FUENTES V.

NLRC
FACTS:
 The 75 petitioners seek to set aside the decision of respondent reversing that of the Labor Arbiter which granted
their claims, for having been rendered with grave abuse of discretion amounting to lack or excess of jurisdiction.
 Petitioners were regular employees of private respondent Agusan Plantations, Inc.
 Claiming that it was suffering business losses which resulted in the decision of the head office in Singapore to
undertake retrenchment measures, private respondent sent notices of termination to petitioners and the DOLE.
 On Oct. 31, 1990, petitioners filed with the DOLE office in Cagayan de Oro City a complaint for illegal dismissal
with prayer for reinstatement, backwages and damages against private respondent.
 Private respondents denied allegations of petitioners and contended that upon receipt of instructions from the
head office in Singapore, they conducted grievance conferences or meetings with petitioner’s representative
labor organization, the Association of Trade Unions through its national president Jorge Alegarbes.
 Private respondents also contended that the 30-day notices of termination were duly sent to petitioners.
 The Labor Arbiter rendered decision in favour of petitioner ordering private respondents to pay the former
separation pay equivalent to 15 days pay for every year of service plus salary differentials and attorney’s fees.
 The NLRC reversed the decision of the Labor Arbiter.
 Petitioners elevated their plight to the Court on a special civil action for certiorari under Rule 65, alleging that
respondent NLRC gravely abused its discretion amounting to lack or excess jurisdiction.
 Petirioners also argued that their dismissal or retrenchment did not comply with the requirements of Art. 283 of
the Labor Code.
ISSUE: WON the retrenchment or dismissal is valid.
RULING:
Under Art. 283, retrenchment may be valid only when the following requisites are present: (a) it is to prevent
losses; (b) written notices were served on the workers and the DOLE at least one month before the effective date of
retrenchment; and, (c) separation pay is paid to the affected workers.
The termination of petitioners could not have validly taken effect either on 25 or 30 September 1990. The one-
month notice of retrenchment filed with the DOLE and served on the workers before the intended date is mandatory.
Private respondents failed to comply with this requisites. The petitioners were terminated less than a month after notice
was sent to DOLE and to each of the workers.
The Court agrees with the conclusion of the Labor Arbiter that the termination of the services of petitioners was
illegal as there was no valid retrenchment. Respondent NLRC committed grave abuse of discretion in reversing the
findings of the Labor Arbiter and ruling that there was substantial compliance with the law.
DITAN V. POEA
FACTS:
 Petitioner was recruited by private respondent Intraco Sales Corporation, through its local agent, Asia World,
the other private respondent, to work in Angola as a welding supervisor. The contract was for nine months and
contained the required standard stipulations for the protection of our overseas workers.
 The petitioner was assigned as an ordinary welder in the INTRACO central maintenance shop, from December 2
to 25, 1984.
 On December 26, 1984, he was informed that he would be transferred to Kafunfo. This was the place where the
rebels had attacked and kidnapped expatriate workers, killing two Filipinos in the raid. However, he was assured
by the INTRACO manager that Kafunfo was safe and adequately protected by government troops. Moreover, he
was told he would be sent home if he refused the new assignment. He relented and agreed.
 On December 29, 1984, the Unita rebels attacked the diamond mining site where Ditan was working and took
him and 16 other Filipino hostages, along with other foreign workers. They trekked for almost a thousand
kilometres. It was only March 16, 1985 that the hostages were finally released.
 After six days, Ditan and other Filipino hostages were back in the Philippines.
 The repatriated workers had been assured by INTRACO that they would be given priority in re-employment
abroad, and eventually 11 of them were taken back.
 Ditan having been excluded, he filed a complaint against private respondents for breach of contract and various
other claims.
 All his claims were dismissed by POEA Administrator Tomas D. Achacoso in a decision. Affirmed by NLRC in a
resolution which was being challenged in this petition.
ISSUES: WON the petitioner should be paid the salary corresponding to the unserved weeks of his contract.
RULING:
The Court feels that the petitioner should be paid the salary corresponding to the 17 unserved weeks of his
contract, which was terminated by the private respondents despite his willingness to work out the balance of his term.
In addition, to assuage the ordeal he underwent while in captivity by the rebels, the Court has also decided in its
discretion to award him nominal damages in the sum of P20,000. This is not payment of the war risk claim which, as
earlier noted, was not provided for in the employment contract in question, or indemnification for any loss suffered by
him. This is but a token of the tenderness of the law towards the petitioning worksman vis-à-vis the private respondents
and their more comfortable resources.
Under the policy of social justice, the law bends over backward to accommodate the interests of the working
class on humane justification that those with less privileges in life should have more pirvileges in law.
SERRANO V. GALLANT MARITIME
FACTS:
 Petitioner, a Filipino seafarer, the last cause in the 5th paragraph of section 10, RA 8042, does not magnify the
contributions of OFWs to national development, but exacerbates the hardships borne by them by unduly limiting
their entitlement in case of illegal dismissal to their lump-sum salary either for the unexpired portion of their
employment contract “or for three months for every year of the unexpired term, whichever is less”
 Petitioner claims that the last clause violates the OFWs constitutional rights in that it impairs the terms of their
contract, deprives them of equal protection and denies them due process.
 Petitioner was hired by Gallant Maritime Services, Inc. and Marlow Navigation Co., Ltd. Under a POEA approved
with the terms and conditions.
 On March 19, 1998, the date of his departure, petitioner was constrained to accept a downgraded employment
contract for the position of Second Officer, upon the assurance and representation of respondents that he would
be made Chief Officer by the end of April 1998.
 Respondents did not deliver their promise to make petitioner Chief Officer. Hence, petitioner refused to stay on
as Second Officer and was repatriated to the Philippines.
 Petitioner’s employment contract was for a period of 12 months, but at the time of his repatriation, he had served
only 2 months and 7 days of his contract, leaving an unexpired portion of 9 months and 23 days.
 Petitioner filed with LABOR Arbiter a complaint against respondents for constructive dismissal and for payment
