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I. FOUR-FOLD TEST
Purpose: to determine the existence of employer-employee
relationship [Brotherhood Labor Unity Movement of the
Philippines, et al. vs. Zamora | G.R. No. 48645. 7 January, 1987.
a. Selection and engagement of the employee;
b. Payment of wages;
c. The power of dismissal; and
d. The employers power to control the employee with
respect to the means and methods by which the work is
to be accomplished. [control test]
II. DOCTRINE OF LOSS OF CONFIDENCE
DOLC applies when the employee concerned holds a position of trust
and confidence, and that the loss thereof is justified by the act of the
employee willfully breaching/betraying the employers trust. Such act
of betrayal must be in relation to his work, and which renders him unfit
to perform the same.
Further, DOLC requires that the loss of confidence should not be
simulated; not used as a subterfuge for causes which are improper,
illegal or unjustified; and it must be genuine, and substantial. DOLC
may not be arbitrarily asserted in the face of overwhelming evidence
to the contrary [Ramon vs. CA, et al | G.R. No. 14505. 29 June 2004].
***Note: Loss of confidence is one of the just causes, provided under
Art. 288 (c) of the Labor Code, for a valid termination of employment
by the employer in its exercise of management prerogative to dismiss
or layoff an employee.
III. ABANDONMENT
Abandonment of employment is a form of neglect of duty; one of the
just causes, provided under Art. 288 (b) of the Labor Code, for a valid
termination of employment by the employer in the exercise of its
management prerogative to dismiss or layoff an employee.
To constitute as a ground for termination, the employee must have
failed to report for work, or must have been absent without valid or
justifiable reason. Also, there must have been a clear intention on the
part of the employee to sever the employer-employee relationship, as
manifested by some overt act [Unicorn Safety Glass Inc., et al. vs. Rodrigo
Basarte, et al. | G.R. No. 154689. 25 November 2004].
IV. AUTHORIZED CAUSES FOR TERMINATION OF EMPLOYMENT
1. Business-related causes (Art. 298 of the Labor Code)
a. Installation of labor-saving device;
b. Redundancy;
c. Retrenchment;
d. Closure or cessation of business operation NOT due to
serious business losses of financial reverses; and
e. Closure or cessation of business operation due to serious
business losses of financial reverses.
2. Health-related causes (Art. 299 of the Labor Code)
An employer may terminate the services of an employee
who has been found to be suffering from any disease and
whose continued employment is prohibited by law or
prejudicial to his health, as well as to the health of his co-
employees [Cebu Royal Plant vs. Deputy Minister | 153
SRCA 38].
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V. REQUISITES OF RETRENCHMENT To afford employee concerned an opportunity to answer his

employers charges against him and accordingly to defend
Retrenchment is the reduction of personnel/employees for the
himself therefrom before dismissal is effected [Century Textile
purpose of cutting down on costs of operations in terms of salaries and
Mills, Inc. vs. NLRC | G.R. No. 77857. 25 May 1988].
wages resorted to by an employer because of losses in operation of a
business occasioned by lack of work and considerable reduction in the
volume of business [Alabang Country Club vs. NLRC | G.R. No. 157611. 9
VII. FACILITIES VS. UTILITIES
August 2005].
1. Substantive requisites:
UTILITIES
a. It is reasonably necessary and likely to prevent business
FACILITIES (Supplements)
losses;
b. The losses, if already incurred, are not merely de minimis but
substantial, serious, actual and real, or if only expected, are Items of expense necessary for the Ectra remuneration or special
reasonably imminent; laborers and his familys priveleges or benefits given to or
c. The expected or actual losses must be proved by sufficient and existence and subsistence. received by the laborers over and
convincing evidence; and above their ordinary earnings or
d. The retrenchment must be in good faith. Benefit or privilege given part of wages.
[NDC-GUTHRIE Plantations Inc. vs. NLRC, et al. | G.R. No. the laborers basic wages.
110740. 9 August 2011] Not wage-deductible.
By express provision of law, it
2. Procedural Requisites: forms part of the wage, and when
a. Written notice both to the employees and DOLE; and furnished by the employer are
deductible therefrom, since if they
b. Separation pay equivalent to one (1) month pay or at least
are not furnished, the laborer
month pay for every year of service, whichever is higher.
would spend and pay for them just
c. the same.
VI. REQUISITES OF DUE PROCESS IN CASES OF DISMISSAL

1. The requirement of notice [Mabeza vs. NLRC, et al. | G.R. No. 118506. 18 April, 1997]

To inform the employee concerned of the employers intent to

dismiss and the reason for the proposed dismissal.

2. The requirement of hearing

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VIII. SERVICE INCENTIVE LEAVE (SIL) PAY ***Note: A probationary employment is one in which the
employment shall not exceed six (6) months from the date the
The yearly mandatory 5-day leave with pay for every employee
employee started working, unless covered by an apprenticeship
who has rendered at least one (1) year of service, either
agreement stipulating a longer period.
continuous or broken, reckoned for the time employee started
working (Secs. 2 and 3, Rule V, Book III, Rules to Implement the
Labor Code).
X. DOCTRINE OF STRAINED RELATIONS
SIL, as provided under Sec. 5 of the same Rule, provides that it
When the employer can no longer trust the employee and vice-versa,
shall be commutable to its money equivalent if not use or
reinstatement could not effectively serve as a remedy. This applies
exhausted at the end of the year.
only to positions which requires trust and confidence, or to
Exceptions: managerial employees.

a. Those of the government and any of its political subdivisions,

including GOCCS;
XI. LABOR-ONLY CONTRACTING
b. Domestic helpers and persons in the personal service of
another;
c. Managerial employees;
d. Filed personnel and other employees whose performance is
Labor-only Contracting Independent Contractor
unsupervised by the employer;
e. Those who are already enjoying the benefit herein provided;
f. Those enjoying vacation leave with pay for at least five (5) The person supplying
days; and workers to an employer does
g. Those employed in establishments regularly employing less not have substantial capital or
than ten (10) employees. investment in the form of
(Sec. 1 Rule V, Book III, Rules to Implement the Labor Code) tools,equipment,machineries,
work premises, among
others, and the workers
IX. RATIONALE FOR PROBATIONARY EMPLOYMENT
recruited and placed by such
person are performing
Probationary employment affords employer the opportunity to activities which are directly
observe the fitness of the probationary employee to work. On the related to the principal
other hand, probationer seeks to prove to the employer that he has business of such employer. In
the qualifications to meet the reasonable standards for permanent such cases, the person or
employment. intermediary shall be
considered merely as an

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agent of the employer who ***Labor Standards Law, on the other hand, is that part of the law
shall be responsible to the which prescribes the minimum terms and conditions of employment
workers in the same manner which the employer is required to grant its employees.
and extent as if the latter were
directly employed by him. LABOR RELATIONS Defines the status, rights and duties, and the
institutional mechanism that govern the individual and collective
In labor only contracting, any of
interactios of employers, employees or their representatives.
the following elements are
present: Specifically, it is that part of labor law which deals with unionism,
a. The contractor or collective bargaining, grievance machinery, voluntary arbitration,
subcontractor does not have strike, picketing and lockout.
substantial capital or investment
to actually perform the job, work
SOCIAL LEGISLATION Laws that provide particular kind of
or service under its own account
and responsibility; and the protection or benefits to society or segments thereof in furtherance
employees recruited, supplied or of social justice.
placed by such contractor or
subcontractor are performing
activities which are directly ***Social justice is neither communism, nor despotism, nor atomism,
related to the main business of nor anarchy, but the humanization of laws and the equalization of
the principal; or social and economic forces by the State so that justice in its rational
b. The contractor does not
and objectively secular conception may at least be approximated.
exercise the right of control over
the performance of the work of Social justice means the promotion of the welfare of all the people,
the contractual employee. (PAL the adoption by the Government of measures calculated to insure
vs. Ligan, G.R No. 14608, economic stability of all the competent elements of society, through
February 29, 2008) the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-
XII. DEFINITIONS constitutionally, through the exercise of powers underlying the
existence of all governments on the time-honored principles of salus
LABOR STANDARDS - Minimum requirements prescribed by populi estsuprema lex [Calalang vs. Williams | 70 Phil 726. 1940].
existing laws, rules and regulations to wages, hours of work, cost-of-
living allowances, and otger monetary and welfare benefits including
occupational safety and health standards (Maternity Childrens
Hospital vs. Secretary of Labor | G.R. No. 78909. 30 June 1989).

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XIII. CONCILIATION VS. MEDIATION VS. ARBITRATION Mediator offers an

opinion which is not
binding on the parties.

CONCILIATION MEDIATION ARBITRATION Regardless of which of

(Voluntary) the 2 methods above is
chosen, the Mediator is
not empowered to
impose his will on the
A process whereby a third person usually called The mode of settling
parties.
Conciliator (in case of conciliation) or Mediator (in labor-management
case of mediation), intervenes in a dispute disputes in which the
involving two or more conflicting parties for the parties select a
purpose of reconciling their differences or competent, trained and
persuading them into adjusting or settling their impartial third person XIV. RELIEFS AVAILABLE TO AN ILLEGALLY DISMISSED EMPLOYEE
dispute. The Conciliator or Mediator normally does who is tasked to decide
not make or render any decision, his role being on the merits of the case The following reliefs that are awarded in illegal dismissal cases:
confined to the functions afore-described. and whose decision is
final and executory. 1. Award of separation pay in lieu of reinstatement;
2. Award of penalty in the form of nominal damages in case of
termination due to just or authorized cause but without observance
Conciliator is given Mediator normally Voluntary arbitrator of due process.
more power and facilitates a deliberation refers to any person 3. Reliefs to illegally dismissed employee whose employment is for a
authority in that he may or discussion of the who has been mutually fixed period. Payment of employees salaries for the unexpired
not only offer an issues between the named or designated by portion of the employment contract.
opinion on the issues at parties. He may or may the parties to the CBA --
4. Award of damages and attorneys fees.
hand but may actually not offer any opinions -the employer and the
make a binding opinion on the strength and bargaining agent --- to 5. Award of financial assistance in cases where the employees
thereon provided the weaknesses of each hear and decide the dismissal is declared legal but because long years of service and
parties stipulate in party's positions and issues between them. other considerations, assistance is rewarded.
advance to this effect. arguments. 6. Imposition of legal interest on separation pay, back wages and other
His opinion is based on Voluntary arbitrator is monetary awards.
the facts and the law Thus, mediation may be not an employee,
involved in the classified into two, functionary or part of XV. JURISDICTION OF LABOR ARBITER
controversy before him. namely:(1) Facilitative the government or
Mediation where the DOLE, but he is
1. Art. 224 (217) Labor Code;
Mediator does not make authorized to render
or offer any opinion; or arbitration services a. Unfair Labor Practice cases
(2)Evaluative provided under labor b. Termination disputes (Illegal dismissal cases)
Mediation where the laws. c. Money claims exceeding P5,000;

