G.R. No. 214230, February 10, 2016 from their wrongful acts.

from their wrongful acts. As an exception, case law instructs that in certain
SECURITY BANK SAVINGS CORPORATION (formerly PREMIERE DEVELOPMENT
BANK)/HERMINIO M. FAMATIGAN, JR., Petitioners, vs. CHARLES M. SINGSON,
Respondent.
PERLAS-BERNABE, J.
FACTS:
Respondent was initially employed by petitioner SBSC as messenger on November
25, 1985. He was promoted several times until he was appointed in June 2007 as
Acting Branch Manager. On March 26, 2008, he was assigned to its Quezon Avenue
Branch under the supervision of Branch Manager Corazon Pinero (Pinero) and held
the position of Customer Service Operations Head (CSOH) tasked with the
safekeeping of its checkbooks and other bank forms. On July 22, 2008, respondent
received a show-cause charging him of violating the bank's Code of Conduct when he
mishandled various checkbooks under his custody. At the scheduled conference
before the Investigating Committee, respondent readily admitted having allowed the
Branch Manager (i.e., Pinero) to bring out of the bank's premises the missing
checkbooks and other bank forms on the justification that the latter was a senior
officer with lengthy tenure and good reputation. Pending investigation, respondent
was transferred to SBSC's Pedro Gil Branch. He was again issued a memorandum
directing him to explain his inaccurate reporting of some Returned Checks and Other
Cash Items (RCOCI) which amounted to P46,279.33. Dismayed by his frequent
transfer to different branches, respondent tendered his resignation on November 10,
2008, effective thirty (30) days from submission. However, SBSC rejected the same in
view of its decision to terminate his employment on November 11, 2008 on the
ground of habitual neglect of duties.
Respondent instituted a complaint for illegal dismissal with prayer for backwages,
damages, and attorney's fees against petitioners before the NLRC. The Labor Arbiter
(LA) dismissed the complaint and accordingly, declared respondent to have been
terminated from employment for a valid cause. The NLRC affirmed the LA decision,
ruling that the grant of separation pay was justified on equitable grounds such as
respondent's length of service, and that the cause of his dismissal was not due to
gross misconduct or that reflecting on his moral character but rather, a weakness of
disposition and grievous error in judgment. The CA denied the petition and sustained
the award of separation pay.
circumstances, the grant of separation pay or financial assistance to a legally
dismissed employee has been allowed as a measure of social justice or on grounds of
equity.
The Court ruled that separation pay shall be allowed as a measure of social justice
only in those instances where the employee is validly dismissed for causes other than
serious misconduct or those reflecting on his moral character. To reiterate the ruling
in Toyota, labor adjudicatory officials and the CA must demur the award of separation
pay based on social justice when an employee's dismissal is based on serious
misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful
breach of trust; or commission of a crime against the person of the employer or his
immediate family - grounds under Article 282 of the Labor Code that sanction
dismissals of employees. In the case at bar, respondent's established act of
repeatedly allowing Branch Manager Pinero to bring the checkbooks and bank forms
outside of the bank's premises in violation of the company's rules and regulations had
already been declared by the LA to be gross and habitual neglect of duty under
Article 282 of the Labor Code, which finding was not contested on appeal by
respondent. The banking business is highly sensitive with a fiduciary duty towards its
client and the public in general, such that central measures must be strictly observed.
It is undisputed that respondent failed to perform his duties diligently, and therefore,
not only violated established company policy but also put the bank's credibility and
business at risk. Hence, under these circumstances, the award of separation pay
based on social justice would be improper.
WHEREFORE, the petition is GRANTED. The Decision dated May 21, 2014 of the
Court of Appeals in CA-G.R. SP No. 121053 is hereby REVERSED and SET ASIDE
deleting the award of separation pay in favor of Charles M. Singson.

ISSUE:
Whether or not the CA erred in upholding the award of separation pay as financial
assistance to respondent despite having been validly dismissed

HELD:
Separation pay is warranted when the cause for termination is not attributable to the
employee's fault, such as those provided in Articles 298 and 299 of the Labor Code,
as well as in cases of illegal dismissal where reinstatement is no longer feasible. On
the other hand, an employee dismissed for any of the just causes enumerated under
Article 297 of the same Code, being causes attributable to the employee's fault, is
not, as a general rule, entitled to separation pay. The non-grant of such right to
separation pay is premised on the reason that an erring employee should not benefit
G.R. No. 177680, January 13, 2016
JENNIFER C. LAGAHIT, Petitioner, vs. PACIFIC CONCORD CONTAINER
LINES/MONETTE CUENCA (BRANCH MANAGER), Respondents.
BERSAMIN, J.
FACTS:
In February 2000, respondent, a domestic corporation engaged in cargo forwarding,
hired the petitioner as an Account Executive/Marketing Assistant and later promoted
her as a sales manager with the monthly salary rate of P25,000.00, and provided her
with a brand new Toyota Altis plus gasoline allowance. On November 8, 2002,
petitioner received a text message from Cuenca saying petitioner is no longer
connected with respondent. On the same day, the petitioner learned from clients and
friends that the respondents had disseminated notices, flyers and memos informing
all clients of Pacific Concord that she was no longer connected with the company as
of November 8, 2002. In November 26, 2002, the petitioner filed her complaint for
constructive dismissal. In their position paper, the respondents denied having
terminated the petitioner despite the fact that there were valid grounds to do so.
They insisted that the petitioner had betrayed the trust and confidence reposed in her
when she: (a) used the company-issued vehicle for her own personal interest; (b)
failed to achieve her sales quota, and to enhance and develop the Sales Department;
(c) enticed her marketing assistant, Jo Ann Otrera, to resign and join her in
transferring to another forwarding company; (d) applied for other employment during
office hours and using company resources; (e) solicited and offered the services of
Seajet International, Inc. during her employment with Pacific Concord; (f) received a
personal commission from Wesport Line, Inc. for container shipments; and (g)
illegally manipulated and diverted several containers to Seajet International. The
Labor Arbiter ruled that the respondents were not able to prove that the petitioner
had committed acts constituting betrayal of trust; that they had not informed her
prior to her dismissal of the offenses she had supposedly committed; and that owing
to the illegality of the dismissal, they were liable for backwages and separation pay.
On appeal, the NLRC affirmed the ruling of the Labor Arbiter but modified the award
of separation pay. On May 10, 2006, the CA promulgated its decision granting the
respondents’ petition for certiorari, and annulling the decision of the NLRC. It
pronounced that there were sufficient justifications to terminate the petitioner’s
services for disloyalty and willful breach of trust.
ISSUE:
Whether or not the court of appeals committed grave abuse of discretion in giving
undue weight and credence to the respondents’ latest defense
HELD:
In cases of unlawful dismissal, the employer bears the burden of proving that the
termination was for a valid or authorized cause, but before the employer is expected
to discharge its burden of proving that the dismissal was legal, the employee must
first establish by substantial evidence the fact of her dismissal from employment. The
facts and circumstances before and after the petitioner’s severance from her
employment on November 8, 2002 did not show her resolute intention to relinquish
her job. In that regard, every resignation presupposes the existence of the employer-
employee relationship; hence, there can be no valid resignation after the fact of
termination of the employment simply because the employee had no employer-
employee relationship to relinquish.
At any rate, the employer must present clear and convincing proof of an actual
breach of duty committed by the employee by establishing the facts and incidents
upon which the loss of confidence in the employee may fairly be made to rest. The
required amount of evidence for doing so is substantial proof. With these guidelines
in mind, we cannot hold that the evidence submitted by the respondents (consisting
of the three affidavits) sufficiently established the disloyalty of the petitioner. The
affidavits did not show how she had betrayed her employer’s trust.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and
SETS ASIDE the decision promulgated on May 10, 2006 by the Court of Appeals;
REINSTATES the decision of the National Labor Relations Commission rendered on
December 15, 2004 subject to the MODIFICATION that the total monetary awards
shall earn interest at the rate of 6% per annum from the finality of this decision until
full satisfaction; and ORDERS the respondents to pay the costs of suit.
COCOPLANS, INC. and CAESAR T. MICHELENA, Petitioners, vs. MA.
SOCORRO R. VILLAPANDO, Respondent.
PERALTA, J.
FACTS:
Respondent Ma. Socorro R. Villapando, began working as a Financial Advisor
for petitioner in1995. On October 11, 2000, she was eventually promoted to
Division Head/Senior Sales Manager. On November 4, 2002, however, her
employment was terminated by Cocoplans, through its President, Caesar T.
Michelena, on the alleged ground that she was deliberately influencing
people to transfer to another company thereby breaching the trust and
losing the confidence given to her by Cocoplans.5 Consequently, Villapando
filed an action for illegal dismissal alleging that she was dismissed without
the just cause mandated by law. Villapando filed an action for illegal
dismissal alleging that she was dismissed without the just cause mandated
by law. On the other hand, respondents allege that they have discovered
that the Complainant has instigated the Sales Force of COCOPLANS in her
area of responsibility, to either slow down sales production or completely
stop selling, then join a mass resignation and transfer to a competitor
company which was allegedly much better than COCO PLANS. Attached to
the position paper is the notice to the Complainant dated October 4, 2002
regarding the meeting scheduled by the Committee on Employee Discipline
setting the date, October 10, 2002 for Complainant to give her explanation,
and putting her on preventive suspension for three (3) weeks.
