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LABOR CASE FINALS REVIEWER

CASE
Phil Telegraph and Telephone Co
v. NLRC

Duncan Association of Detailman


v. Glaxo Wellcome

QUICK FACTS

HELD

DOCTRINE

Working Conditions for Special Group of Workers


Respondent was terminated from
Petitioners policy of not accepting Constitution, cognizant of the
employment as it was company
or considering as disqualified form disparity in rights between men
policy not to hire married women.
work any woman worker who
and women in almost all phases of
Respondent, who'd been employed
contacts marriage VIOLATES right
social and political life, provide a
for some time under company denied against discrimination against
gamut of protective provisions (Sec
that she knew of the policy and
women
14 Art II, Sec 3 Art XII, Sec 14 Art
insisted she did not conceal her civil
XIII). Corrective labor and social
status
laws on gender inequality have
emerged with more frequency in
the years since the LC was enacted,
Labor Code Articles 130-138
recognizes this too. Acknowledged
as paramount in the due process
scheme is the constitutional
guarantee of protection to labor
and security of tenure. Thus, an
employer is required as a condition
prior to severance of the
employment ties of an individual
under his employ, to convincingly
establish through substantial
evidence, the existence of a valid
and just cause in dispensing with
the services of such employee,
ones labor being regarded as
constitutionally protected property
Company had a policy that required
VALID COMPANY POLICY
Valid exercise of management
employees to disclose to
prerogative. Glaxo has a right to
management, any existing or future
guard its trade secrets,
relationship by consanguinity or
manufacturing formulas, marketing
affinity with co employees or
strategies and other confidential
employees of competing drug
programs and information from
companies and should management
competitors, especially so that it
find that such relationship poses a
and Astra are rival companies in
possible conflict of interest, that such
highly competitive pharmaceutical
employee should resign from the
industry.
company. Petitioner entered into a
romantic relationship with an
employee of Astra, competitor of
respondent company. Before they

OTHER NOTES
Petitioners policy is not
only in derogation of the
provisions of Art 136 on the
right of a woman to be free
from any kind of stipulation
against marriage in
connection with her
employment, but it likewise
assaults good morals and
pulic policy, tending as it
does to deprive a woman of
the freedom to choose her
status, a privilege that by all
accounts inheres in the
individual as an inalienable
right

Policy does not violate EPC


of Constitution. EPC: no
shield against private
conduct. Glaxo does not
impost absolute prohibition
against relationships
between employes and
competitor companies,
what it seeks to avoid is
conflict of interest between
the employee and the
company that may arise
about such relationship.

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Philip. Aeolus Automotive


United Corp v. NLRC

Libres v. NLRC

Fernando Co v. Lina B. Vargas

married, petitioner received


reminders from his District Manager
regarding conflicts of interest. He
requested time to comply with
company policy, Glaxo transferred
petitioner to different sales area.
Respondent was sexually harassed by
her boss over a period of 4 years.
She finally snapped after her boss
transferred her to an office without
and intercom or telephone. CA
questioned why it took her 4 years to
reveal said sexual harassment.

Petitioner was dismissed for sexually


harassing a co-worker pursuant to
Item 2, Table V, of the Plants Rules
and Regulations and the Manual of
the Philippine Daily Inquirer in
defining sexual harassment. He
argues that the court should apply RA
No. 7877 (Anti-Sexual Harassment
Act) in determining whether he
actually committed sexual
harassment. He cites public
respondents failure to show that his
acts of fondling the hand and
massaging the shoulders of Capiral
discriminated against her continued
employment, impaired her rights
and privileges under the Labor
Code, or created a hostile,
intimidating or offensive
environment.
Respondent was working as a baker
in his employer's bakeshop while she

Respondent is entitled to damages


due to the sexual harassment she
suffered under her employer -->
There is no time period within
which he or she is expected to
complain;. the time to do so may
vary depending upon the needs,
circumstances, and more
importantly, the emotional
threshold of the employee.

The gravamen of the offense in


sexual harassment is not the
violation of the employee's
sexuality but the abuse of power
by the employer.
Sexual harassment is an imposition
of misplaced "superiority" which is
enough to dampen an employee's
spirit in her capacity for
advancement. It affects her sense
of judgment; it changes her life.

RA 7877 was not yet in effect at


the time of the occurrence of the
act complained of. As a rule, laws
shall have no retroactive effect
unless otherwise provided, or
except in a criminal case when
their application will favor the
accused. Hence, the Labor Arbiter
have to rely on the MEC report
and the common connotation of
sexual harassment as it is generally
understood by the public.

Villarama case: "As a managerial


employee, petitioner is bound by
more exacting work ethics. He
failed to live up to his higher
standard of responsibility when he
succumbed to his moral perversity.
And when such moral perversity is
perpetrated against his
subordinate, he provides a
justifiable ground for his dismissal
for lack of trust and confidence. It
is the right, nay, the duty of every
employer to protect its employees
from oversexed superiors.

Thus, for the anxiety, the


seen and unseen hurt that
she suffered, petitioners
should also be made to pay
her moral damages, plus
exemplary damages, for the
oppressive manner with
which petitioners effected
her dismissal from the
service, and to serve as a
forewarning to lecherous
officers and employers who
take undue advantage of
their ascendancy over their
employees.

[I]t is clear that petitioner [Lina B.


Vargas] is not a househelper or
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is also doing household chores for


them. She was dismissed when she
was not able to cook dinner for the
employee's family.

Escasinas v. Shangri-la's Mactan


Island Resort

Romares v. NLRC

Petitioners are registered nurses


engaged by Dr. Pepito to work in her
clinic located at respondent Shangrila. - A complaint for regularization,
underpayment of wages, nonpayment of holiday pay, night shift
differential and 13th month pay
differential against respondents were
filed by petitioners who claim that
they are regular employees of
Shangri-la pursuant to Article 157 of
the Labor
Code. Accordingly, Shangri-la is
required to hire a full-time registered
nurse, apart from a physician, hence,
their engagement should be deemed
as regular employment.
Complainant in his Complaint and
Position Paper alleged that he was
hired by respondent in its
Maintenance/Projects/Engineering
Department during the periods of:
Sept. 1, 1989 to Jan. 31, 1990
Jan.16, 1991 to Jun. 15, 1991
Aug. 16, 1992 to Jan. 15, 1993
Complainant argues that having
rendered a total service of more than
one (1) year and by operation of law,
he has become a regular employee of
respondent. Respondent on the
other hand maintains that
complainant was a former
contractual employee of respondent

domestic servant of private


respondents [Nathaniel Bakeshop
and Fernando Co]. The evidence
shows that petitioner is working
within the premises of the
business of private respondent Co
and in relation to or in connection
with such business.
Art. 157 does not require the
engagement of full-time nurses as
regular employees of a company
employing not less than 50
workers.
Shangri-la, which employs more
than 200 workers, should provide
or make available such medical
and allied services to its
employees, not necessarily to hire
or employ a service provider.

EMPLOYEE CLASSIFICATION
Construing Art. 280 LC, the phrase
usually necessary or desirable in
the usual business or trade of the
employer should be emphasized
as the criterion in the instant case.
Facts show that petitioners work
with PILMICO as a mason was
definitely necessary and desirable
to its business. PILMICO cannot
claim that petitioners work as a
mason was entirely foreign or
irrelevant to its line of business in
the production of flour, yeast,
feeds and other flour products.

Article 157 must not be read


alongside Art. 280 in order to vest
employer-employee relationship
on the employer and the person so
engaged.
The phrase services of a full-time
registered nurse should thus be
taken to refer to the kind of
services that the nurse will render
in the companys premises and to
its employees, not the manner of
his engagement.

It is noteworthy that during each


rehiring, the summation of which
exceeded one (1) year, petitioner
was assigned to PILMICOs
Maintenance/Projects/Engineering
Department performing the same
kind of maintenance work. Such a
continuing need for the services of
petitioner is sufficient evidence of
the necessity and indispensability
of his services to PILMICOs
business or trade.

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Phil Federation etc v. NLRC

Dante D de la Cruz v. Maersk


Filipinas Crewing Inc

AtoK Big Wedge Co v. Jesus P


Gison

and as such his employment was


covered by contracts
Private respondent Abril worked for
and held various positions in PFCCI
until she went on an 8-month leave
to give birth to her daughter. Upon
her return, she was assigned to
contractual positions which,
however, provided that she would be
under probationary employment for
6 months. Abril filed a complaint for
illegal dismissal upon the termination
of her employment while PFCCI
insisted that her dismissal was valid
upon the termination of her contract
as she was a casual or
contractual employee.

De la Cruz was employed as an


engineer on board one of Maersks
vessels who was dismissed during his
probationary status for
his unsatisfactory performance. He
subsequently filed a complaint for
illegal dismissal while his former
employer claimed that a
probationary employee may be
dismissed at any time during the
probationary period for failure to live
up to the employers expectations.
Respondent was engaged as parttime consultant on retainer basis by
petitioner through its Asst VP and
Acting Resident Mgr. He assisted
company's retained legal counsel
with matters pertaining to the
prosecution of cases against illegal

Abril became a regular and was no


longer a casual or contractual
employee after she had been
allowed to work by PFCCI beyond
her six-month probationary
period. Also, the conflicting
provisions in her employment
contract saying that while she was
a contractual employee, she was
to undergo a probationary period
was construed in her favor leading
to a conclusion that she had
indeed been regularized after her
continued employment after the
expiration of her probation.
Consequently, she may only be
dismissed pursuant to just or
authorized causes as provided for
under the Labor Code, which does
not include the
expiration ones contract
employment.
While the court held that he was
indeed illegally dismissed for lack
of basis of his termination, it was
held that he was not a regular
employee at the time of his
dismissal. As a seafarer, De la Cruz
was not covered by the
term regular employment as
provided for under Art. 280 of the
LC, pursuant to the cases of Brent
School v. Zamora and
Coyoca v. NLRC.
NO EMPLOYER-EMPLOYEE
RELATIONSHIP. NO ILLEGAL
DISMISSAL

Regardless of the designation an


employer may have conferred
upon an employees employment
status, an employee becomes
regularized after having
completed the probationary period
and allowed to work thereafter.

Seafarers are considered


contractual employees whose
rights and obligations are governed
primarily by the POEA Standard
Employment Contract for Filipino
Seamen (POEA Standard
Employment Contract), the Rules
and Regulations Governing
Overseas Employment, and by
Republic Act No. 8042, otherwise
known as The Migrant Workers
and Overseas Filipinos Act of 1995.
Well-entrenched doctrine that the
existence of such relationship is
ultimately a question of fact and
that findings of the LA and NLRC
shall be accorded not only respect
but even finality when supported
by substantial evidence. Four fold

CAs interpretation of Art


280: Length of service and
petitioners repeated act of
assigning respondent some
tasks to be performed did
not result to respondents
entitlement to the rights

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Tomas Lao Construction v. NLRC

Beta Electric Corp v. NLRC

surface occupants within the area


covered by the company's mineral
claims. Also tasked to perform liaison
work with several gov't agencies.
respondent was not required to
report to its office regularly. Received
a monthly fee of P3000 delivered to
him at his residence/local restaurant.
This arrangement lasted 11 years. He
requested company to register him
with the SSS but company denied.
Respondent employees alternately
worked for petitioners Tomas Lao
Corporation (TLC), Thomas and James
Developers(T&J) and LVM
Construction Corporation (LVM),
altogether informally referred to as
the Lao Group of Companies. Each
one of the companies would allow
the utilization of its employees by the
other two. The employees were
rehired after the completion of the
project or project phase to which
they were assigned. The employment
contracts expressly described the
construction workers as project
employees whose employments
were for a definite period, i.e the
completion of the project. The
workers refused to sign the
contracts, contending that such
designation was a scheme to prevent
them from being regularized.
Eventually, their services were
terminated. A complaint for illegal
dismissal was filed.
Petitioner was hired as clerk typist in
the company from December 1986 to
January 1987. However, her contract
was extended until June 1987.
Afterwhich, she was dismissed
without any due notice. The
company claims that she is just a

test: (1) Selection and


engagement; (2) Payment of wages
(3) power of dismisal (4) control
test: an employer-employee
relationship exists where the right
to control not only the end
achieved but also the manner and
means to be used in reaching that
end

The repeated re-hiring and the


continuing need for their services
over a long span of time have
undeniably made them regular
employees. The intermission
between their employment
periods when they were not paid is
not deemed separation from
services but merely a leave of
absence without pay until they are
reemployed. The contracts were a
scheme of petitioners to prevent
respondents from being
considered as regular employees.

and privileges of a regular


employee. Said provision is
not the yardstick for
employment because it
merely distinguishes
between 2 kinds of
employees for purposes of
determining the right of an
employee to certain
benefits

Where the employment of project


employees is extended long after
the supposed project has been
finished, the employees are
removed from the scope of project
employees and considered regular
employees.

The petitioner cannot rightfully say


that since the private respondent's
employment hinged from contract
to contract, it was ergo,
"temporary", depending on the
term of each agreement. Under
the Labor Code, an employment
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contractual worker, thus, not entitled


to any benefits.

Hanjin Heavy Industries & Const.


Co v. Ibanez

Villa v. NLRC

Petitioners in this case were


construction workersof Hanjin who
filed a complaint for illegal dismissal
after being laid-off
following Hanjins reduction of its
manpower due to the completion of
its projects. Petitioners assert that
they did not sign any employment
contract stating that they were
project employees.

Respondent NSC (steel mills) was


charged with nonregularization of
contractual employees. The issue
here is whether the employees were
casual or regular. Note that casual or
temporary employees are not
entitled to benefits enjoyed by
regular employees other than the
`parity on the security of tenure

may only be said to be temporary"


"where [it] has been fixed for a
specific undertaking the
completion of or termination of
which has been determined at the
time of the engagement of the
employee or where the work or
services to be performed is
seasonal in nature and the
employment is for the duration of
the season."
The court held that they were to
be considered as regular
employees. According to the
court, consent of the project
employee to be designated as such
is necessary. However, Hanjin
failed to adduce proof that the
petitioners signed employment
contracts to the effect that they
were project employees. In effect,
the court had to rely on the
doctrine that in illegal dismissal
cases, the employer has the
burden of proving with clear,
accurate, consistent and
convincing evidence that a
dismissal was valid and that absent
any other proof that the project
employees were informed of their
status as such, it will be presumed
that they are regular employees in
accordance with Clause 3.3(a) of
D.O. No. 19, Series of 1993.
The fact that petitioners worked
for NSC under different project
employment contracts for several
years cannot be made a basis to
consider them as regular
employees, for they remain
project employees regardless of
the number of projects in which
they have worked. Length of

Project employees - employees


who are hired for carrying out a
separate job, distinct from the
other undertakings of the
company, the scope and duration
of which has been determined and
made known to the employees at
the time of the employment, are
properly treated as project
employees and their services may
be lawfully terminated upon the
completion of a project.
The test to determine whether an
employee is a project employee as
provided for in Art. 280 is whether
or not the project employees were
assigned to carry out a "specific
project or undertaking," the
duration and scope of which
were specified at the time the
employees were engaged for that
project.
2 kinds of projects which a
business or industry may
undertake:
1. a particular job or undertaking
that is within the regular or usual
business of the employer company,
but which is distinct and separate,
and identifiable as such, from the
other undertakings of the

On Project Employment
Contracts: The nature of the
employment is determined
by the factors set by law,
regardless of any contract
expressing otherwise. Labor
contracts are imbued with
public interest and
therefore are subject to the

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clause.

William Uy Construction Corp v.


Trinidad

Respondent was driver of company's


service vehicle, dump truck and
transit mixer for 16 years. He signed
several employment contracts w the
company that identified him as a
project employee though he had
always been assigned to work on one
project after another with some
intervals. Petitioner terminated him
from work after it shut down
operations due to lack of projects but
respondent learned that although
petitioner opened a project in
Batangas, he was not hired for that
project. Petitioner argues that
respondent was a project
construction worker whose
employment was co-terminous with
the completion of specific company

service is not the controlling


determinant of the employment
tenure of a project employee.

NOT REGULAR EMPLOYEE

company.
2. a particular job or undertaking
that is not within the regular
business of the corporation. Such a
job or undertaking must also be
identifiably separate and distinct
from the ordinary or regular
business operations of the
employer. The job or undertaking
also begins and ends at
determined or determinable
times.

The TEST for distinguishing a


project employee from a regular
employee is whether or not he has
been assigned to carry out a
specific project or undertaking
with the duration and scope of his
engagement specified at the time
his service is contracted
Generally, length of service
provides a fair yardstick for
determining when an employee
initially hired on a temporary basis
becomes a permanent one BUT
this standard will not be fair if
applied to the construction
industry construction industry
cannot always guarantee work

police power of the State


(Art 1700, CC).
An employer is allowed by
law to reduce the work
force into a number suited
for the remaining work to
be done upon the
completion or proximate
accomplishment of the
project. However, the law
requires that, upon
completion of the project,
the employer must present
proof of termination of the
services of the project
employees at the nearest
public employment office. If
the employees services are
extended long after the
supposed project had been
completed, the employees
shall be considered regular
employees.
Company failed to satisfy
with DOLE 19 requirement
since it only submitted the
termination report covering
respondents last project at
the hearing before the LA
HOWEVER, BECAUSE
respondent did not allege he
had been illegally dismissed
after each of the projects for
which he had signed up for,
LA and NLRC were satisfied
with petitioner companys
compliance

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Maraguinot v. NLRC

Maranaw Hotels & Resort Corp v


CA

Mercado v NLRC

Brent School v. Zamora

projects.
Petitioners were employed by private
respondents on 18 July 1989 as part
of the filming crew. They requested
an increase in their salary pursuant to
the minimum wage. Accordingly, the
executive producer would only agree
to increase the salary once they sign
a blank employment contract. They
refused. Eventually, they were
terminated.

Oabel worked for Maranaw Hotels in


various capacities for more than a
year before she was assigned by said
company to MANRED. She
subsequently filed a petition for
regularization before the NLRC which
was later converted into a complaint
for illegal dismissal.
Petitioners were agricultural workers
utilized by private respondents in all
the agricultural phases of work on
the sugar land owned by the latter.
They claim that they were illegally
dismissed. LA held that petitioners
were not regular and permanent
workers of the private respondents,
for the nature of the terms and
conditions of their hiring reveal that
they were required to perform
phases of agricultural work for a
definite period of time after which
their services would be available to
any other farm owner.
Alegre was hired as athletic director
of the school with the specific
contract of 5 years. 3 months before
the expiration of the contract, he was
issued a notice of his termination.
Alegre claims that he is already a

They are regular employees, not


project employees.
JURISPRUDENCE: Lao Construction
v. NLRC. Although the case of Lao
involves the construction industry,
the same may be applied to the
motion-picture industry. No
substantial distinction exists
between the projects undertaken
in both industries. The raison d'
etre of both industries concern
projects with a foreseeable
suspension of work.
Oabel is a regular employee of
Maranaw Hotels.

The doctrine in Lao Constuction v.


NLRC applies to industries other
than that of construction provided
that such industry concerns
projects with a foreseeable
suspension of work.

Petitioners are project


employees/seasonal employees.
Their employment legally ends
upon completion of the project or
the season.

A project employee has been


defined to be one whose
employment has been fixed for a
specific project or undertaking, the
completion or termination of
which has been determined at the
time of the engagement of the
employee, or where the work or
service to be performed is seasonal
in nature and the employment is
for the duration of the season (as
in the present case).

When the employer determines


the nature of the tasks to be
performed by the employee, such
is considered as an aspect of the
process exercising control, which
can in turn serve as basis for
regular employments.

Alegre was properly terminated.


PD 850, impliedly acknowledged
the propriety of term
employment: it listed the "just
causes" for which "an employer
may terminate employment
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regular employee and cannot be


terminated. Note: the case happened
before the effectivity of the Labor
Code.

Lynvil Fishing Enterprises v.


Andres Ariola

Respondents in this case worked for


Lynvil as part of its fishing crew on
board on of its vessels. Said
employees were engaged on a per
trip or porviaje basis which
terminates at the end of each trip.
They were terminated due to their
involvement in an incident wherein
several tubs of the companys fish
were stolen. There was a contention
as to WON they were
regular or fixed-term employees,
considering that their porviaje
setup was based on a contract of
employment which they signed.

Phil Tobaco etc v. NLRC

2 groups of seasonal workers, the


Lubat group and the Luris group are
claiming separation benefits after the
closure and transfer of petitioners
tobacco processing supposedly due
to serious financial losses. The Lubat
group was not granted separation
pay by the petitioner as they had not
been given work during the
preceding year and, hence, were no

without a definite period," thus


giving rise to the inference that if
the employment be with a definite
period, there need be no just
cause for termination thereof if
the ground be precisely the
expiration of the term agreed
upon by the parties for the
duration of such employment.
Respondents, while validly
dismissed for their
involvement in the
aforementioned incident, were to
be considered as regular
employees. According to the
court, while their employment
contract provided that they were
to be engaged as fixed-term
employees, facts surrounding their
employment (constant rehiring at
the end of each trip for almost 10
years, etc.) support the conclusion
that their alleged fixed-term
employment was just so that Lynvil
could undermine their security of
tenure and that respondents were
forced to accede to such
conditions only because of
economic reasons. In effect, the
first condition for the validity of a
fixed-term contract was missing
since economic reasons vitiated
their consent.
Petitioners claim of serious
business losses was not
adequately proven so the last 2
sentences of Art. 283 must be
applied and the dismissed
employees of the Luris group must
be given their separation pay due
to closure or cessation of
operation of an establishment or
undertaking. The Court also held

2 conditions for the validity of a


fixed-contract agreement
between the employer and
employee:
(1) the fixed period of employment
was knowingly and voluntarily
agreed upon by the parties without
any force, duress, or improper
pressure being brought to bear
upon the employee and absent any
other circumstances vitiating his
consent; or
(2) it satisfactorily appears that the
employer and the employee dealt
with each other on more or less
equal terms with no moral
dominance exercised by the
former or
the latter.

Seasonal workers who are called to


work from time to time and are
temporarily laid off during offseason are not separated from
service in said period, but are
merely considered on leave until
reemployed. A seasonal worker is
considered in regular employment
in cases involving determination of
employer-employee relationship

The amount of separation


pay is based on two factors:
the amount of monthly
salary and the number of
years of service. While Book
6 of the LC does not
specifically define one year
of service, Arts. 283 and
284 both state in
connection with separation

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longer in its employ at the time it


closed its plant. The Luris group
received separation benefits but
apparently these were wrongly
computed as the management did
not consider of their service.

that the members of the Lubat


group were illegally dismissed. Re:
Separation Pay- one-half (1/2)
their respective average monthly
pay during the last season
respondents worked multiplied by
the number of years they actually
rendered service, provided that
they worked for at least six
months during a given year.

and security of tenure.

pay that a fraction of at


least six months shall be
considered one whole year.

Espina v. CA

MY San was to close business. Monde


purchased the company and
commenced its operations. All
former employees of MY San who
were terminated upon its closure and
who applied and qualified for
probationary employment (including
petitioners herein) started working
for Monde on a contractual basis for
6 months. Petitioners were
terminated subsequently on various
dates.

Petitioners were PROBATIONARY


EMPLOYEES (Art 281). While
petitioners were only probationary
employees who do not enjoy
permanent status, nonetheless,
they were still entitled to the
constitutional protection of
security of tenure. Their
employment may only be
terminated for a valid and just
cause or for failing to qualify as a
regular employee in accordance
with the reasonable standards
made known to them by the
employer at the time of
engagement and after being
accorded due process

As probationary employees, they


enjoyed only temporary
employment status
Terminable anytime
Employer could well decide if he
no longer needed the
probationarys service or his
performance fell short of
expectations, as a probationary
employee is one who, for a given
period of time, is under
observation and evaluation to
determine whether or not he is
qualified for permanent
employment.
During the probationary period,
the employer is given the
opportunity to observe the skill,
competence and attitude of the
employee to determine if he has
the qualification to meet the
reasonable standards for
permanent employment
Length of time is immaterial in
determining the correlative rights
of both employer and employee in
dealing with each other during said
period

Management prerogative as
long as performed in GOOD
FAITH

Robinson's Galleria v. Ranchez

Ranchez was a probationary


employee of petitioner Robinsons
Galleria for a period of 5 months. She

The haphazard manner in the


investigation of the missing cash,
which was left to the

There is probationary employment


when the employee upon his
engagement is made to undergo a

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10

Cathay Pacific Airways, Limited


v. Marin

Canadian Opportunities

underwent 6
weeks of training as a cashier before
she was hired. She reported to her
supervisor the loss of cash amounting
to P20,299.00 which she had placed
inside the company locker. She was
strip-searched but was found with
nothing. She acknowledged her
responsibility
and requested that she be allowed to
settle and pay the lost amount. The
management refused and instead,
reported the matter to the police. An
information for Qualified Theft was
filed against her. She was imprisoned
for two weeks. She filed for illegal
dismissal. Subsequently, Robinsons
sent Ranchez by mail a notice of
termination and/or notice of
expiration of probationary
employment.
Marin was hired as Reservation
Officer by Cathay Pacific Airways. He
was hired on April 6, 1992 under 6
months probationary period. On
October 2, 1992, he received a
termination letter from the company.
Marin claims that he was illegally
dismissed because there was no due
process.

determination of the
police authorities and the
Prosecutors Office, violated the
substantive and procedural due
process. Administrative
investigation was not conducted
by petitioner Supermarket.
Ranchez was constructively
dismissed by petitioner. It was
unreasonable for Robinsons to
charge her with abandonment for
not reporting for work upon her
release in jail.

trial period during which the


employer determines his fitness to
qualify for regular employment
based on reasonable standards
made known to him at the time of
engagement. Probationary
employees enjoy security of
tenure. They may only be
terminated for any of the
following: (1) a just or (2) an
authorized cause; and (3) when he
fails to qualify as a regular
employee in accordance with
reasonable standards prescribed
by the employer.

