G.R. No.

164774 April 12, 2006

STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, Petitioners,

vs.
RONALDO D. SIMBOL, WILFREDA N. COMIA & LORNA E. ESTRELLA, Respondents.

Facts:

Petitioner Star Paper Corporation is a corporation engaged in trading – principally of paper products. Josephine Ongsitco
is its Manager of the Personnel and Administration Department while Sebastian Chua is its Managing Director.

The evidence for the petitioners show that respondents Simbol, Comia and Estrella were all regular employees of the
company.

Simbol was employed by the company on October 27, 1993. He met Alma Dayrit, also an employee of the company, whom
he married. Prior to the marriage, Ongsitco advised the couple that should they decide to get married, one of them should
resign pursuant to a company policy. Thus, Simbol resigned from the company.

Comia was hired by the company on February 5, 1997. She met Howard Comia, a co-employee, whom she married on
June 1, 2000. Ongsitco likewise reminded them that pursuant to company policy, one must resign should they decide to get
married. Comia resigned on June 30, 2000.

Estrella was hired on July 29, 1994. She met Luisito Zuñiga, also a co-worker. Petitioners stated that Zuñiga, a married
man, got Estrella pregnant. The company allegedly could have terminated her services due to immorality but she opted to
resign on December 21, 1999. She got an accident and went on leave for 21 days. When she returned to work she was
denied to enter the company. Due to her urgent need for money, she later submitted a letter of resignation in exchange for
her thirteenth month pay.

Respondents files a complaint for unfair labor practice, constructive dismissal, separation pay and attorney’s fees. They
averred that the aforementioned company policy is illegal and contravenes Article 136 of the Labor Code. The Labor Arbiter
dismissed it for lack of merit. On appeal to the NLRC, the Commission affirmed the decision of the Labor Arbiter. The Court
of Appeals reversed the NLRC decision rendering that the dismissals were illegal and ordered the company to reinstate the
respondents. Hence, a petition for Review on Certiorari of the Decision of the Court of Appeals.

Issue:

Whether or not the policy of the employer banning spouse from working in the same company, a valid exercise of
management prerogative.

Ruling:

No, it is not a valid exercise of management prerogative and violates the rights of employees under the constitution. The
case at bar involves Article 136 of the Labor Code which provides “it shall be unlawful for an employer to require as a
condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate
expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.” The company
policy of Star Paper, to be upheld, must clearly establish the requirement of reasonableness. In the case at bar, there was
no reasonable business necessity. Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine
Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. The
questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under
the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the
discriminatory, albeit disproportionate, effect. Lastly, the absence of a statute expressly prohibiting marital discrimination in
our jurisdiction cannot benefit the petitioners.

The 1987 Constitution15 states our policy towards the protection of labor under the following provisions, viz.:

Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and
promote their welfare.
G.R. No. 163269 April 19, 2006

ROLANDO C. RIVERA, Petitioner,

vs.
SOLIDBANK CORPORATION, Respondent.

Facts:

Petitioner had been working for Solidbank Corporation, he was initially employed as an Audit Clerk, then as Credit
Investigator, Senior Clerk, Assistant Accountant, and Assistant Manager. Prior to his retirement, he became the Manager
of the Credit Investigation and Appraisal Division of the Consumer’s Banking Group. In the meantime, Rivera and his
brother-in-law put up a poultry business in Cavite.

Solidbank offered two retirement programs to its employees: (a) the Ordinary Retirement Program (ORP), under which an
employee would receive 85% of his monthly basic salary multiplied by the number of years in service; and (b) the Special
Retirement Program (SRP), under which a retiring employee would receive 250% of the gross monthly salary multiplied by
the number of years in service. Since Rivera was only 45 years old, he was not qualified for retirement under the ORP.

Deciding to devote his time and attention to his poultry business in Cavite, Rivera applied for retirement under the SRP.
Solidbank approved the application and gave petitioner the amount due to him. Rivera received the amount and confirmed
his separation from Solidbank on February 25, 1995. Subsequently, Solidbank required Rivera to sign an undated Release,
Waiver and Quitclaim, which was notarized on March 1, 1995. It stipulated that petitioner cannot “seek employment with
any competitor bank or financial institution within one (1) year from February 28, 1995.” Furthermore, the Solidbank was
entitled to go after the petitioner for the amount he received, in case of breach.

On May 1, 1995, the Equitable Banking Corporation employed Rivera as Manager of its Credit Investigation and Appraisal
Division of its Consumers’ Banking Group. Upon discovering this, Solidbank wrote a letter, informing Rivera that he had
violated the Undertaking. She likewise demanded the return of all the monetary benefits he received in consideration of the
SRP. When Rivera refused to return the amount demanded within the given period, Solidbank filed a complaint for Sum of
Money with Prayer for Writ of Preliminary Attachment before the RTC of Manila.