On January 30, 2004, the Labor Arbiter ruled in favor of Villapando finding
that she was illegally terminated from her employment.1âwphi1 According
to the Labor Arbiter, the initial investigation conducted by the Committee
on Employee Discipline was merely to determine the truth about the
allegations of Villapando in her resignation letter that she was being forced
to resign. However, the NLRC disagreed with the Labor Arbiter in its
Decision holding that the matter of resignation is a non-issue as the
termination of Villapando's employment was affected for reasons other
than her resignation.
ISSUE:
Whether or not private respondent was terminated for just cause
HELD:
Settled is the rule that to constitute a valid dismissal from employment, two
(2) requisites must concur, viz.: (a) the employee must be afforded due
process, i.e., he must be given an opportunity to be heard and defend
himself; and (b) the dismissal must be for a valid cause, as provided in
Article 282 of the Labor Code, or for any of the authorized causes under
Articles 283 and 284 of the same Code. 28 In the case before the Court, it is
already undisputed that petitioners duly afforded Villapando the
opportunity to be heard and defend herself, thereby complying with the
first requisite. Article 282( c) of the Labor Code provides that an employer
may terminate an employment for fraud or willful breach by the employee
of the trust reposed in him by his employer or duly authorized
representative. As firmly entrenched in our jurisprudence, loss of trust and
confidence, as a just cause for termination of employment, is premised on
the fact that an employee concerned holds a position where greater trust is
placed by management and from whom greater fidelity to duty is
correspondingly expected.
In the instant case, the Court does not find the evidence presented by
petitioners to be substantial enough to discharge the burden of proving that
Villapando was, indeed, dismissed for just cause. The Court is of the view
that a single Joint Affidavit of doubtful probative value can hardly be
considered as substantial. Had petitioners provided the Court with other
convincing proof, apart from said Joint Affidavit, that Villapando had,
indeed, wilfully influenced her subordinates to transfer to a competing
company, their claims of loss of confidence could have been sustained. As
the Court now sees it, petitioners terminated the services of Villapando on
the mere basis of the Joint Affidavit executed by Ms. Perez and Mr.
Sandoval, which, as previously discussed, is put in doubt by conflicting
evidence. Hence, in the absence of sufficient proof, the Court finds that
petitioners failed to discharge the onus of proving the validity of Villapando'
s dismissal.
WHEREFORE, premises considered, the instant petition is DENIED. The
assailed Decision dated February 4, 2008 and Resolution dated May 27,
2008 of the Court of Appeals in CA-G.R. SP No. 88759 are AFFIRMED with
MODIFICATION. Petitioners Cocoplans, Inc. and Caesar T. Michelena are
hereby ORDERED to PAY respondent Ma. Socorro R. Villapando the
following: (I) backwages computed from the date of her dismissal on
November 4, 2002 up to the finality of this Decision; (2) separation pay in
lieu of reinstatement computed from the time of her engagement up to the
finality of this Decision; and (3) legal interest at six percent (6%) per annum
of the total monetary awards, computed from the finality of this Decision
until full satisfaction thereof.
11. UNILEVER PHILIPPINES, INC., petitioner, vs. MARIA RUBY M. RIVERA,
respondent.
FACTS:
- Rivera was employed as Unilever’s Area Activation Executive for
Area 9 South in the cities of Cotabato and Davao
- She was primarily tasked with managing the sales, distribution and
promotional activities in her area and supervising Ventureslink
International, Inc. (Ventureslink)
- Unilever enforces a strict policy that every trade activity must be
accompanied by a Trade Development Program (TDP) and that the
allocated budget for a specific activity must be used for such activity
only.
- in 2007, Unilever’s internal auditor conducted a random audit and
found out that there were fictitious billings and fabricated receipts
supposedly from Ventureslink amounting to P11,200,000.00. It was
also discovered that some funds were diverted from the original
intended projects. Upon further verification, Ventureslink reported
that the fund deviations were upon the instruction of Rivera.
- Unilever issued a show-cause notice to Rivera asking her to explain
the following charges, to wit: a)Conversion and Misappropriation of
Resources; b) Breach of Fiduciary Trust; c) Policy Breaches; and d)
Integrity Issues
- Responding through an email, Rivera admitted the fund diversions
and insisted that the diverted funds were all utilized in the
company’s promotional ventures in her area of coverage.
- Unilever found Rivera guilty of serious breach of the company’s
Code of Business Principles compelling it to sever their professional
relations.
- Rivera asked for reconsideration and requested Unilever to allow
her to receive retirement benefits having served the company for
fourteen (14) years already. Unilever denied her request, reasoning
that the forfeiture of retirement benefits was a legal consequence
of her dismissal from work
- Rivera filed a complaint, Labor Arbiter dismissed her complaint and
denied her claim for retirement benefits but ordered Unilever to
pay a proportionate 13th month pay and the corresponding cash
equivalent of her unused leave credits
- NLRC partially granted Rivera’s prayer. Unilever was ordered to pay
her retirement benefits and separation pay
- CA affirmed with modification the NLRC resolution. the CA awarded
separation pay in her favor as a measure of social justice.
ISSUE: WON RIVERA, AS A VALIDLY DISMISSED EMPLOYEE, IS ENTITLED TO
AN AWARD OF SEPARATION PAY.
RULING:
- NO, RIVERA IS NOT ENTITLED
- As a general rule, an employee who has been dismissed for any of
the just causes enumerated under Article 28215 of the Labor Code
is not entitled to a separation pay.16 Section 7, Rule I, Book VI of
the Omnibus Rules Implementing the Labor Code provides:
Sec. 7. Termination of employment by employer.—The just causes for
terminating the services of an employee shall be those provided in Article
282 of the Code. The separation from work of an employee for a just cause
does not entitle him to the termination pay provided in the Code, without
prejudice, however, to whatever rights, benefits and privileges he may have
under the applicable individual or collective agreement with the employer
or voluntary employer policy or practice.
 - In exceptional cases the Supreme Court has granted separation pay
to a legally dismissed employee as an act of “social justice” or on
“equitable grounds.” In both instances, it is required that the
dismissal (1) was not for serious misconduct; and (2) did not reflect
on the moral character of the employee.
- Separation pay is only warranted when the cause for termination is
not attributable to the employee’s fault, such as those provided in
Articles 283 and 284 of the Labor Code, as well as in cases of illegal
dismissal in which reinstatement is no longer feasible
Serrano vs. NLRC / ISETANN - GR No. 117040 Case Digest
FACTS:
Serrano was a regular employee of Isetann Department Store as the head of
Security Checker. In 1991, as a cost-cutting measure, Isetann phased out its
entire security section and engaged the services of an independent security
agency. Petitioner filed a complaint for illegal dismissal among others. Labor
arbiter ruled in his favor as Isetann failed to establish that it had retrenched
its security section to prevent or minimize losses to its business; that private
respondent failed to accord due process to petitioner; that private
respondent failed to use reasonable standards in selecting employees
whose employment would be terminated. NLRC reversed the decision and
ordered petitioner to be given separation pay.
RULING:
An employer’s good faith in implementing a redundancy program is not
necessarily put in doubt by the availment of the services of an independent
contractor to replace the services of the terminated employees to promote
economy and efficiency. Absent proof that management acted in a
malicious or arbitrary manner, the Court will not interfere with the exercise
of judgment by an employer.
If termination of employment is not for any of the cause provided by law, it
is illegal and the employee should be reinstated and paid backwages. To
contend that even if the termination is for a just cause, the employee
concerned should be reinstated and paid backwages would be to amend Art
279 by adding another ground for considering dismissal illegal.
If it is shown that the employee was dismissed for any of the causes
mentioned in Art 282, the in accordance with that article, he should not be
reinstated but must be paid backwages from the time his employment was
terminated until it is determined that the termination of employment is for
a just cause because the failure to hear him before he is dismissed renders
the termination without legal effect.

ISSUE:

Whether or not the hiring of an independent security agency by the private

respondent to replace its current security section a valid ground for the
dismissal of the employees classed under the latter.
JENNY M. AGABON v. NLRC, GR No. 158693, 2004-11-17
Facts:
Private respondent Riviera Home Improvements, Inc. is engaged in the
business of selling and installing ornamental and construction materials. It
employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board
and cornice installers on January 2, 1992[2] until February 23, 1999 when
they were dismissed for abandonment of work.
Petitioners then filed a complaint for illegal dismissal and payment of
money claims[3] and on December 28, 1999, the Labor Arbiter rendered a
decision declaring the dismissals illegal and ordered private respondent to
pay the monetary claims.