Respondent's employment was


not terminated during the period
of his probationary employment,
and that he was not extended a
regular employment by petitioner
Cathay on account of his
unsatisfactory work performance
during the probationary period.

Dalangin was a probationary

Dalangin was validly dismissed

The employment of a probationary


employee may only be terminated
either (1) for a just cause; or (2)
when the employee fails to qualify
as a regular employee in
accordance with the reasonable
standards made known to him by
the employer at the start of his
employment. The power of the
employer to terminate an
employee on probation is thus
subject to the following conditions:
(1) it must be exercised in
accordance with the specific
requirements of the contract; (2)
the dissatisfaction on the part of
the employer must be real and in
good faith, not prejudicial so as to
violate the contract or the law; and
(3) there must be no unlawful
discrimination in the dismissal.
The essence of a probationary

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Unlimited Inc v Dalangin

employee of Canadian
Opportunities who was dismissed
only 1 month into his probationary
employment after having been found
to be unfit and unqualified to
continue rendering his services to
said company. There was
thus a contention as to WON he was
given reasonable time by his
employer to prove that he possessed
the qualifications they were looking
for.

during his probationary period


since it is during this probationary
appointment when an employer is
given the opportunity to observe
the fitness of a probationer while
at work, and to ascertain whether
he would be a proper and efficient
employee 4 weeks was enough for
the company to assess
Dalangins fitness for the job to
which he was found wanting.
Thus, Canadian Opportunities was
not liable for illegal dismissal.

Cebu Stevedoring Co Inc. v.


Regional Director

Respondents were former employees


of the CCAS. The CCAS was abolished.
All the employees were absorbed by
the petitioner company with the
same positions that they held in
CCAS. Barely 5 and mos. later,
respondents were dismissed for
redundancy.

Respondents were not novices in


their jobs but experienced
workers. As regular employees,
private respondents may not be
dismissed and petitioner cannot
terminate their services except for
a just or authorized cause
provided by law and with
scrupulous observance of due
process requirements.

Tamson's Enterprises Inc v. CA &


Sy

4 days before completing her 6th


month of working in Tamsons, Ng
(Sales Project Manager) called
respondent to a meeting informing

NOT PROBATIONARY EMPLOYEE,


REGULAR

period of employment
fundamentally lies in the
purpose or objective of both the
employer and the employee during
the period, that while the
employer observes the fitness,
propriety and efficiency of a
probationer to ascertain whether
he is qualified for permanent
employment, the latter seeks to
prove to the former that he has the
qualifications to meet the
reasonable standards for
permanent employment.
The word probationary, as used
to describe the period of
employment, implies the purpose
of the term or period, but not
its length.
While Art 283 allows the employer
to terminate the employment of an
employee due to redundancy,
records fail to show that the
positions occupied by the private
respondents are Identical with
those presently existing in
petitioner's office. Furthermore,
petitioner kept private
respondents in its employ for
almost six months without raising
this issue.
Petitioner's submission that it is
suffering financial losses is
untenable since it appears that it
absorbed and employed for almost
six months, without any intimation
of supposed financial distress, the
majority of the former employees
of CCAS.
Probationary employment is
intended to afford employer an
opportunity to observe the fitness
of a probationary employee while

HOWEVER, standards for


fitness must be made
known to employee prior to
entering into contract of

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La Sallete of Santiago Inc v. NLRC

St. Paul College, Quezon City v.


Ancheta

her that her services would be


terminated due to inefficiency.
During her pre-employment
interview, Lee commented about her
good work experience and
educational background, and was
assured of a long term employment
with benefits. Throughout her
employment, she earnestly
performed her duties, had perfect
attendance, worked even during
brownouts and typhoons and would
often work overtime.
Javier worked for the sister
companies La Salette College, La
Salette High School, and La Salette of
Santiago, Inc. at different instances
as teacher, instructor (part-time and
full-time), assistant principal, and
principal. After serving as principal at
La Salette of Santiago, Inc. for one
year, she was extended an
appointment for another year. After
the expiration of the second year,
she was replaced. She filed for illegal
dismissal.
The spouses were hired by St. Paul
College as their teachers. They have
received several notices from the
school that they are not following
school policies when it comes to the
style of teaching and exams that the
school recommends.

at work, and to ascertain whether


he will become an efficient and
productive employee
At the same time, probationary
employee seeks to prove his
worth.
Term probationary implies the
PURPOSE of the term/period and
not its length

Javier had acquired security of


tenure as a teacher in the School
System of La Salette of Santiago,
Inc.,but not as a principal. Her
work as a teacher was intended to
be on a permanent basis. Her
appointment as principal was not.

Teachers who are appointed as


department heads or
administrative officials (e.g.
principal) do not normally, and
should not expect to, acquire a
second status of permanency, or
an additional or second security of
tenure as
such officer.

A reality we have to face in the


consideration of employment on
probationary status of teaching
personnel is that they are not
governed purely by the Labor
Code. The Labor Code is
supplemented with respect to the
period of probation by special
rules found in the Manual of
Regulations for Private Schools.

On the matter of probationary


period, Section 92 of these
regulations provides:Section 92.
Probationary Period. - Subject in all
instances to compliance with the
Department and school
requirements, the probationary
period for academic personnel
shall not be more than three (3)
consecutive years of satisfactory
service for those in the elementary
and secondary levels, six (6)
consecutive regular semesters of
satisfactory service for those in the
tertiary level, and nine (9)
consecutive trimesters of
satisfactory service for those in the

employment. No standards=
REGULAR EMPLOYEE. No
standards presented in this
case.

It is important that the


contract of probationary
employment specify the
period or term of its
effectivity. The failure to
stipulate its precise duration
could lead to the inference
that the contract is binding
for the full three-year
probationary period.
Therefore, the letters sent
by petitioner Sr. Racadio,
which were void of any
specifics cannot be
considered as contracts.
The closest they can
resemble to are that of

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tertiary level where collegiate


courses are offered on a trimester
basis.

informal correspondence
among the said individuals.
As such, petitioner school
has the right not to renew
the contracts of the
respondents, the old ones
having been expired at the
end of their terms.

TERMINATION OF EMPLOYMENT
General Concepts
Alahambra Industries Inc v NLRC

Pantoja v. SCA Hygiene Products


Corp

Coca-Cola Bottlers v. Valentina


Garcia

Rupisan was a salesman of Alhambra


who was placed under preventive
suspension for serious violations of
company policies. After he was
subsequently terminated, he filed a
complaint for illegal dismissal against
Alhambra. NLRC affirmed the LAs
findings that he was illegally
dismissed and ordered his
reinstatement.
Respondent informed petitioner of
its reorganization plan and offered
him a position at another mill under
the same terms and conditions of
employment in anticipation of the
eventual closure of Paper Mill No. 4
as part of respondents plan to phase
out the companys industrial paper
manufacturing operations due to
financial difficulties. Petitioner
rejected the respondents offer so he
was terminated & his position was
declared redundant. Petitioner claims
he was illegal dismissed.
Respondents argues that petitioner
voluntarily separated himself from
service instead of accepting
reassignment/transfer to another
position of equal rank and pay.
Coca-Cola hired Garcia as QC
Technician. Respondent became
regular employee. While petitioner
adopted some modification programs

Rupisan was not entitled to


reinstatement but
only to backwages.

The SC upheld the employers


exercise of its management
prerogative because it was done
for the advancement of its interest
and not for the purpose of
defeating the lawful rights of an
employee. Respondents right of
management prerogative was
exercised in good faith and there
was no evidence to prove Paper
Mill No. 4 continued its
operations.

As long as no arbitrary or malicious


action on the part of an employer
is shown, the wisdom of a business
judgment to implement a cost
saving device is beyond this courts
determination. After all, the free
will of management to conduct its
own business affairs to achieve its
purpose cannot be denied.

PROCEDURAL DUE PROCESS


VIOLATED IN THIS CASE

BUT: In dismissing an employee,


employer has the burden of
proving that the dismissed worker
has been served TWO NOTICES

Court admits that abandonment

Work reassignment of an
employee as a genuine business
necessity is a valid management
prerogative.

Art 277 and Sec 2 Rule XXII


Book V of Omnibus Rules
Implementing LC
Standards of due process

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Mansion Printing Center v.


Bitara

which resulted to increased efficiency


in production, work load of
employees were substantially
reduced and some of the employees
became redundant. Petitioner
informed respondent that she would
be transferred to Iloilo but
respondent refused

was present and a valid ground for


termination

The first to inform the employee of


the particular acts or omissions for
which the employer seeks his
dismissal and
-Must state that employer seeks
dismissal for the act/omission
charged against the employee
(otherwise, the notice does not
comply with the rules)
RATIONALE: The notice will
afford the employee an
opportunity to avail all defenses
and exhaust all remedies to refute
the allegations hurled against him
for what is at stake is his very life
and limb his employment.
Otherwise, notice may be
disregarded
The second to inform the
employee of his employers
decision to terminate him

Mansion engaged the services of


Bitara as a helper (kargador). He was
later promoted as the companys sole
driver. Mansion closely monitored
the attendance of respondent. They
noted his habitual tardiness and
absenteeism. Mansion issued a
Memorandum requiring respondent
to submit a written explanation why
no administrative sanction should be
imposed on him for his habitual
tardiness.
He continued to disregard
attendance policies.
Another Memorandum (Notice to
Explain) was issued requiring
respondent to explain why his
services should not be
terminated. He did not submit any
explanation and, thereafter, never
reported for work.

That the recent absences were


unauthorized were satisfactorily
established by petitioners.
Mansion has repeatedly called the
attention of respondent
concerning his habitual tardiness.
These attendance delinquencies
may be characterized as habitual
and are sufficient justifications to
terminate the complainants
employment.

Valid dismissal = compliance with


both substantive and procedural
aspects. Procedural
due process entails compliance
with the two-notice rule in
dismissing an
employee, to wit:
(1) the employer must inform the
employee of the specific
acts or omissions for which his
dismissal is sought; and
(2) after the employee
has been given the opportunity to
be heard, the employer must
inform him of the
decision to terminate his
employment.

The notices have been validly


served. Bitara just refused to
acknowledge receipt thereof.

*Gross negligence - want


of care in the performance
of ones duties; *Habitual
neglect - repeated failure
to perform ones duties for
a period of time, depending
upon the circumstances.

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Another Memorandum (Notice of


Termination) upon him informing
him that the company found him
grossly negligent of his duties, for
which reason, his services were
terminated.
Golden Ace Builders & Azul v.
Talde

Talde worked as a carpenter in the


company. He was dismissed due to
absence of construction jobs
available. Upon complaint to the
Labor arbiter, it ruled in favor of
respondent and ordered his
immediate reinstatement without
loss of seniority rights and other
privileges, and with payment of full
backwages. Respondent submitted,
however, on May 16, 2001 a
manifestation to the Labor Arbiter
that actual animosities existed
between him and petitioners and
there had been threats to his life and
his familys safety, hence, he opted
for the payment of separation pay.

The basis for the payment of


backwages is different from that
for the award of separation pay.
Separation pay is granted where
reinstatement is no longer
advisable because of strained
relations between the employee
and the employer. Backwages
represent compensation that
should have been earned but were
not collected because of the unjust
dismissal. The basis for computing
backwages is usually the length of
the employees service while that
for separation pay is the actual
period when the employee was
unlawfully prevented from
working.

Under the doctrine of strained


relations, the payment of
separation pay is considered an
acceptable alternative to
reinstatement when the latter
option is no longer desirable or
viable. On one hand, such
payment liberates the employee
from what could be a highly
oppressive work environment. On
the other hand, it releases the
employer from the grossly
unpalatable obligation of
maintaining in its employ a worker
it could no longer trust.

Clearly then, respondent is entitled


to backwages and separation pay
as his reinstatement has been
rendered impossible due to
strained relations. As correctly
held by the appellate court, the
backwages due respondent must
be computed from the
time he was unjustly dismissed
until his actual reinstatement, or
from February 1999 until June 30,
2005 when his reinstatement was
rendered impossible without fault
on his part.
Functional Inc. v. Samuel C.
Granfil

Granfil was a photocopying machine


operator for Functional Inc. before he

Granfil was illegally dismissed by


Functional by

The
burden of proof is upon the

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Pepsi-Cola Product Phil Inc v EV


Santos

Jackqui Moreno v. San Sebastian


College

was dismissed for allegedly accepting


money from a
customer. There was a contention as
to whether Granfil had the burden of
proof to prove the illegality of the
dismissal or Functional Inc. had the
burder of proof to prove the validity
of the dismissal.
Respondent was dismissed for
serious misconduct which resulted in
losses to petitioners amounting to
P795,454.54. Respondent filed a case
for illegal dismissal. LA dismissed and
held that petitioners failed to
satisfactorily prove the serious
charges against respondent. The only
relevant evidence adduced by
petitioners was the notice of
termination which narrated what
happened during the administrative
investigation.

failing to discharge the burden


that it legally terminated his
services.

employer to show that the


employees termination
from service is for a just and valid
cause.

Petitioner failed to satisfactorily


prove the serious charges against
respondent.

In an illegal dismissal case, the


onus probandi rests on the
employer to prove that its
dismissal of an employee is for a
valid cause.
As to whether a trial was
necessary, the Court held that it is
not violative of due process for the
LA to resolve a case solely on the
position papers, affidavits or
documentary evidence submitted
by the parties.

The holding of a formal


hearing or trial is
discretionary with the Labor
Arbiter and is something
that the parties cannot
demand as a matter of
right. The requirements of
due process are satisfied
when the parties are given
the opportunity to submit
position papers wherein
they are supposed to attach
all the documents that
would prove their claim.

Petitioner was a full-time college


faculty member offered
chairmanship position. Reports and
rumors of Morenos unauthorized
external engagements allegedly
began to circulate and it reached SSCR. The schools HR Dept conducted a
formal investigation. She was found
to have been teaching elsewhere
without prior authorization. She
explained she needed extra money
for her mother and sister so she took
on extra lectures in other colleges.

PENALTY TOO HARSH

No worker shall be dismissed from


employment without the
observance of substantive and
procedural due process

Art 282 (a) will ful


disobedience of employers
lawful orders as a just cause
for termination of
employment envisages the
concurrence of at least 2
requisites
(1) The employees assailed
conduct must have been
willful or intentional, the
willfulness being
characterized by a
wrongful and perverse
attitude FAILED TO
PROVE THIS IN THIS CASE
(2) The order violated must
have been reasonable,
lawful, made known to the
employee and must pertain
to the duties which he has

Court finds that Moreno has


indeed committed misconduct
against respondent. HOWEVER,
said misconduct falls below the
required level of gravity that would
warrant dismissal as a penalty

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been engaged to discharge


Nagkakaisang Lakas ng
Manggagawa sa Keihin v. Keihin

Globe Telecom v. Crisologo

Valenzuela was a production


Valenzuela deserves dismissal. She The circumstances surrounding the
associate in Keihin. Due to the recent committed serious misconduct.
commission of violations are to be
cases of theft and robbery of
Valenzuela was not even on her
taken into consideration in the
company property, Keihin adopted a
second year of service with Keihin
imposition of penalty.
search procedure of all employees
when the incident of theft
before leaving the company
occurred. Keihin was dealing with
premises. Valenzuela was about to
several cases of theft, vandalism,
leave the office when she saw a
and loss of company and
packing tape and placed it in her bag, employees property when the
thinking of using it for her own
incident involving Helen
personal needs. Upon search, the
transpired.
lady guard on duty found the tape in
Valenzuelas bag, confiscated the
same, and submitted an incident
report to the Guard-in-Charge, who
in turn submitted a memo to the HR
Dept. A show-cause notice was sent
to Valenzuela, further stating that
theft and robbery warrant the
penalty of dismissal. She was
subsequently directed to explain in
writing why no disciplinary action
should be taken against her. She was
terminated. She filed for illegal
dismissal.
TERMINATION OF EMPLOYMENT BY EMPLOYEE
Petitioner, a manager of Globe, took
Coercion exists when there is a
Moreover, the resignation letter
a leave because of her miscarriage.
reasonable or well-grounded fear
was submitted by respondent and
After a week-long absence,
of an imminent evil upon a person was accepted by Globe on April 12,
respondent reported back to work on or his property or upon the person 2002. This fact alone
April 12, 2002. On the same day, she
or property of his spouse,
completely negated her claim that
tendered her resignation letter
descendants or ascendants. No
petitioners coerced her to resign
explaining that she was advised by
such situation existed in this case.
on April 30, 2002. Indeed, how
her doctor to rest for the duration of
An employee of respondents
could she have been forced to
her pregnancy. She also requested
accomplished educational
resign on that date when she had
permission to exhaust her unused
background and professional
already tendered her resignation
leaves until the effective date of her
standing will not easily relinquish
more than two weeks earlier?
resignation on May 30, 2002. Globe
her legal rights unless she intends
accepted her resignation. The
to. Respondents resignation letter
petitioner claims that she was forced without doubt proved petitioners
to resign by the company through
assertion that she voluntarily
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the circumstances that she faced.

resigned from her job.

Nationwide Security and Allied


Services v. Valderama

Valderama was one of Nationwides


security guards who filed a complaint
for constructive dismissal against the
agency after having been placed on
floating status for more than 6
months. Nationwide, however,
claimed that Valderama
voluntarily resigned from work after
having claimed his cash bond and fire
arm
deposit.

The burden of proof of proving


voluntary resignation is incumbent
upon the employer.

Bilbao v. Saudi Arabian Airlines

Bilbao was a flight attendant


assigned at the Manila Office. There
was memo from management
regarding the transfer of 10 FAs from
Manila to Jeddah, including Bilbao.
She initially complied with the
transfer order and proceeded to
Jeddah for her new assignment but
on soon resigned and relinquished
her post through a resignation letter.
She executed and signed an
Undertaking similar to that of a
Receipt, Release and Quitclaim
wherein she acknowledged receipt of
a sum of money as full and complete
end-of-service award with final
settlement and have no further
claims whatsoever against Saudi
Arabian Airlines.

Valderama did not voluntarily


resign but was constructively
dismissed. According to
the court, should an employer
interposed the defense of
resignation, it is incumbent upon
them to prove that an employeed
indeed voluntarily resigned from
employment. In this case,
Nationwide failed to discharge its
burden of proving that Valderama
voluntarily resigned by not being
able to present his resignation
letter or
explain why Valderama was still
being required to report to its
office even
after he had allegedly resigned.
Bilbaos resignation letter and
undertaking that evidenced her
receipt of separation pay, when
taken together with her
educational attainment and the
circumstances surrounding the
filing of the complaint for illegal
dismissal, comprise substantial
proof of Bilbaos voluntary
resignation.

Azcor v. NLRC

Respondent worked for Azcor as a

ILLEGALLY DISMISSED. No

Burden of proof that employee

Resignation is the voluntary act of


an employee who is in a situation
where one believes that personal
reasons cannot be sacrificed in
favor of the exigency of the
service, and one has no other
choice but to dissociate oneself
from employment. It is a formal
pronouncement or relinquishment
of an office, with the intention of
relinquishing the office
accompanied by the act of
relinquishment. As the intent to
relinquish must concur with the
overt act of relinquishment, the
acts of the employee before and
after the alleged resignation must
be considered in determining
whether he or she, in fact,
intended to sever his or her
employment.

As to the quitclaim/waivers:
not all waivers and
quitclaims are invalid as
against public policy. There
are legitimate waivers and
quitclaims that represent a
voluntary and reasonable
settlement of workers
claims which should be
respected by the courts as
the law between the
parties.

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ceramics worker for more than 2


years (P50 was deducted from his
daily salary without informing him of
the reason). Upon his doctors
recommendation, respondent
verbally requested to go on sick leave
due to bronchitis due to harmful
ceramic dust he inhales at his job.
Respondent went back to Azcor to
resume work but he was not
entertained. Apparently Azcor had
closed down and they told him he
was to be transferred to the new
company. He returned another 5
times to no avail. Petitioners claim he
resigned.

A' Prime Security Services v.


NLRC

Ma. Socorro Mandapat v. Add


Force Personnel Services

resignation.

was not illegally dismissed lies with


the employer

To constitute resignation, it must


be unconditional and with the
intent to operate as such. There
must be INTENTION TO
RELINQUISH a portion of the term
of office accompanied by an act of
relinquishment resignation
letters presented indicate that
they were drafted without his
knowledge (written in English)
IN THIS CASE: Capulso signified his
desired to resume work after
recuperating negates any intention
to relinquish his job

Moreno was hired as security guard


The resignation letter appears to
for a year by the Sugarland Security
have been written and submitted
Services, Inc., a sister company of
at the instance of petitioner. Its
APrime. He was rehired as a security form is of the companys and its
guard on by APrime and was
wordings are more of a waiver and
assigned to the US Embassy. He was
quitclaim. The supposed
forced by petitioner to sign new
resignation was not acknowledged
probationary contracts of
before a notary public.
employment for six (6) months.
Eventually, his employment was
terminated. APrime adduced as
evidence a resignation letter
purporting to have been submitted
by Moreno.
Termination of Employment by Employer
Respondent claims that during the
Upon perusal of the records of this
five-month stint as sales manager of
case, we find no evidence to
the petitioner Mandapat, she failed
support discrimination which led
to close a single deal or contract with to constructive dismissal. We find
any client. In addition, petitioner
that there was no act of
issued several proposals to clients
discrimination committed against
which were either grossly
petitioner that would render her
disadvantageous to respondent or
employment unbearable.
disregarded the clients budget
Preventive suspension may be

Petitioners never dealt with


Capulso openly and in good faith
nor was he informed of the
developments within the
company (i.e. his transfer to FP
and the closure of Azcors
operations)
=TOTALITY OF EVIDENCE points to
a veiled attempt by petitioners to
deprive Capulso of what he had
earned through hard labor by
taking advantage of his low level of
education and confusing him as to
whom his true employer was
Should the employee elect to
terminate the employer-employee
relationship without just cause,
he/she shall observe the provisions
of the law (Article 285 (a), LC).

Constructive dismissal exists when


an act of clear discrimination,
insensibility or disdain by an
employer has become so
unbearable to the employee
leaving him with no option but to
forego with his continued
employment.
When preventive suspension

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ceiling. These infractions were


contained in a show-cause notice
sent to petitioner on 23 February
2004, directing her to explain why
she should not be disciplined for
gross and habitual neglect of duties
and willful breach of trust.
Petitioner was also preventively
suspended and was asked to turn
over pending tasks and to leave the
office premises. Petitioner filed a
complaint for constructive dismissal
with the labor arbiter.

legally imposed against an


employee whose alleged violation
is the subject of an investigation.
The purpose of his suspension is to
prevent him from causing harm or
injury to the company as well as to
his fellow employees.

exceeds the maximum period


allowed without reinstating the
employee either by actual or
payroll reinstatement or when
preventive suspension is for
indefinite period, only then will
constructive dismissal set in.

Yabut v. MECO

Yabut worked for Meralco before he


was dismissed for serious misconduct
after having been involved in a meter
tampering and illegal electric
connection incident in his own
residence. The termination of his
services led to his
filing of an illegal dismissal complaint
against Meralco.

As a measure of self-protection
against acts inimical to its interest,
a company has the right to dismiss
its erring employees. An employer
cannot be
compelled to continue employing
an employee guilty of acts inimical
to the employers interest,
justifying loss of confidence in him.

Alert Security& Investigation


Agency v. Saidali Pasawilan

Respondents were all employed by


petitioner as security guards. They
filed a complaint for money claims
because they were underpaid.
Because of this they were relieved
from their posts and not given
assignments for 6 months. They filed
a complaint for illegal dismissal.
Petitioners deny that they dismissed
the respondents. They claimed that
respondents were transferred to new
posts but respondents failed to
report at their new post, continued
to loiter at their previous post and
tried to convince the other guards to

Yabut was validly dismissed by


Meralco as factual findings of the
lower courts as affirmed by the SC
as to his involvement in the meter
tampering and illegal electric
connection issue support
his separation from service
pursuant to a just cause under Art.
282 of the Labor Code. According
to the SC, the dismissal of a
dishonest employee is to the best
interest
not only of the management but
also of labor.
Respondents were illegally
dismissed. Filing a legitimate
complaint for money claims
against the employer is not a valid
ground for termination.

The Court recognizes the right of


an employer to transfer employees
in the interest of the service. This
exercise is a management
prerogative which is a lawful right
of an employer. This right
however, has limitations. In
particular, the employer must be
able to show that the transfer is
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.

Although the Court


recognizes the right of
employers to shape their
own work force, this
management prerogative
must not curtail the basic
right of employees to
security of tenure. There
must be a valid and lawful
reason for terminating the
employment of a worker.
Otherwise, it is
illegal.
Bascon v. CA: The

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file complaints against petitioner


company

Mapili v. Phil Rabbit Bus Lines

Company's field inspector found


petitioner, a bus conductor for the
company, giving a free ride to a the
wife of an ex employee. It was found
that he had given out 2 free rides in
the past and was duly penalized for
them. He was subsequently
dismissed. Petitioner argues that he
was illegally dismissed as such
violations were trivial in nature and
dismissal was grossly
disproportionate to the infraction.

Not illegally dismissed. Dismissal


was for just cause (breach of trust
and confidence) and penalty was
not disproportionate to the
infraction.

Petitioner's position is imbued with


trust and confidence because it
involves handling of money and
failure to collect the proper fare
from the riding public constitutes a
grave offense, which justifies his
dismissal. Moreover, petitioner's
series of irregularities (he had done
this twice before) when put
together; may constitute serious
misconduct.

Antonio Aboc v. Metrobank

Aboc works for Metrobank as a loans


clerk. He was given merit increases
and awarded promotions during his
employment because of his highly
satisfactory performance during his
nine years of employment. He
received an inter-office letter
requiring him to explain in writing
the charges that he had actively
participated in the lending activities
of his immediate supervisor, Chua.
This was later on proven to be true.
Metrobank required Aboc to submit
a written explanation why he should
not be dismissed. Aboc was
dismissed on the ground of serious
misconduct and breach of trust and
confidence.

