Labor Code – Case Digest Part III

Meralco v. NLRC
GR 114129 October 24, 1996
Facts:
 Private respondent Jeremias C. Cortez, Jr. was employed on probationary status by petitioner as lineman
driver. Six months later, he was regularized as a 3rd class lineman-driver and eventually as 1st class
lineman-driver. His duties and responsibilities included the maintenance of Meralco's distribution facilities
(electric lines) by responding to customer's complaints of power failure, interruptions, line trippings and
other line troubles.
 Due to his numerous infractions, private respondent was administratively investigated for violation of
Meralco's Code on Employee Discipline, particularly his repeated and unabated absence from work
without prior notice from his superiors specifically from August 2 to September 19, 1989.
 After such administrative investigation was conducted by petitioner, it concluded that private respondent
was found to have grossly neglected his duties by not attending to his work as lineman from Aug. 2, 1989
to September 19, 1989 without notice to his superiors. He was later notified of the judgment and was
eventually dismissed.
Issue:
 Whether or not private respondent’s dismissal from service was illegal.
Held:
 The penchant of private respondent to continually incur unauthorized absences and/or a violation of
petitioner's sick leave policy finally rendered his dismissal as imminently proper. Private respondent
cannot expect compassion from this Court by totally disregarding his numerous previous infractions and
take into consideration only the period covering August 2, 1989 to September 19, 1989. As ruled by this
Court in the cases of Mendoza v. National Labor Relations Commission, 8 and National Service
Corporation v. Leogardo, Jr., it is the totality, not the compartmentalization, of such company
infractions that private respondent had consistently committed which justified his penalty of
dismissal.
 Article 282 of the Labor Code enumerates the just causes for termination. This cause includes gross
inefficiency, negligence and carelessness. Such just causes are derived from the right of the
employer to select and engage his employees. For indeed, regulation of manpower by the
company clearly falls within the ambit of management prerogative. This court had defined a valid
exercise of management prerogative as one which covers: hiring, work assignment, working methods,
time, place and manner of work, tools to be used, processes to be followed, supervision of workers,
working regulations, transfer of employees, work supervision, lay-off of workers, and the discipline,
dismissal and recall of workers. Except as provided for, or limited by, special laws, an employer is free to
regulate, according to his own discretion and judgment, all aspects of employment.

Jenny Agabon v. NLRC

GR 158693 November 17, 2004
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.
 Petitioners assert that they were dismissed because the private respondent refused to give them
assignments unless they agreed to work on a "pakyaw" basis. 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. In fact, private respondent sent two letters to the last known addresses of the
petitioners advising them to report for work.
Issue:
 Whether or not petitioners’ dismissal was valid.
Held:
 Where the employer had a valid reason to dismiss an employee but did not follow the due process
requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity
to the employee.
 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. Thus, it should be
held liable for non-compliance with the procedural requirements of due process.
 Due process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e.,
the valid and authorized causes of employment termination under the Labor Code; and procedural, i.e.,
the manner of dismissal. Procedural due process requirements for dismissal are found in the
Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of the Philippines in
Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10. Breaches of these due process
requirements violate the Labor Code. Therefore statutory due process should be differentiated from
failure to comply with constitutional due process.
 Constitutional due process protects the individual from the government and assures him of his rights in
criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and
Implementing Rules protects employees from being unjustly terminated without just cause after notice
and hearing.

JAKA Food Processing v. Darwin Pacot

GR 151378 March 28, 2005
Facts:
 Respondents were earlier hired by petitioner Petitioner until the latter terminated their employment on
because the corporation was "in dire financial straits". It is not disputed, however, that the termination was
effected without JAKA complying with the requirement under Article 283 of the Labor Code regarding the
service of a written notice upon the employees and the Department of Labor and Employment at least
one (1) month before the intended date of termination.
 In time, respondents separately filed with the regional Arbitration Branch of NLRC complaints for illegal
dismissal, underpayment of wages and nonpayment of service incentive leave and 13th month pay
against JAKA and its HRD Manager.
Issue:
 Whether or not respondents’ termination was for a just cause.
Held:
 In Agabob v NLRC, the Court ruled that 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.
 The difference between Agabon and the instant case is that in the former, the dismissal was based on a
just cause under Article 282 of the Labor Code while in the present case, respondents were dismissed
due to retrenchment, which is one of the authorized causes under Article 283 of the same Code.
 (1) If the dismissal is based on a just cause under Article 282 (just cause) but the employer failed
to comply with the notice requirement, the sanction to be imposed upon him should be tempered
because the dismissal process was, in effect, initiated by an act imputable to the employee; and
(2) if the dismissal is based on an authorized cause under Article 283 (authorized cause) but the
employer failed to comply with the notice requirement, the sanction should be stiffer because the
dismissal process was initiated by the employer’s exercise of his management prerogative.

