You are on page 1of 171

LABOR LAW

REVIEW
Case Digests Atty. Marlon Manuel

Amsheryl
SAN BEDA COLLEGE OF LAW | 4B 2015-2016

BAHILLO. BARRUGA. BAUTISTA. BORLAGDAN. CABOCHAN. CABRERA. CALIPAY. CAMBRI. CHIONG. DATUIN.
DIAZ. DIOLA. ENCARNACION. FERNANDEZ, L. FERNANDEZ, R. FERNANDO. GONZALES. GRATUITO. ILAGAN.
JUANICO. MACALOS. MADAMBA. MANCENIDO. MANZANO. ONG. PANGILINAN. PERALTA. RAGAZA. RIVERA.
SENORAN. SEPACIO. SURTIDA. TAN. TANDAAN. TUMANG. YUMANG-MEDINA.
PART I

RIGHT TO SELF-ORGANIZATION

Concept and Scope


Arts. 243, 246, 277 (c), 212 (e, f)
Omnibus Rules, Book V, Rule I-Rule II, as amended by D.O. 40, series of 2001

NUWHRAIN-MPHC v Secretary of Labor and Employment, July 31, 2009

Labor Organizations and Registration of Unions

Labor Code: Arts. 212 (g, h), 231, 234-242, 277 (a)
Omnibus Rules, Book V, Rule I, Sec. I (a, h-p, w, cc, ee, ff, jj, kk, zz, ccc), Rule III-V, XIV-XV, as amended by
D.O. 40-03, as further amended by D.O. 40-B.

R.A. No. 9481, Sec. 1-9


Department Order No. 40-F-03, series of 2008.
(Implementing Rules for R.A. 9481 amendments)

San Miguel Corporation Employees Union-Philippine Transport and General Workers Organization (SMCEU-
PTGWO) v. San Miguel Packaging Products Employees Union-Pambansang Diwa Ng Manggagawang Pilipino
(SMPPEU-PDMP), September 12, 2007
The Heritage Hotel Manila (Owned and Operated By Grand Plaza Hotel Corporation) v. Pinag-Isang Galing at Lakas
Ng Mga Manggagawa sa Heritage Manila (Piglas-Heritage), October 30, 2009
Eagle Ridge Golf and Country Club v. CA, March 18, 2010
Samahang Manggagawa sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and Coating Corp, March 16,
2011
Yokohama Tire Phils. v. Yokohama Employees Union, March 10, 2010

Eligibility for Membership; Special Groups of Employees

Labor Code: Arts. 245, 212 (m)


R.A. No. 9481, Sec. 8-9
Department Order No. 40-F-03, series of 2008
Omnibus Rules, Book V, Rule I, Sec. I (hh), (nn), (xx), as amended by D.O. 40

Cathay Pacific Steel Corp. v. CA, August 2006


San Miguel Corp. Supervisors and Exempt Union v. Laguesma, August 15, 1997
Standard Chartered Bank Employees Union (SCBEU-NUBE) v. Standard Chartered Bank, April 22, 2008
Coastal Subic Bay Terminal v. DOLE, November 20, 2006
Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v. Asia Brewery, August 3, 2010
San Miguel Foods v SMC supervisors and Exempt Union, August 1, 2011

Union Security Clause

BPI v BPI Employees Union, August 10, 2010 (Main Decision and Dissenting Opinion), October 19, 2011
General Milling Corp v Casio, March 10, 2010
PICOP Resources v Taneca, August 9, 2010
Victoriano v Elizalde Rope Workers Union, 59 SCRA 54
Kapatiran sa Meat and Canning Division v Ferrer-Calleja, 162 SCRA 367

Conditions of Membership and Rights of Members

Labor Code: Arts. 241, 274, 222 (b)


Omnibus Rules, Book V, Rule XI, XII, XIII, XVIII, XX, as amended by D.O. 40

NOTE: Compare the original provisions of the Labor Code with the amended provisions of R.A. No. 9481.

1
For reference:
Atlas Litographic Services v. Laguesma, 205 SCRA 12
De La Salle University Medical Center v. Laguesma, 294 SCRA 141
Tagaytay Highlands v. Tagaytay Highlands Employees Union- PTGWO, January 22, 2003

PART II
BARGAINING UNIT

Omnibus Rules, Book V, Rule I, Sec. 1 (d, t), as amended by D.O. 40-03

De La Salle v. De La Salle University Employees Association, 330 SCRA 363


San Miguel Foods v. San Miguel Corp. Supervisors and Exempt Union, August 1, 2011
Holy Child Catholic School v. HCCS-TELU-PIGLAS, July 23, 2013

BARGAINING AGENT, CERTIFICATION ELECTION PROCEEDINGS


Labor Code: Arts. 255-259, 258-A (Note: Arts. 256 & 257 had been amended by R.A. 9481)

Omnibus Rules, Book V , Rule I, Sec. 1 (d, h, j, o, p, q, t, ll, ss, bbb),


Rules VI-X, as amended by D.O. 40, and further amended by D.O. 40-F-03, series of 2008

Republic of the Philippines, represented by DOLE, v. Kawashima Textile, July


23, 2008
St. James School of Quezon City v. Samahang Manggagawa sa St. James, November 23, 2005
DHL Phils. United Rank and File Association v. Buklod ng Manggagawa ng
DHL Phils., July 22, 2004
Sta. Lucia East Commercial Corporation v. Hon. Secretary Of Labor, August 14,
2009
Samahan Ng Mga Manggagawa Sa SammaLakas Sa Industriya Ng
Kapatirang Haligi Ng Alyansa (SammaLikha) v. Samma Corporation, March 13, 2009
Chris Garments Corporation v. Hon. Patricia A. Sto. Tomas and Chris Garments Workers Union-
PTGWO, January 12, 2009
National Union Of Workers In Hotels, Restaurants And Allied Industries- Manila
Pavilion Hotel Chapter v. Secretary of Labor, July 31, 2009
Eagle Ridge Golf and Country Club v. CA, March 18, 2010
PICOP Resources, Inc. v. Taeca, August 9, 2010
Legend International Resorts v. Kilusang Manggagawa ng Legend, February 23, 2011
Samahang Manggagawa Sa Charter Chemical (SMCC-SUPER) v. Charter Chemical and Coating Corp., March 16,
2011

Voluntary Recognition

Sta. Lucia East Commercial Corporation v. Hon. Secretary Of Labor, August 14, 2009

For reference: Coastal Subic Bay Terminal v. DOLE, November 20, 2006

PART III
COLLECTIVE BARGAINING
Labor Code: Arts. 250-254, 247-249, 261
Omnibus Rules, Book V, Rule I, Sec. 1 (d, h, j, t, bbb), Rules XVI-XVII, as amended by D.O. 40-03

Art. 231, 212 (n), 260-262 (b), 277 (f,g,h)


Omnibus Rules, Book V, Rule XIX, XXI, as amended by D.O. 40-03

Union of Filipro Employees v. Nestle Phils., March 3, 2008


PAL v. PALEA, March 12, 2008
San Miguel Foods v. San Miguel Corporation Employees Union, October 5, 2007
Capitol Medical Center v. Trajano, June 30, 2005
Standard Chartered Bank Employees Union v. Confesor, June 16, 2004
General Milling Corporation v. CA, February 11, 2004

1
FVC Labor Union-Philippine Transport and General Workers Organization (FVCLU-PTGWO) v. Sama-Samang
Nagkakaisang Manggagawa Sa FVC-Solidarity Of Independent And General Labor Organizations (SANAMA-FVC-
SIGLO), November 27, 2009
RFM Corporation v. KAMPI-NAFLU-KMU, February 4, 2009
Fulache v. ABS-CBN, GR No. 183810, January 21, 2010
Employees Union of Bayer v. Bayer Phils., December 6, 2010
General Milling Corp. Independent Labor Union v. General Milling, June 15, 2011
Malayan Employees Association v. Malayan Insurance Co., February 2, 2010
Santuyo v. Remerco Garments, March 22, 2010
Insular Hotel Employees Union v. Waterfront Insular Hotel, September 22, 2010
Cirtek Employees Labor Union v. Cirtek Electronics, November 15, 2010
Eastern Telecoms v. Eastern Telecoms Employees Union, February 8, 2012
PNCC Skyway Traffic Management & Security Division Workers Organization v. PNCC Skyway Corp., February
17, 2010
Supreme Steel v. Nagkakaisang Manggagawa sa Supreme, March 28, 2011

For reference:

Halaguea, et al., and other flight attendants of Philippine Airlines v Philippine


Airlines, October 2, 2009

PASSI v. Boclot, September 28, 2007

PART IV
UNFAIR LABOR PRACTICES

Labor Code: Arts. 247-249, 261

Employees Union of Bayer Phils. v. Bayer Phils., December 6, 2010


Prince Transport v. Garcia, January 12, 2011
Manila Mining Employees Corp. v. Manila Mining, September 29, 2010
Central Azucarera de Bais Employees Union v. Central Azucarera de Bais, Nov. 17, 2010
BPI Employees Union-Davao v. BPI, July 24, 2013
Pepsi Cola Products v. Molon et al., February 18, 2013
Royal Plant Workers Union v. Coca Cola Bottlers, April 15, 2013
Goya v. Goya Employees Union, January 21, 2013

STRIKES, LOCKOUTS AND CONCERTED ACTIONS

Arts. 212 (o-s), 263-266, 254; Rules, Book V, Rule XXII, as amended by D.O. 40-03, and further amended by D.O. 40-
A and D.O. 40-G-03 (2010)

Bukluran ng Manggagawa sa Clothman Knitting v. CA, January 17, 2005


Steel Corporation v. SCP Employees Union, April 16, 2008
Biflex Phils. v. Filflex Industrial & Manufacturing Corp., Dec. 19, 2006
Bascon & Cole v. CA, February 5, 2004
Toyota Motor Phils. Corp. Workers Association v. Toyota Motor Phils, Oct. 19, 2007
NUWHRAIN Dusit Hotel Nikko Chapter v. CA, November 11, 2008
Capitol Medical Center v. NLRC, GR 147080, April 26, 2005
Trans-Asia Shipping Lines-Unlicensed Crews Employees Union v. CA, July 7, 2004
Manila Diamond Hotel Employees Union v. CA, Secretary, December 16, 2004
Philcom Employees Union v. Phil. Global Communications, July 17, 2006
Nissan Motors v. Secretary, June 21, 2006
FEU-NRMF v. FEU-NRMFEA-AFW, October 16, 2006
Pilipino Telephone Corporation v. PILTEA, June 22, 2007
Club Filipino v. Bautista, July 13, 2009
A. Soriano Aviation v. Employees Association of A. Soriano Aviation, August 14, 2009
Jackbilt Industries v. Jackbilt Employees Union, March 20, 2009
Alcantara & Sons v. CA, GR G.R. No. 155109, September 29, 2010
PHIMCO Industries, Inc. v. PILA, August 11, 2010
Solidbank Corporation v. Gamier, November 15, 2010

2
Escario v. NLRC, September 27, 2010
Bagong Pagkakaisa ng Manggagawa sa Triumph v. Secretary, July 5, 2010
Fadriquelan v. Monterey Foods, June 8, 2011
Magdala Multipurpose & Livelihood v. KMLMS, October 19, 2011
Automotive Engine Rebuilders v. Progresibong Unyon, July 13, 2011; January 16, 2013
Naranjo v. Biomedica Heath Care, September 19, 2012
VCMC v. Yballe, January 15, 2014

PART V
EMPLOYER-EMPLOYEE RELATIONSHIP

A. Elements of Relationship

Labor Code: Article 97 (a), (b), (c), (e); 167 (f), (g); 212 (e) & (f)
Cases:
Television and Production Exponents v. Servaa (GR 167648, January 28,2008)
ABS-CBN Broadcasting Corp. v. Nazareno (GR 164156, Sept. 26, 2006)
Fulache v. ABS-CBN (January 21, 2010)
(These three cases should be read in relation to Sonza v. ABS-CBN
Broadcasting Corporation [GR 138051, June 10, 2004])
Bernante v. PBA (September 14, 2011)
Abella v. PLDT (GR 159469, June 8, 2005)
Consulta v. CA (GR 145443, March 18, 2005)
Villamaria v. CA (GR 165881, April 19, 2006)
Republic of the Philippines v. ASIAPRO Cooperative (GR 172101, November
23, 2007)
Phil. Global Communications v. De Vera (GR 157214, June 7, 2005)
Coca Cola Bottlers v. Climaco (GR 146881, February 5, 2007)
Chavez v. NLRC (GR 146530, January 17, 2005)
Angelina Francisco v. NLRC (GR 170087, August 31, 2006)
Tongko v. Manufacturers Life Insurance (GR 167622, June 29, 2010 & January
25, 2011)
Intel Technology v. NLRC & Cabiles, February 5, 2014
Matling Industrial v. Coros (October 13, 2010)
Cosare v. Broadcom Asia, February 5, 2014
Atlanta Industries v. Sebolino (January 26, 2011)
Republic v. Asiapro Cooperative (November 23, 2007)

B. Independent Contractors and Labor-Only Contractors

Labor Code: Art. 106-109


Department Order No. 18-A, series of 2011 (which amended D.O. No. 18, s. 2002)
Cases:

Philippine Airlines v. Ligan (GR 146408, February 29, 2008)


San Miguel Corporation v. Aballa (GR 149011, June 28, 2005)
Meralco Industrial Engineering Services v. NLRC (GR 145402, March 14, 2008)
Manila Electric Company v. Benamira (GR 145271, July 14, 2005)
Dole Phils. v. Esteva (GR No. 161115, November 30, 2006)
Aliviado v. Procter and Gamble (GR 160506, March 9, 2010)
Temic Automotive v. Temic Automotive Phils. Employees Union (GR 186965,
December 23, 2009)
Smart Communications v. Astorga (GR 148132, January 28, 2008)
Coca-Cola Bottlers v. Agito (GR 179546, February 13, 2009)
Manila Water v. Dalumpines (GR 175501, October 4, 2010)
Babas v. Lorenzo Shipping (GR 186091, December 15, 2010)
Teng v. Pahagac (GR 169704, November 17, 2010)

PART VI
CLASSES OF EMPLOYEES

3
Arts. 278, 280-281; Rules, Book VI, Secs. 5-6

Magis Young Achievers Learning Center v. Manalo, February 13, 2009


Pier 8 Arrastre & Stevedoring Services v. Boclot, September 28, 2007
The Peninsula Manila v. Alipio, June 17, 2008
Rowell Industrial Corporation v. CA, March 7, 2007
ABS-CBN Broadcasting Corp. v. Nazareno, September 26, 2006
Kimberly Clark Phils. v. Secretary, November 23, 2007
Benares v. Pancho, April 29, 2005
Hacienda Bino/Hortencia Starke v. Cuenca, April 15, 2005
Gapayao v. Fulo, June 13, 2013
Universal Robina Sugar Milling Corp. v. Acibo, January 15, 2014
Filipinas Pre-fabricated Building Systems (FilSystems) v. Puente, March 18, 2005
St. Marys University v. CA, March 8, 2005
Poseidon Fishing v. NLRC, February 20, 2006
PLDT v. Arceo, May 5, 2006
Fulache v. ABS CBN, January 21, 2010
Leyte Geothermal Power Progressive Employees Union v. PNOC, March30, 2011
Asos v. PNCC, July 3, 2013
Malicdem v. Marulas Industrial Corp., February 26, 2014
Exodus International Construction v. Biscocho, February 23, 2011
DM Consunji v. Gobres, August 8, 2010
Mercado v. AMA Computer College, April 13, 2010
Colegio del Santisimo Rosario v. Rojo, September 4, 2013
University of the East v. Pepanio, January 23, 2013
Herrera-Manaois v. St. Scholasticas College, December 11, 2013

PART VII
SECURITY OF TENURE

Arts. 277 (b), 279, 282-287; Rules, Book VI, Secs. 2, 5, 6, Book V, Rule XXIII

Just Causes

Salas v. Aboitiz One, June 27, 2008


RB Michael Press v. Galit, February 13, 2008
San Miguel Corporation v. NLRC, April 16, 2008
LBC Express v. Mateo, June 9, 2009
Genuino v. NLRC, December 4, 2007
Bughaw v. Treasure Island, March 28, 2008
Moreno v. San Sebastian College, March 28, 2008
Janssen Pharmaceutica v. Silayro, February 26, 2008
Suico v. NLRC, January 30, 2007
Perez & Doria v. PT&T, April 7, 2009
Bacolod-Talisay Realty v. Dela Cruz, April 30, 2009
Prudential Guarantee & Assurance Labor Union v. NLRC, June 13, 2012
Cosmos Bottling Co. v. Fermin, June 20, 2012
Sampaguita Auto Transport v. NLRC & Sagad, January 30, 2013
Dongon v. Rapid Movers, Augsut 28, 2013
Alilem Credit Cooperative v. Bandiola, February 25, 2013
Cavite Apparel v. Marquez, February 6, 2013
Esguerra v. Valle Verde, June 13, 2012

Authorized Causes

Andrada v. NLRC, December 28, 2007


Manatad v. PT&T, March 7, 2008
Linton Commercial v. Hellera, October 10, 2007
AMA Computer College v. Garcia, April 14, 2008
GSWU-NAFLU-KMU v. NLRC, October 17, 2006
Dickinson Philippines v. NLRC, November 15, 2005

4
PT & T v. NLRC, April 15, 2005
Oriental Petroleum v. Fuentes, October 14, 2005
FASAP v. PAL, July 22, 2008 and October 2, 2009
General Milling Corp. v. Viajar, January 30, 2013

Constructive Dismissal/Preventive Suspension

Maricalum v. Decorion, April 12 2006


Uniwide Sales v. NLRC, February 29, 2008
Norkis Trading v. Genilo, February 11, 2008
Fungo v. Lourdes School, July 27, 2007
The University of the Immaculate Conception v. NLRC, January 26, 2011
Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, January 19, 2011
Dreamland Hotel v. Johnson, March 12, 2014

Union Security Clause

Alabang Country Club v. NLRC, February 14, 2008


Inguillo v. First Philippine Scales, June 5, 2009
General Milling Corp. v. Casio, March 10, 2010

Disease

Crayons Processing v. Pula, July 30, 2007


Villaruel v. Yeo Han Guan, June 1, 2011
Padillo v. Rural bank of Nabunturan, January 21, 2013

Temporary Suspension of Operations/Floating Status

Manila Mining Corp. Employees Association v. Manila Mining Corp., September 29, 2010
Nippon Housing v. Leynes, August 3, 2011
SKM Art Corp. v. Bauca, November 27, 2013

Illegal Strike

Jackbilt Industries v. Jackbilt Employees Union, March 20, 2009


Escario v. NLRC, September 27, 2010
Abaria v. NLRC, December 7, 2011 (relate to Bascon v. CA, February 5, 2004)
PHIMCO Industries v. PHIMCO Industries Labor Association, August 11, 2010

Suspension

Caong v. Regualos, January 26, 2011

Consequences of Dismissal

Composite Enterprises v. Caparoso, August 8, 2007


Sagum v. CA, May 26, 2005
Agabon v. NLRC, November 17, 2004
Jaka Food Processing v. Pacot, March 28, 2005
Industrial Timber v. Ababon, March 30, 2006
Sangwoo Phil. v. Sangwoo Phils. Employees Union, December 9, 2013
Equitable Banking v. Sadac, June 8, 2006
Carlos v. CA, August 28, 2007
Tomas Claudio Memorial College v. CA, February 16, 2004
Chronicle Securities v. NLRC, November 25, 2004
Intercontinental Broadcasting v. Benedicto, July 20, 2006
Velasco v. NLRC, June 26, 2006
PCIB v. Abad, February 28, 2005
Bago v. NLRC, April 4, 2007
Panuncillo v. CAP Phils., February 9, 2007

5
Garcia v. Philippine Airlines, January 20, 2009
Islriz v.Capada, January 31, 2011
Lansangan v. Amkor Technology Philippines, January 30, 2009
Palteng v. UCPB, February 27, 2009
Alcantara & Sons v. CA, September 29, 2010
Aboc v. Metrobank, December 13, 2010
Prince Transport v. Garcia, January 12, 2011
Robinsons Galleria/Robinsons Supermarket Corp. v. Ranchez, January 19, 2011
Pfizer v. Velasco, March 9, 2011
Luna v. Allado Construction, May 30, 2011
Villaruel v. Yeo Han Guan, June 1, 2011
Nacar V. Gallery Frames, August 13, 2013
Integrated Microelectronics V. Pionilla, August 28, 2013
United Tourist Promotion V. Kemplin, February 5, 2014

PART VIII
DISPUTE SETTLEMENT

Labor Code: Arts. 128-129, 213-226, 254, 260-262-B, 263 (g-i), 273-275, 277
(b), 290-292, note the amendments introduced by R.A. 9347
Executive Order No. 126 & 251

Peoples Broadcasting v. Secretary, May 8, 2009


Diokno v. Cacdac, July 4, 2007
Jaguar Security v. Sales, April 22, 2008
Pioneer Concrete Philippines v. Todaro, June 8, 2007
Tegimenta Chemical Phils. v. Buensalida, June 17, 2008
Metro Transit Organization v. PIGLAS NFWU-KMU, April 14, 2008
Hacienda Valentin-Balabag v. Secretary, February 11, 2008
Pentagon Steel Corp. v. CA, June 26, 2009
Masmud v. NLRC, February 13, 2009
Negros Metal Corp. v. Lamayo, August 25, 2010
Albert Teng Fish Trading v. Pahagac, November 17, 2010
Sarona v. NLRC, January 18, 2012.
McBurnie v. Ganzon, EGI-Managers, Inc., October 17, 2013
Prince Transport v. Garcia, January 12, 2011.
Manila Pavillion v. Delada, January 25, 2012
Unilever v. Rivera, June 3, 2013.
Phil. Carpet Manufacturing Corp. v. Tagyamon, December 11, 2013
Nacar v. Gallery Frames, August 13, 2013

6
RIGHT TO SELF ORGANIZATION 1. YES. The inclusion of Gatbontons vote was
proper not because it was not questioned but
because probationary employees have the right
NATIONAL UNION OF WORKERS IN HOTELS, to vote in a certification election. The votes
RESTAURANTS AND ALLIED INDUSTRIES of the five other probationary employees should
MANILA PAVILION HOTEL CHAPTER vs. thus also have been counted. Rule II, Sec. 2 of
SECRETARY OF LABOR AND EMPLOYMENT Department Order No. 4003, series of 2003,
G.R. No. 181531. July 31, 2009. which amended Rule XI of the Omnibus Rules
Implementing the Labor Code, provides:
FACTS
In a certification election conducted among the rank For purposes of this section, any employee,
and file employees of respondent Holiday Inn Manila whether employed for a definite period or not, shall
Pavilion Hotel (the Hotel), the following results were beginning on the first day of his/her service, be
obtained: eligible for membership in any labor organization.

EMPLOYEES IN VOTERS LIST = 353 The period of reckoning in determining who shall
TOTAL VOTES CAST = 346 be included in the list of eligible voters is in cases
NUWHRAINMPHC = 151 where a timely appeal has been filed from the
HIMPHLU = 169 Order of the MedArbiter, the date when the
NO UNION = 1 Order of the Secretary of Labor and
SPOILED = 3 Employment, whether affirming or denying the
SEGREGATED = 22 appeal, becomes final and executory. The
provision in the CBA disqualifying probationary
Among the segregated were five votes on the employees from voting cannot override the
on the ground that they were cast by Constitutionallyprotected right of workers to
probationary employees and, pursuant to the selforganization, as well as the provisions of
existing Collective Bargaining Agreement (CBA), the Labor Code and its
such employees cannot vote. It bears noting early Implementing Rules on certification elections and j
on, however, that the vote of one Jose urisprudence thereon.
Gatbonton (Gatbonton), a
probationary employee, was counted. 2. NO. under the socalled double majority rule,
for there to be a valid certification election,
MedArbiter Calabocal ruled for the opening of 17 out majority of the bargaining unit must have
of the 22 segregated votes, except the five votes of the voted AND the winning union must have
probationary employees. Petitioner, which garnered garnered majority of the valid votes cast.
151 votes, appealed to the Secretary Prescinding from the Courts ruling that all the
of Labor and Employment (SOLE), arguing that the probationary employees votes
votes of the probationary employees should have been should be deemed valid votes while that of the
opened considering that probationary employee supervisory employees should be excluded, it
Gatbontons vote was tallied. And petitioner averred follows that the number of valid votes cast
that respondent HIMPHLU, which garnered 169 would increase from 321 to 337. Under Art.
votes, should not be immediately certified as the 256 of the Labor Code, the union obtaining
bargaining agent, as the opening of the 17 the majority of the valid votes cast by the
segregated ballots would push the number of valid eligible voters shall be certified as the sole
votes cast to 338 (151 + 169 + 1 + 17), hence, the 169 and exclusive bargaining agent of all the
votes which HIMPHLU workers in the appropriate bargaining unit. This
garnered would be one vote shortof the majority which majority is 50% + 1. Hence, 50% of 337 is 168.5 +
would then become 69. 1 or at least 170. HIMPHLU
obtained 169 while petitioner received 151 votes.
The Secretary of Labor and Employment (SOLE), Clearly, HIMPHLU was not able to obtain a
through then Acting Secretary Luzviminda Padilla, majority vote.
affirmed the MedArbiters Order.

ISSUES: SAN MIGUEL CORPORATION EMPLOYEES


1. Whether or not the five votes of the probationary UNIONPHILIPPINE TRANSPORT AND GENERAL
employees should be opened. WORKERS ORGANIZATION (SMCEUPTGWO),
2. Whether HIMPHLU should be certified as the petitioner, vs. SAN MIGUEL PACKAGING
exclusive bargaining unit. PRODUCTS EMPLOYEES UNIONPAMBANSANG
DIWA NG MANGGAGAWANG PILIPINO (SMPPEU
HELD: PDMP), respondent
G.R. No. 171153, September 12, 2007

1
(2) No. After an exhaustive study of the governing
FACTS: labor law provisions, both statutory and
San Miguel Corporation Employees Union-Philippine regulatory, the court finds no legal justification
Transport and General Workers Organization to support the conclusion that a trade union
(SMCEU-PTGWO) is the incumbent bargaining agent center is allowed to directly create a local or
for the bargaining unit comprised of the regular chapter through chartering. Department Order
monthly-paid rank and file employees of the three No. 9 mentions two labor organizations either
divisions of San Miguel Corporation (SMC), namely, of which is allowed to directly create a local or
the San Miguel Corporate Staff Unit (SMCSU), San chapter through chartering a duly
Miguel Brewing Philippines (SMBP), and the San registered federation or a national union.
Miguel Packaging Products (SMPP), in all offices and Department Order No. 9 defines a "chartered
plants of SMC while San Miguel Packaging Products local" as a labor organization in the private
Employees UnionPambansang Diwa ng sector operating at the enterprise level that
Manggagawang Pilipino (SMPPEUPDMP) is acquired legal personality through a charter
registered as a chapter of Pambansang Diwa ng certificate, issued by a duly
Manggagawang Pilipino (PDMP). SMCEU-PTGWO registered federation or national union and
filed a petition for the cancellation of SMPPEUs reported to the Regional Office in accordance
registration and its dropping from the rolls of legitimate with Rule III, Section 2-E of these Rules.
labor organizations alleging that SMPPEU committed
fraud and falsification in obtaining its certificate of Article 234 now includes the term trade union
registration and that PDMP does not have the power to center, but interestingly, the provision
create a local or a chapter since it is a trade union indicating the procedure for chartering or
center. It was also found by the regional director that creating a local or chapter, namely Article 234-
SMPPEU failed to comply with the 20% % A, still makes no mention of a "trade union
membership requirement under the Labor Code. center. Also worth emphasizing is that even in
the most recent amendment of the
ISSUES: implementing rules,there was no mention of a
(1) Is SMPPEU, a chapter, required to comply trade union center as being among the labor
with the 20% membership requirement under organizations allowed to charter.
the Labor Code?
(2) May PDMP, a trade union center, validly The Court deems it proper to apply the Latin
create local and chapters? maxim expressio unius est exclusio alterius.
Under this maxim of statutory interpretation,
HELD: the expression of one thing is the exclusion of
(1) No. The creation of a branch, local or chapter another. When certain persons or things are
is treated differently. The Court, in the specified in a law, contract, or will, an intention
landmark case of Progressive Development to exclude all others from its operation may be
Corporation v. Secretary, Department of Labor inferred. If a statute specifies one exception to
and Employment, declared that when an a general rule or assumes to specify the
unregistered union becomes a branch, local or effects of a certain provision, other exceptions
chapter, some of the aforementioned or effects are excluded.
requirements for registration are no longer
necessary or compulsory. Whereas an *A trade union center is any group of registered
applicant for registration of an independent national unions or federations organized for the mutual
union is mandated to submit, among other aid and protection of its members; for assisting such
things, the number of employees and names members in collective bargaining; or for participating in
of all its members comprising at least 20% of the formulation of social and employment policies,
the employees in the bargaining unit where it standards, and programs, and is duly registered with
seeks to operate, as provided under Article the DOLE in accordance with Rule III, Section 2 of the
234 of the Labor Code and Section 2 of Rule Implementing Rules.
III, Book V of the Implementing Rules, the
same is no longer required of a branch, local THE HERITAGE HOTEL MANILA (OWNED AND
or chapter. The intent of the law in imposing OPERATED BY GRAND PLAZA HOTEL
less requirements in the case of a branch or CORPORATION) V. PINAG-ISANG GALING AT
local of a registered federation or national LAKAS
union is to encourage the affiliation of a local NG MGA MANGGAGAWA SA HERITAGE MANILA
union with a federation or national union in (PIGLAS-HERITAGE),
order to increase the local union's bargaining G.R. No. 177024, Oct. 30, 2009
powers respecting terms and conditions of
labor. FACTS

2
Sometime in 2000, certain rank and file employees of dual unionism and showed that the new union was
petitioner Heritage Hotel Manila formed the Heritage merely an alter ego of the old.
Hotel Employees Union (the HHE union). DOLE-NCR
issued a certificate of registration to this union. the ISSUE:
HHE union filed a petition for certification Whether or not the respondent union committed
election. petitioner company opposed, alleging that the misrepresentation in its application for union
HHE union misrepresented itself to be an independent registration?
union, when it was, in truth, a local chapter of
the NUWHRAIN. the company also filed a petition for HELD:
the cancellation of the HHE unions registration No. The Labor Code and its implementing rules do not
certificate. require that the number of members appearing on the
documents in question should completely dovetail. For
the Med-Arbiter granted the HHE unions petition for as long as the documents and signatures are shown to
certification election. Petitioner appealed to the be genuine and regular and the constitution and by-
Secretary of Labor but the latter denied the appeal and laws democratically ratified, the union is deemed to
the motion for reconsideration, prompting the company have complied with registration requirements.
to file a petition for certiorari with the Court of
Appeals. the CA issued a writ of injunction against the Petitioner company claims that respondent PIGLAS
holding of the HHE unions certification election, union was required to submit the names of all its
effective until the petition for cancellation of that unions members comprising at least 20 percent of the
registration shall have been resolved with finality. The employees in the bargaining unit. Yet the list it
decision of the CA became final when the HHE union submitted named only 100 members notwithstanding
withdrew the petition for review that it filed with this that the signature and attendance sheets reflected a
Court. membership of 127 or 128 employees. This omission,
said the company, amounted to material
On December 10, 2003 certain rank and file misrepresentation that warranted the cancellation of
employees of petitioner company formed another the unions registration.
union, the respondent Pinag-Isang Galing at Lakas ng
mga Manggagawa sa Heritage Manila (the PIGLAS But, as the labor authorities held, this discrepancy is
union). This union applied for registration with the immaterial. A comparison of the documents shows
DOLE-NCR and got its registration certificate. later, that, except for six members, the names found in the
the members of the first union, the HHE union, subject list are also in the attendance and signature
adopted a resolution for its dissolution. The HHE union sheets. Notably, the bargaining unit that respondent
then filed a petition for cancellation of its union PIGLAS union sought to represent consisted of 250
registration. employees. Only 20 percent of this number or 50
employees were required to unionize. Here, the union
On September 4, 2004 respondent PIGLAS union filed more than complied with such requirement.
a petition for certification election, that petitioner
company also opposed, alleging that the new unions Labor laws are liberally construed in favor of labor
officers and members were also those who comprised especially if doing so would affirm its constitutionally
the old union. According to the company, the guaranteed right to self-organization. Here, the
employees involved formed the PIGLAS union to PIGLAS unions supporting documents reveal the
circumvent the Court of Appeals injunction against the unmistakable yearning of petitioner companys rank
holding of the certification election sought by the and file employees to organize. This yearning should
former union. Despite the companys opposition, not be frustrated by inconsequential technicalities.
however, the Med-Arbiter granted the petition for
certification election. petitioner company filed a petition EAGLE RIDGE GOLF AND COUNTRY CLUB VS.
to cancel the union registration of respondent PIGLAS COURT OF APPEALS
union. The company claimed that the documents GR. No. 178989, March 18, 2010
submitted with the unions application for registration
bore false information. Doctrine: Art. 234[c] requires the list of names of all
the union members of an INDEPENDENT UNION
Petitioner company alleged that the misrepresentation comprising at least 20% of the bargaining unit. This
was evidenced by the discrepancy in the number of should not be equated with the list of workers who
union members appearing in the application and the participated in the organizational meetings (Art.234
list as well as in the number of signatories to the [b]). Subsequent affidavits of retraction (withdrawal of
attendance and signature sheets. The company further membership) will not retroact to the time of application
alleged that 33 members of respondent PIGLAS union for registration or even way back to the organizational
were members of the defunct HHE union. This, meeting.
according to the company, violated the policy against
FACTS

3
Eagle Ridge Employees Union (EREU or Union) filed a organization seeking to represent the bargaining unit
petition for certification election in Eagle Ridge Golf & of rank-and-file employees does not divest it of its
Country Club. Eagle Ridge opposed this status as a legitimate labor organization.
petition, followed by its filing of a petition for the
cancellation of certificate of registration claiming FACTS:
misrepresentation, false statement, or fraud to EREU Samahang Manggagawa sa Charter Chemical
in connection with the adoption of its constitution and Solidarity of Unions in the Philippines for
by-laws, the numerical composition of the Union, and Empowerment and Reforms (petitioner union) filed a
the election of its officers. petition for certification election among the regular
rank-and-file employees of Charter Chemical and
Eagle Ridge alleged that the EREU declared in its Coating Corporation (respondent company) with the
application for registration having 30 members, when Mediation Arbitration Unit of the DOLE, National
the minutes of its December 6, 2005 organizational Capital Region.
meeting showed it only had 26 members. Also, Eagle
Ridge contended that five employees who attended Med-Arbiters Ruling
the organizational meeting had manifested the desire Dismissed the petition for certification election. It held
to withdraw from the union. The five executed that the list of membership of petitioner union
individual affidavits or Sinumpaang Salaysay. consisted of 12 batchman, mill operator and leadman
who performed supervisory functions. Under Article
ISSUE 245 of the Labor Code, said supervisory employees
Whether or not the separation of members from the are prohibited from joining petitioner union which
Union can detrimentally affect the registration of the seeks to represent the rank-and-file employees of
Union. respondent company. As a result, not being a
legitimate labor organization, petitioner union has no
HELD right to file a petition for certification election for the
No. The fact that six union members, indeed, purpose of collective bargaining.
expressed the desire to withdraw their membership
through their affidavits of retraction will not cause the Department of Labor and Employments Ruling
cancellation of registration on the ground of violation of Allowed the certification election among the regular
Art. 234(c) of the Labor Code requiring the mandatory rank-and-file employees. There was no independent
minimum 20% membership of rank-and-file employees evidence presented to establish respondent
in the employees' union. companys claim that some members of petitioner
union were holding supervisory position.
Twenty percent (20%) of 112 rank-and-file employees
in Eagle Ridge would require a union membership of at Court of Appeals Ruling
least 22 employees (112 x 205 = 22.4). When the It upheld the Med-Arbiters finding that petitioner union
EREU filed its application for registration on December consisted of both rank-and-file and supervisory
19, 2005, there were clearly 30 union members. Thus, employees.
when the certificate of registration was granted, there
is no dispute that the Union complied with the ISSUE
mandatory 20% membership requirement. WON the alleged mixture of rank-and-file and
supervisory employees of petitioner unions
Besides, it cannot be argued that the six affidavits membership is a ground for the cancellation of
of retraction retroact to the time of the application petitioner unions legal personality.
of registration or even way back to the
organizational meeting. Prior to their withdrawal, the RULING
six employees in question were bona fide union No. The CA found that petitioner union has for its
members. membership both rank-and-file and supervisory
employees. However, petitioner union sought to
With the withdrawal of six union members, there is still represent the bargaining unit consisting of rank-and-
compliance with the mandatory membership file employees. Under Article 245 of the Labor Code,
requirement under Art. 234(c), for the remaining 24 supervisory employees are not eligible for membership
union members constitute more than the 20% in a labor organization of rank-and-file employees.
membership requirement of 22 employees. Thus, the appellate court ruled that petitioner union
cannot be considered a legitimate labor organization
SAMAHANG MANGGAGAWA SA CHARTER pursuant to Toyota Motor Philippines v. Toyota Motor
CHEMICAL v. CHARTER CHEMICAL and COATING Philippines Corporation Labor Union (hereinafter
CORPORATION Toyota).
G.R. No. 169717, March 16, 2011
Preliminarily, we note that petitioner union questions
The inclusion of supervisory employees in a labor the factual findings of the Med-Arbiter, as upheld by

4
the appellate court, that 12 of its members, consisting
of batchman, mill operator and leadman, are Yokohama challenged 78 votes cast by dismissed
supervisory employees. However, petitioner union employees. On the other hand, the Union challenged
failed to present any rebuttal evidence in the 68 votes cast by newly regularized rank-and-file
proceedings below after respondent company employees and another five (5) votes by alleged
submitted in evidence the job descriptions of the supervisor-trainees. Yokohama formalized its protest
aforesaid employees. The job descriptions indicate and raised as an issue the eligibility to vote of the 78
that the aforesaid employees exercise dismissed employees,[5] while the Union submitted
recommendatory managerial actions which are not only a handwritten manifestation during the election.
merely routinary but require the use of independent
judgment, hence, falling within the definition of Petitioner argues that the Court of Appeals erred in
supervisory employees under Article 212(m) of the ruling that the votes of the dismissed employees
Labor Code. For this reason, we are constrained to should be appreciated. Petitioner posits that
agree with the Med-Arbiter, as upheld by the appellate employees who have quit or have been dismissed for
court, that petitioner union consisted of both rank-and- just cause prior to the date of the certification election
file and supervisory employees. are excluded from participating in the certification
election. Petitioner had questioned the eligibility to vote
Nonetheless, the inclusion of the aforesaid supervisory of the 78 dismissed employees.
employees in petitioner union does not divest it of its
status as a legitimate labor organization. The Court Respondent counters that Section 2, Rule XII[16] of
held that while there is a prohibition against the the rules implementing Book V of the Labor Code
mingling of supervisory and rank-and-file employees in allows a dismissed employee to vote in the certification
one labor organization, the Labor Code does not election if the case contesting the dismissal is still
provide for the effects thereof. Thus, the Court held pending.
that after a labor organization has been registered, it Section 2, Rule XII, the rule in force during the
may exercise all the rights and privileges of a November 23, 2001 certification election clearly,
legitimate labor organization. Any mingling between unequivocally and unambiguously allows dismissed
supervisory and rank-and-file employees in its employees to vote during the certification election if the
membership cannot affect its legitimacy for that is not case they filed contesting their dismissal is still
among the grounds for cancellation of its registration, pending at the time of the election.
unless such mingling was brought about by
misrepresentation, false statement or fraud under ISSUES
Article 239 of the Labor Code. I.
WHETHER OR NOT THE COURT OF APPEALS
YOKOHAMA TIRE PHILIPPINES, INC. v. SERIOUSLY ERRED IN DISALLOWING THE
YOKOHAMA EMPLOYEES UNION APPRECIATION OF THE VOTES OF SIXTY-EIGHT
G.R. No. 159553, December 10, 2007 REGULAR RANK-AND-FILE.

FACTS II.
On October 7, 1999, respondent Yokohama WHETHER OR NOT THE COURT OF APPEALS
Employees Union (Union) filed a petition for SERIOUSLY ERRED IN ALLOWING THE
certification election among the rank-and-file APPRECIATION OF VOTES OF ALL OF ITS
employees of Yokohama. Upon appeal from the Med- EMPLOYEES WHO WERE PREVIOUSLY
Arbiters order dismissing the petition, the Secretary of DISMISSED FOR SERIOUS MISCONDUCT AND
the Department of Labor and Employment (DOLE) ABANDONMENT OF WORK WHICH ARE CAUSES
ordered an election with (1) Yokohama Employees UNRELATED TO THE CERTIFICATION ELECTION.
Union and (2) No Union as choices.[3] The election
held on November 23, 2001 yielded the following Was it proper to appreciate the votes of the dismissed
result: employees
The new rule has explicitly stated that without a final
YOKOHAMA EMPLOYEES UNION 131 judgment declaring the legality of dismissal, dismissed
NO UNION 117 employees are eligible or qualified voters. Thus,
SPOILED 2
----- RULE IX CONDUCT OF CERTIFICATION ELECTION
250 Section 5. Qualification of voters; inclusion-exclusion. .
. . An employee who has been dismissed from work
VOTES CHALLENGED BY [YOKOHAMA] 78 but has contested the legality of the dismissal in a
VOTES CHALLENGED BY [UNION] 73 forum of appropriate jurisdiction at the time of the
------ issuance of the order for the conduct of a certification
TOTAL CHALLENGED VOTES 151 election shall be considered a qualified voter, unless
TOTAL VOTES CAST - 401

5
his/her dismissal was declared valid in a final judgment
at the time of the conduct of the certification election.
Case cited - Engineering Equipment, Inc. v. NLRC
xxxx (1984)
Thus, we find no reversible error on the part of the Among the characteristics of the managerial rank are:
DOLE Acting Secretary and the Court of Appeals in (1) he is not subject to the rigid observance of regular
ordering the appreciation of the votes of the dismissed office hours;
employees. (2) his work requires the consistent exercise of
discretion and judgment in its performance;
Finally, we need not resolve the other issues for being (3) the output produced or the result accomplished
moot. The 68 votes of the newly regularized rank-and- cannot be standardized in relation to a given period of
file employees, even if counted in favor of No Union, time;
will not materially alter the result. There would still be (4) he manages a customarily recognized department
208 votes in favor of respondent and 189 votes in or subdivision of the establishment, customarily and
favor of No Union. regularly directing the work of other employees therein;
We also note that the certification election is already a (5) he either has the authority to hire or discharge
fait accompli, and clearly petitioners rank-and-file other employees or his suggestions and
employees had chosen respondent as their bargaining recommendations as to hiring and discharging,
representative. advancement and promotion or other change of status
of other employees are given particular weight; and
CATHAY PACIFIC STEEL CORPORATION VS (6) as a rule, he is not paid hourly wages nor subjected
COURT OF APPEALS to maximum hours of work.
G.R. No. 18065116456, August 30, 2006
Chico-Nazario, J. SAN MIGUEL CORPORATION SUPERVISORS AND
EXEMPT UNION VS. HON. LAGUESMA
FACTS: G.R. No. 110399. August 15, 1997.
Enrique Tamandong III was a Personnel
Superintendent in Cathay Pacific. His position has FACTS:
fixed daily working hours or 8am to 12nn an 1pm to Petitioner Union filed before the DOLE a Petition for
5pm. Among his functions was issuing memos on District Certification or Certification Election among the
company rules and regulations, imposing disciplinary supervisors and exempt employees of the SMC
sanctions such as warnings (with irregular attendance Magnolia Poultry Products Plants of Cabuyao, San
and unauthorized leave of absences) and Fernando and Otis. The Med-Arbiter issued an Order
suspensions, and executing the same which was to conduct certification among the supervisors and
noted by the company Vice President. exempt employees of the SMC Magnolia Poultry
Plants of Cabuyao, San Fernando and Otis as one
ISSUE: bargaining unit.
Is Enrique Tamandong III a supervisory employee
eligible to join a union of supervisory employees? Respondent SMC filed a Notice of Appeal with
Memorandum of Appeal, pointing out, among others,
HELD: the Med-Arbiters error in grouping together all three
Yes. (3) separate plants into one bargaining unit, and in
including supervisory levels 3 and above whose
Tamondong does not possess the power to hire, positions are confidential in nature since they have
transfer, terminate, or discipline erring employees of access to information which is regarded by the
the company. At the most, the record merely showed employer to be confidential from the business
that he informed and warned rank-and-file employees standpoint. Laguesma granted respondent companys
with respect to their violations of Cathay Pacific's rules appeal and ordered the remand of the case to the
and regulations. Also, the functions performed by Med-Arbiter of origin for determination of the true
Tamandong such as issuance of warning to classification of each of the employees sought to be
employees with irregular attendance and unauthorized included in the appropriate bargaining unit.
leave of absences and requiring employees to explain
regarding charges of abandonment of work, are Laguesma granted respondent companys appeal and
normally performed by a mere supervisor, and not by a ordered the remand of the case to the Med-Arbiter of
manager. origin for determination of the true classification of
each employees sought to be included in the
Likewise the imposition upon Tamandongs required appropriate bargaining unit. Upon petitioners motion,
fixed daily working hours is very uncharacteristic of a Laguesma granted the reconsideration and directed
managerial employee. A managerial rank is that he is the conduct of separate certification elections among
not subjected to the rigid observance of regular office the supervisors ranked as supervisory levels 1 to 4
hours or maximum hours of work. and the exempt employees in each of the three plants.

6
ISSUE: in San Fernando, Pampanga is immaterial.
1. Are supervisory employees and exempt Geographical location can be completely
employees of the company considered disregarded if the communal or mutual
confidential employees, hence ineligible to join interests of the employees are not sacrificed.
a union? We rule that the distance among the three
2. If they are not confidential employees, do the plants is not productive of insurmountable
employees of the three plants constitute an difficulties in the administration of union affairs.
appropriate bargaining unit? Neither are there regional differences that are
likely to impede the operations of a single
HELD: bargaining representative.
1. NO. It is the contention of SMC that
supervisory employees 3 and 4 and the COASTAL SUBIC BAY V. DOLE
exempt employees come within the meaning November 20, 2006
of the term confidential employees primarily
because they answered in the affirmative FACTS
when asked Do you handle confidential data Private respondents Coastal Subic Bay Terminal, Inc.
or documents? in Position Questionnaires Rank-and-File Union (CSBTI-RFU) and Coastal Subic
submitted by the Union. In the same Bay Terminal, Inc. Supervisory Union (CSBTI-SU) filed
questionnaire, however, it was also stated that separate petitions for certification election before Med-
the confidential information handled by Arbiter Eladio de Jesus of the Regional Office No. III.
questioned employees relate to product The rank-and-file union insists that it is a legitimate
formulation, product standards and product labor organization having been issued a charter
specification which by no means relate to labor certificate by the Associated Labor Union (ALU), and
relations. Granting arguendo that an employee the supervisory union by the Associated Professional,
has access to confidential labor relations Supervisory, Office and Technical Employees Union
information but such is merely incidental to his (APSOTEU). Private respondents also alleged that the
duties and knowledge thereof is not necessary establishment in which they sought to operate was
in the performance of such duties, said access unorganized.
does not render the employee a confidential
employee. If access to confidential labor The Med-Arbiter dismissed the petitions, holding that
relations information is to be a factor in the the ALU and APSOTEU are one and the same
determination of an employees confidential federation having a common set of officers. Thus, the
status, such information must relate to the supervisory and the rank-and-file unions were in effect
employers labor relations policies. affiliated with only one federation. Secretary of Labor
and Employment reversed it. CA affirmed the decision
2. YES. An appropriate bargaining unit may be of the Secretary.
defined as a group of employees of a given
employer, comprised of all or less than all of ISSUE
the entire body of employees, which the Are ALU, a rank-and-file union and APSOTEU, a
collective interest of all the employees, supervisory union one and the same because of the
consistent with equity to the employer, indicate commonalities between them? Are they commingled?
to be best suited to serve the reciprocal rights
and duties of the parties under the collective HELD
bargaining provisions of the law. Yes. First, as earlier discoursed, once a labor union
attains the status of a legitimate labor organization, it
It is readily seen that the employees in the continues as such until its certificate of registration is
instant case have community or mutuality of cancelled or revoked in an independent action for
interest, which is the standard in determining cancellation.23 In addition, the legal personality of a
the proper constituency of a collective labor organization cannot be collaterally attacked.24
bargaining unit. It is undisputed that they all Thus, when the personality of the labor organization is
belong to the Magnolia Poultry Division of San questioned in the same manner the veil of corporate
Miguel Corporation. This means that, although fiction is pierced, the action partakes the nature of a
they belong to three different plants, they collateral attack. Hence, in the absence of any
perform work of the same nature, receive the independent action for cancellation of registration
same wages and compensation, and most against either APSOTEU or ALU, and unless and until
importantly, share a common stake in their registrations are cancelled, each continues to
concerted activities. possess a separate legal personality. The CSBTI-RFU
and CSBTI-SU are therefore affiliated with distinct and
The fact that the three plants are located in separate federations, despite the commonalities of
three different places, namely, in Cabuyao, APSOTEU and ALU.
Laguna, in Otis, Pandacan, Metro Manila, and

7
In the instant case, the national federations that exist reversed the VA, ruling that eighty one employees are
as separate entities to which the rank-and-file and excluded from and not eligible for inclusion in the
supervisory unions are separately affiliated with, do bargaining unit as defined in section two, article one of
have a common set of officers. In addition, APSOTEU, the cba; the eighty one employees cannot be validly
the supervisory federation, actively participates in the members of respondent and/or if already members,
CSBTI-SU while ALU, the rank-and-file federation, that their membership is violative of the cba and that
actively participates in the CSBTI-RFU, giving they should disaffiliate from respondent; and petitioner
occasion to possible conflicts of interest among the has not committed any act that restrained or tended to
common officers of the federation of rank-and-file and restrain its employees in the exercise of their right to
the federation of supervisory unions. For as long as self organization. A certification election was held on
they are affiliated with the APSOTEU and ALU, the August 10, 2002 wherein petitioner won. As the
supervisory and rank-and-file unions both do not meet incumbent bargaining representative of ABIs rank and
the criteria to attain the status of legitimate labor file employees claiming interest in the outcome of the
organizations, and thus could not separately petition case, petitioner filed with the CA an omnibus motion
for certification elections. for reconsideration of the decision and intervention,
with attached petition signed by the union officers.
The purpose of affiliation of the local unions into a Both motions were denied by CA.
common enterprise is to increase the collective
bargaining power in respect of the terms and ISSUE
conditions of labor. When there is commingling of Whether or not workers were confidential employees
officers of a rank-and-file union with a supervisory
union, the constitutional policy on labor is RULING
circumvented. Labor organizations should ensure the No. Secretaries or clerks, numbering about forty, are
freedom of employees to organize themselves for the rank and file employees and confidential employees.
purpose of leveling the bargaining process but also to Although Article 245 of the Labor Code limits the
ensure the freedom of workingmen and to keep open ineligibility to join, form and assist any labor
the corridor of opportunity to enable them to do it for organization to managerial employees, jurisprudence
themselves. has extended this prohibition to confidential employees
or those who by reason of their positions or nature of
WHEREFORE, the petition is GRANTED. work are required to assist or act in a fiduciary manner
to managerial employees and hence, are likewise privy
TUNAY NA PAGKAKAISA NG MANGGAGAWA SA to sensitive and highly confidential records.
ASIA BREWERY VS ASIA BREWERY Confidential employees are thus excluded from the
G.R. No. 162025, August 3, 2010 rank-and-file bargaining unit. The rationale for their
separate category and disqualification to join any labor
FACTS organization is similar to the inhibition for managerial
Respondent Asia Brewery Inc (ABI) is engaged in the employees because if allowed to be affiliated with a
manufacture, sale and distribution of beer, shandy, Union, the latter might not be assured of their loyalty in
bottled water and glass products, it entered into a cba, view of evident conflict of interests and the Union can
effective for five years with Lakas ng mga also become company-denominated with the presence
Manggagagawa sa Asia-Independent (BLMA), the of managerial employees in the Union membership.
exclusive bargaining representative of the formers Having access to confidential information, confidential
rank and file employees. Under the cba, twelve jobs employees may also become the source of undue
were excluded from the bargaining agreement. advantage. Said employees may act as a spy or spies
Subsequently, a dispute arose when ABIs of either party to a collective bargaining agreement. In
management stopped deducting union dues from the present case, the CBA expressly excluded
eighty one employees, believing that their membership Confidential and Executive Secretaries from the rank-
in BLMA violated the CBA. Respondent insisted that and-file bargaining unit, for which reason ABI seeks
they fall under the Confidential and Executive their disaffiliation from petitioner. As can be gleaned
Secrtaries expressly excluded by the CBA from the from the above listing, it is rather curious that there
rank and file bargaining unit. BLMA claimed that ABIs would be several secretaries/clerks for just one (1)
actions restrained the employees rights to self department/division performing tasks which are mostly
organization and brought the matter to the grievance routine and clerical. Respondent insisted they fall
machinery. As the parties failed to settle the under the Confidential and Executive Secretaries
controversy, BLMA lodged a complaint before the expressly excluded by the CBA from the rank-and-file
NCMB. The parties eventually agreed to submit the bargaining unit. However, perusal of the job
case for arbitration to resolve the issue with respect to descriptions of these secretaries/clerks reveals that
the right of self organization. VA ruled in favor of their assigned duties and responsibilities involve
BLMA. Accordingly, the subject employees were routine activities of recording and monitoring, and
declared eligible for inclusion within the bargaining unit other paper works for their respective departments
represented by BLMA. On appeal to the CA, it while secretarial tasks such as receiving telephone

8
calls and filing of office correspondence appear to management policies in the field of labor relations. The
have been commonly imposed as additional duties. two criteria are cumulative, and both must be met if an
Respondent failed to indicate who among these employee is to be considered a confidential employee
numerous secretaries/clerks have access to - that is, the confidential relationship must exist
confidential data relating to management policies that between the employee and his supervisor, and the
could give rise to potential conflict of interest with their supervisor must handle the prescribed responsibilities
Union membership. Clearly, the rationale under our relating to labor relations. The exclusion from
previous rulings for the exclusion of executive bargaining units of employees who, in the normal
secretaries or division secretaries would have little or course of their duties, become aware of management
no significance considering the lack of or very limited policies relating to labor relations is a principal
access to confidential information of these objective sought to be accomplished by the
secretaries/clerks. It is not even farfetched that the job "confidential employee rule."
category may exist only on paper since they are all
daily-paid workers. Quite understandably, petitioner A confidential employee is one entrusted with
had earlier expressed the view that the positions were confidence on delicate, or with the custody, handling or
just being reclassified as these employees actually care and protection of the employers
discharged routine functions. property. Confidential employees, such as accounting
personnel, should be excluded from the bargaining
unit, as their access to confidential information may
SAN MIGUEL FOODS, INCORPORATED vs. SAN become the source of undue advantage. However,
MIGUEL CORPORATION SUPERVISORS and such fact does not apply to the position of Payroll
EXEMPT UNION Master and the whole gamut of employees who, as
G.R. No. 146206 August 1, 2011 perceived by petitioner, has access to salary and
compensation data. The CA correctly held that the
Under: Eligibility for Membership Special Groups of position of Payroll Master does not involve dealing with
Employees confidential labor relations information in the course of
FACTS: On the date of an ordered certification the performance of his functions. Since the nature of
election, petitioner San Miguel Foods, Inc. filed an his work does not pertain to company rules and
objection thereto questioning the eligibility to vote by regulations and confidential labor relations, it follows
some of its employees on the grounds that some that he cannot be excluded from the subject bargaining
employees do not belong to the bargaining unit which unit.
respondent seeks to represent. Specifically, it argued,
among others, that certain employees (Note: which 2. Corollarily, although Article 245 of the Labor Code
includes, among others, Payroll Master, Human limits the ineligibility to join, form and assist any labor
Resource Assistant, and Personnel Assistant) should organization to managerial employees, jurisprudence
not be allowed to vote as they are confidential has extended this prohibition to confidential employees
employees. The then Acting DOLE Undersecretary, in or those who by reason of their positions or nature of
a resolution affirmed the order of the Med-Arbiter work are required to assist or act in a fiduciary manner
stating that respondent is certified to be the exclusive to managerial employees and, hence, are likewise
bargaining agent of the supervisors and exempt privy to sensitive and highly confidential
employees of petitioner's Magnolia Poultry Products records. Confidential employees are thus excluded
Plants, with modification that some of the challenged from the rank-and-file bargaining unit. The rationale for
employees be excluded from the bargaining unit which their separate category and disqualification to join any
respondent seeks to represent. The Court of Appeals labor organization is similar to the inhibition for
(CA) affirmed with modification the Resolution of the managerial employees, because if allowed to be
DOLE Undersecretary, stating that those holding the affiliated with a union, the latter might not be assured
positions of Human Resource Assistant and Personnel of their loyalty in view of evident conflict of interests
Assistant are excluded from the bargaining unit. and the union can also become company-denominated
with the presence of managerial employees in the
ISSUES: union membership. Having access to confidential
1. Whether the CA erred in not excluding the position information, confidential employees may also become
of Payroll Master in the definition of a confidential the source of undue advantage. Said employees may
employee act as a spy or spies of either party to a collective
2. Whether the CA erred in ruling that the positions of bargaining agreement.
Human Resource Assistant and Personnel Assistant
belong to the category of confidential employees In this regard, the CA correctly ruled that the positions
of Human Resource Assistant and Personnel Assistant
RULING: belong to the category of confidential employees and,
1. Confidential employees are defined as those who hence, are excluded from the bargaining unit,
(1) assist or act in a confidential capacity, in regard (2) considering their respective positions and job
to persons who formulate, determine, and effectuate descriptions. As Human Resource Assistant, the scope

9
of ones work necessarily involves labor relations, "absorbed" as regular employees from the beginning
recruitment and selection of employees, access to of their employment. What is indubitable from the
employees' personal files and compensation package, Union Shop Clause is that upon the effectivity of the
and human resource management. As regards a CBA, petitioner's new regular employees (regardless
Personnel Assistant, one's work includes the recording of the manner by which they became employees of
of minutes for management during collective BPI) are required to join the Union as a condition of
bargaining negotiations, assistance to management their continued employment.
during grievance meetings and administrative
investigations, and securing legal advice for labor
issues from the petitioners team of lawyers, and There are no substantial differences between a newly
implementation of company programs. Therefore, in hired non-regular employee who was regularized
the discharge of their functions, both gain access to weeks or months after his hiring and a new employee
vital labor relations information which outrightly who was absorbed from another bank as a regular
disqualifies them from union membership. employee pursuant to a merger, for purposes of
applying the Union Shop Clause.
BANK OF THE PHILIPPINE ISLANDS vs. BPI
EMPLOYEES UNION-DAVAO CHAPTER-
FEDERATION OF UNIONS IN BPI UNIBANK The effect or consequence of BPI's so-called
"absorption" of former FEBTC employees should be
FACTS: The Bangko Sentral ng Pilipinas and limited to what they actually agreed to, i.e., recognition
Securities and Exchange Commission approved the of the FEBTC employees' years of service, salary rate
Articles of Merger executed by and between BPI, and other benefits with their previous employer. The
herein petitioner, and FEBTC. Pursuant to the Article effect should not be stretched so far as to exempt
and Plan of Merger, all the assets and liabilities of former FEBTC employees from the existing CBA
FEBTC were transferred to and absorbed by BPI as terms, company policies and rules which apply to
the surviving corporation. FEBTC employees, including employees similarly situated. If the Union Shop Clause
those in its different branches across the country, were is valid as to other new regular BPI employees, there
hired by petitioner as its own employees, with their is no reason why the same clause would be a violation
status and tenure recognized and salaries and benefits of the "absorbed" employees' freedom of association.
maintained.
Carpio (Dissenting Opinion):
Respondent BPI Employees Union is the exclusive
bargaining agent of BPI's rank and file employees. The The former FEBTC employees should not be
former FEBTC rank-and-file employees did not belong considered as "new employees" of BPI. The former
to any labor union at the time of the merger. FEBTC employees were absorbed by BPI immediately
Respondent Union then sent notices to the former upon merger, leaving no gap in their employment. The
FEBTC employees who refused to join the Union, as employees retained their previous employment status,
well as those who retracted their membership, and tenure, salary and benefits. This clearly indicates the
called them to a hearing regarding the matter. When intention of BPI to assume and continue the employer-
these former FEBTC employees refused to attend the employee relations of FEBTC and its employees. The
hearing, the president of the Union requested BPI to FEBTC employees' employment remained continuous
implement the Union Shop Clause of the CBA and to and unchanged, except that their employer, FEBTC,
terminate their employment pursuant thereto. merged with BPI which, as the surviving entity,
Petitioner refused to do so. continued the combined business of the two banks.
Thus, the former FEBTC employees are immediately
ISSUE: WON the employees absorbed by the BPI due regularized and made permanent employees of BPI.
to the merger are considered as "New Employees", They are not subject to any probationary period as in
thus covered by the Union Shop Clause in the CBA the case of "new employees" of BPI. The 30-day
period within which regularized "new employees" of
RULING: Yes. BPI must join the Union does not apply to former
FEBTC employees who are not probationary
The Union Shop Clause in the CBA simply states that employees but are immediately regularized as
"new employees" who during the effectivity of the CBA permanent employees of BPI. In short, the former
"may be regularly employed" by the Bank must join the FEBTC employees are immediately given the same
union within thirty (30) days from their regularization. permanent status as old employees of BPI.
There is nothing in the said clause that limits its
application to only new employees who possess
nonregular status, meaning probationary status, at the Brion (Dissenting Opinion):
start of their employment. Petitioner likewise failed to
point to any provision in the CBA expressly excluding An intrinsic distinction exists between the absorbed
from the Union Shop Clause new employees who are employees and those who are hired as immediate

10
regulars, which distinction cannot simply be from their work for the interest of industrial peace in
disregarded because it establishes how the absorbed the plant
employees came to work for BPI. Those who are
immediately hired as regulars acquire their status ISSUE: Is the dismissal illegal?
through the voluntary act of hiring done within the
effective term or period of the CBA. The absorbed HELD:
employees, on the other hand, merely continued the YES.
employment they started with FEBTC; they came to be There is no question that in the present case, the CBA
BPI employees by reason of a corporate merger that between GMC and IBM-Local 31 included a
changed the personality of their employer but did not maintenance of membership and closed shop clause
at all give them any new employment. Thus, they are as can be gleaned from Sections 3 and 6 of Article II.
neither "new" employees nor employees who became IBM-Local 31, by written request, can ask GMC to
regular only during the term of the CBA in the way that terminate the employment of the employee/worker who
newly regularized employees become so. They were failed to maintain its good standing as a union
regular employees under their present employment member.
long before BPI succeeded to FEBTC's role as Union security clauses are recognized and explicitly
employer. allowed under Article 248(e) of the Labor Code

Ultimately, the absorbed employees are best It is State policy to promote unionism to enable
recognized for what they really are a sui generis workers to negotiate with management on an even
group of employees whose classification will not be playing field and with more persuasiveness than if they
duplicated until BPI has another merger where it would were to individually and separately bargain with the
be the surviving corporation and no provision would be employer. For this reason, the law has allowed
made to define the situation of the employees of the stipulations for union shop and closed shop as means
merged constituent corporation. Significantly, this of encouraging workers to join and support the union
classification obviously, not within the contemplation of their choice in the protection of their rights and
of the CBA parties when they executed their CBA is interest vis--vis the employer
not contrary to, nor governed by, any of the agreed In terminating the employment of an employee by
terms of the existing CBA on union security, and thus enforcing the union security clause, the employer
occupies a gap that BPI, in the exercise of its needs only to determine and prove that: (1) the union
management prerogative, can fill. security clause is applicable; (2) the union is
requesting for the enforcement of the union security
GMC vs. Casio provision in the CBA; and (3) there is sufficient
Doctrine: Enforcement of CBA union security clause in evidence to support the decision of the union to expel
connection with the right to due process of the the employee from the union. These requisites
employees. (HINDI PO AKO SURE. ) constitute just cause for terminating an employee
based on the union security provision of the CBA.
The labor union Ilaw at Buklod ng Mangagawa (IBM)-
Local 31 Chapter (Local 31) was the sole and There is no question that in the present case, the CBA
exclusive bargaining agent of the rank and file between GMC and IBM-Local 31 included a
employees of GMC in Lapu-Lapu City. maintenance of membership and closed shop clause
as can be gleaned from Sections 3 and 6 of Article II.
Casio, et al. were regular employees of GMC with daily IBM-Local 31, by written request, can ask GMC to
earnings ranging from P173.75 to P201.50, and length terminate the employment of the employee/worker who
of service varying from eight to 25 years.[7] Casio was failed to maintain its good standing as a union
elected IBM-Local 31 President for a three-year term in member.
June 1991, while his co-respondents were union shop It is similarly undisputed that IBM-Local 31, through
stewards. Gabiana, the IBM Regional Director for Visayas and
Mindanao, twice requested GMC, in the letters dated
Subsequently, on February 29, 1992, Pino, et al., as March 10 and 19, 1992, to terminate the employment
officers and members of the IBM-Local 31, issued a of Casio, et al. as a necessary consequence of their
Resolution expelling Casio, et al. from the union. expulsion from the union.
Gabiana then wrote a letter dated March 10, 1992, It is the third requisite that there is sufficient evidence
addressed to Eduardo Cabahug (Cabahug), GMC to support the decision of IBM-Local 31 to expel Casio,
Vice-President for Engineering and Plant et al. which appears to be lacking in this case.
Administration, informing the company of the expulsion Irrefragably, GMC cannot dispense with the
of Casio, et al. from the union pursuant to the requirements of notice and hearing before dismissing
Resolution dated February 29, 1992 of IBM-Local 31 Casio, et al. even when said dismissal is pursuant to
officers and board members. Gabiana likewise the closed shop provision in the CBA. The rights of an
requested that Casio, et al. be immediately dismissed employee to be informed of the charges against him
and to reasonable opportunity to present his side in a

11
controversy with either the company or his own union employee based on the union security provision of
are not wiped away by a union security clause or a the CBA.
union shop clause in a collective bargaining
agreement. As to the first requisite, there is no question that the
CBA between PRI and respondents included a union
PICOP RESOURCES v. TANECA security clause, specifically, a maintenance of
August 9, 2010 membership as stipulated in Sections 6 of Article II,
Union Security and Check-Off. Following the same
FACTS: provision, PRI, upon written request from the Union,
Respondents filed a Complaint for unfair labor can indeed terminate the employment of the employee
practice, illegal dismissal and money claims against who failed to maintain its good standing as a union
petitioner PICOP Resources, Incorporated (PRI) and member. Secondly, it is likewise undisputed that
its officers. They were regular rank-and-file employees NAMAPRI-SPFL, in two (2) occasions demanded from
of PRI and bona fide members of Nagkahiusang PRI to terminate the employment of respondents due
Mamumuo sa PRI Southern Philippines Federation of to their acts of disloyalty to the Union. However, as to
Labor (NAMAPRI-SPFL), which is the collective the third requisite, we find that there is no sufficient
bargaining agent for the rank-and-file employees of evidence to support the decision of PRI to terminate
petitioner PRI. PRI has a collective bargaining the employment of the respondents.
agreement (CBA) with NAMAPRI-SPFL. It contained a
union security clause, to wit: All employees within the The mere signing of the authorization in support of the
appropriate bargaining unit who are members of the Petition for Certification Election of FFW before the
UNION at the time of the signing of this AGREEMENT "freedom period," is not sufficient ground to terminate
shall, as a condition of continued employment by the the employment of respondents. Nothing in the records
COMPANY, maintain their membership in the UNION would show that respondents failed to maintain their
in good standing membership in good standing in the Union.
Respondents did not resign or withdraw their
PRI sent a letter to the management of PRI demanding membership from the Union to which they belong.
the termination of employees who allegedly Respondents continued to pay their union dues and
campaigned for, supported and signed the Petition for never joined the FFW. Hence, the third requisite is
Certification Election of the Federation of Free lacking.
Workers Union (FFW) during the effectivity of the CBA.
NAMAPRI-SPFL contended that it is an act of VICTORIANO V ELIZALDE ROPE WORKERS
disloyalty and a valid basis for termination for a cause UNION
in accordance with its Constitution and By-Laws and 59 SCRA 54
CBA terms. After investigation, they were
subsequently sent termination notices on the ground of Benjamin Victoriano is a member of the religious sect
"acts of disloyalty". Respondents then accused PRI of known as the "Iglesia ni Cristo" and had been in the
Unfair Labor Practice. They alleged that none of them employ of the Elizalde Rope Factory, Inc. He was also
ever withdrew their membership from NAMAPRI-SPFL a member of the EPWU (Elizalde Rope Workers
or submitted to PRI any union dues and check-off Union). The Company has a collective bargaining
disauthorizations against NAMAPRI-SPFL. They agreement containing a closed shop provision.
claimed that they continue to remain on record Victoriano tendered his resignation from EPWU
as bona fide members of NAMAPRI-SPFL. They also claiming that as per RA 3350 he is an exemption to the
claimed that there was lack of procedural due closed shop agreement by virtue of his being a
process. The Labor Arbiter declared the respondents member of the INC because apparently in the INC,
dismissal to be illegal. one is forbidden from being a member of any labor
union. The company moved to terminate Victoriano
ISSUE: Whether or not respondents are validly due to his non-membership from the EPWU. EPWU
terminated pursuant to union security clause provided and ERF reiterated that he is not exempt from the
in the CBA close shop agreement because RA 3350, which
provides that closed shop agreements shall not cover
HELD: No. members of any religious sects which prohibit
In terminating the employment of an employee by affiliation of their members in any such labor
enforcing the union security clause, the employer organization, is unconstitutional and that said law
needs to determine and prove that: (1) the union violates the EPWUs and ERFs legal/contractual
security clause is applicable; (2) the union is rights. Appellant Union, furthermore, asserted that a
requesting for the enforcement of the union "closed shop provision" in a collective bargaining
security provision in the CBA; and (3) there is agreement cannot be considered violative of religious
sufficient evidence to support the decision of the freedom.
union to expel the employee from the union. These
requisites constitute just cause for terminating an ISSUE: Whether or not RA 3350 is unconstitutional.

