Labor Law I Case Digest

Declaration of Basic Principles

Sta. Ana v. Manila Jockey Club, Inc.
G.R. No. 208459, February 15, 2017

FACTS:

Julieta Sta. Ana was hired by MJCI as outlet teller of its off-track betting (OTB) station in Tayuman,
Manila. It was found out by MJCI that its treasury department has been illegally appropriating funds and
lending it out to the employees of the latter corporation. The Special Disciplinary Committee of MJCI found Sta.
Ana conducting her lending business during office hours and using the funds and personnel of MJCI; thus, she
was found guilty of dishonesty and other fraudulent acts by the said committee.

On her defense, she alleged that she started her lending business 15 years ago prior to the takeover of
the new management of MJCI and she sold her fishing vessels 2 years ago to finance her lending business.
She also averred that she had been in the service for 31 years prior to her dismissal. She stressed that she
had bank deposits, real properties and fishing business to fund her lending business. The fact that she lent
money to her co-employees is not a proof that she used MJCI’s funds for her busines. She stated that her one-
time request for Tejada to accommodate a company personnel of the company is not evidence of any
complicity with Tejada. She also should not be dragged in the controversy because she was a “kumare” of
Tejada.

She was eventually terminated by MJCI. Consequently, she filed a complaint for illegal dismissal. Sta.
Ana was dismissed for willful breach of trust and confidence.

The Labor Arbiter declared that Sta. Ana conspired with other tellers resulting to unlawful taking of
MJCI’s funds, and that the money was used in her lending business that the petition was dismissed. The NLRC
affirmed the decision of the Labor Arbiter and the CA affirmed NLRC. This pushed Sta. Ana to file for a Review
on Certiorari claiming that CA had committed grave abuse of discretion amounting to lack or excess of
jurisdiction.

ISSUE:

Whether or not Sta. Ana was validly dismissed on the ground of loss of trust and confidence.

RULING:

No. She was not validly dismissed. The Court ruled that it is a cardinal rule that loss of trust and
confidence should be genuine and not simulated. The respondent failed to prove that Sta. Ana committed
willful breach of its trust. It also failed to establish that Sta. Ana used its employee for her personal business
during office hours and even used its money without authority to do so moreover to lend it to another.

The Supreme Court enumerated the elements to legally dismiss an employee on the ground of loss and
trust, to wit:

“The employer must establish that:

a) the employee occupied a position of trust and confidence, or has been routinely charged with the
care and custody of the employer’s money or property;

b) the employee committed a willful breach of trust based on clearly established facts; and

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c) such loss of trust relates to the employee’s performance of duties.”

In the case at bar, only the first element was proven by MCJI. The SC ruled that nowhere in the
evidence presented by MJCI that Sta. Ana utilized the funds of the corporation for her lending business. Also,
Sta. Ana was able to present documents to show her capability to engage in loan operations.

Petition Granted.

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 Labor Law I Case Digest

Lagahit v. Pacific Concord Container Lines

G.R. No. 177680, January 13, 2016

FACTS:
Pacific Concord Container Lines (Pacific Concord) which is a domestic corporation engaged in cargo
forwarding, hired the Jennifer Lagahit as an Account Executive/Marketing Assistant. She was then promoted
as a sales manager. On November 8, 2002, she reported for work at 9:00 a.m. and left the company premises
at around 10:30 a.m. to make client calls. At 1:14 p.m. of that day, she received the following text message
from respondent Monette Cuenca saying that “today you are officially not connected with us.” Cuenca also sent
a message to petitioner’s husband.
The petitioner immediately tried to contact Cuenca, but the latter refused to take her calls. On the same
day, the petitioner learned from clients and friends that the respondents had disseminated notices, flyers and
memos informing all clients of Pacific Concord that she was no longer connected with the company as of
November 8, 2002. Pacific Concord also caused the publication of the notice to the public in the Sunstar Daily
issue.
On November 13, 2002, the petitioner sent a letter to Pacific Concord contending that she was deprived
of the due process that would have given her the chance to formally present her side. Despite this, she had
accepted her fate and asked Cuenca to arrange and expedite settlement of all benefits due to her under the
law.
On November 26, 2002, the petitioner filed her complaint for constructive dismissal in the Regional
Arbitration Branch of the National Labor Relations Commission (NLRC) in'Cebu City.
In their position paper, the respondents denied having terminated the petitioner despite the fact that there were
valid grounds to do so. They insisted that the petitioner had betrayed the trust and confidence reposed in her
when she:
(a) used the company-issued vehicle for her own personal interest;
(b) failed to achieve her sales quota, and to enhance and develop the Sales Department;
(c) enticed her marketing assistant, Jo Ann Otrera, to resign and join her in transferring to another forwarding
company;
(d) applied for other employment during office hours and using company resources;
(e) solicited and offered the services of Seajet International, Inc. during her employment with Pacific Concord;
(f) received a personal commission from Wesport Line, Inc. for container shipments; and
(g) illegally manipulated and diverted several containers to Seajet International.

Ruling of the Labor Arbiter

The Labor Arbiter rendered a decision declaring that Pacific Concord were not able to prove that
Lagahit had committed acts constituting betrayal of trust; that they had not informed her prior to her dismissal
of the offenses she had supposedly committed; and that owing to the illegality of the dismissal, they were liable
for backwages and separation pay.

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 Labor Law I Case Digest
Ruling of the NLRC
The NLRC affirmed the ruling of the Labor Arbiter finding that the respondents are guilty of illegally
dismissing the complainant from her employment..

Decision of the CA
The CA granted respondents' petition for certiorari, and annulled the decision of the NLRC. It
pronounced that there were sufficient justifications to terminate the petitioner's services for disloyalty and willful
breach of trust.

ISSUE:

I. Whether or not Lagahit resigned from her employment

II. Whether or not Lagahit breached her employer’s trust

RULING:
I. Lagahit did not resign from her employment.
A valid resignation is the voluntary act of an employee who finds herself in a situation where she
believes that personal reasons cannot be sacrificed in favor of the exigency of the service and that she has no
other choice but to disassociate herself from employment. The resignation must be unconditional and with a
clear intention to relinquish the position.
The facts and circumstances before and after the petitioner's severance from her employment on
November 8, 2002 did not show her resolute intention to relinquish her job. Indeed, it would be unfounded to
infer the intention to relinquish from her November 13, 2002 letter, which, to us, was not a resignation letter
due to the absence therefrom of anything evincing her desire to sever the employer-employee relationship.
The letter instead presented her as a defenseless employee unjustly terminated for unknown reasons who had
been made the subject of notices and flyers informing the public of her unexpected termination. It also depicted
her as an employee meekly accepting her unexpected fate and requesting the payment of her backwages and
accrued benefits just to be done with the employer.

For sure, to conclude that the petitioner resigned because of her letter of November 13, 2002 is absurd
in light of the respondents having insisted that she had been terminated from her employment earlier on
November 8, 2002. In that regard, every resignation presupposes the existence of the employer-employee
relationship; hence, there can be no valid resignation after the fact of termination of the employment simply
because the employee had no employer-employee relationship to relinquish.