Metrobanks evidence clearly


shows that the acts of Aboc in
helping Chua organize the CNRI
and FFA credit unions and in the
operations thereof constituted
serious misconduct or breach of
trust and confidence. Abocs active
participation highly irregular and
clearly in conflict with Metrobanks
business. He didnt even inform
the bank.

ART. 282. TERMINATION BY


EMPLOYER. - An employer may
terminate an employment for any
of the following causes:

employers power to
dismiss must be tempered
with the employees right to
security of tenure.
Although petitioner already
suffered corresponding
penalties for his
misconduct, those
infractions are still relevant
and may be considered in
assessing his liability for his
present infraction. The fact
that petitioner was in the
company for 8 years (and
that he was a member of
the company's labor union)
was not a mitigating
circumstance but
aggravated his liability--he
should have known it was
company policy that before
allowing family members of
employees to avail of free
rides, permission must first
be secured.

(a) Serious misconduct or willful


disobedience by the employee
of the lawful orders of his
employer or representative in
connection with his work;
- The burden of proof rests on the
employer to show that the
dismissal was for a just cause or
authorized cause, which should
be proved by substantial evidence.

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Nissan Motors Phil Inc v.


Victorino Angelo

Victorino Angelo was hired as a


payroll staff. Due to his frequent
absences, he was not able to do his
job which affected hundreds of
employees who did not receive their
salary in time. Due to this, he was
suspended by the company. Angelo
filed a complaint for illegal
suspension to the Labor Arbiter.

One of the just causes enumerated


in the Labor Code is serious
misconduct. Misconduct is
improper or wrong conduct. It is
the transgression of some
established and definite rule of
action, a forbidden act, a
dereliction of duty, willful in
character, and implies wrongful
intent and not mere error in
judgment. Such misconduct,
however serious, must
nevertheless be in connection with
the employee's work to constitute
just cause for his separation.

Lores Realty Enterprises Inc v.


Pacia

Pacia was an Assistant Manager of


Lores Realty who was dismissed for
willful disobedience after she
hesitated to prepare
several checks as ordered by her
superiors because she knew that the
companys
accounts did not contain enough
funds to cover said checks.

Pacia was not guilty of


insubordination. According to the
court, Pacia was motivated by
honest and well
intentioned reasons since
protecting the company from
liability under the
Bouncing Checks Law was
foremost in her mind. Her act
therefore, was not
wrongful or willful.

For misconduct or improper


behavior to be a just cause for
dismissal, (a) it must be serious; (b)
it must relate to the performance
of the employee's duties; and (c) it
must show that the employee has
become unfit to continue working
for the employer. Going through
the records, this Court found
evidence to support the allegation
of serious misconduct or
insubordination. Petitioner claims
that the language used by
respondent in his LetterExplanation is akin to a manifest
refusal to cooperate with company
officers, and resorted to conduct
which smacks of outright
disrespect and willful defiance of
authority or insubordination. The
misconduct to be serious within
the meaning of the Labor Code
must be of such a grave and
aggravated character and not
merely trivial or unimportant.
The offense of willful disobedience
requires
the concurrence of 2 requisites:
(1) the employee's assailed
conduct must have
been willful, that is characterized
by a wrongful and perverse
attitude; and
(2) the order violated must have
been reasonable,
lawful, made known to the
employee and must pertain to the
duties which he had
been engaged to discharge.

Petitioner also dismissed


respondent because of
gross or habitual
negligence. Neglect of duty,
to be a ground for dismissal,
must be both gross and
habitual. In finding that
petitioner was able to
adduce evidence that would
justify its dismissal of
respondent, the NLRC
correctly ruled that the
latter's failure to turn over
his functions to someone
capable of performing the
vital tasks which he could
not effectively perform or
undertake because of his
heart ailment or condition
constitutes gross neglect.

Going through the records,


this Court found evidence to
support the allegation of
serious misconduct or
insubordination. Petitioner
claims that the language
used by respondent in his
Letter-Explanation is akin to
a manifest refusal to
cooperate with company
officers, and resorted to
conduct which smacks of
outright disrespect and
willful defiance of authority
or insubordination. The
misconduct to be serious
within the meaning of the
Labor Code must be of such

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National Book Store v. CA

Part of respondents' job is to count


the earnings of SM North-NBS under
a watcher and following a rigorous
procedure. Before being deposited,
the money found to be missing a
certain amount. They were dismissed
for gross neglect of duty and loss of
confidence. LA: Although private
respondents were afforded due
process before being dismissed, their
dismissal was not founded on valid
and justifiable grounds as provided
under Art. 282 LC.

Petitioners were illegally


dismissed. No proof that private
respondents were even remotely
negligent of their duties, and even
if they were, it cannot be
considered as habitual. No willful
breach of confidence in the instant
case as petitioners failed to
establish with certainty the facts
upon which it could be based.

Gross negligence has been defined


as the want or absence of or failure
to exercise slight care or diligence,
or the entire absence of care. It
evinces a thoughtless disregard of
consequences without exerting any
effort to avoid them. Significantly,
in order to constitute a just cause
for the employees dismissal, the
neglect of duties must not only be
gross but also habitual. Thus, the
single or isolated act of negligence
does not constitute a just cause for
the dismissal of the employee.

PNB v Dan Padao

Padao was hired by PNB as a clerk.


He was later designated as a credit
investigator in an acting
capacity. He was appointed regular
Credit Investigator III, and was
ultimately promoted to the position
of Loan and Credit Officer IV. A
complaint reached the Commission
on Audit that anomalous loans were
being granted by its officers. The
credit standing of the loan applicants
was fabricated, allowing them to
obtain larger loan portfolios from
PNB. These borrowers eventually
defaulted on the payment of their
loans, causing PNB to suffer millions
in losses. Padao was administratively
charged with Dishonesty, Grave
Misconduct, Gross Neglect of Duty,
Conduct Prejudicial to the Best
Interest of the Service, grounded on
his having allegedly presented a
deceptively positive status of the
business, credit standing/rating and
financial capability of loan applicants.

Padaos repeated failure to


discharge his duties as a credit
investigator of the bank amounted
to gross and habitual neglect of
duties under Article 282 (b) of the
Labor Code. He not only failed to
perform what he was employed to
do, but also did so repetitively and
habitually, causing millions of
pesos in damage to PNB.

Neglect of the employee's duties


must be sufficiently proven to be
gross and habitual in order that
this may constitute a valid ground
for dismissal.

a grave and aggravated


character and not merely
trivial or unimportant.
Loss of trust and confidence
to be a valid ground for
dismissal must be based on
a willful breach of trust and
founded on clearly
established facts. A breach
is willful if it is done
intentionally, knowingly and
purposely, without
justifiable excuse, as
distinguished from an act
done carelessly,
thoughtlessly, heedlessly or
inadvertently.
Gross negligence connotes
want of care in the
performance of ones
duties, while habitual
neglect implies repeated
failure to perform ones
duties for a period of time,
depending on the
circumstances.

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Jumad v. Hi Flyer Food

MECO v. Ma. Luisa Beltran

PNB found Padao guilty of gross and


habitual neglect of duty and ordered
him dismissed from the bank.
Petitioner was area manager for KFC
branches in 4 cities. Upon audit
conducted, 3 branches were found to
have irregularities (rodent
infestation, defective machinery and
cash shortages (62k)). Jumuad
explains she had no fault in the
incidents, that she had already taken
steps to address the issues and that
she was busy dealing with the other
branches. Company sent her a Notice
of Charges seeking to hold her
accountable for the incidents and
was eventually terminated, despite
her explanations.

Beltran was employed by MERALCO


as Senior Branch Clerk. While she was
working overtime on a Saturday, she
received cash from Collection Route
Supervisor Marcos, which the latter
received from customer Chang in
payment of the latters electric bill in
lieu
of a returned check earlier issued.
She issued Auxiliary Receipt which
she post-dated (the following

Jumuad NOT ILLEGALLY


DISMISSED. Dismissal justified on
the ground for breach of trust and
confidence but not for
gross/habitual neglect of duty.

There were no sufficient grounds


to warrant Beltrans dismissal.
Negligence
has been established. But Beltrans
simple negligence is not sufficient
to warrant separation from
employment. No concrete
evidence has been adduced by
MERALCO to prove such.
Moreover, her simple negligence
did not result in any loss to

- Gross negligence connotes want


or absence of or failure to exercise
slight care or diligence or the
entire absence of care; thoughtless
disregard of consequences without
exerting any effort to avoid them.
To be a ground for removal, the
neglect of duty must be both gross
and habitual. - Breach of trust and
confidence, as a just cause for
termination of employment is
premised on the fact that the
employee holds a position of trust
and confidence. Managerial
employees natural hold such
positions. As long as there is some
basis for such loss of confidence, a
managerial employee may be
dismissed. The finding of guilt or
innocence in a charge of gross and
habitual neglect of duty does not
preclude the finding of guilt or
innocence in a charge of breach of
trust and confidence. Management
has the prerogative to discipline its
employees and to impose
appropriate penalties on erring
workers pursuant to company rules
and regulations.
To constitute a ground for a valid
dismissal, negligence must be gross
and habitual. Simple negligence,
which does not cause any loss or
damage, is not a valid ground for
dimissal.

Jumuad was a managerial


employee in this case
holding a position of trust
and confidence. And
although she was not
involved in the incidents,
based on the principal of
respondent superior (or
command responsibility
alone) Jumuad may be
made liable. Jumuad
willfully breached her duties
as to be unworthy of the
trust and confidence of the
company.

Gross negligence is the want


of even slight care, acting or
omitting to act in a situation
where there is duty to act,
not inadvertently but
willfully and intentionally,
with a conscious
indifference to
consequences insofar as
other persons may be
affected. Habitual neglect,

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Lima Land v. Cuevas

Monday) to show that it


was an accommodation, an accepted
practice in the office. She placed the
money and the original auxiliary
receipt inside her drawer underneath
all the other files. She was only able
to remit the said payment after
almost 4 months. A memorandum
was sent to her, placing her under
preventive suspension pending the
investigation of the incident.
MERALCO considered her acts as
misappropriation or withholding of
company funds. Beltran was
terminated.

MERALCO.

on the other hand,


connotes repeated failure
to perform ones duties for
a period of time, depending
upon the circumstances.

Lima entered into several lease


agreements known as arriendo
contracts with different persons
whereby [the former transferred to
the latter] its right to harvest
[coconuts as well as other fruits
planted on the lands it owned] in
consideration of certain monetary
equivalent. TIn February 2000,
irregularities in [the] arriendo
collections were discovered.
Petitioners formed an investigating
panel to conduct a thorough
investigation on the status of the
collections. The initial findings of the
investigating panel revealed
fraudulent activities and irregularities
committed by the Private
Respondent relative to the Company
funds. Consequently, Private
Respondent was served with a notice
to explain and was placed under
preventive suspension on May 22,
2002. She was, thereafter, ordered to
turn over all documents and keys in
her possession to Mrs. Venus Quieta.
Private Respondent filed a Complaint

The loss of trust and confidence


must be based not on ordinary
breach by the employee of the
trust reposed in him by the
employer, but, in the language of
Article 282 (c) of the Labor Code,
on willful breach. A breach is
willful if it is done intentionally,
knowingly and purposely, without
justifiable excuse, as distinguished
from an act done carelessly,
thoughtlessly, heedlessly or
inadvertently. It must rest on
substantial grounds and not on the
employers arbitrariness, whims,
caprices or suspicion; otherwise,
the employee would eternally
remain at the mercy of the
employer. There must, therefore,
be an actual breach of duty
committed by the employee which
must be established by substantial
evidence.

The burden of proof required in


labor cases must be amply
discharged. In this case, the
supposed function of respondent
monitoring duties and activities of
other employees is not
subsumed in what petitioners
claim as respondent's duties which
are (a) to manage, direct and
control record-keeping and
financial reportorial requirements;
(b) to ensure the accuracy and
integrity of all financial reports; (c)
to be responsible for the funds
management and financial
planning activities of the company;
and (d) to manage the
disbursement of funds. Moreover,
logic dictates that the monitoring
of the duties and activities of the
employees who are reporting at
the Batangas site would fall on the
person appointed to oversee the
operations of the company in that
area. In the present case, the
Batangas site where the arriendo
collections were made was

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with the Labor Arbiter for illegal


suspension, illegal dismissal, and
non-payment of salaries, holiday pay,
service incentive leave pay and 13th
month pay

managed by an estate manager in


the person of one Jonas Senia.

Elmer Lopez v. Keppel Bank Phil

Lopez was a Branch Manager of


Keppel Bank before he was dismissed
after disregarding the banks order to
not issue one of their clients 2 POs.
He subsequently filed a complaint for
illegal dismissal.

Lopez was guilty of loss of


confidence and trust for issuing
said POs against the banks direct
orders and was validly dismissed.
According to the court, as
branch manager, Lopez clearly
occupied a "position of trust" since
his stay in the service depended on
the employer's trust and
confidence in him
and on his managerial services.
Due to his blatant disregard of the
banks instructions, it became
apparent that they cannot in the
future trust Lopez as a manager to
follow directives from higher
authorities on business policy and
directions and that the bank can
be placed at risk if this kind of
managerial attitude will be
repeated, especially if it
becomes an accepted rule among
lower managers.

Guidelines for the application of


loss of confidence as provided in
the case of Nokom v. NLRC:
(1) loss of confidence, should not
be simulated;
(2) it should not be used as a
subterfuge for causes which are
improper, illegal or unjustified;
(3) it may not be arbitrarily
asserted in the face of
overwhelming evidence to the
contrary; and
(4) it must be genuine, not a mere
afterthought to justify an earlier
action taken in bad faith.

Cathedral School of Technology


v. NLRC

Petitioner school began receiving


complaints' from students and
employees about private
respondent's difficult personality and
sour disposition at work. Petitioner
informed private respondent of the

There was valid cause for her


dismissal.

The reason for which private


respondent's services were
terminated, namely, her
unreasonable behavior and
unpleasant deportment in dealing
with the people she closely works

Loss of confidence should


ideally apply only to:
(1) cases involving
employees occupying
positions of
trust and confidence
(managerial
employees, i.e., those
vested with the powers and
prerogatives to lay down
management policies
and/or
to hire, transfer, suspend,
lay-off, recall, discharge,
assign or discipline
employees, or effectively
recommend such
managerial actions.), or
(2) situations where the
employee is routinely
charged with the care and
custody of
the employer's money or
property (cashiers,
auditors, property
custodians, or those who, in
the normal and routine
exercise
of their functions, regularly
handle significant amounts
of money or property).

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Lim v. NLRC

St. Luke's Med Center v. Fadrigo

negative reports received by her


office regarding the latter's frictional
working relationship with co-workers
and students and reminded private
respondent about the proper
attitude and behavior that should be
observed in the interest of peace and
harmony in the school library. In
anger, she resigned and stormed out
of the office in discourteous
disregard and callous defiance of
authority. Petitioner sent a letter
accepting her resignation.
Petitioner was a Staff Accountant
working for Pepsi (private
respondent). Petitioner's overall
performance was subjected to the
company's evaluation rating system.
Under the old system, she first
garnered ratings of "superior" then
later on, "commendable" then "C-"
(commendable minus). Under the
new system however, she was
continuously rated as "Below Target"
and "On Target". She complained
about the results asking for reevaluation which she was rewarded.
However, still unsatisfied by the
results, she wrote letters to higher
management (going up to
management in Japan). Instead of
waiting for Japanese manager to
investigate, they asked her to
voluntarily resign. When she refused,
she was verbally informed of her
termination for gross inefficiency.
Fadrigo was the Customer Affairs
Department Manager of petitioner
SLMC. As such, she supervised the
Wellness Program Office (WPO),
which administers SLMCs check up
packages. A doctor complained to the
Corporate President of the SLMC

with in the course of her


employment, is analogous to the
other "just causes" enumerated
under Art 282 of the Labor Code.

In this case, the supposed function


of respondent monitoring duties
and activities of other employees
is not subsumed in what
petitioners claim as respondent's
duties which are (a) to manage,
direct and control record-keeping
and financial reportorial
requirements; (b) to ensure the
accuracy and integrity of all
financial reports; (c) to be
responsible for the funds
management and financial
planning activities of the company;
and (d) to manage the
disbursement of funds.

Moreover, logic dictates that the


monitoring of the duties and
activities of the employees who
are reporting at the Batangas site
would fall on the person appointed
to oversee the operations of the
company in that area. In the

Art 282. Gross inefficiency falls


within the purview of other causes
analogous to the foregoing in Art
282 (e). One is analogous to
another if it is susceptible of
comparison with the latter either
in general or in some specific detail
or has a close relationship to the
other. Gross inefficiency is closely
related to gross neglect: both
involve specific acts of omission on
the part of the employee resulting
in damage to the employer or to
his business. Failure to observe
prescribed standards of work, or to
fulfill reasonable work assignments
due to inefficiency may constitute
just cause for dismissal. Since in
this case, petitioner continuously
failed to meet the company's
evaluation standards, dismissal
based on this ground would have
been valid.
Analogous cases: insubordination,
gross inefficiency, incompetence

Burden of proving that


employee's dismissal from
employment was for just
cause rests upon the
employer. In this case, she
was not granted a hearing.
She was asked to voluntarily
resign. And when she
refused, she was given
notice of termination.

Gross inefficiency is closely


related to gross neglect, for
both involve specific acts of
omission on the part of the
employee resulting in
damage to the employer or
to his business; hence, such

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EG & Const Corp v Sato

regarding her conversation with a


trainee and a casual employee, who
then clarified the matter with the
WPO, asking if it was WPOs practice
to reject patients.
While on her rest day, Fadrigo
received a phone call from SLMCs
Associate Director for Corporate
Affairs informing her of the incident.
Fadrigo was further directed to
instruct the trainee and the casual
employee not to report for work the
following day. Fadrigo called the
office, as well as the twos personal
numbers but was not able to talk
with them. She then left a message
with a senior associate at the WPO to
instruct the two not to report for
work tomorrow and to wait for her at
her office. The two reported for work
the next day and were then
instructed by the Associate Director
to go home. When Fadrigo arrived,
the two had gone. First notice was
sent for her to explain her side. She
was eventually dismissed.
Sato was hired as a grader operator
by EG Corp. On July 22, 2004,
petitioners told Sato that they could
no longer afford to pay his wages,
and he was advised to look for
employment in other construction
companies. Sato, however, found
difficulty in finding a job because he
had been blacklisted in other
construction companies and was
prevented from entering the project
sites of petitioners. Nilo Berdin was
hired by petitioners in March 1991 as
a steelman/laborer; Anecito S.
Parantar, Sr. was hired in February
1997 as a steelman; and Romeo M.
Lacida, Jr. was hired in March 2001 as

present case, the Batangas site


where the arriendo collections
were made was managed by an
estate manager in the person of
one Jonas Senia.

The reason why respondents failed


to report for work was because
petitioner corporation barred
them from entering its
construction sites. It is a settled
rule that failure to report for work
after a notice to return to work
has been served does not
necessarily constitute
abandonment.

must be gross and habitual


to constitute a valid ground
for termination.
A single or isolated act of
negligence does not
constitute a just cause for
the dismissal of the
employee.

The intent to discontinue the


employment must be shown by
clear proof that it was deliberate
and unjustified. Petitioner
corporation failed to show overt
acts committed by respondents
from which it may be deduced that
they had no more intention to
work. Respondents filing of the
case for illegal dismissal barely four
(4) days from their alleged
abandonment is totally
inconsistent with our known
concept of what constitutes
abandonment.

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a laborer.
On July 24, 2004, the project
engineer of respondents Berdin,
Parantar, and Lacida instructed them
to affix their signatures on various
documents. They refused to sign the
documents because they were
written in English, a language that
they did not understand. Irked by
their disobedience, the project
engineer terminated their
employment. On the same date, they
were given their weekly wages.
However, the wages that were paid
to them were short of three (3) days
worth of wages, as penalty for their
refusal to sign the documents. The
following day, they were not allowed
to enter the work premises.
Dimagan v. Dacworks United

Batongbacal v. Associated Bank

Dimagan was a stockholder of


Dacworks before he was dismissed
for allegedly abandoning his
employment by being on AWOL.
Dimagan was claiming, however, that
he did
not abandon his employment and
that the companys harsh and
humiliating treatment of him
(demoting him to technician position)
was tantamount to
constructive dismissal.

Dacworks failed to prove that


Dimagan not abandoned his
employment. The court held that
he was in fact constructively
dismissed through the companys
harsh treatment of him.

According to the court, his absence


was caused
by the unwarranted demotion in
rank that was imposed upon him
by respondents and
not by any intention to sever
employment ties with them. The
court also explained that his filing
of the instant complaint for illegal
dismissal indubitably negates the
allegation of abandonment
because had he intended to
forsake his job, then he would not
have found it necessary to institute
a case against Dacworks.

Petitioner Atty. Batongbacal was the


assistant VP of a bank. Said bank
merged with another bank. In the
new bank, petitioner resumed his

The bank cannot legally dismiss


petitioner for refusal to tender his
courtesy resignation which the
bank required in line with its

It should be emphasized that


resignation per se means voluntary
relinquishment of a position or
office. Adding the word "courtesy"

Abandonment is the
deliberate and unjustified
refusal of an employee to
resume his employment.
Elements of abandonment:
(1) the employee must have
failed to report for work or
must have been absent
without valid or justifiable
reason; and
(2) there must have been a
clear intention on the part
of the employee to sever
the
employer-employee
relationship manifested by
some overt act.

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Manlimos v. NLRC

Elcee Farms Inc v. NLRC

position as AVP. The bank's board


met and approved a resolution
requiring bank officers to
immediately tender their courtesy
resignations in an effort to give the
new management be given the
necessary flexibility in streamlining
the operations of the Bank.
Petitioner did not submit his courtesy
resignation but nonetheless received
a letter from the steering committee
accepting his resignation.
New ownership/management group
acquired complete ownership of the
corporation. Petitioners were advised
of such change and continued to
work for the new owner but were
however, terminated 2 months after.
The new owner publicized notice for
hiring workers indicating that
previously-separated employees
could be accepted on probationary
basis. Petitioners were rehired on
piece rate/task basis. Petitioners
were dismissed a month later for
having committed acts prejudicial to
the interest of new management.

reorganization plan. By directing


its employees to submit letters of
courtesy resignation, the bank in
effect forced upon its employees
an act which they themselves
should voluntarily do.

did not change the essence of


resignation.

Change of ownership is valid


exercise of management
prerogative as long as done in
good faith

Where there is change of


ownership in good faith, the
transferee is under no legal duty to
absorb the transferors employees
as there is no law compelling such
absorption. The most the
transferee may do, for reasons of
public policy and social justice, is to
give preference to the qualified
separated employees in the filing
of vacancies in the facilities of the
purchaser.
Petitioners were effectively
separated from work due to a bona
fide change of ownership and were
paid separation pay which they
freely and voluntarily accepted

Semillano and one hundred fortythree (143) other complainants were


all regular farm workers in Hacienda
Trinidad, which was owned and
operated by Elcee Farms. The
president of the Elcee Farms,
Garnele, sub-leased Hacienda
Trinidad to Daniel Hilado. In the
contract of lease, it has been
stipulated that the employment of
120 of the formers employees
should be continued by the latter. It
was, however, silent as to the

Elcee Farms should be held liable


to the employees. The lease to
Hilado was a virtual termination
of the employer-employee
relationship. Moreover, there is no
showing that HILLA
assumed Elcee Farmss obligation
to pay the various benefits due to
the workers
from their employment with Elcee
Farms. There was a cessation of
operations of Elcee Farms, which
renders it liable for separation pay

If the termination of employees is


caused by the cessation of
business, the employer must grant
separation pay to the terminated
employees, as provided for by
Article 283, LC.

A courtesy resignation is not


valid if its not voluntary.

Different from withdrawing


operations altogether.

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Manila Electric Co v. NLRC

benefits that would accrue to the


employees. A CBA with the United
Sugar Farmers Organization (USFO)
has been arrived at, containing a
closed shop provision. Should the
employees/laborers refuse and fail to
join and affiliate with the UNION
within such a period of time, said
employees/laborers shall be
dismissed by the EMPLOYER upon
recommendation by the UNION. The
complainants refused to join and
were thus terminated.
Jeremias C. Cortez, Jr. was employed
on probationary status by petitioner
Manila Electric Company (Meralco)
on September 15, 1975 as a lineman
driver. Six months later, he was
regularized as a 3rd class linemandriver. In 1977, and until the time of
his dismissal, he worked as 1st class
lineman-driver. Characteristics,
however, of private respondents
service with petitioner is his
perennial suspension from work.

to its employees.

This Court has upheld a companys


management prerogatives so long
as they are exercised in good faith
for the advancement of the
employers interest and not for the
purpose of defeating or
circumventing the rights of the
employees under special laws or
under valid agreements.
In the case at bar, the service
record of private respondent with
petitioner is perpetually
characterized by unexplained
absences and unauthorized sick
leave extensions. The nature of
his job i.e. as a lineman-driver
requires his physical presence to
minister to incessant complaints
often faulted with electricity. The
penchant of private respondent to
continually incur unauthorized
absences and/or a violation of
petitioners sick leave policy finally
rendered his dismissal as
imminently proper.

Article 283 of the Labor Code


enumerates the just causes for
termination. Among such causes
are the following:
a) Serious misconduct or willful
disobedience by the employee of
the lawful orders of his employers
or representatives in connection
with his work.
b) Gross and habitual neglect by
the employee of his duties.

