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Labor Law 1 A2010 -1- Disini

PEÑARANDA V BAGANGA PLYWOOD CORP. recommendations as to the hiring and firing and as to
the promotion or any other change of status of other
PANGANIBAN; May 3, 2006
employees are given particular weight.”
- The Court disagreed with the NLRC’s finding that petitioner was
a managerial employee. However, petitioner was a member of
Petition for review assailing the resolutions of the Court of
the managerial staff, which also takes him out of the coverage of
Appeals (CA)
labor standards. Like managerial employees, officers and
members of the managerial staff are not entitled to the
provisions of law on labor standards. The Implementing Rules of
- Petitioner’s Claims
the Labor Code define members of a managerial staff as those
> Petitioner Charlito Peñaranda alleges that he was employed by
with the following duties and responsibilities:
respondent [Baganga] with a monthly salary of P5,000.00 as
“(1) The primary duty consists of the performance of work
Foreman/Boiler Head/Shift Engineer
directly related to management policies of the employer;
> His services were terminated without the benefit of due
“(2) Customarily and regularly exercise discretion and
process and valid grounds.
independent judgment;
> He was not paid his overtime pay, premium pay for working
“(3) (i) Regularly and directly assist a proprietor or a
during holidays/rest days, night shift differentials and finally
managerial employee whose primary duty consists of the
claims for payment of damages and attorney’s fees having been
management of the establishment in which he is employed or
forced to litigate the present complaint.
subdivision thereof; or (ii) execute under general supervision
- Respondents’ Claims
work along specialized or technical lines requiring special
> Respondent [BPC] represented by its General Manager
training, experience, or knowledge; or (iii) execute under
HUDSON CHUA, allege that complainant’s separation from
general supervision special assignments and tasks; and
service was done pursuant to Art. 283 of the Labor Code. > BPC
“(4) who do not devote more than 20 percent of their hours
was on temporary closure due to repair and general
worked in a workweek to activities which are not directly and
maintenance and it applied for clearance with the DOLE,
closely related to the performance of the work described in
Regional Office No. XI to shut down and to dismiss employees.
paragraphs (1), (2), and (3) above.”
> Peñaranda was not terminated from employment much less
- Petitioner’s duties and responsibilities conform to the definition
illegally. He opted to severe employment when he insisted
of a member of a managerial staff under the Implementing
payment of his separation benefits.
Rules. Petitioner supervised the engineering section of the
> Furthermore, being a managerial employee he is not entitled
steam plant boiler. His work involved overseeing the operation
to overtime pay and if ever he rendered services beyond the
of the machines and the performance of the workers in the
normal hours of work, there was no office order/or authorization
engineering section. This work necessarily required the use of
for him to do so.
discretion and independent judgment to ensure the proper
- The labor arbiter ruled that there was no illegal dismissal and
functioning of the steam plant boiler. As supervisor, petitioner is
that petitioner’s complaint was premature because he was still
deemed a member of the managerial staff.
employed by BPC. The temporary closure of BPC’s plant did not
- Noteworthy, even petitioner admitted that he was a supervisor.
terminate his employment.
In his Position Paper, he stated that he was the foreman
- Nevertheless, the labor arbiter found petitioner entitled to
responsible for the operation of the boiler. The term foreman
overtime pay, premium pay for working on rest days, and
implies that he was the representative of management over the
attorney’s fees in the total amount of P21,257.98.
workers and the operation of the department. Petitioner’s
- NLRC deleted the award of overtime pay and premium pay for
evidence also showed that he was the supervisor of the steam
working on rest days for the petitioner was not entitled to these
plant. His classification as supervisor is further evident from the
awards because he was a managerial employee.
manner his salary was paid. He belonged to the 10% of
- CA dismissed Peñaranda’s Petition for Certiorari and held that
respondent’s 354 employees who were paid on a monthly basis;
he failed to: 1) attach copies of the pleadings submitted before
the others were paid only on a daily basis.
the labor arbiter and NLRC; and 2) explain why the filing and
Disposition Petition was DENIED
service of the Petition was not done by personal service.
- In its later Resolution, CA denied reconsideration on the ground
that petitioner still failed to submit the pleadings filed before the BATONG BUHAY GOLDMINES V DELA SERNA
NLRC. PURISIMA, August 6, 1999
WON petitioner is entitled to overtime pay and premium pay for - Employees filed a complaint against Batong Buhay for: unpaid
working on rest days salaries from March 16, 1987 to present, unpaid and ECOLA
differentials under Wage Order Nos. 2 and 5, unpaid 13th
HELD months pay for 1985 and 1986, and upaid
NO vacation/sick/compensatory leave benefits.
- Article 82 of the Labor Code exempts managerial employees - Labor Standards and Welfare Officers & Regional Director:
from the coverage of labor standards. Labor standards provide Batong Buhay must pay Ty et al. P4,818,746.40
the working conditions of employees, including entitlement to - Regional Director directed Batong Buhay to put up a cash or
overtime pay and premium pay for working on rest days. surety bond otherwise a writ of execution will be issued.
- Under this provision, managerial employees are “those whose - The Special Sheriff seized three units of Peterbuilt trucks and
primary duty consists of the management of the establishment then sold the same by public auction. Various materials and
in which they are employed or of a department or subdivision.” motor vehicles were also seized on different dates and sold at
- The Implementing Rules of the Labor Code state that public auction.
managerial employees are those who meet the following - Batong Buhay finally posted a supersedeas bond and appealed
conditions: the Order contending that the Regional Director had no
“(1) Their primary duty consists of the management of the jurisdiction over the case.
establishment in which they are employed or of a department - Undersec dela Serna upheld the jurisdiction of the Regional
or subdivision thereof; Director and annulled all the auction sales conducted by Special
“(2) They customarily and regularly direct the work Sheriff. MR denied.
of two or more employees therein; - Motion for Intervention was filed by MFT Corporation and Salter
“(3) They have the authority to hire or fire other Holdings Pty., Ltd. For exclusion from annulment of the
employees of lower rank; or their suggestions and properties sold at the auction sale. Granted. MR denied.
Labor Law 1 A2010 -2- Disini
1. WON the Regional Director has jurisdiction over the complaint - Petitioner is a domestic corporation organized primarily for the
filed by the employees of BBGMI purpose of engaging in real estate business. On December 1,
2. WON the auction sales conducted by the said Special Sheriff 1952, it started doing business with only six (6) employees.
are valid - January 28, 1957: petitioner entered into a contract of
management with one Eufracio D. Rojas for the operation and
HELD exploitation of the forest concession. The logging operation
1. YES actually started on April 1, 1957 with four monthly-salaried
- The subject labor standards case of the petition arose from the employees. As of September 1, 1957, petitioner had 89
visitorial and enforcement powers by the Regional Director of employees and laborers in the logging operation.
DOLE. - December 26, 1957: petitioner revoked its contract of
- Labor standards refers to the minimum requirements management with Mr. Rojas.
prescribed by existing laws, rules and regulations relating to - August 1, 1958: petitioner became a member of the
wages, hours of work, cost of living allowance and other Social Security System with respect to its real estate
monetary and welfare benefits, including occupational, safety business. On September 6, 1958, petitioner remitted to
and health standards. Labor standards cases are governed by the System the sum of P203.13 representing the initial
Article 128(b) of the Labor Code. premium on the monthly salaries of the employees in its
- Even in the absence of E.O. 111 , Regional Directors already logging business.
had enforcement powers over money claims, effective under - October 9, 1958: petitioner demanded the refund of the
P.D. 850, issued on December 16, 1975, which transferred labor said amount.
standards cases from the arbitration system to the enforcement - On November 10, 1958, petitioner filed a petition with the
system. Social Security Commission praying for the determination of the
- E.O. No. 111 was issued on December 24, 1986 or three(3) effectivity date of the compulsory coverage of petitioner's
months after the promulgation of the Secretary of Labor's logging business.
decision upholding private respondents' salary differentials and - January 14, 1960: the instant petition was denied and petitioner
ECOLAs on September 24, 1986. The amendment of the visitorial was adjudged to be subject to compulsory coverage as Sept. 1,
and enforcement powers of the Regional Director (Article 128(b)) 1957 and the Social Security System was directed to effect such
by said E.O. 111 reflects the intention enunciated in Policy coverage of petitioner's employees in its logging and real estate
Instructions Nos. 6 and 37 to empower the Regional Directors to business conformably to the provisions of Rep. Act No. 1161, as
resolve uncontested money claims in cases where an employer- amended.
employee relationship still exists. This intention must be given - Petitioner’s Claim
weight and entitled to great respect. CMS Estate, Inc. is not yet subject to compulsory coverage with
- The Court would have ruled differently had the petitioner respect to its logging business because it does not have the
shown that subject labor standards case is within the purview of minimum required number of employees (per company).
the exception clause in Article 128 (b) of the Labor Code. Said - Respondent’s Comments
provision requires the concurrence of the following elements in The logging business was a mere expansion of petitioner's
order to divest the Regional Director or his representatives of activities and for purposes of the Social Security Act, petitioner
jurisdiction, to wit: (a) that the petitioner (employer) contests the should be considered a member of the System since December
findings of the labor regulations officer and raises issues 1, 1952 when it commenced its real estate business.
thereon; (b) that in order to resolve such issues, there is a need
to examine evidentiary matters; and (c) that such matters are ISSUES
not verifiable in the normal course of inspection. 1. WON the contributions required of employers and employees
- Petitioner's refusal to allow the Labor Standards and Welfare under our Social Security Act of 1954 are obligatory because the
Officers to conduct inspection in the premises of their head said Act was allegedly enacted by Congress in the exercise of
office and the failure to file their position paper is equivalent to a the police power of the State, not of its taxing power
waiver of its right to contest the claims of the employees. 2. WON a contractee-independent contractor relationship existed
- This involves a labor standards case and it is in keeping with between petitioner and Eufracio Rojas. during the time that he
the law that "the worker need not litigate to get what legally was operating its forest concession at Baganga, Davao
belongs to him, for the whole enforcement machinery of the 3. WON Section 9 of the Social Security Act on the question of
Department of Labor exists to insure its expeditious delivery to compulsory membership and employers should be given a liberal
him free of charge. interpretation
- The present law, RA 7730, can be considered a curative statute
to reinforce the conclusion that the Regional Director has HELD
jurisdiction over the present labor standards case. 1. Ratio The said enactment implements the general welfare
2. NO mandate of the Constitution and constitutes a legitimate
- As a general rule, findings of fact and conclusion of law arrived exercise of the police power of the State.
at by quasi-judicial agencies are not to be disturbed absent any Reasoning
showing of grave abuse of discretion tainting the same. - The Social Security Law was enacted pursuant to the policy of
- There was grave abuse of discretion when the Undersec, the government "to develop, establish gradually and
without any evidentiary support, adjudged such prices as perfect a social security system which shall be suitable to
"scandalously low". He merely relied on the self-serving the needs of the people throughout the Philippines, and
assertion by the petitioner that the value of the auctioned shall provide protection against the hazards of disability,
properties was more than the price bid. sickness, old age and death" (Sec. 2, RA 1161, as amended).
- The sales are null and void since on the properties of petitioner - Membership in the SSS is not a result of bilateral,
involved was constituted a mortgage between petitioner and the concensual agreement where the rights and obligations
Development Bank of the Philippines of the parties are defined by and subject to their will, RA
1161 requires compulsory coverage of employees and
employers under the System. It is actually a legal imposition on
said employers and employees, designed to provide social
CUEVAS; September 28, 1984 security to the workingmen. The principle of non-impairment of
the obligation of contract as provided in the Bill of Rights is not a
NATURE proper defense, the enactment being a lawful exercise of the
Appeal by the CMS Estate, Inc. police power of the State.
Labor Law 1 A2010 -3- Disini
- The taxing power of the State is exercised for the purpose of Thereafter, petitioner filed a notice of strike on 11 November
raising revenues. However, under our Social Security Law, the 1998 with the National Conciliation and Mediation Board on the
emphasis is more on the promotion of the general ground of CBA negotiation deadlock. Several conciliation
welfare. The Act is not part of out Internal Revenue Code nor conferences were conducted but the parties failed to reach a
are the contributions and premiums therein dealt with and settlement. On 19 December 1998, petitioner held the strike in
provided for, collectible by the Bureau of Internal Revenue. The private respondent’s Manila and Antipolo plants.
funds contributed to the System belong to the members who will - Subsequently, both parties came to an agreement settling the
receive benefits, as a matter of right, whenever the hazards labor dispute. Thus, on 26 December 1998, both parties
provided by the law occur. executed and signed a MOA providing for salary increases and
- Together with the contributions imposed upon employees and other economic and non-economic benefits. It likewise contained
the Government, they are intended for the protection of said a provision for the regularization of contractual, casual and/or
employees against the hazards of disability, sickness, old age agency workers who have been working with private respondent
and death in line with the constitutional mandate to promote for more than one year. Said MOA was later incorporated to form
social justice to insure the well-being and economic security of part of the 1998-2001 CBA and was thereafter ratified by the
all the people. employees of the company.
- It is the intention of the law to cover as many persons as - Consequently, petitioner demanded the payment of salary and
possible so as to promote the constitutional objective of social other benefits to the newly regularized employees retroactive to
justice. It is clear that a later law prevails over a prior statute 1 December 1998, in accord with the MOA. However, the private
and moreover the legislative intent must be given effect. respondent refused to yield to said demands contending that the
2. Ratio Rojas was not an independent contractor but merely an date of effectivity of the regularization of said employees were 1
employee of the petitioner. May 1999 and 1 October 1999. Meanwhile, a certification
Reasoning election was conducted on 17 August 1999 wherein the
- Rojas was appointed as operations manager of the logging KASAMMA-CCO Independent surfaced as the winning union and
concession; he has no power to appoint or hire employees; as was then certified by the DOLE as the sole and exclusive
the term implies, he only manages the employees and it is bargaining agent of the rank-and-file employees of private
petitioner who furnishes him the necessary equipment for use in respondent’s Manila and Antipolo plants for a period of five years
the logging business; and he is not free from the control and from 1 July 1999 to 30 June 2004. On 23 August 1999, the
direction of his employer in matter connected with the KASAMMA-CCO Independent demanded the renegotiation of the
performance of his work. Rojas should be entitled to the CBA which expired on 30 June 1998. Such request was denied by
compulsory coverage of the Act. private respondent as there was already an existing CBA which
3. Ratio Because of the broad social purpose of the Social was negotiated and concluded between petitioner and private
Security Act, all doubts in construing the Act should favor respondent which was yet to expire on 30 June 2001.
coverage rather than exemption. - On 9 December 1999, despite the pendency of petitioner’s
Reasoning complaint before the NLRC, private respondent closed its Manila
- Prior to its amendment, Sec. 9 of the Act provides that before and Antipolo plants resulting in the termination of employment
an employer could be compelled to become a member of the of 646 employees. About 500 workers were given a notice of
System, he must have been in operation for at least two years termination effective 1 March 2000 on the ground of
and has at the time of admission at least six employees. It redundancy. The affected employees were considered on paid
should be pointed out that it is the employer, either leave from 9 December 1999 to 29 February 2000 and were paid
natural, or judicial person, who is subject to compulsory their corresponding salaries. On 13 December 1999, four days
coverage and not the business. after its closure of the Manila and Antipolo plants, private
- It is the intention of the law to cover as many persons as respondent served a notice of closure to the DOLE.
possible so as to promote the constitutional objective of social - Petitioner contends that respondent violated the MOA by not
justice. It is axiomatic that a later law prevails over a prior recognizing the regularization of the 61 employees as of
statute and moreover the legislative in tent must be given effect December 1, 1998 and giving them full benefits retroactive to
Disposition The records show that petitioner started its real that date. Petitioner likewise claims the closure of the plants was
estate business on December 1, 1952 while its logging in bad faith, done in order to avoid renegotiations of the CBA,
operation was actually commenced on April 1, 1957. Applying and therefore illegal.
the provision of Sec. 10 (previously Sec. 9) of the Act, petitioner
is subject to compulsory coverage as of December 1, 1952 with ISSUES
respect to the real estate business and as of April 1, 1957 with 1. WON the regularization of the 61 employees was effective
respect to its logging operation. The appeal is dismissed, with December 1, 1998
costs against the petitioner. 2. WON the closure of the plants was legal

1. YES
COLA (KASAMMA-CCO) V CA Ratio It must be noted that both parties admit the existence of
CHICO-NAZARIO; April 19, 2006 said MOA and that they have voluntarily entered into said
agreement. Furthermore, neither of the parties deny that the 61
NATURE employees have indeed been regularized by private respondent.
Petition for Review on Certiorari assailing the Decision of the The MOA, being a contract freely entered into by the parties,
Court of Appeals which affirmed the Decision of public now constitutes as the law between them, and the interpretation
respondent National Labor Relations Commission (NLRC) of its contents purely involves an evaluation of the law as
dismissing petitioner’s complaint against private respondent applied to the facts herein. It is the contention of petitioner that
the date 1 December 1998 refers to the effective date of
FACTS regularization of said employees, while private respondent
- On 30 June 1998, the CBA for the years 1995-1998 executed maintains that said date is merely the reckoning date from which
between petitioner union and private respondent company the one year employment requirement shall be computed. We
expired. Petitioner submitted its demands to the company for agree with petitioner. It is logically absurd that the company will
another round of collective bargaining negotiations. Said only begin to extend priority to these employees on a date that
negotiations came to a gridlock as the parties failed to reach a has already passed, when in fact they have already extended
mutually acceptable agreement with respect to certain economic priority to these employees by agreeing to the contents of the
and non-economic issues. MOA and signing said agreement. It is erroneous for the NLRC to
conclude that extending to them the benefits of the MOA would
Labor Law 1 A2010 -4- Disini
violate the principle of "no-work-no-pay" as they are actually was amended in the 1993-1995 CBA, by changing the phrase
rendering service to the company even before 1 December “after 3 hrs of overtime work” to “after more than 3 hrs of
1998, and continued to do so thereafter. Moreover, under Article overtime work”. In the 1996-2001 CBA, the parties had to
280 of the Labor Code, any employee who has rendered at least negotiate the deletion of the said phrase in order to revert to the
one year of service, shall be considered a regular employee with old provision. Clearly, both parties had intended that free meals
respect to the activity in which he is employed and his should be given after exactly 3 hrs of overtime work.
employment shall continue while such activity exists. Also, under - The disputed provision is clear and unambiguous, hence the
the law, a casual employee is only casual for one year, and it is literal meaning shall prevail. No amount of legal semantics can
the passage of time that gives him a regular status. Even if we convince the Court that “after more than” means the same as
were to follow private respondent’s contention that the date 1 “after”.
December 1998 provided in the MOA is merely a reckoning date 2. NO
to determine who among the non-regular employees have - The exercise of management prerogative is not unlimited. It is
rendered one year of service as of said date, all those who have subject to the limitations provided by law. In this case, there was
been with the company for one year by said date must a CBA, and compliance therewith is mandated by the express
automatically be considered regular employees by operation of policy of the law.
law. Disposition Petition denied
2. YES
Ratio The characterization of the employee’s service as no
longer necessary or sustainable, and therefore properly
terminable, is an exercise of business judgment on the part of LABOR UNIONS (ALU)
the employer. The wisdom or soundness of such characterizing QUIASON; August 24, 1993
or decision is not subject to discretionary review on the part of
the Labor Arbiter nor of the NLRC so long, of course, as violation NATURE
of law or merely arbitrary and malicious action is not shown. The This is a petition for certiorari to set aside the resolution of the
private respondent’s decision to close the plant was a result of a National Labor Relations Commission (NLRC)
study conducted which established that the most prudent course
of action for the private respondent was to stop operations in FACTS
said plants and transfer production to other more modern and - On December 28, 1982 respondent Associated Labor Unions
technologically advanced plants of private respondent. The (ALU), for and in behalf of all the rank-and-file workers and
subject closure and the resulting termination of the 639 employees of petitioner, filed a complaint (NLRC Case No. 1791-
employees was due to legitimate business considerations, as MC-XI-82) before the Ministry of Labor and Employment,
evidenced by the technical study conducted by private Regional Arbitration Branch XI, Davao City, against petitioner, for
respondent. "Payment of the Thirteenth-Month Pay Differentials." Respondent
Disposition The assailed Decisions are hereby AFFIRMED with ALU sought to recover from petitioner the thirteenth month pay
MODIFICATION. The 61 subject employees are hereby declared differential for 1982 of its rank-and-file employees, equivalent to
regular employees as of 1 December 1998 and are entitled to their sick, vacation and maternity leaves, premium for work
the benefits provided for in the Memorandum of Agreement. done on rest days and special holidays, and pay for regular
holidays which petitioner, allegedly in disregard of company
practice since 1975, excluded from the computation of the
DOLE PHILIPPINES INC V PAWIS NG MAKABAYNG thirteenth month pay for 1982.
OBRERO - In its answer, petitioner claimed that it erroneously included
CORONA; (date) 2003 items subject of the complaint in the computation of the
thirteenth month pay for the years prior to 1982, upon a
NATURE doubtful and difficult question of law. According to petitioner,
Petition for review on certiorari of the decision of the Court of this mistake was discovered only in 1981 after the promulgation
Appeals of the Supreme Court decision in the case of San Miguel
Corporation v. Inciong (103 SCRA 139).
FACTS - A decision was rendered on March 7, 1984 favoring ALU. That
- The petitioner and the respondent executed a CBA for the ordered Davao Fruits Corporation to pay the 1982 — 13th month
period starting February 1996 to February 2001. Under the pay differential to all its rank-and-file workers/employees herein
bonuses and allowances section of the said CBA, a P10 meal represented by complainant Union. Petitioner appealed the
allowance shall be given to employees who render at least 2 hrs decision of the Labor Arbiter to the NLRC, which affirmed the
of overtime work and free meals shall be given after 3 hours of said decision accordingly dismissed the appeal for lack of merit.
actual overtime work. Petitioner elevated the matter to the Supreme Court.
- Pursuant to this provision, some departments of granted free
meals after exactly 3 ours of work. However, other departments ISSUES
granted free meals only after more than 3 hours of overtime 1. WON the computation of the thirteenth month pay given by
work. employers to their employees under P.D. No. 851, payments for
- The respondent filed a complaint against Dole, saying that free sick, vacation and maternity leaves, premiums for work done on
meals should be granted after exactly 3 hrs of overtime work, rest days and special holidays, and pay for regular holidays may
not after more than 3 hrs. The parties agreed to settle the be excluded in the computation and payment thereof, regardless
dispute to voluntary arbitration. It was decided in favor of the of long-standing company practice
respondent, directing the petitioner to grant free meals after 2. WON the petitioner may invoke the principle of solution
exactly 3 hrs of overtime work. CA affirmed. indebiti

1. WON free meals should be granted after exactly 3 hrs of work 1. The "Supplementary Rules and Regulations Implementing P.D.
2. WON the petitioner has the right to determine when to grant No. 851," which put to rest all doubts in the computation of the
free meals and its conditions thirteenth month pay, was issued by the Secretary of Labor as
early as January 16, 1976, barely one month after the effectivity
HELD of P.D. No. 851 and its Implementing Rules. And yet, petitioner
1. YES computed and paid the thirteenth month pay, without excluding
- The same meal allowance provision is found in their previous the subject items therein until 1981. Petitioner continued its
CBAs, the 1985-1988 CBA and the 1990-1995 CBA. However, it practice in December 1981, after promulgation of the afore-
Labor Law 1 A2010 -5- Disini
quoted San Miguel decision on February 24, 1981, when acts of unfair labor practices or violation of A247 of the Labor
petitioner purportedly "discovered" its mistake. From 1975 to Code, as amended, specifically "bargaining in bad faith," and
1981, petitioner had freely, voluntarily and continuously prayed that it be awarded actual, moral and exemplary
included in the computation of its employees' thirteenth damages. In its position paper, the union added that it was
month pay, the payments for sick, vacation and charging private respondent with "violation of A100 of the Labor
maternity leaves, premiums for work done on rest days Code."
and special holidays, and pay for regular holidays. The - Respondent’s contention: In implementing Wage Orders Nos.
considerable length of time the questioned items had 01 and 02, it had avoided "the existence of a wage distortion"
been included by petitioner indicates a unilateral and that would arise from such implementation.
voluntary act on its part, sufficient in itself to negate any - There was no agreement to the effect that future wage
claim of mistake. increases mandated by the government should be implemented
- A company practice favorable to the employees had indeed on an across-the-board basis. Otherwise, that agreement would
been established and the payments made pursuant thereto, have been incorporated and expressly stipulated in the CBA. It
ripened into benefits enjoyed by them. And any benefit and quoted the provision of the CBA that reflects the parties'
supplement being enjoyed by the employees cannot be reduced, intention to "fully set forth" therein all their agreements that had
diminished, discontinued or eliminated by the employer, by been arrived at after negotiations that gave the parties
virtue of Section 10 of the Rules and Regulations Implementing "unlimited right and opportunity to make demands and
P.D. No. 851, and Article 100 of the labor of the Philippines, proposals with respect to any subject or matter not removed by
which prohibit the diminution or elimination by the employer of law from the area of collective bargaining."
the employees' existing benefits (Tiangco v. Leogardo, Jr., 122 - Labor Arbiter dismissed the complaint for lack of merit. On
SCRA 267, [1983]). appeal at the NLRC, same was dismissed for lack of merit. MFR
2. Petitioner cannot invoke the principle of solutio indebiti which denied. Hence, this petition.
as a civil law concept that is not applicable in Labor Law.
Besides, in solutio indebiti, the obligee is required to return to ISSUES
the obligor whatever he received from the latter (Civil Code of 1. WON private respondent committed an unfair labor practice in
the Philippines, Arts. 2154 and 2155). Petitioner in the instant its refusal to grant across-the-board wage increases in
case, does not demand the return of what it paid respondent implementing Wage Orders Nos. 01 and 02
ALU from 1975 until 1981; it merely wants to "rectify" the error it 2. WON there was a significant wage distortion of the wage
made over these years by excluding unilaterally from the structure in private respondent as a result of the manner by
thirteenth month pay in 1982 the items subject of litigation. which said wage orders were implemented.
Solutio indebiti, therefore, is not applicable to the instant case.
Disposition finding no grave abuse of discretion on the part of HELD
the NLRC, the petition is hereby DISMISSED, and the questioned 1. NO
decision of respondent NLRC is AFFIRMED Ratio The CBA is the law between the contracting parties. Thus,
only provisions embodied in the CBA should be so interpreted
and complied with. Where a proposal or a promise raised by a
contracting party does not find print in the CBA it is not a part
ROMERO; September 7, 1998 thereof and the proponent has no claim whatsoever to its
NATURE Reasoning
Petition for Certiorari - If there was indeed a promise or undertaking on the part of
TFM to obligate itself to grant an automatic across-the-board
FACTS wage increase, union SM should have requested or demanded
- Petitioner Samahang Manggagawa sa Top Form Manufacturing that such "promise or undertaking" be incorporated in the CBA.
— United Workers of the Philippines (SM) was the certified After all, petitioner has the means under the law to compel
collective bargaining representative of all regular rank and file private respondent to incorporate this specific economic
employees of private respondent Top Form Manufacturing proposal in the CBA. It could have invoked A252 of the Labor
Philippines, Inc. Code defining "duty to bargain," thus, the duty includes
- Employer Top Form Manufacturing (TFM) refused to grant "executing a contract incorporating such agreements if
across-the-board increases to its employees in implementing requested by either party."
Wage Order No. 01 (granting an increase of P17 per day in the - A252 also states that the duty to bargain "does not compel any
salary of workers) and Wage Order No. 02 (providing for a P12 party to agree to a proposal or make any concession." Thus,
daily increase in salary) of the Regional Tripartite Wages and petitioner may not validly claim that the proposal embodied in
Productivity Board of the National Capital Region (RTWPB-NCR). the Minutes of the negotiation forms part of the CBA that it
Such refusal was aggravated by the fact that prior to the finally entered into with private respondent.
issuance of said wage orders, the employer allegedly promised - SM’s contention that the Minutes of the collective bargaining
at the collective bargaining conferences to implement any negotiation meeting forms part of the entire agreement is
government-mandated wage increases on an across-the-board pointless. If indeed private respondent promised to continue with
basis. the practice of granting across-the-board salary increases
- The union (SM) requested the implementation of said wage ordered by the government, such promise could only be
orders. But they demanded that the increase be on an across- demandable in law if incorporated in the CBA.
the-board basis. Respondent TFM refused to accede to that (Obiter for our purposes Re: Past Practices) Granted that
demand. Instead, it implemented a scheme of increases private respondent TFM had granted an across-the-board
purportedly to avoid wage distortion. TFM granted the P17 increase pursuant to Republic Act No. 6727, that single instance
increase under WO#01 to workers/employees receiving salary of may not be considered an established company practice.
P125/day and below. The P12 increase under by WO#02 was 2. NO
granted to those receiving the salary of P140/day and below. For Ratio The issue of whether or not a wage distortion exists is a
employees receiving salary higher than P125 or P140.00/day, question of fact that is within the jurisdiction of the quasi-judicial
TFM granted an escalated increase ranging from P6.99 to P14.30 tribunals below. Factual findings of administrative agencies are
and from P6.00 to P10.00, respectively. accorded respect and even finality in this Court if they are
- SM filed a complaint with the NCR NLRC. supported by substantial evidence.
- Petitioner’s contention: TFM's act of "reneging on its Reasoning
undertaking/promise clearly constitutes act of unfair labor - In this case, NLRC unanimously ruled that no wage distortions
practice through bargaining in bad faith." It charged TFM with marred private respondent's implementation of the wage orders.
Labor Law 1 A2010 -6- Disini
There was a meaningful implementation of WO#01 and #02. eliminate or in any way diminish supplements, or other
SM’s contention on the issue of wage distortion and the resulting employee benefits being enjoyed at the time of promulgation of
allegation of discrimination against the TFM's employees are this Code.
anchored on its dubious position that TFM's promise to grant an - a determination must first be made on whether the benefits are
across-the-board increase in government-mandated salary in the nature of a bonus or no, and assuming they are so,
benefits reflected in the Minutes of the negotiation is an whether they are demandable and enforceable obligations.
enforceable part of the CBA. - Definition of bonus (Producers Bank of the Philippines v. NLRC)
Disposition NLRC resolutions affirmed. Petition dismissed. ‘a bonus is an amount granted and paid to an employee for his
industry and loyalty… it is an act of generosity granted by an
enlightened employer to spur the employee to greater efforts…
the granting of a bonus is a management prerogative… thus a
EMPLOYEES UNION V AMERICAN WIRE AND CABLE bonus is not a demandable and enforceable obligation except
CO., INC. when it is made part of the wage, salary or compensation of the
CHICO-NAZARIO: April 29, 2005 employee.’
- Court ruled that the benefits /entitlements subjects of the
FACTS instant case are all bonuses given by respondent out of its
- American Wire and Cable Co., is a corporation engaged in the generosity and munificence. Benefits/entitlements are all in
manufacture of wires and cables. On Feb.16, 2001, an original excess of what the law requires each employer to give its
action was filed before the NCMB of the DOLE by the two unions employees. Since they are above what is strictly due, the
(American Wire and Cable Daily Rated Employees and American granting of the same was a management prerogative, which,
Wire and Cable Monthly Rated Employees) for voluntary whenever management sees necessary, may be withdrawn.
arbitration. They alleged that respondent company, without valid - the consequential question therefore that needs to be settled is
cause, suddenly and unilaterally withdrew and denied certain if the subject benefits, which are bonuses, are demandable or
benefits which they have long enjoyed. These are: not.
a) Service Award - the Court does not believe so. For a bonus to be enforceable, it
b) 35% premium pay of an employee’s basic pay for the work has to be promised by the employer and expressly agreed upon
rendered during Holy Monday, Holy Tuesday, Holy Wednesday, by the parties or it must have a fixed amount and had been a
December 23, 26, 27, 28 and 29 long and regular practice on the part of the employer. To be
c) Christmas party considered “regular practice” the giving of the bonus should
d) Promotional increase. have been done over a long period of time and must be shown
- A promotional increase was sought by 15 of its members who to have been consistent and deliberate.
were given new job classifications. These new hob classifications - the benefits in question were never part of any express
according to the union are in the form of a promotion. Increase agreement. They were never even incorporated in the Collective
was not given. Bargaining Agreement. The Christmas party and its incidental
Petitioner’s contention benefits and the giving of cash incentive together with the
- withdrawal of the 35% premium pay for selected days during service award cannot be said to have fixed amounts. There was
Holy Week and Christmas season, the holding of a Christmas a downtrend in the amount given for service awards. There was
party, and its incidental benefits, and the giving of service also a downtrend with respect to the holding of Christmas
awards was a customary practice that can no longer be parties as the locations were changed from paid venues to free
unilaterally withdrawn by respondent without consent of the ones. -The additional 35% premium pay for work during Holy
petitioner. The benefits in question were given by respondent Week and Christmas season cannot be held to have ripened into
consistently, deliberately and unconditionally since time a company practice that the petitioners have a right to demand.
immemorial. The benefits given by the respondent cannot be This practice was only granted for two years and with the
considered as a “bonus” as they are not founded on profit. Even express reservation from respondent corporation’s owner that it
assuming that it can be treated as a bonus, the grant of the cannot continue the same in view of the company’s current
same, by reason of its ling and regular concession, may be financial condition.
regarded as part of regular compensation.
Respondent’s contention PAG-ASA STEEL WORKS, INC. V CA
-The grant of all subject benefits has not ripened into practice CALLEJO, SR; March 31, 2006
that the employees concerned can claim a demandable right
over them. The grant of these benefits was conditional based
upon the financial conditions that existed before have indeed
Petition for review on certiorari of the decision of the Court of
substantially changed thereby justifying the discontinuance of
Appeals in CA-G.R. SP No. 65171 ordering Pag-Asa Steel Works,
said grants.