II. Lagahit did not breach her employer's trust; her dismissal was, therefore, illegal.

Article 282(c) of the Labor Code authorizes an employer to dismiss an employee for committing fraud,
or for willful breach of the trust reposed by the employer. However, loss of confidence is never intended to
provide the employer with a blank check for terminating its employee.
For this to be a valid ground for the termination of the employee, the employer must establish that:
(1) the employee must be holding a position of trust and confidence; and
(2) the act complained against would justify the loss of trust and confidence.
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There are two classes of employees vested with trust and confidence:
To the first class belong the managerial employees or those vested with the powers or prerogatives to
lay down management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline
employees or effectively recommend such managerial actions.
The second class includes those who in the normal and routine exercise of their functions regularly
handle significant amounts of money or property. Cashiers, auditors, and property custodians are some of the
employees in the second class.
Petitioner's position as sales manager did not immediately make the petitioner a managerial employee.
The actual work that she performed, not her job title, determined whether she was a managerial employee
vested with trust and confidence. Her employment as sales manager was directly related with the sales of
cargo forwarding services of Pacific Concord, and had nothing to do with the implementation of the
management's rules and policies. As such, the position of sales manager came under the second class of
employees vested with trust and confidence. Therein was the flaw in the CA's assailed decision. Although the
mere existence of the basis for believing that the managerial employee breached the trust reposed by the
employer would normally suffice to justify a dismissal, we should desist from applying this norm against the
petitioner who was not a managerial employee.
The affidavits did not show how she had betrayed her employer's trust. Specifically, the affidavit of
Russell B. Noel only stated that she and her husband Roy had met over lunch with Garcia Imports and a
certain Wilbur of Sea-Jet International Forwarder in the first week of November 2002. To conclude that such
lunch caused Pacific Concord to lose its trust in the petitioner would be arbitrary.
Considering that the petitioner's duties related to the sales of forwarding services offered by Pacific
Concord, her calling other forwarding companies to inquire for vacant positions did not breach the trust
reposed in her as sales manager. Such act, being at worst a simple act of indiscretion, did not constitute the
betrayal of trust that merited the extreme penalty of dismissal from employment. We remind that dismissal is a
penalty of last resort, to be meted only after having appreciated and evaluated all the relevant circumstances
with the goal of ensuring that the ground for dismissal was not only serious but true.
Doctrines Involved:
Every resignation presupposes the existence of the employer-employee relationship; hence, there can be no
valid resignation after the fact of termination of the employment simply because the employee had no
employer-employee relationship to relinquish.
There are two classes of employees vested with trust and confidence. To the first class belong the managerial
employees or those vested with the powers or prerogatives to lay down management policies and to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees or effectively recommend such
managerial actions. The second class includes those who in the normal and routine exercise of their functions
regularly handle significant amounts of money or property.

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 Labor Law I Case Digest
Management Prerogatives
St. Luke’s Medical Center Inc. v. Maria Theresa Sanchez
G.R. No. 212054, March 11, 2015

FACTS:
On June 29, 2009, Sanchez was hired by petitioner St. Luke's Medical Center, Inc. (SLMC) as a Staff
Nurse, and was eventually assigned at SLMC, Quezon City's Pediatric Unit until her termination on July 6,
2011 for her purported violation of SLMC's Code of Discipline particularly Section 1, Rule 1 on Acts of
Dishonesty, i.e., Robbery, Theft, Pilferage, and Misappropriation of Funds.
She was directed to write an Incident Report explaining why she had the questioned items in her
possession. She complied with the directive and also submitted an undated handwritten letter of apology.
Highlighting that Sanchez expressly admitted that she intentionally brought out the questioned items. SLMC,
on July 4, 2011, informed Sanchez of its decision to terminate her employment effective closing hours of July
6, 2011. This prompted her to file a complaint for illegal dismissal before the NLRC.
In a Decision dated May 27, 2012, the Labor Arbiter (LA) ruled that Sanchez was validly dismissed;
NLRC reversed and set aside the LA ruling and concluded that the punishment of dismissal was too
harsh and the one (1) month preventive suspension already imposed on and served by Sanchez was the
appropriate penalty. Accordingly, the NLRC ordered her reinstatement, and the payment of back wages, other
benefits, and attorney's fees.
CA upheld the NLRC, ruling that the latter did not gravely abuse its discretion in finding that Sanchez
was illegally dismissed.
ISSUE:
Whether or not respondent Sanchez was illegally dismissed by SLMC.
RULING:
No. The dismissal of Sanchez was for a just cause.
Management Prerogatives
The right of an employer to regulate all aspects of employment, aptly called "management
prerogative," gives employers the freedom to regulate, according to their discretion and best judgment, all
aspects of employment, including work assignment, working methods, processes to be followed, working
regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall
of workers. In this light, courts often decline to interfere in legitimate business decisions of employers
In fact, labor laws discourage interference in employers' judgment concerning the conduct of their
business. Significantly, records show that Sanchez made a categorical admission in her handwritten letter, that
despite her knowledge of its express prohibition under the SLMC Code of Discipline, she still knowingly
brought out the subject medical items with her. While there were previous incidents of "hoarding," it appears
that such acts were in similar fashion furtively made and the items secretly kept, as any excess items found in
the concerned nurse's possession would have to be confiscated. Hence, the fact that no one was caught
and/or sanctioned for transgressing the prohibition therefor does not mean that the so-called "hoarding"
practice was tolerated by SLMC.

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Manila Memorial Park Cemetery v. Lluz
G.R No. 208451, February 3, 2016

FACTS:
Petitioner Manila Memorial Park Cemetery, Inc. (Manila Memorial) entered into a Contract of Services
with respondent Ward Trading and Services (Ward Trading). The Contract of Services provided that Ward
Trading, as an independent contractor, will render interment and exhumation services and other related work
to Manila Memorial in order to supplement operations at Manila Memorial Park, Paranaque City.
Among those assigned by Ward Trading to perform services at the Manila Memorial Park were
respondents Ezard Lluz, Norman Corral, Erwm Fugaban, Valdimar Balisi, Emilio Fabon, John Mark Aplicador,
Michael Curioso, Junlin Espares, and Gavino Farinas (respondents).
Respondents alleged that soon after the management declined their request for regularization and to
be recognized as legitimate members of the existing labor union,the latter dismissed them. Hence, this case for
illegal dismissal.
By way of defense, Manila Memorial argued that there was no employer-employee relationship
between the company and respondents. Instead, It argued that respondents were the employees of Ward
Trading.
The Labor arbiter ruled in favor of Manila Memorial for the respondents herein failed to prove the
existence of Er-Ee relationship. However, the NLRC reversed the decision of the LA ruling that Ward Trading
was a labor-only contractor and such CA affirmed NLRC for having found Er-Ee relationship. Hence, the
appeal.
 
ISSUE:
Whether or not an employer-employee relationship exists between Manila Memorial and respondents
for the latter to be entitled to their claim for wages and other benefits.