On appeal, the NLRC reversed the Labor Arbiter because it found that the
petitioners had abandoned their work, and were not entitled to backwages
and separation pay.
Upon denial of their motion for reconsideration, petitioners filed a petition
for certiorari with the Court of Appeals.
The Court of Appeals in turn ruled that the dismissal of the petitioners was
not illegal because they had abandoned their employment but ordered the
payment of money claims.
Petitioners also claim that private respondent did not comply with the twin
requirements of notice and hearing.
Private respondent, on the other hand, maintained that petitioners were
not dismissed but had abandoned their work.
Issues:
whether petitioners were illegally dismissed.
Ruling:
To dismiss an employee, the law requires not only the existence of a just
and valid cause but also enjoins the employer to give the employee the
opportunity to be heard and to defend himself.
Abandonment is the deliberate and unjustified refusal of an employee to
resume his employment.[14] It is a form of neglect of duty, hence, a just
cause for termination of employment by the employer.[15] For a valid
finding... of abandonment, these two factors should be present: (1) the
failure to report for work or absence without valid or justifiable reason; and
(2) a clear intention to sever employer-employee relationship, with the
second as the more determinative factor which is manifested by... overt
acts from which it may be deduced that the employees has no more
intention to work. The intent to discontinue the employment must be
shown by clear proof that it was deliberate and unjustified.
an employee who deliberately absented from work without leave or
permission from his employer, for the purpose of looking for a job
elsewhere, is considered to have abandoned his job.
The dismissal should be upheld because it was established that the
petitioners abandoned their jobs to work for another company. Private
respondent, however, did not follow the notice requirements and instead...
argued that sending notices to the last known addresses would have been
useless because they did not reside there anymore. Unfortunately for the
private respondent, this is not a valid excuse because the law mandates the
twin notice requirements to the employee's last... known
address.[21] Thus, it should be held liable for non-compliance with the
procedural requirements of due process.
that in cases involving dismissals for cause but without observance of the
twin requirements of notice and hearing, the better rule is to abandon the
Serrano doctrine and to follow Wenphil by holding that the dismissal was
for just cause but imposing sanctions on the employer. Such sanctions,
however, must be stiffer than that imposed in Wenphil.
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights
Under the Civil Code, nominal damages is adjudicated in order that a right
of the plaintiff, which has been violated or invaded by the defendant, may
be vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
The violation of the petitioners' right to statutory due process by the private
respondent warrants the payment of indemnity in the form of nominal
damages.
Considering the prevailing circumstances in the case at bar, we deem it
proper to fix it at P30,000.00.
Riviera Home Improvements, Inc. is further ORDERED to pay each of the
petitioners the amount of P30,000.00 as nominal damages for non-
compliance with statutory due process.
Principles:
Labor Law
Where the dismissal is for a just cause, as in the instant case, the lack of
statutory due process should not nullify the dismissal, or render it illegal, or
ineffectual. However, the employer should indemnify the employee for the
violation of his statutory rights
Political Law... we affirmed the presumption that all constitutional
provisions are self-executing.
to declare otherwise would result in the pernicious situation wherein by
mere inaction and... disregard by the legislature, constitutional mandates
would be rendered ineffectual.
In self-executing constitutional provisions, the legislature may still enact
legislation to facilitate the exercise of powers directly granted by the
constitution, further the operation of such a provision, prescribe a practice
to be used for its enforcement, provide... a convenient remedy for the
protection of the rights secured or the determination thereof, or place
reasonable safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for the
violation of a self-executing... constitutional provision does not render such
a provision ineffective in the absence of such legislation. The omission from
a constitution of any express provision for a remedy for enforcing a right or
liability is not necessarily an indication that it was not intended to be... self-
executing. The rule is that a self-executing provision of the constitution does
not necessarily exhaust legislative power on the subject, but any legislation
must be in harmony with the constitution, further the exercise of
constitutional right and make it more available.
Subsequent legislation however does not necessarily mean that the subject
constitutional provision is not, by itself, fully enforceable.
Thus, the constitutional mandates of protection to labor and security of
tenure may be deemed as self-executing in the sense that these are
automatically acknowledged and observed without need for any enabling
legislation. However, to declare that the constitutional provisions... are
enough to guarantee the full exercise of the rights embodied therein, and
the realization of ideals therein expressed, would be impractical, if not
unrealistic. The espousal of such view presents the dangerous tendency of
being overbroad and exaggerated. The guarantees... of "full protection to
labor" and "security of tenure", when examined in isolation, are facially
unqualified, and the broadest interpretation possible suggests a blanket
shield in favor of labor against any form of removal regardless of
circumstance. This interpretation... implies an unimpeachable right to
continued employment-a utopian notion, doubtless-but still hardly within
the contemplation of the framers. Subsequent legislation is still needed to
define the parameters of these guaranteed rights to ensure the protection
and promotion, not... only the rights of the labor sector, but of the
employers' as well. Without specific and pertinent legislation, judicial
bodies will be at a loss, formulating their own conclusion to approximate at
least the aims of the Constitution.
Ultimately, therefore, Section 3 of Article XIII cannot, on its own, be a
source of a positive enforceable right to stave off the dismissal of an
employee for just cause owing to the failure to serve proper notice or
hearing. As manifested by several framers of the 1987
Constitution, the provisions on social justice require legislative enactments
for their enforceability.
QUIRO-QUIRO vs. BALAGTAS CREDIT
PETITIONER Emma H. Quiro-quiro filed a complaint for illegal dismissal and
damages against respondent Balagtas Credit Cooperative & Community
Development Inc. (BCCCDI). The Labor Arbiter dismissed her complaint for
lack of merit. The National Labor Relations Commission (NLRC) reversed the
decision of the Labor Arbiter and awarded her backwages and separation
pay. When the decision of the NLRC became final, respondent BCCCDI
offered to pay the total amount of P452,730.34 representing the monetary
award.
BCCCDI went to the Court of Appeals (CA) on a petition for certiorari. The CA
reversed the decision of the NLRC and reinstated the decision of the Labor
Arbiter with the modification that Quiro-quiro be awarded P30,000 in
nominal damages.
Quiro-quiro went to the Supreme Court and argued that BCCCDI’s offer to
pay the total amount of P452,730.34 representing the monetary award of
the NLRC constitutes a compromise agreement that “operates to end
litigation and put the case to rest.” Does this argument find merit?
Ruling: No.
We disagree. Respondent’s offer to pay the sum of P452,730.34
representing the monetary award of the NLRC is not in the nature of a
compromise agreement, which effectively puts an end to this controversy.
According to the respondent, the underlying reason for the offer of
payment was the petitioner’s motion for the issuance of the writ of
execution, leaving respondent without any recourse but to pay. In other
words, such payment was in compliance with the writ of execution issued
by the NLRC.
Section 14, Rule VII of the NLRC Rules of Procedure provides that “the
decisions, resolutions or orders of the Commission shall become final and
executory after ten (10) calendar days from receipt thereof x x x.” Section 1,
Rule XI of the same NLRC Rules provides that “a writ of execution may be
issued motu proprio or on motion, upon a decision or order that has
become final and executory.”
The execution of the final and executory decision or resolution of the NLRC
must proceed despite the pendency of a petition for certiorari, unless it is
restrained by the proper court. Since the Court of Appeals did not issue any
temporary restraining order or writ of injunction against the NLRC decision,
such judgment became final and executory after 10 calendar days from its
receipt by counsel or party.
Consequently, petitioner moved for the issuance of the writ of execution. As
pointed out by respondent, the issuance of the writ of execution and notice
of garnishment forced respondent to pay the monetary award of the NLRC
to avoid its bank account being frozen and to prevent the cessation of its
operations. Clearly, there is no intent on the part of respondent to enter
into a compromise agreement to put an end to this dispute. Otherwise,
respondent could have simply filed a motion to withdraw its petition before
the Court of Appeals, specifically manifesting the execution by the parties of
a compromise agreement. On the contrary, respondent pursued its appeal
before the Court of Appeals and vigorously opposed the petition in this
Court. (Carpio, J.; SC 2nd Division, Emma H. Quiro-quiro vs. Balagtas Credit
Cooperative & Community Development, Inc., G.R. No. 209921, January 13,
2016).
Julito Sagales vs Rustan’s Commercial Corporation
In October 1970, Julito Sagales was employed by Rustan’s Commercial
Corporation as chief cook in one of Rustan’s restaurants. He was an
excellent employee receiving numerous awards. However, in June 2001,
Sagales was caught stealing a bag of squid heads worth P50.00. Sagales was
not able to produce a receipt for the said squid heads at that time. In the
same month, Sagales underwent inquest proceedings for qualified theft in
the local fiscal’s office. In the said proceeding, Sagales was able to produce
the receipt for the said squid heads. He also averred that the squid heads
are actually scraps of the restaurant and are not fit to be served to
customers; so if indeed he really wanted to steal and profit, he would have
stolen better quality squid heads. The fiscal dismissed the case against
Sagales for lack of evidence.
the time of this decision. So instead of reinstatement, Sagales was awarded
separation pay computed at one-month salary for every year of service;
backwages were also awarded.