This cause includes gross


inefficiency, negligence and
carelessness. Such just
causes are derived from the
right of the employer to
select and engage his
employees. For indeed,
regulation of manpower by
the company clearly falls
within the ambit of
management prerogative.
This court had defined a
valid exercise of
management prerogative as
one which covers: hiring
work assignment, working
methods, time, place and
manner of work, tools to be
used, processes to be
followed, supervision of
workers, working
regulations, transfer of
employees, work
supervision, lay-off of
workers, and the discipline,
dismissal and recall of
workers. Except as
provided for, or limited by,
special laws, an employer is
free to regulate, according

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32

RB Michael Press v. Galit

Galit was held to be in willful


violation of
company authority when he refused
to render overtime service after
being
ordered to do so. In considering his
dismissal, RB Michael Press took into
account his being tardy
for a total of 190 times, totaling to
6,117 minutes, and his being absent
without leave for a total of 9 days.
He subsequently filed a complaint for
illegal dismissal contending, among
other things, that his tardiness and
absences could no longer serve as
basis for his termination as they have
already been deducted from his
salary as a form of penalty and that
because he was not subjected to any
other admonition or penalty for
tardiness, petitioners then had
condoned the offense or that the
infraction is not serious enough to
merit any penalty.

His tardiness and absences were


validly considered in his dismissal.
The court explained that the mere
fact that
the numerous infractions of Galit
have not been immediately
subjected to sanctions cannot be
interpreted as condonation of the
offenses or waiver of the
company to enforce company
rules.

The also explained citing the case


of Filipio v. The Honorable Minister
that past infractions for which the
employee has suffered the
corresponding penalty for each
violation cannot be used as a
justification for the employees
dismissal for that would penalize
him twice for the same offense. At
most, it was explained, these
collective infractions could be used
as supporting justification to a
subsequent similar offense. In
contrast, the RB Michael Press in
the case at bar did not impose any
punishment for the numerous
absences and tardiness of
respondent and thus, said
infractions can be used collectively
by petitioners as a ground for
dismissal since the deductions on
Galits salary for his numerous
infractions was only proper
pursuant to the principle of a
days pay for a days work

Century Canning Corp v. Ramil

Respondent was terminated for loss


of trust and confidence. He was
allegedly involved in the forgery of
CAPEX forms and the signature of an
officer. Petitioner corporation argues
that aside from respondent's
involvement in the forgery of the
CAPEX form, his past violations of
company rules and regulations
(tardiness) are more than sufficient
grounds to justify his termination
from employment.

Petitioner's reliance on
respondent's previous tardiness in
reporting for work as a ground for
his dismissal is not meritorious.
His previous offenses were entirely
separate and distinct from his
latest alleged infraction of forgery.
Hence, the same could no longer
be utilized as an added
justification for his dismissal.
Besides, respondent had already
been sanctioned for his
priorinfractions. To consider these
offenses as justification for his

The correct rule has always been


that such previous offense may be
used as valid justification for
dismissal from work only if
theinfractions are related to the
subsequent offense upon which
the basis of termination is decreed.

to his own discretion and


judgment, all aspects of
employment.
Habitual tardiness is a form
of neglect of duty - lack of
initiative, diligence, and
discipline to come to work
on time everyday exhibit
the employees deportment
towards work. Habitual and
excessive tardiness is
inimical to the general
productivity and business of
the employer. This is
especially true when the
tardiness and/or
absenteeism occurred
frequently and repeatedly
within an
extensive period of time.

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dismissal would be penalizing


respondent twice for the same
offense.

Ramoran v. Jardine

Gustilo v. Wyeth Phil

Petitioner was junior accountant in


petitioner-company. She was found
to have tampered with the dates of
her overtime slips making it seem like
she worked more than she actually
did. She was acquitted in criminal
cases filed against her by the
company. She argues that based on
her acquittal, her dismissal may now
be overturned.

Petitioner NOT DEPRIVED OF DUE


PROCESS. Court found no basis to
mitigate her liability

Gustilo was employed by Wyeth Phil.


Inc. as a pharmaceutical territory
manager. He is tasked to submit
periodic reports of his daily call visits,
monthly itinerary, and weekly locator
and incurred expenses in connection
with his visits in hospitals,
pharmacies, drugstores and
physicians concerned. He submitted
his weekly expense report late. As a
result, a notice was sent to him
reprimanding him for such. Upon
committing the same infraction, he
was suspended for five days, and
subsequently for fifteen days for
repeating the same.
In an integration of Wyeths
pharmaceutical products with its
sister company, Gustilo was tasked to
promote four products. He
committed to make an average of 18
daily calls to physicians, submit

His termination was valid, being a


is habitual offender with
numerous contraventions of
company rules.Petitioner did not
only violate the aforestated
company rules and regulations. He
also submitted several false and
falsified documents to the
company. In short, he is dishonest.

The essence of due process is to be


found in the reasonable
opportunity to be heard and
submit any evidence one may have
in support of ones defense
Due process does not necessarily
require conducting an actual
hearing but simply giving the party
concerned due notice and
affording an opportunity or right
to be heard

Not the first time that petitioner


was charged with falsification by
Jardine.
She previously served a 5-day
suspension for tampering with a
receipt making it seem like she
spent 6980 for glasses when she
really spent only P100

Although she was already


entitled to dismissal for this
violation, due to her
voluntary admission and
due to humanitarian
reasons, she was only given
a 5 day suspension
She was warned that any
future violation of the
same nature, irrespective
of the time it is committed
would result in the
imposition of the maximum
penalty of dismissal

A series of irregularities when put


together may constitute serious
misconduct,
which under Article 282 of the
Labor Code, as amended, is a just
cause for
dismissal.

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34

Santos v. NLRC

promptly all periodic reports, and


ensure 95% territory program
performance for
every cycle. He failed to do as he
promised. Consequently, he was sent
two separate notice for willful
violation of company rules and
regulations and directing him to
submit a written explanation.
Eventually, his employment was
terminated.
Two teachers had an affair when they
are both married to other people.
The rumors spread in the school. On
November 9, 1990, they were barred
from reporting for work and was not
allowed to enter the private
respondents premises, effectively
dismissing them from their
employment.

When a teacher engages in extramarital relationship, especially


when the parties are both married,
such behavior amounts to
immorality, justifying his
termination from employment.
Court explained nature of being a
teacher and its importance of
upholding a certain moral image

Sampaguita Garments
Corporation v. NLRC

Santos was an employee of


Sampaguita Garments
who got involved in 2 cases: one
before the LA and NLRC and one
before the regular criminal courts for
her alleged theft of company
materials. She was contending that
the NLRC decision ordering her
reinstatement should be enforced
despite her conviction for the crime
of theft before the regular courts.

Santos should not be reinstated.

Bughaw Jr v. Treasure Island


Industrial

Petitioner was implicated by coworker who was caught doing drugs.


He was subsequently suspended and
dismissed for using illegal drugs
within company premises during
working hours, and for refusal to
attend the administrative hearing
and submit written explanation on

Petitioner not illegally dismissed.


This Court took judicial notice of
scientific findings that drug abuse
can damage the mental faculties of
the user. It is beyond question
therefore that any employee
under the influence of drugs
cannot possibly continue doing his
duties without posing a serious

Generally, once a judgment has


become final and executory it can
no longer be disturbed, such is
subject to the exception that it
may be reconsidered for the
correction of clerical errors or
where supervening events render
its execution impossible
or unjust in cases of which the
interested party may ask the court
to modify the judgment to
harmonize it with justice and the
facts.
The charge of drug abuse inside
the company's premises and
during working hours against
petitioner constitutes serious
misconduct, which is one of the
just causes for termination.
Misconduct is improper or wrong
conduct. It is the transgression of
some established and definite rule

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Elsa S. Malig-on v. Equitable


General Services

Barroga v. Data Center College


of the Phil

the charges hurled against him.

threat to the lives and property of


his co-workers and even his
employer.

of action, a forbidden act, a


dereliction of duty, willful in
character, and implies wrongful
intent and not merely an error in
judgment. The misconduct to be
serious within the meaning of the
Act must be of such a grave and
aggravated character and not
merely trivial or unimportant. Such
misconduct, however serious, must
nevertheless, in connection with
the work of the employee,
constitute just cause for his
separation.

Respondent hired petitioner as a


janitress in its janitorial services.
After 6 years, Malig ons immediate
supervisor told her that company
would be assigning her to another
client. This did not happen even after
several follow ups. Company alleges
that she stopped reporting for work
Feb 16 without giving reason and
that company wrote her 2 letters
asking her to explain her continued
absence.

Constructively dismissed.

Burden of proving that he was


dismissed for just cause lies with
the employer. When employer
claims that employee resigned
from work, burden is on employer
to prove he did so willingly. To
ascertain intent: look to
circumstances must be
consistent with employees intent
to give up work.

IN THIS CASE: Court was not


convinced. Petitioner was
quick to point out that she
wrote the letter after being
told she needed to resign so
she could be cleared for her
next assignment

Barroga was employed as an


Instructor in Data Center College
Laoag City branch in Ilocos Norte. In a
memo, he was transferred to
University of Northern Philippines
(UNP) in Vigan, Ilocos Sur where the
school had a tie-up program, for
which he was granted, in addition to

The transfer is not tantamount to


constructive dismissal. His
appointment as Head for
Education was in a temporary
capacity, and thus terminable at
the pleasure of the employer.
Moreover, Barrogas employment
contract states that the College

Constructive dismissal exists when


demotion in rank or diminution in
pay is clearly established by
substantial evidence.

Constructive Dismissal:
quitting because continued
employment is rendered
impossible, unreasonable or
unlikely, or because of a
demotion in rank or a
diminution of pay; exists
when there is a clear act of

Petitioners floating status


ran more than 6 months.
Notices that company
alleges to have sent her
informing her of
termination could not have
been valid notice as they
were sent after the 6 month
period i.e. after they
constructively dismissed
her.

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36

Nippon Housing Phil Inc v. Maiah


Leynes

his monthly salary, a P1,200.00


allowance for board and lodging. He
was recalled to the Laoag campus. In
another memo, he
was transferred to Data Center
College Bangued, Abra branch as
Head for Education/Instructor due to
an urgent need for an experienced
officer and computer instructor
thereat. He declined to accept his
transfer in the Abra branch in view of
the deteriorating condition of his
father and the absence of additional
remuneration to defray expenses for
board and lodging which constitutes
implicit diminution of his
salary. The College suspended his
scholarship for post-graduate studies.
He filed a complaint for constructive
dismissal.
Disappointed with the management
decision over a dispute with an
employee, Leynes asked for an
emergency leave of absence for the
supposed purpose of coordinating
with her lawyer regarding her
resignation letter. While NHPI
offered the Property Manager
position to Engr. Carlos Jose as a
consequence Leynes' signification of
her intention to resign, it also
appears that Leynes sent another
letter to Reyes by telefax on the
same day, expressing her intention to
return to work and to call off her
planned resignation. Having
subsequently reported back for work
and resumed performance of her
assigned functions, Leynes was
constrained to send out a written
protest regarding the verbal
information she supposedly received
from Reyes that a substitute has

has the prerogative to assign him


in any of its branches or tie-up
schools as the necessity demands.
In any event, it is management
prerogative. Data College has been
under financial constraints which
necessitated it to suspend
Barrogas scholarship for the
latters post-graduate studies.The
absence of additional allowances
to defray expenses in connection
with his transfer to the Abra
branch does not amount to a
diminution of pay as such grant is
not pursuant to a company policy
nor practice.

Although the CA correctly found


that the record is bereft of any
showing that Leynes was
unacceptable to BGCC, the
evidence the parties adduced a
quo clearly indicates that
petitioners were not in bad faith
when they placed the former
under floating status.

discrimination, insensibility
or disdain by an employer
which becomes
unbearable for the
employee to continue his
employment.

The rule is settled, however, that


"off-detailing" is not equivalent to
dismissal, so long as such status
does not continue beyond a
reasonable time and that it is only
when such a "floating status" lasts
for more than six months that the
employee may be considered to
have been constructively
dismissed. A complaint for illegal
dismissal filed prior to the lapse of
said six-month and/or the actual
dismissal of the employee is
generally considered as
prematurely filed.

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37

Pharmacia & UpJohn v. Albayda

Morales v. Harbor Centre Port


Terminal

already been hired for her position.


Leynes was relieved her from her
position and directing her to report
to NHPI's main office while she was
on floating status.
Albayda was a District Sales Manager
for Pharmacia who refused to be
transferred to a different sales
district which ultimately led to his
dismissal. He filed a complaint
against the company saying that their
attempts to transfer/reassign him
over his objections were tantamount
to constructive
dismissal since he has already stayed
in his district for more that 2 decades
and his reassignment to a different
location will be detrimental to him
and his family.

Petitioner Morales was the Division


Manager of the Accounting
Department of HCPTI. He was
reassigned to Operations Cost
Accounting. Morales protested that
his reassignment was a clear
demotion since the position to which
he was transferred was not even
included in HCPTIs plantilla. In
response to his grievance, an interoffice memorandum was issued to
the effect that transfer of
employees is a management
prerogative and that HCPTI had the
right and responsibility to find the
perfect balance between the skills
and abilities of employees to the
needs of the business. Morales filed
a complaint against respondents for

Albayda was validly dismissed as


his refusal to be reassigned was is
clearly a defiance of the lawful
order of his employer, and a
ground to terminate his services
pursuant to Article 282, paragraph
(a) of the Labor Code.
The court upheld the companys
exercise of management
prerogative to transfer or assign
employees from one office or area
of operation to another, rovided
there is no demotion in rank or
diminution of salary, benefits, and
other privileges, and the action is
not motivated by discrimination,
made in bad faith, or effected as a
form of punishment or demotion
without sufficient cause.
An employer may transfer or
assign employees from one office
or area of operation to another,
provided there is no demotion in
rank or diminution of salary,
benefits, and other privileges, and
the action is not motivated by
discrimination, made in bad faith,
or effected as a form of
punishment or demotion without
sufficient cause. In this case,
Morales' reassignment was held by
the Court to be a demotion, as
such, his transfer was improper.

The court also took note of the fact


that that in respondents
employment application and
contract of employment, he agreed
to be assigned to any work or
workplace as may be determined
by the company whenever the
operations require such
assignment and that the nature of
employment of a sales man or
sales manager is that it is mobile or
ambulant being always seeking for
possible areas to market goods and
services

TEST OF VALIDITY OF
TRANSFER: To determine
the validity of the transfer
of
employees, the employer
must show that the transfer
is 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. Should the
employer fail to overcome
this burden of proof, the
employee's transfer shall
be tantamount to
constructive dismissal.

Constructive dismissal exists where


there is cessation of work because
"continued employment is
rendered impossible, unreasonable
or unlikely, as an offer involving a
demotion in rank or a diminution
in pay" and other benefits.
Constructive dismissal may,
likewise, exist if an act of clear
discrimination, insensibility, or
disdain by an employer becomes
so unbearable on the part of the
employee that it could foreclose
any choice by him except to forego
his continued employment.

In cases of a transfer of an
employee, the rule is settled
that the employer is
charged with the burden of
proving that its conduct and
action are for valid and
legitimate grounds such as
genuine business necessity
and that the transfer is not
unreasonable, inconvenient
or prejudicial to the
employee. If the employer
cannot overcome this
burden of proof, the
employees transfer shall be
tantamount to unlawful
constructive dismissal.

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38

Phil Telegraph v. CA

Jose Artificio v. NLRC

Gatbonton v. NLRC

constructive dismissal.
Petitioner came up with RELOCATION
and RESTRUCTURING PROGRAM
designed to sustain retail operations,
decongest workforce, lower expenses
in hiring and training new personnel,
avoid retrenchment of employees
occupying redundant positions.
Respondents were given the option
to choose whether they could be
transferred. They were offered
benefits and a salary increase with
the transfer.

Artificio was employed as security


guard by respondent RP Guardians
Security Agency, Inc., a security
agency. Artificio had a heated
argument with a fellow security
guard who submitted a confidential
report, requesting that Artificio be
investigated for leaving his post
during night shift duty to see his
girlfriend at a nearby beerhouse.
Another security guard sent a report
stating that Artificio arrived at the
office under the influence of liquor,
and that upon knowing that no
salaries were to be distributed then,
he bad-mouthed the employees of
the agency and even threatened to
arson the office. Artificio was
temporarily relieved from his post
and placed under preventive
suspension pending his investigation.
Petitioner Renato S. Gatbonton is an
associate professor of respondent
Mapua Institute of Technology (MIT),
Faculty of Civil Engineering.
Sometime in November 1998, a civil

Illegally dismissed. Transfer was


considered a promotion.
Employees had the right to refuse,
cannot be considered willful
disobedience/ insubordination.
No law that compels an employee
to accept a promotion for the
reason that a promotion is in the
nature of a gift or reward which a
person has a right to refuse

With regard to PAY: they were


promoted from a lower job grade
to a higher one. Transfer would not
result in diminution in pay benefit
and privilege since the salaries
would be larges if not the same
plus relocation packages. Cost of
living in the province is much lower
than city = higher purchasing
power.

Preventive suspension was proper.


Artificios preventive suspension
was justified since he was
employed as a security guard
tasked precisely to safeguard
respondents client. Due to the
alleged, and proven, serious
allegations of conduct unbecoming
a security guard, his continued
employment poses a threat to the
respondent. Moreover, the
company has the right to regulate
all aspects of employment,
provided such is performed in
good faith.

Preventive suspension is justified


where the employees continued
employment poses a serious and
imminent threat to the life or
property of the employer or of the
employees co-workers. Without
this kind of threat, preventive
suspension is not proper.

R.A. No. 7877 imposed the duty on


educational or training institutions
to promulgate rules and
regulations in consultation with
and jointly approved by the

The Court finds that there is no


sufficient basis to justify his
preventive suspension. Under the
Mapua Rules, an accused may be
placed under preventive

With regard to
responsibility: Promotion is
the advancement form one
position to another with an
increase in duties and
responsibilities as
authorized by law and
usually accompanied by an
increase in salary.
Indispensable element of
promotion is that there
must be an advancement
from one position to
another or an upward
vertical movement of the
employees rank or position

Inpetitioners case, there is


no indication that
petitioners preventive
suspension may be based
on the foregoing

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engineering student of respondent


MIT filed a letter-complaint against
petitioner for unfair/unjust grading
system, sexual harassment and
conduct unbecoming of an
academician. Pending investigation
of the complaint, respondent MIT,
through its Committee on Decorum
and Investigation placed petitioner
under a 30-day preventive
suspension effective January 11,
1999.

employees or students or trainees,


through their duly designated
representatives, prescribing the
procedures for the investigation of
sexual harassment cases and the
administrative sanctions therefor.
Petitioners preventive suspension
was based on respondent MITs
Rules and Regulations for the
Implemention of the Anti-Sexual
Harassment Act of 1995, or R.A.
No. 7877.

suspension during pendency of the


hearing under any of the following
circumstances:
(a) if the evidence of his guilt is
strong and the school head is
morally convinced that the
continued stay of the accused
during the period of investigation
constitutes a distraction to the
normal operations of the
institution; or
(b) the accused poses a risk or
danger to the life or property of
the other members of the
educational community.

Edge Apparel Inc v. NLRC

Employees here were removed from


their employment pursuant to Edges
retrenchment program. There was a
contention as to WON they should be
granted an additional month pay
per year of service pursuant to the
NLRC ruling on this case saying that
retrenchment could also be
considered as
redundancy.

FASAP v PAL (2008)

PAL retrenched 5,000 of its


employees, including
more than 1,400 of its cabin crew
personnel.

Payment of additional separation


pay is not proper. According to
the court, the amount of
separation pay depends on the
ground for the termination of
employment.
Since the employees termination
is based on retrenchment and not
on
redundancy, they should only
receive separation pay of month
per year of service.
PAL's retrenchment scheme was
not justified. It failed to
substantiate its claim of actual and
imminent substantial losses. Also,
when PAL implemented Plan 22,
instead of Plan 14, which was what
it had originally made known to its
employees, it could not be said
that it acted in a manner
compatible with good faith. The
retrenchment of cabin crew
personnel due to "other reasons"
were not specifically stated and
shown to be for a valid cause. This
is not allowed because it has no

The law acknowledges


the right of every business entity to
reduce its work force if such
measure is made necessary or
compelled by economic factors
that would otherwise endanger
its stability or existence and 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.
Established Standards for Valid
Retrenchment:
1.That retrenchment is reasonably
necessary and likely to prevent
business losses which, if already
incurred, are substantial, serious,
actual and real, or if only expected,
are reasonably imminent as
perceived objectively and in good
faith by the employer;

circumstances. It does not


show that evidence of
petitioners guilt is strong
and that the school head is
morally convinced that
petitioners continued stay
during the period of
investigation constitutes a
distraction to the normal
operations of the
institution; or that
petitioner poses a risk or
danger to the life or
property of the other
members of the educational
community.

Note: Please read the digest


for this case as each
standard was thoroughly
discussed by the Court.

2. That the employer served


written notice both to the
employees and to the DOLE at

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basis in fact and in law.

least one month prior to the


intended date of retrenchment;
3. That the employer pays the
retrenched employees separation
pay equivalent to one (1) month
pay or at least one-half (1/2)
month pay for every year of
service, whichever is higher
4. That the employer exercises its
prerogative to retrench employees
in good faith for the advancement
of its interest and not to defeat or
circumvent the employees' right to
security of tenure; and,
5. That the employer used fair and
reasonable criteria in ascertaining
who would be dismissed and who
would be retained among the
employees, such as status,
efficiency, seniority, physical
fitness, age, and financial hardship
for certain workers.

FASAP v PAL (2009)

Lambert Pawnbrokers & Jewelry


Corp v Helen Binamira

Same facts as previous. Court here


focused on arguments of PAL's
counsel who argued that the
principal and true reason why PAL
had to implement the mass lay-off of
cabin personnel was not the
downsizing but the June 5, 1998
pilots' strike where approximately
600 pilots abandoned their plans and
simultaneously refused to fly. No
pilots= no plans flying=no place for
employment of cabin attendants.
Lim is a Malaysian national with
various businesses in the Philippines,
one of which is Lambert
Pawnbrokers. Helen Binamira, sisterin-law of Lims wife, was hired as an

Pilots' strike was NOT VALID


CAUSE FOR RETRENCHMENT.

This was an IMMEDIATE RESPONSE


to an EMERGENCY SITUATION (PAL
claims to have had daily loses of
P100m and P50m lost fixed costs).
In order for retrenchment to be
valid, ALL elements under Art 283
of the LC must be present. The
absence of ONE ELEMENT causes
the retrenchment to be an
IRREGULAR EXERCISE OF
MANAGEMENT PREROGATIVE

There was no valid dismissal based


on retrenchment. There was no
evidence at all that the company
was suffering from business losses.
Although a sharp drop in the

Losses must be supported by


sufficient and convincing evidence.

It is the employers
obligation to exhaust all
other means to avoid
further losses without
retrenching its employees.
Knee jerk solution to
address the situation of
extreme urgency caused by
the strike clearly shows that
it did not abide by the
requirements under Art
283.
Retrenchment is the
termination of
employment initiated by the
employer through no fault
of and without prejudice

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appraiser and designated as Vault


Custodian. Helen received a letter
terminating her employment
effective that same day, in view of
business losses necessitating
retrenchment. She filed a case for
illegal dismissal.

Andrada v NLRC

Legend sent notice to the


Department of Labor and
Employment of its intention to
retrench and terminate the
employment of thirty-four (34) of its
employees, The following dayLegend
sent the 34 employees their
respective notices of retrenchment,
stating the same reasons for their
retrenchment. It also offered the
employees the following options, to
wit:
a. Temporary retrenchment/lay-off
for a period not to exceed six months
within which we shall explore your
possible reassignment to other
departments or affiliates, after six
months and redeployment and/or
matching are unsuccessful,
permanent retrenchment takes place
and separation pay is released.
b. Permanent retrenchment and
payment of separation pay and other
benefits after the thirty (30) days
notice has lapsed; or
c. Immediate retrenchment and
payment of separation pay, benefits
and one months salary in lieu of

income of the company has been


shown, a mere decline in gross
income cannot in any manner be
considered as serious business
losses. The same should be
substantial, sustained and real.
There was also no showing that
petitioners adopted other costsaving measures before resorting
to retrenchment. The company
also did not use any fair and
reasonable criteria in ascertaining
who would be retrenched.
Moreover, no written notices were
served.
We rule that Legend failed to
establish redundancy.
It is not enough for a company to
merely declare that positions have
become redundant. It must
produce adequate proof of such
redundancy to justify the dismissal
of the affected employees. Panlilio
v. NLRC, we said that the following
evidence may be proffered to
substantiate redundancy: the
new staffing pattern, feasibility
studies/proposal, on the viability
of the newly created positions, job
description and the approval by
the management of the
restructuring. In another case, it
was held that the company
sufficiently established the fact of
redundancy through affidavits
executed by the officers of the
respondent PLDT, explaining the
reasons and necessities for the
implementation of the redundancy
program.

to the employees. It is
resorted to
during periods of business
recession, industrial
depression, seasonal
fluctuations, or during lulls
occasioned by lack of
orders, shortage of
materials, conversion of the
plant to a new production
program, or automation.

Redundancy exists where the


services of an employee are in
excess of what is reasonably
demanded by the actual
requirements of the enterprise. A
position is redundant where it is
superfluous, and superfluity of a
position or positions may be the
outcome of a number of factors,
such as over hiring of workers,
decreased volume of business, or
dropping of a particular product
line or service activity previously
manufactured or undertaken by
the enterprise.

Retrenchment, on the other


hand, is used
interchangeably with the
term lay-off. It is the
termination of employment
initiated by the employer
through no fault of the
employees and without
prejudice to the latter,
resorted to by management
during periods of business
recession, industrial
depression, or seasonal
fluctuations, or during lulls
occasioned by lack of
orders, shortage of
materials, conversion of the
plant for a new production
program or the introduction
of new methods or more
efficient machinery, or of
automation. Simply put, it is
an act of the employer of
dismissing employees
because of losses in the
operation of a business, lack
of work, and considerable
reduction on the volume of

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notice to allow you to look for other


employment opportunities.
Curiously, on the same day, the Labor
and Employment Center of the Subic
Bay Metropolitan Authority
advertised that Legend International
Resorts, Inc. was in need of
employees for positions similar to
those vacated by petitioners.

