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Thursday, December 6, 2012

FRANCISCO vs. NLRC Case Digest

500 SCRA 690 (2006)

Facts: Petitoner was hired by Kasei Corporation during the incorporation stage. She was
designated as accountant and corporate secretary and was assigned to handle all the accounting
needs of the company. She was also designated as Liason Officer to the City of Manila to secure
permits for the operation of the company.

In 1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment
of all employees and perform management administration functions. In 2001, she was replaced
by Liza Fuentes as Manager. Kasei Corporation reduced her salary to P2,500 per month which
was until September. She asked for her salary but was informed that she was no longer connected
to the company. She did not anymore report to work since she was not paid for her salary. She
filed an action for constructive dismissal with the Labor Arbiter.

The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the decision
while CA reversed it.

Issue: Whether or not there was an employer-employee relationship.

Ruling: The court held that in this jurisdiction, there has been no uniform test to determine the
existence of an employer-employee relation. Generally, courts have relied on the so-called right
of control test where the person for whom the services are performed reserves a right to control
not only the end to be achieved but also the means to be used in reaching such end. In addition
to the standard of right-of-control, the existing economic conditions prevailing between the parties,
like the inclusion of the employee in the payrolls, can help in determining the existence of an
employer-employee relationship.

The better approach would therefore be to adopt a two-tiered test involving: (1) the putative
employer’s power to control the employee with respect to the means and methods by which the
work is to be accomplished; and (2) the underlying economic realities of the activity or

In Sevilla v. Court of Appeals, the court observed the need to consider the existing economic
conditions prevailing between the parties, in addition to the standard of right-of-control like the
inclusion of the employee in the payrolls, to give a clearer picture in determining the existence of
an employer-employee relationship based on an analysis of the totality of economic
circumstances of the worker.

Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services
performed are an integral part of the employer’s business; (2) the extent of the worker’s
investment in equipment and facilities; (3) the nature and degree of control exercised by the
employer; (4) the worker’s opportunity for profit and loss; (5) the amount of initiative, skill,
judgment or foresight required for the success of the claimed independent enterprise; (6) the
permanency and duration of the relationship between the worker and the employer; and (7) the
degree of dependency of the worker upon the employer for his continued employment in that line
of business. The proper standard of economic dependence is whether the worker is dependent
on the alleged employer for his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation
because she was under the direct control and supervision of Seiji Kamura, the corporation’s
Technical Consultant. It is therefore apparent that petitioner is economically dependent on
respondent corporation for her continued employment in the latter’s line of business.

There can be no other conclusion that petitioner is an employee of respondent Kasei Corporation.
She was selected and engaged by the company for compensation, and is economically
dependent upon respondent for her continued employment in that line of business. Her main job
function involved accounting and tax services rendered to Respondent Corporation on a regular
basis over an indefinite period of engagement. Respondent Corporation hired and engaged
petitioner for compensation, with the power to dismiss her for cause. More importantly,
Respondent Corporation had the power to control petitioner with the means and methods by
which the work is to be accomplished.



Chavez vs NLRC, Supreme Packaging Inc, and Alvin Lee

GR No. 146530 January 17, 2005
 The respondent company, Supreme Packaging Inc., is in the business of manufacturing
cartons and other packaging materials for export and distribution.
 The petitioner, Pedro Chavez, was a truck driver (from October 25, 1984) tasked to deliver
the respondent company’s products to its various customers.
 The respondent furnished petitioner with a truck that all deliveries were made in accordance
with the routing slips issued by the respondent company indicating the order, time and
urgency of delivery.
 On 1992, the petitioner expressed his desire to avail the benefits that a regular employee
were receiving such as overtime pay, nightshift differential pay, and 13th month pay, among
others but nothing was complied.
 On February 20, 1995, petitioner filed a complaint for regularization with the Regional
Arbitration Branch No. III of NLRC in San Fernando, Pampanga. Before the case could be
heard, respondent terminated the services of the petitioner.
 Hence, the petitioner filed an amended complaint for illegal dismissal, unfair labor practice
and non-payment of overtime pay, nightshift differential, and 13th month pay, among others.
Issue: Whether there exists an employer-employee relationship?
 Yes an employer-employee do exist. The elements to determine the existence of an
employment relationship are: (1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the employer’s power to control the
employee’s conduct. The most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to be done, but also as to the
means and methods to accomplish it. First. Undeniably, it was the respondents who
engaged the services of the petitioner without the intervention of a third party. Second.
Wages are defined as “remuneration or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, which is payable by an
employer to an employee under a written or unwritten contract of employment for work done
or to be done, or for service rendered or to be rendered. The petitioner is paid on a per trip
basis is not significant. This is merely a method of computing compensation. Third. The
respondent’s power to dismiss the petitioner was inherent in the fact that they engaged the
services of the petitioner as truck driver. They exercised this power by terminating the
petitioner’s services albeit in the guise of severance of contractual relation due allegedly to
the latter’s breach of his contractual obligation. Fourth. Compared to an employee, an
independent contractor is one who carries on a distinct and independent business and
undertakes to perform the job, work or service on its own account and under its own
responsibility according to its own manner and method, free from the control and direction
of the principal in all matters connected with the performance of the work except as to the
results thereof. Hence while an independent contractor enjoys independence and freedom
from the control and supervision of his principal. An employee is subject to the employer’s
power to control the means and methods by which the employee’s work is to be performed
and accomplished. A careful review of the records shows that the latter performed his work
under the respondents’ supervision and control. The existence of an employer-employee
relationship cannot be negated by expressly repudiating it in a contract and providing
therein that the employee is an independent contractor when the facts clearly show
otherwise. Employment status is defined by law and not by what the parties say it should