RULING:
Yes. Contracting arrangements for the performance of specific jobs or services under the law and its
implementing rules are allowed. However, contracting must be made to a legitimate and independent job
contractor since labor rules expressly prohibit labor-only contracting.
Labor-only contracting exists when the contractor or subcontractor merely recruits, supplies or places
workers to perform a job, work or service for a principal and any of the following elements are present:
1) The contractor or subcontractor does not have substantial capital or investment which relates to the job,
work or service to be performed and the employees recruited, supplied or placed by such contractor or
subcontractor are performing activities which are directly related to the main business of the principal; or
2) The contractor does not exercise the right to control the performance of the work of the contractual
employee.
In the present case, The Contract of Services proved the existence of labor-only contracting between
Manila Memorial and Ward Trading. The Contract of Services provided that Ward Trading, as an independent
contractor, will render interment and exhumation services and other related work to Manila Memorial. However,
a closer reading of the Contract of Services reveals that Ward Trading does not have substantial capital or
investment in the form of tools, equipment, machinery, work premises and other materials since it is Manila
Memorial which owns the equipment used in the performance of work needed for interment and exhumation
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services. Furthermore, although Ward shall be in charge of the supervision over individual respondents, the
exercise of its supervisory function is heavily dependent upon the needs of petitioner Memorial Park. The
contract further provides that petitioner has the option to take over the functions of Ward's personnel if it finds
any part or aspect of the work or service provided to be unsatisfactory
 
Manila Memorial failed to adduce evidence to prove that Ward Trading had any substantial capital,
investment or assets to perform the work contracted for. Thus, the presumption that Ward Trading is a labor-
only contractor stands. Consequently, Manila Memorial is deemed the employer of respondents.

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Star Paper Corporation v. Simbol
G.R. No. 164774, April 12, 2006

FACTS:
Star Paper Corporation employed Ronaldo Simbol on Oct 1993. He met Alma Dayrit, also an employee
of the company, whom he married. Before marriage, Josephine Ongsitco, the manager advised the couple that
one of them must resign if they decided to get married pursuant to a company policy to which Simbol complied.
On February 5, 1997 Comia was hired by the company. She met Howard Comia, a co-employee, whom she
married on June1, 2000. Ongsitco likewise reminded them the company policy, Comia resigned on June 30,
2000. Estrella was also 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 December21, 1999.
Labor Arbiter dismissed the complaint and states that the company policy was decreed pursuant to
what the respondent corporation perceived as management prerogative. On appeal to the NLRC, the
Commission affirmed the decision of the Labor Arbiter. In its assailed Decision dated August 3, 2004, the Court
of Appeals reversed the NLRC decision.

ISSUE:
Whether or not the questioned policy violates the rights of the employee under the Constitution and the
Labor Code?
RULING:
Yes.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 e
mployer to require as a condition of employment or continuation of employment that a woman employee shall n
ot get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deeme
d resigned or separated , or to actually dismiss, discharge , discriminate or otherwise prejudice a woman empl
oyee merely by reason of her marriage.” The company policy of Star Paper, to be upheld, must clearly establis
h the requirement of reasonableness. In the case at bar, there was no reasonable business necessity. Petition
ers failed to show how the marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an emp
loyee 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 im
pact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminat
ory, albeit disproportionate, effect. Lastly, the absence of a statute expressly prohibiting marital discrimination 
in our jurisdiction cannot benefit the petitioners.

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 Labor Law I Case Digest
Borja, et. al. v. Minoza
G.R. No. 202275, July 17, 2018

FACTS:
Respondents were employed as cooks of Dong Juan, a restaurant owned and operated by petitioners
John L. Borja (John) and Aubrey L. Borja (Aubrey; collectively, petitioners) located in Cebu City. Miñoza and
Bandalan were respectively hired on September 23, 2009 and September 14, 2010.[7]
Respondents alleged that on April 1, 2011, a Friday, Miñoza was absent from work. Because the
company implements a "double-absent" policy, which considers an employee absent for two (2) days without
pay if he/she incurs an absence on a Friday, Saturday, or Sunday, the busiest days for the restaurant, he
chose not to report for work the next day, or on April 2, 2011.[8]
On the other hand, Bandalan reported for work on April 2, 2011, a Saturday, but was later advised by
John to go home and take a rest, with which he complied. Bandalan discovered thereafter that John was angry
at him for having drinking sessions after work on April 1, 2011. Because of the "double-absent" policy,
Bandalan purposely absented himself from work on April 3, 2011.[9]
On April 3, 2011, at around ten o'clock in the morning, the company called a meeting of its employees,
including respondents. When asked about his absence on April 1, 2011, Miñoza explained that he had an
argument with his wife, who had been demanding for his payslips. As for Bandalan, who managed to be
present at the meeting despite his intention to be absent from work, he answered that it would be pointless to
report for work that day, as he would not be paid anyway, considering that he was not allowed to work the day
before.[10]
The following day, or on April 4, 2011, petitioners summoned respondents once again. Angrily, John
accused respondents of planning to extort money from the company and told them that if they no longer wish
to work, they should resign. He then gave them blank sheets of paper and pens and ordered them to write their
own resignation letters. Respondents replied that they will decide the next day.[11]
On April 5, 2011, the day after, respondents alleged that they reported for work but were barred from
entering the restaurant. Instead, petitioners brought them to another restaurant where they were forced to
receive separate memoranda asking them to justify their unexplained absences. Thereat, a certain "Mark" was
present, who appeared to respondents as an intimidating and ominous person.[12]
When respondents reported for work on April 6, 2011, they were purportedly refused entry once more.
At closing time that day, respondents were invited to go inside the restaurant and were subjected to an on-the-
spot drug test, the results of which yielded negative. To his humiliation, Bandalan had to undergo a second
test, which also came out negative.[13]
Thereafter, when Bandalan went outside to buy food, he saw "Mark" and a group of unfamiliar people
standing in a dark area near the restaurant. Later, when he and Miñoza were on their way home, they heard
some people, presumably "Mark" and his hired goons, shouting at them, "[y]ou fools, do not come back here
as something bad will happen to you."[14]
Out of fear, respondents no longer reported for work the following day, April 7, 2011, and instead, filed
a complaint[15] for illegal dismissal, with claim for monetary benefits, against petitioners, docketed as RAB-VII-
05-0827-2011.[16]
In defense, petitioners explained that the "double-absent" policy was actually proposed by respondents
themselves, in reaction to the absences incurred by one of their co-employees, Josephus Sablada (Sablada),
who failed to report for work on two (2) busy weekends. On March 14, 2011, after explaining the "double-
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absent" policy to the restaurant employees, who were all amenable thereto, petitioners enforced the said
policy.[17]
Petitioners likewise claimed that from April 1 to 3, 2011, Miñoza failed to report for work. Thus, in a
memorandum[18] dated April 4, 2011, Aubrey sought an explanation for his absences. Miñoza justified his
absence on April 1 by explaining that he had a quarrel with his wife. The following day, he opted not to report
for work anymore on account of the "double-absent" policy. On April 3, he claimed that he was allowed to skip
work.[19]
As for Bandalan, petitioners averred that he was absent on April 3, 2011, a Sunday, and when
required[20] to explain, he clarified that he opted not to report for work anymore because he will no longer
receive any salary for that day on account of the "double-absent" policy, having been absent on March 25,
2011 and asked to go home on April 2, 2011.[21]
On April 4, 2011, when respondents were summoned for a meeting, they expressed their intention to
resign. However, the following day, they arrived at the restaurant and insisted that they wanted to work. To
maintain order in the restaurant and to keep the other employees from being harassed, petitioners called on a
certain Mark Opura (Opura) to stay in the restaurant and keep watch.[22]
Petitioners further claimed that respondents worked undertime on April 5, 2011. Then, Miñoza stopped
reporting for work on April 7, 2011, while Bandalan ceased working on April 8, 2011.[23] Thus, Aubrey sent
separate memoranda[24] to respondents on April 18, 2011 requiring them to explain their absence without
official leave (AWOL), which they both failed to do. Subsequently, they were dismissed from employment.[25]
The Labor Arbiter's Ruling
In a Decision[26] dated September 7, 2011, the Labor Arbiter (LA) found respondents to have been
illegally and constructively dismissed and ordered petitioners to pay them the total amount of P169,077.20,[27]
inclusive of backwages, separation pay, 13th month pay, service incentive leave pay, moral and exemplary
damages, and attorney's fees.[28]
Giving more credence to respondents' version of the facts, the LA found that Miñoza and Bandalan
were placed in a difficult situation and left with no choice but to leave their employment on April 7 and 8, 2011,
respectively.[29] Respondents were brought to another restaurant on April 5, 2011 merely for the purpose of
handing to them the memoranda despite evidence showing that they reported for work at the restaurant on
said day. Thereat, they first encountered Opura, who they claimed was a dubious and intimidating person.
Likewise, respondents were singled out to undergo an on-the-spot drug test, which yielded negative results.
Respondents also decided to forego their employment when they were threatened by Opura's group.[30] As
such, the LA found that respondents were able to establish the existence of threats to their security and safety,
which were the bases for the finding of constructive dismissal.[31]
Furthermore, the LA rejected the assertion that respondents went on AWOL beginning April 7, 2011 for
Miñoza and April 8, 2011 for Bandalan, considering that they already filed the instant complaint on April 7,
2011. As such, the memoranda dated April 18, 2011, which required them to justifY their unexplained
absences was a mere afterthought.[32]
Having been constructively dismissed, respondents are entitled to reinstatement to their former
positions with backwages from April 7, 2011. However, as reinstatement is no longer feasible, the LA instead
awarded separation pay equivalent to one month pay for every year of service with a fraction of at least six (6)
months service to be credited as a full year service.[33]
Likewise, the LA awarded 13th month pay and service incentive leave pay to which respondents were
entitled but were not paid. It also awarded moral and exemplary damages on the ground that petitioners
created a hostile work environment that was detrimental to respondents' security of tenure, as well as