Smart Communications v Regina


Astorga

Astorga was part of Smarts


Corporate Sales Marketing Group/
Fixed Services Division who was
dismissed from employment due to
redundancy. Her division was
closed upon the entering of the
company in a joint venture with a
Japanese company which in effect
took over the work of Astorgas
former division. Even though the
company undertook to absorb
employees affected by the
redundancy, Astorga still failed to
qualify for a new position due to her
inadequate work performance. She
filed a complaint for illegal dismissal.

his business, a right


consistently recognized and
affirmed by this Court.

Astorgas
dismissal due to redundancy was
valid. According to the court, while
the scales of justice generally tilt in
favor of workers, the fundamental
law also guarantees the right of
the employer to reasonable
returns for his investment and as
such is the case, acknowledgement
must be given to the prerogative
of the employer to adopt such
measures as will promote greater
efficiency, reduce overhead costs
and enhance prospects of
economic gains, albeit always
within the framework of existing
laws. In the end, the SC uphelp the
validity of the reorganization and
redundancy program undertaken
by SMART.
The court also considered that
Astorga failed to present evidence
to support her claims that the
termination of her employment
was illegal and tainted with bad
faith.

The nature of redundancy as


explained in the case of Wiltshire
File Co., Inc. v. National Labor
Relations Commission:
Redundancy in an employers
personnel force necessarily or even
ordinarily refers to duplication of
work. That no other person was
holding the same position that
private respondent held prior to
termination of his services does
not show that his position had not
become redundant. Indeed, in any
well organized business enterprise,
it would be surprising to find
duplication of work and two (2) or
more people doing the work of one
person

The characterization of an
employees services as
superfluous or no longer
necessary and, therefore,
properly terminable, is an
exercise of business
judgment on the part of the
employer. The wisdom and
soundness of such
characterization or decision
is not subject to
discretionary review
provided, of course, that a
violation of law or arbitrary
or malicious action is not
shown.

Redundancy, for purposes of the


Labor Code, exists where the
services of an employee are in
excess of what is reasonably
demanded by the actual
requirements of the enterprise.
Succinctly put, a position is
redundant where it is superfluous,
and superfluity of a position or
positions may be the outcome of a
number of factors, such as
overhiring of workers, decreased
volume of business, or dropping of

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43

a particular product line or service


activity previously manufactured
or undertaken by the enterprise.
Retrenchment or lay-off is the
termination of employment
initiated by the employer, through
no fault of the employees and
without prejudice to the latter,
during periods of business
recession, industrial depression, or
seasonal fluctuations, or during
lulls occasioned by lack of orders,
shortage of materials, conversion
of the plant for a new production
program or the introduction of
new methods or more efficient
machinery, or of automation.

Eastridge Golf Club v Eastridge


Labor Union

Petitioner terminated the


employment of respondents on the
ground that the operations of the
F&B Department had been turned
over to a concessionaire. Petitioner
claim that it laid off the respondents
due to company
eorganization/downsizing and
transfer of operations to a
concessionaire. Respondents claim
that their dismissal was not based on
any of the causes allowed by law, and
that it was effected without due
process.

Respondents were illegally


dismissed. Basically petitioner
tried to use as an excuse the
cessation of operations to justify
its dismissal of employees.
HOWEVER, in this case the Court
held that petitioner merely
simulated the transfer of its
business (i.e. no cessation
happened).

JPL Marketing Promotions v CA

Employees were merchandisers


assigned at different establishments
in 3 diff sities as attendants to one of
the company's clients. Company
advised employees that it would stop
its direct merchandising activity in
the areas where employees were
assigned. They were advised to wait
for further notice as they would be
transferred to other clients

No termination of employment at
all. They received a memo
informing them of termination of
the company's contract with their
current client.

They were also advised that they


were to be reassigned = NO
SEVERANCE. Art 286 allows the
bonafide suspension of operation
of a business or undertaking for a
period not exceeding 6 months
wherein an employee is placed on
FLOATING STATUS. In this case
though, employees sought other
employment even before the
expiration of the 6 month period
provided by law.

Crayons employed Pula as a


Preparation Machine Operator. Pula
suffered a heart attack, was brought
to the hospital, and was confined for
a week. Upon discharge, he was

Termination was invalid. Pula was


able to obtain two different
medical certifications attesting to
his fitness to resume work. These
certifications stand as

The requirement of a medical


certificate under Article 284 cannot
be dispensed with as such would
sanction the unilateral and
arbitrary determination by the

Crayons Processing v. Pula

ON THE OTHER HAND,


closure or cessation of
business is the complete or
partial cessation of the
operations and/or shutdown of the establishment
of the employer. It is carried
out to either stave off the
financial ruin or promote
the business interest of the
employer. Unlike
retrenchment, the employer
does not need to present
evidence of financial losses
to justify such business
decision.
BENEFITS: not entitled to
sep pay but entitled to 13th
month and SIL pay.
Note:
The case focuses a lot on
the entitlement and
computation of benefits.
However, the relevant part
of this case with regards to
the syllabus is that there
was no termination but a
suspension of operations.
So, I guess this case
highlights the effects of the
lack of termination/mere
suspension of operations on
such benefits.

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Wuerth Phil Inc v Rodante Ynson

advised by the attending physician to


take a leave of absence from work
for three months, followed by a twoweek leave upon release of the
results of his angiogram test.
Eventually, he was able to return to
work upon certification of his
physician of his fitness to work. He
suffered a relapse and was advised to
take a leave for one month. He
returned to work upon certification
of fitness. However, he was not given
any post or assignment, and was
even asked to resign with an offer of
financial assistance. He refused the
offer and instead, filed a complaint
for illegal dismissal.
Wuerth Philippines, Inc. hired
respondent Rodante Ynson, as its
National Sales Manager (NSM) for
Automotive. On January 24, 2003, he
suffered a stroke, and on the
succeeding days, he was confined at
the Davao Doctor's Hospital. He
immediately informed the company
about his ailment. The company sent
a letter dated June 12, 2003 to
respondent, directing him to appear
before the formers office in Manila,
on July 1, 2003 at 9:00 a.m., for an
investigation, relative to the
following violations which carry the
penalty of suspension and/or
dismissal, based on the following
alleged violations: (1) absences
without leave since January 24, 2003
to date, and (2) abandonment of
work. In a letter dated June 26,
2003, respondent replied that his
attending physician advised him to
refrain from traveling, in order not to
disrupt his daily schedule for therapy
and medication. Finally, in a letter

incontestable in the absence of


contrary evidence of similar nature
from Crayons. Pula is entitled to
reinstatement.

employer of the gravity or extent


of the employee's illness and thus
defeat the
public policy in the protection of
labor.

NOT PROPER TERMINATION

With regard to disease as a ground


for termination, Article 284 of the
Labor Code provides that an
employer may terminate the
services of an employee who has
been found to be suffering from
any disease and whose continued
employment is prohibited by law
or is prejudicial to his health, as
well as to the health of his coemployees.

In order to validly terminate


employment on this ground,
Section 8, Rule I, Book VI of
the Omnibus Rules
Implementing the Labor
Code requires that:
Section8. Disease as a
ground for dismissal.
Where the employee suffers
from a disease and his
continued employment is
prohibited by law or
prejudicial to his health or
to the health of his coemployees, the employer
shall not terminate his
employment unless there is
a certification by a
competent public health
authority that the disease is
of such nature or at such a
stage that it cannot be
cured within a period of six
(6) months even with
proper medical treatment. If
the disease or ailment can

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45

dated August 27, 2003, Ricanor


informed respondent of the decision
of petitioner's management to
terminate his employment, effective
upon date of receipt, on the ground
of continued absences without filing
a leave of absence.

be cured within the period,


the employer shall not
terminate the employee but
shall ask the employee to
take a leave. The employer
shall reinstate such
employee to his former
position immediately upon
the restoration of his
normal health.

Inguillo & Bergante v First Phil


Scales Inc

Inguillo and Bergante were


employees of FPSI who
were dismissed upon
recommendation of the companys
union pursuant to their
CBAs Union Security Clause. They
were being accused of disloyalty to
the companys union, among other
things.

Their dismissal pursuant to the


CBAs Union Security Clause was
valid.

Jeffrey Nacague v Sulpicio Lines

Nacague was suspected of using


illegal drugs on board one of
respondent's ships. Some members
of the crew, including petitioner were
subjected to a random urine drug
test by SM Lazo. Petitioner tested
positive for shabu. Nacague went to
Chong Hua Hospital in Cebu City to
undergo a voluntary drug test where
he tested negative. He submitted this
result to Sulpicio Lines but he was
still terminated from service for
grave misconduct and loss of trust
and confidence.
Baron was temporarily relieved to
allow Management to audit the
operations process of the company:
there was an increase in the
companys payables and a decline in
its investments. Employees were

Petitioner was illegally dismissed


(no just cause). S.M. Lazo was not
an accredited. drug testing center.
Also, only a screening test was
conducted, no confirmatory test.

Baron v NLRC & Magic Sales

The court laid down


the doctrine that while the
provisions of the LC (Arts. 282-285)
did not
mention as ground the
enforcement of the Union Security
Clause in the CBA, the
dismissal from employment based
on the same is recognized and
accepted in this
jurisdiction.
To constitute valid dismissal from
employment, two requisites must
concur:
(1) the dismissal must be for a just
or authorized cause; and
(2) the employee must be afforded
an opportunity to be
heard and to defend himself.

Petitioners were VALIDLY


DISMISSED; NOT DENIED right to
due process.
Company was able to prove
substantially that serious

Notice and hearing are essential


elements of due process
The employer must furnish the
worker with 2 written notices
before termination of employment
can be legally effected

No requirement that the


notices themselves be
couched in the form and
language of judicial or
quasi-judicial decisions.
What is required: employer

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Mantle Trading Services Inc

instructed to give all support, keys,


documents and undergo a search
before leaving the office. Audit team
discovered that MSI incurred
inventory shortage of 1, 030, 258, 21
and found that Baron in conspiracy
with the other petitioners,
orchestrated massive irregularities
and grand scale fraud which could no
longer be documented because of
theft of company documents and
deletion of company files. Other
petitioners refused to surrender keys
and documents to aid the audit
process.

misconduct was committed by


petitioners.

A notice apprising the employee of


the particular acts or omissions for
which his dismissal is sought
A subsequent notice informing the
employee of the employers
decision to dismiss him
With regard to hearing: the
essence of due process lies simply
in an opportunity to be heard and
not that an actual hearing should
always and indispensably be held

conduct a formal
investigation process, with
notices duly served on the
employees informing them
of the fact of investigation
and if warranted, a separate
notice of dismissal
Through the formal
investigatory process, the
employee must be accorded
the right to present his/her
side which must be
considered and weighed by
the employer
REASON: Employee must be
sufficiently apprised of the
nature of the charge, so as
to be able to intelligently
defend himself against the
charges

Mantle Trading is engaged in the


fishing business. It hired Madriaga as
a batilyo or a fish hauler, and
eventually as a tagapuno (someone
who fills tubs with fish). Two formal
incident reports were submitted,
alleging that Madriaga received
money from a fish trader in exchange
of filling the latters tub with more
fish. Madriaga filed for illegal
dismissal and money claims.

Despite non-compliance with the


notice requirement, the dismissal
remains valid but Madriaga is to be
indemnified for the companys
non-compliance with the notice
requirement.

Violation of due process on the


part of the employer did not nullify
the dismissal, or render it illegal, or
ineffectual. It only entitled the
employee to
indemnification in the form of
nominal damages.

If the dismissal is based on a


just cause under Article 282
but the employer failed to
comply with the notice
requirement, the sanction
to be imposed upon him
should be tempered
because the dismissal
process was, in effect,
initiated by an act
imputable to the employee.
If the dismissal is based on
an authorized cause under
Article 283 but the
employer failed to comply
with the notice
requirement, the sanction
should be stiffer because
the dismissal process was
initiated by the employer's
exercise of his management
prerogative.

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Agabon v. NLRC and Riviera


Home

Serrano v NLRC and Isetann

Private respondent Riviera Home


Improvements, Inc. is engaged in the
business of selling and installing
ornamental and construction
materials. It employed petitioners
Virgilio Agabon and Jenny Agabon as
gypsum board and cornice installers
on January 2, 1992 until February 23,
1999 when they were dismissed for
abandonment of work. The company
claims that petitioners were not
dismissed but had abandoned their
work.

Serrano was a security checker for


respondent Isetann whose services
were terminated after his
department was phased out. His
termination was effected first
through a verbal notice, then through

The dismissal should be upheld


because it was established that the
petitioners abandoned their jobs
to work for another company.
Private respondent, however, did
not follow the notice requirements
and instead argued that sending
notices to the last known
addresses would have been
useless because they did not
reside there anymore.
Unfortunately for the private
respondent, this is not a valid
excuse because the law mandates
the twin notice requirements to
the employees last known
address. Thus, it should be held
liable for non-compliance with the
procedural requirements of due
process.

Prior to 1989, the rule was that a


dismissal or termination is illegal if
the employee was not given any
notice. In the 1989 case of
Wenphil Corp. v. National Labor
Relations Commission, we reversed
this long-standing rule and held
that the dismissed employee,
although not given any notice and
hearing, was not entitled to
reinstatement and backwages
because the dismissal was for
grave misconduct and
insubordination, a just ground for
termination under Article 282. The
employee had a violent temper
and caused trouble during office
hours, defying superiors who tried
to pacify him. We concluded that
reinstating the employee and
awarding backwages may
encourage him to do even worse
and will render a mockery of the
rules of discipline that employees
are required to observe.

Serranos dismissal was valid


pursuant to an authorized cause.
However, Isetann was held liable
to pay him full backwages from the
time he was dismissed without a
written notice given 1

Where the dismissal of one


employee is in fact for a just and
valid cause and is so proven to be
but he is not accorded his right to
due process, i.e., he was not
furnished the twin requirements of

The rule thus evolved:


where the employer had a
valid reason to dismiss an
employee but did not follow
the due process
requirement, the dismissal
may be upheld but the
employer will be penalized
to pay an indemnity to the
employee. This became
known as the Wenphil or
Belated Due Process Rule.
After carefully analyzing the
consequences of the
divergent doctrines in the
law on employment
termination, we believe that
in cases involving dismissals
for cause but without
observance of the twin
requirements of notice and
hearing, the better rule is to
abandon the Serrano
doctrine and to follow
Wenphil by holding that the
dismissal was for just cause
but imposing sanctions on
the employer. Such
sanctions, however, must
be stiffer than that imposed
in Wenphil. By doing so, this
Court would be able to
achieve a fair result by
dispensing justice not just to
employees, but to
employers as well.

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a memo reiterating the same.


Serrano filed a complaint for illegal
dismissal.

month prior to the termination of


his employment.

Salaw v NLRC

Petitioner and a co-employee were


suspected of selling 20 sewing
machines and electric generators
which had been foreclosed by the
respondent bank and dividing the
shares between them. Petitioner was
requested by private respondent to
appear before the bank's Personnel
Discipline and Investigation
Committee (PDIC). Petitioner was
requested to come to the Board
Room without counsel or
representative. Petitioner was
terminated from his employment for
alleged serious misconduct or willful
disobedience and fraud or willful
breach of the trust reposed on him
by the private respondents.

Petitioner was terminated without


the benefit of due process of law.
His dismissal was, therefore,
illegal. Complainant was denied
due process when the subsequent
request to refute the allegations
against him was granted and a
hearing was set "without counsel
or representative.

King of Kings Transport v Mamac

Employee, also president of the


company's labor union, was a bus
conductor. He was required to
submit a Conductor's Trip Report
after each trip. Company found
irregularities in one report conducted

Verbal appraisal of the charges


against the employee is a BREACH
of the procedural due process.
Due process has 2 aspects:
Substantive and procedural.

notice and opportunity to be


heard, the dismissal shall be
upheld but the employer must be
sanctioned for non-compliance
with the requirements of, or for
failure to observe, due process.
There is a violation of due process
when an employee is not given a
chance to defend himself, as
provided in Rule XIV, Book V of the
Implementing Rules and
Regulations of the
LC governing the dismissal of
employees. Section 5 of the said
Rule requires that "the employer
shall afford the worker ample
opportunity to be heard and to
defend himself with the assistance
of his representative, if he so
desires." Right to counsel is a very
basic requirement of
substantive due process,

Sec 2 Book B Rule XXIII: 1. first


notice to be served on employees
should contain (1) specific
causes/grounds for termination
and (2) directive that employees
are given the opportunity to

Cardinal primary rights (Ang


Tibay):
(1) Right to a hearing
(2) the tribunal must
consider the evidence
presented
(3) Decision has to be
supported
(4) Evidence must be
"substantial." "Substantial
evidence is more than a
mere scintilla. It means such
relevant evidence as a
reasonable mind might
accept as adequate to
support a conclusion."
(5) The decision must be
rendered on the
evidence presented
(6) Judges must act on its or
his own independent
consideration of the law
and facts of
the controversy.
(7 ) Judge must render its
decision in such a manner
that the parties to the
proceeding can know the
various issues involved, and
the reasons for the
decisions rendered.
Non compliance with
procedure results in penalty
to be paid by employer

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49

Magro Placement v Hernandez

by respondent which resulted in a


loss of P890. KKTI did not file the
subsequent irregularity report but
asked respondent to explain the
discrepancy. Company was
dissatisfied with his explanation and
terminated his employment a month
afterwards.

Substantive refers to the ground


for termination. Court found that
petitioner was terminated for just
cause but verbal appraisal does
not satisfy the due process
requirement.

Magro is a duly licensed recruitment


agency. It is the local agency of Orbit
Recruitment Office of Jeddah,
Kingdom of Saudi Arabia (KSA).
Hernandez was an Aircon Electrical
Technician of Toyota Pasong Tamo,
Inc. who applied with Magro for
employment abroad as Auto
Electrician or Air-Conditioning
Technician. Hernandez passed the
interviews and trade tests and was
hired as Auto Electrician of Al
Yamama Est. in Jeddah, KSA on a
two-year contract. Hence, he
resigned from his work in Toyota. He
left for Jeddah and commenced
work. Due to the lack of equipment
or tools, the work became harder.
After 10 days, his employer in Al
Yamama took his passport and
brought him to Orbit. His employer
told the agency that respondent did
not know his job as electrician.
Hernandez said he needed time to
get used to the American cars he was
tasked to repair as he was

Procedural due process was


violated. Al Yamama failed to
satisfy the two-notice
requirement. Magro is ordered to
pay Hernandez nominal damages.

submit their written explanation


within reasonable period i.e. a
period they are able to
INTELLIGENTLY prepare
explanation and defenses (with or
without counsel)
2. employers should conduct a
HEARING or CONFERENCE where
employees will be given
opportunity to explain, present
and rebut evidence.
3. a written notice of termination
should be served if all
circumstances involving the charge
were considered and found to
have established justifiable
grounds for severance
Non-compliance with procedural
due process gives rise to
indemnification in the form of
nominal damages.

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50

Erector Advertising Sign Gr Inc v


Cloma

accustomed to working on Japanese


cars. He was subjected to a trade
test. He failed. He was repatriated to
the Philippines. When he sought
financial assistance from Magro, the
latter offered the sum of P2,000.00
only. He filed for illegal dismissal.
Expedito Cloma was hired as
company driver and the latter had
served as such until his dismissal
from service in May 2000. It is
conceded by petitioner that Cloma
has been suspended several times
from work due to frequent tardiness,
absenteeism and of misbehavior.

The notice of termination served


by petitioner on Cloma cites three
reasons why the management has
arrived at the decision to dismiss
him from service: first, his absence
from work for two (2) days without
prior notice and approval; second,
his act of barging into the premises
of the Outright Division and
threatening the members of the
said division with bodily harm if
they did not stop doing their work;
and third, his frequent tardiness in
reporting for work.

Nowhere in the records does it


appear that Cloma attempted to
deny these allegations, yet it is
equally certain that the records do
not contain any suggestion that
petitioner, with respect to these
three grounds with which Cloma is
charged, has tried to notify the
latter of the said charges. Indeed,
we find that petitioner has not
complied with the basic
requirement of serving a predismissal notice on Cloma. What is
clear from the records is that the
only notice that was given to
Cloma prior to his termination is
the May 20, 2000 notice of
termination informing him that his
employment in the company has
been severed for the causes
mentioned.
Moreover, we agree with the Court
of Appeals that not only did
petitioner fail to comply with the
procedural due process
requirements in terminating
Clomas employment, but also that
petitioner has not overcome the
quantum of substantial evidence
needed to establish the existence
of just causes for dismissal in this
case.

With respect to due process


requirement, the employer
is bound to furnish the
employee concerned with
two (2) written notices
before termination of
employment can be legally
effected. One is the notice
apprising the employee of
the particular acts or
omissions for which his
dismissal is sought and
this may loosely be
considered as the proper
charge. The other is the
notice informing the
employee of the
managements decision to
sever his employment. This
decision, however, must
come only after the
employee is given a
reasonable period from
receipt of the first notice
within which to answer the
charge, thereby giving him
ample opportunity to be
heard and defend himself
with the assistance of his
representative should he so
desire. The requirement of
notice, it has been stressed,
is not a mere technicality
but a requirement of due
process to which every
employee is entitled.

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51

Perez v. Phil Telegraph and


Telephone Co

Technol Eight Phil Corp v NLRC &


Amular

Perez and Doria were employees of


PT&T who were dismissed due to
their involvement in a falsification
issue. Upon their complaint for
illegal dismissal, they alleged, among
others, that their due process rights
were violated due to
PT&Ts non-compliance with the
hearing requirement as provided for
in the Implementing Rules of the LC.

While the court upheld the


illegality of their dismissal, it also
said that their due process rights
were not necessarily violated due
to the lack of a hearing or
conference. According to the
court, since Art. 277(b) of the LC
provides that, in cases of
termination for a just cause, an
employee must be given ample
opportunity to be heard and to
defend himself, thus, the
opportunity to be heard afforded
by law to the employee is qualified
by the word ample which
ordinarily means considerably
more than adequate or sufficient.
The phrase ample opportunity to
be heard can be reasonably
interpreted as extensive enough to
cover actual hearing or conference
and to this extent, Section 2(d),
Rule I of the IRR of Book VI of the
LC is in conformity with Article
277(b). In short, a formal hearing
or conference is not required in
the dismissal of an employee as
there are other means for an
employee to be heard.

The court laid down in this case the


following guiding principles in
connection with the hearing
requirement in dismissal cases:

There was a confrontation between


Amular & a co-worker regarding a
work-related issue. The fight
happened outside company
premises. Amular was informed that
the Technol management will
conduct an administrative hearing.
He was also given 2 days to respond
in writing to the statements attached
to and supporting the notice. A day
before the hearing, Amular filed a
complaint for illegal
suspension/constructive dismissal.

Due process was afforded to the


respondent. Petitioner chose not
to present his
side at the administrative hearing.
In fact, he avoided the
investigation into
the charges against him by filing
his illegal dismissal complaint
ahead of the
scheduled investigation. Under
these facts, he was given the
opportunity to be
heard and he cannot now protest

The Courthas repeatedly made in


employee dismissal cases, the
essence of due process issimply an
opportunity to be heard; it is the
denial of this opportunity
thatconstitutes violation of due
process of law.

(a) ample opportunity to be


heard means any meaningful
opportunity (verbal or
written) given to the employee to
answer the charges against him
and submit evidence in support of
his defense, whether in a hearing,
conference or some other fair, just
and reasonable way.
(b) a formal hearing or conference
becomes mandatory only when
requested by the
employee in writing or substantial
evidentiary disputes exist or a
company rule or practice requires
it, or when similar circumstances
justify it.
(c) the ample opportunity to be
heard standard in the Labor Code
prevails over the hearing or
conference
requirement in the implementing
rules and regulations.

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52

Seastar Marine Services Inc v


Bul-an

ABD Overseas v. NLRC

He failed to attend the administrative


hearing. He was dismissed.

that he was denied this


opportunity.

Captain of the ship reports that


respondent was uncooperative,
refused to obey his orders and often
pretended to be ill. Respondent
argues he was physically assaulted on
the ship. LA decided in favor of
respondent. NLRC affirmed.
Petitioner argues that NLRC acted in
excess of jurisdiction when it upheld
the LAs ruling as it was incumbent
upon the NLRC to remand the case to
the LA considering that the material
and factual issues involving the
circumstances of the respondents
separation from employment could
only be properly addressed and
resolved in such proceedings
Macaraya applied for employment as
a dressmaker with Mars International
Manpower, Inc. She paid the
necessary recruitment fee and signed
a two year-contract. Unknown to her,
Mars submitted to POEA an overseas
contract stating that Macaraya would
be employed as a domestic helper.
She was deployed to Riyadh, Saudi
Arabia and was made to work as a
domestic helper despite her
objections. After 3 months and 13
days, she was dismissed by her
employer, paid a measly sum, and
repatriated to the Philippines. She
filed for illegal dismissal and money
claims before the POEA. Mars
impleaded ABD as the latter became
the accredited recruitment agency of
M.S. Al Babtain Recruitment Office by
virtue of a transfer of accreditation.
The POEA rendered its decision
finding that Macaraya has been

Hearing is not essential to all


instances of due process.

A formal trial type hearing is not at


all time and in all instances
essential to due process. It is
enough that the parties are given a
fair and reasonable opportunity to
explain their respective sides of the
controversy and to present
supporting evidence on which a
fair decision can be based. Rule V
or Rules of Procedure of NLRC (Sec
3-5)

The NLRC, in its decision, violated


due process. It is clear that NLRC
merely echoed the findings of the
POEA and contributed two pages,
including its conclusions. NLRC left
petitioner in the dark by its
failure to discuss why the facts it
pointed out in its memorandum on
appeal would not affect the
unqualified application of Section
6, Rule I, Book III of the POEA
Rules.

Every decision must be


accompanied by an explanation of
the factual and legal reasons that
led to the conclusions of the court.

