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Deans

Circle 2016
University of Santo Tomas
Digested by: DC 2016 Members
Editors:
Tricia Lacuesta
Lorenzo Gayya
Cristopher Reyes
Macky Siazon
Janine Arenas
Ninna Bonsol
Lloyd Javier

LABOR LAW
Supreme Court decisions penned by Associate Justice
Presbitero J. Velasco, Jr.

Labor Law (Cases Penned by J. Velasco Deans Circle


2016
Table of Contents
Illegal Recruitment ................................................................................................................................................................ 2
Regulatory and Visitorial Powers of the DOLE Secretary........................................................................................... 3
Labor Standards .................................................................................................................................................................... 4
Wages ................................................................................................................................................................................ 4
Minimum Wage...................................................................................................................................................... 5
Non-diminution of Benefits.............................................................................................................................................. 6
Separation Pay .................................................................................................................................................................. 7
Retirement Pay ................................................................................................................................................................. 8
Employer-employee Relationship .................................................................................................................................... 8
Four-fold Test ....................................................................................................................................................... 10
Project-employment ...................................................................................................................................................... 11
Job Contracting ............................................................................................................................................................... 12
Effects of Labor-Only Contracting ....................................................................................................................... 12
Termination of Employment .......................................................................................................................................... 14
Just Causes............................................................................................................................................................ 14
Authorized Causes................................................................................................................................................ 19
Twin-Notice Requirement ................................................................................................................................... 22
Hearing: Meaning of Opportunity to be Heard ................................................................................... 23
Reinstatement ...................................................................................................................................................... 28
Preventive Suspension ......................................................................................................................................... 29
Constructive Dismissal ......................................................................................................................................... 30
Certification Election ...................................................................................................................................................... 31
Union Security Clauses ................................................................................................................................................... 32
Unfair Labor Practice of Employers ............................................................................................................................... 33
Illegal Strike ..................................................................................................................................................................... 34
Liability of Ordinary Workers............................................................................................................................... 37
Procedure and Jurisdiction ............................................................................................................................................ 38
Appeal to the NLRC .............................................................................................................................................. 39
Jurisdiction of NLRC ............................................................................................................................................. 40
Remedies .............................................................................................................................................................. 41
Original and Appellate Jurisdiction of Med Arbiters .......................................................................................... 42
Social Legislation............................................................................................................................................................. 45
SSS Law ................................................................................................................................................................. 45
Employees Compensation ................................................................................................................................... 46

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LABOR LAW
Recruitment and Placement
Illegal Recruitment (Sec. 5, R.A. No. 10022)
PEOPLE OF THE PHILIPPINES v. GLORIA BARTOLOME
G.R. No. 129486, July 4, 2008, Velasco, Jr., J.
Illegal recruitment is committed when two (2) elements concur: First, the offender does not have the
required license or authority to engage in the recruitment and placement of workers. Second, the offender
undertook (a) recruitment and placement activity defined under Article 13(b) of the Labor Code or (b) any
prohibited practice under Art. 34 of the same code. Illegal recruitment is qualified into large scale, when three or
more persons, individually or as group, are victimized.
Facts:
Gloria Bartolome, without a license for the placement of workers, impressed upon four (4) of her
childhood acquaintances that she could send them to Bahrain for overseas employment. For her promise of
employment, Gloria asked a fee from all of them to cover all expenses. Upon receiving payment, Gloria sent a
photocopied plane ticket to each person. Gloria vanished after her promises did not materialize. The POEA
initiated the complaints against Gloria, and the latter was convicted of illegal recruitment in large scale.
Issue:
Whether Gloria is guilty of illegal recruitment in large scale
Ruling:
Yes. Gloria lacked the required license as shown by the fact that the POEA no less initiated the filing
of the complaints. Gloria also engaged in recruitment activities per Art. 13(b) of the Labor Code when she
promised employment for a fee to all four (4) persons. Finally, she recruited more than three (3) persons.
Hence, Gloria is guilty of illegal recruitment in large scale.
PEOPLE OF THE PHILIPPINES v. RODOLFO GALLO y GADOT, FIDES PACARDO y JUNGCO and PILAR
MANTA DUNGO
G.R. No. 187730, June 29, 2010, Velasco, Jr., J.
The elements of syndicated illegal recruitment are: (a) the offender undertakes any activity within the
meaning of recruitment and placement as defined under the Labor Code; (b) he has no valid license or authority
to lawfully engage in recruitment and placement; and (c) the illegal recruitment is committed by a group of
three or more persons conspiring or confederating with one another.
Facts:
The accused were convicted for the crime of syndicated illegal recruitment and estafa based on the
complaint of Dela Caza. After having been assured that MPM Agency had already sent many workers abroad
and that there are job placements for the complainant and other applicants in Korea, Dela Caza was convinced
to part with her money in the amount of P45,000 as placement fee. After a few months of waiting to be
deployed, Dela Caza and the other applicants took action. Thereafter, the accused were arrested. Rodolfo
Gallo asserted that he was an errand boy, not an employee of the agency; thus, he could not be held criminally
liable.

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Issue:
Whether accused is guilty of syndicated illegal recruitment
Held:
Yes. Testimonial evidence presented by the prosecution shows that, in consideration of a promise of
foreign employment, accused-appellant received the amount of PHP45,000.00 from Dela Caza. When accusedappellant made misrepresentations concerning the agencys purported power and authority to recruit for
overseas employment and collected money in the guise of placement fees, the former clearly committed
illegal recruitment. Accused-appellant cannot argue that the trial court erred in finding that he was indeed an
employee of the recruitment agency. His active participation in the illegal recruitment is unmistakable. The
fact that he was the one who issued and signed the official receipt belies his profession of innocence.

Regulatory and Visitorial Powers of the DOLE Secretary


PEOPLES BROADCASTING SERVICE (BOMBO RADYO PHILS., INC.) v. THE SECRETARY OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, THE REGIONAL DIRECTOR,
DOLE REGION VII, AND JANDELEON JUEZAN
G.R. No. 179652, March 6, 2012, Velasco, Jr., J.
The DOLE can make a prima facie determination of the existence of EER, to the exclusion of the NLRC,
for purposes of determining if it has jurisdiction over a complaint brought before it.
Facts:
Jandeleon filed a complaint against Bombo Radyo with the DOLE Regional Office for delayed payment
of wages, and non-payment of other benefits. Bombo Radyo disputed the existence of an employer-employee
relationship (EER). After summary investigation, the Regional Director, as affirmed by the Acting Secretary of
Labor and Employment, found the presence of EER and ruled for Jandeleon. The SC originally ruled that the
DOLE Secretary has no jurisdiction to determine the presence of EER.
The Public Attorneys Office and the DOLE moved to clarify the original decision as to the extent of
the visitorial and enforcement powers of the DOLE.
Issue:
Whether the DOLE Secretary may determine the existence of an EER to the exclusion of the NLRC
Ruling:
Yes. (1) The law did not say that the DOLE must first seek the NLRCs determination of the existence
of an EER, or that should the existence of the EER be disputed, the DOLE should refer the matter to the NLRC.
(2) The DOLE can use the same test (i.e. the four-fold test) used by the NLRC to determine the existence of
EER. (3) The expanded visitorial and enforcement power of the DOLE granted by RA 7730 would be rendered
nugatory if the alleged employer could, by the simple expedient of disputing the EER, force the referral of the
matter to the NLRC. As to the extent of the findings of EER by the DOLE Secretary, a prima facie determination
of the existence of EER is sufficient to determine if the DOLE has jurisdiction over the case.
The following are guidelines to determine if the DOLE has jurisdiction should a complaint be brought
before the DOLE to give effect to labor standards provision of the Labor Code or other labor legislation: (1)

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The DOLE shall make a prima facie determination of the existence of EER, to the exclusion of the NLRC; (2) If
the DOLE finds that there is no EER, the jurisdiction is properly with the NLRC; (3) If the complaint before the
DOLE is accompanied by a claim for reinstatement, the jurisdiction belongs with the Labor Arbiter under Art.
217 (3); and (4) The findings of the DOLE may still be questioned through a petition for certiorari under Rule
65 of the Rules of Court. If the complaint is filed with the NLRC while there is still an existing employeremployee relationship, the jurisdiction is properly with the DOLE.
Labor Standards
Wages
ASSOCIATED LABOR UNIONS(ALU) and DIVINE WORD UNIVERSITY EMPLOYEES UNION-ALU(DWUEUALU) v. CA, THE ROMAN CATHOLIC ARCHBISHOP OF PALO, LEYTE (RCAP) and DIVINE WORD
UNIVERSITY OF TACLOBAN (DWUT)
G.R. No. 156882, October 31, 2008, Velasco, Jr., J.
Art. 110 of the Labor Code applies only to cases of bankruptcy and liquidation. Likewise, the
concurrence and preference of credits properly come into play only in cases of insolvency.
Facts:
RCAP is a corporation sole which sold to Societas Verbum Dei (SVD) the subject 13 parcels of land, the
last 4 of which were untitled when the sale was concluded. While the conveying document was not notarized,
the SVD was able to secure the corresponding TCTs over the subject lots, but the deed conditions, restrictions,
and reversionary right of the RCAP were not annotated. Due to labor unrest, DWUT, run by the SVD, and the
Union engaged in a protracted legal battle. RCAP filed a petition for annotation. DWUT issued notices to
unions members of the closing of the university and consider themselves dismissed. Prompted by the closure
of DWUT and the resulting termination of its members services, the Union filed a complaint.
The Union alleged in its complaint that the sale of the subject properties over which the DWUT is
located was incomplete. What is more, the RCAP did not, despite the sale, sever its employment relations with
DWUT which, thus, rendered the RCAP solidarily liable with DWUT for the payment of the benefits of the
Union members. RTC dismissed the petition. The parties entered in a Memorandum of Agreement (MOA). CA
reversed and granted the petition to annotate.
Issue:
Whether Article 110 of the Labor Code in relation to the Civil Code provisions on concurrence and
preference of credits apply in the instant case
Ruling:
No. The judgment lien over the subject properties is really non-existent as it has not been shown that
a levy on execution has been imposed over the subject properties. We agree with the RCAP that a judgment
lien over the subject properties has not legally attached and that Art. 110 of the LC, in relation to Arts. 2242,
2243, and 2244 of the Civil Code on concurrence and preference of credits, does not cover the subject
properties. Art. 110 of the LC applies only to cases of bankruptcy and liquidation. Likewise, the
abovementioned articles of the Civil Code on concurrence and preference of credits properly come into play
only in cases of insolvency. Since there is no bankruptcy or insolvency proceeding to speak of, much less a
liquidation of the assets of DWUT, the Union cannot look to said statutory provisions for support.

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Moreover, we note the utter lack of showing that DWUT has no other assets to answer its obligations.
DWUT may have liquidity problems hampering its ability to meet its judicially-imposed obligations. The
school, however, appears to have other properties it can and in fact did use to settle its obligations as shown
in the MOA. A scrutiny of the MOA readily shows that the subject properties were not included in the assets or
properties earmarked to settle DWUTs obligations.
Minimum Wage
NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. (NIASSI) v.
NASIPIT EMPLOYEES LABOR UNION (NELU)-ALU-TUCP
G.R. No. 162411 June 30, 2008 Velasco, Jr., J.
Expressio unius est exclusio alterius. The express mention of one person, thing, act, or consequence
excludes all others. The beneficent, operative provision of WO RXIII-02 is specific enough to cover only minimum
wage earners. Necessarily excluded are those receiving rates above the prescribed minimum wage.
Facts:
Wage Board of Caraga Region in Northeastern Mindanao issued Wage Order No. (WO) RXIII-02
which granted an additional PhP12 per day cost of living allowance to the minimum wage earners in that
region. Owing allegedly to NIASSIs failure to implement the wage order, the Union filed a complaint before
the DOLE for inspection and the enforcement of WO RXIII-02. But the inspection team stated that WO RXIII02 was not applicable to NIASSIs employees since they were already receiving a wage rate higher than the
prescribed minimum wage.
Voluntary Arbitrator Jesus G. Chavez rendered a decision granting the Unions prayer for the
implementation of WO RXIII-02 on the rationale that WO RXIII-02 did not specifically prohibit the grant of
wage increase to employees earning above the minimum wage. On the contrary, Chavez said, the wage order
specifically enumerated those who are outside its coverage, but did not include in the enumeration those
earning above the minimum wage. On appeal, CA affirmed.
Issue:
Whether the WO RXIII-02 may be made to apply and cover Nasipits employees who, at the time of
the issuance and effectivity of the wage order, were receiving a wage higher than the prevailing minimum
wage
Ruling:
No. WO RXIII-02 and its IRR provide that only minimum wage earners are entitled to the wage
increase. The only situation when employees receiving a wage rate higher than that prescribed by the WO
RXIII-02 may still benefit from the order is, as indicated in Sec. 1 (c) of the IRRs, through the correction of
wage distortions. In any case, it would be highly irregular for the Wage Board to issue an across-the-board
wage increase, its mandate being limited to determining and fixing the minimum wage rates within its area of
concern, in this case the Caraga Region, and to issue the corresponding wage orders and implementing rules.
In the same case, the Court held that a RTWPB commits an ultra vires act when, instead of setting a
minimum wage rate, it prescribes a wage increase cutting across all levels of employment and wage brackets:
The RTWPB did not determine or fix the minimum wage rate by the floor-wage method or the salaryceiling method in issuing the Wage Order. The RTWPB did not set a wage level nor a range to which a wage
adjustment or increase shall be added. Instead, it granted an across-the-board wage increase of P15.00 to all

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employees and workers of Region 2. In doing so, the RTWPB exceeded its authority by extending the coverage
of the Wage Orders to wage earners receiving more than the prevailing minimum wage rate, without a
denominated salary ceiling.
Only employees receiving salaries below the prescribed minimum wage are entitled to the wage
increase set forth under WO RXIII-02, without prejudice, to the grant of increase to correct wage distortions
consequent to the implementation of such wage order. Considering that NIASSIs employees are undisputedly
already receiving a wage rate higher than that prescribed by the wage order, NIASSI is not legally obliged to
grant them wage increase. Decision of the arbitrator is reversed.

Non-diminution of Benefits
TSPIC CORPORATION v. TSPIC EMPLOYEES UNION (FFW)
G.R. No. 163419, February 13, 2008, Velasco, Jr., J.
An erroneously granted benefit may be withdrawn without violating the prohibition against nondiminution of benefits.
Facts:
TSPI Corporation entered into a Collective Bargaining Agreement with the corporation Union for the
increase of salary for the latters members for the year 2000 to 2002. Thus, the increase in salary was
materialized on January 1, 2000. However, on October 6, 2000, the Regional Tripartite Wage and production
Board raised daily minimum wage from P223.50 to P250.00 starting November 1, 2000. Conformably, the
wages of the 17 probationary employees were increased to P250.00. They therefore became regular
employees and received another 10% increase in salary. In January 2001, TSPIC implemented the new wage
rates as mandated by the CBA. As a result, the nine employees who were senior to the 17 recently regularized
employees, received less wages. On January 19, 2001, TSPICs Human Resource Development notified the 24
employees who are private respondents, that due to an error in the automated payroll system, they were
overpaid and the overpayment would be deducted from their salaries starting February 2001. The Union
asserted that there was no error and the deduction of the alleged overpayment constituted diminution of
pay.
They brought the issue to the grievance machinery but the TSPIC and the Union failed to reach an
agreement. They went to a voluntary arbitration where the arbitrator held that the unilateral deduction made
by TSPIC violated Art. 100 of the Labor Code. The decision was affirmed by the CA.
Issue:
Whether the deduction of the overpayment constitutes diminution of benefits
Ruling:
No. Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed
by the employees. There is diminution of benefits when it is shown that: (1) the grant or benefit is founded on
a policy or has ripened into a practice over a long period; (2) the practice is consistent and deliberate; (3) the
practice is not due to error in the construction or application of a doubtful or difficult question of law; and (4)
the diminution or discontinuance is done unilaterally by the employer.