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d. Claims for moral, exemplary, and other forms of damages
arising from ER-EE relationship ;
e. Cases involving the legality of strikes and lockouts.
2. Art 124 (b) Labor Code, as amended by RA 6727
a. Legislated wage increases and wage distortion in unorganized
establishments not voluntarily settled by the parties;
b. Legislated wage increases and wage distortion in organized
establishments lie with the Voluntary Arbitrators.
3. Art 128 (b) Labor Code, as amended by RA 7730;
4. Art. 233 (227) Labor Code
Enforcement of compromise agreements when there is non-
compliance by any of the parties
5. Art 275 (262-A), Labor Code
Issuance of Writ of Execution to enforce the decisions of the
Voluntary Arbitrators or panel of Voluntary Arbitrators (in case of
their absence or incapacity)
6. Sec 10 RA 8042, as amended by RA 10022
Money claims of OFWs arising out of ER-EE relationship or by
virtue of any law or contract including:
Death and disability benefits
Actual, moral, exemplary, and other forms of damages
7. Other cases as may be provided by law
a. Employees in government owned and/or controlled
corporations without original charters;
b. Domestic workers or kasambahays, if the amount of claim
exceeds P5,000;
c. Employees of cooperatives;
d. Counter-claims of employers against employees.
Page |6
XVI. PRINCIPAL TEST OF PROJECT EMPLOYEES
LITMUS TEST: In determining whether the employee is regular or
project, whether particular employees are properly characterized as
project employees as distinguished from regular employees is
whether or not the project employees were assigned to carry out a
specific project or undertaking, the duration (and scope) of which were
specified at the time the employees were engaged for that project.
XVII. REQUISITE FOR REDUCTION OF APPEAL BOND
1. It should be filed within the reglementary period;
2. It should be based on meritorious grounds; and
3. A reason amount of bond in relation to the monetary award
should be posted together with said motion.
4. Proof of service.
***HOWEVER, to require the full amount of the bond within the 10-day
reglementary period would only render nugatory the legal provisions
which allow an appellant to seek a reduction of the bond. Thus, the Court
explained in Garcia: The filing of a motion to reduce bond and compliance
with the two conditions (namely: a meritorious ground, and posting of a
bond in a reasonable amount) stop the running of the period to perfect an
appeal [Garcia vs. KJ Commercial | G.R. No. 196830. 29 February, 2012].
***The exercise of the authority to reduce bond is not a matter of right on
the part of the movant but lies within the sound discretion of the NLRC
upon showing of meritorious grounds [Ong vs. Court of Appeals, et al. | GR
No. 152494. 22 February, 2004].
MERITORIOUS GROUNDS FOR REDUCTION APPEAL BOND
[Andrew James McBurnie vs. Eulalio Ganzon, et. al. | G.R. Nos. 178034 &
178117; G.R. Nos. 186984-85. 17 October 2013]
The NLRCs Revised Rules of Procedure allows the NLRC to reduce the
amount of the bond, the exercise of the authority is not a matter of right
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on the part of the movant, but lies within the sound discretion of the NLRC
upon a showing of meritorious grounds.
It provides that the merit referred to may pertain to:
1. Appellants lack of financial capability to pay the full amount of the
bond;
2. The merits of the main appeal such as when there is a valid claim
that there was no illegal dismissal to justify the award;
3. The absence of an employer-employee relationship;
4. Prescription of claims; and
5. Other similarly valid issues that are raised in the appeal.
***For the purpose of determining a meritorious ground, the NLRC is not
precluded from receiving evidence, or from making a preliminary
determination of the merits of the appellants contentions.
DOCTRINE OF McBURNIE
The filing of the bond is not only mandatory but a jurisdictional
requirement as well, that must be complied with in order to confer
jurisdiction upon the NLRC. Non-compliance therewith renders the
decision of the Labor Arbiter final and executory. This requirement is
intended to assure the workers that if they prevail in the case, they will
receive the money judgment in their favor upon the dismissal of the
employers appeal. It is intended to discourage employers from using an
appeal to delay or evade their obligation to satisfy their employees just
and lawful claims.
Thus, it behooves the Court to give utmost regard to the legislative and
administrative intent to strictly require the employer to post a cash or
surety bond securing the full amount of the monetary award within the
10[-]day reglementary period. Nothing in the Labor Code or the NLRC
Rules of Procedure authorizes the posting of a bond that is less than the
Page |7
monetary award in the judgment, or would deem such insufficient posting
as sufficient to perfect the appeal.
While the bond may be reduced upon motion by the employer, this is
subject to the conditions that (1) the motion to reduce the bond shall be
based on meritorious grounds; and (2) a reasonable amount in relation to
the monetary award is posted by the appellant, otherwise the filing of the
motion to reduce bond shall not stop the running of the period to perfect
an appeal. The qualification effectively requires that unless the NLRC
grants the reduction of the cash bond within the 10-day reglementary
period, the employer is still expected to post the cash or surety bond
securing the full amount within the said 10-day period. If the NLRC does
eventually grant the motion for reduction after the reglementary period
has elapsed, the correct relief would be to reduce the cash or surety bond
already posted by the employer within the 10-day period.
XVIII. CONTROL TEST
Test: Whether the employer controls or has reserved the right to control
the employee, not only as to the work done, but also as to the means and
methods by which the same is accomplished.
XIX. REGULAR EMPLOYMENT
a. By NATURE of work when the employee has been engaged to
perform activities which are usually necessary or desirable in the
usual business of trade of the employer.
b. As to PERIOD of service
1. The employment has been fixed for a specific project or
undertaking the completion or termination of which has
been determined at the time of engagement of the
employee.
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2. The work or service to be performed is seasonal in nature
and the employment is for the duration of the season.
3. The employee has rendered at least one year of service,
whether such is continuous or broken, with respect to the
activity in which he is employed and his employment shall
continue while such activity exists.
4. The employee is allowed to work after a probationary
period.
***Reasonable Connection Rule: The primary standard to determine a
regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual business or
trade of the employer. The test is whether the former is usually necessary
or desirable in the usual business or trade of the employer. (De Leon vs.
NLRC, G.R. No. 70705, August 21, 1989)
XX. ABANDONMENT VS. CONSTRUCTIVE DISMISSAL
Abandonment of Employment A form of neglect of duty.
Requisites:
1. The employee must have failed to report for work or must have
been absent without valid or justifiable reason; and
2. There must have been a clear intention on the part of the
employee to server the employer-employee relationship
manifested by some overt act.
[Unicorn Safety Glass Inc. et al. vs. Rodrigo Basarte. et al. | G.R. No.
154689. 25 November, 2004]
Exception: Immediate filing of a complaint for illegal dismissal against
the employer with a prayer for reinstatement negates abandonment.
Tardiness and absenteeism, like abandonment, are form of neglect
of duty.
Page |8
Attitude Problem: Ground for Termination: An employee who
cannot get along with his co-employees is detrimental to the
company, for he can upset and strain the working environment.
CONSTRUCTIVE DISMISSAL - an involuntary resignation resorted to
when continued employment is rendered impossible, unreasonable, or
unlikely; when there is demotion in rank and/or diminution in pay; or
when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to the employee that it could foreclose any choice by
him except to forego his continued employment [Unicorn Safely Glass, Inc.
vs. Basarte | G.R. No. 154689. 25 November, 2004].
Further, it is an act amounting to dismissal but made to appear as if it
were not. In fact, the employee who is constructively dismissed may be
allowed to keep on coming to work; a dismissal in disguise [Uniwide Sales
Warehouse Club vs. NLRC | G.R. No. 154503. 29 February, 2008].
Test of Constructive Dismissal: Whether a reasonable person in the
employees position would have felt compelled to give up his position
under the circumstances [Uniwide Sales Warehouse Club vs. NLRC, supra].
XXI. DISEASE AS AN AUTHORIZED CAUSE FOR TERMINATION OF
EMPLOYEMENT [Art. 299, Labor Code]
An employer may terminate the services of an employee who has been
found to be suffering from any disease and whose continued employment
is prohibited by law or is prejudicial to his health, as well as to the health
of his co-employees. In occupational disease there should be a
certification by a competent health authority that the disease is of such a
nature or stage that it cannot be cured within six months with proper
medical treatment [Cebu Royal Plant vs. Deputy Minister | 153 SCRA 38].
The employee, in this case, will be paid separation pay equivalent to at
least one months pay or to one-half months pay for every year of service,
whichever is greater a fraction of at least six months is considered as one
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whole year. A dismissal based only on the recommendation of company
doctors and without proof that the sickness cannot be cured within a
period of six treatments is illegal.
Fuji Doctrine: The employee should be given the chance to present
countervailing medical certificates.
Deoferio Doctrine: The termination of an employee based on disease
must comply with: (1) substantive requisites and (2) procedural
requisites.
Substantive Requisites:
1. Employee is suffering from a disease;
2. His continued employment is either:
a. prohibited by law;
b. prejudicial to his health; or
c. prejudicial to the health of his co-employees
3. Certification by a competent public health authority that the
disease is incurable within six (6) months even with proper
medical treatment.
Procedural Requisites:
1. Notice of termination; and
4. Separation pay of least one-month salary or month salary for
every year of service, whichever is greater, a fraction of at least 6
months shall be considered on (1) whole year.
[Deoferio vs. Intel Technology Philippines, Inc. | G.R. No. 202996. 18 June,
2014)].
Page |9
CONSTITUTIONAL PROVISIONS
Article II
Declaration of Principles and State Policies
State Policies
Section 10. The State shall promote social justice in all phases of national
development.
Section 18. The State affirms labor as a primary social economic force. It
shall protect the rights of workers and promote their welfare.
Article III
Bill of Rights
Section 8. The right of people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
Article XIII
Social Justice and Human Rights
Labor
Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including
the rights to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They
shall also participate in policy and decision-making processes affecting
their rights and benefits as may be provided by law.
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The State shall promote the principle of shared responsibility between
workers and employers and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relation between workers and employers,
recognizing the right of labor to its just share in the fruits of production
and the right of enterprises to reasonable returns to investments, and to
expansion and growth.
Women
Section 14. The State shall protect working women by providing safe and
healthful working conditions, taking into account their maternal
functions, and such facilities and opportunities that will enhance their
welfare and enable them to realize their full potential in the service of the
nation.
CIVIL CODE PROVISIONS
Chapter 3
WORK AND LABOR
Section 2
Contract of Labor
Art. 1700. The relation between capital and labor are not merely
contractual. They are so impressed with public interest that labor
contracts must yield to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions,
hours of labor and similar subjects.
Art. 1702. In case of doubt, all labor legislation and all labor contracts
shall be construed in favor of the safety and decent living for the laborer.
LABOR CODE PROVISIONS
P a g e | 10
BOOK SIX
POST EMPLOYMENT
TITLE I
TERMINATION OF EMPLOYMENT
Art. 282. Termination by employer. An employer may terminate
an employment for any of the following causes:
a. Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in
connection with his work;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or willful breach by the employee of the trust reposed
in him by his employer or duly authorized representative;
d. Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his
family or his duly authorized representatives; and
e. Other causes analogous to the foregoing.
Art. 283. Closure of establishment and reduction of personnel.
The employer may also terminate the employment of any employee
due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is
for the purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Ministry of Labor
and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving
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devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month
pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and
in cases of closures or cessation of operations of establishment or
undertaking not due to serious business losses or financial reverses,
the separation pay shall be equivalent to one (1) month pay or at
least one-half (1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be considered
one (1) whole year.
Art. 284. Disease as ground for termination. An employer may
terminate the services of an employee who has been found to be
suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay
equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole
year.
BOOK FIVE
LABOR RELATIONS
Title II
NATIONAL LABOR RELATIONS COMMISSION
Chapter II
POWERS AND DUTIES
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor Arbiters
shall have original and exclusive jurisdiction to hear and decide,
within thirty (30) calendar days after the submission of the case
P a g e | 11
by the parties for decision without extension, even in the absence
of stenographic notes, the following cases involving all workers,
whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases
that workers may file involving wages, rates of pay, hours
of work and other terms and conditions of employment;
4. Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code,
including questions involving the legality of strikes and
lockouts;
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other claims
arising from employer-employee relations, including
those of persons in domestic or household service,
involving an amount exceeding five thousand pesos
(P5,000.00) regardless of whether accompanied with a
claim for reinstatement;
7. Wage distortion disputes in unorganized establishment
not voluntarily settled by the parties pursuant to Republic
Act No. 6727;
8. Enforcement of compromise agreements when there is
non-compliance by any of the parties pursuant to Art. 227
of the Labor Code, as amended;
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9. Money claims arising out of employer-employee
relationship or by virtue of any law or contract, involving
Filipino workers for overseas deployment, including
claims for actual, moral, exemplary and other forms of
damages as provided by Sec. 10 of Republic Act No. 8042,
as amended by Republic Act No. 10022; and
10. Other cases as may be provided by law.
b. The Commission shall have exclusive appellate jurisdiction over
all cases decided by Labor Arbiters.
c. Cases arising from the interpretation or implementation of
collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
shall be disposed of by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be
provided in said agreements. (As amended by Section 9, Republic
Act No. 6715, March 21, 1989)
SOCIAL JUSTICE
Social justice is neither communism, nor despotism, nor atomism,
nor anarchy, but the humanization of laws and the equalization of
social and economic forces by the State so that justice in its
rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare
of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent
elements of society, through the maintenance of a proper
economic and social equilibrium in the interrelations of the
members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all
P a g e | 12
governments on the time-honored principles of salus populi
estsuprema lex.
CASES
CALALANG vs. WILLIAMS
[70 Phil 728]
FACTS: The National Traffic Commission, in its resolution of July 17, 1940,
resolved to recommend to the Director of the Public Works and to the
Secretary of Public Works and Communications that animal-drawn
vehicles be prohibited from passing along the following for a period of one
year from the date of the opening of the Colgante Bridge to traffic:
1. Rosario Street extending from Plaza Calderon de la Barca to
Dasmarias Street from 7:30Am to 12:30 pm and from 1:30 pm
to 530 pm; and
2. Along Rizal Avenue extending from the railroad crossing at
Antipolo Street to Echague Street from 7 am to 11pm.
The Chairman of the National Traffic Commission on July 18, 1940
recommended to the Director of Public Works with the approval of the
Secretary of Public Works the adoption of the measure proposed in the
resolution aforementioned in pursuance of the provisions of the
Commonwealth Act No. 548 which authorizes said Director with the
approval from the Secretary of the Public Works and Communication to
promulgate rules and regulations to regulate and control the use of and
traffic on national roads. On August 2, 1940, the Director recommended
to the Secretary the approval of the recommendations made by the
Chairman of the National Traffic Commission with modifications. The
Secretary of Public Works approved the recommendations on August 10,
1940. The Mayor of Manila and the Acting Chief of Police of Manila have
enforced and caused to be enforced the rules and regulation. As a
consequence, all animal-drawn vehicles are not allowed to pass and pick
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up passengers in the places above mentioned to the detriment not only of
their owners but of the riding public as well.
ISSUES:
1. WON the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act NO. 548
constitute an unlawful inference with legitimate business or trade
and abridged the right to personal liberty and freedom of
locomotion.
2. The rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to
insure the well-being and economic security of all the people.
RULING:
1. NO. The promulgation of the Act aims to promote safe transit upon
and avoid obstructions on national roads in the interest and
convenience of the public. In enacting said law, the National
Assembly was prompted by considerations of public convenience
and welfare. It was inspired by the desire to relieve congestion of
traffic, which is a menace to the public safety. Public welfare lies
at the bottom of the promulgation of the said law and the State in
order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations.
Persons and property may be subject to all kinds of restraints and
burdens in order to secure the general comfort, health, and
prosperity of the State. To this fundamental aims of the
government, the rights of the individual are subordinated. Liberty
is a blessing which should not be made to prevail over authority
because society will fall into anarchy. Neither should authority be
made to prevail over liberty because then the individual will fall
into slavery. The paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its
preservation.
P a g e | 13
2. No. Social justice is neither communism, nor despotism, nor
atomism, nor anarchy, but the humanization of laws and the
equalization of social and economic forces by the State so that
justice in its rational and objectively secular conception may at
least be approximated. Social justice means the promotion of the
welfare of all the people, the adoption by the Government of
measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a
proper economic and social equilibrium in the interrelations of
the members of the community, constitutionally, through the
adoption of measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the existence of all
governments on the time-honored principles of salus populi est
suprema lex.
Social justice must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a
combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting health,
comfort and quiet of all persons, and of bringing about the greatest good
to the greatest number.
PASEI vs. DRILON
[G.R. No. 81958. 30 June 1988]
FACTS: Petitioner, Philippine Association of Service Exporters, Inc., is
engaged principally in the recruitment of Filipino workers, male and
female of overseas employment. It challenges the constitutional validity
of the 1998 Dept. Order No. 1 of DOLE entitled Guidelines Governing the
Temporary Suspension of Deployment of Filipino Domestic and Household
Workers.
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Contention of petitioner PASEI: Such order is a discrimination against
males and females. The Order does not apply to all Filipino workers but
only to domestic helpers and females with similar skills, and that it is in
violation of the right to travel, it also being an invalid exercise of the
lawmaking power. Further, Sec. 3, Art. 13 of the Constitution, provides for
the workers participation in policy and decision-making processes
affecting their rights and benefits as may be provided by law.
Thereafter the Solicitor General on behalf of DOLE submitting to the
validity of the challenged guidelines involving the police power of the
State and informed the court that the respondent have lifted the
deployment ban in some states where there exists bilateral agreement
with the Philippines and existing mechanism providing for sufficient
safeguards to ensure the welfare and protection of the Filipino workers.
ISSUE: WON the challenged Department Order No. 1 is discriminatory.
RULING: NO. SC in dismissing the petition ruled that there has been valid
classification, the Filipino female domestics working abroad were in a
class by themselves, because of the special risk to which their class was
exposed. There is no question that Order No.1 applies only to female
contract workers but it does not thereby make an undue discrimination
between sexes. It is well settled that equality before the law under the
constitution does not import a perfect identity of rights among all men
and women. It admits of classification, provided that:
1. Such classification rests on substantial distinctions;
2. That they are germane to the purpose of the law;
3. They are not confined to existing conditions; and
4. They apply equally to all members of the same class.
In the case at bar, the classifications made, rest on substantial distinctions.
Anent the issue of the impairment of the right to travel: Dept. Order
No. 1 does not the aforesaid right. The consequence of the deployment ban
has on the right to travel does not impair the right, as the right to travel is
P a g e | 14
subjects among other things, to the requirements of public safety as may
be provided by law. Deployment ban of female domestic helper is a valid
exercise of police power. Police power has been defined as the state
authority to enact legislation that may interfere with personal liberty or
property in order to promote general welfare. Neither is there merit in the
contention that Department Order No. 1 constitutes an invalid exercise of
legislative power as the labor code vest the DOLE with rule making
powers.
ALCANTARA & SONS vs. CA
[G.R. No. 155109. 29 September 2010]
FACTS: These cases were consolidated based on the following facts: The
negotiation between C. Alcantara and Sons, Inc. (CASE, for brevity) and
the Union on the economic provisions of the CBA ended in a deadlock
prompting the Union to stage a strike, but the strike was later declared by
the LA to be illegal in violation of the CBAs no strike-no lockout provision.
Consequently, the Union officers were deemed to have forfeited their
employment with the company and made them liable for actual damages
plus interest and attorneys fees, while the Union members were ordered
to be reinstated without back wages there being no proof that they
actually committed illegal acts during the strike.
Notwithstanding the provision of the Labor Code mandating that the
reinstatement aspect of the decision be immediately executory, the LA
refused to reinstate the dismissed Union members. In 1999, NLRC
affirmed the LA decision insofar as it declared the strike illegal and
ordered the Union officers dismissed from employment and liable for
damages but modified the same by considering the Union members to
have been validly dismissed from employment for committing prohibited
and illegal acts. On petition for certiorari, the CA annulled the NLRC
decision and reinstated that of the LA. Aggrieved, CASI, the Union and the
Union officers and members elevated the matter to the Court.
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During the pendency of the cases, the affected Union members (who were
ordered reinstated) filed with the LA a motion for reinstatement pending
appeal and the computation of their back wages. But the LA awarded
separation pay and other benefits. On appeal, the NLRC denied the Union
members claim for separation pay, accrued wages and other benefits.
When elevated to the CA, the appellate court held that reinstatement
pending appeal applies only to illegal dismissal cases under Art. 223 of the
Labor Code and not to cases under Art. 263. Hence, the petition by the
Union and its officers and members in G.R. No. 179220.
The Court agreed with the CA on the illegality of the strike as well as the
termination of the Union officers, but disagreed with the CA insofar as it
affirmed the reinstatement of the Union members. The Court, instead,
sustained the dismissal not only of the Union officers but also the Union
members who, during the illegal strike, committed prohibited acts by
threatening, coercing, and intimidating non-striking employees, officers,
suppliers and customers; obstructing the free ingress to and egress from
the company premises; and resisting and defying the implementation of
the writ of preliminary injunction issued against the strikers.
The Court further held that the terminated Union members, who were
ordered reinstated by the LA, should have been immediately reinstated
due to the immediate executory nature of the reinstatement aspect of the
LA decision. In view, however, of CASIs failure to reinstate the dismissed
employees, the Court ordered CASI to pay the terminated Union members
their accrued back wages from the date of the LA decision until the
eventual reversal by the NLRC of the order of reinstatement. In addition
to the accrued back wages, the Court awarded separation pay as a form of
financial assistance to the Union members equivalent to one-half month
salary for every year of service to the company up to the date of their
termination. Hence, this motion for partial reconsideration by the
petitioner.
ISSUE: WONthe petitioner is liable to pay the accrued wages of the
dismissed employees.
P a g e | 15
RULING: The motion for partial reconsideration is partly granted.
Art. 264 (a), Labor Code, provides for the liabilities of the Union officers
and members participating in illegal strikes and/or committing illegal
acts. Thus, the said provision sanctions the dismissal of a Union officer
who knowingly participates in an illegal strike or who knowingly
participates in the commission of illegal acts during a lawful strike. In this
case, the Union officers were in clear breach of the above provision of law
when they knowingly participated in the illegal strike.
As to the Union members, the same provision of law provides that a
member is liable when he knowingly participates in the commission of
illegal acts during a strike. We find no reason to reverse the conclusion of
the Court that CASI presented substantial evidence to show that the
striking Union members committed the following prohibited acts: (a) they
threatened, coerced, and intimidated non-striking employees, officers,
suppliers and customers;(b) they obstructed the free ingress to and
egress from the company premises; and (c) they resisted and defied the
implementation of the writ of preliminary injunction issued against the
strikers.
The commission of the above prohibited acts by the striking Union
members warrants their dismissal from employment.
Records show that the LA found the strike illegal and sustained the
dismissal of the Union officers, but ordered the reinstatement of the
striking Union members for lack of evidence showing that they committed
illegal acts during the illegal strike. This decision, however, was later
reversed by the NLRC. Pursuant to Art. 223of the Labor Code and well-
established jurisprudence, the decision of the LA reinstating a dismissed
or separated employee, insofar as the reinstatement aspect is concerned,
shall immediately be executory, pending appeal. The employee shall
either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation, or, at the option of the
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employee, merely reinstated in the payroll. It is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee
during the period of appeal until reversal by the higher court. If the
employer fails to exercise the option of re-admitting the employee to work
or to reinstate him in the payroll, the employer must pay the employees
salaries during the period between the LAs order of reinstatement
pending appeal and the resolution of the higher court overturning that of
the LA.
In this case, CASI is liable to pay the striking Union members their accrued
wages for four months and nine days, which is the period from the notice
of the LAs order of reinstatement until the reversal thereof by the NLRC.
Separation pay may be given as a form of financial assistance when a
worker is dismissed in cases such as the installation of labor-saving
devices, redundancy, retrenchment to prevent losses, closing or cessation
of operation of the establishment, or in case the employee was found to
have been suffering from a disease such that his continued employment is
prohibited by law. It is a statutory right defined as the amount that an
employee receives at the time of his severance from the service and is
designed to provide the employee with the wherewithal during the period
that he is looking for another employment. It is oriented towards the
immediate future, the transitional period the dismissed employee must
undergo before locating a replacement job. As a general rule, when just
causes for terminating the services of an employee exist, the employee is not
entitled to separation pay because lawbreakers should not benefit from
their illegal acts. The rule, however, is subject to exceptions.
In the case at bar, not only did the Court declare the strike illegal, it also
found the Union officers to have knowingly participated in the illegal
strike. Worse, the Union members committed prohibited acts during the
strike. Thus, the awards of separation pay as a form of financial assistance
is deleted.
P a g e | 16
ST. MARYS ACADEMY OF DIPOLOG vs. PALACIO, ET AL.
[G.R. No. 164913. 30 June 1989]
FACTS: In the 1990s, petitioner hired respondents Calibod, Laquio,
Santander, Saile Padilla, Andalahao, Decipulo and Montederamos, as
teachers, and respondent Palacio as guidance counselor. In accordance to
DECS Memorandum No. 10, S. 1998 pursuant to RA 7836, petitioner
informed the respondents that they cannot be re-accepted for the school
year 2000-2001 for not having passed the LET (Licensure Examinations
for Teachers), nor can they continue with their teaching profession.
Contention of the respondents: Termination as highly irregular and
premature. Their right to security of tenure despite the requirements set
by the PRC for they had special permits to teach and the civil service
eligibility required under the law. In addition to this, the deadline for
teachers to register under the Memorandum was set to 19 September
2000, but the petitioner decided to terminate them as early as 31 March
2000. Lastly, the acceptance of the Petitioner of other teacher who do not
also possess the required eligibility under the Memorandum showed
evident bad faith.
ISSUES:
1. WON the dismissal of the respondents were premature because it
was effected prior to the deadline set by the PRC to acquire their
license.
2. WON the respondents are entitled to backwages from March to
19 September 2000, because it is only on such date that they were
already dismissible for cause.
RULING:
1. YES. SC agrees with the decisions of the LA, the NLRC and the CA.
It is incumbent upon the Court to afford full protection to labor.
The law has provided a specific timeframe within which
respondents could comply, petitioner has no right to deny them of
this privilege accorded to them by law. In so far as Palacio,
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Calibod, Laquio, Santander and Montedramos are concerned,
being dismissed on March 2000 was premature. However, Saile is
not qualified to take the LET, therefore, no prematurity is to speak
of on her end. Petitioners intention and desire not to put the
students education and school operation in jeopardy is neither a
decisive consideration for respondents termination prior to the
deadline set by law. The prejudice that respondents retention
would cause to the schools operation is only trivial.
2. YES. The respondents are entitled to limited backwages computed
from 31 March 2000 to September 2000 in favor of Palacio,
Calibod, Laquio, Santander and Montederamos. The Petitioner
cannot possibly presume that respondents could not timely
comply with the requirements set by law.
MATERNITY CHILDRENS HOSPITAL vs. SECRETARY OF LABOR
[G.R. No. 78909. 30 June 1989]
FACTS: Petitioner is a semi-government hospital, managed by the Board
of Directors of the Cagayan de Oro Women's Club and Puericulture Center,
headed by Mrs. Antera Dorado, as holdover President. The hospital
derives its finances from the club itself as well as from paying patients,
averaging 130 per month. It is also partly subsidized by the Philippine
Charity Sweepstakes Office and the Cagayan De Oro City government.
Petitioner has forty-one (41) employees. Aside from salary and living
allowances, the employees are given food, but the amount spent therefore,
is deducted from their respective salaries.
On May 23, 1986, ten (10) employees of the petitioner employed in
different capacities/positions filed a complaint with the Office of the
Regional Director of Labor and Employment, Region X, for underpayment
of their salaries and ECOLAS.
P a g e | 17
The Regional Director issued and order based on the reports of the Labor
Standard and Welfare Officers, directing payment of P723, 888.58
representing underpayment of wages and ECOLAs to all the petitioners
employees. Petitioner appealed to the Minister of Labor and Employment
which modified the decision as to the period for the payment ECOLAs
only. A motion for reconsideration was filed by petitioner and was denied
by the Secretary of Labor.
ISSUE: WON the salaries of the petitioner including the ECOLAS are
included on the labor standards prescribed by law.
RULING: Labor standards refer to the minimum requirements prescribed
by existing laws, rules, and regulations relating to wages, hours of work,
cost of living allowance and other monetary and welfare benefits,
including occupational, safety, and health standards (Section 7, Rule I,
Rules on the Disposition of Labor Standards Cases in the Regional Office,
dated September 16, 1987).
PHILIPPINE AIRLINES, INC vs. SANTOS, JR., ET AL.
[G.R. No. 77875. 4 February 1993]
FACTS: Individual respondents are all Port Stewards of Catering Sub-
Department, Passenger Services Department of petitioner. On various
occasions, several deductions were made from their salary. The
deductions represented losses of inventoried items charged to them for
mishandling of company properties which respondents resented such
that on August 21, 1984, individual respondents, represented by the
union, made a formal notice regarding the deductions to petitioner.
As there was no action taken on said representation, private respondents
filed a formal grievance on November 4, 1984 pursuant to the grievance
machinery Step 1 of the Collective Bargaining Agreement between
petitioner and the union. The topics which the union wanted to be
discussed in the said grievance were the illegal/questionable salary
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 P a g e | 18