Industrial Timber Corp. v. Virgilio Ababon

GR no 164518 March 30, 2006
Facts:
 Industrial Plywood Group Corporation (IPGC) is the owner of a plywood plant, leased to Industrial Timber
Corporation (ITC) for a period of five years. Thereafter, ITC commenced operation of the plywood plant
and hired 387 workers. Later, ITC notified the Department of Labor and Employment (DOLE) and its
workers that it will undergo a "no plant operation" due to lack of raw materials and will resume only after it
 can secure logs for milling. Meanwhile, IPGC notified ITC of the expiration of the lease and its intention
not to renew the same.
 ITC notified the DOLE and its workers of the plant’s shutdown due to the non-renewal of anti-pollution
permit that expired in April 1990.6 This fact and the alleged lack of logs for milling constrained ITC to lay
off all its workers until further notice. This was followed by a final notice of closure or cessation of
business operations on August 17, 1990 with an advice for all the workers to collect the benefits due them
under the law and CBA.
 Subsequently, IPGC took over the plywood plant after it was issued a Wood Processing Plant Permit No.
WPR-1004-081791-042,8 which included the anti-pollution permit, by the Department of Environment and
Natural Resources (DENR) coincidentally on the same day the ITC ceased operation of the plant. This
prompted Virgilio Ababon, et al. to file a complaint against ITC and IPGC for illegal dismissal, unfair labor
practice and damages. They alleged, among others, that the cessation of ITC’s operation was intended to
bust the union and that both corporations are one and the same entity being controlled by one owner.
Issue:
 Whether or not there was, in fact, an illegal dismissal.
Held:
 While we ruled in this case that the sanction should be stiffer in a dismissal based on authorized cause
where the employer failed to comply with the notice requirement than a dismissal based on just cause
with the same procedural infirmity, however, in instances where the execution of a decision becomes
impossible, unjust, or too burdensome, modification of the decision becomes necessary in order
to harmonize the disposition with the prevailing circumstances.
 In the determination of the amount of nominal damages which is addressed to the sound discretion of the
court, several factors are taken into account: (1) the authorized cause invoked, whether it was a
retrenchment or a closure or cessation of operation of the establishment due to serious business losses
or financial reverses or otherwise; (2) the number of employees to be awarded; (3) the capacity of the
employers to satisfy the awards, taken into account their prevailing financial status as borne by the
records; (4) the employer’s grant of other termination benefits in favor of the employees; and (5) whether
there was a bona fide attempt to comply with the notice requirements as opposed to giving no notice at
all.

Acesite Corporation v. NLRC

GR no. 152308 January 26, 2005
Facts:
 Leo A. Gonzales was hired as Chief of Security of Manila Pavillion Hotel. Later, Acesite Corporation
(Acesite) took over the operations of Manila Pavillion and renamed it Holiday Inn Manila. Acesite retained
Gonzales as Chief of Security of the hotel. On March 25, 1998, Gonzales took a 4-day sick leave and
took emergency leave on March 30, 1998. On April 16-29, 1998, he again took a 12-day vacation leave,
thereby using up all leaves that he was entitled for the year. Before the expiration of his 12-day vacation
leave or on April 23, 1998, Gonzales filed an application for emergency leave for 10 days commencing on
April 30 up to May 13, 1998. The application was not, however, approved. By Acesite’s claim, he received
a telegram3 informing him of the disapproval and asking him to report back for work.
 Gonzales did not report for work on April 30, 1998. On even date, he received a telegram from Acesite
advising him that he was on unauthorized leave and asking him to provide a written explanation within the
next 24 hours why he was not reporting for work. At the same time, he was required to report for work the
following day.
 Gonzales reported for work and presented himself to the Resident Manager of the hotel. Angerbauer
claims that when Gonzales went to him, he asked him to explain why he had been absent despite orders
for him to report back for work to which he replied that it was necessary for him to go home to his
province in Abra. Gonzales, on the other hand, claims that when he conferred with Angerbauer, he
requested for leave without pay from May 5-9, 1998 which was provisionally approved on condition that
he would be sending his explanation through e-mail, which he did, behind his absences.
 Later, Angerbauer sent the following inter-office memo to Gonzales asking him to immediately report back
to work due to very urgent matters involving security department concerns.
 Gonzales, who claims to have received the May 5, 1998 telegram only in the afternoon of May 7, 1998,
immediately repaired back to Manila on May 8, 1998 only to be "humiliatingly and ignominiously barred by
the guard from entering the premises.

Issue:
 Whether or not private respondent’s termination, on the ground of wilful misconduct, was proper.
Held:
 As correctly ruled by the Court of Appeals, Gonzales cannot be considered to have willfully disobeyed his
employer. Willful disobedience entails the concurrence of at least two (2) requisites: (1) the
employee’s assailed conduct has been willful or intentional, the willfulness being characterized by
a "wrongful and perverse attitude;" and (2) the order violated must have been (i) reasonable,
lawful, (ii) made known to the employee and (iii) must pertain to the duties which he had been
engaged to discharge.
In Gonzales’ case, his assailed conduct has not been shown to have been characterized by a perverse
attitude, hence, the first requisite is wanting. His receipt of the telegram disapproving his application for
emergency leave starting April 30, 1998 has not been shown. And it cannot be said that he disobeyed the
May 5, 1998 telegram since he received it only on May 7, 1998. On the contrary, that he immediately hied
back to Manila upon receipt thereof negates a perverse attitude.

