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Labor Law Digests 1

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

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

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

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

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

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

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

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

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

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

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

A: No. Petitioner was able to show that private respondents did not render services during the
stated period. X and Y even admitted that they did not report at the Kalibo office, as Lezo remained
to be their office where they continuously reported. It was not for X and Y to declare the
managements act of transferring the office to Kalibo as an illegal act as there was no allegation of
proof that such was made in bad faith or with malice. Private respondents were dismissed by
petitioner effective January 1992 and were accepted back, subject to the condition of no work, no
pay effective March 1993 which is why they were allowed to draw their salaries again. (Aklan
Electric Cooperative Incorporated v. NLRC, G.R. 121439, January 25, 2000)
Q: A was hired by Isetann Department Store as a security checker to apprehend shoplifters. As a
cost-cutting measure, private respondent decided to phase out its security section and engage the
services of an independent security agency. A was then terminated prompting him to file a
complaint for illegal dismissal. NLRC ordered petitioner to be given separation pay holding that
the phase-out of the security section was a legitimate business decision. However, A was denied
the right to be given written notice before termination of his employment. What is the effect of
violation of the notice requirement when termination is based on an authorized cause?

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

Q: A was employed as housekeeper with Company B. He also owned a car-for-hire which he

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

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

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

A: Yes. Failure to submit the strike vote to the NCMB immediately makes the strikek illegal. The
illegality of the strike is further affirmed by the acts of violence, threats and coercion committed
during the strike. The requirements of procedural due process were complied with as both parties
were allowed to present their witnesses and evidence, although petitioner opted instead to file a
memorandum. (Samahan ng Manggagawa sa Moldex Products, Inc. v. NLRC, G.R. No.
119467, February 1, 2000)
Q: V was hired by RFC as sales representative. He avers that he was transferred by RFC to PMCI,
an agency which provides RFC with additional contractual workers. In PMCI, he was reassigned to
RFC as sales representative and then later informed by the personnel manager of RFC that his
services were terminated. RFC maintains that no employer-employee relationship existed between
V and itself. V filed complaint for illegal dismissal. RFC alleges that PMCI is an independent
contractor as the latter is a highly capitalized venture. Was V a regular employee of RFC, thereby
illegally dismissed?

A: Yes. PMCI was a labor-only contractor. Although the Neri doctrine stated that it was enough
that a contractor had substantial capital to show it was an independent contractor, the case of Fuji
Xerox clarified the doctrine stating that an independent business must undertake the performance of
the contract according to its own manner and method free from the control of the principal. In this
case, PMCI did not even have substantial capitalization as only a small amount of its authorized
capital stock was actually paid-in. Furthermore, PMCI did not carry on an independent business or
undertake the performance of its contract according to its own manner and method nor was it
engaged to perform a specific and special job or service. In labor-only contracting, the employees
supplied by the contractor perform activities, which are directly related to the main business of its
principal. It is clear that in this case, the work of petitioner as sales representative was directly
related to the business of RFC. Due to Vs length of service, he had attained the status of regular
employee and thus cannot be terminated without just or valid cause. RFC failed to prove that his
dismissal was for cause and that he was afforded procedural due process. V is thus entitled to
reinstatement plus full backwages from his dismissal up to actual reinstatement. (Vinoya v. NLRC,
G.R. No. 126596, February 2, 2000)

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

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

Q: Company W is conducts a printing business in Sta. Cruz Makati. The Company informed its
workers that it was going to transfer its site in Makati to Batangas. It gave its employees time to
inform the management of their willingness to go with petitioner, otherwise, they would find
replacements. The Union advised the company that its members were not willing to transfer to the
new site. Are the employees entitled to separation pay by virtue of their refusal to transfer to the
business in Batangas.

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

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

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

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

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

A: No. Company Q exhausted administrative remedies available to it by seeking an MR. The

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

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

and the Union M culminating in the latters declaration of general autonomy from the former. The
federation asked the company to stop the remittance of Union Ms share in the education funds.
The federation called a meeting placing Union M under trusteeship and appointing an
administrator. Officers of Union M received letters from the administrator requiring them to
explain why they should not be removed from their office and expelled from union membership.
The officers were expelled from the federation. The federation then advised the company of the
expulsion of the 30 union officers and demanded their separation pursuant to the Union Security
Clause in the CBA. The Federation filed a notice of strike with the NCMB to compel the company
to effect the immediate termination of the expelled union officers. Under the pressure of a strike,
the company terminated the 30 union officers from employment. Union M filed a notice of strike
on the grounds of discrimination; interference; mass dismissal of union officers and shop stewards;
threats, coercion and intimidation; and union busting. Members of Union M prayed for the
suspension of the effects of their termination. Secretary Drilon dismissed the petition stating it was
a intra-uion matter. Later, 78 union shop stewards were placed under preventive suspension. The
union members staged a walk-out and officially declared a strike that afternoon. The strike was
attended by violence. Was the dismissal of the union officers illegal?
A: Yes. The charges against respondent company proceeded mainly from the termination of the
union officers upon the demand of the federation pursuant to the union security clause. Although
the union security clause may be validly enforced, such must comply with due process. In this case,
the union officers were expelled for allegedly committing acts of disloyalty to the federation. The
company did not inquire into the cause of the expulsion and merely relied upon the federations
allegations. The issue is not a purely intra-union matter as it was later on converted into a
termination dispute when the company dismissed the petitioners from work without the benefit of a
separate notice and hearing. As to the act of disaffiliation by the local union; it is settled that a local
union has the right to disaffiliate from its mother union in the absence of specific provisions in the
federations constitution prohibiting such. There was no such provision in federation ULGWPs

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

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

Q: The LA ordered petitioner to pay respondents the sum of P655, 866.41. Petitioner appealed to
the NLRC with a motion for the reduction of the supersedeas to P100,000 and thereafter posted a
cash bond of P100,000. The NLRC dismissed the appeal for insufficiency of the bond. Petitioner
said the Star Angel doctrine should apply where the appeal may be perfected after that period upon
posting of a cash or surety bond. However, the NLRC disagreed stating that in this case, the
petitioner did not file a motion for reduction of bond within the period but instead posted a bond in
an amount not equivalent to the monetary award. Was the motion for the reduction of the bond filed
in time?

