Jethro Intelligence & Security Corp and Yakult Philippines, Inc. versus The Hon.

Secretary of
Labor, Frederick Garcia, Gil Cordero, Leonielyn Udalbe, Michael Benoza, Edwin Abliter,
Celedonio Subere and Ma. Corazon Lanuza

G.R. No. 172537

August 14, 2009

Facts: Petitioner Jethro Intelligence and Security Corporation (Jethro) is a security service
contractor with a security service contract agreement with co-petitioner Yakult Phils., Inc.
(Yakult). The Department of Labor and Employment (DOLE)-Regional Office No. IV conducted
an inspection at Yakult’s premises in Calamba, Laguna in the course of which several labor
standards violations were noted, including keeping of payrolls and daily time records in the
main office, underpayment of wages, overtime pay and other benefits, and non-registration
with the DOLE as required under Department Order No. 18-02.

The DOLE Regional Director, noting petitioners’ failure to rectify the violations noted during the
above-stated inspection within the period given for the purpose, found them jointly and
severally liable to herein respondents for the aggregate amount of EIGHT HUNDRED NINE
THOUSAND TWO HUNDRED TEN AND 16/100 PESOS (P809,210.16) representing their wage
differentials, regular holiday pay, special day premium pay, 13th month pay, overtime pay,
service incentive leave pay, night shift differential premium and rest day premium. Petitioners
were also ordered to submit proof of payment to the claimants within ten calendar days, failing
which the entire award would be doubled, pursuant to Republic Act No. 8188, and the
corresponding writs of execution and garnishment would be issued.

Jethro and Yakult appealed to the Secretary of Labor (SOLE). Then SOLE Patricia A. Sto. Tomas
partially granted petitioner Jethro’s appeal by affirming with modification the Regional Director’s
Order dated September 9, 2004 by deleting the penalty of double indemnity and setting aside
the writs of execution and garnishment, without prejudice to the subsequent issuance by the
Regional Director of the writs necessary to implement the said Decision. They filed a Motion for
Reconsideration the SOLE Decision, which was denied. They then filed a petition for certiorari
before the Court of Appeals. The CA denied the petition. They filed another Motion for
Reconsideration which was denied so they filed a petition for review on certiorari with the
Supreme Court.

Issue: W/N certiorari should be granted (w/n there was grave abuse of discretion on the part
of the SOLE and W/N the writs of execution and garnishment subsequently issued were not in
order since Petitioners have filed the required bond equivalent to the judgment award, and the
Regional Director’s Order was not served on their counsel of record.

Ruling: The petition is bereft of merit.

 The sole office of a writ of certiorari is the correction of errors of jurisdiction including the
commission of grave abuse of discretion amounting to lack of jurisdiction. It does not include the
correction of a tribunal’s evaluation of the evidence and factual findings thereon, especially since
factual findings of administrative agencies are generally held to be binding and final so long as
they are supported by substantial evidence in the record of the case.

In dismissing petitioners’ petition for certiorari and thus affirming the SOLE Decision,
the appellate court did not err. The scope of the visitorial powers of the SOLE and his/her duly
authorized representatives was clarified in Allied Investigation Bureau, Inc. v. Secretary of Labor
and Employment,[12] viz:

While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has
jurisdiction to hear and decide cases where the aggregate money claims of each employee
exceeds P5,000.00, said provisions do not contemplate nor cover the visitorial and enforcement
powers of the Secretary of Labor or his duly authorized representatives.

Rather, said powers are defined and set forth in Article 128 of the Labor Code (as
amended by R.A. No. 7730) thus:

Art. 128. Visitorial and enforcement power.—

xxxx

(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in
cases where the relationship of employer-employee exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have the power to issue compliance
orders to give effect to the labor standards provisions of this Code and other labor legislation
based on the findings of labor employment and enforcement officers orindustrial safety
engineers made in the course of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate authority for the enforcement
of their orders, except in cases where the employer contests the finding of the labor
employment and enforcement officer and raises issues supported by documentary proofs
which were not considered in the course of inspection. [Emphasis, underscoring and italics
supplied]

In the case at bar, the Secretary of Labor correctly assumed jurisdiction over the case as it
does not come under the exception clause in Art. 128(b) of the Labor Code. While petitioner
Jethro appealed the inspection results and there is a need to examine evidentiary matters to
resolve the issues raised, the payrolls presented by it were considered in the ordinary course of
inspection. While the employment records of the employees could not be expected to be
found in Yakult’s premises in Calamba, as Jethro’s offices are in Quezon City, the
records show that Jethro was given ample opportunity to present its payrolls and other
pertinent documents during the hearings and to rectify the violations noted during the ocular
inspection. It, however, failed to do so, more particularly to submit competent proof that it
was giving its security guards the wages and benefits mandated by law.