deductions and inventory of bonded goods and merchandise being done Sec. 2 Processing of Grievances
by catering service personnel which they believed should not be their
STEP 1 Any employee who believes that he has a justifiable grievance
duty. The said grievance was submitted on November 21, 1984 to the
shall take the matter up with his shop steward. If the shop steward feels
office of Mr. Reynaldo Abad, Manager for Catering, who at the time was on
there is justification for taking the matter up with the Company, he shall
vacation leave. Inasmuch as no reply was made to their grievance which
record the grievance on the grievance form heretofore agreed upon by the
"was duly received by your secretary" and considering that petitioner had
parties. Two (2) copies of the grievance form properly filled, accepted, and
only five days to resolve the grievance as provided for in the CBA, said
signed shall then be presented to and discussed by the shop steward with
grievance as believed by them (private respondents) was deemed
the division head. The division head shall answer the grievance within five
resolved in their favor. Upon Mr. Abad's return, the individual
(5) days from the date of presentation by inserting his decision on the
respondents refused to conduct inventory works. Alberto Santos, Jr. did
grievance form, signing and dating same, and returning one copy to the
not conduct ramp inventory on December 7, 10 and 12 while Gilbert
shop steward. If the division head fails to act within the five (5)-day
Antonio did not conduct ramp inventory on December 10. In like manner,
regl(e)mentary period, the grievance must be resolved in favor of the
Regino Duran and Houdiel Magadia did not conduct the same on
aggrieved party. If the division head's decision is not appealed to Step II,
December 10 and 12. At the grievance meeting which was attended by
the grievance shall be considered settled on the basis of the decision
some union representatives, Mr. Abad resolved the grievance by denying
made, and shall not be eligible for further appeal.
the petition of individual respondents and adopted the position that
inventory of bonded goods is part of their duty as catering service It is a fact that the sympathy of the Court is on the side of the laboring
personnel, and as for the salary deductions for losses. classes, not only because the Constitution imposes such sympathy, but
because of the one-sided relation between labor and capital. The
As there was no ramp inventory conducted on the mentioned dates, Mr.
constitutional mandate for the promotion of labor is as explicit as it is
Abad, on January 3, 1985 wrote by an inter-office memorandum
demanding. The purpose is to place the workingman on an equal plane
addressed to the grievant, individual respondents herein, for them to
with management with all its power and influence in negotiating for
explain on why no disciplinary action should be taken against them for
the advancement of his interests and the defense of his rights. Under the
not conducting ramp inventory. Thus, a penalty of suspension ranging
policy of social justice, the law bends over backward to accommodate the
from 7 days to 30 days were imposed depending on the number of
interests of the working class on the humane justification that those with
infractions committed.
less privileges in life should have more privileges in law.
ISSUE: WON the suspension is valid.
It is clear that the grievance was filed with Mr. Abad's secretary during his
RULING: The instant case hinges on the interpretation of Section 2, Article absence. Under Section 2 of the CBA aforequoted, the division head shall
IV of the PAL-PALEA Collective Bargaining Agreement, (hereinafter, CBA), act on the grievance within five (5) days from the date of presentation
to wit: thereof, otherwise "the grievance must be resolved in favor of the
aggrieved party." It is not disputed that the grievant knew that division
head Reynaldo Abad was then "on leave" when they filed their grievance