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

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

A: No. The perfection of an appeal within the reglementary period and in the manner prescribed by
law is jurisdictional, and noncompliance with such legal requirement is fatal and has the effect of
rendering the judgment final and executory. Perfection of an appeal includes the filing, within the
prescribed period of the memorandum of appeal and posting of the appeal bond. In cases where the
judgment involves a monetary award, as in this case, the appeal may be perfected only upon posting
of a cash or surety bond to the NLRC. Since the X received the LAs decision on April 3, they had
only until April 13 to file their appeal. The bond was posted only on April 30; beyond the
reglementary period. The requirement of posting the bond has only been relaxed on grounds of
substantial justice and special circumstances which are not attendant in this case. Furthermore, the
bond posted was not genuine. The decision can no longer be amended nor altered by the labor
tribunal. (Navarro v. NLRC, G.R. No. 116464, March 1, 2000)

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

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

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

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

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

A: No. Article 241 has 3 requisites for the validity of the special assessment for unions incidental
expenses, attorneys fees and representation expenses. They are:
1. authorization by a written resolution of majority of all the members at the general membership
meeting called for the purpose
2. secretarys record of the minutes of the meeting
3. individual written authorization for check-off duly signed by the employees concerned.
Such requirements were not complied with, as there were no individual written check off
authorizations; thus, the employer cannot legally deduct thus the assessment. The union
should be made to shoulder the expenses incurred for the services of a lawyer and
accordingly, reimbursement should be charged to the unions general fund or account. No
deduction can be made from the salaries of the concerned employees other than those
mandated by law. (Gabriel, et al v. Secretary of Labor, G.R. No. 115949, March 16, 2000)

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

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

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

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

Q: A was employed as a data encoder by private respondent. From 1988 until 1991, she entered
into 13 employment contracts with private respondent, each contract for a period of 3 months. In
September 1991, A and 12 other employees allegedly agreed to the filing of a PCE of the rank and
file employees of private respondent. Subsequently, A received a termination letter due to low
volume of work. A filed a complaint for illegal dismissal. Was A a regular employee entitled to
tenurial security?

A: Yes. Even though petitioner is a project employee, as in the case of Maraguinot, Jr. v. NLRC,
the court held that a project employee or member of a work pool may acquire the status of a regular
employee when the following concur:
1. there is continuous rehiring of project employees even after the cessation of a project
2. the tasks performed by the alleged project employee are vital, necessary and indispensable to the
usual business and trade of the employer.
A was employed as a data encoder performing duties, which are usually necessary or desirable in
the usual business or trade of the employer, continuously for a period of more than 3 years. Being a
regular employee, A is entitled to security of tenure and could only be dismissed for a just and
authorized cause; low volume of work is not a valid cause for dismissal under Arts. 282 or 283.
Having worked for more than 3 years, A is also entitled to service incentive leave benefits from
1989 until her actual reinstatement since such is demandable after one year of service, whether
continuous or broken. (Imbuido v. NLRC, G.R. No. 114734, March 31, 2000)

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

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

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

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

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

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

A: No. As dismissal was brought about by utterances made during an informal Christmas
gathering. For misconduct to warrant dismissal, it must be in connection with the employees
work. In this case, the alleged misconduct was neither in connection with employees work, as As
utterances are not unusual in informal gatherings, neither was it of such serious and grave
character. Furthermore, As outburst was in reaction to the decision of the management in a certain
case and was not intended to malign on the person of the respondent companys president and
general manager. The company itself did not seem to consider the offense serious to warrant an
immediate investigation. It is also provided in the companys rules and regulations that for conduct
such as that of A, a first offense would only warrant a verbal reminder and not dismissal.
(Samson v. NLRC, G.R. No.121035, April 12, 2000).

Q: X was employed by Company C as assistant mechanic. X drove Company Cs truck to install a

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

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

Q: Y was a company nurse for the Company Z. A memorandum was issued by the personnel
manager of Company Z to Y asking her to explain why no action should be taken against her for (1)
throwing a stapler at plant manager William Chua; (2) for losing the amount of P1,488 entrusted to
her, (3) for asking a co-employee to punch in her time card one morning when she was not there.
She was then placed on preventive suspension. Another memorandum was sent to her asking her to
explain why she failed to process the ATM applications of her co-employees. She submitted a
written explanation as to the loss of the P1,488 and the punching in of her time card. A third
memorandum was sent to her informing her of her termination from service for gross and habitual
neglect of duties, serious misconduct, and fraud or willful breach of trust. Y claims that her
throwing of the stapler at plant manager William Chua was because the latter had been making
sexual advances on her since her first year of employment and that when she would not accede to
his requests, he threatened that he would cause her termination from service. As to the other
charges, she claimed that they were not done with malice or bad faith. Was Y illegally dismissed,
and if so, is she entitled to recover damages?