JGB Associates v. NLRC

GR 109390 March 7, 1996
Facts:
 Private respondent Arrojado was hired by petitioner JGB and Associates, Inc. for its principal Tariq Hajj
Architects, to works as draftsman in Saudi Arabia. The contract of employment was for two years.
 Before the expiration of his contract of employment, private respondent was given notice by his employer
that his employment was terminated for the reason that his performance both in productivity and
efficiency was below average. He was immediately scheduled to depart Saudi Arabia and, three days
after his dismissal, he found himself already in the Philippines.
 Private respondent filed with the POEA a complaint against JGB and Associates, Inc., Tariq Hajj
Architects and Country Bankers Insurance Corporation, alleging illegal dismissal.
 Private respondent alleged that he did his job conscientiously and that he was even asked to make scale
models, in addition to his regular duties. He claimed that he was never reprimanded nor informed of his
alleged negligence and incompetence either by his immediate supervisor or by his employer. On the
other hand, petitioner averred that private respondent was dismissed for neglect of duties and
performance below par. Petitioner also alleged that although no prior notice of dismissal was given to
private respondent, he was given in lieu thereof a "notice pay" equivalent to one month salary.
Issue:
 Whether or not private respondent was illegally dismissed.
Held:
 We find that petitioner failed to prove that the NLRC committed grave abuse of discretion in holding that
private respondent was illegally dismissed. In termination cases, the burden of proving just cause for
dismissal is on the employer. In this case, the grounds for the dismissal of private respondent were stated
in two documents presented by petitioner before the POEA: (1) the notice of termination given to private
respondent on February 20, 1990; and (2) the letter of the principal, Tariq Hajj on August 1, 1990, In the
termination letter, the foreign employer stated that private respondent's performance was below average.
 Gross negligence connotes want of care in the performance of one's duties.2 Habitual neglect
implies repeated failure to perform one's duties for a period of time, depending upon the
circumstances. On the other hand, fraud and willful neglect of duties imply bad faith on the part of
the employee in failing to perform his job to the detriment of the employer and the latter's
business.
 None of these causes is stated in the two letters of the employer as reasons for dismissing private
respondent. None of the reasons there stated even approximates any of the causes provided in the
contract of employment for the termination of employment by the employer.

King of Kings Transport vs Tinga and Velasco

 GR no 166208 June 29, 2007
Facts:
 Respondent Mamac was hired as bus conductor of Don Mariano Transit Corporation (DMTC).
Respondent was required to accomplish a "Conductor’s Trip Report" and submit it to the company after
each trip. As a background, this report indicates the ticket opening and closing for the particular day of
duty. After submission, the company audits the reports. Once an irregularity is discovered, the company
issues an "Irregularity Report" against the employee, indicating the nature and details of the irregularity.
Thereafter, the concerned employee is asked to explain the incident by making a written statement or
counter-affidavit at the back of the same Irregularity Report. After considering the explanation of the
employee, the company then makes a determination of whether to accept the explanation or impose upon
the employee a penalty for committing an infraction. That decision shall be stated on said Irregularity
Report and will be furnished to the employee.
 Upon audit of the Conductor’s Report of respondent, KKTI noted an irregularity. It discovered that
respondent declared several sold tickets as returned tickets causing KKTI to lose an income of eight
hundred and ninety pesos. KKTI asked respondent to explain the discrepancy. In his letter, respondent
said that the erroneous declaration in his Trip Report was unintentional. He explained that during that
day’s trip, the windshield of the bus assigned to them was smashed; and they had to cut short the trip in
order to immediately report the matter to the police. As a result of the incident, he got confused in making
the trip report.
 Later, respondent received a letter terminating his employment. The dismissal letter alleged that the
irregularity was an act of fraud against the company. KKTI also cited as basis for respondent’s dismissal
the other offenses he allegedly committed on prior dates.
Issue:
 Whether the Honorable Court of Appeals erred in ruling that KKTI did not comply with the requirements of
procedural due process before dismissing the services of the complainant/private respondent.
Held:
 In case of termination, the foregoing notices shall be served on the employee’s last known
address:
 (1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period.
 (2) After serving the first notice, the employers should schedule and conduct a
hearing or conference wherein the employees will be given the opportunity to:
(i) explain and clarify their defenses to the charge against them; (ii) present
evidence in support of their defenses; and (iii) rebut the evidence presented
against them by the management.
 (3) After determining that termination of employment is justified, the employers
shall serve the employees a written notice of termination indicating that: (i) all
circumstances involving the charge against the employees have been
considered; and (ii) grounds have been established to justify the severance of
their employment.
 "Reasonable opportunity" under the Omnibus Rules means every kind of assistance that management
must accord to the employees to enable them to prepare adequately for their defense.15 This should be
construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or lawyer, gather data and
evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable
the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge against the employees. A
general description of the charge will not suffice. Lastly, the notice should specifically mention which
company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged
against the employees. During the hearing or conference, the employees are given the chance to defend
themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this
conference or hearing could be used by the parties as an opportunity to come to an amicable settlement.
 In the instant case, KKTI admits that it had failed to provide respondent with a "charge sheet." However, it
maintains that it had substantially complied with the rules, claiming that "respondent would not have
issued a written explanation had he not been informed of the charges against him." The Court is not
convinced. First, respondent was not issued a written notice charging him of committing an infraction.
Second, even assuming that petitioner KKTI was able to furnish respondent an Irregularity Report
notifying him of his offense, such would not comply with the requirements of the law. Third, no hearing
was conducted.

