No.
626, as amended. Was the sickness compensable?

A: Yes, the illness is compensable. Under the Labor Code, as amended, the
law applicable to the case at bar, in order for the employee to be entitled to

sickness or death benefits, the sickness or death resulting therefrom must be

or must have resulted from either (a) any illness definitely accepted as an
occupational disease listed by the Commission, or (b) any illness caused by
employment, subject to proof that the risk of contracting the same is
increased by working conditions. In other words, for a sickness and the
resulting disability or death to be compensable, the said sickness must be an
occupational disease listed under Annex A the Amended Rules on
Employees Compensation; otherwise, the claimant or employee concerned
must prove that the risk of contracting the disease is increased by the
working condition.
Indisputably, cardiovascular diseases, which, as herein above-stated include
atherosclerotic heart disease, atrial fibrillation, cardiac arrhythmia, are listed
as compensable occupational diseases in the Rules of the Employees
Compensation Commission, hence, no further proof of casual relation
between the disease and claimants work is necessary. (Salmone v.
Employees Compensation Commission and Social Security System, G.R. No.
142392, September 26, 2000)

1999 CASES

Q. A flight surgeon at PAL, was on duty from 4 pm until 12 midnight. At

around 7 pm, he left the clinic to have his dinner at his residence, a 5-minute
drive away. While he was away, the clinic received an emergency call for a
PAL employee suffered from a heart attack. The nurse on duty phoned the
doctor at home to inform him of the emergency, then rushed the patient to
the hospital at 7:50 pm. The doctor arrived at 7:51 pm. The patient died the
following day. After investigation, the doctor was charged with abandonment
of post while on duty, and was later suspended for 3 months. Was this
suspension legal?

A. The suspension was illegal. Article 83 of the Labor Code (Normal hours of
Work) provides that Health personnel . . . shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time for meals,
(See Art. 85 - Meal Periods; Sec. 7, Rule I, Book III of the Omnibus Rules
(Meals and Rest periods) Thus, the 8-hour work period does not include the
meal break. Nowhere in the law may it be inferred that employees must take
their meals within the company premises, as long as they return to their

posts on time. Private respondents act of going home to take his dinner does
not constitute abandonment. (Philippine Airlines, Inc. v. NLRC, 302 SCRA 582

Q. A jet printer operator employed at Selecta was dismissed from

employment for dishonesty and theft of company property. Considering that
the employee merely took 15 hamburger patties, a pair of boots and an
aluminum container, was dismissal the appropriate remedy?

A. No. While the SC agrees that the employer should not be required to
continuously employ someone who has betrayed its trust and confidence,
dismissal would not be proportionate to the gravity of the offense. Further, he
is a non-confidential employee. Dismissal as a measure to protect the
interests of Respondent Company is unwarranted under the facts of this case.
Suspension would have sufficed. (Associated Labor Unions-TUCP v. NLRC, 302
SCRA 708 (1999))

Q. A deliveryman of Petitioner Company filed a complaint for illegal dismissal

and non-payment of basic wages and certain monetary benefits. He was
suspected of selling fruits of his employer at a higher price, and pocketing the
difference. The LA found in favor of the employee and ordered petitioner
Company to reinstate him with back wages, salary differentials, 13th month
pay and service incentive pay. The NLRC reversed the decision and ruled that
private respondent was not entitled to reinstatement with back wages except
for the award of salary differentials due to underpayment.

A. The SC agrees with the LA and held that private respondent was indeed
illegally dismissed. It was only upon his complaint regarding his low salary
that he was no longer allowed to report for work. This amounted to dismissal
without cause and without the requisite written notice. Such circumstances
make it difficult to sustain any allegation of abandonment. Abandonment, as
a just and valid cause for termination, requires a deliberate and unjustified
refusal of an employee to resume his work, coupled with a clear absence of
any intention of returning to his or her work.
With regard to the salary differentials granted, petitioners claim exemption
under RA 6727 (Wage Rationalization Act) and the Rules Implementing Wage
Order Nos. NCR-01 and NCR-01-A, as well as Wage Order Nos. NCR-02 and
NCR-02-A. However, regardless of the factual circumstances in this case, the

SC was not convinced as the petitioners could not even show any approved
application for exemption, as required by the applicable guidelines issued by
the Commission. (C. Planas Commercial v. NLRC, 303 SCRA 49 (1999))

Q. Is due process served even when the decision of the Labor arbiter is based
solely on position papers?

A. Petitioner likewise contends that it was not granted its right to due
process, as the decision of the LA was based purely on position papers. The
standard of due process that must be met in administrative tribunals allows a
certain degree of latitude as long as fairness is not ignored. [Adamson &
Adamson, Inc. v. Amores, 152 SCRA 237, 250 (1987)] Hence it is not legally
objectionable, for being violative of due process, for the LA to resolve a case
based solely on position papers, affidavits or documentary evidence
submitted by the parties. (CMP Federal Security Agency, Inc. v. NLRC, 303
SCRA 99 (1999))

Q. While petitioner was assigned to sort out rejects in a private respondents

bakery, he went to the comfort room to answer the call of nature, with the
permission of his checker. However, when the owner saw that petitioner was
not at his station, he demanded from him a written explanation for
abandoning his work. Having verbally explained that he had to answer the
call of nature, petitioner no longer submitted a written explanation, believing
that his verbal denial would suffice. However, he was suspended for 15 days.
On another occasion, petitioner had to answer the call of nature. This time,
he requested his fellow worker to replace him while he was away. The owner,
however, once again noticed that he was gone and demanded a written
explanation for his absence. Knowing better, petitioner complied with the
demand. Finding petitioners explanation unsatisfactory, the Company
served petitioner a notice of termination.

A. Petitioners act of relieving himself can hardly be characterized as

abandonment, much less a willful or intentional disobedience of company
rules since bowel movements are hardly controllable. Aside from the
discomfort it causes, restraining ones bowel movements adversely affects
the efficiency and health of the worker. Neither could it have disrupted the
operations of the company as to cause it irreparable damage. As such,
answering the call of nature is a valid reason to leave the work area.

(Dimabayao v. NLRC, 303 SCRA 655 (1999))

Q. A room attendant of the Sheraton, operated by petitioner, was dismissed

for having been caught by a hotel guest with his left hand inside the guests
suitcase. After being charged and terminated based on the company rules
regarding qualified theft, he filed a complaint for illegal dismissal. He reasons
that he was merely placing the belongings of the hotel guest into the latters
suitcase, as they were scattered on the floor. Was the dismissal illegal?

A. Yes. Petitioner reasons that the employee was caught in flagrante delicto,
and is therefore a cause for dismissal. However, absent any evidence that
would substantiate such imputation against the employee, suspicions and
baseless conclusions by employers are not legal justification for dismissing
employees. The burden of proof to show the validity of the dismissal lies on
the employer. Notably, it was shown that the hotel guest lost nothing.
(Maranaw Hotels and Resort Corporation v. NLRC, 303 SCRA 541 (1999))

Q. Petitioner was a checker in the warehouse of respondent Company who

met an accident while in the course of performing his job. His hand was
pinned down by a crane which resulted in its deformity and total disability of
his middle finger. He was given a month of sick leave which he extended for
another month. Later, he discovered that the Company had terminated his
services. He then filed a complaint for illegal dismissal. The LA found that
there was an illegal dismissal. In its appeal to the NLRC, the Company alleged
that the real reason why petitioner was dismissed was due to several
gambling incidents in the work area. This explanation was accepted by the
NRLC, which omitted reinstatement and backwages from the award of the LA.
Petitioner points out that the issue of gambling was raised only by the
respondents upon appeal. Not having been alleged in the Position Papers of
the respondents at the earliest instance, should the NLRC have considered
the Companys gambling allegations?

A. The Company was allowed to submit Annex 2 which contained the

gambling allegations with the LA, there was no showing whether the NLRC
gave the petitioner a clear chance to rebut the contention. Considering the
lateness of its submission, and the critical fact it alleged, this was the least
that should have been done by the NLRC. Therefore, petition granted. NLRC

committed grave abuse of discretion. LAs decision reinstated. (Villa v. NLRC,

303 SCRA 481 (1999))

Q. Supervisory employees of SMC were retired prior to reaching the

compulsory age of 60 pursuant to a CBA reducing optional retirement to
fifteen years. They claim that their signatures in conformity with their
retirement from the service were secured through threats, and that the
employees had no choice but no accept the benefits. Were the employees
validly retired? Did their acceptance of benefits amount to estoppel?

A. No the employees were not validly retired. The mere absence of actual
physical force to compel them to ink their application for retirement did not
make it voluntary. They were confronted with the danger of being jobless.
Their acceptance of benefits did not likewise amount to estoppel. If the
intention to retire is not clearly established or if the retirement is involuntary,
such is to be treated as a discharge. In any case, the CBA is not applicable to
them as it expressly excluded supervisory positions which petitioners occupy.
(San Miguel Corporation v. NLRC; July 23, 1999)

Q. San Miguel Corporation shut down some of its plants and declared 55
positions as redundant, in order to streamline operations due to financial
losses. Consequently, the union filed several grievance cases for the said
retrenched employees, and sought the redeployment of said employees to
other divisions of the company. Grievance proceedings were conducted
pursuant to the parties' Collective Bargaining Agreement. The procedure
outlined in the CBA required the settlement of grievances on 3 levels department manager, plant manager, and a conciliation board. During the
proceedings, many employees were redeployed, some accepted early
retirement. San Miguel informed the union that the remaining employees
would be terminated, if they could not be redeployed. Subsequently, the
union filed a notice of strike with the NCMB of the DOLE due to a bargaining
deadlock and gross violation of the CBA such as non-compliance with the
grievance procedure. On the other hand, San Miguel filed a complaint with
the NLRC to dismiss the notice of strike. Can the union hold a strike on the
grounds relied upon?