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

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

A: No. The Court ruled that since the dismissal is due to an authorized cause only notice is required
and that the employee has no right to present his side. The 30 day notice is needed in order to
afford the employee enough time to look for work and to give the DOLE time to look into the
validity of the authorized cause. 30 days pay is not enough to replace the notice requirement
because it would not serve the purpose of the notice. Additionally, backwages are not a severe
punishment because it is a consequence of the employers failure to give notice and due process
and the employee is therefore not deemed terminated so he should be compensated for that
period. (Serrano vs NLRC, GR No 117040, May 4, 2000)

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

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

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

A: Yes, there is discrimination. The principle equal pay for equal work should apply in this case.
Persons who work with substantially equal qualifications, skill, effort and responsibility, under
similar conditions, should be paid similar salaries. If an employee is paid less it is upon the
employer to explain why the employee is treated differently. Dislocation and limited tenure cannot
serve as adequate or valid bases for the difference in the salary rates. The other benefits are enough
to make up for these two factors. There is no reasonable distinction between the work of a local-
hire and a foreign-hire that will justify the difference. (International School Alliance of Educators
v. Quisumbing, GR No 128845, June 1, 2000)

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

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

Q: X was a radio operator on board a ship where he had a contract for 12 months. He was required
to submit himself to a medical examination. Prior to this, he had a pacemaker inserted to help his
cardiovascular functioning but he was still declared fit to work. On board the vessel, he had bouts
of coughing and he needed open heart surgery. He filed for sickness and disability benefits with the
POEA and these were awarded to him. Is the sickness compensable?

A: Yes, it is compensable. Compensability of the illness or death of seamen need not depend on
whether the illness was work connected or not. It is sufficient that the illness occurred during the
term of the employment contract. It will also be recalled that petitioners admitted that private
respondent's work as a radio officer exposed him to different climates and unpredictable weather,
which could trigger a heart attack or heart failure. Even assuming that the ailment of the worker
was contracted prior to his employment, this still would not deprive him of compensation benefits.
For what matters is that his work had contributed, even in a small degree, to the development of the
disease and in bringing about his eventual death. Neither is it necessary, in order to recover
compensation, that the employee must have been in perfect health at the time he contracted the
disease.(Seagull ShipManagement and Transport Inc. v. NLRC, GR No 123619, June 8, 2000)

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

A: No. The agent is a legitimate independent contractor. Labor-only contractor occurs only when
the contractor merely recruits, supplies or places workers to perform a job for a principal. The
labor-only contractor does not have substantial capital or investment and the workers recruited
perform activities directly related to the principal business of the employer. There is permissible
contracting only when the contractor carries an independent business and undertakes the contract in
his own manner and method, free from the control of the principal and the contractor has substantial
capital or investment. The agent, and not the company, also exercises control over the petitioners.
No documents were submitted to prove that the company exercised control over them. The agent
hired the petitioners. The agent also pays the petitioners, no evidence was submitted showing that it
was the company paying them and not the agent. It was also the agent who terminated their
services. By petitioning for regularization, the petitioners concede that they are not regular
employees. (Escario v. NLRC, GR No 124055, June 8, 2000)

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

appointed supervisor . He was instructed to report at private respondents main office where he was
informed by the companys personnel manager that he would be transferred to its Sucat plant due to
his failure to meet his sales quota, and for that reason, his supervisors allowance would be
withdrawn. For a short time, X reported for work at the Sucat plant; however, he protested his
transfer, subsequently filing a complaint for illegal termination. X decries his transfer as being
violative of his security of tenure, the clear implication being that he was constructively dismissed.
Was X constructively dismissed?
A: No. We have held that an employer acts well within its rights in transferring an employee as it
sees fit provided that there is no demotion in rank or diminution in pay. The two circumstances are
deemed badges of bad faith, and thus constitutive of constructive dismissal. In this regard,
constructive dismissal is defined as an involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or unlikely; when there is a demotion in rank or
diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes
unbearable to the employee. It should be borne in mind, however, that the right to demote an
employee also falls within the category of management prerogatives. An employer is entitled to
impose productivity standards for its workers, and in fact, non-compliance may be visited with a
penalty even more severe than demotion. Failure to observe prescribed standards of work, or to
fulfill reasonable work assignments due to inefficiency may constitute just cause for
dismissal. (Leonardo v. NLRC, G.R. No. 125303, June 16, 2000)

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

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

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

A: The NLRC decision has become final and executory. Neither a motion for reconsideration nor
appeal was ever taken by petitioners on this point. This procedural lapse is fatal. Equally
significant is the fact that petitioners actively participated in the enforcement of the execution by
garnishing the supersedeas bond and the bank deposits of PSVSIA. The NLRC prepared a
computation showing the back wages due petitioners for three (3) years. X not only assented to the
computation made when they did not object thereto but even filed a motion to release the remaining
balance amounting to P398,600.00 still in the hands of the NLRC to fully satisfy the judgment
awards. X cannot now claim that they have remained unpaid, especially considering that they have
already received the judgment award. (PGA Brotherhood Association, et al., v. NLRC, G.R. No.
131084, June 19, 2000).
Q: X was working as driver of passenger jeepneys. He lost his drivers license and asked for
permission to go on vacation leave to secure a new one. X only returned after three months when
he was able to obtained his license. He was however informed that another driver had already taken
his place. The company argues that the prolonged absence of X constituted abandonment. X filed a
case for illegal dismissal. Did Xs absence constitute abandonment?