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The overpayment of its employees was a result of an error. This error was immediately rectified by
TSPIC upon its discovery. No vested right accrued to individual respondents when TSPIC corrected its error
by crediting the salary increase for the year 2001 against the salary increase granted under WO No. 8, all in
accordance with the CBA. Hence, any amount given to the employees in excess of what they were entitled to
may be legally deducted by TSPIC from the employees salaries. It was also fair that TSPIC deducted the
overpayment in installments over a period of 12 months starting from the date of the initial deduction to
lessen the burden on the overpaid employees. TSPIC must refund to respondents any amount deducted from
their salaries which was in excess of what TSPIC is legally allowed to deduct from the salaries.
Separation Pay
CENTRAL PHILIPPINES BANDAG RETREADERS, INC. v. PRUDENCIO J. DIASNES
G.R. No. 163607, July 14, 2008, Velasco, Jr., J.
When dismissal is due to the employees fault, separation pay should not be awarded.
Facts:
Due to personal problems, Prudencios performance as sales manager of Central Philippines Bandag
Retreaders, Inc. (Bandag) waned and his absences became more frequent. The Employee Adjudication
Committee unanimously agreed to relieve Prudencio for three (3) months to settle his problems, after which
Prudencio may either return to work but with another position, or retire and receive his separation pay.
Instead of availing either option in the report, Prudencio requested that he be transferred from
Tacloban City to Cebu City, to which Bandag agreed. However, Prudencios attendance and punctuality were
still poor. The company eventually dismissed Prudencio for gross and habitual neglect of duty under Art. 282
of the Labor Code. Prudencio claims that assuming that he was legally separated from his employment, he is
still entitled to separation pay.
Issue:
Whether an employee validly dismissed due to his own fault is entitled to separation pay
Ruling:
No. When an employee is lawfully dismissed, separation pay may only be awarded if the cause of
dismissal was not due to the employees fault, but due to: (1) the installation of labor saving devices, (2)
redundancy, (3) retrenchment, (4) cessation of employers business, or (5) when the employee is suffering
from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the
health of his co-employees (Art. 283 & 284, Labor Code). It may also be awarded in case of strained relations.
When the case falls under Art. 282, like gross and habitual neglect of duty, separation pay should not
be paid to the employee. Although there are cases when social justice may warrant the award of separation
pay or financial assistance, the labor adjudicatory officials and the CA must be most judicious and circumspect
lest the constitutional policy to provide full protection to labor be at the expense of the employers.
In addition, while the company did make an offer of separation pay upon adopting the original
recommendation of the Committee, the same offer was superseded when Bandag agreed to Prudencios
proposal to transfer to Cebu City.

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Retirement Pay
RICARDO G. PALOMA v. PHILIPPINE AIRLINES, INC. AND
THE NATIONAL LABOR RELATIONS COMMISSION
G.R. No. 148415, 156764, July 14, 2008, Velasco, Jr., J.
Unlike the public sector, there is no law allowing for commutation of unused or accrued sick leave
credits in the private sector. Commutation in the private sector is allowed only by way of voluntary endowment
by an employer through company policy or by a Collective Bargaining Agreement (CBA).
Facts:
Ricardo worked with Philippine Airlines (PAL) for 35 years and retired on March 1992, or 9 months
before PAL was privatized. Ricardo was paid his sick leave credits worth in accord with company policy.
Ricardo complained, arguing that the sick leave credits paid to him was much lower than that required by
Executive Order No. 1077, issued in 1986. The said EO, allows retiring government employees to commute,
without limit, all his accrued vacation and sick leave credits.
Issue:
Whether Ricardo is entitled to the benefits under EO 1077
Ruling:
No. PAL never ceased to be operated as a private corporation, and was not subjected to the Civil
Service Law. PAL was incorporated as a private corporation. While PALs controlling interest was once owned
by GSIS for a time, and while during the said period, PAL may be considered as a GOCC, one fact remains: PAL
still functioned as a private corporation and for profit. It was the Labor Code and not the Civil Service Law
that was applied to PAL through the years, since its incorporation. Since Ricardo was never a government
employee covered by the Civil Service Law, he never acquired the benefits accorded by EO 1077. What applies
instead is the company policy of PAL.

Employer-employee Relationship
RAUL G. LOCSIN and EDDIE B. TOMAQUIN v. PHILIPPINE LONG DISTANCE TELEPHONE CO.
G.R. No. 185251, October 2, 2009, Velasco, Jr., J.
The power of control is the right to control not only the end to be achieved but also the means to be used
in reaching such end.
Facts:
Philippine Long Distance Telephone Company (PLDT) and the Security and Safety Corporation of the
Philippines (SSCP) entered into a Security Services Agreement (Agreement) whereby SSCP would provide
armed security guards to PLDT to be assigned to its various offices. Pursuant to such agreement, Raul Locsin
and Eddie Tomaquin, among other security guards, were posted at a PLDT office. PLDT issued a
Letter terminating the Agreement effective October 1, 2001. Despite the termination of the Agreement,
however, petitioners continued to secure the premises of their assigned office. They were allegedly directed
to remain at their post by representatives of respondent. In support of their contention, petitioners provided
the Labor Arbiter with copies of petitioner Locsins pay slips for the period of January to September 2002.

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On September 30, 2002, petitioners services were terminated. They filed a complaint before the
Labor Arbiter for illegal dismissal and recovery of money claims.
Issue:
Whether petitioners became employees of PLDT after the Agreement between SSCP and PLDT was
terminated
Ruling:
Yes. Respondent must be considered as petitioners employer from the termination of the Agreement
onwards as this was the only time that any evidence of control was exhibited by respondent over petitioners.
Respondent, by directing petitioners to remain at their posts and continue with their duties, exercised control
over them. This is sufficient to establish the existence of an employer-employee relationship. While
respondent and SSCP no longer had any legal relationship with the termination of the Agreement, petitioners
remained at their post securing the premises of respondent while receiving their salaries, allegedly from
SSCP. With the behest and, presumably, directive of respondent, petitioners continued with their services.
Evidently, such are indicia of control that respondent exercised over petitioners.

GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A.
VERGEL DE DIOS
G.R. No. 167622, November 7, 2008, Velasco, Jr., J.
Whenever the existence of an employment relationship is in dispute, four elements constitute the
reliable yardstick: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee's conduct. It is the so-called "control test" which
constitutes the most important index of the existence of the employer-employee relationship that is, whether the
employer controls or has reserved the right to control the employee not only as to the result of the work to be
done but also as to the means and methods by which the same is to be accomplished.
Facts:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life
insurance business. Petitioner Gregorio Tongko (Tongko) entered into a Career Agents Agreement with
Manulife. As an agent, his duties consisted of canvassing for applications for group policies and other
products of the company. Tongko was named unit manager in Manulife's Sales Agency Organization, branch
manager, and sales manager. Tongko failed to comply with policies of Manulife, his Agency Agreement was
terminated.
Tongko filed a complaint with the NLRC for illegal dismissal. Tongko, in a bid to establish an
employer-employee relationship, alleged that De Dios gave him specific directives on how to manage his area
of responsibility and also claimed that his dismissal was without basis and that he was not afforded due
process. Manulife alleged that Tongko is not its employee, and that it did not exercise "control" over him.
Manulife claimed that the NLRC has no jurisdiction over the case.
The labor arbiter decreed that no employer-employee relationship existed between the parties. The
NLRC reversed the labor arbiters decision finding Tongko to have been illegally dismissed. The CA reversed
the decision of the NLRC finding the absence of an employer-employee relationship between the parties and
deeming the NLRC with no jurisdiction over the case.
Issues:

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Whether there was an employer-employee relationship between Manulife and Tongko
Ruling:
Yes. The NLRC arrived at its conclusion, first, on the basis of the letter dated November 6, 2001
addressed by De Dios to Tongko. According to the NLRC, the letter contained "an abundance of directives or
orders that are intended to directly affect complainant's authority and manner of carrying out his functions as
Regional Sales Manager."
The NLRC further ruled that the different codes of conduct that were applicable to Tongko served as
the foundations of the power of control wielded by Manulife over Tongko that is further manifested in the
different administrative and other tasks that he was required to perform. The NLRC also found that Tongko
was required to render exclusive service to Manulife, further bolstering the existence of an employeremployee relationship. Finally, the NLRC ruled that Tongko was integrated into a management structure over
which Manulife exercised control, including the actions of its officers. The NLRC held that such integration
added to the fact that Tongko did not have his own agency belied Manulife's claim that Tongko was an
independent contractor. Additionally, it must be pointed out that the fact that Tongko was tasked with
recruiting a certain number of agents, in addition to his other administrative functions, leads to no other
conclusion that he was an employee of Manulife.

Four-fold Test
MARIAN B. NAVARETTE v. MANILA INTERNATIONAL FREIGHT FORWARDERS, INC./MIFFI LOGISTICS
COMPANY, INC., MR. HARADA, AND MBI MILLENNIUM EXPERTS, INC.,
G.R. No. 200580, February 11, 2015, Velasco, Jr., J.
The power of control is determinative of the existence of employer-employee relationship.
Facts:
MIFFI entered into a contract with MBI for the provision of production workers and technical
personnel for MIFFI's projects or temporary needs. MBI hired Navarette and assigned her as a temporary
project employee to MIFFI's Packaging Department. For a fixed period of three (3) months, she worked
amongst MIFFI's regular employees who performed the same tasks as hers. She used MIFFI's equipment and
was supervised by employees of MIFFI. Navarette, joined by other employees, filed a complaint for inspection
against respondents MIFFI, MLCI, MBI and a certain PAMS with the DOLE Regional Arbitration Branch IV.
Following an inspection of respondents' premises, certain violations of labor laws were uncovered, including
labor-only contracting by MBI. Several hearings were had and eventually, the parties decided to submit an
agreement to be signed by all concerned and to be approved by DOLE officials.
Pursuant to said covenant, MBI called a meeting where Navarette and her co-workers were asked to
sign a document. However, Navarette found the contents of the document to be erroneous since it stated that
the parties had already come to an agreement on the issues and conditions when, in fact, no such agreement
was made. This angered Navarette, causing her to throw the document and to say, "Hindi ito ang pinagusapan natin sa DOLE! Niloloko niyo lang kami." Her actuations, to MBI, constituted serious misconduct, for
which a show-cause memorandum was issued directing her to explain herself. After issuing several
memoranda setting conferences on the matter to which Navarette could not attend because of her work
schedule, MBI terminated Navarette's employment. Navarette filed a complaint for illegal dismissal before the
NLRC against MBI, MIFFI and MCLI. The respondents claimed that since MBI is a legitimate labor contractor,
MBI is liable to the petitioner.

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Issue:
Whether Navarette is MBI's employee
Ruling:
Yes. A fundamental principle in Philippine labor law is the application of the four-fold test in
determining the existence of an employer-employee relationship, thus: (1) selection and engagement; (2)
payment of wages; (3) power to dismiss; and (4) power of control over the means and methods by which the
work is to be accomplished. There are, however, instances when these elements are not exercised by a single
person or entity. There are cases where one or more of the said factors are assumed by another entity, for
which reason, the Court made it clear that of the four tests mentioned, it is the power of control that is
determinative. One such instance is whenever an employer supplies workers to another pursuant to a
contracting agreement, i.e., job contracting.
Per DOLE Order No. 3, Series of 2001, there is contracting or subcontracting whenever an employer,
referred to as the principal, farms out the performance of a part of its business to another, referred to as the
contractor or subcontractor, and for the purpose of undertaking the principal's business that is farmed out,
the contractor or subcontractor then employs its own employees. In such an arrangement, the four-fold test
must be satisfied by the contractor or subcontractor. Otherwise, it is the principal that shall be considered as
the employer.

Project employment
EQUIPMENT TECHNICAL SERVICES (ETS) & JOSEPH JAMES DEQUITO v. CA, ALEX ALBINO, et.al.
G.R. No. 157680, October 8, 2008, Velasco, Jr., J.
The principal test for determining whether one is a "project employee," as distinguished from "regular
employee," is whether he was assigned to carry out "a specific project or undertaking," the duration and scope of
which were specified at the time the employee was engaged for that project.
Facts:
One of ETS clients was Uniwide. Dequito was occupying the position of manager of ETS. ETS hired
the services of Albino, et.al. as pipe fitters, plumbers, or threaders. ETS experienced financial difficulties when
Uniwide failed to pay for the plumbing work being done at its Coastal Mall. ETS was only able to pay its
employees 13th month pay equivalent to two weeks salary. Thus, Albino, et. al. filed a case before the LA,
which decided in favor of Albino, et. al. and declared that their dismissal was illegal. NLRC reversed but
upheld the validity of the monetary award given. The CA reversed and ordered ETS to pay their holiday pay
and service incentive leave pay.
Issue:
Whether Albino, et. al. are project employees
Ruling:
No. The service of project employees are coterminous with the project and may be terminated upon
the end or completion of that project or project phase for which they were hired. Regular employees, in

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contrast, enjoy security of tenure and are entitled to hold on to their work or position until their services are
terminated by any of the modes recognized under the Labor Code.
ETS admits hiring Albino, et. al. to perform plumbing works for various projects. Regular
employment may reasonably be presumed and it behooves ETS to prove otherwise, that the employment in
question was contractual in nature ending upon the expiration of the term fixed in the contract or for a
specific project or undertaking. But the categorical finding of the CA is that not a single written contract of
employment fixing the terms of employment for the duration of the Uniwide project, or any other project, was
submitted by ETS. Records of payroll and other pertinent documents, such as job contracts secured by ETS
showing that they were hired for specific projects, were also not submitted by ETS. Moreover, if they were
indeed employed as project employees, ETS should have had submitted a report of termination every time
their employment was terminated owing to the completion of each plumbing project. ETS failure to report
the employment termination and file the necessary papers after every project completion tends to support
the claim of not being project employees.
Also, the constitutionally-protected right of labor to security of tenure covers both regular and
project workers. Their termination must be for lawful cause and must be done in a way which affords them
proper notice and hearing. Private respondents are regular employees whose services were terminated
without lawful cause and effected without the requisite notice and hearing.
Job Contracting
Effects of Labor-only Contracting
FONTERRA BRANDS PHILS., INC. v. LEONARDO LARGADO AND TEOTIMO ESTRELLADO
G.R. No. 205300, March 18, 2015, Velasco, Jr., J.
Respondents, by accepting the conditions of the contract, cannot now argue that they were illegally
dismissed when their contracts were not renewed after expiration.
Facts:
Fonterra contracted the services of Zytron for the marketing of its dairy products. Pursuant to the
contract, Zytron provided Fonterra with trade merchandising representatives (TMRs), including herein
respondents. Subsequently, Fonterra sent Zytron a letter terminating its promotions contract and it soon
entered into an agreement for manpower supply with A.C. Sicat Marketing and Promotional Services.
Respondents submitted their job applications with A.C. Sicat, which hired them for a term of five months.
When respondents 5-month contracts with A.C. Sicat were about to expire, they allegedly sought renewal
thereof, but were allegedly refused. Respondents filed complaints for illegal dismissal, regularization, nonpayment of service incentive leave and 13th month pay, and actual and moral damages, against Zytron and
A.C. Sicat.
Issues:
1. Whether Zytron and A.C. Sicat are labor-only contractors
2. Whether respondents were illegally dismissed
Ruling:
1.

Yes. A person is considered engaged in legitimate job contracting or subcontracting if the


following conditions concur:

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The contractor or subcontractor carries on a distinct and independent business and undertakes to
perform the job, work or service on its own account and under its own responsibility according to its own
manner and method, and free from the control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof;
The contractor or subcontractor has substantial capital or investment; and
The agreement between the principal and contractor or subcontractor assures the contractual
employees entitlement to all labor and occupational safety and health standards, free exercise of the right to
self-organization, security of tenure, and social and welfare benefits.
2.

No. The termination of respondents employment with the latter was simply brought about by
the expiration of their employment contracts.

Respondents were employed by A.C. Sicat as project employees. In their employment contract with
the latter, it is clearly stated that [A.C. Sicat is] temporarily employing [respondents] as TMR[s] effective June
6, 2006 under the following terms and conditions: The need for your service being only for a specific project,
your temporary employment will be for the duration only of said project of our client, namely to promote
FONTERRA BRANDS products xxx which is expected to be finished on or before Nov. 06, 2006.
Non-renewal of their contracts by A.C. Sicat is a management prerogative, and failure of respondents
to prove that such was done in bad faith militates against their contention that they were illegally dismissed.
The expiration of their contract with A.C. Sicat simply caused the natural cessation of their fixed-term
employment thereat.