12
Members of the supervisory union might refuse to
HELD: No carry out disciplinary measures against their co-
Republic Act No. 3350 is constitutional. The Act member rank-and-file employees.
classifies employees and workers, as to the effect and In the area of bargaining, their interests cannot be
coverage of union shop security agreements, into considered identical. The needs of one are different
those who by reason of their religious beliefs and from those of the other. Moreover, in the event of a
convictions cannot sign up with a labor union, and strike, the national federation might influence the
those whose religion does not prohibit membership in supervisors' union to conduct a sympathy strike on the
labor unions. The classification introduced by said Act sole basis of affiliation.
is also germane to its purpose. The purpose of the law (NOTE! THIS RULING IS NOW REPEALED.)
is precisely to avoid those who cannot, because of
their religious belief, join labor unions, from being KAPATIRAN SA MEAT AT CANNING V. BLR
deprived of their right to work and from being CALLEJA
dismissed from their work because of union shop
security agreements. The act also applies equally to FACTS: Petitioner was an exclusive bargaining
all members of said religious sects; this is evident from representative. Prior to its expiration as such, it staged
its provision. The fact that the law grants a privilege to a strike to pressure the employer to extend its contract.
members of said religious sects cannot by itself render Now, within the freedom period, another union
the Act unconstitutional. belonging to the same unit filed for certification
election. The same was challenged by herein
The right to religion prevails over contractual or legal petitioner on the ground that the union petitioning for
rights. As such, an INC member may refuse to join a certification election is mostly composed of Iglesia ni
labor union and despite the fact that there is a closed Cristo members who once refused to affiliate with it. It
shop agreement in the factory where he was then contends that, by virtue of their prior religious
employed, his employment could not be validly objection, the said union(mostly composed of INC
terminated for his non-membership in the majority members) are not eligible to file for certification
therein. Further, the right to join a union includes the election.
right not to join a union. The law is not unconstitutional.
It recognizes both the rights of unions and employers ISSUE
to enforce terms of contracts and at the same time it Whether or not INC members, who deliberately and
recognizes the workers right to join or not to join previously refused to affiliate with a union, may
union. RA 3550 recognizes as well the primacy of a organize by themselves.
constitutional right over a contractual right.

For Reference: RULING


Yes! This Court's decision inVictoriano vs. Elizalde
ATLAS V. LAGUESMA Rope Workers' Union, 59 SCRA 54, upholding the
Doctrine: Union of supervisory employees cannot be right of members of the IGLESIA NI KRISTO sect not
merged and represented with the union of the rank and to join a labor union for being contrary to their religious
file employees even through a national federation. beliefs, does not bar the members of that sect from
forming their own union. The public respondent
FACTS correctly observed that the "recognition of the tenets of
Respondent is a supervisory union of petitioner and an the sect ... should not infringe on the basic right of self-
affiliate of the national federation representing the rank organization granted by the constitution to workers,
and file employees of the same petitioner. Said regardless of religious affiliation."
national federation sough for certification election for
the supervisors unit. However, petitioner opposed the
certification election on the ground that conflict of BARGAINING UNIT
interest would arise since same federation would
represent two adverse and distinct units, that of the
rank and file and supersisors. DE LA SALLE UNIVERSITY MEDICAL CENTER
AND COLLEGE OF MEDICINE VS. LAGUESMA
ISSUE G.R. No. 102084, August 12, 1998
whether or not the union of rank and file employees
and union of supervisory employees can be members FACTS:
of the same federation. Petitioner De La Salle University Medical Center and
College of Medicine (DLSUMCCM) is a hospital and
RULING medical school at Dasmarias, Cavite. Private
NO. We agree with the petitioner's contention that a respondent Federation of Free Workers-De La Salle
conflict of interest may arise in the areas of discipline, University Medical Center and College of Medicine
collective bargaining and strikes. Supervisory Union Chapter (FFW-DLSUMCCMSUC),

13
on the other hand, is a labor organization composed of employees of petitioner DLSUMCCM are indeed
the supervisory employees of petitioner DLSUMCCM. affiliated with the same national federation, the FFW,
On April 17, 1991, the Federation of Free Workers petitioner DLSUMCCM has not presented any
(FFW), a national federation of labor unions, issued a evidence showing that the rank-and-file employees
certificate to private respondent FFW- composing the other union are directly under the
DLSUMCCMSUC recognizing it as a local chapter. On authority of the supervisory employees.
the same day, it filed on behalf of private respondent
FFW-DLSUMCCMSUC a petition for certification TAGAYTAY HIGHLANDS INTERNATIONAL GOLF
election among the supervisory employees of CLUB INCORPORATED vs. TAGAYTAY
petitioner DLSUMCCM. Its petition was opposed by HIGHLANDS EMPLOYEES UNION-PGTWO
petitioner DLSUMCCM on the grounds that several G.R. No. 142000, January 22, 2003
employees who signed the petition for certification
election were managerial employees and that the FACTS:
FFW-DLSUMCCMSUC was composed of both On October 16, 1997, the Tagaytay Highlands
supervisory and rank-and-file employees in the Employees Union (THEU)Philippine Transport and
company. The respondent however denied the General Workers Organization (PTGWO), a legitimate
petitioners allegations and contended that It is not true labor organization said to represent majority of the
that supervisory employees are joining the rank-and- rank-and-file employees of THIGCI, filed a petition for
file employees' union. While it is true that both regular certification election. THIGCI, in its Comment, opposed
rank-and-file employees and supervisory employees of THEUs petition for certification election on the ground
herein respondent have affiliated with FFW, yet there that the list of union members submitted by it was
are two separate unions organized by FFW. The defective and fatally flawed as it included the names
supervisory employees have a separate charter and signatures of supervisors, resigned, terminated
certificate issued by FFW. and absent without leave (AWOL) employees, as well
as employees of The Country Club, Inc., a corporation
ISSUE: distinct and separate from THIGCI; and that out of the
Whether or not supervisory union and rank-and-file 192 signatories to the petition, only 71 were actual
union can affiliate in the same federation rank-and-file employees of THIGCI. THIGCI also
alleged that some of the signatures in the list of union
RULING: members were secured through fraudulent and
YES. Supervisory employees have the right to self- deceitful means, and submitted copies of the
organization as do other classes of employees save handwritten denial and withdrawal of some of its
only managerial ones. Conformably with the employees from participating in the petition. Replying
constitutional mandate, Art. 245 of the Labor Code to THIGCIs Comment, THEU asserted that it had
now provides for the right of supervisory employees to complied with all the requirements for valid affiliation
self-organization, subject to the limitation that they and inclusion in the roster of legitimate labor
cannot join an organization of rank-and-file employees. organizations pursuant to DOLE Department Order
The reason for the segregation of supervisory and No. 9, series of 1997, on account of which it was duly
rank-and-file employees of a company with respect to granted a Certification of Affiliation by DOLE on
the exercise of the right to self-organization is the October 10, 1997; and that Section 5, Rule V of said
difference in their interests. Supervisory employees Department Order provides that the legitimacy of its
are more closely identified with the employer than with registration cannot be subject to collateral attack, and
the rank-and-file employees. If supervisory and rank- for as long as there is no final order of cancellation, it
and-file employees in a company are allowed to form a continues to enjoy the rights accorded to a legitimate
single union, the conflicting interests of these groups organization.
impair their relationship and adversely affect discipline,
collective bargaining and strikes. 10 These ISSUE:
consequences can obtain not only in cases where Whether the certificate of registration of the union
supervisory and rank-and-file employees in the same should be cancelled
company belong to a single union but also where
unions formed independently by supervisory and rank- RULING:
and-file employees of a company are allowed to After a certificate of registration is issued to a union,
affiliate with the same national federation. As we the legal personality cannot be subject to collateral
explained in the case of Atlas vs. Laguesma, however, attack. it may be questioned only in an independent
such a situation would obtain only where two petition for cancellation. the inclusion in a union of
conditions concur: First, the rank-and-file employees disqualified employees is not among the grounds for
are directly under the authority of supervisory cancellation unless such inclusion is due to
employees and second, the national federation is misrepresentation, false statement or fraud under the
actively involved in union activities in the company. circumstances mentioned in sections a and c Article
Although private respondent FFW-DLSUMCCMSUC 239 of the Labor Code. THEU, having been validly
and another union composed of rank-and-file issued a certificate of registration, should be

14
considered to have already acquired juridical SAN MIGUEL FOODS V. SAN MIGUEL CORP.
personality which may not be assailed collaterally. As SUPERVISORS AND EXEMPT UNION
for petitioners allegation that some of the signatures in August 1, 2011
the petition for certification election were obtained
through fraud, false statement and misrepresentation, FACTS:
the proper procedure is, as reflected above, for it to file Petitioner is questioning the eligibility to vote by some
a petition for cancellation of the certificate of of its employees on the ground that some employees
registration, and not to intervene in a petition for do not belong to the bargaining unit.
certification election.
ISSUES:
DE LA SALLE V. DE LA SALLE UNIVERSITY 1. Should there be a separate bargaining unit for those
EMPLOYEES ASSOCIATION engaged in dressed chicken processing, i.e.,
330 SCRA 363 handling and packaging of chicken meat and those
engaged in live chicken operations, i.e., those who
FACTS: breed chicks and grow chickens? NO.
DLSU and the UNION (composed of regular non- 2. Are payroll masters confidential employees and
academic R&F) entered into a CBA. 60 days before its must be excluded from the bargaining unit? NO.
expiration, the union initiated negotiations which were 3. Are those holding the positions of Human
unsuccessful. The Union filed a Notice of Strike with Resource Assistant and Personnel Assistant
the NCMB. During conciliation, 5 out of 11 issues were excluded from the bargaining unit? YES.
resolved by parties.
RULING:
ISSUE: 1. There should be only one bargaining unit for the
Are computer operators and discipline officers (which employees involved in dressed chicken processing
were previously excluded) confidential employees? and those engaged in live chicken operations. Certain
NO. factors, such as specific line of work, working
conditions, location of work, mode of compensation,
RULING: and other relevant conditions do not affect or impede
their commonality of interest. Although they seem
The express exclusion of the computer operators and separate and distinct from each other, the specific
discipline officers from the bargaining unit of rank-and- tasks of each division are actually interrelated and
file employees in the 1986 collective bargaining there exists mutuality of interests which warrants the
agreement does not bar any re-negotiation for the formation of a single bargaining unit.
future inclusion of the said employees in the
bargaining unit. During the freedom period, the parties 2. The CA correctly held that the position of Payroll
may not only renew the existing collective bargaining Master does not involve dealing with confidential labor
agreement but may also propose and discuss relations information in the course of the performance
modifications or amendments thereto. of his functions. Since the nature of his work does not
pertain to company rules and regulations and
We rule that the said computer operators and confidential labor relations, it follows that he cannot be
discipline officers are not confidential employees. excluded from the subject bargaining unit.
As carefully examined by the Solicitor General, the
service record of a computer operator reveals that his 3. Human Resource Assistant and Personnel Assistant
duties are basically clerical and non-confidential in belong to the category of confidential employees and,
nature. As to the discipline officers, we agree with the hence, are excluded from the bargaining unit,
voluntary arbitrator that based on the nature of their considering their respective positions and job
duties, they are not confidential employees and should descriptions. As Human Resource Assistant, the scope
therefore be included in the bargaining unit of rank- of ones work necessarily involves labor relations,
and-file employees. recruitment and selection of employees, access to
employees' personal files and compensation package,
------------------ and human resource management. As regards a
The Court also affirms the findings of the voluntary Personnel Assistant, one's work includes the recording
arbitrator that the employees of the College of St. of minutes for management during collective
Benilde should be excluded from the bargaining unit of bargaining negotiations, assistance to management
the rank-and-file employees of Dela Salle University, during grievance meetings and administrative
because the two educational institutions have their investigations, and securing legal advice for labor
own separate juridical personality and no sufficient issues from the petitioners team of lawyers, and
evidence was shown to justify the piercing of the veil of implementation of company programs. Therefore, in
corporate fiction. the discharge of their functions, both gain access to
vital labor relations information which outrightly
disqualifies them from union membership.

15
[petitioner]s teaching personnel to the exclusion of
HOLY CHILD CATHOLIC SCHOOL vs. HON. non-teaching personnel; and (2) [petitioner]s non-
PATRICIA STO. TOMAS, in her official capacity as teaching personnel to the exclusion of teaching
Secretary of the Department of Labor and personnel.
Employment, and PINAG-ISANG TINIG AT LAKAS
NG ANAKPAWIS HOLY CHILD CATHOLIC ISSUE:
SCHOOL TEACHERS AND EMPLOYEES LABOR WON the commingling of non-academic and academic
UNION (HCCS-TELU-PIGLAS), Respondents. rank-and-file employees in one labor organization
G.R. No. 179146, July 23, 2013 affect the latter's legitimacy and its right to file a
petition for certification election.
SUMMARY: This case is a Petition for Review on
Certiorari under Rule 45 assailing the Decision of the HELD:
Court of Appeals affirming the Resolution of the [Petitioner] appears to have confused the concepts of
Secretary of the Department of Labor and Employment membership in a bargaining unit and membership in a
(SOLE) allowing private respondents petition for union. In emphasizing the phrase to the exclusion of
certification election. The Resolution of SOLE directed academic employees stated in U.P. v. Ferrer-Calleja,
the conduct of two separate certification elections for [petitioner] believed that the petitioning union could not
the teaching and the non-teaching personnel. admit academic employees of the university to its
Corollary, it ruled that [private respondent] can membership. But such was not the intention of the
continue to exist as a legitimate labor organization Supreme Court.
with the combined teaching and non-teaching
personnel in its membership and representing The Supreme Court ordered the non-academic rank-
both classes of employees in separate bargaining and-file employees of U.P. to constitute a bargaining
negotiations and agreements. unit to the exclusion of the academic employees of the
institution, but did not order them to organize a
The Supreme Court ruled that the CA did not act with separate labor organization.
grave abuse of discretion. The ruling of SOLE is
AFFIRMED. In the same manner, the teaching and non-teaching
personnel of [petitioner] school must form separate
DOCTRINE: bargaining units. Thus, the order for the conduct of two
1. The legal personality of the Union, cannot be separate certification elections, one involving teaching
collaterally attacked in certification election personnel and the other involving non-teaching
proceedings by petitioner school which, as personnel. It should be stressed that in the subject
employer, is generally a by stander in the petition, [private respondent] union sought the conduct
proceedings. of a certification election among all the rank-and-file
2. The commingling of non-academic and personnel of [petitioner] school. Since the decision of
academic rank-and-file employees in one labor the Supreme Court in the U.P. case prohibits us from
organization does not affect the latter's commingling teaching and non-teaching personnel in
legitimacy and its right to file a petition for one bargaining unit, they have to be separated into two
certification election. separate bargaining units with two separate
certification elections to determine whether the
FACTS: employees in the respective bargaining units desired
Petitioner (School) has 98 teaching personnel, 25 non- to be represented by [private respondent].
teaching academic employees and 33 non-teaching
and non-academic employees. These 156 employees REPUBLIC OF THE PHILIPPINES, represented by
supported the petition for certification election filed by Department of Labor and Employment
Private Respondent (Union). The School assails the (DOLE), Petitioner,
legitimacy of the Union and its right to file a petition for vs. KAWASHIMA TEXTILE MFG., PHILIPPINES,
certificate election due to the commingling of academic INC., Respondent.
and non-academic rank-and-file employees. G.R. No. 160352, July 23, 2008

PETITIONERS ARGUMENT: FACTS:


The SOLE erred in interpreting the decision of the KFWU filed with DOLE Regional Office No. IV, a
Supreme Court in U.P. v. Ferrer-Calleja1. According to Petition for Certification Election to be conducted in the
Petitioner, the Court (in U.P. v. Ferrer-Calleja) sought bargaining unit composed of 145 rank-and-file
the creation of separate bargaining units, namely: (1) employees of respondent.

Respondent-company filed a Motion to Dismiss the


1 The Supreme Court stated that the non-academic rank-and petition on the ground that KFWU did not acquire any
file employees of the University of the Philippines shall legal personality because its membership of mixed
constitute a bargaining unit to the exclusion of the academic rank-and-file and supervisory employees violated
employees of the institution.
16
Article 245 of the Labor Code, and its failure to submit Effective 1989, R.A. No. 6715 restored the prohibition
its books of account contravened the ruling of the against the questioned mingling in one labor
Court in Progressive Development Corporation v. organization, viz:
Secretary, Department of Labor and Employment.
Sec. 18. Article 245 of the same Code, as amended, is
ISSUE: hereby further amended to read as follows
(1) whether a mixed membership of rank-and-file and
supervisory employees in a union is a ground for the Art. 245. Ineligibility of managerial employees to join
dismissal of a petition for certification election in view any labor organization; right of supervisory employees.
of the amendment brought about by D.O. 9, series of Managerial employees are not eligible to join, assist or
1997, which deleted the phraseology in the old rule form any labor organization. Supervisory employees
that [t]he appropriate bargaining unit of the rank-and- shall not be eligible for membership in a labor
file employee shall not include the supervisory organization of the rank-and-file employees but may
employees and/or security guards; and join, assist or form separate labor organizations of their
own. (Emphasis supplied)
(2) whether the legitimacy of a duly registered labor
organization can be collaterally attacked in a petition Unfortunately, just like R.A. No. 875, R.A. No. 6715
for a certification election through a motion to dismiss omitted specifying the exact effect any violation of the
filed by an employer such as Kawashima Textile prohibition would bring about on the legitimacy of a
Manufacturing Phils., Inc. labor organization.

HELD: Thus, when the issue of the effect of mingling was


brought to the fore in Toyota, the Court, citing Article
The petition is imbued with merit. 245 of the Labor Code, as amended by R.A. No. 6715,
held:
The key to the closure that petitioner seeks could have
been Republic Act (R.A.) No. 9481 [AN ACT Clearly, based on this provision, a labor organization
STRENGTHENING THE WORKERS composed of both rank-and-file and supervisory
CONSTITUTIONAL RIGHT TO SELF- employees is no labor organization at all. It cannot, for
ORGANIZATION, AMENDING FOR THE PURPOSE any guise or purpose, be a legitimate labor
PRESIDENTIAL DECREE NO. 442, AS AMENDED, organization. Not being one, an organization which
OTHERWISE KNOWN AS THE LABOR CODE OF carries a mixture of rank-and-file and supervisory
THE PHILIPPINES] Sections 8 and 9. employees cannot possess any of the rights of a
However, R.A. No. 9481 took effect only on June 14, legitimate labor organization, including the right to file
2007; hence, it applies only to labor representation a petition for certification election for the purpose of
cases filed on or after said date. As the petition for collective bargaining. It becomes necessary, therefore,
certification election subject matter of the present anterior to the granting of an order allowing a
petition was filed by KFWU on January 24, 2000,28 certification election, to inquire into the composition of
R.A. No. 9481 cannot apply to it. There may have any labor organization whenever the status of the labor
been curative labor legislations that were given organization is challenged on the basis of Article 245
retrospective effect, but not the aforecited provisions of of the Labor Code xxxx
R.A. No. 9481, for otherwise, substantive rights and
interests already vested would be impaired in the In the case at bar, as respondent unions membership
process. list contains the names of at least twenty-seven (27)
supervisory employees in Level Five positions, the
Instead, the law and rules in force at the time of the union could not, prior to purging itself of its supervisory
filing by KFWU of the petition for certification election employee members, attain the status of a legitimate
on January 24, 2000 are R.A. No. 6715, amending labor organization. Not being one, it cannot possess
Book V of Presidential Decree (P.D.) No. 442 (Labor the requisite personality to file a petition for certification
Code),as amended, and the Rules and Regulations election.
Implementing R.A. No. 6715,34 as amended by
Department Order No. 9, series of 1997. But then, on June 21, 1997, the 1989 Amended
Omnibus Rules was further amended by Department
One area of contention has been the composition of Order No. 9, series of 1997 (1997 Amended Omnibus
the membership of a labor organization, specifically Rules). Specifically, the requirement under Sec. 2(c) of
whether there is a mingling of supervisory and rank- the 1989 Amended Omnibus Rules that the petition
and-file employees and how such questioned mingling for certification election indicate that the bargaining
affects its legitimacy. unit of rank-and-file employees has not been mingled
with supervisory employees was removed.

17
Consequently, the Court reinstates that of the DOLE Manggagawa seeks to represent is the non-academic
granting the petition for certification election of KFWU. personnel or the rank and file employees from the
motor pool, construction and transportation
II. Now to the second issue of whether an employer departments, and not all the rank and file employees of
like respondent may collaterally attack the St. James. A subsequent motion for reconsideration
legitimacy of a labor organization by filing a was denied by the DOLE. The ruling of the DOLE was
motion to dismiss the latters petition for sustained by the Court of Appeals.
certification election.
Issue:
Except when it is requested to bargain collectively, an Are the formation of the labor union and the
employer is a mere bystander to any petition for certification election valid?
certification election; such proceeding is non-
adversarial and merely investigative, for the purpose Ruling:
thereof is to determine which organization will
represent the employees in their collective bargaining The petition has no merit.
with the employer. The choice of their representative is
the exclusive concern of the employees; the employer The Validity of the Formation of the Labor Union
cannot have any partisan interest therein; it cannot The issue on the employer-employee relationship
interfere with, much less oppose, the process by filing between St. James and majority of the members of
a motion to dismiss or an appeal from it; not even a Samahang Manggagawa has already been resolved in
mere allegation that some employees participating in a a previous case.
petition for certification election are actually managerial
employees will lend an employer legal personality to Prior to the holding of the certification election, St.
block the certification election. The employers only James filed a petition for cancellation of Samahang
right in the proceeding is to be notified or informed Manggagawas union registration for lack of employer-
thereof. employee relationship between St. James and
Samahang Manggagawas members. This case
The amendments to the Labor Code and its reached the Court of Appeals, which held that the
implementing rules have buttressed that policy even construction workers are actually St. James regular
more. employees in its motor pool, construction and
transportation departments, and eventually the
Petition is GRANTED. Supreme Court which, in a Resolution dated 10
October 2001, closed any issue on the validity of the
G.R. No. 151326; November 23, 2005 formation of the labor union.
ST. JAMES SCHOOL OF QUEZON
CITY, Petitioner, vs. SAMAHANG MANGGAGAWA The Validity of the Certification Election
SA ST. JAMES SCHOOL OF QUEZON Petitioner alleges that it has 179 rank and file
CITY, Respondent. employees in its Quezon City Campus, all of which
CARPIO, J. were never able to vote during the certification election
since they were on duty. Even if the 84 votes should
Facts: be counted, it does not fall within the majority of total
A petition for certification election was file by the number of employees of the five St. James campuses
Samahang Manggagawa sa St. James School of 570.
Quezon City ("Samahang Manggagawa") on behalf of
the motor pool, construction and transportation The argument is untenable. According to the Court,
employees of St. James School of Quezon City ("St. the members of Samahang Manggagawa are
James"). On 26 June 1999, the certification election employees in the Tandang Sora campus. Under its
was held at the DOLE office in Intramuros, Manila. 84 constitution and by-laws, Samahang Manggagawa
out of the 149 eligible voters cast their votes. A protest seeks to represent the motor pool, construction and
was filed by petitioners on the grounds that the total transportation employees of the Tandang Sora
number of rank and file employees was 179, and that campus. Thus, the computation of the quorum should
those who voted were mere construction workers of an be based on the rank and file motor pool, construction
independent contractor, Architect Conrado Bacoy and transportation employees of the Tandang Sora
("Architect Bacoy"). campus and not on all the employees in St. James
five campuses.
In 6 January 2000, the Med-Arbiter, Tomas F.
Falconitin, using the list of rank and file employees In determining whether there was a quorum, the
submitted by St. James, ruled that at the time of the number to be used is 149. A quorum existed in the
certification election, the 84 voters were no longer certification election when the 84 votes were cast.
working at St. James. This decision was reversed by
the DOLE which ruled that what Samahang Petition denied.

18
nullification of the election proceedings, the election
G.R. No. 152094; July 22, 2004 officer should have deferred issuing the Certification of
DHL PHILIPPINES CORPORATION UNITED RANK the results thereof. Section 13 of the Implementing
AND FILE ASSOCIATION-FEDERATION OF FREE Rules cannot strictly be applied to the present case.
WORKERS (DHL-URFA-FFW), petitioner, vs.
BUKLOD NG MANGGAGAWA NG DHL Respondents voted in favor of the petitioner because it
PHILIPPINES CORPORATION, respondent. was their desire to have an independent union.
PANGANIBAN, J. However, this misrepresentation caused them to
disaffiliate and form a new union. Upon filing the
Facts: application but prior the issuance of a certificate of
A certification election was conducted among the registration, the respondent already filed its petition to
regular rank and file employees in the main office and nullify the certification election. This was opposed by
the regional branches of DHL Philippines Corporation petitioner on the ground that there was no certificate
on November 25, 1997. The contending choices were issued to respondent yet. However, the court held that
petitioner and "no union." because such certificate was issued in favor of the
latter [respondent] four days after the filing of the
However, on December 19, 1997, a petition for the Petition, on December 23, 1997, the misgivings of the
nullification for the certification election was filed by the former were brushed aside by the med-arbiter. Indeed,
respondent Buklod ng Manggagawa ng DHL the fact that respondent was not yet a duly registered
Philippines Corporation (BUKLOD) with the Industrial labor organization when the Petition was filed is of no
Relations Division of the Department of Labor and moment, absent any fatal defect in its application for
Employment (DOLE) on the ground of fraud and registration.
deceit, particularly by misrepresenting to the
employees that it was an independent union even if it Moreover, the respondents did not sleep on their
was an affiliate of the Federation of Free Workers rights. Hence, their failure to follow strictly the
(FFW). procedural technicalities regarding the period for filing
their protest should not be taken against them. Mere
Those who found out withdrew their membership and technicalities should not be allowed to prevail over the
formed BUKLOD, whose Certificate of Registration welfare of the workers. What is essential is that they
was issued by DOLE on December 23, 1997. be accorded an opportunity to determine freely and
intelligently which labor organization shall act on their
Come January 19, 1998, petitioner received 546 votes behalf. Having been denied this opportunity by the
and "no union" garnering 348 votes, and was certified betrayal committed by petitioners officers in the
by the election officer as the sole and exclusive present case, the employees were prevented from
bargaining agent of the rank and file employees of the making an intelligent and independent choice.
corporation.
Lastly, the Court held that a certification election may
The Med-Arbiter Tomas F. Falconitin nullified the be set aside for misstatements made during the
November 25, 1997 certification election and ordered campaign, where 1) a material fact has been
the conduct of a new one with respondent as one of misrepresented in the campaign; 2) an opportunity for
the choices, alongside petitioner and no choice. This reply has been lacking; and 3) the misrepresentation
decision was reversed by DOLE Undersecretary has had an impact on the free choice of the employees
Rosalinda Dimapilis-Baldoz. participating in the election. The misrepresentation
was committed by the officers of the petitioner, and
Upon reaching the Court of Appeals, it held that the petitioner cannot claim that there was sufficient time
withdrawal of 704 out of 894 members of the petitioner between the said misrepresentation and election to
union was a valid impetus to hold a new certification ascertain the truth of petitioners statements.
election.
Petition denied.
Issue:
Is the certification election valid? STA. LUCIA EAST COMMERCIAL CORPORATION
vs. HON. SECRETARY OF LABOR AND
Ruling: EMPLOYMENT and STA. LUCIA EAST
The Petition lacks merit. COMMERCIAL CORPORATION WORKERS
ASSOCIATION (CLUP LOCAL CHAPTER),
The petitioner hinges the validity of the decision of the G.R. No. 162355 August 14, 2009
election officer on the fact that no protest for the CARPIO, J.:
misrepresentation was filed during the election or
within 5 days from the close thereof. However, the Facts:
Court held that when the med-arbiter admitted and On 2001, Confederated Labor Union of the Philippines
gave due course to respondents Petition for (CLUP) instituted a petition for certification election

19
among the regular rank- and-file employees of Sta. Med-Arbiter Bactin dismissed THE UNIONs petition
Lucia East Commercial Corporation (THE for direct certification on the ground of contract bar
CORPORATION) and its Affiliates. The affiliate rule. The prior voluntary recognition of SMSLEC and
companies included in the petition were SLE the CBA between THE CORPORATION and SMSLEC
Commercial, SLE Department Store, SLE Cinema, bars the filing of THE UNIONs petition for direct
Robsan East Trading, Bowling Center, Planet Toys, certification. THE UNION raised the matter to the
Home Gallery and Essentials. Secretary.

On August 2001, Med-Arbiter Bactin ordered the The Ruling of the Secretary of Labor and
dismissal of the petition due to inappropriateness of Employment.
the bargaining unit. The Secretary held that the subsequent negotiations
and registration of a CBA executed by THE
Later CLUP in its local chapter under THE CORPORATION with SMSLEC could not bar THE
CORPORATION reorganized itself and re-registered UNIONs petition. THE UNION constituted a registered
as CLUP-Sta. Lucia East Commercial Corporation labor organization at the time of THE
Workers Association (herein THE UNION), limiting its CORPORATIONs voluntary recognition of SMSLEC.
membership to the rank-and-file employees of Sta. THE CORPORATION then filed a petition for certiorari
Lucia East Commercial Corporation. before the appellate court.

On the same date, THE UNION or THE UNION filed The Ruling of the Appellate Court
the instant petition for certification election. It claimed The appellate court affirmed the ruling of the Secretary
that no certification election has been held among
them within the last 12 months prior to the filing of the Issue:
petition, and while there is another union registered Whether THE CORPORATIONs voluntary recognition
covering the same employees, namely Samahang of SMSLEC was validly done while a legitimate labor
Manggawa sa SLEC [SMSLEC], it has not been organization was in existence in the bargaining unit.
recognized as the exclusive bargaining agent of [THE
CORPORATIONs] employees. Held:
NO. The fundamental factors in determining the
On November 2001, THE CORPORATION or THE appropriate collective bargaining unit are: (1) the will of
CORPORATION filed a motion to dismiss the petition. the employees (Globe Doctrine); (2) affinity and unity
It averred that it has voluntarily recognized SMSLEC of the employees interest, such as substantial
as the exclusive bargaining agent of its regular rank- similarity of work and duties, or similarity of
and-file employees, and that collective bargaining compensation and working conditions (Substantial
negotiations already commenced between them. THE Mutual Interests Rule); (3) prior collective bargaining
CORPORATION argued that the petition should be history; and (4) similarity of employment status.
dismissed for violating the one year and negotiation
bar rules under the Omnibus Rules Implementing the (eto yung important)
Labor Code. The UNIONS initial problem was that they constituted
a legitimate labor organization representing a non-
The CBA between SMSLEC and the corporation was appropriate bargaining unit. However, The union
ratified by its rank-and-file employees and registered subsequently re-registered as THE UNION, limiting its
with DOLE. members to the rank-and-file of THE CORPORATION.
THE CORPORATION cannot ignore the union was a
In the meantime, on December 2001, the union filed its legitimate labor organization at the time of THE
Opposition to THE CORPORATIONS CORPORATIONs voluntary recognition of SMSLEC.
Motion to Dismiss questioning the validity of the
voluntary recognition of [SMSLEC] by [THE THE CORPORATION and SMSLEC cannot, by
CORPORATION] and their consequent negotiations themselves, decide whether CLUP-THE
and execution of a CBA. According to [THE UNION], CORPORATION and its Affiliates Workers Union
the voluntary recognition of [SMSLEC] by [THE represented an appropriate bargaining unit. The
CORPORATION] violated the requirements for inclusion in the union of disqualified employees is not
voluntary recognition, i.e., non-existence of another among the grounds for cancellation of registration,
labor organization in the same bargaining unit. It unless such inclusion is due to misrepresentation,
pointed out that the time of the voluntary recognition false statement or fraud under the circumstances.
on 20 July 2001, appellants registration which covers
the same group of employees covered by Samahang The union having been validly issued a certificate of
Manggagawa sa Sta. Lucia East Commercial, was registration, should be considered as having acquired
existing and has neither been cancelled or abandoned. juridical personality which may not be attacked
collaterally. The proper procedure for THE
The Med-Arbiters Ruling CORPORATION is to file a petition for cancellation of

20
certificate of registration of CLUP-THE Federation on the ground of prohibited mixture of
CORPORATION and its Affiliates Workers Union and supervisory and rank-and-file employees and non-
not to immediately commence voluntary recognition compliance with the attestation clause under
proceedings with SMSLEC. paragraph 2 of Article 235 of the Labor Code.

SAMAHAN NG MGA MANGGAGAWA SA SAMMA CAs Ruling


LAKAS SA INDUSTRIYA NG KAPATIRANG HALIGI CA reversed SOLs decision. CA held that
NG ALYANSA (SAMMALIKHA) V. SAMMA Administrative Circular No. 04-94 which required the
CORPORATION filing of a certificate of non-forum shopping applied to
March 13, 2009 petitions for certification election. It also ruled that the
Secretary of Labor erred in granting the appeal despite
Samahan ng mga Manggagawa sa Samma Lakas sa the lack of proof of service on respondent. Lastly, it
Industriya ng Kapatirang Haligi ng Alyansa (SAMMA- found that petitioner had no legal standing to file the
LIKHA) filed a petition for certification election on July petition for certification election because its members
24, 2001. It claimed that: (1) it was a local chapter of were a mixture of supervisory and rank-and-file
the LIKHA Federation, a legitimate labor organization employees.
registered with the DOLE; (2) it sought to represent all
the rank-and-file employees of respondent Samma Issues:
Corporation; (3) there was no other legitimate labor 1. Whether a certificate for non-forum shopping
organization representing these rank-and-file is required in a petition for certification
employees; (4) respondent was not a party to any election. NO
collective bargaining agreement and (5) no certification 2. Whether SAMMA LIKHA had the legal
or consent election had been conducted within the personality to file the petition for certification
employer unit for the last 12 months prior to the filing election. NO.
of the petition.
1. REQUIREMENT OF CERTIFICATE OF NON-
Samma Corp. moved for the dismissal of the petition FORUM SHOPPING IS NOT REQUIRED IN A
arguing that (1) LIKHA Federation failed to establish its PETITION FOR CERTIFICATION ELECTION.
legal personality; (2) petitioner failed to prove its
existence as a local chapter; (3) it failed to attach the The requirement for a certificate of non-forum
certificate of non-forum shopping and (4) it had a shopping refers to complaints, counter-claims, cross-
prohibited mixture of supervisory and rank-and-file claims, petitions or applications where contending
employees. parties litigate their respective positions regarding the
claim for relief of the complainant, claimant, petitioner
Med-Arbiters Ruling or applicant. A certification proceeding, even though
Med-Arbiter dismissed the petition on the following initiated by a petition, is not a litigation but an
grounds: (1) lack of legal personality for failure to investigation of a non-adversarial and fact-finding
attach the certificate of registration purporting to show character.
its legal personality; (2) prohibited mixture of rank-and-
file and supervisory employees and (3) failure to Such proceedings are not predicated upon an
submit a certificate of non-forum shopping. allegation of misconduct requiring relief, but,
rather, are merely of an inquisitorial nature. The
Petitioner moved for MR. The Regional Director of Board's functions are not judicial in nature, but are
DOLE forwarded the case to the Secretary of Labor. merely of an investigative character. The object of the
During pendency of the petition, Samma Corp. filed a proceedings is not the decision of any alleged
petition for cancellation of petitioners union registration commission of wrongs nor asserted deprivation of
in the DOLE Regional Office IV. rights but is merely the determination of proper
bargaining units and the ascertainment of the will and
Sec. of Labors Ruling choice of the employees in respect of the selection of a
Reversed the order of the med-arbiter. SOL ruled that bargaining representative.
the legal personality of a union cannot be
collaterally attacked but may only be questioned in Under the omnibus rules implementing the Labor Code
an independent petition for cancellation of as amended by D.O. No. 9, the PCE is supposed to be
registration. Thus, he directed the holding of a filed in the Regional Office which has jurisdiction over
certification election among the rank-and-file the principal office of the employer or where the
employees of respondent, subject to the usual pre- bargaining unit is principally situated. The rules further
election conference and inclusion-exclusion provide that where two or more petitions involving the
proceedings. same bargaining unit are filed in one Regional Office,
the same shall be automatically consolidated. Hence,
Meanwhile, Director of DOLE revoked the charter the filing of multiple suits and the possibility of
certificate of SAMMA-LIKHA as local chapter of LIKHA conflicting decisions will rarely happen in this

21
proceeding and, if it does, will be easy to discover. it could only be filed during the 60-day freedom period
of the current CBA. The Secretary of Labor and
2. LEGAL PERSONALITY OF PETITIONER Employment affirmed said decision, observing the
The erroneous inclusion of one supervisory employee contract bar rule.
in the union of rank-and-file employees was not a A second petition for certification election was filed.
ground to impugn its legitimacy as a legitimate labor The same was dismissed by the Med-Arbiter and the
organization which had the right to file a petition for Secretary of Labor based on the abovementioned
certification election. grounds. A third petition for certification election, now
within the freedom period, was filed. Med-Arbiter
LIKHA was granted legal personality as a federation. dismissed for non-existence of employer-employee
With certificates of registration issued in their favor, relationship and res judicata having set in.
they are clothed with legal personality as legitimate
labor organizations. ISSUE: Is the case barred by res judicata or
conclusiveness of judgment?
Such legal personality cannot thereafter be subject to
collateral attack, but may be questioned only in an HELD: NO.
independent petition for cancellation of certificate of The doctrine of res judicata provides that a final
registration. Unless petitioners union registration is judgment or decree on the merits by a court of
cancelled in independent proceedings, it shall continue competent jurisdiction is conclusive of the rights of the
to have all the rights of a legitimate labor organization, parties or their privies in all later suits on points and
including the right to petition for certification election. matters determined in the former suit. The elements
of res judicata are: (1) the judgment sought to bar the
Samma Corp. filed a petition for cancellation of the new action must be final; (2) the decision must have
registration of petitioner on December 14, 2002. In a been rendered by a court having jurisdiction over the
resolution dated April 14, 2003, petitioners charter subject matter and the parties; (3) the disposition of
certificate was revoked by the DOLE. But on May 6, the case must be a judgment on the merits; and (4)
2003, petitioner moved for the reconsideration of this there must be as between the first and second action,
resolution. Neither of the parties alleged that this identity of parties, subject matter, and causes of
resolution revoking petitioners charter certificate had action.
attained finality. However, in this petition, petitioner
prayed that its charter certificate be reinstated in the Here, the first three requisites are present. However,
roster of active legitimate labor [organizations]. The the fourth element is not. The third petition for
proceedings on a petition for cancellation of certification election was filed well within the 60-day
registration are independent of those of a petition for freedom period.
certification election. This case originated from the
latter. If it is shown that petitioners legal personality There is no identity of causes of action to speak of
had already been revoked or cancelled with finality in since in the first petition, the union has no cause of
accordance with the rules, then it is no longer a action while in the third, a cause of action already
legitimate labor organization with the right to petition exists for the union as they are now legally allowed to
for a certification election. challenge the status of SMCGC-SUPER as exclusive
bargaining representative.
A FINAL NOTE
Respondent, as employer, had been the one opposing NATIONAL UNION OF WORKERS IN HOTELS,
the holding of a certification election among its rank- RESTAURANTS AND ALLIED INDUSTRIES-
and-file employees. This should not be the case. We MANILA PAVILION HOTEL
have already declared that, in certification elections, CHAPTER, Petitioner, vs. SECRETARY OF LABOR
the employer is a bystander; it has no right or material AND EMPLOYMENT, BUREAU OF LABOR
interest to assail the certification election. RELATIONS, HOLIDAY INN MANILA PAVILION
HOTEL LABOR UNION AND ACESITE PHILIPPINES
CHRIS GARMENTS CORPORATION, petitioner, vs. HOTEL CORPORATION, Respondents.
HON. PATRICIA A. STO. TOMAS and CHRIS G.R. No. 181531 July 31, 2009
GARMENTS WORKERS UNION-PTGWO LOCAL CARPIO MORALES, J.:
CHAPTER No. 832, respondents.
G.R. No. 167426 January 12, 2009 FACTS: Certification election was conducted among
QUISUMBING, J.: the rank-and-file employees of Respondent Holiday
FACTS: Respondent Chris Garments Workers Union Inn Manila Pavilion Hotel. Out of the 346 votes cast, 22
PTGWO, Local Chapter No. 832 (Union) filed a petition were segregated. Contending unions referred the case
for certification election. Med-Arbiter dismissed said to the Med-Arbiter to determine which among said
petition finding that there was no employer-employee votes should be opened and tallied. 11 of said votes
relationship; that even if such relationship existed, the were segregated since they were cast by dismissed
petition will still fail due to the contract bar rule. Hence, employees, whose dismissal was pending before the

22
CA. 6 votes were cast by employees already numerical composition of the Union, and the election of
occupying supervisory positions. The last 5 votes were its officers.
cast by probationary employees. Med-Arbiter ruled for
the opening of 17 votes, particularly, those cast by 11 Going into specifics, Eagle Ridge alleged that the
dismissed employees and the 6 supposedly EREU declared in its application for registration having
supervisory employees. 30 members, when the minutes of its December 6,
2005 organizational meeting showed it only had 26
ISSUE: May employees on probationary status at members. The misrepresentation was exacerbated by
the time of the certification election be allowed to the discrepancy between the certification issued by the
vote, notwithstanding the pendency of an appeal Union secretary and president that 25 members
with the Secretary of Labor and Employment? actually ratified the constitution and by-laws on
December 6, 2005 and the fact that 26 members
HELD: YES. affixed their signatures on the documents, making one
In light of the pertinent provisions of D.O. No. 40-03, signature a forgery.
and the principle that all employees are, from the first
day of their employment, eligible for membership in a Finally, Eagle Ridge contended that five employees
labor organization, it is evident that the period of who attended the organizational meeting had
reckoning in determining who shall be included in the manifested the desire to withdraw from the union. The
list of eligible voters is, in cases where a timely appeal five executed individual affidavits or Sinumpaang
has been filed from the Order of the Med-Arbiter, the Salaysay on February 15, 2006, attesting that they
date when the Order of the Secretary of Labor and arrived late at said meeting which they claimed to be
Employment, whether affirming or denying the appeal, drinking spree; that they did not know that the
becomes final and executory. documents they signed on that occasion pertained to
The filing of an appeal to the SOLE from the Med- the organization of a union; and that they now wanted
Arbiters Order stays its execution, in accordance with to be excluded from the Union. The withdrawal of the
Sec. 21, and rationally, the Med-Arbiter cannot direct five, Eagle Ridge maintained, effectively reduced the
the employer to furnish him/her with the list of eligible union membership to 20 or 21, either of which is below
voters pending the resolution of the appeal. the mandatory minimum 20% membership
requirement under Art. 234(c) of the Labor Code.
During the pendency of the appeal, the employer may Reckoned from 112 rank-and-file employees of Eagle
hire additional employees. To exclude the employees Ridge, the required number would be 22 or 23
hired after the issuance of the Med-Arbiters Order but employees.
before the appeal has been resolved would violate the
guarantee that every employee has the right to be part The Union presented the duly accomplished union
of a labor organization from the first day of their membership forms of four additional members. And to
service. Even if the Implementing Rules gives the rebut the allegations in the affidavits of retraction of the
SOLE 20 days to decide the appeal from the Order of five union members, it presented the Sama-Samang
the Med-Arbiter, experience shows that it sometimes Sinumpaang Salaysay of eight union members;
takes months to be resolved. To rule then that only another Sama-Samang Sinumpaang Salaysay, of four
those employees hired as of the date of the issuance other union members; and the Sworn Statement of the
of the Med-Arbiters Order are qualified to vote would Unions legal counsel. These affidavits attested to the
effectively disenfranchise employees hired during the orderly and proper proceedings of the organizational
pendency of the appeal. More importantly, reckoning meeting on December 6, 2005.
the date of the issuance of the Med-Arbiters Order as
the cut-off date would render inutile the remedy of Issue:
appeal to the SOLE.
Did EREU commit fraud, misrepresentation and false
statement when it filed for its registration and did it fail
EAGLE RIDGE GOLF & COUNTRY CLUB V. CA, ET. to comply with the membership requirement for the
AL. registration as a labor organization?
G.R. No. 178989, March 18, 2010
Ruling:
Facts:
The Eagle Ridge Employees Union (EREU) filed a No. A scrutiny of the records fails to show any
petition for certification election in Eagle Ridge Golf & misrepresentation, false statement, or fraud committed
Country Club, docketed as Case No. RO400-0601-RU- by EREU to merit cancellation of its registration. The
002. Eagle Ridge opposed this petition,11 followed by Union submitted the required documents attesting to
its filing of a petition for the cancellation of EREU's the facts of the organizational meeting on December 6,
certificate of registration ascribing misrepresentation, 2005, the election of its officers, and the adoption of
false statement, or fraud to EREU in connection with the Unions constitution and by-laws. EREU complied
the adoption of its constitution and by-laws, the with the mandatory minimum 20% membership

23
requirement under Art. 234(c) when it had 30 condition of continued employment by the COMPANY,
employees as member when it registered. Any maintain their membership in the UNION in good
seeming infirmity in the application and admission of standing during the effectivity of the agreement. On
union membership, most especially in cases of May 16, 2000, (Atty. Fuentes) sent a letter to the
independent labor unions, must be viewed in favor of management of PRI demanding the termination of
valid membership. employees who allegedly campaigned for, supported
and signed the Petition for Certification Election of the
In the issue of the affidavits of retraction executed by Federation of Free Workers Union (FFW) during the
six union members, the probative value of these effectivity of the CBA. NAMAPRI-SPFL considered
affidavits cannot overcome those of the supporting said act of campaigning for and signing the petition for
affidavits of 12 union members and their counsel as to certification election of FFW as an act of disloyalty and
the proceedings and the conduct of the organizational a valid basis for termination for a cause in accordance
meeting on December 6, 2005. The DOLE Regional with its Constitution and By-Laws, and the terms and
Director and the BLR OIC Director obviously erred in conditions of the CBA, specifically Article II, Sections
giving credence to the affidavits of retraction, but not 6.1 and 6.2 on Union Security Clause. Eventually, the
according the same treatment to the supporting respondents were terminated.
affidavits. It is settled that affidavits partake the nature
of hearsay evidence, since they are not generally ISSUE: Whether or not an existing CBA can be given
prepared by the affiant but by another who uses his its full force and effect in all its terms and conditions
own language in writing the affiants statement, which including its union security clause, even beyond the 5-
may thus be either omitted or misunderstood by the year period when no new CBA has yet been entered
one writing them. It is required for affiants to re-affirm into?
the contents of their affidavits during the hearing of the
instant case for them to be examined by the opposing HELD: PRI anchored their decision to terminate
party, i.e., the Union. For their non-presentation, the respondents employment on Article 253 of the Labor
six affidavits of retraction are inadmissible as evidence Code which states that "it shall be the duty of both
against the Union in the instant case. Twenty percent parties to keep the status quo and to continue in full
(20%) of 112 rank-and-file employees in Eagle Ridge force and effect the terms and conditions of the
would require a union membership of at least 22 existing agreement during the 60-day period and/or
employees. When the EREU filed its application for until a new agreement is reached by the parties." It
registration on December 19, 2005, there were clearly claimed that they are still bound by the Union Security
30 union members. Thus, when the certificate of Clause of the CBA even after the expiration of the
registration was granted, there is no dispute that the CBA; hence, the need to terminate the employment of
Union complied with the mandatory 20% membership respondents. Petitioner's reliance on Article 253 is
requirement. Prior to their withdrawal, the six misplaced. At the expiration of the freedom period, the
employees who retracted were bona fide union employer shall continue to recognize the majority
members. With the withdrawal of six union members, status of the incumbent bargaining agent where no
there is still compliance with the mandatory petition for certification election is filed. Applying the
membership requirement under Art. 234(c), for the provision of Article 256 of the Labor Code, it can be
remaining 24 union members constitute more than the said that while it is incumbent for the employer to
20% membership requirement of 22 employees. continue to recognize the majority status of the
incumbent bargaining agent even after the expiration
PICOP RESOURCES, INC. V. TAECA of the freedom period, they could only do so when no
August 9, 2010 petition for certification election was filed. The reason
is, with a pending petition for certification, any such
FACTS: On February 13, 2001, respondents filed a agreement entered into by management with a labor
Complaint for unfair labor practice, illegal dismissal organization is fraught with the risk that such a labor
and money claims against petitioner PICOP union may not be chosen thereafter as the collective
Resources, Inc. Respondents were regular rank-and- bargaining representative. The provision for status
file employees of PRI and bona fide members quo is conditioned on the fact that no certification
of Nagkahiusang Mamumuo sa PRI Southern election was filed during the freedom period. Any other
Philippines Federation of Labor (NAMAPRI-SPFL), view would render nugatory the clear statutory policy
which is the collective bargaining agent for the rank- to favor certification election as the means of
and-file employees of petitioner PRI. PRI has a ascertaining the true expression of the will of the
collective bargaining agreement (CBA) with NAMAPRI- workers as to which labor organization would
SPFL for a period of five (5) years from May 22, 1995 represent them.
until May 22, 2000. The CBA contained union security
provisions on maintenance of membership which LEGEND INTERNATIONAL RESORTS V.
provides that all employees within the appropriate KILUSANG MANGGAGAWA NG LEGEND
bargaining unit who are members of the UNION at the February 23, 2011
time of the signing of this AGREEMENT shall, as a

24
FACTS: On June 6, 2001, KML filed with the Med-Arbitrater certificate of registration is issued to a union, its legal
a Petition for Certification Election. KML alleged that it is a personality cannot be subject to a collateral attack. In
legitimate labor organization of the rank and file employees may be questioned only in an independent petition for
of Legend International Resorts Limited cancellation in accordance with Section 5 of Rule V,
(LEGEND). LEGEND moved to dismiss the petition alleging Book V of the Implementing Rules.
that KML is not a legitimate labor organization because its
membership is a mixture of rank and file and supervisory SAMAHANG MANGGAGAWA SA CHARTER
employees in violation of Article 245 of the Labor CHEMICAL SOLIDARITY OF UNIONS IN THE
Code. LEGEND also claimed that KML committed acts of PHILIPPINES FOR EMPOWERMENT AND
fraud and misrepresentation when it made it appear that REFORMS (SMCC-SUPER), ZACARRIAS JERRY
certain employees attended its general membership VICTORIO-Union President, Petitioner,
meeting on April 5, 2001 when in reality some of them were vs.
either at work; have already resigned as of March 2001; or CHARTER CHEMICAL and COATING
were abroad. In its Comment, KML argued that even if 41 of CORPORATION, Respondent.
its members are indeed supervisory employees and G.R. No. 169717, March 16, 2011
therefore excluded from its membership, the certification
election could still proceed because the required number of Facts: On February 19, 1999, petitioner SMCC-
the total rank and file employees necessary for certification SUPER filed a petition for certification election among
purposes is still sustained. KML also claimed that its the regular rank-and-file employees of respondent
legitimacy as a labor union could not be collaterally attacked company. Respondent company filed an Answer with
in the certification election proceedings but only through a Motion to Dismiss because of the inclusion of
separate and independent action for cancellation of union supervisory employees within petitioner union.The
registration. Finally, as to the alleged acts of Med-Arbiter dismissed the petition for certification
misrepresentation, KML asserted that LEGEND failed to election.On appeal, the Department of Labor and
substantiate its claim. Employment (DOLE) reversed the Med-Arbiters ruling.
The Court of Appeals (CA) nullified the CAs ruling.
ISSUE: Whether or not the legitimacy of the legal Issue: Whether or not the alleged mixture of rank-and-
personality of KML may be collaterally attacked in a petition file and supervisory employees of petitioner unions
for certification election? membership is a ground for the cancellation of
petitioner unions legal personality and dismissal of the
HELD: No. the legitimacy of the legal personality of KML petition for certification election?
cannot be collaterally attacked in a petition for certification Held: No. While there is a prohibition against the
election proceeding. This is in consonance with our ruling mingling of supervisory and rank-and-file employees in
in Laguna Autoparts Manufacturing Corporation v. Office of one labor organization, the Labor Code does not
the Secretary, Department of Labor and Employment that provide for the effects thereof. Thus, the Court held
such legal personality may not be subject to a collateral that after a labor organization has been registered, it
attack but only through a separate action instituted may exercise all the rights and privileges of a
particularly for the purpose of assailing it. The Court further legitimate labor organization. Any mingling between
held therein that to raise the issue of the respondent unions supervisory and rank-and-file employees in its
legal personality is not proper in this case. The membership cannot affect its legitimacy for that is not
pronouncement of the Labor Relations Division Chief, that among the grounds for cancellation of its registration,
the respondent union acquired a legal personality x x x unless such mingling was brought about by
cannot be challenged in a petition for certification election. misrepresentation, false statement or fraud under
The discussion of the Secretary of Labor and Employment Article 239 of the Labor Code.
on this point is also enlightening. Section 5, Rule V of D.O. 9
is instructive on the matter. It provides that the legal STA. LUCIA EAST COMMERCIAL CORPORATION
personality of a union cannot be the subject of collateral (SLECC), Petitioner,
attack in a petition for certification election, but may be vs.
questioned only in an independent petition for cancellation HON. SECRETARY OF LABOR AND EMPLOYMENT
of union registration. This has been the rule since NUBE v. and STA. LUCIA EAST COMMERCIAL
Minister of Labor, 110 SCRA 274 (1981). What applies in CORPORATION WORKERS ASSOCIATION (CLUP-
this case is the principle that once a union acquires a SLECCWA), Respondents.
legitimate status as a labor organization, it continues as G.R. No. 162355 August 14, 2009
such until its certificate of registration is cancelled or revoked
in an independent action for cancellation. The legal Facts: On 27 February 2001, Confederated Labor
personality of a legitimate labor organization x x x Union of the Philippines (CLUP), in behalf of its
cannot be subject to a collateral attack. The law is very chartered local, instituted a petition for certification
clear on this matter. x x x The Implementing Rules election among the regular rank-and-file employees of
stipulate that a labor organization shall be deemed Sta. Lucia East Commercial Corporation and its
registered and vested with legal personality on the Affiliates. The Med-Arbiter ordered the dismissal of the
date of issuance of its certificate of registration. Once a petition due to inappropriateness of the bargaining

25
unit. CLUP-SLECC and its Affiliates Workers Union employer may voluntarily recognize the representation
reorganized itself and re-registered as CLUP-Sta. status of a union in unorganized
Lucia East Commercial Corporation Workers establishments.SLECC WAS NOT AN
Association (CLUP-SLECCWA) limiting its UNORGANIZED ESTABLISHMENT WHEN IT
membership to the rank-and-file employees of Sta. VOLUNTARILY RECOGNIZED SMSLEC AS ITS
Lucia East Commercial Corporation. It was issued EXCLUSIVE BARGAINING REPRESENTATIVE ON
Certificate of Creation of a Local Chapter. It thereafter 20 JULY 2001. CLUP-SLECC AND ITS AFFILIATES
filed a petition for certification election. Petitioner WORKERS UNION FILED A PETITION FOR
SLECC filed a motion to dismiss. It averred that it has CERTIFICATION ELECTION ON 27 FEBRUARY 2001
voluntarily recognized Samahang Manggagawa sa AND THIS PETITION REMAINED PENDING AS OF
Sta. Lucia East Commercial (SMSLEC) on 20 July 20 JULY 2001. THUS, SLECCS VOLUNTARY
2001 as the exclusive bargaining agent of its regular RECOGNITION OF SMSLEC ON 20 JULY 2001, THE
rank-and-file employees, and that collective bargaining SUBSEQUENT NEGOTIATIONS AND RESULTING
negotiations already commenced between them. REGISTRATION OF A CBA EXECUTED BY SLECC
SLECC argued that the petition should be dismissed AND SMSLEC ARE VOID AND CANNOT BAR CLUP-
for violating the one year and negotiation bar. The SLECCWAS PRESENT PETITION FOR
Med-Arbiter ruled dismissed the petition for CERTIFICATION ELECTION.
certification election. The Secretary of Labor and
Employment, on appeal, reversed the decision of the COASTAL SUBIC BAY TERMINAL V. DOLE
Med-Arbiter. The Court of Appeals (CA) affirmed the November 20, 2006
ruling of the Secretary.
Issue: Whether or not SLECCs voluntary recognition of FACTS: Coastal Bay Subic Terminal Inc. RANK-AND-
SMSLEC was done while a legitimate labor FILE UNION (CSBTI-RFU) and Coastal Bay Subic
organization was in existence in the bargaining unit? Terminal Inc. SUPERVISORY UNION (CSBTI-SU)
Held: Yes. Any applicant labor organization shall filed separate petitions for certification election. The
acquire legal personality and shall be entitled to the employer opposed, citing that both were not legitimate
rights and privileges granted by law to legitimate labor labor organizations and that the proposed Bargaining
organizations upon issuance of the certificate of Units were not particularly described. The rank and file
registration.CLUP-SLECC and its Affiliates Workers union insists that it has been issued a chartered
Unions initial problem was that they constituted a certificate by ALU and the supervisory union, by the
legitimate labor organization representing a non- APSOTEU. The petition was dismissed by the Med
appropriate bargaining unit. However, CLUP-SLECC Arbiter, holding that ALU and APSOTEU are one and
and its Affiliates Workers Union subsequently re- the same federation and that in effect, the supervisory
registered as CLUP-SLECCWA, limiting its members and RNF unions were in effect, affiliated with only one
to the rank-and-file of SLECC. SLECC cannot ignore federation.
that CLUP-SLECC and its Affiliates Workers Union
was a legitimate labor organization at the time of ISSUE: 1. Whether or not the rank and file and
SLECCs voluntary recognition of SMSLEC. SLECC supervisory unions were legitimate in a sense that they
and SMSLEC cannot, by themselves, decide whether could file
CLUP-SLECC and its Affiliates Workers Union petitions for certification election.
represented an appropriate bargaining unit.The 2. Can supervisory employees join Rank and File
inclusion in the union of disqualified employees is not unions?
among the grounds for cancellation of registration,
unless such inclusion is due to misrepresentation, RULING: 1. Yes. A local union does not owe its
false statement or fraud under the circumstances existence to the federation with which it is affiliated. It
enumerated in Article 239 of the Labor Code.THUS, is a separate and distinct voluntary association owing
CLUP-SLECC AND ITS AFFILIATES WORKERS its creation to the will of its members. Mere affiliation
UNION, HAVING BEEN VALIDLY ISSUED A does not divest the local union of its own personality;
CERTIFICATE OF REGISTRATION, SHOULD BE neither does it give the mother federation the license to
CONSIDERED AS HAVING ACQUIRED JURIDICAL act independently of the local union. It only gives rise
PERSONALITY WHICH MAY NOT BE ATTACKED to a contract of agency, where the former acts in
COLLATERALLY. THE PROPER PROCEDURE FOR representation of the latter. Hence, local unions are
SLECC IS TO FILE A PETITION FOR considered principals while the federation is deemed to
CANCELLATION OF CERTIFICATE OF be merely their agent. As such principals, the unions
REGISTRATION2 OF CLUP-SLECC AND ITS are entitled to exercise the rights and privileges of a
AFFILIATES WORKERS UNION AND NOT TO legitimate labor organization, including the right to
IMMEDIATELY COMMENCE VOLUNTARY seek certification as the sole and exclusive bargaining
RECOGNITION PROCEEDINGS WITH SMSLEC.The agent in the appropriate employer unit.

2. No. Under Article 245 of the Labor Code,


supervisory employees are not eligible for membership

26
in a labor union of rank-and-file employees. The ISSUE: Whether or not the Secretary of DOLE can
supervisory employees are allowed to form their own take cognizance of matters beyond the subject of the
union but they are not allowed to join the rank-and-file notice of strike in CBA negotiations?
union because of potential conflicts of interest. Further,
to avoid a situation where supervisors would merge RULING:
with the rank-and-file or where the supervisors labor Yes. The Secretary of DOLE may. Based on the
union would represent conflicting interests, a local Notices of Strike filed by UFE-DFA-KMU, the
supervisors union should not be allowed to affiliate Secretary of the DOLE rightly decided on matters of
with the national federation of unions of rank-and-file substance. That the union later on changed its mind is
employees where that federation actively participates of no moment because to give premium to such would
in the union activity within the company. Thus, the make the legally mandated discretionary power of the
limitation is not confined to a case of supervisors Dole Secretary subservient to the whims of the parties.
wanting to join a rank-and-file union. The prohibition It was UFE-DFA-KMU which first alleged a bargaining
extends to a supervisors local union applying for deadlock as the basis for the filing of its Notice of
membership in a national federation the members of Strike; and at the time of the filing of the first Notice of
which include local unions of rank-and-file employees. Strike, several conciliation conferences had already
been undertaken where both parties had already
[med arbiter denial of PCE affirmed by CA, SC] exchanged with each other their respective CBA
proposals. In fact, during the conciliation meetings
[note: Amendatory laws provide that supervisory before the NCMB, but prior to the filing of the notices
employees MAY join RNF unions however for of strike, the parties had already delved into matters
purposes of determination of Bargaining Unit affecting the meat of the collective bargaining
membership, supervisory employees shall simply be agreement.
deemed not included.]
STANDARD CHARTERED BANK EMPLOYEES
UNION V. CONFESOR
COLLECTIVE BARGAINING
FACTS:
Standard Chartered Bank (the Bank, for brevity) is a
UNION OF FILIPRO EMPLOYEES V. NESTLE foreign banking corporation doing business in the
PHILS. Philippines. The exclusive bargaining agent of the rank
March 3, 2008 and file employees of the Bank is the Standard
Chartered Bank Employees Union (the Union, for
Union of Filipro Employees Drug Food and Allied brevity).
Industries Union Kilusang Mayo Uno was the sole
and exclusive bargaining agent of the rank-and-file Before the commencement of the negotiation, the
employees of Nestle belonging to Alabang and Union, through Divinagracia, suggested to the Banks
Cabuyao plants. Prior the expiration of the CBA, they Human Resource Manager and head of the
signified their intent to renegotiate a new CBA. Nestle negotiating panel, Cielito Diokno, that the bank
informed them about its counter proposal and that it lawyers should be excluded from the negotiating
implemented rules to govern the conduct of CBA team. The Bank acceded.[11] Meanwhile, Diokno
negotiations. Due to a failure to reach an agreement, suggested to Divinagracia that Jose P. Umali, Jr., the
conciliation proceedings bargaining deadlock ensued. President of the National Union of Bank
A notice of strike was filed by the union prediated on Employees (NUBE), the federation to which the
Nestles alleged ULP (bargaining in bad faith by Union was affiliated, be excluded from the Unions
setting preconditions in the ground rules and/or negotiating panel.[12] However, Umali was retained
refusing to include the issue of the retirement plan in as a member thereof.
the CBA negotiations. The Secretary assumed
jurisdiction over the subject labor dispute. On March 12, 1993, the parties met and set the ground
rules for the negotiation. Diokno suggested that the
Nestl and UFE-DFA-KMU filed their respective negotiation be kept a family affair. The proposed non-
position papers. Nestl addressed several issues economic provisions of the CBA were discussed
concerning economic provisions of the CBA as well as first.[13] Even during the final reading of the non-
the non-inclusion of the issue of the Retirement Plan in economic provisions on May 4, 1993, there were still
the collective bargaining negotiations. On the other provisions on which the Union and the Bank could not
hand, UFE-DFA-KMU limited itself to the issue of agree. Temporarily, the notation DEFERRED was
whether or not the retirement plan was a mandatory placed therein. Towards the end of the meeting, the
subject in its CBA negotiation. Union manifested that the same should be changed to
DEADLOCKED to indicate that such items remained
unresolved. Both parties agreed to place the notation
DEFERRED/DEADLOCKED.

27
The Union alleges that the Bank violated its duty to
The petitioner asserts that the private respondent bargain; hence, committed ULP under Article 248(g)
committed ULP, i.e., interference in the selection of the when it engaged in surface bargaining. It alleged that
Unions negotiating panel, when Cielito Diokno, the the Bank just went through the motions of bargaining
Banks Human Resource Manager, suggested to the without any intent of reaching an agreement, as
Unions President Eddie L. Divinagracia that Jose P. evident in the Banks counter-proposals.
Umali, Jr., President of the NUBE, be excluded from
the Unions negotiating panel. In support of its claim, Surface bargaining is defined as going through the
Divinagracia executed an affidavit, stating that prior to motions of negotiating without any legal intent to reach
the commencement of the negotiation, Diokno an agreement.[50] The resolution of surface bargaining
approached him and suggested the exclusion of Umali allegations never presents an easy issue. The
from the Unions negotiating panel, and that during the determination of whether a party has engaged in
first meeting, Diokno stated that the negotiation be unlawful surface bargaining is usually a difficult one
kept a family affair. because it involves, at bottom, a question of the intent
of the party in question, and usually such intent can
ISSUE(1): Whether or not the Union was able to only be inferred from the totality of the challenged
substantiate its claim of unfair labor practice against partys conduct both at and away from the bargaining
the Bank arising from the latters alleged interference table. It involves the question of whether an employers
with its choice of negotiator; surface bargaining; conduct demonstrates an unwillingness to bargain in
making bad faith non-economic proposals; and refusal good faith or is merely hard bargaining.
to furnish the Union with copies of the relevant data
The minutes of meetings from March 12, 1993 to June
RULING: NO 15, 1993 do not show that the Bank had any intention
The circumstances that occurred during the of violating its duty to bargain with the Union. Records
negotiation do not show that the suggestion made by show that after the Union sent its proposal to the Bank
Diokno to Divinagracia is an anti-union conduct from on February 17, 1993, the latter replied with a list of its
which it can be inferred that the Bank consciously counter-proposals on February 24, 1993. Thereafter,
adopted such act to yield adverse effects on the free meetings were set for the settlement of their
exercise of the right to self-organization and collective differences. The minutes of the meetings show that
bargaining of the employees, especially considering both the Bank and the Union exchanged economic and
that such was undertaken previous to the non-economic proposals and counter-proposals.
commencement of the negotiation and simultaneously
with Divinagracias suggestion that the bank lawyers be The Union has not been able to show that the Bank
excluded from its negotiating panel. had done acts, both at and away from the bargaining
table, which tend to show that it did not want to reach
The records show that after the initiation of the an agreement with the Union or to settle the
collective bargaining process, with the inclusion of differences between it and the Union. Admittedly, the
Umali in the Unions negotiating panel, the negotiations parties were not able to agree and reached a
pushed through. The complaint was made only on deadlock. However, it is herein emphasized that the
August 16, 1993 after a deadlock was declared by the duty to bargain does not compel either party to
Union on June 15, 1993. agree to a proposal or require the making of a
concession.[53] Hence, the parties failure to agree
It is clear that such ULP charge was merely an did not amount to ULP under Article 248(g) for
afterthought. The accusation occurred after the violation of the duty to bargain.
arguments and differences over the economic
provisions became heated and the parties had become ISSUE(2): whether or not the petitioner is estopped
frustrated. It happened after the parties started to from filing the instant action.
involve personalities. As the public respondent noted, RULING: NO
passions may rise, and as a result, suggestions given In the case, however, the approval of the CBA and the
under less adversarial situations may be colored with release of signing bonus do not necessarily mean that
unintended meanings. Such is what appears to have the Union waived its ULP claim against the Bank
happened in this case. during the past negotiations. After all, the conclusion of
the CBA was included in the order of the SOLE, while
The Duty to Bargain Collectively the signing bonus was included in the CBA itself.
If at all, the suggestion made by Diokno to Moreover, the Union twice filed a motion for
Divinagracia should be construed as part of the normal reconsideration respecting its ULP charges against the
relations and innocent communications, which are all Bank before the SOLE.
part of the friendly relations between the Union and
Bank. The Union Did Not Engage
In Blue-Sky Bargaining

28
We, likewise, do not agree that the Union is guilty of They extended the original five-year period of the CBA
ULP for engaging in blue-sky bargaining or making by four (4) months.
exaggerated or unreasonable proposals.[59] The Bank
failed to show that the economic demands made by On January 21, 2003, nine (9) days before the January
the Union were exaggerated or unreasonable. The 30, 2003 expiration of the originally-agreed five-year
minutes of the meeting show that the Union based its CBA term (and four months and nine days away from
economic proposals on data of rank and file the expiration of the amended CBA period), the
employees and the prevailing economic benefits respondent (SANAMA-SIGLO) filed before the
received by bank employees from other foreign banks Department of Labor and Employment (DOLE) a
doing business in the Philippines and other branches petition for certification election for the same rank-and-
of the Bank in the Asian region. file unit covered by the FVCLU-PTGWO CBA.

GENERAL MILLING CORPORATION VS CA FEB 11, Issue:


2004 W/N the extension of the life of the CBA also extended
the exclusive bargaining status as well
On April 28, 1989, GMC and the union concluded a
collective bargaining agreement (CBA) which included Ruling:
the issue of representation effective for a term of three NO. By express provision of Article 253-A, the
years. The day before the expiration of the CBA, the exclusive bargaining status cannot go beyond 5 years
union sent GMC a proposed CBA, with a request that and the representation status is a legal matter not for
a counter-proposal be submitted within ten (10) days. the parties to agree upon. Despite the agreement to
However, GMC had received collective and individual extend the life of the CBA beyond the 5-yr period, the
letters from workers who stated that they had exclusive bargaining status is effective only for five
withdrawn from their union membership, on grounds of years and hence, it can be challenged within the 60-
religious affiliation and personal differences. Believing day period prior to the expiration of the CBAs first five
that the union no longer had standing to negotiate a years.
CBA, GMC did not send any counter-proposal.
RFM CORPORATION V. KAMPI-NAFLU-KMU
Issue: G.R. No. 162324, February 4, 2009
W/N GMC is guilty for ULP for violating the duty to Carpio-Morales, J.
bargain
DOCTRINE:
Ruling: If the terms of a CBA are clear and have no doubt
YES. The law mandates that the representation upon the intention of the contracting parties, as in the
provision of a CBA should last for five years.The herein questioned provision, the literal meaning thereof
relation between labor and management should be shall prevail.
undisturbed until the last 60 days of the fifth year. It is
indisputable that when the union requested for a FACTS:
renegotiation of the economic terms of the CBA on Petitioner RFM Corporation (RFM) is a domestic
November 29, 1991, it was still the certified collective corporation engaged in flour-milling and animal feeds
bargaining agent of the workers. The withdrawal of manufacturing. Sometime in 2000, its Flour Division
some union members from the union will not affect the and SFI Feeds Division entered into collective
majority status of the union as the exclusive bargaining bargaining agreements (CBAs) with their respective
agent. GMC should have responded and kept its duty labor unions, the Kasapian ng Manggagawang
to bargain collectively. Pinagkaisa-RFM (KAMPI-NAFLU-KMU) for the Flour
Division, and Sandigan at Ugnayan ng
FVC LABOR UNION PHIL. TRANSPORT AND Manggagawang Pinagkaisa-SFI (SUMAPI-NAFLU-
GENERAL WORKERS ASSOCIATION VS. KMU) for the Feeds Division (respondents). The CBAs,
SANAMA-FVC-SIGLO which contained similar provisions, were effective for
five years, from July 1, 2000 up to June 30, 2005. A
Facts: On December 22, 1997, the petitioner FVCLU- section of the CBAs provides that the company should
PTGWO the recognized bargaining agent of the make payment if Black Saturday, November 1, and
rank-and-file employees of the FVC Philippines, December 31 were declared as special holidays by the
signed a five-year collective bargaining agreement National Government.
(CBA) with the company. The five-year CBA period
was from February 1, 1998 to January 30, 2003. At the During the first year of the effectivity of the CBAs in
end of the 3rd year of the five-year term and pursuant 2000, December 31 which fell on a Sunday was
to the CBA, FVCLU-PTGWO and the company declared by the national government as a special
entered into the renegotiation of the CBA and holiday. Respondents thus claimed payment of their
modified, among other provisions, the CBAs duration. members salaries, invoking the above-stated CBA
provision. Petitioner refused the claims for payment,

29
averring that December 31, 2000 was not to the privileges and benefits enjoyed by regular
compensable as it was a rest day. The controversy employees. ABS-CBN alleged that the petitioners
resulted in a deadlock, drawing the parties to submit services were contracted on various dates by its Cebu
the same for voluntary arbitration. The voluntary station as independent contractors/off camera talents,
arbitrator ruled in favor of the respondents and upon and they were not entitled to regularization in these
appeal, the Court of Appeals affirmed the VAs capacities. Thus they are not entitled to the benefits
decision. granted under their collective bargaining agreement.