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

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

A: Yes. In the case at bar, petitioners position demanded a high degree of responsibility, including
the unearthing of fraudulent and irregular activities. Petitioner failed to do such and her bare
denials did not disprove her guilt. The ordinary rule is that one who has knowledge peculiarly
within his control, and refuses to divulge it, cannot complain if the court puts the most unfavorable
construction upon his silence, and infers that a disclosure would have shown the fact to be as
claimed by the opposing party. Loss of confidence is one of the just causes for a valid dismissal;
and it is enough that there be some basis for such loss of confidence. The guidelines for the
application of the doctrine of loss of confidence as enunciated in Midas Touch Food Corporation,
a.....loss of confidence should not be simulated; should not be used as a subterfuge for causes which are improper, illegal or unjustified; may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; and must be genuine, not a mere afterthought to justify earlier action taken in bad faith.
An employer enjoys a wide latitude in the promulgation of company rules; and in this case, the
policies of respondent were fair and reasonable. (Nokom v. NLRC, G.R. No.140043, July 18,

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

1. No. The duty to bargain collectively includes the mutual obligation to meet and convene promptly
and expeditiously in good faith for the purpose of negotiating an agreement. Petitioner failed to
make a timely reply to the unions proposals, thereby violating the proper procedure in collective
bargaining as provided in Article 250. In order to allow the employer to validly suspend the
bargaining process, there must be a valid PCE raising a legitimate representation issue. In this case,
the petition was filed outside the 60-day freedom period; therefore there was no legitimate
representation issue and the filing of the PCE did not constitute a bar to the ongoing negotiation.
2. Yes. The dismissal was in violation of the employees right to self-organization. The dismissal
must be made pursuant to the tenets of equity and fair play; wherein the employers right to
terminate the services of an employee must be exercised in good faith; furthermore, it must not
amount to interfering with, restraining or coercing employees in their right to self-organization.
The factual backdrop of the Ambas termination reveals that such was done in order to strip the
union of a leader. Admittedly, management has the prerogative to discipline its employees for
insubordination. But when the exercise of such management right tends to interfere with the
employees right to self-organization, it amounts to union-busting and is therefore a prohibited
act. (Colegio de San Juan de Letran v. Association of Employees and Faculty of Letran, G.R.
141471, September 18, 2000)

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

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

1999 CASES

Q. A flight surgeon at PAL, was on duty from 4 pm until 12 midnight. At around 7 pm, he left the
clinic to have his dinner at his residence, a 5-minute drive away. While he was away, the clinic
received an emergency call for a PAL employee suffered from a heart attack. The nurse on duty
phoned the doctor at home to inform him of the emergency, then rushed the patient to the hospital at
7:50 pm. The doctor arrived at 7:51 pm. The patient died the following day. After investigation, the
doctor was charged with abandonment of post while on duty, and was later suspended for 3 months.
Was this suspension legal?

A. The suspension was illegal. Article 83 of the Labor Code (Normal hours of Work) provides that
Health personnel . . . shall hold regular office hours for eight (8) hours a day, for five (5) days a
week, exclusive of time for meals, (See Art. 85 - Meal Periods; Sec. 7, Rule I, Book III of the
Omnibus Rules (Meals and Rest periods) Thus, the 8-hour work period does not include the meal
break. Nowhere in the law may it be inferred that employees must take their meals within the
company premises, as long as they return to their posts on time. Private respondents act of going
home to take his dinner does not constitute abandonment. (Philippine Airlines, Inc. v. NLRC, 302
SCRA 582 (1999))

Q. A jet printer operator employed at Selecta was dismissed from employment for dishonesty and
theft of company property. Considering that the employee merely took 15 hamburger patties, a pair
of boots and an aluminum container, was dismissal the appropriate remedy?

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

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

A. The SC agrees with the LA and held that private respondent was indeed illegally dismissed. It
was only upon his complaint regarding his low salary that he was no longer allowed to report for
work. This amounted to dismissal without cause and without the requisite written notice. Such
circumstances make it difficult to sustain any allegation of abandonment. Abandonment, as a just
and valid cause for termination, requires a deliberate and unjustified refusal of an employee to
resume his work, coupled with a clear absence of any intention of returning to his or her work.
With regard to the salary differentials granted, petitioners claim exemption under RA 6727 (Wage
Rationalization Act) and the Rules Implementing Wage Order Nos. NCR-01 and NCR-01-A, as
well as Wage Order Nos. NCR-02 and NCR-02-A. However, regardless of the factual
circumstances in this case, the SC was not convinced as the petitioners could not even show any
approved application for exemption, as required by the applicable guidelines issued by the
Commission. (C. Planas Commercial v. NLRC, 303 SCRA 49 (1999))

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

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

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

A. Petitioners act of relieving himself can hardly be characterized as abandonment, much less a
willful or intentional disobedience of company rules since bowel movements are hardly
controllable. Aside from the discomfort it causes, restraining ones bowel movements adversely
affects the efficiency and health of the worker. Neither could it have disrupted the operations of the
company as to cause it irreparable damage. As such, answering the call of nature is a valid reason
to leave the work area. (Dimabayao v. NLRC, 303 SCRA 655 (1999))

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

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

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

A. The Company was allowed to submit Annex 2 which contained the gambling allegations with
the LA, there was no showing whether the NLRC gave the petitioner a clear chance to rebut the
contention. Considering the lateness of its submission, and the critical fact it alleged, this was the
least that should have been done by the NLRC. Therefore, petition granted. NLRC committed grave
abuse of discretion. LAs decision reinstated. (Villa v. NLRC, 303 SCRA 481 (1999))

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Q: PICOP grants certain allowances to its employees depending on the circumstances and need for
such. The allowances in question pertains to the following:
1. Staff/Managers Allowance: Free housing facilities to supervisory and managerial employees
assigned in Bislig. Due to shortage of housing facilities, the company was constrained to grant
allowances to those who live or rent houses near the vicinity of the mill site.
2. Transportation Allowance: granted to Managers assigned to the mill site who use their own
vehicles in the performance of their duties.
3. Bislig Allowance: given in consideration of being assigned to the hostile environment then
prevailing in Bislig.
The Executive Labor Arbiter opined that the subject allowances formed part of the
employees wages. Citing jurisprudence, he concluded that the allowances should be included in the
computation of the employees base pay in determining the separation pay. The NLRC did not share
the view of the Labor Arbiter. It found that the allowances were contingency-based and thus not
included I their salaries. Did the subject allowances form part of the petitioners wage?