Inc. to pay the members of Pag-Asa Steel Workers Union the
wage increase prescribed under Wage Order No. NCR-08.
WON respondent is guilty of violating article 100 of the Labor
Code, when the benefits/entitlements given to the members of
- On September 23, 1999, petitioner and the Union entered into
petitioner union were withdrawn
a Collective Bargaining Agreement (CBA), effective July 1, 1999
until July 1, 2004. Section 1, Article VI (Salaries and Wage) of
said CBA provides:
*preliminary issue raised by respondent was the error in the
Section 1. WAGE ADJUSTMENT - The COMPANY agrees to grant
mode of appeal by the petitioners. Respondent contends that
all the workers, who are already regular and covered by this
petitioner should have raised a petition for review on certiorari
AGREEMENT at the effectivity of this AGREEMENT, a general
under Rule 45, and not through a special civil action for certiorari
wage increase as follows:
under Rule 65 of the Rules on Civil Procedure. Thus, case should
July 1, 1999 . . . . . . . . . . . P15.00 per day per employee
be dismissed outright.
July 1, 2000 . . . . . . . . . . . P25.00 per day per employee
July 1, 2001 . . . . . . . . . . . P30.00 per day per employee
- Court ruled that the SC may brush aside the procedural barrier
- The aforesaid wage increase shall be implemented across the
and take cognizance of the petition as it raises an issue of
board. Any Wage Order to be implemented by the Regional
paramount importance.
Tripartite Wage and Productivity Board shall be in addition to the
wage increase adverted to above. However, if no wage increase
OF BENEFITS.-Nothing in this Book shall be construed to
is given by the Wage Board within six (6) months from the
Labor Law 1 A2010 -7- Disini
signing of this AGREEMENT, the Management is willing to give classified as a "company practice" or company usage that may
the following increases, to wit: be considered an enforceable obligation.
July 1, 1999 . . . . . . . . . . . P20.00 per day per employee Disposition petition is GRANTED. The Decision of the Court of
July 1, 2000 . . . . . . . . . . . P25.00 per day per employee Appeals in CA-G.R. SP No. 65171 and Resolution dated January
July 1, 2001 . . . . . . . . . . . P30.00 per day per employee 11, 2005 are REVERSED and SET ASIDE. The Decision of the
- The difference of the first year adjustment to retroact to July 1, Voluntary Arbitrator is REINSTATED.
- The across-the-board wage increase for the 4th and 5th year of
this AGREEMENT shall be subject for a re-opening or
renegotiation as provided for by Republic Act No. 6715.
- On October 14, 1999, Wage Order No. NCR-07 was issued, and
on October 26, 1999, its Implementing Rules and Regulations. It CHINA BANKING CORPORATION V BORROMEO
provided for a P25.50 per day increase in the salary of CALLEJO, SR.; October 19, 2004
employees receiving the minimum wage and increased the
minimum wage to P223.50 per day. Petitioner paid the P25.50 NATURE
per day increase to all of its rank-and-file employees. Certiorari
- On July 1, 2000, the rank-and-file employees were granted the
second year increase provided in the CBA in the amount of FACTS
P25.00 per day. - Borromeo was a Manager of CB assigned at Regional Office in
- On November 1, 2000, Wage Order No. NCR-08 took effect. Cebu City. He then had the rank of Manager Level I.
Section 1 thereof provides: Subsequently, the respondent was laterally transferred to
Section 1. Upon the effectivity of this Wage Order, private sector Cagayan de Oro City as Branch Manager of the petitioner Bank’s
workers and employees in the National Capital Region receiving branch thereat.
the prescribed daily minimum wage rate of P223.50 shall receive - He consistently received a "very good" performance rating and
an increase of TWENTY SIX PESOS and FIFTY CENTAVOS (P26.50) was promoted to the position of Assistant Vice-President, Branch
per day, thereby setting the new minimum wage rate in the Banking Group for the Mindanao area effective October 16,
National Capital Region at TWO HUNDRED FIFTY PESOS 1996.
(P250.00) per day. - Each promotion had the corresponding increase in the
- Then Union president Lucenio Brin requested petitioner to respondent’s salary as well as in the benefits he received from
implement the increase under Wage Order No. NCR-08 in favor the petitioner Bank.
of the company’s rank-and-file employees. Petitioner rejected - However, prior to his last promotion and then unknown to the
the request, claiming that since none of the employees were China Bank, Borromeo, without authority from the Executive
receiving a daily salary rate lower than P250.00 and there was Committee or Board of Directors, approved several DAUD/BP
no wage distortion, it was not obliged to grant the wage accommodations amounting to P2,441,375 in favor of Joel
increase. Maniwan, with Edmundo Ramos as surety. DAUD/BP is the
- The Union elevated the matter to the National Conciliation and acronym for checks "Drawn Against Uncollected Deposits/Bills
Mediation Board. When the parties failed to settle, they agreed Purchased." Such checks, which are not sufficiently funded by
to refer the case to voluntary arbitration. cash, are generally not honored by banks. Further, a DAUD/BP
- The Union alleged that it has been the company’s practice to accommodation is a credit accommodation granted to a few and
grant a wage increase under a government-issued wage order, select bank clients through the withdrawal of uncollected or
aside from the yearly wage increases in the CBA. uncleared check deposits from their current account. Under the
- Petitioner alleged that there is no such company practice and petitioner Bank’s standard operating procedures, DAUD/BP
that it complied with the previous wage orders (Wage Order Nos. accommodations may be granted only by a bank officer upon
NCR-01-05) because some of its employees were receiving express authority from its Executive Committee or Board of
wages below the minimum prescribed under said orders. As for Directors.
Wage Order No. NCR-07, petitioner alleged that its compliance - As a result of the DAUD/BP accommodations in favor of
was in accordance with its verbal commitment to the Union Maniwan, a total of ten out-of-town checks (7 PCIB checks and 3
during the CBA negotiations that it would implement any wage UCPB checks) of various dates amounting to P2,441,375 were
order issued in 1999. returned unpaid from September 20, 1996 to October 17, 1996.
- On June 6, 2001, the VA rendered judgment in favor of the Each of the returned checks was stamped with the notation
company and ordered the case dismissed. "Payment Stopped/Account Closed."
- The Union filed a petition for review with the CA. On September - On October 8, 1996, the Borromeo wrote a Memorandum to the
23, 2004, the CA rendered judgment in favor of the Union and petitioner Bank’s senior management requesting for the grant of
reversed that of the VA. But the findings of the CA were a P2.4 million loan to Maniwan.
grounded on the CBA and not on the issue of past practices. - The memorandum stated that the loan was "to
regularize/liquidate subject’s (referring to Maniwan) DAUD
ISSUE availments."
WON the petitioner is obliged to grant wage increase under - It was only then that the petitioner Bank came to know of the
Wage Order No. NCR-08 as a matter of practice DAUD/BP accommodations in favor of Maniwan. The petitioner
Bank further learned that these DAUD/BP accommodations
HELD exceeded the limit granted to clients, were granted without
Ratio To ripen into a company practice that is demandable as a proper prior approval and already past due.
matter of right, the giving of the increase should not be by - Acting on this information, Samuel L. Chiong, the petitioner
reason of a strict legal or contractual obligation, but by reason of Bank’s First Vice- President and Head-Visayas Mindanao Division,
an act of liberality on the part of the employer. in his Memorandum dated November 19, 1996 for the
Reasoning respondent, sought clarification from the latter on the following
- The only instance when petitioner admittedly implemented a matters:
wage order despite the fact that the employees were not - May 23, 1997 - Nancy D. Yang, the CBank’s Senior VP and
receiving salaries below the minimum wage was under Wage Head-Branch Banking Group, informed the B (through a
Order No. NCR-07. Petitioner, however, explains that it did so memorandum) that his approval of the DAUD/BP
because it was agreed upon in the CBA that should a wage accommodations in favor of Maniwan w/o authority and/or
increase be ordered within six months from its signing, petitioner approval of higher management violated the petitioner Bank’s
would give the increase to the employees in addition to the CBA- Code of Ethics. As such, B was directed to restitute the amount
mandated increases. Respondent’s isolated act could hardly be
Labor Law 1 A2010 -8- Disini
of P1,507,736.79 representing 90% of the total loss of - As a corollary, trial-type hearings are not even required as the
P1,675,263.10 incurred by the petitioner Bank. cases may be decided based on verified position papers, with
- However, in view of his resignation and considering the years supporting documents and their affidavits.
of service in the petitioner Bank, the management earmarked - The assailed CA decision’s directive requiring him to conduct
only P836,637.08 from the respondent’s total separation benefits further hearings constitutes undue interference with the Labor
or pay. Arbiter’s discretion.
- In the Letter dated May 26, 1997 addressed to B, Remedios - To require the conduct of hearings would be to negate the
Cruz, CBank’s VP of the HR Division, again informed him that the rationale and purpose of the summary nature of the proceedings
management would withhold the sum of P836,637.08 from his mandated by the Rules and to make mandatory the application
separation pay, mid-year bonus and profit sharing. of the technical rules of evidence.
- The said amount would be released upon recovery of the sums - As long as the decisions of the LA and the NLRC are devoid of
demanded from Maniwan in Civil Case No. 97174 filed against any arbitrariness in the process of their deduction from the
him by CBank with the RTC in Cagayan de Oro City. evidence proffered by the parties, all that is left is for the Court
- Consequently, the B, through counsel, made a demand on the to stamp its affirmation.
CBank for the payment of his separation pay and other benefits. - In this case, the factual findings of the Labor Arbiter and those
- The CBank maintained its position to withhold the sum of of the NLRC concur on various points.
P836,637.08. - Due process simply demands an opportunity to be heard and
- B filed with the NLRC, the complaint for payment of separation this opportunity was not denied Borromeo as he was, through
pay, mid-year bonus, profit share and damages against the the memoranda issued to him, given notice of the charge
petitioner Bank. against him. He was given the opportunity to be heard and
- The Labor Arbiter (LA)-dismissed the B’s complaint, for B had considering his admissions, it became unnecessary to hold any
committed a serious infraction when, in blatant violation of the formal investigation.
bank’s SOP and policies, he approved the DAUD/BP Substantive
accommodations in favor of Maniwan without authorization by YES to both. LA and NLRC concurred in finding that B indeed
senior management. B even had admitted this breach in the pledged his benefits and CBank’s Code of Ethics expressly
letters that he wrote to the senior officers of CBank. sanctions the imposition of restitution/forfeiture of benefits apart
- LA- made the finding that B offered to assign or convey a from or independent of the other penalties.
property that he owned to CBank, as well as proposed the Reasoning
withholding of the benefits due him to answer for the losses that - CBank’s Code of Ethics-Restitution may be imposed
the petitioner Bank incurred on account of unauthorized independently or together with any other penalty in case of loss
DAUD/BP accommodations. or damage to the property of the Bank, its employees, clients or
- LA also held that CBank’s act of withholding the benefits due other parties doing business with the Bank. The Bank may
the respondent was justified under its Code of Ethics and that B recover the amount involved by means of salary
as an officer of the CBank, was bound by the provisions of the deduction or whatever legal means that will prompt
said Code. offenders to pay the amount involved. But restitution shall
- B appealed to the NLRC. in no way mitigate the penalties attached to the violation or
- NLRC- affirmed in toto the findings and conclusions of the LA. infraction.
And ruled that the LA committed no grave abuse of discretion - Supra-Forfeiture of benefits/privileges may also be
when he decided the case on the basis of the position papers effected in cases where infractions or violations were
submitted by the parties. incurred in connection with or arising from the
- B file a MR but the NLRC denied his motion. So he filed a application/availment thereof.
petition for certiorari with the CA. - It is well recognized that company policies and
- CA -set aside the decision of the NLRC and ordered that the regulations are, unless shown to be grossly oppressive or
records of the case be remanded to the Labor Arbiter for further contrary to law, generally binding and valid on the
hearings on the factual issues involved. parties and must be complied with until finally revised or
- CBank filed a MR but the CA denied as it found no compelling amended unilaterally or preferably through negotiation
ground to warrant reconsideration. or by competent authority.
- Moreover, management has the prerogative to discipline its
ISSUES employees and to impose appropriate penalties on erring
Procedural workers pursuant to company rules and regulations. With more
WON the CA erred in remanding the case to the Labor Arbiter/ reason should these truisms apply to the respondent,
WON B’s right to due process was violated by CBank since no who, by reason of his position, was required to act
administrative investigation was conducted prior to the judiciously and to exercise his authority in harmony with
withholding of his separation benefits company policies.
Substantive - Obviously, in view of his voluntary separation from the
WON B pledged his benefits as guarantee for the losses the bank petitioner Bank, the imposition of the penalty of reprimand or
incurred resulting from the unauthorized DAUD/BP suspension would be futile. The petitioner Bank was left with no
accommodations in favor of Maniwan/ other recourse but to impose the ancillary penalty of restitution.
WON CBank could impose the penalty of restitution against B It was certainly within the petitioner Bank’s prerogative to
impose on the respondent what it considered the appropriate
HELD penalty under the circumstances pursuant to its company rules
Procedural and regulations.
YES, CA committed reversible error/ - Significantly, B is not wholly deprived of his separation
NO, No formal administrative investigation was necessary benefits. The LA stressed in his decision, "the separation
Reasoning benefits due the complainant (Borromeo) were merely
- It is settled that administrative bodies like the NLRC, including withheld." The NLRC made the same conclusion.
the Labor Arbiter, are not bound by the technical niceties of the - B was not just a rank and file employee. At the time of his
law and procedure and the rules obtaining in courts of law. resignation, he was the Asst. VP, Branch Banking Group for the
- Rules of evidence are not strictly observed in proceedings Mindanao area of CBank. His position carried authority for the
before administrative bodies like the NLRC, where decisions may exercise of independent judgment and discretion, characteristic
be reached on the basis of position papers. of sensitive posts in corporate hierarchy.41 As such, he was, as
- The holding of a formal hearing or trial is discretionary with the earlier intimated, required to act judiciously and to exercise his
Labor Arbiter and is something that the parties cannot demand authority in harmony with company policies.
as a matter of right. Obiter
Labor Law 1 A2010 -9- Disini
- CBank’s business is essentially imbued with public interest and such a stage that it cannot be cured within a period of six (6)
owes great fidelity to the public it deals with. months even with proper medical treatment. If the disease or
- It is expected to exercise the highest degree of diligence in the ailment can be cured within the period, the employer shall not
selection and supervision of their employees. terminate the employee but shall ask the employee to take a
- As a corollary, and like all other business enterprises, its leave. The employer shall reinstate such employee to his former
prerogative to discipline its employees and to impose position immediately upon the restoration of his normal health.
appropriate penalties on erring workers pursuant to company Reasoning
rules and regulations must be respected. - The records do not show the certification by a competent public
- DAYAN v BPI ~ The law, in protecting the rights of labor, health authority that is required by the above rule, that the
authorized neither oppression nor self-destruction of an disease cannot be cured within a period of 6 months. It only
employer company which itself is possessed of rights that must contained a certificate offered by CRP’s own physician, not a
be entitled to recognition and respect public health authority. The court surmised that if the required
Disposition Petition is GRANTED. CA’S DECISION AND certification was not presented, it was because the disease was
RESOLUTION REVERSED AND SET ASIDE. NLRC’S DECISION, not of such a nature that it could not be cured within a period of
affirming that of the Labor Arbiter, is REINSTATED. 6 months. If so, dismissal was an unlawful sanction.
- Also, the petitioner’s application for clearance to terminate
Pilones was filed only on August 28, 1978, 7 days after his
CEBU ROYAL PLANT V DEPUTY MINISTER OF LABOR dismissal. This did not follow the “prior clearance rule” which
CRUZ; August 12, 1987 was in force at the time.
-- We agree that there was here an attempt to circumvent the
NATURE law by separating the employee after five months' service to
Petitioner faults the Deputy Minister of Labor with grave abuse of prevent him from becoming a regular employee, and then
discretion rehiring him on probation, again without security of tenure. We
cannot permit this subterfuge if we are to be true to the spirit
FACTS and mandate of social justice. On the other hand, we have also
- Pilones was dismissed by Cebu Royal Plant (CRP) the health of the public and of the dismissed employee himself
- the alleged ground for his removal: “pulmonary tuberculosis to consider. Hence, although we must rule in favor of his
minimal” reinstatement, this must be conditioned on his fitness to resume
- Pilones complained to the Ministry of Labor. The regional his work, as certified by competent authority.
director dismissed this complaint, but the Deputy Minister Disposition petition is DISMISSED and the temporary
reversed this and required CRP to reinstate Pilones and to pay restraining order of November 18, 1981, is LIFTED. The Order of
him back wages. the public respondent dated July 14, 1981, is AFFIRMED, but with
Public respondent maintains: the modification that the backwages shall be limited to three
- that Pilones, the private respondent, was already a permanent years only and the private respondent shall be reinstated only
employee when he was dismissed, and thus entitled to security upon certification by a competent public health authority that he
of tenure is fit to return to work. Costs against the petitioner.
- that his “pulmonary tuberculosis minimal” (PTM) was not
certified as incurable within six months so as to justify his
- that the petitioner should have first obtained a clearance for CORPORATION V CA (and COMMANDO SECURITY
the termination of Pilones’ employment SERVICE AGENCY, INC.)
Petitioner maintains: GONZAGA-REYES; January 31, 2000
- Pilones was still on probation at the time of dismissal, and thus
had no security of tenure. NATURE
- dismissal was necessary for the protection of the public health Petition for Review on Certiorari of the decision of the CA which
because he was handling ingredients in the processing of soft affirmed the decision of the RTC.
drinks which were being sold to the public
- the findings of the regional director, who had direct access to FACTS
the facts, should not have been disturbed on appeal. - In June 1986 private respondent and plaintiff entered into a
- that Pilones was employed on probation on Feb. 16, 1978; that Guard Service Contract. Respondent provided security guards in
the six-month probation period ended on Aug. 17, 1978; that he defendant's banana plantation. The contract called for the
was dismissed on Aug. 21, 4 days after he ceased to be a payment to a guard of P754.28 on a daily 8-hour basis and an
probationer, only because the x-ray examination (which showed additional P565.72 for a four hour overtime while the shift-in-
his PTM) was made only on Aug. 17, and the results were not charge was to be paid P811.40 on a daily 8-hour basis and
immediately available. P808.60 for the 4-hour overtime.
- There is, however, proof that PIlones may have been hired in - Wage Orders increasing the minimum wage in 1983 were
1977, as shown by a 1977 withholding tax statement issued for complied with by the defendant. On June 16, 1984, Wage Order
him by CRP. No. 5 was promulgated directing an increase of P3.00 per day on
the minimum wage of workers in the private sector and a P5.00
ISSUE increase on the ECOLA. This was followed on November 1, 1984
WON Pilones was still a probationary employee when he was by Wage Order No. 6 which further increased said minimum
dismissed on August 21, 1978 wage by P3.00 on the ECOLA. Both Wage Orders contain the
following provision:
HELD "In the case of contract for construction projects and for
NO security, janitorial and similar services, the increase in the
Ratio When an employee is dismissed due to a disease, the minimum wage and allowances rates of the workers shall be
applicable rule is: borne by the principal or client of the construction/service
Sec. 8, Rule I, Book VI, of the Rules and Regulations contractor and the contracts shall be deemed amended
implementing the Labor Code: Disease as a ground for dismissal. accordingly, subject to the provisions of Sec. 3 (b) of this
— Where the employee suffers from a disease and his continued order" (Sec. 6 and Sec. 9, Wage Orders No. 5 and 6,
employment is prohibited by law or prejudicial to his health or to respectively).
the health of his co-employees, the employer shall not terminate - Respondent demanded that its Guard Service Contract with
his employment unless there is a certification by a competent defendant be upgraded in compliance with Wage Order Nos. 5
public health authority that the disease is of such nature or at and 6. Plaintiff refused. Their Contract expired on June 6, 1986
Labor Law 1 A2010 - 10 - Disini
without the rate adjustment called for Wage Order Nos. 5 and 6 - It will be seen from the above provisions that the principal
being implemented. By the time of the filing of respondent's (petitioner) and the contractor (respondent) are jointly and
Complaint, the rate adjustment payable by defendant amounted severally liable to the employees for their wages. This Court held
to P462,346.25. Plaintiff opposed the Complaint. in Eagle Security, Inc. vs. NLRC and Spartan Security and
- The trial court decided in favor of the respondent. Plaintiff’s Detective Agency, Inc. vs. NLRC that the joint and several
MOR was denied, hence this petition. liability of the contractor and the principal is mandated by the
Labor Code to assure compliance with the provisions therein
ISSUES including the minimum wage. The contractor is made liable by
1. WON RTC has jurisdiction over the case virtue of his status as direct employer. The principal, on the
2. WON petitioner is liable to the private respondent for the other hand, is made the indirect employer of the contractor's
wage adjustments provided under Wage Order Nos. 5 and 6 and employees to secure payment of their wages should the
for attorney's fees contractor be unable to pay them. Even in the absence of an
employer-employee relationship, the law itself establishes one
HELD between the principal and the employees of the agency for a
1. YES limited purpose i.e. in order to ensure that the employees are
- The enforcement of the written contract does not fall under the paid the wages due them. In the above-mentioned cases, the
jurisdiction of the NLRC because the money claims involved solidary liability of the principal and contractor was held to apply
therein did not arise from employer-employee relations between to the aforementioned Wage Order Nos. 5 and 6. In ruling that
the parties and is intrinsically a civil dispute. Thus, jurisdiction under the Wage Orders, existing security guard services
lies with the regular courts. The RTC has jurisdiction over the contracts are amended to allow adjustment of the consideration
subject matter of the present case. It is well settled in law and in order to cover payment of mandated increases, and that the
jurisprudence that where no employer-employee relationship principal is ultimately liable for the said increases.
exists between the parties and no issue is involved which may - It is clear that it is only when contractor pays the increases
be resolved by reference to the Labor Code, other labor statutes mandated that it can claim an adjustment from the principal to
or any collective bargaining agreement, it is the Regional Trial cover the increases payable to the security guards. The
Court that has jurisdiction. In its complaint, private respondent is conclusion that the right of the contractor (as principal debtor) to
not seeking any relief under the Labor Code but seeks payment recover from the principal as solidary co-debtor) arises only if he
of a sum of money and damages on account of petitioner's has paid the amounts for which both of them are jointly and
alleged breach of its obligation under their Guard Service severally liable is in line with Article 12172 of the Civil Code.
Contract. The action is within the realm of civil law hence - The right of reimbursement from a co-debtor is recognized in
jurisdiction over the case belongs to the regular courts. While favor of the one who paid.
the resolution of the issue involves the application of labor laws, The liability of the petitioner to reimburse the respondent only
reference to the labor code was only for the determination of the arises if and when respondent actually pays its employees the
solidary liability of the petitioner to the respondent where no increases granted by Wage Order Nos. 5 and 6. Payment, which
employer-employee relation exists. Article 217 of the Labor Code means not only the delivery of money but also the performance,
as amended vests upon the labor arbiters exclusive original in any other manner, of the obligation,is the operative fact which
jurisdiction only over the following: will entitle either of the solidary debtors to seek reimbursement
1. Unfair labor practices; for the share which corresponds to each of the debtors.
2. Termination disputes; - It is not disputed that the private respondent has not actually
3. If accompanied with a claim for reinstatement, those paid the security guards the wage increases granted under the
cases that workers may file involving wages, rates of pay, Wage Orders in question. Neither is it alleged that there is an
hours of work and other terms and conditions of extant claim for such wage adjustments from the security guards
employment; concerned, whose services have already been terminated by the
4. Claims for actual, moral exemplary and other form of contractor. Accordingly, private respondent has no cause of
damages arising from employer-employee relations; action against petitioner to recover the wage increases.
5. Cases arising from any violation of Article 264 of this Needless to stress, the increases in wages are intended for the
Code, including questions involving legality of strikes and benefit of the laborers and the contractor may not assert a claim
lockouts; and against the principal for salary wage adjustments that it has not
6. Except claims for Employees Compensation, Social actually paid. Otherwise, as correctly put by the respondent, the
Security, Medicare and maternity benefits, all other contractor would be unduly enriching itself by recovering wage
claims, arising from employer-employee relations, increases, for its own benefit.
including those of persons in domestic or household - Finally, considering that the private respondent has no cause of
service, involving an amount exceeding five thousand action against the petitioner, private respondent is not entitled
pesos (P5,000.00) regardless of whether accompanied to attorney's fees.
with a claim for reinstatement. Disposition Petition GRANTED. The decision of the CA
- In all these cases, an employer-employee relationship is an REVERSED and SET ASIDE. The complaint of private respondent
indispensable jurisdictional requisite; and there is none in this COMMANDO SECURITY SERVICE AGENCY, INC. is hereby
2. Private respondent admits that there is no employer-
employee relationship between it and the petitioner. The private
respondent is an independent/job contractor1 who assigned
security guards at the petitioner's premises for a stipulated
liable with his contractor or subcontractor to such employees to the extent of the
amount per guard per month. The Contract of Security Services work performed under the contract, in the same manner and extent that he is liable
expressly stipulated that the security guards are employees of to employees directly employed by him.
the Agency and not of the petitioner. Articles 106 and 107 of the Art. 107. Indirect employer. — The provisions of the immediately preceding Article
shall likewise apply to any person, partnership, association or corporation which,
Labor Code provides the rule governing the payment of wages of not being an employer, contracts with an independent contractor for the
employees in the event that the contractor fails to pay such performance of any work, task, job or project.
Art. 1217. Payment made by one of the solidary debtors extinguishes the
1 obligation. If two or more solidary debtors offer to pay, the creditor may choose
Art. 106. Contractor or sub contractor. — Whenever an employer enters into a which offer to accept.
contract with another person for the performance of the former's work, the He who made payment may claim from his codebtors only the share which
employees of the contractor and of the latter's subcontractor, if any, shall be paid corresponds to each, with interest for the payment already made. If the
in accordance with the provisions of this Code. payment is made before the debt is due, no interest for the intervening period
In the event that the contractor or subcontractor fails to pay the wages of his may be demanded. . . .
employees in accordance with this Code, the employer shall be jointly and severally
Labor Law 1 A2010 - 11 - Disini
CALLEJO, SR.; April 19, 2006 employee relationship of the parties extant before the execution
of said deed.
- The boundary system is a scheme by an owner/operator
Petition for review on certiorari of the decision of the CA which
engaged in transporting passengers as a common carrier to
set aside the Resolution of the NLRC which in turn affirmed the
primarily govern the compensation of the driver, that is, the
Decision of the Labor Arbiter dismissing the complaint filed by
latter’s daily earnings are remitted to the owner/operator less
respondent Bustamante.
the excess of the boundary which represents the driver’s
compensation. Under this system, the owner/operator exercises
control and supervision over the driver. It is unlike in lease of
- Petitioner Oscar Villamaria, Jr. was the owner of Villamaria
chattels where the lessor loses complete control over the chattel
Motors, a sole proprietorship engaged in assembling passenger
leased but the lessee is still ultimately responsible for the
jeepneys with a public utility franchise to operate along the
consequences of its use. The management of the business is still
Baclaran-Sucat route. By 1995, Villamaria stopped assembling
in the hands of the owner/operator, who, being the holder of the
jeepneys and retained only nine, four of which he operated by
certificate of public convenience, must see to it that the driver
employing drivers on a “boundary basis.” One of those drivers
follows the route prescribed by the franchising and regulatory
was respondent. Bustamante remitted P450 a day to Villamaria
authority, and the rules promulgated with regard to the business
as boundary and kept the residue of his daily earnings as
operations. The fact that the driver does not receive fixed
compensation for driving the vehicle. In August 1997, Villamaria
wages but only the excess of the “boundary” given to the
verbally agreed to sell the jeepney to Bustamante under the
owner/operator is not sufficient to change the relationship
“boundary-hulog scheme,” where Bustamante would remit to
between them. Indubitably, the driver performs activities which
Villarama P550 a day for a period of 4 years; Bustamante would
are usually necessary or desirable in the usual business or trade
then become the owner of the vehicle and continue to drive the
of the owner/operator.
same under Villamaria’s franchise. It was also agreed that
- Under the Kasunduan, respondent was required to remit P550
Bustamante would make a downpayment of P10,000.
daily to petitioner, an amount which represented the boundary
- On August 7, 1997, Villamaria executed a contract entitled
of petitioner as well as respondent’s partial payment (hulog) of
“Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng
the purchase price of the jeepney. Thus, the daily remittances
Boundary-Hulog” over the passenger jeepney. The parties
also had a dual purpose: that of petitioner’s boundary and
agreed that if Bustamante failed to pay the boundary-hulog for 3
respondent’s partial payment (hulog) for the vehicle. This dual
days, Villamaria Motors would hold on to the vehicle until
purpose was expressly stated in the Kasunduan. The well-
Bustamante paid his arrears, including a penalty of P50 a day; in
settled rule is that an obligation is not novated by an instrument
case Bustamante failed to remit the daily boundary-hulog for a
that expressly recognizes the old one, changes only the terms of
period of one week, the Kasunduan would cease to have legal
payment, and adds other obligations not incompatible with the
effect and Bustamante would have to return the vehicle to
old provisions or where the new contract merely supplements
Villamaria Motors.
the previous one. The two obligations of the respondent to remit
- Bustamante continued driving the jeepney under the
to petitioner the boundary-hulog can stand together.
supervision and control of Villamaria. As agreed upon, he made
- The existence of an employment relation is not dependent on
daily remittances of P550 in payment of the purchase price of
how the worker is paid but on the presence or absence of control
the vehicle. Bustamante failed to pay for the annual registration
over the means and method of the work. The amount earned in
fees of the vehicle, but Villamaria allowed him to continue
excess of the “boundary hulog” is equivalent to wages and the
driving the jeepney.
fact that the power of dismissal was not mentioned in the
- In 1999, Bustamante and other drivers who also had the same
Kasunduan did not mean that private respondent never
arrangement with Villamaria Motors failed to pay their
exercised such power, or could not exercise such power.
respective boundary-hulog. This prompted Villamaria to serve a
- Neither is such juridical relationship negated by petitioner’s
“Paalala,” reminding them that under the Kasunduan, failure to
claim that the terms and conditions in the Kasunduan relative to
pay the daily boundary-hulog for one week, would mean their
respondent’s behavior and deportment as driver was for his and
respective jeepneys would be returned to him without any
respondent’s benefit: to insure that respondent would be able to
complaints. He warned the drivers that the Kasunduan would
pay the requisite daily installment of P550, and that the vehicle
henceforth be strictly enforced and urged them to comply with
would still be in good condition despite the lapse of 4 years.
their obligation to avoid litigation. On July 24, 2000, Villamaria
What is primordial is that petitioner retained control over the
took back the jeepney driven by Bustamante and barred the
conduct of the respondent as driver of the jeepney.
latter from driving the vehicle.
- As respondent’s employer, it was the burden of petitioner to
- Bustamante filed a Complaint for Illegal Dismissal against
prove that respondent’s termination from employment was for a
Villamaria and his wife Teresita. He narrated that in July 2000,
lawful or just cause, or, at the very least, that respondent failed
he informed the Villamaria spouses that the surplus engine of
to make his daily remittances of P550 as boundary. However,
the jeepney needed to be replaced, and was assured that it
petitioner failed to do so. Well-settled is the rule that, the
would be done. However, he was later arrested and his driver’s
employer has the burden of proving that the dismissal of an
license was confiscated because apparently, the replacement
employee is for a just cause. The failure of the employer to
engine that was installed was taken from a stolen vehicle. He
discharge this burden means that the dismissal is not justified
was no longer allowed to drive the vehicle unless he paid them
and that the employee is entitled to reinstatement and back
2. YES
1. WON the existence of a boundary-hulog agreement negates
- The jurisdiction of Labor Arbiters and the NLRC under Article
the employer-employee relationship between the vendor and
217 of the Labor Code is limited to disputes arising from an
employer-employee relationship which can only be resolved by
2. As a corollary, WON the Labor Arbiter has jurisdiction over a
reference to the Labor Code, other labor statutes or their
complaint for illegal dismissal in such a case
collective bargaining agreement.
Disposition Petition is DENIED. Decision of the CA is
1. NO
Ratio Under the boundary-hulog scheme, a dual juridical
relationship is created: that of employer-employee and vendor- ANINO V NLRC
vendee. The Kasunduan did not extinguish the employer- PANGANIBAN; May 21, 1998
Labor Law 1 A2010 - 12 - Disini
Ratio To justify retrenchment, the following requisites must be
NATURE complied with: (a) the losses expected should be substantial and
Special Civil Action in the Supreme Court. Certiorari. not merely de minimis in extent; (b) the substantial losses
apprehended must be reasonably imminent; (c) the
FACTS retrenchment must be reasonably necessary and likely to
- Complainants are supervisors of Hinatuan Mining Corporation effectively prevent the expected losses; and (d) the alleged
(HMC) who planned the formation of a supervisors union. The losses, if already incurred, and the expected imminent losses
HINATUAN MINING SUPERVISORY UNION was formally organized sought to be forestalled must be proved by sufficient and
and registered with the DOLE. Complainants Anino, Navarro, convincing evidence.