W.M. MANUFACTURING, INC. v. RICHARD R. DALAG AND GOLDEN ROCK MANPOWER SERVICES
G.R. No. 209418, December 07, 2015, Velasco, Jr., J.
There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and
the workers recruited and placed by such person are performing activities which are directly related to the
principal business of such employer. In such cases, the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter
were directly employed by him.
Facts:
Golden Rock contracted a Service Agreement with WM MFG. WM MFG engaged the services of
Dalag as a factory worker assigned at its factory thus creating a five-month Employment Contract between
them. Dalag later on filed a complaint for illegal dismissal as he was not allowed to work and that he was
denied due process as to why he is not allowed. He further claimed that he was assigned as a side seal
machine operator which was necessary and desirable for WM MFGs plastic manufacturing business making
him a regular employee. He alleged that Golden Rock and WM MFG engaged in labor-only contracting because
all equipment for the job were furnished by WM MFG and all jobs were to be done in the vicinity of WM MFG
and he was under the control by the supervisors of WM MFG. WM MFG alleged in their position paper that
Dalag abandoned his work and was not illegally dismissed. He was sent memos for several faults he has done
but never received them and did not report for work anymore. The Labor Arbiter dismissed the complaint of
Dalag. The NLRC reversed the decision of the Labor Arbiter agreeing to the fact that WM MFG and Golden
Rock engaged in labor-only contracting. A Motion for Reconsideration was later granted and setting aside the
previous NLRC decision. The CA ultimately reversed the decision and ruled in favor of Dalag stating that
Golden Rock was not able to prove that it was an independent contractor as they were not able to show proof
that they had substantial capital and exercise control over Dalag.

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Issue:
Whether WM MFG and Golden Rock engaged in labor-only contracting
Ruling:
Yes. It may be that the DOLE Regional Director for the National Capital Region was satisfied by
Golden Rock's capitalization as reflected on its financial documents, but the basis for determining the
substantiality of a company's "capital" rests not only thereon but also on the tools and equipment it owns in
relation to the job, work, or service it provides. DO 18-02 defines "substantial capital or investment" in the
context of labor-only contracting as referring not only to a contractor's financial capability, but also
encompasses the tools, equipment, implements, machineries and work premises, actually and directly used
by the contractor or subcontractor in the performance or completion of the job, work or service contracted
out.
Notwithstanding the contract stipulation leaving Golden Rock the exclusive right to control the
working warm bodies it provides WM MFG, evidence shows that it was WM MFG who exercised supervision
over Dalag's work performance. Dalag was supervised by WM MFG's employees. WM MFG even furnished
Dalag with not less than seven memos directing him to explain within twenty-four hours his alleged work
infractions. The company took pains in issuing investigation reports detailing its findings on Dalag's
culpability. Clearly, WM MFG disciplined Dalag for violation of company rules, regulations, and policies,
validating the presence of the right to control.

Termination of Employment
Just Causes

ESTRELLITA G. SALAZAR v. PHILIPPINE DUPLICATORS, INC., and /or LEONORA FONTANILLA


G.R. No. 154628, December 6, 2006, Velasco, Jr., J.
The constitutional policy to provide full protection to labor is not meant to oppress employers. The
cause of labor does not prevent us from sustaining the employer when the law is clearly on its side.
Facts:
Salazar was terminated from her employment due to alleged falsification of company records. Salazar
denies receiving Duplicator's termination letter. The Labor Arbiter held that the dismissal was for a just cause
but the company breached the twin-notice requirement as provided by law. It ordered Duplicators to pay the
indemnity of PHP10,000.
Issue:
Whether Salazar validly dismissed
Ruling:
Yes. Petitioner was charged with falsifying company records. On this issue, Labor Arbiter Caday made
the following findings, viz:

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A scrutiny of these documentary evidence reveals that on November 20, 1998, at
around 3:00 PM complainant Salazar visited Juliet Alvarez of Banco-Filipino-Legal, Paseo de
Roxas, Legaspi Village, Makati City (Annex A and A-1 attached to Respondents Rejoinder).
This belies complainants claim that she visited the respondents customer, D.M. Consunji,
Inc. on November 20, 1998 at around 3:00P.M. (Annex C attached to Complainants Reply).
Moreover, Mr. Enrique Patag signed the Certification on December 15, 1998 on the date
when complainant (Salazar) was no longer reporting for work and filed a case for illegal
dismissal against respondents docketed as NLRC Case No. 00-12-10174-98 which was later
ordered dismissed by Labor Arbiter Eduardo Carpio for lack of interest to prosecute.
Similarly, the certification issued by Mr. Frederick Sison of the D.M. Consunji, Inc. attesting to
complainants visit on November 20, 1998, at 2:00 p.m. is confuted [sic] by the fact that
on November 20, 1998, complainant [Salazar] visited Fely/Federico and Lilian at
the Makati Medical Center as appearing in customer ledger of Makati Medical Center. (Annex
B and B-1 attached to Respondents Rejoinder). With the foregoing observations,
complainants pretensions [are] at once noticeable and [merit] scant consideration.
The findings of Arbiter Caday jibe with those of the NLRC, to wit:
Specifically, in a report she stated that she made a follow-up with Leny Sambrano of Bengson
Law Office on November 20, 1998. However, in her Reply, she admitted that she saw, not
Sambrano, who was not around, but his secretary. It appears that [in] the report in question,
Sambrano wrote, there was no visit last Friday,11/20 and then affixed [her] signature. In
another report, she stated that she made a follow-up with Jun of ICLARM on November 20,
1998, but it appeared that Jun Fedrigon wrote on the same report, which he also signed, that
she did not visit his office on the date in question. In a letter dated December 15, 1998, he
stated that he had no memory of seeing the complainant on the date in question. x x x
The findings of both Arbiter Caday and the NLRC were sustained by the CA, which ruled that there is
ample proof to bear out that the petitioner knowingly recorded erroneous entries in her Daily Sales Reports.
It is well-settled that the findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect
but even finality if the findings are supported by substantial evidence; more so when such findings were
affirmed by the CA and such findings are binding and conclusive upon this Court. Petitioner committed fraud
or willful breach of the employers trust reposed in her under Article 282 of the Labor Code.

EDI-STAFFBUILDERS INTERNATIONAL, INC. v. NATIONAL LABOR RELATIONS COMMISSION and


ELEAZAR S. GRAN
G.R. No. 145587, October 26, 2007, Velasco, Jr., J.
In termination disputes or illegal dismissal cases, the employer has the burden of proving that the
dismissal is for just and valid causes. The employer is bound to adduce clear, accurate, consistent, and convincing
evidence to prove that the dismissal is legal.
Facts:
EDI is engaged in recruitment and placement of OFWs. Eleazar Gran was an OFW recruited by EDI to
work Omar Ali Bin Bechr Est. at Riyadh, Saudi Arabia. EDI and OAB entered into an employment contract with
Gran whereby the latter will work as a computer specialist for OAB while EDI would process the papers of
Gran necessary for his employment at Saudi Arabia. Gran started working for OAB. However, Gran was
terminated by OAB on the ground of insubordination against the management of OAB. Gran was given his
final pay and was sent back to the Philippines. Gran filed a complaint for underpayment and illegal dismissal
against EDI before the LA.

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The LA dismissed the complaint. On appeal with the NLRC, the NLRC reversed the decision of the LA
and held that there was underpayment and illegal dismissal thus warranting the award of backwages in favor
of Gran. The CA affirmed the decision of the NLRC. Hence this petition.
Issue:
Whether EDI is guilty of underpayment of wages and illegal dismissal
Ruling:
Yes. EDI claims that Gran was validly dismissed for just cause, due to incompetence and
insubordination or disobedience. To prove its allegations, EDI submitted two letters as evidence. The first is
the July 9, 1994 termination letter, addressed to Gran, from Andrea E. Nicolaou, Managing Director of OAB.
The second is an unsigned April 11, 1995 letter from OAB addressed to EDI and ESI, which outlined the
reasons why OAB had terminated Grans employment.
Petitioner claims that Gran was incompetent for the Computer Specialist position because he had
insufficient knowledge in programming and zero knowledge of the ACAD system. Petitioner also claims that
Gran was justifiably dismissed due to insubordination or disobedience because he continually failed to
submit the required Daily Activity Reports. However, other than the abovementioned letters, no other
evidence was presented to show how and why Gran was considered incompetent, insubordinate, or
disobedient.
EDI failed to overcome the burden of proving that Gran was validly dismissed. An allegation of
incompetence should have a factual foundation. Incompetence may be shown by weighing it against a
standard, benchmark, or criterion. EDI failed to establish any such bases to show how petitioner found Gran
incompetent.

ROLANDO V. AROMIN v. NATIONAL LABOR RELATIONS COMMISSION, BANK OF THE PHILIPPINE


ISLANDS, XAVIER P. LOINAZ, President, and EDMUNDO A. BARCELON, Senior Vice-President
G.R. No. 164824, April 30, 2008, Velasco, Jr., J.
Loss of confidence, as a ground for dismissal, is premised on the fact that the employee concerned holds
a position of responsibility or of trust and confidence.
Facts:
Aromin worked for BPI for 26 years and he was the assistant vice-president when he was terminated.
He headed the BPIs Real Property Management Unit (RPMU) when the botched purchase by Limketkai of a
trust asset held by BPI happened. Revilla, authorized by the owner to sell the lot, informed BPI that he has a
buyer in Limketkai. The brothers Limketkai met with Aromin to negotiate whether they can pay the purchase
price on terms instead of in cash. Limketkai tendered full payment a few days after but BPI refused to receive
it. Limketkai, in a bid to consummate the sale, filed a case against BPI. Asked to comment on the material
allegations of the said complaint, Aromin sent to the BPI Legal Services Division a September 6, 1988
memorandum. He also received a warning about belated submission of work assignments, tardiness, and
unexplained absences. In the course of the trial of the civil case filed by Limketkai, specifically on December 3,
1990 hearing, Aromin testified to the surprise of BPIs legal counsel. A show-cause memorandum gave
Aromin five days to explain why he did so. It appears that Aromins testimony, apart from being inimical to
BPIs interests, contradicted what he wrote in the September 6, 1988 memorandum. The RTC found the
testimony of Aromin vital in determining a "meeting-of-the-minds" regarding the sale of, and the price for, the
Pasig property. The RTC rendered judgment finding for Limketkai. BPI served on Aromin a Notice of

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Termination, citing willful breach of trust and loss of confidence, as grounds for termination. Aromin filed a
complaint for illegal dismissal.
Issue:
Whether Aromin was illegally dismissed
Ruling:
No. BPI had indeed a valid case for dismissal against Aromin on the ground of loss of confidence.
Being an AVP during the period material, Aromin falls under the category of a managerial employee upon
whom trust and confidence had been reposed by the employing bank. Violating that trust and confidence is a
valid cause for dismissal under Art. 282 of the Labor Code. However, the employer must clearly and
convincingly establish the charges. Loss of confidence, as a ground for termination, should not be (1)
simulated; (2) used as a subterfuge for causes which are improper, illegal, or unjustified; (3) arbitrarily
asserted; and (4) a mere afterthought to justify earlier action taken in bad faith.
The position assumed and the answers given by Aromin when he testified proved to be adverse to his
employers interest. The acts committed, inclusive of those done before he took the witness stand to testify
falsely against the interest of the employer, adversely reflected on his competence, loyalty, and integrity. Said
acts were sufficient for his employer to lose trust and in him.

BLUE ANGEL MANPOWER AND SECURITY SERVICES, INC. v. COURT OF APPEALS, ROMEL CASTILLO,
WILSON CIRIACO, GARY GARCES, AND CHESTERFIELD MERCADER
G.R. No. 161196, July 28, 2008, Velasco, Jr., J.
To constitute resignation, it must be unconditional with the intent to operate as such. There must be
clear intention to relinquish the position. The filing of a complaint for illegal dismissal is inconsistent with
resignation.
Facts:
Blue Angel hired respondents as security guards and detailed them at the National College of Business
and Arts (NCBA). On April 20, 1999, respondents filed a complaint for illegal deductions against Blue Angel
and later on amended it to be an action for illegal dismissal. The respondents allege that Blue Angel deducted
P100 from their salary as a cash bond. Upon being apprised of the original complaint for illegal deductions,
Blue Angel terminated their services. In its defense, Blue Angel contended that the respondents committed
Insubordination, sleeping on duty, and absence without leave and when told that they will be subjected to
investigation, they pleaded that they be allowed to resign instead. They tendered their pro-forma letters of
resignation, followed by handwritten resignation letters.
Issue:
Whether the pro-forma letters of resignation and handwritten resignation letters are indication of
respondents resignation
Ruling:
No. The undated, similarly worded resignation letters tended to show that the guards were made to
copy the pro-forma letters, in their own hand, to make them appear more convincing that the guards had
voluntarily resigned. The element of voluntariness of the resignations is even more suspect considering that

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the second set of resignation letters were pre-drafted, similarly worded, and with blank spaces filled in with
the effectivity dates of the resignations. Respondents claimed being forced to sign and copy the proforma resignation letters on pain that they would not get their remaining compensations. The fact that
respondents filed a complaint for illegal dismissal from employment against Blue Angel completely negates
the claim that private respondents voluntarily resigned. Respondents actively pursued their illegal dismissal
case against Blue Angel such that they cannot be said to have voluntarily resigned from their jobs.

GREGORIO V. TONGKO v. THE MANUFACTURERS LIFE INSURANCE CO. (PHILS.), INC. and RENATO A.
VERGEL DE DIOS
G.R. No. 167622, November 7, 2008, Velasco, Jr., J.
The burden of proving the validity of the termination of employment rests with the employer. Failure to
discharge this evidentiary burden would necessarily mean that the dismissal was illegal. Unsubstantiated
suspicions, accusations and conclusions of employers do not provide for legal justification for dismissing
employees. In case of doubt, such cases should be resolved in favor of labor, pursuant to the social justice policy of
our labor laws and Constitution.
Facts:
Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife) is a domestic corporation engaged in life
insurance business. Gregorio Tongko entered into a Career Agents Agreement with Manulife. As an agent, his
duties consisted of canvassing for applications for group policies and other products of the company. Tongko
was named unit manager in Manulife's Sales Agency Organization, branch manager, and sales manager.
Tongko failed to comply with policies of Manulife; thus, his Agency Agreement was terminated.
Tongko filed a complaint with the NLRC against Manulife for illegal dismissal. Tongko, in a bid to
establish an employer-employee relationship, alleged that De Dios gave him specific directives on how to
manage his area of responsibility and also claimed that his dismissal was without basis and that he was not
afforded due process. Manulife alleged that Tongko is not its employee, and that it did not exercise control
over him. Manulife claimed that the NLRC has no jurisdiction over the case.
The labor arbiter decreed that no employer-employee relationship existed between the parties. The
NLRC reversed the labor arbiters decision finding Tongko to have been illegally dismissed. The CA reversed
the decision of the NLRC finding the absence of an employer-employee relationship between the parties and
deeming the NLRC with no jurisdiction over the case.
Issues:
Whether Manulife is guilty of illegal dismissal
Ruling:
Yes. Manulife failed to cite evidence to support its claims. Manulife did not point out the specific acts
that Tongko was guilty of that would constitute gross and habitual neglect of duty or disobedience. Manulife
merely cited Tongko's alleged "laggard performance," without substantiating such claim.
Manulife failed to overcome such burden of proof. Manulife even failed to identify the specific acts by
which Tongko's employment was terminated much less support the same with substantial evidence. Mere
conjectures cannot work to deprive employees of their means of livelihood. Tongko was illegally dismissed.
Moreover, as to Manulife's failure to comply with the twin notice rule, it reasons that Tongko not being its

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employee is not entitled to such notices. Since we have ruled that Tongko is its employee, however, Manulife
clearly failed to afford Tongko said notices. Thus, on this ground too, Manulife is guilty of illegal dismissal.