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which was received by Abad's secretary. This knowledge, however,
should not prevent the application of the CBA.
Contrary to petitioner's submission, the grievance of employees is not a
matter which requires the personal act of Mr. Abad and thus could not be
delegated. Petitioner could at least have assigned an officer-in-charge to
look into the grievance and possibly make his recommendation to Mr.
Abad. It is of no moment that Mr. Abad immediately looked into the
grievance upon returning to work, for it must be remembered that the
grievants are workingmen who suffered salary deductions and who rely
so much on their meager income for their daily subsistence and survival.
Besides, it is noteworthy that when these employees first presented their
complaint on August 21, 1984, petitioner failed to act on it. It was only
after a formal grievance was filed and after Mr. Abad returned to work on
December 7, 1984 that petitioner decided to turn an ear to their plaints.
As respondent NLRC has pointed out, Abad's failure to act on the matter
may have been due to petitioner's inadvertence, but it is clearly too much
of an injustice if the employees be made to bear the dire effects thereof.
Much as the latter were willing to discuss their grievance with their
employer, the latter closed the door to this possibility by not assigning
someone else to look into the matter during Abad's absence. Thus, private
respondents should not be faulted for believing that the effects of the CBA
in their favor had already stepped into the controversy.
If the Court were to follow petitioner's line of reasoning, it would be easy
for management to delay the resolution of labor problems, the complaints
of the workers in particular, and hide under the cloak of its officers being
"on leave" to avoid being caught by the 5-day deadline under the CBA. If
this should be allowed, the workingmen will suffer great injustice for they
will necessarily be at the mercy of their employer. That could not have
been the intendment of the pertinent provision of the CBA, much less the
benevolent policy underlying our labor laws.
Accordingly, on the foregoing premises, the instant petition is hereby
DENIED.
P a g e | 19
ANTONIO M. SERRANO vs. GALLANT MARITIME SERVICES, ET AL.
[G.R. No. 167614. 24 March 2009]
FACTS: Petitioner was hired by Gallant Maritime Services, Inc. and
Marlow Navigation Co., Ltd. under a Philippine Overseas Employment
Administration (POEA) approved Contract of Employment with the
following terms and conditions:
Duration of contract 12 months;
Position Chief Officer;
Basic monthly salary US$1,400.00;
Hours of work 48.0 hours per week;
Overtime US$700.00 per month; and
Vacation leave with pay 7.00 days per month.
On March 19, 1998, the date of his departure, petitioner was constrained
to accept a downgraded employment contract for the position of Second
Officer with a monthly salary of US$1,000.00, upon the assurance and
representation of respondents that he would be made Chief Officer by the
end of April 1998. Respondents did not deliver on their promise to make
petitioner Chief Officer. Hence, petitioner refused to stay on as Second
Officer and was repatriated to the Philippines on May 26, 1998.
Petitioners employment contract was for a period of 12 months or from
March 19, 1998 up to March 19, 1999, but at the time of his repatriation
on May 26, 1998, he had served only two (2) months and seven (7) days
of his contract, leaving an unexpired portion of nine (9) months and
twenty-three (23) days.
Petitioner filed with the Labor Arbiter (LA) a Complaint against
respondents for constructive dismissal and for payment of his money
claims in the total amount of US$26,442.73.
ISSUE: WON the subject clause violate Sec. 1, Art. III of the Constitution,
and Sec. 18, Art. II and Sec. 3, Art. XIII on Labor as protected sector.
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RULING: The unanimous finding of the LA, NLRC and CA that the dismissal Upon cursory reading, the subject clause appears facially neutral, for it
of petitioner was illegal is not disputed. Likewise not disputed is the salary applies to all OFWs. However, a closer examination reveals that the
differential of US$45.00 awarded to petitioner in all three fora. Applying subject clause has a discriminatory intent against, and an invidious impact
the subject clause, the NLRC and the CA computed the lump-sum salary of on OFWs
petitioner at the monthly rate of US$1,400.00 covering the period of three
The subject clause does not state or imply any definitive governmental
months out of the unexpired portion of nine months and 23 days of his
purpose; and it is for that precise reason that the clause violates not just
employment contract or a total of US$4,200.00. Impugning the
petitioners right to equal protection, but also her right to substantive due
constitutionality of the subject clause, petitioner contends that, in
process under Section 1, Article III of the Constitution.
addition to the US$4,200.00 awarded by the NLRC and the CA, he is
entitled to US$21,182.23 more or a total of US$25,382.23, equivalent to Petitioner contends that his overtime and leave pay should form part of
his salaries for the entire nine months and 23 days left of his employment the salary basis in the computation of his monetary award, because these
contract, computed at the monthly rate of US$2,590.00. The answer is in are fixed benefits that have been stipulated into his contract. Petitioner is
the affirmative. mistaken.
Section 1, Article III of the Constitution guarantees: No person shall Lastly, the word salaries in Section 10(5) does not include overtime and
be deprived of life, liberty, or property without due process of law nor leave pay. For seafarers like petitioner, DOLE Department Order No. 33,
shall any person be denied the equal protection of the law. series 1996, provides a Standard Employment Contract of Seafarers, in
which salary is understood as the basic wage, exclusive of overtime, leave
Section 18, Article II and Section 3, Article XIII accord all members of
pay and other bonuses; whereas overtime pay is compensation for all
the labor sector, without distinction as to place of deployment, full
work performed in excess of the regular eight hours, and holiday pay is
protection of their rights and welfare.
compensation for any work performed on designated rest days and
To Filipino workers, the rights guaranteed under the foregoing holidays.
constitutional provisions translate to economic security and parity: all
In the same vein, the claim for the days leave pay for the unexpired
monetary benefits should be equally enjoyed by workers of similar
portion of the contract is unwarranted since the same is given during the
category, while all monetary obligations should be borne by them in equal
actual service of the seamen.
degree; none should be denied the protection of the laws which is enjoyed
by, or spared the burden imposed on, others in like circumstances.
Imbued with the same sense of obligation to afford protection to labor,
the Court in the present case also employs the standard of strict judicial
scrutiny, for it perceives in the subject clause a suspect classification
prejudicial to OFWs.

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ANG TIBAY vs. CIR
[69 Phil 635]
FACTS: Teodoro Toribio owns and operates Ang Tibay, a leather company
which supplies the Philippine Army. Due to alleged shortage of leather,
Toribio caused the layoff of a number of his employees. However, the
National Labor Union, Inc. (NLU) questioned the validity of said lay off as
it averred that the said employees laid off were members of NLU while no
members of the rival labor union (National Workers Brotherhood) were
laid off. NLU claims that NWB is a company dominated union and Toribio
was merely busting NLU.
The case reached the Court of Industrial Relations (CIR) where Toribio
and NWB won. Eventually, NLU went to the Supreme Court invoking its
right for a new trial on the ground of newly discovered evidence. The
Supreme Court agreed with NLU. The Solicitor General, arguing for the
CIR, filed a motion for reconsideration.
ISSUE: WON the National Labor Union, Inc. is entitled to a new trial.
RULING: YES. The records show that the newly discovered evidence or
documents obtained by NLU, which they attached to their petition with
the SC, were evidence so inaccessible to them at the time of the trial that
even with the exercise of due diligence they could not be expected to have
obtained them and offered as evidence in the Court of Industrial Relations.
Further, the attached documents and exhibits are of such far-reaching
importance and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered (said newly obtained
records include books of business/inventory accounts by Ang Tibay
which were not previously accessible but already existing).
The SC also outlined that administrative bodies, like the CIR, although not
strictly bound by the Rules of Court must also make sure that they comply
to the requirements of due process. For administrative bodies, due
process can be complied with by observing the following:
P a g e | 21
1. The right to a hearing which includes the right of the party
interested or affected to present his own case and submit
evidence in support thereof.
2. Not only must the party be given an opportunity to present his
case and to adduce evidence tending to establish the rights which
he asserts but the tribunal must consider the evidence presented.
3. While the duty to deliberate does not impose the obligation to
decide right, it does imply a necessity which cannot be
disregarded, namely, that of having something to support its
decision. A decision with absolutely nothing to support it is a
nullity, a place when directly attached.
4. Not only must there be some evidence to support a finding or
conclusion but the evidence must be substantial. Substantial
evidence is more than a mere scintilla. It means such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.
5. The decision must be rendered on the evidence presented at the
hearing, or at least contained in the record and disclosed to the
parties affected.
6. administrative body or any of its judges, therefore, must act on its
or his own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate in
arriving at a decision.
7. The administrative body should, in all controversial questions,
render its decision in such a manner that the parties to the
proceeding can know the various issues involved, and the reasons
for the decisions rendered. The performance of this duty is
inseparable from the authority conferred upon it.
LABOR LAW REVIEW | [2017]

FEDERICO LEDESMA, JR. vs. NLRC
[19 October 2007]
FACTS: Petitioner was employed as a bus/service driver by the private
respondent on probationary basis, as evidenced by his appointment. As
such, he was required to report at private respondents training site in
Dasmarinas, Cavite, under the direct supervision of its site administrator,
Pablo Manolo de Leon.
On 11 November 2000, petitioner filed a complaint against de Leon for
allegedly abusing his authority as site administrator by using the private
respondents vehicles and other facilities for personal ends. In the same
complaint, petitioner also accused de Leon of immoral conduct allegedly
carried out within the private respondents premises. Subsequently
thereafter, de Leon filed a written report against the petitioner citing his
suspected drug use. In view of De Leons report, private respondents
Human Resource Manager, Trina Cueva served a copy of a Notice to
petitioner requiring him to explain within 24 hours why no disciplinary
action should be imposed on him for allegedly violating Section 14, Article
IV of the private respondents Code of Conduct. On 3 December 2000,
petitioner filed a complaint for illegal dismissal against private
respondent before the Labor Arbiter.
Petitioner alleged that he was asked to report at private respondents
main office where he was served by HR Manager Cueva a copy of the
Notice to Explain together with the copy of de Leons report citing his
suspected drug use. After he was made to receive the copies of the said
notice and report, HR Manager Cueva went inside the office of VP for
Administration Ty. After a while, HR Manager Cueva came out of the office
with VP for Administration Ty. To petitioners surprise, HR Manager Cueva
took back the earlier Notice to Explain given to him and flatly declared
that there was no more need for the petitioner to explain since his drug
test result revealed that he was positive for drugs. When petitioner,
however, asked for a copy of the said drug test result, HR Manager Cueva
P a g e | 22
told him that it was with the companys president, but she would also later
claim that the drug test result was already with the proper authorities.
On the following day, petitioner immediately went to St. Dominic Medical
Center for a drug test and he was found negative for any drug substance.
With his drug result on hand, petitioner went back to private respondents
main office in Manila to talk to VP for Administration Ty and HR Manager
Cueva and to show to them his drug test result. Petitioner then told VP for
Administration Ty and HR Manager Cueva that since his drug test proved
that he was not guilty of the drug use charge against him, he decided to
continue to work for the private respondent.
On 2 December 2000, petitioner reported for work but he was no longer
allowed to enter the training site for he was allegedly banned therefrom
according to the guard on duty. This incident prompted the petitioner to
file the complaint for illegal dismissal against the private respondent
before the Labor Arbiter.
ISSUE: WON petitioner was illegally dismissed.
RULING: YES. The Labor Arbiter found that the petitioner was illegally
dismissed from employment warranting the payment of his back wages.
The NLRC and the Court of Appeals found otherwise.
Well-entrenched is the principle that in order to establish a case before
judicial and quasi-administrative bodies, it is necessary that allegations
must be supported by substantial evidence. Substantial evidence is more
than a mere scintilla. It means such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.
In the present case, there is hardly any evidence on record so as to meet
the quantum of evidence required, i.e., substantial evidence. Petitioners
claim of illegal dismissal is supported by no other than his own bare,
uncorroborated and, thus, self-serving allegations, which are also
incoherent, inconsistent and contradictory.
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 P a g e | 23