A. The grounds relied upon by the union are non-strikeable. A strike or lockout
may only be declared in cases of bargaining deadlocks and ULP. Violations of

the CBA, except flagrant/malicious refusal to comply with economic

provisions shall not be strikeable. (Sec. 1, Rule XXII, LC IRR) A collective
bargaining deadlock is the situation between the labor and management of
the company where there is failure in the collective bargaining negotiations
resulting in a stalemate. This situation is nonexistent in the present case
since there is a conciliation board assigned in Step 3 of the grievance
machinery to resole the conflicting views of the parties. For failing to exhaust
all the steps in the grievance machinery and arbitration proceedings provided
in the CBA, the notice of strike should have been dismissed by the NLRC and
the union ordered to proceed with the grievance and arbitration proceedings.
Moreover, in abandoning the grievance proceedings and refusing to avail of
the remedies under the CBA, the union violated the mandatory provisions of
the CBA. Parenthetically, it is worthy to note that abolition of departments or
positions in the company is one of the recognized management prerogatives.
(San Miguel Corporation v. NLRC, 304 SCRA 1 (2 March 1999))

Q. Due to alleged ULP, several employees walked out from their jobs. The
company purportedly sent them notices urging them to return to work,
otherwise their services would be terminated. The employees denied having
received these notices, and claimed that they were merely informed of their
dismissal and prevented from returning to work (removal of their machines
by the company). Was there a valid case of abandonment, as a ground for

A. Abandonment, as a just and valid ground for dismissal, means the

deliberate and unjustified refusal of an employee to resume his employment.
The burden of proof is on the employer to show an unequivocal intent on the
part of the employee to discontinue employment. Two elements must be
proved: the intention of an employee to abandon and an overt act from which
it may be inferred that the employee has no more intent to resume his work.
It is unlikely that the employees abandoned their jobs, considering the length
of their service (10-17 years). In fact, no overt act was proven by the
company from which the intention of the employees to desist from
employment may be shown. Moreover, the abandonment of work does not
per se sever the employer-employee relationship. IT is merely a form of
neglect of duty, which is in turn a just cause for termination of employment.
The operative act that will ultimately put an end to the relationship is the
dismissal of the employee, after complying with the procedure prescribed by
law. If the employer does not follow the procedure, there is illegal dismissal.
(De Paul/King Philip Customs Tailor v. NLRC, 304 SCRA 448, 10 March 1999)

Q: S was employed under an employment contract that will be effective for a

period of 1 year, unless sooner terminated. The first period was for six
months terminable at the option of the employer. The second period was also
for six months but probationary in character. After working for six months, S
was made to sign a 3-month probationary employment and later extended by
another 3-month period. After a total employment of one year, S was
dismissed on grounds of termination of contract employment. S filed a
complaint for illegal dismissal. Was S validly dismissed?

A: Yes. In both periods, the company did not specify the criteria for the
termination or retention of the services of S. If the contract was really for a
fixed term, the employer should not have been given the discretion to dismiss
S during the one year period of employment for reasons other than the just
and authorized causes under the Labor Code. In effect, the employer
theorized that the one-year period of employment was probationary. It was
not brought to light that S was informed at the start of his employment of the
reasonable standards under which he would qualify as a regular employee. In
the case of Brent, the Court upheld the principle that when the period was
imposed to preclude the acquisition of tenurial security, they should be
disregarded for being contrary to public opinion. It was clear that S was hired
as a regular employee and his work was necessary and directly related to the
business of the company. S is considered as a regular employee of the
company. At any rate, even assuming that the original employment was
probationary, the fact that he was allowed to work beyond the six-month
probationary period converts him to a regular employee under Article 281 of
the Labor Code. S was reinstated with backwages from the time of dismissal
to payroll reinstatement. (Servidad v. National Labor Relations Commission,
305 SCRA 49, 18 March 1999)

Q: D learned from B that the latter needed factory workers in Taiwan, but B
told D that as a part of his job application, he should give a certain amount. D
gave B the money but was unable to go to Taiwan. Several other persons paid
B the required placement fee but were also unable to work abroad. The
victims filed cases of illegal recruitment in large scale (3 or more persons)
and estafa. Was B guilty of illegal recruitment and estafa?

A: Yes. Illegal recruitment is committed when the (1) offender has no valid
license or authority; and (2) he undertakes any activity within the meaning of
recruitment and placement under the Labor Code. It is the lack of
necessary license or authority that renders the recruitment activity unlawful
or criminal. There is illegal recruitment when one purports to have the ability
to send a worker abroad through without license and authority to do so.
(People v. Borromeo, 305 SCRA 180, 25 March 1999)

Q: At the time AIUP filed a petition for certification election, there was an
existing CBA between the company and CCEA, the incumbent bargaining
agent for all the rank and file employees. This petition was opposed by CCEA
on the ground of the contract bar rule. AIUP filed a notice of strike citing
union busting and unfair labor practice as grounds. The union proceeded to
stage a strike, in the course of which, illegal acts were perpetrated. When
AIUP ignored the TRO enjoining the union members to refrain from blocking
the road, the company dismissed several employees on the ground of illegal
strike and illegal acts perpetrated in connection with the strike. AIUP is
questioning the legality of the dismissal of several AIUP member employees.
Was the strike illegal? Was the dismissal of the AIUP member employees

A: The Court was not persuaded by the allegation of union busting. The strike
staged by AIUP was a union-recognition-strike. The petition for certification
election (PCE) should not have been entertained because of the contract bar
rule. A PCE may only be entertained 60 days before the expiration of a CBA
(freedom period).
The strike staged by AIUP was illegal as they formed human
barricades to block roads and prevented co-workers from entering company
premises. Even if the strike is valid because its object or purpose is lawful,
the strike may still be declared as invalid where the means employed are
illegal. Union officers who knowingly participate in the commission of illegal
acts in a strike may be declared to have lost his employment status but an
ordinary striking employee cannot be terminated for mere participation in an
illegal strike. However, there must be proof that he committed illegal acts
during the strike. For the severest penalty to dismissal to attach, the erring
strikers must be duly identified. Simply referring to them as strikers is not
enough to justify their dismissal. The petitioning members of AIUP are
ordered reinstated with full backwages. (Association of Independent Unions in
the Philippines v. NLRC, 305 SCRA 219, 25 March 1999)

Q: The original owners of AAC were driven by mounting financial loses to sell
the majority rights of the company to PH. To thwart further losses, PH
implemented a re-organizational plan. Workers occupying redundant
positions that were abolished were terminated. PH duly paid their separation
pay and other benefits. Six of the union members who were terminated filed
a case for illegal termination alleging that the retrenchment program was a
subterfuge for union busting. They claimed that they were singled out for
their active participation in union activities. They also asserted that AAC was
not bankrupt, as it has engaged in an aggressive scheme of contractual
hiring. Were the union members validly dismissed?

A: Yes. The condition of business losses is normally shown by audited

financial documents. It is the Courts ruling that financial statements must be
prepared and signed by independent auditors. In the instant case, the
employees never contested the veracity of the audited financial documents
presented by AAC to the Labor Arbiter, neither did they object to the
documents admissibility. It is only necessary that the employees show that
its losses increased through a period of time and that the condition of the
company is not likely to improve in the near future. The allegation of union
busting is also bereft of proof. The records show that the position on 51 other
non-union members were abolished due to business loses.
The Court generally holds quitclaims to be contrary to public policy.
Yet as in the instant case, as there is no showing that the quitclaims were
executed in duress, they are binding on the parties. (Asian Alcohol
Corporation v. NLRC, 305 SCRA 416, 25 March 1999)

Q: PICOP grants certain allowances to its employees depending on the

circumstances and need for such. The allowances in question pertains to the
1. Staff/Managers Allowance: Free housing facilities to supervisory and
managerial employees assigned in Bislig. Due to shortage of housing
facilities, the company was constrained to grant allowances to those who live
or rent houses near the vicinity of the mill site.
2. Transportation Allowance: granted to Managers assigned to the mill site
who use their own vehicles in the performance of their duties.
3. Bislig Allowance: given in consideration of being assigned to the hostile
environment then prevailing in Bislig.
The Executive Labor Arbiter opined that the subject allowances formed part

of the employees wages. Citing jurisprudence, he concluded that the

allowances should be included in the computation of the employees base
pay in determining the separation pay. The NLRC did not share the view of
the Labor Arbiter. It found that the allowances were contingency-based and
thus not included I their salaries. Did the subject allowances form part of the
petitioners wage?