WESLEYAN UNIVERSITY PHILIPPINES v. NOWELLA REYES


G.R. No. 208321, July 30, 2014, Velasco, Jr., J.
An employer cannot be compelled to retain an employee who is guilty of acts inimical to the interests of
the employer.
Facts:
Wesleyan University dismissed its University Treasurer Nowella Reyes since it allegedly lost trust
and confidence owing to an interplay of the events such as: (1) encashing a check payable to the University
Treasurer in the amount 300K; (2) encashing crossed checks payable to the University Treasurer, when the
intention of management in this regard was to merely transfer funds from one of petitioners accounts to
another in the same bank; and (3) spurious duplicate checks bearing her signature were encashed causing
damage to petitioner.
Respondent post-haste filed a complaint for illegal dismissal. Labor Arbiter ruled in her favor.
However, this was reversed by NLRC. On appeal, CA reinstated the Decision of the Labor Arbiter. Hence, this
Petition.
Issue:
Whether there was a valid dismissal on the ground of loss of trust and confidence
Ruling:
Yes. Petitioner adequately proved respondents dismissal was for a just cause, based on a willful
breach of trust and founded on clearly established facts as required by jurisprudence. The question of
whether she was a managerial or rank-and file employee does not matter in this case because not only is
there basis for believing that she breached the trust of her employer, her involvement in the irregularities
attending to petitioners finances has also been proved.
A company has the right to dismiss its employees if only as a measure of self-protection. This is truer
in the case of supervisors or personnel occupying positions of responsibility. Respondent was not an ordinary
rank-and-file employee as she was the Treasurer who was in charge of the coffers of the University. It would
be oppressive to require petitioner to retain in their management an officer who has admitted to knowingly
and intentionally committing acts which jeopardized its finances and who was untrustworthy in the handling
and custody of University funds.
Authorized causes
RUBEN L. ANDRADA, BERNALDO V. DELOS SANTOS, JOVEN M. PABUSTAN, FILAMER ALFONSO, VICENTE
A. MANTALA, JR., HARVEY D. CAYETANO, and JOVENCIO L. POBLETE v. NATIONAL LABOR
RELATIONS COMMISSION, SUBIC LEGEND RESORTS AND CASINO, INC., and/or MR. HWA PUAY, MS.
FLORDELIZA MARIA REYES RAYEL, and its CORPORATE OFFICERS
G.R. No. 173231, December 28, 2007, Velasco, Jr., J.
Employment is not merely a lifestyle choice to stave off boredom. Employment to the common man is his
very life and blood, which must be protected against concocted causes to legitimize an otherwise irregular

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termination of employment. Imagined or undocumented business losses present the least propitious scenario to
justify retrenchment.
Facts:
Ruben Andrada, Jovencio Poblete, Filamer Alfonso, Harvey Cayetano, Vicente Mantala, Jr., Bernaldo
delos Santos, and Joven Pabustan were hired on various dates as architects, draftsmen, operators, engineers,
and surveyors in the Subic Legend Resorts and Casino, Inc. (Legend) Project Development Division on various
projects. Legend sent notice to the DOLE of its intention to retrench and terminate the employment of thirtyfour (34) of its employees, which include petitioners, in the Project Development Division. Legend explained
that it would be retrenching its employees on a last-in-first-out basis on the strength of the updated status
report of its Project Development Division.
Legend sent the 34 employees their respective notices of retrenchment, stating the same reasons for
their retrenchment. On the same day, the Labor and Employment Center of the Subic Bay Metropolitan
Authority advertised that Legend was in need of employees for positions similar to those vacated by
petitioners.
Subsequently, 14 of the 34 retrenched employees filed before the Labor Arbiter (LA) a complaint for
illegal dismissal and money claims which ruled in their favor. On appeal, the NLRC reversed the LAs decision.
Said employees filed a petition for certiorari before the CA but it was dismissed on the ground that the
retrenched employees were validly dismissed from employment due to redundancy and not retrenchment. It
also held that the CA held that the NLRC had sufficiently explained that it was not Legend but Gaehin
International Inc. (Gaehin) which asked for Subic Bay Metropolitan Authoritys help in recruiting personnel.
Hence, this petition was filed.
Issue:
Whether the petitioners were validly dismissed based on redundancy and not on retrenchment
Ruling:
No. Retrenchment and redundancy are two different concepts; they are not synonymous and
therefore should not be used interchangeably. This Court explained in detail the difference between the two
concepts in Sebuguero v. NLRC (G.R. No. 115394, September 27, 1995):
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 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. 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 his business, a right consistently recognized and affirmed by this
Court.

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Redundancy exists when the number of employees is in excess of what is reasonably necessary to
operate the business. The declaration of redundant positions is a management prerogative. The
determination that the employees services are no longer sustainable and therefore properly terminable is an
exercise of business judgment by the employer. The wisdom or soundness of this judgment is not subject to
the discretionary review of the Labor Arbiter and NLRC.
However, the pieces of evidence submitted by Legend are mere allegations and conclusions not
supported by other evidence. Legend did not even or explain why it considered petitioners positions
superfluous. The CA puts too much weight on petitioners failure to refute Legends allegations contained in
the document it submitted. However, the employer bears the burden of proving the cause or causes for
termination. Its failure to do so would necessarily lead to a judgment of illegal dismissal.
Substantial evidence is the question of evidence required to establish a fact in cases before
administrative and quasi-judicial bodies. It is that amount of relevant evidence which a reasonable mind
might accept as adequate to support a conclusion.
The basis for retrenchment was not established by substantial evidence, Legend failed to establish by
the same quantum of proof the fact of redundancy; hence, petitioners termination from employment was
illegal.

ALFREDO A. MENDROS, JR. v. MITSUBISHI MOTORS PHILS. CORPORATION (MMPC)


G.R. No. 169780, February 16, 2009, Velasco, Jr., J.
Decisional law teaches that the requirements for a valid retrenchment are: (1) that the retrenchment is
reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis,
but substantial, serious, and real, or only if expected, are reasonably imminent as perceived objectively and in
good faith by the employer; (2) that the employer serves written notice both to the employees concerned and the
DOLE at least a month before the intended date of retrenchment; (3) that the employer pays the retrenched
employee separation pay in an amount prescribed by the Code; (4) that the employer exercises its prerogative to
retrench in good faith; and (5) that it uses fair and reasonable criteria in ascertaining who would be retrenched
or retained.
Facts:
Mitsubishi Motors Philippines Corporation (MMPC) hired Alfredo A. Mendros, Jr. as regular body
prepman, he was then promoted as an assembler major in the companys manufacturing division. Due to
some economic problems, MMPC sustained financial losses. MMPC implemented various cost-cutting
measures, such as but not limited to: cost reduction on the use office supplies and energy, curtailment of
representation and travel expenses, employment-hiring freeze, separation of casuals and trainees, manpower
services reduction, intermittent plant shutdowns, and reduced work week for managerial and other monthlysalaried personnel. Eventually MMPC instituted a series of retrenchment program, one of those who were
affected is Petitioner. The temporary lay-off move was not enough to avert the losses; thus, petitioner and
other personnel received notices of their permanent lay-off. Alfredo filed a case for illegal dismissal and
damages.
Issues:
Whether Alfredos temporary lay-off and eventual retrenchment is legal and valid.
Ruling:

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Yes. The right of management to retrench or to lay-off workers to meet clear and continuing
economic threats or during periods of economic recession to prevent losses is recognized by Article 283 of
the Labor Code. First, MMPC suffered substantial losses in FY 1997 and continued to bleed in 1998. Second,
Alfredo cannot feign ignorance that MMPC was in dire straits in 1997 and 1998. Neither can he impugn the
bona fides of MMPCs retrenchment strategy. Third, Art. 283 uses the phrase "retrenchment to prevent
losses." The phrase implies that retrenchment may be effected even in the event only of expected losses. The
employer need not wait for substantial losses to materialize before preventing such losses. MMPC was
already financially hemorrhaging before finally resorting to retrenchment. Fourth, MMPC had complied with
the prior written notice and separation pay requirements. Finally, as the Court sees it, the merit rating system
MMPC adopted as one of the criteria for selecting who are to be eased out was fair and reasonable under the
premises.

ROSALES v. NEW A.N.J.H. ENTERPRISES


G.R. No. 203355, August 18, 2015, Velasco, Jr., J.
Mere ownership by a single stockholder of all or nearly all of the capital stock of the corporation does
not by itself justify piercing the corporate veil.
Facts:
Due to alleged dwindling capital, respondent wrote the Director of the DOLE Region IV-A a letter
regarding New ANJHs impending cessation of operations and the sale of its assets to respondent NH Oil Mill
Corporation (NH Oil), as well as the termination of thirty-three (33) employees by reason thereof. Petitioners
received their respective separation pays, signed the corresponding check vouchers and executed Quitclaims
and Release before Labor Arbiter Melchisedek A. Guan (LA Guan). LA Guan then declared the labor dispute
between New ANJH and petitioners as dismissed with prejudice on ground of settlement.
Petitioners however, filed a complaint for illegal dismissal, with NLRC Regional Arbitration alleging
in their complaint that while New ANJH stopped its operations, it resumed its operations as NH Oil using the
same machineries and with the same owners and management, thus, in circumvention of their security of
tenure. Petitioners advance the application of the doctrine because they were terminated from employment
on the pretext that there will be an impending permanent closure of the business as a result of an intended
sale of its assets to an undisclosed corporation, and that there will be a change in the management.
Issue:
Whether the cessation of the operations and subsequent sale of ANJH constitutes illegal dismissal
Ruling:
Yes. The application of the doctrine of piercing the veil of corporate fiction is frowned upon.
However, the Court may disregard the corporate fiction if it is used to such an extent that injustice, fraud, or
crime is committed against another. Subsequent events revealed that the buyer of the assets of their
employer was a corporation owned by the same employer and members of his family. Furthermore, the
business re-opened in less than a month under the same management. Mere ownership by a single
stockholder of all or nearly all of the capital stock of the corporation does not by itself justify piercing the
corporate veil. Nonetheless, in this case, other circumstances show that the buyer of the assets of petitioners
employer is none other than his alter ego.
Twin-notice requirement

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ALEX Q. NARANJO, DONNALYN DE GUZMAN, RONALD V. CRUZ, ROSEMARIE P. PIMENTEL, and ROWENA
B. BARDAJE v. BIOMEDICA HEALTH CARE, INC. and CARINA "KAREN" J. MOTOL
G.R. No. 193789, September 19, 2012, Velasco, Jr., J.
The termination of employment must be based on a just or authorized cause of dismissal and the
dismissal must be effected after due notice and hearing.
Facts:
Petitioners are employees of Biomedica Health Care, Inc. with Carina J. Motol as its president. On
November 7, 2006, petitioners were all absent for various personal reasons. Later that day, the petitioners
went to Biomedica to report to work after having received a text message requiring them to proceed to
Biomedica. However, they were refused entry and told to start looking for another workplace. The next day,
petitioners came to work but were not allowed to enter the premises. Carina J. Motol ordered them to look for
another employer. On November 9, 2006 Biomedica sent notices to petitioners accusing them of having
conducted an illegal strike. On November 20, 2006 petitioners filed a case for illegal dismissal with the NLRC.
On November 29, 2006 Biomedica sent notices of termination to petitioners. In its decision, the Labor Arbiter
found that petitioners indeed conducted a mass leave akin to an illegal strike. On appeal, the NLRC reversed
the Labor Arbiter decision saying that petitioners were indeed illegally dismissed. Biomedica then appealed
the case to the CA which reversed the NLRC decision and reinstated the Labor Arbiters decision. The CA
ruled that petitioners staged a mass leave, and such act constitutes serious misconduct.
Issue:
Whether the petitioners were illegally dismissed
Ruling:
Yes. Petitioners were not afforded procedural due process because the notice given to them did not
specify the exact acts that the company considers as constituting an illegal strike. A mere general description
of the charges against the employee by the employer is insufficient. Secondly, petitioners were not afforded
substantive due process. The dismissal of an employee must be based on Just and Authorized causes as
provided under the Labor Code. Serious misconduct is one of the just causes of dismissal under the said code.
However, to justify the dismissal of an employee on the ground of serious misconduct, the employer must
first establish that the employee is guilty of improper conduct, that the employee violated an existing and
valid company rule or regulation, or that the employee is guilty of a wrongdoing. Biomedica failed to establish
that petitioners indeed violated any company rules.
Hearing; meaning of opportunity to be heard
KING OF KINGS TRANSPORT, INC., et al. v. SANTIAGO MAMAC
G.R. No. 170083, June 29, 2007, Velasco, Jr., J.
The following should be considered in terminating an employee: (1) first written notice to be served on
the employees should contain the specific causes or grounds for termination, (2) hearing or conference, and (3)
written notice of termination.
Facts:
Santiago Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC). Most
DMTC employees were transferred to KKTI and were not able to participate in the certification election in

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DMTC. Mamac was required to accomplish a "Conductor's Trip Report" which indicates the ticket opening
and closing for that day of duty and to submit it to the company after each trip for auditing. An "Irregularity
Report" against the employee is issued once irregularity is discovered and the employee is asked to explain
the incident. Upon audit of Mamacs report, KKTI discovered that he declared some sold tickets as returned
tickets causing KKTI to lose income. Although no irregularity report was made, KKTI asked Mamac to explain
the discrepancy as part of its procedure. Mamac said that it was unintentional and that during that day's trip,
the windshield of the bus assigned to them was smashed and they had to cut short the trip. Hence, he got
confused in making the report. Later, he received a letter terminating his employment alleging that the
irregularity which occurred was an act of fraud against the company and also cited other offenses he allegedly
made. Mamac filed a complaint but was dismissed by the labor arbiter. Upon appeal to the NLRC, it ruled that
KKTI shall indemnify Mamac for failure to comply with due process. Mamac filed a Petition for Certiorari
before the CA which affirmed the NLRC but modified its decision by awarding full backwages and further
ruled that there was just cause for his dismissal.
Issue:
Whether KKTI complied with the due process requirements in terminating Mamac
Ruling:
No. The following should be considered in terminating the services of employees:
(1) The first written notice to be served on the employees should contain the specific causes or
grounds for termination against them, and a directive that the employees are given the opportunity to submit
their written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management must accord to the employees to enable them to prepare
adequately for their defense. This should be construed as a period of at least five (5) calendar days from
receipt of the notice to give the employees an opportunity to study the accusation against them, consult a
union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the
complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis
for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice
should specifically mention which company rules, if any, are violated and/or which among the grounds under
Art. 282 is being charged against the employees.
(2) After serving the first notice, the employers should schedule and conduct
a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their
defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the
evidence presented against them by the management. During the hearing or conference, the employees are
given the chance to defend themselves personally, with the assistance of a representative or counsel of their
choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an
amicable settlement.
(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the charge
against the employees have been considered; and (2) grounds have been established to justify the severance
of their employment.
After a finding that petitioners failed to comply with the due process requirements, the CA awarded
full backwages in favor of respondent in accordance with the doctrine in Serrano v. NLRC (G.R. No. 117040,
January 27, 2000). However, the doctrine in Serrano had already been abandoned in Agabon v. NLRC (G.R. No.
158693, November 17, 2004) by ruling that if the dismissal is done without due process, the employer should
indemnify the employee with nominal damages. Thus, for non-compliance with the due process requirements

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in the termination of respondent's employment, petitioner KKTI is sanctioned to pay respondent the amount
of PhP30,000 as damages.

MARILOU S. GENUINO v. NATIONAL LABOR RELATIONS COMMISSION, CITIBANK, N.A., WILLIAM


FERGUSON, and AZIZ RAJKOTWALA
G.R. Nos. 142732-33, December 4, 2007, Velasco, Jr., J.
In dismissing an employee, the Labor Code mandates that the requirement of twin-notices must be met.
The first written notice to be served on the employees should contain the specific causes or grounds for
termination against them, and a directive that the employees are given the opportunity to submit their written
explanation within a reasonable period. The notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being charged against the employees. After serving
the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will
be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present
evidence in support of their defenses; and (3) rebut the evidence presented against them by the management.
After determining that termination of employment is justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances involving the charge against the employees have
been considered; and (2) grounds have been established to justify the severance of their employment.
Facts:
Marilou Genuino, an employee of Citibank, received a letter from the latter charging her with
"knowledge and/or involvement" in transactions "which were irregular or even fraudulent." In the same
letter, Genuino was informed that she was under preventive suspension. Genuino in turn wrote Citibank
asking for a bill of particulars regarding the charges against her. Citibank replied that it had no intention of
converting the case into a full blown trial, as such, Citibank informed Genuino that what it can only give her is
an opportunity to explain her side on the issue of whether she violated the conflict of interest rule, either in
writing or in person during the administrative investigation. Genuino failed to submit a written explanation.
Genuino likewise failed to appear during the administrative investigation. Consequently, Genuino's
employment was terminated by Citibank on grounds of (1) serious misconduct, (2) willful breach of the trust
reposed upon her by the bank, and (3) commission of a crime against the bank.
Issue:
Whether the dismissal of Genuino was made in accordance with procedural due process
Ruling:
No. The letters dated August 23, September 13 and 20, 1993 sent by Citibank did not identify
the particular acts or omissions allegedly committed by Genuino. The August 23, 1993 letter charged
Genuino with having "some knowledge and/or involvement" in some transactions "which have the
appearance of being irregular at the least and may even be fraudulent." The September 13, 1993 letter, on the
other hand, mentioned "irregular transactions" involving Global Pacific and/or Citibank and 12 bank clients.
Lastly, the September 20, 1993 letter stated that Genuino and "Mr. Dante Santos, using the facilities of their
family corporations appear to have participated in the diversion of bank clients' funds from Citibank to, and
investment thereof in, other companies and that they made money in the process, in violation of the conflict
of law rule [sic]." The extent of Genuino's alleged knowledge and participation in the diversion of bank's
clients' funds, manner of diversion, and amounts involved; the acts attributed to Genuino that conflicted with
the bank's interests; and the circumstances surrounding the alleged irregular transactions, were not specified
in the notices/letters. While the bank gave Genuino an opportunity to deny the truth of the allegations in
writing and participate in the administrative investigation, the fact remains that the charges were too general
to enable Genuino to intelligently and adequately prepare her defense.