Felix Perez v. Corona

G.R. No. 152048 April 7, 2009
Facts:
 Acting on an alleged unsigned letter regarding anomalous transactions at the Shipping Section,
respondents formed a special audit team to investigate the matter. It was discovered that the Shipping
Section jacked up the value of the freight costs for goods shipped and that the duplicates of the shipping
documents allegedly showed traces of tampering, alteration and superimposition.
 Consequently, petitioners were placed on preventive suspension for 30 days for their alleged involvement
in the anomaly. Their suspension was extended for 15 days twice.
 In line with the recommendation of the AVP-Audit as presented in his report and the subsequent filing of
criminal charges against the parties mentioned petitioners were dismissed from the service for having
falsified company documents.
Issue:
 Whether or not respondents failed to observe due process in the dismissal of petitioners.
Held:
 Subject to the constitutional right of workers to security of tenure and their right to be protected against
dismissal except for a just and authorized cause and without prejudice to the requirement of notice under
Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for termination and shall afford the latter
ample opportunity to be heard and to defend himself with the assistance of his representative if
he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set
by the Department of Labor and Employment.
 Petitioners were neither apprised of the charges against them nor given a chance to defend themselves.
They were simply and arbitrarily separated from work and served notices of termination in total disregard
of their rights to due process and security of tenure. The labor arbiter and the CA correctly found that
respondents failed to comply with the two-notice requirement for terminating employees.

Paz Martin Jo v. NLRC

G.R. No. 121605 February 2, 2000
Facts:
 Petitioners designated private respondent as caretaker of the their barbershop as the former caretaker
became physically unfit. Private respondent's duties as caretaker, in addition to his being a barber, were:
(1) to report to the owners of the barbershop whenever the airconditioning units malfunctioned and/or
whenever water or electric power supply was interrupted, (2) to call the laundry woman to wash dirty
linen; (3) to recommend applicants for interview and hiring; (4) to attend to other needs of the shop. For
this additional job, he was given an honorarium equivalent to one-third (1/3) of the net income of the
shop.
 Private respondent had an altercation with his co-barber which became serious so that private
respondent reported the matter to the labor department. The labor official immediately summoned private
respondent and petitioners to a conference but found out that the dispute was not between private
respondent and petitioners; rather, it was between the former and his fellow barber. Accordingly, the
officer directed petitioners' counsel to thresh out the problem. During the mediation meeting, a new twist
was added. Despite the assurance that he was not being driven out as caretaker-barber, private
respondent demanded payment for several thousand pesos as his separation pay and other monetary
benefits. In order to give the parties enough time to cool off, another conference was held but private
respondent did not appear in such meeting anymore.
 On January 12, 1993, private respondent filed a complaint for illegal dismissal with prayer for payment of
separation pay, other monetary benefits, attorney's fees and damages. Significantly, the complaint did not
seek reinstatement as a positive relief.
Issue:
 Whether or not private respondent was dismissed from or had abandoned his employment.
Held:
 In the case at bar, the labor arbiter was convinced that private respondent was not dismissed but left his
work on his own volition because he could no longer bear the incessant squabbles with his co-worker.
Nevertheless, public respondent did not give credence to petitioners' claim that private respondent
abandoned his job. On this score, public respondent gravely erred as hereunder discussed.
 In this case, the following circumstances clearly manifest private respondent's intention to sever his ties
with petitioners. First, private respondent even bragged to his co-workers his plan to quit his job at
Cesar's Palace Barbershop and Massage Clinic as borne out by the affidavit executed by his former co-
workers.11 Second, he surrendered the shop's keys and took away all his things from the shop. Third, he
did not report anymore to the shop without giving any valid and justifiable reason for his absence. Fourth,
he immediately sought a regular employment in another barbershop, despite previous assurance that he
could remain in petitioners' employ. Fifth, he filed a complaint for illegal dismissal without praying for
reinstatement.
 Public respondent's assertion that the institution of the complaint for illegal dismissal manifests private
respondent's lack of intention to abandon his job is untenable. The rule that abandonment of work is
inconsistent with the filing of a complainant for illegal dismissal is not applicable in this case.
Such rule applies where the complainant seeks reinstatement as a relief. Corollarily, it has no
application where the complainant does not pray for reinstatement and just asks for separation
pay instead as in the present case. It goes without saying that the prayer for separation pay, being the
alternative remedy to reinstatement, contradicts private respondent's stance. That he was illegally
dismissed is belied by his own pleadings as well as contemporaneous conduct.