A: No. Wage, as defined by the Labor Code, may include any determination
by the Secretary of Labor in appropriate instances the fair and reasonable
value of board, lodging and other facilities customarily furnished by an
employer to his employees. The Court agrees with the OSG that the subject
allowances were temporary and not regularly received by the petitioners. The
allowance given to the employees in the instant case do not represent such
fair and reasonable value because the allowance were given by the company
in lieu of actual housing and transportation needs whereas the Bislig
allowance was given in consideration of being assigned to the hostile
environment then prevailing in Bislig; petitioners continuous enjoyment of
the disputed allowances was based on contingencies the occurrence of which
terminated such enjoyment. (Millares v. National Labor Relations Commission,
305 SCRA 500, 29 March 1999)

Q: A was employed by IBM for 16 years as an Engineer. He was informed,

through a letter, that his employment with the company was to be
terminated on the grounds of habitual tardiness and absenteeism. Alleging
that his dismissal was without just cause and due process, he filed a
compliant with the DOLE. He also claimed that he was not given the
opportunity to be heard and hat he was summarily dismissed from
employment based on charges which has not been duly proven. IBM denied
As claims. It was alleged that A was told of his poor attendance record and
inefficiency through the companys internal electronic mail system. Attached
to IBMs position paper were copies of printouts of alleged computer
entries/messages sent by the company to A through the internal email
system. Was A validly dismissed?

A: No. It appears, however, that As Daily Time Record (DTR) and pay slips
showed that he did not incur any unexcused absences, he was not late on
any day and, that no deduction was made from his salary on account of
tardiness or absences. The computer print outs, which constitutes the only
evidence of IBM, afford no assurance of their authenticity because they are
unsigned It is true that administrative agencies are not bound by the

technical rules of procedure and evidence in the adjudication of cases.

However, the liberality of procedure is subject to limitations imposed by basic
requirements of due process. The evidence presented before the NLRC must
at least have a modicum of admissibility for it to be given some probative
value. The print outs likewise failed to show that A was allowed due process
before his dismissal. The law requires an employer to furnish the employee
two written notices before termination of his employment may be ordered.
These requirements were not observed in this case. (IBM Philippines v.
National Labor Relations Commission, 305 SCRA 592, 13 April 1999)

Q: RP filed with the SEC a petition for the suspension of payments and a
rehabilitation plan. A management committee was created to oversee the
rehabilitation plan. Consequently, the SEC issued an order suspending all
actions and claims against RP. Employees of RP filed their respective
complaints for illegal dismissal, unfair labor practice, and payment of
separation pay.
The Labor Arbiter held that the order of the SEC
suspending all action for claims against RP does not cover the claims of
private respondents in the labor cases because said claims and the liability of
RP as the employer still has to be determined, thus carrying no dissipation of
the assets of petitioners. Are labor claims included in the suspension order of
the SEC?

A: Yes. The law is clear: all claims for actions shall be suspended accordingly.
No exception in favor of labor claims is mentioned in the law. Allowing labor
cases to proceed clearly defeats the purpose of the automatic stay and
severely encumbers the management committees time and resources.
The preferential right of workers and employees under Article 110 of
the Labor Code may be invoked only upon the institution of insolvency or
judicial liquidation proceedings. The purpose of rehabilitation proceedings is
precisely to enable the company to gain a new lease on life and thereby allow
creditors to be paid their claims from its earnings. In insolvency proceedings,
the company stops operations and the claims of creditors are satisfied from
the assets of the insolvent company. The present case involves rehabilitation,
not the liquidation, of RP Corporation. Hence the preference of credit granted
to workers is not applicable. The labor claims filed by the employees will
temporarily be suspended during the period of the rehabilitation plan.
(Rubberworld Philippines v. National Labor Relations Commission, 305 SCRA
721, 14 April 1999)

Q: S was employed by JVAC Corporation in 1969. He retired on 1992 when he

was 62 years old. Subsequently, S brought a complaint for retirement
benefits and service incentive leave pay before the NLRC against the
corporation. The Labor Arbiter granted retirement pay to S under RA 7641.
The corporation challenged this decision asserting that S retired almost a
year prior to the effectivity of the said law (7 January 1993), and thus the
retirement benefits under RA 7641 should not be applied retroactively. Was S
entitled to the retirement benefits under RA 7641?

A: No. The Court held in a previous case that RA 7641 granting retirement
benefits is undoubtedly a social legislation. There should be little doubt about
the fact that the law can apply to labor contracts still existing at the time the
statute has taken effect, and that its benefits can be reckoned not only from
the date of the laws enactment but retroactively to the time said
employment contract have started. The aforecited doctrine was elaborated
upon by enumerating the circumstances which must concur before the law
could be given retroactive effect: (1) the claimant must still be an employee
of the employer at the time the statute took effect; and (2) the claimant has
complied with the requirements for eligibility under the statute. In the case
under scrutiny, S retired and ceased to be an employee of JVAC Corporation
eleven months before the effectivity of RA 7641. It is thus decisively clear
that the provisions of RA 7641 could not be given retroactive effect in his
favor. (J.V. Angeles Construction Corporation v. NLRC, 305 SCRA 734, 14 April

Q: The corporation and ALU inked a CBA effective until 1995. 14 days before
the expiration of the said CBA, NAFLU filed a petition for certification election,
which was granted by the Med-Arbiter. ALU interposed a Motion to Dismiss for
failure of NAFLU to acquire for and in behalf of its local charter affiliates
(COPPER), a legal personality as a legitimate labor organization. ALU and
NAFLU signed an agreement to hold a certification election and NAFLU
promised to furnish ALU a copy of its Certificate of Registration and other
pertinent documents. On the same day COPPER was issued by the DOLE a
Certificate of Registration. Was the PCE duly filed?

A: Yes. In a previous case, the Court held that a party is estopped to

challenge the personality of a corporation after having acknowledged the
same by entering into a contract with it. In the present case, ALU
acknowledged the legal existence of NAFLUs affiliate by entering into an
agreement with NAFLU. ALU aver that their agreement with NAFLU on the

holding of a certification election with a suspensive condition was not

complied with. Considering, however, that NAFLU was able to submit the
documents required by the agreement, such compliance retroacted to the
date the agreement was signed.
The order of the Med-Arbiter granting the petition for the certification
election has become final in view of ALUs failure to appeal there from. Under
the Labor Code, a party has the right to appeal an order allowing or granting
a petition for certification election. But the right of appeal may only be
exercised within 10 calendar days from the receipt of the order. (Associated
Labor Unions v. Quisumbing, 305 SCRA 762, 14 April 1999)

Q: A was a police officer assigned to PNP Vigan. While he was driving his
tricycle and ferrying passengers, he was confronted by another police officer
about his tour of duty. A verbal tussle then ensued between the two, which
led to the fatal shooting A. On account of As death, his wife filed a claim for
death benefits with the GSIS. In its decision, GSIS denied the claim on the
ground that at the time of his death, A was performing a personal activity
that was not work-connected. Subsequent appeal to the Employees
Compensation Commission (ECC) proved to be futile as it merely affirmed the
decision of GSIS. The Court of Appeals, however, ruled otherwise. It decided
that as applied to a peace officer, As work place is not confined to the police
precinct or any station, but to any place where his services, as a lawman, to
maintain peace and security, are required. At the time of his death, A was
driving his tricycle at the town complex where the police assistance center is
located. There can be no dispute therefore that he met his death literally in
his place of work. Policemen, by the nature of their functions, are deemed to
be on a round-the-clock duty. Must the activity being performed at the time
of death be work-connected for it to be compenesable?

A: Yes. While it agrees that policemen are at the beck and call of public duty
as peace officers and technically on duty round-the-clock, the same does not
justify the grant of compensation benefits for the death of A. Obviously, the
matter A was attending at the time of his death, that of ferrying passenger
for a fee, was intrinsically private and unofficial in nature proceeding as it did
from no particular directive or permission of his superiors officers. The 24hour duty doctrine, as applied to policemen and soldiers, serves more as an
after-the-fact validation of their acts to place them within the scope of the
guidelines rather than a blanket license to benefit them in all situations that
may give rise to their deaths. In other words, the 24-hour doctrine should not
be sweepingly applied to all acts and circumstances causing the death of a

police officer but only tot hose which, although not on official line of duty, are
nonetheless basically police service in character. Therefore, death benefits
under the ECC should not be granted. (Government Service Insurance System
v. Court of Appeals, 306 SCRA 41, 20 April 1999)

Q: LG, JB and PB were accused of illegal recruitment by a syndicate in large

scale. It was alleged that the above named accused, without license or
authority, recruited several people for job placement abroad, receiving a
placement fee from the recruits in exchange. The recruits flew to the
supposed country of employment yet had to return to the Philippines as the
promised job did not exist. The victims confronted the accused, and the
accused promised to refund their money. Were the accused guilty of illegal
recruitment in a syndicate?