of his money claims, as well as moral and exemplary damages and attorney’s fees.
 LA rendered a decision declaring the dismissal of petitioner illegal and awarding him monetary benefits for lack of
merit.
 NLRC question the finding of the LA that petitioner was illegally dismissed.
ISSUE: WON the proper computation of the lump-salary to be awarded to petitioner by reason of his illegal dismissal
RULING:
It is plain that prior to RA 8042, all OFWs, regardless of contract periods or the unexpired portions thereof, were
treated alike in terms of the computation of their monetary benefits in case of illegal dismissal. Their claims were subjected
to a uniform rule of computation: their basic salaries multiplied by the entire unexpired portion of their employment
contracts.
The enactment of the subject clause in RA no 8042 introduced a differential rule of computation of the money
claims of illegally dismissed OFWs based on their employment periods, in the process singling out one category whose
contracts have an unexpired portion of one year or more and subjecting them to the peculiar disadvantage of having their
monetary awards limited to their salaries for 3 months or for the unexpired portion thereof, whichever is less, but all the
while sparing the other category from such prejudice, simply because the latter’s unexpired contracts fall short of one
year.
The subject clause does not state or imply any definitive governmental prupose; and it is for that precise reason
that the clause violates not just petitioner’s right to equal protection, but also her right to substantive due process under
sec. 1, Art. 3 of the Constitution.
The subject clause being unconstitutional, petitioner is entitled to his salaries for the entire unexpired period of
nine months and 23 days of his employment contract, pursuant to law and jurisprudence prior to the enactment of RA
8042
SAMEER OVERSEAS v. CABILES
FACTS:
 Petitioner is a recruitment and placement agency. Responding to an ad it published, respondent, Joy C. Cabiles,
submitted her application for a quality control job in Taiwan.
 Joy’s application was accepted. She was later asked to sign a one year employment contract. She alleged that
Sameer Overseas Agency required her to pay a placement fee of P70,000 when she signed the employment
contract.
 Joy was deployed to work for Taiwan Wacoal, Co., Ltd. She alleged that in her employment contract, she agreed
to work as quality control for one year. In Taiwan, she was asked to work as a cutter.
 A certain Mr. Huwang from Wacoal informed Joy, without prior notice, that she was terminated and that she
should immediately report to their office to get her salary and passport. She was asked to prepare immediate
repatriation.
 Joy filed a complaint with the NLRC against petitioner and Wacoal. She claimed that she was illegally dismissed.
She asked for the return of her placement fee, the withheld amount for repatriation costs, payment of her salary
for 23 months as well as moral and exemplary damages. She identified Wacoal as Sameer Overseas Placement
Agency’s foreign prinicipal.
 Sameer alleged that respondent’s termination was due to her inefficiency, negligence in her duties, and her
“failure to comply with the work requirements of her foreign employer.”
 The agency also alleged that it did not ask for a placement fee.
 The LA dismissed Joy’s complaint. The acting Executive Labor Arbiter Pedro C. Ramos ruled that her complaint was
based on mereallegations. The LA found that there was no excess payment of placement fees.
 The NLRC declared that Joy was illegally dismissed. The dismissal is based on a just or a valid cause belongs to the
employer. Sameer failed to prove that there were just cause for termination.
ISSUE: WON there was just cause termination
RULING:
No, the Court held that the reinstated clause violates due process rights. It is arbitrary as it deprives overseas
workers of their monetary claims without any discernable valid purpose.
Overseas workers regardless of their classifications are entitled to security of tenure, at least for the period agreed
upon in their contracts. This means that they cannot be dismissed before the end of their contract terms without due
process. If they were illegally dismissed, the worker’s right to security of tenure is violated.
Respondent Joy Cabiles is entitled to her salary for the unexpired portion of her contract, in accordance with sec.
10 of RA 8042. The award of three-month equivalence of respondent’s salary must be modified accordingly. Since she
started working on June 15, 1997 to June 25, 1998.
FRANCISCO V. NLRC
FACTS:
 In 1995, Petitioner was hired by Kasei Corporation during its 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 Liaison Officer to the City of Makati to secure business permits, construction permits and
other licenses for the initial operation of the company.
 Although, she was designated, she was not entrusted with the corporate documents; neither did she attend any
board meeting nor required to do so. She never prepared any legal document and never represented the company
as its Corporate Secretary. However, on some occasions, she was prevailed upon to sign documentation for the
company.
 In 1996, petitioner was designated Acting Manager.
 In January 2001, petitioner was replaced by Liza Fuentes as Manager. Petitioner alleged that she was required to
sign a prepared resolution for replacement but she was assured that she would still be connected with Kasei
Corporation. Acedo, the designated Treasurer, convened a meeting of all employees of Kasei Corporation and
announced that nothing had changed and that petitioner was still connected.
 Thereafter, Kasei reduced her salary. She was not paid for mid-year bonus allegedly because the company was
not earning well.
 Petitioner asked for her salary from Acedo but she was informed that she is no longer connected with the
company.
 Petitioner did not report for work and filed an action for constructive dismissal before the Labor Arbiter.
 LA found that she was illegally dismissed. NLRC affirmed.
ISSUE: WON there was an employer-employee relationship between petitioner and private respondent.
RULING:
Yes, generally, courts have relied on the so-called right to 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.
Respondent Corporation had the power to control petitioner with the means and methods by which the work is
to be accomplished. The corporation constructively dismissed petitioner when it reduced her salary. This amounts to an
illegal termination of employment, where the petitioner is entitled to full backwages. Since the position of strained
relations, petitioner is further entitled to separation pay, in lieu of reinstatement.
SONZA V. ABS-CBN
FACTS:
 Respondent ABS-CBN Broadcasting Corporation signed an Agreement with Mel and Jay Management and
Development Corporation.
 ABS was represented by its officers while MJMDC was represented by SONZA, AS President and Gen. Manager,
and Carmela Tiangco, as EVP and Treasurer.
 Referred to in the Agreement as Agent, MJMDC agreed to provide SONZA’s services exclusively to ABS-CBN as
talent for radio and television.