Jethro’s failure to keep payrolls and daily time records in Yakult’s premises was not the
only labor standard violation found to have been committed by it; it likewise failed to register as
a service contractor with the DOLE, pursuant to Department Order No. 18-02 and, as earlier
stated, to pay the wages and benefits in accordance with the rates prescribed by law.

Lastly, Sec. 5, Rule V (Execution) of the Rules on Disposition of Labor Standards Cases in
Regional Offices provides that the filing of a petition for certiorari shall not stay the execution of
the appealed order or decision, unless the aggrieved party secures a temporary restraining order
(TRO) from the Court. In the case at bar, no TRO or injunction was issued, hence, the issuance of
the questioned writs of execution and garnishment by the DOLE-Regional Director was in order.

Peñaranda vs chua

489 SCRA 94 – Labor Law – Labor Standards – Overtime Pay and Premium Pay of Managerial
Employees
In June 1999, Peñaranda was hired by Baganga Plywood Corporation (owned by Hudson Chua)
to take charge of the operations and maintenance of its steam plant boiler. Peñaranda was
employed as a Foreman/Boiler Head/Shift Engineer tasked to do the following tasks among
others:
“1. To supply the required and continuous steam to all consuming units at minimum cost.
“2. To supervise, check and monitor manpower workmanship as well as operation of boiler and
accessories.
“3. To evaluate performance of machinery and manpower.
xxx
“5. To train new employees for effective and safety while working.
xxx
“7. To recommend personnel actions such as: promotion, or disciplinary action.
xxx
In 2001, BPC shut down due to some repairs and maintenance. BPC did not technically fire
Peñaranda but due to the latter’s insistence, BPC gave him his separation benefits.
BPC subsequently reopened but Peñaranda did not reapply.
Peñaranda now claims that BPC still needed to pay him his overtime pays and premium pays.
The NLRC ruled that Peñaranda is a managerial employee and as such he is not entitled to
overtime and premium pay as stated under the Labor Code. Peñaranda appealed. He said that
he is not a managerial employee.
ISSUE: Whether or not Peñaranda is entitled to overtime and premium pay.
HELD: No. Though there is an error made by the NLRC in finding Peñaranda as a managerial
employee, the Supreme Court still ruled that Peñaranda is not entitled to overtime and premium
pay.
Peñaranda is not a managerial employee. Under the Implementing Rules and Regulations of the
Labor Code, managerial employees are those that perform the following:
“(1) Their primary duty consists of the management of the establishment in which they are
employed or of a department or subdivision thereof;
“(2) They customarily and regularly direct the work of two or more employees therein;
“(3) They have the authority to hire or fire other employees of lower rank; or their suggestions
and recommendations as to the hiring and firing and as to the promotion or any other change of
status of other employees are given particular weight.”
Peñaranda does not meet the above requirements.
Peñaranda is instead considered as a managerial staff. Under the Implementing Rules and
Regulations of the Labor Code, managerial staffs are those that perform the following:
“(1) The primary duty consists of the performance of work directly related to management
policies of the employer;
“(2) Customarily and regularly exercise discretion and independent judgment;
“(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty
consists of the management of the establishment in which he is employed or subdivision thereof;
or (ii) execute under general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or (iii) execute under general supervision special
assignments and tasks; and
“(4) who do not devote more than 20 percent of their hours worked in a workweek to activities
which are not directly and closely related to the performance of the work described in paragraphs
(1), (2), and (3) above.”
Peñaranda’s function as a shift engineer illustrates that he was a member of the managerial staff.
His duties and responsibilities conform to the definition of a member of a managerial staff under
the Implementing Rules.
Peñaranda supervised the engineering section of the steam plant boiler. His work involved
overseeing the operation of the machines and the performance of the workers in the engineering
section. This work necessarily required the use of discretion and independent judgment to ensure
the proper functioning of the steam plant boiler.
Further, Peñaranda in his position paper admitted that he was a supervisor for BPC. As supervisor,
petitioner is deemed a member of the managerial staff.