Daug-daug and Filoteo were elected officers, while complainants Reasoning
Baladja and Ceredon were active members of the union. - In termination cases, the burden of proving that the dismissal
- On 3 November 1993, HIMSU formally notified the company of was for a valid or authorized cause rests upon the employer.
its legal existence through a letter addressed to HMC President - HMC merely claimed that retrenchment was undertaken to
Zamora. It informed the company of its desire for a collective prevent losses due to the continuing decline of nickel prices and
bargaining agreement and submitted its proposals under letter export volume in the mining industry. Additionally, it alleged that
dated 16 November 1993, which again was addressed to the reduction of excise taxes on mining from 5% to 1% on a
Zamora, VP-Operation Ganigan and VP-Finance Nacorda. graduated basis, as provided under RA. 7729, was a clear
However, the company ignored these proposals. recognition by the government itself of the industry's worsening
- Union filed an unfair labor practice case against HMC on 13 economic difficulties. These bare statements miserably fall short
May 1994. of the requirements to show the validity of a retrenchment
- HMC dismissed the complainants under letter dated 16 June - Even if, arguendo, the contentions of HMC are accepted at face
1994. value, they still fail to satisfy the jurisprudential requirements
- Labor Arbiter Legaspi held that the services of petitioners were that further or expected losses must be substantial and
illegally terminated, ordered their reinstatement and the grant of reasonably imminent; and the dismissal of employees,
back wages and attorney’s fees equivalent to 10% of monetary reasonably necessary and likely to be effective in preventing the
award; that there was no positive showing that petitioners were expected losses.
retrenched purposely to weaken or destroy their union; hence, 2. YES
claim of unfair labor practice was dismissed. Likewise, claim for Ratio The acceptance of termination pay does not divest a
damages was denied since no fraud or bad faith was committed laborer of the right to prosecute his employer for unfair labor
by private respondents in dismissing them. practice acts.
- NLRC reversed Legaspi’s ruling, rejected all petitioners’ claims Reasoning
and questioned complainants’ actuations considering that they - Quitclaims and/or complete releases are against public policy
only challenged 2 months after dismissal and after receiving and, therefore, null and void.
separation pay. It also took judicial notice of the economic - Employer and employee do not stand on the same footing. The
difficulties suffered by the mining industry. employer drove the employee to the wall. The latter must have
Petitioner’s Claim to get hold of money. Because, out of job, he had to face the
- Dismissal was done with malicious intent to cause them and harsh necessities of life. He thus found himself in no position to
the union damage for their exercise of the right to self- resist money proffered. His, then, is a case of adherence, not of
organization, in defiance of Labor Code Art. 248. Complainants choice.
pray that respondents be: (a) declared guilty of unfair labor 3. YES
practices; (b) ordered to reinstate complainants to their former Ratio A decision should faithfully comply with Sec. 14, Art. VIII
positions with backwages and to pay complainants jointly and of the Constitution. (No decision shall be rendered by any court
severally the amount of P150k, as moral damages and litigation [or quasi-judicial body] without expressing therein clearly and
and attorney's fees, respectively. distinctly the facts of the case and the law on which it is based.)
Respondent’s Comments Reasoning
- Retrenchment was a management prerogative implemented in - The NLRC was definitely wanting in the observance of the
order to prevent further losses. It affected rank-and-file, constitutional requirement. It merely raised a doubt on the
supervisors and managerial staffs and was done with due notice motive of the complaining employees and took "judicial notice
to take effect 30 days from receipt thereof. that in one area of Mindanao, the mining industry suffered
- Complainants had accepted separation pay equivalent to 1 economic difficulties."
month pay for every year of service plus other monetary - The factual and legal bases of public respondent's conclusions
benefits, and complainants executed a waiver and quitclaim for were bereft of substantial evidence — the quantum of proof in
value received. labor cases — its disposition is manifestly a violation of the
- Complaint was an afterthought in order to give semblance of constitutional mandate and an exercise of grave abuse of
credence to their position/opposition to conduct a certification discretion. Such decision is a nullity.
election, as manifested by complainants’ counsel declaration in Disposition Petition granted; challenged NLRC Decision set
open court that they were still filing a new complaint for unfair aside. Decision of Legaspi is reinstated except that Ganigan is
labor practice (this case) not liable for petitioners’ monetary claims. HMC ordered to pay
separation benefits.
1. WON the NLRC committed grave abuse of discretion NOTES
amounting to lack or excess of jurisdiction when it absolved - On reinstatement: If reinstatement to former position, or one
respondents from their duty to prove losses as a just ground for substantially equivalent thereto, is not feasible anymore, the
retrenchment employees are entitled to the grant of separation pay and full
2. WON the NLRC exceeded its jurisdiction in recognizing the back wages. Separation pay shall be equivalent to at least 1
waivers/quitclaims executed by petitioners as an effective bar to month salary or 1 month salary for every year of service,
this complaint whichever is higher, a fraction of 6 months being considered as
3. WON the NLRC abused its discretion when it ordered the 1 whole year. It shall be computed from the date the petitioners
dismissal of the instant complaint and totally disregarded the were employed by private respondent until this Decision
labor arbiter’s findings of facts and petitioners’ motion for becomes final and executory.
execution - On liability of Vice President: While the president of the
erring company may be held jointly and severally liable for the
HELD obligations of the latter to its dismissed employees, such
1. YES solidary liability does not extend to the vice president of the
Labor Law 1 A2010 - 13 - Disini
company. Absent any proof of the extent of the participation of > July 5, 1995- late submission of same report so W
the VP in the formulation and the implementation of suspended him for 5 days
management policies and programs, he cannot be held > Oct 16 to 20, 23-27, Nov 6-10, 13-17, (all 1995)- late
financially liable for the illegal dismissal of employees. submission of his daily call reports
> Nov 20-24, 1995- didn’t submit his daily call reports so W
suspended him for 15 days.
- Wyeth put Gustilo in charge of promoting 4 Lederle (W’s sister
MENDOZA; June 20, 2001 company) pharmaceutical products. G then submitted to W a
plan of action where G committed to make an ave of 18 daily
NATURE calls to physicians; submit promptly all periodic reports; and
Petition for review on certiorari ensure 95% territory program performance for every cycle.
- Gustilo failed to achieve his objectives so W sent him 2 notices
FACTS charging him with willful violation of company rules and
- EDI is a recruitment agency. Dominguez is its President and regulations and directed him to submit a written explanation.
Magsino was, until dismissal, its supervisor of Processing and - G explained that he was overworked and an object of reprisal
Documentation Group. by his immediate supervisor, Filemon Verzano Jr.
- The manager of the Processing and Documentation Grp sent a - Wyeth, upon the recommendation of a review panel,
memo to Magsino, saying that management received reports terminated Gustilo’s services.
that Magsino withheld collected premium payments for workers’ - G then filed with the Regional Arbiter Br. No. 6 in Bacolod City a
mandatory repatriation bond. Magsino was required to complaint against W for illegal suspension, illegal dismissal and
clarify/explain. payment for allowances, other monetary benefits, damages and
- Magsino tendered resignation, but was held in abeyance atty’s fees.
pending result of the investigation. Respondent was given - The Labor Arbiter found that G was illegally dismissed from
notice of termination. employment and ordered W and Verzano to pay G jointly and
- Magsino filed complaint for illegal dismissal, nonpayment of severally Php 991,157.90 representing backwages, separation
salaries, leave pay, 13th mo pay, profit sharing, service award, pay, car reimbursement, damages and atty’s fees.
maternity benefits. - W appealed to the NLRC in Cebu City
- Labor Arbiter told EDI to reinstate Magsino. NLRC found EDI’s - NLRC- affirmed but modified the Labor Arbiter’s decision-
claim unsupported by evidence. CA also held that EDI couldn’t ordered reinstatement of G, or in lieu of reinstatement, pay his
present evidence on appeal for the first time, that EDI failed to separation benefits.
prove that Magsino was responsible for the discrepancy to justify - W’s MR was denied so they filed with the CA a petition for
her termination. EDI insists Magsino was terminated for loss of Certiorari and TRO and a writ of preliminary injunction.
trust and confidence. - CA- reversed NLRC’s decision and dismissed G’s complaint for
illegal dismissal (as G was terminated based on A282 of the LC-
ISSUES gross and habitual neglect by the employee of his duties) but
1. WON NLRC correctly disregarded evidence on appeal awarded him separation pay considering the “mitigating factors”
2. WON considering evidence, Magsino was dismissed for cause of length of service, loyalty awards G received and Verzano’s
grudge against G.
HELD - G filed an MR but was denied.
1. NO
- No undue sympathy is to be accorded to any claim of a ISSUE
procedural misstep in labor cases. Such must be decided accdg WON GUSTILO is entitled to his separation pay
to justice and equity. Petitioners not implausibly ascribed to the
fault of counsel failure to file a position paper with Labor Arbiter. HELD
Court deems it best to admit such evidence. NO, Gustilo isn’t entitled to his SP OR to reinstatement as there
2. NO was a just cause for dismissal.
- Court finds evidence insufficient to establish that Magsino was Reasoning
dismissed for loss of trust and confidence. Petitioners simply - Phil Journalists Inc v Mosqueda- SC ruled that the findings
alleged that Magsino failed to account for P201,600 without of the CA are conclusive on the parties and not reviewable by
showing how that figure was arrived at. this Court
- CA was right to order separation pay instead of reinstatement - Family Planning Org of the Phils Inc v NLRC – SC held that
because of the strain in the relationship of the employer and “it is the employer’s prerogative to prescribe reasonable rules
employee. Backwages, from the time of dismissal to the time of and regulations necessary or proper for the conduct of its
finality of decision, must also be given. business or concern to provide certain disciplinary measures to
implement said rules and to assure that the same be complied
GUSTILO V WYETH PHILIPPINES INC. with. At the same time, it is one of the fundamental duties of the
employee to yield obedience to all reasonable rules, orders, and
SANDOVAL-GUTIERREZ; October 4, 2004 instructions of the employer, and willful or intentional
disobedience thereof, as a general rule, justifies rescission of the
FACTS contract of service and the preemptory dismissal of the
- Gustilo was employed by Wyeth Phils Inc. as a pharmaceutical employee."
territory manager. - Piedad v Lanao del Norte Electric Cooperative, Inc.- a
- He was in-charge of the various branches in Metro Bacolod City series of irregularities when put together may constitute serious
and Negros Occidental. misconduct, which under A282 of the LC, as amended, is a just
- Among his tasks were visiting hospitals, pharmacies, cause for dismissal.
drugstores and physicians; preparing and submitting his pre- - The rule embodied in the Omnibus Rules Implementing the
dated itinerary; and submitting periodic reports of his daily call Labor Code is that a person dismissed for cause as defined
visits, monthly itinerary and weekly locator and incurred therein is not entitled to separation pay.
expenses. - PLDT v NLRC and Abucay, -
- His employment records show that on various dates, Wyeth "x x x henceforth, separation pay shall be allowed as a
reprimanded and suspended him for habitually neglecting to measure of social justice only in those instances where
submit his periodic reports. the employee is validly dismissed for causes other than
> Nov. 28, 1994- W sent a notice reprimanding G for the late serious misconduct or those reflecting on his moral
submission of weekly expense report character. Where the reason for the valid dismissal is, x x x an
Labor Law 1 A2010 - 14 - Disini
offense involving moral turpitude x x x, the employer may not be - Nov 27, 1998 – Motions for Reconsideration were filed and
required to give the dismissed employee separation pay, or denied in its 2nd assailed Order
financial assistance, or whatever other name it is called, on the - PEU filed petition for certiorari with SC re: the Secretary’s
ground of social justice." orders; SC referred the case to the CA
- Telefunken Semiconductors Employees Union-FFW v - CA held:
Court of Appeals- > It is proper for the Secretary to take cognizance of the
“We are of course aware that financial assistance may be legality of the strike
allowed as a measure of social justice in exceptional > PhilCom’s acts do not constitute unfair labor practices.
circumstances and as an equitable concession. We are
likewise mindful that financial assistance is allowed only ISSUES
in those instances where the employee is validly 1. WON it is proper for the Secretary of Labor to have taken
dismissed for causes other than serious misconduct or cognizance of the issue on the legality of the strike (issue of
those reflecting on his moral character (Zenco Sales, Inc. jurisdiction)
vs. National Labor Relations Commission, 234 SCRA 689). x x x." 2. WON certain acts committed by PhilCom constitute unfair
- In the case at bar, there is NO exceptional circumstances to labor practices as enumerated in Art. 248 of the Labor Code
warrant the grant of financial assistance or separation pay to 3. WON the strike is illegal (a necessary offshoot of the issue of
petitioner. WON a writ of execution should issue upon PhilCom to permit the
G did not only violate company disciplinary rules and PEU officers who participated in the illegal strike to return to
regulations. He falsified his employment application form work)
by not stating therein that he is the nephew of Mr.
Danao, respondent Wyeth’s Nutritional Territory HELD
Manager. 1. YES
- G manifested his slack of moral principle through his Ratio Since the very reason of the Secretary’s assumption of
infractions. In simple term, he is dishonest. jurisdiction was PEU’s declaration of the strike, any issue
- Philippine Long Distance Telephone vs. NLRC and regarding the strike is not merely incidental to, but is essentially
Abucay- [T]hose who invoke social justice may do so only if involved in, the labor dispute itself.
their hands are clean and their motives blameless x x x." Here, Reasoning
petitioner failed to measure up to such requirement. - Art 263(g) of the Labor Code grants the Secretary of Labor the
Disposition Petition is DENIED authority to assume jurisdiction over a labor dispute causing or
***Wyeth did not interpose an appeal to this Court. Hence, no likely to cause a strike or lockout in an industry indispensable to
affirmative relief can be extended to it. So it has to comply with national interest. This includes and extends to all questions and
the CA’s decision to grant G his SP. controversies arising from such labor dispute.
- The power is plenary and discretionary. He is granted “great
breadth of discretion” characterized as an exercise of police
CORPORATION AND PHILCOM CORPORATION - PEU cannot prevent resolution of the legality of the strike by
CARPIO; July 17, 2006 merely refusing to submit the issue for resolution. It is also
immaterial that this issue, as PEU asserts, was not properly
NATURE submitted for resolution of the Secretary
Petition for review to annul the decision of the CA affirming 2. NO
Orders by the Secretary of Labor Ratio Unfair labor practice refers to acts that violate the
workers’ right to self-organization and to the observance of a
FACTS CBA. Without that element, the acts, no matter how unfair, are
- Jun 30, 1997 – CBA expired not unfair labor practices.
- Jul 1997 – Negotions for renewal pending Obiter The only exception is Article 248(f), which in any case is
- Oct 21, 1997 – PEU filed notice of Strike; ground: unfair labor not one of the acts specified in PEU’s charge of unfair labor
practices practice
- Company suspended CBA negotiations bec. of strike Reasoning
- Nov 4, 1997 – PEU filed 2nd notice of Strike; ground: bargaining - A review of the acts complained of as unfair labor practices of
deadlock PhilCom convinces us that they do not fall under any of the
- Nov 11, 1997 – National Conciliatory and Mediation Board prohibited acts defined and enumerated in Article 248 of the
(NCMB) proceedings resulting in agreement to maintain status Labor Code
quo - The acts assailed are all a matter of implementation or
- Nov 17, 1997 – Proceedings ongoing, some PEU officers staged interpretation of the economic provisions of the CBA between
a strike Philcom and PEU subject to the grievance procedure
- Nov 19, 1997 – Acting Labor Secretary Trajano assumed - The Court has always respected a company’s exercise of its
jurisdiction; issued Return-to-work order prerogative to devise means to improve its operations. Thus, it
- Nov 28, 1997 – Return-to-work order reiterated has held that management is free to regulate, according to its
- Oct 2, 1998 – The Secretary of Labor and Employment issued own discretion and judgment, all aspects of employment,
1st assailed Order including hiring, work assignments, supervision and transfer of
> Obiter: PEU’s manifestation to implead PhilCom granted. employees, working methods, time, place and manner of work
(Note: Phil. Global is the predecessor company of PhilCom - This is so because the law on unfair labor practices is not
resulting in a mere merger, not two separate entities; thus, intended to deprive employers of their fundamental right to
PhilCom is to be impleaded). prescribe and enforce such rules as they honestly believe to be
> PEU’s charges of unfair labor practices dismissed. These necessary to the proper, productive and profitable operation of
included: their business
= misimplementation or non-implementation of employee - Even assuming arguendo that Philcom had violated some
benefits, non-payment of overtime and other monetary claims, provisions in the CBA, there was no showing that the same was a
inadequate transportation allowance, water, and other flagrant or malicious refusal to comply with the CBA’s economic
facilities provisions. Such showing is required for the acts to be
> PEU directed to cease and desist from strike and return to considered unfair labor practice
work; PhilCom ordered to take back workers on strike under 3. YES
the same terms prior to the strike Ratio The strike and strike activities were patently illegal for
the following reasons:
Labor Law 1 A2010 - 15 - Disini
Reasoning latest reassignment was due to his tardiness and absences, as
- PhilCom, being in the communications industry, is engaged in a reflected in the summary of tardiness and absences report,
vital industry protected from strikes and lockouts by PD 823 as which showed him to have been absent or late for work from a
amended by PD 849 minimum of seven to maximum of 75 minutes for the period
- The Secretary had already assumed jurisdiction. Striking March to October 31, 1991 and to have reported late almost
employees defied the return-to-work order. every day for the period November to December 1991.
- Regardless of their motives, validity of claims, or pending - Copies of his tardiness/absences reports were furnished
motions, the striking employees should have ceased and petitioner, along with memoranda requiring him to explain but
desisted from all acts undermining the authority granted to the his explanations were either unacceptable or unsatisfactory.
Secretary under Art. 263(g) Subsequently, reports also showed that he did not change his
- A return-to-work order is immediately effective and executory habits resulting in tardiness and absences. He was even caught
despite the filing of a motion for reconsideration. It must be one time manipulating the bundy clock, thus necessitating
strictly complied with even during the pendency of any petition another memorandum to him asking him to explain his dishonest
questioning its validity actuations in accomplishing the daily attendance logbook and in
- A return-to-work order imposes a duty that must be discharged using the bundy clock. He received a suspension order without
more than it confers a right that may be waived. While the pay for fifteen days because of dishonesty in reporting his actual
workers may choose not to obey, they do so at the risk of attendance. He reported back to office after serving the
severing their relationship with their employer as it is valid suspension but was another adverse report on tardiness and
ground for dismissal. Art. 264(a) governs defiance of such order. absences was made against the petitioner, prompting WNC to
1. PEU staged the strike using unlawful means. send him another memorandum with an attached tardiness and
- PEU posted human barricades at all entrances to and absences report. Petitioner sent a letter of appeal and explained
egresses from the company premises and used his side to the new college president who gave petitioner
coercive methods to prevent company officials and another chance. The petitioner was appointed as Information
other personnel from leaving the company premises. Assistant effective immediately. However, petitioner did not
Art. 264(a) prohibits the commission of such acts during promptly assume his post, prompting the president to call his
a strike and declares any worker or union officer who attention.
knowingly participates to have lost his employment - Subsequently, WNC won a case against the official of the union
status. before the NLRC. Petitioner was ordered to prepare a media blitz
- As PEU never disputed PhilCom’s assertions of of this victory but the petitioner did not comply with the order on
unlawful strike, the former is deemed to have admitted the ground that such a press release would only worsen the
to such acts. aggravated situation and strained relations between WNC
2. PEU declared the strike (Nov 17) during the pendency of management and the union officials. When petitioner reported
preventive mediation proceedings at the NCMB (Nov 11). for work on the first day of January 1993, he was relieved from
Such is a blatant violation of Section 6, Book V, Rule XXII of his post and transferred to the College of Liberal Arts as Records
the Omnibus Rules Implementing the Labor Code, which Evaluator. Not for long, the Dean of the Liberal Arts sent a letter
explicitly obliges the parties to bargain collectively in good to the Human Resources Manager complaining about the
faith and prohibits them from impeding or disrupting the petitioner’s poor performance and habitual absenteeism as
proceedings shown in the daily absence reports.
- Article 264(a) of the Labor Code also considers it a - On January 18, 1993, petitioner was again absent from work
prohibited activity to declare a strike during the pendency of without permission or notice to his immediate superior. It turned
cases involving the same grounds for the same strike. out that he went to Bacolod City and on January 28, 1993, the
3. PEU staged the strike in utter disregard of the grievance petitioner was one of those arrested during a raid in the house of
procedure established in the CBA “Toto Ruiz,” a suspected drug pusher and was brought to the
- A strike declared on the basis of grievances which have not Bacolod Police Station along with four other suspects. The
been submitted to the grievance committee as stipulated in the petitioner and other suspects were then charged with violation of
CBA of the parties is premature and illegal. the Dangerous Drugs Act of 1972.
- PEU could have just taken up their grievances in their - Petitioner was asked to explain within 24 hours why he should
negotiations for the new CBA which was already pending not be terminated as a result of the raid and charged against
Disposition Petition is dismissed and the decision of the CA is him for violation of RA No. 6425 as amended. Petitioner was
affirmed. The issue of who participated in the illegal dismissed for failure to answer said memorandum.
strike, being questions of fact, must be resolved in Subsequently, he wrote to the president of WNC explaining his
appropriate proceedings with the Secretary of Labor side and asking for due process. The petitioner was notified
through a memorandum about the grant of his request and that
a hearing would be conducted. He was then placed under
preventive suspension and an investigation committee was
OBRERO organized to conduct the probe. A notice of hearing/investigation
CORONA; January 13, 2003 was sent to the petitioner.
[PAGE 3] - After the investigation attended by the petitioner and his
counsel, with proceedings duly recorded, the investigation
committee recommended the dismissal of petitioner. A notice of
VALIAO V CA termination was then sent to petitioner informing him of his
QUISUMBING; July 30, 2004 termination from the service for serious misconduct and gross
and habitual neglect of duty. The petitioner received the notice
NATURE but did not file a grievance concerning the notice of termination.
Petition for review on certiorari of the decision and resolution of - Petitioner filed a complaint against WNC for illegal suspension,
the Court of Appeals illegal dismissal backwages, salary differential for salary
increases and other benefits granted after his dismissal as well
FACTS as for moral and exemplary damages and attorney’s fees. After
- Petitioner Valiao was appointed by private respondent West due proceedings, the Labor Arbiter found no justifiable reason to
Negros College (WNC) as Student Affairs Office (SAO) Director, place the petitioner under preventive suspension as there was
with a starting salary of P2,800 per month. Subsequently, he was no serious or imminent threat to the life or property of his
assigned as Acting Director, Alumni Affairs Offfice. He was coworkers. However, the Labor Arbiter found the dismissal of the
transferred to staff position and designated as Records Chief at petitioner to be valid due to absenteeism and tardiness and after
the Registrar’s Office but was again re-assigned as a typist. The he was accorded the procedural due process aspect of the law
Labor Law 1 A2010 - 16 - Disini
as reflected in the records showing that petitioner was formally - Immediately upon arrival in the Philippines, petitioners went to
investigated and given the opportunity to refute the alleged JIC, narrated what happened, and demanded the return of their
findings by the management of WNC. The Labor Arbiter held that placement fees and plane fare. JIC refused. On December 28,
frequent absenteeism and tardiness of the petitioner constituted 1999, JIC offered a settlement. Mendez received P15,080; Acuña
not only willful disobedience but also gross and habitual neglect and Ramones received P13,640 and P16,200, respectively. They
of duties, which are valid grounds for termination of claim they signed a waiver, otherwise they would not be
employment. He stressed that petitioner’s frequent absences refunded.
without proper leave of absence was not only unfair to WNC and - January 2000 – petitioners invoking Republic Act No. 8042, filed
the petitioner’s co-employees but also set an undesirable a complaint for illegal dismissal and non-payment/underpayment
example to the employees under his supervision, considering of salaries or wages, overtime pay, refund of transportation fare,
that the petitioner was not a mere rank-and-file employee but payment of salaries/wages for 3 months, moral and exemplary
one who owed more than the usual fealty to the organization. damages, and refund of placement fee before the National Labor
- On appeal to the NLRC, the latter affirmed the decision of the Relations Commission (NLRC).
Labor Arbiter, sustained the latter’s findings of facts, and made - The Labor Arbiter ruled in favor of petitioners, declaring that
its own findings of the apprehension of the petitioner for Myrna Ramones, Juliet Mendez and Mercedita Acuña did not
possession of prohibited drugs. Petitioner then filed a Petition for resign voluntarily from their jobs. Thus, private respondents
Certiorari under Rule 65 before the CA but this was dismissed for were ordered to pay jointly and severally, in Philippine Peso, at
lack of merit. Petitioner duly filed a Motion for Reconsideration, the rate of exchange prevailing at the time of payment, the
which was denied by the CA. unexpired portion, salary for 4 days, and overtime pay for 4 hrs
in 4 days, refund of placement fee, and moral and exemplary
ISSUE damages, and attorneys fees (10% of the award).The award
WON petitioner was validly dismissed from employment on the which totaled NT$296,880.00 and P285,080.00
ground of serious misconduct and gross habitual neglect of - The NLRC ordered that the amounts of P15,080, P13,640 and
duties, including habitual tardiness and absenteeism P16,200 received under the quitclaim by Mendez, Acuña and
Ramones, respectively, be deducted from their respective
awards. They were awarded attorney's fees equivalent to ten
percent (10%) of their awarded labor-standards claims for
HELD unpaid wages and overtime pays. No moral and exemplary
YES damages and placement fees were awarded.
- So irresponsible an employee like petitioner does not deserve a
place in the workplace, and it is within the management’s ISSUE
prerogative of WNC to terminate his employment. Even as the WON petitioners were illegally dismissed and are entitled to
law is solicitous of the welfare of employees, it must also protect benefits plus damages
the rights of an employer to exercise what are clearly
management prerogatives. As long as the company’s exercise of HELD
those rights and prerogatives is in good faith to advance its NO
interest and not for the purpose of defeating or circumventing No Constructive Dismissal
the rights of employees under the laws or valid agreements, - The Labor Arbiter and the NLRC ruled that there was
such exercise will be upheld. constructive dismissal because of the unbearable conditions.
Disposition Assailed decision and resolution affirmed with Constructive dismissal covers the involuntary resignation
modification. resorted to when continued employment becomes impossible,
unreasonable or unlikely; when there is a demotion in rank or a
diminution in pay; or when a clear discrimination, insensibility or
disdain by an employer becomes unbearable to an employee. In
QUISUMBING; May 5, 2006 this case, the appellate court found that petitioners did not deny
that the accommodations were not as homely as expected. In
FACTS the petitioners' memorandum, they admitted that they were told
- Petitioners are Filipino overseas workers deployed by private by the principal, upon their arrival, that the dormitory was still
respondent Join International Corporation (JIC), a licensed under construction and were requested to bear with the
recruitment agency, to its principal, 3D Pre-Color Plastic, Inc., temporary inconvenience and the dormitory would soon be
(3D) in Taiwan, Republic of China, under a uniformly-worded finished. Likewise, the petitioners did not refute private
employment contract for a period of two years. Herein private respondents' assertion that they had deployed approximately
respondent Elizabeth Alañon is the president of Join International sixty other workers to their principal, and to the best of their
Corporation. knowledge, no other worker assigned to the same principal has
- September 1999 – petitioners applied for employment abroad resigned, much less, filed a case for illegal dismissal. These cited
with JIC. They each paid placement fee of P14,850. They signed circumstances do not reflect malice by private respondents nor
a uniformly-worded employment contract which stipulated that do they show the principal's intention to subject petitioners to
they were to work as machine operators with a monthly salary of unhealthy accommodations. Under these facts, there was no
NT$15,840.00, exclusive of overtime, for a period of two years. constructive dismissal.
- December 9, 1999 – they left for Taiwan. Upon arriving at the Entitled to Overtime Pay
factory owned by 3D, they were made to sign another contract - The claim of overseas workers against foreign employers could
which stated that their salary was only NT$11,840.00. - They not be subjected to same rules of evidence and procedure easily
were also told that their dormitory was still under construction. obtained by complainants whose employers are locally based.
In the meantime, they were brought to a small room where forty While normally we would require the presentation of payrolls,
women were jampacked and each person was given a pillow. daily time records and similar documents before allowing claims
Since the ladies' comfort room was out of order, they had to ask for overtime pay, in this case, that would be requiring the near-
permission to use the men's comfort room. Petitioners claim impossible. It is private respondents who could have obtained
they were made to work twelve hours a day, from 8:00 p.m. to the records of their principal to refute petitioners' claim for
8:00 a.m. overtime pay. By their failure to do so, private respondents
- December 16, 1999 – due to unbearable working conditions, waived their defense and in effect admitted the allegations of
they informed management that they were leaving. They booked the petitioners.
a flight home, at their own expense. Before they left, they were - It is a time-honored rule that in controversies between a worker
made to sign a written waiver. In addition, petitioners were not and his employer, doubts reasonably arising from the evidence,
paid any salary for work rendered on December 11-15, 1999. or in the interpretation of agreements and writing should be
Labor Law 1 A2010 - 17 - Disini
resolved in the worker's favor. The policy is to extend the all what is due to him, arising from his employment on board of
applicability of the decree to a greater number of employees the mentioned vessel; consequently he declares to have no
who can avail of the benefits under the law, which is in claim whatever against the Shipowner.”
consonance with the avowed policy of the State to give - Respondents received from Kara Seal payments not in
maximum aid and protection to labor. Accordingly, the private accordance with the Agreement. As such respondents filed
respondents are solidarily liable with the foreign principal for the Complaint against Oriental and Kara Seal for illegal dismissal.
overtime pay claims of petitioners. - The Labor Arbiter dismissed the complaint saying “The
No Moral and Exemplary Damages voluntariness of their resignation is confirmed and reflected from
- Moral and exemplary damages are recoverable only where the the Letter of Indemnity they executed. They were executed in
dismissal of an employee was attended by bad faith or fraud, or the presence and with the participation of the ITF. ITF acts as the
constituted an act oppressive to labor, or was done in a manner protector of seamen's rights against any abuse or shortcomings
contrary to morals, good customs or public policy. The person of ship owners. They will not allow such eventuality had the
claiming moral damages must prove the existence of bad faith complainants been under duress. Besides, there is really no
by clear and convincing evidence, for the law always presumes evidence of threat or intimidation to the complainant's
good faith. Petitioners allege they suffered humiliation, sleepless resignation. Accordingly, the validity of their resignation and
nights and mental anguish, thinking how they would pay the repatriation must be upheld.”
money they borrowed for their placement fees. Even so, they - The NLRC affirmed the decision of the Labor Arbiter with
failed to prove bad faith, fraud or ill motive on the part of private modification as regards the vacation pay of Cuesta. The NLRC
respondents. Moral damages cannot be awarded. Without the also denied the Motion for Recognition.
award of moral damages, there can be no award of exemplary - The CA reversed the NLRC decision saying that the Letters of
damages, nor attorney's fees. Indemnity were void. The CA also denied the MFR filed by
Private Respondents Need Not Pay the Petitioners Oriental and Kara Seal.
- Quitclaims executed by the employees are commonly frowned
upon as contrary to public policy and ineffective to bar claims for ISSUES
the full measure of the workers' legal rights, considering the 1. WON the quitclaims were valid
economic disadvantage of the employee and the inevitable 2. WON Cuesta and Gonzaga were illegally dismissed
pressure upon him by financial necessity. Nonetheless, the so-
called "economic difficulties and financial crises" allegedly HELD
confronting the employee is not an acceptable ground to annul 1. NO
the compromise agreement unless it is accompanied by a gross - Pacta privata juri publico derogare non possunct. Private
disparity between the actual claim and the amount of the agreements between parties cannot derogate from public right.
settlement. - The law is solicitous of the welfare of employees because they
- The petitioners were not in any way deceived, coerced or stand on unequal footing with their employers and are usually
intimidated into signing a quitclaim waiver in the amounts of left at the mercy of the latter. This is especially true of Filipino
P13,640, P15,080 and P16,200 respectively. Nor was there a migrant workers who, alone in a foreign country, might have no
disparity between the amount of the quitclaim and the amount adequate alternative resources even for their own personal daily
actually due the petitioners. Conformably then the petitioners needs.
are each entitled to NT$3,959.99 in Philippine Peso at the rate of - Hence, quitclaims signed by our migrant workers, such as the
exchange prevailing at the time of payment. Since the prevailing Letters of Indemnity in the instant case, are viewed with strong
exchange rates on December 1999 was NT$1 to P1.268805, the disfavor. Public policy dictates that they be presumed to have
amount of the quitclaim paid to petitioners was actually higher been executed at the behest of the employer. It is the
than the amount due them. employer's duty to prove that such quitclaims were voluntary.
The employee's acknowledgment of his termination with nary a
protest or objection is not enough to satisfy the requirement of
voluntariness on his part.
QUISUMBING; January 25, 2006 - Resignation is defined as the voluntary act of an employee who
finds himself in a situation where he believes that personal
NATURE reasons cannot be sacrificed in favor of the exigency of the
Petition for review on certiorari service, and he has no other choice but to disassociate himself
from his employment.
FACTS - It would have been illogical for respondents to resign and then
- Petitioner Oriental Ship Management Co., Inc. (Oriental, for claim that they were illegally terminated. Well-entrenched is the
brevity) is a recruitment agency duly licensed by the Philippine rule that resignation is inconsistent with the filing of a complaint
Overseas Employment Administration (POEA) to recruit seafarers for illegal dismissal.
for employment on board vessels accredited to it. Kara Seal - The Court noted that respondents Cuesta and Gonzaga, when
Shipping Co., Ltd. (Kara Seal, for brevity) is petitioner's foreign- repatriated to Manila, had each been employed for only a little
based principal, which owns and manages M/V Agios Andreas, a over two (2) months and less than one (1) month, respectively.
vessel accredited to petitioner. Prior to their repatriation, their monthly salaries were even
- Respondents Cuesta and Gonzaga were hired as Third increased from US$900 to US$1,936. Hence, it is rather strange
Engineers on board the said vessel for a one-year contract with a that they would suddenly resign after barely beginning service of
monthly salary of $900. their twelve (12)-month contract.
- On Nov. 1998, Kara Seal through its vessel’s Shipmaster signed - Based on the foregoing disquisition, The Sc is convinced that
an Agreement with the International Transport Workers respondents were forced to sign the Letters of Indemnity. Thus,
Federation (ITF for brevity) increasing the monthly salary from said Letters of Indemnity must be deemed void. The stamp and
$900 to $1,936. signature of the ITF representative thereon add nothing to
- On Jan. 1999, an ITF inspector found out that the vessel’s crew render the letters of any legal effect, but instead add to the
have not been paid properly. The Shipmaster assured him that impression of pressure exerted by ITF on the individual Filipino
the workers will be paid accordingly. seamen.
