Chapter 1: General Provisions

Topic: Evidence

UY v. CENTRO CERAMICA CORPORATION

Facts:

Petitioner Uy became full-time sales executive in respondent Centro Ceramica Corp in May, 2001. He filed a
complaint for illegal dismissal against respondent company and its President Ramonita Sy and VP Milagros Garcia.

Petitioner alleged that the certain events involving longtime clients led to a strained working relationship between
him and Garcia. On February 19, 2002, petitioner was informed by his superior, Richard Agcaoili, that he was to
assume a new position in the marketing department, to which he replied that he will think it over. That same day,
he was summoned by Sy and Garcia for a closed-door meeting during which he was informed of his termination due
to “insubordination” and advised him to turn over his samples and files immediately. Petitioner then asked for his
termination paper and thereupon Sy told him that “if that’s what you want, I’ll give it to you.”

Petitioner then turned over company samples, accounts and receivables to Agcaoili. Thereafter, he didn’t report for
anymore. Respondent company sent to his apartment two Memos of Notice of Charges Petitioner asserted that he
is entitled to his unpaid commission, tax refund, backwages and reinstatement. The respondents on the other hand,
denied dismissing petitioner, that it was petitioner who voluntarily left his workplace and refused to report for work
due to his poor sales performance and the possibility of transferring to another department.

The LA in its decision dismissed petitioner’s complaint finding that it was petitioner who opted not to report for work
after offering to resign. The NLRC reversed the LA’s ruling stating that petitioner’s dismissal was made under
questionable circumstances. The CA reversed NLRC’s decision finding that based on the evidence on record, it was
petitioner who “informally severed” the employment relationship as manifested of turning over his accountabilities
and not reporting for work anymore.

Issue:

Whether was dismissed by the respondents or voluntarily severed his employment by abandoning his job.

Ruling:

The Court grants the petition. The Court finds that the NLRC’s finding of illegal dismissal is supported by the totality
of evidence and more consistent with logic and ordinary human experience than the common finding of the LA and
CA that the petitioner informally severed his employment relationship with the company. The crucial factor is the
verbal order directly given by Sy, for petitioner to immediately turn over his accountabilities. In this case, the
evidence on record suggests that petitioner did not resign; he was orally dismissed by Sy. Since there is no evidence
that all other sales personnel who didn’t meet the quota was also reprimanded and that due to their strained
relationship, the petitioner could not have been properly informed of the actual ground for his dismissal. But more
importantly, respondents terminated petitioner first and only belatedly sent him written notices of charges against
him. It is this lack of clear, valid and legal cause not to mention due process, that made his dismissal illegal.
Topic: Article 4

PENAFLOR v OUTDOOR CLOTHING MANUFACTURING CORPORATION

Facts:

Petitioner was working as the Human Resource Department Manager of respondent company, there were two staffs
who were working under him. His relationship with the company went well however his close association with the
Vice President for Operations Edgar Lee who left the company after a big fight with the Chief Corporate Officer
Nathaniel Syfu bore the latter’s ire towards petitioner.

When the company began undertaking its alleged downsizing program, petitioner alleged that his department was
singled out because the two staffs under him were dismissed, leaving him the only member of the HRD and
compelling him to work all personnel related work.

After petitioner returned from his field work, he was informed that Syfu appointed Nathaniel Buenaobra as the new
HRD Manager which was confirmed by Syfu’s memorandum. Petitioner claimed that he tried to talk to Syfu but was
unable to do so. Under these circumstances he had no option but to resign. He then submitted an irrevocable
resignation from his employment in the respondent company.

Petitioner then filed a complaint for illegal dismissal with the LA, claiming that he has been constructively dismissed
praying for reinstatement, payment of backwages, illegally salaries, damages, attorney’s fees and other money
claims.