The trial court issued a Writ of Preliminary Attachment ordering Deputy Sheriff Eduardo Centeno to attach all of Rivera’s
properties not exempt from execution. Thus, the Sheriff levied on a parcel of land owned by Rivera. Thereafter, the trial
court issued an Order of Summary Judgment rendered in favor of plaintiff and against defendant ordering the latter to pay
to plaintiff bank. The trial court declared that there was no genuine issue as to a matter of fact in the case since Rivera
voluntarily executed the Release, Waiver and Quitclaim, and the Undertaking. Aggrieved, Rivera appealed the ruling to the
CA which rendered judgment partially granting the appeal that the attachment and levy of family home is set aside. Thus, a
Petition for Review on Certiorari is the decision of the Court of Appeals.

Issue:

Whether or not the undated Release, Waiver and Quitclaim is void for being contrary to the Constitution, the law and public
policy, because it was unreasonable, arbitrary, oppressive, discriminatory, cruel, unjust, inhuman, and violative of his human
rights.

Ruling:

Yes. The stipulation in the contract is against public policy, in that it is injurious to the public or against the public good.
Generally, the law does not relieve a party from the effects of an unwise, foolish or disastrous contract, entered into with full
awareness of what he was doing and entered into and carried out in good faith. Such a contract will not be discarded even
if there was a mistake of law or fact. On the other hand, retirement plans, in light of the constitutional mandate of affording
full protection to labor, must be liberally construed in favor of the employee, it is the general rule that pension or retirement
plans formulated by the employer are to be construed against it. Retirement benefits, after all, are intended to help the
employee enjoy the remaining years of his life, releasing him from the burden of worrying for his financial support, and are
a form of reward for being loyal to the employer. Respondent, as an employer, is burdened to establish that a restrictive
covenant barring an employee from accepting a competitive employment after retirement or resignation is not an
unreasonable or oppressive, or in undue or unreasonable restraint of trade, thus, unenforceable for being repugnant to
public policy.

Freedom to contract must not be unreasonably abridged. Neither must the right to protect by reasonable restrictions that
which a man by industry, skill and good judgment has built up, be denied.

In determining whether the contract is reasonable or not, the trial court should consider the following factors: (a) whether
the covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on
the employee; (c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations
contained in the covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy.
G.R. No. 220998, August 08, 2016

HOLCIM PHILIPPINES, INC., Petitioner, v. RENANTE J. OBRA, Respondent.

Facts:

Respondent was employed by petitioner as packhouse operator in its La Union Plant for nineteen (19) years. On July 8,
2013, Obra was about to exit Holcim Plant when the security guard ask to submit himself his backpack for inspection in
which he refuse and disclose to the security guard that he has a scrap electrical wire in his bag and ask the security guard
not to tell it to the management. However, the security guard disagreed which prompted Obra to return the scrap electrical
wire. Thereafter, another security guard arrived and directed him to go to the security office and write a statement regarding
the incident. In his statement he alleged that he does not have any intention to steal and explained that the 16-meter
electrical wire was a mere scrap that he had asked from the contractor who removed it from the Packhouse Office. He also
averred that as far as he knows, only scrap materials which are to be taken out of the company premises in bulk required a
gate pass and that he had no idea that it was also necessary to takeout a piece of loose, scrap wire out of the company's
premises.

Obra then received a letter directing him to explain why no disciplinary action should be taken against him including
termination. He was placed also under preventive suspension for thirty days. On August 8, 2013, Holcim issued a resolution
dismissing Obra for serious misconduct. petitioner found no merit in respondent's claim that he was unaware that a gate
pass is required to take out a piece of scrap wire, pointing out that the same is incredulous since he had been working
thereat for nineteen (19) years already. It also drew attention to the fact that respondent refused to submit his bag for
inspection, which, according to petitioner, confirmed his intention to take the wire for his personal use. Further, petitioner
emphasized that respondent's actions violated its rules which, among others, limit the use of company properties for
business purposes only and mandate the employees, such as respondent, to be fair, honest, ethical, and act responsibly
and with integrity. Obra sought for reconsideration but was denied.

Obra filed a complaint for Illegal dismissal and money claims averring that the penalty of dismissal from service imposed
upon him was too harsh since he had acted in good faith in taking the piece of scrap wire. Labor Arbiter (LA) dismissed
respondent's complaint and held that the latter was validly dismissed from service by petitioner for committing the crime of
theft, and therefore, not entitled to reinstatement, backwages, and other money claims.

NLRC reversed the LA's ruling and held that the penalty of dismissal from service imposed upon respondent was unduly
harsh since his misconduct was not so gross to deserve such penalty. It found merit in respondent's defense that he took
the scrap wire on the belief that it was already for disposal, noting that petitioner never denied the same. Moreover; he did
not hold a position of trust and confidence and was remorseful of his mistake, as evidenced by his repeated pleas for another
chance

Court of Appeals affirmed decision of the NLRC. It agreed with the NLRC's observation that respondent was illegally
dismissed, pointing out that petitioner failed to prove that it prohibited its employees from taking scrap materials outside the
company premises. Besides, respondent's taking of the scrap wire did not relate to the performance of his work as
packhouse operator. Hence, a petition for review on certiorari was filed by Holcim.