Petitioner himself narrated that when his presence was requested on 29 On these scores, there is a dearth of evidence to establish the fact of
November 2000 at the private respondents main office where he was petitioners dismissal. We have scrupulously examined the records and
served with the Notice to Explain his superiors report on his suspected we found no evidence presented by petitioner, other than his own
drug use, VP for Administration Ty offered him separation pay if he will contentions that he was indeed dismissed by private respondent.
just voluntarily resign from employment. While we do not condone such
While this Court is not unmindful of the rule that in cases of illegal
an offer, neither can we construe that petitioner was dismissed at that
dismissal, the employer bears the burden of proof to prove that the
instance. Petitioner was only being given the option to either resign and
termination was for a valid or authorized cause in the case at bar,
receive his separation pay or not to resign but face the possible
however, the facts and the evidence did not establish a prima facie case
disciplinary charges against him. The final decision, therefore, whether to
that the petitioner was dismissed from employment. Before the private
voluntarily resign or to continue working still, ultimately rests with the
respondent must bear the burden of proving that the dismissal was legal,
petitioner. In fact, by petitioners own admission, he requested from VP
petitioner must first establish by substantial evidence the fact of his
for Administration Ty more time to think over the offer.
dismissal from service. Logically, if there is no dismissal, then there can
Moreover, the petitioner alleged that he was not allowed to enter the be no question as to the legality or illegality thereof.
training site by the guard on duty who told him that he was already
It is true that the Constitution affords full protection to labor, and that in
banned from the premises. Subsequently, however, petitioner admitted in
light of this Constitutional mandate, we must be vigilant in striking down
his Supplemental Affidavit that he was able to return to the said site on 3
any attempt of the management to exploit or oppress the working class.
December 2000, to claim his 16-30 November 2000 salary, and again on
However, it does not mean that we are bound to uphold the working class
9 December 2000, to receive his 13th month pay. The fact alone that he
in every labor dispute brought before this Court for our resolution.
was able to return to the training site to claim his salary and benefits
raises doubt as to his purported ban from the premises. The law in protecting the rights of the employees, authorizes neither
oppression nor self-destruction of the employer. It should be made clear
Finally, petitioners stance that he was dismissed by private respondent
that when the law tilts the scales of justice in favor of labor, it is in
was further weakened with the presentation of private respondents
recognition of the inherent economic inequality between labor and
payroll bearing petitioners name proving that petitioner remained as
management. The intent is to balance the scales of justice; to put the two
private respondents employee up to December 2000. Again, petitioners
parties on relatively equal positions. There may be cases where the
assertion that the payroll was merely fabricated for the purpose of
circumstances warrant favoring labor over the interests of management
supporting private respondents case before the NLRC cannot be given
but never should the scale be so tilted if the result is an injustice to the
credence. Entries in the payroll, being entries in the course of business,
employer. Justitia nemini neganda est -- justice is to be denied to none.
enjoy the presumption of regularity under Rule 130, Section 43 of the
Rules of Court. It is therefore incumbent upon the petitioner to adduce
clear and convincing evidence in support of his claim of fabrication and to
overcome such presumption of regularity. Unfortunately, petitioner again
failed in such endeavor.

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 P a g e | 24

LUZ G. CRISTOBAL vs. EMPLOYEES' COMPENSATION COMMISSION due to the pressure of work, plus neglected personal necessity which may
and GOVERNMENT SERVICE INSURANCE SYSTEM (National Science be attributed to the inadequate facilities in the Bureau of Printing.
Development Board) [G.R. No. L-49280. 30 April 1980]
In the instant case, it is evident that rectal cancer is one of those
borderline cases (Amparo, Sepulveda and Corales cases vs ECC). Like, it is
clear that the purpose of the resolution is to extend the applicability of the
FACTS: The deceased, Fortunato S. Cristobal was employed as
provisions of P.D. 626, thereby affording a greater number of employees
Supervising Information Officer 11 of the National Science Development
the opportunity to avail of the benefits under the law. This is in
Board (NSD) based in Bicutan, Taguig, Rizal. On April 8, 1976, he
consonance with the avowed policy of the State, as mandated by the
developed loose bowel movement which later worsened and his
Constitution and embodied in the New Labor Code, to give maximum aid
excrement was marked with fresh blood. Self-administered medications
and protection to labor.
were made but symptoms persisted until April 22, 1976 when he was
brought to the Hospital of Infant Jesus and was there treated by Dr. Willie The Employees' Compensation Commission, like the defunct Court of
Lagdameo, who diagnosed his illness as rectal malignancy. On May 28, Industrial Relations and the Workmen's Compensation Commission, is
1976, he was discharged with improved conditions but just one year under obligation at all times to give meaning and substance to the
thereafter, he was again confined at the UST Hospital for the same ailment. constitutional guarantees in favor of the working man, more specially, the
A second operation became necessary because of the recurrence of social justice guarantee; for otherwise, these guarantees would be merely
malignancy in the pelvis. Despite earnest medical efforts, he succumbed "a lot of meaningless patter."
to his illness on May 27, 1977.
From the foregoing statements, it is palpable that the respondent ECC
The petitioner herein, as the decedent's widow and beneficiary, filed with recognizes, as it is duty bound to, the policy of the State to afford
the GSIS a claim for income (death) benefits under Presidential Decree No. maximum aid and protection to labor.
626, as amended. The said claim was denied by the GSIS and in a
subsequent request for reconsideration, the System reiterated its
decision. YMBONG vs. ABS-CBN
[G.R. No. 184885.07 March 2012]
ISSUE: WON Cristobal is entitled of the foregoing compensation.
RULING: The deceased, as Supervising Officer II of the NSDB, was actually
FACTS: Petitioner Ernesto G. Ymbong started working for ABS-CBN
assigned to the Printing Department of the said agency where he was
Broadcasting Corporation (ABS-CBN) in 1993 at its regional station in
exposed to various chemicals and intense heat. This fact was corroborated
Cebu as a television talent, co-anchoring Hoy Gising and TV Patrol Cebu.
by the affidavit of one Angel Peres, a co-employee of the deceased. These
His stint in ABS-CBN later extended to radio when ABS-CBN Cebu
statements find relevance in the medical certificate issued by Dr. Rufo A.
launched its AM station DYAB in 1995 where he worked as drama and
Guzman stating that the illness may be aggravated by the unhygienic
voice talent, spinner, scriptwriter and public affairs program anchor.
conditions in the Bureau of Printing where he works. Handling of
chemicals for printing, eating without proper washing of hands, tension