ISSUE: On January 17, 2002, Labor Arbiter Rendoque


Whether or not the employees are entitled to the rendered his decision5 holding that the petitioners were
questioned salary according to the provision of the regular employees of ABS-CBN, not independent
CBA. contractors, and are entitled to the benefits and
privileges of regular employees. Upon appeal, the
HELD: NLRC affirmed the Labor Arbiters Decision.
Yes. If the terms of a CBA are clear and have no doubt
upon the intention of the contracting parties, as in the ISSUE:
herein questioned provision, the literal meaning thereof
shall prevail. That is settled.5 As such, the daily-paid Whether or not the petitioners are entitled to the
employees must be paid their regular salaries on the benefits under the CBA.
holidays which are so declared by the national
government, regardless of whether they fall on rest HELD:
days. The CBA is the law between the parties, hence, Yes. Under the terms of the CBA, the petitioners are
they are obliged to comply with its provisions.7 Indeed, members of the appropriate bargaining unit because
if petitioner and respondents intended the provision in they are regular rank-and-file employees and do not
question to cover payment only during holidays falling belong to any of the excluded categories. Specifically,
on work or weekdays, it should have been so nothing in the records shows that they are supervisory
incorporated therein. or confidential employees; neither are they casual nor
Petitioner maintains, however, that the parties failed to probationary employees.
foresee a situation where the special holiday would fall
on a rest day. The Court is not persuaded. The Labor The Supreme Court sees no merit in ABS-CBNs
Code specifically enjoins that in case of doubt in the arguments that the petitioners are not entitled to CBA
interpretation of any law or provision affecting labor, it benefits because: (1) they did not claim these benefits
should be interpreted in favor of labor. in their position paper; (2) the NLRC did not
categorically rule that the petitioners were members of
FULACHE V. ABS-CBN BROADCASTING the bargaining unit; and (3) there was no evidence of
CORPORATION this membership. CBA coverage is not only a question
G.R. No. 183810, January 21, 2010 of fact, but of law and contract. The factual issue is
Brion, J. whether the petitioners are regular rank-and-file
employees of ABS-CBN. The tribunals below uniformly
DOCTRINE: answered this question in the affirmative.
CBA coverage is not only a question of fact, but of law
and contract. EMPLOYEES UNION OF BAYER V. BAYER
PHILIPPINES
FACTS: December 6, 2010

Petitioners, who worked as drivers, cameramen, and FACTS:


editors for respondent, filed several complaints against Employees Union of Bayer Philippines is the exclusive
the latter for unfair labor practice, regularization, and bargaining agent of all rank-and-file employees of
money claims. The petitioners alleged that on Bayer Philippines (Bayer). In 1997, its president
December 17, 1999, ABS-CBN and the ABS-CBN Juanito S. Facundo, negotiated with Bayer for the
Rank-and-File Employees Union (Union) executed a signing of a CBA. During the negotiations, EUBP
collective bargaining agreement (CBA) effective rejected Bayers wage-increase proposal resulting in a
December 11, 1999 to December 10, 2002; they only bargaining deadlock.
became aware of the CBA when they obtained copies
of the agreement; they learned that they had been Pending the resolution of the dispute, respondents,
excluded from its coverage as ABS-CBN considered headed by Avelina Remigio without any authority from
them temporary and not regular employees, in their union leaders, accepted Bayers wage-increase
violation of the Labor Code. They claimed they had proposal. EUBPs grievance committee questioned
already rendered more than a year of service in the Remigios action and reprimanded Remigio and her
company and, therefore, should have been recognized allies. Thereafter, the DOLE Secretary issued an
as regular employees entitled to security of tenure and

30
arbitral award ordering EUBP and Bayer to execute a Whether an imposed CBA has the same effect as that
CBA. of a CBA duly agreed upon by the parties.

Meanwhile, the rift between Facundos leadership and HELD: YES


Remigios group broadened. Six months after the CBA, Considering that no new CBA had been, in the
respondent sought to disaffiliate from the union. A tug- meantime, agreed upon by GMC and the Union, we
of-war then ensued between the two rival groups, with find, pursuant to Article 253 of the Labor Code, the
both seeking recognition from Bayer and demanding provisions of the imposed CBA continues to have full
remittance of the union dues collected from its rank- force and effect until a new CBA has been entered into
and-file members. Bayer refused to accede to the by the parties. Article 253 mandates the parties to
demands of the 2 group but subsequently turn over the keep the status quo and to continue in full force
collected union dues to herein respondent. Hence, and effect the terms and conditions of the existing
petitioner filed this case. agreement during the 60-day period prior to the
expiration of the old CBA and/or until a new
ISSUE: Whether the act of the management of Bayer agreement is reached by the parties. In the same
in dealing and negotiating with Remigios splinter group manner that it does not provide for any exception
despite its validly existing CBA with EUBP can be nor qualification on which economic provisions of
considered unfair labor practice. the existing agreement are to retain its force and
effect, the law does not distinguish between a CBA
HELD: YES. Bayer committed ULP. duly agreed upon by the parties and an imposed
Indeed, in Silva v. National Labor Relations CBA like the one under consideration.
Commission, we explained the correlations of Article
248 (1) and Article 261 of the Labor Code to mean that While it is true that the provisions of the imposed CBA
for a ULP case to be cognizable by the Labor Arbiter, extend beyond said remaining two-year duration of the
and for the NLRC to exercise appellate jurisdiction original CBA in view of the parties admitted failure to
thereon, the allegations in the complaint must show conclude a new CBA, the corresponding computation
prima facie the concurrence of two things, namely: (1) of the benefits accruing in favor of GMCs covered
gross violation of the CBA; and (2) the violation employees after the term of the original CBA was
pertains to the economic provisions of the CBA. correctly excluded in the aforesaid 27 October 2005
order issued in RAB VII-06-0475-1992. Rather than
This pronouncement in Silva, however, should not be the abbreviated pre-execution proceedings before
construed to apply to violations of the CBA which Executive Labor Arbiter Violeta Ortiz-Bantug, the
can be considered as gross violations per se, such computation of the same benefits beyond 30
as utter disregard of the very existence of the CBA November 1993 should, instead, be threshed out by
itself, similar to what happened in this case. When GMC and the Union in accordance with the Grievance
an employer proceeds to negotiate with a splinter Procedure outlined as follows under Article XII of the
union despite the existence of its valid CBA with imposed CBA
the duly certified and exclusive bargaining agent, As for the benefits after the expiration of the term of
the former indubitably abandons its recognition of the parties original CBA, we find that the extent thereof
the latter and terminates the entire CBA. as well as identity of the employees entitled thereto will
be better and more thoroughly threshed out by the
GENERAL MILLING CORPORATION parties themselves in accordance with the grievance
INDEPENDENT LABOR UNION V. GENERAL procedure outlined in Article XII of the imposed CBA.
MILLING CORPORATION
June 15, 2011 MALAYAN EMPLOYEES ASSOCIATION V.
MALAYAN INSURANCE CO.,
FACTS: G.R. No. 181357,February 2, 2010
General Milling Corporation and the Union entered into
a collective bargaining agreement which provided, Facts:
among other terms, the latters representation of the Rodolfo Mangalino, who is a union member of
collective bargaining unit for a three-year term made to Malayan Employees Associations was suspended for
retroact to 1 December 1988. On 29 November 1991 taking a union leave without the prior authority of his
or one day before the expiration of the subject CBA, department head and despite a previous disapproval
the Union sent a draft CBA proposal to GMC, with a of the requested leave. A provision in the unions
request for counter-proposals from the latter, for the collective bargaining agreement (CBA) with the
purpose of renegotiating the existing CBA between the company allows union officials to avail of union leaves
parties. In view of GMCs failure to comply with said with pay for a total of ninety-man days per year for the
request, the Union commenced the complaint for unfair purpose of attending grievance meetings, Labor-
labor practice. Management Committee meetings, annual National
Labor Management Conferences, labor education
ISSUE: programs and seminars, and other union activities.

31
The company issued a rule in November 2002 issue) in the NCMB. Moreover, alleged violations of
requiring not only the prior notice that the CBA the CBA should be resolved according to the
expressly requires, but prior approval by the grievance procedure laid out therein. Thus, the labor
department head before the union and its members arbiter had no jurisdiction over the complaint.
can avail of union leaves. The rule was placed into
effect in November 2002 without any objection from Issue:
the union until a union officer, Mangalino, filed union Is the contention that the labor arbiter lacks jurisdiction
leave applications in January and February, 2004. His as the case involves interpretation of the provision of
department head disapproved the applications CBA valid?
because the department was undermanned at that
time. Held:
Yes. Petitioners clearly and consistently questioned
Issue: the legality of RGMIs adoption of the new salary
Whether or not the suspension is invalid and violated scheme (i.e., piece-rate basis), asserting that such
the CBA? action, among others, violated the existing CBA.
Indeed, the controversy was not a simple case of
Held: illegal dismissal but a labor dispute involving the
No. While it is true that the union and its members manner of ascertaining employees salaries, a matter
have been granted union leave privileges under the which was governed by the existing CBA.
CBA, the grant cannot be considered separately from
the other provisions of the CBA, particularly the Under Article 261, voluntary arbitrators have original
provision on management prerogatives where the CBA and exclusive jurisdiction over matters which have not
reserved for the company the full and complete been resolved by the grievance machinery. Pursuant
authority in managing and running its business. to Articles 217 in relation to Articles 260 and 261 of the
The prior approval policy fully supported the validity of Labor Code, the labor arbiter should have referred the
the suspensions the company imposed on Mangalino. matter to the grievance machinery provided in the
We point out additionally that as an employee, CBA. Because the labor arbiter clearly did not have
Mangalino had the clear obligation to comply with the jurisdiction over the subject matter, his decision was
management disapproval of his requested leave while void.
at the same time registering his objection to the
company regulation and action. That he still went on CIRTEK EMPLOYEES LABOR UNION FEDERATION
leave, in open disregard of his superiors orders, OF FREE WORKERS vs CIRTEK
rendered Mangalino open to the charge of
insubordination, separately from his absence without Facts:
official leave. Amicable settlement of the CBA between petitioner
union and respondent company was deadlocked,
SANTUYO VS. REMERCO GARMENTS petitioner went on strike. Secretary of Labor assumed
G.R. No. 174420, March 22, 2010 jurisdiction over the controversy and issued a Return
to Work Order which was complied with. Before the
Facts: Secretary of Labor could rule on the controversy,
Petitioners, who had been employed as sewers, were respondent created a Labor Management Council
among those recalled due to the strike that was (LMC) through which it concluded with the officers of
subsequently declared illegal. Those who were petitioner a Memorandum of Agreement (MOA)
recalled are allowed to resume work on the condition providing for daily wage increases of P6.00 per day
that they would no longer be paid a daily rate but on a effective January 1, 2004 and P9.00 per day effective
piece-rate basis. Without allowing RGMI to normalize January 1, 2005. Petitioner submitted the MOA via
its operations, the union filed a notice of strike in the Motion and Manifestation to the Secretary of Labor,
National Conciliation and Mediation Board (NCMB) on alleging that the remaining officers signed the MOA
August 8, 1995. According to the union, RGMI under respondents assurance that should the
conducted a time and motion study and changed the Secretary order a higher award of wage increase,
salary scheme from a daily rate to piece-rate basis respondent would comply.
without consulting it. RGMI therefore not only violated
the existing collective bargaining agreement (CBA) but Secretary of Labor resolved the CBA deadlock by
also diminished the salaries agreed upon. It therefore awarding a wage increase of from P6.00 to P10.00 per
committed an unfair labor practice. Later, petitioners day effective January 1, 2004 and from P9.00 to
filed a complaint with the labor arbiter and amended P15.00 per day effective January 1, 2005, and
their complaint, stating that respondents suspended adopting all other benefits as embodied in the MOA.
them for questioning their decision to pay salaries on a
piece-rate basis. Respondents, on the other hand, Respondent moved for a reconsideration of the
moved to dismiss the complaint in view of the pending Decision as petitioners vice-president submitted a
conciliation proceedings (which involved the same Muling Pagpapatibay ng Pagsang-ayon sa Kasunduan

32
na may Petsang ika-4 ng Agosto 2005, stating that the consideration to the context in which it is negotiated
union members were waiving their rights and benefits and purpose which it is intended to serve.
under the Secretarys Decision. Court ruled in favor of
respondent and accordingly set aside the Decision of EASTERN TELECOMMUNICATIONS, PHIL., INC. V.
the Secretary of Labor. It held that the Secretary of EASTERN TELECOMS UNION
Labor gravely abused his discretion in not respecting G.R. No. 185665; February 8, 2012
the MOA. Petitioners filed the present petition,
maintaining that the Secretary of Labors award is in FACTS: Eastern Telecommunications Phils., Inc.
order, being in accord with the parties CBA history (ETPI) is a corporation engaged in the business of
respondent having already granted P15.00 per day for providing telecommunications facilities employing
2001, P10.00 per day for 2002, and P10.00 per day for approximately 400 employees. Eastern Telecoms
2003, and that the Secretary has the power to grant Employees Union (ETEU) is the certified exclusive
awards higher than what are stated in the CBA. bargaining agent of the companys rank and file
employees with a strong following of 147 regular
Issue: members. It has an existing collecti[ve] bargaining
Whether or not the MOA entered into by the petitioner agreement with the company to expire in the year
and the respondent constitutes CBA between them 2004 with a Side Agreement signed on September 3,
and thus restricts the Secretarys leeway in deciding 2001. The labor dispute was a spin-off of the
matters before it companys plan to defer payment of the 2003 14th, 15th
and 16th month bonuses sometime in April 2004. The
Held: companys main ground in postponing the payment of
No. It is well-settled that the Secretary of Labor, in the bonuses is due to allege continuing deterioration of
exercise of his power to assume jurisdiction under Art. companys financial position which started in the year
263 (g)[11] of the Labor Code, may resolve all issues 2000. However, ETPI while postponing payment of
involved in the controversy including the award of bonuses sometime in April 2004, such payment would
wage increases and benefits. While an arbitral award also be subject to availability of funds.
cannot per se be categorized as an agreement
voluntarily entered into by the parties because it Invoking the Side Agreement of the existing Collective
requires the intervention and imposing power of the Bargaining Agreement for the period 2001-2004
State thru the Secretary of Labor when he assumes between ETPI and ETEU which stated as follows: 4.
jurisdiction, the arbitral award can be considered an Employment Related Bonuses. The Company confirms
approximation of a collective bargaining that the 14th, 15th and 16th month bonuses (other than
agreement which would otherwise have been entered 13th month pay) are granted. The union strongly
into by the parties, hence, it has the force and effect of opposed the deferment in payment of the bonuses by
a valid contract obligation. Since the filing and filing a preventive mediation complaint with the NCMB.
submission of the MOA did not have the effect of The company declared that until the matter is resolved
divesting the Secretary of his jurisdiction, or of in a compulsory arbitration, the company cannot and
automatically disposing the controversy, then neither will not pay any bonuses to any and all union
should the provisions of the MOA restrict the members. ETEU filed a Notice of Strike on the ground
Secretarys leeway in deciding the matters before him. of unfair labor practice for failure of ETPI to pay the
bonuses in gross violation of the economic provision of
While a contract constitutes the law between the the existing CBA. Secretary of Labor and Employment,
parties, this is so in the present case with respect to finding that the company is engaged in an industry
the CBA, not to the MOA in which even the unions considered vital to the, certified the labor dispute for
signatories had expressed reservations thereto. But compulsory arbitration.
even assuming arguendo that the MOA is treated as a
new CBA, since it is imbued with public interest, it ETEU theorized that the grant of the subject bonuses
must be construed liberally and yield to the common is not only a company practice but also a contractual
good. While the terms and conditions of a CBA obligation of ETPI to the union members. ETEU
constitute the law between the parties, it is not, contended that the unjustified and malicious refusal of
however, an ordinary contract to which is applied the the company to pay the subject bonuses was a clear
principles of law governing ordinary contracts. A CBA, violation of the economic provision of the CBA and
as a labor contract within the contemplation of Article constitutes unfair labor practice (ULP). On the other
1700 of the Civil Code of the Philippines which hand, ETPI contends that NLRC had no jurisdiction
governs the relations between labor and capital, is not over the issue which merely involved the interpretation
merely contractual in nature but impressed with public of the economic provision of the 2001-2004 CBA Side
interest, thus, it must yield to the common good. As Agreement. It averred that the subject bonuses were
such, it must be construed liberally rather than not part of the legally demandable wage and the grant
narrowly and technically, and the courts must place a thereof to its employees was an act of pure gratuity
practical and realistic construction upon it, giving due and generosity on its part, involving the exercise of
management prerogative and always dependent on

33
the financial performance and realization of profits. when the giving of such bonus has been the
ETPI emphasized that even if it had an unconditional companys long and regular practice. The giving of the
obligation to grant bonuses to its employees, the subject bonuses cannot be peremptorily withdrawn by
drastic decline in its financial condition had already ETPI without violating Article 100 of the Labor Code.
legally released it therefrom pursuant to Article 1267 of
the Civil Code. PNCC SKYWAY TRAFFIC MANAGEMENT AND
SECURITY DIVISION WORKERS ORGANIZATION
NLRC dismissed ETEUs complaint and held that ETPI (PSTMSDWO) V. PNCC SKYWAY CORPORATION
could not be forced to pay the union members the G.R. No. 171231; February 17, 2010
bonuses as the payment of these additional benefits
was basically a management prerogative. ETEU FACTS: Petitioner PSTMSDWO is a duly registered
moved for reconsideration but the motion was denied. labor union. Respondent PNCC Skyway Corporation is
ETEU filed a petition for certiorari. The CA declared a corporation duly organized and operating under and
that the Side Agreements of the 1998 and 2001 CBA by virtue of the laws of the Philippines. On November
created a contractual obligation. However, the CA 15, 2002, petitioner and respondent entered into a
sustained the NLRC finding that the allegation of ULP Collective Bargaining Agreement (CBA) incorporating
was devoid of merit. ETPI appealed via Rule 45 of the the terms and conditions of their agreement which
Rules of Court. included vacation leave and expenses for security
license provisions.
ISSUES: (1) Whether or not petitioner ETPI is liable to
pay 14th, 15th and 16th month bonuses for the year The pertinent provisions of the CBA relative to
2003 and 14th month bonus for the year 2004 to the vacation leave and sick leave are as follows: [b] The
members of respondent union; and (2) Whether or not company shall schedule the vacation leave of
the CA erred in not dismissing outright ETEUs petition employees during the year taking into
for certiorari. consideration the request of preference of the
employees. [c] Any unused vacation leave shall be
RULING: The Court finds no merit in the petition. A converted to cash and shall be paid to the
bonus, however, becomes a demandable or employees on the first week of December
enforceable obligation when it is made part of the each year.
wage or salary or compensation of the employee. A
reading of the [CBA Side Agreements] reveals that the The Head of the TMSD issued a Memorandum dated
same provides for the giving of 14th, 15th and 16th January 9, 2004 to all TMSD personnel. In the said
month bonuses without qualification. The records are memorandum, it was provided that:
also bereft of any showing that the ETPI made it clear
before or during the execution of the Side Agreements SCHEDULED VACATION LEAVE WITH PAY.
that the bonuses shall be subject to any condition. In The 17 days (15 days SVL
the absence of any proof that ETPIs consent was plus 2-day-off) scheduled vacation
vitiated by fraud, mistake or duress, it is presumed that leave (SVL) with pay for the year 2004
it entered into the Side Agreements voluntarily, that it had been published for everyone to
had full knowledge of the contents thereof and that it take a vacation with pay which will be
was aware of its commitment under the contract. our opportunity to enjoy quality time
Notwithstanding such huge losses, ETPI entered into with our families and perform our
the 2001-2004 CBA Side Agreement. The parties to other activities requiring our personal
the contract must be presumed to have assumed the attention and supervision. Swapping
risks of unfavorable developments. It is, therefore, only of SVL schedule is allowed on a one-
in absolutely exceptional changes of circumstances on-one basis by submitting a written
that equity demands assistance for the debtor. In the request at least 30 days before the
case at bench, the Court determines that ETPIs actual schedule of SVL duly signed by
claimed depressed financial state will not release it the concerned parties. However, the
from the binding effect of the 2001-2004 CBA Side undersigned may consider the re-
Agreement. Considering that ETPI had been scheduling of the SVL upon the
continuously suffering huge losses from 2000 to 2002, written request of concerned TMSD
its business losses in the year 2003 were not exactly personnel at least 30 days before the
unforeseen or unexpected. scheduled SVL. Re-scheduling will be
Granting arguendo that the CBA Side evaluated taking into consideration
Agreement does not contractually bind petitioner ETPI the TMSDs operational requirement.
to give the subject bonuses, nevertheless, the Court
finds that its act of granting the same has become an Petitioner objected to the implementation of the said
established company practice such that it has virtually memorandum. It insisted that the individual members
become part of the employees salary or wage. A of the union have the right to schedule their vacation
bonus may be granted on equitable consideration leave. It opined that the unilateral scheduling of the

34
employees' vacation leave was done to avoid the CBA must be strictly adhered to and respected if its
monetization of their vacation leave in December ends have to be achieved, being the law between the
2004. Petitioner also demanded that the expenses for parties. In Faculty Association of Mapua Institute of
the required in-service training of its member security Technology (FAMIT) v. Court of Appeals, this Court
guards, as a requirement for the renewal of their held that the CBA during its lifetime binds all the
license, be shouldered by the respondent. parties. The provisions of the CBA must be respected
since its terms and conditions constitute the law
Due to the disagreement between the parties, between the parties. The parties cannot be allowed to
petitioner elevated the matter to the DOLE-NCMB for change the terms they agreed upon on the ground that
preventive mediation. The voluntary arbitrator ruled the same are not favorable to them.
that the scheduling of all vacation leaves shall be
under the discretion of the union members, and the In the grant of vacation leave privileges to an
management to convert them into cash all the leaves employee, the employer is given the leeway to impose
which the management compelled them to use. It also conditions on the entitlement to and commutation of
ruled that the in-service-training of the company the same, as the grant of vacation leave is not a
security guards, as a requirement for renewal of standard of law, but a prerogative of management.
licenses, shall not be their personal account but that of Along that line, since the grant of vacation leave is a
the company. All other claims were dismissed for lack prerogative of the employer, the latter can compel its
of merit. Respondent filed a motion for reconsideration, employees to exhaust all their vacation leave credits.
which the voluntary arbitrator denied. Respondent filed Of course, any vacation leave credits left unscheduled
a Petition for Certiorari with Prayer for Temporary by the employer, or any scheduled vacation leave that
Restraining Order and/or Writ of Preliminary Injunction was not enjoyed by the employee upon the employer's
with the CA, and the CA annulled and set aside the directive, due to exigencies of the service, must be
decision and order of the voluntary arbitrator. The CA converted to cash, as provided in the CBA. However, it
ruled that since the provisions of the CBA were clear, is incorrect to award payment of the cash equivalent of
the voluntary arbitrator has no authority to interpret the vacation leaves that were already used and enjoyed by
same beyond what was expressly written. Petitioner the employee. Accordingly, the vacation leave privilege
filed a motion for reconsideration. Hence, the instant was not intended to serve as additional salary, but as a
petition. non-monetary benefit. To give the employees the
option not to consume it with the aim of converting it to
ISSUES: (1) Whether the management has the sole cash at the end of the year would defeat the very
discretion to schedule the vacation leave; (2) Whether purpose of vacation leave. Petitioner's contention that
the management is not liable for the in-service-training labor contracts should be construed in favor of the
of the security guard. laborer is without basis and, therefore, inapplicable to
the present case. This rule of construction does not
RULING: benefit petitioners because, as stated, there is here no
(1) As to the issue on vacation leaves, the room for interpretation. Since the CBA is clear and
same has no merit. unambiguous, its terms should be implemented as
The rule is that where the language of a contract is they are written.
plain and unambiguous, its meaning should be
determined without reference to extrinsic facts or aids. (2) This brings Us to the issue of who is
The intention of the parties must be gathered from that accountable for the in-service training of the security
language, and from that language alone. Stated guards. On this point, We find the petition meritorious.
differently, where the language of a written contract is
clear and unambiguous, the contract must be taken to Although it is a rule that a contract freely entered into
mean that which, on its face, it purports to mean, between the parties should be respected, since a
unless some good reason can be assigned to show contract is the law between the parties, there are,
that the words used should be understood in a however, certain exceptions to the rule, specifically
different sense. Article 1306 of the Civil Code. Moreover, the relations
between capital and labor are not merely contractual.
In the case at bar, the contested provision of the CBA They are so impressed with public interest that labor
is clear and unequivocal. Article VIII, Section 1 (b) of contracts must yield to the common good. If the
the CBA categorically provides that the scheduling of provisions in the CBA run contrary to law, public
vacation leave shall be under the option of the morals, or public policy, such provisions may very well
employer. The preference requested by the employees be voided.
is not controlling because respondent retains its power
and prerogative to consider or to ignore said request. In the present case, Article XXI, Section 6 of the CBA
provides that All expenses of security guards in
Thus, if the terms of a CBA are clear and leave no securing /renewing their licenses shall be for their
doubt upon the intention of the contracting parties, the personal account. A reading of the provision would
literal meaning of its stipulation shall prevail. In fine, the reveal that it encompasses all possible expenses a

35
security guard would pay or incur in order to secure or RULING
renew his license. Yes. The subject of litigation is incapable of pecuniary
estimation, exclusively cognizable by the RTC,
Since it is the primary responsibility of operators of pursuant to Section 19 (1) of BP 129, as amended.
company security forces to maintain and upgrade the Being an ordinary civil action, the same is beyond the
standards of efficiency, discipline, performance and jurisdiction of labor tribunals. The said issue cannot be
competence of their personnel, it follows that the resolved solely by applying the Labor Code. Rather, it
expenses to be incurred therein shall be for the requires the application of the Constitution, labor
personal account of the company. Further, the intent of statutes, law on contracts and the Convention on the
the law to impose upon the employer the obligation to Elimination of All Forms of Discrimination Against
pay for the cost of its employees training is manifested Women, and the power to apply and interpret the
in the aforementioned laws provision that Where the constitution and CEDAW is within the jurisdiction of
quality of training is better served by centralization, the trial courts, a court of general jurisdiction. Here, the
CFSD Directors may activate a training staff from local employer-employee relationship between the parties is
talents to assist. The cost of training shall be pro-rated merely incidental and the cause of action ultimately
among the participating agencies/private companies. It arose from different sources of obligation, i.e., the
can be gleaned from the said provision that cost of Constitution and CEDAW.
training shall be pro-rated among participating
agencies and companies if the training is best served Thus, where the principal relief sought is to be
by centralization. The law mandates pro-rating of resolved not by reference to the Labor Code or other
expenses because it would be impracticable and unfair labor relations statute or a collective bargaining
to impose the burden of expenses suffered by all agreement but by the general civil law, the jurisdiction
participants on only one participating agency or over the dispute belongs to the regular courts of justice
company. Thus, it follows that if there is no and not to the labor arbiter and the NLRC. In such
centralization, there can be no pro-rating, and the situations, resolution of the dispute requires expertise,
company that has its own security forces shall not in labor management relations nor in wage
shoulder the entire cost for such training. If the intent structures and other terms and conditions of
of the law were to impose upon individual employees employment, but rather in the application of the
the cost of training, the provision on the pro-rating of general civil law. Clearly, such claims fall outside the
expenses would not have found print in the law. area of competence or expertise ordinarily ascribed to
labor arbiters and the NLRC and the rationale for
HALAGUEA, et al v. PHILIPPINE AIRLINES granting jurisdiction over such claims to these
INCORPORATED agencies disappears.
G.R. No. 172013, October 2, 2009, Peralta
If We divest the regular courts of jurisdiction over the
FACTS case, then which tribunal or forum shall determine the
Petitioners are members of the Flight Attendants and constitutionality or legality of the assailed CBA
Stewards Association of the Philippines (FASAP), a provision? This Court holds that the grievance
labor organization certified as the sole and exclusive machinery and voluntary arbitrators do not have the
bargaining representative of the flight attendants, flight power to determine and settle the issues at hand. They
stewards and pursers of PAL. In 2011, PAL and have no jurisdiction and competence to decide
FASAP entered into a CBA, a provision of which constitutional issues relative to the questioned
provides that compulsory retirement for cabin compulsory retirement age. Their exercise of
attendants hired before November 1996 shall be 55 jurisdiction is futile, as it is like vesting power to
(years old) for females and 60 for males. Petitioners someone who cannot wield it.
manifested that the aforementioned CBA provision is
discriminatory, and demanded for an equal treatment The change in the terms and conditions of
with their male counterparts. Petitioners filed a Special employment, should Section 144 of the CBA be held
Civil Action for Declaratory Relief with the Makati RTC invalid, is but a necessary and unavoidable
seeking to invalidate the said CBA provision. The RTC consequence of the principal relief sought, i.e.,
upheld its jurisdiction over the case, reasoning that the nullification of the alleged discriminatory provision in
allegations do not make out a labor dispute arising the CBA. Thus, it does not necessarily follow that a
from employer-employee relationship nor does it resolution of controversy that would bring about a
involve a claim against PAL. change in the terms and conditions of employment is a
labor dispute, cognizable by labor tribunals. It is unfair
ISSUE to preclude petitioners from invoking the trial court's
Does the RTC have jurisdiction over the petitioners jurisdiction merely because it may eventually result
action challenging the legality or constitutionality of the into a change of the terms and conditions of
provisions on the compulsory retirement age contained employment. Along that line, the trial court is not asked
in the CBA? to set and fix the terms and conditions of employment,

36
but is called upon to determine whether CBA is the regular worker.. Because a reliever is treated as if
consistent with the laws. mere project employee

Although the CBA provides for a procedure for the Issue:


adjustment of grievances, such referral to the 1) WON respondent in this case is a casual employee
grievance machinery and thereafter to voluntary 2) WON the nature of the work of a reliever in this case
arbitration would be inappropriate to the petitioners, is covered by the CBA
because the union and the management have 2.1) WON respondent became a regular employee
unanimously agreed to the terms of the CBA and their
interest is unified. Ruling:
1) Yes, he is a casual employee but the basis of this is
The he dispute in the case at bar is not between not because of the 1st paragraph of article 280.. But
FASAP and respondent PAL, who have both under the 2nd paragraph because he does not fall
previously agreed upon the provision on the under any kinds of employee in article 280, however,
compulsory retirement of female flight attendants as to be a regular employee under the 2nd paragraph the
embodied in the CBA. The dispute is between employee must have rendered at least 1 year of
respondent PAL and several female flight attendants service whether or not it is continous or broken, the
who questioned the provision on compulsory total work time of the respondent is only 228.5 days.
retirement of female flight attendants. Thus, applying Therefore he is not a regular employee UNDER THE
the principle in the aforementioned case cited, referral LABOR CODE ALONE.
to the grievance machinery and voluntary arbitration
would not serve the interest of the petitioners. # (to justify as to why didn't the court consider the 36
months to be beyond 1 year despite the fact that the
PASSI (STEVEDORING AND ARASTRE COMPANY) law allows "broken"... Because when the law tilts the
V. BACOLOT scale to labor, it must not be so tilted as to cause
Doctrine: when the scales are tilted towards labor it injustice to the employer.. Plus, it is a common
must not be so tilted as to cause injustice to the industrial practice in stevedoring to get relievers in
employer cases where the regular stevedores could not make it
to work so that the business could continue for 24
If a reliever is allowed to work for at least 365 hours or to finish without any interruptions, and the fact
accumulated days.. He may become a regular that there was no prohibition imposed to the
employee under article 280(2). respondent that he can freely offer his service to other
persons)
FACTS
Bacolot was hired by PASSI to work as a stevedore for 2) Because of the "union shop" clause under the
an accumulated 36 months (but only worked for 228.5 existing CBA, the respondent being seen by the law as
days - average is 1 week of work per month), the a "casual employee" is deemed to have been a
nature of his work is that of a reliever, he will only work member of a union within a certain time as a
if the regular steverdore is absent. precondition to employment (to clarify, even non-union
members may be hired but subject to this condition),
On the CBA: became a regular employee by virtue of the provisions
1) there is a stipulation that casual/probationary of the CBA because 228.5 days is equivalent to 8
employees shall become regular employees after the months of work which is beyond the agreed 6 months
accumulation of 6 months of employment from their under the CBA.
hiring.;
UNFAIR LABOR PRACTICE
2) and the adoption of a "union shop" as a condition for
employment
- there must be a certain time upon which the EMPLOYEES UNION OF BAYER PHILS (EUBP) VS.
employee must become a member of a union upon his BAYER PHILIPPINES, INC.
hiring G.R. No. 162943, December 6, 2010, Villarama

Contention of the respondent: Petitioner EUBP is the exclusive bargaining agent of


1) he worked for beyond 6 months, thus, following the respondent Bayer. The parties figured in a bargaining
CBA he should already be a regular employee deadlock in 1997 for failure to agree on Bayers offer of
9.9% wage increase. Pending the resolution of the
Contention of the petitioner: dispute, AvelinaRemigio (Remigio) and 27 other union
1) CBA will not apply to you, you are neither a regular, members accepted said offer without authority from
casual nor a probationary employee.. You are just a the union leaders.
mere reliever whose work depends on the absence of EUBPs grievance committee questioned
Remigios action and reprimanded Remigio and

37
her allies. Later, the DOLE Secretary issued an arbitral if there is no legitimate reason for doing so and without
award ordering EUBP first following the proper procedure. If such behavior
and Bayer to execute a CBA retroactive to January would be tolerated, bargaining and negotiations
1, 1997 and to be made effective until December 31, between the employer and the union will never be
2001. truthful and meaningful, and no CBA forged after
arduous negotiations will ever be honored or be relied
Meanwhile, the rift between the Facundos leadership upon. A CBA entered into by a legitimate labor
and Remegios group broadened. Six months after the organization that has been duly certified as the
signing of the 1997-2001 CBA, the latter group formed exclusive bargaining representative and the employer
the Reformed Employees Union of Bayer Philippines becomes the law between them.
(REUBP). A tug-of-war then ensued between the two
rival groups, with both seeking recognition from Bayer When an employer proceeds to negotiate with a
and demanding remittance of the union dues collected splinter union despite the existence of its valid CBA
from its rank-and files members. Bayer decided to put with the duly certified and exclusive bargaining agent,
the union dues in a trust account. the former indubitably abandons its recognition of the
latter and terminates the entire CBA.
EUBP then filed a complaint for ULP against Bayer for
the non-remittance of dues. During its pendency, Respondents cannot claim good faith to justify their
Bayer turned over the collected union dues to acts. They knew that Facundos group represented the
Anastacia Villareal, Treasurer of REUBP. Herein duly-elected officers of EUBP. Moreover, they were
complaint was, however, dismissed and no appeal was cognizant of the fact that even the DOLE Secretary
taken. himself had recognized the legitimacy of EUBPs
mandate by rendering an arbitral award ordering the
Petitioners filed a second ULP complaint against signing of the 1997-2001 CBA between Bayer and
herein respondents. Three days later, EUBP. Respondents were likewise well-aware of the
petitioners amended the complaint charging the pendency of the intra-union dispute case, yet they still
respondents with unfair labor practice proceeded to turn over the collected union dues to
committed by organizing a company union, gross violat REUBP and to effusively deal with Remigio. The
ion of the CBA and violation of their duty to bargain. totality of respondents conduct, therefore, reeks with
On even date, REUBP and Bayer agreed to sign a anti-EUBP animus.
new CBA. Remegio immediately informed her allies of
the management decision. In response, petitioners PRINCE TRANSPORT, INC. and MR. RENATO
immediately filed an urgent motion for the issuance of CLAROS vs. DIOSDADO GARCIA, et al
a restraining order/injunction. Said CBA was, however, January 12, 2011, G.R. No. 167291, Peralta
eventually signed and ratified despite the BLRs ruling
and order that the management of Bayer should Petitioner PTI is a company engaged in the business
respect the authority of the duly-elected officers of of transporting passengers by land, on the other hand,
EUBP in the administration of the prevailing CBA. respondents were hired as drivers, conductors,
mechanics and inspectors. In addition to their regular
The second ULP was dismissed by the Labor Arbiter monthly income, respondents also received
for lack for jurisdiction for the issue involves an intra- commissions equivalent to 8 to 10% of their wages;
union dispute. The NLRC likewise dismissed the sometime in October 1997, the said commissions were
motion for a restraining order and/or injunction stating reduced to 7 to 9%; this led respondents and other
that the subject matter involved an intra-union dispute, employees of PTI to hold a series of meetings to
over which the Commission has no jurisdiction. On discuss the protection of their interests as employees;
appeal, the CA sustained the two rulings hence, this these meetings led petitioner Claros, president of PTI,
petition. to suspect that respondents are about to form a union.
In December 1997, PTI employees requested for a
ISSUE cash advance, but the same was denied by
Whether the act of the management of Bayer in management, which resulted in demoralization on the
dealing and negotiating with Remigios splinter group employees' ranks; later, the foregoing circumstances
despite its validly existing CBA with EUBP can be led respondents to form a union for their mutual aid
considered unfair labor practice. and protection. In order to block the continued
formation of the union, PTI caused the transfer of all
HELD union members and sympathizers to one of its sub-
YES. It must be remembered that a CBA is entered companies, Lubas Transport (Lubas); despite such
into in order to foster stability and mutual cooperation transfer, the schedule of drivers and conductors, as
between labor and capital. An employer should not be well as their company identification cards, were issued
allowed to rescind unilaterally its CBA with the duly by PTI; the daily time records, tickets and reports of
certified bargaining agent it had previously contracted the respondents were also filed at the PTI office; and,
with, and decide to bargain anew with a different group all claims for salaries were transacted at the same

38
office; later, the business of Lubas deteriorated WON the suspension of CBA negotiations can be
because of the refusal of PTI to maintain and repair considered as unfair labor practice.
the units being used therein, which resulted in the
virtual stoppage of its operations and respondents' RULING
loss of employment. No. Unfair labor practice cannot be imputed to MMC
since the call of MMC for a suspension of the CBA
Petitioners, on the other hand, denied the material negotiations cannot be equated to refusal to bargain.
allegations of the complaints contending that herein For a charge of unfair labor practice to prosper, it must
respondents were no longer their employees, since be shown that the employer was motivated by ill-will,
they all transferred to Lubas. bad faith or fraud, or was oppressive to labor. The
employer must have acted in a manner contrary to
ISSUE morals, good customs, or public policy causing social
Whether or not petitioner is guilty of unfair labor humiliation, wounded feelings or grave anxiety. While
practice the law makes it an obligation for the employer and the
employees to bargain collectively with each other,
HELD such compulsion does not include the commitment to
Yes. The respondents transfer of work assignments to precipitately accept or agree to the proposals of the
Lubas was designed by petitioners as a subterfuge to other. All it contemplates is that both parties should
foil the formers right to organize themselves into a approach the negotiation with an open mind and make
union. Under Article 248 (a) and (e) of the Labor Code, reasonable effort to reach a common ground of
an employer is guilty of unfair labor practice if it agreement.
interferes with, restrains or coerces its employees in
the exercise of their right to self-organization or if it CENTRAL AZUCARERA DE BAIS EMPLOYEES
discriminates in regard to wages, hours of work and UNION-NFL (CABEU-NFL) V. CENTRAL
other terms and conditions of employment in order to AZUCARERA DE BAIS, INC. (CAB)
encourage or discourage membership in any labor G.R. No. 186605, November 17, 2010, Mendoza
organization.
As a result of a bargaining deadlock, the NCMB
Indeed, evidence of petitioners' unfair labor practice is commenced conciliation/mediation proceedings
shown by the established fact that, after respondents' involving CAB, employer, and CABEU-NFL, the
transfer to Lubas, petitioners left them high and dry exclusive bargaining agent. In a letter-response to the
insofar as the operations of Lubas was concerned. NCMB, CAB sought suspension of the
Petitioners withheld the necessary financial and conciliation/mediation proceedings on the following
logistic support such as spare parts, and repair and grounds:
maintenance of the transferred buses until only two 1) CABEU-NFL lost its majority status by reason
units remained in running condition. This left of the disauthorization and withdrawal of
respondents virtually jobless. support thereto by more than 90% of the rank
and file employees in the bargaining unit; and
MANILA MINING CORP. EMPLOYESS v. MANILA 2) the workers themselves, acting as principal,
MINING CORP. after disauthorizing the previous agent
G.R. Nos. 178222-23, September 20, 2010, Perez CABEU-NFL have organized themselves into
a new Union known as Central Azucarera de
Manila Mining Corp. (MMC), a corporation engaged in Bais Employees Labor Association (CABELA)
large-scale mining, constructed several tailings dams and after obtaining their registration certificate
to treat and store its waste materials and one of these and making due representation that it is a duly
tailings dams was operating under a permit issued by organized union representing almost all the
DENR-EMB. Petitioner Union, submitted letters to rank and file workers of CAB, had concluded a
MMC relating its intention to bargain collectively and new collective bargaining agreement with
likewise submitted its CBA proposal. However, upon CAB.
expiration of the tailings permit, DENR-EMB did not
issue a permanent permit due to the inability of MMC The NCMB did not act on the letter-request. Neither
to secure an Environmental Compliance Certificate. did it conclude the conciliation/mediation proceedings
Hence, it was compelled to temporarily shut down its involving CABEU-NFL and CAB.
mining operations, resulting in the temporary lay-off of
more than 400 employees, including the complainants. ISSUE
MMC called for the suspension of negotiations on the Is CAB guilty of acts constituting unfair labor practice
CBA with the Union until resumption of mining (ULP) by refusing to bargain collectively in good faith?
operations.
HELD
ISSUE No. By imputing bad faith to the actuations of CAB,
CABEU-NFL has the burden of proof to present

39
substantial evidence to support the allegation of unfair beyond the bargaining units coverage. In contracting
labor practice.The circumstances relied upon as proof out FEBTC functions to BOMC, BPI effectively
of CABs bad faith are merely those mentioned in the deprived the union of the membership of employees
letter-response, namely, the execution of the supposed handling said functions as well as curtailed the right of
CBA between CAB and CABELA and the request to those employees to join the union.
suspend the negotiations. In simply relying on the said
letter-response, CABEU-NFL failed to substantiate its Thereafter, the Union demanded that the matter be
claim of unfair labor practice to rebut the presumption submitted to the grievance machinery as the resort to
of good faith. the LMC was unsuccessful. As BPI allegedly ignored
the demand, the Union filed a notice of strike before
Moreover, the filing of the complaint for unfair labor the National Conciliation and Mediation Board (NCMB)
practice was premature inasmuch as the issue of on the following grounds:
collective bargaining is still pending before the NCMB. a) Contracting out services/functions performed by
CAB cannot be faulted for the NCMBs inaction. union members that interfered with, restrained and/or
coerced the employees in the exercise of their right to
BPI EMPLOYEES UNION-DAVAO V. BPI self-organization;
July 24, 2013, G.R. No. 174912, Mendoza b) Violation of duty to bargain; and
c) Union busting
BOMC, which was created pursuant to Central Bank
Circular No. 1388, Series of 1993 (CBP Circular No. BPI then filed a petition for assumption of
1388, 1993), and primarily engaged in providing and/or jurisdiction/certification with the Secretary of the
handling support services for banks and other financial Department of Labor and Employment (DOLE), who
institutions, is a subsidiary of the Bank of Philippine subsequently issued an order certifying the labor
Islands (BPI) operating and functioning as an entirely dispute to the NLRC for compulsory arbitration. The
separate and distinct entity. A service agreement DOLE Secretary directed the parties to cease and
between BPI and BOMC was initially implemented in desist from committing any act that might exacerbate
BPIs Metro Manila branches. In this agreement, the situation. The NLRC came out with a resolution
BOMC undertook to provide services such as check upholding the validity of the service agreement
clearing, delivery of bank statements, fund transfers, between BPI and BOMC and dismissing the charge of
card production, operations accounting and control, ULP. It ruled that the engagement by BPI of BOMC to
and cash servicing Not a single BPI employee was undertake some of its activities was clearly a valid
displaced and those performing the functions, which exercise of its management prerogative.11 It further
were transferred to BOMC, were given other stated that the spinning off by BPI to BOMC of certain
assignments. On January 1, 1996, the service services and functions did not interfere with, restrain or
agreement was likewise implemented in Davao City. coerce employees in the exercise of their right to self-
Later, a merger between BPI and Far East Bank and organization. The Union is of the position that the
Trust Company (FEBTC) took effect on April 10, 2000 outsourcing of jobs included in the existing bargaining
with BPI as the surviving corporation. Thereafter, BPIs unit to BOMC is a breach of the union-shop agreement
cashiering function and FEBTCs cashiering, in the CBA. In transferring the former employees of
distribution and bookkeeping functions were handled FEBTC to BOMC instead of absorbing them in BPI as
by BOMC. Consequently, twelve (12) former FEBTC the surviving corporation in the merger, the number of
employees were transferred to BOMC to complete the positions covered by the bargaining unit was
latters service complement. decreased, resulting in the reduction of the Unions
membership.
BPI Employees Union-Davao City-FUBU (Union),
objected to the transfer of the functions and the twelve ISSUE
(12) personnel to BOMC contending that the functions Whether or not the act of BPI to outsource the
rightfully belonged to the BPI employees and that the cashiering, distribution and bookkeeping functions to
Union was deprived of membership of former FEBTC BOMC is in conformity with the law and the existing
personnel who, by virtue of the merger, would have CBA
formed part of the bargaining unit represented by the
Union pursuant to its union shop provision in the CBA. RULING
BPI proposed a Labor Management Conference (LMC) No. The rule now is covered by Article 261 of the
between the parties. During the LMC, BPI invoked Labor Code, which took effect on November 1,
management prerogative stating that the creation of 1974.25 Article 261 provides: Accordingly, violations
the BOMC was to preserve more jobs and to designate of a Collective Bargaining Agreement, except those
it as an agency to place employees where they were which are gross in character, shall no longer be treated
most needed. On the other hand, the Union charged as unfair labor practice and shall be resolved as
that BOMC undermined the existence of the union grievances under the Collective Bargaining
since it reduced or divided the bargaining unit. While Agreement. For purposes of this article, gross
BOMC employees perform BPI functions, they were violations of Collective Bargaining Agreement shall

40
mean flagrant and/or malicious refusal to comply with Whether Pepsi committed ULP in the form of union
the economic provisions of such agreement. busting

Clearly, only gross violations of the economic HELD


provisions of the CBA are treated as ULP. Otherwise, NO. Under Article 276(c) of the Labor Code, there is
they are mere grievances. union busting when the existence of the union is
threatened by the employers act of dismissing the
In the present case, the alleged violation of the union formers officers who have been duly-elected in
shop agreement in the CBA, even assuming it was accordance with its constitution and by-laws.
malicious and flagrant, is not a violation of an
economic provision in the agreement. The provisions On the other hand, the term unfair labor practice refers
relied upon by the Union were those articles referring to that gamut of offenses defined in the Labor
to the recognition of the union as the sole and Codewhich, at their core, violates the constitutional
exclusive bargaining representative of all rank-and-file right of workers and employees to self-
employees, as well as the articles on union security, organization, with the sole exception of Article 257(f)
specifically, the maintenance of membership in good (previously Article 248[f]).
standing as a condition for continued employment and
the union shop clause. It failed to take into Unfair labor practice refers to acts that violate the
consideration its recognition of the banks exclusive workers' right to organize. The prohibited acts are
rights and prerogatives, likewise provided in the CBA, related to the workers' right to self-organization and to
which included the hiring of employees, promotion, the observance of a CBA. Without that element, the
transfers, and dismissals for just cause and the acts, no matter how unfair, are not unfair labor
maintenance of order, discipline and efficiency in its practices. The only exception is Article 257(f).
operations. It is incomprehensible how the "reduction
of positions in the collective bargaining unit" interferes ROYAL PLANT WORKERS UNION V. COCA COLA
with the employees right to self-organization because BOTTLERS
the employees themselves were neither transferred G.R. No. 198783, April 15, 2013
nor dismissed from the service. It is to be emphasized
that contracting out of services is not illegal per se. It is PETITIONER Royal Plant Workers Union is the union
an exercise of business judgment or management of bottling operators employed with respondent Coca-
prerogative. Absent proof that the management acted Cola Bottlers Philippines, Inc.-Cebu Plant (CCBPI).
in a malicious or arbitrary manner, the Court will not
interfere with the exercise of judgment by an In 1974, the bottling operators were provided with
employer.In this case, bad faith cannot be attributed to chairs upon their request. Sometime in September
BPI because its actions were authorized by CBP 2008, the chairs were removed pursuant to a national
Circular. directive of respondent. This directive is in line with the
I operate, I maintain, I clean program of petitioner for
PEPSI-COLA PRODUCTS PHILIPPINES, INC. vs. bottling operators.
MOLON, et. al
G.R. No. 175002, February 18, 2013, Perlas-Bernabe The CCBPI maintains that the removal of the subject
chairs is a valid exercise of management prerogative.
In 1999, Pepsi adopted a company-wide retrenchment Is there merit to this contention?
program denominated as Corporate Rightsizing
Program. On July 13, 1999, Pepsi notified the DOLE RULING
of the initial batch of forty-seven (47) workers to be Yes. The Supreme Court has held that management is
retrenched.Among these employees were six (6) free to regulate, according to its own discretion and
elected officers and twenty-nine (29) active members judgment, all aspects of employment, including hiring,
of the LEPCEU-ALU, including herein respondents. work assignments, working methods, time, place, and
manner of work, processes to be followed, supervision
On July 19, 1999, LEPCEU-ALU filed a Notice of of workers, working regulations, transfer of employees,
Strike before the National Conciliation and Mediation work supervision, layoff of workers, and discipline,
Board (NCMB) due to Pepsis alleged acts of union dismissal and recall of workers. The exercise of
busting/ULP. It claimed that Pepsis adoption of the management prerogative, however, is not absolute as
retrenchment program was designed solely to bust it must be exercised in good faith and with due regard
their union so that come freedom period, Pepsis to the rights of labor.
company union, the Leyte Pepsi-Cola Employees
Union-Union de Obreros de Filipinas - would garner In the present controversy, it cannot be denied that
the majority vote to retain its exclusive bargaining CCBPI removed the operators chairs pursuant to a
status. national directive and in line with its I Operate, I
Maintain, I Clean program, launched to enable the
ISSUE union to perform their duties and responsibilities more

41
efficiently. The chairs were not removed CBA. The Company filed a petition for review in the
indiscriminately. They were carefully studied with due Court of Appeals.
regard to the welfare of the members of the Union. The
removal of the chairs was compensated by a) a ISSUE
reduction of the operating hours of the bottling Whether or not the Company is guilty of violating the
operators from 2.5-hour rotation period to a 1.5-hour CBA in engaging the services of a third party service
rotation period; and b) an increase of the break period provider.
from 15 to 30 minutes between rotations.
HELD
Apparently, the decision to remove the chairs was A careful reading of the above-enumerated categories
done with good intentions, as CCBPI wanted to avoid of employees reveals that the PESO contractual
instances of operators sleeping on the job while in the employees do not fall within the enumerated
performance of their duties and responsibilities and categories of employees stated in the CBA of the
because of the fact that the chairs were not necessary, parties. Since the Company had admitted that it
considering that the operators constantly move about engaged the services of PESO to perform temporary
while working. In short, the removal of the chairs was or occasional services which is akin to those
designed to increase work efficiency. Hence, CCBPIs performed by casual employees, the Company should
exercise of its management prerogative was made in have tapped the services of casual employees instead
good faith without doing any harm to the workers of engaging PESO.
rights.
While contracting out services is a management
GOYA, INC. v. GOYA, INC. EMPLOYEES UNION- prerogative, however, is not without limitation. In
FFW contracting out services, the management must be
G.R. No. 170054, January 21, 2013 motivated by good faith and the contracting out should
not be resorted to circumvent the law or must not have
Petitioner Goya, Inc. (Company), a domestic been the result of malicious arbitrary actions. In the
corporation engaged in the manufacture, importation, case at bench, the CBA of the parties has already
and wholesale of top quality food products. It hired provided for the categories of the employees in the
contractual employees from PESO Resources Companys establishment. As stated earlier, the work
Development Corporation (PESO) to perform to be performed by PESO was similar to that of the
temporary and occasional services in its factory in casual employees. With the provision on casual
Parang, Marikina City. This prompted respondent employees, the hiring of PESO contractual employees,
Goya, Inc. Employees UnionFFW (Union) to request therefore, is not in keeping with the spirit and intent of
for a grievance conference on the ground that the their CBA. It is familiar and fundamental doctrine in
contractual workers do not belong to the categories of labor law that the CBA is the law between the parties
employees stipulated in the existing Collective and they are obliged to comply with its provisions.
Bargaining Agreement (CBA). The matter was However, this cannot be considered unfair labor
unresolved and referred to National Conciliation and practice, because it is not a gross violation of the CBA.
Mediation Board (NCMB) for voluntary arbitration. The
Union asserted that the hiring of contractual *** Definition under CBA
employees from PESO is not a management Casual Employee One hired by the Company to
prerogative and in gross violation of the CBA perform occasional or seasonal work directly
tantamount to unfair labor practice (ULP). It noted that connected with the regular operations of the Company,
the contractual workers engaged have been assigned or one hired for specific projects of limited duration not
to work in positions previously handled by regular connected directly with the regular operations of the
workers and Union members in effect violating CBAs Company.
provision on Categories of Employees which provide
only for Probationary, Regular, and Casual. With the
hiring of contractual employees, the Union contended STRIKES AND LOCKOUTS
that it would no longer have probationary and casual
employees from which it could obtain additional Union
members. In countering the Unions allegations, the BUKLURAN NG MGA MANGGAGAWA SA
Company argued that: (a) the law expressly allows CLOTHMAN KNITTING V. CA
contracting and subcontracting arrangements and that G.R. No. 158158, January 17, 2005, Callejo
the CBA merely provides for the definition of the
categories of employees and does not put a limitation Petitioner is a legitimate labor union of the private
on the Companys right to engage the services of job respondent employer. It filed a petition for certification
contractors or its management prerogative to address election. It incidentally resulted to respondent
temporary/occasional needs in its operation. The becoming sour with its relation to the employees,
Voluntary Arbitrator ruled that the engagement of prompting it to temporarily close a department in the
PESO is not in keeping with the intent and spirit of the company. As a result, members and officers of

42
petitioner union stopped from working and staged a
picket outside the employers building. LA, NLRC and STEEL CORPORATION OF THE PHILIPPINES vs.
CA said that there was strike despite the argument of SCP EMPLOYEES UNION-NATIONAL FEDERATION
the petitioner that there could not have been a strike OF LABOR UNIONS
considering that most of those who participated in the G.R. Nos. 169829-30, April 16, 2008
picket belong to the temporarily closed department.
Petitioner Steel Corporation of the Philippines (SCP) is
ISSUE engaged in manufacturing construction materials,
Whether or not the so called picket of the petitioner supplying approximately 50% of the domestic needs
union constituted an illegal strike. for roofing materials. On August 17, 1998, SCP-
Federated Union of the Energy Leaders General and
HELD Allied Services (FUEL-GAS) filed a petition for
Yes. A strike is any temporary stoppage of work by the Certification Election in its bid to represent the rank-
concerted action of employees as a result of an and-file employees of the petitioner. Respondent SCP
industrial or labor dispute. A labor dispute includes any Employees Union (SCPEU) National Federation of
controversy or matter concerning terms or conditions Labor Unions (NAFLU) intervened, seeking to
of employment or the association or representation of participate and be voted for in such elect but the same
persons in negotiating, fixing, maintaining, changing or was denied for having been filed out of time. On
arranging the terms and conditions of employment, October 16, 2000, the Undersecretary rendered a
regardless of whether the disputants stand in the Decision certifying respondent as the exclusive
proximate relation of employer and employee. bargaining agent of petitioner's employees. As a
consequence of its certification as the exclusive
The allegation that there can be no work stoppage bargaining agent, respondent sent to petitioner CBA
because the operation in the Dyeing and Finishing proposals. Petitioner, however, held in abeyance any
Division had been shutdown is of no consequence. It action on the proposals in view of its pending motion
bears stressing that the other divisions were fully for reconsideration. Finding no justification in
operational. There is nothing on record showing that petitioner's refusal to bargain with it, respondent filed a
the union members and the supporters who formed a Notice of Strike with the National Conciliation and
picket line in front of the respondents compound were Mediation Board (NCMB) on December 11, 2000. The
assigned to the finishing department. As can be clearly union raised the issue of unfair labor practice (ULP)
inferred from the spot reports, employees from the allegedly committed by petitioner for the latter's refusal
knitting department also joined in picket. The blockade to bargain with it. Meanwhile, the NLRC issued a
of the delivery of trucks and the attendance of Resolution dated April 17, 2002, declaring petitioner as
employees from the other departments of the having no obligation to recognize respondent as the
respondent meant work stoppage. The placards that certified bargaining agent; dismissing the charge of
the picketers caused to be displayed arose from unfair labor practice; declaring as illegal the strike held
matters concerning terms or conditions of employment by the union; and declaring the loss of employment of
as well as the association or representation of persons the officers of the union.
in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment. ISSUE
Whether or not the strike held by the respondents is
Clearly, the petitioner union, its officers, members and illegal
supporters staged a strike. In order for a strike to be
valid, the following requirements laid down in RULING
paragraphs (c) and (f) of Article 263 of the Labor Code YES. The strike is a legitimate weapon in the human
must be complied with: (a) a notice of strike must be struggle for a decent existence. It is considered as the
filed; (b) a strike-vote must be taken; and (c) the most effective weapon in protecting the rights of the
results of the strike-vote must be reported to the employees to improve the terms and conditions of their
DOLE.41 It bears stressing that these requirements are employment. But to be valid, a strike must be pursued
mandatory, meaning, non-compliance therewith makes within legal bounds. The right to strike as a means for
the strike illegal. The evident intention of the law in the attainment of social justice is never meant to
requiring the strike notice and strike-vote report is to oppress or destroy the employer. The law provides
reasonably regulate the right to strike, which is limits for its exercise. In the instant case, the strike
essential to the attainment of legitimate policy undertaken by the officers of respondent union is
objectives embodied in the law. patently illegal for the following reasons: (1) it is a
union-recognition-strike which is not sanctioned by
Considering that the petitioner union failed to comply labor laws; (2) it was undertaken after the dispute had
with the aforesaid requirements, the strike staged on been certified for compulsory arbitration; and (3) it was
June 11 to 18, 2001 is illegal. Consequently, the in violation of the Secretary's return-to-work order.
officers of the union who participated therein are Respondent's notices of strike were founded on
deemed to have lost their employment status. petitioner's continued refusal to bargain with it. It thus

43
staged the strike to compel petitioner to recognize it as BASCON v. CA, METRO CEBU COMMUNITY
the collective bargaining agent, making it a union- HOSPITAL, INC.
recognition-strike. As its legal designation implies, this G.R. No. 144899. February 5, 2004, Quisumbing
kind of strike is calculated to compel the employer to
recognize one's union and not other contending The petitioners in the instant case were employees of
groups, as the employees' bargaining representative to private respondent Metro Cebu Community Hospital,
work out a collective bargaining agreement despite the Inc. (MCCH) and members of the Nagkahiusang
striking union's doubtful majority status to merit Mamumuosa Metro Cebu Community Hospital (NAMA-
voluntary recognition and lack of formal certification as MCCH), a labor union of MCCH employees. Believing
the exclusive representative in the bargaining unit that their union was the certified collective bargaining
agent, the members and officers of NAMA-MCCH
BIFLEX PHILS. V. FILFLEX INDUSTRIAL & staged a series of mass actions inside MCCHs
MANUFACTURING CORP. premises for alleged failure of MCCH to negotiate and
G.R. NO. 155679, Dec. 19, 2006, Carpio Morales renew the CBA. They marched around the hospital
putting up streamers, placards and
The labor sector staged a welga ng bayan to protest posters.Subsequently, the Department of Labor and
the accelerating prices of oil. Petitioner-unions, led by Employment (DOLE) office in Region 7 issued two (2)
their officers, herein petitioners,staged a work certifications stating that NAMA-MCCH was not a
stoppage which lasted for several days, prompting registered labor organization.Meanwhile, the MCCH
respondents to file on October 31, 1990 a petition to management received reports that petitioners
declare the work stoppage illegal for failure to comply participated in NAMA-MCCHs mass actions.
with procedural requirements. Consequently, notices were served on all union
members, petitioners included, asking them to explain
ISSUES: in writing why they were wearing red and black ribbons
(1) Is welga ng bayan an illegal strike? and roaming around the hospital with placards. In their
(2) Was there an illegal lockout? collective response dated March 18, 1996, the union
(3) Are union officers liable for blocking the free members, including petitioners, explained that wearing
ingress to and egress of the company premises? armbands and putting up placards was their answer to
MCCHs illegal refusal to negotiate with NAMA-MCCH.
HELD:
(1) Yes. Stoppage of work due to welga ng bayan is in Petitioner Bascon, at the time of her termination from
the nature of a general strike, an extended sympathy employment, already held the position of Head Nurse.
strike. It affects numerous employers including those The other petitioner, Cole, had been working as a
who do not have a dispute with their employees nursing aide with MCCH. Both petitioners were
regarding their terms and conditions of employment. dismissed by the respondent hospital for allegedly
participating in an illegal strike.Bascon and Cole filed a
Employees who have no labor dispute with their complaint for illegal dismissal
employer but who, on a day they are scheduled to
work, refuse to work and instead join a welga ng bayan ISSUE
commit an illegal work stoppage. Whether or not petitioners were validly terminated for
(1) allegedly participating in an illegal strike and/or (2)
(2) No. If there was illegal lockout, why, indeed, did not gross insubordination to the order to stop wearing
petitioners file a protest with the management or a armbands and putting up placards.
complaint therefor against respondents? As the Labor
Arbiter observed, [t]he inaction of [petitioners] betrays HELD
the weakness of their contention for normally a locked- (1) NO. In this case, it was found that petitioners actual
out union will immediately bring management before participation in the illegal strike was limited to wearing
the bar of justice. armbands and putting up placards. There was no
finding that the armbands or the placards contained
(3) Yes. They violated Article 264(e) of the Labor Code offensive words or symbols. Thus, neither such
which provides that [n]o person engaged in picketing wearing of armbands nor said putting up of placards
shall obstruct the free ingress to or egress from the can be construed as an illegal act. In fact, per se, they
employers premises for lawful purposes, or obstruct are within the mantle of constitutional protection under
public thoroughfares. freedom of speech.

Petitioners, being union officers, should thus bear the In Article 264 (a) of the Labor Code it could be gleaned
consequences of their acts of knowingly participating that while a union officer can be terminated for mere
in an illegal strike, conformably with the third participation in an illegal strike, an ordinary striking
paragraph of Article 264 (a) of the Labor Code employee, like petitioners herein, must have
participated in the commission of illegal acts during the
strike. There must be proof that they committed illegal

44
acts during the strike. Substantial evidence, which may vehicle manufacturers in the country employing around
justify the imposition of the penalty of dismissal, may 1,400 workers for its plants in Bicutan and Sta. Rosa,
suffice. Laguna.

Evidence on record shows that various illegal acts On February 14, 1999, the Union filed a petition for
were committed by unidentified union members in the certification election among the Toyota rank and file
course of the protracted mass action. And we employees with the National Conciliation and
commiserate with MCCH, patients, and third parties for Mediation Board (NCMB), but this was denied by Med-
the damage they suffered. But we cannot hold Arbiter Ma. Zosima C. Lameyra denied the petition.
petitioners responsible for acts they did not commit. This order was reversed on appeal to the DOLE
The law, obviously solicitous of the welfare of the Secretary.
common worker, requires, before termination may be
considered, that an ordinary union member must have On the other hand, Toyota filed for reconsideration but
knowingly participated in the commission of illegal acts it was denied. Toyota challenged said Order via an
during a strike. appeal to the DOLE Secretary.

(2) As regards the appellate courts finding that In the meantime, the Union submitted its Collective
petitioners were justly terminated for gross Bargaining Agreement (CBA) proposals to Toyota, but
insubordination or willful disobedience, Article 282 of the latter refused to negotiate in view of its pending
the Labor Code provides in part: appeal. Consequently, the Union filed a notice of strike
on January 16, 2001 with the NCMB based on
An employer may terminate an employment for any of Toyotas refusal to bargain. On February 5, 2001, the
the following causes: NCMB-NCR converted the notice of strike into a
(a) Serious misconduct or willful disobedience by the preventive mediation case on the ground that the issue
employee of the lawful orders of his employer or of whether or not the Union is the exclusive bargaining
representative in connection with his work. agent of all Toyota rank and file employees was still
unresolved by the DOLE Secretary.
However, willful disobedience of the employers lawful
orders, as a just cause for dismissal of an employee, In connection with Toyotas appeal, Toyota and the
envisages the concurrence of at least two requisites: Union were required to attend a hearing on February
(1) the employee's assailed conduct must have been 21, 2001 before the Bureau of Labor Relations (BLR).
willful, that is, characterized by a wrongful and The hearing was cancelled and reset to February 22,
perverse attitude; and (2) the order violated must have 2001. On February 21, 2001, 135 Union officers and
been reasonable, lawful, made known to the employee members failed to render the required overtime work,
and must pertain to the duties which he had been and instead marched to and staged a picket in front of
engaged to discharge. the BLR office in Intramuros, Manila. Mass actions on
February 22 and 23, 2001 in front of the BLR and the
In this case, we find lacking the element of willfulness DOLE offices pushed through. Toyota experienced
characterized by a perverse mental attitude on the part acute lack of manpower in its manufacturing and
of petitioners in disobeying their employers order as to production lines, and was unable to meet its
warrant the ultimate penalty of dismissal. Wearing production goals resulting in huge losses of PhP
armbands and putting up placards to express ones 53,849,991.
views without violating the rights of third parties, are
legal per se and even constitutionally protected. Thus, Soon thereafter, on February 27, 2001, Toyota sent
MCCH could have done well to respect petitioners individual letters to some 360 employees requiring
right to freedom of speech instead of threatening them them to explain within 24 hours why they should not be
with disciplinary action and eventually terminating dismissed for their obstinate defiance of the companys
them. directive to render overtime work on February 21,
2001, for their failure to report for work on February 22
TOYOTA MOTOR PHILS. CORP. WORKERS and 23, 2001, and for their participation in the
ASSOCIATION (TMPCWA) v. NLRC concerted actions which severely disrupted and
G.R. Nos. 158786 & 158789, October 19, 2007, paralyzed the plants operations.Meanwhile, a
Velasco February 27, 2001 Manifesto was circulated by the
Union which urged its members to participate in a
The Union is a legitimate labor organization duly strike/picket and to abandon their posts.
registered with the Department of Labor and
Employment (DOLE) and is the sole and exclusive On the next day, the Union filed with the NCMB
bargaining agent of all Toyota rank and file another notice of strike for union busting amounting to
employees.Toyota, on the other hand, is a domestic unfair labor practice.
corporation engaged in the assembly and sale of
vehicles and parts, and one of the largest motor

45
On March 1, 2001, the Union nonetheless submitted Meanwhile, on May 23, 2001, at around 12:00 nn.,
an explanation in compliance with the February 27, despite the issuance of the DOLE Secretarys
2001 notices sent by Toyota to the erring employees. certification Order, several payroll-reinstated members
The Union members explained that their refusal to of the Union staged a protest rally in front of Toyotas
work on their scheduled work time for two consecutive Bicutan Plant. Then, on May 28, 2001, around forty-
days was simply an exercise of their constitutional right four (44) Union members staged another protest action
to peaceably assemble and to petition the government in front of the Bicutan Plant. At the same time, some
for redress of grievances. It further argued that the twenty-nine (29) payroll-reinstated employees picketed
demonstrations staged by the employees on February in front of the Santa Rosa Plants main entrance, and
22 and 23, 2001 could not be classified as an illegal were later joined by other Union members.
strike or picket, and that Toyota had already condoned
the alleged acts when it accepted back the subject On June 5, 2001, notwithstanding the certification
employees. Order, the Union filed another notice of strike, which
was docketed as NCMB-NCR-NS-06-150-01.
On March 16, 2001, Toyota terminated the
employment of 227 employees for participation in In the meantime, the NLRC ordered both parties to
concerted actions in violation of its Code of Conduct submit their respective position papers on June 8,
and for misconduct under Article 282 of the Labor 2001. The union, however, requested for abeyance of
Code. the proceedings pending the petition for certiorari with
the CA. On June 19, 2001, the NLRC issued an Order,
In reaction to the dismissal of its union members and reiterating its previous order for both parties to submit
officers, the Union went on strike on March 17, 2001. their respective position papers on or before June 2,
Subsequently, from March 28, 2001 to April 12, 2001, 2001. On June 27, 2001, the Union filed a Motion for
the Union intensified its strike by barricading the gates Reconsideration of the NLRCs June 19, 2001 Order,
of Toyotas Bicutan and Sta. Rosa plants. The strikers praying for the deferment of the submission of position
prevented workers who reported for work from entering papers until its petition for certiorari is resolved by the
the plants. CA.