Issue:

Whether or not Obra was illegally dismiss.

Ruling:

Yes. There is no question that the employer has the inherent right to discipline, including that of dismissing its employees
for just causes. This right is, however, subject to reasonable regulation by the State in the exercise of its police power.
Accordingly, the finding that an employee violated company rules and regulations is subject to scrutiny by the Court to
determine if the dismissal is justified and, if so, whether the penalty imposed is commensurate to the gravity of his offense.

As in the foregoing cases, herein respondent deserves compassion and humane understanding more than condemnation,
especially considering that he had been in petitioner's employ for nineteen (19) years already, and this is the first time that
he had been involved in taking company property, which item, at the end of the day, is practically of no value. Besides,
respondent did not occupy a position of trust and confidence, the loss of which would have justified his dismissal over the
incident.

Based on the circumstances of this case, respondent's dismissal was not justified. This notwithstanding, the disposition of
the CA should be modified with respect to the consequential award of "separation pay in lieu of reinstatement," which was
assailed in the instant petition as one which has "no factual, legal or even equitable basis."

As a general rule, an illegally dismissed employee is entitled to: (a) reinstatement (or separation pay, if reinstatement is not
viable); and (b) payment of full backwages.
G.R. No. 148340 January 26, 2004

J.A.T. GENERAL SERVICES and JESUSA ADLAWAN TOROBU, Petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION and JOSE F. MASCARINAS, Respondents.

Facts:

Petitioner Jesusa Adlawan Trading & General Services (JAT) is a single proprietorship engaged in the business of selling
second-hand heavy equipment. JAT is owned by its namesake, co-petitioner Jesusa Adlawan Torobu. Sometime in April
1997, JAT hired private respondent Jose F. Mascarinas as helper tasked to coordinate with the cleaning and delivery of the
heavy equipment sold to customers.

In October 1997, the sales of heavy equipment declined because of the Asian currency crisis. Consequently, JAT
temporarily suspended its operations. It advised its employees, including private respondent, not to report for work starting
on the first week of March 1998. JAT indefinitely closed shop effective May 1998. A few days after, private respondent filed
a case for illegal dismissal and underpayment of wages against petitioners before the NLRC. In his complaint, he related
that he was one of those retrenched from employment by JAT and was allegedly required to sign a piece of paper which he
refused, causing his termination from employment.

On December 14, 1998, JAT filed an Establishment Termination Report with the Department of Labor and Employment
(DOLE), notifying the latter of its decision to close its business operations due to business losses and financial reverses.

Labor Arbiter rendered a decision, finding the dismissal of herein private respondent unjustified and ordering JAT to pay
private respondent separation pay and backwages. On appeal, the NLRC affirmed the decision of the LA. Dissatisfied,
petitioners filed a Petition for Certiorari before the Court of Appeals which the latter dismissed. Petitioners then filed a Motion
of Reconsideration, which was also denied. Thus, petition for review before the Supreme Court.

Issue/s:
1. Whether or not private respondent was illegally dismissed from employment due to closure of petitioners’ business.
2. Whether or not private respondent is entitled to separation pay, backwages and other monetary awards.

Ruling:

No. The closure of business operation by petitioners, in our view, is not tainted with bad faith or other circumstance that
arouses undue suspicion of malicious intent. The decision to permanently close business operations was arrived at after a
suspension of operation for several months precipitated by a slowdown in sales without any prospects of improving. There
were no indications that an impending strike or any labor-related union activities precipitated the sudden closure of business.
Further, contrary to the findings of the Labor Arbiter, petitioners had notified private respondent and all other workers through
written letters dated November 25, 1998 of its decision to permanently close its business and had submitted a termination
report to the DOLE. Under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business
operations, namely: (a) service of a written notice to the employees and to the DOLE at least one (1) month before the
intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the employees of
termination pay amounting to at least one-half (1/2) month pay for every year of service, or one (1) month pay, whichever
is higher. All the requisites were present.

Considering that private respondent was not illegally dismissed, however, no backwages need to be awarded. Backwages
in general are granted on grounds of equity for earnings which a worker or employee has lost due to illegal dismissal. It is
well settled that backwages may be granted only when there is a finding of illegal dismissal.

The other monetary awards to private respondent are undisputed by petitioners and unrefuted by any contrary evidence.
These awards, namely legal holiday pay, service incentive leave pay and 13th month pay, should be maintained. The
closure of business operation is allowed under the Labor Code, provided separation pay be paid to the terminated employee.
It is settled that in case of closure or cessation of operation of a business establishment not due to serious business losses
or financial reverses, the employees are always given separation benefits. The amount of separation pay must be computed
from the time private respondent commenced employment with petitioners until the time the latter ceased operations.