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Like Ymbong, Leandro Patalinghug also worked for ABS-CBN Cebu.
Starting 1995, he worked as talent, director and scriptwriter for various
radio programs aired over DYAB.
On January 1, 1996, the ABS-CBN Head Office in Manila issued Policy No.
HR-ER-016 or the Policy on Employees Seeking Public Office. The
pertinent portions read:
1. Any employee who intends to run for any public office position,
must file his/her letter of resignation, at least thirty (30) days prior
to the official filing of the certificate of candidacy either for national
or local election.
xxxx
3. Further, any employee who intends to join a political group/party
or even with no political affiliation but who intends to openly and
aggressively campaign for a candidate or group of candidates (e.g.
publicly speaking/endorsing candidate, recruiting campaign
workers, etc.) must file a request for leave of absence subject to
managements approval. For this particular reason, the employee
should file the leave request at least thirty (30) days prior to the
start of the planned leave period.
Because of the impending May 1998 elections and based on his immediate
recollection of the policy at that time, Dante Luzon, Assistant Station
Manager of DYAB issued the following memorandum:
TO : ALL CONCERNED
FROM : DANTE LUZON
DATE : MARCH 25, 1998
SUBJECT : AS STATED
Please be informed that per company policy, any employee/talent who
wants to run for any position in the coming election will have to file a leave
of absence the moment he/she files his/her certificate of candidacy.
P a g e | 25
The services rendered by the concerned employee/talent to this company
will then be temporarily suspended for the entire campaign/election
period.
For strict compliance.
After the issuance of the March 25, 1998 Memorandum, Ymbong got in
touch with Luzon. Luzon claims that Ymbong approached him and told
him that he would leave radio for a couple of months because he will
campaign for the administration ticket. It was only after the elections that
they found out that Ymbong actually ran for public office himself at the
eleventh hour. Ymbong, on the other hand, claims that in accordance with
the March 25, 1998 Memorandum, he informed Luzon through a letter
that he would take a few months leave of absence from March 8, 1998 to
May 18, 1998 since he was running for councilor of Lapu-Lapu City.
As regards Patalinghug, Patalinghug approached Luzon and advised him
that he will run as councilor for Naga, Cebu. According to Luzon, he
clarified to Patalinghug that he will be considered resigned and not just
on leave once he files a certificate of candidacy.
Later, Ymbong and Patalinghug both tried to come back to ABS-CBN Cebu.
According to Luzon, he informed them that they cannot work there
anymore because of company policy. This was stressed even in
subsequent meetings and they were told that the company was not
allowing any exceptions. ABS-CBN, however, agreed out of pure liberality
to give them a chance to wind up their participation in the radio drama,
Nagbabagang Langit, since it was rating well and to avoid an abrupt
ending. The agreed winding-up, however, dragged on for so long
prompting Luzon to issue to Ymbong the memorandum dated September
14, 1998 automatically terminating them.
ISSUES:
1. WON Policy No. HR-ER-016 is valid.
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2. WON the March 25, 1998 Memorandum issued by
Luzonsuperseded Policy No. HR-ER-016.
3. Ymbong, by seeking an elective post, is deemed to have resigned
and not dismissed by ABS-CBN.
RULING:
1. ABS-CBN had a valid justification for Policy No. HR-ER-016. Its
rationale is embodied in the policy itself, to wit:
2.
ABS-CBN BROADCASTING CORPORATION strongly believes
that it is to the best interest of the company to continuously
remain apolitical. While it encourages and supports its
employees to have greater political awareness and for them
to exercise their right to suffrage, the company, however,
prefers to remain politically independent and unattached to
any political individual or entity.
Therefore, employees who intend to run for public office or accept
political appointment should resign from their positions, in order to
protect the company from any public misconceptions. To preserve its
objectivity, neutrality and credibility, the company reiterates the
following policy guidelines for strict implementation.
We have consistently held that so long as a companys management
prerogatives are exercised in good faith for the advancement of the
employers interest and not for the purpose of defeating or circumventing
the rights of the employees under special laws or under valid agreements,
this Court will uphold them. In the instant case, ABS-CBN validly justified
the implementation of Policy No. HR-ER-016. It is well within its rights to
ensure that it maintains its objectivity and credibility and freeing itself
from any appearance of impartiality so that the confidence of the viewing
and listening public in it will not be in any way eroded. Even as the law is
solicitous of the welfare of the employees, it must also protect the right of
an employer to exercise what are clearly management prerogatives. The
P a g e | 26
free will of management to conduct its own business affairs to achieve its
purpose cannot be denied.
It is worth noting that such exercise of management prerogative has
earned a stamp of approval from no less than our Congress itself when on
February 12, 2001, it enacted Republic Act No. 9006, otherwise known as
the Fair Election Act. Sec. 6.6 thereof reads:
6.6. Any mass media columnist, commentator, announcer, reporter,
on-air correspondent or personality who is a candidate for any
elective public office or is a campaign volunteer for or employed or
retained in any capacity by any candidate or political party shall be
deemed resigned, if so required by their employer, or shall take a
leave of absence from his/her work as such during the campaign
period: Provided, That any media practitioner who is an official of a
political party or a member of the campaign staff of a candidate or
political party shall not use his/her time or space to favor any
candidate or political party.
3. The CA correctly ruled that though Luzon, as Assistant Station Manager
for Radio of ABS-CBN, has policy-making powers in relation to his
principal task of administering the networks radio station in the Cebu
region, the exercise of such power should be in accord with the general
rules and regulations imposed by the ABS-CBN Head Office to its
employees. Clearly, the March 25, 1998 Memorandum issued by Luzon
which only requires employees to go on leave if they intend to run for
any elective position is in absolute contradiction with Policy No. HR-
ER-016 issued by the ABS-CBN Head Office in Manila which requires
the resignation, not only the filing of a leave of absence, of any
employee who intends to run for public office. Having been issued
beyond the scope of his authority, the March 25, 1998 Memorandum is
therefore void and did not supersede Policy No. HR-ER-016.
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Also worth noting is that Luzon in his Sworn Statement admitted
the inaccuracy of his recollection of the company policy when he
issued the March 25, 1998 Memorandum and stated therein that
upon double-checking of the exact text of the policy statement and
subsequent confirmation with the ABS-CBN Head Office in Manila,
he learned that the policy required resignation for those who will
actually run in elections because the company wanted to maintain
its independence. Since the officer who himself issued the subject
memorandum acknowledged that it is not in harmony with the
Policy issued by the upper management, there is no reason for it
to be a source of right for Ymbong.
4. As Policy No. HR-ER-016 is the subsisting company policy and not
Luzons March 25, 1998 Memorandum, Ymbong is deemed
resigned when he ran for councilor.
We find no merit in Ymbongs argument that [his] automatic
termination x x x was a blatant [disregard] of [his] right to due
process as he was never asked to explain why he did not
tender his resignation before he ran for public office as
mandated by [the subject company policy]. Ymbongs overt act
of running for councilor of Lapu-Lapu City is tantamount to
resignation on his part. He was separated from ABS-CBN not
because he was dismissed but because he resigned. Since there
was no termination to speak of, the requirement of due process
in dismissal cases cannot be applied to Ymbong. Thus, ABS-CBN
is not duty-bound to ask him to explain why he did not tender
his resignation before he ran for public office as mandated by
the subject company policy. Petition denied
P a g e | 27
DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A.
TECSON vs. GLAXO WELLCOME PHILIPPINES, INC.
[G.R. No. 162994. 17 Septmember 2004]
FACTS: Petitioner Pedro A. Tecson (Tecson) was hired by respondent
Glaxo Wellcome Philippines, Inc. (Glaxo) as medical representative on
October 24, 1995, after Tecson had undergone training and orientation.
Thereafter, Tecson signed a contract of employment which stipulates,
among others, that he agrees to study and abide by existing company
rules; to disclose to management any existing or future relationship by
consanguinity or affinity with co-employees or employees of competing
drug companies and should management find that such relationship
poses a possible conflict of interest, to resign from the company. Code of
Conduct of Glaxo similarly provides these conditions; that otherwise, the
management and the employee will explore the possibility of a transfer
to another department in a non-counterchecking position or preparation
for employment outside the company after six months.
Tecson was initially assigned to market Glaxos products in the Camarines
Sur-Camarines Norte sales area. Subsequently, Tecson entered into a
romantic relationship with Bettsy, an employee of Astra
Pharmaceuticals3(Astra), a competitor of Glaxo. Bettsy was Astras
Branch Coordinator in Albay. She supervised the district managers and
medical representatives of her company and prepared marketing
strategies for Astra in that area. Even before they got married, Tecson
received several reminders from his District Manager regarding the
conflict of interest which his relationship with Bettsy might engender.
Still, love prevailed, and Tecson married Bettsy in September 1998.
Tecsons superior reminded him that he and Bettsy should decide which
one of them would resign from their jobs. Tecson requested for time to
comply with the company policy against entering into a relationship with
an employee of a competitor company. He explained that Astra, Bettsys
employer, was planning to merge with Zeneca, another drug company;
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and Bettsy was planning to avail of the redundancy package to be offered
by Astra.
Tecson again requested for more time resolve the problem. Thereafter,
Tecson applied for a transfer in Glaxos milk division, thinking that since
Astra did not have a milk division, the potential conflict of interest would
be eliminated. His application was denied in view of Glaxos least-
movement-possible policy. Glaxo transferred Tecson to the Butuan City-
Surigao City-Agusan del Sur sales area. Tecson asked Glaxo to reconsider
its decision, but his request was denied. Tecson defied the transfer order
and continued acting as medical representative in the Camarines Sur-
Camarines Norte sales area.
Issue: WON Glaxos policy against its employees marrying employees
from competitor companies is valid.
RULING: The Court finds NO merit in the petition. Glaxo has a right to
guard its trade secrets, manufacturing formulas, marketing strategies and
other confidential programs and information from competitors, especially
so that it and Astra are rival companies in the highly competitive
pharmaceutical industry.
The prohibition against personal or marital relationships with employees
of competitor companies upon Glaxos employees is reasonable under the
circumstances because relationships of that nature might compromise the
interests of the company. In laying down the assailed company policy,
Glaxo only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.
That Glaxo possesses the right to protect its economic interests cannot be
denied. No less than the Constitution recognizes the right of enterprises
to adopt and enforce such a policy to protect its right to reasonable
returns on investments and to expansion and growth.
P a g e | 28
Indeed, while our laws endeavor to give life to the constitutional policy on
social justice and the protection of labor, it does not mean that every labor
dispute will be decided in favor of the workers. The law also recognizes
that management has rights which are also entitled to respect and
enforcement in the interest of fair play.
EQUAL-PROTECTION: Glaxo does not impose an absolute prohibition
against relationships between its employees and those of competitor
companies. Its employees are free to cultivate relationships with and
marry persons of their own choosing. What the company merely seeks to
avoid is a conflict of interest between the employee and the company that
may arise out of such relationships. Moreover, records show that Glaxo
gave Tecson several chances to eliminate the conflict of interest brought
about by his relationship with Bettsy.
POLLO vs. DAVID, ET AL.
[G.R. No. 181881. 18 October 2011]
FACTS: Petitioner is a former Supervising Personnel Specialist of the CSC
Regional Office No. IV and also the Officer-in-Charge of the Public
Assistance and Liaison Division (PALD) under the Mamamayan Muna
Hindi Mamaya Na program of the CSC.
On January 3. 2007, CSC Chairperson Karina Constantino-David received
an unsigned complaint letter which was marked Confidential and was
sent through a courier service (LBC) from certain Allan San Pascual of
Bagong Silang, Caloocan City. The letter contain allegations that the
petitioner have been helping many who have pending cases in the CSC and
the letter sender pleas that the CSC should investigate this anomaly to
maintain the clean and good behaviour of their office.
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Chairperson David immediately formed a team of four personnel with
background in information technology (IT), and issued a memo directing
them to conduct an investigation and specifically to back up all the files in
the computers found in the Mamamayan Muna (PALD) and Legal
divisions. After some briefing, the team proceeded at once to the CSC-
ROIV office at Panay Avenue, Quezon City. The backing-up of all files in the
hard disk of computers at the PALD and Legal Services Division (LSD) was
witnessed by several employees, together with Directors Castillo and
Unite who closely monitored said activity. At around 6:00 p.m., Director
Unite sent text messages to petitioner and the head of LSD, who were both
out of the office at the time, informing them of the ongoing copying of
computer files in their divisions upon orders of the CSC Chair.
ISSUE: WON the search conducted in the petitioners office computer and
the copying of his personal files without his knowledge and consent,
alleged as a transgression of his constitutional right to privacy, is legal.
RULING: YES. In sum, SC concluded that the special needs, beyond the
normal need for law enforcement make theprobable-cause requirement
impracticable, x x x for legitimate, work-related non-investigatory
intrusions as well as investigations of work-related misconduct. A
standard of reasonableness will neither unduly burden the efforts of
government employers to ensure the efficient and proper operation of the
workplace, nor authorize arbitrary intrusions upon the privacy of public
employees. We hold, therefore, that public employer intrusions on the
constitutionally protected privacy interests of government employees for
non-investigatory, work-related purposes, as well as for investigations of
work-related misconduct, should be judged by the standard of
reasonableness under all the circumstances. Under this reasonableness
standard, both the inception and the scope of the intrusion must be
reasonable:
Determining the reasonableness of any search involves a twofold
inquiry: first, one must consider whether theaction was justified at
its inception, x x x ; second, one must determine whether the search as
P a g e | 29
actually conducted was reasonably related in scope to the
circumstances which justified the interference in the first place, x x x
Ordinarily, a search of an employees office by a supervisor will be
justified at its inception when there are reasonable grounds for
suspecting that the search will turn up evidence that the employee is
guilty of work-related misconduct, or that the search is necessary for a
non-investigatory work-related purpose such as to retrieve a needed file.
x x x The search will be permissible in its scope when the measures adopted
are reasonably related to the objectives of the search and not excessively
intrusive in light of the nature of the [misconduct]. x x
Under the facts obtaining, the search conducted on petitioners computer
was justified at its inception and scope. We quote with approval the CSCs
discussion on the reasonableness of its actions, consistent as it were with
the guidelines established by OConnor: Even conceding for a moment
that there is no such administrative policy, there is no doubt in the mind
of the Commission that the search of Pollos computer has successfully
passed the test of reasonableness for warrantless searches in the
workplace as enunciated in the above-discussed American authorities. It
bears emphasis that the Commission pursued the search in its capacity as
a government employer and that it was undertaken in connection with an
investigation involving a work-related misconduct, one of the
circumstances exempted from the warrant requirement. At the inception
of the search, a complaint was received recounting that a certain division
chief in the CSCRO No. IV was lawyering for parties having pending cases
with the said regional office or in the Commission. The nature of the
imputation was serious, as it was grievously disturbing. If, indeed, a CSC
employee was found to be furtively engaged in the practice of lawyering
for parties with pending cases before the Commission would be a highly
repugnant scenario, then such a case would have shattering
repercussions. It would undeniably cast clouds of doubt upon the
institutional integrity of the Commission as a quasi-judicial agency, and in
the process, render it less effective in fulfilling its mandate as an impartial
and objective dispenser of administrative justice. It is settled that a court
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or an administrative tribunal must not only be actually impartial but must
be seen to be so, otherwise the general public would not have any trust
and confidence in it.
Considering the damaging nature of the accusation, the Commission had
to act fast, if only to arrest or limit any possible adverse consequence or
fall-out. Thus, on the same date that the complaint was received, a search
was forthwith conducted involving the computer resources in the
concerned regional office. That it was the computers that were subjected
to the search was justified since these furnished the easiest means for an
employee to encode and store documents. Indeed, the computers would
be a likely starting point in ferreting out incriminating evidence.
Concomitantly, the ephemeral nature of computer files, that is, they could
easily be destroyed at a click of a button, necessitated drastic and
immediate action. Pointedly, to impose the need to comply with the
probable cause requirement would invariably defeat the purpose of the
wok-related investigation.
Worthy to mention, too, is the fact that the Commission effected the
warrantless search in an open and transparent manner. Officials and some
employees of the regional office, who happened to be in the vicinity, were
on hand to observe the process until its completion. In addition, the
respondent himself was duly notified, through text messaging, of the
search and the concomitant retrieval of files from his computer.
All in all, the Commission is convinced that the warrantless search done
on computer assigned to Pollo was not, in any way, vitiated with
unconstitutionality. It was a reasonable exercise of the managerial
prerogative of the Commission as an employer aimed at ensuring its
operational effectiveness and efficiency by going after the work-related
misfeasance of its employees. Consequently, the evidence derived from
the questioned search are deemed admissible.
Petitioners claim of violation of his constitutional right to privacy must
necessarily fail. His other argument invoking the privacy of
communication and correspondence under Section 3(1), Article III of the
P a g e | 30
1987 Constitution is also untenable considering the recognition accorded
to certain legitimate intrusions into the privacy of employees in the
government workplace under the aforecited authorities.
MANSION PRINTING CENTER vs. BITARA, JR.
[G.R. No. 168120. 25 January 2012]
FACTS: Mansion Printing Center is a single proprietorship engaged in the
printing of quality self-adhesive labels, brochures, posters, stickers,
packaging and the like. Mansion engaged the services of Bitara as a helper
(kargador). Respondent was later promoted as the companys sole driver
tasked, among others, to deliver the products to the clients within the
delivery schedules.
Petitioners aver that the timely delivery of the products to the clients is
one of the foremost considerations material to the operation of the
business. It being so, they closely monitored the attendance of
respondent. They noted his habitual tardiness and absenteeism.
Petitioners issued a Memorandum requiring respondent to submit a
written explanation why no administrative sanction should be imposed
on him for his habitual tardiness, to which he replied; but despite
respondents undertaking to report on time, however, he continued to
disregard attendance policies. Respondent filed a complaint for illegal
dismissal against the petitioners before the Labor Arbiter.
ISSUE: WON there has been gross and habitual neglect of duty on the part
of Bitara, warranting his dismissal from service.
RULING: YES. SC Citing Valiao v. Court of Appeals, is instructive:
xxx It bears stressing that petitioners absences and tardiness were
not isolated incidents but manifested a pattern of habituality. xxx
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 P a g e | 31