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While we hold that Citibank failed to observe procedural due process, we nevertheless find Genuino's
dismissal justified. Art. 282(c) of the Labor Code provides that an employer may terminate an employment
for fraud or willful breach by the employee of the trust reposed in him/her by his/her employer or duly
authorized representative. In order to constitute as just cause for dismissal, loss of confidence should relate
to acts inimical to the interests of the employer. Also, the act complained of should have arisen from the
performance of the employee's duties. For loss of trust and confidence to be a valid ground for an employee's
dismissal, it must be substantial and not arbitrary, and must be founded on clearly established facts sufficient
to warrant the employee's separation from work.
As Assistant Vice-President of Citibank's Treasury Department, Genuino was tasked to solicit
investments, and peso and dollar deposits for, and keep them in Citibank; and to sell and/or push for the sale
of Citibank's financial products, such as the MBS, for the account and benefit of Citibank. She held a position of
trust and confidence. There is no way she could deny any knowledge of the bank's policies nor her
understanding of these policies as reflected in the survey done by the bank. She could not likewise feign
ignorance of the businesses of Citibank, and of Global and Torrance. Assuming that Citibank did not engage in
the same securities dealt with by Global and Torrance; nevertheless, it is to the interests of Citibank to retain
its clients and continue investing in Citibank. Curiously, Genuino did not even dissuade the depositors from
withdrawing their monies from Citibank, and was even instrumental in the transfers of monies from Citibank
to a competing bank through Global and Torrance, the corporations under Genuino's control.

R.B. MICHAEL PRESS and ANNALENE REYES ESCOBIA v. NICASIO C. GALIT


G.R. No. 153510, February 13, 2008, Velasco, Jr., J.
Reasonable opportunity under the Omnibus Rules means every kind of assistance that management
must accord to the employees to enable them to prepare adequately for their defense. This should be construed
as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to
study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on
the defenses they will raise against the complaint.
Facts:
R.B. Michael Press hired Nicasio Galit as its offset machine operator. Due to the latters tardiness,
absences, discourtesy to his superiors and unwillingness to render overtime work. Michael Press sent an
office memorandum warning Galit of his dismissal from work and informing him that a hearing shall be held
in the afternoon of the same day to determine the status of his employment. Consequently, Galit was
dismissed.
Issue:
Whether Michael Press complied with the two-notice rule
Ruling:
No. Under the twin notice requirement, the employees must be given two (2) notices before his
employment could be terminated: (1) a first notice to apprise the employees of their fault, and (2) a second
notice to communicate to the employees that their employment is being terminated. Not to be taken lightly of
course is the hearing or opportunity for the employee to defend himself personally or by counsel of his
choice.

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The undue haste in effecting respondents termination shows that the termination process was a
mere simulation that the required notices were given, a hearing was even scheduled and held, but respondent
was not really given a real opportunity to defend himself; and it seems that petitioners had already decided to
dismiss respondent from service, even before the first notice had been given.
Anent the written notice of charges and hearing, there was merely a general description of the
claimed offenses of respondent. The hearing was immediately set in the afternoon of February 23, 1999the
day respondent received the first notice. Therefore, he was not given any opportunity at all to consult a union
official or lawyer, and, worse, to prepare for his defense.
Regarding the February 23, 1999 afternoon hearing, respondent, without any lawyer or friend to
counsel him, was not given any chance at all to adduce evidence in his defense. At most, he was asked if he did
not agree to render overtime work on February 22, 1999 and if he was late for work for 197 days. He was
never given any real opportunity to justify his inability to perform work on those days. This is the only
explanation why petitioners assert that respondent admitted all the charges.
In the February 24, 1999 notice of dismissal, petitioners simply justified respondents dismissal by
citing his admission of the offenses charged. It did not specify the details surrounding the offenses and the
specific company rule or Labor Code provision upon which the dismissal was grounded. In view of the
infirmities in the proceedings, we conclude that termination of respondent was railroaded in serious breach
of his right to due process.

ARMANDO ALILING v. JOSE B. FELICIANO, MANUEL F. SAN MATEO, JOSEPH R. LARIOSA, AND WIDE
WIDE WORLD EXPRESS CORPORATION
G.R. No. 185819, April 25, 2012, Velasco, Jr., J.
To justify the dismissal of an employee, the employer must prove that the dismissal was for just cause
and that the employee was afforded due process prior to dismissal. The employer has the onus of proving with
clear, accurate, consistent, and convincing evidence the validity of the dismissal.
Facts:
Armando Aliling and Wide Wide World Express Corporation (WWWEC) entered into an employment
contract. Under the terms of the contract, Alilings regular status shall be determined on the basis of his
performance. Barely a month after, Manuel F. San Mateo e-mailed Aliling to express dissatisfaction with the
latters work performance. Joseph R. Lariosa sent a letter to Aliling to report to the Human Resources
Department and explain his absence from September 20 to 25. Aliling responded two days after and denied
being absent on such days, he presented his timesheet to prove his claim. Alilings explanation came with a
query regarding the withholding of his salary from September 11 to 25. Later on, in a letter dated September
27, Aliling expressed his resignation. However, WWWEC failed to take action so Aliling requested for
reinstatement. Lariosa replied on October 1 informing Aliling that his case is still in the process of being
evaluated. Lariosa again wrote Aliling to advise him of the termination of his services due to non-satisfactory
performance during his probation period. Aliling filed a case for illegal dismissal. The Labor Aribiter, NLRC,
and CA ruled that Aliling was illegally dismissed because he was not informed, at the time of his engagement,
of the reasonable standards under which he will qualify as a regular employee.
Issue:
Whether Armando Aliling was illegally dismissed
Ruling:

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Yes. Lariosas letter betrayed managements intention to dismiss the petitioner for alleged
unauthorized absences. Aliling was in fact made to explain and he did so satisfactorily. But WWWEC
nonetheless proceeded with its plan to dismiss the petitioner for non-satisfactory performance, although the
corresponding termination letter did not even specifically state Alilings non-satisfactory performance, or that
Alilings termination was by reason of his failure to achieve his set quota. In order for the quota imposed to be
considered a valid productivity standard and thereby validate a dismissal, managements prerogative of fixing
the quota must be exercised in good faith for the advancement of its interest. The duty to prove good faith,
however, rests with WWWEC as part of its burden to show that the dismissal was for a just cause. WWWEC
must show that such quota was imposed in good faith. This WWWEC failed to do.
WWWEC also failed to comply with procedural due process. The adverted memo dated September 20,
2004 of WWWEC supposedly informing Aliling of the likelihood of his termination and directing him to
account for his failure to meet the expected job performance would have had constituted the charge sheet,
sufficient to answer for the first notice requirement, but for the fact that there is no proof such letter had been
sent to and received by him.
Reinstatement
ALEXANDER B. BANARES v. TABACO WOMEN'S TRANSPORT SERVICE COOPERATIVE (TAWTRASCO),
represented by DIR. RENOL BARCEBAL, ET AL.
G.R. No. 197353, April 1, 2013, Velasco, Jr., J.
Reinstatement presupposes that there shall be no demotion in rank and/or diminution of salary,
benefits and other privileges. If the position previously occupied no longer exists, the restoration shall be to a
substantially equivalent position in terms of salary, benefits and other privileges.
Facts:
Banares was the general manager of Tabaco Women's Transport Service Cooperative (TAWTRASCO)
until its management terminated his services. Banares filed a complaint for illegal dismissal and payment of
monetary claims before the Labor Arbiter. Judgment is rendered declaring Banares to have been illegally
dismissed. Eventually, the parties entered into a Compromise Agreement, in which petitioner waived a
portion of his monetary claim, specifically his backwages. In turn, TAWTRASCO reinstated the petitioner.
However, barely a week into his new assignment in Virac terminal, Banares has not reported for work.
Banares in a letter-reply to management, stated that the reason for not reporting for work is that the
reinstatement effected is an artificial kind of return-to-work order. Banares filed a complaint against
TAWTRASCO for non-payment of salaries and withholding of privileges before the LA which was granted.
TAWTRASCO appealed to the NLRC which dismissed the appeal. The CA on the other hand found
TAWTRASCO to have fully reinstated Banares to his former post and that he abandoned his work when he
stopped reporting to his Virac terminal assignment.
Issue:
1.

Whether there is a genuine reinstatement of petitioner to his former position

2.

Whether petitioners refusal to report to work at the Virac terminal constitutes abandonment

Ruling:
1.

No. Management has a prerogative to transfer an employee from one office or station to another
within the business establishment, as long as there is no resulting demotion or diminution of salary
and other benefits and/or the action is not motivated by consideration less than fair or effected as a
punishment or to get back at the reinstated employee. In this case, the "reinstatement" of Banares as

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general manager of TAWTRASCO, was not a real, bona fide reinstatement in the context of the Labor
Code and pertinent decisional law. First, TAWTRASCO directed Banares to report to the Virac
terminal with duties and responsibilities not befitting a general manager of a transport company.
Second, TAWTRASCO did not even provide him with a formal office space.
2.

No. For abandonment to exist, it is essential (1) that the employee must have failed to report for
work or must have been absent without valid or justifiable reason; and (2) that there must have been
a clear intention to sever the employer-employee relationship manifested by some overt acts. As
reflected above, the reinstatement order has not been faithfully complied with. And varied but
justifiable reasons obtain which made Banaress work at the Virac terminal untenable. To reiterate,
there was a lack of a viable office: no proper office space, no office furniture and equipment, no office
supplies. This is not to mention Banaress board and lodging privilege which he was deprived of
without explanation.
Preventive Suspension

SMART COMMUNICATIONS, INC, MR. NAPOLEON L. NAZARENO, AND MR. RICKY P. ISLA v. JOSE LENI Z.
SOLIDUM and JOSE LENI Z. SOLIDUM v. SMART COMMUNICATIONS, INC., MR. NAPOLEON L. NAZARENO,
AND MR. RICKY P. ISLA
G.R. Nos. 197836 and 197763, December 07, 2015, Velasco, Jr., J.
Preventive suspension is a disciplinary measure for the protection of the company's property pending
investigation of any alleged malfeasance or misfeasance committed by the employee.
FACTS:
Smart hired Solidum as Department Head of Smart Prepaid/Buddy Activations. Solidum later on
received a Notice to Explain charging him with acts of dishonesty and breach of trust and confidence stating
that he violated various company policies. He was charged with several offenses and was placed in preventive
suspension for 30 days. In a letter, Soldium denied the charges against him. The continued audit investigation
found that he was guilty for more offenses and thus, he was placed under preventive suspension again for 10
days. He was given an opportunity to present his stand as Smart sent the documents he requested so he can
prepare an explanation but then he refused to accept them, thus, he was placed under an additional 10 days
of preventive suspension. The company wished to remove him for breach and trust and confidence. A Notice
of Termination was served on him. Solidum filed a complaint for illegal suspension and dismissal with money
claims before the NLRC claiming his suspension and termination were without just cause and due process.
The labor arbiter declared that the extended period of suspension without pay was illegal and that Solidum
was unjustly dismissed from work without observance of procedural due process. He stated that the ground
for his dismissal is untenable as Solidum is not a managerial employee. Smart appealed to the NLRC but it was
denied for having been filed out of time. Smart, in its MR, claimed that they filed it on time as they received
the Labor Arbiters decision at a later date. The NLRC granted the motion. The NLRC reversed the labor
arbiters decision which the CA affirmed.
ISSUE:
(1) Whether Solidums 2nd preventive suspesion is valid
(2) Whether Solidum is a managerial employee and can be validly dismissed for loss of trust and
confidence.
RULING:
(1) Yes. The 2nd preventive suspension is valid

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While the Omnibus Rules limits the period of preventive suspension to thirty (30) days, such time
frame pertains only to one offense by the employee. However, if the employee is charged with another
offense, then the employer is entitled to impose a preventive suspension not to exceed 30 days specifically for
the new infraction. A fresh preventive suspension can be imposed for a separate or distinct offense. An
employer is well within its rights to preventively suspend an employee for other wrongdoings that may be
later discovered while the first investigation is ongoing.
(2) Yes. Solidum is a managerial employee.
Solidum denies that he is a managerial employee by stating that just because he directed
subordinates and had a large salary, it does not mean that he was a managerial employee. Solidum denies
having the power to lay down and execute management policies.
However, Solidum does not deny having "the authority to devise, implement and control strategic
and operational policies of the Department he was then heading." This is clearly the authority to lay down and
execute management policies. The CA affirmed these findings. Thus, the NLRC and the CA correctly found that
Solidum was a managerial employee. As such, he may be validly dismissed for loss of trust and confidence.
Constructive Dismissal
EXOCET SECURITY AND ALLIED SERVICES CORPORATION AND/OR MA. TERESA MARCELO
v. ARMANDO D. SERRANO
G.R. No. 198538, September 29, 2014, Velasco Jr., J.
Temporary off-detail or the period of time security guards are made to wait until they are transferred
or assigned to a new post or client does not constitute constructive dismissal, so long as such status does not
exceed six months.
Facts:
Exocet is engaged in providing security personnel to its clients. By virtue of its contract with JG
Summit, Exocet assigned Armando Serrano as close-in security for various officers. 11 years after, Serrano
was relieved by JG Summit. For more than six months after he reported back to Exocet, Serrano was without
any re-assignment. Serrano then filed a complaint for illegal dismissal against Exocet with the NLRC.
The Labor Arbiter found that Serrano, while not actually dismissed, was placed on a floating status
for more than six months and so, was deemed constructively dismissed. Acting on Exocets motion for
reconsideration, the NLRC deviated, finding that Serranos termination was due to his own fault and failure to
accept a re-assignment. The NLRC removed the award for backwages but proceeded to affirm in toto the
decision of the Labor Arbiter. The CA however, found Serrano to have been constructively dismissed.
Issue:
Whether Serrano was constructively dismissed
Ruling:
No. The floating status situation was considered by this Court as a form of temporary retrenchment
or lay-off. It is that period when security guards are in between assignments or when they are made to wait
after being relieved from a previous post until they are transferred to a new one.

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The Court has applied Article 292 of the Labor Code by analogy to set the period of temporary lay-off
to a maximum of six months. Consequently, the DOLE issued DO 14-01, providing in Section 6.5 in relation to
Sec. 9.3, that the lack of service assignment for a continuous period of six months is an authorized cause for
the termination of the employee, who is then entitled to a separation pay equivalent to half month pay for
every year of service. The Employer shall still serve a written notice on Serrano and the DOLE one month
before the intended date of termination. However, Serranos lack of assignment for more than six months
cannot be attributed to Exocet because the latter had already offered Serrano a position in the general
security service since there were no available clients requiring positions for VIP security. It was only Serrano
who declined the position because it was not the post that suited his preference.

Certification Election
S.S. VENTURES INTERNATIONAL, INC. v. S.S. VENTURES LABOR UNION AND DIRECTOR HANS LEO
CACDAC, IN HIS CAPACITY AS DIRECTOR OF THE BUREAU OF LABOR RELATIONS
G.R. No. 161690, July 23, 2008, Velasco, Jr., J.
To decertify a union, it is not enough to show that the union includes ineligible employees in its
membership. It must also be shown that there was misrepresentation, false statement, or fraud in connection
with the application for registration and the supporting documents, such as the adoption or ratification of the
constitution and by-laws or amendments thereto and the minutes of ratification of the constitution or by-laws,
among other documents.
Facts:
On March 21, 2000, S.S. Ventures Labor Union (Union) filed a petition for certification election in behalf
of the rank-and-file employees of S.S. Ventures with the DOLE. Of the 542 signatures, 82 of which belong to
terminated SS Ventures employees on the basic documents supporting the petition. The certification election
was successful and the Union obtained a Certificate of Registration. On August 21, 2000, SS Ventures sought
to cancel the Unions Certificate of Registration alleging that the 82 signatures belonging to terminated
employees were obtained through fraud, and misrepresentation.
Issue:
Whether the Unions Certificate of Registration must be cancelled
Ruling:
No. According to Art. 239(a) of the Labor Code, the grounds for cancellation of Certificate of
Registration of a Union is the commission of Fraud and Misrepresentation in connection with the adoption or
ratification of the Unions constitution and like documents. After a labor organization has filed the necessary
registration documents, it becomes mandatory for the Bureau of Labor Relations to check if the
requirements under Art. 234 of the Labor Code have been complied with. The issuance to the Union of
Certificate of Registration necessarily implies that its application for registration and the supporting
documents thereof are prima facie free from any vitiating irregularities.