On March 29, 2001, Toyota filed a petition for On June 29, 2001, only Toyota submitted its position
injunction with a prayer for the issuance of a temporary paper. On July 11, 2001, the NLRC again ordered the
restraining order (TRO) with the NLRC to seek free Union to submit its position paper by July 19, 2001,
ingress to and egress from its Bicutan and Sta. Rosa with a warning that upon failure for it to do so, the case
manufacturing plants, this was granted by the shall be considered submitted for decision. Meanwhile,
NLRC.Meanwhile, Toyota filed a petition to declare the on July 17, 2001, the CA dismissed the Unions
strike illegal with the NLRC arbitration branch, which petition for certiorari.
was docketed as NLRC NCR (South) Case No. 30-04-
01775-01, and prayed that the erring Union officers, During the August 3, 2001 hearing, the Union, despite
directors, and members be dismissed. several accommodations, still failed to submit its
position paper. Later that day, the Union claimed it
On April 10, 2001, the DOLE Secretary assumed filed its position paper by registered mail.
jurisdiction over the labor dispute and issued an
Ordercertifying the labor dispute to the NLRC. In said Subsequently, the NLRC, in its August 9, 2001
Order, the DOLE Secretary directed all striking Decision, declared the strikes staged by the Union on
workers to return to work at their regular shifts by April February 21 to 23, 2001 and May 23 and 28, 2001 as
16, 2001 and ordered Toyota to accept the returning illegal. Accordingly, both Toyota and the Union filed
employees under the same terms and conditions Motions for Reconsideration, which the NLRC denied
obtaining prior to the strike or at its option, put them in its September 14, 2001 Resolution. The CA then
under payroll reinstatement. The Union ended the consolidated the petitions.
strike on April 12, 2001. The union members and
officers tried to return to work on April 16, 2001 but In justifying the recall of the severance compensation,
were told that Toyota opted for payroll-reinstatement the CA considered the participation in illegal strikes as
authorized by the Order of the DOLE Secretary. serious misconduct. However, in its June 20, 2003
Resolution, the CA modified its February 27, 2003
In the meantime, the Union filed a motion for Decision by reinstating severance compensation to the
reconsideration of the DOLE Secretarys April 10, 2001 dismissed employees based on social justice.
certification Order, which, however, was denied by the
DOLE Secretary in her May 25, 2001 Resolution. ISSUES
Consequently, a petition for certiorari was filed before (1) Whether the mass actions committed by the Union
the CA, which was docketed as CA-G.R. SP No. on different occasions are illegal strikes; and
64998. (2) Whether separation pay should be awarded to the
Union members who participated in the illegal strikes.

46
RULING It is obvious that the February 21 to 23, 2001
The Union contends that the NLRC violated its right to concerted actions were undertaken without satisfying
due process when it disregarded its position paper in the prerequisites for a valid strike under Art. 263 of the
deciding Toyotas petition to declare the strike illegal. It Labor Code. These requirements are mandatory and
is entirely the Unions fault that its position paper was the failure of a union to comply with them renders the
not considered by the NLRC. Records readily reveal strike illegal.
that the NLRC was even too generous in affording due
process to the Union. It issued no less than three (3) Moreover, the aforementioned February 2001 strikes
orders for the parties to submit its position papers, are in blatant violation of Sec. D, par. 6 of Toyotas
which the Union ignored until the last minute. No Code of Conduct which prohibits "inciting or
sufficient justification was offered why the Union participating in riots, disorders, alleged strikes or
belatedly filed its position paper. concerted actions detrimental to [Toyotas] interest."
The penalty for the offense is dismissal. The Union
Petitioner Union contends that the protests or rallies and its members are bound by the company rules, and
conducted on February 21 and 23, 2001 are not within the February 2001 mass actions and deliberate refusal
the ambit of strikes as defined in the Labor Code, to render regular and overtime work on said days
since they were legitimate exercises of their right to violated these rules. In sum, the February 2001 strikes
peaceably assemble and petition the government for and walk-outs were illegal as these were in violation of
redress of grievances. The Unions position fails to specific requirements of the Labor Code and a
convince us. company rule against illegal strikes or concerted
actions.
While the facts in Philippine Blooming Mills Employees
Organization are similar in some respects to that of the With respect to the strikes committed from March 17 to
present case, the Union fails to realize one major April 12, 2001, those were initially legal as the legal
difference: there was no labor dispute in Philippine requirements were met. However, on March 28 to April
Blooming Mills Employees Organization. In the present 12, 2001, the Union barricaded the gates of the
case, there was an on-going labor dispute arising from Bicutan and Sta. Rosa plants and blocked the free
Toyotas refusal to recognize and negotiate with the ingress to and egress from the company premises.
Union, which was the subject of the notice of strike Toyota employees, customers, and other people
filed by the Union on January 16, 2001. having business with the company were intimidated
and were refused entry to the plants. As earlier
A strike means any temporary stoppage of work by the explained, these strikes were illegal because unlawful
concerted action of employees as a result of an means were employed.
industrial or labor dispute. A labor dispute, in turn,
includes any controversy or matter concerning terms Petitioner Union also posits that strikes were not
or conditions of employment or the association or committed on May 23 and 28, 2001. The Union asserts
representation of persons in negotiating, fixing, that the rallies held on May 23 and 28, 2001 could not
maintaining, changing, or arranging the terms and be considered strikes, as the participants were the
conditions of employment, regardless of whether the dismissed employees who were on payroll
disputants stand in the proximate relation of the reinstatement. It concludes that there was no work
employer and the employee.35 stoppage. This contention has no basis.

The protest actions undertaken by the Union officials It is clear that once the DOLE Secretary assumes
and members on February 21 to 23, 2001 are not valid jurisdiction over the labor dispute and certifies the case
and proper exercises of their right to assemble and ask for compulsory arbitration with the NLRC, the parties
government for redress of their complaints, but are have to revert to the status quo ante (the state of
illegal strikes in breach of the Labor Code. The Unions things as it was before). As provided under Article
position is weakened by the lack of permit from the 2634(g) of the Labor Code, all striking workers are
City of Manila to hold "rallies." Shrouded as directed to return to work at their regular shifts by April
demonstrations, they were in reality temporary 16, 2001; the Company is in turn directed to accept
stoppages of work perpetrated through the concerted them back to work under the same terms and
action of the employees who deliberately failed to conditions obtaining prior to the work stoppage,
report for work on the convenient excuse that they will subject to the option of the company to merely
hold a rally at the BLR and DOLE offices in Intramuros, reinstate a worker or workers in the payroll in light of
Manila, on February 21 to 23, 2001. The purported the negative emotions that the strike has generated
reason for these protest actions was to safeguard their and the need to prevent the further deterioration of the
rights against any abuse which the med-arbiter may relationship between the company and its workers.
commit against their cause. However, the Union failed
to advance convincing proof that the med-arbiter was While it may be conceded that there was no work
biased against them. disruption in the two Toyota plants, the fact still

47
remains that the Union and its members picketed and (1) The rallies held at the DOLE and BLR
performed concerted actions in front of the Company offices on February 21, 22, and 23, 2001;
premises. This is a patent violation of the assumption (2) The strikes held on March 17 to April 12,
of jurisdiction and certification Order of the DOLE 2001; and
Secretary, which ordered the parties "to cease and (3) The rallies and picketing on May 23 and
desist from committing any act that might lead to the 28, 2001 in front of the Toyota Bicutan and
worsening of an already deteriorated situation." While Sta. Rosa plants.
there are no work stoppages, the pickets and
concerted actions outside the plants have a Did they commit illegal acts during the illegal strikes on
demoralizing and even chilling effect on the workers February 21 to 23, 2001, from March 17 to April 12,
inside the plants and can be considered as veiled 2001, and on May 23 and 28, 2001? The answer is in
threats of possible trouble to the workers when they go the affirmative. As we have ruled that the strikes by the
out of the company premises after work and of Union on the three different occasions were illegal, we
impending disruption of operations to company officials now proceed to determine the individual liabilities of
and even to customers in the days to come. the affected union members for acts committed during
these forbidden concerted actions.
From the foregoing discussion, we rule that the
February 21 to 23, 2001 concerted actions, the March After a scrutiny of the records, we find that the 227
17 to April 12, 2001 strikes, and the May 23 and 28, employees indeed joined the February 21, 22, and 23,
2001 mass actions were illegal strikes. 2001 rallies and refused to render overtime work or
report for work. These rallies, as we earlier ruled, are
Union officers are liable for unlawful strikes or illegal in reality illegal strikes, as the procedural requirements
acts during a strike. It is clear that the responsibility of for strikes under Art. 263 were not complied with.
union officials is greater than that of the members. The Worse, said strikes were in violation of the company
Union officials were in clear breach of Art. 264(a) when rule prohibiting acts "in citing or participating in riots,
they knowingly participated in the illegal strikes held disorders, alleged strikes or concerted action
from February 21 to 23, 2001, from March 17 to April detrimental to Toyotas interest." Anent the March 28
12, 2001, and on May 23 and 28, 2001. to April 12, 2001 strikes, evidence is ample to show
commission of illegal acts like acts of coercion or
Members liability depends on participation in illegal intimidation and obstructing free ingress to or egress
acts. Art. 264(a) of the Labor Code provides that a from the company premises. Mr. Eduardo Nicolas III,
member is liable when he knowingly participates in an Toyotas Security Chief, attested in his affidavit that the
illegal act "during a strike." While the provision is silent strikers "badmouthed people coming in and shouted
on whether the strike is legal or illegal, we find that the invectives such as bakeru at Japanese officers of the
same is irrelevant. As long as the members commit company." The strikers even pounded the vehicles of
illegal acts, in a legal or illegal strike, then they can be Toyota officials. More importantly, they prevented the
terminated. However, when union members merely ingress of Toyota employees, customers, suppliers,
participate in an illegal strike without committing any and other persons who wanted to transact business
illegal act, are they liable? This was squarely with the company. These were patent violations of Art.
answered in Gold City Integrated Port Service, Inc. v. 264(e) of the Labor Code, and may even constitute
NLRC, where it was held that an ordinary striking crimes under the Revised Penal Code such as threats
worker cannot be terminated for mere participation in or coercion among others.
an illegal strike. This was an affirmation of the rulings
in Bacus v. Ople and Progressive Workers Union v. Lastly, the strikers, though on payroll reinstatement,
Aguas, where it was held that though the strike is staged protest rallies on May 23, 2001 and May 28,
illegal, the ordinary member who merely participates in 2001 in front of the Bicutan and Sta. Rosa plants.
the strike should not be meted loss of employment on These workers acts in joining and participating in the
the considerations of compassion and good faith and May 23 and 28, 2001 rallies or pickets were patent
in view of the security of tenure provisions under the violations of the April 10, 2001 assumption of
Constitution. In Esso Philippines, Inc. v. jurisdiction/certification Order issued by the DOLE
MalayangManggagawasa Esso (MME), it was Secretary, which proscribed the commission of acts
explained that a member is not responsible for the that might lead to the "worsening of an already
unions illegal strike even if he voted for the holding of deteriorated situation." Art. 263(g) is clear that strikers
a strike which became illegal. Thus, the rule on who violate the assumption/certification Order may
vicarious liability of a union member was abandoned suffer dismissal from work. This was the situation in
and it is only when a striking worker "knowingly the May 23 and 28, 2001 pickets and concerted
participates in the commission of illegal acts during a actions, with the following employees who committed
strike" that he will be penalized with dismissal. illegal acts:

In the cases at bench, the individual respondents Anent the grant of severance compensation to legally
participated in several mass actions, viz: dismissed union members, Toyota assails the turn-

48
around by the CA in granting separation pay in its June reconsideration of its February 27, 2003 Decision, the
20, 2003 Resolution after initially denying it in its CA however performed a volte-face by reinstating the
February 27, 2003 Decision. The general rule is that award of separation pay. The CAs grant of separation
when just causes for terminating the services of an pay is an erroneous departure from our ruling in Phil.
employee under Art. 282 of the Labor Code exist, the Long Distance Telephone Co. v. NLRC that serious
employee is not entitled to separation pay. The misconduct forecloses the award of separation pay.
apparent reason behind the forfeiture of the right to
termination pay is that lawbreakers should not benefit NUWHRAIN Dusit Hotel Nikko Chapter v. CA
from their illegal acts. The dismissed employee, G.R. No. 163942, November 11, 2008, Velasco
however, is entitled to "whatever rights, benefits and
privileges [s/he] may have under the applicable Quick Facts: This case is with regard to the shaving of
individual or collective bargaining agreement with the heads issue of Hotel Employees. Whether such act,
employer or voluntary employer policy or practice"65 or among others, under certain circumstances amount to
under the Labor Code and other existing laws. With an illegal strike. The SC said, yes it is.
respect to benefits granted by the CBA provisions and
voluntary management policy or practice, the FACTS
entitlement of the dismissed employees to the benefits The Union is the certified bargaining agent of the
depends on the stipulations of the CBA or the regular rank-and-file employees of Dusit Hotel Nikko
company rules and policies. (Hotel), a five star service establishment owned and
operated by Philippine Hoteliers, Inc. located in Makati
As in any rule, there are exceptions. One exception City.
where separation pay is given even though an
employee is validly dismissed is when the court finds On October 24, 2000, the Union submitted its CBA
justification in applying the principle of social justice negotiation proposals to the Hotel. As negotiations
well entrenched in the 1987 Constitution. ensued, the parties failed to arrive at mutually
acceptable terms and conditions. Due to the
We hold that henceforth separation pay shall be bargaining deadlock, the Union, on December 20,
allowed as a measure of social justice only in those 2001, filed a Notice of Strike on the ground of the
instances where the employee is validly dismissed for bargaining deadlock with the NCMB. Thereafter,
causes other than serious misconduct or those conciliation hearings were conducted which proved
reflecting on his moral character. Where the reason for unsuccessful.
the valid dismissal is, for example, habitual intoxication
or an offense involving moral turpitude, like theft or Consequently, a Strike Vote was conducted by the
illicit sexual relations with a fellow worker, the Union on January 14, 2002 on which it was decided
employer may not be required to give the dismissed that the Union would wage a strike.
employee separation pay, or financial assistance, or
whatever other name it is called, on the ground of Soon thereafter, in the afternoon of January 17, 2002,
social justice. the Union held a general assembly at its office located
in the Hotel's basement, where some members
A recall of recent cases decided bearing on the issue sported closely cropped hair or cleanly shaven heads.
reveals that when the termination is legally justified on The next day, or on January 18, 2002, more male
any of the grounds under Art. 282, separation pay was Union members came to work sporting the same hair
not allowed. In all of the foregoing situations, the Court style. The Hotel prevented these workers from entering
declined to grant termination pay because the causes the premises claiming that they violated the Hotel's
for dismissal recognized under Art. 282 of the Labor Grooming Standards.
Code were serious or grave in nature and attended by
willful or wrongful intent or they reflected adversely on In view of the Hotel's action, the Union staged a picket
the moral character of the employees. We therefore outside the Hotel premises. Later, other workers were
find that in addition to serious misconduct, in also prevented from entering the Hotel causing them to
dismissals based on other grounds under Art. 282 like join the picket. For this reason the Hotel experienced a
willful disobedience, gross and habitual neglect of severe lack of manpower which forced them to
duty, fraud or willful breach of trust, and commission of temporarily cease operations in three restaurants.
a crime against the employer or his family, separation
pay should not be conceded to the dismissed Subsequently, on January 20, 2002, the Hotel issued
employee. notices to Union members, preventively suspending
them and charging them with the following offenses:
In the case at bench, are the 227 striking employees (1) violation of the duty to bargain in good faith; (2)
entitled to separation pay? illegal picket; (3) unfair labor practice; (4) violation of
In the instant case, the CA concluded that the illegal the Hotel's Grooming Standards; (5) illegal strike; and
strikes committed by the Union members constituted (6) commission of illegal acts during the illegal strike.
serious misconduct.In disposing of the Unions plea for

49
The next day, the Union filed with the NCMB a second with the CA.
Notice of Strike on the ground of unfair labor practice
and violation of Article 248(a) of the Labor Code on CA upheld NLRCs Ruling. The CA ratiocinated that
illegal lockout, which was docketed as NCMB-NCR- the Union failed to demonstrate that the NLRC
NS-01-019-02. In the meantime, the Union officers and committed grave abuse of discretion and capriciously
members submitted their explanations to the charges exercised its judgment or exercised its power in an
alleged by the Hotel, while they continued to stage a arbitrary and despotic manner. Unions MR was again
picket just inside the Hotel's compound. denied.

On January 26, 2002, the Hotel terminated the ISSUES


services of 29 Union officers and 61 members; and 1. May the Secretary order payroll reinstatement rather
suspended 136 employees from 5-30 days. On the than actual reinstatement? - YES
same day, the Union declared a strike. Starting that 2. Did the union stage an illegal strike? YES
day, the Union engaged in picketing the premises of - May Hotel Nikko legally prevent employees from
the Hotel. During the picket, the Union officials and reporting for work for alleged violation of the hotel's
members unlawfully blocked the ingress and egress of grooming standards? YES
the Hotel premises. - Was there an illegal lock-out committed by Hotel
Nikko? - NO
Consequently, on January 31, 2002, the Union filed its
third Notice of Strike with the NCMB which, this time RULING:
on the ground of unfair labor practice and union- 1. YES. Article 263(g) of the Labor Code states that
busting. all workers must immediately return to work and
all employers must readmit all of them under the
On the same day, the Secretary, through her January same terms and conditions prevailing before the
31, 2002 Order, assumed jurisdiction over the labor strike or lockout. The phrase "under the same
dispute and certified the case to the NLRC for terms and conditions" makes it clear that the norm
compulsory arbitration. The Hotel was ordered either is actual reinstatement. This is consistent with the
to have actual or payroll reinstatement of dismissed idea that any work stoppage or slowdown in that
employees. particular industry can be detrimental to the
national interest.
After due proceedings, the NLRC issued its October 9,
2002 Decision in which it ordered the Hotel and the Thus, it was settled that in assumption of
Union to execute a CBA within 30 days from the jurisdiction cases, the Secretary should impose
receipt of the decision. The NLRC also held that the actual reinstatement in accordance with the intent
January 18, 2002 concerted action was an illegal strike and spirit of Art. 263(g) of the Labor Code.
in which illegal acts were committed by the Union; and However, this one is subject to exceptions. In
that the strike violated the "No Strike, No Lockout" Manila Diamond Hotel Employees' Union v. Court
provision of the CBA, which thereby caused the of Appeals that payroll reinstatement is a
dismissal of 29 Union officers and 61 Union members. departure from the rule, and special
circumstances which make actual reinstatement
The NLRC ordered the Hotel to grant the 61 dismissed impracticable must be shown. In one case, payroll
Union members financial assistance in the amount of reinstatement was allowed where the employees
month's pay for every year of service or their previously occupied confidential positions,
retirement benefits under their retirement plan because their actual reinstatement, the Court
whichever was higher. said, would be impracticable and would only serve
to exacerbate the situation.
The NLRC explained that the strike which occurred on
January 18, 2002 was illegal because it failed to The peculiar circumstances in the present case
comply with the mandatory 30-day cooling-off period validate the Secretary's decision to order payroll
and the seven-day strike ban, as the strike occurred reinstatement instead of actual reinstatement. It is
only 29 days after the submission of the notice of strike obviously impracticable for the Hotel to actually
on December 20, 2001 and only four days after the reinstate the employees who shaved their heads
submission of the strike vote on January 14, 2002. The or cropped their hair because this was exactly the
NLRC also ruled that even if the Union had complied reason they were prevented from working in the
with the temporal requirements mandated by law, the first place. Further, as with most labor disputes
strike would nonetheless be declared illegal because it which have resulted in strikes, there is mutual
was attended by illegal acts committed by the Union antagonism, enmity, and animosity between the
officers and members. union and the management. Payroll
reinstatement, most especially in this case, would
The Union MR of the NLRC's Decision was denied. have been the only avenue where further
The Union filed a Petition for Certiorari under Rule 65 incidents and damages could be avoided. Public

50
officials entrusted with specific jurisdictions enjoy coming to work on January 18, 2002, some Union
great confidence from this Court. The Secretary members even had their heads shaved or their
surely meant only to ensure industrial peace as hair cropped at the Union office in the Hotel's
she assumed jurisdiction over the labor dispute. In basement. Clearly, the decision to violate the
this case, we are not ready to substitute our own company rule on grooming was designed and
findings in the absence of a clear showing of calculated to place the Hotel management on its
grave abuse of discretion on her part. heels and to force it to agree to the Union's
proposals.
2. Art. 212(o) of the Labor Code defines a strike as
"any temporary stoppage of work by the In view of the Union's collaborative effort to violate
concerted action of employees as a result of an the Hotel's Grooming Standards, it succeeded in
industrial or labor dispute." forcing the Hotel to choose between allowing its
inappropriately hair styled employees to continue
Noted authority on labor law, Ludwig Teller, lists working, to the detriment of its reputation, or to
six (6) categories of an illegal strike, viz.: refuse them work, even if it had to cease
1. when it is contrary to a specific prohibition of operations in affected departments or service
law, such as strike by employees performing units, which in either way would disrupt the
governmental functions; or operations of the Hotel. This Court is of the
2. when it violates a specific requirement of law[, opinion, therefore, that the act of the Union was
such as Article 263 of the Labor Code on the not merely an expression of their grievance or
requisites of a valid strike]; or displeasure but, indeed, a calibrated and
3. when it is declared for an unlawful purpose, calculated act designed to inflict serious damage
such as inducing the employer to commit an to the Hotel's finances or its reputation. Thus, we
unfair labor practice against non-union hold that the Union's concerted violation of the
employees; or Hotel's Grooming Standards which resulted in the
4. when it employs unlawful means in the pursuit temporary cessation and disruption of the Hotel's
of its objective, such as a widespread operations is an unprotected act and should be
terrorism of non-strikers [for example, considered as an illegal strike.
prohibited acts under Art. 264(e) of the Labor Second, the Union's concerted action which
Code]; or disrupted the Hotel's operations clearly violated
5. when it is declared in violation of an existing the CBA's "No Strike, No Lockout" Clause.
injunction[, such as injunction, prohibition, or
order issued by the DOLE Secretary and the The facts are clear that the strike arose out of a
NLRC under Art. 263 of the Labor Code]; or bargaining deadlock in the CBA negotiations with
6. when it is contrary to an existing agreement, the Hotel. The concerted action is an economic
such as a no-strike clause or conclusive strike upon which the afore-quoted "no strike/work
arbitration clause. stoppage and lockout" prohibition is squarely
applicable and legally binding.
The Union staged an illegal strike.
First, the Union's violation of the Hotel's Grooming Third, the Union officers and members' concerted
Standards was clearly a deliberate and concerted action to shave their heads and crop their hair not
action to undermine the authority of and to only violated the Hotel's Grooming Standards but
embarrass the Hotel and was, therefore, not a also violated the Union's duty and responsibility to
protected action. The appearances of the Hotel bargain in good faith. By shaving their heads and
employees directly reflect the character and well- cropping their hair, the Union officers and
being of the Hotel, being a five-star hotel that members violated then Section 6, Rule XIII of the
provides service to top-notch clients. Being bald Implementing Rules of Book V of the Labor Code.
or having cropped hair per se does not evoke This rule prohibits the commission of any act
negative or unpleasant feelings. The reality that a which will disrupt or impede the early settlement
substantial number of employees assigned to the of the labor disputes that are under conciliation.
food and beverage outlets of the Hotel with full Since the bargaining deadlock is being conciliated
heads of hair suddenly decided to come to work by the NCMB, the Union's action to have their
bald-headed or with cropped hair, however, officers and members' heads shaved was
suggests that something is amiss and insinuates manifestly calculated to antagonize and
a sense that something out of the ordinary is embarrass the Hotel management and in doing so
afoot. Obviously, the Hotel does not need to effectively disrupted the operations of the Hotel
advertise its labor problems with its clients. It can and violated their duty to bargain collectively in
be gleaned from the records before us that the good faith.
Union officers and members deliberately and in
apparent concert shaved their heads or cropped Fourth, the Union failed to observe the mandatory
their hair. This was shown by the fact that after 30-day cooling-off period and the seven-day strike

51
ban before it conducted the strike on January 18, and until the NCMB is notified at least 24 hours of the
2002. The NLRC correctly held that the Union unions decision to conduct a strike vote, and the date,
failed to observe the mandatory periods before place, and time thereof, the NCMB cannot determine
conducting or holding a strike. Records reveal that for itself whether to supervise a strike vote meeting or
the Union filed its Notice of Strike on the ground not and insure its peaceful and regular conduct. The
of bargaining deadlock on December 20, 2001. failure of a union to comply with the requirement of the
The 30-day cooling-off period should have been giving of notice to the NCMB at least 24 hours prior to
until January 19, 2002. On top of that, the strike the holding of a strike vote meeting will render the
vote was held on January 14, 2002 and was subsequent strike staged by the union illegal.
submitted to the NCMB only on January 18, 2002;
therefore, the 7-day strike ban should have TRANS-ASIA SHIPPING LINES, INC. -
prevented them from holding a strike until January UNLICENSED CREWS EMPLOYEES UNION
25, 2002. The concerted action committed by the ASSOCIATED LABOR UNIONS (TASLI-ALU) et. al.
Union on January 18, 2002 which resulted in the vs. COURT OF APPEALS and TRANS-ASIA
disruption of the Hotel's operations clearly SHIPPING LINES, INC.
violated the above-stated mandatory periods. G.R. No. 145428, July 7, 2004, Callejo

CAPITOL MEDICAL CENTER, INC., petitioner, vs. On July 6 and 7, 1999, the two unions filed separate
NATIONAL LABOR RELATIONS COMMISSION, et notices of strike with the NCMB-RB VII against the
al. respondent on the ground of ULP. Then Secretary of
G.R. No. 147080. April 26, 2005, Callejo Labor Bienvenido E. Laguesma intervened and issued
the Order dated July 20, 1999 certifying the labor
Respondent Capitol Medical Center Employees dispute to the NLRC for compulsory arbitration and
Association-Alliance of Filipino Workers (Union) enjoining any strike or lock-out.
demanded to be certified as the exclusive bargaining
agent of Petitioner Companys rank-and-file Despite the aforesaid order, the petitioners went on
employees. The Union had to contend with another strike on July 23, paralyzing the respondents
union the Capitol Medical Center Alliance of operations. The SOLE was thus constrained to issue
Concerned Employees (CMC-ACE). Med-Arbiter the Order dated July 23, 1999 directing all striking
granted the petition, but the Secretary of DOLE workers to return to work within twelve (12) hours from
reversed the same. Because of the Unions questioned receipt of this Order and for the Company to accept
majority status, Petitioner refused to negotiate a CBA. them back under the same terms and conditions
This resulted in a union-led strike by the Union. prevailing before the strike.

ISSUE On even date, twenty-one (21) of the striking workers,


Is the strike illegal? including the individual petitioners, were dismissed
from employment by the respondent for alleged
HELD violation of the cease-and-desist directive contained in
YES. Respondent Union failed to comply with the the Order of July 20, 1999 by waging an illegal strike.
mandatory twenty-four (24) hour notice to the NCMB
for the conduct of a strike vote. The bone of contention between the parties hinged on
the proper interpretation of the phrase for the company
Unless the NCMB is notified of the date, place and to accept them back under the same terms and
time of the meeting of the union members for the conditions prevailing before the strike. The terminated
conduct of a strike vote, the NCMB would be unable to workers asserted that said phrase must be construed
supervise the holding of the same, if and when it to mean that they be reinstated to their former
decides to exercise its power of supervision. assignments. The respondent posited that it refers
only to their salary grades, rank and seniority, but
The requirement of giving notice of the conduct of a cannot encompass the usurpation of managements
strike vote to the NCMB at least 24 hours before the prerogative to determine where its employees are to
meeting for the said purpose is designed to (a) inform be assigned nor to determine their job assignments.
the NCMB of the intent of the union to conduct a strike
vote; (b) give the NCMB ample time to decide on ISSUE
whether or not there is a need to supervise the Whether or not the striking employees may be
conduct of the strike vote to prevent any acts of reinstated in their former assignments by virtue of the
violence and/or irregularities attendant thereto; and (c) phrase "for the company to accept them back under
should the NCMB decide on its own initiative or upon the same terms and conditions prevailing before the
the request of an interested party including the strike" in the Order issued by the SOLE?
employer, to supervise the strike vote, to give it ample
time to prepare for the deployment of the requisite HELD
personnel, including peace officers if need be. Unless

52
Yes. The respondent cannot rightfully exercise its Yes. The Secretary properly took cognizance of the
managements prerogative to determine where its issue on the legality of the strike. As the Court of
employees are to be assigned or to determine their job Appeals correctly pointed out, since the very reason of
assignments in view of the explicit directive contained the Secretarys assumption of jurisdiction was PEUs
in the Orders of the SOLE to accept the striking declaration of the strike, any issue regarding the strike
workers back under the same terms and conditions is not merely incidental to, but is essentially involved
prevailing prior to the strike. The order simply means in, the labor dispute itself.The powers granted to the
that the employees should be returned to their ship Secretary under Article 263(g) of the Labor Code have
assignments as before they staged their strike. To been characterized as an exercise of the police power
reiterate, Article 263 (g) of the Labor Code constitutes of the State, with the aim of promoting public
an exception to the management prerogative of hiring, good.When the Secretary exercises these powers, he
firing, transfer, demotion and promotion of employees. is granted great breadth of discretion in order to find a
And to the extent that Article 263 (g) calls for the solution to a labor dispute. The most obvious of these
admission of all workers under the same terms and powers is the automatic enjoining of an impending
conditions prevailing before the strike, the respondent strike or lockout or its lifting if one has already taken
is restricted from exercising its generally unbounded place.In this case, the Secretary assumed jurisdiction
right to transfer or reassign its employees. The over the dispute because it falls in an industry
respondent is mandated, under the said order, to issue indispensable to the national interest. It is of no
embarkation orders to the employees to enable them moment that PEU never acquiesced to the submission
to report to their ship assignments in compliance with for resolution of the issue on the legality of the strike.
the Order of the Secretary of Labor. PEU cannot prevent resolution of the legality of the
strike by merely refusing to submit the issue for
PHILCOM EMPLOYEES UNION V. PHIL. GLOBAL resolution. It is also immaterial that this issue, as PEU
COMMUNICATIONS asserts, was not properly submitted for resolution of
G.R. No. 144315, July 17, 2006, Carpio the Secretary. The authority of the Secretary to
assume jurisdiction over a labor dispute causing or
Upon the expiration of the Collective Bargaining likely to cause a strike or lockout in an industry
Agreement (CBA) between petitioner Philcom indispensable to national interest includes and extends
Employees Union (PEU or union, for brevity) and to all questions and controversies arising from such
private respondent Philippine Global Communications, labor dispute. The power is plenary and discretionary
Inc. (Philcom, Inc.), the parties started negotiations for in nature to enable him to effectively and efficiently
the renewal of their CBA. While negotiations were dispose of the dispute.
ongoing, PEU filedwith the National Conciliation and
Mediation Board (NCMB) National Capital Region, a NISSAN MOTORS VS. SECRETARY OF LABOR
Notice of Strikedue to perceived unfair labor practice G.R. Nos. 158190-91, June 21, 2006, Garcia
committed by the company, and another Notice of
Strikeon the ground of bargaining deadlock. While the A bargaining deadlock prompted the filing of four
union and the company officers and representatives notices of strike by the labor union. The DOLE, upon
were meeting, the remaining union officers and Nissan Motors petition, issued an order assuming
members staged a strike at the company premises, jurisdiction over the dispute. Consequently, the DOLE
barricading the entrances and egresses thereof and Secretary issued an order expressly enjoining any
setting up a stationary picket at the main entrance of strike or lockout and directed the parties to cease and
the building.Then Acting Labor Secretary Cresenciano desist from committing any act that may exacerbate
B. Trajano issued an Order assuming jurisdiction over the situation. Several Union Officers were dismissed
the dispute, enjoining any strike or lockout, whether due to the continued conduct of a slowdown union
threatened or actual, directing the parties to cease and members who participated in such were not.
desist from committing any act that may exacerbate Petitioners fault the NLRC for dismissing only the
the situation, directing the striking workers to return to union officers for violation of the return to work order.
work within twenty-four (24) hours from receipt of the
Secretarys Order and for management to resume ISSUE
normal operations, as well as accept the workers back Is liability for the violation of a RTWO solely a
under the same terms and conditions prior to the responsibility of union officers?
strike.The Secretary of Labor adjudicated, among
other things, that the strike was illegal. RULING
Yes. The public respondent Secretary of Labor and
ISSUE Employment - and necessarily the CA - acted within
WON the Secretary properly took cognizance of the the bounds of the law and certainly rendered a
issue on the alleged illegal strike even though it was judicious solution to the dispute when she spared the
not properly submitted to the Secretary for resolution? striking workers or union members from the penalty of
dismissal. This disposition takes stock of the following
HELD circumstances justifying a less drastic penalty for

53
ordinary striking workers: a) the employees who Revised Rules of Court. Under the NLRC Revised
engaged in slowdown actually reported for work and Rules of Procedure, service of copies of orders should
continued to occupy their respective posts, or, in fine, be madeby the process server either personally or
did not abandon their jobs; b) they were only following through registered mail.
orders of their leaders; and c) no evidence has been
presented to prove their participation in the The presumption of receipt of the copies of the
commission of illegal activities during the strike. Nissan Assumption of JurisdictionOrder AJO could not be
Motor appeared to have also exacerbated, as earlier taken for granted considering the adverse effect in
indicated, the emerging volatile atmosphere despite case the parties failedto heed to the injunction directed
the Secretarys order veritably enjoining the parties to by such Order. Defiance of the assumption and return-
respect the status quo prevailing when she assumed to-workorders of the Secretary of Labor after he has
jurisdiction over the dispute. Foremost of these assumed jurisdiction is a valid ground for the loss
exacerbating acts is the en masse termination of most ofemployment status of any striking union officer or
of the Union members, albeit it may be conceded that member. Employment is a property right ofwhich one
the employer has the prerogative of imposing cannot be deprived of without due process. Due
disciplinary sanctions against assumption-order- process here would demand that therespondent union
defying employees. be properly notified of the Assumption of Jurisdiction
Order of the Secretaryof Labor enjoining the strike and
FEU-NRMF v. FEU-NRMFEA-AFW requiring its members to return to work. Thus, there
G.R. No. 168362, October 16, 2006, Chico-Nazario must be aclear and unmistakable proof that the
requirements prescribed by the Rules in the manner
FEU-NRMF and respondent union (a legitimate labor ofeffecting personal or substituted service had been
organization and is the duly recognized representative faithfully complied with.
of the rank and file employees of petitioner), entered
into a CBA that will expire on 30 April 1996. In view of Merely posting copies of the AJO does not satisfy the
the forthcoming expiry, respondent union sent a letter rigid requirement for properservice outlined by the
proposal to petitioner FEU-NRMF stating their above stated rules. Needless to say, the manner of
economic and non-economic proposals for the service made by theprocess server was invalid and
negotiation of the new CBA. FEU-NRMF rejected irregular. Respondent union could not therefore be
respondent unions demands. Respondent union then adjudged tohave defied the said Order since it was not
filed a Notice of Strike before NCMB on the ground of properly apprised thereof. Accordingly, the
bargaining deadlock, then it staged a strike. FEU- strikeconducted by the respondent union was valid
NRMF filed a Petition for the Assumption of under the circumstances.
Jurisdiction (AJO) or for Certification of Labor Dispute
with the NLRC, underscoring the fact that it is a PILIPINO TELEPHONE CORPORATION v. PILIPINO
medical institution engaged in the business of TELEPHONE EMPLOYEES ASSOCIATION (PILTEA)
providing health care for its patients. Secretary of G.R. No. 160058, June 22, 2007, Puno
Labor granted the petition and an Order assuming
jurisdiction over the labor dispute was issued, thereby On July 13, 1998, the Union filed a Notice of Strike
prohibiting any strike. The copy of the AJO was not with the NCMB for unfair labor practice due to the
served to the respondent because there no union alleged acts of "restraint and coercion of union
officer was around. Instead the copy was posted in members and interference with their right to self-
several conspicuous places within the premises of the organization" committed by the Company. The
hospital. Striking employees continued to strike Company filed a petition for Consolidated Assumption
claiming that they did not know about the AJO order. of Jurisdiction with the Office of the Secretary of Labor.
FEU-NRMF filed a case before the NLRC, contending On August 14, 1998, then Secretary Bienvenido E.
that respondent union staged the strike in defiance of Laguesma issued an Order assuming jurisdiction over
the AJO, hence, it was illegal. the entire labor dispute at Pilipino Telephone
Corporation. On September 4, 1998, the Union filed a
ISSUE second Notice of Strike with the NCMB on the grounds
Whether the service of the AJO was validly effected by of: a) Union busting, for the alleged refusal of the
the process server so as to bindthe respondent union Company to turn over union funds; and b) The mass
and hold them liable for the acts committed promotion of union members during the CBA
subsequent to the issuance ofthe said Order. negotiation, allegedly aimed at excluding them from
the bargaining unit during the CBA negotiation. On the
RULING same day, the Union went on strike. On December 7,
The process server resorted to posting the Order when 1998, the Company filed with the NLRC a petition to
personal service was renderedimpossible since the declare the Union's September 4, 1998 (second strike)
striking employees were not present at the strike area. strike illegal.
This mode ofservice, however, is not sanctioned by
either the NLRC Revised Rules of Procedure or the ISSUES:

54
1. Whether or not the mass promotion of union settledifferences. Noncompliance will illegalize the
members constituted union busting strike. However, the union should not be prejudiced
2. Whether or not the dismissal of union officers as a when there was no counter-proposal submitted by the
penalty for illegal strike is correct employer to begin with.

HELD: Petitioner and the union had a CBA which expired on


(1) NO. There was no union busting which would May 31, 2000. Within the freedomperiod, the union
warrant the non-observance of the cooling-off period. made several demands for negotiation but the
To constitute union busting under Article 263 of the company replied that it could notmuster a quorum,
Labor Code, there must be: 1) a dismissal from thus no CBA negotiations could be held. In order to
employment of union officers duly elected in compel the company to negotiate, union filed a request
accordance with the union constitution and by-laws; for preventive mediation with NCMB but again failed.
and 2) the existence of the union must be threatened On April 2001,a notice of strike was filed by the union
by such dismissal. In the case at bar, the second and thereafter, a strike was held.
notice of strike filed by the Union merely assailed the
"mass promotion" of its officers and members during ISSUE
the CBA negotiations. Surely, promotion is different Whether the strike staged by respondent is legal
from dismissal.
RULING
This is consistent with our ruling in Bulletin Publishing YES. In cases of bargaining deadlocks, the notice
Corporation v. Sanchez27 that a promotion which is shall, as far as practicable, further state theunresolved
manifestly beneficial to an employee should not give issues in the bargaining negotiations and be
rise to a gratuitous speculation that it was made to accompanied by the written proposals of theunion, the
deprive the union of the membership of the benefited counter-proposals of the employer and the proof of a
employee. request for conference to settledifferences. Any notice
which does not conformwith the requirements of this
(2) YES. It cannot be overemphasized that strike, as shall be deemed as not having been filed andthe party
the most preeminent economic weapon of the workers concerned shall be so informed by the regional branch
to force management to agree to an equitable sharing of the Board.
of the joint product of labor and capital, exert some
disquieting effects not only on the relationship between The union cannot be faulted for its omission. The union
labor and management, but also on the general peace could not have attached the counter-proposal of the
and progress of society and economic well-being of company in the notice of strike it submitted to the
the State. This weapon is so critical that the law NCMB as there was no such counter- proposal.
imposes the supreme penalty of dismissal on union Nowhere in the ruling of the LA can we find any
officers who irresponsibly participate in an illegal strike discussion of how respondents, as unionofficers,
and union members who commit unlawful acts during knowingly participated in the alleged illegal strike.
a strike. The responsibility of the union officers, as
main players in an illegal strike, is greater than that of A. SORIANO AVIATION v. EMPLOYEES
the members as the union officers have the duty to ASSOCIATION OF A. SORIANO AVIATION
guide their members to respect the law. The policy of G.R. No. 166879, August 14, 2009, Carpio-Morales
the state is not to tolerate actions directed at the
destabilization of the social order, where the Petitioner, which is engaged in providing transportation
relationship between labor and management has been of guests to and from Amanpulo and El Nido resorts in
endangered by abuse of one party's bargaining Palawan, and respondent, which is the duly certified
prerogative, to the extent of disregarding not only the bargaining agent of the rank and file employees of the
direct order of the government to maintain the status petitioner, entered into a CBA which included a No
quo, but the welfare of the entire workforce though Strike-No Lock-out Clause. On several dates,
they may not be involved in the dispute. The grave which were legal holidays and peak season, some of
penalty of dismissal imposed on the guilty parties is a the members of the union refused to rendered
natural consequence, considering the interest of public overtime work. Petitioner treated the refusal as
welfare. a concerted action which is a violation of the No-Strike,
No-Lock-out Clause. Thus, it meted the workers 30-
CLUB FILIPINO vs. BAUTISTA day suspension and filed an illegal strike against
G.R. No. 168406, January 14, 2015, Leonen them. The attempted settlement having been futile, the
union filed a Notice of Strike. Despite the conciliation
Doctrine: In cases of bargaining deadlocks, the notice no amicable settlement of the dispute was arrived, the
shall state theunresolved issues in the bargaining union went on strike. The company filed a motion to re-
negotiations and be accompanied by the written open the case which was granted by LA. In
proposals of theunion, the counter-proposals of the its decision, LA declared that the strike is illegal. On
employer and the proof of a request for conference to appeal, the NLRC dismissed it in per curiam decision.

55
In the interim, into the second strike, petitioner filed a Whether or not the filing of a petition with the labor
complaint before LA for illegal strike on the ground arbiter to declare a strike illegal is a condition sine qua
of alleged force and violence. In non for the valid termination of employees who commit
its decision, LA declared the second strike illegal. On an illegal act in the course of such strike.
appeal, the NLRC affirmed in toto the LAs
decision. On appeal to CA, the CA reversed and HELD
set aside No. Article 264(e) of the Labor Code prohibits any
the NLRC ruling. Hence, the present position. person engaged in picketing from obstructing the free
ingress to and egress from the employers premises.
ISSUE Since respondent was found in the July 17, 1998
Whether or not the strike staged by the respondent is decision of the NLRC to have prevented the free entry
illegal. into and exit of vehicles from petitioners compound,
respondents officers and employees clearly committed
HELD illegal acts in the course of the March 9, 1998 strike.
YES. The Union members repeated name-calling, The use of unlawful means in the course of a strike
harassment and threats of bodily harm directed renders such strike illegal. Therefore, pursuant to the
against company officers and non-striking employees principle of conclusiveness of judgment, the March 9,
and, more significantly, the putting up of placards, 1998 strike was ipso facto illegal. The filing of a
banners and streamers with vulgar statements petition to declare the strike illegal was thus
imputing criminal negligence to the company, which unnecessary.
put to doubt reliability of its operations, come within the
purview of illegal acts under Art. 264 and C. ALCANTARA & SONS, INC VS. CA
jurisprudence. G.R. 155109, September 29, 2010

Specifically with respect to the putting up of those The Company and the Union entered into a Collective
banners and placards, coupled with the name-calling Bargaining Agreement (CBA) that bound them to hold
and harassment, the same indicates that it was no strike and no lockout in the course of its life. At
resorted to coerce the resolution of the dispute the some point the parties began negotiating the economic
very evil which Art. 264 seeks to prevent. While the provisions of their CBA but this ended in a deadlock,
strike is the most preeminent economic weapon of prompting the Union to file a notice of strike. After
workers to force management to agree to an equitable efforts at conciliation by the Department of Labor and
sharing of the joint product of labor and capital, it Employment (DOLE) failed, the Union conducted a
exerts some disquieting effects not only on the strike vote that resulted in an overwhelming majority of
relationship between labor and management, but also its members favoring it. The Union reported the strike
on the general peace and progress of society and vote to the DOLE and, after the observance of the
economic well-being of the State. If such weapon has mandatory cooling-off period, went on strike. During
to be used at all, it must be used sparingly and within the strike, the Company filed a petition for the issuance
the bounds of law in the interest of industrial peace of a writ of preliminary injunction with prayer for the
and public welfare. issuance of a temporary restraining order (TRO) Ex
Parte with the National Labor Relations Commission
JACKBILT INDUSTRIES v. JACKBILT EMPLOYEES (NLRC) to enjoin the strikers from intimidating,
WORKERS UNION-NAFLU-KMU threatening, molesting, and impeding by barricade the
G.R. Nos. 171618-19, March 20, 2009, Corobna entry of non-striking employees at the Companys
premises. On June 29, 1999 the Labor Arbiter
Due to the adverse effects of the Asian economic crisis rendered a decision, declaring the Unions strike illegal
on the construction industry beginning 1997, Jackbilt for violating the CBAs no strike, no lockout, provision.
Industries, Inc. decided to temporarily stop its As a consequence, the Labor Arbiter held that the
business. Jackbilt Employees Workers Union-NAFLU- Union officers should be deemed to have forfeited their
KMU immediately protested the temporary shutdown employment with the Company and that they should
and contented that petitioner halted production to pay actual damages. With respect to the striking Union
avoid its duty to bargain collectively. The shutdown members, finding no proof that they actually committed
was allegedly motivated by anti-union sentiments. illegal acts during the strike, the Labor Arbiter ordered
Accordingly, on March 9, 1998, respondent went on their reinstatement without backwages.
strike. Its officers and members picketed petitioners
main gates and deliberately prevented persons and ISSUES
vehicles from going into and out of the compound. On 1. Whether or the strike conducted is illegal?
its July 17, 1998 decision, the NLRC found out that 2. Whether or not the union members should
respondent prevented the free entry into and exit of also be terminated?
vehicles from petitioners compound.
HELD
ISSUE

56
1. Yes, a strike may be regarded as invalid RULING
although the labor union has complied with the No. Although the strike was illegal, PHIMCO violated
strict requirements for staging one as provided the requirements of due process of the Labor Code
in Article 263 of the Labor Code when the when it dismissed the respondents.
same is held contrary to an existing
agreement, such as a no strike clause or Under Article 277b of the Labor Code, the employer
conclusive arbitration clause. Here, the CBA must send the employee, who is about to be
between the parties contained a no strike, no terminated, a written notice stating the cause/s for
lockout provision that enjoined both the Union termination and must give the employee the
and the Company from resorting to the use of opportunity to be heard and to defend himself.
economic weapons available to them under
the law and to instead take recourse to To meet the requirements of due process in the
voluntary arbitration in settling their disputes. dismissal of an employee, an employer must furnish
No law or public policy prohibits the Union and him or her with two (2) written notices: (1) a written
the Company from mutually waiving the strike notice specifying the grounds for termination
and lockout maces available to them to give and giving the employee a reasonable opportunity to
way to voluntary arbitration. The Court finds no explain his side and (2) another written notice
compelling reason to depart from the findings indicating that, upon due consideration of all
of the Labor Arbiter, the NLRC, and the CA circumstances, grounds have been established to
regarding the illegality of the strike. Social justify the employer's decision to dismiss the
justice is not one-sided. It cannot be used as a employee.
badge for not complying with a lawful
agreement. In the present case, PHIMCO sent a letter, on June 23,
2. Yes, given that their illegal acts of threatening, 1995, to thirty-six (36) union members, generally
coercing and intimidating non-strikers, directing them to explain within twenty-four (24) hours
obstructing the free ingress and egress from why they should not be dismissed for the illegal acts
the company premises and resisted and defied they committed during the strike; three days later, or
the implementation of the writ of preliminary on June 26, 1995, the thirty-six (36) union members
injunction issued against the strikers, their were informed of their dismissal from employment.
employment can no longer reinstated.
However, the records also fail to disclose any SOLIDBANK CORPORATION V. GAMIER
past infractions committed by the dismissed G.R. Nos. 159460 159461, November 15, 2010,
Union members. Taking these circumstances Villarama
in consideration, the Court regards the award
of financial assistance to these Union Petitioner Solidbank and respondent Solidbank
members in the form of one-half month salary Employees Union (Union) were set to renegotiate the
for every year of service to the company up to economic provisions of their 1997-2001 CBA to cover
the date of their termination as equitable and the remaining two years thereof. Seeing that an
reasonable. agreement was unlikely, the Union declared a
deadlock on and filed a Notice of Strike. In view of the
PHIMCO INDUSTRIES VS. PILA impending actual strike, then Secretary of Labor and
G.R. NO. 170830, August 11, 2010, Brion Employment BienvenidoE. Laguesma assumed
jurisdiction. The assumption order dated directed the
PHIMCO is a corporation engaged in the production of parties to cease and desist from committing any and
matches and respondent Phimco Industries Labor all acts that might exacerbate the situation. Secretary
Association (PILA) is the duly authorized bargaining Laguesma resolved all economic and non-economic
representative of PHIMCOs daily-paid workers. issues submitted by the parties. Dissatisfied with the
Because of the deadlock on economic issues, mainly Secretarys ruling, the Union officers and members
due to disagreements on salary increases and decided to protest the same by holding a rally infront of
benefits, PILA staged a strike. PHIMCO filed with the the Office of the Secretary of Labor and Employment
NLRC a petition for preliminary injunction and in Intramuros, Manila, simultaneous with the filing of
temporary restraining order (TRO), to enjoin the their motion for reconsideration.The union members
strikers from preventing through force, intimidation and also picketed the banks Head Office in Binondo and
coercion the ingress and egress of non-striking Paseo de Roxas. As a result of the employees
employees into and from the company premises. concerted actions, Solidbanks business operations
Several PILA members and officers were dismissed. were paralyzed. The herein 129 individual respondents
were among the 199 employees who were terminated
ISSUE for their participation in the three-day work boycott and
Whether or not the members and officers of the protest action.
respondent were validly dismissed
ISSUES

57
(1) Whether the protest rally and concerted work in violation of the Secretarys assumption order. The
abandonment/boycott staged by the respondents dismissal of herein respondent-union members are
violated the Order of the Secretary of Labor; (2) therefore unjustified in the absence of a clear showing
whether the respondents were validly terminated; and that they committed specific illegal acts during the
(3) whether the respondents are entitled to separation mass actions and concerted work boycott.
pay or financial assistance.
(3) Under the circumstances, respondents
RULING reinstatement without backwages suffices for the
(1) The Court has consistently ruled that once the appropriate relief. But since reinstatement is no longer
Secretary of Labor assumes jurisdiction over a labor possible, given the lapse of considerable time from the
dispute, such jurisdiction should not be interfered with occurrence of the strike, not to mention the fact that
by the application of the coercive processes of a strike Solidbank had long ceased its banking operations, the
or lockout. A strike that is undertaken despite the award of separation pay of one (1) month salary for
issuance by the Secretary of Labor of an assumption each year of service, in lieu of reinstatement, is in
order and/or certification is a prohibited activity and order. For the twenty-one (21) individual respondents
thus illegal. who executed quitclaims in favor of the petitioners,
whatever amount they have already received from the
Article 264 (a) of the Labor Code, as amended, also employer shall be deducted from their respective
considers it a prohibited activity to declare a strike separation pay.
during the pendency of cases involving the same
grounds for the same strike.There is no dispute that ESCARIO v. NLRC
when respondents conducted their mass actions on G.R. No. 160302, September 27, 2010, Bersamin
April 3 to 6, 2000, the proceedings before the
Secretary of Labor were still pending as both parties Officers and members of Malayang Samahan ng mga
filed motions for reconsideration of the March 24, 2000 Manggagawasa Balanced Foods walked out of the
Order. Clearly, respondents knowingly violated the premises of Pinakamasarap Corporation (PINA) and
aforesaid provision by holding a strike in the guise of proceeded to the barangay office to show support for
mass demonstration simultaneous with concerted work an officer of the Union charged with oral defamation by
abandonment/boycott. PINAs personnel manager. As a result of the walkout,
PINA preventively suspended all officers of the Union
(2) However, a worker merely participating in an illegal and terminated the officers of the Union after a month.
strike may not be terminated from employment. It is The Union later conducted a strike but the same was
only when he commits illegal acts during a strike that declared to be an illegal strike by the Labor Arbiter.
he may be declared to have lost employment status. The NLRC sustained the finding of the illegality of the
We have held that the responsibility of union officers, strike, but ruled that the union members should not be
as main players in an illegal strike, is greater than that considered to have abandoned their employment on
of the members and, therefore, limiting the penalty of the ground that mere participation of a union member
dismissal only for the former for participation in an in an illegal strike does not mean loss of employment.
illegal strike is in order. Hence, with respect to
respondents who are union officers, the validity of their ISSUE
termination by petitioners cannot be questioned. Being Are the union members entitled to full backwages due
fully aware that the proceedings before the Secretary to their not being found to have abandoned their jobs?
of Labor were still pending as in fact they filed a motion
for reconsideration of the March 24, 2000 Order, they RULING
cannot invoke good faith as a defense. No. Conformably with the long honored principle
of a fair days wage for a fair days labor, employees
For the rest of the individual respondents who are dismissed for joining an illegal strike are not entitled to
union members, the rule is that an ordinary striking backwages for the period of the strike even if they are
worker cannot be terminated for mere participation in reinstated by virtue of their being merely members of
an illegal strike. There must be proof that he or she the striking union who did not commit any illegal act
committed illegal acts during a strike. In all cases, the during the strike.
striker must be identified. But proof beyond reasonable
doubt is not required. Substantial evidence available Article 264(a) authorizes the award of full backwages
under the attendant circumstances, which may justify only when the termination of employment is a
the imposition of the penalty of dismissal, may suffice. consequence of an unlawful lockout. Also, that
Liability for prohibited acts is to be determined on an backwages are not granted to employees participating
individual basis.Petitioners have not adduced evidence in an illegal strike simply accords with the reality that
on such illegal acts committed by each of the individual they do not render work for the employer during the
respondents who are union members. Instead, period of the illegal strike. If there is no work performed
petitioners simply point to their admitted participation in by the employee, there can be no wage or pay unless,
the mass actions which they knew to be illegal, being of course, the laborer was able, willing and ready to

58
work but was illegally locked out, suspended or
dismissed or otherwise illegally prevented from On June 23, 2003, the DOLE Secretary included the
working.For this exception to apply, it is required that unions second notice of strike but, on the same day,
the strike be legal. the union filed a third notice of strike based on
allegations that the company had engaged in union
BAGONG PAGKAKAISA NG MANGGAGAWA NG busting and illegal dismissal of union officers. On July
TRIUMP VS SECRETARY OF LABOR 7, 2003, the company filed a petition for certififcation of
G.R. No. 167401 their labor dispute to the NLRC for compulsory
arbitration but the DOLE Secretary denied the motion
A bargaining deadlock arise between the parties, thus and subsumed the third notice of strike.
a notice of strike was filed by petitioner, a notice of
lock-out was then filed by the respondent due to a The DOLE upheld the termination of 17 union officers
work-slowdown. But the secretary of labor assumed but the CA only upheld the validity of termination of 10
jurisdiction and issued a RTW Order, but those who union officers and declared illegal that of the other 7,
want to return to work was prevented by the other hence, this petition.
striking members.
ISSUES
Due to the intervention of the Sec. of Labor, it was 1. Did slowdowns actually transpire at the companys
agreed that all would return to work except the officers farms?
and the shop steward pending their investigation, they 2. Did the union officers commit illegal acts that
were reinstated only in the payroll. warranted their dismissal from work?

The Secretary of Labor refused to rule on the validity HELD


of the dismissal of the Union Officers and the shop (1) Yes. No strike shall be declared after the Secretary
stewardess because it believed that it is under the of Labor has assumed jurisdiction over a labor dispute.
jurisdiction of the Labor Artbiter A strike conducted after such assumption is illegal and
any union officer who knowingly participates in the
ISSUE same may be declared as having lost his employment.
WON the Sec of Labor has jurisdiction to hear and Here, what is involved is a slowdown strike. Unlike
decide cases of illegal dismissal arising out from a other forms of strike, the employees involved in a
strike/lock-out slowdown do not walk out of their jobs to hurt the
company. They need only to stop work or reduce the
RULING rate of their work while generally remaining in their
Yes. First: Jurisdiction of Secretary of Labor - As the assigned post.
term assume jurisdiction connotes, the intent of the law
is to give the Labor Secretary full authority to resolve The union officers and members in this case held a
all matters within the dispute that gave rise to or which slowdown strike at the companys farms despite the
arose out of the strike or lockout; it includes and fact that the DOLE Secretary had on May 12, 2003
extends to all questions and controversies arising from already assumed jurisdiction over their labor dispute.
or related to the dispute, including cases over which The evidence sufficiently shows that union officers and
the labor arbiter has exclusive jurisdiction. members simultaneously stopped work at the
companys Batangas and Cavite farms at 7:00 a.m. on
FADRIQUELAN V. MONTEREY FOODS May 26, 2003.
CORPORATION
G.R. No. 178409, June 8, 2011, Abad (2) Qualified yes. A distinction exists, however,
between the ordinary workers liability for illegal strike
When the 3-year CBA between the union Bukluran ng and that of the union officers who participated in it. The
Manggagawasa Monterey-Ilaw at Buklod ng ordinary worker cannot be terminated for merely
Manggagawa and the company Monterey Foods participating in the strike. There must be proof that he
Corporation expired, and after reaching a deadlock in committed illegal acts during its conduct. On the other
the negotiation for a new CBA, the union filed a notice hand, a union officer can be terminated upon mere
of strike with the NCMB to which the DOLE Secretary proof that he knowingly participated in the illegal strike.
assumed jurisdiction on May 12, 2003. The participating union officers have to be properly
identified.
On May 21, 2003, the union filed a second notice of
strike on the alleged ground that the company Those who cannot be connected to the slowdowns
committed ULPs. The company then sent notices to were illegally dismissed. IN this case, only the identity
the union officers, charging them with intentional acts and participations of Arturo Eguna, Armando Malaluan,
of slowdown, and 6 days later, the company sent Danilo Alonso, Romulo Dimaano, RoelMayuga,
notices of termination from work for defying the the Wilfredo Rizaldo, Romeo Suico, Domingo Escamillas,
assumption order. and Domingo Bautro in the slowdowns were properly

59
established. These officers simply refused to work or union of the rank and file employees of AER which
they abandoned their work to join union assemblies. was formed in the year 1998. AER accused the Unyon
of illegal concerted activities (illegal strike, illegal
MAGDALA MULTIPURPOSE & LIVELIHOOD V. walkout, illegal stoppage, and unfair labor practice)
KMLMS while Unyon accused AER of unfair r On December
G.R. Nos. 191138-39, October 19, 2011, Velasco 22, 1998, Unyon filed a petition for certification election
before the Department of Labor and Employment
KMLMS held a strike-vote one day before its (DOLE) after organizing their employees union within
registration was granted. It later staged a strike where AER. Resenting what they did, AER forced all of its
several illegal acts were committed. The company employees to submit their urine samples for drug
argued that the strike was illegal, and all participating testing. Those who refused were threatened with
union members should be declared to have forfeited dismissal. On January 12, 1999, AER issued a
their employment. SC ruled in favor of the company. memorandum suspending seven employees from work
for violation of Article D, Item 2 of the Employees
The mandatory notice of strike and the conduct of the handbook which reads as follows: Coming to work
strike-vote report were ineffective for having been filed under the influence of intoxicating liquor or any drug or
and conducted before KMLMS acquired legal drinking any alcoholic beverages on the premises on
personality as an LLO. company time While they were in the process of
securing their respective medical certificates, however,
ISSUE they were shocked to receive a letter from AER
Whether or not the strike was illegal. charging them with insubordination and absence
without leave and directing them to explain their acts in
RULING writing. Despite their written explanation, AER refused
Yes. A strike conducted by a union which acquired its to reinstate them. Meanwhile, Unyon found out that
legal personality AFTER the filing of its Notice of Strike AER was moving out machines from the main building
and the conduct of the Strike Vote is ILLEGAL. to the AER-PSC compound located on another street.
Sensing that management was going to engage in a
There is no question that the May 6, 2002 strike was runaway shop, Unyon tried to prevent the transfer of
illegal, first, because when KilusangManggagawa ng the machines which prompted AER to issue a
LGS, Magdala Multipurpose and Livelihood memorandum accusing those involved of gross
Cooperative (KMLMS) filed the notice of strike on insubordination, work stoppage and other offenses. On
March 5 or 14, 2002, it had not yet acquired legal February 2, 1999, the affected workers were denied
personality and, thus, could not legally represent the entry into the AER premises by order of management.
eventual union and its members. And second, Because of this, the affected workers staged a picket
similarly, when KMLMS conducted the strike-vote on in front of company premises hoping that management
April 8, 2002, there was still no union to speak of, would accept them back to work. When their picket
since KMLMS only acquired legal personality as an proved futile, they filed a complaint for unfair labor
independent legitimate labor organization only on April practice, illegal suspension and illegal dismissal.
9, 2002 or the day after it conducted the strike-vote.
Consequently, the mandatory notice of strike and the ISSUE
conduct of the strike-vote report were ineffective for Whether or not the drug testing was valid
having been filed and conducted before KMLMS
acquired legal personality as a legitimate labor RULING
organization, violating Art. 263(c), (d) and (f) of the AERs fault is obvious from the fact that a day after the
Labor Code and Rule XXII, Book V of the Omnibus union filed a petition for certification election before the
Rules Implementing the Labor Code. It is, thus, clear DOLE, it hit back by requiring all its employees to
that KMLMS did not comply with the mandatory undergo a compulsory drug test. Although AER argues
requirement of law and implementing rules on that the drug test was applied to all its employees, it
possession of a legal personality as a legitimate labor was silent as to whether the drug test was a regular
organization. company policy and practice in their 35 years in the
automotive engine repair and rebuilding business. As
AUTOMOTIVE ENGINE REBUILDERS, INC. (AER) v. the Court sees it, it was AERs first ever drug test of its
PROGRESIBONG UNYON NG MGA employees immediately implemented after the workers
MANGGAGAWA SA AER manifested their desire to organize themselves into a
G.R. No. 16013, July 13, 2011, Mendoza union. Indeed, the timing of the drug test was
suspicious. Moreover, AER failed to show proof that
Records show that AER is a company engaged in the the drug test conducted on its employees was
automotive engine repair and rebuilding business and performed by an authorized drug testing center. It did
other precision and engineering works for more than not mention how the tests were conducted and
35 years. Progresibong Unyon Ng Mga whether the proper procedure was employed.
Manggagawasa AER (Unyon) is the legitimate labor

60
Section 36 of R.A. No. 9165 provides that drug tests dispute. Concerted is defined as mutually
shall be performed only by authorized drug testing contrived or planned or performed in unison.
centers. Moreover, Section 36 also prescribes that In this case, the petitioners were absent for
drug testing shall consist of both the screening test various personal reasons. Petitioners were in
and the confirmatory test. Department Order No. 53-03 different places on said date and attended to
further provides: Drug testing shall conform with the their personal needs or affairs. They did not go
procedures as prescribed by the Department of Health to the company premises to petition Biomedica
(DOH). Only drug testing centers accredited by the for their grievance. This shows that there was
DOH shall be utilized. A list of accredited centers may NO INTENT to go on strike.
be accessed through the OSHC. Drug testing shall
consist of both the screening test and the confirmatory 2. YES. Petitioners were not afforded procedural
test; the latter to be carried out should the screening due process. The period of 24 hours given to
test turn positive. The employee concerned must be petitioners to answer the notice was severely
informed of the test results whether positive or insufficient. The law provides that an
negative. Furthermore, AER engaged in a runaway employee should be given reasonable
shop when it began pulling out machines from the opportunity to file a response. The SC in King
main AER building to the AER-PSC compound located of Kings Transport vs. Mamac construed this
on another street on the pretext that the main building to be a period of at least five (5) calendar days
was undergoing renovation. Certainly, the striking from receipt of notice to give the employees an
workers would have no reason to run and enter the opportunity to study the accusation against
AER-PSC premises and to cause the return of the them, consult a union officer or lawyer, gather
machines to the AER building if they were not alarmed evidence, and decide on the defense they will
that AER was engaging in a runaway shop. raise against the complaint.

NARANJO v. BIOMEDICA HEALTH CARE, INC. Petitioners were also not afforded substantive
G.R. No. 193789, September 19, 2012, Velasco due process. To justify the dismissal of an
employee on the ground of serious
Petitioners Naranjo et al are all employees of misconduct, the employer must first establish
Biomedica. Carina Motol is the President of said the existence of a valid company rule or
company. On November 7, 2006, during Motols regulation. In this case, Biomedica failed to
birthday, petitioners were all absent for various establish that petitioners violated company
personal reasons. The next day, petitioners came in rules since they did not present a copy of the
for work but were not allowed to enter the premises. rules and they failed to prove that petitioners
Motol, through foul language, told them to find were made aware of such regulations.
employment elsewhere.
VISAYAS COMMUNITY MEDICAL CENTER (VCMC)
Subsequently, Biomedica issued notices to petitioners v. YBALLE
accusing them of having conducted an illegal strike G.R. No. 196156, January 15, 2014
and were asked to explain within 24 hours why they
should not be held guilty of and dismissed for violation Respondents were hired as staff nurses (Ong and
of company policy against illegal strikes. Biomedica, Angel) and midwives (Yballe and Cortez) by petitioner
however, did not furnish them with a copy of the said Visayas Community Medical Center (VCMC), formerly
company policy. the Metro Cebu Community Hospital, Inc. (MCCHI).
The four workers were among the 100 rank-and-file
Petitioners failed to submit a written explanation, thus, employees whose services were terminated by the
Biomedica served Notices of Termination to them. It VCMC for participating in the strike and picket in April
stated that petitioners engaged in an illegal strike. 1996.
Petitioners then filed a complaint for illegal dismissal.
The Labor Arbiter dismissed the complaint. The NLRC The dismissed workers had demanded for the hospital
reversed the LA. On appeal, the CA reinstated the management to resume bargaining. These workers
decision of the LA. were part of a series of mass actions spearheaded by
Nava where they wore black and red armbands and
ISSUES marched around the hospital premises, then put up
1. Did the petitioners engage in an illegal strike? placards and streamers in the vicinity. Consequently,
2. Were the petitioners illegal dismissed? VCMC sent termination letters to union leaders and
other members who participated in the strike and
HELD picket. In the Decision dated December 7, 2011, SC
1. NO. Petitioners did not go on strike. The Labor ruled that the mass termination of complainants was
Code defines a strike as any temporary illegal, notwithstanding the illegality of the strike in
stoppage of work by the concerted action of which they participated.
employees as a result of any industrial or labor

61
ISSUE March 1987 until he was terminated on 3 March 2000.
W/N union members who were illegally dismissed for Respondent filed a complaint for illegal dismissal and
mere participation in an illegal strike are entitled to nonpayment of benefits against TAPE. TAPE
separation pay? countered that the labor arbiter had no jurisdiction over
the case in the absence of an employer-employee
HELD relationship between the parties. TAPE averred that
YES, they are entitled to separation pay but not respondent was an independent contractor falling
backwages. under the talent group category and was working
under a special arrangement which is recognized in
With respect to backwages, the principle of a "fair the industry. Respondent for his part insisted that he
days wage for a fair days labor" remains as the basic was a regular employee having been engaged to
factor in determining the award thereof. If there is no perform an activity that is necessary and desirable to
work performed by the employee there can be no TAPEs business for thirteen (13) years.
wage or pay unless, of course, the laborer was able,
willing and ready to work but was illegally locked out, ISSUE
suspended or dismissed or otherwise illegally Whether Respondent Roberto C. Servaa was a
prevented from working. regular employee

The alternative relief for union members who were RULING


dismissed for having participated in an illegal strike is Yes.
the payment of separation pay in lieu of reinstatement [Selection] Respondent was first connected with Agro-
under the following circumstances: (a) when Commercial Security Agency, which assigned him to
reinstatement can no longer be effected in view of the assist TAPE in its live productions. When the security
passage of a long period of time or because of the agencys contract with RPN-9 expired in 1995,
realities of the situation; (b) reinstatement is inimical to respondent was absorbed by TAPE or, in the latters
the employers interest; (c) reinstatement is no longer language, "retained as talent." Clearly, respondent was
feasible; (d) reinstatement does not serve the best hired by TAPE. Respondent presented his
interests of the parties involved; (e) the employer is identification card to prove that he is indeed an
prejudiced by the workers continued employment; (f) employee of TAPE. It has been in held that in a
facts that make execution unjust or inequitable have business establishment, an identification card is
supervened; or (g) strained relations between the usually provided not just as a security measure but to
employer and employee. mainly identify the holder thereof as a bona
fide employee of the firm who issues it.
In the Decision dated December 7, 2011, we held that
the grant of separation pay to complainants is the [Wages] Respondent claims to have been
appropriate relief under the circumstances, thus: receiving P5,444.44 as his monthly salary while TAPE
prefers to designate such amount as talent fees.
Considering that 15 years had lapsed from the onset of Wages, as defined in the Labor Code, are
this labor dispute, and in view of strained relations that remuneration or earnings, however designated,
ensued, in addition to the reality of replacements capable of being expressed in terms of money,
already hired by the hospital which had apparently whether fixed or ascertained on a time, task, piece or
recovered from its huge losses, and with many of the commission basis, or other method of calculating the
petitioners either employed elsewhere, already old and same, which is payable by an employer to an
sickly, or otherwise incapacitated, separation pay employee under a written or unwritten contract of
without back wages is the appropriate relief. employment for work done or to be done, or for service
rendered or to be rendered. It is beyond dispute that
respondent received a fixed amount as monthly
EMPLOYER-EMPLOYEE compensation for the services he rendered to TAPE.
RELATIONSHIP [Dismissal] The Memorandum informing respondent of
the discontinuance of his service proves that TAPE
TELEVISION AND PRODUCTION EXPONENTS, had the power to dismiss respondent.
INC. and/or ANTONIO P. TUVIERA vs. ROBERTO C.
SERVAA [Control] Control is manifested in the bundy cards
G.R. No. 167648, January 28, 2008 submitted by respondent in evidence. He was required
to report daily and observe definite work hours.
TAPE is a domestic corporation engaged in the
production of television programs, such as the long- ABS-CBN BROADCASTING CORP. V. NAZARENO
running variety program, "Eat Bulaga!". Its president is G.R. 164156, Sept. 26, 2006
Antonio P. Tuviera (Tuviera). Respondent Roberto C.
Servaa had served as a security guard for TAPE from
62
Petitioner ABS-CBN Broadcasting Corporation (ABS- different duties under the control and direction of ABS-
CBN) is engaged in the broadcasting business. CBN executives and supervisors.
Petitioner employed respondents Nazareno, Gerzon,
Deiparine, and Lerasan as production assistants (PAs) In this case, it is undisputed that respondents had
on different dates. They were assigned at the news continuously performed the same activities for an
and public affairs, for various radio programs in the average of five years. Their assigned tasks are
Cebu Broadcasting Station, with a monthly necessary or desirable in the usual business or trade
compensation of P4,000. They were issued ABS-CBN of the petitioner. The persisting need for their services
employees identification cards and were required to is sufficient evidence of the necessity and
work for a minimum of eight hours a day, including indispensability of such services to petitioners
Sundays and holidays. business or trade.40 While length of time may not be a
sole controlling test for project employment, it can be a
The PAs were under the control and supervision of strong factor to determine whether the employee was
Assistant Station Manager Dante J. Luzon, and News hired for a specific undertaking or in fact tasked to
Manager Leo Lastimosa. perform functions which are vital, necessary and
indispensable to the usual trade or business of the
On December 19, 1996, petitioner and the ABS-CBN employer
Rank-and-File Employees executed a Collective
Bargaining Agreement (CBA) to be effective during the FARLEY FULACHE V. ABS-CBN BROADCASTING
period from December 11, 1996 to December 11, CORPORATION
1999. However, since petitioner refused to recognize G.R. No. 183810, January 21, 2010, Brion
PAs as part of the bargaining unit, respondents were
not included to the CBA. Petitioners Farley Fulache, Manolo Jabonero, David
Castillo, Jeffrey Lagunzad, Magdalena Malig-on Bigno,
On October 12, 2000, respondents filed a Complaint Francisco Cabas, Jr., Harvey Ponce and Alan C.
for Recognition of Regular Employment Status, Almendras (petitioners) and Cresente Atinen (Atinen)
Underpayment of Overtime Pay, Holiday Pay, filed two separate complaints for regularization, unfair
Premium Pay, Service Incentive Pay, Sick Leave Pay, labor practice and several money claims
and 13th Month Pay with Damages against the (regularization case) against ABS-CBN Broadcasting
petitioner before the NLRC. Corporation-Cebu (ABS-CBN).