The Supreme Court also emphasized: the right of every employee to
security of tenure is all the more secured by the Labor Code by providing
that “the employer shall not terminate the services of an employee except
for a just cause or when authorized” by law. However, the employer, in
exercising its right to terminate employees for just and authorized causes
must impose a penalty commensurate with the act, conduct, or omission
imputed to the employee.

But at the end of the same month, the legal division of Rustan conducted its
own investigation where Sagales and his lawyer appeared. The security
guards testified against Sagales. The chief cashier also testified that the
squid heads were unpaid. In July 2001, after investigation by Rustan, Sagales
was terminated.
https://www.aseanlip.com/philippines/employment/judgments/sumifru-
philippines-corporation-v-bernabe-baya-/AL16988
(NO CASE DIGEST)

ISSUE: Whether or not Sagales’s termination is valid.

HELD: No. Termination is too harsh in this case. The Supreme Court took
into consideration the various circumstances attendant to the case. Sagales
has worked for Rustan for almost 31 years; (2) his tireless and faithful CHATEAU ROYALE SPORTS AND COUNTRY CLUB, INC., Petitioner, v.
service is attested by the numerous awards he has received; (3) the RACHELLE G. BALBA and MARINEL N. CONSTANTE, Respondents
incident in June 2001 was his first offense in his long years of service; (4) the
value of the squid heads worth P50.00 is negligible; (5) Rustan practically did G.R. No. 197492, January 18, 2017
not lose anything as the squid heads were considered scrap goods and
usually thrown away in the wastebasket; (6) the ignominy and shame
undergone by Sagales in being imprisoned, however momentary, is TOPIC: Constructive dismissal
punishment in itself; and (7) Sagales was already preventively suspended for
one month, which is already a commensurate punishment for the infraction PONENTE: Bersamin
committed. Truly, Sagales has more than paid his due. Nevertheless, it is
useless to reinstate Sagales because he should have been retired already at
FACTS:
Petitioner Chateau Royale hired respondents as Account Executives.
They were then promoted to Account Managers after almost a year. As part
of their duties, respondents were instructed by the Director of Sales and
Marketing to forward all proposals, event orders and contracts for an
orderly and systematic bookings in the operation of the petitioner’ s
business. However, they failed to comply with the directive. Accordingly, a
notice to explain was served on them, to which they promptly responded.
After investigation, respondents were found to have committed acts of
insubordination, and that they were suspended for seven (7) days.
However, said suspension order was lifted before its implementation.
Respondents then filed a complaint for illegal suspension and non-
payment of allowances and commissions. Respondents amended
their complaint to include constructive dismissal based on their information
from the Chief Financial Officer of the petitioner on the latter’s plan to
transfer them to the Manila Office. The proposed transfer was prompted by
the shortage of personnel at the Manila Office as a result of the resignation
of three account managers and the director of sales and marketing. Despite
attempts to convince them to accept the transfer to Manila, they declined
because their families were living in Nasugbu, Batangas.
LA found that respondents had been constructively dismissed. NLRC
reversed the same and dismissed the complaint for lack of merit. CA granted
the petition for certiorari and set aside NLRC’s decision.
ISSUE:
Whether or not the transfer of respondents constitutes constructive
dismissal.
HELD: NO.
The Supreme Court held that the petitioner was able to discharge its
burden, and thus established that, contrary to the claim of the respondents
that they had been constructively dismissed, their transfer had been an
exercise of the petitioner’s legitimate management prerogative.
First, the resignations of the account managers and the director of
sales and marketing in the Manila office brought about the immediate need
for their replacements with personnel having commensurate experiences
and skills. With the positions held by the resigned sales personnel being
undoubtedly crucial to the operations and business of the petitioner, the
resignations gave rise to an urgent and genuine business necessity that
fully warranted the transfer from the Nasugbu, Batangas office to the
main office in Manila of the respondents, undoubtedly the best suited to
perform the tasks assigned to the resigned employees because of their
being themselves account managers who had recently attended seminars
and trainings as such.
Secondly, although the respondents’ transfer to Manila might be
potentially inconvenient for them because it would entail additional
expenses on their part aside from their being forced to be away from
their families, it was neither unreasonable nor oppressive. The petitioner
rightly points out that the transfer would be without demotion in rank, or
without diminution of benefits and salaries. Instead, the transfer would
open the way for their eventual career growth, with the corresponding
increases in pay.
Thirdly, the respondents did not show by substantial evidence that
the petitioner was acting in bad faith or had ill-motive in ordering their
transfer. In contrast, the urgency and genuine business necessity justifying
the transfer negated bad faith on the part of the petitioner.
Lastly, the respondents, by having voluntarily affixed their
signatures on their respective letters of appointment, acceded to the
terms and conditions of employment incorporated therein. One of the
terms and conditions thus incorporated was the prerogative of
management to transfer and re-assign its employees from one job to
another “as it may deem necessary or advisable.”
http://lawyerly.ph/juris/view/cf47a
(NO DIGEST INIVERSAL CANNING)
DIVINE WORD COLLEGE OF LOAG VS MINA
Almirante: Constructive dismissal Friday, October 28, 2016 By DOMINADOR
ALMIRANTE LABOR CASE DIGEST PETITIONER Divine Word College of Laoag
(DWCL) is a non-stock educational institution offering Catholic education to
the public. It is run by the Society of Divine Word (SVD), a congregation of
Catholic priests. It first employed respondent Delfin A. Mina in 1971 as a
high school teacher, and later on a high school principal at the Academy of
St. Joseph (ASJ), a school run by the SVD. On June 1, 1979, he transferred to
DWCL and was accorded a permanent status. In 2002, he was transferred to
DWCL’s college department as an associate professor III. On June 1, 2003,
he was assigned as the college laboratory custodian of the school of nursing
and was divested of his teaching load, effective June 1, 2003 until May 21,
2004, subject to automatic termination without need for any further
notification. He was the only one among several teachers transferred to the
college department who was divested of teaching load. In early June 2004,
Mina was offered early retirement by DWCL. He initially declined the offer.
He later received a memorandum from the office of DWCL’s dean
enumerating specific acts of gross or habitual negligence, insubordination
and reporting for work under the influence of alcohol. Sensing that it was
pointless to continue employment with DWCL, he requested that his
retirement date be adjusted to September 2004 to avail of better benefits
which was denied. Instead, he was paid only P275,513.10 as retirement pay.
It was made to appear that his services were terminated by reason of
redundancy to avoid any tax implications. He was also made to sign a deed
of waiver and quitclaim. On Sept. 21, 2004, Mina filed a case for illegal
dismissal and recovery of separation pay and other money claims. Can his
case prosper? Ruling: Yes. Constructive dismissal is a dismissal in disguise.
There is cessation of work in constructive dismissal because ‘“continued
employment is rendered impossible, unreasonable or unlikely, as an offer
involving a demotion in rank or a diminution in pay’ and other benefits.” To
be considered as such, an act must be a display of utter discrimination or
insensibility on the part of the employer so intense that it becomes
unbearable for the employee to continue with his employment. The law
recognizes and resolves this situation in favor of employees in order to
protect their rights and interests from the coercive acts of the employer. In
this case, Mina’s transfer clearly amounted to a constructive dismissal. For
almost 22 years, he was a high school teacher enjoying a permanent status
in DWCL’s high school department. In 2002, he was appointed as an
associate professor at the college department but shortly thereafter, or on
June 1, 2003, he was appointed as a college laboratory custodian, which is a
clear relegation from his previous position. Not only that. He was also
divested of his teaching load. His appointment even became contractual in
nature and was subject to automatic termination after one year “without
any further notification.” Aside from this, Mina was the only one among the
high school teachers transferred to the college department who was
divested of teaching load. More importantly, DWCL failed to show any
reason for Mina’s transfer and that it was not unreasonable, inconvenient,
or prejudicial to him. Also, the CA correctly ruled that Mina’s appointment
as laboratory custodian was a demotion. There is demotion when an
employee occupying a highly technical position requiring the use of one’s
mental faculty is transferred to another position, where the employee
performed mere mechanical work – virtually a transfer from a position of
dignity to a servile or menial job. The assessment whether Mina’s transfer
amounted to a demotion must be done in relation to his previous position,
that is, from an associate college professor, he was made a keeper and
inventory-taker of laboratory materials. Clearly, Mina’s new duties as
laboratory custodian were merely perfunctory and a far cry from his
previous teaching job, which involved the use of his mental faculties. And
while there was no proof adduced showing that his salaries and benefits
were diminished, there was clearly a demotion in rank. As was stated in
Blue Dairy Corporation v. NLRC, 373 Phil. 179 (1999), “it was virtually a
transfer from a position of dignity to a servile or menial job.” (Reyes, J., SC
Third Division, Divine Word College Of Laoag vs. Shirley B. Mina, as Heir-
Substitute of the late Delfin A. Mina, G.R. No. 195155, April 13, 2016).