A: Yes. The Court held that the appeal lacks merit. Recruitment for overseas
employment is not in itself necessarily immoral or unlawful. It is the lack of
the necessary license or permit, or the engagement of prohibited activities
enumerated in the Labor Code that renders such recruitment activities
unlawful or criminal. The accused asserted that the offense should not have
been qualified into illegal recruitment by a syndicate since there was no proof
that they acted in conspiracy with one another. However, the acts of the
accused showed unity in purpose. One would visit the house of the recruits
several times, convincing them to work abroad. Another would accompany
the recruit to the house of the person collecting the processing fee. All these
acts established a common criminal design mutually deliberated upon and
accomplished through coordinated acts. Against the evidence of the
prosecution, the accused merely posited the defense of denial. Denials, if
unsubstantiated by clear and convincing evidence, are deemed negative and
self-serving evidence unworthy of credence. (People v. Guevarra, 306 SCRA
111, 21 April 1999)

Q: Philippine Rabbit Inc. (PRI) employed PE as a bus conductor. On 1975,

petitioner terminated the services of PE, prompting him to sue PRI for illegal
dismissal. The Labor Arbiter declared the dismissal to be illegal and ordered
reinstatement with full backwages. PRI appealed to the NLRC but the appeal
was dismissed, as the same was not filed within the reglementary period. PRI
appealed to the Office of the President, which directed PRI to reinstate PE but
only pay backwages for six months. PE was paid the backwages but he was
not reinstated. Thus, he moved for a second writ of execution on 1985 and
the payment of backwages from 1979 (the date he presented himself for

reinstatement) until he could actually be reinstated. The NLRC granted the

Writ of Execution. Did the NLRC committed a grave abuse of discretion in
modifying the amending the final and executory order of the Office of the
President, and in enforcing by mere motion the final judgment of the Office of
the President despite the lapse of seven years?

A: No. PRI cannot legally invoke in this case the strict application of the rule
limiting execution of judgment by mere motion within a period of 5 years
only. There have been cases where the Court allowed execution by mere
motion even after the lapse of 5 years. Their common denominator in those
instances was the delay caused or occasion by the actions of the judgment
debtor and/or those incurred for his benefit. In the instant case, PRI unduly
delayed the full implementation of the final decision of the Office of the
President by fling numerous dilatory appeals and persistently refusing to
reinstate private respondent PE. Technicalities have no room in labor cases
where the Rules of Court are applied only in a suppletory manner and only to
effectuate the objectives of the Labor Code, and not to defeat them.
PRI can no longer assail the propriety of the final decision of the Office
of the President issued way back in May 1978. The finality of a decision is a
jurisdictional event that cannot be made to depend on the convenience of a
party. Once a decision attains finality, it becomes the law of the case whether
or not the decision is erroneous. (Philippine Rabbit Bus Lines, Inc. v. NLRC and
Evangelista, 306 SCRA 151, 21 April 1999)

Q: According to the prosecution, the accused, RC, invited and convinced

several people to work with her as a factory worker abroad. RC promised to
process the necessary papers for a placement fee of P8, 000.00. When the
agreed date of departure came, RC failed to show up. The recruits went to the
POEA who issued a certification that RC had no license to recruit overseas
workers. The recruits then went to the police and filed a compliant for illegal
recruitment in large-scale. RC vehemently denied recruiting the complainants
and declared that she merely tried to help them work abroad at the
insistence of the complainants. Is RC guilty of illegal recruitment?

A: Yes. Large-scale illegal recruitment has the following elements: (1) The
accused undertook recruitment activities or any prohibited practice under the
Labor Code. (2) He did not have the license or authority to lawfully engage in
the recruitment and placement of workers. (3) He committed the same to two
or more persons. The prosecution evidence proved beyond reasonable doubt

that the foregoing elements were present in this case. There is no question
that RC did not have a license to engage in he recruitment of workers, as she
herself admitted, and that the crime was committed against more than three
persons. The evidence on record belies her argument that she did not engage
in the recruitment and placement of workers. The testimonies of the recruits
unequivocally prove that RC promised the three jobs abroad provided they
would pay the placement fee. The fact that each of them paid the down
payment is evidence by the receipts issued and signed by RC. (People of the
Philippines v. Castillon, 306 SCRA 271, 21 April 1999)

Q: AA is the owner of a farm who employed the petitioners C and I.

Petitioners contended that they were verbally told by AA to stop working and
terminated their employment without informing them of the reason for their
intended dismissal. Hence, they charged AA for illegal dismissal with money
claims. AA asserts that C and I were dismissed for valid causes, as they were
guilty of insubordination, both disobeying the prescribed manner and
procedure of doing their job. The Labor Arbiter ruled that there was no just
cause for termination. On appeal, the NLRC reversed the decision of the Labor
Arbiter for gross insufficiency of evidence to sustain the decision, remanding
the case to the Labor Arbiter for the reception of further evidence. Was the
remand of the case to the Labor Arbiter proper?

A: No. The remand of the case to the Labor Arbiter for the reception of
evidence has no legal or actual basis. Subject to the requirements of due
process, proceedings before the Labor Arbiter are generally non-litigious,
because technical rules and procedures of ordinary courts of law do not
strictly apply. Thus, a formal or trial-type hearing is not always essential. In
the absence of any palpable error, arbitrariness or partiality, the method
adopted by the Labor Arbiter to decide a case must be respected by the
AA was not deprived of due process of law, the essence of which is simply the
opportunity to be heard. It must be stressed that all the parties to the case
were given equal opportunities to air their respective positions before the
Labor Arbiter. That AA failed to fully air his position by his own inaction or
negligence does not constitute deprivation of due process. (Caete and
Isabida v. National Labor Relations Commission, 306 SCRA 324, 21 April 1999)

Q: AL was a seaman on board the vessel M/V Cast Muskoz. His lifeless body
was found hanging by the neck from the ceiling of an old abandoned

warehouse in Quebec, Canada. According to the coroner, the probable cause

of death was asphyxiation by hanging. When ALs body was flown to Manila,
his father noted that the body bore several bruises. They submitted the
cadaver to the NBI for an autopsy. Considering that the findings of the NBI
were all inconsistent with suicide, the father filed a claim with the POEA. The
POEA dismissed the compliant of the father based on the solid evidence of
the employer-shipping company. On appeal, the NLRC affirmed the ruling of
the POEA. Apparently, both labor bodies anchored their conclusion on the fact
that had there been foul play involved in ALs death, the $2, 000.00 in his
pocket would have been taken. Was the father of AL entitled to his sons
death benefits?

A: Yes. The employer failed to ascertain the circumstances surrounding ALs

death, which was its duty to undertake as ALs employer. Such willful neglect
cannot but indicate that a through investigation would have yielded a result
adverse to the employer. The records are bereft of any substantial evidence
showing that respondent employer successfully discharged its burden of
proving that AL committed suicide, so as to evade its liability for death
benefits under POEAs Standard Employment Contract for Filipino Seaman.
The records of this case are remanded to the POEA for the computation of the
death benefits to be awarded to the father of AL. (Lapid v. National Labor
Relations Commission, 306 SCRA 349, 29 April 1999)

Q: R was employed by the hotel as a doorman. Professional shoppers hired by

the hotel evaluating hotel employees recommended the transfer of Rodriguez
to a non-customer-contact position because of the negative feedback on his
manner of providing services to the hotel guests. A memorandum was later
issued transferring him to the linen room as an attendant. He resisted the
transfer and did not assume his new post at the linen room. The hotel
terminated his employment on the ground of insubordination. The Labor
Arbiter declared the dismissal to be legal. On appeal, the NLRC reversed the
decision of the Labor Arbiter declaring that the intended transfer was in the
nature of a disciplinary action. The hotel management contends that the
employees continuous refusal to report to his new work assignment
constituted gross insubordination. Was the transfer of the employee a valid
exercise of its management prerogative?

A: Yes. Disobedience to be a just cause for dismissal envisages the

concurrence of at least two requisites (a) the employees wrongful conduct
must have been willful or intentional; (b) the order violated must have been

reasonable, lawful, made known to the employee and must pertain to the
duties which he has been engaged to discharge. It is the employers
prerogative, based on its assessment and perception of the employees
qualification, aptitude and competence, to move him around in the various
areas of its business operations in order to ascertain where the employee will
function with utmost efficiency and maximum productivity or benefit to the
Deliberate disregard of company rules or defiance of management
prerogative cannot be countenanced. Until and unless the rules or orders are
declared to be illegal or improper by competent authority, the employees
ignore or disobey them at their peril. In the case at bat, the employee was
repeatedly reminded not only by management but also by his union to report
to work station but to no avail. (Westin Philippine Plaza Hotel v. National
Labor Relations Commission, 306 SCRA 631, 3 May 1999)

Q: Accused Enriquez promised employment in Taiwan to at least 42 people.

They were each asked to pay processing fees ranging from P3, 370 to P5, 000
for which no receipts were issued and to submit documents to facilitate their
travel and subsequent deployment abroad. The POEA issued a certification
showing the Enriquez is not licensed to engage in the recruitment of workers
for overseas employment. In her defense, Enriquez claimed that it was her
common-law husband who was engaged in the business and she only acted
as his secretary when she dealt with the complainants. She allowed him to
establish his recruitment office at her residence. Enriquez claimed that she
only helped her husband in the office for three months while he was looking
for a secretary. Part of her duties then was to collect the documents
submitted by the applicants and receive the money they paid as placement
fees. Is she guilty of illegal recruitment in large-scale?