Issue:

Whether Penaflor filed his letter of resignation before or after the appointment of Buenaobra as the new HRD
Manager

Ruling:

The question of when Penaflor submitted his resignation letter arises because this letter was undated. Thus, the
parties have directly opposing claims on the matter. In the Court’s view however, it is more consistent with human
experience that Penaflor indeed learn of the appointment of Buenaobra only on March 13, 2000 and reacted to this
development through his resignation letter after realizing that he would only face hostility and frustration in his
working environment.

Under the basic principle that is expressed in Article 4 of the Labor Code – that all doubts in the interpretation and
implementation of the Labor Code, it should be interpreted in favor of the workingman. This principle has been
extended by jurisprudence to cover doubts in the evidence presented by the employer and the employee. As shown
above, Penaflor has, at the very least, shown serious doubts about the merits of the company’s case, particularly in
the appreciation of the clinching evidence on which the NLRC and CA decisions were based. In such contest of
evidence, the cited Article 4 compels the Court the rule in Penaflor’s favor. Thus, the Court finds that Penaflor was
constructively dismissed given the hostile and discriminatory working environment he found himself in, particularly
evidenced by the escalating acts of unfairness against him that culminated in the appointment of another HRD
Manager without any prior notice to him. Where no less than the company’s chief corporate officer was against him,
Penaflor had no alternative but to resign from his employment.
Topic: Article 4

DE CASTRO v. LIBERTY BROADCASTING NETWORK INC.

Facts:

Respondent company thru its HRD sent a notice to the petitioner who was a Building Administrator requiring him to
explain within 48 hours why he should not be made liable for violation of the Company Code of Conducts for acts
constituting serious misconduct, fraud and willful breach of the trust reposed in him as a managerial employee.

Petitioner denied all the allegations and labelled them as completely baseless and sham. At the petitioner’s request,
a formal hearing was scheduled however, upon learning that criminal cases for estafa and qualified theft had been
filed against him at the Makati Prosecutor’s Office, he sent a notice that he would not participate to said hearing.

The respondent company issued a notice of dismissal against petitioner. Petitioner then filed a complaint for illegal
dismissal against the respondents with the LA which decided in his favor and held that he was illegally dismissed.
The LA disbelieved the affidavits of respondents since they had altercations with petitioner prior to the issuance of
the notice of violation to the latter. NLRC adopted this ruling. The CA however, confirmed the validity of the
petitioner’s dismissal and that the NLRC gravely abused its discretion when it disregarded the affidavits of the
respondents.

Issue:

Whether the CA erred when it substituted its judgement for that of the LA and NLRC who were the “trier of facts”

Ruling:

The Court finds the petition meritorious. The CA erred in the appreciation of the evidence surrounding petitioner’s
termination from employment. The cited grounds are at best doubtful under the proven surrounding circumstances,
and should have been interpreted in the petitioner’s favor pursuant to Art. 4 of the Labor Code.

1. The petitioner had not stayed long in the company and had not even passed his probationary period when
the acts charged allegedly took place. This fact carries several significant implications. First, being new, his
natural motivation was to make an early positive impression on his employer. Thus, it is believable that as
a building administrator he diligently, zealously and faithfully performed his task. Second, because of this
motivation, and his lack of awareness of the dynamics of relationships within the company, he must have
been telling the truth when he said that he objected to the way the contract for the installation of fire
escapes was awarded to Samarita. Third, his being somehow new rendered doubtful the charge of
solicitation.
2. The relationships within the company at the time the charges were filed showed that he was a stranger
who might not have known the dynamics of company inter-relationships and might have stepped on the
wrong toes in the course of performing his duties.
3. The timing of the filing of charges was unusual.