Respondents insisted that they belonged to a "work The petitioners alleged that on December 17, 1999,
pool" from which petitioner chose persons to be given ABS-CBN and the ABS-CBN Rank-and-File
specific assignments at its discretion, and were thus Employees Union (Union) executed a collective
under its direct supervision and control regardless of bargaining agreement (CBA) effective December 11,
nomenclature. 1999 to December 10, 2002; they only became aware
of the CBA when they obtained copies of the
ISSUE agreement; they learned that they had been excluded
Are Nazareno et. al employees of ABS-CBN? from its coverage as ABS-CBN considered them
temporary and not regular employees, in violation of
HELD the Labor Code. They claimed they had already
We agree with respondents contention that where a rendered more than a year of service in the company
person has rendered at least one year of service, and, therefore, should have been recognized as
regardless of the nature of the activity performed, or regular employees entitled to security of tenure and to
where the work is continuous or intermittent, the the privileges and benefits enjoyed by regular
employment is considered regular as long as the employees. They asked that they be paid overtime,
activity exists, the reason being that a customary night shift differential, holiday, rest day and service
appointment is not indispensable before one may be incentive leave pay. They also prayed for an award of
formally declared as having attained regular status. moral damages and attorneys fees.

It is of no moment that petitioner hired respondents as ABS-CBN claimed that to cope with fluctuating
"talents." The fact that respondents received pre- business conditions, it contracts on a case-to-case
agreed "talent fees" instead of salaries, that they did basis the services of persons who possess the
not observe the required office hours, and that they necessary talent, skills, training, expertise or
were permitted to join other productions during their qualifications to meet the requirements of its programs
free time are not conclusive of the nature of their and productions. These contracted persons are called
employment. Respondents cannot be considered talents and are considered independent contractors
"talents" because they are not actors or actresses or who offer their services to broadcasting companies.
radio specialists or mere clerks or utility employees.
They are regular employees who perform several Instead of salaries, ABS-CBN pointed out that talents
are paid a pre-arranged consideration called talent fee

63
taken from the budget of a particular program and ABS-CBN moved for the reconsideration of the
subject to a ten percent (10%) withholding tax. Talents decision, reiterating that Fulache, Jabonero, Castillo
do not undergo probation. Their services are engaged and Lagunzad were independent contractors, whose
for a specific program or production, or a segment services had been terminated due to redundancy;
thereof. Their contracts are terminated once the thus, no backwages should have been awarded. On
program, production or segment is completed. the regularization issue, the NLRC stood by the ruling
that the petitioners were regular employees entitled to
Labor Arbiter Rendoque rendered his decision holding the benefits and privileges of regular employees. On
that the petitioners were regular employees of ABS- the illegal dismissal case, the petitioners, while
CBN, not independent contractors, and are entitled to recognized as regular employees, were declared
the benefits and privileges of regular employees. ABS- dismissed due to redundancy.
CBN appealed the ruling to the National Labor
Relations Commission (NLRC) mainly contending that ISSUE
the petitioners were independent contractors, not Whether or not the petitioners are covered by the CBA
regular employees. and therefore entitled to its benefits.

While the appeal of the regularization case was HELD


pending, ABS-CBN dismissed Fulache, Jabonero, YES. They are ABS-CBNs regular employees entitled
Castillo, Lagunzad and Atinen (all drivers) for their to the benefits and privileges of regular employees.
refusal to sign up contracts of employment with service These benefits and privileges arise from entitlements
contractor Able Services. The four drivers and Atinen under the law (specifically, the Labor Code and its
responded by filing a complaint for illegal dismissal related laws), and from their employment contract as
(illegal dismissal case). In defense, ABS-CBN alleged regular ABS-CBN employees, part of which is the CBA
that it decided to course through legitimate service if they fall within the coverage of this agreement. Thus,
contractors all driving, messengerial, janitorial, utility, what only needs to be resolved as an issue for
make-up, wardrobe and security services for both the purposes of implementation of the decision is whether
Metro Manila and provincial stations, to improve its the petitioners fall within CBA coverage.
operations and to make them more economically
viable. Fulache, Jabonero, Castillo, Lagunzad and The petitioners are members of the appropriate
Atinen were not singled out for dismissal; as drivers, bargaining unit because they are regular rank-and-file
they were dismissed because they belonged to a job employees and do not belong to any of the excluded
category that had already been contracted out. categories. Specifically, nothing in the records shows
that they are supervisory or confidential employees;
Labor Arbiter Rendoque upheld the validity of ABS- neither are they casual nor probationary employees.
CBN's contracting out of certain work or services in its Most importantly, the labor arbiters decision of January
operations.He awarded them separation pay of one (1) 17, 2002 affirmed all the way up to the CA level ruled
months salary for every year of service.Again, ABS- against ABS-CBNs submission that they are
CBN appealed to the NLRC which rendered on independent contractors. Thus, as regular rank-and-file
December 15, 2004 a joint decision on the employees, they fall within CBA coverage under the
regularization and illegal dismissal cases. The NLRC CBAs express terms and are entitled to its benefits.
ruled that there was an employer-employee
relationship between the petitioners and ABS-CBN as ABS-CBN forgot that by claiming redundancy as
the company exercised control over the petitioners in authorized cause for dismissal, it impliedly admitted
the performance of their work; the petitioners were that the petitioners were regular employees whose
regular employees because they were engaged to services, by law, can only be terminated for the just
perform activities usually necessary or desirable in and authorized causes defined under the Labor Code.
ABS-CBN's trade or business; they cannot be
considered contractual employees since they were not JOSE Y. SONZA v. ABS-CBN BROADCASTING
paid for the result of their work, but on a monthly basis CORPORATION
and were required to do their work in accordance with G.R. No. 138051, June 10, 2004, Carpio
the companys schedule.The NLRC reversed the labor
arbiters ruling in the illegal dismissal case; it found that In May 1994, respondent ABS-CBN Broadcasting
petitioners Fulache, Jabonero, Castillo, Lagunzad and Corporation (ABS-CBN) signed an Agreement
Atinen had been illegally dismissed and awarded (Agreement) with the Mel and Jay Management and
thembackwages and separation pay in lieu of Development Corporation (MJMDC). Referred to in the
reinstatement. Under both cases, the petitioners were Agreement as AGENT, MJMDC agreed to provide
awarded CBA benefits and privileges from the time SONZAs services exclusively to ABS-CBN as talent for
they became regular employees up to the time of their radio and television. The Agreement listed the services
dismissal. SONZA would render to ABS-CBN, as Co-host for Mel
& Jay radio and TV program, ABS-CBN agreed to pay
for SONZAs services a monthly talent fee of P310,000

64
for the first year and P317,000 for the second and third BERNARTE v. PBA
year of the Agreement. G.R. Nos. 192084, September 14, 2011, Carpio

In 1996, SONZA wrote a letter to ABS-CBNs President Bernarte and Guevarra aver that they were invited to
stating his resignation, notice of rescission of the join the PBA as referees and they were made to sign
Agreement, and waiver of recovery of the remaining contracts on a year-to-year basis. However, changes
amount stipulated in paragraph 7 of the Agreement but were made on the terms of their employment. Bernarte
reserves the right to seek recovery of the other received a letter advising him that his contract would
benefits under said Agreement.Later on, SONZA filed not be renewed citing his unsatisfactory performance
a complaint against ABS-CBN before the DOLE. on and off the court. Guevarra alleged that beginning
SONZA complained that ABS-CBN did not pay his February 2004, he was no longer made to sign a
salaries, separation pay, service incentive leave pay, contract. Respondents averred that complainants
13th month pay, signing bonus, travel allowance and entered into two contracts of retainer with the PBA in
amounts due under the Employees Stock Option Plan the year 2003 and after December 2003, PBA decided
(ESOP).ABS-CBN filed a Motion to Dismiss on the not to renew their contracts.
ground that no employer-employee relationship existed
between the parties. ISSUE
WON petitioner is an employee of the PBA, thus
ISSUE illegally dismissed.
Whether or not there is an employer-employee
relationship between the respondent and petitioner RULING
No. To determine the existence of an employer-
HELD employee relationship, case law has consistently
There is no employer-employee relationship. Applying applied the four-fold test, to wit: (a) the selection and
the four-fold test, petitioner Sonza was considered by engagement of the employee; (b) the payment of
the Court as an independent contractor. wages; (c) the power of dismissal; and (d) the
employer's power to control the employee on the
Selection and engagement of employee: The specific means and methods by which the work is
selection and hiring of SONZA, because of his unique accomplished. The so-called "control test" is the most
skills, talent and celebrity status not possessed by important indicator of the presence or absence of an
ordinary employees, is a circumstance indicative, but employer-employee relationship. In this case, PBA
not conclusive, of an independent contractual admits repeatedly engaging petitioner's services, as
relationship. shown in the retainer contracts. PBA pays petitioner a
retainer fee, exclusive of per diem or allowances, as
Payment of wages: The power to bargain talent fees stipulated in the retainer contract. PBA can terminate
way above the salary scales of ordinary employees is the retainer contract for petitioner's violation of its
a circumstance indicative, but not conclusive, of an terms and conditions.
independent contractual relationship.
We agree with respondents that once in the playing
Power of dismissal: For violation of any provision of court, the referees exercise their own independent
the Agreement, either party may terminate their judgment, based on the rules of the game, as to when
relationship. SONZA failed to show that ABS-CBN and how a call or decision is to be made. The referees
could terminate his services on grounds other than decide whether an infraction was committed, and the
breach of contract. PBA cannot overrule them once the decision is made
on the playing court. The referees are the only,
Power of control: The control test is the most important absolute, and nal authority on the playing court.
test our courts apply in distinguishing an employee Respondents or any of the PBA ocers cannot and do
from an independent contractor.This test is based on not determine which calls to make or not to make and
the extent of control the hirer exercises over a worker. cannot control the referee when he blows the whistle
The greater the supervision and control the hirer because such authority exclusively belongs to the
exercises, the more likely the worker is deemed an referees. The very nature of petitioner's job of
employee. The converse holds true as well the less ociating a professional basketball game undoubtedly
control the hirer exercises; the more likely the worker calls for freedom of control by respondents.
is considered an independent contractor.
The fact that PBA repeatedly hired petitioner does not
ABS-CBN did not exercise control over the means and by itself prove that petitioner is an employee of the
methods of performance of SONZAs work. Hence, former. For a hired party to be considered an
Sonza is not an employee but an independent employee, the hiring party must have control over the
contractor. means and methods by which the hired party is to
perform his work, which is absent in this case.

65
ABELLA V. PLDT may be required of your position in accordance with
G.R. No. 159469, June 8, 2005, Chico-Nazario pertinent Company policies and guidelines. In pursuit
of this objective, you are hereby tasked with the
PSI, a legitimate job contractor, entered into an responsibilities of recruiting, training and directing your
agreement with the PLDT to provide the latter with Supervising Associates (SAs) and the Health
such number of qualified uniformed and properly Consultants under their respective agencies, for the
armed security guards. PSI determined and paid the purpose of promoting our corporate Love Mission. The
compensation of the security guards. Upon authority as MA likewise vests upon you command
deployment, PLDT conducted interviews and responsibility for the actions of your SAs and
evaluation to ensure that the standards it set are met HealthCons; the Company therefore reserves the right
by the security guards. PLDT rarely failed to accept to debit your account for any accountabilities/financial
security guards referred to by PSI but on account of obligations arising therefrom.
height deficiency. PLDT likewise conducted seminars
for the security guards in its premises. By your acceptance of this appointment, it is
understood that you must represent the Company on
Later, several security guards deployed in PLDT an exclusive basis, and must not engage directly or
sought regularization of employment with PLDT, indirectly in activities, nor become affiliated in official or
claiming that PLDT employed them through the years unofficial capacity with companies or organizations
commencing from 1982 and that all of them served which compete or have the same business as
PLDT directly for more than 1 year. Pamana. It is further understood that his [sic] self-
inhibition shall be effective for a period of one year
ISSUE from date of official termination with the Company
Are the security guards employees of PLDT? arising from any cause whatsoever.
HELD
No. Based on the following circumstances, PLDT is not In consideration of your undertaking the assignment
the employer of the security guards and the accompanying duties and responsibilities, you
a) The screening of security guards does not shall be entitled to compensation computed as follows:
amount to hiring but merely a referral by PSI On Initial Membership Fee Entrance Fee 5%; Medical
intended for possible assignment in a Fee 6%; On Subsequent Membership Fee 6%
designated client. Thus employer-employee You are likewise entitled to participate in sales
relationship is deemed perfected even before contests and such other incentives that may be
the posting of the security guards with the implemented by the Company. This appointment is on
PLDT, as assignment only comes after a non-employer-employee relationship basis, and shall
employment. be in accordance with the Company Guidelines on
b) PSI had control over the determination and Appointment, Reclassification and Transfer of Sales
payment of the security guards compensation. Associates.
c) PSI is a legitimate job contractor, hence, the On 4 March 1988, Pamana and the U.S. Naval Supply
employer of the security guards. Depot signed the FFCEA account. Consulta, claiming
that Pamana did not pay her commission for the
As regards the holding of seminars for security guards, FFCEA account, filed a complaint for unpaid wages or
it is not uncommon, especially for big aggressive commission against Pamana, its President Razul Z.
corporations like PLDT, to align or integrate their Requesto ("Requesto"), and its Executive Vice-
corporate visions and policies externally or with that of President Aleta Tolentino ("Tolentino").
other entities they deal with such as their suppliers,
consultants, or contractors. ISSUE
Whether Consulta was an employee of Pamana
CONSULTA V. CA RULING
GR 145443, March 18, 2005, Carpio Yes.Applying the four-fold test :(1) the power to hire;
(2) the payment of wages; (3) the power to dismiss;
Pamana Philippines, Inc. ("Pamana") is engaged in and (4) the power to control. The power to control is
health care business. Raquel P. Consulta ("Consulta") the most important of the four elements. The power to
was a Managing Associate of Pamana. Consultas control is explained as: x xx It should, however, be
appointment dated 1 December 1987 states: We are obvious that not every form of control that the hiring
pleased to formally confirm your appointment and party reserves to himself over the conduct of the party
confer upon you the authority as MANAGING hired in relation to the services rendered may be
ASSOCIATE (MA) effective on December 1, 1987 up accorded the effect of establishing an employer-
to January 2, 1988. In this capacity, your principal employee relationship between them in the legal or
responsibility is to organize, develop, manage, and technical sense of the term. A line must be drawn
maintain a sales division and a full complement of somewhere, if the recognized distinction between an
agencies and Health Consultants and to submit such employee and an individual contractor is not to vanish
number of enrollments and revenue attainments as altogether. Realistically, it would be a rare contract of

66
service that gives untrammelled freedom to the party VILLAMARIA vs. COURT OF APPEALS AND
hired and eschews any intervention whatsoever in his BUSTAMANTE
performance of the engagement. Logically, the line GR No. 165881, April 19, 2006, Callejo, Sr.
should be drawn between rules that merely serve as
guidelines towards the achievement of the mutually Oscar Villamaria, Jr. was the owner of Villamaria
desired result without dictating the means or methods Motors, a sole proprietorship engaged in assembling
to be employed in attaining it, and those that control or passenger jeepneys with a public utility franchise to
fix the methodology and bind or restrict the party hired operate along the Baclaran-Sucat route. By 1995,
to the use of such means. The first, which aim only to Villamaria stopped assembling jeepneys and retained
promote the result, create no employer-employee only nine, four of which operated by employing drivers
relationship unlike the second, which address both the on a boundary basis. One of those drivers was
result and the means used to achieve it. respondent Bustamante.Bustamante remitted 450 a
day to Villamaria as boundary and kept the residue of
In the present case, the power to control is missing. his daily earnings as compensation for driving the
Pamana tasked Consulta to organize, develop, vehicle. In August 1997, Villamaria verbally agreed to
manage, and maintain a sales division, submit a sell the jeepney to Bustamante under a boundary-
number of enrollments and revenue attainments in hulog scheme, where Bustamante would remit to
accordance with company policies and guidelines, and Villamaria P550 a day for a period of 4 years;
to recruit, train and direct her Supervising Associates Bustamane would then become the owner of the
and Health Consultants. However, the manner in vehicle and continue to drive the same under
which Consulta was to pursue these activities was not Villamarias franchise, but with Php 10,000
subject to the control of Pamana. Consulta failed to downpayment. On August 7, 1997, Villamaria
show that she had to report for work at definite hours. executed a contract entitled Kasunduan ng Bilihan ng
The amount of time she devoted to soliciting clients SasakyansaPamamagitan ng Boundary Hulog. The
was left entirely to her discretion. The means and parties agreed that if Bustamante failed to pay the
methods of recruiting and training her sales boundary- hulog for 3 days, Villamaria Motors would
associates, as well as the development, management hold on to the vehicle until Bustamante paid his
and maintenance of her sales division, were left to her arrears, including a penalty of 50 a day; in case
sound judgment. Managing Associates only received Bustamante failed to remit the daily boundary-hulog for
suggestions from Pamana on how to go about their a period of one week, the Kasunduan would cease to
recruitment and sales activities. They could adopt the have the legal effect and Bustamante would have to
suggestions but the suggestions were not binding on return the vehicle to Villamaria motors.In 1999,
them. They could adopt other methods that they Bustamante and other drivers who also had the same
deemed more effective. Further, the Managing arrangement failed to pay their respective boundary-
Associates had to ask the Management of Pamana to hulog. This prompted Villamaria to serve a Paalala.
shoulder half of the advertisement cost for their On July 24, 2000.Villamaria took back the jeepney
recruitment campaign. They shelled out their own driven by Bustamante and barred the latter from
resources to bolster their recruitment. They shared in driving the vehicle.Bustamante filed a complaint for
the payment of the salaries of their secretaries. They Illegal Dismissal.
gave cash incentives to their sales associates from
their own pocket. These circumstances show that the ISSUES
Managing Associates were independent contractors, WON the existence of a boundary-hulog agreement
not employees, of Pamana. negates the employer-employee relationship between
the vendor and vendee
The appointment provided that Consulta must
represent Pamana on an exclusive basis. She must HELD
not engage directly or indirectly in activities of other NO. Under the boundary-hulog scheme, a dual
companies that compete with the business of Pamana. juridical relationship is created; that of employer-
However, the fact that the appointment required employee and vendor-vendee. The Kasanduan did not
Consulta to solicit business exclusively for Pamana did extinguish the employer employee relationship of the
not mean that Pamana exercised control over the parties existing before the execution of said deed.
means and methods of Consultas work as the term
control is understood in labor jurisprudence. Neither a. Under this system the owner/operator exercises
did it make Consulta an employee of Pamana. control and supervision over the driver. It is unlike in
Pamana did not prohibit Consulta from engaging in lease of chattels where the lessor loses complete
any other business, or from being connected with any control over the chattel leased but the lessee is still
other company, for as long as the business or ultimately responsible for the consequences of its use.
company did not compete with Pamanas business. The management of the business is still in the hands
of the owner/operator, who, being the holder of the
certificate of public convenience, must see to it that the
driver follows the route prescribed by the franchising

67
and regulatory authority, and the rules promulgated cooperative alleges that its owners-members own the
with regard to the business operations. cooperative, thus, no employer-employee relationship
can arise between them.
b. The driver performs activities which are usually
necessary or desirable in the usual business or trade ISSUE
of the owner/operator. Under the Kasunduan, WON an employer-employee relationship exists
respondent was required to remit Php 550 daily to between Stanfilco and its owner-members
petitioner, an amount which represented the boundary
of petitioner as well as respondents partial payment HELD
(hulog) of the purchase price of the jeepney. Thus, the YES. An owner-member of a cooperative can be an
daily remittances also had a dual purpose: that of employee of the latter and an employer-employee
petitioners boundary and respondents partial payment relationship can exist between them. a cooperative
(hulog) for the vehicle. acquires juridical personality upon its registration with
the Cooperative Development Authority. It has its
c. The obligation is not novated by an instrument that Board of Directors, which directs and supervises its
expressly recognizes the old one, business; meaning, its Board of Directors is the one in
changes only the terms of payment and adds other charge in the conduct and management of its affairs.
obligations not incompatible with the old provisions or With that, a cooperative can be likened to a
where the contract merely supplements the previous corporation with a personality separate and distinct
one. from its owners-members. It is true that the Service
Contracts executed between the respondent
d. The existence of an employment relation is not cooperative and Stanfilco expressly provide that there
dependent on how the worker is paid but on the shall be no employer-employee relationship between
presence or absence of control over the means and the respondent cooperative and its owners-members.
method of the work. The amount earned in excess of However, the existence of an employer-employee
the boundary hulog is equivalent to wages and the relationship cannot be negated by expressly
fact that the power of dismissal was not mentioned in repudiating it in a contract, when the terms and
the Kasunduan did not mean that private respondent surrounding circumstances show otherwise. The
never exercised such power, or could not exercise employment status of a person is defined and
such power. prescribed by law and not by what the parties say it
should be. It is settled that the contracting parties may
REPUBLIC v. ASIAPRO COOPERATIVE establish such stipulations, clauses, terms and
G.R. No. 172101, November 23, 2007, Chico Nazario conditions as they want, and their agreement would
have the force of law between them. However, the
Asiapro, as a cooperative, is composed of owners- agreed terms and conditions must not be contrary to
members. Its primary objectives are to provide savings law, morals, customs, public policy or public order. The
and credit facilities and to develop other livelihood Service Contract provision in question must be struck
services for its owners-members. In the discharge of down for being contrary to law and public policy since
the aforesaid primary objectives, respondent it is apparently being used by the respondent
cooperative entered into several Service Contracts cooperative merely to circumvent the compulsory
with Stanfilco. The owners-members do not receive coverage of its employees, who are also its owners-
compensation or wages from the respondent members, by the Social Security Law. The four
cooperative. Instead, they receive a share in the elements in determining the existence of an employer-
service surplus which Asiapro earns from different employee relationship are all present in this case.
areas of trade it engages in, such as the income First. It is expressly provided in the Service Contracts
derived from the said Service Contracts with Stanfilco. that it is the respondent cooperative which has the
In order to enjoy the benefits under the Social Security exclusive discretion in the selection and engagement
Law of 1997, the owners-members of Asiapro in of the owners-members as well as its team leaders
Stanfilco requested the services of the latter to register who will be assigned at Stanfilco. Second. the weekly
them with SSS as self-employed and to remit their stipends or the so-called shares in the service surplus
contributions as such. Petitioner SSS sent a letter to given by the respondent cooperative to its owners-
respondent cooperative informing the latter that based members were in reality wages, as the same were
on the Service Contracts it executed with Stanfilco, equivalent to an amount not lower than that prescribed
Asiapro is actually a manpower contractor supplying by existing labor laws, rules and regulations, including
employees to Stanfilco and so, it is an employer of its the wage order applicable to the area and industry,
owners-members working with Stanfilco. Thus, Asiapro they are also given to the owners-members as
should register itself with petitioner SSS as an compensation in rendering services to respondent
employer and make the corresponding report and cooperatives client, Stanfilco. Third .it is the
remittance of premium contributions. Despite letters respondent cooperative which has the power to
received, respondent cooperative continuously ignored investigate, discipline and remove the owners-
the demand of petitioner SSS. Respondent members and its team leaders who were rendering

68
services at Stanfilco. Fourth and most importantly, it is In a long line of decisions, the Court, in determining
the respondent cooperative which has the sole control the existence of an employer-employee relationship,
over the manner and means of performing the services has invariably adhered to the four-fold test, to wit: [1]
under the Service Contracts with Stanfilco as well as the selection and engagement of the employee; [2] the
the means and methods of work. All these clearly payment of wages; [3] the power of dismissal; and [4]
prove that, indeed, there is an employer-employee the power to control the employees conduct, or the so-
relationship between the respondent cooperative and called "control test", considered to be the most
its owners-members. important element.

PHILIPPINE GLOBAL COMMUNICATIONS, INC. v. Applying the four-fold test to this case, we initially find
RICARDO DE VERA that it was respondent himself who sets the
G.R. No. 157214, June 7, 2005 parameters of what his duties would be in offering his
services to petitioner. Evidence also shows that
Petitioner Philippine Global Communications, Inc. respondent PHILCOM did not have control over the
(PhilCom), is a corporation engaged in the business of schedule of the complainant as it [is] the complainant
communication services and allied activities, while who is proposing his own schedule and asking to be
respondent Ricardo De Vera is a physician by paid for the same. This is proof that the complainant
profession whom petitioner enlisted to attend to the understood that his relationship with the respondent
medical needs of its employees. PHILCOM was a retained physician and not as an
employee. If he were an employee he could not
On May 15, 1981, De Vera offered his services to the negotiate as to his hours of work.
petitioner, therein proposing his plan of works required
of a practitioner in industrial medicine including check- The complainant also admitted that his service for the
up and treatment of employees, pre-employment respondent was covered by a retainership contract
physical and mental check-ups and holding clinic [which] was renewed every year from 1982 to
hours for consultation of employees. For this purpose 1994. The labor arbiter added the indicia, not disputed
they entered into a Retainership Agreement which will by respondent, that from the time he started to work
be for a period of one year subject to renewal. The with petitioner, he never was included in its payroll;
retainership arrangement went on from 1981 to 1994 was never deducted any contribution for remittance to
with changes in the retainers fee. However, for the the Social Security System (SSS); and was in fact
years 1995 and 1996, renewal of the contract was only subjected by petitioner to the ten (10%) percent
made verbally. withholding tax for his professional fee, in accordance
with the National Internal Revenue Code, matters
In December 1996 when Philcom, thru a letterinformed which are simply inconsistent with an employer-
De Vera of its decision to discontinue the latters employee relationship.
"retainers contract with the Company because
management has decided that it would be more We note, too, that the power to terminate the parties
practical to provide medical services to its employees relationship was mutually vested on both. Either may
through accredited hospitals near the company terminate the arrangement at will, with or without
premises. De Vera filed a complaint for illegal cause. Clearly, the elements of an employer-employee
dismissal before the National Labor Relations relationship are wanting in this case. We may add that
Commission (NLRC), alleging that that he had been the records are replete with evidence showing that
actually employed by Philcom as its company respondent had to bill petitioner for his monthly
physician since 1981 and was dismissed without due professional fees. It simply runs against the grain of
process. He averred that he was designated as a common experience to imagine that an ordinary
"company physician on retainer basis" for reasons employee has yet to bill his employer to receive his
allegedly known only to Philcom. salary.

The Labor Arbiter dismissed the complaint for lack of Finally, remarkably absent from the parties
merit and held that De Vera was an independent arrangement is the element of control, whereby the
contractor and that he was not dismissed instead his employer has reserved the right to control the
contract ended when it was not renewed. NLRC employee not only as to the result of the work done but
reversed and found De Vera to be a regular employee also as to the means and methods by which the same
of the company and ordered him to be reinstated. is to be accomplished. Petitioner had no control over
the means and methods by which respondent went
ISSUE about performing his work at the company premises
Whether an employer-employee relationship exists not to mention the fact that respondents work hours
between petitioner and respondent and the additional compensation were negotiated upon
by the parties.In fine, the parties themselves practically
HELD agreed on every terms and conditions of respondents

69
engagement, which thereby negates the element of as truck driver on October 25, 1984. As such, the
control in their relationship. petitioner was tasked to deliver the respondent
companys products from its factory in Mariveles,
COCA COLA BOTTLERS V. CLIMACO Bataan, to its various customers, mostly in Metro
G.R. No. 146881, February 5, 2007, Azcuna Manila. The respondent company furnished the
petitioner with a truck. Most of the petitioners delivery
Respondent was hired by petitioner as a company trips were made at nighttime, commencing at 6:00 p.m.
doctor; a retainership agreement renewable annually from Mariveles, and returning thereto in the afternoon
was signed pursuant thereto. For 3 consecutive years, two or three days after. The deliveries were made in
the retainer agreement was signed annually. On the 4th accordance with the routing slips issued by respondent
year, the contract of respondent was not renewed yet company indicating the order, time and urgency of
the latter remained working for the petitioner. On later delivery. Initially, the petitioner was paid the sum of
date, petitioner expressly told respondent that the P350.00 per trip. This was later adjusted to P480.00
former will no longer renew the retainership. per trip and, at the time of his alleged dismissal, the
petitioner was receiving P900.00 per trip.
ISSUE
Whether or not respondent is an employee of ISSUE
petitioner. Whether or not there existed an employer-employee
relationship between the respondent company and the
RULING petitioner
No. The Court, in determining the existence of an
employer-employee relationship, has invariably RULING
adhered to the four-fold test: (1) the selection and YES. The elements to determine the existence of an
engagement of the employee; (2) the payment of employment relationship are: (1) the selection and
wages; (3) the power of dismissal; and (4) the power to engagement of the employee; (2) the payment of
control the employees conduct, or the so-called wages; (3) the power of dismissal; and (4) the
"control test," considered to be the most important employers power to control the employees conduct.
element. The most important element is the employers control
of the employees conduct, not only as to the result of
The Court agrees with the finding of the Labor Arbiter the work to be done, but also as to the means and
and the NLRC that the circumstances of this case methods to accomplish it.All the four elements are
show that no employer-employee relationship exists present in this case. As earlier opined, of the four
between the parties. The Labor Arbiter and the NLRC elements of the employer-employee relationship, the
correctly found that petitioner company lacked the control test is the most important. Although the
power of control over the performance by respondent respondents denied that they exercised control over
of his duties. The Labor Arbiter reasoned that the the manner and methods by which the petitioner
Comprehensive Medical Plan, which contains the accomplished his work, a careful review of the records
respondents objectives, duties and obligations, does shows that the latter performed his work as truck driver
not tell respondent "how to conduct his physical under the respondents supervision and control. Their
examination, how to immunize, or how to diagnose right of control was manifested by the following
and treat his patients, employees of [petitioner] attendant circumstances:
company, in each case." 1. The truck driven by the petitioner belonged to
respondent company;
Considering that there is no employer-employee 2. There was an express instruction from the
relationship between the parties, the termination of the respondents that the truck shall be used exclusively to
Retainership Agreement, which is in accordance with deliver respondent companys goods;
the provisions of the Agreement, does not constitute 3. Respondents directed the petitioner, after
illegal dismissal of respondent. Consequently, there is completion of each delivery, to park the truck in either
no basis for the moral and exemplary damages of two specific places only, to wit: at its office in Metro
granted by the Court of Appeals to respondent due to Manila at 2320 Osmea Street, Makati City or at BEPZ,
his alleged illegal dismissal. Mariveles, Bataan; and
4. Respondents determined how, where and when the
PEDRO CHAVEZ vs. NATIONAL LABOR petitioner would perform his task by issuing to him gate
RELATIONS COMMISSION, SUPREME passes and routing slips.
PACKAGING, INC. and ALVIN LEE
G.R. No. 146530. January 17, 2005 ANGELINA FRANCISCO v. NLRC
G.R. 170087, August 31, 2006, Ynares-Santiago
The respondent company, Supreme Packaging, Inc., is
in the business of manufacturing cartons and other Petitioner was hired by Kasei Corporation during its
packaging materials for export and distribution. It incorporation stage.She reported for work regularly
engaged the services of the petitioner, Pedro Chavez, and served in various capacities as Accountant,

70
Liaison Officer, Technical Consultant, Acting Manager vouchers indicating her salaries/wages, benefits, 13th
and Corporate Secretary, with substantially the same month pay, bonuses and allowances, as well as
job functions, that is, rendering accounting and tax deductions and Social Security contributions from
services to the company and performing functions August 1, 1999 to December 18, 2000.
necessary and desirable for the proper operation of the
corporation such as securing business permits and It is therefore apparent that petitioner is economically
other licenses over an indefinite period of engagement. dependent on respondent corporation for her
XXX On October 15, 2001, petitioner asked for her continued employment in the latters line of business.
salary from Acedo and the rest of the officers but she
was informed that she is no longer connected with the GREGORIO V. TONGKO vs. THE
company. MANUFACTURERS LIFE INSURANCE CO. (PHILS.),
INC. and RENATO A. VERGEL DE DIOS
ISSUE G.R. No. 167622, January 25, 2011, Brion
Was there an employer-employee relationship
between petitioner and private respondent Kasei TOPIC: Agency; Insurance Companies; Employer-
Corporation? employee relationships

HELD DOCTRINE: Control over the performance of the task


Yes. In certain cases the control test is not sufficient to of one providing service both with respect to the
give a complete picture of the relationship between the means and manner, and the results of the service is
parties, owing to the complexity of such a relationship the primary element in determining whether an
where several positions have been held by the worker. employment relationship exists.In the Supreme Courts
June 29, 2010 Resolution of this case, they noted that
The better approach would therefore be to adopt a there are built-in elements of control specific to an
two-tiered test involving: (1) the putative employers insurance agency, which do not amount to the
power to control the employee with respect to the elements of control that characterize an employment
means and methods by which the work is to be relationship governed by the Labor Code.The
accomplished; and (2) the underlying economic Insurance Code provides definite parameters in the
realities of the activity or relationship. way an agent negotiates for the sale of the companys
insurance products, his collection activities and his
Thus, the determination of the relationship between delivery of the insurance contract or policy. They do
employer and employee depends upon the not reach the level of control into the means and
circumstances of the whole economic activity,such as: manner of doing an assigned task that invariably
(1) the extent to which the services performed are an characterizes an employment relationship as defined
integral part of the employers business; (2) the extent by labor law.
of the workers investment in equipment and facilities;
(3) the nature and degree of control exercised by the FACTS
employer; (4) the workers opportunity for profit and Taking from the November 2008 decision, the facts are
loss; (5) the amount of initiative, skill, judgment or as follows:
foresight required for the success of the claimed Manufacturers Life Insurance, Co. is a domestic
independent enterprise; (6) the permanency and corporation engaged in life insurance business. De
duration of the relationship between the worker and Dios was its President and Chief Executive Officer.
the employer; and (7) the degree of dependency of the Petitioner Tongko started his relationship with Manulife
worker upon the employer for his continued in 1977 by virtue of a Career Agent's Agreement.
employment in that line of business. Pertinent provisions of the agreement state that: (this
part is essential to determine relationship between Pet.
The proper standard of economic dependence is and Res.)
whether the worker is dependent on the alleged It is understood and agreed that the Agent is an
employer for his continued employment in that line of independent contractor and nothing contained herein
business. shall be construed or interpreted as creating an
employer-employee relationship between the
By applying the control test, there is no doubt that Company and the Agent.
petitioner is an employee of Kasei Corporation a) The Agent shall canvass for applications for Life
because she was under the direct control and Insurance, Annuities, Group policies and other
supervision of Seiji Kamura, the corporations Technical products offered by the Company, and collect, in
Consultant. exchange for provisional receipts issued by the
Agent, money due or to become due to the
Under the broader economic reality test, the petitioner Company in respect of applications or policies
can likewise be said to be an employee of respondent obtained by or through the Agent or from
corporation because she had served the company for policyholders allotted by the Company to the Agent
six years before her dismissal, receiving check for servicing, subject to subsequent confirmation of

71
receipt of payment by the Company as evidenced by standards of behavior rather than employer directives
an Official Receipt issued by the Company directly to into how specific tasks are to be done.
the policyholder.
b) The Company may terminate this In sum, the Supreme Court found absolutely no
Agreement for any breach or violation of any evidence of labor law control.
of the provisions hereof by the Agent by giving
written notice to the Agent within fifteen (15) INTEL TECHNOLOGY PHILIPPINES, INC. v.
days from the time of the discovery of the NATIONAL LABOR RELATIONS COMMISSION AND
breach. No waiver, extinguishment, JEREMIAS CABILES
abandonment, withdrawal or cancellation of G.R. No. 200575, February 5, 2014, Mendoza
the right to terminate this Agreement by the
Company shall be construed for any previous Cabiles was initially hired by Intel Phil. on April 16,
failure to exercise its right under any provision 1997 as an Inventory Analyst. He was subsequently
of this Agreement. promoted several times over the years and was also
c) Either of the parties hereto may likewise assigned at Intel Arizona and Intel Chengdu. He later
terminate his Agreement at any time without applied for a position at Intel Semiconductor Limited
cause, by giving to the other party fifteen (15) Hong Kong (Intel HK).
days notice in writing.
In a letter dated December 12, 2006, Cabiles was
De Dios sent Tongko a letter of termination(for inability offered the position of Finance Manager by Intel HK.
to push for company development and growth) in Before accepting the offer, he inquired from Intel Phil.,
accordance with Tongko's Agents Contract. Tongko through an email, the consequences of accepting the
filed a complaint with the NLRC against Manulife for newly presented opportunity in Hong Kong, particularly
illegal dismissal, alleging that he had an employer- his retirement benefits. He will celebrate his 10th year
employee relationship with De Dios instead of a of service with Intel on April 16, 2007. However, he will
revocable agency by pointing out that the latter be moving to Hong Kong as a local hire starting
exercised control over him through directives regarding February 1. On January 23, 2007, Intel Phil., through
how to manage his area of responsibility and setting Penny Gabronino (Gabronino), stated that he is not
objectives for him relating to the business. Tongko also entitled to receive his entitlement benefit.
claimed that his dismissal was without basis and he
was not afforded due process. On January 31, 2007, Cabiles signed the job
offer.8OCabiles executed a Release, Waiver and
ISSUE Quitclaim (Waiver) in favor of Intel Phil. acknowledging
Whether there is an employer-employee relationship receipt of P165,857.62 as full and complete settlement
of all benefits due him by reason of his separation from
HELD Intel Phil. On September 8, 2007, after seven (7)
No Employer-Employee Relationship.The Supreme months of employment, Cabiles resigned from Intel
Court ruled petitioners Motion against his favor since HK.
he failed to show that the control Manulife exercised
over him was the control required to exist in an On August 18, 2009, Cabiles filed a complaint for non-
employer-employee relationship; Manulifes control fell payment of retirement benefits and for moral and
short of this norm and carried only the characteristic of exemplary damages with the NLRC Regional
the relationship between an insurance company and Arbitration Branch-IV. He insisted that he was
its agents, as defined by the Insurance Code and by employed by Intel for 10 years and 5 months from April
the law of agency under the Civil Code. 1997 to September 2007 a period which included his
seven (7) month stint with Intel HK. Thus, he believed
To reiterate, guidelines indicative of labor law "control" he was qualified to avail of the benefits under the
do not merely relate to the mutually desirable result companys retirement policy allowing an employee
intended by the contractual relationship; they must who served for 10 years or more to receive retirement
have the nature of dictating the means and methods to benefits.
be employed in attaining the result. Tested by this
norm, Manulifes instructions regarding the objectives On March 18, 2010, the LA ordered Intel Phil. together
and sales targets, in connection with the training and with Grace Ong, Nida delos Santos, Gabronino, and
engagement of other agents, are among the directives Pia Viloria, to pay Cabiles the amount of HKD
that the principal may impose on the agent to achieve 419,868.77 or its peso equivalent as retirement pay
the assigned tasks.They are targeted results that with legal interest and attorneys fees. The LA held that
Manulife wishes to attain through its agents. Manulifes Cabiles did not sever his employment with Intel Phil.
codes of conduct, likewise, do not necessarily intrude when he moved to Intel HK, similar to the instances
into the insurance agents means and manner of when he was assigned at Intel Arizona and Intel
conducting their sales. Codes of conduct are norms or Chengdu.

72
Aggrieved, Intel Phil. elevated the case to the CA via a The Court, however, is again not convinced. The
petition for certiorari with application for a Temporary continuity, existence or termination of an employer-
Restraining Order (TRO) on April 5, 2011. The employee relationship in a typical secondment contract
application for TRO was denied. Earlier, on September or any employment contract for that matter is
19, 2011, pending disposition of the petition before the measured by the following yardsticks:1. the selection
CA, the NLRC issued a writ of execution14 against Intel and engagement of the employee;2. the payment of
Phil. As ordered by the NLRC, Intel Phil. satisfied the wages;3. the power of dismissal; and4. the employers
judgment on December 13, 2011 by paying the power to control the employees conduct.28
amount ofP3,201,398.60 which included the applicable
withholding taxes due and paid to the Bureau of As applied, all of the above benchmarks ceased upon
Internal Revenue. Cabiles received a net amount Cabiles assumption of duties with Intel HK on
of P2,485,337.35, covered by the Bank of the February 1, 2007. Intel HK became the new employer.
Philippine Islands Managers Check No. It provided Cabiles his compensation. Cabiles then
0000000806.16 By reason thereof, Intel Phil. filed on became subject to Hong Kong labor laws, and
December 21, 2011 a Supplement to the Petition for necessarily, the rights appurtenant thereto, including
Certiorari17 praying, in addition to the reliefs sought in the right of Intel HK to fire him on available grounds.
the main, that the CA order the restitution of all the Lastly, Intel HK had control and supervision over him
amounts paid by them pursuant to the NLRCs writ of as its new Finance Manager. Evidently, Intel Phil. no
execution, dated September 19, 2011. longer had any control over him. Hence, Cabiles
theory of secondment must fail.
ISSUE
WON Cabiles had completed the required 10 year What distinguishes Intel Chengdu and Intel Arizona
continuous service21 with Intel Phil., thus, qualifying from Intel HK is the lack of intervention of Intel Phil. on
him for retirement benefits. the matter. In the two previous transfers, Intel Phil.
remained as the principal employer while Cabiles was
RULING on a temporary assignment. By virtue of which, it still
Resignation is the formal relinquishment of an assumed responsibility for the payment of
office,24 the overt act of which is coupled with an intent compensation and benefits due him. The assignment
to renounce. This intent could be inferred from the acts to Intel HK, on the other hand, was a permanent
of the employee before and after the alleged transfer and Intel Phil. never participated in any way in
resignation.25 In this case, Cabiles, while still on a the process of his employment there. It was Cabiles
temporary assignment in Intel Chengdu, was offered himself who took the opportunity and the risk. If it were
by Intel HK the job of a Finance Manager. In indeed similar to Intel Arizona and Intel Chengdu
contemplating whether to accept the offer, Cabiles assignments, Intel Philippines would have had a say in
wrote Intel Phil. providing details and asked about the it. Petition granted.
retirement benefits. Despite a non-favorable reply as to
his retirement concerns, Cabiles still accepted the offer MATLING INDUSTRIAL & COMMERCIAL
of Intel HK. CORPORATION V. RICARDO COROS
G.R. No. 157802, October 1, 2010
His acceptance of the offer meant letting go of the
retirement benefits he now claims as he was informed Doctrine: For a position to be considered as a
through email correspondence that his 9.5 years of corporate office, or, for that matter, for one to be
service with Intel Phil. would not be rounded off in his considered as a corporate officer, the position must, if
favor. He, thus, placed himself in this position, as he not listed in the by-laws, have been created by the
chose to be employed in a company that would pay corporation's board of directors, and the occupant
him more than what he could earn in Chengdu or in thereof appointed or elected by the same board of
the Philippines. The choice of staying with Intel Phil. directors or stockholders.
vis--vis a very attractive opportunity with Intel HK put
him in a dilemma. - The criteria for distinguishing between corporate
officers who may be ousted from office at will, on one
Cabiles views his employment in Hong Kong as an hand, and ordinary corporate employees who may only
assignment or an extension of his employment with be terminated for just cause, on the other hand, do not
Intel Phil. He cited as evidence the offer made to him depend on the nature of the services performed, but
as well as the letter, dated January 8, 2007,27 both of on the manner of creation of the office.
which used the word "assignment" in reference to his
engagement in Hong Kong as a clear indication of the - The determination of whether the dismissed officer
alleged continuation of his ties with Intel Phil. The was a regular employee or corporate officer unravels
foregoing arguments of Cabiles, in essence, speak of the conundrum of whether a complaint for illegal
the "theory of secondment." dismissal is cognizable by the Labor Arbiter or by the
RTC. In case of the regular employee, the LA has

73
jurisdiction; otherwise, the RTC exercises the legal that matter, for one to be considered as a corporate
authority to adjudicate. officer, the position must, if not listed in the by-laws,
have been created by the corporation's board of
FACTS directors, and the occupant thereof appointed or
After respondent Ricardo Coros dismissal by Matling elected by the same board of directors or stockholders.
as its Vice President for Finance and Administration, This is the implication of the ruling in Tabang v.
he filed on August 10, 2000 a complaint for illegal National Labor Relations Commission, which reads:
suspension and illegal dismissal against Matling and
some of its corporate officers in the NLRC, Sub- The president, vice president, secretary and treasurer
Regional Arbitration Branch XII, Iligan City. are commonly regarded as the principal or executive
officers of a corporation, and modern corporation
The petitioners moved to dismiss the complaint, raising statutes usually designate them as the officers of the
the ground, among others, that the complaint pertained corporation. However, other offices are sometimes
to the jurisdiction of the Securities and Exchange created by the charter or by-laws of a corporation, or
Commission due to the controversy being intra- the board of directors may be empowered under the
corporate inasmuch as the respondent was a member by-laws of a corporation to create additional offices as
of Matlings Board of Directors aside from being its may be necessary.
Vice-President for Finance and Administration prior to
his termination. It has been held that an 'office' is created by the
charter of the corporation and the officer is elected by
The respondent opposed the petitioners motion to the directors or stockholders. On the other hand, an
dismiss, insisting that his status as a member of 'employee' usually occupies no office and generally is
Matlings Board of Directors was doubtful, considering employed not by action of the directors or stockholders
that he had not been formally elected as such; that he but by the managing officer of the corporation who also
did not own a single share of stock in Matling, determines the compensation to be paid to such
considering that he had been made to sign in blank an employee.
undated endorsement of the certificate of stock he had
been given in 1992; that Matling had taken back and This ruling was reiterated in the subsequent cases of
retained the certificate of stock in its custody; and that Ongkingco v. National Labor Relations Commission
even assuming that he had been a Director of Matling, and De Rossi v. National Labor Relations Commission.
he had been removed as the Vice President for
Finance and Administration, not as a Director, a fact The position of vice-president for administration and
that the notice of his termination dated April 10, 2000 finance, which Coros used to hold in the corporation,
showed. was not created by the corporations Board of
Directors but only by its president or executive vice-
On October 16, 2000, the Labor Arbiter granted the president pursuant to the by-laws of the corporation.
petitioners motion to dismiss, ruling that the Moreover, Coros appointment to said position was not
respondent was a corporate officer. made through any act of the board of directors or
stockholders of the corporation. Consequently, the
On March 13, 2001, the NLRC set aside the dismissal, position to which Coros was appointed and later on
concluding that the respondents complaint for illegal removed from, is not a corporate office despite its
dismissal was properly cognizable by the Labor Arbiter nomenclature, but an ordinary office in the corporation.
not by the SEC, because he was not a corporate Coros alleged illegal dismissal therefrom is, therefore,
officer by virtue of his position in Matling, albeit high within the jurisdiction of the labor arbiter.
ranking and managerial, not being among the positions
listed in Matlings Constitution and by-laws. MR was likewise denied.Hence this petition for review
on certiorari.
On motion for reconsideration, petitioners submitted a
certified machine copies of Matlings Amended Articles ISSUE
of Incorporation and By-laws to prove that the Whether or not respondent was a corporate officer of
President of Matling was thereby granted full power to Matling Industrial and Commercial Corporation. - NO
create new offices and appoint the officers
thereto and the minutes of special meeting held on RULING
June 7, 1999 by Matlings Board of Directors to prove Conformably with Section 25 of the Corporation Code,
that the respondent was, indeed, a Member of the a position must be expressly mentioned inthe by-laws
Board of Directors. Nonetheless, the NLRC denied the in order to be considered as a corporate office.
petitioners motion for Reconsideration. The petitioners
elevated the issue to the CA by petition for Certiorari. Thus, the creation of anoffice pursuant to or under a
by-law enabling provision is not enough to make
The CA dismissed the petition for certiorari. For a aposition a corporate office. Guerrea vs Lezama, the
position to be considered as a corporate office, or, for first ruling on the matter, heldthat the only officers of a

74
corporation were those given that character either by stockholder had any relation at all to his appointment
the Corporation Code or by the by-laws; the rest of the and subsequent dismissal as Vice President for
corporate officers could beconsidered only as Finance and Administration.
employees or subordinate officials.
Even though he might have become a stockholder of
It is relevant to state in this connection that the SEC, Matling in 1992, his promotion to the position of Vice
the primary agencyadministering the Corporation President for Finance and Administration in 1987 was
Code, adopted a similar interpretation of Section 25of by virtue of the length of quality service he had
the Corporation Code in its Opinion dated November rendered as an employee of Matling. His subsequent
25, 1993, to wit: acquisition of the status of Director/stockholder had no
relation to his promotion. Besides, his status of
Thus, pursuant to Section 25 of the Corporation Code, Director/stockholder was unaffected by his dismissal
whoever are the corporateofficers enumerated in the from employment as Vice President for Finance and
By-laws are the exclusive officers of the corporation Administration.
andthe Board has no power to create other offices
without amending first the corporateBy-laws. However, CAs decision is affirmed. Coros was an employee,
the Board may create appointive positions other than Labor Arbiter has jurisdiction on the illegal dismissal
thepositions of corporate officers, but the persons case.
occupying such positions are notconsidered as
corporate officers within the meaning of Section 25 of RAUL C. COSARE v. BROADCOM ASIA, INC. and
the CorporationCodeand are not empowered to DANTE AREVALO
exercise the functions of the corporate officers, except G.R. No. 201298, February 5, 2014, Reyes
those functions lawfully delegated to them. Their
functions and duties are tobe determined by the Board Petitioner Cosare claims that he was the Assistant
of Directors/Trustees. Vice President for Sales (AVP for Sales) and Head of
the Technical Coordination for Respondent
Moreover, the Board of Directors of Matling could not Corporation. Sometime in 2003, one Alex Abiog was
validly delegate the power tocreate a corporate office appointed as Vice President for Sales, becoming his
to the President, in light of Section 25 of the immediate superior. Petitioner informed Arevalo, being
CorporationCode requiring the Board of Directors itself President, of certain anomalies Abiog was involved.
to elect the corporate officers. Verily,the power to elect Petitioner was then furnished a memo, whereby he
the corporate officers was a discretionary power that was given forty-eight (48) hours from date to present
the law exclusively vested in the Board of Directors, his explanation on the charges of irregularities.
and could not be delegated tosubordinate officers or Petitioner was totally barred from entering company
agents. The office of Vice President for Finance premises and to wait outside for further instructions,
andAdministration created by Matlings President but no instructions were given until 8PM. Petitioner
pursuant to By-law No. V was anordinary, not a now files with LA complaint for constructive dismissal.
corporate, office.
ISSUE
To emphasize, the power to create new offices and the Was Petitioner constructively dismissed?
power to appoint the officersto occupy them vested by
By-law No. V merely allowed Matlings President HELD
tocreate non-corporate offices to be occupied by YES.
ordinary employees of Matling. Suchpowers were The test of constructive dismissal is whether a
incidental to the Presidents duties as the executive reasonable person in the employees position would
head of Matling toassist him in the daily operations of have felt compelled to give up his position under the
the business. circumstances. It is an act amounting to dismissal but
is made to appear as if it were not. Constructive
The criteria for distinguishing between corporate dismissal is therefore a dismissal in disguise. The law
officers who may be ousted from office at will, on one recognizes and resolves this situation in favor of
hand, and ordinary corporate employees who may only employees in order to protect their rights and interests
be terminated for just cause, on the other hand, do not from the coercive acts of the employer.
depend on the nature of the services performed, but It is clear from the cited circumstances that the
on the manner of creation of the office. In the respondents already rejected Cosares continued
respondents case, he was supposedly at once an involvement with the company. Even their refusal to
employee, a stockholder, and a Director of Matling. accept the explanation which Cosare tried to tender on
The circumstances surrounding his appointment to April 2, 2009 further evidenced the resolve to deny
office must be fully considered to determine whether Cosare of the opportunity to be heard prior to any
the dismissal constituted an intra-corporate decision on the termination of his employment. The
controversy or a labor termination dispute. We must respondents allegedly refused acceptance of the
also consider whether his status as Director and explanation as it was filed beyond the mere 48-hour

75
period which they granted to Cosare under the memo
dated March 30, 2009. However, even this limitation The CA correctly recognized the authenticity of the
was a flaw in the memo or notice to explain which only operational documents, for the failure of Atlanta to
further signified the respondents discrimination, raise a challenge against these documents before the
disdain and insensibility towards Cosare, apparently labor arbiter, the NLRC and the CA itself. The
resorted to by the respondents in order to deny their appellate court, thus, found the said documents
employee of the opportunity to fully explain his sufficient to establish the employment of the
defenses and ultimately, retain his employment. respondents before their engagement as apprentices.

In sum, the respondents were already resolute on a The fact that Sebolino and the three others were
severance of their working relationship with Cosare, already rendering service to the company when they
notwithstanding the facts which could have been were made to undergo apprenticeship (as established
established by his explanations and the respondents by the evidence) renders the apprenticeship
full investigation on the matter. In addition to this, the agreements irrelevant as far as the four are
fact that no further investigation and final disposition concerned. This reality is highlighted by the CA finding
appeared to have been made by the respondents on that the respondents occupied positions such as
Cosares case only negated the claim that they machine operator, scaleman and extruder operator -
actually intended to first look into the matter before tasks that are usually necessary and desirable in
making a final determination as to the guilt or Atlanta's usual business or trade as manufacturer of
innocence of their employee. This also manifested plastic building materials. These tasks and their nature
from the fact that even before Cosare was required to characterized the four as regular employees under
present his side on the charges of serious misconduct Article 280 of the Labor Code.Thus, when they were
and willful breach of trust, he was summoned to dismissed without just or authorized cause, without
Arevalos office and was asked to tender his notice, and without the opportunity to be heard, their
immediate resignation in exchange for financial dismissal was illegal under the law.
assistance.
REPUBLIC V. ASIAPRO COOPERATIVE
ATLANTA INDUSTRIES, INC. and/or ROBERT G.R. No. 172101, November 23, 2007
CHAN v. APRILITO R. SEBOLINO, KHIM V.
COSTALES, ALVIN V. ALMONTE, and JOSEPH H. Under the respondents by-laws, owners-members are
SAGUN of two categories, to wit: (1) regular member, who is
G.R. No. 187320, January 26, 2011, Brion entitled to all the rights and privileges of membership;
and (2) associate member, who has no right to vote
Sebolino et al. filed several complaints for illegal and be voted upon and shall be entitled only to such
dismissal, regularization, underpayment, nonpayment rights and privileges provided in its by-laws. In the
of wages and other money claims as well as damages. discharge of the aforesaid primary objectives,
They alleged that they had attained regular status as respondent cooperative entered into several Service
they were allowed to work with Atlanta for more than Contracts. The owners-members do not receive
six (6) months from the start of a purported compensation or wages from the respondent
apprenticeship agreement between them and the cooperative but instead they receive a share in the
company. They claimed that they were illegally service surplus which the respondent cooperative
dismissed when the apprenticeship agreement earns from different areas of trade it engages in, such
expired. as the income derived from the said Service Contracts
with Stanfilco. The owners-members get their income
In defense, Atlanta and Chan argued that the workers from the service surplus generated by the quality and
were not entitled to regularization and to their money amount of services they rendered. In order to enjoy the
claims because they were engaged as apprentices benefits under the Social Security Law of 1997, the
under a government-approved apprenticeship owners-members of the respondent cooperative, who
program. The company offered to hire them as regular were assigned to Stanfilco requested the services of
employees in the event vacancies for regular positions the latter to register them with petitioner SSS as self-
occur in the section of the plant where they had employed and to remit their contributions as such.
trained. They also claimed that their names did not Petitioner SSS said that based on the Service
appear in the list of employees (Master List) prior to Contracts it executed with Stanfilco, respondent
their engagement as apprentices. cooperative is actually a manpower contractor
supplying employees to Stanfilco and for that reason, it
ISSUE is an employer of its owners-members working with
Whether or not Sebolinoet. al. attained status of Stanfilco. Thus, respondent cooperative should
regular employees and were illegally dismissed register itself with petitioner SSS as an employer and
make the corresponding report and remittance of
HELD premium contributions in accordance with the Social
YES. The petition is unmeritorious. Security Law of 1997. On 9 October 2002, respondent

76
cooperative, through its counsel, sent a reply to control test is the most important. In the case at bar, it
petitioner SSSs letter asserting that it is not an is the respondent cooperative which has the sole
employer because its owners-members are the control over the manner and means of performing the
cooperative itself; hence, it cannot be its own services under the Service Contracts with Stanfilco as
employer. well as the means and methods of work. Also, the
respondent cooperative is solely and entirely
ISSUE responsible for its owners-members, team leaders and
Whether or not there is an employer-employee other representatives at Stanfilco. All these clearly
relationship between [respondent cooperative] and its prove that, indeed, there is an employer-employee
[owners-members]. relationship between the respondent cooperative and
its owners-members.
HELD
Yes. In determining the existence of an employer- PHILIPPINE AIRLINES V. LIGAN
employee relationship, the following elements are GR 146408, February 29, 2008, Carpio Morales
considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever Petitioner Philippine Airlines as Owner, and Synergy
means; (3) the power of dismissal; and (4) the power Services Corporation (Synergy) as Contractor, entered
to control the workers conduct, with the latter into an Agreementwhereby Synergy undertook to
assuming primacy in the overall consideration.The provide loading, unloading, delivery of baggage and
most important element is the employers control of the cargo and other related services to and from
employees conduct, not only as to the result of the [petitioner]'s aircraft at the MactanStation.The
work to be done, but also as to the means and Agreement specified the CONTRACTOR shall furnish
methods to accomplish. The power of control refers to all the necessary capital, workers, loading, unloading
the existence of the power and not necessarily to the and delivery materials, facilities, supplies, equipment
actual exercise thereof. It is not essential for the and tools. And it expressly provided that Synergy was
employer to actually supervise the performance of "an independent contractor and . . . that there would
duties of the employee; it is enough that the employer be no employer-employee relationship between
has the right to wield that power. All the aforesaid CONTRACTOR and/or its employees on the one hand,
elements are present in this case. First. It is expressly and OWNER, on the other." Respondents, who appear
provided in the Service Contracts that it is the to have been assigned by Synergy to petitioner
respondent cooperative which has the exclusive filedcomplaints before the NLRC Regional Office VII at
discretion in the selection and engagement of the Cebu City against petitioner, Synergy and their
owners-members as well as its team leaders who will respective officials for underpayment, non-payment of
be assigned at Stanfilco. Second. Wages are defined premium pay for holidays, premium pay for rest days,
as remuneration or earnings, however designated, serviceincentive leave pay, 13th month pay and
capable of being expressed in terms of money, allowances, and for regularization of employment
whether fixed or ascertained, on a time, task, piece or status with petitioner, they claiming to be "performing
commission basis, or other method of calculating the duties for the benefit of petitioner since their job is
same, which is payable by an employer to an directly connected with its business. Labor Arbiter
employee under a written or unwritten contract of Dominador Almirante found Synergy an independent
employment for work done or to be done, or for service contractor and dismissed respondents' complaint for
rendered or to be rendered. In this case, regularization against petitioner, but granted their
the weekly stipends or the so-called shares in the money claims.
service surplus given by the respondent cooperative to
its owners-members were in reality wages, as the ISSUE
same were equivalent to an amount not lower than that Whether Synergy is a mere job-only contractor or a
prescribed by existing labor laws, rules and legitimate contractor?
regulations, including the wage order applicable to the
area and industry; or the same shall not be lower than RULING
the prevailing rates of wages. It cannot be doubted Synergy is a mere job-only contractor.
then that those stipends or shares in the service Section 5.Prohibition against labor-only contracting.
surplus are indeed wages, because these are given to Labor-only contracting is hereby declared prohibited.
the owners-members as compensation in rendering For this purpose, labor-only contracting shall refer to
services to respondent cooperatives client, an arrangement where the contractor or subcontractor
Stanfilco. Third. It is also stated in the above- merely recruits, supplies or places workers to perform
mentioned Service Contracts that it is the respondent a job, work or service for a principal, and any of the
cooperative which has the power to investigate, following elements are [sic] present:
discipline and remove the owners-members and its (i) The contractor or subcontractor does not have
team leaders who were rendering services at substantial capital or investment which relates to the
Stanfilco.Fourth. As earlier opined, of the four job, work or service to be performed and the
elements of the employer-employee relationship, the employees recruited, supplied or placed by such

77
contractor or subcontractor are performing activities subject to the control of the employer, except only as
which are directly related to the main business of the to the results of the work. In legitimate labor
principal; OR contracting, the law creates an employer-employee
(ii) The contractor does not exercise the right to control relationship for a limited purpose, i.e., to ensure that
over the performance of the work of the contractual the employees are paid their wages. The principal
employee. (Emphasis, underscoring and capitalization employer becomes jointly and severally liable with the
supplied) job contractor, only for the payment of the employees
Even if only one of the two elements is present then, wages whenever the contractor fails to pay the same.
there is labor-only contracting. Other than that, the principal employer is not
The control test element under the immediately-quoted responsible for any claim made by the employees.
paragraph echoes the prevailing jurisprudential trend
elevating such element as a primary determinant of The Contract of Services between SMC and Sunflower
employer-employee relationship in job contracting shows that the parties clearly disavowed the existence
agreements. of an employer-employee relationship between SMC
and private respondents. The language of a contract is
Petitioner in fact admitted that it fixes the work not, however, determinative of the parties relationship;
schedule of respondents as their work was dependent rather it is the totality of the facts and surrounding
on the frequency of plane arrivals. And as the NLRC circumstances of the case.A party cannot dictate, by
found, petitioner's managers and supervisors the mere expedient of a unilateral declaration in a
approved respondents' weekly work assignments and contract, the character of its business, i.e., whether as
respondents and other regular PAL employees were labor-only contractor or job contractor, it being crucial
all referred to as "station attendants" of the cargo that its character be measured in terms of and
operation and airfreight services of petitioner. determined by the criteria set by statute.
Respondents having performed tasks which are
usually necessary and desirable in the air Furthermore, what appears is that Sunflower does not
transportation business of petitioner, they should be have substantial capitalization or investment in the
deemed its regular employees and Synergy as a labor- form of tools, equipment, machineries, work premises
only contractor. and other materials to qualify it as an independent
contractor. On the other hand, it is gathered that the
SAN MIGUEL CORPORATION V. ABALLA lot, building, machineries and all other working tools
G.R. No. 149011, June 28, 2005, Carpio Morales utilized by private respondents in carrying out their
tasks were owned and provided by SMC. from the job
San Miguel Corporation entered into a contract of description provided by SMC itself, the work assigned
services with Sunflower Cooperative for the rendition to private respondents was directlyrelated to the
of Messengerial, Janitorial, Shrimp Harvesting, aquaculture operations of SMC. Undoubtedly, the
Sanitation, Washing, Cold Storage activities. Pertinent nature of the work performed by private respondents in
provisions of the contract involve: 1. The cooperative shrimp harvesting, receiving and packing formed an
employs the necessary personnel and provides integral part of the shrimp processing operations of
adequate equipment, materials, tools and apparatus; SMC. As for janitorial and messengerial services, that
2. The cooperative has the entire charge, control and they are considered directly related to the principal
supervision of the work and services; 3. No business of the employerhas been jurisprudentially
employment relationship exists between the SMC and recognized.
the cooperative; 4. The cooperative undertakes to pay
the salary of the member-workers; 5. Unless sooner Furthermore, Sunflower did not carry on an
terminated, the contract will be deemed renewed on a independent business or undertake the performance of
month-to-month basis until terminated. Several its service contract according to its own manner and
employees were engaged by sunflower cooperative. method, free from the control and supervision of its
Soon, such employees demanded recognition as principal, SMC, its apparent role having been merely to
regular employees of SMC, alleging that they are recruit persons to work for SMC.
under the direct control and supervision of SMC
supervisors. MERALCO INDUSTRIAL ENGINEERING SERVICES
V. NLRC
ISSUE G.R. 145402, March 14, 2008, Chico-Nazario
Does direct control and supervision of the Principal
Contractee convert Job Contractng into LO Meralco and the private respondent executed a
contracting? contractwhere the latter would supply the petitioner
janitorial services,which include labor, materials, tools
RULING: Yes. The test to determine the existence of and equipment, as well assupervision of its assigned
independent contractorship is whether one claiming to employees, at Meralcos RockwellThermal Plant in
be an independent contractor has contracted to do the Makati City.The 49 employees lodged a Complaint for
work according to his own methods and without being illegaldeduction, underpayment, non-payment of

78
overtime pay, legalholiday pay, premium pay for (AFSISI) and MERALCO took effect, terminating the
holiday and rest day and nightdifferentials against the previous security service agreement with ASDAI.
private respondent before the LA. By virtue of RA Except as to the number of security guards, the
6727, the contract between Meralco andthe private amount to be paid the agency, and the effectivity of the
respondent was amended to increase the agreement, the terms and conditions were
minimumdaily wage per employee. 2 months after the substantially identical with the security service
amendment of thecontract, Meralco sent a letter to agreement with ASDAI. The individual respondents
private respondent informingthem that at the end of amended their complaint to implead AFSISI as party
business hours of Jan. 31, 1990, it wouldbe respondent and to allege that AFSISI terminated their
terminating contract entered into with the services on August 6, 1992 without notice and just
privaterespondents. On the said date, the cause and therefore guilty of illegal dismissal. For the
complainants were pulled outfrom their work. The first time in appeal before the Court of Appeals, the
complainants amended their complaint toinclude the individual respondents alleged that MERALCO is their
charge of illegal dismissal and to implead Meralco asa employer
party respondent.The LA dismissed the complaint. On
appeal, the NLRCaffirmed the decision of the LA with ISSUES
the modification that Meralcowas solidarily liable with 1. Whether or not the individual respondents are
the private respondents. The CA on theother hand, regular employees of MERALCO
modified the Decision of the NLRC and held Meralcoto 2. Whether or not MERALCO is their employer
be solidarily liable with the private respondent for 3. Whether or not MERALCO can be held solidarily
thesatisfaction of the laborers separation pay. liable with AFSISI

ISSUE HELD
Whether Meralco should be liable for the payment of (1) NO. The individual respondents cannot be
the dismissed laborers separation pay considered as regular employees of the MERALCO
for, although security services are necessary and
RULING desirable to the business of MERALCO, it is not
The CA used Art. 109 of the Labor Code to directly related to its principal business and may even
holdMeralcosolidarily liable with the private respondent be considered unnecessary in the conduct of
as regard tothe payment of separation pay. However, MERALCOs principal business, which is the
the SC ruled that Art.109 should be read in relation to distribution of electricity.
Art. 106 and 107 of the LC.Thus, an indirect employer
can only be held liable with theindependent contractor (2) NO. As to the provision in the agreement that
or subcontractor in the event that thelatter fails to pay MERALCO reserved the right to seek replacement of
the wages of its employees. While it is true thatthe any guard whose behavior, conduct or appearance is
petitioner was the indirect employer of the not satisfactory, such merely confirms that the power
complainants, itcannot be held liable in the same way to discipline lies with the agency. It is a standard
as the employer in everyrespect. Meralco may be stipulation in security service agreements that the
considered an indirect employer onlyfor purposes of client may request the replacement of the guards to it.
unpaid wages. Service-oriented enterprises, such as the business of
providing security services, generally adhere to the
MANILA ELECTRIC COMPANY v. ROGELIO business adage that "the customer or client is always
BENAMIRA right" and, thus, must satisfy the interests, conform to
G.R. No. 145271, July 14, 2005, Austria-Martinez the needs, and cater to the reasonable impositions of
its clients.
The individual respondents are licensed security Neither is the stipulation that the agency cannot pull
guards formerly employed by Peoples Security, Inc. out any security guard from MERALCO without its
(PSI) and deployed as such at MERALCOs head consent an indication of control. It is simply a security
office. On November 30, 1990, the security service clause designed to prevent the agency from
agreement between PSI and MERALCO was unilaterally removing its security guards from their
terminated. Thereafter, fifty-six of PSIs security assigned posts at MERALCOs premises to the latters
guards, including herein eight individual respondents, detriment.
filed a complaint for unpaid monetary benefits against
PSI and MERALCO. Meanwhile, the security service The clause that MERALCO has the right at all times to
agreement between respondent Armed Security & inspect the guards of the agency detailed in its
Detective Agency, Inc., (ASDAI) and MERALCO took premises is likewise not indicative of control as it is not
effect on December 1, 1990. Subsequently, the a unilateral right. The agreement provides that the
individual respondents were absorbed by ASDAI and agency is principally mandated to conduct inspections,
retained at MERALCOs head office. On July 25, 1992, without prejudice to MERALCOs right to conduct its
the security service agreement between respondent own inspections.
Advance Forces Security & Investigation Services, Inc.