EAGLE RIDGE GOLF & COUNTRY CLUB v. COURT OF APPEALS and EAGLE RIDGE EMPLOYEES
UNION (EREU)
G.R. No. 178989, March 18, 2010, Velasco, Jr., J.

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Any seeming infirmity in the application and admission of union membership, most especially in cases of
independent labor unions, must be viewed in favor of valid membership.
Facts:
Eagle Ridge Employees Union (EREU) filed a petition for certification election. The employer opposed
the petition on the ground of misrepresentation and fraud in connection with the adoption of its constitution
and the numerical composition of the union.
The employer alleges that EREU declared having 30 members in the application when the minutes
only show 26 members. It also alleged that one signature in the ratified constitution was forged. The
employer further contended that five employees already withdrew from the union. EREU, on the other hand,
asserts bona fide compliance with the registration requirements.
Issue:
Whether there was fraud in the application of the union
Ruling:
No. The members of the EREU totaled 30 employees when it applied on December 19, 2005 for
registration. The Union complied with the mandatory minimum 20% membership requirement under
Art. 234(c). The Union has sufficiently explained the discrepancy between the number of those who attended
the organizational meeting showing 26 employees and the list of union members showing 30. The difference
is due to the additional four members admitted two days after the organizational meeting as attested to by
their duly accomplished Union Membership forms. Consequently, the total number of union members, as of
December 8, 2005, was 30, which was truthfully indicated in its application for registration on December 19,
2005.
As aptly found by the BLR Director, the Union already had 30 members when it applied for
registration, for the admission of new members is neither prohibited by law nor was it concealed in its
application for registration. Eagle Ridges contention is flawed when it equated the requirements under
Art. 234(b) and (c) of the Labor Code. Par. (b) clearly required the submission of the minutes of the
organizational meetings and the list of workers who participated in the meetings, while par.
(c) merely required the list of names of all the union members comprising at least 20% of the bargaining
unit. The fact that EREU had 30 members when it applied for registration on December 19, 2005 while only
26 actually participated in the organizational meeting is borne by the records.
The right of employees to self-organization and membership in a union must not be trammeled by
undue difficulties. When the Union said that the four employee-applicants had been admitted as union
members, it is enough to establish the fact of admission of the four that they had duly signified such desire by
accomplishing the membership form. The fact that the Union owing to its scant membership, had not yet fully
organized its different committees evidently shows the direct and valid acceptance of the four employee
applicants rather than deter their admission as erroneously asserted by Eagle Ridge.

Union Security Clauses


ALABANG COUNTRY CLUB, INC. v. NATIONAL LABOR RELATIONS COMMISSION, ALABANG COUNTRY
CLUB INDEPENDENT EMPLOYEES UNION, CHRISTOPHER PIZARRO, MICHAEL BRAZA, and NOLASCO
CASTUERAS
G.R. No. 170287, February 14, 2008, J. Velasco, Jr.

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In terminating the employment of an employee by enforcing the union security clause, the employer
needs only to determine and prove that: (1) the union security clause is applicable; (2) the union is requesting for
the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the
unions decision to expel the employee from the union. These requisites constitute just cause for terminating an
employee based on the CBAs union security provision.
Facts:
Pizarro, Braza and Castueras were officers of Alabang Country Club Union. They were expelled from
the union for alleged malversation of union funds. The union invoked the Security Clause of the CBA which
provided for a maintenance of membership shop, and demanded that the Club dismiss private respondents.
The Club required the three respondents to show cause in writing, and called private respondents for an
informal conference inquiring about the charges against them. Nonetheless, after weighing the verbal and
written explanations, the Club dismissed private respondents. Private respondents challenged their dismissal
in an illegal dismissal complaint.
Issue:
Whether respondents were illegally dismissed
Ruling:
No The three respondents were expelled from the after due investigation for malversation of Union
funds. The Union properly requested the Club to terminate respondents. In compliance with the Unions
request, the Club reviewed the documents submitted by the Union, requested said respondents to submit
written explanations, and afforded them reasonable opportunity to present their side. After it had determined
that there was sufficient evidence, the Club dismissed them from their employment.

Unfair Labor Practice of Employers


UNIVERSITY OF SANTO TOMAS FACULTY UNION v. UNIVERSITY OF SANTO TOMAS, REV. FR. ROLANDO
DE LA ROSA, REV. FR. RODELIO ALIGAN, DOMINGO LEGASPI, and MERCEDES HINAYON
G.R. No. 180892, April 7, 2009, Velasco, Jr., J.
Whether the employee or employer alleges that the other party committed ULP, it is the burden of the
alleging party to prove such allegation with substantial evidence. Such principle finds justification in the fact
that ULP is punishable with both civil and/or criminal sanctions.
Facts:
Two groups were claiming to be the University of Santo Tomas Faculty Union (USTFU): the Gamilla
Group and Mario Group. The latter is led by Atty. Eduardo J. Mario, Jr., the incumbent president of the
union while the former is led by Gil Gamilla who was elected as its president during a convocation held on
October 4, 1996. The Mario Group filed a complaint for ULP against the UST with the Arbitration Branch of
the NLRC. It also filed a complaint with the Office of the Med-Arbiter of the DOLE praying for the nullification
of the election of the Gamilla Group as officers of the USTFU. The said election was declared null and void. On
the other hand, the Arbitration Branch of the NLRC issued a decision dismissing the complaint on the ground
that USTFU failed to establish with clear and convincing evidence that indeed UST was guilty of ULP. The acts
of UST which USTFU complained of as ULP were the following: (1) allegedly calling for a convocation of
faculty members which turned out to be an election of officers for the faculty union; (2) subsequently dealing
with the Gamilla Group in establishing a new CBA; and (3) the assistance to the Gamilla Group in padlocking
the USTFU office.

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Issue:
Whether UST is guilty of unfair labor practice
Ruling:
No. Whether the employee or employer alleges that the other party committed ULP, it is the burden
of the alleging party to prove such allegation with substantial evidence. Such principle finds justification in
the fact that ULP is punishable with both civil and/or criminal sanctions.
The Memorandum issued by the Secretary General of UST does not support a claim that UST
organized the convocation in connivance with the Gamilla Group. In no way can the contents of this
memorandum be interpreted to mean that faculty members were required to attend the convocation.
Respondents could not have been expected to stop dealing with the Gamilla Group on the mere accusation of
the Mario Group that the former was not validly elected into office. As the CA ruled correctly, until the
validity of the election of the Gamilla Group is resolved with finality, respondents could not be faulted for
negotiating with said group. As to the padlocking of the USTFU office, the mere presence of Justino Cardenas,
Detachment Commander of the security agency contracted by the UST, cannot be equated to a positive act of
"aiding" the Gamilla Group in securing the USTFU office.
Petitioner makes several allegations that UST committed ULP. The onus probandi falls on the
shoulders of petitioner to establish or substantiate such claims by the requisite quantum of evidence. In labor
cases as in other administrative proceedings, substantial evidence or such relevant evidence as a reasonable
mind might accept as sufficient to support a conclusion is required. In the petition at bar, petitioner miserably
failed to adduce substantial evidence as basis for the grant of relief.

Illegal Strike
TOYOTA MOTOR PHILS. CORP. WORKERS ASSOCIATION (TMPCWA) v. NATIONAL LABOR RELATIONS
COMMISSION, (NLRC-2ND DIVISION), HON. COMMISSIONERS: VICTORINO CALAYCAY, ANGELITA
GACUTAN, and RAUL AQUINO, TOYOTA MOTOR PHILIPPINES CORPORATION, TAKESHI FUKUDA, and
DAVID GO
G.R. Nos. 158798-99, October 19, 2007, Velasco, Jr., J.
Noted authority on labor law, Ludwig Teller, lists six (6) categories of an illegal strike, viz: (1) [when it]
is contrary to a specific prohibition of law, such as strike by employees performing governmental functions; or
(2) [when it] violates a specific requirement of law[, such as Article 263 of the Labor Code on the requisites of a
valid strike]; or (3) [when it] is declared for an unlawful purpose, such as inducing the employer to commit an
unfair labor practice against non-union employees; or (4) [when it] employs unlawful means in the pursuit of its
objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art. 264(e) of the
Labor Code]; or (5) [when it] is declared in violation of an existing injunction[, such as injunction, prohibition, or
order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or (6) [when it] is contrary
to an existing agreement, such as a no-strike clause or conclusive arbitration clause.
Facts:
TMPCWA filed a petition for certificate election among the rank-and-file employees of Toyota Motor
Phil. Corp (TMPC), herein private respondent with the National Conciliation and Mediation Board (NCMB) to
be considered its sole and legitimate Union of TMPC. The NCMB decided in favor of TMPCWA. TMPC appealed
to the DOLE Secretary. During the pendency of the appeal, TMPCWA submitted its CBA proposals to TMPC but
the latter refused to negotiate on the ground that there is a pending appeal as regards the legality of being the

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sole and legitimate union of TMPCWA on behalf of TMPCs employees. This prompted TMPCWA to hold
numerous strikes which resulted to huge losses on the part of TMPC. This prompted TMPC to file a petition to
declare the strike illegal against TMPCWA with the NLRC praying that the erring Union members be
dismissed from employment.
The NLRC held for TMPC. On appeal with the CA, the CA affirmed the decision of the NLRC. Now,
TMPCWA assails the decision of the CA on the ground that the strikes and protest undertaken by TMPCWA
was an exercise of their constitutional right to peaceably assemble and to petition the government for redress
of grievances. Hence this petition.
Issue:
Whether the strikes undertaken by TMPCWA were legal
Ruling:
No. The Unions position is weakened by the lack of permit from the City of Manila to hold rallies.
Shrouded as demonstrations, they were in reality temporary stoppages of work perpetrated through the
concerted action of the employees who deliberately failed to report for work on the excuse that they will hold
a rally at the BLR and DOLE offices. The purported reason for these protest actions was to safeguard their
rights against any abuse which the med-arbiter may commit against their cause. However, the Union failed to
advance proof that the med-arbiter was biased against them. The acts of the med-arbiter in the performance
of his duties are presumed regular. The decision not to work for two days was calculated to cripple the
manufacturing arm of Toyota. The ultimate goal of the Union is to coerce Toyota to acknowledge the Union as
the sole bargaining agent of the company.
The Union failed to comply with the following requirements: (1) a notice of strike filed with the DOLE
30 days before the intended date of strike, or 15 days in case of unfair labor practice; (2) strike vote approved
by a majority of the total union membership in the bargaining unit concerned obtained by secret ballot in a
meeting called for that purpose; and (3) notice given to the DOLE of the results of the voting at least seven
days before the intended strike. These requirements are mandatory and the failure of a union to comply with
them renders the strike illegal. The intention of the law in requiring the strike notice and the strike-vote
report is to reasonably regulate the right to strike, which is essential to the attainment of legitimate policy
objectives embodied in the law.
NATIONAL UNION OF WORKERS IN THE HOTEL RESTAURANT AND ALLIED INDUSTRIES (NUWHRAINAPL-IUF) DUSIT HOTEL NIKKO CHAPTER v. THE HONORABLE COURT OF APPEALS (Former Eighth
Division), THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), PHILIPPINE HOTELIERS INC.,
owner and operator of DUSIT HOTEL NIKKO and/or CHIYUKI FUJIMOTO, and ESPERANZA V. ALVEZ
G.R. No. 163942, November 11, 2008, Velasco, Jr., J.
Public officials entrusted with specific jurisdictions enjoy great confidence from this Court. The
Secretary surely meant only to ensure industrial peace as she assumed jurisdiction over the labor dispute. In this
case, we are not ready to substitute our own findings in the absence of a clear showing of grave abuse of
discretion on her part.
Facts:
National Union of Workers in the Hotel Restaurant and Allied Industries Dusit Hotel Nikko Chapter
(Union) is the certified bargaining agent of the regular rank-and-file employees of Dusit Hotel Nikko (Hotel).
The Union submitted its CBA negotiation proposals to the Hotel but the parties failed to arrive at mutually
acceptable terms and conditions. Due to the bargaining deadlock and unsuccessful conciliation, a strike vote
was conducted by the Union on which it decided that it would wage a strike.

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The Union held a general assembly where some members sported closely cropped hair or cleanly
shaven heads. The next day more male Union members came to work sporting the same hair style. The Hotel
prevented these workers from entering the premises claiming that they violated the Hotel's Grooming
Standards. In view of the Hotel's action, the Union staged a picket outside the Hotel premises. For this reason
the Hotel experienced a severe lack of manpower which forced them to temporarily cease operations in three
restaurants.
The Hotel issued notices to Union members, preventively suspending them and subsequently
dismissing them for violation of the duty to bargain in good faith and violation of the Hotel's Grooming
Standards and commission of illegal acts during the illegal strike. The Union filed with the NCMB a Notice of
Strike on the ground of unfair labor practice and union-busting.
The Secretary assumed jurisdiction over the labor dispute and certified the case to the NLRC for
compulsory arbitration. The NLRC held that the concerted action was an illegal strike in which illegal acts
were committed by the Union. The CA affirmed the rulings of the NLRC.
Issue:
Whether the Union conducted an illegal strike
Ruling:
Yes. Art. 212(o) of the Labor Code defines a strike as "any temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute."
In Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. National Labor Relations Commission
(G.R. Nos. 158798-99, October 19, 2007), we cited the various categories of an illegal strike, to wit: (1) when it
is contrary to a specific prohibition of law, such as strike by employees performing governmental functions;
or (2) when it violates a specific requirement of law, [such as Article 263 of the Labor Code on the requisites
of a valid strike]; or (3) when it is declared for an unlawful purpose, such as inducing the employer to commit
an unfair labor practice against non-union employees; or (4) when it employs unlawful means in the pursuit
of its objective, such as a widespread terrorism of non-strikers [for example, prohibited acts under Art.
264(e) of the Labor Code]; or (5) when it is declared in violation of an existing injunction, [such as injunction,
prohibition, or order issued by the DOLE Secretary and the NLRC under Art. 263 of the Labor Code]; or (6)
when it is contrary to an existing agreement, such as a no-strike clause or conclusive arbitration clause.
With the foregoing parameters as guide and the following grounds as basis, we hold that the Union is
liable for conducting an illegal strike for the following reasons:
First, the Union's violation of the Hotel's Grooming Standards was clearly a deliberate and concerted
action to undermine the authority of and to embarrass the Hotel and was, therefore, not a protected action.
The appearances of the Hotel employees directly reflect the character and well-being of the Hotel, being a
five-star hotel that provides service to top-notch clients. In view of the Union's collaborative effort to violate
the Hotel's Grooming Standards, it succeeded in forcing the Hotel to choose between allowing its
inappropriately hair styled employees to continue working, to the detriment of its reputation, or to refuse
them work, even if it had to cease operations in affected departments or service units, which in either way
would disrupt the operations of the Hotel.
The act of the Union was not merely an expression of their grievance or displeasure but, indeed, a
calibrated and calculated act designed to inflict serious damage to the Hotel's finances or its reputation. The
Union's concerted violation of the Hotel's Grooming Standards which resulted in the temporary cessation and
disruption of the Hotel's operations is an unprotected act and should be considered as an illegal strike.