Private respondents were engaged by petitioner for the latters operations in the Technical
Operations Center as Transmitter/VTR men, as Maintenance staff and as Cameramen On July
19 1999 due to the miserable working conditions private respondents were forced to file a
complaint against petitioner before the NLRC Regional Arbitration Branch No. VII Cebu City.

Private respondents filed an amended complaint raising the following additional issues of 1)
Unfair Labor Practice; 2) Illegal dismissal; and 3) Damages and Attorneys fees.

An amicable settlement between the parties was set but the same proved to be futile.

The Labor Arbiter dismissed the complaint of respondents for illegal dismissal and unfair labor
practice, but held petitioner liable for 13th month pay.

The NLRC reversed the Decision of the Labor Arbiter, and held that

a) All complainants are regular employees with respect to the particular activity to which they
were assigned, until it ceased to exist. As such, they are entitled to payment of separation pay
computed at one (1) month salary for every year of service;
b) They are not entitled to overtime pay and holiday pay; and
c) They are entitled to 13th month pay, night shift differential and service incentive leave pay.

When Petitioner elevated the case to the CA via a Petition for Certiorari, it rendered its Decision
denying the petition for lack of merit. Hence, this present Petition for Review on Certiorari.

Did the CA err in finding the respondents as regular employees of the petitioner?

Did the CA err in awarding separation pay to the respondents absent a finding that
respondents were illegally dismissed?


Respondents claim that they are regular employees of petitioner GMA Network, Inc. The latter,
on the other hand, interchangeably characterize respondents employment as project and fixed
period/fixed term employment.

ARTICLE 280. Regular and casual employment. 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 fixed 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 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 actually

Pursuant to the above-quoted Article 280 of the Labor Code, employees performing activities
which are usually necessary or desirable in the employers usual business or trade can either be
regular, project or seasonal employees, while, as a general rule, those performing activities not
usually necessary or desirable in the employers usual business or trade are casual employees.
The consequence of the distinction is found in Article 279 of the Labor Code, which provides:

ARTICLE 279. Security of tenure. In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement.

On the other hand, the activities of project employees may or may not be usually necessary or
desirable in the usual business or trade of the employer.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within
the regular business of the corporation. Such a job or undertaking must also be identifiably
separate and distinct from the ordinary or regular business operations of the employer. The job
or undertaking also begins and ends at determined or determinable times. ALU-TUCP v.
National Labor Relations Commission, G.R. No. 109902, August 2, 1994

The jobs and undertakings are clearly within the regular or usual business of the employer
company and are not identifiably distinct or separate from the other undertakings of the
company. There is no denying that the manning of the operations center to air commercials,
acting as transmitter/VTR men, maintaining the equipment, and acting as cameramen are not
undertakings separate or distinct from the business of a broadcasting company.

In sum, we affirm the findings of the NLRC and the Court of Appeals that respondents are
regular employees of petitioner. As regular employees, they are entitled to security of tenure
and therefore their services may be terminated only for just or authorized causes. Since
petitioner failed to prove any just or authorized cause for their termination, we are constrained to
affirm the findings of the NLRC and the Court of Appeals that they were illegally dismissed.

Since the respondents were illegally dismissed, they entitled to separation pay in lieu of

As regards night shift differential, the Labor Code provides that every employee shall be paid
not less than ten percent (10%) of his regular wage for each hour of work performed between
ten o'clock in the evening and six o'clock in the morning. LABOR CODE, Article 86

As employees of petitioner, respondents are entitled to the payment of this benefit in

accordance with the number of hours they worked from 10:00 p.m. to 6:00 a.m., if any.