Benedicto Cajucom v. TPI Philippines

GR 149090 February 11, 2005
Facts:
 Respondents employed Atty. Benedicto A. Cajucom VII, petitioner, as Vice-President for Legal
Affairs. As a result of the economic slowdown, respondent TP Cement, having no viable
projects, eventually was dissolved. With respect to respondent TP Vinyl, it shifted its business
from production to marketing and trading of Thai Petrochemical products. Thus, respondents
implemented cost-cutting measures resulting in the retrenchment or termination from the service
of their employees, including petitioner.
 On December 3, 1998, respondents sent petitioner a notice terminating his services effective
December 30, 1998. Simultaneously, respondents, on the same day, filed with the Department
of Labor and Employment (DOLE) an "Establishment Termination Report" of petitioner’s
retrenchment from the service. Petitioner contested respondents’ action, claiming that his
retrenchment was based erroneously on respondents’ probable losses, instead of their actual,
substantial and imminent losses
Issue:
 Whether or not petitioner’s retrenchment was valid and legal.
Held:
 To be valid, three requisites must concur, as provided in Article 283 of the Labor Code,
as amended, namely: (1) The retrenchment is necessary to prevent losses and the same
is proven; (2) Written notice to the employees and to the DOLE at least one month prior
to the intended date thereof; and (3) Payment of separation pay equivalent to one month
pay or at least ½ month pay for every year of service, whichever is higher.
 Petitioner insists that actual, not probable losses, justify retrenchment. Article 283 (quoted
earlier) entails, among others, only a situation where there is "retrenchment to prevent losses."
 The phrase "to prevent losses" means that retrenchment or termination from the service
of some employees is authorized to be undertaken by the employer sometime before the
losses anticipated are actually sustained or realized. This is the situation in the case at
bar. Evidently, actual losses need not set in prior to retrenchment.
 As mandated by Article 283, the employer shall serve notice of retrenchment to prevent losses
on the worker and the DOLE at least one month before the intended date thereof.

Bio Quest Marketing v. Edmund Rey

GR 181503 September 18, 2009
Facts:
 Respondent was hired by petitioner Bio Quest Marketing, Inc as its Area Collector. As Area Collector, he
was tasked to collect payment for various veterinary products sold to feedmill companies, piggery and
poultry farms within his area of assignment.
 Allegedly as part of its cost cutting measures brought about by a decline in its sales receipts and
collections, petitioner furnished the Department of Labor and Employment (DOLE) a copy of the
retrenchment notice on September 3, 2003.1 And by letter of August 30, 2003 which was received by
respondent, petitioner terminated his services on September 29, 2003.
 Claiming that he was dismissed without a valid cause and the observance of due process, respondent
filed a complaint for illegal dismissal against petitioner.
Issue:
 Whether or not petitioner lawfully exercised their management prerogative making the dismissal valid.
Held:
 Even if business losses were indeed sufficiently proven, the employer must still prove that
retrenchment was resorted to only after less drastic measures such as the reduction of both
management and rank-and-file bonuses and salaries, going on reduced time, improving manufacturing
efficiency, reduction of marketing and advertising costs, faster collection of customer accounts, reduction
of raw materials investment and others, have been tried and found wanting.
 In the case at bar, petitioner did not adduce evidence to prove that retrenchment was resorted to because
other measures were undertaken to abate actual or future business losses but thus failed.