A: Yes. The essential elements of the crime of illegal recruitment in largescale can be summarized as follows: (1) the accused engages in acts of
recruitment and placement of workers as defined in the Labor Code; (2) the
accused does not have a license or authority from the Secretary of Labor to
recruit and deploy workers; and (3) the accused commits the same unlawful
acts against three or more persons, individually or as a group.
The theory of the defense unduly strains the credulity of the Court.
The complainants positively identified Enriquez as the one who dealt directly
with them from the time they inquired about the job prospects abroad until
they complied with the requirements and followed up their applications.
Worth reiterating is the rule that illegal recruitment in large-scale is malum

prohibitum, not malum in se, and that the fact alone that a person violated
the law warrants her conviction. Any claim of lack of criminal intent is
unavailing. (People of the Philippines v. Enriquez, 306 SCRA 739, 5 May 1999)

Q: Coca Cola entered into a contract of janitorial services with BJS. Coca Cola
then hired X first, as a casual employee; after the casual employment was
terminated, Coca Cola again hired X as a painter in contractual projects. He
was also hired by BJS, which assigned him to the Coca Cola considering his
familiarity with its premises. Goaded by information that Coca Cola employed
previous BJS employees who filed a complaint against the company for
regularization pursuant to a compromise agreement, X submitted a similar
complaint against Coca Cola to the Labor Arbiter; he included BJS therein as a
co-respondent. He no longer reported to work and when offered by BJS to
work in other firms, he refused. He amended the complaint to illegal
dismissal and underpayment of wages. Is there an employee-employer
relationship in this case?

A: No. The Court takes judicial notice of the practice adopted in several
government and private institutions and industries of hiring janitorial services
on an independent contractor basis. Although janitorial services may be
considered directly related to the principal business of an employer, the Court
deemed them unnecessary in the conduct of the principal business. This
judicial notice rests on the assumption that the independent contractor is a
legitimate job contractor so that there can be no doubt as to the existence of
an employer-employee relationship between the contractor and the worker. It
is also clear that BJS exercises control over the work of X as most of his
assigned task dealt with the maintenance and sanitation of the company
premises pursuant to BJSs contract with the company.
The Court ruled that no employer-employee relation exists between X
and Coca Cola yet the latter shall be jointly and severally liable with BJS for
the wage differentials and 13th Month pay of X. (Coca Cola Bottlers
Philippines v. NLRC, 307 SCRA 131, 17 May 1999)

Q: Admiral Hotel hired Balani as a Cost Controller. She received a memo from
the Managing Director calling her attention to several violation of hotel rules
she had violated such as using the phone for personal calls and entertaining
visitors during office hours, to the detriment of her regular work. The
employee denied the charges leveled against her and she submitted a letter
of resignation. Consequently, she received all salaries, benefits and

separation pay, and executed a quitclaim in favor of the hotel. Did the
employee voluntarily resign?

A: Yes, this is a case if voluntary resignation. The employee claims that she
was constructively dismissed from her office as its location was transferred
from under the steps of the stairs to the kitchen. Such transfer caused her
mental torture, which forced her to resign. However, it was not shown that
her transfer was prompted by ill will of management. Indeed, the resident
manager of the hotel swore that the transfer affected not only the Cost
Control office but also the other offices. The transfer only involved a change
in location of the office. It does not involve a change in the employees
position. Even a transfer in position is valid when based on sound judgment,
unattended by demotion in rank or diminution of pay or bad faith. (Admiral
Realty Company (Admiral Hotel) v. NLRC, 307 SCRA 162, 18 May 1999)

Q: While the oiler was anchored on port, seaman H was directed to open and
clean the main engine. To accomplish this, he had to enter a manhole in a
crouching position. After working for 4 consecutive days, he experienced back
pains and foot swelling. However, he was instructed to continue with his work
until he was finally repatriated to the Philippines where medical examinations
confirmed that he suffered from a slipped disc, which required surgery. Upon
hearing that the surgery would cost more than P 40,000, the company
disregarded the recommendation for surgery and instead proposed a less
costly treatment. But this did not improve the condition of H. After seven
months, H filed a complaint with the POEA against the maritime agencies for
disability and medical benefits. The employers allege that H signed a Receipt
and Release in favor of the maritime agencies while the case was pending in
POEA, that affirmed the findings of the POEA that his illness was workconnected. H supposedly acknowledged receipt of a certain amount in
complete and final settlement of all his wages, benefits and claims. The
maritime agencies assert that the signed Receipt is a quitclaim that releases
them from any liability whatsoever. Is the agreement valid?

A: No, the law does not consider as valid any agreement to receive less
compensation than what a worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled. It is appalling that H would settle
for a measly consideration of P15, 000 which is grossly inadequate, that is
could not have given rise to a valid waiver on the part of the disadvantaged

In order that a quitclaim may be valid, the requisites are: (1) there
was no fraud or deceit on the part of any party; (2) the consideration of the
quitclaim is credible and reasonable; and (3) that the contract is not contrary
to law, public order, public policy, morals or good custom. But even assuming
that the ailment of H was contracted prior to his employment with the
maritime agency, this fact would not exculpate petitioners from liability.
Compensability of an ailment does not depend on whether the injury or
disease was pre-existing at the time of the employment but rather if the
disease or injury is work-related or aggravated his condition. It is safe to
presume, at the very least, the arduous nature of Hs employment had
contributed to the aggravation of his injury, if indeed it was pre-existing at
the time of his employment. Therefore, it is but just that he be duly
compensated for it. (More Maritime Agencies and Alpha Insurance v. NLRC,
307 SCRA 189, 18 May 1999)

Q: The General Manger of the Toll way received reports that certain security
personnel are involved in mulcting activities. Acting on the complaint, the
manager along with police officers staged an entrapment. Angeles, security
guard on duty in one of the exits was caught in flagrante delicto receiving
bribe money from an undercover passenger pretending to illegally transport
dogs. A notice of dismissal on the ground of serious misconduct was issued.
After formal investigations, dismissal was advised and Angeles was informed
of his dismissal. Angeles claimed that the entrapment was masterminded by
the manager as a retaliation for his being critical of the managers
administration. He now claims separation pay. Is he entitled to separation

A: An employee who is dismissed for just cause is generally not entitled to

separation pay. In some cases, the Court awards separation pay to a legally
dismissed employee on the grounds of equity and social justice. This is not
allowed, though, when the employee has been dismissed for serious
misconduct or other causes reflecting on his moral character. The act of
accepting bribe money constituted serious misconduct that warrants the
dismissal from the service. (Philippine National Construction Corporation v.
NLRC, 307 SCRA 218, 18 May 1999)

Q: C, a managerial employee, was accused of sexually harassing a

subordinate, S. After hearing and investigation, the Management Evaluation
Committee concluded that the charges against C constituted a violation of
the Plants rules and regulations. It stated that, touching a female

subordinates hand and shoulder, caressing her nape and telling other people
that S was the one who hugged and kissed or that she responded to the
sexual advances are unauthorized acts that damaged her honor. It referred
to the manual of the Philippine Daily Inquirer in defining sexual harassment,
which defined sexual harassment as unwelcome or uninvited sexual
advances, requests for sexual favors and other verbal or physical conduct of
sexual nature with any of the following elements...(including) such conduct as
unreasonably interferes with the individuals performance at work, or creates
an intimidating, hostile or offensive working environment. C was charged
with 30 days suspension without pay. C filed a complaint for illegal
suspension. The Labor Arbiter dismissed the petition which ruling was
affirmed by the NLRC. The C assailed the failure to apply RA 7877 in
determining whether or not he actually committed sexual harassment. Was C
correctly charged with sexual harassment justifying his suspension?

A: Yes. RA 7877 was not yet in effect at the time of the occurrence of the act
complained of. IT was still being deliberated upon in Congress. As a rule,
laws shall have no retroactive effect unless otherwise provided. Hence, the
Labor Arbiter had to rely on the MEC report and the common connotation of
sexual harassment as it is generally understood by the public. Also, as a
managerial employee, is bound by more exacting work ethics. When such
moral perversity is perpetrated against a subordinate, there is a justifiable
ground for dismissal based on loss of trust and confidence. (Libres v. NLRC,
307 SCRA 674, May 28, 1999)

Q: In an intra-union dispute involving the examination of union accounts of a

Local Chapter, the parties submitted the matter to the Office of the Regional
Director, who sustained the order for an audit to be conducted. The ILM
union officers appealed the order to the DOLE Secretary, who endorsed it to
the Bureau of Labor Relations. The BLR subsequently dismissed the appeal.
Is the DOLE Secretary correct in endorsing the case?

A: Yes. Examinations of union accounts are expressly classified by the Rules

of Procedure on Med-Arbitration, and a different process is provided for the
resolution of the same. According to Art. 226 of the Labor Code, the BLR has
appellate jurisdiction over the matter, so the DOLE Secretary was correct in
its endorsement of the case. (Barles v. Bitonio, 308 SCRA 288, June 1999)

Q: Q and L were supervisors whose jobs involved the overseeing of the

withdrawal and sorting of sacks of sugar. In one transaction involving 50,000
Class C sacks, large numbers of sacks were misplaced, and sacks of other
classes were mixed in with the lot. As they were supervising other operations
at the time, Q and L were lax with their duties to see that the sacks were
properly segregated and delivered. As a result, a large number of sacks was
stolen from the company. Q and L were subsequently fired for gross
negligence. Are they validly dismissed?