79
(3) YES. The fact that there is no actual and direct employer of the respondents, with CAMPCO acting
employer-employee relationship between MERALCO only as the agent or intermediary of petitioner. In 1993,
and the individual respondents does not exonerate when CAMPCO wasestablished and the Service
MERALCO from liability as to the monetary claims of Contract between petitioner and CAMPCO was
the individual respondents. When MERALCO entered into, CAMPCO onlyhad P6,600.00 paid-up
contracted for security services with ASDAI as the capital, which could hardly be considered substantial.
security agency that hired individual respondents to
work as guards for it, MERALCO became an indirect (Refer to the Doctrine mentioned above, which is a
employer of individual respondents pursuant to Article stronger indication about the labor-only contracting)
107 of the Labor Code. When ASDAI as contractor
failed to pay the individual respondents, MERALCO as ALVIADO v. PROCTER & GAMBLE PHILS., INC.
principal becomes jointly and severally liable for the G.R. No. 160506, March 9, 2010, Del Castillo
individual respondents wages, under Articles 106 and
109 of the Labor Code Petitioners worked as merchandisers of P&G. They all
individually signed employment contracts with either
ASDAI is held liable by virtue of its status as direct Promm-Gem or SAPS for periods of more or less five
employer, while MERALCO is deemed the indirect months at a time.They were assigned at different
employer of the individual respondents for the purpose outlets, supermarkets and stores where they handled
of paying their wages in the event of failure of ASDAI all the products of P&G. They received their wages
to pay them. This statutory scheme gives the workers from Promm-Gem or SAPS. Subsequently, petitioners
the ample protection consonant with labor and social filed a complaint against P&G for regularization,
justice provisions of the 1987 Constitution. However, service incentive leave pay and other benefits with
this is without prejudice to the right of reimbursement. damages. The complaint was later amendedto include
the matter of their subsequent dismissal. The Labor
DOLE PHILIPPINES vs. ESTEVA Arbiter dismissed the complaint for lack of merit and
G.R. No. 161115, November 30, 2006 ruled that there was no employer-employee
relationship between petitioners and P&G. He found
Doctrine: CAMPCO, the alleged contractor, did not that the selection and engagement of the petitioners,
carry out an independent business from petitioner. It the payment of their wages, the power of dismissal
was precisely established to render services to and control with respect to the means and methods by
petitioner to augment its workforce during peak which their work was accomplished, were all done and
seasons. Petitionerwas its only client. Even as exercised by Promm-Gem/SAPS. He further found that
CAMPCO had its own office and office equipment, Promm-Gem and SAPS were legitimate independent
these were mainly usedfor administrative purposes; job contractors. On appeal to the NLRC, it affirmed the
the tools, machineries, and equipment actually used by decision of the LA.
CAMPCOmembers when rendering services to the
petitioner belonged to the latter. This is indicative of a ISSUE
labor-only contracting. Whether or not the respondent is the employer of the
petitioner.
Dole Philippines and CAMPCO entered into a Service
Agreement. Respondents argued that they should be HELD
considered regular employees of petitioner given that: In order to determine whether P&G is the employer of
1.they were performing jobs that were usually petitioners, it is necessary to first determine whether
necessary and desirable in the usual business Promm-Gem and SAPS are labor-only contractors or
of petitioner; 2. petitioner exercised control over legitimate job contractors. There is "labor-only"
respondents, not only as to the results, but also as contracting where the person supplying workers to an
tothe manner by which they performed their assigned employer does not have substantial capital or
tasks; and 3. CAMPCO, a labor-only contractor,was investment in the form of tools, equipment,
merely a conduit of petitioner. As regular employees of machineries, work premises, among others, and the
petitioner, respondents asserted that theywere entitled workers recruited and placed by such person are
to security of tenure and those placed on stay home performing activities which are directly related to the
status for more than six monthshad been principal business of such employer. The Court held
constructively and illegally dismissed. that Promm-Gem cannot be regarded as labor-only
contractor but a legitimate independent contractor
ISSUE because the financial statement of Promm-Gem shows
Whether or not CAMPCO is a legitimate contractor and that it has authorized capital stock of P1 million and a
if no, whether or not DOLE is liable as direct employer paid-in capital, or capital available for operations, of
P500,000.00 as of 1990.
RULING
NO. CAMPCO was a labor-only contractor and, thus, On the other hand, the Articles of Incorporation of
petitioner is the real SAPS shows that it has a paid-in capital of only P31,

80
250.00. There is no other evidence presented to show its implementing rules. To reiterate, no evidence or
how much its working capital and assets are. argument questions the companys basic objective of
Considering that SAPS has no substantial capital or achieving greater economy and efficiency of
investment and the workers it recruited are performing operations. This, to our mind, goes a long way to
activities which are directly related to the principal negate the presence of bad faith. No evidence likewise
business of P&G, the court held that SAPS is engaged stands before us showing that the outsourcing has
in "labor-only contracting". The contractor is resulted in a reduction of work hours or the splitting of
considered merely an agent of the principal employer the bargaining unit effects that under the implementing
and the latter is responsible to the employees of the rules of Article 106 of the Labor Code can make a
labor-only contractor as if such employees had been contracting arrangement illegal.
directly employed by the principal employer.
NO. It is in the appreciation of these forwarder services
TEMIC AUTOMOTIVE PHILIPPINES, INC. v. TEMIC as one whole package of inter-related services that we
AUTOMOTIVE PHILIPPINES, INC. EMPLOYEES discern a basic misunderstanding that results in the
UNION-FFW error of equating the functions of the forwarders
G.R. No. 186965, December 23, 2009, Brion employees with those of regular rank-and-file
employees of the company. A clerical job, for example,
Since 1998, the petitioner contracts out some of the may similarly involve typing and paper pushing
work in the warehouse department, specifically those activities and may be done on the same company
in the receiving and finished goods sections, to three products that the forwarders employees and company
independent service providers or forwarders. These employees may work on, but these similarities do not
forwarders also have their own employees who hold necessarily mean that all these employees work for the
the positions of clerk, material handler, system company. The regular company employees, to be
encoder and general clerk. sure, work for the company under its supervision and
control, but forwarder employees work for the
This outsourcing arrangement gave rise to a union forwarder in the forwarders own operation that is itself
grievance on the issue of the scope and coverage of a contracted work from the company. The company
the collective bargaining unit, specifically to the controls its employees in the means, method and
question of whether or not the functions of the results of their work, in the same manner that the
forwarders employees are functions being performed forwarder controls its own employees in the means,
by the regular rank-and-file employees covered by the manner and results of their work. Complications and
bargaining unit. The union thus demanded that the confusion result because the company at the same
forwarders' employees be absorbed into the time controls the forwarder in the results of the latters
petitioner's regular employee force and be given work, without controlling however the means and
positions within the bargaining unit. The petitioner, on manner of the forwarder employees work.
the other hand, on the premise that the contracting
arrangement with the forwarders is a valid exercise of COCA-COLA BOTTLERS PHILS., INC. vs. ALAN M.
its management prerogative AGITO, et al
GR No. 179546, February 13, 2009
ISSUE
1. Whether or not the company validly contracted Petitioner (Coke) is a domestic corporation engaged in
out or outsourced the services involving manufacturing, bottling and distributing soft drink
forwarding, packing, loading and clerical beverages and other allied products. Respondents
activities related thereto. were salesmen assigned at Coke Lagro Sales Office
2. Whether or not the functions of the forwarders for years but were not regularized. Coke averred that
employees are functions being performed by respondents were employees of Interserve who were
regular rank-and-file employees covered by tasked to perform contracted services in accordance
the bargaining unit with the provisions of the Contract of Services
executed between Coke and Interserve on 23 March
HELD 2002. Said Contract constituted legitimate job
YES. In Meralco v. Quisumbing, we joined this contracting, given that the latter was a bona fide
universal recognition of outsourcing as a legitimate independent contractor with substantial capital or
activity when we held that a company can determine in investment in the form of tools, equipment, and
its best judgment whether it should contract out a part machinery necessary in the conduct of its business.
of its work for as long as the employer is motivated by
good faith; the contracting is not for purposes of To prove the status of Interserve as an independent
circumventing the law; and does not involve or be the contractor, petitioner presented the following pieces of
result of malicious or arbitrary action. Our own evidence: (1) the Articles of Incorporation of Interserve;
examination of the agreement shows that the (2) the Certificate of Registration of Interserve with the
forwarding arrangement complies with the Bureau of Internal Revenue; (3) the Income Tax
requirements of Article 106[26] of the Labor Code and Return, with Audited Financial Statements, of

81
Interserve for 2001; and (4) the Certificate of (SNMI). Since SNMI was formed to do the sales and
Registration of Interserve as an independent job marketing work, SMART abolished the CSMG/FSD,
contractor, issued by the Department of Labor and Astorgas division. Despite the abolition of the
Employment (DOLE). CSMG/FSD, Astorga continued reporting for work.
SMART issued a memorandum advising Astorga of
As a result, petitioner asserted that respondents were the termination of her employment on ground of
employees of Interserve, since it was the latter which redundancy. Astorga states that the justification
hired them, paid their wages, and supervised their advanced by SMART is not true because there was no
work, as proven by: (1) respondents Personal Data compelling economic reason for redundancy.
Files in the records of Interserve; (2) respondents
Contract of Temporary Employment with Interserve; ISSUE
and (3) the payroll records of Interserve. Whether or not the cause for Astorgas dismissal is
valid
ISSUES
1. Whether or not Inteserve is a labor-only contractor; RULING
2. Whether or not an employer-employee relationship Yes. Contrary to her claim, an employer is not
exists between petitioner Coca-Cola Bottlers Phils. Inc. precluded from adopting a new policy conducive to a
and respondents. more economical and effective management even if it
is not experiencing economic reverses. Neither does
HELD the law require that the employer should suffer
1. Yes. In sum, Interserve did not have financial losses before he can terminate the services of
substantial capital or investment in the form of the employee on the ground of redundancy.
tools, equipment, machineries, and work
premises; and respondents, its supposed Supreme Court agreed with the CA that the
employees, performed work which was directly organizational realignment introduced by SMART,
related to the principal business of petitioner. It which culminated in the abolition of CSMG/FSD and
is, thus, evident that Interserve falls under the termination of Astorgas employment was an honest
definition of a labor-only contractor, under effort to make SMARTs sales and marketing
Article 106 of the Labor Code; as well as departments more efficient and competitive. As the CA
Section 5(i) of the Rules Implementing Articles had taken pains to elucidate:
106-109 of the Labor Code, as amended. It is
also apparent that Interserve is a labor-only x x x a careful and assiduous review of the records will
contractor under Section 5(ii) of the Rules yield no other conclusion than that the reorganization
Implementing Articles 106-109 of the Labor undertaken by SMART is for no purpose other than its
Code, as amended, since it did not exercise declared objective as a labor and cost savings
the right to control the performance of the work device. Indeed, this Court finds no fault in SMARTs
of respondents. decision to outsource the corporate sales market to
2. Yes. With the finding that Interserve was SNMI in order to attain greater productivity. [Astorga]
engaged in prohibited labor-only contracting, belonged to the Sales Marketing Group under the
petitioner shall be deemed the true employer Fixed Services Division (CSMG/FSD), a distinct sales
of respondents. As regular employees of force of SMART in charge of selling SMARTs
petitioner, respondents cannot be dismissed telecommunications services to the corporate
except for just or authorized causes, none of market. SMART, to ensure it can respond quickly,
which were alleged or proven to exist in this efficiently and flexibly to its customers requirement,
case, the only defense of petitioner against the abolished CSMG/FSD and shortly thereafter assigned
charge of illegal dismissal being that its functions to newly-created SNMI Multimedia
respondents were not its employees. Incorporated, a joint venture company of SMART and
NTT of Japan, for the reason that CSMG/FSD does
SMART COMMUNICATIONS vs. ASTORGA not have the necessary technical expertise required for
G.R. No. 148132, January 28, 2008, Nachura the value added services. By transferring the duties of
CSMG/FSD to SNMI, SMART has created a more
Regina M. Astorga (Astorga) was employed by competent and specialized organization to perform the
respondent Smart Communications, Incorporated work required for corporate accounts. It is also relieved
(SMART) as District Sales Manager of the Corporate SMART of all administrative costs management, time
Sales Marketing Group/ Fixed Services Division and money-needed in maintaining the
(CSMG/FSD). SMART launched an organizational CSMG/FSD. The determination to outsource the duties
realignment to achieve more efficient operations. Part of the CSMG/FSD to SNMI was, to Our mind, a sound
of the reorganization was the outsourcing of the business judgment based on relevant criteria and is
marketing and sales force. Thus, SMART entered into therefore a legitimate exercise of management
a joint venture agreement with NTT of Japan, and prerogative.
formed SMART-NTT Multimedia, Incorporated

82
Indeed, out of our concern for those lesser distinct legal personality from Manila Water, and it was
circumstanced in life, this Court has inclined towards duly registered as an independent contractor before
the worker and upheld his cause in most of his the DOLE.
conflicts with his employer.This favored treatment is
consonant with the social justice policy of the ISSUE
Constitution. But while tilting the scales of justice in Whether FCCSI was a labor-only contractor and that
favor of workers, the fundamental law also guarantees respondent bill collectors are employees of petitioner
the right of the employer to reasonable returns for his Manila Water.
investment. In this light, we must acknowledge the
prerogative of the employer to adopt such measures RULING
as will promote greater efficiency, reduce overhead Yes. FCCSI was a labor-only contractor and that
costs and enhance prospects of economic gains, albeit respondent bill collectors are employees of petitioner
always within the framework of existing Manila Water.
laws. Accordingly, we sustain the reorganization and
redundancy program undertaken by SMART. "Contracting" or "subcontracting" refers to an
arrangement whereby a principal agrees to put out or
MANILA WATER V. DALUMPINES farm out with a contractor or subcontractor the
G.R. No. 175501, October 4, 2010, Nachura performance or completion of a specific job, work, or
service within a definite or predetermined period,
By virtue of Republic Act No. 8041, otherwise known regardless of whether such job, work, or service is to
as the "National Water Crisis Act of 1995," the be performed or completed within or outside the
Metropolitan Waterworks and Sewerage System premises of the principal.
(MWSS) was given the authority to enter into
concession agreements allowing the private sector in Department Order No. 18-02, Series of 2002,
its operations. Petitioner Manila Water Company, Inc. enunciates that labor-only contracting refers to an
(Manila Water) was one of two private concessionaires arrangement where the contractor or subcontractor
contracted by the MWSS to manage the water merely recruits, supplies, or places workers to perform
distribution system in the east zone of Metro Manila. a job, work, or service for a principal, and any of the
Before the expiration of the contract of services, the following elements are present: (i) the contractor or
121 bill collectors formed a corporation duly registered subcontractor does not have substantial capital or
with the Securities and Exchange Commission (SEC) investment which relates to the job, work, or service to
as the "Association Collectors Group, Inc." (ACGI). be performed and the employees recruited, supplied,
ACGI was one of the entities engaged by Manila Water or placed by such contractor or subcontractor are
for its courier service. However, Manila Water performing activities which are directly related to the
contracted ACGI for collection services only in its main business of the principal; or (ii) the contractor
Balara Branch. Manila Water entered into a service does not exercise the right to control the performance
agreement with respondent First Classic Courier of the work of the contractual employee.
Services, Inc. (FCCSI) also for its courier needs.
Earlier, in a memorandum, FCCSI gave a deadline for FCCSI has no sufficient investment in the form of
the bill collectors who were members of ACGI to tools, equipment and machinery to undertake contract
submit applications and letters of intent to transfer to services for Manila Water involving a fleet of around
FCCSI. On various dates, individual respondents were 100 collectors assigned to several branches and
terminated from employment. Manila Water no longer covering the service area of Manila Water customers
renewed its contract with FCCSI because it decided to spread out in several cities/towns of the East Zone.
implement a "collectorless" scheme whereby Manila The only rational conclusion is that it is Manila Water
Water customers would instead remit payments that provides most if not all the logistics and equipment
through "Bayad Centers." including service vehicles in the performance of the
contracted service, notwithstanding that the contract
The aggrieved bill collectors individually filed between FCCSI and Manila Water states that it is the
complaints for illegal dismissal, unfair labor practice, Contractor which shall furnish at its own expense all
damages, and attorneys fees, with prayer for materials, tools and equipment needed to perform the
reinstatement and backwages against petitioner tasks of collectors.
Manila Water and respondent FCCSI. The complaints
were consolidated and jointly heard. Petitioner Manila BABAS v. LORENZO SHIPPING CORPORATION
Water, for its part, denied that there was an employer- G.R. No. 186091, December 15, 2010, Nachura
employee relationship between its company and
respondent bill collectors. Based on the agreement Lorenzo Shipping Corporation (LSC), a shipping
between FCCSI and Manila Water, respondent bill company, entered into an agreement with Best
collectors are the employees of the former, as it is the Manpower Services, Inc. (BMSI) wherein BMSI
former that has the right to select/hire, discipline, undertook to provide maintenance and repair services
supervise, and control. FCCSI has a separate and to LSCs container vans, heavy equipment, trailer

83
chassis, and generator and to provide checkers to business. Logically, when petitioners were assigned by
inspect all containers received for loading to and/or BMSI to LSC, BMSI acted merely as a labor-only
unloading from its vessels. Simultaneous with the contractor.Lastly, as found by the NLRC, BMSI had no
execution of the Agreement, LSC leased its other client except for LSC, and neither BMSI nor LSC
equipment, tools, and tractors to BMSI. BMSI then refuted this finding, thereby bolstering the NLRC
hired petitioners on various dates to work at LSC as finding that BMSI is a labor-only contractor.
checkers, welders, utility men, clerks, forklift operators,
motor pool and machine shop workers, technicians, Consequently, the workers that BMSI supplied to LSC
trailer drivers, and mechanics. Six years later, LSC became regular employees of the latter.
entered into another contract with BMSI, this time, a
service contract. Petitioners filed with the Labor a TENG V. PAHAGAC
complaint for regularization against LSC and BMSI. G.R. No. 169704
Later, LSC terminated their Agreement which led to
petitioners losing employment. Respondent was hired for the purpose of measuring
the volume of fishes caught by the petitioner company,
ISSUE the counting/measuring was done using the tools and
Is BMSI engaged in labor-only contracting, entitling equipment of petitioner and even through his express
petitioners to be considered as employees of LSC? direction. However, after sometime Teng terminated
the services of Pahagac and on several occasions
RULING even doubted the measurements given by the
Yes. A person is considered engaged in legitimate job respondent which resulted to his termination of his
contracting or subcontracting if the following conditions services.
concur:(a) The contractor carries on a distinct and
independent business and undertakes the contract ISSUE
work on his account under his own responsibility WON there is an EE-ER relationship
according to his own manner and method, free from
the control and direction of his employer or principal in RULING
all matters connected with the performance of his work Yes, The element of control is present in this case.
except as to the results thereof;(b) The contractor has Teng not only owned the tools and equipment, he
substantial capital or investment; and(c) The directed how the respondent workers were to perform
agreement between the principal and the contractor or their job as checkers; they, in fact, acted as Teng's
subcontractor assures the contractual employees' eyes and ears in every fishing expedition. furthermore
entitlement to all labor and occupational safety and it was his company that issued to the respondent
health standards, free exercise of the right to self- workers identification cards (IDs) bearing their names
organization, security of tenure, and social welfare as employees and Teng's signature as the employer.
benefits. Generally, in a business establishment, IDs are issued
to identify the holder as a bonafide employee of the
Given the above standards, we sustain the petitioners issuing entity. For the 13 years that the respondent
contention that BMSI is engaged in labor-only workers worked for Teng, they received wages on a
contracting. First, petitioners worked at LSCs regular basis, in addition to their shares in the fish
premises, and nowhere else. Other than the provisions caught.
of the Agreement, there was no showing that it was
BMSI which established petitioners working procedure
and methods, which supervised petitioners in their CLASSES OF EMPLOYEE
work, or which evaluated the same. There was
absolute lack of evidence that BMSI exercised control MAGIS YOUNG ACHIEVERS LEARNING CENTER
over them or their work, except for the fact that AND MRS. VIOLETA T. CARIO V. ADELAIDA P.
petitioners were hired by BMSI.Second, LSC was MANALO
unable to present proof that BMSI had substantial G.R No. 178835, February 13, 2009, Nachura
capital. The record before us is bereft of any proof
pertaining to the contractors capitalization, nor to its On April 18, 2002, Adelaida Manalo was hired as a
investment in tools, equipment, or implements actually teacher and acting princiapl of Magis Young Achievers
used in the performance or completion of the job, Learning Center. It appears that, on March 29, 2003,
work, or service that it was contracted to render. What Manalo wrote a letter of resignation to Magis
is clear was that the equipment used by BMSI were directress Violeta Cario but, on March 31, 2003,
owned by, and merely rented from, LSC.Third, Manalo received a letter of termination from Magis so
petitioners performed activities which were directly Manalo filed a comlaint for illegal dismissal and non-
related to the main business of LSC. The work of payment of 13th month pay with prayer for
petitioners as checkers, welders, utility men, drivers, reinstatement. Magis, among others, claimed that
and mechanics could only be characterized as part of, Manalo was legally terminated becayse the 1-year
or at least clearly related to, and in the pursuit of, LSCs probationary periof had already lapsed and she failed
84
to meet the criteria set by the school pursuant to the
Manual of Regulation for Private Schools.The LA However, since Magis failed to show by competent
dismissed the complaint. NLRC reversed the decision. evidence that Manalo did not meet the standards set
MR was denied. CA affirmed. MR was denied. Hence, by the school, it can be concluded that her termination
this petition. before the end of her probationary period.

ISSUE PIER 8 ARRASTRE & STEVEDORING SERVICES V.


Is Adelaida Manalo a permanent employee? BOCLOT
G .R . No . 1 73 8 49 , September 28, 2007, Chico-
HELD Nazario
No. The 6-month limit on the term of probationary
employment does not apply to all classes of Boclot was hired by PASSI to perform the functions of
occupations. For academic personnel in private a stevedore. Later on, Boclot filed Complaint with the
schools, colleges, and universities, probationary Labor Arbiter claiming regularization; payment of
employment is governed by Sec. 92 of the 1992 service incentive leave and 13th month pays; moral,
Manual of Regulations for Private Schools, exemplary and actual damages; and attorneys fees.
supplemented by DOLE-DECS-CHED-TESDA Order He alleged that he was hired by PASSI in October
No. 1 dated February 7, 1996 and Sec. 4.m(4)[c] of the 1999 and was issued company ID No. 304, a PPA
Manual. For academic personnel in private elementary Pass and SSS documents. In fact, respondent
and secondary schools, it is only after one has contended that he became a regular employee by April
satisfactorily completed the probationary period of 2000, since it was his sixth continuous month in
three (3) school years and is rehired that he acquires service in PASSIs regular course of business. He
full tenure as a regular or permanent employee. argued on the basis of Articles 280 and 281 of the
Labor Code. He maintains that under paragraph 2 of
Pursuant to Section 93 of the Manual, no vested right Article 280, he should be deemed a regular employee
to a permanent appointment shall accrue until the having rendered at least one year of service with the
employee has completed the prerequisite three-year company.
period necessary for the acquisition of a permanent
status. Of course, the mere rendition of service for ISSUE
three consecutive years does not automatically ripen Whether or not he has attained regular status .
into a permanent appointment. It is also necessary that
the employee be a full-time teacher, and that the RULING
services he rendered are satisfactory. Yes. Though usual and necessary, his employment is
dependent on availability of work SC took judicial
All this does not mean that academic personnel cannot notice that it is an industry practice in port services to
acquire permanent employment status earlier than hire reliever stevedores in order to ensure smooth-
after the lapse of three years. The period of probation flowing 24-hour stevedoring and arrastre operations in
may be reduced if the employer, convinced of the the port area. No doubt, serving as a stevedore,
fitness and efficiency of a probationary employee, respondent performs tasks necessary or desirable to
voluntarily extends a permanent appointment even the usual business of petitioners. However, it should
before the three-year period ends. be deemed part of the nature of his work that he can
only work as a stevedore in the absence of the
Nonetheless, teachers on probationary employment employee regularly employed for the very same
enjoy security of tenure. probationary employees enjoy function.
security of tenure during the term of their probationary
employment. As such, they cannot be removed except Moreover, respondent does not contest that he was
for cause as provided by law, or if at the end of every well aware that he would only be given work when
yearly contract during the three-year period, the there are absent or unavailable employees.
employee does not meet the reasonable standards set Respondent also does not allege, nor is there any
by the employer at the time of engagement. But this showing, that he was disallowed or prevented from
guarantee of security of tenure applies only during the offering his services to other cargo handlers in the
period of probation. Once that period expires, the other piers at the North Harbor other than petitioners.
constitutional protection can no longer be invoked. As aforestated, the situation of respondent is akin to
that of a seasonal or project or term employee, albeit
In this case, Manalo rendered service only from April on a daily basis.
18, 2002, until March 31, 2003. She has not completed
the requisite three-year period of probationary Under the CBA, he qualifies as a regular employee
employment She cannot, by right, claim permanent The Supreme Court still finds respondent to be a
status. Manalos appointment as acting principal is regular employee on the basis of pertinent provisions
merely temporary, or one that is good until another under the CBA between PASSI and its Workers union,
appointment is made to take its place. wherein it was stated that it agrees to convert to

85
regular status all incumbent probationary or casual petitioner Elaine M. Alipio as regular staff nurse
employees and workers in the Company who have without loss of seniority rights.
served the Company for an accumulated service term
of employment of not less than six (6) months from his ISSUE
original date of hiring. Respondent assents that he is Whether or not Alipio is a regular employee
not a member of the union, as he was not recognized RULING
by PASSI as its regular employee, but this Court notes Under Article 280 of the Labor Code, an employment
that PASSI adopts a union-shop agreement, culling is deemed regular when the activities performed by the
from Article II of its CBA. Under a union-shop employee are usually necessary or desirable in the
agreement, although nonmembers may be hired, an usual business of the employer. However, any
employee is required to become a union member after employee who has rendered at least one year of
a certain period, in order to retain employment. This service, even though intermittent, is deemed regular
requirement applies to present and future employees. with respect to the activity performed and while such
The same article of the CBA stipulates that activity actually exists.
employment in PASSI cannot be obtained without prior
membership in the union. Hence, applying the In this case, records show that Alipio's services were
foregoing provisions of the CBA, respondent should be engaged by the hotel intermittently from 1993 up to
considered a regular employee after six months of 1998. Her services as a reliever nurse were
accumulated service. Having rendered 228.5 days, or undoubtedly necessary and desirable in the hotel's
eight months of service to petitioners since 1999, then business of providing comfortable accommodation to
respondent is entitled to regularization by virtue of the its guests. In any case, since she had rendered more
said CBA provisions. than one year of intermittent service as a reliever
nurse at the hotel, she had become a regular
THE PENINSULA MANILA, ROLF PFISTERER AND employee as early as December 12, 1994. Lastly, per
BENILDA QUEVEDO-SANTOS, vs. ELAINE M. the hotel's own Certification dated April 22, 1997, she
ALIPIO was already a "regular staff nurse" until her dismissal.
G.R. No. 167310, June 17, 2008, Quisumbing
Being a regular employee, Alipio enjoys security of
Petitioner is a corporation engaged in the hotel tenure. Her services may be terminated only upon
business. Co-petitioners Rolf Pfisterer and compliance with the substantive and procedural
BenildaQuevedo-Santos were the general manager requisites for a valid dismissal: (1) the dismissal must
and human resources manager, respectively, of the be for any of the causes provided in Article 28212 of
hotel at the time of the controversy. the Labor Code; and (2) the employee must be given
an opportunity to be heard and to defend himself.13
Respondent Elaine M. Alipio was hired merely as a
reliever nurse in the company's 24-hour clinic. ROWELL INDUSTRIAL CORPORATION vs. HON.
However, she had been performing the usual tasks COURT OF APPEALS and JOEL TARIPE
and functions of a regular nurse since the start of her G.R. No. 167714, March 7, 2007, Chico-Nazario
employment on December 11, 1993. Hence, after
about four years of employment in the hotel, she Petitioner Rowell Industrial is engaged in
inquired why she was not receiving her 13th month manufacturing tin cans for packaging consumer
pay. Alipio was paid P8,000 as her 13th month pay for products. Respondent Joel Taripe was employed by
1997. Alipio likewise requested for the payment of her petitioner as a rectangular power press machine
13th month pay for 1993 to 1996, but her request was operator. Taripe alleged that upon employment, he
denied. was made to sign a document, which was not fully
explained to him but was a condition for him to be
Alipio was informed by a fellow nurse that she can only hired and for which he was not given a copy.
report for work after meeting up with petitioner Santos.
When Alipio met with Santos, Alipio was asked Apparently, the contract of employment was only good
regarding her payslip vouchers. She told Santos that for a period of five (5) months unless it is renewed by
she made copies of her payslip vouchers because mutual consent. Along with other contractual
Peninsula does not give her copies of the same. employees, he was hired only to meet the increase in
Santos was peeved with Alipio's response because the demand for packaging materials for the Christmas
latter was allegedly not entitled to get copies of her season and to build up stock levels for the early part of
payslip vouchers. Santos likewise directed Alipio not to the year. Taripe filed a complaint for regularization and
report for work anymore. holiday pay.
Aggrieved, Alipio filed a complaint for illegal dismissal
against the petitioners. The LA dismissed his complaint. The NLRC reversed
Private respondents The Peninsula Manila and the LA. The CA affirmed the resolution of the NLRC.
BenildaQuevedo-Santos are ordered to reinstate
ISSUE

86
Is Taripe a Regular Employee? a "work pool" from which petitioner chose persons to
be given specific assignments at its discretion, and
HELD were thus under its direct supervision and control
YES. There are two kinds of regular employees: (1) regardless of nomenclature.
those who are engaged to perform activities which are
USUALLY NECESSARY OR DESIRABLE in the For its part, petitioner alleged in its position paper that
USUAL BUSINESS or TRADE of the employer; and the respondents were PAs who basically assist in the
(2) those who have rendered at least one year of conduct of a particular program ran by an anchor or
service, whether continuous or broken, with respect to talent. Among their duties include monitoring and
the activity in which they are employed. Taripe receiving incoming calls from listeners and field
belonged to the first category. reporters and calls of news sources; generally, they
perform leg work for the anchors during a program or a
The purported contract of employment providing that particular production. They are considered in the
Taripewas hired as contractual employee for five (5) industry as "program employees" in that, as
months only, cannot prevail over the undisputed fact distinguished from regular or station employees, they
that he was hired to perform the function of power are basically engaged by the station for a particular or
press operator, a function necessary or desirable in specific program broadcasted by the radio station.
petitioners business of manufacturing tin cans. Petitioner asserted that as PAs, the complainants were
Petitioners contention that the four (4) months length issued talent information sheets which are updated
of service of Taripe did not grant him a regular status from time to time, and are thus made the basis to
is inconsequential, considering that length of service determine the programs to which they shall later be
assumes importance only when the activity in which called on to assist.
the employee has been engaged to perform is not
necessary or desirable to the usual business or trade ISSUE
of the employer. W/N the respondents can be considered as regular
employees
Also, it cannot be denied that the employment contract
signed by respondent Taripe did not mention that he HELD
was hired only for a specific undertaking, the YES. They are regular employees. Where a person
completion of which had been determined at the time has rendered at least one year of service, regardless
of his engagement. The said employment contract of the nature of the activity performed, or where the
neither mentioned that respondent Taripe's services work is continuous or intermittent, the employment is
were seasonal in nature and that his employment was considered regular as long as the activity exists, the
only for the duration of the Christmas season as reason being that a customary appointment is not
purposely claimed by petitioner. What was stipulated in indispensable before one may be formally declared as
the said contract was that respondent Taripe's having attained regular status. Article 280 of the Labor
employment was contractual for the period of five Code provides:
months. As a rank-and-file employee, Taripe can
hardly be on equal terms with petitioner as almost The primary standard, therefore, of determining regular
always, employees agree to any terms of employment employment is the reasonable connection between the
just to get employed. particular activity performed by the employee in
relation to the usual trade or business of the employer.
ABS-CBN BROADCASTING CORPORATION v. The test is whether the former is usually necessary or
MARLYN NAZARENO, MERLOU GERZON, desirable in the usual business or trade of the
JENNIFER DEIPARINE, and JOSEPHINE LERASAN. employer.
G.R. No. 164156, September 26, 2006
Not considered regular employees are project
Petitioner employed respondents Nazareno, Gerzon, employees, the completion or termination of which is
Deiparine, and Lerasan as production assistants (PAs) more or less determinable at the time of employment,
on different dates. On October 12, 2000, respondents such as those employed in connection with a particular
filed a Complaint for Recognition of Regular construction project, and seasonal employees whose
Employment Status, Underpayment of Overtime Pay, employment by its nature is only desirable for a limited
Holiday Pay, Premium Pay, Service Incentive Pay, Sick period of time. Even then, any employee who has
Leave Pay, and 13th Month Pay with Damages against rendered at least one year of service, whether
the petitioner before the NLRC. Respondents alleged continuous or intermittent, is deemed regular with
that they were engaged by respondent ABS-CBN as respect to the activity performed and while such
regular and full-time employees for a continuous activity actually exists.
period of more than five (5) years with a monthly salary
rate of Four Thousand (P4,000.00) pesos beginning Respondents cannot be considered talents because
1995 up until the filing of this complaint on November they are not actors or actresses or radio specialists or
20, 2000. Respondents insisted that they belonged to mere clerks or utility employees. They are regular

87
employees who perform several different duties under Kimberly filed a motion for reconsideration of the
the control and direction of ABS-CBN executives and DOLE Order arguing in the main that the decision only
supervisors. pertained to casuals who had rendered one year of
service as of April 21, 1986, the filing date of
Thus, there are two kinds of regular employees under KILUSAN-OLALIAs petition for certification election.
the law: (1) those engaged to perform activities which
are necessary or desirable in the usual business or ISSUES
trade of the employer; and (2) those casual employees Whether the reckoning point in determining who
who have rendered at least one year of service, among Kimberlys casual employees are entitled to
whether continuous or broken, with respect to the regularization should be April 21, 1986, the date
activities in which they are employed. KILUSAN-OLALIA filed a petition for certification
election to challenge the incumbency of UKCEO-
Under existing jurisprudence, project (for project PTGWO
employees) could refer to two distinguishable types of Whether the employees who are not parties in the
activities. First, a project may refer to a particular job or cases between the parties should not be included in
undertaking that is within the regular or usual business the implementation orders of DOLE
of the employer, but which is distinct and separate, and
identifiable as such, from the other undertakings of the RULING
company. Such job or undertaking begins and ends at No. The law [thus] provides for two kinds of regular
determined or determinable times. Second, the term employees, namely: (1) those who are engaged to
project may also refer to a particular job or undertaking perform activities which are usually necessary or
that is not within the regular business of the employer. desirable in the usual business or trade of the
Such a job or undertaking must also be identifiably employer; and (2) those who have rendered at least
separate and distinct from the ordinary or regular one year of service, whether continuous or broken,
business operations of the employer. The job or with respect to the activity in which they are employed.
undertaking also begins and ends at determined or The individual petitioners herein who have been
determinable times. adjudged to be regular employees fall under the
second category. These are the mechanics,
The principal test is whether or not the project electricians, machinists, machine shop helpers,
employees were assigned to carry out a specific warehouse helpers, painters, carpenters, pipefitters
project or undertaking, the duration and scope of which and masons. It is not disputed that these workers have
were specified at the time the employees were been in the employ of KIMBERLY for more than one
engaged for that project. year at the time of the filing of the petition for
certification election by KILUSAN-OLALIA.
KIMBERLY-CLARK, INC. vs. SECRETARY OF
LABOR Considering that an employee becomes regular with
G.R. No. 156668, November 23, 2007 respect to the activity in which he is employed one
year after he is employed, the reckoning date for
When the Collective Bargaining Agreement executed determining his regularization is his hiring date.
by and between Kimberly-Clark, Inc., Kimberly and Therefore, it is error for petitioner Kimberly to claim
UKCEO-PTGWO expired, KILUSAN-OLALIA that it is from April 21, 1986 that the one-year period
challenged the incumbency of UKCEO-PTGWO. A should be counted. While it is a fact that the issue of
certification election was subsequently conducted with regularization came about only when KILUSAN-
UKCEO-PTGWO winning by a margin of 20 votes over OLALIA filed a petition for certification election, the
KILUSAN-OLALIA. Remaining as uncounted were 64 concerned employees attained regular status by
challenged ballots cast by 64 casual workers whose operation of law.
regularization was in question. KILUSAN-OLALIA filed
a protest. No. The grant of the benefit of regularization should
not be limited to the employees who questioned their
During the pendency of a case filed by KILUSAN- status before the labor tribunal/court and asserted their
OLALIA against the Ministry of Labor and rights; it should also extend to those similarly situated.
Employment, Kimberly dismissed from service several There is, thus, no merit in petitioner's contention that
employees among which are the casual employees only those who presented their circumstances of
whose regularization are in question. After a series of employment to the courts are entitled to regularization.
cases between the parties which reached the Supreme
Court, DOLE eventually ordered Kimberly to pay the BENARES V. PANCHO
workers who have been regularized their differential G.R. NO. 151827, April 29, 2005
pay with respect to minimum wage, cost of living
allowance, 13th month pay, and benefits provided for Respondent Had. Maasin II is a sugar cane plantation
under the applicable collective bargaining agreement located in Murcia, Negros Occidental with an area of
from the time they became regular employees.

88
12-24 has. planted, owned and managed by Josefina Respondents alleged to have started working as sugar
Benares, individual co-respondent. farm workers on various dates in Hda. Maasin II which
is a sugar cane plantation located in Murcia, Negros
On July 24, 1991, complainants thru counsel wrote the Occidental planted, owned and managed by Josefina
Regional Director of the Department of Labor and Benares, individual co-respondent. They alleged to
Employment, Bacolod City for intercession particularly have been terminated without being paid termination
in the matter of wages and other benefits mandated by benefits by respondent in retaliation to what they have
law. done in reporting to the Department of Labor and
Employment their working conditions and their wages
On October 15, 1991, complainants alleged to have and other mandatory benefits. Later on, in compliance
been terminated without being paid termination with an issued directive, a formal complaint was filed
benefits by respondent in retaliation to what they have for illegal dismissal with money claims. But the Labor
done in reporting to the Department of Labor and Arbiter dismissed the complaint for lack of merit.
Employment their working conditions viz-a-viz (sic)
wages and other mandatory benefits. On appeal, the NLRC held that respondents attained
the status of regular seasonal workers of Hda. Maasin
The NLRC held that respondents attained the status of II having worked therein from 1964-1985. It found that
regular seasonal workers of Hda. Maasin II having petitioner failed to discharge the burden of proving that
worked therein from 1964-1985. It found that petitioner the termination of respondents was for a just or
failed to discharge the burden of proving that the authorized cause. Hence, respondents were illegally
termination of respondents was for a just or authorized dismissed and should be awarded their money claims.
cause. Hence, respondents were illegally dismissed Said ruling was affirmed by the CA hence, this petition.
and should be awarded their money claims.
ISSUE
ISSUE Whether respondents are regular employees of
Whether respondents are regular employees of Hacienda Maasin and thus entitled to their monetary
Hacienda Maasin and thus entitled to their monetary claims; whether respondents were illegally dismissed.
claims.
HELD:
HELD YES. The law provides for three kinds of employees:
In this case, petitioner argues that respondents were (1) regular employees or those who have been
not her regular employees as they were merely engaged to perform activities which are usually
"pakiao" workers who did not work continuously in the necessary or desirable in the usual business or trade
sugar plantation. They performed such tasks as of the employer; (2) project employees or those whose
weeding, cutting and loading canes, planting cane employment has been fixed for a specific project or
points, fertilizing, cleaning the drainage, etc. These undertaking, the completion or termination of which
functions allegedly do not require respondents daily has been determined at the time of the engagement of
presence in the sugarcane field as it is not everyday the employee or where the work or service to be
that one weeds, cuts canes or applies fertilizer. In performed is seasonal in nature and the employment is
support of her allegations, petitioner submitted "cultivo" for the duration of the season; and (3) casual
and milling payrolls. employees or those who are neither regular nor project
employees.
The probative value of petitioners evidence, however,
has been passed upon by the labor arbiter, the NLRC The Court, in Hacienda Fatima, condensed the rule
and the Court of Appeals. Although the labor arbiter that the primary standard for determining regular
dismissed respondents complaint because their employment is the reasonable connection between the
"position paper is completely devoid of any discussion particular activity performed by the employee vis--vis
about their alleged dismissal, much less of the the usual trade or business of the employer. This
probative facts thereof,"20 the ground for the dismissal connection can be determined by considering the
of the complaint implies a finding that respondents are nature of the work performed and its relation to the
regular employees. scheme of the particular business or trade in its
entirety. If the employee has been performing the job
The NLRC was more unequivocal when it pronounced for at least a year, even if the performance is not
that respondents have acquired the status of regular continuous and merely intermittent, the law deems
seasonal employees having worked for more than one repeated and continuing need for its performance as
year, whether continuous or broken in petitioners sufficient evidence of the necessity if not
hacienda. indispensability of that activity to the business. Hence,
the employment is considered regular, but only with
JOSEFINA BENARES V. JAIME PANCHO respect to such activity and while such activity exists.
G.R. No. 151827, April 29, 2005, Tinga

89
In this case, petitioner argues that respondents were respondents were performing work necessary and
not her regular employees as they were merely pakiao desirable in the usual trade or business of an
workers who did not work continuously in the sugar employer. Hence, they can properly be classified as
plantation. They performed such tasks as weeding, regular employees.
cutting and loading canes, planting cane points,
fertilizing, cleaning the drainage, etc. For respondents to be excluded from those classified
as regular employees, it is not enough that they
The probative value of petitioners evidence, however, perform work or services that are seasonal in nature.
has been passed upon by the labor arbiter, the NLRC They must have been employed only for the duration
and the Court of Appeals. Although the labor arbiter of one season. While the records sufficiently show that
dismissed respondents complaint because their the respondents work in the hacienda was seasonal in
position paper is completely devoid of any discussion nature, there was, however, no proof that they were
about their alleged dismissal, much less of the hired for the duration of one season only. In fact, the
probative facts thereof, the ground for the dismissal of payrolls,[30] submitted in evidence by the petitioners,
the complaint implies a finding that respondents are show that they availed the services of the respondents
regular employees. since 1991. Absent any proof to the contrary, the
general rule of regular employment should, therefore,
HACIENDA BINO/HORTENCIA STARKE, stand. It bears stressing that the employer has the
INC./HORTENCIA L. STARKE, , vs. CANDIDO burden of proving the lawfulness of his employees
CUENCA, et al. dismissal.
G.R. No. 150478, April 15, 2005, Callejo
GAPAYAO V. FULO
Hacienda Bino is a sugar plantation located in Negros G.R. No. 193493, June 13, 2013, Sereno
Occidental and represented in this case by Hortencia
L. Starke, owner and operator of the said Jaime Fulo (deceased), a laborer in the agricultural
hacienda.The 76 individual respondents were part of landholdings, a harvester in the abaca plantation, and
the workforce of Hacienda Bino consisting of 220 a repairman/utility worker in several business
workers, performing various works.On July 18, 1996, establishments owned by petitioner, died of "acute
during the off-milling season, petitioner Starke issued renal failure secondary to 1st degree burn 70%
an Order or Notice, which stated, that all those who secondary electrocution" while doing repairs at the
signed in favor of CARP are expressing their desire to residence and business establishment of petitioner.
get out of employment on their own volition andonly Private respondent led a claim for social security
those who did not sign for CARP will be given benets with the SSS, However, upon verication and
employment by Hda. Bino. evaluation, it was discovered that the deceased was
not a registered member of the SSS. The latter
The respondents regarded such notice as a demanded that petitioner remit the social security
termination of their employment. As a consequence, contributions of the deceased, but petitioner denied
they filed a complaint for illegal dismissal, wage that the deceased was his employee.
differentials, 13th month pay, holiday pay and premium
pay for holiday, service incentive leave pay, and moral ISSUE
and exemplary damages with the NLRC Bacolod City, Whether or not there exists between the deceased
on September 17, 1996. Jaime Fulo and petitioner an employer-employee
relationship that would merit an award of benefits in
On October 6, 1997, the Labor Arbiter rendered a favor of private respondent under social security laws
Decision, finding that petitioner Starkes notice was
tantamount to a termination of the respondents RULING
services, and holding that the petitioner company was Yes. Farm workers generally fall under the denition of
guilty of illegal dismissal. On appeal, the NLRC seasonal employees. We have consistently held that
affirmed with modification the decision of the Labor seasonal employees may be considered as regular
Arbiter. employees. 56 Regular seasonal employees are those
called to work from time to time. The nature of their
ISSUE relationship with the employer is such that during the
Whether or not the respondents are regular or o season, they are temporarily laid o; but
seasonal employees of Hacienda Bino? reemployed during the summer season or when their
services may be needed. 57 They are in regular
RULING employment because of the nature of their job, and not
Regular employees. The primary standard for because of the length of time they have worked.
determining regular employment is the reasonable
connection between the particular activity performed For regular employees to be considered as such, the
by the employee in relation to the usual trade or primary standard used is the reasonable connection
business of the employer. There is no doubt that the

90
between the particular activity they perform and the work was not dependent on the completion or
usual trade or business of the employer. termination of any project; that since his work was not
dependent on any project, his employment with the
Pakyaw workers are considered employees for as long [petitioner-]company was continuous and without
as their employers exercise control over them. It interruption for the past ten (10) years;that on October
should be remembered that the control test merely 1, 1999, he was dismissed from his employment
calls for the existence of the right to control, and not allegedly because he was a project employee. He filed
necessarily the exercise thereof. 69 It is not essential a pro forma complaint for illegal dismissal.
that the employer actually supervises the performance
of duties by the employee. It is enough that the former "The [petitioner-]company however claims that
has a right to wield the power. complainant was hired as a project employee in the
companys various projects; that his employment
UNIVERSAL ROBINA SUGAR MILLING CORP. contracts showed that he was a project worker with
(URSUMCO ) V. ACIBO specific project assignments; that after completion of
G.R. No. 186439, January 15, 2014, Brion each project assignment, his employment was likewise
terminated and the same was correspondingly
URSUMCO hired employees on different reported to the DOLE.Labor Arbiter dismissed the
capacities,i.e., drivers, crane operators, bucket complaint for lack of merit. The CA concluded that
hookers, welders, mechanics, laboratory attendants respondent was a regular employee of petitioners.
and aides, steel workers, laborers, carpenters and
masons, among others. At the start of their respective ISSUE
engagements, the employees signed contracts of Whether Roger Puente is a project employee.
employment for a period of one (1) month or for a
given season. URSUMCO repeatedly hired them to RULING
perform the same duties and, for every engagement, In general, the factual findings of the Court of Appeals
required the latter to sign new employment contracts are binding on the Supreme Court. One exception to
for the same duration of one month or a given season. this rule, however, is when the factual findings of the
former are contrary to those of the trial court (or the
ISSUE lower administrative body, as the case may be). The
Are the employees considered regular employees? question of whether respondent is a regular or a
project employee is essentially factual in nature;
HELD nonetheless, the Court is constrained to resolve it due
Yes. However, the designation must be qualified. They to the incongruent findings of the NLRC and the
are regular seasonal employees. CA.The Labor Code defines regular, project and
To exclude the asserted seasonal employee from casual employees as follows: ART. 280. Regular and
those classified as regular employees, the employer Casual Employment. - The provision of written
must show that: (1) the employee must be performing agreement to the contrary notwithstanding and
work or services that are seasonal in nature; and (2) regardless of the oral agreement of the parties, an
he had been employed for the duration of the season. employment shall be deemed to be regular where the
employee has been engaged to perform activities
Hence, when the seasonal workers are continuously which are usually necessary or desirable in the usual
and repeatedly hired to perform the same tasks or business or trade of the employer, except where the
activities for several seasons or even after the employment has been fixed for a specific project or
cessation of the season, this length of time may undertaking the completion or termination of which has
likewise serve as badge of regular employment. Even been determined at the time of the engagement of the
though denominated as seasonal workers, if these employee or where the work or services to be
workers are called to work from time to time and are performed is seasonal in nature and the employment is
only temporarily laid off during the off-season, the law for the duration of the season. With particular
does not consider them separated from the service reference to the construction industry, to which
during the off-season period. The law simply considers Petitioner Filsystems belongs, Department (of Labor
these seasonal workers on leave until re-employed. and Employment) Order No. 19,11 Series of 1993,
which make it clear that a project employee is one
FILIPINAS PRE-FABRICATED BUILDING SYSTEMS whose "employment has been fixed for a specific
(FILSYSTEMS) V. PUENTE project or undertaking the completion or termination of
March 18, 2005, Panganiban which has been determined at the time of the
"[Respondent] avers that he started working with engagement of the employee or where the work or
[Petitioner] Filsystems, Inc., a corporation engaged in services to be performed is seasonal in nature and the
construction business, on June 12, 1989; that he was employment is for the duration of the season." In D.M.
initially hired by [petitioner] company as an installer; Consunji, Inc. v. NLRC, this Court has ruled that "the
that he was later promoted to mobile crane operator length of service of a project employee is not the
and was stationed at the company premises; that his controlling test of employment tenure but whether or

91
not the employment has been fixed for a specific G.R. NO. 157788, March 08, 2005, Quisumbing
project or undertaking the completion or termination of
which has been determined at the time of the Respondent Marcelo Donelo started teaching on a
engagement of the employee." contractual basis at St. Mary's University in 1992. In
1995, he was issued an appointment as an Assistant
In the present case, the contracts of employment of Professor I. He was promoted to Assistant Professor
Puente attest to the fact that he was hired for specific III. He taught until the first semester of school year
projects. His employment was coterminous with the 1999-2000 when the school discontinued giving him
completion of the projects for which he had been hired. teaching assignments. Respondent filed a complaint
Those contracts expressly provided that his tenure of for illegal dismissal against the university. Petitioner St.
employment depended on the duration of any phase of Mary's University showed that respondent was merely
the project or on the completion of the construction a part-time instructor and, except for three semesters,
projects. Furthermore, petitioners regularly submitted carried a load of less than eighteen units. Petitioner
to the labor department reports of the termination of argued that respondent never attained permanent or
services of project workers. Such compliance with the regular status for he was not a full-time teacher.
reportorial requirement confirms that respondent was a Further, petitioner showed that respondent was under
project employee.Respondents Complaint specified investigation by the university for giving grades to
the address of Filsystems, as "69 INDUSTRIA ROAD, students who did not attend classes. The Labor
B.BAYAN Q.C.," but specified his place of work as Arbiter ruled that respondent was lawfully dismissed
"PROJECT TO PROJECT." These statements, because he had not attained permanent or regular
coupled with the other pieces of evidence presented status pursuant to the Manual of Regulations for
by petitioners, convinces the Court that -- contrary to Private Schools. The Labor Arbiter held that only full-
the subsequent claims of respondent -- he performed time teachers with regular loads of at least 18 units,
his work at the project site, not at the companys who have satisfactorily completed three consecutive
premises. Respondents employment contract provides years of service qualify as permanent or regular
as follows: "x xx employment, under this contract is employees.On appeal by respondent, the National
good only for the duration of the project unless Labor Relations Commission (NLRC) reversed the
employees services is terminated due to completion of Decision of the Labor Arbiter and ordered the
the phase of work/section of the project or piece of reinstatement of respondent without loss of seniority
work to which employee is assigned: rights and privileges with full backwages from the time
his salaries were withheld until actual reinstatement.4 It
"We agree clearly that employment is on a Project to held that respondent was a full-time teacher as he did
Project Basis and that upon termination of services not appear to have other regular remunerative
there is no separation pay: POSITION : Mobil Crane employment and was paid on a regular monthly basis
Operator; PROJECT NAME : World Finance Plaza; regardless of the number of teaching hours. As a full-
LOCATION : Meralco Ave., Ortigas Center, Pasig City; time teacher and having taught for more than 3 years,
ASSIGNMENT : Lifting & Hauling of Materials respondent qualified as a permanent or regular
employee of the university. Petitioner sought for
Evidently, although the employment contract did not reconsideration and pointed out that respondent was
state a particular date, it did specify that the also working for the Provincial Government of Nueva
termination of the parties employment relationship Vizcaya from 1993 to 1996. Nevertheless, the NLRC
was to be on a "day certain" -- the day when the phase denied petitioner's Motion for Reconsideration.
of work termed "Lifting & Hauling of Materials" for the Aggrieved, petitioner elevated the matter to the Court
"World Finance Plaza" project would be completed. of Appeals, which affirmed the Decision of the NLRC.
Thus, respondent cannot be considered to have been
a regular employee. He was a project employee. ISSUE
Whether or not private respondent is a permanent
That he was employed with Petitioner Filsystems for regular employee, full time, and was illegally
ten years in various projects did not ipso facto make dismissed.
him a regular employee, considering that the definition
of regular employment in Article 280 of the Labor Code RULING
makes a specific exception with respect to project No. Section 93 of the 1992 Manual of Regulations for
employment. The mere rehiring of respondent on a Private Schools, provides that full-time teachers who
project-to-project basis did not confer upon him regular have satisfactorily completed their probationary period
employment status. "The practice was dictated by the shall be considered regular or permanent.6
practical consideration that experienced construction Furthermore, the probationary period shall not be more
workers are more preferred." It did not change his than six consecutive regular semesters of satisfactory
status as a project employee. service for those in the tertiary level. Thus, the
following requisites must concur before a private
SAINT MARY'S UNIVERSITY V. COURT OF school teacher acquires permanent status: (1) the
APPEALS teacher is a full-time teacher; (2) the teacher must

92
have rendered three consecutive years of service; and stating that he was being employed only on a por
(3) such service must have been satisfactory. viaje basis and that his employment would be
terminated at the end of the trip for which he was being
Section 45 of the 1992 Manual of Regulations for hired.
Private Schools provides that full-time academic
personnel are those meeting all the following He was promoted to Boat Captain but was later
requirements: demoted to Radio Operator. As a Radio Operator, he
a. Who possess at least the minimum academic monitored the daily activities in their office and
qualifications prescribed by the Department under this recorded in the duty logbook the names of the callers
Manual for all academic personnel; and time of their calls.
b. Who are paid monthly or hourly, based on the
regular teaching loads as provided for in the policies, On 3 July 2000, Estoquia failed to record a 7:25 a.m.
rules and standards of the Department and the school; call in one of the logbooks. When he reviewed the two
c. Whose total working day of not more than eight logbooks, he noticed that he was not able to record the
hours a day is devoted to the school; said call in one of the logbooks so he immediately
d. Who have no other remunerative occupation recorded the 7:25 a.m. call after the 7:30 a.m. entry.
elsewhere requiring regular hours of work that will
conflict with the working hours in the school; In the morning of 4 July 2000, petitioner detected the
andcralawlibrary error in the entry in the logbook. Estoquia was asked
e. Who are not teaching full-time in any other to prepare an incident report to explain the reason for
educational institution. the said oversight. On the same day, Poseidons
secretary summoned Estoquia to get his separation
All teaching personnel who do not meet the foregoing pay.
qualifications are considered part-time.
Estoquia filed a complaint for illegal dismissal with the
With respondents teaching load of twelve units or less, Labor Arbiter.
he could not claim he worked for the number of hours
daily as prescribed by Section 45 of the Manual. Poseidon and Terry de Jesus asserted that Estoquia
Furthermore, the records also indubitably show he was was a contractual or a casual employee employed only
employed elsewhere from 1993 to 1996. Since there is on a"por viaje" or per trip basis and that his
no showing that respondent worked on a full-time employment would be terminated at the end of the trip
basis for at least three years, he could not have for which he was being hired.
acquired a permanent status.11 A part-time employee
does not attain permanent status no matter how long ISSUE
he has served the school.12 And as a part-timer, his WON Eustoqia was a regular employee
services could be terminated by the school without WON deep -sea fishing is a seasonal industry
being held liable for illegal dismissal. WON Eustoqia was illegally dismissed
Yet, this is not to say that part-time teachers may not
have security of tenure. The school could not lawfully RULING
terminate a part-timer before the end of the agreed Yes, Eustoquia was a regular employee.
period without just cause. But once the period,
semester, or term ends, there is no obligation on the Article 280 draws a line between regular and casual
part of the school to renew the contract of employment employment. The provision enumerates two (2) kinds
for the next period, semester, or term. of employees, the regular employees and the casual
employees. The regular employees consist of the
That petitioner did not give any teaching assignment to following:
the respondent during a given term or semester, even 1) those engaged to perform activities which are
if factually true, did not amount to an actionable usually necessary or desirable in the usual business or
violation of respondent's rights. It did not amount to trade of the employer; and
illegal dismissal of the part-time teacher. 2) those who have rendered at least one year of
service whether such service is continuous or broken.
POSEIDON FISHING/TERRY DE JESUS V. NLRC
G.R. No. 168052, February 20. 2006, Chico Nazario In a span of 12 years, Eustoquia worked for petitioner
first as a Chief Mate, then Boat Captain, and later as
Petitioner Poseidon Fishing is a fishing company Radio Operator. His job was directly related to the
engaged in the deep-sea fishing industry with Terry de deep-sea fishing business of petitioner Poseidon. His
Jesus as the manager. work was, therefore, necessary and important to the
business of his employer. Such being the scenario
Jimmy S. Estoquia was employed as Chief Mate in involved, Eustoquia is considered a regular employee.
January 1988 and after five years. The contract with
Eustoqia per the "Kasunduan", there was a provision

93
There is nothing in the contract that says complainant Yes, Eustoqia was illegally dismissed.
is a casual, seasonal or a project worker. The date
July 1 to 31, 1998 under the heading "Pagdating" had There is no sufficient evidence on record to prove
been placed there merely to indicate the possible date Eustoqias negligence, gross or simple, in the
of arrival of the vessel and is not an indication of the performance of his duties to warrant a reduction of six
status of employment of the crew of the vessel. months salary and be summarily dismissed. At best,
the simple negligence is punishable only with
The test to determine whether employment is regular admonition or suspension for a day or two.
or not is the reasonable connection between the
particular activity performed by the employee in His dismissal was without valid cause and where
relation to the usual business or trade of the employer. illegal dismissal is proven, the worker is entitled to
And, if the employee has been performing the job for back wages and other similar benefits without
at least one year, even if the performance is not deductions or conditions.
continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as PLDT v. ROSALINA ARCEO
sufficient evidence of the necessity, if not G.R. No. 149985, May 5, 2006
indispensability of that activity to the business.
In May 1990, respondent Rosalina Arceo (Arceo)
In the case at bar, the act of hiring and re-hiring in applied for the position of telephone operator with
various capacities is a mere gambit employed by petitioner PLDT Tarlac Exchange. She, however, failed
petitioner to thwart the tenurial protection of private the pre-employment qualifying examination. Having
respondent. Such pattern of re-hiring and the recurring failed the test, Arceo requested PLDT to allow her to
need for his services are testament to the necessity work at the latters office even without pay. PLDT
and indispensability of such services to petitioners agreed and assigned her to its commercial section
business or trade. where she was made to perform various tasks like
photocopying documents, sorting out telephone bills
No, the activity of catching fish is a continuous process and notices of disconnection, and other minor
and could hardly be considered as seasonal in nature. assignments and activities. After two weeks, PLDT
decided to pay her the minimum wage.
Project employees is defined as those workers hired:
(1) for a specific project or undertaking, and On February 15, 1991, PLDT saw no further need
(2) the completion or termination of such project has for Arceos services and decided to fire her but, through
been determined at the time of the engagement of the the intervention of one employee, she was
employee. recommended for an on-the-job training on minor
traffic work. When she failed to assimilate traffic
The principal test for determining whether particular procedures, the company transferred her to auxiliary
employees are "project employees" as distinguished services, a minor facility. Subsequently, Arceo took the
from "regular employees," is whether or not the pre-qualifying exams for the position of telephone
"project employees" were assigned to carry out a operator two more times but again failed in both
"specific project or undertaking," the duration and attempts. Finally, on October 13, 1991, PLDT
scope of which were specified at the time the discharged Arceo from employment. She then filed a
employees were engaged for that project. case for illegal dismissal before the labor arbiter. The
latter ruled in her favor. Arceo was reinstated as
In this case, Eustoquia was never informed that he will casual employee with a minimum wage of P106 per
be assigned to a "specific project or undertaking at day. On September 3, 1996 or more than three years
the time of their engagement. after her reinstatement, Arceo filed a complaint for
unfair labor practice, underpayment of salary,
Once a project or work pool employee has been: (1) underpayment of overtime pay, holiday pay, rest day
continuously, as opposed to intermittently, re-hired by pay and other monetary claims. She alleged in her
the same employer for the same tasks or nature of complaint that, since her reinstatement, she had yet to
tasks; and (2) these tasks are vital, necessary and be regularized and had yet to receive the benefits due
indispensable to the usual business or trade of the to a regular employee. Labor arbiter ruled
employer, then the employee must be deemed a that Arceo was already qualified to become a regular
regular employee. employee. NLRC affirmed. PLDT went to the CA via a
petition for certiorari. CA also affirmed and declared
Eustoquias functions were usually necessary or that,
desirable in the usual business or trade of petitioner
fishing company and he was hired continuously for 12 It is doctrinaire that in determining what
years for the same nature of tasks. Hence, he was of constitutes regular employment, what is
regular employee. considered [as] the reasonable connection
between the particular activity performed by

94
the employee in relation to the usual business we are constrained to confirm her regularization in that
or trade of the employer, i.e. if the work is position.
usually necessary or desirable in the usual
business or trade of the employer. xxx FULACHE V. ABS-CBN
And even granting the argument of petitioner G.R. No. 183810, January 21, 2010, Brion
that the nature of Arceos work is casual or
temporary, still she had been converted into a Petitioners are employees performing manual works
regular employee by virtue of the proviso in for respondent. They were dismissed without just
the second paragraph of Article 280 for having cause; as a consequence thereof, they filed for illegal
worked with PLDT for more than one (1) year. dismissal and invoked their rights under the CBA. As a
defense, respondent contended that petitioners were
PLDT argues that while Article 280 of the Labor Code not its employees, but talents. Thus, they cannot be
regularizes a casual employee who has rendered at entitled to the benefits stipulated in the CBA for rank
least one year of service (whether continuous or and file employees.
broken) the proviso is subject to the condition that the
employment subsists or the position still exists. Even ISSUE
if Arceo had rendered more than one year of service Whether or not petitioners are regular employees.
as a casual employee, PLDT insisted that this fact
alone would not automatically make her a regular RULING
employee since her position had long been abolished. Yes. they are ABS-CBNs regular employees entitled to
PLDT also argues that it would be an even greater the benefits and privileges of regular employees.
error if Arceo were to be regularized as a telephone These benefits and privileges arise from entitlements
operator since she repeatedly failed the qualifying under the law (specifically, the Labor Code and its
exams for that position. related laws), and from their employment contract as
regular ABS-CBN employees, part of which is the CBA
ISSUE if they fall within the coverage of this agreement.
Is Arceo eligible to become a regular employee of
PLDT? Petitioners are members of the appropriate bargaining
unit because they are regular rank-and-file employees
HELD and do not belong to any of the excluded categories.
Yes. Under Art 280 of the LC, a regular employee is Specifically, nothing in the records shows that they are
(1) one who is either engaged to perform activities that supervisory or confidential employees; neither are they
are necessary or desirable in the usual trade or casual nor probationary employees. Most importantly,
business of the employer or (2) a casual employee the labor arbiters decision of January 17,
who has rendered at least one year of service, whether 2002 affirmed all the way up to the CA level ruled
continuous or broken, with respect to the activity in against ABS-CBNs submission that they are
which he is employed. independent contractors. Thus, as regular rank-and-file
employees, they fall within CBA coverage under the
Under the first criterion, respondent is qualified to be a CBAs express terms and are entitled to its benefits.
regular employee. Her work, consisting mainly of
photocopying documents, sorting out telephone bills LEYTE GEOTHERMAL POWER PROGRESSIVE
and disconnection notices, was certainly necessary or EMPLOYEES UNION ALU TUCP vs. PHILIPPINE
desirable to the business of PLDT. But even if the NATIONAL OIL COMPANY ENERGY
contrary were true, the uncontested fact is that she DEVELOPMENT CORPORATION
rendered service for more than one year as a casual G.R. No. 170351, March 30, 2011
employee. Hence, under the second criterion, she is
still eligible to become a regular employee. Respondent is a GOCC while petitioner is a legitimate
labor organization. Among [respondents] geothermal
Petitioners argument that respondents position has projects is the Leyte Geothermal Power Project
been abolished, if indeed true, does not located at the Greater Tongonan Geothermal
preclude Arceos becoming a regular employee. The Reservation in Leyte. Thus, the [respondent] hired and
order to reinstate her also included the alternative to employed hundreds of employees on a contractual
reinstate her to a position equivalent thereto. Thus, basis, whereby, their employment was only good up to
PLDT can still regularize her in an equivalent position. the completion or termination of the project and would
automatically expire upon the completion of such
Under Article 280, any employee who has rendered at project. Majority of the employees hired by
least one year of service shall be considered a regular [respondent] in its Leyte Geothermal Power Projects
employee with respect to the activity in which he is had become members of petitioner. In view of that
employed and his employment shall continue while circumstance, the petitioner demands from the
such activity exists. For PLDTs failure to show that the [respondent] for recognition of it as the collective
activity undertaken by Arceo has been discontinued, bargaining agent of said employees and for a CBA

95
negotiation with it. However, the [respondent] did not he was required to take a 60-day leave of absence
heed such demands of the petitioner. Sometime in because of Kochs disease. He applied for sick leave
1998 when the project was about to be completed, the but he was told he was not entitled to sick leave
[respondent] proceeded to serve Notices of because he was not a regular employee.
Termination of Employment upon the employees who
are members of the petitioner. ISSUE
Is petitioner a regular employee?
ISSUE
WON they are project employees HELD
Yes.
HELD -This Court is convinced however that although he
YES. By entering into such a contract, an employee is started as a project employee, he eventually became a
deemed to understand that his employment is regular employee of PNCC. In the case at bar,
coterminous with the project. He may not expect to be petitioner worked continuously for more than two years
employed continuously beyond the completion of the after the supposed three-month duration of his project
project. It is of judicial notice that project employees employment for the NAIA II Project. While his
engaged for manual services or those for special skills appointment for said project allowed such extension
like those of carpenters or masons, are, as a rule, since it specifically provided that in case his services
unschooled. However, this fact alone is not a valid are still needed beyond the validity of [the] contract,
reason for bestowing special treatment on them or for the Company shall extend [his] services.
invalidating a contract of employment. Project
employment contracts are not lopsided agreements in While for first three months, petitioner can be
favor of only one party thereto. The employers interest considered a project employee of PNCC, his
is equally important as that of the employee[s] for employment thereafter, when his services were
theirs is the interest that propels economic activity. extended without any specification of as to the
While it may be true that it is the employer who drafts duration, made him a regular employee of PNCC. And
project employment contracts with its business interest his status as a regular employee was not affected by
as overriding consideration, such contracts do not, of the fact that he was assigned to several other projects
necessity, prejudice the employee. Neither is the and there were intervals in between said projects since
employee left helpless by a prejudicial employment he enjoys security of tenure.
contract. After all, under the law, the interest of the
worker is paramount. Unions own admission, both - Failure of an employer to file termination reports after
parties had executed the contracts freely and every project completion proves that an employee is
voluntarily without force, duress or acts tending to not a project employee.
vitiate the worker[s] consent. Thus, we see no reason
not to honor and give effect to the terms and PNCC did not report the termination of petitioners
conditions stipulated therein. The litmus test to supposed project employment for the NAIA II Project
determine whether an individual is a project employee to the DOLE. Department Order No. 19, or the
lies in setting a fixed period of employment involving a Guidelines Governing the Employment of Workers in
specific undertaking which completion or termination the Construction Industry, requires employers to
has been determined at the time of the particular submit a report of an employees termination to the
employees engagement. nearest public employment office every time an
employees employment is terminated due to a
PASOS V. PNCC completion of a project.
G.R. No. 192394, July 3, 2013, Villarama
MACARTHUR MALICDEM AND HERMENIGILDO
Petitioner started working for PNCC. Based on FLORES v.MARULAS INDUSTRIAL CORPORATION
PNCCs "Personnel Action Form Appointment for AND MIKE MANCILLA
Project Employment", he was designated as Clerk II G.R. No. 204406, February 26, 2014, Mendoza
Accountingat NAIA II. It also stated Project
employment starting on April 26, 1996 to July 25, TOPIC:Effect of continuous re-hiring of a project
1996. Petitioners employment, however, did not end employee for the same tasks that are vital, necessary
on July 25, 1996, but was extended. He was rehired and indispensable to the usual trade or business of the
several times. Despite the termination of his employer
employment on October 19, 2000, petitioner claims
that his superior instructed him to report for work the DOCTRINE: Once a project or work pool employee
following day, intimating to him that he will again be has been: (1) continuously, as opposed to
employed for the succeeding SM projects. For intermittently, rehired by the same employer for the
purposes of reemployment, he then underwent a same tasks or nature of tasks; and (2) these tasks are
medical examination which allegedly revealed that he vital, necessary and indispensable to the usual
had pneumonitis. He took a 14-day sick leave. Then business or trade of the employer, then the employee

96
must be deemed a regular employee, pursuant to Even granting that petitioners were project employees,
Article 280 of the Labor Code and jurisprudence. To they can still be considered as regular as they were
rule otherwise would allow circumvention of labor laws continuously hired by the same employer for the same
in industries not falling within the ambit of Policy position as extruder operators. Being responsible for
Instruction No. 20/Department Order No. 19, hence the operation of machines that produced sacks, their
allowing the prevention of acquisition of tenurial work was vital and indispensable the business of the
security by project or work pool employees who have employer.
already gained the status of regular employees by the
employers conduct. The respondents cannot use the alleged expiration of
the employment contracts of the petitioners as a shield
FACTS: of their illegal acts. The project employment contracts
Petitioners Malicdem and Flores were hired by that the petitioners were made to sign every year since
respondent corporation as extruder operators in 2006 the start of their employment were only a stratagem to
They were responsible for the bagging of filament violate their security of tenure in the company.
yarn, the quality of pp yarn package and the
cleanliness of the work place area. Their employment The respondents invocation of William Uy Construction
contracts were for a period of one (1) year. Every year Corp. v. Trinidad is misplaced because it is applicable
thereafter, they would sign a Resignation/Quitclaim in only in cases involving the tenure of project employees
favor of Marulas a day after their contracts ended, and in the construction industry. It is widely known that in
then sign another contract for one (1) year until such the construction industry, a project employees work
time that they were told not to report to work anymore. depends on the availability of projects, necessarily the
They were asked to sign a paper acknowledging the duration of his employment. It is not permanent but
completion of their contractual status. Claiming that coterminous with the work to which he is assigned. It
they were illegally dismissed, the corporation would be extremely burdensome for the employer, who
countered that their contracts showed that they were depends on the availability of projects, to carry him as
fixed term employees for a specific undertaking which a permanent employee and pay him wages even if
was to work on a particular order of a customer for a there are no projects for him to work on.The rationale
specific period. Their severance from employment then behind this is that once the project is completed it
was due to the expiration of their contracts. would be unjust to require the employer to maintain
these employees in their payroll.
ISSUE
Whether or not petitioners were illegally dismissed EXODUS INTERNATIONAL CONSTRUCTION
CORPORATION and ANTONIO P. JAVALERA v.
HELD GUILLERMO BISCOCHO, FERNANDO PEREDA,
Yes. FERDINAND MARIANO, GREGORIO BELLITA and
MIGUEL BOBILLO
The test to determine whether employment is regular G.R. No. 166109, February 23, 2011, Del Castillo
or not is the reasonable connection between the
particular activity performed by the employee in Petitioner Exodus International Construction
relation to the usual business or trade of the employer. Corporation (Exodus) is a duly licensed labor
If the employee has been performing the job for at contractor for the painting of residential houses,
least one year, even if the performance is not condominium units and commercial buildings.
continuous or merely intermittent, the law deems the Petitioner Antonio P. Javalera is the President and
repeated and continuing need for its performance as General Manager of Exodus.
sufficient evidence of the necessity, if not
indispensability of that activity to the business. On February 1, 1999, Exodus obtained from Dutch
Boy Philippines, Inc. (Dutch Boy) a contractfor the
It is clear then that there was deliberate intent on the painting of the Imperial Sky Garden located at Ongpin
part of the employer to prevent the regularization of Street, Binondo, Manila. On July 28, 1999, Dutch Boy
petitioners. To begin with, there is no actual project. awarded another contractto Exodus for the painting of
The only stipulations in the contracts were the dates of Pacific Plaza Towers in Fort Bonifacio, Taguig City. In
their effectivity, the duties and responsibilities of the the furtherance of its business, Exodus hired
petitioners as extruder operators, the rights and respondents as painters on different dates with the
obligations of the parties, and the petitioners corresponding wages.
compensation and allowances. As there was no
specific project or undertaking to speak of, the Guillermo Biscocho (Guillermo) was assigned at the
respondents cannot invoke the exception in Article 280 Imperial Sky Garden from February 8, 1999 to
of the Labor Code. This is a clear attempt to frustrate February 8, 2000. Fernando Pereda (Fernando)
the regularization of the petitioners and to circumvent worked in the same project from February 8, 1999 to
the law. June 17, 2000. Likewise, Ferdinand Mariano
(Ferdinand) worked there from April 12, 1999 to

97
February 17, 2000. All of them were then transferred to
Pacific Plaza Towers. Gregorio S. Bellita (Gregorio) ISSUE
was assigned to work at the house of Mr. Teofilo Yap WON respondents were illegally dismissed.
in Ayala Alabang, Muntinlupa City from May 20, 1999
to December 4, 1999. Afterwards he was transferred to RULING
Pacific Plaza Towers. Miguel B. Bobillo (Miguel) was There was no dismissal in this case, hence, there is no
hired and assigned at Pacific Plaza Towers on March question that can be entertained regarding its legality
10, 2000. or illegality. As found by the Labor Arbiter, there was
no evidence that respondents were dismissed nor
On November 27, 2000, Guillermo, Fernando, were they prevented from returning to their work. It
Ferdinand, and Miguel filed a complaintfor illegal was only respondents unsubstantiated conclusion that
dismissal and non-payment of holiday pay, service they were dismissed. As a matter of fact, respondents
incentive leave pay, 13th month pay and night-shift could not name the particular person who effected
differential pay. On December 1, 2000, Gregorio also their dismissal and under what particular
filed a complaint stating that he was dismissed from circumstances.
the service on September 12, 2000 while Guillermo,
Fernando, Ferdinand, and Miguel were orally notified The Labor Arbiter is also correct in ruling that there
of their dismissal from the service on November 25, was no abandonment on the part of respondents that
2000. would justify their dismissal from their employment.