Under the circumstances, the Court joins the NLRC in concluding that the employer failed to prove just cause for the
termination of the petitioner’s employment – a burden the company, as employer, carries under the Labor Code –
and the CA erred when it saw grave abuse of discretion in the NLRC’s ruling. The evidentiary situation at the very
least, brings to the force the dictum 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. It is a time-honored rule in controversies between
a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreements and
writing should be resolved in the former’s favor.”
Book III: Conditions of Employment; Title I: Hours of Work – Arts. 82-96

CLIENTLOGIC PHILIPPINES INC (SITEL). v. CASTRO

Facts:

Respondent was employed by Sitel as a call center agent on February 2005. He was promoted as “Mentor” in August
2005 and again promoted to “Coach” position in September, 2005. In June 2006, he was transferred to the Dot Green
Account. While occupying said position he was terminated for violating the Dot Green’s Policy and Procedure for
Direct Deposit Bank Info Request and for requesting the medical records of his team members.

Respondent’s name and picture was not on the Organizational Chart posted by Sitel and a name and photo of
another employee appeared in the position. SItel also posted a vacancy for his position. Respondent then received
a notice of termination which prompted him to file a complaint of illegal dismissal, non-payment of overtime pay,
rest day pay, holiday pay, service incentive leave pay; full backwages, damages and attorney’s fees before the LA
against the petitioners.

Petitioner argued that respondent was terminated on account of valid and justifiable cause and that he was duly
furnished the twin notices required by the Labor Code. Further he is not entitled to overtime pay, rest day pay, night
shift differential, holiday pay and service incentive leave pay because he was a supervisor, hence a member of the
managerial staff.

The LA ruled in favor of respondent by declaring him illegally dismissed and ordered petitioners to pay his full
backwages and separation pay. LA also awarded respondent’s money claims after finding out that he was not
occupying a managerial position. NLRC reversed said decision and CA affirmed NLRC’s ruling however, CA concurred
with the LA’s ruling only in the issue of money claims.

Petitioner then argued that as a team supervisor, respondent was a member of the managerial staff hence not
entitled to overtime pay, rest day pay holiday pay and service incentive leave pay.

Issue:

Whether the duties and responsibilities performed by respondent as a “coach” qualify him as a member of
managerial staff.

Ruling:

No. Art. 82 of the Labor Code states that the provisions of the Labor Code on working conditions and rest periods
shall not apply to managerial employees. Generally managerial employees are not entitled to overtime pay for
services rendered in excess of eight hours a day.

Art. 212 of the Labor Code defines a managerial employee as “one who is vested with powers or prerogatives laid
down and execute management policies and/or hire, transfer, suspend, lay off, recall, discharge, assign or discipline
employees, or to effectively recommend such managerial actions.

A “coach” is a team supervisor who is in charge of dealing with customer complaints which could not be dealt with
by call center agents, and if a call center agent could not meet the needs of a customer, he passes the customer call
to the “coach.” Clearly, (respondent) is not a managerial employee as defined by law. Thus, he is entitled to money
claims.

Respondent’s work is not directly related to management policies. Even the circumstance reveal that he does not
regularly exercise discretion and independent judgment. His job description does not indicate that he can exercise
the powers of prerogatives equivalent to managerial actions which require the customary use of independent
judgment. He is entitled to his claims for holiday pay, service incentive leave pay overtime pay and rest day pay.
RA 10361 “Domestic Workers Act” or “Batas Kasambahay”

The law is a landmark piece of labor and social legislation that recognizes for the first-time domestic workers as
similar to those in the formal sector. It strengthens respect, protection and promotion of the rights and welfare of
domestic workers or kasambahay.

Specific acts declared unlawful under the law:

1. Employment of children below 15 years of age.

2. Withholding of the kasambahay’s wages.
3. Interference in the disposal of the kasambahay’s wages.
4. Requiring kasambahay to make deposits for loss or damage;
5. Placing the kasambahay under debt bondage; and
6. Charging another household for temporarily performed tasks.

Penalties for committing unlawful acts under the law

- Unlawful acts are punishable with administrative fine ranging from P10,000 to P40,000 to be imposed by
the DOLE Regional Offices.