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Second, the Union's concerted action which disrupted the Hotel's operations clearly violated the
CBA's "No Strike, No Lockout" provision. The facts are clear that the strike arose out of a bargaining deadlock
in the CBA negotiations with the Hotel. The concerted action is an economic strike upon which the aforequoted "no strike/work stoppage and lockout" prohibition is squarely applicable and legally binding.
Third, the Union officers and members' concerted action to shave their heads and crop their hair not
only violated the Hotel's Grooming Standards but also violated the Union's duty and responsibility to bargain
in good faith.
Liability of ordinary workers
MADGALA MULTIPURPOSE & LIVELIHOOD COOPERATIVE v.
KILUSANG MANGGAGAWA NG LGS
G.R. No. 191138-39, October 19, 2011 Velasco, Jr., J.
For union officers, knowingly participating in an illegal strike is a valid ground for termination of their
employment. But for union members who participated in a strike, their employment may be terminated only if
they committed illegal acts during the strike and there is substantial proof of their participation.
Facts:
Kilusang Manggagawa ng LGS, Magdala Multipurpose and Livelihood Cooperative (KMLMS) is the
union operating in Magdala Multipurpose & Livelihood Cooperative and Sanlor Motors Corp. KMLMS filed a
notice of strike on March 5, 2002 and conducted its strike-vote on April 8, 2002. However, KMLMS only
acquired legal personality when its registration as an independent labor organization was granted on April 9,
2002. Thereafter, on May 6, 2002, KMLMS, now a legitimate labor organization (LLO) staged a strike where
several prohibited and illegal acts were committed by its participating members. On the ground of lack of
valid notice of strike, ineffective conduct of a strike-vote and commission of prohibited and illegal acts,
petitioners filed their Petition to Declare the Strike of May 6, 2002 Illegal before the NLRC Regional
Arbitration Board (RAB) and prayed that the officers and members of respondent KMLMS who participated in
the illegal strike and who knowingly committed prohibited and illegal activities, respectively, be declared to
have lost or forfeited their employment status.
LA, NLRC, and CA ruled in favor of petitioners but ruled that only 34 workers to have lost their
employment status.
Issue:
Whether the CA erred in refusing to declare as having lost their employment status the rest of the
union strikers who have participated in the illegal strike and committed illegal acts
Ruling:
Yes. The May 6, 2002 strike was illegal, first, because when KMLMS filed the notice of strike on March
5 or 14, 2002, it had not yet acquired legal personality and, thus, could not legally represent the eventual
union and its members. And second, similarly when KMLMS conducted the strike-vote on April 8, 2002, there
was still no union to speak of, since KMLMS only acquired legal personality as an independent LLO only on
April 9, 2002 or the day after it conducted the strike-vote.
In refusing to declare the other strikers as dismissed, the appellate court found that not all of the
photographs in evidence sufficiently show the strikers committing illegal acts and that the identification of
said strikers is questionable considering that some were still identified even when their faces were

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indiscernible from the photographs. We, however, cannot agree with the appellate courts view that there is
no substantial proof of the identity of the other 72 striking union members who committed prohibited and
illegal activities. The prohibited and illegal acts are undisputed. It is only the identity of the striking union
workers who committed said acts that is the crux of the partial modification prayed for by petitioners.
The petitioners have substantially proved the identity of 72 other union members who committed
prohibited and illegal acts during the May 6, 2002 illegal strike, thus:
First, the photographs submitted by petitioners show the identities of the union members who
committed prohibited and illegal acts. Second, the identities of these union members were substantially
proved through the eyewitness of petitioners who personally knew and recognized them. Thus, the identities
of these 72 other union members who participated in the strike and committed prohibited and illegal acts are
not only shown through the photographs, but are also sufficiently supported, as earlier cited, by police blotter
certifications, a criminal complaint for grave coercion, and affidavits of several workers and a proprietor.
Absent any exculpating circumstance, they must all suffer the same fate with the statutorily provided
consequence of termination of employment.

Procedure and Jurisdiction


MARTICIO SEMBLANTE and DUBRICK PILAR v. COURT OF APPEALS, 19th DIVISION, now SPECIAL
FORMER 19th DIVISION, GALLERA DE MANDAUE / SPOUSES VICENTE and MARIA LUISA LOOT
G.R. No. 196426, August 15, 2011, Velasco, Jr., J.
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the Labor Arbiters decision. However, the rule may be relaxed considering the substantial merits of the
case and to prevent miscarriage of justice.
Facts:
Marticio Semblante and Dubrick Pilar filed a complaint for illegal dismissal against Spouses Vicente
and Maria Luisa Loot. They alleged that they were hired as the official masiador and sentenciador of the
cockpit in 1993. However, in 2003, they were denied entry. Respondents denied that petitioners were their
employees and alleged that they were associates of respondents independent contractor, Tomas Vega. They
claimed that petitioners have no regular working time or day and that they are free to decide for themselves
whether to report for work or not. They were only issued identification cards to indicate that they were free
from the normal entrance fee. On June 16, 2004, the Labor Arbiter ruled that petitioners were illegally
dismissed. Respondents counsel received the decision on September 14, 2004 and within the 10-day appeal
period, he filed the respondents appeal with the NLRC, but without posting a cash or surety bond. It was only
on October 11, 2004 that respondents filed an appeal bond. NLRC initially denied but subsequently reversed
itself on the postulate that the appeal was meritorious and the filing of an appeal bond, although belated, is a
substantial compliance with the law. The CA ruled that an exceptional circumstance obtains in the case at
bench which warrants a relaxation of the bond requirement as a condition for perfecting the appeal.
Issue:
Whether the CA correctly entertained the appeal although the appeal bond was filed late
Ruling:
Yes. While respondents had failed to post their bond within the 10-day period, it is evident that
petitioners are NOT employees of respondents. Respondents could never have dismissed petitioners, legally

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or illegally, since respondents were without power or prerogative to do so because they are not petitioners
employers. The rule on the posting of an appeal bond cannot defeat the substantive rights of respondents to
be free from an unwarranted burden of answering for an illegal dismissal for which they were never
responsible.

Appeal to NLRC
ROSALES v. NEW A.N.J.H. ENTERPRISES
G.R. No. 203355, August 18, 2015, Velasco Jr., J.
The NLRC has wide discretion in determining the reasonableness of the bond for purposes of perfecting
an appeal.
Facts:
Petitioners filed a complaint for illegal dismissal, with NLRC Regional Arbitration alleging in their
complaint that while New ANJH stopped its operations, it resumed its operations as NH Oil using the same
machineries and with the same owners and management, thus, in circumvention of their security of tenure.
Executive Labor Arbiter Santos (ELA Santos) found that petitioners had been illegally dismissed and ordered
their reinstatement and the payment of PHP1,006,045.87 corresponding to the petitioners full backwages
less the amount paid to them as their respective separation pay. Respondents filed their Notice of Appeal
with Appeal Memorandum along with a Verified Motion to Reduce Bond with the NLRC and posted 60% of
the award ordered by the LA, or PHP 603,627.52, as their appeal bond. The NLRC denied respondents
Verified Motion to Reduce Bond for lack of merit and so dismissing their appeal for non-perfection,
prompting respondents to file a Motion for Reconsideration with Motion to Admit Additional Appeal Cash
Bond with corresponding payment of additional cash bond but the same was denied. Hence, petitioners filed
a petition for certiorari with the CA. The CA held that private respondents had substantially complied with
the rule requiring the posting of an appeal bond equivalent to the total award given to the employees.
Issue:
Whether there was substantial compliance with the rule requiring the posting of an appeal bond
Ruling:
Yes. On the issue of perfecting the appeal, the CA was correct when it pointed out that Rule VI of the
New Rules of Procedure of the NLRC provides that a motion to reduce bond shall be entertained upon the
posting of a bond in a reasonable amount in relation to the monetary award.
In Garcia v. KJ Commercial (G.R. No. 196830, February 29, 2012), the SC explained: The NLRC has full
discretion to grant or deny the motion to reduce bond, and it may rule on the motion beyond the 10-day
period within which to perfect an appeal. In order to give full effect to the provisions on motion to reduce
bond, the appellant must be allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day
period to perfect an appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground
and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the
motion, the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the
Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious ground
and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the
motion, then the decision of the labor arbiter becomes final and executory. In any case, the rule that the filing
of a motion to reduce bond shall not stop the running of the period to perfect an appeal is not absolute.

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The Court may relax the rule under certain exceptional circumstances in order to resolve
controversies on their merits. These circumstances include: (1) fundamental consideration of substantial
justice; (2) prevention of miscarriage of justice or of unjust enrichment; and (3) special circumstances of the
case combined with its legal merits, and the amount and the issue involved. In this case, the NLRC had
reconsidered its original position and declared that the 60% bond was reasonable given the merits of the
justification provided by respondents in their Motion to Reduce Bond, as supplemented by their Motion for
Reconsideration with Motion to Admit Additional Appeal Cash Bond. The CA affirmed the merits of the
grounds cited by respondents in their motions and the reasonableness of the bond originally posted by
respondents. This is in accord with the guidelines established in McBurnie v. Ganzon (G.R. Nos. 178034 &
178117 G R. Nos. 186984-85, October 17, 2013) where this Court declared that the posting of a provisional
cash or surety bond equivalent to ten percent (10%) of the monetary award subject of the appeal is sufficient
provided that there is meritorious ground therefor.

Jurisdiction of NLRC
ESTRELLITA G. SALAZAR v. PHILIPPINE DUPLICATORS, INC., and /or LEONORA FONTANILLA
G.R. No. 154628, December 6, 2006, Velasco, Jr., J.
The NLRC, in aid of its exclusive appellate jurisdiction, has the authority under Article 218 (d) of the
Labor Code to correct or amend any error committed by a labor arbiter.
Facts:
Salazar was terminated from her employment due to alleged falsification of company records. Salazar
denies receiving Duplicators termination letter. The Labor Arbiter held that the dismissal was for a just cause
but the company breached the twin-notice requirement as provided by law. It ordered Duplicators to pay the
indemnity of PhP10,000.
However, on appeal, the NLRC ruled that there was no dismissal but due to strained relationship,
Duplicators is liable to pay separation pay instead of paying the indemnity imposed by the LA. Salazar now
questions the deletion of the indemnity.
Salazar claims that the NLRC should not have deleted the award of indemnity in her favor since both
Duplicators and Fontanilla did not interpose any appeal from the Decision of Labor Arbiter Caday and hence,
no affirmative relief could be granted to said respondents.
Issue:
Whether the NLRC violated the rule in labor cases that an appellee cannot be awarded any
affirmative relief
Ruling:
No. Petitioner's first ground in her Memorandum of Appeal before the NLRC stated that Labor
Arbiter Caday's ruling that she was not illegally dismissed was erroneous. In resolving this issue, the NLRC
overturned Caday's finding of petitioners valid dismissal, and instead concluded that there was no
termination of petitioners employment. As a consequence, the NLRC had to recall the award of PhP10,000.00
indemnity imposed by Arbiter Caday although not prayed for by Duplicators since the said award was
inconsistent with the finding that petitioners employment subsisted. Without petitioners dismissal, there
can be no legal basis for the indemnity; hence, Duplicators is not obliged to comply with the two-notice
requirement. Petitioner has no reason to complain that she was deprived of monetary benefits since the
NLRCs Decision did not actually benefit Duplicators as the PhP14,095.76 separation pay granted to petitioner
is certainly greater than the PhP10,000.00 indemnity deleted by the NLRC.

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ROSALES v. NEW A.N.J.H. ENTERPRISES


G.R. No. 203355, August 18, 2015, Velasco Jr. J.
Res Judicata does not bar the filing of complaints for illegal dismissal.
Facts:
Due to alleged dwindling capital, respondent wrote the Director of the DOLE Region IV-A a letter
regarding New ANJHs impending cessation of operations and the sale of its assets to respondent NH Oil Mill
Corporation, as well as the termination of thirty-three (33) employees by reason thereof. Petitioners received
their respective separation pays, signed the corresponding check vouchers and executed Quitclaims and
Release before Labor Arbiter Melchisedek A. Guan (LA Guan). LA Guan then declared the labor dispute
between New ANJH and petitioners as dismissed with prejudice on ground of settlement.
Petitioners however, filed a complaint for illegal dismissal, with NLRC Regional Arbitration alleging
in their complaint that while New ANJH stopped its operations, it resumed its operations as NH Oil using the
same machineries and with the same owners and management, thus, in circumvention of their security of
tenure. Executive Labor Arbiter Generoso V. Santos (ELA Santos) found that petitioners had been illegally
dismissed and ordered their reinstatement and payment of full backwages less the amount paid to them as
their respective separation pay. In a Resolution, the NLRC reversed its earlier Decision and ordered the
dismissal of petitioners complaint on the ground that it was barred by the Orders issued by LA Guan under
the doctrine of res judicata. Hence, petitioners filed a petition for certiorari with the CA. The CA declared that
the petitioners complaint for illegal dismissal was already barred by res judicata.
Issue:
Whether the complaint for illegal dismissal was already barred by res judicata
Ruling:
No. For res judicata to apply, the concurrence of the following requisites must be verified: (1) the
former judgment is final; (2) it is rendered by a court having jurisdiction over the subject matter and the
parties; (3) it is a judgment or an order on the merits; (4) there isbetween the first and the second
actionsidentity of parties, of subject matter, and of causes of action. The third requisite is not present. The
Orders rendered by LA Guan cannot be considered as constituting a judgment on the merits. The Orders
simply manifest that petitioners are amenable to the computations made by the company respecting their
separation pay. Nothing more. They do not clearly state the petitioners right or New ANJHs corresponding
duty as a result of the termination. The fourth requisite is also absent. While there may be substantial identity
of the parties, there is no identity of subject matter or cause of action. In SME Bank, Inc. v. De Guzman (G.R. No.
184517, October 8, 2013), the SC held that the acceptance of separation pay is an issue distinct from the
legality of the dismissal of the employees. The conformity of the employees to the corporations act of
considering them as terminated and their subsequent acceptance of separation pay does not remove the taint
of illegal dismissal. Acceptance of separation pay does not bar the employees from subsequently contesting
the legality of their dismissal, nor does it bar them from challenging the legality of their separation from the
service. In the absence of the third and fourth requisites, the appellate court should have proceeded to rule
on the validity of petitioners termination.

Remedies

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DAIKOKU ELECTRONICS PHILS., INC v. ALBERTO J. RAZA
G.R. No. 181688, June 5, 2009, Velasco, Jr., J.
Motions for reconsideration of any decision, resolution or order of the NLRC should be filed within ten
calendar days from receipt of decision.
Facts:
Daikoku hired respondent Alberto J. Raza as company driver, eventually assigning him to serve as
personal driver to its president, Mamuro Ono. Alberto, after being let off by Ono, took the company vehicle to
his own place in Makati City. When asked where he parked the car the night before Alberto lied. Alberto
thereafter received a show-cause notice. He submitted his written explanation of the incident, apologizing
and expressing his regret. Daikokus General Affairs Manager ordered Alberto dismissed from the service.
Dishonesty and other work related performance offenses appeared in the corresponding notice of
termination as grounds for the dismissal action. The Labor Arbiter ordered Daikoku to reinstate Alberto and
to pay backwages. On appeal, the NLRC dismissed Daikokus appeal for failure to perfect it in the manner and
formalities prescribed by law but reinstated the same on Daikokus motion for reconsideration on May 31,
2006. However, for Daikokus failure to reinstate Alberto pending appeal, the NLRC ordered the payment of
Albertos backwages. The CA denied Daikokus appeal.
Issue:
Whether Daikokus motion for reconsideration was belatedly filed
Ruling:
Yes. Daikoku admitted receiving a copy of the May 31, 2006 NLRC resolution on June 16, 2006,
however he only filed its motion for reconsideration on July 3, 2006, or 17 days after the receipt. As provided
in Section 15, Rule VII of the NLRC 2005 Rules of Procedure, motions for reconsideration of any decision,
resolution or order of the Commission should be filed within ten calendar days from receipt of decision.
Procedural rules may be relaxed but only on valid and compelling reasons. The bare invocation of the interest
of substantial justice line is not some magic wand that will automatically compel the Court to suspend the
procedural rules. Procedural rules are not to be belittled, let alone dismissed simply because their nonobservance may have resulted in prejudice to a partys substantial rights. Utter disregard of the rules cannot
be justly rationalized by harping on the policy of liberal construction.