Petitioners denied respondents allegations. As It is a settled rule that "[m]ere absence or failure to
regards Gregorio, petitioners averred that on report for work x xx is not enough to amount to
September 15, 2000, he absented himself from work abandonment of work." "Abandonment is the
and applied as a painter with SAEI-EEI which is the deliberate and unjustified refusal of an employee to
general building contractor of Pacific Plaza Towers. resume his employment."
Since then, he never reported back to work.
Respondents must be reinstated and paid their holiday
Guillermo absented himself from work without leave on pay, service incentive leave pay, and 13th month pay.
November 27, 2000. When he reported for work the
following day, he was reprimanded for being Absent Clearly therefore, there was no dismissal, much less
Without Official Leave (AWOL). Because of the illegal, and there was also no abandonment of job to
reprimand, he worked only half-day and thereafter was speak of. The Labor Arbiter is therefore correct in
unheard of until the filing of the instant complaint. ordering that respondents be reinstated but without
Fernando, Ferdinand, and Miguel were caught eating any backwages. However, petitioners are of the
during working hours on November 25, 2000 for which position that the reinstatement of respondents to their
they were reprimanded by their foreman. Since then former positions, which were no longer existing, is
they no longer reported for work. impossible, highly unfair and unjust. The project was
already completed by petitioners on September 28,
On March 21, 2002, the Labor Arbiter rendered a 2001. Thus the completion of the project left them with
Decisionexonerating petitioners from the charge of no more work to do. Having completed their tasks,
illegal dismissal as respondents chose not to report for their positions automatically ceased to exist.
work. The Labor Arbiter ruled that respondents should Consequently, there were no more positions where
be reinstated but without any backwages. However, they can be reinstated as painters.
she allowed the claims for holiday pay, service
incentive leave pay and 13th month pay. Petitioners are misguided. They forgot that there are
two types of employees in the construction industry.
Petitioners sought recourse to the NLRC limiting their The first is referred to as project employees or those
appeal to the award of service incentive leave pay, employed in connection with a particular construction
13th month pay, holiday pay and 10% attorneys fees project or phase thereof and such employment is
in the sum of P70,183.23. On January 17, 2003, the coterminous with each project or phase of the project
NLRC dismissed the appeal. Aggrieved, petitioners to which they are assigned. The second is known as
filed with the CA a petition for certiorari. On August 10, non-project employees or those employed without
2004, the CA dismissed the petition and affirmed the reference to any particular construction project or
findings of the Labor Arbiter and the NLRC. However, phase of a project.
in addition to the reliefs awarded to respondents in the
March 21, 2002 Decision of the Labor Arbiter which The second category is where respondents are
was affirmed by the NLRC in a Resolution dated classified. As such they are regular employees of
January 17, 2003, the petitioners were directed by the petitioners. It is clear from the records of the case that
CA to solidarily pay full backwages, inclusive of all when one project is completed, respondents were
benefits the respondents should have received had automatically transferred to the next project awarded
they not been dismissed. to petitioners. There was no employment agreement

98
given to respondents which clearly spelled out the Labor Code. The only notice required is for the
duration of their employment, the specific work to be employer to notify the DOLE of the employees
performed and that such is made clear to them at the termination from the employment for each project.
time of hiring. It is now too late for petitioners to claim
that respondents are project employees whose FACTS:
employment is coterminous with each project or phase Respondents Antonio Gobres, Magellan Dalisay,
of the project to which they are assigned. GodofredoParagsa, Emilio Aleta and GenerosoMelo
worked as carpenters in the construction projects of
Nonetheless, assuming that respondents were initially petitioner D.M. Consunji, Inc., a construction company,
hired as project employees, petitioners must be on several occasions and/or at various times. Their
reminded of our ruling in Maraguinot, Jr. v. National termination from employment for each project was
Labor Relations Commission that "[a] project reported to the Department of Labor and Employment
employee xxx may acquire the status of a regular (DOLE), in accordance with Policy Instruction No. 20,
employee when the following [factors] concur: which was later superseded by Department Order No.
1. There is a continuous rehiring of project 19, series of 1993.
employees even after cessation of a project;
and Respondents last assignment was at Quad 4-Project
2. The tasks performed by the alleged "project in Glorietta, Ayala, Makati, where they started working
employee" are vital, necessary and on September 1, 1998. On October 14, 1998,
indespensable to the usual business or trade respondents saw their names included in the Notice of
of the employer." Termination posted on the bulletin board at the project
premises. Respondents filed a Complaint with the
In this case, the evidence on record shows that Arbitration Branch of the National Labor Relations
respondents were employed and assigned Commission (NLRC) against petitioner D.M. Consunji,
continuously to the various projects of petitioners. As Inc. and David M. Consunji for illegal dismissal, and
painters, they performed activities which were non-payment of 13th month pay, five (5) days service
necessary and desirable in the usual business of incentive leave pay, damages and attorneys fees.
petitioners, who are engaged in subcontracting jobs for
painting of residential units, condominium and The Labor Arbiter, the NLRC and the Court of Appeals
commercial buildings. As regular employees, all found that respondents, as project employees, were
respondents are entitled to be reinstated without loss validly terminated due to the completion of the phases
of seniority rights. of work for which their services were engaged.

Respondents are also entitled to their money claims However, the Court of Appeals held that respondents
such as the payment of holiday pay, service incentive were entitled to nominal damages, because petitioner
leave pay, and 13th month pay. Petitioners as the failed to give them advance notice of their termination.
employer of respondents and having complete control The appellate court cited the case of Agabon v. NLRC
over the records of the company could have easily as basis for the award of nominal damages.
rebutted the monetary claims against it. All that they
had to do was to present the vouchers or payrolls ISSUE
showing payment of the same. However, they decided Is prior notice of termination required to be sent to the
not to provide the said documentary evidence. Our employee before an employer could terminate him
conclusion therefore is that they never paid said based on completion of the project for which he was
benefits and therefore they must be ordered to settle hired? -NO
their obligation with the respondents.
RULING
The CA erred when it ordered reinstatement of Unlike in Agabon, respondents, in this case, were not
respondents with payment of full backwages. In cases terminated for just cause under Article 282 of the
where there is no evidence of dismissal, the remedy is Labor Code. Dismissal based on just causes
reinstatement but without backwages. In this case, contemplate acts or omissions attributable to the
both the Labor Arbiter and the NLRC made a finding employee. Instead, respondents were terminated due
that there was no dismissal much less an illegal one. to the completion of the phases of work for which their
services were engaged.
D.M. CONSUNJI, INC. V. ANTONIO GOBRES
G.R. No. 169170, August 8, 2010 As project employees, respondents termination is
governed by Section 1 (c) and Section 2 (III), Rule
Doctrine: If the termination of project employees is XXIII (Termination of Employment), Book V of the
brought about by the completion of the contract or Omnibus Rules Implementing the Labor Code.In this
phase thereof, no prior notice is required. An employer case, the Labor Arbiter, the NLRC and the Court of
need not comply with the twin-notice rule unless Appeals all found that respondents were validly
termination is due to a Just or Legal Cause under the terminated due to the completion of the phases of work

99
for which respondents services were engaged. The offers, Article 281 should assume primacy and the
above rule clearly states, If the termination is brought fixed-period character of the contract must give way.
about by the completion of the contract or phase This conclusion is immeasurably strengthened by the
thereof, no prior notice is required. petitioners and the AMACCs hardly concealed
expectation that the employment on probation could
Cioco, Jr. v. C.E. Construction Corporation explained lead to permanent status, and that the contracts are
that this is because completion of the work or project renewable unless the petitioners fail to pass the
automatically terminates the employment, in which schools standards.
case, the employer is, under the law, only obliged to
render a report to the DOLE on the termination of the If the school were to apply the probationary standards
employment. (as in fact it says it did in the present case), these
standards must not only be reasonable but must have
YOLANDA M. MERCADO v. AMA COMPUTER also been communicated to the teachers at the start of
COLLEGE-PARAAQUE CITY, INC. the probationary period, or at the very least, at the start
G.R. No. 183572, April 13, 2010, Brion of the period when they were to be applied. These
terms, in addition to those expressly provided by the
The petitioners were faculty members who started Labor Code, would serve as the just cause for the
teaching at AMACC. AMACC implemented new faculty termination of the probationary contract. As explained
screening guidelines, set forth in its Guidelines on the above, the details of this finding of just cause must be
Implementation of AMACC Faculty Plantilla. Pursuant communicated to the affected teachers as a matter of
to said guidelines, entitlement to salary increase was due process.
determined. The petitioners failed to obtain a passing
rating based on the performance standard, and hence, While we can grant that the standards were duly
were not entitled to said increase. This prompted them communicated to the petitioners and could be applied
to file with the NLRC complaint for underpayment of beginning the 1st trimester of the school year 2000-
wages, inter alia. 2001, glaring and very basic gaps in the schools
AMACC countered that Petitioners were under a evidence still exist. The exact terms of the standards
contracted term and under a non-tenured appointment were never introduced as evidence; neither does the
and were still within the three-year probationary period evidence show how these standards were applied to
for teachers. Their contracts were not renewed for the the petitioners.[48] Without these pieces of evidence
following term because they failed to pass the (effectively, the finding of just cause for the non-
Performance Appraisal System for Teachers (PAST) renewal of the petitioners contracts), we have nothing
while others failed to comply with the other to consider and pass upon as valid or invalid for each
requirements for regularization, promotion, or increase of the petitioners. Inevitably, the non-renewal (or
in salary. effectively, the termination of employment of
employees on probationary status) lacks the
ISSUE supporting finding of just cause that the law requires
Should the teachers probationary status be and, hence, is illegal.
disregarded simply because the contracts were fixed-
term? COLEGIO DEL SANTISIMO ROSARIO AND SR.
ZENAIDA S. MOFADA, OP v. EMMANUEL ROJO
HELD GR. No. 170388, September 04, 2013, Del Castillo
NO. To be sure, nothing is illegitimate in defining the
school-teacher relationship in this manner. The school, Colegio del Santisimo Rosario (CSR) hired respondent
however, cannot forget that its system of fixed-term as a high school teacher on probationary basis for the
contract is a system that operates during the school years 1992-1993, 1993-19947 and 1994-1995.
probationary period and for this reason is subject to On April 5, 1995, CSR, through Mofada, decided not to
the terms of Article 281 of the Labor Code. Unless this renew respondents services.
reconciliation is made, the requirements of this Article
on probationary status would be fully negated as the Thus, on July 13, 1995, respondent filed a Complaint
school may freely choose not to renew contracts for illegal dismissal. He alleged that since he had
simply because their terms have expired.The served three consecutive school years which is the
inevitable effect of course is to wreck the scheme that maximum number of terms allowed for probationary
the Constitution and the Labor Code established to employment, he should be extended permanent
balance relationships between labor and employment. Citing paragraph 75 of the 1970 Manual
management. of Regulations for Private Schools (1970 Manual),
respondent asserted that full- time teachers who have
Given the clear constitutional and statutory intents, we rendered three (3) consecutive years of satisfactory
cannot but conclude that in a situation where the services shall be considered permanent.
probationary status overlaps with a fixed-term
contract not specifically used for the fixed term it On the other hand, petitioners argued that respondent

100
knew that his Teachers Contract for school year 1994- postgraduate degrees. The two enrolled in graduate
1995 with CSR would expire on March 31, studies but failed to finish it. UE extended probationary
1995. Accordingly, respondent was not dismissed but appointments to Bueno and Pepanio. The Dean of the
his probationary contract merely expired and was not UE College of Arts and Sciences, sent notices to
renewed. Petitioners also claimed that the three probationary faculty members, reminding them of the
years mentioned in paragraph 75 of the 1970 Manual expiration of the probationary status of those lacking in
refer to 36 months, not three school years. And since postgraduate qualification. Pepanio replied that she
respondent served for only three school years of 10 was enrolled at the PUP while Bueno later wrote UE,
months each or 30 months, then he had not yet served demanding that it consider her a regular employee
the three years or 36 months mentioned in paragraph based on her six-and-a-half-year service. Pepanio
75 of the 1970 Manual. cited her 3.5 years service. Respondents filed cases of
illegal dismissal against the school before the LA.
ISSUE
Whether or not Rojo has acquired permanent status ISSUE
Whether or not UE illegally dismissed Bueno and
HELD Pepanio.
Yes. The common practice is for the employer and the
teacher to enter into a contract, effective for one HELD
school year. At the end of the school year, the No. The policy requiring postgraduate degrees of
employer has the option not to renew the contract, college teachers was provided in the Manual of
particularly considering the teachers performance. Regulations as early as 1992. The requirement of a
masteral degree for tertiary education teachers is not
If the contract is not renewed, the employment unreasonable. The operation of educational institutions
relationship terminates. If the contract is renewed, involves public interest. The government has a right to
usually for another school year, the probationary ensure that only qualified persons, in possession of
employment continues. Again, at the end of that sufficient academic knowledge and teaching skills, are
period, the parties may opt to renew or not to renew allowed to teach in such institutions. Government
the contract. If renewed, this second renewal of the regulation in this field of human activity is desirable for
contract for another school year would then be the last protecting, not only the students, but the public as well
year since it would be the third school year of from ill-prepared teachers, who are lacking in the
probationary employment. required scientific or technical knowledge. They may
be required to take an examination or to possess
At the end of this third year, the employer may now postgraduate degrees as prerequisite to employment.
decide whether to extend a permanent appointment to Respondents were each given only semester-to-
the employee, primarily on the basis of the employee semester appointments from the beginning of their
having met the reasonable standards of competence employment with UE precisely because they lacked
and efficiency set by the employer. For the entire the required master's degree. It was only when UE and
duration of this three-year period, the teacher remains the faculty union signed their 2001 CBA that the school
under probation. extended petitioners a conditional probationary status
subject to their obtaining a master's degree within their
Upon the expiration of his contract of employment, probationary period. It is clear, therefore, that the
being simply on probation, he cannot automatically parties intended to subject respondents' permanent
claim security of tenure and compel the employer to status appointments to the standards set by the law
renew his employment contract. It is when the yearly and the university.
contract is renewed for the third time that Section 93 of
the manual becomes operative, and the teacher then HERRERA-MANAOIS V. ST. SCHOLASTICAS
is entitled to regular or permanent employment status. COLLEGE
G.R. No. 188914, December 11, 2013, Sereno
UNIVERSITY OF THE EAST V. PEPANIO
G.R. No. 193897, January 23, 2013 SSC, situated in the City of Manila, is a private
educational institution offering elementary, secondary,
DECS required college faculty members to have a and tertiary education. Manaoisapplied for a position
master's degree as a minimum educational as fulltime instructor for school year 20002001. She
qualification for acquiring regular status. In 1994, UE mentioned in her application letter that she had been
and its union executed a CBA with effect up to 1999 taking the course Master of Arts in English Studies,
which provided that UE shall extend only semester-to- Major in Creative Writing, at the University of the
semester appointments to college faculty staffs who Philippines, Diliman (UP); that she was completing her
did not possess the minimum qualifications. UE hired masters thesis; and that her oral defense was
the two respondents on a semester-to-semester basis scheduled for June 2000.Her application was
to teach in its college. They could not qualify for approved and herprobationary employment continued
probationary or regular status because they lacked for a total of three consecutive years.Upon completion

101
of her third year of probationary employment, she 2003, Salas ran out of Quickboxes he failed to
received a letter from the Dean of College and promptly inform his immediate supervisor of the non-
Chairperson of the Promotions and Permanency Board delivery of the requisitioned items thus hampering the
officially informing her of the boards decision not to operations of Aboitiz. After due notices and an
renew her contract because of her failure to finish her administrative hearing conducted, he was dismissed
masters degree. for neglect of duty and wilful breach of trust. Salas filed
a complaint for illegal dismissal.
ISSUE
Whether the completion of a masters degree is ISSUE
required in order for a tertiary level educator to earn Does the single act (omission) of an employee
the status of permanency in a private educational constitute gross neglect so as to warrant the penalty of
institution? dismissal?

HELD RULING
Yes.Art. 281.of the Labor Code provides, Probationary No. Gross negligence connotes want or absence of or
employment shall not exceed six (6) months from the failure to exercise slight care or diligence, or the entire
date the employee started working, unless it is covered absence of care. It evinces a thoughtless disregard of
by an apprenticeship agreement stipulating a longer consequences without exerting any effort to avoid
period. The services of an employee who has been them. To warrant removal from service, the negligence
engaged on a probationary basis may be terminated should not merely be gross, but also habitual.
for a just cause or when he fails to qualify as a regular Undoubtedly, it was Salas duty, as material controller,
employee in accordance with reasonable standards to monitor and maintain the availability and supply of
made known by the employer to the employee at the Quickbox needed by Aboitiz in its day-to-day
time of his engagement. An employee who is allowed operations, and on June 4, 2003, Aboitiz had run out of
to work after a probationary period shall be considered Large Quickbox. However, records show that Salas
a regular employee. made a requisition for Quickbox as early as May 21,
2003; that he made several follow-ups with Eric
At this juncture, we reiterate the rule that mere Saclamitao regarding the request; and that he even
completion of the threeyear probation, even with an talked to the supplier to facilitate the immediate
aboveaverage performance, does not guarantee that delivery of the Quickbox. It cannot be gainsaid that
the employee will automatically acquire a permanent Salas exerted efforts to avoid a stock out of Quickbox.
employment status. It is settled jurisprudence that the Accordingly, he cannot be held liable for gross
probationer can only qualify upon fulfillment of the negligence.
reasonable standards set for permanent employment
as a member of the teaching personnel. In line with His failure to notify his supervisor did not amount to
academic freedom and constitutional autonomy, an gross neglect of duty or to willful breach of trust, which
institution of higher learning has the discretion and would justify his dismissal from service. Salas, as
prerogative to impose standards on its teachers and material controller was tasked with monitoring and
determine whether these have been met. Upon maintaining the availability and supply of Quickbox.
conclusion of the probation period, the college or There appears nothing to suggest that Salas position
university, being the employer, has the sole was a highly or even primarily confidential position, so
prerogative to make a decision on whether or not to that he can be removed for loss of trust and
rehire the probationer. The probationer cannot confidence by the employer. No just cause exists to
automatically assert the acquisition of security of warrant Salas dismissal. Consequently, he is entitled
tenure and force the employer to renew the to reinstatement to his former position without loss of
employment contract. In the case at bar, Manaois seniority rights, and to payment of backwages.
failed to comply with the stated academic qualifications
(Holder of a masters degree, to teach largely in his RB MICHAEL PRESS V. GALIT
major field) required for the position of a permanent G.R. No. 153510, February 13, 2008, Velasco
fulltime faculty member.
Respondent was employed by petitioner R.B. Michael
SECURITY OF TENURE Press as an offset machine operator. During his
employment, Galit was tardy for a total of 190 times
SALAS V. ABOITIZ ONE and was absent without leave for a total of nine and a
G.R. No. 178236, June 27, 2008, Nachura half days. He was ordered to render overtime service
in order to comply with a job order deadline, but he
Salas was hired as an assistant utility man by Aboitiz refused to do so. The following day respondent
who eventually became material controller after a few reported for work but petitioner Escobia told him not to
years. He was tasked with monitoring and maintaining work, and to return later in the afternoon for a hearing.
the availability and supply of Quickbox needed by When he returned, a copy of an Office Memorandum
Aboitiz in its day-to-day operations. Some time in was served on him. Petitioners aver that Galit was

102
dismissed due to the following offenses: (1) tardiness What the lower tribunals perceived as laxity, we
constituting neglect of duty; (2) serious misconduct; consider as leniency. SMCs tendency to excuse
and (3) insubordination or willful disobedience. justified absences actually redounded to the benefit of
Respondent subsequently filed a complaint for illegal respondent since the imposition of the corresponding
dismissal and money claims before the National Labor penalty would have been deleterious to him. In a world
Relations Commission (NLRC). The CA found that it where no work-no pay is the rule of thumb, several
was not the tardiness and absences committed by days of suspension would be difficult for an ordinary
respondent, but his refusalto render overtime work working man like respondent. He should be thankful
which caused the termination of his employment. that SMC did not exact from him almost 70 days
Itfurther ruled that the basis for computing his suspension before he was finally dismissed from work.
backwages should be his daily salary at the time of his
dismissal which was PhP 230, and that his backwages In any case, when SMC imposed the penalty of
should be computed from the time of his dismissal up dismissal for the 12th and 13th AWOPs, it was acting
to the finality of the CAs decision well within its rights as an employer. An employer has
the prerogative to prescribe reasonable rules and
ISSUES regulations necessary for the proper conduct of its
Whether there was just cause to terminate the business, to provide certain disciplinary measures in
employment of respondent order to implement said rules and to assure that the
RULING same would be complied with. An employer enjoys a
Respondent did not adduce any evidence to show wide latitude of discretion in the promulgation of
waiver or condonation on the part of petitioners. Thus policies, rules and regulations on work-related
the finding of the CA that petitioners cannot use the activities of the employees.
previous absences and tardiness because respondent
was not subjected to any penalty is bereft of legal It is axiomatic that appropriate disciplinary sanction is
basis. The petitioners did not impose any punishment within the purview of management imposition. Thus, in
for the numerous absences and tardiness of the implementation of its rules and policies, the
respondent. Thus, said infractions can be used employer has the choice to do so strictly or not, since
collectively by petitioners as a ground for dismissal. this is inherent in its right to control and manage its
business effectively. Consequently, management has
SAN MIGUEL CORPORATION V. NLRC the prerogative to impose sanctions lighter than those
G.R. Nos. 146121-22, April 16, 2008, Tinga specifically prescribed by its rules, or to condone
completely the violations of its erring employees. Of
It appears that per company records, respondent course, this prerogative must be exercised free of
(Ernesto M. Ibias) was AWOP( Absent without grave abuse of discretion, bearing in mind the
permission) on the following dates in 1997: 2, 4 and 11 requirements of justice and fair play. Indeed, we have
January; 26, 28 and 29 April; and 5, 7, 8, 13, 21, 22, previously stated:
28 and 29 May. For his absences on 2, 4 and 11
January and 28 and 29 April, he was given a written Management also has its own rights, which, as such,
warning[7] dated 9 May 1997 that he had already are entitled to respect and enforcement in the interest
incurred five (5) AWOPs and that further absences of simple fair play. Out of its concern for those with
would be subject to disciplinary action. For his [fewer] privileges in life, the Supreme Court has
absences on 28 and 29 April and 7 and 8 May, inclined more often than not toward the worker and
respondent was alleged to have falsified his medical upheld his cause in his conflicts with the employer.
consultation card by stating therein that he was Such favoritism, however, has not blinded the Court to
granted sick leave by the plant clinic on said dates rule that justice is in every case for the deserving, to
when in truth he was not. After the completion of the be dispensed in the light of the established facts and
investigation, SMC concluded that respondent applicable law and doctrine.
committed the offenses of excessive AWOPs and
falsification of company records or documents, and All told, we find that SMC acted well within its rights
accordingly dismissed him. The dismissal was when it dismissed respondent for his numerous
rendered without having the respondent previously absences. Respondent was afforded due process and
suspended for prior violations was validly dismissed for cause.

ISSUE LBC EXPRESS v. MATEO


Whether or not the dismissal was correct G.R. No. 168215, June 9, 2009, Corona

HELD Doctrine: To justify a dismissal, there must be gross


YES, Respondents dismissal was well within the and habitual negiligence. However, the habituality may
purview of SMCs management prerogative. be dispensed with if the negligence is so gross that
there was substiantial loss in the company. An
employer cannot legally be compelled to continue with

103
the employment of a person admittedly guilty of gross ISSUE
negligence in the performance of his duties. Whether or not Genuino is entitled to payment of such
salaries.
James Mateo, designated as a customer associate,
was a regular employee of LBC Express (LBC). His job HELD
was to deliver and pick-up packages to and from LBC No, since the dismissal was valid. Citibank had valid
and its customers. One day, Mateo arrived at LBCs grounds to dismiss Genuino on ground of loss of
Escolta office, to drop off packages coming from confidence. The NLRC's order for payroll
various LBC airposts. He parked his motorcycle reinstatement is set aside. The employee shall either
directly in front of the LBC office, switched off the be admitted back to work under the same terms and
engine and took the key with him. He returned conditions prevailing prior to his dismissal or
promptly within three to five minutes but the separation or, at the option of the employer, merely
motorcycle was gone. After investigation, he received reinstated in the payroll. The posting of a bond by the
a notice of termination from LBC. He was barred from employer shall not stay the execution for reinstatement
reporting for work. provided herein. If the decision of the labor arbiter is
later reversed on appeal upon the finding that the
ISSUE ground for dismissal is valid, then the employer has
Whether Mateo was grossly negligent in the the right to require the dismissed employee on payroll
performance of his duties reinstatement to refund the salaries s/he received
while the case was pending appeal, or it can be
RULING deducted from the accrued benefits that the dismissed
YES. Mateo was undisputedly negligent when he left employee was entitled to receive from his/her
the motorcycle along employer under existing laws, collective bargaining
Escolta, Manila without locking it despite clear, specific agreement provisions, and company practices.
instructions to do so. It proved that he did not exercise However, if the employee was reinstated to work
even the slightest degree of care during that very short during the pendency of the appeal, then the employee
time. Mateo deliberately did not heed the employers is entitled to the compensation received for actual
very important precautionary measure to ensure the services rendered without need of refund. Considering
safety of company property. Although Mateos that Genuino was not reinstated to work or placed on
infraction was not habitual, we must take into account payroll reinstatement, and her dismissal is based on a
the substantial amount lost. In this case, LBC lost a just cause, then she is not entitled to be paid the
motorcycle with a book value of P46,000 which by any salaries.
means could not be considered a trivial amount.
EDUARDO BUGHAW, JR. v. TREASURE ISLAND
MARILOU S. GENUINO v. NLRC INDUSTRIAL CORPORATION
G.R. Nos. 142732-33, December 4, 2007, Velasco G.R. No. 173151, March 28, 2008, Chico Nazario

Genuino was employed by Citibank as Treasury Sales Petitioner was employed as production worker by
Division Head with the rank of Assistant Vice- respondent. Respondent was receiving information
President. Citibank sent Genuino a letter charging her that many of its employees were using prohibited
with "knowledge and/or involvement" in transactions drugs during working hours and within the company
"which were irregular or even fraudulent and was premises. Petitioner was impleaded by one Loberanes
informed she was under preventive suspension. Later, in the crime by claiming that part of the money used for
after investigation and administrative hearing, buying illegal drugs was given by him. A notice was
Genuino's employment was terminated by Citibank on given by respondent company to petitioner to explain
grounds of (1) serious misconduct, (2) willful breach of why no disciplinary action be taken against him.
the trust reposed upon her by the bank, and (3) Notwithstanding such petitioner failed to appear before
commission of a crime against the bank. She filed the respondents legal counsel on the scheduled
before the Labor Arbiter a Complaint for illegal hearing date and to explain his side on the matter.
suspension and illegal dismissal with damages and Petitioner was then terminated without notice. Hence
prayer for temporary restraining order and/or writ of he filed an illegal dismissal against his employer.
preliminary injunction. The LA found there was illegal
dismissal and ordered for Genuinos reinstatement. ISSUE
The NLRC reversed the Labor Arbiter's decision with Whether petitioner was illegally dismissed
the following modification: (1) DECLARING the
dismissal of the complainant valid but (2) ORDERING HELD
the respondent bank to pay the salaries due to the YES. Under the Labor Code, the requirements for the
complainant from the date it reinstated complainant in lawful dismissal of an employee are two-fold, the
the payroll as found by the Labor Arbiter up to and until substantive and the procedural aspects. Not only must
the date of its (NLRC) decision. CA affirmed NLRC. the dismissal be for a just or authorized cause, the
rudimentary requirements of due process - notice and

104
hearing must, likewise, be observed before an Morenos dismissal from employment in accordance
employee may be dismissed. Without the concurrence with the school manual, but Dean Espejo dissented
of the two, the termination would, in the eyes of the and called only for a suspension for one semester.
law, be illegal, for employment is a property right of Moreno was terminated in her work. Moreno instituted
which one cannot be deprived of without due process. with the NLRC a complaint for illegal termination
While there is no dispute that respondent fully against SSC-R.
complied with the first-notice requirement apprising
petitioner of the cause of his impending termination ISSUE
and giving him the opportunity to explain his side, we Whether or not the dismissal of Moreno was proper
find that it failed to satisfy the need for a second notice and legal?
informing petitioner that he was being dismissed from
employment. HELD
No. The misconduct of Moreno falls below the required
Further, the Agabon doctrine enunciates the rule that if level of gravity that would warrant dismissal as a
the dismissal was for just cause but procedural due penalty. Under Art. 282(a) of the Labor Code, willful
process was not observed, the dismissal should be disobedience of the employers lawful orders as a just
upheld. Where the dismissal is for just cause, as in the cause for termination of employment envisages the
instant case, the lack of statutory due process should concurrence of at least two requisites: (1) the
not nullify the dismissal or render it illegal or employees assailed conduct must have been willful or
ineffectual. However, the employer should indemnify intentional, the willfulness being characterized by a
the employee for the violation of his right to procedural "wrongful and perverse attitude"; and (2) the order
due process. violated must have been reasonable, lawful, made
known to the employee and must pertain to the duties
MORENO v. SAN SEBASTIAN which he has been engaged to discharge. SSC-R
G.R. No. 175283, March 28, 2008, March 28, 2008 failed to adduce any concrete evidence to prove that
Moreno indeed harbored perverse or corrupt
Jackqui R. Moren is an employee, a teaching fellow in motivations in violating the school policy. Even if
San Sebastian College (SSC-R). Moreno was first dismissal for cause is the prescribed penalty for the
appointed as a full-time college faculty member. Then, misconduct committed, it is disproportionate to the
Moreno became a member of the permanent college offense. The Court deems it appropriate to impose the
faculty. The SSC-R HR conducted a formal penalty of suspension of 1 year on Moreno.
investigation regarding Morenos unauthorized external
teaching engagements and HR found out that Moreno JANSENN PHARMACEUTICA v. SILAYRO
indeed had unauthorized teaching assignments at the G.R. No. 172528, February 26, 2008, Chico Nazario
Centro Escolar University and at the College of the
Holy Spirit, Manila. Moreno received a MEMO from the Petitioner is the division of Johnson & Johnson
Dean of her college, requiring her to explain the Philippines Inc. engaged in the sale and manufacture
reports regarding her unauthorized teaching of pharmaceutical products. Petitioner employed
engagements. The said activities allegedly violated respondent as Territory/Medical Representative.
Section 2.2 of Article II of SSC-Rs Faculty Manual. During his employment, respondent received from
Moreno admitted her failure to secure any written petitioner several awards and citations. On the dark
permission before she taught in other schools. Moreno side, however, respondent was also investigated for,
further stated that it was never her intention to and in some cases found guilty of, several
jeopardize her work in SSC-R and that she merely administrative charges. Petitioner issued a Notice of
wanted to improve her familys poor financial Disciplinary Action finding respondent guilty of the
conditions. A Special Grievance Committee was then following offenses (1) delayed submission of process
formed in order to investigate and make reports, for which he was subjected to a one-day
recommendations regarding Morenos case. Moreno suspension without pay, effective 24 November
admitted she did not formally disclose her teaching 1998; and (2) cheating in his ROL test, for which he
loads at the College of the Holy Spirit and at the was subjected again to a one-day suspension.
Centro Escolar University; that the Dean of her college Petitioner then terminated the services of respondent.
was aware of her external teaching loads; that she Petitioner found respondent guilty of dishonesty in
went beyond the maximum limit for an outside load; accomplishing the report on the number of product
that she did not deny teaching part-time in the samples in his possession and failing to return the
aforementioned schools; and that she did not wish to company vehicle and his other accountabilities in
resign because she felt she deserved a second violation of Sections 9.2.9 and 9.2.4 of the Code of
chance. The grievance committee issued its resolution Conduct. Petitioner also found respondent to be a
which unanimously found that she violated the habitual offender whose previous offenses included:
prohibition against a full-time faculty having an (1) Granting unauthorized premium/free goods to
unauthorized external teaching load. The majority of customer in 1994; (2) Unauthorized pull-out of stocks
the grievance committee members recommended from customer in 1994; (3) Delay in submission of

105
reports despite oral admonition and written reprimand charge, present his evidence, or rebut the
in 1998; and (4) Dishonesty in accomplishing other evidence presented against him.
accountable documents or instruments (in connection (iii) A written notice of termination served on the
with the ROL test) in 1998. Respondent filed a employee, indicating that upon due consideration of all
Complaint against petitioner and its officers for illegal the circumstances, grounds have been established to
dismissal. justify his termination.

ISSUE From the aforecited provision, it is implicit that these


Whether or not sufficient grounds existed for the requirements afford the employee an opportunity to
dismissal of the respondent explain his side, respond to the charge, present his or
her evidence and rebut the evidence presented
RULING against him or her.
No. In termination cases, the burden of proof rests with
the employer to show that the dismissal is for just and The superficial compliance with two notices and a
valid cause. Failure to do so would necessarily mean hearing in this case cannot be considered valid where
that the dismissal was not justified and therefore was these notices were issued and the hearing made
illegal. Dishonesty is a serious charge, which the before an offense was even committed. The first
employer must adequately prove, especially when it is notice, issued on 24 November 1998, was premature
the basis for termination. since respondent was obliged to return his
In this case, petitioner had not been able to identify an accountabilities only on 25 November 1998. As
act of dishonesty, misappropriation, or any illicit act, respondents preventive suspension began on 25
which the respondent may have committed in November 1998, he was still performing his duties as
connection with the erroneously reported product territory representative the day before, which required
samples. While respondent was admittedly negligent in the use of the company car and other company
filling out his August and September 1998 DCR, his equipment. During the administrative hearing on 3
errors alone are insufficient evidence of a dishonest December 1998, both parties clarified the confusion
purpose. Since fraud implies willfulness or wrongful caused by the petitioners premature notice and
intent, the innocent non-disclosure of or inadvertent agreed that respondent would surrender his
errors in declaring facts by the employee to the accountabilities as soon as the petitioner gave its
employer will not constitute a just cause for the instructions. Since petitioners ostensible compliance
dismissal of the employee. In addition, the subsequent with the procedural requirements of notice and hearing
acts of respondent belie a design to misappropriate took place before an offense was even committed,
product samples. So as to escape any liability, respondent was robbed of his rights to explain his side,
respondent could have easily just submitted for audit to present his evidence and rebut what was presented
only the number of product samples which he against him, rights ensured by the proper observance
reported. Instead, respondent brought all the product of procedural due process.
samples in his custody during the audit and,
afterwards, honestly admitted to his negligence. SUICO V. NLRC
Negligence is defined as the failure to exercise the G.R. No. 146762, January 30, 2007, Austria-Martinez
standard of care that a reasonably prudent person
would have exercised in a similar situation. To this Suico, Ceniza, Dacut (complainants were regular
Court, respondent did not commit any willful violation, employees of Philippine Long Distance Telephone
rather he merely failed to exercise the standard care Company (PLDT) Cebu Jones Exchange and
required of a territory representative to carefully count members of Manggagawa ng Komunikasyon ng
the number of product samples delivered to him in Pilipinas (MKP). MKP launched a strike against PLDT.
August and September 1998. Complainants participated in the strike by picketing the
Moreover, petitioner failed to observe procedural due PLDT. PLDT sent 2 notices to Suico et.al, for the acts
process in connection with the aforementioned charge. of violation that happen during the strike. But the
Section 2(d) of Rule 1 of The Implementing Rules of complainant failed to provide the required written
Book VI states that: explanation the acts charged to them. They replied
informing, that they opt to exercise their rights to due
For termination of employment based on just causes process and request to furnish a copy of the formal
as defined in Article 282 of the Labor Code: written complain, statement of witness/es and
(i) A written notice served on the employee specifying preliminary investigations and/or report/s conducted on
the ground or grounds for termination, and giving said the aforesaid incident, if any. PLDT findings based on
employee reasonable opportunity within which to the available evidence found the complainants guilty
explain his side. and were subsequently terminated.
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so ISSUE:
desires is given opportunity to respond to the Whether PLDT violated the requirements of due
process under the Labor Code when it dismissed said

106
employees without heeding their request for the employee ample opportunity to be heard and to defend
conduct of a formal hearing as provided for under himself with the assistance of his representative if he
PLDT Systems Practice No. 94-016 and prior to so desires. The omnibus rules implementing the Labor
submission of their respective answers to the charges Code, on the other hand, require a hearing and
against them. conference during which the employee concerned is
given the opportunity to respond to the charge, present
RULING his evidence or rebut the evidence presented against
The procedure adopted by PLDT in dismissing Suico, him. We reaffirm the time-honored doctrine that, in
et al. fell short of the requirements of due process. case of conflict, the law prevails over the
PLDT complied with the two-notice requirement of due administrative regulations implementing it.
process. The first notices sent to Suico, et al. set out in
detail the nature and circumstances of the violations The following are the guiding principles in connection
imputed to them, required them to explain their side with the hearing requirement in dismissal cases:
and expressly warned them of the possibility of their (a) ample opportunity to be heard means any
dismissal should their explanation be found wanting. meaningful opportunity (verbal or written) given to
The last notices informed Suico, et al. of the decision the employee to answer the charges against him and
to terminate their employment and cited the evidence submit evidence in support of his defense, whether
upon which the decision was based. These two notices in a hearing, conference or some other fair, just and
would have sufficed had it not been for the existence reasonable way.
of Systems Practice No. 94-016. Under Systems (b) a formal hearing or conference becomes
Practice No. 94-016, PLDT granted its employee the mandatory only when requested by the employee in
alternative of either filing a written answer to the writing or substantial evidentiary disputes exist or a
charges or requesting for opportunity to be heard and company rule or practice requires it, or when similar
defend himself with the assistance of his counsel or circumstances justify it.
union representative, if he so desires. (c) the ample opportunity to be heard standard in the
Labor Code prevails over the hearing or conference
Suico, et al. exercised their option under Systems requirement in the implementing rules and
Practice No. 94-016 by requesting that a formal regulations.
hearing be conducted and that they be given copies of
sworn statements and other pertinent documents to Note: Petitioners in this case, however, were found to
enable them to prepare for the hearing. This option is be illegally dismissed as there was no just cause for
part of their right to due process. PLDT is bound to the termination of their employment.
comply with the Systems Practice. Company policies
or practices are binding on the parties. Some can ripen BACOLOD-TALISAY REALTY AND DEVELOPMENT
into an obligation on the part of the employer, such as CORPORATION, et al. v. ROMEODELA CRUZ
those which confer benefits on employees or regulate G.R. No. 179563
the procedures and requirements for their termination
Respondent as an employee of the petitioner made the
PEREZ v. PT&T following: payroll paddling, selling canepoints without
G.R. No. 152048, April 7, 2009, Corona the knowledge and consent of the petitioner and
misappropriating the said proceeds and also renting
Petitioners Felix Perez and Amante Doria were out the tractor to be used on another farm. Due to this,
employed by respondent Philippine Telegraph and he was suspended for 30 days through a letter
Telephone Company. They later received a informing him of such suspension and after 30 days he
memorandum dismissing them from the service for received another letter informing him that he was
having falsified company documents, prompting them dismissed from work.
to file a complaint for illegal dismissal on the ground
that they were dismissed on the same date that they ISSUE
received the said memorandum. Petitioners argue that WON petitioner observed due process in dismissing
due process was not observed in the absence of a respondent
hearing in which they could have explained their side.
RULING
ISSUE No, petitioner did not comply due to the fact that in
Is a hearing (or conference) mandatory in cases validly dismissing and employee two notices are
involving the dismissal of an employee? mandatory 1) a first notice to apprise him of his fault,
and 2) a second notice to him that his employment is
RULING being terminated.
No. We note a marked difference in the standards of
due process to be followed as prescribed in the Labor In the present case the first letter only informed him of
Code and its implementing rules. The Labor Code, on the suspension and did not effectively apprise him of
one hand, provides that an employer must provide the

107
his fault nor is given chance to present his side or be
heard. To be a valid ground for dismissal, loss of trust and
confidence must be based on a willful breach of trust
Although the petitioner did terminate him for a just and founded on clearly established facts. A breach is
cause, but the procedure was not followed. willful if it is done intentionally, knowingly and
purposely, without justifiable excuse, as distinguished
PRUDENTIAL GUARANTEE AND ASSURANCE from an act done carelessly, thoughtlessly, heedlessly
EMPLOYEE LABOR UNION AND SANDY T. or inadvertently. It must rest on substantial grounds
VALLOTA V. NATIONAL LABOR RELATIONS and not on the employers arbitrariness, whims,
COMMISSION, PRUDENTIAL GUARANTEE AND caprices or suspicion; otherwise, the employee would
ASSURANCE, INC., AND/OR JOCELYN RETIZOS remain eternally at the mercy of the employer. Further,
G.R. No. 185335, June 13, 2012, Mendoza in order to constitute a just cause for dismissal, the act
complained of must be work-related and show that the
Vallota worked with PGAI on May 16, 1995 as a Junior employee concerned is unfit to continue working for
Programmer assigned to the EDP Department the employer. Such ground for dismissal has never
reporting directly to his head Gerald Dy Victory, until been intended to afford an occasion for abuse
his replacement by Jocelyn Retizos sometime in 1997. because of its subjective nature.
In Aug. 2005, Vallota was elected to the Board of
Directors of the union. There was no other evidence presented to prove fraud
in the manner of securing or obtaining the files found in
On Nov. 11, 2005, PGAIs HR Manager Atty. Rillo Vallotas computer. In fact, aside from the presence of
invited union president Mike Apostol to his office to these files in Vallotas hard drive, there was no other
inform him that an on-the-spot security check in the IT evidence to prove any gross misconduct on his part.
Department will be conducted. PGAI network There was no proof either that the presence of such
administrator Angelo Gutierrez conducted an files was part of an attempt to defraud his employer or
inspection but did not find anything unusual with to use the files for a purpose other than that for which
Vallotas computed but Retizos insisted and took over they were intended. If anything, the presence of the
the inspection until she found a folder named MAA, a files reveals some degree of carelessness or neglect in
copy of which was saved and later printed but no copy his failure to delete them, but it is an extremely
was given to Vallota. farfetched conclusion bordering on paranoia to state
that it is part of a larger conspiracy involving corporate
On Nov. 14, 2005, Vallota received a memorandum espionage. If anything, the presence of the files would
directing him to explain within 72 hours why highly merely merit the development of some suspicion on
confidential files were stored in his computer and the part of the employer, but should not amount to a
placed him under a 30-day preventive suspension loss of trust and confidence such as to justify the
which was extended for another 30 days. The union termination of his employment.
requested that a grievance committee be convened
and that the contents of the computers of other IT (2) The following are the guiding principles in
personnel be similarly produced but this was ignored connection with the hearing requirement in dismissal
and a notice of termination was given to Vallota on the cases:
ground of loss of trust and confidence, prompting the (a) ample opportunity to be heard means any
union and Vallota to file a complaint for illegal meaningful opportunity (verbal or written) given to
dismissal. The LA, the NLRC, and the CA held that the employee to answer the charges against him
there was illegal dismissal. Hence, this petition. and submit evidence in support of his defense,
whether in a hearing, conference or some other
ISSUES fair, just and reasonable way.
1. Was Vallota validly dismissed on the ground of (b) a formal hearing or conference becomes
loss of trust and confidence? mandatory only when requested by the employee
2. Were the requirements of procedural due in writing or substantial evidentiary disputes exist
process for termination observed? or a company rule or practice requires it, or when
similar circumstances justify it.
HELD (c) the ample opportunity to be heard standard in
(1) No. Vallotas position as Junior Programmer is the Labor Code prevails over the hearing or
analogous to the second class of positions of trust and conference requirement in the implementing rules
confidence. The act alleged to have caused the loss of and regulations.
trust and confidence of PGAI in Vallota was the
presence in his computers hard drive of a folder In this case, the two-notice requirement was complied
named MAA allegedly containing files with information with. PGAI issued to Vallota a written Notice of
on MAA Mutual Life Philippines, a domestic Charges & Preventive Suspension (Ref. No. AC-05-
corporation selling life insurance policies to the buying 02) dated November 14, 2005. After an exchange of
public, and files relating to PGAIs internal affairs.

108
memoranda, PGAI then informed Vallota of his In a complaint dated August 10, 2007, respondent
dismissal in its decision dated December 21, 2005. Efren I. Sagad charged the petitioner Sampaguita Auto
Transport Corporation (company) with illegal dismissal
However, the Union and Vallota requested a and damages plus attorney's fees.
conference or a convening of a grievance committee,
such formal hearing became mandatory. After PGAI Sagad alleged that on May 14, 2006, the company
failed to affirmatively respond to such request, it hired him as a regular bus driver, not as a probationary
follows that the hearing requirement was not complied employee as the company claimed. He disowned his
with and, therefore, Vallota was denied his right to purported signature on the contract of probationary
procedural due process. Employment submitted in evidence by the company.
He maintained that his signature was forged. He
The petition was granted. further alleged that on November 5, 2006, he was
dismissed by the company for allegedly conniving with
COSMOS BOTTLING CO. V. FERMIN conductor Vitola in issuing tickets outside their
G.R. No. 194303, June 20, 2012, Sereno assigned route.

Wilson B. Fermin (Fermin) was a forklift operator at The company countered that it employed Sagad as a
Cosmos Bottling Corporation (COSMOS), where he probationary bus driver (evidenced by a probationary
started his employment on 27 August 1976 On 16 employment contract6) from May 14, 2006 to October
December 2002, he was accused of stealing the 14, 2006; he was duly informed of his corresponding
cellphone of his fellow employee, Luis Braga (Braga). duties and responsibilities. He was further informed
Fermin was then given a Show Cause Memorandum, that during the probationary period, his attendance,
requiring him to explain why the cellphone was found performance and work attitude shall be evaluated to
inside his locker. In compliance therewith, he determine whether he would qualify for regular
submitted an affidavit the following day, explaining that employment. For this purpose and as a matter of
he only hid the phone as a practical joke and had company policy, an evaluator was deployed on a
every intention of returning it to Braga. company bus (in the guise of a passenger) to observe
the drivers work performance and attitude.
After conducting an investigation, COSMOS found
Fermin guilty of stealing Bragas phone in violation of Allegedly, on September 21, 2006, an evaluator
company rules and regulations. Consequently, on 2 boarded Sagads bus. The evaluator described
October 2003, the company terminated Fermin from Sagads manner of driving as "reckless driver,
employment after 27 years of service. nakikipaggitgitan, nakikipaghabulan, nagsasakay sa
gitna ng kalsada, sumusubsob ang pasahero. Sagad
ISSUE disputed the evaluators observations. In an
Whether or not the termination is valid. explanation (rendered in Filipino), he claimed that he
could not have been driving as reported because his
RULING wife (who was pregnant) and one of his children were
Yes. Article 282(e) of the Labor Code talks of other with him on the bus. He admitted though that at one
analogous causes or those which are susceptible of time, he chased an "Everlasting" bus to serve warning
comparison to another in general or in specific detail on its driver not to block his bus when he was
as a cause for termination of employment. A cause overtaking. He also admitted that once in a while, he
analogous to serious misconduct is a voluntary and/or sped up to make up for lost time in making trips.
willful act or omission attesting to an employees moral
depravity. Theft committed by an employee against a On October 15, 2006, upon conclusion of the
person other than his employer, if proven by evaluation, the company terminated Sagads
substantial evidence, is a cause analogous to serious employment for his failure to qualify as a regular
misconduct. Previous infractions may be cited as employee.
justification for dismissing an employee only if they are
related to the subsequent offense. However, it must be ISSUE
noted that such a discussion was unnecessary since Whether or not Sagad is a regular employee
the theft, taken in isolation from Fermins other
violations, was in itself a valid cause for the termination RULING
of his employment. Sagad was dismissed, not as a probationary
employee, but as one who had attained regular status.
SAMPAGUITA AUTO TRANSPORT CORPORATION The companys evidence on Sagads purported hiring
v. NATIONAL LABOR RELATIONS COMMMISSION as a probationary employee is inconclusive. To start
and EFREN I. SAGAD with, Sagad denied that he entered into a probationary
G.R. No. 197384, January 30, 2013, Brion employment contract with the company, arguing that
the signature on the supposed contract was not his.
He also denied receiving the alleged notice terminating

109
his probationary employment. The same thing is true intended to benefit Rapid Movers and Forwarders. The
with his purported letter asking that he be given SC also took into consideration the fact that Dongon
another chance to work for the company. He asserts had served respondent for seven long unblemished
that not only is the letter not in his handwriting, the years, thus, arriving at a conclusion that his dismissal
signature on the letter was also not his. was plainly unwarranted.
The records indicate that he was retained even beyond
the expiration of his supposed probationary The SC reiterated that an employer is given wide
employment on October 14, 2006. As the NLRC noted, latitude of discretion in managing its own affairs. But
Sagad claimed that he was dismissed by the company the exercise of management prerogative is not
on November 5, 2006, after he was accused of limitless, but hemmed in by good faith and due
conniving with conductor Vitola in issuing tickets consideration of the rights of employees.
outside their assigned route.
The company never refuted this particular assertion of ALILEM CREDIT COOPERATIVE, INC. v.
Sagad and its silence can only mean that Sagad BANDIOLA, JR.
remained in employment until November 4, 2006, G.R. No. 173489, February 25, 2013
thereby attaining regular status as of that date. Under
the law, "an employee who is allowed to work after a Respondent was employed by petitioner as
probationary period shall be considered a regular bookkeeper. Petitioner's Board of Directors (the Board)
employee. received a letter from a certain Napoleon Gao-ay
(Napoleon) reporting the alleged immoral coaduct and
NATHANIEL N. DONGON v. RAPID MOVERS unbecoming behavior of respondent by having an illicit
AND FORWARDERS CO., INC., AND/OR relationship with Napoleons sister, Thelma G. Palma
NICANOR E. JAO, JR. (Thelma). This prompted the Board to conduct a
G.R. No. 163431, August 28, 2013, Bersamin preliminary investigation. In its Summary Investigation
Report, the Ad Hoc Committee concluded that
Dongon is a truck helper leadman in Rapid Movers respondent was involved in an extra-marital affair with
and Forwarders. Dongons area of assignment is in Thelma. Respondent was informed of Board
Tanduay Otis Warehouse where he and his driver Resolution embodying the Boards decision to
Villaruz tried to get the goods to be distributed to terminate his services as bookkeeper of petitioner,
clients. To get the clearance for the release of goods, effective July 31, 1997, without any compensation or
Dongon lent his ID card to Villaruz. But, the security benefit except the unpaid balance of his regular salary
guard noticed the misrepresentation, accosted them, for services actually rendered. Aggrieved, respondent
and reported the matter to the management of filed a Complaint for Illegal Dismissal against petitioner
Tanduay. Dongon was dismissed from work due to before the NLRC.
willful disobedience. He now claims that he was
illegally dismissed from work. ISSUE
W/N respondent's dismissal from employment is valid
He argues that the dismissal as a penalty is too harsh
and disproportionate to his supposed violation. Said HELD
violation was only his first infraction and was even YES. To be sure, an employer is free to regulate all
committed in good faith without malice. Rapid Movers aspects of employment. It may make reasonable rules
and Forwarders argues that they rightly exercised their and regulations for the government of its employees
power to dismiss petitioner on the ground of violation which become part of the contract of employment
of the companys manual of discipline. provided they are made known to the employee. In the
event of a violation, an employee may be validly
The LA dismissed the complaint. NLRC reversed the terminated from employment on the ground that an
LA. The CA affirmed the decision of the NLRC. employer cannot rationally be expected to retain the
employment of a person whose lack of morals, respect
ISSUE and loyalty to his employer, regard for his employers
Was the dismissal of Dongon legal? rules and application of the dignity and responsibility,
has so plainly and completely been bared.
HELD
NO. Dongon was illegally dismissed. The SC held that While respondents act of engaging in extra--marital
the disobedience attributed to Dongon could not be affairs may be considered personal to him and does
justly characterized as willful within the contemplation not directly affect the performance of his assigned task
of the law. Wilfullness must be attended by a wrongful as bookkeeper, aside from the fact that the act was
and perverse mental attitude rendering the specifically provided for by petitioners Personnel
eomployees act inconsistent with proper Policy as one of the grounds for termination of
subordination. Dongon did not benefit from it nor was employment, said act raised concerns to petitioner as
the business of respondent prejudiced. The Court the Board received numerous complaints and petitions
believed Dongons explanation that his deed had been from the cooperative members themselves asking for

110
the removal of respondent because of his immoral ones duties. Habitual neglect imparts repeated failure
conduct. to perform ones duties for a period of time, depending
on the circumstances. Under these standards and the
CAVITE APPAREL, INCORPORATED and circumstances obtaining in the case, we agree with the
ADRIANO TIMOTEO v. MICHELLE MARQUEZ CA that Michelle is not guilty of gross and habitual
G.R. No. 172044, February 06, 2013 neglect of duties.

On August 22, 1994, Cavite Apparel hired Michelle as Even assuming that she failed to present a medical
a regular employee in its Finishing Department. certificate for her sick leave on May 8, 2000, the
Michelle enjoyed, among other benefits, vacation and records are bereft of any indication that apart from the
sick leaves of seven (7) days each per annum. Prior to four occasions when she did not report for work,
her dismissal on June 8, 2000, Michelle committed the Michelle had been cited for any infraction since she
following infractions (with their corresponding started her employment with the company in 1994.
penalties): Four absences in her six years of service, to our mind,
a. First Offense: Absence without leave (AWOL) cannot be considered gross and habitual neglect of
on December 6, 1999 written warning duty, especially so since the absences were spread
b. Second Offense: AWOL on January 12, 2000 out over a six-month period.
stern warning with three (3) days suspension Michelles penalty of dismissal too harsh or not
c. Third Offense: AWOL on April 27, 2000 proportionate to the infractions she committed
suspension for six (6) days. Michelle might have been guilty of violating company
rules on leaves of absence and employee discipline,
On May 8, 2000, Michelle got sick and did not report still we find the penalty of dismissal imposed on her
for work. When she returned, she submitted a medical unjustified under the circumstances. As earlier
certificate. Cavite Apparel, however, denied receipt of mentioned, Michelle had been in Cavite Apparels
the certificate. Michelle did not report for work on May employ for six years, with no derogatory record other
15-27, 2000 due to illness. When she reported back to than the four absences without official leave in
work, she submitted the necessary medical question, not to mention that she had already been
certificates. Nonetheless, Cavite Apparel suspended penalized for the first three absences, the most serious
Michelle for six (6) days (June 1-7, 2000). When penalty being a six-day suspension for her third
Michelle returned on June 8, 2000, Cavite Apparel absence on April 27, 2000.
terminated her employment for habitual absenteeism.
Michelle filed a complaint for illegal dismissal with While previous infractions may be used to support an
prayer for reinstatement, backwages and attorneys employees dismissal from work in connection with a
fees with the NLRC. subsequent similar offense, we cautioned employers in
an earlier case that although they enjoy a wide latitude
The NLRC noted that for Michelles first three of discretion in the formulation of work-related policies,
absences, she had already been penalized ranging rules and regulations, their directives and the
from a written warning to six days suspension. These, implementation of their policies must be fair and
the NLRC declared, should have precluded Cavite reasonable; at the very least, penalties must be
Apparel from using Michelles past absences as bases commensurate to the offense involved and to the
to impose on her the penalty of dismissal, considering degree of the infraction.
her six years of service with the company. It likewise
considered the penalty of dismissal too severe. The ESGUERRA v. VALLE VERDE
NLRC thus concluded that Michelle had been illegally G.R. NO. 173012, June 13, 2012
dismissed and ordered her reinstatement with
backwages. The Court of Appeals affirmed the ruling On April 1, 1978, Valle Verde hired Esguerra as Head
of the NLRC. Food Checker. In 1999, she was promoted to Cost
Control Supervisor. On January 15, 2000, the Couples
ISSUE for Christ held a seminar at the country club. Esguerra
Whether Michelle was illegally dismissed, specifically: was tasked to oversee the seminar held in the two
a) Whether Michelles AWOLs were habitual function rooms the Ballroom and the Tanay Room.
b) Whether the dismissal imposed by Cavite
Apparel too harsh of a penalty The Valle Verde Management found out the following
day that only the proceeds from the Tanay Room had
RULING been remitted to the accounting department. There
Yes. were also unauthorized charges of food on the account
Michelles four absences were not habitual; "totality of of Judge Rodolfo Bonifacio, one of the participants.
infractions" doctrine not applicable. Neglect of duty, to
be a ground for dismissal under Article 282 of the On March 6, 2000, Valle Verde sent a memorandum to
Labor Code, must be both gross and habitual. Gross Esguerra
negligence implies want of care in the performance of requiring her to show cause as to why no disciplinary a

111
ction should be taken against her for the non- matching are unsuccessful, permanent retrenchment
remittance of the Ballrooms sales. Esguerra was takes place and separation pay is released.
placed under preventive suspension with pay, pending 2. Permanent retrenchment and payment of
investigation. In her letter-response, Esguerra denied separation pay and other benefits after the thirty (30)
having committed any misappropriation. Valle Verde days notice has lapsed; or
found Esguerras explanation unsatisfactory and, 3. Immediate retrenchment and payment of
on July 26, 2000, issued a second memorandum separation pay, benefits and one months salary in
terminating Esguerras employment. lieu of notice to allow you to look for other
employment opportunities.
ISSUE
Whether the dismissal is valid. Legend gave said employees a period of one week or
until January 14, 1998 to choose their option, with
HELD option number 2 (permanent retrenchment) as the
We now dwell on the substantive aspect of Esguerras default choice in case they failed to express their
dismissal. We have held that there are two (2) classes preferences.
of positions of trust the first class consists of
managerial employees, or those vested with the power Curiously, on the same day, the Labor and
to lay down management policies; and the second Employment Center of the Subic Bay Metropolitan
class consists of cashiers, auditors, property Authority advertised that Legend International Resorts,
custodians or those who, in the normal and routine Inc. was in need of employees for positions similar to
exercise of their functions, regularly handle significant those vacated by petitioners.
amounts of money or property.
After informing the retrenched employees of their
Esguerra held the position of Cost Control Supervisor retrenchment or option, Legend paid the retrenched
and had the duty to remit to the accounting department employees their salaries up to February 6, 1998,
the cash sales proceeds from every transaction she separation pay, pro-rated 13th-month pay, ex-gratia,
was assigned to. This is not a routine task that a meal allowance, unused vacation leave credits, and
regular employee may perform; it is related to the tax refund. Petitioners, in turn, signed quitclaims but
handling of business expenditures or finances. For this reserved their right to sue Legend.
reason, Esguerra occupies a position of trust and
confidence a position enumerated in the second class Subsequently, 14 of the 34 retrenched employees
of positions of trust. Any breach of the trust imposed filed a complaint for illegal dismissal and money claims
upon her can be a valid cause for dismissal. against Legend and its officials. Complainants alleged
that they were illegally dismissed because Legend,
RUBEN ANDRADA VS. NLRC after giving retrenchment as the reason for their
G.R. No. 173231, December 28, 2007, Velasco termination, created new positions similar to those they
had just vacated. Legend, on the other hand, invoked
Petitioners Ruben Andrada, Jovencio Poblete, Filamer management prerogative when it terminated the
Alfonso, Harvey Cayetano, Vicente Mantala, Jr., retrenched employees; and said that complainants
Bernaldo delos Santos, and Joven Pabustan were voluntarily signed quitclaims so that they were already
hired on various dates from 1995 up to 1997 and barred from suing Legend.
worked as architects, draftsmen, operators, engineers,
and surveyors in the Subic Legend Resorts and ISSUE
Casino, Inc. (Legend) Project Development Division on Whether petitioners were legally dismissed.
various projects.
HELD
Legend sent notice to the Department of Labor and NO. A companys exercise of its management
Employment of its intention to retrench and terminate prerogatives is not absolute. It cannot exercise its
the employment of thirty-four (34) of its employees, prerogative in a cruel, repressive, or despotic manner.
which include petitioners, in the Project Development The requirements for retrenchment are: (1) it is
Division. Legend explained that it would be retrenching undertaken to prevent losses, which are not merely de
its employees on a last-in-first-out basis. The following minimis, but substantial, serious, actual, and real, or if
day Legend sent the 34 employees their respective only expected, are reasonably imminent as perceived
notices of retrenchment, stating the same reasons for objectively and in good faith by the employer; (2) the
their retrenchment. It also offered the employees the employer serves written notice both to the employees
following options, to wit: and the DOLE at least one month prior to the intended
1. Temporary retrenchment/lay-off for a period not date of retrenchment; and (3) the employer pays the
to exceed six months within which we shall explore retrenched employees separation pay equivalent to
your possible reassignment to other departments or one month pay or at least month pay for every year of
affiliates, after six months and redeployment and/or service, whichever is higher. The Court later added the
requirements that the employer must use fair and

112
reasonable criteria in ascertaining who would be implemented by respondent was invalid and
dismissed and x x x retained among the employees petitioners separation was illegal. NLRC affirmed the
and that the retrenchment must be undertaken in good decision of the Labor Arbiter. On appeal, the Court of
faith. Except for the written notice to the affected Appeals reversed the decision of the NLRC.
employees and the DOLE, non-compliance with any of
these requirements render[s] the retrenchment illegal. ISSUE
Whether or not the retrenchment program
In the present case, Legend glaringly failed to show its implemented by respondent was valid.
financial condition prior to and at the time it enforced
its retrenchment program. It failed to submit audited HELD
financial statements regarding its alleged financial Yes. The Court finds that respondent was fully justified
losses. Though Legend complied with the notice in implementing a retrenchment program.
requirements and the payment of separation benefits
to the retrenched employees, its failure to establish the Retrenchment is the termination of employment
basis for the retrenchment of its employees constrains initiated by the employer through no fault of the
us to declare the retrenchment illegal. employees and without prejudice to the latter, resorted
to by management during periods of business
Legend also failed to establish redundancy. recession; industrial depression; or seasonal
Retrenchment and redundancy are two different fluctuations, during lulls occasioned by lack of orders,
concepts; they are not synonymous and therefore shortage of materials, conversion of the plant for a new
should not be used interchangeably. It is however not production program, or the introduction of new
enough for a company to merely declare that positions methods or more efficient machinery or automation.
have become redundant. It must produce adequate Retrenchment is a valid management prerogative. It is,
proof tantamount to substantial evidence of such however, subject to faithful compliance with the
redundancy to justify the dismissal of the affected substantive and procedural requirements laid down by
employees. law and jurisprudence. In the discharge of these
requirements, it is the employer who bears the onus,
JUVY M. MANATAD vs. PHILIPPINE TELEGRAPH being in the nature of affirmative defense.
AND TELEPHONE CORPORATION
G.R. No. 172363, March 7, 2008, Chico Nazario For a valid retrenchment, the following requisites must
be complied with: (a) the retrenchment is necessary to
In September 1988, petitioner was employed by prevent losses and such losses are proven; (b) written
respondent Philippine Telegraph and Telephone notice to the employees and to the DOLE at least one
Corporation (PT&T) as junior clerk. She was later month prior to the intended date of retrenchment; and
promoted as Account Executive, the position she held (c) payment of separation pay equivalent to one-month
until she was temporarily laid off from employment on pay or at least one-half month pay for every year of
1 September 1998. Petitioners temporary separation service, whichever is higher.
from employment was pursuant to the Temporary Staff
Reduction Program adopted by respondent due to Since respondent was undergoing business reverses,
serious business reverses. Petitioner received a letter not only for a single fiscal year, but for several years
from respondent inviting her to avail herself of its Staff prior to and even after the program, it was justified in
Reduction Program Package until full payment of the implementing a retrenchment program.
separation package. However, she did not opt to avail
herself of the said package. Later on, petitioner Where appropriate and where conditions are in accord
received a Notice of Retrenchment from respondent with law and jurisprudence, the Court has authorized
permanently dismissing her from employment. valid reductions in the work force to forestall business
losses, the hemorrhaging of capital, or even to
Consequently, petitioner filed a Complaint for illegal recognize an obvious reduction in the volume of
dismissal against respondent before the Labor Arbiter. business which has rendered certain employees
She alleged that the retrenchment program adopted by redundant.
respondent was illegal for it was gaining profits for the
period of July 1997 to June 1998. On the other hand, LINTON COMMERCIAL CO., INC. v. HELLERA
respondent asserted that petitioner was separated G.R. No. 163147, October 10, 2007, Tinga
from service pursuant to a valid retrenchment
implemented by the company, due to huge business Linton is a domestic corporation engaged in the
losses suffered by respondent, it was constrained to business of importation, wholesale, retail and
arrest escalating operating costs by downsizing its fabrication of steel and its by-products. Linton issued a
workforce. memorandum 5 addressed to its employees informing
them of the company's decision to suspend its
The Labor Arbiter rendered a Decision in favor of operations from 18 December 1997 to 5 January 1998
petitioner ruling that the retrenchment program due to the currency crisis that aected its business

113
operations. Linton issued another memorandum 8 distinction between redundancy and retrenchment, and
informing them that eective 12 January 1998, it would their requisites as valid grounds for dismissal.
implement a new compressed workweek of three (3)
days on a rotation basis. In other words, each worker FACTS
would be working on a rotation basis for three working AMA dismissed several regular employees due to the
days only instead for six days a week. Aggrieved, prevailing economic condition of our economy and
sixty-eight (68) workers (workers) led a Complaint for that their employment is no longer necessary for the
illegal reduction of workdays. reason that function can be handled by the other
existing staff. AMA defends the legality of the
ISSUE dismissal on the ground of redundancy and/or
Whether or not there was an illegal reduction of work. retrenchment.

RULING ISSUE
Yes. A close examination of petitioners' nancial Is redundancy the same as retrenchment?
reports for 1997-1998 shows that, while the company
suered a loss of P3, 645,422.00 in 1997, it retained a HELD
considerable amount of earnings 45 and operating No. The existence of redundancy or retrenchment is a
income. A year of nancial losses would not warrant question of fact. AMA failed to sufficiently prove either
the immolation of the welfare of the employees, which of the two.
in this case was done through a reduced workweek
that resulted in an unsettling diminution of the periodic Redundancy exists when the service capability of the
pay for a protracted period. Permitting reduction of workforce is in excess of what is reasonably needed to
work and pay at the slightest indication of losses would meet the demands of the business enterprise. Among
be contrary to the State's policy to afford protection to the requisites of a valid redundancy program are: (1)
labor and provide full employment. Certainly, the good faith of the employer in abolishing the
management has the prerogative to come up with redundant position; and (2) fair and reasonable criteria
measures to ensure protability or loss minimization. in ascertaining what positions are to be declared
However, such privilege is not absolute. Management redundant and accordingly abolished.
prerogative must be exercised in good faith and with
due regard to the rights of labor. The determination that the employee's services are no
longer necessary or sustainable for being redundant is
To date, no denite guidelines have yet been set to an exercise of business judgment of the employer. The
determine whether the alleged losses are sucient to wisdom or soundness of this judgment is not subject to
justify the reduction of work hours. If the standards set discretionary review of the Labor Arbiter and the
in determining the justiability of nancial losses under NLRC, provided there is no violation of law and no
Article 283 (i.e., retrenchment) or Article 286 (i.e., showing that it was prompted by an arbitrary or
suspension of work) of the Labor Code were to be malicious act. In other words, it is not enough for a
considered, petitioners would end up failing to meet company to merely declare that it has become
the standards. On the one hand, Article 286 applies overmanned. It must produce adequate proof of such
only when there is a bona de suspension of the redundancy to justify the dismissal of the affected
employer's operation of a business or undertaking for employees.
a period not exceeding six (6) months. 49 Records
show that Linton continued its business operations Retrenchment, on the other hand, is the termination of
during the eectivity of the compressed workweek, employment effected by management during periods
which spanned more than the maximum period. On the of business recession, industrial depression, seasonal
other hand, for retrenchment to be justied, any claim fluctuations, lack of work or considerable reduction in
of actual or potential business losses must satisfy the the volume of the employer's business. Resorted to by
following standards: (1) the losses incurred are an employer to avoid or minimize business losses, it is
substantial and not de minimis; (2) the losses are a management prerogative consistently recognized by
actual or reasonably imminent; (3) the retrenchment is the Court. The necessary conditions for the company
reasonably necessary and is likely to be eective in losses to justify retrenchment are as follows:
preventing the expected losses; and (4) the alleged (1) the losses incurred are substantial and not de
losses, if already incurred, or the expected imminent minimis;
losses sought to be forestalled, are proven by (2) the losses are actual or reasonably imminent;
sucient and convincing evidence. 50 Linton failed to (3) the retrenchment is reasonably necessary and
comply with these standards. is likely to be effective in preventing the expected
losses; and
AMA COMPUTER COLLEGE V. GARCIA (4) the alleged losses, if already incurred,
G.R. No. 166703, April 14, 2008, Chico-Nazario or the expected imminent losses sought to be
forestalled, are proven by sufficient and
NOTE: The doctrine in this case focuses only on the convincing evidence.