Kasambahay covered by law

1. General househelp
2. Yaya
3. Cook
4. Gardener
5. Laundry person
6. Working children or domestic workers 15 years old and above but below 18 years of age; or
7. Any person who regularly performs domestic work in one household on an occupational basis (live-out
arrangement

Termination of contract

- The contract may be terminated anytime if both the employer and kasambahay mutually agree upon
written notice.
- The contract may be terminated either by the employer or kasambahay even if the duration of the domestic
service is not determined in the contract provide that a notice to end the working relationship five days
before the intended date of termination of service is given.

Entitlements of kasambahay unjustly dismissed by the employer

1. Outright payment of earned wage; and

2. Indemnity benefit in the form of wage equivalent to 15 days work.

Mandatory benefits of kasambahay

1. Monthly minimum wage

2. Daily rest period of 8 hours
3. Weekly rest period of 24 hours (uninterrupted)
4. 5 days annual service incentive leave with pay
5. SSS benefit
6. Philhealth benefit
7. Pag-IBIG benefit
ULTRA VILLA FOOD HAUS v. GENISTON

Facts:

Respondent was hired by petitioner as a “do it all guy” acting as waiter, driver, maintenance man in Ultra Villa Food
Haus Restaurant. Respondent did not report to work for two days because he acted as a poll watcher for the National
Union of Christian Democrats during the elections. Because of this, respondent was dismissed from work.
Respondent pleaded his case but was only subjected to a “brow beating” by the petitioner who even attempted to
force him to sign a resignation letter.

Respondent then filed for illegal dismissal in LA and prayed that the petitioner be ordered to pay him overtime pay,
holiday pay, service incentive leave pay, salary differential and 13th month pay. He also prayed for reinstatement
plus backwages or as alternative, separation pay, moral damages, exemplary damages and attorney’s fees.

Petitioner however maintained that respondent was her personal driver not an employee of the restaurant.
Petitioner denied dismissing respondent whom she claimed abandoned his job.

The LA concluded that respondent was a personal driver since the complainant already admitted that he was hired
as a personal driver which is incongruent to his claim that he also worked as a waiter which are different in nature.
Thus, respondent was not entitled to overtime pay, premium pay, service incentive leave pay and 13th month pay.
However, the NLRC reversed LA’s decision ordered petitioner to pay respondent backwages, overtime pay, premium
pay for holiday and rest days, 13th month pay and service incentive pay and separation pay in lieu of reinstatement.

Issue/s:

1. Whether the respondent is a personal driver and thus not entitled to said benefits
2. Whether respondent abandoned his job resulting to his dismissal.

Ruling:

1. Yes. The Court finds that respondent was indeed a personal driver of petitioner and not an employee of
Ultra Villa Food Haus based on his admission on mandatory conference, he was not in the payroll of the
restaurant, affidavits of the employees of the restaurant that he was never an employee of the
establishment, petitioner’s allegations that would support that respondent’s position as driver would be
“incongruous” with his function as waiter and joint affidavit of the warehouseman and warehouse checker
about the schedule of petitioner and the respondent as being her driver.

In contrast, respondent has not presented any evidence other than self-serving allegation to show that he
was employed in Ultra Villa. Thus, the LA correctly held that respondent was petitioner’s personal driver
and not an employee of the subject establishment.

Accordingly, the terms and conditions of respondent’s employment are governed by Chap 3 Title 3 Book 3
of the Labor Code. Article 141 provides that domestic or household service x x x includes services of family
drivers.
Chap 3 Title 3 Book 3, however is silent on the grant of the overtime pay, holiday pay, premium pay and
service incentive leave to those engaged in the domestic or household service.

Moreover, specific provisions mandating these benefits particularly in Article 82 of Book 3 Title 1 of the
Labor Code expressly excludes domestic helpers from its coverage. Clearly then, petitioner is not obliged
 by law to grant private respondent any of these benefits. Private respondent is also not entitled to 13th
month pay since Revised Guidelines on the Implementation of the 13th Month Pay Law excludes employers
of household workers from the coverage of PD No. 851.