The matter of attorney's fees cannot be touched once and only in the fallo of the decision, else,
the award should be thrown out for being speculative and conjectural. In the absence of a
stipulation, attorney's fees are ordinarily not recoverable; otherwise a premium shall be placed
on the right to litigate. They are not awarded every time a party wins a suit.

In the case at bar, the factual basis for the award of attorney's fees was not discussed in the
text of NLRC Decision. Thus, the Court constrained to delete the same.


Petitioners Iluminada Buiser, Ma. Cecilia Rilloacuña, and Ma. Mercedes Intengan all entered
intoan eighteen-month probationary employment contract with private respondent
General TelephoneDirectory Company (GTPD), as sales representatives charged with
soliciting advertisements to include inthe telephone directories. All petitioners were terminated
after the provisionary period (May 1981), onthe ground of failing to meet their sales quotas
that were set by respondent company. In response totheir termination, petitioners filed before
the NCR Ministry of Labor of and Employment a complaint forillegal dismissal with claims
for backwages. However, the petition was denied in a decision by theRegional Director
and the same was affirmed by herein respondent Deputy Minister of Labor
VicenteLeogardo, ruling that (a) they have not attained regular status; (b) the stipulated
probationary period wasvalid; and (c), that the termination was valid because they have not
reached their required sales quotasset by the GTPD. Petitioners filed before the Supreme
Court a petition for certiorari, contending that respondent DeputyMinister Leogardo committed
grave abuse of discretion in rendering the decision in favor of the privaterespondent and that
as provided for by the Labor Code, probationary period cannot exceed 6 months,therefore the
probationary period of GTPD was illegal. ISSUE: Whether or not the stipulated eighteen month
probationary period is violative of the Labor Code.HELD: The Supreme Court rejects the
petitioner’s contentions. While the Labor Code, specifically Article282, provides that
probationary periods cannot exceed 6 months, it still allows the both employer andemployee
to stipulate the terms of the employment, provided that they can come into agreement. Giventhat
both petitioner and private respondent came into agreement (by signing and agreeing) that the
18month probationary period is the law between them, petitioners cannot impugn this by
invoking theprovision of the Labor Code in their favor. Additionally, the grounds for their
dismissal were just, becauseit was proven in the records that they did in fact failed to
meet their sales quotas set by privaterespondent GTPD in the employment contract.
Hence, petition is dismissed for lack of merit.

Republic of the Philippines



G.R. No. 168421 June 8, 2007





This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Decision,1 dated 18 April 2005, rendered by the Court of Appeals, affirming the
Resolution,2 promulgated by the National Labor Relations Commission (NLRC) on 15 May
2003. The Court of Appeals, in its assailed Decision, sustained as valid the petitioner’s
dismissal from her employment with St. Luke’s Medical Center (SLMC).

Petitioner Jennifer Fabello Pasamba was employed as a staff nurse by SLMC on 3 July 2001 on
a probationary status for a maximum of six months. On 15 October 2001, Dr. Pacita J. M.
Lopez, Assistant Chairman of the Department of Pediatrics, filed a Complaint with Lydia
Cabigao, the Vice President for Nursing, against the petitioner for uttering slanderous remarks
against her.3 In her complaint, Dr. Lopez attached a letter, dated 10 October 2001, written by
Hazel S. Cabales, the mother of a patient, relaying an incident wherein petitioner allegedly
made the following remarks against Dr. Lopez4 :
"Bakit si Dra. Lopez pa ang napili mong "pedia" eh ang tanda-tanda na n’un? x x x Alam mo ba,
kahit wala namang diperensya yung baby, ipinapa-isolate nya? Minsan nga, meron bagong
baby siyang pasyente na ipinasok dito, sabi ko, bah, himala! Walang ikinabit sa kanya. Tapos,
kinabukasan . . . kinabitan din pala!"

On 16 October 2001, SLMC issued a Memorandum requiring petitioner to reply in writing to Dr.
Lopez’s complaint.5

In a Letter,6 dated 18 October 2001, petitioner, thru counsel, denied making the statement,
which Cabales attributed to her. Petitioner also claimed that Cabales had merely concocted the
story after petitioner barred Cabales from staying in the Intermediate Maternity Care Unit
(IMCU), since visitors were not allowed to do so.

SLMC also conducted a hearing on 19 October 2001, wherein the petitioner was given an
opportunity to be heard and confront Cabales, who was then present. During the hearing,
petitioner stated that she had nothing more to add to her letter, dated 18 October 2001.