Position papers in this case


were enough to comply
with requirement of
reasonable and fair
opportunity awarded to
employee

Nevertheless, the decision of the


NLRC is affirmed with
modifications.

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53

illegally dismissed and ordering ABD


and Al Babtain to pay Macaraya her
salaries and salary differentials. The
case was elevated to the NLRC.
The NLRC rendered its decision,
quoting the findings of the POEA
Administrator and rendering its
conclusion based therefrom. ABD
now contests the decision of the
NLRC for the failure of the NLRC to
make categorical rulings on the
issues it had raised in its
memorandum on appeal and,
therefore, the NLRC should be
charged with evasion of positive
duty or a virtual refusal to perform
the duty enjoined by law.
Macasero v Southern Industrial
Gases Phil

Petitioner filed before the National


Labor Relations Commission (NLRC)
Regional Arbitration Branch No. VII a
Complaint against respondent
company for illegal dismissal with
prayer for
reinstatement, backwages, unpaid
benefits, and attorneys fees, alleging
that in September 1998, he was
advised that his services were no
longer needed and was in fact
prevented from entering the
company premises

In illegal dismissal cases, the onus


of proving that the employee was
not dismissed or, if dismissed, that
the dismissal was not illegal, rests
on the employer, failure to
discharge which would mean that
the dismissal is not justified and,
therefore, illegal.

Phil Rural Reconstruction


Movement v. Pulgar

Pulgar was the branch manager of


PRRMs Tayabas Office when he got
involved in financial anomalies
involving the companys funds.
There was a contention as to
whether PRRM had the burden of
proving that Pulgars dismissal was
valid.

PRRM did not have the burden of


proving WON Pulgars dismissal
was valid because Pulgar had to
prove first that he was indeed
dismissed.

The appellate court ratiocinated


that before respondent company
could be burdened with proving
the legality of dismissal, there has
to be details of acts attributed to
[respondents] constituting illegal
dismissal if only to give [petitioner]
the opportunity to adduce
evidence to defend himself from or
disprove occurrence of such act or
inaction, but that petitioner failed
to do so. Respondents must not,
however, only rely on the seeming
weakness of petitioners evidence,
but must stand on the merits of
their own defense.
Before the employer must bear the
burden of proving that the
dismissal was legal, the employee
must first establish by substantial
evidence the fact of his dismissal
from service because if there is no
dismissal, then there can be no
question as to its legality or
illegality.

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54

Kulas Ideas & Creations et al v


Alcoseba & Arao-Arao

KULAS directed Juliet and Flordelinda


to explain and/or investigate an
alleged inventory discrepancy. It
thereafter suspended for gross
negligence of duties and
responsibilities.They were eventually
dismissed, so they filed a complaint
for illegal dismissal.

There was no substantial evidence


of misappropriation of company
funds to justify dismissal of
respondents.

Art 282 (b) and (c) of the LC


provide that an employer may
terminate an employee for "gross
and habitual neglect by the
employee of his duties" and for
"fraud." In both instances,
substantial evidence is necessary
for an employer to effectuate any
dismissal. Article 282 (b) imposes a
stringent condition before an
employer may terminate an
employment due to gross and
habitual neglect by the employee
of his duties. To sustain a
termination of employment based
on this provision of law, the
negligence must not only be gross
but also habitual.

Abosta Shipmanagement Corp v


NLRC & Flores

Respondent was blamed for


instigating the mass resignation of
the Filipino crew. When he tried to
explain that he was merely asked to
oversee the resignation of other crew
members, the agency said the action
itd taken in accepting his (mistaken)
resignation was final. Letters of the
Captain and Chief Officers were also
presented as evidence to prove his
instigation and to show that
petitioner was unruly, arrogant,
impolite and violent at times.
Minex is engaged in the retail of
semi-precious stones, selling them in
kiosks or stalls in various shopping
centers. Concepcion was employed
by Minex as a saleslady, and then a
supervisor, and then assigned to the
kiosk in SM Harrison Plaza, tasked to
hold the keys. At the close of one
business day, she and two salesladies
under her supervision conducted a
cash-count of the proceeds from the

SUBSTANTIAL EVIDENCE
SUPPORTED FLORES DISMISSAL IN
THIS CASE

Substantial evidence is more than


mere scintilla. It means such
relevant evidence as a reasonable
mind might accept as adequate to
support a conclusion, even if other
minds, equally reasonable, might
conceivably opine otherwise.

Concepcion was validly dismissed


despite dismissal of criminal case.

The result of the criminal has no


bearing on the validity of the
dismissal. The
quantum of proof required for
convicting an accused is thus
higher proof of guilt beyond
reasonable doubt than the
quantum prescribed for dismissing
an employee substantial
evidence. The loss of employment
occasions a consequence lesser

Lolita Conception v. Minex


Import/Minera Cort

In rejecting the letters


presented, the NLRC
misappreciated the
contents of the letter as
they did not contain a
mere accusation of
wrongdoing. The letters
made direct affirmative
statements on Flores
transgressions, all of which
only elicited angry denials
from him. Flores failed to
refute such charges

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55

University of the East v UE


Employees Association

sales of crystals for that particular


day. Three business days raked in a
total of P50,912.00. Concepcion
wrapped the money in a plastic bag
and placed it in a drawer of a locked
wooden cabinet. The following
morning, Concepcion called the
Assistant Manager, reporting the
loss of the proceeds kept in the
drawer. The assistant manager came
with a policeman who arrested
Concepcion, and had her investigated
and detained for one day. Eventually,
she was released upon the
instructions of the inquest
prosecutor. She filed for illegal
dismissal before the DOLE. Minex
filed for qualified theft before the
OCP. The Assistant Prosecutor
rendered a resolution finding
probable cause for qualified theft
and recommending the filing of an
information. She was thus charged
accordingly.
It appears from the records that prior
to school year (SY) 1983-1984, the
70% incremental proceeds from
tuition fee increases as mandated by
Presidential Decree No. 451 (P.D. No.
451), as amended, was distributed by
UE in proportion to the average
number of academic and nonacademic personnel. The distribution
scheme became the subject of an
Agreement dated October 18, 1983
signed by the management, faculty
association and respondent. Starting
SY 1994-1995, however, the 70%
incremental proceeds from the
tuition fee increase was distributed
by UE to its covered employees
based on a new formula of
percentage of salary.

than the loss of personal liberty,


and may thus call for a lower
degree of proof.

The Court agrees with petitioner


UE that the change in the
distribution of the 70%
incremental proceeds from tuition
fee increase from equal sharing to
percentage
of salaries is not a diminution of
benefits. Its distribution to covered
employees based on equal sharing
scheme cannot be considered to
have ripened into a company
practice that the respondents have
a right to demand.
The Court agrees with UE and
holds that UEEA's right to question
the distribution of the incremental
proceeds for SY 1994-1995 has
already prescribed. Article 291 of

Generally, employees have a


vested right over existing benefits
voluntarily granted to them by
their employer, thus, said benefits
cannot be reduced, diminished,
discontinued or eliminated by the
latter. This principle against
diminution of benefits, however, is
applicable only if the grant or
benefit is founded on an express
policy or has ripened into a
practice over a long period of time
which is consistent and deliberate.
It does not contemplate the
continuous grant of unauthorized
or irregular compensation but it
presupposes that a company
practice, policy and tradition
favourable to the employees has

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56

the Labor Code provides that


money claims arising from an
employer-employee relationship
must be filed within three (3) years
from the time the cause of
action accrued. In the present
case, the cause of action accrued
when the distribution of the
incremental proceeds based on
percentage of salary of the
covered employees was discussed
in the tripartite meeting held on
June 19,1995. UEEA did not
question the manner of its
distribution and only on April 27,
1999 did it file an action based
therein. Hence, prescription had
set in.

been clearly established; and that


the payments made by the
company pursuant to it have
ripened into benefits enjoyed by
them. The test or rationale of this
rule on long practice requires an
indubitable showing that the
employer agreed to continue giving
the benefits knowing fully well that
said employees are not covered by
the law requiring payment thereof.
In sum, the benefit must be
characterized by regularity,
voluntary and deliberate intent of
the employer to grant the benefits
over a significant period of time.

While the law looks with disfavor


upon releases and quitclaims by
employees who are inveigled or
pressured into signing them by
unscrupulous employers seeking to
evade their legal responsibilities, a
legitimate waiver representing a
voluntary settlement of a laborer's
claims should be respected by the
courts as the law between the
parties.
While the law looks with disfavor
upon releases and quitclaims by
employees who are pressured into
signing them by unscrupulous
employers seeking to evade their
legal responsibilities, a legitimate
waiver representing a voluntary
settlement of a laborer's claims
should be respected by the courts
as the law between the parties.

Talam v NLRC

Talam was a computer programmer


for The Software Factory Inc. He was
dismissed pursuant to a
retrenchment program undertaken
by said company. Following his
dismissal, he signed a release and
quitclaim.

Talams signing of a release and


quitclaim should have been a bar
to his filing of a complaint against
his former employer since he was
not an unlettered employee who
did not know what he was signing.

Hypte R Aujero v Phil


Communications Satellite Corp

Petitioner applied for early


retirement, which was approved. He
executed a Deed of Release and
Quitclaim in Philcomsats favor. 3
years later, petitioner filed a
complaint for unpaid retirement
benefits, claiming that the
discrepancy between the actual
amount of his retirement pay vis a vis
his supposed settlement for all his
claims is unconscionable, which is
more than enough reason to declare
his quitclaim as null and void.

Absent any evidence that any of


the vices of consent is present and
considering
the petitioners position and
education, the quitclaim executed
by the petitioner constitutes a
valid and binding agreement.

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57

Jobel Enterprises v NLRC &


Martinez

Lacrote v Incion

Quiambao v NLRC

Petitioners were required to post


cash or surety bond before appeal
could be heard before the NLRC.
They complied by posting a surety
bond but Martinez questioned its
effectivity. Jobel presented a joint
declaration by the companys
authorized representative and the
EVP of the surety company and other
documents as well. NLRC dismissed.
CA dismissed appeal because
petitioners submitted a PHOTOCOPY
of the assailed NLRC decision

Merits of the case should be heard


despite the failure to comply with
technicalities. Remanded.

Lacorte was hired by Asean


Fabricators, Inc. as a warehouseman.
He offered to buy some obsolete,
defective, and non-usable junk from
the company. When he was about to
bring out the purchased items, it was
discovered that he was carrying more
than what he bought and that the
items were not junk. Some were
even brand new and usable. A case
for qualified theft has been filed, but
was dismissed on account of
insufficiency of evidence. Asean filed
an application for clearance to
terminate the services of Lacorte.
This was granted through the
issuance of an Order. Lacorte now
questions the validity of the Order,
attributing grave abuse of discretion
on the part of the issuing Deputy
Minister of Labor (Inciong).
Quiambao was hired as the
company's manager in the
Tuguegarao branch. In April 1984, a
financial and performance audit
made by the Central Office showed
the Tuguegarao Branch of which he
was the Manager to be in a state of

Lacorte's petition to invalidate the


Order should not be granted. He
only submitted affidavits to prove
his claim after more than a year
from the initial hearing, when the
case was already on appeal. All
that petitioner presented were his
and a fellow employee's selfserving affidavits purportedly
showing that his union activities
prompted his termination. This
quantum of evidence does not
satisfy the substantiality
requirement.

NLRC forgot that it gave company


an additional unextendible 10 days
to file an additional cash/surety
bond in remaining balance.
Company complied with the 10
day period. IT also issued the joint
declaration and other documents
authorizing the effectivity of the
bond.

Petitioner is right that the filing of


a supersedeas bond is
indispensable to the perfection of
an appeal in cases which, like the
present one, involve monetary
awards and that because Central
Cement failed to comply with this

CA should have at least considered


the merits as the SC did in
Gutierrez v Sec of DOLE where SC
held that while what were
submitted were mere photocopies,
there was substantial compliance
with the rules since petitioner
attached CTC of questioned orders
to her Supplemental Motion for
Reconsideration. CAs overly rigid
application of the rules of
procedure SACRIFICED SUBSTANCE
TO FORM in a situation where the
petitioners recourse was not
patently frivolous or meritless
Absence or lack of substantial
evidence to prove a claim warrants
the dismissal of the case.

It is true that, in some cases, this


Court relaxed the requirement of
posting supersedeas bond for the
perfection of an appeal. But the
decisions in those cases were
justified by the fact that there was
substantial compliance with the

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58

Cruz v Coca-Cola Bottlers Phils

Miguel Barairo v OP & MST


Marine

disarray and chaos. On May 25,


1984, petitioner was suspended for
an indefinite period for poor
performance in extending credit to
customers, violation of company
rules and regulations and gross
negligence. As a result of further
investigation petitioner was charged
with estafa before the Provincial
Fiscal of Tuguegarao, while a civil
case for collection was brought
against him in the Regional Trial
Court of Makati. , the case was
eventually dismissed by the Regional
Trial Court of Tuguegarao because of
the failure of the prosecution
witnesses to appear. The civil suit
filed by Central Cement was likewise
dismissed by Branch 60 of the
Regional Trial Court of Makati for
failure of Central Cement to prove its
case against petitioner Quiambao.

requirement, the decision of the


Labor Arbiter, finding Central
Cement guilty of the illegal
dismissal of petitioner, became
final and executory. Art. 223
expressly provides that In case of
a judgment involving a monetary
award, an appeal by the employer
may be perfected only upon the
posting of a cash or surety bond
issued by a reputable bonding
company duly accredited by the
commission in the amount
equivalent to the monetary award
in the judgment appealed from.

rule, so that on balance, technical


considerations had to give way to
considerations of equity and
justice. In the case at bar, no
similar justifications exist excusing
Central Cements failure to comply
with the rule on mandatory posting
of supersedeas bond.

Cruz was a driver for respondent


company who was caught loading 30
additional cases of canned softdrinks
on his truck without securing the
necessary permits. He was dismissed
on that basis. He filed an illegal
dismissal complaint against CocaCola based on his alleged good faith
in committing said violation.
POEA penalized petitioner with one
year suspension from overseas
deployment upon a finding that his
refusal to complete his contract
aboard the M/T Haruna constituted a
breach of contract. Sec of Labor
shortened his suspension from 1 year
to 6 months as it was his first offense.
The Office of the President dismissed

His dismissal was valid. According


to the court, several factors
militate against petitioners claim
of good faith, primary of which is
Cruzs length of service, which
spans almost 15 years.

The longer an employee stays in


the service of the company, the
greater is his responsibility for
knowledge and compliance with
the norms of conduct and the code
of discipline in the company.

The proper remedy to question


orders of Sec. of Labor is a Petition
for Certiorari under Rule 65, not
via an appeal to the OP.

Appeals to the OP in labor cases


have indeed been eliminated,
except those involving national
interest over which the
President may assume jurisdiction.

The consequence of private


respondents failure to comply
with the mandatory requirement
for the perfection of the appeal
was to render the decision of the
Labor Arbiter final and executory,
and to place it beyond the power
of the NLRC to review and, even
more so, to reverse.

Petitioner's appeal of the


Secretary of
Labor's Decision to the OP did not
toll the running of the
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59

Mindanao Times Corp v


Confesor

University Plans Inc v Solano

the petitioners appeal for lack of


jurisdiction. The OP held that appeals
to it in labor cases, except those
involving national interest, have been
eliminated.

period, hence, the assailed


Decisions of the Secretary of Labor
are deemed to
have attained finality.

Mitchel Confesor (respondent) was


employed on May 1998 by
petitioner, publisher of a newspaper
of general circulation in Mindanao
and Davao City. He became
petitioners Associate Editor in six
months. Respondent resigned from
petitioner on June 17, 2003.
He filed a verified complaint before
the Labor Arbiter for payment of
separation pay and pro-rated 13th
month pay for 2003. By Decision of
January 19, 2004, the Labor Arbiter,
finding that respondent was
constructively dismissed, ordered
petitioner to pay him P71,909.77
representing backwages, as well as
separation pay and 10% of the total
award as attorneys fees.
In compliance with the appeal bond
requirement, petitioner deposited
the amount of P71,909.77 with the
United Coconut Planters Bank and
surrendered to the NLRC the
passbook covering
the deposit, along with a Deed of
Assignment it executed assigning the
proceeds of the deposit in favor of
respondent and authorizing the
NLRC to release the same in the
event that the Labor Arbiters
Decision becomes final and
executory.
Respondents in this case filed a
complaint for illegal dismissal against
University Plans. LA found the latter

Article 223 of the Labor Code


provides that an appeal by the
employer to the NLRC from a
judgment of a labor arbiter which
involves a monetary award may be
perfected only upon the posting of
a cash or surety bond issued by a
reputable bonding company duly
accredited by the NLRC, in an
amount equivalent to the
monetary award in the judgment
appealed from.

Further, Sec. 6 of the same Rules


provides:
SECTION 6. BOND. In case the
decision of the Labor Arbiter or the
Regional Director involves a
monetary award, an appeal by the
employer may be perfected only
upon the posting of a cash or
surety bond. The appeal bond
shall either be in cash or surety in
an amount equivalent to the
monetary award, exclusive of
damages and attorneys fees.

The NLRC may reduce University


Plans bond.

The exercise of the authority to


reduce the bond is not a matter of
right on the part of the movant,

Clearly, an appeal from a


judgment as that involved in
the present case is
perfected only upon the
posting of a cash or surety
bond.

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60

guilty. Upon appeal, the company


also filed a motion to reduce bond
which was denied by the NLRC
pursuant to Art. 223 of the LC and in
accordance with its finding that the
company cannot post such bond as
required from it.

Lopez v NLRC

Complainant (a psychometrician) was


alleged to have uttered indecent and
obscene remarks against respondent
Fr. Lao. As a result, the complainant
was suspended. She was
subsequently investigated and
dismissed on grounds of serious
misconduct, commission of a crime
(grave oral defamation),
insubordination, unfaithfulness to
employers interest, quarrelling and
challenging to a fight and loss of
confidence. The complainant
amended her complaint to illegal
dismissal. NLRC: there was illegal
dismissal due to absence of just
cause and due process but ordered
private respondent to grant
separation pay in lieu of
reinstatement. Petitioner elevated
the case by petition for certiorari,
seeking reinstatement to her former

but lies within the sound discretion


of the NLRC upon a showing of
meritorious grounds.
Meritorious grounds include:
(1)There was substantial
compliance with the Rules;
(2) The surrounding facts and
circumstances constitute
meritorious grounds to reduce the
bond;
(3) A liberal interpretation of the
requirement of an appeal bond
would serve the desired objective
of resolving controversies on the
merits; or
(4) The appellants, at the very
least, exhibited their willingness
and/or good faith by posting a
partial bond during the
reglementary period.
The respondent school failed to
establish clear and valid cause of
termination thus the dismissal is
considered illegal HOWEVER
petitioner should not be
reinstated. Since reinstatement
would not be to the best interest
of the parties,
in lieu thereof, separation pay
suffices.

Generally, the remedy for illegal


dismissal is the reinstatement of
the employee to her former
position without loss of seniority
rights and the payment of
backwages. However, there are
instances as when
reinstatement is not a viable
remedy as where the relation
between the employer and the
employee had been severely
strained that is not advisable to
grant reinstatement.

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61

Asian Terminals Inc v Villanueva

Composite Enterprises v
Caparoso

Johnson and Johnson v Johnson

position.
Case for illegal dismissal. LA ordered
reinstatement of respondents to
their former or equivalent positions
and the payment of backwages to
respondents from the time of their
illegal dismissal up to the time of
their reinstatement. NLRC affirm
which became final and executory.
Present controversy arose when
respondents filed motions and
sought additional backwages alleging
that MPSI did not reinstate them to
their former/equivalent positions.

Caparoso and Quindipan were


employed as Composite's
deliverymen until they were
terminated. The two filed for illegal
dismissal. The Labor Arbiter rendered
a decision in favor of the
respondents, ordering their
reinstatement. Composite prayed
that separation pay be granted
instead as reinstatement was no
longer possible due to the
extinguishment of the previous
positions occupied by respondents
on account of the retrenchment
program undertaken by Composite.
The Labor Arbiter issued a Writ of
Execution directing the Sheriff to
effect respondents' reinstatement.
Consistent with its stand that
physical reinstatement was no longer
possible, Composite reinstated
respondents into its payroll,
conditioned on the NLRC's ruling on
its motion to be allowed to pay
separation pay in lieu of
reinstatement.
In a complaint for illegal dismissal,

YES they reinstated employees.


Petitioners were able to present
evidence (memoranda and roster)
evincing reinstatement to exact
positions.
Reinstatement means restoration
to the former position occupied
prior to dismissal or to
substantially equivalent positions.
It does not mean promotion. Just
because their contemporaries are
already occupying higher positions
does not automatically entitle
respondents to similar positions.
Composite only submitted as
evidence the notice of its intention
to implement a retrenchment
program, which it sent to the
Department of Labor and
Employment. It did not submit its
financial statements duly audited
by an independent external
auditor. Its failure to do so
seriously casts doubt on its claim
of losses and insistence on the
payment of separation pay.
Respondents should thus be
reinstated.

ILLEGALLY DISMISSED EMPLOYEE

Reinstatement presupposed that


the previous position from which
one had been removed still exists,
or that there is an unfilled position
which is substantially equivalent or
of similar nature as the one
previously occupied by the
employee. It means restoration to
a state/condition from which one
had been removed or separated.

Payment of separation pay as a


substitute for reinstatement is
allowed only under exceptional
circumstances, viz: (1) when
reasons exist which are not
attributable to the fault or are
beyond the control of the
employer, such as when the
employer -- who is in severe
financial strait, has suffered serious
business losses, and has ceased
operations -- implements
retrenchment, or abolishes the
position due to the installation of
labor-saving devices; (2) when the
illegally dismissed employee has
contracted a disease and his
reinstatement will endanger the
safety of his co-employees; or, (3)
where a strained relationship exists
between the employer and the
dismissed employee.

Reinstatement is the
restoration to a state or
condition from which one
has been removed or
separated. The intent of the
law in making a
reinstatement order
immediately executory is
much like a return-to-work
order, i.e., to restore the
status quo in the workplace
in the meantime that the
issues raised and the proofs
presented by the
contending parties have not
yet been finally resolved.

GENERAL RULE: it is a well-

Petitioners are mistaken in

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62

Office and Sales Union

Retuya v Hon Dumarpa

NLRC ruled that respondents were


entitled to reinstatement. Petitioners
filed motion to set case for
conference manifesting their
willingness to pay respondents
separation pay and other monetary
benefits. Respondents refused and
sought for immediate reinstatement
to former positions. NLRC directed
reinstatement. CA affirmed NLRC

Insular Builders, Inc. is a familyowned corporation managed and


operated principally by Antonio
Murillo, father, and his son, Rodolfo
Murillo. Petitioners are workers who
have rendered services in various
corporations of Antonio and Rodolfo.
At the height of the feud between
Antonio and Rodolfo, the former
discharged the latter from his

entrenched rule that an illegally


dismissed employee is entitled to
reinstatement as a matter of right
EXCEPTION: But when
reinstatement is not feasible,
expedient or practical as where
reinstatement would only
exacerbate the tension and
strained relations between the
parties or where the relationship
between the employer and
employee has been unduly
strained by reason of their
irreconcilable differences,
particularly where the illegally
dismissed employee held a
managerial/key position in the
company, it would be more
prudent to order payment of
separation pay instead of
reinstatement

Reinstatement is no longer
possible; hence, the payment of
separation pay and backwages
should be made instead.
Reinstatement is no longer
feasible as Insular Builders, Inc. has
already ceased operations. Instead
of reinstatement, the Labor Code
provides for an alternative relief to
reinstatement which may be

holding that they have the


prerogative to choose
whether to reinstate
respondents to their former
positions or just to pay their
monetary award
Neither party can claim that
it has the categorical right
to choose between
reinstatement and payment
of monetary award
NLRC ultimately has the
authority to execute its
judgment and settle any
issue that may arise
pertaining to the manner of
details of implementing its
judgment

IN OTHER WORDS: The payment of


separation compensation in lieu of
the reinstatement of an employee
who was illegally dismissed from
work shall be allowed only if the
employer can prove the existence
of circumstances showing that
reinstatement will no longer be for
the mutual benefit of the employer
and employee.
Employees terminated due to
business closure are entitled to
either: (1) reinstatement +
backwages; or (2) separation pay,
should reinstatement be no longer
possible, + backwages

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63

Divine Word High School v NLRC

Espejo v NLRC

position as manager of Insular


Builders, Inc. Petitioners were told to
temporarily stop working. Antonio
dismissed petitioners and reported
the matter to the Department of
Labor and Employment (DOLE).
Petitioners were however made to
continue their work, rendering the
same services, in the same place,
locality and at the same office but
under a different company, the
Queen City Builders, Inc., managed
and controlled by Rodolfo.
Petitioners filed a complaint for
illegal dismissal, non-payment of
wages, 13th month pay, and
retirement pay (for Dayson).
Respondent Catena was a high school
teacher for Divine Word who filed a
complaint for illegal dismissal after
having been terminated from service
because of his husbands (principal of
said school) immoral conduct. There
was a contention as to WON she
should be reinstated.
Espejo resigned when the Board of
Directors decided to sell his car in
order to meet the capital
requirements of the Insurance
Commission. During a subsequent
meeting, petitioner asked for a
reconsideration of the decision or
else his resignation would be
irrevocable. He later received a letter
accepting his resignation. LA ordered
his reinstatement, backwages and
attorneys' fees. NLRC deleted award
for reinstatement as petitioner was
already 60 years old.

granted to an illegally dismissed


employee: separation pay. The
amount of backwages shall be
computed from the time of their
illegal termination up to the time
of the cessation of the business
operations.

While the court upheld the


illegality of her dismissal, it still
concluded that her reinstatement
as teacher would not be proper.

The court may opt to award


separation pay in lieu of
reinstatement if the latter would
create antagonism between the
employer and the employee.