114
necessary arrangements.17 In order to meet the
GSWU-NAFLU-KMU v. NLRC foregoing purpose, service of the written notice must
G.R. No. 165757, October 17, 2006, Carpio Morales be made individually upon each and every employee
of the company. Nevertheless, the validity of
On September 8, 1999, petitioners Galaxie Steel termination of services can exist independently of the
Workers Union and Galaxie employees filed a procedural infirmity in the dismissal.
complaint for illegal dismissal, unfair labor practice,
and money claims against Galaxie. The Labor Arbiter, BECTON DICKINSON PHILS. INC. and WILFREDO
by Decision of October 30, 2000, declared valid JOAQUIN
Galaxies closure of business but nevertheless ordered G.R. Nos. 159969 & 160116, November 15, 2005,
it to pay petitioner-employees separation pay, pro-rata Garcia
13th month pay, and vacation and sick leave credits.
In 1989, Becton, Phils. had two (2) main divisions,
On appeal, the NLRC upheld the Labor Arbiters namely: (a) the Medical Division; and (b) the
decision but it reversed too the award for separation Diagnostics Division. Jesus Fargas headed the
pay, the closure of Galaxies business being due to Medical Division, while the position of head of the
serious business losses. Diagnostics Division was vacant. Also vacant was the
position of Country Manager of Becton, Phils. On
ISSUE September 12, 1989, private respondent Reinerio Z.
(1) Whether or not [Galaxie] is guilty of unfair labor Esmaquel started his stint with Becton, Phils. as
practice in closing its business operations shortly after Director of Sales and Marketing of the Diagnostics
petitioner union filed for certification election. Division. He held this position until March 1998. As
Sales and Marketing Director of the companys
(2) Whether or not the written notice posted by Diagnostics Division, respondent reported to Becton,
[Galaxie] on the company bulletin board sufficiently Asias Vice President of Diagnostics Sector. He was in
complies with the notice requirement under Article 283 charge of the overall supervision of twenty-three (23)
of the Labor Code. employees working under the sales and marketing
organization. In March, 1998, Jesus Fargas was
RULING promoted to the position of Country Manager for
Galaxies documentary evidence shows that it had Becton, Phils. Respondent, on the other hand, was
been experiencing serious financial losses at the time appointed Business Director thereof, reporting, this
it closed business operations; supported by substantial time, to the Country Manager instead of the Vice
evidence consisting of the audited financial President of Diagnostics Sector of Becton, Asia.
statements showing that Galaxie continuously incurred Respondent was responsible for sales and marketing
losses from 1997 up to mid-1999. True, the union was of Infectious Disease Diagnostic, Immunocytometry
seeking the holding of a certification election at the System, and Instrument Service for the Asia Pacific
time that Galaxie closed its business operation, but Region. He held this position up to December, 1999.
that, without more, was not sufficient to attribute anti-
unionism against Galaxie. Petitioners failed to present In January, 2000, Becton, Phils. reorganized under the
concrete evidence supporting their claim of unfair labor concept of Go To Market. For purposes of selling its
practice. Unfair labor practice refers to acts that violate products, Becton, Phils. had organized two (2)
the workers right to organize, and are defined in divisions, namely, the Sales Division and the
Articles 248 and 261 of the Labor Code. The prohibited Marketing Division, and designated respondent as the
acts relate to the workers right to self-organization and Director of Sales. As such, respondent was
to the observance of Collective Bargaining Agreement responsible for the whole sales force for all products of
without which relation the acts, no matter how unfair, the company. Under the foregoing reorganization, the
are not deemed unfair labor practices. Sales Division was responsible for in-market sales or
the sale of all the products of the company to the
With regard to the notice requirement, the Labor distributors. The distributors who buy the products at
Arbiter found, and it was upheld by the NLRC and the wholesale, in turn, are the ones selling the products to
Court of Appeals, that the written notice of closure or the end users. The company is, however, generally
cessation of Galaxies business operations was posted responsible for the sale promotions of the companys
on the company bulletin board one month prior to its products to the end users.
effectivity. The mere posting on the company bulletin
board does not, however, meet the requirement under Eventually, respondent was also appointed one of the
Article 283 of "serving a written notice on the workers." members of the Becton Dickinson (BD) Philippines
The purpose of the written notice is to inform the Leadership Team, a group within Becton, Phils., which
employees of the specific date of termination or was responsible for the formulation of policies and
closure of business operations, and must be served rules of the company.
upon them at least one month before the date of
effectivity to give them sufficient time to make the In November, 2000, pursuant to its established policies

115
and guidelines for terminating employees, Becton, of a particular product line or service activity previously
Phils. retrenched nine (9) employees, giving them manufactured or undertaken by the enterprise.
separation benefits in accordance with such
guidelines. Its very own Country Manager, Jesus Furthermore, the managerial prerogative to transfer
Fargas, was among those whose services were personnel must be exercised without grave abuse of
terminated. Accordingly, each of them received discretion, bearing in mind the basic elements of
separation benefits. In addition thereto, the nine (9) justice and fair play. Having the right should not be
terminated employees were also paid retirement confused with the manner in which that right is
benefits. exercised. Thus, it cannot be used as a subterfuge by
the employer to rid himself of an undesirable worker.
On May 16, 2001, Becton, Asia announced the
appointment of petitioner Wilfredo Joaquin, a former A lowly employee or a sales manager, as in the
Filipino citizen who later acquired American present case, who is confronted with the same
citizenship, as the new Country Manager of Becton, dilemma of whether signing a release and quitclaim
Phils. Being a stranger to the companys operations, as and accept what the company offers them, or refusing
well as to the customers of Becton, Phils., Joaquin to sign and walk out without receiving anything, may
sought respondents assistance to address serious do succumb to the same pressure, being very well
problems of the company, and to orient him in the aware that it is going to take quite a while before he
mechanics of the companys sales and marketing can recover whatever he is entitled to, because it is
efforts in the Philippines. only after a protracted legal battle starting from the
labor arbiter level, all the way to this Court, can he
Then, on that fateful day of July 10, 2001 or barely two receive anything at all. The Court understands that
(2) months from Joaquins assumption of his position such a risk of not receiving anything whatsoever,
as Country Manager, Becton, Phils. served upon coupled with the probability of not immediately getting
respondent a notice of terminationof employment any gainful employment or means of livelihood in the
effective August 10, 2001, on the ground that his meantime, constitutes enough pressure upon anyone
position has been declared redundant. who is asked to sign a release and quitclaim in
exchange of some amount of money which may be
Respondent was terminated and required to sign a way below what he may be entitled to based on
Release and Quitclaim,[14] otherwise, his separation company practice and policy or by law.
pay and retirement benefits will be withheld.
Respondent found no other alternative but to give in, It may likewise be noted that what respondent received
and reluctantly signed the document. when he signed the Release and Quitclaim was less
than half of what he is entitled to under the
ISSUE circumstances, as correctly computed by the Labor
Whether or not private respondent Esmaquel is Arbiter in his March 26, 2002 decision. This is another
illegally dismissed. reason why the Court cannot rely upon such Release
and Quitclaim to validly bar respondent from thereafter
RULING claiming additional benefits from petitioner Becton,
Yes. Petitioners utterly failed to establish by Phils..
substantial evidence that indeed, respondents position
in the company became redundant due to concrete ORIENTAL PETROLEUM v. FUENTES
and real factors recognized by law and relevant GR. No. 151818, October 14, 2005
jurisprudence. Redundancy is one of the authorized
causes of dismissal. Redundancy in an employers Petitioner Oriental Petroleum and Minerals
personnel force necessarily or even ordinarily refers to Corporation, through its Senior Vice President for
duplication of work. That no other person was holding Operations and Administration, Apollo P. Madrid,
the same position that private respondent held prior to informed respondents of its retrenchment program as
the termination of his services, does not show that his a consequence of which respondents would be
position had not become redundant. Indeed, in any terminated from employment. They were also advised
well organized business enterprise, it would be that they would receive greater separation benefits if
surprising to find duplication of work and two (2) or they qualify for retirement or resignation benefits under
more people doing the work of one person. We believe the retirement plan. Petitioner and respondents could
that redundancy, for purposes of the Labor Code, not agree on the amounts. The latter then filed
exists where the services of an employee are in separate complaints8 for illegal retrenchment with
excess of what is reasonably demanded by the actual prayer for the payment of backwages, actual damages,
requirements of the enterprise. Succinctly put, a moral and exemplary damages, and attorneys fees.
position is redundant where it is superfluous, and Labor Arbiter dismissed the complaint. NLRC held that
superfluity of a position or positions may be the petitioners serious financial difficulties necessitated
outcome of a number of factors, such as overhiring of the retrenchment of respondents.
workers, decrease in volume of business, or dropping

116
ISSUE
Whether or not petitioner undertook a valid FASAP v. PAL
retrenchment as it was already actually G.R. No. 178083, July 22, 2008, Ynares Santiago
sufferingserious financial losses
Petitioner is the EBR of respondents flight attendants
HELD and stewards. Due to its alleged financial loss,
Retrenchment is one of the authorized causes respondent made a retrenchment scheme, thereby,
recognized by the Labor Code for the dismissal of terminating many of the employees, including
employees. It is a management prerogative resorted to members of petitioner union. As a consequence,
by employers to avoid or minimize business petitioner filed for illegal dismissal on the ground that
losses. The Court has laid down the following the retrenchment scheme of the respondent is illegal.
standards that a company must meet to justify
retrenchment and to foil abuse: ISSUE
1. Firstly, the losses expected should be Whether or not the retrenchment scheme by PAL is
substantial and not merely de minimis in valid
extent. If the loss purportedly sought to be
forestalled by retrenchment is clearly shown to RULING
be insubstantial and inconsequential in No. while it is true that the exercise of this right is a
character, the bonafide nature of the prerogative of management, there must be faithful
retrenchment would appear to be seriously in compliance with substantive and procedural
question. requirements of the law and jurisprudence, for
2. Secondly, the substantial loss retrenchment strikes at the very heart of the workers
apprehended must be reasonably imminent, employment, the lifeblood upon which he and his
as such imminence can be perceived family owe their survival. Retrenchment is only a
objectively and in good faith by the measure of last resort, when other less drastic means
employer. There should, in other words, be a have been tried and found to be inadequate.
certain degree of urgency for the
retrenchment, which is after all a drastic The burden clearly falls upon the employer to prove
recourse with serious consequences for the economic or business losses with sufficient supporting
livelihood of the employees retired or evidence. Its failure to prove these reverses or losses
otherwise laid-off. necessarily means that the employees dismissal was
3. thirdly, it must be reasonably not justified. Any claim of actual or potential business
necessary and likely to effectively prevent the losses must satisfy certain established standards, all of
expected losses. which must concur, before any reduction of personnel
4. Lastly, but certainly not the least becomes legal. These are:
important, alleged losses if already realized, (1) That retrenchment is reasonably
and the expected imminent losses sought to necessary and likely to prevent
be forestalled, must be proved by sufficient business losses which, if already
and convincing evidence. incurred, are not merely de minimis,
but substantial, serious, actual and
Financial statements, in themselves, do not suffice to real, or if only expected, are
meet the stringent requirement of the law that the reasonably imminent as perceived
losses must be substantial, continuing and without any objectively and in good faith by the
immediate prospect of abating. Retrenchment being a employer;
measure of last resort, petitioner should have been
able to demonstrate that it expected no abatement of (2) That the employer served written
its losses in the coming years. Petitioner having failed notice both to the employees and to
in this regard, we find that the Court of Appeals did not the Department of Labor and
err in dismissing as unimpressive and insufficient Employment at least one month prior
petitioners audited financial statements. to the intended date of retrenchment;

(3) That the employer pays the


retrenched employees separation pay
equivalent to one (1) month pay or at
least one-half () month pay for every
year of service, whichever is higher;

(4) That the employer exercises its


prerogative to retrench employees in
good faith for the advancement of its
interest and not to defeat or

117
circumvent the employees right to Viajar. On appeal, the NLRC affirmed LAs decision.
security of tenure; and, Viajar filed a petition before the Court of Appeals. The
CA granted the petition. Thus, GMC filed this instant
(5) That the employer used fair and petition for review before the Supreme Court.
reasonable criteria in ascertaining who
would be dismissed and who would be ISSUE
retained among the employees, such Whether or not Viajar was validly terminated from
as status, efficiency, seniority, GMC
physical fitness, age, and financial
hardship for certain workers.[45] HELD
The petition is denied. Art. 283 of the Labor Code
In the instant case, PAL failed to substantiate its claim provides that redundancy is one of the authorized
of actual and imminent substantial losses which would causes for dismissal. It is imperative that the employer
justify the retrenchment of more than 1,400 of its cabin must comply with the requirements for a valid
crew personnel. Although the Philippine economy was implementation of the companys redundancy program,
gravely affected by the Asian financial crisis, however, to wit: (a) the employer must serve a written notice to
it cannot be assumed that it has likewise brought PAL the affected employees and the DOLE at least one (1)
to the brink of bankruptcy. Likewise, the fact that PAL month before the intended date of retrenchment; (b)
underwent corporate rehabilitation does not the employer must pay the employees a separation
automatically justify the retrenchment of its cabin crew pay equivalent to at least one month pay or at least
personnel. one month pay for every year of service, whichever is
higher; (c) the employer must abolish the redundant
Moreover, in assessing the overall performance of positions in good faith; and (d) the employer must set
each cabin crew personnel, PAL only considered the fair and reasonable criteria in ascertaining which
year 1997. This makes the evaluation of each cabin positions are redundant and may be abolished.
attendants efficiency rating capricious and prejudicial
to PAL employees covered by it. By discarding the MARICALUM MINING V. DECORION
cabin crew personnels previous years of service and G.R. No. 158637, April 12, 2006, Tinga
taking into consideration only one years worth of job
performance for evaluation, PAL virtually did away with Decorion was a regular employee of Maricalum
the concept of seniority, loyalty and past efficiency, Mining. Because of his alleged insubordination for
and treated all cabin attendants as if they were on failure to attend a meeting, he was placed under
equal footing, with no one more senior than the other. preventive suspension. He was also not allowed to
report for work the following day. [See Ruling for other
In sum, PALs retrenchment program is illegal because relevant facts and dates]
it was based on wrongful premise (Plan 14, which in
reality turned out to be Plan 22, resulting in ISSUE
retrenchment of more cabin attendants than was Was the suspension justified?
necessary) and in a set of criteria or rating variables
that is unfair and unreasonable when implemented. It HELD
failed to take into account each cabin attendants No.
respective service record, thereby disregarding
seniority and loyalty in the evaluation of overall Sections 8 and 9 of Rule XXIII, Book V of the
employee performance. Implementing Rules provide as follows:
Section 8. Preventive suspension. ---
GENERAL MILLING CORPORATION v. VIOLETA L. The employer may place the worker
VIAJAR concerned under preventive
G.R. No. 181738, January 30, 2013 suspension if his continued
employment poses a serious and
Violeta Viajar received a Letter-Memorandum from imminent threat to the life or property
General Milling Corporation (GMC) informing her that of the employer or his co-workers.
her services are no longer needed because her
position as Purchasing Staff was deemed redundant. Section 9. Period of Suspension ---
When Viajar reported for work on October 31, 2003, a No preventive suspension shall last
month prior the effectivity from her severance from longer than thirty (30) days. XXX
GMC, the guard on duty prevented her from entering
the companys premises. She was also asked to sign
an Application for Retirement and Benefits. Viajar In this case, Decorion was suspended only because
refused to sign. Thus, she filed a complaint for illegal he failed to attend a meeting called by his supervisor.
dismissal. The Labor Arbiter ruled in favor of GMC and There is no evidence to indicate that his failure to
held that the latter acted in good faith in terminating attend the meeting prejudiced his employer or that his

118
presence in the companys premises posed a serious answer directly the allegations attributed to her; and
threat to his employer and co-workers. The preventive (3) Memorandum seeking from the private respondent
suspension was clearly unjustified. an explanation regarding the incidents reported by
Uniwide employees and security personnel for alleged
What is more, Decorions suspension persisted irregularities committed by the private respondent such
beyond the 30-day period allowed by the Implementing as allowing the entry of unauthorized persons inside a
Rules. XXX . The Court ruled that preventive restricted area during non-office hours, falsification of
suspension which lasts beyond the maximum period or inducing another employee to falsify personnel or
allowed by the Implementing Rules amounts to company records, sleeping and allowing a non-
constructive dismissal. employee to sleep inside the private office,
unauthorized search and bringing out of company
Similarly, from the time Decorion was placed under records, purchase of damaged home furnishing items
preventive suspension on April 11, 1996 up to the time without the approval from superior, taking advantage
a grievance meeting was conducted on June 5, 1996, of buying damaged items in large quantity, alteration of
55 days had already passed. Another 48 days went by approval slips for the purchase of damaged items and
before he filed a complaint for illegal dismissal on July abandonment of work.
23, 1996. Thus, at the time Decorion filed a complaint
for illegal dismissal, he had already been suspended In a letter, private respondent answered the allegations
for a total of 103 days. made against her. On August 2, 1998, Apduhan issued
a Memorandum, advising Kawada of a hearing
Decorions preventive suspension had already ripened scheduled on August 12, 1998 and warning her that
into constructive dismissal at that time. While actual failure to appear shall constitute as waiver and the
dismissal and constructive dismissal do take place in case shall be submitted for decision based on
different fashion, the legal consequences they available papers and evidence. On August 3, 1998,
generate are identical. private respondent thinking that she was constructively
dismissed, filed a case for illegal dismissal before the
UNIWIDE SALES WAREHOUSE CLUB VS. NLRC Labor Arbiter (LA). On August 8, 1998, Apduhan sent
G.R. No. 154503, February 29, 2008 a letter addressed to private respondent, which the
latter received on even date, advising private
TOPIC: Constructive Dismissal; Abandonment respondent to report for work, as she had been absent
DOCTRINE: Case law defines constructive dismissal since August 1, 1998; and warning her that upon her
as a cessation of work because continued employment failure to do so, she shall be considered to have
is rendered impossible, unreasonable or unlikely; when abandoned her job.
there is a demotion in rank or diminution in pay or
both; or when a clear discrimination, insensibility, or On September 1, 1998, Apduhan issued a
disdain by an employer becomes unbearable to the Memorandum stating that since private respondent
employee. was unable to attend the scheduled August 12, 1998
hearing, the case was evaluated on the basis of the
The test of constructive dismissal is whether a evidence on record; and enumerating the pieces of
reasonable person in the employee's position would evidence of the irregularities and violations of company
have felt compelled to give up his position under the rules committed by private respondent, the latter's
circumstances. It is an act amounting to dismissal but defenses and the corresponding findings by Uniwide.
made to appear as if it were not. In fact, the employee Kawada was thereafter terminated from her
who is constructively dismissed may be allowed to employment on the grounds of violations of Company
keep on coming to work. Constructive dismissal is Rules, Abandonment of Work and loss of trust and
therefore a dismissal in disguise. The law recognizes confidence.
and resolves this situation in favor of employees in
order to protect their rights and interests from the ISSUE
coercive acts of the employer. Whether or not respondent was constructively
dismissed.
FACTS
Amalia Kawada, a Full Assistant Store Manager HELD
received 3 Memorandums issued by the Store No. The Court finds that private respondent's
Manager Apduhan: (1) summarizing the various allegation of harassment is a specious statement
reported incidents signifying unsatisfactory which contains nothing but empty imputation of a fact
performance on the latter's part which include the that could hardly be given any evidentiary weight by
commingling of good and damaged items, sale of a this Court. Private respondent's bare allegations of
voluminous quantity of damaged toys and ready-to- constructive dismissal, when uncorroborated by the
wear items at unreasonable prices, and failure to evidence on record, cannot be given credence.
submit inventory reports; (2) Memorandum satting that
the answers given were all hypothetical and did not

119
The right to impose disciplinary sanctions upon an
employee for just and valid cause, as well as the NORKIS TRADING CO. INC. and/or MANUEL
authority to determine the existence of said cause in GASPAR E. ALBOS, JR. v.
accordance with the norms of due process, pertains in MELVIN GNILO
the first place to the employer. Precisely, petitioners G.R. No. 159730, February 11, 2008, Austria-Martinez
gave private respondent successive memoranda so as
to give the latter an opportunity to controvert the Melvin R. Gnilo (respondent) was initially hired by
charges against her. Clearly, the memoranda are not Norkis Trading Co., Inc. (petitioner Norkis) as Norkis
forms of harassment, but petitioners' compliance with Installment Collector (NIC) in April 1988. Manuel
the requirements of due process. Gaspar E. Albos, Jr. (petitioner Albos) is the Senior
Vice-President of petitioner Norkis. Respondent held
On petitioners' claim of abandonment by private various positions in the company until he was
respondent, well-settled is the rule that to constitute appointed as Credit and Collection Manager of Magna
abandonment of work, two elements must concur: (1) Financial Services Group, Inc.-Legaspi Branch,
the employee must have failed to report for work or petitioner Norkiss sister company, in charge of the
must have been absent without valid or justifiable areas of Albay and Catanduanes with travel and
reason, and (2) there must have been a clear intention transportation allowances and a service car.
on the part of the employee to sever the employer-
employee relationship manifested by some overt act. A special audit team was conducted in respondent's
The employer has the burden of proof to show the office in Legaspi, Albay from March 13 to April 5, 2000
employee's deliberate and unjustified refusal to when it was found out that respondent forwarded the
resume his employment without any intention of monthly collection reports of the NICs under his
returning. Mere absence is not sufficient. There must supervision without checking the veracity of the same.
be an unequivocal intent on the part of the employee It appeared that the monthly collection highlights for
to discontinue his employment. the months of April to September 1999 submitted by
respondent to the top management were all overstated
Private respondent's failure to report for work despite particularly the account handled by NIC Dennis Cadag.
the August 8, 1998 letter sent by Apduhan to private Respondent was then charged by petitioners' Inquiry
respondent advising the latter to report for work is not Assistance Panel (Panel) with negligence of basic
sufficient to constitute abandonment. It is a settled rule duties and responsibilities resulting in loss of trust and
that failure to report for work after a notice to return to confidence and laxity in directing and supervising his
work has been served does not necessarily constitute own subordinates. During the investigation,
abandonment. respondent admitted that he was negligent for failing to
regularly check the report of each NIC under his
Private respondent mistakenly believed that the supervision; that he only checked at random the NIC's
successive memoranda sent to her from March 1998 monthly collection highlight reports; and that as a
to June 1998 constituted discrimination, insensibility or leader, he is responsible for the actions of his
disdain which was tantamount to constructive subordinates. He however denied being lax in
dismissal. Thus, private respondent filed a case for supervising his subordinates, as he imposed discipline
constructive dismissal against petitioners and on them if the need arose.
consequently stopped reporting for work.
On May 30, 2000, petitioner Norkis through its Human
The Court finds that petitioners were not able to Resource Manager issued a memorandum placing
establish that private respondent deliberately refused respondent under 15 days suspension without pay,
to continue her employment without justifiable reason. travel and transportation allowance, effective upon
To repeat, the Court will not make a drastic conclusion receipt thereof. Respondent filed a letter protesting his
that private respondent chose to abandon her work on suspension and seeking a review of the penalty
the basis of her mistaken belief that she had been imposed.
constructively dismissed by Uniwide.
Another memorandum4 dated June 30, 2000 was
Nonetheless, the Court agrees with the findings of the issued to respondent requiring him to report on July 5,
LA that the termination of private respondent was 2000 to the head office of petitioner Norkis in
grounded on the existence of just cause under Article Mandaluyong City for a re-training or a possible new
282 (c) of the Labor Code or willful breach by the assignment without prejudice to his request for a
employee of the trust reposed on him by his employer reconsideration or an appeal of his suspension. He
or a duly authorized representative. was then assigned to the Marketing Division directly
reporting to petitioner Albos.
Private respondent occupies a managerial position. As
a managerial employee, mere existence of a basis for In a letter5 dated July 27, 2000, respondent requested
believing that such employee has breached the trust of petitioner Albos that he be assigned as Sales Engineer
his employer would suffice for his dismissal. or to any position commensurate with his

120
qualifications. However, on July 28, 2000, respondent to review the records and the arguments of the parties
was formally appointed as Marketing Assistant to to resolve the factual issues and render substantial
petitioner Albos, which position respondent justice to the parties.
subsequently assumed. However, on October 4, 2000,
respondent filed with the Labor Arbiter (LA) a Well-settled is the rule that it is the prerogative of the
complaint for illegal suspension, constructive employer to transfer and reassign employees for valid
dismissal, non-payment of allowance, vacation/sick reasons and according to the requirement of its
leave, damages and attorney's fees against business. An owner of a business enterprise is given
petitioners. considerable leeway in managing his business. Our
law recognizes certain rights, collectively called
On March 30, 2001, the LA rendered his management prerogative as inherent in the
decision6 dismissing the complaint for lack of merit. management of business enterprises. The right of
The LA found that the position of Credit and Collection employees to security of tenure does not give them
Manager held by respondent involved a high degree of vested rights to their positions to the extent of
responsibility requiring trust and confidence; that his depriving management of its prerogative to change
failure to observe the required procedure in the their assignments or to transfer them. Managerial
preparation of reports, which resulted in the overstated prerogatives, however, are subject to limitations
collection reports continuously for more than six provided by law, collective bargaining agreements, and
months, was sufficient to breach the trust and general principles of fair play and justice.
confidence of petitioners and was a valid ground for
termination; that instead of terminating him, petitioners The employer bears the burden of showing that the
merely imposed a 15-day suspension which was not transfer is not unreasonable, inconvenient or
illegal; and that petitioners exercised their inherent prejudicial to the employee; and does not involve a
prerogative as an employer when they appointed demotion in rank or a diminution of his salaries,
respondent as a Marketing Assistant. privileges and other benefits.18Should the employer fail
to overcome this burden of proof, the employees
Respondent appealed the LA decision to the National transfer shall be tantamount to constructive dismissal.
Labor Relations Commission (NLRC), which reversed
the LAs decision. It held that the transfer of Constructive dismissal is defined as a quitting because
respondent from the position of Credit and Collection continued employment is rendered impossible,
Manager to Marketing Assistant resulted in his unreasonable or unlikely; when there is a demotion in
demotion in rank from Manager to a mere rank and file rank or a diminution of pay.20 Likewise, constructive
employee, which was tantamount to constructive dismissal exists when an act of clear discrimination,
dismissal and therefore illegal. insensibility or disdain by an employer becomes
unbearable to the employee, leaving him with no
Petitioners filed a petition for certiorari with the CA. option but to forego his continued employment.21
Subsequently, they also filed a Motion for the Issuance
of a Temporary Restraining Order or a Writ of A transfer is defined as a "movement from one position
Preliminary Injunction, as respondent had filed a to another which is of equivalent rank, level or salary,
Motion for the Issuance of a Writ of Execution with the without break in service."22 Promotion, on the other
NLRC. On August 25, 2003, the CA denied petitioners hand, is the "advancement from one position to
Motion for Reconsideration. another with an increase in duties and responsibilities
as authorized by law, and usually accompanied by an
Issue: increase in salary."23Conversely, demotion involves a
WON private respondent was constructively situation in which an employee is relegated to a
dismissed. subordinate or less important position constituting a
reduction to a lower grade or rank, with a
Ruling: corresponding decrease in duties and responsibilities,
Petitioners contend that factual findings of quasi- and usually accompanied by a decrease in salary.
judicial agencies, while generally accorded finality,
may be reviewed by this Court when the findings of the In this case, while the transfer of respondent from
NLRC and the LA are contradictory; that in the Credit and Collection Manager to Marketing Assistant
exercise of its equity jurisdiction, this Court may look did not result in the reduction of his salary, there was a
into the records of the case to re-examine the reduction in his duties and responsibilities which
questioned findings. amounted to a demotion tantamount to a constructive
dismissal as correctly held by the NLRC and the CA.
The general rule is that the factual findings of the
NLRC, as affirmed by the CA, are accorded high As Credit and Collection Manager, respondent was
respect and finality unless the factual findings and clothed with all the duties and responsibilities of a
conclusions of the LA clash with those of the NLRC managerial employee. On the other hand, the work of
and the CA, as it appears in this case. Thus we have

121
a Marketing Assistant is clerical in nature, which does
not involve the exercise of any discretion. FACTS
Rodelia S. Fungo, petitioner, alleged in her petition
There is constructive dismissal when an employee's that she was employed as secretary of respondent Fr.
functions, which were originally supervisory in nature, Servillano B. Bustamante, rector of Lourdes School of
were reduced; and such reduction is not grounded on Mandaluyong. Respondent Fr. Bustamante authorized
valid grounds such as genuine business necessity. her to file and keep confidential documents in his
Moreover, petitioners failed to refute respondents office. He entrusted to her the duplicate keys of the
claim that as Credit and Collection Manager, he was filing cabinet and she was allowed to take any
provided with a service car which was no longer document therefrom whenever she had to bring some
available to him as Marketing Assistant; thus, such matters to his attention.
was a reduction in his benefit.
In January 1996, petitioners husband, Nicolas Fungo,
an elementary school teacher in the same school, was
Anent petitioners' claim that respondent dismissed from the service because of his low
unconditionally accepted his formal appointment as performance rating. According to petitioner, her
Marketing Assistant on August 3, 2000, we note that in husbands services were terminated because of his
a letter dated July 27, 2000 addressed to petitioner statement during a faculty meeting that the Mission
Albos when he learned that he would be assigned as a and Vision Statement of the school is not being
Marketing Assistant, respondent had expressed practiced. He was also one of those who signed a
reservations on such assignment and asked that he letter asking the Provincial Minister of the Capuchins in
instead be assigned as Sales Engineer or to any the Philippines to appoint Fr. Miguel Peralta either as
position commensurate to his qualifications. rector or vice rector of the school. Fr. Peralta is a close
Respondent could not be faulted for accepting the rival of respondent Fr. Bustamante since their
position of a Marketing Assistant, since he did so and seminary days.
stayed put in order to compare and evaluate his
position. However, he experienced not only a demotion Petitioner then wrote respondent Fr. Bustamante
in his duties and responsibilities, an undignified questioning the performance rating given to her
treatment by his immediate superior, which prompted husband. She attached to her letter documents
him to file this case. containing the summary of efficiency ratings of all the
teachers. She retrieved these documents from the
We note that the alleged overstated collection reports filing cabinet.
of three NICs under respondent's supervision
submitted in 1997, were already mentioned in the IAP On March 8, 1996 petitioner received a letter from
report of the 1999 incident for which respondent was respondent Fr. Bustamante requiring her to explain in
meted the penalty of 15- day suspension without writing why she should not be dismissed from
salary, travel and transportation allowance; thus, the employment for willful breach of trust reposed on her.
same could no longer be used to justify his transfer.
Moreover, respondent's demotion, which was a On March 11, 1996, petitioner filed her written
punitive action, was, in effect, a second penalty for the explanation.
same negligent act of respondent.
Petitioner further alleged in her petition that in the
Petition denied morning of April 1, 1996, Fr. Manuel Remirez, the
school treasurer, summoned her to his office.
RODELIA FUNGO V. LOURDES SCHOOL OF Thereupon, he compelled her to tender her resignation
MANDALUYONG within 30 minutes, otherwise, she will not receive her
G.R. No. 152531, July 27, 2007 separation pay. Petitioner pleaded for one day
deferment so she could consult her aunt, Milagros
Doctrine: Resignation is the voluntary act of Tadeo, former assistant principal on academics for the
employees who are compelled by personal reasons to elementary department of the same school. However,
disassociate themselves from their employment. It Fr. Remirez denied her plea. Considering that her
must be done with the intention of relinquishing an husband was jobless and that her family was in
office, accompanied by the act of abandonment. financial predicament, petitioner submitted her
Resignation is inconsistent with the filing of the resignation letter on the very same day. Subsequently,
complaint. she received her separation pay.

There is constructive dismissal if an act of clear On January 28, 1997, petitioner filed with the Labor
discrimination, insensibility, or disdain by an employer Arbiter a complaint for illegal dismissal with prayer for
becomes so unbearable on the part of the employee reinstatement and payment of backwages and other
that it would foreclose any choice by him except to benefits, as well as for an award of moral and
forego her continued employment. exemplary damages and attorneys fees. Petitioner

122
alleged therein that she was forced to resign and to her resignation within 30 minutes. He threatened her
accept her separation pay; and that Fr. Remirez took that if she would not resign, her separation pay would
advantage of her economic plight, compelling her to be forfeited. These circumstances glaringly show that
submit her resignation letter within 30 minutes. respondents wanted to terminate her employment, but
they made it appear that she voluntarily resigned.
The LA found that petitioner was constructively
dismissed. This was reversed by the NRLC holding Resignation is the voluntary act of employees who are
that petitioner voluntarily resigned. When her motion compelled by personal reasons to disassociate
for reconsideration was denied, petitioner went to CA themselves from their employment. It must be done
which dismissed the petition. With her motion for with the intention of relinquishing an office,
reconsideration being denied, petitioner elevated the accompanied by the act of abandonment. It would
case to the SC. have been illogical therefore for the petitioner to resign
and then file a complaint for illegal dismissal.
ISSUE Resignation is inconsistent with the filing of the
WON the petitioner was constructively dismissed from complaint.
the service. - YES
There is constructive dismissal if an act of clear
RULING discrimination, insensibility, or disdain by an employer
Respondents argue that petitioners act of retrieving the becomes so unbearable on the part of the employee
document from the files inside the rectors office was that it would foreclose any choice by him except to
improper and constituted a willful breach of the trust forego her continued employment.
reposed upon her by Fr. Bustamante. Such breach of
trust is a just cause for terminating her services. An examination of the records of this case convinced
us that petitioner was indeed made to resign against
To be a valid ground for dismissal, loss of trust and her will with threat that she will not be given her
confidence must be based on a willful breach of trust separation pay should she fail to do so. Clearly, her
and founded on clearly established facts. Loss of consent was vitiated. Indeed, it is very unlikely that
confidence must not be indiscriminately used as a petitioner, who worked in the school for almost fifteen
shield by the employer against a claim that the (15) years, would simply resign voluntarily. Her receipt
dismissal of an employee was arbitrary. And, in order of the benefits could be considered as an act of self-
to constitute a just cause for dismissal, the act preservation, taking into consideration the financial
complained of must be work-related and shows that predicament she and her family were then facing.
the employee concerned is unfit to continue working Thus, we rule that petitioner was constructively
for the employer dismissed from her employment.

In Nokom v. National Labor Relations Commission, we Under Article 279 of the Labor Code, an employee
set the guidelines for the application of loss of who is unjustly dismissed from work shall be entitled to
confidence as a just cause for dismissing an employee reinstatement without loss of seniority rights and other
from the service, thus: privileges and to his full backwages, inclusive of
a. loss of confidence should not be simulated; allowances, and to his other benefits or their monetary
b. it should not be used as a subterfuge for equivalent computed from the time his compensation
causes which are improper, illegal or unjustified; was withheld from him up to the time of his actual
c. it may not be arbitrarily asserted in the face of reinstatement. Considering, however, that the nature
overwhelming evidence to the contrary; and of petitioners work requires constant interaction with
d. it must be genuine, not a mere afterthought to Fr. Bustamante, their working relationship has been
justify earlier action taken in bad faith. strained. Thus, the payment of separation pay and
other benefits in lieu of reinstatement is in order.
In the instant case, Fr. Bustamante entrusted to
petitioner various documents in his office. She could THE UNIVERSITY OF THE IMMACULATE
take any document from the filing cabinet inside his CONCEPTION V. NLRC
office. While she retrieved documents pertaining to the G.R. No. 181146, January 26, 2011, Carpio
efficiency ratings of all teachers in the school for the
year 1990-1991, such act did not constitute a breach Private respondent Teodora C. Axalan is a regular
of trust and confidence since she did not show those faculty member in the Petitioner Uiversity holding the
documents to any other person except to Fr. position of Associate Professor II. From 18 November
Bustamante himself. Significantly, he did not dispute to 22 November 2002, Axalan attended a seminar in
the fact that petitioner had access to the records. Quezon City on website development. Axalan then
received a memorandum from Dean Maria Rosa
When petitioner asked Fr. Bustamante why her Celestial asking her to explain in writing why she
husbands performance rating was low, Fr. Remirez should not be dismissed for having been absent
summoned her to his office and urged her to tender without official leave. In her letter, Axalan claimed that

123
she held online classes while attending the seminar. ROBINSONS GALLERIA/ROBINSONS
She explained that she was under the impression that SUPERMARKET CORPORATION and/or JESS
faculty members would not be marked absent even if MANUEL v. IRENE R. RANCHEZ
they were not physically present in the classroom as G.R. No. 177937, January 19, 2011
long as they conducted online classes.
Respondent Ranchez was a probationary employee
ISSUE for 5 months. She was hired as a cashier by
Was Axalan constructively dismissed? Robinsons sometime within that period. Two weeks
after she was hired, she reported the loss of cash
HELD which she had placed in the company locker. She
NO. offered to pay for the lost amount but the Operations
Manager of Robinsons had her strip-searched then
Constructive dismissal occurs when there is cessation reported her to the police even though they found
of work because continued employment is rendered nothing on her person. An information for Qualified
impossible, unreasonable, or unlikely as when there is Theft was filed with the Quezon City Regional Trial
a demotion in rank or diminution in pay or when a clear Court. She was detained for 2 weeks for failure to
discrimination, insensibility, or disdain by an employer immediately post bail. Weeks later, respondent
becomes unbearable to the employee leaving the latter Ranchez filed a complaint for illegal dismissal and
with no other option but to quit. damages. A year later, Robinsons sent to respondent
by mail a notice of termination and/or notice of
In this case however, there was no cessation of expiration of probationary employment.
employment relations between the parties. It
is unrefuted that Axalan promptly resumed teaching at The Labor Arbiter dismissed the complaint for illegal
the university right after the expiration of the dismissal, alleging that at the time of filing respondent
suspension period. In other words, Axalan never quit. Ranchez had not yet been terminated. She was merely
Hence, Axalan cannot claim that she was left with no investigated. However, the NLRC reversed this ruling,
choice but to quit, a crucial element in a finding of stating that Ranchez was illegally dismissed and that
constructive dismissal. Thus, Axalan cannot be Robinson's should reinstate her. It held that Ranchez
deemed to have been constructively dismissed. was deprived of due process when she was strip-
searched and sent to jail for two weeks because such
Note that on the first AWOL incident, the university amounted to constructive dismissal, making it
even offered to drop the AWOL charge impossible for the respondent to continue under the
against Axalan if she would only write a letter of employment. Even though she was merely a
contrition. But Axalan adamantly refused probationary employee, the lapse of the probationary
knowing fully well that the administrative case would contract did not amount to a valid dismissal because
take its course leading to possible sanctions. She there was already an unwarranted constructive
cannot now be heard that the imposition of the penalty dismissal beforehand.
of six-month suspension without pay for each AWOL
charge is unreasonable. We are convinced ISSUE
that Axalan was validly suspended for cause and in Whether respondent was legally terminated from
accord with procedural due process. employment by petitioners.

The Court recognizes the right of employers to HELD


discipline its employees for serious violations of NO. The petition is unmeritorious.
company rules after affording the latter due process
and if the evidence warrants. The university, after There is probationary employment when the employee
affording Axalan due process and finding her guilty of upon his engagement is made to undergo a trial period
incurring AWOL on two separate occasions, acted well during which the employer determines his fitness to
within the bounds of labor laws in imposing the penalty qualify for regular employment based on reasonable
of six-month suspension without pay for each standards made known to him at the time of
incidence of AWOL. engagement.

As a learning institution, the university cannot be A probationary employee, like a regular employee,
expected to take lightly absences without official leave enjoys security of tenure. However, in cases of
among its employees, more so among its faculty probationary employment, aside from just or
members even if they happen to be union officers. To authorized causes of termination, an additional ground
do so would send the wrong signal to is provided under Article 281 of the Labor Code,i.e.,
the studentry and the rest of its teaching staff that the probationary employee may also be terminated for
irresponsibility is widely tolerated in the academe. failure to qualify as a regular employee in accordance
with reasonable standards made known by the
employer to the employee at the time of the

124
engagement.Thus, the services of an employee who work. It was then that he found out to his dismay that
has been engaged on probationary basis may be the resort was far from finished. However, he was
terminated for any of the following: instructed to supervise construction and speak with
potential guests. He also undertook the overall
(1) a just or preparation of the guestrooms and staff for the
(2) an authorized cause; and opening of the hotel, even performing menial tasks. As
(3) when he fails to qualify as a regular employee in Johnson remained unpaid since August 2007 and he
accordance with reasonable standards prescribed by has loaned all his money to petitioners, he asked for
the employer. his salary after the resort was opened but the
petitioners refused. Johnson became very alarmed
Article 277(b) of the Labor Code mandates that the with the situation. After another embarrassment was
employer shall furnish the worker, whose employment handed out by petitioner Prentice in front of the staff,
is sought to be terminated, a written notice containing which highlighted his lack of real authority in the hotel
a statement of the causes of termination, and shall and the disdain for him by petitioners, respondent
afford the latter ample opportunity to be heard and to Johnson was forced to submit his resignation.
defend himself with the assistance of a representative
if he so desires, in accordance with company rules and ISSUE
regulations pursuant to the guidelines set by the Whether or not Johnson voluntarily resigned.
Department of Labor and Employment.
HELD
In the instant case, based on the facts on record, No. Although the resort did not open until
petitioners failed to accord respondent substantive and approximately 8th October 2007, Johnson's
procedural due process.The haphazard manner in the employment began, as per Employment Agreement,
investigation of the missing cash, which was left to the on 1st August 2007. During the interim period,
determination of the police authorities and the Johnson was frequently instructed by Prentice to
Prosecutor's Office, left respondent with no choice but supervise the construction staff and speak with
to cry foul. Administrative investigation was not potential future guests who visited the site out of
conducted by petitioner Supermarket.On the same day curiosity. The petitioners maintain that they have paid
that the missing money was reported by respondent to the amount of P7,200.00 to Johnson for his three
her immediate superior, the company already pre- weeks of service from October 8, 2007 until November
judged her guilt without proper investigation, and 3, 2007, the date of Johnson's resignation, which
instantly reported her to the police as the suspected Johnson did not controvert. Even so, the amount the
thief, which resulted in her languishing in jail for two petitioners paid to Johnson as his three-week salary is
weeks. significantly deficient as Johnson's monthly salary as
stipulated in their contract is P60,000.00. Thus, the
The due process requirements under the Labor Code amount which Johnson should have been paid is
are mandatory and may not be replaced with police P45,000.00 and not P7,200.00. In light of this
investigation or court proceedings. An illegally or deficiency, there is more reason to believe that the
constructively dismissed employee, respondent is petitioners withheld the salary of Johnson without a
entitled to: (1) either reinstatement, if viable, or valid reason. It only goes to show that while it was
separation pay, if reinstatement is no longer viable; Johnson who tendered his resignation, it was due to
and (2) backwages. These two reliefs are separate the petitioners acts that he was constrained to resign.
and distinct from each other and are awarded The petitioners cannot expect Johnson to tolerate
conjunctively. working for them without any compensation. Since
Johnson was constructively dismissed, he was illegally
In this case, since respondent was a probationary dismissed. Thus, an illegally dismissed employee is
employee at the time she was constructively dismissed entitled to two reliefs: backwages and reinstatement.
by petitioners, she is entitled to separation pay and The two reliefs provided are separate and distinct. In
backwages. Reinstatement of respondent is no longer instances where reinstatement is no longer feasible
viable considering the circumstances. because of strained relations between the employee
and the employer, separation pay is granted. In effect,
DREAMLAND HOTEL V. JOHNSON an illegally dismissed employee is entitled to either
G.R. No. 191455, March 12, 2014 reinstatement, if viable, or separation pay if
reinstatement is no longer viable, and backwages. The
Prentice and Johnson entered into an Employment accepted doctrine is that separation pay may avail in
Agreement, which stipulates among others, that lieu of reinstatement if reinstatement is no longer
Johnson shall serve as Operations Manager of practical or in the best interest of the parties.
Dreamland from August 1, 2007 and shall serve as Separation pay in lieu of reinstatement may likewise
such for a period of three (3) years. From the start of be awarded if the employee decides not to be
August 2007, as stipulated in the Employment reinstated. Under the doctrine of strained relations, the
Agreement, respondent Johnson already reported for payment of separation pay is considered an

125
acceptable alternative to reinstatement when the latter CBA, the Union properly requested the Club to enforce
option is no longer desirable or viable. the Union security provision in their CBA and terminate
said respondents. Then, in compliance with the Unions
ALABANG COUNTRY CLUB V. NLRC request, the Club reviewed the documents submitted
G.R. No. 170287, February 14, 2008, Velasco by the Union, requested said respondents to submit
written explanations, and thereafter afforded them
Petitioner Alabang Country Club, Inc. (Club) is a reasonable opportunity to present their side. After it
domestic non-profit corporation with principal office at had determined that there was sufficient evidence that
Country Club Drive, Ayala Alabang, Muntinlupa City. said respondents malversed Union funds, the Club
Respondents are Alabang Country Club Independent dismissed them from their employment conformably
Employees Union (Union),the exclusive bargaining with Sec. 4(f) of the CBA.
agent of the Clubs rank-and-file employees. The Club
and the Union entered into a Collective Bargaining Considering the foregoing circumstances, we are
Agreement (CBA), which provided for a Union shop constrained to rule that there is sufficient cause for the
and maintenance of membership shop.The Union three respondents termination from employment.
discovered some irregularly recorded entries,
unaccounted expenses and disbursements, and INGUILLO V. FIRST PHILIPPINE SCALES
uncollected loans from the Union funds by G.R. No. 165407 June 5, 2009, Peralta
respondents Pizarro, Braza, and Castueras.Despite
their explanations, respondents Pizarro, Braza, and FPSI (Employer respondent corporation) and FPSI
Castueras were expelled from the Union.the Union, Labor Union entered into a collective bargaining
Invoking the Security Clause of the CBA, the Club agreement. It provided for a union security clause.
dismissed upon demand of the Union the respondents During the lifetime of the CBA Inguillo (petitioner) and
Pizarro, Braza, and Castueras in view of their several other FPSI employees joined another union
expulsion from the Union. (Nagkakaisang Lakas ng Manggagawa or NLM), NLM
filed a case for intra union dispute. The med arbiter
ISSUE decided in favour of FPSILU and ordered the officers
Whether or not the respondents dismissal from the and members of NLM to return the P90,000 union
Club was proper? dues erroneously collected from employees. FPSILU
sought the dismissal of petitioners on the grounds of
RULING disloyalty and thus invoking the union security clause.
Yes. One cause for termination is dismissal from FPSI effected the dismissal. Petitioners assail the
employment due to the enforcement of the union legality of their dismissal based on the said Union
security clause in the CBA. Here, Art. II of the CBA on Security Clause.
Union security contains the provisions on the Union
shop and maintenance of membership shop. There is ISSUE
union shop when all new regular employees are Is the dismissal valid?
required to join the union within a certain period as a
condition for their continued employment. There is RULING
maintenance of membership shop when employees Yes. In terminating the employment of an employee by
who are union members as of the effective date of the enforcing the Union Security Clause, the employer
agreement, or who thereafter become members, must needs only to determine and prove that: (1) the union
maintain union membership as a condition for security clause is applicable; (2) the union is
continued employment until they are promoted or requesting for the enforcement of the union security
transferred out of the bargaining unit or the agreement provision in the CBA; and (3) there is sufficient
is terminated. evidence to support the union's decision to expel the
employee from the union or company.
In terminating the employment of an employee by
enforcing the union security clause, the employer In terminating the employment of an employee by
needs only to determine and prove that: (1) the union enforcing the Union Security Clause, the employer
security clause is applicable; (2) the union is needs only to determine and prove that: (1) the union
requesting for the enforcement of the union security security clause is applicable; (2) the union is
provision in the CBA; and (3) there is sufficient requesting for the enforcement of the union security
evidence to support the unions decision to expel the provision in the CBA; and (3) there is sufficient
employee from the union. These requisites constitute evidence to support the union's decision to expel the
just cause for terminating an employee based on the employee from the union or company.
CBAs union security provision.
GENERAL MILLING CORP. V. CASIO
The three respondents were expelled from and by the G.R. No. 149552, March 10, 2010, Leonardo de
Union after due investigation for acts of dishonesty and Castro
malversation of Union funds. In accordance with the

126
The labor union Ilaw at Buklod ng Mangagawa (IBM) It is similarly undisputed that IBM-Local 31, through
was the sole and exclusive bargaining agent of the Gabiana, the IBM Regional Director for Visayas and
rank and file employees of GMC. The union entered Mindanao, twice requested GMC, in the letters dated
into a CBA with GMC. The effectivity of the said CBA March 10 and 19, 1992, to terminate the employment
was retroactive to August 1, 1991. The CBA contained of Casio, et al. as a necessary consequence of their
a security provision. Gabiana, the IBM Regional expulsion from the union. It is the third requisite that
Director, furnished Casio, et al. with copies of the there is sufficient evidence to support the decision of
Affidavits of 2 GMC employees, charging Casio, et al. IBM-Local 31 to expel Casio, et al. which appears to
with "acts inimical to the interest of the union." be lacking in this case.
Gabiana then wrote a letter addressed to Eduardo
Cabahug (Cabahug), GMC Vice-President for Irrefragably, GMC cannot dispense with the
Engineering and Plant Administration, informing the requirements of notice and hearing before dismissing
company of the expulsion of Casio, et al. from the Casio, et al. even when said dismissal is pursuant to
union pursuant to the Resolution. Gabiana likewise the closed shop provision in the CBA. The rights of an
requested that Casio, et al. "be immediately dismissed employee to be informed of the charges against him
from their work for the interest of industrial peace in and to reasonable opportunity to present his side in a
the plant pursuan to the security provision in the CBA. controversy with either the company or his own union
are not wiped away by a union security clause or a
ISSUE union shop clause in a collective bargaining
Whether the dismissal from employment due to the agreement.
enforcement of the union security clause in the CBA is
legal? CRAYONS PROCESSING, INC V. FELIPE PULA

RULING G.R. No. 167727, July 30, 2007, Tinga


The dismissal is illegal. There is no question that in the
present case, the CBA between GMC and IBM-Local Petitioner Crayons Processing, Inc. (Crayons)
31 included a maintenance of membership and closed employed respondent Felipe Pula (Pula) as a
shop clause as can be gleaned from Sections 3 and 6 Preparation Machine Operator beginning June 1993.
of Article II. IBM-Local 31, by written request, can ask On 27 November 1999, Pula, then aged 34, suffered a
GMC to terminate the employment of the heart attack and was rushed to the hospital, where he
employee/worker who failed to maintain its good was confined for around a week. Pulas wife duly
standing as a union member. Union security clauses notified Crayons of her husbands medical condition.
are recognized and explicitly allowed under Article Subsequently, on 25 February 2000, Pula underwent
248(e) of the Labor Code It is State policy to promote an Angiogram Test at the Philippine Heart Center
unionism to enable workers to negotiate with under the supervision of a Dr. Recto, who advised him
management on an even playing field and with more to take a two-week leave from work. Following the
persuasiveness than if they were to individually and angiogram procedure, respondent was certified as fit
separately bargain with the employer. For this reason, to work by Dr. Recto. On 11 April 2000, Pula returned
the law has allowed stipulations for union shop and to work, but 13 days later, he was taken to the
closed shop as means of encouraging workers to join company clinic after complaining of dizziness.
and support the union of their choice in the protection Diagnosed as having suffered a relapse, he was
of their rights and interest vis--vis the employer In advised by his physician to take a leave of absence
terminating the employment of an employee by from work for one (1) month. Pula reported back for
enforcing the union security clause, the employer work on 13 June 2000, armed with a certification from
needs only to determine and prove that: (1) the union his physician that he was fit to work. However, Pula
security clause is applicable; (2) the union is claimed that he was not given any post or assignment,
requesting for the enforcement of the union security but instead, on 20 June 2000, he was asked to resign
provision in the CBA; and (3) there is sufficient with an offer from Crayons of P12, 000 as financial
evidence to support the decision of the union to expel assistance. Pula refused the offer and instead filed a
the employee from the union. These requisites complaint for illegal dismissal.
constitute just cause for terminating an employee
based on the union security provision of the CBA.[26] ISSUE
There is no question that in the present case, the CBA Whether or not the dismissal without certification
between GMC and IBM-Local 31 included a issued by a competent public health authority was
maintenance of membership and closed shop clause proper
as can be gleaned from Sections 3 and 6 of Article II.
IBM-Local 31, by written request, can ask GMC to HELD
terminate the employment of the employee/worker who No. For a dismissal on the ground of disease to be
failed to maintain its good standing as a union considered valid, two requisites must concur: (a) the
member. employee must be suffering from a disease which
cannot be cured within six months and his continued

127
employment is prohibited by law or prejudicial to his terminated the services of petitioner and that during
health or to the health of his co-employees; and (b) a their mandatory conference, he even told the latter that
certification to that effect must be issued by a he could go back to work anytime but petitioner clearly
competent public health authority. The burden falls manifested that he was no longer interested in
upon the employer to establish these requisites, and in returning to work and instead asked for separation
the absence of such certification, the dismissal must pay.
necessarily be declared illegal.
ISSUE
As succinctly stressed in Tan v. NLRC, it is only where Whether or not petitioner is entitled to SepPay
there is a prior certification from a competent public
authority that the disease afflicting the employee RULING
sought to be dismissed is of such nature or at such NO. A plain reading of the provision clearly
stage that it cannot be cured within six (6) months presupposes that it is the employer who terminates the
even with proper medical treatment that the latter services of the employee found to be suffering from
could be validly terminated from his job. any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well
Without the required certification, the characterization as to the health of his co-employees. It does not
or even diagnosis of the disease would primarily be contemplate a situation where it is the employee who
shaped according to the interests of the parties rather severs his or her employment ties.
than the studied analysis of the appropriate medical
professionals. The requirement of a medical certificate PADILLO v. RURAL BANK OF NABUNTURAN, INC.
under Article 284 cannot be dispensed with; otherwise, G.R. No. 199338, January 21, 2013, Perlas-Bernabe
it would sanction the unilateral and arbitrary
determination by the employer of the gravity or extent Petitioner, the late Eleazar Padillo (Padillo), was an
of the employee's illness and thus defeat the public employee of respondent Rural Bank of Nabunturan,
policy in the protection of labor. Inc. (Bank) as its SA Bookkeeper. Due to liquidity
problems in 2003, the Bank took out
The NLRCs conclusion that no such certification was retirement/insurance plans with Philippine American
required since Pula had effectively been absented due Life and General Insurance Company (Philam Life) for
to illness for more than six (6) months is unsupported all its employees in anticipation of its possible closure
by jurisprudence and plainly contrary to the language and the concomitant severance of its personnel.
of the Implementing Rules. The indefensibility of such Respondent Mark Oropeza is the president and major
conclusion is further heightened by the fact that Pula stockholder of the bank. Padillo suffered a mild stroke
was able to obtain two different medical certifications due to hypertension which consequently impaired his
attesting to his fitness to resume work. ability to effectively pursue his work. He wrote a letter
addressed to Oropeza expressing his intention to avail
Assuming that the burden did fall on Pula to establish of an early retirement package. Despite several follow-
that he was fit to return to work, those two medical ups, his request remained unheeded. Not having
certifications stand as incontestable in the absence of received his claimed retirement benefits, Padillo filed
contrary evidence of similar nature from Crayons. with the NLRC a complaint for the recovery of unpaid
Then again, the burden lies solely on Crayons to prove retirement benefits.
that Pula was unfit to return to work.[32] Even absent
the certifications favorable to Pula, Crayons would still The Labor Arbiter dismissed Padillos complaint on the
be unable to justify his dismissal on the ground of ill ground that the latter did not qualify to receive any
health or disease, without the necessary certificate benefits under Article 300 of the Labor Code as he
from a competent public health authority. was only fifty-five (55) years old when he resigned,
while the law specifically provides for an optional
VILLARUEL v. YEO HAN GUAN retirement age of sixty (60) and compulsory retirement
G.R. No. 169191, June 1, 2011, Peralta age of sixty-five (65). The NLRC reversed the Labor
Arbiters ruling. The CA reversed the NLRCs ruling but
Doctrine: Since petitioner was not terminated from his with modification. It directed the respondents to pay
employment and, instead, is deemed to have resigned Padillo the amount of P50,000.00 as financial
therefrom, he is not entitled to separation pay under assistance exclusive of the P100,000.00 Philam Life
the provisions of the Labor Code. Plan benefit.

Respondent averred that petitioner was hired as ISSUE


machine operator from March 1993 until he stopped Whether or not Padillo is entitled to claim for retirement
working sometime in February 1999 on the ground that benefits under the Labor Code?
he was suffering from illness; after his recovery,
petitioner was directed to report for work, but he never HELD
showed up. Respondent claimed that he never No. In the absence of any applicable agreement, an

128
employee must (1) retire when he is at least sixty (60) if the suspension of operations lasts for more than 6
years of age and (2) serve at least (5) years in the months. Thus is bred the issue regarding the
company to entitle him/her to a retirement benefit of at responsibility of MMC toward its employees.
least one-half (1/2) month salary for every year of
service, with a fraction of at least six (6) months being Under Article 283, the employer can lawfully close
considered as one whole year. Notably, these age and shop anytime as long as cessation of or withdrawal
tenure requirements are cumulative and non- from business operations is bona fide in character and
compliance with one negates the employees not impelled by a motive to defeat or circumvent the
entitlement to the retirement benefits under Article 300 tenurial rights of employees, and as long as he pays
of the Labor Code altogether. his employees their termination pay in the amount
corresponding to their length of service. The cessation
In this case, it is undisputed that there exists no of operations, in the case at bar is of such nature. It
retirement plan, collective bargaining agreement or was proven that MMC stopped its operations precisely
any other equivalent contract between the parties due to failure to secure permit to operate a tailings
which set out the terms and condition for the pond. Separation pay must nonetheless be given to
retirement of employees, with the sole exception of the the separated employees.
Philam Life Plan which premiums had already been
paid by the Bank. NIPPON HOUSING PHILS. VS. LEYNES
G.R. No. 177816, August 3, 2011
Unfortunately, while Padillo was able to comply with
the five (5) year tenure requirement as he served for Nippon Housing is engaged in the business of
twenty-nine (29) years he, however, fell short with providing building maintenance From its original
respect to the sixty (60) year age requirement given ventured into building management and gained Bay
that he was only fifty-five (55) years old when he Gardens Condominium Project (the Project) of the Bay
retired. Therefore, without prejudice to the proceeds Gardens Condominium Corporation (BGCC) as its first
due under the Philam Life Plan, petitioners claim for and only building maintenance client. They hired
retirement benefits must be denied. respondent Maiah Angela Leynes on 26 March 2001
for the position of Property Manager, with a salary of
MANILA MINING CORP. EMPLOYEES P40,000.00 per month. Her responsibilities include
ASSOCIATION-FEDERATION OF FREE WORKERS surveying the requirements of the government and the
CHAPTER, SAMUEL G. ZUIGA v. MANILA MINING client for said project, the formulation of house rules
CORP. and regulations, the preparation of the annual
G.R. Nos. 178222-23, September 29, 2010, Perez operating and capital expenditure budget, hiring and
deployment of manpower, salary and position
Respondent is a mining corporation. Due to its failure determination as well as the assignment of the
to obtain the necessary permit with the DENR-EMBs schedules and responsibilities of employees. Leynes
to operate the mining business, it temporary lay-off had a misunderstanding with the building engineer of
private complainant for a period exceeding 6 months the project (Cantuba) and barred the latters entry to
resulting in their constructive dismissal. the site. The Engr. also accused the former of conceit,
The Union attributes bad faith on the part of MMC in pride and poor managerial skills. Takada, the NHPI's
implementing the temporary lay-off, hence this case. Vice President issued a memorandum attributing the
incident to "simple personal differences" and directing
ISSUE Leynes to allow Engr. Cantuba to report back for work.
Whether or not the layoff is illegal Disappointed with this management decision, she
Whether or not the employees are entitled to a submitted a letter to NHPIs President (Ota) asking for
separation pay an emergency leave of absence for the supposed
purpose of coordinating with her lawyer regarding her
HELD resignation letter. NHPI offered the Property Manager
The lay-off is neither illegal nor can it be considered as position to Engr. Carlos Jose as a consequence
unfair labor practice. Even as we declare the validity Leynes' signification of her intention to resign.
of the lay-off, we cannot say that MMC has no However, she sent another letter expressing her
obligation at all to the laid-off employees. The validity intention to return to work and to call off her planned
of its act of suspending its operations does not excuse resignation. However, she received a letter from the
it from paying separation pay. Article 286 of the Labor management to report instead to the main office as
Code allows the bona fide suspension of operations for one in a floating status because someone already
a period not exceeding six (6) months.During the occupies her post. Aggrieved, Leynes filed a complaint
suspension, an employee is not deemed against petitioner for illegal dismissal, unpaid salaries,
terminated. As a matter of fact, the employee is benefits, damages and attorney's fees. The Labor
entitled to be reinstated once the employer resumes arbiter found that the petitioners act of putting Leynes
operations within the 6-month period. However, Article on a floating status was equivalent to termination
286 is silent with respect to the rights of the employee without just cause. The NLRC ruled that NHPI's

129
placement of Leynes on floating status was RULING
necessitated by the client's contractually guaranteed Yes. Although petitioners suspension of operations is
right to request for her relief. However, this was later valid because the fire caused substantial losses to
on reversed by the CA, hence, this present petition petitioner and damaged its factory, it failed to prove
before the SC. that its suspension of operations is bona fide. The list
of materials burned was not the only evidence
ISSUE submitted by petitioner. It was corroborated by pictures
Whether or not Leynes floating status is tantamount to and the fire investigation report, and they constitute
constructive dismissal. substantial evidence of petitioners losses.

RULING Under Article 286 of the Labor Code, the bona fide
No, the placement of Leynes on a floating status due suspension of the operations of a business or
to redundancy is valid. The record, moreover, shows undertaking for a period not exceeding six months
that NHPI simply placed her on floating status "until shall not terminate employment. Article 286 provides:
such time that another project could be secured" for
her. The rule is settled, however, that "off-detailing" is ART. 286. When employment not deemed terminated.
not equivalent to dismissal, so long as such status The bona fide suspension of the operations of a
does not continue beyond a reasonable time and that it business or undertaking for a period not exceeding six
is only when such a "floating status" lasts for more (6) months, or the fulfillment by the employee of a
than six months that the employee may be considered military or civic duty shall not terminate employment.
to have been constructively dismissed. A complaint for
illegal dismissal filed prior to the lapse of said six- In all such cases, the employer shall reinstate the
month and/or the actual dismissal of the employee is employee to his former position without loss of
generally considered as prematurely filed. Since the seniority rights if he indicates his desire to resume his
petitioner has no other client for the building work not later than one (1) month from the resumption
management side of its business, it acted within its of operations of his employer or from his relief from the
prerogatives when it eventually terminated Leynes' military or civic duty.
services on the ground of redundancy. One of the
recognized authorized causes for the termination of Under Article 286 of the Labor Code, the bona fide
employment, redundancy exists when the service suspension of the operation of a business or
capability of the workforce is in excess of what is undertaking for a period not exceeding six months
reasonably needed to meet the demands of the shall not terminate employment. Consequently, when
business enterprise. the bona fide suspension of the operation of a
business or undertaking exceeds six months, then the
SKM ARTCRAFT CORPORATION vs. BAUCA employment of the employee shall be deemed
G.R. No. 171282, November 27, 2013, Villarama terminated. By the same token and applying said rule
by analogy, if the employee was forced to remain
without work or assignment for a period exceeding six
The 23 respondents were employed by petitioner SKM months, then he is in effect constructively dismissed.
Art Craft Corporation which is engaged in the Indeed, petitioners manifestation dated October 2,
handicraft business. On April 18, 2000, around 1:12 2001 that it is willing to admit respondents if they
a.m., a fire occurred at the inspection and return to work was belatedly made, almost one year
receiving/repair/packing area of petitioners premises after petitioners suspension of operations expired in
in Intramuros, Manila. The fire investigation report November 2000. We find that petitioner no longer
stated that the structure and the beach rubber building recalled, nor wanted to recall, respondents after six
were totally damaged. Also burned were four container months.
vans and a trailer truck. The estimated damage
was P22 million. On May 8, 2000, petitioner informed JACKBILT INDUSTRIES V. JACKBILT EMPLOYEES
respondents that it will suspend its operations for six UNION
months, effective May 9, 2000. On May 16, 2000, only G.R. Nos. 171618-19, March 20, 2009, Corona
eight days after receiving notice of the suspension of
petitioners operations, the 23 respondents (and other Due to the adverse effects of the Asian economic crisis
co-workers) filed a complaint for illegal dismissal. They on the construction industry, petitioner decided to
alleged that there was discrimination in choosing the temporarily stop its business of producing concrete
workers to be laid off and that petitioner had hollow blocks, compelling most of its employees to go
discovered that most of them were members of a on leave for six months. Respondent union
newly-organized union. immediately protested the temporary shutdown.
Because its collective bargaining agreement with
ISSUE petitioner was expiring during the period of the
Whether or not respondents were illegally dismissed shutdown, respondent claimed that petitioner halted
production to avoid its duty to bargain collectively. The

130
shutdown was allegedly motivated by anti-union proceeded to the barangay office to show support for
sentiments. Accordingly, respondent went on strike. Its an officer of the Union charged with oral defamation by
officers and members picketed petitioners main gates PINAs personnel manager. As a result of the walkout,
and deliberately prevented persons and vehicles from PINA preventively suspended all officers of the Union
going into and out of the compound. and terminated the officers of the Union after a month.
The Union later conducted a strike but the same was
Petitioner filed a petition for injunction with a prayer for declared to be an illegal strike by the Labor Arbiter.
the issuance of a TRO in the NLRC. NLRC issued a The NLRC sustained the finding of the illegality of the
TRO directing the respondents to refrain from strike, but ruled that the union members should not be
preventing access to petitioners property. The union considered to have abandoned their employment on
violated such order. The union officers and members the ground that mere participation of a union member
were then required to explain but they refused to do in an illegal strike does not mean loss of employment.
so. Thus, they were dismissed. Respondents then filed Petitioners were ordered reinstated.
a complaint before the LA. The labor arbiter dismissed
the complaints for illegal lockout and unfair labor ISSUE
practice for lack of merit. However, because petitioner Is payment of separation pay in lieu of reinstatement
did not file a petition to declare the strike illegal before allowed?
terminating respondents officers and employees, it
was found guilty of illegal dismissal. NLRC only RULING
modified the monetary award. CA held that the Yes. The absence from an order of reinstatement of an
temporary shutdown was moved by anti-union alternative relief should the employer or a supervening
sentiments. Petitioner was therefore guilty of unfair event not within the control of the employee prevent
labor practice. Petitioner asserts that the filing of a reinstatement negates the very purpose of the order.
petition to declare the strike illegal was unnecessary The judgment favorable to the employee is thereby
since the NLRC, in its July 17, 1998 decision, had reduced to a mere paper victory, for it is all too easy
already found that respondent committed illegal acts in for the employer to simply refuse to have the employee
the course of the strike. back. To safeguard the spirit of social justice that the
Court has advocated in favor of the working man,
ISSUE therefore, the right to reinstatement is to be considered
Whether or not the filing of a petition with the labor renounced or waived only when the employee
arbiter to declare a strike illegal is a condition sine qua unjustifiably or unreasonably refuses to return to work
non for the valid termination of employees who commit upon being so ordered or after the employer has
an illegal act in the course of such strike offered to reinstate him.

RULING However, separation pay is made an alternative relief


Not a condition sine qua non. Article 264(e) of the in lieu of reinstatement in certain circumstances, like:
Labor Code prohibits any person engaged in picketing (a) when reinstatement can no longer be effected in
from obstructing the free ingress to and egress from view of the passage of a long period of time or
the employers premises. Since respondent was found because of the realities of the situation; (b)
by the NLRC to have prevented the free entry into and reinstatement is inimical to the employers interest; (c)
exit of vehicles from petitioners compound, reinstatement is no longer feasible; (d) reinstatement
respondents officers and employees clearly committed does not serve the best interests of the parties
illegal acts in the course of the strike. The use of involved; (e) the employer is prejudiced by the workers
unlawful means in the course of a strike renders such continued employment; (f) facts that make execution
strike illegal. Therefore, pursuant to the principle of unjust or inequitable have supervened; or (g) strained
conclusiveness of judgment, strike was ipso facto relations between the employer and employee.
illegal. The filing of a petition to declare the strike
illegal was thus unnecessary. Consequently, we Here, PINA manifested that the reinstatement of the
uphold the legality of the dismissal of respondents petitioners would not be feasible because: (a) it would
officers and employees. Article 264 of the Labor Code inflict disruption and oppression upon the employer; (b)
further provides that an employer may terminate petitioners [had] stayed away for more than 15 years;
employees found to have committed illegal acts in the (c) its machines had depreciated and had been
course of a strike. Petitioner clearly had the legal right replaced with newer, better ones; and (d) it now sold
to terminate respondents officers and employees. goods through independent distributors, thereby
abolishing the positions related to sales and
ESCARIO v. NLRC distribution.
G.R. No. 160302, September 27, 2010, Bersamin
The appropriate amount for separation pay is one
Officers and members of Malayang Samahan ng mga month per year of service.
Manggagawa sa Balanced Foods walked out of the
premises of Pinakamasarap Corporation (PINA) and ABARIA VS. NLRC

131
G.R. No. 154113 PILA filed a complaint for ULP and illegal dismissal.
On July 7, 1995, Acting Labor Secretary Brillantes
Due to a violation to the constitution and by-laws of the assumed jurisdiction over the dispute and ordered all
Federation to which they belong to, the officers of the striking employees (except those terminated) to return
said union are temporarily suspended from their office to work within 24 hours. On the same day, PILA ended
and membership pending investigation. its strike.

The next day said union together with some of its On Aug. 28, 1995, PHIMCOM filed a petition to declare
members launch a series of mass action through the strike illegal claiming that the strikers prevented
"picketing" (wearing red and black armbands and ingress to and egress from the PHIMCO compound,
marching around the hospital with their placards, thereby paralyzing PHIMCOs operations. LA found the
posters and streamers), however for the span of 5 strike illegal. NLRC reversed the decision. Meanwhile,
months prohibited acts were committed by the strikers the LA declared the dismissal illegal