ECHO 2000 COMMERCIAL CORPORATION v. OBRERO FILIPINO-ECHO 2000
G.R. No. 214092, January 11, 2016
FACTS:
Respondents Cortes and Somido were employees of Echo 2000 Commercial
Corporation. Somido was a Warehouse Checker, while Cortes was a Forklift
Operator. Echo, in the exercise of its management prerogative, decided to
re-assign the staff after they received information about shortages in peso
value arising from the movement of products to and from its warehouse.
A memorandum was issued informing the respondents of their transfer to
the Delivery Section which entails no change in ranks, status and salaries.
Somido and Cortes declined Echo's offer to be promoted as "Delivery
Supervisor." They explained that they were already happy and content with
their current positions, as they also lacked prior supervisory experience.
Echo, through its General Manager and without the consent of the
respondents, then informed respondents of their designations as Delivery
Supervisors. Echo alleged that the respondents did not perform the new
duties assigned to them. They clarified that the respondents were
designated as "Delivery Coordinators" and not "Supervisors." However,
respondents continued to refuse performing their new duties. Thus, the
Memoranda dated August 8, 2009 informed them of their termination from
employment by reason of their repeated refusal to acknowledge receipt of
Echo's memoranda and flagrant defiance to assume the duties of Delivery
Coordinators.
ISSUE:
Whether or not the transfer made by Echo is a promotion.
RULING:
Yes. The Court ruled that the offer of transfer is, in legal contemplation, a
promotion, which the respondents validly refused. However, such refusal
cannot be the basis for the respondents' dismissal from service.
A transfer is a movement from one position to another which is of
equivalent rank, level or salary, without break in service. Promotion, on the
other hand, is the advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and usually
accompanied by an increase in salary.
An employee is not bound to accept a promotion, which is in the nature of a
gift or reward. Refusal to be promoted is a valid exercise of a right. Such
exercise cannot be considered in law as insubordination, or willful
disobedience of a lawful order of the employer, hence, it cannot be the
basis of an employee's dismissal from service.
In the case at bench, a Warehouse Checker and a Forklift Operator are rank-
and-file employees. On the other hand, the job of a Delivery
Supervisor/Coordinator requires the exercise of discretion and judgment
from time to time. A Delivery Supervisor/Coordinator's duties and
responsibilities are apparently not of the same weight as those of a
Warehouse Checker or Forklift Operator. Hence, despite the fact that no
salary increases were effected, the assumption of the post of a Delivery
Supervisor/Coordinator should be considered a promotion. The
respondents' refusal to accept the same was therefore valid.
http://lawyerly.ph/juris/view/cf2fc
(NO CASE DIGEST SOLIMAN SEC SERVICES VS CA)
Republic v. Pacheo
G.R. No. 178021 : January 25, 2012
REPUBLIC OF THE PHILIPPINES, represented by the CIVIL SERVICE
COMMISSION, Petitioner,v.MINERVA M.P. PACHEO, Respondent.
MENDOZA, J.:
FACTS:
Pacheo was a Revenue Attorney IV, Assistant Chief of the Legal Division of
the Bureau of Internal Revenue(BIR) in Revenue Region No. 7 (RR7), Quezon
City. The BIR issued Revenue Travel Assignment Order (RTAO)No. 25-2002,
ordering the reassignment of Pacheo as Assistant Chief, Legal Division from
RR7 in Quezon City to RR4 in San Fernando, Pampanga.
Pacheo questioned the reassignment through her Letter addressed to Rene
G. Banez, then Commissioner of Internal Revenue (CIR). She considered her
transfer from Quezon City to Pampanga as amounting to a constructive
dismissal.
Due to the then inaction of the BIR, Pacheo filed a complaint before the
CSC- National Capital Region (CSC-NCR), praying for the nullification of RTAO
No. 25-2002. The BIR, through its Deputy Commissioner for Legal and
Inspection Group, Edmundo P. Guevara (Guevara), denied Pacheos protest
for lack of merit. It contended that her reassignment could not be
considered constructive dismissal as she maintained her position as
Revenue Attorney IV and was designated as Assistant Chief of Legal Division.
Pacheo appealed to the CSC where the latter granted the same. However,
the CSC held that rules and so holds that the withholding by the BIR of her
salaries is justified as she is not entitled thereto since she is deemed not to
have performed any actual work in the government on the principle of no
work no pay. Still not satisfied, Pacheo moved for reconsideration. She
argued that the CSC erred in not finding that she was constructively
dismissed and, therefore, entitled to back salary. However, the motion was
dismissed.
Undaunted, Pacheo sought recourse before the CA via a petition for review.
The CA reversed the CSC decision, stating that Pacheo was constructively
dismissed. Hence, this petition.
ISSUE: Whether or not the CA erred in ruling that Pacheo was constructively
dismissed and entitled to backwages
HELD: No.
Political Law- transfer or assignment of personnel cannot be done when
the same is a preliminary step toward his removal or a scheme to lure him
away from his permanent position.
While a temporary transfer or assignment of personnel is permissible even
without the employee's prior consent, it cannot be done when the transfer
is a preliminary step toward his removal, or a scheme to lure him away from
his permanent position, or when it is designed to indirectly terminate his
service, or force his resignation. Such a transfer would in effect circumvent
the provision which safeguards the tenure of office of those who are in the
Civil Service.
Significantly, Section 6, Rule III of CSC Memorandum Circular No. 40, series
of 1998, defines constructive dismissal as a situation when an employee
quits his work because of the agency heads unreasonable, humiliating, or
demeaning actuations which render continued work impossible. Hence, the
employee is deemed to have been illegally dismissed. This may occur
although there is no diminution or reduction of salary of the employee. It
may be a transfer from one position of dignity to a more servile or menial Case Digest
job.

The CSC, through the OSG, contends that the deliberate refusal of Pacheo to
Case Digest: MANILA MEMORIAL PARK CEMETERY, INC. v. Lluz et al.
report for work either in her original station in Quezon City or her new place
of assignment in San Fernando, Pampanga negates her claim of constructive November 3, 2017
dismissal.
|
It is clear, however, from E.O. 292, Book V, Title 1, Subtitle A, Chapter 5,
Section 26 (7) that there is no such duty to first report to the new place of
assignment prior to questioning an alleged invalid reassignment imposed Nathalie Pattugalan
upon an employee. Pacheo was well within her right not to report
immediately to RR4, San Fernando, Pampanga, and to question her
reassignment.
G.R. No. 208451

Reassignments involving a reduction in rank, status or salary violate an February 03, 2016
employees security of tenure, which is assured by the Constitution, the
Administrative Code of 1987, and the Omnibus Civil Service Rules and CARPIO, J.:
Regulations. Security of tenure covers not only employees removed without
cause, but also cases of unconsented transfers and reassignments, which
are tantamount to illegal/constructive removal. Facts:

Having ruled that Pacheo was constructively dismissed, is she entitled to
reinstatement and back wages? The Court agrees with the CA that she is
entitled to reinstatement, but finds Itself unable to sustain the ruling that
she is entitled to full back wages and benefits. It is a settled jurisprudence
that an illegally dismissed civil service employee is entitled to back salaries
but limited only to a maximum period of five (5) years, and not full back
salaries from his illegal dismissal up to his reinstatement.
Petitioner Manila Memorial Park Cemetery, Inc. (Manila Memorial) entered
into a Contract of Services with respondent Ward Trading and Services
(Ward Trading). The Contract of Services provided that Ward Trading, as an
independent contractor, will render interment and exhumation services and
other related work to Manila Memorial in order to supplement operations
at Manila Memorial Park, Paranaque City.

Petition Denied Among those assigned by Ward Trading to perform services at the Manila
Memorial Park were respondents Ezard Lluz, Norman Corral, Erwm
Fugaban, Valdimar Balisi, Emilio Fabon, John Mark Aplicador, Michael
Curioso, Junlin Espares, and Gavino Farinas (respondents).
Respondents alleged that soon after the management declined their
request for regularization and to be recognized as legitimate members of
the existing labor union,the latter dismissed them. Hence, this case for
illegal dismissal.
By way of defense, Manila Memorial argued that there was no employer-
employee relationship between the company and respondents. Instead, It
argued that respondents were the employees of Ward Trading.
Issue:
Whether or not an employer-employee relationship exists between Manila
Memorial and respondents for the latter to be entitled to their claim for
wages and other benefits.
Ruling:
Contracting arrangements for the performance of specific jobs or services
under the law and its implementing rules are allowed. However, contracting
must be made to a legitimate and independent job contractor since labor
rules expressly prohibit labor-only contracting.
Labor-only contracting exists when the contractor or subcontractor merely
recruits, supplies or places workers to perform a job, work or service for a
principal and any of the following elements are present:
1) The contractor or subcontractor does not have substantial capital or
investment which relates to the job, work or service to be performed and
the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the
main business of the principal; or
2) The contractor does not exercise the right to control the performance of
the work of the contractual employee.