Petitioner not entitled to


reinstatement. An employee held
to be illegally dismissed cannot be
reinstated if he already reached
the age of 60 years at the time of
his second complaint in the LA's
office. Generally, an illegally
dismissed employee who cannot
be reinstated is granted separation
pay and backwages. However
considering that petitioner
hasalready reached the statutory
retirement age of 60, petitioner is
entitled only to backwages.

The payment of backwages is a


form of relief that restores the
income lost by reason of the
unlawful dismissal; separation pay,
in contrast, is oriented towards the
immediate future, the transitional
period the dismissed employee
must undergo before locating a
replacement job.

The law recognizes as valid


any retirement plan,
agreement or management
policy regarding retirement
at an earlier or older age
but if the company does not
have any retirement plan
for its employees, Sec. 13,
Book IV, OR of the LC will
apply. It provides that in the
absence of a retirement
plan, agreement or policy
an employee may be retired
upon reaching the age of 60
years which means that an
employee may retire, or
may be retired by his
employer, upon reaching

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64

Wensha Spa Center Inc v Loreta


Yung

Respondent claims she was dismissed


because petitioner's Feng Shui
master stated her Chinese Zodiac was
a mismatch to the company's office.
Petitioner claims she was dismissed
for loss of trust and confidence as
respondent allegedly spread gossip
and rumors around the office.
Respondent thought she was on a
one-month paid leave but petitioner
had not informed her they decided to
terminate her services. When
respondent reported for work,
invectives were exchanged and she
was only informed of their intention
to terminate her then.

Reinstatement was no longer


feasible as a remedy due to the
doctrine of strained relations.

DUP Sound Phils v CA, Cirilo A


Pial

Pial was an employee of DUP


(engaged in the business of recording
cassette tapes for various recording
companies for 7 months. He was reemployed by DUP and was given the
job of mastering tape. He absented
from work due to sickness. When he
got well the following day and was
ready for work, an instruction from
Tan prohibited him from reporting
back to work. After three weeks, he
was told that he was no longer
allowed to work. He filed for illegal
dismissal. The Labor Arbiter ruled in
his favor and instructed DUP to
reinstate him, along with the grant of
other reliefs. DUP reinstated him not
as mastering tape, but as bodegero.
He refused to report to work.
Ranara was working as a driver for
the respondent company. One day,
he was told that he is dismissed from
work and cannot come back
anymore. When he returned the next
day, he was not allowed entry to the

Pial's assignment to a different job,


as well as transfer of work
assignment without any
justification therefor, cannot be
deemed as faithful compliance
with the reinstatement order. The
resulting circumstances show that
reinstatement would be
impractical and would hardly
promote the best interest of the
parties. Hence, separation pay
instead.

Ranara v NLRC

It is clear that the petitioner was


illegally dismissed without even
the politeness of a proper notice.
Without cause and without any
investigation, formal or otherwise,
Ranara was simply told that he

Under the law and jurisprudence,


an illegally dismissed employee is
entitled to two reliefs: backwages
and reinstatement, which are
separate and distinct. If
reinstatement would only
exacerbate the tension and further
ruin the relations of the
employer/employee or if their
relationship has been duly strained
due to irreconcilable differences,
particularly where the illegally
dismissed employee held a
managerial or key position in the
company it would be prudent to
order payment of separation pay
instead of reinstatement
Reinstatement means restoration
to a state or condition from which
one had been removed or
separated. The person reinstated
assumes the position he had
occupied prior to his dismissal.

The fact that his employer later


made an offer to re-employ him
did not
cure the vice of his earlier arbitrary
dismissal. The wrong had been
committed and the harm done.

60.
SC ruled on facts as it was
an exceptional circumstance
(NLRC and CA's factual
findings greatly differed)
and favored respondent as
it was more consistent and
clearly based on established
fact. Moreover, company
failed to comply with twinnotice requirement. Private
respondents, heads of the
company, not considered
solidarily liable since no
finding of bad faith, only
negligence and bad
judgment.
Reinstatement presupposes
that the previous position
from which one had been
removed still exists, or that
there is an unfilled position
which is substantially
equivalent or of similar
nature as the one previously
occupied by the employee."

The wrong had been


committed and the harm
done. Notably, it was only
after the complaint had
been filed that
it occurred to Chang, in a

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65

Juanito Garcia v PAL

company. Ranara filed a complaint to


the Labor Arbiter. Respondents claim
that Ranara abandoned his work.

should not report back for work


the following day. When he did so
just the same, thinking she had
only spoken in jest, he found that
somebody else had been
employed in his place. When he
protested his replacement, he was
even scolded for being "hardheaded" and not accepting his
dismissal.

Garcia and Dumago were employees


of PAL who were dismissed for
allegedly sniffing shabu within the
companys premises. While the LA
found in favor of Garcia and Dumago
and ordered their reinstatement, the
NLRC subsequently reversed said
decision. Prior to the employees
filing of a complaint, PAL was placed
under rehabilitation proceedings by
SEC.

While the court upheld the Air


Phils. Corp v. Zamora doctrine and
discarded the Genuino v. NLRC
doctrine in this case, it still held
that Garcia and Dumago may not
collect their wages during the
period between the LAs order of
reinstatement pending appeal and
the NLRC decision overturning the
LAs decision since PAL was under
rehabilitation proceedings.

Notably, it was only after the


complaint
had been filed that it occurred to
Chang, in a belated gesture of good
will, to invite Ranara back to work
in his store. Chang's sincerity is
suspect. We doubt if his offer
would have been made if Ranara
had not complained against him.
At any rate, sincere or not, the
offer of reinstatement could not
correct the earlier illegal dismissal
of the petitioner. The private
respondents incurred liability
under the Labor Code from the
moment Ranara was illegally
dismissed, and the liability did not
abate as a result of Chang's
repentance.The fact that his
employer later made an offer to reemploy him did not cure the vice of
his earlier arbitrary dismissal.
2 divergent jurisprudential views
regarding reinstatement pending
appeal or option of payroll
reinstatement:
Air Philippines Corp. v. Zamora
a dismissed employee whose case
was favorably decided by the LA is
entitled to receive wages pending
appeal upon reinstatement, which
is immediately executory. Unless
there is a restraining order, it is
ministerial upon the LA to
implement the order of
reinstatement and it is mandatory
on the employer to comply
therewith.

belated gesture of good will,


to invite
Ranara back to work in his
store. Chang's sincerity is
suspect. We doubt if his
offer would have been
made if Ranara had not
complained against him. At
any rate, sincere or not, the
offer of reinstatement could
not
correct the earlier illegal
dismissal of the petitioner.
The private
respondents incurred
liability under the Labor
Code from the moment
Ranara was illegally
dismissed, and the liability
did not abate as a result of
Chang's repentance.
Genuino v. NLRC
If the decision of the LA is
later reversed on appeal
upon the finding that the
ground for dismissal is valid,
then the employer has the
right to require the
dismissed employee on
payroll reinstatement to
refund the salaries s/he
received while the case was
pending appeal, or it can be
deducted from the accrued
benefits that the dismissed
employee was entitled to
receive from his/her
employer under existing
laws, collective bargaining
agreement provisions, and
company practices.
However, if the employee

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66

Myrna P Magana v Medicard Phil

College of Immaculate
Concepcion v NLRC & Atty Carlos

Petitioner was held to be illegally


dismissed by the LA and ordered
reinstated. NLRC affirmed and also
awarded reinstatement wages to
petitioner for respondent's failure to
reinstate her pending appeal as
required under the
Art 223, par. 2 of the LC. CA deleted
award of reinstatement wages as it
found petitioner's dismissal to be
with cause, noting that respondent's
failure to assign petitioner to a
suitable position within 6 months
after her replacement is "analogous
to a suspension of operations of an
enterprise" entitling the employee to
payment only of separation pay. The
issue is if the arbiter's order of
reinstatement remains unexecuted,
should its subsequent reversal on
appeal preclude execution?

Respondent is not only bound to


pay petitioner her reinstatement
wages, it is also precluded from
recovering the amount paid postreversal of the arbiter's
reinstatement order by the CA.

After his term as Dean was up,


respondent was appointed as fulltime professor without diminution of
benefits and was warned not to
teach in other schools without
permission of the Department Head
or practice law. Respondent argued
that teaching in another school was a
privilege allowed to him as dean and
administrator and that the case he
was handling was referred to him by
the VP of the school. The school did

NO REFUND RULE: Subsequent


reversal of the LA's findings does
not meant that respondent should
reimburse petitioner all the
salaries and benefits he received
pursuant to the immediate
execution of the LA's decision.

Article 223, par. 2 LC a police


power measure, is mandatory and
immediately executory

The requirement for employers to


pay wages to employees obtaining
favorable rulings in illegal dismissal
suits pending appeal is statutorily
mandated Art 223, par. 2. It gives
employers two options, namely, to
(1) actually reinstate the dismissed
employees or, (2)constructively
reinstate them in the payroll.
Either way, this must be done
immediately upon the filing of their
appeal, without need of any
executory writ.

If the employee has been


reinstated during the appeal
period and such reinstatement
order is reversed with finality, the
employee is not required to
reimburse whatever salary he
received for he is entitled to such,
more so if he actually rendered
services during the period. An
employer could not validly insist
that it is entitled to reimbursement
for the payment of salaries of a

was reinstated to work


during the pendency of the
appeal, then the employee
is entitled to the
compensation received for
actual services rendered
without need of refund.
The State may authorize an
immediate implementation,
pending appeal, of a
decision reinstating a
dismissed or separated
employee since that saving
act is designed to stop,
although temporarily since
the appeal may be decided
in favor of the appellant, a
continuing threat or danger
to the survival or even the
life ofthe dismissed or
separated employee and its
family.

Petitioner failed to
overcome the presumption
of regularity of the LA's
decision in asserting their
position that the LA's
decision was tainted with
fraud and graft and
corruption. It is also an
improper forum for such a
petition.

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67

not assign him any units to teach that


semester. He argues that this was
constructive dismissal. The LA found
that he was illegally dismissed and
ruled that he be reinstated. NLRC
reversed.

Lansangan v Amkor Tech Phil Inc

Aurora Land v NLRC

An anonymous e-mail was sent to the


General Manager of Amkor detailing
allegations of malfeasance on the
part of its supervisory employees
Lansangan and Cendaa (petitioners)
for "stealing company time." Amkor
thus investigated the matter.
Petitioners admitted their
wrongdoing. Amkor terminated
petitioners for "extremely serious
offenses" as defined in its Code of
Discipline. Petitioners filed a
complaint for illegal dismissal. The
Labor Arbiter found the dismissal to
be valid, but ordered the petitioners
reinstatement "as a measure of
equitable and compassionate relief"
owing mainly to petitioners prior
unblemished employment records,
show of remorse, harshness of the
penalty and defective attendance
monitoring system of respondent.
Amkor appealed the decision, with
respect to the order of
reinstatement, to the NLRC. Pending
the appeal, petitioners moved for the
issuance of a Writ of
Reinstatement. The LA then issued
an alias writ of execution.
Private respondent Honorio Dagui
was hired by Doa Aurora Suntay
Tanjangco in 1953 to take charge of

The case at hand has already been


resolved as to the validity of
petitioners dismissal. It has been
found that they have been validly
dismissed. Since Article 223 only
applies when the case is yet to be
resolved as to the validity of the
employee's dismissal, such rule
does not apply to this case.

We find private respondent to be a


regular employee, as provided in
Article 280 of the Labor Code.

reinstated employer pursuant to


the execution of the La's decision
by simply arguing that the LA's
decision is incorrect. (Art 223).
Moreover, the Refund Doctrine is
not only contrary to the principles
of social justice but poses illogical
and unjust effects (could be a
means for companies to
circumvent the law --> posting of
bonds)
Article 223 concerns itself with an
interim relief, granted to a
dismissed or separated employee
while the case for illegal dismissal
is pending appeal. It does not apply
where there is no finding of illegal
dismissal.

As can be gleaned from this


provision, there are two kinds of
regular employees, namely: (1)

Petitioners' liability for


separation pay ought to be
reckoned from 1982 when

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St. Michael's Ins. v Santos

Mercury Drug Co Inc v CIR

the maintenance and repair of the


Tanjangco apartments and
residential buildings. He was to
perform carpentry, plumbing,
electrical and masonry work. Upon
the death of Doa Aurora Tanjangco
in 1982, her daughter, petitioner
Teresita Tanjangco Quazon, took
over the administration of all the
Tanjangco properties. On June 8,
1991, private respondent Dagui
received the shock of his life when
Mrs. Quazon suddenly told him:
"Wala ka nang trabaho mula
ngayon," on the alleged ground that
his work was unsatisfactory. On
August 29, 1991, private respondent,
who was then already sixty-two (62)
years old, filed a complaint for illegal
dismissal with the Labor Arbiter.
Respondent allege that Dagui is
merely a job contractor and not their
regular employee.
Respondent teachers were employed
at St. Michaels when they were
dismissed after allegedly joining a
public rally against the school. The
CA, after sustaining NLRCs decision
saying that said teachers were indeed
illegally dismissed, went further as to
order the award of backwages to
them. St. Michaels was contending
that such was not valid as it has been
a time-honored doctrine that a party
who has not appealed cannot obtain
from the appellate court any
affirmative relief other than the ones
granted in the appealed decision.
Dayao tried to create a new union as
the existing union was not doing
anything to recover from the
management their overtime pay.
Because of this, he was told to resign.

those who are engaged to perform


activities which are usually
necessary or desirable in the usual
business or trade of the employer;
and (2) those who have rendered
at least one year of service,
whether continuous or broken,
with respect to the activity in
which they are employed.
Whichever standard is applied,
private respondent qualifies as a
regular employee.

The SC upheld the award of


backwages to respondents.
According to the court, the fact
that the NLRC did not award
backwages to the dismissed
teachers or that the teachers
themselves did not appeal the
NLRC decision does not bar the CA
from awarding backwages.

While as a general rule, a party


who has not appealed is not
entitled to affirmative relief other
than the ones granted in the
decision of the court below, the CA
is imbued with sufficient authority
and discretion to review matters,
not otherwise assigned as errors
on appeal, if it finds that their
consideration is necessary in
arriving at a complete and just
resolution of the case or to serve
the interests of justice or to avoid
dispensing piecemeal justice.

The employer was directed to pay


private respondent Dayao back
wages equivalent to one year,
eleven months, and fifteen days

The period of delay in instituting


this ULP charge with claim for
reinstatement and back wages,
although within the prescriptive
period, should be deducted from

petitioner Teresita Quazon,


as manager of Aurora Plaza,
continued to employ private
respondent. From 1953 up
to the death of Doa Aurora
sometime in 1982, private
respondent's claim for
separation pay should have
been filed in the testate or
intestate proceedings of
Doa Aurora. This is
because the demand for
separation pay covered by
the years 1953-1982 is
actually a money claim
against the estate of Doa
Aurora, which claim did not
survive the death of the old
woman. Thus, it must be
filed against her estate in
accordance with Section 5,
Rule 86 of the Revised Rules
of Court.

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Bustamante v. NLRC

Star Paper Corporation v Espiritu

He only resigned because he was told


that he would be laid-off anyway
whether or not he signed the
resignation papers. He only brought
the action for unfair labor practice 2
years and 15 days later. Main Issue:
How should his backwages be
computed?

without further disqualifications.

First Division of SC promulgated a


decision reversing the NLRC decision
and reinstating the LAs decision with
the modification that backwages
should be paid to petitioners from
the time of their illegal dismissal on
June 25 1990 up to the date of their
reinstatement. If reinstatement was
no longer feasible, one-month salary
shall be paid as ordered in the LAs
decision in addition to the adjudged
backwages. Private respondent now
moves to reconsider because
petitioners are not entitled to
recover backwages because they
were not actually dismissed as they
were probationary workers and
assuming they were entitled to
backwages, computation should not
start from cessation of work up to
actual reinstatement. Salary earned
elsewhere should be deducted.
Respondents worked in Stars paper
manufacturing business in various
capacities as machine operator,
bookbinding head and/or helper.
They refused to sign the ratification
of an addendum to an existing
Collective Bargaining Agreement

Court explained different laws


enacted over the years for
computation. RA 875 Industrial
Peace Act, PD 442 (Labor Code) RA
6715 amending Art 279 of the LC,

the liability of the employer to him


for back wages.
However to relieve employee from
proving his income during the
period he was out of the service
and the employer from submitting
counter-proofs, which may delay
the execution of the decision, the
employer in this case was directed
to pay private respondent Dayao
back wages equivalent to 1 year,
11 months, and 15 days without
further disqualifications.
LAW NOW
: An employee who is unjustly
dismissed from work shall be
entitled to reinstatement without
loss of seniority rights and other
privileges and to his full
backwages, inclusive of allowances
and to his other benefits or their
monetary equivalent computed
from the time his compensation is
withheld from him up to the time
of his actual reinstatement.

Backwages to be awarded
to an illegally dismissed
employee should not be
diminished/reduced by the
earnings derived by him
elsewhere during the period
of his illegal dismissal. The
underlying reason for this is
that the employee while
litigating the legality of his
dismissal must still earn a
living to support himself and
family while full backwages
have to be paid by the
employer as part of the
price/penalty he has to pay
for illegally dismissing his
employee
LEGISLATIVE INTENT: give
more benefits to workers

Reinstatement would have been


effective upon finality of the
decision of the CA. However, the
CA decision has been elevated to
the SC. The supposed actual
reinstatement, had reinstatement
been feasible, would have been

Full backwages, inclusive of


allowances, and other benefits or
their monetary equivalent, are
computed from the time the
employees compensation was
withheld from him up to the time
of his supposed actual

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Acesite Corp v. NLRC

Phil Aeolus Automotive United v


NLRC

which was intended to effect a


reduction in their leave benefits.
When they reported for work, they
were not allowed entry. They
received a Memorandum of Transfer
which they refused. They alleged that
their transfer to a provincial post
constituted constructive dismissal.
LABOR ARBITER: There was no
illegal/constructive dismissal, but
separation pay must be granted.
NLRC: LAs decision was affirmed. CA:
There was constructive dismissal.
Dismissed employees are entitled
toseparation pay and full backwages.
Gonzales was hired as chief of
Security of Manila Pavillion Hotel. He
took a 4-day sick leave, then a 12-day
vacation leave. Afterwhich, he file a
10-day emergency leave. The
emergency leave was disapproved
and he was required to report for
work the next day. However,
Gonzales did not report for work the
next day.

upon the finality of the SCs


decision. Hence, backwages should
be computed from the time the
respondents compensation was
withheld from them up to the time
of the finality of the SCs decision.

reinstatement.

There appears to have been no


just cause to dismiss Gonzales
from employment. As correctly
ruled by the Court of Appeals,
Gonzales cannot be considered to
have willfully disobeyed his
employer.

As for Gonzales petition before


this Court, he argues that the Court
of Appeals, absent any reason,
modified the decision of the NLRC
by deleting or eliminating the
other fringe benefits or their
monetary equivalent; that the
said court should not have given
Acesite the option to reinstate him
or not
since the case at bar does not fall
under circumstances for which
reinstatement is no longer possible

Cortez was a company nurse of Phil.


Aeolus who was dismissed on the
grounds of gross and habitual neglect
of duties, serious misconduct and
fraud or willful breach of trust. She
was claiming, however, that she was
the victim of their plant managers

She was entitled to such an award.


According to the court, for the
anxiety, the seen and unseen hurt
that Cortez suffered, Philippine
should also be made to pay her
moral damages, plus exemplary
damages, for the oppressive

Bases for awarding moral and


exemplary damages:
In moral damages, it suffices to
prove that the claimant has
suffered anxiety, sleepless nights,
besmirched reputation and social
humiliation by reason of the act

Gonzales was Chief of


Security, whose duty was to
manage the operation of
the security areas of the
hotel to provide and ensure
the safety and security of
the hotel guests, visitors,
management, staff and
their properties according
to company policies and
local laws. It cannot be
gainsaid that Gonzales
position is one of trust and
confidence, he being in
charge of the over-all
security of said hotel. Thus,
reinstatement is no longer
possible. In lieu thereof,
Acesite is liable to pay
separation pay of 1 month
for every year of service.

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Reyes v CA

M+W Zander Phil v Enriquez

partiality and sexual advances. There


was a contention as to such would
entitle her to an award of moral and
exemplary damages.

manner with which petitioners


effected her dismissal from the
service, and to serve as a
forewarning to lecherous officers
and employers who take undue
advantage of their ascendancy
over their employees.

complained of.
Exemplary damages, on the other
hand, are granted in addition to,
inter alia, moral damages "by way
of example or correction for the
public good" if the employer
"acted in a wanton, fraudulent,
reckless, oppressive or malevolent
manner."

Petitioner was retrenched. He


acknowledged verbal notice of
resignation and requested that he be
given the same benefits granted to
retrenched and resigned employees
of the company, consisting of
separation pay and the monetary
equivalent of his sick leave and
vacation leave and additional
benefits. He was awarded by the
lower courts (among other things)
attorneys' fees and moral and
exemplary damages.

He is not entitled to moral and


exemplary damages as
respondents were not shown to
have acted in bad faith. He,
however, is entitled to attorneys
fees equivalent to 10% of his total
monetary award.

Moral damages are recoverable


only where the act complained of
is tainted by bad faith or fraud, or
where it is oppressive to labor, and
done in a manner contrary to
morals, good customs, or public
policy.

In the case at bar, what was


withheld from petitioner was not
only his salary, vacation and sick
leave pay, and 13th month pay
differential, but also his separation
pay. Hence, pursuant to current
jurisprudence, separation pay
must be included in the basis for
the computation of attorneys
fees.

Exemplary damages may be


awarded only if the act was done
in a wanton, oppressive, or
malevolent manner.

Two concepts of attorney's


fees:
1. Ordinary- An an
attorneys fee is the
reasonable compensation
paid to a lawyer by his client
for the legal services he has
rendered to the latter. The
basis of compensation is the
fact of his employment by
and his agreement with the
client

Illegally dismissed. Respondent

In illegal dismissal cases, moral

2. Extraordinary- Attorneys
fees are deemed indemnity
for damages ordered by the
court to be paid by the
losing party in a litigation.
Instances when it may be
awarded are those
enumerated in Art 2208 CC
specifically par. 7 thereof
which pertains to actions
for recovery of wages, and
is payable not to the lawyer
but to the client, unless they
have agreed that the award
shall pertain to the lawyer
as additional compensation
or as part thereof. It is this
type that is contemplated in
Art 111 of the LC.
General manager of a

Respondent was accused of staging a

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"no work day" and using her position


to influence subordinates to oppose
the appointment of the company's
new GM. When she showed up at
work, she was placed under
preventive suspension, her personal
belongings were searched and she
was escorted from the premises like
a criminal. A notice was sent to her
subordinates that she was not
allowed in the company without an
authorized escort.

entitled to moral damages and


attorney's fees.

J Marketing Corp v Taran

Taran worked as credit


investigator/collector for J
Marketing Corporation. He informed
J Marketing's then OIC Branch
Manager of his intention to resign. A
memorandum was sent to him,
requiring him to submit a formal
resignation letter. He filed his
resignation letter, on account of his
verbal agreement with the company
that 100% separation pay would be
granted him. J Marketing failed to
pay him as agreed upon. He filed with
the NLRC a complaint for illegal
dismissal.

He is entitled to separation pay for


his loyalty and long service to the
company, not to mention the
representation of the OIC that he
would be given all the benefits due
him. Without the assurance of
payment of benefits, Taran would
not have tendered his resignation
letter.

BPI v NLRC

Respondent was the manager of BPI


San Pablo Laguna branch. When a
client asked for the details of her
account, it was found out that it was
lacking in amount. After an
investigation, it was found out that
the respondent was making
unauthorized withdrawals from the

The succeeding case of Toyota


Motor Phils. Corp. Workers
Association v. NLRC25 reaffirmed
the general rule that separation
pay shall be allowed as a measure
of social justice only in those
instances where the employee is
validly dismissed for causes other

damages are recoverable only


where the dismissal of the
employee was attended by bad
faith or fraud or constituted an act
oppressive to labor or was done in
a manner contrary to morals, good
customs or public policy.
Attorney's fees may be awarded
only when the employee is illegally
dismissed in bad faith and is
compelled to litigate or incur
expense to protect his rights by
reason of the unjustified acts of his
employer. (Manner of
suspension/dismissal was
"humiliating". Court ruled this was
performed in bad faith.)
Accordingly, separation pay may
be awarded only in cases when the
termination of employment is due
to: installation of labor-saving
devices; redundancy;
retrenchment; closing or cessation
of business operations; disease of
an employee and his continued
employment is prejudicial to
himself or his co-employees; when
an employee is illegally dismissed
but reinstatement is no longer
feasible. EXCEPTIONS: when
stipulated in the employment
contract or in the CBA; or when
sanctioned by established
employer practice or policy.

corporation should not be


made personally
answerable for the payment
of an illegally dismissed
employee's monetary
claims arising from the
dismissal unless he had
acted maliciously or in bad
faith in terminating the
services of the employee.
(Not proven it was accused
official in this case)

Verily, it may not be amiss to


emphasize that if an employee has
been dismissed for a just cause
under Article 282 of the Labor
Code, he is not entitled to
separation pay. In the instant case,
respondent was dismissed on the
ground of loss of trust and

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Triad Security and Allied Services


v Ortega

Palteng v UCPB

account of their clients. BPI


essentially questions the award of
separation pay. It argues that the
very existence of respondents
signature on the forged withdrawal
slips in such frequency and involving
huge amounts of money, transacted
beyond banking hours, and without
the presence of the clients, should be
sufficient to hold respondent liable
for fraud, thus negating the finding of
good faith.

than serious misconduct, willful


disobedience, gross and habitual
neglect of duty, fraud or willful
breach of trust, commission of a
crime against the employer or his
family, or those reflecting on his
moral character. These five
grounds are just causes for
dismissal as provided in Article 282
of the Labor Code.

confidence.