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attorney's fees, since respondents were compelled to engage the services of counsel to protect their rights.[34]
As to the other monetary claims sought by respondents, the same were dismissed for lack of basis.[35]

Dissatisfied, petitioners appealed[36] to the NLRC, docketed as NLRC Case No. VAC-12-000893-2011.

The NLRC's Ruling

In a Decision[37] dated March 30, 2012, the NLRC reversed and set aside the LA's Decision and entered a
new one finding neither constructive dismissal nor abandonment in this case.[38] Accordingly, it directed
petitioners to pay: (a) Miñoza the amounts of P14,820.00 as separation pay, P10,983.05 as 13th month pay,
and P2,194.50 as service incentive leave pay; and (b) Bandalan the amounts of P7,410.00 as separation pay,
and P4,199.00 as 13th month pay.[39]

The NLRC found that respondents were not constructively dismissed on the basis of the following
circumstances: first, there was nothing wrong or irregular for an employer to hold meetings with its employees
if only to monitor their performance or allow them an avenue to air their grievances; second, there was likewise
nothing wrong if an employer issues memoranda to its employees, as a means of exercising control over them;
and third, similarly, the conduct of a drug test is within the prerogative of the employer in order to ensure that
its employees are fit to remain in its employ. The NLRC stressed that petitioners also have a business interest
to protect and recognized that employers have free rein to regulate all aspects of employment including the
prerogative to instill discipline and to impose penalties on errant employees.[40]

As regards respondents' allegations that they were threatened, intimidated, and barred entry into the
restaurant, the NLRC rejected them for lack of substantiation.[41] The presence of Opura was a preventive
measure that the NLRC found justified to avert possible harassment in the work premises which cannot be
construed as a means to specifically threaten or intimidate respondents. The NLRC noted the evidence[42]
presented by petitioners that Bandalan had previously burned and threatened a co employee; hence,
petitioners cannot be blamed for wanting to ensure a safe and orderly work place. Thus, the NLRC concluded
that Opura's presence did not create a hostile work environment for respondents; neither was it proven that
they hurled threats against respondents, having been rebutted by evidence presented by petitioners.[43]
Perforce, no constructive dismissal transpired in this case.

However, the NLRC held that respondents did not go on AWOL beginning April 7, 2011. Citing jurisprudence,
the NLRC ruled that a charge of abandonment is inconsistent with the filing of a complaint for constructive
dismissal. Moreover, respondents' prayer for reinstatement belies petitioners' claim of abandonment.[44]

Considering that neither constructive dismissal nor abandonment existed in this case, the NLRC held that
reinstatement is in order. However, under the doctrine of strained relations, separation pay may be awarded in
lieu of reinstatement, as in this case.[45]

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Finally, finding the absence of constructive dismissal, the NLRC deleted the award of moral and exemplary
damages and attorney's fees. However, it affirmed the awards for 13th month pay for both respondents and
service incentive leave pay for Miñoza alone.[46]
Respondents moved for reconsideration,[47] which the NLRC denied in a Resolution[48] dated June
29, 2012; hence, the recourse to the CA via petition for certiorari,[49] docketed as CA-G.R. SP No. 07103.
The CA's Ruling
Contrary to the NLRC's findings, the CA held that petitioners made employment unbearable for respondents on
account of the following circumstances: first, petitioners formulated and implemented a "double-absent" policy,
which is offensive to sound labor-related management prerogative and actually deters employees from
reporting to work;[52] second, respondents did not resign or go on AWOL - instead, they reported for work,
showing their intention to keep their employment;[53] and finally, the hiring of Opura caused a hostile and
antagonistic environment for respondents.[54]
Petitioners' motion for reconsideration[55] was denied in a Resolution[56] dated May 13, 2015; hence, this
petition.
ISSUE:
Whether or not the CA erred in setting aside the NLRC's issuances and reinstating the LA's Decision,
which found respondents to have been constructively dismissed.
RULING:
The petition has merit.
Well-settled is the rule in this jurisdiction that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court, this Court being bound by the findings of fact made by the
appellate court.[57] The Court's jurisdiction is limited to reviewing errors of law that may have been committed
by the lower court.[58] The rule, however, is not without exception. In New City Builders, Inc. v. NLRC,[59] the
Court recognized the following exceptions to the general rule, to wit: (1) when the findings are grounded
entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd
or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings the CA
went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9) when the facts set forth in the petition, as well as in
the petitioner's main and reply briefs, are not disputed by the respondent; (10) when the findings of fact are
premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when
the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered,
would justify a different conclusion.[60]
The exception, rather than the general rule, applies in the present case. When the findings of fact of the
CA are contrary to those of the NLRC, which findings also differ from those of the LA, the Court retains its
authority to pass upon the evidence and, perforce, make its own factual findings based thereon.[61]
In this case, the CA, concurring with the LA, found that respondents were constructively dismissed. The
Court is not convinced.
Constructive dismissal exists when an act of clear discrimination, insensibility, or disdain on
the part of the employer has become so unbearable as to leave an employee with no choice but to
forego continued employment, or when there is cessation of work because continued employment is
rendered impossible, unreasonable, or unlikely, as an offer involving a demotion in rank and a

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 Labor Law I Case Digest
diminution in pay. The test of constructive dismissal is whether a reasonable person in the employee's
position would have felt compelled to give up his job under the circumstances.
In this case, records show that respondents wasted no time in filing a complaint against petitioners to
protest their purported illegal dismissal from employment. As the filing thereof belies petitioners' charge of
abandonment, the only logical conclusion, therefore, is that respondents had no such intention to abandon
their work.
Therefore, since respondents were not dismissed and that they were not considered to have
abandoned their jobs, it is only proper for them to report back to work and for petitioners to reinstate them to
their former positions or substantially-equivalent positions. In this regard, jurisprudence provides that in
instances where there was neither dismissal by the employer nor abandonment by the employee, the proper
remedy is to reinstate the employee to his former position, but without the award of backwages.[67] However,
since reinstatement was already impossible due to strained relations between the parties, as found by the
NLRC, each of them must bear their own loss, so as to place them on equal footing. At this point, it is well to
emphasize that "in a case where the employee's failure to work was occasioned neither by his abandonment
nor by a termination, the burden of economic loss is not rightfully shifted to the employer; each party must bear
his own loss."[68]
In sum, the NLRC ruling holding that respondents were not constructively dismissed and that they did
not abandon their jobs must be reinstated.