Another Memorandum7 was sent to the petitioner by SLMC on 25 October 2001, directing her to
explain why disciplinary action should not be taken against her for violating Rule IV, Article 2 of
the SLMC Code of Discipline:

a) Libelous utterances or publications which tend to cause dishonor, discredit, contempt to the
hospital, to its employees, customers and officers; or

b) Slanderous utterances to cause embarrassment to the hospital, to its employees, customers

and officers.

In Reply to the 25 October 2001 memorandum, petitioner sent a Letter8 dated 29 October 2001
to SLMC, wherein she adopted the explanation she gave in her letter dated 18 October 2001,
and demanded a reinvestigation.

On 7 November 2001, SLMC notified petitioner, thru a Letter,9 that she was found guilty of
uttering slanderous and derogatory remarks against Dr. Lopez. As a consequence, her
employment with the hospital was terminated.

On 21 December 2001, petitioner filed a Complaint for illegal dismissal before the Labor Arbiter.
In her Position Paper,10 petitioner attached the statements of Veronica A. Ramos and Mary
Jean Parcon, both dated 21 November 2001. In her Statement,11 Ramos recounted an incident
wherein she advised the husband of Hazel Cabales not to stay in the vicinity of IMCU outside
visiting hours. Parcon, on the other hand averred in her Statement12 that in a conversation
which she overheard on 7 September 2001 between Cabales and petitioner, Dr. Lopez was
never mentioned.

Petitioner also attached a Statement13 made by Evengeline Aguilan Cambri commending

petitioner for her professional attitude and alleging that she never heard petitioner disparage Dr.
Lopez. Further attached were the statements made by Nayma Magallanes and Charito Cruz,
former patients whose newborn children were also placed under the petitioner’s care, to the
effect that they were highly satisfied with the services of the petitioner.14
SLMC, on its part, presented the Employment Contract, as evidence of the petitioner’s
probationary status.15 It also alleged that petitioner was informed of the standards by which
probationary employees are evaluated and the rules which all employees are required to comply
with during a seminar held for this purpose. To prove this, it presented the attached copies of
the Attendance Sheet, the evaluation form which the petitioner filled out and a Certification,
dated 3 January 2002, showing that she attended the seminar and received a copy of the SLMC
Code of Discipline.16

The Labor Arbiter dismissed the complaint and upheld the validity of the petitioner’s termination
after finding that petitioner uttered the slanderous remarks against Dr. Lopez. The various
statements made in behalf of the petitioner to the effect that the affiants never heard the
petitioner utter the slanderous words were considered by the Labor Arbiter as inconclusive in
proving that petitioner never actually uttered these words. Cabales, on the other hand, did not
have any motive to fabricate the statements she attributed to the petitioner, whom Cabales
positively identified and confronted during the company hearing. Thus, petitioner’s dismissal
was based on sufficient grounds. The Labor Arbiter ordered in its Decision, dated 24 April 2002,
that17 :

WHEREFORE, this case is hereby DISMISSED for lack of merit. For the same reason, so are
respondents’ counterclaims.

Petitioner filed an appeal before the NLRC, which merely affirmed, in a Resolution dated 15
May 2003, the decision rendered by the Labor Arbiter on 24 April 2002.18 Thereafter, petitioner
filed a Motion for Reconsideration, which was denied by the NLRC in another Resolution on 12
August 2003.19

On appeal, the Court of Appeals affirmed the NLRC Resolution, dated 15 May 2003. It ruled that
the SLMC dismissed the petitioner for failure to meet the reasonable standards for
regularization when it violated the company rule against slanderous utterances, standards which
were conveyed to the petitioner when she was hired. In the decretal portion of its Decision, the
Court of Appeals ruled that20 :

WHEREFORE, premises considered, petition for certiorari is hereby DISMISSED.

ACCORDINGLY, the Decision dated May 15, 2003 of the NLRC affirming the Decision of the
Labor Arbiter dated April 24, 2002 dismissing the complaint for illegal dismissal for lack of merit,
and the Order dated August 12, 2003 denying petitioner’s motion for reconsideration, are
hereby AFFIRMED.

Hence, the present petition, in which the following issues were raised21 :







The petition is without merit.

The factual findings of administrative agencies are generally held to be binding and even final
as long as they are supported by substantial evidence in the record of the case.22 This is
especially true in this case where the Labor Arbiter, the NLRC and the Court of Appeals are in
full agreement as to the facts. No rule is more settled than that this Court is not a trier of facts.
Absent any showing that the administrative body acted without jurisdiction or in excess of its
jurisdiction, the findings of facts shall not be disturbed.23

There is no reason to overturn the factual findings of the Labor Arbiter, the NLRC and the Court
of Appeals in this case, all of which have unanimously declared that petitioner was guilty of
uttering the slanderous remarks against Dr. Lopez. The evidence on record supports this

Cabales, a disinterested person, had attested to the fact that the petitioner made statements
about Dr. Lopez that were clearly defamatory. Cabales even appeared during the hearing held
on 19 October 2001, so that petitioner could confront her. Although petitioner was given the
opportunity to question Cabales, she failed to do so. Moreover, despite petitioner’s allegations
to the contrary, Cabales does not appear to have any motive to fabricate her accusation against
the petitioner.