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

Q: A was employed by IBM for 16 years as an Engineer. He was informed, through a letter, that his
employment with the company was to be terminated on the grounds of habitual tardiness and
absenteeism. Alleging that his dismissal was without just cause and due process, he filed a
compliant with the DOLE. He also claimed that he was not given the opportunity to be heard and
hat he was summarily dismissed from employment based on charges which has not been duly
proven. IBM denied As claims. It was alleged that A was told of his poor attendance record and
inefficiency through the companys internal electronic mail system. Attached to IBMs position
paper were copies of printouts of alleged computer entries/messages sent by the company to A
through the internal email system. Was A validly dismissed?

A: No. It appears, however, that As Daily Time Record (DTR) and pay slips showed that he did not
incur any unexcused absences, he was not late on any day and, that no deduction was made from his
salary on account of tardiness or absences. The computer print outs, which constitutes the only
evidence of IBM, afford no assurance of their authenticity because they are unsigned It is true that
administrative agencies are not bound by the technical rules of procedure and evidence in the
adjudication of cases. However, the liberality of procedure is subject to limitations imposed by
basic requirements of due process. The evidence presented before the NLRC must at least have a
modicum of admissibility for it to be given some probative value. The print outs likewise failed to
show that A was allowed due process before his dismissal. The law requires an employer to furnish
the employee two written notices before termination of his employment may be ordered. These
requirements were not observed in this case. (IBM Philippines v. National Labor Relations
Commission, 305 SCRA 592, 13 April 1999)

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

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

Q: S was employed by JVAC Corporation in 1969. He retired on 1992 when he was 62 years old.
Subsequently, S brought a complaint for retirement benefits and service incentive leave pay before
the NLRC against the corporation. The Labor Arbiter granted retirement pay to S under RA 7641.
The corporation challenged this decision asserting that S retired almost a year prior to the effectivity
of the said law (7 January 1993), and thus the retirement benefits under RA 7641 should not be
applied retroactively. Was S entitled to the retirement benefits under RA 7641?

A: No. The Court held in a previous case that RA 7641 granting retirement benefits is undoubtedly
a social legislation. There should be little doubt about the fact that the law can apply to labor
contracts still existing at the time the statute has taken effect, and that its benefits can be reckoned
not only from the date of the laws enactment but retroactively to the time said employment contract
have started. The aforecited doctrine was elaborated upon by enumerating the circumstances which
must concur before the law could be given retroactive effect: (1) the claimant must still be an
employee of the employer at the time the statute took effect; and (2) the claimant has complied with
the requirements for eligibility under the statute. In the case under scrutiny, S retired and ceased to
be an employee of JVAC Corporation eleven months before the effectivity of RA 7641. It is thus
decisively clear that the provisions of RA 7641 could not be given retroactive effect in his
favor. (J.V. Angeles Construction Corporation v. NLRC, 305 SCRA 734, 14 April 1999)

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

A: Yes. In a previous case, the Court held that a party is estopped to challenge the personality of a
corporation after having acknowledged the same by entering into a contract with it. In the present
case, ALU acknowledged the legal existence of NAFLUs affiliate by entering into an agreement
with NAFLU. ALU aver that their agreement with NAFLU on the holding of a certification election
with a suspensive condition was not complied with. Considering, however, that NAFLU was able to
submit the documents required by the agreement, such compliance retroacted to the date the
agreement was signed.
The order of the Med-Arbiter granting the petition for the certification election has become
final in view of ALUs failure to appeal there from. Under the Labor Code, a party has the right to
appeal an order allowing or granting a petition for certification election. But the right of appeal may
only be exercised within 10 calendar days from the receipt of the order. (Associated Labor Unions
v. Quisumbing, 305 SCRA 762, 14 April 1999)
Q: A was a police officer assigned to PNP Vigan. While he was driving his tricycle and ferrying
passengers, he was confronted by another police officer about his tour of duty. A verbal tussle then
ensued between the two, which led to the fatal shooting A. On account of As death, his wife filed a
claim for death benefits with the GSIS. In its decision, GSIS denied the claim on the ground that at
the time of his death, A was performing a personal activity that was not work-connected.
Subsequent appeal to the Employees Compensation Commission (ECC) proved to be futile as it
merely affirmed the decision of GSIS. The Court of Appeals, however, ruled otherwise. It decided
that as applied to a peace officer, As work place is not confined to the police precinct or any
station, but to any place where his services, as a lawman, to maintain peace and security, are
required. At the time of his death, A was driving his tricycle at the town complex where the police
assistance center is located. There can be no dispute therefore that he met his death literally in his
place of work. Policemen, by the nature of their functions, are deemed to be on a round-the-clock
duty. Must the activity being performed at the time of death be work-connected for it to be

A: Yes. While it agrees that policemen are at the beck and call of public duty as peace officers and
technically on duty round-the-clock, the same does not justify the grant of compensation benefits
for the death of A. Obviously, the matter A was attending at the time of his death, that of ferrying
passenger for a fee, was intrinsically private and unofficial in nature proceeding as it did from no
particular directive or permission of his superiors officers. The 24-hour duty doctrine, as applied to
policemen and soldiers, serves more as an after-the-fact validation of their acts to place them within
the scope of the guidelines rather than a blanket license to benefit them in all situations that may
give rise to their deaths. In other words, the 24-hour doctrine should not be sweepingly applied to
all acts and circumstances causing the death of a police officer but only tot hose which, although not
on official line of duty, are nonetheless basically police service in character. Therefore, death
benefits under the ECC should not be granted. (Government Service Insurance System v. Court
of Appeals, 306 SCRA 41, 20 April 1999)

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

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

Q: Philippine Rabbit Inc. (PRI) employed PE as a bus conductor. On 1975, petitioner terminated the
services of PE, prompting him to sue PRI for illegal dismissal. The Labor Arbiter declared the
dismissal to be illegal and ordered reinstatement with full backwages. PRI appealed to the NLRC
but the appeal was dismissed, as the same was not filed within the reglementary period. PRI
appealed to the Office of the President, which directed PRI to reinstate PE but only pay backwages
for six months. PE was paid the backwages but he was not reinstated. Thus, he moved for a second
writ of execution on 1985 and the payment of backwages from 1979 (the date he presented himself
for reinstatement) until he could actually be reinstated. The NLRC granted the Writ of Execution.
Did the NLRC committed a grave abuse of discretion in modifying the amending the final and
executory order of the Office of the President, and in enforcing by mere motion the final judgment
of the Office of the President despite the lapse of seven years?