- Upon reaching Port Piombino, however, respondents were - Settled is the rule that quitclaims are ineffective in barring full
ordered repatriated to Manila and before such repatriation, they recovery of the benefits due the employee. The acceptance of
were made to sign Letters of Indemnity saying “the contract of any monetary benefit, such as repatriation expenses and
employment of the above crewmember is terminated by mutual accrued wages in this case, would not divest respondents of the
agreement up to 23rd January 1999, in the Port of Piombino right to fully claim the remainder of what is rightfully due them.
(Italy).The seamen (sic) hereby acknowledge has been received 2. YES
Labor Law 1 A2010 - 18 - Disini
- There was no justification for terminating their services and ISSUE
there was no due process as Oriental did not serve two written WON the NLRC committed grave abuse of discretion amounting
notices to respondents prior to their termination from to lack or excess of jurisdiction when it held that the motion for
employment, as required by the Labor Code. execution was time-barred, and ruled as valid the two quitclaims
- In this connection, paragraph 5; Section 10 of Republic Act No. petitioner had signed
8042 provides:
- In case of termination of overseas employment without just, HELD
valid or authorized cause as defined by law or contract, the NO
worker shall be entitled to the full reimbursement of his On prescription
placement fee with interest at twelve percent (12%) per annum, - Sec. 6, Rule 39 of the Revised Rules of Court, provides: A
plus his salaries for the unexpired portion of his employment judgment may be executed on motion within five (5) years from
contract or for three (3) months for every year of the unexpired the date of its entry or from the date it becomes final and
term, whichever is less. The SC also noted that there is no executory. After the lapse of such time, and before it is barred
evidence on record of payment of placement fee. Hence, it is by the statute of limitations, a judgment may be enforced by
unable to award reimbursement of the same. Cuesta is also action.
entitled to vacation leave pay. Lastly, for petitioner's breach of - A similar provision is found in Art. 224 of the Labor Code, as
contract and bad faith, respondents should be awarded P50,000 amended by RA 6715, viz. ART. 224. Execution of decision,
in moral damages and another P50,000 as exemplary damages. orders, awards. — (a) The Secretary of Labor and Employment or
In addition, they should also be awarded attorney's fees any Regional Director, the Commission or any Labor Arbiter or
equivalent to ten percent (10%) of the aggregate monetary Med-Arbiter, or the Voluntary Arbitrator may, motu propio, or on
awards. motion of any interested party, issue a writ of execution on a
Disposition Petition is DENIED judgment within five (5) years from the date it becomes final and
executory, requiring a sheriff or a duly deputized officer to
execute or enforce a final decision, order or award.
- Periquet insists it was the private respondent that delayed and
prevented the execution of the judgment in her favor, but that is
not the way the SC sees it.
- The original decision called for her reinstatement within ten
PERIQUET V NLRC days from receipt thereof following its affirmance by the NLRC
on August 29, 1980, but there is no evidence that she demanded
CRUZ; June 22, 1990 her reinstatement or that she complained when her demand was
rejected. What appears is that she entered into a
NATURE compromise agreement with CDCP where she waived her
Petition to review the decision of the NLRC right to reinstatement and received from the CDCP the
sum of P14,000.00 representing her back wages from the
FACTS date of her dismissal to the date of the agreement
- The petitioner, Corazon Periquet, was dismissed as toll collector On validity of quitclaims
by the Construction Development Corporation of the Philippines - After accepting the sum of P14,000.00 from the private
(CDCP), private respondent herein, for willful breach of trust and respondent and waiving her right to reinstatement in the
unauthorized possession of accountable toll tickets allegedly compromise agreement, she applied for re-employment with the
found in her purse during a surprise inspection. CDCP and was on March 16,1987, given the position of xerox
- She filed a complaint for illegal dismissal claiming that she was machine operator.
framed - On June 27, 1988; she wrote the new management of the CDCP
- Said complaint was sustained by the labor arbiter, who ordered and asked that the rights granted her by the decision dated
her reinstatement within ten days "without loss of seniority August 29, 1980, be recognized because the waiver she had
rights and other privileges and with full back wages to be signed was invalid
computed from the date of her actual dismissal up to date of her - On September 19, 1988, the Corporate Legal Counsel of the
actual reinstatement. private respondent recommended the payment to the petitioner
- On appeal, the order was affirmed by the NLRC on August 29, of the additional sum of P9,544.00, representing the balance of
1980. her back pay for three years at P654. 00 per month
- On March 11, 1989, almost nine years later, the petitioner - On November 10, 1988, the petitioner accepted this
filed a motion for the issuance of a writ of execution of the additional amount and signed another Quitclaim and
decision, which was granted by the executive labor arbiter in an Release
order dated June 26, 1989, requiring payment to the petitioner of - In her petition she is now disowning both acknowledgments
the sum of P205,207.42 "by way of implementing the balance of - Not all waivers and quitclaims are invalid as against
the judgment amount" due from the private respondent. public policy. If the agreement was voluntarily entered
- Said amount was garnished by the NLRC sheriff. into and represents a reasonable settlement, it is binding
- On September 11, 1989, however, the NLRC sustained the on the parties and may not later be disowned simply
appeal of the CDCP and set aside the order dated June 20, 1989, because of a change of mind. It is only where there is
the corresponding writ of execution of June 26, 1989, and the clear proof that the waiver was wangled from an
notice of garnishment. unsuspecting or gullible person, or the terms of
- In its decision, the public respondent held that the motion for settlement are unconscionable on its face, that the law
execution was time-barred, having been filed beyond the five- will step in to annul the questionable transaction. But
year period prescribed by both the Rules of Court and the Labor where it is shown that the person making the waiver did
Code. so voluntarily, with full understanding of what he was
- It also rejected the petitioner's claim that she had not been doing, and the consideration for the quitclaim is credible
reinstated on time and ruled as valid the two quitclaims she and reasonable, the transaction must be recognized as a
had signed waiving her right to reinstatement and valid and binding undertaking.
acknowledging settlement in full of her back wages and Disposition Petition denied
other benefits. (Facts relating to quitclaims italicized in
- The petitioner contends that this decision is tainted with grave
abuse of discretion and asks for its reversal. PANGANIBAN; April 14, 2004
Labor Law 1 A2010 - 19 - Disini
NATURE 1. WON petitioner EMCO had substantially complied with the
Petition for review on certiorari of CA decision declaring EMCO’s requisites for a valid retrenchment
attempted retrenchment of its employees as legally ineffective 2. WON respondents had voluntarily executed their respective
FACTS 3. WON the CA may, in a petition for certiorari, correct the
- EMCO is a domestic corporation engaged in the business of evaluation of evidence made by both the Labor Arbiter and the
wood processing, operating through its sawmill and plymill NLRC
sections where respondents used to be assigned as regular
workers. HELD
- On Jan 20, 1993 and Mar 2, 1993, EMCO, represented by its 1. NO
Gen Manager Lim, informed the DOLE of its intention to Ratio Retrenchment4 is one of the authorized causes for
retrench some of its workers on the ground of purported dismissal of employees, resorted to by employers to avoid or
financial difficulties. minimize business losses. It is only "a measure of last resort
- EMCO then issued a memorandum, addressed to all its when other less drastic means have been tried and found to be
foremen, section heads, supervisors and department heads, with inadequate." (Guerrero v NLRC)
the instruction of retrenching some workers based on the ff * Standards to justify retrenchment and to avoid abuse:
guidelines: a) Losses expected should be substantial
a) Old Age (58 years and above except positions that are really b) Losses must be reasonably imminent, as such imminence
skilled); can be perceived objectively and in good faith by the employer
b) Performance (Attitude, Attendance, Quality/ Quantity of Work) c) Retrenchment is reasonably necessary and likely to
- Per EMCO’s notice to the DOLE, 104 workers were proposed for effectively prevent the expected losses. Employer should have
inclusion in its retrenchment program. EMCO terminated 250 taken other measures prior or parallel to retrenchment to
workers. forestall losses
- Those terminated then received their separation pay of P4,815 d) Alleged losses if already realized, and expected losses sought
each. But deductions were made by EMCO purportedly for the to be forestalled, must be proved by sufficient and convincing
attorney’s fees payable to respondents’ lawyer, for his efforts in evidence
renegotiating an increase in the wages contained in their CBA. Reasoning
- Upon receipt of such pay, respondents were made to sign - employer bears the burden of proving the existence or
quitclaims, releasing EMCO and all its officers from all forms of imminence of substantial losses with clear and satisfactory
actions/suits, debts, sums of money, etc. evidence. The evidence submitted by EMCO does not persuade
- About 2 years later, they then lodged a complaint, through the SC:
their labor union, against EMCO for illegal dismissal, damages a) Audited financial statements for the years 1991 and 1992.
and atty’s fees. EMCO’s net income of P1.052M for 1991 decreased to P880T in
- EMCO interposed the defense of lack of cause of action; 1992. The F/S also demonstrate that EMCO’s liability then
respondents had waived whatever claims they may have against increased from P106.5M to P123M.
the corporation after signing the quitclaims in favor of EMCO. * BUT in Somerville Stainless Steel Corp v NLRC, SC held that
- LABOR ARBITER dismissed the complaint. the presentation of F/S for a particular year was inadequate to
- Appeal to the NLRC was also dismissed. It anchored its overcome the stringent requirement of the law. Also, in the
dismissal on the effect of the respondents’ waivers or analysis of F/S, one particular percentage of relationship may not
quitclaims. “There is no doubt that the respondents voluntarily be too significant in itself; that is, it may not suffice to point out
executed their quitclaims/waivers as manifested by the fact that those unfavorable characteristics of the company that would
they did not promptly question their validity within a reasonable require immediate or even drastic action."
time. It took them two (2) years to challenge and dispute the b) EMCO undertook preventive measures to prevent the
validity of the waivers by claiming belatedly that they were occurrence of imminent losses; it implemented a work scheme
either forced or misled into signing the same.” on a rotation basis.
CA Ruling * BUT it did not try other measures, such as cost reduction,
- EMCO did not comply with one-month prior notice requirement lesser investment on raw materials, adjustment of the work
under LC: routine to avoid the scheduled power failure, etc.
a) Memorandum merely provided the guidelines on the conduct c) The 146 employees not included in the list submitted to DOLE
of the intended lay-off; this did not constitute notice. voluntarily resigned.
b) It was not addressed to the workers, but to the foremen, the * BUT resignation is the voluntary act of employees who are
department supervisors and the section heads. compelled by personal reasons to dissociate themselves from
c) There was no proper notice to DOLE. EMCO terminated the their employment. It would have been illogical for respondents to
services of 250 employees but included only 104 of them in the resign and then file a Complaint for illegal dismissal.
list it filed with DOLE. 2. NO
- Before EMCO resorted to retrenchment, it failed to adduce Ratio The mere fact that the employees were not physically
evidence of its losses and prove that it had undertaken coerced or intimidated does not necessarily imply that they
measures to prevent the occurrence of such losses. freely or voluntarily consented to the terms thereof. (Phil Carpet
- EMCO had not paid the legally prescribed separation pay. Employees Assoc v Phil Carpet Manufacturing Corp)
EMCO violated the LC in deducting the amount of attorney’s
fees. 3
- Employees’ cause of action had not yet prescribed when the
case was filed, because an action for illegal dismissal constituted ART. 283. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL. –
an injury to their rights. (Art.1146 of NCC is applicable: 4 yrs The employer may also terminate the employment of any employee due to the
installation of labor saving devices, redundancy, retrenchment to prevent losses or the
prescription period) closing or cessation of operation of the establishment or undertaking unless the
closing is for the purpose of circumventing the provisions of this Title, by serving a
ISSUES written notice on the worker and the Ministry of Labor and Employment at least one
(1) month before the intended date thereof.
In case of termination due to the installation of labor saving devices or redundancy,
3 the worker affected thereby shall be entitled to a separation pay equivalent to at least
"Article 222. APPEARANCES AND FEES. – (b) No attorney’s fees, negotiation fees his one (1) month pay or at least one (1) month pay for every year of service,
or similar charges of any kind arising from any collective bargaining negotiations or whichever is higher. In case of retrenchment to prevent losses and in cases of closure
conclusion of the collective bargaining agreement shall be imposed on any individual or cessation of operations of establishment or undertaking not due to serious business
member of the contracting union: Provided, however, That attorney’s fees may be losses or financial reverses, the separation pay shall be equivalent to one (1) month
charged against union funds in an amount to be agreed upon by the parties. Any pay or at least one-half (1/2) month pay for every year of service, whichever is higher.
contract, agreement or arrangement of any sort to the contrary shall be null and void." A fraction of at least six (6) months shall be considered as one (1) whole year.
Labor Law 1 A2010 - 20 - Disini
- The corporation, and not its employees, has the burden of HELD
proving that the Quitclaims were voluntarily entered into. NO
(Salonga v NLRC) - In Commonwealth Act No. 103, and by it, our Government no
- Because the retrenchment was illegal and of no effect, the longer performs the role of a mere mediator or intervenor but
Quitclaims were therefore not voluntarily entered into by that of the supreme arbiter. The policy of laissez faire has to
respondents. Consent was similarly vitiated by mistake or fraud. some extent given way to the assumption by the government of
(Trendline Employees Assoc-Southern Phil Federation of Labor the right of intervention even in contractual relations affected
(TEA-SPFL) v NLRC) with public interests. Justice Laurel in Ang Tibay, and National
Reasoning Workers Brotherhood v Court of Industrial Relations, and
- EMCO claimed that aside from Eddie de la Cruz, the other National Labor Union, Inc. states that our Constitution was
respondents did not submit their respective supporting affidavits adopted in the midst of surging unrest and dissatisfaction
detailing how their individual consents had been obtained. resulting from economic and social distress which was
Allegedly, such documents do not constitute the clear and threatening the stability of governments the world over.
convincing evidence required under the law to overturn the Embodying the spirit of the present epoch, general provisions
validity of Quitclaims. But the SC held that the burden of proof is were inserted in the Constitution which are intended to bring
actually on the part of EMCO. about the needed social and economic equilibrium between
- As a rule, deeds of release or quitclaim cannot bar employees component elements of society through the application of what
from demanding benefits to which they are legally entitled. may be termed as the justitia communis advocated by Grotius
Acceptance of those benefits would not amount to estoppel; and Leibnits many years ago to be secured through the
however, amounts already received are to be deducted from counterbalancing of economic and social forces and
their respective monetary awards. opportunities which should be regulated, if not controlled, by the
3. YES State or placed, as it were, in custodia societatis. 'The promotion
Ratio The lower tribunals’ factual findings will not be upheld of social justice to in sure the well-being and economic security
where there is a showing that such findings were totally devoid of all the people' was thus inserted as vital principle in our
of support, or that the judgment was based on a Constitution. (Sec. 5, Art. II, Constitution.) And in order that this
misapprehension of facts. declaration of principle may not just be an empty medley of
Disposition Petition is DENIED (EMCO is ordered to REINSTATE words, the Constitution in various sections thereof has provided
employees with full backwages, inclusive of allowances and the means towards its realization, For instance, section 6 of
other benefits) Article XIII declares that the State 'shall afford protection to
labor, especially to working women and minors, and shall
regulate the relations between landowner and tenant, and
between labor and capital in industry and in agriculture.' The
IMPERIAL; June 28, 1940 same section also states that 'the State may provide for
compulsory arbitration.' In extraordinary cases mentioned in
NATURE section 16, Article VI, of the Constitution, the President of the
Petition for review by means of certiorari. Philippines may be authorized by law, for a limited period and
subject to such restrictions as the National Assembly may
FACTS prescribe, to 'promulgate rules and regulations to carry out a
The National Labor Union, representing the workers of Antamok declared national policy.' Albeit, almost at the same time the
Goldfield Mining Company, sent a letter to management Congress of the United States approved the National Labor
demanding higher pay and better working conditions. Regulations Act (49 Stat., 449) on July 5, 1935, commonly known
Management accepted some of their demands and rejected the as the Wagner Act, we were in the Philippines headway towards
others. Consequently the workers went on strike. The the adoption of our fundamental law, pursuant to congressional
Department of Labor intervened and an amicable settlement authority given in the Tydings-McDuffie Independence Act,
between the parties was entered into. Despite this, another approved March 24, 1934. In our Bill of Rights we now find the
strike was subsequently held. A stoning incident occurred which following provision 'The right to form associations or societies for
resulted in the dismissal of forty-five workers. The matter was purposes not contrary to law shall not be abridged.' (Par. 6,
heard in the Court of Industrial Relations (CIR) where witnesses section 1, art. III, Constitution.) What was an agitation in the
for both petitioners and respondents testified. The CIR ordered United States which brought about the recommendation by the
one of its special agents to proceed to the premises of the mines Commission on Industrial Relations created by an Act of
and to conduct further investigation. " The investigation Congress in 1912 for the adoption of a Labor Bill of Rights as an
disclosed that the precipitate and unwarranted dismissal of the amendment to the United States Constitution is, in our case,
forty-five men after the incident seems to have been spurred by virtually an accepted principle, which may be expanded and
an over anxious desire on the part of the company to get rid of vitalized by legislation to keep pace with the development of
these men. It was also found out that more than 400 workers of time and circumstances.
different classes among them, mockers, miners, timbermen, - By and large, these provisions in our Constitution all evince and
trammers and capataces coming from different mines in the express the need of shifting emphasis to community interest
region have been employed by Antamok as fresh laborers and with a view to affirmative enhancement of human values. In
that almost all, if not all, of these men are not members of the conformity with the constitutional objective and cognizant of the
the National Labor Union, Inc." The CIR ruled that the discharges historical fact that industrial and agricultural disputes had given
and indefinite suspensions were made by Antamok without first rise to disquietude, bloodshed and revolution in our country, the
securing the consent of the CIR in violation of a previous order National Assembly enacted Commonwealth Act No. 103, entitled
enjoining them from discharging any laborer involved in the 'An Act to afford protection of labor by creating a Court of
dispute without just cause and without previous authority of the Industrial Relations empowered to fix minimum wages for
Court. Antamok insists in its right of selecting the men that it laborers and maximum rental to be paid by tenants, and to
should employ and that in the exercise of this right it should not enforce compulsory arbitration between employers or landlords,
be restrained or interfered with by the CIR. Consequently, they and employees or tenants, respectively; and by prescribing
assail the validity of Commonwealth Act No. No. 103, which penalties for the violation of the orders' and, later,
created the CIR, on the ground that it deprives them of liberty Commonwealth Act No. 213, entitled, 'An Act to define and
and property without due process of law. regulate legitimate labor organizations.'
- Commonwealth Act No. 213 was enacted in pursuance of what
ISSUE appears to be the deliberate embodiment of a new social policy,
WON Commonwealth Act No. 103 is unconstitutional founded on the conception of a society integrated not by
independent individuals at dealing at arms’ length, but by
Labor Law 1 A2010 - 21 - Disini
interdependent members of a consolidated whole whose frowned upon by this Court as they are contrary to public
interests must be protected against mutual aggression and policy.
warfare among and between divers and diverse units which are
impelled by countervailing and opposite individual and group ISSUES
interests, and this is particularly true in the relationship between 1. WON the respondents’ company-designated doctor be
labor and capital. Social and industrial disturbances which fifty considered competent and reliable enough to declare petitioner
years ago were feudal-like and of isolated importance may now as fit to work contrary to the declarations of three (3)
well result in a serious strain upon the entire economic organism independent physicians similarly finding him otherwise
of the nation. Several attempts at meeting and solving our 2. WON the execution by petitioner of a release and quitclaim
peculiar social and economic problems have already been made. estop him from claiming disability benefits under the POEA
The system of voluntary arbitration devised by Act No. 4055 of standard employment contract
the defunct Philippine Legislature has apparently been
abandoned by the enactment of the aforementioned HELD
Commonwealth Acts Nos. 103 and 213. 1. YES
- Petitioner did not question the findings of Dr. Pidlaoan and his
recommendation. He questioned the doctor’s competency and
the correctness of his findings only when he filed the complaint
DEMACO UNITED LTD. against respondents before the Labor Arbiter, roughly 11 months
CALLEJO, SR.; June 27 2006 after petitioner was examined by the doctor. Petitioner
consulted his personal doctors only in July and August 2001, long
NATURE after he had been examined by the company-designated
Petition for Review on certiorari under Rule 45 of the ROC of the physician.
CA Decision in CA-G.R. SP No. 84883, which affirmed the - Dr. Pidlaoan examined and treated petitioner from the time he
February 19, 2004 and April 27, 2004 Resolutions of the NLRC. was repatriated up to his recovery and subsequent assessment
as fit for duty on December 13, 2000. As in the German Marine
FACTS case, the extensive medical attention extended by Dr. Pidlaoan
- On June 27, 2000 petitioner Benjamin L. Sarocam was hired by enabled the latter to acquire familiarity, if not detailed
Interorient Maritime Ent., Inc. and Demaco United Ltd., for a knowledge, of petitioner’s medical condition. No doubt such
twelve-month contract as “bosun” on board M/V Despina. specialized knowledge enabled Dr. Pidlaoan to arrive at a much
- While the vessel was navigating to China, petitioner suffered more accurate appraisal of petitioner’s condition, as compared
lumbar sprain when he accidentally fell from a ladder. On to another physician not privy to petitioner’s case from the very
Nov.15, 2000, he was examined and found to have beginning. Indeed, the assessment of the three other personal
neuromyositis with the waist and diabetes. The examining doctors of petitioner could not have been that reliable
physician prescribed medicine and recommended the signing off considering that they based their conclusions on the prior
and hospitalization of petitioner. His employers agreed to findings of Dr. Pidlaoan; moreover, they examined petitioner 7 or
repatriate him on Nov. 30, 2000. 8 months after he was assessed as fit to work and treated him
- On Dec. 5, 2000, petitioner was referred to the company- for only one day.
designated physician, Dr. Pidlaoan. Petitioner was given Alaxan - Furthermore and most importantly, petitioner did not question
tablet for his back pain and Euglocon for his elevated blood the competency of Dr. Pidlaoan and his assessment when the
sugar. He was also advised to return for follow-up evaluation. latter declared him as fit for duty or fit to work.
On Dec. 13, 2000, he returned to the clinic with no more - Additionally, petitioner, instead of questioning the assessment
complaints of back pains and his sugar examination revealed of the company-designated doctor, executed a release and
normal results. Petitioner was then declared “fit for duty” quitclaim in favor of respondents, around three months after the
effective on that day. assessment. In executing the said document, petitioner thus
- On March 20, 2001, petitioner executed a release and quitclaim impliedly admitted the correctness of the assessment of the
in favor of his employers where he acknowledged the receipt of company-designated physician, and acknowledged that he could
US$405.00 as his sickwages and freed his employers from no longer claim for disability benefits.
further liability. 2. YES
- However, on Nov. 27, 2001, petitioner filed a complaint with - While petitioner may be correct in stating that quitclaims are
the NLRC for disability benefit, illness allowance/reimbursement frowned upon for being contrary to public policy, the Court has,
of medical expenses, damages and attorney’s fees. To support likewise, recognized legitimate waivers that represent a
his claim, he presented medical certificates issued by his 3 voluntary and reasonable settlement of a worker’s claim which
personal doctors, recommending a Grade VIII disability under the should be respected as the law between the parties. Where the
POEA schedule of disability grading. person making the waiver has done so voluntarily, with a full
- On July 11, 2003, Labor Arbiter Macam dismissed the understanding thereof, and the consideration for the quitclaim is
complaint, holding that petitioner was not entitled to disability credible and reasonable, the transaction must be recognized as
benefits because he was declared “fit for duty” and had being a valid and binding undertaking.
previously executed a release and quitclaim in favor of his - In the instant case, petitioner wrote the release and quitclaim
employers and already received his sickness allowance. with his own hand. From the document itself, the element of
Petitioner’s claim for moral damages and attorney’s fees were, voluntariness in its execution is evident. Petitioner also appears
likewise, not awarded on the Labor Arbiter’s ruling that there to have fully understood the contents of the document he was
was no evidence of bad faith and malice on the part of the signing, as the important provision thereof had been relayed to
employers. him in Filipino.
- Upon petitioner’s appeal, the NLRC issued a Resolution - Not all waivers and quitclaims are invalid as against public
affirming the decision of the Labor Arbiter, with the modification policy. If the agreement was voluntarily entered into and
that petitioner was entitled to US$1,350.00 or its peso represents a reasonable settlement, it is binding on the parties
equivalent, representing his salary for three (3) months. The and may not later be disowned simply because of a change of
petitioner’s motion for reconsideration was denied by the NLRC. mind. It is only where there is clear proof that the waiver was
The Petition for Certiorari filed with the CA was dismissed. wangled from an unsuspecting or gullible person, or the terms of
Petitioner’s MFR was denied by the CA. settlement are unconscionable on its face, that the law will step
- Petitioner avers that the quitclaim he executed is invalid, as the in to annul the questionable transaction. But where it is shown
amount he received as consideration therefor was much lower that the person making the waiver did so voluntarily, with full
than what he should have received under the POEA Standard understanding of what he was doing, and the consideration for
Employment Contract. He went on to argue that quitclaims are
Labor Law 1 A2010 - 22 - Disini
the quitclaim is credible and reasonable, the transaction must be - Respondents appealed to NLRC, NLRC ruled in favor of
recognized as a valid and binding undertaking. respondents
- As a final note, let it be emphasized that the constitutional - PAL’s petition for reconsideration denied, hence this case
policy to provide full protection to labor is not meant to be a Petitioner’s claims (PAL)
sword to oppress employers. The commitment of this Court to - The CBA provision on grievance machinery was established
the cause of labor does not prevent us from sustaining the both for the union and the management (PAL), therefore, should
employer when it is in the right. NOT be narrowly interpreted; it is the employee’s duty to
Disposition Petition is DENIED for lack of merit. The Decision observe status quo (therefore, can’t preempt that the decision is
and Resolution of the CA are AFFIRMED. resolved in their favor); the management should be given
chance to present their side since before the 5 day prescriptive
period begins to run, there should first be the presentment of
grievance and its discussion
REGALADO; February 4, 1993
NATURE 1. WON NLRC acted with grave abuse of discretion amounting to
Petition for certiorari assailng the NLRC decision in favor of the lack of jurisdiction in setting aside the Arbitration Branch’s
private respondents (holding that there was illegal suspension, decision in favor of PAL
that the respondents be paid their salaries corresponding to the 2. WON Section 2, Article IV of the PAL-PALEA CBA5 should be
suspension period, and that disciplinary action from the narrowly interpreted, THEREFORE favoring the respondents (the
respondents’ service records be deleted) prescriptive period runs after the filing of the grievance)

- The private respondents are all Port Stewards in the Catering - It has not been shown that respondent NLRC has unlawfully
Sub-Department of the Passenger Services Department of PAL neglected the performance of an act which the law specifically
whose jobs were to prepare meal orders and checklists, set up enjoins it to perform as a duty or has otherwise unlawfully
standard equipment in accordance with the requirements of the excluded petitioner from the exercise of a right to which it is
type of service for each flight; to ski, bin and make an inventory entitled.
of Commissary supplies and equipment. Ratio Judicial review by this Court in labor cases does not go so
- On several occasions, deductions were made from their salaries far as to evaluate the sufficiency of the evidence upon which the
allegedly representing losses of inventoried items charged to labor officer or office based his or its determination, but is
them for mishandling of company properties. limited to issues of jurisdiction and grave abuse of discretion
- August 21, 1984: The respondents, through the union, made a 2. YES
formal notice of the deductions to PAL through the Manager for - Even if Mr. Abad was on leave when the grievance was filed
Catering, Mr. Reynaldo Abad. However, no action was taken by (and even if the union and respondents knew that Mr. Abad was
PAL. on leave), the CBA would still apply since it is hard to believe
- November 4, 1984: Pursuant to the grievance machinery Step 1 that everything under Abad's authority would have to stand still
of the CBA between PAL and the union, respondents filed a during his absence from office. To be sure, it is to be expected
formal grievance. that someone has to be left to attend to Abad's duties.
- November 21: The said grievance was submitted to the office Ratio The sympathy of the Court is on the side of the laboring
of Mr. Abad who was on leave. classes, not only because the Constitution imposes such
- December 5: Mr. Abad was still on leave, and since in the CBA, sympathy, but because of the one-sided relation between labor
Mr. Abad (PAL) was supposed to resolve the grievance within 5 and capital. The constitutional mandate for the promotion of
days, the respondents thru the shop steward wrote a letter labor is as explicit as it is demanding. The purpose is to place
addressed to Mr. Abad’s office expressing their belief that the the workingman on an equal plane with management — with all
grievance was deemed resolved in their favor its power and influence — in negotiating for the advancement of
- December 7: Mr. Abad (finally) returned and scheduled a his interests and the defense of his rights. Under the policy of
meeting on December 12 social justice, the law bends over backward to accommodate the
- the respondents refused to conduct their inventory works interests of the working class on the humane justification that
thereafter those with less privileges in life should have more privileges in
- December 12: Mr. Abad and the union had the meeting where law. (in short, interpretation should be made in favor of the
the former denied the petition of the respondents, adopting the laborers)
position that it was the inventory of goods was the respondents’ Reasoning
duty and that the deductions in their salaries were due to the - The grievance of employees is not a matter which requires the
losses in the mishandling of goods personal act of Mr. Abad and thus could not be delegated.
- Due to the respondents refusal to conduct inventory works in Petitioner could at least have assigned an officer-in-charge to
early December, Mr. Abad issued an inter-office memo asking look into the grievance and possibly make his recommendation
them to explain why no disciplinary action should be taken to Mr. Abad. It is of no moment that Mr. Abad immediately
against them. The respondents argued that since their grievance looked into the grievance upon returning to work, for it must be
in accordance with the grievance machinery step 1 of their CBA remembered that the grievants are workingmen who suffered
was not resolved within the 5-day period, they believed that the salary deductions and who rely so much on their meager income
grievance was resolved in their favor. Mr. Abad found this for their daily subsistence and survival.
reasoning unsatisfactory, THUS suspending the said
respondents. 5
Sec. 2 — Processing of Grievances
- the union filed another grievance asking for the lifting of the
xxx xxx xxx
suspension, but PAL denied the said lifting, only reducing the STEP 1 — Any employee who believes that he has a justifiable grievance shall take the
suspension period for respondent Ramos. matter up with his shop steward. If the shop steward feels there is justification for
- the union demanded for the reimbursement of the salaries of taking the matter up with the Company, he shall record the grievance on the
grievance form heretofore agreed upon by the parties. Two (2) copies of the grievance
individual respondents during the suspension but PAL denied form properly filled, accepted, and signed shall then be presented to and discussed by
their demand. the shop steward with the division head. The division head shall answer the grievance
- the respondents filed a complaint for ILLEGAL SUSPENSION within five (5) days from the date of presentation by inserting his decision on the
grievance form, signing and dating same, and returning one copy to the shop steward.
before the Arbitration Branch of the NLRC. Complaint dismissed, If the division head fails to act within the five (5)-day regl(e)mentary period, the
rule in favor of PAL grievance must be resolved in favor of the aggrieved party. If the division head's
decision is not appealed to Step II, the grievance shall be considered settled on the
basis of the decision made, and shall not be eligible for further appeal.
Labor Law 1 A2010 - 23 - Disini
- when the respondents first presented their complaint on August in administering the law give rise to the adoption, within
21, the petitioner (through Mr. Abad) failed to act on it certain limits, the delegation of greater powers by the
- if the provision would be interpreted as to allow the legislative and vesting a larger amount of discretion in
management to act on their laborer’s complaints after the acting administrative and executive officials, not only in the
officer returned from a “leave” then the causes of the execution of the laws, but also in the promulgation of certain
workingmen would be delayed, thus suffering a great injustice. rules and regulations.
That could not have been the intendment of the pertinent 2. NO
provision of the CBA, much less the benevolent policy underlying - The state may enact laws that may interfere with personal
our labor laws. liberty, with property, and with business and occupation if the
Disposition petition is hereby DENIED and the assailed decision said laws are intended to promote the welfare of the public.
of respondent National Labor Relations Commission is AFFIRMED. (police power of the State)
This judgment is immediately executory. Reasoning
- precedents (US vs. Gomez, Dobbins vs. Los Angeles & People
- Paradox - The apparent curtailment of liberty is precisely the
LAUREL; December 2, 1940
very means of insuring its preservation
- No. Social justice is promoted if the greatest good is brought
about to the greatest number.
- The Secretary of Public Works and Communications (PWC)
approved with modification the recommendation that originated
from the National Traffic Commission (NTC), which was favorably PLDT V NLRC
indorsed by the Director of Public Works (PW), that Rosario ROMERO; July 23, 1997
Street and Rizal Avenue be closed to traffic of animal-drawn
vehicles, between the points and during the hours from 7 a.m. to NATURE
11 p.m., for a period of one year from the date of the opening of Petition for certiorari to revoke NLRC’s Nov. 16, 1992 decision
the Colgante Bridge to traffic; that the Mayor of Manila and the affirming the resolution of Labor Arbiter Jose De Vera and
Acting Chief of Police of Manila have enforced and caused to be denying petitioner’s motion for reconsideration
enforced the rules and regulations thus adopted; that as a
consequence of such enforcement, all animal drawn vehicles are FACTS
not allowed to pass and pick up passengers in the places above- - Private respondent Lettie Corpuz was employed as traffic
mentioned to the detriment not only of their owners but of the operator at the Manila International Traffic Division (MITD) by
riding public as well. PLDT for 10 years 9 months from Sept. 19, 1978 until her
- Commonwealth Act No. 548 gives the Director of Public Works, dismissal on June 17, 1989. She was tasked with facilitating
with the approval of the Secretary of the Public Works and requests for incoming and outgoing international calls using a
Communications the authority to promulgate rules and digital switchboard.
regulations to regulate and control the use of and traffic on - Sometime in Dec. 1987, PLDT’s rank-and-file employees went
national roads. on strike, prompting MITD to discharge the former’s duties to
- Maximo Calang, in his capacity as private citizen and as a prevent a shutdown of its operations. In the course of their
taxpayer of Manila, filed a petition for a writ of prohibition assignments, 2 supervisors received 2 overseas calls bound for
against the Chairman of NTC, Director of PW, Acting Secretary of the Middle East, both callers reporting the same calling number
PWC, Mayor of Manila and Acting Chielf of Police of Manila. (98-68-16). It was shown that the number had been permanently
disconnected on Sept. 1987 but 439 overseas calls had been
ISSUES made through it from May to Nov. 1987.