Petitioner’s self-serving allegation that Cabales held a grudge against the petitioner is
unconvincing. It is unlikely that Cabales reported the incident to Dr. Lopez simply because
petitioner prohibited Cabales from lingering within restricted premises. Petitioner, herself, sought
to prove that other nurses had prohibited Cabales and her husband from doing the same. Yet,
there is no showing that Cabales had vengefully filed any complaint against the other nurses
that allegedly warned her off the restricted premises.

Furthermore, the positive statements of Cabales cannot be defeated by the suspiciously evasive
and indirect allegations of the petitioner’s witnesses that defamatory statements against Dr.
Lopez were not made within their hearing. Such statements, even if true, would not discount the
fact that these statements were truly made, although unheard by the witnesses.

Likewise, the statements submitted by the petitioner, made on her behalf by former patients,
commending her performance as a nurse, do not put into question the incident related by
Cabales, wherein petitioner uttered words which were harmful to the reputation of Dr. Lopez.
Evidently, petitioner failed to present any evidence that would sufficiently overturn the
unanimous findings of the Labor Arbiter, the NLRC and the Court of Appeals that, indeed, she
made slanderous statements against Dr. Lopez, which she addressed to a former SLMC
patient, whose newborn child was at that time confined in SLMC.

Petitioner alleges that uttering slanderous statements is not related to her work as a nurse, and
therefore cannot effect her dismissal. To support this contention, petitioner cites the case of
Philippine Aeolus Automotive United Corporation v. National Labor Relations
Commission,24 where the Court held that for serious misconduct or improper behavior to warrant
the dismissal of a regular employee, the employee’s act must relate to the performance of the
employee’s duties. Petitioner’s theory is both unfounded and incorrect.

In the present case, petitioner was not dismissed for serious misconduct, which is among the
grounds for dismissing regular employees enumerated under Article 282 of the Labor Code.
Petitioner was a probationary employee, not a regular employee. A probationary employee is
one, who, for a given period of time, is being observed and evaluated to determine whether or
not he is qualified for a permanent position. A probationary appointment affords the employer an
opportunity to observe the skill, competence, as well as the attitude of a probationer.25 The
Labor Code assigns a separate provision, Article 281, and provides a different set of grounds for
the dismissal of probationary employees:


Probationary employment shall not exceed six (6) months from the date the employee started
working, unless it is covered by an apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular employee in accordance with reasonable
standards made known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular
employee. (Emphasis provided.)

The services of an employee hired on probationary basis may be terminated when he or she
fails to qualify as a regular employee in accordance with reasonable standards made known by
the employer to the employee at the time of his engagement. The law does not preclude the
employer from terminating the probationary employment, if the employer finds that the
probationary employee is not qualified for regular employment.26 As long as the termination was
made for reasons provided under Article 281 of the Labor Code before the expiration of the six-
month probationary period, the employer is well within its rights to sever the employer-employee
relationship. A contrary interpretation would contravene the clear meaning of the term
"probationary."27 The law in protecting the rights of the laborer authorizes neither the oppression
nor the self-destruction of the employer.28

The provision which states that "the probationary period shall not exceed six months" means
that the probationary employee may be dismissed for cause at any time before the expiration of
six months after hiring. If, after working for less than six months, he or she is found unfit for the
job, he or she can be dismissed. On the other hand, if such worker continues to be employed
longer than six months, he or she is considered as a regular employee and ceases to be a
probationary employee.29
There is no dispute that SLMC notified the petitioner of the standards she needed to comply
with for her continued employment. The Contract of Employment30 between SLMC and the
petitioner specifically provided for the strict compliance with SLMC’s Code of Conduct:

You will be under probation employment for a maximum of six months, within which period
SLMC will determine your suitability for the job including your work habits, personal
characteristics and your fitness prior to regularization. Such appointment may be terminated at
any time at the discretion of management, should you fail to qualify as a regular employee
based on SLMC work standards.


You are subject to strictly abide by SLMC’s Code of Discipline and its policies and procedures
formulated by the organization and all such rule and policies as may from time to time be issued
by the organization.

You will be issued a copy of these rules and policies at the start of your probationary
employment. (Emphasis provided.)