The totality of infractions or the number of violations committed during SMART COMMUNICATIONS vs. ASTORGA
the period of employment shall be considered in determining the penalty [G.R. No.148132. 28 January 2008]
to be imposed upon an erring employee. The offenses committed by him
should not be taken singly and separately but in their totality. Fitness for
FACTS: May 8, 1997: Regina M. Astorga (Astorga) was employed by
continued employment cannot be compartmentalized into tight little
SMART as District Sales Manager of the Corporate Sales Marketing Group/
cubicles of aspects of character, conduct, and ability separate and
Fixed Services Division (CSMG/FSD) with P33,650.00 monthly salary and
independent of each other.
annual performance incentive (30% of her annual gross salary), group life
In Valiao, we defined gross negligence as want of care in the performance and hospitalization insurance coverage, and a car plan of P455K.
of ones duties and habitual neglect as repeated failure to perform ones
In February 1998, SMART launched an organizational realignment to
duties for a period of time, depending upon the circumstances. These are
achieve more efficient operations where SNMI was formed to do the sales
not overly technical terms, which, in the first place, are expressly
and marketing work so CSMG/FSD was abolished. SNMI agreed to absorb
sanctioned by the Labor Code of the Philippines, to wit:
the CSMG personnel who would be recommended by SMART which
ART. 282. Termination by employer. An employer may excluded Astorga for being last on the performance evaluation. SMART
terminate an employment for any of the following causes: offered her a supervisory position in the Customer Care Department with
lower rank and rate so she refused. And, she continued going to work.
xxx (b) Gross and habitual neglect by the employee of his duties; xxx
In March 3, 1998, SMART issued a memorandum advising Astorga of the
Bitaras weekly time record for the first quarter of the year 2000 revealed
termination of her employment on ground of redundancy, effective April
that he came late 19 times out of the 47 times he reported for work. He
3, 1998. Pending the Labor Case on Illegal dismissal, SMART sent a letter
also incurred 19 absences out of the 66 working days during the quarter.
to Astorga demanding that she pay the current market value of the Honda
His absences without prior notice and approval from March 11-16, 2000
Civic Sedan which was given to her under the companys car plan
were considered to be the most serious infraction of all because of its
program, or to surrender the same to the company for proper disposition
adverse effect on business operations. Clearly, even in the absence of a
which she refused
written company rule defining gross and habitual neglect of duties,
respondents omissions qualify as such warranting his dismissal from the ISSUE: WON the dismissal is valid.
service.
RULING: YES. Smarts replevin granted.
***NOTES: We cannot simply tolerate injustice to employers if only to protect the welfare
of undeserving employees. As aptly put by then Associate Justice Leonardo A. Quisumbing: Replevin is an action whereby the owner or person entitled to
Needless to say, so irresponsible an employee like petitioner does not deserve a place in the repossession of goods or chattels may recover those goods or chattels
workplace, and it is within the managements prerogative xxx to terminate his employment. from one who has wrongfully distrained or taken, or who wrongfully
Even as the law is solicitous of the welfare of employees, it must also protect the rights of an
employer to exercise what are clearly management prerogatives. As long as the companys
detains such goods or chattels. It is designed to permit one having right to
exercise of those rights and prerogative is in good faith to advance its interest and not for the possession to recover property in specie from one who has wrongfully
purpose of defeating or circumventing the rights of employees under the laws or valid taken or detained the property. The term may refer either to the action
agreements, such exercise will be upheld.