1. WON Commonwealth Act No. 548 is unconstitutional because - It was further found that among the 235 telephone operators
it constitutes an undue delegation of legislative power who handled those calls (averaging 1.8% calls each), private
2. WON the rules and regulations promulgated constitute an respondent had handled 12.8% of the total calls. Some calls,
unlawful interference with legitimate business or trade and though registered as partly unavailable or busy, yielded
abridge the right to personal liberty and freedom of locomotion unusually long operator call durations. Private respondent also
3. WON the rules and regulations complained of infringe the used said number to make several personal calls. Based on
upon the constitutional precept regarding the promotion of social these finding, MITD Manager Erlinda Kabigting directed
justice to insure the well-being of all the people respondent to explain these allegations.
- instead of complying, respondent requested a formal
HELD investigation to confront and rebut the witnesses’ allegations.
1. NO On grounds of misconduct and breach of trust, respondent was
- The Legislature cannot delegate power to make law; but it can terminated.
make a law to delegate a power to determine some fact or state - In a complaint for illegal dismissal filed by respondent, Labor
of things upon which the law makes, or intends to make, its own Arbiter Jose De Vera rendered a decision ordering the
action depend. reinstatement of private respondent, later affirmed by NLRC.
- adherence to precedent ISSUE
Rubi vs. Provincial Board of Mindoro, Wayman vs. Southard – it WON the NLRC erred in ordering the reinstatement of private
was held here that discretion may be delegated to executive respondent
departments or subordinate officials the execution of certain
acts, final on questions of fact. HELD
- textual interpretation of Commonwealth Act No. 548 NO. Although the power to dismiss is a normal prerogative of the
The provision that “….the Director of Public Works, with the employer, the right to discharge employees is regulated by the
approval of the Secretary of the Public Works and State’s police power in line with its duty to preserve its citizen’s
Communications, shall promulgate rules and regulations to rights.
regulate and control the use of and traffic on national - Petitioner insists that respondent was guilty of defrauding them
roads…”, is an administrative function which cannot be by taking several calls through the disconnected number.
directly discharged by the National Assembly. However, records show that these calls were neither unusual nor
- practicality made in connivance with certain subscribers as other operators
The complexities of modern governments, the multiplication of shared similar experiences. Although it is quite certain that there
the subjects of govt’l regulations, and the increased difficulty were certain PLDT personnel who tampered with the line, the
Labor Law 1 A2010 - 24 - Disini
ultimate blame cannot be set solely on private respondent based and the quitclaim were signed by him under duress. On
on mere suspicion, but only with concrete and substantial 14 February 1994, he filed a case for Illegal Dismissal and Illegal
evidence. Suspension, with a prayer for an award of retirement benefits,
- In the instant case, the petitioner failed to establish valid bases before the Labor Arbiter.
of the alleged misconduct, thus denying private respondent her - In his decision of 30 June 1995, the Labor Arbiter upheld the
right to due process. The requirement of notice and hearing validity of the dismissal of petitioner based on loss of trust
affords the worker ample opportunity to be heard and defend and confidence and denied his claim for retirement benefits and
himself. damages.
- Art. 4 of the Labor Code states that “all doubts in the - On appeal, the NLRC reversed the decision of the labor
implementation and interpretation of the provisions of the Labor arbiter and declared the dismissal to be illegal on the ground
Code including its implementing rules and regulations shall be that petitioner was denied due process ratiocinating that a
resolved in favor of labor”, that is, the worker’s welfare is of hearing should have been afforded petitioner for a chance to
paramount importance. The Constitution furthers that the State confront the witnesses against him.
shall afford full protection to labor, promote full employment - BPI filed with SC, a petition for certiorari questioning the NLRC
opportunities for all and guarantee the right to security of decision. The Court referred the petition to CA. The appellate
tenure. court reversed the judgment of the NLRC.
Disposition instant petition is DISMISSED and the decision - In its petition for review before the SC, petitioner argues that
dated Nov. 16, 1992 is AFFIRMED. the CA has wrongly relied on unsworn statements taken by the
AGABON V NLRC bank from its contractual employees. Petitioner believes that
the factual conclusions of the NLRC which has acquired
expertise on the matters entrusted to it should have instead
DAYAN V BPI been respected by the appellate court.
VITUG; November 20, 2001
NATURE 1. WON CA committed an error in granting Dayan’s dismissal
Review seeking reversal of the decision and resolution of CA 2. WON there sufficient compliance of notice and hearing
reversing the resolution of the NLRC. 3. WON he should be reinstated in BPI
4. WON the letter and quitclaim were obtained through
FACTS deception and coercion
- Petitioner Rogelio C. Dayan (Dayan) started his employment on
30 June 1956 with the Commercial Bank and Trust Company
(CBTC). CBTC was eventually absorbed by the Bank of the
Philippine Islands. (BPI) where Dayan was maintained as
employee. In 1981, Dayan was promoted Administrative
Assistant by respondent bank in its centralized accounting office.
He held several positions thereafter - Assistant Manager of
Internal Operations in 1983, Assistant Manager of Correspondent
Bank in 1988, Assistant Manager of Branch Operations in 1990,
Assistant Manager of the Supplies Inventory in 1991, and then HELD
Senior Assistant Manager of the Supplies Inventory in 1991- 1. NO
1992. In addition to the series of promotions, Dayan was the Ratio The CA was convinced that Dayan’s guilty of malfeasance
recipient of various commendations. and that the petitioner's dismissal had been justified under
- December 1991, the post of Purchasing Officer became vacant. Article 282 of the Labor Code.6
The vacated position was offered to Dayan which he initially Reasoning
declined but, due to the insistence of his superiors, he later - CA did not commit error in holding to be justifiable the
accepted on a temporary basis in February 1993. dismissal of Dayan from BPI as evidence of malpactice is too
- 10 June 1993, Asst VP Gerlanda E. De Castro of the bank, in a numerous to be ignored. Contrary to Dayan’s claim, the
memorandum, placed petitioner under suspension. suppliers who complained executed affidavits as part of
- Dayan is placed under suspension due to matters presented to the records of the case. An employee under his supervision even
him in a meeting on the same morning of the suspension memo. narrated other incidents of malpractices. These charges were
- It appears that BPI conducted earlier interviews regarding even backed up by the audit report of the bank’s audit team.
supposed malpractices committed by Dayan during his term as - Dayan is not a rank and file employee. His job involves much
Purchasing Officer. The report signed ad noted by Rololfo exercise of independent judgment and discretion. A bank, being
Bernejo (Mgr) and Victor Guillermo (Sr Mgr) contained alleged essentially imbued with public interest, cannot be compelled to
misconduct such as asking for 5% commission on purchase continue in its employ a person whom it has lost trust and
orders, “donations totaling 5K” for medical bills, overpricing BPI confidence.
Family Bank’s passbook, etc. The report also made negative Obiter
findings and observations about his work performance. - The policy of preventively suspending an employee under
- 14 June 1993, petitioner wrote a memorandum to the bank investigation for charges involving dishonesty is an acceptable
narrating what had transpired in his meeting with the bank on 10 precautionary measure in order to preserve the integrity of vital
June 1993 where he denied all the accusations against him papers and documents that may be material and relevant to the
and contested his preventive suspension. His denials and plea case and to which he, otherwise, would have access by virtue of
for compassion notwithstanding, petitioner was dismissed by his position. It was only after an exhaustive investigation that
respondent bank via a notice of termination, dated 25 October respondent bank finally decided to terminate the services of
1993, signed by AVP Gerlanda de Castro. In a letter of petitioner on 25 October 1993.
confession, dated 28 October 1993, petitioner ultimately 2. NO
admitted his infractions and instead asked for financial Ratio The law requires the employer with 2 written notices
assistance. He, at the same time, executed an undated before termination can be legally affected as well as a hearing
"Release Waiver and Quitclaim" acknowledging receipt of where the employee can explain his side.
P400,000.00 financial assistance from the bank and thereby A consultation or conference with the employee is not a
releasing and discharging it from any action or claim arising from substitute for the actual observance of notice and hearing.
his employment with the bank and membership in the
retirement plan. 6
"`(c) Fraud or willful breach by the employee of the trust reposed in him by his
- Subsequently, however, petitioner claimed that the letter employer or duly authorized representative.'
Labor Law 1 A2010 - 25 - Disini
Reasoning CBA covering the remaining period of 2 years starting from
- The first notice apprises the employee of the particular acts or December 1, 1995 to November 30, 1997.
omissions for which the dismissal is sought. The second notice - MERALCO signified its willingness to re-negotiate through a
informs the employee of the employer’s decision to dismiss him. letter and formed a CBA negotiating panel for the purpose.
- In the case at bench, Dayan was called to a meeting June 10 Bargaining negotiations proceeded. However, despite the series
where he denied all charges against him. After which, he was of meetings bet. The negotiating panels, the parties failed to
issued a notice of preventive suspension. After investigation, he arrive at "terms and conditions acceptable to both of them.
was given notice of dismissal. There was failure on the part of - On April 23, 1996, MEWA filed a Notice of Strike with the
BPI to conform to the notice and hearing requirement. The National Capital Region Branch of the National Conciliation and
preliminary meeting is not sufficient compliance rather it was Mediation Board (NCMB) of the Department of Labor and
merely exploratory. Where the employee denies charges against Employment (DOLE). on the grounds of bargaining deadlock and
him, a hearing is necessary to thresh out any doubt. unfair labor practices. The NCMB then conducted a series of
3. NO conciliation meetings but the parties failed to reach an amicable
Ratio The 2 notice and hearing rule is indispensable for a settlement. Faced with the imminence of a strike, MERALCO filed
dismissal to be validly effected, but if it is for a just and an urgent petition with the DOLE praying the Secretary to
valid cause, the failure to observe procedural requirements assume jurisdiction over the labor dispute and to enjoin the
does not invalidate the dismissal of the employee. Instead, striking employees to go back to work. The Secretary did so and
he must be granted separation pay. Whether reinstated or conducted conciliation conferences between the parties to
given separation pay, he should be paid backwages if he bridge their differences. Thereafter, the parties submitted their
has been laid off without written notice 30 days in advance. respective memoranda and on August 19, 1996, the Secretary
For the omission, an appropriate sanction should be resolved the labor dispute through an Order.
imposed depending on the fact and gravity of the situation. - Dissatisfied, MERALCO filed this petition contending that the
Reasoning Sec. of Labor gravely abused its discretion in awarding wage
- In the case at hand, the purpose of the notice and hearing increases and other economic benefits (like 2 months xmas
requirement is not to comply with due process. bonus, loan for the employee’s cooperative, signing hours, 40-
- Art 283 originated from the Spanish Code of Commerece of day union leave, sick leave, etc.), in expanding the scope of the
1882, which gave either party to the employer-employee bargaining unit to all regular rank and file employees, in
relationship the right to terminate their relationship by giving exercising discretion in determining the retroactivity of the CBA,
notice to the other a month in advance. This was repealed by etc.
Art. 2270 of the Civil Code, then by RA 1052 or Termination Pay
Law, and finally by RA1787 providing for the advance notice or ISSUES
payment of compensation at the rate of ½ month for every year WON the Secretary failed to properly considered and
of service. appreciated the evidence presented before him, thus committing
- The Termination Pay Law is a regulatory measure to give a grave abuse of discretion
opportunity for the employer to look for a replacement or
substitute and for the employee to look for another job. The HELD
notice was not required if the dismissal is for just cause. The YES
notice requirement is only implemented by BP130 amending the - the Secretary of Labor disregarded and misappreciated
Labor Code. evidence, particularly with respect to the wage award. The
- The employer cannot be expected to be an entirely impartial Secretary of Labor apparently also acted arbitrarily and even
judge of his own cause. whimsically in considering a number of legal points; even the
4. NO Solicitor General himself considered that the Secretary gravely
Ratio Quitclaims executed by employees are commonly frowned abused his discretion on at least three major points: (a) on the
upon as contrary to public policy and ineffective to bar signing bonus issue; (b) on the inclusion of confidential
claims for the full measure of a worker’s legal rights. employees in the rank and file bargaining unit, and (c) in
However, if the agreement was voluntarily entered into and mandating a union security "closed-shop" regime in the
represents a reasonable settlement, it is binding on the bargaining unit.
parties and may not be disowned unless there is clear proof - On the wages issue: the Secretary gravely abused his
that the waiver was wangled from an unsuspecting gullible discretion in making this wage award because he disregarded
person, or the terms are unconscionable on its face. evidence on record. MERALCO projection had every reason to be
Reasoning reliable because it was based on actual and undisputed figures
- Dayan is a managerial employee with vast experience. He the union projection was based on a speculation of Yuletide
cannot be willing to compromise his future by agreeing to consumption that the union failed to substantiate. The amount
execute a document highly prejudicial to his interest. of the wage increase would also be an unreasonably high burden
Complainant was well aware of the consequences of his acts. for MERALCO to shoulder.
Disposition decision of the Court of Appeals reinstating the - On the economic issues:
decision of the Labor Arbiter and setting aside the NLRC's > Christmas bonus - As a rule, a bonus is not a demandable and
decision is AFFIRMED. enforceable obligation; ,it may nevertheless be granted on
equitable considerations as when the giving of such bonus has
been the company's long and regular practice, To be considered
a "regular practice," the giving of the bonus should have been
MANILA ELECTRIC COMPANY V QUISUMBING done over a long period of time, and must be shown to have
MARTINEZ; January 27, 1999 been consistent and deliberate. We can not, however, affirm the
Secretary's award of a two-month special Christmas bonus to the
NATURE employees since there was no recognized company practice of
Petition for certiorari, MERALCO seeking to annul the orders of giving a two-month special grant. The two-month special bonus
the Sec. of Labor to execute a collective bargaining agreement was given only in 1995 in recognition of the employees' prompt
(CBA) and efficient response during the calamities. Instead, a one-
month special bonus, We believe, is sufficient, this being merely
FACTS a generous act on the part of MERALCO.
- Meralco Worker’s Association (MEWA) is a duly recognized > RICE SUBSIDY and RETIREMENT BENEFITS for RETIREES
labor organization of the rank-and-file employees of MERALCO. > EMPLOYEES' COOPERATIVE
On Sept. 7, 1995, it informed MERALCO of its intention to > GHSIP, HMP BENEFITS FOR DEPENDENTS
renegotiate the terms and conditions of their existing 1992-97 and HOUSING EQUITY LOAN
Labor Law 1 A2010 - 26 - Disini
> SIGNING BONUS, RED-CIRCLE-RATE ALLOWANCE submit her reply within the two-day period.
> SICK LEAVE RESERVE OF 15 DAYS, 40-DAY UNION LEAVE - Labor Arbiter Caday rendered judgment declaring that the
- Non-economic issues petitioner was illegally dismissed.
> Scope of the bargaining unit - employees holding a - On appeal, NLRC rendered the assailed decision which set
confidential position are prohibited from joining the union of the aside the Labor Arbiter’s ruling.
rank and file employees
> Security demand - the Secretary cannot rule on the union ISSUE
security demand because this is not .1 mandatory subject for WON NLRC erred in finding that Asuncion was dismissed by the
collective bargaining agreement Company for a just or authorized cause
Ratio The Secretary of Labor's statutory power under Art. 263 YES
(g) of the Labor Code to, assume jurisdiction over a labor dispute - There is lack of evidence to establish the charges of
in an industry indispensable to the national interest, and, to absenteeism and tardiness.
render, an award on compulsory arbitration, does not exempt - A worker’s employment is property in the constitutional sense.
the exercise of this power from the judicial review. Under this He cannot be deprived of his work without due process. In order
constitutional mandate, every legal power of the Secretary of for the dismissal to be valid, not only must it be based on just
Labor under the Labor Code, or, for that matter, any act of the cause supported by clear and convincing evidence, the
Executive, that is attended by grave abuse of discretion is employee must also be given an opportunity to be heard and
subject to review by this Court in an appropriate proceeding. To defend himself. It is the employer who has the burden of
be sure, the existence of an executive power alone - whether proving that the dismissal was with just or authorized cause. The
granted by statute or by the Constitution cannot exempt the failure of the employer to discharge this burden means that the
executive action from judicial oversight, interference or reversal dismissal is not justified and that the employee is entitled to
when grave abuse of discretion is, or is alleged to be, present. reinstatement and backwages.
Thus, the actions of the Sec. of Labor is subject to judicial - Company submitted mere handwritten listing and computer
review. print-outs. The handwritten listing was not signed by the one
- The extent of judicial review over the Secretary of Labor's who made the same. The handwritten listing and unsigned
arbitral award is not limited to a determination of grave abuse in computer print-outs were unauthenticated and, hence,
the manner of the secretary's exercise of his statutory powers. unreliable.
This Court is entitled to, and must - in the exercise of its judicial - Company failed to present a single piece of credible evidence
power - review the substance of the Secretary's award when to serve as the basis for their charges against Asuncion and
grave abuse of discretion is alleged to exist in the award, i.e.; in consequently, failed to fulfill their burden of proving the facts
the appreciation of and the conclusions the Secretary drew from which constitute the just cause for the dismissal of the
the evidence presented. The natural and ever present limitation petitioner.
on the Secretary's acts is, of course, the Constitution. But in this - Asuncion’s letter did not amount to an admission of her alleged
case we believe that the more appropriate and available absences. Her alleged absences were incurred on Saturdays.
standard - and one does not require a constitutional These should not be considered as absences as there was an
interpretation - is simply the standard of reasonableness. In arrangement between her and the private respondents that she
layman's terms, reasonableness implies the absence of would not be required to work on Saturdays.
arbitrariness - Neither had the Company shown by competent evidence that
Disposition petition is granted and the orders of public Asuncion was given any warning or reprimanded for her alleged
respondent Secretary of Labor dated August 19, 1996 and absences and tardiness.
December 28, 1996 are set aside to the extent set forth above. - The two-day period given to Asuncion to explain and answer
The parties are directed to execute a Collective Bargaining the charges against her was most unreasonable, considering
Agreement incorporating the terms and conditions contained in that she was charged with several offenses and infractions (35
the unaffected portions of the Secretary of Labor's orders of absences, 23 half-days and 108 tardiness), some of which were
August 19, 1996 and December 28, 1996, and the modifications allegedly committed almost a year before, the charges leveled
set forth above. The retirement fund issue is remanded to the against her lacked particularity.
Secretary of Labor for reception of evidence and determination - The law mandates that every opportunity and assistance must
of the legal personality of the MERALCO retirement fund. be accorded to the employee by the management to enable him
to prepare adequately for his defense.
If doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted
in favor of the latter. The employer must affirmatively show
SAROCAM V INTERORIENT MARITIME ENT. INC. AND rationally adequate evidence that the dismissal was for a
DEMACO UNITED LTD. justifiable cause.
CALLEJO, SR.; June 27 2006 - Asuncion has been illegally terminated, she is necessarily
entitled to reinstatement to her former previous position without
[PAGE 16] loss of seniority and the payment of backwages.


KAPUNAN; July 31, 2001 CALLEJO, SR.; May 25, 2004
- Asuncion was employed as an accountant/bookkeeper by the Appeal from a decision of the Court of Appeals
respondent Mabini Medical Clinic.
- Officials of the DOLE conducted a routine inspection of the FACTS
company and discovered upon the disclosure of Asuncion - The Asian Recruitment Council Philippine Chapter, Inc. (ARCO-
violations of the labor standards law. The company was made to Phil) filed on July 17, 1995 a petition for declaratory relief under
correct these violations. Rule 63 0f the Rules of Court with the RTC of Quezon City to
- Dr. Juco charged Asuncion with offenses such Chronic declare as unconstitutional portions of RA 8042, otherwise
Absentism, Habitual tardiness, Loitering, Disobedience and known as the Migrant Workers and Overseas Filipinos Act of
insubordination and consequently dismissed Asuncion on the 1995 with a plea for the issuance of a temporary restraining
ground of disobedience of lawful orders and for her failure to
Labor Law 1 A2010 - 27 - Disini
order and/or a writ of preliminary injunction enjoining the various cases it had earlier decided on apply RA 8042. By these
government from enforcing the said portions of the law. The rulings, the SC, in effect, affirmed the validity of the assailed
questioned portions of the said RA deal with illegal recruitment, provisions. Hence the enforcement of the provisions cannot be
penalties for illegal recruitment, and on the venue of criminal enjoined unless the SC, by final judgment declares the provisions
action for illegal recruitment. to be unconstitutional.
- On August 1, 1995, the trial court issued a temporary
restraining order on the implementation or effectivity of the
questioned provisions based on the allegations of the private
respondents that they will suffer grave or irreparable damage or BROTHERHOOD V CIR, AND NATIONAL LABOR
injury if the law is implemented. UNION, INC.
- ARCO-Phil was joined in the petition by eleven other LAUREL; February 27, 1940
corporations which were allegedly members of the organization
when it filed an amended petition. The amended petition also NATURE
questioned other sections of the law which dealt with the The respondent National Labor Union, Inc., prays for the vacation
overseas deployment only of skilled Filipino workers alleging of the judgment rendered by the majority of this Court and the
discrimination against unskilled workers. remanding of the case to the Court of the Industrial Relations for
a new trial.
- The trial court issued a writ of preliminary injunction on August The petitioner, Ang Tibay, has filed an opposition to the motion
21, 1995 upon a bond of Pesos 50,000. for reconsideration of the respondent National Labor Union, Inc.
- Petitioners filed a petition with the court of Appeals assailing
the order and the writ with the court of Appeals on the grounds FACTS
that respondent, ARCO-Phil, is not the real party-in-interest and - CIR created by Commonwealth Act No. 103. Its functions are
that it has not shown any convincing proof that in fact damage specifically stated therein
or injury would result in the implementation of the questioned - Nature of the CIR:
statute. The Court however dismissed the petition. It > more administrative than part of judicial system
subsequently dismissed petitioners’ motion for reconsideration. > not a mere receptive organ of Govt, not passive
- Hence, the petition for review on certiorari to the Supreme > active: not just judicial/quasi-judicial in disputes, but also
Court. has jurisdiction over the entire Philippines to consider,
investigate, decide, settle any question, matter, controversy
ISSUES or dispute arising between, and/or affecting employers and
1. WON private respondents have standing to file suit employees or laborers, and regulate the relations between
2. WON the trial court committed grave abuse of discretion them.
amounting to excess or lack of jurisdiction in issuing the assailed > mingling of executive and judicial functions (a departure
order and the writ of preliminary injunction on a bond of only from the rigid doctrine of the separation of governmental
Pesos 50,000 powers)
3. WON the appellate court erred in affirming the trial court’s > not narrowly constrained by technical rules of procedure:
order and the writ it issued it’s required to act according to justice and equity and
substantial merits of the case, without regard to
HELD technicalities or legal forms…” (Section 20, Commonwealth
1. The SC ruled that the respondents have locus standi citing it Act No. 103)
earlier ruling in Telecommunications and Broadcast Attorneys of > The fact that the CIR may be said to be free from certain
the Philippines vs Commission of Elections. It was held in that procedural requirements doe not mean that it can entirely
case that standing jus tertii would be recognized if it can be ignore or disregard the fundamental requirements of due
shown that the party suing has some substantial relation to the process in trials.
third party, or that the right of the third party would be diluted - Primary rights which must be respected even in proceedings of
unless the party in court is allowed to espouse the third party’s this character:
constitutional rights. With regard the portion relating to (1) the right to a hearing, which includes the right of the party
discrimination against unskilled workers, the SC ruled that interested or affected to present his own case and submit
respondents have no standing as they failed to implead any evidence in support thereof. Morgan v. U.S "the liberty and
unskilled worker in their petition. property of the citizen shall be protected by the rudimentary
2. The order and the writ of preliminary injunction issued by the requirements of fair play.
trial court is a grave abuse of its discretion amounting to excess (2) Not only must the party be given an opportunity to present
or lack of jurisdiction. The SC citing jurisprudence ruled that a his case and to adduce evidence tending to establish the rights
law is presumed constitutional until the same is declared which he asserts but the tribunal must consider the evidence
unconstitutional by judicial interpretation. This is so because presented. Edwards vs. McCoy, "the right to adduce evidence,
suspension of the operation of the law is an interference with the without the corresponding duty on the part of the board to
official acts of the duly elected representatives of the people and consider it, is vain. Such right is conspicuously futile if the
also of the highest magistrate of the land. The possible person or persons to whom the evidence is presented can thrust
unconstitutionality of a statue, on its face, does not of itself it aside without notice or consideration."
justify an injunction against good faith attempts to enforce it, (3) "While the duty to deliberate does not impose the obligation
unless there is showing of bad faith, harassment, or any other to decide right, it does imply a necessity which cannot be
unusual circumstances that would call for equitable relief. To be disregarded, namely, that of having something to support it is a
entitled to a preliminary injunction to enjoin the enforcement of nullity, a place when directly attached." (Edwards vs. McCoy,
a law assailed to be unconstitutional, the party must establish supra.) Law is both a grant and a limitation upon power.
that it will suffer irreparable harm in the absence of injunctive (4) Not only must there be some evidence to support a finding
relief and must demonstrate that it is likely to succeed on the but the evidence must be "substantial." -such relevant evidence
merits, or that there are sufficiently serious questions going to as a reasonable mind accept as adequate to support a
the merits and the balance of hardships tips decidedly in its conclusion." The statute provides that "the rules of evidence
favor. This higher standard reflects judicial deference towards prevailing in courts of law and equity shall not be controlling.'
legislation or regulations developed through presumptively The obvious purpose of this and similar provisions is to free
reasoned democratic process. In this case, none were shown. administrative boards from the compulsion of technical rules so
3. The SC also held that the assailed order and writ of that the mere admission of matter which would be deemed
preliminary injunction is mooted by case law. The SC cited incompetent inn judicial proceedings would not invalidate the
Labor Law 1 A2010 - 28 - Disini
administrative order. But this assurance of a desirable flexibility 7. That the employer Toribio Teodoro was guilty of unfair labor
in administrative procedure does not go far as to justify orders practice for discriminating against the National Labor Union, Inc.,
without a basis in evidence having rational probative force. and unjustly favoring the National Workers' Brotherhood.
(5) The decision must be rendered on the evidence presented at 8. That the exhibits hereto attached are so inaccessible to the
the hearing, or at least contained in the record and disclosed to respondents that even with the exercise of due diligence they
the parties affected. -Protect parties in their right to know and could not be expected to have obtained them and offered as
meet the case against them. It should not, however, detract evidence in the Court of Industrial Relations.
from their duty actively to see that the law is enforced, and for 9. That the attached documents and exhibits are of such far-
that purpose, to use the authorized legal methods of securing reaching importance and effect that their admission would
evidence and informing itself of facts material and relevant to necessarily mean the modification and reversal of the judgment
the controversy. Boards of inquiry may be appointed for the rendered herein.
purpose of investigating and determining the facts in any given
case, but their report and decision are only advisory. (Section 9, ISSUE
Commonwealth Act No. 103.) The Court of Industrial Relations WON a new trial in the CIR should be granted
may refer any industrial or agricultural dispute or any matter
under its consideration or advisement to a local board of inquiry, HELD
a provincial fiscal. a justice of the peace or any public official in YES
any part of the Philippines for investigation, report and Ratio When a hearing before the CIR is conducted and a ruling
recommendation, and may delegate to such board or public is arrived at without any substantial evidence, and there may be
official such powers and functions as the said Court of Industrial more evidence to be heard, a new trial shall be granted.
Relations may deem necessary, but such delegation shall not Reasoning
affect the exercise of the Court itself of any of its powers. - The SC found no substantial evidence that the exclusion of the
(6) The Court of Industrial Relations or any of its judges, 89 laborers here was due to their union affiliation or activity.
therefore, must act on its or his own independent consideration Although the CIR is a court with special nature- in that it may be
of the law and facts of the controversy, and not simply accept said to be free from technical rules of procedure- it must still
the views of a subordinate in arriving at a decision. It may be respect certain primary rights, one of which is that its decision
that the volume of work is such that it is literally Relations must be based on substantial evidence.
personally to decide all controversies coming before them. In the The interest of justice would be better served if the movant is
United States the difficulty is solved with the enactment of given opportunity to present at the hearing the documents
statutory authority authorizing examiners or other subordinates referred to in his motion and such other evidence as may be
to render final decision, with the right to appeal to board or relevant to the main issue involved. The legislation which
commission, but in our case there is no such statutory authority. created the Court of Industrial Relations and under which it acts
(7) The Court of Industrial Relations should, in all controversial is new. The failure to grasp the fundamental issue involved is not
questions, render its decision in such a manner that the parties entirely attributable to the parties adversely affected by the
to the proceeding can know the various issues involved, and the result.
reasons for the decision rendered. The performance of this duty Disposition The motion for a new trial should be and the same
is inseparable from the authority conferred upon it. is hereby granted, and the entire record of this case shall be
- The record of the proceedings had before the CIR in this remanded to the Court of Industrial Relations, with instruction
particular case had no substantial evidence that the exclusion of that it reopen the case, receive all such evidence as may be
the 89 laborers was due to their union affiliation. relevant and otherwise proceed in accordance with the
- The whole transcript of the hearing is just a record of requirements set forth hereinabove. So ordered.
contradictory statements of opposing counsel, with sporadic
conclusion drawn to suit their own views
- these statements have no evidentiary value
Respondents' Comments REYES; April 29, 1971
1. That Toribio Teodoro's claim that on September 26, 1938,
there was shortage of leather soles in ANG TIBAY making it NATURE
necessary for him to temporarily lay off the members of the Petition for certiorari to determine the validity of Resolution No.
National Labor Union Inc., is entirely false and unsupported by 139 (68) of the Civil Aeronautics Board in CAB Case No. 1414,
the records of the Bureau of Customs and the Books of Accounts allegedly issued without or in excess of jurisdiction.
of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio FACTS
Teodoro was but a scheme to systematically prevent the - Philippine Airlines Inc (PAL) petitioned the Civil Aeronautics
forfeiture of this bond despite the breach of his CONTRACT with Board (Board), for approval of a proposed schedule introducing
the Philippine Army. seven flights and the adjustment of the flight schedule that may
3. That Toribio Teodoro's letter to the Philippine Army dated thus be affected. On April 15 1968, action on the petition was
September 29, 1938, (re supposed delay of leather soles from deferred for further study.
the States) was but a scheme to systematically prevent the - On April 22 1968, the Board passed Resolution No. 109 (68),
forfeiture of this bond despite the breach of his CONTRACT with referring PAL's petition to a hearing examiner for economic
the Philippine Army. justification. PAL moved for reconsideration of Resolution No.
4. That the National Worker's Brotherhood of ANG TIBAY is a 109 (68). The Board deferred action on this later motion, until
company or employer union dominated by Toribio Teodoro, the PAL shall have resumed its DC-3 services in certain airports
existence and functions of which are illegal. (281 U.S., 548, named therein. PAL filed another motion for reconsideration, on
petitioner's printed memorandum, p. 25.) the ground that the new flights which it was proposing to
5. That in the exercise by the laborers of their rights to collective operate will be serviced by jet-prop or pure jet equipment only,
bargaining, majority rule and elective representation are highly thus, the order for resumption of DC-3 services was improper
essential and indispensable. (Sections 2 and 5, Commonwealth and should be deleted. In its Resolution No. 131 (68) of May 20
Act No. 213.) 1968, the Board deferred action on this motion for
6. That the century provisions of the Civil Code which had been reconsideration.
(the) principal source of dissensions and continuous civil war in - On May 15 1968, PAL filed an Urgent Petition for approval of a
Spain cannot and should not be made applicable in interpreting consolidated schedule of jet and jet prop flights, with an interim
and applying the salutary provisions of a modern labor DC-3 schedule to different secondary and feeder points (DTS-
legislation of American origin where the industrial peace has 35). On May 28 1968, the Board issued its Resolution No. 139
always been the rule. (68), approving DTS-35 for a period of 30 days, effective June 1
Labor Law 1 A2010 - 29 - Disini
1968, subject to the conditions that (a) the flight between Manila - There is no proof that in the hearings conducted by hearing
and San Fernando, La Union, F210/211 of the same timetable, be examiner, petitioner was not notified or given opportunity to
operated daily instead of twice a week as proposed, and (b) that adduce evidence in support of its opposition.
all schedules under DTS-35, for which no previous approval has Disposition Petition dismissed
been granted by the Board are to be referred to a hearing
examiner for reception of evidence on its economic justification.
- After the examiner's report, several of the proposed flights
were approved for 30 days from July 31 1968. RELATIONS COMMISSION
- On May 31 1968, Air Manila, Inc., filed the instant petition FELICIANO; May 25, 1988
claiming that the respondent Board acted without or in excess of
jurisdiction and/or with abuse of discretion in issuing its FACTS
Resolution No. 139 (68). - Eduardo Calangi, a machine operator at Century Textile Mills,
- Petitioner alleged that the proposed new schedule, involving an was terminated because he was allegedly behind the plot to kill
in crease of frequencies, would not only saturate the routes his two supervisors, Melchor Meliton and Antonio Santos. Marin,
served also by petitioner, but would also affect its schedule; that another factory worker, noticed that Torrena, a machine
the Board's approval of said Domestic Traffic Schedule without operator, put some substance in a pitcher where Meliton and
receiving the evidence of the parties constituted a deprivation of Santos usually drank from. It was later found out that the
petitioner's light to be heard; and that such authorization to PAL substance was formaldehyde. Torrena confessed that Calangi
to operate the proposed schedule without economic justification personally instructed him to put the substance in the pitcher as
amounted to a capricious and whimsical exercise by the Board of an act of revenge against Meliton and Santos because they
its power amounting to lack of jurisdiction. repeatedly instigated the termination of the two machine
operators. Torrena and Calangi were preventively suspended
ISSUES and eventually dismissed.