Respondent guards were formerly


employed by Triad Security who filed
a complaint for illegal dismissal.
After securing a favorable decision
with the LA, an order was issued
effecting for their reinstatement and
ordered the payment of backwages
(and to such further backwages as
they accrue until reinstatement order
is complied with by Triad Security),
and a separation pay computed in
the event reinstatement is no longer
feasible. Triad Security was only able
to satisfy the guards separation
payments. There was a contention as
to WON they were still liable for the
accrued backwages of said
employees even after paying their
separation pay.
Palteng was dismissed with forfeiture
of benefits for gross negligence and
dereliction of duties and grave abuse
of authority. The LA, the NLRC and
the CA unanimously found her
dismissal illegal. Thus, she claims that
she is entitled to the twin reliefs of
reinstatement (or payment of
separation pay if reinstatement is no
longer possible) and payment of
backwages. She adds that the

Dismissed employees are still


entitled to accrued backwages as
Art. 279 provide 2 separate and
distinct reliefs for an illegally
dismissed employee in the form of
backwages and reinstatement.

Backwages and separation pay are,


therefore, distinct reliefs granted
to one who was illegally dismissed
from employment. The award of
one does not preclude that of the
other as the court had, in proper
cases, ordered the payment of
both.

She is only entitled to separation


pay only, without backwages, since
she was not faultless in regard to
the offenses imputed against her.

Reinstatement and payment of


backwages are distinct and
separate reliefs given to alleviate
the economic setback brought
about by the employees dismissal.
The award of one does not bar the
other. Backwages may be awarded
without reinstatement, and
reinstatement may be ordered
without awarding backwages.

In a number of cases before,


the Court, despite ordering
reinstatement or payment
of separation pay in lieu of
reinstatement, has not
awarded backwages as
penalty for the misconduct
or infraction committed by
the employee.

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backwages should be computed from


the time she was illegally dismissed
on,
until the finality of the decision.
Business Day Information
Systems and Services v NLRC

Company went through


retrenchment, dismissed employees
in batches, eventually closing the
company. Employees dismissed at
different points were awarded
different separation pays. First batch
was given 1/2 month pay for every
year of service as separation pay.
Second and third batches were both
given 1 month pay per year of
service. Second and third batches
were also paid mid year bonuses.
First batch argues there was unlawful
discrimination in computation of
separation pay.

Employees entitled to salary


differentials/increase in separation
pay but not mid year bonuses.
(Mid year bonuses= act of
generosity)

San Miguel Corp v Javate

Javate was a casual employee of the


SMC. He figured in an accident and
was confined in the hospital.He was
on sick leave for a total of fifty six
(56) days. Subsequently, he filed for
several vacation leave but these were
denied for not having been filed 6
days prior to effectivity. SMC
"compulsorily retired" the former for
alleged exhaustion of sick leave
benefits based on the company's
Health, Welfare and Retirement Plan.

Javates having accepted the


benefits of the retirement plan
does not estop him from
challenging the validity of his
dismissal.

Samahan ng mg Manggagawa sa
Hyatt v Magsalin

On January 31, 2001, Hyatts General


Manager issued a Memorandum
informing all hotel employees that
hotel security have been instructed
to conduct a thorough bag inspection
and body frisking in every entrance
and exit of the hotel. Angelito
Caragdag, a waiter at the hotels Cafe

Separation pay shall be allowed as


a measure of social justice only in
those instances where the
employee is validly dismissed for
causes other than serious
misconduct or those reflecting on
his moral character. Here,
Caragdags dismissal was due to

Employer may not pay separation


benefits unequally to its lawfully
retrenched employees. There was
impermissible discrimination
against the private respondents in
the payment of their separation
benefits. The law requires an
employer to extend equal
treatment to its employees. It may
not, in the guise of exercising
management prerogatives, grant
greater benefits to some and less
to others. Management
prerogatives are not absolute
prerogatives but subject to legal
limits, CBAs or general principles of
fair play and justice. ART 283.
Employees who received their
separation pay are not barred from
contesting the legality of their
dismissal. The acceptance of those
benefits would not amount to
estoppel.

Grant of bonus is an
exclusive prerogative of
management. Employees
cannot complain they were
not given bonus while
others were given bonuses.

Caragdags dismissal being due to


serious misconduct, it follows that
he should not be entitled to
financial assistance. To rule
otherwise would be to reward him
for the grave misconduct he
committed.

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Equitable PCI Bank v Dompor

Phil Long Distance Tel v NLRC

Daniel Paduata v MECO

Al Fresco restaurant and a director of


the union, refused to be frisked by
the security personnel several times.
He was then suspended for 6 days as
according to Hotel's Code of
Discipline. When Mike Moral, the
manager of Hyatts Cafe Al Fresco
and Caragdags immediate superior,
was about to counsel two staff
members, Larry Lacambacal and
Allan Alvaro, at the training room,
Caragdag suddenly opened the door
and yelled at the two with an
enraged look. He was then
suspended for 7 days. Labor Arbiter
held that Caragdag was legally
dismissed but awarded 100,000
pesos financial assistance to him.
Dompor was employed by Equitable
PCI Bank as its branch manager
before he was dismissed for serious
misconduct and insubordination after
he was found to have not complied
with company policies regarding
acceptance of checks. There was a
contention as to WON separation pay
should be awarded in his favor.
Private respondent was dismissed
after she was found to have accepted
money without issuing a proper
receipt in order to expedite the
telephone installation applications of
2 customers. The LA and the NLRC
awarded her financial assistance
considering her long service to the
company.

several instances of willful


disobedience to the reasonable
rules and regulations prescribed by
his employer. Caragdags
infractions were not even spread
in a period of twelve (12) months,
but rather in a period of a little
over a month. A series of
irregularities when put together
may constitute serious
misconduct, which under Article
282 of the Labor Code, as
amended, is a just cause for
dismissal.

Employee started incurring several


absences supposedly due to
rheumatic arthritis after being
transferred to Meralcos Centra
Office in the Manila District to do

Dompor should not be awarded


separation pay.

Separation pay shall be allowed as


a measure of social justice only in
those instances where the
employee is validly dismissed for
cause other than serious
misconduct or wilful disobedience.

She is not entitled to financial


assisstance as she was dismissed
for dishonesty.

Separation pay shall be allowed as


a measure of social justice only in
those instances where the
employee is validly dismissed for
causes other than serious
misconduct or those reflecting on
his moral character. It should be
computed at the rate of one
month salary for every year of
service.

Employee did not comply with


notice requirements for sick leave
absence as indicated in the
Companys employee code.

Burden was on employee to prove


his absences were authorized and
excused. Employee failed to submit
any credible proof that he gave
prior notice of his absences or that

Paduata claims that shortly


before MERALCO issued its
notice of dismissal, it
offered him separation pay,
apparently to avoid a

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work as an Acting Stockman. Meralco


claims such absences were
unauthorized and unexcused since
the employee failed to submit the
required medical certificate after the
absences were incurred. An
investigation found the employee
ivolated the companys code of
employee dismissal and wrote the
employee informing him of his
dismissal from the service due to
absence.

AMA Computer College v Ignacio

Alba v Yupangco

Ignacio was employed by AMA as


Management Trainee. Eventually, he
was given a permanent status.
Pursuant to a renovation plan,
Ignacio started demolishing the
concrete partition wall of the
computer laboratory. The Audit
Department of AMA Computer
College, Inc. filed a complaint against
respondent, charging him with
"(t)hreatening to damage company
property, negligence or failure to
exercise adequate asset control
measures within ones area of
responsibility." He was terminated
from employment. He filed for illegal
dismissal before the Labor Arbiter,
impleading Aguiluz and Cruz, in their
capacity as AMACCI officials.
Querubin L. Alba and Rizalinda
D. De Guzman filed separate
complaints for illegal dismissal and
payment of retirement benefits
against Y.L. Land Corporation and
Ultra Motors Corporation,
respectively. Robert L. Yupangco was
impleaded in his capacity as
President of both corporations. The
Labor Arbiter held that respondents

No liability for Ignacios illegal


dismissal should attach to Aguiluz
and Cruz. The complaint pertaining
to them is dismissed.

he submitted the certificates


needed to justify them. He relied
solely on his own affidavit. Not
enough for the court in this case.

dispute with him.


Considering what the Court
said in Eastern Shipping
Lines, Inc. v. Sedan that
financial assistance may be
allowed as a measure of
social justice and
exceptional circumstances,
such may be extended to
Paduata who apparently
suffered from recurring
illness that prevented him
from doing his work

Unless they have exceeded their


authority, corporate officers are, as
a general rule, not personally liable
for their official acts, because a
corporation, by legal fiction, has a
personality separate and distinct
from its officers, stockholders and
members.

EXCEPTION: Corporate
directors and officers are
solidarily held liable with
the corporation, where
terminations of
employment are done with
malice or in bad faith; but
where there is an absence
of evidence that said
directors and officers acted
with malice or bad faith, as
in this case, the Court must
exempt them from any
personal liability for the
employees illegal
dismissal."

In labor cases, for instance, the


Court has held corporate directors
and officers solidarily liable with
the corporation for the
termination of employment of
employees done with malice or in
bad faith. From the October 25,
1999 Decision of the Labor Arbiter,
there is no finding or indication
that petitioners dismissal was
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liability is solidary.

effected with malice or bad faith.


Respondents liability could thus
only be joint, not solidary.
RETIREMENT
IBC is estopped from refusing to
pay employees taxes from
retirement benefits.

Intercontinental Broad Corp GR


162775 Oct 27 2006

Respondents are retired employees


of IBC seeking for tax exemption of
their retirement benefits pursuant to
their companys optional retirement
scheme.

Jaculbe v Siliman

Respondents retirement plan for its


employees provided that its
members could be
automatically retired "upon reaching
the age of 65 or after 35 years of
uninterrupted service to the
university." Petitioner contends that
the compulsory retirement was
tantamount to a dismissal and that it
violates the security of tenure clause
in the Constitution.

The Court found that the Plan was


not voluntary. Also, it cannot be
said to be part of petitioner's
employment contract as it was
implemented after she was
already hired. IN THIS CASE, it
violated the security of tenure
clause.

Reyes v NLRC

Petitioner seeks to add sales


commissions onto his basic salary for
computation of his retirement
benefits. Inclusion of such would
increase his retirement pay by
around P700,000.

Sales commissions excluded from


computation of retirement
benefits based on basic salary.

An agreement to pay taxes on the


retirement benefits as an incentive
to prospective retirees and for
them to avail of an optional
retirement scheme is not contrary
to law or public morals.
Retirement plans allowing
employers to
retire employees who are less than
the compulsory retirement age of
65 are not
per se repugnant to the
constitutional guaranty of security
of tenure. Art 287
of the LC permits employers and
employees to fix the applicable
retirement age
at below 60 years. However, such
must be voluntarily consented to
by the employee.
Any seeming inconsistencies
between Philippine Duplicators
and Boie Takeda Chemicals had
been clarified byt he Court in a
resolution. Commissions in PD
comprised a pre-determined
percentage and were properly
included in "basic salary". These
are not OT payments or profit
sharing payments nor any other
fringe benefit but a portion of the
salary structure which represents
an automatic increment to the
monetary value initially assigned to
each unit of work rendered by a
salesman. Different from BT case.
Medical reps not salesmen.
Commissions in this case were paid

Profit sharing payments


(commissions) explicitly
prohibited by Sec 5 of Rule
II of the Rules Implementing
the New Retirement Law
and PD 851, as clarified in
San Miguel Corp v Inciong.
In the absence of any
provision on optional
retirement in a CBA, other
employment contract or
employer's retirement plan,
an employee may optionally
reitre upon reaching the age
of 60 years or more but not
beyond 65 provided he has
served at least 5 years in
the establishment

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as productivity bonuses

Universal Robina Sugar Miling


corp v Caballeda

Enriquez Security Services v


Cabotaje

Caballeda worked as welder for


URSUMCO. A memorandum was
issued, establishing the company
policy on ""Compulsory Retirement""
of its employees. The memorandum
provides that all employees
corporate-wide who attain 60 years
of age on or before April 30, 1991
shall be considered retired on May
31, 1991. Henceforth, any employee
shall be considered retired 30 days
after he attains age 60. Subsequently,
RA No. 7641 was enacted, amending
Article 287 of the Labor Code.
Caballeda averred that URSUMCO
illegally dismissed him from
employment on when he was forced
to retire upon reaching the age of 60
years old.
Sometime in January 1979,
respondent Victor A. Cabotaje was
employed as a security guard by
Enriquez Security and Investigation
Agency (ESIA). On November 13,
1985, petitioner Enriquez Security
Services, Inc. (ESSI) was incorporated.
Respondent continued to work as
security guard in petitioners agency.
On reaching the age of 60 in July
1997,1 respondent applied for
retirement. Petitioner acknowledged
that respondent was entitled to
retirement benefits but opposed his
claim that the computation of such
benefits must be reckoned from
January 1979 when he started
working for ESIA. It claimed that the

RA 7641 may be applied


retroactively. URSUMCO failed to
prove that Caballeda was not
eligible for the retirement benefits
provided under RA 7641. He is
thus entitled to the benefits
therein provided.

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 law's
enactment but retroactively to the
time said employment contracts
have started. Two essential
requisites in order that R.A. 7641
may be given retroactive effect: 1)
the claimant for retirement
benefits was still in the employ of
the employer at the time the
statute took effect; and 2) the
claimant had complied with the
requirements for eligibility for such
retirement benefits under the
statute.

Petitioners insistence that only


1/12 of the service incentive leave
(SIL) should be included in the
computation of the retirement
benefit has no basis. Section 1, RA
7641 provides:

Section 5.2, Rule II of the


Implementing Rules of Book VI of
the Labor Code further clarifies
what comprises the "1/2 month
salary" due a retiring employee:
5.2 Components of One-half (1/2)
Month Salary. For the purpose of
determining the minimum
retirement pay due an employee
under this Rule, the term "one-half
month salary" shall include all the
following:
(a) Fifteen (15) days salary of the
employee based on his latest salary
rate. x x x;
(b) The cash equivalent of not
more than five (5) days of service
incentive leave;

x x x Unless the parties provide for


broader inclusions, the term onehalf (1/2) month salary shall mean
fifteen (15) days plus one-twelfth
(1/12) of the 13th month pay and
the cash equivalent of not more
than five (5) days of service
incentive leave. x x x

concerned. 2 types of
retirement: compulsory (65)
and optional (60 but not
beyond 65, provided he
worked 5 years at the
establishment).

The foregoing rules are


clear that the whole 5 days
of SIL are included in the
computation of a retiring
employees pay.

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benefits must be computed only


from November 13, 1985 when ESSI
was incorporated.

(c) One-twelfth of the 13th month


pay due an employee;
(d) All other benefits that the
employer and employee may agree
upon that should be included in
the computation of the employees
retirement pay.

Ozales v Unilab

Oxales was a retired employee of


Unilab who insisted that his bonuses,
allowances and 13th month pay
should have been included in the
computation of his retirement
benefits. However, Unilab argues to
the contrary pursuant to the
companys United Retirement Plan.

The URP of Unilab should be


upheld. In this case, RA 7641 does
not apply in view of the URP which
gives to the retiring employee
more than what the law requires.

A retirement plan in a company


partakes the nature of a contract,
with the employer and the
employee as the contracting
parties. It creates a contractual
obligation in which the promise to
pay retirement benefits is made in
consideration of the continued
faithful service of the employee for
the requisite period.

Gerlach v Reuters

Petitioner worked for Reuters. She


worked in different countries, though
her homebase was always Manila.

Petitioners retirement benefits


must be based on her notional
Philippine salary. She was always

3 Kinds of
Retirement Schemes:
1. compulsory and contributory in

"The Retirement Pay Law,"


only applies in a situation
(1) there is no collective
bargaining agreement or
other applicable
employment contract
providing for retirement
benefits for an employee; or
(2) there is a collective
bargaining agreement or
other applicable
employment contract
providing for retirement
benefits for an employee,
but it is below the
requirements set for by law.
The reason for the first
situation is to prevent the
absurd situation where an
employee, who is otherwise
deserving, is denied
retirement benefits by the
nefarious scheme of
employers in not providing
for retirement benefits for
their employees. The reason
for the second situation
in the maxim pacta
private juri public derogare
non possunt. Private
contracts cannot derogate
from the public law.

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Whenever she was transferred, she


would receive a letter from Reuters
appraising her of the details her
benefits which was explicitly said to
be based on her notional salary. She
now claims that it should be based
on her actual salary.

appraised of this. Also, Reuters


was able to prove that it has been
its practice worldwide that the
notional salary of an employee is
its basis in computing its
contribution to the retirement
plan for a local employee detailed
abroad. Section 14(a), Rule 1 of
the Rules and Regulations
Implementing Book VI of the LC:
"Sec. 14. Retirement benefits.
(a) An employee who is retired
pursuant to a bona fide retirement
plan or in accordance with the
applicable individual or collective
agreement or
established employer policy shall
be entitled to all the retirement
benefits
provided therein . . ."

character
2. set up by agreement between
the employer and employees in
collective bargaining agreements
or other agreements between
them
3. voluntarily given by the
employer, expressly as in an
announced company policy or
impliedly as in a failure to contest
the employee's claim for
retirement benefits (as was in this
case)

Gratuity pay is separate and


distinct from retirement benefits-it is paid purely out of generosity.
Retirement benefits are a form of
reward for employee's loyalty to
the employer. Part of the
retirement benefits was the PERRA
(Private Education Retirement
Annuity Association) which
respondent had already received.
It was the school's substitute
retirement plan established a year
after respondent left the school.
Whichever between the retirement
plan stipulated in the CBA and
Article 287 of the LC is more
beneficial to the employee shall be

Sta Catalina v. NLRC

Respondent abandoned work after


not showing up after her year long
LOA. She disappeared for more than
a decade and taught at another
school. She reapplied in petitioner
school. When she retired, petitioner
refused to pay her for the decade she
was MIA. CA and respondent assert
however, that since petitioner school
gave her a Plaque of Appreciation for
30 years of service, it was though
they acknowledged the decade

Respondent's time she was MIA


should not be included in the
computation of retirement
benefits

PAL v Airline Pilots Association

PAL unilaterally retired airline pilot


Captain Collantes under Section 2,
Article VII, of the 1967 PAL-ALPAP
Retirement Plan. ALPAP: The

The PAL-ALPAP Retirement Plan,


and not Article 287 of the LC,
should be the basis for the grant of
Capt. Collantes retirement

Art 287 (par. 1): deals with the


retirement age of an employee
established in (a) a CBA or (b) other
applicable employment contract.
Art 287 (par 2): deals with the
retirement benefits to be received
by a retiring employee which he
may have earned under (a) an
existing law, (b) CBA or (c) other
agreements.

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Ariola v Philex Mining Corp

Equitable PCI Bank v Caguia

Sy v Metropolitan Bank and


Trust Company

retirement of Captain Collantes


constituted illegal dismissal. ALPAP
filed a Notice of Strike with the DOLE.
The DOLE Secretary recognized the
act of PAL as a valid exercise of its
option under Section 2, Article VII, of
the 1967 PAL-ALPAP Retirement Plan.

benefits. The retirement benefits


that a pilot would get under the
provisions of the above-quoted
Article 287 of the Labor Code are
less than those that he would get
under the applicable retirement
plans of petitioner.

the basis for the grant of


retirement benefits to retiring
employees.

In 1992, Philex sustained financial


losses in its operations. To save costs,
Philex adopted several measures
including reducing personnel through
early voluntary retirement and
retrenchment programs.
On 1 June 1993, petitioners, with six
other supervisors and 49 rank-andfile employees, received from Philex
termination notices informing them
of their retrenchment under their
respective MOAs effective 30 June
1993. Philex paid them separation
pay. All of them signed Deeds of
Release and Quitclaim in Philexs
favor.
The labor arbiter held that from the
evidence presented, it clearly
appears that complainants
voluntarily retired from the company
for a valuable consideration. The
quitclaim[s] executed in favor of the
company [amount]to a valid and
binding agreement.
Caguioa had been an employee of
Equitable PCI Bank for 35 years prior
to her dismissal from service after
the bank found her guilty of
violations of its Code of Conduct.
Caguioa was seeking leniency in
consideration of her 35 years of
service to the bank.
Petitioner was involved in a "kiting"
scheme for which he was justly
dismissed. The main issue in this case

Under Philexs Retirement Gratuity


Plan, retirement gratuity is paid
not only to retiring employees but
also to those who, like petitioners,
are dismissed for cause beyond
their control such as
retrenchment. Indeed, Philex
treated the retirement gratuity
as petitioners basic separation
pay, which, with transportation
allowance, comprised their net
separation *pay+ as indicated in
Deeds of Release and Quitclaims
petitioners signed. Significantly,
Philex paid petitioners such
separation pay after notifying
them of their retrenchment.

Thus if, as in the present case, the


intent to retire is not clearly
established or if the retirement is
involuntary, it is to be treated as a
discharge.

Caguioas dismissal is valid. Her


retirement benefits may be
forfeited.

Employees who are validly


dismissed from service by reason
of timely discovered offenses may
be deprived of retirement benefits.

Since petitioners dismissal was for


a just
cause, he is not entitled to any

Under the Labor Code, only


unjustly dismissed employees are
entitled to retirement benefits and

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is whether an employee who was


validly dismissed is still entitled to his
retirement benefits.

retirement benefit.

PLDT v Reus

Respondent filed complaint for illegal


dismissal and claims for monetary
damages in 1990. NLRC issued an
Order in 1993 for the manner of
payment of respondent's monetary
claims. After a series of appeals and
writs of executions and modifications
(particularly one by NLRC which
granted P2000 to respondent),
respondent was still not paid and CA
granted petition for mandamus of
the 1993 decision

CA: no reversible error, The


execution of the 1993 NLRC
decision has been long overdue; it
became final and executory when
the Court dismissed the petitions
for certiorari.

Rivera v Unilab

Rivera was employed by UNILAB.


UNILAB adopted a comprehensive
retirement plan. Under the plan, a
member is compulsorily retired upon
reaching the normal retirement date
which is the date when the member
has reached age 60 or has completed
30 years of service, whichever comes
first. Rivera completed 30 years of
service and UNILAB retired her. Her
retirement benefits have already
been granted her. At her request,
UNILAB allowed her to continue
working for the company; she was
even promoted. Eventually, she
retired from employment in 1992.

Her retirement benefits are


covered by the retirement plan
effective upon her completion of
30 years of service. She is not
covered by the Retirement Plan
Law subsequently passed. Article
287 of the Labor Code and Section
13 of the Rules to Implement the
Labor Code were the governing
laws at the end of 1988 when the
petitioner compulsorily retired
under the UNILAB retirement plan.
Her renewed service did not have
the benefit of any retirement plan
coverage. Because of this, she did
not qualify under the terms of the

other privileges including


reinstatement and backwages.
There is a forfeiture of
retirement benefits in valid
dismissal cases.
1993 NLRC decision modified the
LA's decision directing petitioner to
pay P2000 as indemnity and any
retirement benefits he may be
entitled under the company's
retirement plan . An undisputed
modification that the 1993 NLRC
decision decreed is the deletion of
the order for the payment of
indemnity and atty's fees. A second
ovious change is the removal of the
order for payment of pretirement
beenfits that the complainant may
be entitled to under the reitrement
plan. The NLRC simply ordered
"the respondent to pay
complainant benefits under the
company retirement plan less the
amount of the lost collection and
other outstanding obligations of
the complainant with the
company.
Retirement pay differential may be
granted to qualified employees.
Requisites: 1) employment must be
covered by a retirement plan; 2) if
not, employment not covered by a
retirement plan must have lasted
for 5 years.

NLRC apparently wanted to


order payment, not strictly
based on the law for there
was a cited cause for
dismissal, nor on the
eligibility terms of the
company's retirement plan
for he was not being retired,
but on the basis of equity, it
was simply applying the
benefits of the plan as a
measure of what should be
paid as "equitable solution"

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Korean Air Co Ltd v Yuson

The company amended its


retirement plan, providing, among
others, for an increase in retirement
benefits from one (1) month to oneand-a-half (1.5) months of terminal
basic salary for every year of service.
The amendment also provides that
""[T]he effective date of normal or
mandatory retirement from the Plan
is 30 days after an employee reaches
his/her 60th birthday. Rivera asked
that her retirement benefits be
increased in accordance with the
amended retirement program.
UNILAB denied.
In July 1975, Korean Air Co.,
Ltd.(Korean Air) hired Adelina A.S.
Yuson as reservations agent. Korean
Air promoted Yuson to assistant
manager in 1993, and to passenger
sales manager in 1999.
In 2000, Korean Air suffered a net
loss of over $367,000,000.
Consequently, Korean Air reduced its
budget for 2001 by 10 percent. In
order to cut costs, Korean Air offered
its employees an early retirement
program (ERP). In a letterdated 23
August 2001 and addressed to
Korean Airs Philippine general
manager Suk Kyoo Kim (Suk), Yuson
accepted the offer for early
retirement. In a letter dated 24
August 2001, Suk informed Yuson
that she was excluded from the ERP
because she was retiring on 8
January 2002. In a letter dated 1
September 2001 and addressed to
Suk, Yuson claimed that Korean Air
was bound by the perfected contract
and accused the company of
harassment and discrimination.

Retirement Pay Law subsequently


enacted when she was retired in
1992.

Approval of applications for the


ERP is within Korean Airs
management prerogatives. The
exercise of management
prerogative is valid as long as it is
not done in a malicious, harsh,
oppressive, vindictive, or wanton
manner.[42]

In the present case, the Court sees


no bad faith on Korean Airs part.
The 21 August 2001 memorandum
clearly states that Korean Air, on its
discretion, was offering ERP to its
employees. The memorandum
also states that the reason for the
ERP was to prevent further losses.
Korean Air did not abuse its
discretion when it excluded Yuson
in the ERP. To allow Yuson to avail
of the ERP would have been
contrary to the purpose of the ERP.

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