 ABS agreed to pay for SONZA’s services a monthly talent fee for the first, second and third year of the Agreeement
 On April 30, 1996, SONZA filed a complaint against ABS-CBN before the DOLE. SONZA complained that ABS did
not pay his salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, travel allowance
and amounts due under the ESOP.
 ABS filed a Motion to Dismiss on the ground that no employer-employee relationship existed between the parties.
 LA rendered his decision dismissing the complaint for lack of jurisdiction.
 NLRC rendered a decision affirming the LA’s decision.
ISSUE: WON employer-employee exists between Sonza and ABS-CBN
RULING:
The Court affirmed the assailed decision. There is no convincing reason to exist warrant a reversal of the decision
of the CA affirming the ruling which upheld the LA’s dismissal of the case for lack of jurisdiction.
There is no case law stating that a radio and television program host is an employee of the broadcast station. ABS
insists that the LA has no jurisdiction because SONZA was an independent contractor. The Court will not interpret the right
of labor to security of tenure to compel artists and talents to render their services only as employees. If radio and television
program hosts can render their services only as employees, the station owners and managers can dictate to the radio and
television hosts what they say in their shows. This is not conducive to freedom of the press.
DUMPIT-MORILLO V. CA
FACTS:
 Private respondent, ABC, hired petitioner Thelma Dumpit-Morillo as a newscaster and co-anchor for Balitang-
Balita.
 The contract was for a period of three months. It was renewed.
 Two weeks after the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President for
News and Public Affairs of ABC, informing the latter that she was still interested in renewing her contract subject
to salary increase.
 Thereafter, she stopped reporting for work. She wrote a letter to Mr. Javier regarding to the first letter she wrote
for not receiving any formal written reply.
 A month later, she sent a demand.
 ABC replied that a check covering petitioner’s talent fees had been processed and prepared, but that the other
claims of petitioner had no basis.
 On December 20, 1999, petitioner filed a complaint against ABC, Mr. Javier and Mr. Edward Tan, for illegal
constructive dismissal, non-payment of salaries, overtime pay, premium pay, separation pay, holiday pay, service
incentive leave pay, vacation/sick, and so on.
 LA dismissed the complaint. NLRC reversed the LA’s decision, held that an employer-emplpoyee relationship
between Dumpit and ABC existed.
ISSUE: WON the constructive dismissal of petitioner, as a regular employee, there was a denial of petitioner’s right to
due process thus entitling her to the money claims as stated in the complaint.
RULING:
No, the requisites for regularity of employment have been met in the instant case. Gleaned from the description
of the scope of services mentioned, petitioner’s work was necessary or desirable in the usual business or trade of the
employer which includes, as a pre-condition for its enfranchisement, its participation in the government’s news and public
information dissemination. In addition, her work was continuous for a period of four years. This repeated engagement
under contract of hire is indicative of the necessity and desirability of the petitioner’s work in private respondent ABC’
business.
COCA-COLA BOTTLERS V. CLIMACO
FACTS:
 Respondent Dr. Dean Climaco is a medical doctor who was hired by petitioner Coca-Cola Bottlers by virtue of a
Retainer Agreement. The Retainer Agreement was renewed annually.
 Despite the non-renewal of the Retainer Agreement, respondent continued to perform his functions as company
doctor of Coca-Cola until he received a letter.
 Petitioner was already making inquiries regarding his status with petitioner company.
 He wrote a letter to Dr. Willie Sy, the Acting President and Chairperson of the Committee on Membership,
Philippine College of Occupational Medicine.
 Dr. Sy wrote a letter to the Personnel Officer of Coca Cola Bottlers, stating that respondent should be considered
as a regular part-time physician. He likewise stated that respondent must receive all the benefits and privileges of
an employee under Art. 157 (b) of the Labor Code.
 Petitioner company did not take any action.
 In respondent’s letter to the Assistant Regional Director, stated that he believed that an employer-employee
relationship existed between petitioner and respondent based on the Retainer Agreement and the
Comprehensive Medical Plan, and the application of the four fold test.
 However, Director Ancheta emphasized that the existence of employer-employee relationship is a question of
fact.
 LA dismissed the case and found the petitioner company lacked the power of control over respondent’s
performance of his duties, and recognized as a valid Retainer Agreement between the parties. NLRC dismissed the
appeal in both cases.
 CA found the employer-employee relationship.
ISSUE: WON the relationship between petitioner and respondent existed.
RULING:
The Court, in determining the existence of an employer-employee relationship has invariably adhered to the four
fold test: (1) the selection and engagement of the employee; (2) the payment of wages;(3) the power of dismissal;(4)
the power to control the employee’s conduct, or so-called “control test,” considered to be the most important
element. The Labor Arbiter and the NLRC correctly found that petitioner company lacked the power of control over
the performance by respondent of his duties.
The court agrees with the Labor Arbiter and the NLRC that there is nothing wrong with the employment of
respondent as a retained physician of petitioner company and upholds the validity of the Retainership Agreemnent
which clearly stated that no employer-employee relationship existed between the parties. The agreement stated that
it was only for a period of 1 year beginning January 1, 1988 to December 31, 1998, but it was renewed on a yearly
basis.
The termination of Retainership Agreement which is in accordance with the provisions of the Agreement, does
not constitute illegal dismissal of respondent. There is no basis for the moral and exemplary damages granted by the
CA to respondent due to his alleged illegal dismissal.
JARDIN V. NLRC
FACTS:
 Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation
engaged in the operation of “Goodman Taxi.”
 Petitioners used to drive private respondent’s taxicabs every other day on a 24-hour work schedule under
the boundary system. They earned an average of P400.00 daily.
 Private respondent regularly deducts P30.00 from petitioners for the washing of the taxi units which
petitioners believed that the deduction is illegal. They decided to form a labor union to protect their rights
and interests.
 Upon leaning the plan of petitioners, private respondent refused to let petitioners drive their taxicabs
when they reported for work and on succeeding days.
 Petitioners filed a complaint with the labor arbiter against private respondent for unfair labor practice,
illegal dismissal and illegal deduction of washing fees.
 LA dismissed the said complaint for lack of merit.