1. WON the Board acted without or in excess of jurisdiction - Calangi filed a complaint against illegal dismissal with the
and/or with abuse of discretion in issuing its Resolution No. 139 Arbitration Branch, NCR, MOLE and was dismissed because the
(68) evidence was “so overwheliming” and “sufficient enough”
2. WON the Board's approval of said Domestic Traffic Schedule against Calangi and he failed inexplicable to deny or controvert
without receiving the evidence of the parties constituted a any charges. Calangi filed an appeal in NLRC and the decision of
deprivation of petitioner's light to be heard the Arbitration Branch was reversed.

1. NO 1. WON respondent was illegally dismissed because his
- It has been correctly said that administrative proceedings are termination was not in accordance with due process
not exempt from the operation of certain basic and fundamental 2. If YES, WON respondent can be reinstated in the company
procedural principles, such as the due process requirements in with full backwages and without loss of seniority rights
investigations and trials. And this administrative due process is
recognized to include (a) the right to notice, be it actual or HELD
constructive, of the institution of the proceedings that may affect 1. YES because termination is without notice and hearing. The
a person's legal rights; (b) reasonable opportunity to appear and twin requirements for notice and hearing constitute essential
defend his rights, introduce witnesses and relevant evidence in elements of due process in cases of employee dismissal: the
his favor, (c) a tribunal so constituted as to give him reasonable requirement of notice is intended to inform the employee
assurance of honesty and impartiality, and one of competent concerned of the employer’s intent and the reason for the
jurisdiction; and (4) a finding or decision by that tribunal proposed dismissal; upon the other hand, the requirement of
supported by substantial evidence presented at the hearing, or hearing affords the employee the opportunity to answer his
at least contained in the records or disclosed to the parties employer’s charges against him and accordingly to defend
affected. himself
- However, it can not truthfully be said that the provisional Reasoning
approval by the Board of PAL's proposed DTS-35 violates the - A278 Labor Code states that employer should furnish the
requisites of administrative due process. Admittedly, after PAL's worker a written notice containing causes for termination and
proposal to introduce new Mercury night flights had been shall afford ample opportunity to be heard and to defend
referred to a hearing examiner for economic justification, PAL himself… the burden of proving that the termination was valid
submitted a so-called consolidated schedule of flights, DTS-35, rests on the employer
that included the same Mercury night flights, and this was - Rule XIV Book V of the Rules and Regulations Implementing the
allowed by Board Resolution No. 139(68). According to Labor Code
respondents, however, the Board's action was impelled by the Sec 2 Notice of Dismissal: written notice of the particular acts
circumstance that at the time, the authorizations of certain flight or omission constituting grounds for dismissal
schedules previously allowed but were incorporated in DTS-35 Sec 5 Answer and Hearing: employer shall afford the worker
were about to expire; thus, the consolidated schedule had to be ample opportunity to be heard and to defend himself with the
approved temporarily if the operations of the flights referred to assistance of his representatives if he so desires
were not to be suspended. In short, the temporary permit was Sec 6 Decision to Dismiss: employer should immediately
issued to prevent the stoppage or cessation of services in the inform the worker in writing of the decision to dismiss him
affected areas. This point petitioner has failed to refute. stating clearly the reasons
- Under the law, the Civil Aeronautics Board is not only - “prior consultation” with the labor union is legally insufficient.
empowered to grant certificates of public convenience and Right to notice and hearing are rights personal to an employee.
necessity; it can also issue, deny, revise, alter, modify, cancel, Such consultation or consent is not a substitute for actual
suspend or revoke, in whole or in part, any temporary operating observance of the rights
permit, upon petition or complaint of another or even at its own - nothing in the record that Cainta police interrogated Calangi
initiative. The exercise of the power, of course, is supposed to be himself. Basis for the ground of dismissal is anchored solely on
conditioned upon the paramount consideration of public Torrena’s sworn statement
convenience and necessity, and nothing has been presented in 2. YES, according to A280 Labor Code, there is security of
this case to prove that the disputed action by the Board has tenure. No loss of seniority rights and payment of backwages
been prompted by a cause other than the good of the service. are the normal consequences when finding an employee illegally
2. NO dismissed BUT reinstatement is not for the best interest of the
parties involved. The corporation cannot force to take back an
Labor Law 1 A2010 - 30 - Disini
employee who poses a threat to the lives of other employees. interest in his welfare, however reckless he may be. The whole is
Therefore, separation pay must be paid in lieu of reinstatement no greater than the sum of all the parts, and where the
Disposition Petition for certiorari DISMISSED. TRO and individual health, safety and welfare are sacrificed or neglected,
Resolutions WITHDRAWN. Decision in NLRC case affirmed with the State must suffer (citing a US case: West Coast Hotel
modifications on awarding to of three years back wages and Company vs. Parrish).
addition of separation pay Citing Justice Laurel in Ang Tibay v CIR (concurring): The policy
of laissez faire has to some extent given way to the assumption
by the government of the right of intervention even in
contractual relations affected with public interest
LEYTE FARMERS' & LABORERS' UNION Obiter regarding the criticism that the additional benefits would
PARAS; May 12, 1948 benefit the union and well as non-union members, the court held
that as the workers are laborers of the company, they are
NATURE entitled to the increase regardless of their affiliation. To make a
Petition to review on certiorari decision of Court of Industrial distinction would only be an unjust and unwarranted
Relations. discrimination against non-members.
Disposition Decision Affirmed.
- Court of Industrial Relations (CIR) issued order directing Leyte VICTORIANO V ELIZALDE ROPE WORKERS’ UNION
Land Transportation Company, Inc. (LLTCI) to (among others)
grant various employees increase in wages and salaries (Php5-
ZALDIVAR; September 12, 1974
Php10), grant per diems (Php2/day) to its drivers, conductors,
mechanics and other workers, and grant 15 days vacation with NATURE
pay and 15 days sick leave with pay to employees and laborers. Appeal from a decision of the CFI enjoining Elizalde Rope
LLTCI appealed. Factory, Inc. from dismissing Appellee Victoriano
- LLTCI’s contentions: CIR made a mistake in conceding salary/
wage increases merely because such increases would enable
employees to meet high cost of living. The increases, if added to FACTS
the crippling losses, would only throw the company into - RA 875 provides:
bankruptcy. CIR had no power to order such directives and a. General Rule: An employer can make an agreement with a
violated appellant’s freedom to contract. labor organization to require as a condition of employment
membership therein.
ISSUES - RA 3350 amending RA 875 provides:
1. WON CIR can validly take into account the “high cost of living” b. Exception: But such agreement shall not cover members of
as a factor for determining reasonableness of salary raise any religious sects which prohibit affiliation of their members in
2. WON CIR can validly determine and fix minimum wages for any such labor organization.
workers - Appellee Victoriano is an employee of the Elizalde Rope
3. WON appealed decision in effect has deprived LLTCI of its Factory, Inc. As such employee, pursuant to RA 875, he is a
rights to enter into contract of employment as it and the member of the Elizalde Rope Workers’ Union which had with the
employee may agree Company a Collective Bargaining Agreement containing a Closed
Shop Provision, i.e. membership in the Union is required as a
HELD condition of employment.
1. YES - Victoriano is a member of Iglesia ni Cristo, a religious sect
Ratio The increases ordered are implied in the power/s granted prohibiting affiliation of its members with any labor organization.
to the CIR by the Commonwealth Act No. 103. As such, after RA 3350 was enacted, he tendered his resignation
- Sec.20 of Commonwealth Act no. 103 provides that "in the to Appellant Union.
hearing, investigation and determination of any question or - Company dismissed Victoriano from service. He filed a case
controversy and in exercising any duties and power under this with the CFI. The CFI decided in his favor. Appellant appealed
Act, the Court shall act according to justice and equity and directly to SC.
substantial merits of the case, without regard to technicalities or Petitioners' Claim
legal forms." 1. RA 3350 infringes on the fundamental right to form lawful
- Sec.5 of same act provides, in connection with minimum wages associations in that it bans all those belonging to such religious
for a given industry or in a given locality, that the court shall fix sects from affiliation with any labor organization
the same at a rate that "would give the workingmen a just 2. RA 3350 is unconstitutional for impairing the obligation of
compensation for their labor and an adequate income to meet contracts in that, while Union is obliged to comply with CBA:
the essential necessities of civilized life, Laborers' Union and at a. the Act relieves the employer from its reciprocal obligation of
the same time allow the capital a fair return on its investment." maintaining union membership as a condition for employment
2. YES b. impairs the Union’s rights to dues from members who, under
Ratio The court has already upheld the constitutionality of the the act, are relieved from the obligation to continue as such
power of the CIR to determine and fix minimum wages for members.
workers (in a long line of cases). In fact, the power is 3. RA 3350 discriminatorily favors religious sects while leaving
constitutionally mandated by Art.11,sec,5 ("the promotion of no rights or protection to labor organizations.
social justice to insure the well-being and economic security of 4. RA 3350 violates the constitutional provision that “no religious
all the Laborers' Union people should be the concern of the test shall be required for the exercise of a civil right,”
State"); Art.14,sec. 6 ("the State shall afford protection to labor, a. in that the laborer’s exercise of his civil right to join
especially to working women and minors, and shall regulate the associations has to be determined by his affiliation with a
relations between landowner and tenant, and between labor and religious sect
capital in industry and in agriculture" xxx "the State may provide b. conversely, if a worker has to sever his religious connection
for compulsory arbitration.") with a sect that prohibits membership in unions in order to join a
3. NO labor union, the Act would violate religious freedom
Ratio The fact that both parties are of full age and competent to 5. RA 3350 violates equal protection of laws, by exempting from
contract does not necessarily deprive the State of the power to the operation of Closed Shop Agreement the members of the
interfere where the parties do not stand upon an equality, or Iglesia ni Cristo, thereby granting said members undue
where the public health demands that one party to the contract advantages over their fellow members (i.e. while the Act
shall be protected against himself. The State still retains an exempts them from union obligation, it entitles them to
Labor Law 1 A2010 - 31 - Disini
enjoyment of concessions and benefits the union might secure -In Aglipay v Ruiz, the Court said that the government should not
from the employer) be precluded from pursuing valid objectives secular in character
6. RA 3350 violates the constitutional provision regarding the even if the incidental result would be favorable to a religion or
promotion of social justice. sect, as long as it has a secular legislative purpose and a
7. The amendment by RA 3350 in the form of the exception in primary effect that neither advances nor inhibits religion.
favor of religious sects prohibiting union membership is - The purpose of RA 3350 is secular: to advance the
necessary rooted in whether the Closed Shop Provision is constitutional right to free exercise of religion, by averting that
violative of religious freedom. certain persons be refused work by reason of their religion and
Respondents' Comments union security agreements.
1. No. The right to join associations includes the right not to join; - The primary effect of the exemption in favor of members of
the Act actually prohibits compulsion of workers to join labor sects prohibiting union membership is the protection of said
organization employees against the aggregate force of the CBA, and relieving
2. No. The Act formed part of, and was incorporated into, the certain citizens of a burden on their religious beliefs.
terms of the Closed Shop Agreement - Although it may benefit some sects in particular, the benefits
3. No. The Act instead accommodated the religious needs of are merely incidental and indirect, not primary.
workers and balanced the collective rights of organized labor 4. NO
with the constitutional right of an individual to freely exercise his - The Act does not require as a qualification for joining any lawful
chosen religion. association membership in any particular religion; neither does
4. No. The constitutional right of an individual to freely exercise the Act require affiliation with a religious sect that prohibits its
his chosen religion has primacy over union security measures members from joining a labor union.
which are merely contractual. - Joining or withdrawing from a labor union requires a positive
5 No. The classification of workers depending on their religious act. The Act only exempts members with such religious
tenets is: affiliation from the coverage of closed shop agreements. Thus, a
a. based on substantial distinction religious objector is not required to do a positive act. He is
b. germane to the purpose of the law, and exempted ipso jure. How can there be a religious test required
c. applies to all the members of the given class for the exercise of a right when no right need be exercised?
6. No. The Act was enacted precisely to equalize employment 5. Equal protection is not a guaranty of equality in the
opportunities for all citizens in the midst of diversities of religious application of laws upon all citizens, but on persons according to
beliefs, a manifestation of social justice. the circumstances surrounding them. It does not forbid
discrimination as to things that are different. All that is required
ISSUES of valid classification is that it be:
1 WON RA 3350 infringes on the fundamental right to form a. reasonable, i.e. based on substantial distinctions which make
lawful associations for real differences  real: based on WON by reasons of their
2 WON RA 3350 is unconstitutional for impairing the obligation of religious belief, cannot sign up with a labor union
contracts b. germane to the purpose of the law  the purpose of the law is
3 WON RA 3350 discriminatorily favors religious sects while precisely to avoid those who cannot, because of their religious
leaving no rights or protection to labor organizations. belief, join labor unions, from being deprived of their right to
4 WON RA 3350 violates the constitutional provision that “no work
religious test shall be required for the exercise of a civil right,” c. it must not be limited to existing conditions only
5 WON RA 3350 violates equal protection of laws d. apply equally to each member of the class
6 WON RA 3350 violates the constitutional provision regarding Every classification allowed by the Constitution by its nature
the promotion of social justice involves inequality. Whenever it is apparent from the scope of
7. WON the amendment in the form of the exception in favor of the law that its object is for the benefit of the public and means
religious sects prohibiting union membership is necessary by which the benefit is to be obtained are of public character,
the law will be upheld even though incidental advantage may
occur to individuals beyond those enjoyed by the general public.
6. NO
HELD - It is not necessary that the entire state be directly benefited.
1. NO Social justice does not require social or legal equality. Social
- The RA does not prohibit the members of such religious sects justice guarantees equality of opportunity, and this is precisely
from joining unions. Both RA 3350 and the Constitution what RA 3350 proposes to accomplish – it gives laborers,
recognize the “right” of freedom of association. A right irrespective of their religious scrupples, equal opportunity for
comprehends two broad notions: work.
a. Liberty or freedom – absence of legal restraint whereby an 7. A statute which is not necessary is not, for that reason,
employee may act for himself without being prevented by law unconstitutional. Legislatures, being chosen by the people, are
b. Power – whereby an employee may join or refrain from joining presumed to understand the needs of the people, and it may
Because before RA 3350, if any person, regardless of his change the laws accordingly. For the validity of a statute, the
religious belief, wishes to be employed, he must become a essential basis for the exercise of power, and not a mere
member of the Collective Bargaining Union. With the exception incidental result arising from its exertion, as in its effects on a
provided in RA 3350 to member of religious organizations, particular case, is the criterion.
employees who are members of the same are given the power Disposition appeal is dismissed. The decision of the CFI
to join or not to join. They cannot be compelled to join even appealed from is affirmed.
when the unions have closed shop agreements with employers.
2. NO
- The prohibition on impairment of obligations by Statute is not
unqualified. It prohibits only unreasonable impairment. In spite
of the constitutional prohibition, the State continues to possess
authority to safeguard the vital interests of the people. The SEPARATE OPINION
reservation of essential attributes of sovereign power is read into
contracts as a postulate to the preservation of the legal order.
The contract clause of the Constitution must therefore be not FERNANDO [concur]
only in harmony with, but also in subordination to the reserved - Stressing the transcendent character of religious freedom and
power of the state to safeguard vital interests of the people. its primacy even as against the claims of protection to labor.
3. NO
Labor Law 1 A2010 - 32 - Disini
- Gerona v Secretary of Education: But between the freedom of The challenged provision is a violation of the constitutional
belief and the exercise of said belief, there is quite a stretch of requirement that a bill cannot embrace more than one subject to
road to travel. If the exercise of said religious belief clashes with be expressed in its title.
established institutions of society and with the law, then the
former must yield. The specific circumstances of the right ISSUES
curtailed as against religious freedom should be given 1. WON the assailed amendment is a violation of the
consideration on a case to case basis. constitutional requirement that a bill cannot embrace more than
one subject to be expressed in its title
2. WON the petitioner is deprived of the liberty to contract
without due process of law
FERNANDO; July 29, 1969
NATURE 1. Ratio The amendment does not constitute a rider problem.
Appeal from a judgment of the Court of First Instance of Manila. The legislature is not required to make the title of the act a
Perez, J. complete index of its contents.
The facts are stated in the opinion of the Court. Reasoning
- The rider provision is aimed against the evils of the so-called
FACTS omnibus bills as logrolling legislation as well as surreptitious or
- The National Power Corporation was given the power (Sec. 3, unconsidered enactments. Where the subject of a bill is limited
R.A. 3043, approved June 17, 1961, entitled "An Act to to a particular matter, the lawmakers along with the people
Further Amend Commonwealth Act Numbered One should be informed of the subject of proposed legislative
Hundred Twenty, as Amended by Republic Act Numbered measures. This constitutional provision thus precludes the
Twenty Six Hundred and Forty-One) to require from insertion of riders in legislation, a rider being a provision not
franchise holders the conditions that: germane to the subject matter of the bill. The provision merely
a) they shall not realize a net profit of more than twelve calls for all parts of an act relating to its subject finding
percent annually of its investments plus two-month expression in its title.
operating expenses; - The Constitution does not require Congress to employ in the
b) NPC can renew all existing contracts with franchise title of an enactment, language of such precision as to mirror,
holders for the supply of electric power and energy. fully index or catalogue all the contents and the minute details
- National Power Corporation has for some years now been therein. It suffices if the title should serve the purpose of the
supplying, distributing, servicing and selling electric power and constitutional demand that it inform the legislators, the persons
energy at fixed rates schedules to the latter who have for some interested in the subject of the bill, and the public, of the nature,
years now been and still are, legally engaged in re-supplying, re- scope and consequences of the proposed law and its operation.
distributing, re-servicing and re-selling the said electric power - If the law amends a section or part of a statute, it suffices if
and energy to individual customers within the coverage of their reference be made to the legislation to be amended, there being
respective franchises. no need to state the precise nature of the amendment.
- Reference was made to the particular contracts petitioners 2. Ratio The petitioner is not deprived the liberty to contract
entered into with respondent, the contracts to continue without due process of law.
indefinitely unless and until either party would give to the other Reasoning For in the face of a constitutional provision that
two years previous notice in writing of its intention to terminate allows deprivation of liberty, including liberty of contract, as long
the same. as due process is observed, the alleged nullity of a legislative act
- On June 18, 1960, an act authorizing the increase of the capital of this character can only be shown if in fact there is such a
stock of the National Power Corporation to P100 million took denial.
effect. On June 17, 1961, it was alleged that the challenged - The Constitution, when there was the fear expressed in many
legislation became a law, purportedly to increase further the quarters that a constitutional democracy, in view of its
authorized capital stock, but including the alleged rider referred commitment to the claims of property, would not be able to cope
to above. effectively with the problems of poverty and misery that
- National Power Corporation approved a rate increase of at least unfortunately afflict so many of our people, is not susceptible to
17.5%, the effectivity of which, was at first deferred to the indictment that the government therein established is
November 1, 1962, then subsequently to January 15, 1963, with impotent to take the necessary remedial measures.
the threat that in case petitioners would fail to sign the revised - There is the clause on the promotion of social justice to ensure
contract providing for the increased rate, 'respondent National the wellbeing and economic security of all the people, as well as
Power Corporation would then cease "to supply, distribute and the pledge of protection to labor with the specific authority to
service electric power and energy to them." regulate the relations between landowners and tenants and
- On March 21, 1963, the lower court, considering that there was between labor and capital.
"no sufficient ground for the issuance of the writ of preliminary - The police power as an attribute to promote the common weal
injunction Petitioner’s Claims,” dismissed the same. would be diluted considerably of its reach and effectiveness if on
- It was alleged in the facts that Alalayan did purchase and take the mere plea that the liberty to contract would be restricted,
power and energy as follows: "Sixty (60) kilowatts and of not less the statute complained of may be characterized as a denial of
than 140,000 kilowatt-hours in any contract year at the rate of due process.
P120.00 per kilowatt per year" payable in twelve equal monthly - The liberty relied upon is not freedom of the mind, which
installments, "plus an energy charge of P0.013 per kilowatt hour, occupies a preferred position, nor freedom of the person, but the
payable on the basis of monthly delivery. liberty to contract, associated with business activities, which, as
- A letter of June 22, 1962 of respondent National Power has been so repeatedly announced, may be subjected, in the
Corporation to petitioner approved his 17.5% rate increase of interest of the general welfare under the Police Power, to
power so that beginning July 1, 1962, the demand charge would restriction valid in character and wide ranging in scope as long
be P10.00 per kilowatt per month and the energy charge would as due process is observed.
be P0.02 per kilowatt hour. - There is no controlling and precise definition of due process. It
- The lower court, in a decision of January 30, 1965, sustained furnishes though a standard to which governmental action
the validity and constitutionality of the challenged provision, should conform in order that deprivation of life, liberty or
hence this appeal. property, in each appropriate case, be valid.
Petitioners’ Claims Standard of Due Process: responsiveness to the supremacy of
reason, obedience to the dictates of justice.
Labor Law 1 A2010 - 33 - Disini
- While not explicitly avowed by petitioner, there is the offenses warrants such penalty in the judgment of management
intimation that to apply the challenged legislation to contracts even if each offense considered separately may not warrant
then in existence would be an infringement of the constitutional dismissal. Habitual offenders or recidivists have no place in PAL.
prohibition against any law impairing the obligation of contracts. On the other hand, due regard shall be given to the length of
Statutes enacted for the regulation of public utilities, being a time between commission of individual offenses to determine
proper exercise by the state of its police power, are applicable whether the employee's conduct may indicate occasional lapses
not only to those public utilities coming into existence after its (which may nevertheless require sterner disciplinary action) or a
passage, but likewise to those already established and in pattern of incorrigibility.
operation. - Labor Arbiter Isabel P. Ortiguerra did not find PAL guilty of
Disposition The decision of the lower court dismissing the unfair labor practice. However, she said that PAL was not totally
petition is dismissed. faultless and therefore ordered the management to share
decision-making on the code of discipline. NLRC affirmed the
Labor Arbiter. Hence, this case.
COMMISSION WON management may be compelled to share with the union or
its employees its prerogative of formulating a code of discipline
MELO; August 13, 1993 HELD
- The exercise of managerial prerogatives is not unlimited. It is
NATURE circumscribed by limitations found in law, a collective bargaining
Petition for certiorari from a decision of the NLRC upholding the agreement, or the general principles of fair play and justice
Labor Arbiter’s ruling directing the PAL to allow the latter’s (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990]).
employees to participate in the formulation of the Code of Moreover, as enunciated in Abbott Laboratories (Phil.), Inc. vs.
Discipline for PAL employees NLRC (154 SCRA 713 [1987]), it must be duly established that
the prerogative being invoked is clearly a managerial one.
FACTS - A close scrutiny of the objectionable provisions of the Code
- On March 15, 1985, the Philippine Airlines, Inc. (PAL) reveals that they are not purely business-oriented nor do they
completely revised its 1966 Code of Discipline. The Code was concern the management aspect of the business of the company
circulated among the employees and was immediately as in the San Miguel case. The provisions of the Code clearly
implemented, and some employees were forthwith subjected to have repercusions on the employees' right to security of tenure.
the disciplinary measures embodied therein. The implementation of the provisions may result in the
- Thus, on August 20, 1985, the Philippine Airlines Employees deprivation of an employee's means of livelihood which, as
Association (PALEA) filed a complaint before the National Labor correctly pointed out by the NLRC, is a property right (Callanta
Relations Commission (NLRC) for unfair labor practice. In its vs. Carnation Philippines, Inc., 145 SCRA 268 [1986]). In view of
position paper, PALEA contended that PAL, by its unilateral these aspects of the case which border on infringement of
implementation of the Code, was guilty of unfair labor practice, constitutional rights, we must uphold the constitutional
specifically Paragraphs E and G of Article 249 and Article requirements for the protection of labor and the promotion of
253 of the Labor Code. social justice, for these factors, according to Justice Isagani Cruz,
- PALEA alleged that copies of the Code had been circulated in tilt "the scales of justice when there is doubt, in favor of the
limited numbers; that being penal in nature the Code must worker" (Employees association of the Philippine American Life
conform with the requirements of sufficient publication, and that Insurance Company vs. NLRC, 199 SCRA 628 [1991] 635).
the Code was arbitrary, oppressive, and prejudicial to the rights - PAL posits the view that by signing the 1989-1991 collective
of the employees. It prayed that implementation of the Code be bargaining agreement, on June 27, 1990, PALEA in effect
held in abeyance; that PAL should discuss the substance of the recognized PAL's "exclusive right to make and enforce company
Code with PALEA; that employees dismissed under the Code be rules and regulations to carry out the functions of management
reinstated and their cases subjected to further hearing; and that without having to discuss the same with PALEA and must less,
PAL be declared guilty of unfair labor practice and be ordered to obtain the conformity thereto" (pp. 11-12, Petitioner's
pay damages (pp. 7-14, Record.). Memorandum; pp. 180-181, Rollo.)
- PAL filed a motion to dismiss the complaint, asserting its - Such provision in the collective bargaining agreement may not
prerogative as an employer to prescribe rules and regulations be interpreted as cession of employees' rights to participate in
regarding employees' conduct. In its reply to PAL's position the deliberation of matters which may affect their rights and the
paper, PALEA maintained that Article 249 (E) of the Labor Code formulation of policies relative thereto. And one such matter is
was violated when PAL unilaterally implemented the Code, and the formulation of a code of discipline.
cited provisions of Articles IV and I of Chapter II of the Code as - Indeed, industrial peace cannot be achieved if the employees
defective for, respectively, running counter to the construction of are denied their just participation in the discussion of matters
penal laws and making punishable any offense within PAL's affecting their rights. Thus, even before Article 211 of the Labor
contemplation. These provisions are the following: Code (P.D. 442) was amended by Republic Act No. 6715, it was
- Section 2. Non-exclusivity. -- This Code does not contain the already declared a policy of the State: "(d) To promote the
entirety of the rules and regulations of the company. Every enlightenment of workers concerning their rights and obligations
employee is bound to comply with all applicable rules, . . .as employees." This was, of course, amplified by Republic Act
regulations, policies, procedures and standards, including No. 6715 when it decreed the "participation of workers in
standards of quality, productivity, and behaviour, as issued and decision and policy making processes affecting their rights,
promulgated by the company through its duly authorized duties and welfare." PAL's position that it cannot be saddled with
officials. Any violations thereof shall be punishable with a the "obligation" of sharing management prerogatives as during
penalty to be determined by the gravity and/or frequency of the the formulation of the Code, Republic Act No. 6715 had not yet
offense. been enacted (Petitioner's Memorandum, p. 44; Rollo, p. 212),
- Section 7. Cumulative Record. -- An employee's record of cannot thus be sustained. While such "obligation" was not yet
offenses shall be cumulative. The penalty for an offense shall be founded in law when the Code was formulated, the attainment of
determined on the basis of his past record of offenses of any a harmonious labor-management relationship and the then
nature or the absence thereof. The more habitual an offender already existing state policy of enlightening workers concerning
has been, the greater shall be the penalty for the latest offense. their rights as employees demand no less than the observance
Thus, an employee may be dismissed if the number of his past
Labor Law 1 A2010 - 34 - Disini
of transparency in managerial moves affecting employees' Complainant-appellant’s prolonged absences, although
rights. unauthorized, may not amount to gross neglect or abandonment
Disposition Petition dismissed. of work to warrant outright termination of employment.
Dismissal is too severe a penalty...Reliance on the ruling
enunciated in the cited case of Shoemart is quite misplaced
because of the obvious dissimilarities-- complainant in the
FEDERATION OF LABOR UNIONS (NAFLU) Shoemart Case was “an inveterate absentee who does not
DAVIDE, JR; April 17, 1997 deserve reinstatement” compared to herein complainant-
appellant who is a first offender
A special civil action for certiorari seeking the reversal of the ISSUE
decision of the National Labor Relations Commission (NLRC) WON the NLRC committed grave abuse of discretion in modifying
which modified the decision of the Labor Arbiter by directing the the decision of the Labor Arbiter
reinstatement of private respondent Antonio D. Estrada, the
complainant, without loss of seniority rights and benefits. HELD
FACTS Ratio a) Petitioner’s finding that complainant was guilty of
- Private respondent NAFLU, a co-complainant in the labor case, abandonment is misplaced. Abandonment as a just and valid
is a labor union of which complainant is a member. ground for dismissal requires the deliberate, unjustified refusal
- Complainant was first employed by Brew Master on 16 of the employee to resume his employment. Two elements must
September 1991 as route helper with the latest daily wage of then be satisfied: (1) the failure to report for work or absence
P119.00. without valid or justifiable reason; and (2) a clear intention to
- From 19 April 1993 up to 19 May 1993, for a period of 1 month, sever the employer-employee relationship.
complainant went on absent without permission (AWOP). b) Verily, relations between capital and labor are not merely
- On 20 May 1993, Brew master sent him a Memo: “Please contractual. They are impressed with public interest and labor
explain in writing within 24 hours of your receipt of this memo contracts must, perforce, yield to the common good.
why no disciplinary action should be taken against you for the While the employer is not precluded from prescribing rules and
following offense: You were absent since April 19, 1993 up to regulations to govern the conduct of his employees, these rules
May 19, 1993.” and their implementation must be fair, just and reasonable.
- In answer to the aforesaid memo, complainant explained: Reasoning
“Sa dahilan po na ako ay hindi nakapagpaalam sainyo dahil - complainant’s absence was precipitated by a grave family
inuwi ko ang mga anak ko sa Samar dahil ang asawa ko ay problem as his wife unexpectedly deserted him and abandoned
lumayas at walang mag-aalaga sa mga anak ko. Kaya naman the family. Considering that he had a full-time job, there was no
hindi ako naka long distance or telegrama dahil wala akong pera one to whom he could entrust the children and he was thus
at ibinili ko ng gamot ay puro utang pa.” compelled to bring them to the province. He was then under
- Finding said explanation unsatisfactory, the company issued a emotional, psychological, spiritual and physical stress and
Notice of Termination: “...we regret to inform you that we do not strain. The reason for his absence is, under these
consider it valid. You are aware of the company Rules and circumstances, justified. While his failure to inform and seek
Regulations that absence without permission for 6 consecutive petitioner's approval was an omission which must be corrected
working days is considered abandonment of work...” and chastised, he did not merit the severest penalty of dismissal
- Complainants contend that individual complainant’s dismissal from the service.
was done without just cause; that it was not sufficiently - the elements of abandonment are not present here. First, as
established that individual complainant’s absence from April 19, held above, complainant's absence was justified under the
1993 to June 16, 1993 are unjustified; that the penalty of circumstances. As to the second requisite, complainant
dismissal for such violation is too severe; that in imposing such immediately complied with the memo requiring him to explain
penalty, respondent should have taken into consideration his absence, and upon knowledge of his termination,
complainant’s length of service and as a first offender, a penalty immediately sued for illegal dismissal. These plainly refuted any
less punitive will suffice such as suspension for a definite period. claim that he was no longer interested in returning to work.