A: NO. While Quimba and Lagrana were partially responsible for the
unfortunate incident, their negligence is not gross or habitual, and as such
does not merit outright dismissal. Thus, they would be entitled to
reinstatement, but the employees have accepted the NLRCs judgement for
separation pay instead due to the animosity between the parties. (National
Sugar Refineries Corp. v. NLRC, 308 SCRA 599, June 1999)

Q: R worked as the driver of T, the owner of Ultra Villa Food Haus. During the
May 1992 elections, he acted as a poll watcher for Lakas-NUCD and did not
report for work for two days. For the past years, the T gave R 13th mo. Pay.
He alleged that he was an employee of Ultra Villa Food Haus, and as such, he
was entitled to the benefits accorded to employees under the Labor Code.
What is R entitled to?

A: Geniston is a personal driver of Tio, and as such, the company is not

obliged to grant overtime pay, holiday pay, premium pay and service
incentive leave, including 13th mo. pay. However, since T admitted that she
has given R 13th mo. pay every December, it is but just to award R such
benefit. (Ultra Villa Food Haus v. Geniston, 309 SCRA 17, June 1999).

Q, a former employee of SURNECO, sent letters to the company management

requesting separation benefits for her 9 years of faithful service to the
company. Nearly four months later, E, then Personnel Officer of SURNECO,
followed up and made a review of Qs case. Subsequently, Q filed a
complaint for illegal dismissal, based largely on the report of E acting in favor
of Q. The complaint was barred by prescription, but because of what had
happened, E was terminated for having provided Q with the weapons and
ammunition to wage a war against the cooperative. Furthermore, the Board
of SURNECO concluded that advancing the interest of Q instead of the

company, especially since she divulged the contents of her internal

memorandum to Q, were inimical to the company and merited dismissal.
Was E illegally dismissed?

A: YES. E was a Personnel Officer, holding a managerial position that is

considered vested with a certain amount of discretion and independent
judgement. She was simply doing her job when she reviewed Quintos case,
and she is not proscribed from taking the side of labor when she makes
recommendations as to what must be done in each situation. Also, there is
no evidence that Quinto got the copy of the internal memorandum directly
from Esculano she could have acquired it from other sources. As such, Es
actions do not qualify as breach of confidence or serious misconduct.
(Surigao Del Norte Electric Cooperative v. NLRC, 309 SCRA 233, June 1999).

Q: RA 6715 was passed creating a new classification of employee, the

supervisory employee, as not being a member of the rank and file but also
not considered a managerial employee. At around this time, the supervisory
employees of Semirara Coal decided to form their own union and intervene in
the certification elections. However, the company filed a motion to disqualify
the supervisory employees from participating in the certification elections, as
their functions were managerial in nature. Should they be allowed to
participate in the certification elections?

A: Yes, they should be allowed. The said employees fall under the category of
supervisory employees. Nothing in the company policies alters the nature
and duty of these supervisory employees to managerial. There is no showing
that the power to discipline erring employees is vested in their immediate
supervisors. As such, they fall outside of the restriction on managerial
employees from joining unions and participating in certification elections.
(Semirara Coal Corporation v. Secretary of Labor, 309 SCRA 292, June 1999)

Q: Complainants are deaf-mutes hired by Company F as money sorters and

counters through an agreement called, Employment Contract for
Handicapped Worker. The Labor Arbiter and NLRC ruled that Article 280 was
not controlling as complainants were hired as an accommodation to the
recommendation of civic oriented personalities whose employments were
covered by Employment Contracts with special provisions on duration of
contract as specified under Art. 80. Hence, the terms of the contract was be

the law between the parties. Complainants allege that the contracts served
to preclude the application of Article 280 and to bar them from becoming
regular employees. Company F submits that complainants were hired as
special workers under Art. 80 of the Labor Code and they never solicited the
services of petitioners. Were complainants regular employees?

A: Yes. The enactment of RA 7277, the Magna Carta for Disabled Persons,
justify the application of Art. 280 of the Labor Code. Such law mandates that
a qualified disabled employee should be given the same terms and conditions
of employment as a qualified able bodies person. The fact that complainants
were qualified disabled persons removes the employment contracts from the
ambit of Art. 280, since the Magna Carta accords them the rights of qualified
able-bodied persons. The task of complainants was necessary and desirable
in the usual trade of the employer and therefore they should be deemed
regular employees. (Bernardo v. NLRC, 310 SCRA 186, July 12, 1999)

Q: A labor dispute arose between Company Y and Union A, which caused the
union to file a notice of stricke with the NCMB charging the company with ULP
for union-busting and violations of the CBA. This was followed by picketing
and the holding of assemblies by the union outside the gate of Company Ps
plant. The Secretary of Labor assumed jurisdiction over the labor dispute and
certified it for compulsory arbitration. During the pendency of the labor
dispute, Company Y agreed to sell its plant and equipment to Company Z.
The union was informed of the purchase of the plant. Company Z asked the
union to desist from picketing outside its plant. The Union refused petitioners
request, and Company Z filed a compalint for injunction. The Union moved to
dismiss the complaint alleging lack of jurisdiction on the part of the trial court
and that Company Z was an alter ego of Company Y and not merely an
innocent by-stander.

A: An innocent by-stander, who seeks to enjoin a labor strike, must satisfy

the court that its interests are totally foreign to the context of the labor
dispute. It must appear that the inevitable result of its exercise is to create
an impression that a labor dispute with which they have no connection or
interest exists between them and the picketing union or constitutes an
invasion of their rights. In this case, Company Z clearly has a connection with
the labor dispute as the sale between Company Y and Company Z reveals a
legal relation between them that cannot be ignored. (MSF Tire and Rubber,
Inc. v. CA, 311 SCRA 784, August 5, 1999)

Q: M was employed by petitioner as a truck driver. One day, he was accused

of tampering with the vale sheet and he was subsequently barred from
entering company premises. M filed a complaint of illegal dismissal against
private respondent before the NLRC. A copy of the summons was sent to
petitioners by registered mail and was duly received and signed. The
petitioner was also notified of the hearing date by registered mail but no one
appeared for the petitioner. The Labor Arbiter deemed petitioners nonappearance as a failure to controvert the facts as claimed by M and decided
the case ex-parte. The petitioners allege that they never received copies of
summons or notices and that the Labor Arbiter never acquired jurisdiction
over them, as there was no valid service of summons. Were the petitioners
denied due process?

A: No. The bare assertion of petitioner that the persons who signed the
summons which were sent by registered mail were impostors or persons
unknown to them requires substantiation by competent evidence. In quasijudicial proceedings of the NLRC, procedural rules governing service of
summons are not strictly construed and substantial compliance is therefore
sufficient. Further, official duty is presumed to have been performed regularly
unless the contrary is proven. In administrative proceedings, due process
simple means the opportunity to explain ones side or seek a reconsideration
of the action complained of. Petitioners were able to file an appeal before the
NLRC of the Labor Arbiters decision and a party who has availed of the
opportunity to present his position cannot claim to have been denied due
The Court also ruled that M was constructively dismissed when he was
accused of tampering with the vale sheet and prevented from going to work.
The assertion of petitioner that M abandoned his work is also without merit as
it is highly illogical for an employee to abandon his employment and
thereafter file a complaint for illegal dismissal. Even assuming that there was
abandonment, there was non-compliance with the statutory requirement of
notice; therefore M is entitled to separation pay and backwages. (Masagana
Concrete Products v. NLRC, 313 SCRA 576, 3 September 1999)

Q: L was employed by NAPCO-Luzmart, which was managed by petitioner

Garcia. A mauling incident occurred in the company premise involving L and
another employee. The following day after the incident, L submitted his
written explanation of the event. 3 days later, L attempted to report for work
but the company refused to admit him. L immediately filed a complaint for

illegal dismissal with the NLRC. After the company knew of the illegal
dismissal charge against it, a memorandum was issued ordering the
suspension of L. The company asserted that L remains an employee and was
merely suspended for a month. Proof of this, the company presented the
payrolls where the name of L continued to be listed as a regular employee
during the period after the alleged illegal dismissal. The company claimed
that L abandoned his work when he failed to report for work after notice of
return. Was L illegally dismissed?

A: The Court ruled that the payroll is of doubtful probative value, as it does
not contain the signature of employees as proof that they received their
salaries for the said period. For a valid finding of abandonment, two factors
must be present: (1) failure to report for work without any valid or justifiable
reason; and (2) a clear intention to sever the employer-employee relationship
manifested by some overt acts. It was the company who refused him entry
into the work place and made it impossible for him to return to work.
Moreover, the filing of the complaint for illegal dismissal 7 days after the
alleged dismissal negates said charge.
Although fighting within company premises may be considered as a
serious misconduct under Article 282 of the Labor Code, not all fights within
company premises would warrant dismissal. This is especially true if the
employee did not instigate the fight and it appears from the facts of the case
that L was just defending himself from the assault of a co-employee.
The company was ordered to reinstate L and pay backwages
computed from the date of illegal dismissal. (Garcia v. National Labor
Relations Commission, 313 SCRA 597, 3 September 1999)

Q: In a case of illegal dismissal against the petitioner, the Labor Arbiter ruled
that the dismissal of P was illegal and awarded damages, separation pay and
backwages. The company filed a Motion for Appeal and a Motion to Reduce
Appeal Bond before the NLRC reiterating that P voluntarily resigned and was
not illegally dismissed. Petitioners argued that considering the authorized
capital stock of the corporation was only P2, 000,000.00, an award of P1,
870,000.00 as backwages alone was excessive and initially posted only a
P50,000.00 cash bond. The NLRC denied the Motion to Reduce the Appeal
Bond. The NLRC gave the company three extensions (totaling 30 days) for
them to comply with the appeal bond requirement. A certain R, wife of the
companys chairman, posted the required bond. Yet when R learned that she
was not under any obligation to post the bond on behalf of her husband, she
withdrew the bond. Should petitioners still be made to post another bond?