 NLRC reversed and set aside the judgment of Labor Arbiter.
 Labor Tribunal declared that petitioners are employees of private respondent, and, as such, their dismissal
must be for just cause and after due process.
ISSUE: the existence of an employer-employee relationship between the parties is already a settled issue
constituting res judicata, which the NLRC has no more jurisdiction to reverse, alter or modify.
RULING:
In the determination of employer-employee relationship, the Supreme Court has applied the four fold
test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
(4) the power of control the employees conduct.
The control is deemed the most important that the other requisites may even be disregarded. Under the
control test, an employer-employee relationship exists if the employer has reserved the right to control the
employee not only as to the result of the work done but also as to the means and methods by which the same
is to be accomplished. Otherwise, no such relationship exists.
SONGCO V. NLRC
FACTS:
 Private respondent Zuellig filed with the Department of Labor an application seeking clearance to
terminate the service of petitioners Jose Songco, Romeo Cipres, and Amancio Manuel allegedly on
the ground of retrenchment due to financial losses.
 Alleging that the company is not suffering from losses and that they are being dismissed because of
their membership in the union.
 At last hearing of the case, the petitioners were no longer contesting dismissal. Instead, the parties
agreed the sole issue to be resolved is the basis of the separation pay due to petitioners.
 Petitioners received monthly salaries of at least P40,000 and they also received commissions for every
sale they made.
 The collective Bargaining Agreement entered into between Zuellig and F.E. Zuellig Employees
Association, of which petitioners are members, contains the following provisions under Article XIV –
Retirement Gratuity
 Labor Arbiter rendered decision, ordered to pay the complainants separation pay equivalent to their
one month salary for every year of service that they have worked with the company.
 NLRC was dismissed for lack of merit.
ISSUE: WON the petitioners are entitled separation of pay.
RULING:
Commission is the recompense, compensation or reward of an agent, salesman, executor, trustees, receiver,
factor, broker or bailee, when the same is calculated as percentage on the amount of his transactions or on the profit to
the principal.
The nature of the work of a salesman and the reason for such type of remuneration for services rendered
demonstrate clearly that commission are part of petitioners’ wage or salary. We take judicial notice of the fact that some
salesmen do not receive any basic salary but depend on commissions and allowances or commissions alone, are part of
petitioners’ wage or salary. The employer-employee relationship exists.
The Court saying that this kind of salesmen do not receive any salary and therefore, not entitled to separation to
pay in the event of discharge from employment. This narrow interpretation is not in accord with the liberal spirit of our
labor laws and considering the purpose of separation pay which is, to alleviate the difficulties which confront a dismissed
employee thrown the streets to face the harsh necessities of life.
PHILIPPINE WIRELESS INC. V. NLRC
FACTS:
 Petitioner Philippine Wireless hired respondent Doldwin Lucila as operator/encoder.
 On January 7, 1979, he was promoted as Head Technical and Maintenance Department of the Engineering
Department.
 On September 11, 1987, he was promoted as Supervisor, Technical Services of the same department.
 On October 1, 1990, he was again promoted as Superintendent, Project Management.
 On December 28, 1990, he tendered resignation.
 On December 28, 1991, he filed with Arbitration Branch and NLRC a complaint for illegal/constructive dismissal.
 He alleged that he was constructively dismissed inasmuch as his promotion from Supervisor, Technical Services to
Superintendent, Project Management is demanding, illusory and humiliating.
 The basis of this allegation was the fact that he was not give any secretary, assistant and/or subordinates.
 Labor Arbiter Benigno Villarente Jr, rendered a decision declaring that respondent actually resigned and dismissed
the complaint for lack of merit.
 Public respondent NLRC reserved findings of the labor arbiter, and ordered respondent’s reinstatement with back
wages or separation pay.
ISSUE: WON petitioner was constructively dismissed from the petitioner’s employment.
RULING:
No, the Court held that constructive dismissal is an involuntary resignation resorted to when continued
employment is rendered impossible, unreasonable or unlike; when there is a demotion in rank and/or a diminution in
pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. In
this case, respondent voluntarily resigned from his employment. He was not pressured into resigning.
Respondent considered his transfer/promotion as a demotion due to the fact that he had no support staff to assist
him in his work and whom he could supervise. There is no demotion where there is no reduction in position, rank or
salary as a result of such transfer. In fact, respondent Goldwin Lucila was promoted 3 times from the time he was
hired until his resignation from work.
STANDARD CHARTERED BANK EMPLOYIES UNION V. STANDERED CHARTERED BANK
FACTS:
 Petitioner and Standard Chartered Bank began negotiating for new Collective Bargaining Agreeement in May
2000 as their 1998-2000 CBA already expired.
 Due to a deadlock in the negotiation, petitioner filed a Notice of strike prompting the Secretary of Labor and
Employment to assume jurisdiction over the labor dispute.
 Secretary of Labor and Employment dismissed for lack of merit.
 Petitioner sought recourse with the CA via a petition for certiorari. CA dismissed the petition and affirmed the
Secretary’s order.
 The CBA provisions in dispute are the exclusion of certain employees from the appropriate bargaining unit
and the adjustment of remuneration for employees serving in an acting capacity for one month.
 They only wanted the exclusion to apply only to the following employees from the appropriate bargaining unit
– all managers who are vested with the right to hire and fire employees, confidential employees, those with
access to labor relations materials, Chief Cashiers, Assistant Cashiers, personnel of the Telex Department and
one Human Resources staff.
ISSUE: WON the Bank’s Chief Cashiers and Assistant Cashiers, personnel of the Telex Department and HR staff are
confidential employees such that they should be excluded.
RULING:
No, petitioner failed to show that the employees sought to be removed from the list of executions are actually
rank and file employees who are not managerial or confidential in status and should, accordingly, be included in the
appropriate bargaining unit.
Absent any proof that Chief Cashiers and Assistant Cashiers, personnel of the Telex department and 1 HR Staff
have mutuality excluded from the appropriate bargaining unit.
Petitioner cannot simply rely on jurisprudence without explaining how and why should apply to this case.