- Upon the other hand, respondent contends that individual - our Constitution looks with compassion on the workingman and
complainant was dismissed for cause allowed by the company protects his rights not only under a general statement of a state
Rules and Regulations and the Labor Code; that the act of policy, but under the Article on Social Justice and Human Rights,
complainant in absenting from work for 1 month without official thus placing labor contracts on a higher plane and with greater
leave is deleterious to the business of respondent; that it will safeguards.
result to stoppage of production which will not only destructive - While we do not decide here the validity of petitioner's Rules
to respondent’s interests but also to the interest of its and Regulations on continuous, unauthorized absences, what is
employees in general; that the dismissal of complainant from the plain is that it was wielded with undue haste resulting in a
service is legal. deprivation of due process, thus not allowing for a determination
- The Labor Arbiter dismissed the complaint for lack of merit, of just cause or abandonment. In this light, petitioner's dismissal
citing the principle of managerial control, which recognizes the was illegal. This is not to say that his absence should go
employer’s prerogative to prescribe reasonable rules and unpunished, as impliedly noted by the NLRC in declining to
regulations to govern the conduct of his employees. He relied award back wages.
on Shoemart, Inc. vs. NLRC: “...that individual complainant has Disposition petition is hereby DISMISSED and the decision of
indeed abandoned his work... therefore, under the law and the NLRC is hereby AFFIRMED.
jurisprudence which upholds the right of an employer to
discharge an employee who incurs frequent, prolonged and PT&TC V NLRC
unexplained absences as being grossly remiss in his duties to
the employer and is therefore, dismissed for cause. An
REGALADO; May 23, 1997
employee is deemed to have abandoned his position or to have
resigned from the same, whenever he has been absent NATURE
therefrom without previous permission of the employer for three PT&TC seeks relief through certiorari on decision of NLRC
consecutive days or more. “
- the NLRC modified the Labor Arbiter's decision and held that FACTS
complainant’s dismissal was invalid for the following reasons: - Private respondent Grace De Guzman (GdG) was initially hired
by PTTC, on 3 separate occasions, to relieve 2 of its employees
Labor Law 1 A2010 - 35 - Disini
who went on maternity leave. The Reliever Agreement stated in the initiatory pleadings that petitioner was represented in this
that her employment was to be immediately terminated upon case only by its said supervisor and not by its highest ranking
expiration of the agreed period. officers who would otherwise be solidarily liable with the
- She was later asked to join the company as a probationary corporation.
employee with the probation period covering 150 days. On her - The government abhors any stipulation or policy in the nature
application form, she indicated that her civil status was single of that adopted by petitioner PT&T. The Labor Code states, in no
although she had contracted marriage 3 months earlier. uncertain terms, as follows:
- Upon discovery, PTTC, through its Baguio branch supervisor, “ART. 136. Stipulation against marriage. - It shall be unlawful
sent a memorandum to GdG requiring her to explain the for an employer to require as a condition of employment or
discrepancy and reminding her of the company’s policy of not continuation of employment that a woman shall not get
accepting married women for employment. GdG, in her response married, or to stipulate expressly or tacitly that upon getting
dated Jan.17, ’92, explained that she was not aware of such a married, a woman employee shall be deemed resigned or
policy and that she had not deliberately hidden her true civil separated, or to actually dismiss, discharge, discriminate or
status. otherwise prejudice a woman employee merely by reason of
- PTTC was unconvinced and dismissed GdG on Jan. 29, ’92 marriage.”
which GdG then contested before the regional arbitration branch - In Zialcita, et al. vs. Philippine Air Lines, a PAL policy requiring
of the NLRC in Baguio through a complaint for illegal dismissal. that prospective flight attendants must be single and that they
PTTC claimed that the dismissal was due to the fact that she had will be automatically separated from the service once they marry
concealed her civil status not because of the fact that she was was declared void, it being violative of the clear mandate in
married. Article 136 of the Labor Code with regard to discrimination
- The Labor Arbiter handed down a decision declaring that GdG, against married women. In Gualberto, et al. vs. Marinduque
who had already gained the status of a regular employee, was Mining & Industrial Corporation, the Court of Appeals considered
illegally dismissed by petitioner. Her reinstatement, plus a policy of the same nature, as repugnant to the Civil Code,
payment of the corresponding back wages and COLA (cost of Presidential Decree No. 148 and the Constitution and therefore
living allowances), was ordered, with the view that the ground void and unlawful.
relied upon by petitioner in dismissing private respondent was Disposition The petition is dismissed for lack of merit.
clearly insufficient, and that it was apparent that she had been
discriminated against on account of her having contracted GENERAL BANK AND TRUST CO V CA
marriage in violation of company rules
GUTIERREZ JR; April 9, 1985
- PTTC appealed but the NLRC upheld the decision of the labor
arbiter with only the modification that GdG deserved to be
suspended for three months in view of the dishonest nature of FACTS
her acts. The subsequent MFR by PTTC was likewise rebuffed by - plaintiff-appellee was employed with the Cebu Branch of the
NLRC hence this special civil action. First National City Bank of New York for 18 years, where he rose
to the position of Chief Clerk, Accounting Department
ISSUE - on January 11, 1965, plaintiff-appellee joined the defendant
WON the PTTC erred in dismissing GdG bank in its Cebu branch as accountant with an annual
compensation of P6,000.00
- April 26, 1965, the Cebu Branch of defendant bank began
HELD operating and doing business with the public
1. YES - January 1, 1966, plaintiff received an increase of P50.00
Ratio An employer is required, as a condition sine qua non prior bringing his monthly salary to P550.00
to severance of the employment ties of an individual under his - April 11, 1967 defendant bank appointed the plaintiff to the
employ, to convincingly establish, through substantial evidence, position of Acting Manager of its Cebu Branch, with the
the existence of a valid and just cause in dispensing with the corresponding increase of salary to P700.00 a month
services of such employee, one’s labor being regarded as - effective September 1, 1967, defendant bank granted plaintiff
constitutionally protected property. a monthly housing allowance of P200.00 in addition to his
- On the other hand, an employer is free to regulate, according monthly salary
to his discretion and best business judgment, all aspects of - October 3, 1967 defendant bank appointed plaintiff as the
employment, “from hiring to firing,” except in cases of unlawful regular Manager of its Cebu Branch effective May 1, 1968
discrimination or those which may be provided by law - defendant bank increased plaintiff's salary to P800.00 a month
Reasoning - May 16, 1969 while the plaintiff was on vacation leave, he
- The petitioner’s policy of not accepting or considering as happened to visit the bank and learned that three tellers of
disqualified from work any woman worker who contracts defendant bank's branch in Cebu City, namely, Miss Crystal
marriage runs afoul of the test of, and the right against, Enriquez, Miss Yolanda Chu, and Miss Sonia Chiu, had been
discrimination, afforded all women workers by our labor laws and transferred to the head office in Manila by defendant Jose D.
by no less than the Constitution. Contrary to petitioner’s Santos
assertion, the record discloses clearly that her ties with the - plaintiff went to Manila on May 18, 1969 to make personal
company were dissolved principally because of the company’s representation with the head office for the retention of the said
policy that married women are not qualified for employment in tellers in Cebu
PT&T, and not merely because of her supposed acts of - May 26, 1969 the plaintiff reported back for duty with
dishonesty. defendant bank's branch in Cebu and reinstated immediately the
- That it was so can easily be seen from the memorandum sent three tellers to their respective positions in the Cebu branch of
to private respondent by the branch supervisor of the company, defendant bank
with the reminder that “you’re fully aware that the company is - May 28, 1969 defendant Jose D, Santos submitted a report to
not accepting married women employee, as it was verbally defendant Salvador D. Tenorio alleging that there was excess
instructed to you.” Again, in the termination notice sent to her by personnel in the Cebu Branch; that on the same date defendant
the same branch supervisor, private respondent was made to Jose D. Santos submitted a supplementary report to defendant
understand that her severance from the service was not only by Salvador D. Tenorio charging the plaintiff of over-appraising the
reason of her concealment of her married status but, over and real estate offered by Domingo Chua as collateral for his credit
on top of that, was her violation of the company’s policy against accommodation; that defendant Salvador D. Tenorio
marriage (“and even told you that married women employees immediately dispatched a letter to the plaintiff dated May 30,
are not applicable or accepted in our company.”) Parenthetically, 1969 requiring him to explain within twenty-four hours why no
this seems to be the curious reason why it was made to appear disciplinary action should be taken against him for alleged
Labor Law 1 A2010 - 36 - Disini
repeated violation of defendant bank's policies and directives short, caused his suspension and later, his dismissal retroactive
regarding credit accommodations and for over-appraisal of the to the date of suspension.
real estate collateral for Domingo Chua's account, among others - There was no valid reason for his dismissal, much less for all
- June 6, 1969, the plaintiff received the said letter of defendant the charges and accusations made against him. The dismissal
Salvador D. Tenorio but found it impossible to render the followed by the efforts to justify it was tainted by bad faith or
required explanation in 24 hours malice on the part of the petitioners who wanted Mr. Batucan
- June 19, 1969 defendant Jose D. Santos went to Cebu City and removed from his post.
served plaintiff with the letter of defendant Salvador D. Tenorio, 2. YES
dated June 18, 1969, suspending the plaintiff; - Moral damages may be justly awarded. Moral damages being
- July 22, 1969 plaintiff was served with the order of his justified, exemplary damages may also be awarded.
termination signed by defendant Clarencio S. Yujuico, dated July - Mr. Batucan left a stable job with a reputable bank to join the
18, 1969." petitioner bank. He had been an employee of the First National
- CFI found the dismissal of plaintiff as without just cause or City Bank of New York for eighteen (18) years. Undoubtedly,
otherwise illegal arbitrary, oppressive and malicious, and before he accepted petitioner Tenorio's invitation, he must have
ordering defendants to pay to the plaintiff, jointly and severally, thought the matter over several times. And from the time he
the following sums: (a) P1,000.00 a month, as consequential joined the petitioner bank, the records show that Mr. Batucan
damages for the loss of his salaries and allowances, from the has indeed worked his way up from accountant to permanent
date of his dismissal until the judgment shall have become final branch manager of the bank. During his term as manager, he
and executory; (b) P2,500.00 as termination pay; (c) P106.63 was able to increase the income and resources of the bank. He
representing unpaid salaries from the 16th to 19th of June 1969; raised the image of petitioner bank in the business and banking
(d) P200,000.00 in concept of moral damages; (e) P50,000.00 as community and placed its operations on a good and competitive
exemplary or corrective damages; (f) P15,000.00 as attorney's basis. His peremptory dismissal from the bank was certainly a
fees; and to pay the costs of the suit." shock to him and damaged his moral feelings and personal pride
– The Court of Appeals affirmed the decision of the lower after all the loyalty and hard work he had dedicated to the bank.
court but modified the judgment by reducing moral Disposition The decision appealed from is MODIFIED to read as
damages to P150,000.00 and exemplary damages to follows:
P30,000.00. The petitioners are hereby ordered to pay to the private
respondent, jointly and severally, the following sums — TWO
ISSUES THOUSAND FIVE HUNDRED PESOS (P2,500.00) termination pay;
1. WON the dismissal of Manuel E. Batucan was justified on the ONE HUNDRED SIX PESOS AND SIXTY THREE CENTAVOS
ground that he repeatedly failed to uphold the interests of the (P106.63) unpaid salaries; TWELVE THOUSAND PESOS
bank thus leading to his employer's loss of confidence on him (P12,000.00) in compensatory damages; TWENTY THOUSAND
2. WON the award of moral and exemplary damages is proper PESOS (P20,000.00) in moral and exemplary damages; and FIVE
THOUSAND PESOS (P5,000.00) attorney's fees.
- There was no error in the finding of the CA that Mr. Batucan
was indeed illegally dismissed.
PUNO; April 12, 2006
- There is no question that managerial employees should enjoy
the confidence of top management. This is especially true in NATURE
banks where officials handle big sums of money and engage in Petition for review on certiorari of a decision of CA
confidential or fiduciary transactions. However, loss of
confidence should not be simulated. It should not be used as a FACTS
subterfuge for causes which are improper, illegal, or unjustified. - Ronaldo Simbol, Wilfreda Comia and Lorna Estrella were all
Loss of confidence may not be arbitrarily asserted in the face of regular employees of Star Paper Corp. Simbol and Comia each
overwhelming evidence to the contrary. It must be genuine, not got married to a co-employee and due to a company policy
a mere afterthought to justify earlier action taken in bad faith. banning spouses (and relatives up to the 3rd degree) from
- All the privileges, commendations, and salary increases negate working in the same company, they resigned from their jobs.
the allegation that the management had lost confidence in Mr. Estrella was impregnated by a married co-employee. She
Batucan. Moreover, there is no evidence that Mr. Batucan likewise lost her job (company said she resigned, Estrella said
granted unauthorized credit accommodations because after the she was dismissed for immoral conduct).
last three exhibits were sent, an internal audit examination was - Respondents allege that they did not resign voluntarily and
conducted on February 11, 1969 by petitioner Santos together they filed a compliant for unfair labor practices, constructive
with the Internal Auditor, Mr. Rosauro Macalagay. In this dismissal, separation pay, and they averred that the company
examination, no unauthorized credit accommodations were policy is illegal and contravenes ART 136 of the Labor Code.
found and brought to the attention of Mr. Batucan. The - CA declared their dismissal as illegal, ordering the company to
management's alleged loss of confidence in Mr. Batucan cannot reinstate them to their former positions and to pay attorney’s
be reconciled with the latter's commendations for efficient fees and cost of the suit.
performance, his having been given an increase in salary and his
being asked to speak to other colleagues on effective banking ISSUES
techniques shortly after the supposed loss of confidence. 1. WON the policy is violative of the constitutional rights
- The only reason for his dismissal found in the records is his towards marriage and the family of employees and of ART 136 of
failure to follow top-management orders with regards to the the Labor Code
transfer of the three tellers. Petitioners alleged it to be 2. WON respondents’ resignations were voluntary
insubordination. Nevertheless, insubordination must be proven
to justify dismissal (St. Luke's Hospital v. Ministry of Labor and HELD
Employment, 116 SCRA 240). His earnest efforts in making 1. YES
representations to retain the three tellers do not warrant his - The questioned policy may not facially violate Article 136 of the
dismissal. A manager or supervisor must stand up for his Labor Code but it creates a disproportionate effect and under the
subordinates unless the latter are guilty of wrongdoing or some disparate impact theory, the only way it could pass judicial
conduct prejudicial to the employer. Only after his scrutiny is a showing that it is reasonable despite the
representations was Mr. Batucan questioned on the several discriminatory, albeit disproportionate, effect. The failure of
"unauthorized credit accommodations." His failure to explain petitioners to prove a legitimate business concern in imposing
within 24 hours which, in the light of the circumstances, was too the questioned policy cannot prejudice the employee’s right to
Labor Law 1 A2010 - 37 - Disini
be free from arbitrary discrimination based upon stereotypes of calendar days within which to appeal a decision of the Labor
married persons working together in one company. Arbiter to the NLRC.
-The absence of a statute expressly prohibiting marital - However the Notice of Decision received by Lariosa’s lawer
discrimination in our jurisdiction cannot benefit the petitioners. advised that an appeal should be taken to the NLRC within ten
The protection given to labor in our jurisdiction is vast and working days from receipt of said decision.
extensive that we cannot prudently draw inferences from the (2) Records show that Lariosa was involved in the attempted
legislature’s silence that married persons are not protected theft of fannel swabs.
under our Constitution and declare valid a policy based on a Ratio There is no gainsaying that theft committed by an
prejudice or stereotype. Thus, for failure of petitioners to present employee constitutes a valid reason for his dismissal by the
undisputed proof of a reasonable business necessity, we rule employer. Although as a rule this Court leans over backwards to
that the questioned policy is an invalid exercise of management help workers and employees continue with their employment or
prerogative. to mitigate the penalties imposed on them acts of dishonesty in
2. Simbol and Comia – MOOT and ACADEMIC the handling of company property are a different matter. If
Estrella - NO there is sufficient evidence that an employee has been guilty of
- Questioned policy is an invalid exercise of management a breach of trust or that his employer has ample reasons to
prerogative. Corollarily, the issue as to whether respondents distrust him, the labor tribunal cannot justly deny to the
Simbol and Comia resigned voluntarily has become moot and employer the authority to dismiss such an employee.
academic. Reasoning
-We have held that in voluntary resignation, the employee is - As a tire builder, Lariosa was entrusted with certain materials
compelled by personal reason(s) to dissociate himself from for use in his job. On the day in question, he was given two
employment. It is done with the intention of relinquishing an bundles of wool flannel swabs [ten pieces per bundle] for
office, accompanied by the act of abandonment. Thus, it is cleaning disks.
illogical for Estrella to resign and then file a complaint for illegal - He used four swabs from one pack and kept the rest [sixteen
dismissal. Given the lack of sufficient evidence on the part of pieces].
petitioners that the resignation was voluntary, Estrella’s - If Lariosa, by his own wrongdoing, could no longer be trusted, it
dismissal is declared illegal. would be an act of oppression to compel the company to retain
Disposition Decision of the Court of Appeals in CA-G.R. SP No. him, fully aware that such an employee could, in the long run,
73477 dated August 3, 2004 is AFFIRMED. endanger its very viability.
- Firestone had valid grounds to dispense with the services of
Lariosa and that the NLRC acted with grave abuse of discretion
in ordering his reinstatement. However, considering that Lariosa
FERNAN; February 27, 1987 had worked with the company for eleven years with no known
previous bad record, the ends of social and compassionate
NATURE justice would be served if he is paid full separation pay but not
Petition for certiorari to review the decision of the National Labor reinstatement without backages as decreed by the NLRC.
Relations Commission Disposition petition is granted. The decision of the National
Labor Relations Commission dated December 28, 1984 is
FACTS reversed and set aside. Petitioner Firestone Tire and Rubber
- Carlos Lariosa worked as a Firestone as a factory worker Company of the Philippines is directed to pay its dismissed
(started January 3, 1972) and later as a tire builder. worker Carlos Lariosa the separation pay to which he may be
- July 27, 1983 – Lariosa was on his way out of the office so he entitled under the law, or any collective bargaining agreement or
had to submit himself to the routine check by security guards company rules or practice, whichever is higher.
(Liao and Olvez) at the gate. In the course of the inspection, 16
wool flannel swabs were found inside his bag, tucked underneath
his soiled clothes. Said swabs were company property.
- Lariosa was terminated on the ground of stealing company PUNO; April 12, 2006
property and loss of trust. A criminal complaint was also filed [PAGE 28]
against him for theft.
- The Labor Arbiter initially found the dismissal to be justified but
on appeal, the NLRC reversed the decision and ordered Lariosa’s
reinstatement but backwages were not to be paid. The period SARMIENTO V TUICO
when he was out of work should be considered suspension. CRUZ; June 27, 1988
Petitioners’ Claim
- Firestone claims that the NLRC erred in not dismissing Lariosa’s FACTS
appeal for being late, in finding that Lariosa was not accorded - Petitioner Asian Transmission Corporation terminated the
due proms and in reversing the Labor Arbiter. services of Catalino Sarmiento, vice-president of the Bisig ng
Respondents’ Comments Asian Transmission Labor Union (BATU), for allegedly carrying a
- Lariosa filed a suit against Firestone for illegal dismissal, deadly weapon in the company premises.
violation of BP Blg. 130 and its related rules and regulations. - BATU filed a notice of strike, claiming that the ATC had
- On reversal upon appeal, the NLRC said that termination was committed an unfair labor practice.
too harsh a penalty. - The ATC then filed a petition asking the Ministry of Labor and
Employment to assume jurisdiction over the matter or certify the
ISSUE same to the NLRC for compulsory arbitration.
WON the decision of the NLRC to reinstate Lariosa was rendered - MOLE issued an order certifying the labor dispute to the NLRC.
with grave abuse of discretion amounting to lack of jurisdiction At the same time, it enjoined the management from locking out
its employees and the union from declaring a strike or similar
HELD concerted action.
(1) The particular procedural lapse may be overlooked. - Proceedings could not continue in the NLRC, however, because
Ratio The shortened period for appeal is principally intended for of the acceptance by President Aquino of the resignations of
the employees’ benefit rather than that of the employer. eight of its members, leaving only the vice-chairman in office.
Reasoning - MOLE, set aside the previous orders and directly assumed
- Lariosa’s appeal was filed on June 7, 1984 or after the lapse of jurisdiction of the dispute, at the same time enjoining the
fourteen days from notice of the decision of the Labor Arbiter. company to accept all returning workers.
The Labor Code provide for a reglementary period of ten
Labor Law 1 A2010 - 38 - Disini
- This order was later set aside upon motion of both the BATU disrupted by a refusal of the strikers to return to work as
and the ATC in view of the appointment of new commissioners in directed. More particularly, it is the national economy that will
the NLRC. The MOLE then returned the case to the respondent suffer because of the resultant reduction in our export earnings
NLRC and directed it to expeditiously resolve all issues relating and our dollar reserves, not to mention possible cancellation of
to the dispute. the contracts of the company with foreign importers.
- Conformably, the NLRC issued on January 13, 1987 a - It is also important to emphasize that the return-to-work order
resolution, which it affirmed in its resolution of February 12, not so much confers a right as it imposes a duty; and while as a
1987, denying the motion for reconsideration. right it may be waived, it must be discharged as a duty even
- Three criminal complaints filed against the petitioning workers, against the worker's will. Returning to work in this situation is
two by the personnel administrative officer of the ATC and the not a matter of option or voluntariness but of obligation
third by the Philippine Constabulary. 2. YES
- The first two complaints, were for "Violation of Article 265, par. - The Court held that while as a general rule the prosecution of
1, in relation to Article 273 of the Labor Code of the Philippines." criminal offenses is not subject to injunction, the exception must
The third, was for coercion. In all three complaints, the apply in the case at bar. The suspension of proceedings in the
defendants were charged with staging an illegal strike, criminal complaints filed is justified on the ground of prematurity
barricading the gates of the ATC plant and preventing the as there is no question that the acts complained of are
workers through intimidation, harassment and force from connected with the compulsory arbitration proceedings still
reporting for work. pending in the NLRC.
- Judge Orlando Tuico issued a warrant of arrest against the - The three criminal cases should be suspended until the
petitioners and committed 72 of them to jail although he later completion of the compulsory arbitration proceedings in the
ordered the release of 61 of them to the custody of the NLRC, conformably to the policy embodied in Circular No. 15,
municipal mayor of Calamba, Laguna. series of 1982, and Circular No. 9, series of 1986, issued by the
- The petitioners had earlier moved for the lifting of the warrant Ministry of Justice in connection with the implementation of B.P.
of arrest and the referral of the coercion charge to the NLRC and, Blg. 227. These circulars, briefly stated, require fiscals and other
later, for the dismissal of Criminal Cases on the ground that they government prosecutors to first secure the clearance of the
came under the primary jurisdiction of the NLRC. Ministry of Labor and/or the Office of the President "before
taking cognizance of complaints for preliminary investigation
ISSUES and the filing in court of the corresponding informations of cases
1. WON a return-to-work order may be validly issued by the arising out of or related to a labor dispute," including
National Labor Relations Commission pending determination of "allegations of violence, coercion, physical injuries, assault upon
the legality of the strike a person in authority and other similar acts of intimidation
2. WON, pending such determination, the criminal prosecution of obstructing the free ingress to and egress from a factory or place
certain persons involved in the said strike may be validly of operation of the machines of such factory, or the employer's
restrained premises."
- It does not appear from the record that such clearance was
HELD obtained, conformably to the procedure laid down "to attain the
1. YES industrial peace which is the primordial objectives of this law,"
- The question of competence is easily resolved. The authority before the three criminal cases were filed.
for the order is found in Article 264(g) of the Labor Code, as
amended by B.P. Blg. 227, which provides as follows: - When in
his opinion there exists a labor dispute causing or likely to cause
strikes or lockouts adversely affecting the national interest, such GANCAYCO; May 6, 1991
as may occur in but not limited to public utilities, companies
engaged in the generation or distribution of energy, banks, FACTS
hospitals, and export- oriented industries, including those within - Nilda S. Jacinto is a PCI Bank (NAIA branch) customer relation
export processing zones, the Minister of Labor and Employment assistant (CRA) who acts as alternate FX Clerk or Teller.
shall assume jurisdiction over the dispute and decide it or certify - 1 May 1984: PCIB discovered the loss of some travelers checks
the same to the Commission for compulsory arbitration. Such amounting to P 25,325.00 in peso equivalent transacted 30 April
assumption or certification shall have the effect of automatically 1984. As Jacinto acted as FX clerk on said day, an investigation
enjoining the intended or impending strike or lockout as was conducted by PCIB allowing Jacinto and other personnel to
specified in the assumption order. If one has already taken place explain their side.
at the time of assumption or certification, all striking or locked - Jacinto was found guilty of gross negligence, meted a 10-day
out employees shall immediately return to work and the suspension w/o pay (7-20 May 1984), and required to pay the
employer shall immediately resume operations and readmit all loss by way of salary deductions (P200/month + 50% of mid-year
workers under the same terms and conditions prevailing before & Xmas bonus and profit sharing). She was transferred to the
the strike or lockout. The Minister may seek the assistance of Baclaran branch, 21 May 1984.
law-enforcement agencies to ensure compliance with this - 14 Aug 1986: Jacinto filed a complaint with NLRC questioning
provision as well as such orders as he may issue to enforce the her suspension, penalty and transfer of assignment.
same. - 19 Feb 1988: The labor arbiter found the 10day suspension and
- There can be no question that the MOLE acted correctly in the deductions to be unjustified and ordered PCIB to erase from
certifying the labor dispute to the NLRC, given the predictable Jacinto's 201 file said suspension and to return to her the
prejudice the strike might cause not only to the parties but more amount so far deducted from her salary, bonuses and 13th
especially to the national interest. Affirming this fact, we month pay. PCIB was further directed to return Jacinto to her
conclude that the return-to-work order was equally valid as a former assignment at MIA branch, if she so prefers. PCIB
statutory part and parcel of the certification order issued by the appealed.
MOLE on November 24, 1986. The challenged order of the NLRC - 23 Oct 1989: NLRC affirmed the appealed decision with the
was actually only an implementation of the above provision of only modification that the transfer of Jacinto was found to be an
the Labor Code and a reiteration of the directive earlier issued appropriate prerogative of management. Hence, this petition for
by the MOLE in its own assumption order of September 9, 1986. certiorari with a prayer for the issuance of a writ of preliminary
- It must be stressed that while one purpose of the return-to- injunction.
work order is to protect the workers who might otherwise be
locked out by the employer for threatening or waging the strike, ISSUE
the more important reason is to prevent impairment of the [responsibility of a bank employee for the loss of certain funds of
national interest in case the operations of the company are the bank]
Labor Law 1 A2010 - 39 - Disini
WON NLRC gravely abused its discretion in holding that gross declaredOPEN TERRITORY to all sales representatives
negligence cannot be attributed to Jacinto as she was not including the one who reported the cancellation;
formally designated to perform the functions of an FX clerk 2. If not renewed during said open territory period,
said cancelled accounts were deemed no longer "open
HELD territory," and the same could be referred for handling
1. YES to contractual salespersons and/or outside agencies.
Ratio Any employee who is entrusted with responsibility by his - A new "Sales Evaluation and Production Policy" was thereafter
employer should perform the task assigned to him with care and drawn up. GTE informed all its sales representatives of the new
dedication. The lack of a written or formal designation should not policy in a Memorandum dated October 12, 1984.
be an excuse to disclaim any responsibility for any damage - The new policy did not sit well with the union. The Union
suffered by the employer due to his negligence. The measure of demanded that it be given 15 days to raise questions or
the responsibility of an employee is that if he performed his objections. This, GTE granted, and by letter dated October 26,
assigned task efficiently and according to the usual standards, 1984, the union submitted its proposals for "revisions,
then he may not be held personally liable for any damage arising corrections and deletions of some policies incorporated in the
therefrom. Failing in this, the employee must suffer the Sales Administrative Practices issued on June 14, 1984 including
consequences of his negligence if not lack of due care in the the new policies recently promulgated by Management."
performance of his duties. - GTE next formulated a new set of "Sales Administrative
- NAIA branch OIC, Mr. Gilberto C. Marquez, verbally requested Practices," pursuant to which it issued on July 9, 1985, a
Jacinto to assume the duties of the FX Clerk who was on leave memorandum requiring all Premise Sales Representatives (PSRs)
(no written memo of assignment). Jacinto accepted the request; to submit individual reports reflecting target revenues as of
she herself stated that she received the travellers checks, made deadlines, set at August 2, 1985. This was superseded by
the proof sheet thereof, and thereafter pllaced the checks and another memorandum dated July 16, 1985, revising the previous
proof sheet in the FX cash box. The following day, she reported schedules on the basis of "the consensus reached after several
the loss of said travellers checks from the FX cash box. discussions with your DSMs, as well as, most of you," The
- Although she claimed to have prepared the proof sheet, none amount required initially (P30K) was reduced to P20K
was found in the box. She did not microfilm the checks as a - Following this requirement, some Premise Sales
matter of course. She did not formally endorse the FX box to the Representatives (members of the union) omitted to submit
night shift FX clerk or to the cashier. More so, considering that reports regarding the P20K revenue. GTE again demanded for
she knew the lock of the box was defective. By and large, the the said reports in another Memorandum, but as before the PSR
finding of PCIB that Jacinto was grossly negligent is well-taken. refused to comply.
- Jacinto's 10-day suspension w/o pay is a proper penalty in - August 6, 1985: the union filed in behalf of the sales
accordance with the prescribed rules of PCIB. But, since PCIB is representatives, a notice of strike grounded on alleged
guilty of contributory negligence in failing to have the lock of FX unfair labor practices of GTE consisting of the following:
box fixed and to have taken other security measures in the bank 1. Refusal to bargain on unjust sales policies;
premises, the penalty of reimbursement of the full value of the 2. Open territory of accounts;
loss is mitigated by requiring Jacinto to reimburse the petitioner 3. Illegal suspension of Brian Pineda, a union officer;
only 1/2 of the loss by way of salary deduction. 4. Non-payment of eight days’ suspension pay increase.
Disposition Petition GRANTED. NLRC decision reversed and set - On the same day GTE sent another Memorandum to 16 PSRs.
aside. Jacinto's complaint dismissed. Pebalty modified: Jacinto is No compliance was made. GTE thereupon suspended its sales
required to indemnify PCIB the amount of P 12,600.00 through representatives "without pay effective August 12, 1985 for five
regular payroll deductions. (5) working days" and warned them that their failure to submit
the requisite reports by August 19, 1985 would merit "more
GTE DIRECTORIES CORP. V SANCHEZ drastic disciplinary actions." Still, no sales representative
complied with the requirement to submit the reports. So, by
NARVASA; May 27, 1991
memorandum of the Marketing Director dated August 19, 1985,
all the sales representatives concerned were suspended anew
effective August 20, 1985 until the submitted the report.
Petition for certiorari to review the order of the Department of
- GTE gave its sales representatives an ultimatum. By
Labor and Employment.
memorandum dated August 23, 1985, GTE required them for the
last time, to submit the required reports within twenty-four (24)
hours from receipt of the memorandum; otherwise they would
- GTE Directories Corporation (GTE) is a foreign corporation
be terminated "for cause.”
engaged in the Philippines in the business of publishing the PLDT
- August 29, 1985: GTE terminated the employment of the
telephone directories for Metro Manila and several provinces.
recalcitrant sales representatives (14), with the undertaking to
- The practice was for its sales representatives to be given work
give them "separation pay, upon proper clearance and
assignments within specific territories by the so-called "draw
submission of company documents, material etc., in . . . (their)
method." These sales territories were so plotted or mapped out
possession." On September 2, 1985, the union declared a strike
to have an equal number of advertisers as well as revenue.
in which about 60 employees participated.
Within these territories, the sales representatives therein
Petitioner’s Claim
assigned were given quotas.
GTE should have been commanded: (a) to pay all striking
- Increments were given by the so-called "Grid System," grids
employees their usual salaries, allowances, commission and
within each territory usually numbering five. Each grid was
other emoluments corresponding to the period of their strike; (b)
assigned a fixed closing date. At such closing date, a
to release to its employees the 8-days pay increase unlawfully
salesperson should have achieved a certain amount of the
withheld from them; (c) to lift the suspension imposed on Brian
revenue target designated for his grid; otherwise, he loses the
Pineda and restore to him the pay withheld corresponding to the
forthcoming grid or forfeits the remaining grids not yet received.
suspension period; (d) to pay the sales representatives all their
- June, 1984: GTE realized that competition among media for a
lost income corresponding to the period of their suspensions,
share of the advertising revenue had stepped up. GTE launched
and dismissal, including commissions that they might have
an aggressive campaign to get what it considered to be its
earned corresponding to their one-week forced leave.
rightful share of the advertising budget of its clientele before it
Respondents’ Comment
could be allocated to other media. Among the actions taken
The termination of the employment of its fourteen (14) premise
sales representatives prior to the strike should have been
1. If the cancelled revenue accounts were not
upheld. It also filed an opposition to the union's motion for
renewed within the assigned period, said accounts were
Labor Law 1 A2010 - 40 - Disini
Petition for Review on Certiorari of the Decision of the National
ISSUE Labor Relations Commission
WON the union's objections to, or request for reconsideration of
those regulations or policies automatically suspend enforcement FACTS
thereof and excuse the employees' refusal to comply with the - On August 18, 1986, the private respondents filed with the
same MOLE a complaint for illegal dismissal against petitioner Arturo
S. Lagniton, Sr., proprietor of a company manufacturing shoes
HELD and other leather products.
Ratio So long as a company's management prerogatives are - In his defense, Lagniton argued that complainant Generoso
exercised in good faith for the advancement of the employer's Ambrosio was not employed by the company but a mere sub-
interest and not for the purpose of defeating or circumventing contractor. Even if considered a regular employee, he was
the rights of the employees under special laws or under valid nevertheless validly dismissed because of his poor workmanship,
agreements, this Court will uphold them7 which amounted to serious misconduct or gross and habitual
Reasoning neglect. The other complainants, although concededly
- Even as the law is solicitous of the welfare of the employees, it employees, were not dismissed but simply discontinued
must also protect the right of an employer to exercise what are reporting for work beginning August 11, 1986, and thus
clearly management prerogatives. The free will of management abandoned their employment.
to conduct its own business affairs to achieve its purpose cannot - Labor Arbiter Isabel P. Ortiguerra rendered a decision holding
be denied. that Ambrosio was an employee of the company because his
- “Except as limited by special laws, an employer is free work as a sole-stitcher was necessary to its business and that he
to regulate, according to his own discretion and worked regular hours under its supervision and control. He and
judgment, all aspects of employment, including hiring, work the other complainants, whose status as regular employees was
assignments, working methods, time, place and manner of work, not questioned, had indeed not abandoned their work but were
tools to be used, processes to be followed, supervision of in fact illegally dismissed by Lagniton. This decision was affirmed
workers, working regulations, transfer of employees, work in toto by the NLRC in a resolution dated September 14, 1988. It
supervision, lay-off of workers and the discipline, dismissal and is contended that the NLRC and the Labor Arbiter committed
recall of work. . . .” grave abuse of discretion in the finding that the private
- In the case of GTE, it must thus be conceded that its adoption respondents were illegally dismissed and were entitled to
of a new "Sales Evaluation and Production Policy" was within its separation pay and the ECOLA.
management prerogative to regulate, according to its own
discretion and judgment, all aspects of employment, including ISSUE
the manner, procedure and processes by which particular work 1. WON the complainants were illegally dismissed
activities should be done. There were, to be sure, objections 2. WON the complainants are entitled to the ECOLA
presented by the union, i.e., that the schedule had not been
"drawn (up) as a result of an agreement of all concerned," that HELD
the new policy was incomprehensible, discriminatory and 1. NO
whimsical, and "would result to further reduction" of the sales Ratio The complaint for illegal dismissal was filed only seven
representatives' compensation. days after the complainants allegedly abandoned their work on
- The Court failed to see how the objections and accusations August 11, 1986. Such dispatch in protesting their separation
justify the deliberate and stubborn refusal of the sales belies the claimed abandonment. We also agree that given the
representatives to obey the management's simple requirement hardship of the times, the complainants would not simply have
for submission by all PSRs of individual reports or memoranda left their work unless they were transferring to other
requiring reflecting target revenues which it addressed to the employment offering better terms and conditions. There is no
employees concerned no less than six (6) times. evidence of such transfer. As it has been established that the
- To sanction disregard or disobedience by employees of a rule workers did not abandon their work, it follows that their
or order laid down by management, on the pleaded theory that dismissal was illegal for lack of notice and hearing.
the rule or order is unreasonable, illegal, or otherwise irregular 2. YES
for one reason or another, would be disastrous to the discipline Ratio The position of the petitioner is that the complainants
and order that it is in the interest of both the employer and his (who did not have fixed salaries and were paid by the piece) are
employees. Deliberate disregard or disobedience of rules, not entitled to this benefit because it is available only to workers
defiance of management authority cannot be countenanced. earning less than P1,500.00 a month. Since, by the
- Minister Sanchez however found GTE to have "acted evidently complainants' own admission, they were earning an average of
in bad faith" in firing its 14 salespersons "for alleged violations of P1,000.00 a week, they are clearly not covered by P.D. 1634.
the reportorial requirements of its sales policies which was then Under that decree, only workers earning a monthly salary of not
the subject of conciliation proceedings between them;" while the more than P1,500.00 may claim payment of the ECOLA.
company, in merely implementing its challenged sales policies However, the figure cited by the petitioner represents only the
did not ipso facto commit an unfair labor practice, it did so when peak income of the workers and does not reflect their monthly
it in mala fide dismissed the fourteen salesmen, all union pay during the lean seasons, when they did not produce as much
members, while conciliation proceedings were being conducted and so earned less, at about P350.00 a week or P55.00 a day. On
Disposition Petition is granted, and the order of the public the average, as the NLRC determined, the complainants were
respondent is nullified and set aside. receiving less than P1,500.00 a month and so came under the
provision of the decree.