In the present case, The Contract of Services proved the existence of labor-
only conrtacting between Manila Memorial and Ward Trading. The Contract
of Services provided that Ward Trading, as an independent contractor, will
render interment and exhumation services and other related work to
Manila Memoria.However,a closer reading of the Contract of Services
reveals that Ward Trading does not have substantial capital or investment in
the form of tools, equipment, machinery, work premises and other
materials since it is Manila Memorial which owns the equipment used in the
performance of work needed for interment and exhumation services.
Furthermore, although Ward shall be in charge of the supervision over
individual respondents, the exercise of its supervisory function is heavily
dependent upon the needs of petitioner Memorial Park. The contract
further provides that petitioner has the option to take over the functions of
Ward's personnel if it finds any part or aspect of the work or service
provided to be unsatisfactory
Manila Memorial failed to adduce evidence to prove that Ward Trading had
any substantial capital, investment or assets to perform the work
contracted for. Thus, the presumption that Ward Trading is a labor-only
contractor stands. Consequently, Manila Memorial is deemed the employer
of respondents.
Case Digest: Diamond Farms, Inc. v. SPFL et al.
G.R. Nos. 173254-55 & 173263
January 13, 2016
JARDELEZA, J.:
Facts:
DFI owns an 800-hectare banana plantation ("original plantation") in Alejal,
Carmen, Davao. Pursuant to Republic Act No. 6657 or the Comprehensive
Agrarian Reform Law of 1988 ("CARL"), commercial farms shall be subject to
compulsory acquisition and distribution, thus the original plantation was
covered by the law. DFI offered to give up its rights and interest over the
original plantation in favor of the government by way of a Voluntary Offer
to Sell. The DAR accepted DFI's offer to sell the original plantation. Out of
the total 800 hectares, the DAR only approved the disposition of 689.88
hectares.
The awarded plantation was turned over to qualified agrarian reform
beneficiaries ("ARBs") under the CARL. These ARBs are the same farmers
who were working in the original plantation. They subsequently organized
themselves into a multi-purpose cooperative named "DARBMUPCO," which
is one of the respondents in this case.
DARBMUPCO entered into a Banana Production and Purchase Agreement
("BPPA") with DFI. Under the BPPA, DARBMUPCO and its members as
owners of the awarded plantation, agreed to grow and cultivate only high
grade quality exportable bananas to be sold exclusively to DPI. The BPPA is
effective for 10 years.18
Hampered by lack of manpower to undertake the agricultural operation
under the BPPA, DFI engaged the services of the respondent-contractors,
who in turn recruited the respondent-workers to assist DARBMUPCO in
meeting its production obligations under the BPPA,
Southern Philippines Federation of Labor ("SPFL")—a legitimate labor
organization with a local chapter in the awarded plantation filed a petition
for certification election in the Office of the Med-Arbiter on behalf of some
400 workers (the respondent-workers in this petition) "jointly employed by
DFI and DARBMUPCO" working in the awarded plantation.
In another case, SPFL, together with more than 300 workers, filed a case for
underpayment of wages, nonpayment of 13th month pay and service
incentive leave pay and attorney's fees against DFI, DARBMUPCO and the
respondent-contractors before the National Labor Relations Commission
("NLRC").
DARBMUPCO and DFI denied that they are the employers of the
respondent-workers. They claimed, instead, that the respondent-workers
are the employees of the respondent-contractors.
Issue:
Who among DFI,DARBMUPCO and the respondent-contractors is the
employer of the respondent-workers?
Ruling:
Petition is denied. Furthermore, the decision of the Court of Appeals
declaring DFI to be the employer of respondent-workers is affirmed.
This case involves job contracting, a labor arrangement expressly allowed by
law. Contracting or subcontracting is an arrangement whereby a principal
(or employer) agrees to put out or farm out with a contractor or
subcontractor the performance or completion of a specific job, work or
service within a definite or predetermined period, regardless of whether
such job, work or service is to be performed or completed within or outside
the premises of the principal.
The Omnibus Rules Implementing the Labor Code distinguishes between
permissible job contracting (or independent contractorship) and labor-only
contracting. Job contracting is permissible under the Code if the following
conditions are met:
(1) The contractor carries on an independent business and undertakes the
contract work on his own account under his own responsibility according to
his own manner and method, free from the control and direction of his
employer or principal in all matters connected with the performance of the
work except as to the results thereof; and
(2) The contractor has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are
necessary in the conduct of his business.
In contrast, job contracting shall be deemed as labor-only contracting, an
arrangement prohibited by law, if a person who undertakes to supply
workers to an employer:
(1) Does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises and other materials; and
(2) The workers recruited and placed by such person are performing
activities which are directly related to the principal business or operations of
the employer in which workers are habitually employed.
Based on the conditions for permissible job contracting, we rule that
respondent-contractors are labor only contractors
There is no evidence showing that respondent-contractors are independent
contractors. The respondent-contractors, DFI, and DARBMUPCO did not
offer any proof that respondent-contractors were not engaged in labor-only
contracting.
Herein respondents, Voltaire Lopez, Jr., et al., were commissioned and
contracted by petitioner, Diamond Farms, Inc. (DFI) to recruit farm workers,
who are the complaining [respondent-workers] (as represented by Southern
Philippines Federation of Labor (SPFL) in this appeal by certiorari).
Farm tools, implements and equipment necessary to performance of such
farm activities were supplied by petitioner DFI. Herein respondents Voltaire
Lopez, Jr. et. al. had no adequate capital to acquire or purchase such tools,
implements, equipment, etc.
Herein respondents Voltaire Lopez, Jr., et. al. as well as rcspondents-SPFL,
et. al. were being directly supervised, controlled and managed by petitioner
DFI farm managers and supervisors, specifically on work assignments and
performance targets.
A finding that a contractor is a labor-only contractor is equivalent to a
declaration that there is an employer-employee relationship between the
principal, and the workers of the labor-only contractor; the labor-only
contractor is deemed only as the agent of the principal. Thus, in this case,
respondent-contractors are the labor-only contractors and either DFI or
DARBMUPCO is their principal.
We hold that DFI is the principal. The records show that it is DFI which hired
the individual [respondent-contractors] who in turn hired their own men to
work in the 689.88 hectares land of DARBMUPCO as well as in the managed
area of the plantation.
DFI cannot argue that DARBMUPCO is the principal of the respondent-
contractors because it (DARBMUPCO) owns the awarded plantation where
respondent-contractors and respondent-workers were working. That
DARBMUPCO owns the awarded plantation where the respondent-
contractors and respondent-workers were working is immaterial.DFI, as the
principal, hired the respondent-contractors and the latter, in turn, engaged
the services of the respondent-workers.
Clearly, DFI is the true employer of the respondent-workers; respondent-
contractors are only agents of DFI. Under Article 106 of the Labor Code, DFI
shall be solidarily liable with the respondent-contractors for the rightful
claims of the respondent-workers, to the same manner and extent, as if the
latter are directly employed by DFI.
BANKARD, INC. vs. NLRC-
FIRST DIVISION, PAULO BUENCONSEJO,BANKARD EMPLOYEES UNION-
AWATU G.R. No. 171664, 6 March 2013
FACTS:
The issue started when Bankard implemented Manpower Rationalization Pr
ogram (MRP), to further enhance its efficiency and be more competitive in t
he credit card industry, invitating to the employees to tender their voluntary
resignation, with entitlement to separation pay. Thereafter, majority of one
division availed of the MRP. Thus, Bankard contracted an independent agen
cy to handle its call center needs.
The Union filed before the NCMB its first Notice of Strike (NOS) alleging com
mission of unfair labor practices by petitioner Bankard, Inc. . Labor Secretary
of the DOLE issued the order certifying the labor dispute to the NLRC upon t
he Bankard’s request. The Union filed its second NOS the day after it declare
d deadlock, alleging bargaining in bad faith on the part of Bankard. Bankard
then again asked the Office of the Secretary of Labor to assume jurisdiction,
which was granted and certified the labor dispute to the NLRC.
ISSUE:
Whether job contractualization or outsourcing or contracting-
out is an unfair labor practice considering there was no bad faith.
RULING: No. Aside from the bare allegations of the Union, nothing in the rec
ords strongly proves that Bankard intended its program, the MRP, as a tool t
o drastically and deliberately reduce union membership. Contrary to the fin
dings and conclusions of both the NLRC and the CA, there was no proof that
the program was meant to encourage the employees to disassociate themse
lves from the Union or to restrain them from joining any union or organizati
on. There was no showing that it was intentionally implemented to stunt th
e growth of the Union or that Bankard discriminated, or in any way singled o
ut the union members who had availed of the retirement package under the
MRP. True, the program might have affected the number of union member
ship because of the employees’ voluntary resignation and availment of the p
ackage, but it does not necessarily follow that Bankard indeed purposely so
ught such result. It must be recalled that the MRP was implemented as a vali
d cost-cutting measure, well within the ambit of the so-
called management prerogatives. Bankard contracted an independent agen
cy to meet business exigencies. In the absence of any showing that Bankard
was motivated by ill will, bad faith or malice, or that it was aimed at interferi
ng with its employees’ right to self-
organize, it cannot be said to have committed an act of unfair labor practice.