Original and Appellate Jurisdiction of Med Arbiters


TEMIC SEMICONDUCTORS, INC. EMPLOYEES UNION-FFW, et al. v. FEDERATION OF FREE WORKERS, et
al.
G.R. No. 160993, May 20, 2008, Velasco, Jr., J.
TSIEU and Dimaano never raised the issue of any monetary or property claims before the Office of the
NCR-RD and before the proceedings with the Hearing Officer. Much less did they raise this issue on appeal before
the BLR when such was not granted. TSIEU and Dimaano's failure to do so is fatal to its claims insofar as the
enforcement of the appealed order is concerned. They cannot now assert such claims in the enforcement of said
final and executory order.
FACTS:
TSIEU is the accredited bargaining agent for rank-and-file employees of Temic Telefunken
Microelectronics (Phils.), Inc. and is an affiliate of the Federation of Free Workers (FFW). During the

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incumbency of Dimaano as president of TSIEU, the collective bargaining negotiations resulted in a deadlock
which prompted the Dimaano-led union to hold a strike. The Secretary of DOLE issued a return-to-work
order, leading to a split between employee-union members who returned to work and those who continued
to strike, as led by Olivia Robles and Dimaano, respectively.
The two groups of TSIEU conducted separate elections where in Robles and Dimaano were elected by
their respective factions. The result of both elections were communicated to the National Capital Region
Regional Director (NCR-RD) of the Bureau of Labor Relations (BLR), but only the election result of TSIEUDimaano were noted and certified by the Vice President for Political Affairs of FFW. The governing board of
FFW, in an emergency meeting, decided to place TSIEU under its receivership, despite Dimaanos objection as
a member of the same and on the ground that the twin elections resulted in a crisis of leadership. Dimaano
resigned from all of her positions in the FFW.
TSIEU and Dimaano filed the instant case against FFW before the NCR-RD of the BLR for Declaration
of Nullity of Receivership. The RD granted the same on the ground that FFW had no authority to put TSIEU
under receivership. The appeal before the BLR was dismissed. The BLRs resolution became final and
executory and a writ of execution was issued on September 18, 2000. The NCR RD of BLR issued an order
directing the sheriffs to lift the notices of garnishment on the ground that there was a need for prior
determination of the actual amounts due to TSIEU. Later on, the BLR voided its prior writ of execution and
notices of garnishment. The CA affirmed the BLR resolution.
ISSUE:
Whether the writ of execution granting the turnover of properties and remittance of monetary claims
was within the terms of the final and executory order sought to be enforced
RULING:
No. The receivership of TSIEU ordered by private respondents has been duly nullified. The bone of
contention is: What level does the declaration of nullity of receivership extend? A scrutiny of the March 24,
1998 Order of the NCR RD clearly bears out that what had been granted thereat was the nullification of the
receivership of TSIEU by FFW, no more and no less. The fallo of the March 24, 1998 Order unequivocally
granted merely the nullification of the receivership. The disquisitive part, body, or ratio decidendi of the
March 24, 1998 Order--as distinguished from the fallo or dispositive portion--where the findings of fact and
law, the reasons, and evidence to support such findings including the discussions of the issues leading to their
determination are drawn from, likewise obviously did not include the claim for properties and the remittance
of any monetary claim.
ST. MARTIN FUNERAL HOMES v. NATIONAL LABOR RELATIONS COMMISSION, AND BIENVENIDO
ARICAYOS
G.R. NO. 142351, November 22, 2006, Velasco, Jr. J.
While a formal trial or hearing is discretionary on the part of the Labor Arbiter, when there are factual
issues that require a formal presentation of evidence in a hearing, the Labor Arbiter cannot simply rely on the
position papers, more so, on mere unsubstantiated claims of parties.
Facts:
Bienvenido Aricayos assisted in managing St. Martin Funeral Homes without compensation. When
Amelita took over as manager of the company, she found out that St. Martin had arrearages in the payment of
taxes, but company records show that payments were made. Because of this, Amelita dismissed Aricayos from
managing St. Martin's business.

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Aricayos filed a case for illegal dismissal. The NLRC remanded the case to the LA to determine if there
is an employer-employee relationship.
St. Martin insists that the Labor Arbiter actually concluded that there was no employer-employee
relationship between the parties considering the memoranda, position papers, and the documentary evidence
presented in support of their respective positions.
Issue:
Whether the Supreme Court can make a determination of the presence of an employer-employee
relationship between St. Martin and Aricayos based on the evidence on record
Ruling:
No. The issue submitted for resolution is a question of fact which is proscribed by the rule
disallowing factual issues in appeal by certiorari to the Supreme Court under Rule 45. This is explicit in Rule
45, Section 1 that petitions of this nature shall raise only questions of law which must be distinctly set
forth. St. Martin would like the Court to examine the pleadings and documentary evidence extant on the
records of the Labor Arbiter to determine if said official indeed made a finding on the existence of the alleged
employer-employee nexus between the parties based on the facts contained in said pleadings and
evidence. Evidently, this issue is embraced by the circumscription.
Even if we would like to relax the rule and allow the examination of the documentary evidence as an
exception to the general rule, we are precluded by the abject failure of petitioner to attach to the petition
important and material portions of the records as would support the petition prescribed by Rule 45, Section
4. St. Martin asks us to find out if the Labor Arbiter was correct in concluding that respondent Aricayos was
not in its employ; but committed the blunder of not attaching to the petition even the Decision of the Labor
Arbiter sought to be reviewed, the NLRC Decision, the position papers and memoranda of the parties filed
with the Labor Arbiter, the affidavits of petitioners employees, and other pieces of evidence that we can
consider in resolving the factual issue on employment. Without these documents, petitioner cannot be given
the relief prayed for.
Even with the inadequate information and few documents on hand, one thing is clear that the Labor
Arbiter did not set the labor case for hearing to be able to determine the veracity of the conflicting positions
of the parties. On this point alone, a remand is needed.
There are certain admissions by petitioner St. Martin that should have prodded the Labor Arbiter to
conduct a hearing for a more in-depth examination of the contrasting positions of the parties, namely; that
respondent helped Amelitas mother manage the funeral parlor business by running errands for her,
overseeing the business from 1995 up to January 1996 when the mother died, and that after Amelita made
changes in the business operation, private respondent and his wife were no longer allowed to participate in
the management of St. Martin. These facts could have been examined more in detail by the Labor Arbiter in a
hearing to convince himself that there was indeed no employment relationship between the parties as he
originally found.

DANILO OGALISCO v. HOLY TRINITY COLLEGE OF GENERAL SANTOS CITY, INC.


G.R. No. 172913, August 9, 2007, Velasco, Jr., J.

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Factual findings of the labor arbiter and the NLRC are accorded respect and finality when supported by
substantial evidence, which means such evidence as that which a reasonable mind might accept as adequate to
support a conclusion.
Facts:
Danilo Ogalisco was employed by respondent Holy Trinity College as a regular faculty member. In
1997, the school through its vice president, called his attention to a widespread rumor that he was having an
illicit affair with Mrs. Crisanta Hitalia, a married co-teacher. In 1998, he received an invitation to attend an
investigation to be conducted by a panel appointed by the school president. He attended the investigation, but
was deeply surprised when instead of having an investigation regarding the complaints against the school, it
became an investigation against him. He received a copy of the minutes of the investigation and was given
until 7:30 p.m. the next day to answer the charges against him. Petitioner timely submitted his comment.
Nevertheless, the panel recommended his termination. Consequently, Holy Trinity College terminated his
services.
Petitioner filed a complaint for illegal dismissal with the NLRC. The labor arbiter dismissed the
complaint but nevertheless awarded PhP 17,460 to petitioner as indemnity for the schools failure to afford
petitioner due process. Upon appeal to the NLRC, the NLRC likewise affirmed the Decision of the labor arbiter
and denied petitioners Motion for Reconsideration. Petitioner then filed a petition for certiorari with the CA.
However, the CA also dismissed the petition and denied petitioners Motion for Reconsideration. Hence, this
petition.
Issue:
Whether the petitioner was validly dismissed
Ruling:
Yes. The labor arbiter, NLRC, and CA unanimously found that petitioner was validly dismissed.
Petitioner, however, failed to show any extraordinary circumstance why this Court should disturb the factual
findings of the labor arbiter which were affirmed by the NLRC and the CA. Indeed, substantial evidence is
extant on record that showed convincingly the extra-marital affair of petitioner with his co-teacher, Hitalia.
Hence, petitioners termination is valid and legal under Article 282 of the Labor Code.

Social Welfare Legislation (P.D. 626)

SSS Law (R.A. No. 8282)


BERNARDINA P. BARTOLOME v. SOCIAL SECURITY SYSTEM and SCANMAR MARITIME SERVICES, INC.
G.R. No. 192531, November 12, 2014, Velasco, Jr., J.
The term "parents" in the phrase "dependent parents" in Article 167 (j) of the Labor Code is used and
ought to be taken in its general sense and cannot be unduly limited to "legitimate parents."
Facts:
Due to the death of John Colcol, an employee of Scanmar Maritime Services, Inc., Bernardina P.
Bartolome, Johns biological mother filed a claim for death benefits with the Social Security System (SSS).
However, the SSS La Union office denied the claim and ruled that Bartolome is not entitled to death benefits of

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Colcol because she is no longer considered as the parent of John Colcol as he was legally adopted by Cornelio
Colcol. On appeal, the Employees Compensation Commission (ECC) affirmed the decision of SSS. The ECC
ruled that the legal parent referred to by P.D. 626, as amended, as the beneficiary, who has the right to file the
claim, is the adoptive father of the deceased and not herein appellant. Hence, this petition.
Issue:
Whether the biological mother is entitled to receive the benefits
Ruling:
Yes. The rule limiting death benefits claims to the legitimate parents is contrary to law. Rule XV, Sec.
1(c)(1) of the Amended Rules on Employees Compensation deviated from the clear language of Art. 167 (j) of
the Labor Code when it interpreted the phrase "dependent parents" as "legitimate parents."
When the law does not distinguish, one should not distinguish. Plainly, "dependent parents" are
parents, whether legitimate or illegitimate, biological or by adoption, who are in need of support or
assistance. Article 167 (j), as couched, clearly shows that Congress did not intend to limit the phrase
"dependent parents" to solely legitimate parents. Article 167 provides that "in their absence, the dependent
parents and subject to the restrictions imposed on dependent children, the illegitimate children and
legitimate descendants who are secondary beneficiaries." Had the lawmakers contemplated "dependent
parents" to mean legitimate parents, it would have simply said descendants and not "legitimate descendants."
Employees Compensation
JESSIE V. DAVID, represented by his wife, MA. THERESA S. DAVID, and children, KATHERINE and
KRISTINA DAVID v. OSG SHIP MANAGEMENT MANILA, INC., and/or MICHAELMAR SHIPPING SERVICES
G.R. No. 197205, September 26, 2012, Velasco, Jr., J.
It is sufficient that there is a reasonable linkage between the disease suffered by the employee and his
work to lead a rational mind to conclude that his work may have contributed to the establishment or, at the very
least, aggravation of any pre-existing condition he might have had.
Facts:
Jessie David entered into a Contract of Employment with OSG Manila for its principal Michaelmar as
Third Officer of its crude tanker. Prior to embarkation, David was declared fit for further sea duty. While
onboard the ship, he suffered intolerable pains on his left foot. He was diagnosed with lipoma on the upper
left leg with a possible calcaneus spur on the left foot., but found to be fit for work. After his return to the
country, David was referred to Dr. Lim, OSG Manilas company-designated physician. The MRI showed a mass
on his left foot. Reports from Dr. Lim and Dr. Pena of Metropolitan Medical Center showed that the soft tissue
sarcoma was caused by exposure to certain chemicals. Despite the non-conclusive findings of both doctors,
OSG Manila issued a certification stating that David has been given a permanent disability Grade 1 by the
Marine Medical Services of the hospital. David underwent chemotherapy but the company refused to
shoulder his expenses. He filed a complaint for total and permanent disability benefits and damages. The
Labor Arbiter and NLRC ruled in his favor, finding the certification binding on the company. The CA reversed
the ruling. David argues that the illness was presumed work-related and it is up to the company to overcome
such presumption.
Issue:

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Whether the illness was work-related, thus entitling David to disability benefits
Ruling:
Yes. Deemed incorporated into the contract of employment are the provisions of the 2000 POEAStandard Employment Contract. Sec. 20(B) provides that illnesses not listed in Sec. 32 are disputably
presumed as work-related. David suffered from malignant fibrous histiocytoma (MFH) in his left thigh. MFH
is not one of the diseases enumerated under Sec. 32 of the POEA-SEC. This disputable presumption works in
favor of the employee pursuant to the mandate under EO 247 under which the POEA-SEC was created: "to
secure the best terms and conditions of employment of Filipino contract workers and ensure compliance
therewith" and "to promote and protect the well-being of Filipino workers overseas." Hence, unless contrary
evidence is presented by the seafarers employer/s, this disputable presumption stands.
David showed that part of his duties as a Third Officer of the crude tanker M/T Raphael involved
"overseeing the loading, stowage, securing and unloading of cargoes." As a necessary corollary, David was
frequently exposed to the crude oil that M/T Raphael was carrying. It has been regarded that the hazardous
chemicals in crude oil can possibly contribute to the formation of cancerous masses. David has provided more
than a reasonable nexus between the nature of his job and the disease that manifested itself on the sixth
month of his last contract with respondents.
This reasonable connection has not been convincingly refuted by respondents. On the contrary,
respondents do not deny the functions performed by David on board M/T Raphael or the cargo transported
by the tanker in which he was assigned. The quantum of evidence required in labor cases to determine the
liability of an employer for the illness suffered by an employee under the POEA-SEC is not proof beyond
reasonable doubt but mere substantial evidence or "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.
TRANSOCEAN SHIP MANAGEMENT (PHILS.), INC., CARLOS S. SALINAS, and GENERAL MARINE SERVICES
CORPORATION v. INOCENCIO B. VEDAD
G.R. Nos. 194490-91, March 20, 2013, Velasco, Jr., J.
Where the evidence may be reasonably interpreted in two divergent ways, one prejudicial and the other
favorable to the overseas workers, the balance must be tilted in their favor consistent with the principle of social
justice.
Facts:
Inocencio B. Vedad was a seafarer employed by Transocean. Inocencio's employment under the
POEA-SEC was for a 10-month period and he was deployed and went on board M/V Invicta after the required
pre-employment medical examination (PEME) which gave him a clean bill of health.
Before the expiry of his 10-month contract, Inocencio was repatriated for medical reasons because
while on board M/V lnvicta he fell ill and experienced fever, sore throat and pain in his right ear. He
underwent medical examination with the finding of ''chronic suppurative otitis media right CSOM(R) with
acute pharyngitis, with mild maxillary sinusitis," for which he was prescribed antibiotics and ear drops with
the recommendation of a follow-up examination of the CSOM(R). He underwent tonsillectomy but was later
found by a histopathology report to be suffering from cancer of the right tonsil. Inocencio was advised to
undergo chemotherapy and linear treatment at a cost of P500, 000, which Transocean and General Marine
promised to shoulder. Inocencio started with the procedure but could not continue due to the failure of
Transocean and General Marine to provide the necessary amount. Inocencio filed a complaint before the
Labor Arbiter praying for total permanent disability benefits and sickness allowance.

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The Labor Arbiter awarded permanent total disability benefits plus attorneys fees while dismissing
all other claims. The Labor Arbiter, applying Section 20 of the POEA-SEC, ruled Inocencio's tonsil cancer to be
presumptively work-related. The NLRC vacated that of the Labor Arbiter and awarded sickness allowance
equivalent to 120 days salary and reimbursement of Inocencio's medical expenses. The CA modified the
NLRCs decision by setting aside the award of sickness allowance but affirming the grant of reimbursement of
medical expenses.
Issues:
1.

Whether Inocencio is entitled to sickness allowance and reimbursement of his medical expenses

2.

Whether Inocencio is entitled to permanent total disability benefits

Ruling:
1. Yes. Inocencio got ill with what appeared to be tonsillitis while on board M/V lnvicta, for which
he was treated at a foreign port where the ship docked. His malady still continued despite the treatment as he
was, in fact, repatriated before the end of his 10-month contract on medical grounds.
Inocencio is entitled to receive sickness allowance from his repatriation for medical treatment, which
is equivalent to his basic wage for a period not exceeding 120 days or four months. The fact that Inocencio's
sickness was later medically declared as not work-related does not prejudice his right to receive sickness
allowance, considering that he got ill while on board the ship and was repatriated for medical treatment
before the end of his 10-month employment contract. He is entitled to sickness allowance pending
assessment and declaration by the company-designated physician on the work-relatedness of his ailment.
When the assessment of the company physician is that the ailment is not work-related but such assessment is
duly contested by the second opinion from a physician of the seafarer's choice, then pending the final
determination by a third opinion pursuant to the mechanism provided under the third paragraph of Sec.
20(B) (3), the seafarer is still entitled to sickness allowance but not to exceed 120 days.
2. No. Tonsil cancer or tonsillar carcinoma is not work-related. The NLRC and the CA correctly
ruled on this issue. It is not included in the list of occupational diseases. Inocencio carried the burden of
showing by substantial evidence that his cancer developed or was aggravated from work-related causes. As
both the NLRC and the CA found, he had nothing to support his claim other than his bare allegations.
In determining whether or not a given illness is work-related, it is understandable that a companydesignated physician would be more positive and in favor of the company than, say, the physician of the
seafarer's choice. It is on this account that a seafarer is given the option by the POEA-SEC to seek a second
opinion from his preferred physician. And the law has anticipated the possibility of divergence in the medical
findings and assessments by incorporating a mechanism for its resolution wherein a third doctor selected by
both parties decides the dispute with finality, as provided by Sec. 20(B) (3) of the POEA-SEC.
Inocencio, however, failed to seek a second opinion from a physician of his choice. The companydesignated doctor's certification must prevail. In the absence of any duly medically proven work-relatedness,
Inocencio cannot be accorded permanent total disability benefits.

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