There is no dispute that petitioner was informed that uttering slanderous remarks is an infraction
of the rules and regulations of SLMC. Petitioner and her co-employees, as new employees of
SLMC, attended an orientation seminar entitled, "Induction to St. Luke’s Family," wherein the
standards which the employees were required to meet were discussed. Petitioner’s attendance
was evidenced by the Internal Customer Satisfaction Index Evaluations Form31 and Attendance
Sheet.32 The Certification33 issued by SLMC’s Section Manager for Labor Relations, Luvie de
los Reyes and the Department Manager for Training Development and Education, Geraldine
Dimalibot, affirmed that the coverage of the seminar included the provisions of the Code of
Discipline. Rule IV, Article 2 of the SLMC Code of Discipline reads:

c) Libelous utterances or publications which tend to cause dishonor, discredit, contempt to the
hospital, to its employees, customers and officers; or

d) Slanderous utterances to cause embarrassment to the hospital, to its employees, customers

and officers.

Petitioner’s allegation that uttering slanderous remarks is not related to her tasks as a staff
nurse deserves scant consideration. SLMC is engaged in a business whose survival is
dependent on the reputation of its medical practitioners. To impute unethical behavior and lack
of professionalism to a medical professional, to one who is also a hospital official, would be
inimical to the interests of SLMC. This would also show tremendous disloyalty on the part of the
employee who makes such derogatory statements. Moreover, the petitioner’s bad faith became
evident when, instead of addressing these disparaging remarks to the proper hospital officers,
she addressed them to a former patient, whose child was at that time a patient in SLMC and
entrusted to the care of the medical professional in question. An employer cannot be compelled
to retain an employee who is guilty of acts inimical to the interests of the employer. A company
has the right to dismiss employees guilty of acts of dishonesty and disloyalty, if only as a
measure of self-protection.34 Dismissal of an employee guilty of such a serious infraction would
be reasonable.
Petitioner also alleges that SLMC’s Code of Discipline penalizes the offense of making
"slanderous utterances" with a thirty-day suspension, and not dismissal. Such allegation would
be contrary to basic knowledge and common sense. Petitioner, in making these slanderous
utterances, violated the Code of Discipline, which contained the standards she knew she must
comply with before she could be accorded regular status. An employer, such as SLMC, cannot
be compelled to continue employing a probationary employee who, as early as three months
after she was hired, had shown herself inclined to violate the more serious of the company’s
rules. Petitioner cannot put herself on the same plane as regular employees, who have proven
their suitability to their work as well as their loyalty to their employers, and therefore, enjoy a
more secure tenure.

In the case relied on by the petitioner, Batangas Laguna Tayabas Bus Co. v. Court of
Appeals,35 the Court held that the employer cannot dismiss a regular employee for an offense to
which the company’s Service Manual assigned a vague penalty. Not only was the dismissal of
the offending employee specified, the employer also failed to comply with the requirements of
procedural due process. The aforementioned case, which involved a regular employee who
worked with the company for no less than eight years, is certainly not applicable to the present
case. Moreover, the records clearly show that petitioner was afforded sufficient notice and
hearing. SLMC issued the Memorandum, dated 16 October 2001, requiring the petitioner to
reply to the complaint filed against her. Thereafter, a company hearing, which petitioner
attended, was held on 19 October 2001. Lastly, SLMC notified the petitioner, thru a letter dated
7 November 2001, that her employment was terminated and explained the reasons therefor.

IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court AFFIRMS the
assailed Decision of the Court of Appeals, promulgated on 18 April 2005, declaring the
dismissal of the petitioner valid. Costs against the petitioner.


JAKA Food Processing vs. Pacot - GR No. 151378 Case Digest


Respondents were hired by JAKA until their termination on August 29, 1997 because the
Corporation was “in dire financial straits”. It was not disputed that they were terminated without
complying with the requirement under Art. 283 of the Labor Code regarding the service of notice
upon the employees and DOLE at least one month before the intended date of termination.


Whether or not full backwages and separation pay be awarded to respondents when employers
effected termination without complying with the twin notice rule.


The dismissal of the respondents was for an authorized cause under Article 283. A dismissal for
authorized cause does not necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the employer’s exercise of his
management prerogative, i.e. when the employer opts to install labor-saving devices, when he
decides to cease business operations or when… he undertakes to implement a retrenchment

Accordingly, it is wise to hold that:

1) if the dismissal is based on a 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
was initiate by an act imputable to the employee.

2) if the dismissal is based on an authorized cause but the employer fails 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. Thus, dismissal was upheld but ordered
JAKA to pay each of the respondents the amount of PhP 50,000.00 representing nominal
damages for non-compliance with statutory due process.