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

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

A: Yes. Large-scale illegal recruitment has the following elements: (1) The accused undertook
recruitment activities or any prohibited practice under the Labor Code. (2) He did not have the
license or authority to lawfully engage in the recruitment and placement of workers. (3) He
committed the same to two or more persons. The prosecution evidence proved beyond reasonable
doubt that the foregoing elements were present in this case. There is no question that RC did not
have a license to engage in he recruitment of workers, as she herself admitted, and that the crime
was committed against more than three persons. The evidence on record belies her argument that
she did not engage in the recruitment and placement of workers. The testimonies of the recruits
unequivocally prove that RC promised the three jobs abroad provided they would pay the placement
fee. The fact that each of them paid the down payment is evidence by the receipts issued and signed
by RC. (People of the Philippines v. Castillon, 306 SCRA 271, 21 April 1999)

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

A: No. The remand of the case to the Labor Arbiter for the reception of evidence has no legal or
actual basis. Subject to the requirements of due process, proceedings before the Labor Arbiter are
generally non-litigious, because technical rules and procedures of ordinary courts of law do not
strictly apply. Thus, a formal or trial-type hearing is not always essential. In the absence of any
palpable error, arbitrariness or partiality, the method adopted by the Labor Arbiter to decide a case
must be respected by the NLRC.
AA was not deprived of due process of law, the essence of which is simply the opportunity
to be heard. It must be stressed that all the parties to the case were given equal opportunities to air
their respective positions before the Labor Arbiter. That AA failed to fully air his position by his
own inaction or negligence does not constitute deprivation of due process. (Caete and Isabida v.
National Labor Relations Commission, 306 SCRA 324, 21 April 1999)
Q: AL was a seaman on board the vessel M/V Cast Muskoz. His lifeless body was found hanging
by the neck from the ceiling of an old abandoned warehouse in Quebec, Canada. According to the
coroner, the probable cause of death was asphyxiation by hanging. When ALs body was flown to
Manila, his father noted that the body bore several bruises. They submitted the cadaver to the NBI
for an autopsy. Considering that the findings of the NBI were all inconsistent with suicide, the
father filed a claim with the POEA. The POEA dismissed the compliant of the father based on the
solid evidence of the employer-shipping company. On appeal, the NLRC affirmed the ruling of the
POEA. Apparently, both labor bodies anchored their conclusion on the fact that had there been foul
play involved in ALs death, the $2, 000.00 in his pocket would have been taken. Was the father of
AL entitled to his sons death benefits?

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

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

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

Q: Accused Enriquez promised employment in Taiwan to at least 42 people. They were each asked
to pay processing fees ranging from P3, 370 to P5, 000 for which no receipts were issued and to
submit documents to facilitate their travel and subsequent deployment abroad. The POEA issued a
certification showing the Enriquez is not licensed to engage in the recruitment of workers for
overseas employment. In her defense, Enriquez claimed that it was her common-law husband who
was engaged in the business and she only acted as his secretary when she dealt with the
complainants. She allowed him to establish his recruitment office at her residence. Enriquez
claimed that she only helped her husband in the office for three months while he was looking for a
secretary. Part of her duties then was to collect the documents submitted by the applicants and
receive the money they paid as placement fees. Is she guilty of illegal recruitment in large-scale?

A: Yes. The essential elements of the crime of illegal recruitment in large-scale can be summarized
as follows: (1) the accused engages in acts of recruitment and placement of workers as defined in
the Labor Code; (2) the accused does not have a license or authority from the Secretary of Labor to
recruit and deploy workers; and (3) the accused commits the same unlawful acts against three or
more persons, individually or as a group.
The theory of the defense unduly strains the credulity of the Court. The complainants
positively identified Enriquez as the one who dealt directly with them from the time they inquired
about the job prospects abroad until they complied with the requirements and followed up their
applications. Worth reiterating is the rule that illegal recruitment in large-scale is malum
prohibitum, not malum in se, and that the fact alone that a person violated the law warrants her
conviction. Any claim of lack of criminal intent is unavailing. (People of the Philippines v.
Enriquez, 306 SCRA 739, 5 May 1999)

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

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

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

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

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

A: No, the law does not consider as valid any agreement to receive less compensation than what a
worker is entitled to recover nor prevent him from demanding benefits to which he is entitled. It is
appalling that H would settle for a measly consideration of P15, 000 which is grossly inadequate,
that is could not have given rise to a valid waiver on the part of the disadvantaged employee.
In order that a quitclaim may be valid, the requisites are: (1) there was no fraud or deceit on
the part of any party; (2) the consideration of the quitclaim is credible and reasonable; and (3) that
the contract is not contrary to law, public order, public policy, morals or good custom. But even
assuming that the ailment of H was contracted prior to his employment with the maritime agency,
this fact would not exculpate petitioners from liability. Compensability of an ailment does not
depend on whether the injury or disease was pre-existing at the time of the employment but rather if
the disease or injury is work-related or aggravated his condition. It is safe to presume, at the very
least, the arduous nature of Hs employment had contributed to the aggravation of his injury, if
indeed it was pre-existing at the time of his employment. Therefore, it is but just that he be duly
compensated for it. (More Maritime Agencies and Alpha Insurance v. NLRC, 307 SCRA 189,
18 May 1999)