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 Labor Law I Case Digest
The Provincial Buses Operators Association of the Philippines v. DOLE
G.R. No. 21222003, February 28, 2018

FACTS:

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 Labor Law I Case Digest
Philippine Span Asia Carriers Corporation v. Heidi Pelayo
G.R. No. 212003, February 28, 2018

FACTS:

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 Labor Law I Case Digest
Jenny F. Peckson v. Robinsons Supermarket Corp. et, al.
G.R. No. 198534, July 3, 2013

FACTS:
The petitioner was hired by the Robinsons Supermarket Corporation (RSC) as a Sales Clerk on
November 3, 1987. On October 26, 2006, she was holding the position of Category Buyer when respondent
Roena Sarte (Sarte), RSCs Assistant Vice-President for Merchandising, reassigned her to the position of
Provincial Coordinator, effective November 1, 2006.
Peckson claims that her new assignment was a demotion because it was non-supervisory and clerical
in nature, so she refused to turn over her responsibilities to the new Category Buyer, or to accept her new
responsibilities as Provincial Coordinator.
Sarte demanded an explanation from petitioner for her refusal to accept her new assignment despite
written and verbal demands. Petitioner ignored the demand. Sarte issued another memorandum reiterating her
demand and warning her that this could be her final chance to present her side or be deemed to have waived
her right to be heard. Petitioner then replied stating that she could not accept the position of Provincial
Coordinator since she saw it as a demotion. Sarte issued an instruction to petitioner in preparation for the
Christmas holidays but the petitioner refused to heed.
The LA ruled that job reassignment or classification is a strict prerogative of the employer, and that the
petitioner cannot refuse her transfer since both positions commanded the same salary structure. The LA also
ruled that petitioners persistent refusal to accept her new position amounted to insubordination, entitling RSC
to dismiss her from employment.
A month later, petitioner tendered her written forced resignation. The NLRC sustained the findings of
the LA. The CA sustained the findings of the NLRC.
ISSUE:
Whether or not the lateral transfer was a demotion amounting to constructive dismissal.
RULING:
No. Under the doctrine of management prerogative, every employer has the inherent right to regulate,
according to his own discretion and judgment, all aspects of employment, including hiring, work assignments,
working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of
workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this
prerogative are those imposed by labor laws and the principles of equity and substantial justice.
Concerning the transfer of employees, these are the following jurisprudential guidelines:
(a) a transfer is a movement from one position to another of equivalent rank, level or salary
without break in the service or a lateral movement from one position to another of equivalent rank or
salary;
(b) the employer has the inherent right to transfer or reassign an employee for legitimate
business purposes;
(c) a transfer becomes unlawful where it is motivated by discrimination or bad faith or is effected
as a form of punishment or is a demotion without sufficient cause;
(d) the employer must be able to show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee. (Rural Bank of Cantilan, Inc. v. Julve)
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 Labor Law I Case Digest
As a privilege inherent in the employers right to control and manage its enterprise effectively, its
freedom to conduct its business operations to achieve its purpose cannot be denied. We agree with the
appellate court that the respondents are justified in moving the petitioner to another equivalent position, which
presumably would be less affected by her habitual tardiness or inconsistent attendance than if she continued
as a Category Buyer, a frontline position in the day-to-day business operations of a supermarket such as
Robinsons.
When the transfer of an employee is not unreasonable, or inconvenient, or prejudicial to him, and it
does not involve a demotion in rank or a diminution of his salaries, benefits and other privileges, the employee
may not complain that it amounts to a constructive dismissal. Should the employer fail to overcome this burden
of proof, the employer’s transfer shall be tantamount to constructive dismissal
Constructive dismissal – an act if quitting because continued employment is rendered impossible,
unreasonable or unlikely; it is an offer involving a demotion in rank and diminution in pay; it also exists when an
act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee
leaving him no option but to forego with his continued employment.

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 Labor Law I Case Digest
Cheryll Santos Leus v. SSCW, et. al
G.R. No. 187226, January 28, 2015

FACTS:
In this case entitled Cheryll Leus vs St. Scholastica's College Westgrove, Cheryll Santos Leus was
hired by St. Scholastica’s College Westgrove (SSCW) as an Assistant to SSCW’s Director of the Lay
Apostolate and Community Outreach Directorate on May 2001. Sometime in 2003, the petitioner and her
boyfriend conceived a child out of wedlock. When SSCW learned of the petitioner’s pregnancy, Sr. Edna
Quiambao (Sr. Quiambao), SSCW’s Directress, advised her to file a resignation letter effective June 1, 2003.
In response, the petitioner informed Sr. Quiambao that she would not resign from her employment just
because she got pregnant without the benefit of marriage. 
On May 28, 2003, Sr. Quiambao formally directed the petitioner to explain in writing why she should not
be dismissed for engaging in pre-marital sexual relations and getting pregnant as a result thereof, which
amounts to serious misconduct and conduct unbecoming of an employee of a Catholic school.
Cheryll replied stating that her pregnancy outside of wedlock does not amount to serious misconduct.
She thereafter requested a copy of SSCW’s policy so that she can better respond to the charge against her.
SSCW did not a have these guidelines as the guidelines handbook was currently pending of its promulgation. It
instead stated that they follow the 1992 Manual of Regulations for Private School (1992 MRPS), specifically,
Sec.94, which cites “disgraceful or immoral conduct" as a ground for dismissal, in addition to the just causes
for termination of employment under Art.282, Labor Code.
The Labor Arbiter in Quezon City decided in favor of SSCW, stating that Cheryll being pregnant out of
wedlock is considered “disgraceful and immoral conduct” taking into account that she was employed in a
Catholic institution which expect its employees to live up to the Catholic values it teaches to the students.
The NLRC affirmed the decision of the Labor Arbiter. When it was appealed to the CA, it held that it is
the provisions of the 1992 MRPS and not the Labor Code that shall govern the termination of employment of
teaching and non-teaching personnel of private schools. CA upheld the NLRC’s affirmation of the LA’s
decision.
ISSUE:
Whether or not Cheryll’s pregnancy out of wedlock constitutes a valid ground to terminate her
employment.
RULING:
The Supreme Court held that Cheryll was illegally dismissed by her employer. Her pregnancy out of
wedlock does not constitute a valid ground to terminate her employment.