Arco Metal Products Co., Inc., et al., vs. Samahan ng Mga Manggagawa sa Arco-Metal-NAFLU
G.R. No. 170734
May 14, 2008

Facts: Petitioner is a company engaged in the manufacture of metal products, whereas

respondent is the labor union of petitioner’s rank and file employees. Sometime in December
2003, petitioner paid the 13th month pay, bonus, and leave encashment of three union members
in amounts proportional to the service they actually rendered in a year, which is less than a full
twelve (12) months. Respondent protested the prorated scheme, claiming that on several
occasions petitioner did not prorate the payment of the same benefits to seven (7) employees
who had not served for the full 12 months. According to respondent, the prorated payment
violates the rule against diminution of benefits under Article 100 of the Labor Code.

Thus, they filed a complaint before the National Conciliation and Mediation Board (NCMB).

Issue: Whether or not the grant of 13th month pay, bonus, and leave encashment in full
regardless of actual service rendered constitutes voluntary employer practice and, consequently,
whether or not the prorated payment of the said benefits constitute diminution of benefits under
Article 100 of the Labor Code.

Ruling: Any benefit and supplement being enjoyed by employees cannot be reduced, diminished,
discontinued or eliminated by the employer. The principle of non-diminution of benefits is
founded on the Constitutional mandate to "protect the rights of workers and promote their
welfare and to afford labor full protection. Said mandate in turn is the basis of Article 4 of the
Labor Code which states that all doubts in the implementation and interpretation of this Code,
including its implementing rules and regulations shall be rendered in favor of labor.

Jurisprudence is replete with cases which recognize the right of employees to benefits which
were voluntarily given by the employer and which ripened into company practice. Thus in
DavaoFruits Corporation v. Associated Labor Unions, et al. where an employer had freely and
continuously included in the computation of the 13th month pay those items that were expressly
excluded by the law, we held that the act which was favorable to the employees though not
conforming to law had thus ripened into a practice and could not be withdrawn, reduced,
diminished, discontinued or eliminated. In Sevilla Trading Company v. Semana, we ruled that the
employer’s act of including non-basic benefits in the computation of the 13th month pay was a
voluntary act and had ripened into a company practice which cannot be peremptorily
withdrawn.

In the years 1992, 1993, 1994, 1999, 2002 and 2003, petitioner had adopted a policy of freely,
voluntarily and consistently granting full benefits to its employees regardless of the length of
service rendered. True, there were only a total of seven employees who benefited from such a
practice, but it was an established practice nonetheless. Jurisprudence has not laid down any rule
specifying a minimum number of years within which a company practice must be exercised in
order to constitute voluntary company practice. Thus, it can be six (6) years, three (3) years, or
even as short as two (2) years. Petitioner cannot shirk away from its responsibility by merely
claiming that it was a mistake or an error, supported only by an affidavit of its manufacturing
group head. Hence, petition was denied.

[G. R. No. 129329. July 31, 2001]

ESTER M. ASUNCION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, Second
Division, MABINI MEDICAL CLINIC and DR. WILFRIDO JUCO, respondents.

FACTS:

Petitioner Ester M. Asuncion was employed as an accountant/bookkeeper by the respondent

Mabini Medical Clinic. Sometime in May 1994, certain officials of the NCR-Industrial Relations
Division of the Department of Labor and Employment conducted a routine inspection of the
premises of the respondent company and discovered upon the disclosure of the petitioner of
(documents) violations of the labor standards law such as the non-coverage from the SSS of the
employees. Consequently, respondent Company was made to correct these violations.

On August 9, 1994, the private respondent, Medical Director Wilfrido Juco, issued a
memorandum to petitioner charging her with the following offenses:
1. Chronic Absentism (sic) – You have incurred since Aug. 1993 up to the present 35 absences
and 23 half-days.
2. Habitual tardiness – You have late (sic) for 108 times. As shown on the record book.
3. Loitering and wasting of company time – on several occasions and witnessed by several
employees.
4. Getting salary of an absent employee without acknowledging or signing for it.
5. Disobedience and insubordination – continued refusal to sign memos given to you.[1]
Petitioner was required to explain within two (2) days why she should not be terminated
based on the above charges.