Jo Cinema Corporation v. Lolita Abellana

GR 132837 June 28, 2001
Facts:
 Petitioner is a duly organized corporation engaged in the movie business where private respondent was
employed as theater porter.
 Petitioner issued a memorandum reminding all ticket sellers not to encash any check from their cash
collections and to turn-over all cash collections to the petitioner. On four (4) consecutive days, private
respondent encashed, on behalf of her friend Luzviminda Silva, four (4) Banco del Norte Checks with
Emperatriz Ynrig, ticket seller of petitioner, assigned at Ultra Vistarama and Seven Arts Theater. When
the said checks were deposited to the account of the petitioner, they were dishonored for insufficiency of
funds.
 Consequently, private respondent was sent a show-cause memorandum requiring her to explain why no
disciplinary action should be taken against her relative to the checks in question, which she failed to
comply. She was likewise placed under preventive suspension for a period of twenty (20) days.
 Later, petitioner directed private respondent to appear and present her side at the administrative
investigation scheduled. Private respondent attended the said investigation where she admitted to have
encashed the checks without petitioners' permission.
 While the case was being deliberated upon by the petitioners, private respondent filed a pro forma
complaint for illegal dismissal and non-payment of benefits. Private respondent claims that on the day she
was suspended, Atty. Tito Pintor, Jr., original counsel for petitioners, summoned her to his office and was
advised to resign and pay the bounced checks' amount which respondent vehemently protested. On that
very same day she was told that she was dismissed from the service. Petitioners denied the allegations
and argued that private respondent was not dismissed but merely preventively suspended for twenty (20)
days. It added that even assuming that private respondent was dismissed, the dismissal was for a valid
 cause. Private respondent violated a company policy prohibiting the encashment of checks without her
employer's permission.
Issue:
 Whether or not the NLRC erred in holding that the respondent was illegally dismissed despite of its own
finding that respondent was only placed under preventive suspension
Held:
 Based on the aforesaid definition, it is clear that private respondent was not dismissed from the service
but was merely placed under preventive suspension. Her suspension cannot be construed as a dismissal
since the cessation from work is only temporary. Moreover, private respondent could not have been
dismissed because a formal investigation was still being conducted. In fact, she even attended said
investigation where she admitted having encashed the checks. If she was indeed dismissed on said date,
as she claims, petitioners would not have continued with the investigation. Undoubtedly, private
respondent pre-empted the outcome of the investigation by filing a complaint for illegal dismissal.
 The findings of the labor arbiter that private respondent was constructively dismissed by the petitioner is
likewise erroneous. A constructive discharge is defined as a quitting because continued
employment is rendered impossible, unreasonable or unlikely; as an offer involving demotion in
rank and a diminution in pay.

Vicente Sy v. Court of Appeals

GR 142293 February 27, 2003
Facts:
 Private respondent Sahot started working as a truck helper for petitioners’ family-owned trucking business
named Vicente Sy Trucking. Subsequently, he became a truck driver of the same family business,
renamed T. Paulino Trucking Service, later 6B’s Trucking Corporation, and thereafter known as SBT
Trucking Corporation. Throughout all these changes in names and for 36 years, private respondent
continuously served the trucking business of petitioners.
 When Sahot was already 59 years old. He had been incurring absences as he was suffering from various
ailments. Particularly causing him pain was his left thigh, which greatly affected the performance of his
task as a driver. He inquired about his medical and retirement benefits with the Social Security System
(SSS), but discovered that his premium payments had not been remitted by his employer.
 Sahot had filed a week-long leave where he was medically examined and treated for different ailments.
On said ground, Belen Paulino of the SBT Trucking Service management told him to file a formal request
for extension of his leave. At the end of his week-long absence, Sahot applied for extension of his leave
for a whole month. It was at this time when petitioners allegedly threatened to terminate his employment
should he refuse to go back to work.
 Sahot found himself in a dilemma. He was facing dismissal if he refused to work, But he could not retire
on pension because petitioners never paid his correct SSS premiums. The fact remained he could no
longer work as his left thigh hurt abominably. Petitioners ended his dilemma. They carried out their threat
and dismissed him from work
Issue:
 Whether or not there was valid dismissal.
Held:
 Article 284 of the Labor Code authorizes an employer to terminate an employee on the ground of
disease. Art. 284 provides that 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 the health of his co-employees. However, in order to validly terminate
employment on this ground, Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of the Labor
Code requires that where the employee suffers from a disease and his continued employment is
prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not
terminate his employment unless there is a certification by competent public health authority that the
disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even
with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall
not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such
employee to his former position immediately upon the restoration of his normal health.
 Since the burden of proving the validity of the dismissal of the employee rests on the employer,
the latter should likewise bear the burden of showing that the requisites for a valid dismissal due
to a disease have been complied with. In the absence of the required certification by a competent
public health authority, this Court has ruled against the validity of the employee’s dismissal. It is
therefore incumbent upon the private respondents to prove by the quantum of evidence required
by law that petitioner was not dismissed, or if dismissed, that the dismissal was not illegal;
otherwise, the dismissal would be unjustified. This Court will not sanction a dismissal premised on
mere conjectures and suspicions, the evidence must be substantial and not arbitrary and must be
founded on clearly established facts sufficient to warrant his separation from work.
 In the case at bar, the employer clearly did not comply with the medical certificate requirement before
Sahot’s dismissal was effected.