Disgraceful conduct is viewed in two ways, the “public and secular view” and “religious view”. Our laws
concern the first view. Disgraceful conduct per se will not amount to violation of the law – the conduct must
affect or poses a danger to the conditions of society, for example, the sanctity of marriage, right to privacy and
the like.
Public and secular morality should determine the prevailing norms of conduct, not religious morality.

The Court cited Estrada vs. Escritur in the said case, stating the following relevant explanation;
  
(1)   if the father of the child is himself unmarried, the woman is not ordinarily administratively liable for
disgraceful and immoral conduct. It may be a not-so-ideal situation and may cause complications for both

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 Labor Law I Case Digest
mother and child but it does not give cause for administrative sanction. There is no law which penalizes an
unmarried mother under those circumstances by reason of her sexual conduct or proscribes the consensual
sexual activity between two unmarried persons. Neither does the situation contravene any fundamental state
policy as expressed in the Constitution, a document that accommodates various belief systems irrespective of
dogmatic origins.

(2)     if the father of the child born out of wedlock is himself married to a woman other than the mother, then
there is a cause for administrative sanction against either the father or the mother.   In such a case, the
“disgraceful and immoral conduct” consists of having extramarital relations with a married person. The sanctity
of marriage is constitutionally recognized and likewise affirmed by our statutes as a special contract of
permanent union. Accordingly, judicial employees have been sanctioned for their dalliances with married
persons or for their own betrayals of the marital vow of fidelity. In this case, it was not disputed that, like
respondent, the father of her child was unmarried. Therefore, respondent cannot be held liable for disgraceful
and immoral conduct simply because she gave birth to the child Christian Jeon out of wedlock.

Cheryll’s pregnancy out of wedlock is not disgraceful or immoral conduct since she and the father of her
child have no impediment to marry each other. The Court ordered SSCW to reinstate Cheryll. But because this
is not possible anymore due to constrained relations with SSCW, the Court ordered the employer to pay
Cheryll separation pay, full backwages and attorney’s fees.

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 Labor Law I Case Digest
Sterling Paper Products Enterprises, Inc. v. KMM – Katipunan and Raymond Esponga
G.R. No. 221493, August 2, 2017

FACTS:
Esponga is a machine operator hired by Sterling Paper Products Enterprises, Inc. (Sterling). Esponga
was initially suspended for 20 days for allegedly participating in a wildcat strike. He was warned that repetition
of similar offense would render the management to terminate his service.
In June of 2006, Sterling’s supervisor Mercy Vinoya (Vinoya), found Respondent Raymond Esponga
and his co-employees about to take a nap on the sheeter machine. She called their attention and prohibited
them from taking a nap thereon for safety reasons.
Esponga and his co-employees then transferred to the mango tree near the staff house. When Vinoya
passed by the staff house, she heard Esponga utter, "Huwag maingay, puro bawal. " She then confronted
Esponga, who responded in a loud and disrespectful tone, "Puro kayo bawal, bakit bawal ba magpahinga?
When Vinoya turned away, Esponga gave her the "dirty finger" sign in front of his co-employees and
said "Wala ka pala eh, puro ka dakdak. Baka pag ako nagsalita hindi mo kayanin."
After being served a notice to explain and several hearings, Sterling dismissed Esponga for gross and
serious misconduct.
In the illegal dismissal case filed by Esponga, the Labor Arbiter ruled in favor of Esponga, stating that
Sterling failed to discharge the burden of proof. NLRC reversed the ruling, stating that the acts of Esponga
were all violations of the Company Code of Conduct. On appeal, the Court of Appeals reversed NLRC’s ruling,
stating that the utterances and gesture did not constitute gross misconduct.
ISSUE:
Whether or not the cause of Esponga’s dismissal amounts to serious misconduct.
RULING: Yes.
Under Article 282 (a) of the Labor Code, serious misconduct by the employee justifies the employer in
terminating his or her employment.
For misconduct or improper behavior to be a just cause for dismissal, the following elements must
concur:
(a) the misconduct must be serious;
(b) it must relate to the performance of the employee's duties showing that the employee has
become unfit to continue working for the employer; and
(c) it must have been performed with wrongful intent.
Primarily, the utterance of obscene, insulting or offensive words against a superior is not only
destructive of the morale of his co-employees and a violation of the company rules and regulations, but also
constitutes gross misconduct.Accusatory and inflammatory language used by an employee towards his
employer or superior can be a ground for dismissal or termination.
Further, Esponga's assailed conduct was related to his work. Vinoya did not prohibit him from taking a
nap. She merely reminded him that he could not do so on the sheeter machine for safety reasons. Esponga's
acts reflect an unwillingness to comply with reasonable management directives.
Finally, Esponga was motivated by wrongful intent. He committed the acts in front of his co-employees,
which evidently showed that he intended to disrespect and humiliate his supervisor.
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 Labor Law I Case Digest
Padilla v. Airborne Security Services, Inc.
G.R. No. 210080, November 17, 2017

FACTS:
On September 1, 1986, Padilla was hired by respondent Airborne Security Service, Inc. (Airborne) as a
security guard. Padilla allegedly rendered continuous service until June 15, 2009, when he was relieved from
his post and was advised to wait for his re-assignment order.
On July 27, 2009, he allegedly received a letter from Airborne directing him to report for assignment
and deployment. He called Airborne's office but was told that he had no assignment yet. On September 9,
2009, he received another letter from Airborne asking him to report to its office. On September 22, 2009, he
personally reported to the office to inquire on the status of his deployment. He was told that Airborne was
having a hard time finding an assignment for him since he was already over 38 years old. Padilla added that he
was advised by Airborne's personnel to resign, but he refused. In December 2009, when he reported to the
office to collect his 13th month pay, he was again persuaded to hand in his resignation letter.
Still not having been deployed or re-assigned, on February 23, 2010, Padilla filed his Complaint for
illegal dismissal, impleading Airborne and its president, respondent Catalina Solis (Solis).
The Labor Arbiter dismissed Padilla’s Complaint. The National Labor Relations Commission affirmed in
toto the Labor Arbiter’s Decision. The Court of Appeals sustained the rulings of the National Labor Relations
Commission and of the Labor Arbiter.

ISSUE:
Whether or not Padilla was constructively dismissed from his employment with respondent, having
been placed on floating status apparently on the basis of his age

RULING:
Yes. Petitioner was constructively dismissed from employment owing to his inordinately long floating
status. The practice of placing security guards on “floating status” or “temporary off-detail” is a valid exercise of
management prerogative but the temporary off-detail must not exceed 6 months. Beyond this, a security
guard’s floating status shall be tantamount to constructive dismissal.
The respondent’s series of letters requiring petitioner to report to the head office did not identify any
specific client to which Padilla would be reassigned hence it is nothing more than a general return-to-work
order.
Respondents argue that it was petitioner who abandoned his work. There are 2 requisites that must
concur for an employee to be considered to have abandoned his work
1. The employee must have failed to report for work or have been absent without a valid or
justifiable reason.
2. The employee must have had a clear intention to sever the Er-Ee relationship --- this is the
more determinative factor which should be manifested through some overt acts.
The conduct of Padilla does not show any intent that he wants to abandon his work. It shows more how
he took every effort to retain his employment. As a consequence of the finding of illegal dismissal, Padilla
would ordinarily be entitled to reinstatement, pursuant to article 294 of the Labor Code. But the case was
remanded to the Labor Arbiter to make a detailed computation of the amounts due to petitioner.