Friday, December 14, 2012

PLDT vs YLAGAN Case Digest
[G.R. No. 155645 November 24, 2006]


MAYFLOR T. YLAGAN, Respondent.

FACTS: In November 1992, respondent Mayflor T. Ylagan was hired as an accounting clerk in
the Cost Accounting Department (CAD) of petitioner PLDT. In January 1994, she was transferred
to the Revenue Auditing Department. Later, on July 3, 1995, she was brought back to the CAD to
perform the same accounting duties. Respondent claims that in May 1996, PLDT refused to renew
her employment unless she signed up with an employment agency known as Corporate Executive
Search, Inc. (CESI). She was allegedly constrained to sign an employment contract with the
agency in order to keep her job with PLDT. But on February 5, 1997, PLDT allegedly refused to
allow her to report for work since her employment contract with CESI had already expired.

PLDT, however, maintains that respondent was hired as a project employee assigned to the
Employment Payroll System Project from the onset of her employment. The project allegedly
started on September 21, 1992. It was discontinued in March 1997 when a new system was
developed to replace it. PLDT asserts that respondent’s project employment was covered by
contracts for the period of July 3, 1995 to October 2, 1995 and October 3, 1995 to January 2,
1996. Hence, respondent was not dismissed from her work; her employment contract merely
expired as of January 2, 1996. PLDT, however, did not explain why respondent had to sign up
with CESI in May 1996. Claiming that her regular employment was terminated without cause,
respondent filed a complaint for illegal dismissal.
ISSUE: Whether or not respondent is a project employee.

HELD: The SC held that project employee is assigned to carry out a specific project or
undertaking the duration and scope of which are specified at the time the employee is engaged
in the project. A project is a job or undertaking which is distinct, separate and identifiable from the
undertakings of the company. A project employee is assigned to a project which begins and ends
at determined or determinable times.

Various indicators convince us that respondent was not a project employee but a regular
employee who was illegally dismissed.

First, respondent worked continuously for PLDT from November 1992 to July 1995 without any
mention of a “project” to which she was specifically assigned. She was hired to perform accounting
duties which were not shown as distinct, separate and identifiable from the usual undertakings of
the company. Although essentially a telephone company, PLDT maintains its own accounting
department to which respondent was assigned.

Second, aside from its statement that respondent was hired as a project employee for the
Employment Payroll System Project which began in 1992, PLDT did not provide evidence of the
project employment contracts covering the period from November 1992 (when respondent was
hired) to July 1995. PLDT mentioned only two contracts but these pertained to her employment
period from July 1995 to January 1996.

Third, despite the supposed expiration of respondent’s project employment contract on January
2, 1996, respondent continued to work for PLDT until May 2, 1996 when respondent was required
to sign up with CESI.[12] Respondent worked for PLDT, under contract with CESI, until February
3, 1997. PLDT explained that it no longer allowed respondent to report for work by then since the
project was already done. But the project was only completed in March 1997.

Most important of all, based on the records, PLDT did not report the termination of respondent’s
supposed project employment to the Department of Labor and Employment as project employee.
Department Order No. 19 (as well as the old Policy Instructions No. 20) required employers to
submit a report of an employee’s termination to the nearest public employment office every time
his employment was terminated due to a completion of a project.[13] PLDT’s failure to file
termination reports was an indication that the respondent was not a project employee but a regular

The test to determine whether employment is regular or not is the reasonable connection between
the particular activity performed by the employee in relation to the usual business or trade of the
employer. Also, if the employee has been performing the job for at least one year, even if the
performance is not continuous or merely intermittent, the law deems the repeated and continuing
need for its performance as sufficient evidence of the necessity, if not indispensability of that
activity to the business. Thus, we held that where the employment of project employees is
extended long after the supposed project has been finished, the employees are removed from
the scope of project employees and are considered regular employees. While length of time may
not be the controlling test for project employment, it is crucial in determining if the employee is
hired for a specific undertaking to perform functions vital, necessary and indispensable to the
usual business of the company.

Even assuming that respondent was hired as a project employee from the onset, we have ruled
that “once such an employee has been: (1) continuously, as opposed to intermittently, re-hired by
the same employer for the same tasks or nature of tasks and (2) these tasks are vital, necessary
and indispensable to the usual business or trade of the employer, then the employee must be
deemed a regular employee. From the foregoing, the duration (of at least one year) and necessity
of respondent’s employment have been established. She was therefore a regular employee of
PLDT. As such, respondent was entitled to all the privileges and benefits attached to that status.

Petition is denied.