Three days later, in the morning of August 12, 1994, petitioner submitted her response to the
memorandum. On the same day, respondent Dr. Juco, through a letter dated August 12, 1994,
dismissed the petitioner on the ground of disobedience of lawful orders and for her failure to
submit her reply within the two-day period. This prompted petitioner to file a case for illegal
termination
ISSUES:

WHETHER OR NOT THE PETITIONER WAS VALIDLY DISMISSED

HELD:

The petition is impressed with merit.

Although, it is a legal tenet that factual findings of administrative bodies are entitled to great
weight and respect, we are constrained to take a second look at the facts before us because of
the diversity in the opinions of the Labor Arbiter and the NLRC.[5] A disharmony between the
factual findings of the Labor Arbiter and those of the NLRC opens the door to a review thereof
by this Court.[6]
It bears stressing that a worker’s employment is property in the constitutional sense. He
cannot be deprived of his work without due process. In order for the dismissal to be valid, not
only must it be based on just cause supported by clear and convincing evidence,[7] the
employee must also be given an opportunity to be heard and defend himself. [8] It is the
employer who has the burden of proving that the dismissal was with just or authorized cause.[9]
The failure of the employer to discharge this burden means that the dismissal is not justified and
that the employee is entitled to reinstatement and backwages.[10]
In the case at bar, there is a paucity of evidence to establish the charges of
absenteeism and tardiness. We note that the employer company submitted mere handwritten
listing and computer print-outs. The handwritten listing was not signed by the one who made
the same. As regards the print-outs, while the listing was computer generated, the entries of
time and other annotations were again handwritten and unsigned.[11]
The record is bereft of any showing that complainant was ever warned of her absences prior to
her dismissal on August 9, 1994. The alleged notices of her absences from August 17, until
September 30, 1993, from October until November 27, 1993, from December 1, 1993 up to
February 26, 1994 and the notice dated 31 May 1994 reminding complainant of her five (5)
days absences, four (4) half-days and tardiness for 582 minutes (Annex “1” to “1-D” attached to
respondent’ Rejoinder), fail to show that the notices were received by the complainant. The
allegation of the respondents that the complainant refused to received (sic) the same is self-
serving and merits scant consideration
The Court, likewise, takes note of the fact that the two-day period given to petitioner to explain
and answer the charges against her was most unreasonable, considering that she was charged
with several offenses and infractions (35 absences, 23 half-days and 108 tardiness), some of
which were allegedly committed almost a year before, not to mention the fact that the charges
leveled against her lacked particularity.
Apart from chronic absenteeism and habitual tardiness, petitioner was also made to answer for
loitering and wasting of company time, getting salary of an absent employee without
acknowledging or signing for it and disobedience and insubordination.[18] Thus, the Labor
Arbiter found that actually petitioner tried to submit her explanation on August 11, 1994 or
within the two-day period given her, but private respondents prevented her from doing so by
instructing their staff not to accept complainant’s explanation, which was the reason why her
explanation was submitted a day later.[19]
The law mandates that every opportunity and assistance must be accorded to the employee
by the management to enable him to prepare adequately for his defense.[20] In Ruffy v.
NLRC,[21] the Court held that what would qualify as sufficient or “ample opportunity,” as
required by law, would be “every kind of assistance that management must accord to the
employee to enable him to prepare adequately for his defense.” In the case at bar, private
respondents cannot be gainsaid to have given petitioner the ample opportunity to answer the
charges leveled against her.
From the foregoing, there are serious doubts in the evidence on record as to the factual basis of
the charges against petitioner. These doubts shall be resolved in her favor in line with the policy
under the Labor Code to afford protection to labor and construe doubts in favor of
labor.[22] The consistent rule is that if doubts exist between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. The
employer must affirmatively show rationally adequate evidence that the dismissal was for a
justifiable cause.[23] Not having satisfied its burden of proof, we conclude that the employer
dismissed the petitioner without any just cause. Hence, the termination is illegal.