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 Labor Law I Case Digest
Alvin M. De Leon v. Philippine Transmarine Carriers, Inc. and Anna Maria Moraleda
G.R. No. 232194, June 19, 2019

FACTS:
Alvin M. De Leon started as a Hotel Personnel Planner for the Crewing Department of PTC which is a
manning agency acting as an agent for foreign principals engaged in the business of sending Filipino seafarers
on board vessels. During his few years, he was a multi-awarded-personnel and he was also seconded by PTC
to First Maritime Shared Services which is the offshore processing unit of PTC.
Sometime in 2010, he was called to the HR of the company for allegedly violating PTC’s code of
discipline when he was seen on CCTV receiving a pasalubong which was prohibited in the company. His
defense was that he was merely assisting a crewmember in giving a gift to a relative and it was given credence
by the company. In 2012, that Code of Discipline was revised which indicated more clearly its prohibition
against accepting gifts.
Section O. CONCERTED ACTIONS AGAINST COMPANY & OTHER OFFENSES

5. No employee shall offer or accept directly or indirectly any gift with a collective value of Php
500.00 and above. Any item worth Php 500.00 and above should be returned or surrendered to
HR Department. In addition, an employee who accepts any amount of money or any gift in kind
from a crew member, ex-crew member, or representative of a crew member shall be dismissed.
On October 9, 2013, de Leon, along with a co-employee Aaron T. Brillante (Brillante), was caught on
the CCTV accepting a brown bag from another employee Fred Rikko B. Adefuin (Adefuin). The brown bag —
which contained two bottles of Jack Daniel's Whiskey — came from Mr. Mustafa Acar (Acar), a friend and co-
employee of de Leon when he was still working in another vessel, the Oasis of the Seas.
The next day, he was confronted about the incident and he readily admitted that he and Brillante did
accept a gift. On October 25, 2013, de Leon and Brillante were served with a memorandum to explain the
October 9, 2013 incident. They were also served a 30-day Suspension Notice. De Leon admitted to receiving
the bottles of liquor, but insisted that it was not a violation of the company policy for it did not come from a
crewmember but from an outsider. Acar also sent an email to the PTC where he said that there is no personal
favor behind the gift that was extended except for the friendship that they still share till date.
On November 22, 2013, de Leon received a written resolution from PTC notifying him of the termination
of his employment. Meanwhile, PTC also terminated the employment of Brillante.
On January 30, 2014, de Leon filed a case for illegal dismissal with the Labor Arbiter. However, on July
30, 2014, the Labor Arbiter dismissed the case for lack of merit. The NLRC partially granted de Leon’s appeal.
It found the penalty of dismissal too harsh and not commensurate to the act committed, more so because it
was done without wrongful intent. PTC filed for a motion of reconsideration with the NLRC and it reversed its
earlier decision. The NLRC noted that de Leon was well-aware of the company policy, yet he willfully violated
the same. As the penalty provided under PTC's Code of Discipline was dismissal, de Leon's dismissal was
therefore justified. The NLRC likewise took into consideration de Leon's position as Scheduler. It noted that de
Leon's duties and responsibilities made him a member of the managerial staff, and thus, this violation made
him lose the trust and confidence of PTC. All in all, the NLRC held that de Leon was validly dismissed. The CA
dismissed de Leon's Petition for Certiorari primarily for allegedly being filed out of time.
ISSUE:
Whether or not de Leon filed out of time

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 Labor Law I Case Digest
Whether he was validly dismissed by PTC
RULING:
No. The CA erred in holding that de Leon's petition was filed out of time. De Leon timely filed the
Petition for Certiorari when he filed the same on the next business day, or on February 2, 2015. The period or
manner of appeal from the NLRC to the CA is governed by Rule 65, pursuant to the ruling of this Court in  St.
Martin Funeral Home v. National Labor Relations Commission, Section 4 of Rule 65, as amended, states that
the petition may be filed not later than sixty (60) days from notice of the judgment, or resolution sought to be
assailed.
Yes. De Leon was validly dismissed by PTC. De Leon's dismissal was anchored on his violation of
PTC's Code of Discipline, the pertinent provision again reads:

Section O. CONCERTED ACTIONS AGAINST COMPANY & OTHER OFFENSES

5. No employee shall offer or accept directly or indirectly any gift with a collective value of Php 500.00
and above. Any item worth Php 500.00 and above should be returned or surrendered to HR
Department. In addition, an employee who accepts any amount of money or any gift in kind from a crew
member, ex-crew member, or representative of a crew member shall be dismissed.

Offering or accepting any gift with collective value of P500.00 and above should be dealt with
DISMISSAL.
The Court's reading of the relevant rule from PTC's Code of Conduct is that it is not vague, nor is it
unreasonable. The fact that it did not specify the origin of the gift or the purpose for which the gift was given did
not automatically mean that the rule was vague. It simply means that this "no-gift" policy of PTC was absolute,
that is, the origin or the purpose of the gift was irrelevant. In simple terms, the mere act of offering or receiving
a gift constitutes a violation.

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 Labor Law I Case Digest
Norman Panaligan v. Phyvita Enterprises Corp.
G.R. No. 202086, June 21, 2017

FACTS:
Panaligan et al (petitioner) were employees of Phyvita Enterprises corp. (respondent)
Panaligan was employed as a room boy at Phyvita Enterprises corp.
Sometime in Jan 2005, respondent discovered that the amount of 180,000 including some receipts and payroll
were missing.
While the police investigation was pending, the petitioner together with some employees filed a complaint
before the DOLE against respondent for 1.underpayment of wages, 2.non payment of special and legal
holidays, 3.5 days service incentive leave, 4.night shift differential pay, 5.no pay slip, 6.signing of blank payroll.
In the interim, the respondent accused the petitioner of theft and stated that the latter is responsible for the loss
of the money and properties.
Later, respondent terminated the employer-employee relationship between them and the petitioner based on
loss of trust and confidence.
On June 2005, respondent filed a criminal complaint of theft against the petitioner, but the same was dismissed
by the city prosecutor, there being no sufficient evidence. On Nov 2006 petitioner filed a complaint with the LA
alleging that they were illegally dismissed.
Respondent, on their defense, stated that the dismissal was legal because the allege criminal complaint was
enough evidence to produce a substantial evidence.
LA ruled in favor of the respondent.
NLRC reversed the decision of LA and decided in favor of petitioner.
CA reversed the decision of NLRC.
ISSUE:
Whether or not a dismissed criminal complaint is enough ground to terminate an employee based on loss of
trust and confidence.
RULING:
No, In order to dismiss an employee on the ground of loss of trust and confidence, the employee must be guilty
of an actual and willful breach of trust duly supported by substantial evidence.
In the case at hand, respondent failed to adduce evidence that would clearly demonstrate that Panaligan have
committed serious misconduct.
Hence a dismissed criminal complaint does not tantamount to a ground for termination of employment.
Art 282 of Labor code.

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 Labor Law I Case Digest
Continental Micronesia, Inc. v. Basso
G.R. No. 178382-83, Sptember 23, 2015

FACTS:

Petitioner Continental Micronesia is a foreign corporation organized and existing under the laws of and
domiciled in the United States of America. It is licensed to do business in the Philippines. Respondent, a US
citizen residing in the Philippines, accepted an offer to be a General Manager position by Mr. Braden,
Managing Director-Asia of Continental Airlines. On November 7, 1992, CMI took over the Philippine operations
of Continental, with respondent retaining his position as General Manager. Thereafter, respondent received a
letter from Mr. Schulz, who was then CMI’s Vice President of Marketing and Sales, informing him that he has
agreed to work in CMI as a consultant on an “as needed basis.” Respondent wrote a counter-proposal that was
rejected by CMI.