Globe-Mackay v. NLRC
GR 82511 March 3, 1992
Facts:
 Petitioner, prompted by reports that company equipment and spare parts under the custody of
Imelda Saldivar were missing, caused the investigation of the latter's activities. The report
prepared by the company's internal auditor, indicated that Saldivar had entered into a
partnership styled Concave Commercial and Industrial Company with Richard A. Yambao,
owner and manager of Elecon, a supplier of petitioner often recommended by Saldivar. The
report also disclosed that Saldivar had taken petitioner's missing Fedders airconditioning unit for
his own personal use without authorization and also connived with Yambao to defraud petitioner
of its property. The airconditioner was recovered only after petitioner GMCR filed an action for
replevin against Saldivar.
 Consequently, petitioner placed private respondent Salazar under preventive suspension for
one (1) month, giving her thirty (30) days within which to, explain her side. But instead of
submitting an explanations three (3) days later, private respondent filed a complaint against
petitioner for illegal suspension. Thereafter, petitioner notified her in writing that she was
considered dismissed in view of her inability to refute and disprove these findings.
Issue:
 Whether or not the Labor Tribunal committed grave abuse of discretion in holding that the
suspension and subsequent dismissal of private respondent was illegal.
Held:
 The investigative findings of Mr. Maramara, which pointed to Delfin Saldivar's acts in conflict
with his position as technical operations manager, necessitated immediate and decisive action
on any employee closely, associated with Saldivar. The suspension of Salazar was further
impelled by the discovery of the missing Fedders airconditioning unit inside the apartment
private respondent shared with Saldivar. Under such circumstances, preventive suspension was
the proper remedial recourse available to the company pending Salazar's investigation. By
itself, preventive suspension does, not signify that the company has adjudged the employee
guilty of the charges she was asked to answer and explain. Such disciplinary measure is
resorted to for the protection of the company's property pending investigation any
alleged malfeasance or misfeasance committed by the employee.
 Over time, the following reasons have been advanced by the Court for denying reinstatement
under the facts of the case and the law applicable thereto; that reinstatement can no longer be
effected in view of the long passage of time (22 years of litigation) or because of the realities of
the situation; or that it would be "inimical to the employer's interest; " or that reinstatement may
no longer be feasible; or, that it will not serve the best interests of the parties involved; or that
the company would be prejudiced by the workers' continued employment; or that it will not serve
any prudent purpose as when supervening facts have transpired which make execution on that
score unjust or inequitable or, to an increasing extent, due to the resultant atmosphere of
 "antipathy and antagonism" or "strained relations" or "irretrievable estrangement" between the
employer and the employee.
 In such cases, it should be proved that the employee concerned occupies a position
where he enjoys the trust and confidence of his employer; and that it is likely that if
reinstated, an atmosphere of antipathy and antagonism may be generated as to
adversely affect the efficiency and productivity of the employee concerned.
 There being no evidence to show an authorized, much less a legal, cause for the dismissal of
private respondent, she had every right, not only to be entitled to reinstatement, but ay well, to
full backwages. An employee who is unjustly dismissed from work shall be entitled to
reinstatement and to his full backwages.
 In the instant case, petitioner has predicated its dismissal of Salazar on loss of confidence. As
we have held countless times, while loss of confidence or breach of trust is a valid ground for
terminations it must rest and some basis which must be convincingly established.
 On close scrutiny, we agree with public respondent that such a circumstance did not create a
conflict of interests situation. As a systems analyst, Salazar was very far removed from
operations involving the procurement of supplies. Salazar's duties revolved around the
development of systems and analysis of designs on a continuing basis. In other words, Salazar
did not occupy a position of trust relative to the approval and purchase of supplies and company
assets.

Osmalik Bustamante v. NLRC

GR 111651 March 15, 1996
Facts:
 Respondent company is engaged in the business of producing high grade bananas. Petitioners
Bantayan, Bustamante, Sumonod and Bustamante were employed as laborers and harvesters
while petitioner Lamaran was employed as a laborer and sprayer in respondent company's
plantation. All the petitioners signed contracts of employment for a period of six (6) months from
2 January 1990 to 2 July 1990, but they had started working sometime in September 1989.
Previously, they were hired to do the same work for periods lasting a month or more, from 1985
to 1989. Before the contracts of employment expired, petitioners' employments were terminated
on the ground of poor performance on account of age, as not one of them was allegedly below
forty (40) years old.
Issue:
 Whether or not petitioners were illegally dismissed and public respondent gravely abused its
discretion removing the award of backwages in their favour.
Held:
 It is undisputed that petitioners were illegally dismissed from employment. Article 280 of the
Labor Code provides that the provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the
employment has been fired for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or where the work
or services to be performed is seasonal in nature and the employment is for the duration of the
season. An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, that, any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while such
activity exists.
 This provision draws a line between regular and casual employment, a distinction however often
abused by employers. The provision enumerates two (2) kinds of employees, the regular
employees and the casual employees. (1) Those engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer; and (2) those who
have rendered at least one year of service whether such service is continuous or broken.
 In the case at bar, petitioners were employed at various periods from 1985 to 1989 for the same
kind of work they were hired to perform in September 1989. Both the labor arbiter and the
respondent NLRC agree that petitioners were employees engaged to perform activities
necessary in the usual business of the employer. As laborers, harvesters or sprayers in
an agricultural establishment which produces high grade bananas, petitioners' tasks are
indispensable to the year-round operations of respondent company.
 We do not sustain public respondent's theory that private respondent should not be made to
compensate petitioners for backwages because its termination of their employment was not
made in bad faith. The act of hiring and re-hiring the petitioners over a period of time without
considering them as regular employees evidences bad faith on the part of private respondent.
The public respondent made a finding to this effect when it stated that the subsequent rehiring
of petitioners on a probationary status "clearly appears to be a convenient subterfuge on the
part of management to prevent complainants (petitioners) from becoming regular employees.