The Court has ruled that the prohibited acts considered as ULP relate to the
workers’ right to self-
organization and to the observance of a CBA. It refers to “acts that violate th
e workers’ right to organize.” Without that element, the acts, even if unfair,
are not ULP. Thus, an employer may only be held liable for unfair labor pract
ice if it can be shown that his acts affect in whatever manner the right of his
employees to self-organize.
Law on unfair labor practices is not intended to deprive employers of their f
undamental right to prescribe and enforce such rules as they honestly believ
e to be necessary to the proper, productive and profitable operation of their
business. Contracting out of services is an exercise of business judgment or
management prerogative. Absent any proof that management acted in a ma
licious or arbitrary manner, the Court will not interfere with the exercise of j
udgment by an employer.
CASE: EUGENE S. ARABIT
 vs.
 JARDINE PACIFIC FINANCE, INC.
(FORMERLY MB FINANCE)
DOCTRINE: Redundancy exists where the services of an employee are in
excess of what is reasonably demanded by the actual requirements of the
enterprise but the employer must clearly show that it used fair and
reasonable criteria in ascertaining what positions are to be declared
redundant.
FACTS:
Petitioners were former regular employees of respondent Jardine Pacific
Finance, Inc. (formerly MB Finance) (Jardine). The petitioners were also
officers and members of MB Finance Employees Association-FFW Chapter
(the Union), a legitimate labor union and the sole exclusive bargaining agent
of the employees of Jardine.
On the claim of financial losses, Jardine decided to reorganize and
implement a redundancy program among its employees. The petitioners
were among those affected by the redundancy program. Jardine thereafter
hired contractual employees to undertake the functions these employees
used to perform.
The petitioners and the Union filed a complaint against Jardine with the
NLRC for illegal dismissal and unfair labor practice.
ISSUE:
Whether or not the retrenchment was valid.
RULING:
Redundancy exists where the services of an employee are in excess of what
is reasonably demanded by the actual requirements of the enterprise. A
position is redundant where it is superfluous, and superfluity of a position
or positions may be the outcome of a number of factors, such as over hiring
of workers, decreased volume of business, or dropping of a particular
product line or service activity previously manufactured or undertaken by
the enterprise.
Primarily, employers resort to redundancy when the functions of an
employee have already become superfluous or in excess of what the
business requires. Thus, even if a business is doing well, an employer can
still validly dismiss an employee from the service due to redundancy if that
employee’s position has already become in excess of what the employer’s
enterprise requires.
From this perspective, it is illogical for Jardine to terminate the petitioners’
employment and replace them with contractual employees. The
replacement effectively belies Jardine’s claim that the petitioners’ positions
were abolished due to superfluity. Redundancy could have been justified if
the functions of the petitioners were transferred to other existing
employees of the company.
To dismiss the petitioners and hire new contractual employees as
replacements necessarily give rise to the sound conclusion that the
petitioners’ services have not really become in excess of what Jardine’s
business requires. To replace the petitioners who were all regular
employees with contractual ones would amount to a violation of their right
to security of tenure.
The employer must clearly show that it used fair and reasonable criteria in
ascertaining what positions are to be declared redundant. Jardine was never
able to explain in any of its pleadings why the petitioners’ positions were
redundant. It never even attempted to discuss the attendant facts and
circumstances that led to the conclusion that the petitioners’ positions had
become superfluous and unnecessary to Jardine’s business requirements
Carlos Cotiangco, Lucio Salas, et. al. V. The Province of Biliran
G.R. No. 153139 October 19, 2011
SERENO, J.:
FACTS:
Petitioners held permanent appointments as public health workers
in the Province of Biliran. On 23 October 1998, the Sangguniang
Panlalawigan (SP) of Biliran passed SP Resolution No. 102, Series of 1998,
approving the revised structure and staffing pattern of the provincial
government submitted by its then incumbent governor, Danilo Parilla.
Pursuant to said Resolution, Governor Parilla issued Executive Order (EO)
No. 98-07, Series of 1998, dated 4 November 1998, declaring all positions in
the provincial government of Biliran as abolished except those of the
Provincial Treasurer and all elective positions.
EO No. 98-07 was revoked by EO No. 98-08, Series of 1998, which in turn
declared all positions under the new staffing pattern vacant and directed all
permanent employees to submit their application within fifteen (15) days
from the date of posting of the approved new staffing pattern on November
4, 1998. On 13 January 1999, petitioners received their notices of
termination/non-reappointment dated 12 January 1999, which stated that
their service was only up to February 11, 1999.
ISSUE:
Whether there was a valid reorganization.
HELD:
Yes, there was a valid reorganization.
Section 8 of the Magna Carta of Public Health Workers (R.A. 7305) provides
that in case of regular employment of public health workers, their services
shall not be terminated except for cause provided by law and after due
process. Section 2 of R.A. 6656 (An Act to Protect the Security of Tenure of
Civil Service Officers and Employees in the Implementation of Government
Reorganization) cites instances that may be considered as evidence of bad
faith in the removal from office of a government officer or employee
pursuant to a reorganization, to wit: (a) Where there is a significant increase
in the number of positions in the new staffing pattern of the department or
agency concerned; (b) Where an office is abolished and other performing
substantially the same functions is created; (c) Where incumbents are
replaced by those less qualified in terms of status of appointment,
performance and merit; (d) Where there is a reclassification of offices in the
department or agency concerned and the reclassified offices perform
substantially the same function as the original offices; (e) Where
the removal violates the order of separation provided in Section 3 hereof. In
this case, none of the abovementioned criteria was proved. Thus, the
reorganization was valid.
ETPI VS. ETEU DIGEST
DECEMBER 19, 2016 ~ VBDIAZ
TOPIC: BONUS INCLUDED/NOT INCLUDED; A DEMANDABLE OBLIGATION
ETPI VS. ETEU
G.R. No. 185665
February 8, 2012
FACTS: Eastern Telecommunications Phils., Inc. (ETPI) is a corporation
engaged in the business of providing telecommunications facilities. Eastern
Telecoms Employees Union (ETEU) is the certified exclusive bargaining
agent of the company’s rank and file employees. It has an existing CBA with
the company to expire in the year 2004 with a Side Agreement signed on
September 3, 2001.
In essence, the labor dispute was a spin-off of the company’s plan
to defer payment of the 2003 14th, 15th and 16th month bonuses
sometime in April 2004. The company’s main ground in postponing the
payment of bonuses is due to allege continuing deterioration of company’s
financial position which started in the year 2000. However, ETPI
while postponing payment of bonuses sometime in April 2004, such
payment would also be subject to availability of funds.
Invoking the Side Agreement of the existing CBA for the period 2001-2004
between ETPI and ETEU, the union strongly opposed the deferment in
payment of the bonuses by filing a preventive mediation complaint with the
NCMB.
Later, the company made a sudden turnaround in its position by declaring
that they will no longer pay the bonuses until the issue is resolved through
compulsory arbitration.
Thus ETEU filed a Notice of Strike on the ground of unfair labor practice for
failure of ETPI to pay the bonuses in gross violation of the economic
provision of the existing CBA.
ETPI insists that it is under no legal compulsion to pay 14th, 15th and 16th
month bonuses for the year 2003 and 14th month bonus for the year 2004
contending that they are not part of the demandable wage or salary and
that their grant is conditional based on successful business performance and
the availability of company profits from which to source the same. To
thwart ETEU’s monetary claims, it insists that the distribution of the subject
bonuses falls well within the company’s prerogative, being an act of pure
gratuity and generosity on its part. Thus, it can withhold the grant thereof
especially since it is currently plagued with economic difficulties and
financial losses.
ETPI further avers that the act of giving the subject bonuses did not ripen
into a company practice arguing that it has always been a contingent one
dependent on the realization of profits and, hence, the workers are not
entitled to bonuses if the company does not make profits for a given year. It
asseverates that the 1998 and 2001 CBA Side Agreements did not
contractually afford ETEU a vested property right to a perennial payment of
the bonuses. It opines that the bonus provision in the Side Agreement
allows the giving of benefits only at the time of its execution. For this
reason, it cannot be said that the grant has ripened into a company
practice.
ISSUES: Is ETPI is liable to pay 14th, 15th and 16th month bonuses for the
year 2003 and 14th month bonus for the year 2004 to the members of
respondent union?
HELD: YES
From a legal point of view, a bonus is a gratuity or act of liberality of the
giver which the recipient has no right to demand as a matter of right. The
grant of a bonus is basically a management prerogative which cannot be
forced upon the employer who may not be obliged to assume the onerous
burden of granting bonuses or other benefits aside from the employee’s
basic salaries or wages.
A bonus, however, becomes a demandable or enforceable obligation when
it is made part of the wage or salary or compensation of the employee.