A: Yes. Since effectively, no appeal bond was posted by petitioners, no appeal

was perfected from the decision of the Labor Arbiter, for which reason the
decision sought to be appealed to the NLRC became final and executory and
immutable. The requirement of cash or surety bond to perfect an appeal from
the Labor Arbiters monetary award is jurisdictional; non-compliance is fatal
and renders the award final and executory. It is not an excuse that the bond
of P2 million is too much for a small business enterprise. The law does not
require outright payment but only the posting of a bond to ensure that the
award will eventually be paid should the appeal fail. (Biogenerics Marketing
and Research Corporation v. NLRC, 313 SCRA 748, 8 September 1999)

Q: X was employed by petitioner Restaurante Las Conchas while the latter

was involved in a legal battle with company Y over the land being allegedly
occupied by the petitioner. Company Y was able to obtain a favorable
judgment which eventually caused petitioner to vacate the premises. As no
other suitable location was found for petitioner to move, the restaurant was
forced to close down, thereby resulting in the termination of employment of
X. No separation pay was given to X based on the argument of petitioner that
only closure of business not due to business losses mandates payment of
separation pay to dismissed employees. Should separation be given and
should the manager of the Restaurante Las Conchas be held liable as a
corporate officer?

A: The Court rules that the burden of proof that business losses actually
occurred rests on the employers. Since no statements of assets and liabilities
certified by a CPA or accounting firm was offered, nor the corporations
Income Tax Return certified by the BIR was shown, such business losses were
not proven. As regards the liability of the manager, generally, the officers
and members of a corporation are not personally liable for the acts done in
the performance of their duties. An exception is when the employer
corporation is no longer existing and is unable to satisfy the judgment in
favor of the employees. In such a case, the officers should be held liable for
acting on behalf of the corporation. (Restaurante Las Conchas and/or David
Gonzales vs. Llego, 314 SCRA 24, Sept. 9, 1999)

Q: X was hired by Respondent under a 2 year contract in Kuwait. Only after 1

year, however, X was terminated from employment and was sent back to the
Philippines. X then filed a complaint for illegal dismissal with the Labor

Arbiter. Respondents were given by the Labor Arbiter 10 days to answer the
charges against. Respondents submitted a bill of particulars instead alleging
that X was lacking in the required narration of facts constituting the causes of
action. X, on the other hand, moved to declare respondents in default for
failing to submit their position papers. Both parties agreed that the Labor
Arbiter should decide on the motion on the Bill of Particulars. The Labor
Arbiter, however, declared the respondents in default for failure to submit
their position papers within the period given. Were the respondents denied
due process?

A: Yes. The court rules that there was denial of due process since no notice or
order requiring respondents to file their position paper, nor an order
informing the parties that the case was already submitted for decision. There
was an utter absence of opportunity to be heard at the arbitration level. What
the Labor Arbiter should have done was to rule on the pending motions, or at
least notify private respondents that he would no longer resolve their
motions, and to direct them forthwith to submit within a reasonable time their
position paper as well as all the evidence. (Habana vs. NLRC, 314 SCRA 187,
September 1999)

Q: Petitioner X was an Italian citizen who was the Exec. Vice President and
Gen. Manager of Company Y when he was terminated by the latter. X then
filed a complaint for illegal dismissal. Company Y based the dismissal of X on
the ground that X failed to secure his employment permit. X, on the other
hand, argued that it was the duty of the company to secure his work permit
during the term of his office. The Labor Arbiter rendered a decision in favor of
X. Company Y however appealed such decision to the NLRC. X now questions
the jurisdiction of NLRC as he is a corporate officer, it is the SEC who should
have jurisdiction. Did the NLRC have jurisdiction over the case?

A: No. According to Sec 5(c) of P.D. No. 902-A, the SEC exercises exclusive
jurisdiction over controversies over regarding the election and/or designation
of directors, trustees, officers, or managers of a corporation, partnership or
association. Jurisdiction therefore is not which the Labor Arbiter nor the NLRC.
(De Rossi vs. NLRC, 314 SCRA 245, September 1999)

Q: Respondent X was hired by the Blue Dairy to work as a food technologist in

the latters laboratory. One day however, while attending to a client outside

company premises as accompanied by the company driver, the vehicle was

hit by a post, as there was a typhoon. Afterwards, X was then transferred
from the laboratory to the vegetable processing section; she was then barred
from the laboratory. X claims that she was constructively dismissed as she
was evidently demoted. Was X constructively dismissed from work?

A: Yes. The Court rules that although the employer has managerial
prerogative to transfer personnel, such must be exercised without grave
abuse of discretion. The employer has the burden of proof to show that such
transfer was not unreasonable, inconvenient or prejudicial to the employee,
nor does it involve a demotion in rank or a diminution of his salaries,
privileges and other benefits. The company in this case, alleges that the
reason for the transfer was loss of trust and confidence. X however, was
never given the chance to refute such reason, nor was she notified in
advance of the transfer. (Blue Dairy Corporation vs. NLRC, 314 SCRA 401,
September 1999)

Q. A check was mis-posted, resulting in an overstatement of a clients

outstanding daily balance. The President of the bank sent a letter to
petitioner to explain the mis-posting. Internal auditors, after investigation,
reported that petitioner was liable, and the bank notified her that 20% of the
amount would be deducted from her salary. Upon petitioners demand for a
full-dress investigation, she was informed of her preventive suspension until
the end of the investigation. Petitioner then filed a complaint for illegal
dismissal and damages. Was she illegally dismissed? Did filing of damages
amount to abandonment of work?

A. Yes, her preventive suspension was without valid cause since she was
suspended outright. Preventive suspension beyond the maximum period
amounts to constructive dismissal. Likewise, her claim for damages did not
amount to abandonment of work. To constitute abandonment, these should
concur: 1. Failure to report for work or absence without valid or justifiable
cause; and 2. A clear intention to sever the employee-employer relationship
(more determinative factor manifested by over acts). She merely took steps
to protest her indefinite suspension. Her failure to report for work was even
due to her indefinite suspension. (Premiere Devt Bank v. NLRC)

1998 CASES

Q. In an illegal dismissal case, the Labor Arbiter ruled in favor of the worker.
The total monetary award was more than ONE MILLION Pesos. The employer
appealed and posted a bond in the amount of P700,000.00 only. In
computing the monetary amount for the purpose of posting an appeal bond,
the employer excluded the award for damages, litigation expenses and
attorneys fees. Is the employers computation correct?

A. Yes, the computation of the monetary award is correct. Under the NLRC
New Rules of Procedure, an appeal is deemed perfected upon the posting of
the bond equivalent to the monetary award exclusive of moral and
exemplary damages as well as attorneys fees. The said implementing rule
is a contemporaneous construction of Article 223 of the Labor Code by the
NLRC pursuant to the mandate. The exclusion of moral and exemplary
damages and attorneys fees from the computation of the monetary award
has been recognized by the Supreme Court in a number of cases.
(Fernandez v. NLRC, 285 SCRA 149, January 28, 1998)

Q. Reynaldo worked as a bus driver for Nelbusco, Inc.. On February 28,

1993, the airconditioning unit of the bus which Reynaldo was driving suffered
a mechanical breakdown. The company told Reynaldo to wait until the
airconditioning unit was repaired. No other bus was assigned to Reynaldo to
keep him gainfully employed. Reynaldo continued reporting to his
employers office for work, only to find out that the airconditioning unit had
not been repaired. More than six months elapsed but Reynaldo was not
given work. He filed a complaint for illegal dismissal. The NLRC ruled that
there was no illegal dismissal. Is the ruling correct?

A. No, the ruling is erroneous. Under Article 286 of the labor Code, the bona
fide suspension of the operation of a business or undertaking for a period not
exceeding six months shall not terminate employment. Consequently, when
the suspension exceeds six months, the employment of the employee shall
be deemed terminated. By the same token and applying said rule by
analogy, if the employee was forced to remain without work or assignment

for a period exceeding six months, then he is in effect constructively

dismissed. The so-called floating status of an employee should last only
for a legaly prescribed period of time. When that floating status lasts for
more than six months, he may be considered to have been illegally dismissed
from the service. (Valdez v. NLRC, 286 SCRA 87, February 9, 1998)

Q. An employer appealed a Writ of Execution issued by the Labor Arbiter

claiming that it had varied the tenor of the judgment. The NLRC dismissed
the appeal stating that it had lost jurisdiction over the case. The NLRC
stated that an order of execution is not merely interlocutory but final in
character and that after a decision has become final, the prevailing party
becomes entitled as a matter of right to its execution. Is the dismissal of the
appeal correct?