Allegations must be supported by evidence.
TSPIC CORPORATION V. TSPIC EMPLOYEES UNION
FACTS:
 TSPIC is engaged in the business of designing, manufacturing, and marketing integrated circuits to serve the
communication, automotive, data processing, and aerospace industries.
 Respondent is the registered bargaining agent of the rank-and-file employees of TSPIC and they are all members
of the Union.
 TSPIC and the Union entered into a Collective Bargaining Agreement for the years 2000 to 20004. It included a
provision on yearly salary increases.
 All the regular rank-and-file employees of TSPIC received a 10% increase in their salary.
 The CBA also provided that employees who acquire regular employment status within the year but after the
effectivity of a particular salary increase shall receive a proportionate part of the increase upon attainment of
their regular status, Sec 2 of the CBA.
 A few weeks after the salary increase for the year of 2001 became effective, TSPIC’s HR notified 24 employees,
that due to an error in the automated payroll system, they were overpaid and the overpayment would be
deducted from their salaries in a staggered basis.
 The Union asserted that there was no error and the deduction of the alleged overpayment from employees
constituted diminution of pay.
ISSUE: WON the alleged overpayment constitutes diminution of pay as alleged by the Union.
RULING:
Yes, because it is considered that Collective Bargaining Agreement entered into by Union and their employees are
binding upon the parties and be acted in strict compliance therewith. Thus, the CBA in this case is the law between the
employers and their employees.
Therefore, there was no overpayment when there was an increase of salary for the members of the union
simultaneous with the increasing of minimum wage for workers in the NCR. The CBA should be followed thus, the senior
employees who were first promoted as regular employees shall be entitled for the increase in their salaries and the same
with lower rank workers.
CAPIN-CADIZ V. BRENT HOSPITAL AND COLLEGES, INC.
FACTS:
 Cadiz was the HR Officer of respondent at the time of her indefinite suspension from employment in 2008.
 The cause of suspension was Cadiz’s unprofessionalism and Unethical Behaviour resulting to Unwed Pregnancy.
 It appears that Cadiz became pregnant out of wedlock, and Brent imposed the suspension until such time that she
marries her boyfriend in accordance with law.
 Cadiz filed with the Labor Arbiter a complaint for Unfair Labor Practice, Constructive dismissal, non-payment of
wages and damages with the prayer for reinstatement.
 LA rendered decision ordering Brent to pay Cadiz 13th month pay. The LA stated that her immoral conduct was
magnified as a serious misconduct not only by her getting pregnant as a result before and without marriage, but
more than that, also by the fact that Brent is an institution of the Episcopal Church in the Philippines operating
both a hospital and college where Cadiz was employed.
 She is not entitled to reinstatement at least until she marries her boyfriend.
 CA dismissed her petition outright due to technical defects in the petition: (1) incomplete statement of material
dates; (2) failure to attach registry receipts; and (3) failure to indicate the place of issue of counsel’s PTR and IBP
official receipts.
ISSUE: WON the petitioner premarital relations with her boyfriend and the resulting pregnancy out of wedlock
constitute immorality, a valid ground for dismissal
RULING:
No, the Court ruled in Leus that the determination of whether a conduct is disgraceful or immoral involves a 2
steps process: First, a consideration of the totality of the circumstances surrounding the conduct; and Second, an
assessment of the said circumstances vis –a-vis the prevailing norms of conduct, what the society generally considers
moral and respectable.
The totality of the circumstances of this case does not justify the conclusion that Cadiz committed acts of
immorality. Similar to Leus, Cadiz and her boyfriend were both single and had no legal impediment to marry at the time
she committed the alleged immoral conduct. In fact, they eventually married on April 15, 2008.42 Aside from these, the
labor tribunals' respective conclusion that Cadiz's "indiscretion" "scandalized the Brent community" is speculative, at
most, and there is no proof adduced by Brent to support such sweeping conclusion.
Brent, likewise, cannot resort to the MRPS because the Court already stressed in Leus that "premarital sexual
relations between two consenting adults who have no impediment to marry each other, and, consequently, conceiving a
child out of wedlock, gauged from a purely public and secular view of morality, does not amount to a disgraceful or
immoral conduct under Section 94(e) of the 1992 MRPS.
MANILA HOTEL COMPANY V. PINES HOTEL EMPLOYEES ASSOCIATION
FACTS:
 The respondent, PHEA, applied to the CIR for an order that would require the petitioner herein to pay PHEA
members in the petitioner’s employ the benefits due them under RA 1880, to the date of the petition with the
CIR.
 The MHC replied that the demand of the PHEA had already been settled under the terms of an agreement, entitled
Settlement of Grievances, which the parties entered into on Feb. 9, 1962, as a supplement to the Collective
Bargaining Agreement.
 The CIR directed its examiner to see through the books of MHC and verify compliance with R.A. 1880 and the
agreement of the parties.
 On March 23, 1964 the examiner submitted his report covering the period from July 1, 1957 to December 31,
1963. This report disclosed that eight employees of the MHC were still being paid the same wages they used to
receive before July 1, 1957
 The MHC contending that the employees referred to therein are not entitled under the terms of the "Settlement
of Grievance" to any automatic salary increases because to qualify thereunder an employee must have been in its
service for at least six (6) months prior to July 1, 1957.
 The employees did not meet this requirement of the agreement, according to the MHC. The PHEA, however,
countered that this 6-month period refers to the time prior to February 9, 1962, the date of the execution of the
"Settlement of Grievance," and not to the time prior to July 1, 1957.
ISSUE: WON the employees are entitled under the terms of Settlement of Grievance to any automatic salary increases
RULING:
No, R.A. 1880 was enacted for the benefit of the laboring masses of our society. Thus, it not only limits the hours
of labor per day and per week, but as well provides that automatic salary increases shall be enjoyed by those who, as a
result of the operation of the law, stood to suffer a reduction in pay because of the reduction of the number of hours of
work. These strictures are clearly mandatory for the employer, and understandably so, for Congress fully appreciates the
unhappy and disadvantageous bargaining status of the employees who would naturally be reluctant or even apprehensive
in asserting a claim which may cause them the loss of their livelihood. It is this Court’s solemn duty to apply the full import
and intendment of the law.
PHILIPPINE TOBACCO V. NLRC
FACTS:

 These refer to the consolidated cases for payment of separation pay lodged by the Lubat Group, and for illegal
dismissal and underpayment of separation pay by the Luris group, with prayers for damages and attorney's fees
against the above respondents.
 The record reveals that all complainants in both cases were former workers of respondent with their respective
periods of employment and latest wages stated in the parties' pleadings/annexes.
 On August 1, 1994, due to supposed serious financial reverses and losses suffered by respondent and its desire
to prevent further losses, a notice of permanent closure of its retrying operations at Balintawak, Quezon City
and transfer of the same to Candon, Ilocos Sur was served to the DOLE.
 On August 3, 1994, complainants were also notified of the said decision to close and transfer.
 On August 16, 1994, their separation benefits were given to them but allegedly based on wrong computation
when management did not consider 3/4 of their length of service as claimed by Luris group.
 While the Lubat group were not granted separation pay as their previous seasonal service was not continuous,
and as of August, 1994, they were not employed therewith as declared by respondent.

ISSUE: WON the Lubat group can properly allowed backwages and damages by reason of their illegal dismissal

RULING:

Yes, the Court convinced that the petitioner illegally dismissed the members of Lubat group when it refused to
work during the 1994 season. Given the illogical and misleading entries in the Statement of Income and Expenses, as
well as the recasted thereof, and the detective notice of closure, this Court holds that the petitioner was not able to
establish that the closure of its business operations in its Balintawak plant was infact due to serious financial losses.