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

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

Q: C, a managerial employee, was accused of sexually harassing a subordinate, S. After hearing

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

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

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

A: Yes. Examinations of union accounts are expressly classified by the Rules of Procedure on
Med-Arbitration, and a different process is provided for the resolution of the same. According to
Art. 226 of the Labor Code, the BLR has appellate jurisdiction over the matter, so the DOLE
Secretary was correct in its endorsement of the case. (Barles v. Bitonio, 308 SCRA 288, June

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

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

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

A: Geniston is a personal driver of Tio, and as such, the company is not obliged to grant overtime
pay, holiday pay, premium pay and service incentive leave, including 13th mo. pay. However, since
T admitted that she has given R 13th mo. pay every December, it is but just to award R such
benefit. (Ultra Villa Food Haus v. Geniston, 309 SCRA 17, June 1999).

Q, a former employee of SURNECO, sent letters to the company management requesting separation
benefits for her 9 years of faithful service to the company. Nearly four months later, E, then
Personnel Officer of SURNECO, followed up and made a review of Qs case. Subsequently, Q
filed a complaint for illegal dismissal, based largely on the report of E acting in favor of Q. The
complaint was barred by prescription, but because of what had happened, E was terminated for
having provided Q with the weapons and ammunition to wage a war against the cooperative.
Furthermore, the Board of SURNECO concluded that advancing the interest of Q instead of the
company, especially since she divulged the contents of her internal memorandum to Q, were
inimical to the company and merited dismissal. Was E illegally dismissed?

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

Q: RA 6715 was passed creating a new classification of employee, the supervisory employee, as not
being a member of the rank and file but also not considered a managerial employee. At around this
time, the supervisory employees of Semirara Coal decided to form their own union and intervene in
the certification elections. However, the company filed a motion to disqualify the supervisory
employees from participating in the certification elections, as their functions were managerial in
nature. Should they be allowed to participate in the certification elections?

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

Q: Complainants are deaf-mutes hired by Company F as money sorters and counters through an
agreement called, Employment Contract for Handicapped Worker. The Labor Arbiter and NLRC
ruled that Article 280 was not controlling as complainants were hired as an accommodation to the
recommendation of civic oriented personalities whose employments were covered by Employment
Contracts with special provisions on duration of contract as specified under Art. 80. Hence, the
terms of the contract was be the law between the parties. Complainants allege that the contracts
served to preclude the application of Article 280 and to bar them from becoming regular
employees. Company F submits that complainants were hired as special workers under Art. 80 of
the Labor Code and they never solicited the services of petitioners. Were complainants regular

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

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

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

Q: M was employed by petitioner as a truck driver. One day, he was accused of tampering with the
vale sheet and he was subsequently barred from entering company premises. M filed a complaint
of illegal dismissal against private respondent before the NLRC. A copy of the summons was sent
to petitioners by registered mail and was duly received and signed. The petitioner was also notified
of the hearing date by registered mail but no one appeared for the petitioner. The Labor Arbiter
deemed petitioners non-appearance as a failure to controvert the facts as claimed by M and decided
the case ex-parte. The petitioners allege that they never received copies of summons or notices and
that the Labor Arbiter never acquired jurisdiction over them, as there was no valid service of
summons. Were the petitioners denied due process?
A: No. The bare assertion of petitioner that the persons who signed the summons which were sent
by registered mail were impostors or persons unknown to them requires substantiation by
competent evidence. In quasi-judicial proceedings of the NLRC, procedural rules governing service
of summons are not strictly construed and substantial compliance is therefore sufficient. Further,
official duty is presumed to have been performed regularly unless the contrary is proven. In
administrative proceedings, due process simple means the opportunity to explain ones side or seek
a reconsideration of the action complained of. Petitioners were able to file an appeal before the
NLRC of the Labor Arbiters decision and a party who has availed of the opportunity to present his
position cannot claim to have been denied due process.
The Court also ruled that M was constructively dismissed when he was accused of
tampering with the vale sheet and prevented from going to work. The assertion of petitioner that M
abandoned his work is also without merit as it is highly illogical for an employee to abandon his
employment and thereafter file a complaint for illegal dismissal. Even assuming that there was
abandonment, there was non-compliance with the statutory requirement of notice; therefore M is
entitled to separation pay and backwages.(Masagana Concrete Products v. NLRC, 313 SCRA
576, 3 September 1999)

Q: L was employed by NAPCO-Luzmart, which was managed by petitioner Garcia. A mauling

incident occurred in the company premise involving L and another employee. The following day
after the incident, L submitted his written explanation of the event. 3 days later, L attempted to
report for work but the company refused to admit him. L immediately filed a complaint for illegal
dismissal with the NLRC. After the company knew of the illegal dismissal charge against it, a
memorandum was issued ordering the suspension of L. The company asserted that L remains an
employee and was merely suspended for a month. Proof of this, the company presented the payrolls
where the name of L continued to be listed as a regular employee during the period after the alleged
illegal dismissal. The company claimed that L abandoned his work when he failed to report for
work after notice of return. Was L illegally dismissed?