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itself, for the recovery of personalty, or to the provisional remedy
traditionally associated with it, by which possession of the property may
be obtained by the plaintiff and retained during the pendency of the
action.
Relationship of DR-CR rather than EE-ER
Replevin is a possessory action, the gist of which is the right of possession
in the plaintiff. The primary relief sought therein is the return of the
property in specie wrongfully detained by another person. It is an
ordinary statutory proceeding to adjudicate rights to the title or
possession of personal property. The question of whether or not a party
has the right of possession over the property involved and if so, whether
or not the adverse party has wrongfully taken and detained said property
as to require its return to plaintiff, is outside the pale of competence of a
labor tribunal and beyond the field of specialization of Labor Arbiters. The
labor dispute involved is not intertwined with the issue in the Replevin
Case, acknowledge the prerogative of the employer to adopt such
measures as will promote greater efficiency, reduce overhead costs and
enhance prospects of economic gains, albeit always within the framework
of existing laws. Procedural infirmity would not render the termination of
Astorgas employment illegal.
STAR PAPER CORPORATION vs. SIMBOL
[G.R. No. 164774. 12 April 2006]
FACTS: Petitioner was the employer of the respondents. Under the policy
of Star Paper the employees are:
1. New applicants will not be allowed to be hired if in case he/she
has a relative, up to the 3rd degree of relationship, already
employed by the company.
2. In case of two of our employees (singles, one male and another
female) developed a friendly relationship during the course of
P a g e | 32
their employment and then decided to get married, one of them
should resign to preserve the policy stated above.
Respondents Comia and Simbol both got married to their fellow
employees. Estrella on the other hand had a relationship with a co-
employee resulting to her pregnancy on the belief that such was
separated. The respondents allege that they were forced to resign as a
result of the implementation of the said assailed company policy.
The Labor Arbiter and the NLRC ruled in favor of petitioner. The decision
was appealed to the Court of Appeals which reversed the decision.
ISSUE: WON the prohibition to marry in the contract of employment is
valid.
RULING: It is significant to note that in the case at bar, respondents were
hired after they were found fit for the job, but were asked to resign when
they married a co-employee. Petitioners failed to show how the marriage
of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an
employee of the Repacking Section, could be detrimental to its business
operations. Neither did petitioners explain how this detriment will
happen in the case of Wilfreda Comia, then a Production Helper in the
Selecting Department, who married Howard Comia, then a helper in the
cutter-machine. The policy is premised on the mere fear that employees
married to each other will be less efficient. If we uphold the questioned
rule without valid justification, the employer can create policies based on
an unproven presumption of a perceived danger at the expense of an
employees right to security of tenure.
Petitioners contend that their policy will apply only when one employee
marries a co-employee, but they are free to marry persons other than co-
employees. The questioned policy may not facially violate Article 136 of
the Labor Code but it creates a disproportionate effect and under the
disparate impact theory, the only way it could pass judicial scrutiny is a
showing that it is reasonable despite the discriminatory, albeit
disproportionate, effect. The failure of petitioners to prove a legitimate
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business concern in imposing the questioned policy cannot prejudice the
employees right to be free from arbitrary discrimination based upon
stereotypes of married persons working together in one company.
Lastly, the absence of a statute expressly prohibiting marital
discrimination in our jurisdiction cannot benefit the petitioners. The
protection given to labor in our jurisdiction is vast and extensive that we
cannot prudently draw inferences from the legislatures silence that
married persons are not protected under our Constitution and declare
valid a policy based on a prejudice or stereotype. Thus, for failure of
petitioners to present undisputed proof of a reasonable business
necessity, we rule that the questioned policy is an invalid exercise of
management prerogative. Corollary, the issue as to whether respondents
Simbol and Comia resigned voluntarily has become moot and academic.
In the case of Estrella, the petitioner failed to adduce proof to justify her
dismissal. Hence, the Court ruled that it was illegal. Petition was denied.
ARMANDO YRASEGUI vs. PAL
[G.R. No. 168081. 17 October 2008]
FACTS: Petitioner was a former international flight steward of PAL,
herein respondent. Petitioner was dismissed because of his failure to
adhere to the weight standards of the airline company. Petitioner claims
that he was illegally dismissed.
ISSUE: WON petitioner was discriminated against when he was
dismissed.
RULING: NO. To make his claim more believable, petitioner invokes the
equal protection clause guaranty of the Constitution. However, in the
absence of governmental interference, the liberties guaranteed by the
Constitution cannot be invoked. Put differently, the Bill of Rights is not
meant to be invoked against acts of private individuals. Indeed, the US
Supreme Court, in interpreting the 14th Amendment, which is the source
P a g e | 33
of our equal protection guarantee, is consistent in saying that the equal
protection erects no shield against private conduct, however
discriminatory or wrongful. Private actions, no matter how egregious,
cannot violate the equal protection guarantee.
MANILA PAVILION vs. HENRY DELADA
[G.R. No. 189947. 25 January 2012]
FACTS: Delada was the Union President of the Manila Pavilion
Supervisors Association at MPH originally assigned as Head Waiter of
Rotisserie then reassigned him as Head Waiter of Seasons Coffee Shop but
respondent declined the inter-outlet transfer and instead asked for a
grievance meeting on the matter, pursuant to their Collective Bargaining
Agreement (CBA). He also requested his retention as Head Waiter of
Rotisserie while the grievance procedure was ongoing. The Mgt. denied
the request and he kept on reporting to Rotisserie.
MPH sent him several memoranda requiring him to explain in writing why
he should not be penalized for the following offenses gross
insubordination etc. Delada persistently rebuffed orders for him to report
to his new assignment. While respondents Complaint is pending MPH
citing security and safety reasons, placed respondent on a 30-day
preventive suspension. Thereafter found Delada guilty imposing the
penalty of 90-day suspension.
ISSUE: WON Manila Pavilion Hotel retained the authority to continue with
the administrative case against Delada for insubordination and willful
disobedience of the transfer order.
RULING: YES. SC rule that petitioner Manila Pavilion Hotel had the
authority to continue with the administrative proceedings for
insubordination and willful disobedience against Delada and to impose on
him the penalty of suspension. Consequently, petitioner is not liable to pay
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back wages and other benefits for the period corresponding to the penalty
of 90-day suspension.
First, it must be pointed out that the basis of the 30-day preventive
suspension imposed on Delada was different from that of the 90-day
penalty of suspension. The 30-day preventive suspension was imposed by
MPH on the assertion that Delada might sabotage hotel operations if
preventive suspension would not be imposed on him. On the other hand,
the penalty of 90-day suspension was imposed on respondent as a form
of disciplinary action. It was the outcome of the administrative
proceedings conducted against him.
Preventive suspension is a disciplinary measure resorted to by the
employer pending investigation of an alleged malfeasance or misfeasance
committed by an employee. The employer temporarily bars the employee
from working if his continued employment poses a serious and imminent
threat to the life or property of the employer or of his co-workers.
The penalty of suspension refers to the disciplinary action imposed on the
employee after an official investigation or administrative hearing is
conducted. The employer exercises its right to discipline erring
employees pursuant to company rules and regulations. Thus, a finding of
validity of the penalty of 90-day suspension will not embrace the issue of
the validity of the 30-day preventive suspension. In any event, petitioner
no longer assails the ruling of the CA on the illegality of the 30-day
preventive suspension.
PRINCE TRANSPORT, INC. AND MR. RENATO CLAROS vs. DIOSDADO
GARCIA, ET AL.
[G.R. No.167291. 12 January 2011]
FACTS: Prince Transport, Inc. (PTI), is a company engaged in the business
of transporting passengers by land; respondents were hired either as
drivers, conductors, mechanics or inspectors, except for respondent
P a g e | 34
Diosdado Garcia (Garcia), who was assigned as Operations Manager.
Sometime in October 2007 the commissions received by the respondents
were reduced to 7 to 9% from 8 to 10%. This led respondents and other
employees of PTI to hold a series of meetings to discuss the protection of
their interests as employees. Ranato Claros, president of PTI, made known
to Garcia his objections to the formation of a union and in order to block
the continued formation of the union, PTI caused the transfer of all union
members and sympathizers to one of its sub-companies, Lubas Transport
(Lubas). The business of Lubas deteriorated because of the refusal of PTI
to maintain and repair the units being used therein, which resulted in the
virtual stoppage of its operations and respondents' loss of employment.
Hence, the respondent-employees filed complaints against PTI for illegal
dismissal and unfair labor practice. PTI contended that it has nothing to
do with the management and operations of Lubas as well as the control
and supervision of the latter's employees.
ISSUE: WON the order to reinstate respondents was valid considering
that the issue of reinstatement was never brought up before the CA and
respondents never questioned the award of separation pay.
RULING: YES. It is clear from the complaints filed by respondents that
they are seeking reinstatement. Section 2 (c), Rule 7 of the Rules of Court
provides that a pleading shall specify the relief sought, but may add a
general prayer for such further or other reliefs as may be deemed just and
equitable. Under this rule, a court can grant the relief warranted by the
allegation and the proof even if it is not specifically sought by the injured
party; the inclusion of a general prayer may justify the grant of a remedy
different from or together with the specific remedy sought, if the facts
alleged in the complaint and the evidence introduced so warrant. The
general prayer is broad enough to justify extension of a remedy different
from or together with the specific remedy sought. Even without the
prayer for a specific remedy, proper relief may be granted by the court if
the facts alleged in the complaint and the evidence introduced so warrant.
The court shall grant relief warranted by the allegations and the proof
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even if no such relief is prayed for. The prayer in the complaint for other
reliefs equitable and just in the premises justifies the grant of a relief not
otherwise specifically prayed for. In the instant case, aside from their
specific prayer for reinstatement, respondents, in their separate
complaints, prayed for such reliefs which are deemed just and equitable.
PRODUCERS BANK OF THE PHILIPPINES vs. NLRC and PRODUCERS
BANK EMPLOYEES ASSOCIATION [335 SCRA 489]
FACTS: The present petition originated from a complaint filed by private
respondent on 11 February 1988 with the Arbitration Branch, NLRC,
charging petitioner with diminution of benefits, non-compliance with
Wage Order No. 6 and non-payment of holiday pay. In addition, private
respondent prayed for damages. Labor arbiter dismissed the complaint
for lack of merit. NLRC, however, granted all of private respondents
claims, except for damages. Petition filed a Motion for Partial
Reconsideration, which was denied by the NLRC. Hence, recourse to this
Court.
Contention of the petitioner Bank: NLRC gravely abused its discretion in
ruling as it did for the succeeding reasons stated: (1) it contravened the
Supreme Court decision in Traders Royal Bank v. NLRC, et al., G.R. No.
88168, promulgated on August 30, 1990, (2) its ruling is not justified by
law and Art. 100 of the Labor Code, (3) its ruling is contrary to the CBA,
and (4) the so-called company practice invoked by it has no legal and
moral bases (4) petitioner, under conservatorship and distressed, is
exempted under Wage Order No. 6.
ISSUE: WON respondent is entitled for the payment of the above-
mentioned monetary claims, particularly BONUS.
RULING: As to the bonuses, private respondent declared in its position
papers filed with the NLRC that:
P a g e | 35
1. Producers Bank of the Philippines, a banking institution, has been
providing several benefits to its employees since 1971 when it
started its operation. Among the benefits it had been regularly
giving is a mid-year bonus equivalent to an employees one-month
basic pay and a Christmas bonus equivalent to an employees one
whole month salary (basic pay plus allowance);
2. When P.D. 851, the law granting a 13thmonth pay, took effect, the
basic pay previously being given as part of the Christmas bonus
was applied as compliance to it (P.D. 851), the allowances
remained as Christmas bonus;
3. From 1981 up to 1983, the bank continued giving one month
basic pay as mid-year bonus, one month basic pay as 13thmonth
pay but the Christmas bonus was no longer based on the
allowance but on the basic pay of the employees which is higher;
4. In the early part of 1984, the bank was placed under
conservatorship but it still provided the traditional mid-year
bonus;
5. By virtue of an alleged Monetary Board Resolution No. 1566, bank
only gave a one-half (1/2) month basic pay as compliance of the
13thmonth pay and none for the Christmas bonus.
Respondents Contention: that the mid-year and Christmas bonuses, by
reason of their having been given for thirteen consecutive years, have
ripened into a vested right and, as such, can no longer be unilaterally
withdrawn by petitioner without violating Article 100 of Presidential
Decree No. 4429 which prohibits the diminution or elimination of benefits
already being enjoyed by the employees. Although private respondent
concedes that the grant of a bonus is discretionary on the part of the
employer, it argues that, by reason of its long and regular concession, it
may become part of the employees regular compensation.
Petitioner asserts: that it cannot be compelled to pay the alleged bonus
differentials due to its depressed financial condition, as evidenced by the
fact that in 1984 it was placed under conservatorship by the Monetary
Board. According to petitioner, it sustained losses in the millions of pesos
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from 1984 to 1988, an assertion which was affirmed by the labor arbiter.
Moreover, petitioner points out that the collective bargaining agreement
of the parties does not provide for the payment of any mid-year or
Christmas bonus. On the contrary, Sec. 4 of the collective bargaining
agreement states that
Acts of Grace. Any other benefits or privileges which are not
expressly provided in this Agreement, even if now accorded or
hereafter accorded to the employees, shall be deemed purely acts of
grace dependent upon the sole judgment and discretion of the BANK
to grant, modify or withdraw.
A bonus is an amount granted and paid to an employee for his industry
and loyalty which contributed to the success of the employers business
and made possible the realization of profits. It is an act of generosity
granted by an enlightened employer to spur the employee to greater
efforts for the success of the business and realization of bigger profits. The
granting of a bonus is a management prerogative, something given in
addition to what is ordinarily received by or strictly due the recipient.
Thus, a bonus is not a demandable and enforceable obligation, except
when it is made part of the wage, salary or compensation of the employee.
However, an employer cannot be forced to distribute bonuses which it can
no longer afford to pay. To hold otherwise would be to penalize the
employer for his past generosity. Thus, in Traders Royal Bank v. NLRC, we
held that
It is clear x x x that the petitioner may not be obliged to pay bonuses
to its employees. The matter of giving them bonuses over and above
their lawful salaries and allowances is entirely dependent on the
profits, if any, realized by the Bank from its operations during the
past year. Xxx
In light of these submissions of the petitioner, the contention of the Union
that the granting of bonuses to the employees had ripened into a company
practice that may not be adjusted to the prevailing financial condition of
the Bank has no legal and moral bases. Its fiscal condition having declined,
P a g e | 36
the Bank may not be forced to distribute bonuses which it can no longer
afford to pay and, in effect, be penalized for its past generosity to its
employees.
Private respondents contention, that the decrease in the mid-year and
year-end bonuses constituted a diminution of the employees salaries, is
not correct, for bonuses are not part of labor standards in the same class
as salaries, cost of living allowances, holiday pay, and leave benefits,
which are provided by the Labor Code. This doctrine was reiterated in the
more recent case of Manila Banking Corporation v. NLRC.
Petitioner was not only experiencing a decline in its profits, but was
reeling from tremendous losses triggered by a bank-run which began in
1983. In such a depressed financial condition, petitioner cannot be legally
compelled to continue paying the same amount of bonuses to its
employees. Thus, the conservator was justified in reducing the mid-year
and Christmas bonuses of petitioners employees. To hold otherwise
would be to defeat the reason for the conservatorship which is to preserve
the assets and restore the viability of the financially precarious bank.
Ultimately, it is to the employees advantage that the conservatorship
achieve its purposes for the alternative would be petitioners closure
whereby employees would lose not only their benefits, but their jobs as
well.
PHILIPPINE AIRLINES vs. NLRC
[G.R. No. 123294. 20 October 2010]
FACTS: Private respondent Dr. Fabros was employed as flight surgeon at
Petitioner Company. He was assigned at the PAL Medical Clinic and was
on duty from 4:00 in the afternoon until 12:00 midnight.
On Feb.17, 1994, at around 7:00 in the evening, Dr. FAbros left the clinic
to have his dinner at his residence, which was about 5-minute drive away.
A few minutes later, the clinic received an emergency call from the PAL
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Cargo Services. One of its employees had suffered a heart attack. The
nurse on duty, Mr. Eusebio, called private respondent at home to inform
him of the emergency. The patient arrived at the clinic at 7:50 in the
evening and Mr. Eusebio immediately rushed him to the hospital. When
Dr. Fabros reached the clinic at around 7:51 in the evening, Mr. Eusebio
had already left with the patient to the hospital. The patient died the
following day.
Upon learning about the incident, PAL Medical Director ordered the Chief
Flight Surgeon to conduct an investigation. In his explanation, Dr. Fabros
asserted that he was entitled to a thirty-minute meal break; that he
immediately left his residence upon being informed by Mr. Eusebio about
the emergency and he arrived at the clinic a few minutes later; that Mr.
Eusebio panicked and brought the patient to the hospital without waiting
for him.
Finding private respondents explanation unacceptable, the management
charged private respondent with abandonment of post while on duty. He
denied that he abandoned his post on February 17, 1994. He said that he
only left the clinic to have his dinner at home. In fact, he returned to the
clinic at 7:51 in the evening upon being informed of the emergency. After
evaluating the charge as well as the answer of private respondent, he was
given a suspension for three months effective December 16, 1994.
Private respondent filed a complaint for illegal suspension against
petitioner. On July 16, 1996, the Labor Arbiter rendered a decision
declaring the suspension of private respondent illegal. It also ordered
petitioner to pay private respondent the amount equivalent to all the
benefits he should have received during his period of suspension plus
P500,000.00 moral damages. Petitioner appealed to the NLRC. The NLRC,
however, dismissed the appeal after finding that the decision of the Labor
Arbiter is supported by the facts on record and the law on the matter. The
NLRC likewise denied petitioners motion for reconsideration
P a g e | 37
ISSUE:
1. WON the nullifying of the 3-month suspension by the NLRC
erroneous.
2. WON the awarding of moral damages is proper.
RULING: The petition is PARTIALLY GRANTED. The portion of the
assailed decision awarding moral damages to private respondent is
DELETED. All other aspects of the decision are AFFIRMED.
1. The legality of private respondents suspension: Dr. Fabros left the
clinic that night only to have his dinner at his house, which was
only a few minutes drive away from the clinic. His whereabouts
were known to the nurse on duty so that he could be easily
reached in case of emergency. Upon being informed of Mr.
Acostas condition, private respondent immediately left his home
and returned to the clinic. These facts belie petitioners claim of
abandonment. Petitioner argues that being a full-time employee,
private respondent is obliged to stay in the company premises for
not less than eight (8) hours. Hence, he may not leave the company
premises during such time, even to take his meals. We are not
impressed. Art. 83 and 85 of the Labor Code read: Art. 83. Normal
hours of work. The normal hours of work of any employee shall
not exceed eight (8) hours a day. Health personnel in cities and
municipalities with a population of at least one million
(1,000,000) or in hospitals and clinics with a bed capacity of at
least one hundred (100) shall hold regular office hours for eight
(8) hours a day, for five (5) days a week, exclusive of time for
meals, except where the exigencies of the service require that such
personnel work for six (6) days or forty-eight (48) hours, in which
case they shall be entitled to an additional compensation of at
least thirty per cent (30%) of their regular wage for work on the
sixth day. For purposes of this Article, health personnel shall
include: resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical
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technicians, psychologists, midwives, attendants and all other
hospital or clinic personnel.
Art. 85. Meal periods. Subject to such regulations as the
Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60)
minutes time-off for their regular meals.
Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the
Labor Code further states:
Sec. 7. Meal and Rest Periods. Every employer shall give
his employees, regardless of sex, not less than one (1) hour
time-off for regular meals, except in the following cases when
a meal period of not less than twenty (20) minutes may be
given by the employer provided that such shorter meal period
is credited as compensable hours worked of the employee; (a)
Where the work is non-manual work in nature or does not
involve strenuous physical exertion; (b) Where the
establishment regularly operates not less than sixteen hours
a day; (c) In cases of actual or impending emergencies or
there is urgent work to be performed on machineries,
equipment or installations to avoid serious loss which the
employer would otherwise suffer; and (d) Where the work is
necessary to prevent serious loss of perishable goods. Rest
periods or coffee breaks running from five (5) to twenty (20)
minutes shall be considered as compensable working time.
Thus, the eight-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. Employees are not
prohibited from going out of the premises as long as they return
to their posts on time. Private respondents act, therefore, of going
P a g e | 38
home to take his dinner does not constitute abandonment. 2. The
award of moral damages: Not every employee who is illegally
dismissed or suspended is entitled to damages. As a rule, moral
damages are recoverable only where the dismissal or suspension
of the employee was attended by bad faith or fraud, or constituted
an act oppressive to labor, or was done in a manner contrary to
morals, good customs or public policy In the case at bar, there is
no showing that the management of petitioner company was
moved by some evil motive in suspending private respondent. It
suspended private respondent on an honest, albeit erroneous,
belief that private respondents act of leaving the company
premises to take his meal at home constituted abandonment of
post which warrants the penalty of suspension. Under the
circumstances, we hold that private respondent is not entitled to
moral damages.
LEPANTO CERAMICS INC. vs. LEPANTO CERAMICS EMPLOYEES
ASSOC. [G.R. No. 180866. 02 March 2010]
PLDT vs. JOEY TEVES
[G.R. No. 143511. 15 November 2010]
FACTS: The issue started when petitioner Gamboa questioned the
indirect sale of shares involving almost 12 million shares of the Philippine
Long Distance Telephone Company (PLDT) owned by PTIC to First Pacific.
Thus, First Pacifics common shareholdings in PLDT increased from 30.7
percent to 37 percent, thereby increasing the total common shareholdings
of foreigners in PLDT to about 81.47%. The petitioner contends that it
violates the Constitutional provision on filipinazation of public utility,
stated in Section 11, Article XII of the 1987 Philippine Constitution, which
limits foreign ownership of the capital of a public utility to not more than
40%. Then, in 2011, the court ruled the case in favor of the petitioner,
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hence this new case, resolving the motion for reconsideration for the 2011
decision filed by the respondents.
ISSUE: WON the Court made an erroneous interpretation of the term
capital in its 2011 decision?
RULING: The Court said that the Constitution is clear in expressing its
State policy of developing an economy effectively controlled by Filipinos.
Asserting the ideals that our Constitutions Preamble want to achieve, that
is to conserve and develop our patrimony, hence, the State should fortify
a Filipino-controlled economy. In the 2011 decision, the Court finds no
wrong in the construction of the term capital which refers to the shares
with voting rights, as well as with full beneficial ownership (Art. 12, sec.
10) which implies that the right to vote in the election of directors,
coupled with benefits, is tantamount to an effective control. Therefore, the
Courts interpretation of the term capital was not erroneous. Thus, the
motion for reconsideration is denied.
SAN MIGUEL BREWER SALES FORCE UNION (PTGWO) vs. HON. OPLE,
ET AL. [G.R. No. 5315. 08 February 1989]
FACTS: In 1979, SMC implemented its Complementary Distribution System
(CDS, for brevity) whereby wholesalers can directly get beer products
from any SMC offices. The SMB Union assailed this program because it
violates the CBA particularly the established scheme whereby route
salesmen have been given specific territories to sell beer products. The
CDS scheme would then lower the take home pay of the route salesmen.
SMB Union then sued SMC for unfair labor practices.
ISSUE: WON the CDS is a violation of the CBA.
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RULING: NO. SC ruled that the CDS is an exercise of management
prerogatives whereby the management can implement schemes to
optimize their profit. Further, the CDS provides for a compensation clause
as well for salesmen. San Miguel Corporations offer to compensate the
members of its sales force who will be adversely affected by the
implementation of the CDS by paying them a so-called back adjustment
commission to make up for the commissions they might lose as a result
of the CDS proves the companys good faith and lack of intention to bust
their union.
MANUEL SOSITO vs. AGUINALDO DEVELOPMENT CORPORATION
[G.R. No. 48926. 24 December 1987]
FACTS: Petitioner Manuel Sosito filed for an indefinite leave from the
company on January 16, 1976. Months later, the company underwent a
retrenchment program but offered separation pay to those who had been
in the active service as of June 30, 1976 and had tendered their
resignation not later than July 31, 1976. Petitioner, to avail of the benefits,
submitted his resignation. The company denied him the benefits.
ISSUE: WON petitioner is entitled to the benefits.
RULING: NO. The Court held that the petitioner was not qualified to avail
of the benefits because at the time he submitted his resignation, he was
not in the active service, having been on voluntary indefinite leave. The
petitioner cannot just do as he please to the detriment of the company.
The Court expressed that labor disputes arent necessarily immediately
tipped in favor of labor. The Management also has its own rights, which
must also be afforded the same protection as that of labor. Further, the
Court held that justice is in every case for the deserving, to be dispensed in
the light of the established facts and the applicable law and doctrine.
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