2. No. To constitute abandonment, two requisites must concur: (1) the failure to report to work or absence
without valid or justifiable reason and (2) clear intention to sever the employer-employee relationship as
manifested by some overt acts. The burden of proving abandonment as a just cause for dismissal is on the
employer. Petitioner failed to discharge this burden. Petitioner likewise concedes that she failed to comply
with due process in dismissing respondent since the latter abandoned his just which cannot stand in the
case at bar. Thus, petitioner is ordered to pay respondent 13th month pay and indemnities.

LAGATIC v. NLRC

Facts:

Petitioner was employed in Cityland as a marketing specialist. One of their tasks is to make cold calls which refers to
the practice of prospecting for clients through the telephone directory. Cityland requires the submission of daily
progress reports on the same to assess cold calls made by the sales staff and to determine the results thereof.

Cityland then issued a written reprimand to petitioner for his failure to submit cold call reports for the months of
September and October 1991. He failed again to submit such report for September and October 1992. Petitioner
was required to explain his inaction , with a warning that further non-compliance would result to his termination.

After being suspended, petitioner failed again to submit cold call reports. HE was reminded to submit the same but
instead of complying he wrote a note “to hell with cold calls, who cares?”. Finding petitioner guilty of gross
insubordination, Cityland served a notice of dismissal upon him. Petitioner then filed a complaint for illegal dismissal,
illegal deduction, underpayment, overtime and rest day pay which the LA dismissed for lack of merit which affirmed
by the NLRC.

Issue:

Whether the NLRC erred in ruling that petitioner is not entitled to salary differentials, backwages, separation pay,
overtime pay, rest day pay, unpaid commissions, moral and exemplary damages and attorney’s fees.

Ruling:

Petitioner anchors his claim for illegal deductions of commissions on Cityland’s formula of determining commissions.

COMMISSIONS = Credits Earned (CE) less CUMULATIVE NEGATIVE (CN) less AMOUNTS RECEIVED (AR) = (CE-CN) – AR
where CE = Monthly Sales Volume x Commission Rate (CR)

AR = Monthly Compensation/.75

CR = 4.5%

Under said formula, an increase in salary would entail an increase in AR, thus diminishing the amount of commissions
that petitioner would receive. Petitioner construes the same as violative of the non-diminution of benefits clause
embodied in the wage orders applicable to petitioner. HE further claims that because of such formula, he is indebted
to the company. While it is true that an increase in salary would cause an increase in AR, with the same being
deducted from credits earned, thus lessening his commission, the fact remains that petitioner still receives his basic
salary remains the same and he continues to receive the same, regardless of his collections. The purpose of the same
is to encourage sales personnel to accelerate their sales in order for them to earn commissions. Additionally, there
is no law which requires employers to pay commissions, and when they do so, as stated in the DOLE letter opinion,
“there is no law which prescribes a method for computing commissions. The determination of the amount of
commissions is the result of collective bargaining negotiations, individual employment contracts or established
employer practice. Since the formula for computation of commissions was presented to and accepted by petitioner,
such formula is in order.

With respect to petitioner’s claims with overtime pay, rest day pay and holiday premiums, Cityland maintains that
Saturday and Sunday call-ins were voluntary activities on the part of sales personnel who wanted more sales and
earn more commissions. It is their contention that sales personnel were clamoring for the privilege to attend
Saturday and Sunday call-ins as well as to entertain clients at project sites during weekends, that Cityland has to
stagger the schedule of sales employees to give everyone a chance to do so. If there is really a clamor, how come no
call ins or walk-ins were scheduled on some weekends?