A. No, the dismissal of the appeal is erroneous. The NLRCs ruling is based
on the general rule that after a decision has become final, the prevailing
party becomes entitled as a matter of right to its execution, that it becomes
merely the ministerial duty of the court to issue the execution. This general
rule cannot be applied, however, whhere the writ of execution is assailed as
having varied the decision. In this case, the employer alleged that the writ
of execution materially altered the decision. If this allegation is correct, the
appellant is entitled to the remedy of appeal. The NLRC is vested with
authority to look into the correctness of the execution of the decision and to
consider supervening events that may affect such execution. (SGS Far East
Ltd. V. NLRC, 286 SCRA 335, February 12, 1998)

Q. Federico was a regular work pool employee of PNCC. He was employed in

1971 and worked in various construction projects of PNCC. IN 1979, he
worked for a project of PNCC in the Middle East with a salary of $2.20 per
hour. After the completion of the project in 1984, Federico returned to the
Philippines. PNCC then failed to give him work in its local projects.
Consequently, Federico filed a complaint for illegal dismissal and obtained a
ruling in his favor. When the backwages were computed, the NLRC used
Federicos salary rate in the Middle East. PNCC questions the correctness of
the computation and claimed that the computation should be based on
Federicos local wage rate at the time of his transfer to the overseas project.

A. The NLRCs computation is erroneous. Federico was not illegally dismissed

while working in the Middle East project. He was dismissed from the work
pool after the completion of the Middle East project. If Federico were given
local assignments after his stint abroad, he would have received the local
wage. This is the loss which backwages aim to restore. The computation
should be based on the local rate. (PNCC v. NLRC, 286 SCRA 329, February
12, 1998)

Q. Alleging serious business losses, Edge Apparel implemented a

retrenchment program by phasing out its sewing line for simple garments.
The workers assigned to this particular sewing line were terminated. The
other lines were maintained. In the illegal dismissal case filed by the
dismissed workers, the NLRC upheld the legality of the dismissal but treated
such dismissal as due to redundancy. Was the dismissal due to redundancy?

A. No, the dismissal was due to a retrenchment program. In exercising its

right to retrench employees, the firm may choose to close all, or a part of, its
business to avoid further losses or mitigate expenses. The fact that only the
dismissed employees sewing line was phased out does not make their
termination a case of redundancy. Redundancy exists where the services of
an employee are in excess of what would reasonably be demanded by the
actual requirements of the enterprise. A position is redundant when it is
superfluous. Retrenchment, in contrast to redundancy, is an economic
ground to reduce the number of employees. In order to be justified, it must
be due to business losses which are serious, actual and real. In this case,
the phasing out of the line for simple garments and, consequently, the
termination of employees assigned to such line, was due to serious business
losses. Hence, it constitutes retrenchment. (Edge Apparel, Inc. v. NLRC, 286
SCRA 303, February 12, 1998)

Q. Simultaneous with the filing of the appeal, the appellant-employer filed a

motion to reduce the amount of the bond. The motion was partially granted.
In the order partially granting the motion to reduce the amount of the bond,
the NLRC directed the appellant to post the bond within ten (10) days from
receipt of the order. Instead of filing the bond, the appellant employer filed a
motion for reconsideration of the NLRCs order reducing the amount of the
bond. Because of the appellant employers failure to post the bond, the
NLRC dismissed the appeal. Is the NLRCs ruling correct?

A. Yes, the ruling is correct. To have the bond reduced is not a matter of
right on the part of the appellant but lies within the sound discretion of the
NLRC upon showing of meritorious grounds. After the NLRC had exercised its
discretion in fixing the bond, the appellant should have complied with it. To
file a subsequent motion seeking another reconsideration of the already
reduced amount of the bond is to request for an extension of time to perfect
an appeal which is prohibited. (MERS Shoes Manufacturing, Inc. v. NLRC, 286
SCRA 647, February 27, 1998)

Q. Juana is a worker in Del Monte Phil., Inc.. The company rules provide for an
Absence Without Permission (AWOP) Policy. If the worker intends to be
absent from work, he should first file an application for leave and wait for its
approval before going on leave. The first offense is punishable by oral
reprimand; 2nd offense written reprimand; 3rd offense 1-7 days
suspension; 4th offense 8-15 days suspension; 5th offense 16-30 days
suspension; and 6th offense dismissal. From 1992-1994, Juana incurred 57
AWOP. Without initially penalizing Juana for her past AWOP, the company
dismissed her from service in 1994.
(a) Is the dismissal valid?
(b) Can Juana be considered to have abandoned her job due to her
intermittent absences without permission?

A. (a) No, the dismissal is not valid. The rule is that an employers power to
discipline its workers may not be exercised in an arbitrary manner as to erode
the constitutional guarantee of security of tenure. In this case, the company
rules provide for a graduation of penalties for violation of the AWOP policy.
Even granting that Juana incurred previous AWOPs as far back as 1992, the
company should have initially penallized her with reprimand or suspension for
her previous AWOPs instead of dismissing her outright from service.

(b) No, Juana did not abandon her job. Abandonment, as a just and valid
ground for termination, means the deliberate, unjustified refusal of an
employee to resume his employment. The burden of proof is on the
employer to show a clear and deliberate intent on the part of the employee to
discontinue employment. The intent cannot be lightly inferred from certain
equivocal acts. For abandonment to be a valid ground for dismissal, two
elements must be proved: the intention of an employee to abandon, coupled
with an overt act from which it may be inferred that the employee has no

more intent to resume his/her work. In this case, these elements are not
present. (Del Monte Philippines, Inc. v. NLRC, 287 SCRA 71, March 5, 1998)

Q. Ernesto was employed by Baliwag Transit as a bus driver. On May 20,

1983, the bus driven by Ernesto was heavily damaged in an accident with two
other vehicles. Ernesto was grounded and was advised by Baliwag Transit
to wait for the result of the police investigation and the actions that may be
taken by the owners of the other vehicles. Ernesto paitiently waited.
Realizing that he has waited too long, Ernesto on December 11, 1986
requested Baliwag Transit to reinstate him. Baliwag Transit formally informed
him to look for another job because the management has terminated his
services on account of the vehicular accident. On November 15, 1990,
Ernesto filed a complaint for illegal dismissal. The labor arbiter dismissed
the complaint on the ground that Ernestos action is barred by prescription
since it was filed more than four years from the accrual of the cause of action
on May 20, 1983. Is Ernestos action barred by prescription?

A. No, the action is not barred. The four year period should not be reckoned
from the time of the accident on May 20, 1983 because Ernesto was not yet
considered terminated at that time. He was merely grounded and advised
to wait. Ernestos cause of action accrued only in December 1986 when
baliwag Transit formally dismissed him from the service. Hence, the action
filed on November 1990 had not yet prescribed. (Mendoza v. NLRC, 287 SCRA
51, March 5, 1998)

Q. Jose, a married man, was employed as a teacher by Hagonoy Institute.

Likewise working as a teacher for Hagonoy Institute was Arlene, also married.
In the course of their employment, Jose and Arlene fell in love and had a
relationship. After complying with the procedural requirements, Hagonoy
terminated the services of the couple. Is the dismissal valid?

A. Yes, the dismissal is valid. The illicit relationship between Jose and Arlene
can be considered immoral as to constitute just cause to terminate the
couple. To constitute immorality, the circumstances of each particular case
must be considered and evaluated in light of the prevailing norms of conduct
and applicable laws. In the present case, the gravity of the charges against
the couple stem from their being married and at the same time teachers.
Teachers must adhere to the exacting standards of morality and decency. A

teacher, both in his/her official and personal conduct, must display exemplary
behavior. He/she must freely and willingly accept restrictions on his/her
conduct that might be viewed irksome by ordinary citizens. Teachers must
abide by a standard of personal conduct which not only proscribes the
commission of immoral acts, but also prohibits behavior creating a suspicion
of immorality because of the harmful impression it might have on students.
(Santos v. NLRC, 287 SCRA 117, March 6, 1998)

Q. Philippine Airlines terminated the services of two flight stewards for their
alleged involvement in currency smuggling in Hong Kong. Instead of filing an
illegal dismissal case with the Labor Arbiter, the workers filed with the NLRC
(Commission) a petition for injunction. The NLRC issued a temporary
mandatory injunction enjoining PAL to cease an desist from enforcing its
memorandum of dismissal. The NLRC further ruled that the filing of an
illegal dismissal case with the Labor Arbiter was not an adequate remedy for
the workers. Is the NLRCs ruling correct?

A. No, the NLRCs ruling is erroneous. The power of the NLRC to issue an
injunctive writ originates from any labor dispute, i.e. a case between the
contending parties before the labor arbiter. In the present case, there is no
labor dispute yet between the workers and PAL since there has yet been no
illegal dismissal complaint filed with the labor arbiter. The petition for
injunction directly filed before the NLRC is in reality an action for illegal
dismissal. The petition should have been filed with the labor arbiter who has
the original and exclusive jurisdiction over termination disputes. The Labor
Code does not provide blanket authority to the NLRC or any of its divisions to
issue writs of injunction, considering that the New Rules of Procedure of the
NLRC makes injunction only an ancillary remedy in ordinary labor disputes.
(PAL v. NLRC, 287 SCRA672, March 20, 1998)