Therefore, under the last two sentences of Art. 283 of Labor code, the dismissed belonging to the Luris group
are entitled to separation pay “equivalent to one month pay or at least one half month pay for every year of service,
whichever is higher. A fraction of at least six months shall be considered one whole year.
BUSTAMANTE V. NLRC
FACTS:
 Respondent company is engaged in the business of producing high grade bananas in its plantation in Davao del
Norte. Petitioners Paulino Bantayan, Fernando Bustamante, Mario Sumonod and Osmalik Bustamante were
employed as laborers and harvesters while petitioner Sabu 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 on 2 July 1990, petitioners' employments were terminated on 25 June 1990
on the ground of poor performance on account of age, as not one of them was allegedly below forty (40) years
old
 Petitioners filed a complaint for illegal dismissal before the Regional Arbitration.
 Public respondent dismissed the appeal of private respondent company for lack of merit Private respondent filed
a motion for reconsideration.
ISSUE: WON the public respondent gravely abused its discretion in rendering the second resolution which removed the
award of backwages in their favor.
RULING:
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.”
DUP SOUND PHILS V. CA
FACTS:
 Pial alleged that he was an employee of herein petitioner DUP Sound Phils. (DUP), which is an entity engaged in
the business of recording cassette tapes for various recording companies.
 Petitioner Manuel Tan (Tan) is the owner and manager of DUP; Pial was first employed in May 1988 until
December 1988.
 On October 11, 1991, he was re-employed by DUP and was given the job of "mastering tape.” His main function
was to adjust the sound level and intensity of the music to be recorded as well as arrange the sequence of the
songs to be recorded in the cassette tapes.
 On August 21, 2001, Pial got absent from work because he got sick. When he got well the following day and was
ready for work, he called up their office in accordance with his employer's policy that any employee who gets
absent shall first call their office before reporting back to work.
 To his surprise, he was informed by the office secretary that the latter was instructed by Tan to tell him not to
report for work until such time that they will advise him to do so.
 After three weeks, without receiving any notice, Pial again called up their office. This time the office secretary
advised him to look for another job because, per instruction of Tan, he is no longer allowed to work at DUP.
 Pial asked the office secretary regarding the reason why he was not allowed to return to his job and pleaded with
her to accept him back, but the secretary simply reiterated Tan's order not to allow him to go back to work.
 Pial prayed for the payment of his unpaid service incentive leave pay, full backwages, separation pay, moral and
exemplary damages as well as attorney's fees.
 Pial was never dismissed, instead, it was his unilateral decision not to work at DUP anymore; Tan even offered
him his old post during one of the hearings before the NLRC hearing officer, but Pial refused such offer or any
other offer of amicable settlement.
 The Labor Arbiter (LA) handling the case rendered a Decision declaring Pial to have been illegally dismissed and
ordering DUP and Tan to reinstate him to his former position and pay him backwages, cost of living allowance,
service incentive leave pay and attorney's fees.
 The NLRC ruled that there was no illegal dismissal on the part of DUP and Tan, but neither was there abandonment
on the part of Pial.
ISSUE: WON the relations between the employer and the employee have been strained.
RULING:
Yes, the Court has ruled in many instances that reinstatement is no longer viable where, among others, the
relations between the employer and the employee have been so severely strained, that it is not in the best interest of
the parties, nor is it advisable or practical to order reinstatement, or where the employee decides not to be reinstated.
In the instant case, the resulting circumstances show that reinstatement would be impractical and would hardly
promote the best interest of the parties. Resentment and enmity between petitioners and private respondent
necessarily strained the relationship between them or even provoked antipathy and antagonism as shown by the acts
of the parties subsequent to the order of reinstatement. Besides, private respondent expressly prayed for an award
of separation pay in lieu of reinstatement from the very start of the proceedings before the Labor Arbiter. By so doing,
he forecloses reinstatement as a relief by implication.
Private respondent, however, failed to prove his allegation that he was employed by petitioners since 1991. On
the other hand, petitioners were able to present evidence to show that private respondent was employed only in
January 1996. Hence, private respondent's separation pay must be reckoned from January 1996, when he began
working with petitioners, until finality of this Decision, consistent with established jurisprudence.
MAGSALIN V. NOW
FACTS:

 Coca-Cola Bottlers Phils., Inc., herein petitioner, engaged the services of respondent workers as "sales route
helpers" for a limited period of five months.
 After five months, respondent workers were employed by petitioner company on a day-to-day basis.
According to petitioner company, respondent workers were hired to substitute for regular sales route
helpers whenever the latter would be unavailable or when there would be an unexpected shortage of
manpower in any of its work places or an unusually high volume of work.
 The practice was for the workers to wait every morning outside the gates of the sales office of petitioner
company. If thus hired, the workers would then be paid their wages at the end of the day.
 Ultimately, respondent workers asked petitioner company to extend to them regular appointments.
Petitioner company refused.
 On 07 November 1997, twenty-three (23) of the "temporary" workers (herein respondents) filed with the
National Labor Relations Commission (NLRC) a complaint for the regularization of their employment with
petitioner company.
 Claiming that petitioner company meanwhile terminated their services, respondent workers filed a notice of
strike and a complaint for illegal dismissal and unfair labor practice with the NLRC.
 On 01 April 1998, the parties agreed to submit the controversy, including the issue raised in the complaint
for regularization of employment, for voluntary arbitration.
 On 18 May 1998, the voluntary arbitrator rendered a decision dismissing the complaint on the thesis that
respondents (then complainants) were not regular employees of petitioner company.
 CA reversed and set aside the decision of voluntary arbitrator.
ISSUE: WON the nature of work of respondents in the company is of such nature as to be deemed necessary and desirable
in the usual business or trade of petitioner that could qualify them to be regular employees
RULING:
The standard, supplied by the law itself, is whether the work undertaken is necessary or desirable in the usual
business or trade of the employer, a fact that can be assessed by looking into the nature of the services rendered and its
relation to the general scheme under which the business or trade is pursued in the usual course. It is distinguished from a
specific undertaking that is divorced from the normal activities required in carrying on the particular business or trade.
But, although the work to be performed is only for a specific project or seasonal, where a person thus engaged has been
performing the job for at least one year, even if the performance is not continuous or is merely intermittent, the law
deems the repeated and continuing need for its performance as being sufficient to indicate the necessity or desirability of
that activity to the business or trade of the employer. The employment of such person is also then deemed to be regular
with respect to such activity and while such activity exists.
The fact that respondent workers have agreed to be employed on such basis and to forego the protection given
to them on their security of tenure, demonstrate nothing more than the serious problem of impoverishment of so many
of our people and the resulting unevenness between labor and capital. A contract of employment is impressed with public
interest. The provisions of applicable statutes are deemed written into the contract, and "the parties are not at liberty to
insulate themselves and their relationships from the impact of labor laws and regulations by simply contracting with each
other.
IMASEN PHILIPPINE MANUFACTURING CORPORATION V. ALCON AND PAPA
FACTS:

 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.
 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.
 On Altiche’s request, Ogana madea follow-up inspection. Ogana went to the "Tool and Die" section and saw
several employees, including the respondents, already leaving the area. He noticed, however, that Alcon picked
up the carton that Altiche claimed the respondents used as mattress during their sexual act, and returned it to
the place where the cartons were kept. Altiche then submitted a handwritten report of the incident to Imasen’s
Finance and Administration Manager.
 Imasen issued the respondents separate interoffice memoranda informing them of Altiche’sreport on the October
5, 2002 incident and directing them to submit their individual explanation. The respondents complied with the
directive; 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.
 Imasen issued the respondents separate interoffice memoranda terminating their services. It found the
respondents guilty of the act charged which it considered as "gross misconduct contrary to the existing policies,
rules and regulations of the company."
 On December 5, 2002, the respondents filed before the LA the Complaint for illegal dismissal. The respondents
maintained their version of the incident.
 In the December 10, 2004 decision, the LA dismissed the respondents’ complaint for lack of merit.
 The NLRC dismissed the respondents’ appeal for lack of merit

ISSUE : WON the respondents’ infraction – engaging in sexual intercourse inside company premises during work hours
– amounts to serious misconduct within the terms of Article 282 (now Article 296) of the Labor Code justifying their
dismissal.

RULING:

We cannot help but consider 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 behaviour, 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. Taken together, these considerations reveal a depraved disposition
that the Court cannot but consider as a valid cause for dismissal. In ruling as we do now, we considered the balancing
between the respondents’ tenurial rights and the petitioner’s interests – the need to defend their management
prerogative and to maintain as well a high standard of ethics and morality in the workplace. Unfortunately for the
respondents, in this balancing under the circumstances of the case, we have to rule against their tenurial rights in favor of
the employer’s management rights.
GOLDEN ACE BUILDERS V. AZUL

FACTS:

 Jose A. Talde (respondent) was hired in 1990 as a carpenter by petitioner Golden Ace Builders of which its co-
petitioner Arnold Azul (Azul) is the owner-manager.
 In February 1999, Azul, alleging the unavailability of construction projects, stopped giving work assignments to
respondent, prompting the latter to file a complaint for illegal dismissal.
 By Decision of January 10, 2001, the Labor Arbiter ruled in favor of respondent and ordered his immediate
reinstatement without loss of seniority rights and other privileges, and with payment of full backwages, which at
that time was computed at ₱144,382.23, and the amount of ₱3,236.37 representing premium pay for rest days,
service incentive leave pay and 13th month pay.
 Pending their appeal to the National Labor Relations Commission (NLRC) and in compliance with the Labor
Arbiter’s Decision, petitioners, through counsel, advised respondent to report for work in the construction site
within 10 days from receipt thereof.
 Respondent submitted, however, on May 16, 2001 a manifestation to the Labor Arbiter that actual animosities
existed between him and petitioners and there had been threats to his life and his family’s safety, hence, he
opted for the payment of separation pay.
 Petitioners denied the existence of any such animosity.
 Meanwhile, the NLRC dismissed petitioners’ appeal by Resolution of April 22, 2002, holding that respondent was
a regular employee and not a project employee, and that there was no valid ground for the termination of his
services.
 Petitioners’ appeal to the Court of Appeals was dismissed by Decision of August 12, 2004 which attained finality
on September 15, 2004.

ISSUE: WON separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best
interest of the parties

RULING:

Yes, an illegally dismissed employee is entitled to two reliefs: backwages and reinstatement. The two reliefs
provided are separate and distinct. In instances where reinstatement is no longer feasible because of strained relations
between the employee and the employer, separation pay is granted. In effect, an illegally dismissed employee is entitled
to either reinstatement, if viable, or separation pay if reinstatement is no longer viable, and backwages.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer
practical or in the best interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the
employee decides not to be reinstated.

Respondent is entitled to backwages and separation pay as his reinstatement has been rendered impossible due
to strained relations. As correctly held by the appellate court, the backwages due respondent must be computed from the
time he was unjustly dismissed until his actual reinstatement, or from February 1999 until June 30, 2005 when his
reinstatement was rendered impossible without fault on his part.