The LA and NLRC also sanctioned respondent’s practice of offsetting rest day or holiday work with equivalent time
on regular workdays on the ground that the same is authorized by D.O 21, s. 1990. As correctly pointed out by
petitioner, said D.O was misapplied in this case. The D.O involves the shortening of the work week from 6 days to 5
days but with prolonged hours on those five days. Under this scheme non-payment of overtime premiums was
allowed in exchange for longer weekends for employees. In the instant case, he claims payment for work over and
above his normal 5 1/2 days of work in a week. Applying by analogy the principle that overtime cannot be offset by
undertime, to allow off-setting would prejudice the worker. He would be deprived of the additional pay for the rest
day work he has rendered and which utilized to offset his equivalent time off on regular weekdays. To allow Cityland
to do so would be to circumvent the law on payment of premiums for rest day and holiday work.

However, in the case at bar, petitioner failed to show his entitlement to overtime and rest day pay due to the lack
of sufficient evidence as to the number of days and hours he rendered overtime and rest day work. Entitlement to
overtime pay must first be established by proof that said overtime proof was actually performed, before an
employee may afford said benefit.

Petitioner’s dismissal was for a just and valid cause thus petition is dismissed.

PHILIPPINE AIRLINES INC. v. NLRC

Facts:

Private respondent, Dr. Fabros was a flight surgeon at PAL MEDICAL Clinic and was on duty from 4 pm to 12 am. On
Feb 17, 1997, at around 7 pm, Dr. Fabros left the clinic to eat in his residence. A few minutes later, he received a call
that of the employees of PAL cargos services suffered a heart attack. When Dr. Fabros, arrived at the clinic, such
employee was already in the hospital and died the following day.

Dr. Fabros in his explanation, asked by the Chief Flight Surgeon asserted that he was entitled to 30-minute meal
break, tat he immediately left his residence upon being informed that there was an emergency and he arrived at the
clinic a few minutes later.

Finding his explanation unacceptable, Dr, Fabros was charged with abandonment of post while on duty and was
given 10 days to answer the charge. He reiterated said assertions and denied that he abandoned his post. That he
only left the clinic to have a meal at home and returned at 7:51 pm upon being informed of such emergency.

After evaluating the charge and his answer, petitioner suspended Dr. Fabros for 3 months. Respondent then filed a
complaint for illegal suspension against petitioner. The LA declared that the suspension was illegal and ordered
petitioner to pay respondent the amount equivalent to all the benefits he should have received during suspension
plus P500,000 moral damages. The NLRC affirmed said decision.
Issue:

Whether suspension is valid due to respondent’s abandonment of his post.

Ruling:

No. The facts do not support petitioner’s allegation that private respondent abandoned his post on the evening of
Feb 17. Private respondent left the clinic that night only top have his dinner at his house, which was only a few
minutes’ drive away from the clinic. His whereabouts were known to the nurse on duty so that he could be easily
reached in case of emergency. Upon being informed of the employee’s condition, respondent immediately left his
home and returned to the clinic. These facts belie petitioner’s claim of abandonment.

Petitioner’s argue that being a full-time employee, private respondent is obliged to stay in the company premises
for not less than 8 hours. Hence, he may not leave the company premises during such time, even to take his meals.

The Court is not impressed.

Art. 83 and 85 of the Labor Code read:

Art. 83: Normal hours of work. – normal hours of work of any employee shall not exceed 8 hours a day x x x.

Art. 85. Meal periods – subject to such regulations as the Sec of Labor may prescribe, it shall be the duty of employer
to give his employees not less than 60 minutes time-off for their regular meals.

Sec. 7, Rule I, Book III of the Omnibus Rules Implementing the Labor Code also provides for meal and rest periods.

Thus, the 8 work period does not include the meal break. Nowhere in the law may it be inferred that employees
must take their meals within the company premises. Employees are not prohibited from going out of the premises
as long as they return to their posts on time. Respondent’s act, therefore, of going home to take dinner does not
constitute abandonment.

Decision is partially granted. Moral damages is deleted since there is no showing that such act of petitioner company
is ill-motivated.