Respondent then filed a complaint for illegal dismissal against the petitioner corporation. Alleging the
presence of foreign elements, CMI filed a Motion to Dismiss on the ground of lack of jurisdiction over the
person of CMI and the subject matter of the controversy.

The Labor Arbiter agreed with CMI that the employment contract was executed in the US “since the
letter-offer was under the Texas letterhead and the acceptance of Complainant was returned there.” Thus,
applying the doctrine of lex loci celebrationis, US laws apply. Also, applying lex loci contractus, the Labor
Arbiter ruled that the parties did not intend to apply Philippine laws.

The NLRC ruled that the Labor Arbiter acquired jurisdiction over the case when CMI voluntarily
submitted to his office’s jurisdiction by presenting evidence, advancing arguments in support of the legality of
its acts, and praying for reliefs on the merits of the case.

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over the subject matter
of the case and over the parties.

ISSUE:

Whether or not labor tribunals have jurisdiction over the case.

RULING:

Yes. The Court ruled that the labor tribunals had jurisdiction over the parties and the subject matter of
the case. The employment contract of Basso was replete with references to US laws, and that it originated
from and was returned to the US, do not automatically preclude our labor tribunals from exercising jurisdiction
to hear and try this case.

On the other hand, jurisdiction over the person of CMI was acquired through the coercive process of
service of summons. CMI never denied that it was served with summons. CMI has, in fact, voluntarily
appeared and participated in the proceedings before the courts. Though a foreign corporation, CMI is licensed
to do business in the Philippines and has a local business address here. The purpose of the law in requiring
that foreign corporations doing business in the country be licensed to do so, is to subject the foreign
corporations to the jurisdiction of our courts.

Where the facts establish the existence of foreign elements, the case presents a conflicts-of-laws issue.
Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case may assume
jurisdiction if it chooses to do so, provided, that the following requisites are met:
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 Labor Law I Case Digest
(1) that the Philippine Court is one to which the parties may conveniently resort to;

(2) that the Philippine Court is in a position to make an intelligent decision as to the law and the
facts; and

(3) that the Philippine Court has or is likely to have power to enforce its decision.

All these requisites are present here.

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 Labor Law I Case Digest
Eastern Shipping Lines v. POEA
166 SCRA 446

FACTS:
The petitioner challenge the decision of Philippine Overseas Employment Administration POEA on the
principal ground that the POEA had no jurisdiction over the case of Vitaliano Saco as he was not an overseas worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an accident in Tokyo,
Japan, March 15, 1985. His widow sued for damages under Executive Order No. 797 and Memorandum Circular No.
2 of the POEA. The petitioner, as owner of the vessel, argued that the complaint was cognizable not by the POEA
but by the Social Security System and should have been filed against the State Insurance Fund. The POEA
nevertheless assumed jurisdiction and after considering the position papers of the parties ruled in favor of the
complainant.

The petitioner argues that the deceased employee should be likened to the employees of the Philippine Air
Lines who, although working abroad in its international flights, are not considered overseas workers.

Moreover, the petitioner questions the validity of Memorandum Circular No. 2 itself as violative of the
principle of non-delegation of legislative power. It contends that no authority had been given the POEA to
promulgate the said regulation; and even with such authorization, the regulation represents an exercise of legislative
discretion which, under the principle, is not subject to delegation.

ISSUE:
Whether or not Memorandum Circular No. 2 has violated the principle of non-delegation of legislative power.

RULING:
No. There was no principles violated. The authority to issue the said regulation is clearly provided in Section
4(a) of Executive Order No. 797. … “The governing Board of the Administration (POEA), as hereunder provided shall
promulgate the necessary rules and regulations to govern the exercise of the adjudicatory functions of the
Administration (POEA).”
It is true that legislative discretion as to the substantive contents of the law cannot be delegated. What can be
delegated is the discretion to determine how the law may be enforced, not what the law shall be. The ascertainment
of the latter subject is a prerogative of the legislature. This prerogative cannot be abdicated or surrendered by the
legislature to the delegate.

The reasons given above for the delegation of legislative powers in general are particularly applicable to
administrative bodies. With the proliferation of specialized activities and their attendant peculiar problems, the
national legislature has found it more and more necessary to entrust to administrative agencies the authority to issue
rules to carry out the general provisions of the statute. This is called the “power of subordinate legislation.”
With this power, administrative bodies may implement the broad policies laid down in a statute by “filling in’ the
details which the Congress may not have the opportunity or competence to provide. This is effected by their
promulgation of what are known as supplementary regulations, such as the implementing rules issued by the
Department of Labor on the new Labor Code. These regulations have the force and effect of law.
 

Discussions:

There are two accepted tests to determine whether or not there is a valid delegation of legislative power:

1. Completeness test – the law must be complete in all its terms and conditions when it leaves the legislature
such that when it reaches the delegate the only thing he will have to do is enforce it.
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2. Sufficient standard test – there must be adequate guidelines or stations in the law to map out the
boundaries of the delegate’s authority and prevent the delegation from running riot.

Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to
step into the shoes of the legislature and exercise a power essentially legislative.

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Ledesma v. NLRC
G.R. No. 174585, October 19, 2007

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German Marine Agencies, Inc. v. Teodolah Caro
G.R. No. 200774, February 13, 2019

FACTS:

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DISCRIMINATION AGAINST RACE, SEX, AND CREED G.R. There is a policy that there should be no
discrimination when it comes to Race, Sex, or Creed Sex – cannot require a person to hire a male when the job can
also be performed by a female

Religion not prefer a particular religion over another Race

R.A. 10991 - Age is a factor when it comes to discrimination

Are these discriminatory factors absolute?

Exclusion – bona fide occupational qualifiation
Call center v. GSIS - Bangungot – work related? SC ruled in favor of call center agent because there is DOUBT as to
what causes Bangungot

Management prerogative 2 limitaitons

1. Exercised in GOOD FAITH; and
2. without GRAVE ABUSE OF DISCRETION

CCTV with AUDIO Valid Management Prerogative? - For purposes of Security YES - For purposes of gathering
evidence – NO

Employees must be AWARE that the CCTV has audio in compliance with Art. 3 of the Consti to be accepted and
admitted as evidence in courts.

STAR PAPER v. SIMBOL – NO SPOUSE RULE TO BE CONSIDERED VALID MANAGEMENT

PREROGATIVE – Requisite: a. If the RULE is Reasonably related to the essential operation of the business b. If
there is a factual basis for believing that all persons would be unable to perform their duties in case their spouses are
there PROOF TO BE PRESENTED BY EMPLOYER

NO SPOUSES IN COMPETING COMPANY – VALID MANAGEMENT PREROGATIVE – DUNCAN CASE

Public and Secular to be accepted as Immoral and lead to valid dismissal MARITAL DISCRIMINATION –
marriage is a condition to retain employment, hence, invalid and violation for the Magna Carta for Women
Limitations of Management Prerogatives Characteristics of Management Prerogatives Inherent and Exclusive

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