Disposition Petition dismissed.
CRUZ; February 5, 1993 Petition for certiorari

- Petitioner Rosario Maneja. Worked with private respondent
7 Manila Midtown Hotel as a telephone operator. She was also a
LVN, Pictures Workers vs. LVN, 35 SCRA 147
Labor Law 1 A2010 - 41 - Disini
member of the National Union of Workers, Restaurants and grievance machinery or voluntary arbitrators. In the case at bar,
Allied Industries (NUWHRAIN) with an existing CBA with the the union does not come into the picture, as the practice in said
private respondent. Hotel in cases of termination is that they are not referred
- ON Feb. 13, 1990, Rowena Loleng, a telephone operator, anymore to the grievance committee;” and that “the terminated
received a Request for Long Distance Call (RLDC) form and a employee who wishes to question the legality of his termination
deposit of P500 from a pageboy for a Japanese guest Hirota Ieda. usually goes to the Labor Arbiter for arbitration, whether the
The call was unanswered and the P500 was forwarded to the termination arose from the interpretation or enforcement of the
cashier. Later, Ieda again made an RLDC and the P500 deposit company personnel policies or otherwise.
was collected and given to Loleng. It was also unanswered - The petitioner also points out that respondent NLRC should
- On feb 15, the cashier inquired about the P1000 deposit made. have ruled that private respondent is estopped in questioning
After a search, the first one was found in the guest folio while the jurisdiction of the Labor Arbiter, since there as active
the other in te folder for cancelled calls. Petitioner saw that the participation of the private respondent, coupled with his failure
2nd RLDC form was not time stamped and placed it the machine to object to the jurisdiction of the court.
to stamp it with the date of Feb 15. But after realizing that the 2. NO
call was made 2 days before, she wrote on it and changed it to - The requisites of a valid dismissal are (1) the dismissal must be
Feb 13. for any of the causes expressed in Article 282 of the Labor Code,
- On Mar 7, the chief telephone operator asked the petitioner and (2) the employee must be given an opportunity to be heard
and Loleng to explain the Feb 15 incident. They submitted their and to defend himself.
written explanation. - petitioner blames respondent for failure to abide by the
- On Mar 20, a written report was submitted, saying that their established procedure. etitioner, however, explained that the
actions were covered violations of the Offenses Subject to usual or established procedures are not followed by the
Disciplinary Action as 1)forging falsifying official documents operators and hotel employees when circumstances warrant.
2)culpable carelessness and negligence or failure to follow For instance, the RLDC forms and the deposits are brought by
established procedure. On march 23, petitioner was then served the page boy directly to the operators instead of the cashiers if
notice of dismissal effective on April 1. She refused to sign and the latter are busy and cannot attend to the same. Furthermore,
wrote therein “under protest” she avers that the telephone operators are not conscious of the
- Criminal charges for falsification was charged against her. serial numbers in the RLDCs and at times, the used RLDCs are
However, the resolution recommending the filing of the case was recycled. Even the page boys do not actually check the serial
reversed by the 2nd asst. city prosecutor. numbers of all RLDCs in one batch, except for the first and the
- On Oct 2,1990, petitioner filed a complaint for illegal dismissal last.
against the respondent before the labor arbiter. The Labor - On the charge of taking money, it to be noted that the second
arbiter found that the petitioner was illegally dismissed, stating deposit was found in the folder for cancelled calls, thus there is
that even though the case revolves on the matter of no basis for personal appropriation by the petitioner.
implementation and interpretation of company policies and is - On the tampering of the RLDC form, it was only done to reflect
thus within the jurisidictional ambit of the grievance procedure the true date of the transaction. Also, under the OSDA,
under the CBA, Art 217 of the Labor Code confers original and infractions of this sort is not without qualifications must result to
exclusive jurisidiction of all termination cases to the Labor loss or damage to company property. There was no proof
Arbiter. whatsoever in the case at bar, except the general allegations
- Respndent appealed the decision to the NLRC. The NLRC made in the company’s position paper and other pleadings. In
dismissed the case for lack of jurisdiction of the Labor arbiter the same tenor, the respondent’s charge under OSDA 1.11 on
because the same should have been instead subject to voluntary the alleged falsification of private document is also with a
arbitration. qualification, in that the alleged act of falsification must have
been done ‘in such a way as to mislead the users thereof.’
ISSUES Again, based on the facts of the complained act, there appeared
1. WON the Labor Arbiter had jurisdiction to decide the case no one to have been misled on the change of date from RLDC
2. WON the petitioner was illegally dismissed form 15 to 13 February 1990.
- An examination of the record reveals that no hearing was ever
HELD conducted by private respondent before petitioner was
1. YES dismissed. While it may be true that petitioner submitted a
- The NLRC’s interpretation of Art 217c of the Labor Code is written explanation, no hearing was actually conducted before
erroneous. Even though such provision provides that labor her employment was terminated. She was not accorded the
arbiters have no jurisidiction over cases arising from opportunity to fully defend herself. Petitioner’s right to due
interpretation and implementation of CBAs (must be submitted process was clearly violated.
to the grievance machine or voluntary arbitration), it must be Disposition Decision of the NLRC reversed. Decision of the
read in conjuction with Art 261 which grants voluntary labor arbiter is reinstated.
arbitrators original and exclusive jurisdiction to hear and decide
all unresolved grievances arising from the interpretation or
implementation of the collective bargaining agreement and
those arising from the interpretation or enforcement of company SANDOVAL-GUTIERREZ; July 8, 2004
personnel policies. Note the phrase “unresolved grievances.” In
the case at bar, the termination of petitioner is not an NATURE
unresolved grievance. Petition for review on certiorari
- According to the Sanyo case, there is the dismissal does not
involve an “interpretation or implementation” of a Collective FACTS
Bargaining Agreement or “interpretation or enforcement” of - Special Steel Products, Inc., petitioner, is a domestic
company personnel policies but involves “termination.” Where corporation engaged in the principal business of importation,
the dispute is just in the interpretation, implementation or sale, and marketing of BOHLER steel products. Lutgardo C.
enforcement stage, it may be referred to the grievance Villareal and Frederick G. So, respondents, worked for petitioner
machinery set up in the Collective Bargaining Agreement or by as assistant sales manager and salesman, respectively.
voluntary arbitration. Where there was already actual - Sometime in May 1993, respondent Villareal obtained a car
termination, i.e., violation of rights, it is already cognizable by loan from the Bank of Commerce, with petitioner as surety, as
the Labor Arbiter. shown by a “continuing suretyship agreement” and “promissory
- Also, from article 260, it can be deduced that only disputes note” wherein they jointly and severally agreed to pay the bank
involving the union and the company shall be referred to the P786,611.60 in 72 monthly installments. On January 15, 1997,
Labor Law 1 A2010 - 42 - Disini
respondent Villareal resigned and thereafter joined Hi-Grade - Based on the above distinction, it appears that the contract
Industrial and Technical Products, Inc. as executive vice- executed by petitioner and respondent Villareal (in favor of the
president. Bank of Commerce) is a contract of surety. In fact, it is
- Sometime in August 1994, petitioner “sponsored” respondent denominated as a “continuing suretyship agreement.” Hence,
Frederick So to attend a training course in Kapfenberg, Austria petitioner could not just unilaterally withhold respondent’s
conducted by BOHLER, petitioner’s principal company. This wages or benefits as a preliminary remedy under Article 2071. It
training was a reward for respondent So’s outstanding sales must file an action against respondent Villareal. Thus, the
performance. When respondent returned nine months Appellate Court aptly ruled that petitioner “may only protect its
thereafter, petitioner directed him to sign a memorandum right as surety by instituting an ‘action to demand a security’.”
providing that BOHLER requires trainees from Kapfenberg to 2. NO, compensation may not be used. For legal compensation
continue working with petitioner for a period of three (3) years to take place, the requirements set forth in Articles 1278 and
after the training. Otherwise, each trainee shall refund to 1279 of the Civil Code, quoted below, must be present.
BOHLER $6,000.00 (US dollars) by way of set-off or "ARTICLE 1278. Compensation shall take place when two
compensation. On January 16, 1997 or 2 years and 4 months persons, in their own right, are creditors and debtors of each
after attending the training, respondent resigned from petitioner. other.
- Immediately, petitioner ordered respondents to render an "ARTICLE 1279. In order that compensation may be proper, it is
accounting of its various Christmas giveaways they received. necessary:
These were intended for distribution to petitioner’s customers. (1) That each one of the obligors be bound principally, and
- In protest, respondents demanded from petitioner payment of that he be at the same time a principal creditor of the other;
their separation benefits, commissions, vacation and sick leave (2) That both debts consist in a sum of money, or if the
benefits, and proportionate 13th month pay. But petitioner things due are consumable, they be of the same kind, and also
refused and instead, withheld their 13th month pay and other of the same quality if the latter has been stated;
benefits. (3) That the two debts be due;
- On April 16, 1997, respondents filed with the Labor Arbiter a (4) That they be liquidated and demandable;
complaint for payment of their monetary benefits against (5) That over neither of them there be any retention or
petitioner and its president, Augusto Pardo, docketed as NLRC controversy, commenced by third persons and communicated in
NCR Case No. 04-02820-97. due time to the debtor."
- In due course, the Labor Arbiter rendered a Decision IN FAVOR - In the present case, set-off or legal compensation cannot take
OF So and Villareal. Petitioner filed a motion for reconsideration place between petitioner and respondent So because they are
but was denied Hence, petitioner filed with the Court of Appeals not mutually creditor and debtor of each other.
a petition for certiorari. - A careful reading of the Memorandum dated August 22, 1994
- On October 29, 1999, the Court of Appeals rendered a Decision reveals that the “lump sum compensation of not less than US
dismissing the petition and affirming the assailed NLRC Decision. $6,000.00 will have to be refunded” by each trainee to BOHLER,
Petitioner filed a motion for reconsideration but was denied by not to petitioner.
the Appellate Court in a Resolution dated May 8, 2000. T petitioner has no legal right to withhold respondents’ 13th
month pay and other benefits to recompense for whatever
ISSUES amount it paid as security for respondent Villareal’s car loan;
1. WON Petitioner may legally withhold respondent Villareal’s and for the expenses incurred by respondent So in his training
monetary benefits as a preliminary remedy pursuant to Article abroad.
2071 of the Civil Code, as amended Disposition petition is DENIED. The Decision dated October
2. WON Petitioner could withhold his monetary benefits being 29, 1999 and Resolution dated May 8, 2000 of the Court of
authorized by the memorandum he signed, the benefits acting Appeals in CA-G.R. SP No. 50957 are hereby AFFIRMED.
as compensation
1. NO. It cannot. Article 116 of the Labor Code, as amended,
provides: KAPUNAN; June 1, 2000
“ART. 116. Withholding of wages and kickbacks prohibited.
– It shall be unlawful for any person, directly or indirectly, NATURE
to withhold any amount from the wages (and benefits) of a Petition for Review
worker or induce him to give up any part of his wages by
force, stealth, intimidation, threat or by any other means FACTS
whatsoever without the worker’s consent.” - Private respondent International School, Inc. (School), pursuant
- The above provision is clear and needs no further elucidation. to PD 732, is a domestic educational institution established
Indeed, petitioner has no legal authority to withhold primarily for dependents of foreign diplomatic personnel and
respondents’ 13th month pay and other benefits. What an other temporary residents. The School hires both foreign and
employee has worked for, his employer must pay. Thus, an local teachers as members of its faculty, classifying the same
employer cannot simply refuse to pay the wages or benefits of into two: (1) foreign-hires and (2) local-hires.
its employee because he has either defaulted in paying a loan - The School grants foreign-hires certain benefits not accorded
guaranteed by his employer; or violated their memorandum of local-hires. These include housing, transportation, shipping
agreement; or failed to render an accounting of his employer’s costs, taxes, and home leave travel allowance. Foreign-hires are
property. also paid a salary rate 25% more than local-hires. The School
- Nonetheless, petitioner, relying on Article 2071 (earlier cited), justifies the difference on 2 "significant economic
contends that the right to demand security and obtain release disadvantages" foreign-hires have to endure, namely: (a) the
from the guaranty it executed in favor of respondent Villareal "dislocation factor" and (b) limited tenure.
may be exercised even without initiating a separate and distinct - At the negotiations for a new CBA, petitioner International
action. School Alliance of Educators, “a legitimate labor union and the
- There is no guaranty involved herein and, therefore, the collective bargaining representative of all faculty members” of
provision of Article 2071 does not apply. the School, contested the difference in salary rates between
- A guaranty is distinguished from a surety in that a guarantor is foreign and local-hires. This issue, and the question of whether
the insurer of the solvency of the debtor and thus binds himself foreign-hires should be included in the appropriate bargaining
to pay if the principal is unable to pay, while a surety is the unit, eventually caused a deadlock between the parties.
insurer of the debt, and he obligates himself to pay if the - Petitioners filed notice of strike. The failure to bring parties to a
principal does not pay. compromise prompted the DOLE to assume jurisdiction over the
Labor Law 1 A2010 - 43 - Disini
dispute. DOLE issued an Order resolving the parity and
representation issues in favor of the School. Then DOLE Sec.
Quisumbing denied petitioner's MFR. Petitioner now seeks relief
in this Court.
- Petitioner claims that the point-of-hire classification employed
by the School is discriminatory to Filipinos and that the grant of
higher salaries to foreign-hires constitutes racial discrimination.
- The School disputes these claims and gives a breakdown of its
faculty members, numbering 38 in all, with nationalities other
than Filipino, who have been hired locally and classified as local
hires. Also foreign hires have limited contract of employment
unlike the local hires who enjoy security of tenure

1. WON the International School’s point-of-hire classification for
the distinction in salary rates between foreign-hires and local-
hires is discriminatory and an invalid classification under the law.
2. WON foreign-hires should belong to the same bargaining unit
as the local-hires

1. YES
Ratio The Constitution, Labor Code and the International
Covenant on Economic, Social, and Cultural Rights impregnably
institutionalize in this jurisdiction the long honored legal truism
of "equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and responsibility,
under similar conditions, should be paid similar salaries. This rule
applies to the School, its "international character"
- The International Covenant on Economic, Social, and Cultural
Rights in Art.7 provides that: “The States Parties to the present
Covenant recognize the right of everyone to the enjoyment of
just and favorable conditions of work, which ensure, in particular,
fair wages and equal remuneration for work of equal value
without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed by
men, with equal pay for equal work.” The Philippines, through its
Constitution, has incorporated this principle as part of its
national laws.
- The Constitution specifically provides that labor is entitled to
"humane conditions of work." The Constitution also directs the
State to promote "equality of employment opportunities for all."
Similarly, the Labor Code provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed.
Discrimination, particularly in terms of wages, is frowned upon
by the Labor Code (Art.135)
- The dislocation factor and limited tenure affecting foreign-hires
are adequately compensated by certain benefits accorded them
which are not enjoyed by local-hires, such as housing,
transportation, shipping costs, taxes and home leave travel
allowances. Hence, the "dislocation factor" and the foreign-hires'
limited tenure also cannot serve as valid bases for the distinction
in salary rates.
2. NO
- It does not appear that foreign-hires have indicated their
intention to be grouped together with local-hires for purposes of
collective bargaining. The collective bargaining history in the
School also shows that these groups were always treated
separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar
functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-
hires. These benefits, such as housing, transportation, shipping
costs, taxes, and home leave travel allowance, are reasonably
related to their status as foreign-hires, and justify the exclusion
of the former from the latter.
Disposition Petition GRANTED IN PART. The Orders of the Sec.
of Labor and Employment are REVERSED and SET ASIDE insofar
as they uphold the practice of respondent School of according
foreign-hires higher salaries than local-hires.
Labor Law 1 A2010 - 44 - Disini
offense is misappropriation of the receipts of his sales. Such
conduct is not simply inept but rather depraved and immoral,
thus making him undeserving of such assistance.
-Our Constitution is replete with positive commands for the
promotion of social justice, and particularly the protection of the
rights of the workers. However, social justice is not intended to
countenance wrongdoing simply because it is committed by the
underprivileged. Compassion for the poor is an imperative in
every humane society, but only when the recipient is not a
rascal claiming an undeserved privilege. Hence, it may only be
invoked by those whose hands are clean and whose motives are
-Applying these considerations, the awarding of financial
assistance is unjustified.
Disposition Petition is GRANTED


PADILLA [concur]
-I concur. However, in cases were separation pay is awarded, the
amount to be granted should be left to the judgment of the NLRC
(rather than the 1 month of pay for each year of service rule)
and should not be disturbed by the Court in absence of evidence
of grave abuse of discretion on the part of the NLRC.
164 SCRA 671 FERNAN [dissent]
-Providing a rigid mathematical formula for computing the
CRUZ; August 23, 1988 amounts of separation pay defies the spirit of the constitutional
mandate that “those who have less in life should have more in
FACTS law”. These fixed rates would not favor the low-salaried
-Private respondent Marliyn Abucay, a traffic operator for PLDT, employee as he would encounter difficulty in finding another job.
was accused by 2 complainants of having demanded and
received from them Php3,800 in consideration of her promise to
GRINO-AQUINO [dissent]
facilitate the approval of their applications for phone
-We should not rationalize compassion.
installations. Investigated and heard, she was found guilty and
dismissed from service.
-Respondent filed a complaint for illegal removal with the
Ministry of Labor and Employment. The complaint was
dismissed, but the Labor Arbiter granted her severance of one
month pay for every year of service. Hence this petition,
claiming the granting of financial assistance was made with EMPLOYERS CONFEDERATION OF THE PHILIPPINES
grave abuse of discretion. V NWPC
-Petitioner contends that although Art 279 if the Labor Code 201 SCRA 759
entitles an employee to reinstatement and backwages if SARMIENTO; September 24,1991
dismissed without just cause, one dismissed in accordance with
law is not allowed any relief at all as this would be tantamount to
rewarding the dissolute worker. NATURE
-Respondent NLRC claims that dismissal was sufficient Appeal
punishment and that the grant of financial assistance was
intended to help her for the loss of employment after working FACTS
faithfully for 10 years. Similarly in the cases of Firestone Co. v - Employers Confederation of the Philippines is questioning the
Lariosa and Filipino, Inc. v NLRC, employees who were validly validity of the wage order issued by the Regional Board of NCR
dismissed on grounds of violation of company policies were still which increased the minimum wage by P17.00 daily including
awarded financial assistance on the ground of social and those already receiving wages above the statutory minimum
compassionate justice. These cases ostensibly constitute the wage up to P125.00 per day alleging that it was done in excess
exception to Art 279, based on considerations of equity. of the board’s authority, and alleges that under the Republic Act
No. 6727, the boards may only prescribe "minimum wages," not
ISSUE determine "salary ceilings."
WON it is legal to award financial assistance to an employee who - The said order was promulgated pursuant to the authority of
had been dismissed with just cause Republic Act No. 6727, which aside from providing new wage
rates, also provides, among other things, for various Regional
HELD Tripartite Wages and Productivity Boards in charge of prescribing
NO. Separation pay shall only be allowed as a measure of social minimum wage rates for all workers in the various regions, and
justice when the employee is validly dismissed for causes other for a National Wages and Productivity Commission to review,
than serious misconduct and not involving moral turpitude. among other functions, wage levels determined by the boards.
Reasoning - The Solicitor General was of the opinion that the Board in
-There is no doubt it is compassionate to give separation pay prescribing an across-the-board hike did not, in reality, "grant
when the cause is not iniquitous as when a salesman is additional or other benefits to workers and employees, such as
dismissed for his inability to fill his quota. His company cannot the extension of wage increases to employees and workers
be compelled to maintain him at the expense of the efficiency of already receiving more than minimum wages . . ." but rather,
their operations but the awarding of financial assistance would fixed minimum wages according to the "salary-ceiling method."
be sustainable under the policy of social justice. However, the ECOP in its reply insisted that wage-fixing is a legislative
same salesman surely does not deserve such generosity if his function, and Republic Act No. 6727 delegated to the regional
boards no more "than the power to grant minimum wage
Labor Law 1 A2010 - 45 - Disini
adjustments" and "in the absence of clear statutory authority," subcontracting installation jobs for another company and were
the boards may no more than adjust "floor wages." frequently absent from work. Thus, when petitioners reported
for work on February 23, 1999, respondent company refused to
ISSUES reemploy them unless they agree to work on a “pakyaw” basis.
1. WON the regional board of NCR performed an unlawful act of Petitioners demurred since this would mean losing their benefits.
legislation in decreeing an across the board hike They were given their walking papers without according them
2. WON RA6727 intended to deregulate the relation between the twin requirements of notice and hearing. Respondent
labor and capital company stated that they abandon their jobs. Hence, petitioners
filed a complaint for illegal dismissal and payment of money
HELD claims against respondent company.
1. NO - On December 28, 1999, the Labor Arbiter held that the
- The National Capital Region, in decreeing an across-the-board dismissal of petitioners was illegal and ordered respondent
hike did not performed an unlawful act of legislation. It is true company to pay them backwages, holidy and service incentive
that wage-firing, like rate-fixing, constitutes an act Congress; it leave pay, and separation pay in lieu of reinstatement. On
is also true, however, that Congress may delegate the power to appeal, the NLRC reversed the decision of the Labor Arbiter and
fix rates provided that, as in all delegations cases, Congress ruled that the latter erred in awarding backwages and separation
leaves sufficient standards. As this Court has indicated, it is pay to petitioners who deliberately abandoned their work. On
impressed that the law provides standards which are sufficient, certiorari, the Court of Appeals affirmed the findings of the NLRC
and in the light of the floor-wage method's failure, the Court but ordered respondent company to pay petitioners their money
believes that the Commission correctly upheld the Regional claims.
Board of the National Capital Region.
- RA 6727 was intended to rationalize wages, first, by providing ISSUES
for full-time boards to police wages round-the-clock, and second, 1. WON petitioners were illegally dismissed from the service
by giving the boards enough powers to achieve this objective. 2. WON private respondent should be held liable for non-
Congress meant the boards to be creative in resolving the compliance with the procedural requirements of due process
annual question of wages without labor and management
knocking on the legislature's door at every turn. HELD
2. NO 1. NO
- Apparently, ECOP is of the mistaken impression that Republic Ratio To dismiss an employee, the law requires not only the
Act No. 6727 is meant to "get the Government out of the existence of a just and valid cause but also enjoins the employer
industry" and leave labor and management alone in deciding to give the employee the opportunity to be heard and to defend
wages. The Court does not think that the law intended to himself. Article 282 of the Labor Code enumerates the just
deregulate the relation between labor and capital for several causes for termination by the employer: (a) serious misconduct
reasons: (1 ) The Constitution calls upon the State to protect the or willful disobedience by the employee of the lawful orders of
rights of workers and promote their welfare; (2) the Constitution his employer or the latter’s representative in connection with the
also makes it a duty of the State "to intervene when the employee’s work; (b) gross and habitual neglect by the
common goal so demands" in regulating property and property employee of his duties; (c) fraud or willful breach by the
relations; (3) the Charter urges Congress to give priority to the employee of the trust reposed in him by his employer or his duly
enactment of measures, among other things, to diffuse the authorized representative; (d) commission of a crime or offense
wealth of the nation and to regulate the use of property; (4) the by the employee against the person of his employer or any
Charter recognizes the "just share of labor in the fruits of immediate member of his family or his duly authorized
production;" (5) under the Labor Code, the State shall regulate representative; and (e) other causes analogous to the foregoing.
the relations between labor and management; (6) under - In this case, Agabon abandoned their job. Abandonment is the
Republic Act No. 6727 itself, the State is interested in seeing that deliberate and unjustified refusal of an employee to resume his
workers receive fair and euitable wages; and (7) the employment. It is a form of neglect of duty, hence, a just cause
Constitution is primarily a document of social justice, and for termination of employment by the employer. For a valid
although it has recognized the importance of the private sector, finding of abandonment, these two factors should be present:
it has not embraced fully the concept of laissez faire or (1) the failure to report for work or absence without valid or
otherwise, relied on pure market forces to govern the economy; justifiable reason; and (2) a clear intention to sever employer-
We can not give to the Act a meaning or intent that will conflict employee relationship, with the second as the more
with these basic principles. determinative factor which is manifested by overt acts from
which it may be deduced that the employees has no more
intention to work. The intent to discontinue the employment
must be shown by clear proof that it was deliberate and
2. YES
- Where the dismissal is for a just cause, as in the instant case,
the lack of statutory due process should not nullify the dismissal,
AGABON V NATIONAL LABOR RELATIONS or render it illegal, or ineffectual. However, the employer should
indemnify the employee for the violation of his statutory rights.
442 SCRA 573
* It is worth noting that this ruling has evolved through
YNARES-SANTIAGO; November 17, 2004 times.
> Prior to 1989 - the rule was that a dismissal or termination is
NATURE illegal if the employee was not given any notice.
Petition for review on certiorari > In the 1989 case of Wenphil Corp. v. National Labor Relations
Commission - where the employer had a valid reason to dismiss
FACTS an employee but did not follow the due process requirement, the
- On January 2, 1992, petitioners Jenny Agabon and Virgilio dismissal may be upheld but the employer will be penalized to
Agabon were hired as gypsum board and cornice installers by pay an indemnity to the employee. This became known as the
respondent Riviera Home Improvements, Inc., a corporation Wenphil or Belated Due Process Rule.
engaged in the business of selling and installing ornamental and > On January 27, 2000, in Serrano - violation by the employer of
construction materials. Seven (7) years later, on February 23, the notice requirement in termination for just or authorized
1999, their services were terminated on the ground of causes was not a denial of due process that will nullify the
abandonment of work. Apparently, petitioners were termination. However, the dismissal is ineffectual and the
Labor Law 1 A2010 - 46 - Disini
employer must pay full backwages from the time of termination the State to assure the rights of workers to ‘security of tenure’.
until it is judicially declared that the dismissal was for a just or The guarantee is an act of social justice.
authorized cause. 8. Workers need more work than anything else.
Reasoning - Work is a defining feature of human existence.
a. Constitutional due process is different from statutory due 9. To simply allow payment of nominal damages for violation of
process. The former protects the individual from the employer’s right to due process is to give undue advantage to
government and assures him of his rights in criminal, civil or employers.
administrative proceedings; while statutory due process found in - The deprivation of the right to security of tenure and due
the Labor Code and Implementing Rules protects employees process is beyond monetary valuation.
from being unjustly terminated without just cause after notice - This Court should protect labor and it should walk the talk.
and hearing.
b. The constitutional policy to provide full protection to labor is
PANGANIBAN [dissent]
not meant to be a sword to oppress employers. The
- I believe that even if there was just or authorized cause for
commitment of this Court to the cause of labor does not prevent
termination of employment, but due process was not afforded
us from sustaining the employer when it is in the right, as in this
the employee, the dismissal proceedings must be declared null
and void. Consequently, the employee must be reinstated and
Disposition DENIED. But the private respondent is ORDERED to
given full back wages and accruing benefits. Depending on the
pay each of the petitioners the amount of P30,000.00 as nominal
facts of each case, damages as provided under applicable
damages for non-compliance with statutory due process.
articles of the Civil Code may additionally be awarded.
- An exception may be entertained if the employer could
SPEARATE OPINION adequately prove that under the peculiar circumstances of the
case, there was no opportunity to comply with due process
PUNO [dissent] requirements; or doing so would have been impractical or
- He maintains his view that the workingman’s right ot job gravely adverse to the employer, as when the employee was
security and due process cannot be measured with a reduced caught in flagrante delicto. Under such circumstance, dismissal
price tag. He is unwilling to diminish petitioner’s right to would not be illegal and no award may properly granted.
procedural due process which is necessary to protect their Nevertheless, as a measure of compassion in this specific
security of tenure. He proffers the following precepts: instance, the employee may be given a nominal sum depending
1. Our Constitution is an ode to social justice. on the circumstances, pursuant to Article 2221 of the Civil Code.
- Here, Puno defines what social justice is. It is that virtue by
which individuals and groups fulfil their obligations to human TINGA [concur in the result]
society by contributing positively to the complete well-being of 1. The Abandonment Dimension - Agabon abandoned his work.
their fellowmen considered as members of that society, and They failed to report for work or absence without valid or
hence their actions accordingly. justifiable reason, and a clear intention to sever the employer-
- Then Justice Puno enumerated the litany of constitutional employee relationship.
provisions regarding social justice starting from 1935 2. Compliance with Notice Requirement – 2 letters sent by
Constitution up to the present, giving emphasis that provisions private respondent sufficiently complied with the notice rule.
on protection to labor have long been embedded in all our However, the actual violation of the notice requirement by
Constitutions, and thus at the very least should be respected Riviera Homes lies in its failure to serve on the Agabons the
and protected by our courts. second notice which should inform them of termination. But this
2. Courts at all times should give meaning and substance to not invalidate the the Agabons’ dismissal for just cause.
constitutional postulates in favour of the workingman. 3. The So-Called Constitutional Law Dimension - The first is that
- He emphasized that these substantive rights are not to be the Due Process Clause of the Constitution is a limitation on
weakened by a diminish procedural right. For in weakening the governmental powers. It does not apply to the exercise of
procedure, we weaken the substantive right. private power, such as the termination of employment under the
3. The Constitution puts the employee on equal footing with his Labor Code. The scope and reach of authority of an employer
employer. pales in comparison with that of the State.
- As between an employee, usually poor and unlettered, and the 4. Constitutional Protection of Labor - As manifested by several
employer, who has resources to secure legal advice, the law has framers of the 1987 Constitution, the provisions on social
reason to demand from the latter stricter compliance. For, social justice require legislative enactments for their
justice in these cases is not equality but protection. enforceability.
4. This Court has long extended constitutional due process in 5. The Effect of Statutory Violation - Based on reading Section
labor cases involving private action. 279 of the Labor Code, the existence of just cause by itself is
- Here, Justice Puno enumerated cases that hold that dismissal sufficient to validate the termination.
of employee without notice constitute an infringement of his Neither the Labor Code nor its implementing rules states that a
constitutional right which must be safeguarded at all times. It termination for just cause is voided because the requirement of
debunks the argument of the majority that it is only statutory notice and hearing was not observed.
due process that was violated and not the employees’ 6. The Damages’ Dimensions - Award for Damages Must Have
constitutional right as the case involves private individuals and Statutory Basis
not the State. However, Puno stressed out that the posture that - The Impropriety of Award for Separation Pay - separation pay
the constitutional due processs requirement limits government is warranted only for dismissals for authorized causes, as
action alone and does not apply to private action is already enumerated in Article 283 and 284 of the Labor Code.
passé. - The Impropriety of Equity Awards -Social justice should be
5. An employee who is denied procedural due process is entitled the aspiration of all that we do, yet I think it the more
to reinstatement. Nothing less. mature attitude to consider that it ebbs and flows within
6. Compliance with procedural due process is not a burden on our statutes, rather than view it as an independent
employers. source of funding.
7. In the hierarchy of rights of an employee, the right to security - Article 288 of the Labor Code as a Source of Liability
of tenure is high, if not the highest. Rule on Damages:
- All other complementary rights (i.e. right to collective • failure to comply with the statutory requirement of
bargaining and negotiations, the right to strike, etc) are notice automatically gives rise to nominal damages, at
meaningless to an unemployed Juan dela Cruz. It is the policy of the very least, even if the dismissal was sustained for
just cause.
Labor Law 1 A2010 - 47 - Disini
• Actual or compensatory damages - employee
dismissed for just cause but denied statutory due
• pecuniary loss arising - temperate or moderate
damages under Article 2224 of the Civil Code.
• Moral and exemplary damages - dismissal of the
employee was attended by bad faith, fraud, or was
done in a manner contrary to morals, good customs or
public policy, or the employer committed an act
oppressive to labor. Exemplary damages - dismissal
was effected in a wanton, oppressive or malevolent
Appropriate Award of Damages to the Agabons
- the only appropriate award of damages is nominal damages.