Nerissa Buenviaje v. Court of Appeals

GR 147806 November 12, 2002
Facts:
 Petitioners were former employees of Cottonway Marketing Corp. hired as promo girls for their
garment products. After their services were terminated as the company was allegedly suffering
business losses, petitioners filed with the NLRC a complaint for illegal dismissal, underpayment
of salary, and non-payment of premium pay for rest day, service incentive leave pay and
thirteenth month pay against Cottonway Marketing Corp. and Network Fashion Inc./JCT
International Trading.
 Later, the Labor Arbiter issued a Decision finding petitioners' retrenchment valid and ordering
Cottonway to pay petitioners' separation pay and their proportionate thirteenth month pay. On
appeal, the NLRC reversed the Decision of the Labor Arbiter and ordered the reinstatement of
petitioners without loss of seniority rights and other privileges. It also ordered Cottonway to pay
petitioners their proportionate thirteenth month pay and their full backwages inclusive of
allowances and other benefits, or their monetary equivalent computed from the time their
salaries were withheld from them up to the date of their actual reinstatement.
 Cottonway filed with the NLRC a manifestation stating that they have complied with the order of
reinstatement by sending notices requiring the petitioners to return to work, but to no avail; and
consequently, they sent letters to petitioners informing them that they have lost their
employment for failure to comply with the return to work order. Cottonway also filed a petition for
certiorari with the Supreme Court which was dismissed
Issue:
 Whether or not backwages should be computed from the time of their illegal dismissal until their
actual reinstatement.
Held:
 Under R.A. 6715, employees who are illegally dismissed are entitled to full backwages,
inclusive of allowances and other benefits or their monetary equivalent, computed from
the time their actual compensation was withheld from them up to the time of their actual
reinstatement. If reinstatement is no longer possible, the backwages shall be computed
from the time of their illegal termination up to the finality of the decision.
 Cottonway, before finally deciding to dispense with their services, did not give the petitioners the
opportunity to explain why they were not able to report to work. The records also do not bear
any proof that all the petitioners received a copy of the letters. Cottonway merely claimed that
some of them have left the country and some have found other employment. This, however,
does not necessarily mean that petitioners were no longer interested in resuming their
employment at Cottonway as it has not been shown that their employment in the other
companies was permanent. It should be expected that petitioners would seek other means of
income to tide them over during the time that the legality of their termination is under litigation.
Furthermore, petitioners never abandoned their suit against Cottonway. While the case was
pending appeal before the NLRC, the Court of Appeals and this Court, petitioners continued to
file pleadings to ensure that the company would comply with the directive of the NLRC to
reinstate them and to pay them full backwages in case said decision is upheld. Moreover, in his
reply to the company’s first letter, petitioners’ counsel expressed willingness to meet with the
company’s representative regarding the satisfaction of the NLRC decision.

Spouses Alwyn Ong Lim v. Legazpi Hope Christian School

GR 172818 March 31, 2009
Facts:
 Respondent Helen Sia, head teacher of the school’s Chinese department, verbally informed
petitioners that their employment with the school were to be terminated, without giving the
reasons therefor. Thus, petitioners filed their complaints for illegal dismissal and monetary
claims against the school and its officials. Respondent Ramon Sia, Vice Chairman of the
school’s Board of Directors, sent a letter to the petitioners stating that their three-year probation
had expired and that the school management had decided to discontinue their employment.
 Respondents claimed that petitioners were merely part-time teachers and thus they can be
dismissed even without waiting for the three-year probation period to lapse, as they never
acquired permanent status.
Issue:
 Whether or not petitioners were terminated without lawful and just cause or causes and in
violation of petitioners’ rights to due process of law.
Held:
 In University of Sto. Tomas v. NLRC, the Court ruled that for a private school teacher to
acquire permanent status in employment, the following requisites must concur: (1) the
teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years
of service; and (3) such service must have been satisfactory.
 A copy of the Teachers’ Guidelines of respondent school which, in part, state: 1. New Teachers:
a. New Teachers are on probation for three (3) years, within the duration, they must
submit a letter of re-application for each school year. After the expiration date of the
contract, a new one must be signed if it is sent to you. b. A full time new teacher is under
10-month contract only. If his/her performance is satisfactory, he/she will be rehired and
will be entitled to receive the salaries for the 2-month summer vacation.
 Considering that petitioners were new teachers, then in accordance with the above-quoted
guidelines their unwritten contracts were considered to be for one school year at a time, they
being required to submit a letter of re-application for each school year. After the end of each
school year, the school did not have any obligation to give them any teaching loads, they being
part-time teachers. That respondents did not give any teaching assignment to the petitioners
after the school year 2001-2002 did not amount to an actionable violation of petitioners’ right. It
did not amount to illegal dismissal.