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

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

A: Yes. Since effectively, no appeal bond was posted by petitioners, no appeal was perfected from
the decision of the Labor Arbiter, for which reason the decision sought to be appealed to the NLRC
became final and executory and immutable. The requirement of cash or surety bond to perfect an
appeal from the Labor Arbiters monetary award is jurisdictional; non-compliance is fatal and
renders the award final and executory. It is not an excuse that the bond of P2 million is too much for
a small business enterprise. The law does not require outright payment but only the posting of a
bond to ensure that the award will eventually be paid should the appeal fail. (Biogenerics
Marketing and Research Corporation v. NLRC, 313 SCRA 748, 8 September 1999)

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

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

Q: X was hired by Respondent under a 2 year contract in Kuwait. Only after 1 year, however, X
was terminated from employment and was sent back to the Philippines. X then filed a complaint for
illegal dismissal with the Labor Arbiter. Respondents were given by the Labor Arbiter 10 days to
answer the charges against. Respondents submitted a bill of particulars instead alleging that X was
lacking in the required narration of facts constituting the causes of action. X, on the other hand,
moved to declare respondents in default for failing to submit their position papers. Both parties
agreed that the Labor Arbiter should decide on the motion on the Bill of Particulars. The Labor
Arbiter, however, declared the respondents in default for failure to submit their position papers
within the period given. Were the respondents denied due process?

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

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

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

Q: Respondent X was hired by the Blue Dairy to work as a food technologist in the latters
laboratory. One day however, while attending to a client outside company premises as accompanied
by the company driver, the vehicle was hit by a post, as there was a typhoon. Afterwards, X was
then transferred from the laboratory to the vegetable processing section; she was then barred from
the laboratory. X claims that she was constructively dismissed as she was evidently demoted. Was
X constructively dismissed from work?

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

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

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

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

1998 CASES

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

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

Q. Reynaldo worked as a bus driver for Nelbusco, Inc.. On February 28, 1993, the airconditioning
unit of the bus which Reynaldo was driving suffered a mechanical breakdown. The company told
Reynaldo to wait until the airconditioning unit was repaired. No other bus was assigned to
Reynaldo to keep him gainfully employed. Reynaldo continued reporting to his employers office
for work, only to find out that the airconditioning unit had not been repaired. More than six
months elapsed but Reynaldo was not given work. He filed a complaint for illegal dismissal. The
NLRC ruled that there was no illegal dismissal. Is the ruling correct?

A. No, the ruling is erroneous. Under Article 286 of the labor Code, the bona fidesuspension of the
operation of a business or undertaking for a period not exceeding six months shall not terminate
employment. Consequently, when the suspension exceeds six months, the employment of the
employee shall be deemed terminated. By the same token and applying said rule by analogy, if the
employee was forced to remain without work or assignment for a period exceeding six months, then
he is in effect constructively dismissed. The so-called floating status of an employee should last
only for a legaly prescribed period of time. When that floating status lasts for more than six
months, he may be considered to have been illegally dismissed from the service. (Valdez v.
NLRC, 286 SCRA 87, February 9, 1998)

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

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

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

A. The NLRCs computation is erroneous. Federico was not illegally dismissed while working in
the Middle East project. He was dismissed from the work pool after the completion of the Middle
East project. If Federico were given local assignments after his stint abroad, he would have
received the local wage. This is the loss which backwages aim to restore. The computation
should be based on the local rate. (PNCC v. NLRC, 286 SCRA 329, February 12, 1998)

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

A. No, the dismissal was due to a retrenchment program. In exercising its right to retrench
employees, the firm may choose to close all, or a part of, its business to avoid further losses or
mitigate expenses. The fact that only the dismissed employees sewing line was phased out does
not make their termination a case of redundancy. Redundancy exists where the services of an
employee are in excess of what would reasonably be demanded by the actual requirements of the
enterprise. A position is redundant when it is superfluous. Retrenchment, in contrast to
redundancy, is an economic ground to reduce the number of employees. In order to be justified, it
must be due to business losses which are serious, actual and real. In this case, the phasing out of
the line for simple garments and, consequently, the termination of employees assigned to such line,
was due to serious business losses. Hence, it constitutes retrenchment. (Edge Apparel, Inc. v.
NLRC, 286 SCRA 303, February 12, 1998)

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

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

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

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

(b) No, Juana did not abandon her job. Abandonment, as a just and valid ground for termination,
means the deliberate, unjustified refusal of an employee to resume his employment. The burden of
proof is on the employer to show a clear and deliberate intent on the part of the employee to
discontinue employment. The intent cannot be lightly inferred from certain equivocal acts. For
abandonment to be a valid ground for dismissal, two elements must be proved: the intention of an
employee to abandon, coupled with an overt act from which it may be inferred that the employee
has no more intent to resume his/her work. In this case, these elements are not present. (Del
Monte Philippines, Inc. v. NLRC, 287 SCRA 71, March 5, 1998)

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

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

Q. Jose, a married man, was employed as a teacher by Hagonoy Institute. Likewise working as a
teacher for Hagonoy Institute was Arlene, also married. In the course of their employment, Jose
and Arlene fell in love and had a relationship. After complying with the procedural requirements,
Hagonoy terminated the services of the couple. Is the dismissal valid?
A. Yes, the dismissal is valid. The illicit relationship between Jose and Arlene can be considered
immoral as to constitute just cause to terminate the couple. To constitute immorality, the
circumstances of each particular case must be considered and evaluated in light of the prevailing
norms of conduct and applicable laws. In the present case, the gravity of the charges against the
couple stem from their being married and at the same time teachers. Teachers must adhere to the
exacting standards of morality and decency. A teacher, both in his/her official and personal
conduct, must display exemplary behavior. He/she must freely and willingly accept restrictions on
his/her conduct that might be viewed irksome by ordinary citizens. Teachers must abide by a
standard of personal conduct which not only proscribes the commission of immoral acts, but also
prohibits behavior creating a suspicion of immorality because of the harmful impression it might
have on students. (Santos v. NLRC, 287 SCRA 117, March 6, 1998)

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

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