ABESCO Construction and Development Corporation vs. Ramirez GR No. 141168, 20

April 2006
Facts:The respondents were employees of Abesco from 1976-1992. In 1997, they filed 2
complaints of illegal dismissal against Abesco and its general manager, contending that they
are regular employees of the company as evidenced by their continuous engagement as
laborers, road roller operator, painters or drivers by Abesco. The respondents also indicate that
as regular employees they are entitled to claims for the non-payment of 13
thmonth, 5-day service incentive leave pay, premiums on holidays and rests days, and moral
and exemplary damages. The said complaints were later on consolidated by the Labor
Arbiter.Abesco, on the other hand, denies the allegations of the respondent employees. Abesco
argued that the respondents are project employees because their services are availed only
when the company had projects for completion. The company further added that as project
employees, the respondents do not have a security of tenure and consequently not entitled to a
separation pay upon termination.


Does continuous engagement and period of service sufficient to determine whether an

individual is a regular or project?

If not, what are other determinative factors to be considered? Ruling: The Labor Arbiter ruled
that the employees are regular employees as manifested by the hiring and re-hiring of the
respondents for Abesco projects. In his resolution, the Labor Arbiter highlighted the fact that the
respondents were part of a work pool which was readily tapped by the company at their
discretion and that it has been a practice for a period of 18 years. The Supreme Court sustained
the ruling of the Labor Arbiter but indicated that long period of service does not automatically
make the respondents regular employees as length of service is not a controlling factor. The
Supreme Court explained that the primary test to determine whether the respondents are
regular or project employees is (i) whether they are assigned to carry out a specific project or
undertaking and (ii) the duration and scope of which are specified at the time they are engaged
for that project. The high court also emphasized that such duration and

particular work/service to be performed should be defined in the employment agreement and

are made clear to the employees at the time of hiring.




G.R. No. 194884 October 22, 2014


TOPIC: Sexual intercourse in workplace during work hours as serious misconduct


Petitioner Imasen Philippine Manufacturing Corporation is a domestic corporation

engaged in the manufacture of auto seat-recliners and slide-adjusters. It hired the respondents
as manual welders in 2001.

On October 5, 2002, the respondents reported for work on the second shift – from 8:00
pm to 5:00 am of the following day. At around 12:40 am, Cyrus A. Altiche, Imasen’s security guard
on duty, went to patrol and inspect the production plant’s premises. When Altiche reached
Imasen’s Press Area, he heard the sound of a running industrial fan. Intending to turn the fan off,
he followed the sound that led him to the plant’s “Tool and Die” section.

At the “Tool and Die” section, Altiche saw the respondents having sexual intercourse
on the floor, using a piece of carton as mattress. Altiche immediately went back to the guard
house and relayed what he saw to Danilo S. Ogana, another security guard on duty.
Respondent’s defense: they claimed that they were merely sleeping in the “Tool and
Die” section at the time of the incident. They also claimed that other employees were near the
area, making the commission of the act charged impossible.

Both LA and NLRC held that the dismissal was valid. CA however nullified NLRC’s
decision and held that sexual intercourse inside company premises is not serious misconduct.


Whether the respondents’ infraction – engaging in sexual intercourse inside company

premises during work hours – amounts to serious misconduct justifying their dismissal.


YES. Sexual acts and intimacies between two consenting adults belong, as a principled
ideal, to the realm of purely private relations. Whether aroused by lust or inflamed by
sincere affection, sexual acts should be carried out at such place, time and circumstance that, by
the generally accepted norms of conduct, will not offend public decency nor disturb the generally
held or accepted social morals. Under these parameters, sexual acts between two consenting
adults do not have a place in the work environment.

Indisputably, the respondents engaged in sexual intercourse inside company premises

and during work hours. These circumstances, by themselves, are already punishable misconduct.
Added to these considerations, however, is the implication that the respondents did not only
disregard company rules but flaunted their disregard in a manner that could reflect adversely on
the status of ethics and morality in the company.

Additionally, the respondents engaged in sexual intercourse in an area where co-

employees or other company personnel have ready and available access. The respondents
likewise committed their act at a time when the employees were expected to be and had, in fact,
been at their respective posts, and when they themselves were supposed to be, as all
other employees had in fact been, working.

The Court also considered the respondents’ misconduct to be of grave

and aggravated character so that the company was justified in imposing the highest
penalty available ― dismissal.

Their infraction transgressed the bounds of socially and morally accepted human public
behavior, and at the same time showed brazen disregard for the respect that
their employer expected of them as employees. By their misconduct, the respondents, in effect,
issued an open invitation for others to commit the same infraction, with like disregard for their
employer’s rules, for the respect owed to their employer, and for their co-employees’ sensitivities.