Particularly instructive is the ruling of the Court in Metro Transit
Organization, Inc. v. NLRC, where it was written:
Whether or not a bonus forms part of wages depends upon the
circumstances and conditions for its payment. If it is additional
compensation which the employer promised and agreed to give without any
conditions imposed for its payment, such as success of business or greater
production or output, then it is part of the wage. But if it is paid only if
profits are realized or if a certain level of productivity is achieved, it cannot
be considered part of the wage. Where it is not payable to all but only to
some employees and only when their labor becomes more efficient or more
productive, it is only an inducement for efficiency, a prize therefore, not a
part of the wage.
In the case at bench, it is indubitable that ETPI and ETEU agreed on the
inclusion of a provision for the grant of 14th, 15th and 16th month bonuses
in the 1998-2001 CBA Side Agreement, as well as in the 2001-2004 CBA Side
Agreement, which was signed on September 3, 2001. The provision, which
was similarly worded, states:
Employment-Related Bonuses
The Company confirms that the 14th, 15th and 16th month bonuses (other
than the 13th month pay) are granted.
A reading of the above provision reveals that the same provides for the
giving of 14th, 15th and 16th month bonuses without qualification. The
wording of the provision does not allow any other interpretation. There
were no conditions specified in the CBA Side Agreements for the grant of
the benefits contrary to the claim of ETPI that the same is justified only
when there are profits earned by the company. Terse and clear, the said
provision does not state that the subject bonuses shall be made to depend
on the ETPI’s financial standing or that their payment was contingent upon
the realization of profits. Neither does it state that if the company derives
no profits, no bonuses are to be given to the employees. In fine, the
payment of these bonuses was not related to the profitability of business
operations.
The records are also bereft of any showing that the ETPI made it clear
before or during the execution of the Side Agreements that the bonuses
shall be subject to any condition. Indeed, if ETPI and ETEU intended that the
subject bonuses would be dependent on the company earnings, such
intention should have been expressly declared in the Side Agreements or
the bonus provision should have been deleted altogether. Verily, by virtue
of its incorporation in the CBA Side Agreements, the grant of 14th, 15th and
16th month bonuses has become more than just an act of generosity on the
part of ETPI but a contractual obligation it has undertaken. Moreover,
the continuous conferment of bonuses by ETPI to the union members from
1998 to 2002 by virtue of the Side Agreements evidently negates its
argument that the giving of the subject bonuses is a management
prerogative.
Granting arguendo that the CBA Side Agreement does not contractually
bind petitioner ETPI to give the subject bonuses, nevertheless, the Court
finds that its act of granting the same has become an established company
practice such that it has virtually become part of the employees’ salary or
wage. A bonus may be granted on equitable consideration when the giving
of such bonus has been the company’s long and regular practice.
In Philippine Appliance Corporation v. CA, it was pronounced:
To be considered a “regular practice,” however, the giving of the bonus
should have been done over a long period of time, and must be shown to
have been consistent and deliberate. The test or rationale of this rule on
long practice requires an indubitable showing that the employer agreed to
continue giving the benefits knowing fully well that said employees are not
covered by the law requiring payment thereof.
The records show that ETPI, aside from complying with the regular 13th
month bonus, has been further giving its employees 14th month bonus
every April as well as 15th and 16th month bonuses every December of the
year, without fail, from 1975 to 2002 or for 27 years whether it earned
profits or not. The considerable length of time ETPI has been giving the
special grants to its employees indicates a unilateral and voluntary act on its
part to continue giving said benefits knowing that such act was not required
by law. Accordingly, a company practice in favor of the employees has been
established and the payments made by ETPI pursuant thereto ripened into
benefits enjoyed by the employees.
NOTES:
1. From the foregoing, ETPI cannot insist on business losses as a basis
for disregarding its undertaking. It is manifestly clear that although
it incurred business losses in the year 2000, it continued to
distribute 14th, 15th and 16th month bonuses for said year.
Notwithstanding such huge losses, ETPI entered into the 2001-2004
 CBA Side Agreement on September 3, 2001 whereby it contracted
to grant the subject bonuses to ETEU in no uncertain terms. ETPI
continued to sustain losses for the succeeding years of 2001 and
2002. Still and all, this did not deter it from honoring the bonus
provision in the Side Agreement as it continued to give the subject
bonuses to each of the union members in 2001 and 2002 despite its
alleged precarious financial condition. Parenthetically, it must be
emphasized that ETPI even agreed to the payment of the 14th, 15th
and 16th month bonuses for 2003 although it opted to defer the
actual grant in April 2004. All given, business losses could not be
cited as grounds for ETPI to repudiate its obligation under the 2001-
2004 CBA Side Agreement.
2. The Court finds no merit in ETPI’s contention that the bonus
provision confirms the grant of the subject bonuses only on a single
instance because if this is so, the parties should have included such
limitation in the agreement. Nowhere in the Side Agreement does it
say that the subject bonuses shall be conferred once during the year
the Side Agreement was signed.
3. The giving of the subject bonuses cannot be peremptorily
withdrawn by ETPI without violating Article 100 of the Labor Code:
Art. 100. Prohibition against elimination or diminution of benefits. – Nothing
in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of
promulgation of this Code.
The rule is settled that any benefit and supplement being enjoyed by the
employees cannot be reduced, diminished, discontinued or eliminated by
the employer. The principle of non-diminution of benefits is founded on the
constitutional mandate to protect the rights of workers and to promote
their welfare and to afford labor full protection.
http://lawyerly.ph/juris/view/cf0d7
(NO CASE DIGEST ZWD VS COA)
intec cebu inc vs honorable COA
PETITIONER Intec Cebu Inc. (Intec) manufactures and assembles mechanical
systems and printed circuit boards for cassette tape recorders, CDs and CD
ROM players. Respondent Rowena Reyes and 36 others were hired by it in
1997 and 1998 as production workers. In 2005, respondents’ working days
were reduced from 6 to 2-4 days. Intec explained that the reduction of
working days was due to the lack of job orders. It claimed that the company
was established to supply the required materials of Kenwood Precision
Corp. (Kenwood). When Kenwood stopped its operations in the Philippines,
Intec’s business operations were severely affected, prompting Intec to set
up a new product line exclusively for Pentax Cebu Philippines Corp.
(Pentax). In December 2005, Intec’s job orders from Pentax declined. The
reduced work week policy was extended from April to June 2006. However,
respondents discovered that Intec hired around 188 contractual employees
tasked to perform tasks, which they were regularly doing. On May 17, 2006,
their services were terminated. Two days later, they filed a complaint for
illegal dismissal. The Labor Arbiter found respondents illegally
(constructively) dismissed and granted them separation pay and backwages.
The National Labor Relations Commission (NLRC) set aside the decision of
the Labor Arbiter and held that Intec suffered tremendous financial losses,
which justified the reduction of working days. The Court of Appeals (CA)
reversed the NLRC decision and reinstated the decision of the Labor Arbiter.
Did the CA commit a reversible error? Ruling: No. An examination of Intec’s
financial statements for 2005-2006 shows that while Intec suffered a net
loss of P9,240,929 in 2005, it earned a net income of P9,568,674.00 in 2006.
The period covered in the financial statement of 2006 is from May 2005-
April 2006. It was only on the ninth month of operations that Intec decided
to carry out the reduced work day scheme. Note that the reduced workday
scheme was implemented only in January 2006. Unless evidence is shown
by the company that the income for 2006 was earned only between the
months of January and April, it is safe to presume that at the time the
reduced workday scheme was being implemented, the company was still
benefiting from its gains as shown in the numbers for 2006. Furthermore,
the loss incurred in 2005 may be attributed to the acquisition of property
and equipment amounting to P9,218,967 in 2005. There is also no indication
in the financial statements, much less an observation made by the
independent auditor, that a reduction in demand would necessitate a
reduction in the employees’ workdays. We cannot give weight to the
evidence presented by Intec to prove the slump in demand. First, the two-
page delivery data are lacking in specifics. The report did not indicate when
it was prepared. Second, the report was prepared by Intec employees and
approved by their President. Third, the report appeared to be mere
projections because it was not supported by corresponding sales or delivery
receipts. The actual sales may vary from the projected demand, thus, the
report cannot be made as basis of a slump in demand or a slowdown. In
addition, the hiring of 188 workers, whether they be trainees or casual
employees, necessarily incurred cost to the company. No proof was
submitted that these newly-hired employees were performing work
different from the regular workers. In sum, there is no reason to implement
a cost-cutting measure in the form of reducing the employees’ working
days. Intec committed illegal reduction of work hours. Constructive
dismissal occurs when there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely; when there
is a demotion in rank or diminution in pay or both; or when a clear
discrimination, insensibility, or disdain by an employer becomes unbearable
to the employee. Intec’s unilateral and arbitrary reduction of the workday
scheme had significantly greatly reduced respondents’ salaries thereby
rendering it liable for constructive dismissal. (Perez, J., SC Third Division,
Intec Cebu Inc., Akihiko Kambayashi And Wataru Sato vs. Hon. Court Of
Appeals, Rowena Reyes, Et. Al., G.R. No. 189851, June 22, 2016).